Addnode Group – Steady as she goes

Research Update

2016-02-11

11:40

Addnode reported a net sale of 614 MSEK (2% below our estimate) and an EBITA of 70 MSEK (expected 76 MSEK). TechniaTranscat continues to beat our expectations and the company already sees some synergy effects. The high revenue growth, of 33%, during the quarter was primarily driven by the Transcat acquisition. The upcoming change in the sales model for Autodesk-licenses, within Design Management, will start to affect the revenue and margin levels from H2 2016 and onwards. We welcome the change as the recurring revenue and financial stability will increase, however the reported numbers will temporarily look depressed, despite an actual increase in business volume. We have made only minor adjustments to our estimates and reiterate our Fair value, in a Base-case, at 60 SEK per share. We estimate a Fair value range of 24-75 SEK per share. In our view, the current share price indicates a relatively neutral risk-reward situation for investors.

KL

Kristoffer Lindström

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