Recommendation: BUY(BUY) Risk: HIGH (HIGH) Price Target: EUR 20.00 (20.00) 04 April 2012 FY11 results: No surprises so far Share price (dark) vs. TecDAX Final FY11 results: On 30 March 2011 Vectron Systems AG reported FY11 results that were in line with our expectations. In the top line sales surged yoy by 2.2% to EUR 22.5m (our estimates: EUR 22.4m). The segment POS Systems contributed more than 80% to the overall company sales while the rest was generated in the segments Software and Components. With 67.2% Germany remains Vectron s core geographic market in terms of sales contribution followed by other European markets (29.7%). Operating performance: On the operating level EBITDA declined to EUR 2.0m (our estimates: EUR 1.9m) from EUR 2.3m in previous year. The decline was driven by higher expenses related to the delays 1) in the introduction of the new stationary POS Systems and 2) rollout of the bonvito. EBIT in FY11 came in at EUR 0.6m in line with our expectations of EUR 0.6m. On the bottom line, net income amounted to EUR 74k (our estimates: EUR 23k). Operating CF amounted to EUR 720k resulting in a FCF of EUR -103k due to higher investments. Overall cash and cash equivalents declined to EUR 7.1m (incl. securities of EUR 2.0m) from EUR 7.7m in previous year. For FY11 the management will propose a dividend to EUR 0.30/share to the AGM. New estimates: Our checks with the company point to a solid start into FY12E expecting first quarter 2012 top line of EUR 5.5m with a positive operating result. However given the slower than expected market introduction of the new stationary POS Systems (up to now only POS Vario II introduced) we cut our FY12E sales forecast to EUR 25.2m (previous: EUR 27.7m). This combined with lower expenses (i.e. FY12 being the final year of annual amortization expenses of EUR 1.1m for licenses and patents) should allow for higher operating leverage. Thus we project EBIT of EUR 1.6m and EUR 2.6m, translating into respective net income of EUR 0.8m and EUR 1.5m for FY12E and FY13E. Furthermore we assume further gradual increase in DPS to EUR 0.40/share and EUR 0.60/share for FY12E and FY13E, respectively. Recommendation: We reiterate our BUY and PT EUR 20.00/share recommendation. Key data Y/E 31.12., EUR m 2009 2010 2011 2012E 2013E Total output 20.6 22.0 22.7 25.2 27.7 EBITDA 2.2 2.3 2.0 2.7 3.2 EBIT 0.8 0.9 0.6 1.6 2.6 Net result 0.1 0.3 0.1 0.8 1.5 EPS 0.07 0.20 0.05 0.52 1.03 DPS 0.00 0.30 0.30 0.40 0.60 Gross margin 60.5% 60.0% 58.8% 59.2% 59.2% EBIT margin 3.8% 4.3% 2.9% 6.5% 9.3% EV/EBITDA 7.7 7.4 8.6 6.3 5.4 EV/EBIT 21.8 18.1 26.4 10.4 6.6 P/E 180.4 59.0 n.m. 22.6 11.5 Source: CBS Research AG, Vectron Systems AG Change Sources: CBS Research AG, Bloomberg Internet: www. vectron.de WKN: A0KEXC Reuters: V3SG.DE Company profile: Share data: Share price (EUR, last closing price): Shares outstanding (in thousands): Market capitalisation (EURm): Enterprise value (EURm): Ø daily trading volume (6 m., no. of shares): Performance data: High 52 weeks (EUR): Low 52 weeks (EUR): Absolute performance: (12 months) Relative performance (vs. TecDAX): 1 month 3 months 12 months Shareholders: Jens Reckendorf Thomas Stümmler Jochen Fischer Free float Sector: Technology ISIN: DE000 A0KEXC7 Bloomberg: V3S GY Vectron Systems AG is a leading provider of intelligent POS systems for the networking of branch shops. With an installation basis of more than 100,000 POS systems, Vectron belongs to the top European manufacturers and is market leader in the German catering trade and bakery industry. 11.80 1,500 17.7 17.1 1,660 15.60 12.01-20.4% -2.4% 2.6% -10.5% 32.9% 32.9% 6.0% 28.2% Financial calendar: 1Q12 results April 2012 Author: 2011 2012E 2013E new old new old new old Sales - 22.7 25.2 27.7-27.7 EBIT - 0.6 1.6 3.9-2.6 EPS - 0.05 0.52 1.16-1.03 Veysel Taze (Analyst) Daniel Kukalj (Analyst) Close Brothers Seydler Research AG Phone: +49 (0)69-977 84 56 0 E-Mail: research@cbseydlerresearch.ag www.cbseydlerresearch.ag Please notice the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by 34b WpHG (Securities Trading Law) at the end of this document. This financial analysis in accordance with 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others in connection with their trading activities, occupation, or employment.
Profit and loss account HGB 1,000 2008 2009 2010 2011 2012E 2013E Sales 23,597 20,515 22,028 22,523 25,226 27,749 YoY grow th -7.2% -13.1% 7.4% 2.2% 12.0% 10.0% Inventory changes 19 44 5 151 0 0 Other own work capitalized 0 0 0 0 0 0 Total output 23,616 20,559 22,033 22,674 25,226 27,749 Cost of materials -8,702-8,129-8,811-9,333-10,292-11,321 as % of total output -36.8% -39.5% -40.0% -41.2% -40.8% -40.8% Gross profit 14,914 12,430 13,222 13,341 14,934 16,427 as % of total output 63.2% 60.5% 60.0% 58.8% 59.2% 59.2% Personnel expenses -4,558-4,919-5,193-5,461-5,878-6,382 as % of total output -19.3% -23.9% -23.6% -24.1% -23.3% -23.0% Other operating income 208 175 216 208 202 222 as % of total output 0.9% 0.8% 1.0% 0.9% 0.8% 0.8% Other operating expenses -5,366-5,449-5,933-6,103-6,559-7,104 as % of total output -22.7% -26.5% -26.9% -26.9% -26.0% -25.6% EBITDA 5,198 2,237 2,312 1,985 2,699 3,163 as % of total output 22.0% 10.9% 10.5% 8.8% 10.7% 11.4% Depreciation and amortization -1,385-1,451-1,369-1,336-1,057-573 as % of total output -5.9% -7.1% -6.2% -5.9% -4.2% -2.1% EBIT 3,813 785 943 649 1,643 2,590 as % of total output 16.1% 3.8% 4.3% 2.9% 6.5% 9.3% Net financial result 189 40 66 93 105 116 EBT 4,002 825 1,009 742 1,748 2,706 as % of total output 16.9% 4.0% 4.6% 3.3% 6.9% Income taxes -1,164-264 -176-123 -524-812 as % of EBT -29.1% -32.0% -17.5% -16.6% -30.0% -30.0% Other taxes (reclassified as operational) -4.0-15.1-5.9-5.9 0.0 0.0 Net income 2,834 546 827 613 1,223 1,894 as % of total output 12.0% 2.7% 3.8% 2.7% 4.8% 6.8% Profit transfer agreement -130-129 -163-175 -87 0 Jouissance right compensations -146-318 -364-364 -353-353 Net income attributable to shareholders 2,559 98 300 75 783 1,542 as % of total output 10.8% 0.5% 1.4% 0.3% 3.1% 5.6% Weighted average shares outstanding (in thousand 1,500 1,500 1,500 1,500 1,500 1,500 Basic earnings per share (EUR) 1.71 0.07 0.20 0.05 0.52 1.03 Dividend per share 1.40 0.00 0.30 0.30 0.40 0.60 Source: Vectron Systems, CBS Research AG www.cbseydlerresearch.ag Close Brothers Seydler Research AG 2
Research Schillerstrasse 27-29 60313 Frankfurt am Main Phone: +49 (0)69 977 8456-0 Roger Peeters +49 (0)69-977 8456-12 Member of the Board Roger.Peeters@cbseydlerresearch.ag Martin Decot +49 (0)69-977 8456-13 Igor Kim +49 (0)69-977 8456-15 Martin.Decot@cbseydlerresearch.ag Igor.Kim@cbseydlerresearch.ag Anna von Klopmann +49 (0)69-977 8456-10 Gennadij Kremer +49 (0)69 977 8456-23 Anna.Klopmann@cbseydlerresearch.ag Gennadij.Kremer@cbseydlerresearch.ag Daniel Kukalj +49 (0)69 977 8456-21 Ralf Marinoni +49 (0)69-977 8456-17 Daniel.Kukalj@cbseydlerresearch.ag Ralf.Marinoni@cbseydlerresearch.ag Manuel Martin +49 (0)69-977 8456-16 Felix Parmantier +49 (0)69-977 8456-22 Manuel.Martin@cbseydlerresearch.ag Felix.Parmantier@cbseydlerresearch.ag Marcus Silbe +49 (0)69-977 8456-14 Veysel Taze +49 (0)69-977 8456-18 Marcus.Silbe@cbseydlerresearch.ag Veysel.Taze@cbseydlerresearch.ag Ivo Višić +49 (0)69-977 8456-19 Ivo.Visic@cbseydlerresearch.ag Institutional Sales Schillerstrasse 27 29 60313 Frankfurt am Main Phone: +49 (0)69 9 20 54-400 Raimar Bock +49 (0)69-9 20 54-115 Head of Sales Raimar.Bock@cbseydler.com Rüdiger Eich +49 (0)69-9 20 54-119 Sule Erkan +49 (0)69-9 20 54-107 (Germany, Switzerland) Ruediger.Eich@cbseydler.com (Sales-Support) Sule.Erkan@cbseydler.com Dr. James Jackson +49 (0)69-9 20 54-113 Klaus Korzilius +49 (0)69-9 20 54-114 (UK) James.Jackson@cbseydler.com (Benelux, Germany) Klaus.Korzilius@cbseydler.com Stefan Krewinkel +49 (0)69-9 20 54-118 Markus Laifle +49 (0)69-9 20 54-120 (Execution, UK) Stefan.Krewinkel@cbseydler.com (Execution) Markus.Laifle@cbseydler.com Michael Laufenberg +49 (0)69-9 20 54-112 Bruno de Lencquesaing +49 (0)69-9 20 54-116 (Germany) Michael.Laufenberg@cbseydler.com (Benelux, France) Bruno.deLencquesaing@cbseydler.com Christopher Seedorf +49 (0)69-9 20 54-110 Janine Theobald +49 (0)69-9 20 54-106 (Sales-Support) Christopher.Seedorf@cbseydler.com (Austria, Germany) Janine.Theobald@cbseydler.com Bas-Jan Walhof +49 (0)69-9 20 54-105 (Benelux) Bas-Jan.Walhof@cbseydler.com www.cbseydlerresearch.ag Close Brothers Seydler Research AG 3
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LOW: The volatility is expected to be lower than the volatility of the benchmark MEDIUM: The volatility is expected to be equal to the volatility of the benchmark HIGH: The volatility is expected to be higher than the volatility of the benchmark The following valuation methods are used when valuing companies: Multiplier models (price/earnings, price/cash flow, price/book value, EV/Sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer group comparisons, historical valuation approaches, discounting models (DCF, DDM), break-up value approaches or asset valuation approaches. The valuation models are dependent upon macroeconomic measures such as interest, currencies, raw materials and assumptions concerning the economy. In addition, market moods influence the valuation of companies. The figures taken from the income statement, the cash flow statement and the balance sheet upon which the evaluation of companies is based are estimates referring to given dates and therefore subject to risks. 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