EasyVista’s Q3 sales were up 25% after 50% in H1, leading to +42% for 9 months. Though current quarters are still boosted by the change in contracting mode, organic momentum shoud remain above +10% per annum.

Sales 9 months up 42%

Sales were up 38% in Q1, 62% in Q2 and 25% in Q3. Over 9 months, the renewable licences sales stemmed from nil (€0.3m) to €6.6m, and now represents 26% of total sales, while SaaS still represents 34% of sales. We recall that renewable licence captures c.80% of a 3-year revenue contract in year one, while the SaaS model captures a third each year. This explains why sales are boosted in the switching period, as new clients primarily sign renewable licences.

Organic momentum similar to H1

That said, Q3 organic growth, restating the favourable impacts resulting from the current change in contracting mode was similar to H1, c.+20%. The impact of new businesses can lead to variability from one quarter to another; the trend is more meaningful on a full-year basis.

Significant marketing momentum

After several years of reinforcement of management and the sales force, EasyVista met its growth targets, thanks to the replacement market through its codeless and modular solution, reinforced by Self Help (brought by the Knowesia acquisition). Significant new clients were gained, in both Europe (Banque de France, Kaufman & Broad, Conseil Régional d’Ile-de-France) and the USA (USA Truck). Note that dynamic sales of +27% over 9 months of the traditional perpetual licences is due to French public entities (due to yearly budget management). Overall, management confirms a 2018 growth above 20%.

No change in our 2018 assumptions nor medium-term trends

2018 H1 showed a clear coverage of the fixed cost base, for the first time. For the full year, we reckon a c.10% EBIT margin, which should increase to operating leverage by 2020, when total sales should reach 18%.

Consequently, we confirm our €48 target price.