H2 patterns are similar to H1’s, which showed for the first time a significant positive EBITDA (€2.1m vs €-1.8m in H1 17), confirming the consistency of the business model. EasyVista’s products/marketing/sales assets were strengthened in previous years, which now comforts the growth pace, alongside the EBITDA margin.
As EasyVista runs a fixed cost model, margins grow rapidly after reaching the breakeven point, which was done in 2017. 2018 is the first fully impacted year, with a 10.4% EBITDA margin, vs <0 in FY 17. H1 showed a better margin (11.4%) than in H2 (9.3%), which can be explained by substitution impacts (see our 13 February comment), as well as sustained marketing efforts to capture new markets.
France (sales +32%) and the USA (+38% excl. change), the major group’s markets, showed significant market successes, in both the private and public sectors: in France, amongst others, the Department of Human Services, Bank of France, the National Assembly, Plastic Omnium, Sopra Immobilier, Eiffage, Gemalto, CFF; in In the USA, we can mention Des Moines, USA Truck, schools & universities and in Self-Help solution,Carestream Dental.
The coming years should continue to prove dynamic. EasyVista Edge is based on a global solution to make delivery and support easy to implement, user-friendly and with codeless workflow settings. Customer ROI is strong, and we can contemplate positive trends for the year ahead. We assume a 15-20% organic growth trend.
Booked growth in 2019 is unlikely to reach this organic trend, due to the backlog impact of the substitution in contracting mode, which boosted revenue recognition in 2017 and 2018. Even though, we still expect +10% growth in sales. Management also anticipates an increase in the EBITDA margin (we expect 12% vs 10% in 2018.
We confirm our scenario of growth by 2020, where we expect sales of €47m and €8m of EBITDA. Our DCF results in a €49 target price, unchanged.
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