EasyVista’s Q1 sales reached €11.3m, +30% growth, identical to FY 2018 number, but it reflects an even better organic performance, as 2019 figures are no longer boosted by the change in contracting mode (c.+10% impact on FY 2018). The group continues to expand on both sides of the Atlantic. The Q1 performance comforts our FY +20% growth in sales expectation.
A very strong Q1
Q1 19 sales were up 30%, after +9% in Q4 18, and +30% for the full year. We remind that since Q3 17, EasyVista primarily sells its solutions via a three-year renewable licence (RL) mode, as a substitute to the traditional SaaS mode, the consequence of which is an earlier recognition of revenue, as RL captures c.80% of a three-year revenue contract in year one, while the SaaS model captures a third in each year.
This boosted booked figures in the switching period (c.+10% in 2018), a phenomenon which has now ended. In Q1, RL represented 47% of sales and SaaS 21%, vs. respectively 38%/32% in Q4 17, the first quarter in which SaaS sales were lower than RL.
The new version of the group’s EV Service Management (main product) “Oxygen”, is proving to be successful as sales have accelerated since launching. In addition, “EV Self Help”, saving 20-30% of a user’s tickets towards IT people, increases its proportion of the group’s total sales (c.10%), thanks to Knowesia’s technology. This 2017 acquisition has been fully merged since January 2019.
We confirm our recent changes in the DCF model and target price
We have namely improved our sequence of 2019-21 assumptions, after making some changes to our model following the 3 April analysts meeting. Growth momentum in 2019-20 should be close to +20% p.a., triggering a significant EBITDA margin growth, as c.90% of costs are fixed. Management’s 20% EBITDA/sales target by 2021 (from 10% in 2018) looks realistic.
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