Original-Research: KPS AG - von GBC AG

Einstufung von GBC AG zu KPS AG

Unternehmen: KPS AG

ISIN: DE000A1A6V48

Anlass der Studie: Research Update

Empfehlung: Buy

Kursziel: 12.00 EUR

Kursziel auf Sicht von: 30.09.2021

Letzte Ratingänderung: -

Analyst: Matthias Greiffenberger, Cosmin Filker

Guidance withdrawn nevertheless, still undervalued.

At EUR 94.22 million (previous year: EUR 91.29 million) in the first half

of 2019/20, sales were in line with expectations and a slight growth of

3.2% (previous year: 3.3%) was achieved despite the corona crisis. The

reason for the nevertheless positive sales trend was an increased

investment in marketing and sales offensives. This enabled the company to

decouple itself from the general negative economic trend. The BDU business

climate index quoted by the company fell by 29.9 points to 70.4 points,

although KPS AG as a service provider in the digitization industry should

generally be less affected by the general business climate.

The corona crisis nevertheless affected KPS AG to some extent, which led to

the suspension of some projects. According to the management, however, this

does not mean a loss of sales, but a postponement to a later date. In

addition, KPS AG was already optimally positioned to implement the social

distancing regulations well before the corona crisis. Remote workstations

via VPN are being used more and more and, even before the crisis, remote

solutions were already being used extensively for the rollout of

digitalisation solutions.

The pausing of the transformation projects is reflected in the segment

report. At EUR 84.95 million (previous year: EUR 85.08 million), the

Transformation Consulting segment remained at the level of the previous

year. The growth driver was thus the Products/Licenses segment, which was

very dynamic with growth of 27.8% to EUR 8.55 million (previous year: EUR

5.55 million).

At EUR 13.05 million (previous year: EUR 13.23 million), EBITDA for the

first half of 2019/20 was almost at the same level as in the previous year.

Due to the first-time application of IFRS 16, there was a cash-neutral

positive earnings effect of EUR 2.5 million. In addition, higher earn-out

provisions of EUR 1.1 million (previous year: EUR 0.7 million) were formed

due to the better than expected development of the Spanish subsidiary ICE

Consultants Europe S.L. As a result of the corona crisis, general value

adjustments of EUR 0.8 million were recorded, which also had an effect on

earnings. Adjusted for the above-mentioned effects, EBITDA amounted to EUR

12.5 million (previous year: EUR 13.9 million) and was thus 10.1% below the

adjusted figure for the previous year.

On the cost side, the cost of materials rose in particular due to the

acquisition of software for a customer project, increasing by 8.1% to EUR

34.84 million (previous year: EUR 32.24 million). This led to an increase

in the cost of materials ratio from 35.3% to 37.0%. Pure external services

remained almost constant at around EUR 31 million. At EUR 33.87 million

(previous year: EUR 33.76 million), personnel expenses also remained at the

previous year's level.

Thus, despite the corona crisis, a stable revenue and earnings performance

was reported for the first half of 2019/20.

On April 27, 2020, the company published that the guidance for the current

fiscal year 2019/20 will be withdrawn. Previously, the guidance had

provided for revenues in the amount of EUR 181-191 million and EBITDA of

EUR 28-36 million. On the one hand, despite the corona crisis, additional

projects and customers were won, but on the other hand, some projects were

paused and the further development of new and existing customers can no

longer be planned by the management. Against the background of the current

development and the presumably longer sales cycles, combined with pauses in

existing projects, we expect a slight decline in sales and earnings. The

guidance issued leaves a lot of room for interpretation, but we

nevertheless assume that the majority of existing projects will be

continued and that there will only be a slight decline in sales in the

current 2019/20 financial year. We expect sales revenues to decline by 3.9%

to EUR 173.60 million (previous year: EUR 180.66 million) in the current

financial year 2019/20 and to increase again by 4.0% to EUR 180.54 million

in the financial year 2020/21.

Against the background of higher expenses for sales offensives in

combination with ongoing projects, there should only be a slight decline in

sales. We assume that the corona crisis will also be used to some extent as

a driver for digitization campaigns, as home office solutions have been

used more frequently and online retailing has also benefited from this

development. KPS should benefit from this in the medium term as a

pan-European provider for transformation projects.

With the withdrawal of the guidance, we expect a significant decline in

earnings to reflect a conservative scenario. On the one hand, the

management does not expect any further earn-out burdens; on the other hand,

increased use could be made of sales initiatives to represent medium-term

sales growth.

Due to the short-term burdens from the corona crisis, we are forecasting a

decline in EBITDA to EUR 15.50 million for the current 2019/20 financial

year (previous year: EUR 22.55 million), and to EUR 15.12 million for the

2020/21 financial year.

Against the background of the reduced forecast, we are lowering our price

target to EUR 12.00 (previously: EUR 13.20) and continue to assign a Buy

rating due to the still very high upside potential of 98.7%.

Die vollständige Analyse können Sie hier downloaden:


Kontakt für Rückfragen

Jörg Grunwald



Halderstraße 27

86150 Augsburg

0821 / 241133 0


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Date and time of completion of the study: 29.06.2019 (11:00) - German Version: 24.06.2020 (17:00)

Date and time of first transmission: 30.06.2019 (09:30) - German Version: 25.06.2020 (09:30)

Validity of the price target: until max. 31.12.2021

-übermittelt durch die EQS Group AG.-

Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.

Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung

oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.