AlphaValue Corporate Services Fundamental Analysis FR
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AlphaValue Corporate Services
This research has been commissioned and paid for by the company and is deemed to constitute an acceptable minor non-monetary benefit as defined in MiFID II

Swissquote Group Holding

CR
Bloomberg   SQN SW
Internet banking/Fintech  /  Switzerland  Web Site   |   Investors Relation
Licensed to conquer Europe

Sustainability score
Company (Sector)
6.6 (5.1)

Sustainability is made of analytical items contributing to the E, the S and the G, that can be highlighted as sustainability precursors and can be combined in an intellectually acceptable way. This is the only scale made available

  Score Weight  
Governance   
Independent directors rate 5/10 25%More ...
Board geographic diversity 4/10 20%
Chairman vs. Executive split 5%
Environment   
CO² Emission 10/1025%More ...
Water withdrawal 1/1010%
Social   
Wage dispersion trend9/105%More ...
Job satisfaction10/105%
Internal communication10/105%


Sustainability score 6.6/10 100%  
Sustainability matters
What the numbers say

Swissquote’s sustainability score is very slightly below the sector’s average. Social and Governance pull the firm towards a great performance while the Environmental score is a drag mainly due to lack of reported data.

Our analysis

Beyond the very satisfying performance on Social and Governance, which are very much under management’s control, the hiccup might come from the Environmental side.
In fact, Swissquote is structurally dependent on its customers’ behaviour and their willingness to invest responsibly and invest the right products (cryptos, which are highly energy-consuming). While the firm, in the future, will launch further trading products/assets and attract more customers, this will be at the expense of customers potentially looking for profits instead of a “sustainable” and “responsible” behaviour.


Environmental score
Company (Sector)
5.95 (3.69)
Data sets evaluated as trends on rolling calendar, made sector relative
ParametersScoreSectorWeight
CO² Emission10/105/10 30%
Water withdrawal1/103/10 30%
Energy10/104/10 25%
Waste1/103/10 15%
Environmental score5.95  100%
Environment matters
What the numbers say

Swissquote’s Environmental score is very low and below the sector’s. This is fully due to the lack of available data.

Our analysis

We believe that Swissquote’s Environmental score can only improve as the firm discloses further information on its environmental footprint.
Beyond that, we believe that its business is very sensitive. In fact, its score would be very much tied to its customers’ investment philosophies and willigness to invest responsibly.

Environmental metrics

40
Energy (GJ) per €m in capital
employed
1
CO² tons per €m in capital
employed

Cubic meter water
withdrawal per €m in capital
employed

Tons waste generated per €m in
capital employed
Swissquote Group Holding Other Financials
Sector figures
Company CountryEnvironment
score
Energy
(total,
in GJ)
CO2
Emissions
(in tons)
CO2
Compensation
(in tons)
Water
Withdrawal
(in m3)
Waste
(total,
(in tons)
        
Ackermans & van Haaren 1/10 629 811 
Adyen 5/1049,9692,443   
Amundi 10/1069,7392,932 19,753161
AURELIUS BH 4/10 507   
Bolloré 10/101,017,954395,260 1,484,07331,710
Bouygues 2/1030,772,8002,250,000 1,000,000 
Corporacion Financiera Alba 10/1023,8833,090 31,0647,469
Deutsche Beteiligungs AG BH 4/10 210   
Deutsche Boerse 10/10275,9153,989 74,63322
DWS 4/10 4,329   
EdenRed 4/1053,3347,427 32,312467
En+ 2/10287,300,00050,600,000 852,000,000213,300,000
Eurazeo 6/1010,062,709790,076 37,181,10841,600
Euronext NV 6/1023,5224,660 253,892 
Exor 1/10     
GBL 4/10 200   
Hal Trust 1/10     
HBM Healthcare Investments BH 1/10     
Heineken Holding 7/1025,458,2001,516,000 92,800,0004,352,600
Industrivärden 4/10 24   
Investor 6/103,96788   
Kinnevik Investment 4/10 17   
London Stock Exchange Group 10/10240,8764,138 1,166185
MPC Capital BH 1/10     
Nexi 5/1095,5716,471 974,300751
Partners Group BH 4/10 578,076 2,374,472 
Picanol 1/10     
Porsche 1/10     
Prosus 3/1081,40823,561 n/an/a
Sonae 8/102,705,233163,306 1,861,48195,556
Swissquote Group HoldingCR 6/1011,279362   
VIEL & Cie 1/10     
Vivendi 7/10536,72238,194  20,237
Wendel 4/10 101   
Wise 3/107,486807   
Worldline 10/10336,7818,993 16,8261,501

Social score
Company (Sector)
7.9 (5.8)
Social matters
What the numbers say

Swissquote’s Social score is well above the sector’s. This is mainly driven by qualitative metrics as well as the average wage trend (meaning a positive wage evolution) and share of added value taken up by taxes (meaning a fair tax contribution).

Our analysis

Swissquote’s workforce profile is qualified and much demanded. In order to feed its growth, the firm will have to compete with the broader FinTech/Neo bank peers, implying an attractive packages. We believe that Swissquote has the resources to attract people with these profiles and, consequently, should maintain a high Social score.

Quantitative metrics (67%)
Set of staff related numerical metrics available in AlphaValue proprietary modelling aimed at ranking on social/HR matters
ParametersScoreWeight
Staffing Trend6/10 15%
Average wage trend9/10 30%
Share of added value taken up by staff cost4/10 20%
Share of added value taken up by taxes8/10 15%
Wage dispersion trend9/10 20%
Pension bonus (0 or 1)0
Quantitative score7.4/10 100%
Qualitative metrics (33%)
Set of listed qualitative criterias and for the analyst to tick

ParametersScoreWeight
Accidents at work10/10 25%
Human resources development7/10 35%
Pay10/10 20%
Job satisfaction10/10 10%
Internal communication10/10 10%
  
Qualitative score9.0/10 100%


Sector figures
CompanyCountrySocial Score Quantitative scoreQualitative scoreStaffing
      
Investor 8.08.56.914,989
Worldline 7.67.48.015,906
Wise 7.58.26.23,503
Prosus 7.06.19.033,454
Nexi 7.07.85.58,985
Adyen 6.86.67.22,482
AURELIUS BH 6.86.77.011,475
Vivendi 6.76.18.036,000
Industrivärden 6.65.19.714.0
Bouygues 6.56.85.9169,250
Euronext NV 6.35.97.01,160
Picanol 6.25.67.66,892
Ackermans & van Haaren 6.15.77.222,887
Exor 6.15.08.325.0
VIEL & Cie 6.06.35.32,470
Amundi 5.96.15.64,582
Heineken Holding 5.94.97.982,668
Deutsche Beteiligungs AG BH 5.74.97.681.0
DWS 5.74.77.93,410
Eurazeo 5.76.73.721,815
Deutsche Boerse 5.54.18.310,100
London Stock Exchange Group 5.55.35.817,900
EdenRed 5.44.86.610,151
Bolloré 5.26.32.972,546
Sonae 5.26.13.346,983
Wendel 5.06.22.792,681
Hal Trust 4.86.12.126,521
Kinnevik Investment 4.72.59.340.0
Partners Group BH 4.76.41.31,731
En+ 4.64.74.587,302
Corporacion Financiera Alba 4.45.32.71,850
MPC Capital BH 4.33.26.7210
GBL 4.24.93.086,946
Porsche 4.03.55.1970
HBM Healthcare Investments BH 3.91.09.79.00

Sustainability / ESG by AlphaValue:

Doubt driven, focused on dynamics


AlphaValue was set up in 2009 as an ESG native firm: since inception, no research could be published without filling up the ESG relevant items. ESG has always been there as a natural building block of the research effort.

Without much pretence, AlphaValue has accumulated 11 years of proprietary, practical data in a consistent way that has been made to “talk” with financial data. The efforts have been aimed at solving the main conundrum of ESG analytics: avoiding useless and noisy data. AlphaValue ESG data is intimately connected to the fundamental research work and its continuous updating process. In other words, AlphaValue ESG data can be made to resonate at will in terms of financial implications for those investors with the willingness to do so.

Over the last 3 years, this data, or rather the dynamic of this data, has been put at work so that it impacts directly and consistently on valuations across AlphaValue’s 450 + stocks universe. This is considerable progress vs. the dominant “consumption” of ESG raw data: ESG-type conclusions are sitting next to valuation fundamentals but hardly any investor is in a position to bridge effectively the two in a consistent and repeatable way. It takes more than a spreadsheet to get stable and auditable results that work 100% of the time.

AlphaValue reckons that it currently is the only equity research provider in Europe to have reached this stage: a perfectly smooth on-boarding of ESG data, on a continuing basis, impacting valuation fundamentals day and night.

This is available on every stock, every sector, every stock selection, every day.


Heretical ESG opinions?


ESG is a contradiction in terms. Without a good Governance, the Social and Environment items will never show progress. Social is for stakeholders and thus unlikely to please shareholders. The long-term view that good pay/working conditions are ultimately good for shareholders is, like any promise, better left to those who want to believe in it. It does not work for normal investment horizons

Environmental gains will not happen without good Governance but this is not enough as environmental progress will not happen without coercion from governments/supra-governments. There is no reason why a corporate will spend more for a possible collective gain tomorrow when it can have better returns now for its shareholders.

The environment is a cost of massive complexity and a universal one as data improves and allows for intricate tracking of what corporates are up to. There is no practical way a corporate can be valued through a web of changing definitions of environmental data. AlphaValue holds the view that all corporates are made to pay through lower GDP growth expectations resulting from friction costs. The only dimension that really matters from an investment perspective is whether a given corporate makes an extra effort vs. peers. A good ‘E’ rating shall not be driven by absolute levels but by the dynamic of emission controls relative to peers. Dumping cement stocks because they spit out carbon is a narrow view of what ESG implies.

Sustainability scores only

AlphaValue always refused to supply a pecking order of its coverage along some improbable ESG scale. It just does not make sense to mix opposing signals in a single ranking.

Sustainability is a different proposition where analytical items contributing to the E, the S and the G can be highlighted as sustainability precursors and combined in an intellectually acceptable way. This is the only scale made available by AlphaValue.

Sustainability impacts target prices

From 1-12-2020, AlphaValue substituted sustainability metrics for its Governance and Social ones when it comes to impacting valuations;

Indeed since 2019, all DCF (or DCF equivalents for Financials) have been impacted by Governance and Social metrics to connect directly ESG-type findings into share price targets and bring consistency across the board. The impact is driven by adjusting the small ‘g’ conventionally used to assess the growth to infinity. This is being tweaked to recognise, say, that good governance ultimately pays off.

The same procedure is now stemming from Sustainability metrics instead.

For the record, this has been made possible as AlphaValue has finalised its proprietary E scoring, now extended to 4 items (GHG, Waste, Water, Energy) on which a degree of data stability seems to emerge.