AlphaValue Corporate Services Fundamental Analysis FR
Back to
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


Bloomberg   KEYW BB
Smart Cards-Security  /  Belgium  Web Site   |   Investors Relation
From hardware provider to fintech specialist
Earnings/sales releases09/11/2018

Still in transition, the group showed revenue growth but lower profitability


Keyware’s revenue was up by +2.6% yoy in the first nine months of FY18 to €14,126k. By division, the Terminal division’s revenue decreased by 16% yoy to €5,525k, the Authorisations division increased by +6.15% yoy to €6,651k and the growing Software division was up by +182.6% yoy to €1,950k. This significant growth principally results from the Magellan contribution for the first three quarters of FY18, compared to only one quarter in FY17.
The gross margin, for the first nine months of FY18, represented +4.3%, well short of the first nine months of FY17 (+15.1%). This drop is explained by a lower margin in the Terminals division, the integration of Magellan and EasyOrder’s start-up phase, which together have led to a 70.8% decrease in profit before tax (€606k vs. €2,079k in 9m FY17). Operating profit was €1,316k, lower than in 9m FY17 and the financial result was €157k, again lower.


The soft bet is paying off

The group, which recently decided to become a software provider, has started to show significant revenue in this division. Sales have quickly grown in the first nine months of the year (+182.6% yoy), mainly thanks to a full Magellan contribution. The financial services, provided by Magellan, continue their expansion. The company has signed, for the first time, in Q3 18 contracts for purchase instalments in Belgium. EasyOrder, which offers traders the opportunity to offer their customers a webshop and a personalised app, continues to develop strongly. The company sees a significant opportunity in Belgium and expects a 20% of penetration in five years’ time.

Card payment replaces cash payment, to the benefit of the Authorisations division

While the Terminals division’s results are diminishing, those of the Authorisations division continue to grow. The explanation is that terminals’ sales are approaching saturation phase and demand is now decreasing (-26% yoy in Q3 revenue). Even so, the number of card payments is steadily increasing, which has benefited and will continue to benefit the Authorisations division.


The group continues its transition phase, which leads to increasing revenue, but operating profitability is currently weak due to significant cost increases. Following the 9m FY18 results, we will slightly downgrade our forecasts as we have been too optimistic on the company’s capacity to face the transition costs. However, we remain confident in the strategy to become a pure software provider, which should push the results in the coming years.

Upside 101%
Price (€) 1.00
Market Cap (€M) 22.4
Perf. 1W: 2.05%
Perf. 1M: -7.01%
Perf. 3M: 48.5%
Perf Ytd: 19.9%
10 day relative perf. to stoxx600: -1.41%
20 day relative perf. to stoxx600: -8.67%

16 Sep 20 Earnings/sales releases
A pivotal year for the Authorisations division

26 May 20 Earnings/sales releases
The right time to establish itself as a software pr...

18 Mar 20 Earnings/sales releases
Positioned to take advantage of increasing pow...

13 Nov 19 Earnings/sales releases
The challenge remains intact

30 Aug 19 Earnings/sales releases
Software continues to drive up the top-line

15 Mar 19 Earnings/sales releases
Still in transition

09 Nov 18 Earnings/sales releases
Still in transition, the group showed revenue gro...

16 Oct 18 Earnings/sales releases
Strong revenue growth, but profitability still imp...