AlphaValue Corporate Services Fundamental Analysis FR
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Keyware

CR
Bloomberg   KEYW BB
Smart Cards-Security  /  Belgium  Web Site   |   Investors Relation
The soft bet is paying off
Earnings/sales releases16/09/2021

Back in positive territory thanks to recovery in authorisations segment

Strong set of H1 FY21 results thanks to both easy comps linked to the pandemic and, especially, the continuing evolution of the migration to the new transaction partner.


Fact

H1 FY21 key financials
  • Revenue up by 47.1% to €8,521k
  • EBIT up by +136.7% to €303k
  • EBITDA up by 21.3% to €1,859k with an EBITDA margin of 21.8% (vs. 26.5% in H1 FY20)
  • Net profit reached €438k (+57.6% yoy)

Analysis

Significant progress in the change of authorisations’ partner

During the first half year of 2020 (in February), the decision was taken by Keyware to move to another payment partner and a settlement was signed to still ensure authorisation of fixed income during the first 9 months of 2020 (no longer after September 2020), but at a decreasing rate. However, the transfer to the other partner is taking time and Keyware has lost a major part of its authorisation income (-27.1% revenue in H1 FY20). At 30 June 2020, the percentage migration of contracts to the new partner was 14.6%, 29.1% at 30 September 2020, 63.8% at 30 December 2020, and finally 86.7% at 30 June 2021. Given such progress, the group was able to post 128% authorisations revenue growth in H1 FY21. The division will continue to post major improvements in H2 FY21, as Keyware estimates that the remaining c. 10% should be transferred by 31 December 2021.

The payment terminals segment posted +13.9% revenue growth to €3,679k with a higher number of signed contracts and higher subscription income led by a more flexible period yoy (many shops became accessible again).

Software segment led by EasyOrder

The third “lockdown” and associated closure of the badly hit catering sector led to a boom in the delivery and takeout formulas during that period (including restaurants, but also dark kitchens which work purely online). There has been and still is an increasing demand for the SPLIT application among retailers. Consequently, the software segment, with the strong performance of EasyOrder, showed +53.1% revenue growth to €537k. Magellan also contributed, to a lesser extent, to the segment’s performance. The group is, however, worried about not finding the additional representatives needed to develop the activity even more in the coming months (becoming the company’s main focus).


Impact

We will integrate the H1 FY21 figures and should positively revise our expectations for the year as the half-year results came in ahead of our expectations, while H2 is also expected to be good thanks, in particular, to comparables that should continue to be favourable.


Target
Upside 88.8%
Price (€) 1.14
Market Cap (€M) 26.8
Perf. 1W: 9.62%
Perf. 1M: -0.87%
Perf. 3M: 14.0%
Perf Ytd: 37.3%
10 day relative perf. to stoxx600: 2.94%
20 day relative perf. to stoxx600: 3.30%
Updates

16 Sep 21 Earnings/sales releases
Back in positive territory thanks to recovery in a...

30 Mar 21 Earnings/sales releases
Change of Authorisations' partner for further pro...

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

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