AlphaValue Corporate Services
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Bloomberg   KEYW BB
Smart Cards-Security  /  Belgium  Web Site   |   Investors Relation
The soft bet is paying off
Upside 112%
Price (€) 1.01
Market Cap (€M) 23.8
Perf. 1W: -0.98%
Perf. 1M: -3.81%
Perf. 3M: -3.81%
Perf Ytd: -7.34%
10 day relative perf. to stoxx600: -3.21%
20 day relative perf. to stoxx600: -0.18%
Earnings/sales releases18/03/2020

Positioned to take advantage of increasing power of digitalisation in order payment

Challenges remain in the payment activity, but the positioning in the software business should make Keyware an important player for the near future.


FY19 key financials
  • Group sales down by 7.7% to €18,116k
  • EBITDA decreased by 5.7% to €2,998k, FY19 EBITDA margin of 16.5% (vs. 16.2% in FY18)
  • Profit before tax amounted €860k (-7.6% yoy)
  • Group net profit was down by 49% to €320k due to higher tax charges and due to comparables, Keyware having benefited from a change in the rate of French corporate taxes in 2018
  • Cash and cash equivalents amounted to €1,187k (-66% yoy)
  • Net financial debt decreased by 2.1% from €3,998k to €4,082k


In line with the 9m results, Keyware closed FY19 with negative top- and bottom-line growth. The group continued to face troubles during its transition phase as becoming a fully-fledged software developer (from a purely terminal provider before) can only be done by increasing structural costs. There is no doubt, however, that this is still the best thing to do to offset the declining payment terminals’ activity.

Difficulties in the payment business remain

The decreasing number of traditional retailers, threatened by the growing number of online competitors, obviously led to a decrease in the number of payment terminals and transactions in this segment. In 2019, revenue in the Payment Terminals division declined by 2% to €7,010k. However, this was at a lower declining rate than previously (-15.2% in FY18) thanks to an increasing number of start-ups in new sectors, an increase in the number of customers in the higher market segment and Keyware’s competitive positioning.

While, in this challenging environment, the Authorisation division has continued to contribute to the group’s growth for many years, for the first time in 2019 this was no longer the case. Sharper pricing of the offer and the fact that the number of transactions within the start-up segments are even lower compared to those in traditional retail outlets drove down revenue by 13.7% to €8,317k.

Software to drive future growth

Nothing to worry about when it comes to Software’s FY19 revenue. Sales decreased by 1.4% to €2,789k but this amount is net, after intersegment revenue of €342k. The business continues to contribute more and more to the group’s activity (15.4% of total group’s sales, vs. 14.4% in FY18), in line with Keyware’s strategy.

Signs of EBITDA recovery

On the profitability side, the group reported €180k EBITDA, down by 5.7% vs. last year. Paradoxically, we see this as a positive sign, as it is clearly an improvement compared to the beginning of the software integration (-14.7% EBITDA growth in FY18). Software’s development continued to weigh (especially due to the expansion of the sales department), but to a lesser extent. Authorisations’s lower growth of profit was another factor in the decrease.

Trade receivables weigh on cash

The recurring relative weakness of Keyware was its strong negative WCR variations (mostly due to the massive needs in trade & lease receivables). With a delay in the collection of some trade receivables, cash and cash equivalents amounted to €1,187k vs. €3,520k in FY18. A large proportion of the overdue receivables have been, however, collected after the balance sheet date.


We will integrate the FY19 results and revise our forecasts for the next three years. The Software division will continue to inflate our top-line expectations. During FY19, we expect EBITDA improvements. A return to profitability is expected in the medium term.


03 Oct 22 Earnings/sales releases
A smooth start to the year

18 May 22 Target Change
Integration of the FY21 figures

13 Jan 22 M&A /Corp. Action
Strategic acquisition of Payment Solutions

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...