AlphaValue Corporate Services
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Keyware

CR
Bloomberg   KEYW BB
Smart Cards-Security  /  Belgium  Web Site   |   Investors Relation
The soft bet is paying off
Target
Upside 119%
Price (€) 1.02
Market Cap (€M) 24.0
Perf. 1W: -2.86%
Perf. 1M: -5.56%
Perf. 3M: 3.03%
Perf Ytd: -6.42%
10 day relative perf. to stoxx600: -3.56%
20 day relative perf. to stoxx600: 0.32%
Earnings/sales releases03/10/2022

A smooth start to the year

We highly welcome the H1 FY22 very good performance. Most of the results’ increase was linked to the Payment Solutions acquisition in January, but also thanks to the company’s good execution regarding the integration of the new payment partner. The expansion of its sales force remains the big challenge looking forward.


Fact

H1 FY22 key financials :
  • Revenue up by +43.3% to €12,211k
  • EBIT up by +164.7% to €802k
  • EBITDA up by +33.1% to €2,475k
  • Net profit up by +95.4% to €856k

Analysis

Strong performance during H1 FY22 through every product and service range. It should be borne in mind that the results were mainly driven by the acquisition of Payment Solutions, which pushed up Terminal division’s results: sales up by +37% and gross margin up by +30%. There was nevertheless a notable increase in results excluding this factor. As a reminder, Keyware announced in January the acquisition of Payment Solutions BV, a player in the electronic payment solutions market with clients mainly located in Flanders and Brussels, expected to increase Keyware’s customers base by c. 15%. During the first semester, the acquisition’s contribution to revenue and EBITDA was €2,162k and €441k respectively, in line with the expectations announced at the beginning of the year.

Excluding the acquisition, H1 FY22 Keyware’s sales were up by c. 18%, EBIT up by c. +33% and EBITDA up by c. +9.5%, translating improvement outside the inclusion of Payment Solutions. Indeed, Authorizations segment showed +59% and +67% sales and gross margin growth respectively. The division was driven by the completion (finally!) of the migration to a new payment partner – in June 2021, only 86.7% was achieved-, the recovery of consumer spending since COVID-19, as well as a change in commercial approach.

The software division reported +35% sales and +17% gross margin growth, thanks to an increasing demand for payment applications, such as Keyware’s instalment payment solutions offer (Split), and the expansion of the offering with order and payment kiosks.

Looking froward, the company is measuring the potential impact of the overall cost of living, especially energy prices, on the consumption spending patterns of its customers. This should have an indirect impact on the Auhorization division. Regarding the Terminal and Software division, most of the development will depend on the company’s ability to recruit new and qualified sales representatives (continuing to be one of the company’s main issues).


Impact

We will integrate the very good H1 FY22 figures, but no major changes are envisaged in our FY22 expectations overall. We have already integrated the positive impact from the Payment Solutions acquisition and were already quite optimistic for the year 2022.


Updates

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...

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