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Keyware Technologies NV

ENXTBR | KEYW Financial Services and Technologies
6 Jun 2023

Arrowhead published an Equity Research Report on Keyware Technologies NV
June 6, 2023

Keyware Technologies (EBR:KEYW) Research Update

Highlights:

  • Arrowhead is updating its coverage on Keyware Technologies with a fair value bracket of EUR 1.44 to EUR 1.88 (share price on June 06, 2023: EUR 0.93), based on the blended valuation method, with equal weightage to Discounted Cash Flow (DCF) method and EV/EBITDA (2023E) multiple-based valuation.
  • The company reported a growth of 35.5% year-on-year (YoY) in revenue, which evolved from EUR 17.7 mn to EUR 24.0 mn. The growth was underpinned by strong segmental contributions, majorly from its Payment terminals and Authorization segments. The segment growth was further accentuated by the strategic acquisitions by the company in FY 2022.
  • Among the segments, the payment terminals segment reported revenue of c. EUR 10.0 mn, a growth of 42.2% YoY underpinned by the integration of Payment Solutions with a differentiated positioning, combined with its own go-to-market model. The Authorizations segment reported a revenue of EUR 8.6 mn, an increase of 43.7% YoY, driven by the migration to the new payment partners completed in the previous year. In contrast, the Software segment reported revenue of c. EUR 5.3 mn as compared with EUR 4.6 mn in FY 2021. The growth in the segment is driven by an increased number of users in the company’s order and payment app, the banking software platforms, and the software for offering staggered payments within the retail, travel, and automotive sector.
  • The company reported a gross profit of EUR 16.4 mn, a growth of 32.0% YoY. However, the gross margin reduced from 70.3% to 68.5%. EBITDA for 2022 stood at EUR 4.9 mn, up 24.3% YoY. The company reported a net profit of EUR 1.6 mn, a growth of 151.1% YoY, majorly driven by higher operating income and net finance income.
  • Recently, the company acquired Payment Solutions BV – a player in the Electronic Payments solutions market. The acquisition was aimed at strengthening the company’s position in the segment, expanding into new markets, and diversifying its product offerings, thereby allowing the company to leverage the synergies between the terminals segment operations and Payment Solutions BV. As a result, the company added 2,500 new contracts.
  • The company reported 24.7% YoY growth in its global terminal park, which stood at 18,200 at the end of 2022, thereby doubling the customer base in Flanders and Brussels. The company is also trying to expand its footprint to the Walloon market.
  • The acquisition price for the transaction stood at EUR 1.4 mn. The company financed it through a loan of EUR 1.0 mn, payable in monthly installments over the course of 5 years. This resulted in an increased debt position of the company as its total debt (including current and non-current) stood at EUR 6.6 mn, an increase of 48.3% over the corresponding period in the previous year. Total net debt stood at EUR 4.4 mn in FY 2022 as compared with EUR 2.8 mn on December 31, 2021.
  • The company continues developing cutting-edge FinTech solutions that simplify omnichannel payment processes for consumers and business users. The handling of payment transactions and the renting of payment terminals have historically been the focus of the company. The company uses a software-as-a-service (SaaS) model to provide FinTech products. The SET2U transaction infrastructure, which is supported by the programs SPLIT, S-Token, and EasyOrder, is essential for its business strategy, to provide merchants and their consumers with an omnichannel experience by enabling integrated electronic payments at physical and online purchasing sites.
17 Mar 2023

Keyware Technologies NV Uploaded a Corporate Update
March 17, 2023

Keyware records a growth in revenues of 35.5% and a net profit increase of 151% for 2022

Highlights:

  • The figures of 2022 are strongly influenced by the acquisition of Payment Solutions which took place in January 2022. Its activities can be mainly attributed to the payment terminals segment and, to a minor extent, to the authorizations segment.
  • Revenues rose by kEUR 6,282 (35.5%) from kEUR 17,689 in 2021 to kEUR 23,971 in 2022. The increase in revenues is mainly due to the continued transition to the current payment partner as well as to the acquisition of Payment Solutions, which has a strengthening effect primarily on the payment terminals segment. In 2021, revenues were already up 36.5%, though this was then primarily the result of the transition to the current payment partner.
  • EBIT reached kEUR 1,225 in 2022, representing an increase of kEUR 1,106 (+929,4%) when compared to kEUR 119 in 2021. The higher gross margin (+ kEUR 3,979), primarily due to improved authorization revenues and subscriptions, as well as the contribution from the new acquisition, was offset by higher other expenses, personnel costs and net allowances on current assets, eventually resulting in the EBIT growth of kEUR 1,106.
  • In 2022, EBITDA grew to kEUR 4,915 when compared to kEUR 3,955 in 2021, representing an increase of kEUR 960 (+ 24,3%) for which the same reasons as stated for EBIT apply.
  • Profit before taxes rose to kEUR 1,740 in 2022, a jump of kEUR 1,230 (+241,2%) compared to kEUR 510 in 2021. This increase was mainly triggered by the higher EBIT (+ kEUR 1,106), although the financial result (+ kEUR 124) also contributed to it. In this respect, the increase in financial revenues comes from the additional lease receivables of the acquired company, that generate financial revenues.
  • Keyware closed its financial year 2022 with a net profit of kEUR 1,640 compared to kEUR 653 in 2021. Deferred taxes in particular had a significant impact. The acquisition of the subsidiary resulted in additional deferred tax charges on the new lease revenues. Eventually the deferred taxes still indicate a revenue, but their level dropped in 2022 to kEUR 168 in comparison to 2021, when it was still kEUR 678.
31 Oct 2022

Arrowhead published an Equity Research Report on Keyware Technologies NV
October 31, 2022

Keyware Technologies (EBR:KEYW) Research Update

Highlights:

  • Arrowhead is updating its coverage on Keyware Technologies with a fair value bracket of EUR 2.06 to EUR 2.24 (share price on October 31, 2022: EUR 1.04), based on the blended valuation method, with equal weightage to Discounted Cash Flow (DCF) method and EV/EBITDA (2021E) multiple-based valuation
  • Revenue grew by 43.3% YoY to EUR 12.2 mn in H1 2022, as a result of a recovery from the COVID-19 pandemic, the acquisition of Payment Solutions and strong demand for online ordering app
  • The Terminal, Authorization and Software segments reported YoY growth of 37.3%, 58.9% and 35.5%, respectively
  • Gross profit improved by 30.0% YoY to EUR 7.9 mn in H1 2022 owing to the topline growth of the company
  • EBITDA in H1 2022 amounted to EUR 2.5 mn, showing a growth of 33.1% YoY, owing to improvement in margins of the Authorization segment and contributions from Payment Solutions
  • Cash and cash equivalents were reported at EUR 2.6 mn in H1 2022 compared to EUR 1.7 mn in FY 2021. This increase in cash was due to Keyware’s strong operational performance and fund-raising activities
  • The company will look to sign more contracts in the Terminals segment and capitalize on the demand for online ordering apps in the Software segment in H2 2022. The performance of the Authorization segment will be dictated by the level of consumer expenditure in the inflationary macro-environment
26 Aug 2022

Keyware Technologies NV Uploaded a Earnings Report
August 26, 2022

Revenues, EBITDA and net profit increase for the entire product and service range

Highlights:

  • The substantial increase in the results of the first half of 2022 is based on a positive trend across the entire product and service range: payment terminals, authorizations and software. In addition, the acquisition of Payment Solutions provides an additional increase in revenues, EBITDA and net profit.
  • Revenues increase by 43.3% compared to the first half of 2021, while net profit and EBITDA increase by 95.4% and 33.1% respectively compared to the same period of 2021.
  • The growth in the payment terminals segment (37.3%) is largely due to the acquisition of Payment Solutions. As a result, Keyware can propose a wider range of payment solutions and also approach new market segments, creating additional synergies.
  • The authorizations segment experienced the largest increase in revenues, namely 58.9%. Three important factors play a role in this: the successful completion of the migration to a new payment partner, the recovery of consumer spending since COVID-19 and the changed commercial approach. This makes it possible to respond faster and more efficiently to market demand.
  • The software segment sees its revenues grow by 35.5%. The results are driven by an increasing demand for payment applications like split payment as well as the expansion of the offering with order and payment kiosks.
26 May 2022

Arrowhead published an Equity Research Report on Keyware Technologies NV
May 26, 2022

Keyware Technologies (EBR:KEYW) Research Update

  • Arrowhead is updating its coverage on Keyware Technologies with a fair value bracket of EUR 2.18 to EUR 2.29 (share price on May 25, 2022: EUR 1.03), based on the blended valuation method, with equal weightage to Discounted Cash Flow (DCF) method and EV/EBITDA (2021E) multiple-based valuation
  • The company acquired Payments Solutions BV in January 2022 to expand its foothold over the Electronic Payment Solution market and leverage the synergies between the terminal segment operations and Payment Solutions BV. This acquisition is expected to increase its revenue by EUR 2.3 mn and increase EBITDA by EUR 440k in FY 2022
  • The company took a loan of EUR 1 mn to fund part of the acquisition
  • Revenue increased by 36.5% year-on-year (YoY) to EUR 17.7 mn in FY 2021 on account of an increase in signed contracts and sales efforts in the Terminals segment, recovery in consumer spending in the Authorization segment and an increase in demand in the Software segment
  • The Terminal, Authorization and Software segments reported YoY growth of 6.5%, 158.4% and 14.1%, respectively
  • Gross profit improved by 22.3% YoY to EUR 12.4 mn in FY 2021. This growth was driven by strong demand in the Authorization segment and lower costs incurred while purchasing the terminals
  • EBITDA in FY 2021 amounted to EUR 4.0 mn, showing a growth of 40.6% YoY, owing to higher gross margins by the company
  • Cash and cash equivalents were reported at EUR 1.7 mn in FY 2021 compared to EUR 1.5 mn in FY 2020. This increase in cash was due to the lower amount of loans paid back by the company compared to FY 2020
  • In FY 2021, the company took loans of EUR 1.2 mn and repaid the loans related to Magellan acquisition, ending the year with a debt of EUR 1.6 mn as compared to EUR 2.9 mn in FY 2020
17 Mar 2022

Keyware Technologies NV Uploaded a News Release
March 17, 2022

Keyware announces its FY2021 Results

6 Jan 2022

Keyware Technologies NV Uploaded a News Release
January 6, 2022

Keyware reaches an agreement regarding the acquisition of Payment Solutions

  • This acquisition is part of terminal growth strategy
  • The transaction concerns the acquisition of 100% of the shares of Payment Solutions
6 Jan 2022

Keyware Technologies NV Uploaded a News Release
January 6, 2022

Keyware reaches an agreement regarding the acquisition of Payment Solutions

8 Nov 2021

Arrowhead published an Equity Research Report on Keyware Technologies NV
November 8, 2021

Keyware Technologies (EBR:KEYW) Research Update

  • Arrowhead is updating its coverage on Keyware Technologies with a fair value bracket of EUR 1.91 to EUR 2.12 (share price on November 05, 2021: EUR 1.15), based on the blended valuation method, with equal weightage to Discounted Cash Flow (DCF) method and EV/EBITDA (2021E) multiple-based valuation
  • Revenue increased by 47.1% year-on-year (YoY) to EUR 8.5 mn in H1 2021 as a result of accounting treatment of the settlement amount related to the previous authorization partner, the increased demand for payment apps and generation of strong subscription-based revenue  
  • The Authorization segment reported an increase of 128.4% YoY in revenue, which amounted to EUR 2.5 mn, while the Terminals segment reported a revenue of EUR 3.7 mn, which represented an increase of 13.9% YoY. Additionally, the COVID-19 pandemic led to an increase in demand for payment apps, which, in turn, led to a growth of 53.1% YoY in the Software segment as sales amounted to EUR 2.4 mn 
  • The company posted a 17.2% YoY increase in gross profit, which amounted to EUR 6.1 mn, with growth in the Software and Authorization segments compensating for the fall in the Terminals segment 
  • EBITDA increased to EUR 1.9 mn in H1 2021, growing by 21.3% YoY, even though the EBITDA margin decreased to 21.8% in H1 2021 from 26.5% in H1 2020 
  • The net profit increased to EUR 438k, growing by 57.6% YoY, owing to a higher EBIT 
  • The company repaid debt totaling EUR 1.3 mn and took two loans amounting to EUR 950k. This had an impact on the cash and cash equivalents, which decreased slightly by EUR 77k in H1 2021 (from FY 2020) to EUR 1.5 mn
10 Sep 2021

Keyware Technologies NV Uploaded a News Release
September 10, 2021

Keyware publishes its Semi-Annual Result of 2021

Industries

  • Financial Services and Technologies
    • Financial Tech & Financial Software
    • Payments

Keyware positions itself as an independent international FinTech company with state-of-the-art solutions for the processing and management of electronic payments. Keyware has over 15 years’ experience in financial technology. Keyware applications include: Set2U: Payment transaction software for banks and financial institutions; S-Token: tokenisation software; Split: instalment payment solutions; EasyOrder: ordering and payment app software; Processing and management of payments; Rental and sale of payment terminals. Keyware is a fast-growing and profitable company that has solid partnerships with various global players including Ingenico, Worldline, Six Pay, CardProcess, Oonex, PaySquare and BS Payone. Above all, Keyware is an ambitious enterprise, with an end-to-end integrated business structure, a solid shareholder base and a focus on maximising value for its various stakeholders. The company has been quoted on the stock exchange since June 2000.

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