{"id":210929,"date":"2020-06-12T15:49:10","date_gmt":"2020-06-12T13:49:10","guid":{"rendered":"https:\/\/www.growens.io\/fundamental-analysis\/"},"modified":"2021-05-06T17:05:08","modified_gmt":"2021-05-06T15:05:08","slug":"fundamental-analysis","status":"publish","type":"post","link":"https:\/\/www.growens.io\/en\/fundamental-analysis\/","title":{"rendered":"Fundamental Analysis: MailUp Group on Class CNBC"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">On Class CNBC, the daily column dedicated to the world of AIM Italia presents the<strong> fundamental analysis of a company in the basket of small and medium-sized enterprises<\/strong>, together with Cristian Frigerio of 4AIM Sicaf. In June 8 episode, the analysis focused on MailUp Group. Find below the video recording (in Italian) and English transcript.<\/span><\/p>\n<div class=\"video-container\">.video-container {<br \/>\nposition: relative;<br \/>\nwidth: 100%;<br \/>\npadding-bottom: 56.25%;<br \/>\n}<br \/>\n<iframe class=\"video\" src=\"https:\/\/www.youtube.com\/embed\/eeGXEuoydG0\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">\ufeff<\/span><\/iframe><\/div>\n<p><span style=\"font-weight: 400;\">\u201cMailUp Group is one of the <strong>main players in the Marketing Technologies segment<\/strong>, offering companies (among other services) functions and tools for creating, sending, automating and tracking newsletters, emails and SMS.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">MailUp was established in 2002 and today has over 150 employees. The company debuted on the market in Italy in July 2014, and <strong>raised around EUR 3 million share capital increase<\/strong>, at a price of EUR 2.5 per share. <\/span><i><span style=\"font-weight: 400;\">(Note: today restated in EUR 1,92 euro per share following a stock split in 2016).<\/span><\/i><\/p>\n<p><span style=\"font-weight: 400;\">As for income statement data, in 2019 the Group recorded a <strong>value of production of EUR 60.8 million<\/strong>, a 51% increase compared to 2018; an EBITDA of EUR 4.8 million, up from EUR 3.77 million in 2018, albeit with a slightly decreasing margin.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>EBIT stood at EUR 1.85 million<\/strong> in 2019, roughly at similar levels to 2018, or EUR 1.9 million. The net result was EUR 1.15 million, slightly down from EUR 1.26 million in 2018.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This slight decrease recorded in 2019 was due to some specific events, primarily the <strong>adoption of the new accounting standard IFRS16<\/strong>, which positively impacted on the financial statements.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">However, there was the negative impact (for about EUR 1 million) of one-off costs connected with a dispute with a strategic supplier (which has now been completely resolved from both a legal and a technical point of view).\u00a0 Clearly those costs negatively impacted EBITDA, EBIT and net result. Net of this extraordinary charge, <strong>the margins would have increased<\/strong>, so it is important to report this aspect.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the last three years, there has been a <strong>strong growth in the value of production<\/strong>, from EUR 27 million in 2017 to over EUR 60 million in 2019. Turnover has more than doubled in the space of a few years, confirming the strong growth in recent years.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Turning to the balance sheet data, <strong>net invested capital grew to over EUR 13 million<\/strong> in 2019 compared to EUR 9.6 million in 2018. Shareholders&#8217; equity exceeded EUR 16 million.<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><strong>The net cash position fell to EUR 2.35 million<\/strong> compared to EUR 6.37 million in 2018. This is net cash we\u2019re talking about, since the company has no debt. The net cash flow in 2009 fell substantially due to the new accounting standard IFRS16, which impacted the NFP for approximately EUR 4.6 million. Subtracting the effect of IFRS16, the net cash flow in 2019 would have been approximately EUR 7 million, therefore up on the 2018 value.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the cash flow side, in 2019 <strong>the operating cash flow was EUR 4.6 million<\/strong>. Investments amounted to approximately EUR 3 million and cash flow net of investment was positive for approximately EUR 1.5 million.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Operating cash flow over the past three years has been significant. <strong>The Company has an outstanding cash conversion capacity<\/strong>, i.e. the ability to convert EBITDA into cash flows at decidedly high levels. This is very positive.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Clearly investments are carried out, as is normal in a technological sector, but the Group is expanding, so <strong>investments are preparatory to development<\/strong>.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From the point of view of profitability indicators, <strong>the ROE in 2019 was around 7%<\/strong>, while the return on capital invested was around 13%. Definitely positive values.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">From the point of view of the evaluation of multiples, based on current prices and on the estimates for the financial year 2020 relying on <\/span><a href=\"https:\/\/www.growens.io\/wp-content\/uploads\/2020\/05\/MailUp-14-May-2020.pdf\"><span style=\"font-weight: 400;\">the latest research by UBI Banca<\/span><\/a><span style=\"font-weight: 400;\">, <strong>the stock price currently trades at 11.9 times on EV \/ EBITDA<\/strong> on 2020 and about 45 times price earning, always on the estimates for the year 2020.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">These multiples <strong>can be compared with 7 times EV \/ EBITDA<\/strong>, as the median value of\u00a0<\/span><span style=\"font-weight: 400;\">digital sector on AIM, and with 18.3 times, again as the median value of the digital sector\u00a0<\/span><span style=\"font-weight: 400;\">on AIM. The considered sample of AIM- listed companies, even if belonging to the digital sector, does not have a business identical to MailUp Group\u2019s. The comparison is therefore purely indicative and provides roughly similar figures for comparison.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The MailUp stock may seem expensive compared to these sector multiples, however <strong>its multiples are justified<\/strong> by the fact that the Company has grown a lot in recent years and <strong>is continuing to grow.<\/strong><\/span><\/p>\n<p><span style=\"font-weight: 400;\">A few weeks ago the Group issued <\/span><a href=\"https:\/\/www.growens.io\/en\/press-releases\/the-board-of-directors-examined-certain-financial-data-concerning-the-first-quarter-of-2020\/\"><span style=\"font-weight: 400;\">the quarterly results for Q1 2020<\/span><\/a><span style=\"font-weight: 400;\"> (one of the few companies on AIM to do so). Revenues are up 18.6%, while EBITDA grew by about 15%. The growth trend is therefore continuing. <strong>Business is doing well despite the global Covid situation.<\/strong><\/span><\/p>\n<p><span style=\"font-weight: 400;\">Surely, therefore, the multiples may appear high, but they are justified by this very positive growth trend. Then cash flow generation has to be taken into account: the company, as already mentioned, <strong>generates recurring cash flow<\/strong>, therefore it is well suited to be evaluated with a DCF (discounted cash flow) model.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The current evaluation, from my point of view and based on these figures, is certainly correct and justified. To date, the Company has <strong>a market cap around EUR 72 million<\/strong>, with a free float of 36.4%.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The Company is also well positioned outside of Italy, since <strong>half of the turnover comes from abroad<\/strong> &#8211; which adds to the plus side.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">On the research front, the previously mentioned <\/span><a href=\"https:\/\/www.growens.io\/wp-content\/uploads\/2020\/05\/MailUp-14-May-2020.pdf\"><span style=\"font-weight: 400;\">research by UBI Banca<\/span><\/a><span style=\"font-weight: 400;\"> dated 14 May 2020 sets <strong>a target price of EUR 5.4 per share<\/strong>, which corresponds to a theoretical upside of around 8% compared to current prices. UBI Banca estimates revenues of EUR 72 million for 2020, up 21% year on year; EBITDA of EUR 5.8 million; margin of 8.1%; net profit of EUR 1.6 million; net cash for EUR 3.5 million.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">All in all, <strong>MailUp Group is an extremely sound organisation<\/strong>, so the evaluation can only be positive from many points of view\u201d.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Class CNBC and analyst Cristian Frigerio examine MailUp Group, with an in-depth look at financial results, production values and stock price.<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[1],"tags":[77],"class_list":["post-210929","post","type-post","status-publish","format-standard","hentry","category-senza-categoria","tag-growth"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/posts\/210929","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/comments?post=210929"}],"version-history":[{"count":1,"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/posts\/210929\/revisions"}],"predecessor-version":[{"id":211497,"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/posts\/210929\/revisions\/211497"}],"wp:attachment":[{"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/media?parent=210929"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/categories?post=210929"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.growens.io\/en\/wp-json\/wp\/v2\/tags?post=210929"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}