FinTech Group AG

29.05.2017 - Equity Research Report (english) // buy

Research Report (Anno) – FinTech Group AG - english

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Unternehmen: FinTech Group AG
ISIN: DE0005249601
Branche: Dienstleistungen
Rating: buy
Kurs bei Erstellung in €: 18,38
Kursziel in €: 28,00
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a,6a,11

FinTech Group AG can look back on very successful business development in FY 2016, a year in which the measures introduced in the past two years in-creasingly materialised, resulting in rising revenues and improved results. Sales revenues were up to € 95.02 million from 2015, representing a sizeable in-crease of 26.7%. A key driver was the considerable increase in the number of customers. Customers increased to 212,040 in 2016, an increase of 20.1%. A significant portion of this growth was achieved by flatex. The broker was also able to successfully continue with its expansion in 2016, with a larger product portfolio and a regional expansion being also key contributors.

In terms of achievements, FinTech Group AG also managed to significantly increase its EBITDA in 2016. The EBITDA for 2016 was € 30.62 million, an in-crease of 55.1% from the previous year. Most notably, the Transaction Pro-cessing & White-Label-Banking (TP&WLB) segment contributed significantly to a positive earnings trend. After a total of € 8.39 million was generated in this sector in the previous year, 2016 values were at € 28.33 million. The main rea-son for this very positive development, in addition to the obvious revenue growth, is that results in the previous year were still impacted by extensive re-structuring. With figures adjusted to take into account the one-time impact of the previous year, the increase in EBITDA accounted for 13.8%.

We are expecting a further increase in sales revenues of € 108 million in FY 2017. This means that we are expecting to slightly exceed the guidance issued by the company. Revenue growth drivers should include, above all, a continued increase in customer and transaction numbers, which will in turn be addressed by expanded product offerings. We are also expecting further growth in the B2B business, after having already acquired two new customers in the banking out-sourcing field at the end of 2016, which will lead to anticipated further coopera-tion. We are also expecting equally positive results from our interest earnings, which should result from making more active use of customer deposits.

In terms of costs, in 2017, but especially in 2018, downsizing the corporate structure from 5 to 2 of the most crucial subsidiaries will make a notable differ-ence. This should reduce material costs by up to seven digits. Last but not least, we continue to expect an unchanged EBITDA value of € 35.00 million, which also means that we will be slightly above the executive board’s guidance report, which estimates an amount of € 32 to 34 million.

On the whole, the numbers for FY 2016 were very satisfactory and the prospects for 2017 are positive. Numerous measures and developments should lead to further improvements. In this respect, we would like to con-firm our positive assessment of FinTech Group AG shares, and as a part of our residual income model, we have appraised the value of each share at € 28.00. Compared to our previous target value of € 27.00, this repre-sents an increase. The rating, based on the high rate potential of over 50%, remains unchanged at BUY.


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