CombinedX: Nethouse Expanding in Västernorrland
Research Update
2024-03-28
09:53
Redeye takes a positive view of CombinedX’s most recent acquisition Why. CombinedX strengthens Nethouse’s position by acquiring a highly profitable company with a solid track record at ~4x EBIT. We raise our forecasts and Base Case somewhat.
Fredrik Nilsson
Anton Hoof
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| SEKm | 2023 | 2024e | 2025e | 2026e | 2027e |
| Revenues | 766.3 | 1,003.2 | 1,084.1 | 1,125.7 | 1,168.7 |
| Revenue Growth | 17.6% | 30.9% | 8.1% | 3.8% | 3.8% |
| EBITDA | 117.1 | 137.5 | 156.2 | 166.9 | 172.5 |
| EBIT | 80.0 | 95.4 | 117.8 | 129.3 | 138.4 |
| EBIT Margin | 10.4% | 9.5% | 10.9% | 11.5% | 11.9% |
| Net Income | 71.0 | 75.4 | 93.2 | 102.3 | 109.5 |
| EV/Revenue | 0.7 | 0.9 | 0.7 | 0.7 | 0.6 |
| EV/EBIT | 6.5 | 9.1 | 6.9 | 5.7 | 4.9 |
Earlier this week, CombinedX announced that its subsidiary Nethouse acquired the Sundsvall-based IT infrastructure consulting company Why IT Solutions. Why has about 30 employees, sales of about SEK70m and an EBIT margin of around 10%. Why has a strong position among public customers in the area, such as Region Västernorrland and Försäkringskassan, as well as in the timber industry –an important sector in this region. Like Nethouse, Why focuses on cloud and IT infrastructure.
With 30 employees and SEK70m in sales, the sales per employee is high. However, as we lack the full annual report for 2023, we cannot calculate the Sales-COGS/employees/working day. According to management, Why has a rather high share of hardware and sub-consultants in its sales mix – which we find reasonable considering the high sales per employee.
Disclosures and disclaimers
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