SNP Schneider-Neureither & Partner: Strong Q3 Profits Recovery
Edison | Nov 02, 2018 06:52AM ET
Q3 results reveal that SNP (DE:SHFG) is stabilising after the July profit warning. While underlying revenues showed a small contraction, profits recovered strongly. This indicates that cost saving measures are beginning to have an impact. Additionally, SNP has recently won several small S/4HANA migration contracts, which indicates that the S/4HANA business is beginning to gain momentum. We have increased our FY18 profits forecasts while maintaining revenues. While the shares look punchy on c 23x our FY19e earnings, the rating could fall quickly as new projects come through.
9M18 results: Nine-month adjusted EBITDA of €0.8m
9M18 revenue rose by 22% to €98.8m, including €18.5m from acquisitions and a c 1% organic contraction. Adjusted EBITDA expanded to €0.8m in 9M18 from a loss of €1.7m in H118. SNP increased its FY18 profit guidance but maintained revenue guidance. In H2, SNP initiated a globally oriented programme to improve efficiencies, with a focus on improving cost structures and increasingly concentrating on free cash flow.
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