ADOMOS 24.05.2017 - 16:09
ADOMOS BUYALTERNEXT - FR0013247244 - ALADO
Successful Recovery: Sales +220% since 2013 and EBIT margin multiplied by 4.6
Outlook still favorable: real estate sales x2.7 by 2019e
Additional leverage on margins
PEA-PME
Coverage initiationPromising new growth drivers
Established in 1999, Adomos was positioned as a start-up of brokerage on the Internet of real estate products for rental investment for individuals. The Group experienced a first phase of expansion between 2003 and 2007 with sales which increased from € 5.4 million to € 20.2 million. At that time Adomos had registered nearly 1 200 housing sales. Starting in 2008, the effects of the crisis were felt with sales that showed a strong downward trend (divided by 4.5 between the high point of 2006 and 2011). The evolution of margins following that of sales with a steady increase between 2003 and 2006 and, from 2008, a continuous erosion concluded by a collapse in 2011.
Adomos then embarked on a phase of redesigning its business model with two main ideas: exploiting its know-how in digital marketing in order to develop an activity of lead generation and to change its real estate offer by expanding it considerably.
Thus, Adomos' activity is currently organized around two complementary businesses: 1/ Purchase and sale of qualified lead, marketed to real estate developers, private wealth professionals and marketing platforms (40% of turnover), 2/ Sale of investment housing (60% of turnover).
Analysis of the figures since 2012 shows that recovery is successful: turnover rose from € 1.25 million to € 5.95 million in 2016, i.e. a cumulative growth of 376%. Profitability also improved significantly, with EBIT margin rising from 5.6% in 2013 to
TARGET PREVIOUS
€ 1.28 -PRICES (05/19/2017) POTENTIAL
€ 0,89 +43.8%CAPITALISATION FREE FLOAT
€ 26,4 M € 19.7 MEV/Sales | 2,97 | 2,39 | 1,98 | |
EV/EBIT | 11,0 | 7,6 | 5,6 | |
P/E | 11,5 | 7,9 | 5,8 | |
P/CF | 6,3 | 4,9 | 3,9 | |
Dividend Yield | 0% | 0% | 0% | |
Data per share | 2016 | 2017e | 2018e | 2019e |
EPS restated diluted | 0,08 | 0,08 | 0,11 | 0,15 |
%Change | 2,9% | 44,1% | 36,8% | |
FCF | -0,02 | 0,00 | 0,04 | 0,09 |
%Change Dividend | - | ns - | 2290,3% - | 108,5% - |
Ratios 2016 2017e 2018e 2019e
25.7% in 2016 and Net margin from 6.3% to 33.5%. The volume effect coupled with a
light structure and essentially fixed costs (only 14 employees vs 90 in 2012), generated a strong leverage. Lastly, the balance sheet structure is now fully solid, with December 31, 2016 shareholder equity of € 12.9 million, a cash position of € 1.2 million and no bank debt.
In a market environment that remains buoyant, the prospects prove favorable and are based on 4 axes of development: 1/ widening the depth of the real estate offer in order to increase the conversion rate, 2/ developing qualitatively and quantitatively the sales network to accelerate the number of sales, 3/ to benefit from the leverage
Net Sales | 5,9 | 8,4 | 10,4 | 12,6 |
%Change | 41,2% | 24,4% | 20,9% | |
Operating Income | 7,3 | 9,4 | 11,6 | 14,0 |
% Sales | 27,8% | 24,1% | 20,1% | |
EBITDA | 2,9 | 3,7 | 4,8 | 6,0 |
% Sales | 49,2% | 44,5% | 45,7% | 47,6% |
EBIT | 1,5 | 2,3 | 3,3 | 4,5 |
% Sales | 25,7% | 27,0% | 31,3% | 35,3% |
Net Result | 2,0 | 2,3 | 3,3 | 4,5 |
% Sales | 33,6% | 27,1% | 31,4% | 35,5% |
Income Statement (€M) 2016 2017e 2018e 2019e
effect on profitability and 4/ to establish new growth drivers via the creation of two
Net Debt | -1,1 | -1,1 | -2,2 | -4,4 | |
In our opinion, Adomos could recover the levels recorded in the mid-2000s with 960 | Shareholder Equity | 12,9 | 15,2 | 18,5 | 23,0 |
reservations estimated in 2019e (vs 406 in 2016) with a much lower cost structure. | Gearing | -8,7% | -7,3% | -11,7% | -19,3% |
Thus we expect a 2016-2019e CAGR of turnover of 28.5% and EBIT of 40.5%. | ROCE | 8,6% | 10,7% | 13,3% | 16,0% |
Adomos now has an economic model that is solidified: the activity of qualified leads | Shareholders | ||||
brings a recurring level of turnover and results, even assuming a new turnaround of | F. Rosset (PDG) | 8,7% | |||
subsidiaries with complementary businesses (Adomos Gestion Immobilière and Adominvest).
Cash Flow Statement (€M) 2016 2017e 2018e 2019e
FCF 2,8 3,5 4,7 6,0
the real estate market since even during these phases the purchase of lead remains key; The real estate business brings growth and generates leverage on margins.
In terms of valuation, our price target based on a diluted number of shares and
Global Exchange TS Better Options LLP Talence Gestion Free Float
8,5%
4,9%
3,1%
74,9%
obtained from a weighted average (80% DCF - € 1.29 / 20% Peers Comparisons -
Performances 2017 3m 6m 1 an
€ 1.22) is € 1.28, a potential increase of 43.8%. We therefore initiated the coverage | Adomos | 99,9% | 14,2% | 99,9% | 59,9% |
of Adomos with a BUY opinion. | Alternext | 12,0% | 6,6% | 16,1% | 15,6% |
It should also be noted that the recent combination of shares should limit the volatility of the stock and allow Adomos to regain a more attractive stock market status.
Loïc Wolf
+ 33 (0) 6 14 26 27 53
lwolf@greensome-finance.com
12 months Low-High 0,34 1,02
Liquidity 2017 3m 6m 1 an
Cumulative volume (000) | 14 688 | 7 642 | 15 621 | 29 956 |
% of capital | 55% | 29% | 59% | 113% |
% of Free Float | 74% | 39% | 79% | 151% |
€ Million | 10,60 | 6,31 | 11,03 | 18,32 |
Next Event H1 Sales: Date n.a
Snapshot ADOMOS
Established in 1999, Adomos is an intermediary in the Internet distribution of real estate rental investment to the individual. In 2016, it registered 406 new housing reservations and recorded 250 sales. It has a network of 35 independent business advisors.
Since 2012, it has also developed an activity of leads marketing sold to real estate developers, private wealth managers and marketing platforms.
2016 Sales per activity 2019e Sales per activity
20%
40%
60%
80%
Real Estate Leads
Real Estate Leads
2011-2016 Financial Situation Reservations and Sales
14,0
12,0
153%
10,9
12,9
160%
140%
1200
1000
70%
72%
70%
10,0
8,0
6,0
4,0
2,0
0,9
2,3
1,4 1,4
62%
3,4
0,5
8,2
0,5
1,6 1,2
120%
100%
80%
60%
40%
800
600
400
67%
406
62%
600
65%
390
780
68%
527
960
672
68%
66%
64%
62%
0,0
0,1 0,1 0,2
-0,5
20%
270
250
60%
2011 2012 2013 2014 2015 2016
200
180
-2,0
-4,0
15%
-6%
-1,5-1,1
-13%
-9%
0%
-20%
0
2015 2016 2017e 2018e 2019e
58%
56%
Shareholder Equity Net Debt (€ M) Cash PosiFon (€ M) Gearing (%)
Reserva3ons Sales Conversion rate
STRENGTHS | WEAKNESSES |
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OPPORTUNITIES | THREATS |
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Fondamental Matrix
The purpose of this matrix is to describe Adomos fundamental historical profile. It is built on objective criteria to judge its past value. Each criterion is treated equi-weighted in order to arrive at a notation between A and E.
(A : Excellent historical profile / E : risky historical profile)
A | B | C | D | E | |
Position in Value Chain | |||||
Leverage on margin | |||||
Financial structure | |||||
Management | |||||
EPS Track record | |||||
NOTE | B | ||||
Source : GreenSome Finance
Position in Value Chain | Both for the leads marketing and for the sale of housing, Adomos acts as an intermediary between prospects, real estate developers, sales networks and independent commercial advisors. |
Leverage on margin | Adomos now has a strong business model that centers around the leads marketing that brings a recurring level of sales and results and real estate that brings growth and leverage. Thus, between 2013 and 2016, the operating margin was multiplied by 4.5 (from 5.6% to 25.7%) for a turnover multiplied by 3.2. |
Financial structure | The financial structure is sound with no financial debt and an available cash position of € 1.2 million. On the other hand, the generation of cash flow is still just sufficient to cover the investments and the WCR. |
Management | At the head of the company since its inception, CEO Fabrice Rosset has experienced both phases of expansion and decline. He managed the strong crisis begun in 2008 to save Adomos and solidify the economic model. |
EPS Track record | Adomos has delivered 4 beneficiary exercises on the last 5. EPS continues to grow since 2012. |
Investment Profile
The principle of this profile is to compare Adomos with its sector over the next 3 years and to see how it is in terms of growth, evolution of results and market prices compared to the peers selected.
Adomos Investment Profile vs Peers
Sales %Chge
EPS % Chge
Valua5on
- 50 100 150 200 250 300 350
Adomos Peers
Source : GreenSome Finance & Infinancials
As Adomos does not have a directly comparable listed company, we have selected actors from several sectors: real estate development, brokerage and digital marketing.
The combination of their economic models making it possible to get closer to that of Adomos. So we chose:
- Altarea Cogedim : is the leading developer of metropolitan areas. As a commercial landlord and developer, it is present on the three main real estate markets: commerce, housing, office. For each of them, it has the know-how to design, develop, market and manage tailor-made real estate products. Present in France, Spain and Italy, Altarea Cogedim manages shopping center assets of 4.5 billion euros at the end of 2016;
- Antevenio : is an innovative Publishing and marketing technology company, leader in Southern Europe (Spain, Italy, France). It helps brands convey their value proposition to consumers through a comprehensive offering combining advertising, content marketing and cross-channel technology. This offer is proposed either as a service or under a cloud license via the MDirector software suite;
- ConcoursMania : specialist in data marketing for the conquest and customer engagement. Every day, it captures and exploits millions of data and signals of intention to allow its customers to increase their marketing performance and their turnover. The Group owns nearly 26 million qualified profiles in its network, of which 13 million are proprietary assets. The company has over 500 customer references (SFR, Le Routard, Cdiscount, Spartoo, Chronodrive, La Fourchette, Lidl, Qatar Airways, West France, Nestlé);
- Icade : Property manager, real estate developer, Icade is an integrated real estate operator, which designs innovative real estate products and services to meet new urban uses and lifestyles. Icade combines investment in tertiary and healthcare property (assets at 31/12/16: € 9.7 billion) with the promotion (2016 Sales of € 1 billion). Its main shareholder is the Caisse des Dépôts group;
- LeadMedia : A player in the digital sector as an integrated services provider for online marketing and provider of data marketing solutions. With a portfolio of innovative proprietary technologies and media assets, including the Shopbot, BuscaDescontos and BlackFriday websites, LeadMedia Group has developed real know-how in data marketing;
- Nexity : Nexity is involved in several business lines as transaction, management, design, promotion, development, consulting and all associated services;
Adomos SA published this content on 31 May 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 31 May 2017 07:14:22 UTC.
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