Enento Group - Quality, dividend, and/or growth?

[EskiMaisa]

Tambur and its effects are still questionable.
“Enento has managed and developed the Tambur service platform for Swedish housing transactions within its Digital Processes business area. As previously announced, based on our cooperation agreement, the banks have now reached a solution where the management of the Tambur service platform will be transferred to a joint venture owned by the banks. Enento will continue to provide services based on the housing transaction service platform until the final handover date at the end of 2023, but the terms related to the transition period are still being negotiated. The discontinuation of service development and the reduction in service-related revenue will increasingly negatively impact revenue and profitability starting from the third quarter.”

“We see high growth potential in the Nordic business information services market and will continue to implement our strategy in this regard. In May, we decided to increase our ownership in Goava Sales Intelligence AB to 48.2 percent.”
This, in my opinion, is quite a positive addition and provides a good basis for growth.

I see the result as slightly negative, even though it aligned with my own thoughts, but Q3 does not look better in my opinion, and I see the risk of a negative outcome having increased during H2.

[Contrafun]

Enento participated in Carnegie’s small-cap seminar at the beginning of September.

The presentation may be of interest to those following the company, so perhaps a direct link could be placed here in the thread. A link to the presentation recording can also be found through a Google search.

Carnegie Small & Mid Cap Seminar 2022 - ENENTO GROUP

Here are a few highlights from the presentation’s content for the thread:

The service offering is based on an extensive database. According to the presentation, the company’s website receives 7 million visits per month. It offers open data, from which the offering expands incrementally according to customer needs. =>
[free - small - medium - large - custom]

The management highlighted (16 min.) that the company’s business is quite defensive. Long-term customer relationships and switching costs create barriers to market entry. Historically, the company’s business has remained stable even during weaker times.

At the beginning of the Q&A section, there were questions about growth prospects.
-New launches are the primary growth driver. New services are being developed, and the offering is being expanded into new areas (e.g., services for SMEs and content related to sustainability).
-The second component of growth is an increase in volumes, which is also influenced by general economic development, especially in the credit information market.

Q: Customer base and the share of TOP5 customers?
The largest banks are the biggest customers, but no single one accounts for more than 10 percent.

Q: Progress in the development of the Nordic service platform? When developing and pacing development projects, it must be considered that the company always protects its profitability.

Q: Price increases and customer churn?
According to the answer, direct price increases to the existing contract base would not be possible, as large customers usually have individualized three-year contracts. The CEO stated (37 min) that the company has little prior knowledge of the impact of price increases on customer churn. This still requires development.

This is a brief summary of the content. The recording duration is 40 min.

[vuh]

Thanks for the great link! Here are my own takeaways:

Top sources for 5-10% growth target in order of importance:

1. Expected to come mainly from new services
2. Expanding customer base and offerings in small and medium-sized customers at the beginning of this freemium conversion funnel
3. A good general economic situation increases service volumes
4. For the largest customers, prices cannot be changed much in the short term; we will see how adjustments can be made, but it is not expected to be a significant driver.

Large customers

What is the growth in large corporates? Pricing has not been a significant component, not any drastic changes in pricing, expand offering and get bigger share of the wallet behind the organic revenue increase. Enento focused on the financial sector but less than half of revenues and no client is more than 10%

IT platform

They were asked about the IT platform transformation. They could have simply answered “it’s going well, we’ll get back to you when there’s something to announce.” However, a long explanation was given to avoid the question. They thought they would develop this new system in parallel (separate from production), but in difficult times, they need to consider how the transition will be made and protect profitability at all times. A future explanation for the delay?

On inflation

There were many questions about inflation and pricing. The CEO and CFO said there was no current pressure on salary costs and energy had no impact. I don’t know why they didn’t mention Enento’s good EBITDA margin (34.5% of revenue in H1 2022) . I’ve always thought that good profitability is an inverse lever if you can’t raise prices. For example: if you generate 10% cash flow from revenue and all costs increase by +10%, your new margin is 1% (90%->99%). If you generate 50% cash flow from revenue and costs increase by +10%, your new margin is 45% (50%->55%).

Thoughts

I like the idea of investing in a data-focused company, but the presentation sometimes gives off a slightly old-fashioned vibe: talking about migrating from mainframe to cloud now, not 10 years ago, and digitizing conversion when sales usually follow up by phone. I don’t like that monetization mentions putting ads on a Google-like minimalist website (https://proff.se/) and that customer acquisition and the IT platform are considered in terms of whether they can afford these investments with the next quarters’ EBITDA % in mind.

Between the lines, I got confirmation of the idea that with large customers, i.e., banks, there are challenges in maintaining the old combination of profitability and growth: banks want to save on costs, make providers compete, and Enento may not be in as privileged a position as it once was when banks themselves were owners. I have assigned a higher probability to the scenario that the old combination of growth and profitability will not return and the company will achieve an OK result similar to the current one. The market probably agrees and it would be interesting to see how it reacts to a negative outlook at the end of the year.

I have sold my position as the final average price was somewhat below the current one (€24), and I now believe there are companies with better growth available at roughly the same price.

[Contrafun]

Interesting thoughts, @vuh. Similar ideas have emerged here. I must admit that I haven’t gotten to know Enento very well. This thread has provided a nice amount of additional information about the company in a condensed form. Thanks to the writers.

In Enento’s case, many eyes are probably on the development of new services. New services should be continuously introduced, so service development should be efficient. In this, Enento also has to rely partly on the technical support of others when building its new services. For example, in the Account Insight account information service, the foundation is the interface services provided by Enfuce Financial Service. Enento must strive to maintain good relationships with these new fintech pioneers.

From a project management perspective, attention is drawn to changes in the CIO position. Asiakastieto’s long-time CIO (2008-2017) left the company in 2017, and since then, the turnover has been significantly higher. The previous CIO was in his position for less than 24 months before moving on to become CIO of Euroclear Sweden. This year, a new CEO, a new CIO, and a new Head of Strategy and Transformation have started. Last year, there were also changes in Enento’s business area managers. After such turnover, the project steering group was hardly on the same page at the beginning of the year.

@vuh

I have given a higher probability to the scenario that the previous combination of growth and profitability will not return, and the company will achieve an OK result similar to the current one. The market probably agrees, and it would be interesting to see how it reacts to a negative outlook at the end of the year.

According to Enento’s guidance, the comparable EBITDA margin at constant currency rates should improve somewhat in 2022 compared to the previous year. The adjusted EBITDA margin in 2021 was 36.2. Compared to previous years, that starts to feel like a pretty high level. According to the Q2’22 report, the company already has several measures underway to improve profitability in the second half of the year, but they are unlikely to provide much help very quickly.

Staff turnover is one area of focus. In previous years, Enento’s staff turnover has been within normal limits. But even then, turnover already causes significant staff recruitment and onboarding costs. It remains to be seen how this year has progressed?

• 2020: 59 new employees, 41 terminated employment relationships. Permanent staff 439 (31.12.2020)
• 2021: 72 new employees, 42 terminated employment relationships. Permanent staff 466 (31.12.2021)
• 2022: average number of employees in the second quarter was 449 (428)

I have also compared the amount of goodwill to previous years. Even during Asiakastieto’s time, the company usually had a lot of goodwill on its balance sheet due to acquisitions. It has been a while since the previous acquisitions, so the risk of failure is likely related mainly to the most recent Proff and Solidinfo acquisitions. However, it’s good that it has come down somewhat from the 2017 figures.

• Share of goodwill in the balance sheet:
  2017: Goodwill was EUR 118.4 million. It accounted for approx. 74% of the balance sheet total (118.4 / 160.4).
  2018: Goodwill was EUR 348.7 million. It accounted for approx. 64% of the balance sheet total (348.7 / 545.8).
  End of H1’22: Goodwill EUR 346.7 million. Accounted for 68% of the balance sheet total (346.7 / 514.2)

• Goodwill in relation to the company’s equity.
  2017: Goodwill EUR 118.4 million and equity EUR 81.1 million. Goodwill was 145% of equity.
  2018: Goodwill EUR 348.7 million and equity EUR 321.3 million. Goodwill was 108% of equity.
  H1’22: Goodwill EUR 346.7 million and equity EUR 293.8 million. Goodwill 118% of equity.

@vuh

I have sold my position as the final average price was somewhat below the current one (24€), and now, in my opinion, there are better growth companies available for roughly the same price.

Indeed, valuation levels have fallen in many growth companies. After the share price decline, Enento’s trading volume has now clearly decreased compared to April-May levels. In the last 6 months, there appears to have been only one larger block trade, which was an internal Carnegie trade of 25,000 shares on 26.08.2022. → https://tuuletus.net/osaketutka/day_by_day.php?ticker=ENENTO

Some still see potential in the company. In May 2022, Long Path Partners flagged that its ownership in Enento had risen above 5 percent. (Arvopaperimarkkinalain 9 luvun 10 pykälän mukainen ilmoitus omistusosuuden muutoksesta Enento Groupissa)
The August issue of Value Investor Insight featured an interview with Will Brennan and Ted Keith of Long Path Partners. The article is only available to subscribers, so I haven’t read it. Maybe someone else can read it.

The summary of the article mentions Alkami Technology’s YTD of -43% and Altus Group’s YTD of almost -33%.

https://valueinvestorinsight.com/Content_Premium/investor-insight-zeroing-in-august-2022.aspx

“Will Brennan and Ted Keith of Long Path Partners describe the strict standards they have for populating their investing wish list, why they think the current market environment plays to their strengths, what industries have become more interesting of late, and why they see unrecognized value today in Alkami Technology, Enento Group and Altus Group.”

[vuh]

https://www.inderes.fi/fi/tiedotteet/enento-groupin-osavuosivuosikatsaus-11-3092022-hyvan-kasvun-ja-paranevan-kannattavuuden

Q3 revenue growth of 7.1% and adjusted EBITDA growth of 14.4% compared to the reference period (at comparable exchange rates). New services accounted for 4% of revenue, compared to 7.6% in the reference period. The company succeeded in increasing revenue almost in line with inflation and defending profitability in the quarter. With this performance, one might expect real stagnation in the future? Are the IT platform and new services being scaled back now?

Although Enento has some counter-cyclical elements, the macro situation affects other areas. The Q4 outlook is more moderate and is expected to continue into 2023. Price increases are not expected to directly compensate for cost increases, so significant improvements in growth and profitability should not be anticipated.

Currently, the share price is €19.68 (+3.8%). In my opinion, as a defensive dividend case, below €20/share, the valuation is becoming attractive again. Dun & Bradstreet, on the other side of the Atlantic, below $12.5/share is also interesting, worth exploring (they acquired Bisnode).

[Sijoittaja-alokas]

Jorma Erkkilä of Salkunrakentaja has written an article on Enento that can be read in a few minutes. Unfortunately, the company is not covered by Inderes.

The third quarter was a quarter of good growth for Enento, says Enento’s CEO Jeanette Jäger. Despite the challenging and uncertain operating environment, consumer credit information services were the company’s primary driver of revenue growth.

According to Jäger, Consumer Insight continued its growth due to strong demand for credit information services in Finland and Sweden. Revenue development in the Business Insight business area was also positive, with growth higher than in the first two quarters.

Enento believes it can adapt to the challenging macroeconomic environment.

Tämä pörssiyhtiö ei kompuroi epävarmoinakaan aikoina

[Contrafun]

Disruption in Enento’s services.

https://www.inderes.fi/fi/tiedotteet/it-hairio-vaikuttaa-joihinkin-enenton-palveluihin-ruotsissa

“On 2 December 2022, Enento received a notification from its Swedish IT supplier, in which the supplier states they are the target of a security-related incident. As a precaution, the supplier decided to shut down all network traffic to its operating environment, as a result of which some of Enento’s services have not been available to customers. There are no indications that any of Enento’s systems were directly targeted by the attack.”

Enento’s press release does not mention the IT supplier.

Softronic announced on 2 December that it had decided, as a precaution, to shut down all its network traffic due to a security-related incident.

https://www.inderes.fi/sv/tiedotteet/softronic-ab-incident

https://www.softronic.se/nyheter/driftinformation-incident

Today, Softronic announced that it has restarted some systems and is planning a gradual restoration of network traffic.

Uppdatering av information avseende säkerhetsrelaterad incident

[imakemoney]

What’s weighing on Enento as the share price approaches 22 again?
I haven’t noticed any announcements; I’d imagine the business is growing.

[beatsby]

Quite a drastic measure. Throwing the development work of recent years into the trash, discontinuing products, and laying people off. Are there enough resources to turn the ship back toward the core business?

One would have thought that business information would have value and that a decent business could be built from it. Instead, they got sidetracked by everything else imaginable and failed at it!

[vuh]

@imakemoney

What is weighing on Enento as the share price approaches 22 again?

I’ve been thinking about how interest rate levels are a relevant metric to follow for Enento, since bonds are an alternative investment. Let’s assume Enento remains a bond-like company paying a €1 dividend, growing at the rate of inflation but no more. The company is quite defensive and easily predictable, so it would probably be appropriate to compare it to, for example, German or Finnish government bond yields and add some risk premium:

Enento then trades at a spread of about 3% to the nominal interest rate and a 5% spread to the real interest rate. Fluctuations in interest rates would explain the volatility of the last 6 months and even this 1-2 year decline. I think the real rate would be more relevant under these assumptions. It’s interesting, though, that in this sense Enento’s valuation hasn’t really changed even though we’ve speculated in the thread about the change in its growth profile. Rates keep moving and the dogs keep barking?

[vuh]

https://www.inderes.fi/fi/tiedotteet/enento-groupin-tilinpaatostiedote-11-31122022-vuosi-paattyi-positiivisen

Enento’s year 2022 is a wrap, it’s still quiet on the forum I’ll update some numbers here.

Enento has continued its moderate growth (~4-5%) and has succeeded in defending its profitability over the last two quarters (Adj. EBITDA % 36.6):

The business keeps rolling steadily forward despite Covid and the macro environment:

The valuation is more attractive than ever; we have speculated the reason to be the changing growth profile and rising interest rates. I think this 16x EV/EBITDA multiple should be adjusted slightly downwards:

I think Enento is quite efficiently priced in the mid-cap category; there are 5 analysts (Enento Groupia seuraavat analyytikot - Enento), short-selling opportunities, and foreign owners. Therefore, I speculate that the share price drop is mainly explained by rising interest rates. I made a very rough DCF model that some diligent soul can improve upon.

	Cash flow from operating activities	Interest paid	Taxes	Investments	Debt repayment	Dividend	Dividend (extra)	FCF disc. (4.5%)	FCF disc. (6.5%)
2022	60.0	−2.6	−9.5	−14.8	−9.6	−24	0.5	35.7	35.7
2023	61.8	−2.5	−9.9	−20.0	−5.4	−24	0.0	30.5	30.0
2024	63.7	−2.5	−10.2	−20.0	−7.0	−24	0.0	30.6	29.5
2025	65.6	−3	−10.5	−20.0	−8.1	−24	0.0	30.7	29.0
2026	66.9	−5.0	−10.7	−16.7	−10.5	−24	0.0	33.1	30.7
2027	68.2	−4.4	−10.9	−17.1	−11.9	−24	0.0	32.3	29.4
2028	69.6	−3.9	−11.1	−17.4	−13.2	−24	0.0	31.5	28.1
2029	71.0	−3.3	−11.4	−17.7	−14.6	−24	0.0	30.8	26.9
2030	72.4	−2.7	−11.6	−18.1	−16.0	−24	0.0	30.0	25.8
2031	73.8	−2.0	−11.8	−18.5	−17.6	−24	0.0	29.3	24.7
2032	75.3	−1.2	−12.0	−18.8	−19.2	−24	0.0	28.6	23.7
2033	76.8	−0.4	−12.3	−19.2	−8.4	−24	−12.6	620.6	348.8

Let’s say Enento grows 3% in 2023-2025 and then 2%; investments would be higher than average during that time: the IT side needs updating and more revenue needs to be acquired as prices cannot be raised for large customers. In September 2025, a €150m debt will need to be renewed (I assume a 4.35% interest rate). Enento will likely continue with a €1/share dividend and the cash flow is well sufficient for its repayment. After 2033, I assume 0% growth. If these analysts tweak their Excels, Enento’s share price drop would be explained:

WACC	4.50%	6.50%
Enterprise value	963.9	662.4
Net debt	131.8	131.8
DCF	832.1	530.6
No. of shares	24034856	24034856
€/share	34.62	22.08

The share price is below €20 again, so I’ve returned as a shareholder. The German government (real?) interest rate has indeed risen by that +2%. I didn’t see that coming, but that much extra yield would be good news in the long run. It would be nice to hear more thoughts; is there some other catch in this story?

[veronmaksaja]

Enento’s share price has been slowly sagging, down -20% in 3 months, currently below 18 EUR. It’s curious that in the KL (Kauppalehti) weekly digest from a couple of weeks ago, 4 analysts are following it, with three having a “buy” recommendation and a target price stubbornly >25 EUR. Yet Mr. Market firmly disagrees—but what really puzzles me is on what basis.

[Sijoittaja-alokas]

OP’s Kimmo Stenvall talked about Enento’s performance.

Enento’s share price has fallen 24% since the beginning of the year. The current enterprise value (EV) is a modest 500 million euros, while just over a year ago, the EV was close to 1 billion euros. Senior Analyst Kimmo Stenvall states that he considers the price decline an overreaction in relation to the company’s problems.

OP:n osakepulssi: Enenton kurssilaskussa ylilyönnin makua

[Pesola]

I picked some of this up and will probably add even more. I’ve been following it for years. Years ago (probably back in 2016), I almost invested at the €14–15 levels based on the dividend yield, but didn’t. I regretted that for a long time. Now we are at nearly the same prices, and the fundamentals haven’t worsened—on the contrary. Of course, interest rates have risen, which lowers the valuation for these bond substitutes. But in this (unpredictable) environment, I’m happy to invest in such a steady and potentially slightly growing company paying a 6% dividend. If/when interest rates eventually drop, there’s room for the valuation to catch up, and until then, we’ll collect 6% a year. The downside is likely moderate, as the business seems quite defensive. Steady performance from the company, though, and the trend in all figures is for the better. Below is a quick overview of the development:

Enento Group Oyj (ENENTO) - Tilinpäätös | Pörssi | Kauppalehti

[Kacey]

Which companies are Enento Group’s biggest competitors in the Nordics? What about in Europe? In case Enento moves outside the Nordics within some timeframe.

[Harvasepaiva]

https://www.inderes.fi/fi/tiedotteet/enento-group-oyj-johdon-liiketoimet-kerppola-0

https://www.inderes.fi/fi/tiedotteet/enento-group-oyj-johdon-liiketoimet-kerppola

New Board member Nora Kerppola bought 12,000 shares in two batches. So, there seems to be confidence.

Also attached are the Q1 report and the share buyback program, which is set to begin tomorrow.

https://www.inderes.fi/fi/tiedotteet/enento-groupin-osavuosikatsaus-11-3132023-vuosi-alkoi-positiivisesti-kannattavan-kasvun

https://www.inderes.fi/fi/tiedotteet/enento-kaynnistaa-5-miljoonan-euron-omien-osakkeiden-takaisinosto-ohjelman

[Contrafun]

@Kacey

Which companies are Enento Group’s biggest competitors in the Nordic countries? What about Europe? If Enento moves outside the Nordics at some point.

Competitors have been mentioned in the message from @Vuh found in the thread, which contains a table of Enento’s peer group.

@vuh

it gathered a good peer group whose figures are available from public sources.

I’ve gathered information here about Enento’s competitors.

First, a summary. In a Kauppalehti article from October 2021, the competitive situation is summarized. According to the article, Enento competes, for example, with Dun & Bradstreet and Experian Plc, which has a turnover of over five billion dollars.

Competitive situation in 2015 (prospectus)
Let’s first look at the information from Enento’s 2015 prospectus. This information from the prospectus is now quite outdated, but it also illustrates the volume of corporate restructuring. Many changes have occurred in the competitive environment during Enento/Asiakastieto’s short time on the stock exchange.

(Source: Prospectus 2015, pages 61-62.)

Corporate restructurings that have occurred since the publication of the prospectus include at least these:

• 2015: Alma Media fully acquired JM-Tieto (B2B-myynnin tehostamiseen erikoistunut JM Tieto kokonaan Alma Medialle - Alma Media). Alma Media also owns Kauppalehti.

• In June 2017, Intrum and Lindorff merged. The European Commission set the condition of selling certain business units for the merger. → Intrum Justitia ja Lindorff ovat yhdistyneet | Intrum

• In 2018, Intrum had to sell Lindorff’s business units in Finland, Sweden, Estonia, and Denmark, as well as Intrum Justitia’s Norwegian business, to Lowell Ltd. → https://www.intrum.fi/fi/yrityksille/tietoa-intrumista/uutiset/tiedotteet/intrumin-ja-lindorffin-yhdistymisen-ulkopuolelle-jaavien-yksikoiden-liiketoimintakauppa-lowell-ltd-lle-saatu-paatokseen/

• In January 2021, Dun & Bradstreet acquired Bisnode’s business. The companies had already collaborated for nearly 30 years: https://www.dnb.com/fi-fi/meista/uutiset/dun--bradstreet-completes-acquisition-of-bisnode/

So now Enento’s main competitor is Dun & Bradstreet. Intrum and Lowell compete with Enento in credit information.

Dun & Bradstreet
Dun & Bradstreet (NYSE:DNB) describes the market’s competitive situation in the 2023 10-K report. (Link: 10-K 2023.pdf)
The company described the Nordic competitive situation with the exact same words in the 2022 10-K report as well. In previous 10-K reports, the Nordic countries were not commented on, as the Bisnode acquisition and DNB’s expansion into the Nordics took place in January 2021.

According to DNB, the main competitors in the Nordics are Enento and Experian, which is also mentioned in the OP peer group referred to at the beginning of the message.

Experian
Experian is listed on the London Stock Exchange (LON:EXPN), but its headquarters are in Dublin, Ireland. According to the 2022 annual report, revenue already exceeded 6 billion.
Report: https://www.experianplc.com/media/4480/experian_ar2022_web.pdf

In addition to Dun & Bradstreet, Experian’s competitors include Equifax Inc (NYSE: EFX) and Fair Isaac Corp (NYSE: FICO).

All four companies collect information on the borrowing of corporate clients and share various key figure data with their customers. Among these, the most common in Finland seems to be D&B’s Paydex indicator, which describes payment delays.

The Paydex indicator probably spread to Finland when the Swedish company Bisnode expanded into the Finnish market sometime in the 90s and began offering Dun & Bradstreet’s information services. Bisnode has also published guides in Finnish on interpreting credit information reports: Bisnode - Guide to interpreting international credit reports.pdf

Based on a brief search, I didn’t find references to the Nordic competitive situation in Experian Plc’s reports. Experian’s offices are listed on their website, with locations found in Norway and Denmark, among others, but somewhat surprisingly, Sweden is not on the list. → Contact us | Experian plc

Experian’s cooperation should also be noted here.
In 2014, Experian established the Nordic Credit Alliance (NCA) with Asiakastieto. According to UC’s website, the partnership between UC, Asiakastieto, and Experian provides information on over three million companies and 14 million private individuals in the Nordic countries. → Collaboration - UC
Bankruptcy statistics for Finland, Sweden, Norway, and Denmark are also produced as a collaboration between Enento and Experian. The latest bankruptcy update seems to be from the beginning of last year.
More start-ups and fewer bankruptcies in the Nordics during 2021 than prior to the pandemic - Enento

Lowell Ltd
I already mentioned Lowell Ltd at the beginning of the message, so a few more notes on it. According to Lowell’s website, Lowell was formed in 2015 as a result of the merger of two market leaders. The UK market leader Lowell Group and the German GFKL Group merged.

Source: Lowell’s results reports, all of which can be found here: Performance and Governance

Lowell’s parent company is Garfunkelux Holdco 2 S.A. According to the LEI register, subsidiaries of the Luxembourg-based Garfunkelux include Lowell Sweden and Lowell Finland.

---

If we look at returns, the returns of publicly listed companies have diverged slightly over the last 5 years. FICO has been the best investment. Equifax and Experian have progressed at the same pace. Those who invested in Enento and DNB have fared the worst.

DNB has not met the expectations set by analysts. In February 2023, DNB published its Q4 report. For the fourth quarter, North American revenue grew by 1.4%, but conversely, international revenue fell by 5.6% to 160.1 million dollars.

• However, the consensus on DNB is quite positive. 7 Buy, 1 Overweight, 4 Hold, 1 Sell: https://www.wsj.com/market-data/quotes/DNB/research-ratings

[Contrafun]

Enento also published its Q1 report this week.

• Interim Report Q1/2023: https://enento.com/wp-content/uploads/2023/04/Enento-Group-Osavuosikatsaus-Q1-2023.pdf
• Presentation material: https://enento.com/wp-content/uploads/2023/04/Enento-Group_presentation_Q1_2023_Web-1.pdf
• Webcast recording: Enento Group Q1'23 ma 24.4. klo 14:00 - Inderes

According to Arvopaperi, the consensus of 4 FactSet analysts expected revenue of 41.2 million and an operating profit of 8.8 million euros. Tulosjulkistaja Enento Group vahvassa vedossa latteassa maanantaipörssissä | Arvopaperi

OP commented on the result on Twitter. EBITDA slightly exceeded OP’s forecast. Enento’s outlook for the remainder of the year is promising. → https://twitter.com/OPsijoittaminen/status/1650449651160457218

Danske Bank commented on Enento’s Q1 result in its morning report yesterday. Danske stated it is lowering its target price to 22 euros (prev. 22.50), but raised its recommendation to Buy (prev. Hold).

According to Danske, Enento’s revenue was 3% below FactSet consensus, but adjusted EBITDA was 5% above consensus.

According to Danske, Enento’s Business Insight is key to the company surviving a weak year. Enterprise Solutions, in particular, is supported by current economic uncertainty and increased bankruptcies. Danske reiterated the idea of Enento’s counter-cyclicality in its morning report. According to Danske, Enento was still trading yesterday at a discount of approximately 30-35% relative to its key peers. Danske’s target is 10.6x EV/EBITDA.

[Harvasepaiva]

https://www.inderes.fi/fi/tiedotteet/muutos-enento-groupin-johtoryhmassa-2

As share buybacks continue, changes in the management team. A more significant change in the releases below, where two business segments are merged.

At the same time, the Digital Processes business area will be integrated into the Business Insight business area. As a result, starting from 15 June 2023, Enento Group will operate with two business areas: Business Insight and Consumer Insight.

“We firmly believe that combining these two business areas will generate many synergies. We see significant potential in compliance services, and with this change, we will be able to promote even closer cooperation regarding our Nordic business information offering,” says Jeanette Jäger.

[Kacey]

Enento Group doesn’t specifically name—or at least I haven’t noticed them disclosing publicly—who their most significant customers or segments are, other than on a general level. How widely distributed is the revenue in Business Insight, for example, or is it a situation where a few large research firms or state-owned organizations account for the lion’s share of the revenue, and potential customer churn would cause significant hits to the business?