Comments on EPTI’s Report for the Second Quarter of 2022


EPTI published, August 23, its interim report for the second quarter of 2022. The following are some key events that we have chosen to highlight in connection with the report:

  • Net sales amounted to SEK 47.4m (8.1) – corresponding to a growth of 483%, of which 68% organic growth
  • Positive EBITDA result, which during the period amounted to SEK 0.6 m (-2.8)
  • Net asset value (NAV) at the end of June 2022 amounted to SEK 698.8m (844.0), equal to a decrease of -17% Q-Q, mainly attributable to an adjustment of the NAV of SEK -139.9m within the EPTI Invest AB business area

Organic Growth of 68% Indicates a Positive Operational Development

For the first quarter of 2022, EPTI showed net sales of SEK 47.4m (8.1), which corresponds to a growth of 483% Y-Y, at the same time it is equal to a decrease of 12% Q-Q, as a result of EPTI no longer being the majority shareholder in Apotekamo, Bruger, Workamo and D1 Technologies, which during the first quarter contributed a net revenue of SEK 15.9m to the company, which is not included in the second quarter’s revenue. On a pro forma basis, including the mentioned holdings, net sales amounted to SEK 70.5m during Q2-22, corresponding to a growth of 30% Q-Q. Furthermore, organic growth, which Analyst Group considers to be an important metric for measuring the operational development of the portfolio companies, amounted to 68% Y-Y.

During Q2-22, we believe that EPTI once again deliver strong growth. To name a few data points in light of several successful deals, the gig platform Workamo has increased net sales by 795% in H1-22 compared to H1-21, the mobility company Linky Tech completed a reverse acquisition of ApParkingSpot and is launching its new combined parking service on over 100,000 parking spaces through agreements with i.e. Parkman and Apcoa. Furthermore, the SaaS company Moblrn, has signed several new agreements, where international customers such as Panasonic HVAC and Malaysia’s largest bank, Maybank, can be found. In a market that continues to be characterized by a restrained climate for raising capital, we see it as particularly important for the portfolio companies to be part of EPTI’s independent ecosystem, by taking part in operational support and a broad network of investors, in order to enable continued growth”, says Analyst Group.

Positive EBITDA Result

Regarding the total operating expenses, excluding depreciation and amortization, these amounted to approximately SEK -54.0m (-74.6), which corresponds to a cost reduction of 28% Q-Q, which contributed to the EBITDA result turning positive during Q2-22 and amounted to about SEK 0.6m. During Q2-22, EPTI’s cash flow from operating activities, after changes in working capital, amounted to approximately SEK -1.9m/month. Given that EPTI would maintain the same burn rate in the coming months, as well as taking into account the company’s cash position of SEK 11.7m at the end of June 2022, current operational activities would be financed until the end of Q4-22, all else equal. Worth noting, is that EPTI has secured an increased credit of SEK 20m, which, together with the company’s current bank overdraft facility and cash position, sums the group’s liquid assets to approximately SEK 40.3m at the end of Q2-22. Furthermore, EPTI also states in the quarterly report that the company aim to complete one or more exits in order to optimize the investment portfolio and further strengthen the balance sheet, which Analyst Group sees as positive, given that the right exit takes place at the right time.

Reduced net asset value as a result of market adjustment

At the end of March 2022, EPTI’s NAV amounted to approximately SEK 844m and during the second quarter of 2022, the company has had a total decrease in value of approximately SEK -145m, which means that EPTI’s NAV at the end of June 2022 amounted to approximately SEK 699m. The change in value during the period is mainly attributable to the fact that EPTI has adjusted the net asset value by approximately SEK -140m, in order to reflect the increased uncertainty surrounding the valuation of unlisted companies. During Q2-22, the net asset value of EPTI Services, which includes subsidiaries that provides deep operational support to other portfolio holdings, amounted to approx. SEK 351m (323), which corresponds to an increase of 9% Q-Q, where Analyst Group estimates that the increase is mainly attributable to the acquisition of Adhype, as well as an increased profitability of the portfolio companies. The EPTI Invest business area, which includes fast-growing, digital portfolio companies with varied ownership, was negatively affected by the valuation adjustment, which is why the net asset value amounted to SEK 317m (482), corresponding to a decrease of -34%. However, after the end of the period, EPTI’s portfolio company Apotekamo announced a completed financing round of SEK 26.5m on a pre-money valuation of SEK 152m , in which EPTI invested a total of SEK 5m. Through the financing round, the company’s holding in Apotekamo amounts to 42% and EPTI’s NAV increases by approx. SEK 27m to SEK 726m.

To summarize, we are positive that EPTI delivers an interim report with rising profitability,and that the company continues to take advantage of attractive acquisition opportunities of cash flow-positive companies, since the market turmoil enables attractive valuation multiples. At the same time, EPTI delivers high organic growth, which indicates that the portfolio companies accelerate their development by taking part in operational support within the company’s independent ecosystem.