Growth slowed down on COVID and Siili Auto
After very resilient H1 performance, Siili’s Core operations were hit by the effects of COVID-19. With customers downsizing projects and holding back on launching new projects, the growth in Siili Core flattened and the negative impact hit later than we had assumed. However, we remind that Q3 is a seasonally quiet quarter from which we cannot draw far-reaching conclusions. We also remain confident that demand on the Automotive side will cheer up after few months of normalised car sales and that growth will normalise in 2021.
More on new strategy in touch with the CMD on 3 November
Siili is reshaping its strategy. It aims to accelerate its international growth and focus on developing the digital experience. We continue to believe that the digital transformation market continues to grow rapidly. Although COVID-19 may cause temporary hiccups it will in the end create more demand for digital services. Accelerating international growth may come at the cost of profitability. However, we wait for the company to say more about the plan at next week’s capital markets day before making any judgements.
Fair value range down to EUR 13-15
We have cut our 2020 and 2021 EBITA estimates by 12% and 10% respectively. However, we find the company should benefit from market growth and hence our long-term estimates remain broadly intact. Our DCF valuation is slightly down to EUR 15 and we cut our fair value range by EUR 1.0 to EUR 13-15.
Source: Finwire News.