This report was completed and disseminated 30 March 2021: 8:21 CEST Penser Access | Media Conglomerates | Sweden | 30 March 2021 Everysport Acquires 50% of Klövern Padel Estimate Changes (SEK) Now Before EPS, adj 21e 2.39 1.98 20.8% EPS, adj 22e 4.04 2.85 41.9% EPS, adj 23e 4.77 3.48 37.0% Calendar Events Key Figures (mkr) Number of Shares 5.4m Market cap 180 Net Debt (5) EV 175 Avg. No. of Daily Traded Sh. 11.1(k) Reuters/Bloomberg EVERY A:SS Estimates (SEK) 20 21e 22e 23e Sales,m 82 141 193 212 Sales Growth (8.7)% 71.1% 36.7% 10.1% EBITDA, m 4.7 21.8 29 32 EBIT, m 0.7 16.7 28.0 33.0 EPS, adj 0.13 2.39 4.04 4.77 EPS Growth (91.6)% 1,744.7% 69.4% 17.9% Equity/Share 4.2 10.6 14.6 19.4 Dividend 0.00 0.00 0.00 0.00 EBIT Marginal 0.9% 11.7% 14.3% 15.3% ROE (%) 2.6% 32.3% 32.1% 28.1% ROCE 2.2% 30.8% 34.1% 31.2% EV/Sales 2.13x 1.25x 0.91x 0.83x EV/EBITDA 37.5x 8.0x 6.0x 5.5x EV/EBIT 237.6x 10.5x 6.3x 5.3x P/E, adj 259.7x 14.1x 8.3x 7.0x P/Equity 8.0x 3.2x 2.3x 1.7x Dividend yield 0.0% 0.0% 0.0% 0.0% FCF yield 5.0% 0.8% 9.7% 12.9% Net Debt/EBITDA (1.0)g (0.1)g (0.7)g (1.4)g Risk and Potential Motivated value 38.00 - 40.00 Current price SEK33.60 Risk level Medium One Year Performance Chart A M J J A S O N D J F M 40 35 30 25 20 15 10 5 EVERY A OMX Analysts [email protected]Creating a new vertical in trend sports ESMG has signed an agreement to acquire 50% of Klövern Padel, one of Sweden’s largest operators of padel courts. The remaining 50% will be owned by real estate company Klövern. The company currently owns five facilities and plans to open four new ones in 2021. It has about 30,000 customers. The purchase price amounts to SEK 24.3 million and is to be paid with newly issued shares in ESMG and cash. Good price given strong revenues Klövern Padel had sales in 2020 of SEK 31 million and expects to double its revenues in 2021. Operating profit during the year amounted to SEK 4.3 million. We have used Klövern Padel’s forecast as a basis for our estimate adjustments and we are upping our sales estimate by 24% for this year and about 48% for the coming two years. As profitability is higher than ESMG, we are upping EPS by 42% and 37%. Profitable new acquisition raises estimates We are increasing our fair value for ESMG to SEK 38-40, based on larger cash flows. However, we believe the company will have higher investment needs going forward in order to be able to grow the padel business, which will affect profits in our DCF. We see synergies between the physical padel courts business and the company’s media assets since owning padel facilities gives access to customer data.
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This report was completed and disseminated 30 March 2021: 8:21 CEST
Penser Access | Media Conglomerates | Sweden | 30 March 2021
EverysportAcquires 50% of Klövern Padel
Estimate Changes (SEK)
Now Before
EPS, adj 21e 2.39 1.98 20.8%
EPS, adj 22e 4.04 2.85 41.9%
EPS, adj 23e 4.77 3.48 37.0%
Calendar Events
Key Figures (mkr) Number of Shares 5.4m
Market cap 180
Net Debt (5)
EV 175
Avg. No. of Daily Traded Sh. 11.1(k)
Reuters/Bloomberg EVERY A:SS
Estimates (SEK)
20 21e 22e 23e
Sales,m 82 141 193 212
Sales Growth (8.7)% 71.1% 36.7% 10.1%
EBITDA, m 4.7 21.8 29 32
EBIT, m 0.7 16.7 28.0 33.0
EPS, adj 0.13 2.39 4.04 4.77
EPS Growth (91.6)% 1,744.7% 69.4% 17.9%
Equity/Share 4.2 10.6 14.6 19.4
Dividend 0.00 0.00 0.00 0.00
EBIT Marginal 0.9% 11.7% 14.3% 15.3%
ROE (%) 2.6% 32.3% 32.1% 28.1%
ROCE 2.2% 30.8% 34.1% 31.2%
EV/Sales 2.13x 1.25x 0.91x 0.83x
EV/EBITDA 37.5x 8.0x 6.0x 5.5x
EV/EBIT 237.6x 10.5x 6.3x 5.3x
P/E, adj 259.7x 14.1x 8.3x 7.0x
P/Equity 8.0x 3.2x 2.3x 1.7x
Dividend yield 0.0% 0.0% 0.0% 0.0%
FCF yield 5.0% 0.8% 9.7% 12.9%
Net Debt/EBITDA (1.0)g (0.1)g (0.7)g (1.4)g
Risk and Potential
Motivated value 38.00 - 40.00 Current price SEK33.60
ESMG has signed an agreement to acquire 50% of Klövern Padel, one of Sweden’s largest operators of padelcourts. The remaining 50% will be owned by real estate company Klövern. The company currently ownsBve facilities and plans to open four new ones in 2021. It has about 30,000 customers. The purchase priceamounts to SEK 24.3 million and is to be paid with newly issued shares in ESMG and cash.
Good price given strong revenues
Klövern Padel had sales in 2020 of SEK 31 million and expects to double its revenues in 2021. OperatingproBt during the year amounted to SEK 4.3 million. We have used Klövern Padel’s forecast as a basis forour estimate adjustments and we are upping our sales estimate by 24% for this year and about 48% for thecoming two years. As proBtability is higher than ESMG, we are upping EPS by 42% and 37%.
Pro/table new acquisition raises estimates
We are increasing our fair value for ESMG to SEK 38-40, based on larger cash Dows. However, we believe thecompany will have higher investment needs going forward in order to be able to grow the padel business,which will aFect proBts in our DCF. We see synergies between the physical padel courts business and thecompany’s media assets since owning padel facilities gives access to customer data.
Penser Access | Media Conglomerates | Sweden | 30 March 2021
OverviewAcquires 50% of Klövern Padel
Investment Case
Everysport Media Group (ESMG) is a Swedish media group with a focus on sports. The company diFers fromtraditional Swedish media groups as it is entirely digital and has built up a number of strong brands andassets in niche media focused on sports. In addition to being a traditional media group, ESMG owns a world-leading ice hockey database, called Elite Prospects, that functions as a social network for players. In additionto this, it owns 50% of a leading operator of padel courts. We assess that the value of Elite Prospects andthe company’s high recurring revenue stream are not reDected in the share price, and we see a fair valueof SEK 38-40.
Company Pro/le
ESMG owns and operates a number of niche sports websites. These focus on speciBc sports or fans of speciBcteams. The websites follow a macro trend in the media landscape of new digital media groups occupying aspace that traditional media like newspapers and TV have exited for cost reasons. One example of this is thatESMG owns Sweden’s largest Doorball site, a sport that Bnds little space in traditional media. By controlling aDexible platform, ESMG can Bnd new niches to establish itself in. In Q3, for example, it set up Sweden’s Brstdedicated news website for the fast-growing sport of padle. The company also owns a world-leading database(Elite Prospects) for ice hockey players that functions as a social network in the sport.Another interesting aspect of ESMG is that it has come some way on its journey from being free and usingadvertising revenue as its main income stream, to relying on paying users. We anticipate that an increasingshare of advertising spend will go to platform companies like Google and Facebook, making it diIcult forsmaller players to make a living from advertising. By being relatively digital and new, ESMG does not havethe same legacy of advertising-heavy revenue as established media groups.By owning Elite Prospects and having a high proportion of subscribers on its websites, the company hassucceeded in building up a relatively high recurring revenue base that we believe is not reDected in thevaluation of the company. At present, it is valued at a cash Dow yield just under 10% for the coming years.We believe this cash Dow could be used to grow through acquisitions.The acquisition of Klövern Padel strengthens the company’s cash Dows since operating padel facilities isproBtable and has a short payback for the property owner, in this case real estate company Klövern. We seesynergies with the company’s digital assets in areas such as cross-marketing.
Valuation approach
We have chosen three diFerent methods for valuing ESMG: a relative valuation, a discounted cash Dowanalysis and a sum of the parts valuation. All three of these indicate a signiBcant upside compared to today’sshare price levels. We estimate that the share could reach our fair value of SEK 38-40 given the four conditionsbelow.
• Prove the scalability of its media platform by launching more niche sites and growing with existingeditorial resources.
• Reduce the share of volatile advertising revenue in B2B. We anticipate that a large part of theadvertising market will be gobbled up by platform companies such as Google and Facebook. If ESMGis able to show that it can reduce its dependence on the volatile advertising market, we see reasonsfor a signiBcant appreciation.
Everysport – 30 March 2021 2 Erik Penser Bank
Penser Access | Media Conglomerates | Sweden | 30 March 2021
OverviewAcquires 50% of Klövern Padel
• Continued high growth in Elite Prospects. We see Elite Prospects as an important value driver in thecoming years, given the strong expansion and the high gross margin for the service.
• Continued growth and high demand in padel sport: We believe that EveryPadel will continue to bea cash cow, assuming the current popularity of padel continues.
Target Price
We see a fair value of SEK 38-40. See reasoning above. We consider the risk to be relatively low given thecompany’s strong Bnancial position and high degree of recurring revenue.
Erik Penser Bank 3 Everysport – 30 March 2021
Bolagsfakta Operativa segment 2020
Sales och EBIT Sales och EBIT
Digital adspend in Sweden, SEKm Adspend in Sweden, SEKm
Everysport – 30 March 2021 4 Erik Penser Bank
Income statement
Balance sheet
Erik Penser Bank 5 Everysport – 30 March 2021
Cash7ow statement
Everysport – 30 March 2021 6 Erik Penser Bank
KPIs
KPIs
Quarterly data
Erik Penser Bank 7 Everysport – 30 March 2021
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