Ctac: a business integrator
Ctac is a business integrator, which helps Dutch and Belgian companies to create the IT systems that are needed to support their business needs. It mainly serves the retail, wholesale, manufacturing and real estate verticals, and focuses on five key domains:
- Business transformation: help the customer to develop new business models and transform the customer experience.
- IT modernization: develop the right enterprise architecture for the customer and help them to move (part of) their data to the cloud, so that it is accessible from a wide variety of (mobile) devices for employees and customers
- Connected intelligence: optimize data collection (also using new Internet of Things technology) and analyze it to extract business value from it. Ctac is increasingly using artificial intelligence to offer predictive analytics that allow the customer to anticipate future needs.
- Transformation and change management: assist customers that need to adapt their organization to an important transformation such as a merger or a new market approach. This is a new domain for Ctac, where the project and program managers that joined the company through the acquisition of Purple Square at the end of 2019 play an important role.
- Security and trust: cyber-security has become of paramount importance for customers because their processes are increasingly connected with external networks and the internet. Ctac helps them to protect their systems from intrusion, data theft and other forms of hacking that can jeopardize their operations or the safety of sensitive data.
Ctac intends to grow its revenues in these domains through organic growth, possibly complemented by acquisitions in the case of business transformation and security & trust. In serving its customers, Ctac makes use of a wide range of solutions from external vendors including SAP (for which it is a platinum partner), Microsoft (gold partner), Dell Boomi, InRiver, Mendix, and Winshuttle.
Competitive description
Ctac is one of the larger companies in the very fragmented IT markets it services. Its competition mainly consists of other local players such as Simac, Conclusion, Experis and SOA People (in Belgium). For its business consultancy services it also competes with the large accounting firms such as Deloitte and Accenture.
Analyst
Historical price range
| Date | Share price | Target Valuation Range (Low) | Target Valuation Range (High) |
|---|---|---|---|
| 10-Jun-22 | € 3.80 | € 4.90 | € 7.50 |
| 10-Mar-22 | € 4.10 | € 5.00 | € 6.80 |
| 28-May-21 | € 4.01 | € 5.00 | € 6.80 |
| 18-Jun-21 | € 4.67 | € 5.00 | € 6.80 |
| 30-Jul-21 | € 4.60 | € 5.00 | € 6.80 |
| 28-Oct-21 | € 4.44 | € 5.30 | € 7.20 |
| Last update: 10.06.2022 |
Key figures and estimates
| mln euros | 2021 | 2022e | 2023e | 2024e |
|---|---|---|---|---|
| Sales | 106.4 | 114.9 | 123.7 | 129.9 |
| EBITDA | 12.0 | 13.4 | 15.3 | 16.6 |
| EBIT | 6.5 | 7.7 | 9.3 | 10.2 |
| Net Profit | 4.5 | 5.0 | 6.0 | 6.7 |
| Adjusted Net Profit | 4.5 | 5.0 | 6.0 | 6.7 |
| Adjusted EPS | 0.33 | 0.36 | 0.44 | 0.48 |
| Dividend p.s. | 0.11 | 0.13 | 0.15 | 0.17 |
| Net Debt incl. lease | 3.4 | 4.4 | 0.7 | -4.5 |
| Last update: 10.06.2022 |
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This research has been prepared by Bank Degroof Petercam SA/NV (“Degroof Petercam”).
Degroof Petercam is a financial institution authorised by and under the prudential supervision of, as a credit institution, the National Bank of Belgium and under the supervision of the Financial Services and Markets Authority. It has its registered office at 44, rue de l’Industrie, 1040 Brussels and is registered with the crossroads bank for enterprises under number 0403.212.172.
No investment research
This research is considered as a marketing communication. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and that it is not subject to any prohibition on dealing ahead of the dissemination of investment research.
Not approved by the competent regulator
This research is not subject to any statutory prior approval requirement by a competent supervisory authority. As a result, this research has not been, and will not be submitted for approval to any competent supervisory authority.
Content of the research
This research has been prepared by the sell-side research team of Degroof Petercam. All opinions, views, estimates and projections included herein reflect the personal views of the author on the subject company and related securities as of the date of this report. This research does not necessarily reflect the views of Degroof Petercam as institution and is subject to change without notice. The analyst(s) claim(s) furthermore not to have any meaningful financial interest in any of the aforementioned companies, not to be conflicted and not to have accepted any inducement from any person with a material interest in the subject company of the investment research at hand. The remuneration of the analysts is subject to the remuneration policy of Degroof Petercam and can be consulted here .
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Not for retail clients
This research is meant exclusively for professional clients or eligible counterparties (as defined in the Markets in Financial Instruments Directive 2014/65/EU) and is not intended for retail clients use.
Review by the subject company of this research
Degroof Petercam reserves the right to submit a draft of the research reports (excluding – where relevant - the target price/fair value and the recommendation) for review to the subject company with the sole purpose of correcting any inadvertent material factual inaccuracies.
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It should be noted that Degroof Petercam has received a remuneration from the subject companies for the drafting and dissemination of this research. It should be noted that this remuneration is not subject to the content of the reports.
Due to the broad activities of the group to which Degroof Petercam belongs, it may occur that Degroof Petercam or any of its affiliates:
• holds positions or effect transactions in the securities of the companies mentioned herein or any member of its group;
• performs or seeks to perform investment banking services for such companies (such as corporate finance advice services);
• acts as a market maker or a liquidity provider for the securities of the companies mentioned herein;
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In this regard, Degroof Petercam is required to have arrangements in place to identify, prevent and manage conflicts of interest between itself and clients and between different clients. Degroof Petercam operates in accordance with a conflicts of interest policy under which Degroof Petercam has identified those situations in which there may be a conflict of interest and, in each case, the steps taken to manage that conflict. Degroof Petercam has taken reasonable care to ensure that objectivity of this research and the independence of the author are ensured and it has put in place several arrangements (such as internal policies and procedures) in order to manage potential conflicts of interests. Degroof Petercam has for example implemented a remuneration policy, a personal account dealing procedure and several organizational measures such as Chinese Walls which are designated to prevent against the wrongful disclosure and use of confidential and sensitive information. Where the arrangements under our conflicts of interest policy are not sufficient to manage a particular conflict, Degroof Petercam will inform the relevant client of the nature of the conflict so that the client can make a well-informed decision. Next to the aforementioned arrangements, Degroof Petercam has also implemented the internal arrangements required by article 37(1) of the Commission Delegated Regulation 2017/565.
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This research does not constitute and should not be construed as, an offer or solicitation for the sale, purchase or subscription of any financial instrument. Any offer or entry into any transaction requires Degroof Petercam’s subsequent formal agreement which may be subject to internal approvals and execution of binding transaction documents.
No investment advice
The information contained in this research should not be regarded as personalized and should not be considered as a recommendation of investment advice. Recipients should not construe the contents of this report as legal, tax, accounting or investment advice or personal recommendation. Accordingly Degroof Petercam is under no obligation to, and shall not, determine the suitability for the recipient of any potential transaction described herein. Recipients should seek advice to their advisors in order to determine the merits, terms, conditions and risks of any potential transaction that may be described herein.
Forward looking statements
This research may contain forward-looking statements. These forward-looking statements are subject to risks, uncertainties and assumptions and other factors that could cause the actual results, condition, performance, prospects, growth or opportunities to differ materially from those expressed in, or suggested by, these forward-looking statements. Forward-looking statements are not guarantees of future performance and there is no guarantee that any of the estimates or projections will be achieved. Actual results may vary from the projections and such variation may be material.
Past & simulated past performance
Any past or simulated past performance including back-testing, modelling or scenario analysis contained herein is no indication as to future performance. No representation is made as to the accuracy of the assumptions made within, or completeness of, any modelling, scenario analysis or back-testing.
Valuation method
Our target valuation is generally based on a combination of valuation methods including DCF, SOTP, peer group comparison, historical ratio analysis and others. The outcome of these valuation methods is sensitive to both external factors (e.g. interest rates and market valuations) and assumptions we make (e.g. on sales growth, profitability, or valuation discounts). Be aware that even small changes in these elements can lead to large changes in target valuation. More information on the valuation method used for these company can be found in the reports published on https://www.degroofpetercam.com/en-be/commissioned-research.
No liability
Degroof Petercam accepts no liability whatsoever for any direct or consequential loss or damage arising from any use of this research or its contents. These reports do not purport to give an exhaustive description of the financial instrument and of the issuer of the financial instrument it relates to. Although all reasonable care has been taken to ensure that the information in this research is accurate, neither Degroof Petercam, nor any of its affiliated companies, directors, advisors or employees can be held liable for any incorrect, incomplete or missing information, or for any direct or indirect damage, losses, costs, claims, liabilities or other expenses which would result from the use of, or reliance on, this research, except in case of willful misconduct or gross negligence. The information contained in this research has not been independently verified by any independent third party.
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