Talenom - Continued double-digit growth

Name: Evli
Price range: $

Talenom’s Q4 was rather well in line with our expectations and with our 2021 estimates corresponding well with the guidance our estimates remain largely intact. Preparations for continued growth remain on the agenda. Our target price remains unchanged at EUR 11.5, our rating is now HOLD (SELL).

Q4 report rather well in line with expectations
Talenom’s Q4 report all in all was rather well in line with our expectations. Net sales amounted to EUR 16.5m (Evli EUR 16.8m) and operating profit to EUR 2.4m (Evli EUR 2.6m). The BoD proposes a dividend distribution of EUR 0.15 per share (Evli EUR 0.15). In 2021 the company expects net sales to amount to EUR 75-80m and operating profit to amount to EUR 14-16m (Evli prev. est. EUR 77.3m and EUR 15.5m respectively). Further acquisitions during 2021 could still see net sales grow past the guidance range, while the typically lower profitability of acquisition objects should limit earnings growth potential.

Preparations and build up for future growth
We have made only minor revisions to our estimates. The year 2021 will to quite some extent be a year of preparing and building up the new growth avenues. Organic growth figures should still be somewhat weaker, but the company sees potential for sales efforts in 2021 to pave the way for better figures in 2022. The small customer concept rollout has progressed quite as planned and the launch in Sweden during 2021 also remains on schedule. We see a limited impact of the new concept on sales in 2021. No new relevant information on the plans to further expand internationally was given.

HOLD (SELL) with a target price of EUR 11.5
Our estimates at large remain intact post-Q4 and we make no adjustment to our target price of EUR 11.5. Our TP values Talenom at approx. 43x 2021 P/E. After the minor share price correction our rating is now HOLD (SELL).

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