My top position (25% of my portfolio) VusionGroup (SES ImagoTag): The Life of the Retail Party!
Forget disco balls and dance floors, the hottest party in retail is happening right on the shelves! And Vusion Group is the DJ, the bartender, and the bouncer all rolled into one
They're the masters of the Electronic Shelf Label (ESL) and digital solutions, bringing the party to physical stores worldwide. Think of them as the ultimate wingman for retailers trying to navigate the wild world of modern shopping. 🕺💃
The Retail Scene: It's a Jungle Out There!
The retail jungle is getting wilder than ever, with e-commerce swinging from the vines and consumers changing their stripes faster than a chameleon on a rainbow. Physical stores are feeling the heat, and they need more than just a new coat of paint to survive. They need to evolve, adapt, and throw a party that customers can't resist! That's where SES-imagotag comes in, armed with digital solutions that are hotter than a habanero. 🔥
SES-imagotag's Party Tricks:
Electronic Shelf Labels (ESL): These aren't your grandma's price tags! SES-imagotag's ESLs are like mini-billboards on the shelves, flashing prices, deals, and product info faster than you can say "impulse buy." They're the life of the party, keeping customers engaged and entertained. 🤪
VUSION Retail IOT Cloud Platform: This is the brain of the operation, the control center where the magic happens. It's like the ultimate party planner, coordinating everything from pricing updates to inventory management. Think of it as the invisible hand that keeps the party flowing smoothly. 🧠
Value-Added Solutions (VAS): These are the party favors that keep customers coming back for more.
Captana: This is like the party photographer, capturing real-time snapshots of the shelves to make sure everything's in its place and no product is feeling left out. 📸
Engage: This is the hype man, creating exciting in-store marketing campaigns that get customers pumped up and ready to spend. Think flashing lights, catchy tunes, and irresistible offers. 🎤
VUSION OS: This is the tech support crew, making sure all the digital gadgets are working smoothly and no one's stuck with a dead battery. 🤓
Financial Highlights: Show Me the Money!
SES-imagotag isn't just about throwing a good party; they're also raking in the dough! 🤑
Revenue: Over €600 million in 2022, more than 1B in 2024 and they're projected to grow faster than a beanstalk, with a 30% CAGR through 2027. Ka-ching! 💰
EBITDA: They're not just making money; they're keeping more of it! Their EBITDA margin has gone from a measly 4% in 2017 to a respectable 10% in 2022, and they're aiming for a whopping 22% by 2027. Talk about a profit party! 🎉
VAS Revenue: Those party favors are a hit! VAS revenue has doubled as a percentage of total revenue since 2017, and they're aiming to triple it by 2027. Who doesn't love a good party favor?🎁
Global Expansion: They're taking the party global, with a focus on conquering North America. By 2027, they expect 40% of their revenue to come from across the pond. Let's hear it for international party animals! 🌎
Installed Base: They've already installed over 350 million ESLs, and they're aiming for over a billion by 2027. That's enough to throw a party on every shelf in the world! 🤯
Cloud ESLs: They're taking the party to the cloud! With 50 million cloud ESLs in 2022 and a target of 1 billion by 2027, they're making sure the party never stops, even when the lights go out. ☁️
R&D Investment: They're not just resting on their laurels; they're investing heavily in R&D (€30 million in 2022!) to keep the innovation flowing and the party fresh. 🧪
Employee Growth: They're building a party crew! With over 630 employees and counting, they're making sure there's always someone to keep the good times rolling. 🥳
Key Strengths: The Party Essentials
Global Leadership: They're the kings of the retail IoT jungle, with a global presence that would make even the most seasoned party animal jealous. 👑
Innovation: They're constantly coming up with new and exciting ways to keep the party going, from colorful ESLs to interactive displays. They're like the Willy Wonka of retail technology. 🍭
Comprehensive Platform: They've got everything you need to throw a killer retail party, from the hardware to the software to the support crew. They're the one-stop shop for all your digital needs. 🏪
Strong Partnerships: They've teamed up with some of the biggest names in tech, like BOE Technology and Microsoft, to make sure the party is always powered by the latest and greatest technology. 🤝
Okay, let's talk valuation, the part where we try to figure out if we're getting a good deal or buying a lemon. 🍋
With a market cap around €2 billion and a stock price of €140, SES-imagotag might seem a bit pricey at first glance. But hold your horses! Let's dive deeper and see what's really going on under the hood.
Current Metrics:
EPS (Earnings Per Share): €5.02 This tells us how much profit the company makes for each share of stock. It's like checking the horsepower of a car - the higher the EPS, the more muscle the company has.
FCF Per Share (Free Cash Flow): €9 in 2023. Now, this is where the real party starts! FCF is the cash flow left over after a company pays for its operations and investments. It's like the cash in your pocket after a night out - the more you have, the more fun you can have (or reinvest in the business!). But keep in mind, SES-imagotag had a wild 2023, with a big down payment from Walmart boosting their FCF. So, this number might be a bit inflated, like that guy who brags about his stock portfolio after a lucky streak. 😜
Price-to-Earnings (P/E) Ratio:
To calculate the P/E ratio, we divide the stock price (€140) by the EPS (€5.02). This gives us a P/E ratio of roughly 28. This means you're paying €28 for every €1 of earnings. It's like comparing the price of a concert ticket to the length of the show - the higher the P/E, the more you're paying for each "minute" of profit.
Looking Ahead to 2027:
Now, let's crank up the time machine and zoom into the future! Vusion has big plans, projecting €2 billion in revenue and a 22% EBITDA margin by 2027. If they pull it off, here's what the valuation picture looks like:
2027 Price-to-Sales Ratio: With a €2 billion market cap and €2 billion in revenue, their price-to-sales ratio would be 1. This means you're paying €1 for every €1 of sales. It's like buying a vintage record for the same price as a new one - a pretty sweet deal!
2027 P/E Ratio: With a 22% EBITDA margin on €2 billion in revenue, their net income would be around €440 million. Assuming no significant change in the number of shares outstanding, their EPS would be around €27. With a stock price of €140, that gives us a 2027 P/E ratio of roughly 6.
If we imagine having a PE somewhere between 15-20 that means the stock will be somewhere between 400 and 540 or about 2 to 3 time current price.
As always, future looks always bright when you want it to, but that doesn’t necessarily mean that this will happens, small companies have to execute extremely well, but here even if they shit the bed and keep their actual margin of 10% this means 200M in profit and a 2027 price of somewhere between 185 and 250 or about 30-75% growth + dividend (very small so negligible) for me that’s a good margin of safety.
Conclusion: Let's Get This Party Started!
SES-imagotag is the ultimate party host for the digital age of retail. With their innovative technology, comprehensive solutions, and strong financial performance, they're helping retailers throw a party that customers can't resist. So grab your shopping cart, put on your dancing shoes, and get ready to experience the future of retail! 🎉