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    CIRC   IT0005344996

CIRCLE S.P.A.

(CIRC)
  Report
Delayed Quote. Delayed Borsa Italiana - 12/08 11:35:10 am
3.82 EUR   +1.06%
11/042021 11 04 Integrae Finance Gala Milano Investor Presentation
PU
11/042021_11_05_CIRCLE : Connecting EU insights is back
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10/26CIRCLE GROUP : the first 3 years on the stock exchange
PU
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SummaryMost relevantAll NewsOther languagesPress ReleasesOfficial PublicationsSector news

Circle S p A : EQUITY RESEARCH 05/02/2019 ELABORATA DA INTEGRAE SIM

10/15/2021 | 12:02pm EST

Production date: February 5, 2019 - h 18.30

CIRCLE

Italy

Rating: BUY

Target Price: € 4,10

Stock performance

1M

3M

6M

1Y

absolute

14,00%

7,60%

1,07%

N/A

to FTSE AIM Italia

-6,97%

22,23%

36,44%

N/A

to FTSE STAR Italia

-6,97%

17,75%

25,53%

N/A

to FTSE All-Share

-7,18%

18,86%

26,26%

N/A

to EUROSTOXX

-8,40%

18,29%

29,68%

N/A

to MSCI World Index

-8,84%

16,83%

29,77%

N/A

FTSE AIM Italia

Engineering

Initiation of Coverage

Risk: Medium

Stocks performance relative to FTSE AIM Italia

Stock Data Price Target price Upside/(Downside) potential Bloomberg Code Market Cap (€m) EV (€m) Free Float Share Outstanding 52-week high 52-week low Average daily volumes (1m)

€ 3,25 € 4,10 26% CIRC IM EQUITY € 10,90 € 10,60 20,24% 3.154.650 € 3,60 € 2,35 5.953

Company overview Established in 2012 with a Management Buy Out operation, Circle is a management consulting company operating in the port and intermodal logistics sector, specializing in business process reengineering, and the development of solutions for automation and digitalization of the Supply Chain. Circle is based in Rozzano (MI) and has 45 employees, making use of two proprietary software: Milos, that allows the optimization of the processes in port field, and Sinfomar, that allows to connect in a single technological platform all the actors of the port community guaranteeing the interoperability between all the different systems of ICT.

Key Financials (€m )

FY17A

FY18E

FY19E

FY20E

Sales

4,9

5,6

6,6

7,5

EBITDA

1,3

1,5

1,9

2,3

EBIT

1,0

1,2

1,5

1,9

Net Profit

0,8

0,8

1,1

1,3

EPS (€)

0,25

0,26

0,35

0,43

EBITDA margin

26,5%

26,3%

28,3%

30,2%

EBIT margin

21,2%

20,7%

23,0%

24,9%

Main Ratios

FY17A

FY18E

FY19E

FY20E

EV/EBITDA (x)

8,2

7,1

5,7

4,7

EV/EBIT (x)

10,2

9,1

7,0

5,7

P/E (x)

13,6

12,7

9,7

7,9

Alessio Rocchi

Mattia Petracca

+39 02 87208 786

+39 02 87208 765

alessio.rocchi@integraesim.it

mattia.petracca@integraesim.it

Market

Circle's business is related to the digitization of the Supply Chain and

is

essentially linked

to

the

trend

of

two sectors: the

technological/digital and infrastructure sectors. Both are expected to

grow worldwide in the coming years. In Italy, the digital market grew

by 2.6% in 2018 and 3.0% in 2019. We also consider the impact that

the digitization of the supply chain will have on the logistics and

services sector, especially if connected by blockchain technology.

Compared to the main competitors, Circle is able to operate in all

sectors of the industry.

Valuation Update

We have based our valuation estimates on the multiples method and

the DCF. Regarding the multiples

valuation method, a group of

companies operating in the same sector as Circle was used, but with

greater market capitalization; for this reason,

a 25% Market Cap

discount was applied. The equity value resulting from this method is

equal to approximately € 12 million. The equity value resulting from

the DCF evaluation method is equal

to € 13.6 million. The average

between the two methods returns a value of € 12.8 million, for a target

price of € 4.1 per share, BUY rating and MEDIUM risk unchanged.

1

Summary

1.

Company overview ....................................................................................................................................

3

1.1

Business activities..............................................................................................................................

3

1.2

The shareholders ...............................................................................................................................

3

1.3

The business lines..............................................................................................................................

4

1.4

The value chain..................................................................................................................................

5

2.

The market.................................................................................................................................................

6

2.1

The digital sector ...............................................................................................................................

6

2.2

The Italian digital market...................................................................................................................

9

2.3

The supply chain..............................................................................................................................

11

2.4

The infrastructure sector.................................................................................................................

13

2.5

Competitive positioning ..................................................................................................................

15

3.

Economics & Financials ...........................................................................................................................

17

3.1

2018E ...............................................................................................................................................

18

3.2

Estimates for 2018-2022E ...............................................................................................................

18

4.

The valuation ...........................................................................................................................................

20

4.1

The models adopted........................................................................................................................

20

4.2

The DCF model.................................................................................................................................

20

4.3

Multiples..........................................................................................................................................

22

2

1. Company overview

1.1 Business activities

Established in 2012 with a Management Buy Out operation, Circle is a management consulting company operating in the port and intermodal logistics sector, specializing in business process reengineering the development of solutions for automation and digitalization of the Supply Chain. Circle is based in Rozzano (Milan) and has 45 employees (23 of them of Info.era).

Fig. 1 - Historical evolution

Source: Circle

1.2 The shareholders

In 2018 Circle changed its legal form, becoming a joint stock company. It is 66.48% controlled by the company Innotech Srl, owned (100%) by Luca Abatello, founder of the company and president of Info.era. The remaining shares are owned by Alcaela Srl for 3.50%, LigurCapital SpA for 4.89%, CapitalImpresa SpA for 4.89% while 20.24% owned by the market.

The company controls 51% of Info.era, mainly specialized in IT solutions for companies and institutional bodies, present on the market for more than 20 years, with a focus on the maritime and transport sector in general, with the aim of consolidating and expanding skills and technological solutions.

3

Fig. 2 - The structure of the group

Source: Circle

1.3 The business lines

Circle operates through three revenue lines:

  • Innovative & Smart Supply chain. Consultancy services and software solutions to optimize flow management in the port, transport and logistics sectors;
  • Connecting EU, or support to public actors and private companies in the implementation of projects and in obtaining funds through consultancy on European financing systems;
  • Specialized digital multichannel marketing, which provides the service of analysis, definition, and use of digital communication tools.

The Company, operating in the "digital supply chain" market, uses the following proprietary software:

  • Milos®. The solution that allows the optimization of processes in the port, interport and intermodal transport sectors (i.e., it allows port and interport terminals, multimodal transport companies, companies in their logistics and customs management to accelerate their processes and procedures, reduce transit times, improve the visibility and traceability of goods along the entire transport chain). The software is structured in 4 basic modules:
    1. Terminal automation, consisting of a set of solutions for the automation and optimization of terminal operations;
    2. Intermodal corridor management, solutions developed to make interoperable the information systems of all actors involved in intermodal logistics processes;
    3. Custom management, which are essentially a set of solutions to digitize and automate customs procedures;
    4. Port & Terminal connections, consisting of two systems developed by Circle (Port Community System - PCS) and Terminal Operating System (TOS) for the connection between IT systems (PCS; TOS; Rail System, MTO System, Freight etc.).
  • Sinfomar®. It is the software that allows to connect, in a single technological platform, all the actors of the port community of a port, guaranteeing the interoperability between the different ICT systems used by the single stakeholders to digitalize and to optimize all the relative operations to the management of the port processes. Sinfomar is a software owned by the company Info.era, of which Circle acquired 51% in November 2017. Sinfomar consists essentially of 6 modules:
    1. Vessels, which deals with the management and travel documentation of ships arriving, transiting, and departing;
    2. Goods, which concerns the management of goods entering and leaving ships, trains and trucks;

4

  1. Trains, which allows the tracking of containers, goods and vehicles arriving and departing through ports data trains;
  2. Control and tracking of vehicles involved in intermodal transport;
  3. People. It focuses on classifying employees by category using precise credentials;
  4. Free zones, i.e., the integrated and unified management of the practices that concern the processes and activities related to the free zone.

1.4 The value chain

The Circle value chain involves essentially 3 different phases:

Examination of opportunities. It starts from the definition of the objectives (from the idea to the draft project). To do this, the partners are first sought and then coordinated on the different territorial technical tables. We continue with the identification of the EU project of co-financing and monitoring of opportunities, up to the actual development of the proposal after verification of actual feasibility;

Evaluation of project drafts. The design evaluation is carried out for the projects which have successfully passed the examination of the appropriateness. The activity which is prior to the official submission of the project proposal;

Presentation and management of the project, which concerns the life of the entire project. The presentation of the project proposal is followed by the Negotiation with the Project Management Authority. The model is created and pretested. We then proceed to the kick-off meeting in the presence of all partners. The launch is followed by the management of the project, especially with a view to financial sustainability.

Fig. 3 - The value chain

Source: Circle

5

Disclaimer

Circle S.p.A. published this content on 14 October 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 October 2021 16:01:05 UTC.


© Publicnow 2021
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Financials
Sales 2021 8,50 M 9,62 M 9,62 M
Net income 2021 0,50 M 0,57 M 0,57 M
Net cash 2021 1,00 M 1,13 M 1,13 M
P/E ratio 2021 31,8x
Yield 2021 -
Capitalization 15,3 M 17,4 M 17,3 M
EV / Sales 2021 1,68x
EV / Sales 2022 1,29x
Nbr of Employees 67
Free-Float 33,8%
Chart CIRCLE S.P.A.
Duration : Period :
Circle S.p.A. Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends CIRCLE S.P.A.
Short TermMid-TermLong Term
TrendsNeutralNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 0
Last Close Price 3,82 €
Average target price 5,23 €
Spread / Average Target 36,9%
EPS Revisions
Managers and Directors
Luca Abatello Chairman & Chief Executive Officer
Francesca Martino Head-Administration, Procurement & General Affairs
Giorgio Finadri Independent Director
Alexio Picco Director, Director-Funding & Business Development
Nicoletta Garzoni Manager-Investor Relations & Media
Sector and Competitors