earnings report - 7 mile advisors · 2021. 4. 26. · 9.7%, crm consumer experience decreased...
TRANSCRIPT
7 Mile Advisors
Earnings Report
April 2021
1
Digital Consumer
Overview
7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally.
PUBLIC BASKET PERFORMANCE
• Summary valuation metrics for a basket of comparable public companies.
VALUATION COMPARISON
• Graphical, detailed comparison of valuation multiples for the public basket.
RECENT DEALS
• The most recently announced deals in the sector
We advise on M&A and private capital transactions and provide market assessments and benchmarking. As a close-knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets.
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EARNINGS SYNOPSIS
• Detailed summary of each organization’s most recent quarterly filing.
Public Basket
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Company TEV $mLTM EBITDA
$m LTM Rev $m Rev Growth YoY GP % EBITDA % TEV / Rev XTEV / EBITDA
X # FTEs Rev / FTE $k
Adobe Systems 208,186 5,719 12,868 15.2% 86.6% 44.4% 16.2x 36.4x 22,516 572
Salesforce.com 188,838 4,960 20,286 28.0% 74.5% 24.5% 9.3x 38.1x 49,000 414
Omnicom Group 18,441 2,043 13,171 -11.9% 16.6% 15.5% 1.4x 9.0x 64,100 205
Daktronics 228 27 491 -19.5% 24.8% 5.6% 0.5x 8.3x 2,671 184
Average 103,923 3,187 11,704 2.9% 50.6% 22.5% 6.8x 23.0x 34,572 344
Median 103,640 3,502 13,020 1.6% 49.6% 20.0% 5.4x 22.7x 35,758 310
Public Basket
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Adobe provides content creation, document management, and digital marketing and advertising software and services to creative professionals and marketers for creating, managing, delivering,
The company operates with three segments: digital media content creation, digital experience for marketing solutions, and publishing for legacy products (less than 5% of revenue).
Adobe Systems
Adobe Systems
Public Basket
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Adobe Systems
Company Name Date Deal Synopsis
Workfront 07-Dec-20 The company was acquired by Adobe Systems (NAS: ADBE) for $1.5 billion on December 7, 2020.
Facebook (Oculus Medium) 09-Dec-19Oculus' virtual reality sculpting tool was acquired by Adobe for an undisclosed amount on December 09,2019. The acquisition will enable Facebook to accelerate 3D & immersive offerings.
Adobe – Q1 2021
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Adobe reported FY 1Q21 revenues of $3.9b, up 26% year-over-year.
Adobe vs. S&P 500
Revenue by Segment (m)
The Numbers. Adobe achieved record quarterly revenue of $3.91billion in its first quarter of fiscal year 2021, which represents 26percent year-over-year growth.
Digital Media segment revenue was $2.86 billion, which represents32 percent year-over-year growth. Creative revenue grew to$2.38 billion, representing 31 percent year-over-year growth.Document Cloud revenue was $480 million, representing 37percent year-over-year growth.
Adobe’s first quarter fiscal 2021 results benefited from an extraweek in the quarter due to fiscal 2021 being a 53-week year andfiscal 2020 being a 52-week year.
Revenue by Geography (m)Ticker NAS: ADBEName Adobe Systems52 Week Range $579.42 - $1073.76 Market Cap (m) $214,673 Enterprise Value (m) $227,037
Historical Financials (m) 2018FY 2019FY 2020FYRevenue $9,030 $11,171 $12,868 EBITDA (Adjusted) $3,601 $4,615 $5,719 EV $119,398 $150,323 $228,993 Multiples 2018FY 2019FY 2020FYEV/Revenue 13.2x 13.5x 17.8x EV/EBITDA 33.2x 32.6x 40.0x
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NAS: ADBE S&P: SPX
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Salesforce.com provides enterprise cloud computing solutions, including Sales Cloud, the company's main customer relationship management software-as-a-service product.
Salesforce.com also offers Service Cloud for customer support, Marketing Cloud for digital marketing campaigns, Commerce Cloud as an e-commerce engine, the Salesforce Platform, which allows enterprises to build applications, and other solutions, such as MuleSoft for data integration.
Salesforce.com
Salesforce.com
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Salesforce.com
Company Name Date Deal Synopsis
Acumen Solutions 01-Feb-21The company was acquired by Salesforce (NYS: CRM) for an undisclosed amount on February 1, 2021. The acquisition will enable Salesforce Professional Services to help industry customers get closer to their clients and constituents through the Customer 360 Platform.
Slack 01-Dec-20The company reached a definitive agreement to be acquired by Salesforce (NYS: CRM) for an estimated $27.7 billion on December 1, 2020. Under the terms of the agreement, the company's shareholders will receive $26.79 in cash and 0.0776 shares of Salesforce common stock for each of the company's shares.
Salesforce – Q4 2021
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Salesforce reported FY 4Q21 revenues of $5.8b, up 20% year-over-year.
Salesforce vs. S&P 500
Revenue by Segment (m)
The Numbers. Total fourth quarter revenue was $5.82 billion, anincrease of 20% year-over-year, and 19% in constant currency.Subscription and support revenues for the quarter were $5.48billion, an increase of 20% year-over-year. Professional servicesand other revenues for the quarter were $0.34 billion, an increaseof 18% year-over-year.
Total fiscal 2021 revenue was $21.25 billion, up 24% year-over-year, and 24% in constant currency. Subscription and supportrevenues for the year were $19.98 billion, up 25% year-over-year.Professional services and other revenues for the year were $1.28billion, up 21% year-over-year.
Ticker NYS: CRMName Salesforce.com52 Week Range $461.16 - $1138 Market Cap (m) $195,509 Enterprise Value (m) $200,963
Historical Financials (m) 2019FY 2020FY 2021FYRevenue $13,282 $17,098 $21,252 EBITDA (Adj.) $2,706 $4,365 $5,407 EV $117,198 $161,274 $203,352 Multiples 2019FY 2020FY 2021FYEV/Revenue 8.8x 9.4x 9.6x EV/EBITDA 43.3x 36.9x 37.6x
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NYS: CRM S&P: SPX
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Omnicom is the world's second- largest ad holding company, based on annual revenue.
The American firm's services, which include traditional and digital advertising and public relations, are provided worldwide, with over 85% of its revenue coming from more developed regions such as North America and Europe.
Omnicom Group
Omnicom Group
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Omnicom Group
Company Name Date Deal Synopsis
Smart Digital 26-Sep-19The company was acquired by Omnicom Group (NYS: OMC), through its subsidiary Omnicom Precision Marketing Group, for an undisclosed amount on September 26, 2019. The acquisition will enable Omnicom Group (NYS: OMC) to be better at delivering powerful end-to-end customer experience solutions by the strengthening of their AI and personalization capabilities.
Credera 02-Aug-18The company was acquired by Omnicom Group (NYS: OMC) for an undisclosed amount on August 2, 2018. The acquisition will enable Omnicom Group to strengthen its management and IT consulting capabilities.
Omnicom – Q4 2020
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Omnicom reported 4Q20 revenues of $3.8b, down 9.3% year-over-year.
Omnicom vs. S&P 500
Revenue by Geography (m)
Revenue by Segment (m)
The Numbers. Primarily due to the negative effects on ourrevenue attributable to the COVID-19 pandemic, Omnicom’sworldwide revenue in the fourth quarter of 2020 decreased 9.3%to $3,757 million from $4,141 million in the fourth quarter of2019.
Industry Performance. Organic growth in the fourth quarter of2020 as compared to the fourth quarter of 2019 in Omnicom’s fivefundamental disciplines was as follows: Advertising decreased9.7%, CRM Consumer Experience decreased 15.8%, CRMExecution & Support decreased 13.7%, Public Relations increased0.2% and Healthcare decreased 2.0%.
Regional Markets. Across all regional markets, organic growth wasnegative in the fourth quarter of 2020 as compared to the fourthquarter of 2019. The decreases were as follows: the United States9.4%, Other North America 3.2%, the United Kingdom 12.4%,the Euro Markets & Other Europe 9.2%, Asia Pacific 3.9%, LatinAmerica 9.2% and the Middle East & Africa 36.8%.
Ticker NYS: OMCName Omnicom Group52 Week Range $89 - $144.131 Market Cap (m) $15,404 Enterprise Value (m) $22,325
Historical Financials (m) 2018FY 2019FY 2020FYRevenue $15,290 $14,954 $13,171 EBITDA (Adj.) $2,371 $2,358 $2,043 EV $19,969 $22,337 $17,757 Multiples 2018FY 2019FY 2020FYEV/Revenue 1.3x 1.5x 1.3x EV/EBITDA 8.4x 9.5x 8.7x
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Daktronics
Daktronics
Daktronics Inc designs and manufactures electronic scoreboards, programmable display systems, and large screen video displays for sporting, commercial and transportation applications.
It is engaged in a full range of activities: marketing and sales, engineering and product design and development, manufacturing, technical contracting, professional services, and customer service and support. The company offers a complete line of products, from small scoreboards and electronic displays to large multimillion-dollar video display systems as well as related control, timing, and sound systems.
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Daktronics
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Company Name Date Deal Synopsis
X Display Company 02-Jun-20 The company raised $22.10 million of funding from Daktronics and other undisclosed investors on June 2, 2020.
AJT Systems 21-Jun-18The company was acquired by Daktronics (NASDAQ: DAKT) on June 21, 2018 for an undisclosed sum. The acquisition allows Daktronics to expand its offerings for sport and interactive applications.
ADFLOW Health Networks 15-Mar-16 The company was acquired by Daktronics for an undisclosed amount on March 15, 2016.
Daktronics – Q3 2021
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Daktronics reported FY 3Q21 revenues of $94.1m, down 26% year-over-year.
Daktronics vs. S&P 500
Revenue by Geography (000s)
Revenue by Industry (000s)
The Numbers. Daktronics reported fiscal 2021 third quarter netsales of $94.1 million, operating loss of $0.2 million, net loss of$0.2 million, and earnings per diluted share of $0.00. Thiscompares to net sales of $127.7 million, operating loss of $9.2million, net loss of $12.7 million, and $0.28 per diluted share, forthe third quarter of fiscal 2020.
Looking Ahead. Reece Kurtenbach, chairman, president and chiefexecutive officer, stated, "Our backlog going into the fourth quarteris strong and we believe the audiovisual industry fundamentals willdrive long-term growth for our business. However, the near-termoutlook shows areas of contraction and greater volatility. We arefocused on promoting our value to new and core markets, whilemanaging our cost structure to meet the uncertain demand. Withthe COVID-19 vaccine distribution underway, we remain focusedon emerging as a stronger organization and to be positioned tocapitalize on the recovery from this pandemic."
Ticker NAS: DAKTName Daktronics52 Week Range $7.38 - $11.68 Market Cap (m) $259 Enterprise Value (m) $268 Historical Financials (m) 2018FY 2019FY 2020FYRevenue $611 $570 $609 EBITDA (Adj.) $28 $12 $17 EV $328 $270 $162 Multiples 2018FY 2019FY 2020FYEV/Revenue 0.5x 0.5x 0.3x EV/EBITDA 11.5x 21.8x 9.5x
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Contact Info7MA provides Investment Banking & Advisory Services to the Business Services and Technology Industries globally. We advise on M&A and private capital transactions and provide market assessments and benchmarking.
As a close-knit team with a long history together and a laser focus on our target markets, we help our clients sell their companies, raise capital, grow through acquisitions, and evaluate new markets. Securities offered through 7M Securities LLC.
Leroy Davis, Partner 704.899.5962 [email protected]
Tripp Davis, Partner 704.899.5762 [email protected]
Andy Johnston, Partner 704.899.5961 [email protected]
John Cooper, Managing Director 704.973.3996 [email protected]
Mark Landry, Managing Director 561.972.0609 [email protected]
Tim Frye, Senior Director 704.973.3994 [email protected]
Kristina Sergueeva, Director 704.899.5149 [email protected]
Ben Garber, Vice President 412.626.7898 [email protected]
Garth Martin, Vice President 704.973.3997 [email protected]
Nicholas Prendergast, Vice President 704.973.3995 [email protected]
Ariail Barker, Director, Sales & Marketing 704.981.2908 [email protected]
Ben Bruggeworth, VP, Business Development 704.365.8859 [email protected]
Steve Sypek, VP, Business Development 704.414.8736 [email protected]
Emily Halstenberg, Marketing & Sales Manager 704.409.9912 [email protected]
Alexis Papa, Marketing & Sales Coordinator 704.414.8732 [email protected]
Marty Johnson, Senior Associate 704.973.3999 [email protected]
Sydney Scadden, Senior Associate 704.973.3998 [email protected]
Steve Buffington, Associate 704.960.1828 [email protected]
Ilia Ulianchuk, Senior Analyst 704.414.8743 [email protected]
Nic Anderle, Analyst 704.826.7492 [email protected]
Robin Siegel, Analyst 704.285.8173 [email protected]
Conor Smith, Analyst 704.855.2134 [email protected]
Sawyer Willingham, Analyst 704.285.8171 [email protected]