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Awardit: The gift that keeps on giving - ABG

Solutions that drive employee and customer retention
Impressive combination of organic growth and M&A
32% EBITA CAGR ’21e-’23e; 16.8x ’22e EV/EBITA

If you have ever redeemed SAS Eurobonus points for goods, or received a Christmas gift card from your employer, then you have likely been exposed to Awardit’s loyalty programme services: used by companies to increase retention of customers and employees. Happy customers tend to spend more; an Accenture study has shown that loyalty programmes can increase customer spending by 10-20%. Awardit has become the largest provider of loyalty solutions in the Nordics; globally, the market is expected to double in the next five years, according to market research firms. The company has gained market share in recent years by acquiring its biggest competitors, and used its scale to build a robust partner network that links clients’ loyalty programmes, creating switching costs. Although most of Awardit’s revenues are transaction-based, a small part comprises SaaS revenue paid by clients for access to the platform.

Using a DCF and a peer valuation we arrive at a fair value range of SEK 180-390 per share for Awardit. At the current price, the stock trades at 16.8x our ’22e EBITA. In our M&A scenario, Awardit can grow its EBITA by 27% annually from ’22e-’26e, which would give a ’26e valuation of 7x EV/EBITA.
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