Carnegie Investment Bank
Zwipe
Date Title Alternative
2024-01-16 Change of strategic direction Show Close
Research | 16 Jan 2024 | Zwipe

Change of strategic direction

 

Greater focus on access reduces the risk

Zwipe announced today its change of strategic direction, with focus now on Access. The access market took off in 2023, partly because biometric access cards help companies to be compliant with the EU’s NIS2 directive. The breakthrough for biometric payment cards will, however, take some time. Zwipe has more than 60 pilot projects in the market in Access. Among those testing solutions are one of the three largest cloud providers in the world, Berkshire Hathaway Energy Group, Prosegur in Brazil, and a number of government entities, airports, data centres, and critical infrastructure operators.

Targeting profitability from H2 2025

As a consequence of this change in strategic direction, Zwipe is initiating a cost-savings programme focused in particular on Zwipe Pay. Together with the savings announced in June 2023, the company expects to save NOK 40m in 2024, compared with NOK 117m LTM in H1(23). The cost programme will reach its full effect from mid-Q2(24). It will expand the Access team somewhat, while trimming the number of employees in Pay, allowing Zwipe to accelerate the commercialisation of Access. It believes the recently completed rights issue will be sufficient to take the company to profitability.

 

Valuing Access at NOK 340m

Given biometric penetration of 15%, a market share of some 15%, P/S of 1.5x, and a discount rate of 15%, plus a 40% likelihood that the technology is commercially successful, we value Access at around NOK 340m, versus the company’s market cap of NOK 55m. The company hosts a conference call today at 15:00 and will release its H2(23) results on 22 February. We have not adjusted our numbers for the recent rights issue.

 

Download (EN)
2023-11-10 Rights issue to ensure financing until year-end 2024 Show Close
2023-11-08 Demand for Access remains high Show Close
2023-07-06 Ready for take-off Show Close

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