London, UK, 15 October 2020

Claranova (CLA): On track for strong earnings growth

Claranova reported strong organic revenue growth in FY20 while the EBITDA margin reflected the immediate strategic priorities of PlanetArt and Avanquest. The recent acquisition of CafePress is part of PlanetArt's evolution to become a provider of personalised e-commerce and we have revised our forecasts to incorporate the deal. We note the group's strong cash position which provides funding for future internal and external investment.

Reflecting the different business models and minority interests for each division, we continue to use a sum-of-the-parts approach to valuation. Based purely on peer group averages per division, we calculate a fair value of €15.33 per share. However, once multiples are adjusted to reflect our views on the growth and profitability of each division, we calculate what we believe to be a more realistic valuation of €12.12 per share (up from €11.52). Factors that could provide upside to our estimates would be sustained high demand for photo printing, successful adoption of the FreePrints Gift app in the US and returning recent acquisitions to profitability.  

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