We modify our FY projections for the Company for current year and beyond incorporating – inter alia – actual 4Q22 results. The main change affecting the forecasts net level regards the Company’s eligibility to use the IP BOX tax relief. We would like to remind that the Company’s 4Q22 reported profits are burdened by the (non-cash) valuation of the share-based motivation program costs (which reached PLN -0,6 million in 4Q22 and their estimates for 2023 and (possibly) onwards have not been revealed and are not incorporated in our forecasts, but this doesn’t affect our valuation based on adjusted profits (leaving aside non-cash costs related to the motivation program valuation.
Our 12M EFV for Brand24 constituting a 90%- 10% mix of the outcomes of DCF and peer-relative valuation approaches (the weights stay intact) stands at PLN 37.2 per share (previously PLN 31.6 per share). The positive impact on our valuation comes from (ceteris paribus) (i) the valuation horizon forward shift, (i) increase (vs our previous 12M EFV from the start of December last year) of the multiples median of future profits for peer SaaS companies, (iii) decline of ytm of 10Y Polish government bonds (constituting a risk-free rate proxy for the definite forecast period i.e. for the next decade), and (iv) right to use the IP BOX tax relief (the effective tax rate at c. 7%; we incorporate this assumption for the definite forecast period, not for the residual period).
