Florian Schuhbauer presented his in-depth investment thesis on PSI (Germany: PSAN) at European Investing Summit 2014.
PSI: Provides control system software to optimize energy efficiency, work efficiency and materials efficiency for energy utilities and industry customers. PSI had a major profit warning in 2013 and reduced guidance for the next years. It is in the midst of a transformation of the model – switch from writing of code for customers to creating software that can be customized –offers margin upside from 6% to 15%+ EBIT margin long-term (R&D costs are expensed and 11% of sales). Entry barriers due to complexity of covered processes (15,000 man years of development) and integrated customer base with high switching costs. Attractive market position: metals/steel (global #1), gas/oil and electrical energy (regional #1), other segments (# 4/5 regional player). PSI benefits from structural trends: 1) automation and optimization of energy, labor and value-chain efficiency; 2) investments into the German grid; 3) increasing complexity of electricity networks due to renewable energy. Good CEO who shares the vision for the company. High strategic value for potential buyers.
About the instructor:
Florian has a strong track record of value creation in public companies. Before starting Active Ownership Fund in 2014, Florian was Partner at Triton Partners since 2010. Previously, Florian held top investment management and business operational positions at AVI/General Capital Group (Partner/Portfolio Manager), Deutsche Post World Net & DHL Global Mail (CFO & Executive VP), Newtron AG (Director Corporate Finance & Investor Relations) and Dresdner Bank / Dresdner Kleinwort Benson. At Active Ownership Fund, Florian is focused on making significant minority investments in a limited number of undervalued small and midcap companies in Northern Europe in order to increase their value through operational, strategic and governance improvements.
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