A detection system that keeps cows apart, or with which you can see where you can still park in the city centre. But also a platform that helps retailers to match stocks with sales, and with which you can disinfect drinking water with ultraviolet lamps. They are all inventions from Nedap, a technology company with its head office in Gelderse Groenlo.
If there is a common denominator at Nedap (207 million euros in turnover, 800 employees), it might be RFID, in full radio frequency identification. This is a technique with which data is stored on tiny chips, which can be read remotely via radio waves. Ideal for a variety of things such as access passes, vehicle identification, regulating traffic flows or preventing theft. Nedap technology can be found in the Netherlands, but also in Germany, Spain, China and North America.
At Nedap, founded in 1929 as the Nederlandsche Apparatenfabriek and listed on the Amsterdam stock exchange since 1947, they want to make life a little easier for their customers. That does not always go well, by the way – take the voting computers that were abolished in 2008 by cabinet decision – but the company has distinguished itself over the years mainly with stable turnover and a steadily rising share price.
All these specific solutions for numerous niches, “that is the story of Nedap”, says Daan Arends of Kepler Cheuvreux, one of the two analysts who monitors the Nedap share. Four major product groups can nevertheless be recognized in this jumble of applications: livestock management, care, retail and safety. “A wide, but handsome model. As a result, it is often difficult for the outsider to understand where the added value really lies.”
Because there is certainly added value. Nedap’s share price is higher than ever. Last year it achieved 9 percent turnover growth, with a net profit of 18.3 million euros – compared to 13.8 million euros in 2020. A great performance, given the shortages of chips and other components, which, according to CEO Ruben Wegman, also means all market groups” suffers from delayed delivery and higher cost prices. Nevertheless, he is counting on growth this year, he said in February when the annual figures were announced. For employees there was a bonus of several thousand euros in shares.
With all those glittering numbers you would expect Nedap to be popular with investors, but that is disappointing. “They owe this high price to a long period of stable turnover growth with high margins,” says Arends. “But for larger investors, Nedap is too small to put in a lot of work and learn to understand all the propositions. They are relatively small and complex. I think it’s a fund for enthusiasts.”
This is also apparent from the limited trading in the share. Nedap is included in the Amsterdam Small cap Index (AScX). On that list of 25 smaller funds, it dangles at the bottom when it comes to active trading.
“Every day, between one thousand and two thousand Nedap shares are traded, out of a total of 6.7 million,” says Corné van Zeijl, stock market analyst at asset manager Actiam. He calls the small cap index a “special, but nice mix” of predominantly Dutch companies, but so small that there are no trackers on it.
“This is really one of those shares that lives in the Groenlo area,” says Van Zeijl. “A few renowned Dutch long-term investors each have a 10 to 15 percent share in Nedap. If you take that off, there isn’t much left. Although a small private individual can already set the course in motion.”
On Thursday, Nedap will announce the first quarter figures.
A version of this article also appeared in NRC on the morning of April 4, 2022
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