Beta Systems

DB: BSS

€121.5m market cap

€23 last close

Beta Systems provides data centre intelligence (DCI) solutions which enable efficient and secure bulk processing of data and Identity Access Management solutions (IAM). The company’s headquarters are in Berlin and has sales and support offices in 18 markets globally. Approximately 68% of sales are derived in the DACH region.

Investment summary

Beta Systems has been performing well, largely due to a strong performance from its core DCI mainframe software business. Consequently, in April, management upgraded FY19 guidance (revenue was upgraded by 4% and EBITDA by 27% at the mid-points) ahead of the interim results. While there has been a surprisingly strong level of orders in the group’s core DCI business in Germany, the IAM business has been performing in line. In our view, the shares are attractive, noting the potential sub 6x FY20 EV/EBITDA ratio, given the strong cash generation and high level of recurring revenues (we estimate 80%+).

Sector
TMT
Share price graph
Price performance
%
1m
3m
12m
Actual 9.5 6.5 8.5
Relative* 2.2 6.0 6.5
52-week high/low €23.4/€17.0
*% relative to local index
Key management
Armin Steiner Member of the Board
Dr. Andreas Huth Member of the Board
Wilhelm K.T. Zours Head of the Supervisory Board