Beta Systems

DB: BSS

€119.4m market cap

€22.6 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

While FY18 numbers dipped as management expected, revenue and EBITDA were in the top half of guidance. The results reflected weaker software licence renewals, which reduced revenues and slashed margins. FY18 cash generation was strong, with operating cash flow up nearly 60% at €8.3m and the maintenance book continued to grow with the help of acquisitions. 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%+ in FY18).

Sector
TMT
Share price graph
Price performance
%
1m
3m
12m
Actual 7.1 1.1 43.5
Relative* 6.4 (0.7) 26.6
52-week high/low €29.5/€15.6
*% 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