EQS Group

SCALE: EQS

Market Cap€247m

Last Close €24.6

EQS is a leading international provider of regulatory technology in the fields of corporate compliance and investor relations. Its products enable corporate clients to fulfil complex national and international disclosure obligations, minimise risks and communicate transparently with stakeholders.

Investment summary

Progress of whistleblowing legislation through the German Bundestag has been slower than hoped, with transposition now likely in December, with a three-month implementation period. This delay means that management is now guiding to FY22e revenue growth of 25%, with EBITDA of €6.0m (was €6–10m). The EBITDA figure is in line with our forecast, despite the lower revenue (€3.2m below) reflecting a degree of flexibility on costs. The underlying boost from legislation coming into force across Europe remains a strong positive from FY23. EQS reported 9M22 revenue growth of 27% (10% organic), with 702 new SaaS customers signed up, including 555 for whistleblowing.

Y/E Dec	Revenue (€m)	EBITDA (€m)	PBT (€m)	EPS (fd) (c)	P/E (x)	P/CF (x)
2020A	37.6	4.8	0.4	4.12	597.1	47.0
2021A	50.2	1.7	(5.9)	(69.77)	N/A	N/A
2022E	62.8	6.0	(4.3)	(29.68)	N/A	80.0
2023E	86.5	17.5	7.6	51.08	48.2	22.1

Industry outlook

While EU whistleblowing regulation is now active, the December 2021 deadline for implementation in national laws was not met by most member states. 10 out of the 27 member states have now having implemented, with Germany set to follow very soon. The experience in Denmark, the first country to implement the law, was of a last-minute surge of interest. Further down the line, the German law will be extended to companies and organisations with fewer employees.

Last updated on 30/11/2022