EQS Group

DB: EQS

Market Cap€294m

Last Close €29.3

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

EQS is in a strong position to build its client base as the EU whistleblowing directive comes into force across Europe. Delays in adoption of formal legislation are a frustration but do not detract from the strength of the underlying proposition. EQS retains its ambition to be the leading European cloud provider for global investor relations and corporate compliance solutions by 2025. The €45m raised in March will help fund the repayment of short-term bank and vendor loans during Q222. We see management’s targets of €130m of group revenues and EBITDA margins of at least 30% for FY25 as demanding but achievable.

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	711.2	56.0
2021A	50.2	1.7	(5.9)	(69.77)	N/A	N/A
2022E	70.0	7.5	0.0	(0.08)	N/A	60.8
2023E	90.0	18.0	10.6	68.47	42.8	25.5

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. The necessary legislation in the key German market is likely to be in Q322. We therefore expect the benefit to start to accrue more strongly through H222 and into FY23, as the experience in Denmark was of a last-minute surge of interest.

Last updated on 30/06/2022