EQS Group

DB: EQS

Market Cap€325m

Last Close €38.4

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 has built a strong platform business in corporate compliance and investor relations, with growing recurring revenues. It is well positioned to capitalise on the time-limited expansion opportunity presented by the European Whistleblowing Directive, which has an implementation deadline of December 2021. Achieving a strong foothold here will be key for driving greater SaaS customer acquisition, underpinning management’s ambitious medium-term revenue and margin guidance.

Y/E Dec	Revenue (€m)	EBITDA (€m)	PBT (€m)	EPS (fd) (c)	P/E (x)	P/CF (x)
2019A	35.4	2.6	(0.3)	(7.41)	N/A	115.5
2020A	37.6	4.8	0.4	4.12	932.0	47.8
2021E	49.4	2.8	(2.7)	(21.24)	N/A	174.4
2022E	70.0	7.5	1.0	7.67	500.7	75.0

Industry outlook

While this EU whistleblowing regulation is now active, the deadline for implementation in national laws is two years, which will be in December 2021. We would therefore expect the benefit to be heavily skewed to H221 and into H122, amplified further by the Business Keeper acquisition, while the additional sales cost will be in place for most of H121.The pandemic has provided fertile territory for selling online communications solutions, and we would expect a proportion off this to be retained once physical meetings resume in greater numbers.

Last updated on 20/10/2021