EQS Group

DB: EQS

€81.1m market cap

€56.5 last close

EQS Group is a leading international provider of regulatory technology (RegTech) in the fields of corporate compliance and investor relations. EQS enables its global client base to fulfil complex national and international disclosure obligations, minimizing risks and communicating transparently with stakeholders.

Investment summary

Management reiterated FY19 guidance at the half year, despite revenue growth at the interim stage being a little below its own expectations. H219 should provide better revenue and profit growth as new modules will stimulate growth and the internal investment reduces. Our underlying forecasts were unchanged, but we reduced revenue and EBITDA forecasts for FY19 and FY20 to take account of the ARIVA disposal. EQS continues to trade at a significant discount to its peers and the current share price is discounting growth well below management’s expectations.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 30.4 2.4 0.8 36.97 152.8 N/A
2018A 36.2 0.3 0.7 51.09 110.6 N/A
2019E 37.6 3.1 (0.6) (26.77) N/A N/A
2020E 39.9 4.6 0.8 35.78 157.9 N/A
Industry outlook

Gartner estimates the governance, risk and compliance segment at over US$5bn, growing at a CAGR of over 13%. 2019/20 should see a further raft of regulation on issues such as whistleblowing and increasing corporate transparency, following on from the benefits from regulation such as MiFID II. These all increase corporate administrative loads and carry heavy penalties for non-compliance, providing a positive backdrop for sales.

Last updated on 21/11/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 18.2
Forecast gearing ratio (%) 67
Price performance
%
1m
3m
12m
Actual (3.4) (14.4) (19.3)
Relative* (6.3) (23.1) (30.9)
52-week high/low €75.0/€55.5
*% relative to local index
Key management
Achim Weick CEO
André Marques CFO

Content on EQS Group