EQS Group

DB: EQS

Market Cap€352m

Last Close €41.6

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

EQS Group’s H121 results were strong, showing robust increases in revenue and its customer base. Following its acquisition of Business Keeper in Q321, EQS is now well positioned to capitalise on the time-limited opportunity presented by the European Whistleblowing Directive. Achieving a strong foothold here will be key for driving SaaS customer acquisition, underpinning management’s ambitious short- and medium- term guidance. Higher SaaS-based revenues have helped lift recurring revenues, which accounted for 83% of total H121 revenues (H120: 79%).

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	125.1
2020A	37.6	4.8	0.4	4.12	1009.7	51.8
2021E	49.4	2.8	(2.7)	(21.24)	N/A	188.9
2022E	70.0	7.5	1.0	7.67	542.4	81.2

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 21/09/2021