EQS Group

DB: EQS

€103.3m market cap

€72 last close

EQS Group is a leading international technology provider for digital IR, corporate communications and compliance. Over 8,000 clients use its products and services to securely, efficiently and simultaneously fulfil complex national and international information obligations to the global investment community.

Investment summary

EQS is making progress on its journey to become a fully embedded provider of investor relations and compliance platforms and products to corporate customers. While conversion of sales leads has been slower than initially hoped, the group returned to EBITDA profitability in Q3 and is set to build a sustainable business model in markets driven by increasing regulation. FY19 guidance, revised with the Q3 figures, was for revenue growth of 10–15% pro-forma (down from 18–25%), taking €0.5m off EBITDA. The valuation is well below a DCF based on targeted growth.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2017A 30.4 2.4 0.8 36.97 194.8 N/A
2018A 36.2 0.3 0.7 51.09 140.9 N/A
2019E 35.2 2.6 (1.2) (50.61) N/A N/A
2020E 37.2 3.5 (0.3) (12.03) N/A N/A
Industry outlook

Gartner estimates the governance, risk and compliance segment at over US$5bn, growing at a CAGR of over 13%. 2020 should see a further raft of regulation, following on from the benefits from regulation such as MiFID II, with a major impetus from the implementation of the EU whistleblowing directive in December 2019. These regulations all increase corporate administrative loads and carry heavy penalties for non-compliance, providing a positive backdrop for sales.

Last updated on 12/02/2020
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 15.4
Forecast gearing ratio (%) 53
Price performance
%
1m
3m
12m
Actual 9.1 23.1 2.9
Relative* 7.0 18.9 (16.8)
52-week high/low €75.0/€55.5
*% relative to local index
Key management
Achim Weick CEO
André Marques CFO

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