Expert System

MI: EXSY

€119.4m market cap

€2.99 last close

Expert System has developed and patented technology that extracts useful information from unstructured text using semantic-based techniques and applies it to verticals such as enterprise search, customer experience management and big data analytics.

Investment summary

In April, Expert System placed 3.89m shares at €1.80 per share with ERGO S.r.l (a group of private investors), raising gross proceeds of €7m which will be used to accelerate the growth of sales in the medium term. We revised our forecasts to reflect this: normalised EPS reduced by 7.0% in FY19 and 9.8% in FY20 and we cut our net debt forecasts from €11.9m to €4.9m by the end of FY19e and from €9.3m to €2.3m by the end of FY20e. In August Expert issued a seven-year €5m mini-bond paying Euribor+2.25%.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 27.8 1.7 (5.4) (18.3) N/A N/A
2018A 30.5 4.6 (0.6) (1.4) N/A 41.4
2019E 34.8 7.6 1.3 3.0 99.7 16.5
2020E 38.9 9.8 3.1 7.1 42.1 13.3
Last updated on 13/09/2019
Industry outlook

Ever-increasing amounts of data are being produced, 80% of which are estimated to be unstructured. The need to derive useful insights from this growing body of data is driving the demand for cognitive computing and smarter artificial intelligence solutions, such as those offered by Expert System. Allied Market Research estimates that the global text analytics market could be worth as much as US$6.5bn by 2020, growing at a CAGR of 25.2% from 2014, with North America expected to be the largest regional market.

Last updated on 13/09/2019
Sector
TMT
Share price graph
Balance sheet
Forecast net debt (€m) 11.9
Forecast gearing ratio (%) 85
Price performance
%
1m
3m
12m
Actual 15.9 12.4 149.2
Relative* 7.5 5.1 138.6
52-week high/low €3.7/€1.1
*% relative to local index
Key management
Stefano Spaggiari CEO
Claudio Palmolungo Executive VP Europe
Daniel Mayer Expert System Enterprise
Marco Varone CTO