Tinexta

Euronext STAR Milan: TNXT

Market Cap€1,051m

Last Close €22.26

Tinexta has four divisions: Digital Trust, solutions to increase trust in digital transactions; Credit Information & Management, services to manage credit; Innovation & Marketing Services, consulting services to help clients develop their businesses; and Cybersecurity.

Investment summary

Tinexta’s proposal sale of its Credit Information & Management (CIM) division is significant from a financial and strategic perspective. With respect to the former, the remaining group should demonstrate higher aggregate pro forma revenue and profit growth and it will have significantly improved financial fire power to pursue further M&A in the higher-growth business units. Strategically, it removes a business that has low exposure to the thematic growth driver of a digitising economy, limited overlap and potential for cross-selling with the other divisions, and above-average (versus the rest of the group) GDP sensitivity. Our forecasts are unchanged ahead of the expected completion in H222.

Y/E Dec	Revenue (€m)	EBITDA (€m)	PBT (€m)	EPS (fd) (c)	P/E (x)	P/CF (x)
2020A	269.0	81.2	58.4	84.9	26.2	12.8
2021A	375.4	98.7	70.4	102.0	21.8	14.5
2022E	446.8	120.9	87.0	116.2	19.2	12.3
2023E	500.2	139.8	105.5	143.3	15.5	9.4

Industry outlook

Tinexta is exposed to favourable growth trends including the transition to a digital world and the requirement for enhanced online security. Starting from a purely domestic Italian focus, the company is exploiting these trends internationally. In particular, given recent regulatory changes, in Digital Trust the group is leveraging its Italian expertise to expand on an EU-wide basis with a unified legal base across the region. At the same time, Tinexta is likely to make acquisitions in Italy and Europe that will further expand its addressable markets and seek cross-selling opportunities between the business units.

Last updated on 30/06/2022