Tinexta has three business divisions: Digital Trust – solutions to improve digital security; Credit Information & Management – information services to help manage corporate credit; and Innovation & Marketing Services – consulting services to help clients develop and/or grow their businesses.
Tinexta’s FY20 results were broadly in line with management’s prior guidance and demonstrated margin leverage despite it being a more challenging year due to COVID-19, and a significant improvement in free cash flow generation and net debt. The acquisitions of the Cyber Security businesses have enhanced the group’s growth revenue and EBITDA growth profile, albeit diluting the group’s EBITDA margin. Our DCF-based approach suggests a valuation of €27 per share.
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.