Currency in EUR
Last close As at 26/05/2023
EUR24.25
▲ −1.00 (−3.96%)
Market capitalisation
EUR158m
Research: TMT
CLIQ Digital had a very strong start to FY23, with a 58% y-o-y revenue uplift in Q123 (to €83m) and an EBITDA margin of 15.4% (Q122: 15.8%). Raised levels of marketing spend continue to drive momentum, generating growth in both the lifetime value of the customer base (LTVCB) and in the number of paid members. CLIQ is inherently highly cash generative and net cash was €10.9m at the quarter-end. Management has reiterated both FY23 and mid-term 2025 sales guidance, and our forecasts are unchanged, underpinned by the strong Q123 performance. CLIQ’s valuation remains at a significant discount to peers on EV/sales and EV/EBITDA multiples, with substantial potential upside to the current share price on current estimates, in our view.
CLIQ Digital |
Bundled content driving sales and profit growth |
Q123 results |
Media |
5 May 2023 |
Share price performance
Business description
Next events
Analysts
CLIQ Digital is a research client of Edison Investment Research Limited |
CLIQ Digital had a very strong start to FY23, with a 58% y-o-y revenue uplift in Q123 (to €83m) and an EBITDA margin of 15.4% (Q122: 15.8%). Raised levels of marketing spend continue to drive momentum, generating growth in both the lifetime value of the customer base (LTVCB) and in the number of paid members. CLIQ is inherently highly cash generative and net cash was €10.9m at the quarter-end. Management has reiterated both FY23 and mid-term 2025 sales guidance, and our forecasts are unchanged, underpinned by the strong Q123 performance. CLIQ’s valuation remains at a significant discount to peers on EV/sales and EV/EBITDA multiples, with substantial potential upside to the current share price on current estimates, in our view.
Year |
Revenue |
EBITDA* |
EPS* |
DPS |
P/E |
Yield |
12/21 |
150.0 |
27.2 |
2.71 |
1.10 |
9.8 |
4.1 |
12/22 |
276.1 |
43.5 |
4.45 |
1.79 |
6.0 |
6.7 |
12/23e |
345.0 |
51.0 |
4.99 |
2.02 |
5.3 |
7.6 |
12/24e |
400.2 |
59.4 |
5.84 |
2.37 |
4.6 |
8.9 |
Note: *EBITDA and EPS (fully diluted) are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Robust growth with strong cash generation
We are encouraged by the continued progress made in both North America and Europe, which each delivered revenue +57%, as well as in Latin America, which delivered €3m of revenue, having launched in Q422. The shift to bundled content (93% of revenue from 82% in Q122) should create a stickier subscriber base with more sustainable long-term growth potential, provided content benefits from continued investment to keep it fresh and attractive. Management has reiterated guidance, continuing to expect revenue of €345m and EBITDA of at least €50m in FY23. We believe that a backdrop of constrained household budgets should be broadly positive for CLIQ.
Operational improvements in Q123
CLIQ has continued to develop and upgrade its bundled content offering, including the licensing of over 50 Hollywood films and ATP World Tour events in the DACH region. In Q123 CLIQ also launched the advertising campaign for its relatively new, low-cost bundled-content subscription service cliq.de, which included both TV and out of home adverts. In April 2023 CLIQ terminated its previous loan facility and has entered into a new smaller overdraft facility with HSBC, providing up to €15m with better conditions.
Valuation: Significant potential upside
CLIQ’s share price has gained c 3% in the year to date, against the peer median gain of 2%. Peer multiples have, however, dipped over this period, reflecting some amelioration in consensus estimates. CLIQ continues to trade at a significant discount to peers across median FY23 and FY24 EV/sales and EV/EBITDA multiples. Parity to the median EV/sales multiple would equate to an implied share price of €58, reflecting significant potential upside, in our view.
Exhibit 1: Financial summary
€m |
2020 |
2021 |
2022 |
2023e |
2024e |
|
Year end 31 December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
|
INCOME STATEMENT |
||||||
Revenue |
|
107.0 |
150.0 |
276.1 |
345.0 |
400.2 |
Cost of Sales |
(72.0) |
(98.8) |
(201.3) |
(256.1) |
(297.1) |
|
Gross Profit |
34.9 |
51.2 |
74.8 |
88.9 |
103.1 |
|
EBITDA |
|
15.9 |
27.2 |
43.5 |
51.0 |
59.4 |
Operating profit (before amort. and excepts.) |
|
15.2 |
26.3 |
42.1 |
49.7 |
58.1 |
Reported operating profit |
15.2 |
26.3 |
42.1 |
49.7 |
58.1 |
|
Net Interest |
(0.8) |
(0.9) |
(1.2) |
(0.8) |
(0.8) |
|
Profit Before Tax (norm) |
|
14.4 |
25.3 |
40.9 |
48.9 |
57.3 |
Profit Before Tax (reported) |
|
14.4 |
25.3 |
40.9 |
48.9 |
57.3 |
Reported tax |
(4.0) |
(7.1) |
(11.9) |
(15.3) |
(17.9) |
|
Profit After Tax (norm) |
10.4 |
18.2 |
29.0 |
33.6 |
39.4 |
|
Profit After Tax (reported) |
10.4 |
18.2 |
29.0 |
33.6 |
39.4 |
|
Minority interests |
3.3 |
0.4 |
(0.1) |
0.7 |
0.9 |
|
Net income (normalised) |
7.2 |
17.8 |
29.1 |
32.9 |
38.5 |
|
Net income (reported) |
7.2 |
17.8 |
29.0 |
32.9 |
38.5 |
|
Average Number of Shares Outstanding (m) |
6.2 |
6.5 |
6.5 |
6.5 |
6.5 |
|
EPS - normalised (€) |
|
1.16 |
2.74 |
4.47 |
5.06 |
5.92 |
EPS - normalised fully diluted (€) |
|
1.16 |
2.71 |
4.45 |
4.99 |
5.84 |
Dividend (€) |
0.46 |
1.10 |
1.79 |
2.02 |
2.37 |
|
Revenue growth (%) |
69.4 |
40.2 |
84.1 |
25.0 |
16.0 |
|
Gross Margin (%) |
32.7 |
34.1 |
27.1 |
25.8 |
25.8 |
|
EBITDA Margin (%) |
14.9 |
18.1 |
15.8 |
14.8 |
14.8 |
|
Normalised Operating Margin |
14.2 |
17.5 |
15.2 |
14.4 |
14.5 |
|
BALANCE SHEET |
||||||
Fixed Assets |
|
55.2 |
59.4 |
65.1 |
74.2 |
83.2 |
Intangible Assets |
0.8 |
2.6 |
8.4 |
15.7 |
23.8 |
|
Tangible Assets |
2.2 |
3.8 |
5.0 |
6.5 |
7.3 |
|
Goodwill & other |
52.3 |
53.0 |
51.7 |
51.9 |
52.1 |
|
Current Assets |
|
21.7 |
36.9 |
70.0 |
94.2 |
122.3 |
Receivables |
9.1 |
12.5 |
13.6 |
18.9 |
27.4 |
|
Cash & cash equivalents |
4.9 |
7.3 |
16.8 |
26.9 |
36.4 |
|
Other |
7.7 |
17.1 |
39.6 |
48.4 |
58.6 |
|
Current Liabilities |
|
(12.9) |
(27.3) |
(31.2) |
(36.1) |
(40.9) |
Creditors |
(2.0) |
(7.9) |
(9.5) |
(14.0) |
(18.0) |
|
Tax |
(3.2) |
(1.2) |
(2.6) |
(3.9) |
(5.0) |
|
Borrowings |
0.0 |
(5.0) |
0.0 |
0.0 |
0.0 |
|
Provisions |
(0.4) |
(0.4) |
(0.4) |
(0.4) |
(0.4) |
|
Other |
(7.3) |
(12.8) |
(18.7) |
(17.9) |
(17.5) |
|
Long Term Liabilities |
|
(8.5) |
(9.4) |
(22.6) |
(25.3) |
(29.2) |
Long term borrowings |
(3.8) |
0.0 |
(6.6) |
(6.4) |
(6.2) |
|
Other long term liabilities |
(4.7) |
(9.4) |
(16.0) |
(19.0) |
(23.0) |
|
Net Assets |
|
55.6 |
59.6 |
81.3 |
106.9 |
135.5 |
Minority interests |
4.8 |
0.0 |
(0.1) |
0.7 |
1.5 |
|
Shareholders equity |
|
50.8 |
59.5 |
81.4 |
106.3 |
133.9 |
CASH FLOW |
||||||
Operating Cash Flow |
15.1 |
26.8 |
44.9 |
50.2 |
58.6 |
|
Working capital |
1.6 |
(1.2) |
(18.1) |
(0.8) |
(4.5) |
|
Exceptional & other |
0.9 |
1.3 |
1.6 |
2.8 |
2.8 |
|
Tax |
(2.8) |
(6.1) |
(3.4) |
(16.1) |
(18.7) |
|
Operating cash flow |
|
14.8 |
20.8 |
25.0 |
36.2 |
38.2 |
Capex |
(0.7) |
(3.3) |
(9.6) |
(11.1) |
(12.2) |
|
Acquisitions/disposals |
0.0 |
(10.3) |
1.5 |
0.0 |
0.0 |
|
Net interest |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Equity financing |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Dividends |
(2.1) |
(3.3) |
(7.2) |
(13.2) |
(15.4) |
|
Other |
(1.5) |
(2.5) |
(1.0) |
(1.4) |
(0.9) |
|
Net Cash Flow |
10.5 |
1.4 |
8.9 |
10.4 |
9.6 |
|
Opening net debt/(cash) |
|
9.6 |
(0.9) |
(2.3) |
(9.9) |
(20.3) |
FX |
(0.0) |
0.0 |
(0.1) |
0.0 |
0.0 |
|
Other non-cash movements |
0.0 |
0.0 |
0.0 |
0.0 |
0.0 |
|
Closing net debt/(cash)* |
|
(0.9) |
(2.3) |
(9.9) |
(20.3) |
(30.0) |
Source: Company accounts, Edison Investment Research
|
|
Research: Industrials
Mytilineos released strong Q123 results on 4 May, despite scheduled maintenance in its power business and Q1 being a typically weaker quarter. The year 2023 is likely to be H2 weighted, because scheduled maintenance at Mytilineos’s Ag. Nikolas plant is now complete and its new highly efficient power plant is entering full commercial operation. This strong performance during a period of low energy and metal prices reinforces our view that our FY23 estimates are conservative. EBITDA of €225m was 24% of our FY23 estimate (€931m) and EPS of €1.04 was 27.5%. Net profit after minorities of €143m was up 113% year on year. These results reflect the underlying change to Mytilineos’s synergistic business model to focus on two key activities: Energy (renewables, electricity generation and natural gas supply) and Metallurgy. H223 will see the full operation of its gas plants and continued rollout of renewables – the latter a key focus of its >€2bn capex programme over the next three years.
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