Tinexta — Incorporating management’s FY22–24 guidance

Tinexta (MIL: TNXT)

Last close As at 21/06/2024

EUR17.19

0.54 (3.24%)

Market capitalisation

EUR812m

More on this equity

Research: TMT

Tinexta — Incorporating management’s FY22–24 guidance

Tinexta delivered FY21 results that were in line with our expectations, while undertaking a higher-than-average level of M&A as it sought to develop further the services it provides to customers and grow its international presence. Management’s new three-year (FY22–24) business plan points to attractive growth for revenue (low double digit) and adjusted EBITDA (mid-double digit) from a combination of organic growth, further M&A and cost efficiencies. Our estimate for adjusted EBITDA in FY22 is broadly unchanged, but we reduce our estimate for FY23 by c 4%. Recent share price weakness means our DCF-based valuation of €42 per share (previously €41) offers significant upside potential.

Russell Pointon

Written by

Russell Pointon

Director of Content, Consumer and Media

TMT

Tinexta

Incorporating management’s FY22–24 guidance

FY21 results

Professional services

4 April 2022

Price

€26.30

Market cap

€1,243m

Net debt (€m) at 31 December 2021

263.3

Shares in issue

47.2m

Free float

34%

Code

TNXT

Primary exchange

Euronext STAR Milan

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

2.2

(30.9)

14.3

Rel (local)

(0.9)

(23.7)

12.0

52-week high/low

€43.26

€22.25

Business description

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

Next events

Q122 results

12 May 2022

H122 results

3 August 2022

Q322 results

10 November 2022

Analysts

Russell Pointon

+44 (0)20 3077 5700

Fiona Orford-Williams

+44 (0)20 3077 5739

Tinexta is a research client of Edison Investment Research Limited

Tinexta delivered FY21 results that were in line with our expectations, while undertaking a higher-than-average level of M&A as it sought to develop further the services it provides to customers and grow its international presence. Management’s new three-year (FY22–24) business plan points to attractive growth for revenue (low double digit) and adjusted EBITDA (mid-double digit) from a combination of organic growth, further M&A and cost efficiencies. Our estimate for adjusted EBITDA in FY22 is broadly unchanged, but we reduce our estimate for FY23 by c 4%. Recent share price weakness means our DCF-based valuation of €42 per share (previously €41) offers significant upside potential.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/20

269.0

58.4

0.86

0.26

30.9

1.0

12/21

375.4

70.4

1.04

0.30

25.1

1.1

12/22e

443.1

87.5

1.17

0.31

22.4

1.2

12/23e

496.1

106.6

1.45

0.40

18.1

1.5

12/24e

554.1

124.6

1.71

0.49

15.3

1.9

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

FY21: Delivering on growth and strategy

Tinexta achieved the FY21 financial guidance which was provided earlier in FY21. Revenue increased by 39.5% y-o-y to €375m due to a combination of strong organic growth (7.7%) and the contribution from M&A. Adjusted EBITDA growth of 21.5% similarly benefited from a combination of organic growth (2.7%) and M&A (+18.9%). The increase in the period-end net debt position of €263.3m (FY20: €91.9m) mainly reflects the higher level of M&A undertaken through the year.

Forecasts: Mid-double-digit EBITDA CAGR FY22–24

For FY22–24, we forecast a revenue CAGR of c 14% versus management’s guidance for a low double-digit CAGR. At the group level, our revenue estimates for FY22 and FY23 are broadly unchanged, including higher growth for two divisions (greater organic growth for Digital Trust (DT) and M&A for Innovation & Marketing Services (IMS)), and trimming estimates for two divisions, Cyber Security (CS) and Credit Information & Management (CIM) due to a lower revenue base from FY21. For adjusted EBITDA, we forecast a CAGR of 16.5% for FY22–24 versus management guidance of mid-double-digit growth. Our forecast for FY22 is unchanged but reduced by 4% in FY23 as higher growth expectations for DT and the contribution from M&A (Evalue) are offset by lower expectations for CS, CIM and IMS. Management expects the balance sheet to de-gear quickly, to c 2.0x adjusted EBITDA at end FY22 and 0.7–0.8x at end FY24.

Valuation: DCF-based valuation of €42 per share

The share price has been weak since the peak in September 2021, and more notably since the start of FY22. Our updated DCF-based valuation is €42 per share, representing c 60% upside from the current share price.

FY21 results and new guidance

Tinexta released its FY21 financial statements following the publication of headline FY21 results and new guidance for both FY22 and its new three-year business plan for FY22–24 earlier in March 2022.

In our last note, we provided an overview of the headline results and provisional new estimates for revenue and EBITDA in FY22 onwards based on management’s new guidance. To summarise, FY21 was a strong year financially as Tinexta delivered on the financial guidance it provided at the start of the year. From a business perspective, it was an important year given a higher than typical level of M&A at €193m.

Tinexta delivered on the guidance it provided at the start of year for revenue of €370m and adjusted EBITDA of €96m. The results were also above our prior expectations for revenue of €373.7m and adjusted EBITDA of €96.5m. However, we had not included any contribution for the recent acquisitions of the majority stake in CertEurope (completed in November 2021) and Forvalue (completed in July 2021), where a limited contribution was expected for the latter.

We concluded that, based on the new guidance, provisional estimates would reflect a modest increase to FY22 but a reduction in FY23. Our commentary below focuses mainly on the new disclosures included in the full results release, in particular with respect to Q421 results, and to formally update/introduce our new estimates for FY22–24.

Income statement: Q421 strong end to the year

Tinexta produced its typical strong Q4 performance with organic revenue growth of 6.9%, albeit against a slightly easier comparative of 2.8% in Q420, but we note that through FY20 the individual quarters were affected by the phasing of restrictions due to the COVID pandemic.

Exhibit 1: Business unit performance

€m

Q120

Q220

Q320

Q420

FY20

Q121

Q221

Q321

Q421

FY21

Group revenue

54.9

68.8

65.1

80.2

269.0

82.7

95.1

83.7

113.8

375.4

Growth y-o-y

(8.1%)

3.0%

19.2%

4.2%

4.0%

50.5%

38.2%

28.7%

41.9%

39.5%

Organic y-o-y

(8.4%)

2.3%

18.5%

2.8%

3.2%

17.6%

8.8%

(1.9%)

6.9%

7.7%

- Digital Trust

26.1

29.2

27.7

32.8

115.8

31.2

32.4

29.6

38.1

131.3

Organic y-o-y

2.9%

9.6%

9.9%

9.4%

8.0%

19.4%

10.9%

6.9%

7.7%

11.0%

- Cyber Security

16.8

17.8

16.9

21.4

72.8

Organic y-o-y

104.2%

- Credit Information & Management

17.1

18.2

20.6

21.4

77.3

18.9

19.8

18.2

22.0

79.0

Organic y-o-y

(12.3%)

(2.7%)

38.7%

6.6%

6.5%

10.7%

8.9%

(18.2%)

(7.2%)

(2.4%)

- Innovation & Marketing Services

12.0

21.7

17.1

25.8

76.5

16.1

25.5

19.6

33.6

94.8

Organic y-o-y

(22.3%)

(2.2%)

12.9%

(4.8%)

(5.6%)

23.5%

5.2%

2.9%

16.4%

11.3%

- Other

(0.2)

(0.3)

(0.2)

(0.5)

(1.3)

(0.3)

(0.5)

(0.6)

(1.2)

(2.6)

Group adjusted EBITDA

11.0

23.9

22.0

24.3

81.2

17.0

25.3

21.0

35.4

98.7

Margin

20.0%

34.7%

33.9%

30.3%

30.2%

20.6%

26.6%

25.1%

31.1%

26.3%

- Digital Trust

5.9

8.0

8.0

9.1

31.0

7.2

8.4

8.6

12.2

36.4

Margin

22.7%

27.5%

29.0%

27.6%

26.8%

23.0%

26.0%

29.1%

32.0%

27.7%

- Cyber Security

1.9

1.6

2.3

4.3

10.1

Margin

11.5%

8.7%

13.8%

20.0%

13.9%

- Credit Information & Management

3.6

6.6

7.4

6.1

23.7

5.3

6.1

4.9

6.5

22.8

Margin

21.0%

36.1%

36.1%

28.5%

30.7%

28.0%

31.0%

26.9%

29.4%

28.9%

- Innovation & Marketing Services

3.4

11.6

8.6

12.5

36.1

5.0

12.1

7.9

16.1

41.1

Margin

28.3%

53.2%

50.7%

48.4%

47.1%

30.9%

47.6%

40.1%

48.0%

43.3%

- Other

(1.9)

(2.3)

(2.1)

(3.5)

(9.7)

(2.4)

(3.0)

(2.7)

(3.7)

(11.7)

Source: Tinexta

Digital Trust (DT) benefited from the continued strong demand for its services, which help companies migrate their processes to digital and streamline operations, with organic revenue growth of 7.7% in Q421 and 11.0% for the full year.

In its first year of ownership, Cyber Security (CS) contributed revenue of €72.8m, slightly lower than management’s guidance from the start of the year of €76m. However, as EBITDA of €10.1m was in line with its prior guidance, it therefore generated a better margin than expected.

CIM’s organic revenue decline of 7.2% in Q421 continued the trend seen in Q321, reflecting the tough comparatives from the prior year when it benefited from client requests to access the Italian government’s Central Guarantee Fund, which provided financial support for companies affected by COVID-related lockdowns. These declines were partially offset by growth in Tinexta’s real estate services.

IMS demonstrated its typical seasonally strong Q4 performance with organic revenue growth of 16.4%, albeit against an easier comparative from the prior year. For FY21, organic revenue growth of 11.3% reflects strong demand for the consulting services that help companies gain tax credits and other incentives, and a rebound in export consulting. In addition, the acquisitions that focus on digital marketing are seeing strong demand from new clients.

The strong revenue growth fed through to an improved adjusted EBITDA margin for Q421 of 31.1% (Q420: 30.3%). This reflects a combination of improved margins for a number of business units ie DT (32% in Q421 versus 27.6% in Q420) and CIM (29.4% versus 28.5%), and the negative mix effects from the inclusion of lower-margin Cyber Security for the first time. In addition, there were lower (relative to revenue) central costs (ie ‘other’). The full year adjusted EBITDA margin of 26.3% versus FY20’s 30.2% mainly reflects the addition of CS’s lower margin of 13.9% for the first time since acquisition, as well as a higher margin for DT (operating leverage) with lower margins for CIM (operating leverage) and IMS (mix changes including M&A). In aggregate, therefore, Tinexta’s adjusted EBITDA increased by 21.5% y-o-y, of which 2.7% was organic and 18.9% was from M&A.

The higher level of M&A undertaken in the year led to an increase in depreciation and amortisation to €36.1m from €25.2m in FY20, including €11.7m for amortisation of acquired intangibles, which led to operating profit growth of c 8% y-o-y to €56.9m. On a normalised basis, ie excluding amortisation of acquired intangibles, operating profit growth was greater at c 20%.

Net financial charges of €3.3m for FY21 compared with net financial income of €0.6m in FY20, which included a capital gain on the sale of LuxTrust (Tinexta’s joint venture in Luxembourg).

Tinexta’s net profit growth benefited from a lower effective corporate tax rate of 25.8% versus 27.8% in the prior year, and we note versus 31.8% in FY19, due to a higher level of non-recurring tax income than the prior year.

Net attributable profit grew y-o-y by c 3% y-o-y to €38.3m, while the declared dividend of €0.30 per share grew by 15% y-o-y.

Cash flow and balance sheet: M&A and higher net debt

In FY21 Tinexta generated free cash of €56.4m versus €66.7m in the prior year. Relative to its larger revenue base, the lower free cash flow generation reflects the addition of CS’s lower margin, a lower positive contribution from working capital (this was an area of focus for the new CFO in the prior year, his first year), higher cash tax payments, and a marginally lower investment in tangible and intangible assets.

At the end of FY21, Tinexta’s net debt position was €263.3m (2.67x EBITDA), a significant increase from €92.0m (1.1x EBITDA) at the end of FY20, given the high level of M&A undertaken in the year (including the acquisitions of Corvallis, Yoroi, Queryo, Forvalue and CertEurope). The net debt position was higher than we anticipated but it excludes the previously announced €70m capital increase from Bregal Milestone for its acquisition of a minority stake in InfoCert (DT). We had previously assumed the first tranche of €70m would be received in FY21, but it was paid in February 2022. The remaining €30m investment will be received by end February 2023.

Under the new FY22–24 business plan (see below), management expects a rapid improvement in the net debt position, reducing to 2.0x adjusted EBITDA by the end of FY22 and 0.7–0.8x by the end of FY24.

New forecasts: Mid-double-digit CAGR for EBITDA FY22–24e

Management guides to total revenue growth of 18–20% in FY22 (ie a range of €443–450m), which includes like-for-like revenue growth of 10–12%. Guidance for adjusted EBITDA growth of 20–22% (ie a range of €118–120m), including like-for-like growth of 8–10%, implies some modest margin compression.

For FY22–24, management guides to a low double-digit CAGR for revenue, which equates to an FY24 revenue range of c €513–542m if we assume 11–13% growth pa, and a slightly higher mid double-digit CAGR for adjusted EBITDA (ie a range of €146–154m). Therefore, management anticipates a return to an improving margin at the group level in the medium term. In Exhibit 2, we summarise management’s guidance for FY22 and the new three-year business plan.

Exhibit 2: FY22–24e

Organic revenue CAGR

Total revenue CAGR

Organic Adjusted EBITDA CAGR

Total Adjusted EBITDA CAGR

Digital Trust

10%

14%

14%

18%

Cyber Security

19%

19%

31%

31%

Credit Information & Management

6%

5%

Innovation & Marketing Services

7%

11%

5%

10%

Group

High single digit

Low double digit

Low double digit

Mid double digit

Source: Tinexta

Our new forecasts for revenue and adjusted EBITDA are shown in Exhibit 3. We forecast revenue growth for the next three years of c 18% (to €443m in FY22), c 12% (to €496m in FY23) and c 12% (to €554m in FY24). These give a revenue CAGR of c 14% versus management’s guidance for a low double-digit CAGR. Our estimates at the group level for FY22 and FY23 are broadly unchanged, but divisional estimates for DT (higher organic growth assumption) and IMS (acquisition of Evalue) increase, while those for CIM and CS reduce due to a lower revenue base from FY21.

Exhibit 3: New forecasts

€m

FY21

New FY22e

New FY23e

New FY24e

Old FY22e

Old FY23e

Change FY22e

Change FY23e

Edison's 3-year CAGR

Tinexta's FY22–24 guidance

Revenue

375.4

443.1

496.1

554.1

438.6

502.5

1%

(1%)

Growth y-o-y

18.0%

12.0%

11.7%

16.9%

14.6%

13.9%

Low double digit

DT

131.3

158.5

173.6

191.2

153.4

164.7

3%

5%

Growth y-o-y

20.7%

9.6%

10.1%

16.9%

7.3%

13.3%

14%

CS

72.8

88.1

104.9

122.7

93.3

110.5

(6%)

(5%)

Growth y-o-y

21.0%

19.0%

17.0%

28.1%

18.5%

19.0%

19%

CIM

79.0

83.5

94.7

105.8

89.5

102.7

(7%)

(8%)

Growth y-o-y

5.7%

13.4%

11.7%

13.3%

14.8%

10.2%

*6%

IMS

94.8

115.2

126.4

138.4

102.4

124.6

13%

1%

Growth y-o-y

21.5%

9.7%

9.5%

8.0%

21.6%

13.4%

*11%

Other

(2.6)

(2.2)

(3.5)

(3.9)

N/M

N/M

Adjusted EBITDA

98.7

119.6

137.8

156.1

119.6

143.6

(0%)

(4%)

Growth y-o-y

21.2%

15.3%

13.3%

21.2%

20.0%

16.5%

Mid double digit

DT

36.4

46.1

52.1

59.2

44.1

48.5

5%

7%

Growth y-o-y

26.7%

13.0%

13.7%

21.1%

10.0%

17.6%

18%

CS

10.1

13.1

18.4

22.6

14.9

21.0

(12%)

(13%)

Growth y-o-y

30.0%

39.8%

23.0%

47.8%

40.7%

30.8%

31%

CIM

22.8

24.1

27.2

30.3

26.8

31.3

(10%)

(13%)

Growth y-o-y

5.6%

12.8%

11.5%

17.7%

16.5%

9.9%

*5%

IMS

41.1

49.3

54.8

60.1

46.3

55.8

6%

(2%)

Growth y-o-y

19.9%

11.2%

9.6%

12.6%

20.6%

13.5%

*10%

Other

(11.7)

(13.0)

(14.6)

(16.0)

(12.5)

(13.0)

N/M

N/M

Source: Tinexta, Edison Investment Research

Our new adjusted EBITDA forecasts are for growth in the next three years of c 21% (to €120m in FY22), 15% (to €138m in FY23) and 13% (to €156m in FY24), a CAGR of 16.5% versus management’s guidance of mid-double digit. Our forecast for FY22 is unchanged but our forecasts for FY23 is reduced by 4% as higher growth expectations for DT are offset by lower expectations for CS, CIM and IMS.

Valuation: DCF-based valuation of c €42 per share

Our updated DCF-based valuation for Tinexta increases modestly to €42 per share, with lower profit estimates and a higher net debt position since our last update compensated for by rolling forward our valuation. Our near-term estimates to FY24 are detailed above. For FY25, we include the ramp-up of the Forvalue acquisition, and thereafter we assume a rapid fade in the group’s annual revenue growth to 6% in FY26 and to 2% by FY31. We then assume a stable EBITDA margin of 28.2% from FY25, assuming no further operational gearing, which is conservative versus Tinexta’s history. We use a weighted average cost of capital of 7% and terminal growth rate of 2%. The sensitivity of the DCF valuation is as follows:

Exhibit 4: DCF sensitivity (€/share)

Terminal growth rate

1%

2%

3%

4%

5%

WACC

10.0%

21.2

23.0

25.3

28.4

32.7

9.5%

23.0

25.1

27.8

31.6

37.0

9.0%

24.9

27.4

30.7

35.4

42.4

8.5%

27.2

30.1

34.2

40.1

49.3

8.0%

29.7

33.3

38.3

45.9

58.5

7.5%

32.7

37.1

43.4

53.4

71.4

7.0%

36.1

41.6

49.8

63.4

90.8

6.5%

40.2

47.1

57.9

77.4

123.0

6.0%

45.1

54.0

68.8

98.5

187.5

5.5%

51.1

62.8

84.0

133.5

380.9

Source: Edison Investment Research

In Exhibit 5 we show Tinexta’s growth prospects and valuation relative to peers of its business units, which we then use to calculate a sum-of-the-parts (SOTP) valuation in Exhibit 6.

Exhibit 5: Peer valuations

Sales growth (%)

EBITDA growth (%)

EBITDA margin (%)

EV/Sales (x)

EV/EBITDA (x)

P/E (x)

Company

Share price (local)

Ccy

Market cap (€m)

‘22

‘23

‘22

‘23

‘22

‘23

‘22

‘23

‘22

‘23

‘22

‘23

Adobe

456

USD

194,560

13

15

13

15

48.8

49.1

11.9

10.4

24.3

21.1

32.9

27.9

DocuSign

107

USD

19,252

19

17

9

18

20.3

20.4

8.7

7.4

42.8

36.3

54.5

47.2

DT median

16

16

11

17

34.6

34.7

10.3

8.9

33.6

28.7

43.7

37.6

Equifax

237

USD

26,337

8

9

15

13

36.0

37.5

6.4

5.9

17.8

15.8

27.2

23.3

Experian

2,951

GBp

32,294

11

9

13

10

35.1

35.7

6.0

5.5

17.0

15.5

21.6

19.3

Fair Isaac Corp

466

USD

11,079

6

9

15

12

46.5

47.5

9.8

8.9

21.0

18.8

29.5

25.4

TransUnion

103

USD

17,969

29

9

21

12

36.8

37.8

6.4

5.9

17.5

15.7

26.1

22.7

CIM median

10

9

15

12

36.4

37.6

6.4

5.9

17.7

15.7

26.7

23.0

Alkemy

18

EUR

101

14

9

N/A

16

11.6

12.3

1.2

1.1

10.2

8.7

15.9

13.0

Be Shaping the Future

3

EUR

422

8

7

15

12

16.8

17.6

1.7

1.6

10.1

9.0

28.9

24.6

IMS median

11

8

15

14

14.2

15.0

1.4

1.3

10.1

8.9

22.4

18.8

Reply

150

EUR

5,647

16

10

10

10

16.8

16.8

3.2

2.9

18.9

17.2

32.5

29.4

secunet Security Networks

425

EUR

2,769

7

26

N/A

28

19.4

19.7

7.4

5.8

38.0

29.7

66.1

51.6

CS median

12

18

10

19

18.1

18.2

5.3

4.4

28.4

23.4

49.3

40.5

Tinexta

26

EUR

1,237

21

15

21.2

15.3

27.0

27.8

3.5

3.1

12.9

11.2

22.4

18.1

Source: Refinitiv, Edison Investment Research. Note: Priced at 31 March 2022

Our SOTP valuation for Tinexta when applying the above peer multiples to our new forecasts is approximately €49 per share.

Exhibit 6: Sum-of-the-parts valuation

EBITDA (€m)

EBITDA multiple (x)

Valuation

FY22e

FY23e

FY22e

FY23e

FY22e
(€m)

FY23e
(€m)

FY22e
(€/share)

FY23e
(€/share)

Comments

Digital Trust

46.1

52.1

33.6

28.7

1,547.7

1,494.1

32.8

31.6

Credit Information & Management

24.1

27.2

17.7

15.7

425.5

426.6

9.0

9.0

Innovation & Marketing Services

49.3

54.8

10.1

8.9

500.0

486.3

10.6

10.3

Cyber Security

13.1

18.4

28.4

23.4

373.5

429.6

7.9

9.1

Total/(average)

132.6

152.4

22.5

19.2

2,846.7

2,836.6

60.3

60.1

Central costs

(13.0)

(14.6)

20.2

17.3

(262.7)

(251.2)

(5.6)

(5.3)

10% discount to average multiple

119.6

137.8

21.6

18.8

2,583.9

2,585.4

54.7

54.8

Associate

6.6

6.6

0.1

0.1

Minorities

(95.4)

(102.5)

(2.0)

(2.2)

Proforma for Bregal

Net cash/(debt)

(193.3)

(193.3)

(4.1)

(4.1)

Market value

2,301.8

2,296.2

48.8

48.6

Shares (m)

47.2

47.2

Implied share price (€)

48.8

48.6

Source: Refinitiv, Edison Investment Research. Note: Priced 31 March 2022.

Exhibit 7: Financial summary

€m

2019

2020

2021

2022e

2023e

2024e

31-December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue

 

 

258.7

269.0

375.4

443.1

496.1

554.1

Operating costs

(181.9)

(187.8)

(276.6)

(323.5)

(358.3)

(398.0)

Adjusted EBITDA

 

 

76.8

81.2

98.7

119.6

137.8

156.1

EBITDA

 

 

71.3

77.9

93.0

116.8

135.0

153.3

Normalised operating profit

 

 

59.0

62.2

74.3

92.4

111.2

128.8

Amortisation of acquired intangibles

(5.9)

(6.0)

(11.7)

(11.7)

(11.7)

(11.7)

Exceptionals

(2.0)

(2.4)

(2.9)

0.0

0.0

0.0

Share-based payments

(3.6)

(0.9)

(2.8)

(2.8)

(2.8)

(2.8)

Reported operating profit

47.5

52.9

56.9

78.0

96.7

114.3

Net Interest

(4.1)

0.6

(3.3)

(4.7)

(4.4)

(3.9)

Joint ventures & associates (post tax)

(1.1)

(1.0)

(0.2)

(0.2)

(0.2)

(0.2)

Exceptionals

0.0

0.0

0.0

0.0

0.0

0.0

Profit Before Tax (norm)

 

 

55.0

58.4

70.4

87.5

106.6

124.6

Profit Before Tax (reported)

 

 

42.2

52.5

53.4

73.1

92.1

110.2

Reported tax

(13.4)

(14.6)

(13.8)

(21.2)

(26.7)

(32.0)

Profit After Tax (norm)

38.3

40.6

49.5

62.1

75.7

88.5

Profit After Tax (reported)

28.8

37.9

39.6

51.9

65.4

78.2

Minority interests

(0.6)

(0.6)

(1.3)

(8.4)

(9.5)

(10.7)

Discontinued operations

0.0

0.0

0.0

0.0

0.0

0.0

Net income (normalised)

37.7

40.0

48.2

53.7

66.1

77.8

Net income (reported)

28.2

37.3

38.3

43.4

55.9

67.5

Average Number of Shares Outstanding (m)

47.0

47.1

46.2

45.9

45.6

45.4

EPS - normalised (c)

 

 

80.3

85.5

104.3

117.1

144.9

171.3

EPS - normalised fully diluted (c)

 

 

80.3

84.9

104.3

117.1

144.9

171.3

EPS - basic reported (€)

 

 

0.60

0.80

0.83

0.95

1.22

1.49

Dividend (€)

0.00

0.26

0.30

0.31

0.40

0.49

Revenue growth (%)

8.4

4.0

39.5

18.0

12.0

11.7

EBITDA Margin before non-recurring costs (%)

29.7

30.2

26.3

27.0

27.8

28.2

Normalised Operating Margin

22.8

23.1

19.8

20.9

22.4

23.2

BALANCE SHEET

Fixed Assets

 

 

316.7

325.8

591.0

612.2

591.2

571.6

Intangible Assets

269.9

285.1

538.5

567.3

551.2

534.6

Tangible Assets

21.2

19.0

25.2

17.5

12.7

9.6

Investments & other

25.6

21.7

27.4

27.4

27.4

27.4

Current Assets

 

 

139.4

196.1

213.2

279.1

354.1

432.7

Stocks

1.1

1.2

1.3

1.3

1.3

1.3

Debtors

89.8

84.1

119.5

151.7

169.9

189.8

Cash & cash equivalents

33.6

92.8

68.3

101.9

158.7

217.4

Other financial assets

6.6

7.3

4.1

4.1

4.1

4.1

Other

8.2

10.7

20.0

20.0

20.0

20.0

Current Liabilities

 

 

(160.4)

(154.9)

(207.5)

(223.7)

(236.4)

(250.3)

Creditors

(92.7)

(106.7)

(146.8)

(163.0)

(175.6)

(189.5)

Tax and social security

(2.9)

(5.1)

(3.6)

(3.6)

(3.6)

(3.6)

Short term borrowings

(62.0)

(40.4)

(54.1)

(54.1)

(54.1)

(54.1)

Other

(2.9)

(2.7)

(3.1)

(3.1)

(3.1)

(3.1)

Long Term Liabilities

 

 

(146.2)

(193.2)

(353.1)

(353.1)

(353.1)

(353.1)

Long term borrowings

(107.0)

(150.5)

(281.5)

(281.5)

(281.5)

(281.5)

Other long term liabilities

(15.8)

(14.3)

(30.2)

(30.2)

(30.2)

(30.2)

Net Assets

 

 

149.4

173.9

243.7

314.5

355.9

401.0

Minority interests

(3.9)

(4.0)

(47.0)

(95.4)

(102.5)

(105.7)

Shareholders' equity

 

 

145.6

169.8

196.7

219.1

253.4

295.3

CASH FLOW

Operating cash flow

 

 

55.2

81.6

72.5

82.1

105.4

117.9

Capex and intangibles

(13.5)

(14.9)

(16.2)

(19.9)

(17.4)

(19.4)

Acquisitions/disposals

0.0

(3.3)

(92.8)

(40.0)

0.0

0.0

Net interest

(2.5)

(1.9)

(2.3)

(4.7)

(4.4)

(3.9)

Equity financing

1.1

(10.0)

(9.3)

(10.0)

(10.0)

(10.0)

Dividends

(16.4)

(2.2)

(12.5)

(18.8)

(21.8)

(25.9)

Borrowings

23.7

35.4

42.9

0.0

0.0

0.0

Other

1.7

11.2

6.6

45.0

5.0

0.0

Net Cash Flow

(1.5)

59.2

(24.6)

33.6

56.8

58.7

Opening net debt/(cash)

 

 

124.9

129.1

91.9

263.3

229.7

172.8

Closing net debt/(cash)

 

 

129.1

91.9

263.3

229.7

172.8

114.2

Source: Company accounts, Edison Investment Research


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This report has been commissioned by Tinexta and prepared and issued by Edison, in consideration of a fee payable by Tinexta. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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United States

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Tinexta and prepared and issued by Edison, in consideration of a fee payable by Tinexta. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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