Last close As at 05/08/2026
EUR15.00
— 0.00 (0.00%)
Market capitalisation
EUR709m
Research: TMT
Tinexta’s Q124 results showed good progress in the two divisions that typically demonstrate more consistent (through the year) growth, Cyber Security and Digital Trust, which management expects to deliver higher growth over the next few years. Business Innovation demonstrated its typical seasonality and management therefore remains confident about the outlook for the year.
Tinexta |
Typical seasonality in Q124 |
Q124 results |
Professional services |
17 May 2024 |
Share price performance
Business description
Next events
Analysts
TinextaTinexta is a research client of Edison Investment Research Limited |
|||||||||||||||||||||||||||||||||||||||||||||||||
Tinexta’s Q124 results showed good progress in the two divisions that typically demonstrate more consistent (through the year) growth, Cyber Security and Digital Trust, which management expects to deliver higher growth over the next few years. Business Innovation demonstrated its typical seasonality and management therefore remains confident about the outlook for the year.
Year end |
Revenue (€m) |
PBT* |
EPS* |
DPS |
P/E |
Yield |
12/22 |
357.2 |
73.6 |
1.06 |
0.51 |
17.5 |
2.7 |
12/23 |
395.8 |
78.0 |
1.03 |
0.46 |
18.2 |
2.5 |
12/24e |
479.4 |
98.4 |
1.23 |
0.19 |
15.2 |
1.0 |
12/25e |
529.1 |
112.9 |
1.41 |
0.35 |
13.2 |
1.9 |
Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.
Q1 typically a seasonally small quarter
On an underlying basis, Tinexta’s revenue grew by c 5% y-o-y to €98.4m and adjusted EBITDA declined by c 11% to €15.4m, the latter due to mix changes between the divisions (see below). The greatest contributors to underlying revenue growth were the Cyber Security (c +16%) and Digital Trust (c +8%) divisions, with positive commentary on the businesses. Business Innovation, which is typically heavily weighted to Q4 trading, will be even more so this year given the c 7% underlying decline in revenue in Q124. Here, there are number of important drivers. First, management had anticipated some underlying weakness due to less attractive terms for its clients on existing government-supported, subsidised finance schemes for digital investment. This was compounded by the deferred launch of new and additional subsidised finance schemes for energy investments, which have much more attractive terms for Tinexta’s clients, and management therefore expects these will boost growth later in the year. The decline in this higher-margin business was responsible for the overall underlying decline in group adjusted EBITDA. On the more positive side, acquisitions boosted revenue and adjusted EBITDA with growth of c 10% and c 14%, respectively, including a notable performance from Ascertia in Digital Trust, albeit with some seasonality. The period-end net debt position increased to c €240m (c €102m at end FY23) due to the acquisition of ABF Groupe and relatively stable underlying free cash generation.
FY24 guidance reiterated
Management reiterated its FY24 guidance from the start of the year, highlighting the typical seasonality of the group. In the last three financial years, Q1 and Q3 combined have represented 33–36% of total annual profits for the group. We have made no changes to our underlying estimates.
Valuation: Attractive versus DCF-based valuation
Our DCF-based valuation, which has increased marginally to €29.3/share from €28.5/share previously as we update for the Q124 results and bond yields, highlights the attractive upside potential on the current share price.
Exhibit 1: Financial summary
€m |
2021 |
2022 |
2023 |
2024e |
2025e |
2026e |
||
31-December |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
IFRS |
||
INCOME STATEMENT |
||||||||
Revenue |
|
|
301.5 |
357.2 |
395.8 |
479.4 |
529.1 |
582.0 |
Operating costs |
(225.1) |
(262.4) |
(292.8) |
(344.7) |
(377.4) |
(413.6) |
||
EBITDA |
|
|
76.5 |
94.8 |
103.0 |
134.7 |
151.7 |
168.5 |
Adjusted EBITDA |
|
|
71.3 |
86.3 |
93.8 |
124.2 |
142.7 |
159.5 |
Operating profit (before amort. and excepts.) |
|
61.1 |
77.6 |
79.6 |
107.6 |
123.1 |
139.1 |
|
Amortisation of acquired intangibles |
(11.0) |
(17.5) |
(17.9) |
(29.9) |
(28.4) |
(27.6) |
||
Exceptionals |
(2.6) |
(6.4) |
(5.0) |
(5.5) |
(4.5) |
(4.5) |
||
Share-based payments |
(2.6) |
(2.1) |
(4.2) |
(5.0) |
(4.5) |
(4.5) |
||
Reported operating profit |
45.0 |
51.6 |
52.4 |
67.2 |
85.7 |
102.5 |
||
Net Interest |
(3.1) |
(6.2) |
(1.6) |
(9.0) |
(10.0) |
(8.0) |
||
Joint ventures & associates (post tax) |
(0.2) |
(0.2) |
(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) |
|
|
57.5 |
73.6 |
78.0 |
98.4 |
112.9 |
130.9 |
Profit Before Tax (reported) |
|
|
41.7 |
45.1 |
50.6 |
58.0 |
75.5 |
94.2 |
Reported tax |
(13.0) |
(12.5) |
(16.4) |
(19.1) |
(24.9) |
(31.1) |
||
Profit After Tax (norm) |
40.3 |
52.2 |
54.5 |
65.9 |
75.7 |
87.7 |
||
Profit After Tax (reported) |
28.7 |
32.6 |
34.3 |
38.9 |
50.6 |
63.1 |
||
Minority interests |
(1.2) |
(2.4) |
(6.9) |
(9.2) |
(10.6) |
(11.9) |
||
Discontinued operations |
10.0 |
45.5 |
35.6 |
0.0 |
0.0 |
0.0 |
||
Net income (normalised) |
39.1 |
49.8 |
47.6 |
56.7 |
65.1 |
75.8 |
||
Net income (reported) |
37.5 |
75.7 |
63.0 |
29.7 |
40.0 |
51.3 |
||
Average Number of Shares Outstanding (m) |
47.2 |
46.8 |
46.4 |
46.3 |
46.0 |
45.8 |
||
EPS - normalised (c) |
|
|
84.7 |
108.5 |
104.6 |
125.1 |
144.3 |
169.1 |
EPS - normalised fully diluted (c) |
|
|
82.8 |
106.4 |
102.5 |
122.6 |
141.4 |
165.6 |
EPS - basic reported (€) |
|
|
0.81 |
1.65 |
1.38 |
0.65 |
0.89 |
1.14 |
Dividend (c) |
30.00 |
51.00 |
46.00 |
19.23 |
34.79 |
44.81 |
||
Revenue growth (%) |
12.1 |
18.4 |
10.8 |
21.1 |
10.4 |
10.0 |
||
EBITDA Margin before non-recurring costs (%) |
25.4 |
26.5 |
26.0 |
28.1 |
28.7 |
28.9 |
||
Normalised Operating Margin |
20.3 |
21.7 |
20.1 |
22.4 |
23.3 |
23.9 |
||
BALANCE SHEET |
||||||||
Fixed Assets |
|
|
602.9 |
574.0 |
654.7 |
799.9 |
785.5 |
774.9 |
Intangible Assets |
550.4 |
487.3 |
541.4 |
693.2 |
685.0 |
678.9 |
||
Tangible Assets |
25.2 |
48.4 |
51.2 |
44.7 |
38.4 |
33.9 |
||
Investments & other |
27.4 |
38.3 |
62.1 |
62.1 |
62.1 |
62.1 |
||
Current Assets |
|
|
213.2 |
403.5 |
364.4 |
239.7 |
282.2 |
327.9 |
Stocks |
1.3 |
1.9 |
2.1 |
2.1 |
2.1 |
2.1 |
||
Debtors |
119.5 |
129.5 |
148.3 |
180.0 |
198.6 |
218.5 |
||
Cash & cash equivalents |
68.3 |
115.3 |
161.7 |
5.3 |
29.1 |
55.0 |
||
Other financial assets |
4.1 |
125.8 |
26.0 |
26.0 |
26.0 |
26.0 |
||
Other |
20.0 |
31.0 |
26.4 |
26.4 |
26.4 |
26.4 |
||
Current Liabilities |
|
|
(207.5) |
(260.9) |
(314.2) |
(331.4) |
(333.9) |
(339.2) |
Creditors |
(146.8) |
(156.4) |
(184.2) |
(206.4) |
(213.9) |
(224.1) |
||
Tax and social security |
(3.6) |
(2.9) |
(2.9) |
(2.9) |
(2.9) |
(2.9) |
||
Short term borrowings |
(54.1) |
(93.6) |
(121.3) |
(116.3) |
(111.3) |
(106.3) |
||
Other |
(3.1) |
(8.0) |
(5.8) |
(5.8) |
(5.8) |
(5.8) |
||
Long Term Liabilities |
|
|
(357.9) |
(314.6) |
(249.5) |
(249.5) |
(249.5) |
(249.5) |
Long term borrowings |
(281.5) |
(235.2) |
(172.9) |
(172.9) |
(172.9) |
(172.9) |
||
Other long term liabilities |
(35.0) |
(42.4) |
(36.0) |
(36.0) |
(36.0) |
(36.0) |
||
Net Assets |
|
|
250.8 |
402.0 |
455.4 |
458.7 |
484.3 |
514.1 |
Minority interests |
(46.9) |
(36.4) |
(45.7) |
(45.7) |
(45.7) |
(45.7) |
||
Shareholders' equity |
|
|
203.9 |
365.7 |
409.7 |
413.0 |
438.6 |
468.4 |
CASH FLOW |
||||||||
Operating Cash Flow before interest |
|
|
72.5 |
72.8 |
75.1 |
83.1 |
91.9 |
102.2 |
Capex and intangibles |
(16.2) |
(24.1) |
(38.2) |
(28.0) |
(23.6) |
(25.4) |
||
Acquisitions/disposals |
(92.8) |
84.5 |
24.4 |
(157.0) |
0.0 |
0.0 |
||
Net interest |
(2.3) |
(2.4) |
0.3 |
(9.0) |
(10.0) |
(8.0) |
||
Equity financing |
(9.3) |
(8.1) |
(3.1) |
(10.0) |
(10.0) |
(10.0) |
||
Dividends |
(12.5) |
(20.8) |
(33.4) |
(30.6) |
(19.5) |
(27.9) |
||
Borrowings |
42.9 |
(40.2) |
(41.4) |
0.0 |
0.0 |
0.0 |
||
Other |
6.6 |
1.4 |
130.1 |
0.0 |
0.0 |
0.0 |
||
Net Cash Flow |
(24.6) |
48.6 |
44.7 |
(156.4) |
23.8 |
25.9 |
||
Opening net debt/(cash) |
|
|
91.9 |
264.4 |
77.6 |
102.0 |
253.5 |
224.6 |
Closing net debt/(cash) |
|
|
264.4 |
77.6 |
102.0 |
253.5 |
224.6 |
193.8 |
Source: Tinexta accounts, Edison Investment Research
|
|
Research: TMT
Dentsu’s Q1 results indicate a slow start to the year, with organic net revenue down by 3.7%. However, prospects are improving, buoyed by new business wins and weighted to H2, which leave full year expectations (and our forecasts) unchanged. The One dentsu initiative, bringing together skill sets in consulting, technology, media and creative, is supporting improved pitch win rates, and giving greater coherence and consistency to the group product and service offering. We expect this to be a central element of the new management medium-term strategy, set to be unveiled during H2. The rating remains at a substantial discount to global peers, which we anticipate will narrow as evidence of renewed growth builds.