EQS Group - Revision history

95.149.241.133 at 21:02, 19 August 2022

2022-08-19T21:02:19Z

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	[[Category:Equities]]		[[Category:Equities]]

			__INDEX__

>Jeff at 13:19, 22 July 2022

2022-07-22T13:19:34Z

← Older revision		Revision as of 14:19, 22 July 2022
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	<references />		<references />
	[[Category:Thesis]]		[[Category:Thesis]]
			[[Category:Equities]]

>Jeff at 13:01, 22 July 2022

2022-07-22T13:01:31Z

← Older revision		Revision as of 14:01, 22 July 2022
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	==References==		==References==
			<references />
			[[Category:Thesis]]

>Edison: /* Summary */

2022-06-23T12:24:46Z

Summary

Show changes

>Edison: /* The whistleblowing opportunity */

2022-06-23T12:16:09Z

The whistleblowing opportunity

← Older revision		Revision as of 13:16, 23 June 2022
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	'''Exhibit 4: Current status of whistleblowing legislation as at April 2022'''<ref name=":1" />		'''Exhibit 4: Current status of whistleblowing legislation as at April 2022'''<ref name=":1" />

	[[File:Image6-c6dd0fbb760921c68274a02aac6607ec.png\|514x514px]]This whistleblowing regulation applies to organisations with more than 50 employees. Those with over 250 employees must comply within two years; those with 50 to 250 have a maximum of a further two years. Reporting can be via an online system or via more traditional communications, with obvious major advantages to the former in terms of process and confidentiality.		[[File:Image6-c6dd0fbb760921c68274a02aac6607ec.png\|514x514px]]

			This whistleblowing regulation applies to organisations with more than 50 employees. Those with over 250 employees must comply within two years; those with 50 to 250 have a maximum of a further two years. Reporting can be via an online system or via more traditional communications, with obvious major advantages to the former in terms of process and confidentiality.

	'''Exhibit 5: Whistleblowing market and conversion targets'''<ref>Source: EQS Group, Edison Investment Research.</ref>		'''Exhibit 5: Whistleblowing market and conversion targets'''<ref>Source: EQS Group, Edison Investment Research.</ref>
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	[[File:Image9-15a11fb2d529d45c87d468276dc3d513.png\|600x600px]]'''<br />Exhibit 13: Compliance segment growth target'''<ref name=":1" />		[[File:Image9-15a11fb2d529d45c87d468276dc3d513.png\|600x600px]]'''<br />Exhibit 13: Compliance segment growth target'''<ref name=":1" />

	[[File:Image10-0196e00384d21c4af781ad09d16a5d55.png\|600x600px]]The growth forecast in the Compliance segment combines organic growth at a CAGR of 22% FY21–25e, with the addition of (growing) Business Keeper revenues coupled with synergies quantified by management at €5–10m to FY25e.		[[File:Image10-0196e00384d21c4af781ad09d16a5d55.png\|600x600px]]

			The growth forecast in the Compliance segment combines organic growth at a CAGR of 22% FY21–25e, with the addition of (growing) Business Keeper revenues coupled with synergies quantified by management at €5–10m to FY25e.

	'''Exhibit 14: Long-term revenue and EBITDA record and forecasts<ref name=":2" />'''		'''Exhibit 14: Long-term revenue and EBITDA record and forecasts<ref name=":2" />'''
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	This is clearly shown in the aggregation exercise below where we have looked at the sources and uses of cash for the five years FY17–21, where the scale of the M&A is apparent. As indicated above, Business Keeper was the largest acquisition to date by some margin, at a cost of €95m, of which €80m was paid in FY21 with the balance due in FY22.'''<br />Exhibit 15: Sources and uses of cash FY17–21<ref name=":2" />'''		This is clearly shown in the aggregation exercise below where we have looked at the sources and uses of cash for the five years FY17–21, where the scale of the M&A is apparent. As indicated above, Business Keeper was the largest acquisition to date by some margin, at a cost of €95m, of which €80m was paid in FY21 with the balance due in FY22.'''<br />Exhibit 15: Sources and uses of cash FY17–21<ref name=":2" />'''

	[[File:Image12-56506b266e95c68bcdcd599486ef4408.png\|600x600px]]During FY21, the group raised €43.9m in three capital raises, in February, July and December. These were for €13.6m at €38.00 per share, €22.4m at €38.00 and €7.7m at €41.00.		[[File:Image12-56506b266e95c68bcdcd599486ef4408.png\|600x600px]]

			During FY21, the group raised €43.9m in three capital raises, in February, July and December. These were for €13.6m at €38.00 per share, €22.4m at €38.00 and €7.7m at €41.00.

	During Q122, the group carried out a further fund-raise of €45m gross, in part to facilitate the requirements of a new prospective cornerstone investor, Gerlin NV’s Teslin fund. To satisfy this, the deal was structured to be underwritten by other key investors, which only subscribed to the extent that, with a rump placing, they would end up where they wanted to be, thereby avoiding dilution. So, although visually a take up of 9.7% looks poor, this does not represent the underlying degree of support from existing shareholders. Gerlin took 42% of the issue and now has a 6.1% holding in the enlarged equity.		During Q122, the group carried out a further fund-raise of €45m gross, in part to facilitate the requirements of a new prospective cornerstone investor, Gerlin NV’s Teslin fund. To satisfy this, the deal was structured to be underwritten by other key investors, which only subscribed to the extent that, with a rump placing, they would end up where they wanted to be, thereby avoiding dilution. So, although visually a take up of 9.7% looks poor, this does not represent the underlying degree of support from existing shareholders. Gerlin took 42% of the issue and now has a 6.1% holding in the enlarged equity.

>Edison: /* Summary */

2022-06-23T12:15:20Z

Summary

← Older revision		Revision as of 13:15, 23 June 2022
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	{\| class="wikitable"		{\| class="wikitable"
	\|+Key financials<ref>Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.</ref>		\|+Key financials<ref>Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.</ref>
	\|Year end		!Year end
	\|Revenue		!Revenue

	(€m)		(€m)
	\|EBITDA		!EBITDA

	(€m)		(€m)
	\|PBT*		!PBT*

	(€m)		(€m)
	\|EPS*		!EPS*

	(c)		(c)
	\|EV/EBITDA		!EV/EBITDA

	(x)		(x)
	\|P/E		!P/E

	(x)		(x)
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	'''Exhibit 1: FY21 revenue by segment'''<ref name=":0">Source: EQS Group accounts.</ref>		'''Exhibit 1: FY21 revenue by segment'''<ref name=":0">Source: EQS Group accounts.</ref>

			[[File:Image3-9589bf31951e17ab949784badc9e0c4c.png\|600x600px]]


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	'''Exhibit 2: FY21 revenue by geography<ref name=":0" />'''		'''Exhibit 2: FY21 revenue by geography<ref name=":0" />'''

			[[File:Image4-666e5cc13984687522afaf3577c161a8.png\|600x600px]]




	The group has added to its offering through acquisition as well as through internally developed platforms and tools and has used a combination of cash, debt and equity to fund both aspects. The purchase of Business Keeper in June 2021 was the largest acquisition to date, with a transaction price of €95m. This significantly scaled up the exposure to digital whistleblowing, making the combined group the clear market leader in Europe. It added over 300 customers and around 100 employees, the customers predominantly being large corporations, including 16 DAX-listed companies. Business Keeper currently generates annual recurring licence revenues (ARR) of approximately €10m and was previously EQS’s strongest competitor in Germany.		The group has added to its offering through acquisition as well as through internally developed platforms and tools and has used a combination of cash, debt and equity to fund both aspects. The purchase of Business Keeper in June 2021 was the largest acquisition to date, with a transaction price of €95m. This significantly scaled up the exposure to digital whistleblowing, making the combined group the clear market leader in Europe. It added over 300 customers and around 100 employees, the customers predominantly being large corporations, including 16 DAX-listed companies. Business Keeper currently generates annual recurring licence revenues (ARR) of approximately €10m and was previously EQS’s strongest competitor in Germany.
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	'''Exhibit 3: Compliance COCKPIT client interface<ref name=":1">Source: EQS Group.</ref>'''		'''Exhibit 3: Compliance COCKPIT client interface<ref name=":1">Source: EQS Group.</ref>'''

			[[File:Image5-e82b789cadf89720d0020af2ea338683.png\|556x556px]]

	== The whistleblowing opportunity ==		== The whistleblowing opportunity ==
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	'''Exhibit 4: Current status of whistleblowing legislation as at April 2022'''<ref name=":1" />		'''Exhibit 4: Current status of whistleblowing legislation as at April 2022'''<ref name=":1" />

			[[File:Image6-c6dd0fbb760921c68274a02aac6607ec.png\|514x514px]]This whistleblowing regulation applies to organisations with more than 50 employees. Those with over 250 employees must comply within two years; those with 50 to 250 have a maximum of a further two years. Reporting can be via an online system or via more traditional communications, with obvious major advantages to the former in terms of process and confidentiality.


	This whistleblowing regulation applies to organisations with more than 50 employees. Those with over 250 employees must comply within two years; those with 50 to 250 have a maximum of a further two years. Reporting can be via an online system or via more traditional communications, with obvious major advantages to the former in terms of process and confidentiality.

	'''Exhibit 5: Whistleblowing market and conversion targets'''<ref>Source: EQS Group, Edison Investment Research.</ref>		'''Exhibit 5: Whistleblowing market and conversion targets'''<ref>Source: EQS Group, Edison Investment Research.</ref>

			[[File:Image7-5c82f9d4103405c86b2901b357f8d53e.png\|600x600px]]


	The acquisitions first of Integrity Line and subsequently of Got Ethics and then Business Keeper have given EQS a highly credible proposition in this burgeoning market. Management estimates that there are 50k companies within the EU that will need to address their systems, with the likely conversion rates as shown in Exhibit 5.		The acquisitions first of Integrity Line and subsequently of Got Ethics and then Business Keeper have given EQS a highly credible proposition in this burgeoning market. Management estimates that there are 50k companies within the EU that will need to address their systems, with the likely conversion rates as shown in Exhibit 5.
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	'''Exhibit 10: Historical revenue progression and forecast by segment'''<ref name=":2">Source: EQS Group accounts, Edison Investment Research.</ref>		'''Exhibit 10: Historical revenue progression and forecast by segment'''<ref name=":2">Source: EQS Group accounts, Edison Investment Research.</ref>

			[[File:Image8-ebafa5124d8196802324f40aa657b1d6.png\|600x600px]]

	{\| class="wikitable"		{\| class="wikitable"
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	'''Exhibit 12: IR segment growth target'''<ref name=":1" />		'''Exhibit 12: IR segment growth target'''<ref name=":1" />

	'''<br />Exhibit 13: Compliance segment growth target'''<ref name=":1" />		[[File:Image9-15a11fb2d529d45c87d468276dc3d513.png\|600x600px]]'''<br />Exhibit 13: Compliance segment growth target'''<ref name=":1" />

			[[File:Image10-0196e00384d21c4af781ad09d16a5d55.png\|600x600px]]The growth forecast in the Compliance segment combines organic growth at a CAGR of 22% FY21–25e, with the addition of (growing) Business Keeper revenues coupled with synergies quantified by management at €5–10m to FY25e.


	The growth forecast in the Compliance segment combines organic growth at a CAGR of 22% FY21–25e, with the addition of (growing) Business Keeper revenues coupled with synergies quantified by management at €5–10m to FY25e.

	'''Exhibit 14: Long-term revenue and EBITDA record and forecasts<ref name=":2" />'''		'''Exhibit 14: Long-term revenue and EBITDA record and forecasts<ref name=":2" />'''

			[[File:Image11-890fc63683ee1974ef2a8cf0e6620ea4.png\|600x600px]]


	=== Cash flow dominated by M&A ===		=== Cash flow dominated by M&A ===
	With the emphasis on recurring revenues, the underlying cash requirements of the business are relatively modest and the broad spread of clients with relatively small contract values minimises the credit risk. The comparatively low level of operating cash flow is really just a reflection of the concentration of resource into investing to build out the medium and longer-term prospects.		With the emphasis on recurring revenues, the underlying cash requirements of the business are relatively modest and the broad spread of clients with relatively small contract values minimises the credit risk. The comparatively low level of operating cash flow is really just a reflection of the concentration of resource into investing to build out the medium and longer-term prospects.
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	This is clearly shown in the aggregation exercise below where we have looked at the sources and uses of cash for the five years FY17–21, where the scale of the M&A is apparent. As indicated above, Business Keeper was the largest acquisition to date by some margin, at a cost of €95m, of which €80m was paid in FY21 with the balance due in FY22.'''<br />Exhibit 15: Sources and uses of cash FY17–21<ref name=":2" />'''		This is clearly shown in the aggregation exercise below where we have looked at the sources and uses of cash for the five years FY17–21, where the scale of the M&A is apparent. As indicated above, Business Keeper was the largest acquisition to date by some margin, at a cost of €95m, of which €80m was paid in FY21 with the balance due in FY22.'''<br />Exhibit 15: Sources and uses of cash FY17–21<ref name=":2" />'''

			[[File:Image12-56506b266e95c68bcdcd599486ef4408.png\|600x600px]]During FY21, the group raised €43.9m in three capital raises, in February, July and December. These were for €13.6m at €38.00 per share, €22.4m at €38.00 and €7.7m at €41.00.


	During FY21, the group raised €43.9m in three capital raises, in February, July and December. These were for €13.6m at €38.00 per share, €22.4m at €38.00 and €7.7m at €41.00.

	During Q122, the group carried out a further fund-raise of €45m gross, in part to facilitate the requirements of a new prospective cornerstone investor, Gerlin NV’s Teslin fund. To satisfy this, the deal was structured to be underwritten by other key investors, which only subscribed to the extent that, with a rump placing, they would end up where they wanted to be, thereby avoiding dilution. So, although visually a take up of 9.7% looks poor, this does not represent the underlying degree of support from existing shareholders. Gerlin took 42% of the issue and now has a 6.1% holding in the enlarged equity.		During Q122, the group carried out a further fund-raise of €45m gross, in part to facilitate the requirements of a new prospective cornerstone investor, Gerlin NV’s Teslin fund. To satisfy this, the deal was structured to be underwritten by other key investors, which only subscribed to the extent that, with a rump placing, they would end up where they wanted to be, thereby avoiding dilution. So, although visually a take up of 9.7% looks poor, this does not represent the underlying degree of support from existing shareholders. Gerlin took 42% of the issue and now has a 6.1% holding in the enlarged equity.

>Edison: /* Summary */

2022-06-23T12:05:35Z

Summary

@@ Line 5: / Line 5: @@
 == Summary ==
 '''EQS is in a strong position to build its client base as the EU whistleblowing directive comes into force across Europe. Delays in adoption of formal legislation are a frustration but do not detract from the strength of the underlying proposition. EQS retains its ambition to be the leading European cloud provider for global investor relations and corporate compliance solutions by 2025. The €45m raised in March will help fund the repayment of short-term bank and vendor loans during Q222. We see management’s targets of €130m of group revenues and EBITDA margins of at least 30% for FY25 as demanding but achievable.'''
 === German legislative adoption set for H222 ===

>Edison at 11:57, 23 June 2022

2022-06-23T11:57:12Z

← Older revision		Revision as of 12:57, 23 June 2022
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			[[File:EQS Group logo.jpg\|thumb]]

	Regulatory stimulus set for the second half of 2022		Regulatory stimulus set for the second half of 2022

>Edison: /* Management team */

2022-06-23T11:55:00Z

Management team

← Older revision		Revision as of 12:55, 23 June 2022
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	\|3.1		\|3.1
	\|}		\|}

			==References==

>Edison at 11:54, 23 June 2022

2022-06-23T11:54:39Z

Show changes