EQS Group - COVID-19 tailwinds

EQS delivered a good first half performance, boosted by companies’ needs to adapt their communications strategies to the impact of the COVID-19 pandemic. Revenue guidance for the year has been tilted to the higher end of the previous range and EBITDA guidance lifted by €0.5m to $4.0–5.0m. We have lifted our forecast from €3.5m to €4.1m, rising to €8.5m for FY21e as the scalability of the platform helps improve margins. With the group now over the peak investment in its cloud-based COCKPIT software, free cash flow is on a clear improving trend. The share price has recovered well from the market setback in March but remains on a discount to peers.