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. The consensus EBITDA forecast is now €4.7m, rising to €7.2m for FY21e as the scalability of the platform helps improve margins. With EQS now past peak investment in its cloud-based COCKPIT software, free cash flow is on a clear improving trend. The share price has recovered well from March’s market setback, trading near parity to peers on FY21e EV/EBITDA.