EQS-Adhoc: EQS Group AG achieves annual targets for New Customers and New ARR. Revenue and EBITDA below plan.

 EQS Group AG achieves annual targets for New Customers and New ARR. Revenue and EBITDA below plan.

Medium-term target 2025 postponed by 12 to 18 months due to further delays in implementation of the Whistleblower Protection Act in line with legislation
 

Munich 14 February 2023

EQS Group AG (ISIN: DE0005494165) generated revenue of EUR 61.44 million for the 2022 financial year, according to the preliminary unaudited figures now available (previous year: EUR 50.22 million). The increase over the previous year is 22 percent. The companys EBITDA amounts to EUR 4.66 million (previous year EUR 1.74 million). The New ARR came out at EUR 9.3 million, which quantifies the new contractually agreed annually recurring revenue. The number of new SaaS customers is 1,043. This means that the targets for the key figures of New Customers and New ARR were achieved in 2022, while revenue recognition and EBITDA fell short.

The German Whistleblower Protection Act was adopted in the last session of the German lower house of Parliament, Bundestag, on 16 December 2022. Due to this late year decision, a large number of SaaS contracts, some of which had a high order volume, were forecast to only become revenue-effective in 2023. Furthermore, temporary budget cuts by customers in other areas also led to contract postponements. In total, the deviation of approximately EUR 1.5 million from the planned revenue then led to the EBITDA target of EUR 6 million not being achieved.
 

Medium-term target to be reached 12 to 18 months later

Unexpectedly, in its session on 10 February 2023, the upper house of the German parliament, Bundesrat, blocked the implementation of the EU Whistleblower Directive into German law. While 16 EU member states have in the meantime anchored whistleblower protection into their national laws, the delay for EQS Group AG in their important home market of Germany means a further delay in revenue recognition for customers who postpone their signing of contracts until the act enters into force. The medium-term goals can therefore no longer be achieved as planned. Now, EQS Group AG expects to achieve its medium-term target of EUR 130 million in revenue and an EBITDA margin of at least 30 percent with a delay of 12 to 18 months, in line with the legislation.
 

Outlook for the 2023 financial year

For the 2023 financial year, the Executive Board is planning an increase in revenue of 15 to 20 percent, equivalent to EUR 71 million to EUR 74 million. The EBITDA should be in a range of between EUR 9 million to EUR 11 million. For the key figure New ARR, the company expects a volume of EUR 9 million to EUR 12 million. In addition, 2,000 to 3,000 new customers are to be acquired, the majority of them in the product area of whistleblower systems. The outlook is based on the assessment that the EU Directive will be transposed into German legislation no later than during the course of the third quarter of 2023.

Person making the notification: André Marques, Executive Board member (CFO)

Contact:

André Marques

CFO

Tel.: +49 89-444430-033

Mobile: +49 175-5250009

Email.: andre.marques@eqs.com