DGAP-News: EQS Group AG with a good start into 2022

EQS Group AG with a good start into 2022
Delayed implementation of the EU Whistleblower Directive

- Revenue grows by 34 percent to EUR 14.11 million in Q1

- New ARR rises by 26 percent to EUR 1.81 million

- 216 new SaaS customers (previous year 158)

- Number of SaaS customers rises to 4,405

- EBITDA of EUR 252 thousand above target (previous year EUR 309 thousand)

- Whistleblower Directive expected in Germany in the third quarter

- Upper revenue range for growth for 2022 lowered to 40 percent

- DFGE will not become part of EQS Group AG

Munich 13 May 2022

EQS Group AG (ISIN: DE0005494165) has made a good start to the new year. In the months from January to March, the Group generated sales revenue of EUR 14.11 million (previous year EUR 10.55 million). That means an increase of 34 percent compared with the same period in the previous year. EBITDA declined to EUR 252 thousand (previous year EUR 309 thousand). The consolidated profit for the year stood at EUR -971 thousand. Earnings per share amounted accordingly to EUR -0.11.

A volume of EUR 1.81 million is calculated for the new ARR performance indicator, which quantifies the new contractually agreed, annually recurring revenue. The number of new SaaS customers is 216.

The momentum of new customer acquisition in the fourth quarter of 2021 did not carry over into the first quarter of 2022. In Germany in particular, the late submission of the draft bill on the Whistleblower Directive is slowing down sales activities. Implementation is now expected in the third quarter. There are also delays in other European countries. Nevertheless, almost 150 new clients were acquired for whistleblower systems alone. The acquisition of Business Keeper GmbH contributed EUR 2.58 million. The weak capital market environment did not provide any stimulus.

Segment development

Revenue in the Compliance segment rose by 64 percent. In the Investor Relations segment, revenue remained almost constant. The annual recurring revenue at Group level had a ratio of 86 percent of total revenue.

Achim Weick, Founder and CEO of the EQS Group AG: We are ideally positioned to attract a high number of new SaaS customers as the national Whistleblower Directive legislations come into force. The draft bill for implementation in Germany is now available and meets our expectations in terms of content. Experience shows that most companies do not concentrate their efforts on the effects of a new law until just before it is introduced. Therefore, we expect to see a steady increase in lead generation activity and a significant rise in concluded contracts in the weeks and months ahead.

Many companies in the European Union will need to deal with compliance subjects for the first time based on the EU Directive 2019/1937 which prescribes the obligatory introduction of an internal whistleblower channel for companies. EQS Group AG has been making intensive preparations for this for more than a year to build on its leading position in Europe.

Sustainability

EQS Group AG announced in an ad hoc disclosure on 17 February 2022 that it will expand its strategic focus and become an ESG technology provider. Immediate market entry was to be completed with the acquisition of DFGE Institute for Energy, Ecology and Economy GmbH. However, both parties were unable to agree on a purchase contract during the exclusive negotiations and therefore DFGE will not become part of EQS Group AG. Talks about a close collaboration are still ongoing.

The European Union is introducing an obligation to report non-financial sustainability indicators with the Corporate Sustainability Reporting Directive (CSRD). According to new information, the EU directive will be delayed by at least one year. The development of a software solution is now being launched independently with a dedicated ESG team. Thomas Krick, a proven expert in sustainability who most recently successfully built up and led the ESG offering at Deloitte Germany, has been recruited as Managing Director.

EQS Group AG is publishing a comprehensive sustainability report for the first time together with this quarterly report. The content of this report follows the Global Reporting Initiative standards and is available on the website at Sustainability at EQS Group as of today.

Updated outlook:
Revenue growth between 30 and 40 percent
For the 2022 financial year, the Executive Board is now planning an increase in revenue of 30 to 40 percent (previously 30 to 50 percent) to then EUR 65 million to EUR 70 million. All the other key performance indicators in the outlook remain unchanged.
Investments in marketing and sales for new client acquisition related to the implementation of the EU Whistleblower Directive are expected to remain high. EBITDA is expected to be in the range of EUR 6 million to EUR 10 million. For the new ARR performance indicator, which quantifies the contractually concluded annually recurring business volume, we expect a volume of EUR 11 million to EUR 16 million. In addition, 2,500 to 3,500 new customers are to be acquired, the majority of them for the product area of whistleblower systems. The outlook is based on the assumption that the EU Directive will be transposed into German legislation in the third quarter of 2022.

The Executive Board will outline the business results in todays video conference from 11.00 a.m. (CEST). Login is not necessary. This will be broadcast live online at (Q1 2022 Results). Questions can be asked using the Q&A feature (chat) beforehand or during the webcast.

* For a better comparison, net interest is reported in cash flow from financing activities. The prior-year figures have been adjusted accordingly
** Previous years figures adjusted. We refer to the notes to the consolidated financial statements under 20.1.4 Changes in presentation and reclassifications of the annual report 2021

More information:

The figures for Q1 2022 are unaudited.

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EQS Group is a leading international cloud provider in the fields of corporate compliance, investor relations and sustainability reporting (ESG tech).

Working with EQS Group, thousands of companies worldwide inspire trust by fulfilling complex regulatory requirements in a reliable and secure manner, minimizing risks and communicating their business success and its impact on society and the climate transparently to stakeholders.

EQS Groups products are pooled in the cloud-based software EQS COCKPIT. This platform ensures the professional handling of compliance workflows in the fields of whistleblower protection and case management, policy management, business approvals, third party management, insider list management and disclosure obligations.

Specific applications for sustainability reporting are available, including automated ESG data collection, management and filing in compliance with regulations.

In addition, listed companies benefit from a global newswire, investor targeting and contact management, IR websites, digital reports and webcasts for efficient and secure investor communications.

EQS Group was founded in 2000 in Munich, Germany. Today the group employs around 600 professionals and has offices in the worlds key financial markets.

Contact:

André Marques

CFO

Tel.: +49 89-444430033

Mobile: +49 175-5250009

Email.: andre.marques@eqs.com