Research Report (Initial Coverage)
MEXEDIA S.p.A. - Società Benefit
From Telecom to Tech - Driving Innovation with
Customer eXperience Platform as a Service (CXPaaS)
-
Significant boost in sales and profits anticipated
Target price: 46.50 €
Rating: BUY
IMPORTANT NOTE:
Please note the disclaimer/risk warning
as well as the disclosure of possible conflicts of interest in accordance with § 85 WpHG and Art. 20 MAR from page 35
Note in accordance with MiFID II regulation for research "Minor non-monetary benefits": The research in question meets the
requirements for classification as "Minor non-monetary benefits". For further information, please refer to the disclosure
under "I. Research under MiFID II".
Date and time of completion of the research report: 10.05.2023 (14:15)
Date and time of the first disclosure of the research report: 11.05.2023 (10:00)
Validity of the target price: until max. 31.12.2023
MEXEDIA S.p.A. - Società Benefit Research Report (Initial Coverage)
Rating: BUY
MEXEDIA S.p.A. - Società Benefit*5a,6a,11
Target price: € 46.50
Current price: € 34.80
08.05.23 14:47
Euronext Growth Paris
Data overview:
ISIN: IT0005450819
WKN: A3C33K
Stock exchange symbol: 41R
Number of shares³: 5.70
Company profile
Industry: Technology & Telecommunications
Focus: TLC Business & Customer-Engagement Business Services
Employees: 39 as of 08.05.2023
Established: 2017
Headquarters: Rome, Italy
Management: Orlando Taddeo (CEO), Paolo Bona (Chief Business Officer), Fabio Focarelli (CFO), Giovanni Man- narino (Sales & Operation Director)
Volume in € thousands
0.5
0.45
0.4
0.35
0.3
0.25
0.2
0.15
0.1
0.05
0 Apr/ 22 Jun/ 22 Aug/ 22 Okt/ 22 Dez/ 22 Feb/ 23
€60.00
€50.00
€40.00
€30.00
€20.00
€10.00
€0.00
Marketcap³: 198.36
EnterpriseValue³: 225.06
- in m / in EUR m Free float: 8.1%
Market segment: Euronext Growth (Paris)
Accounting standard:
IFRS
Liquidity provider: Portzampac, BNP Paribas
Financial year: 31.12.
Analysts:
Matthias Greiffenberger greiffenberger@gbc-ag.de
Marcel Schaffer schaffer@gbc-ag.de
- Catalog of possible conflicts of interest on page 36
Mexedia is a technology company in the areas customer-management and telecom. Initially focused on international sales of electronic service termination activities (voice and SMS), Mexedia has now evolved into a tech company with a strategic vision to offer advanced technological services and a complete customer experience to its clients. To achieve this objective, Mexedia has developed a Customer eXperience Platform as a Service (CXPaaS) that provides cloud-based services and APIs to companies. The organization is structured vertically and offers a wide range of innovative technologies and tools that are integrated into a technological ecosystem, facilitating all consumer-oriented communications. Mexedia's business model is based on two highly synergistic and complementary business units: namely, the provision of voice and SMS termination services using advanced and innovative technological tools in a consolidated market, and the delivery of new- generation, multi-channel technological services. The integration of these two units creates a powerful cross- selling potential among the services offered.
P&L in EURm FY-end | 30.09.2021 | 30.09.2022 | 30.09.2023e | 30.09.2024e | |||||||||
Sales | 131.80 | 140.90 | 324.11 | 361.22 | |||||||||
EBITDA | 7.05 | 8.37 | 16.10 | 22.15 | |||||||||
EBIT | 6.89 | 8.36 | 13.90 | 21.15 | |||||||||
Net income | 2.96 | 4.43 | 5.53 | 10.48 | |||||||||
Key figures | |||||||||||||
NAV | 0.52 | 0.78 | 0.97 | 1.84 | |||||||||
Employees | 0.00 | 0.00 | 0.00 | 0.00 | |||||||||
Key figures | |||||||||||||
EV/sales | 1.71 | 1.60 | 0.69 | 0.62 | |||||||||
EV/EBITDA | 31.92 | 26.89 | 13.98 | 10.16 | |||||||||
EV/EBIT | 32.66 | 26.92 | 16.19 | 10.64 | |||||||||
KGV | 67.06 | 44.76 | 35.87 | 18.93 | |||||||||
KBV | 3.17 | ||||||||||||
Financial Calendar | **last research from GBC: | ||
October 2023: H1 Report | Date: Publication / Target price in EUR / Rating | ||
** Research studies listed above can be viewed at | |||
www.gbc-ag.deor requested from GBC AG, Halder- | |||
str. 27, D86150 Augsburg, Germany. | |||
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MEXEDIA S.p.A. - Società Benefit
Research Report (Initial Coverage)
EXECUTIVE SUMMARY
- Mexedia S.p.A. - Società Benefit (Mexedia) is a technology company that started in the telecom business. Mexedia serves as an intermediary for wholesale SMS and Voice traffic, facilitating interconnections between carriers. In the telecommunications industry, international phone calls and SMS messages are treated as tradeable com- modities that are exchanged wholesale between telcos. Voice traffic pertains to inter- national calls while A2P SMS traffic refers to messages received through apps. Mexe- dia also offers fixed and cost-effectivereal-time liquidity to its partners for voice and SMS services trading. This liquidity is secured against the receivables of insured debt- ors of its partners. To accomplish this, Mexedia conducts auctions of insured receiva- bles from debtors to investors in asset-backed securities and liquidity providers through Mexedia Exchange. This activity generates an arbitrage margin for Mexedia by capi- talizing on the spread gained from advancing money in real-time against the auction of its receivables.
- Mexedia's telecom business has exhibited strong growth and profitability, and is cur- rently in the process of transitioning into a tech company with a focus on offering ad- vanced technological services and a complete customer experience to its clients. To achieve this, Mexedia has developed a Customer eXperience Platform as a Service (CXPaaS) that provides cloud-based services and APIs to companies. Mexedia has a vertical structure and offers a range of innovative technologies and tools that are inte- grated into a technological ecosystem, facilitating all consumer-oriented communica- tions.
- In 2022, the company experienced a 6.9% increase in revenue, reaching € 140.9m (PY: € 131.8m) due to new and better deals in voice and SMS traffic. The majority of revenue was generated by the Irish subsidiary using a classic business model. Despite an increase in expenses, the EBITDA showed a significant improvement with an 18.7% increase to € 8.37m (€ 7.05m). The net result increased by 49.8% to € 4.43m (PY: €
2.96m). - An important cornerstone of the growth strategy will be the new Mexedia ON platform, which is the Customer Experience Platform as a Service (CXPaaS) designed for busi- nesses, especially those in the Telephone industry, to improve customer engagement and provide a seamless and consistent experience. The platform offers various fea- tures, including virtual agents and assistants, omnichannel communication, automa- tion, data analysis, and innovative channels like Metaverse and Smart Voice Assis- tance. It also includes an open app store that allows developers and market players to create and sell a wide range of applications for Mexedia ON, such as Sentiment Anal- ysis, Voice Biometrics, Speech Analytics, RPA, VR & AR Experience, Voice Smart Assistants, OTP & 2FA Authentication, and more. The app store also offers services for SMS marketing, lead generation, content marketing, and number masking, among others. Mexedia ON aims to be the most varied and powerful ecosystem of CXPaaS solutions for brands.
- We expect Mexedia to generate € 324.11m revenue in 2023, increasing to € 361.22m in 2024 and € 397.29m in 2025. The company has expanded to the USA, strengthened its position in existing markets, and diversified its client base. It recently acquired Matchcom Telecommunications Inc. and Phonetime Inc. in the US, which are alone expected to bring in an additional € 190m in revenue and € 6m in EBITDA in 2023.
- We expect that Mexedia Ltd, the Irish subsidiary, will remain the key earnings driver for the company, with an estimated EBITDA of € 6.3m in 2023. This figure is projected to increase to € 8m by 2025, reflecting a strong and sustained growth trajectory. We forecast the net result to be € 5.53m in 2023, € 10.48m in 2024, and € 14.49m in 2025.
- Based on our DCF-model we have determined a target price of € 46.50 and due to the high upside potential, we issue a Buy rating.
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MEXEDIA S.p.A. - Società Benefit
Research Report (Initial Coverage)
TABLE OF CONTENTS | |
Management team | 6 |
Board of Directors | 7 |
Business activity | 8 |
Company history at a glance | 8 |
Business model | 10 |
Voice Traffic and A2P SMS | 10 |
Financing and factoring of Voice Traffic and A2P SMS | 11 |
Mexedia Exchange | 11 |
Market and market environment | 14 |
ESG Analysis | 18 |
ESG / Sustainability Check | 18 |
ESG profile | 18 |
SDG Reference | 19 |
Company-specific contribution to the 17 UN Sustainable Development Goals | |
(extract) | 19 |
Examples | 20 |
Corporate development | 21 |
Key figures at a glance | 21 |
Business development 2022 | 22 |
Revenue development | 22 |
Earnings development | 22 |
Balance sheet and financial situation as of Dec. 31, 2022 | 24 |
SWOT analysis | 25 |
Forecast & Valuation | 26 |
Revenue forecast | 26 |
Mexedia ON | 28 |
Mexedia Health | 31 |
Earnings forecast | 31 |
Valuation | 33 |
Model assumptions | 33 |
Determination of the cost of capital | 33 |
Valuation result | 33 |
DCF model | 34 |
Appendix | 35 |
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MEXEDIA S.p.A. - Società Benefit
Research Report (Initial Coverage)
COMPANY
Heritage Ventures Ltd | 8.1% | |||||
3.6% | ||||||
Shareholder structure | ||||||
5.2% | ||||||
Shareholders | Share | Bimatics EOOD | ||||
Heritage Ventures Ltd | 77.7% | 5.5% | ||||
Bimatics EOOD | 5.5% | Orlando Taddeo | ||||
Orlando Taddeo | 5.2% | |||||
Renzo Menarini | 3.6% | |||||
Other shareholders | 8.1% | Renzo Menarini | 77.7% | |||
Sources: MEXEDIA S.P.A.; GBC AG | ||||||
Other shareholders
Business activity
Mexedia is a technology company in the areas customer-management and telecom. Initially focused on international sales of electronic service termination activities (voice and SMS), Mexedia has now evolved into a tech company with a strategic vision of offering advanced technological services and a complete customer experience to its clients. To achieve this objective, Mexedia has developed a Customer eXperience Platform as a Service (CXPaaS) that provides cloud-based services and APIs to companies. The organization is structured vertically and offers a wide range of innovative technologies and tools that are integrated into a technological ecosystem, facilitating all consumer-oriented com- munications. Mexedia's business model is based on two highly synergistic and complementary business units, namely, the provision of voice and SMS termination services using advanced and innovative technological tools in a consolidated market, and the delivery of new-generation,multi-channel technological services. The integration of these two units creates a powerful cross-selling potential among the services offered.
Group structure as of 31.01.2023
Sources: MEXEDIA S.P.A. SOCIETÀ BENEFIT; Mexedia Inc., a subsidiary company of Mexe- dia S.p.A., successfully acquired Phonetime Inc. and Matchcom Telecommunications Inc., both US companies, in January 2023.
TLC Business
TLC Business offers carrier-to-carrier wholesale intermediation of voice and SMS traffic, enabling telecommunication operators to trade efficiently. As a value-added service, TLC also provides toll-free and premium numbers, satellite connectivity, and mobile numbering (MVNO) services. Additionally, Mexedia provides partners with instant fixed and low-cost
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Disclaimer
Mexedia S.p.A. published this content on 11 May 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 May 2023 08:36:02 UTC.