NuWays AG: Research-Veröffentlichung "VOQUZ Labs setzt starkes Wachstum fort"

VOQUZ Labs AG

Software - Germany

Buy (old: Buy)	30.05.2023
EUR 32.00 (old: EUR 32.00)

FY22 out: Continued strong growth; chg.

On Friday, VOQUZ released FY 22 figures, showing strong top line growth but a weaker margin com­ pared to FY 21 due to significant growth investments, especially in connection with the newly set up Sin­ gapore entity.

FY sales increased 21% yoy to € 4.7m, thus slightly exceeding our estimate of € 4.6m. Growth was mainly driven by continuously strong order intake (+21% yoy to € 5.0m) especially for the company's flagship software samQ as well as the launch of its new product visoryQ, which largely maps advisory services with intelligent software thus eliminating scalability constraints. Notably, the company was able to increase the share of recurring orders (managed services + maintenance) by 14pp to 68% of total or­ der intake, which allows for good visibility on future growth.

FY EBITDA decreased by 35% yoy to € 0.6m (in line with eNuW), implying a margin of 13%. As out­ lined above, the decline is mainly attributable to growth investments into the newly set up entities in Sin­ gapore and Romania, which led to an increased personnel expense ratio (+6pp yoy to 27%) as well as one-offs to the tune of € 0.2m. Adjusted for these one-offs, the EBITDA stood at € 0.9m (19% margin).

Investments into the sales structure are seen to bear fruit in the short-term,supporting a further growth acceleration, in our view. Moreover, visoryQ looks set to make a significant sales contribution al­ ready in 2023e (eNuW: € 1m). In fact, VOQUZ has already been able to acquire a large US company (> $ 100bn Mcap) as a customer for its software, serving as proof-of-concept.On top of that, the acquired remQ software (SAP compliance software) is also seen to add some € 0.5m (eNuW) in revenues.

Overall, we regard VOQUZ as well positioned to grasp the promising opportunities of the strongly in­ creasing demand for Software Asset Management solutions. With its unique value proposition, based on strong ROIs, as well as a marketing push, the company should be able to accelerate key account wins. Against this backdrop, sales are seen to grow dynamically at a 35% CAGR to € 11.6m in '25e while EBITDA should improve to € 3.9m (34% margin) in the same time span (eNuW).

Considering the promising growth prospects of the company as well as the high scalability of the busi­ ness model, the stock looks undervalued trading at only 8.6x EV/EBITDA '23e. We hence reiterate BUY with an unchanged PT of € 32.00 based on DCF.

Share Performance

15.20

14.40

13.60

12.80

12.00

11.20

10.40

9.60

8.80
07/22	09/22	11/22	01/23	03/23	05/23

High/low 52 weeks (€)	15.00 / 10.00
3m rel. performance	-19.6%
6m rel. performance	-27.0%
12m rel. performance

Market data

Share price (in €)	12.00
Market cap (in € m)	12.6
Number of shares (in m pcs)	1.1
Enterprice value (in € m)	11.9
Ø trading volume (6 months)	25

	Identifier
Bloomberg		HC7 GR
Reuters		HC7.DE
WKN		A3CSTW
ISIN	DE000A3CSTW4
Key shareholders
VOQUZ Technology GmbH	75.6%
Peter Rattey		11.4%
Free Float		13.0%

Y/E 31.12 (EUR m)	2020	2021	2022	2023e	2024e	2025e
Sales	3.0	3.9	4.7	6.6	8.9	11.6
Sales growth	66.4%	31.3%	21.4%	40.0%	35.0%	30.0%
EBITDA	0.7	1.0	0.6	1.4	2.3	3.9
Net debt (if net cash=0)	-0.1	-1.0	-0.1	-0.7	-2.0	-4.5
FCF	0.4	0.6	-0.3	0.8	1.3	2.5
Net Debt/EBITDA	0.0	0.0	0.0	0.0	0.0	0.0
EPS pro forma	n.a.	0.46	0.06	0.62	1.13	2.13
EBITDA margin	22.4%	24.7%	13.2%	21.0%	26.0%	34.0%
ROCE	70.6%	37.0%	10.4%	30.1%	39.8%	51.5%
EV/sales	-0.0	6.5	2.6	1.8	1.2	0.7
EV/EBITDA	-0.2	26.4	20.0	8.6	4.6	2.1
PER	n.a.	28.3	203.7	21.1	11.5	6.1
Adjusted FCF yield	-266.3%	2.6%	2.0%	8.5%	15.4%	33.2%

Source: Company data, NuWays, Close price as of 26.05.2023

Estimates changes

	2023e	2024e	2025e
Sales	2%	2%	2%
EBIT	2%	2%	2%
EPS	2%	2%	2%

Comment on changes

• Changes reflect the slightly better than expected FY22 top-line.
• FY25e is introduced.

Sales (2020-25e)					EBIT margin (2020-25e)				ROCE (2020-25e)
12.0m							24.0%							80.0%
9.0m													60.0%
						18.0%
6.0m													40.0%
						12.0%
3.0m													20.0%
						6.0%
0.0m							0.0%							0.0%
2020	2021	2022	2023e	2024e	2025e	2020	2021	2022	2023e	2024e	2025e	2020	2021	2022	2023e	2024e	2025e
Source: NuWays Research					Source: NuWays Research					Source: NuWays Research
Company description											Guidance
VOQUZ is a leading developer and provider of Software Asset Management (SAM) solutions with a
clear focus on SAP license and authorization management.
					Analyst: Philipp Sennewald · E-Mail:[e-mail]					1

VOQUZ Labs AG

Preview / Review - 30.05.2023

Financials

Profit and loss (EUR m)	2020	2021	2022	2023e	2024e	2025e
Net sales	3.0	3.9	4.7	6.6	8.9	11.6
Sales growth	66.4%	31.3%	21.4%	40.0%	35.0%	30.0%
Increase/decrease in finished goods and work-in-process	0.2	0.3	0.2	0.5	0.6	0.8
Total sales	3.1	4.2	5.0	7.1	9.6	12.4
Other operating income	0.2	0.1	0.2	0.3	0.4	0.6
Material expenses	0.6	0.7	1.0	1.2	1.6	1.9
Personnel expenses	0.6	0.9	1.4	1.5	2.0	2.3
Other operating expenses	1.5	1.7	2.2	3.3	4.1	4.9
Total operating expenses	2.5	3.2	4.3	5.7	7.2	8.5
EBITDA	0.7	1.0	0.6	1.4	2.3	3.9
Depreciation	0.2	0.3	0.4	0.5	0.6	0.8
EBITA	0.5	0.6	0.3	0.9	1.7	3.2
Amortisation of goodwill	0.0	0.0	0.0	0.0	0.0	0.0
Amortisation of intangible assets	0.0	0.0	0.0	0.0	0.0	0.0
Impairment charges	0.0	0.0	0.0	0.0	0.0	0.0
EBIT (inc revaluation net)	0.5	0.6	0.3	0.9	1.7	3.2
Interest income	0.0	0.0	0.0	0.0	0.0	0.0
Interest expenses	0.0	-0.0	0.0	0.0	0.0	0.0
Investment income	0.0	0.0	0.0	0.0	0.0	0.0
Financial result	-0.0	0.0	-0.0	0.0	0.0	0.0
Recurring pretax income from continuing operations	0.4	0.6	0.3	0.9	1.7	3.2
Extraordinary income/loss	0.0	0.0	0.0	0.0	0.0	0.0
Earnings before taxes	0.4	0.6	0.3	0.9	1.7	3.2
Income tax expense	0.0	0.1	0.2	0.3	0.5	1.0
Net income from continuing operations	0.4	0.5	0.1	0.6	1.2	2.2
Income from discontinued operations (net of tax)	0.0	0.0	0.0	0.0	0.0	0.0
Net income	0.4	0.5	0.1	0.6	1.2	2.2
Minority interest	0.0	0.0	0.0	0.0	0.0	0.0
Net profit (reported)	0.4	0.5	0.1	0.6	1.2	2.2
Average number of shares	0.0	1.0	1.0	1.0	1.0	1.0
EPS reported	n.a.	0.46	0.06	0.62	1.13	2.13
Profit and loss (common size)	2020	2021	2022	2023e	2024e	2025e
Net sales	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
Sales growth	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Increase/decrease in finished goods and work-in-process	5.8%	7.1%	5.2%	7.0%	7.0%	7.0%
Total sales	105.8%	107.1%	105.2%	107.0%	107.0%	107.0%
Other operating income	5.3%	2.2%	3.7%	5.0%	5.0%	5.0%
Material expenses	18.8%	17.8%	20.3%	18.0%	18.0%	16.0%
Personnel expenses	19.7%	23.0%	28.9%	23.0%	22.0%	20.0%
Other operating expenses	50.1%	43.9%	46.6%	50.0%	46.0%	42.0%
Total operating expenses	83.4%	82.4%	92.0%	86.0%	81.0%	73.0%
EBITDA	22.4%	24.7%	13.2%	21.0%	26.0%	34.0%
Depreciation	7.1%	8.7%	7.7%	7.0%	7.0%	6.5%
EBITA	15.3%	15.9%	5.5%	14.0%	19.0%	27.5%
Amortisation of goodwill	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Amortisation of intangible assets	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Impairment charges	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
EBIT (inc revaluation net)	15.3%	15.9%	5.5%	14.0%	19.0%	27.5%
Interest income	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Interest expenses	0.1%	-0.2%	0.0%	0.0%	0.0%	0.0%
Investment income	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Financial result	neg.	0.2%	neg.	0.0%	0.0%	0.0%
Recurring pretax income from continuing operations	15.2%	16.1%	5.5%	14.0%	19.0%	27.5%
Extraordinary income/loss	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Earnings before taxes	15.2%	16.1%	5.5%	14.0%	19.0%	27.5%
Income tax expense	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Net income from continuing operations	14.8%	12.4%	1.4%	9.8%	13.3%	19.3%
Income from discontinued operations (net of tax)	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Net income	14.8%	12.4%	1.4%	9.8%	13.3%	19.3%
Minority interest	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Net profit (reported)	14.8%	12.4%	1.4%	9.8%	13.3%	19.3%
Source: Company data, NuWays
	NuWays AG					2

VOQUZ Labs AG

Preview / Review - 30.05.2023

Balance sheet (EUR m)	2020	2021	2022	2023e	2024e	2025e
Intangible assets	1.5	1.5	1.5	1.5	1.5	1.5
Property, plant and equipment	0.0	0.0	0.0	0.0	0.0	0.0
Financial assets	0.1	0.0	0.0	0.0	0.0	0.0

FIXED ASSETS	1.6	1.5	1.5	1.5	1.5	1.5
Inventories	0.0	0.0	0.0	0.1	0.1	0.1
Accounts receivable	1.0	1.8	2.5	2.7	3.1	3.2
Other assets and short-term financial assets	0.0	0.0	0.0	0.0	0.0	0.0
Liquid assets	0.1	1.0	0.3	1.0	2.3	4.8
Deferred taxes	0.0	0.0	0.0	0.0	0.0	0.0
Deferred charges and prepaid expenses	0.1	0.1	0.1	0.1	0.1	0.1
CURRENT ASSETS	1.2	2.9	3.0	4.0	5.7	8.3
TOTAL ASSETS	2.8	4.4	4.5	5.5	7.2	9.8
SHAREHOLDERS EQUITY	0.7	1.9	2.0	2.7	4.1	6.5
MINORITY INTEREST	0.0	0.0	0.0	0.0	0.0	0.0
Provisions for pensions and similar obligations	0.0	0.0	0.0	0.0	0.0	0.0
Other provisions and accrued liabilities	0.3	0.3	0.2	0.2	0.3	0.3
Short-term liabilities to banks	0.0	0.0	0.0	0.0	0.0	0.0
Accounts payable	0.3	0.4	0.5	0.6	0.9	1.1
Advance payments received on orders	0.0	0.0	0.0	0.0	0.0	0.0
Other liabilities (incl. from lease and rental contracts)	1.0	0.8	0.4	0.4	0.4	0.4
Deferred taxes	0.2	0.2	0.2	0.2	0.2	0.2
Deferred income	0.3	0.5	0.7	0.7	0.7	0.7
CURRENT LIABILITIES	1.3	1.2	0.9	1.0	1.2	1.5
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	2.8	4.4	4.5	5.5	7.2	9.8
Balance sheet (common size)	2020	2021	2022	2023e	2024e	2025e
Intangible assets	54.4%	34.1%	33.3%	27.1%	20.8%	15.2%
Property, plant and equipment	0.1%	0.0%	0.1%	0.1%	0.1%	0.1%
Financial assets	3.7%	0.0%	0.0%	0.0%	0.0%	0.0%
FIXED ASSETS	58.2%	34.2%	33.4%	27.3%	20.9%	15.2%
Inventories	1.1%	1.1%	0.0%	1.5%	1.6%	1.5%
Accounts receivable	34.6%	40.3%	56.7%	49.6%	42.7%	32.4%
Other assets and short-term financial assets	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Liquid assets	3.7%	21.8%	6.2%	18.8%	32.6%	49.3%
Deferred taxes	0.0%	0.8%	0.8%	0.7%	0.5%	0.4%
Deferred charges and prepaid expenses	2.4%	1.7%	2.7%	2.2%	1.7%	1.2%
CURRENT ASSETS	41.8%	65.8%	66.6%	72.7%	79.1%	84.8%
TOTAL ASSETS	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%
SHAREHOLDERS EQUITY	23.7%	44.3%	44.3%	48.5%	57.2%	65.9%
MINORITY INTEREST	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Provisions for pensions and similar obligations	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Other provisions and accrued liabilities	10.3%	7.5%	4.5%	4.2%	3.6%	2.8%
Short-term liabilities to banks	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Accounts payable	10.3%	8.3%	11.9%	11.6%	12.0%	11.3%
Advance payments received on orders	0.0%	0.5%	0.0%	0.0%	0.0%	0.0%
Other liabilities (incl. from lease and rental contracts)	37.3%	18.9%	8.4%	6.9%	5.2%	3.8%
Deferred taxes	7.8%	5.2%	5.3%	4.3%	3.3%	2.4%
Deferred income	10.6%	12.1%	15.7%	12.8%	9.8%	7.1%
CURRENT LIABILITIES	47.6%	27.7%	20.3%	18.4%	17.2%	15.2%
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	100.0%	100.0%	100.0%	100.0%	100.0%	100.0%

Source: Company data, NuWays

NuWays AG

3

VOQUZ Labs AG

Preview / Review - 30.05.2023

Cash flow statement (EUR m)	2020	2021	2022	2023e	2024e	2025e
Net profit/loss	0.4	0.5	0.1	0.6	1.2	2.2
Depreciation of fixed assets (incl. leases)	0.2	0.3	0.4	0.5	0.6	0.8
Amortisation of goodwill & intangible assets	0.0	0.0	0.0	0.0	0.0	0.0
Others	0.1	0.0	-0.6	0.0	0.0	0.0
Cash flow from operating activities	0.3	0.4	-0.1	0.8	1.5	2.8
Increase/decrease in inventory	0.3	0.5	0.0	-0.1	-0.0	-0.0
Increase/decrease in accounts receivable	-0.8	-0.8	-0.8	-0.2	-0.3	-0.1
Increase/decrease in accounts payable	0.2	0.1	0.2	0.1	0.2	0.3
Increase/decrease in other working capital positions	0.0	0.0	0.0	0.0	0.0	0.0
Increase/decrease in working capital	-0.2	-0.2	-0.6	-0.2	-0.1	0.1
Cash flow from operating activities	0.4	0.6	0.1	0.9	1.7	3.1
CAPEX	0.0	0.0	0.4	0.2	0.4	0.6
Payments for acquisitions	0.0	0.0	0.0	0.0	0.0	0.0
Financial investments	0.6	0.2	0.0	0.2	0.0	0.0
Income from asset disposals	0.0	0.0	0.0	0.0	0.0	0.0
Cash flow from investing activities	-0.6	-0.2	-0.4	-0.4	-0.4	-0.6
Cash flow before financing	-0.2	0.4	-0.3	0.6	1.3	2.5
Increase/decrease in debt position	0.0	0.0	0.2	0.2	0.0	0.0
Purchase of own shares	0.0	0.0	0.0	0.0	0.0	0.0
Capital measures	0.0	0.4	0.0	0.0	0.0	0.0
Dividends paid	0.0	0.0	0.0	0.0	0.0	0.0
Others	0.1	0.0	-0.6	0.0	0.0	0.0
Effects of exchange rate changes on cash	0.0	0.0	0.0	0.0	0.0	0.0
Cash flow from financing activities	0.1	0.4	-0.4	0.2	0.0	0.0
Increase/decrease in liquid assets	-0.0	0.8	-0.7	0.8	1.3	2.5
Liquid assets at end of period	0.1	1.0	0.3	1.0	2.3	4.8
Key ratios (EUR m)	2020	2021	2022	2023e	2024e	2025e
P&L growth analysis
Sales growth	66.4%	31.3%	21.4%	40.0%	35.0%	30.0%
EBITDA growth	414.2%	44.8%	-34.9%	122.2%	67.1%	70.0%
EBIT growth	-2326.0%	37.2%	-57.9%	254.8%	83.2%	88.2%
EPS growth	n.a.	n.a.	-86.1%	867.4%	83.2%	88.2%
Efficiency
Sales per employee	98.8	129.7	135.0	153.8	184.9	218.5
EBITDA per employee	22.1	32.0	17.9	32.3	48.1	74.3
No. employees (average)	30	30	35	43	48	53
Balance sheet analysis
Avg. working capital / sales	24.1%	26.5%	28.8%	27.2%	24.2%	18.9%
Inventory turnover (sales/inventory)	92.6	77.8	n.a.	80.0	80.0	80.0
Accounts receivable turnover	119.6	164.9	196.0	150.0	125.0	100.0
Accounts payable turnover	35.6	34.0	41.2	35.0	35.0	35.0
Cash flow analysis
Free cash flow	0.4	0.6	-0.3	0.8	1.3	2.5
Free cash flow/sales	13.6%	14.8%	-6.2%	11.3%	14.7%	21.6%
FCF / net profit	91.4%	119.3%	neg.	115.8%	110.2%	112.3%
Capex / sales	n.a.	n.a.	n.a.	n.a.	n.a.	n.a.
Solvency
Net debt	-0.1	-1.0	-0.1	-0.7	-2.0	-4.5
Net Debt/EBITDA	0.0	0.0	0.0	0.0	0.0	0.0
Dividend payout ratio	0.0%	0.0%	0.0%	0.0%	0.0%	0.0%
Interest paid / avg. debt	n.a.	-21.8%	0.6%	0.0%	0.0%	0.0%
Returns
ROCE	70.6%	37.0%	10.4%	30.1%	39.8%	51.5%
ROE	66.1%	25.0%	3.4%	24.4%	29.0%	34.5%
Adjusted FCF yield	-266.3%	2.6%	2.0%	8.5%	15.4%	33.2%
Dividend yield		-0.0%	-0.0%	-0.0%	-0.0%	-0.0%
DPS	0.0	0.0	0.0	0.0	0.0	0.0
EPS reported	n.a.	0.46	0.06	0.62	1.13	2.13
Average number of shares	0.0	1.0	1.0	1.0	1.0	1.0
Valuation ratios
P/BV	n.a.	7.1	6.9	5.1	3.3	2.1
EV/sales	-0.0	6.5	2.6	1.8	1.2	0.7
EV/EBITDA	-0.2	26.4	20.0	8.6	4.6	2.1
EV/EBIT	-0.2	40.8	47.9	12.9	6.3	2.5
Source: Company data, NuWays
	NuWays AG					4

VOQUZ Labs AG

Preview / Review - 30.05.2023

Disclosures

Disclosures regarding research publications of NuWays AG pursuant to section 85 of the German Securities Trading Act (WpHG)

Indication of conflict of interest

It is essential that any research recommendation is fairly presented and discloses interests of indicates relevant conflicts of interest. Pursuant to sec­ tion 85 of the German Securities Trading Act (WpHG) a research report has to point out possible conflicts of interest in connection with the analysed company. A conflict of interest is presumed to exist in particular if NuWays AG

1. or any other person belonging to the same group with it was part of a consortium within the past twelve months that issued the financial instru­ ments of the analysed company by way of a public offer.
2. or any other person belonging to the same group with it has entered into an agreement on the production of the research report with the analysed company.
3. or any other person belonging to the same group with it has been party to an agreement on the provision of investment banking services with the analysed company or have received services or a promise of services under the term of such an agreement within the past twelve month.
4. The analysed company holds 5% or more of the share capital of NuWays AG.
5. holds (a) a net short position or (b) a net long position of 0.5% of the outstanding share capital of the analysed company.
6. or any other person belonging to the same group with it is a market maker or liquidity provider in the financial instruments of the issuer.
7. or the analyst has any other significant financial interests relating to the analysed company such as, for example, exercising mandates in the interest of the analysed company.
8. The research report has been made available to the analysed company prior to its publication. Thereafter, only factual changes have been made to the report.

Conflicts of interest that existed at the time when this research report was published:

Company		Disclosures
VOQUZ Labs AG		2,8
Historical target price and rating changes for VOQUZ Labs AG
Company	Date	Analyst	Rating	Target Price	Close
VOQUZ Labs AG	24.04.2023	Sennewald, Philipp	Buy	EUR 32.00	EUR 13.00

NuWays AG

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