EQS Group AG publishes third quarter results and lowers forecast for the 2019 financial year
Lower growth due to delays in onboarding. Already more than 120 customers have migrated to new COCKPIT

Munich - 14 November 2019

EQS Group AG (ISIN: DE0005494165) continued its positive corporate development in the first nine months of 2019 with more robust growth in the third quarter than in previous two quarters. Between July and September, the Group generated EUR 7.88 million in revenues. Adjusted for the sale of ARIVA.DE AG after the first half of 2019, this result represents a 15% increase over the same period the previous year. Factoring in accounting guidelines for leases in accordance with IFRS 16, EBITDA increased to EUR 499 thousand (adjusted EUR 41 thousand). Consolidated net income amounted to EUR 1.73 million due to the sale of ARIVA.DE AG. Earnings per share therefore amount to EUR 1.21.

The figures for the first nine months are as follows: revenues amount to EUR 26.58 million (+3%), EBITDA increased to EUR 649 thousand (adjusted: EUR -722 thousand) in accordance with IFRS 16, and consolidated net income amounted to EUR -722 thousand. Earnings per share amount to EUR -0.43 (previous year: EUR -1.59). Adjusted for the sale of ARIVA.DE AG, revenues increased by 12% to EUR 23.09 million. EBITDA amounted to EUR 392 thousand, compared to EUR -628 thousand in the same period the previous year.

Revenue grew by 12% (adjusted) in the first nine months of 2019, lower than expected. The postponed completion of certain CRM and mailing functions for the COCKPIT and Policy Manager resulted in delays in customer onboarding to the new platform and, as a result, in lower than expected revenue increases. A softening economy, with its lack of initial public offerings (IPO), has been an obstacle to compensating for these lower revenue increases. Both lower revenues from XML submissions and longer sales processes at Integrity Line have been additional burdens. On the cost side, total expenditures have increased at a lower rate than revenue for two consecutive quarters due to the timing of the investment program. This trend will continue in the coming quarters.

Segment development

In the first nine months of 2019, revenue increased in the Compliance segment by 12% to EUR 14.10 million (EUR 12.54 million). The number of Large Cap customers increased by 30 over the previous quarter for a total of 1,236 customers. There was an 1,969 increase in customers for the LEI service, for a total of 36,062, while the number of XML filing customers decreased on an annualized bases by 236, for a total of 4,013. Due to the sale of ARIVA.DE AG, revenues in the Investor Relations segment fell to EUR 12.48 million, a 7% decrease compared to the previous year's period (EUR 13.36 million). However, the number of customers increased by 29, for a total of 2,132.

EQS Group AG is achieving the goal it set in September 2017 to expand its business core to the adjacent Corporate Compliance segment. In doing so, the Group has launched an investment initiative to expand itself into a technology company. This undertaking has led to a temporary burden on earnings. EQS successfully launched the first version of its new COCKPIT in the fourth quarter of 2018 and completed the functionality of the CRM and mailing modules at the end of the third quarter of 2019. Since then, 127 customers have moved to the new COCKPIT.

Achim Weick, founder and CEO of EQS Group AG: "We are focused on the onboarding of our customers to the new COCKPIT and are confident that we will gain even more momentum in this process toward the end of the year, completing it by mid-2020. These steps will lead to a sustainable expansion of subscription revenues."

Annual recurring revenues at the Group level are at 84% in the third quarter. For the large caps in Germany, that number is 86%. This figure is based on a customer base of 1,217 Large Cap customers.

Forecast adjustment for the 2019 financial year

The delay in customer onboarding to the new COCKPIT has resulted in lower than planned revenue growth. The previously forecasted 18% to 25% increase in adjusted revenues has been lowered to an increase in revenues of between 10% to 15%.

EQS Group AG has sold its entire stake in ARIVA.DE AG effective July 1, 2019. The decision to do so was based on the Group's strategic focus on Corporate Compliance and Investor Relations. The deal closed in mid-July (deconsolidation as of July 1, 2019) and after the current lowering of the forecast the Executive Board plans revenues from between EUR 35.2 million and EUR 36.6 million (before: EUR 37.5 million and EUR 39.5 million). Adjusted revenue is expected at between EUR 31.7 million and EUR 33.1 million (previously: EUR 34 million to EUR 36 million).

Due to lower other operating expenses of approximately EUR 1.8 million as a result of the effects of IFRS 16 (Amendment to IFRS accounting guidelines for leases), we expect an EBITDA of between EUR 2.3 million and EUR 3.3 million (before: between EUR 2.8 million and EUR 3.8 million). Adjusted for the effects of IFRS 16, EBITDA is expected to be between EUR 0.5 million and EUR 1.5 million (before: between EUR 1 million and EUR 2 million).

We expect a volume of between EUR 3.2 million and EUR 3.6 million for the newly introduced New ARR key figure, which reflects newly contracted annual recurring sales volume (before: EUR 4 million). In addition, the number of new customers (Large Caps) is to increase between 310 and 350 (before: 400).

The Executive Board will discuss the results on November 15, 2019 on a telephone conference from 11.00 a.m. (CET). This will be broadcast live online at

*Limited comparability due to new IFRS Accounting for Leases (IFRS 16) as of Jan. 1, 2019

*Limited comparability due to new IFRS Accounting for Leases (IFRS 16) as of Jan. 1, 2019

*Limited comparability due to new IFRS Accounting for Leases (IFRS 16) as of Jan. 1, 2019

More information:

The figures for 9M 2019 are unaudited.

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EQS Group is a leading international provider of regulatory technology (RegTech) in the fields of corporate compliance and investor relations. In working with EQS Group, thousands of companies worldwide inspire trust by fulfilling complex national and international disclosure obligations, minimizing risks and communicating transparently with stakeholders.

EQS Group's products are pooled in the cloud-based software EQS COCKPIT. They ensure the professional control of compliance workflows in the fields of whistleblower protection and case management, policy management, insider list management and disclosure obligations. 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 over 350 professionals and has offices in the world's key financial markets.

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André Marques

CFO

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