EUR 150.00 For Business Accounts Only

Real Consulting | Visibility on mid-term growth remains clear; stay the course

On track for >40% yoy EBITDA growth in 2024e – Following a very robust H1’24 (revenues +43%, EBITDA +40%), we anticipate an equally strong H2’24 performance from RC, expecting the group to continue capitalizing on its SaaS transition initiative and the securing of new installation contracts. Based on the project pipeline, we expect H2 top line to be driven by private sector contracts, in line with the H1 trend. We project H2’24 revenues at €19.6m (+19% yoy) and EBITDA at €4.1m (+46% yoy), corresponding to a robust EBITDA margin of c21% (vs. 16% in H1’24) indicative of more favorable mix from upselling to the installed base and scale effects from new hires in H1.

Unique positioning within the VAR cohort; Greek IT market facing structural shift – RC is uniquely positioned to benefit from the structural transformation of the Greek IT market, leveraging its status as a leading SAP/Microsoft partner to deliver enterprise solutions. Its focus on large companies ensures exposure to high-value projects, allowing RC to build a high-quality pipeline which we expect will drive recurring earnings growth through to the medium term.

Upselling, SaaS transition of portfolio to drive c23% EBITDA CAGR through 2027e – We maintain our forecasts for 2024e largely unchanged, expecting strong H2 performance to drive FY’24 revenue to €39.4m (+30% yoy) and EBITDA to €7.2m (+43% yoy). Looking ahead, we continue to model c18% revenue CAGR over 2024-27e, as the group benefits from country-wide demand tailwinds supporting tech upgrades. In terms of revenue generation, the project pipeline indicates that growth will come primarily from private sector contracts over the 4-yr period, with an additional c€30m boost from large ongoing Greek state contracts. We expect this robust revenue trajectory to translate into c23% EBITDA CAGR through 2027e, with margins reaching c20% by the end of the period, buoyed by operating leverage from the migration of the solution portfolio to cloud and higher contributions from aftersales.

Low leverage, cash generation and growing scale make for a flexible balance sheet – With greater milestone inflows expected in 2024e, we anticipate RC’s net cash position will exceed €5m by year-end. Looking ahead, based on our estimates for an accelerating recurring base, we project RC to generate FCF >€6m p.a. from 2026e on, providing ample flexibility for acquisitions, reinvestment for scale, or enhanced returns. Assuming no effects from M&A, our model forecasts RC’s net cash position at €20m in 2027e.

Valuation – RC remains well below its March 2024 peak and continues to trade at