DGAP-News: EQS Group AG with strong Q3 2021

Integration of Business Keeper GmbH progressing very well

- 227 new SaaS customers in the third quarter (previous year 58)

- Revenue grows by 40 percent

- EBITDA above target with €946k (previous year €1.3 million)

- Earnings target already achieved after nine months

- 9M New ARR rises by 47% to €5.91 million

- Total SaaS customer base increases by 50% to 3,871

- Fast pace in the integration of Business Keeper GmbH

Munich - November 12, 2021

EQS Group AG (ISIN: DE0005494165) reports a very good Q3 2021, reaching the earnings target corridor for the full year ahead of schedule. In the months of July to September, the Group generated sales revenue of €12.87 million (previous year €9.17 million). That means an increase of 40 percent compared to the same period in the previous year. EBITDA declined as expected to €946k (previous year €1.3 million). Consolidated net income for the year stood at €-1.35 million. The earnings per share amounted accordingly to €-0.16.

For the new ARR indicator, which quantifies the new contractually agreed, annually recurring revenue, a volume of €5.91 million is calculated (€4.03 million). The number of new SaaS customers is 594 after nine months.

The rest of the picture for the first nine months is as follows: revenues amounted to €35.40 million (€27.62 million), EBITDA declined to €2.27 million (€4.30 million), and consolidated net income was €-2.68 million. The earnings per share was €-0.33 (previous year €0.07).

The Group's revenue growth in the first nine months is in line with expectations and characterised by a significant increase in the sale of compliance cloud products. The acquisitions of Business Keeper GmbH, Got Ethics A/S and C2S2 GmbH made a contribution of €4.10 million. Further growth momentum was provided by the ESEF regulation which was applied for the first time for the filing of financial reports by listed companies.

The national legislation on the mandatory introduction of an internal reporting channel for companies in the European Union by the end of 2021 is being postponed in numerous member states. For our most important market, Germany, we are expecting implementation after the new federal government takes up its official duties. While the acquisition of customers from corporate groups through our own sales force is proceeding as expected, acquisition of customers from SMEs by sales partners has not yet started due to the lack of legislation. Therefore, the key figure for new customers is significantly below our expectation, which assumed implementation into national law by the deadline. Revenues and new ARR, on the other hand, are less affected by this and remain on target.

Expenses for sales and marketing have most recently been slightly curbed in view of the postponed implementation of the European Whistleblower Directive, but gradually increased overall from the beginning of the year to create the best possible starting position for customer acquisitions. This is leading to a temporary strain on earnings. Adjusted for these increased additional expenses, EBITDA amounted to €4.70 million.

Segment development

Revenue in the Compliance segment rose in the first nine months by 45 percent. In the Investor Relations segment, revenue went up by 10 percent. The annual recurring revenue at Group level was 86%.

Acquisition of Business Keeper GmbH

With the acquisition of Business Keeper GmbH, EQS Group AG advanced to become the leading European cloud provider for whistleblowing systems. The purchase agreement was signed in June and the transaction was successfully concluded in July. The integration teams, taking into account the previous acquisitions Got Ethics A/S and C2S2 GmbH, have identified the best set-up for the Group as a whole and integration measures have already been completed, particularly in the areas of sales and marketing, in order to leverage the potential for compliance cloud products to the max. technical integration is expected to take longer.

Achim Weick, Founder and CEO of the EQS Group AG: "With the acquisition and integration of Business Keeper, all of us at EQS feel a sense of optimism to shape and further develop the European market leader for whistleblowing systems in the cloud. The Whistleblowing Report 2021, initiated by us and compiled by the University of Applied Sciences of the Grisons, once again shows how important an efficient reporting system is for uncovering wrongdoing and what a great contribution it makes to an ethical corporate culture. This was also the consensus among the approximately 5,000 participants at the largest European compliance conference, the ECEC. Hosting the European Compliance & Ethics Conference and receiving fabulous feedback on the event was further confirmation from the international compliance community that we are on the right track."

Forecast for the 2021 financial year

For the financial year 2021, the Management Board is still planning an increase in sales of 30 to 40 percent to then €49 million to €53 million. Investments in sales and marketing for the acquisition of new customers in connection with the implementation of the EU Directive on the protection of whistleblowers will be reallocated together with Business Keeper GmbH. EBITDA is expected to be in the range of €2 million to €3 million. For the new ARR performance indicator, which quantifies the newly contracted, annually recurring revenue, we continue to expect a volume of €9 million, despite the emerging postponement of the implementation of the European Whistleblower Directive in Germany, with a lower number of new customers from around 900 companies.

The Executive Board will be explaining the business results in a video conference from 11.00 a.m. (CET). Login is not necessary. It will be broadcast live online at 9M 2021 Results (webcast-eqs.com). Questions can be asked using the Q&A feature (chat) beforehand or during the webcast.

* EBITDA adjusted for additional expenses into Marketing and Sales

** Prior-year figures partly adjusted. We refer to Point 2.4 Changes in the previous year's figures in the notes of the annual report 2020

*** For a better comparison, net interest is reported in Cash flow from financing activities. The prior-year figures have been adjusted accordingly

More information:

The figures for 9M 2021 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, business approvals, third party 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 more than 550 professionals and has offices in the world's key financial markets.

Contact:

André Marques

CFO

Tel.: +49 89-444430033

Mobile: +49 175-5250009

Email.: [email protected]