DGAP-News: EQS Group AG expands strategic focus and becomes ESG technology provider

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EQS Group AG expands strategic focus and becomes ESG technology provider

Sustainability pioneer DFGE to become part of EQS Group AG - letter of intent to purchase signed today

Munich - 17.02.2022

EQS Group AG (ISIN: DE0005494165) expands its strategic focus to include solutions in the area of sustainability and become an ESG technology provider. Its immediate market entry succeeds with the planned acquisition of 100 percent of the shares in DFGE, a pioneer and leading provider in the field of life cycle assessment, sustainability calculation and corporate social responsibility with over 20 years of expertise. With the expansion of its business activities, EQS Group AG is positioning itself in the multi-billion ESG future market.

EQS Group AG today signed an exclusive letter of intent to acquire 100 percent of the shares in DFGE Institute for Energy, Ecology and Economy GmbH. DFGE was founded in 1999 by Dr.-Ing. Thomas Fleissner and Dr.-Ing. Thomas Dreier as a spin-off of the Technical University of Munich and supports companies in developing their climate strategy and fulfilling their responsibility for sustainable business. Its more than 180 customers include numerous DAX-listed companies. DFGE employs over 25 people at two locations.

After EQS Group AG was founded in 2000 as a pioneer in online investor relations, the Governance, Risk & Compliance business segment was added in 2017. As a partner to more than 8,000 companies, the EQS success formula of summarising complex regulations in simple workflows with the help of cloud solutions and generating additional added value for those responsible, will also be the growth driver in the new ESG business segment. Not only the strong global increase in environmental and social awareness, but also new legislative initiatives worldwide act as a catalyst for the sustainability megatrend.

The European Union is establishing a new legal framework for a sustainable economy, in particular with a view to climate change, in order to achieve the goal of climate neutrality in 2050. Environmental, social and governance criteria and standards are the focus here. These must be disclosed in future. The European Union is therefore introducing an obligation to report non-financial sustainability indicators with the Corporate Sustainability Reporting Directive (CSRD). The EU directive is slated to apply as early as January 2024 for the 2023 financial year. About 50,000 companies with at least 250 employees are affected. The target group is therefore almost congruent with the European Whistleblower Directive and offers EQS sales synergies along the entire value chain.

Under the new reporting obligation, these companies will for the first time be engaged in collecting data on, for example, their carbon footprint, diversity and business ethics in line with the EU taxonomy for sustainable business activities, which will serve as the basis for preparing the sustainability report. The report is then to be disclosed in a standardised format to a national business register, which also enables the automated reading of key figures.

Achim Weick, Founder and CEO of the EQS Group AG: "EQS Group's success story is inextricably linked to Social and Governance legislation and regulation, with us having developed numerous market-leading SaaS products to meet these standards and criteria. You could therefore say that the CSRD is made for us. For this reason, the logical step is to offer our customers holistic ESG solutions in the future, which also include the Environmental aspect. For EQS, this is the entry into a new growth market that promises the largest sales potential in our company's history so far."

EQS Group AG will initially develop a software solution with which companies can calculate key figures such as the carbon footprint and easily and reliably meet their reporting obligations in accordance with the CSRD. This is to be based on scientific models and on the many years of experience with over 700 successfully completed DFGE sustainability consultancy projects. The cloud application, which is expected to be available by the middle of the year, will also become the core of the ESG COCKPIT.

Dr.-Ing. Thomas Fleissner, founder and managing director of DFGE GmbH: "DFGE has always seen itself as a solution provider for sustainability with a scientific approach. Companies are facing major challenges in complying with the European Union's complex legal framework for ESG. Together with EQS Group AG, we now have the opportunity to become pioneers in software-based sustainability management."

Outlook


The initial software solution is being developed with our own resources. EQS Group AG therefore confirms its outlook for the 2022 financial year and the medium-term target for 2025.

Strong growth in 2022

For the 2022 financial year, the Management Board is planning an increase in revenues of 30 to 50 percent resulting in EUR 65 million to EUR 75 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 remain high. EBITDA is expected to be in the range of EUR 6 million to EUR 10 million. For the key figure new ARR, which quantifies the contractually concluded annually recurring business volume, we expect a volume of EUR 11 million to EUR 16 million. In addition, 2,500 to 3,500 new customers are to be acquired, the majority of them for the product area of whistleblower systems. The outlook is based on the assumption that the EU Directive will be transposed into German legislation in the course of the first half of 2022.

Medium-term target for 2025 confirmed

EQS Group AG confirms its target of achieving revenues of around EUR 130 million in the 2025 financial year with an EBITDA margin of at least 30 percent.

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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]