| At the end of the first half-year of 2023, Websolute Group reported revenues of € 10.32 million, a slight decrease of 1.8% compared to the results of 1H22A, in which revenues amounted to € 10.50 million. EBITDA came in at € 1.38 million, showing a marked increase (+54.8%) compared to 1H22A, in which it was equal to € 0.89 million. Similarly, the EBITDA margin went from 8.0% in 1H22A to 12.4% in the half-year under review. EBIT came in positive and equal to € 0.21 million, showing a marked increase compared to the negative result of € 0.08 million reported in 1H22A. The value of Net Income for 1H23A was similarly on the rise, coming in at € -0.10 million, compared to a result for 1H22A equal to € -0.21 million. The NFP for the first half-year of 2022 showed an improvement of 21.7% compared to the FY22A result (equal to € 3.24 million of debt), settling at a value of € 2.53 million of debt. In light of the results published in the half-year report for 1H23A, we have adjusted our estimates for both the current year and the coming years. In particular, we now estimate FY23E sales revenues of € 21.50 million and an adjusted EBITDA equal to € 4.00 million, corresponding to a margin of 17.4%. In the following years, we expect the sales value to rise to € 26.50 million (CAGR 22A-25E: 7.2%) in FY25E, with adjusted EBITDA equal to € 6 .10 million, corresponding to a margin of 21.8%. As regards the balance sheet, we estimate a cash positive NFP of € 2.87 million for FY25E. We conducted our valuation of the equity value of Websolute based on the DCF method and multiples of a sample of comparable companies. The DCF method (including, for prudential purposes, a specific risk of 2.5% in the calculation of the WACC) returned an equity value of € 52.5 million. Using market multiples, the equity value of Websolute was calculated as € 43.6 million. The result gives an average equity value of approximately € 48.1 million. The target price is € 4.70, BUY rating, and MEDIUM risk. |