| The Value of Production came in at € 10.85 million, compared to a value of € 9.31 million recorded at the end of 2021, and to €11.00 million estimated in our previous report. EBITDA, equal to € 1.96 million, recorded an increase of 43.6%, compared to the € 1.37 million of the previous year, and slightly down on our previous estimate of € 2.15 million. The EBITDA Margin, equal to 18.1%, is higher than the figure for the previous year (14.7%), and slightly lower than our estimate (19.5%). The NFP Adjusted, including receivables from the European Union, on the other hand, was cash positive for an amount equal to € 2.92 million in FY22A (cash positive by € 2.48 million in FY21A). In light of the results published in the annual report for FY22A, we have adjusted our estimates for both the current year and the coming years. In particular, we estimate an FY23E Value of Production equal to € 14.50 million, and an EBITDA equal to € 2.75 million, corresponding to a margin of 19.0%. In the following years, we expect the Value of Production to rise to € 22.70 million (CAGR 22Y-26E: 20.3%) in FY26E, with EBITDA equal to € 5.00 million (corresponding to a margin of 22.0%), up from € 1.96 million in FY22A (corresponding to an EBITDA Margin of 18.1%). We conducted our valuation of the equity value of Circle 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 € 24.7 million. Using market multiples, the equity value of Circle was € 25.2 million (including a 25.0% discount). The result is an average equity value of approximately € 25.0 million. The target price is € 6.20, BUY rating and MEDIUM risk. |