beaconsmind announced already the second major customer win this quarter. Going forward, the Kamal Osman Jamjoon Group KOJ), a leading multi-channel retailer in the Middle East, will deploy the company’s innovative location-based marketing (LBM) solutions. KOJ operates as a franchise distributor in the fields of cosmetics, health, fashion and food. In total, KOJ has more than 600 stores in Saudi Arabia, UAE, Bahrain, Kuwait, Qatar, Oman, and Morocco.  

To begin with, the LBM solution from beaconsmind will be deployed at several stores operated by KOJ including the fast-food chain Subway and the cosmetics chain The Body Shop in Jeddah, Saudi Arabia as well as in Dubai, UAE. Afterwards, it is intended to expand the roll-out across the majority of KOJ locations. In fact, we estimate potential installation fees of € 0.6m plus annual recurring revenues of € 1.4m for the new partnership, given a conservative 20% analytics penetration (eNuW). A penetration of 50% would almost double the possible ARR to € 2.6m (eNuW).

Overall, beaconsmind looks well on track to grasp the promising growth opportunities in the LBM segment. In fact, we expect the company to deliver some dynamic top-line growth with a CAGR ‘22e-26’ of 125%, mainly driven by the continuous global Adidas rollout. On top, the scalability of the company’s SaaS business model should soon bear fruit, as we estimate beaconsmind to hit break even with an EBITDA of € 0.6m in 2023e.

Moreover, in combination with the company's last major deal with one of the world’s largest pizza chains, beaconsmind is continuously strengthening its position in the Middle East, as the region should provide the company with further growth opportunities. In fact, researchers estimate an annual market CAGR of 53% for LBM solutions in Saudi-Arabia until 2030.

On top of that, the takeover of Wi-Fi Hotspot provider Frederix should allow for significant sales synergies, as the combination with beaconsmind’s LBM solution offers customers the opportunity to increase the data-tracking efficiency even further.

The stock remains a BUY with an unchanged PT of € 30 based on DCF.