Yesterday, VOQUZ published reassuring 2023 order intake figures, pointing towards improved operations in the second half of the year.

Total order intake increased by 11.5% yoy to € 5.5m with recurring orders accounting for a solid 58% (€ 3.2m). The share of product related sales slightly declined to 73% (-6.1pp yoy), while the proportion of orders from SAP license management stood at 85% (-4.3pp yoy) stemming from samQ (eNuW: 75%) and the company´s new product visoryQ (eNuW: 10%). 

Overall, this indicates sequential improvements in H2´23 after a rather lackluster operating performance in H1´23 with only 3% sales growth and negative EBTIDA (€ -0.5m). In fact, we expect an acceleration in top-line growth to 6% on a FY basis as well as a containment of the EBTIDA loss to only € -0.2m. Given the compelling order intake, these estimates could even serve as conservative in the end. That said, we expect management to put out preliminary FY23 figures in the course of Q1.

While 2023 has to be seen as a transition year, VOQUZ’ compelling mid-term prospects remain fully intact: On the one hand, the still lagging SAP S/4HANA transition - only 1/3 of customer adapted the new ERP software so far - should provide tailwinds going forward. Mind you, SAP-ERP customers must switch from ECC to S/4HANA until 2027 when the mainstream maintenance fades out, which should in turn lead to exponentially increasing adoption rates in the coming quarters. Even though capacities are not unlimited, VOQUZ looks set to be one of the main beneficiaries, especially thanks to its new software visoryQ, which helps clients to set up an efficient ERP strategy. According to management, the new product is perceived well by the market, allowing for significant cross-selling with the company's legacy software samQ, which gets visible in a continuously strong current trading.

Against this backdrop, the company should be well positioned to return to double-digit top-line growth (eNuW: +14.5% yoy), positive EBITDA (€ 0.6m) as well as FCF generation (€ 0.5m) in 2024e.

Given the recent weakness as well as the strong underlying mid-term trends combined with the scalability of the capital-light business model, valuation continues to look undemanding with shares trading at only 1.3x EV/Sales ‘23e. We hence reiterate BUY with an unchanged PT of € 20.00 based on DCF.