Topic: We hosted a digital roadshow with the CEO, Martin Kögel. Here are the key takeaways:

• Outlook confirmed: On the back of a strong Q2 trading, Mr. Kögel reiterated the company’s target to keep sales growth at a steady pace. Mind you, that the company grew its top-line at 32% p.a. (2017-’22). This is sensible, in our view, as the company looks set to growrevenues in 2023 by 40% yoy to € 6.6m (eNuW). This looks set to be driven by further key customer wins for the company’s flagship solution samQ, a c. € 1m contribution of its newest product development visoryQ as well as the initial consolidation of the remedyne software, which will be marketed under the name remQ (eNuW: € 0.5m sales in FY23e) going forward.
• 20%+ EBITDA margins in reach: After we have seen a dip in profitability in 2022, which was mainly due to investments into the newly set up Singapore entity as well as one-offs to the tune of € 0.2m. For FY23e, we expect a significant margin expansion (+8.5pp yoy) based on a high share of recurring revenues and an excellent profitability in the consulting business (eNuW: > 50% EBIT margin). Against this backdrop, VOQUZ should be able to reach the mid-term target of >20% EBITDA margin (eNuW: 21% vs 19% adj. margin in 2022) already in FY23e.
• M&A: While the acquisition of remedyne in January 2023 marked the starting point for the pursued buy and build strategy, VOQUZ is already screening the market for further opportunities. Here, VOQUZ aims to acquire companies that provide an internationally applicable solution without a specific industry focus. In order to facilitate the portfolio integration, VOQUZ is looking to add further SAP-add ons, which should in turn also allow for high cross-selling potentials. Potential targets should already be profitable with revenues of € 2-3m (eNuW).

Overall, VOQUZ looks well positioned to grasp the promising opportunities of the increasing demand for Software Asset Management Solutions. Moreover, with its new product visoryQ, the company should benefit from the upcoming SAP S/4 HANA transformation wave, which is starting to gain momentum.

Considering the promising growth prospects of the company as well as the high scalability of the business model, the stock looks undervalued trading at only 8.6x EV/EBITDA ‘23e. We hence reiterate BUY with an unchanged PT of € 32.00 based on DCF.