Leon's avatar
$18.4m follower assets
My portfolio: Epsilon Net Group
As promised yesterday, i will shortly present some of my holdings. Today i will start with my current biggest position: Epsilon Net Group ($EPSIL.AT)

Epsilon Net Group is a
  • rapidly growing group that has been a benchmark in software development for >20 years
  • Greek market leader in accounting office, HR & Payroll systems and e-invoicing solutions
  • 65 % owned by Founder & CEO
  • 75 % Revenue Growth & 80 % Earnings-Growth in Q1 '22 with EBITDA-Margins of over 33%
  • Guidance for FY '22: Revenue increase of over 50 % and EBITDA-Margin of over 30 %
  • Valued with EV/EBITDA of 13x


Prospects:

  • the increase of the annual revenue per customer, due to the new products & services presented, especially in their fast-growing e-invoicing segment
  • the leverage of the RECOVERY FUND's plans for the private sector, such as the action "Digital Transformation of Enterprises" and more specifically the program "Digital Tools for SMEs", which is expected to start in June, with a subsidy rate of 70% and grants of a total budget of €180,000,000
  • the continuity of the implementation of the targeted acquisitions program. It should be noted that the Group has significant liquidity and negative net debt, despite the continuous investments, acquisitions. The management of Epsilon Net has a great Track-record in acquiring great businesses at low valuations, driving the consolidation of the greek IT-Market



I think with these several optionalities for Epsilons Business, the company is able to continue its growth in the next years.

For further information I will link some research:

My first write-up about Epsilon:

The latest Investor Presentation

Research by Euroxx Securities

Research by Symmetry Invest
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The Thinking Investor's avatar
Interesting company. A few questions:
  1. What are historical growth rates in revenue and net income like?
  1. Do they maintain a high ROIC?
  1. What’s the TAM like for their acquisition program?

Thanks!
Leon's avatar
@thethinkinginvestor
  1. Revenue CAGR (18-21) has been 33% and Net income CAGR 83%
  1. ROIC increased from 7.1% in 2018 to 20.7% in 2021
  1. I don‘t have a concrete TAM number, but the Greek IT-market is highly fragmented and in the last call the management said they see multiple potential targets especially in vertical markets Epsilon is not that present in yet
The Thinking Investor's avatar
@mavix Thanks for the insights. I might have to do some more research on this on.

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