Mexedia S p A : Update coverage

U P D A T EE Q U I T Y R E S E A R C H

Mexedia

Euronext Growth Paris | TLC & Services | France

Production date 26/05/2023, h. 6:30 pm

Publishing date 29/05/2023, h. 7:00 am

Stocks performance relative to FTSE Italia Growth

Rating	Target Price
BUY	€ 46,00
prev. U/R	prev. U/R

Risk	Upside potential
Medium	28,5%

Key Financials (€/mln)	FY22A	FY23E	FY24E	FY25E
VoP	140,9	310,0	360,0	390,0
EBITDA	8,4	15,6	21,5	24,9
EBIT	8,4	14,8	20,8	24,2
Net Income	4,4	6,0	10,2	12,1
NFP	26,4	27,3	23,1	18,9
EBITDA margin	5,9%	5,0%	6,0%	6,4%
EBIT margin	5,9%	4,8%	5,8%	6,2%
Net Profit margin	3,1%	1,9%	2,8%	3,1%

110				400
100				350
90				300
80				250
				200
70				150
60				100
50				50
40				0
May-22	Aug-22	Nov-22	Feb-23	May-23
	ALMEX FP - Volume	ALMEX FP		ITAIM Index

Stock Data

Price	€ 35,80
Target price	€ 46,00
Upside/(Downside) potential	28,5%
Ticker	ALMEX FP
Market Cap (€/mln)	€ 204,06
EV (€/mln)	€ 230,44
Free Float	11,84%
Share Outstanding	5.700.000
52-week high	€ 45,00
52-week low	€ 25,00
Average daily volumes (3 months)	30

Mattia Petracca | [e-mail] Edoardo Luigi Pezzella | [e-mail]

Stock performance	1M	3M	6M	1Y
Absolute	21,77%	0,00%	-10,05%	-28,40%
to FTSE Italia Growth	22,84%	5,26%	-7,57%	-22,40%
to Euronext STAR Milan	23,98%	6,62%	-8,49%	-23,66%
to FTSE All-Share	24,42%	4,11%	-17,72%	-36,77%
to EUROSTOXX	23,56%	-0,51%	-18,54%	-45,15%
to MSCI World Index	21,15%	-2,76%	-14,86%	-33,71%
Main Ratios	FY22A	FY23E	FY24E	FY25E
EV/EBITDA	27,5 x	14,8 x	10,7 x	9,3 x
EV/EBIT	27,6 x	15,6 x	11,1 x	9,5 x
P/E	46,1 x	34,3 x	20,1 x	16,9 x

FY22A Results

In the 2022 financial year, Mexedia Group generated consolidated revenues amounting to € 140.90 million, up 6.9% compared to the FY21A figure. EBITDA, equal to € 8.37 mil- lion, saw an increase of 18.7%, compared to € 7.05 million in the previous year. The EBITDA Margin, equal to 5.9%, was also higher than the previous year's figure of 5.3%. EBIT, after amortization and depreciation of € 0.01 million, came in at € 8.36 million (€ 6.89 million in FY21A). Finally, the NFP came in at a debt value of € 26.38 million, worsening compared to the previous year's value (€ 18.40 million of debt).

Estimates Update

In light of the results published in the annual report for FY22A, and the recent acquisitions of PhoneTime Inc. and Matchcom Inc., we have revised our estimates for both the current year and the coming years. In particular, we now estimate an FY23E value of production of € 310.00 million, and an EBITDA of € 15.60 million, corresponding to a margin of 5.0%. In the following years, we expect the value of production to rise to € 490.00 million (CAGR 22Y-27E: 28.3%) in FY27E, with EBITDA equal to € 37.90 million (corresponding to a margin of 7.7%), up from € 8.37 million in FY22A (corresponding to an EBITDA Margin of 5.9%).

Valuation Update

We conducted our valuation of the equity value of Mexedia based on the DCF method. The DCF method (including, for prudential purposes, a specific risk of 2.50% in the calculation of the WACC) returned an equity value of € 262.2 million. The target price is € 46.00, with a BUY rating, and MEDIUM risk.

ALMEX FP

U P D A T E

BUY € 46,00

2

Economics & Financials

TABLE 1 - ECONOMICS & FINANCIALS

CONSOLIDATED INCOME STATEMENT (€/mln)	FY21A	FY22A	FY23E	FY24E	FY25E	FY26E	FY27E
Revenues	131,80	140,90	310,00	360,00	390,00	425,00	490,00
Other Revenues	0,00	0,00	0,00	0,00	0,00	0,00	0,00
Value of Production	131,80	140,90	310,00	360,00	390,00	425,00	490,00
Services	124,23	130,60	290,00	334,00	360,50	391,00	447,00
Employees	0,50	1,85	4,00	4,10	4,15	4,30	4,30
Other Operating Expenses	0,02	0,08	0,40	0,45	0,50	0,70	0,80
EBITDA	7,05	8,37	15,60	21,45	24,85	29,00	37,90
EBITDA Margin	5,3%	5,9%	5,0%	6,0%	6,4%	6,8%	7,7%
D&A	0,16	0,01	0,85	0,70	0,65	0,55	0,50
EBIT	6,89	8,36	14,75	20,75	24,20	28,45	37,40
EBIT Margin	5,2%	5,9%	4,8%	5,8%	6,2%	6,7%	7,6%
Financial Management	(3,45)	(3,41)	(6,20)	(6,40)	(6,60)	(6,60)	(6,60)
EBT	3,44	4,95	8,55	14,35	17,60	21,85	30,80
Taxes	0,48	0,52	2,60	4,20	5,50	6,30	8,50
Net Income	2,96	4,43	5,95	10,15	12,10	15,55	22,30
CONSOLIDATED BALANCE SHEET (€/mln)	FY21A	FY22A	FY23E	FY24E	FY25E	FY26E	FY27E
Fixed Assets	55,08	55,36	58,00	58,30	58,40	58,50	58,60
Account receivable	15,98	28,66	62,50	66,00	70,00	75,00	85,00
Account payable	2,73	4,10	23,50	26,50	28,00	30,00	31,00
Operating Working Capital	13,25	24,55	39,00	39,50	42,00	45,00	54,00
Other receivable	8,58	10,25	8,00	8,20	8,50	8,70	9,00
Other payable	0,50	1,05	26,00	21,00	16,00	9,50	4,00
Net Working Capital	21,33	33,75	21,00	26,70	34,50	44,20	59,00
Severance Indemnities & Other Provisions	0,02	0,06	0,10	0,10	0,10	0,10	0,10
NET INVESTED CAPITAL	76,39	89,05	78,90	84,90	92,80	102,60	117,50
Share Capital	57,00	57,00	57,00	57,00	57,00	57,00	57,00
Reserves	(1,97)	1,24	(11,33)	(5,38)	4,77	16,87	32,42
Net Income	2,96	4,43	5,95	10,15	12,10	15,55	22,30
Equity	57,99	62,67	51,62	61,77	73,87	89,42	111,72
Cash & Cash Equivalent	5,63	2,67	7,22	10,27	13,37	18,02	23,82
Short Term Debt to Bank	24,02	29,05	24,50	25,00	25,50	26,00	26,00
M/L Term Debt to Bank	0,00	0,00	10,00	8,40	6,80	5,20	3,60
Net Financial Position	18,40	26,38	27,28	23,13	18,93	13,18	5,78
SOURCES	76,39	89,05	78,90	84,90	92,80	102,60	117,50

ALMEX FP

U P D A T E

BUY € 46,00

3

CONSOLIDATED CASH FLOW (€/mln)	FY22A	FY23E	FY24E	FY25E	FY26E	FY27E
EBIT	8,36	14,75	20,75	24,20	28,45	37,40
Taxes	0,52	2,60	4,20	5,50	6,30	8,50
NOPAT	7,84	12,15	16,55	18,70	22,15	28,90
D&A	0,01	0,85	0,70	0,65	0,55	0,50
Change in receivable	(12,68)	(33,84)	(3,50)	(4,00)	(5,00)	(10,00)
Change in payable	1,38	19,40	3,00	1,50	2,00	1,00
Change in others	(1,12)	27,20	(5,20)	(5,30)	(6,70)	(5,80)
Change in NWC	(12,42)	12,75	(5,70)	(7,80)	(9,70)	(14,80)
Change in provisions	0,04	0,04	0,00	0,00	0,00	0,00
OPERATING CASH FLOW	(4,53)	25,79	11,55	11,55	13,00	14,60
Capex	(0,29)	(3,49)	(1,00)	(0,75)	(0,65)	(0,60)
FREE CASH FLOW	(4,82)	22,30	10,55	10,80	12,35	14,00
Financial Management	(3,41)	(6,20)	(6,40)	(6,60)	(6,60)	(6,60)
Change in Debt to Bank	5,02	5,45	(1,10)	(1,10)	(1,10)	(1,60)
Change in Equity	0,24	(17,00)	0,00	0,00	0,00	0,00
FREE CASH FLOW TO EQUITY	(2,96)	4,55	3,05	3,10	4,65	5,80

Source: Mexedia and Integrae SIM estimates

Company Overview

Mexedia, formerly known as Airtime Partecipazioni, is an Italian company active in the technology sector, and has been listed in France on the Euronext Growth Paris market since September 2021. The launch of the new Mexedia brand has opened up new business channels and projected the entire Group into a new phase of growth, driven by the recognition of Mexedia SpA on the market no longer as a holding company but as a real technological company offering an integrated range of services that are highly innovative, highly competitive and rigorously oriented to the urgent needs of sustainability.

The Group was born as a company active in the sale of electronic services (Voice and SMS) at an international level, but through a change of strategic positioning now offers a complete customer experience through innovative tailor-made solutions and a broad set of technological offerings that maximize cross-selling opportunities between various services.

In particular, the main activity of the Group, carried out exclusively through its Irish subsi- diary, is in the telecommunications sector. Mexedia offers innovative solutions and advanced tools in a single integrated technological ecosystem that allow companies to manage all of their communications activities with customers.

ALMEX FP

U P D A T E

BUY € 46,00

4

FY22A Results

TABLE 2 - ACTUAL VS ESTIMATES FY22A

€/mln	Revenues	EBITDA	EBITDA %	EBIT	Net Income	NFP
FY22A	140,90	8,37	5,9%	8,36	4,43	26,38
FY22E	N/A	N/A	N/A	N/A	N/A	N/A
Change	N/A	N/A	N/A	N/A	N/A	N/A

Source: Integrae SIM

Commenting on the annual results in a press release, Orlando Taddeo, CEO of Mexedia SpA SB, stated: "It has been a very positive year for Mexedia Group. The 2022 Annual Financial Report and the 2022 Annual Non-FinancialReport were approved today by the board of directors of Mexedia SpA Società Benefit [Italian Benefit Corp.]. The results obtained are sati- sfactory, and show increases in terms of margins and EBITDA. The development of Mexedia continued in 2022, and the consolidated results confirm the correct strategic vision and the validity of the activities carried out. All this allows us to look to the future with confidence, and aim for ambitious goals."

In the 2022 financial year, Mexedia Group generated consolidated revenues amounting to

• 140.90 million, up 6.9% compared to the FY21A figure, thanks to the consolidation of cu- stomer relationships and an increase in telephone traffic volumes. Furthermore, in 2022, the SMS traffic service was launched by the Group, which still has limited subscriber numbers but significant growth prospects.

EBITDA, equal to € 8.37 million, saw an increase of 18.7%, compared to € 7.05 million in the previous year. The EBITDA Margin, equal to 5.9%, was also higher than the previous year's figure of 5.3%. Margins were positively influenced by the optimization of procurement costs resulting from a series of negotiations with suppliers, particularly in relation to traffic routing with strategic countries such as Africa and Latin America.

EBIT, after amortization and depreciation of € 0.01 million, came in at € 8.36 million (€ 6.89 million in FY21A). The EBIT Margin came in at 5.9%, compared to an FY21A figure of 5.2%. Net Income was € 4.43 million, also up from € 2.96 million in FY21A.

Finally, the NFP came in at a debt value of € 26.38 million, worsening compared to the previous year's value (€ 18.40 million of debt). We note that the NFP was influenced by financial requirements related to the change in working capital, connected to the increase in turnover and consequent greater use of financial disinvestment instruments.

ALMEX FP

U P D A T E

BUY € 46,00

5