Slide 1: EGM Analysis – 2024
EGM Analysis – 2024 20 January 2025 Banca Profilo Research Francesca R. Sabatini – Head of Equity Research Enrico Luca, CFA – Equity Research Analyst Michele Calusa - Equity Research Analyst
Slide 2: Agenda
Agenda EGM ALL COMPANIES 2024 NEW LISTINGS 2
Slide 3: EGM 2024 Facts & Figures
EGM 2024 Facts & Figures Euronext Growth Milan is dedicated to dynamic and competitive listed SMEs ● As of the end of December 2024, the number of EGM companies rose to 210 from 200 a year earlier seeking capital to finance growth through a balanced regulatory ● Over the year, the number of new EGM
Slide 4: From Small to Micro caps
EGM - From Small to Micro caps At the end of December, 88% of EGM (vs 89% yoy) companies had a market capitalization below €100mln, with 55% (vs 48% yoy) falling below the €25mln threshold. A similar distribution in terms of revenue: in FY23, 87% of EGM companies reported revenue below €100mln, with
Slide 5: Best and worst performers
EGM - Best and worst performers In 2024, the average performance of EGM-listed companies was negative by almost 9%. Ucapital24 was the best performers whereas Cia Dei Caraibi showed the biggest decline. Cia Dei Caraibi Ucapital24 Cloudia Research Eviso Neosperience RES Portobello Bellini Nautica Dot
Slide 6: Performance since IPO
EGM - Performance since IPO Since their IPO, over 60% of EGM companies have experienced negative performance. Adventure, which debuted last August, FOPE and ABC Co are among top perfomers since their IPO. 30 Adventure 25 FOPE ABC Co 20 # of Companies Powersoft 15 Eviso Redelfi 10 Growens 5 ALA 0 Acq
Slide 7: Growth and profitability
EGM - Growth and profitability In 1H24, 59% of EGM (vs 74% in FY23) companies reported a yoy Revenue growth. The average revenue growth was 7% (vs 14% in FY23). 36% (vs 45% in FY23) of them showed an EBITDA margin exceeding 15%. 1H24 FY23 1H24 FY23 50% 47% 35% 45% 43% 30% 30% 40% 27% 35% 25% % of Co
Slide 8: Liquidity
EGM - Liquidity Liquidity remains the central concern for the EGM. In 2024, liquidity deteriorated further, with 74% of companies trading less than 0.1% of their market capitalization (vs 51% in 2023). In 4Q24 the average daily traded value dropped to €33.2k from €48.3k over the full year. 60% 56% A
Slide 9: EGM – Tender offers and delistings
EGM – Tender offers and delistings Market net growth in issuers has slowed since 2021, with just 10 new companies in 2024. Delistings have increased, with 28 companies leaving the EGM in the past two years, compared to 16 in the previous three. This highlights the reduced appeal of EGM, where the co
Slide 10: EGM – Record M&A deals in 2024
EGM – Record M&A deals in 2024 Over the past 5 years, aside from the pandemic-related downturn, M&A activity has grown steadily, reaching a record 101 deals in 2024. This trend highlights the dynamism of EGM companies, which continue to expand through acquisitions. Notably, the 4Q24 marked the most
Slide 11: Signs of stabilization
EGM - Signs of stabilization After reaching a record high of 11,551 in January 2022, the FTSE Italia Growth Index experienced a liquidity crisis, bottoming out at 7,594 in late October 2023. Since then, it has partially recovered and recently stabilized around 8,000 points for: (i) undemanding valua
Slide 12: EGM – Overperforming Euronext Growth indexes
EGM – Overperforming Euronext Growth indexes Not only has the FTSE Italia Growth index has outperformed the Euronext Growth All Shares index over the past three years (-31.2% vs - 40.1% respectively) but it also confirmed its superior performance in 2024 (-4.8% vs -10.6% respectively) when its Europ
Slide 13: Euronext Growth in Europe - Comparing market multiples
Euronext Growth in Europe - Comparing market multiples Even in terms of valuations, over the past three years the FTSE Italia Growth has showed a median EV/Sales and P/E higher than those of the Euronext Growth All-Share. 2.5 25 2.0 20 1.5 15 1.0 10 0.5 5 0.0 0 urone t rowth ll hare talia rowth uron
Slide 14: Estimates unchanged
EGM - Estimates unchanged In our October EGM report, consensus estimates for 2024-2026 revenue and EBITDA were revised downward after weak 1H24 results. Since then, projections have remained steady, with revenue expected to grow at a 13% 2023-26 CAGR and margins forecast to improve by 300bps on aver
Slide 15: Sectors market multiples 1-year trend
EGM - Sectors market multiples 1-year trend In the last 12 months, the median EGM EV/EBITDA 1-year forward increased from 5.4x to 5.7x. Health Care saw the largest 12M re-rating, from 4.4x to 5.4x, followed by Consumer Discretionary up from 5.3x to 6.1x The sectors which saw a de-rating were Basic M
Slide 16: Sector market multiples. Moving towards 2025
EGM - Sector market multiples. Moving towards 2025 s of end e ember 2024 shows a median V/ 2024 of .1 (vs previous .0 ). While awaiting issuers’ Y24 results we turn our attention to the market's EV/EBITDA 2025E multiple, which remains unchanged at a median of 4.9x since October. Among sectors, Energ
Slide 17: Agenda
Agenda EGM ALL COMPANIES 2024 NEW LISTINGS 17
Slide 18: New listings by sector and market cap
EGM - New listings by sector and market cap In 2024 there have been 21 IPOs on the EGM market, down from 34 in 2023. Industrials remained as the dominant sector. 4Q24 3Q24 2Q24 1Q24 450 Utilities Health 1 Care 400 Consumer 1 Staples 350 1 Industrials 300 Technology 7 4Q: 4 1Q: 5 250 €/mln 2 200 Ener
Slide 19: New listings by revenue and margin
EGM - New listings by revenue and margin 4Q24 3Q24 2Q24 1Q24 EBITDA EBITDA Margin 140 45 60% 40 120 50% 35 100 30 40% 80 25 €/mln €/mln 30% 60 20 15 20% 40 10 20 10% 5 0 0 0% 2024 IPOs by FY23 sales 2024 IPOs by 2023 EBITDA and EBITDA margin 19 Source: Bloomberg- *IPOs of financials were excluded.
Slide 20: Best performers since IPO
EGM - Best performers since IPO 1070% 950% 870% 670% 470% 270% 160% 70% 70% 50% 50% 39% 33% 30% 23% 17% 10% 4% 3% 0% 0% 0% -10% 0% 0% -1% -4% -4% -12% -18% -18% -30% -33% -50% Performance since IPO 20 Source: Bloomberg
Slide 21: References
References Francesca Sabatini francesca.sabatini@bancaprofilo.it Head of Equity Research Tel. +39 02 58408.461 Enrico Luca, CFA enrico.luca@bancaprofilo.it Equity Research Analyst Tel. +39 02 58408.752 Michele Calusa michele.calusa@bancaprofilo.it Equity Research Analyst Tel. +39 02 58408.784 Via Ce
Slide 22: Disclaimer
Disclaimer ANALYST’S AND BANK’S INFORMATION R Y R W PL Y Y PR L .P. . (“ K”) L LY T; FRANCESCA SABATINI IS RESPONSIBLE FOR THE DRAFTING OF THE DOCUMENT. BANCA PROFILO S.P.A. IS A BANK AUTHORISED TO PERFORM BANKING AND INVESTMENT SERVICES; IT IS PART OF BANCA PROFILO BANKING GROUP ( “ R P”) -ORDINATI