First Berlin – ad pepper media International N.V. Research Update (01/04/2019)

First Berlin Equity Research has published a research update on ad pepper media International N.V. (ISIN: NL0000238145). Analyst Dr. Karsten von Blumenthal reiterated his BUY rating and maintained his EUR 3.00 price target.

Final 2018 figures matched the preliminary numbers. Revenue grew 8% to €20.3m. EBITDA, however, declined from €2.2m to €1.4m due mainly to one-off costs for restructuring the ad agents subsidiary. ad pepper is guiding towards higher gross sales, net revenues, and EBITDA than in the previous year. Despite the disappointing performance in 2018, we believe that the basic growth drivers (growing online advertising budgets, digitisation of consumer behaviour, strong consumer spending) are intact. ad peppers's high operating leverage means that growth translates into increasing EBITDA margins. Apart from slower global growth, we view a no-deal Brexit as the main risk in 2019, as the Webgains subsidiary generates ca. 56% of its revenue in the UK. An updated DCF model still yields a €3.00 price target. We reiterate our Buy rating.