Claranova reported Q122 revenue of €88m (-2% y-o-y), slightly better than its end-September expectation of a 5% decline. Now that the transition to subscription licensing is complete, Avanquest is seeing revenue growth accelerate. PlanetArt saw organic revenue declines in the last two quarters, but management is confident of a return to growth in Q222. We have revised our forecasts to reflect FY21 results and the Q1 revenue update.

Reflecting the different business models and minority interests for each division, we continue to use a sum-of-the-parts approach to valuation. Using EV/sales multiples that reflect our views on the growth and profitability of each division and are conservative compared to the peer group averages, we calculate a valuation of €10.46 per share (down from €10.55 when we last wrote). In our view, consistent growth in revenues and margins towards the company's FY23 targets will be key to reducing the discount to peers. In the near term, resumption of growth in PlanetArt from Q222 and sustained profitable growth in Avanquest will be the key triggers.  

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