The negative performance divergence between EGM and FTSE Italia All Shares widens.

In 2023, EGM surpassed 200 companies with 34 new IPOs, up from 26 listings in 2022. Total capitalization exceeded €9 billion, but averaged just below €40 million.

In 2023, the negative performance divergence compared to the FTSE Italia All Shares widened due to 1) limited liquidity; 2) loss of some benefits; 3) alternative financial activities that are more profitable as they are linked to the trend in interest rates.

Since 2021, EGM companies have shown growing revenues which are expected to continue in the three-year period 2023-2025 at an average rate above 15%, the EBITDA margin is estimated to recover already in 2023 until exceeding 2021 levels this year. Compared to our latest EGM Quarterly Report, consensus has lowered revenue and EBITDA expectations for 2023 and 2024.

Growth continues to be partly supported by M&A activity: in the last two years, on average, around 60 deals have been concluded.

What is needed to make a market segment that hosts Italian SMEs with high growth potential and good margins attractive? Find out the report by Francesca Sabatini, Head of Equity Research, and Michele Calusa, Equity Research Analyst of Banca Profilo.