Original-Research: INDUS Holding AG (von NuWays AG): Buy

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Original-Research: INDUS Holding AG - from NuWays AG

19.11.2024 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQS

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Classification of NuWays AG to INDUS Holding AG

Company Name: INDUS Holding AG

ISIN: DE0006200108

Reason for the research: Update

Recommendation: Buy

from: 19.11.2024

Target price: EUR 34.00

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

RT feedback: Strong FCF and well filled M&A pipeline

Topic: On Monday we hosted a digital roundtable with INDUS, here are our key

takeaways.

M&A pipeline well filled: INDUS expects to see another deal to sign within

the Infrastructure segment this year. However, the purchase price is likely

not to be paid until FY25e. Further, INDUS has in prospect to spend around EUR

50-70m on M&A next year. Considering the recent decline in acquisition

multiples for German SME's, it is now a good time for INDUS to expand its

portfolio in our view.

Infrastructure shows a solid development in FY24 (10.2% EBIT margin in 9M,

.9ppts yoy), which is expected to continue for FY25e. In addition, the

Engineering segment should improve at least slightly next year. As

communicated by management in the Q2 CC, product mix in H2'24e is much more

favorable than in H1. Consequently, the operating margin in Q3 already

improved considerably compared to H1'24 (9.0% vs. 5.2% in H1). In our view

H2'24e should be a better reference point for FY25e than the muted H1.

On the other hand, Materials should be more challenging next year. While the

medical companies show resilience, companies in the metal production and

processing sectors are more affected by the current difficult macro

environment. In addition, order backlog in Materials decreased over the last

year, which puts further pressure on the top-line (EUR 120m backlog in 9M'24

vs. EUR 153m end of FY23).

Strong Free Cashflows: INDUS continues to expect above EUR 110m in FCF this

year (eNuW: EUR 115m), delivering a strong FCFY'24e of c. 10% (eNuW). Beyond

that, a further reduction in working capital for FY25e looks plausible,

which is however dependent on the sales development next year. This should

support free cashflows in FY25e. Already in 9M, working capital decreased c.

EUR 33m yoy to EUR 506m (vs. EUR 538m end of 9M'23; EUR 618m end of 9M'22), thanks

to an ease of supply chains, muted sales growth and an active working

capital management.

We continue to like the stock and confirm INDUS as one of NuWays' Alpha

Picks. Reiterate BUY with an unchanged PT of EUR 34, based in FCFY'24e.

You can download the research here: http://www.more-ir.de/d/31361.pdf

For additional information visit our website: www.nuways-ag.com/research

Contact for questions:

NuWays AG - Equity Research

Web: www.nuways-ag.com

Email: research@nuways-ag.com

LinkedIn: https://www.linkedin.com/company/nuwaysag

Adresse: Mittelweg 16-17, 20148 Hamburg, Germany

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss

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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

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2032767 19.11.2024 CET/CEST

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