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

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Original-Research: INDUS Holding AG - from NuWays AG

27.03.2025 / 09:02 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: 27.03.2025

Target price: EUR 34.00

Target price on sight of: 12 months

Last rating change:

Analyst: Christian Sandherr

Solid FY24 numbers and promising mid-term outlook; chg.

Topic: INDUS released solid final FY24 numbers in line with prelims and

presented its mid-term targets for 2030 at the CMD in Frankfurt. Here are

our key takeaways:

To recap, FY24 sales decreased 4.5% yoy to EUR 1,722m due to macroeconomic

headwinds especially in the construction industry and pricing pressure in

Materials Solutions (former Materials). Q4 sales came in at EUR 440m, flat

yoy. Order intake decreased across all segments to EUR 1,611 in total with a

book-to-bill of 0.94x and 3.7% below last year due to a persistently weak

economy. Consequently, the order backlog decreased 10.4% yoy to a low level

of EUR 637m. FY adj. EBITA came in at EUR 154m, -18.3% yoy due to a top-line

decrease and higher personnel expenses (% yoy) despite 161 fewer

employees. This leads to a still solid 8.9% adj. EBITA margin (-1.5ppts)

considering the current economic environment.

Engineering FY sales remained flat yoy (-0.5%) but adj. EBITA decreased by

21.5% due to an unfavorable product mix in H1. Infrastructure recorded a

3.9% decline in sales, however, with a 2.9% increase in adj. EBITA thanks to

a reduction of 7.4% yoy in cost of materials and a positive one-time effect

from the sale of a non controlling interest in BETOMAX for EUR 2.6m. Sales in

the Materials Solutions segment dropped by 8.9% and adj. EBITA

disproportionately by 25.2% yoy due to a weak metals sector and pricing

pressure. In particular suppliers of the construction and agricultural

industry are currently facing low demand.

On a regional sales split, top-line in Germany decreased by 8.2% (48% of

total sales), while sales in EU declined by only 4.5% and in third countries

even increased by 1.8% yoy. The continued investment reluctance in Germany

and a still muted GDP growth forecast of 0.3% for FY25e by the IMF, gave

INDUS

reason to expand its geographic M&A scope. Growth acquisitions will be

expanded to Europe and add-on acquisitions are searched globally with a

particular focus on North America. This is positive news in our view, as

INDUS will become less dependent on the German economy and can now search

more opportunistically in different geographies for value accretive M&A

targets.

Ambitious mid-term target: Management aims for sales of EUR 3bn and adj. EBITA

of EUR 330m until FY30e, not factoring in any potential impact of Germany's EUR

500bn infrastructure special fund. EUR 700m additional sales are expected to

come from organic growth (implied 5.9% CAGR) and EUR 600m from acquisitions,

for which the company plans to spend approximately EUR 500m. INDUS sees a huge

market potential for succession solutions in Europe. Around 90% of family

businesses in Europe see an external investor as a suitable succession

option and long-term oriented investors such as INDUS who preserve the DNA

of the target business are often preferred by Mittelstand companies.

Although we believe the targeted 11% adj. EBITA margin is well in reach, we

take a more conservative view on organic top-line growth. Thus, we estimate

INDUS to reach c. EUR 500m organic sales growth until FY30e (implied 4.3%

CAGR).

FY25e guidance in reach: INDUS expects sales between EUR 1.75-1.85bn (eNuW: EUR

1.79bn) and adj. EBITA in the range of EUR 150-175m (eNuW: EUR 164m) for the

current year. Although a yoy decline in backlog, the guidance looks

plausible in our view supported by EUR 28m annualized sales contribution from

INDUS' acquisitions since the start of the year. Further, the acquisitions

made in FY24 have an annualized sales contribution of c. EUR 35m (vs. EUR 18.4m

recorded sales in FY24).

We reiterate BUY with unchanged PT of EUR 34, based on FCFY25e.

You can download the research here: http://www.more-ir.de/d/32072.pdf

For additional information visit our website:

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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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