Original-Research: INDUS Holding AG (von Parmantier & Cie. GmbH): Buy

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Original-Research: INDUS Holding AG - from Parmantier & Cie. GmbH

18.11.2024 / 15:05 CET/CEST

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

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Classification of Parmantier & Cie. GmbH to INDUS Holding AG

Company Name: INDUS Holding AG

ISIN: DE0006200108

Reason for the research: Update Q3 2024

Recommendation: Buy

from: 18.11.2024

Target price: 34.30

Target price on sight of: 12 month

Last rating change: no change

Analyst: Daniel Großjohann, Thomas Schießle

2024 guidance after Q3 confirmed in key points, public share buyback offer

announced

*Closing price XETRA (15 November 2024)

INDUS Holding AG generated sales of EUR 443.1 million in Q3 (9M 24: EUR 1,282.2

million; Q3 23: EUR 459.7 million), which was still 3.6% below the previous

year's figure, but exceeded the H1 quarters of 2024. The Q3 EBITA margin

(9.9%) was also higher than the H1 figure (8.8%). The annual, scheduled

impairment test led to a total impairment of EUR 6.7 million and had a

negative impact on EBIT. 9M earnings after taxes (EUR 50 million; .2%) and

9M EPS (EUR 1.89; .1%) exceeded the previous year's figures, which were

negatively impacted by the result from discontinued operations. The already

challenging environment for SMEs has not been made any easier by the

political uncertainty (Germany, USA). The remarkable improvement in group

sales and the operating margin during the year can therefore not yet be seen

as a sustainable turnaround with a view to 2025. However, we believe that

the INDUS share is still trading below its fair value, so the new public

share buyback offer is consistent with this. Due to the high quality of the

portfolio companies, the shareholder-friendly dividend policy (buyback

programme; dividend yield > 5%) and the attractive valuation (P/E 2024e:

8.4), the INDUS share remains a Buy.

INDUS has already paid out around EUR 56 million to shareholders in H1 2024

via the regular dividend and a share buyback programme. A public buyback

offer has now been announced (from 12.11.24 to 25.11.24; max. volume: 0.7

million shares at EUR 21.65) and a subsequent buyback programme (volume: max.

0.2 million shares or max. EUR 5 million). The repurchased shares are expected

to be cancelled subsequently.

Outlook for 2024: INDUS has confirmed the key points of its guidance despite

the challenging environment. Sales are still expected to be between EUR 1.7

billion and EUR 1.8 billion and the EBIT margin between 7% and 8%. The free

cash flow target (> EUR 110 million) was also confirmed. In terms of EBIT, the

result of the annual scheduled impairment test was the main reason for

lowering the EBIT target to a target corridor of EUR 115 million to EUR 125

million (previously EUR 125 million to EUR 145 million).

DISCLAIMER

LEGAL NOTICE

This research report ('Investment Recommendation') was prepared by

Parmantier & Cie. Research, with contributions from Mr. Grossjohann, and is

distributed solely by Parmantier & Cie. Research. It is intended only for

the recipient and may not be shared with other entities, even if they are

part of the same corporate group, without prior written consent. The report

contains selected information and makes no claim to completeness. The

investment recommendation is based on publicly available information

('Information'), which is considered correct and complete. However,

Parmantier & Cie. Research does not verify or guarantee the accuracy or

completeness of this information. Any potential errors or omissions do not

create liability for Parmantier & Cie. Research, which assumes no liability

for direct, indirect, or consequential damages.

In particular, Parmantier & Cie. Research accepts no responsibility for the

accuracy of statements, forecasts, or other content in this investment

recommendation concerning the analyzed companies, their subsidiaries,

strategies, economic conditions, market and competitive positions,

regulatory frameworks, and similar factors. While care has been taken in

preparing this report, errors or omissions cannot be excluded. Parmantier &

Cie. Research, including its partners and employees, accepts no liability

for the accuracy or completeness of statements, estimates, or conclusions

derived from the provided information in this investment recommendation.

To the extent this investment recommendation is provided as part of an

existing contractual relationship (e.g., financial advisory services),

Parmantier & Cie. Research's liability is limited to cases of gross

negligence or intentional misconduct. In cases of breach of essential

obligations, liability is limited to simple negligence but is restricted to

foreseeable and typical damages in all cases. This investment recommendation

does not constitute an offer or solicitation to buy or sell securities.

Partners, managing directors, or employees of Parmantier & Cie. Research or

its subsidiaries may hold responsible positions, such as supervisory board

mandates, in the companies mentioned in this report. The opinions expressed

in this investment recommendation may change without notice and reflect the

personal view of the research analyst. Unless otherwise stated, no part of

the research analyst's compensation is directly or indirectly related to the

recommendations or opinions contained in this report. All rights reserved.

You can download the research here: http://www.more-ir.de/d/31349.pdf

Contact for questions:

Kontakt:

PARMANTIER & Cie. GmbH

info@parmantiercie.com

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2032341 18.11.2024 CET/CEST

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