Original-Research: MAX Automation SE (von NuWays AG): BUY

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Original-Research: MAX Automation SE - from NuWays AG

22.07.2024 / 09:01 CET/CEST

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Classification of NuWays AG to MAX Automation SE

Company Name: MAX Automation SE

ISIN: DE000A2DA588

Reason for the research: Update

Recommendation: BUY

from: 22.07.2024

Target price: EUR 8.20

Last rating change:

Analyst: Konstantin Völk

Q2 preview // business climate expected to remain muted

Topic: MAX will release its 2nd quarter on August 2 nd . We expect sales and

margins to remain muted.

Investment reluctance among customers started already in the second half of

FY23 and should improve only modestly for the second quarter this year.

Customers hesitate to place orders due to a challenging macroeconomic

environment, restrictive financing conditions and persistently high price

levels. After three quarters of declining order intake, we saw in Q1 FY24

for the first time a qoq increase to EUR 90m (% qoq; -21% yoy). However,

due to partially long lead times and a low order backlog at the end of FY23

(EUR 206m), sales should stay muted in Q2. We expect sales of continued

operations to decline slightly by 1.5% yoy to EUR 92m with an EBITDA margin of

8.2% (- 3.3pp) due to pressure from wage inflation and product mix.

Bdtronic's revenue should increase to EUR 26m (eNuW: .5% yoy) due to a

solid order backlog of EUR 52m at the end of FY23 and a strong service

business. However, we expect EBITDA to decrease c. 32% yoy to EUR 3.4m (eNuW:

-8.3pp in margin), due to wage inflation, an increase in personnel and an

extraordinarily strong comparative period. This is also indicated by a 26%

increase in the average number of employees in Q1 to 547 (Q1 FY23: 435) due

to an elevated sales level and a high workload per employee in FY23. In

addition, there should be some pressure on margins driven by an unfavorably

product mix, as the currently fast-growing impregnation business has lower

margins compared to dispensing.

We expect Vecoplan's revenues to decrease by 10% yoy in Q2 to EUR 37m as we

further see investment reluctance in the recycling/waste division. This has

already led to a 15.6% yoy decline in order intake in FY23 and a 35%

decrease in order backlog (EUR 63m end of FY23). EBITDA should come in at EUR

3.7m with a margin of 10.1% (eNuW).

Nevertheless, mid-term prospects remain bright due to the strong competitive

position of its portfolio companies. For instance, Bdtronic is the number

one supplier of impregnation machines in the production of electric drives

and the third largest supplier for dispensing machines in the automotive

market. Driven by its advanced proprietary technology, bdtronic should

largely benefit from the ongoing electrification of cars in the mid- and

long-term, even if it takes place slower than initially expected.

We reiterate BUY with an unchanged PT of EUR 8.20, based on DCF.

You can download the research here: http://www.more-ir.de/d/30263.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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1950535 22.07.2024 CET/CEST

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