Original-Research: q.beyond AG (von NuWays AG): BUY

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Original-Research: q.beyond AG - from NuWays AG

01.04.2025 / 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 q.beyond AG

Company Name: q.beyond AG

ISIN: DE0005137004

Reason for the research: Update

Recommendation: BUY

from: 01.04.2025

Target price: EUR 1.30

Target price on sight of: 12 months

Last rating change:

Analyst: Philipp Sennewald

Final FY in line with prelims / Strong FCF highlights release; chg.

FY24 sales came in at EUR 193m, up 1.7% yoy. Top-line was once again driven by

the Managed Services segment, where sales increased 4.9% yoy to EUR 135m.

Notably, QBY was able to significantly increase the implementation of AI

based solutions in the fields of knowledge and records management. Further,

the

increased focus on cyber security and integrated software development beared

fruit in FY24. On the other hand, Consulting showed declining sales (-5.0%

to EUR 57.3m), which was mainly driven by ongoing investment reluctance in the

German Mittelstand. Moreover, QBY continued to give up non- and low-margin

projects.

The latter already became visible in a strongly improved gross margin of

17.9% (.4pp yoy). This was further driven by a reduction of external

personell. Going forward, we expect a further gross margin expansion based

especially on an increasing near- and off-shoring ratio (management target

of 20% in FY25 vs 14% in FY24).

Accordingly, EBITDA came in strong at EUR 10.5m, implying a 5.5% margin

(.5pp yoy), beating our (EUR 9.2m) and street's (EUR 9.2m) old estimates as

well as the company's guidance of EUR 8-10m. Besides the improved gross

margin, efficiency measures in SG&A were the main drivers of the strong

improvement. In fact, EBITDA increased 83% yoy even including last years

positive net one-offs of EUR 3.3m.

The strong released was highlighted by a substantially improved FCF (excl.

leasing expenses) of EUR 7.0m (eNuW: EUR 5.7m; FY23: EUR 3.9m). Mind you, that

this figure differs from QBY's FCF definition (EUR 3.2m; total change in net

liquidity (excl. M&A)).

This should bode especially well for management M&A targets. For FY25,

management confirmed in the CC on the FY prelims, that the company is in an

advanced stage to acquire 1-2 targets this year. Management is looking for

margin accretive deals with EUR >10m sales. Given the recently imposed special

fund for investing EUR 500bn on infrastructure and the suspension of the debt

break for defense spending, we regard it as even more likely that QBY will

look for targets with a high public sector exposure (healthcare, energy,

defense). This was also confirmed during the call.

Given the strong numbers and an undemanding valuation (FY25e EV/EBITDA of

4.0x), we reiterate BUY with an unchanged EUR 1.30 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/32106.pdf

For additional information visit our website:

https://www.nuways-ag.com/research-feed

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

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2109568 01.04.2025 CET/CEST

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