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

Classification of NuWays AG to q.beyond AG

Company Name: q.beyond AG
ISIN: DE0005137004

Reason for the research: Update
Recommendation: BUY
from: 12.03.2024
Target price: 1.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Philipp Sennewald

FY prelims without surprises + bullish outlook // chg.

Implied Q4 sales increased by 9% yoy to EUR 50.8m (eNuW: EUR 47.6m, eCons: EUR
47.4m). Growth was predominantly driven by the continued recovery of the
SAP segment (21% of sales), where revenues increased strongly by 28% yoy to
EUR 10.8m (eNuW: EUR 8.9m), following several key customer wins as well as a
pick-up of the S/4HANA transformation. The Cloud & IoT segment (79% of
sales) showed yet another quarter with muted growth of 4.9% yoy to EUR 40.1m
(eNuW: 2.7% organic growth), although exceeding our estimate of EUR 38.7m.
Overall, FY '23 sales increased 9.4% yoy to EUR 189m (eNuW & eCons: EUR 186m).
50% of the growth is attributable to the productive-data acquisition.

Q4 EBITDA came in at EUR 5.8m (eNuW & eCons: EUR 5.2m), implying an 11.5%
margin and a 358% yoy increase. However, the strong increase is mainly due
to a decision of the tax authorities in favor of q.beyond, which had a
positive effect of EUR 8.6m (eNuW: EUR 3.2m net cash effect in '24). On the
other hand, the company built up provisions amounting to EUR 5.3m mainly
related to the ongoing business transformation. Hence, while FY reported
EBITDA came in at EUR 5.7m, the operating EBITDA amounted to EUR 2.4m.

Notably, the company generated FCF of EUR 1.7m (eNuW: EUR1.4m, eCons: EUR 0.2m),
thus reaching breakeven one year ahead of target. With now EUR 37.6m of net
cash, CEO Rixen indicated in yesterday's CC that M&A might already be on
the table for late 2024. Here, one possibility could be to partner up with
a company from a respective industry in order to access new verticals (see
logineer). Mind you, future M&A is not reflected in our model, thus
providing a certain upside to our estimates.

Bullish FY '24 guidance. With the release, management also provided a 2024
outlook, targeting sales of EUR 192-198m (eNuW new: EUR 197m, eCons: EUR 196m)
and an EBITDA of EUR 8-10m (eNuW new: EUR 8.1m, eCons: EUR 7.4m). While 3% sales
growth at mid-point should be achievable, the EBITDA guidance appears quite
ambitious, as it implies an incremental margin of 125% at mid-point with
respect to the operating EBITDA. Yet, with our new estimates we expect the
company to achieve the lower end of the guided range due to (1) an
increased off- and near-shoring ratio, (2) an increased consulting and
development ratio as well as the (3) ongoing streamlining of processes in
connection with one-q.beyond (i.e. eliminate duplicate structures, optimize
order-to-cash).

New segmentation: From 2024 onwards, q.beyond will change its segment
reporting, as the new segments "Managed Services" and "Consulting" will
replace the current segmentation ("Cloud & IoT" and "SAP"). 'Managed
Services' will comprise the q.beyond data centres in Hamburg and Ulm as
well as logineer while 'Consulting' will comprises the former SAP segment
as well as the Microsoft services, ITsecurity, software development,
data-intelligence and cloud consulting. A more detailed overview is
provided below.

Remains a BUY with an unchanged PT of EUR 1.00 based on DCF.

You can download the research here:
http://www.more-ir.de/d/29113.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research.
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 bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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-------------------transmitted by EQS Group AG.-------------------


The issuer is solely responsible for the content of this research.
The result of this research does not constitute investment advice
or an invitation to conclude certain stock exchange transactions.

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Quelle: dpa-AFX