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

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

13.08.2024 / 09:01 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
Target price: EUR 1.10
Last rating change:
Analyst: Philipp Sennewald

Q2 largely in line with expectations + strong order intake

Q2 sales increased by 1.8% yoy to EUR 47.3m (eNuW: EUR 47.4m; eCons: EUR 47.3m),
which was again driven by the Managed Services segment, where revenues grew
by 6.1% yoy to EUR 33.7m (eNuW: EUR 33.2m). On the other hand, the ongoing
economic weakness continued to negatively impact on the Consulting segment,
as the business is usually characterized by shorter-term contracts compared
to the Managed Services segment. Segment revenues hence decreased by 7.6%
yoy to EUR 13.5m (eNuW: EUR 14.1m), which was also driven by the optimization of
the consulting portfolio (i.e. reduction in low-margin projects) in
accordance with the company's mid-term strategy. Yet, the segment's gross
margin came in 0.9pp weaker yoy with 6.7%. The Managed Services margin also
came in weaker at 20.7% following increased license costs, especially
VMware. Overall gross profit came in at EUR 7.9m (-4.7% yoy), implying a 15.7%
margin.

A clear highlight of the release in our view was the strong order intake of
EUR 54.2m (+36% yoy, 1.15x b-tb), providing sound visibility on future growth
momentum. A recurring revenue share of 75% (Q1: 74%) should provide
investors with additional confidence.

Despite the weaker gross margin, Q2 EBITDA strongly improved by 113% yoy to
EUR 2.2m (eNuW: EUR 2.1m; eCons: EUR 2.2m), implying a 4.7% margin. The drivers
behind the improvement were significant reductions in sales & marketing
(-23% yoy) as well as G&A expenses (-22% yoy) following the successful
implementation of the One q.beyond strategy.

Against this backdrop, management confirmed the FY guidance of EUR 192-198m
sales, EUR 8-10m EBTIDA and positive FCF. As the sales (eNuW: EUR 194m; eCons: EUR
195m) and FCF (eNuW: EUR 6m; eCons: EUR 4.4m) should be clearly in reach, we
even expect the company to achieve the upper end of the EBITDA guidance
(eNuW: EUR 9.7m; eCons: EUR 9.3m). While this might look ambitious given H1
EBITDA of EUR 4.2m, we expect ongoing efficiency gains (i.e. higher
near-shoring ratio: FY target of 17% vs 12% at H1) as well as scale effects
in the Managed Services segment.

The stock remains a BUY with an unchanged PT of EUR 1.10 based on DCF.

+++ For further information on the company's "Strategy 2025", there will be
a roundtable discussion with CEO Rixen and CFO Wolters today at 3:00 p.m.
(LINK). +++

You can download the research here: http://www.more-ir.de/d/30445.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
++++++++++
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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1966387 13.08.2024 CET/CEST

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Quelle: dpa-AFX