Original-Research: q.beyond AG - from NuWays AG
06.03.2025 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS Group.
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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: 06.03.2025
Target price: EUR 1.30
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald
FY24p beats profitability expectations; chg. est. & PT
Topic: QBY released FY24 preliminary figures, where top-line was in line with expectations but EBITDA significantly ahead of the company's guidance and especially our estimates. In detail:
FY24 sales came in at EUR 193m, which is in line with our and street's estimates (both EUR 193m). Sales were once more driven by the Managed Services segment (+4.9% yoy to EUR 135m) while the Consulting segment showed a 5.7% yoy decline to EUR 57.3m.
Strong gross margin improvement by 3.4pp yoy to 18.0% driven mostly by an improved near- and offshore ratio of 14% at YE. Thanks to the discontinuation of low margin consulting projects as well as a further expanding near- and off-shore ratio, gross margin is seen to further improve to over 20% in FY25e.
EBITDA beat. FY24 EBITDA came in at EUR 10.5m, thus significantly beating our estimate of EUR 9.2m, consensus (EUR 9.2m) as well as the company's guidance (EUR 8-10m). Besides the improved gross profit, efficiency measures in SG&A were the main drivers behind the stronger than expected improvement (+83% yoy even including last years positive one-off).
The strong release was topped off by a strongly improved FCF of EUR 3.2m (company definition). Mind you, that QBY defines FCF as the total change in net liquidity (excl. M&A). According to our calculation, FY24 FCF should have come in at EUR 5.7m.
In addition to the release of the preliminary figures, management also put out an FY25 guidance, targeting sales in the range of EUR 184-190m, an EBITDA of EUR 12-15m as well as sustained positive net income. While the EBITDA outlook is in line with our old estimates (EUR 14.6m), our sales figure was significantly above with EUR 204m. The gap is mainly explained by an accounting change. In accordance with IFRS 15, a total of EUR 12.6m FY24 sales, mainly related to SAP and Microsoft contracts, will no longer be accounted as revenues, as only the profits from the respective customers relationships will be accounted.Hence, the new guidance has to be put into perspective with a base revenue of EUR 180m, implying 2.2-5.6% growth.
EUR 30m M&A war chest. During yesterday's CC, CEO Rixen confirmed that the company is at an advanced stage to acquire 1-2 targets in FY25. Here, the management is looking for margin accretive targets with EUR >10m sales. Given the recent announcement of the (likely) new government intending to spend big on defense and infrastructure going forward, the company will likely look for targets with a high public sector exposure (healthcare, energy, defense), which was also confirmed during the CC. Rixen also explained that the company could spend up to EUR 30m on M&A given the company's strong net cash position. Mind you, that future M&A is not reflected in our model, thus providing upside to our estimates.
Given the strong release as well as the promising outlook, valuation remains attractive at 3.2x EV/EBITDA FY25e (1.9x FY26e)
We reiterate BUY with a new EUR 1.30 PT (old: EUR 1.10) based on DCF.
You can download the research here: http://www.more-ir.de/d/31906.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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2096242 06.03.2025 CET/CEST
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