Original-Research: INDUS Holding AG (von NuWays AG): BUY
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^ Original-Research: INDUS Holding AG - from NuWays AG Classification of NuWays AG to INDUS Holding AG Company Name: INDUS Holding AG ISIN: DE0006200108 Reason for the research: Update Recommendation: BUY from: 22.02.2024 Target price: 36.00 Target price on sight of: 12 Monaten Last rating change: Analyst: Christian Sandherr Solid FY23 prelims // focus on strong FCF & share buyback; chg. Topic: While prelim. FY23 sales and EBIT came in largely as expected, the strong FCF generation of EUR 190m is well above expectations. On top, INDUS announced a 4.1% share buyback at EUR 23. Preliminary FY23 sales remained stable yoy at EUR 1.80bn (eNuW: EUR 1.82bn), despite unfavourable economic conditions in the construction industry; Q4 sales -5.0% yoy to EUR 436m. Thanks to a strong Engineering Segment, FY23 operating EBIT came in at EUR 150m (eNuW: EUR 152m), implying a 8.3% margin, up 0.9pp yoy and above the guidance range of 7-8%; Q4 EBIT of EUR 32.7m, a 7.5% margin. The Engineering segment delivered slight revenue growth and noticeable growth in earnings for FY23e. Sales in the Infrastructure segment were flattish yoy with a slightly lower EBIT as the slowdown in the construction sector impacted several portfolio companies, particularly in H1. Revenues in the Materials segment decreased modestly but with a significantly higher EBIT due to price increases. Most importantly, Free cashflow came in above EUR 190m materially improving yoy (2022: EUR 102m), exceeding the guidance of EUR 100m and eNuW of EUR 89m, caused by further noticeable working capital normalizations. As a result, net debt decreased by EUR 87.3m to EUR 506m, strengthened the equity ratio to 37.3% (FY22: 36.8%). Further, the strong cashflow generation gives INDUS with additional financial flexibility regarding acquisitions and dividend payments. Thanks to the INDUS announced a share buyback for up to 1.1m shares at a price of EUR 23 during the period from February 22nd, 2024 to March 1st, 2024. Thus, the volume of the buyback amounts up to EUR 25.3m in aggregate, leading to approximately 4.09% of the company's registered share capital. This underlines not only the strong cash generation of the company but also the current undervaluation. FY24e guidance in line with expectations. Management anticipates revenues in the range of EUR 1.85-1.95bn (eNuW: EUR 1.88bn) with an EBIT between EUR 145-165m in FY24e (eNuW: EUR 150m). Despite of the continuously challenging end markets and general macroeconomic conditions, we regard the guidance as doable due to price increases and slight pickup of demand across several portfolio companies. Trading at only 4.1x EV/EBITDA 2023e, 59% below its historical average, INDUS remains attractively priced. We reiterate our BUY rating with an increased PT of EUR 36 (old: EUR 34) based on FCFY 2024e. You can download the research here: http://www.more-ir.de/d/28957.pdf For additional information visit our website www.nuways-ag.com/research. Contact for questions
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www.nuways-ag.com/research. Kontakt für Rückfragen 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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