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

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

08.05.2025 / 09:00 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:                        08.05.2025
     Target price:                EUR 1.30
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Philipp Sennewald

Q1'25e set for further profitability improvements

Topic: Next Tuesday, q.beyond is going to release its Q1 report, which is
seen to show further improvements on the bottom-line and provide confidence
regarding the company's FY25 outlook. In detail:

Q1 sales are seen to slightly decline by 1.4% to EUR 46.5m (eNuW). Yet, the
expected decline is solely due to accounting in accordance with IFRS 15. As
a result, a total of EUR 12.6m of FY24 sales, which are mainly related to SAP
and Microsoft contracts, will no longer be accounted as revenues, as only
the profits from the respective customer relationshops will be accounted
for. Eliminating this effect, sales growth should be in the low to mid
single-digit % range (eNuW). This should again be driven by Managed
Services, but also a recovery of Consulting. Here we expect a significant
improvement on the gross margin side to 12% (+3.6pp yoy). Overall gross
margin is seen to come in at 19.3%, implying EUR 9.0m gross profit.

Q1 EBITDA is expected to improve strongly by 27.6% to EUR 2.5m (eNuW),
implying a 5.5% margin. Main drivers behind this should be again an improved
near- and off-shoring ratio, which management aims to lift to 20% by YE'25
(14% as of FY24). This alone should explain a good part of the gross margin
improvement. Moreover, the anticipated recovery of Consulting is seen to be
a further driver. Given an improved utilization, margins in the region of
20% should be absolutely achievable going forward.

With this, the company should be well on track to achieve the FY25 guidance.
While the sales outlook looks conservative, implying 2.2-5.6% growth
(excluding the aforementioned accounting effect; eNuW: +5.5%), the q.beyond
should be able to achieve the upper end of the communicated EBITDA target of
EUR 12-15m (eNuW: EUR 14.7m), as we expect gradual improvements as well as a
seasonally strong Q4.

Putting all this aside, inorganic growth is likely to become a factor as
well, as implied by CEO Rixen during the latest conference calls. In fact,
with EUR 30m net cash (incl. leases) management has a well equipped war chest
on hand to tap the M&A market. Here, we regard targets with a high public
sector exposure (health-care, energy, defense) as likely, given the recent
infrastructure special funds and the debt break suspension in Germany.

Reiterate BUY with an EUR 1.30 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/32508.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
++++++++++
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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2132716 08.05.2025 CET/CEST

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