Original-Research: Scandinavian Astor Group AB (von NuWays AG): Buy

    ^
Original-Research: Scandinavian Astor Group AB - from NuWays AG

20.06.2025 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group.
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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Classification of NuWays AG to Scandinavian Astor Group AB

     Company Name:                Scandinavian Astor Group AB
     ISIN:                        SE0019175274

     Reason for the research:     Update
     Recommendation:              Buy
     from:                        20.06.2025
     Target price:                54.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Sweden approves SEK 300bn defence booster
Yesterday, the Swedish parliament backed the plans to issue SEK 300bn in
additional debt to boost defence spending. Mind you, Sweden's current
defence budget stands at SEK 140bn for FY'25e (i.e. 2.7% of GDP) and in
March, Sweden commited to raise defene spending even further. In order to
meet the commited NATO target (3.5% of GDP by 2030), Sweden would thus spend
SEK 250bn annually on defence by 2030, so almost twice as much as today.
This translates into a defence spending per capita of EUR 2,100 (vs. EUR 1,000
in Germany), showing the large rearmament measures Sweden currently
undertakes. Now, the Swedish parliament backed those plans by having
approved additional debt. Mind you, the Nordics have a comparably low
indebtedness in % of GDP (Sweden: 29%, Denmark: 31%, Norway: 42%) and thus
have ample room to take on further debt, should it be required.

Next to this positive macro-newsflow, Astor has also announced positive
newsflow in the last days as well:

  1. Large defence order for Marstrom: The carbon fibre specialist received
    a large defence order worth SEK 21.3m for composite products from a
    major nothern European defence company (likely Saab, Kongsberg or BAE,
    in our view). Deliveries will begin in Q3'25 and continue until '27e.

  2. Closing of NSG: Yesterday, Astor announced the closing of Nordic Shield
    Group, which is now a 30% associated company recorded at equity. The
    deal was under the requirement, that NSG itself gained approval of the
    acquisition of Cesium (producer of patented mobile security vaults for
    rapid military deployment, bullet- and explosionproof), which has taken
    place yesterday as well. Mind you, Astor has an option to increase its
    holding in NSG (and thus indirectly in Cesium) to 39% within 15 months,
    provided that current NSG shareholders do not exercise their
    subscription rights. Cesium alone shows a very strong profile with sales
    of SEK 126m and a staggering 38% EBIT margin in FY'24. Financials for
    NSG (ex Cesium) are not disclosed, but we expect it to be profitable
    company as well. Going forward, the deal will not contribute to sales,
    but boost profitability as it will be recorded at equity.

  3. Carbonia acquisition closing soon. Astor gained National Inspectorate
    of Strategic Products (ISP's) approval to acquire Carbonia Composites.
    With that, Astor issued 442k new shares at SEK 37.29 (total: SEK 16.5m)
    as part of payment. Closing is now expected to be on July 1st 2025.

Altough the shares do not appear cheap on multiples (which are based on
reported numbers), we nevertheless see ample potential for the stock. On a
proforma basis, where the most recent M&A is incorporated into sales and
EBITDA on a full year basis, the valuation multiples show a more better
picture (see below).

Furthermore, we've added the recent AMMUNITY acquisition to our deal
overview (see below), where Astor's ability to acquire companies at
attractive prices becomes visible. Mind you, the acquisition of NSG only
shows the financials of Cesium and excludes the financials of NSG on a
standalone basis, which implies a blended acquisition multiple well below
the 8.2x EV/EBITDA.

In sum, Astor continues to deliver on all fronts, is supported by positive
macro-tailwinds and still offers upside for new investors. Against this
backdrop, we reiterate our BUY recommendation with unchanged PT of SEK
54.00, based on DCF.


You can download the research here: http://www.more-ir.de/d/32882.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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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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2157972 20.06.2025 CET/CEST

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