Märkte & Kurse

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Original-Research: UmweltBank AG - from GBC AG

12.08.2024 / 09:31 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
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 GBC AG to UmweltBank AG

     Company Name:                UmweltBank AG
     ISIN:                        DE0005570808

     Reason for the research:     Research Note
     Recommendation:              BUY
     Target price:                9.63 EUR
     Target price on sight of:    31.12.2025
     Last rating change:
     Analyst:                     Cosmin Filker, Marcel Goldmann

1st HY 2024: Negative valuation effect brought forward to 2023, forecast
adjusted, target price: EUR9.63, rating: BUY

UmweltBank AG's total income rose significantly in the first six months to EUR
38.16 million (previous year: EUR 31.20 million). In particular, the jump in
the financial result to EUR 17.95 million (previous year: EUR 1.19 million)
contributed to this visible increase. This is related to the planned
implementation of the corporate strategy, which envisages the sale of the
investment portfolio within the next three financial years also in order to
release equity and regulatory capital. In the first six months of 2024, a
total of four wind farm investments and two property investments were sold,
thereby significantly increasing the financial result. When the Q1 figures
were published, Umweltbank AG had still reported a loss on disposal of
around EUR 10 million. However, as part of an audit by the auditor, the
carrying amount of the securities sold as at 31 December 2023 was
subsequently changed, meaning that the valuation loss was carried forward in
full to the 2023 financial year.

The significant increase in total income is also reflected in the
significant increase in earnings before taxes to EUR 8.53 million (previous
year: EUR 3.11 million) and the profit for the period to EUR 5.62 million
(previous year: EUR 1.49 million). The increase in income more than
compensated for the rise in personnel and administrative expenses to EUR 29.37
million (previous year: EUR 26.63 million). The higher expenses reflect an
increase in salary levels as well as higher expenses in the areas of IT and
marketing. The completion of the migration of the core banking system (Q2
2024) and the transformation of the organisational structure should
eliminate significant cost drivers in the future.

The management of UmweltBank AG has confirmed the previously communicated
guidance with the publication of the half-year figures for 2024. However,
the guidance was raised by the valuation effect of around EUR 10 million. As
the loss from the sale of the securities will not be recognised in the
current financial year as previously expected, but retroactively in the 2023
financial year, the figures for the 2023 financial year have been adjusted
and the pre-tax guidance has been raised to between EUR -5 million and EUR -10
million (previously: EUR -15 million to EUR -20 million).

According to the company's planning, total income in the range of EUR 60
million and EUR 65 million will be offset by total expenses of around EUR 70
million at the end of the 2024 financial year. Based on the figures achieved
in the first six months, total income of EUR 38.16 million and total expenses
of EUR 29.68 million, this assumption is reasonable.

Total income in the second half of 2024 should be characterised in
particular by an increase in net interest income, which should be slightly
above the previous year's figure by the end of the year. On the one hand,
the increase in new lending business, which should rise significantly to EUR
250 million by the end of the 2024 financial year, should contribute to
this. However, the reinvestment of funds released from the sale of treasury
portfolios is likely to be of key importance. In view of the general rise in
interest rates, these should be invested at better conditions. In addition,
the investment of customer funds should also contribute to the increase in
net interest income.

As previously forecast, the current financial year 2024 will initially be
characterised by an increase in total expenses before these decline in the
following financial years. After that, costs are only expected to develop at
a disproportionately low rate. On the one hand, the costs for the now
completed migration of the core banking system will no longer apply in the
coming financial years. These are expected to amount to EUR 4 million in the
first half of 2024. In addition, UmweltBank AG will make further investments
in efficient and digital processes in 2024 and report higher marketing
expenses to acquire private customers. Following completion of the
investments and the transformation currently underway (digitalisation,
efficiency enhancement, organisational structure), the cost-income ratio is
expected to fall in the coming financial years. UmweltBank AG is aiming for
a cost-income ratio of less than 60 % by 2028. For the 2026 financial year,
our last forecast period, we expect a cost-income ratio of 75.7 %.

The sum of the discounted residual earnings results in a value of EUR 343.35
million (previously: EUR 342.18 million). With 35.66 million shares
outstanding, this results in a fair enterprise value per share of EUR 9.63
(previously: EUR 9.60), which corresponds to a marginal increase in the target
price. Based on the current share we continue to assign a BUY rating.



You can download the research here: http://www.more-ir.de/d/30423.pdf

Contact for questions:
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
++++++++++++++++
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR
Beim oben analysierten Unternehmen ist folgender möglicher
Interessenkonflikt gegeben: (1,4,5a,6a,7,11); Einen Katalog möglicher
Interessenkonflikte finden Sie unter:
https://www.gbc-ag.de/de/Offenlegung
+++++++++++++++
Date and time of completion of the study: 07.08.24 (2:16 pm)
Date and time of the first dissemination of the study: 12.08.24 (9:30 am)

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1965089 12.08.2024 CET/CEST

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