Märkte & Kurse

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

11.02.2025 / 09:02 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
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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:     Initiation
     Recommendation:              Buy
     from:                        11.02.2025
     Target price:                SEK 17.00
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Henry Wendisch

Target acquired and locked on. Initiating coverage with BUY

With the world's highest PhD ratio per capita in technical and natural
sciences, an above average R&D intensity and a unique triangular cooperation
between academia, government and industry, Sweden has one on the most
sophisticated industrial and defence sectors in the world. The Nordic
defense sector is dominated by several large OEMs, such as Saab, BAE
Systems, and Kongsberg. However, these major players depend on key
components from hundreds of highly specialized and fragmented SMEs (eNuW:
>300). Many of those are privately owned, independent businesses with
distinct product USPs, but they often lack the defence industry footprint,
scale, and organizational professionalism.

Here, Scandinavian Astor Group (Astor), a industrial and defence serial
acquirer, shows a strong track record of acquiring hidden champions with
above average margins at attractive prices (six acquisitions for SEK 195m at
only 6.3x EV/EBITDA at an average 17% EBITDA margin). Astor creates win-win
situations and generates value by (1) professionalising operations, (2)
qualifiying targets for defence and (3) offering traction and a broad
customer network in a market with large entry barriers.

Following its accession to NATO, Sweden has almost tripled its defence
spending ('24 vs. '21) and further aims to grow its defence spending by 7%
p.a. from '24 ' 30, which implies 2.6% of GDP. The ongoing discussions
increase spending to 3% or more, highlights additional growth potential. As
tier-1 suppliers, Astor's holdings are positioned in the first part of the
value chain, but are in the last phase of the defence growth cycle, meaning
that their wave of growing order intake is about to arrive. This should lead
to organic sales CAGR of 18% (FY'24-'27e), which is boosted by recent
acquisitions to an overall 27% sales CAGR (FY'24' 27e). Group EBITDA should
expand disproportionately at a CAGR of 58% (FY'24'-27e) thanks to (1) the
acquisition of profitable targets, (2) subsequent operational improvements
and (3) an improving fix cost coverage at holding level. Since foundation in
2022, the company is on track to roughly 8x its top-line reaching its
guidance of SEK 400m sales until 2026.

In sum, Astor offers an unique opportunity to capture growth and the
enormous potential of the Nordic defence sector. Valued at only 11.5x FY'25e
EV/EBITDA, c. 50% below relevant peers, the stock offers an attractive entry
opportunity. We initiate coverage with a BUY recommendation and PT of SEK
17.00, based on DCF.

You can download the research here: http://www.more-ir.de/d/31725.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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2084099 11.02.2025 CET/CEST

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