Märkte & Kurse

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

01.04.2025 / 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
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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:                        01.04.2025
     Target price:                EUR 1.30
     Target price on sight of:    12 months
     Last rating change:
     Analyst:                     Philipp Sennewald

Final FY in line with prelims / Strong FCF highlights release; chg.

FY24 sales came in at EUR 193m, up 1.7% yoy. Top-line was once again driven by
the Managed Services segment, where sales increased 4.9% yoy to EUR 135m.
Notably, QBY was able to significantly increase the implementation of AI
based solutions in the fields of knowledge and records management. Further,
the
increased focus on cyber security and integrated software development beared
fruit in FY24. On the other hand, Consulting showed declining sales (-5.0%
to EUR 57.3m), which was mainly driven by ongoing investment reluctance in the
German Mittelstand. Moreover, QBY continued to give up non- and low-margin
projects.

The latter already became visible in a strongly improved gross margin of
17.9% (+3.4pp yoy). This was further driven by a reduction of external
personell. Going forward, we expect a further gross margin expansion based
especially on an increasing near- and off-shoring ratio (management target
of 20% in FY25 vs 14% in FY24).

Accordingly, EBITDA came in strong at EUR 10.5m, implying a 5.5% margin
(+2.5pp yoy), beating our (EUR 9.2m) and street's (EUR 9.2m) old estimates as
well as the company's guidance of EUR 8-10m. Besides the improved gross
margin, efficiency measures in SG&A were the main drivers of the strong
improvement. In fact, EBITDA increased 83% yoy even including last years
positive net one-offs of EUR 3.3m.

The strong released was highlighted by a substantially improved FCF (excl.
leasing expenses) of EUR 7.0m (eNuW: EUR 5.7m; FY23: EUR 3.9m). Mind you, that
this figure differs from QBY's FCF definition (EUR 3.2m; total change in net
liquidity (excl. M&A)).

This should bode especially well for management M&A targets. For FY25,
management confirmed in the CC on the FY prelims, that the company is in an
advanced stage to acquire 1-2 targets this year. Management is looking for
margin accretive deals with EUR >10m sales. Given the recently imposed special
fund for investing EUR 500bn on infrastructure and the suspension of the debt
break for defense spending, we regard it as even more likely that QBY will
look for targets with a high public sector exposure (healthcare, energy,
defense). This was also confirmed during the call.

Given the strong numbers and an undemanding valuation (FY25e EV/EBITDA of
4.0x), we reiterate BUY with an unchanged EUR 1.30 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/32106.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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2109568 01.04.2025 CET/CEST

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