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Original-Research: INDUS Holding AG - from NuWays AG

19.11.2024 / 09:00 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 NuWays AG to INDUS Holding AG

Company Name: INDUS Holding AG
ISIN: DE0006200108

Reason for the research: Update
Recommendation: Buy
from: 19.11.2024
Target price: EUR 34.00
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr

RT feedback: Strong FCF and well filled M&A pipeline

Topic: On Monday we hosted a digital roundtable with INDUS, here are our key
takeaways.

M&A pipeline well filled: INDUS expects to see another deal to sign within
the Infrastructure segment this year. However, the purchase price is likely
not to be paid until FY25e. Further, INDUS has in prospect to spend around EUR
50-70m on M&A next year. Considering the recent decline in acquisition
multiples for German SME's, it is now a good time for INDUS to expand its
portfolio in our view.

Infrastructure shows a solid development in FY24 (10.2% EBIT margin in 9M,
+1.9ppts yoy), which is expected to continue for FY25e. In addition, the
Engineering segment should improve at least slightly next year. As
communicated by management in the Q2 CC, product mix in H2'24e is much more
favorable than in H1. Consequently, the operating margin in Q3 already
improved considerably compared to H1'24 (9.0% vs. 5.2% in H1). In our view
H2'24e should be a better reference point for FY25e than the muted H1.

On the other hand, Materials should be more challenging next year. While the
medical companies show resilience, companies in the metal production and
processing sectors are more affected by the current difficult macro
environment. In addition, order backlog in Materials decreased over the last
year, which puts further pressure on the top-line (EUR 120m backlog in 9M'24
vs. EUR 153m end of FY23).

Strong Free Cashflows: INDUS continues to expect above EUR 110m in FCF this
year (eNuW: EUR 115m), delivering a strong FCFY'24e of c. 10% (eNuW). Beyond
that, a further reduction in working capital for FY25e looks plausible,
which is however dependent on the sales development next year. This should
support free cashflows in FY25e. Already in 9M, working capital decreased c.
EUR 33m yoy to EUR 506m (vs. EUR 538m end of 9M'23; EUR 618m end of 9M'22), thanks
to an ease of supply chains, muted sales growth and an active working
capital management.

We continue to like the stock and confirm INDUS as one of NuWays' Alpha
Picks. Reiterate BUY with an unchanged PT of EUR 34, based in FCFY'24e.

You can download the research here: http://www.more-ir.de/d/31361.pdf
For additional information visit our website: www.nuways-ag.com/research

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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2032767 19.11.2024 CET/CEST

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