Original-Research: q.beyond AG (von NuWays AG): Kaufen

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

Classification of NuWays AG to q.beyond AG

Company Name: q.beyond AG

ISIN: DE0005137004

Reason for the research: Update

Recommendation: Kaufen

from: 07.05.2024

Target price: EUR 1.00

Target price on sight of: 12 Monaten

Last rating change:

Analyst: Philipp Sennewald

Q1 figures set to display operational improvements / chg.

q.beyond's Q1 figures, which will be released on May 13th, are seen to

provide investors with confidence

regarding the company's outlook. While top-line growth is expected to come

in rather muted, the imposed efficiency measures should already become

visible on the bottom-line.

Q1 sales look set to increase by 2% yoy to EUR 47.5m (eNuW). Compared to the

previous year, q.beyond will report under a new segmentation, comprising

the two segments Managed Services (2023: EUR 129m sales) and Consulting (EUR

60.3m). While overall sales growth is seen to remain muted throughout the

year, we expect the company to also benefit from the general acceleration

of the SAP S/4HANA transformation. Just recently, the company announced to

have completed another conversion project with regional newspaper Neue

Westfälische. Mind you, SAP ERP customers are getting more and more under

pressure regarding the transformation, as SAP will fade out mainstream

maintenance for the old ECC by the end of 2027.

EBITDA in Q1 is seen to improve strongly to EUR 1.4m (eNuW), up from EUR -1.3m

in Q1 '23. Main drivers for the improved profitability should be an

increased near- and off-shoring ratio, which management is aiming to lift

from 11% in 2023 to 20% by 2025. This alone should allow for a gross margin

improvement of c. 2pp (eNuW). Moreover, we expect an increased focus on the

consulting and development business, where gross margins of >20% should be

well achievable driven by increased daily rates.

With this, q.beyond should be on track to achieve its full year guidance.

While the sales outlook looks conservative with implied 3.0% yoy growth at

mid-point (eNuW: 3.1% yoy) the company looks set to achieve at least the

lower end of the EBITDA guidance of EUR 8-10m (eNuW: EUR 8.2m) as we expect

gradual profitability improvements driven by the aforementioned effects

throughout the year.

Besides this, inorganic growth might become a factor towards YE, as implied

by CEO Rixen in the call for the FY prelims. In fact, with more than EUR 30m

net cash the company looks well equipped to tap the M&A market again. Here,

one possibility could be to partner up with a company from a respective

industry in order to access new verticals, comparably to logineer.

q.beyond remains a BUY with an unchanged PT of EUR 1.00 based on DCF.

You can download the research here:

http://www.more-ir.de/d/29617.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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