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Original-Research: INDUS Holding AG - from NuWays AG

10.01.2025 / 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 INDUS Holding AG

Company Name: INDUS Holding AG
ISIN: DE0006200108

Reason for the research: Update
Recommendation: Buy
from: 10.01.2025
Target price: EUR 34.00
Target price on sight of: 12 months
Last rating change:
Analyst: Christian Sandherr

Solid FY25e ahead for INDUS due to reasoned capital allocation

Topic: FY24e was clearly overshadowed by macroeconomic challenges for INDUS,
especially in the first quarter. While we do not expect a fast improvement
of the economic environment, we also do not see the situation deteriorating
further.

Sales are seen growing in the low to mid-single digit % range yoy to EUR
1,810m (eNuW) as we do not expect the weakness in the first quarter (EUR 410m
sales in Q1'24 vs. EUR 451m in Q1'23) to repeat to a comparable extent as in
the previous year. In addition, we expect c. EUR 30m (eNuW) sales growth
contribution from acquisitions made in FY24e and the recently announced
add-on acquisition of Kettler GmbH (company news 7th January). However, on
the other hand order intake remained on a low level with EUR 1,220m in 9M'24
(-0.8% yoy; book-to-bill 0.95x) leading to a decrease in order backlog to EUR
678m (vs. EUR 711m end of FY23). Hence, we do not expect to see significant
organic sales increases in FY25e.

We expect the EBIT margin to improve to a solid 8.3% as the product mix in
the Engineering segment should be more profitable in FY25e than in H1'24 and
we also do not expect further impairments for FY25e (EUR 6.7m in FY24).

Nevertheless, we still see the challenges due to a competitive environment
and price pressure in the agricultural and construction technology field to
persist throughout the year which affects the Materials segment.

Enhanced capital allocation: During the past quarters, we noticed a clear
improvement in management's capital allocation decisions. For instance (1)
INDUS used excess cash to acquire strong niche players at multiples of
5.5-6.5 EV/EBIT last year (as stated by the CEO Schmidt) at a time when
valuation multiples have come down considerably and other companies
hesitated to invest money. At the same time, INDUS was disciplined enough to
spend only c. EUR 35m (eNuW) of its total M&A budget of EUR 70m in FY24e by
focusing on high margin acquisitions with an attractive return on invested
capital. This shows us that management also prioritizes value creation above
growth.
(2) In addition, INDUS repurchased c. 1.85m shares (6.9% of total shares) at
an average price of EUR 22.45 via two tender offers and a still ongoing open
market buyback program. Considering the current undervaluation of the stock,
the repurchased shares offer an attractive ROIC as well.

Reiterate BUY with an unchanged PT of EUR 34, based on FCFY'24e.

You can download the research here: http://www.more-ir.de/d/31609.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
++++++++++
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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2064923 10.01.2025 CET/CEST

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