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

06.03.2025 / 09:01 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
invitation to conclude certain stock exchange transactions.

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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: 06.03.2025
Target price: EUR 1.30
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald

FY24p beats profitability expectations; chg. est. & PT

Topic: QBY released FY24 preliminary figures, where top-line was in line
with expectations but EBITDA significantly ahead of the company's guidance
and especially our estimates. In detail:

FY24 sales came in at EUR 193m, which is in line with our and street's
estimates (both EUR 193m). Sales were once more driven by the Managed Services
segment (+4.9% yoy to EUR 135m) while the Consulting segment showed a 5.7% yoy
decline to EUR 57.3m.

Strong gross margin improvement by 3.4pp yoy to 18.0% driven mostly by an
improved near- and offshore ratio of 14% at YE. Thanks to the
discontinuation of low margin consulting projects as well as a further
expanding near- and off-shore ratio, gross margin is seen to further improve
to over 20% in FY25e.

EBITDA beat. FY24 EBITDA came in at EUR 10.5m, thus significantly beating our
estimate of EUR 9.2m, consensus (EUR 9.2m) as well as the company's guidance (EUR
8-10m). Besides the improved gross profit, efficiency measures in SG&A were
the main drivers behind the stronger than expected improvement (+83% yoy
even including last years positive one-off).

The strong release was topped off by a strongly improved FCF of EUR 3.2m
(company definition). Mind you, that QBY defines FCF as the total change in
net liquidity (excl. M&A). According to our calculation, FY24 FCF should
have come in at EUR 5.7m.

In addition to the release of the preliminary figures, management also put
out an FY25 guidance, targeting sales in the range of EUR 184-190m, an EBITDA
of EUR 12-15m as well as sustained positive net income. While the EBITDA
outlook is in line with our old estimates (EUR 14.6m), our sales figure was
significantly above with EUR 204m. The gap is mainly explained by an
accounting change. In accordance with IFRS 15, a total of EUR 12.6m FY24
sales, mainly related to SAP and Microsoft contracts, will no longer be
accounted as revenues, as only the profits from the respective customers
relationships will be accounted.Hence, the new guidance has to be put into
perspective with a base revenue of EUR 180m, implying 2.2-5.6% growth.

EUR 30m M&A war chest. During yesterday's CC, CEO Rixen confirmed that the
company is at an advanced stage to acquire 1-2 targets in FY25. Here, the
management is looking for margin accretive targets with EUR >10m sales. Given
the recent announcement of the (likely) new government intending to spend
big on defense and infrastructure going forward, the company will likely
look for targets with a high public sector exposure (healthcare, energy,
defense), which was also confirmed during the CC. Rixen also explained that
the company could spend up to EUR 30m on M&A given the company's strong net
cash position. Mind you, that future M&A is not reflected in our model, thus
providing upside to our estimates.

Given the strong release as well as the promising outlook, valuation remains
attractive at 3.2x EV/EBITDA FY25e (1.9x FY26e)

We reiterate BUY with a new EUR 1.30 PT (old: EUR 1.10) based on DCF.

You can download the research here: http://www.more-ir.de/d/31906.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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2096242 06.03.2025 CET/CEST

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