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

13.05.2025 / 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
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: 13.05.2025
Target price: EUR 1.30
Target price on sight of: 12 months
Last rating change:
Analyst: Philipp Sennewald

Q1 in line as profitability improves further

Yesterday, QBY released a solid set of Q1 results, showing steady implied
sales growth as well as margin and cash generation expansion. In detail:

Q1 reported sales decreased by 1.5% yoy to EUR 46.6m (eNuW: EUR 46.5m). Mind
you, that QBY performed an accounting change this year, resulting in lower
reported sales, as the company only reports the profits from certain
customer relationships in accordance with IFRS 15. Taking this into account,
sales increased yoy by 2% according to management. In contrast to recent
quarters, this was predominantly driven by the Consulting segment, which
even grew 4.2% in reported sales to EUR 14.8m. More importantly though the
segment's gross margin was increased by 5.1pp yoy to 13.5%, which was mainly
caused by an increased near- and off-shoring ratio of 16% (+2pp vs FY24), a
better utilization as well as a generally increased sales focus on
consulting and development. As the Managed Services gross margin also
slightly improved to 21.5% (+0.5pp yoy), overall gross margin improved by
1.8pp to 19.3% (EUR 8.9m gross profit).

Against this backdrop Q1 EBITDA increased disproportionately by 16.7% to EUR
2.3m (eNuW: EUR 2.5m), implying a 5% margin (+0.8pp yoy). This was even
negatively impacted by a EUR 0.3m one-off in connection with a customer
insolvency, which is largely explaining the gap to our estimate. Overall,
the improved gross margin should have been the main reason for the EBITDA
margin expansion.

The company was also able to convert 78% of EBITDA into FCF, resulting in a
EUR 1.8m FCF (+33.5% yoy). With this, net cash per Q1 amounted to EUR 28.3m
(incl. leases), providing the company with a comfortable M&A war chest.
Here, we expect at least one deal this year, which should either increase
the company's public sector exposure (e.g. health care, energy) or allow for
regional expansion.

On the back of the strong release, management also confirmed the FY25
guidance of EUR 184-190m sales (eNuW: EUR 190m), EUR 12-15m EBITDA (eNuW: EUR 14.7m)
as well as positive net income (eNuW: EUR 1.5m). In our view, Q1 should serve
investors with confidence, that QBY is able to deliver on the outlook and
might even achieve the upper end of it. Mind you, that Q4 is the seasonally
strongest quarter of the company.

Reiterate BUY with an unchanged EUR 1.30 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/32570.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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2135800 13.05.2025 CET/CEST

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