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

12.11.2024 / 09:02 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 q.beyond AG

Company Name: q.beyond AG ISIN: DE0005137004

Reason for the research: Update Recommendation: Buy from: 12.11.2024 Target price: EUR 1.10 Target price on sight of: 12 months Last rating change: Analyst: Philipp Sennewald

Q3 in line with est.; consulting on the road to recovery

Topic: QBY released Q3 results that were largely in line with our estimates on the top- and bottom-line. Especially profitability remains on a strongly improved level compared to the previous year. In detail:

Q3 sales increased 3.5% yoy to EUR 47.0m (eNuW: EUR 47.3m; eCons: EUR 47.4m), again driven by the managed service segment but also a sequential improvement of the consulting segment. Managed service sales increased 6.2% yoy to EUR 32.9m (eNuW: EUR 32.8m) and achieved an improved segment gross margin of 79.9% (+1pp yoy). On the other hand, the consulting segment saw a further decline, as sales were down 2.6% yoy to EUR 14.1m (eNuW: EUR 14.5m). Yet, we saw a sequential improvement of 4.2% qoq, which is pointing towards a recovery, in our view, as the segment gross margin also improved slightly by 0.4pp qoq to 7.1%. Mind you, management targets to substantially increase the consulting margin going forward, driven by an increased utilization as well as a higher near- and off-shoring ratio (target: 20%; 13% at Q3 '24). Overall gross profit came in at EUR 7.6m (eNuW: EUR 7.8m; eCons: EUR 8.4m, implying a margin of 16.2% (+0.9pp yoy).

Against this backdrop, Q3 EBITDA improved significantly to EUR 2.2m (vs. EUR -0.1m in Q3 '23; eNuW: EUR 2.2m; eCons: EUR 2.3m), implying a 4.6% margin. The drivers behind the improvement were significant reductions in sales & marketing (-14% yoy) as well as G&A expenses (-12% yoy) following the successful implementation of the One q.beyond strategy.

On this basis, management confirmed the FY guidance of EUR 192-198m (eNuW: EUR 193m; eCons: EUR 193m), EBITDA of EUR 8-10m (eNuW: EUR 9.3m; eCons: EUR 9.2m) as well as positive FCF (eNuW: EUR 5.6m; eCons: EUR 4.4m). In our view, the guidance looks absolutely achievable, especially given the seasonally strong Q4 ahead. At 9M, FCF arrived at EUR 4.7m, which compares to EUR 2.6m in the same period last year.

Overall, the release fully underpins the case in accordance with management's Strategy 2025, targeting an EBTIDA margin of 7-8% (eNuW: 7.1%; eCons: 6.8%) as well as sustained positive net income (eNuW: EUR 2.1m; eCons: EUR 1.4m).

Reiterate BUY with an unchanged EUR 1.10 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/31277.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 ++++++++++ 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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2027519 12.11.2024 CET/CEST

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Quelle: dpa-Afx