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

08.05.2025 / 09:00 CET/CEST

Dissemination of a Research, transmitted by EQS News - a service of EQ

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: 08.05.2025

Target price: EUR 1.30

Target price on sight of: 12 month

Last rating change:

Analyst: Philipp Sennewald

Q1'25e set for further profitability improvement

Topic: Next Tuesday, q.beyond is going to release its Q1 report, which i

seen to show further improvements on the bottom-line and provide confidence

regarding the company's FY25 outlook. In detail:

Q1 sales are seen to slightly decline by 1.4% to EUR 46.5m (eNuW). Yet, the

expected decline is solely due to accounting in accordance with IFRS 15. A

a result, a total of EUR 12.6m of FY24 sales, which are mainly related to SAP

and Microsoft contracts, will no longer be accounted as revenues, as only

the profits from the respective customer relationshops will be accounted

for. Eliminating this effect, sales growth should be in the low to mid

single-digit % range (eNuW). This should again be driven by Managed

Services, but also a recovery of Consulting. Here we expect a significant

improvement on the gross margin side to 12% (+3.6pp yoy). Overall gro

margin is seen to come in at 19.3%, implying EUR 9.0m gross profit.

Q1 EBITDA is expected to improve strongly by 27.6% to EUR 2.5m (eNuW),

implying a 5.5% margin. Main drivers behind this should be again an improved

near- and off-shoring ratio, which management aims to lift to 20% by YE'25

(14% as of FY24). This alone should explain a good part of the gross margin

improvement. Moreover, the anticipated recovery of Consulting is seen to be

a further driver. Given an improved utilization, margins in the region of

20% should be absolutely achievable going forward.

With this, the company should be well on track to achieve the FY25 guidance.

While the sales outlook looks conservative, implying 2.2-5.6% growth

(excluding the aforementioned accounting effect; eNuW: +5.5%), the q.beyond

should be able to achieve the upper end of the communicated EBITDA target of

EUR 12-15m (eNuW: EUR 14.7m), as we expect gradual improvements as well as a

seasonally strong Q4.

Putting all this aside, inorganic growth is likely to become a factor a

well, as implied by CEO Rixen during the latest conference calls. In fact,

with EUR 30m net cash (incl. leases) management has a well equipped war chest

on hand to tap the M&A market. Here, we regard targets with a high public

sector exposure (health-care, energy, defense) as likely, given the recent

infrastructure special funds and the debt break suspension in Germany.

Reiterate BUY with an EUR 1.30 PT based on DCF.

You can download the research here: http://www.more-ir.de/d/32508.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

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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschlu

bestimmter Börsengeschäfte.

Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben

analysierten Unternehmen befinden sich in der vollständigen Analyse.

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2132716 08.05.2025 CET/CEST

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