Original-Research: INDUS Holding AG - from NuWays AG

Classification of NuWays AG to INDUS Holding AG

Company Name: INDUS Holding AG
ISIN: DE0006200108

Reason for the research: Update
Recommendation: BUY
from: 15.03.2024
Target price: 36.00
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Christian Sandherr

Bolt-on acquisitions into global megatrends; chg.

Topic: INDUS successfully completed the share repurchase program announced on February 21st. Further, the German conglomerate expanded their portfolio in the field of infrastructure networks and AI-based industrial automation.

Share buyback at an attractive price: During the period from February 22nd to March 1st, INDUS conducted a public buyback for 1.1m shares at a price of € 23 per share, which are now held as treasury shares. The volume amounts to € 25.3m in aggregate or approximately 4.09% of the company’s share capital. At the current trading price INDUS offers an attractive return on investment capital, thus we view the buyback as a good capital allocation decision.

Investment into Germany’s future infrastructure: INDUS announced the successful acquisition of the remaining 50% stake in Hauff-Technik GRIDCOM (sales: € 21m). By that, they are strengthening the existing portfolio in the field of infrastructure networks with the subsidiaries Weigand Bau GmbH and Turmbau Steffens & Nölle GmbH. Hauff-Technik GRIDCOM produces passive components for the fiberoptic infrastructure. INDUS became already in 1986 the sole shareholder of Hauff-Technik GmbH & Co. KG, which acquired 50% of Hauff-Technik GRIDCOM in 2016. While the purchase price was not disclosed, we would expect it to be in the mid single-digit €m range for the 50% stake.

Investment in AI-based industrial automation: INDUS acquired Gestalt Robotics GmbH, a specialist in the field of AI-based automation for industrial applications (sales: € 5m). We expect the acquisition price to be in the low to mid single-digit €m range. By acquiring Gestalt Robotics, INDUS is expanding its engineering segment and lays the foundation to profit from the fast growing AI market.

Attractive cashflow generation: INDUS delivered a preliminary FY23 FCF north of € 190m, materially improving yoy (FY22: € 102m) and exceeding the management target of € 100m, thanks to further noticeable working capital normalizations. Supported by the divestment of the loss-making automotive-related business in FY23, we expect INDUS to deliver FCF of € 100m in a normalized year, making it a cash cow with an attractive normalized FCF-Yield of c. 9%.

INDUS remains attractively priced trading at only 4.3x EV/EBITDA 2024e, which is 28% below its 10y historical average. Hence, we reiterate BUY with an unchanged PT of € 36 based on FCFY 2024e.

You can download the research here:
http://www.more-ir.de/d/29165.pdf
For additional information visit our website www.nuways-ag.com/research.

Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden: www.nuways-ag.com/research. NuWays AG - Equity Research
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LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany ++++++++++
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