Buy
|
Original-Research: Scandinavian Astor Group AB - from NuWays AG
Classification of NuWays AG to Scandinavian Astor Group AB
Another deal unlocks opportunities in the Baltics, PT up. Yesterday, Astor announced the acquisition of AMMUNITY and with that the market entry into the Baltics. Astor has yet again pulled off a strong M&A deal by acquiring AMMUNITY for only 4.4x EV/EBITDA. The company is based in Riga and is Latvia’s only manufacturer of military small arms ammunition and a leading provider of fine caliber ammunition in the Baltics (all NATO standard) for Armed Forces/procurement agencies in the Baltics. With FY’24 sales of SEK 103m (+80% yoy) and a 21% EBITDA margin, the company shows a strong growth and profitability profile, underpinned by a standing contract with the Latvian government worth SEK 400m coupled with an option for further SEK 400m. Moreover, it has additional request for ammunition worth SEK 360m from a third customer, thus leading to a total soft order backlog of SEK 1.16bn (i.e. >10x FY’24 sales), creating a strong visibility on demand, in our view. Perfect strategic fit and door opener into the Baltics. Next to strong fundamentals, this acquisition looks set to perfectly fit into Astor’s product portfolio. By now serving ammunition (next to drone and radar jammers, composite parts and various other high-tech equipment), it diversifies the revenue mix and gives it a slightly more recurring touch. More importantly, Astor now has a foot in the door at the Baltic Armed Forces/procurement agencies and thus enters the Baltic defence market by potentially up-selling all of Astor’s product portfolio. Also, the other way, Astor can now also offer the Scandinavian Armed Forces/procurement agencies with supply of ammunition from the close neighbor Latvia, which currently mostly rely on the Norwegian company 'Nammo' for their ammunition supply. Astor to fund growth investments. The strong demand for ammunition directly creates the need to expand, whose expenses are likely to be financed by the parent company Astor, given that further debt intak at AMMUNITY (200% net debt/equity, based on acquisition value of equity) should not be healthy. In our view, this should also explain the comparably low acquisition multiple, as it does not contain the upcoming growth investments. Against this backdrop, we confirm our BUY recommendation. We now incorporate the recent M&A (100% of Carbonia; 39% of NSG/Cesium, recorded at equity and now 100% of AMMUNITY) in our estimates, as we assume the closings to go through as announced. Therefore, we raise our estimates accordingly and arrive at a new PT of SEK 54 (old: SEK 40), based on DCF. You can download the research here: http://www.more-ir.de/d/32862.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. ++++++++++
The EQS Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. |
||||||||||||||||||||
2156164 17.06.2025 CET/CEST
P R O D U C T S U G G E S T I O N S
The information presented here has been provided by our content partner EQS-Group. The originator of the news is the respective issuer, the company relating to the news, a publication service provider (press or information agency) which uses the distribution service of EQS to transmit company news to shareholders, investors, investors or interested parties. The original publications and other company-relevant information can be found at eqs-news.com.
The information you can access does not constitute investment advice. The presentation of our cooperation partners, where the implementation of investment decisions would be possible depending on the individual risk profile, is solely at the discretion of the person using the service. We only present companies of which we are convinced that the range of services and customer service will satisfy discerning investors.
If you are considering leverage products, familiarise yourself with the typical characteristics of the financial instruments beforehand. Take the time to determine the risk content of the planned investment before making an investment decision. Bear in mind that a total loss cannot be ruled out with leverage products.
For newcomers to the subject, we offer various options in both the training and the tools section, through which you can train theoretical knowledge and practical experience and thus improve your skills. The offer ranges from participation in webinars to personal mentoring. The range is continuously being expanded.
1 Lab features are usually functionalities that emerge from the think tank of the investor community. In the early stages, these are experimental functionalities whose development process is largely determined by use and the resulting feedback from the community. When integrating external services or functionalities, the functionality can only be guaranteed to the extent that the individual process elements, such as interfaces, interact with each other.