Topic: mVISE released preliminary Q1 results, showing a significant profitability improvement. In detail:
Q1 sales came in at € 1.8m, which should have been slightly below the Q1'24 figure (no prior year figure available), caused by the ongoing restructuring process and the reorganization of the business model. Mind you, the company was reducing its workforce in order to achieve improved utilization rates as well as actively discontinuing low-margin projects.
On the contrary, mVISE was able to further improve EBITDA to € 0.3m, implying a 17.2% margin. This also marks a substantial margin expansion of 11.9pp yoy, which should have been predominantly driven by the aforementioned efficiency measures. Importantly, this figure does not include the one-off positive effect in connection with the debt waiver that took effect in February (€ 0.3m). Overall, the Q1 EBITDA already equals the total H1'24 EBITDA figure.
Guidance confirmed. Against this backdrop, management confirmed the FY25e outlook, targeting an organic EBITDA of € 1.3m, implying a 15% yoy increase. We continue to regard this as conservative, as we forecast an EBITDA of € 1.6m. On the other hand, sales should continue to decline to € 8.7m (eNuW) given the continuous restructuring, before we are set to see an expanding top-line again in FY26e (eNuW: +6.1%).
Overall, the release of the preliminary Q1 figures once again underscores the successful transformation of the business, which should become even more visible with EBITDA margins north of 20% from FY26e onwards.
In our view, this is still not reflected at all in the share price given an 11.5x EV/EBITDA FY25e (8.5x FY26e. We hence reiterate BUY with an unchanged € 1.30 PT based on DCF.
ISIN: DE0006204589
