Topic: INDUS released mixed Q1 figures with sales and adj. EBITA below our expectations. However, a soft start into the year was already largely anticipated and a solid order intake gives confidence for H2'25e.
Sales came in at € 402m (eNuW: € 409m), 1.9% below last year due to a challenging economic environment. While sales in Infrastructure grew by 3.4% to € 136m partly due to the acquisition of GRIDCOM, sales in Engineering declined by 4.8% to € 123m, primarily as a result of lower sales in sorting systems, clean room systems and measurement technology for vehicles. Materials Solutions sales decreased by 4.1% to € 143m mainly due to the discontinuation of IMECO.
Order intake increased 2.6% yoy to € 455m with a strong demand in Engineering (+19.5% yoy) thanks to major long-term plant engineering orders (automotive and logistics) compensating for a softer Infrastructure (-7.8% yoy) and Materials Solution segment (-2.9% yoy). Order backlog increased by 4.4% yoy to € 665m but remains at a relatively low level.
Adj. EBITA came in at € 24.9m (eNuW: € 28.8m), a 21% decrease yoy with a 6.2% margin (-1.5pp yoy) mainly due to a weak Engineering segment. Nonetheless, like last year, a gradual improvement throughout the year with a strong Q4 is expected for Engineering. Overall, higher personnel costs despite a lower number of employees as well as a slightly higher material cost ratio (44.4% of sales vs. 44.1% in Q1'24) weighed on profitability in the first quarter.
FCF decreased to € -23.6m from € 6.1m last year, due to a € 14.3m higher seasonal increase in working capital but also higher investments.
FY'25e outlook: Last week, INDUS reduced its FY'25e guidance, especially due to export controls on tungsten compounds from China, which puts pressure on the supply chain of INDUS' largest holding BETEK (16% of FY'24 sales). Management now expects sales in the range of € 1.70-1.85bn (eNuW: € 1.74bn) and adj. EBITA between € 130-165m (eNuW: € 143m), which looks plausible to us, as we already conservatively account for a tungsten carbide shortage in H2'25e.
Reiterate BUY with an unchanged PT of € 34 per share, based on FCFY'25e.
ISIN: DE0006200108
