Original-Research: INDUS Holding AG - from Parmantier & Cie.

Original-Research: INDUS Holding AG (von Parmantier & Cie. GmbH): Buy

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18.11.2024 / 15:05 CET/CEST
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Classification of Parmantier & Cie. GmbH to INDUS Holding AG

     Company Name:                INDUS Holding AG
     ISIN:                        DE0006200108

     Reason for the research:     Update Q3 2024
     Recommendation:              Buy
     from:                        18.11.2024
     Target price:                34.30
     Target price on sight of:    12 month
     Last rating change:          no change
     Analyst:                     Daniel Großjohann, Thomas Schießle

2024 guidance after Q3 confirmed in key points, public share buyback offer
announced
*Closing price XETRA (15 November 2024)
INDUS Holding AG generated sales of EUR 443.1 million in Q3 (9M 24: EUR 1,282.2
million; Q3 23: EUR 459.7 million), which was still 3.6% below the previous
year's figure, but exceeded the H1 quarters of 2024. The Q3 EBITA margin
(9.9%) was also higher than the H1 figure (8.8%). The annual, scheduled
impairment test led to a total impairment of EUR 6.7 million and had a
negative impact on EBIT. 9M earnings after taxes (EUR 50 million; +15.2%) and
9M EPS (EUR 1.89; +18.1%) exceeded the previous year's figures, which were
negatively impacted by the result from discontinued operations. The already
challenging environment for SMEs has not been made any easier by the
political uncertainty (Germany, USA). The remarkable improvement in group
sales and the operating margin during the year can therefore not yet be seen
as a sustainable turnaround with a view to 2025. However, we believe that
the INDUS share is still trading below its fair value, so the new public
share buyback offer is consistent with this. Due to the high quality of the
portfolio companies, the shareholder-friendly dividend policy (buyback
programme; dividend yield > 5%) and the attractive valuation (P/E 2024e:
8.4), the INDUS share remains a Buy.
INDUS has already paid out around EUR 56 million to shareholders in H1 2024
via the regular dividend and a share buyback programme. A public buyback
offer has now been announced (from 12.11.24 to 25.11.24; max. volume: 0.7
million shares at EUR 21.65) and a subsequent buyback programme (volume: max.
0.2 million shares or max. EUR 5 million). The repurchased shares are expected
to be cancelled subsequently.
Outlook for 2024: INDUS has confirmed the key points of its guidance despite
the challenging environment. Sales are still expected to be between EUR 1.7
billion and EUR 1.8 billion and the EBIT margin between 7% and 8%. The free
cash flow target (> EUR 110 million) was also confirmed. In terms of EBIT, the
result of the annual scheduled impairment test was the main reason for
lowering the EBIT target to a target corridor of EUR 115 million to EUR 125
million (previously EUR 125 million to EUR 145 million).


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This research report ('Investment Recommendation') was prepared by
Parmantier & Cie. Research, with contributions from Mr. Grossjohann, and is
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investment recommendation is based on publicly available information
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You can download the research here: http://www.more-ir.de/d/31349.pdf

Contact for questions:
Kontakt:
PARMANTIER & Cie. GmbH
[e-mail]

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2032341 18.11.2024 CET/CEST