ASW reported FY 2022 sales of CHF 18.5m (+18% yoy), better than expected (eNuW/eCons: CHF 17.5m) and ahead of its guidance (CHF 17-18m). Strong growth of the subscription segment (+28% yoy to

CHF 13.1m

; 70% of sales) was driven by an

increasing

underlying

demand for first and business class flights of ASW members and the addition of Emirates Skywards flight miles program for ASW's prestige and signature members in September 2022. Sales of the Service segment remained flat at CHF 5.4m.

EBITDA came in at CHF 2.5m, up 4% yoy. Importantly, the miss compared to market expectations (eNuW: CHF 2.7m , eCons: CHF 2.7m) and the company's guidance of CHF 2.6-2.8m was only due to a negative one-off effect (some CHF 0.25m) stemming from

 an effective write-off of the terminated IP rights deal with PMG .

 Adj. EBITDA came in slightly above expectations at CHF 2.8m. The adj. EBITDA margin of 14.8% (down 0.6pp yoy) was burdenend by higher personell costs.

For FY 23e, ASW guides for CHF 20-22m sales and CHF 2.6-2.8m EBITDA, implying an EBITDA margin of 11-14%. While the margin guidance is below our old estimate of 15.9%, we expect management

to have guided rather

conservative due to an increased complexity of air mile redemption programs by Miles and More and ASW's investment in new initiatives, that still need to materialize: The GHA Discovery partnership, the ASW Collection expansion and the addition of Emirates Skywards for premium members should begin to show a small bottom line contributions in FY 23e, but notably increase towards the end of FY 24e (eNuW: 15.1% EBITDA margin). FY 23e should therefore mark a transition year with limited sales and EBITDA growth before ASW's above mentioned initiatives gain traction.

ASW Collection's number of bookings grew by 150% yoy, now counting more than 1,500 hotels at 466 destinations all over the world with 41% of users booking two or more stays already, should provide the company with high cross selling potential, especially thanks to a solid base of 66k (+4.3% yoy) of high income members keen on travelling.

Moreover, ASW shows strong balance sheet metrics: A comfortable cash position of CHF 4m vs. CHF 9.3m debt outstanding, amounts to a net debt of 5.3m which can be paid back thanks to solid operating cash flows within the next 3 years

(eNuW: CHF 6.6m FCF 2023-25e).

We reiterate our BUY rating with reduced PT of CHF 6.40 (old: CHF 7.40), based on DCF.