Topic: INDUS released solid preliminary FY24 numbers with sales in line and EBIT slightly above our estimates and the company’s guidance range. Further, with already three acquisitions, INDUS’ M&A pipeline is in full swing.

Preliminary FY24 sales came in at € 1.72bn (eNuW: € 1.72bn; guidance € 1.70-1.80bn), 4.5% below last year due to the challenging macro environment. However, compared to H1’24, the topline already improved notably with € 882m sales in H2’24 vs. € 839m in H1’24. Q4’24 stayed flat yoy at € 439m.

Preliminary FY24 EBIT decreased 15.3% yoy to € 127m (eNuW: € 121m; guidance € 115-125m) due to negative economies of scale and price pressure in Materials. Q4’24 EBIT dropped 5.6% to € 30.8m. Nevertheless, despite the difficult economic environment, INDUS could still achieve a solid FY24 EBIT margin of 7.4% (-0.9pp yoy; c. 7.0% in Q4).

Engineering sales remained roughly unchanged yoy at € 597m (eNuW: € 580m) while EBIT declined 20% yoy to € 46m (7.7% margin) due to an unfavorable product mix in H1. Materials sales came in at € 565m (eNuW: € 570m), 8.9% below last year affected by price pressure and volume decline in particular in the agricultural and construction technology field. EBIT dropped by 20% yoy to € 46m with a still solid 8.2% margin. Infrastructure sales declined slightly by 3.9% to € 560m (eNuW: € 567m) and EBIT rose by 6.1% yoy to € 52m (9.4% margin) despite a subdued housing construction supply sector.

Strong acquisition side: INDUS has already announced three add-on acquisitions this year all with closing date on 01.01.2025. Two of them, the Swedish Electro Trading ET AB (c. € 5m sales) and the German Kettler GmbH (c. € 9m sales) were acquired by Hauff-Technik, which belongs to the Infrastructure segment. The third company HBS Bolzenschweiss-Systeme GmbH & CO. KG (c. € 13m sales) was acquired by Peiseler group, which is part of Engineering. All companies show solid profitability with EBIT margins above 10% and we estimate the acquisition multiples to be in the range of 5.5-6.5 EV/EBIT. Hence, the purchase price should be around € 21m in total (eNuW). INDUS is showing a disciplined and thoughtful approach to M&A in our opinion by acquiring established niche players at reasonable multiples.

Reiterate BUY with an unchanged PT of € 34 based on FCFY’24e.