Topic: MAX released its Q3 numbers last Friday with sales below but EBITDA above our estimates.

Q3 sales came in at € 85m (eNuW: € 90m), a 15% decrease yoy due to a soft order backlog and investment reluctance across all portfolio companies except ELWEMA. EBITDA increased 17% to € 9.3m (eNuW: € 7.1m) due to a € 4.5m profit from a litigation in connection with the sale of NSM Packtec in 2018. However, adjusted by the effect from NSM Packtec, EBITDA would have been 39% lower yoy with a 2.3ppts margin decrease, impacted by economies of scale, wage inflation and product mix effects.

Order intake decreased 13% yoy to € 67m, leading to a low order backlog of € 165m (vs. € 206m in Q3’23). Major contributor to the reduction in order backlog was bdtronic with a sharp decline to € 30m in Q3’24 (vs. € 76m in Q3’23).

Bdtronic’s sales decreased 15% yoy to € 22m in Q3 and EBITDA came in at € -0.1m (€ 3.8m in Q3’23) due to a low order intake in H1’24 affected by the EV sales crisis. While bdtronic had to expand its capacities to handle the rapid demand increase during FY23, they are now suffering from a higher cost base and external personnel, which could only slowly be reduced to c. 30 end of Q3’24 from c. 120 at the peak in FY23. Further, the company still has impregnation orders from FY23 in the backlog with lower profitability that will also have a negative impact in Q4’24e. Having said that, bdtronic is still a leading expert in its field and once the cyclical demand recovers, we expect profitability to normalize.

Vecoplan showed a flat sales development in Q3 (€ 46m) but decreased its EBITDA by 40% to € 3.4m due to a less favorable product mix, a higher headcount and wage inflation. Order intake decreased by 8.9% attributable to postponements from US customers related to the election (North America: 43% of sales). We expect demand to increase in Q4’24e and modest growth for FY25e.

MA micro: MAX Automation received c. € 70m cash inflow for the sale of MA micro of which c. € 60m was used to reduce debt, lifting the equity ratio to a healthy 51% (vs. 30% in Q3’23). This should lead to an interest expense reduction of € 4-5m in FY25e (eNuW). Considering the recent deterioration of MA micro’s operating business, we don’t expect significant earn-out payments.

Reiterate BUY with an unchanged PT of € 7.00, based on DCF.