Q2 / H1‘23 headline figures had already been reported on July 21, together with an increase of the FY23e EBITDA guidance to € 38-44m (previously: € 35-38m), thanks to more efficient project management and raw material price deflation.

To recap, Q2 group sales rose by 8% yoy to € 107m while group EBITDA increased strongly disproportionately by 46% yoy to € 14.1m. Accordingly, the EBITDA margin improved by 3.4pp yoy to 13.2%.

New insights from the Q2 / H1 report pertain to the operating performance of the subsidiaries - where bdtronic stood out once again - as well as the group order intake development, which was hurt by macro uncertainties. In detail: 

• bdtronic grew Q2 sales by 47% yoy to € 23.3m, courtesy of strong demand for dosing and impregnation technology targeting above all automotive applications. Q2 EBITDA more than doubled yoy to € 5.0m, with the EBITDA margin increasing by 8.2pp to a strong 21.5%, carried by economies of scale.
• Amongst the other subsidiaries, NSM + Jücker and Elwema stood out. The former almost doubled EBITDA yoy to € 2.3m (16% margin) despite a mere 7% yoy sales growth, thanks to raw material price disinflation. The latter recorded dynamic Q2 sales growth of 64% yoy to € 12.8m while EBITDA increased roughly sixfold to € 1.9m, carried by a strong backlog and economies of scale.
• Q2 group order intake struggled amidst weak PMIs, declining by 24% yoy to € 92m, with the book to bill arriving at 0.86x. Order intake was particularly soft for subsidiaries Vecoplan (-18% yoy to € 37m), NSM + Jücker (-60% yoy to € 8m) and Elwema (-59% yoy to € 8.3m), reflecting customer’s capacity digestion, macro uncertainties and order postponements. In contrast, bdtronic recorded 11% yoy order intake growth to € 25m, which underpins the subsidiary‘s differentiated technology in structurally growing markets.

Valuation remains undemanding, with MAX trading on 6.6x EBITDA 2023e. This does not adequately reflect the value found in the company‘s portfolio of hidden German Mittelstand champions, such as bdtronic, Vecoplan, NSM + Jücker and MA micro. A potential divestment of one of these subsidiary could serve as a value catalyst. Buy with a € 7.60 PT based on DCF.