Topic: Multitude reported a strong set of Q2 figures with improved bottom line, above our estimates. Further, management confirmed its FY24 EBIT guidance. In detail:

• Interest income came in at € 64.7m (16% yoy, 1% qoq), below our estimates of € 67.2m, due to a lower Consumer Banking topline (-1% qoq, 9% yoy, vs eNuW: € 56.6m) overcompensated by the strong growth in the SME banking to € 8.3m (8% qoq, 47% yoy, vs eNuW: € 8.1m) and in the Wholesale Banking to € 2.8m (22% qoq, 183% yoy, vs eNuW: € 2.5m). The net loan book (NAR) grew only slightly to € 594m (1% qoq, 15% yoy, vs eNuW: € 600m), while the debt investments (Wholesale Banking) increased significantly to € 103m (51% qoq, 69% yoy, vs eNuW: € 80m).
• EBIT jumped to € 16.8m (45% qoq, 44% yoy), mainly driven by lower impairments that are back on track at only € 23.8m (-16% qoq, 17% yoy, vs eNuW: € 26.9m) or 36.9% of sales, while S&M, personnel and other operating expenses remained stable. As anticipated, interested expenses came in higher at € 11.4m (31% qoq, 115% yoy, eNuW: € 9.4m), caused by 1) the growth of the loan book, 2) the higher avg interest costs that move with a delay of c. 6-18 months (eNuW) to the ECB rate and 3) a € 1.4m bond-related one-off. Still, EBT of € 5.4m (80% qoq, -21% yoy), carried by the lower impairments, beat our expectation (eNuW: € 4.8m).

Overall, Multitude delivered a strong Q2 with improved risk management visible in declining impairments and ongoing tight cost control resulting in stable OPEX. While the Consumer Banking is currently the only EBIT contributor, we expect the strong growth of the loan book in the SME and Wholesale Banking to materialize within the next quarters resulting in meaningful EBIT contribution. With that, the confirmed EBIT guidance of € 67.5m looks achievable. Nevertheless, we play it safe expecting only € 61.4m EBIT in FY24 as of now, leaving room for upgrades.

For a growing, highly profitable, resilient and dividend paying company the stock still looks undebatable cheap trading at only 4x PE´25.

BUY with an unchanged PT of € 12 PT, based on our residual income model. Hence, Multitude remains one of our NuWays Alpha picks for FY24.