Preliminary Q3 sales came in at € 30.6m (eNuW: € 34.2m), a 3.4% yoy increase (-2% qoq). The slow growth can be explained by several larger projects/orders whose delivery/call-off had been scheduled for Q4 or has even been pushed into 2024. While customers are generally more cautious, overall demand for the company's solutions remains high. Preliminary EBIT grew by 5.7% yoy to € 3.7m (12.1% margin), shy of our € 4.1m estimate due to lower sales volumes, yet clearly above the first half's profitability of 8.7%.

FY guidance (single-digit yoy sales growth and EBIT margin improvement) remains unchanged. As previously communicated, management expects a disproportionally strong Q4 due to confirmed call-off dates of formerly delayed orders, several new projects within structurally growing markets (e.g. a plant phenotyping solutions worth € 5-6m and the handheld solutions from Spectral Engines) and the order backlog of € 70m. Our new (slightly trimmed FY23 estimates) imply Q4 sales of € 37.6m (+14% yoy) with an EBIT margin of 19.7% (+5.8pp yoy).

What’s more, Nynomic continues to drive its internationalization. As its US business has significantly grown in importance during recent years (from € 17.8m in FY19 to € 38.2m in FY22) the company founded its 12th pillar within the group, Photecture, which will (for now) focus on sales of the group’s subsidiaries without own sales structures in he US. In our view, this should drive sales of the group’s smaller pillars such as Spectral Engines.

Additional acquisitions looming. As per its Buy & Build strategy, management remains confident about signing at least one additional acquisition until the end of the year. Following the € 18.9m capital increase in May, Nynomic can resort to ample financial fire power of up to € 60m (assuming a max. leverage of 2x EBITDA). With this, the company should be able to also consider larger targets (> € 20m sales) that broaden its technology offering.

Nynomic continues to look poised for attractive sales and margin growth in the mid-term as reflected by the recently raised mid-term guidance (€ 200m sales and a 16-19% EBIT margin during the next 3-5 years). At a valuation of 8.1x EV/EBIT 2024e, this does not seem adequately reflected in the share price. BUY with a € 54 PT (old: € 57) based on DCF.