Topic: Nynomic published a solid start into the year with order intake returning to growth for the first time since Q3 2022. Similar to FY23, this year’s operational performance should again be back-end loaded.

Preliminary Q1 sales grew by 6.5% yoy to € 23m thanks to consolidation effects from last year’s acquisitions of NLIR and art photonics (eNuW +4.5% yoy growth) as well as solid demand across the group’s portfolio companies, despite a weak industry momentum. At the same time, Q1 EBIT stood at € 1.6m, up 6.7% yoy, with a margin of roughly 7%. Mind you, the low margin (in comparison to FY margin of >13%) is due to the seasonallity of the business, a changing product mix and limited op. leverage.

Importantly, order intake returned to growth for the first time since Q3 2022. It grew by 24% yoy and 57% qoq to € 28.7m. This does not yet include the high single-digit €m order (eNuW: € 7-8m) that the company received at the end of April (solution to further improve the efficiency and accuracy of the customer’s gas analysis); order backlog +11% qoq to € 59.6m. This should provide additional visibility regarding the mentioned sequential improvements throughout the year. 

Similar to FY23, management again expects further operational improvements in the second quarter, followed by a particularly strong second half of the year (in FY23, H2 accounted for 55% of FY sales and 70% of FY EBIT) due to the known lumpy nature of the business.

For FY24e, management continues to expect “at least single-digit percentage growth” and a further EBIT margin improvement, which compares to our estimates of 12% yoy sales growth (8% organic) and a 60bps EBIT margin improvement based on (1) unbroken demand from semi customers, (2) fulfilment precision farming orders, (3) TactiScan gaining traction, (4) a structurally growing medtech market and (5) new product launches such as LabScanner Plus.

Acquisitions could serve as additional catalyst. As per its growth strategy, Nynomic should be looking to acquire 1-2 companies (technological and geographical diversification) during the next six months. Thanks to its strong balance sheet, we also regard bigger targets (~ € 20m sales) as possible.

We confirm our BUY rating with an unchanged € 52 PT based on DCF and keep the stock on our Alpha List.