Q4 sales increased by 5% yoy to € 34.6m (eNuW € 37.6m) as the company was able to book several development projects towards the end of the year, realized first revenues from larger plant phenotyping orders (Green Tech FY segment sales +44% yoy to ~ €25m) and overall solid demand across the group, especially from its semiconductor customers. FY23 grew by 1% yoy to € 118m, meeting the company’s guidance of “single-digit” yoy growth but falling slightly short of market expectations of € 121.5m.

The Q4 EBIT margin (seasonally strongest quarter) came in at 20.5% (+6.6pp yoy), meeting our and market estimates; FY23 EBIT margin grew 0.2pp yoy to 13.1%, in line with the guidance and consensus. The margin increase was despite further investments into future growth (R&D and personal expenses +5 and +13% yoy) mainly as a result of an improving product mix, visible in the strong gross margin improvement; +4.9pp yoy to 63.7%.

While the order backlog stood at only € 54m (FY23 book-to-bill ratio of 0.7x), it is important to note the lumpy (partially due to the sizes of individual orders) nature of the business. We hence see no structural headwinds implied in this figure. In fact, during the earnings call management pointed towards improving order intake during H1.

Management released a rather muted FY24 sales guidance (EBIT margin to further increase), expecting “at least single-digit percentage growth”, which already includes consolidation effects from last year’s acquisitions (eNuW 4% yoy growth). Yet, as highlighted during the earnings call, the initial guidance should be on the conservative side as the company should be able to tap several pockets of growth, including (1) unbroken demand from semi customers, (2) fulfilment precision farming orders, (3) TactiScan gaining traction and (4) a structurally growing medtech market.

Acquisitions to potentially add onto growth. As per its Buy & Build strategy, Nynomic is seen to acquire 1-2 companies during the next six to twelve months, in our view. The focus should lie on expanding its technology and solutions portfolio. While the last acquisitions were rather smaller the company's balance sheet would also allow larger targets with up to € 20m sales. This bodes well with the company’s mid-term targets of € 200m sales and an EBIT margin of 16-19%.

We confirm our BUY rating with a new € 52 PT (old: € 54).