In light of the ongoing restructuring process as well as macro-headwinds, we observed a rather uninspiring operating performance, especially on the bottom-line, as of 9M ‘23. Despite that, q.beyond is seen to achieve its FY ’23 guidance: €185-191m sales, € 5-7m EBITDA and > € -4m FCF. While the lower end of the sales guidance should be reached (eNuW: € 186m) and FCF generation should even be positive (eNuW: € 1.4m), meeting the EBITDA outlook (eNuW: € 5.1m) still depends on a decision by the tax authorities concerning the Plusnet sale in 2019. The group's operating EBITDA looks set to come in at only € 0.3m (eNuW).

That said, the company is seen to publish preliminary FY figures in early March, (final: March 30th) as well as an initial FY ’24 guidance. As management aims to reap the fruits of the imposed efficiency measures in connection with the 2025 Strategy, investors should expect an outlook, targeting sales growth in the mid-to-high-single-digit range (eNuW: +7%; eCons: +5.4%), positive FCF generation (eNuW: € 5.3m; eCons: € 3.7m) as well as EBITDA of € 6-9m (eNuW: € 6.1m; eCons: € 8.1m).

As a reminder, with the 2025 Strategy, management set itself three strategic priorities: (1) Ongoing focus on key verticals (retail, logistics & manufacturing) coupled with an expansion of the consulting and development business, (2) effective go-to-market with an increased emphasis on the indirect sales channels (35% of Q3 order intake) as well as (3) the continuous implementation of One q.beyond, which is the company’s current efficiency program. Here, the focus is on streamlined processes via the elimination of duplicate structures, an optimized order-to-cash process and an increased near-/off-shoring share (target: >20% vs c. 10% currently).

While some of those measures, such as the improved receivables management, already took effect (improved FCF guidance (old: > € 8m), the implementation of One q.beyond is seen to fully unfold from 2024e onwards, thus allowing for expanding margins.

We hence turn cautiously optimistic but keep our PT unchanged at € 1.00. While the stock should have downside protection thanks to the € 37m net cash position as well as a land plot in Hamburg (€ 17m book value), an upbeat FY guidance in March as well as a strong start into the year (Q1 to be released on May 8th) could serve as re-rating catalysts. Remains a BUY.