Topic: NAGA recently reported FY23 figures that came with a slight miss on the topline and a positive surprise on the bottom line. A D&A one-off makes EBIT look ugly. In detail:

• Sales of € 39.7m (NAGA standalone), are below prelims of € 45.5m resulting from the lower than anticipated avg. revenue per trade of only € 4.3 (vs. eNuW:  € 4.9) and 9.2m transactions (both NAGA standalone).
• EBITDA came in higher than expected at € 8.4m (vs. prelims: € 7.0m), thanks to significantly lower marketing expenses (€ 4.6m vs. eNuW: € 5.9m), personnel expenses (€ 6.5m vs eNuW: € 7.9m) and R&D costs (€ 3.4m vs. eNuW: € 5.2m) overcompensating for the weaker topline and higher other operating expenses (€ 9.8m vs. eNuW: € 5.9m). EBT of € -61m (vs. eNuW: € -2.4m), is mainly burdened one-off amortization to the tune of € 57m as a result of the valuation related to the merger with capex.

Looking into 2024, the outlook for the joint Group shines bright: Trading activity of peers that seem to revitalize and cross-selling potentials between NAGA and capex should fuel the number of transactions to 15.9m and hence sales to € 71.8m, assuming an avg. revenue per trade of € 5.0. Synergy effects and ongoing disciplined spending are expected to additionally drive EBITDA to € 11.5m. As we do not expect further meaningful amortizations in FY24, EBIT should come in at € 1.6m (eNuW).

Going forward, management has ambitious growth plans expecting to generate USD 250m sales with a 40% EBITDA margin until FY26. While we think this is a rather optimistic scenario, the past has already shown that an incremental positive change of the public markets' sentiment could have an enormous effect on the P&L of NAGA. The leverage of the joint Group could even scale this effect. Still, in our base case scenario we conservatively only anticipating € 90m in sales and EBITDA of € 19m (22% EBITDA margin), leaving room for positive surprises.

Overall, the revitalization of customer activity in the brokerage space, paired with cross-selling and synergy effects arising from the merger should bode well for NAGA. Details of the growth plan should be unveiled during today´s CDM starting at 4pm CEST.

BUY with an unchanged PT of € 1.20 based on DCF.