Topic: Last week, NAGA reported unaudited figures for H1´24 that came in weaker than expected on both top- and bottom line, mainly due to effects related to the merger of NAGA and CAPEX. In detail:

• Sales of € 31.6m (vs eNuW: € 33.8m) were below previous year´s pro forma figures of € 36.0m. According to the company, this was the resulting from the closure of loss-making non-core subsegments. This is reflected in lower than anticipated avg. revenue per trade of only € 4.0 (vs € 5.0 pro forma in H1´23 vs eNuW:  € 4.5). Positively, trading activity increased to 7.9m transactions (vs 7.2m pro forma in H1´23 vs eNuW: 7.5m).
• EBITDA came in at € 2.6m, above previous year´s figures (€ 1.5m pro forma in H1´23), but below our expectations (eNuW: € 4.4m). The positive yoy development is mainly driven by significant cost cutting, i.e. of sales related expenses (€ 6.2m vs € 8.7m pro forma H1´23 vs eNuW: € 6.3m), personnel expenses (€ 5.7m vs € 7.0m pro forma in H1´23 vs eNuW: € 6.0m) and other operating costs (€ 5.8m vs € 7.6m pro forma H1´23 vs eNuW: € 4.6m) overcompensating for the weaker topline. Still, due to higher than anticipated marketing expenses as well as lower other operating income and sales, EBITDA fell short of expectations. EBT of € -4.1m (vs eNuW: € -2.4m), is mainly burdened by regular D&A to the tune of € 5.5m and financing costs of € 1.2m.

Despite the rather disappointing H1´24 figures, the outlook remained bright. On the back of high marketing spendings in H1, the launch of the fully integrated NAGA SuperApp within the Telegram ecosystem with more than 950m user, as well as the cooperation with Borussia Dortmund, we expect a significant sequential improvement in H2 that should result in € 67.5m in sales and € 5.9m EBITDA in FY24, which is rather conservative and below the internal plan of € 75m in sales and € 8.6m.

For FY26e, management plan to achieve € 129m and € 31m EBITDA, which looks ambitious but not out of reach, yet below our current estimates of € 103m sales and € 19m EBITDA). Keep in mind that an incremental positive change in the sentiment could have an enormous effect on the P&L of NAGA.

BUY with a unchanged PT of € 1.40 based on DCF.