FY24 in line as profitabilty strongly increases; chg.

FY24 sales decreased by 33% yoy to € 9.3m (eNuW: € 9.4m). The reduction in sales was mainly due to the restructuring process and the continued reorganization of the business model. In this context, the company actively reduced the number of employees further. Positively, the gross margin improved by 1pp yoy to 63.9%, implying a gross profit of € 6.0m.

Contrary to the top-line development, mVISE was able to improve EBITDA by 2.8% yoy to € 1.1m, implying a strong EBITDA margin improvement to 12.1% (+4.3pp yoy). This figures represents the adjusted EBITDA, where the derecognition of the at-equity investment elastic.io is not considered. Taking this into account, reported EBITDA stood at € 1.5m. The main reason for the strong profitabilty improvement was again the staff reduction, which becomes visible in significantly reduced personnel expenses (-39% yoy; -2.8pp sales ratio).

In our view, this fully underpins that the change in strategy, which also includes the the discontinuation of low-margin projects in connection with the corresponding personnel measures, is clearly bearing fruit.

FY25 guidance. Next to the release, management put out a new guidance for FY25, targeting an EBITDA of at least € 1.3m, thus implying a 15% yoy increase. Yet, this is significantly below our old estimate of € 2.1m, which is why we regard the outlook as conservative. On the other hand, sales should continue to decline in FY25e in the context of the ongoing restrucuring, before we will see a top-line expansion again in FY26e.

Despite the rather muted FY25 outlook, the company remains fully on track with its transformation, which should become visible in continuously improving margins and returns.

As this is not fully relfected in the share price in our view (i.e. FY25e EV/EBITDA of 11.3x; FY26e: 8.3x), we reiterate our BUY recommendation with a new PT of € 1.30 (old: € 1.40) based on DCF.