H1'25: Strong margin improvements despite weaker top-line

Remarkably, profitability even improved on the other hand. H1’25 EBITDA came in at € 0.5m (eNuW: € 0.6m), implying a strong margin uplift to 16.5% (+6.6pp yoy). This comes on the back of the successful restructuring, which led to a leaner cost base especially concerning personnel (-59% yoy), improved production control, and the transition from a pure project-driven IT service provider to a software-focused business model with recurring revenues.

Against this backdrop, adj. FCF (excl. gains from waiver of receivables in connection with repayment of bank liabilities) arrived at € 0.4m (H1’24: € -0.03m), thus indicating strong earnings quality amid a 76% cash conversion.

While management did not make any specific comments on the FY guidance, we regard this as a confirmation of the € 1.3m EBITDA target, in line with our updated estimates. In our view, this looks plausible considering an improved top-line development in H2 (eNuW new: € 3.8m) as well as further efficiency gains.

Successful refinancing. Following the refinancing of its bank debt in Q1’25, mVISE has now also successfully reallocated its 22/26 convertible. Furthermore, a legally secured option was established to extend the bond’s maturity to 2030, with an increased strike of € 1.85 and the coupon remaining at an attractive 4.5% - a structure we consider highly favorable for the company. Importantly, in this case mVISE would have no major debt maturities in the next four years, enabling management to fully focus on the planned business transformation.

Capital reduction. At last week’s EGM, shareholders approved the previously announced capital reduction via a reverse stock split (10:1 ratio). On this basis, management intends to carry out a cash capital increase with subscription rights, followed by a private placement, for which new investors already expressed interest, according to management.

Contingent upon the success of the capital measure, mVISE is an a strong position to further transform the business into an active investment platform, pursuing a Buy & Build strategy. Initial transactions will likely involve minority stakes, with the goal of combining risk control with the continued involvement of existing shareholders. Unlike traditional serial acquirers, mVISE intends to pursue a central, hands-on approach, actively supporting its portfolio companies to accelerate organic growth and create synergies. First acquisition discussions are already underway, and management expects to complete initial transactions within FY25.

Reiterate BUY with an unchanged PT of € 1.30 based on DCF.