FY26 guidance: Good op. performance despite headwinds; chg.

Management reaffirmed itsstrategy “Empowering Mittelstand”. Five acquisitions made in 2025 were followed by PRO VIDEO and Amira so far. We expect INDUS to continue its portfolio growth with at least two further acquisitions (eNuW) in FY26e. Smaller divestments of nonperforming assets (total 1-2% group sales) look possible.

INDUS met its FY25 guidance of € 1.7bn to 1.85bn revenue and € 130m to 165m adj. EBITA with group revenue of € 1.74bn (up 0.8% yoy, +2.1% inorganic growth yoy) and group adj. EBITA of € 147.8m (down 3.8% yoy). The implied adj. EBITA margin of 8.5% was pressured by numerous economic and tariff related challenges.

Material Solutions outperformed expectations with € 554.5m revenue (vs. € 542.2m), despite a 1.8% decline from the IMECO discontinuation, and grew adj. EBITA 4% yoy to € 51.9m. Infrastructure was as expected, delivering 6.7% revenue growth to € 597.2m and adj. EBITA of € 62.1m (slightly down yoy but above forecasts, supported by a € 2.6m one-off gain). Engineering lagged on revenue (€ 583m vs. € 602m expected, -2.3% yoy) in a weak macro environment, though adj. EBITA of € 53.7m still exceeded expectations.

Q4 was strong, with revenue up 5% yoy to € 461.5m and adj. EBITA up 20.8% to € 43.6m. Infrastructure led growth, while Material Solutions posted the strongest EBITA increase (+53% yoy) due to the absence of prior-year one-offs. Engineering showed modest revenue growth but weaker-than-expected seasonality, while profitability improved on higher capacity utilization.

Free Cash Flow beat the target of € 90m at € 124m, despite falling 8.4% yoy. EPS came in at + 33.8% yoy, € 2.77/share, due to positive tax effects. INDUS announced a dividend of € 1.3/share to be paid in 2026, exceeding the previous dividend of € 1.2/share. Order intake rose by 15.1% in FY25 and backlog was up 10.9% yoy at € 706m thanks to several larger orders from US customers (2-3 years deliverables).

Management issued a FY26 guidance of € 1.8bn to € 1.95bn revenue and € 150m to € 170m adj. EBITA. Free Cash Flow is targeted at € 70m, as steep raw material price increased are seen to materially hike w/c. The segment guidance indicates engineering to continue to perform weaker than originally expected by us. We hence slightly reduce our revenue estimates to € 1.83bn. With a tight cost control, efficiency measures and without acquisition costs incurred in FY 25, adj. EBITA should rise to € 166.8m (eNuW) despite significant headwinds from Material Solutions (largely Tungsten).

In sum, INDUS should retain its role as successful serial acquirer for the German Mittelstand. A solid operational performance during a challenging macro environment underpins to upside once the cycle turns. BUY with a € 34.5 PT (old: € 35.5).