This week, Dafne Sanac, Head of Investor Relations at INDUS Holding, presented at the German Select Conference organized by mwb research. The presentation covered INDUS' Q2/H1 figures, ongoing acquisition strategy, and strong free cash flow. Despite challenging economic conditions, INDUS showed signs of sequential improvement in Q2. Still, the company revised its full-year guidance downwards but maintains a cash generative business model with a target free cash flow of over EUR 110m. INDUS has EUR 50m available for potential acquisitions in the coming months, with news expected soon. The company focuses on profitable niche businesses, typically paying 6-7 times EV/EBIT. Despite challenges mwb research’s analysts remain confident about INDUS' long-term prospects. The analysts therefore maintain their BUY rating with unchanged PT of EUR 35.00. The full update can be downloaded under https://www.research-hub.de/companies/INDUS%20Holding%20AG

Gerresheimer presented at a well-attended roundtable organized by mwb research as part of the second German Select Conference. A recording can be viewed here: https://www.research-hub.de/events. Guido Pickert, Head of IR, drew attention to the positive expectations for H2 24 and the long-term growth drivers, which are the digital services for pharmaceutical packaging, the individualization of medicines and the support for patients in taking their medication during therapy. In addition, the resolution of inventory challenges in the Primary Packaging Glass division and a strong order backlog are expected to drive profitability this year and beyond. mwb research’s analysts see Gerresheimer well on track to achieve its targets, and therefore the analysts confirm their BUY-rating with an unchanged PT of EUR 120.00. The full update can be downloaded under https://www.research-hub.de/companies/research/Gerresheimer%20AG

Yesterday, Alina Köhler, Head of IR at Verbio, presented the company's business model and market strength during mwb research’s German Select online conference. Verbio's broad portfolio, which includes biofuels such as diesel, ethanol and gas, as well as chemicals such as glycerin, gives the company a strong competitive advantage. Unlike many of its competitors, who are dependent on a single product, the diversity of Verbio's offerings allows it to more flexibly adapt production to market needs. In addition, Verbio's plants are highly efficient in converting biomass to biofuel and are adaptable to different feedstocks, ensuring profitability even in the challenging market environment of low biofuel prices and high feedstock costs. With its strategic expansion into the North American market, the company is well positioned for continued profitable growth. Therefore, mwb research’s analysts maintain their BUY rating and reiterate their PT of EUR 30.00. The recording of the roundtable is available here: https://www.research-hub.de/events. The full update can be downloaded under https://www.research-hub.de/companies/Verbio%20SE

Photon Energy's Q2 report showed a 14% yoy increase in revenues to EUR 23.9m, driven by a strong performance in power generation, engineering services and the capacity market, but held back by a component trading market still characterized by oversupply and price pressure. EBITDA improved significantly due to a favorable mix effect, with the margin almost doubling yoy to 22%. The project pipeline underwent significant changes, with Australian projects being scaled back and promising projects in South Africa being added. The adjusted equity ratio of 25.6% was close to the 25% required by the covenants of the green bond, due to FX charges from a strengthening EUR. Management confirmed its FY24 guidance and believes that the continued positive development of profitability in H2, coupled with the commissioning of the remaining capacity in Romania, will ensure that the company remains above the critical threshold. The commissioning of the Romanian capacity alone could lead to OCI of c. EUR 3m, adding c. 90bp to the adjusted equity ratio, thus reducing the risk of the ratio falling below 25%. mwb research’s analysts adjust their estimates and arrive at a new PT of EUR 2.50 and a Spec. BUY rating. The full update can be downloaded under https://www.research-hub.de/companies/Photon%20Energy%20NV

Germany's decision to limit direct financial aid to Ukraine is not expected to have a significant impact on Hensoldt. The company’s existing contracts, particularly those related to German/Ukraine defense projects, remain secure until end 2025. With 55% of its revenue generated in Germany (5.4% in Ukraine mwb research est.) and ongoing defense investments, including the planned delivery of three TRML-4D radars to the Ukraine, Hensoldt is well-positioned for continued growth. Additionally, the likely increase in defense spending following the upcoming elections in Germany, where the CDU is projected to win, further supports Hensoldt's strong outlook. mwb research’s analysts maintain their BUY rating with a target price of EUR 44.00. The full update can be downloaded under https://www.research-hub.de/companies/Hensoldt%20AG

Dermapharm Holding SE (DMP) has reported preliminary Q2 24 figures and continues to demonstrate its resilience and strategic growth, driven by the solid performance of its branded pharmaceuticals business. Despite the expected challenges from the completion of the COVID-19 vaccine cooperation, the company has managed to maintain a strong position through organic growth of its existing portfolio and strategic acquisitions. Hence, management confirmed its revenue guidance of EUR 1.17-1.21bn and the adj. EBITDA outlook of EUR 305- 315m. Dermapharm's strategic initiatives, combined with its robust financials, support the expectation of continued growth and margin improvement through 2024 and beyond. Given the sound quarterly performance and the company's positive outlook, mwb research’s recommendation remains a BUY with an unchanged price target of EUR 41.50. The full update can be downloaded under research-hub.de/companies/Dermapharm%20Holding%20SE

Geratherm reported a weak performance in the first half of the year, with sales down 27% yoy, primarily due to challenges in the Healthcare Diagnostics segment, where sales fell 47% due to the loss of a major customer, a mild winter and increased competition. Geratherm posted an operating loss of EUR -0.5m, a sharp reversal from previous profits. A bright spot was the Respiratory division with an 18% increase in sales, while Incubator Systems suffered from delays in certification. The outlook for the remainder of 2024 remains challenging, with the company expecting to struggle to reach break-even. Geratherm has confirmed that it is reviewing its strategy to adapt to changing market conditions. After mwb research’s analysts adjusted their estimates, they arrived at a new PT of EUR 7.30 (old: EUR 8.00), which still supports the BUY recommendation. The full update can be downloaded under https://www.research-hub.de/companies/Geratherm%20Medical%20AG

VARTA has reached a restructuring agreement with most of its lenders to reduce its debt from approximately EUR 485m to around EUR 200m through haircuts and extended loan covenants until 2027. As part of the plan, the company's share capital will be reduced to zero, effectively expropriating current shareholders without compensation and delisting the company's shares. The majority shareholder, MT InvestCo, and a Porsche investment vehicle will then inject EUR 60m and hold a 32% stake each, with the super senior lenders holding 36%. The plan, which does not require shareholder approval, is pending court approval. An alliance of DSW Deutsche Schutzvereinigung and One Square Advisors continues to call on all shareholders to organize against the planned restructuring. mwb research’s analysts reiterate their Sell rating and remain of the opinion that there is little to be gained for minority shareholders. PT unchanged at EUR 0.00. The full update can be downloaded under https://www.research-hub.de/companies/research/Varta%20AG

Metro’s Q3 23/24 sales were 2% ahead of consensus and adj. EBITDA was broadly in line (1% softer). Revenues grew 4.4% yoy in constant currencies (c.c.) and on a portfolio adj. basis, led by growth in its delivery and online marketplace businesses, while its physical stores reported only a marginal growth. The top lines in Germany and the West were impacted by a late start to the summer, which somewhat weighed down on its HoReCa business; this was more than compensated by healthy momentum in the East and Russia. Citing a general uncertain marco environment, management has reiterated its FY 24 outlook. While mwb research’s analysts acknowledge Metro’s progress in its sCore growth strategy and its steady focus on multichannel HoReCa customers, substantial progress is required to reach its 2030 ambitions and drive forecast increases. mwb research’s analysts maintain their BUY rating with an unchanged price target of EUR 7.70, as valuations offer attractive entry points. The full update can be downloaded under https://www.research-hub.de/companies/research/Metro%20AG

Deutsche Rohstoff's second quarter results showed a similar performance to the strong first quarter, with revenues up 2% qoq to EUR 56.6m, supported by higher realized WTI prices despite a slight decline in production. On a year-over-year basis, revenues grew by an impressive 74%, supported by strong production growth, particularly from Wyoming. EBITDA improved slightly sequentially to EUR 42.1m, maintaining a stable margin of around 75% qoq. However, higher depreciation and amortization charges due to capital intensive drilling in Wyoming resulted in a decline in the EBIT margin compared to Q1. The strong operating cash flow of EUR 48.6m was used to fund significant capital expenditure, resulting in negative free cash flow. The company confirmed its full year guidance. mwb research’s analysts adjust their estimates for higher depreciation and arrive at a new price target of EUR 55.70 (old: EUR 56.70), while maintaining their BUY recommendation. The full update can be downloaded under https://www.research-hub.de/companies/Deutsche%20Rohstoff%20AG