FY23 Analysis and Future Prospects for THE NAGA GROUP AG

THE NAGA GROUP AG, identified by ISIN DE000A161NR7, recently released its FY23 results. Despite a softer topline, the company reported a strong EBITDA performance. Sales amounted to €39.7 million, 12.8% below preliminary estimates of €45.5 million, primarily due to a lower than expected average revenue per trade of €4.3. However, EBITDA surpassed expectations, reaching €8.4 million compared to preliminary estimates of €7.0 million.

The company benefited from significantly reduced marketing, personnel, and R&D costs, which compensated for the weaker topline and higher other operating expenses. A notable one-off amortization impacted the EBIT, leading to a significant decline to €-61 million.

Looking ahead to 2024, the outlook for THE NAGA GROUP AG appears positive. The company anticipates that increased trading activity and cross-selling opportunities will drive transactions to 15.9 million, resulting in sales of €71.8 million. EBITDA is expected to rise to €11.5 million, with no further meaningful amortizations anticipated for FY24.

Management projects ambitious growth, targeting USD 250 million in sales with a 40% EBITDA margin by FY26. While this is deemed optimistic, the potential for market sentiment shifts could significantly impact NAGA’s P&L positively. The base case scenario conservatively projects €90 million in sales and €19 million in EBITDA for FY26, indicating room for positive surprises.

Overall, the revitalization of brokerage customer activity, combined with synergies from the merger, positions NAGA for potential growth. The detailed growth plan will be discussed during today’s CDM at 4pm CEST. The "Buy" recommendation remains with an unchanged price target of €1.20.