Original-Research: beaconsmind AG (von NuWays AG): Buy

Classification of NuWays AG to beaconsmind AG

Company Name:	beaconsmind AG
ISIN:	CH0451123589
Reason for the research:	Update
Recommendation:	Buy
from:	09.10.2024
Target price:	EUR 16.00
Target price on sight of:	12 months
Last rating change:
Analyst:	Philipp Sennewald

Strong growth and profitability in H1 driven by acquisitions; chg.

Topic: beaconsmind released its H1 '24 management report, showing substantial top-line growth driven by the numerous acquisitions that were performed in 2022 and 2023. Here are the key takeaways.

H1 ’24 sales increased by 122% yoy to CHF 5.9m (eNuW: CHF 6.2m; eNuW: 70% recurring), which was mainly driven by the acquisitions of FREDERIX, Socialwave, Netopsie, T2 and Kadsoft. In fact, revenues from T2 and Kadsoft were consolidated for the first time, as the deal has been closed at YE '23. In 2023, T2 and Kadsoft recorded combined revenues of € 3.5m.

H1 adj. EBITDA came in at CHF 1.1m (eNuW: CHF 1.0m) , showing the positive impacts of the acquisitions. The adjustments of CHF 0.6m were mainly attributed to legal and personnel expenses in relation to the acquisitions of FREDERIX, Socialwave, Netopsie, T2 and Kadsoft.

Moreover, management reiterated the run rate for 2024, targeting sales of CHF 12.9m as well as an adj. EBITDA of CHF 2.5m. This should be achievable for beaconsmind given the strong H1 performance as well as several new contracts that were closed during the first half of the year.

Speaking of which, beaconsmind continues to gain new customers. For example, the company will provide the Semperoper in Dresden with its projector technology (eNuW: CHF 0.2m sales), while retailer Müller implemented beaconsminds CloudWifi solutions in more than 770 supermarkets in the DACH region and Spain. Moreover, beaconsmind gained ECE group, a leading shopping center operator, as a customer (eNuW: CHF 0.5m recurring sales). Just recently, the company also announced to have intensified its collaboration with a leading European retailer, who will apply the beaconsmind Auto App Login at c. 940 locations in Europe.

Regional expansion. On top of this, beaconsmind in May announced its expansion into the Spanish market with the establishment of an own entity. With this, the company responds to the high penetration rate of digital marketing solutions in Spain, especially in hospitality and gastronomy. Management said to target annual revenues of CHF 600k and expected significant growth potential going forward.

New tech partnership. In Q2, beaconsmind announced to have entered into a partnership with at-visions (digital solutions for hospitality) and lokalee (AI based concierge solutions). The partnership aims to provide a fully integrated solution for retail and hospitality customers in the MENA region, focusing on a comprehensive technology value chain in order to enhance guest experience while providing an integrated hard- and software solution. Given beaconsmind’s existent expertise in the hospitality segment, we expect significant up-selling potential from this initiative.

Besides organic growth, we expect beaconsmind to continue its buy and build strategy with further acquisitions to come. While the company has not been active on the M&A market in 2024 thus far, we expect at least one further acquisition until H1 ‘25e.

The stock remains a BUY with a new PT of € 16 (old: € 15) based on DCF.

You can download the research here: http://www.more-ir.de/d/31011.pdf
For additional information visit our website: www.nuways-ag.com/research

Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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