Cantourage announced that at the end of November, the company’s EBITDA already stood at € 5.5m, exceeding the market’s expectations of € 4.8m (eNuW old: € 4.9m) already by roughly 10%. Mind you, at the end of Q3, EBITDA stood at € 3.9m as a result of a third quarter with a notably lower profitability. This was the result of price pressure following political uncertainties, which triggered industry-wide de-stocking in Germany. In our view, the fact that the first two months of Q4 came with a decent margin again, underpins that (1) de-stocking has notably decreased and prices should be somewhat normalising and (2) Cantourage is able to weather challenging market conditions well thanks to its unique set-up.

Our new FY25 estimates now imply a FY EBITDA margin of 6.8% compared to 5.5% previously. Our FY25 sales estimate of € 89m remained unchanged.

Cantourage to weather potential regulatory changes in Germany well. Cantourage is well positioned due to its ability to adapt its product mix toward higher-margin premium strains, strengthen cooperation with offline pharmacies and actively manage inventories. At the same time, strong growth in earlier-stage markets such as the UK and Poland and an improving governance setup significantly reduce dependence on Germany and enhance resilience against regulatory headwinds.

Improving corporate governance around the corner. As recently announced, the group’s new CFO will be starting in January, alongside the five-year extension of the CEO’s contract, which together should notably improve leadership stability, strengthen internal controls and enhance the quality and timeliness of financial reporting, laying a more robust governance foundation for future growth. The still pending FY24 consolidated annual report is expected to be release shortly, eNuW.

Valuation remains attractive. Shares continue to trade at a subdued valuation of 0.4x EV/sales (6x EV/EBITDA) FY25e despite >70% growth improving governance structures and the announced better than expected margins this year. Mind you, in September, US-listed High Tide announced the 51% acquisition of Remexian Pharma at an implied EV/sales multiple of 0.84x. Canify, which is rumoured to IPO in 2026, is currently raising money at 2-3x EV/sales (eNuW).

We confirm our BUY rating with an unchanged € 10.50 PT based on a DCF.