Nynomic AG

High single-digit €m order confirms growth prospects

Christian Sandherr26 Apr 2024 05:24

Nynomic’s subsidiary m-u-t GmbH has received a high single-digit order, which should translate into sales over the course of FY24/25e. Most importantly, this coupled with the recently announced product launch of the  LabScanner Plus, a bulk-testing tool for pharmaceutical companies, strongly underpins the company’s growth prospects and expected growth acceleration.

In detail, Nynomic will provide an existing customer (no details provided) with a solution to further improve the efficiency and accuracy of gas analysis in the customer's application. The order in the high single-digit €m range (eNuW, € 7-8m) will partially still be recognized as sales this year, the remainder in FY25e. Further, this should allow Nynomic to book follow-on orders during the next few years, eNuW.

This bodes well with our expected growth acceleration for FY24e. Mind you, last year’s growth stood at only 1%, largely as a result of the lumpy nature of parts of the group, partially longer sales cycles and customers’ inventory normalizations. For FY24e, we expect 12% yoy growth (8% organic) on the back of a number of drivers including (1) unbroken demand from semi customers, (2) fulfilment precision farming orders, (3) TactiScan gaining traction, (4) a structurally growing medtech market and (5) new product launches such as LabScanner Plus.

Bright mid-term prospects. Last year, management issued a new mid-term (3-5 years) guidance expecting sales to reach € 200m with a 16-19% EBIT margin. The implied 11-19% sales CAGR with a 3-6pp margin increase is a reflection of the company's recent operational efforts, i.e. broadening the technology offering through partnerships, in-house development and acquisitions but also the integration of recurring components (e.g. cloud solutions) in its products.  

Acquisitions could serve as additional catalyst. As per its growth strategy, Nynomic should be looking to acquire 1-2 companies (technological and geographical diversification) during the next six months. Thanks to its strong balance sheet, we also regard bigger targets (~ € 20m sales) as possible.

Valuation remains attractive. At roughly € 29 per share, Nynomic is trading on a mere 9.6/7.1x EV/EBIT 2024/25e. Taking into consideration the company’s strong balance sheet and the growth prospects underpinned by its mid-term guidance, this looks unjustified, in our view. We confirm our BUY rating with an unchanged € 52 PT and keep the stock on our Alpha List.

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