2024 sales and EBIT well above expectations
Note regarding MiFID II: This research report has been prepared by order of the issuer based on a contractual agreement and is being compensated for by the issuer. The research report has simultaneously been made publicly available to all interested persons. Hence, the receipt of this research report is to be regarded as a permitted insignificant non-monetary benefit according to § 64 para 7 sentence 2 No. 1 and 2 of the German Securities Trading Act (WpHG).Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY) has significantly exceeded our expectations and those of the market with its preliminary figures. Revenue in 2024 amounted to € 480.3 million (2023: € 427.5 million) and EBIT to € 32.1 million (€ 26.6 million), while our old 2024 expectations were € 448.9 million and € 27.8 million respectively. Incoming orders (€ 583.8 million; previous year: € 504.8 million) indicate a continuation of growth, the book-to-bill ratio of 1.22 was well above the growth threshold. The expected spending policy in Europe/Germany with regard to infrastructure and national defense should also have a positive impact on the company's sales development in the medium term. We have not yet taken this into account in our model and are awaiting the analysts' conference on the final figures. Peer multiples have risen significantly as part of the rally in infrastructure and defense stocks.
After updating our DCF and peer group analysis, our Fair Value rises significantly to € 39.73. In view of the strong share price performance in recent days, our recommendation reads “Hold”.
Frequentis AG is an Austria-based supplier of communications and information systems, diversifying its activities into two business segments: ATM (Air Traffic Management) business segment, which includes ATM Civil, including Information Management, and Defense business fields, and PST (Public Safety & Transport) business segment, which includes Public Safety, Public Transport and Maritime business fields. As of December 31, 2010, the Company had seven wholly owned subsidiaries in the area of Sales & Operations, four wholly owned subsidiaries and one majority owned subsidiary, as well as one affiliate, APUS Software GmbH, in the area of Software, and two wholly owned, one majority owned, one minority owned, as well as one affiliate, 3T Communications AG, in the area of Services. The Company's subsidiaries are located in the United States, the United Kingdom, Canada, Australia, Germany, Singapore, Slovak Republic, Romania, and the Czech Republic.
Since 2007, BankM AG (Frankfurt am Main, Germany) is the partner of small and medium-sized enterprises and specializing in capital market financing with its experienced, interdisciplinary team. SME customers benefit from individual service and rapid access to selected investors that fit their needs. BankM's services include capital market advisory, arranging IPOs and capital increases for equity financing, debt advisory and debt capital mediation, designated sponsoring and research as well as M&A, hereby specializing in the identification of suitable strategic partners in China.
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