Order intake grows almost 30%, sales increase in double digits - Frequentis remains on track
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Frequentis AG (ISIN ATFREQUENT09, General Standard, FQT GY) was able to expand revenue by 11.7% (to € 186.8 million) in the first half of H1 2023. The H1 EBIT margin was -0.2% (H1 22: -0.3%), this is due to the typical seasonal effects - as 55-60% of the annual revenue is generated in the second half of the year, with a correspondingly good margin (as the cost blocks are essentially evenly distributed). On an annual basis, Frequentis therefore plans an EBIT margin between 6-8%, which would follow the P&L mechanics of past fiscal years. We see Frequentis on a good path to reach the 2023 targets, large acquired multi-year projects and strategic portfolio expansions through acquisitions secure the medium- and long-term growth path. With a PE2023 of 19.8 (Peer Group median: 22.3) we consider the stock as favourably priced.
Our DCF analysis suggests a value per share of € 31.62 and the peer group analysis based on 2023, 2024 and 2025 yields an average value per share of € 35.29. Equal weighting of both approaches returns a fair value per Frequentis share of € 33.45. Our fair value thus exceeds the current share price by 13.8% and entails a "Hold" rating based on our valuation scheme.
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.
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