Ekopak WaaS acceleration impacts short-term cash flow generation

Last December, Ekopak lowered its 2024 revenue guidance by approximately €15 million. The adjustment was ascribed to a faster-than-anticipated adoption of WaaS solutions, as industrial customers, facing a challenging macroeconomic climate, increasingly prefer an opex model over a capex model. We commend the accelerated traction in WaaS commercialization, which is expected to yield recurring high-margin revenues in the mid-term. However, we recognize that the additional pre-financing will impact the balance sheet, necessitating flawless and timely execution of the business plan. Our adjusted model returns a fair value of €18, our new target price (down from €25). With a 30% upside, we maintain our Buy rating.