Equity analysis

1.brief overview

2.introduction

3.divisions

4.holding structure

5.business figures

6.valuation

7.conclusion

Brief overview

Market capitalization: 4.33 billion euros

KGV/KGVE: 26/18

Annualized return: 30% p.a.

Analyst rating: Buy

Introduction

Ionos $IOS (-2,4%) is a German digitalization company with a broad product portfolio. The company was formed in 2018 under the umbrella of the listed internet group United Internet AG through the merger of the subsidiary 1&1 Internet and the IaaS provider Profitbricks. Achim Weiss, a long-time employee at 1&1, founded Profitbricks and has been CEO of Ionos since the merger. The IPO took place in February 2023 and the share price has increased by 88% since then. Ionos has over 6 million customers worldwide and employs 4,182 people. Turnover in 2024 amounted to 1.56 billion euros (+9%) and profit was almost 170 million (-2.67%). In addition to Germany, the most important sales markets are North America, the UK and Spain.

Business divisions:

Ionos is divided into three business divisions: Web Presence & Productivity, Cloud Solutions, Ad Tech [1].

Web Presence & ProductivityWith 66 % of total sales, this area is the most important for Ionos. The focus is on small and medium-sized companies. Among other things, Ionos offers customers solutions for web hosting, domain registration and website development (e.g. Strato). After 11.8% revenue growth in 2024, Ionos expects growth to slow to 7-8% in 2025.

Cloud Solutions: This business division generated 117 million in revenue (+13.3%) in 2024, including, for example, the development of a cloud for the federal government to store the Flensburg points register [2]. The cloud business is expected to reach profitability this year and record revenue growth of 15-17%. The medium-term goal is annual growth of ~20 %. Overall, Web Presence & Productivity will achieve an adjusted EBITDA margin of 32.9%.

Ad Tech: Ad Tech comprises the domain business, in which the company is the European market leader. A key component of this is Sedo, a marketplace for domain trading with 22 million registered domains. The adjusted EBITDA margin was 13.4% in 2024 and no major jump in revenue is expected next year.

Holding structure

Warburg Pincus acquired the United Internet subsidiary several years ago for 450 million euros. After the IPO, Warburg still held 25% of the shares in Ionos. In 2024, the decision was made to exit Ionos. Since then, Warburg's own stake in the company has been reduced to 8.7% through sales in September and December [1]. The final separation of the position followed in March. The share price reacted negatively to this. A planned change in the shares held in United Internet (63.8%) is not known and is unlikely. The free float amounts to approx. 35% of the shares

Business figures

The rising margins, which can be explained by the declining relevance of the Ad Tech segment and efficiency improvements, are positive. I therefore believe that the medium-term targets of 10% sales growth and an adjusted EBITDA margin of 35% (2024: 32.9%) are easily achievable. The sharp rise in the share price can primarily be explained by the strong free cash flow development, which has continued since 2021. From an initial 7% FCF margin in 2018, it was recently increased to 20%. It is particularly important for the share price that this trend continues. A strong dilution of the number of shares is not in sight: from 2023 to 2024, the number of shares rose by just 0.73%. The high liabilities are a negative factor. Only around 1.645 billion euros in assets are offset by 1.485 billion euros in liabilities (including 800 million euros in bank debt).

Disclaimer

This is not investment advice. These are personal assessments that cannot replace professional advice. If you do not want to miss any further stock analyses and additional statistics on the stocks presented, please subscribe to my free sub-subscription. Link is in the profile.

Rating

With an expected P/E ratio of 18 and a P/E ratio of 3, the valuation is above the historical average. This must be seen in relation to the expected sales growth, which is expected to be around 8% p.a. over the next few years. Profits are expected to increase disproportionately by around 20% p.a. due to the increase in margins. The multiples indicate an undervaluation. However, as a DCF model is ultimately more meaningful, we are now making further estimates. We add a margin of safety of 25% to all values.

• For the pessimistic scenario, we assume a perpetual growth rate of 1.9% p.a. and use the average FCF margin of Ionos, which is 12%.

• For the medium scenario, a growth rate of 2.2% p.a. and an FCF margin of 18%.

• For the optimistic scenario, a growth rate of 2.56% p.a. and an FCF margin of 23%.

Conclusion

In summary, Ionos is a very exciting company. Ionos is benefiting greatly from increasing digitalization. The gigantic financial package from the CDU/CSU and SPD will also provide a tailwind. Therefore, if margins continue to rise (as forecast by management), I would not be surprised to see a similar pleasing return as in the past. The risks are manageable. What speaks against an investment is the ad tech business, which has not yet been able to return to growth. The high debt burden is also a point of criticism, although it is not an acute threat at the current FCF margins.

Sources

[1] https://www.ionos-group.com/fileadmin/Publications/presentations/IONOS_FY_2024_FY_2024_Results_Webcast.pdf

[2] https://www.tagesschau.de/wirtschaft/ionos-cloud-bund-100.html

$IOS (-2,4%)

Hello my dears,

Following on from the report that confidence in the USA is waning. We should recognize the opportunities.

That's why I've picked out the multiples from Ionos for you. I like them a lot, and they might even be boosted by Trump.

IONOS is one of Europe's leading providers of hosting services, cloud services and cloud infrastructure. The company was founded in 2016 and is headquartered in Montabaur, Germany. The IPO took place on February 8, 2023.

Key figures such as

- Revenue - Profit - Free cash flow - EbiT margin etc. are to be increased, also in 2027.

This will reduce the P/E ratio.

Debt is well under control.

Analysts' opinions are consistently positive.

Please let me know your opinion and assessment in the comments. And should Ionos be able to benefit from the Trump effect?

According to a media report, European tech companies are seeing an increase in inquiries, and not just since the current customs chaos.

$IOS (-2,4%)

"There are currently three times as many inquiries as usual," said Nextcloud CEO Frank Karlitschek in response to an inquiry from Der Spiegel. The magazine asked several European cloud and infrastructure providers how their demand has developed in recent months. According to the report, the tenor is clear: companies, public authorities and private users are increasingly looking for alternatives to US service providers.

Raymond Alves, founder of the mapping service Digital Earth, even spoke of a "Trump effect". This is what his company calls the current trend internally. In the six weeks prior to Der Spiegel's inquiry, his service had gained 250 percent more users. However, Alves did not give any specific figures.

Fear of industrial espionage

According to Nina-Sophie Sczepurek from Leitzcloud by vBoxx, the motivation of those wanting to switch is clear. Customers clearly said "that they want to move away from American products." Ionos said that "the uncertain political situation" in the USA is also leading to increased demand from the security and defense industry. Frank Kalitschek from Nextcloud brings another aspect into play, although according to the report he does not want to refer directly to customers: Industrial espionage. He fears that the US government could use the data stored in the clouds as a "bargaining chip".

One counter-movement to the trend away from US clouds is to adapt the previously strict EU law to the offerings. As c't reports in its current cover story, there are almost "legal contortions" in order to be able to continue using the popular US services. A central point is the transfer of data from European servers to servers in the USA, which is not actually GDPR-compliant, including the legal access options there. Although there is an EU adequacy decision for the United States from July 2023, the political situation has changed significantly since then.

"Get out of the US clouds" is also the cover story of the current issue 08/25 of c't magazine.

(never)

https://www.heise.de/news/Mehr-Interesse-an-europaeischen-Cloud-Anbietern-durch-Trump-Effekt-10349873.html

According to "Welt", companies active in construction, rail infrastructure, digitalization and the energy industry are considered to be beneficiaries of the debt pact. So-called green sectors are also likely to benefit.

A few examples:

$FAST (+0,97%) - Fastned

$ACC (+0,75%) - Aker Corp

$IOS (-2,4%) - Ionos

$KTN (-0,17%) - Kontron

$NDX1 (-1,15%) - Nordex

$BC8 (+0,18%) - Bechtle

$VOS (-0,94%) - Vossloh

$S92 (-1,53%) - SMA Solar

Despite all the debt euphoria, however, investors should bear in mind that the infrastructure companies are smaller stocks that are not without risk.

Source (excerpt) & chart: World

Ionos announced today that it is buying back its own shares. In doing so, they are taking advantage of the current share price weakness, mainly driven by the sale of shares by shareholder Warburg Pincus. The share is now up over 6% 📈💸

$IOS (-2,4%)

22.11.2024

Snowflake rises up to 25% + Bitcoin almost at $100,000 + Rotation in MDax + Carl Zeiss Meditec falls to low since 2018 + Berenberg rates CTS Eventim a 'Buy' - target 100 euros

The Snowflake $SNOW (+0,9%) shares rose 25% after the data analytics provider raised its full-year product revenue guidance and announced that it has partnered with AI company Anthropic to expand its cloud services.

The Bitcoin $BTC (+0,28%) reached just under $100,000 overnight and currently stands at $99,000.

What do you think, will Bitcoin reach $100,000 in November, or even today?

The US bank JPMorgan expects only a few changes for the next index review by Deutsche Börse at the beginning of December. While everything should remain the same in the leading Dax index, analyst Pankaj Gupta expects a swap in the mid-cap index below it, the MDax, where, according to him, industrial recycler Befesa will probably make way for drug researcher Evotec $EVT (+0,85%) will have to give way. Befesa $BFSA (-0,43%) would be relegated to the SDax, the index of smaller stocks. In the TecDax, Gupta expects that SMA Solar $S92 (-1,53%) will make way for the internet service provider Ionos $IOS (-2,4%) Deutsche Börse will review the indices of the Dax family (Dax, MDax, SDax and TecDax) on Wednesday, December 4, and announce any changes after the close of trading in the US. The changes will come into effect on Monday, December 23.

The downturn in the share price of Carl Zeiss Meditec $AFX (+1,32%) continued on Thursday with a new six-year low. The trend at the medical technology manufacturer has been pointing downwards since 2021, and this trend has intensified in the current year since March. At that time, the shares were still trading above 123 euros. On Thursday, the drop of over four percent pushed them down to 54.45 euros. This marks the lowest level since April 2018. With brief exceptions in August and late October and early September, the shares have been trading below the 200-day line, which is a popular long-term indicator for chart-oriented investors, for months. Jack Reynolds-Clark from RBC Research did not paint a good picture for the company at the beginning of November, downgrading it to "Sector Perform" due to uncertain demand in the various end markets. He emphasized that the consensus for 2025 depicts a rather optimistic scenario that is difficult to justify.

The private bank Berenberg has raised its rating for CTS Eventim $EVD (-1,74%) to "Buy" with a target price of 100 euros. The event organizer presented mixed quarterly figures, wrote analyst Gerhard Orgonas on Thursday evening. He cut his earnings estimates until 2026, taking into account integration costs and a slightly lower ticketing margin.

• CTS Eventim increased its consolidated revenue by 15.8 percent to EUR 2.027 billion in the first nine months of 2024. Adjusted EBITDA grows by 12.1 percent to EUR 322.7 million in the same period. The company's management is sticking to its forecast and expects a significantly higher Adjusted EBITDA for the full year compared to the previous year.
• CTS Eventim records a 22.9 percent increase in revenue to EUR 564.6 million in the Ticketing segment and a 13.6 percent increase to EUR 1.494 billion in the Live Entertainment segment. The company is also awarded the contract for the construction and operation of a new large arena by Wien Holding.

Friday: Stock market dates, economic data, quarterly figures

ex-dividend of individual stocks

Schloss Wachenheim EUR 0.60

Cummins Inc. USD 1.82

CRH 0.35 GBP

Quarterly figures / company dates Europe

No time specified: Vinci Investor Day | Unilever Capital Markets Day

Economic data

• 08:00 DE: GDP (2nd release) 3Q calendar and seasonally adjusted yoy FORECAST: +0.2% yoy 1st release: +0.2% yoy 2nd quarter: -0.3% yoy calendar-adjusted yoy FORECAST: -0.2% yoy 1st release: -0.2% yoy 2nd quarter: -0.3% yoy
• 09:15 FR: Purchasing Managers' Index/PMI non-manufacturing (1st release) November FORECAST: 49.0 PREV: 49.2 Total Purchasing Managers' Index (1st release) FORECAST: 48.1 PREV: 48.1
• 09:15 FR: Purchasing Managers' Index/PMI manufacturing (1st release) November FORECAST: 44.0 PREVIOUS: 44.5
• 09:30 DE: Purchasing Managers' Index/PMI non-manufacturing (1st release) November PROGNOSE: 51.8 PREVIOUS: 51.6 Total Purchasing Managers' Index (1st release) PROGNOSE: 48.3 PREVIOUS: 48.6
• 09:30 DE: Purchasing Managers' Index/PMI manufacturing (1st release) November FORECAST: 43.0 PREVIOUS: 43.0
• 10:00 EU: Purchasing Managers' Index/PMI non-manufacturing Eurozone (1st release) November FORECAST: 51.5 previously: 51.6
• 10:00 EU: Purchasing Managers' Index/PMI manufacturing Eurozone (1st release) November PROGNOSE: 46.0 PREVIOUS: 46.0 Total Purchasing Managers' Index (1st release) PROGNOSE: 49.8 PREVIOUS: 50.0
• 10:30 UK: Purchasing Managers' Index/PMI non-manufacturing (1st release) November FORECAST: 52.0 PREVIOUS: 52.0
• 10:30 UK: Purchasing Managers' Index/PMI Manufacturing (1st release) November FORECAST: 50.0 PREVIOUS: 49.9
• 15:45 US: Purchasing Managers' Index/PMI Services (1st release) November FORECAST: 55.0 PREVIOUS: 55.0
• 15:45 US: Purchasing Managers' Index/PMI Manufacturing (1st release) November FORECAST: 48.8 PREVIOUS: 48.5
• 16:00 US: Consumer Sentiment Index Uni Michigan (2nd survey) November FORECAST: 73.5 1st survey: 73.0 previous: 70.5

Ionos Q3 2024 $IOS (-2,4%)

Financial performance:

• Total revenue: In the first nine months of 2024, total sales increased by 7.8% to EUR 1,141.6 million compared to the same period of the previous year.
• Adjusted EBITDA: Adjusted EBITDA grew by 9.2% to 334.5 million euros.
• EBITDA margin: The adjusted EBITDA margin improved to 29.3% compared to 28.9% in the previous year.

Balance sheet overview:

• Total assets: As at September 30, 2024, total assets amounted to EUR 1,656.6 million, a slight increase on the previous year.
• Net debt: Net debt fell to EUR 917 million, which corresponds to a gearing ratio of around 2.2x net debt to adjusted EBITDA for the last twelve months.

Details of the income statement:

• EBIT: EBIT for the first nine months of 2024 amounted to EUR 238.3 million, which corresponds to an increase of 6.0% compared to the previous year.
• Adjusted EBT: Adjusted EBT increased by 20.2% to 192.5 million euros.

Cash flow overview:

• Free cash flow: Free cash flow increased by 25.8% to EUR 219.1 million in the first nine months of 2024.
• Operating cash flow: Cash flow from operating activities increased by 21.3% to 285.7 million euros.

Key figures and profitability metrics:

• Adjusted earnings per share (EPS): Adjusted EPS increased by 11.6% to 0.96 euros.
• Gross margin: The gross margin improved from 47.8% in the previous year to 49.2%.

Segment information:

• Cloud solutions: Revenue in the Cloud Solutions segment rose by 7.6% in the third quarter of 2024 and recorded an increase of 11% since the beginning of the year.
• Web Presence & Productivity: Sales in this segment, excluding the aftermarket, grew by 12.3% year-on-year in the third quarter.

Competitive position: IONOS is well positioned as a digitalization partner for European SMEs and has established itself as a trusted cloud provider. The company uses the integration of AI to improve its product offering and customer experience.

Outlook and management commentary:

• Forecast for 2024: The company confirms its outlook for 2024 with constant currency revenue growth of 9% and an adjusted EBITDA margin of around 29%.
• Cloud solutions: Revenue growth in the cloud solutions segment is estimated at 13% for the year, slightly below the previously forecast 15-17%.

Risks and opportunities:

• Risks: A slowdown in the aftermarket business is expected in the medium term, which should have less of an impact on the EBITDA margin in the future.
• Political uncertainties: Political uncertainties in Germany could have an impact on government investments. Nevertheless, the company remains confident about its growth strategy.

Positive aspects:

• Strong sales growth of 7.8% year-on-year.
• Improved adjusted EBITDA margin to 29.3 %.
• Significant increase in free cash flow of 25.8 %.
• Successful integration of AI to improve the product range.
• Strong growth in customer base with 170,000 new customers.

Negative aspects:

• Cloud solutions fall slightly short of growth expectations at 13%.
• Volatility in the aftermarket business with lower margins.
• Higher marketing expenses impacting the EBITDA margin.
• Political uncertainties in Germany could impact federal contracts.
• Slight increase in churn rate to 14% due to price changes.

Summary Earnings, 12.11. 👇🏼

$VOD (+1,05%) | Vodafone Q2/H1 24 Earnings

Q2 Service Rev EU7.64B (est EU7.62B)

H1 Oper Profit EU2.38B (est EU2.41B)

Still Sees FY Adj Free Cash Flow At Least EU2.4B

FY25 Guidance Reiterated

$AZN (+1,35%) | AstraZeneca Q3 24 Earnings

Core EPS $2.08 (est $2.06)

Rev. $13.57B (est $13.08B)

Raises FY Core Eps View To High Teens Percentage Growth

To Invest $3.5B In R&D And Manufacturing In The US

Upgrades FY Guidance

$9434 (+0,45%) | SoftBank Q2/H1 Earnings 2024

Q2 SVF Profit 313.14B Yen (est 83.11B Yen)

Q2 Net Income 1.181 Yen (est 294.83B Yen)

Q2 Dividend 22.00 Yen

H1 Net Income 1,011 Yen

H1 Net Sales 3,471 Yen (est 3.42T Yen)

Still FY Dividend 44.00 Yen (est 44.00 Yen)

$BAYN (+1,03%) | Bayer Q3 24 Earnings

Sales EU9.97B (est EU10.15B)

Core EPS EUO.24 (est EU0.31)

Adj. EBITDA EU1.25B (est EU1.33B)

Sees FY Adj. EBITDA EU10.4B To EU10.7B (est EU10.35B)

Now Sees FY Pharma Outlook At Upper End Of Range

Bayer Confirms Sales Growth Outlook

$IFNNY (+1,13%) | Infineon Q4 24 Earnings

Rev, EU3.92B (est EU3.98B)

Total Segment Profit EU832M (est EU792.5M)

Infineon Sees Q1 Revenue About EU3.2B (est EU3.77B)

Sees Q1 Rev. About EU3.2B (est EU3.77B)

2025 Revenue Is Expected To 'Slightly' Decline

$BNR (+1,03%) | Brenntag Q3 24 Earnings:

- Oper EBITA EU281.1M (est EU295.8M)

- Still Sees FY Oper EBITA EU1.1B To EU1.2B

- Cites Challenging Geopolitical, Macroeconomic Operating Conditions

$VBK (+2,36%) | Verbio recorded an operating loss of 6.6 million euros in the first quarter of the financial year due to a weak biofuel market. Group CEO Claus Sauter expects significant increases in earnings in the second half of the year due to possible new legal regulations.

$JUN3 | Jungheinrich faces a subdued business outlook due to the weak economy and expects sales and incoming orders to be at the lower end of the forecast ranges. In the third quarter, however, the company recorded a 6.5 per cent increase in incoming orders to 1.3 billion euros, while sales declined slightly.

$JEN (+0,33%) | Jenoptik increases its operating result (EBITDA) by 14.9% to 59.1 million euros in the third quarter and confirms its annual targets for 2024 despite an uncertain market environment. Revenue grows by 4.0% to 274.3 million euros, but falls short of expectations

$SIX2 (-1,56%) | Sixt is again lowering its profit forecast for the full year to a pre-tax profit of around EUR 340 million, while analysts had expected an average of EUR 352 million. Despite a ten percent increase in revenue in the third quarter, the negative impact of falling residual values is expected to remain high.

$SFQ (+0,86%) | SAF-Holland is lowering its sales expectations for 2024 from EUR 2 billion to EUR 1.95 billion, but is maintaining its target margin of around ten percent for adjusted EBIT. In the third quarter, the company recorded a decline in sales of over 20 percent and a 63 percent drop in net profit to EUR 9.3 million.

$UTDI (+1,44%) | United Internet reports a slight decline in EBITDA to EUR 978 million in the first nine months due to increased expenses for the 1&1 mobile network. Sales of the 1&1 mobile subsidiary rose by 2.5 percent, but EBITDA fell by nine percent to EUR 463 million, while the sales forecast was lowered.

$IOS (-2,4%) | Ionos increases sales in the first nine months by almost eight percent to over 1.1 billion euros and adjusted EBITDA by nine percent to 334.5 million euros. The company confirms its annual targets and is optimistic about the remaining months of the financial year.

$KWS | KWS Saat increases net sales by 18 percent to 248.6 million euros in the first quarter and reduces its loss before taxes by 19.4 percent to 37.4 million euros. The company confirms its guidance for fiscal 2024/25 and records extraordinary income of EUR110 million from the sale of its South American corn and sorghum business.

An update on the portfolio after crossing the next thousand. Still nice and boring with only 7 positions (2 ETFs and 5 individual stocks).

Long-term investment strategy with an investment horizon of another 15-18 years. From then on it would slowly move towards retirement. I have been invested since 02/2023.

The ETFs as my main investment with currently just under 40% and the goal of reaching 50-60% at some point.

• $VWRL (+1,44%) FTSE All-World (UPDATE) which has now replaced the MSCI World in order to keep the US below 60% in the long term.
• $VUSA (+1,54%) S&P 500 extra to take advantage of slightly higher returns compared to the All-World.

Plus a handful of individual stocks:

• $MSFT (+1,15 %) long-term blue chip growth with a small dividend. (savings plan)
• $8001 (-0,47 %) long-term strong growth and a decent dividend. (savings plan)
• $ALV (+0 %) as a long-term runner with a decent yield and very good dividend. (savings plan)
• $NOVO B (+3,18%) (UPDATE) with us since August.
• $PLTR (+0,68 %) as a long-term tech bet with +59% so far/since November. Additional purchases when opportunities arise. (UPDATE) In July I had said goodbye to $IOS (-2,4%) (at 26.02) - among other things because too much tech overall.

Think it is slowly leveling off. Sales forecast was reduced the week before last. For tech growth I still have $MSFT (+0,93%) and $PLTR (+7,48%)