UPDATE

Solid World Group’s year 2024 closes under the banner of strategic refocusing, which has primarily seen the gradual exit from the solar business (SolidFactory) to concentrate resources on the industrial and biomedical sectors, which are considered more synergetic, scalable and high-margin. The Group is now expanding its interests in the defence and aerospace sector, thanks to the acquisition of DuePiGreco and the start-up of the production of 3D components for military and institutional applications. The rationalisation of the perimeter brings a clear improvement in operating margins (EBITDA € 6.46 million vs € 3.40 million in 2023) despite slightly declining revenues. The transition of the software model from perpetual licences to SaaS continued, strengthening the quality and recurrence of revenues, while the Electrospider product established itself globally, with active orders in clinical and academic centres in Europe, the USA and the Middle East. In light of the results published in the annual report, we adjust our estimates for both the current year and the coming years, extending the time horizon to 2027. In particular, we estimate FY25E production value to grow to € 70.00 million and an EBITDA of € 4.75 million, corresponding to a margin of 10.1%. For the following years, we expect value of production to increase to € 90.00 million (CAGR FY24A-FY27E: 10.8%) in FY27E, with EBITDA of € 7.00 million and a margin of 8.1%, up from € 6.46 million in FY24A. We conducted the evaluation of the equity value of Solid World Group based on the DCF method and multiples of a sample of comparable companies. The DCF method (which for prudential purposes also includes a specific risk of 2.5% in the WACC calculation) yields an equity value of € 67.7 million. The equity value of Solid World Group using market multiples comes to € 44.3 million. This results in an average equity value of approximately € 56.0 million. The target price is € 3.00, rating BUY and risk MEDIUM.

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