UPDATE

In 2024 ESPE presents the first consolidated financial statements in recent history, expanding the scope of consolidation only one year after listing and reflecting structural expansion driven by vertical integration and growth by external lines. Value of production reaches € 66.0 million with EBITDA of € 8.6 million (13.1%) and Net Income of € 3.4 million, allowing the Board of Directors to approve the distribution of a dividend of € 0.15 per share, with a dividend yield of 4.8% and payout at 36.3%. NFP worsens slightly due to working capital and investments made, but at the same time the backlog exceeds € 100.0 million, providing visibility on results until mid-2026. The coming months will focus on the integration of the new investments in Permatech Srl (FTV development), Rigoni Lab Srl (engineering), Reflow Srl (O&M) and Soland Srl (EPC), as well as the implementation of ongoing projects to strengthen the presence in the energy sector.  In light of the results published in the annual report for FY24A, we slightly adjust our estimates for the coming years, extending the time horizon to 2027.  Specifically, we expect 2025 production value of € 70.10 million with EBITDA of € 9.10 million, confirming the 2024 margin of 13.0%. For the following years, we expect volume and production value to increase to € 102.20 million in FY27E (CAGR 2024-2027: 15.7%) and EBITDA of € 12.50 million, corresponding to a 13.2% marginality.  We conducted the assessment of ESPE’s equity value based on the DCF method, including a specific risk of 2.5% in the WACC calculation. The equity value, using DCF, is € 78.5 million. Target price is € 5.15 (prev. € 4.40), BUY rating and MEDIUM risk.

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