MAX Automation's Q1 Earnings: A Storm in a Teacup for Long-Term Investors?

The first quarter of 2025 has been a test of patience for MAX Automation investors, with sales plummeting 23% and EBITDA collapsing to near-zero. Yet beneath the surface, the story is far more promising. The company’s order backlog grew 4.6% to €161 million, signaling pent-up demand poised to explode in the second half of the year. For those willing to look past the noise, MAX Automation’s Q1 results aren’t a death knell—they’re a setup for a comeback.

The Disconnect Between Q1 Pain and 2025 Potential

MAX Automation’s Q1 struggles were entirely predictable. Geopolitical jitters, postponed projects in its ELWEMA division, and weak demand in the US market (accounting for 18% of sales) sent sales plummeting. But here’s the key: management isn’t revising its full-year guidance. Sales of €340–400 million and EBITDA of €21–28 million remain firmly in play.

The disconnect lies in timing. Projects delayed in Q1 aren’t canceled—they’re simply rescheduled. For instance:
- Vecoplan’s order backlog rose 20% to €65.5 million, with large recycling projects set to deliver in H2.
- NSM+Jücker’s order intake surged 123%, driven by industrial automation demand in Europe.

The market’s reaction? A 15% drop since January, pricing in a worst-case scenario. But this ignores two critical facts:
1. 80% of MAX’s order backlog is expected to convert into revenue within 12 months, per management.
2. Cost discipline is intact: bdtronic’s restructuring (targeting €75–85 million sales) and improved NSM+Jücker EBITDA prove the company isn’t standing still.

The Backlog Boom: A Catalyst for H2 Earnings

Order backlog growth isn’t just a vanity metric here—it’s a roadmap. Let’s break it down:
- Vecoplan’s Recycling/Waste division now accounts for 45% of sales, a segment less exposed to cyclical downturns than its Wood/Biomass counterpart.
- NSM+Jücker’s backlog jump suggests pent-up demand in industrial automation is finally hitting MAX’s doorstep.

Crucially, the company’s cash position improved to €13.6 million, and a new syndicated loan provides liquidity buffers. Even the equity ratio dip (to 52.4%) is manageable, especially with ZEAL Network shares stabilizing.

Valuation: A Hidden Gem at a Bargain Price

MAX Automation trades at a forward PE of just 12x, far below industrial peers averaging 18–22x. This compression ignores two critical tailwinds:
1. DCF upside: The research firm NuWays’ €7.00 target price (vs. current €5.20) assumes only €25 million in EBITDA—well within MAX’s guidance range.
2. Balance sheet stability: A 52% equity ratio and €161 million backlog create a moat against macro risks like US tariff disputes.

Conclusion: Buy the Dip Before H2’s Surge

MAX Automation’s Q1 was a speed bump, not a roadblock. The delayed projects aren’t a permanent loss—they’re deferred gains. With H2 set to deliver on its backlog, and valuation multiples at cyclical lows, this is a rare “buy the panic” opportunity in an industrial sector starved for growth.

Investors who act now could reap rewards as MAX’s delayed projects, cost cuts, and backlog finally align to deliver on its 2025 guidance. The storm may still rage in Q2, but the teacup is already filling.

Final Call: MAX Automation (ETR: MZA) at €5.20—Buy with a 12-month target of €7.00.