Original-Research: Einhell Germany AG - from NuWays AG
23.08.2024 / 09:01 CET/CEST
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Classification of NuWays AG to Einhell Germany AG
Company Name: Einhell Germany AG
ISIN: DE0005654933
Reason for the research: Update
Recommendation: BUY
from: 23.08.2024
Target price: EUR 84.00
Last rating change:
Analyst: Mark Schüssler
Final Q2 results & guidance confirmed; 1:3 share split; chg.
Yesterday, Einhell released final Q2 results with sales amounting to EUR 307m or +11.1% yoy, implying a stronger Q2 performance than initially expected by management after releasing preliminary Q2 results in June (sales of EUR 295m or vs. eNuW: EUR 292m). Once again the satisfactory sales development was driven by an ongoing strong demand for the company's Power X-Change products (H1'24: 51% PXC share; +5ppts yoy). Q2 sales in DACH came in at EUR 135m (+6.3% yoy), still making up the bulk of overall revenue with c. 43% of Group sales. Western Europe grew by 6.2% yoy to EUR 57m, while Eastern Europe performed strongly, growing 30% yoy to EUR 35m as a result of stronger demand in Turkey, Croatia, and Poland. Overseas and Other Countries grew 13.7% to EUR 65m, driven by solid performance of Einhell Australia (formerly Ozito), offset by top-line challenges in both Canada and South Africa.
EBT for Q2'24 was EUR 27.5m (+14.6% yoy) with an EBT margin of 9% (+0.3ppts yoy), mainly due to operating leverage, offset by PPA effects with regards to the acquisitions in Thailand and Vietnam. While the gross margin was roughly on par with last year's figure due to easing but still noticeable cost inflation (41.4% or +1ppts yoy), personnel expenses grew 9% yoy to EUR 35m (11.5% of sales) as an increased employee base in combination with the acquisitions in Thailand and Vietnam weighed on operating profitability. Other operating expenses also increased markedly by 11.8% to EUR 59m (19.2% of sales) as the revenue share expended on marketing and advertising increased by 1.7ppts to 7.4% of sales in H1.
Einhell confirmed its FY24e guidance of 6% sales growth yoy to around EUR 1,030m (eNuW: EUR 1,035m) and sees its EBT margin at the upper end (8%) of the 7.5-8% guidance corridor (eNuW: 7.6%). In our view, this continues to look achievable as the healthy sales growth and solid EBT profitability in Q1 and Q2 should provide confidence, aided by a less challenging H2'23 comparable base. Given that Einhell has a sound track record of expanding internationally via M&A, a targeted US market entry should provide the company access to the largest DIY market globally and help with rolling-out its leading Power X-Change platform there.
Due to a 1:3 stock split and the increased share count we have adjusted our model and PT accordingly and reiterate our BUY rating post-split with a PT of EUR 84 (pre-split: EUR 227), based on DCF.
You can download the research here: http://www.more-ir.de/d/30603.pdf For additional information visit our website: www.nuways-ag.com/research
Contact for questions:
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag
Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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1973571 23.08.2024 CET/CEST
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