Original-Research: Einhell Germany AG - from NuWays AG
11.10.2024 / 09:00 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS Group AG.
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Classification of NuWays AG to Einhell Germany AG
Company Name: Einhell Germany AG
ISIN: DE000A40ESU3
Reason for the research: Update
Recommendation: Buy
from: 11.10.2024
Target price: EUR 86.00
Target price on sight of: 12 months
Last rating change:
Analyst: Konstantin Völk
Strong preliminary Q3 // FY guidance raised; chg. est. & PT
Topic: Yesterday evening, Einhell released strong preliminary Q3 sales numbers above our expectations. Further, the company increased its sales and EBT guidance for FY24.
Q3 sales increased 15% yoy to EUR 264m (eNuW: EUR 250m), driven by the ongoing strong demand for the company's Power X-Change products (c. 50% PXC share).
While Q3 EBIT has not been released, we expect it to come in at EUR 23.9m (Q3'23: EUR 20.2m; +19% yoy), which would lead to a solid 9.1% margin (+0.3ppts yoy). The expansion of Power X-Change should be a major contributor due to its high gross margins (50% PXC share vs. 45% for 9M'23). Personnel expenses are seen be around last year's level (eNuW EUR 34.0m vs. EUR 33.6m in Q3'23) as effects from wage inflation and a lower headcount due to the sale of Einhell Colombia and personnel changes at the subsidiary in Thailand should offset. However, we expect other operating expenses to increase yoy to EUR 45m or 17.1% of sales (vs. EUR 37.9m, 16.5% in Q3'23) due to:
(1) Higher outgoing freight rates, as the Houthi militia started attacking freight liners in the Red Sea, container ships have been taking alternative routes around Africa, which increased transit times by about 14 days.
(2) Higher marketing expenses due to the intense cooperations with the Mercedes-AMG PETRONAS F1 Team and FC Bayern Munich. Marketing and advertising expenses increased already successively in the last years and accounted for 7.4% of sales in H1'24 (vs. 5.7% in H1'23).
FY guidance raised: As a result of the positive business development, management now expects EUR 1,070m in sales (previously: EUR 1,030m) and an EBT margin of 8.0-8.5% for FY24e (previously: around 8.0%). Thanks to the strong top-line growth in the first 9M and the successful expansion of Power XChange, the FY guidance looks plausible to us (eNuW sales EUR 1,080m; EBT 8.2%). Einhell remains a clear BUY in our view, as the stock is (1) trading at only 8x EV/EBIT, (2) delivers stable ROIC's (eNuW FY24e 13%) above its cost of capital and has (3) substantial growth potential if the company can successively enter the US market.
We reiterate our BUY rating with a new PT of EUR 86 (old: EUR 84) based on DCF.
You can download the research here: http://www.more-ir.de/d/31037.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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2006475 11.10.2024 CET/CEST
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