Topic: Rosenbauer will release its Q3 report on November 15. We expect the positive development after a strong H1 to continue.
Revenues are seen increasing 13.6% yoy to € 271m (eNuW) driven by (1) largely restored supply chains, and (2) substantial price increases, which are successively reflected in sales. This should also lead to a 0.8ppts increase in EBIT margin up to a healthy 5.2% (eNuW) and an EBIT of € 14.1m (+35% yoy). We expect this positive trend to continue for Q4'24e and thus a further improvement in profitability for FY24e after the transition year FY23 (eNuW EBIT margin FY24e: 5.2%; FY23: 3.5%; FY22: -1.1%).
Price increases should be a major growth driver: vehicle sales increased 14.8% yoy in H1, which includes a yoy price increase of c. 6%. We expect to see a similar magnitude of price increases in Q3. Once Rosenbauer lifts its vehicle prices, it takes usually 6-12 months to be reflected in the order intake. Hence, the price increases in FY23 are now cooked into the order book and should have a positive impact well into FY25e. Remind you, the order book end of Q1'24 had a 20% higher average price per firetruck than in the previous year. Consequently, price increases should be a major contributor to sales growth in the coming quarters, even if we don't expect Rosenbauer to raise its prices in the near term.
Demand expected to remain strong: in addition to price increases, further growth should be supported by a strong demand that shows up in a solid order intake (H1'24: € 744m; +12% yoy) and is driven by structural trends such as increasing extreme weather events caused by climate change and the electrification of fire trucks. With a record high in order backlog of € 2.02bn, Rosenbauer is set for continuous growth in the coming quarters.
Positive cross read: Rosenbauer's largest competitor Pierce which belongs to the American conglomerate Oshkosh, released last week its Q3 numbers. Revenue within the "Fire apparatus" segment came in at $ 340m, a 13% increase yoy thanks to restored supply chains as well as price increases. Operating income in Vocational came in at $ 100m (+90% yoy) with a solid margin increase of 4.7ppts yoy due to improved price/cost dynamics. The positive development of Oshkosh Pierce gives us additional confidence for Rosenbauer's Q3 figures next week.
We reiterate BUY with an unchanged € 50.00 PT based on DCF.
ISIN: AT0000922554
