Märkte & Kurse

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Original-Research: 123fahrschule SE - from NuWays AG

19.07.2024 / 09:01 CET/CEST
Dissemination of a Research, transmitted by EQS News - a service of EQS
Group AG.
The issuer is solely responsible for the content of this research. The
result of this research does not constitute investment advice or an
invitation to conclude certain stock exchange transactions.

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Classification of NuWays AG to 123fahrschule SE

     Company Name:               123fahrschule SE
     ISIN:                       DE000A2P4HL9

     Reason for the research:    Update
     Recommendation:             BUY
     from:                       19.07.2024
     Target price:               EUR 7.20
     Last rating change:
     Analyst:                    Philipp Sennewald

H1 prelims to show further operational improvements

Next week,123fahrschule will report H1 figures. H1 sales are seen to
increase by 6% yoy to EUR 11.1m (eNuW), which once again looks set to be
predominantly driven by the Private Customer segment (eNuW: EUR 8.4m) thanks
to the imposed price increases, while the number of private customer
registrations should have remained rather stable. Moreover, we expect the
Professional Driver Education with EUR 1.3m sales (+15% yoy; eNuW) the Driving
Instructor Training segment with EUR 1.5m sales (+10% yoy; eNuW) to continue
on its strong growth paths.

However, EBITDA is seen to come in slightly softer yoy at EUR 0.1m (vs EUR 0.2m
in H1'23), mainly due to a change in accounting, as the company is now
building up provisions (i.e. vacation accruals) throughout the year instead
of once a year in December. Adjusted for this effect, EBITDA should rather
be in the region of EUR 0.5m (eNuW).

Overall, we expect the release to fully underpin our investment case,
although it should only fully unfold next year when the positive effects
from online theory lessons looks set to materialize. In fact, c. 50% of
theory lessons can be held online, which should save the time resources of
driving instructors and hence increase efficiency. This should ultimately
ramp-up returns and profitability.

Moreover, 123f intends to further increase efficiency with the
implementation of driving simulators, which allow learner drivers to
complete up to 10 lessons in the future. According to management this should
lead to significant scale effects as it increases the FTE per learner driver
ratio. Through the acquisition of Foerst GmbH, 123f has additionally secured
the sourcing of simulators. The company also plans to expand Foerst's
portfolio with its proprietary software elements in order to offer an
improved product also to third party market participants as part of a rental
model (not yet included in our model).

Furthermore, one of 123f's key USP's remains its in-house instructor
training (10% market share), which grants the company a significant
competitive edge given an average age of instructors in Germany of around 55
years. Unlike 123f, many competitors face succession problems. In order to
take advantage of the situation, the company thus plans to open another
instructor training center in FY25, increasing the annual capacities by
another 30%.

Against this backdrop, the stock remains a BUY with an unchanged PT of EUR
7.20 based on DCF.

You can download the research here: http://www.more-ir.de/d/30255.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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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss
bestimmter Börsengeschäfte.
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben
analysierten Unternehmen befinden sich in der vollständigen Analyse.
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1949627 19.07.2024 CET/CEST

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