Märkte & Kurse

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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
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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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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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2006475 11.10.2024 CET/CEST

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