09.04.2024-
Original-Research: Einhell Germany AG (von NuWays AG): Kaufen
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Original-Research: Einhell Germany AG - from NuWays AG
Classification of NuWays AG to Einhell Germany AG
Company Name: Einhell Germany AG
ISIN: DE0005654933
Reason for the research: Update
Recommendation: Kaufen
from: 09.04.2024
Target price: EUR 227
Target price on sight of: 12 Monaten
Last rating change:
Analyst: Mark Schüssler
Gradual recovery underway // better FY'24 outlook; chg.
After Einhell indicated that it will not be able to achieve its adjusted
FY'23 guidance of EUR 1.0bn in revenues, FY sales are now expected to come in
at c. EUR 972m (eNuW: EUR 991m), implying weaker-thanexpected Q4'23 sales (5%
yoy), largely due to muted consumer sentiment and unfavorable FX effects.
However, FY profitability should remain at a healthy level, carried by a
significantly improved gross margin of 38-39% (+2-3pp yoy; eNuW) on the
back of a favorable product mix (i.e. higher share of PXC), and likely
leading to an EBT margin of c. 7.7% (eNuW old: 8%), thus still exceeding
pre-pandemic levels (FY'19: 5%). Positively, Einhell should have been able
to significantly reduce working capital (-24% yoy to EUR 379m) and boost FCF
generation in FY'23 (eNuW: EUR 175m, +443% yoy).
That said, Einhell looks set to return to growth in FY'24e on the back of
easier comps, sustained market share gains, positive M&A and FX effects.
Hence, we model 6% yoy sales growth to EUR 1,030m (eNuW old: EUR 1,050m) with
an EBT margin recovering by 0.2pp yoy to 8.2% thanks to lower input costs,
positive mix effects and FX, which should turn into a tailwind latest in
H2'24. Three promising growth avenues should help Einhell steadily grow its
top and bottom line over time:
(1) increasing the revenue share of Power X-Change products with higher
margins (mid-term targets: revenue share of 70% by 2029 and 450+ product
'skins' by 2027) benefiting from a structural trend towards cordless power
and garden tools along with
(2) marketing investments to increase brand awareness (FC Bayern Munich,
Mercedes AMGPetronas F1), which ultimately lays the foundation for
(3) international expansion via its proven sucess model of gaining market
access through the acquisition of a smaller local DIY brand and gradually
replacing the assortment with best-in-class price/value PXC products.
Following its successful international expansion in e.g. Australia and
Canada, the US market should provide an attractive growth opportunity given
that it is by far the largest DIY market globally and Einhell's major rival
Ryobi seems to neglect the online channel as well as Tier-2 DIY stores
(eNuW: 2000-4000 stores), which Einhell aims to tackle (eNuW: US market
entry in FY24e).
Against this backdrop, valuation looks undemanding, trading at 9.7x PER 24e
and a 10.5% FCF yield. BUY, PT EUR 227 (old: EUR 225), based on DCF.
You can download the research here:
http://www.more-ir.de/d/29345.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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Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.
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The result of this research does not constitute investment advice
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