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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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