Original-Research: Einhell Germany AG (Von Nuways AG)

2024-10-04 02:12:51

(MENAFN- EQS Group)

Original-Research: Einhell Germany AG - from NuWays AG
04.10.2024 / 09:20 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.

Classification of NuWays AG to Einhell Germany AG

Company Name:	Einhell Germany AG
ISIN:	DE0005654933

Reason for the research:	Update
Recommendation:	BUY
from:	04.10.2024
Target price:	EUR 84
Target price on sight of:	12 Monaten
Last rating change:
Analyst:	Konstantin Völk

Power X-Change paves the way for further market share gains

On Tuesday, Einhell attended the European Midcap Conference in Paris, hosted by NuWays in cooperation
with CF&B. Here are our key takeaways:

Mid-term sales target: Einhell aims to reach € 2bn in sales between FY27-FY29, depending on the
geopolitical situation (eNuW FY28e: € 1.2bn). In addition to expansions into new geographic markets,
growth should also come from a steadily increasing market share in DACH (currently 39% for cordless
garden products and 20% for tools), which is driven by Einhell's Power X-Change products.

Furthermore, with € 2bn in sales, Einhell's CEO Kroiss estimates generating a 10% EBIT margin due to
economies of scale and an increasing share of the high margin Power X-Change products (51% of sales
in H1'24). After reaching a 10% EBIT margin, Management does not intend to increase profitability further
but instead focus on delivering the best possible experience for customers. The concept of scale
economies shared (passing through the benefit of scale to the customer, which increases sales even
further) is a reasonable strategy in our view and does not only help to strengthen Einhell's brand perception
but also builds a moat by reaching scale. In addition, we like Kroiss' long-term view and customer focus,
who not only contributed substantially to Einhell's past success in his role as CEO since 2003 but is
also Einhell's second largest shareholder.

US expansion: To fuel future growth, Einhell intends to get a foot into the US DIY market (c. 56% of
global DIY). As building a proper infrastructure for the US market can be both time-consuming and costly,
the preferred way to enter the American market is via M&A. However, finding a suitable target for c. €
150m has turned out to be a difficult task.

Brand building partnerships: Since January 1st, Einhell has been the partner of the Mercedes-AMG
PETRONAS F1 Team and supports the team with its Power X-Change devices as its“Official Tool Expert”.
Further, since August 2021, Einhell has also been the“Official Home and Garden Expert” for FC
Bayern Munich. Management intends not to add a third comparable partnership, emphasize however the
importance of the partnership with Mercedes to strengthen its brand in the US. Formula 1 has recently
gained popularity in the US and hosts already three races in 2025 (Miami, Austin, Las Vegas).

We continue to like the stock and reiterate BUY with an unchanged PT of € 84, based on DCF.
You can download the research here:
For additional information visit our website:
Contact for questions:
NuWays AG - Equity Research
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Email: ...
LinkedIn:
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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