Original-Research: Einhell Germany AG (von NuWays AG): BUY

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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

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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 EUR 2bn in sales between

FY27-FY29, depending on the geopolitical situation (eNuW FY28e: EUR 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 EUR 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. EUR 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 EUR

84, based on DCF.

You can download the research here: http://www.more-ir.de/d/30989.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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