Yesterday, we held a digital roundtable with 123fahrschule, where CEO Boris Polenske outlined the implications of the recently announced amendments to the learner driver training in Germany. To remind you, last week, Germany’s Federal Ministry of Transport (BMDV) held an information event, where it provided comprehensive insights into the amendment of the learner driver training. The main highlights were the re-introduction of online theory as well as the use of driving simulators for up to 10 lessons. The changes are expected to come into effect in Q1’26e and are seen to significantly change and improve driving school training going forward. In detail:

Online Theory. Starting 2026, driving schools will be allowed to re-introduce online lectures, comprising up to 6 of the total 14 lectures. While this should save the time resources of driving instructors and hence increase efficiency, it will also have positive impacts on students. In fact, 123f plans to introduce two one-day seminars, comprising 8 lectures in presence in central locations. Afterwards, the theoretical training moves on to online courses, which will take place daily except for Sundays, offering students increased flexibility. Moreover, as students will have to attend only 2 days in presence, we expect an increased willingness to travel also longer distances of up to 30 minutes, thus increasing 123’s catchment area. In our view, this should enable 123f to significantly increase local market share.

Driving simulators. The BMDV also announced that driving simulators will be a part of the education going forward, as learner drivers will be allowed to complete their manual gearbox training on the simulator. This has several positive implications for 123f. (1) From 2026, 123f will no longer need switchgear vehicles, which alone should result in an annual EBIT effect of € 0.4m. (2) It compensates for the shortage of driving instructors. (3) As 30% of the practical training gets shifted to the simulator, driving instructors are able to drive more lessons per student and week. (4) Given the comparably low costs of operating a simulator, 123f will be able to achieve similar contribution margins while offering its product at a lower price than the competition, which should increase the market share of the company further, as smaller, local peers will not be able to equip their branches with simulators due to cost and space issues.

Overall, the information provided by the BMDV fully underpins our expectations and should further boost 123f’s top-line growth as well as margin expansion going forward. In light of the tailwinds, 123f remains a BUY with an unchanged PT of € 7.20 based on DCF.