Topic: Einhell released strong final Q3 numbers in line with preliminary results. Further, Einhell confirmed its previously increased FY24e guidance (company news 10 October).

Q3 sales increased 14.5% yoy to € 263m thanks to the ongoing strong demand for the company’s Power X-Change products (9M’24: 50% PXC share; +5ppts yoy). Q3 sales in Western Europe incl. DACH increased 24.7% to € 146m, still making up the bulk of overall revenue with c. 55% of Group sales. Sales in Eastern Europe came in at € 29.8m, a 7.6% increase yoy supported by a strong demand from Turkey despite the difficult local economic environment. Overseas and Other Countries showed a flat yoy sales development at € 72.8m, driven by a solid performance of Einhell Australia but offset by top-line challenges in Einhell Canada and South Africa. 

EBT for Q3’24 increased disproportionately by 22.5% to € 22.6m with an EBT margin of 8.6% (+0.6ppts yoy) mainly due to a decreased material cost ratio and operating leverage leading to a decreased personnel cost ratio. The ratio of material cost declined 2.1ppts yoy to 58.2% thanks to the increasing share of PXC products, which tend to deliver higher gross margins. While personnel costs rose 8.5% yoy to € 36.4m due to wage inflation and higher variable compensation, headcount decreased 2.5% yoy predominantly due to reductions in Thailand and the sale of Einhell Colombia on 31 May 2024. However, despite the absolute increase in personnel costs, the expense ratio decreased 0.8ppts yoy thanks to a higher turnover. On the other hand, other operating expenses increased disproportionately by 19.5% to € 45.3m (17.2% of sales; +0.7ppts yoy) mainly due to higher advertising costs.

Einhell confirmed its FY24e guidance of € 1,070m sales and an EBT margin in the range of 8.0-8.5%. In our view, the new guidance looks still plausible thanks to the strong demand for Einhell’s Power X-Change products and the favorable top-line development in 9M. Further, we expect a 0.4ppts yoy increase in EBT margin to 8.2% as an increasing PXC share and operating leverage is kicking in. Going forward, we expect the positive momentum to continue during FY25e (eNuW sales: € 1,145m).

Reiterate BUY with an unchanged PT of € 86 based on DCF.