Caused by supply chain issues and raw material price inflation, Rosenbauer’s operating result turned negative during FY’22. However, Rosenbauer successfully managed the operating turnaround and delivers positive results again since Q2 2023. Thanks to Rosenbauer having done its homework and structural trends kicking in, we expect this turnaround to continue in 2024.

Until 2025e, Rosenbauer should be able to grow sales by 6.9% p.a. (2022-25e CAGR) to € 1.2bn with EBIT margins north of 5% (eNuW 2025: 5.4%) thanks to:

• Supply chain improvements: During FY’22 chassis lead times of OEMs deteriorated significantly. Although lead times are still not back at pre-crisis levels, the situation is noticeable better than in FY’22. For example, the average MAN chassis lead time decreased from over 18 months in FY’22 to 10-12 months in FY’23. However there is no further material improvement of delivery times expected at MAN and Daimler in 2024, while Volvo and Scania should approach pre-crisis levels.
• Significant price increases: Rosenbauer raised its vehicle prices substantially during FY’23, to account for a higher cost base. The average price per fire truck in 9M 2023 increased by 9.8% yoy and the average price per vehicle body increased by 22.7% yoy. Old unprofitable customer contracts not reflecting the higher cost base are successively leaving the order book and giving room for a further margin improvement.
• Structural growth drivers: Global warming for instance causes a severe rise in natural disasters such as wildfires, storms, and floods which elevates the demand for firefighting equipment and trucks. Another growth driver is the electrification of firefighting trucks, supporting the demand for Rosenbauer’s high margin electric models RT (Revolutionary Technology) and the PANTHER electric.

As the supply chain situation further improves and with a record high in order backlog (9M 2023: € 1758m) in the hand, shares look poised for a re-rating. Furthermore, Rosenbauer is currently examining the issuance of a hybrid bond to strengthen its balance sheet. A successful issuance could work as a catalyst, bringing the shares back to its intrinsic value. Hence, we reiterate our BUY rating with an unchanged € 54.00 PT based on DCF. -continued-