Topic: Rosenbauer released solid Q1 figures with sales above but EBIT below our estimates. The demand for firefighting vehicles is unbroken supported by several structural trends, leading to a strong order intake and a new record high in order backlog.

Q1 sales grew by 17.7% yoy to € 226m (eNuW: € 215m) thanks to the company’s strong order backlog of € 1.79bn at the end of FY23 and an average price increase of 8% yoy per fire truck delivered in Q1. On a regional level, growth in the Europe (+67% yoy to € 106m) and the Americas area (+6.0% yoy to € 80m) compensated for a weaker Asia-Pacific (-51% yoy to € 12.4m) and Middle East & Africa area (-9.0% yoy to € 17.1m).

EBIT improved by € 5.2m yoy to € 0.3m (eNuW: € 4.4m) backed by further stabilization of supply chains but also substantial price increases. The reported EBIT includes a negative one-off effect of € 2.3m due to the departure of a member of the Executive Board and the realization of a new banking agreement. The fact that EBIT in the first quarter was positive for the first time in two years, despite negative one-offs, underpins the successful operational turnaround of the company.  

Unbroken strong demand. Q1 order intake stood at € 362m (+24% yoy), implying a book-to-bill ratio of 1.6x. Coupled with the strong demand during the past quarters and supply chain issues, the group’s order backlog grew again to a new record high of € 1.94bn (+20% yoy). Rosenbauer intends to reduce the book-to-bill ratio to a level of 1x to decrease lead times and with that the implied risk in the order book of increases on the cost side like in FY21 & FY22.  

FY guidance reiterated. For FY24e, management expects sales of € 1.2bn (+ 12.7% yoy) and an EBIT margin of 5%. While we are slightly more cautious (eNuW: Sales € 1.18bn, EBIT margin 4.7%), we expect further sequential improvements throughout FY24e after the transition year FY23. FY24e should benefit from (1) price increases which are successively reflected in sales (2) a further improving supply chain and (3) internal efficiency measures.

As the supply chain situation further improves and with a record high in order backlog, shares look poised for a re-rating. Reiterate BUY with an unchanged € 50.00 PT based on DCF.