Topic: Rosenbauer released solid FY23 preliminary figures, with sales slightly below and profitability in line with the company’s guidance, which has been increased in October. More importantly, the all-time high in order backlog coupled with unbroken order momentum looks set to pave the way for strong sales and EBIT growth in FY24e.

Preliminary Q4 sales grew 8.9% yoy to € 365m (eNuW: € 383m), largely carried by substantial price increases, and structural growth drivers. Preliminary FY23 sales came in at € 1.06bn (eNuW: € 1.08bn), a 9.5% rise yoy. EBIT in Q4 stood at € 26.2m (eNuW: € 26.2m), up from € 21.3m yoy with a 0.9pp margin improvement due to better supply chains and lower material prices. FY EBIT came in at € 37.4m (eNuW: € 37.3m), implying a 3.5% margin, up 4.6pp yoy and in line with the guidance.    

Preliminary order intake continued to be strong during FY23 thanks to structural growth drivers. FY23 order intake came in at € 1.45bn, leading to a record-high order backlog of € 1.79bn. Growth drivers like 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. In addition, the ongoing electrification of firefighting trucks is supporting the demand for Rosenbauer’s high margin electric models RT (Revolutionary Technology) and PANTHER electric.  

Management anticipates revenues of € 1.20bn in FY24e (eNuW: € 1.16bn), with EBIT margins of 5.0% (eNuW: 4.6%). With an order backlog of 1.7x FY23 revenue and gradually decreasing chassis lead times, we expect Rosenbauer to deliver another year of high single-digit revenue growth together with improving profitability.

Equity ratio issue to be resolved soon. At the end of Q3 FY23, Rosenbauer’s equity ratio stood at only 14.3% (-1.5pp yoy), while debt covenants are at 20%. Positively, management intends to strengthen its balance sheet during FY24e via a capital increase (company news 12.02.2024). Once the problem is solved, it could work as a catalyst, allowing investors to re-focus on the promising mid-term prospects.

We reiterate our BUY rating with an unchanged € 54.00 PT on DCF.