NuWays AG Reaffirms "Buy" Rating for Einhell Germany AG Post-Q2 Results

NuWays AG has reaffirmed its "Buy" rating for Einhell Germany AG, following a robust Q2 performance. Einhell posted sales of €307 million for Q2, representing an 11.1% year-over-year growth. This exceeded earlier projections of €295 million. The company's Power X-Change products remain a driving force, with a 51% share in H1'24, up by 5 percentage points from the previous year.

Regional sales showed mixed results. In the DACH region, sales reached €135 million, a 6.3% increase year-over-year. Western Europe grew by 6.2% to €57 million. Eastern Europe experienced significant growth, rising by 30% to €35 million due to increased demand in Turkey, Croatia, and Poland. Sales from international markets, led by Einhell Australia, grew by 13.7% to €65 million, despite challenges in Canada and South Africa.

Earnings before tax (EBT) for Q2'24 stood at €27.5 million, a 14.6% year-over-year increase. The EBT margin also improved slightly to 9%. Personnel expenses rose by 9% year-over-year, reaching €35 million, influenced by the company's acquisitions in Thailand and Vietnam. The company's gross margin remained steady at around 41.4%.

Einhell confirmed its full-year 2024 guidance, projecting a 6% sales growth to around €1,030 million and an EBT margin at the upper end of the 7.5-8% range. NuWays AG believes these targets are achievable, given the company's solid track record and less challenging comparables in the second half of 2023. The recent 1:3 stock split has led to an adjusted price target of €84, equivalent to €227 pre-split.