^Original-Research: Einhell Germany AG - from NuWays AGClassification of NuWays AG to Einhell Germany AGCompany Name: Einhell Germany AGISIN: DE0005654933Reason for the research: UpdateRecommendation: Kaufenfrom: 09.04.2024Target price: EUR 227Target price on sight of: 12 MonatenLast rating change: Analyst: Mark SchüsslerGradual recovery underway // better FY'24 outlook; chg. After Einhell indicated that it will not be able to achieve its adjustedFY'23 guidance of EUR 1.0bn in revenues, FY sales are now expected to come inat c. EUR 972m (eNuW: EUR 991m), implying weaker-thanexpected Q4'23 sales (5%yoy), largely due to muted consumer sentiment and unfavorable FX effects.However, FY profitability should remain at a healthy level, carried by asignificantly improved gross margin of 38-39% (+2-3pp yoy; eNuW) on theback of a favorable product mix (i.e. higher share of PXC), and likelyleading to an EBT margin of c. 7.7% (eNuW old: 8%), thus still exceedingpre-pandemic levels (FY'19: 5%). Positively, Einhell should have been ableto significantly reduce working capital (-24% yoy to EUR 379m) and boost FCFgeneration in FY'23 (eNuW: EUR 175m, +443% yoy). That said, Einhell looks set to return to growth in FY'24e on the back ofeasier comps, sustained market share gains, positive M&A and FX effects.Hence, we model 6% yoy sales growth to EUR 1,030m (eNuW old: EUR 1,050m) withan EBT margin recovering by 0.2pp yoy to 8.2% thanks to lower input costs,positive mix effects and FX, which should turn into a tailwind latest inH2'24. Three promising growth avenues should help Einhell steadily grow itstop and bottom line over time: (1) increasing the revenue share of Power X-Change products with highermargins (mid-term targets: revenue share of 70% by 2029 and 450+ product'skins' by 2027) benefiting from a structural trend towards cordless powerand garden tools along with (2) marketing investments to increase brand awareness (FC Bayern Munich,Mercedes AMGPetronas F1), which ultimately lays the foundation for (3) international expansion via its proven sucess model of gaining marketaccess through the acquisition of a smaller local DIY brand and graduallyreplacing the assortment with best-in-class price/value PXC products.Following its successful international expansion in e.g. Australia andCanada, the US market should provide an attractive growth opportunity giventhat it is by far the largest DIY market globally and Einhell's major rivalRyobi seems to neglect the online channel as well as Tier-2 DIY stores(eNuW: 2000-4000 stores), which Einhell aims to tackle (eNuW: US marketentry in FY24e). Against this backdrop, valuation looks undemanding, trading at 9.7x PER 24eand a 10.5% FCF yield. BUY, PT EUR 227 (old: EUR 225), based on DCF.You can download the research here:http://www.more-ir.de/d/29345.pdfFor additional information visit our websitewww.nuways-ag.com/research.Contact for questionsNuWays AG - Equity ResearchWeb: www.nuways-ag.comEmail: research@nuways-ag.comLinkedIn: https://www.linkedin.com/company/nuwaysagAdresse: Mittelweg 16-17, 20148 Hamburg, Germany++++++++++Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse.++++++++++-------------------transmitted by EQS Group AG.-------------------The issuer is solely responsible for the content of this research.The result of this research does not constitute investment adviceor an invitation to conclude certain stock exchange transactions.°