^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: 25.04.2024Target price: EUR 227.00Target price on sight of: 12 MonatenLast rating change: Analyst: Mark SchüsslerQ4 in line with prelims // solid FY24 guidance; chg. Einhell released Q4 results in line with prelims, showing a slowdown versusprevious quarters. Group sales decreased by 5% yoy to EUR 216m, bringing fullyear sales to EUR 972m (-6% yoy). In DACH, Einhell continued to experience asomewhat muted consumer sentiment, explaining why regional sales declinedby 8.1% yoy. Meanwhile, both Western and Eastern Europe experienced healthyyoy growth of 7.2% (Q3: 1.5% yoy) and 17.8% (Q3: 32.1% yoy), respectively,while overseas markets experienced a pronounced contraction of 16.7% yoy(Q3: 4.8% yoy), mainly driven by adverse currency translation effects(relative weakness of Australian and Canadian dollar) as well as mutedconsumer sentiment in Australia. While the gross margin rose 2.8pp yoy to 43.2% supported by easingsupply-chain constraints and higher PXC share (44% of sales or +4pp yoy),Q4 EBT fell by 31% yoy to EUR 12.6m, bringing full year EBT to EUR 75.4m (7.8%margin vs. 8.5% in FY22). This largely resulted from (1) negative operatingleverage due to fewer orders by DIY chains (high inventories built up inprevious years) and (2) PPA effects from the acquistions in Canada andThailand (adjusted for these effects EBT margin would have been c. 8%).Still, Einhell was able to exceed pre-pandemic levels (Q4'19: 4%) andmanaged to significantly reduce working capital (-28% yoy) and thus boostFCF generation in FY'23 to EUR 197m (eNuW: EUR 175m, +514% yoy), which shouldindicate fewer promotional activity going forward. The company issued a solid FY24 guidance with sales expected to grow by 6%yoy to EUR 1,030m (eNuW: EUR 1,030m, eCons: EUR 1,039m) partially driven by aneasier comparable base as well as easing consumer sentiment in DACH (38% ofsales), along with overseas markets (26% of sales) likely benefiting fromthe introduction / continued expansion of the Power X-Change platform (e.g.Canada). The EBT margin is seen to come in at 7.5-8.0% (eNuW new: 7.9%,eNuw old: 8.2%), implying an EBT of EUR 77-82m. This should be supported bythe sustained trend towards higher-margin Power X-Change products leadingto positive mix effects, offset by higher personnel expenses stemming fromacquistions in Vietnam and Thailand and higher marketing expenses. Thelatter should strengthen Einhell's brand in preparation for entering newmarkets through the acquisition of a smaller local DIY brand and graduallyreplacing the assortment with best-in-class price/value PXC products. Against this backdrop, valuation looks undemanding, trading at 9.6x PER 24eand a 10.5% FCF yield.BUY, PT EUR 227, based on DCF.You can download the research here:http://www.more-ir.de/d/29515.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.°