DistIT: Pressing the reset button on EFUEL - ABG

We cut '23e-'25e EBIT by 49-34%
Easee ban weighs on EFUEL
'23e-'24e EV/EBIT ~23x-10x

What to expect in Q1'23

We anticipate Q1'23e sales of SEK 606m and an EBIT of -3m, down from SEK 619m and SEK 3m in our previous Q1'23 estimates. Due to the countrywide ban, in Sweden, on the sale of Easee's EV chargers, EFUEL is likely to be adversely impacted, starting from mid-March, while partnerships with newly onboarded brands such as DEFA will require a ramp-up period of approximately one quarter. Moreover, we reduce our cash release estimate from net working capital, relating to lagging customer destocking, from SEK 33m to SEK 7m, as demand for consumer electronics has likely not yet recovered.

Estimate changes

We cut '23e-'25e sales by 7-13% and EBIT by 49-34% following the ban on Easee products. While the company has announced partnerships with other brands, we would require additional information regarding the demand for these brands in order to better estimate EFUEL's growth. That said, the Wallbox partnership could entail somewhat higher gross margins for EFUEL because of the brand's premium offering. Nevertheless, based on current facts and circumstances, in Q4'23e we expect EFUEL to achieve a similar sales run-rate as it did in Q4'22, meaning that the growth curve is postponed by one year. With respect to the other segments, we mostly maintain our estimates and continue to believe that Aurdel will begin to rebound in H2'23e at the earliest.

Implied valuation

Based on our revised estimates, the company is trading at a '23e-'24e EV/EBIT of ~23x-10x.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/distit/Equity-research/2023/4/distit---pressing-the-reset-button-on-efuel/