FREE

Motodynamics | Shifting gears on margins near-term; long-term growth prospects intact

More volume, less margin but overall healthy – Motodynamics serves as the distributor for Yamaha in Greece, Bulgaria, and Romania, as well as Porsche in Greece. The company also holds the SIXT rent-a-car (RaC) franchise in Greece and participates in the sale of used cars. Leveraging positive domestic macroeconomic conditions, growth in inbound Greek tourism, and a normalization in car and motorcycle registrations, Motodynamics continues to deliver strong volume growth, but with price/mix pressures partially offsetting this momentum, something we see continuing through to 2025e. Following healthy 9M’24 results (laid out below), we have recalibrated our numbers making trivial changes to FY24e, still eyeing revenue growth of 15.4% and a 2024e EBIT of c€19m (+8% yoy). We have trimmed our 2025-26e numbers modelling lower price/mix across the segments than before, thus ending up with c€2m lower operating profit numbers coalescing to 5% EBIT growth in 2025 followed by 11% in 2026e, as price/mix pressures ease. We anticipate EBIT margins to stabilize near 10% by 2026e, following a further contraction to 9.5% in 2025e. With the shares discounting a rather pessimistic setup already, we reiterate our Buy rating, lowering our PT to €3.80/share as our estimate downgrade is partly offset by the rolling forward of our valuation to 2025e and lower capex.

Healthy 9M’24, but with pressure on margins; fleet sales to propel numbers in Q4 – 9M’24 revenue increased 14.2% yoy, with run rates accelerating in Q3 to +17.5% from +12% in H1. Growth was fuelled by higher volumes for Yamaha and Porsche, which more than offset lower sales of used cars, which are set to shift to the final quarter. Operating leverage was rather limited though, with 9M’24 EBIT just €0.9m higher than the same period last year as the group was cycling tough comps given the higher selling prices in 2023. Net profit in the 9M period remained steady at €10.7m at group level (vs €10.6m in 9M’23) as the increase in operating profits was diluted by elevated interest expenses.

Strong RaC Fleet Investment; Healthy Balance Sheet; Lower Capex Ahead; FCF inflection – Despite the heavy fleet investment (c€61m since 2019), and an additional c€24m in 2024e according to our estimates, the group has managed to grow without overly gearing the balance sheet (net debt / EBITDA at c1.2x in 2024e, group net debt