Waberer's - Tiny EBIT gain cements our bullish view

• Waberer's posted a net income of EUR 1.7mn at Group level for Q1/22 vs. EUR 2.7mn a year ago due to a non-realized FX loss. However, EBIT came in at EUR 4.6mn in Q1 compared to EUR 4.5mn in the same period of last year, which translated into a tiny 1% gain. As was expected, all 3 segments reached same level of EBIT due to the seasonal effects, but EBIT margin shrunk by 30bps YoY to 2.9% on cost inflation. The management remained confident that they could perform well over the next quarters as price hikes will offset the increasing costs.
• Key positives: (1) Very stable results in absolute terms. (2) Thanks to the more efficient fleet utilization, net leverage ratio stood at 1.7x ND / LTM EBITDA. (3) The Management is very confident that 2022 guidance is manageable despite steep cost inflation and disruption in international supply chains. (4) Price correction mechanism due to the fuel price change has been shortened from time delay of 1–3-month to a few weeks. (5) Fleet renewal resumed, 270 new vehicles arrived, but an additional 1,242 have been ordered with a total value of EUR 82.5mn which will be fully leased.
• Key negatives/risks: (1) Margins deteriorated. (2) Although the RU-UKR war hasn’t materially affected the Group, supply chain issues could deepen in the next months. (3) Inflation may bite into customer’s wallet and discretionary spending may decelerate, which could ultimately lead to a drop in orders.