D'Ieteren - A valuation gap waiting to be filled - DIE BB
D’Ieteren investors got a double treat this month, with the long-awaited investment in TVH parts (€ 1.2bn) and, more importantly, a change in shareholdership at Belron, valuing the company at a whopping EV of € 21bn, far above our estimate of € 12.0bn. After diving deeper into the TVH stake, we conclude that the group is a good fit for DIE’s portfolio with plenty of value remaining to be unlocked. Although the transaction multiple for Belron (36x FY20 EV/REBIT) looks excessive, we believe the new shareholder base can bolster growth going forward. We see the reaction of the DIE share price to the news as modest, leaving a large valuation gap waiting to be filled. As we expect this gap to decrease once Belron volumes normalise, we maintain our Buy and € 190 TP.
D'Ieteren is engaged in two sectors of services to the motorist: Automobile Distribution, which is a distributor of Volkswagen, Audi, Seat, Skoda, Bentley, Lamborghini, Bugatti, Porsche, and Yamaha brands in Belgium; and Vehicle Glass, which is engaged in the repair and replacement of vehicle glass mainly in Europe, North and South America, Australia and New Zealand through Belron s.a. and notably its CARGLASS®, AUTOGLASS® and SAFELITE® AUTO GLASS brands.
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