D'IETEREN : A bullish buy for a blossoming Belron
In this note, we take a deep dive into the value growth drivers at Belron, looking at the positive price mix, the rising number of ADAS calibrations and the popularity of VAPS. We believe these three elements could boost sales by €1.4bn and double REBIT to € 847m (FY19: € 400.5m) by 2025. Based on our DCF-model, we estimate D’Ieteren’s 54.8% stake in Belron at €63.9ps., more than DIE’s total mkt cap. When also accounting for an impacted but resilient Auto division (€15.3ps.) and the €1.4bn war chest (€26.5ps.), we estimate D’Ieteren’s NAV at €107.2 ps. After applying a 20% holding discount, we reiterate our Buy rating but raise our TP from € 61.0 to € 86.0 ps.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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