D'Ieteren Group Don't think the race is over, the second lap is yet to begin
After a fantastic rally in 2021, D'Ieteren's share price has come to a standstill, with the stock even down 10% ytd. We believe this is highly unjustified as the group continues to overdeliver, making it well on track to surpass its 2025 targets outlined during the 2022 CMD. Because we have the feeling that D'Ieteren is often misunderstood, we have taken the opportunity to do a deep dive into the financials of the different divisions. With an expected annual sales & adj. EBIT CAGR (gs) of respectively 10% and 15% by 2025, we believe today's adjusted P/E ratio of 12.5x for the group makes no sense. Moreover, D'Ieteren will likely see strong dividend inflows from Belron in the upcoming years, hereby boosting the net cash position from € 632m in 2022 to € 1.7bn by 2025. This is after already including a dividend increase from € 3.0 ps in 2022 to € 7.9ps by 2025. As such, the group will gradually build up a war chest to pursue new investment opportunities while still having room to announce a new SBB program. After applying a 10% discount to our SOTP valuation of € 250ps, we reiterate our Buy rating and increase our TP from € 205 to € 225 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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