D'Ieteren Group First reaction: impressive results and increased outlook (but with a twist)

D'Ieteren reported a very strong set of 1H23 results, with the adj. PBT (gs) increasing 46.6% and 25.6% on a comparable base to € 548.9m. This is 17.5% and 15.5% above kbcs and css estimates of respectively € 467.3m and € 475.3m. Note however that € 31.1m of the adj. PBT (gs) was driven by the reclassification of share-based payments and other LT incentive plans under adjusting items. Nevertheless, when excluding this effect, the adj. PBT (gs) still came in around 10% above our expectations. The strong result was especially driven by Belron, which reported a record margin of 21.9%. The same was true at PHE & D'Ieteren Auto. As a result, D'Ieteren increased its outlook and now banks on an adj. PBT (gs) of at least € 960m, compared to around € 900m previously. Note that also here, the outlook includes roughly € 50m in reclassification towards adjusted items. Adjusting for this effect, this implies an underlying outlook increase of c. € 10m to at least € 910m (kbcse: € 906m). However, given the very strong results in 1H23 and traditional conservative guidance, we believe D'Ieteren will more than likely exceed this new target. We reiterate our Buy rating and € 225 TP.