Some more Q3 Updates – Energiekontor, Fuchs, Eurokai, Hermle & Laurent Perrier
Energiekontor
Energiekontor has been one of my worst performing stocks in 2024, the performance was much worse than the borader renewable peer group. To be honest, I am not sure why the stock performed so bad. On part of the explanation is clearly that the overall political shift to the righ (Trump, Germany etc.) might be bad for renewables, which explains the overall bad performance to some extent. It didn’t help either that they announced a 2024 profit warning some days ago.
However, they didn’t adjust the mid term guidance (2028) and it seems that the profit warning was clearly just a short term timing issue with a required approval of a purchaser for a large UK wind farm. So next year could look very nice especially for the developer segment.
Despite the political uncertainty, I still think that Energiekontor is one of the best bets in the sector. Here is a table I did some weeks ago showing that Energiekontor, among a European peer group, is both the cheapest and the least leveraged player:
Fuchs
A few days ago, I had the pleasure to actually attend the Fuchs capital markets day that was held at one of their clients factories (DMG Mori in Pfronten). The presentations can be found here.
My overall take way was very positive. A few highlights:
- the exposure to (European) ICE automobile production is very limited, Fuchs has a glbally well diversified portfolio of clients and applications
- the company culture seems to be very strong and etnrepreneurial with an extrem customer fucos (Fuchs Capital market days are always held at client’s sites)
- Many applications have high barriers of entry to to certification and regulation
- The potential successor of Stefan Fuchs made a very good impression
Although the stock is not super cheap, I think that especially the cheaper common shares offer a lot of value due to the high quality of the company.
Eurokai
Just 2 days ago, Eurokai in typical understated Hanseatic fashion released a Positive profit warning. It seems that they have been forced to write up the value of the Wilhelmshaven terminal which they seem to have written down to zero in 2020. Although this is oncly an accounting effect, it clearly shows that things are improving. I am very much looking forward to 2025, when the new shipping aliance between Maersk and Hapag will direct significant traffic to the Eurokai terminals.
Hermle
There was an interesting (German language) interview with the CEO in a specialist tool publication. A few weeks ago, Hermle also issued a trading update. Despite (much) better numbers than the competition, investors might got spooked by the fact that Hermle countercyclically invests more into R&D and hiring more people which will clearly lower the result. Personally, I really like that countercyclical approach a lot. We will see how this turns out but Hermle is clearly a great company however in a very tough environment.
Laurent Perrier
Already some days ago, Jon Neuscheler published a fantastic (German language) write-up on LAurent Perrier. A few days ago, LP issued a trading update, which at a first gance didn’t look so good but is clearly in line with the industry. Since then the stock recoevered a little. Overall clearly a more difficult time but in my opinion still a stock to hold for the longer term.
value and opportunity 
Hallo MMI, thanks a lot for your work! Until now I’ve been just reading silently your blog posts.
At the Moment I’m doing a little deep dive especially into Hermle and some in EKT. It’s more kind of step by step, so at the moment I’m touching the surface.
Some questions/thoughts I have at the moment.
Hermle: In your pdf write up about Hermle you’ve assumed that service sales have to be a significant part of revenue. After reading “Konzernabschluss 2023, S.81 (17) Umsatzerlöse” I assume about 5 percent (without spare parts). Maybe depending if one include spare parts or not, its more significant. Maybe the bigger the better, but service is rather an instrument for retention than a profitcenter for them – like you have written.
About the gross margin comparison with DMG Mori, I think its closer and you cannot compare the 25% of DMG with the 60% of Hermle from tikr. DMG has like 20 to 25 % and Hermle about 30 to 33%, but not about 50 to 60% (l doubt the tikr numbers here or it depends of including staff cost in cogs or not or other things I miss here). I simple calculate Revenue (532) minus Material- and Personalaufwand (217+143) to get 2023 Gross Profit. Maybe too simple, but by no means I get close to COGS of “only” about 212mio, which would imply a 60% gross margin and only including cost of material. The 20/25% of dmg mori are also with staff cost included, I guess. At morningstar.com they are not included and dmg also has about 60% gross margin there. But at operating margin Hermle stands out, 21 vs 10% from dmg.
What the big question for me is, wheather 3D printing is a substitution/disruption or more kind of enhancing TAM for Hermle – like you mention MPA als additive Fertigung. Have to read more here to understand this.
Energiekontor: Disclaimer, I’m also (painfully) invested here. Which numbers you use for your EV/EBIT calculation? From 2023? For LTM I wasn’t able to find Q4/23. I approx. the 2024 numbers (from 9M24 presentation: H1.24 balance sheet, my EbitForecast of 40 Mio after their profit warning from early dec24) and have an EV/Ebit ratio of about 25. Not that cheap anymore but to be fair I haven’t recalculated the other ratios of the peers.
Keep on writing (very wertvoll :-), Greetings, Ralf
You secrets sauce spread all over !