As noted, the transformative acquisition of EFUEL is more important than the Q2 results and is the reason we raise EBIT by 9-23% for ’21e-‘23e. EFUEL is one of Sweden’s largest companies within electrical vehicle charging boxes, as it has a market share of c. 30%. EFUEL is expected to have sales of SEK 120m in ’21 with EBIT margins of at least 10%, and management expects the company to grow sales by 70-100% per annum in the coming years. However, we’ve taken a more cautious view, assuming 67% growth in ‘22e and 50% growth in ‘23e as our in-house analysis of EV chargers points to a c. 30% CAGR in ’20-‘25e. The transaction price is c. 15x EBIT, assuming a 10% margin, with 75% of the transaction paid with DistIT shares, leading to an EPS dilution of c. 12%. This leads to a -11% EPS revision in ‘21e, +1% in ‘22e and +11% in ‘23e.
9x ’22e EV/EBIT with an EBIT CAGR of 36% in ’20-’23e
The acquisition of EFUEL sets the tone for DistIT’s new M&A agenda and results in an EBIT CAGR of 36% in ’20-‘23e. Despite the fact that the share is up 168% over the past year, the valuation of 9x EV/EBIT in ‘22e continues to look reasonable. We estimate that DistIT will have 0.3x ‘22e lease adj. ND/EBITDA, translating into c. SEK 1.5bn in M&A firepower, able to support >200% EBIT growth until ‘25e, on top of organic growth.
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