Improved likelihood of achieving guided y-o-y growth for EFUEL
The agreement in the context of growth guidance
DistIT states in the press release that this agreement will help EFUEL reach a broader mass of users through the Easee brand. Based on EFUEL's historical execution and commensurate growth, we believe that this agreement increases EFUEL's likelihood of achieving a y-o-y growth in the upper range of the guided 70-120% (vs ABGSCe 61%). From a purely mechanical point of view, a 120% y-o-y growth rate for EFUEL would, all else equal, imply that the '23e sales estimate for the group could increase by 6% based on our unrevised '22e sales estimate.
Potential impact on operations and financials
We believe that this news is positive from an operating standpoint and that the potential to achieve high growth through Mekonomen's 600 stores and 4,300 workshops is likely improved. While EFUEL only constitutes ~11% of DistIT's '22e group sales, we gain increased confidence in the segment's prospects when agreements with iconic brand names such as Mekonomen are signed. Finally, depending on when the agreement is effective, the payment of the earn-out consideration for EFUEL could be slightly expedited due to the increased likelihood for higher growth.
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