Relais has managed its inventories well during past 12-months and based to our understanding, there are no major destocking risks in the market for Relais. However, cautiousness among customers likely continues with higher interest rates and possible demand volatility. Going forward, in addition to B2C lighting sales, equipment sales could see some headwinds from lower new commercial vehicle sales and tighter cost control among fleet operators. M&A likely remains on the agenda, while we do not expect any additional acquisitions during Q4 due to elevated leverage.
Overall, we believe Relais is well positioned against weaker economic conditions as it mainly focuses on 4-10 year old vehicles. In addition, we believe Relais could continue to gain more customers to its repair and maintenance businesses. Fleet operators are likely to favor lower price point independent repair and maintenance operators over OEM’s in order to manage their cost base. We have a fair value range of EUR 16.1-19.7 per Relais share.
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