On the one hand, the battery company VARTA achieves "dreamlike" margins, on the other hand, a clouded outlook seems to be doing the rounds. From another optics the battery quality is very high, but in the E-car area high investments are necessary. An up and down of feelings or assessments, although all "moralizers" are screaming for e-cars and many other electronics with battery needs. To the facts: EBITDA 2021 improved markedly by more than +17% to EUR 283 million. Sales rose by almost 4% to EUR 903 million, resulting in a bottom line margin of an excellent 31.3%, even above forecast. VARTA thus clearly outperforms its Asian competitors. So far, so good. But will the company's entry into the e-car business, which entails high investments, be successful? VARTA CEO Herbert Schein is very optimistic: "I am convinced that the market entry into the very competitive segment will succeed!" He repeatedly raves about the newly developed V4Drive cells, which are smaller and much more efficient than those of the competition; this is also backed up by a charging time that has been cut in half. With an equity ratio of around 50%, battery specialist VARTA is in any case well equipped for the future.
But it is no secret that VARTA is also suffering from high raw material prices and the limited availability of components. This has prompted management to set the EBITDA forecast for 2022 at "only" EUR 260 million to EUR 280 million. Needless to say, this is not really conducive for the share. After all, the company has secured a loan of EUR 250 million at very favorable conditions for the expansion of lithium-ion production. One should not forget the market leadership in the hearing aid segment and other micro-battery areas; the tech giants Apple and Samsung are also among the customers. Should the share fall below EUR 75, we will probably add to our buy. We reduce the price target slightly to EUR 140!
