Stern Groep

AS: STRN

€70.2m market cap

€11.85 last close

Stern Groep is one of the largest automotive groups in the Netherlands. With 75 locations and revenues of almost €1bn it is the second largest car retailer group in the Netherlands. The company has over 1,850 employees.

Investment summary

Downturns tend to be opportunities to invest in car dealerships, especially those that are likely to emerge stronger. Stern is well positioned to weather the current storm with its significantly restructured organisation. Its valuation is undemanding at an FY21e P/E of 9.4x and there is additional optionality in light of a potential merger with the much larger Swedish automotive group Hedin, though this is not likely to materialise in 2020.

Y/E Dec
Revenue (€m)
EBITDA (€m)
PBT (€m)
EPS (c)
P/E (x)
P/CF (x)
2018A 988.7 6.1 (5.8) (73.0) N/A N/A
2019A 989.3 47.4 (1.4) 29.0 40.9 N/A
2020E 815.5 11.7 0.6 100.0 11.9 N/A
2021E 922.8 17.8 7.8 123.0 9.6 N/A
Industry outlook

While Stern has to deal with market-wide structural changes such as the transition from combustion engines to hybrid/EVs, a higher proportion of less profitable lease clients and shared car concepts, all of which are having a profound impact on the market, COVID-19 has presented another big challenge to car dealerships. Flexibility is what is required in this environment, and fortunately Stern has already started optimising its dealer network by reducing geographical overlap and moving out of unattractive car brands, while eyeing new network additions like the recently announced ambition to expand in Renault and executing stringent cost controls.

Last updated on 02/12/2020
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Sector
Industrials
Share price graph
Balance sheet
Forecast net debt (€m) 120
Forecast gearing ratio (%) 87
Price performance
%
1m
3m
12m
Actual (2.5) 1.3 (2.5)
Relative* (13.2) (8.5) (6.3)
52-week high/low €17.9/€7.9
*% relative to local index
Key management
Henk van der Kwast CEO
Finus Porsius CFO