Gaussin

We have trimmed our EPS estimates after the group withdrew its sales guidance. With sales now expected to be lower than €100, we believe that there is a threat to licensing revenues, which directly add to profits. Additionally, vehicle sales could also be impacted, which would lead to under-absorption of costs and further reduce profits. Lastly, we take into account the potential dilution from existing shares by the issue of 25m additional shares from the loans given to the company by CSG which will increase the share count from 37m to 62m shares.

For the NAV calculation, we have cut our multiples for the licensing and the Service business. Moreover, we have also cut our anticipated sales figures used to derive the valuation of the Vehicles and Licensing businesses. Finally, our NAV also takes on board the impact of the potential dilution looming over the company.

Our DCF valuation is impacted by the increased share count as well as the reduction in our short-term forecasts for the group. We now expect profitability to be lower in 2024 and 2025, and believe that the group will need to revamp its strategy to become profitable on a sustainable basis.