RHM is scheduled to report Q4 earnings on 11 March 2026. Today''s group call served to reflect on the statements made since the Q3 release (6 Nov.) and the CMD (18 Nov). While the recent update to ''25 guidance was reiterated, indications for FY26 imply OSG of only ~20-25% (CMD indication: 25%) and op. profit of c. EUR2.4-2.8bn vs. cons (excl. PS) at EUR2.92bn. While we see moderate earnings downgrades at cons., FCF ''25/26 is likely to exceed cons. given strong order dynamics.
''25 adj. EBITA likely to meet cons., commentary on FCF points to u/s risk to cons. in 25/26e
The updated FY25 guidance (OSG: 30-35%, op. profit margin: 18.5-19.0%) - announced on 17 Dec., alongside the decision to sell Power Systems (PS) - implies adj. EBITA of EUR1.86-1.98bn vs. cons. (excl. PS) at EUR1.94bn. The c. EUR70bn backlog at YE25 (excl. PS) points to orders of c. EUR40bn for strong FCF of c. EUR2bn (cons.: EUR0.9bn). With ''26 orders seen at c.EUR80bn (o/w EUR67bn from Germany) and prepayments at c.20-30% continuing, cons.'' FCF ''26 of EUR0.7bn looks prudent.
FY26 indications imply ~20-25% OSG for adj. EBITA of EUR2.4-2.8bn vs. Street at EUR2.9bn
RHM aims at ''26 gross sales of c. EUR15-16bn (excl. PS) including EUR1.3-1.5bn revenues via NVL (consolidated for 10 months). This implies net sales of EUR13-14bn when assuming consolidation at 12% and equating to OSG of c. 20-25%; at the CMD, mgmt. was confident to reach OSG of 25%, also in FY26. By segments, WA and VS might hit c. EUR 5bn/6bn vs. cons. at EUR5.3bn/6.5bn. The op. margin is seen at c. 18-20% (net after consolidation) implying adj. EBITA of c. EUR2.4-2.8bn vs. BBG cons (excl. PS) at EUR2.92bn. At the same time, we note that cons. is only modelling FCF of EUR0.7bn, while the prepayments on new orders might add EUR4bn to FCF alone this year.
Model update prompts our new EUR2,300 TP (from EUR2,350); structural appeal unchanged
We have reflected the deconsolidation of PS incl. the guided EUR350m impairment...
