HANSEYACHTS : Strong orders and revenues even as costs bite, FY22 outlook slashed

Hanseyachts Q3 results were a mixed bag. Similar to previous quarters, revenues and orders registered significant growth yoy. However, EBITDA was hampered by higher costs arising from the ongoing price inflation and supply-chain hurdles. Personnel hiring and costs were also an area of concern. These issues hindered the delivery of yachts to customers. Consequently, the company revised downwards its EBITDA guidance. On the positive side, the demand has not abated and the company has been able to raise prices.

• Order intake increased by 44% to €44.6m
• Revenues of €31.1m, up 36% yoy
• EBITDA of €-3.4m vs. €-0.3m the year before

• Order backlog of €330.6m, up 102% yoy
• Revenues of €92.8m, up 31% yoy
• EBITDA of €-6.5m vs. €-4.8m the year before

• EBITDA in negative high-single digits vs. improvement over FY21 EBITDA

Building on the trends we have seen since the pandemic, Hanseyachts’ order intake continued to increase for another quarter. The company’s order backlog more than doubled as customers continued to prioritise a safe haven to get away from their day-to-day travails. With such a high backlog, the company has enhanced revenue visibility over the medium-term. Moreover, in the global market, over the last two years, c. 4,500 fewer yachts have been ordered than average, arguing for a continued inflow of orders going forward.

Revenues in the first nine months recorded good growth despite delayed deliveries. The company has also successfully implemented price increases since last year and by now these increases have aggregated to 31% over their level of the start of FY22. Regarding costs, purchased goods and services came in at €64.8m, and 57.2% of total operating performance, an increase of 3.3pp. Personnel expenses increased by €7.9m in absolute terms but fell by 3.6pp with respect to the total operating performance. Other operating expenses were significantly higher at €19m, an increase of 38% yoy. These other expenses were mostly comprised of higher energy and freight costs, as well as slightly higher marketing costs. Hence, EBITDA was more negative than expected.

On the balance sheet, the company has built-up inventories to secure raw materials for its future deliveries. While this has tied up some cash, the company still has c.€6.0m of cash and available overdraft facilities of €5.4m.

For future growth, Hanseyachts is offering its customers options to upscale their yachts. Additionally, it will also focus on driving more B2C business and making its offering and operations more digital.

As a result of the current cost inflation and supply-chain problems the company is facing delivery delays in certain areas. This has also led to an increase in inventories of unfinished yachts. The company does not expect these problems to ease until July to September 2022, i.e. Q1 FY23. Thus, Hanseyachts now expects a negative EBITDA despite higher revenue than in FY21.

We will update our forecasts to take into account the latest guidance but expect to retain our buy recommendation.