Original-Research: lodgyslife AG (von Parmantier & Cie. GmbH): Buy

Classification of Parmantier & Cie. GmbH to lodgyslife AG

Company Name:	lodgyslife AG
ISIN:	DE000A2LQ710
Reason for the research:	Start of Coverage
Recommendation:	Buy
from:	02.10.2024
Target price:	€ 28.60
Target price on sight of:	12 Month
Last rating change:	Initiation
Analyst:	Benedikt Krämer

Size matters - lodgyslife acts as a value-added consolidator in the fragmented growth market of camping

lodgyslife AG is pursuing an aggressive roll-up strategy in the growing but highly fragmented camping market in the DACH region. The company has an institutional financing line of € 50 million to realise its rapid inorganic growth. This creates value for the investor in two ways: 1) The target campsites (including family-run campsites) have untapped potential in terms of marketing, digitalisation and process efficiency. 2) For non-professionalised individual campsites, EBITDA multiples of only 5-7x can be paid on the market, while PE investors in other European countries have shown a willingness to pay EV/EBITDA multiples of between 11x and 13x for large portfolios. A sale would therefore be an interesting exit option in the medium to long term, which is not only fuelled by pure consolidation. Although achieving a critical size through inorganic growth is necessary to become interesting for PE investors, the operational improvements (efficiency, digitalisation) increase EBITDA and thus act as 'leverage'.
The German-speaking camping market offers attractive growth (approx. 5% p.a. volume) and - due to the fragmented market structure (many family businesses) and pressure to modernise and professionalise - also attractive prices for consolidators. For lodgyslife, it is important to utilise this environment and acquire attractive locations or take them over as tenants before other buyers come onto the scene.
Lodgyslife has proven that it can realise hidden (margin) potential at the acquired campsites. At Campingplatz Jungfrau (CH), which was acquired in 2020, the EBITDA margin was increased from 9% (2019) to 25% (2023) by optimising the offering, marketing, operational processes and selective investments. Co-founder/CEO René Müller has already been successful three times with roll-up business models.
Company outlook: Lodgyslife plans to make 5 to 10 acquisitions per year in the medium term in order to capitalise on the opportunities that arise in the market.

For more information see the full report.



LEGAL NOTICE This research report ('Investment Recommendation') was prepared by Parmantier & Cie. Research, with contributions from Mr. Parmantier and Mr. Krämer, and is distributed solely by Parmantier & Cie. Research. It is intended only for the recipient and may not be shared with other entities, even if they are part of the same corporate group, without prior written consent. The report contains selected information and makes no claim to completeness. The investment recommendation is based on publicly available information ('Information'), which is considered correct and complete. However, Parmantier & Cie. Research does not verify or guarantee the accuracy or completeness of this information. Any potential errors or omissions do not create liability for Parmantier & Cie. Research, which assumes no liability for direct, indirect, or consequential damages. In particular, Parmantier & Cie. Research accepts no responsibility for the accuracy of statements, forecasts, or other content in this investment recommendation concerning the analyzed companies, their subsidiaries, strategies, economic conditions, market and competitive positions, regulatory frameworks, and similar factors. While care has been taken in preparing this report, errors or omissions cannot be excluded. Parmantier & Cie. Research, including its partners and employees, accepts no liability for the accuracy or completeness of statements, estimates, or conclusions derived from the provided information in this investment recommendation. To the extent this investment recommendation is provided as part of an existing contractual relationship (e.g., financial advisory services), Parmantier & Cie. Research's liability is limited to cases of gross negligence or intentional misconduct. In cases of breach of essential obligations, liability is limited to simple negligence but is restricted to foreseeable and typical damages in all cases. This investment recommendation does not constitute an offer or solicitation to buy or sell securities. Partners, managing directors, or employees of Parmantier & Cie. Research or its subsidiaries may hold responsible positions, such as supervisory board mandates, in the companies mentioned in this report. The opinions expressed in this investment recommendation may change without notice and reflect the personal view of the research analyst. Unless otherwise stated, no part of the research analyst's compensation is directly or indirectly related to the recommendations or opinions contained in this report. All rights reserved.

 

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Melba Victoria Grün
gruen@parmantiercie.com