D’Ieteren (DIE BR) reported a strong set of 1H26 results yesterday evening after the Brussels close, and alongside them announced a CEO transition and most interestingly, an official announcement that Belron's minority shareholders are evaluating strategic options for their stakes, including a potential IPO.
These announcements confirm the strength of the overall business (ex Auto) and make some form of Belron transaction in the near future materially more likely. That reduces my bear case probability, and there is huge potential upside should Belron IPO at a price that reflects its value. Overall, these developments improve the risk-return set-up for D’Ieteren stock in my view.
Summary
(1) Strong Results: Group adj. PBT was up 8.4% driven by Belron, PHE and TVH all performing well. On the other hand, D’Ieteren Automotive is really struggling with PBT down two-thirds. The outlook was confirmed for the year (LSD to MSD Group Adj. PBT growth) with the other segments partially offsetting automotive weakness.
(2) CEO Transition: The Board announced a CEO transition, with Francis Deprez leaving in December after seven years and Eric Machiels arriving from OMERS. I have little to add on this for now, other than to note that Deprez declined to comment on the circumstances of his departure when asked directly on the call. Machiels has been active in private equity and private equity owned businesses, including taking Infinis Energy to the London market and running it as a listed company. Given capital allocation will be a key part of his job, the board obviously decided he is well placed to lead D’Ieteren going forward. My own guess is that a new CEO with that background arrives with a mandate to make some changes, and I would not be surprised to see both Auto and Moleskine disposed of in time as the focus narrows onto Belron and expanding further in the B2B distribution businesses.
(3) Belron IPO Potential Confirmed: Confirmation of this should be positive for the stock and it is a key part of my thesis to drive both crystallisation of the NAV……
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