Auto Partner is a pure organic wholesale distributor of automotive spare parts with Polish market leadership and export sales ~51% of revenue (new Croatian and Slovak subsidiaries). The P&L is clean — no goodwill, no acquired intangibles, no restructuring — so reported operating profit already equals mttssn adjusted EBIT, and the business earns on inventory and receivables turns rather than leased property.

The economics are genuinely value-creating: adjusted ROIC of 15.2% against an 8% WACC drives positive economic profit of +118.6M on a 1,654M capital base. Q1 2026 is a decisive inflection — revenue +9.0% YoY and operating profit +56% YoY (EBIT margin 7.5% vs 5.3% a year earlier) as the new automated Zgorzelec distribution centre converts last year's cost drag into warehousing efficiency and growth capacity.

Capital allocation supports the compounding case: NCI is zero, bank borrowings were cut to 176.4M from 305.4M via 128.9M of repayments, and the modest 0.15/share dividend keeps the bulk of cash reinvested in the branch and logistics network — reinvestor archetype, not a cash cow.

Capitalising adjusted NOPAT of 250.9M at WACC−g and bridging through 450M net debt over 129.4M shares: fair value ~20.8 (0% growth), ~28.9 (2%) and ~35.3 (3%). Today's EV of 3,872M implies only ~1.5% perpetual growth on adjusted NOPAT — a conservative embedded assumption against +9% Q1 revenue growth and a recovering margin, so the model rewards the above-WACC return spread rather than penalising it.

Base 28.0 (24m, +6%) at ~2% growth as Zgorzelec-driven margin gains hold — the capitalisation gives ~28.9 at that growth and the ~1.5% embedded in today's EV is conservative against +9% Q1 revenue momentum; bull 34.0 if the export mix and DC leverage push EBIT margin sustainably above 7% (approaching the 3%-growth ~35.3 case); bear 22.0 if aftermarket demand softens, EUR/PLN reverses and warehousing costs outrun volume, pulling toward the zero-growth ~20.8 floor.

At today’s enterprise value the constant-ROIC reverse-DCF maxes out: even at its sustainable-growth ceiling (~-50.0%, limited by ROIC 15% ≈ WACC 8%) it cannot reach the current EV. No-growth value is PLN 28,287/share (106944% of price); the market prices in growth and/or a higher ROIC than booked — richly valued on this lens. Read the sensitivity grid.

Sensitivity — fair value / share at WACC × growth

Green = fair value above the current price of PLN 26.45. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.

⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.

1. Above-WACC returns

Adjusted ROIC 15.2% vs 8% WACC with EP +118.6M — real value creation on a lean capital base.

2. Q1 2026 margin inflection

Operating profit +56% YoY, EBIT margin 7.5% vs 5.3% as Zgorzelec DC efficiency arrives.

3. Export & scale density

~51% export revenue with new Croatia/Slovakia subsidiaries; density economics in a distribution model.

4. Deleveraging balance sheet

Bank debt cut to 176.4M from 305.4M via 128.9M repayments — lower risk, more reinvestment room.

5. Reverse-DCF discount

Embedded ~1.5% perpetual growth vs +9% revenue momentum — a modest but genuine margin of safety.

• Thin distributor margins6.9% LTM EBIT margin leaves little buffer; warehousing cost growth can compress returns quickly.
• FX dependenceReported FCF proxy is zero and PLN margins lean on a favourable EUR/PLN — a reversal pressures export profitability.
• Cyclical aftermarket demandParts volumes track vehicle-park usage and consumer spending; a slowdown hits turns and pricing.
• Contestable moatDistribution barriers are moderate; scale advantage is wide but not deep against regional competitors.
• Zgorzelec executionDC ramp must keep converting cost into volume; under-utilisation would re-open the FY2025 margin drag.

Auto Partner is a profitable, cleanly-reported Polish parts distributor creating economic value — ROIC 15.2% over an 8% WACC, EP +118.6M — that has just delivered a clear margin inflection in Q1 2026 while deleveraging. Fair value at ~2% growth (~28.9) sits above the 26.45 price, and today's ~1.5% embedded growth is conservative given the momentum, giving a modest cushion. BUY, medium conviction; base target 28.0 (+6%).

The principal watch-items are FCF conversion (reported proxy at zero) and margin durability once the Zgorzelec ramp normalises; sustained free-cash generation and a held 7%+ EBIT margin would support a conviction upgrade.

Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open  ·  Latest interim: 📄 open