TB2 boxes out the bears; chg. est & PT

The TB2 effectively substantiialy increases the adressable market to 1-9 year olds (prev. 3-7 year olds) by adding the interactive play format “Tonieplay”, especially relevant for the age group 5-9 and also introduced “My First Tonies”, a line of figurines designed for children aged one or older. Besides that, notable hardware upgrades, further content partnerships and likely higher user numbers, should lay the foundation for a strong demand, which is visible already.

Unmatched competitive position. Being the first mover and effectively the inventor of a completely new toy category has turned tonies into the category leader of screen-free entertainment for kids with the largest customer base worldwide. tonies unique ecosystem creates strong lock-in effects, where kids want to expand their beloved figurines collection that leads to higher engagement rates. On the partner side, tonies is the go-to content platform for global licensors (e.g. Disney, PawPatrol, Hasbro, Pokémon), given its large worldwide installed base and broad reach.

Next to growth from product innovations, tonies has ample growth from internationalization and market roll-outs ahead. Especially in the US (currently c. 10% market penetration, far below DACH levels of c. 50%), tonies should be able to more than double sales to € 473m by FY’28e (eNuW). This should be driven by rising demand from retailers and expanding visibility at their stores as well as strong customer awareness due to an exceptionally high NPS of 77. Next to the US and DACH, tonies’ data-driven approach allows it to make expansion decisions based on already known customer insights. Therefore, we expect similarly or even stronger growth profile in the segment ROW, where segment sales are expected to grow at a 41% CAGR to reach € 308m in FY’28e (eNuW).

DACH serves as a blue-print (23.1% EBITDA margin in FY’24) for profitability. North America (2.5% EBITDA margin in FY’24) and ROW (2.6% EBITDA margin in FY’24) should converge to DACH’s margin profile in the long-run, however only after the cost intensive expansion is less pronounced and sufficient scale is reached.

With rising group margins, improving WC dynamics and a capital-light set up, tonies transitions ever more into a cash generative company. Hence, we expect FCFs to expand from mostly negative territory in the past to € 61m by FY’28e. Going forward, the upcoming CMD in Q2’26 (no date announced yet) should deliver further insights into its mid-term growth outlook and management’s planned use of future FCFs.

Against this backdrop, we reiterate our BUY rating and increase our DCF-based PT to € 13.00 (old: € 11.00) as the TB2 launch provides more confidence on tonies overall growth and margin trajectory.

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