123f released preliminary 9M figures that continue the earnings momentum seen in H1. Despite the ongoing demand vacuum ahead of the driving school reform, the group has generated a positive EBITDA in every single month of FY26 so far. In detail:
Q3 marks a clear earnings step-up. Reported group EBITDA improved to € 0.49m in Q3 (Q3'25: € -0.19m), lifting 9M EBITDA by 68% yoy to € 1.33m (9M'25: € 0.79m). The 9M EBITDA margin thus expanded to 6.8%, up 2.7pp yoy. Sales grew 4.7% yoy to € 6.7m in Q3, and 2.1% to € 19.7m for 9M. Growth in the core business was partly offset by the investment restraint at Foerst. In a market where many peers are reporting declining volumes, this still stands out positively, in our view.
Cost measures start to pay off. The earnings swing is largely driven by the efficiency measures taken over the past months. Headcount was reduced from 273 to 249 in H1, mainly in customer service, and roughly half of the lease contracts have been terminated as theory lessons are set to move to e-learning with the upcoming reform. With personnel costs still flat yoy in H1, the savings only started to show from Q3 onwards. Accordingly, segment EBITDA of the core driving school business rose 120% yoy to € 1.04m in 9M (9M'25: € 0.47m). The group-wide rollout of the digital planning tool EasyPlan also contributed, as it has lifted instructor utilisation and streamlined branch operations.
FahrerWerk turns the corner. The instructor training subsidiary still weighed on group earnings as planned, with 9M EBITDA of c. € -0.27m. However, the demand pick-up announced in July is now materialising. In September, EBITDA was c. 79% above the prior-year month, while total costs were cut by 12%. Registrations for Q4 course starts are up 119% vs Q1, and FahrerWerk is receiving bookings more than three months in advance for the first time. Management therefore expects a break-even to positive EBITDA in Q4 and sees a clearly positive EBITDA in FY27.
Foerst: demand is there, orders await the reform. The simulator subsidiary grew 9M sales by 6.5% and remained slightly EBITDA-positive. Demand picked up over the summer but softened again after the change at the top of the Federal Transport Ministry at the end of July, as driving schools hold back investments until the reform is finally passed. That said, current inquiries would more than fill Foerst's entire production capacity for 2027, which makes Foerst a clear catch-up candidate for FY27e.
FY26 guidance confirmed. Management reiterated its FY26 EBITDA guidance of € 1.5-2.5m and expects a positive Q4 EBITDA at all three entities. Action. We still sligthly lower our FY estimate given our higher 9m forecast. At the same time, we trim our FY26e sales to, as the implied Q4 ramp is no longer realistic given the deferred simulator orders.
Overall, the print shows that 123f's operational clean-up is translating into earnings, while the reform timing remains the key swing factor for the top line. We look forward to the FY figures, including cash flow, for further confirmation. Reiterate BUY, PT € 6.10 based on DCF.
ISIN: DE000A2P4HL9
