Executive Summary

Auto Partner SA is a prominent and dynamically expanding importer and distributor of automotive spare parts, with a strong foothold in Poland and a rapidly growing presence across Central and Eastern Europe (CEE). The company has demonstrated a remarkable track record of robust, double-digit revenue growth, successfully transforming its business model to achieve an equal split between domestic and international sales. This expansion has been underpinned by a disciplined strategy of organic growth, centered on significant investments in a sophisticated, high-frequency logistics network that forms the core of its competitive advantage.

The central tension in the current investment profile is the recent divergence between this impressive top-line momentum and compressing profitability margins. While revenues grew by 12.6% in 2024, EBITDA and net profit declined, squeezed by a combination of external cost pressures, including significant wage inflation in Poland, and a deflationary pricing environment for automotive parts. This dynamic highlights the intensely competitive nature of the aftermarket and places a premium on operational efficiency and cost control.

The company operates as a strong second- or third-largest player in the Polish market, which is dominated by its larger peer, Inter Cars SA. Auto Partner’s strategy focuses on leveraging its scale, extensive product portfolio of over 250,000 SKUs, and the development of its higher-margin private label brand, MaXgear, to capture share from a fragmented base of smaller competitors.

Financially, Auto Partner maintains a robust and conservatively managed balance sheet, with a low net debt-to-EBITDA ratio that provides significant financial flexibility to continue its strategic investments. Cash flow generation has been constrained by the capital-intensive nature of its growth, requiring substantial investment in both working capital and new logistics infrastructure, most notably a new, highly automated distribution center in Zgorzelec scheduled for completion in late 2025 or early 2026.

The bullish thesis rests on favorable long-term industry tailwinds, including the aging vehicle parc in Poland and the EU, continued momentum in high-growth export markets, and the potential for market share gains. Conversely, the primary bearish risks include sustained margin compression, adverse currency fluctuations (particularly a strengthening Polish Złoty), a potential macroeconomic slowdown impacting consumer spending, and the long-term, secular threat posed by the automotive industry’s transition to electric vehicles.

Key Metric (Consolidated)	2022	2023	2024
Total Revenue (PLN M)	2,834.7	3,653.4	4,112.5
Revenue Growth (YoY)	25.3%	28.9%	12.6%
Gross Profit (PLN M)	847.0	989.9	1,127.2
Gross Margin (%)	29.9%	27.1%	27.4%
EBITDA (PLN M)	314.2	346.2	343.6
EBITDA Margin (%)	11.1%	9.5%	8.4%
Net Profit (PLN M)	207.3	223.6	208.0
Net Profit Margin (%)	7.3%	6.1%	5.1%
Total Assets (PLN M)	1,570.3	1,793.9	2,025.9
Total Equity (PLN M)	842.8	1,046.2	1,234.3
Net Debt / EBITDA	1.4x	1.2x	1.3x

Source: Company Financial Reports, Analyst Calculations.¹

Company Overview & Business Model

Core Business Activities & Value Chain Position

Auto Partner SA functions as an importer and distributor of spare parts for a wide range of vehicles, including passenger cars, light commercial vehicles, and motorcycles.⁸ The company’s operational model is explicitly defined as a “sales and logistics platform” designed for just-in-time (JIT) delivery of parts to a geographically dispersed customer base.⁸ This positions Auto Partner as a crucial intermediary within the Independent Automotive Aftermarket (IAM) ecosystem. It bridges the gap between a large, global base of over 350 parts manufacturers and a highly fragmented network of end customers, who are primarily professional repair shops and specialized automotive retailers.⁵ The company’s value proposition is centered on providing comprehensive product availability, competitive pricing, and, most critically, high-frequency, rapid delivery, which allows its customers to minimize their own inventory and respond quickly to repair demands.

Geographic Footprint & Expansion Strategy

Auto Partner has successfully executed a significant geographic diversification strategy. Initially focused on Poland, the company now operates in over 30 foreign markets.⁵ This strategic pivot is evident in the company’s revenue composition. In 2022, export sales reached parity with domestic sales for the first time, accounting for 50% of total revenue, a level that was sustained through 2023 and 2024.² This 50/50 split marks a fundamental shift in the company’s business profile, making its growth prospects equally dependent on its performance in diverse European markets as on its home turf. This diversification mitigates reliance on a single economy but concurrently increases exposure to currency fluctuations and more complex logistical challenges.

To support this expansive footprint, the company has built a formidable logistics infrastructure. This network includes three primary logistics and distribution centers in Poland (Bieruń, Pruszków, Mysłowice, and a hub in Poznań), two warehouses in the Czech Republic, and a dense network of over 110 local branch offices that serve as last-mile distribution points.⁵ By the end of 2023, the company’s total warehousing space surpassed 160,000 square meters.² A cornerstone of its future growth strategy is the ongoing development of a new, highly automated 30,000 square meter distribution center in Zgorzelec, strategically located near the Polish-German border. This facility, planned for late 2025 or early 2026, represents both an offensive and defensive maneuver. Offensively, it provides the necessary capacity to service further growth in Western European markets. Defensively, the significant capital investment and advanced automation raise the barriers to entry, making it exceedingly difficult for smaller competitors to replicate the company’s scale and efficiency.⁵

Key Products, Services, and Brands

The company’s product portfolio is exceptionally broad, featuring over 250,000 unique reference items (SKUs) that cover all major vehicle systems, from engine and brake components to filters, oils, and workshop equipment.¹⁰ This extensive selection is sourced from a diverse base of over 350 suppliers, including globally recognized OEM and aftermarket brands such as Bosch, Castrol, Continental, and ZF Aftermarket.¹⁰

A critical component of the product strategy is the development and promotion of its own private label brand, MaXgear. Established in 2006, MaXgear has grown to include over 35,000 SKUs and now accounts for a significant portion of total sales, reported to be between 19% and 21% in recent periods.⁵ The MaXgear brand serves as a vital profitability lever. In a market characterized by intense price competition for branded products, the proprietary brand offers substantially higher margins, allowing Auto Partner to offer a cost-effective alternative to its most price-sensitive customers while simultaneously bolstering its own gross profit.¹¹ The contribution of MaXgear to gross profit is likely disproportionately higher than its share of revenue, making it a key tool for defending overall profitability. In addition to its own brand, Auto Partner holds exclusive distribution rights for several other brands, including ROOKS and Quaro, which further differentiates its offering from competitors.¹⁰

Industry Analysis & Market Dynamics

Polish Automotive Aftermarket

The Polish automotive aftermarket represents a large and structurally attractive market for distributors like Auto Partner. A key long-term driver of demand is the age of the national vehicle fleet. At the beginning of 2025, the average age of a passenger car in Poland was 15.1 years, a figure substantially higher than the European Union average of 12.5 years.⁷ This advanced age profile creates a consistent and recurring demand for maintenance and replacement parts, as older vehicles are more likely to be out of manufacturer warranty and serviced within the Independent Automotive Aftermarket (IAM), which is Auto Partner’s core customer base. While this provides a stable demand floor, the owners of older, lower-value vehicles are often more price-sensitive, which reinforces the competitive importance of offering cost-effective parts, such as private label brands. The broader European aftermarket is mature, with forecasts projecting modest but steady compound annual growth rates (CAGR) in the low-to-mid single digits.¹²

Industry Consolidation Trends

The European automotive aftermarket remains significantly more fragmented than its North American counterpart. In Europe, the top three distributors control approximately 15% of the market, whereas in the US, the top three command a share closer to 50%.¹⁴ This fragmentation has triggered a sustained trend of consolidation, with large strategic acquirers—such as US-based LKQ Corporation and Genuine Parts Company—and private equity firms actively pursuing M&A to build scale, expand geographic reach, and realize purchasing efficiencies.¹⁴ This industry-wide trend presents both a potential threat and an opportunity for Auto Partner. The threat lies in the potential for larger, better-capitalized global players to increase their focus on the Polish market, thereby intensifying competition. Conversely, with its public listing and strong balance sheet, Auto Partner is positioned to act as a consolidator by acquiring smaller, local competitors, though this has not been a significant part of its strategy to date.

Regulatory Environment and Supply Chain Dynamics

The regulatory landscape in the European Union is evolving, with an increasing focus on environmental sustainability. New regulations, such as the End-of-Life Vehicle Regulation (ELV-R), are designed to promote a circular economy by encouraging the reuse and remanufacturing of automotive components.¹⁶ This could alter supply chain dynamics, creating new business models and opportunities for distributors that can effectively manage the reverse logistics of used parts (cores). Concurrently, increasingly stringent emissions standards like Euro 7 continue to drive up the technological complexity of vehicles, which in turn increases the value and sophistication of the replacement parts required for their maintenance.¹⁸

E-commerce Disruption and the EV Transition

Two major forces are set to disrupt the traditional aftermarket: e-commerce and the transition to electric vehicles (EVs). The rise of online sales channels has increased price transparency and competition, putting pressure on the margins of traditional distributors.¹⁵ Auto Partner has adapted to this shift, with a high percentage of its orders being placed online—approximately 70% in Poland and nearly all international orders—demonstrating a successful integration of digital channels into its business model.⁵

The long-term transition to battery electric vehicles (BEVs) represents the most significant structural threat to the industry. BEVs contain far fewer moving parts than internal combustion engine (ICE) vehicles and have substantially lower maintenance requirements, which will eventually reduce the total addressable market for many traditional replacement parts like filters, exhaust systems, and engine components.¹⁹ While the adoption of EVs in Poland remains in its early stages, with BEVs accounting for only 5% of new car registrations in the first half of 2025, the growth rate is rapid.²² This creates a long-term strategic imperative for distributors to evolve their product portfolios and technical expertise to cater to the different needs of an electric fleet. In the medium term, however, the large and aging installed base of ICE vehicles will continue to provide a “long tail” of demand, creating a complex dynamic where companies must manage a profitable but declining legacy business while investing in an uncertain future market.

Competitive Positioning

Market Share Analysis

The Polish automotive parts distribution market is characterized by the presence of one dominant leader and several strong secondary players. Inter Cars SA (CAR.WAR) is the undisputed market leader, with an estimated market share of approximately 30%.²³ Auto Partner is firmly positioned as one of the top-tier competitors, with a market share estimated to be nearly 10%.⁵ Other significant competitors include Inter-Team, which holds a similar share to Auto Partner at around 9-10%.²³ Beyond these major players, the market remains highly fragmented, composed of numerous smaller, regional distributors. This market structure is reflected in the companies’ respective market capitalizations, with Inter Cars being substantially larger than Auto Partner, valued at approximately PLN 8.0 billion compared to Auto Partner’s PLN 2.6 billion.²⁴ This landscape suggests that Auto Partner’s strategy is likely focused on capturing market share from the long tail of smaller competitors and expanding into less saturated foreign markets, rather than engaging in a direct, head-to-head battle for dominance with Inter Cars in Poland.

Competitive Advantages

Auto Partner’s competitive advantage, or “moat,” is not derived from a single factor but from the synergistic integration of three core pillars: logistics, scale, and product breadth.

1. Distribution Network and Logistics: The company’s most critical asset is its sophisticated and efficient logistics network. The ability to provide high-frequency, just-in-time deliveries—often multiple times per day—is a core requirement for its professional workshop customers, who value speed and reliability to maximize their own operational throughput.⁵ This network, comprising central hubs, regional warehouses, and over 110 local branches, creates a significant barrier to entry due to the immense capital and operational expertise required to replicate it.
2. Scale and Supplier Relationships: The company’s significant operational scale provides it with substantial purchasing power. By consolidating demand, Auto Partner can negotiate favorable terms with its base of over 350 suppliers, leading to better pricing and higher potential margins than smaller rivals can achieve.¹⁰ This scale advantage is further amplified by its membership in GlobalOne, an international purchasing group that pools the buying power of its members.⁵
3. Brand Portfolio and Exclusivity: A comprehensive product offering is essential to being a one-stop-shop for repair garages. Auto Partner’s catalogue of over 250,000 SKUs ensures it can meet the vast majority of its customers’ needs.¹⁰ This breadth is enhanced by its portfolio of exclusive distribution rights and its high-margin MaXgear private label brand, which provides a competitively priced alternative to premium brands and serves as a crucial tool for margin management.¹⁰

The integration of these three elements creates a formidable competitive moat. A new entrant would not only need to secure supplier relationships and build a product catalogue but also simultaneously invest in the complex physical and IT infrastructure required to deliver those products with the speed and reliability that the market demands.

Financial Performance & Trends (2022-2024)

Auto Partner’s financial performance over the 2022-2024 period has been characterized by a powerful trend of top-line growth, coupled with more recent and significant pressure on profitability. This divergence between sales momentum and margin performance is the central theme of the company’s recent financial history.

Consolidated Income Statement (in PLN thousands)	2022	2023	2024
Revenue	2,834,701	3,653,384	4,112,497
Cost of Sales	(1,987,689)	(2,663,505)	(2,985,276)
Gross Profit	847,012	989,879	1,127,221
Selling and Distribution Expenses	(453,742)	(564,746)	(678,260)
Administrative Expenses	(111,901)	(122,409)	(160,689)
Operating Income (EBIT)	281,369	302,724	289,272
Net Finance Costs	(24,942)	(47,663)	(39,139)
Profit Before Tax	256,427	255,061	250,133
Income Tax Expense	(49,159)	(31,475)	(42,157)
Net Profit	207,268	223,586	207,976

Source: Company Financial Reports.¹ Note: Figures are consolidated. Minor discrepancies may exist between sources due to rounding or reporting standards.

Consolidated Statement of Financial Position (in PLN thousands)	As at Dec 31, 2022	As at Dec 31, 2023	As at Dec 31, 2024
Assets
Non-current Assets	390,929	430,761	422,481
Current Assets	1,179,353	1,363,162	1,603,446
Inventories	775,108	1,006,370	1,122,700
Trade and Other Receivables	363,853	316,952	439,568
Cash and Cash Equivalents	34,930	37,364	38,580
Total Assets	1,570,282	1,793,923	2,025,927
Equity and Liabilities
Total Equity	842,824	1,046,192	1,234,293
Non-current Liabilities	269,400	291,567	264,992
Current Liabilities	458,058	456,164	526,642
Total Liabilities	727,458	747,731	791,634
Total Equity and Liabilities	1,570,282	1,793,923	2,025,927

Source: Company Financial Reports.¹ Note: Figures are consolidated. Minor discrepancies may exist between sources due to rounding or reporting standards.

Revenue Growth

The company has maintained an impressive growth trajectory. Revenue increased by a strong 28.9% in 2023 to reach PLN 3.65 billion, followed by a further 12.6% increase in 2024 to PLN 4.11 billion.¹ This growth has been broad-based, with domestic sales rising 13.3% and export sales growing 11.8% in 2024.⁶ Preliminary results for the first quarter of 2024 showed continued momentum, with revenue up 18.9% year-over-year to PLN 994.8 million.³¹ Management has noted that the 2024 growth rate was achieved despite deflationary price pressures from suppliers and the adverse impact of a strengthening PLN on the value of its euro-denominated export sales.⁶

Profitability Analysis

While absolute gross profit has continued to climb, profitability margins have come under significant pressure. The consolidated gross margin stood at a healthy 29.9% in 2022 before compressing to 27.1% in 2023 and recovering slightly to 27.4% in 2024.³ This pressure is more pronounced further down the income statement. The EBITDA margin declined from 11.1% in 2022 to 9.5% in 2023 and further to 8.4% in 2024.⁴ Consequently, after reaching a record net profit of PLN 223.6 million in 2023, net profit fell by 7.0% to PLN 208.0 million in 2024.¹ This margin squeeze is a direct result of operating expenses, particularly distribution and administrative costs, growing faster than revenue (20.1% vs. 12.6% in 2024).⁷ Management attributes this to significant cost inflation, including a substantial increase in Poland’s minimum wage.⁷

Working Capital Management and Cash Flow Generation

The company’s rapid growth has been capital-intensive, requiring significant investment in working capital. Inventories grew from PLN 775.1 million at the end of 2022 to PLN 1.12 billion by the end of 2024 to support the higher sales volumes.¹ This investment in growth has led to volatile and, at times, negative free cash flow. After generating positive cash from operations of PLN 180.1 million in 2023, the figure moderated to PLN 124.2 million in 2024.¹ When accounting for capital expenditures, which have been consistently in the range of PLN 38-45 million per year, levered free cash flow was negative in 2022 and 2024.¹ This negative free cash flow is not a sign of operational distress but rather a direct reflection of the company’s strategy of aggressively funding organic growth through reinvestment.

Balance Sheet Strength

Despite the heavy investment demands, Auto Partner has maintained a strong and conservatively managed balance sheet. Total debt stood at PLN 526.6 million at the end of 2024, against total equity of PLN 1.23 billion.⁴ The company’s leverage remains modest, with a net debt-to-EBITDA ratio that has remained stable in a tight range of 1.2x to 1.4x over the 2022-2024 period.² This disciplined approach to leverage provides a crucial financial cushion, allowing the company to navigate periods of margin pressure and continue executing its long-term investment plans without undue financial risk.

Capital Allocation & Growth Strategy

Investment Priorities and Growth Initiatives

Auto Partner’s capital allocation strategy is unequivocally prioritized towards funding organic growth. The company’s stated strategic goals and its pattern of investment demonstrate a clear focus on increasing its scale of operations by expanding and enhancing its distribution network.³³ The most significant capital project is the construction of the new Zgorzelec logistics center, a major investment designed to build capacity for future growth, particularly in Western European markets.²

International expansion is the second core pillar of the growth strategy. The company explicitly aims to “develop faster than the market through expansion of sales in foreign countries,” a goal it has successfully pursued to date.³⁴ This is complemented by initiatives to enhance profitability through the expansion of its proprietary brand portfolio and the deployment of improved IT solutions to optimize cost control.³³

M&A Activity

In a European aftermarket characterized by accelerating consolidation, Auto Partner has distinguished itself by its near-total focus on organic growth. The available research provides no evidence of the company engaging in significant merger or acquisition activities.³⁵ The group’s structure, which includes subsidiaries for its MaXgear brand and its Czech operations, appears to be the result of organic business development rather than the acquisition of external companies.³⁷ This “build versus buy” approach may result in a more measured pace of growth compared to an acquisition-led strategy, but it avoids the significant financial and integration risks associated with M&A. This suggests a management philosophy that prioritizes operational control and cultural cohesion.

Dividend Policy and Shareholder Returns

The company has established a policy of returning capital to shareholders via an annual dividend. However, these distributions are conservative, reflecting the primary focus on reinvestment. For the financial years 2022 and 2023, the company paid a dividend of PLN 0.15 per share, and the management board has recommended maintaining this same level for the 2024 financial year.³⁸

This dividend level corresponds to a very low payout ratio of approximately 9.5% of trailing twelve-month earnings.¹ This capital allocation choice sends a clear signal to investors: management believes that the highest returns can be generated by reinvesting the vast majority of profits back into the business to fuel its network expansion and international growth. The investment case is therefore predicated on the company’s ability to generate a high return on this reinvested capital over the long term. No share repurchase programs have been mentioned in the available documentation.

Key Challenges & Headwinds (2022-2024 Focus)

Macroeconomic Pressures

The most acute challenge facing Auto Partner is the macroeconomic environment, which has created a pincer movement on profitability. On one hand, the company faces significant cost inflation, particularly from rising wages in Poland, which has driven up operating expenses at a rate faster than revenue growth.⁷ On the other hand, the market for automotive parts has experienced deflationary price pressures from suppliers.⁶ This combination of rising costs and falling/stagnant prices has been the primary driver of the margin compression observed in 2023 and 2024. Furthermore, with 50% of its revenue generated from exports and denominated primarily in Euros, the company is significantly exposed to foreign exchange risk. A strengthening of the Polish Złoty, as was observed during parts of 2023-2024, directly reduces the value of these export sales when translated back into the company’s reporting currency, acting as a headwind to both reported revenue and profit.⁶

Automotive Industry Transition

The long-term, secular transition of the automotive industry toward electric vehicles (EVs) poses a fundamental challenge to the entire aftermarket ecosystem. BEVs have drastically different maintenance profiles, with fewer moving parts and no need for traditional components like engine oil, filters, spark plugs, or exhaust systems.¹⁹ As the share of EVs in the total vehicle parc grows, the total addressable market for many of Auto Partner’s core product categories will inevitably shrink. While EV adoption in Poland is still in its nascent stages, its rapid growth rate necessitates a long-term strategic response from all aftermarket participants to adapt their product portfolios and technical capabilities.

Supply Chain and Competitive Pressures

Managing a complex supply chain with over 250,000 SKUs from hundreds of suppliers presents ongoing operational challenges, including the risk of inventory obsolescence as vehicle technology evolves.⁴¹ The market itself is intensely competitive. Auto Partner faces a dominant market leader in Inter Cars, which possesses greater scale and resources.²³ The broader European trend of consolidation also raises the prospect of larger, well-capitalized international competitors increasing their focus on the Polish and CEE markets, which could further intensify pricing pressure and the battle for market share.¹⁴

Management Quality & Corporate Governance

Leadership Team

Auto Partner’s leadership is a key strength, characterized by stability, deep industry experience, and significant alignment with shareholder interests. The company is founder-led, with Mr. Aleksander Górecki, who established the business in 1993, continuing to serve as the President of the Management Board.³⁴ His long tenure provides a consistent, long-term strategic vision. Furthermore, as a major shareholder, his personal financial interests are directly aligned with those of minority shareholders.³⁵

The senior management team is also remarkably stable and experienced. Vice-President Andrzej Manowski has been with the company since 1994, while Vice-President Piotr Janta joined in 2009.³⁴ This continuity in leadership ensures a deep, institutional knowledge of the company’s operations, customers, and the broader aftermarket industry. Biographical details confirm that the team’s experience is directly rooted in the automotive parts distribution sector, providing credible operational expertise.³³

Corporate Governance

As a company listed on the Warsaw Stock Exchange (WSE), Auto Partner adheres to a formal corporate governance framework based on the “Best Practice for WSE Listed Companies”.⁴⁴ This structure provides important oversight and transparency.

The company has a five-member Supervisory Board, which is responsible for overseeing the Management Board and also performs the functions of an audit committee.⁴⁵ Crucially, two members of this board, Bogumił Kamiński and Bogumił Woźny, are designated as independent and possess the requisite qualifications in accounting or auditing, as stipulated by Polish law and WSE best practices.⁴⁵ This provides a critical layer of independent oversight of the company’s financial reporting and internal control systems.

The company has also implemented formal policies for executive compensation, including a Remuneration Policy and a multi-year Incentive Scheme for the Management Board.² These programs are designed to align management compensation with the company’s performance and the long-term creation of shareholder value, representing a positive governance practice that mitigates some of the risks that can be associated with a dominant founder-led company.

Valuation Analysis Framework

An analysis of Auto Partner’s valuation reveals a company that the market values at a premium relative to its largest domestic competitor, likely reflecting its stronger recent growth profile. This premium, however, makes the stock’s valuation sensitive to the company’s ability to sustain that growth and, critically, to restore its profitability margins.

Valuation Metrics Comparison	Auto Partner SA (APR.WAR)	Inter Cars SA (CAR.WAR)	Peer/Sector Average
P/E Ratio (TTM)	12.8x	11.1x	9.4x – 11.1x
Price/Book Ratio (TTM)	2.1x	1.5x	1.4x – 2.0x
Price/Sales Ratio (TTM)	0.6x	0.4x	0.6x – 0.9x
EV/EBITDA (TTM)	9.8x	9.2x	N/A

Source: Data compiled from multiple sources as of mid-2025.¹ Peer average includes CAR, WTN, OPN, etc. Sector is Consumer Cyclicals.

Current Valuation and Peer Comparison

As of mid-2025, Auto Partner trades at a trailing twelve-month (TTM) P/E ratio of approximately 12.8x and an EV/EBITDA multiple of 9.8x.⁴⁷ In contrast, its larger competitor, Inter Cars, trades at a TTM P/E of approximately 11.1x and an EV/EBITDA multiple of around 9.2x.⁵⁰ This indicates that the market is assigning a valuation premium to Auto Partner. This premium is likely attributable to Auto Partner’s historically higher rate of revenue growth. However, this also implies that the market has high expectations for future performance, and any failure to meet these growth expectations or to address the recent margin compression could make the valuation appear stretched.

Discounted Cash Flow (DCF) Considerations

An intrinsic valuation of Auto Partner using a DCF model would be highly dependent on several key assumptions, the most critical of which is the future trajectory of the company’s profitability margins.

• Revenue Growth: The model’s sensitivity to the revenue growth rate is high. An analyst would need to form a view on whether the company can sustain its historical growth rate or if it will naturally decelerate as the business matures and its scale increases. The performance of its export markets will be a key variable.
• Profitability Margins: This is the most critical assumption. A scenario in which EBITDA margins recover from the current ~8.4% level back towards the ~11% achieved in 2022 would yield a significantly higher valuation than a scenario where the current, lower margins are assumed to be structural and permanent. The investment case largely hinges on this variable.
• Capital Intensity: The level of reinvestment needed to sustain growth will be a major determinant of free cash flow. Assumptions regarding future capital expenditures (for logistics infrastructure) and working capital requirements (as a percentage of sales) will have a material impact on the valuation outcome.

The valuation appears to be pricing in a narrative of continued strong growth combined with an eventual recovery in margins. If one believes the margin pressures experienced in 2024 are cyclical and will abate, the current valuation may be considered reasonable. However, if these pressures are viewed as structural due to permanently heightened competition and cost inflation, the stock may be considered fully valued or overvalued, especially given the discount at which its main competitor trades.

Risk Assessment

Business and Financial Risks

• Margin Compression: The most significant near-term risk is the continued erosion of profitability. The company is exposed to a challenging combination of rising operating costs, particularly wage inflation in Poland, and a competitive, deflationary pricing environment for its products. A failure to manage costs effectively or an inability to pass on price increases could lead to a structural impairment of its historical profitability levels.⁷ This risk is strategic, as persistently lower margins would reduce the return on the significant capital currently being invested in growth, potentially impairing long-term value creation.
• Currency Exposure: With 50% of its revenue generated in foreign markets, primarily denominated in Euros, the company has substantial exposure to fluctuations in the EUR/PLN exchange rate. A strengthening Polish Złoty serves as a direct headwind, reducing the value of export revenues and profits when converted back to PLN for financial reporting.⁶
• Inventory Obsolescence: Managing an inventory of over 250,000 SKUs is inherently complex. The risk of inventory obsolescence is material, particularly as the vehicle parc evolves with new technologies, potentially leaving the company with slow-moving or unsellable stock for older models.⁴¹
• Supplier Dependence: The business model relies on maintaining strong relationships with a diverse base of over 350 suppliers. Any significant disruption, such as the loss of a key supplier or an unfavorable change in commercial terms, could negatively impact product availability and profitability.

Operational Risks

• Execution Risk: The company’s growth strategy is heavily dependent on the successful execution of large-scale capital projects, most notably the new Zgorzelec distribution center. Any significant delays, cost overruns, or operational issues during the ramp-up of this facility could disrupt the company’s growth trajectory and negatively impact financial results.
• Integration Challenges: While the company’s growth has been organic, any future shift towards an M&A-led strategy would introduce significant integration risks, including challenges in merging corporate cultures, IT systems, and logistics networks.

Industry and Secular Risks

• EV Transition: The global shift to electric vehicles represents the most profound long-term risk to the traditional automotive aftermarket. The fundamentally different and lower maintenance needs of BEVs will, over time, reduce the total addressable market for many of Auto Partner’s core product lines.¹⁹ The company’s ability to adapt its product portfolio and expertise to this new paradigm will be critical for its long-term survival and success.
• Intensified Competition: The Polish and European aftermarkets are highly competitive. Auto Partner faces pressure from the dominant market leader, Inter Cars, as well as the constant threat of new entrants or consolidation among existing players, which could further intensify price competition.¹⁴

Catalysts & Key Monitoring Points

Positive Catalysts

• Margin Stabilization and Recovery: The most powerful near-term catalyst would be clear evidence that the margin compression of 2024 has bottomed out. An improvement in gross and EBITDA margins in upcoming quarterly reports would signal that the company is successfully managing cost pressures and navigating the competitive pricing environment.
• Successful Launch of Zgorzelec Hub: The on-time and on-budget completion and efficient ramp-up of the new distribution center would de-risk a major capital project and provide the capacity to unlock the next phase of growth, particularly in Western Europe.
• Accelerated Export Growth: Financial results showing stronger-than-expected growth in key export markets would be a significant positive, demonstrating the success of the international expansion strategy and diversifying the company’s reliance on the Polish market.
• Favorable Currency Movements: A sustained weakening of the Polish Złoty against the Euro would provide a direct tailwind to reported revenues and profits, given that 50% of sales are generated from exports.

Negative Catalysts

• Continued Margin Erosion: A failure of profitability margins to stabilize or improve in the coming quarters would be a major negative catalyst, suggesting that the pressures are structural rather than cyclical and potentially leading to a re-rating of the stock’s valuation.
• Economic Downturn: A significant macroeconomic slowdown in Poland or key EU markets could lead to reduced vehicle miles traveled and deferred maintenance by consumers, which would negatively impact demand for aftermarket parts and slow revenue growth.
• Aggressive Competitive Actions: Increased price competition from Inter Cars or other large distributors could force Auto Partner to sacrifice margins to defend its market share, further pressuring profitability.
• Delays or Issues with Strategic Projects: Any significant delays or cost overruns associated with the Zgorzelec distribution center would be a negative development, impacting capital efficiency and delaying future growth.

Key Metrics to Monitor

• Monthly Sales Reports: Auto Partner provides monthly updates on its sales revenue, offering a high-frequency indicator of top-line business momentum that is more current than quarterly reports.⁵³
• Gross Margin Percentage: This is the most critical metric for tracking the company’s pricing power and its ability to manage the cost of goods sold. Trends in this metric will be a leading indicator of overall profitability.
• Operating Expense Ratio (as a % of Revenue): Monitoring selling, distribution, and administrative costs relative to sales is crucial for assessing the company’s ability to control inflationary pressures on its cost base.
• Inventory Turnover and Days Sales of Inventory (DSI): These metrics provide insight into the efficiency of working capital management. A significant increase in DSI could signal slowing sales or potential inventory obsolescence issues.
• EUR/PLN Exchange Rate: Given the significance of export sales, this exchange rate is a key external factor that will materially influence the company’s reported financial results.
• Management Commentary: Close attention should be paid to management’s discussion and analysis in quarterly and annual reports, particularly regarding their outlook on pricing, cost inflation, progress on the Zgorzelec project, and performance in key export markets.

Works cited

1. Auto Partner SA – WA:APR Financials – Investing.com, accessed August 7, 2025, https://www.investing.com/equities/auto-partner-sa-financial-summary
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