| Valuation method | Value, CHF | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 9.30 | -84 |
Varta AG is a leading German manufacturer specializing in microbatteries, household batteries, and energy storage solutions. Founded in 1887 and headquartered in Ellwangen, Germany, the company operates through two key segments: Lithium-Ion Solutions & Microbatteries and Household Batteries. Varta's Lithium-Ion Solutions segment provides cutting-edge zinc-air batteries for hearing aids, lithium-ion batteries for wireless headphones, wearables, and medical devices, as well as rechargeable solutions for industrial and OEM applications. The Household Batteries segment offers a broad range of consumer products, including rechargeable batteries, chargers, power banks, and energy storage systems. As a subsidiary of Montana Tech Components AG, Varta AG is listed on the Swiss Exchange (SIX) and plays a pivotal role in the global energy storage market, particularly in Europe. The company's focus on innovation and sustainability positions it as a key player in the transition toward portable and efficient energy solutions.
Varta AG presents a mixed investment profile. The company operates in high-growth segments such as microbatteries for medical devices and wearables, as well as energy storage solutions, benefiting from increasing demand for portable power. However, its financial performance in FY 2022 was weak, with a net loss of CHF 200.42 million and negative diluted EPS of CHF 4.96. The company's high beta (1.561) indicates significant volatility relative to the market, which may deter risk-averse investors. While Varta maintains a strong position in niche markets like hearing aid batteries, its heavy capital expenditures (CHF 140.76 million) and modest operating cash flow (CHF 20.38 million) suggest liquidity constraints. Investors should weigh its technological expertise against financial instability before committing capital.
Varta AG holds a competitive edge in microbatteries, particularly in zinc-air batteries for hearing aids, where it dominates due to high reliability and long lifespan. Its lithium-ion solutions for wearables and medical devices also benefit from strong R&D capabilities. However, the company faces intense competition in the broader lithium-ion battery market from larger Asian manufacturers with superior economies of scale. Varta's Household Batteries segment competes with mass-market brands, where pricing pressure is significant. The company's German engineering and focus on high-quality, specialized applications differentiate it from low-cost producers, but its financial struggles (negative net income in 2022) limit its ability to invest aggressively in next-gen technologies like solid-state batteries. Its competitive positioning is further challenged by supply chain dependencies and rising raw material costs. While Varta has a loyal customer base in Europe, its global market share remains modest compared to industry giants.