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Changed sales pattern drives a solid Q4; end-markets uncertainties to persist

  • 23 Feb 17

After a string of disappointing results, Novozymes ended the year on a strong footing with both Q4 and FY 16’s numbers coming slightly ahead of ours as well as consensus estimates. After a poor Q3 (sales contracted 4% and 3% on a reported and organic basis, respectively), sales rebounded 8% (6% organic and a 2% positive currency impact) to DKK3.7bn driven by surge across segments, except for Technical & Pharma (-17% reported basis and -12% organically). The outperformance was primarily driven by a sturdy performance in Agriculture & Feed (+22% vs. -3% in Q3 16, organically) and a turnaround in Bioenergy (+7% vs. -8% in Q3 16, organically) segments. Healthy performances from the larger segments – Household Care (+5% vs. -5% in Q3 16, organically) and Food & Beverages (+4% vs. -2% in Q3 16, organically) also supported the quarterly uptick. Strong sales performance percolated down to profitability too with EBIT growing 10% to DKK1,062m. For FY 16, revenue inched up 1% (2% organic and -1% currency impact) while EBIT rose by c.2% (EBIT margin slightly up to 27.9% vs. 27.7% in FY 15). The dividend has been upped by 14% to DKK4 per share, while a new share buy-back programme of DKK2bn running over FY 17 has been announced. The FY 17 sales growth guidance of 3-6% (in DKK) and 2-5% (organically) is below its long-term ambition (6-7% organically). On the profitability front, management expects EBIT growth to range 3-6% (margin: c.28%) and net profit to expand 2-5%. Also, to ramp-up capacity and fuel innovations, management intends to increase investments in the next few years (DKK1.7-1.9bn guided for FY 17 compared to DKK1.2bn in FY 16).

FY supported by exceptional items; lower 2017 traffic guidance

  • 23 Feb 17

Paris Aéroport released a mitigated set of full-year results, broadly in line with consensus. Results [Based on 2015 restated numbers] Group revenue was up 0.4% at €2,947m, 0.8% above the €2,922m consensus. EBITDA reached €1,195m, up 0.4% from €1,191m in 2015, broadly in line with the €1,192m of consensus. Net income was up €5m, to €435m, bang in line with market expectations. By division, the Aviation and Retail businesses were up slightly, at +0.5% and +0.7%, respectively while the real estate activities were down 0.8%. International and airport developments were up 1% and revenues from other activities rose 3.6%. Traffic figures were published on 13 January so there was no surprise on this side. Total traffic was up 2%, with traffic at Orly airport up +5.3% and Charles de Gaulle broadly flat at +0.3%. Sales per pax reached €18.2, down 8% yoy, although slightly above the first nine months’ figure (€17.9). The board proposed a dividend of €2.64 per share, up €0.03 yoy, in line with the 60% pay-out guidance. Guidance For 2017, the group now sees traffic growth ranging between +1.7% and +2.2% (vs +2.3% previously), higher EBITDA and a stable 60% pay-out ratio. The company confirmed its 2020 targets, including the €23 sales per pax target. Other developments The group announced the sale of its 49% interest in TAV Construction, arguing that the Turkish company was now focusing on non-airport construction works, including towers and stadia. Following this decision, the TAV construction business has been impaired by €45m and has been reclassified under “assets held for sale”. On the other hand, Paris Aéroport’s management confirmed that the sale of its 38% interest in TAV Airport was not on the agenda. Future investments could include the acquisition of a 20% stake in the Vietnamese airport operator AVC for which Paris Aéroport seems well placed given that the Vietnamese government could prefer to sell a minority stake to Paris Aéroport given the shareholding of the French government. According to our estimates, this could represent a c.€250m investment and the sale could happen as soon as 31 March 2017. Other smaller investments could be made to increase current minority stakes (Croatia, Jordan or TAV Airports), although no specific names were given.

 

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