Research, Charts & Company Announcements
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EBIT margin trending towards 10%
02 Mar 17
Bekaert reported its FY16 results which showed impressive progress in all metrics resulting from cost-cutting actions and portfolio reshaping including acquisitions and business disposals. - Consolidated revenue reached €3.7bn (up 1%). - Q4 16 sales were up 9% vs Q4 15. Mergers and acquisitions accounted for 6% and organic sales growth was 3% driven by strong volume growth in Asia Pacific. - Gross profit increased by 15% in 2016: €690m (18.6% of sales) vs €598m in 2015 (16.3% of sales). - Underlying EBIT has risen by 32% (from €231m in 2015 to €305m in 2016) reflecting a margin of 8.2% versus 6.3% (+210bp). - EBIT has reached €260m vs €219m in 2015 and the EBIT margin has increased from 6% to 7%. - The ROCE is at 11.8% compared with 9.1% in 2015. - Net debt is €1068m including the €279m acquisition impact of the Bridon merger deal. - EPS is €1.87 vs €1.82 in 2015.
A mixed bag in Q3, as the solar market weighed
18 Nov 16
The 9M revenues reached €2,759m (-1% yoy) as organic volume growth of 4.5% was more than offset by the lower wire rod prices (-3.2%), while the effect of mergers, acquisitions and disvestments was +1.6%. The company expects continuing strong demand from the automotive and construction markets in Q4 16 and anticipates a moderate pick-up in demand from solar markets after the Q3 decline. A reduction in feed-in tariffs is expected in China in April 2017 and demand is projected to strengthen ahead of this change. The oil and gas markets will remain weak. Bekaert believes its transformational excellence programmes will continue to underpin its move towards a sustainable higher level performance and has revised its previous target range (between 7% and 8% REBIT) for full-year 2016 and now expects to achieve between a 7.5% and 8% REBIT margin on sales.
Strong H1 margins lead to a rise in FY16 guidance
29 Jul 16
Bekaert reported robust H1 16 results. Main facts: H1 16 revenue reached €1.82bn (-4% yoy), strong currency impact of €-63m (3% of revenue). Recurring EBIT margin of 8.6% (€157m) to be compared with 5.9% in H1 15. Net income was impacted by “other financial income and expenses” of €-53.2m (versus €-13.9m) and reflected the increase in the fair value of the conversion option of the previous convertible bond (€-42.7m) in line with the evolution of the share price. The EPS was, consequently, €0.58 versus €0.93 in H1 15. Net debt was €1,151m (versus €1,023m in H1 15)including the €298m acquisition impact of the Bridon merger deal. Net debt/EBITDA was 2.4x, unchanged from the same period last year and up from 1.9x at year-end 2015. Excluding the Bridon impact, net debt/EBITDA was 1.8x, slightly down from year-end 2015. The company expects it will end the year ahead of the target goal of 7% recurring EBIT, achieving between 7% and 8% REBIT for full-year 2016.
Negative FX and prices offset Q1 16 volume growth
11 May 16
Bekaert reported Q1 16 revenue showing mixed figures. The company also looks more cautious for the second half of the year. Bekaert achieved consolidated sales of €884m in Q1 16, a 2% yoy decrease. The solid organic volume growth (+5.5%) was fully offset by significantly lower wire rod prices (-6%) which were passed on to customers. At the same time, mix improvements (+3%) were more than offset by continued price erosion in tyre markets (-2%). The net effect of acquisitions (+2%) and divestments (-2%) was neutral, but unfavourable currency movements – driven by LatAm and Brazil – drove consolidated sales down by 2%.
Strong prospects ahead despite some tailwinds
26 Feb 16
Bekaert reported strong FY15 results and 2016 guidance, both above market expectations and our forecasts. Main figures: * 2015 revenue at €3.67bn, in line with expectations, corresponding to an organic growth of 2% (+14% reported). * The 2015 adj. EBIT reached €223m vs €164m last year, corresponding to an operating margin of 6.1% above expectations. * 2015 EPS €1.83 versus market estimate of €1.65. * Dividend raised to €0.90/share as expected (vs €0.85 last year). * Net debt €832m at year-end vs est. €991m despite acquisitions (€235m net of divestiture). Bekaert forecasts a significant step in 2016 towards the goal of a 7% adj. EBIT margin, and expects to outperform the market environment as it anticipates strong demand in the automotive sector (>40% of sales) to continue, while, seeing pressure across most other industries due to global overcapacities.
Increased volumes offset by pricing pressure
13 Nov 15
Bekaert reported Q3 15 revenues of €898m, 10% higher than last year, with acquisition and FX accounting for more than 15%. The organic decline was therefore 5% due to the positive price mix and volume effects (+1%) and significantly lower wire rod prices (-6%). By region; EMEA: the solid Q3 15 was driven by acquisitions, flat organic growth was driven by higher volumes, normal seasonality and an adverse impact of passed-on lower raw material prices. The North American activities reported 4% yoy sales growth in Q3, and FX effects accounted for +15% while the volume loss from the fire damage in Rome (Georgia, US) was the main driver of the organic decline (-11%). But the production plant was reopened during October and demand in the US is expected to stabilise in Q4. In Asia Pacific, Bekaert achieved 12% sales growth in Q3, acquisitions boosted sales by 7% and currency effects accounted for +13%. The price erosion which made up most of the organic sales decline (-8%) was mainly the result of passed-on lower wire rod prices. In LatAm, revenue was up 10% in Q3 as acquisitions, organic volume growth and an improved price-mix drove up sales significantly. Currency effects were almost neutralised as various devaluations (versus the US$) in the region offset the impact of a weaker euro. The segment’s top-line was, moreover, adversely impacted by declining raw material prices. Net debt was €906m at the end of September, €117m down from June 2015 thanks to the working capital decrease.
N+1 Singer - T. Clarke - Strong conclusion to FY16, record order book
28 Mar 17
After significant upgrades at the time of the full year update (PBT forecast +43% FY16; +14% FY17), today’s results are c.4% ahead of our expectations at the PBT level and show strong growth on the prior year (PBT +48%). All regions achieved positive growth in revenue. The outlook statement refers to a still growing order book (£350m at the end of February vs. £330m at the year end) and the strength of recent trading, with London & the South East and Scotland said to be particularly positive. The Group has reiterated its ambitions to improve margins, but we have not incorporated this into our forecasts at this stage. We have nudged up our FY’17 forecasts (PBT +5%) and introduced FY’18 forecasts that imply 2% PBT growth. Despite the well justified bounce in the share price, the shares still trade at a significant discount to the peer group (7.6x FY17 PE, 4% yield).
N+1 Singer - Severfield - Strong H2 drives upgrades; CEO temporarily steps down due to ill health
28 Mar 17
Severfield’s trading update highlights that trading during H2 was strong and the Group now expects results to be ahead of expectations. Cash flow performance has been similarly strong with net funds at the year end also expected to be ahead of expectations. The strong performance was driven by both a better than expected revenue performance and better than expected growth in the operating margin. We expect to increase our FY16 PBT forecasts by c.9% to around £19.5m. In addition, we are disappointed to see that Ian Lawson (CEO) has taken a temporary leave of absence due to physical ill health. John Dodds (non-executive Chairman) will step up to Executive Chairman on an interim basis and Alan Dunsmore (FD) has agreed to assume the role of CEO on a similar basis. This should ensure the continuity of the business whilst Ian is recovering. The outlook for Sevefield remains positive and the Group has reiterated its medium term target to double PBT from £13.2m in FY16 by FY20. We remain positive on Severfield (one of our best ideas for 2017) and continue to see clear potential for it to outperform its medium term targets.
N+1 Singer - Morning Song 22-03-2017
22 Mar 17
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28 Mar 17
ClearStar* (CLSU): Building a background for growth (CORP) | Sound Energy (SOU): TE-8 results (HOLD) | LiDCO* (LID): 2017 should be a transformative year (CORP) | Proteome Sciences* (PRM): FY 2016 in line. Moving towards breakeven (CORP) | Fulcrum (FCRM): Significant market potential, rising margins and a strong balance sheet (BUY) | Mortgage Advice Bureau (MAB1): Strong and growing intellectual property (BUY) | 7digital* (7DIG): Open offer result (CORP)