Q1 21 numbers came in line with expectations
Margins are on the rise, after the weaker FY20
SMT is still under pressure
Some bottlenecks may weigh on growth in the next quarters though
No big change to our numbers at first glance, but we remain cautious on organic growth going into Q2/Q3
Companies: Sandvik (SAND:STO)Sandvik AB (SAND:OME)
FY20 results were more or less in line with consensus*
The Machining Solutions and Material Technology segments are still under pressure
The Mining business is doing well, particularly in terms of orders received
The balance sheet remains very healthy thus a SEK2.00 extraordinary dividend on top of the SEK4.50 ordinary one
We do not expect any major change to our forecasts
Companies: Sandvik AB
Q3 shows an (expected) rebound vs Q2
In particular, Mining&Rock Technology did quite well in the quarter
The other divisions are still suffering
The recent share price performance leaves little room for a significant upside
Q2 was tough and the outlook not very inspiring
The group’s exposure to Aeronautics and Automotive suggests there is still some way to go in terms of recovery
In this context, the strength of the balance sheet is a clear asset
We expect corporate action and asset rotation to continue to boost the group’s businesses
Q1 20 is of course down due to the COVID-19 crisis
Despite the lack of guidance, Q2 is set to be worse, notably in SMS
However, we like the margin resilience and ongoing cost-cutting programmes
The clean balance sheet is a clear asset in these troubled times
We will fine-tune our numbers, with little impact on the valuation in our view
FY19 numbers were broadly in line with our and the street’s expectations.
The long-cycle businesses have been doing well, while the short-cycle ones are still under pressure.
Visibility remains low for the latter, explaining our rather cautious top-line expectations going into FY20.
The separate listing of SMT will be another focus for investors in the current year (c.15% of total revenues).
Q3 19 numbers well in line with H1 19 numbers.
Some expected one-offs (efficiency measures), all booked in Q3.
The long-cycle business is going well, while the short-cycle one shows further weaknesses.
All in all, no major changes in our numbers to be expected.
Q2 results are very decent, and margins remain high
However, the order intake was a bit weak in the quarter, due to SMT and SMS
The balance sheet remains very clean, which is not a surprise
At the end of the day, the stock is likely to be capped before visibility improves on the macro front
- the Materials & Technology segment should be isolated
- the aim is to give it higher growth prospects
- a future listing is contemplated, albeit not guaranteed
- this could also open the door to a disposal speculation, we believe
- the impact remains small on the group’s scale
- Q1 19 in line with the (good) FY18
- The current year is unlikely to show such a high level of earnings growth.
- Acquisitions will continue, since this is both the group’s model and the sound balance sheet enables it.
- After the great outperformance since H2 18, we expect a more moderate one.
- We’ll revisit our forecasts/valuation, which are probaby slightly too low at the moment.
Sandvik reported FY18 results showing record profits and revenues
Order intake reached SEK102.4bn, +9% yoy change, led by the Mining division, and SEK25.6bn in Q4 18, corresponding to +6% yoy growth.
Revenues reached SEK100.1bn, +11% yoy and SEK25.96bn in Q4 18, corresponding to +9% yoy growth.
The adjusted operating profit reached SEK4,700m in Q4 18, corresponding to an 18.1% margin, and SEK18.6bn in 2018, corresponding to an 18.6% margin.
The adjusted EPS reached SEK2.62 in Q
Sandvik reported a strong set of results in Q3 18 in all metrics: order intake, revenues, EPS and cash flow generation. The positive is that all three business units contributed to the performance and, geographically speaking, all areas delivered growth including China. Therefore, after the market correction, it may be time to reconsider the stock’s attractiveness.
Sandvik reported another strong quarter, including double-digit growth in both order intake and revenue, with growth reported in every area but led by Asia, and in every segment but with a stronger contribution coming from Mining & Rock Technology. Profitability was at record level, with adjusted EBIT at 19.4% of sales corresponding to c.28% growth ex. FX structure and Metals. The weak spot was the FCF generation which was 15% lower yoy due to the anticipated strong demand.
Sandvik reported robust results in Q1 18, including double-digit growth in revenue and a high single-digit growth in orders. These strong volumes led to delivery of record margins of 18%. Materials Technology was the strongest segment due to the improvement in tubulard demand, and China was the other bright spot. The only negative of this report was the poor cash-flow generation due to the negative WCR variation.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Sandvik AB.
We currently have 50 research reports from 3
We think three big themes will govern the next 18 months. Recovery – the settled shape of many supply chains as we exit COVID is uncertain. Online buying and B2C activity has accelerated but also traditional high-street focused B2B distribution channels will recover. Operators are focused on how to respond to a changing and more fluid demand mix; and managing higher costs. Technology – much of the logistics world is still labour intensive and we think there is plenty of scope for efficiency gain
Companies: CLG DX/ WIN XPD
Powerhouse has moved to de-risk potential sources of delay in the key Protos waste to hydrogen project by providing a £3.8m loan to the project. When the company raised £10m in January we expected this to help expedite the project and today’s loan is a practical example of how this funding is benefiting the project.
Companies: Powerhouse Energy Group PLC
Inspiration Healthcare has announced an additional order worth over £1.25m for ventilators to be sold through its Chinese distributor. This new order follows the regulatory approval of the SLE6000 ventilator in China, announced in April 2021, and the £250k order placed at that time. We note that these Chinese orders follow on from the announced Japanese regulatory approval of the ventilator and c£400k order placed at that time. We maintain our Buy recommendation.
Companies: Inspiration Healthcare Group PLC
Complex accounting, made simple.
Following on from our Explainer Note 1, which covered Partner Remuneration, we now investigate the Deferred Consideration entry in the balance sheet. Based on our discussions with investors and the company, this is a point that requires clarification.
By removing this (and other) impediment(s) to understanding Ince's operations and finances we hope that market participants will be better placed to value this company on its many merits and consider only t
Companies: Ince Group plc
Eden Research has announced the signing of an exclusive commercialisation, supply and distribution agreement with leading agriculture input company, Corteva. This follows the successful completion of the previous evaluation agreement. The new agreement sets out the development, regulatory and commercial path, which could see the final seed product launched in time for the 2024 growing season. The two companies will work together to develop this product and further uses of Eden's products in the
Companies: Eden Research plc
Velocys, the sustainable fuels technology specialist has issued (17 May) its FY2020A results to December 2020. Despite the challenges of the pandemic, Velocys has continued to service its clients well and further its development project pipeline, including advancing industry discussions on ‘off-take’. We continue to believe that Velocys is strongly positioned in its market with its proprietary proven and scalable technology, long-term structural/regulatory growth drivers and strong management te
Companies: Velocys plc
c. £241m firm placing at the top of the target range of £190m to £240m at a 17% discount. As expected the raise will be used to reduce the debt and fund investment. This is the final milestone in the group’s strategy. There is no update on trading but as we wrote last month Kier is turning a corner. We show our key placing assumptions. We estimate 6% and 60% FD EPS dilution in FY 21 and FY 22 respectively. We expect net cash at FY 21 and close to average cash neutral in FY 23. TP unchanged at 15
Companies: Kier Group plc
Velocys made strong progress during 2020, beyond what can be seen in relatively flat reported numbers. The delivery of reactors and catalyst to Red Rock Biofuels shows that the company can meet commercial demand, the successful running or the Nagoya demonstration has led to a commercial collaboration and fund raising in the period will allow progress at the two reference sites in the UK and the US.
Invinity Energy Systems plc (IES LN), a UK based Vanadium Flow Battery (VFB) technology company, has today announced that it has entered into a contract with Webcor, a leading Californian construction firm, to provide a VFB for a project developed by Indian Energy LLC, a 100% Native American-owned utility-scale and microgrid development and systems integration firm with approximately 4 GW of solar PV and wind and 6 GWh of energy storage projects under development. This project is located on a US
Companies: Invinity Energy Systems PLC
Despite COVID Directa Plus continues to trade well with revenues of €2.8m for the first four months of FY21 showing the company is on track to exceed our prior full year expectation and we have upgraded our FY21E and FY22E revenue expectations by 4%. Directa Plus has demonstrated material conversion in two key environmental technology business lines which we believe, and demonstrate in this report, each alone justify the current market capitalisation:
In environmental remediation, its unique Gr
Companies: Directa Plus Plc
Directa’s FY20 prelims confirm a year of strong of progress despite the challenges of COVID. Total income of €6.8m and an EBITDA loss of €2.6m are both slightly better than our forecasts and we upgrade FY21 revenue expectations (from €7.5m to €8.2m) to reflect a positive start to FY21; revenue in the first four months increased by 49% year on year. Future prospects look bright with exciting new opportunities emerging in high-potential application areas, notably Lithium-Sulphur batteries.
The group’s 10-month trading update is positive, with the group expecting to exceed FY21 expectations. Trading momentum continues, following its record H1 with strong underlying market demand in new build housing and RMI sectors. It has also seen market share gains and good export sales. The turnaround of Levolux continues, combined with the £2.4m of cost savings gained underpins margin improvement. We upgrade our forecasts for FY21, increasing EPS by 9% to 21.7p. In FY22 we also upgrade EPS by
Companies: Alumasc Group plc
DX has highlighted that trading since the interim results were reported has been stronger than expected. Higher volumes in Freight, driven by new business wins and existing customers, mean sales are now expected to be £10m higher than existing forecasts. DX’s strategy of winning market share supported by superior service levels is delivering, aided by a significant competitor moving away from the irregular dimension and weight market. We have upgraded our FY 2021 EPS by 19% and FY 2022 by 7% (ma
Companies: DX (Group) Plc
Positive revenue momentum has continued, once again driven by the Freight division. Volume growth has come both from existing customers and new business wins. This growth is seen as sustainable, and DX is accelerating its plans to expand its depot network. Management expects adjusted PBT to significantly exceed current market expectations. We raise our EPS forecasts by 17% for the current year. Our recommendation remains BUY, and we raise our DCF-based TP to 40p from 38p.
Checkit reported 23% y-o-y revenue growth for Q122. Normalising for the acquisition of Checkit US at the start of the quarter, group revenue increased 15% y-o-y. Recurring revenue made up 35% of total revenue, up from 32% in Q121 (normalised), as Checkit continues to transition customers to subscription contracts. The company is accelerating investment in sales, marketing and product to drive customer acquisition. Q122 annual recurring revenue (ARR) grew 7% q-o-q and, while early in the year, is
Companies: Checkit plc