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Q4 was another strong beat CEM reported a stronger Q4 with FY EBITDA being 3% ahead of consensus. Net revenues (ex IAS 29) were down by 8% and we estimate this reflects a soft volume development in the quarter. EBITDA (ex IAS 29) closed at EUR 100m with c25% margin in Q4. Stripping out the non-recurring items, we estimate figure was up HSD vs. the recurrent reported last year. Net cash moved from EUR 45.5m in Q3 to EUR 218 at YE. 2024 guidance points 6% lower recurring EBITDA this year The company rolled over its 3Y targets (confirming its LT decarbonisation roadmap) and issued a guidance for this year pointing to c6% contraction in recurring EBITDA (i.e., EUR 385m or 2% lower than cons.) which reflects a lower contribution from Turkey. Looking at 2026, CEM targets. i) 5/6% sales CAGR; ii) c1% growth pa in recurring EBITDA; and ii) EUR 600m net cash at YE 26. Recurring EBITDA fine-tuned. FV range at EUR 12-14/sh We fine-tuned our recurring EBITDA assumptions, resulting in lowering our EPS by c10%/5% for 2024/25e. Our FV range now points to EUR 12-14/sh (vs. EUR 11-14.5/sh prior). Although the ST momentum may weigh on sentiment, valuation remains inexpensive as CEM (at 3.5x 2024e EBITDA) continues to trade at c20% discount vs. EU peers (see Figure 4) having a comparable size.
Cementir Holding Cementir Holding N.V.
Cementir Holding has reported a strong set of results that exceeded our initial expectations. Despite a decrease in volume, the company maintained stable revenue due to increased average selling prices, and improved its margins through an operational cost reduction and its presence in niche markets. The company has raised its guidance, but we believe it to be on the conservative side.
Q3 beat driven by Turkey and Belgium CEM reported a stronger set of Q3 numbers with recurrent EBITDA surprising again. Net revenues (ex IAS-29) were down 7% in the quarter, but volumes improved sequentially with positive development in cement (+1%), almost stable aggregates (-1%), while ready-mix closed down (c7%). Q3 23 EBITDA of EUR 118m grew by c20% chiefly thanks to strong (volume) improvement in Turkey and positive price-cost spread in Belgium. The company closed the first nine months with EUR 45.5m net cash from EUR 11m net debt in Q2 23. Recurring EBITDA guidance increased by 4% On the outlook, the company confirmed its revenues/net cash/capex targets, while it has improved the recurring EBITDA guidance to EUR 380m (vs former EUR 365m). We estimate the new guidance implies a double-digit recurrent EBITDA drop in the last quarter which looks undemanding. During the call, the tone was constructive around pricing with no material disruption, while volumes are showing signs of stabilisation. Estimates increased by 20% and FV upped to EUR 11-14.5/sh With this note we increase our numbers, with our estimates now positioned c5% above the recurring EBITDA guidance. This translates into a more than 22/29% EPS increase for 2023/2024e. As such, our valuation range now moves to EUR 11-14.5/sh. (vs former EUR 10-13/sh.). Although the stock is up c35% YTD, valuation remains undemanding in our view (as share trades at c3x 2023e EV/EBITDA - 30% discount vs EU Mid cap names) and we see room for rerating.
Cementir Holding announced a good set of results, which were in line with our expectations. Despite a decline in volume, the company managed to keep revenue stable thanks to higher average selling prices, while improving its margins thanks to its hedging policy and a presence in niche markets. EBITDA, excluding one-off effects, increased by 34% and the margin increased by 5.6pp.
EPS CHANGE CHANGE IN EPS 2023 : € 1.00 vs 0.85 +17.3% 2024 : € 0.98 vs 0.94 +4.92% Cementir Holding has announced a strong set of results for H1, leading to a significant upgrade in its EBIT guidance. The company has revised its EBIT projection to around €365m, which marks a considerable improvement from the previous range of €335-345m. Cementir Holding's ability to implement robust pricing strategies across all markets has been the key driver behind this significant upgrade. Looking ahead to H2 23, we anticipate price stability at the same level as in H1 23, as energy costs are also stabilising. On this basis, we have revised upwards our estimates, resulting in a positive impact on our EPS.
An impressive print with stronger EBITDA growth in Q2 CEM reported a strong set of Q2 numbers with recurrent EBITDA being above our estimates thanks to favourable price-cost spread development (as seen in the last quarter). Net revenues (excluding IAS 29) of EUR 454m (vs BNPPe of EUR 466m) were slightly down YoY in the quarter with volumes dropping almost double-digit in part compensated by pricing. Q2 23 (excluding IAS 29) EBITDA of EUR 116.8m was stronger than our estimate (BNPPe was EUR105m). Recurring EBITDA (ex-IAS 29) grew by c32% with a strong development across all the regions. CEM closed Q2 2023 with EUR 11m net cash from EUR 32m net debt in Q1 23. Feedback from the call: Guidance upgraded with resilient pricing amid weak demand The company increased its guidance for the year with recurring EBITDA (ex-IAS 29) now seen at EUR 365m, namely a c7% increase vs the mid-point of the former outlook (hinting for DD upgrade in 2023e cons. EPS). This implies a double-digit (c12%) recurring EBITDA drop in H2 due to persistent negative volumes and unwinding of the favourable price-cost spread. During the call, management was confident on pricing resiliency even in context of weak demand, while does not see a significant improvement in volumes in the second part of the year. 2023-2024e estimates increased by 13%/2%. New FV range of EUR 10-13/sh We increased our numbers for the year incorporating the new guidance, therefore improving our recurrent EBITDA forecast by 7% in 2023e and 2% in 2024e-2025e. Based on our new numbers, FV range increases to EUR 10-13/sh (from EUR 9-12/sh). Although share returned 30% YTD, CEM trades at c3.5x 2023e EBITDA and we continue to see current discount (vs the rest of the EU sector) as high and delivery on growth should drive rerating.
With short-term earnings supported by a favourable price-cost spread, CEM is on track to achieve the high end of its 2023 guidance. Additional volumes from Turkey and self-help are medium-term tailwinds, and we see consensus figures as achievable and the discount vs the sector as excessive. 2023e EBITDA growth driven by favourable price-cost spread... In a context of stable volumes, the industry is showing discipline on pricing amid normalising energy costs. Price-cost spread should play out favourably in 2023, with CEM benefitting from the carry-over of the price increase done last year. As such, we see good visibility on LSD (recurring) EBITDA growth, and we sit comfortably at the high end of the guidance. ... while self-help and Turkey reconstruction add visibility to 5% 3Y (recurring) EBITDA CAGR In our view, two factors support CEM''s medium-term prospects. We see upside from Turkey, with regional EBITDA growing double-digit (in 2024-25e), as rebuilding the country brings higher volumes. On top of that, higher capex in 2023-2024e fuels operational efficiencies, with self-help representing c40% of group (recurring) EBITDA growth in 2024-2025e. Estimates fine-tuned. Unjustified discount leaves room for rerating With this report, we take the opportunity to refresh our numbers, fine-tuning our 2024/25e figures. Although the share is up 20% YTD, CEM (at 3x FY23 EV/EBITDA) performed almost in line with the rest of the EU Heavyside sector and the current level of discount (50% vs large caps and 30% vs smaller caps) continues to look excessive. As growth prospects are well supported, we see consensus figures as achievable, and we believe delivery is likely to drive rerating.
Cementir Holding announced a good set of results, in line with our expectations. Despite a decline in volume, the company managed to increase revenue in most segments due to higher average selling prices, while maintaining its margins thanks to its hedging policy and a presence in niche markets. EBITDA increased by 41% and the margin increased by 290bps. The results and guidance for FY23 are in line with our expectations so we won’t be making significant changes to our model.
Q1 23 was better than expected CEM posted a better-than-expected Q1 due favourable price-cost development. Sales (of EUR c.415m - including IAS 29) grew by 14.5% (+9% BNPPe) in the quarter with 20% organic increase driven by pricing as volumes were negative (cement -4%, r/mix -10% and aggregates -18%). EBITDA (of EUR 81.2m vs BNPPe of EUR 62m) grew by 34% and the performance was mainly driven by Nordics/Belgium (+43% and 33% EBITDA in Q1). CEM closed Q1 2023 with EUR 32m of net debt, compared to EUR 95.5m net cash in Q4 22. The FY23 outlook, pointing to EUR 335-345m of EBITDA (excluding the IAS 29), has been confirmed. Price-cost spread should narrow, volumes might improve, energy headwinds should ease The management does not see a reversal of the (negative) volume trend at the beginning of Q2, while stabilisation is more likely in the second part of the year as comps are easier. In the call, management highlighted that uncertainty remains in Turkey due to the elections. The favourable price-cost spread comes from the carry-over of the prices increase done last year. The effects should ease in the next quarters. Energy cost is now a less relevant headwind, and it may be a source of upside and if spot prices stay close to the current levels. 2023-2024e EPS estimates increased by 5%/2%. FV range moves to EUR 9-12/sh We increased our forecasts now assuming MSD volumes decline (vs former LSD) more than compensated by a more favourable price-cost spread development this year. We now position our estimate slightly above the high of the guidance (with EUR 346m reported EBITDA), leading us to increase our EPS by 5% in 2023e and 2% in 2024e. Our FV range now lands at EUR 9-12/sh (vs EUR 9-11.5 before). The stock continues to trade at an almost 40% discount vs EU heavyside peers and we consider this level as excessive.
Price hikes boost the EPS EPS CHANGE CHANGE IN EPS 2023 : € 0.85 vs 0.95 -10.2% 2024 : € 0.94 vs 1.04 -9.91% Cementir Holding reported better-than-expected results thanks to price increases and higher financial income. For the coming years we expect continued organic growth in Nordics & Baltics (43% of sales) where the company has a leading position in white cement, although this will be more limited (4% yoy) as we see a continued decline in volume and Cementir may not be able to hike its prices as in 2022. CHANGE IN NAV € 11.0 vs 9.82 +11.7% Cementir Holding has reported a robust balance sheet, leading to a positive net cash position that has increased our NAV by 12% compared to our previous estimates.
With improving macroeconomics and reduced political noise, we selected four names across the Italian Sponsored Research space - ALMAWAVE, SALCEF, CEMENTIR and LU-VE - that offer a combination of sound growth, potential margin expansion, healthy BS and MandA momentum. Better macro and lower country risk brings Italian Mid and Small caps back on the radar Following a challenging past year for Italian MidandSmall Cap equity performance, a more benign macro backdrop, easing consumer concerns and easing gas supply all add up to opportunity. Four main themes to navigate across our Italian SR universe We identify four main performance driver themes for 2023: structural growth; lower inflation costs; balance sheet health and MandA potential. Four companies stand out for exposure, upside potential: ALMAWAVE - Riding the AI market wave The vertical integration in voice recognition, Natural Language Processing and big data allows Almawave to take advantage of the boom in the artificial intelligence market. MandA comes on top. SALCEF - No end in sight to the (growth) story As a leading vertically integrated player in the railway maintenance and renovation, electric traction, signalling and civil work sector Salcef is poised to ride the structural growth of the industry. CEMENTIR - Resiliency suggests potential valuation catch-up vs the EU heavyside sector The leader in white cement with 75% of EBITDA generated in Nordics/Belgium and the US. At 3.8x 2023 EBITDA, its discount vs EU heavyside (at c.40%) looks high and we see room for a catch-up. LU-VE - Visible growth supported by green cold chain and booming heat pumps Exposed to the cold chain development and the decarbonisation of heating thanks to the HP boom. Attractive valuation vs OEMs/Suppliers exposed to similar growth trends.
CEM CEM LUVE LUVE SCF AIW
Cementir has published better than expected preliminary FY22 results with revenue 13% and EBITDA 6% above our expectations. However, for FY23, the group has guided for a conservative outlook due to an uncertain macroeconomic scenario and announced a new industrial Plan to highlight its commitment to decarbonization.
EPS CHANGE CHANGE IN EPS 2022 : € 0.90 vs 0.81 +10.6% 2023 : € 0.95 vs 0.87 +9.30% We have updated our model following the better than expected preliminary FY22 results. The EPS 2022 is up by €0.09 and the EPS 2023 forecast is increased by €0.08, driven by high price increases leading to 13% higher revenue and 6% higher EBITDA than in our previous estimates. CHANGE IN DCF € 13.7 vs 12.8 +7.29% The strong growth reported this year has enabled an upwards revision to our sales estimates even in a conservative scenario due to the uncertain macroeconomic situation. Since we have increased our 2024 EBITDA forecast, which is the base value for the DCF, the overall valuation has risen, leading to a 5% increase in our Target Price to €11.25.
Stable EBITDA in Q4 translates into 3% beat versus 2022 consensus CEM posted another strong quarter with sales up by 32% YoY (vs BNPPe of +28%) and volumes down MSD (ie cement -6%, RMC -5% and aggregates -7%) more than offset by pricing. EBITDA (EUR 97m including IAS 29) grew by c.1% YoY and it was c.12% above BNPPe mainly due to better volumes. Earnings benefitted from a c.EUR 7m incremental asset revaluation (in Turkey) - not factored in our figure - more than compensating for a higher IAS 29 headwind (c.EUR 5m). CEM closed the quarter with EUR 95.5m of net cash (vs BNPPe of EUR 72m) compared to EUR 29.9m net debt at the end of 9M 22. 2023e outlook implies double-digit consensus EPS upgrade potential Recurring EBITDA for 2023 is guided between EUR 335-345m (ie +0-3%) with flat/negative volumes. The mid-point is 8% above (Reuters) consensus which could trigger double-digit EPS upgrades. The guidance looks reassuring considering that management has historically overdelivered. The 2025e business-plan points to 5/6% sales CAGR with LSD volume contribution and price increases across all the markets. FY25e EBITDA is guided at EUR 400m (vs BNPPe of 341m) with avg. capex at EUR 110m (BNPPe EUR 117m) leading to EUR 500m net cash. It is worth noting that 2025e CO2/t emissions targets have been improved for both grey and white cement vs previous plan. Conf. call feedback: Volumes to improve sequentially. Operational efficiencies underway Management highlighted that 2023 should see weaker volumes in H1 with a sequential improvement during the year. Higher fuel and energy cost should be mitigated by savings on CO2 costs and operational efficiency (especially in Belgium facilities) during the plan. 2023-24e EPS estimates up by c.8%. FV range at EUR 9-11.5/sh Following the release, we increased our EPS estimates by 8% moving our FV range to EUR 9-11.5/sh (from EUR 8.5-10/sh). Share trades at 3.6x 2023e EBITDA, implying 40% discount vs the EU heavyside...
With shares up only marginally in the past 6M, CEM (at 3x EBITDA) missed the rerating of the EU heavyside and now trades at a c.50% discount vs sector. However, we think earnings should prove resilient, thanks to lower inflation and volumes not suffering as much as expected. We thus see room for a valuation catch-up, with the release of the 2023e-25e budget plan on Feb 8 being a key catalyst. What''s new? Lower inflation gives relief in a softer demand scenario 2023 is likely to be shaped by two opposing forces, namely a subdued demand environment and lower inflation (see Dim the lights, respect the heavies). Volumes are expected to remain a drag (due to weaker residential demand) but should not tank this year (as has happened in past downturns). Our country-by-country assumptions now hint at an MSD decline in 2023e and stabilising volumes in 2024e-2025e. With energy and freight costs tracking back from H2 22 highs (see figures 2-3), peak inflation looks behind us, which should provide pockets of margin resiliency. We model stable EBITDA this year, leaving us c.5% above consensus We reassessed the main moving parts of our model (see figure 5) and this implies volumes down, positive pricing (i.e. carry-over of the price increases already made), minor FX headwinds and, most importantly, relief from cost inflation. Net-net, we expect a stable YoY reported EBITDA for 2023e, which positions us c.5% above (Reuters EBITDA) consensus. Overall, this translates into a 7% average increase in our EPS 2023e-2024e. Discount vs sector hints at potential for catch-up We have increased the lower end of our FV range to EUR 8.5 (from EUR 8/sh), while leaving unchanged the upper end at EUR 10/sh. Over the past 6M, CEM has underperformed the EU heavyside sector (see figure 6) missing a part of the most recent sector re-rating. With the shares trading at c.3x 2023e EV/EBITDA, a larger than usual discount vs the sector (50% discount vs 10Y avg. of 30%), there is...
Cementir Holding announced good 9M 22 results, with revenue at €1,258m (+24% yoy), and EBITDA at €238m (+11% yoy). All regions posted sharp increases in revenues which helped partially to offset input cost inflation. It has hedged its fuel requirement for Q4 and has re-iterated its guidance mainly because of the uncertainties brought by the application of IAS 29 in Turkey, in the absence of which the top-line guidance could have been upgraded by 10% at least.
Better than expected EBITDA growth in Q3... In Q3 CEM posted a stronger than expected set of numbers. Net revenues (including IAS 29) were up by +c.30% in the quarter with volumes weakness (Q3 cement -3.3%, RMC -8% and aggregates -13.5%) more than offset by solid pricing. Reported EBITDA (of EUR 94.5m including IAS 29) grew by 16% in Q3 and it was ahead of our number of EUR 79m. By region, we highlight the margin expansion reported in the Nordics which has been a key driver of the better-than-expected operating figure. Net debt closed at EUR 29.9m (vs BNPPe of EUR 38m) from EUR 79.5m in H1 22. ...translate into an undemanding 2022 guidance FY22 guidance (pointing to EUR 305-315m EBITDA pre-IAS 29) has been confirmed. This implies(at mid-point) c.40% (pre-IAS 29) EBITDA drop in Q4, that looks too conservative in our view. Management has not ruled out that performance may be stronger also thanks to the benefits of the hedging strategy in place. During the conference call, commentaries were constructive for this year, while mentioning that the underlying market is slowing, and this should be more visible in 2023e. 2023-24e EBITDA cut by 4% and 8% mirroring a more cautious outlook We have increased our EBITDA forecast for this year (to EUR 325m) now being above guidance. Going forward, we have lowered our 2023-24e EBITDA as we factor in a more cautious outlook (ie LSD decline in volumes in 2023) mirroring a challenging macro scenario. Valuation range now points to EUR 8-10/sh (from EUR 9-12/sh) Based on our new numbers, our DCF now points to EUR 10/sh (from EUR 12/sh). WACC is now at 11.3% (from 10.4%) mirroring CEM unlevered balance sheet. Our FCF methodology now points to EUR 8/sh (from EUR 9/sh) as we have increased the target yield to 12% (from 11%) to be consistent with our building materials team. Trading at c.3x FY23 EV/EBITDA, we believe the share already reflects the risk of a sharp macro downturn. More visibility on volume development is...
Elections confirm polls, with the right-wing coalition winning a majority of seats The Italian elections resulted in the right-wing coalition led by Giorgia Meloni of the Brothers of Italy winning a majority of seats in both lower and upper chambers, though far from the 2/3 needed to change the constitution. The new government will officially start in the week of Oct 10th, and after an initial phase of selecting ministers, it can begin effectively governing from early November. Thus, we may need between two to three months before fully seeing the new government''s actions and the changes to the former government led by Mr Draghi, although these will certainly be significant. Country government spreads have little chance of decreasing by year end; on the contrary, our economists see risk of further increase. Feedback from our marketing trip: cyclical/energy fears overshadow political ones In September we met 25 investors across several countries about our Italian Midcaps Top Picks ( ITALIAN SPONSORED RESEARCH MIDCAPS: Between fear and opportunity in Italian SR ). Unexpectedly, politics was barely the focus, while cyclicality and exposure to energy costs/gas supply issues were prominent. On the latter, we have already screened our coverage, while for the former we have now run a sensitivity analysis based on the 2009 and 2012 crises to see what the most impacted stocks would be if the cycle deteriorates. Based on this analysis, we see less risk of downward EPS revision on Hera, Iren, Ferrovie Nord Milano and IGD in a bear case scenario, while we believe that estimates on stocks like Sabaf, Unieuro, Mondadori may be more negatively impacted in a worsening of the macroeconomic environment. Our list of Top Picks among Sponsored Research include LU-VE, Hera, Orsero, Sesa.
CEM CEM MN MN SAB SAB IRE IRE IGD IGD IF IF HER HER FNM FNM TIP TIP SES SES UNIR LUVE LUVE ILTY GHC WIIT COM SCF ORS AIW
Cementir Holding announced good H1 22 results, with revenue at €811m (+22% yoy), EBITDA at €143.8m (+7.7% yoy) and NI at €66.6m (+39.1% yoy). All the regions posted sharp increases in revenues which helped to partially offset input cost inflation. However, Belgium and Turkey were the key growth drivers with sharp increase in volumes as well (export volume for the latter). Net financial income and equity-accounted income of €17.7m further helped to support profits. FY22 guidance re-iterated.
Cementir Holding announced a good set of results, in line with our expectations. It recorded an increase in revenues in all segments due to a higher average selling price and has been able to manage its margins well, thanks to its hedging policy and presence in niche markets. EBITDA was up by 26%, notably without margin dilution. Since the results and the guidance for the full year are in line with our expectations, we will not make any significant changes to our model.
Cementir Holding has published better than expected preliminary FY21 results with EBITDA 5% above our expectations and at an all-time high level of €311m. However, for FY22, the group has guided for a conservative EBITDA, leaving some room for the end customers to absorb the hike in prices driven by energy cost inflation and rising CO2 costs.
Cementir Holding has published a good set of 9M 21 results. All regions saw a good rally in demand. Denmark was the only region that experienced negative EBITDA growth driven by a low price-cost mix (as prices are updated in Q4) but this trend might reverse from the next year. Management is confident to achieve the set targets for FY21 comfortably. Since the guidance and 9M performance are in line with our expectations, we will not make any significant changes to our model.
Cementir Holding has set an aggressive emission target for 2030, aiming for one of the lowest emission rates in the sector, despite having the highest one currently. However, with the majority of the reduction driven by existing methods, the target looks quite achievable. Additionally, it has guided for a need to buy 600,000t worth of carbon rights/annum, which is a conservative guidance in our opinion. This, along with strong balance sheet, makes it well-positioned to face the carbon-driven challenges of this industry.
Cementir Holding has published its H1 21 results. All regions saw a strong rally in volume sales due to a weak comparison base and the revival/start of some projects. Denmark was the only region that experienced a negative EBITDA growth driven by a low price-cost mix (as prices are updated in H2 rather than H1). Hence, its pricing power in this region still remains unquestionable. Following this result, we will raise our estimates, but to the lower end of updated guidance.
Cementir Holding announced a good set of results, in line with our expectations. It recorded an increase in revenues in all segments due to a weak base and a favourable macro-economic backdrop, except for in the US where, even though it had flat volume sales, revenues were impacted by softer pricing and unfavourable FX. EBITDA was up by 49.4% due to a recovery in the Belgium, Denmark and Turkey. Since the results and the guidance for the full year are in line with our expectations, we will not make any significant changes to our model.
Cementir Holding has published its detailed FY20 results. Denmark observed a significant margin improvement due to a favourable price-cost mix, and the effects of investments in sustainability and digitalisation. Turkey and Egypt saw a sharp increase in activities, with Turkey even reporting a positive EBITDA this year. While EBIT was in line with our expectations, profits were up by 17% due to lower taxes and the higher valuation of derivatives. The group has re-iterated its guidance and proposed a dividend of €0.14/share.
Cementir Holding has published better than expected preliminary FY20 results with revenue 4% and EBITDA 13% above our expectations. The positive surprise is mainly from the strong performance in the Mediterranean and land revaluations which completely offset the one-offs recorded until Q3. Along with the guidance for FY21, the group has provided an updated Industrial Plan 2020-23, which revolves around the same pillars as the Industrial plan 2019-22, but has more aggressive targets.
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