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Volume growth back in Q4 as expected SAB released its FY23 numbers which were broadly in line with consensus expectations. Q4 sales (ex IAS-29) increased by c.6.6% at constant perimeter, closing at EUR c63m, likely on DD volume growth and negative pricing (pass-through of lower costs). Reported EBITDA (ex IAS-29) was EUR c8m (+36%) and adj. for start-up costs increased by c42%. Growth was driven by increasing volumes triggering 170bps of reported EBITDA margin expansion (or c280bps adj.) vs las
Companies: Sabaf (SAB:BIT)Sabaf S.p.A. (SAB:MIL)
BNP Paribas Exane - Sponsored Research
OEM outlook hints at stabilising demand this year... Last week, Electrolux (+) and Whirlpool (not covered) released their outlooks for 2024. Changes in Whirlpool''s reporting structure makes its outlook for EMEA (60% of SABAF sales) less relevant. The OEMs expressed a slightly different degree of confidence, though both are more constructive vs 2023. Net-net (see figures 1-2), Whirlpool points to LSD growth (with stronger H2), while ELUX had a more cautious tone, guiding for flat demand. Togeth
With the share having suffered the effects of destocking, we believe SABAF is at a turning point. Volume recovery and normalising profitability should seal 20% net income CAGR and improving momentum support rerating. End of destocking hints at a visible rebound in 2024e-2025e The combined effects of slowing demand and excess inventory make 2023 a tough year for SABAF. That said, our analysis shows that there is room for a rebound in appliance shipments as (temporary) destocking comes to an end.
Lower volumes put pressure on margins in Q1 In Q1, SABAF posted soft start to the year. Sales (at EUR 58.1m) were down by 18% (at constant perimeter -20% vs BNPPe -17%) mirroring mainly a volume decline. We note that the comparison base is tough as Q1 22 was a strong quarter (+9%). Reported EBITDA (at EUR 6.5m) dropped by c.50% with the margin declining by c7pp. Earnings suffered from IAS29 and start-up costs for plants worth c.EUR 0.6m. The gap vs our estimate (of EUR 10.8m) was due to lower vo
Q4 22 results still affected by destocking as expected SABAF''s FY results were broadly in-line with our and cons. estimates. In 4Q 22, sales declined 18% YoY (-22% at constant perimeter) with pricing only partially compensating for volumes (20% down BNPPe) and still significantly impacted by destocking. By region, we note strong outperformance in North America (+30% in FY) where SABAF gained share. EBITDA dropped 33% YoY (vs -26% BNPPe) and the margin came in at c.13% (-310bps YoY) which was up
Lower profitability with declining working capital boosting FCF SABAF posted a weaker than expected PandL but better than expected FCF generation in Q3. Revenues dropped by c.11% in the quarter (vs -17%e) with pricing and FX partially mitigating the effects of declining volumes (c.20% BNPPe). By region, we saw a better-than-expected performance in North America (+17%) and Turkey (-5%). However, profitability in the quarter was lower and this was mainly the result of declining production volumes.
Q3 industry datapoints indicate a tough H2 22... In recent weeks the main large domestic appliance operators (i.e., Electrolux and Whirlpool) have released their Q3 numbers. The message from the earning season was clear, with demand under pressure and cost inflation peaking. Weakness was evident across developed markets, which have worsened sequentially. EU appliance shipments were down -15% YoY in Q3 22 (-10% in Q2), while the US drop was -13% YoY (vs -9% in Q2). ...with demand weakness that 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 ne
Companies: SAB LUVE FNM IRE MN SES HER AIW IF TIP FNM IRE GHC CEM IGD WIIT COM SAB IF UNIR SCF CEM ILTY MN LUVE IGD TIP HER SES ORS
Research Tree provides access to ongoing research coverage, media content and regulatory news on Sabaf. We currently have 9 research reports from 2 professional analysts.
The FY24 year-end update is very upbeat signalling trading being materially ahead of expectations, with a better-than-expected profit out turn and stronger cash generation. It continues to strengthen margins through efficiencies and investment in modern equipment. The order book remains close to record levels providing a robust view of future forecasts. In FY24E we upgrade EPS by 11% and in FY25E a significant upgrade of 27.6%. It looks capable of declaring a dividend in FY25 as well as manageme
Companies: Renold plc
Cavendish
Companies: BILN ELCO NXQ CUSN ATG
Another Good Year of Diversified Growth with More to Come in 2024 CCapital have released their Q1 operating results. Overall, revenue has come in slightly lower than expected at $80.2m vs TamE of $85.9m but is largely tracking in line with our FY24 annual estimate and we note the company has maintained guidance. Drilling revenue for this quarter was impacted by a fall in utilisaztion rates as well as general remobilisation geographically but we expect a strong recovery throughout the year as k
Companies: Capital Limited
Tamesis Partners
FY23 results show very strong growth over FY22, driven by strong Structural Steel activity, with results slightly ahead of upgraded profit expectations, while stronger than expected cash flow resulted in an unexpectedly generous dividend of 33p (offering a FY23 yield of 7.0%). The group now has net cash of £22.1m and is debt free and is therefore in a strong position for potential M&A activity. Following the recent £90m of new orders to increase the order book to record levels we conservatively
Companies: Billington Holdings Plc
Plant Health Care announced it has signed a distribution agreement with AMVAC, an American Vanguard Company, to support commercialisation of novel fertiliser products incorporating Plant Health Care's Harpinαβ in China starting in 2024. The novel product combines Harpinαβ technology with an AMVAC fertiliser and is expected to help growers improve crop quality and yield as part of an integrated and environmentally responsible crop production programme. AMVAC continues to evaluate Plant Health Car
Companies: Plant Health Care PLC
Companies: 88E RNO TRIN KRM EXR BOOM
discoverIE’s March year-end update confirms a strong operational performance in challenging markets. Following two years when sales increased by +48%, FY 2024 Group sales were +1% ahead of 2023 at CER (reported -3%) driven by a +2% contribution from acquisitions and organic -1%. As expected, organic growth returned in the later part of the year (Q4 +2%, +11% sequentially) and the order book has reverted to normalised levels of c.4.5 months’ sales, which – combined with a continuing strong pipeli
Companies: discoverIE Group PLC
Severfield’s trading update indicates that FY23 results are expected to slightly exceed market expectations and the company ends the year with a record UK and Europe order book. Furthermore, with a positive trading outlook and net debt coming in lower than expected, Severfield has announced a £10m share buyback, highlighting the cash-generative nature of the company and management’s confidence in its position. The stock trades on an FY25 P/E of less than 6x and yields 7%, which we believe appear
Companies: Severfield Plc
Edison
Companies: Iofina plc
Canaccord Genuity
Companies: PLL TLG HZM SAV KAV KP2 SVML
SP Angel
Acquisitions have been an important element of Severfield management’s growth strategy, with the aim of adding new products, sectors and regions to what we have identified as exciting long-term organic opportunities. In this Spotlight report, we focus on the group’s targeted M&A approach, highlighting three significant deals.
Progressive Equity Research
Liberum
Invinity’s update on discussions with strategic investors reveals interest from multiple parties. While this has slightly delayed finalising an agreement it increases the potential for a better outcome. Although details are unknown at this stage, we think there is enough in the statement to be comfortable that any agreements will be consistent with the company’s strategy of growing market share in core markets and using a licencing and royalty model in other markets.
Companies: Invinity Energy Systems PLC
Longspur Clean Energy
Severfield’s full-year results to March will be ‘slightly above’ the Board’s expectations, according to today’s trading update, with net debt significantly better. We maintain our PBT estimates for both forecast years, which are ahead of consensus, but reduce our net debt for FY24E. Record orders were boosted by the steel specialist’s European operations, after last year’s Voortman acquisition, while the Indian JV has seen ‘another step up in profitability’. The group has also launched its first
Companies: ATOME PLC
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