Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on HERA SPA. We currently have 7 research reports from 1 professional analysts.
Frequency of research reports
Research reports on
From a weak top-line to a strong EPS performance
10 Nov 16
Hera has published its 9M 16 results with revenues falling 3.1% yoy to €3,105m, but EBITDA increased by 1.6% yoy to €650.6m, operating profit rose +3.8% yoy to €329m, pre-tax profit rose 9.5% yoy to €239.1m, and net income increased by +13.8% yoy to reach €142.2m. On the revenue side, lower revenues were affected by the downward revision of the WACC and lower commodity prices. However, a margin improvement has been achieved through lower gas imports and reduced costs in commodity purchases, which increased EBITDA levels. Moreover, lower provisions in relation to landfill have boosted the operating profit, while lower financial expenses due to lower debt and financial costs (-2.5% yoy) and higher income from associates have supported the pre-tax profit increase (+9.5% yoy). In the end, a relatively flat tax payment, which implies a lower tax rate, and lower minority interest have helped net income to reach double-digit growth.
Resilient performance with bottom-line double-digit growth, despite lower allowed WACC
28 Jul 16
Hera has provided strong half year results despite revenue falling 2.7% yoy to €2,152.7m, mainly driven by lower revenues on regulated services due to regulatory changes and lower volumes sold due to mild weather. However, EBITDA increased by 2.4% yoy as margins improved due to lower material and operating expenses. Along the same path, a slight decrease in depreciation levels pushed operating profit towards a 5.1% yoy increase, reaching €257.4m. In addition to this, lower financial expenses and a decrease in minority interests have boosted the bottom-line performance with a 12.8% yoy increase in net income to reach €121m. Net debt has fallen by 1% ytd to €2,624m, mainly due to a similar decrease in outstanding debt.
Strong bottom line despite negative impact from regulatory changes; waste underperforms
11 May 16
Hera has provided weak revenues as they decreased 5.8% yoy to €1.23bn, missing market expectations. However, a 13.4% yoy decrease in COGS has stabilised the EBITDA to €278.4m (+0.4% yoy), while a 12.6% decrease in financial expenses and a 4.8% fall in minority interest have boosted the net profit to €91.2m, a 5.3% yoy increase, beating expectations. Operating cash flow continues on its strong trajectory as it increased by 35% yoy due to an improvement in working capital, which was used to cover the 13% increase in investment and higher than expected debt payments. The financial structure continues in its positive trend as equity improved 3.73% ytd, while net debt has been reduced 5.6% ytd, pushing the gearing to below 100% (0.96x). All planned targets and strategies of the company have been confirmed.
The positive trend continues supported by a diversified approach
23 Mar 16
The group has provided a positive set of results for 2015, but within expectations. Revenues increased 6.7% yoy to €4,817m, slightly above expectations. EBITDA was in line with expectations at €884.4m, representing a 1.9% yoy increase. Nevertheless, a 3.7% yoy increase in depreciation and provisions meant EBIT remained near the previous year’s level at €442.2m (+0.2% yoy), which is lower than forecasts. Despite this, an 8.7% decrease in financial expenses and a 7% decrease in taxes (with a decrease in the tax rate from 41% to 36%) have allowed attributable net profit to increase by 9.5% yoy to €180.5m, while on an adjusted basis, net attributable profit reached €188.1m, corresponding to a 15.4% yoy increase which is slightly better than expected. Higher income from associates and JVs and a decrease in minorities due to the full acquisition of Romagna compost and Akron have positively affected net income. Net debt remained relatively stable at €2,652m, which is better than expected, as operating cash flows remained strong despite negative working capital change, but was still able to finance fully capex, dividend payments and part of the multiple M&A operations and minority buy-backs. A dividend of €0.09/share has been proposed. Guidance is maintained within the scope of the 2016-19 business plan presented in January.
2016-19 business plan revealed: growth, efficiency, and M&A
12 Jan 16
The group has confirmed its growth strategy, mainly to reinforce the network part of the business, backed by the following points to be achieved by 2019: • €1.03bn in EBITDA (an additional 1% increase compared to the previous objective and a 4.5% CAGR); • Capex and financial investment €2.2bn (5% increase); • Net debt/EBITDA ratio of 2.9x; • To achieve at least 2.3m energy customers. The new business plan includes the integration of the lower regulatory WACC revised under the new parameters for the model (a decrease of €25m in EBITDA): +Water 5.3% (-70bp), Gas distribution 6.1% (-80bp), and electricity distribution 5.6% (-80bp)+, as well as the reduction in renewable subsidies for electricity generation (-€30m in EBITDA). Adjusted for both expected reductions, the new business plan includes an additional 6.7% growth in EBITDA from its previous objective. The dividend policy is unchanged with a floor of €0.09 per share (minimum) under a 70% payout ratio. However, if the results are better than expected, the dividend policy may be revised.
Strong cash flow generation fully covers additional acquisitions
12 Nov 15
The group continues on its positive path, confirmed by the 9-month results, as revenue increased to €3.25bn (+8.5% ytd), with EBITDA increasing by 2.2% ytd to €640m, below the increase in sales due mainly to the upward move in raw material costs (+18%). Operating profit increased by 1.4% ytd to €317m as depreciation expenses increased by 2.9%. Attributable net profit reached €125m, which is a 12.5% increase mainly due to lower taxes and lower interest expenses; however, on an adjusted basis net profit reached €135m (+8% ytd). Net debt remained stable at €2.64bn.
Time to go over weight
24 Feb 17
We believe equity investors are taking an unnecessarily cautious stance on the construction sector. Forward looking indicators (e.g. consumer confidence, construction PMIs and housing starts) point to a stable market and recent sales LFL are particularly encouraging (e.g. Marshalls). Near term margins may suffer temporary distortions as inflationary pressures build. However, history has shown that modest input cost inflation is actually a positive for earnings growth in the sector. Therefore, as we move into 2018, margin trends are likely to surprise on the upside.
N+1 Singer - Waterman Group - Robust performance, mid-term ambitions reiterated
28 Feb 17
As trailed in the recent half year update, Waterman’s interims are in line with the prior year and in line with expectations. Both divisions recorded a robust performance despite some market uncertainties in the immediate aftermath of the EU referendum. Full year expectations are reiterated as is the medium term aspiration to increase operating margins to 6% by FY19 from 4.1% in H1’17. We see good growth opportunities in a number of areas, particularly Infrastructure & Environment, with robust conditions also in Property within retail and residential. In our view, Waterman’s shares look significantly undervalued on 4.5x FY17 EV/EBITDA compared to peers on 6.9x. We also note the attractions of a c.5% dividend yield, +33% at the interim stage.
N+1 Singer - Morning Song 22-02-2017
22 Feb 17
CORETX (COR LN) Contract wins and new Lifestyle facility | Gooch & Housego (GHH LN) Solid Q1 trading plus earnings enhancing acquisition of StingRay Optics | NCC Group (NCC LN) Further issues in Assurance | PCI-PAL (PCIP LN) Strong H1 underpins positive outlook | UBM (UBM LN) Results | Verona Pharma (VRP LN) Phase IIa RPL554 add-on trial to tiotropium commenced
N+1 Singer - Morning Song 23-02-2017
23 Feb 17
Genus (GNS LN) Interim results: R&D step-up, disappointing ABS performance | Howden Joinery Group (HWDN LN) Prelims and net cash better than expected but conditions weaken | Oxford Pharmascience Group (OXP LN) Encouraging interim OXPzero™ Ibuprofen exploratory PK data | StatPro Group (SOG LN) Increased majority shareholding in Infovest Consulting | Wilmington Group (WIL LN) Interims slightly ahead, move to focus on 3 verticals
N+1 Singer - Small-cap quantitative research - New quality style screen + 11 quality focus stocks
09 Feb 17
We introduce our fourth and final style screen representing “quality”. This screens for stocks with the best combination of high returns on capital/equity, EBIT margins and operating cash-flow conversion rates. These criteria should help us monitor how strong underlying returns translate into share price performance over time and under varying market conditions. The screen selects the “best” 25 stocks from our universe of just over 500 stocks and, as usual, we focus on a shorter list of stocks we cover or otherwise know and believe to be particularly interesting. We provide brief investment summaries on these focus stocks on pages 4 – 9. We will monitor performance and refresh the screen in approximately 3-4 months time.
The Slide Rule
12 Jan 17
What is The Slide Rule? The Slide Rule has been designed to dramatically simplify the identification of the best companies in the UK small/mid-cap sector by making a quantitative assessment of the relative potential of each company. At its core, The Slide Rule aims to identify those companies that create genuine shareholder value through strong returns on capital and solid growth, but also present a value opportunity with the potential tailwind of earnings momentum. Companies are assessed within a Quality, Value, Growth and Momentum (QVGM) framework.