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INDUSTRIA DE DISENO TEXTIL
INDUSTRIA DE DISENO TEXTIL
Always living up to promises
14 Dec 16
The market momentum remains always favourable for Inditex. The growth pace was maintained in Q3 with an 11% surge in sales over the first nine months (+11% in H1) to reach €16.4bn. The strengthening euro has hit the performance only mildy as the sales increase amounted to 14.5% in local currencies. Margins have retreated slightly due to a 90bp slump in the gross margin (57.9%). EBIT was up 9% to €2.8bn, i.e. an operating margin of 17.2% vs. 17.5% a year earlier. Net income came to €2.2bn (+9%). The financial structure remains solid with increasing net cash from €5.1bn in October 2015 to €5.7bn in 2016. The positive momentum is confirmed in early Q4 with sales surging by 16% (in local currencies) up to 12 December. Global expansion is well on track in both physical stores and online. The group operates 7,240 stores in 93 markets.
21 Sep 16
The largest global retailer outperformed with 11% sales growth in H1 16 to reach €10.47bn. Forex moves have slightly halted the performance as sales in local currencies were up 16%. Organic growth remained strong at 11%. All the group’s brands experienced favourable momentum with a marked outperformance for Zara’s home concept which grew by 17% to €343m. The regional breakdown of revenues remained flat, where Europe contributed 60% to revenue and Asia less than 25%. The gross margin retreated by 1.3ppt to 56.8% bringing the gross profit to €5.9bn (+9%). EBITDA amounted €2.1bn, 7% higher than in H1 15. EBIT rose by 8% to €1.6bn. Net profit was up 8% to reach €1.26bn. The strong operational performance preserved a solid financial position with 13% surging net financial cash at €4,923m and a marked low debt level (€127m). WC remained almost flat at €-2,176m vs. €-2,239m a year earlier. The downstream expansion is ahead of schedule with 83 net openings in 38 markets, bringing the distribution network to 7,096 stores in 91 markets. Online sales are well on track. The start of H2 16 is promising as sales in local currencies have increased by 13% from 1 August to 18 September 2016. A final ordinary dividend of €0.30 per share will be payable on 2 November.
Growth well on track
15 Jun 16
Q1 16 sales were up by 12% to €4.9bn, held back partially by currency moves as the performance in local currencies was 17%. In Q1 16, Inditex consolidated its presence in 31 markets with 72 new openings, leading to a network of 7,085 stores by the end of April vs. 6,746 a year earlier. The platform expansion, both physical stores and online, raised operating costs by 10% and lowered the gross margin by 130bp yoy to 58.1%. EBITDA increased by 7% to reach €955m, leading to an EBITDA margin of 19.6% vs. 20.5% in Q1 15. EBIT amounted to €705m (+6%). Net profit increased by 6% to €554m. The strong operational performance sustains the solid financial position with a high cash position and low debt level. Net financial cash came to €5bn compared €4.1bn in Q1 16. The operating working capital was €-2bn. Q2 16 started in good shape as sales surged by 15% in local currencies up to 13 June. The Board will propose an annual dividend of €0.6, of which an interim dividend of €0.3 has already been paid to shareholders.
Immune from slowdown
18 Dec 15
The nine months’ sales grew by 15.7% yoy to €14,744m through 6,913 stores across 88 markets, i.e. a net channel expansion of 136 new stores in Q3 15. Europe contributed 47.4% to the nine months’ sales, followed by America at 20.4% and Asia & the rest of the world at 32.2%. Profitability was as guided with EBITDA increasing by 18% to €3,328m. EBIT amounted to €2,583m, drawing a net profit of €2,020m, i.e. 20% growth. Gross cash increased from €3,626m in October 2014 to €4,982m a year later.
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.
N+1 Singer - Morning Song 12-01-2017
12 Jan 17
As anticipated, the second half has again been stronger than H1 and results will be broadly in line with expectations. In line with this, the order book has continued to grow and is at record levels. This confirms that significant progress has been made in the Group’s shift towards its Technology Products division which, as targeted, contributed c.60% of group revenue in FY16. The small acquisition of Cable Power also gives a complementary boost to the product range. It is also worth noting the significant reduction in net debt, £1.0m ahead of our forecast. We remain supportive of the Group’s strategy and continue to see a bright future as this transition towards a design led technology solutions business continues. We look forward to more detail in March at the final results.
Retain forecasts for FY17E and FY18E
05 Oct 16
While LFL sales growth of 1.8% for the first 12 weeks of FY17 looked a little light, this was on the back of 2.8% growth in the prior period. H2 comps become easier to lap and Christmas bookings (festive trading comprises 15% of FY sales on average) are up 10% YoY.
The Monthly January 2017
09 Jan 17
Despite all the hullaballoo of the Brexit vote and the subsequent election of Donald Trump as the next US President, the UK stock market prospered last year, especially in the latter few months of 2016. The combination of a depreciating currency – making $ earnings more valuable in relative terms - and the Trump emphasis on infrastructure expenditure drove the stock market higher
A year of expansion
17 Jan 17
Final results are broadly in line with our revised forecasts on most headline levels in what proved to be a difficult year for the Group. That said, it has significantly increased room capacity, which is now +40% ahead at the time of the IPO (+14.5% yoy), which improves its competitive position and offering. We are maintaining our headline forecasts, and with the dividend expected to be held for the foreseeable future producing an 8.7% yield with a NAV in excess of 180p, we continue to believe there is strong long term value offered at present.
N+1 Singer - Best Ideas 2017 - Top picks
04 Jan 17
Today we publish our Best Ideas for 2017 - 12 stocks that we believe have excellent prospects in the current year together with a detailed discussion of what we see as the key sector and market themes for 2017. Our top picks are Cineworld, Elementis, Herald Investment Trust, Hill & Smith, IQE, MySale, Redde, ReNeuron, RhythmOne, SDL, Servelec and Severfield.