Event in Progress:
Discover the latest content that has just been published on Research Tree
Sika has published better than expected Q1 21 results with double-digit organic growth observed in all segments. The performance was particularly strong in the Americas, which benefited from volume growth driven by large-scale refurbishment and new-build projects in connection with distribution and data centres. The company has confirmed its 2023 strategic targets, but we believe that the organic growth in 2022 will be beyond the 10% guided by the company.
Companies: Sika AG
AlphaValue
Sika published a good set of FY21 results, but slightly below our expectations. It registered sales growth across all markets, and slightly above our estimates, but the EBIT margin was shy by 60bp and net profit by 2%. Management proposed a dividend of CHF2.9, in line with our estimate.
After successfully closing the integration of the Parex business, Sika has announced its next big acquisition. Valued at €5.2bn, MBCC will be Sika’s largest acquisition to date. The purchase price represents an 11.5x EV/pro forma 2022E EBITDA, which is a cheap buy for Sika which trades at 21.9x EV/EBITDA. The transaction will be highly complementary across nearly all of Sika’s core technologies, applications and solutions and will bring Sika’s sales to nearly CHF13bn by 2023 (vs CHF9.4bn in 2021
Sika published a good set of 9m results with sales up by 18.1% in local currencies and 18.2% in CHF. The America region, China and India continue to show strong demand momentum but the same cannot be said for the EMEA region. The Global segment too is suffering from the semiconductor shortage but Sika was able to manage its top-line figures via frequent price increases and the EBIT by better cost management.
Sika published better than expected H1 results with a positive sales growth observed across all segments. Sales growth in Europe, due to the strong residential renovation trend, came as a surprise, while the strong rally in APAC was expected. Following the good set of result, the company has updated its FY21 guidance. We too have revised our estimates upwards, but it did not have a significant impact on the target price.
Sika has published better than expected Q1 20 results with organic growth observed in all segments. Once again Sika’s acquisition of Parex turned out to be fruitful, being visible by the double-digit organic growth observed in China. Following the strong performance, especially in Europe and APAC, the company has raised its full-year targets. We have revised our numbers upwards.
Thomas Hasler will succeed Paul Schuler as the CEO from May 2021 and, therefore, FY20 was the last full year in the current CEO’s reign. The FY20 results were a good farewell present to him, with growth in all regions despite the pandemic, a significant increase in the EBIT margin, and successful completion of the integration of Parex, which was the biggest acquisition carried out by him. Sika has proposed a dividend of CHF2.5/share and re-confirmed its 2023 strategic targets.
Sika has released preliminary FY20 figures with a growth of 3.4% registered in local currency but strongly dragged down by negative FX (-6.3%). The company, however, outperformed the market expectations by announcing stronger margins (Sika expects the EBIT margin to be ~14% vs AV est. of 13.3% and consensus 13.5%).
Sika has published a good set of 9m results with sales up by 2.6% in local currencies. However, it saw a strongly negative currency effect of –6.0%, resulting in an actual sales decline of -3.4%. The best performer was the APAC region which posted growth of 13.9% in local currencies and 8.3% in CHF and the improvement in Global Business was a positive surprise. For FY20, management has provided guidance of lower sales but an EBIT in line with FY19 figures.
Companies: SIKAN 0Z4C SIKA SIKA SKFOF
Sika published its H1 results which were better than our expectations with a positive sales growth of +2.9% in local currencies supported by the acquisition effect of +13.4%. The EBITDA margin was almost flat. For H2, management is confident of seeing positive organic growth. The 2023 strategic targets are still intact. We will be revising our numbers upwards.
Sika has demonstrated strong growth of 15.4% in sales in Q1 20. This growth was backed by increased pricing, the acquisition effect of Parex, and the late impact of COVID-19 in the Americas and Europe. The company is implementing significant cost-saving methods to deal with the current situation, yet it has dropped its 2020 guidance pertaining to the uncertainties. The 2023 guidance is still intact. Our minor tweaks in the model following this release do not change our recommendation.
The FY19 results were in line with our expectations and the company has reiterated its 2023 targets. Management is confident about 2020 despite the Coronavirus fears in China, and believes that it will be able to achieve 10% growth 2020. It has further confirmed that a big M&A is a possibility as the Parex integration is almost over.
The group has announced its FY19 sales up 14.4%, with organic growth contributing only 3.3%. All regions showed growth with APAC being the strongest. Through five acquisitions, the group has laid the foundations for continued growth. It has set Strategy 2023 where it seeks to grow by 6-8% each year upto 2023. It is also aiming a higher EBIT margin of 15-18% in 2021 while, according to our estimation, it was ~13% in 2019.
Following this earnings release, we will increase our sales forecast and leave unchanged the margin accretion. This will result in a higher target price by some 5-12% depending on our other changes in assumptions.
Sika registered a solid H1 19 but this was mainly thanks to acquisitions as the organic growth was at its lowest level over the last three H1s, with +3.1% vs +6.8% in H1 18 and +5.7% in H1 17. But the disappointing fact is the change in wording about the guidance, which is somewhat a negative. Overall, we will increase the target price by 5-10% in order to switch back to a Buy recommendation, as Sika remains our top pick.
Research Tree provides access to ongoing research coverage, media content and regulatory news on Sika AG. We currently have 22 research reports from 4 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
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
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
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
Share: