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Mixed results in Q3: SSI/BS strong, VAD weak; margins strong, FCF less so SESA reported mixed Q3 results. The SSI and BS divisions grew strongly at 21% and 43% respectively, confirming SESA''s strategy to focus on higher value-added businesses. Weakness in the VAD division (-3%) could be temporary as some projects may have been delayed. As in H1, EBITDA margin stayed stable at 7.5% (up 20bps YoY) thanks to the BS division margin expanding to double digits (vs 6.8% in Q3 23). Net debt was EUR66m
Companies: Sesa (SES:BIT)SeSa S.p.A. (SES:MIL)
BNP Paribas Exane - Sponsored Research
Strong growth coupled with a new high for margins - operating guidance range confirmed Sesa reported a strong Q2 23/24 with organic growth at c. 7.5% (+13% reported), versus c. +11% in Q1, despite a tough basis of comparison. As in Q1 23/24 reported growth was particularly strong across the various divisions with VAD at +10%, SSI at +19% and BS at +26%. Group EBITDA margin expanded strongly to 7.9% in Q2 23/24 versus 7.2% in Q2 22/23 thanks to very strong margins in the BS division (17.6% in Q2
Strong organic growth remains in Q1 with margins holding up well In Q1 24 (ended in July) Sesa posted an organic growth of c. 11% (15.9% YoY growth reported) despite the Italian IT market cooled down in the last months mirroring a continuous increase of share and the resiliency of SESA business model made by recurring sales for 40% of group sales. The reported sales growth was +13.6% in the VAD division, +20% in SSI and c. +53% in BS division. EBITDA margin was 7.2%, slightly ahead of Q1 22 (7.1
FY23 results broadly in line with of our estimates Sesa reported an EBITDA of EUR209.4m in FY23 (BNPPE EUR206.4m), margin of 7.2%, with sales growth of 21.7% to EUR2.908bn. The BS division was the main driver of the surprise as it achieved 12% margin on a full year basis. Q4 sales increased by c18% driven by a strong SSI (+31%) and BS (+44%), while VAD slowed sequentially (+10% vs 21% in Q3). EBITDA margin expanded by 40bps (to c. 7.2%) thanks to SSI and BS more than compensating for a margin di
From GenAI fears to GenAI opportunities? After initial fears of GenAI disruption, we have seen companies fighting back, and stocks bouncing back. After Google/Alphabet, ServiceNOW and Adobe, could it now be the turn of the IT services vendors? Investors had been concerned that coding co-pilots would generate deflationary pressure on IT pricing. However, Accenture has already started to shake off the GenAI cloud, and Capgemini could be next. In our view, SESA could follow, given its significant u
Another solid quarter of strong organic growth and good margins Sesa posted another solid set of results, with Q3 sales growth at c. +18% (organic +10%e) and strong growth in VAD division (+21%), SSI (+18%) and the BS division (+36%). Group EBITDA margin was close to 7.4% in Q3 2023. This was the result of a 5.3% margin in VAD (30bps higher than in H1), 12.1% in SSI (in line with Q2) and 7.1% margin in BS (vs 8.8% in H1). Net cash was EUR177.8m in Q3 23 (vs EUR189.5m in Q2 23). Guidance slightly
Q2 23 results show acceleration of organic growth and solid margins As in Q1 23, Sesa reported a strong set of results, with sales growth of +33% in Q2 2023 thanks to 32% growth in VAD, +23% in SSI, +60% in BS. This corresponds to a further acceleration of organic growth (20% versus mid-teens in Q1 23). Group EBITDA margin was almost 7.2% in Q2 23, with VAD at c. 5% margin, SSI at c. 12.1% and BS at c. 9.1%. Net cash was EUR189.5m in Q2 23 vs EUR208.3m in Q1 23, in line with the seasonality of t
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
Strong Q1 with organic growth surprising positively Sesa reported solid Q1 22/23 results, with organic sales growth at c. 15% (reported +21.2%). Growth was strong across the board, with VAD at +21.6%, SSI +18.3% and BS +33%. EBITDA margin stood at 7.1% (7% in Q1 21/22) and EBITDA grew by 23.7% to EUR47.6m. This result was driven by the VAD division, whose margin was 5% (vs 4.5% last year), while SSI had a 12.5% margin (40bps lower YoY) and BS declined margin from 12.5% (Q1 21/22) to 8.5% in Q1
Though macro fears are looming, we also find opportunities. Of the 18 stocks we cover under Sponsored Research (SR) agreements, we have selected four companies to navigate the next few months: LU-VE, Orsero, Hera and Sesa, offering a combination of structural growth, no/low gas/energy risk, cheap valuation, upside to consensus and specific catalysts (MandA or self-help). Gas price is the key issue in Italy - screenings With natural gas and electricity prices being the biggest concern impairing
Companies: 0QHK 0RQV HER LUVE HER SES ORS
Mixed results from Q4 - strong top-line growth but margins are impacted by investments In mid-June Sesa already reported group sales at EUR2.39bn (+17.3%) corresponding to an organic growth of c.+6.3% according to our estimates. This corresponds to double digit organic growth in Q4. The VAD division posted high single digit organic growth in Q4 22 which corresponds to +25% on a reported basis thanks to PM service (digital green) which reached EUR150m revenues in FY22). The SSI grew by +21% in Q4
Companies: SeSa S.p.A. (0QHK:LON)SeSa S.p.A. (SES:MIL)
Q3 results are sound thanks to the energy segment Sesa reported sales growth of 11.8% in Q3 2021/22 fiscal year (corresponding to c. 3.5% organic sales growth according to our estimates). The VAD division grew by c. 10% (organic growth LSD as most of the growth was in the digital green business) while SSI division by 17% (organic double digit) and Business Services by c. 26% (all driven by MandA). EBITDA margin remained at 7.1% in Q3 in line with H1, mirroring still 110bps expansion vs Q3 20/21
Growth accelerated further in Q2 21/22 with margins still good Sesa reported organic sales growth of 13% in Q2 (vs HSD in Q1). Including MandA, group sales growth was 20.5%. The acceleration was driven by the VAD division, whose growth rate accelerated strongly both organically and on MandA. The Business Service division accelerated as well. EBITDA margin was 7.2% in Q2 (vs 7% in Q1), supporting good operating leverage at the central level as divisionally the margins did not expand compared to
Italy''s leader in SSI and VAD markets, SESA is growing fast by partnering with mid-sized corporates in Italy and abroad to manage their digital transformation, as well as through MandA. With end markets accelerating, sales mix improving and margins expanding, we see 16% EBITDA CAGR in 21-25. Digital enablers to outgrow the industry and drive margin expansion and 20% EPS CAGR Digital enablers (SSI/BS, c.50% of profits) should grow double-digits until 2025 as customization of complex IT servic
Research Tree provides access to ongoing research coverage, media content and regulatory news on SeSa S.p.A.. We currently have 5 research reports from 2 professional analysts.
AFC has made strong progress with products and its manufacturing strategy. Despite heavy investment, the cash position, at £27.4m, was slightly better than our estimate for £26.9m, demonstrating good discipline. The monthly cash burn rate (at c. £1.3m) is tracking in-line with our expectations. Generally, we maintain our estimates for significantly increased sales in FY24e and FY25e, with the cash position unchanged. Recent news on commercial progress has been positive. The 30kW H-Power Generato
Companies: AFC Energy plc
Zeus Capital
Spectra Systems (SPSY) has an excellent record in growing profits through its highly regarded technology and relationships with key clients, which include a prominent global central bank. Now, the company is ready for the next stage, and we see the acquisition of Cartor Security Printers as a game-changer in enhancing its ability to continue, and potentially accelerate, this momentum, even as it continues to benefit from a near-term, multi-million-dollar sensor refresh programme with a long-term
Companies: Spectra Systems Corporation
WHIreland
The group’s year-end update flags trading ahead of expectations, achieved by strong growth in its Systems division, with the earlier than expected delivery of a NATO contract just prior to the year-end that pulls forward profit into FY24 making it a record year. Components continue to see a normalisation of orders and slower demand as previously flagged. Order cover is strong and further opportunities in the defence/security sector are leading to investment in Integrated Systems capabilities. Re
Companies: Solid State plc
Cavendish
2023 was a challenging year for Tandem, with cost-of-living pressures impacting demand for many of the group’s products. This led us to downgrade our forecasts several times during the year (including in December), and today’s results are largely in line with those revised projections – revenue -17% YoY to £22.2m and an adj. LAT of -£1.0m (our forecast of -£0.9m). FY24E looks more positive, however: economic pressures are easing for consumers (inflation is falling, interest rate cuts are expecte
Companies: Tandem Group plc
Today’s trading update confirms FY24E profitability above the top end of previously guided range, with positive trading momentum building into FY25.
Companies: Revolution Beauty Group plc
Companies: FOG TND BVXP ACC HDD
Solid State is a specialist value added component supplier and design-in manufacturer of computing, power and communications products. This morning, the group has provided a trading update for the year ended 31 March 2024, reporting the earlier than expected delivery of specific contracts within its Systems division and resulting in the group's FY 2024E revenue and PBT outturn anticipated ahead of our forecasts, with a commensurate decrease in our FY 2025E estimates. The delivery of these contr
Encouraging FY23 results from SPSY this morning show profits and cash a touch ahead of expectation and position the company well for a year of strong growth in FY24E. SPSY leads the market in machine-readable high speed banknote authentication, brand protection technologies and gaming security software. The company grew the business robustly in FY23 (PBTA +6%, EPS pared by increased tax payments, progressive DPS), building on a decade of double digit CAGR; and closed the year with the transfor
Liberum
Companies: LPA SOLI NANO QTX
Finals from the leader in machine-readable high-speed bank note authentication, brand protection technologies, security printing, and gaming software, in line. FY23’s stand-out feature was December’s acquisition of Cartor Holdings, the security printing business. As discussed at the time, this has moved Spectra’s Fusion polymer substrate proposition substantially forward, strengthens its competitive position and provides access to state of the art manufacturing facilities. Extending up the suppl
Allenby Capital
While revenue fell short of expectations due mainly to self-tan weakness, progress on margins, cost synergies and efficiency enabled BAR to deliver a reduction in H1 losses. While growth and profitability in other high margin brands has progressed, Skinny Tan trading is not expected to improve until next year. With synergy benefits having mostly annualised, lower sales forecasts impact the timing of the inflection to profit. We now assume losses both this and next year, albeit net cash is mostly
Companies: Brand Architekts Group plc
Singer Capital Markets
Companies: Portmeirion Group PLC
Shore Capital
Dowlais Group’s first set of results were ahead of our expectations, with positive cash generation a highlight despite restructuring and demerger costs. Softer automotive markets will limit margin progress in FY24 towards the double-digit target. Despite this, margins of c 6.5% are still ahead of automotive peers, although the shares trade at a significant discount to our implied generic peer-based valuation.
Companies: Dowlais Group PLC
Edison
Companies: IG Design Group plc
Canaccord Genuity
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