Business structure proving a competitive advantage

An outstanding set of results, slightly ahead of our estimates Orsero posted a strong increase in Q1 2022 YoY: sales +9.9%, adj. EBITDA +28.1%, adj. EBIT +46.2%, net profit +74.3%. The net financial position reached EUR-73.8m vs EUR-84.3m, as at the end of 2021. The main drivers were: higher average selling prices in the distribution sector (on the negative side it is worth mentioning some headwind in volumes, mainly due to avocado, citrus and stone fruit) and higher freight rates and volumes i

Rock-solid 2022 guidance - MandA on the horizon

Q4 2021 results a tad higher than expected - shipping drove the performance Orsero posted a sound set of results in Q4 2021: revenues +11% YoY; adj. EBITDA +21%; adj. EBIT +87%; net income +675%. FY results were a tad higher than both the company guidance and our estimates. The main driver of this positive performance was the shipping division, which posted a good +72% YoY increase in terms of EBITDA in Q4. The net financial position reached EUR -84.3m vs. EUR -75.1m as at the end of Q3 2021. O

Inflation resistance with a freight-rate flyer

As a leading player in the import and distribution of fresh fruits and vegetables in its reference markets, Orsero should take advantage of potential inflationary pressure and a better product mix. On the shipping activity, the group is poised to ride the wave of high freight rates in 2022 and 2023. Disruptions to sustain high freight rates We disagree with the common optimism that the worst has passed. Our analysis continues to suggest disruptions are intensifying. We expect demand for conta

A rosier 2022 ahead

Mixed results in Q3 due to a shift in campaigns, guidance confirmed The company posted mixed results in Q3 2021 YoY, mainly due to a shift in campaigns from Q3 to Q4 in comparison to 2020: revenues +3.0%, adj. EBITDA -3.2%, adj. EBIT -6.5%, net profit +19.3%. The net financial position reached EUR -75.1m vs EUR -91.4m as at the end of H1 2021. Even though Q3 EBITDA was down YoY, 9M figure remained up YoY (+6.6%) and is consistent with the FY guidance confirmed by the company: revenues EUR 1.04/

Freight rates category: And the winner is... Orsero

Freight rates expected to rise markedly over the coming quarters In our recent report SUPPLY CHAIN DISRUPTION: Your freight is sealed we detailed our expectations for freight rates. The consensus at present seems to be that freight costs will pull back in 2022, primarily driven by the belief that supply chain disruptions will ease. Given that our analysis of supply chain disruptions suggests the opposite, we consider it highly likely that freight costs will rise further during the year ahead.

A small acquisition in distribution in Italy

Gaining share in the marketing of national agricultural production Orsero has acquired a 50% stake of the share capital of Agricola Azzurra S.r.l. (''Azzurra''), a company active in wholesale distribution of fruit and vegetables of Italian origin (mainly citrus and vegetables). Orsero''s investment is aimed at developing a JV dedicated to national agricultural production, thus strengthening its position as a reference player for the mass distribution sector. A fair 5.1x EV/EBITDA valuation for

Debt guidance improved, visibility and MandA optionality

Q2 down YoY, H1 still up YoY, debt guidance improved The company posted decreasing YoY results in Q2 2021 mainly due to a tough comparison base related to the increase in volumes linked to the first wave of the pandemic in Q2 2020: revenues -2.5%, adj. EBITDA -9.3%, adj. EBIT -30.3%, adj. net profit -33.3%. Net financial position reached EUR-91.4m vs EUR-103.3m as at the end of Q2 2021. Even though Q2 results were down YoY, H1 remained up YoY in terms of margins and are consistent with the FY g

Visible growth in 2021, supported by inflation

A strong set of results in Q1 2021, ahead of our estimates Orsero has posted a strong increase in Q1 2021 YoY, above our expectations: revenues were almost flat YoY, while EBITDA, EBIT, and net income were up by around 45%, 121% and 171% respectively YoY. The main drivers were: a more remunerative product mix, with bananas down YoY, offset by higher volumes for avocados, mangos, kiwis and grapes; higher average selling prices and thus higher margins for import and distribution; lower contribut

Fruit of labour

A leading player in Southern Europe in fresh-food distribution, vertically integrated and with a supportive context, Orsero is on the hunt for MandA opportunities in value-added niches. Its growth in size ought to favour a large-scale combination with another player in the future. A leading vertically integrated player in a steadily growing fresh-food distribution market Orsero''s leading position in its reference markets has let it benefit from their steady growth. The context remains favo

Better placed to tackle the forthcoming headwinds

Tesco’s Q1 trading performance was a mixed bag. The UK and ROI retail business was softer than expected but overall sales were stronger than our estimates. Wholesale business Booker and Central Europe led the pack. The company witnessed market share gains in almost all geographies. However, management has accepted that cost pressure is posing a challenge. The annual profit outlook has been maintained. We will trim the financial estimates slightly.

Delivering Operational Excellence

Decent closure to the year; tougher times ahead!

Sainsbury’s preliminary FY21/22 results were in line with the street expectations. The lfl sales came in at -2.3% yoy, as the positive momentum in clothing was offset by weakness in grocery and general merchandise. Management’s profit guidance for FY22/23 is weaker than the consensus. We expect the retailer to continue with the cost savings plan and reinvest a portion to remain competitive, especially among the big four players. We will be trimming our FY22/23 estimates.

Walmart Inc. - Investment Thesis, Key Drivers, Financial & Price Forecasts, DCF Valuation 8/21

Walmart had another rock solid quarter with a revenue growth of 7.6% in constant currency and a staggering 24.1% growth in operating income at constant currency. Moreover, Walmart Connect, their advertising business in the United States, more than doubled in size as compared to the prior-year quarter, with more than 170% growth in active advertisers. The management provided a series of interesting updates with respect to various innovative initiatives. Their latest investments aim to increase as

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