Essity reported a marginal miss vs the consensus, although beating our profit estimates. While cost inflation continued to persist, the first effects of recent price increases buffered the margin impact.
Essity announced a longer-term growth target of 5%+, underpinning an ambition to move to faster growth categories. All in all, an encouraging update barring the marginal top-line miss. However, we do not expect any significant changes to our estimates due to the limited visibility on plans to
Companies: Essity AB Class B
Essity reported mixed Q2 21 numbers. Sales were up 9.5% on an organic basis, driven by a 26.1% rise in Professional Hygiene sales and 12.7% increase in personal care. As expected, the adjusted EBITA margin contracted 1.5pp to 11.8%, hurt largely by the steep increase in raw material and energy costs.
We will reduce our estimates, given the challenging raw material headwinds, which should lead to higher margin pressures in spite of the strong top-line recovery in the pandemic-hit segments.
Essity reported poor Q1 21 numbers, missing estimates. Sales were down 9.9% on an organic basis, hurt by a 27.5% decline in Professional Hygiene. Adjusted EBITA margin contracted 2.7pp to 13.1%.
Essity also announced an agreement to acquire an incremental 44% stake (total stake at 94%) in Colombian firm Productos Familia (market leader in Feminine care, incontinence and consumer tissue in the Colombian market) for ~SEK 5.72bn.
We will reduce our estimates, given the softer than expected showin
Essity reported strong Q4 20 numbers, beating consensus estimates with an organic revenue decline of 0.5%, attributable to the decline in professional hygiene (-15.1%), which was partly offset by growth in consumer tissue (+5.6%) and personal care (+2.2%). Adjusted EBITA came in at SEK4.39bn with the margin at 14.2%.
Essity proposed a FY20 dividend of SEK6.75/share and upgraded its long-term ROCE target to above 17%. However, we do not expect any significant change to our estimates, due to the
Essity reported a weak Q3 20, as sales declined by 5.1% owing to a 21.4% contraction in professional hygiene. The adjusted EBITA was down 1%, with the margin at 14.4% (+160bp). In addition, the Board proposed a dividend of SEK 6.25, having earlier postponed the decision. Essity also upgraded its longer term adj. ROCE target to 17%, which will benefit from the online transition as well as incremental efficiency improvements. Factoring in the big decline in professional hygiene, we will be trimmin
Essity announced a muted Q2 showing, reporting a sales decline of 9.3%, driven by a 9.4% decline in personal care and a 30.7% decline in professional hygiene. This was partly offset by Emerging Markets driven growth in consumer tissue (+4.3%). In spite of the sales decline, the improved product mix and lower raw material costs helped increase EBITA by 1.3% (associated margin +1.7pp). Given the softer-than-expected Q2 performance, we will be trimming our estimates.
Essity announced a strong set of Q1 numbers. Sales were up 7.8%, organically, to SEK33.7bn, with back-loaded growth (19.7% in March). The volume-led growth (+5.9%) as well as continuing drop in input prices resulted in a 5.4pp EBITA margin expansion, which drove an 87% increase in net profit.
However, we do not expect any significant changes in our estimates, as we believe the pull-forward effects should only have a phasing impact rather than driving a meaningful increase in overall sales.
Essity remains well positioned to exploit secular growth trends in the health/hygiene space. Backed by a very robust cost structure in place, we believe the company will continue to leverage the expected strong volume growth to sustain its current earnings momentum.
Essity reported Q4 19 organic growth of 3.6% with consumer tissue leading with +4.9%. Regionally, emerging markets delivered another strong quarter (+6.6%). Adjusted EBITA came in at SEK 4.7bn (margin 14.1%). The company proposed a final dividend of SEK 6.25/share.
On the cautious side, the company announced price cuts in consumer tissue Europe, effective Q1 20. However, we do not expect significant margin pressure and foresee no meaningful change in our estimates or target price.
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The market (and FDEV) is projecting an ambitious step-change in financial performance in FY 22 and FY23. Investors however may recall that Elite Odyssey updates have been delayed. For a variety of reasons, we believe there is some residual risk of disappointment here. Hence, we prefer to sit on the side-lines. Buy
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Mixed feelings following the Q3 results: the maintained FY margin guidance reassured in the current inflationary environment, but the Q3 volume decline raises questions about the trade-off between pricing and volumes.
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Zytronic’s pre-close update confirms a considerable turnaround in performance in H2. Whilst partially flagged in the September update, the full year outturn is better than expected, driven by a significant improvement in sales (+44% H2 versus H1) and careful cost control. Operating profit of £0.5m is comfortably ahead of our break-even forecast and net cash of £9.2m is £1m ahead. Although mindful of industry supply chain issues, we consider the recent run rate a sensible guide for FY22 and intro
Companies: Zytronic plc
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Future Metals NL (ASX:FME, FME.L) (formerly named Red Emperor Resources NL) had joined AIM
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Companies: Accrol Group Holdings plc
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Arrow Exploration Corp. (AIM: AXL ; TSXV: AXL) , the oil and gas exploration and production company, has conditionally raised approximately £8.8m and is due to complete its dual listing on AIM on 25 Oct. Market cap c£13.1m.
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Accrol has issued a trading update confirming that cost pressures both from input and distribution costs has intensified over recent weeks echoing trends we have seen in other industries. Revenue pressures have also built as fulfilment becomes more challenging. These headwinds are reflected in our downgrade to EPS forecasts of 37.4% and 18.3% in FY22E and FY23E respectively. Over the long term we continue to believe Accrol is a strategically important asset with a key position in a resilient mar
Solid State is a manufacturer of computing, power and communications products, and value added supplier of electronic components. This morning, the group has released a robust update covering the six-month period to 30 September 2021, with the Willow and Active Silicon acquisitions performing ahead of management expectations. The order book as at the end of September stood at a record level of £61.5m, an increase of 48% since the beginning of the financial year and leading to the Board's confide
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Reckitt Q2/H1 21 numbers missed estimates. Q2 sales declined 1%, hurt by slowing Hygiene growth (+7.8%) and weaknesses in Health (-5.6%) and Nutrition (-9.7%). H1 sales were up 1.5%, driven by Hygiene (+18.1%). The adjusted operating profit margin (-290bp to 21.6%) was hurt by steep rise in input prices.
FY 21 guidance (0-2% growth, 40-90bp margin contraction) was re-iterated (ex-IFCN China incremental margin offset by cost inflation). We will cut our estimates to factor in the soft growth/marg
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The group has announced an encouraging half-year update, with a strong increase in revenues profits and order book seen. Unsurprisingly, there have been some supply chain challenges, although these have also resulted in customers placing longer-term orders thus giving the group better visibility as well as necessitating higher levels of stocking. Management indicates it is confident of achieving market FY expectations, with the potential for some upside in H2 dependant on component supply chain
Victoria has issued a positive half-year trading update that confirms underlying profit before tax for FY2022E will be ahead of consensus market expectations. Against a background of strong consumer demand for its flooring products, the first half has seen record operating earnings. Management expect this demand picture to continue into next year and beyond with the added support from the high level of housing transactions which is a good lead indicator of future refurbishment activity. Septembe
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discoverIE’s trading update confirmed that performance in H122 was ahead of board expectations, with organic revenue growth of 15% y-o-y and 8% versus the pre-COVID H120. Despite supply chain challenges, the company maintained gross margins. Q222 order intake continued in the same strong vein as H221 and Q122, resulting in a record order book entering H222 and driving a small upgrade to our FY22 and FY23 forecasts.
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