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An excellent performance of the holding in difficult market circustamces. Agro, however, makes the biggest difference taking account of half of the EBITDA. For the full year, we can still expect an EBITDA higher than that of last year, which was already a record.
Companies: Picanol NV
Seven years after the first (failed) merger attempt between Picanol and Tessenderlo Group, the CEO and owner of both companies, Luc Tack, is trying a second time.
In essence, daughter Tessenderlo (50.65% owned by Picanol) will acquire mother Picanol by issuing new shares. For each Picanol share, shareholders will receive 2.43 shares in Tessenderlo, valuing Picanol at around €72.29 per share. A bit of an opportunistic offer, but no surprise knowing Mr. Tack’s nose for a good deal.
The group had an extraordinary year with record revenue, EBIT, EBITDA and free cash flow. The Agro segment and M&T especially contributed to this result. As we are accustomed by now, literally almost all of the €113m free cash flow (excluding working capital effect and one-offs) was used to buy Rieter and Tessenderlo shares. Therefore the dividend had to remain a puny €0.2 per share. 2022 is set to have EBITDA below the 2021 level.
An impressive organic growth in the Machines & Technology segment lies behind the very strong H1 results. The free cash flow generation is already higher than full-year 2020 and is certainly off to set a new record for the full year. The outlook for 2021 is rather cautious with +10% EBITDA growth, nonetheless above our own estimate and this will result in a very minor increase in the target price.
Mr. Tack and Mr. Haspenslagh, both members of the Rieter Board and key people within Picanol (10% equity stake in Rieter), may have used inside information to counter offer the acquisition of Swiss Saurer.
Rieter now wants to eliminate both Board members and will file a claim.
We are moving Picanol to a Holding-type of company. The trigger was the latest minority stake of 10% in Swiss Rieter which revealed or confirmed more the intentions of Mr Luc Tack (90% owner of Picanol) to use Picanol as an investment vehicle.
The results for 2020 landed above our expectations thanks to a strong H2 in the Machines & Technologes segment. All in all, a very strong year with figures that make it hard to believe there was a pandemic going on… the bigger the reason for disappointment due to the lack of a dividend proposal.
An impressive performance by the group but completely driven by the strong growth in Tessenderlo. The outlook for 2020 is for a better adjusted EBITDA than the year before thanks to a strong demand in Agro and Bio-Valorisation.
Lower than expected revenues (-3% yoy), a waning underlying EBIT margin, and net income backed by Tessenderlo’s contribution. Anticipated headwinds for 2019 due to a slowdown in the global weaving machine market (25% expected drop in H1 19 revenues).
Over H1 18, the eroded profitability of Picanol has been saved by the higher contribution from the equity-accounted Tessenderlo Group.
Despite an improved top line, the group’s profitabilty in 2017 was eroded due to rising commodity prices and to the lower earnings of Tessenderlo.
The Picanol Group reported consolidated revenues of €364.7m in H1 17, i.e. an 11% increase compared to the first half of 2016. This is a notable rise fed by a 10% increase in revenues of the Weaving Machine division to €316.3m and a 15% rise in revenues of the Industries division to €100.4m.
Picanol managed to place a record number of weaving machines on the market in H1 17, thanks to the success of its new range. Increased demand for technology and quality, mainly from Asia, filled the group
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Forecast and target price update
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