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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.
Watkin Jones’s guidance for FY24E is unchanged in its trading update for the first half to 31 March. We maintain our forecasts for the full year and introduce half-year estimates, in line with reiterated guidance that performance will be significantly H2 weighted. The group confirms a continuing gradual recovery in appetite among institutional investors to forward fund its build-to-rent (BTR) and student developments. We believe this should gather pace as the direction of interest rates becomes
Companies: Watkin Jones Plc
Progressive Equity Research
Ceres Power Holdings’ innovative technology uses electrolysis to produce green hydrogen and solid oxide fuel cells to generate power. In a year where it moved to the Main Market of the London Stock Exchange, it recorded revenue growth of 13% and gross margin expansion to 61% (the highest in the sector, according to management), but is yet to record an operating profit (FY23 operating loss of £59.4m versus £54.0m in FY22). Ceres continued its strategy to drive innovation and technology across sol
Companies: Ceres Power Holdings plc
Edison
Banquet Buffet*** Abingdon Health 9.25p £11.3m (ABDX.L) The lateral flow contract development and manufacturing organisation announces its unaudited interim results for the six months ended 31 December 2023. Revenue increased 117% to £2.4m (H1 2023: £1.1m). The Adjusted EBITDA loss decreased 47% to £1.2m (H1 2023: £2.2m). Furthermore, reduction in operating loss of 50% to £1.2m (H1 2023: £2.4m). The Board therefore expects that H2 2024 revenue will be significantly improved compared with H1 2024
Companies: CPX SLP FA/ FIPP ECR ETP ORCA
Hybridan
AFC has unveiled a groundbreaking modular ammonia cracker system demonstrating viable and scaleable production of hydrogen in the UK using this method. The cracker system is designed to deliver 140 tonnes of fuel cell grade hydrogen each year. Hydrogen from the plant will initially be targeted for sale into AFC’s UK H-Power Generator deployments, including those with Speedy Hydrogen Solutions. Along with the recent purchase of the mobile storage and distribution assets of Octopus Hydrogen, AFC c
Companies: AFC Energy plc
Zeus Capital
Sanderson Design Group (SDG) continues to deliver on its key strategic initiatives and growth drivers despite a challenging global backdrop. The group’s FY23 performance showed flat revenue, with adjusted underlying PBT rising £0.1m to £12.6m. Net cash dropped back to £15.4m, with the total dividend maintained at 3.5p. The star performers were Licensing (reported revenue +25%), the Morris & Co brand (+16%) and the US market (+20%). Our forecast revisions assume more modest sales progression, wit
Companies: Sanderson Design Group PLC
Solid State’s trading update affirms the sustained strength in demand throughout H224, resulting in record FY24 revenue and adjusted PBT ahead of prior consensus of £155m and £12.5m, respectively. This is attributable to the earlier-than-expected delivery of a NATO contract. As a result, consensus FY24 revenue and adjusted PBT estimates have been raised by c 6% and c 20%, with respective FY25 estimates declining commensurately.
Companies: Solid State plc
17th April 2024 * A corporate client of Hybridan LLP ** Arranged by type of listing and date of announcement *** Alphabetically arranged **** Potential means Intention to Float (ITF) has been announced Dish of the day Admissions: Delistings: What’s baking in the oven? ** Potential**** Initial Public Offerings: Reverse Takeovers: 16 April 2024: Electric Guitar (ELEG.L) Concurrent with its Admission to trading on AIM, Electric Guitar is proposing to acquire the entire issued share capital of 3radi
Companies: ARS TIDE SCE SNX ECK CNS TST SPEC SSTY
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
Gooch has issued a positive update for H1. Trading has started to recover with stocking levels normalising at industrial and medical devices customers. The outlook is positive with growth returning, and management has confirmed our full year estimates (adjusted for the disposal of EM4). The order book and order flow appear healthy, and net debt is comfortable. Gooch clearly still has plenty to do to lift operating margins from a lacklustre 8.1%, but the transformation plan appears to be back on
Companies: Gooch & Housego PLC
We note the regulatory announcement this morning from Surface Transforms and withdraw our estimates and valuation, pending conversations with management.
Companies: Surface Transforms PLC
Surface Transforms has issued new revenue guidance for FY24, with the company now expecting revenues in the range £17.5-22m. We are withdrawing our previous forecasts for FY24 and withdrawing our price target while we review the impact of the new guidance.
Cavendish
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
Sanderson Design Group (SDG) has reported an 8% increase in interim adjusted PBT, to £6.8m. This was achieved despite a weak backdrop in the home UK market and a 2% decrease in overall group revenue. Increased profitability was driven by strong performances in two of its key and higher-margin strategic growth pillars – Licensing and North America – which grew by 82% and 10%, respectively, on a reported basis. New product launches, including Disney Home x Sanderson, have seen sampling running at
Sanderson Design Group has delivered its full-year trading update to 31 January 2024. Group revenue has eased back 3.1% to £108.5m on a reported basis, following the 2% decline in H1. The strongest performances were delivered by the strategic growth cornerstones of Licensing and North America, offset by challenging market conditions in the UK, Europe and the Rest of the World. A strong balance sheet saw year-end cash rise to £16.2m, compared with £15.4m at year-end FY23. Having traded in line wi
SCE is raising £16m through a placing (and up to a further £3m through open offer) to fund substantial expansion and additional working capital. This will enable the Group to grow to £75m revenue capacity in the near term, commence the build and equipping of a new factory and then (with internally generated free cash flow) scale to £150m revenue capacity and beyond. With a contracted order book of £190m and a prospective pipeline of £400m, this is clearly the time to seize the opportunity. The e
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