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31 Oct 2023
Good Pasta figures
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Good Pasta figures
- Published:
31 Oct 2023 -
Author:
Ruiz Francisco FR -
Pages:
11
Better numbers, especially in Pasta
Despite the volatile scenario in terms of raw materials and the harvest, Ebro beat consensus estimates, with stronger numbers in Pasta. In the Pasta division, despite the weaker volumes in France and tough comparison, the lower durum wheat prices and better mix allowed EBITDA margin to rise above 14%. For rice on the contrary, heat waves during summer negatively impacted the European harvest, which also impacted EBITDA margin.
De-stocking has started, while Capex will remain high
The company has started the process of reducing stocks after two years of higher than usual levels. In Q3 the company reduced working capital by EUR135m, and this process could continue for at least two more quarters. With some delays in the capex plan, the company expects Capex for 2023 and 2024 to be c.EUR140m, mainly driven by capacity increase for value added products.
FY23 guidance slightly above consensus
As with every 9M publication, Ebro has guided for its FY23 EBITDA. EBRO expects EBITDA to be between EUR372m-EUR378m, which is 2% above consensus before publication. We adjust our figures on higher margins for Pasta, keeping cautious growth for 2024 given the uncertain scenario in volumes and pressure from food retailers. We upgrade our TP to EUR18 (from EUR17.5).