1Q 2017 results a negative surprise
Reported 1Q17 results do not compare well with the guidance and are likely to surprise negatively. Sales declined –5% (derma –9%), total revenues increased +5% underpinned by milestone payments. Gross margin to sales fell from 70% to 65%. EBITDA was unchanged from a year ago and EBIT fell –13%. The PBT and Net profit fell –33% and –10%, respectively. Cash flow from operations fell from +€51mn a year ago to –€42 (explained by the operating results and a change in OWC/12-mth sales from –6% to +1%).
Although the company mentions that the results are in-line with its internal estimates, the guidance given at the 4Q16 results call was of low to mid single digit growth for sales and total income and mid single digit growth for EBITDA. The company maintains this guidance but now hints at a weak first half and a recovery in the final half.
We continue recommending to Buy with a target price of €17.50.
Almirall is engaged in the acquisition, manufacture, storage, sale and mediation in the sale of pharmaceutical specialties and products and all manner of raw materials used to prepare pharmaceutical specialties and products. Also, Co. acquires, manufactures, storages, sales and mediates in the sale of cosmetics, chemical, biotechnological and diagnostic products for human, veterinary, agrochemical and food-industry use, as well as all manner of utensils, complements and accessories for the chemical, pharmaceutical and clinical industries. In addition, Co. is engaged in the acquisition, sale, lease, subdivision and development of land lots, land and properties of all kinds.
Bankinter S.A. is a Spanish brokerage firm established in 1989. The company's line of business includes the provision of market research and trading services for Equity and Fixed Income products.
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