Alten: H1 2018 results above expectations, free cash flow down, outlook reiterated
Alten: (BUY, Fair Value EUR100 (+15%))H1 2018 results above expectations, free cash flow down, outlook reiterated
Yesterday evening Alten reported H1 2018 results above our estimates and consensus -, with a flat operating margin despite several headwinds such as a CICE tax credit decline, less working days and investments in the sales team. Free cash flow was down 45% due to a rise of 6 days in DSOs. Finally, the outlook is positive for 2018, with management is guiding for c. 10% lfl sales growth for the full-year. We consider the share price may react a bit negatively in the short-term due to free cash flow.
Alten is a holding company. Through its subsidiaries, Co. operates in three areas: Engineering and Technology Consulting (ETC), Telecoms Networks and Multimedia, and Information Systems (NTIS). Through the Engineering and Technology Consulting (ETC) segment, Co. studies and designs technology products for technical divisions in industry and telecoms. The Telecoms Networks and Multimedia segment focuses on Product design, Architecture, deployment, and operation of networks. Lastly, the IT systems segment comprises Applications and software development, and Infrastructure and Telecoms (Applications, systems and networks Corporate telecommunications).
Since 1996, Bryan, Garnier & Co has been growing with an absolute conviction that the investment banking landscape would experience a major revolution: most of the large local generalist banking groups will disappear to the benefit of a handful of global powerhouses, and an emerging group of independent, highly specialised boutique investment banks.
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