Acciona: Portfolio streamlining to continue
Acciona’s shares have been hit once again post Q3 results (-6% vs -1% of IBEX) by higher than expected working capital outflows (Eur -160m in 3Q17, Eur -547m in 9M17), with Acciona stating that this was due to the lack of major pre-payments on large construction contracts. We now assume flat working capital until the end of the year, in line with company guidance, which has a negative impact of Eur 4.3/sh on our FV. Despite this disappointment we do not expect a deterioration in working capital in 2018 as WC of construction now seems to be above the long-term ratio to T12M sales. The worse than expected WC is however mostly offset by the sale of Trasmediterranea at a value well above our previous valuation. We believe that Acciona will continue to crystallise value and streamline its business portfolio which adds further to our view that the company is a good vehicle to invest in renewable assets at an attractive valuation. We reiterate our Silver Bullet BUY rating with a revised FV of Eur 87/sh (Eur -1/sh than before).Acciona is the parent company of a construction group. Co. is engaged in general construction activities in the areas of civil engineering and buildings, including railways, marine and hydraulic works, motorways and airports, town planning, conduits, pavements, parking lots, and industrial and urban buildings. In addition, Co. is engaged in the provision of real estate services, the operation of parking lots, telecommunications, services, ecology and alternative means of energy. Co.'s operations are organized in six business divisions: Infrastructures, Real Estate, Energy, Water, Environmental & Urban Services and Logistic & Transport Services.
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