EUR 200.00 For Business Accounts Only

Wirtualna Polska: Advantage in diversification

We keep WPL at a BUY and lift our FV to PLN 67.9 (from PLN 63.2) on the back of 2%/5%/6% upgrades to our 19E/20E/21E EBITDA forecasts coming from: (1) a better than previously expected WPL growth profile thanks to its leading position in major online verticals. Improved ad viewability and big data have allowed more efficient ad spending and made WPL an internet group of choice for advertisers. Superior organic growth dynamics in ecommerce coupled with recent acquisitions means that ca. 52%/38% of 2018PF revs/EBITDA is ecommerce driven, which is positive as ecommerce, unlike online ads, is less cyclical and driven by local factors and thus helps protect WPL against any potential slowdown; (2) we update our model for the recent acquisitions of SuperAuto24 and Terpolan. 2018 has been a very successful year for WPL with 23% top-line growth YoY and EBITDA at 29% YoY driven by a mix of strong continuous organic growth in ecommerce (except from fashion which struggled a bit due to unfavorable weather), an acceleration in online ad growth (as a result of an ad viewability improvement), a recovery in TV driven by higher TV audience share and new acquisitions. We expect 1Q19 to continue to show an optimistic outlook with revenues at PLN 153m, +30% YoY and EBITDA at PLN 39m, +22% YoY. On our updated numbers WPL trades at a 19E EV/EBITDA of 9.7x and P/E of 17.4x, 22%/3% discounts to global internet/ecommerce peers.