Alfen Better than expected results, A move in the right direction
Alfen reported revenue growth of 10% y/y to € 246m well above expectations (KBCS: € 231m, CSS: 240m). Gross profit margin decreased from 30.5% in 1H23 to 28.9% in 1H24, after the expected one off costs gross profit margin was with 22.3% (KBCS: 25.3%, CSS: 24.1%) weaker than expected. However, adjusted EBITDA at € 13.5m significantly above our and CSS forecasts of € 12.2m. Furthermore, did they obtain a temporary waiver for 3Q24. A strategy update in 4Q24 can be expected which will be used for covenant negotiations. Finally, the appointment of Onno as permanent CFO is definitely the right step to restore some trust. We expect a positive share price reaction due to the closing of short positions, while trust remains low at an attractive fundamental valuation. We maintain our Target price of € 24 and Accumulate recommendation.Alfen NV (Alfen) is a company based in the Netherlands, engaged in the design, development and production of electric grid equipment. The Company is active in three business lines: Smart Grids, which supplies standardized electricity grid connection systems, secondary transformer substations, local power grids, devices for grid automation, as well as software and back-end systems for remote management and grid control; Energy Storage, responsible for development and installation of modular energy storage systems under the brand TheBattery, which are used by utilities, grid operators, energy traders and industrial companies, among others, and Electric Vehicle (EV) Charging, which supplies EV charge points in a variety of capacities and functionalities for use at home, work and in public areas. In addition, Alfen offers service, management and maintenance activities, including remote support and monitoring, as well as an in-house technological know-how center.
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