S&T 1Q 20 - Mastering a challenging supply chain and more M&A ahead
S&T's 1Q 20 results increased yoy on the back of IT Services and IoT Europe growth as well as the consolidation of Kapsch CarrierCom and came in line with our EBITDA estimate and a notch above consensus. Due to increased depreciation of capitalized development cost, EBIT fell short of our and consensus forecasts and thanks to negative FX effects net income remained almost flat but met our and consensus expectations on the back of a lower tax rate and higher losses attributable to minorities. Gross margin stepped up to 39.9% (37.9%), supported by improving working capital metrics and a positive operating cash flow. The order backlog stepped up to EUR 873 mn (EUR 841 mn in 4Q 19) and book-to-bill was 1.12x (1.10x in 1Q 19).S&T AG is an Austria-based supplier of information technology (IT) solutions, specializing in Industry 4.0, embedded computer systems and Internet of Things (IoT) technology. The Company operates through three segments: IT Services, which handles the end-to-end realization of IT projects, from planning (consulting), through implementation (integration) to long-term operation (outsourcing); IoT Solutions, which focuses on the development of IoT and Industry 4.0 solutions combining hardware, middleware and services marketed to the industrial automation, medical technologies, infotainment and smart energy sectors, and Embedded Systems, which provides hardware featuring embedded technologies used by the transport, aviation and communication sectors. The Company is a full-service-provider of IT services in Central and Eastern Europe. Its core markets are Germany, Austria, Switzerland, Eastern Europe and North America.
The Institutional Equity Research team of Raiffeisen Bank International AG covers 85 stocks from Austria, Central & Eastern Europe with sell-side research and thus levers our local broker status with excellent company relationships. For corporates in Austria, CEE and Western Europe, we offer co-sponsored research, which includes research coverage and marketing activities to investors. Additionally, through our Spotlight Research product we also shed light on leading European small and micro-caps, seeking greater visibility with investors.
The Institutional Equity Research team consists of roughly 15 analysts, both in Vienna and the CEE countries. Our analysts provide long-standing sector expertise in tandem with profound local market know how and a sectoral approach across the entire region.
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