Andritz 2Q 20 - Good results, fair outlook, scope of downsizing key question
Andritz's 2Q results improved on all lines but for order intake and beat our ambitious as well as consensus expectations by quite a margin. The beat was based on improving Pulp&Paper and Separation earnings while Metals did not fare as bad as we thought and Hydro disappointed. Management returned to giving guidance for the current fiscal year and expects sales slightly down yoy from a 2019 revenue of EUR 6,674 mn and a flat EBITA margin (2019: 5.1%) after restructuring cost. Excluding restructuring we calculate a margin around 6% assuming a mid to high double-digit EUR mn expense, which would exceed consensus by half a percentage point. The guidance assumes no hard second wave.Andritzis develops production systems and industrial process solutions for standard and specialized products. Co. maintains five business areas. Pulp and Paper provides technology and services for production of various grades of pulp and fiber for the manufacture of paper, board and tissue. Metals develops and manufactures plants for the production of cold-rolled carbon steel, stainless steel, and non-ferrous metals strip. Environment and Process provides products and services for mechanical and thermal solid or liquid separation. Feed and Biofuel develops and produces equipment for production of feed. Hydro supplies turnkey electromechanical equipment and services for hydro power plants.
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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