IBERIAN DAILY 01 MARCH (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, ACCIONA ENERGÍA, ACERINOX, CELLNEX, COLONIAL, ENAGAS, FERROVIAL, SANTANDER, SOLARIA, TALGO, VIDRALA, VISCOFAN.At the end of today’s report, and during the entire results season, we will include a presentation with positive and negative results highlights and previews for the 4Q’22 results to be released over the coming days in Spain.
IBEX nears 9,400 points
European stock markets weathered the storm from the widening sovereign debt curves after February’s inflation data was released. Thus, in the Euro STOXX financials saw gains thanks to Banks and Insurance, whereas Pharma and Media posted the biggest losses. On the macro side, in Spain February’s preliminary inflation rose unexpectedly (returning to 6.1% YoY and with the core data climbing to 7.7%), as it did in France (to 6.2%). In the US, poor consumer confidence data from the Conference Board (falling unexpectedly) and the Chicago PMI (falling to 43.6). Meanwhile, housing prices according to S&P CoreLogic for 20 cities continued to fall at a pace of -0.5%. In China, February’s manufacturing and services PMI climbed in February more than expected to 52.6 and 56.3, respectively. In US business results, Autozone and Frist Solar beat expectations, HP in line.
What we expect for today
European stock markets would open with gains, fuelled by China’s PMI and awaiting the inflation data to be released in Germany and the ISM in the US. Currently, S&P futures are up +0.1% (the S&P 500 ended -0.25% lower vs. the European closing bell). Volatility in the US decreased (VIX 20.7). Asian markets are climbing (China’s CSI 300 +1.3% and Japan’s Nikkei +0.26%).
Today in the euro zone we will learn February’s final manufacturing PMIs, in Germany February’s preliminary inflation and unemployment, and in the US February’s ISM manufacturing and January’s construction spending. In US business results, Lowe’s and Dollar Tree, among others, will release their earnings. Debt auctions: Germany (€ 2.5 Bn in bonds due 2038 and 2039).
COMPANY NEWS
ACERINOX, BUY
Results came in far below expectations in EBITDA (€ 90 M vs. € 147 M BS(e) and € 154 M consensus) due to inventory regularisation (€ 98 M). Including this figure, results would have come in above expectations although we deem it reasonable that the consensus already assumed some impact in this regard, which complicates the reading of these results. As for its outlook, the company expects EBITDA to be clearly better than that seen in the 4Q (€ 90 M), which will be easily met, in our view, even against the current backdrop. Thus, we assume this messagee should not represent a driver.
In short, transition results in view of the inventory one-off that could generate doubts about the underlying business performance, which could lead to a negative market reaction.
CELLNEX. Good Results and in line with expectations. Undemanding guidance’23. BUY.
Results in line with expectations, with EBITDA’22 growing +37% and RLFCF’22 (Recurrent Levered FCF) totalling € 1.37 Bn (+39% and +21% organic vs. 2021; +2% vs. expectations), meeting the target of >+5% organic growth in PoPs (+6%). NFD’22 came in at € 19.84 Bn (vs. € 14.54 Bn in 2021 inc. IFRS16), meaning 7.5x NFD/EBITDA (vs. 7.5x BS(e) for YE’22). The company unveiled its 2023 guidance, foreseeing between € 2.95 Bn and € 3.05 Bn of EBITDA (€ 3.03 Bn BS(e) and 2.99 consensus) and between € 1.53 and € 1.63 Bn of RLFCF (vs. € 1.64 Bn BS(e)), with >+5% organic growth. The company reiterated its 2025 guidance. We foresee a neutral market reaction or slightly negative, in any event, as the guidance’23 is not demanding (our estimates are at the top end in RLFCF). The share price has slid -1% vs. IBEX YtD.
COLONIAL: Good FY2022 Results and in line with expectations. BUY.
Good FY2022 Results and in line with our expectations, with similar trends to those seen in the last few quarters. Rents grew +13% thanks to new projects/reforms included in the backlog, rents indexation and higher occupancy. LfF rents grew +7%, in line BS(e). LfL GAV grew +1% and NTA fell -1.7% to € 11.83 (in line). NDV, taking into account the market value of debt, rose by +15% vs. Dec’21. 2023 Guidelines: The company foresees a recurring EPS of € 0.28-0.30/sh. (vs. € 0.31 BS(e) but excluding divestitures), whereas the DPS guidance stands at € 0.25/sh. (+4% vs. 2021, 3.7% yield vs. 0.25 BS(e)).
FERROVIAL. Weaker 4Q’22 Results in Highways. The company will request the admission to trading in the Netherlands and the US. BUY.
4Q’22 Results above expectations in EBITDA (€ 208 M vs. € 193 M consensus) due to the reclassification of Services in Chile to continued business (EBITDA impact € +15 M BS(e)). Excluding this effect, results would have been in line with expectations. The greater weakness of Highways stood out (EBITDA € 143 M vs. 158 consensus), with the better performance of Construction (EBITDA € 58 M vs. € 42 M consensus). Cash ex infra ended below expectations (€ 1.44 Bn vs. € 1.57 Bn BS(e)), as well as the dividend of € 0.715/sh. (+3% vs. FY2022; 2.7% yield; vs. € 0.737 consensus). The company announced it will change its headquarters, requesting the admission to trading in the Netherlands and the US. We do not rule out a negative market reaction despite the poor share price performance (-7% vs. Ibex).
TALGO, BUY
At yesterday’s closing bell the company released FY2022 Results fully in line in adjusted EBITDA and better in NFD (€ 97 M vs. 131 BS(e) and 137 consensus), meeting the 2022 guidance (with the exception of BtB, as expected). The company unveiled its new 2023 guidance, where we stress the improvement of the EBITDA margin up to 12% (vs. 15.1% BS(e) and 11.8% consensus) and the BtB target >2x (0.9x BS(e)).
We expect at least a slightly positive market reaction, as the results meet expectations (even with better debt), and the guidance’23 in EBITDA margin and BtB is positive. Conference call at 12:00 (CET).
After these results and the new guidance’23, we will cut our estimates for the coming years (+13% CAGR’22-25e in EBITDA vs. +20% previously), reflecting in our T.P. the possible negative impact from the conflict in the LACMTA contract (US) and the delays of Avril to Renfe. With this in mind, we do not foresee a T.P. cut >-15%, still yielding +15% upside. Therefore, in the absence of the conference call’s messages, we maintain our BUY recommendation, awaiting the materialization of the possible drivers through significant contract extensions or M&A deals.
VIDRALA, BUY
The company has released a very good set of 4Q’22 results, far above what we expected: Sales € 329 M (+24.6% vs. +18.3% BS(e)), EBITDA € 111 M (+170.6% vs. +31.3% BS(e)). We knew our estimates were somewhat outdated folloowing the sharp drop in energy prices at the end of the year, but the results have easily beaten what we expected. In 4Q’22 standalone the company beat its minimum EBITDA guidance by 2.7x (€ 111 M vs. guidance of € >41 M vs. € 54 M BS(e)). The EBITDA margin for 4Q’22 standalone was 33.9% vs. 17.2% BS(e) and vs. 20.4% consensus.
The share price has risen quite a bit since the 3Q’22 results were released in October (+51%), and here we think the stock is already pricing in a large part of these results, but looking at the excellent numbers, we will have to recalibrate our model. For the time being we reiterate our BUY recommendation.
VISCOFAN. 4Q’22 Results above expectations in EBITDA. BUY.
4Q’22 Results above expectations in EBITDA (+25.2% vs. +8.1% BS(e) and +13.1% consensus), underpinned by better sales although margins came in worse (23.4% vs. 25.3% BS(e) and 23.7% consensus). Guidance’23: (i) revenues +9/+12% (€ 1.31-1.35 Bn vs. € 1.25 consensus and € 1.19 BS(e)); (ii) EBITDA +6/+9% (€ 283-291 M vs. € 279 consensus and 280 BS(e)); (ii) EBITDA margin 21.1%/22.2% (vs. 22.3% consensus and 22.6% BS(e)); (iv) Net Profit +10/+15% (€ 153-160 vs. 149 consensus and 147 M BS(e)); (v) capex € 75 M (vs. 109 consensus and 108 BS(e)). The group announced a final DPS’22 of € 0.54/sh. (0.9% yield), leaving the total DPS’22 at € 1.95/sh. (3.2% yield; vs. € 1.90/sh. consensus and € 1.85/sh. BS(e)). We expect a positive market reaction (-14% vs. Ibex in 2022).
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.
Banco Santander is a holding company, providing a range of financial products. Co.'s products and services include: retail banking business that covers all customer banking businesses; wholesale banking business; as well as asset management and insurance business. Co.'s principal operations are in Spain, the U.K., Portugal, Germany, Italy and Latin America. As of Dec 31 2014, Co.'s total assets amounted to Euro1,266,296,000,000 and total customer deposits amounted to Euro647,627,000,000.
Cellnex Telecom SA is a Spain-based company engaged in the wireless telecommunications (telecom) business. Its activities are divided into three segments: Broadcasting infrastructure, Telecom site rental, as well as Network services and other. The Broadcasting infrastructure division comprises distribution and transmission of television (TV) and frequency modulation (FM) radio signals, operation and maintenance (O&M) of radio broadcasting network, as well as over-the-top (OTT) radio services, among others. The Telecom site rental division provides access to wireless infrastructure, primarily through infrastructure hosting and telecom equipment co-location, mainly for mobile network operators and other wireless and broadband telecom network operators. The Network services and other division offers connectivity services for a variety of telecom operators and radio communication, among others. The Company also develops 5th generation mobile networks (5G) through Alticom BV.
Enagas is a gas transportation company based in Spain. Co. is engaged in the technical distribution and storage of gas through pipelines as well as the provision of regasification services. Co. and subsidiaries are engaged in the ownership, administration, storage, pipeline transportation, distribution flow, and sale of natural gas. As a transport company, Co. also provides gas and manages the gas infrastructures.
Ferrovial is a transportation company based in Spain. Co. is engaged in operations in the transportation sector. Co. specializes in the design, construction, management, administration and maintenance of transport infrastructures. Co.'s services range also includes the maintenance of parking lots, and land-, sea- and air-based transport networks. Co. is also engaged in the promotion and operation of short-stay parking lots, parking regulation and management services and promotion and sale of residents' parking.
Solaria Energia y Medio Ambiente manufactures both solar and thermal cells and panels, rolls out turnkey projects for large installations, operates solar plants and generates electricity through its owned plants.
Talgo is engaged in designing, manufacturing, repairing and maintaining the railway rolling stock, as well as the manufacturing, assembling, repairing and maintaining the engines, machinery and parts of the railway systems. Co. has an industrial presence in seven countries: Spain, Germany, Kazakhstan, Uzbekistan, Russia, Saudi Arabia and U.S.A. Co. has an active fleet in Europe, Asia and North America that comprises of 94 high-speed trains and more than 1,400 Talgo tilting passenger cars. Also, Co. purchases, redesigns, constructs, leases and sells all types of real estate.
Vidrala SA is a Spain-based company principally engaged in the glass industry. The Company operates through two segments: Spain and European Union. The Company's activities include the production, distribution and sale of glass bottles and containers used in the food and beverages industries. The Company conducts its own research and development (R&D) operations. It operates production plants and melting furnaces located in such countries, as Portugal, France, Belgium and Italy. The Company owns such subsidiaries as Crisnova Vidrio SA, Inverbeira Sociedad de Promocion de Empresas SA, Gallo Vidro SA, Castellar Vidrio SA, Corsico Vetro SRL, MD Verre SA, Omega Immobiliere et Financiere SA, Investverre SA and CD Verre SA.
Viscofan is the parent company of the Viscofan Group. Co. is divided into two major operational subgroups. The companies comprising the Naturin GmbH subgroup are engaged in the manufacture and distribution of artificial casings (small and big diameter collagen and plastics) for the meat industry. Through its wholly-owned subsidiary IAN, S.A., Co. also manufactures and distributes canned vegetables (asparagus, olives and tomato).
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