IBERIAN DAILY 25 FEBRUARY + 4Q’21 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)
NEWS SUMMARY: ACCIONA, ACS, FCC, FERROVIAL, GLOBAL DOMINION, METROVACESA, NH HOTELES, SANTANDER, TALGO, 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’21 results to be released over the coming days in Spain.
The war takes its toll on Europe
European stock exchanges fell sharply although the losses at the opening bell moderated to -3%/-4% at the closing bell, whereas the US managed to end in the black with the sharp recovery of technology companies. In this regard, R. Holzmann, from the ECB, left the door open to postpone the end of stimulus due to the war in Ukraine. In the Euro STOXX, all sectors ended in negative territory, with Banks and Basic Resources seeing the biggest drops whereas Household and Technology were the best relative performers. On the macro side, in the euro zone, the extraordinary European summit resulted in more financial and technology sanctions against Russia and Putin’s inner circle. In the US, the 4Q’22 GDP was raised marginally to 7.0% although the contribution of private consumption moderated. On another note, January’s Chicago Fed activity index recovered more than expected and January’s home sales slowed down more than expected. In Japan, February’s Tokyo inflation increased somewhat more than expected to 1.0% YoY, although core inflation stood at -1.1% YoY. In US Results Moderna came in better, American Electric and American Tower in line whereas Discovery released disappointing figures.
What we expect for today
The European stock markets would open with gains of around +2.0% after new sanctions against Russia were announced by the US and Europe, with confirmation by NATO that no troops will be sent to Ukraine, as it is not a member state.
Currently, S&P futures are down -0.6% (the S&P 500 ended -+2.2% higher vs. the European closing bell). Volatility in the US increased (VIX 30.32). Asian markets are climbing (China’s CSI 300 +0.9%, and Japan’s Nikkei +2%).
Today in Germany we will learn the 4Q’21 GDP, in the euro zone January’s M3 and February’s economic climate index, in Mexico the 4Q’21 GDP and December’s IGAE, in the US January’s personal income and outlays, January’s preliminary durable goods orders and pending home sales. In US business results, Pinnacle, Evergy and Sempra Energy, among others, will release their earnings. Debt auctions: Italy (€ 8.25 Bn in bonds due 2027, 2032 and 2026).
COMPANY NEWS
FERROVIAL. Worse 4Q’21 Results on the operating and cash level. Toll Roads impacted by Omicron. BUY.
The 4Q’21 results came in below expectations in EBITDA (€ 157 M vs. € 173 M BS(e) and € 165 M consensus) due to a weaker performance of Construction (€ 58 M of EBITDA vs. € 71 M BS(e) and € 64 M consensus). Toll Roads (85% of our T.P.) slowed due to Omicron (as expected), but forecasts a sharp increase in traffic starting in 2Q’22. Cash ex infra also came in below expectations (€ 2.18 Bn vs. € 2.97 Bn BS(e) due to a weaker working capital performance). The company announced a dividend payment of € 0.715/sh. (+42% vs. 2021; 3.1% yield), above the consensus estimate (€ 0.65/sh.) and -3% below pre Covid levels. Despite its poor recent performance (-16% in 2022; -7% vs. sector), we expect a negative share price reaction.
NH HOTELES. FY2021 results above expectations in recurring EBITDA and despite Omicron. BUY.
Excl. one-offs, the results showed weak sales figures (+271.8% vs. +267.1% BS(e) and +286.7% consensus), with strong recovery in all markets. Recurring EBITDA beat expectations (+606.4% vs. +547.4% BS(e) and +550.6% consensus), with the EBITDA margin coming in at 36.1% (+340bps vs. 32.7% in 4Q’19), whereas activity levels continue to be -34% lower than in 4Q’19. NFD (excl. IFRS 16) decreased by €-117 M to € 568 M, as expected. NHH foresees a fast recovery as restrictions begin to be lifted. We raise our EBITDA estimate by +22.5% for the 2022-24 period BS(e) and set our new T.P. at € 4.50/sh., which yields +36% upside, and change our recommendation to BUY (from SELL).
ACCIONA. BUY.
At yesterday’s closing bell the company released FY2021 Results above expectations in EBITDA (+6%) and better in debt although partially known, as Acciona Energía’s results (83% ANA and 73% of ANA’s EBITDA) had been made public on 23/02. The information not unveiled (Infrastructures and Other activities) fared in general +17% better than expected in EBITDA, with a better-than-expected performance of working capital. NFD was cut by -388 M vs. Dec’20 to € 4.344 Bn (including IFRS16), -6% below our expectations. The NFD/EBITDA in the past 12 months stands at 2.9x, clearly below the guidance, as it is below 4x but due partially to lower CAPEX ass a result of a lower installation pace of renewable capacity.
As the results to be released only account for 27% of ANA’s EBITDA we would foresee a positive but moderate market reaction. ANA has underperformed the IBEX by -11% YtD. Conference call at 10:00 (CET).
GLOBAL DOMINION. BUY.
The 4Q’21 results showed an operating performance in line with expectations (€ 30.7 M of EBITDA vs. € 30.8 M BS(e) and consensus) despite weaker adjusted sales (-5% vs. -3% BS(e) and -2% consensus) due to higher margins (10.9% vs. 10.7% BS(e) and 10.5% consensus), which would be largely due to the good performance of B2B Proyectos 360 (~30% of sales; 18.1% contribution margin vs. 17.5% BS(e) and ~17% historically). We also highlight organic growth at constant currency, which slowed to +13% vs. 2019 (from +18% in 9M’21), although it stands far above the +5% guidance included in its strategic plan. There were no surprises in Net Profit, which came in at € 12 M on the quarter (vs. € 13 M BS(e) and € 12 M consensus).
The company’s net cash position decreased to € 66 M, vs. € 75 M BS(e) (€ 83 M in the 1H’21), which includes, among other things: (i) the € 23 M invested in the share buyback scheme (in addition to the €~4 M paid out in dividends) and (ii) € 25 M contributed by its renewables subsidiary (both effects were already known).
As for the outlook, the company maintains the long-term objectives laid out in its strategic plan, which include doubling in 2024 its recurring Net Profit’18 to €~64 M (vs. € 66 M BS(e)).
In short, the 4Q’21 results came in as expected. Despite being stained by a challenging comparison and FX (-4% BS(e)), the results continue to show a favourable operating performance and allow the company to confirm its long-term targets. We do not expect a relevant impact despite the stock’s recent performance (-8% since the 3Q’21 results; -2% vs. IBEX). Conference call at 11:30 (CET).
TALGO. BUY.
At yesterday’s closing bell the company released FY2021 Results very much in line in adjusted EBITDA (-1% vs. BS(e) and -2% vs. consensus) and better in NFD. Sales rose by +14% vs. 2020 (vs. +17% BS(e) and +18% consensus) up to € 555 M whereas the adjusted EBITDA came in at € 66 M (vs. € 67 M BS(e) and consensus), slightly below expectations but with a slightly higher margin than expected (11.9% vs. 11.8% BS(e) and 11.7% consensus; 7.0% in 2020), and in any case within the guidance range (11-12%). NFD came in at € 36 M, below expectations (€ 56 M BS(e) and 89 consensus), with working capital better than expected. Order intake totalled € 519 M, and the backlog € 3.249 Bn (vs. € 3.184 Bn as of YE’2020).
As for its 2022 guidance, the company announced (i) an adjusted EBITDA margin’22 above 13% (vs. 13.7% BS(e) and 14% consensus), (ii) it cut 2021 and 2022 sales target slightly to around 34% of the backlog (vs. 36% BS(e) and consensus; 35-37% previously), (iii) it set the BtB target in 2022 at around 1.0x (vs. 0.9x BS(e)) and (iv) and the NFD/adjusted EBITDA target at around 1.5x (vs. 0.5x BS(e) and consensus).
Additionally, the company unveiled additional information on the new shareholder remuneration programme that will be launched in the 1H’22 totalling € 10 M (1.9% dividend yield), to be distributed through scrip dividend and share buyback (no details given).
Even though results were very much in line in EBITDA and better in net debt, we believe that the 2022 guidance could disappoint the market as it not highly ambitious in terms of sales, EBITDA and order intake and it means a significant increase in debt in 2022 (unexpected although not a source of concern, in our view). For this reason, leaving aside the possible impact from the war conflict in Ukraine on the share price (note that less than 1% of its sales come from Russia), we believe that these results should have no market impact or moderately negative. The share price has underperformed the IBEX by -13% YtD. Conference call at 12:00 (CET).
VISCOFAN. BUY.
The FY2021 results came in above expectations in sales (+6.3% vs. +5.4% BS(e) and +4.8% consensus). All regions performed well, with Europe and Asia (57% of sales) standing out, with LfL growth of +9.8%, backed by China and South East Asia and the recovery of collagen volumes in Europe. By segments, casings grew by +5.7% vs. FY2020, also recording +20% growth in cogeneration. However, EBITDA came in below expectations (+5.2% vs. +6.9% BS(e) and +6.9% consensus), and the improvement in EBITDA vs. the guidance (€ 242-246 M) is marginal (€+0.7 M to € 246.7 M). It is affected by the -350bps loss of profit in 4Q’21 to 23.7%, where the effect from cost inflation had a greater impact, mainly the cost of energy due to the lack of hedging (+58% rise in energy vs. 4Q’20 and +50% in transport vs. 4Q’20).
As for the guidance’22, the company expects revenues to grow by between +8% and +10% (to € 1.04-1.06 Bn vs. € 1.02 Bn consensus and € 997 M BS(e)) and +4/+6% growth in EBITDA (to € 257-261 M vs. € 257 M consensus and € 261 M BS(E)), with an EBITDA margin ranging from 24.1% to 25.0%. Net Profit grew by +5/+8% (to € 140-144 M vs. € 134 M consensus and € 141 M BS(e)), underpinned by investments totalling € 100 M (vs. € 64 M consensus and € 60 M BS(e)).
Good cash performance, which allows NFD to be reduced to € 2 M (-95% vs. FY2020 and 0x NFD/EBITDA), even exceeding the Capex guidance by +31% to € 92 M (€ 70 M guidance). Lastly, VIS announced a final dividend of € 0.43/sh. (0.8% yield), which brings the total dividend to € 1.84/sh. (3.4% yield; vs. € 1.72/sh. consensus and € 1.74/sh. BS(e)).
The FY2021 results showed a positive operating performance (especially considering the supply chain disruption and the high energy prices), allowing the company to meet its guidance’21. However, the outlook for profit in 2022 stands slightly below expectations, which could lead to estimate cuts. In any event, we believe that this scenario of volatility makes VIS an interesting option, as we see little risk of a drop in a stock that is trading at attractive multiples (10.4x EV/EBITDA’22) and which stands out among defensive stocks thanks to: (i) the countercyclical nature of its business demand; (ii) its leading position within an oligopoly, with some pricing power; (iii) its comfortable financial position (~0x NFD/EBITDA’21); and (iv) its geographic (109 countries) and clients diversification (top 10 representing
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.
ACS Actividades de Construccion y Servicios is a holding company. Through its subsidiaries, Co.'s activities are divided into the following areas: Construction, engaged in the construction of civil works, and residential and non-residential building construction; industrial services, engaged in the development of applied engineering services, installations and the maintenance of industrial infrastructures in the energy, communications and control systems sectors; services, groups together environmental services, the outsourcing of building maintenance services, logistics and transport services; and concessions, mainly engaged in transport infrastructure concessions.
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.
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.
Fomento de Construcciones y Contratas is the parent company of a group engaged in sanitation services, cleaning, maintaining, purification and distribution of water, construction of highways, hydraulic works, marine works, air and rail transport infrastructure, urban developments, housing, non-residential buildings, office buildings, toll highways, parking garages, marinas and water treatment plants. Co. is also engaged in the manufacture and sale of cement and cement infrastructures, such as precast concrete elements; and in the financial markets, and real estate development, leasing and tourism.
Global Dominion Access SA is a Spain-based company primarily engaged in the construction and engineering sector. The Company's activities are divided into two segments: Multi-technological Services, which offers design, implementation and maintenance of fixed and mobile telecommunications networks, manages sales and distribution processes for telecommunications carriers, as well as renders of inspection, maintenance, repair and renovation services for industrial and energy firms, and Solutions and EPCs, which executes turnkey Engineering-Procurement-Construction (EPC) projects, provides construction, repair and renovation of industrial heating installations, as well as develops processes and other technological and business solutions in numerous sectors. Its services are provided in three areas: Technology and Telecommunications (T&T), Industry and Renewable energies. It operates worldwide in Europe, the Americas, Asia and Africa. The Company is a subsidiary of CIE Automotive SA.
Metrovacesa SA, formerly Metrovacesa Suelo y Promocion SA, is a Spain-based real estate developer. The Company specializes in construction and sale of sustainable housing, both single-family and multi-family residential properties. Its activities also include promotion, urbanization and parceling of real estate in general, as well as real estate management for own benefit or on behalf of third parties. Its asset portfolio includes more than 6 million square meters of building land across Spain, as well as already developed properties in cities, such as Malaga, Almeria, Cordoba, Barcelona and Madrid, among others.
NH Hotel is engaged in the operation and management of hotels throughout Spain, the Benelux countries, Germany, and South America.
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.
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).
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.