EUR 100.00 For Business Accounts Only

IBERIAN DAILY 26 OCTOBER + 3Q’23 RESULTS. HIGHLIGHTS AND REST OF PREVIEWS (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: ACS, FCC, FLUIDRA, GLOBAL DOMINION, REPSOL, UNICAJA.

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 3Q’23 results to be released over the coming days in Spain.

The Treasury near 5% again
It was a volatile session for European stock markets, focused on the release of business earnings and the fluctuations of sovereign debt that widened significantly. Thus, in the STOXX 600, Basic Resources and Insurance were the best performers whereas Real Estate (given the more expensive financing) and Retail saw the biggest drops. On the macro side, in Germany, October’s IFO recovered more than expected and following the latest readings it is apparently hitting bottom although still suggesting economic slowdown in the 4Q’23. On another note, M. Johnson, ultra conservative and close to D. Trump was elected leader of the republicans in the Congress. Ford reached an agreement in the end with the unions and it will raise wages per hour worked by 25%. In Spain, the OECD cut its GDP growth forecast’24 to 1.5%, warning the government it should raise taxes, freeze spending and reform pensions again. In the US, September’s new home sales climbed more than expected. In US 3Q’23 Results, T-Mobile, IBM, Hilton and Moody’s in line, whereas Boeing released disappointing figures and Meta beat expectations. On the geopolitical front, Israel has conducted a preparatory incursion, warning it has not changed its plan of invading Gaza.
What we expect for today
European stock markets would open with drops of -1.0%, dragged down by cyclical value and growth (given the hike in rates), whereas oil groups would reflect the rise in crude oil prices. Currently, S&P futures are down -0.66% (the S&P 500 ended -0.47% lower vs. the European closing bell). Volatility in the US rose (VIX 20.19). Asian stock markets are sliding (China’s CSI 300 -0.52%, Japan’s Nikkei -2.14%).
Today in Spain we will learn the 3Q’23 unemployment rate, in the euro zone October’s ECB meeting, in the US the 3Q’23 GDP, September’s durable goods orders, weekly jobless claims and September’s pending home sales. In US business results, Amazon.com, Intel, Ford, Merck, Mastercard and American Tower, among others, will release their earnings.


COMPANY NEWS

FLUIDRA. Results below expectations, although the 2023 guidance is maintained. BUY
The 3Q’23 results (standalone) came in below expectations: € 437 M of Sales (-16.2% vs. -9.2% BS(e) and -12.3% consensus); € 78 M of EBITDA (+1.8% vs. +12.8% BS(e) and +10.3% consensus). The sales being poor was predictable due to the offloading of stocks and lower new swimming pool sales, but one negative surprise in our view is that the gross margin did not improve (it fell -338bps in Q3 standalone vs. +46bps BS(e)) after the strong performance through 1H’23 (+139bps). In any event, the company has reiterated its guidance’23 (€ 2.0-2.1 Bn of Sales vs. € 2.1 Bn BS(e) and € 410-450 M of EBITDA vs. € 432 M BS(e)). We expect a moderately negative market reaction, as the share price already has already slid -26% from August’s highs (+13% in 2023) and it has reiterated its annual guidance.

GLOBAL DOMINION, BUY
The 3Q’23 Results showed a weaker-than-expected operating performance (EBITDA € 29 M vs. € 32 M BS(e) and € 31 M consensus) due mainly to the greater impact from the downsizing plan in The Phone House (€ -6.5 M vs. € -5 M BS(e)). On another note, sales grew less than expected (+4.0% vs. +5% consensus), especially in Projects 360 (-5% vs. 3Q’22) and organic growth slowed down to +6.5% as of 9M’23 BS(e) (vs. +7% 1H’23 and +>5% guidance). With this in mind, the company keeps its EBITDA guidance’23 unchanged at € 150 M (vs. € ~148 M BS(e) and consensus). We do not expect a relevant market impact following its poor performance (-7% in 2023; -16% vs. IBEX). Conference call today at 16:00 (CET).

REPSOL. 3Q’23 results in line, but with the interim dividend’24 improving. BUY
The 3Q’23 results were in line with our estimates and those of the consensus in adjusted Net Profit after this figure was raised with the trading statement. Thus, adjusted Net Profit came in at € 1.1 Bn (-27% vs. 3Q’22). By divisions, Upstream (54% EBIT’22) reached € 341 M (-54.7% vs. 3Q’22), Industrial (41% EBIT’22) reached € 550 M (-16.9% vs. 3Q’22) and Commercial and Lower Carbon (8% EBIT’22) stood at € 203 M. The company announced the payment of € 0.40/sh. in Jan’24 as an interim dividend, meaning a € 0.025/sh. increase vs. the dividend already announced of € 0.375/sh. (+7%, 2.8% yield). NFD rose to € 1.86 Bn due to dividend payments, taxes and the Maxus lawsuit. We expect a positive reaction. There will be a conference call at 12:00 (CET).