EUR 100.00 For Business Accounts Only

APPLUS: FY2019 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'19 vs. 4Q'18 Results
Sales: € 448.0 M (+4.0% vs. +3.1% BS(e) and +3.5% consensus);
EBIT: € 48.6 M (+12.0% vs. +10.4% BS(e) and +10.4% consensus);
FY2019 vs. FY2018 Results
Sales: € 1.778 Bn (+6.1% vs. +5.9% BS(e) and +6.0% consensus);
EBIT: € 197.1 M (+15.4% vs. +15.0% BS(e) and +15.0% consensus);

The results came in as expected. 4Q’19 sales grew +4% (+2.3% organic), with the annual figure coming in at +6.1% (+5% on the organic level). By business, we highlight the good performance of most of its markets (Autos, Idiada, Labs, as well as Oil&Gas for maintenance-OPEX-, electricity generation and transmission and construction and aerospace), which account for 91% of total sales, except those linked to Oil&Gas in new construction projects (9% of sales), which continue to show an adverse situation. 4Q’19 EBIT increased by +3.8% on the organic level, with the margin coming in 40bps above that from 4Q’18, bringing the EBIT’19 figure to € 197.1 M (+7.9% organic), with a margin of 11.1% (+40bps vs. FY2018).
We stress that the company has met its 2018-2020 targets one year ahead of its plan (expected) and it announced its 2020 guidance of +5% organic sales growth (vs. +4.4% BS(e) and +4.5% consensus) and an increase in EBIT margin of between 10 and 30bps (vs. 20bps BS(e) and around 15bps consensus).
Given the stock’s recent poor performance, we should see a positive market reception considering the organic growth rates registered, and which the company expects to be maintained in 2020. BUY. Target Price: € 14.60/sh (upside 39.45%).