EUR 100.00 For Business Accounts Only

CIE AUTOMOTIVE: 9M’19 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'19 vs. 3Q'18 Results
Sales: € 906.5 M (+21.2% vs. +24.6% BS(e) and +22.4% consensus);
EBITDA: € 149.5 M (+18.4% vs. +20.6% BS(e) and +20.3% consensus);
EBIT: € 105.6 M (+10.8% vs. +14.7% BS(e) and +14.4% consensus);
Net Profit: € 74.1 M (+28.4% vs. +20.3% BS(e) and +16.1% consensus);
9M'19 vs. 9M'18 Results
Sales: € 2.609 Bn (+13.8% vs. +14.9% BS(e) and +14.2% consensus);
EBITDA: € 457.5 M (+13.2% vs. +13.9% BS(e) and +13.8% consensus);
EBIT: € 332.2 M (+8.4% vs. +9.6% BS(e) and +9.5% consensus);
Net Profit: € 224.2 M (+18.2% vs. +15.7% BS(e) and +14.4% consensus);

The 9M’19 results are very much in line with expectations (very slightly below) on the P&L statement, with sales coming in below estimates and a 17.5% margin (in line), but with debt figures beating expectations.
Organic growth would have come in slightly above our estimate (+0.1% vs. -0.2% BS(e)). Net debt stood at € 1.6 Bn (2.4x adjusted NFD/EBITDA) vs. € 948 M in Dec’18, affected by the acquisitions made over the period. This was slightly below our estimate and that of the consensus (€ 1.65 Bn BS(e) and € 1.61 Bn consensus), thanks in part to the better working capital performance than expected.
Lastly, CIE reiterated (as it did in 1H’19) that it will meet its strategic targets for 2020 (2016-20 sales growth of ~4x the market; EBITDA margin >18% and ~1x NFD/EBITDA, among others) one year early, and that it will present a new strategic plan, although no date has been given. With the latest update, this target meant a CAGR’16-19 (with the scope of consolidation as of 2018) of around +9% in sales (slightly above our estimate) and an EBITDA margin above 18% (vs. 17.6% BS(e)). In our opinion the margin guidance is attainable, although sales growth could come in slightly below expectations (+8.5% if it ends 2019 with flat LfL growth).
In short, we would expect a neutral reception by the market, despite the fact that CIE has underperformed the IBEX by -4% over the past month (-7% on the year). There will be a conference call at 15:30 (CET). BUY. T.P. € 26.85/sh. (upside +21.60%).