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FCC: 2Q’20 RESULTS (ANÁLISIS BANCO SABADELL)

2Q’20 vs. 2Q’19 Results:
Sales: € 1.337 Bn (-14.1% vs. -12.9% BS(e));
EBITDA: € 215.1 M (-15.1% vs. -22.1% BS(e));
EBIT: € 93.4 M (-36.0% vs. -49.6% BS(e));
Net Profit: € 47.8 M (-15.4% vs. -49.4% BS(e));
1H’20 vs. 1H’19 Results:
Sales: € 2.822 Bn (-5.7% vs. -5.1% BS(e));
EBITDA: € 433.6 M (-6.0% vs. -9.8% BS(e));
EBIT: € 187.9 M (-23.2% vs. -31.4% BS(e));
Net Profit: € 75.9 M (-41.1% vs. -56.0% BS(e));

The 2Q’20 results were slightly better on the operating level, with cash performing well, as expected. EBITDA on the quarter fell less than expected (-15% vs. -22% BS(e)), despite weaker sales (-14% vs. -13% BS(e)) due to more positive margin performance, which reached 16% on the quarter (vs. 14.6% BS(e) and 16.3% in 2Q’19), thanks to the solid performance in Services and Water (71% sales). Net Profit fell less than expected (-41% vs. -49% BS(e)), despite the negative impact from FX (€ -10 M on the quarter). Excluding this effect, our Net Profit estimate would have been +2% above.
No surprises on the net debt level, which rose +1.9% to € 3.79 Bn (3.8x NFD/EBITDA vs. 3.6x in 1Q’20), in line with our estimate (€~3.8 Bn).
In short, the 2Q’20 results were slightly better on the operating level, and with solid cash performance, and thus we expect a positive reception considering the stock’s performance since the pandemic hit in February (-30% in absolute terms, -2% vs. the IBEX). The conference call began at 9:00 (CET), and we expect more details to be given on the impact from Covid-19 on the business, as well as the outlook for the second half of the year. BUY. T.P. € 12.80/sh. (upside +60.40%).