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GLOBAL DOMINION: 3Q'19 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'19 vs. 3Q'18 Results
Sales: € 229.6 M (+13.7% vs. +10.4% expected and +12.5% expected by the market consensus);
EBITDA: € 26.0 M (+47.7% vs. +49.5% expected and +43.8% expected by the market consensus);
Net Profit: € 10.2 M (+175.7% vs. +141.1% expected and +162.2% expected by the market consensus);
9M'19 vs. 9M'18 Results
Sales: € 654.6 M (+12.9% vs. +11.8% expected and +12.5% expected by the market consensus);
EBITDA: € 71.7 M (+52.9% vs. +53.5% expected and +51.4% expected by the market consensus);
Net Profit: € 24.7 M (+51.5% vs. +43.7% expected and +48.5% expected by the market consensus);
Good 3Q’19 Results and in line with expectations. Adjusted sales growth was slightly above expectations on the quarter (+13,7% vs. +12.5% consensus and +10.4% BS(e)), which along with the positive performance of margins (+40bps vs. 3Q’18 to 9.1% ex IFRS 16), enabled a slightly higher EBITDA (€ 26 M vs. € 26.3 M BS(e) and € 25 M consensus). Organic growth at constant exchange rate reached +7.1% on the quarter (in line with expectations), providing the company with a favourable position to meet its +7% guidance in 2019 and >+5% assumed in its 2019-22 strategic plan. In Net Profit we stress +176% growth vs. 3Q’18 due to the impact from a € -5 M provision in the 3Q’18 as a result of the shutdown of its Services business in Brazil (discontinued activities). Adjusted for this effect, Net Profit would have grown +17% vs. 3Q’18 (vs. +12% expected).
In summary, robust results that continue to evidence positive growth dynamics and a favourable performance of operating margins. Since the corrections seen in the past 3 months (-22% vs. IBEX) could be explained by doubts on the performance of working capital, we would wait for the conference call to be held at 15:30 (CET) to see the comments from the management team. BUY. Target Price: € 5.70/sh. (upside 56.81%)