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INDRA: FY2020 RESULTS (ANÁLISIS BANCO SABADELL)

4Q'20 vs. 4Q'19 Results
Sales: € 890.2 M (-2.8% vs. -3.9% BS(e) and -3.6% consensus);
EBIT: € -23.8 M (€ 94.0 M in FY2019 vs. € -26.0 M BS(e) and € -12.9 M consensus);
Net Profit: € -34.2 M (€ 56.0 M in FY2019 vs. € -29.6 M BS(e) and € -18.9 M consensus);
FY2020 vs. FY2019 Results
Sales: € 3.043 Bn (-5.0% vs. -5.3% BS(e) and -5.2% consensus);
EBIT: € -32.9 M (€ 221.0 M in FY2019 vs. € -35.0 M BS(e) and € -21.9 M consensus);
Net Profit: € -65.2 M (€ 121.0 M in FY2019 vs. € -60.6 M BS(e) and € -49.9 M consensus);

From this set of results we highlight: (i) good order intake (+8.4%) and backlog data (new record of € 5.23 Bn, 1.72x sales); (ii) good cash performance (€ 83 M in FY2020 vs. € 75 M BS(e)) and in debt (€ 481 M vs. € 552 M in 2019 and vs. € 518 M BS(e)); (iii) better sales data, and EBIT in line with BS(e), meaning that the company has met its guidance’20; and (iv) dividend payments are resumed in 2021 (to be specified; vs. our estimate of € 0.11/sh.; 1.5% yield and 25% payout). 4Q’20 sales grew +1% in local currency (-2.9% reported vs. -3.9% BS(e) and -3.6% consensus), driven by the sales in T&D (+2.6% in local currency) vs. the -0.1% drop in local currency from Minsait. 4Q’20 EBIT was a negative € -24 M, hit by the efficiency plan (€ 94 M); excluding this effect it would have been € 70 M (7.9% margin vs. 10.3% in 4Q’19), leaving EBIT’20 at € 120 M, in line with the low end of the guidance’20 (which suggested a range of € 120-135 M).
As for the guidance’21, the company suggests sales above € 3.2 Bn (vs. € 3.24 Bn BS(e) and € 3.14 Bn consensus), EBIT above € 200 M (vs. € 213 M BS(e) and € 206 M consensus) and FCF before compensations (€ 35 M + a possible € 28 M from the 2015 plan) above € 120 M (vs. € 118 M BS(e)).
We expect a positive share price reaction, as despite its recent performance (+49% in absolute terms since October’20 lows and +9% thus far in 2021), it still stands far from pre Covid-19 levels (-28%), and the long-term outlook is positive (with backlog hitting all-time highs) and the company’s cash position is robust (€ 121 M in 2021, meaning 8.8% yield). BUY. T.P. € 9.50/sh. (+24% upside).