ROVI: 4Q’19 RESULTS (ANÃLISIS BANCO SABADELL)
4Q'19 vs. 4Q'18 ResultsSales: € 109.7 M (+30.1% vs. +24.1% BS(e) and +19.5% consensus);
EBITDA: € 13.4 M (+272.2% vs. +272.1% BS(e) and +155.6% consensus);
EBIT: € 8.5 M (+2025.0% vs. +2052.5% BS(e) and +1100.0% consensus);
Net Profit: € 8.6 M (+290.9% vs. +245.7% BS(e) and +122.7% consensus);
FY2019 vs. FY2018 Results
Sales: € 381.3 M (+25.8% vs. +24.1% BS(e) and +22.8% consensus);
EBITDA: € 60.9 M (+106.4% vs. +106.4% BS(e) and +92.2% consensus);
EBIT: € 42.6 M (+143.4% vs. +144.1% BS(e) and +122.3% consensus);
Net Profit: € 39.3 M (+119.6% vs. +114.0% BS(e) and +98.9% consensus);
The 4Q’19 results were strong, beating consensus estimates. EBITDA for the quarter reached € 13.4 M, in line with our estimate but far below the consensus (€ 9.1 M), driven by stronger growth in sales (+30% vs. +24.1% BS(e) and +19.5% consensus) and higher EBITDA margins than the consensus expected (12% vs. 9% consensus and 12.7% BS(e)). Taxes were also better than expected (positive tax rate of 12% vs. -9% BS(e)), which also allowed Net Profit to come in above estimates (€ 8.6 M vs. € 7.6 M BS(e) and € 4.9 M consensus).
On the cash level, net debt grew by € 16.1 M on the quarter to € 15.9 M (0x NFD/EBITDA) as a result of higher working capital consumption (which we chalk up to higher raw material costs stemming from the swine flu) and rising capex in the company’s facilities (especially for ISM).
ROVI also announced a dividend payment of € 0.1751/sh. (vs. € 0.162/sh. consensus), meaning a continuation of the 25% payout policy (vs. the historical 35%) that started in 2018 and is consistent with the period of strong growth the company is undergoing.
Lastly, the company reiterated its guidance’20 of operating revenue growth of mid single-digit growth, which is slightly below our estimates (+7%) and those of the consensus (+6%).
In short, the results came in strong and above expectations, and thus, we expect a positive market reaction. We maintain our sell recommendation despite the favourable outlook due to the lack of upside potential following the stock’s excellent performance (+41% vs. IBEX in 1 year). Conference call at 15:30 (CET). SELL. T.P. € 22.50/sh. (-9.64% potential).
Laboratorios Farmaceuticos Rovi is engaged in the sale of its own pharmaceutical products and the distribution of other products for which it holds licenses granted by other laboratories for specific periods, in accordance with the terms and conditions contained in the agreements entered into with said laboratories.
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