EUR 100.00 For Business Accounts Only

SIEMENS GAMESA: 1Q’21 RESULTS (ANÁLISIS BANCO SABADELL)

1Q'21 vs 1Q'20 Results
Sales: € 2.295 Bn (+15.0% vs. +15.0% BS(e) and +15.0% expected by the market consensus);
Adjusted EBIT: € 121,0 M (€-136.0 M in 1Q'20 vs. € 121.0 M BS(e) and 121.0 M expected by the market consensus);
Reported Net Profit: € 11 M (€ -173.0 M in 1Q'20 vs. € -26.0 M BS(e)).

The company had already released its preliminary 1Q’21 Results with € 2.3 Bn of sales (€ 2.295 Bn in the end; +15% vs. 1Q’20) and € 121 M of adjusted EBIT (vs. € -136 M in 1Q’20), although benefiting from one-offs (not broken down or quantified). Thus, the impact from these one-offs was the only pending factor, which were linked to the better performance of the margin in Services (25.9% in adjusted EBIT margin; vs. 22% BS(e) and consensus) due to a lower failure rate and lower supplier costs, which are apparently difficult to repeat in the future. As regards wind turbines, the margin also came in above expectations (1% vs. -2.5% BS(e) and -2.8% consensus). The reported Net Profit totalled € 11 M (vs. € -173 M in 1Q’20).
The backlog came in at € 30.1 Bn (+7.2% vs. 1Q’20), with order intake falling by -51% on the quarter vs. 1Q’20 to € 2.28 Bn (1x BtB; already known). The offshore division did not record any orders over this period (as expected), but expects to receive new orders throughout the year. As for prices, the onshore ASP increased to € 0.69 M/Mw (vs. € 0.63 M/Mw last quarter), although it remains stable on a 12-month basis.
We did not know the company’s net debt position, which came in at € 476 M, better than expected (€ 932 M BS(e) and € 741 M consensus; € 49 M as of the end of 2020), due to better working capital performance. In this regard, the company highlights its liquidity position, as it has €~3 Bn in unused loan facilities.
The company confirmed the 2021 guidance of € 10.2/11.2 Bn of sales and 3%/5% of adjusted EBIT margin.
Despite the fact that much of the results was already known, insomuch as the positive one-offs mentioned in the preliminary results are linked to the Services division (and although they will be difficult to repeat, they could be considered ordinary, to some extent), that the wind turbine margin has come in above expectations and that net debt also performed better than expected, we could expect the market reception to be at least moderately warm. The stock has outperformed the IBEX by +4% so far this year. Conference call at 9:00 (CET). SELL. Target Price: € 17.95/sh (-46.77% potential)