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SIEMENS GAMESA: 4Q’19 RESULTS (ANÁLISIS BANCO SABADELL)

4Q’19 vs. 4Q’18 Results:
Sales: € 2.944 Bn (+12.4% vs. +15.2% BS(e) and +14.2% consensus);
Adjusted EBIT: € 250 M (+16.2% vs. +8.3% BS(e) and +15.3% consensus).
FY2019 vs. FY2018 Results:
Sales: € 10.227 Bn (+12.1% vs. +12.9% BS(e) and +12.7% consensus);
Adjusted EBIT: € 725 M (+4.6% vs. +2.2% BS(e) and +4.3% consensus).
The 4Q’19 results came in below expectations in sales (+12.4% vs. 4Q’18; +15.2% BS(e) and +14.2% consensus), leaving the year’s sales at € 10.23 Bn, at the low end of the guidance (between € 10 Bn and € 11 Bn). Adjusted EBIT pre PPA and restructuring costs were +7% above our estimate (+1% vs. consensus), although resulting in a margin of 7.1% for the full year, also at the low end of the guidance (between 7.0% and 8.5%). Net cash as of YE came in at € 863 M, above expectations (vs. € 606 M BS(e) and € 570 M consensus).
For 2020, SGRE expects sales between € 10.2 Bn and € 10.6 Bn, and an EBIT margin of between 5.5% and 7%. These numbers compare with our estimates and those of the consensus, which stand at € 11 Bn and € 10.63 Bn in sales, respectively, with margin levels of 7.9% and 7.5%, respectively.
Even if these results are positive in that they are within the company’s guidance range, above our adjusted EBIT estimate and clearly better in cash generation, the guidance given is negative, and given that the company has accumulated a +6% outperformance vs. the IBEX over the past month (+7% so far this year), we expect a negative reception. SELL. T.P. € 13.00/sh. (upside +1.17%).