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VISCOFAN: 3Q’20 RESULTS (ANÁLISIS BANCO SABADELL)

3Q'20 vs. 3Q'19 Results:
Sales: € 224.89 M (+4.2% vs. +2.8% BS(e) and +2.6% consensus);
EBITDA: € 58.67 M (+16.6% vs. +6.5% BS(e) and +6.1% consensus);
EBIT: € 41.16 M (n/a vs. n/a BS(e) and n/a consensus);
Net Profit: € 30.56 M (+13.1% vs. -0.8% BS(e) and -0.4% consensus);
9M'20 vs. 9M'19 Results:
Sales: € 671.89 M (+7.4% vs. +6.9% BS(e) and +6.8% consensus);
EBITDA: € 168.97 M (+18.0% vs. +14.5% BS(e) and +14.3% consensus);
EBIT: € 114.72 M (n/a vs. n/a BS(e) and n/a consensus);
Net Profit: € 87.86 M (+20.9% vs. +15.7% BS(e) and +15.8% consensus);

The 3Q’20 results beat expectations on the operating level, and the company maintains its 2020 guidance. EBITDA on the quarter grew more than expected (+17% vs. +6% BS(e) and consensus), due mainly to better margins (+260bps vs. 3Q’19 to 26.1% vs. 24% BS(e) and consensus and vs. our estimate of 24.5% for 2020) and higher sales (+4.2% vs. +2.6% consensus and +6.4% LfL). Net Profit growth also beat expectations (+13% vs. -0.4% consensus), whereas NFD excl. IFRS 16 fell -66% to € 14.7 M (~0.1x NFD/EBITDA; -0.1x vs. 2Q’20).
The company kept its guidance’20 unchanged, although, in our view, it will be able to beat the targets even in a scenario of very unfavourable exchange rates in 4Q’20. We recall that its guidance’20 points to € 903-921 M of sales (vs. €+902 M BS(e) and consensus), between € 215 M and € 220 M of EBITDA (vs. € 221 M BS(e) and € 218 M consensus) and € 112-115 M of Net Profit (vs. € 115 M BS(e) and € 118 M consensus), backed by € 54 M of Capex (-13% vs. 2019; vs. € 45 M BS(e)). With respect to the latter, we highlight that the level of investment as of 9M’20 stood at €-27 M (50% of its target’20) and that, were investments not to be made this year, they would materialise in 2021.
With all this in mind, the 3Q’20 results were robust, and better than expected, and we expect the reception to be positive given the stock’s lacklustre performance recently (-7% since 2Q’20 results; +1% vs. IBEX). SELL. T.P. € 58.50/sh. (upside +8.33%).