EUR 100.00 For Business Accounts Only

VOCENTO: 1H’20 RESULTS (ANÁLISIS BANCO SABADELL)

2Q'20 vs. 2Q'19 Results
Sales: € 74.42 M (-24.6% vs. -24.2% BS(e));
EBITDA: € 5.65 M (-52.1% vs. -90.1% BS(e));
EBIT: € 0.66 M (-90.2% vs. € -3.7 M BS(e));
Net Profit: € -5.48 M (€ 3.21 M in 1H'19 vs. € -5.4 M BS(e));
1H'20 vs. 1H'19 Results
Sales: € 163.7 M (-15.6% vs. -15.4% BS(e));
EBITDA: € 6.57 M (-54.3% vs. -85.5% BS(e));
EBIT: € -3.14 M (€ 4.7 M in 1H'19 vs. € -7.5 M BS(e));
Net Profit: € -11.18 M (€ -1.0 M in 1H'19 vs. € -11.1 M BS(e));

The results were hit hard by Covid-19, in line in sales and beating expectations in EBITDA thanks to greater cost efficiencies (mainly in written press). 2Q’20 sales fell -24.6% (vs. -24.2% BS(e)) with circulation revenues -11.3%, advertising revenues -22.6% and other sales -8.3%. 2Q’20 EBITDA came in at € 5.6 M (vs. € 1.2 M BS(e)) thanks to the efficiency measures put in place (2Q’20 OPEX -20.9%, mainly in written press: commissions, furlough plans, suppliers, etc.) that have allowed the company to absorb part of the drop in sales. We also highlight the ordinary cash generation of € 6.6 M in 1H’20 (€ 2.1 M in 2Q’20), leaving NFD at € 67.5 M (vs. € 52.8 M in 2019), hit very hard by IFRS 16 due to the rents in the new offices, which had a € 15.5 M impact (excluding this effect, NFD in 1H’20 would have remained flat vs. 2019). The NFD/EBITDA ratio stands at 1.7x, whereas the company has cash and credit lines totaling € 68.5 M (vs. € 43.5 M of short-term debt).
We expect a positive impact due to the greater cost control and the positive cash generation in a quarter hit hard by Covid-19, especially bearing in mind the stock’s poor performance since Feb’20 highs (-40% in absolute terms and -12% vs. IBEX). We reiterate BUY. T.P. € 1.10/sh. (upside +61.80%).