WOOD Flash – ERRATUM: Alkaloid – 4Q23 – reaping the benefits of recent investments

There was an error in our flash note, published today. Please disregard the previous version.
Last week, Alkaloid announced solid 4Q23 numbers, topping off the strong results for FY23. Most notably, the 4Q23 revenues grew by 22% yoy (+16% for FY23); this is despite a season slowdown in Russia/CIS. The growth was broad-based, with domestic sales and sales in Europe all up at least 20% yoy, reflecting recent investments in a new plant and products (both in pharmaceutics, as well as its FMCG business). Supporting this was even higher spending on sales and marketing (+84% yoy in 4Q23), which weighed on margins in the quarter; we treat this, however, as an investment in future top-line growth. Trading at our 2024E EV/EBITDA of 9.7x and PER of 15.6x, the stock remains fully valued vs. its peers, on a median EV/EBITDA 7.4x and PER of 11.6x. This, we note, has long been the case, and represents, perhaps, a premium for scarce quality companies on the Skopje exchange. This said, in recent years, Alkaloid has moved out successfully into new markets, with the capacity to meet the apparent demand, so may have a longer runway for growth than some, more established, players, in our view.