Petrol Group: Delivering, expanding, distributing (stays BUY)
We have revised up our 12M price target (PT) for Petrol Group to EUR 614/share (from EUR 429), which offers 36% upside, and we keep our BUY on the stock. This year, Petrol has bought a Croatian fuel retailer, Crodux, doubling its exposure in Croatia. It has managed the pandemic successfully and is very likely to exceed its FY EBITDA target this year, in our view. Moreover, the company now plans to pay out 50% of its net earnings to shareholders, up from the c.40%, on average, paid in 2012-19. Petrol is also growing well in its energy segment and transforming its fossil fuel driven business towards the electric future. We also believe there is more upside from the 2022E volumes and margins, driven by Slovenia’s fuel deregulation last year and stronger demand ahead. With a dividend yield close to 7% over the next three years, our EBITDA CAGR at 8%, the EV/EBITDA of 5.3x on average, and its net debt/EBITDA below 2x, we are very comfortable with our PT revision and believe that the market should appreciate Petrol’s successful execution further.Petrol Ljubljana. Petrol dd Ljubljana is a Slovenia-based company engaged in the provision of oil and other energy products. The Company operates through two segments, Oil and Merchandise sales and Energy activities. The Oil and Merchandise sales segment consists of sale of oil and petroleum products, and sale of supplementary merchandise comprised of automotive products, foodstuffs, accessories, tobacco, lottery products, coupons and cards. The Energy activities segment consists of sale and distribution of gas; generation, sale and distribution of electricity and heat; energy consumption projects and comprehensive energy supply projects, and environment activities. As of December 31, 2011, it operated a number of subsidiaries based in Slovenia, Austria, Bosnia and Herzegovina, Croatia, Serbia, Montenegro and Macedonia, among others. On February 11, 2013, the Company acquired a 51% stake in Instalacija doo. On May 10, 2013, the Company acquired a 100% stake in Nafta Geoterm doo.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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