Original-Research: Landi Renzo S.p.A. (von GBC AG): Buy
^
Original-Research: Landi Renzo S.p.A. - von GBC AG
Einstufung von GBC AG zu Landi Renzo S.p.A.
Unternehmen: Landi Renzo S.p.A.
ISIN: IT0004210289
Anlass der Studie: Research study (Initial Coverage)
Empfehlung: Buy
Kursziel: 0.98 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker
The specialist for alternative fuels and hydrogen/biogas infrastructures;
Leading market positioning in alternative fuel systems and gas and hydrogen
infrastructures; Strong market trend towards biomethane and hydrogen
ensures high growth potential in gas/hydrogen mobility and infrastructure
business of the technology group; Promising growth strategy should enable
dynamic growth in revenue and earnings; Target price: 0.98 EUR; Rating: Buy
Revenue and earnings development 2021
The Landi Renzo Group's past financial year was characterised by
significant growth, the first-time consolidation of the SAFE & CEC joint
venture and the Metatron acquisition, as well as the ongoing corona
pandemic.
In the past financial year, the Landi Renzo Group was able to continue on
its growth path with a dynamic increase in Group revenue of 69.9% to EUR
241.99 million (PY: EUR 142.46 million). In particular, the first-time
consolidation of the SAFE & CEC Group (infrastructure business; with
revenue contribution through consolidation of EUR 69.08 million), after
Landi Renzo had previously gained control over the joint venture (51.0%
stake), led to this leap in growth. Adjusted for the consolidation effects
of SAFE & CEC and the Metatron acquisition (revenue contribution through
consolidation: EUR 6.10 million), there was a significant increase in
revenue for the core business (Green Transportation), also on a comparable
basis to the previous year, increasing by 17.1% to EUR 166.82 million. In
terms of the regional distribution of revenues, the Landi Renzo Group
generated 55.5% of its consolidated revenues of EUR 241.99 million in
Europe in the past financial year. The remaining revenues were generated in
North and South America (15.9%) and Asia and the rest of the world (28.6%).
Through the acquisition of Metatron in the summer of 2021, Landi Renzo has
significantly strengthened its Green Transportation segment in the area of
gas and hydrogen technologies for the propulsion of medium and heavy-duty
commercial vehicles (Mid & Heavy Duty) and at the same time significantly
expanded its geographical presence and customer base in this business
segment.
Significant increases were also achieved at the operating result level.
EBITDA (Adj. EBITDA) adjusted for special and non-recurring costs rose
significantly by 82.3% to EUR 14.61 million (previous year: EUR 8.02
million) compared to the previous year. The same applies to the reported
EBITDA, which jumped by 89.8% to EUR 12.62 million (previous year: EUR 6.65
million). The adjusted EBITDA margin (Adj. EBITDA margin) increased by
slightly to 6.0% (previous year: 5.6%). An even more positive margin
development was countered by negative effects, mainly in the form of high
material price inflation and supply chain problems, from the ongoing corona
pandemic.
The earnings contribution from the first-time full consolidation of the
infrastructure business of SAFE & CEC (Adj. EBITDA contribution: EUR 7.40
million) had a particularly positive effect on the operating result.
Taking into account depreciation, financing and tax effects, the net result
(after minority interests) for the past financial year was EUR -0.98
million, which is a significant improvement over the previous year (PY: EUR
-7.66 million). The net result was positively influenced by a positive
consolidation gain from the fair value valuation of SAFE & CEC (EUR 8.80
million).
The company also announced that on a pro forma basis (i.e. assuming full
consolidation of Metatron, SAFE & CEC, and the Indian JV for a full 12
months), it would have achieved consolidated sales of EUR 297.8 million and
adjusted EBITDA (Adj. EBITDA) of EUR 22.3 million in the past financial
year. The Clean Tech Solutions business segment accounted for more than
30.0% of this revenue.
Furthermore, in August of this year, the company announced the successful
completion of their subscription period (subscribed volume: EUR 57.1
million) for its initiated capital measure with a volume of up to EUR 60.0
million. With the help of this cash inflow, the company refinanced
acquisitions (Metatron, Idro Meccanica) and, at the same time, strengthened
its capital structure in order to advance the further growth-oriented
development of the company. In the course of this capital increase, a new
strategic shareholder, Itaca/Tamburi, was added to the shareholder base to
support the majority shareholder, the Landi family, in the long-term
development of the company. The current CEO, Christiano Musi, also
participated in the capital increase as a co-investor.
Overall, the Landi Renzo Group succeeded in returning to its growth path
last year and benefited from significant recovery effects in its core
business. The first-time consolidation of their infrastructure business
clearly boosted their revenue and earnings situation. The negative
influences of the still ongoing corona pandemic has stood in the way of an
even more positive operational development. On a strategic level, the
company has also significantly expanded its product portfolio with gas and
hydrogen solutions through the targeted acquisitions of Metatron and Idro
Meccanica, thereby substantially strengthening its market position. In
addition, the previously installed base of gas compressors (>6,000) was
increased by around 150 hydrogen compressors as part of their inorganic
growth.
Revenues and earnings forecasts
The Landi Renzo Group generally pursues a growth-oriented corporate
strategy. Key elements of this strategy are the further expansion of the
two divisions 'Green Transportation' and 'Clean Tech Solutions'.
In the core business 'Green Transportation' (components and systems for gas
and hydrogen mobility), growth is to be driven forward with the help of an
increased focus on emerging markets, such as India with strong growth in
gas mobility in this region and new markets. In addition, the Group intends
to strongly expand segment growth by expanding its business in the field of
gas and hydrogen mobility for medium and heavy trucks (the so-called Mid &
Heavy Duty segment). Market experts see a high growth potential for gas and
hydrogen technologies in this niche in particular, as gas-related
technologies in this area represent the only practicable alternative to
traditional diesel-powered trucks to date.
In the second division, 'Clean Tech Solutions' (compressor solutions for
infrastructures), the company aims to further expand its infrastructure
business with a focus on natural gas, biogas and hydrogen infrastructures
(including biogas and hydrogen filling stations, etc.). The expansion of
the compressor installation base associated with the compressor business
should also significantly increase the related high-margin maintenance and
service revenues and thus lead to lucrative recurring after-sales revenues.
M&As are also an important factor in the company's strategy. The company
always keeps the option open to expand or strengthen its technological
competence and customer base as well as its geographical presence through
targeted transactions.
For the current business year, Landi Renzo expects improvements in
consolidated sales and earnings compared to the previous year. Despite this
merely qualitative outlook for the current business period, the technology
company has published a long-term sales and earnings plan (new Business
Plan 2022 to 2025). According to this, the technology group expects average
annual revenue growth of 15.0% (CAGR) and double-digit EBITDA growth of
25.0% (CAGR) until 2025, whereby inorganic growth effects are not included
in this planning.
In Q1 2022, the company already achieved significant growth in revenue
(+100.1% to EUR 66.90 million) and EBITDA (+350.0% to EUR 1.80 million) and
thus already achieved a positive opening quarter. According to our
estimates, the order backlog in the Clean Tech Solutions segment amounted
to around EUR 85.0 million at the end of the first quarter and thus
provided a good starting point for further growth.
Against the background of this good positioning, the high innovative
strength and the promising growth strategy of the company, we also expect
dynamic sales development in the coming years. Both the 'Green
Transportation' segment and the 'Clean Tech Solutions' business field
should be able to record significant sales growth in the future due to
their strong market positions. Accordingly, we expect an increase in
revenue to EUR 287.74 million (previous year: EUR 241.99 million) for the
current financial year. For the following financial years 2023 and 2024, we
expect a further increase in revenue to EUR 323.88 million and EUR 357.17
million respectively.
Parallel to their dynamic growth in revenue, we expect significant
improvements in earnings in the coming years. Significant earnings growth
should be achieved primarily through the increased expansion of the
components and systems business for medium and heavy trucks and the
expansion of their infrastructure business (primarily thanks to the high-
margin after-sales business) since these business areas generally have
significantly higher margins than the previous core business (improved
revenue mix). In addition, we assume that the high scalability of the
business model and expected volume effects will lead to a disproportionate
increase in future earnings at all earnings levels. In addition, we expect
significant synergy effects from the integration of the companies acquired
in the past and from the even closer integration of the complementary
business areas, which should also significantly boost future earnings
development. According to its own information, Landi Renzo expects annual
savings of EUR 6.00 to 7.00 million from the group integration of the
acquired companies. Furthermore, expected price adjustments due to higher
procurement prices should also positively influence their future margin
development.
Specifically, we calculate an EBITDA of EUR 16.77 million for the current
financial year. In the following financial years 2024 and 2025, a further
increase in earnings to EUR 30.61 million and EUR 38.50 million
respectively should be possible due to the onset of economies of scale/
volume effects, synergies and a further improvement in the revenue mix. In
parallel, we expect a gradual increase in the EBITDA margin from 5.2% in
2021 to 10.8% in 2024.
Overall, we believe that the Landi Renzo Group is well positioned in both
business segments to benefit from the growth area of 'Green Mobility' and
the increased investments in gas and hydrogen infrastructures (due to the
biogas and hydrogen boom). This should enable the company to dynamically
continue on its growth path and achieve a disproportionately high
development of earnings.
Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/25205.pdf
Kontakt für Rückfragen
GBC AG
Halderstrasse 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
++++++++++++++++
Offenlegung möglicher Interessenskonflikte nach § 85 WpHG und Art. 20 MAR. Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (6a,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter: http://www.gbc-ag.de/de/Offenlegung
+++++++++++++++
Date (time) of completion: 29/08/2022 (10:08 am)
Date (time) of first distribution: 29/08/2022 (11:00 am)
-------------------übermittelt durch die EQS Group AG.-------------------
Für den Inhalt der Mitteilung bzw. Research ist alleine der Herausgeber bzw.
Ersteller der Studie verantwortlich. Diese Meldung ist keine Anlageberatung
oder Aufforderung zum Abschluss bestimmter Börsengeschäfte.
°