GBC AG: Landi Renzo S.p.A. | Rating: 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 Note
Empfehlung: Buy
Kursziel: 0.98 EUR
Letzte Ratingänderung:
Analyst: Marcel Goldmann, Cosmin Filker

HY1 2022: Continuation of dynamic revenue growth despite more challenging market environment; significant earnings improvements; GBC estimates and target price maintained after confirmation of corporate guidance  
Business development in HY1 2022
 
Landi Renzo S.p.A. announced its half-year figures for the current business year in mid-September. According to these figures, the technology company was able to continue its dynamic growth course in the first six months despite difficult general conditions (the Ukraine conflict, after-effects of the COVID-19 pandemic, etc.), which had a negative impact on turnover and results. Compared to the same period of the previous year, Group revenues increased significantly by 50.0% to € 144.45 million (first half of 2021: € 95.96 million).
 
This was due to strong (organic) growth effects from an increased business volume in both business fields - Green Transportation and Clean Tech Solutions. In addition, inorganic growth effects resulting from the acquisitions (Metatron Group and Idro Meccanica) also contributed significantly to the positive turnover trend.  
The Group's sales revenues were primarily generated by the core business field of Green Transportation. In this segment, revenue increased significantly by 22.0% to € 93.85 million (first half of 2021: € 76.94 million), mainly due to business growth in the aftermarket sector (especially in Europe and Turkey) and the M&HD sector. The Metatron Group, which was acquired in the summer of 2021, contributed € 6.68 million to the segment's revenue increase.
 
The Clean Tech Solutions business field (SAFE & CEC, consolidation of the investment from May 2021) was also able to increase its segment revenues dynamically by 160.0% to € 50.60 million (first half of 2021: € 19.02 million), of which € 2.72 million is attributable to Idro Meccanica S.r.l., which was acquired at the beginning of the year. With its compressor systems, the business unit benefited in particular from increased demand for natural gas and biogas infrastructures (CNG business growth: +14.0%; RNG growth: +127.0%). In addition, the company also observed increased demand for hydrogen compressor solutions and accordingly also achieved an increased business volume in this area.  
On a pro forma basis, segment revenues increased by 18.8% to € 50.60 million compared to the same period of the previous year (pro forma revenues including SAFE & CEC revenues from January to June 2021: HY1 2021: € 42.60 million). With regard to the order situation, the Landi Renzo Group announced that the order backlog at the end of the half-year was significantly above the previous year's level. This means that this business field has a good starting point to continue the growth course of the segment.
 
All in all, the sales growth achieved showed that the Group portfolio and the technologies it offers were in strong demand from the various customer groups.
 
In parallel to the positive development of turnover, the Group's operating profit (EBITDA) rose significantly by 49.2% to € 5.31 million (first half of 2021: € 3.56 million) compared to the same period of the previous year. Adjusted for one-off costs (e.g. M&A costs), adjusted EBITDA (Adj. EBITDA) for the first half of 2022 amounted to € 6.54 million, which was around 46.0% higher than in the same period of the previous year (first half of 2021: € 4.48 million).
 
With € 3.32 million adjusted EBITDA in the Green Transportation segment (first half of 2021: € 1.74 million) and € 3.23 million adjusted EBITDA in the Clean Tech Solutions segment (first half of 2021: € 2.74 million), around half of the Group operating result was attributable to the respective business segment. In terms of Group profitability, the adjusted EBITDA margin of 4.53% confirmed the operating margin level of the previous year's period (first half of 2021: 4.67%).  
On a net level, the technology group had to accept a negative annual result (after minorities) of € -6.83 million in the first six months of the current financial year. However, it should be taken into account that the net result of the same period of the previous year was very strongly positively influenced by a consolidation gain from a fair value measurement of SAFE & CEC amounting to € 8.80 million. Accordingly, the net result on a comparable basis has also improved noticeably after deducting this special effect, which was not operationally related.   
Business development in Q2 2022
 
The steady dynamic growth of the technology group is also particularly evident in the quarterly analysis. After a high-growth first quarter (+101.2% increase in revenue compared to Q1 2021), Landi Renzo continued on its growth path with high growth momentum in the second quarter of the current financial year with a 23.6% increase in consolidated revenue to € 77.53 million (Q2 2021: € 62.70 million).  
The infrastructure business, which is represented by the SAFE & CEC Group, proved to be the main growth driver. In this business field, revenue increased significantly by 57.6% to € 29.98 million (Q2 2021: € 19.02 million) compared to the same quarter of the previous year. The core business field Green Transportation also recorded significant growth in the past second quarter and increased its segment revenues by 8.90% to € 47.55 million (Q2 2021: € 43.68 million).
 
At the operating result level, EBITDA increased significantly by 8.4% to € 3.48 million (Q2 2021: € 3.21 million) in line with their positive business development. In parallel, the EBITDA margin decreased slightly to 4.49% (Q2 2021: 5.11%). In contrast, Group EBITDA adjusted for one-off costs (e.g. M&A costs) decreased only slightly by 2.5% to € 3.87 million (Q2 2021: € 3.97 million) compared to the same quarter of the previous year. In the same step, the adjusted EBITDA margin decreased to 5.00% (Q2 2021: 6.33%). This still reflects the ongoing pressure on margins due to high cost inflation in the procurement markets.
 
Overall, the development of turnover in the first half of 2022 was satisfactory. Despite the challenging general conditions, we succeeded in continuing on our growth path with momentum. Landi Renzo's earnings performance was in line with our expectations.  
Forecast and evaluation
 
Against the backdrop of the solid half-year performance, the promising growth strategy and the confirmed corporate guidance, we have also maintained our previous forecasts for the current financial year and the following years.
 
Overall, we believe that the Landi Renzo Group, with its strategy and positioning, is still well positioned to continue dynamically on its growth path. Parallel to this, it should be possible to achieve significant improvements in results.
 
Based on our unchanged revenue and earnings estimates, we hereby confirm our previous price target of € 0.98 per share. In view of the current price level, we continue to give the share a 'buy' rating and see significant upside potential.
 

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/25835.pdf

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Date (time) of completion: 07/11/2022 (16:22 pm) Date (time) of first distribution: 08/11/2022 (10:30 am)

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