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

9-month 2022: Landi Renzo continues on a clear growth path despite difficult environment; positive operating earnings development; GBC estimates and price target confirmed after reaffirmation of corporate guidance
 
Business development 9-month 2022
 
Landi Renzo S.p.A. published its nine-month figures for the current business year at the end of November. According to these figures, the technology group continued its growth course in the first three business quarters despite a challenging environment (Ukraine war, COVID aftermath, supply chain problems, etc.). Compared to the same period of the previous year, consolidated revenues increased significantly by 33.1% to € 216.35 million (9M 2021: € 162.56 million).
 
The dynamic increase in group turnover was due to significant (organic) growth effects from an increased business volume in both business fields - Green Transportation and Clean Tech Solutions. The technology company benefited in particular from increased investments in gas and hydrogen infrastructures (infrastructure business) and robust after-market demand (automotive retrofit business). In addition, inorganic growth effects from acquisitions (Metatron Group and Ido Meccanica) also contributed significantly to the positive sales trend.  
The Group's revenues were primarily driven by the core business area of Green Transportation. In this Group division, the revenue generated increased significantly by 17.9% to € 141.24 million (9M 2021: € 119.83 million), mainly due to the recovery effects in the aftermarket business in Latin America and Europe as well as increased orders from leading OEM customers. The Metatron Group, which was acquired last summer, contributed € 10.41 million to the increase in segment revenue.  
The Clean Tech Solutions business field (SAFE & CEC, consolidation of the investment from May 2021) was also able to increase its segment revenue (excluding the revenue of Idro Meccanica S.r.l. of € 3.68 million acquired at the beginning of 2022) by 7.80% to € 71.44 million (pro forma revenue without Idro Meccanica 9M 2021: € 66.30 million). The significant increase in revenue reflects the increased interest of numerous countries in gas mobility, which are expanding their gas-based distribution networks (gas filling stations, etc.) as part of this. It should be noted here that the business development of the division was also negatively affected by difficulties on the procurement markets (unstable supply chains, etc.), and thus stood in the way of an even more positive business development.  
With regard to the order situation of the infrastructure business, the Landi Renzo Group announced that the division continues to be in 'growth mode' and has an order backlog covering the first half of the 2023 financial year.
 
Parallel to the positive group revenue development, the operating result (EBITDA) of the technology company also increased significantly by 18.8% to € 7.07 million (9M 2021: € 5.95 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 nine months of the current financial year amounted to € 8.70 million, which was 15.1% higher than in the same period of the previous year (9M 2021: € 7.56 million).  
The Green Transportation segment accounted for € 4.42 million of the adjusted EBITDA (9M 2021: € 2.80 million) and the Clean Tech Solutions segment for € 4.32 million (9M 2021: € 5.37 million). Both segments thus contributed almost equally to the Group's operating result. In terms of operating profitability, the adjusted EBITDA margin of 4.0% almost confirmed the operating margin level of the same period of the previous year (9M 2021: 4.6%).
 
At the after-tax level, on the other hand, Landi Renzo posted a negative net result (after minorities) of € -10.12 million, a deterioration compared to the same period last year (9M 2021: € -1.90 million). It should be noted, however, that the net result of the same period of the previous year was very strongly influenced by a consolidation gain (€ 8.80 million) from a fair value measurement of SAFE & CEC.  
Based on the signs of recovery in some core markets and the order book at SAFE & CEC, management has confirmed its previously issued guidance for the 2022 financial year and continues to expect improved Group results compared to the previous year.
 
Business development in Q3 2022
 
The quarterly view also reflects well the steady growth of the Landi Renzo Group. After a high-growth second quarter (Q2 growth of 23.6% to € 77.53 million), the technology company was also able to continue its previous growth series in the third quarter with significant revenue increases of 8.0% to € 71.91 million (Q3 2021: € 66.60 million).  
Growth in the third quarter was primarily driven by significant growth impulses in the Green Transportation business field, which increased its segment revenue significantly by 10.5% to € 47.39 million (Comparable Q3 revenue 2021: € 42.89 million). The Clean Tech Solutions division also continued to expand its infrastructure business with moderate revenue growth of 3.4% to € 24.52 million (Comparable Q3 revenue 2021: € 23.71 million).
 
On the operating result level, contrary to the positive revenue trend, a decline in adjusted EBITDA by 29.9% to € 2.16 million (Q3 2021: € 3.08 million) had to be accepted due to a less favourable revenue mix (higher OEM revenue share) and higher raw material costs. In parallel, the adjusted EBITDA margin decreased to 3.0% (Q3 2021: 4.60%).  
Forecast and evaluation
 
Against the backdrop of their solid nine-month performance, confirmed corporate guidance and successful growth strategy, we have maintained our previous estimates for the current financial year 2022 and subsequent financial years.
 
In view of our unchanged sales and earnings forecasts, we hereby confirm our previous price target of € 0.98 per share. With regard to the current price level, we continue to give the Landi Renzo share a 'buy' rating and see significant upside potential.
 

Die vollständige Analyse können Sie hier downloaden: http://www.more-ir.de/d/26155.pdf

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Date (time) of completion: 07/12/2022 (15:01 pm) Date (time) of first distribution: 08/12/2022 (10:00 am)

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