Essity reported a marginal miss vs the consensus, although beating our profit estimates. While cost inflation continued to persist, the first effects of recent price increases buffered the margin impact.
Essity announced a longer-term growth target of 5%+, underpinning an ambition to move to faster growth categories. All in all, an encouraging update barring the marginal top-line miss. However, we do not expect any significant changes to our estimates due to the limited visibility on plans to
Companies: Essity AB Class B
Essity reported mixed Q2 21 numbers. Sales were up 9.5% on an organic basis, driven by a 26.1% rise in Professional Hygiene sales and 12.7% increase in personal care. As expected, the adjusted EBITA margin contracted 1.5pp to 11.8%, hurt largely by the steep increase in raw material and energy costs.
We will reduce our estimates, given the challenging raw material headwinds, which should lead to higher margin pressures in spite of the strong top-line recovery in the pandemic-hit segments.
Essity reported poor Q1 21 numbers, missing estimates. Sales were down 9.9% on an organic basis, hurt by a 27.5% decline in Professional Hygiene. Adjusted EBITA margin contracted 2.7pp to 13.1%.
Essity also announced an agreement to acquire an incremental 44% stake (total stake at 94%) in Colombian firm Productos Familia (market leader in Feminine care, incontinence and consumer tissue in the Colombian market) for ~SEK 5.72bn.
We will reduce our estimates, given the softer than expected showin
Essity reported strong Q4 20 numbers, beating consensus estimates with an organic revenue decline of 0.5%, attributable to the decline in professional hygiene (-15.1%), which was partly offset by growth in consumer tissue (+5.6%) and personal care (+2.2%). Adjusted EBITA came in at SEK4.39bn with the margin at 14.2%.
Essity proposed a FY20 dividend of SEK6.75/share and upgraded its long-term ROCE target to above 17%. However, we do not expect any significant change to our estimates, due to the
Essity reported a weak Q3 20, as sales declined by 5.1% owing to a 21.4% contraction in professional hygiene. The adjusted EBITA was down 1%, with the margin at 14.4% (+160bp). In addition, the Board proposed a dividend of SEK 6.25, having earlier postponed the decision. Essity also upgraded its longer term adj. ROCE target to 17%, which will benefit from the online transition as well as incremental efficiency improvements. Factoring in the big decline in professional hygiene, we will be trimmin
Essity announced a muted Q2 showing, reporting a sales decline of 9.3%, driven by a 9.4% decline in personal care and a 30.7% decline in professional hygiene. This was partly offset by Emerging Markets driven growth in consumer tissue (+4.3%). In spite of the sales decline, the improved product mix and lower raw material costs helped increase EBITA by 1.3% (associated margin +1.7pp). Given the softer-than-expected Q2 performance, we will be trimming our estimates.
Essity announced a strong set of Q1 numbers. Sales were up 7.8%, organically, to SEK33.7bn, with back-loaded growth (19.7% in March). The volume-led growth (+5.9%) as well as continuing drop in input prices resulted in a 5.4pp EBITA margin expansion, which drove an 87% increase in net profit.
However, we do not expect any significant changes in our estimates, as we believe the pull-forward effects should only have a phasing impact rather than driving a meaningful increase in overall sales.
Essity remains well positioned to exploit secular growth trends in the health/hygiene space. Backed by a very robust cost structure in place, we believe the company will continue to leverage the expected strong volume growth to sustain its current earnings momentum.
Essity reported Q4 19 organic growth of 3.6% with consumer tissue leading with +4.9%. Regionally, emerging markets delivered another strong quarter (+6.6%). Adjusted EBITA came in at SEK 4.7bn (margin 14.1%). The company proposed a final dividend of SEK 6.25/share.
On the cautious side, the company announced price cuts in consumer tissue Europe, effective Q1 20. However, we do not expect significant margin pressure and foresee no meaningful change in our estimates or target price.
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Interims confirm substantial progress is being made at Sosandar, and validate the strategy which is design-led, data-driven, agile and benefiting from forensic forward planning. The results are clear, with revenue up 184%, actives +41% and gross margin up 420bps. Alongside cost management and scale economies, EBITDA losses reduced. Supply chain disruption has been minimal and, using some of the placing proceeds, stock intake has stepped up markedly for peak as planned. This has driven sales grow
Companies: Sosandar Plc
Victoria has announced the accretive acquisition of the highly complementary rugs and UK carpets divisions of Balta Group NV for a cash consideration of approximately £117m. The acquisition is subject to the conclusion of the carve out of the divisions from Balta and is expected to complete in April 2022. The rugs business is a well-established operation and is the No.1 producer in Europe and the No.2 globally. The carpets activities increase the scale of Victoria’s UK carpet business and add no
Companies: Victoria PLC
discoverIE has reported a strong set of H1 results with sales up +21% (+15% organic), operating margins up 0.8ppts and underlying EPS up +37%. The interim dividend has been raised by 6%, with the Board highlighting the strategy can fund sustainable dividend growth and a higher level of investment in acquisitions from internally generated resources. With a £50m inflow in H2 from the disposal of the distribution businesses, acquisition-led upgrades are highly likely to follow, in addition to the 4
Companies: discoverIE Group PLC
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IG Design Group’s interim results reflect a challenging trading period despite strong underlying demand. Group revenue rose by 11% year on year (yoy) but was below group expectations due to global supply chain disruptions. Compounded by strong cost headwinds and inflationary pressures, this has had an adverse impact on profitability, notwithstanding the group’s strong cost control and cash management. The group is actively mitigating these pressures in conjunction with its customers. Customer se
Companies: IG Design Group plc
Victoria has reported record first half results that capture the benefits of strong consumer demand, operational efficiencies and acquisitions that provide on-going opportunities for additional synergies. There is a compelling organic and inorganic investment case that supports our expectation of share price outperformance. We introduce a PT of 1325p.
Victoria has reported results to March 2020, including a positive update on trading for the first quarter. Whilst Q1 FY2021E revenues were 64% of the Group’s pre-COVID budget, there has been a strong recovery across the period from 35% in April to 102% in June. Like-for-like organic revenue growth for FY2020 was 0.4% despite significant COVID impacts from late-February and the gross margin improved to 36.4% (2019 35.6%). £385m net debt at 30 June (excluding IFRS16) also compares favourably to th
Victoria has proved to be highly resilient in a challenging first half with revenues of £305.5m (H1 FY2020A £312.3m). The Group has seen 9.2% like for like revenue growth since the AprilMay lockdown and with the added benefit of operational actions and synergies the underlying EBITDA margin for the June-September period was ahead 300 bps LFL at 20.1% (H1 overall 17.2%). Net debt at 3rd October reduced by £5m from the year end to £364.4m, excluding IFRS 16 lease liabilities of £78.5m, with improv
Ahead of next week’s results, we are publishing revised forecasts that capture the benefit of the recent acquisition of Cali Bamboo, a fast growing US distributor. With the benefit of Koch’s £75m preferred equity investment (‘PEI’), management has now invested over £160m in acquisitions in the current financial year to acquire c.£27m of EBITDA, whilst remaining in-line with its 3x senior debt/EBITDA policy. June’s trading update confirmed a robust organic growth outlook and management remains ke
Surface Transforms has made significant strides to becoming a volume producer to global automakers. The Group has secured major multi-year orders, successfully raised funds for growth, refreshed its Board and wider management team, and announced a new more efficient manufacturing strategy. That said, as we discussed recently, 2021e is a transitional year and there is risk of delays to the drawdown of discs by OEMs. Surface has flagged that £2m of revenue, out of a £27.5m contract with OEM 8, may
Companies: Surface Transforms plc
Games Workshop’s (GAW’s) trading update indicates sales growth for Q122 (three months to 29 August 2021) is in line with management expectations. Management has highlighted pressure on freight costs and currency exchange rates given GAW’s high international exposure. The declared dividend of 25p per share brings the year-to-date total to 65p. Our forecasts for FY22 and FY23 are unchanged. Our DCF-based valuation remains £129 per share.
Companies: Games Workshop Group PLC
Excellent 1H21 results were flagged in the July update; double-digit revenue growth highlighting a rapid recovery from the COVID-blighted 2020 and demonstrating just how well Quixant has ridden the storm through both the Gaming Division and Densitron. The group’s efforts to maintain quality and support customers through last year is paying off in business retention and new prospects as its markets recover. That goodwill earned will also enable it to pass on price rises from the ongoing global co
Companies: Quixant Plc
Transense Technologies plc, the developer, manufacturer and licensor of sensor technology and equipment, has reported full-year results in line with our forecasts (upgraded in February 2021) with a positive EBITDA and profit after tax. Net cash was in line at c.£1m but did not include iTrack royalties for Q4 end July. We are optimistic that progress will continue in each of the Company’s three divisions and have upgraded revenue and gross profit expectations for 2022 and 2023. This additional in
Companies: Transense Technologies PLC
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