Original-Research: euromicron AG (von GBC AG): BUY

Original-Research: euromicron AG - von GBC AG

Einstufung von GBC AG zu euromicron AG

Unternehmen: euromicron AG

ISIN: DE000A1K0300

Anlass der Studie: Research Report (Update)

Empfehlung: BUY

Kursziel: EUR 10.50

Letzte Ratingänderung: -

Analyst: Felix Gode, CFA

* With sales revenues of EUR139.84 million, euromicron AG fell below the

previous year's level by 10.8%. The Smart Buildings segment was primarily

responsible for the decline. Sales performance remained subdued against the

backdrop of the ongoing reorganisation of the largest subsidiary,

euromicron Deutschland GmbH. In addition to strategic reasons, such as the

rejection of risky large orders, a further reason for the modest sales

performance was the continuation of legacy projects, which make a low or

even negative contribution to profit. In the other two segments, the

decline in sales was significantly more moderate. It should also be borne

in mind that the discontinued operations contributed EUR6.31 million to sales

in the previous year. Adjusted for these effects, organic sales declined by

7.1%.

* Sales performance was also reflected in the earnings figures.

Consequently, EBITDA was reported at -EUR3.46 million, after EUR2.65 million in

the previous year. Adjusted for one-off restructuring expenses, the decline

was somewhat more moderate. Nevertheless, even after adjustments, negative

EBITDA of -EUR1.69 million was recorded. The decline in earnings was

generated exclusively in the Smart Buildings segment, with a decrease of

EUR5.03 million to -EUR2.44 million. Increases in earnings were recorded in the

other segments Critical Infrastructures and Distribution. Margins also

increased year-on-year. The effects of the reorganisation are already

clearly visible here and show the direction that euromicron AG can take

after the reorganisation has been successfully completed.

* Of special note here is that the measures announced by management to

in-crease profitability are being implemented. Breaking with its past,

euromicron AG is now focused on profitable orders and earnings performance.

Even though the realignment of the Group and the resulting charges are

continuing longer than previously thought, we consider that the company is

on the right track and initial successes can already be seen.

* Because of the weaker HY1 2016, the Executive Board of euromicron AG has

adjusted its guidance for FY 2016 downwards. Although it is assumed that

HY2 2016 will turn out to be significantly better, it is not expected that

the losses will be completely offset, due in part to the postponement of

orders in HY1 2016. Against this backdrop, we have lowered our forecasts

for FY 2016 and now expect sales revenues of EUR338.41 million and an

adjusted EBITDA of EUR10.59 million. This corresponds to an EBITDA margin of

3.1%. For the coming year, we expect an increase in the EBITDA margin to

4.9%.

* Based on the lower forecasts for FY 2016 and 2017, we have also adjusted

our target price for euromicron AG. After our previous target price of

EUR12.10, we have now calculated a fair value of EUR10.50 Based on the current

share price, this results in an unchanged BUY rating. In the medium term,

we remain convinced that euromicron AG can again reach the margin target on

an EBITDA basis of 8%-11%. We are also convinced that the reorganisation of

the Group will provide a positive impetus on the sales and earnings side in

the near future. Taking this into consideration, the euromicron AG share

seems favourably valued.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/14173.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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http://www.gbc-ag.de/de/Offenlegung.htm

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