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

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Original-Research: euromicron AG - von GBC AG

Einstufung von GBC AG zu euromicron AG

Unternehmen: euromicron AG

ISIN: DE000A1K0300

Anlass der Studie: Research Report (Anno)

Empfehlung: BUY

Kursziel: EUR 10.50

Letzte Ratingänderung: -

Analyst: Felix Gode, CFA, Marcel Goldmann

* In FY 2016, euromicron AG achieved sales of EUR325.31 million, 5.7% less

than in the previous year. In particular, this decrease was mainly caused

by the 'Critical Infrastructures' segment which discontinued the business

unit fibreglas infrastructure and could not materialise some sales due to

not granted export licenses. In the 'Smart Buildings' segment the sales

decrease only was marginal, due to project postponements for component

deliveries. However, it has to be mentioned that a large-scale order was

contained in the previous financial years sales, which did not repeat in

2016. The 'Distribution' segment, on the other hand, was able to record an

increase in sales. Adjusted for the product lines that were discontinued in

the previous year (EUR10.6 million), the decline in organic sales was only

about 2.7%.

* Despite a decline in sales the reported EBITDA was reported at EUR7.39

million, slightly above the previous year's figure (EUR6.92 million), even

though the core segment, 'Smart Buildings', had a detrimental impact on the

operating profit due to temporary effects. Moreover, the operating profit

was reduced by re-structuring costs of EUR5.8 million. Adjusted for special

effects from restructuring measures, operating EBITDA was EUR13.15 million,

compared to EUR13.76 million in the previous year.

* It should be emphasized that the restructuring measures announced by the

management were implemented and have had an increasing impact on key

indicators. Breaking with its past, the company is now more focused on

profitable orders and puts more emphasis on earnings performance than

revenue development. The new orientation of the Group, which was initiated

in 2015, is now almost complete. We therefore expect a much lower negative

impact on earnings in the future. In general, we believe that the company

is on the right track, with successes becoming more obvious.

* For FY 2017, we expect a significant increase in sales and earnings. We

expect sales of about EUR335.00 million, mainly from the 'Critical

Infrastructures' segment, and EBITDA of EUR12.61 million. These again contain

extraordinary expenses of EUR2.5 million in connection with the restructuring

of the Group. Adjusted operating EBITDA (adjusted for restructuring

effects) is thus expected to be at EUR15.1 million; this corresponds to an

operating EBITDA margin of 4.5%. For 2018, we do not expect additional

extraordinary expenses, which should result in EBITDA increasing to EUR19.6

million. Accordingly, we expect to achieve an EBITDA margin of 5.5%.

* Based on the forecasts for FY 2017 and 2018, we have kept our target

price for euromicron AG at the same level. The fair market value based on

our DCF model is EUR10.50 (previously: EUR10.50). Based on the current share

price, this results in an unchanged BUY rating. Over the long-term, we are

convinced that euromicron will be able to achieve much higher EBITDA

margins than before. Furthermore, we are also convinced that the mostly

completed Group restructuring will have a positive impact on future sales

and earnings. Against this backdrop, it seems to us that the euromicron AG

share is favourably valued.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/15119.pdf

Kontakt für Rückfragen

Jörg Grunwald

Vorstand

GBC AG

Halderstraße 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Offenlegung möglicher Interessenskonflikte nach §34b Abs. 1 WpHG und FinAnV Beim oben analysierten Unternehmen ist folgender möglicher Interessenkonflikt gegeben: (5a,5b,11); Einen Katalog möglicher Interessenkonflikte finden Sie unter:

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

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