Equity Research COMPANY FLASH - boerse
Equity Research COMPANY FLASH 21 May 2015 AMAG Roadshow with the company Austria Our conclusion Steel & Metals Reuters: AMAV.VI Bloomberg: AMAG AV Hold Closing price as of 20-May-15 EUR 32.50 Target price High/Low (12M) Market cap. We hosted a Roadshow with CFO and IR in Frankfurt. The day supported the view we highlighted in our Update from 11 May that AMAG is a company with solid growth potential and an attractive dividend. The targeted EBITDA of 130-140mn for 2015 seems to be well secured. EUR 35.50 EUR 33.93/22.50 EUR mn 1,146 AMAG is trading at a P/E of 17 and an EV/EBITDA of 8 based on 2016 consensus. It is ambitious but not that expensive. Facts & Analysis Analyst: Christian Obst, CEFA +49 89 5150 1805 [email protected] AMAG has a strong order book and a positive view on aluminum demand in the mid to long term. The plants of AMAG 2014 are ramping up as planed. The management ordered most of the new equipment for the 2020 project and building should start in 2H15. Demand from the transport sector, especially the automotive industry is strong and it seems that the trend towards aluminum applications is gaining further speed. A lowlight is the demand for bright products as the trend towards LED reduces the requirements for aluminum in lightning products. The demand from the packaging industry is stable, as always, and the main customer like to grow with AMAG also in the future. AMAG 2014: AMAG is ramping up the hot rolling mill with one shift and is in the process to certify the products which they shifted from the old mill to the new line. This process could take months to more than two years. The automotive industry is short of reliable suppliers as demand grows strongly and therefore, the process is quicker. The airline industry has an established system of suppliers and contracts and production is facing some delays in certain areas. Therefore, they are not in a hurry to certify new lines. AMAG 2020: AMAG has ordered most of the technical facilities. Start of the work should be early 2016 and the ramp up-phase should begin mid 2017. At the end of the investments, a successful ramp-up of the facilities (volume & quality) and all requirements concerning licensees of products AMAG should be able to produce more than 300,000 tons vs. 170,000 in 2014. We expect this number not before 2019/20. AMAG launched a program to reduce working capital and a first impact was the cash generation during 2H14 supporting also the increase of the dividend. Going forward, the task of the management is a stable level of inventories despite the planned increase of production and shipments. However, the main goal is not pure cash generation but the optimization of the flow/usage of the material through the production process. Dividend policy: The former dividend policy of 20%-30% payout ratio is under review. A new policy will be communicated in the course of the year. We think that they will almost keep the current level of dividend also in the coming years with high investments as underlying operational cash flow should remain strong. Below EBITDA: Depreciation will increase by approximately EUR 10mn because of the investments into AMAG 2014. The net interest payments will also increase, but only by a low single digit number because of the slight rise in debt and the expected start of the financing requirements for AMAG 2020. AMAG guide for a normalized tax rate between 25% and 27% as the activated all remaining tax loss carry forwards in 2014. Cash tax might equal the reported tax from 2017 on. Key financials Valuation ratios EUR mn 2013 2014 2015E 2016E 2013 2014 2015E Sales 786.4 823.0 922.9 997.5 x EV/Sales 1.1 1.2 1.4 2016E 1.4 EBIT 72.4 56.1 70.7 88.6 EV/EBIT 11.9 17.8 18.8 15.9 EPS adj. (EUR) 1.59 1.65 1.38 1.76 P/E adj. 14.2 15.1 23.6 18.5 Source: Company data, Baader-Helvea Equity Research Important disclosures: Please read information on the last pages of this report 1 Equity Research COMPANY FLASH AMAG Disclaimer Baader Bank AG, Weihenstephaner Strasse 4, 85716 Unterschleissheim, Germany Helvea SA, rue de l’Arquebuse 7, 1204 Geneva, Switzerland Baader Bank AG is the parent company of Helvea SA and/or Helvea Limited. Baader Bank AG, Helvea SA and Helvea Limited are collectively referred to as “Baader-Helvea Group Europe Companies” below, and each of them is referred to separately as a “Baader-Helvea Group Europe Company”. Baader Bank AG and its subsidiaries and affiliates, including Helvea SA and Helvea Limited, are collectively referred to below as the “Group Companies”. All estimates and opinions included herein represent the independent judgment of the responsible analysts of the Relevant Baader-Helvea Group Europe Company as of the date of publication of this Research Document. The Relevant Baader-Helvea Group Europe Company reserves the right to modify the views expressed herein at any time without notice and the right not to update this information and to discontinue coverage of the company that is the subject of this Research Document without notice. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of the information and opinions contained in this document. Neither the Group Companies, any of their authorized representatives or employees nor any other person accepts any liability whatsoever for any loss arising from any use of this Research Document or its contents or otherwise arising in connection therewith. Please note the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by § 34b WpHG (German Securities Trading Act – Wertpapierhandelsgesetz) and other applicable rules under http://www.baaderbank.de/de/disclaimer-research.html. Additional information according to the regulation governing the analysis of financial instruments (FINAV – Finanzanalyseverordnung). Research Documents with recommendation changes (rating or target price) published in the twelve months prior to the publication of this Research Document covering the same financial instruments or issuers. AMAG price chart Percentage of companies within this rating category Buy: Hold: Sell: 2 43.7% 48.5% 7.8% 21 May 2015 Equity Research COMPANY FLASH AMAG Contacts Volker Bosse, CEFA Co-Head Equity Research +49 89 5150 1815 [email protected] Andre Remke, CFA Co-Head Equity Research +49 89 5150 1816 [email protected] Gerhard Schwarz, CEFA Head of Equity Strategy +49 89 5150 1812 [email protected] Automobile & Parts Klaus Breitenbach +49 69 1388 1961 [email protected] Business Services & Logistics Chris Burger, CFA +41 43 388 9259 [email protected] Chemicals Markus Mayer +49 89 5150 1818 [email protected] Construction Patrick Appenzeller +41 43 388 9267 [email protected] Consumer Retail & Consumer Food & Beverage, Luxury Goods Home & Personal Care Volker Bosse, CEFA Andreas von Arx Christian Weiz +49 89 5150 1815 +41 43 388 9257 +49 89 5150 1808 [email protected] [email protected] [email protected] Financials Banks & Financial Services Insurance Tim Dawson Daniel Bischof, CFA +41 22 354 9169 +41 43 388 9263 [email protected] [email protected] Health Care Biotechnology, Pharmaceuticals Pharmaceuticals Olav Zilian, MD Ph.D Odile Rundquist, Ph.D +41 22 354 9167 +41 22 354 9159 [email protected] [email protected] Reto Amstalden Stefan Gächter, CFA Christine Reitsamer, CFA Peter Rothenaicher +41 43 388 9261 +41 43 388 9262 +49 89 5150 1811 +49 89 5150 1817 [email protected] [email protected] [email protected] [email protected] Real Estate Andre Remke, CFA Christine Reitsamer, CFA Jan-Hauke Jendrny +49 89 5150 1816 +49 89 5150 1811 +49 89 5150 1803 [email protected] [email protected] [email protected] Small & Mid Caps Christian Weiz +49 89 5150 1808 [email protected] Steel & Metals Christian Obst, CEFA +49 89 5150 1805 [email protected] Technology Software & IT Services Technology Hardware Knut Woller, CEFA Guenther Hollfelder, CFA +49 89 5150 1807 +49 89 5150 1806 [email protected] [email protected] Gerhard Schwarz, CEFA Heinz Imbacher +49 89 5150 1812 +49 89 5150 1018 [email protected] [email protected] EQUITY RESEARCH Industrials Industrials (Switzerland) Industrials (Austria) Machinery (Germany) EQUITY STRATEGY EQUITY SALES DERIVATIVES SALES EQUITY SALES TRADING Frankfurt +49 69 1388 1357 Geneva +41 22 354 9050 London +44 20 7054 7100 Munich +49 89 5150 1850 Zurich +41 43 388 9200 For North American clients: New York +1 212 935 5150 Montreal +1 514 288 3556 Munich Frankfurt +49 69 1388 1355 Geneva +41 22 354 9100/9191 London +44 20 7054 7100 Munich +49 89 5150 1870 New York +1 212 935 5150 +49 89 5150 1845 PUBLICATION ADDRESSES Baader Bank AG Equity Research Weihenstephaner Strasse 4 85716 Unterschleissheim, Germany T +49 89 5150 1810 21 May 2015 Helvea SA Equity Research Rue de l’Arquebuse 7 P.O. Box 5552 1211 Geneva 11, Switzerland T +41 22 354 9050 3
© Copyright 2024