X.A – Beta Sec: Market Monitor- Market Comment- In the Spotlight (24/11/2022)

Market Monitor

X.A – Beta Sec: Market Monitor- Market Comment- In the Spotlight (24/11)

¢     Market Comment

AthEx continued on its upward march for another session on Wednesday, displaying consistency and resilience to external pressures once again. The benchmark remained above 900 points for another day with rotating selective interest to major large caps.

General index closed at 906.40 points, adding 0.70% to Tuesday’s 900.07 points. The large-cap FTSE-25 index expanded 0.69%, to end up at 2,202.85 points. The banks index grew 1.25%, as Alpha earned 2.86% and National grabbed 2.81%, while Eurobank dropped 0.65% and Piraeus eased 0.21%. Viohalco jumped 3.67%, Quest Holdings rose 2.21%, Coca-Cola HBC collected 1.86% and Terna Energy improved 1.64%, as Sarantis conceded 2.91% and Public Power Corporation parted with 1.18%. In total 65 stocks posted gains, 43 recorded losses and 57 remained unchanged. Turnover amounted to €65.5m, up from Tuesday’s €56.9m.

Despite yesterday marginal close of German Dax, Nikkei index is gaining almost 1% earlier pointing to a positive day. Note also that US markets will remain closed today on national holiday.

¢    In the Spotlight

Greece/Economy: The 2023 budget foresees limited borrowing from the markets for the Greek state, in the tune of 7 billion euros, at levels similar to those of 2022 (around 7 billion euros). The issue of green bonds, as well as those intended for the financing of sustainable development, will be attempted next year, however, depending on the conditions prevailing in the markets. This choice is based both on the high cash reserves of the Greek state, combined with the increased disbursements to the state from the financing schemes that have already been decided at a European level to deal with the pandemic and the energy crisis, as well as the relatively limited financing needs for 2023.

 

Greece/Travel Services Balance: Greece’s travel services balance in September reached pre-pandemic levels, rising to 2.7 billion, provisional data from the Bank of Greece showed. In the respective month of 2021, travel services surplus was 2.0 billion euros. Also, the balance of travel services posted a surplus of 14.1 billion euros in the first nine months of the year, similar to pre-pandemic levels “Travel receipts in September 2022 rose by 35.1% to 2,855.4 million euros, from 2,113.2 million euros in September 2021, while travel payments also increased by 42.8% (September 2022: €185.9 million, September 2021: €130.2 million). The rise in travel receipts was due to a 52.3% increase in inbound traveller flows, as average expenditure per trip declined by 11.3%,” BoG said in a statement. Inbound traveller flows rose by 52% in September to 4.56 million and by 104% in January-September relative to the same periods of 2021. However, compared with the respective periods of 2019, inbound traveller flows decreased by 11% in September and by 12% in January-September 2022.

ATTICA BANK: As of today, the warrants incorporating the right to purchase shares of the Bank are traded on the ATHEX with a fluctuating floor/ceiling trading limit, as follows: first trading limit is ±50%, which expands under the conditions specified by the decision No. 22 of the ATHEX BoD.

CENERGY HOLDINGS: The company was awarded the construction of the cables for the interconnections of Lavrio Serifos and Serifos Milos projects.

Ellaktor: 9M:22 results out today, conference call on December 1st 17:30. In an announcement the Group said that it acquired 5.69% stake in GEFYRA SA and 6.35% stake in GEFYRA LITOURGIA for a total equity consideration of €16.6m. Following this transaction, the participation of AKTOR CONCESSIONS S.A. in GEFYRA S.A. and GEFYRA LITOURGIA S.A. amounts to 27.71% and 29.48% respectively.

 

OPAP (Q3:22 CC highlights): In yesterday’s webcast presentation of OPAP’s Q3:22 results, OPAP’ management upgraded its EBITDA target for the FY 2022 period and now expects EBITDA of €720m. Guidance for minimum cash distribution to shareholders of €1.00/share reiterated while management added that they are always looking for higher returns to the shareholders if possible and depending on the performance during the World Cup and overall Christmas period.

Motor Oil (Q3/9M:22 results review): Motor Oil posted the best quarter in the history of the Group smashing estimates by a wide margin. Refining performance reached the €500m mark in just a quarter on the back of soaring refining margins (MOH’s benchmark stood at 17.9$/bbl vs. 7.5$/bbl in Q3:21), delivery premiums and favorable EUR/USD parity. CapEx in the quarter was €54m while net debt increased to €1.43bn vs. €1.46bn in Q3:22. Note that in early July MOH distributed €78m of ordinary dividend. On the 9m period MOH generated c85m of FCF having invested €300m in acquisition and Capex. Despite the €110m inventory losses the Group reported €321m of net earnings coming 277% above Q3:21. Without a doubt 9M:22 figures set an exceptional high mark coming at €1.27bn of EBITDA (x3 vs. 9M:21) and €910m (x6 vs 9M:21) of net income on adjusted basis. On a reported basis MOH posted EBITDA €1.39bn (x3 vs. 9M:21) and net income of €1bn (almost 4x vs 9M:21). Results should trigger interest for the stock as they fully support investments in RES, energy generation and refinery upgrade.  In the conference call company’s management will also present the Group’s energy transition strategy.

The following table summarise results vs. our estimates:

Motor oil

2021

2022

Y-o-Y

2022

Vs

2021

2022

Y-o-Y

2022

Vs

EUR mn.

(%)

9M Est.

9M Est.

Q3

Q3

(%)

Q3 Est.

Q3 Est.

Sales Volumes (MTx1000)

10,526.0

10,388.0

-1.3%

10,634

4,047

3,784

-6.5%

4,030

 

Sales

7,143.0

12,666.0

77.3%

12,049

2,987.0

4,767.0

59.6%

4,150

EBITDA

408.0

1,391.0

240.9%

1,280

8.7%

157.0

459.0

192.4%

348

31.9%

Adjusted EBITDA

307.0

1,267.0

312.7% 

1,146

10.6% 

134.0

569.0

324.6% 

448

27.0% 

of Which Refining

207.0

1,099.0

430.9%

979

96.0

500.0

420.8%

380

of which Fuel Marketing

97.0

111.0

14.4%

125

42.0

36.0

-14.3%

50

of Which Power & Gas

14.0

63.0

350.0%

52.0

3.0

31.0

933.3%

20.0

Other & Eliiminations

-1.0

-7.0

-600.0%

-11.0

-7.0

2.0

128.6%

-2.0

Net Income

206.0

1,007.0

388.8%

915

10.1%

85.0

321.0

277.6%

238

34.9%

Adjusted Net Income

131.3

910.0

593.2% 

821

10.8% 

67.0

407.0 

507.5% 

318

28.0% 

CC Details: Wednesday November 24, 5:30pm local GR time.

§   GR: +30 213 009 6000 or +30 210 94 60 800

§   UK: +44 (0) 800 368 1063

§   INTL: +44 (0) 203 059 5872

§   USA: +1 516 447 5632

Lamda Development (9M/Q3:22 results): Group consolidated EBITDA fell to 35 million euros, down from 329 million euros in the Jan-Sep period of 2021, which the developer attributes to the first-time consolidation of the Ellinikon project.  Conversely, consolidated net results (after financial expenses, taxes and minority interest) posted a 55-million loss, versus a 210-million-euro profit in 2021. Adjusted consolidated net results (after financial results, taxes and minority interest) fell to 9 million euros in profits, down from 239 million euros in profits in 2021. The total portfolio value (GAV) of the Ellinikon project amounts to 1.9 billion euros. The total portfolio value (GAV) of the Malls exceeds one billion euros, following the consolidation of the newly acquired Designer Outlet Athens. Lamda Development forecasts to take in more than one billion euros from residence sales alone in the first five-year period of the upwards of 7-billion-euro real estate project. In terms of nine-month 2022 results, Lamda Development, which owns the majority stake and manages the The Mall Athens, Golden Hall, Mediterranean Cosmos and the Designer Outlet Athens, reported Malls EBITDA of €48m +54% vs. 9M:21 (or +50% like-for-like). NAV per share at €7.60 vs. 7.73 eur/share at 31.12.2021.

LAMDA DEVELOPMENT

2021

2022

Y-o-Y

2021

2022

Y-o-Y

EUR thous.

9M

9M

(%)

Q3

Q3

(%)

Sales

53,958

83,061

53.9%

24,225

29,968

23.7%

EBITDA

328,842

34,800

-89.4%

13,155

-2,900

-122.0%

EBITDA Mrg

609.4%

41.9%

-56,754 bps

54.3%

-9.7%

-6,398 bps

Net Income

209,561

-55,200

-126.3%

-14,997

-33,008

-120.1%

Net Mrg

388.4%

-66.5%

-45,484 bps

-61.9%

-110.1%

-4,824 bps

CC Details: Wednesday November 24, 6:00pm local GR time.

§   GR: +30 213 009 6000 or +30 210 94 60 800

§   UK: +44 (0) 800 368 1063

§   INTL: +44 (0) 203 059 5872

§   USA: +1 516 447 5632

 

FOURLIS (9M:22 CC Key takeways): Management reiterated guidance for FY:22 sales in the tune of €495-€500mn with running rates during October and November 2022 +14% and +12% vs 2019 (reference point as record year in terms of turnover).

§   Double digit top line growth expected also for 2023 but with gross margin erosion between 0.5% to 1%.

§   Opex higher due to inflationary pressures and higher energy costs (€8-€9mn burden) bringing total opex in the tune of €48-€50mn per quarter vs €45mn previously guided.

§   Out of stock IKEA issues smoothing out and normality with full range of products expected by end H1:23.

§   Holland and Barret new retail concept management team in place and running the business aiming at 3 new physical stores by end Q1:23 and on line store while by end 2023 6 physical stores plus the online store. Store sales €0.5mn/store with an EBIT margin of 8%.

§   Intersport Turkey to be either sold or jointly developed with a local partner. Turkey will be marginal EBIT positive for FY:22.

§   Trade Estates IPO towards end H1:23 with a current GAV of €306mn.

§   Remains OVERWEIGHT. TP €5.5/share. We will have to bring down our FY:22 EBITDA (OPR) and net income profitability due to higher energy related costs.

The following table summarise results vs. our estimates:

FOURLIS

2021

2022

Y-o-Y

2022 Est.

Act. vs

2021

2022

Y-o-Y

2022 Est.

Act. vs

EUR m.

9M

9M

(%)

9M

Est.

Q3

Q3

(%)

Q3

Est.

Sales

316.5

352.5

11.4%

350.8

0.5%

130.8

139.9

6.9%

138.2

1.2%

EBITDA

26.7

24.4

-8.6%

31.2

-21.7%

13.4

14.7

10.0%

21.5

-31.6%

EBITDA Mrg

-22.5%

6.9%

+2,942 bps

8.9%

-197 bps

10.2%

10.5%

+30 bps

15.5%

-503 bps

Net Income

8.0

9.2

15.0%

12.98

-29.1%

7.4

6.7

-10.0%

10.5

-36.1%

Net Mrg

2.5%

2.6%

+8 bps

3.7%

-109 bps

5.7%

4.8%

-90 bps

7.6%

-279 bps

 

QUEST HOLDINGS (Q3/9M:22 results preview): The company reported a better than expected Q3/9M:22 performance especially on the EBITDA and Net income profitability front on strong courier and IT services business operating margins. In more details:

§   Consolidated Sales €739.6mn, +10.5% y-o-y spot on our forecast; EBITDA at €54.6mn, -5.7% and higher than our call of €51.4mn; Net income €31.944mn, circa €3.5mn above our estimate of €28.3mn but lower vs reported 9M:21 figure due to the one off gain of €75.8mn from the sale of CARDLINK.

§   Strong top line growth with sales from continuing operations up 16%, EBITDA by 17.8%, EBT by 13.1% and EAT by 8.8% compared to 2021.

§   Compared to last year’s 9M:21 (including Cardlink’s results) Quest Group Sales grew by 10.5% while EBITDA decreased by 5.7%. EAT appears lower by 71% mainly due to last year’s extraordinary non-recurring capital gains of €75.8mn from the sale of the participation in Cardlink.

§   Higher OPEV by €1.4mn due to one-off allowance to the lower paid personnel of the group.

§   Net Debt at €28mn from a net cash position of €84.5mn in Fy:21 and €16mn in H1:22 due to €61mn dividends distribution, increased WC requirements to accommodate strong Q4:22 sales, €28.8mn CAPEX and short term financing of IT projects.

§   IT retail strong due to APPLE and XIAOMI products demand with sales up 19.4% to €500.7m and EBT +11% to €13.1mn. A one off gain of €1.3mn from the sale of Quest’s participation in Accusonus is included.

§   IT Services up 14.1% to €127.5mn with EBT +41% to €9.8mn on strong EBITDA margin due to Unisystems usual operations and the addition of EBITDA margin lucrative Intelli and Team Candi (more than €1.5mn contribution).

§   ACS (courier) performed better than expected with sales up 4% and EBT up 65 on better performance on the EBITDA level (flat EBITDA margin) as new sorting hub enhances operations and more than offsets lower e-sales vs 2021 (loclkown period) and 2022 higher transportation costs.

§   Finally, energy sales up 10.3% to €8.3mn and EBT up 42% to €5.1mn on capacity addition (+6.2MW y-o-y) and higher loading factor in Q3:22

§   No interim dividend distribution.

§   Overall a better than expected set of performance especially in Q3:22. Considering Q4:22 is a strong quarter for all business units we expect a strong finish for the year exceeding our figures, which we intend to adjust upwards.

§   Remains OVERWEIGHT, TP €6.8/share.

 

The following table summarise results vs. our estimates:

QUEST

2021

2022

Y-o-Y

2022 Est.

Act. vs

2021

2022

Y-o-Y

2015

Act. vs

EUR m.

9M

9M

(%)

9M

Est.

Q3

Q3

(%)

0

Est.

Sales

669.3

739.6

10.5%

739.6

0.0%

221.8

260.8

17.6%

260.8

0.0%

EBITDA

57.9

54.6

-5.7%

51.4

6.2%

18.6

20.1

7.6%

16.9

18.8%

EBITDA Mrg

8.6%

7.4%

-127 bps

6.9%

+0 bps

8.4%

7.7%

-71 bps

6.5%

18.8%

Net Income

109.9

31.9

-70.9%

28.3

12.9%

86.0

11.4

-86.7%

7.8

47.0%

Net Mrg

16.4%

4.3%

-1,210 bps

3.8%

+0 bps

38.8%

4.4%

-3,439 bps

3.0%

47.0%

CC Details: Thursday, 24th November 2022, 3:30 local GR Time

§   GR: + 30 213 009 6000

§   UK: + 44 203 059 5872

§   USA: +1 516 447 5632

KRIKRI (Q3/9M:22 results preview): Company is set to publish Q3/9M:22 results today after market close. We expect a continuation of trends recorded in H1:22 results, ie strong top line growth on the top lien amid MS gains and price increases recorded throughout the year so far and increased volume sales both in Greece and abroad in both yogurt and IC segments. Yet profitability will be once again burdened and deteriorated due to increased costs, especially in raw materials (raw milk and milk powder, chocolate, plastic, sugar) which will not be offset by product increases achieved during the year as these came in at a later stage whereas KRIKRI operated under severe high cost base all year long. In more specific:

§   9M:22 sales up by 18.5% to €130.61mbn from €110.24mn, mostly driven by 3 main price increases recorded in March, June and late August and to a lower extend by volume growth as KRIKRI gains market shares both in yogurt and IC segments domestically.

§   Greek sales up by 14.8% to €71.21mn from €62.04mn aided by strong S/M demand on branded yogurt products (volume growth more than 15% and M/S gains combined with price increases) and strong PL uptake as well as strong IC segment due to summer increased demand on strong impulse out in the street consumption, higher tourism volumes and POS expansion.

§   International sales up 22.37% on strong yogurt growth (UK and Italy PL co-operations bear fruit) and strong IC, yet from a very low basis.

§   Total IC sales are forecasted to rise 20.56% to €36.71mn from €30.45mn a year earlier making up 28.15 of total consolidated sales.

§   Yogurt sales +17.14% to €93.14mn from €79.51mn accounting for 71.315 of total sales.

§   EBITDA down 43.2% to €12.65mn from €22.288mn on dramatic EBITDA margin erosion by 10% to 9.7% from 20.2% a year earlier on alleviated production and energy costs, especially in raw material prices, partially offset by lower OPEX in the higher proportion of PL in the yogurt segment.

§   Net income to land 51.5% lower to €7.28mn from €15.02mn.

§   On a Q3 basis, sales are seen up 18% to €47.22mn, EBITDA down 32.6% to €5.153mn from €7.643mn and net income to settle 35.1% lower to €3.224mn from €4.97mn.

§   Remains OVERWEIGHT with a TP of €7.5/share. KRIKRI has reached an infection point where costs have peaked and full effect of price increases and volume growth (from MS gains) will start bearing fruits, which, alongside with reduced costs going forward, will recover profitability margins starting from 2023 onwards.

The following table summarise our estimates:

Q3 preview

9M preview

KRIKRI P&L  (€mn)

Q3 2021 (A)

Q3 2022 (E)

  % chng y-o-y

9M 2021 (A)

9M 2022 (E)

  % chng y-o-y

Greece

 

23.05

26.58

15.28%

62.04

71.21

14.78%

% of consolidated sales

57.62%

56.28%

 

56.28%

54.52%

 

International

 

16.87

20.40

20.90%

47.91

58.63

22.37%

% of consolidated sales

42.17%

43.19%

 

43.46%

44.89%

 

Ice Cream Greece

 

9.99

11.51

15.17%

24.14

28.00

16.00%

% of consolidated sales

24.98%

24.37%

 

21.90%

21.44%

 

Ice Cream International

 

2.59

3.53

36.69%

6.31

8.70

38.00%

% of consolidated sales

6.46%

7.49%

 

5.72%

6.66%

 

Ice Cream Total

 

12.58

15.04

19.59%

30.45

36.71

20.56%

% of consolidated sales

31.44%

31.86%

 

27.62%

28.10%

 

Yogurt Greece

 

13.06

15.07

15.36%

37.90

43.21

14.00%

% of consolidated sales

32.65%

31.91%

 

34.38%

33.08%

 

Yogurt International

 

14.29

16.86

18.04%

41.61

49.93

20.00%

% of consolidated sales

35.71%

35.71%

 

37.74%

38.23%

 

Yogurt Total

 

27.35

31.93

16.76%

79.51

93.14

17.14%

% of consolidated sales

68.35%

67.62%

 

72.12%

71.31%

 

Other Sales

 

0.08

0.25

196.91%

0.28

0.77

169.82%

% of consolidated sales

0.21%

0.53%

 

0.26%

0.59%

 

Consolidated Sales

 

40.01

47.22

18.03%

110.24

130.61

18.48%

Ice Cream Gross Profit

 

5.58

6.61

18.50%

14.71

16.20

10.08%

IC Gross Profit margin

44.37%

43.97%

-41 bps 

48.32%

44.12%

-420 bps 

Yogurt Gross Profit

 

7.52

4.67

-37.96%

23.16

13.59

-41.33%

Yogurt Gross Profit margin

27.50%

14.61%

-1,289 bps 

29.12%

14.59%

-1,454 bps 

Other Gross Profit

 

-0.31

0.05

-116.04%

-0.51

0.15

-128.46%

Consolidated Gross Profit

 

12.79

11.33

-11.42%

37.36

29.93

-19.89%

Gross Profit margin

31.97%

23.99%

-798 bps 

33.89%

22.91%

-1,097 bps 

Total Expenses

 

5.15

6.18

19.96%

15.07

17.28

14.65%

% on sales

12.87%

13.08%

+21 bps 

13.67%

13.23%

-44 bps 

EBITDA

 

7.64

5.15

-32.57%

22.29

12.65

-43.24%

EBITDA margin

19.10%

10.91%

-819 bps 

20.22%

9.69%

-1,053 bps 

D&A

 

1.12

1.05

-5.67%

3.16

3.40

7.45%

% over sales

2.79%

2.23%

-56 bps 

2.87%

2.60%

-27 bps 

EBIT

 

6.52

4.10

-37.18%

19.12

9.25

-51.63%

EBIT margin

16.31%

8.68%

-763 bps 

17.35%

7.08%

-1,026 bps 

Net Financials

 

-0.07

-0.07

2.12%

-0.09

-0.15

76.35%

% on sales

-0.18%

-0.15%

+2 bps 

-0.08%

-0.11%

-4 bps 

EBT

 

6.45

4.03

-37.61%

19.04

9.10

-52.20%

EBT margin

16.13%

8.53%

-760 bps 

17.27%

6.97%

-1,030 bps 

Taxes

 

1.48

0.80

-45.87%

4.02

1.82

-54.70%

Tax Rate

22.98%

19.94%

-304 bps 

21.10%

20.00%

-110 bps 

NET INCOME

 

4.97

3.22

-35.14%

15.02

7.28

-51.53%

Net Margin

12.42%

6.83%

-560 bps 

13.62%

5.57%

-805 bps 

source: Company, BETA Securities Research estimates

KRIKRI

2021

2022

Y-o-Y

2021

2022

Y-o-Y

EUR thous.

9M

9M Est.

(%)

Q3

Q3 Est.

(%)

Sales

110,241

130,610

18.5%

40,011

47,224

18.0%

EBITDA

22,288

12,650

-43.2%

7,643

5,153

-32.6%

EBITDA Mrg

20.2%

9.7%

-1,053 bps

19.1%

10.9%

-819 bps

Net Income

15,020

7,280

-51.5%

4,970

3,224

-35.1%

Net Mrg

13.6%

5.6%

-805 bps

12.4%

6.8%

-559 bps

 

Kind regards,

Manos Chatzidakis

Head of research BETA SEC

29 Alexandras Avenue

11473 Athens,Greece

Tel: +30 210 6478988/754

Email: mchatzidakis@beta.gr

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