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Original-Research: Landi Renzo S.

p.A. - von GBC AG

Einstufung von GBC AG zu Landi Renzo S.p.A.

Unternehmen: Landi Renzo S.p.A.

ISIN: IT0004210289

Anlass der Studie: Research Note

Empfehlung: Buy

Kursziel: 0.98 EUR

Letzte Ratingänderung:

Analyst: Marcel Goldmann, Cosmin Filker

9-month 2022: Landi Renzo continues on a clear growth path despite

difficult environment; positive operating earnings development; GBC

estimates and price target confirmed after reaffirmation of corporate

guidance

Business development 9-month 2022

Landi Renzo S.p.A. published its nine-month figures for the current

business year at the end of November. According to these figures, the

technology group continued its growth course in the first three business

quarters despite a challenging environment (Ukraine war, COVID aftermath,

supply chain problems, etc.). Compared to the same period of the previous

year, consolidated revenues increased significantly by 33.1% to EUR 216.35

million (9M 2021: EUR 162.56 million).

The dynamic increase in group turnover was due to significant (organic)

growth effects from an increased business volume in both business fields -

Green Transportation and Clean Tech Solutions. The technology company

benefited in particular from increased investments in gas and hydrogen

infrastructures (infrastructure business) and robust after-market demand

(automotive retrofit business). In addition, inorganic growth effects from

acquisitions (Metatron Group and Ido Meccanica) also contributed

significantly to the positive sales trend.

The Group's revenues were primarily driven by the core business area of

Green Transportation. In this Group division, the revenue generated

increased significantly by 17.9% to EUR 141.24 million (9M 2021: EUR 119.83

million), mainly due to the recovery effects in the aftermarket business in

Latin America and Europe as well as increased orders from leading OEM

customers. The Metatron Group, which was acquired last summer, contributed

EUR 10.41 million to the increase in segment revenue.

The Clean Tech Solutions business field (SAFE & CEC, consolidation of the

investment from May 2021) was also able to increase its segment revenue

(excluding the revenue of Idro Meccanica S.r.l. of EUR 3.68 million acquired

at the beginning of 2022) by 7.80% to EUR 71.44 million (pro forma revenue

without Idro Meccanica 9M 2021: EUR 66.30 million). The significant increase

in revenue reflects the increased interest of numerous countries in gas

mobility, which are expanding their gas-based distribution networks (gas

filling stations, etc.) as part of this. It should be noted here that the

business development of the division was also negatively affected by

difficulties on the procurement markets (unstable supply chains, etc.), and

thus stood in the way of an even more positive business development.

With regard to the order situation of the infrastructure business, the

Landi Renzo Group announced that the division continues to be in 'growth

mode' and has an order backlog covering the first half of the 2023

financial year.

Parallel to the positive group revenue development, the operating result

(EBITDA) of the technology company also increased significantly by 18.8% to

EUR 7.07 million (9M 2021: EUR 5.95 million) compared to the same period of the

previous year. Adjusted for one-off costs (e.g. M&A costs), adjusted EBITDA

(Adj. EBITDA) for the first nine months of the current financial year

amounted to EUR 8.70 million, which was 15.1% higher than in the same period

of the previous year (9M 2021: EUR 7.56 million).

The Green Transportation segment accounted for EUR 4.42 million of the

adjusted EBITDA (9M 2021: EUR 2.80 million) and the Clean Tech Solutions

segment for EUR 4.32 million (9M 2021: EUR 5.37 million). Both segments thus

contributed almost equally to the Group's operating result. In terms of

operating profitability, the adjusted EBITDA margin of 4.0% almost

confirmed the operating margin level of the same period of the previous

year (9M 2021: 4.6%).

At the after-tax level, on the other hand, Landi Renzo posted a negative

net result (after minorities) of EUR -10.12 million, a deterioration compared

to the same period last year (9M 2021: EUR -1.90 million). It should be

noted, however, that the net result of the same period of the previous year

was very strongly influenced by a consolidation gain (EUR 8.80 million) from

a fair value measurement of SAFE & CEC.

Based on the signs of recovery in some core markets and the order book at

SAFE & CEC, management has confirmed its previously issued guidance for the

2022 financial year and continues to expect improved Group results compared

to the previous year.

Business development in Q3 2022

The quarterly view also reflects well the steady growth of the Landi Renzo

Group. After a high-growth second quarter (Q2 growth of 23.6% to EUR 77.53

million), the technology company was also able to continue its previous

growth series in the third quarter with significant revenue increases of

8.0% to EUR 71.91 million (Q3 2021: EUR 66.60 million).

Growth in the third quarter was primarily driven by significant growth

impulses in the Green Transportation business field, which increased its

segment revenue significantly by 10.5% to EUR 47.39 million (Comparable Q3

revenue 2021: EUR 42.89 million). The Clean Tech Solutions division also

continued to expand its infrastructure business with moderate revenue

growth of 3.4% to EUR 24.52 million (Comparable Q3 revenue 2021: EUR 23.71

million).

On the operating result level, contrary to the positive revenue trend, a

decline in adjusted EBITDA by 29.9% to EUR 2.16 million (Q3 2021: EUR 3.08

million) had to be accepted due to a less favourable revenue mix (higher

OEM revenue share) and higher raw material costs. In parallel, the adjusted

EBITDA margin decreased to 3.0% (Q3 2021: 4.60%).

Forecast and evaluation

Against the backdrop of their solid nine-month performance, confirmed

corporate guidance and successful growth strategy, we have maintained our

previous estimates for the current financial year 2022 and subsequent

financial years.

In view of our unchanged sales and earnings forecasts, we hereby confirm

our previous price target of EUR 0.98 per share. With regard to the current

price level, we continue to give the Landi Renzo share a 'buy' rating and

see significant upside potential.

Die vollständige Analyse können Sie hier downloaden:

http://www.more-ir.de/d/26155.pdf

Kontakt für Rückfragen

GBC AG

Halderstrasse 27

86150 Augsburg

0821 / 241133 0

research@gbc-ag.de

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Date (time) of completion: 07/12/2022 (15:01 pm)

Date (time) of first distribution: 08/12/2022 (10:00 am)

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