Production date: 05 April 2022 - h 6.30 pm
Published: 06 April 2022 - h 7.00 am
RENERGETICA Rating: BUY (unch.)
Italy
Target Price: € 9,00
Euronext Growth Milan | Ren Energy | |
(prev. € 7,27) | Update | Risk: Medium |
Stock performance
1M
3M
6M
1Y
Stocks performance relative to FTSE Italia Growth
absolute
25,44%
0,57%
40,87%
82,99%
to FTSE Italia Growth
to Euronext STAR Milan
to FTSE All-Share
to EUROSTOXX
to MSCI World Index
13,77%
9,09%
44,08%
60,79%
15,72%
15,24%
48,98%
73,44%
12,81%
12,04%
45,19%
82,06%
13,89%
11,37%
44,50%
84,31%
16,16%
4,36%
38,71%
75,86%
Stock Data
Price Target price Upside/(Downside) potential Bloomberg Code
€ 7,10 € 9,00 27%
REN IM EQUITY
Market Cap (€m) 57,41
EV (€m) 61,89
Free Float 18,05%Share Outstanding 52-week high 52-week low
FY21A Results
8.086.098
€ 8,30
Average daily volumes (3m)
€ 3,81 4.350
The value of production stands at € 11.88 million, a slight increase (+3.3%) compared to the value of € 11.50 million of the FY20A and in line with our expectations (€ 12.00 million). EBITDA amounted to € 5.59 million, compared to € 4.69 million last year (+19.3%). It is also recorded an increase in marginality of 6.3 percentage points, with EBITDA margin increasing from 40.8% in FY20A to 47.1% in FY21A. EBIT amounted to € 4.59 million (€ 3.60 million in FY20A) after amortization and depreciation of € 1.01 million. The total Net Income is equal to € 2.64 million (€ 2.40 million in FY20A). The NFP goes from € 9.62 million to € 4.47 million.
Estimates Update
Key Financials (€m )FY21AFY22EFY23EFY24E
In light of the results published in the annual report for 2021A, we confirm
VoP
EBITDA EBIT
Net Profit
11,9 5,6 4,6 2,6
14,0 5,7 5,2 3,9
16,5 18,0
6,7 7,4
our estimates for both the current year and the coming years. In particular, we confirm the FY22E value of production equal to € 14.00 million and
6,3 7,0
5,0 5,7
EPS (€)
EBITDA margin EBIT margin
Net Profit margin
0,33 47,1% 38,6% 22,2%
0,48 40,4% 36,8% 27,9%
0,62 0,70
40,6% 40,8%
38,2% 38,9%
30,3% 31,5%
EBITDA of € 5.70 million, corresponding to an EBITDA margin of 40.4%. For subsequent years, we expect the value of production to increase up to € 18.00 million (CAGR 21A-24E: 14.87%) in FY24E, with EBITDA of € 7.40 million (corresponding to an EBITDA margin of 40.8%), up from € 5.59 million in FY21A (corresponding to an EBITDA margin of 47.1%).
Valuation Update
Main Ratios
FY21AFY22EFY23EFY24E
EV/EBITDA (x)
EV/EBIT (x)
P/E (x)
11,1 13,5 21,8
11,0 12,0 14,7
9,2 8,4
9,8 8,8
11,5 10,1
Mattia Petracca Giuseppe Riviello
mattia.petracca@integraesim.itgiuseppe.riviello@integraesim.itequity value of € 72.8 million. The target price is € 9.00 (prev. € 7.27), BUY rating and MEDIUM risk.
We have conducted the valuation of Renergetica's equity value based on the DCF methodology and market multiples of a comparable companies sample. The DCF method (which in the calculation of the WACC includes for prudential purposes a specific risk of 2.5%) provides an equity value of € 72.6 million. The equity value of Renergetica using market multiples is equal to € 73.0 million (with a 25% discount). The result is an average
1. Economics & Financials
Table 1 - Economics & Financials
CONSOLIDATED INCOME STATEMENT (€/mln) | FY20A | FY21A | FY22E | FY23E | FY24E |
Value of Production | 11,50 | 11,88 | 14,00 | 16,50 | 18,00 |
COGS | 0,01 | 0,02 | 0,05 | 0,05 | 0,05 |
Services | 4,86 | 4,18 | 5,60 | 6,55 | 7,15 |
Use of asset owned by others | 0,26 | 0,26 | 0,30 | 0,35 | 0,40 |
Empl oyees | 1,32 | 1,53 | 2,00 | 2,35 | 2,50 |
Other Operating Expenses | 0,37 | 0,30 | 0,40 | 0,50 | 0,55 |
EBITDA | 4,69 | 5,59 | 5,65 | 6,70 | 7,35 |
EBITDA Margin | 40,8% | 47,1% | 40,4% | 40,6% | 40,8% |
D&A | 1,08 | 1,01 | 0,50 | 0,40 | 0,35 |
EBIT | 3,60 | 4,59 | 5,15 | 6,30 | 7,00 |
EBIT Margin | 31,3% | 38,6% | 36,8% | 38,2% | 38,9% |
Financial Management | (0,96) | (1,04) | (0,70) | (0,60) | (0,50) |
EBT | 2,64 | 3,54 | 4,45 | 5,70 | 6,50 |
Taxes | 0,24 | 0,90 | 0,55 | 0,70 | 0,83 |
Net Income | 2,40 | 2,64 | 3,90 | 5,00 | 5,68 |
Minorities Net Income | 0,22 | -0,02 | -0,04 | -0,05 | -0,05 |
CONSOLIDATED BALANCE SHEET (€/mln) | FY20A | FY21A | FY22E | FY23E | FY24E |
Fixed Asset | 4,48 | 3,84 | 2,45 | 2,10 | 1,85 |
Account receivable | 1,27 | 1,50 | 2,00 | 2,25 | 2,50 |
Work in Progress | 15,85 | 14,41 | 18,30 | 18,60 | 19,00 |
Account payable | 1,37 | 2,24 | 1,15 | 1,20 | 1,35 |
Operating Working Capital | 15,75 | 13,67 | 19,15 | 19,65 | 20,15 |
Other Receivable | 2,22 | 3,52 | 2,30 | 2,35 | 2,40 |
Other Payable | 2,50 | 3,82 | 2,60 | 2,65 | 2,70 |
Net Working Capital | 15,46 | 13,37 | 18,85 | 19,35 | 19,85 |
Severance Indemnities & Provision | 0,57 | 0,33 | 0,85 | 0,90 | 1,00 |
NET INVESTED CAPITAL | 19,36 | 16,88 | 20,45 | 20,55 | 20,70 |
Share Capital | 1,11 | 1,11 | 1,11 | 1,11 | 1,11 |
Reserves and Retained Profits | 6,10 | 8,75 | 11,42 | 15,35 | 20,40 |
Group Net Income | 2,18 | 2,66 | 3,94 | 5,05 | 5,73 |
Equity | 9,38 | 12,52 | 16,46 | 21,50 | 27,23 |
Minorities Equity | 0,36 | (0,11) | (0,15) | (0,20) | (0,25) |
Cash and Cash Equivalent | 5,54 | 10,13 | 4,86 | 7,76 | 11,28 |
Financial Debt | 15,16 | 14,61 | 9,00 | 7,00 | 5,00 |
Net Financial Position | 9,62 | 4,47 | 4,14 | (0,76) | (6,28) |
TOTAL SOURCES | 19,36 | 16,88 | 20,45 | 20,55 | 20,70 |
(0,00) | 0,00 | 0,00 | |||
CONSOLIDATED CASH FLOW (€/mln) | FY20A | FY21A | FY22E | FY23E | FY24E |
EBIT | 3,60 | 4,59 | 5,15 | 6,30 | 7,00 |
Taxes | 0,24 | 0,90 | 0,55 | 0,70 | 0,83 |
NOPAT | 3,36 | 3,68 | 4,60 | 5,60 | 6,18 |
D&A | 1,08 | 1,01 | 0,50 | 0,40 | 0,35 |
Change in receivable | 0,38 | (0,23) | (0,50) | (0,25) | (0,25) |
Change in Contract Work in Progress | (8,04) | 1,45 | (3,89) | (0,30) | (0,40) |
Change in payable | 0,74 | 0,86 | (1,09) | 0,05 | 0,15 |
Change in OWC | (6,92) | 2,08 | (5,48) | (0,50) | (0,50) |
Other Changes | 0,49 | 0,01 | 0,01 | (0,00) | 0,00 |
Change in Provision | (0,37) | (0,24) | 0,52 | 0,05 | 0,10 |
OPERATING CASH FLOW | (2,35) | 6,54 | 0,14 | 5,55 | 6,13 |
Investments | (0,16) | (0,37) | 0,89 | (0,05) | (0,10) |
FREE CASH FLOW | (2,51) | 6,16 | 1,03 | 5,50 | 6,03 |
Financial Management | (0,96) | (1,04) | (0,70) | (0,60) | (0,50) |
Change in Financial Debt | 6,75 | (0,56) | (5,61) | (2,00) | (2,00) |
Change in Equity | 0,04 | 0,00 | 0,00 | 0,00 | 0,00 |
FREE CASH FLOW TO EQUITY (FCFE) | 3,31 | 4,56 | (5,27) | 2,90 | 3,53 |
Source: Renergetica and Integrae SIM estimates |
1.1 FY21A Results
Table 2 - Actual VS Estimates FY21A - FY21E
(€/mln) | VoP | EBITDA | EBITDA % | EBIT | Net Income | NFP |
FY21A | 11,88 | 5,59 | 47,1% | 4,59 | 2,64 | 4,47 |
FY21E | 12,00 | 4,80 | 40,0% | 3,95 | 2,75 | 8,76 |
Change | -1,0% | 16,5% | 7,1% | 16,1% | -4,0% | N/A |
Source: Integrae SIM
Through a press release, Stefano Giusto, President and CEO of Renergetica, declares: "The results obtained in 2021 are certainly very positive and growing strongly compared to the past, despite all the difficulties caused by the current contingency. Sales of projects in Italy and the United States also contributed to significantly strengthening the Group's financial position. We are confident that we can continue our growth path with renewed enthusiasm and optimism."
The value of production stands at € 11.88 million, a slight increase (+3.3%) compared to the value of € 11.50 million in the FY20A and in line with our expectations (€ 12.00 million). The value of production, as reported by the Company, mainly consists of revenues from sales net of contract works in progress.
EBITDA amounted to € 5.59 million, compared to € 4.69 million last year (+19.3%). There was also an increase in the marginality of 6.3 percentage points, with the EBITDA margin increasing from 40.8% in FY20A to 47.1% in FY21A. The growing values represent good profitability generated by the Group's business. In particular, the marginality reflects the significant profitability of US projects and the profit of Italian projects given by higher sales prices net of a stable cost structure.
EBIT amounted to € 4.59 million (€ 3.60 million in FY20A) after amortization and depreciation of € 1.01 million. The EBIT margin value varies by 7.3 percentage points compared to the previous year, going from 31.3% to 38.6%.
The total Net Income is equal to € 2.64 million (€ 2.40 million in FY20A). The value as of FY21A reflects higher taxation in the United States.
The NFP goes from € 9.62 million to € 4.47 million through the proceeds of projects authorized in Italy and the United States.
1.2 FY22E - FY24E Estimates
Table 3 - Estimates Updates FY22E-24E
€/mln |
New |
Old |
Change |
EBITDA |
New |
Old |
Change |
EBITDA % |
New |
Old |
Change |
EBIT |
FY22E | FY23E | FY24E | |
14,0 | 16,5 | 18,0 | |
14,0 | 16,5 | 18,0 | |
0,0% | 0,0% | 0,0% | |
5,7 | 6,7 | 7,4 | |
5,7 | 6,7 | 7,4 | |
0,0% | 0,0% | 0,0% | |
40,4% | 40,6% | 40,8% | |
40,4% | 40,6% | 40,8% | |
0,0% | 0,0% | 0,0% | |
New | 5,2 | 6,3 | 7,0 |
Old | 5,2 | 6,3 | 7,0 |
Change | 0,0% | 0,0% | 0,0% |
Net Income | |||
New | 3,9 | 5,0 | 5,7 |
Old | 3,9 | 5,0 | 5,7 |
Change | 0,0% | 0,0% | 0,0% |
NFP | |||
4,1 | -0,8 | -6,3 | |
4,1 | -0,8 | -6,4 | |
N/A | N/A | N/A |
VoP
New Old Change
Source: Integrae SIM
In light of the results published in the annual report for 2021A, we confirm our estimates for both the current year and the coming years.
In particular, we confirm the FY22E value of production equal to € 14.00 million and EBITDA of € 5.70 million, corresponding to an EBITDA margin of 40.4%. For subsequent years, we expect the value of production to increase up to € 18.00 million (CAGR 21A-24E: 14.87%) in FY24E, with EBITDA of € 7.40 million (corresponding to an EBITDA margin of 40.8%), up from € 5.59 million in FY21A (corresponding to an EBITDA margin of 47.1%).
Chart 1 - Value of Production and EBITDA FY20A-24E
Source: Integrae SIM
Chart 2 - Margin FY20A-24E
Source: Integrae SIM
Attachments
- Original Link
- Original Document
- Permalink
Disclaimer
Renergetica S.p.A. published this content on 05 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 20 April 2022 17:14:08 UTC.