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Masterflex SE — Earnings Release 2011
Aug 16, 2011
276_rns_2011-08-16_367e6f88-bd57-4928-85d2-45da8d4b9e85.pdf
Earnings Release
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Masterflex AG
Recommendation: BUY (HOLD)
Risk: MEDIUM (MEDIUM) Price Target: EUR 6.70 (6.70)
Strong 1H 2011 results …
… and upgrade to BUY
- Masterflex recently announced figures for the first six months 2011: The company, a specialist for the development and production of connector and hose systems using high-tech plastics, recorded revenue growth of 19.9% to a total of EUR 27.2m. It also increased its EBIT by 36% to EUR 4.1m. Masterflex' EBIT-margin remains high at 15%. Consolidated net income improved from EUR – 5.0m (1H 2010) to now EUR 1.5m. Earnings from continued operations climbed from EUR 0.5m to EUR 1.7m yoy. Management confirmed its annual forecast (FY 2011E: Sales +8 - 10% to EUR 50-51m; EBIT EUR 7.0m). We assume the company to fulfil its guidance. Furthermore, equity-ratio improved from 18.7% to 24.3%.
- Regional expansion: Masterflex now operates on the Czech and Slovakian market directly through its own subsidiary in Planá/Czech Republic in order to better address the better economic development in this region.
- New products: The templine heated hose system launched end FY 2010 was well received on the market. By its consistent heat distribution over the entire connection length and high energy efficiency, Masterflex can address new markets and applications. Additionally, the company is launching highperformance smooth bore hoses made from modified POM (polyoxymethylene) as an alternative to conventional polyamide (PA) products.
- Crisis-proven business model: Currently economic indicators show a mixed picture. It is worth mentioning that Masterflex also in a downturn – which we do not assume – is highly profitable: The company achieved a 13% EBITmargin in its remaining segment High-Tech Hose System during the crisis in FY 2009.
- We leave estimates and price target (EUR 6.70) unchanged. We increase our recommendation from HOLD to BUY.
| Key data | ||||||
|---|---|---|---|---|---|---|
| FY 12/31, EUR m | 2008 | 2009 | 2010 | 2011E | 2012E | 2013E |
| Sales | 73.4 | 38.4 | 46.1 | 51.0 | 55.0 | 59.0 |
| EBIT | 6.0 | 3.7 | 6.4 | 7.2 | 8.4 | 9.4 |
| Net result | -7.6 | -0.8 | 7.9 | 2.9 | 3.8 | 4.6 |
| EPS (continued operat.) | -1.76 | -0.19 | 1.67 | 0.33 | 0.43 | 0.52 |
| EPS (discont. operat.) | -1.84 | -2.87 | -2.16 | 0.00 | 0.00 | 0.00 |
| EPS (continued and disc.) | -3.60 | -3.06 | -0.49 | 0.33 | 0.43 | 0.52 |
| Gross margin | 61.2% | 73.3% | 72.8% | 66.6% | 66.9% | 66.6% |
| EBIT margin | 8.1% | n.m. | 14.0% | 14.1% | 15.3% | 16.0% |
| ROE | n.m. | n.m. | n.m. | 18.8% | 19.6% | 18.8% |
| ROA | n.m. | n.m. | 12.1% | 4.0% | 5.0% | 5.5% |
| EV/EBITDA | 7.1 | 10.7 | 7.2 | 6.6 | 5.8 | 5.3 |
| EV/EBIT | 11.0 | n.m. | 10.2 | 9.2 | 7.8 | 7.0 |
| P/E (continued operat.) | n.m. | n.m. | 2.9 | 14.8 | 11.2 | 9.3 |
| Source: Masterflex AG, CBS Research AG |
16 August 2011
Source: CBS Research AG, Bloomberg, Masterflex AG
| Change | 2011E | 2012E | 2013E | ||||
|---|---|---|---|---|---|---|---|
| new | old | new | old | new | old | ||
| Sales | - | 51.0 | - | 55.0 | - | 59.0 | |
| EBIT | - | 7.2 | - | 8.4 | - | 9.4 | |
| EPS | - | 0.33 | - | 0.43 | - | 0.52 | |
| Internet: www.masterflex.de Sektor: All Industrial WKN: 549293 |
ISIN: DE0005492938 |
Reuters: MZXG.DE Bloomberg: MZX GY
Short company profile:
Masterflex AG is a specialist in developing and manufacturing superior connection and hose systems made of innovative high-tech plastics. Its competence and numerous innovations have allowed the company to set new standards for high-tech hose systems.
Share data:
| Share price (EUR, latest closing price): | 4.85 |
|---|---|
| Shares outstanding (m): | 8.9 |
| Market capitalisation (EUR m): | 43.0 |
| Enterprise value (EUR m): | 65.8 |
| Ø daily trading volume (3 m., no. of shares): | 10,450 |
Performance data:
| High 52 weeks (EUR): | 7.11 | ||
|---|---|---|---|
| Low 52 weeks (EUR): | 2.52 | ||
| Absolute performance (12 months): | 61.1% | ||
| Relative performance vs. CDAX: | |||
| 1 month | -2.0% | ||
| 3 months | -11.0% | ||
| 6 months | 45.2% | ||
| 12 months | 61.7% | ||
| Shareholders: | |||
| SVB GmbH & Co. KG/Schmidt | 18.9% | ||
| BBC GmbH | 4.5% | ||
| Bischoping family | 4.4% | ||
| von Rautenkranz | 3.3% | ||
| own shares | 1.5% | ||
| free float | 67.3% | ||
| Financial calendar: | |||
| DVFA conference | 29 August 2011 | ||
| 3Q 2011 Report 15 November 2011 |
|||
| Author: | Ralf Marinoni (Analyst) | ||
| Close Brothers Seydler Research AG | |||
| Phone: | +49 (0) 69-977 84 56 0 | ||
| Email: | [email protected] | ||
| www.cbseydlerresearch.ag |
Please notice 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 (Securities Trading Law) at the end of this document. This financial analysis in accordance with § 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others in connection with their trading activities, occupation, or employment.
Masterflex AG
Profit and loss account (continued operations)
| IFRS EURm |
2008 | 2009 | 2010 | 2011E | 2012E | 2013E |
|---|---|---|---|---|---|---|
| Sales YoY grow th |
73.4 -95.3% |
38.4 -47.7% |
46.1 19.9% |
51.0 10.7% |
55.0 7.8% |
59.0 7.3% |
| Change in inventories | 0.1 | -0.7 | 0.2 | 0.5 | 0.5 | 0.5 |
| Other activated own work | 0.9 | 0.1 | 0.0 | 0.5 | 0.5 | 0.5 |
| Other operating income | 0.9 | 1.3 | 0.8 | 0.8 | 0.8 | 0.9 |
| Total revenues | 75.2 | 39.1 | 47.1 | 52.8 | 56.8 | 60.9 |
| COGS in % of sales |
-30.3 -41.3% |
-11.0 -28.6% |
-13.5 -29.4% |
-18.9 -37.0% |
-20.1 -36.5% |
-21.5 -36.5% |
| Gross income in % of sales |
44.9 61.2% |
28.1 73.3% |
33.6 72.8% |
34.0 66.6% |
36.8 66.9% |
39.3 66.6% |
| Personnel expenses in % sales |
-23.5 -32.1% |
-14.3 -37.3% |
-16.0 -34.8% |
-19.0 -37.3% |
-23.0 -41.8% |
-23.0 -39.0% |
| Other operating expenses | -12.1 | -7.7 | -8.4 | -5.0 | -2.5 | -3.8 |
| EBITDA in % of sales |
9.3 12.6% |
6.1 15.9% |
9.1 19.8% |
10.0 19.6% |
11.3 20.5% |
12.5 21.2% |
| Depreciation and amortisation in % of total revenues |
-3.3 -4.4% |
-2.5 -6.3% |
-2.7 -5.7% |
-2.8 -5.3% |
-2.9 -5.0% |
-3.1 -5.0% |
| EBIT in % of sales |
6.0 8.1% |
3.7 9.5% |
6.4 14.0% |
7.2 14.1% |
8.4 15.3% |
9.4 16.0% |
| Financial result | -2.9 | -3.2 | -3.3 | -2.4 | -2.4 | -2.3 |
| Non-operating expenses | -12.2 | -3.1 | 6.0 | 0.0 | 0.0 | 0.0 |
| EBT in % of sales |
-9.1 -12.5% |
-2.7 -6.9% |
9.1 19.8% |
4.8 9.4% |
6.0 10.9% |
7.1 12.1% |
| Taxes as % of EBT |
1.5 -16.8% |
1.7 -64.9% |
-1.0 -11.3% |
-1.6 -33.0% |
-1.9 -31.0% |
-2.2 -31.0% |
| Net income including minorities | -7.6 | -0.9 | 8.1 | 3.2 | 4.1 | 4.9 |
| Minority interests | 0.0 | 0.1 | -0.2 | -0.3 | -0.3 | -0.3 |
| Net income attributable to shareholders | -7.6 | -0.8 | 7.9 | 2.9 | 3.8 | 4.6 |
| in % of sales | -10.4% | -2.1% | 17.2% | 5.7% | 7.0% | 7.8% |
| Shares outstanding (in millions) | 4.3 | 4.3 | 4.7 | 8.9 | 8.9 | 8.9 |
| EPS from continued business units | -1.76 | -0.19 | 1.67 | 0.33 | 0.43 | 0.52 |
| EPS from discontinued business units | -1.84 | -2.87 | -2.16 | 0.00 | 0.00 | 0.00 |
| EPS from continued and discontin. business units | -3.60 | -3.06 | -0.49 | 0.33 | 0.43 | 0.52 |
Source: CBS Research AG, Masterflex AG
Research
Schillerstrasse 27 - 29 60313 Frankfurt am Main
Phone: +49 (0)69 – 977 8456-0
| Roger Peeters Member of the Board |
+49 (0)69 -977 8456- 12 [email protected] |
||
|---|---|---|---|
| Martin Decot | +49 (0)69 -977 8456- 13 [email protected] |
Kristina Kardum | +49 (0)69 -977 8456- 21 [email protected] |
| Rabeya Khan | +49 (0)69 -977 8456- 10 [email protected] |
Igor Kim | +49 (0)69 -977 8456- 15 [email protected] |
| Gennadij Kremer | +49 (0)69 – 977 8456- 23 [email protected] |
Ralf Marinoni | +49 (0)69 -977 8456- 17 [email protected] |
| Manuel Martin | +49 (0)69 -977 8456- 16 [email protected] |
Enid Omerovic | +49 (0)69 -977 8456- 19 [email protected] |
| Felix Parmantier | +49 (0)69 -977 8456- 22 [email protected] |
Marcus Silbe | +49 (0)69 -977 8456- 14 [email protected] |
| Veysel Taze | +49 (0)69 -977 8456- 18 [email protected] |
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Phone: +49 (0)69 – 9 20 54-400
Raimar Bock +49 (0)69 -9 20 54-115 Head of Sales [email protected]
(Germany, Switzerland) [email protected] (Sales-Support) [email protected]
Rüdiger Eich +49 (0)69 -9 20 54-119 Sule Erkan +49 (0)69 -9 20 54-107
Uwe Gerhardt +49 (0)69 -9 20 54-168 Klaus Korzilius +49 (0)69 -9 20 54-114
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Janine Theobald +49 (0)69 -9 20 54-116 Bas-Jan Walhof +49 (0)69 -9 20 54-105 (Germany) [email protected] (Benelux) [email protected]
(Germany, Switzerland) [email protected] (Benelux, Germany) [email protected]
(Execution, UK) [email protected] (Execution) [email protected]
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Recommendation System:
Close Brothers Seydler Research AG uses a 3-level absolute share rating system. The ratings pertain to a time horizon of up to 6 months:
BUY: The expected performance of the share price is above +10%. HOLD: The expected performance of the share price is between 0% and +10%. SELL: The expected performance of the share price is below 0%.
Recommendation history over the last 12 months for the company analysed in this report:
| Date | Recommendation | Price at change date | Price target |
|---|---|---|---|
| 10 November 2010 | HOLD | EUR 4.35 | EUR 4.40 |
| 14 December 2010 | BUY | EUR 3.91 | EUR 5.00 |
| 13 May 2011 | HOLD | EUR 6.50 | EUR 6.70 |
| 16 August 2011 | BUY | EUR 4.85 | EUR 6.70 |
Risk-scaling System:
Close Brothers Seydler Research AG uses a 3-level risk-scaling system. The ratings pertain to a time horizon of up to 6 months:
LOW: The volatility is expected to be lower than the volatility of the benchmark MEDIUM: The volatility is expected to be equal to the volatility of the benchmark HIGH: The volatility is expected to be higher than the volatility of the benchmark
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