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Masterflex SE — Investor Presentation 2011
Nov 21, 2011
276_rns_2011-11-21_88fb531a-3f7f-4a78-bdbd-1363491be157.pdf
Investor Presentation
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Masterflex AG
Recommendation: BUY (BUY)
Risk: MEDIUM (MEDIUM) Price Target: EUR 6.70 (6.70)
9M 2011 results: Masterflex may exceed
its full year guidance
- This week Masterflex published results for the 3Q 2011. The company generated sales of EUR 12.9m (3Q 2011: EUR 11.9m), while EBIT was improved from EUR 1.7m (2010) to now EUR 1.8m from continued operations. By 30 September 2011, cash amounted to EUR 4.1m and financial debts to EUR 26.9m. Equity was EUR 14.5m, translating into an impressive margin of 27.5%. After having entirely sold all its former activities, Masterflex now is a pure play for high-tech hose systems. Management confirmed its annual forecast (FY 2011E: Sales +8-10% to EUR 50-51m; EBIT EUR 7.0m).
- Taxes: According to IFRS regulations Masterflex has shown EUR -1.5m of taxes, resulting from amortization of deferred taxes that amount to EUR 5.4m by the end of September 2011. As seen in its cash flow statement, liquidity-related taxes just amounted to EUR -863k.
- 4Q 2011: In November a legal dispute regarding the claims for damages from an interest rate swap agreement terminated in 2009 was ended. Masterflex is to receive an additional amount of EUR 2.7m. After settlement of claims, this results in non-operating income of roughly EUR 0.9m or approx. EUR 0.10 per share. The additional liquid funds will be used to further reduce the Group's debt. Furthermore, Masterflex needs EUR 11m in sales and EUR 1.3m in EBIT to reach our estimates. This should be easily fulfilled, given the strong 3Q results.
- Crisis-proven business model: Currently economic indicators and the European debt crisis show a mixed picture. It is worth mentioning that Masterflex also in a downturn – which we do not assume – would continue to be highly profitable: As a comparison in FY 2009 the company achieved a 13% EBIT-margin in its remaining segment High-Tech Hose System during the crisis.
- We increase our EPS estimates for the current business year by 10 cents. Our recommendation remains BUY, valuation is attractive.
| 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 | -1.1 | 7.9 | 3.8 | 3.8 | 4.6 |
| EPS (continued operat.) | -1.76 | -0.24 | 1.67 | 0.43 | 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 | -3.11 | -0.49 | 0.43 | 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. | 23.2% | 18.8% | 18.2% |
| ROA | n.m. | n.m. | 12.1% | 6.3% | 6.1% | 6.9% |
| EV/EBITDA | 7.0 | 10.6 | 7.1 | 6.5 | 5.7 | 5.2 |
| EV/EBIT | 10.8 | n.m. | 10.0 | 9.0 | 7.7 | 6.9 |
| P/E (continued operat.) | n.m. | n.m. | 2.8 | 10.9 | 10.9 | 9.1 |
18 November 2011
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 | -1.5 | -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% |
5.7 11.1% |
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 -28.0% |
-1.9 -31.0% |
-2.2 -31.0% |
|
| Net income including minorities | -7.6 | -0.9 | 8.1 | 4.1 | 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 | -1.1 | 7.9 | 3.8 | 3.8 | 4.6 | |
| in % of sales | -10.4% | -2.8% | 17.2% | 7.4% | 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 | -0.24 | 1.67 | 0.43 | 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 | -3.11 | -0.49 | 0.43 | 0.43 | 0.52 |
Source: CBS Research AG, Masterflex AG
Masterflex AG
Balance Sheet
| IFRS EURm |
2008 | 2009 | 2010 | 2011E | 2012E | 2013E |
|---|---|---|---|---|---|---|
| Assets | ||||||
| Noncurrent assets | 52.2 | 41.8 | 34.0 | 33.6 | 33.5 | 33.5 |
| as % of total assets | 51.5% | 60.3% | 52.0% | 56.5% | 53.6% | 51.0% |
| Intangible assets | 15.1 | 6.3 | 4.1 | 4.1 | 4.1 | 4.1 |
| Fixed assets | 28.0 | 25.4 | 21.2 | 20.9 | 20.9 | 20.9 |
| Financial assets | 4.7 | 4.0 | 2.7 | 2.7 | 2.7 | 2.7 |
| Deferred taxes | 3.4 | 5.8 | 5.9 | 5.7 | 5.6 | 5.5 |
| Others | 0.9 | 0.3 | 0.3 | 0.3 | 0.3 | 0.3 |
| Current assets | 49.1 | 27.5 | 31.4 | 25.9 | 29.0 | 32.1 |
| as % of total assets | 48.5% | 39.7% | 48.0% | 43.5% | 46.4% | 49.0% |
| Inventories | 21.1 | 13.1 | 7.4 | 12.8 | 13.8 | 14.8 |
| Accounts receivables | 7.4 | 4.4 | 4.4 | 5.1 | 5.5 | 5.9 |
| Other receivables and other assets | 7.3 | 2.1 | 1.5 | 2.6 | 2.8 | 3.0 |
| Cash equivalents | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Cash | 11.0 | 7.8 | 14.4 | 5.5 | 7.0 | 8.5 |
| Assets held for sale | 0.0 | 0.0 | 3.6 | 0.0 | 0.0 | 0.0 |
| Income tax assets | 2.2 | 0.2 | 0.2 | 0.0 | 0.0 | 0.0 |
| Total Assets | 101.3 | 69.3 | 65.4 | 59.5 | 62.6 | 65.6 |
| Shareholders´ equity and liabilities | ||||||
| Shareholders´ equity as % of total equity and liabilities |
14.8 14.7% |
1.0 1.4% |
12.2 18.7% |
15.4 25.9% |
19.5 31.2% |
24.5 37.3% |
| Capital stock | 4.4 | 4.4 | 8.7 | 8.7 | 8.7 | 8.7 |
| Capital reserve | 17.5 | 17.5 | 26.3 | 26.3 | 26.3 | 26.3 |
| Retained earnings | -7.2 | -21.1 | -23.2 | -20.0 | -15.8 | -10.9 |
| Minorities | 0.2 | 0.2 | 0.4 | 0.4 | 0.4 | 0.4 |
| Noncurrent liabilities | 27.2 | 25.1 | 32.8 | 24.2 | 22.4 | 19.7 |
| as % of total equity and liabilities | 26.8% | 36.1% | 50.1% | 40.7% | 35.8% | 30.0% |
| Pension provision and other liabilities | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Deferred taxes | 1.5 | 1.5 | 0.5 | 0.5 | 0.5 | 0.5 |
| Financial liabilities | 21.5 | 19.5 | 30.0 | 20.1 | 18.0 | 15.0 |
| Other liabilities | 4.2 | 4.1 | 2.2 | 3.6 | 3.9 | 4.1 |
| Current liabilities | 59.2 | 43.3 | 20.4 | 19.8 | 20.6 | 21.5 |
| as % of total equity and liabilities | 58.5% | 62.4% | 31.2% | 33.4% | 33.0% | 32.7% |
| Tax provisions | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Other provisions | 3.5 | 2.9 | 4.5 | 4.1 | 4.4 | 4.7 |
| Financial liabilities | 47.5 | 35.0 | 7.1 | 5.0 | 4.9 | 4.8 |
| Trade accounts payables | 4.8 | 2.2 | 1.8 | 2.6 | 2.8 | 3.0 |
| Received prepayments | 0.0 | 0.0 | 4.4 | 4.6 | 4.9 | 5.1 |
| Other liabilities | 2.9 | 2.4 | 1.5 | 2.6 | 2.8 | 3.0 |
| Accruals and deferrals | 0.5 | 0.7 | 1.1 | 1.0 | 1.0 | 0.9 |
| Total equity and liabilities | 101.3 | 69.3 | 65.4 | 59.5 | 62.6 | 65.6 |
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] |
| Igor Kim | +49 (0)69 -977 8456- 15 [email protected] |
Anna von Klopmann +49 (0)69 -977 8456- 10 [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] |
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] |
| Ivo Višić | +49 (0)69 -977 8456- 19 [email protected] |
Institutional Sales
Schillerstrasse 27 – 29 60313 Frankfurt am Main
Phone: +49 (0)69 – 9 20 54-400
Raimar Bock +49 (0)69 -9 20 54-115 Head of Sales [email protected]
Rüdiger Eich +49 (0)69 -9 20 54-119 Sule Erkan +49 (0)69 -9 20 54-107 (Germany, Switzerland) [email protected] (Sales-Support) [email protected]
Ulf Homeyer +49 (0)69 -9 20 54-111 Klaus Korzilius +49 (0)69 -9 20 54-114
Stefan Krewinkel +49 (0)69 -9 20 54-118 Markus Laifle +49 (0)69 -9 20 54-120 (Execution, UK) [email protected] (Execution) [email protected]
Bruno de Lencquesaing +49 (0)69 -9 20 54-116 Thomas Rosen +49 (0)69 -9 20 54-112 (Benelux, France) [email protected] (Germany, Switzerland) [email protected]
Christopher Seedorf +49 (0)69 -9 20 54-110 Janine Theobald +49 (0)69 -9 20 54-106 (Sales-Support) [email protected] (Austria, Germany) [email protected]
Bas-Jan Walhof +49 (0)69 -9 20 54-105 (Benelux) [email protected]
(Germany, Switzerland) [email protected] (Benelux, Germany) [email protected]
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This report has been prepared independently of the company analysed by Close Brothers Seydler Research AG and/ or its cooperation partners and the analyst(s) mentioned on the front page (hereafter all are jointly and/or individually called the 'author'). None of Close Brothers Seydler Research AG, Close Brothers Seydler Bank AG or its cooperation partners, the Company or its shareholders has independently verified any of the information given in this document.
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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 |
|---|---|---|---|
| 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 |
| 18 November 2011 | BUY | EUR 4.72 | 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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