Original-Research: euromicron AG (von GBC AG): BUY

Original-Research: euromicron AG - von GBC AG

Einstufung von GBC AG zu euromicron AG

Unternehmen: euromicron AG
ISIN: DE000A1K0300

Anlass der Studie: Research Report (Update)
Empfehlung: BUY
Kursziel: EUR 10.50
Letzte Ratingänderung: -
Analyst: Felix Gode, CFA

* With sales revenues of EUR139.84 million, euromicron AG fell below the
previous year's level by 10.8%. The Smart Buildings segment was primarily
responsible for the decline. Sales performance remained subdued against the
backdrop of the ongoing reorganisation of the largest subsidiary,
euromicron Deutschland GmbH. In addition to strategic reasons, such as the
rejection of risky large orders, a further reason for the modest sales
performance was the continuation of legacy projects, which make a low or
even negative contribution to profit. In the other two segments, the
decline in sales was significantly more moderate. It should also be borne
in mind that the discontinued operations contributed EUR6.31 million to sales
in the previous year. Adjusted for these effects, organic sales declined by
7.1%.
* Sales performance was also reflected in the earnings figures.
Consequently, EBITDA was reported at -EUR3.46 million, after EUR2.65 million in
the previous year. Adjusted for one-off restructuring expenses, the decline
was somewhat more moderate. Nevertheless, even after adjustments, negative
EBITDA of -EUR1.69 million was recorded. The decline in earnings was
generated exclusively in the Smart Buildings segment, with a decrease of
EUR5.03 million to -EUR2.44 million. Increases in earnings were recorded in the
other segments Critical Infrastructures and Distribution. Margins also
increased year-on-year. The effects of the reorganisation are already
clearly visible here and show the direction that euromicron AG can take
after the reorganisation has been successfully completed.

* Of special note here is that the measures announced by management to
in-crease profitability are being implemented. Breaking with its past,
euromicron AG is now focused on profitable orders and earnings performance.
Even though the realignment of the Group and the resulting charges are
continuing longer than previously thought, we consider that the company is
on the right track and initial successes can already be seen.

* Because of the weaker HY1 2016, the Executive Board of euromicron AG has
adjusted its guidance for FY 2016 downwards. Although it is assumed that
HY2 2016 will turn out to be significantly better, it is not expected that
the losses will be completely offset, due in part to the postponement of
orders in HY1 2016. Against this backdrop, we have lowered our forecasts
for FY 2016 and now expect sales revenues of EUR338.41 million and an
adjusted EBITDA of EUR10.59 million. This corresponds to an EBITDA margin of
3.1%. For the coming year, we expect an increase in the EBITDA margin to
4.9%.

* Based on the lower forecasts for FY 2016 and 2017, we have also adjusted
our target price for euromicron AG. After our previous target price of
EUR12.10, we have now calculated a fair value of EUR10.50 Based on the current
share price, this results in an unchanged BUY rating. In the medium term,
we remain convinced that euromicron AG can again reach the margin target on
an EBITDA basis of 8%-11%. We are also convinced that the reorganisation of
the Group will provide a positive impetus on the sales and earnings side in
the near future. Taking this into consideration, the euromicron AG share
seems favourably valued.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/14173.pdf

Kontakt für Rückfragen
Jörg Grunwald
Vorstand
GBC AG
Halderstraße 27
86150 Augsburg
0821 / 241133 0
research@gbc-ag.de
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http://www.gbc-ag.de/de/Offenlegung.htm
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