da Intermonte – ANTARES VISION company research report

Buon pomeriggio,

di seguito e in allegato inviamo il company research report relativo a ANTARES VISION a cura di Intermonte.

Rimaniamo a disposizione per ulteriori informazioni.

Un caro saluto,

Francesco Zecchini

M: +39 3442756238

Taking Another Step Forward                                 

• New Strategic Plan 2024-26: plan stands on 3 pillars. Antares Group has unveiled its 2024-26 Strategic Plan, the first under the new CEO. The plan focuses on three main strategic pillars: (i) Exploiting selective market opportunities by prioritizing profitable segments and maintaining leadership in core markets; (ii) Enhancing profitability and cost discipline through optimizing pricing in T&T and spare parts, continued focus on cost efficiency and optimization, including procurement excellence and operational delivery, strengthening discipline and cost control measures; (iii) Maximizing cash generation by optimizing WC through improved receivables policies and staggered collections, standardizing processes to reduce inventory levels, rationalizing subsidiary activities across countries to enhance organizational efficiency.
• 2024-26 financial targets. Management has taken a conservative approach to revenue growth, focusing solely on existing business and technology without factoring in potential contributions from the L5 business or further growth opportunities that may be strong revenue drivers in the future (digital product passport amongst all). The strategic emphasis is on organizational process improvement and cost reduction to boost profitability and cash generation. Moving to numbers, the new plan outlines (i) revenue expected to grow at a +4/6% CAGR in 2023-26, driven by growth in Track & Trace (T&T), Services, and Supply Chain Transparency, while reducing less profitable sales of inspection machine; (ii) adj. EBITDA projected to increase at a +47/55% CAGR driven by reorganization efforts, product standardization, and lead-time reduction initiatives, with the margin seen improving from 6.2% in FY23 to 11.5/14% in FY24, reaching 17.5/19.5% by FY26. Financial leverage expected <1.7x by FY26, with cash generation benefiting from profitability enhancement, reducing WC intensity on sales and normalized CapEx.
• Change to estimates. Following the release of the plan, we have kept our FY24-25 forecasts almost unchanged while extending our estimates to FY26E. We currently forecast revenue to increase at 6% CAGR in 2023-26 (in line with the high end of the plan), with the adj. EBITDA margin projected at 17.4% in 2026. On the cash flow side, we expect net debt at c. Eu80mn at the end of the projections, or 1.8x net debt / EBITDA.
• OUTPERFORM reiterated, new TP at Eu4.0. The strengthening of the management team and the strategic focus on cost management and operating cash flow has generated strong investor confidence. While the turnaround process is still at an early stage, we are confident that the company is well positioned to achieve BP goals and restore margins to over 20% in the M/L term. Consequently, we maintain our positive view on the stock and have updated our DCF-based TP to Eu4.0 (up from Eu3.3), factoring in a better assumption on TV (EBIT margin now at 13.5%). At our new TP, the stock would trade at 10.7x EV/adj. EBITDA on FY25, which we think will be the first year to fully benefit from the implementation of the restructuring plan.