da Intermonte – ANTARES VISION company research report

Buon pomeriggio,

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

Rimaniamo a disposizione per ulteriori informazioni.

Un caro saluto,

Chiara Cattaneo

M: +39 344 2756238

So Far, So Good on Cost Control and Cash Generation

Despite a declining revenue trend (which intensified in 2Q), the company has started to deliver on two key pillars of the New 2024-2026 Strategic Plan. We remain confident the new management team has the ability to execute the turnaround process, expected to last between 18 and 24 months. This involves controlling costs and gradually reducing debt, which could support a potential re-rating. We maintain our positive outlook on the stock and confirm our TP of €4.00.

• Three main positives from 1H results: i) Cost reduction, as adj. EBITDA reached €3.4mn (3.9% margin), a significant improvement from the loss of €-5.6mn in 1H23; despite a declining top line trend, AV was able to sharply reduce structural costs, with external service and personnel costs in particular down -15% and -11% YoY respectively, thanks to a more efficient organisation and increased product standardisation; ii) Improved cash generation, OpCF turned positive at €9mn (from €-29mn in 1H23), the result of increased profitability, better WC management (+€22mn), and reduced CapEx, bringing adj. net debt to €98mn, a gradual improvement from €104mn as at YE23; iii) Order intake up +7%, consistent with the 1Q24 trend, driven by the domestic market (+45%), and Europe (+12%), despite a continued slowdown in the Americas, especially in the FMCG market.
• …and just one concern: falling revenues: revenues came in at €87.6mn (-5.7% YoY), or -4.1% on a like-for-like basis (excluding activities in Russia), reflecting a more severe contraction in 2Q (-15%), that was slightly worse than our expectations. Regionally, Italy was the main growth driver (+37%), fuelled by rising demand for traceability systems in the pharmaceutical industry. In contrast, the Americas (NA + Brazil) experienced a significant decline (-22%) due to weak demand for inspection systems, especially in the rigid containers market. By business unit, Life Science remained the largest sector, representing 42% of total sales (up +3%), while FMCG declined -17%, mainly due to weaker demand in the beverage industry. Supply Chain Transparency (L4 & L5 SW solutions) was nearly stable. Recurring revenues increased by +5% YoY, now accounting for 44% of the total (up from 40% in 1H23).
• FY24 guidance confirmed: the conference call conveyed a positive outlook, with the new management team confident of achieving the lower end of the revenue guidance (+4%). This suggests an acceleration in 2H (+11%), probably supported by the order backlog and improved time-to-market. On the profitability side, AV aims to reach the upper end of the guidance range (14%), achievable through a similar cost reduction as was witnessed in 1H.
• Estimates tweaked, OUTPERFOM and €4.0 TP confirmed: in light of 1H results and feedback from the conference call, we are making a few minor adjustments to our estimates. We are setting our revenue estimate at the lower end of the range but keeping our adj. EBITDA estimate unchanged, while raising our margin estimate due to improved cost base management. Despite these minor changes, we are keeping our DCF-driven TP at €4.0 and confirming our OUTPERFORM rating on the stock.