Category Archives: EMAK

Portfolio transactions: MIKO BV, Emak SpA

MIKO

MIKO issued a short Q3 trading update 3 days ago, which in my opinion is very very good. I did already buy more MIko before and have now upgraded into a full 5% position.

This is an excerpt from the release:

Turnhout, 28 October 2013 – Miko NV, the coffee service and plastic packaging specialist listed on the NYSE Euronext Brussels, has announced that during the third quarter of 2013 its turnover was 12.8 % higher than during the same period last year. The combined turnover for the first nine months of 2013 increased by 6.7 % compared with the first nine months of 2012.

The growth in turnover is due, firstly, to increased sales in the plastic segment and, secondly, to the acquisitions in the coffee segment that marked the first half of the year (Kaffekompaniet in Sweden and ABC Mokka in Denmark).

In terms of results, there were encouraging increases in both these segments.

According to Mr Frans Van Tilborg, CEO and Managing Director of the Miko Group: “Within the coffee service sector, we have seen a slight drop in sales in most domestic markets, Germany being a positive exception. Although the economic crisis is far from over, the situation has been helped by a number of acquisitions and by reductions in the price of raw materials. In addition, the plastics division is still performing well, with impressive sales growth at each of our plants in Belgium, Poland and Germany. We are optimistic for the rest of 2013.”

This represents a huge acceleration against the first 6 months.

It is a kind of strange feeling to buy at an all-time-high, but on the other hand I try to avoid any kind of anchoring with regard to past stock prices in my decisions. Fundamentally, I think MIKO is a really good deal at this price level.

EMAK Spa

On the other hand, I sold half of my EMAK Spa position. EMAK is/was a “special situation” investment I made during the brutal capital increae in 2011. Now, the price jumped to a level where I think the risk/return relationship is not as good any more. There was no fundemenatl news, so I assume that part of this price jump is the due to the momentm of PIIGS small caps in the last few weeks.

Compared to MIKO for instance, which is growing nicely, EMAK seems to be now rather overpriced, even assuming a further recovery in the “PIIGS”.

As I am always selling too early, I sold only half of the position now 😉 I will decrease my FTSEMIB hedge accordingly, as now the Italy exposure is down to only around 12.5% of the portfolio.

Short cuts: Installux, Maisons France, SIAS, EMAK

Installux

Installux reported 6m numbers. As they have already indicated, sales were down -10%. Interestingly, they managed to keep their EBIT margin at a constant 11%, despite higher depreciations.

This is very remarkable. The net result went down ~-11% mostly because taxes remained unchanged on absolute terms. At the end of the day, EPS for the first 6m was 13.80 EUR. If history is any guide, I would expect an additional 5 EUR EPS or so in the second 6m, resulting in 19 EUR EPs. Net cash went slightly down to around 16 mn EUR or ~53 EUR per share due to higher receivables which is normal for Installux in the first six months.

All in all, Installux is still one of the cheapest stocks around and the business seems to be surprisingly resilient and their cost base quite flexible.

Maisons France Confort

As expected, MFC is experiencing an even deeper decline in sales than Insatllux. Maybe it was also the weather, but sales are down -10.5%, excluding M&A by -15.4%. However they will publish results only in beginning of September. So lets wait and see. The stock price remained surprisingly resilient.

SIAS

SIAS released 6M numbers as well. Numbers were Ok. Traffic seemed to have picked up later in Q2. Overall, as now the “special” is gone, one of my lower conviction ideas. Good dividend and still below book value but that’s it.

EMAK

Finally, EMAK released the 6M report. Despite unchanged topline sales, they managed to significantly increase profitability which I find remarkable (profit margin 6.2% vs. 4.4%). Even moreinteresting, their European sales increased nicely despite the unfavourable weather and sales decreased mostly in Turkey. One more data point for my “gorilla theory”…. This is what they say:

In the “Asia, Africa and Oceania” the decline in sales is mostly due to the decrease in shipments to Turkey, tied to a moment of weakness of the local market.

They lowered slightly their guidance for 2013, but still the expect 38-40 mn EBITDA which would transale in somethin like 0.10 EUR profit per share.

Overall, EMAK in my opinion is on a very good way and has significant recovery potential from here.

Quick updates: Installux, EMAK, SIAS & ATSM

As I am not doing this fulltime, I sometimes miss if companies publish their results. In principle, for my “Value companies” I don’t think that one time period makes a big change in the overall investment case. However it definitely makes sense to look at existing companies at least once a year.

Installux

As reader Caque commented, Installux reported prelimary earnings a few days ago.

With 6.67 mn EUR or around 22 EUR per share, earnings were surprisingly good. Net cash is now at 18.8 mn EUR or 62 EUR per share. So trailing EPS ex cash is around (100/22) ~4.9 times, quite low for a company which earns around 15-20% ROCE.

2013 will clearly be a challenge for them, according to the last sentence of the statement:

L’environnement gĂ©nĂ©ral incite Installux Ă  la prudence quant Ă  ses perspectives 2013. Le groupe anticipe un repli d’environ -8%. “Cette tendance se confirme malheureusement en terme de volume d’activitĂ© sur le 1er trimestre (-13%),

-13% in sales in the 1 quarter is quite substantial. On the other side, this might open up some interesting entry points during the year. Nevertheless it should be clear that France in general is going through a quite difficult year. As ussual, the stock price doesn’t do much and volume remains low:

One remark from my side: France and the Netherlands are Germany’s major trading partners. I cannot understand how people can be so positive about German companies and negative about Netherlands and France in particular.

EMAK

EMAK came out with a investor relation presentation including preliminary annual figures already a few weeks ago.

Interestingly, the “old” EMAK business is doing quite poorly, profit is down 50% or so. The “new” businesses acquired from the main shareholder were holding up much better. So looking back, the dilution is not that big.

EPS was ~5 cent per share so we have a trailing P/E of around 10. If they really make good on their ambition level (38-40 mn EBITDA), the stock would be quite cheap. Let’s wait and see, no need to do something at the moment. This has 2-3 years more to play out.

The stock price at the moment seems to “lazily” trail the FTSE MIB to a certain extent:

SIAS SpA

SIAS came out with preliminary 2012 numbers already 4 weeks ago.

What was clearly an issue is the fact, that traffic declined significantly in 2012, much more than expected. So despite a overall tariff increase, revenues stayed flat.

The good news: On April 15th, they are expected to pay the special dividend of 90 cent per share , distributing what is left from the sale of the Chilean asset sale and the purchase of the concession.

Operationally, there seems to be additional preassure from the regulatory side, as agreed tarrif increases have been suspended by the regulator.

After the special dividend, a large part of the “special situation” aspect (extra asset) has now played out. Howver, the fundamental part looks not as good as I have though initially. I will need to decide if I hold on to SIAS as a “Normal” value investmetn or sell it at some point in the near future. Fundamentally, the company does a lot worse than I had exepected. Thankfully, the entry price was low enough and investors seem to liek special dividends.

The stock price has outperformed the FTSE MIB in the last 12 month by a margin of more than 30%. Quite significant for a purely domestic business:

Even more interesting:

Autostrada (“ATSM”) now caught up with SIAS ver 2 years as it turned out that the “Italian Job”, the Purchase of Impregilo,turned out to be a great special situation investment, netting Autostrada a nice profit.

http://chart.finance.yahoo.com/z?s=SIS.MI&t=1y&q=l&l=on&z=l&c=FTSEMIB.MI&a=v&p=s&lang=de-DE&region=DE

Maybe time to switch back into the “Cheapie” ? Let’s wait and see. Definitely worth to check the Autostrada annual report this year.

Italian updates – Piquadro, Sol Spa, Emak

Reporting season in Italy. Among my portfolio and watch list, several companies issued relevant material.

Piquadro:

Piquadro had a sort of “trading update” which for some reason cannot be found on the homepage but for instance here.

Although sales went up 4.3%, Profits declined from 9.1 mn to 7.8 mn (0.18 EUR per share to 0.156 EUR per share). And they are cutting the dividend from 0.10 EUR per share to 0.06 EUR.

Based on my initial valuation, Piquadro is still within the base case (20% EBITDA margin). So for the time being no action, but a reminder to check the annual report how non-Italien sales and own shops performed against the other segment.

Sol Spa

Watchlist stock Sol Spa has issued two interesting pieces of information. First of all, they were able to place a 12 year private placement bond at 4.75% in USD. With 12 year USD swap rates at around 2%, this represents a credit spread of around 2.75%. This is around 1.5% lower than Italy has to pay for the same duration. So we clearly see that a well managed Italian corporate can finance cheaper than the Italian Government !!!

Secondly, they have issued an investor presentation which shows that for some unkown reasons they are also investing in Hydro Power in Slovenia and Macedonia. I am not sure how this fits into the corporate strAtegy, but it explains part of the increase in Capex.

Q1 results are a mixed bag. Increasing sales but a reduction in margins. Capex still high as the aggressively move into Eastern Europe (Bulgaria, Albania).

Difficult stock. Still on watch.

EMAK

Emak had issued Q1 numbers already a couple of weeks ago. Interestingly again the acquired companies dare doing relatively well. Based on the first quarter, Emac could earn around 0.08 EUR per share which would result in a 2012 P/E of around 6.

Quick news: EMAK Spa, AS Creation, Autostrada & SIAS & Impregilo

EMAK has published a new Investor presentation. Proforma 2011 P/E is around 7, P/B around 0.64. Still very cheap.

AS Creation:

The Russian JV partner has bought another 5% in AS Creation and holds now 10%. Despite the lackluster results of AS Creation in 2011, this is a very encouraging sign.

For me, this purchase should be counted as “insider transaction” as the Russian JV partner will be in the best position to judge the success potential of the Russian JV which is expected to start this year.

I am actually contemplating to fill up AS Creation to a full position (currently 3.7%) if the stock price weakens over the next few weeks.

Autostrada

Autostrada continues to implode. Interstingly the regulated subsidiary SIAS is doing relatively better:

In contrast, Impregilo continues to increase:

Impegrilo reported preliminary results this week with a 50% increase in earnings due to the sale of some South americen Assets. So there seems to be some real value in this company.

I am actually tmepted to get back into Autostrada at some point in time. They roughly lost 170 mn market value since the IGLI Deal, although the disdavantage dissapears with each increase in the Impegrilo share. I think when the capital increase is going to be announced, then it could be a good opportunity to get back in.

Total Produce, EMAK, Austostrada

Total Produce

For some reason, the stock price of Total Produce climbed significantly over the last few days. Now a part of this increase seem to be explained: Total Prduce joins the ISEQ 20, the main Irish stock index:

Total Produce plc, Europe’s leading fresh produce company, is pleased to announce that it has been advised by the Irish Stock Exchange that following the quarterly ISEQ 20 review, Total Produce will be joining the ISEQ 20 Indices, (ISEQ 20, ISEQ 20 Capped and ISEQ 20 Leveraged), with effect from close of business on Friday, 16th March 2012.

I don’t know how many index trackers exist and the weight is only 0.29%, but maybe it helps a little bit to attract some new investors.

EMAK

EMAK released preliminary 2011 results last week.

“Pro forma” results of the combined EMAK would have been 13 mn EUR, a P/E of ~ 7.5. Results of “old” EMAK were surprisingly weak, whereas the “new” EMAK companies were doing a lot better. SO maybe the deal wasn’t such a rip off at all ? Let’s wait and see, but EMAK still looks very cheap at this levels despite the problems in the home market.

Autostrada

What a shame, Autostrada reported really solid numbers for 2011. Interestingly the Impregilo share price rose already above the level of 3 EUR which Autostrada paid for the share from it’s parent. I tios still below the 3.65 for the Fondiaria package, but the “loss” is definitely smaller.

Quick news: EMAK, WestLB and Tonnelerie

EMAK

I just saw that after the capital increase, EMAK has a new “number 2” shareholder, a company called “Girefin SpA”. Girefin SpA is a holding company which holds 55% of Landi Renzo SpA, a quoted Italian company. Girefin is controlled by Stefano Landi who was CEO of Landi Renzo before.

From a minority investor point of view this might be interesting, to have a “local” guy on board.

WestLB

There is an interesting article in the FT Germany (in German) about the current situation at Westimmo, the real estate lending sub of WestLB. If they succeed in moving the whole subsidiary into the government owned “bad bank” and maybe at book values, than the 2011 result might only show minimal losses if all. This would be very good for the 2011 “Genußscheine”.

Tonnellerie Francois Frere

There are news that Tonnelerie and listed competitor Oeneo are negotiating about Oeneo’s oak barrel business, Tonnelerie Radoux. Although the news was already out on Friday, it looks like some people who think that this is a reason to buy Tonnellerie.

However in my opinion one has to wait to see what Tonnellerie is actually paying for this and how they finance it.

« Older Entries