The financial report is available here (in French).
Margins remain high (23 % op margin); no tangible sign of "mean reversion" as was (and still is) my main concern.
Modest sales growth, stable order backlog.
The balance sheet remains rock solid (40 m€ cash, 0 debt).
Working capital requirement shows a marked increase (large increase in accounts receivable) but I see not cause for concern.
In my previous article I had mentionned that GEA was not part of the "Ecomouv" consortium implementing a new tax for trucks ; but according the the latest report GEA will be a supplier after all.
I had also mentionned that Sanef had bought the transport branch of Communication and Systems (CS group), a comparable company. Finally the branch has been sold for 15 m€, around 0.5x 2012 Sales, or 10x 2011 operational result.
All in all, nothing very new.
Positives : strong balance sheet, profitable, cheap (EV/current EBIT ~3)
Negatives : slow growth, some indifference to shareholders (no special dividend, no share buybacks).
I've bought some more shares.
Salut et merci pour la mise à jour.
RépondreSupprimerVous avez peut être vu sur mon blog que j'ai discuté un peu plus les raisons pour lesquelles le rendement sur le capital GEA ne reviendra pas "à la moyenne».
Si non, j'ai 'ai écrit:
"1. In the first half of the prior decade, GEA was operating with under 1.5 million in PP&E but generating half the revenues that is now. The return on net tangible assets was low (~4%) and that, too, was a mystery: a business in that line of work, i.e. specialized equipment, facing that industry structure, with the relationships that it enjoys, should be earning circa 30% to 40% returns on net operating assets.
2. In the second half of the decade, revenue grows by a factor of 1.5x, the margins expand by 100 bps, and, given that one doesn't need to build another factory to churn out approx 20% more units (20% volume x 10% expansion in gross margin = 50% increase in revenue,the fixed assets now turn over 43x rather than 23x -- that's operating leverage.
3. So, the real curiosity is not about the second half of the decade, but the first half.
Asset turns at 23x suggests a low volume, high value product. The cost of equipping a lane for dual manual/automatic electronic toll collection is circa EUR 80K (see here: http://ntl.bts.gov/lib/jpodocs/repts_te/7223.pdf , for example), and that suggests the manufacture & sale of about 440 units per year.
Can one or two machines a day be manufactured in a space valued at EUR1.5m, net of depreciation? I think so. (As an aside, low volume, high value may also explain the high carrying cost of the inventory; the inventory is 4x the PP&E).
4. So, if the first half of the decade can be explained in that way, then understanding the second half is not too problematic: instead of 440 machines, its 520. Same space, faster production process. Faster selling cycle so that inventory rises at a slower rate than revenues. Margins improve, services increase, and it all adds up to a plausible plot."
C'est une supposition, bien sûr, mais c'est une supposition qui est compatible avec ces chiffres.
Merci.
SupprimerNon, j'avais raté cette mise à jour du blog. Merci pour cette analyse.
Pourquoi être passé à la vente sur GEA, si ce n'est pas indiscret ?