MATELAN Research - Note 01.04.2016

MATELAN Research
Impact Note
01 April 2016
Price as of 31/03/16: €12.45
Company / Sector
BDI BioEnergy Internat.
Energy: Biofuels
Fair Value
Recommendation
€17.7
Buy
(€15.3)
(unchanged)
Q4 15 shows earnings and cash pouring in
Share price performance
Investment case
40
20
30
16
12
20
8
4
0
0
28/03/14
28/05/14
28/07/14
28/09/14
28/11/14
28/01/15
28/03/15
28/05/15
28/07/15
28/09/15
28/11/15
28/01/16
28/03/16
10
Volume (000, l.s.)
Close (EUR, r.s.)
Share data
Reuters
No. of shares (m)
Daily volume (3m)
Free float
Market cap. (m)
EV (m)
Sales CAGR 13-17e
Valuation
EV/Sales
EV/ EBITDA
EV/EBIT
PER
Div. yield
RoCE
RoE
D7I.DE
3.80
1,284
19.6%
47.3
n.m.
5.9%
2016e
n.m.
n.m.
n.m.
29.2
0.9%
22%
3.1%
2017e
n.m.
n.m.
n.m.
13.9
1.8%
69%
6.2%
The release of 2015 results delivered on the hoped for turnaround
in profitability in the fourth quarter. In addition, cash development surprised on the positive side. The company is now
heading for an improved profitability in 2016, which is supported
by a strong order book. We have raised our fair value to EUR17.7
and the share now trades with an upside of 25% to the company’s
net cash value and of 42% to our conservatively calculated fair
value. We thus clearly reiterate our Buy rating.
 Q4 DELIVERS IMPRESSIVE TURNAROUND
Strong sales, a strong gross margin and a normalised fix cost base
have left BDI with a quarterly EBIT and net profit that we haven’t
seen in many years as well as black numbers for the full year.
Moreover, cash flow has been surprisingly strong, which has
driven net cash further north.
 IMPROVED PROFITABILITY IN 2016
Order intake in Q4 was rather weak but the order book remains
strong and supports our sales estimates for the coming years. In
addition, the order book mix points at an improved profitability in
the current year, though a bit less than previously estimated.
 FAIR VALUE COMES TO EUR17.7
Net cash has reached EUR15.5 per share at year end and in a quite
conservative operating scenario we come to a fair value of
EUR17.7. At EUR12.45, the share has not only a high upside to
the fair value but even to the net cash value. Success in the new
BioLife Science or the BioCrack activities could come as an
additional upside.
For additional disclosures please refer to the appendix
Analysts
Hartmut Moers
Tel.: +49 228 227 99 240
[email protected]
Forecasts
Sales (€m)
EBITDA (€m)
EBIT (€m)
Adj. EPS (€)
Dividend (€)
Oper. CF (€m)
Free CF (€m)
2013
35.45
3.57
2.59
0.85
1.10
10.18
7.98
2014
16.32
-2.95
-5.04
-0.45
0.00
-4.04
-5.20
2015
33.27
1.33
0.15
0.19
0.10
13.81
20.90
2016e
40.00
2.43
1.14
0.43
0.11
-6.41
-7.71
2017e
44.50
4.92
3.53
0.90
0.22
5.53
4.23
MATELAN Research
Q4 results and changes in estimates
EURm
Q4 15 Q4 15e Q4 14 Change FY 14
Order book
98.9
104.1
73.9 33.8%
73.9
Sales
13.3
13.8
4.8 177.8%
16.3
Gross profit
7.4
7.1
3.5 110.0%
9.7
Gross margin
55.4% 51.3% 73.3%
59.1%
EBIT
3.6
3.8
-0.9
n.m.
-5.0
EBIT margin
26.7% 27.9%
n.m.
n.m.
Net profit a.m.
3.0
3.2
0.1
n.m.
-1.7
FY 15
FY 16e old FY 16e new
98.9
100.0
100.0
33.3
40.5
40.0
16.0
18.4
18.2
48.0%
45.4%
45.6%
0.1
3.1
1.1
0.4%
7.7%
2.9%
3.7
3.1
1.6
Source: BDI, Matelan Research
Strong fourth quarter
bring BDI back into
the black
BDI fully delivered on our high expectations for the fourth quarter. Most
importantly, the company produced a significantly positive EBIT in the
quarter, which compensated for the loss at the nine months stage and
brought full year EBIT just into the black. On the back of a strong financial
result, net profit for the year reached EUR3.7m.
Highest gross profit for
past six years …
Looking into the composition of results, we find exactly the trends that we
were looking for (see also our comment from November 12th). In the fourth
quarter, the company generated sales clearly beyond the EUR10m mark and
gross margin came in clearly above the 45% level. As a result, gross profit
reached EUR7.4m, a level that the company has last achieved in 2009.
Sound total operating performance and leaves high gross profit
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
80.0%
70.0%
60.0%
50.0%
40.0%
30.0%
20.0%
10.0%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
13 13 13 13 14 14 14 14 15 15 15 15
Material costs
Gross profit
Gross margin
Source: BDI, Matelan Research, l.s. in EURm
Leaves around
EUR3.6m in EBIT
Simultaneously, fix costs have normalised again by falling below the level of
EUR4m per quarter. This leaves the company with an EBIT of EUR3.6m,
which again is a level we haven’t seen in many years. Out of these EUR3.6m,
EUR3m go straight down to the bottom line.
-2-
MATELAN Research
Strong gross profit is way higher than normalised fix costs
8.0
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
Q1 13Q2 13Q3 13Q4 13Q1 14Q2 14Q3 14Q4 14Q1 15Q2 15Q3 15Q4 15
Other operating result
Personnel costs
Depreciation
Gross profit
Source: BDI, Matelan Research, in EURm
Net cash increases
stronger than
anticipated
While the above described swing back into profitability just confirms our
high expectations (see table on second page), cash flow development comes
in as positive surprise. Apart from the strong earnings development, trade
accounts payable (in particular prepayments) increased materially in the
quarter. We thus find almost EUR10m in free cash flow, which come in
almost equal parts from cash earnings and working capital improvements
(with almost no capex). Operating free cash flow for the full year reaches
EUR12.6m and this does not include the proceeds of roughly EUR10m from
the sale of the stake in M&R. In 2015, net cash thus increased by more the
EUR20m to almost EUR59m.
Impressive free cash flow drives net cash position
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
Q1 14
Q2 14
Cash earnings
Q3 14
Q4 14
Q1 15
Change in NWC
Q2 15
Capex
Q3 15 Q4 15e
10.0
8.0
6.0
4.0
2.0
0.0
-2.0
-4.0
-6.0
-8.0
Free Cash Flow (r.s.)
Source: BDI, Matelan Research, in EURm
Q4 order intake rather
slow but still strong
order book
On the negative side, we find that order intake in the quarter was rather slow.
With new orders of only EUR2.4m, the order book has come down from
EUR109.8m at the nine-month stage to now EUR98.9m. However, this is
still a very strong level, although it still includes the Croatian order
(EUR20m), which might never materialize and the Amsterdam (EUR45m)
order which is still subject to a delay. With regard to Croatia, we have a
positive development as the investor has now got an EIB guarantee.
However, he still needs a financing bank. On the other hand, the Amsterdam
project is still waiting for a building permission and it might take until the end
of the year until the project might commence. In order to compensate for the
-3-
MATELAN Research
delay, BDI will finish the predominant part of the UK project in the current
year. We thus still find the major part of our sales estimates for the coming
two years being covered with fix orders.
Order book backs predominant part of our sales estimates
50.0
40.0
30.0
20.0
10.0
0.0
2015
2016e
BioDiesel
BioGas
2017e
FVD
Sales
Source: BDI, Matelan Research, in EURm, 2015 actual sales by division, 2016 and 2017
estimated order book by division
2016 should be
increase profitability
Moreover, looking into 2015 segment result, we find that BDI is working
very profitably again in its biodiesel division, while FVD is around the breakeven level and biogas is still loss-making. The fact that the current order book
predominantly contains biodiesel orders now points at a further improvement
in profitability in 2016. In fact, we anticipate a normalised profit level in
biodiesel more than compensating for reduced losses in BioGas and slight
start-up losses in BioLife Science.
BioDiesel segment is back into the black
25.0
20.0
15.0
10.0
5.0
0.0
-5.0
BioDiesel
Sales 2014
FVD
Sales 2015
BioGas
EBIT 2014
BioLife Science
EBIT 2015
Source: BDI, Matelan Research, in EURm
High upside to net cash
and fair value
We leave our sales estimates for the coming years unchanged but become a
bit more prudent on the EBIT and net profit side (see table on page 2). This
relates to the delay in Amsterdam and the fact that BioGas should not yet
reach a break-even result in the current year. Here, it must be highlighted that
this is a rather safe estimate and that results will be much better if the projects
in Amsterdam or Croatia would already start in 2016. Moreover, our fair
-4-
MATELAN Research
value still increases to EUR17.7 as a result of the better than expected cash
development. This leaves the current market cap once again not only below
our fair value but even below the net cash value of the company. The
following chart illustrates that the market cap has an upside of 25% to the net
cash value. Moreover, including only the book value to the participations (and
the sale of M&R has demonstrated that there might be substantial hidden
reserves) and only accounting for a very small value for the operations gives
us a fair value that leaves an upside of 42%.
Market cap is even below net cash value
Equity value
Pensions
Operations
Participations
Net Cash
Market Cap
80
70
60
50
40
30
20
10
0
Source: BDI, Matelan Research, in EURm
BioLife Science and
BioCrack activities are
additional upsides
It should also be mentioned that we have already included some start-up
costs for the new BioLife Science segment. In contrast, we have not yet
included any earnings. The same holds true for the company’s BioCrack
activities. Both can come as an additional upside to our valuation.
-5-
MATELAN Research
Sales and EBIT margin
Adj. EPS and DPS
60.0
20.0%
50.0
10.0%
40.0
0.0%
30.0
-10.0%
20.0
-20.0%
10.0
-30.0%
0.0
-40.0%
2013
2014
2015 2016e 2017e
Sales (EURm)
1.20
1.00
0.80
0.60
0.40
0.20
0.00
-0.20
-0.40
-0.60
2013
EBIT margin (r.s.)
In EUR
Cash Flow
RoCE
20.0
10.0
0.0
2013
2014
2015
2016e 2017e
-10.0
20.0
10.0
80%
15.0
5.0
10.0
0.0
5.0
-5.0
0.0
-10.0
-5.0
-15.0
-80%
-20.0
-120%
40%
2013
2014
2015 2016e 2017e
0%
-40%
Change in NWC
Free Cash Flow (r.s.)
Intangibles
NWC
In EURm
Balance Sheet
Shareholder structure
PPE
RoCE (r.s.)
19.6%
Intangibles
80.0
DPS (EUR)
120%
In EURm
90.0
2017e
15.0
-15.0
Capex (EURm)
Cash Earnings
2016e
25.0
-10.0
-20.0
2015
Adj. EPS (EUR)
In EURm
30.0
2014
Tangibles
70.0
Working Cap.
60.0
Other Assets
50.0
4.0%
2.8%
1.2%
Cash
40.0
Equity
30.0
Pensions
20.0
72.3%
Financial debt
10.0
Working Cap.
0.0
Assets
Liabilities
BDI Beteil.
Hammer
Other Liab.
In EURm
-6-
VTU
Free float
Gössler
MATELAN Research
P&L
EURm
Sales
Growth
Material costs / Inv.
Gross profit
Gross margin
Other operating costs
EBITDA
Margin
Depreciation
EBIT
Margin
Financial result
EBT
Taxes
Net profit
Minorities
Net profit a.m.
Growth
No of shares
EPS
Adj. EPS
Growth
Dividend
Balance Sheet
2013
35.4
-19.7
15.7
44.3%
-12.1
3.6
10.1%
-1.0
2.6
7.3%
1.3
3.8
-0.6
3.2
0.0
3.2
n.m.
3.8
0.85
0.85
n.m.
1.10
2014
16.3
-53.9%
-6.7
9.7
59.1%
-12.6
-2.9
-18.1%
-2.1
-5.0
-30.9%
2.1
-2.9
1.2
-1.7
0.0
-1.7
n.m.
3.8
-0.45
-0.45
n.m.
0.00
2015
33.3
103.8%
-17.3
16.0
48.0%
-14.6
1.3
4.0%
-1.2
0.1
0.4%
5.0
5.2
-1.4
3.7
0.0
3.7
n.m.
3.8
0.98
0.19
n.m.
0.10
2016e
40.0
20.2%
-22.2
17.8
44.6%
-15.4
2.4
6.1%
-1.3
1.1
2.9%
1.0
2.2
-0.5
1.6
0.0
1.6
-56.4%
3.8
0.43
0.43
126.9%
0.11
2017e
44.5
11.3%
-23.3
21.2
47.6%
-16.3
4.9
11.1%
-1.4
3.5
7.9%
1.0
4.5
-1.1
3.4
0.0
3.4
110.6%
3.8
0.90
0.90
110.6%
0.22
2013
2.6
1.0
2.6
-0.2
6.1
4.1
10.2
-0.5
-1.7
-2.2
-0.6
7.4
2014
-5.0
2.1
-1.6
-0.7
-5.2
1.2
-4.0
-1.3
0.1
-1.2
-4.4
-9.6
2015
0.1
1.2
-2.1
-1.4
-2.2
16.1
13.8
-1.3
8.4
7.1
0.1
21.0
2016e
1.1
1.3
1.6
-0.5
3.5
-9.9
-6.4
-1.3
0.0
-1.3
-0.4
-8.1
2017e
3.5
1.4
1.1
-1.1
4.9
0.6
5.5
-1.3
0.0
-1.3
-0.9
3.4
Cash Flow
EURm
EBIT
Depreciation
Other non-cash items
Cash taxes
Cash earnings
Change in NWC
CF from operations
Capex
Other investm./divestm.
CF from investing
CF from fin. and other
Change in cash
2013
8.9
1.9
25.0
12.8
48.7
0.7
11.4
20.1
0.0
32.3
80.9
53.8
0.0
53.8
0.0
2.2
0.0
2.2
0.0
10.5
14.4
24.9
80.9
2014
8.0
2.0
25.7
14.3
50.0
0.7
7.1
10.5
0.1
18.5
68.5
47.7
0.0
47.7
0.0
3.1
0.0
3.1
0.0
7.3
10.3
17.6
68.5
2015
7.6
2.6
27.3
8.1
45.6
1.1
10.8
31.5
0.0
43.4
89.1
50.9
0.0
50.9
0.0
3.3
0.0
3.3
0.0
27.3
7.6
34.9
89.1
2016e
7.6
3.1
27.3
8.1
46.2
1.1
11.1
23.4
0.0
35.6
81.8
52.2
0.0
52.2
0.0
3.7
1.0
4.7
0.0
17.8
8.1
25.9
82.8
2017e
7.6
3.6
27.3
8.1
46.7
1.2
12.3
26.8
0.0
40.4
87.1
55.2
0.0
55.2
0.0
4.0
2.0
6.0
0.0
19.8
8.2
28.0
89.1
2015
19.0
6.8
7.5
33.3
3.4
17.9%
-0.6
-8.6%
-2.7
-35.8%
0.1
0.4%
2016e
30.5
7.5
2.0
40.0
2.4
8.0%
0.2
2.7%
-1.5
-75.0%
1.1
2.9%
2017e
34.0
7.0
3.5
44.5
2.7
8.0%
0.6
8.0%
0.2
7.0%
3.5
7.9%
2015
57.2%
0.0
0.4
-46.5%
300.0
118.9
10.2
-15.5
-5.3
7.3%
0.2%
-2.8%
48.0%
4.0%
0.4%
11.2%
2016e
63.0%
0.0
0.5
-13.9%
162.0
101.3
10.7
-5.5
5.1
3.1%
1.4%
22.2%
44.6%
6.1%
2.9%
4.1%
2017e
61.9%
0.0
0.5
-13.9%
162.0
101.2
11.3
-6.2
5.1
6.2%
4.0%
69.0%
47.6%
11.1%
7.9%
7.7%
Segments and adjusted earnings
Valuation multiples
Share price
x No of shares (m)
Market Capitalisation
+ Net financial debt
+ Pension provision
+ Minorities
- Participations
Enterprise Value
Sales
Adj. EBITDA
Adj. EBIT
Adj. Net profit a.m.
EV / Sales
EV / EBITDA
EV / EBIT
PE
EURm
Intangible assets
Tangible assets
LT financial assets
Other non-current assets
Non-current assets
Inventories
Receivables
Cash
Other current assets
Current Assets
Total assets
Equity
Minorities
Total equity
LT financial liabilities
Pension provisions
Other LT liabilities
Non-current liabilities
ST financial liabilities
Payables & Advances
Other ST liabilities
Current liabilities
Total liabilities
2013
7.31
3.8
27.8
-45.1
2.2
0.0
-12.8
-27.9
35.4
3.6
2.6
3.2
-0.8
-7.8
-10.8
8.6
EURm
BioDiesel plants
Fine-vacuum dist.
BioGas plants
Sales
Biodiesel plants
Magin
Fine-vacuum dist.
Margin
BioGas plants
Margin
EBIT
Margin
2013
27.8
7.2
0.5
35.4
2.0
7.1%
0.3
4.0%
0.3
74.7%
2.6
7.3%
2014
10.2
6.0
0.2
16.3
-2.8
-27.8%
0.0
0.7%
-2.3
n.m.
-5.0
-30.9%
Key operational indicators
2014
11.86
3.8
45.1
-36.2
3.1
0.0
-14.3
-2.3
16.3
-2.9
-5.0
-1.7
-0.1
0.8
0.5
-26.3
2015
10.93
3.8
41.5
-58.9
3.3
0.0
-8.1
-22.2
33.3
1.3
0.1
3.7
-0.7
-16.7
-151.1
11.2
2016e
12.45
3.8
47.3
-50.7
3.7
0.0
-8.1
-7.8
40.0
2.4
1.1
1.6
-0.2
-3.2
-6.9
29.2
2017e
12.45
3.8
47.3
-54.1
4.0
0.0
-8.1
-11.0
44.5
4.9
3.5
3.4
-0.2
-2.2
-3.1
13.9
Equity ratio
Gearing
Asset turnover
NWC / sales
Payable days outstanding
Receivable days outstanding
Fix operating assets
NWC
Capital employed
RoE
RoA
RoCE
Gross margin
EBITDA margin
EBIT margin
Net profit margin
-7-
2013
66.5%
0.0
0.4
4.6%
108.2
117.9
10.9
1.6
12.5
6.0%
3.2%
20.7%
44.3%
10.1%
7.3%
9.1%
2014
69.7%
0.0
0.2
3.6%
163.1
159.5
10.0
0.6
10.6
-3.6%
-7.4%
-47.4%
59.1%
-18.1%
-30.9%
-10.5%
MATELAN Research
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Buy:
Neutral:
Reduce:
Sell:
In the next 6 to 12 months, we expect a potential absolute change in value of over 20% with high
forecast certainty.
In the next 6 to 12 months, we expect a potential absolute change in value of more than 10%.
In the next 6 to 12 months, we expect a potential absolute change in value of over 0% up to a
maximum of 10%.
In the next 6 to 12 months, we expect a potential absolute negative change in value of up
to -10%.
In the next 6 to 12 months, we expect a potential absolute negative change in value of over
-10 % with high forecast certainty.
The change in stock price results from the difference between the current share price and the analyst’s performance
expectations, which are generally based on a fair value calculation performed on the basis of a discounted cash flow
model and a key comparison analysis but can also consider other effects such as market sentiment.
(4) Rating distribution
Stock ratings within the coverage universe of MATELAN Research GmbH as of the publication date of this report
are distributed as follows:
Strong Buy:
Buy:
Neutral:
Reduce:
Sell:
9.1%
45.5%
45.5%
0.0%
0.0%
(5) Recommendation history
Stock ratings for the company covered in this report have developed as follows:
BDI
Date
15/11/13
16/02/11
Rating
Buy
Neutral
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MATELAN Research
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