Banca Profilo S.p.a. · MIL:PRO
Banca Profilo — Earnings Presentation (January 2024)
34 slides from Banca Profilo's earnings presentation, Jan 16, 2024
Slide 1: EGM Analysis – 2023
EGM Analysis – 2023 16 January 2024 Banca Profilo Research Francesca R. Sabatini – Head of Equity Research Eleonora Chetrì – Equity Research Analyst Michele Calusa - Equity Research Analyst
Slide 2: Agenda
Agenda EGM ALL COMPANIES 2023 NEW LISTINGS OUR COVERAGE 2
Slide 3: EGM in 2023
EGM in 2023 At the end of December 2023, Euronext Growth Milan is ● EGM included 202 companies, of which 33 new listings and a dedicated to dynamic and SPAC. In 2022, there were 26 IPOs. competitive listed SMEs seeking ● EGM collected €205mln through IPO proceeds (including greenshoe option if exerc
Slide 4: EGM by sector and geography
EGM by sector and geography At the end of 2023, ~65% of companies were classified as Consumer Discretionary, Industrials and Technology. EGM companies come mainly from the North of Italy, more precisely from the Milan area. Consumer Discretionary 25% Basic Materials 3% Telecommunications 1% Real Est
Slide 5: EGM by market capitalization and revenue
EGM by market capitalization and revenue In terms of market capitalization, at the end of December 2023, 89% of EGM companies had a size below €100mln and 47% below €25mln. A similar distribution in terms of revenue: in 2022, 89% of EGM companies had revenue below €100mln and 45% below €25mln. 30% 3
Slide 6: EGM by EBITDA
EGM by EBITDA Almost half of companies generated less than €5mln EBITDA in 2022. However, more than 45% showed an EBITDA margin above 15% in 2022. 50% 48% 25% 22% 22% 45% 40% 20% 17% 35% 15% 15% 30% % of Companies 26% % of Companies 25% 10% 19% 10% 20% 15% 5% 5% 5% 4% 10% 6% 5% 1% 0% 1% 0% 0% >150 1
Slide 7: EGM by M&A transactions
EGM by M&A transactions Over the past 5 years, M&A transactions have been growing except for the pandemic period. In 2023, 58 M&A deals have been completed, slightly below 2022 (60). There was a slowdown in M&A transactions in 4Q 2023 compared to the other quarters of 2023. In 2023, 30 companies hav
Slide 8: EGM relative performance in 2023
EGM relative performance in 2023 In relative terms, in 2023 EGM declined by 10.9%, underperforming STAR which was up 3% and FTSE Italia All Share, which surged by some 24%. 103 companies reported negative returns in 2023, of which 26 between 0% and -10%. 130 120 110 100 90 80 70 01/23 02/23 03/23 04
Slide 9: EGM performance divergence in 2023
EGM performance divergence in 2023 Over the past 10 years, EGM has showed a lower performance compared to FTSE All Shares. This performance divergence significantly worsened in 2023. This is not due to worse fundamentals of EGM companies, but mainly to: i) very little liquidity; ii) the expiring of
Slide 10: EGM and supporting measures
EGM and supporting measures PIR equity funds were set in 2017 with the aim to attract investments into Italian small caps with high growth potential. At the end of June 2023, more than €4bn were invested in equity PIRs. Of these, €230mln were invested in EGM companies, €440mln in Small Cap non-EGM c
Slide 11: EGM best and worst performers
EGM best and worst performers In 2023, Redelfi and Visibilia were the best perfomers whereas Illa and Fenix showed the biggest losses. Redelfi Fenix Entertainment Visibilia Editore GO Internet Altea Green Power Ucapital24 Italia Independent… Take off FAE Technology Meglioquesto Casta Diva Portobello
Slide 12: EGM performance from IPO
EGM performance from IPO Since their IPO, 39 companies gained over 50%. Sciuker Frames (our coverage) is among top 10 performers; its stock price rose from €1.4 at IPO to ~€4.2 at the end of December 2023. Cloudia Research Our coverage ■ Sciuker Frames Circle Culti Milano ABC Co Ediliziacrobatica Al
Slide 13: EGM by daily traded volumes
EGM by daily traded volumes Liquidity remains the critical issue in the EGM. In 2023, 50% of companies traded less than 0.1% of their market capitalization. In the 4Q23, the average daily traded value was €41k. Sciuker Frames is among top 10 companies in terms of average daily volumes in the 4Q23. S
Slide 14: EGM results and consensus estimates
EGM results and consensus estimates Since 2021, EGM companies have been growing in terms of revenue. EBITDA margin has begun contracting in 2H21 due to increasing raw material and services costs, but it has likely recovered in 2023. Revenue growth is expected to continue with revenue 2022-2025 CAGR
Slide 15: EGM and consensus estimates: what has changed?
EGM and consensus estimates: what has changed? Since our last EGM report (October) consensus has reduced revenue and EBITDA expectations for both 2023 and 2024 In 2024, consensus now expects, on average, revenue at €74mln, down from previous €89mln. In terms of EBITDA margin, consensus reduced its e
Slide 16: EGM by market multiples
EGM by market multiples EGM shows an average EV/EBITDA 2024E of 5.9x Among sectors, in 2023, Health Care left the cheapest ranked (our last report in October) to Consumer Discretionary with 5.1x while Consumer Staples remained the most expensive in the EGM with 10.1x 12x EV/EBITDA 2024 Average 2024:
Slide 17: EGM market multiples 1-year trend
EGM market multiples 1-year trend In 2023, the average EGM EV/EBITDA 1-year forward moved from 6.4 to 7.3 Consumer Discretionary experienced the biggest 12M de-rating, from 7.2 to 7. Consumer Staples and Energy showed the largest 12M re-rating, from 9.5 to 13.2 and from 6.1 to 8.4, respectively. 14
Slide 18: Agenda
Agenda EGM ALL COMPANIES 2023 NEW LISTINGS OUR COVERAGE 14
Slide 19: EGM IPOs by sector and market cap
EGM IPOs by sector and market cap In 2023, there has been a general boost in the IPO activity, with 33 new listings and a SPAC, which compares to 26 in 2022. Industrials confirmed as the dominant sector. In terms of size, at the end of December, 78% of new listings had a capitalization of less than
Slide 20: EGM IPOs by revenue and margin
0 50 100 150 200 250 300 350 400 450 SBE Riba Mundo Pasquarelli Auto Bologna Fiere Sicily By Car Reway Group Green Oleo Gentili Mosconi XENIA IMD Edil San Felice Emma Villas E-Globe 4Q23 Valtecne RES La Sia Elsa Solutions 3Q23 Simone VNE Ecomembrane 2Q23 Lemon Sistemi Deodato Gallery Ivision Tech 1Q
Slide 21: Agenda
Agenda EGM ALL COMPANIES 2023 NEW LISTINGS OUR COVERAGE * *Find out our Equity Research here 17
Slide 22: Our Coverage by market data
Our Coverage by market data In 2023, Companies in our Coverage had an average market capitalization of €40mln, in line with EGM average (€39mln). In 2023, the average ratio between daily traded value and market capitalization at 0.11%, slightly below the EGM average. 120 0.35% 0.30% 0.29% 96 90 0.25
Slide 23: Our Coverage by FY22 Revenue and EBITDA
Our Coverage by FY22 Revenue and EBITDA In terms of 2022 revenue, our Coverage showed an average of €110mln, well above the EGM average at €52mln. In 2022, the average 2022 EBITDA margin in our Coverage was 20%, higher than the EGM average at 13%. 350 329 48 50% 300 40 40% 250 32 194 200 174 30% 148
Slide 24: Performance and EV/EBITDA: our Coverage vs EGM
Performance and EV/EBITDA: our Coverage vs EGM Except for the 4Q23, our Coverage overperformed the EGM Index in 2023. Nevertheless, most of companies in our Coverage trade at a discount to its corresponding macro sector, in terms of EV/EBITDA 2024E. This leaves a potential upside. 115 Consumer Discr
Slide 25: Arterra Bioscience
ARTERRA • Business Description: Arterra Bioscience is an Italian, innovative SME, research-based biotech company with a strong know-how in biological science and an extensive experience BIOSCIENCE in screening for the discovery of new active compounds with potential multiple industrial applications,
Slide 26: Beghelli
• Business Description: Beghelli Group is an Italian company specialized in projecting, developing, manufacturing, and marketing emergency and non-emergency lighting BEGHELLI systems for industrial plants and home use. To a lesser extent, the Company is engaged in manufacturing electronic systems fo
Slide 27: Cofle
• Business Description: Cofle is a multinational company operating as Original Equipment Manufacturer (OEM) mainly for top worldwide producers of Agricultural & Earthmoving COFLE machineries, but also for Luxury Automotive and Light Commercial vehicles manufacturers. Cofle is also active in the Afte
Slide 28: Health Italia
HEALTH • Business Description: Health Italia SpA is a leading Italian operator in Healthcare and Welfare offering integrated solutions to corporates, their employees, and families. Health ITALIA Italia provides solutions for better access to Healthcare and Welfare, also through its own (Health Point
Slide 29: Riba Mundo Tecnologia
RIBA MUNDO • Business Description: Riba Mundo is a Tech Company operating in the global B2B commerce of Consumer Electronics. Its competitive advantage is its unique proprietary Big TECNOLOGIA Data software, MarVin, which matches worldwide supply and demand of Consumer Electronics and releases the b
Slide 30: Sciuker Frames
SCIUKER • Business Description: SCK Group is the leading Italian company in the design and production of environmentally sustainable windows and has established the first Made in FRAMES • Italy window and sunscreen design cluster. Investment case: There are approximately 25mln residential buildings
Slide 31: Svas Biosana
SVAS • Business Description: Svas operates in Medical Devices, acting as a producer and distributor through 5 business units. Farmex produces and sells incontinence products; BIOSANA Svas distributes consumables addressed to a vast range of medical and surgical situations; Medical produces and sales
Slide 32: TMP Group
• Business Description: TMP Group provides digital communications solutions and designs hybrid events with high technological content. The Group organizes physical, digital and TMP GROUP hybrid events through its Experience division; it provides technological services in relation to NFTs, metaverse,
Slide 33: References
References Francesca Sabatini [email protected] Head of Equity Research Tel. +39 02 58408.461 Eleonora Chetrì [email protected] Equity Research Analyst Tel. +39 02 58408.298 Michele Calusa [email protected] Equity Research Analyst Tel. +39 02 58408.784 Via
Slide 34: Disclaimer
Disclaimer ANALYST’S AND BANK’S INFORMATION THIS DOCUMENT HAS BEEN DRAFTED BY FRANCESCA SABATINI WHO IS EMPLOYED BY BANCA PROFILO S.P.A. (“THE BANK”) AS FINANCIAL ANALYST; FRANCESCA SABATINI IS RESPONSIBLE FOR THE DRAFTING OF THE DOCUMENT. BANCA PROFILO S.P.A. IS A BANK AUTHORISED TO PERFORM BANKING