Bonds Check: Stork Technical Services (STS) - an attractive risk / return profile
On 07/08/2012 STS has placed a bond with an issue volume of EUR 272.5 million successfully after a first attempt early July failed due to low demand. STS is one of two companies (along with Fokker Technologies), which is from the original Stork Holding Group after the LBO by the private equity investor Arle left in 2008. Another three divisions were sold in the last five years. The bond is part of a financing package that is separate and STS Fokker economically, to facilitate a sale of the two medium enterprises. As intended, the repayment of loans was given to the investors. company STS is the leading provider of technology services for oil production, refinery and chemical industry and power generation. These include long-term contracts for monitoring and maintenance of technical equipment, the planning and implementation of a complete shutdown (which is every three to seven years needed), non-routine inspections and repairs of machinery, underwater inspections of offshore drilling rigs and project management during demolition or conversion of chemical plants. The size of the market very fragmented industry is estimated at around EUR 100 billion. With sales of about 1.3 billion STS is the market leader and the only provider that offers its services worldwide. The biggest single customer with a sales share of around 10% is shell. Other customers include BASF, Exxon, SABIC and Vattenfall. The contracts with clients typically operate in the medium to long term (average 4 years) and are usually renewed when it expires. Key success factor in this area are the reliability in the implementation and the know-how in technical systems. of Operations / Financial Profile 2011 was the end of the RBG Group bought by the holding company Stork and merged in 2012 with the STS. Thus far only pro forma figures are before the group. As of June 2012 was recorded STS turnover for the last 12 months of 1.33 billion EUR, an increase by 1% yoy. 2011 equivalent. The EBITDA margin (adjusted for acquisition cost of the RBG) was unchanged at 7.2% (absolute: 96.1 million EUR). The order book grew by 9% to EUR 1.25 billion. After completion of the refinancing, the net debt around EUR 335 million. The ratio of net debt to EBITDA is therefore about 3.5 x. In the long-term history of STS showed a growth in sales with an average growth in the single digits. However, the volatility was driven by relatively high individual projects. The EBIT margin was between 2.1% and 6.6% percent, with positive to note is that even in the crisis years, the company never lost money. structure The bond is secured and has priority over all liabilities at the level of Stork Holding. Still, however, are primarily a EUR 100 million credit facility (currently held by 10 million EUR) and structurally loans at a subsidiary in Colombia, amounting to approximately EUR 47 million. Due to the low capital intensity is likely, however, in the event of bankruptcy are only a little ground available, so the recovery is very low. Conclusion: STS is in an attractive and stable market move. Due to the long-standing customer relationships, the good knowledge and good reputation in the long run it can maintain its market position and likely to grow slightly. In contrast, however, are low and volatile margins, an aggressive financial profile, a complicated corporate structure, uncertainty about the integration of SRM and the medium-term planning of the financial investor. Therefore, the company with a rating of B (stable) or B2 (negative) Classified. The ratings for the bonds are due to the low expected recovery again one step lower. It was therefore only logical that the yield of early July originally covered 10.5% to 12% and to shorten the term from seven to five years. Due to the improvements of the conditions then the demand of institutional investors in the re-placement was very high. With these conditions, we believe that the risk / return profile of the loan to be attractive. Carsten Baumgarte Credit Analyst & Cie Zantke. Asset Management
On 07/08/2012 STS has placed a bond with an issue volume of EUR 272.5 million successfully after a first attempt early July failed due to low demand. STS is one of two companies (along with Fokker Technologies), which is from the original Stork Holding Group after the LBO by the private equity investor Arle left in 2008. Another three divisions were sold in the last five years. The bond is part of a financing package that is separate and STS Fokker economically, to facilitate a sale of the two medium enterprises. As intended, the repayment of loans was given to the investors. company STS is the leading provider of technology services for oil production, refinery and chemical industry and power generation. These include long-term contracts for monitoring and maintenance of technical equipment, the planning and implementation of a complete shutdown (which is every three to seven years needed), non-routine inspections and repairs of machinery, underwater inspections of offshore drilling rigs and project management during demolition or conversion of chemical plants. The size of the market very fragmented industry is estimated at around EUR 100 billion. With sales of about 1.3 billion STS is the market leader and the only provider that offers its services worldwide. The biggest single customer with a sales share of around 10% is shell. Other customers include BASF, Exxon, SABIC and Vattenfall. The contracts with clients typically operate in the medium to long term (average 4 years) and are usually renewed when it expires. Key success factor in this area are the reliability in the implementation and the know-how in technical systems. of Operations / Financial Profile 2011 was the end of the RBG Group bought by the holding company Stork and merged in 2012 with the STS. Thus far only pro forma figures are before the group. As of June 2012 was recorded STS turnover for the last 12 months of 1.33 billion EUR, an increase by 1% yoy. 2011 equivalent. The EBITDA margin (adjusted for acquisition cost of the RBG) was unchanged at 7.2% (absolute: 96.1 million EUR). The order book grew by 9% to EUR 1.25 billion. After completion of the refinancing, the net debt around EUR 335 million. The ratio of net debt to EBITDA is therefore about 3.5 x. In the long-term history of STS showed a growth in sales with an average growth in the single digits. However, the volatility was driven by relatively high individual projects. The EBIT margin was between 2.1% and 6.6% percent, with positive to note is that even in the crisis years, the company never lost money. structure The bond is secured and has priority over all liabilities at the level of Stork Holding. Still, however, are primarily a EUR 100 million credit facility (currently held by 10 million EUR) and structurally loans at a subsidiary in Colombia, amounting to approximately EUR 47 million. Due to the low capital intensity is likely, however, in the event of bankruptcy are only a little ground available, so the recovery is very low. Conclusion: STS is in an attractive and stable market move. Due to the long-standing customer relationships, the good knowledge and good reputation in the long run it can maintain its market position and likely to grow slightly. In contrast, however, are low and volatile margins, an aggressive financial profile, a complicated corporate structure, uncertainty about the integration of SRM and the medium-term planning of the financial investor. Therefore, the company with a rating of B (stable) or B2 (negative) Classified. The ratings for the bonds are due to the low expected recovery again one step lower. It was therefore only logical that the yield of early July originally covered 10.5% to 12% and to shorten the term from seven to five years. Due to the improvements of the conditions then the demand of institutional investors in the re-placement was very high. With these conditions, we believe that the risk / return profile of the loan to be attractive. Carsten Baumgarte Credit Analyst & Cie Zantke. Asset Management
Domani risultati semestrali. A 70, secondo me è da prendere a occhi chiusi, considerata anche la struttura del debito e la qualità del bond
