Magician
Forumer attivo
Ciao non seguo il titolo, ma ho una recente sceda di valutazione negativa.
MANUTENCOOP
[FONT="]Weak 3Q14 results as expected and disappointing on working[/FONT] [FONT="]capital : we remain negative[/FONT]
The facility services Italian group Manutencoop generated weak 3Q14 results, as expected. Revenues were down 6.4% in 3Q14 vs 3Q13 on an organic basis vs -2.8% in 2Q14. The EBITDA was down 14.8%, roughly in line with the previous quarter (-14.6%) and slightly better than in 1Q14 (-17.3%). The EBITDA dropped from 11% to 10% in 3Q14. We still assess that the EBITDA may have dropped by 25% in the facility services, while Manutencoop may have posted weaker yet still positive results in its laundering & sterilization division.
The group remained heavily penalized by i) a depressed macro environment in Italy, which translated into price pressure and ii) the reduction in volumes with Telecom Italia.
This contract accounted for 11% of total revenues in FY13. The group also continued to suffer from the start-up costs of the sol called contract for Italian schools tendered by the Consip Scuele. The group clearly lost some momentum regarding cost cutting, which drove the earnings in the past. New contracts were mostly signed in Public (45%) and in the private sector (37%). The total share of revenues gained to be generated with Public entities (82%) will therefore be much higher than the average share over the past three years, i.e 63%. Bearing in mind that we expect prices to remain under pressure at Public Administration due to the Spending Review and Stability Pact implemented in 2012, we believe that Manutencoop should be affected y tougher pressure on price going forward.
This program aimed at cutting Public expenses by EUR26bn over a three year-period in 2012-2014. In particular on healthcare expenses, the program required 5% cut in the services for contracts signed after July 7, 2012 and a 10% cut for those signed after January 2013.
The backlog continued to decrease to EUR2.8bn, i.e -3% vs 2Q14 and is now down 11% vs its recent peak reached at year-end 2013 (EUR3.2bn). While the group renewed higher contracts in 3Q14 vs 2Q14, we noted a huge drop of new contracts signed in the quarter, i.e EUR53m in 3Q14 vs EUR120m in 2Q14. Therefore, the backlog / revenues ratios lowered to 2.8x vs a record 3x last year, still highlighting strong visibility on earnings as 2/3 of the backlog is converted in revenues within the next year.
As we feared, the group did fully reverser the negative change in working capital of 1H14 (EUR-36m), still posting a EUR-4m over the first nine months. The Italian Administrationview
paid EUR32.5bn (69%) out of a total of EUR47bn of debts overdue estimated to be paid between 2013 and 2014. As we feared, the group may have already received the bulk of the benefits from the law. We remind that it received EUR127m on working capital in FY13 after only EUR22bn were paid by various Administrations. It had an outflow of EUR4m in 9M14 whereas and additional EUR10bn was paid by the Administration. We lower our estimate regarding the annual change in working capital to be reached this year to EUR15m vs EUR28m initially expected and lower to zero in FY15.
Tableau 1
[FONT="]Follow up on Italian Administration payments[/FONT]
Dec 2013 Fev 2014 March July 2014 oct-14
Amounts paid 22 22,8 23,5 26 32,5
% total debt overdue already paid by Public
Administrations
47% 49% 50% 55% 69%
Amounts to be paid 25 24,2 23,5 21 14,5
% total debt overdue still to be paid by Public
Administrations
53% 51% 50% 45% 31%
Credit metrics deteriorated, as expected. This was driven by negative FCF over the pastni ne months, i.e EUR12m. This was despite i) low capex as we expected (2.9% of revenues on a LTM basis) and ii) the ongoing reduction of the number of days of working capital to 197vs 209 in 2Q14 and 215 in 1Q14. The net adjusted working capital was cut by 27% to EUR265m in the quarter. However, this did not translate into cash inflows.
Cash eroded to EUR85m in 3Q14 vs EUR112m. Apart from the negative FCF, the group redeemed additional short term debt for EUR23m. Overall, the group redeemed EUR88m on a YTD basis. The non-adjusted Net debt / EBITDA ratio strongly deteriorated from 3.3x in 2Q14 to 3.6x in 3Q14 due to the decrease of the EBITDA combine with negative FCF. We remind that Manutencoop cancelled its credit facility, so that liquidity only reached EUR85m. We downgrade our credit estimates towards an adjusted leverage close to 4.2x in FY14 vs 3.5x in FY13 and expect the ratio to deteriorate further towards 4.5-4.6x within the next years. This assumes no major contract loss as it had been the case with TI and Fiat in the past. It also excludes M&As or dividend payments, neither any fine related to the Consip Scuele current investigation.
Finally, we remind that PE sponsors (28%) have a put option that could be triggered in July 2016 for EUR176m which could have a major 2.4x impact on the leverage.
ess review
Tableau 2
[FONT="]Credit ratios of Manutencoop- EURm[/FONT]
[FONT="]Key credit ratios FY11 FY12 FY13 FY14 FY15[/FONT]
Net debt 296 325 345 385 400
Net debt / EBITDA 2,3 2,6 2,7 3,6 3,8
EBITDA / interest expense 6,4 5,5 7,9 2,7 2,6
FFO / net debt 10% 16% 19% 5% 5%
Adjusted net debt / Adj EBITDA 4,6 4,7 3,5 4,2 4,4
Adj FFO / Adj net debt 4% 10% 15% 6% 6%
Gross debt / EBITDA 2,7 3,2 4,3 5,5 5,6
Gross adjusted debt / EBITDA 5,4 6,0 5,6 6,8 6,8
[FONT="]Really no trigger on these results, which were weak on the EBITDA,on the nature[/FONT] [FONT="]of new contract gains (mostly Public entities) and poorworking capital inflows.[/FONT]
[FONT="]Credit metrics deteriorated sharply, in line with our expectations. The group[/FONT] [FONT="]should remain FCF negative over the next years and itsEBITDA could continue to[/FONT] [FONT="]drop. We remain negative on Manutencoopand Sellers of the Secured 8.5% 2020[/FONT] [FONT="]at 76. The newsflow willremain negative on operating trends and on litigation,[/FONT][FONT="]while the put option of PE funds in July 2016 would add further pressure on the[/FONT][FONT="]credit.[/FONT]
....comunque x me sotto 110 e' strong buy 
