da Intermonte – PHARMANUTRA company research report

Buon pomeriggio, di seguito e in allegato inviamo il company research report relativo a PHARMANUTRA a cura di Intermonte. Rimaniamo a disposizione per ulteriori informazioni. Un caro saluto, Lucrezia Pisani M. +39 347 6732 479
2Q Should Confirm Double Digit Trends and Solid Margins
* 2Q preview. 2Q22 results will be released on 5 September. We expect confirmation of the positive momentum, with outstanding acceleration also supported by strong commercial trends abroad. Net sales should have increased to €20.5mn, up 14% YoY; 1Q (+32% YoY) was particularly strong as foreign sales benefitted from a concentration of orders that fully covered the targets for 2Q and part of 3Q. Adj. EBITDA should have come to €6.5mn (+1% YoY), with the margin on net sales at 31.6% (-4pp YoY), confirming the company’s commitment to reinvesting in commercial initiatives (e.g. attending conferences/events, new agreements with exclusive distributors abroad, expansion of scientific sales rep coverage in Italy) to support the continuation of top-line growth at double-digit levels. We do not expect any meaningful one-offs in the quarter. Adj. net profit should have come to €4.5mn, up 9% on €4.1mn in 2Q21. Assuming some NWC absorption in 2Q (linked to higher sales), we estimate FCFO entirely absorbed by higher CapEx (€3.5mn from extraordinary investments for the new HQ), dividends (€6.9mn), and further buybacks in the quarter (€0.3mn, own shares now 0.31% of share capital), leading to a positive NFP at €19.1mn, lower than as at YE21 (€28.1mn).
* Akern, a highly accretive deal. This week PHN completed the first closing in the Akern acquisition (announced 15 June, see section in the report) related to an 86.48% stake for outlay of €10.78mn. The second closing on the remaining 13.52% of capital will take place by year-end for €1.22mn. The parties have agreed to deferred earn-outs for the vendors of up to €3mn subject to achieving certain profitability targets on 2022-2024. We estimate a 7-8x EV/EBITDA’23 multiple (before earnout), significantly below the current PHN market multiple of circa 24x. Financials indicated for Akern (sales €4-5mn and EBITDA c.€1mn) confirm top[1]line/EBITDA/EPS upside of at least 4-5% on 2023, ahead of industrial synergies.
* Changes to estimates. We are raising our FY23-24 estimates by 4%, while leaving our FY22 projections unchanged. On Akern, we expect management to provide more colour in the conference call.
* BUY confirmed; new TP at €86 (from €85). After the market sell-off year-to-date (PHN -13%, FSTSE Italia STAR -27%), the current valuation looks less demanding vs the sector (on EV/EBITDA and P/E multiples), while estimate direction remains extremely supportive, prompting us to confirm our constructive view on the stock. Further upside may come from M&A (we see at least c.€70-80mn of firepower). The short-term focus on the stock is related to the prospects for a strategic partnership with a local distributor in order to enter the US market. Thanks to its undisputed leadership in solid oral iron supplements, high entry barriers due to IP protection, and a relentless commitment to R&D for new product launches, PHN looks very well placed in a steadily growing industry. Moreover, PHN has notable scope to outstrip market growth trends, leveraging on the expansion of salesforce coverage in Italy, the launch of new products, and the resumption of market activities in the post[1]Covid environment, but also the opportunity to increase its presence abroad, especially in key countries offering huge growth potential.