Less glorious than during the Covid period (logical)

Ebro had held up well up to this point but we were not that surprised to see a relatively poor Q3. The group is facing a lot of pressures that are likely to continue in the coming months.

Still highs... and lows

Easy comps have driven up the H1 results, but the environment remains tight and Ebro expects lower H2 demand which should in the end not help the rest of the year.

Ebro vs. distributors

A strong performance in Q1 (better-than-expected) is welcomed given the more cautious tone of the company for the following months.

Not so bad !

9m FY21 figures were obviously down vs. FY20 (strong negative comps), but they were still remarkable compared with FY19. We expected very complicated management of inflation for the group, but we see a rather good surprise on that side. On the other hand, we should be more cautious about 2022, when the current hedging will roll off.

Tough comps, but still progressing vs. 2019

Unsurprisingly, we see a decrease in the results compared to 2020, but still good progress compared to 2019, which confirms the good trajectory of the group.

Tough comps but the momentum remains strong

With no surprise, Q1 FY21 top and bottom lines declined due to tough comps. The momentum remains, however, strong looking at CAGR 21/19, but input cost inflation is now the main threat looking forward.

2020: Ebro's year

Unsurprising very strong FY20 results (but still even more than our expectations). We believe Ebro is at a turning point and we continue to be positive on the stock.

Maintained positive momentum

Although the figures showed greater volatility, the rise in demand triggered by the COVID-19 pandemic continues to dominate Ebro’s results. Deleveraging is well on track.

COVID-19 pushed up Q1

After a strong set of FY19 figures, Ebro’s Q1 benefited from COVID-19 due to increasing rice and pasta consumption. Q2 should be even better, while we expect a gradual return to normal starting in Q3. EBITDA is affected by raw material prices increase, but the group is confident that the FY20 bottom line should be better yoy.

Investments pushed up growth...and net debt

A strong set of FY19 figures, especially thanks to strong comparables. We note that organic investments had begun to bear fruit, although the company doesn’t expect to see the relevant impacts until 2021. In the mean time, it is actually debt that is going up.

Strong boost to its results… and its net debt

The group reported a strong set of Q3 FY19 results, beating analysts’ expectations on the bottom line. Ebro’s investments finally pushed up growth… as well as the group’s debt.

Disappointing FY18 set of results

FY18 Key Financials : Group sales grew by 5.6% to €2,464m (on organic basis: +2%) EBITDA fell by 13.4% to €311m, with currency having a negative impact of €4.4m EBITDA margin declined by 2.6 pp to 11.7%. In Q4: 14% EBITDA margin Net profit fell by 36% to €142m, while the FY17 net profit was positively driven by the tax-related measures approved in the USA, France and Italy (one-off extraordinary income of €56.5m). Excluding this external effect, net profit fell by 14% FY18 Net debt/EBITDA

Q3: challenging cost structure

Q3 update: Sales are up 11%, however, the EBITDA margin contracted by 340bp due to the Rice business which was impacted by higher raw material prices (mainly in North America) as well as a weaker Pasta performance and higher logistics costs in the US. By division, Rice recorded +16% in sales and a 516bp EBITDA margin contraction to 9.2%. Pasta recorded +7% in sales and a 316bp EBITDA margin contraction to 9.8% (in Europe, Pasta consumption was negatively impacted by the hot weather, the group e

Q2 disappoints

H1 update: revenue grew by 2.3% (+5.5% in Q2), whereas EBITDA contracted by 16.6%. The EBITDA margin stood at 11.2%. By division, the Rice business’s sales were up +2.6% in Q2, whereas the EBITDA margin contracted vs. Q1 to 12%. In Pasta, sales were up +8% in Q2 (partially helped by easier comps) while the EBITDA margin stood at 11.1% (vs. 11.8% in Q1). Net profit for the period is down 17.1%.

Q1 disappoints

Q1 update: net sales grew +1.3% (+3% excluding FX), whereas the EBITDA margin contracted 220bp to 12.6%. By division, Rice recorded +1.9% growth in net sales and a 450bp EBITDA margin contraction to 13% (Q4: 14.1%) due to the substantial increase in cost of raw materials (c.+22% inflation) as well as increased logistic costs and a shortage of plant workers in the US (high demand for electricians following the hurricanes). Pasta recorded -3.6% in sales with a 20bp contraction in the EBITDA margi

Hybridan Small Cap Feast - 17 Jan 23

17 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

North America drives the stock down

North America looks to be a concern following what seems to be a clear slow down. Nevertheless, overall organic net sales exceeded the consensus, as did operating profit. Tomorrow’s report from Remy tomorrow will help to draw some conclusions.

Hybridan Small Cap Feast - 12 Jan 23

12 January 2023 @HybridanLLP Status of this Note and Disclaimer This document has been issued to you by Hybridan LLP for information purposes only and should not be construed in any circumstances as an offer to sell or solicitation of any offer to buy any security or other financial instrument, nor shall it, or the fact of its distribution, form the basis of, or be relied upon in connection with, any contract relating to such action. This document has no regard for the specific investment object

Morning Note – 16 January 2023

Sparkling YE update with strong momentum entering 2023

Today’s YE update is excellent, with stellar growth of 53% in the higher margin sparkling wine category the stand out feature. Good progress is evident across all trade channels, market share is higher and momentum going into 2023 is strong. In short, new management is building a track record of delivery against the sparkling wine / premiumisation led strategy. English sparkling wine is in structural growth, benefiting from an improved maritime climate, international recognition and investment.

Dekel Agri-Vision (DKL) – Corporate – Cashew moves to 100% ownership; transformative project moving ahead

This morning's announcement that the company's stake in its Tiebissou raw cashew nut (RCN) processing project is being raised from 70.7% to 100% appears well-aligned to the company's strategy of growth and diversification, and particularly so at a point when the cashew project is set to deliver significant rewards in FY2023-24 and beyond. DKL is an increasingly diversified agricultural concern focussed on West Africa (Ivory Coast) whose portfolio of projects includes a fully operatio

SHORE CAPITAL - Greencore+ (GNC) House Stock, 76p

Exceptional 2022 harvest yield & quality

A very positive update today from Chapel Down on the all-important yearly harvest. The yield is a bumper 2k tonnes, a near historical high and significantly, of very high quality grapes. This is consistent with the Group’s premium strategic positioning and helps underpin outer year revenue expectations. The exceptional harvest news builds on the solid interims recently and supportive of the ambition to double the size of the business by 2026 (>£28m sales and >£5m EBITDA). English sparkling wine

Domestic, regulated and medicinal

ABI takes over the lead

ABI outperformed its peers, even beating expectations, and this is rare enough to be noted. Although the environment is not the most conducive, it may be time to recognise the group’s worth.

WH Ireland: Capital Metals (CMET) - Updated development study for Eastern Minerals Project, Sri Lanka

Capital Metals today updates the market on the economics for the development of the Eastern Minerals Project in Sri Lanka – one of the world's highest grade mineral sands projects. The low capital cost of $37m to positive cashflow and $81m in total (which includes a 20% contingency) is to be spread over 4 years as Capital Metals brings the project into full production in four stages; from delivering a Heavy Mineral Concentrate (HMC) to expansion and mineral separation to sell separate mineral s

Capital Metals (CMET) - Low-capex, high-margin mineral sands project in Sri Lanka primed for development

Capital Metals has advanced its high-grade Eastern Minerals Project in Sri Lanka to a point where it is ready, subject to funding, for construction. With minimal construction capital ($48m WHIe), the project would be generating cashflow within 12 months, and cashflow-positive 12 months hence. Amid growing demand and restricted supplies of zircon, titanium dioxide, and garnet, we believe the high-margin Eastern Minerals Project is eminently fundable and will generate high returns for shareholders

Premier Foods+ (PFD) - House Stock at 113p - Acquisition of The Spice Tailor - a hand-in-glove growth driver - 1Y EPS enhancement

SHORE CAPITAL - Initial Trading Comment

Steady progress in line with expectations