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12Industry is alive and well, as the Mannheim-based industrial services provider proves in times of "deindustrialization". Sales plus, profit plus, dividend plus, outlook plus...
In addition, market leader in Ukraine and definitely involved in the reconstruction. Very high recurring income and planned share buyback program.
Sometimes you don't need the dip. Sometimes you just feel it.
$GBF (-13,52 %) Let's go!
The turnover of $GBF (-13,52 %) rose by twelve percent last year to over five billion euros.
The strong business performance is also reflected in the dividend, which was increased from 1.80 euros to 2.40 euros per share.
Bilfinger is also raising its forecast for 2025 and anticipates an increase in revenue to between EUR 5.1 and 5.7 billion and an EBITA margin of 5.2 to 5.8 percent - after 5.2 percent in 2024 and 4.3 percent in 2023.
Source: Der Aktionär
So I've had a look around and picked out a few interesting stocks where I see a lot of potential. I would like to hear your opinion. I am not planning any long-term positions, but rather trading for a maximum of 6 months. I have decided on $RWE (-6,04 %) with HD4M7A entry price of 1.73 $GBF (-13,52 %) with SX04B8 entry of 0.35 $JGHHF with HD9ARC entry today for 1.40 $DUE (-8,74 %) with HD90XX entry 1.25 $KTN (-8,56 %) with SX04FN entry 0.21 I think that these stocks will perform well over the next few months if the tech stocks correct sharply, as I expect.
A few days before the Bundestag elections, Wall Street has discovered its special love for Europe and German second-line stocks. The small cap index MDaxwhich is usually overshadowed by the Dax, is suddenly enjoying a level of attention not seen for years. Several major Wall Street addresses have published analyses of the index of medium-sized companies almost simultaneously.
The MDax is considered to be one of the most undervalued indices in the Old World and this is precisely what makes it particularly attractive from Wall Street's perspective. The Bundestag elections are fueling this bet: if Germany manages to turn the economy around afterwards, the MDax could benefit disproportionately.
Around a third of the MDax companies' business is attributable to the domestic market. Accordingly, the local misery has weighed much more heavily on the index. By contrast, the index has not yet priced in the economic policy stimuli that could arise after the election.
Possible beneficiaries are (examples):
Through lower energy costs:
$WCH (-7,57 %) | $LXS (-9,26 %) | $GBF (-13,52 %)
Improved consumer sentiment:
$CTS (-0,89 %) | $BOSS (-2,48 %) | $SIX2 (-6,59 %)
Suitable funds could be
$EXID (-6,57 %) | $MD4X (-6,32 %)
Source (excerpts) & graphic:
WELT editorial team "Alles auf Aktien"
Summary Earnings, 14.11. 👇🏼
Siemens AG Q4 24 Earnings: $SIE (-7,45 %)
- Orders At 22.93Bln Euros (est 21.36 Bln Euros)
- Revenue Rising 1% To 20.81 Bln Euros (est 20.77 Bln Euros)
- Profit 3.12 Bln Euros (est 3.0 Bln Euros)
- Net Income Of 1.90 Bln Euros (est 1.80 Bln Euros)
Swiss Re Q3 24 Earnings: $SREN (-6,98 %)
- Net Income Of $2.2 Billion For The First Nine Months Of 2024
- 9m Return On Investments (ROI) Of 3.9%; Recurring Income Yield Of 4.0%
- Return On Equity (ROE) Of 13.4% For First Nine Months Of Year
- Still Expects To Achieve A Group Net Income Of More Than $3 Billion For 2024
- Currently Expects Losses Resulting From Hurricane Milton To Be Less Than $300 Mln, Which Will Impact Group Results In Q4 2024
E.ON SE 9M 24 Earnings: $EOAN (-6,15 %)
- Adj EBIT EU4.37B, -23% (Y/Y)
- Sales EU56.28B, -19% (Y/Y)
- Still Sees FY Adj EBITDA EU8.8B To EU9B, (est EU8.94B)
- Still Sees FY Adj Net EU2.8B To EU3B (est 2.92B)
Deutsche Telekom AG Q3 24 Earnings: $DTE (-4,46 %)
- Net Income EUR 2.957B (est EUR 2.396B)
- Adjusted EBITDA AL EU11.10B (est 11.05B)
- Rev EU28.50B (est 28.39B)
- Sees FY Adj EBITDA Al About EU43B
ASML is sticking to its long-term goals and plans to increase sales to between 44 and 60 billion euros by 2030, with a gross margin of 56 to 60 percent. Despite the current difficult market conditions, ASML CEO Christophe Fouquet sees promising long-term prospects for the semiconductor industry, especially due to the AI trend. $ASML (-2,09 %)
Talanx expects a record profit of over 1.9 billion euros for 2024 and a surplus of over 2.1 billion euros for 2025. The profit increase will be supported by primary insurance and new targets are to be presented at the Capital Markets Day on December 11. $TLX (-7,19 %)
Nagarro increased sales by 3.7 percent to 242.9 million euros in the third quarter and adjusted EBITDA by a good eight percent to 34.6 million euros. The company is adjusting its revenue forecast for 2024 to 960 million euros and expects an EBITDA margin of over 14 percent. $NA9 (-1,74 %)
Adesso recorded an increase in turnover of 15 percent to 330 million euros in the third quarter and a 37 percent rise in operating profit to 38.9 million euros. Jörg Schroeder will step down as Chief Financial Officer on April 30, 2025; his successor will be Michael Knopp from January 15, 2025. $ADN1 (-3,88 %)
Dermapharm increases turnover in the first nine months by just under three percent to 890.1 million euros, while adjusted EBITDA falls slightly to just over 240 million euros. However, consolidated net income rose to just under 93 million euros, and the Group CEO is optimistic for the final quarter. $DMP (-1,73 %)
Energiekontor sees itself on course for its annual targets after nine months with an expected pre-tax result of EUR 30 to 70 million, although the upper end of the range will not be reached due to the below-average wind year. Three projects with 79 MW have already been commissioned this year and several more projects are currently being marketed. $EKT (-6 %)
The financial services provider MLP increased revenue by twelve percent to EUR 746 million in the first nine months and EBIT by almost half to EUR 66 million. The company confirms its forecast for 2024 with EBIT of between EUR 85 and 95 million and expects EBIT of EUR 100 to 110 million in 2025. $MLP (-6,63 %)
GFT Technologies is again lowering its annual targets and now expects revenue growth of 10 percent to around EUR 865 million and adjusted EBIT of around EUR 77 million. Profit before taxes is expected to fall to around EUR 65 million, as the environment remains challenging and momentum in the coming months will be lower than expected. $GFT (-10,68 %)
ProSiebenSat.1 is lowering its forecast for the year due to weak TV advertising revenues and expects an adjusted operating result of less than EUR 575 million. The Group plans to sell Flaconi and Verivox in order to invest in Joyn, programs and debt reduction. $PSM (-1,62 %)
Wacker Neuson is again lowering its annual targets and now expects revenue of EUR 2.2 to 2.3 billion and an EBIT margin of 5.5 to 6.5 percent. In the third quarter, the company reports a drop in revenue of over 20 percent and a 61 percent fall in EBIT. $WAC (-10,75 %)
Cewe confirms its annual targets with sales of between 770 and 820 million euros and an EBIT of 77 to 87 million euros, with the upper half of the ranges being targeted. The company generates most of its profits in the Christmas quarter and posts a marginally positive EBIT in the summer quarter, despite increased marketing expenditure. $CWC (-2,67 %)
Merck KGaA reports a 1.8 percent increase in sales to 5.3 billion euros in the third quarter, while the adjusted operating result rises by 12 percent to over 1.6 billion euros. CEO Belén Garijo announces that sales for 2024 are expected to be in the lower half of the previous range. $MRK (-4,87 %)
Bilfinger records revenue growth of 15 percent to just under EUR 1.3 billion in the third quarter and increases operating profit by 35 percent to EUR 76 million, supported by good demand and the latest acquisition. The Executive Board confirms the adjusted annual targets with an increase in revenue to EUR 4.8 to 5.2 billion for 2024, also taking into account a savings program and special effects from the integration of Stork. $GBF (-13,52 %)
K+S is revising its production forecast for 2024 downwards due to high sickness rates and now expects an operating result (EBITDA) of around EUR 540 million. In the third quarter, the company reports a decline in sales and EBITDA, with profits exceeding analysts' expectations but remaining below consensus estimates for the full year. $SDF (-1,01 %)
25.10.2024
Lilium subsidiaries have to file for insolvency + Shop Apotheke and DocMorris pick up + US parcel service UPS earns more than expected + Bilfinger shares under pressure after tragedy in the USA
After the end of state support, Lilium announces Lilium $LILM (-6,19 %) announces that its most important subsidiaries will file for bankruptcy. The air cab developer's share price then plummets by more than 58 percent.....
On Thursday, market observers pointed to positive signals in a court case involving mail-order pharmacies in the landmark proceedings over price discounts on prescription drugs. The shares of Redcare Pharmacy $RDC (-2,11 %) extended their gains by up to five percent and were still up by almost four percent in the afternoon. The competitor DocMorris $DOCM (-3,01 %)which at times extended its gains in Zurich to more than ten percent. DocMorris shares thus recovered strongly from the most recent low since June 2023. Redcare shares continued their recent rally. They have gained almost 30 percent since mid-September. However, they once again encountered resistance at the EUR 150 mark. Analyst Thomas Rothäusler from Jefferies pointed out that an attorney general had issued a final opinion in proceedings in which DocMorris is taking on the North Rhine Chamber of Pharmacists. This opinion was very clearly in favor of bonuses on prescription drugs. According to Rothäusler, the final result is likely to have a significant impact on the future growth of online pharmacies. According to the expert, the final ruling of the European Court of Justice is expected in the next two to three months.
The US parcel service UPS $UPS (-1,35 %) earned a surprisingly high profit in the third quarter thanks to good business and the sale of a subsidiary. The bottom line was a profit of a good 1.5 billion US dollars (1.4 billion euros), around 37 percent more than a year earlier, as United Parcel Service (UPS) announced in Atlanta on Thursday. Even without the special effect, this was more than analysts had expected on average. For the year as a whole, however, CEO Carol Tomé is now expecting lower turnover because the sold subsidiary Coyote Logistics is no longer included in the figures. According to Tomé, the Group's turnover is only expected to reach around 91.1 billion dollars in 2024. She had previously forecast 93 billion. However, before special effects, a larger share of turnover is expected to remain as operating profit at UPS. The manager is therefore expecting an adjusted operating margin of around 9.6 percent. Previously, she had assumed 9.4 percent. In the third quarter, UPS reported a turnover of 22.2 billion dollars, 5.6 percent more than a year earlier. This was about as much as analysts had expected on average.
The collapse of a ferry dock in the USA caused the shares of Bilfinger $GBF (-13,52 %) shares on Thursday. The share price fell by 6.8 percent to 46.25 euros. If this remains the case, it would be the biggest daily loss in almost two years. In a letter of condolence, Group CEO Thomas Schulz and the head of the US subsidiary Centennial Contractors Enterprises, Geoff Preisman, expressed their deepest sympathy to the families of seven people who reportedly lost their lives in the collapse of a ferry dock on October 19. The accident occurred on the island of Sapelo off the coast of the US state of Georgia. Centennial acted as the general contractor for the construction of the dock and pier in question, the statement continued. The company worked with local subcontractors and suppliers to complete the project in November 2021. Should Centennial, as the general contractor, have to assume liability for the accident, a payment of an estimated 50 to 100 million euros is imminent, said a stock market analyst. This scenario is weighing on the Bilfinger share price.
Friday: Stock market dates, economic data, quarterly figures
ex-dividend of individual stocks
Fastenal USD 0.39
Quarterly figures / company dates USA / Asia
13:00 Colgate-Palmolive Quarterly figures
Quarterly figures / company dates Europe
06:30 Sika quarterly figures | Holcim | SGS Trading Update 3Q
07:00 Mercedes-Benz | Stratec | Signify quarterly figures | Safran sales 3Q
07:30 Sanofi quarterly figures | Remy Cointreau Q2 sales
07:45 Eni quarterly figures
08:00 Yara quarterly figures | Mercedes-Benz analyst conference
09:00 Holcim analyst and press conference
09:15 Mercedes-Benz PK
14:00 Sanofi Analyst Conference
17:30 Porsche AG quarterly figures and press conference
Economic data
01:30 JP: Consumer prices Greater Tokyo October core rate (ex food)
FORECAST: +1.7% yoy previously: +2.0% yoy
08:45 FR: Consumer Confidence October FORECAST: 95 previous: 95
10:00 DE: ifo Business Climate Index October PROGNOSE: 85.6 PREVIOUS: 85.4 Situation assessment PROGNOSE: 84.3 PREVIOUS: 84.4 Business expectations
PROGNOSE: 87.0 PREVIOUS: 86.3
10:00 EU: ECB - October consumer survey results | Publication of consumer survey results | ECB, M3 money supply and lending September M3 money supply FORECAST: +3.0% yoy previously: +2.9% yoy
14:30 US: New orders for durable goods September
PROGNOSE: -1.0% yoy previous: 0.0% yoy
16:00 US: Consumer Sentiment Index Uni Michigan (2nd survey) October
FORECAST: 69.0 1st survey: 68.9 previous: 70.1
Hello dear community,
In view of the fact that there are now a lot of newcomers on the platform, I've created a graphic, typical of social media, to give you an overview of stocks that not everyone may have on their radar. It goes without saying that you can't know your way around every sector. But we have come together here in the community for a solid exchange.
But since we're here on Getquin and not on Instagram, here's some input for the inquisitive.
What do the companies do anyway?
Service providers:
On the service provider side, there are some rather atypical companies for the sector.
Here I have Friedrich Vorwerk $VH2 (-15,16 %) Vinci $DG (-5,04 %) , Ferrovial $FER , Bilfinger $GBF (-13,52 %) and Jacobs Solutions $J (-5,61 %) are listed here.
Their main focus is the background work on the properties themselves. They support the companies in planning, realization, construction and maintenance. They work decentrally in regional working groups to cover the breadth of the industry. They offer almost every service for an industrial company.
The established elite
If you want to invest in the hydrogen sector, all roads lead to the giants Linde $LIN (-5,56 %) Air Products $APD (-6,2 %) and Air Liquide $AI (-0,98 %) . Their market power in the field of industrial gases and in today's market environment of commercial hydrogen production seems irrefutable. Their know-how in the gaseous material production segment has been tried and tested for decades and the processes are almost perfectly optimized. Each company also has its own engineering divisions, making them perfectly positioned for the future in electrolyzer development.
The established newcomers
With plenty of money in their pockets, the oil companies Shell $SHEL (-7,19 %) Total $TTE (-6,71 %) and BP $BP. (-8,86 %) are also entering the segment. Oil is finite, but the business should not be. These companies are also experienced in dealing with hydrogen. Hydrogen is an essential component in the refinery process. In order to become less dependent on the big 3, new market areas are also being explored here. Will they be able to prove themselves?
Speculative titles
Never anything but expenses. Years of hype and yet a harsh reality hit the small fish in the shark tank surrounding the segment. Nel $NEL (-3,71 %) Plug Power $PLUG (-0,91 %) and Ballard $BLDP (-1 %) are long-suffering. They have never been able to deliver even remotely profitable figures. On the contrary, things seem to be getting worse quarter after quarter. Only turnover is increasing. Can that ever be good?
Plant engineering and equipment
Of course, in a globalized world, you no longer take care of the entire value chain from A-Z. Every company specializes in its own segment. The long-term beneficiaries of the industry are therefore the equipment suppliers, because they have to develop the technical foundations for every innovation in order to survive in the vastness of globalization.
The plant manufacturers
They manufacture the physical parts for the process plants.
Examples of this are Voestalpine $VOE (-6,8 %) , Atlas Copco $ATCO B or Sulzer $SUNE .
The suppliers
The transportation of substances is also part of this. Material transport in industry, but also at home, for example in water pipes, is ensured by pumps (for liquids) or compressors (for gases). Established brands here are KSB $KSB (-8,2 %) , Xylem $XYL (-4,99 %) , Gorrman-Rupp $GRC (-3,91 %) but also as a complete supplier Chart Industries $GTLS (-6,64 %) or SKF $SKF B (-6,83 %) or for specialized tools Stanley B&D $SWK (+0,31 %) .
Process control is also indispensable. Brands such as Siemens $SIE (-7,45 %) ABB $ABBN (-4,6 %) or Rockwell $ROK (-4,27 %) and Parker $PH (-6,33 %) have established themselves here. They not only supply the electronic equipment for the process systems. They also offer their software services as safety services so that safety in process control can always be guaranteed.
I hope I have given you a little insight into the industry and would be delighted to receive constructive feedback.
But there is "lithium" in the name ...
Hello dear community,
In the following also times a contribution about lithium and the product types, which are literally floated on the stock market.
My last post was about the alternative "ammonia". Click here for the post:
https://getqu.in/2A360BDV8GYN/5eFN2FjPbr/
How will the general investor know what's behind the lithium companies?
I hope to enlighten you a little bit.
1. deposits
Lithium has a share of about 0,006% on earth (Q: "PSE in facts and figures"). Lithium occurs mostly as salt in nature, which always shimmers so great on the pretty stock market photos. But this is lithium carbonate. But it is also deposited in various minerals. However, these are so-called "complex" compounds that cannot be separated easily without further energy input.
A second high occurrence results from salt lakes. This is again lithium chloride.
What is the significance of this?
Subsequently, the salts or minerals of lithium are useless. We have to extract lithium in its pure form from it. Adding to our difficulty is the fact that pure lithium is very reactive and could therefore quickly recombine with all sorts of components in the environment, rendering it useless again. Because this is exactly the reason why lithium has to be treated in clean rooms or high-purity rooms.
But how do we get from mining or from the lake to the clean room?
This is where the much sought after "converters" come into play and this is where the controversy in the lithium value chain begins.
Lithium conversion is done by conducting the salt, be it lithium carbonate or chloride into concentrated hydrochloric acid.
Incidentally, this produces a significant amount of CO2, which is why e-car critics are probably more justified in pointing out the overall balance of the e-car.
The lithium in solution is fed into fused-salt electrolysis. Simply put, this is a process whereby electric current is applied to electrodes in a metal-containing solution or melt.
This then produces the pure form of the metal in a melt. This process was originally used to extract aluminum and is still used for this purpose today. In addition, however, the process has gained in importance for other industrial metals, such as sodium or magnesium. However, one point that should also be mentioned is the fact that the electrodes are made of graphite, i.e. pure carbon. Of course, this also causes wear and tear, again in the form of CO2, but also from the highly toxic carbon monoxide.
4. use of lithium
Lithium has become our everyday companion. For my generation and younger, it has created a whole new way of life. Far from civilized conversation and cultural society, you can now realize your life in an average 6-inch surreality. You can finally be who you want to be without facing problems of reality.
What do I mean by that?
Lithium is mainly used for rechargeable batteries, or accumulators for short. Its use is therefore inevitably commonplace, provided you own a cell phone, laptop, tools or even a hybrid or electric car.
Hence the assumption of the massive growth of the lithium industry.
5. the value chain explained by the market example.
For this purpose, I would like to discuss the value chain of the market on which this growth is supposed to be based - the e-car market.
- Mining:
As is usual with all raw materials, this must inevitably be extracted. Riches are offered above all by the Latin Americans, such as Chile and Argentina and Bolivia. This is because the so-called "lithium triangle" is located at the border triangle of these countries, where the world's main reserves are located.
Named producers there today are already Livent $LTHM , Allkem $AKE (through Galaxy) and Lithium Americas $LAC .
What do the 3 have in common? Due to the high lithium price in recent years, high valuations resulted on the stock market. These are now in decline and so are the valuations, but why?
The producers have their own producer prices, which of course depend on individual, variable costs. So if the lithium price rises on the world market, profits rise. Correspondingly, this also works the other way around.
Again, a little food for thought in the direction of dependency: alone one third of the world's known lithium deposits are in the hands of Chinese investors ...
- converter, or even refinery (chemical):
Here we are at the interface where our lithium is also made usable. I described the process in point 3, so we can save that at this point.
But what about the costs and the expected margins?
Of course, here again it is primarily industrial service providers, such as Bilfinger $GBF (-13,52 %) , Vinci $DG (-5,04 %) or Ferrovial $FER who will profit from the development of new industries. Long transport routes are also being taken on in this industry, which should strengthen the global logistics division or at least provide further tailwind alongside e-commerce. Other factors in this point are very different. Therefore, I'll make a case distinction.
Case 1:
The company owns "only" converters and is therefore dependent on the lithium price of the producers.
This means that the own margin roughly results from the sale of lithium compounds, such as lithium hydroxide, from the variable costs and the purchase of the raw material. This has been the major shortcoming in recent years, as the margins here have been crushingly low compared to the process importance. Representatives for this case include Ganfeng $1772 (-2,35 %) and Tianqi $9696 (-1,77 %) . Therefore, this case can probably also be stamped as a Chinese phenomenon.
Case 2: The company is located in the mining segment, owns its own mines (or is in the process of building them up) and processes the lithium on its own.
Here, of course, significantly higher margins can be expected in subsequent years. The cost point of purchasing is almost eliminated. Of course, the corresponding production costs must now be added, since one takes over two value-adding links in the chain. Nevertheless, one is not dependent on the world market price, but only on one's own costs.
Here, western representatives, such as Albemarle $ALB (-11 %) , Rock Tech $RCK (-6,99 %) (in the future) and Livent $LTHM .
But why is this segment the most promising in the lithium sector?
All the "hype" around lithium shares is based on studies of future e-car targets.
Capacities in the mining segment are steadily increasing. Therefore, it is quite reasonable to assume a "moderate" lithium price in the next few years. In addition, the converter capacities are also already the current problem of the shortage economy. In addition, one is in the fortunate position of being able to profit massively in battery recycling as well, since the material has to be added again at exactly this point of the value chain for purity purposes and quality standards.
But why do they now make lithium hydroxide and not pure "lithium"?
The answer is relatively simple: cost/benefit.
In the final stage of the entire value chain, it's not about pure lithium. The final product is usually the lithium-ion battery. Ions are electrically charged particles in a chemical compound.
Lithium hydroxide is obtained quite simply from the lithium salt of the mine with lime water (extremely cheap to buy).
The further transport also proves to be relatively simple, since lithium appears chemically bound and rather inert in contrast to the pure substance.
- Cell and battery producer
Here we are almost at the final stage of the battery. Of course, the costs of the previous value creators are borne here. Furthermore, the supplier prices of the required materials are added.
In addition to chemicals, graphite, electrodes and precious metals such as cobalt or nickel are needed at this stage.
Of course, this is strongly dependent on the design of the battery. I am referring to the "classic" lithium-ion battery.
However, since my reference levels are more in the chemical process, I am keeping this paragraph relatively lean now.
Important representatives in this sector are Panasonic $6752 (-5,04 %) , Samsung SDI $0L2T (+0 %) but also here already Tesla $TSLA (-9,97 %) .
- Automobile construction
Here, too, I'll keep this short, since it's not about building an e-car.
Ultimately, all costs come together at this point. The carmaker has little room for maneuver in the current framework of global capacities. Nevertheless, long-term supply agreements have already been concluded with suppliers in order to be able to withstand the price competition.
For example, Mercedes-Benz secured $MBG (-5,9 %) secured approx. 10,000 t/year from the future producer Rock Tech Lithium Hydroxide via a fixed supply contract.
Volkswagen $VOW (-3,61 %) and Stellantis $STLAM (-4,48 %) (formerly PSA and Fiat-Chrysler) secured pre-emptive rights from Vulcan $VUL (-7,54 %) .
GM $GM (-2,84 %) secured shares in Lithium Americas for $650 million.
Nevertheless, these capacities must first be created. The foundations have been laid.
Postscript - personal speculation:
But what do I want to express with all this?
Just because "lithium" is in the name of a share, one is not exactly betting on a hobbyhorse here. Of course, the demand for lithium will increase and corresponding capacities have to be expanded. Nevertheless, today's stock market valuations do not correspond to the comparable parameters for the future. Here, it is always assumed from an extremely optimistic scenario that all tangible assets will be directly consumed by the end consumer. However, this will not be the case due to economic and social differences and the internal competition is already enormous today.
The real margins are more likely to be in chemical processing, as the shortage of production capacity is likely to continue into the mid-2030s. In addition, corresponding projects in Germany are being significantly promoted in order to reduce dependencies. Competitors are still manageable, relative to raw material producers, carmakers, and cell and battery suppliers. One is less bound to the price pressure of the end consumer, but again dependent on high transport routes and costs. Last but not least, one represents the link between recycling and reproduction in the future.
The next overview:
- Biofuels - More sin than reasons.
- E-Fuels - A clarification. What is actually behind the term and why they will most likely find a breakthrough.
Friedrich Vorwerk - Watchlist, investment or descending branch?
Dear Getquin'ers,
Due to new circumstances and information, I have changed my opinion on Friedrich Vorwerk contrary to the first post. However, I am still convinced that circumstances will turn around and lead the company to the success it deserves.
Furthermore, I have implemented the questions under the 1st post.
My topic today will be the Friedrich Vorwerk Group $VH2 (-15,16 %) will be. A medium-sized company that will have a decisive influence on the change.
First, a brief overview of the company's history:
No, this is not the household appliance manufacturer of the same name.
Founded in 1962 as "Lohnbaggerbetrieb Kleesch & Vorwerk" and renamed "Friedrich Vorwerk KG" in 1972, the focus at that time was already on underground infrastructure (natural gas and wastewater networks).
Since 2021, the "Friedrich Vorwerk Group" has been listed on the stock exchange in the Prime Standard.
Business segment/business activities:
In an umbrella term, it can be said that the Vorwerk Group is active in plant construction. However, it offers a sensational diversification with shareholdings in various sectors, including road construction (SKS), corrosion protection (Korupp) and many more. The company has a fully integrated and majority-owned value chain, which can offer any solution to the customer.
The business segments are officially declared on the basis of the area of use:
- Natural Gas
- Electricity
- Clean Hydrogen
- Adjacent Opportunities (complex, individual infrastructure projects)
But let us now turn to the most significant items of the business in each case:
1. turnkey solutions
- This includes the all-round package I mentioned for complex infrastructure projects. Friedrich Vorwerk takes on such projects from planning through execution and commissioning to maintenance.
2. engineering
- This area is extremely interesting for industry and utilities and mainly includes project support on behalf of the customer.
3. plant construction and service
- I deliberately combine this point, as it probably reflects the "classic" plant construction most closely. The focus is clearly on electricity, gas and liquid transport, including pump and compressor stations for onward transport, as well as transformers, electrolysers, heat generators, substations, and much more.
Friedrich Vorwerk's business thus covers the entire range of energy transport from the producer to the consumer. I enclose an internal overview. The entire business activity can of course be viewed individually on the website (https://www.friedrich-vorwerk.de/).
Note: The structure on my part does not correspond to the internal structure according to Vorwerk's own company presentation!
Fundamental data:
Here, I orient myself on the basis of the given data up to Q4/22. An overview is attached/edited for publication.
In fact, this is a point to be viewed critically from the current situation. The financials are intrinsically sound and the business is profitable. However, ongoing inflationary pressures and severe supply difficulties are squeezing margins considerably (after Q4/22). Sales of Electricity, Clean Hydrogen and Adj. Opp. divisions are steadily increasing (especially the latter), with the Gas Transmission division stagnating, due to the "green" transformation.
A solid market position is increasingly emerging, particularly in the German market, which will be able to meet the challenges of the future and should benefit strongly from this should.
The order situation continues to be sensational. In fiscal 2022, the number of orders received increased by 146%. The approximate total volume of these orders is in the range of €850 million to €1.1 billion. (as of September 2022). However, further order intakes have already been officially announced.
NEW JAN. 31, 2023:
Following the announcement of the preliminary figures for the full year 2022, the company can still be expected to grow very strongly.
Sales increased by +56% in Q4/22 alone. For the full year, at €368 million, forecasts of €320 million were far exceeded. The margin, on the other hand, is shockingly low. Only 2.6% was generated in Q4/22. Nevertheless, a moderate margin of 9.2% was achieved for the year as a whole.
But how can that be? In revenue-driving projects, a lack of personnel led to deadline pressure. As a result, orders had to be completed with the help of contractors (partner contractors).
Furthermore, the restructuring of the Puhlmann Group is continuing and the defense against a cyberattack led to profitability and visibility problems.
The outlook also leaves much to be desired. For 2023, a lower sales level is already expected in advance. In 2024, on the other hand, there should be a decent boost from projects in the electricity sector.
It remains to be seen.
Share:
Following the announcement of the preliminary figures, we are trending at around €12 per share. A hard correction, but appropriate. MBB sold just under 16% of its shares, 31.01, and now owns just under 36% of the shares. Other well-known investors here are Amundi and Fidelity. Only just under 46% of the shares are now in free circulation.
KGV 22: ~13 KGV 23: ~11 KGV 24: ~9
FCF:
For many members of our community, the free cash flow is sometimes a decisive criterion for an investment.
In 2022, the FCF of € 3.55 million is still very low and thus probably rather deterrent. As early as 2023, however, FCF is expected to rise to over €20 million and continue to increase.
Margin:
A net margin of 9% is the target for the next few years.
Dividend:
0.2€/share was paid in July 2022.
Personal opinion:
Friedrich Vorwerk is a promising beneficiary of the energy transition and has a first-class position in the transport solutions segment. The order situation is good, the finances appear relatively solid with cutbacks in some places. Potential customers here are not only companies but also the public sector, especially within the EU. The pipeline network should offer great order opportunities as the economy restructures (gas/hydrogen). This should have become particularly noticeable after a joint Norway/Germany cooperation in the course of the last visit of our Federal Minister of Economics.
The next big order point will be energy transport solutions for offshore/onshore transport. The expansion of offshore capacity alone to 40 GW by 2040 will generate huge orders to transfer electricity onshore.
My personal target for the stock by the end of 2023 is around €15/share. An entry on my part was made today. (Stop: 8€). Nevertheless, the management should now urgently take care of the known problems of lacking human resources without generating further internal cost pressures themselves. The answer to the question of the headline now therefore: Watchlist.
In the last contribution the question of @TomTurboInvest whether there are not better investment opportunities in this respect. I fully share this view and appreciate at this point once again the profundity of the question. However, if one attaches great importance to diversification, one should certainly keep an eye on Friedrich Vorwerk in the infrastructure sector. I consider a "buy & hold forever" strategy to be less sensible here. The zenith of growth should be priced into the share price between 2030 and 2035. Beyond that, you'll want to settle into the dividend payer portfolio for the long term.
I also see the following as intra-European competitors in the segment: Hochtief $HOT (-9,67 %) , Strabag $STR (-11,22 %) , Vinci $DG (-5,04 %) and Ferrovial $FER . Under certain circumstances, Bilfinger could also be included in this segment. $GBF (-13,52 %)
Conclusion:
I thank you very much for your attention to this point and I hope to have kept a certain simplicity, which could be elaborated if necessary. Please do not hesitate to correct or question me, because this is the only way to get into a discourse.
Thank you very much.
Sources:
https://www.friedrich-vorwerk.de/
Friedrich Vorwerk: Q3/22 quarterly statement + preliminary figures Q4/22.
Chart image: https://www.wallstreet-online.de/
