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@DivMaster Verbio - Waiting for turnaround turns into a hanging game Since Verbio was ousted from the MDAX, our former model portfolio stock has been struggling to recover. Due to low sales and high purchase price levels, the Saxony-Anhalt-based company was forced to scrap its forecast for the current fiscal year at the end of April. The SDAX share (38.25 euros; DE000A0JL9W6) slumped by almost 50% YTD in the face of the headwinds, before a short-term countermovement of 25% set in at the beginning of June. Was this the long-awaited turnaround? We still have our doubts. The main problem that Verbio currently faces is, and remains, costs. Verbio succeeded in the first nine months (as of March 31) of FY 2022/23 to expand sales by an impressive 23% to €1.5 billion, but at the same time EBIT fell by around 37% to €184.7 million. It can be assumed that there will be no significant recovery in Q4 either. The reason: low biodiesel and high raw material prices. Even if raw material prices collapsed overnight, an improvement would not be felt until later due to the long time lag between purchases and sales. According to the industry association ufop, sales prices for biodiesel have recently risen slightly by 5% to 157.7 euros/100 l, which is likely to have triggered the rally, but at the same time the price remains at a low level. And purchase prices for rapeseed oil also recently rose again sharply to a three-month high. EBIT margins have therefore melted sharply from 25 to 10% after the record year of 2022 and are likely to remain at around 10 to 12% until 2025. A turnaround is not impossible. With a net debt-free balance sheet, Verbio has a buffer to invest more in switching to waste products such as straw or chicken manure and thus escape a possible ban on biofuels from food and feed crops. However, with a 2023 P/E of 16, the stock is no bargain in historical terms (17).
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@Smudeo very interesting! Thanks
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