Embed Size (px)
Citation preview
LPKF
(CDAX, Industrial Goods & Services)
A n a l y s t
Robert-Jan van der Horst
+49 40 309537-290
CO M M E N T Published 29.10.2019 08:15 1
RESEARCH
Buy
EUR 14.00 (EUR 12.00)
Price EUR 12.75
Upside 9.8 %
Value Indicators: EUR Share data: Description:
DCF: 13.78
Bloomberg: LPK GR
Reuters: LPKG.DE
ISIN: DE0006450000
Highly specialised machine manufacturer developing laser applications for special purposes
Market Snapshot: EUR m Shareholders: Risk Profile (WRe): 2019e
Market cap: 312.3
No. of shares (m): 24.5
EV: 318.4
Freefloat MC: 221.8
Ø Trad. Vol. (30d): 167.75 th
Freefloat 71.0 %
Joerg Bantleon 29.0 %
Luxempart SA 5.2 %
Lazard Frères Gestion 4.9 %
Beta: 1.3
Price / Book: 3.4 x
Equity Ratio: 71 %
Net Fin. Debt / EBITDA: 0.2 x
Net Debt / EBITDA: 0.2 x
LPKF beats its own targets again
Figures Q3/2019: Comment on Figures:
FY End: 31.12. in EUR m
Q3 19
Q3 19e
Q3 18 yoy
9M 19
9M 19e
9M 18 yoy
Sales 35.0 33.3 29.3 19 % 108.0 106.0 87.7 23 %
EBIT 4.9 4.8 2.7 80 % 15.0 14.8 5.0 201 %
Margin 14.0 % 14.3 % 9.3 % 13.9 % 14.0 % 5.7 %
EBIT adj. 4.9 4.8 2.7 80 % 14.2 14.0 5.0 185 %
Margin 14.0 % 14.3 % 9.3 % 13.1 % 13.2 % 5.7 %
� Sales exceed target range of EUR 28-33m � No growth required in Q4 to reach the upper end of the full-year
guidance � Profitability exceeds the forecasted EBIT margin of 8-12%
LPKF published preliminary Q3 figures that surpassed both our forecast and the company’s own target and confirmed the recently increased
guidance for the full year (Sales EUR 135m to 140m; EBIT margin 12-14%; ROCE 20-25%). The revenue grew by 19% yoy to EUR 35m and
thus exceeded our estimate of EUR 33.3m and the LPKF’s target range of EUR 28-33m. After nine months, the sales figure increased to EUR
108m, leaving a gap of only EUR 27-32m to the guidance. Even at the upper end, this implies no growth in Q4 (Q4 2018 EUR 32.2m), which
already makes the new guidance look too defensive.
The EBIT margin of 14% (+5pp yoy) also clearly surpassed the company’s target range of 8-12% and our estimate of 12.7%. In the first nine
months, LPKF has earned an EBIT margin of approx. 14%, which is at the upper end of the full-year guidance of 12-14%. Given the strong
performance, the recently announced mid-term guidance of an EBIT margin >14% does not seem ambitious.
Even more so as the company’s target to break even in the loss-making welding department next year will increase its share of revenues from
high-margin technologies like LIDE or LTP over the coming years. We adjusted our estimates after the strong Q3 and increased our price
target to EUR 14. We confirm our Buy recommendation for LPKF.
Changes in Estimates: Comment on Changes:
FY End: 31.12. in EUR m
2019e (old)
+ / - 2020e (old)
+ / - 2021e (old)
+ / -
Sales 138.8 1.2 % 148.6 1.0 % 162.2 0.8 %
EBIT 18.7 5.7 % 20.5 5.4 % 23.2 3.7 %
EPS 0.52 7.7 % 0.57 7.0 % 0.64 6.3 %
� Estimates increased after company beat its own target again
FY End: 31.12. in EUR m
CAGR (18-21e) 2015 2016 2017 2018 2019e 2020e 2021e
Sales 10.9 % 87.3 91.1 102.1 120.0 140.5 150.2 163.5
Change Sales yoy -27.1 % 4.4 % 12.0 % 17.5 % 17.1 % 6.9 % 8.9 %
Gross profit margin 79.2 % 68.8 % 69.7 % 64.3 % 62.3 % 62.6 % 62.6 %
EBITDA 30.8 % 3.4 1.3 11.6 14.9 27.7 30.5 33.4
Margin 3.9 % 1.4 % 11.4 % 12.4 % 19.7 % 20.3 % 20.4 %
EBIT 52.0 % -3.7 -6.8 4.0 6.8 19.8 21.6 24.0
Margin -4.3 % -7.4 % 3.9 % 5.7 % 14.1 % 14.4 % 14.7 %
Net income 27.3 % -3.5 -8.8 1.1 8.1 13.8 15.0 16.6
EPS 27.3 % -0.16 -0.40 0.05 0.33 0.56 0.61 0.68
EPS adj. 27.3 % -0.16 -0.40 0.05 0.33 0.56 0.61 0.68
DPS - 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Dividend Yield n.a. n.a. n.a. n.a. n.a. n.a. n.a.
FCFPS -0.16 -0.08 0.14 0.24 0.43 0.65 0.64
FCF / Market cap n.a. -1.1 % 1.6 % 3.1 % 3.4 % 5.1 % 5.0 %
EV / Sales n.a. 2.2 x 2.3 x 1.7 x 2.3 x 2.0 x 1.8 x
EV / EBITDA n.a. 152.5 x 19.9 x 13.6 x 11.5 x 9.9 x 8.6 x
EV / EBIT n.a. n.a. 58.6 x 29.5 x 16.1 x 14.0 x 11.9 x
P / E n.a. n.a. 173.8 x 22.9 x 22.8 x 20.9 x 18.8 x
P / E adj. n.a. n.a. 173.8 x 22.9 x 22.8 x 20.9 x 18.8 x
FCF Potential Yield n.a. -2.2 % 2.5 % 6.5 % 5.8 % 6.6 % 7.6 %
Net Debt 37.7 40.2 38.0 16.6 6.1 -9.8 -25.4
ROCE (NOPAT) n.a. n.a. 1.6 % 9.9 % 14.7 % 15.7 % 17.3 % Guidance: 2019: Sales EUR 135m to 140m; EBIT margin 12-14%; ROCE 20-25%
Rel. Performance vs CDAX:
1 month: 1.6 %
6 months: 44.4 %
Year to date: 113.8 %
Trailing 12 months: 95.8 %
Company events:
15.11.19 Q3
LPKF
CO M M E N T Publ ished 29 .10 .2019 2
RESEARCH
Sales development in EUR m
Source: Warburg Research
Sales by regions 2018; in %
Source: Warburg Research
EBIT development in EUR m
Source: Warburg Research
Company Background
� Global market leader/top supplier for laser-based processing tools that replace traditional and non-digital processes.
� LPKF is innovation leader and usually the first supplier of new laser-based processing technologies.
� More than 50% of revenues are generated with the development and production of printed circuit boards (segments Development and
Electronics) where the company is global market leader with market shares up to 65%.
� Other customer industries include automotive, consumer electronics, healthcare or solar. The Welding segment delivers solutions for
versatile applications.
Competitive Quality
� LPKF is the technologically leading company in the market of laser applications and often first supplier of its customers.
� The high innovative strength of the company ensures the market-leading position and gives LPKF a first-mover advantage in new
products.
� The company holds a dominant market-leading position in selected niches (e.g. in development and solar segment) but there is also
some dependency on single customers.
� International service and distribution network leads to close relationships to customers.
EBT development in EUR m
Source: Warburg Research
Sales by segments 2018; in %
Source: Warburg Research
Net income development in EUR m
Source: Warburg Research
LPKF
CO M M E N T Publ ished 29 .10 .2019 3
RESEARCH
DCF model
Detailed forecast period Transitional period Term. Value
Figures in EUR m 2019e 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2031e
Sales 140.5 150.2 163.5 177.4 191.6 206.0 220.4 233.6 246.5 258.8 270.5 278.6 285.5
Sales change 17.1 % 6.9 % 8.9 % 8.5 % 8.0 % 7.5 % 7.0 % 6.0 % 5.5 % 5.0 % 4.5 % 3.0 % 2.5 % 2.5 %
EBIT 19.8 21.6 24.0 26.6 29.1 30.9 32.6 34.1 35.7 37.3 38.7 39.6 40.3
EBIT-margin 14.1 % 14.4 % 14.7 % 15.0 % 15.2 % 15.0 % 14.8 % 14.6 % 14.5 % 14.4 % 14.3 % 14.2 % 14.1 %
Tax rate (EBT) 29.0 % 29.4 % 29.9 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 %
NOPAT 14.1 15.3 16.9 18.6 20.4 21.6 22.8 23.9 25.0 26.1 27.1 27.7 28.2
Depreciation 7.9 8.9 9.3 10.6 11.5 12.4 13.2 14.0 14.8 15.5 16.2 16.7 17.1
in % of Sales 5.6 % 5.9 % 5.7 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 %
Changes in provisions 0.0 0.0 0.0 0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Change in Liquidity from
- Working Capital 4.0 0.1 2.1 2.9 2.8 3.7 3.7 3.4 3.3 3.2 3.0 2.1 1.8
- Capex 7.2 7.9 8.2 10.6 11.5 12.4 13.2 14.0 14.8 15.5 16.2 16.7 17.1
Capex in % of Sales 5.1 % 5.2 % 5.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 % 6.0 %
Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Free Cash Flow (WACC Model)
10.8 16.1 15.8 16.0 17.6 17.9 19.1 20.5 21.7 22.9 24.1 25.6 26.4 27
PV of FCF 10.8 14.9 13.6 12.7 13.0 12.2 12.1 12.0 11.8 11.5 11.2 11.0 10.5 197 share of PVs 11.10 % 33.31 % 55.59 %
Model parameter Valuation (m)
Derivation of WACC: Derivation of Beta: Present values 2031e 157
Terminal Value 197
Debt ratio 10.00 % Financial Strength 1.10 Financial liabilities 20
Cost of debt (after tax) 2.8 % Liquidity (share) 1.50 Pension liabilities 0
Market return 7.00 % Cyclicality 1.30 Hybrid capital 0
Risk free rate 1.50 % Transparency 1.20 Minority interest 0
Others 1.30 Market val. of investments 0
Liquidity 4 No. of shares (m) 24.5
WACC 7.97 % Beta 1.28 Equity Value 338 Value per share (EUR) 13.78
Sensitivity Value per Share (EUR)
Terminal Growth Delta EBIT-margin
Beta WACC 1.75 % 2.00 % 2.25 % 2.50 % 2.75 % 3.00 % 3.25 % Beta WACC -1.5 pp -1.0 pp -0.5 pp +0.0 pp +0.5 pp +1.0 pp +1.5 pp
1.48 9.0 % 10.86 11.06 11.27 11.50 11.74 12.00 12.29 1.48 9.0 % 10.09 10.56 11.03 11.50 11.96 12.43 12.90
1.38 8.5 % 11.76 12.00 12.26 12.54 12.84 13.18 13.54 1.38 8.5 % 11.02 11.53 12.03 12.54 13.05 13.55 14.06
1.33 8.2 % 12.26 12.53 12.82 13.13 13.47 13.85 14.26 1.33 8.2 % 11.54 12.07 12.60 13.13 13.66 14.19 14.72
1.28 8.0 % 12.81 13.10 13.43 13.78 14.16 14.59 15.06 1.28 8.0 % 12.12 12.67 13.22 13.78 14.33 14.89 15.44
1.23 7.7 % 13.40 13.73 14.09 14.49 14.92 15.41 15.94 1.23 7.7 % 12.74 13.33 13.91 14.49 15.07 15.65 16.23
1.18 7.5 % 14.04 14.41 14.82 15.27 15.76 16.32 16.93 1.18 7.5 % 13.44 14.05 14.66 15.27 15.88 16.49 17.10
1.08 7.0 % 15.52 15.99 16.51 17.10 17.75 18.48 19.32 1.08 7.0 % 15.06 15.74 16.42 17.10 17.78 18.46 19.14
� Comparably high mid-term growth rates reflect potential acceptance of new products
LPKF
CO M M E N T Publ ished 29 .10 .2019 4
RESEARCH
Valuation
2015 2016 2017 2018 2019e 2020e 2021e
Price / Book n.a. 2.9 x 3.6 x 2.4 x 3.4 x 2.9 x 2.5 x
Book value per share ex intangibles 2.24 1.75 1.74 2.55 3.12 3.74 4.45
EV / Sales n.a. 2.2 x 2.3 x 1.7 x 2.3 x 2.0 x 1.8 x
EV / EBITDA n.a. 152.5 x 19.9 x 13.6 x 11.5 x 9.9 x 8.6 x
EV / EBIT n.a. n.a. 58.6 x 29.5 x 16.1 x 14.0 x 11.9 x
EV / EBIT adj.* n.a. n.a. 132.1 x 22.1 x 16.8 x 14.0 x 11.9 x
P / FCF n.a. n.a. 62.9 x 32.1 x 29.7 x 19.7 x 20.0 x
P / E n.a. n.a. 173.8 x 22.9 x 22.8 x 20.9 x 18.8 x
P / E adj.* n.a. n.a. 173.8 x 22.9 x 22.8 x 20.9 x 18.8 x
Dividend Yield n.a. n.a. n.a. n.a. n.a. n.a. n.a.
FCF Potential Yield (on market EV) n.a. -2.2 % 2.5 % 6.5 % 5.8 % 6.6 % 7.6 %
*Adjustments made for: -
LPKF
CO M M E N T Publ ished 29 .10 .2019 5
RESEARCH
Consolidated profit & loss In EUR m 2015 2016 2017 2018 2019e 2020e 2021e
Sales 87.3 91.1 102.1 120.0 140.5 150.2 163.5
Change Sales yoy -27.1 % 4.4 % 12.0 % 17.5 % 17.1 % 6.9 % 8.9 % Increase / decrease in inventory -0.2 -2.3 -0.7 0.8 -0.1 -0.2 0.0
Own work capitalised 6.9 4.9 3.6 4.3 4.1 4.1 3.9
Total Sales 94.0 93.7 104.9 125.1 144.4 154.1 167.5
Material expenses 24.9 31.0 33.8 48.0 56.9 60.1 65.1
Gross profit 69.1 62.7 71.1 77.2 87.5 94.0 102.4
Gross profit margin 79.2 % 68.8 % 69.7 % 64.3 % 62.3 % 62.6 % 62.6 % Personnel expenses 43.7 43.9 41.9 44.3 44.4 46.6 50.4
Other operating income 7.1 5.8 5.7 3.7 4.8 4.4 4.4
Other operating expenses 29.1 23.3 23.3 21.7 20.2 21.3 23.1
Unfrequent items 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBITDA 3.4 1.3 11.6 14.9 27.7 30.5 33.4
Margin 3.9 % 1.4 % 11.4 % 12.4 % 19.7 % 20.3 % 20.4 %
Depreciation of fixed assets 4.4 4.3 4.0 3.9 3.5 4.2 4.4
EBITA -0.9 -3.0 7.6 11.0 24.2 26.3 28.9
Amortisation of intangible assets 2.8 3.7 3.7 4.2 4.4 4.7 4.9
Goodwill amortisation 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBIT -3.7 -6.8 4.0 6.8 19.8 21.6 24.0
Margin -4.3 % -7.4 % 3.9 % 5.7 % 14.1 % 14.4 % 14.7 %
EBIT adj. -3.7 -6.8 1.8 9.1 19.0 21.6 24.0
Interest income 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Interest expenses 0.7 0.8 0.9 0.9 0.3 0.3 0.3
Other financial income (loss) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBT -4.4 -7.6 3.0 6.0 19.5 21.3 23.7
Margin -5.0 % -8.3 % 3.0 % 5.0 % 13.9 % 14.2 % 14.5 % Total taxes -0.9 1.2 1.9 -2.1 5.6 6.3 7.1
Net income from continuing operations -3.5 -8.8 1.1 8.1 13.8 15.0 16.6
Income from discontinued operations (net of tax) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income before minorities -3.5 -8.8 1.1 8.1 13.8 15.0 16.6
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income -3.5 -8.8 1.1 8.1 13.8 15.0 16.6
Margin -4.0 % -9.7 % 1.1 % 6.7 % 9.8 % 10.0 % 10.2 %
Number of shares, average 22.3 22.3 22.3 24.5 24.5 24.5 24.5
EPS -0.16 -0.40 0.05 0.33 0.56 0.61 0.68
EPS adj. -0.16 -0.40 0.05 0.33 0.56 0.61 0.68
*Adjustments made for:
Guidance: 2019: Sales EUR 135m to 140m; EBIT margin 12-14%; ROCE 20-25%
Financial Ratios 2015 2016 2017 2018 2019e 2020e 2021e
Total Operating Costs / Sales 103.8 % 101.4 % 91.4 % 91.9 % 83.1 % 82.3 % 82.0 %
Operating Leverage n.a. 18.4 x n.a. 4.2 x 11.1 x 1.3 x 1.3 x
EBITDA / Interest expenses 4.9 x 1.6 x 12.3 x 17.4 x 80.0 x 88.1 x 96.5 x
Tax rate (EBT) 20.8 % -16.4 % 61.8 % -34.5 % 29.0 % 29.4 % 29.9 %
Dividend Payout Ratio 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Sales per Employee 112,153 130,177 149,439 183,145 212,838 225,813 n.a.
Sales, EBITDA in EUR m
Source: Warburg Research
Operating Performance in %
Source: Warburg Research
Performance per Share
Source: Warburg Research
LPKF
CO M M E N T Publ ished 29 .10 .2019 6
RESEARCH
Consolidated balance sheet In EUR m 2015 2016 2017 2018 2019e 2020e 2021e
Assets
Goodwill and other intangible assets 13.5 15.3 15.4 15.2 15.2 14.9 14.2
thereof other intangible assets 2.0 1.9 1.8 1.4 1.4 1.1 0.4
thereof Goodwill 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Property, plant and equipment 50.7 48.3 46.5 44.3 43.6 42.9 42.5
Financial assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other long-term assets 0.0 0.0 0.2 0.2 0.2 0.2 0.2
Fixed assets 64.2 63.6 62.1 59.8 59.1 58.1 57.0
Inventories 31.1 25.0 25.5 25.7 25.6 25.4 25.4
Accounts receivable 13.9 20.0 19.4 30.5 31.6 30.0 30.9
Liquid assets 3.8 3.6 3.3 3.7 2.8 18.7 34.3
Other short-term assets 5.9 4.8 6.2 9.1 9.1 9.1 9.1
Current assets 54.6 53.3 54.4 69.0 69.1 83.2 99.7
Total Assets 118.8 116.9 116.6 128.8 128.1 141.3 156.7
Liabilities and shareholders' equity
Subscribed capital 22.3 22.3 22.3 24.5 24.5 24.5 24.5
Capital reserve 1.5 1.5 1.5 15.5 15.5 15.5 15.5
Retained earnings 10.9 10.9 10.9 10.2 24.1 39.1 55.7
Other equity components 28.8 19.6 19.5 27.5 27.5 27.5 27.5
Shareholders' equity 63.5 54.3 54.2 77.7 91.5 106.6 123.2
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total equity 63.5 54.3 54.2 77.7 91.5 106.6 123.2
Provisions 3.7 3.7 4.0 5.5 5.5 5.5 5.5
thereof provisions for pensions and similar obligations 0.4 0.3 0.3 0.3 0.3 0.3 0.3
Financial liabilities (total) 41.1 43.5 41.0 20.0 8.6 8.6 8.6
thereof short-term financial liabilities 15.6 20.9 21.0 2.6 2.6 2.6 2.6
Accounts payable 2.3 3.1 3.2 6.9 7.3 7.4 7.2
Other liabilities 8.2 12.4 14.1 18.6 15.1 13.1 12.1
Liabilities 55.3 62.6 62.3 51.1 36.6 34.7 33.5
Total liabilities and shareholders' equity 118.8 116.9 116.6 128.8 128.1 141.3 156.7
Financial Ratios 2015 2016 2017 2018 2019e 2020e 2021e
Efficiency of Capital Employment
Operating Assets Turnover 1.0 x 1.1 x 1.3 x 1.5 x 1.6 x 1.8 x 1.9 x
Capital Employed Turnover 0.9 x 1.0 x 1.1 x 1.3 x 1.4 x 1.6 x 1.7 x
ROA -5.4 % -13.9 % 1.9 % 13.5 % 23.4 % 25.9 % 29.2 %
Return on Capital
ROCE (NOPAT) n.a. n.a. 1.6 % 9.9 % 14.7 % 15.7 % 17.3 %
ROE -5.3 % -15.0 % 2.1 % 12.2 % 16.3 % 15.2 % 14.5 %
Adj. ROE -5.3 % -15.0 % 2.1 % 12.2 % 16.3 % 15.2 % 14.5 %
Balance sheet quality
Net Debt 37.7 40.2 38.0 16.6 6.1 -9.8 -25.4
Net Financial Debt 37.3 39.9 37.7 16.3 5.8 -10.1 -25.7
Net Gearing 59.3 % 74.0 % 70.0 % 21.4 % 6.6 % -9.2 % -20.6 %
Net Fin. Debt / EBITDA 1086.2 % 3057.3 % 323.8 % 109.7 % 21.0 % n.a. n.a.
Book Value / Share 2.9 2.4 2.4 3.2 3.7 4.4 5.0
Book value per share ex intangibles 2.2 1.8 1.7 2.6 3.1 3.7 4.4
ROCE Development
Source: Warburg Research
Net debt in EUR m
Source: Warburg Research
Book Value per Share in EUR
Source: Warburg Research
LPKF
CO M M E N T Publ ished 29 .10 .2019 7
RESEARCH
Consolidated cash flow statement In EUR m 2015 2016 2017 2018 2019e 2020e 2021e
Net income -3.5 -8.8 1.1 8.1 13.8 15.0 16.6
Depreciation of fixed assets 4.4 4.3 4.0 3.9 3.5 4.2 4.4
Amortisation of goodwill 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortisation of intangible assets 2.8 3.7 3.7 4.2 4.4 4.7 4.9
Increase/decrease in long-term provisions -1.1 0.1 0.6 1.1 0.0 0.0 0.0
Other non-cash income and expenses 0.1 6.6 3.8 -1.4 0.0 0.0 0.0
Cash Flow before NWC change 2.7 5.9 13.1 15.8 21.7 23.9 25.9
Increase / decrease in inventory 13.3 -5.9 -0.6 -0.2 0.1 0.2 0.0
Increase / decrease in accounts receivable 0.0 0.0 0.6 -11.1 -1.1 1.6 -0.9
Increase / decrease in accounts payable -5.7 4.6 0.6 3.1 -3.1 -1.9 -1.2
Increase / decrease in other working capital positions -0.2 1.0 -4.1 4.0 0.0 0.0 0.0
Increase / decrease in working capital (total) 7.4 -0.3 -3.5 -4.3 -4.0 -0.1 -2.1
Net cash provided by operating activities [1] 10.1 5.7 9.6 11.5 17.7 23.7 23.8
Investments in intangible assets -7.8 -5.4 -3.8 -4.0 -4.4 -4.4 -4.2
Investments in property, plant and equipment -5.9 -2.0 -2.7 -1.8 -2.8 -3.5 -4.0
Payments for acquisitions 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Financial investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Income from asset disposals 0.0 0.0 0.3 0.1 0.0 0.0 0.0
Net cash provided by investing activities [2] -13.7 -7.5 -6.3 -5.7 -7.2 -7.9 -8.2
Change in financial liabilities 0.2 7.1 -9.8 -13.6 -11.4 0.0 0.0
Dividends paid -2.7 0.0 0.0 0.0 0.0 0.0 0.0
Purchase of own shares 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Capital measures 0.0 0.0 0.0 16.2 0.0 0.0 0.0
Other -0.7 -0.8 -0.9 -0.9 0.0 0.0 0.0
Net cash provided by financing activities [3] -3.2 6.3 -10.8 1.8 -11.4 0.0 0.0
Change in liquid funds [1]+[2]+[3] -6.8 4.5 -7.4 7.6 -0.9 15.9 15.6
Effects of exchange-rate changes on cash -0.1 0.0 -0.1 0.1 0.0 0.0 0.0
Cash and cash equivalent at end of period -0.9 3.6 -4.0 3.7 2.8 18.7 34.3
Financial Ratios 2015 2016 2017 2018 2019e 2020e 2021e
Cash Flow
FCF -3.6 -1.8 3.1 5.8 10.5 15.9 15.6
Free Cash Flow / Sales -4.1 % -2.0 % 3.0 % 4.8 % 7.5 % 10.6 % 9.5 %
Free Cash Flow Potential 0.0 -4.3 5.8 13.1 18.5 20.0 21.9
Free Cash Flow / Net Profit 104.0 % 20.4 % 267.7 % 71.8 % 76.2 % 105.7 % 94.0 %
Interest Received / Avg. Cash 0.5 % 0.2 % 0.1 % 0.1 % 0.0 % 0.0 % 0.0 %
Interest Paid / Avg. Debt 1.8 % 2.0 % 2.2 % 2.8 % 2.4 % 4.0 % 4.0 %
Management of Funds
Investment ratio 15.7 % 8.2 % 6.4 % 4.8 % 5.1 % 5.2 % 5.0 %
Maint. Capex / Sales 5.0 % 4.8 % 3.9 % 3.2 % 2.5 % 2.8 % 2.7 %
Capex / Dep 192.0 % 92.7 % 85.3 % 71.1 % 91.2 % 88.7 % 88.2 %
Avg. Working Capital / Sales 52.0 % 41.7 % 33.7 % 29.7 % 28.4 % 27.9 % 26.3 %
Trade Debtors / Trade Creditors 608.0 % 651.1 % 601.2 % 444.1 % 432.9 % 405.4 % 429.2 %
Inventory Turnover 0.8 x 1.2 x 1.3 x 1.9 x 2.2 x 2.4 x 2.6 x
Receivables collection period (days) 58 80 69 93 82 73 69
Payables payment period (days) 33 36 35 52 47 45 40
Cash conversion cycle (Days) 450 262 219 149 148 146 143
CAPEX and Cash Flow in EUR m
Source: Warburg Research
Free Cash Flow Generation
Source: Warburg Research
Working Capital
Source: Warburg Research
LPKF
CO M M E N T Publ ished 29 .10 .2019 8
RESEARCH
LEGAL DISCLAIMER
This research report (“investment recommendation”) was prepared by the Warburg Research GmbH, a fully owned subsidiary of the M.M.Warburg &
CO (AG & Co.) KGaA and is passed on by the M.M.Warburg & CO (AG & Co.) KGaA. It is intended solely for the recipient and may not be passed on
to another company without their prior consent, regardless of whether the company is part of the same corporation or not. It contains selected
information and does not purport to be complete. The investment recommendation is based on publicly available information and data ("information")
believed to be accurate and complete. Warburg Research GmbH neither examines the information for accuracy and completeness, nor guarantees its
accuracy and completeness. Possible errors or incompleteness of the information do not constitute grounds for liability of M.M.Warburg & CO (AG &
Co.) KGaA or Warburg Research GmbH for damages of any kind whatsoever, and M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research
GmbH are not liable for indirect and/or direct and/or consequential damages. In particular, neither M.M.Warburg & CO (AG & Co.) KGaA nor Warburg
Research GmbH are liable for the statements, plans or other details contained in these investment recommendations concerning the examined
companies, their affiliated companies, strategies, economic situations, market and competitive situations, regulatory environment, etc. Although due
care has been taken in compiling this investment recommendation, it cannot be excluded that it is incomplete or contains errors. M.M.Warburg & CO
(AG & Co.) KGaA and Warburg Research GmbH, their shareholders and employees are not liable for the accuracy and completeness of the
statements, estimations and the conclusions derived from the information contained in this investment recommendation. Provided a investment
recommendation is being transmitted in connection with an existing contractual relationship, i.e. financial advisory or similar services, the liability of
M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH shall be restricted to gross negligence and wilful misconduct. In case of failure in
essential tasks, M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH are liable for normal negligence. In any case, the liability of
M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH is limited to typical, expectable damages. This investment recommendation does
not constitute an offer or a solicitation of an offer for the purchase or sale of any security. Partners, directors or employees of M.M.Warburg & CO (AG
& Co.) KGaA, Warburg Research GmbH or affiliated companies may serve in a position of responsibility, i.e. on the board of directors of companies
mentioned in the report. Opinions expressed in this investment recommendation are subject to change without notice. All rights reserved.
COPYRIGHT NOTICE
This work including all its parts is protected by copyright. Any use beyond the limits provided by copyright law without permission is prohibited and
punishable. This applies, in particular, to reproductions, translations, microfilming, and storage and processing on electronic media of the entire content
or parts thereof.
DISCLOSURE ACCORDING TO §85 OF THE GERMAN SECURITIES TRADING ACT (WPHG), MAR AND MIFID II INCL. COMMISSION DELEGATED REGULATION (EU) 2016/958 AND (EU) 2017/565
The valuation underlying the investment recommendation for the company analysed here is based on generally accepted and widely used methods of
fundamental analysis, such as e.g. DCF Model, Free Cash Flow Potential, Peer Group Comparison or Sum of the Parts Model (see also
http://www.mmwarburg.de/disclaimer/disclaimer.htm#Valuation). The result of this fundamental valuation is modified to take into consideration the
analyst’s assessment as regards the expected development of investor sentiment and its impact on the share price.
Independent of the applied valuation methods, there is the risk that the price target will not be met, for instance because of unforeseen changes in
demand for the company’s products, changes in management, technology, economic development, interest rate development, operating and/or
material costs, competitive pressure, supervisory law, exchange rate, tax rate etc. For investments in foreign markets and instruments there are further
risks, generally based on exchange rate changes or changes in political and social conditions.
This commentary reflects the opinion of the relevant author at the point in time of its compilation. A change in the fundamental factors underlying the
valuation can mean that the valuation is subsequently no longer accurate. Whether, or in what time frame, an update of this commentary follows is not
determined in advance.
Additional internal and organisational arrangements to prevent or to deal with conflicts of interest have been implemented. Among these are the spatial
separation of Warburg Research GmbH from M.M.Warburg & CO (AG & Co.) KGaA and the creation of areas of confidentiality. This prevents the
exchange of information, which could form the basis of conflicts of interest for Warburg Research in terms of the analysed issuers or their financial
instruments.
The analysts of Warburg Research GmbH do not receive a gratuity – directly or indirectly – from the investment banking activities of M.M.Warburg &
CO (AG & Co.) KGaA or of any company within the Warburg-Group.
All prices of financial instruments given in this investment recommendation are the closing prices on the last stock-market trading day before the
publication date stated, unless another point in time is explicitly stated.
M.M.Warburg & CO (AG & Co.) KGaA and Warburg Research GmbH are subject to the supervision of the Federal Financial Supervisory Authority,
BaFin. M.M.Warburg & CO (AG & Co.) KGaA is additionally subject to the supervision of the European Central Bank (ECB).
SOURCES
All data and consensus estimates have been obtained from FactSet except where stated otherwise.
LPKF
CO M M E N T Publ ished 29 .10 .2019 9
RESEARCH
Additional information for clients in the United States
1. This research report (the “Report”) is a product of Warburg Research GmbH, Germany, a fully owned subsidiary of M.M.Warburg & CO (AG & Co.)
KGaA, Germany (in the following collectively “Warburg”). Warburg is the employer of the research analyst(s), who have prepared the Report. The
research analyst(s) reside outside the United States and are not associated persons of any U.S. regulated broker-dealer and therefore are not subject
to the supervision of any U.S. regulated broker-dealer.
2. The Report is provided in the United States for distribution solely to "major U.S. institutional investors" under Rule 15a-6 of the U.S. Securities
Exchange Act of 1934.
3. Any recipient of the Report should effect transactions in the securities discussed in the Report only through J.P.P. Euro-Securities, Inc., Delaware.
4. J.P.P. Euro-Securities, Inc. does not accept or receive any compensation of any kind for the dissemination of the research reports from Warburg.
Reference in accordance with section 85 of the German Securities Trading Act (WpHG) and Art. 20 MAR regarding possible conflicts of interest with companies analysed:
-1- Warburg Research, or an affiliated company, or an employee of one of these companies responsible for the compilation of the research, hold
a share of more than 5% of the equity capital of the analysed company.
-2-
Warburg Research, or an affiliated company, within the last twelve months participated in the management of a consortium for an issue in
the course of a public offering of such financial instruments, which are, or the issuer of which is, the subject of the investment
recommendation.
-3- Companies affiliated with Warburg Research manage financial instruments, which are, or the issuers of which are, subject of the
investment recommendation, in a market based on the provision of buy or sell contracts.
-4-
MMWB, Warburg Research, or an affiliated company, reached an agreement with the issuer to provide investment banking and/or
investment services and the relevant agreement was in force in the last 12 months or there arose for this period, based on the relevant
agreement, the obligation to provide or to receive a service or compensation - provided that this disclosure does not result in the disclosure of
confidential business information.
-5- The company compiling the analysis or an affiliated company had reached an agreement on the compilation of the investment
recommendation with the analysed company.
-6- Companies affiliated with Warburg Research regularly trade financial instruments of the analysed company or derivatives of these.
-6a- Warburg Research, or an affiliated company, holds a net long position of more than 0.5% of the total issued share capital of the analysed
company.
-6b- Warburg Research, or an affiliated company, holds a net short position of more than 0.5% of the total issued share capital of the analysed
company.
-6c- The issuer holds shares of more than 5% of the total issued capital of Warburg Research or an affiliated company.
-7- The company preparing the analysis as well as its affiliated companies and employees have other important interests in relation to the
analysed company, such as, for example, the exercising of mandates at analysed companies.
Company Disclosure Link to the historical price targets and rating changes (last 12 months)
LPKF 5, 6 http://www.mmwarburg.com/disclaimer/disclaimer_en/DE0006450000.htm
LPKF
CO M M E N T Publ ished 29 .10 .2019 10
RESEARCH
INVESTMENT RECOMMENDATION
Investment recommendation: expected direction of the share price development of the financial instrument up to the given price target in the opinion of
the analyst who covers this financial instrument.
-B- Buy: The price of the analysed financial instrument is expected to rise over the next 12 months.
-H- Hold: The price of the analysed financial instrument is expected to remain mostly flat over the next 12
months.
-S- Sell: The price of the analysed financial instrument is expected to fall over the next 12 months.
“-“ Rating suspended: The available information currently does not permit an evaluation of the company.
WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING
Rating Number of stocks % of Universe
Buy 119 60
Hold 70 35
Sell 7 4
Rating suspended 4 2
Total 200 100
WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING M
M taking into account only those companies which were provided with major investment services in the last twelve months.
Rating Number of stocks % of Universe
Buy 33 79
Hold 7 17
Sell 0 0
Rating suspended 2 5
Total 42 100
PRICE AND RATING HISTORY LPKF AS OF 29.10.2019
Markings in the chart show rating changes by Warburg Research
GmbH in the last 12 months. Every marking details the date and
closing price on the day of the rating change.
LPKF
CO M M E N T Publ ished 29 .10 .2019 11
RESEARCH
EQUITIES Matthias Rode +49 40 3282-2678 Head of Equities [email protected] RESEARCH Michael Heider +49 40 309537-280 Andreas Pläsier +49 40 309537-246 Head of Research [email protected] Banks, Financial Services [email protected]
Henner Rüschmeier +49 40 309537-270 Franz Schall +49 40 309537-230 Head of Research [email protected] Automobiles, Car Suppliers [email protected]
Jan Bauer +49 40 309537-155 Malte Schaumann +49 40 309537-170 Renewables [email protected] Technology [email protected]
Jonas Blum +49 40 309537-240 Patrick Schmidt +49 40 309537-125 Telco, Construction [email protected] Leisure, Internet [email protected]
Christian Cohrs +49 40 309537-175 Oliver Schwarz +49 40 309537-250 Industrials & Transportation [email protected] Chemicals, Agriculture [email protected]
Felix Ellmann +49 40 309537-120 Cansu Tatar +49 40 309537-248 Software, IT [email protected] Cap. Goods, Engineering [email protected]
Jörg Philipp Frey +49 40 309537-258 Marc-René Tonn +49 40 309537-259 Retail, Consumer Goods [email protected] Automobiles, Car Suppliers [email protected]
Marius Fuhrberg +49 40 309537-185 Robert-Jan van der Horst +49 40 309537-290 Financial Services [email protected] Technology [email protected]
Ulrich Huwald +49 40 309537-255 Andreas Wolf +49 40 309537-140 Health Care, Pharma [email protected] Software, IT [email protected]
Philipp Kaiser +49 40 309537-260 Real Estate [email protected]
Thilo Kleibauer +49 40 309537-257 Retail, Consumer Goods [email protected]
Eggert Kuls +49 40 309537-256 Engineering [email protected]
INSTITUTIONAL EQUITY SALES Marc Niemann +49 40 3282-2660 Matthias Fritsch +49 40 3282-2696 Head of Equity Sales, Germany [email protected] United Kingdom [email protected]
Klaus Schilling +49 40 3282-2664 Tobias Hald +49 40 3282-2695 Head of Equity Sales, Germany [email protected] United Kingdom [email protected]
Tim Beckmann +49 40 3282-2665 Christopher Seedorf +49 69 5050-7414 United Kingdom [email protected] Switzerland [email protected]
Lyubka Bogdanova +49 69 5050-7411 Ireland, Poland, Australia [email protected]
Jens Buchmüller +49 69 5050-7415 Sophie Hauer +49 69 5050-7417 Scandinavia, Austria [email protected] Roadshow/Marketing [email protected]
Alexander Eschweiler +49 40 3282-2669 Juliane Niemann +49 40 3282-2694 Germany [email protected] Roadshow/Marketing [email protected]
SALES TRADING Oliver Merckel +49 40 3282-2634 Bastian Quast +49 40 3282-2701 Head of Sales Trading [email protected] Sales Trading [email protected] Elyaz Dust +49 40 3282-2702 Jörg Treptow +49 40 3282-2658 Sales Trading [email protected] Sales Trading [email protected] Michael Ilgenstein +49 40 3282-2700 Jan Walter +49 40 3282-2662 Sales Trading [email protected] Sales Trading [email protected] MACRO RESEARCH Carsten Klude +49 40 3282-2572 Dr. Christian Jasperneite +49 40 3282-2439 Macro Research [email protected] Investment Strategy [email protected] Our research can be found under: Warburg Research http://research.mmwarburg.com/en/index.html Thomson Reuters www.thomsonreuters.com Bloomberg MMWA GO Capital IQ www.capitaliq.com FactSet www.factset.com For access please contact:
Andrea Schaper +49 40 3282-2632 Kerstin Muthig +49 40 3282-2703 Sales Assistance [email protected] Sales Assistance [email protected]
