| Inthe consolidated financial statements as of December 31, 2023, Promotica Group reported consolidated sales revenues of € 84.51 million, compared to € 89.86 million in 2022, the first financial year of the plan, therefore marking a slight contraction of -6.0%. EBITDA for the period amounted to € 7.80 million, compared to € 5.49 million in the previous year, marking a significant growth of 42.1%. The EBITDA margin on revenues came in at 9.2%, up from 6.1% at the end of 2022. EBIT, after depreciation and amortization of € 1.46 million, rose by 51.9%, reaching € 6.34 million, compared to € 4.18 million in the previous year, with an EBIT margin that improved from 4.6% to 7.5%. The Net Income was also positive, at € 3.35 million, compared to € 3.23 million in 2022. In light of the results published in the annual report for FY23A, we have slightly modified our estimates for both the current year and the following years. In particular, we now estimate an FY24E value of production of € 101.00 million, and an EBITDA of € 10.0 million, corresponding to a margin of 10.0%. In the following years, we expect the value of production to reach € 118.90 million in FY26E, with EBITDA equal to € 14.20 million (corresponding to a margin of 12.0%), compared to €7.80 million in FY23A (corresponding to an EBITDA margin of 9.2%). The DCF method (including, for prudential purposes, a specific risk of 2.5% in the calculation of the WACC) returned an equity value of € 110.93 million. The target price is therefore € 6.50 (prev. € 7,00). We confirm a BUY rating, and MEDIUM risk.A very positive half-year for Promotica, which achieved a significant increase in both revenues (from € 33.22 million to € 60.66 million, +82.6%) and profitability (from € 0.64 million to € 4.56 million, EBITDA margin equal to 7.5% compared to 1.9% in 1H23A) thanks to the development of the campaigns planned in previous months. There was a strong drive in international business, thanks to the launch of the new International Division, which included, among others, new expansion projects in Poland and Australia. EBIT was also positive, up from € 0.09 million to € 3.86 million, and Net Income was € 1.98 million compared to the negative result of the first half of 2023. In light of the results published in the half-year report for 1H24A, we slightly adjust our estimates for the current year and for the coming years. Specifically, we estimate a FY24E production value of € 101.50 million and an EBITDA of € 9.00 million, corresponding to a margin of 9.0%. For the following years, we expect the value of production to increase to € 119.30 million in FY26E, with EBITDA of € 13.00 million (corresponding to an EBITDA margin of 11.0%), compared to € 7.80 million in FY23A (corresponding to an EBITDA margin of 9.2%). We conducted the evaluation of Promotica’s equity value based on the DCF method. The DCF method (which for prudential purposes also includes a specific risk of 2.5% in the WACC calculation) returns an equity value of € 110.9 million. We confirm a target price of € 6.50, BUY rating and MEDIUM risk. |