Eckert & Ziegler AG

Germany - High-tech Engineering

Buy (old: Buy)

19-January-21

Price target: EUR 70.00 (old: EUR 52.50)

Aliaksandr Halitsa

Analyst

Price:

EUR 50.75

Next result:

Q4 30.03.21

Bloomberg:

EUZ GR

Market cap:

EUR 1,042.0 m

aliaksandr.halitsa@ha-ib.de

Reuters:

EUZG.DE

Enterprise Value:

EUR 966.1 m

Tel.: +49 40 414 3885 83

Eckert & Ziegler - a "Sartorius of Radiopharma" in the making

In Radiopharma, EUZ is evolving into what Sartorius has become in Biopharma - i.e. one of the key "enablers" of a multi-billion,structurally growing market.

While biopharma has been around for decades becoming a >$ 200bn market, Radiopharma is gaining momentum as evidenced by an increasing involvement of big pharma, buoyant deal activity and commercial success of first radiotherapeutics (e.g. Lutathera). As a result, the market is seen to reach $ 6bn by 2025 from currently $ 1bn.

Thanks to its strong expertise in handling of radiation, EUZ is uniquely positioned to capitalize on this rapid growth. First, the company offers a whole range of infrastructure-relevantproducts and services across handling, manufacture and distribution of radiopharmaceuticals. Second, when new therapies enter the market, EUZ is one of a handful of players supplying relevant isotopes.

This should support sustainably high sales growth with high margin radiopharma- related products and services (+36% CAGR 2015-20 from € 9m to € 40m+) in the long term fueled by 1) rising penetration of already launched therapies, 2) increasing R&D activity driving project business and 3) new product launches.

For instance, revenues with Ga-68 generators should double in the next 3-5years to

  • 60m+ fueled by the recent FDA approval of the prostate cancer imaging technology from Telix (68Ga-PSMA-11) and an expected launch of Novartis' prostate cancer treatment (177Lu-PSMA-617), which offers advantages over conventional treatments.

At the same time, yttrium-90 (Y-90)related sales (eH&A: € 2m in '18; € 10m in '20) should continue to grow strongly on the back of the ongoing rollout of the liver cancer therapy from SIRTEX as well as engineering and technology transfer services to CNRT (Chinese JV partner) followed by commercial supply of Y-90 for CNRT's purposes.

Last but not least, thanks to growing interest in development of radiopharmaceuticals we expect EUZ to win new partner projects yielding service and engineering sales in the short term, while offering long-term upside optionality (contingent on market approval).

Action: In light of improving visibility on sustainable sales growth with high-marginradiopharmaceuticals-related products and services, we raise our mid-term growth expectations by 4pp to 10% CAGR and the terminal EBIT margin to 30% (old: 25%).

BUY with a new PT € of 70 (old: € 52.5) based on DCF.

Y/E 31.12 (EUR m)

2016

2017

2018

2019

2020E

2021E

2022E

Sales

119.9

138.6

168.7

178.5

178.4

197.1

215.3

Sales growth

-14 %

16 %

22 %

6 %

0 %

10 %

9 %

EBITDA

24.9

26.6

32.0

43.1

43.2

48.1

53.9

EBIT

16.1

18.0

23.4

32.1

32.1

37.0

42.9

Net income

9.5

14.7

16.1

22.0

22.1

25.6

29.8

Net debt

-24.9

-56.0

-54.1

-78.9

-89.4

-97.6

-119.2

Net gearing

-23.7 % -49.8 %

-44.1 %

-57.1 %

-59.7 %

-58.4 % -63.1 %

Net Debt/EBITDA

0.0

0.0

0.0

0.0

0.0

0.0

0.0

EPS pro forma

1.93

2.19

3.12

1.06

1.07

1.25

1.45

CPS

2.42

3.54

2.53

1.46

0.87

0.98

1.34

DPS

0.66

0.80

1.20

0.35

0.36

0.42

0.48

Dividend yield

1.5 %

1.8 %

2.7 %

0.8 %

0.8 %

0.9 %

1.1 %

Gross profit margin

49.7 %

46.1 %

44.1 %

48.8 %

49.2 %

50.0 %

51.0 %

EBITDA margin

20.8 %

19.2 %

18.9 %

24.2 %

24.2 %

24.4 %

25.0 %

EBIT margin

13.5 %

13.0 %

13.9 %

18.0 %

18.0 %

18.8 %

19.9 %

ROCE

12.0 %

13.8 %

17.6 %

22.5 %

22.4 %

25.2 %

20.4 %

EV/sales

1.8

1.4

1.1

4.8

4.8

4.3

3.8

EV/EBITDA

8.8

7.1

6.0

20.0

19.8

17.6

15.3

EV/EBIT

13.6

10.5

8.2

26.9

26.6

22.8

19.2

PER

23.4

15.6

11.3

39.7

38.8

33.0

27.6

Adjusted FCF yield

5.5 %

6.5 %

9.1 %

2.7 %

2.8 %

3.2 %

3.9 %

Source: Company data, Hauck & Aufhäuser Close price as of: 18.01.2021

Source: Company data, Hauck & Aufhäuser

High/low 52 weeks:

49.24 / 24.60

Price/Book Ratio:

6.7

Relative performance (SDAX):

3 months

-11.5 %

6 months

2.1 %

12 months

-15.6 %

Changes in estimates

Sales

EBIT

EPS

2020

old:

178.4

32.1

1.07

-

-

-

2021

old:

197.1

37.0

1.25

-

-

-

2022

old:

215.3

42.9

1.45

-

-

-

Key share data:

Number of shares: (in m pcs)

20.5

Authorised capital: (in € m)

0.6

Book value per share: (in €)

7.3

Ø trading volume: (12 months)

20,453

Major shareholders:

Free float

67.8 %

Founders

32.2 %

Eckert & Ziegler AG

0.1 %

Company description:

Produces and markets a wide range of industrial and medical applications featuring radioactive isotopes, including prostate seed implants, calibration standards and radiation afterloaders.

Please refer to important disclosures at the end of the report

Eckert & Ziegler AG

Financials

Profit and loss (EUR m)

2016

2017

2018

2019

2020E

2021E

2022E

Sales

119.9

138.6

168.7

178.5

178.4

197.1

215.3

Sales growth

-14.2 %

15.7 %

21.7 %

5.8 %

-0.1 %

10.5 %

9.2 %

Cost of sales

60.3

74.8

94.4

91.5

90.6

98.6

105.5

Gross profit

59.6

63.9

74.3

87.0

87.8

98.6

109.8

Sales and marketing

18.1

20.0

23.3

22.9

22.9

25.3

27.7

General and administration

24.7

23.9

26.9

27.6

27.6

30.4

33.3

Research and development

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other operating income

3.5

3.8

3.5

2.8

2.8

3.1

3.4

Other operating expenses

5.0

4.5

4.5

7.1

8.0

8.9

9.5

Unusual or infrequent items

0.9

-1.2

0.2

-0.2

0.0

0.0

0.0

EBITDA

24.9

26.6

32.0

43.1

43.2

48.1

53.9

Depreciation

8.7

8.6

8.6

11.1

11.1

11.1

11.1

EBITA

16.1

18.0

23.4

32.1

32.1

37.0

42.9

Amortisation of goodwill

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Amortisation of intangible assets

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Impairment charges

0.0

0.0

0.0

0.0

0.0

0.0

0.0

EBIT (inc revaluation net)

16.1

18.0

23.4

32.1

32.1

37.0

42.9

Interest income

0.4

0.3

0.2

0.3

0.3

0.3

0.3

Interest expenses

1.2

0.9

0.7

1.1

1.1

1.1

1.1

Other financial result

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Financial result

-0.7

-0.6

-0.5

-0.8

-0.8

-0.8

-0.8

Recurring pretax income from continuing operations

15.4

17.3

22.9

31.2

31.3

36.2

42.0

Extraordinary income/loss

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Earnings before taxes

15.4

17.3

22.9

31.2

31.3

36.2

42.0

Taxes

5.0

5.3

6.0

8.8

8.8

10.2

11.8

Net income from continuing operations

10.4

12.0

16.9

22.5

22.5

26.0

30.2

Result from discontinued operations (net of tax)

-0.7

3.1

0.0

0.0

0.0

0.0

0.0

Net income

9.8

15.1

16.9

22.5

22.5

26.0

30.2

Minority interest

0.2

0.4

0.8

0.5

0.5

0.5

0.5

Net profit (reported)

9.5

14.7

16.1

22.0

22.1

25.6

29.8

Average number of shares

5.3

5.3

5.2

20.5

20.5

20.5

20.5

EPS reported

1.81

2.78

3.12

1.07

1.07

1.25

1.45

Profit and loss (common size)

2016

2017

2018

2019

2020E

2021E

2022E

Sales

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

Cost of sales

50.3 %

53.9 %

55.9 %

51.2 %

50.8 %

50.0 %

49.0 %

Gross profit

49.7 %

46.1 %

44.1 %

48.8 %

49.2 %

50.0 %

51.0 %

Sales and marketing

15.1 %

14.4 %

13.8 %

12.8 %

12.8 %

12.8 %

12.8 %

General and administration

20.6 %

17.3 %

15.9 %

15.4 %

15.4 %

15.4 %

15.4 %

Research and development

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Other operating income

2.9 %

2.7 %

2.1 %

1.6 %

1.6 %

1.6 %

1.6 %

Other operating expenses

4.2 %

3.2 %

2.6 %

4.0 %

4.5 %

4.5 %

4.4 %

Unusual or infrequent items

0.7 %

neg.

0.1 %

neg.

0.0 %

0.0 %

0.0 %

EBITDA

20.8 %

19.2 %

18.9 %

24.2 %

24.2 %

24.4 %

25.0 %

Depreciation

7.3 %

6.2 %

5.1 %

6.2 %

6.2 %

5.6 %

5.1 %

EBITA

13.5 %

13.0 %

13.9 %

18.0 %

18.0 %

18.8 %

19.9 %

Amortisation of goodwill

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Amortisation of intangible assets

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Impairment charges

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

EBIT (inc revaluation net)

13.5 %

13.0 %

13.9 %

18.0 %

18.0 %

18.8 %

19.9 %

Interest income

0.4 %

0.2 %

0.1 %

0.2 %

0.2 %

0.1 %

0.1 %

Interest expenses

1.0 %

0.6 %

0.4 %

0.6 %

0.6 %

0.6 %

0.5 %

Other financial result

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Financial result

neg.

neg.

neg.

neg.

neg.

neg.

neg.

Recurring pretax income from continuing operations

12.9 %

12.5 %

13.6 %

17.5 %

17.5 %

18.4 %

19.5 %

Extraordinary income/loss

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Earnings before taxes

12.9 %

12.5 %

13.6 %

17.5 %

17.5 %

18.4 %

19.5 %

Tax rate

32.2 %

30.7 %

26.2 %

28.1 %

28.1 %

28.1 %

28.1 %

Net income from continuing operations

8.7 %

8.7 %

10.0 %

12.6 %

12.6 %

13.2 %

14.0 %

Result from discontinued operations (net of tax)

-0.6 %

2.2 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Net income

8.2 %

10.9 %

10.0 %

12.6 %

12.6 %

13.2 %

14.0 %

Minority interest

0.2 %

0.3 %

0.4 %

0.3 %

0.3 %

0.2 %

0.2 %

Net profit (reported)

8.0 %

10.6 %

9.6 %

12.3 %

12.4 %

13.0 %

13.8 %

Source: Company data, Hauck & Aufhäuser

2

Hauck & Aufhäuser Privatbankiers AG

Eckert & Ziegler AG

Balance sheet (EUR m)

2016

2017

2018

2019

2020E

2021E

2022E

Intangible assets

53.0

51.4

52.5

51.9

51.9

51.9

51.9

Property, plant and equipment

37.8

33.8

36.9

40.0

36.2

40.1

36.3

Financial assets

2.9

3.2

3.5

5.2

8.4

8.4

8.4

FIXED ASSETS

93.7

88.5

93.0

97.1

96.5

100.4

96.6

Inventories

25.1

26.8

28.8

31.2

36.4

40.2

41.4

Accounts receivable

23.2

24.3

28.3

29.5

31.3

34.6

37.7

Other current assets

11.9

10.9

14.9

26.6

26.6

26.6

26.6

Liquid assets

36.6

57.7

54.2

78.9

89.5

97.7

119.3

Deferred taxes

9.0

8.8

9.9

10.9

0.0

0.0

0.0

Deferred charges and prepaid expenses

0.0

0.0

0.0

0.0

0.0

0.0

0.0

CURRENT ASSETS

105.8

128.5

136.1

177.1

183.7

199.1

225.0

TOTAL ASSETS

199.5

217.0

229.1

274.2

280.2

299.5

321.6

SHAREHOLDERS EQUITY

105.2

112.3

122.6

138.2

149.7

167.2

188.9

MINORITY INTEREST

4.9

5.2

1.2

1.2

1.2

1.2

0.0

Long-term debt

4.1

0.0

0.0

0.0

0.0

0.0

0.0

Provisions for pensions and similar obligations

11.8

11.7

11.4

13.5

13.5

13.5

13.5

Other provisions

35.3

48.7

55.1

66.4

61.9

63.2

64.4

Non-current liabilities

51.2

60.4

66.5

79.9

75.4

76.7

77.9

short-term liabilities to banks

7.5

1.7

0.0

0.0

0.0

0.0

0.0

Accounts payable

6.4

4.5

6.5

4.5

6.2

6.8

7.2

Advance payments received on orders

1.4

5.9

4.1

12.0

12.0

12.0

12.0

Other liabilities (incl. from lease and rental contracts)

15.6

17.3

17.4

35.6

35.6

35.6

35.6

Deferred taxes

5.6

6.4

7.1

2.8

0.0

0.0

0.0

Deferred income

1.7

3.3

3.6

0.0

0.0

0.0

0.0

Current liabilities

38.2

39.1

38.8

54.9

53.8

54.3

54.8

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

199.5

217.0

229.1

274.2

280.2

299.5

321.6

Balance sheet (common size)

2016

2017

2018

2019

2020E

2021E

2022E

Intangible assets

26.6 %

23.7 %

22.9 %

18.9 %

18.5 %

17.3 %

16.1 %

Property, plant and equipment

19.0 %

15.6 %

16.1 %

14.6 %

12.9 %

13.4 %

11.3 %

Financial assets

1.4 %

1.5 %

1.5 %

1.9 %

3.0 %

2.8 %

2.6 %

FIXED ASSETS

47.0 %

40.8 %

40.6 %

35.4 %

34.4 %

33.5 %

30.0 %

Inventories

12.6 %

12.3 %

12.6 %

11.4 %

13.0 %

13.4 %

12.9 %

Accounts receivable

11.6 %

11.2 %

12.4 %

10.8 %

11.2 %

11.5 %

11.7 %

Other current assets

6.0 %

5.0 %

6.5 %

9.7 %

9.5 %

8.9 %

8.3 %

Liquid assets

18.3 %

26.6 %

23.7 %

28.8 %

31.9 %

32.6 %

37.1 %

Deferred taxes

4.5 %

4.1 %

4.3 %

4.0 %

0.0 %

0.0 %

0.0 %

Deferred charges and prepaid expenses

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

CURRENT ASSETS

53.0 %

59.2 %

59.4 %

64.6 %

65.6 %

66.5 %

70.0 %

TOTAL ASSETS

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

SHAREHOLDERS EQUITY

52.7 %

51.8 %

53.5 %

50.4 %

53.4 %

55.8 %

58.7 %

MINORITY INTEREST

2.5 %

2.4 %

0.5 %

0.5 %

0.4 %

0.4 %

0.0 %

Long-term debt

2.1 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Provisions for pensions and similar obligations

5.9 %

5.4 %

5.0 %

4.9 %

4.8 %

4.5 %

4.2 %

Other provisions

17.7 %

22.4 %

24.0 %

24.2 %

22.1 %

21.1 %

20.0 %

Non-current liabilities

25.7 %

27.8 %

29.0 %

29.1 %

26.9 %

25.6 %

24.2 %

short-term liabilities to banks

3.8 %

0.8 %

0.0 %

0.0 %

0.0 %

0.0 %

0.0 %

Accounts payable

3.2 %

2.1 %

2.8 %

1.6 %

2.2 %

2.3 %

2.2 %

Advance payments received on orders

0.7 %

2.7 %

1.8 %

4.4 %

4.3 %

4.0 %

3.7 %

Other liabilities (incl. from lease and rental contracts)

7.8 %

8.0 %

7.6 %

13.0 %

12.7 %

11.9 %

11.1 %

Deferred taxes

2.8 %

3.0 %

3.1 %

1.0 %

0.0 %

0.0 %

0.0 %

Deferred income

0.8 %

1.5 %

1.6 %

0.0 %

0.0 %

0.0 %

0.0 %

Current liabilities

19.1 %

18.0 %

16.9 %

20.0 %

19.2 %

18.1 %

17.0 %

TOTAL LIABILITIES AND SHAREHOLDERS EQUITY

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

100.0 %

Source: Company data, Hauck & Aufhäuser

3

Hauck & Aufhäuser Privatbankiers AG

Eckert & Ziegler AG

Cash flow statement (EUR m)

2016

2017

2018

2019

2020E

2021E

2022E

Net profit/loss

9.8

15.1

16.9

22.5

22.5

26.0

30.2

Depreciation of fixed assets (incl. leases)

8.7

8.6

8.6

11.1

11.1

11.1

11.1

Amortisation of goodwill

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Amortisation of intangible assets

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Others

-0.8

5.5

2.8

10.6

0.0

0.0

0.0

Cash flow from operations before changes in w/c

17.7

29.3

28.2

44.1

33.6

37.1

41.3

Increase/decrease in inventory

0.3

-1.7

0.7

-2.2

-5.2

-3.8

-1.2

Increase/decrease in accounts receivable

2.0

-1.1

-4.0

-1.2

-1.8

-3.3

-3.2

Increase/decrease in accounts payable

0.1

-1.9

2.0

-0.4

1.7

0.5

0.5

Increase/decrease in other working capital positions

0.2

2.2

-5.7

0.0

0.0

0.0

0.0

Increase/decrease in working capital

2.6

-2.5

-7.0

-3.7

-5.3

-6.6

-3.9

Cash flow from operating activities

20.3

26.8

21.2

40.4

28.3

30.6

37.4

CAPEX

5.3

4.2

6.1

7.3

7.3

15.0

7.3

Payments for acquisitions

0.2

5.5

2.1

0.9

0.0

0.0

0.0

Financial investments

0.0

0.5

0.0

0.0

3.2

0.0

0.0

Income from asset disposals

0.0

15.2

-2.5

2.5

0.0

0.0

0.0

Cash flow from investing activities

-5.5

5.1

-10.7

-5.7

-10.5

-15.0

-7.3

Cash flow before financing

14.8

31.9

10.5

34.7

17.9

15.6

30.1

Increase/decrease in debt position

-3.9

-5.3

-1.7

-2.7

0.0

0.0

0.0

Purchase of own shares

0.0

0.0

8.6

0.0

0.0

0.0

0.0

Capital measures

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Dividends paid

3.2

3.5

4.1

6.2

7.3

7.4

8.5

Others

-2.5

-1.2

-0.2

-1.7

0.0

0.0

0.0

Effects of exchange rate changes on cash

0.3

-0.8

0.6

0.5

0.0

0.0

0.0

Cash flow from financing activities

-9.5

-10.0

-14.6

-10.5

-7.3

-7.4

-8.5

Increase/decrease in liquid assets

5.6

21.1

-3.5

24.7

10.6

8.2

21.6

Liquid assets at end of period

37.0

57.7

54.2

78.9

89.5

97.7

119.3

Source: Company data, Hauck & Aufhäuser

Regional split (EUR m)

2016

2017

2018

2019

2020E

2021E

2022E

Domestic

0.0

0.0

0.0

0.0

0.0

0.0

0.0

yoy change

n/a

n/a

n/a

n/a

n/a

n/a

n/a

Rest of Europe

74.5

84.9

96.8

110.4

125.9

143.5

163.6

yoy change

3.5 %

14.0 %

14.0 %

14.0 %

14.0 %

14.0 %

14.0 %

NAFTA

46.1

53.0

60.9

70.1

80.6

92.7

106.6

yoy change

3.5 %

15.0 %

15.0 %

15.0 %

15.0 %

15.0 %

15.0 %

Asia Pacific

14.0

15.8

17.9

20.2

22.9

25.8

29.2

yoy change

8.0 %

13.0 %

13.0 %

13.0 %

13.0 %

13.0 %

13.0 %

Rest of world

-14.7

-15.1

-7.0

-22.2

-50.9

-64.9

-84.0

yoy change

neg.

neg.

neg.

neg.

neg.

neg.

neg.

TTL

119.9

138.6

168.7

178.5

178.4

197.1

215.3

yoy change

-14.2 %

15.7 %

21.7 %

5.8 %

-0.1 %

10.5 %

9.2 %

Source: Company data, Hauck & Aufhäuser

4

Hauck & Aufhäuser Privatbankiers AG

This is an excerpt of the original content. To continue reading it, access the original document here.

Attachments

  • Original document
  • Permalink

Disclaimer

Eckert & Ziegler AG published this content on 19 January 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 January 2021 11:23:05 UTC