SPLENDID MEDIEN AG Splendid Medien AG
Equity flash - Trading UpdateMedia
BUY (BUY) | Target EUR 3.50 (EUR 3.50)Est. change 2015e 2016e
Price (last closing price) : EUR 2.33 | Upside : 50%
$T ypCap$ 1628 1 0 4 2
EPS - -
H1 2015s result in line; no surprises expected for H2e
Thursday, 27 August 2015
H1 2015 review
Today, Splendid Medien AG announced its H1 2015 results, which came in as expected. After a weak H2 2014, the company returned to its former operating strength in H1 2015. Group revenues totalled € 28.4 after € 25.0m in H1 2015, up 13% yoy. Reported EBIT, at
€ 2.0m, was well above the H1 2014 loss of € -1.4m. In Q2 2015 splendid achieved an EBIT of € 0.5m vs. € -1.1m in Q2 2014. H1 2015 EBT swung from € -1.7m in H1 2014 to € +1.7m. Finally, net income swung to a profit as well from € -1.8m in H1 2014 to € 1.7m, corresponding to EPS of € 0.17 (PY: € -0.18). Operating CF rose to € 11.9m (H1 2014:
€ 5.2m), leading to FCF of € 3.9m, which is quite positive considering last year's FCF of
€ -5.1m. CAPEX declined to € 8.0m after € 10.3m in H1 2014.
Segment level:
Content: revenues rose to € 26.0m (PY: € 22.7m), led especially by strong improvement in the home entertainment unit; EBIT jumped from € -1.4m € +2.4m. Services: revenues were flat at € 2.3m; EBIT marginally lower, from € 0.4m to € 0.2m.
Guidance confirmedFor the full-year 2015 management confirmed its guidance: i) group revenues of € 57-62m, and ii) EBIT of € 3.5-4.5m. The company is right on track to reach its guidance, which is very important given last year's profit warning in H2 2014. Especially the EBIT run rate implies a strong full-year 2015 performance. Considering that this year's Q3 is a non-event due to a lack of substantial theatrical releases, all eyes are on Q4. And considering the traditionally strong back-end-loaded seasonality in the Home Entertainment unit, we are convinced that splendid is well on track to meet its guidance. We stick to our revenue estimate of € 63.4m for 2015e (slightly above guidance). Due, however, to some minor delays and postponements of film releases, we may be too bullish. Considering that we assess these
'on-top' revenues as low-margin for 2015e, their impact on EBIT is only marginal. Our unchanged EBIT forecast of € 4.2m for 2015e lies in the middle of the guidance range.
BUY; PT at € 3.50The impact on the stock should be positive as the yoy comparison is very strong and the outlook remains unchanged after a weak year 2014. Our FVpS stands unchanged at € 3.94. We confirm our PT of € 3.50 and reiterate our BUY recommendation.
Marcus Silbe (Analyst)
+49 (0)69 920 54 814
Marcus.silbe@oddoseydler.com
Please notice the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by § 34b WpHG (Securities Trading Law) at the end of this document. This financial analysis in accordance with § 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others in connection with their trading activities, occupation, or employment.
Splendid Medien AG
Thursday, 27 August 2015
Profit and loss accountIFRS EURm 2012 2013 2014 2015E 2016E 2017E
Sales 50.11 54.94 66.03 63.35 70.67 76.08
YoY grow th 78.1% 9.6% 20.2% -4.1% 11.5% 7.6%
Cost of revenues -30.16 -34.29 -43.25 -36.24 -40.28 -43.36
as % of sales -60.2% -62.4% -65.5% -57.2% -57.0% -57.0%
Total output 19.95 20.65 22.78 27.12 30.39 32.71
as % of sales 39.8% 37.6% 34.5% 42.8% 43.0% 43.0%
General & administrative expenses -7.36 -7.17 -7.10 -7.60 -8.48 -9.13
as % of sales -14.7% -14.3% -14.2% -15.2% -16.9% -18.2%
Sales & marketing -11.15 -13.44 -16.12 -16.47 -18.37 -19.02
as % of sales -22.2% -26.8% -32.2% -32.9% -36.7% -38.0%
Other operating income 3.04 4.43 2.46 2.53 2.83 3.04 as % of sales 6.1% 8.8% 4.9% 5.1% 5.6% 6.1% Other operating expenses -0.22 -0.16 -0.17 -1.33 -1.55 -1.67
as % of sales -0.4% -0.3% -0.3% -2.1% -2.2% -2.2%
Operating profit 4.28 4.32 1.86 4.24 4.81 6.09
as % of sales 8.5% 7.9% 2.8% 6.7% 6.8% 8.0%
Currency effects -0.08 -0.23 0.14 0.00 0.00 0.00
EBIT (reported) 4.20 4.08 2.00 4.24 4.81 6.09
as % of sales 8.4% 7.4% 3.0% 6.7% 6.8% 8.0%
Net financial results -0.84 -0.68 -0.59 -0.60 -0.60 -0.60
EBT (Earnings before income taxes) 3.36 3.40 1.41 3.64 4.21 5.49
as % of sales 6.7% 6.2% 2.1% 5.8% 6.0% 7.2%
Income taxes (incl. other taxes) 0.23 0.26 -0.51 -0.64 -0.82 -1.70
as % of EBT 6.8% 7.5% -36.4% -17.5% -19.4% -31.1%
Net income 3.58 3.66 0.90 3.01 3.39 3.78
Minorities 0.00 0.00 0.00 0.00 0.00 0.00
Net income attributable to shareholders 3.59 3.66 0.90 3.01 3.39 3.78
as % of sales 7.2% 6.7% 1.4% 4.7% 4.8% 5.0%
Shares outstanding (in m) 9.79 9.79 9.79 9.79 9.79 9.79
Basic earnings per share (EUR) 0.37 0.37 0.09 0.31 0.35 0.39
Source: Company Data, Oddo Seydler Bank AG
Splendid Medien AG
Thursday, 27 August 2015
Balance Sheet
IFRS EURm 2012 2013 2014 2015E 2016E 2017E
Assets
Non-current assets 26.88 31.11 35.37 41.44 46.38 49.72
as % of total assets 47.2% 49.0% 48.9% 57.8% 62.1% 62.3%
Intagible assets 0.41 0.36 0.35 0.51 0.66 0.76
Goodwill 0.33 0.33 0.33 0.33 0.33 0.33
Property, plant and equipment 0.77 0.80 1.22 1.29 1.35 1.40
Film assets 18.90 23.28 26.73 33.17 37.90 41.09
Advanced payments 0.00 0.00 0.00 0.00 0.00 0.00
Deferred tax assets 5.65 5.91 6.00 5.40 5.40 5.40
Other assets 0.05 0.06 0.01 0.01 0.01 0.01
Other long-term receivables 0.78 0.38 0.73 0.73 0.73 0.73
Current assets 30.02 32.39 36.91 30.19 28.31 30.07
as % of total assets 52.8% 51.0% 51.1% 42.2% 37.9% 37.7%
Inventories 2.29 2.00 2.39 1.90 2.12 2.28
Accounts receivable, other receivables and other assets
17.27 22.11 27.05 20.30 17.67 18.92
Current tax assets 0.07 0.07 0.04 0.04 0.04 0.04
Assets held for sale 0.00 0.00 0.00 0.00 0.00 0.00
Cash and cash equivalents 10.40 8.21 7.44 7.95 8.49 8.83
Total assets 56.91 63.50 72.28 71.63 74.69 79.79
Shareholders´ equity and liabilities
Shareholders´ equity | 22.79 | 25.45 | 25.11 | 27.63 | 30.04 | 32.84 |
as % of total equity and liabilities | 40.1% | 40.1% | 34.7% | 38.6% | 40.2% | 41.2% |
Subscribed capital | 9.79 | 9.79 | 9.79 | 9.79 | 9.79 | 9.79 |
Capital reserve | 0.40 | 0.40 | 0.40 | 0.40 | 0.40 | 0.40 |
Retained profits | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Net retained earnings | 12.60 | 15.27 | 14.93 | 17.45 | 19.86 | 22.66 |
Other reserves (incl. currency effects) | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Equity attributable to shareholders | 22.78 | 25.46 | 25.12 | 27.63 | 30.04 | 32.85 |
Minorities | 0.01 | -0.01 | -0.01 | -0.01 | -0.01 | -0.01 |
Current provisions and liabilities | 28.76 | 33.92 | 43.50 | 40.33 | 40.98 | 43.28 |
as % of total equity and liabilities | 50.5% | 53.4% | 60.2% | 56.3% | 54.9% | 54.2% |
Financial lease | 0.06 | 0.07 | 0.12 | 0.12 | 0.12 | 0.12 |
Financial liabilities | 7.69 | 9.77 | 13.65 | 13.65 | 13.65 | 13.65 |
Current provisions | 7.00 | 7.32 | 7.49 | 8.36 | 8.78 | 9.22 |
Advance payments received | 0.97 | 0.62 | 3.57 | 3.57 | 3.57 | 3.57 |
Accounts payable | 10.87 | 12.61 | 14.46 | 10.41 | 10.65 | 12.51 |
Current income tax liabilities | 0.31 | 0.22 | 0.25 | 0.25 | 0.25 | 0.25 |
Other current liabilities | 1.87 | 3.31 | 3.96 | 3.96 | 3.96 | 3.96 |
Debts related to assets held for sale | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Non-current provisions and liabilities | 5.35 | 4.13 | 3.67 | 3.67 | 3.67 | 3.67 |
as % of total equity and liabilities | 9.4% | 6.5% | 5.1% | 5.1% | 4.9% | 4.6% |
Provisions for pensions | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Financial liabilities | 4.67 | 3.86 | 3.04 | 3.04 | 3.04 | 3.04 |
Financial lease | 0.16 | 0.15 | 0.27 | 0.27 | 0.27 | 0.27 |
Deferred tax liabilities | 0.41 | 0.02 | 0.05 | 0.05 | 0.05 | 0.05 |
Other payables and liabilities | 0.10 | 0.10 | 0.31 | 0.31 | 0.31 | 0.31 |
Total equity and liabilities | 56.91 | 63.50 | 72.28 | 71.63 | 74.69 | 79.79 |
Source: Company Data, Oddo Seydler Bank AG |
Splendid Medien AG
Thursday, 27 August 2015
Cash flow statementNet income | IFRS | EURm | 2012 | 2013 | 2014 | 2015E | 2016E | 2017E |
Net income | 4.20 | 4.08 | 2.00 | 4.24 | 4.81 | 6.09 | ||
Depreciation and amortisation | 12.32 | 15.93 | 22.00 | 19.24 | 20.97 | 23.07 | ||
Other transactions incl. non-cash | -0.15 | -1.32 | -1.39 | -0.64 | -1.42 | -2.30 | ||
Change in Working Capital | -2.05 | 0.10 | -0.86 | 4.07 | 3.07 | 0.87 |
Cash flow from operating activities 14.32 | 18.79 | 21.75 | 26.92 | 27.43 | 27.72 | |
CAPEX | -19.53 | -21.27 | -24.69 | -25.91 | -25.91 | -26.41 |
Other investing activities | 0.13 | 0.04 | 0.10 | 0.00 | 0.00 | 0.00 |
Cash flow from investing activities -19.40 -21.23 -24.59 -25.91 -25.91 -26.41
Change in debt 2.40 1.24 3.04 0.00 0.00 0.00
Repayment of liabilities under finance lease 0.00 0.00 0.00 0.00 0.00 0.00
Paid interests 0.00 0.00 0.00 0.00 0.00 0.00
Net proceeds from capital increase & right capital 0.00 0.00 0.00 0.00 0.00 0.00
Dividend payments -0.98 -1.00 -0.98 -0.49 -0.98 -0.98
Cash flow from financing activities 1.42 0.25 2.06 -0.49 -0.98 -0.98
Total change in cash and cash equivalents -3.66 -2.19 -0.79 0.52 0.53 0.34
Changes in cash due to changes in consolidation 0.00 0.00 0.00 0.00 0.00 0.00
Cash and cash equivalents at the start of the period
14.06 10.40 8.21 7.44 7.95 8.49
Cash and cash equivalents at year´s end 10.40 8.21 7.42 7.95 8.49 8.83
Adjusted cash and cash equivalents 10.40 8.21 7.44 7.95 8.49 8.83
Current account 0.00 0.00 0.01 0.00 0.00 0.00
Source: Company Data, Oddo Seydler Bank AG
Splendid Medien AG
Thursday, 27 August 2015
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This report has been prepared independently of the company analysed by Oddo Seydler Bank AG and/ or its cooperation partners and the analyst(s) mentioned on the front page (hereafter all are jointly and/or individually called the 'author'). None of Oddo Seydler Bank AG or its cooperation partners, the Company or i ts shareholders has independently verified any of the information given in this document.
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In this report, the following conflicts of interests are given at the time, when the report has been published: d, f
Oddo Group and/or its employees or clients may take positions in, and may make purchases and/ or sales as principal or agent in the securities or related financial instruments discussed in this analysis. Oddo Group may provide investment banking, consulting, and/ or other services to and/ or serve as directors of the companies referr ed to in this analysis. No part of the authors compensation was, is or will be directly or indirectly related to the recommendations or views expressed.
Recommendation System:
Oddo Seydler uses a 3-level absolute share rating system. The ratings pertain to a time horizon of up to 12 months:
BUY: The expected performance of the share price is above +10%.
HOLD: The expected performance of the share price is between 0% and +10%. SELL: The expected performance of the share price is below 0%.
This rating system is only a guideline. Therefore, deviations from this system may apply. Recommendation history over the last 12 months for the company analysed in this report:
Date | Recommendation | Price at change date | Price target |
16 September 2014 | BUY | EUR 2.32 | EUR 3.50 |
01 October 2014 | BUY | EUR 2.39 | EUR 3.00 |
13 November 2014 | BUY | EUR 2.00 | EUR 3.00 |
01 April 2015 | BUY | EUR 2.19 | EUR 3.00 |
13 May 2015 | BUY | EUR 2.49 | EUR 3.50 |
27 August 2015 | BUY | EUR 2.33 | EUR 3.50 |
The following valuation methods are used when valuing companies: Multiplier models (price/earnings, price/cash flow, price/book value, EV/Sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer group comparisons, historical valuation approaches, discounting models (DCF, DDM), break-up value approaches or asset valuation approaches. The valuation models are
Splendid Medien AG
Thursday, 27 August 2015
dependent upon macroeconomic measures such as interest, currencies, raw materials and assumptions concerning the economy. In addition, market moods influence the valuation of companies.
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Splendid Medien AG
Thursday, 27 August 2015
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