December 11th, 2019 | 19:52 CET
Syzygy as expected due to Daimler, Lufthansa and Porsche
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Sales in Germany increase
Compared to the previous year, the subsidiaries operating in Germany achieved a sales increase of 6.0% from EUR 34.29 million in the previous year to a new record high of EUR 36.34 million, starting from an already higher level. On the one hand, this reflects the stronger concentration on the German market that has been achieved and, on the other hand, the sales impulses from the acquisition of new customers. In addition to Lufthansa, for which Syzygy AG acts as new lead agency, many well-known customers such as Daimler Financial Services, Deutsche Bahn and Porsche were acquired.
International subsidiaries burden the business
The positive development in Germany had not been able to compensate for the weakness in sales in the UK business, so that a slight overall decline in sales from EUR 48.06 million to EUR 47.63 million is visible across the group, corresponding to a decline of -0.9%. In line with the slight decline in revenues, EBIT fell from EUR 4.55 million to EUR 4.16 million in the first nine months of 2019. The regional differences in the development of the Syzygy subsidiaries can also be seen here.
While the EBIT contribution of the German companies reached a new record high of EUR 5.03 million after EUR 4.63 million in the previous year, the EBIT of the international companies was below the break-even point at EUR -0.26 million compared to EUR 0.94 million in the previous year. In addition to the already low sales revenues in Great Britain, this includes the restructuring expenses incurred in previous reporting periods.
In line with the expectations of GBC Research
Overall, the figures for the first three quarters of 2019 were in line with GBC Research's expectations in absolute terms. Syzygy's management has also confirmed the previous Guidance, according to which revenues should reach the previous year's level and an EBIT margin of 8 to 9% by the end of the 2019 financial year.
Increase in EBIT margin expected
The profitability level achieved in the first nine months is exactly within the expected EBIT margin range. According to GBC's experts, the restructuring measures in the UK should be largely finalised, with no further charges expected in the fourth quarter of 2019. For the coming financial year, the absence of restructuring charges should have an impact throughout the year, enabling the company to achieve further return improvements. Accordingly, GBC continue to forecast an increase in the EBIT margin to 10%.
Analysts confirm price target and rating
In line with the confirmed company forecast, the analysts of GBC maintain their estimates unchanged. Their DCF valuation model and the target price of EUR 10.80 remains unchanged and they continue to award the BUY rating.
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