February News Update

Let's start with the February News Update. This month's publication was delayed because I was busy with the results of some companies.

Verallia Annual Results

On February 19, Verallia announced its annual results.

Revenue: Revenue reached €3,456 million, an 11.5% decrease compared to 2023. This decline resulted from a combination of lower volumes and, especially, reduced prices.

Revenues: Revenues were 3456 M, 11.5% lower than in 2023. The decline is due to a combination of lower volumes and especially, lower prices.

The decrease in volume is attributed to two factors: weak consumer demand and destocking by customers who had previously held peak inventory levels. Although destocking has not fully concluded, there are signs of recovery, with positive volume growth observed in the second half of the year (H2). Regarding pricing, a continued negative impact is anticipated for 2025, but not as large as in 2024.

These factors contributed to a 50% drop in profit compared to 2023.

The proposed dividend is €1.7, representing a 21% reduction.

M&A:

During the year, the company acquired Vidrala’s Italian glass activities.

Outlook:

For 2025, volume normalization is expected, with a return to a normal market situation and positive structural trends for glass anticipated from 2026 onwards. Despite a continuing negative price impact in 2025, the company has provided EBITDA guidance close to 2024 levels.

A Capital Markets Day is scheduled for September, where further insights into medium- to long-term prospects will be shared.

Valuation and Conclusion:

The company's valuation remains attractive, with a P/E ratio of 11.3 times and a dividend yield of 6%, especially considering the sector's challenging year.

Datagroup Q1 Results

The company's Q1 revenues were €139.2 million, an increase of 15%, with organic growth of 8%.

In terms of inorganic growth, the company acquired Tarador, a small cybersecurity company with revenues of €8 million in 2024.

EBITDA was € 17.6 million, a decrease of 5% compared to the previous year.

This is due to an increase in material costs due to higher trade revenues, as well as increased personnel costs due to recent acquisitions, expanded sales and marketing expenses, and an increase in employees in AI, cloud and cybersecurity.

Margins are expected to normalize later in the fiscal year.

Net income declined 28.5%, impacted by a 91% increase in finance costs, primarily related to acquisitions.

Guidance:

Guidance for fiscal 2024/2025 will be published at the Annual General Meeting on March 18, 2025.

In summary, the results were good, with a temporary decline in margins that is expected to be resolved during the year. The company continues to execute effectively.

Mcbride half year results

Revenue increased by 0.7% (2.9% at constant currency). In terms of volume, the company grew by 5.9%, with private label volumes increasing by 2.4% and contract manufacturing volumes rising 69.0% following the launch of two key contracts.

Operating profit was €31 million, a 5% increase compared to the previous year, with a slight improvement in margins.

Net profit was €19 million, a 53% increase compared to the previous year, due to a decrease in financial costs.

Net debt continues to decrease, reaching €117.6 million.

Thanks to refinancing, the company intends to reinstate annual dividends post final 2025 results.

Summary:

The results have been very good, and the company is delivering on its promises.

Operational improvements continue, and it appears that the margin improvement is not a one-off event.

The target for 2027 is an adjusted EBITDA above 10%, compared to 9.3% in 2024.

Another key point of the thesis is deleveraging. In 2024, the company paid €18 million in interest and refinancing costs, a significant figure compared to the €33.3 million net profit.

The company trades at a very low valuation, and despite the company's promises of operational improvements and deleveraging, which they are currently fulfilling, it trades at 6.4 times LTM P/E.

WE.CONNECT Annual Revenue

The company has announced annual sales of €300.2 million for 2024, a 13.7% increase compared to the previous year. This growth is primarily attributed to the acquisition of MCA TECHNOLOGY. In organic terms, revenue decreased by 5.4%.

Esautomotion Revenue and Financial Position at Year-End 2024

Revenue for the year 2024 was €27.3 million, a decrease of 27.3%.

The company's financial position is strong, with a net cash of €3.9 million.

The company is optimistic about 2025, with the acquisition of new customers.

Gianni Senzolo, CEO of Esautomotion, stated:

“The last quarter of 2024 shows an improvement compared to the previous 12-15 months. However, it is still premature to say that there is a reversal of the trend in the markets. We believe that the efforts and investments to acquire new customers and markets globally, together with some increase in customer optimism and perhaps some signs of resolution of geopolitical problems, can lead to a 2025 significantly better than 2024.”

Aplisens

Adam Zurawski, CEO and major shareholder, has purchased shares of the company on the market.