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Looking ahead with confidence

La Doria 27 May 2021 Outlook
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La Doria

Looking ahead with confidence

Q121 results and outlook

Food & beverages

27 May 2021

Price

€17.66

Market cap

€540m

Net debt (€m) at Q121

125.6

Shares in issue

30.6m

Free float

37%

Code

LD

Primary exchange

Borsa Italia (STAR)

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

2.2

26.0

68.5

Rel (local)

1.0

15.4

21.4

52-week high/low

€18.22

€10.42

Business description

La Doria is the leading manufacturer of private-label preserved vegetables and fruit for the Italian (17% of revenues) and international (83% of revenues) markets. It enjoys leading market share positions across its product ranges in the UK, Italy, Germany and Australia.

Next events

H121 results

September 2021

9M21 results

November 2021

Analysts

Sara Welford

+44 (0)20 3077 5700

Russell Pointon

+44 (0)20 3077 5700

La Doria is a research client of Edison Investment Research Limited

La Doria has posted another strong quarter, with revenue and EBITDA growth notwithstanding the strong base. Revenue growth was mainly price-driven, and mostly driven by the UK business. While the outlook for the sector remains favourable, the company continues to expect revenues and volumes to fall during 2021 as consumption gradually returns to normal and following the exceptionally strong performance during FY20. Management expects EBITDA to improve as the benefits of the investment plan start to flow through in full. We leave our estimates unchanged.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/19

717.7

32.7

64.0

18.0

27.4

1.0

12/20

848.1

63.3

182.8

50.0

9.5

2.8

12/21e

805.7

61.8

153.5

41.0

11.3

2.3

12/22e

813.8

66.5

164.1

44.0

10.6

2.5

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Q121 results ahead once again

Q121 group revenue was €222.3m, up 3.9% on the prior year. Organic growth was 4.9%, mainly driven by pricing. Q1 EBITDA was up 27.9% vs the prior year, with margins up 170bp to 9.1% thanks to stronger pricing and the full benefits of the four-year investment plan now coming through. Net debt was €125.6m compared to €129m at end Q120, and €140.2m at the end of FY20.

Forecasts unchanged, softer FY21 expected

The volume growth experienced in FY20 reflecting the effects of COVID-19 and its ramifications is not sustainable. Additionally, La Doria’s benefit from operational gearing will reduce as volumes fall, but its cost-cutting efforts will continue to have a positive impact on the bottom line. We also believe the pandemic has led to a structural and potentially lasting increase in at-home consumption owing to more working from home in future. Overall, while the company has had a strong start to the year, we expect sales to decline through the rest of FY21, in line with company guidance. Selling prices and margins should benefit from positive demand dynamics and hence we leave our forecasts unchanged.

Valuation: Fair value unchanged at €20.00/share

Our DCF model indicates a fair value of €20.00 per share (unchanged), or c 15% upside from the current share price. La Doria trades on a P/E of 11.3x FY21e, a c 35% discount to its private-label peer group. On EV/EBITDA it trades at 7.6x FY21e, a c 10% discount, and its dividend is well covered, with a yield of 2.3%. We believe La Doria remains an attractive proposition, given the strength of its market position in the private-label segment. Management remains committed to improving the stability of the business, while continuing to invest to maintain its competitive edge.

Investment summary

Company description: A leading private-label manufacturer

La Doria is a leading manufacturer and processor of tomatoes, sauces, pulses and fruit-based products. It has a presence in both the Italian market (c 20% of sales) and internationally (c 80% of revenue). Management has been shifting the product mix towards higher-value and higher-margin products, which also tend to exhibit less volatility, and expanding into new markets.

The company was founded in 1954 by the Ferraioli family. The family maintains active management of the company. Antonio Ferraioli is group chairman and co-CEO, and his brother Andrea Ferraioli is co-CEO. Maria Teresa Ferraioli, Diodato Ferraioli and Enzo Lamberti are members of the board, meaning the family fills five of the nine board positions and owns 63% of the group’s share capital.

Valuation: Significant upside remains

Our DCF model assumes 1.5% terminal growth and 7.0% terminal EBIT margin, and our fair value is unchanged at €20.00 per share, or c 15% upside. As ever, there is good visibility regarding the current year’s numbers: pricing for the tomato, vegetable, fruit and sauces lines is complete and costs are fully calculated, as the 2020 seasonal campaigns are over and the annual pricing rounds have occurred. Conversely, the outcome of the 2021 seasonal campaigns (affecting mainly FY22) is still unknown. Demand remains strong and industry stocks are low, hence the current outlook for selling prices is positive. The updated three-year rolling industrial plan, announced in March, extended the previous strategy, as expected, which is to improve the stability of the business, while continuing to invest to maintain its competitive edge. We also look at La Doria’s key metrics compared to its peer group. At 11.3x 2021e P/E and 7.6x 2021e EV/EBITDA, it trades at discounts of c 35% and c 10%, respectively, to its peers.

Q121 results and outlook

The year has started well, with further revenue and operating margin growth despite the strong base in Q120. Revenues were up 3.9% to €222.3m and EBITDA was up 27.9% to €20.2m, with EBITDA margin up 170bps to 9.1%. Net debt was down to €125.6m from €140.2m at year-end.

Revenue continued to grow in the quarter despite consumption gradually returning to more normal levels. EBITDA benefited from a favourable negotiating environment as a result of sustained demand and low sector stock levels. The margin improved across all product lines, with the ‘red line’ (tomato business) witnessing the greatest improvement. UK margins were slightly down on the prior year due to higher inventory costs: these were as a result of a planned build-up of inventories towards the end of Q4 to deal with the eventuality of a hard Brexit and are expected to normalise during Q2.

The outlook remains favourable, although the company expects that there will be a gradual return towards more normal consumption patterns as COVID-19-related restrictions are relaxed and hence revenues are expected to decline slightly in 2021 due to the challenging comparatives. The board reconfirms the targets and the 2021–23 Business Plan, which was issued with the FY20 results. Our forecasts are unchanged.

Sensitivities: Raw materials still a key variable

La Doria’s key sensitivities include: input cost inflation on the agricultural commodities it processes to manufacture its products; the supply/demand balance affecting the achievability of price inflation on finished goods (particularly for the red line); consumer consumption patterns and competitive pressures; and FX, specifically euro/sterling due to the consolidation of its trading subsidiary, LDH.

Company description: Specialising in private label

La Doria is the leading European producer of tinned tomatoes, processed pulses and vegetables and private-label, ready-made sauces. It is among the largest Italian producers of fruit juices and beverages, and the largest within the Italian private-label segment. Exhibits 1 and 2 below break down revenues by category and by geography. In FY20, 17% of revenue was from the domestic market and 83% was international. Its largest market by far is the UK (c 50% of revenues), gained through its subsidiary LDH.

Exhibit 1: Revenue split by category (FY20)

Exhibit 2: Revenue split by geography (FY20)

Source: La Doria

Source: La Doria

Exhibit 1: Revenue split by category (FY20)

Source: La Doria

Exhibit 2: Revenue split by geography (FY20)

Source: La Doria

La Doria supplies a very wide selection of food retailers. Tesco is its largest customer, but it also supplies Asda, Sainsbury’s, Carrefour, Morrisons, Walmart, Aldi, Lidl and many more. The overwhelming majority (97%) of La Doria’s sales are in the private-label segment, with 3% of sales from branded products and the balance from co-packing arrangements for branded manufacturers.

La Doria holds leading private-label market share positions in its largest markets (the UK and Italy), across many of its product categories, and in many of its other markets (Germany, Scandinavia and Australia). The company has benefited from its scale in its private-label categories and its reliability when dealing with its major customers, which all have high demands in terms of service and quality levels.

Over the past decade or so, the group strategy has been to gradually shift the sales mix towards non-seasonal, value-added products, to reduce the volatility of results and to increase margins. The sauces business lends itself particularly well here. For example, in FY08, the tomato business (red line) accounted for 31% of sales and 60% of EBITDA. In FY20 the tomato business represented 21% of sales and we estimate c 30% of EBITDA. The business plan announced in March builds on that of previous years.

Updated business plan to FY23

La Doria outlines its financial targets and strategic business plan for a rolling three-year period at the beginning of each financial year. The industrial plan (restructuring programme) set out in March 2018 has now been fully implemented: its main aim was to improve the efficiency of the business by closing some sites and investing to maintain cost competitiveness. The new UK logistics platform is now operational and the benefits of the investment are coming through fully for the first time in FY21.

The business plan was updated on 15 March 2021 with the FY20 results. The new profit targets were increased (see our note) in light of the exceptional performance in FY20, which exceeded the 2022 target originally set in the 2020–22 plan. However, FY20 volume growth was unsustainable, buoyed by the pandemic, and indeed management expects a volume decline in FY21, but margins are still expected to expand. The expected expansion in margins results from cost savings stemming from the industrial plan and to a more favourable supply/demand balance in the industry (given stocks remain low).

Q121 showed the year started well, but as lockdown restrictions ease and comparatives get harder, we leave our forecasts unchanged for now.

Looking ahead to FY21, we forecast consumption to return to more normal levels as lockdown restrictions are eased, and hence volumes to be down. While the retail environment remains competitive, we expect the pricing environment to be more favourable.

We compare our forecasts to guidance in the Financials section on page 8.

Strategic guidelines

The 2021–23 strategic guidelines confirm those set out in 2018 and are as follows:

Expand higher value-added product ranges, investing in the premium and organic and healthy segments, which are higher margin. The growth should be sustainable and responsible.

Strengthen existing group market positions in international markets, for example the UK, Germany, France, Scandinavia, Japan and Australia.

Extend growth in markets where La Doria is currently underrepresented (mainly the US), or where there is high potential, such as emerging markets (China, Russia, South-East Asia, Latin America).

Remain cost-competitive by continuously implementing organisational and operational efficiencies.

The above guidelines should drive both revenue growth and margin expansion, with the latter coming through from improved mix.

As a result of the COVID-19 pandemic, La Doria witnessed materially higher consumption of its products as lockdowns in its main markets favoured at-home consumption, and its exposure to the horeca (hotel, restaurant, catering) sector is relatively low. Of course, much of this increased consumption is expected to normalise through FY21 as lockdowns are eased in most markets, but management believes there is likely to be a lasting and structural increase in at-home consumption as incomes are squeezed and remote working becomes more prevalent.

Business overview

La Doria operates in four distinct categories: tomato-based products; pulses and vegetables; ready-made sauces; and fruit-based products. In addition, it sells both its products and those of third parties through a holding in its UK subsidiary, LDH. We look at demand and supply in each of these in turn.

Tomato-based products – the red line

La Doria is the largest producer in Europe of peeled and chopped tomatoes and it is market leader in UK, Australian and Japanese private-label canned tomatoes. As illustrated in Exhibit 1, the red line (tomato-based products) contributed 21% of revenues in FY20.

La Doria’s tomato business is seasonal and can be volatile. Over the last decade, the supply of Italian tomatoes has stabilised considerably thanks to legislative reform and structural consolidation. The industry now operates more effectively as a cohort and interests are better aligned to avoid significant overproduction. Indeed, over the past few years, production has been broadly in line with expectations, and huge overproduction seems to be an issue of the past.

Sector consolidation among the producers has also helped pricing, as there were a number of small businesses that at times made seemingly irrational pricing choices. Although consolidation has helped to mitigate the fragmentation issue, some small players still remain and pricing still comes under pressure if campaign conditions are imperfect.

The annual tomato campaign runs from the end of July to the end of September. Typically, La Doria negotiates annual contracts with its customers, and hence volumes and prices, just before or during the processing season. This gives La Doria good visibility over the outlook for its profitability until Q3 of the following year, when the next pricing rounds occur.

In 2020 the tomato campaign resulted in the overall fresh tomato crop volume in southern Italy being in line with the 2019 campaign (while the northern Italian crop increased, La Doria sources its tomatoes in southern Italy). This was below market expectations, and hence caused an increase in raw material costs. However, coupled with low inventory levels and higher demand levels owing to the pandemic, this resulted in a more favourable commercial landscape for the industry.

In 2020 the overall Italian tomato crop came in at 5.2m tonnes, up c 7.5% on the 2019 crop (which had been affected by the weather and yields were lower than expected), and vs 4.9m tonnes on average during the 2017–19 period.

On the demand side, Italian tomato consumption rose significantly as a result of the pandemic, after years of decline. During FY20 the market (including the discount channel) was up 10% in volume and up 16% in value terms (source: IRI Infoscan). This compares to volumes and value down 2% and 0.8% respectively in FY19. Private-label share rose to 34.5% in FY20 from 31.4% in FY19 (source: IRI Infoscan).

La Doria’s larger export markets also expanded significantly during the pandemic. In the UK, in FY20, the tomato-based products market was up 18% in volume terms and 22% in value terms (source: Kantar Worldpanel). Private label maintained its market share (72.5% vs 72.7% in FY19).

2021 outlook

It is still early days for the 2021 campaign, but our current forecast is for a slight increase in tomato production at national level, or c 5.4–5.5m tonnes. As ever, the quality of the crop and industrial yield will only be determined once the campaign is nearly over. As previously, we do not expect the COVID-19 pandemic to significantly affect campaign volumes, as the vast majority of the harvest is performed by machines. Pricing should again be favourable, as industry stock levels are extremely low.

Pulses and beans

La Doria is market leader in Europe (including the UK) in private-label preserved pulses. As shown in Exhibit 1, the vegetable line (pulses and beans) represented 27% of revenues in FY20.

FY20 was mainly affected by the 2019 summer harvest. This witnessed broadly stable harvest quantities compared to the prior year, and hence stable procurement prices. Finished product prices were slightly up.

On the consumption side, the pandemic led to a significant increase in demand for canned produce in general, and specifically pulses. During FY20 the Italian canned vegetable market grew by c 10% in both volume and value terms (source: IRI InfoScan). The private-label segment gained 60bps of volume share to 62.4%. In the UK, La Doria’s key product in the category is private-label baked beans. In 2020 the overall baked beans market grew by 9.3% in volume terms and an impressive 16.3% in value terms. Private-label share was up 170bps to 46.9% (source: Kantar Worldpanel).

La Doria management has expanded the vegetable line over time. The division balances the more commoditised red line products and also has the advantage that production can occur throughout the year, rather than being concentrated in the three summer months of the tomato processing campaign. Expansion of the vegetable line has helped to improve group efficiency and reduced the volatility of the overall group.

Outlook

We expect costs may start to increase as packaging material costs are moving up, and consumption should normalise as expected: volumes will fall following the exceptionally strong FY20, but we expect selling prices to increase during FY21 as raw material costs increase.

The fruit line

During FY20 the fruit business accounted for 9% of revenues (Exhibit 1). La Doria remains the market leader in Italian private-label fruit juices and fruit beverages, and is one of the main producers in the Italian market overall. The profitability of the fruit line is below that of other segments, as it has suffered years of underperformance caused by weak economic conditions, reduced consumption and general industry overcapacity. As for the other divisions, 2020 pricing was mainly driven by the 2019 crop, which was broadly stable and hence procurement costs were also broadly in line with the prior year. The final months of FY20 were driven by the summer 2020 processing campaign, which witnessed a decline in supply owing to spring frosts, and hence this led to an increase in production prices. Turning to selling prices, during FY20 the Italian fruit juice market witnessed broadly stable pricing, with a slight decline in H1 and a recovery during Q4 due to the rising costs discussed above.

On the demand side, volume was boosted by the pandemic and was up 2.4%, following years of declines. The market was broadly stable in value terms (source: IRI InfoScan). The private-label segment increased its volume market share substantially to 54.2% (from 45.2% in 2019).

Sauces

La Doria is the market leader in Europe in private-label pasta sauce, and the segment accounted for 13% of revenues in FY20 (see Exhibit 1).

During the year the overall Italian sauces market (excluding the discount channel) witnessed growth in both value (+10.7%) and volume (+8.6%) terms (source: IRI InfoScan). Tomato-based sauces volumes were up 7.5%, while pesto sauce volumes were up 13.1% (source: IRI InfoScan). Private-label continued to outperform and take share, with tomato-based sauce volumes up 10.3%, and pesto sauce volumes up 14.0%. In FY20 private label held a 31.9% market share in tomato-based sauces and a 28.7% share in pesto sauces, having gained share in both subcategories (source: IRI InfoScan).

In the UK, the sauces market (excluding pesto) was up 15.9% in both volume and value (source: Kantar Worldpanel). Private-label share grew by 400bp to 54.9% at the expense of the brands. The pesto market volumes were up 20% while value rose by 22.9%. Again, private-label share expanded 110bp, and now stands at 74.7%.

Other lines (trading as LDH)

La Doria owns 63.9% of its subsidiary La Doria Holdings or LDH. For accounting purposes, it consolidates 100% of its minorities, and treats as debt the value of the put options that exist against it. LDH is the leader in the British market for private-label, tomato-based products, baked beans, dry pasta and canned tuna. The ‘other’ category is mainly composed of LDH’s sales and accounted for 30% of group sales in FY20.

The remaining 36.1% stake in LDH is owned by a combination of Thai Union Group, Di Martino (an Italian pasta maker) and management. LDH’s three major shareholders – La Doria, Thai Union Group and Di Martino – together supply the majority of its ranges across tomatoes, pulses, tuna, pasta and pasta sauces.

We note that La Doria increased its holding in LDH by 5.9% in March 2021. The shares were purchased from two minority shareholders who are part of LDH management.

Financials

Q121 results

Q121 group revenue was €222.3m, up 3.9% on the prior year, mainly driven by increased pricing but with some volume growth. Group EBITDA was up 27.9% to €20.2m, which resulted in EBITDA margin improvement of 170bps to 9.1%. EBIT margins improved 140bp to 6.9%.

Revenue continued to grow in the quarter despite consumption gradually returning to more normal levels. The tomato-based product line witnessed the strongest revenue growth, at 11%, followed by ready-made sauces, which grew by 3%. Fruit lines were flat while pulses declined by 5% owing to the very tough comparative from Q120. Other lines (sold through LDH) also performed well, with revenues up 9%. Export markets grew revenues by 7%, while domestic sales were down 10.3% in the quarter. Domestic consumption fell compared to the record levels in Q120, which witnessed heavy stockpiling by consumers as the pandemic took hold slightly earlier in Italy.

EBITDA benefited from a favourable negotiating environment as a result of sustained demand and low sector stock levels. The margin improved across all product lines, with the ‘red line’ witnessing the greatest improvement. UK margins were slightly down on the prior year due to higher inventory costs: these were as a result of a planned build-up of inventories towards the end of Q4 to deal with the eventuality of a hard Brexit and are expected to normalise during Q2.

Reported group pre-tax profit was €9.9m in the quarter versus €16.1m in the prior year, affected by a currency loss of €5.4m vs a gain of €4.7m in the comparable period. Reported net profit was similarly affected by this and came in at €6.7m versus €12.1m. Net debt was €125.6m compared to €129m at end Q119, and €140.2m at the end of FY20.

Forecast revisions

As discussed above, we leave our estimates unchanged following the Q121 results. The year started well, as expected, but we believe consumption will normalise through the remainder of the year, in line with the company’s budgets. We illustrate below how our forecasts compare to La Doria’s published targets. We forecast net debt to fall more rapidly than the company’s business plan given management’s conservative track record when it comes to net debt.

The balance sheet remains conservative: net debt/EBITDA peaked in FY19 at 2.7x as capital was invested in the industrial plan, but leverage should rapidly decline in FY21 and FY22 (it was 1.7x in FY20). As ever, we expect the outcome of the 2021 campaigns to be partially known by the H1 results (scheduled for September), but a clearer picture will not emerge until later in the year. Customer negotiations on the red line side will be almost complete, and good progress should be made in the vegetable, sauces and fruit lines.

Exhibit 3: Edison forecasts vs company targets

2021e

2022e

2023e

Target
(€m)

Forecast (€m)

Diff
(%)

Target
(€m)

Forecast (€m)

Diff
(%)

Target
(€m)

Forecast (€m)

Diff
(%)

Revenue

800

805.7

0.7%

813

813.8

0.1%

831

830.1

(0.1%)

EBITDA

83

83.8

1.0%

91

89.5

(1.6%)

95

95.5

0.5%

EBIT

62

62.8

1.3%

69

67.5

(2.2%)

73

73.5

0.6%

PBT

62

61.8

(0.3%)

68

66.5

(2.2%)

73

72.5

(0.8%)

Net profit

46

47.6

3.4%

51

50.9

(0.2%)

54

52.9

(2.1%)

Net debt

105

100.8

(4.0%)

68

63.8

(6.2%)

26

21.5

(17.3%)

EBITDA margin

10.4%

10.4%

0bps

11.2%

11.0%

(19bps)

11.4%

11.5%

7bps

Source: La Doria targets, Edison Investment Research estimates


Valuation

We illustrate La Doria’s valuation versus its peers in Exhibit 4 below. On our FY21 estimates, La Doria currently trades at a c 35% discount to its peers on P/E, which we believe is unwarranted given the company’s balance sheet is conservatively managed, and its dividend is well-covered. On EV/EBITDA, La Doria trades at a c 10% discount.

Exhibit 4: Benchmark valuation of La Doria relative to peers

Market cap

P/E (x)

EV/EBITDA (x)

Dividend yield (%)

(m)

2021e

2022e

2021e

2022e

2021e

2022e

Greencore

£764.7

30.9

13.7

11.1

7.9

1.6

2.5

Ebro Foods

€ ,671.9

16.5

15.2

9.6

9.1

3.6

3.8

Bonduelle

€711.2

11.6

10.1

7.7

7.1

2.2

2.4

Valsoia

€165.3

20.3

19.5

10.8

10.4

2.5

2.5

Centrale del Latte d’Italia

€46.4

5.0

4.7

6.4

6.2

0.0

0.0

Newlat

€301.1

22.7

21.5

5.9

5.8

0.0

0.0

Peer group average*

17.8

14.1

8.6

7.7

1.6

1.9

La Doria

€539.7

11.3

10.6

7.6

7.2

2.3

2.5

Premium/(discount) to peer group

(36.4%)

(24.9%)

(11.1%)

(7.7%)

41.0%

33.4%

Source: Edison Investment Research estimates, Refinitiv. Note: Prices at 26 May 2021.

Our primary valuation methodology is DCF analysis and we calculate a fair value of €20.00/share unchanged) or c 20% upside from the current level. This is based on our (unchanged) assumptions of a 1.5% terminal growth rate and a 7.0% terminal EBIT margin. Our WACC of 6.2% is predicated on an equity risk premium of 4.5%, a borrowing spread of 6% and beta of 0.8. Below, we show a sensitivity analysis to these assumptions and note that based on our estimates and assumptions the current share price is broadly discounting a terminal EBIT margin of c 6% (which compares to La Doria’s reported EBIT margin of 7.6% in FY20, 4.8% at the trough in 2019, and 8.1% at the peak in 2015) and a terminal growth rate of c 1.0%. We forecast an EBIT margin of 7.8% in FY21, given the strong revenue and margin growth in Q121, and the favourable pricing environment. We currently forecast 0% revenue CAGR to FY24, but 3.6% revenue CAGR FY19–24 as FY20 was an exceptional year and we expect a drop in FY21 before the business resumes growth.

Exhibit 5: DCF sensitivity (€/share) to terminal growth rate and EBIT margin

EBIT margin

5.5%

6.0%

6.5%

7.0%

7.5%

8.0%

Terminal growth

-2.5%

11.7

12.4

13.0

13.7

14.3

15.0

-1.5%

12.4

13.2

13.9

14.7

15.4

16.1

-0.5%

13.3

14.2

15.0

15.9

16.8

17.6

0.5%

14.5

15.5

16.5

17.6

18.6

19.6

1.5%

16.2

17.4

18.7

20.0

21.2

22.5

2.5%

18.8

20.4

22.0

23.6

25.3

26.9

3.5%

23.3

25.6

27.8

30.0

32.3

34.5

Source: Edison Investment Research estimates

Sensitivities

La Doria’s key sensitivities include:

input cost inflation on the agricultural commodities it processes to manufacture its products;

the supply/demand balance affecting the achievability of finished goods price inflation, particularly for the red line;

consumer consumption patterns and competitive pressures, particularly in Europe with a subdued economic environment, although La Doria and the private label segment in general tend to benefit from consumers trading down;

FX, specifically euro/sterling due to the consolidation of its trading subsidiary, LDH. The UK represents c 50% of group sales.

Exhibit 6: Financial summary

€m

2018

2019

2020

2021e

2022e

2023e

2024e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

687.9

717.7

848.1

805.7

813.8

830.1

846.7

Cost of Sales

(581.7)

(604.2)

(706.9)

(668.3)

(671.7)

(682.7)

(695.5)

Gross Profit

106.2

113.5

141.3

137.4

142.1

147.4

151.2

EBITDA

 

 

52.8

56.0

83.1

83.8

89.5

95.5

98.2

Operating Profit (before amort. and except.)

34.8

34.6

64.8

62.8

67.5

73.5

78.2

Intangible Amortisation

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Exceptionals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

FX Gain / (loss)

3.2

(5.0)

4.9

0.0

0.0

0.0

0.0

Operating Profit

37.9

29.5

69.7

62.8

67.5

73.5

78.2

Net Interest

(1.7)

(1.8)

(1.5)

(1.0)

(1.0)

(1.0)

(1.0)

Profit Before Tax (norm)

 

 

33.1

32.7

63.3

61.8

66.5

72.5

77.2

Profit Before Tax (FRS 3)

 

 

36.3

27.7

68.2

61.8

66.5

72.5

77.2

Tax

(8.9)

(7.9)

(11.5)

(14.2)

(15.6)

(19.6)

(20.8)

Profit After Tax (norm)

27.3

19.9

56.7

47.6

50.9

52.9

56.4

Profit After Tax (FRS 3)

27.3

19.9

56.7

47.6

50.9

52.9

56.4

Average Number of Shares Outstanding (m)

31.0

31.0

31.0

31.0

31.0

31.0

31.0

EPS - normalised fully diluted (c)

 

 

88.2

64.0

182.8

153.5

164.1

170.6

181.8

EPS - (IFRS) (c)

 

 

88.2

64.0

182.8

153.5

164.1

170.6

181.8

Dividend per share (c)

18.0

18.0

50.0

41.0

44.0

46.0

49.0

Gross Margin (%)

15.4

15.8

16.7

17.1

17.5

17.8

17.9

EBITDA Margin (%)

7.7

7.8

9.8

10.4

11.0

11.5

11.6

Operating Margin (before GW and except.) (%)

5.1

4.8

7.6

7.8

8.3

8.8

9.2

BALANCE SHEET

Fixed Assets

 

 

203.5

246.0

246.8

255.4

264.2

273.8

285.5

Intangible Assets

5.5

5.1

7.5

6.8

6.1

5.4

4.7

Tangible Assets

175.9

221.6

219.5

212.2

203.9

195.6

188.3

Investments

22.1

19.3

19.9

36.5

54.3

72.8

92.5

Current Assets

 

 

419.4

384.4

433.5

456.9

497.0

547.8

600.2

Stocks

204.4

219.1

247.2

233.2

235.1

240.3

243.4

Debtors

110.2

109.8

126.1

124.1

125.3

128.7

131.2

Cash

86.8

42.0

51.1

90.5

127.5

169.8

216.5

Other

18.0

13.5

9.1

9.1

9.1

9.1

9.1

Current Liabilities

 

 

(242.3)

(246.6)

(276.2)

(259.4)

(259.4)

(262.1)

(264.4)

Creditors

(148.4)

(153.9)

(172.2)

(155.4)

(155.4)

(158.0)

(160.4)

Short term borrowings

(93.9)

(92.7)

(104.0)

(104.0)

(104.0)

(104.0)

(104.0)

Long Term Liabilities

 

 

(139.3)

(130.3)

(112.7)

(112.7)

(112.7)

(112.7)

(112.7)

Long term borrowings

(105.2)

(98.2)

(87.3)

(87.3)

(87.3)

(87.3)

(87.3)

Other long term liabilities

(34.1)

(32.2)

(25.4)

(25.4)

(25.4)

(25.4)

(25.4)

Net Assets

 

 

241.4

253.6

291.5

340.2

389.2

446.8

508.6

CASH FLOW

Operating Cash Flow

 

 

48.2

38.7

54.9

68.9

70.7

70.0

74.0

Net Interest

(1.7)

(1.8)

(1.5)

(1.0)

(1.0)

(1.0)

(1.0)

Tax

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Capex

(46.5)

(59.4)

(19.1)

(13.0)

(13.0)

(13.0)

(12.0)

Acquisitions/disposals

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Financing

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Dividends

(9.6)

(6.9)

(6.9)

(15.5)

(12.7)

(13.7)

(14.3)

Other

(4.6)

(7.0)

(18.8)

0.0

(7.0)

0.0

0.0

Net Cash Flow

(14.1)

(36.5)

8.6

39.4

37.0

42.3

46.7

Opening net debt/(cash)

 

 

98.2

112.3

148.8

140.2

100.8

63.8

21.5

HP finance leases initiated

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Other

(0.0)

0.0

(0.0)

0.0

0.0

0.0

0.0

Closing net debt/(cash)

 

 

112.3

148.8

140.2

100.8

63.8

21.5

(25.2)

Source: Edison Investment Research, company data

Contact details

Revenue by geography

Via Nazionale 320
84012 Angri
Italy
+39 081 516611
www.gruppoladoria.com

Contact details

Via Nazionale 320
84012 Angri
Italy
+39 081 516611
www.gruppoladoria.com

Revenue by geography

Management team

CEO: Antonio Ferraioli

CFO: Alberto Festa

Antonio Ferraioli joined the company in 1974. He has been CEO since 1984 and is a member of the founding Ferraioli family.

Alberto Festa joined the company in 2007, having held various positions in a number of Italian consumer products companies.

Management team

CEO: Antonio Ferraioli

Antonio Ferraioli joined the company in 1974. He has been CEO since 1984 and is a member of the founding Ferraioli family.

CFO: Alberto Festa

Alberto Festa joined the company in 2007, having held various positions in a number of Italian consumer products companies.

Principal shareholders

(%)

Holding Antonio Ferraioli Srl

10.17

Andrea Ferraioli

0.5

Holding Andrea Ferraioli I Srl

6.0

Holding Andrea Ferraioli II Srl

3.0

Holding Rosa Ferraioli Srl

8.66

Holding Iolanda Ferraioli Srl

8.66

Holding Giovanna Ferraioli Srl

8.66

Holding Raffaella Ferraioli Srl

8.66

Holding Rosaria Ferraioli Srl

8.66


General disclaimer and copyright

This report has been commissioned by La Doria and prepared and issued by Edison, in consideration of a fee payable by La Doria. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison’s policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

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United Kingdom

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1185 Avenue of the Americas

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United States of America

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Level 4, Office 1205

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by La Doria and prepared and issued by Edison, in consideration of a fee payable by La Doria. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison’s policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers’ exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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