Veganz — Reducing FY21 guidance

Veganz (DB: VEZ)

Last close As at 24/06/2024

51.28

1.27 (2.54%)

Market capitalisation

63m

More on this equity

Research: Consumer

Veganz — Reducing FY21 guidance

Veganz has reduced its FY21 guidance for both revenues and EBITDA. Revenues were lower than expected owing to the Omicron variant, which affected consumer spending in Q4, typically a seasonally strong quarter. Supply chain disruption, particularly on the packaging side, was also unhelpful. The EBITDA loss of €9.8m is wider than anticipated, primarily due to a delay in the payment of state subsidies for the new production site. This was caused by the state subsidies being oversubscribed and receipt of payment is now expected in 2022. We note there is enough liquidity to absorb the costs and hence it is only a timing issue. Also, IPO and bond placement costs were higher than the company forecast. On an underlying basis, the EBITDA loss was €5.3m (excluding subsidies and one-offs).

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Consumer

Veganz

Reducing FY21 guidance

Consumer

Scale research report - Flash

3 March 2022

Price

€58.8m

Market cap

€72m

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Share details

Code

VEZ

Listing

Deutsche Börse Scale

Shares in issue

1.223m

Last reported net debt at 30 June 2021

€2.069m

Business description

Veganz is a multi-category provider of plant-based food products: it develops, produces, markets and distributes plant-based foods under its own brand, Veganz. It currently has a product range of c 100 products, spanning ambient, chilled and frozen food.

Analysts

Sara Welford

+44 203 077 5700

Russell Pointon

+44 203 077 5757

Veganz has reduced its FY21 guidance for both revenues and EBITDA. Revenues were lower than expected owing to the Omicron variant, which affected consumer spending in Q4, typically a seasonally strong quarter. Supply chain disruption, particularly on the packaging side, was also unhelpful. The EBITDA loss of €9.8m is wider than anticipated, primarily due to a delay in the payment of state subsidies for the new production site. This was caused by the state subsidies being oversubscribed and receipt of payment is now expected in 2022. We note there is enough liquidity to absorb the costs and hence it is only a timing issue. Also, IPO and bond placement costs were higher than the company forecast. On an underlying basis, the EBITDA loss was €5.3m (excluding subsidies and one-offs).

Q4 revenue was affected by the rapid spread of the Omicron variant in the final two months of FY21, which coincided with a typically seasonal strong quarter as consumers increase their food expenditure around Christmas. FY21 sales were €30.4m versus guidance published in October 2021 of €32m. While we do not have quarterly sales splits, this implies a c 15% shortfall in the final quarter. Although some impact is likely to have persisted into Q1, we would expect consumption to return to more normal levels for the rest of FY22. In addition, the gradual easing of restrictions globally is resulting in more on-the-go and out-of-home consumption, which should be helpful for Veganz’s sales in the foodservice channel. To counterbalance this benefit, reduced consumption of food at home may result in slower growth in the more traditional food retail channel compared to the elevated levels witnessed while COVID-19 restrictions were in place across Veganz’s main markets in the DACH region. Altogether, Veganz is well-placed to benefit from increased consumer interest in plant-based diets, and should continue to expand its on-shelf presence as it rolls out new products and in new geographies.

Consensus forecasts are not available. There are few direct listed peers, but we compare Veganz’s valuation to a range of food manufacturers, both within vegan/alternative protein markets and in the European small- and mid-cap food space. Veganz’s FY21 EV/sales multiple of 1.3x is now in line with the average of the mid-cap food manufacturers, at 1.2x, while the vegan/alternative protein manufacturers are on 4.8x. Veganz had higher revenue growth on average than most of its peers for FY20 and FY21, although it lagged the newer and more disruptive players. Veganz remains loss making, like its more direct peers.

Historical figures

Year
end

Revenue
(€m)

PBT
(€m)

EPS
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/18

17.4

(3.9)

N/A

0.0

N/A

N/A

12/19

23.9

(4.7)

N/A

0.0

N/A

N/A

12/20

26.8

(5.1)

N/A

0.0

N/A

N/A

12/21

30.4

N/A

N/A

0.0

N/A

N/A

Source: Veganz

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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

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

Any Information, data, analysis and opinions contained in this report do not constitute investment advice by Deutsche Börse AG or the Frankfurter Wertpapierbörse. Any investment decision should be solely based on a securities offering document or another document containing all information required to make such an investment decision, including risk factors. This report has been commissioned by Deutsche Börse AG and prepared and issued by Edison for publication globally.

Edison Investment Research standard fees are £60,000 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 2022 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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