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(Boursier.com) — Vantiva dropped 5.9% to 0.139 euros the day after the announcement of a net loss of 283 million euros for continuing activities in 2023. Adjusted EBITDA reached 142 ME (-11 .7%) for a turnover down 25.3% to 2.075 billion euros (-23.3% at constant exchange rates). Free cash flow, before financial expenses and taxes, is positive by 13 million euros, down 75 million euros compared to 2022, due to the decline in EBITDA and especially the negative effect of the change in requirements in working capital.
In 2024, management is targeting adjusted EBITDA of more than 140 million euros and positive FCF.
For Oddo BHF, these financial objectives do not seem surprising, based on a still difficult market context (very weak Q1 to be expected – start of recovery hoped for by the end of the year for the Connected Home) and on the acquisition of the main competitor, namely the Home Networks division of Commscope (closing of the operation in January – restructuring/integration costs excluded from the FCF objective).
Reduced visibility on the activity (still difficult context), high debt (with problematic interest rates), negative FCF (after financial charges, taxes and restructuring costs) and the risks of integrating Home Networks (whose size is significant) encourage the analyst to stay away from the file for the moment (‘underperformance’ recommendation).
Vantiva reported results in line with revised third-quarter forecasts, with increased margins partially offsetting revenue headwinds in a sluggish market, Bryan Garnier said. The outlook for fiscal 2024 remains cautious, although forecasts of stable adjusted EBITDA and rising FCF, despite an expected revenue decline, should reassure investors of potential liquidity concerns. The broker believes the focus will now shift to the integration of CHN and the successful realization of synergies which, if realized, should support a share price recovery. The broker remains ‘buy’ on the value with a target reduced from 0.35 to 0.28 euros.
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