Original-Research: ENAV S.p.A. – (von GBC AG): BUY

Research | 10 November 2023 00:00

Original-Research: ENAV S.p.A. – from GBC AG

Classification of GBC AG to ENAV S.p.A.

Company Name: ENAV S.p.A.
ISIN: IT0005176406

Reason for the research: GBC Italian Champions
Recommendation: BUY
Target price: 5.15 EUR
Last rating change: -

Analyst: Cosmin Filker, E. Geßwein

„Security above the clouds with high planning ability“ Continuous recovery and solid growth combined with a unique business model offer future share price potential, target price: € 4.50 and BUY rating

The Italian ENAV S.p.A., which operates in the air traffic control and air navigation services sector, generates attractive margins in a solid environment. Hit by the global COVID-19 pandemic, ENAV S.p.A., the world’s only listed provider of air navigation services, suffered a severe drop in total revenue of around 15% in the 2020 financial year. As a result, these fell from € 902.89 million to just € 771.30 million. Since then, however, the company has been on a steady recovery path and has been able to fully recover the effects of the pandemic and return to its former strength within the last two financial years.

ENAV S.p.A. closed the past 2022 financial year with total revenues of € 944.31 million. This confirms the ongoing recovery trend and the company also presents solid figures for the first six months of 2023. With a total revenue increase to € 441.61 million (PY: € 416.40 million), the extremely solid EBITDA margin of more than 20% was also confirmed. The EBITDA of € 99.74 million (previous year: € 97.01 million) did, however, show a slight decline, as the increasing recovery in air traffic and the renewed growth in business made it necessary to recruit new staff. In addition, a change in the financing mix (higher proportion of variable loans) and a planned rescheduling of two loans due to the increase in key interest rates led to an increase in financing costs in the first half of the 2023 financial year, which meant, that the after-tax result of € 18.37 million (previous year: € 27.72 million) was significantly below the previous year’s figure. For the further course of business, however, a continued normalisation of flight operations is to be expected, whereby the business development should seamlessly continue the positive trend of the past years.

Particularly noteworthy is the broadly diversified customer structure, which includes not only international players such as Lufthansa or easyJet, but also national companies. The mix of national and international business can be seen as the basis for the stable development of turnover. As a result, not only are attractive and predictable results achieved, but these are also continuously distributed to the shareholders within the framework of the attractive dividend policy. Finally, the business model also enjoys a special regulatory framework, which creates a moat effect and makes it difficult or impossible for new competitors to enter the market.

The increasing digitalisation and automation of air traffic should also be named as a future growth driver. On the one hand, the development of our software solutions is an essential growth factor. In addition, the development of the first global satellite monitoring system, which is based within the subsidiary Aireon Holdings LLC, is promising. The aim is to create a system that will enable air traffic control of all flight routes worldwide, covering in particular the polar, oceanic and remote areas that are currently not covered by radarbased air traffic control services. This makes it possible to optimise flight routes even in remote regions.

For the 2023 financial year, the company expects single-digit revenue growth in the midrange. This is in line with our estimates, which is why we have valued ENAV S.p.A. on the basis of the business outlook and history using our DCF model. We have determined a fair value of € 5.15 per share. In view of the current share price level, we assign a Buy rating and see good upside potential.

Die vollständige Analyse können Sie hier downloaden:
http://www.more-ir.de/d/28209.pdf

Kontakt für Rückfragen
GBC AG
Halderstraße 27
86150 Augsburg
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research@gbc-ag.de
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Disclosure of potential conflicts of interest in accordance with Section 85 WpHG and Art. 20 MAR The following potential conflict of interest exists at the company analysed above: see individual studies; a catalogue of potential conflicts of interest can be found at:
https://www.gbc-ag.de/de/Offenlegung
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Editorial deadline: 06.11.2023
Date and time of completion of the research report (german version): 09.11.2023 (08:13 am)
Date and time of the first disclosure of the research report (german version): 09.11.2023 (10:00 am)
Date and time of completion of the research report (english version): 09.11.2023 (8:07 pm)
Date and time of the first disclosure of the research report (english version): 10.11.2023 (10:30 am)

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