Aves One AG
17.08.2018 - Equity Research Einzelstudie
Research Report (Anno) – Aves One AG - english
| For the original study, please click here |
ISIN: DE000A168114
Branche: Dienstleistungen
Kurs bei Erstellung in €: 8,25
Kursziel in €: 12,10
Mögl. Interessenskonflikt gem. §34b Abs.1 WpHG und FinAnv: 5a;11
Profitability expected to be achieved this year; €1 billion in assets under management projected for 2019; Very attractive rail deal from the VTG/Nacco transaction
Aves One AG was once again able to grow dynamically in the 2017 financial year and sales rose by 86.5% to €53.43 million (previous year: €26.65 million). The reason for this dynamic growth in sales was the further expansion of the asset portfolio, in particular the acquisition of ERR Wien in August 2016 (now: Aves Rail GmbH), which led to an increase in the freight car fleet from 331 to 4,308. Overall, assets under management (AuM) rose from €445.40 million (2016) to €448.46 million (2017) and the gross return rose to 11.9% (previous year: 6.4%) in the same period. The acquisition of Aves Rail at the end of 2016 had a significant impact here.
The increase in sales also led to further increases in earnings. Due to its lean management approach and favourable debt financing, the business model’s costs develop degressively and result in high scalability. An EBITDA margin of 54.5% was achieved in the 2017 financial year (previous year: 35.9%) and EBITDA stood at €29.11 million (previous year: €10.29 million), although the effects as at the balance sheet date mentioned previously limit comparability.
The acquisition of extensive rail assets as part of the VTG/Nacco deal is expected to make a significant contribution to the future development of the company (see page 6). The background to this is an antitrust requirement for VTG to sell at least 30% of the Nacco assets acquired to a third party. In addition, the antitrust authorities imposed extensive conditions on the characteristics of the third party, which led to a greatly reduced number of bidders. The new buyer was not allowed to have a very large market position and had to have experience and assets in the rail sector. As a result, large financial investors and major competitors were excluded from the bidding process. Aves One was thus able to acquire the assets at what we view as a fair price (approx. €300 million). The acquired portfolio appears to be extremely attractive and fits very well into Aves One’s existing portfolio. The assets are primarily located in Germany and have a high EBITDA margin of over 75%. The assets are about 50% freight cars and 50% rail tank cars, which also have a comparatively young average age of about 15 years. The portfolio is particularly attractive because it is already fully let, which is not typical in other portfolio transactions. We believe that this transaction will add significant value for Aves One’s shareholders and should lead to the company’s target of €1 billion in assets under management being achieved by 2019.
Due to the significant increase in assets, we expect sales growth of 44.1% to €77.02 million in 2018 (previous year: €53.43 million), followed by sales growth of 52.5% to €117.48 million in 2019 and further growth of 10.7% to €130.04 million in 2020. All asset classes are expected to contribute to sales growth in accordance with their weighting.
Due to the strong sales growth, we expect dynamic EBITDA growth with a steady expansion of margins. We expect Group EBITDA to increase by 86.6% to €54.31 million in 2018, leading to an improvement in margins to 70.5% (previous year: 54.5%). This trend is expected to continue in the following years, with growth of 57.7% to €85.62 million in 2019 (72.9% EBITDA margin) and further growth of 14.0% to €97.65 million in 2020 (75.1% EBITDA margin).
Due to the dynamic development of EBITDA and declining depreciation, amortisation and interest rates, the net margin should gradually increase. We expect net income for 2018 to be positive, amounting to €3.76 million in 2018 after €-13.35 million (adjusted for non-cash currency effects) in 2017. In the following years we expect net income to increase to €7.69 million (2019) and €9.18 million (2020). We therefore expect Aves One to achieve high profitability in the medium term.
The VTG/Nacco transaction, which we believe creates significant value, should enable the company’s growth targets of 1 billion in AuM to be achieved as early as 2019. Based on our DCF model, we have calculated a target price of €12.10 (previously: €9.10) and have again issued a BUY rating.
Wichtiger Hinweis:
Bitte beachten Sie den Disclaimer/Risikohinweis sowie die Offenlegung möglicher Interessenskonflikte nach §34b WpHG /FinAnV auf unserer Webseite.
Artikel drucken