Home 190702 Kendrion | realistic though challenging targets for 2023
190702 Kendrion | realistic though challenging targets for 2023

190702 Kendrion | realistic though challenging targets for 2023

No. pages 24
When Kendrion presented its 2018 first half year results on August 15th 2018, it provided a strategic update for 2019 - 2023 as well. The long-term goals Kendrion set were:

• a Return on Investment - before potential acquisitions - of more than 20.0% in 2023,
• an EBITDA-margin of more than 15% in 2023 and
• an unchanged dividend policy of maintaining a pay-out ratio of 35% to 50% of net profit.

Despite these alluring prospects, the share price is currently trading at a 5 year low due to disappointing results after the release of these financial objectives.

In this note we will start by analysing the company's long-term goals by determining what kind of organic revenue growth the company should achieve to deliver upon its guidance.

To judge whether or not it is likely Kendrion will be able to achieve this required organic revenue growth rate for the next 5 years, we will first take a glance at the company's historic performance, the performance of its peers and determine the main growth drivers for the industry.

To take a conservative stance, we have run a scenario whereby the organic revenue growth will be at half the required level to achieve its 2023 financial goals.

For these two scenarios we have calculated the present value of the company's operations by means of our DCF model.

Lastly we will draw our conclusions and investment opinion.


1 introduction
2 Kendrion at a glance
3 long-term targets - 2023
4 organic revenue growth rate
5 organic revenue growth rate at half the targeted level
6 discounted cash flow model
7 valuation multiples
8 summary and conclusions

Created Date: Tuesday July 02, 2019 08:25:20
Last Updated Date: Tuesday July 02, 2019 08:25:20
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