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LPKF
(SDAX, Industrial Goods & Services)
A n a l y s t
Robert-Jan van der Horst
+49 40 309537-290
CO M M E N T Published 27.07.2020 08:15 1
RESEARCH
Buy
EUR 38.00
Price EUR 22.90
Upside 65.9 %
Value Indicators: EUR Share data: Description:
DCF: 38.67
FCF-Value Potential 22e: 16.83
Bloomberg: LPK GR
Reuters: LPKG.DE
ISIN: DE0006450000
Highly specialised machine manufacturer developing laser applications for special purposes
Market Snapshot: EUR m Shareholders: Risk Profile (WRe): 2020e
Market cap: 561.0
No. of shares (m): 24.5
EV: 538.8
Freefloat MC: 561.0
Ø Trad. Vol. (30d): 3.45 m
Freefloat 100.0 %
Lazard Frères Gestion 4.9 %
JPMorgan AM 3.1 %
Beta: 1.2
Price / Book: 5.7 x
Equity Ratio: 72 %
Profitability exceeds expectations
LPKF released preliminary Q2 figures on Friday (24.07.2020). While the revenue of EUR 30m was in line with the company’s guidance (EUR
28-33m) and our estimate (EUR 31m), the EBIT of EUR 5.2m exceeded both LPKF’s target range of EUR 1-4m and our expectation (EUR
4.5m). The resulting EBIT margin of 17.3% was the highest quarterly margin in the last five years, which we consider impressive given the
challenging macroeconomic environment. The high level of profitability was in part a consequence of cost-cutting measures and in part a result
of a lower revenue share from larger orders with a less attractive margin profile.
The only cautionary note was the weak order intake of EUR 18m which was 25% below its previous year’s value (Q2/19 EUR 24m). This was
mainly explained by postponements in the solar segment. Solar orders are usually larger than orders in other segments and the last large order
(EUR 14m) was announced in August 2019. Hence, without another order within the next two months, Q3 order intake could again fall short of
its previous year’s figure. Since solar orders have longer lead times, we have slightly reduced our sales forecast for this year and 2021.
Despite our more cautious approach towards the short-term prospects of the solar business, our view on the 2024 target (sales EUR >360m,
EBIT margin >25%) remains unchanged. Therefore, we confirm both our target price of EUR 38 and our Buy recommendation.
LPKF Laser & Electronics - Q2 2020
in EUR m Q2/20p Q2/20e Q2/19 yoy 6M/20p 6M/20e 6M/19 yoy
Sales 30.0 31.0 36.3 -17.3% 50.5 49.5 72.7 -30.5%
EBIT 5.2 4.5 4.0 31.3% 2.1 2.8 10.1 -79.2%
margin 17.3% 14.5% 10.9% 4.2% 5.7% 13.9%
Changes in Estimates: Comment on Changes:
FY End: 31.12. in EUR m
2020e (old)
+ / - 2021e (old)
+ / - 2022e (old)
+ / -
Sales 133.3 -4.5 % 164.2 -3.0 % 192.3 -0.6 %
EBIT 11.9 2.0 % 27.9 -9.9 % 33.8 -2.9 %
EPS 0.33 0.0 % 0.81 -9.9 % 0.98 -3.1 %
� 2020 sales estimate reduced to reflect the postponement risk for the current major solar order
� 2021 sales estimate reduced to reflect the postponement risk for future solar orders
� 2020 EBIT margin estimate increased after higher Q2 profitability than anticipated
� 2021/2022 EBIT margin estimate reduced as a result of lower solar sales
FY End: 31.12. in EUR m
CAGR (19-22e) 2016 2017 2018 2019 2020e 2021e 2022e
Sales 10.9 % 91.1 102.1 120.0 140.0 127.3 159.2 191.1
Change Sales yoy 4.4 % 12.0 % 17.5 % 16.7 % -9.1 % 25.0 % 20.1 %
Gross profit margin 68.8 % 69.7 % 64.3 % 63.8 % 64.2 % 61.8 % 63.2 %
EBITDA 15.8 % 1.3 11.6 14.9 26.9 20.0 33.4 41.8
Margin 1.4 % 11.4 % 12.4 % 19.2 % 15.7 % 21.0 % 21.9 %
EBIT 19.6 % -6.8 4.0 6.8 19.2 12.1 25.1 32.9
Margin -7.4 % 3.9 % 5.7 % 13.7 % 9.5 % 15.8 % 17.2 %
Net income 21.0 % -8.8 1.1 8.1 13.1 8.2 17.9 23.3
EPS 20.7 % -0.40 0.05 0.33 0.54 0.33 0.73 0.95
EPS adj. 20.7 % -0.40 0.05 0.33 0.54 0.33 0.73 0.95
DPS 26.0 % 0.00 0.00 0.00 0.10 0.10 0.10 0.20
Dividend Yield n.a. n.a. n.a. 1.1 % 0.4 % 0.4 % 0.9 %
FCFPS -0.08 0.14 0.24 1.72 0.00 0.64 0.81
FCF / Market cap -1.1 % 1.6 % 3.1 % 18.3 % 0.0 % 2.8 % 3.5 %
EV / Sales 2.2 x 2.3 x 1.7 x 1.5 x 4.2 x 3.3 x 2.6 x
EV / EBITDA 152.5 x 19.9 x 13.6 x 7.7 x 27.0 x 15.7 x 12.0 x
EV / EBIT n.a. 58.6 x 29.5 x 10.8 x 44.6 x 20.8 x 15.3 x
P / E n.a. 173.8 x 22.9 x 17.4 x 69.4 x 31.4 x 24.1 x
P / E adj. n.a. 173.8 x 22.9 x 17.4 x 69.4 x 31.4 x 24.1 x
FCF Potential Yield -2.2 % 2.5 % 6.5 % 8.9 % 2.6 % 4.4 % 5.7 %
Net Debt 40.2 38.0 16.6 -22.1 -22.2 -37.9 -57.6
ROCE (NOPAT) n.a. 1.6 % 9.9 % 16.5 % 11.5 % 23.1 % 29.0 % Guidance: Decline in revenue and earnings, if a global recession occurs
Rel. Performance vs SDAX:
1 month: 15.7 %
6 months: 24.1 %
Year to date: 48.8 %
Trailing 12 months: 212.5 %
Company events:
05.08.20 Q2
29.10.20 Q3
LPKF
CO M M E N T Publ ished 27 .07 .2020 2
RESEARCH
Sales development in EUR m
Source: Warburg Research
Sales by regions 2019; in %
Source: Warburg Research
EBIT development in EUR m
Source: Warburg Research
Company Background
� Global market leader/top supplier for laser-based processing tools replacing conventional and non-digital processes.
� LPKF is innovation leader and usually the first supplier of new laser-based processing technologies.
� Approx. 50% of revenues are generated with the development and production of PCBs (segments Development and Electronics)
where LPFK is global market leader with market shares up to 65% in its applications.
� Through its Solar BU (31.5% of sales) LPKF offers laser scriber to producers of thin film solar modules. In the future the new LTP
technology will also contribute to this segment.
� The Welding segment (19.8% of sales) offers versatile applications for a range of customer industries including automotive,
consumer electronics and healthcare
Competitive Quality
� LPKF is the technologically leading company in the market of laser applications and often first supplier of its customers.
� The high innovative strength of the company ensures the market-leading position and gives LPKF a first-mover advantage in new
products that offer highly attractive TCO compared to conventional solutions.
� The company holds a dominant market-leading position in selected niches (e.g. in development and solar segment) but there is also
some dependency on single customers.
� International service and distribution network leads to close relationships to customers.
� The focused low asset business model and high R&D efforts offer a high scalability and attractive capital returns.
EBT development in EUR m
Source: Warburg Research
Sales by segments 2019; in %
Source: Warburg Research
Net income development in EUR m
Source: Warburg Research
LPKF
CO M M E N T Publ ished 27 .07 .2020 3
RESEARCH
DCF model
Detailed forecast period Transitional period Term. Value
Figures in EUR m 2020e 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2031e 2032e
Sales 127.3 159.2 191.1 240.3 358.7 404.4 454.9 510.9 572.2 623.7 661.1 687.5 704.7
Sales change -9.1 % 25.0 % 20.1 % 25.8 % 49.3 % 12.7 % 12.5 % 12.3 % 12.0 % 9.0 % 6.0 % 4.0 % 2.5 % 2.5 %
EBIT 12.1 25.1 32.9 48.8 89.1 94.4 100.1 109.8 120.2 118.5 112.4 110.0 112.8
EBIT-margin 9.5 % 15.8 % 17.2 % 20.3 % 24.8 % 23.4 % 22.0 % 21.5 % 21.0 % 19.0 % 17.0 % 16.0 % 16.0 %
Tax rate (EBT) 31.0 % 28.5 % 29.0 % 29.0 % 29.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 % 30.0 %
NOPAT 8.3 18.0 23.3 34.7 63.2 66.1 70.1 76.9 84.1 82.9 78.7 77.0 78.9
Depreciation 7.9 8.3 9.0 11.1 15.8 17.0 18.2 20.4 22.9 24.9 26.4 27.5 28.2
in % of Sales 6.2 % 5.2 % 4.7 % 4.6 % 4.4 % 4.2 % 4.0 % 4.0 % 4.0 % 4.0 % 4.0 % 4.0 % 4.0 %
Changes in provisions 0.0 0.0 0.0 0.1 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.0
Change in Liquidity from
- Working Capital 4.3 -1.3 1.5 4.6 11.8 4.6 5.1 5.6 6.1 5.1 3.7 2.6 1.7
- Capex 11.8 11.6 11.7 13.2 17.9 18.2 18.2 20.4 22.9 24.9 26.4 27.5 28.2
Capex in % of Sales 9.3 % 7.3 % 6.1 % 5.5 % 5.0 % 4.5 % 4.0 % 4.0 % 4.0 % 4.0 % 4.0 % 4.0 % 4.0 %
Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Free Cash Flow (WACC Model)
0.1 15.9 19.2 28.0 49.5 60.4 65.1 71.4 78.1 77.9 75.0 74.4 77.2 79
PV of FCF 0.1 14.3 15.9 21.5 35.2 39.7 39.6 40.2 40.7 37.6 33.5 30.8 29.6 546 share of PVs 3.27 % 37.66 % 59.07 %
Model parameter Valuation (m)
Derivation of WACC: Derivation of Beta: Present values 2032e 379
Terminal Value 546
Debt ratio 5.00 % Financial Strength 1.10 Financial liabilities 9
Cost of debt (after tax) 2.8 % Liquidity (share) 1.30 Pension liabilities 0
Market return 7.00 % Cyclicality 1.30 Hybrid capital 0
Risk free rate 1.50 % Transparency 1.20 Minority interest 0
Others 1.30 Market val. of investments 0
Liquidity 31 No. of shares (m) 24.5
WACC 8.04 % Beta 1.24 Equity Value 947 Value per share (EUR) 38.67
Sensitivity Value per Share (EUR)
Terminal Growth Delta EBIT-margin
Beta WACC 1.75 % 2.00 % 2.25 % 2.50 % 2.75 % 3.00 % 3.25 % Beta WACC -1.5 pp -1.0 pp -0.5 pp +0.0 pp +0.5 pp +1.0 pp +1.5 pp
1.43 9.0 % 30.46 31.00 31.58 32.20 32.87 33.59 34.38 1.43 9.0 % 29.32 30.28 31.24 32.20 33.16 34.12 35.08
1.34 8.5 % 33.03 33.69 34.39 35.16 36.00 36.90 37.90 1.34 8.5 % 32.00 33.06 34.11 35.16 36.21 37.27 38.32
1.29 8.3 % 34.46 35.19 35.98 36.84 37.77 38.80 39.92 1.29 8.3 % 33.52 34.63 35.73 36.84 37.94 39.05 40.15
1.24 8.0 % 36.01 36.82 37.71 38.67 39.72 40.88 42.16 1.24 8.0 % 35.18 36.34 37.51 38.67 39.83 40.99 42.16
1.19 7.8 % 37.69 38.60 39.59 40.67 41.86 43.18 44.64 1.19 7.8 % 37.00 38.22 39.45 40.67 41.90 43.12 44.35
1.14 7.5 % 39.52 40.54 41.65 42.88 44.23 45.74 47.41 1.14 7.5 % 38.99 40.29 41.58 42.88 44.17 45.47 46.76
1.05 7.0 % 43.70 44.99 46.43 48.02 49.80 51.80 54.06 1.05 7.0 % 43.65 45.11 46.57 48.02 49.48 50.94 52.40
� Sales decrease in 2020 reflects the risk of global economic downturn
� Comparably high growth rates in 2023 and 2024 driven by anticipated LIDE orders
� Margin increase resulting from the high scalability of LPKF's business model
� Higher capex in 2020 includes a EUR 6m investment in LPKF's LIDE foundry
LPKF
CO M M E N T Publ ished 27 .07 .2020 4
RESEARCH
Free Cash Flow Value Potential Warburg Research's valuation tool "FCF Value Potential" reflects the ability of the company to generate sustainable free cash flows. It is based on the "FCF potential" - a FCF "ex growth" figure - which assumes unchanged working capital and pure maintenance capex. A value indication is derived via the perpetuity of a given year’s “FCF potential” with consideration of the weighted costs of capital. The fluctuating value indications over time add a timing element to the DCF model (our preferred valuation tool). in EUR m 2016 2017 2018 2019 2020e 2021e 2022e
Net Income before minorities -8.8 1.1 8.1 13.1 8.2 17.9 23.3
+ Depreciation + Amortisation 8.1 7.7 8.1 7.7 7.9 8.3 9.0
- Net Interest Income -0.8 -0.9 -0.9 -0.5 -0.2 -0.1 -0.1
- Maintenance Capex 4.3 4.0 3.9 2.8 2.5 3.2 3.8
+ Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0
= Free Cash Flow Potential -4.3 5.8 13.1 18.5 13.8 23.1 28.5
FCF Potential Yield (on market EV) -2.2 % 2.5 % 6.5 % 8.9 % 2.6 % 4.4 % 5.7 %
WACC 8.04 % 8.04 % 8.04 % 8.04 % 8.04 % 8.04 % 8.04 %
= Enterprise Value (EV) 199.0 231.5 202.0 208.3 538.8 523.1 503.3 = Fair Enterprise Value n.a. 71.5 162.9 230.2 171.1 287.4 354.6
- Net Debt (Cash) -22.4 -22.4 -22.4 -22.4 -22.5 -38.2 -58.0
- Pension Liabilities 0.3 0.3 0.3 0.3 0.3 0.3 0.3
- Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0
- Market value of minorities 0.0 0.0 0.0 0.0 0.0 0.0 0.0
+ Market value of investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0
= Fair Market Capitalisation n.a. 93.6 185.0 252.3 193.2 325.2 412.3
Number of shares, average 22.3 22.3 24.5 24.5 24.5 24.5 24.5
= Fair value per share (EUR) n.a. 4.20 7.55 10.30 7.89 13.28 16.83
premium (-) / discount (+) in % -65.6 % -42.0 % -26.5 %
Sensitivity Fair value per Share (EUR)
11.04 % n.a. 3.03 5.75 7.75 5.99 10.09 12.90
10.04 % n.a. 3.24 6.23 8.43 6.50 10.94 13.95
9.04 % n.a. 3.50 6.82 9.26 7.12 11.98 15.23
WACC 8.04 % n.a. 3.82 7.55 10.30 7.89 13.28 16.83
7.04 % n.a. 4.24 8.50 11.63 8.88 14.94 18.88
6.04 % n.a. 4.79 9.75 13.41 10.20 17.16 21.62
5.04 % n.a. 5.56 11.51 15.89 12.04 20.25 25.44
� To maintain its production, we assume an investment of 2% of sales
LPKF
CO M M E N T Publ ished 27 .07 .2020 5
RESEARCH
Valuation
2016 2017 2018 2019 2020e 2021e 2022e
Price / Book 2.9 x 3.6 x 2.4 x 2.5 x 5.7 x 4.8 x 4.0 x
Book value per share ex intangibles 1.75 1.74 2.55 3.06 3.37 4.04 4.96
EV / Sales 2.2 x 2.3 x 1.7 x 1.5 x 4.2 x 3.3 x 2.6 x
EV / EBITDA 152.5 x 19.9 x 13.6 x 7.7 x 27.0 x 15.7 x 12.0 x
EV / EBIT n.a. 58.6 x 29.5 x 10.8 x 44.6 x 20.8 x 15.3 x
EV / EBIT adj.* n.a. 132.1 x 22.1 x 11.3 x 44.6 x 20.8 x 15.3 x
P / FCF n.a. 62.9 x 32.1 x 5.5 x n.a. 35.7 x 28.4 x
P / E n.a. 173.8 x 22.9 x 17.4 x 69.4 x 31.4 x 24.1 x
P / E adj.* n.a. 173.8 x 22.9 x 17.4 x 69.4 x 31.4 x 24.1 x
Dividend Yield n.a. n.a. n.a. 1.1 % 0.4 % 0.4 % 0.9 %
FCF Potential Yield (on market EV) -2.2 % 2.5 % 6.5 % 8.9 % 2.6 % 4.4 % 5.7 %
*Adjustments made for:
LPKF
CO M M E N T Publ ished 27 .07 .2020 6
RESEARCH
Consolidated profit & loss In EUR m 2016 2017 2018 2019 2020e 2021e 2022e
Sales 91.1 102.1 120.0 140.0 127.3 159.2 191.1
Change Sales yoy 4.4 % 12.0 % 17.5 % 16.7 % -9.1 % 25.0 % 20.1 % Increase / decrease in inventory -2.3 -0.7 0.8 -0.8 2.7 -1.0 3.1
Own work capitalised 4.9 3.6 4.3 4.3 3.8 4.3 4.2
Total Sales 93.7 104.9 125.1 143.6 133.8 162.5 198.3
Material expenses 31.0 33.8 48.0 54.2 52.1 64.1 77.6
Gross profit 62.7 71.1 77.2 89.4 81.7 98.4 120.8
Gross profit margin 68.8 % 69.7 % 64.3 % 63.8 % 64.2 % 61.8 % 63.2 % Personnel expenses 43.9 41.9 44.3 44.7 44.4 46.3 55.8
Other operating income 5.8 5.7 3.7 4.0 3.3 3.5 3.4
Other operating expenses 23.3 23.3 21.7 21.7 20.6 22.1 26.6
Unfrequent items 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBITDA 1.3 11.6 14.9 26.9 20.0 33.4 41.8
Margin 1.4 % 11.4 % 12.4 % 19.2 % 15.7 % 21.0 % 21.9 %
Depreciation of fixed assets 4.3 4.0 3.9 4.4 4.6 5.1 5.5
EBITA -3.0 7.6 11.0 22.5 15.4 28.3 36.3
Amortisation of intangible assets 3.7 3.7 4.2 3.3 3.3 3.2 3.4
Goodwill amortisation 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBIT -6.8 4.0 6.8 19.2 12.1 25.1 32.9
Margin -7.4 % 3.9 % 5.7 % 13.7 % 9.5 % 15.8 % 17.2 %
EBIT adj. -6.8 1.8 9.1 18.4 12.1 25.1 32.9
Interest income 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Interest expenses 0.8 0.9 0.9 0.5 0.2 0.1 0.1
Other financial income (loss) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBT -7.6 3.0 6.0 18.7 11.9 25.0 32.7
Margin -8.3 % 3.0 % 5.0 % 13.4 % 9.3 % 15.7 % 17.1 % Total taxes 1.2 1.9 -2.1 5.6 3.7 7.1 9.5
Net income from continuing operations -8.8 1.1 8.1 13.1 8.2 17.9 23.3
Income from discontinued operations (net of tax) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income before minorities -8.8 1.1 8.1 13.1 8.2 17.9 23.3
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income -8.8 1.1 8.1 13.1 8.2 17.9 23.3
Margin -9.7 % 1.1 % 6.7 % 9.4 % 6.4 % 11.2 % 12.2 %
Number of shares, average 22.3 22.3 24.5 24.5 24.5 24.5 24.5
EPS -0.40 0.05 0.33 0.54 0.33 0.73 0.95
EPS adj. -0.40 0.05 0.33 0.54 0.33 0.73 0.95
*Adjustments made for:
Guidance: Decline in revenue and earnings, if a global recession occurs
Financial Ratios 2016 2017 2018 2019 2020e 2021e 2022e
Total Operating Costs / Sales 101.4 % 91.4 % 91.9 % 83.3 % 89.4 % 81.1 % 81.9 %
Operating Leverage 18.4 x n.a. 4.2 x 10.8 x 4.1 x 4.3 x 1.5 x
EBITDA / Interest expenses 1.6 x 12.3 x 17.4 x 52.0 x 89.8 x 222.9 x 367.2 x
Tax rate (EBT) -16.4 % 61.8 % -34.5 % 29.9 % 31.0 % 28.5 % 29.0 %
Dividend Payout Ratio 0.0 % 0.0 % 0.0 % 18.7 % 29.9 % 13.7 % 21.1 %
Sales per Employee 130,177 149,439 183,145 205,328 191,437 n.a. n.a.
Sales, EBITDA in EUR m
Source: Warburg Research
Operating Performance in %
Source: Warburg Research
Performance per Share
Source: Warburg Research
LPKF
CO M M E N T Publ ished 27 .07 .2020 7
RESEARCH
Consolidated balance sheet In EUR m 2016 2017 2018 2019 2020e 2021e 2022e
Assets
Goodwill and other intangible assets 15.3 15.4 15.2 15.9 16.4 17.6 18.3
thereof other intangible assets 1.9 1.8 1.4 1.0 1.0 1.0 1.0
thereof Goodwill 0.1 0.1 0.1 0.1 0.1 0.1 0.1
Property, plant and equipment 48.3 46.5 44.3 44.7 47.8 49.9 51.3
Financial assets 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other long-term assets 0.0 0.2 0.2 0.1 0.1 0.1 0.1
Fixed assets 63.6 62.1 59.8 60.7 64.3 67.5 69.7
Inventories 25.0 25.5 25.7 19.2 21.8 20.9 23.9
Accounts receivable 20.0 19.4 30.5 11.3 14.0 16.1 18.8
Liquid assets 3.6 3.3 3.7 31.3 31.4 45.7 63.7
Other short-term assets 4.8 6.2 9.1 5.5 5.5 5.5 5.5
Current assets 53.3 54.4 69.0 67.3 72.7 88.2 111.9
Total Assets 116.9 116.6 128.8 128.0 137.1 155.7 181.6
Liabilities and shareholders' equity
Subscribed capital 22.3 22.3 24.5 24.5 24.5 24.5 24.5
Capital reserve 1.5 1.5 15.5 15.5 15.5 15.5 15.5
Retained earnings 10.9 10.9 10.2 10.2 18.4 36.3 59.5
Other equity components 19.6 19.5 27.5 40.7 40.6 40.3 40.4
Shareholders' equity 54.3 54.2 77.7 90.8 98.9 116.5 139.9
Minority interest 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Total equity 54.3 54.2 77.7 90.8 98.9 116.5 139.9
Provisions 3.7 4.0 5.5 6.1 6.1 6.1 6.1
thereof provisions for pensions and similar obligations 0.3 0.3 0.3 0.3 0.3 0.3 0.3
Financial liabilities (total) 43.5 41.0 20.0 8.9 8.9 7.5 5.7
thereof short-term financial liabilities 20.9 21.0 2.6 2.0 2.0 1.6 0.8
Accounts payable 3.1 3.2 6.9 5.6 5.6 6.5 7.9
Other liabilities 12.4 14.1 18.6 16.5 17.6 19.1 22.0
Liabilities 62.6 62.3 51.1 37.2 38.2 39.2 41.7
Total liabilities and shareholders' equity 116.9 116.6 128.8 128.0 137.1 155.7 181.6
Financial Ratios 2016 2017 2018 2019 2020e 2021e 2022e
Efficiency of Capital Employment
Operating Assets Turnover 1.1 x 1.3 x 1.5 x 2.3 x 1.9 x 2.3 x 2.7 x
Capital Employed Turnover 1.0 x 1.1 x 1.3 x 2.0 x 1.7 x 2.0 x 2.3 x
ROA -13.9 % 1.9 % 13.5 % 21.6 % 12.7 % 26.5 % 33.4 %
Return on Capital
ROCE (NOPAT) n.a. 1.6 % 9.9 % 16.5 % 11.5 % 23.1 % 29.0 %
ROE -15.0 % 2.1 % 12.2 % 15.6 % 8.6 % 16.6 % 18.1 %
Adj. ROE -15.0 % 2.1 % 12.2 % 15.6 % 8.6 % 16.6 % 18.1 %
Balance sheet quality
Net Debt 40.2 38.0 16.6 -22.1 -22.2 -37.9 -57.6
Net Financial Debt 39.9 37.7 16.3 -22.4 -22.5 -38.2 -58.0
Net Gearing 74.0 % 70.0 % 21.4 % -24.3 % -22.4 % -32.5 % -41.2 %
Net Fin. Debt / EBITDA 3057.3 % 323.8 % 109.7 % n.a. n.a. n.a. n.a.
Book Value / Share 2.4 2.4 3.2 3.7 4.0 4.8 5.7
Book value per share ex intangibles 1.8 1.7 2.6 3.1 3.4 4.0 5.0
ROCE Development
Source: Warburg Research
Net debt in EUR m
Source: Warburg Research
Book Value per Share in EUR
Source: Warburg Research
LPKF
CO M M E N T Publ ished 27 .07 .2020 8
RESEARCH
Consolidated cash flow statement In EUR m 2016 2017 2018 2019 2020e 2021e 2022e
Net income -8.8 1.1 8.1 13.1 8.2 17.9 23.3
Depreciation of fixed assets 4.3 4.0 3.9 4.4 4.6 5.1 5.5
Amortisation of goodwill 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortisation of intangible assets 3.7 3.7 4.2 3.3 3.3 3.2 3.4
Increase/decrease in long-term provisions 0.1 0.6 1.1 0.5 0.0 0.0 0.0
Other non-cash income and expenses 6.6 3.8 -1.4 4.1 0.1 -0.1 0.1
Cash Flow before NWC change 5.9 13.1 15.8 25.4 16.2 26.0 32.3
Increase / decrease in inventory -5.9 -0.6 -0.2 6.6 -2.7 1.0 -3.1
Increase / decrease in accounts receivable 0.0 0.6 -11.1 19.2 -2.7 -2.1 -2.7
Increase / decrease in accounts payable 4.6 0.6 3.1 -2.8 1.0 2.4 4.3
Increase / decrease in other working capital positions 1.0 -4.1 4.0 -0.3 0.0 0.0 0.6
Increase / decrease in working capital (total) -0.3 -3.5 -4.3 22.6 -4.3 1.3 -0.9
Net cash provided by operating activities [1] 5.7 9.6 11.5 48.0 11.9 27.3 31.5
Investments in intangible assets -5.4 -3.8 -4.0 -4.0 -4.1 -4.4 -4.8
Investments in property, plant and equipment -2.0 -2.7 -1.8 -1.8 -7.7 -7.2 -6.9
Payments for acquisitions 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Financial investments 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Income from asset disposals 0.0 0.3 0.1 0.0 0.0 0.0 0.0
Net cash provided by investing activities [2] -7.5 -6.3 -5.7 -5.8 -11.8 -11.6 -11.7
Change in financial liabilities 7.1 -9.8 -13.6 -13.2 0.0 -1.4 -1.8
Dividends paid 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Purchase of own shares 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Capital measures 0.0 0.0 16.2 0.0 0.0 0.0 0.0
Other -0.8 -0.9 -0.9 -1.3 0.0 0.0 0.0
Net cash provided by financing activities [3] 6.3 -10.8 1.8 -14.5 0.0 -1.4 -1.8
Change in liquid funds [1]+[2]+[3] 4.5 -7.4 7.6 27.7 0.1 14.3 18.0
Effects of exchange-rate changes on cash 0.0 -0.1 0.1 -0.1 0.0 0.0 0.0
Cash and cash equivalent at end of period 3.6 -4.0 11.1 31.3 31.4 45.7 63.7
Financial Ratios 2016 2017 2018 2019 2020e 2021e 2022e
Cash Flow
FCF -1.8 3.1 5.8 42.2 0.1 15.7 19.8
Free Cash Flow / Sales -2.0 % 3.0 % 4.8 % 30.2 % 0.1 % 9.9 % 10.3 %
Free Cash Flow Potential -4.3 5.8 13.1 18.5 13.8 23.1 28.5
Free Cash Flow / Net Profit 20.4 % 267.7 % 71.8 % 321.9 % 0.8 % 87.9 % 85.0 %
Interest Received / Avg. Cash 0.2 % 0.1 % 0.1 % 0.1 % 0.0 % 0.0 % 0.0 %
Interest Paid / Avg. Debt 2.0 % 2.2 % 2.8 % 3.6 % 2.5 % 1.8 % 1.7 %
Management of Funds
Investment ratio 8.2 % 6.4 % 4.8 % 4.1 % 9.3 % 7.3 % 6.1 %
Maint. Capex / Sales 4.8 % 3.9 % 3.2 % 2.0 % 2.0 % 2.0 % 2.0 %
Capex / Dep 92.7 % 85.3 % 71.1 % 75.3 % 149.5 % 140.2 % 130.3 %
Avg. Working Capital / Sales 41.7 % 33.7 % 29.7 % 18.9 % 13.4 % 11.7 % 9.8 %
Trade Debtors / Trade Creditors 651.1 % 601.2 % 444.1 % 201.8 % 250.0 % 247.7 % 238.0 %
Inventory Turnover 1.2 x 1.3 x 1.9 x 2.8 x 2.4 x 3.1 x 3.2 x
Receivables collection period (days) 80 69 93 30 40 37 36
Payables payment period (days) 36 35 52 38 39 37 37
Cash conversion cycle (Days) 262 219 149 54 77 48 39
CAPEX and Cash Flow in EUR m
Source: Warburg Research
Free Cash Flow Generation
Source: Warburg Research
Working Capital
Source: Warburg Research
LPKF
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The valuation underlying the investment recommendation for the company analysed here is based on generally accepted and widely used methods of
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SOURCES
All data and consensus estimates have been obtained from FactSet except where stated otherwise.
LPKF
CO M M E N T Publ ished 27 .07 .2020 10
RESEARCH
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Reference in accordance with section 85 of the German Securities Trading Act (WpHG) and Art. 20 MAR regarding possible conflicts of interest with companies analysed:
-1- Warburg Research, or an affiliated company, or an employee of one of these companies responsible for the compilation of the research, hold
a share of more than 5% of the equity capital of the analysed company.
-2-
Warburg Research, or an affiliated company, within the last twelve months participated in the management of a consortium for an issue in
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-3- Companies affiliated with Warburg Research manage financial instruments, which are, or the issuers of which are, subject of the
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-4-
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-5- The company compiling the analysis or an affiliated company had reached an agreement on the compilation of the investment
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-6a- Warburg Research, or an affiliated company, holds a net long position of more than 0.5% of the total issued share capital of the analysed
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-6c- The issuer holds shares of more than 5% of the total issued capital of Warburg Research or an affiliated company.
-7- The company preparing the analysis as well as its affiliated companies and employees have other important interests in relation to the
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Company Disclosure Link to the historical price targets and rating changes (last 12 months)
LPKF 5 http://www.mmwarburg.com/disclaimer/disclaimer_en/DE0006450000.htm
LPKF
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RESEARCH
INVESTMENT RECOMMENDATION
Investment recommendation: expected direction of the share price development of the financial instrument up to the given price target in the opinion of
the analyst who covers this financial instrument.
-B- Buy: The price of the analysed financial instrument is expected to rise over the next 12 months.
-H- Hold: The price of the analysed financial instrument is expected to remain mostly flat over the next 12
months.
-S- Sell: The price of the analysed financial instrument is expected to fall over the next 12 months.
“-“ Rating suspended: The available information currently does not permit an evaluation of the company.
WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING
Rating Number of stocks % of Universe
Buy 128 62
Hold 58 28
Sell 12 6
Rating suspended 7 3
Total 205 100
WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING M
M taking into account only those companies which were provided with major investment services in the last twelve months.
Rating Number of stocks % of Universe
Buy 32 80
Hold 6 15
Sell 0 0
Rating suspended 2 5
Total 40 100
PRICE AND RATING HISTORY LPKF AS OF 27.07.2020
Markings in the chart show rating changes by Warburg Research
GmbH in the last 12 months. Every marking details the date and
closing price on the day of the rating change.
LPKF
CO M M E N T Publ ished 27 .07 .2020 12
RESEARCH
EQUITIES Matthias Rode +49 40 3282-2678 Head of Equities [email protected] RESEARCH Michael Heider +49 40 309537-280 Thilo Kleibauer +49 40 309537-257 Head of Research [email protected] Retail, Consumer Goods [email protected]
Henner Rüschmeier +49 40 309537-270 Eggert Kuls +49 40 309537-256 Head of Research [email protected] Engineering [email protected]
Stefan Augustin +49 40 309537-168 Andreas Pläsier +49 40 309537-246 Cap. Goods, Engineering [email protected] Banks, Financial Services [email protected]
Jan Bauer +49 40 309537-155 Malte Schaumann +49 40 309537-170 Renewables [email protected] Technology [email protected]
Jonas Blum +49 40 309537-240 Patrick Schmidt +49 40 309537-125 Telco, Construction [email protected] Leisure, Internet [email protected]
Christian Cohrs +49 40 309537-175 Oliver Schwarz +49 40 309537-250 Industrials & Transportation [email protected] Chemicals, Agriculture [email protected]
Felix Ellmann +49 40 309537-120 Simon Stippig +49 40 309537-265 Software, IT [email protected] Real Estate [email protected]
Jörg Philipp Frey +49 40 309537-258 Cansu Tatar +49 40 309537-248 Retail, Consumer Goods [email protected] Cap. Goods, Engineering [email protected]
Marius Fuhrberg +49 40 309537-185 Marc-René Tonn +49 40 309537-259 Financial Services [email protected] Automobiles, Car Suppliers [email protected]
Mustafa Hidir +49 40 309537-230 Robert-Jan van der Horst +49 40 309537-290 Automobiles, Car Suppliers [email protected] Technology [email protected]
Ulrich Huwald +49 40 309537-255 Andreas Wolf +49 40 309537-140 Health Care, Pharma [email protected] Software, IT [email protected]
Philipp Kaiser +49 40 309537-260 Real Estate [email protected]
INSTITUTIONAL EQUITY SALES Marc Niemann +49 40 3282-2660 Tobias Hald +49 40 3282-2695 Head of Equity Sales, Germany [email protected] United Kingdom [email protected]
Klaus Schilling +49 40 3282-2664 Maximilian Martin +49 69 5050-7413 Head of Equity Sales, Germany [email protected] Austria, Poland [email protected]
Tim Beckmann +49 40 3282-2665 Christopher Seedorf +49 69 5050-7414 United Kingdom [email protected] Switzerland [email protected]
Lyubka Bogdanova +49 69 5050-7411 Ireland, Poland, Australia [email protected]
Jens Buchmüller +49 69 5050-7415 Scandinavia, Austria [email protected]
Alexander Eschweiler +49 40 3282-2669 Sophie Hauer +49 69 5050-7417 Germany, Luxembourg [email protected] Roadshow/Marketing [email protected]
Matthias Fritsch +49 40 3282-2696 Juliane Niemann +49 40 3282-2694 United Kingdom [email protected] Roadshow/Marketing [email protected]
SALES TRADING Oliver Merckel +49 40 3282-2634 Marcel Magiera +49 40 3282-2662 Head of Sales Trading [email protected] Sales Trading [email protected] Elyaz Dust +49 40 3282-2702 Bastian Quast +49 40 3282-2701 Sales Trading [email protected] Sales Trading [email protected] Michael Ilgenstein +49 40 3282-2700 Jörg Treptow +49 40 3282-2658 Sales Trading [email protected] Sales Trading [email protected] MACRO RESEARCH Carsten Klude +49 40 3282-2572 Dr. Christian Jasperneite +49 40 3282-2439 Macro Research [email protected] Investment Strategy [email protected] Our research can be found under: Warburg Research http://research.mmwarburg.com/en/index.html Thomson Reuters www.thomsonreuters.com Bloomberg MMWA GO Capital IQ www.capitaliq.com FactSet www.factset.com For access please contact:
Andrea Schaper +49 40 3282-2632 Kerstin Muthig +49 40 3282-2703 Sales Assistance [email protected] Sales Assistance [email protected]
