60313 Frankfurt, de
+49 (69) 400313-80
OVB with convincing 2015 results but a modest 2016 guidance (Buy affirmed - target down to 21 Euros)
Despite a challenging overall framework and a very low interest level group's revenues boosted by 5% to almost Euro 225m, which is a hike of 5% compared to last year. The company delivered a steep hike for EBITDA and EBIT, far above our expectations. EBITDA increased by 15% to Euro 17.7m. Our projection was only at Euro 16.8m. EBIT increased by almost 15% as well, from Euro 12.3m to Euro 14.0m. Our forecast was at only Euro 13.3m. The bottom line also hiked by almost 8% to Euro 9.4m, again better than our Euro 9.3m projection.
The region South and Western Europe (SWE) was the star with a 50% jump in EBIT to almost Euro 7m. In particular business performance in Spain and Italy as well as in Switzerland and Austria has been convincing. Number of SWE advisors climbed by 10% to 666 which makes us optimistic for the 2016 SWE results. Looking at the home market Germany, the EBIT contribution for the group remained stable while CEE was down 8% from Euro 10.2m to Euro 9.4m. The main reason for this drop was the difficult situation in the important Czech market.
Despite the jump in 2015 profits the guidance of the management for 2016 was modest. Group's turnover might decline in a single digit region but management strives to keep the operating profit stable. The decline in the top-line derives from probably lower revenues in CEE but we judge an unchanged operating profit to be a clear success in a still very difficult overall market. After the release of the 2015 annual report we revised our 2016 net profit forecast from Euro 10.2m to Euro 9.5m and our 2017 forecast from Euro 10.6m to Euro 10.2m. We maintain our Buy recommendation as the OVB paper has a very decent dividend yield of almost 5% after the dividend payment was lifted from 60 Cents to 65 cents on the current low share price level of only 14 Euros. We slightly bring down our target price from Euro 23.00 to Euro 21.00 as there is no growth in revenues for the current year. For any queries regarding our OVB update please do not hesitate to contact us.
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