First Sensor has published preliminary figures for FY 2011.
The Sensortechnics group which was recently acquired from Augusta Technologie has been consolidated since October 2011 and should have contributed ca. EUR 14m to sales. With that organic sales growth of First Sensor should have been ca. 3% in Q4 (estimates Warburg Research). The deviation from the estimates coincides with a weaker economy in Q4.
Non-recurring expenses burden: the company expects EBITA 2011 to amount to EUR 5.5m adjusted by non-recurring expenses. Non-recurring expenses particularly include transaction costs in relation to the acquisition of the Sensortechnics group und relocation of the production plant of the subsidiary First Sensor Technology GmbH into the main plant in Berlin Oberschönweide. With it the operating result came in below expectations (WRe: EUR 6.2m).
Guidance confirms estimates overall: besides the main figures 2011 First Sensor has published an outlook for 2012. The company expects sales of EUR 118-122m as well as an EBITA of EUR 13-15m. While the sales guidance comes in slightly above our estimates, our expected EBITA of EUR 14.7m lies within First Sensor's target. Estimates 2012ff. remain unchanged.
Shortly after publishing figures the company also announced that Dr. Ingo Stein would retire from the Executive Board at the end of the current quarter for personal reasons. He will be replaced by Joachim Wimmer who most recently worked as the general manager of an international manufacturer of electronic products with annual sales of ca. EUR 100m and 750 employees.
In view of an upside of ca. 25% to the DCF-based PT of EUR 11.50 the rating remains Buy.
Company background
First Sensor develops customer-specific sensor solutions. The value creation covers the entire value chain from sensor component (chip) up to a complete system. The products are manufactured in small to large-sized series. First Sensor is taking a worldwide leading position in tailor-made solutions.
The sensors (e.g. optical sensors, pressure and flow sensors, target angle and position sensors) and sensor systems developed and produced by First Sensor are necessary for the operation of various end products and, therefore, represent an integral part of them. The verticals addressed by the company are life science, industrial applications, mobility, security as well as aerospace.
Competitive quality
Sensors and sensor solutions developed and produced by First Sensor for specific problems enable customers to open up application fields, which would not be covered by standard sensors made by mass producers, enabling First Sensor's customer to differentiate from others. On top of this, the costs for the sensors only represent a small fraction of the costs of the customer's end product which strengthens First Sensor's negotiating position.
Their excellent competitive position is strongly defendable as...
...large sensor manufacturers focus on standard products and differentiate via economies of scale. Thus, the market niches addressed by First Sensor are usually not big enough for the large players.
...much smaller players in the strongly fragmented sensor market do not have access to the attractive markets and customers.
This is the result of the interaction between many different factors such as...
...the product manufacturers' high dependency on sensor suppliers which leads to high demand with respect to the supplier's solid financial situation.
...the know how in sensor technology, which has been gained over many years and is maintained by considerable expenses for R&D (approx. 10% of sales p.a).
...the CAPEX requirements that cannot be denied as well as...
...the ability to organise production processes efficiently and last but not least...
...the continuously growing relations with key players of important industries.
All of this not only represents important pillars of the high competitive quality but also barriers to market entry for potential competitors.
Legal Disclaimer
This research report was prepared by the Warburg Research GmbH, a subsidiary of the M.M.Warburg & CO KGaA. It contains selected information and does not purport to be complete. The report bases on publicly available information and data ("the Information") believed to be accurate and complete. Warburg Research GmbH neither does examine the Information to be accurate and complete, nor guarantees its accuracy and completeness. Possible errors or incompleteness of the Information do not constitute grounds for liability, neither with regard to indirect nor to direct or consequential damages. In particular, neither M.M.Warburg & CO KGaA nor the Warburg Research GmbH are liable for the statements, plans or other details contained in the Information concerning the examined companies, their associated companies, strategies, economic situations, market and competitive situations, regulatory environment, etc. Although due care has been taken in compiling this research report, it cannot be excluded that it is incomplete or contains errors. M.M.Warburg & CO KGaA and Warburg Research GmbH, their shareholders and employees are not liable for the accuracy and completeness of the statements, estimations and the conclusions derived from the Information contained in this document. Provided any research report is being transmitted in connection with an existing contractual relationship, i.e. financial advisory or similar services, the liability of M.M.Warburg & CO KGaA and Warburg Research GmbH shall be restricted to gross negligence and willful misconduct. Only in case of failure in essential tasks, M.M.Warburg & CO KGaA and Warburg Research GmbH are liable for normal negligence. In any case, the liability of M.M.Warburg & CO KGaA and Warburg Research GmbH is limited to typical, expectable damages and the liability for any indirect damages is excluded. This research report does not constitute an offer or a solicitation of an offer for the purchase or sale of any security. Partners, directors or employees of M.M.Warburg & CO KGaA or Warburg Research GmbH may serve on the board of directors of companies mentioned in a report. Opinions expressed in this report are subject to change without notice. All rights reserved.
The Sensortechnics group which was recently acquired from Augusta Technologie has been consolidated since October 2011 and should have contributed ca. EUR 14m to sales. With that organic sales growth of First Sensor should have been ca. 3% in Q4 (estimates Warburg Research). The deviation from the estimates coincides with a weaker economy in Q4.
Non-recurring expenses burden: the company expects EBITA 2011 to amount to EUR 5.5m adjusted by non-recurring expenses. Non-recurring expenses particularly include transaction costs in relation to the acquisition of the Sensortechnics group und relocation of the production plant of the subsidiary First Sensor Technology GmbH into the main plant in Berlin Oberschönweide. With it the operating result came in below expectations (WRe: EUR 6.2m).
Guidance confirms estimates overall: besides the main figures 2011 First Sensor has published an outlook for 2012. The company expects sales of EUR 118-122m as well as an EBITA of EUR 13-15m. While the sales guidance comes in slightly above our estimates, our expected EBITA of EUR 14.7m lies within First Sensor's target. Estimates 2012ff. remain unchanged.
Shortly after publishing figures the company also announced that Dr. Ingo Stein would retire from the Executive Board at the end of the current quarter for personal reasons. He will be replaced by Joachim Wimmer who most recently worked as the general manager of an international manufacturer of electronic products with annual sales of ca. EUR 100m and 750 employees.
In view of an upside of ca. 25% to the DCF-based PT of EUR 11.50 the rating remains Buy.
Company background
First Sensor develops customer-specific sensor solutions. The value creation covers the entire value chain from sensor component (chip) up to a complete system. The products are manufactured in small to large-sized series. First Sensor is taking a worldwide leading position in tailor-made solutions.
The sensors (e.g. optical sensors, pressure and flow sensors, target angle and position sensors) and sensor systems developed and produced by First Sensor are necessary for the operation of various end products and, therefore, represent an integral part of them. The verticals addressed by the company are life science, industrial applications, mobility, security as well as aerospace.
Competitive quality
Sensors and sensor solutions developed and produced by First Sensor for specific problems enable customers to open up application fields, which would not be covered by standard sensors made by mass producers, enabling First Sensor's customer to differentiate from others. On top of this, the costs for the sensors only represent a small fraction of the costs of the customer's end product which strengthens First Sensor's negotiating position.
Their excellent competitive position is strongly defendable as...
...large sensor manufacturers focus on standard products and differentiate via economies of scale. Thus, the market niches addressed by First Sensor are usually not big enough for the large players.
...much smaller players in the strongly fragmented sensor market do not have access to the attractive markets and customers.
This is the result of the interaction between many different factors such as...
...the product manufacturers' high dependency on sensor suppliers which leads to high demand with respect to the supplier's solid financial situation.
...the know how in sensor technology, which has been gained over many years and is maintained by considerable expenses for R&D (approx. 10% of sales p.a).
...the CAPEX requirements that cannot be denied as well as...
...the ability to organise production processes efficiently and last but not least...
...the continuously growing relations with key players of important industries.
All of this not only represents important pillars of the high competitive quality but also barriers to market entry for potential competitors.
Legal Disclaimer
This research report was prepared by the Warburg Research GmbH, a subsidiary of the M.M.Warburg & CO KGaA. It contains selected information and does not purport to be complete. The report bases on publicly available information and data ("the Information") believed to be accurate and complete. Warburg Research GmbH neither does examine the Information to be accurate and complete, nor guarantees its accuracy and completeness. Possible errors or incompleteness of the Information do not constitute grounds for liability, neither with regard to indirect nor to direct or consequential damages. In particular, neither M.M.Warburg & CO KGaA nor the Warburg Research GmbH are liable for the statements, plans or other details contained in the Information concerning the examined companies, their associated companies, strategies, economic situations, market and competitive situations, regulatory environment, etc. Although due care has been taken in compiling this research report, it cannot be excluded that it is incomplete or contains errors. M.M.Warburg & CO KGaA and Warburg Research GmbH, their shareholders and employees are not liable for the accuracy and completeness of the statements, estimations and the conclusions derived from the Information contained in this document. Provided any research report is being transmitted in connection with an existing contractual relationship, i.e. financial advisory or similar services, the liability of M.M.Warburg & CO KGaA and Warburg Research GmbH shall be restricted to gross negligence and willful misconduct. Only in case of failure in essential tasks, M.M.Warburg & CO KGaA and Warburg Research GmbH are liable for normal negligence. In any case, the liability of M.M.Warburg & CO KGaA and Warburg Research GmbH is limited to typical, expectable damages and the liability for any indirect damages is excluded. This research report does not constitute an offer or a solicitation of an offer for the purchase or sale of any security. Partners, directors or employees of M.M.Warburg & CO KGaA or Warburg Research GmbH may serve on the board of directors of companies mentioned in a report. Opinions expressed in this report are subject to change without notice. All rights reserved.
