Amplifon, an Italian hearing aids manufacturer, announced a downward revision in its recurring core profit guidance for the year on Monday. The firm now expects its EBITDA for 2023 to be approximately €550 million ($582.34 million), a reduction from the initial forecast of between €570-585 million. The revision is attributed to softer demand in Europe and global political and economic instability. Despite regional conflicts, Amplifon's Q3 recurring EBITDA marginally increased to €109.8 million from €109.4 million last year. The company's 25 Israeli outlets contributed about 1% to consolidated revenues.
AVTECH's Q3 results slightly below expectations, potential incremental revenue seen for 2024
In other corporate news, AVTECH's Q3 2023 results came in slightly below expectations. However, the current run-rate suggests a potential incremental revenue of SEK3.6m for 2024, representing a 9.5% conversion of the pipeline. Net sales were SEK7.5m with an EBITDA of SEK4.2m, marking deviations of -5% and -14% respectively. The company has secured cSEK20m (67% of the current run rate) in annual sales until 2025-2026.
The company's pipeline consists of approximately 1,500 aircraft that are either trialed or scheduled to be trialed in 2023-2024 with a total sales potential estimated between SEK29m-46m. The current annual EBIT run rate implies an EV/EBIT of 13.3x, significantly below AVTECH’s historical median EV/EBIT NTM valuation of 17.8x, suggesting a significant upside risk with higher-than-expected pipeline conversion.
New contracts with Southwest and Volotea primarily drove sales growth. Additionally, the USDSEK exchange rate advanced about 3% against the SEK sequentially. Volaris tested AVTECH’s ClearPath and Aventus services, realizing an average fuel saving of 16.7kg per flight. This translates to an annual saving of approximately 3,150 tonnes of aviation fuel and roughly 9,950 tonnes of reduction in carbon dioxide emissions.
The company's EBITDA margin showed strong scalability at 56%, although slightly behind the estimate. Operating expenses (OPEX) were slightly ahead of estimates with a deviation of 15%. As new agreements are announced, shares are expected to re-rate to its historical median. AVTECH currently trades at a premium of 62-70% on EV/S 2023e-2025e and a 20-65% premium on EV/EBITDA. The base case implies an EV/S of 4.0x to 5.9x and an EV/EBITDA of 8.9x to 18.5x for 2023e-2025e but it trades at a c40% discount to its median NTM EV/EBIT.
InvestingPro Insights
Amplifon's market performance and financials show a mixed bag. According to InvestingPro's real-time data, the company has a market cap of $31.63 billion and a P/E ratio of 12.33, which is relatively low compared to its industry peers. The company's revenue for the last twelve months as of Q3 2023 stands at $15.65 billion, having grown by 8.82%. The company's gross profit for the same period is $8.63 billion, representing a gross profit margin of 55.1%.
InvestingPro Tips indicate that Amplifon exhibits high earnings quality, with free cash flow exceeding net income. This strong earnings position should support the company's ability to continue dividend payments. The company has also been able to consistently increase its earnings per share and has raised its dividend for three consecutive years. However, it's worth noting that the company's revenue growth has been slowing down recently.
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