Banco Sabadell: 4Q’23 results slightly better than expected 4Q’23 EBITDA slightly better than expected ($1,266m versus $1,233m BS(e) and $1,200m consensus), although contracting versus 3Q’23 due to a lower average price, something we see in all its geographies. Deliveries fell at the aggregate level compared to Q3’23, although in North America (34% EBITDA) they rebounded slightly (+2.4%), which anticipates some improvement. The lower part of the income statement is impacted by impairments and losses linked to Kazakhstan (-$2,431m) and Acciaierie d’Italia (-$1,405m), but given that these were known issues (and with no impact on cash) this should not generate instability.
On the other hand, net debt remains at exceptionally low levels ($2,898m, 0.4x EBITDA) thanks mainly to the recovery in working capital (+$2,470m in line with 4Q’22), which should boost the company’s investments in an environment of recovery.
At the guidance level, they are starting to see signs of recovery with an aggregate apparent consumption ex-China of +3/+4% once the phase of destocking seems to be coming to an end. At a general level, they expect growth in all regions, which together with a more favourable price environment could boost the stock (-17.6% against Ibex35 in the last year). BUY. P.O. €37.00/share (potential +46.85%).
Revenue 4Q’23 vs. 4Q’22:
Sales: $14,552m (-13.8% vs -14.8% BS(e));
EBITDA: $1,266m (+0.6% vs. -2.0% BS(e) and -4.6% consensus);
EAT: -$2,966.0m ($261.0m in 2022 vs. -1,585.0m BS(e) and -1,645.0m consensus);
Revenue 2023 vs. 2022:
Sales: $68,275m (-14.5% vs -14.7% BS(e));
EBITDA: $7,558m (-46.6% vs -46.9% BS(e) and -47.1% consensus);
EAT: $919.0m (-90.1% vs -75.3% BS(e) and -75.9% consensus).
