Almirall: recommendation raised from Sell to Neutral

AlmirallAlmirall

Bankinter | Almirall Q1’18 results were better than expected, with sales of 189.3 million euros (-0.1%); Ebitda of 58 million (+5.4%); Net Attributable Profit of 30.9 million (+57.1%) and net debt of 150 million euros. Finally, the DN/PN ratio has reached 7.4%.

The most relevant factor in these results is that it seems the problems with its subsidiary in the US have now been resolved. It was the focus of all the problems in 2017, especially the profit warning issued in July. For 2018, the company expects medium-high digit sales’ growth (at constant exchange rates), with Ebitda increasing 20%. Almirall has acknowledged that possible merger and acquisition deals as well as the purchase of licences remain a priority. Its low level of debt will help it handle these growth opportunities, along with its corporate strategy, in particular in Europe and the US. In light of the company’s improved visibility we are revising our recommendation upwards from Sell to Neutral.