MATELAN Research - ISRA VISION AG

ISRA VISION In-Depth Report
FINANCIAL ANALYSIS
Conservative growth …
… and margin
assumptions
- 29 -
DRAWING A CONSERVATIVE GROWTH SCENARIO
On the basis of the earlier described market analysis we have updated our
financial forecasts for ISRA. The chart below illustrates how ISRA’s
positioning in the different customer industries adds up to the group’s sales
growth. We had already pointed out that we work on rather conservative
assumptions for ISRA’s growth within its different industry segments. The
chart below now illustrates that we price-in a material slowing of growth over
the coming years. For 2012, we still anticipate a double-digit growth rate on
the back of ISRA’s strong order backlog and the late cyclical nature of the
industry. A potential economic slowdown should, however, show in
subsequent years. We still expect ISRA to outgrow the global economy but
staying conservative we only work with mid single-digit rates. Overall, we still
arrive at a CAGR of 8.6% for the period 2009/10 to 2014/15e and remain
below management’s target to reach more than EUR100m in sales in the
medium term. It must be mentioned that these assumptions not only leave
room for upward revisions, they are also based purely on organic growth. We
had already pointed out that there is an opportunity to consolidate the market
further.
Development of net sales
120
100
80
60
40
20
0
09/10 10/11e 11/12e 12/13e 13/14e 14/15e
Source: MATELAN Research, in EURm
18%
16%
14%
12%
10%
8%
6%
4%
2%
0%
Metall Paper Print Plastics Solar Glass Automotive Overall growth (r.s.)
The following picture gives additional evidence of the conservative nature of
our model. Despite a continuous increase in sales and ISRA’s ongoing
optimisation efforts, we assume just a slight margin increase over the period
2010/2011e to 2014/2015e on gross profit as well as on EBIT level to 60%
and 19.8%, respectively. As already pointed out in the valuation part of this
report, we employ even lower rates for our terminal value calculation.