(Finance) – Equity has increased a 33.8 euros per share (from the previous 28.9 euros) the target price on De’ Longhia group listed on Euronext Milan and active in the small household appliance sector dedicated to the world of coffee, cooking, air conditioning and home care, confirming the recommendation “Buy” on the title, after the company announced the business combination operation between
Eversys (professional coffee, 100% stake in De’ Longhi) and La Marzocco (professional coffee, 63% stake in De’ Longhi Industrial which holds 54% of De’ Longhi) for the creation of a hub of global importance in the coffee segment high-end professional coffee.
“We like the deal and it makes a lot of sense“, comment the analysts, who underline some factors: La Marzocco is a unique/iconic company with De’ Longhi increasing exposure to the interesting business of professional coffee (we calculate that the 2023 EBITDA pro-quota of professional coffee on the total steps from 7% to 12%) that it presents high margins (19% EBIT margin vs 10% of the consumer business) e interesting growth prospects (market expected to grow +5%/+10% in the next few years); De’ Longhi acquires control of La Marzocco managing the potential conflict of interest; La Marzocco, Eversys and De’ Longhi’s consumer coffee business are complementary (different price ranges/different technologies).
Equita calculates that investing 340 million euros euros De’ Longhi consolidates (on 2024 PF) over 250 million euros in sales (+8/9%), over 60 million euros in Adj. EBITDA (+13/14%) and over 13 million euros in profits (mid-single digit impact post a few million higher net financial charges) without currently incorporating any synergies. De’ Longhi improves consolidated margins by +70bps.
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