Ynap eye to target 2016-20 – Milano Finanza

Yoox-Net-a-Porter held tomorrow, July 6, in London the capital market day, during which all eyes will be on four key points: the confirmation of dates synergies from the merger with Net-a-Porter; details on Outlook for this year; projects developing in the current year and the medium-term target for the period 2016-2020, with the latter, according to Mediobanca analysts Securities (outperform rating and a target price of EUR 36.8 confirmed the title) , will be the main catalysts of attention.

as for the effects of the Italian group of e-commerce and British partners, management quantified the effects of the merger in 85 million euro potential annual synergies, of which 75 million in terms of EBITDA and 10 million resulting from savings on investment by 2018. “in the course of this year, is expected to reach 15-20% of the announced synergies (with an EBITDA contribution gross amounts to 11.25000000 to 15,000,000, assuming a total of 75 million of synergies in 2018, editor’s note), while in 2017 it should reach 40%, only to arrive at the total announced by 2018, “notes Mediobanca .

in detail the investments, however, the forecast for the 2015-2018 period amounted to 95 million, of which 10 million of general and administrative expenses one-time (2.5 million in 2015 and 7.5 million this year), and 85 million of capital expenditures, mainly concentrated in the current year and the next.

These investments, explain analysts Mediobanca , reserved mainly to the creation of a technological and logistics platform that can unite all the group’s online store in a kind of “global inventory”, which should favor a greater connection between the digital outlets and different markets, allowing access to the product at a greater audience and price improvement, the sell-through and margin in the retail segment.

as for the ‘outlook for the current year, analysts expect the bank’s business clarifications on the possible impact on the Brexit guidanca the company, which did not take account of the referendum on the UK’s effects, and changes in the rates of exchange rate between sterling and the euro, given that 16% of Ynap revenues is denominated in British currency.

However, “the possible decline should be more than offset by savings in the cost items expressed in pounds”, It highlights the investment bank believes that still reached reiterated the guidelines by the company in May, guidance that revenue growth next to a + 20% net of exchange rates, with a slight increase in the adjusted EBITDA margin. This, despite a weak start year, with first quarter results that showed revenue growth of 13.8% in the corresponding period.

Few innovations should come, instead, on the face of the ongoing projects d ‘opera, with the agenda of the company that is already abundantly supplied. This includes, in particular, the enrichment of the portfolio of brands with leading brands for autumn / winter and the start-up of specific activities to lead to new acquisitions and for greater involvement; the launch in the third quarter of Yoox .com for the off-season split with the adjustment of supply cabinet and the allocation of more resources in the flagship store brands with the highest potential. In this regard, the group has already notified the launch of a new partnership with Isabel Maran, from 2017, and the renewal of the one with Valentino and Armani until 2021 until 2026, with the latter the third quarter will also include Armani Exchange.

Finally, attention to the 2016-2020 target. Mediobanca , which is expressed with very similar values ​​to those indicated by the Bloomberg consensus estimate that sales of the group to reach a 17% annual compound growth rate (CAGR) 1.959000000000-3.630000000000 the euro in five years (consensus at 3,623 billion), with an EBITDA more than proportional increase from 155 million to 431 million (CAGR of 28%, consensus 433 million) and a margin of 12%. Also a lot of confidence with regard to the net, saw rise from 53 million estimated for the current year to 220 million in 2020 (CAGR of 33%). In free fall the title in square business today: the action gives 7,22% to 20,06 euro.