Day of passion in Piazza Affari for Moncler, which on Monday released the 2019 accounts with the stock exchange closed. Although the data was higher than expected, the stock was submerged in sales on Tuesday morning: immediately after the opening, there was a suspension due to excess volatility with a drop of more than 4%, which then partially returned.
Mid morning Moncler shares they drop 2,7%, to 38,66, positioning themselves at the bottom of the Ftse Mib. On the other hand, the share still travels at high levels, given that in mid-January it returned close to the all-time high of last December at 43,61 euros.
The current distrust of investors is caused by the negative consequences – foreseeable but not yet quantifiable – that the coronavirus epidemic in China will produce on the accounts of the company, which is particularly exposed to the Dragon market.
The problem, moreover, is common to most luxury companies: in the same minutes, Salvatore Ferragamo it drops 1,18%, to 16,26 euros, and is the second worst stock on the Ftse Mib, which is up 0,3%.
With regard to the budget released by Moncler, the company closed 2019 with a net financial position of 662,6 million, up from 450,1 million as at 31 December 2018. Net working capital reached 128,2 million, up from 103,2 million recorded at the end of the previous year. Furthermore, during 2019, net investments were made for €120,8 million, up compared to €91,5 million in 2018. Free cash flow instead decreased from €362 to €340,0 million. Fourth quarter revenue it stood at 635 million, up 16%, against expectations of +13,8%. Over estimates too the ebitda in the second half (431 million, +15%) e the net profit of the same period (289 million, +7%).
Moncler's board of directors will propose to the shareholders a dividend of €0,55, for a total of 138,8 million, with a payout ratio of 38% on the consolidated net profit.
Remo ruffini, number one of Moncler, opened the conference call with analysts by saying that the unexpected scenario of the last few days that has opened up after the spread of the coronavirus "makes it impossible to make predictions".
The 2019 numbers "are higher than expected - comment the Equita analysts - but the impacts of the coronavirus are heavy and cost actions have already been started".
Management spoke of a great start to the year, but 23 out of 14 stores in China have been closed since January 35, while others see traffic drops by 80% and even outside of China there has been a slowdown, especially in neighboring regions. As a countermeasure, retail and marketing projects in China were postponed and the renegotiation of the guaranteed minimum rents and the reallocation of buying to other areas began.
“Moncler believes it can protect percentage margins (about 34-35%) up to a drop in turnover of 100 million”, underline the analysts. The best numbers of 2019, continues Equita, "would have justified an increase in estimates (turnover +1% and profit +4%) but we incorporate the impact of the epidemic (-4% turnover, -7% net profit, with a margin of 35,3% to 34,4%)”. Forecasts on net profit are reduced by 3% to 351 million (4% below the consensus), while the target passes to 44,7 euros (from 45,7). “We think that the exit strength from 2019 and the flexibility of the company will allow Moncler to suffer the contingent difficulties related to the coronavirus less than the sector”, concludes Equita.
