Eckert & Ziegler Strahlen und Medizintechnik : Hauck & Aufhäuser

Eckert & Ziegler AG

Germany - High-tech Engineering

Buy (old: Buy)				10-June-21




Price target: EUR 120.50 (old: EUR 120.50)			Aliaksandr Halitsa
				Analyst
Price:	EUR 95.35	Next result:	Q2 12.08.2021

Bloomberg:	EUZ GR	Market cap:	EUR 1,918.0 m	aliaksandr.halitsa@ha-ib.de



Reuters:	EUZG.DE	Enterprise Value:	EUR 1,835.6 m	Tel.: +49 40 414 3885 83

Radioligand therapies to open up a new era of solid tumor treatments

At this point, there's no doubt that the so-calledradioligand therapies (RLT) - that use tumor specific markers (i.e. ligands) to guide radioactive isotopes (e.g. Lu-177 or Y-90) to the area of cancers - is a revolutionary discovery that is seen to improve patient outcomes across different types of tumors (next page).

Following Lutathera's approval in 2018 for midgut neuroendocrine tumors (NETs) - which already generates c. € 500m annual sales - Novartis reported positive Phase 3 results with radioligand therapy for prostate cancer (177Lu-PSMA-617) with regulatory submission scheduled for H2 '21. Convinced by the benefits of the radioligand technology in oncology, Novartis is making a strong commitment to this space.
During the American Society of Clinical Oncology's Annual Meeting, Novartis was in the spotlight with prostate cancer treatment and the radioligand technology in general, which according to CEO "will open up a whole new era of solid tumor treatments".
Through a number of licensing deals - including iTheranostics and Artios - Novartis has built a broad portfolio of compounds that should expand the radioligand concept into a range of other solid tumors. It is currently working on the next generation of RLT with more than 15 active research programs.
Bayer follows suit in harnessing radiation for cancer treatment. With the recent acquisitions of Noria and PSMA Therapeutics, Bayer broadened its existing oncology portfolio of targeted alpha therapies, which also use tumor specific compounds to deliver radiation to the tumor site. This includes targeted thorium conjugates (next page) where EUZ provides the infrastructure for handling, manufacture and distribution of the TTCs for clinical trials.

Thanks to its broad expertise in supplying mission-critical isotopes for this type of cancer treatments, EUZ is seen to strongly benefit from the market growth of 40% CAGR from c. $ 1bn in 2019 to > $ 20bn in 2030E.

Furthermore, EUZ is carrying a significant upside optionality through its 83% stake in PentixaPharm who develops a highly promising RLT with therapeutic potential in a range of hematologic and solid cancers. In our view, this could become a highly sought-after asset, just like Lutathera or 177Lu-PSMA.

BUY with an unchanged of PT € 120.5 pbased on SOTP.

Y/E 31.12 (EUR m)	2017	2018	2019	2020	2021E	2022E	2023E
Sales	138.6	168.7	178.5	176.1	183.6	226.3	281.3
Sales growth	16 %	22 %	6 %	-1 %	4 %	23 %	24 %
EBITDA	26.6	32.0	43.1	44.8	50.5	66.6	90.5
EBIT	18.0	23.4	32.1	33.7	39.4	55.5	80.5
Net income	14.7	16.1	22.0	22.9	26.9	38.3	55.9

Net debt	-56.0	-54.1	-78.9	-88.6	-96.9	-117.8	-146.2
Net gearing	-49.8 % -44.1 %	-57.1 %	-59.9 %	-59.6 %	-61.3 % -62.4 %
Net Debt/EBITDA	0.0	0.0	0.0	0.0	0.0	0.0	0.0
EPS pro forma	0.57	3.12	1.06	1.04	1.31	1.86	2.72
CPS	0.89	0.64	1.46	1.28	1.02	1.32	1.88
DPS	0.80	1.20	0.35	0.35	0.44	0.62	0.90
Dividend yield	0.9 %	1.3 %	0.4 %	0.4 %	0.5 %	0.7 %	1.0 %
Gross profit margin	46.1 %	44.1 %	48.8 %	49.1 %	50.5 %	52.5 %	53.1 %
EBITDA margin	19.2 %	18.9 %	24.2 %	25.4 %	27.5 %	29.4 %	32.2 %
EBIT margin	13.0 %	13.9 %	18.0 %	19.1 %	21.5 %	24.5 %	28.6 %
ROCE	13.8 %	17.6 %	22.5 %	22.9 %	26.2 %	26.2 %	27.4 %
EV/sales	13.5	11.1	10.3	10.5	10.0	8.0	6.4
EV/EBITDA	70.2	58.5	42.8	41.2	36.4	27.2	19.7
EV/EBIT	104.0	80.0	57.6	54.7	46.6	32.7	22.2
PER	163.7	115.2	85.3	86.9	68.5	47.4	34.3
Adjusted FCF yield	0.7 %	0.9 %	1.3 %	1.3 %	1.6 %	2.2 %	3.3 %

Source: Company data, Hauck & Aufhäuser Close price as of: 09.06.2021

Source: Company data, Hauck & Aufhäuser

High/low 52 weeks:	93.90 / 32.75
Price/Book Ratio:	11.9
Relative performance (SDAX):
3 months			52.3 %
6 months			96.6 %
12 months		133.3 %
Changes in estimates
		Sales	EBIT	EPS
2021	old:	183.6	39.4	1.31
∆	-		-	-

2022	old:	226.3	55.5	1.86
∆	-		-	-

2023	old:	281.3	80.5	2.72
∆	-		-	-

Key share data:
Number of shares: (in m pcs)	20.6
Authorised capital: (in € m)	0.6
Book value per share: (in €)	7.9
Ø trading volume: (12 months)	20,453

Major shareholders:
Free float	67.8 %
Founders	32.2 %
Eckert & Ziegler AG	0.1 %

Company description:

Produces and markets a wide range of industrial and medical applications featuring radioactive isotopes, including prostate seed implants, calibration standards and radiation afterloaders.

Please refer to important disclosures at the end of the report

Eckert & Ziegler AG

Radioligand therapy

Source: POINT Biopharma

2	Hauck & Aufhäuser Privatbankiers AG

Eckert & Ziegler AG

Financials

Profit and loss (EUR m)	2017	2018	2019	2020	2021E	2022E	2023E

Sales	138.6	168.7	178.5	176.1	183.6	226.3	281.3
Sales growth	15.7 %	21.7 %	5.8 %	-1.3 %	4.2 %	23.3 %	24.3 %
Cost of sales	74.8	94.4	91.5	89.6	90.9	107.5	131.9
Gross profit	63.9	74.3	87.0	86.5	92.7	118.8	149.3
Sales and marketing	20.0	23.3	22.9	21.7	22.8	26.0	28.1
General and administration	23.9	26.9	27.6	28.1	27.9	33.5	38.3
Research and development	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Other operating income	3.8	3.5	2.8	5.8	5.8	5.8	5.8
Other operating expenses	4.5	4.5	7.1	7.2	8.4	9.5	8.2
Unusual or infrequent items	-1.2	0.2	-0.2	-1.6	0.0	0.0	0.0
EBITDA	26.6	32.0	43.1	44.8	50.5	66.6	90.5
Depreciation	8.6	8.6	11.1	11.1	11.1	11.1	10.0
EBITA	18.0	23.4	32.1	33.7	39.4	55.5	80.5
Amortisation of goodwill	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Amortisation of intangible assets	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Impairment charges	0.0	0.0	0.0	0.0	0.0	0.0	0.0

EBIT (inc revaluation net)	18.0	23.4	32.1	33.7	39.4	55.5	80.5
Interest income	0.3	0.2	0.3	0.2	0.2	0.2	0.2
Interest expenses	0.9	0.7	1.1	1.2	1.2	1.2	1.2
Other financial result	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Financial result	-0.6	-0.5	-0.8	-0.9	-0.9	-0.9	-0.9
Recurring pretax income from continuing operations	17.3	22.9	31.2	32.7	38.4	54.6	79.6
Extraordinary income/loss	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Earnings before taxes	17.3	22.9	31.2	32.7	38.4	54.6	79.6
Taxes	5.3	6.0	8.8	9.6	11.3	16.1	23.4
Net income from continuing operations	12.0	16.9	22.5	23.1	27.1	38.5	56.2
Result from discontinued operations (net of tax)	3.1	0.0	0.0	0.0	0.0	0.0	0.0

Net income	15.1	16.9	22.5	23.1	27.1	38.5	56.2
Minority interest	0.4	0.8	0.5	0.2	0.2	0.2	0.2
Net profit (reported)	14.7	16.1	22.0	22.9	26.9	38.3	55.9
Average number of shares	20.5	20.5	20.5	20.6	20.6	20.6	20.6

EPS reported	0.72	0.79	1.07	1.11	1.31	1.86	2.72

Profit and loss (common size)	2017	2018	2019	2020	2021E	2022E	2023E

Sales	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %
Cost of sales	53.9 %	55.9 %	51.2 %	50.9 %	49.5 %	47.5 %	46.9 %
Gross profit	46.1 %	44.1 %	48.8 %	49.1 %	50.5 %	52.5 %	53.1 %
Sales and marketing	14.4 %	13.8 %	12.8 %	12.3 %	12.4 %	11.5 %	10.0 %
General and administration	17.3 %	15.9 %	15.4 %	15.9 %	15.2 %	14.8 %	13.6 %
Research and development	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Other operating income	2.7 %	2.1 %	1.6 %	3.3 %	3.1 %	2.5 %	2.0 %
Other operating expenses	3.2 %	2.6 %	4.0 %	4.1 %	4.6 %	4.2 %	2.9 %
Unusual or infrequent items	neg.	0.1 %	neg.	neg.	0.0 %	0.0 %	0.0 %

EBITDA	19.2 %	18.9 %	24.2 %	25.4 %	27.5 %	29.4 %	32.2 %
Depreciation	6.2 %	5.1 %	6.2 %	6.3 %	6.0 %	4.9 %	3.6 %
EBITA	13.0 %	13.9 %	18.0 %	19.1 %	21.5 %	24.5 %	28.6 %
Amortisation of goodwill	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Amortisation of intangible assets	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Impairment charges	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
EBIT (inc revaluation net)	13.0 %	13.9 %	18.0 %	19.1 %	21.5 %	24.5 %	28.6 %
Interest income	0.2 %	0.1 %	0.2 %	0.1 %	0.1 %	0.1 %	0.1 %
Interest expenses	0.6 %	0.4 %	0.6 %	0.7 %	0.6 %	0.5 %	0.4 %
Other financial result	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Financial result	neg.	neg.	neg.	neg.	neg.	neg.	neg.
Recurring pretax income from continuing operations	12.5 %	13.6 %	17.5 %	18.6 %	20.9 %	24.1 %	28.3 %
Extraordinary income/loss	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %

Earnings before taxes	12.5 %	13.6 %	17.5 %	18.6 %	20.9 %	24.1 %	28.3 %
Tax rate	30.7 %	26.2 %	28.1 %	29.4 %	29.4 %	29.4 %	29.4 %
Net income from continuing operations	8.7 %	10.0 %	12.6 %	13.1 %	14.8 %	17.0 %	20.0 %
Result from discontinued operations (net of tax)	2.2 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Net income	10.9 %	10.0 %	12.6 %	13.1 %	14.8 %	17.0 %	20.0 %
Minority interest	0.3 %	0.4 %	0.3 %	0.1 %	0.1 %	0.1 %	0.1 %

Net profit (reported)	10.6 %	9.6 %	12.3 %	13.0 %	14.7 %	16.9 %	19.9 %

Source: Company data, Hauck & Aufhäuser

3	Hauck & Aufhäuser Privatbankiers AG

Eckert & Ziegler AG

Balance sheet (EUR m)	2017	2018	2019	2020	2021E	2022E	2023E

Intangible assets	51.4	52.5	51.9	41.4	41.4	41.4	41.4
Property, plant and equipment	33.8	36.9	40.0	38.0	41.9	38.2	34.7
Financial assets	3.2	3.5	5.2	8.0	8.0	8.0	8.0

FIXED ASSETS	88.5	93.0	97.1	87.4	91.3	87.6	84.1
Inventories	26.8	28.8	31.2	33.6	37.5	43.5	54.1
Accounts receivable	24.3	28.3	29.5	28.2	32.2	39.7	49.3
Other current assets	10.9	14.9	26.6	42.3	42.3	42.3	42.3
Liquid assets	57.7	54.2	78.9	88.6	96.9	117.8	146.2
Deferred taxes	8.8	9.9	10.9	11.9	0.0	0.0	0.0
Deferred charges and prepaid expenses	0.0	0.0	0.0	0.0	0.0	0.0	0.0
CURRENT ASSETS	128.5	136.1	177.1	204.6	208.8	243.3	291.9
TOTAL ASSETS	217.0	229.1	274.2	292.0	300.2	330.9	375.9
SHAREHOLDERS EQUITY	112.3	122.6	138.2	147.8	162.6	192.0	234.1
MINORITY INTEREST	5.2	1.2	1.2	1.1	1.1	0.0	0.0
Long-term debt	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Provisions for pensions and similar obligations	11.7	11.4	13.5	14.4	14.4	14.4	14.4
Other provisions	48.7	55.1	66.4	70.5	64.8	66.1	67.4

Non-current liabilities	60.4	66.5	79.9	84.9	79.3	80.6	81.9
short-term liabilities to banks	1.7	0.0	0.0	0.0	0.0	0.0	0.0
Accounts payable	4.5	6.5	4.5	5.0	6.2	7.4	9.0
Advance payments received on orders	5.9	4.1	12.0	8.6	8.6	8.6	8.6
Other liabilities (incl. from lease and rental contracts)	17.3	17.4	35.6	42.3	42.3	42.3	42.3
Deferred taxes	6.4	7.1	2.8	2.2	0.0	0.0	0.0
Deferred income	3.3	3.6	0.0	0.0	0.0	0.0	0.0
Current liabilities	39.1	38.8	54.9	58.2	57.2	58.3	60.0
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	217.0	229.1	274.2	292.0	300.2	330.9	375.9

Balance sheet (common size)	2017	2018	2019	2020	2021E	2022E	2023E

Intangible assets	23.7 %	22.9 %	18.9 %	14.2 %	13.8 %	12.5 %	11.0 %
Property, plant and equipment	15.6 %	16.1 %	14.6 %	13.0 %	14.0 %	11.5 %	9.2 %
Financial assets	1.5 %	1.5 %	1.9 %	2.7 %	2.7 %	2.4 %	2.1 %

FIXED ASSETS	40.8 %	40.6 %	35.4 %	29.9 %	30.4 %	26.5 %	22.4 %
Inventories	12.3 %	12.6 %	11.4 %	11.5 %	12.5 %	13.2 %	14.4 %
Accounts receivable	11.2 %	12.4 %	10.8 %	9.7 %	10.7 %	12.0 %	13.1 %
Other current assets	5.0 %	6.5 %	9.7 %	14.5 %	14.1 %	12.8 %	11.3 %
Liquid assets	26.6 %	23.7 %	28.8 %	30.3 %	32.3 %	35.6 %	38.9 %
Deferred taxes	4.1 %	4.3 %	4.0 %	4.1 %	0.0 %	0.0 %	0.0 %
Deferred charges and prepaid expenses	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
CURRENT ASSETS	59.2 %	59.4 %	64.6 %	70.1 %	69.6 %	73.5 %	77.6 %
TOTAL ASSETS	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %

SHAREHOLDERS EQUITY	51.8 %	53.5 %	50.4 %	50.6 %	54.2 %	58.0 %	62.3 %
MINORITY INTEREST	2.4 %	0.5 %	0.5 %	0.4 %	0.4 %	0.0 %	0.0 %
Long-term debt	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Provisions for pensions and similar obligations	5.4 %	5.0 %	4.9 %	4.9 %	4.8 %	4.4 %	3.8 %
Other provisions	22.4 %	24.0 %	24.2 %	24.1 %	21.6 %	20.0 %	17.9 %
Non-current liabilities	27.8 %	29.0 %	29.1 %	29.1 %	26.4 %	24.4 %	21.8 %
short-term liabilities to banks	0.8 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %
Accounts payable	2.1 %	2.8 %	1.6 %	1.7 %	2.1 %	2.2 %	2.4 %
Advance payments received on orders	2.7 %	1.8 %	4.4 %	3.0 %	2.9 %	2.6 %	2.3 %
Other liabilities (incl. from lease and rental contracts)	8.0 %	7.6 %	13.0 %	14.5 %	14.1 %	12.8 %	11.3 %
Deferred taxes	3.0 %	3.1 %	1.0 %	0.8 %	0.0 %	0.0 %	0.0 %
Deferred income	1.5 %	1.6 %	0.0 %	0.0 %	0.0 %	0.0 %	0.0 %

Current liabilities	18.0 %	16.9 %	20.0 %	19.9 %	19.1 %	17.6 %	16.0 %
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %	100.0 %

Source: Company data, Hauck & Aufhäuser

4	Hauck & Aufhäuser Privatbankiers AG

Eckert & Ziegler AG

Cash flow statement (EUR m)	2017	2018	2019	2020	2021E	2022E	2023E
Net profit/loss	15.1	16.9	22.5	23.1	27.1	38.5	56.2
Depreciation of fixed assets (incl. leases)	8.6	8.6	11.1	11.1	11.1	11.1	10.0
Amortisation of goodwill	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Amortisation of intangible assets	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Others	5.5	2.8	10.6	4.3	0.0	0.0	0.0
Cash flow from operations before changes in w/c	29.3	28.2	44.1	38.5	38.2	49.6	66.2
Increase/decrease in inventory	-1.7	0.7	-2.2	-2.4	-3.9	-6.1	-10.6
Increase/decrease in accounts receivable	-1.1	-4.0	-1.2	0.1	-4.0	-7.5	-9.6
Increase/decrease in accounts payable	-1.9	2.0	-0.4	0.5	1.2	1.1	1.7
Increase/decrease in other working capital positions	2.2	-5.7	0.0	0.0	0.0	0.0	0.0
Increase/decrease in working capital	-2.5	-7.0	-3.7	-1.7	-6.7	-12.4	-18.5

Cash flow from operating activities	26.8	21.2	40.4	36.8	31.5	37.2	47.7
CAPEX	4.2	6.1	7.3	8.9	15.0	7.3	6.5
Payments for acquisitions	5.5	2.1	0.9	0.0	0.0	0.0	0.0
Financial investments	0.5	0.0	0.0	5.4	0.0	0.0	0.0
Income from asset disposals	15.2	-2.5	2.5	0.9	0.0	0.0	0.0

Cash flow from investing activities	5.1	-10.7	-5.7	-13.3	-15.0	-7.3	-6.5
Cash flow before financing	31.9	10.5	34.7	23.4	16.5	29.9	41.2
Increase/decrease in debt position	-5.3	-1.7	-2.7	-3.0	0.0	0.0	0.0
Purchase of own shares	0.0	8.6	0.0	0.0	0.0	0.0	0.0
Capital measures	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Dividends paid	3.5	4.1	6.2	8.8	7.1	9.0	12.8
Others	-1.2	-0.2	-1.7	-1.2	0.0	0.0	0.0
Effects of exchange rate changes on cash	-0.8	0.6	0.5	-1.9	0.0	0.0	0.0
Cash flow from financing activities	-10.0	-14.6	-10.5	-13.0	-7.1	-9.0	-12.8
Increase/decrease in liquid assets	21.1	-3.5	24.7	8.6	9.4	20.9	28.4

Liquid assets at end of period	57.7	54.2	78.9	87.4	96.9	117.8	146.2

Source: Company data, Hauck & Aufhäuser

Regional split (EUR m)	2017	2018	2019	2020	2021E	2022E	2023E
Domestic	0.0	0.0	0.0	0.0	0.0	0.0	0.0
yoy change	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Rest of Europe	84.9	96.8	110.4	125.9	143.5	163.6	186.5
yoy change	14.0 %	14.0 %	14.0 %	14.0 %	14.0 %	14.0 %	14.0 %
NAFTA	53.0	60.9	70.1	80.6	92.7	106.6	122.5
yoy change	15.0 %	15.0 %	15.0 %	15.0 %	15.0 %	15.0 %	15.0 %
Asia Pacific	15.8	17.9	20.2	22.9	25.8	29.2	33.0
yoy change	13.0 %	13.0 %	13.0 %	13.0 %	13.0 %	13.0 %	13.0 %
Rest of world	-15.1	-7.0	-22.2	-53.1	-78.4	-73.0	-60.7
yoy change	neg.	neg.	neg.	neg.	neg.	neg.	neg.

TTL	138.6	168.7	178.5	176.1	183.6	226.3	281.3
yoy change	15.7 %	21.7 %	5.8 %	-1.3 %	4.2 %	23.3 %	24.3 %

Source: Company data, Hauck & Aufhäuser

5	Hauck & Aufhäuser Privatbankiers AG

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Eckert & Ziegler AG published this content on 10 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 June 2021 09:53:07 UTC.

ECKERT & ZIEGLER STRAHLEN- UND MEDIZINTECHNIK AG

Eckert & Ziegler Strahlen und Medizintechnik : Hauck & Aufhäuser

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