Original-Research: Flughafen Wien AG - from NuWays AG
Classification of NuWays AG to Flughafen Wien AG

Company Name: Flughafen Wien AG
ISIN: AT00000VIE62

Reason for the research: Update
Recommendation: HOLD
from: 29.02.2024
Target price: 57.00
Target price on sight of: 12 Monaten
Last rating change: 
Analyst: Henry Wendisch

Record FY'23, dividend hike and better outlook; chg. est. & PT  
Topic: Yesterday, FWAG released FY'23 prelims which came in better than expected. Moreover, management proposed a nearly doubled dividend and hinted towards a conservative passenger guidance.
 
Sales remained elevated and showed strong growth of 26% yoy to € 232m in Q4 (FY'23: € 932m, +35% yoy) thanks to ongoing strong growth of passenger numbers. Main contributions to the strong sales growth came from the segments Airport (+29% yoy; 46% of sales) as well as Handling & Security (+33% yoy; 19% of sales), but also Malta (+22% yoy; 11% of sales). See p. 2 for details.
 
Albeit being seasonally softer than Q2/Q3, Q4 EBITDA came in better than expected at € 61m, +53% yoy (FY'23: € 393m, + 33% yoy) thanks to the better than expected top line. On the other side, EBITDA margins (Q4: 26.2%, + 4.4pp yoy; FY23: 41.8%, +0.2pp yoy) seem to have reached cruising altitude, as additional OPEX (Q4: + 21% yoy; FY'23: +32% yoy) are also incurred from passenger growth.
 
In Q4, EPS grew less strong compared to EBITDA at € 0.13 (+16% yoy; eNuW: € 0.03), mainly due to the € 10m oneoff stemming from the penalty for the early debt repayment. However, on a FY basis, EPS grew much stronger than EBITDA to € 2.01 (+56% yoy; eNuW: € 1.90) due to constant D&A (+0.6% yoy) as well as an improved financial result (€ -4m vs. € -9.3m in FY'22).  
Consequently, FWAG announced to substantially increase the dividend to € 1.32 per share (+70% yoy; eNuW: € 1.33 DPS), implying a pay-out ratio of 66% (eNuW: 70%) and dividend yield of 2.6%.
 
FWAG's strong cash generation (FY'23 CFO: € 385m, 204% cash conversion) as well as its strong net cash position of € 362m per Y/E'23 should continue to cover dividend payments (€ 111m) and CAPEX needs (€ 217m), while still generating some excess cash of € 44m during FY'24e, further improving the net cash position to € 400 by Y/E'24e (eNuW). Additionally, this should also support EPS growth, as the interest received (eNuW: € 18m in FY'24e), should also improve the financial result from € -4m in FY'23 to € 15.6m in FY'24e.
 
Better outlook than previously expected: While management remained cautious regarding the FY'24e outlook, it highlighted during the CC, that based on most recent booking data by airlines and travel agencies, the coming summer looks set to be even better than last year. The current summer schedule already shows up to 60 airlines featuring about 190 destinations in 67 countries. Given that, the current guidance of c. 39m (+2.7% yoy) passengers for FY'24e already seems conservative (given that no major conflicts intensify, negatively affecting air travel), whereas our new estimate of 39.8m (eNuW old: 39.2m) seems more probable now. Moreover, current tailwinds stemming from cargo, should also support promising growth in FY'24e.
 
As a result, we also raise our sales estimates for FY'24e and beyond. Consequently, our estimates exceed the current guidance of c. € 970m sales (eNuW: € 998m), more than € 390m EBITDA (eNuW: € 420m) and more than € 210m net income before minorities (eNuW: € 220m).
 
As we roll over valuation to FY'24e and also reflect the increased estimates in our DCF model (Beta: 1.4, WACC: 8.8%, risk-free rate: 2.5%, equity risk premium: 4.5%), we increase our PT to € 57.00 (old: € 52.00), but nevertheless recommend shareholders to HOLD onto FWAG, as we do not expect significant share price hikes (only 15% upside to our fair equity value). For new investors, there is a lot to like about FWAG, except its current share price.

You can download the research here:
http://www.more-ir.de/d/29025.pdf
For additional information visit our website
www.nuways-ag.com/research.

Contact for questions
Die Analyse oder weiterführende Informationen zu dieser können Sie hier downloaden www.nuways-ag.com/research.
Kontakt für Rückfragen
NuWays AG - Equity Research
Web: www.nuways-ag.com
Email: research@nuways-ag.com
LinkedIn: https://www.linkedin.com/company/nuwaysag Adresse: Mittelweg 16-17, 20148 Hamburg, Germany
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Diese Meldung ist keine Anlageberatung oder Aufforderung zum Abschluss bestimmter Börsengeschäfte. Offenlegung möglicher Interessenskonflikte nach § 85 WpHG beim oben analysierten Unternehmen befinden sich in der vollständigen Analyse. ++++++++++

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