After the IPO that culminated on Thursday , 85% of the capital of the new listed company continues in the hands of the group, so the Acciona investor is buying the growth of the renewables division with a discount of 12% … , has against the penalty for holding that gives it its presence in businesses unrelated to energy, such as infrastructures or Bestinver
One plus one is not always equal to two, and sometimes the market values a company’s business separately more than the sum of its parts. More and more listed companies are turning to subsidiaries and spin-offs to increase the valuation of their divisions . It happened with Cellnex and Abertis , Cash and Prosegur , Línea Directa and Bankinter and this week with Acciona and its renewables firm. The jewel in the crown of the group led by the Entrecanales family landed on the Spanish stock market this Thursday with rises of 7.33% and on Friday it rose 0.9%, and is already capitalizing more than the parent company.
Now, how can the private investor make the most of the growth expected for the group in the coming years? On the one hand, after the public sale operation (IPO) that culminated on Thursday, 85% of Acciona Energía’s capital remains in the hands of the parent company, that is, of the 9.4 billion euros of the market value of the energy business , 7,990 belong to the parent company. Or what is the same, with Acciona an investor is buying the subsidiary with a discount of 12%.
Not forgetting, on the other hand, that Acciona is penalized by the aspect of a family holding company that gives it its stakes in businesses that are not related to energy (segment that contributed 70% of its ebitda to the group in 2020) such as infrastructures and the Bestinver manager, and that the market will continue to apply this discount.
Acciona Energía trades at 15.7 times per EV / ebitda compared to 9.6 times the group does
In terms of fundamentals, the renewables subsidiary trades at 15.7 times EV / ebitda (the value including debt, compared to gross profit), compared to 9.6 times those of the parent company. Likewise, the first account with a potential of 10% ??
Renta 4 gives it a target price of 33.12 euros and Bankinter values it at 31 euros ?? and a buy recommendation, compared to Acciona’s 12% path and a tip to keep. Of course, it must be remembered that the monitoring of the new listed is still too low to be able to establish fair comparisons.
Experts such as Víctor Peiro, general director of analysis at GVC Gaesco Valores, prefer to enter through Acciona, “since with the current Acciona Energía listed price, the rest of the businesses are highly undervalued, and we think they are businesses with potential such as water, sustainable mobility, infrastructures and wealth management, “he says. Regarding the renewables firm, the expert is positive about the business globally, but considers that at current prices “the company is well valued,” he adds.
Victoria Torre, Singular Bank’s head of digital offering, recalls that Acciona’s good performance in recent years has been linked to its expansion in the renewable field, an attractive dividend in a context of declining bond yields, and a certain growth profile linked to its construction and engineering activities. “The portfolio of infrastructure projects stands out, standing at all-time highs,” says Torre.
For its part, the Barclays analysis team had already been arguing that the jump to the energy market would not have a material impact on its assessment of the sum of the parts. “We assume that the proceeds of the IPO will finance the future organic growth of the group increasing the interest of minorities”, they point out in their latest report, also raising the earnings per share (EPS) of the parent company by 10% by 2021 to 6, 26 euros.
“We think that in the current environment of high energy prices , it is likely that Acciona will take advantage of the increase in energy prices through its 20% commercial exposure,” they detail. On the contrary, they reduced their EPS by 3% by 2022 due to “the improvement of non-energy activities”.
Financial position and dividend
In its strategic plan, the renewables subsidiary plans to develop 9 gigawatts (GW) of renewable power until 2025, to jump from 11 GW to 20 GW that year and build another 10 GW until 2030, for a total of 30 GW. A goal that, on average, will supply clean energy to nearly ten million homes a year. This, without including the projects presented for the contribution of Next Generation funds .
The experts emphasize that one of the attractions of the newcomer is its solid financial position to execute this intense roadmap, so another aspect to be taken into account between the subsidiary and the parent company is that of indebtedness.
The group itself estimates that by 2021 the subsidiary’s net debt / ebitda ratio will be between 2.1 / 2.3 times, compared to the average leverage of 4 times that the FactSet consensus estimates for Acciona.
30 GW can supply clean energy to around 10 million homes, on average, per year
“The company will base its financing model on corporate debt, limiting exposure to project debt, and focusing on ESG instruments . The financing will be independent from the parent company after exit and the objective is to achieve and maintain an investment grade rating,” he sums up. Luis Padrón, Income 4 analyst.
Regarding the remuneration policy, Acciona Energía announced its intention to distribute between 25% and 50% of the profit among its shareholders and aims towards a “stable and flexible dividend policy, based on its results and future financial needs” . However, in the IPO brochure, he anticipated that in the debut year the lowest level will be chosen “to give the company flexibility to increase its investments if opportunities arise.”
For its part, Acciona ?? with a 45% payout ?? The expected dividend charged to 2020 has just increased by 0.4% to 3.91 euros per share, which at current prices represents a 3% return. As of Monday, the securities will be listed without the right to collect.