SPEEDY EXPECTED BUYOUT BY GEOPOST PROVIDES CATALYST TO ALREADY WELL PERFORMING BUSINESS
• Geopost, holder of 25% of Speedy, has the option to increase stake by 45% in 2020.
• The expected strike price is 8.00x EV/EBITDA, which we expect to yield a share price of BGN 51.3.
• Speedy operates in one of the few industries which should not be hard hit by the COVID-19 lockdown.
• Estimated 40% share of B2B business does make the company susceptible to lost revenue during the short term.
• Growth in consumer business and reduced fuel prices should counter negative impact.
• Long-term, the business is one of our favorites, as e-commerce penetration is low, leaving plenty of room for double digit growth.
• We believe dividend distribution track record will be maintained, if majority shareholder remains.
• Our “Hold” rating for the stock is based on the Geopost option strike price, the intrinsic value of the stock, tightly held ownership structure (little price volatility/liquidity) and the fair chances of benefiting on the high cash generation potential through dividends.
Equity Analysis /
BulgariaSpeedy AD: Speedy Update - April 2020
Contributors


29 April 2020
Published byFirst Financial Brokerage House