Berenberg starts Vicat and Titan Cement with 'hold', prefers Buzzi Unicem

Vicat SA

03/12/2021 13:05

** Berenberg starts cement companies Vicat  VCTP.PA  and
Titan Cement International  TTNr.AT  with "hold" ratings
    ** The brokerage notes both are valued attractively on an
absolute basis, but given the overall drop in wider European
cement amid carbon regulation concerns, it sticks to Buzzi
Unicem  BZU.MI  as its key "buy" idea on relative valuation
    ** It also flags Vicat's and Titan's "underwhelming" return
on capital employed (ROCE) in recent years due to insufficient
returns in Egypt and Turkey
    ** "Although we do not anticipate any material change in
strategy from Titan Cement or Vicat on portfolio structure or
capital returns, we think that such a change would be well
received by investors", Berenberg adds
    ** Buzzi Unicem remains Berenberg's top pick in mid-cap
European cerement sector thanks to its lowest EV/EBITDA
multiple, highest FCF yield and strongest balance sheet
    ** It expects the three companies to deliver
mid-single-digit EBITDA growth in 2022 and profit growth driven
by volumes rather than increased profitability with broadly flat
margins in 2021
    ** The broker doesn't rule out a possible sale of the three
companies despite current independent family ownership, citing
the sale of Italcementi to HeidelbergCement  HEIG.DE 

 (Reporting by Olivier Cherfan)
 ((olivier.cherfan@thomsonreuters.com))