Befesa SA

Befesa SA maintains a leveraged capital structure with total liabilities of €1.07 billion against total equity of €802.6 million, resulting in a debt-to-equity ratio of 0.86. The company holds €142.6 million in cash and equivalents, which is insufficient to cover its €690.8 million in long-term debt, leading to a net cash position that is negative. Liquidity is assessed as medium, supported by a current ratio of 1.32, indicating adequate short-term asset coverage for current liabilities. The firm generates €211.9 million in operating cash flow, which funds €73.8 million in capital expenditures, yielding a free cash flow of €65.8 million.

Profitability metrics show a return on equity of 10.29% and a return on assets of 4.41%. The company reports a gross profit of €684.5 million on revenue of €1.18 billion, implying a gross margin of approximately 57.9%. Operating income stands at €142.5 million, translating to an operating margin of roughly 12.1%, while net income is €80.5 million, resulting in a net margin of approximately 6.8%. These returns are evaluated against the backdrop of the Commercial Services & Supplies industry, where capital intensity and regulatory compliance often pressure margins.

Revenue concentration and geographic exposure details are not explicitly provided in the available segment or geography sections, limiting the ability to assess specific regional or business unit dependencies. The company’s total revenue of €1.18 billion serves as the base for valuation multiples, with an EV/Revenue ratio of 1.67. Without detailed segment breakdowns, the analysis relies on aggregate financial performance to infer operational stability and market positioning.

Growth trajectory analysis is constrained by the absence of historical period data in the input, preventing a year-over-year or quarter-over-quarter trend assessment. The current financial snapshot reflects a single normalized period, offering a static view of performance rather than a dynamic growth narrative. Consequently, the evaluation of momentum relies on current profitability and cash flow generation rather than historical expansion rates.

Risk assessment highlights medium liquidity risk and low dilution risk, with a key flag noting that net cash is negative after subtracting total debt. The debt-to-equity ratio of 0.86 indicates moderate leverage, which may constrain financial flexibility in downturns. The absence of significant dilution risk suggests that share count stability is maintained, with basic and diluted shares outstanding both at approximately 40 million.

Recent investor relations observations indicate a mean analyst price target of €41.25, with a median target of €42.00, suggesting upside potential from the current market price of €34.70. The mean recommendation of 1.91 reflects a bullish consensus, with three strong buys and six buys outweighing two holds. No specific filing, news, or transcript observations are provided to detail recent corporate actions or strategic shifts.

Free cash flow surged 94.7% year-over-year to EUR 65.8 million, demonstrating significant improvement in cash generation capabilities.

Net income increased 58.4% year-over-year to EUR 80.5 million, indicating a strong recovery in profitability metrics.

Operating income rose 26.2% year-over-year to EUR 142.5 million, reflecting improved operational efficiency and margin expansion.

Cash conversion ratio of 2.57 significantly exceeds the cohort median of 1.16, highlighting superior cash management relative to peers.

Gross profit reached EUR 684.5 million in FY2026, maintaining a robust top-line contribution despite slight revenue contraction.

Debt-to-equity ratio of 0.86 is in the bottom quartile versus the cohort median of 0.17, signaling excessive leverage risk.

Revenue declined 4.6% year-over-year to EUR 1.18 billion, suggesting weakening demand or market share erosion in core operations.

Long-term debt increased to EUR 690.8 million in FY2026, maintaining a high absolute debt burden despite improved cash flows.

The company faces medium liquidity and credit risk flags, which could constrain financial flexibility and increase borrowing costs.

Revenue €285.2M, −7,5% YoY; Operating income +17,3% YoY.

• ▍Revenue €285.2M, −7,5% YoY
• ▍Operating income +17,3% YoY
• ▍Net income +11,2% YoY
• ▍Free cash flow −32,0% YoY
• ▍Net margin 7.3%

Revenue €290.8M, −10,3% YoY; Operating income −11,7% YoY.

• ▍Revenue €290.8M, −10,3% YoY
• ▍Operating income −11,7% YoY
• ▍Net income −23,5% YoY
• ▍Free cash flow −38,6% YoY
• ▍Net margin 6.8%

Revenue €290.3M, −1,2% YoY; Operating income +79,3% YoY.

• ▍Revenue €290.3M, −1,2% YoY
• ▍Operating income +79,3% YoY
• ▍Net income +317,9% YoY
• ▍Free cash flow +3 088,8% YoY
• ▍Net margin 7.1%

Revenue €293.2M, −9,2% YoY; Operating income +30,9% YoY.

• ▍Revenue €293.2M, −9,2% YoY
• ▍Operating income +30,9% YoY
• ▍Net income +102,6% YoY
• ▍Free cash flow +36,0% YoY
• ▍Net margin 7.3%

Revenue €308.4M; Operating income €31.9M.

• ▍Revenue €308.4M
• ▍Operating income €31.9M
• ▍Net margin 6.0%

Revenue €324.2M; Operating income €37.9M.

• ▍Revenue €324.2M
• ▍Operating income €37.9M
• ▍Net margin 8.0%

Revenue €293.7M; Operating income €23.1M.

• ▍Revenue €293.7M
• ▍Operating income €23.1M
• ▍Net margin 1.7%

Revenue €322.8M; Operating income €27.4M.

• ▍Revenue €322.8M
• ▍Operating income €27.4M
• ▍Net margin 3.3%

Revenue €1.18B, −4,5% YoY; Operating income +26,2% YoY.

• ▍Revenue €1.18B, −4,5% YoY
• ▍Operating income +26,2% YoY
• ▍Net income +58,4% YoY
• ▍Free cash flow +94,7% YoY
• ▍Net margin 6.8%

Revenue €1.24B, +5,0% YoY; Operating income +5,8% YoY.

• ▍Revenue €1.24B, +5,0% YoY
• ▍Operating income +5,8% YoY
• ▍Net income −12,3% YoY
• ▍Free cash flow +357,0% YoY
• ▍Net margin 4.1%

Revenue €1.18B, +3,9% YoY; Operating income −35,3% YoY.

• ▍Revenue €1.18B, +3,9% YoY
• ▍Operating income −35,3% YoY
• ▍Net income −45,4% YoY
• ▍Free cash flow −164,5% YoY
• ▍Net margin 4.9%

Revenue €1.14B, +38,3% YoY; Operating income +29,3% YoY.

• ▍Revenue €1.14B, +38,3% YoY
• ▍Operating income +29,3% YoY
• ▍Net income +6,5% YoY
• ▍Free cash flow −38,7% YoY
• ▍Net margin 9.4%