AlphaValue Corporate Services Fundamental Analysis FR
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This research has been commissioned and paid for by the company and is deemed to constitute an acceptable minor non-monetary benefit as defined in MiFID II

Cementir Holding

CR
Bloomberg   CEM IM
Cement & Aggregates  /  Italy  Web Site   |   Investors Relation
Also operates in : Holding Companies
White knight with green armour
Target
Upside 43.1%
Price (€) 6.08
Market Cap (€M) 967
Worth Knowing
Main shareholder

The main shareholder of Cementir Holding is Francesco Gaetano Caltagirone. He was born in Rome on 2 March 1943. After studying engineering, he relaunched the family construction business, then extended its activities to the fields of cement and media, giving rise to one of the largest Italian business groups, which now has five listed companies, major strategic holdings and a growing international presence. He is Chairman of Caltagirone SpA, Caltagirone Editore SpA, Il Messaggero SpA, Il Gazzettino SpA and Eurostazioni SpA.

A family-driven business

In 1992, Francesco Gaetano Caltagirone took over Cementir Holding through a public auction and, since 1996, his son Francesco Caltagirone Jr has overseen the group as its CEO and Chairman of the board, and made it truly international. While Francesco Gaetano Caltagirone is considered to be a successful Italian (net worth $2.1bn), Francesco Caltagirone Jr has gained a reputation as a dynamic CEO.

With Francesco Gaetano Caltagirone as the majority shareholder, his son as the CEO and Chairman, and the presence of five family members on the board of directors, Cementir is certainly a family-driven business. Dynamic external growth along with strong cash flow generation point to a family-type long-term philosophy and commitment to the business.

Dividend policy

From a medium-sized Italian ‘one trick pony’ profile, Cementir has evolved into a multinational, thanks to well-timed focused investments. This growth has been made possible because of a systematic and well-planned capital allocation. It maintains a payout ratio of 20% while allocating most of its profits towards strategic investments, which is unusual for a cement company expected to pay out mature cash flows. As Cementir is almost value creative (at least in 2017 and 2018), investing in growth makes sense.

Float

Cementir has a free float of 28.75%, with 71.25% shares held by the Caltagirone family (65.9% by Francesco Gaetano Caltagirone and 5.35% by his son Francesco Caltagirone Jr). This low free float has enabled the company to stick to its expansion strategy. Obviously, it leaves considerable headroom for a dilutive equity raising should Cementir go for a big fish. The question may be raised anytime if Cementir chooses to grow beyond white cement.

Shareholders Click onto see a given shareholder other stakes
Name% owned Of which
% voting rights
Of which
% free to float
Caltagirone Francesco Gaetano 65.9%65.9%0.00%
Francesco Caltagirone Jr. 5.35%5.35%0.00%
Norges Bank Investment Management
Norges Bank Investment Management is shareholder of
  • Total
     
    €M 2,975
2.85%2.85%0.00%
Dimensional Fund Advisors LP
Dimensional Fund Advisors LP is shareholder of
  • Total
     
    €M 524
1.65%1.65%1.65%
Apparent free float  25.9%
Changes to Shareholding : 25/06/2020.
Concepts
Business concepts
  • Marginal capacity play
  • Barrier to entry
  • Family controls/influence
Investment Concepts