AlphaValue Corporate Services Fundamental Analysis FR
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Chargeurs

CR
Bloomberg   CRI FP
Holding Companies  /  France  Web Site   |   Investors Relation
Carrying on with strategic acquisitions
M&A /Corp. Action05/07/2019

Technical Substrates sprouting through acquired growth

Staying loyal to its investment strategy of targeting niche markets, Chargeurs props up its Technical Substrates business through three minor, but strategic, acquisitions focused on museum services. This brings the division closer to the €100m in sales milestone before 2021.


Fact

  • Chargeurs signed on 4 July the terms for the acquisition of majority stakes in three companies to be grouped under the “Technical Substrates” umbrella.
  • The companies are Design PM (UK), MET Studio (UK) and Hypsos (Netherlands), joining Leach which was acquired back in April 2018.
  • Combined, the three entities should represent €25m in revenues over the full year.
  • No acquisition price was mentioned by the group.

Analysis

The recent venture focused on the (very) niche market of museum visual communication solutions and visitor experience which started with the acquisition of UK-based Leach, has taken off with the announcement of three minor, but strategic, acquisitions in this space. The three companies, which will maintain their respective services and organisation processes, will team up under the brand name “Chargeurs Creative Collections” to offer combined solutions catered mainly to museums, but will also serve retail outlets and brands.

With this move, Chargeurs brings closer its Technical Substrates division to the €100m sales milestone set in the strategic plan. Revenues are expected to represent €60m in 2019 on a full-year basis, and reach €100m in 2020 mainly thanks to additional external growth, a year ahead of schedule. Since the acquisition price has not been disclosed, it is not possible for us to make a deeper assessment on the group’s active external growth strategy.

Although the entities acquired don’t stray far from the market already served by Leach, we eagerly wait for aggregate figures and the growth potential in this seemingly narrow corner. Chargeurs’ management made it clear that the museum niche is actually a large and fast-growing one and, above all, that the top-end know-how for such clients finds even bigger clients in exhibitions and retail businesses. Call that the “visitor experience”. As a reminder, the Technical Substrates business can record big quarterly swings depending on deliveries. Hopefully the acquisitions will contribute to smoother sales growth.


Impact

In all, we will maintain our current estimates but will tweak those figures if and when Chargeurs communicates on profitability targets different from the odd 14% underlying margins plugged into our forecasts.


Target
Upside 75.3%
Price (€) 17.6
Market Cap (€M) 406
Perf. 1W: -5.38%
Perf. 1M: 4.89%
Perf. 3M: 13.4%
Perf Ytd: 1.85%
10 day relative perf. to stoxx600: -0.62%
20 day relative perf. to stoxx600: 3.75%
Updates

18 Nov 19 Earnings/sales releases
Q3: another robust quarterly showing

18 Sep 19 Earnings/sales releases
H1: organic growth recovery and a brighter outl...

07 May 19 Earnings/sales releases
Successful acquired growth offsets organic sl...

21 Mar 19 EPS change
Pricing acquired growth

15 Mar 19 Earnings/sales releases
Solid 2018 execution confirms growth potential

31 Jan 19 Earnings/sales releases
Solid 2018 vintage

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