AlphaValue Corporate Services Fundamental Analysis FR
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AlphaValue Corporate Services
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

Chargeurs

CR
Bloomberg   CRI FP
Holding Companies  /  France  Web Site   |   Investors Relation
Carrying on with strategic acquisitions
EPS change21/03/2019

Pricing acquired growth

Change in EPS2019 : € 1.21 vs 1.65-26.6%
2020 : € 1.68 vs 1.77-5.37%

While 2018 EBIT developments were up to scratch, below the line friction costs associated with an acquisition-based expansion strategy started to bite. The 2019 EPS downgrade reflects the same continuing friction costs plus a more cautious macro view of top-line growth and operating margins, most notably on the group's cash cow ("Protective Films"). From 2020, we allow for additional acquired growth, a €100m capital increase and higher debt to try and gauge the impact of ambitious acquisition projects aimed at reaching €1bn in consolidated revenues.



Change in Target Price€ 30.1 vs 31.1-3.36%

The target price's slight erosion is the net of near-term earnings downgrades (costs associated with acquisitions including opex and slower top-line growth) and the projected benefits of a successful deployment of the said external growth strategy. The fast growth plans are now allowed for in the prospective P&L and balance sheets as Chargeurs has been fairly accurate about its 2021 objective in top-line terms (€1bn in revenues).



Change in NAV€ 29.8 vs 30.7-2.71%

The NAV combines a resetting of the valuation of various businesses to higher market levels and forward-looking higher net debt with a quasi-zero net impact. This assumes that we give no value to the future acquired businesses for the time being while having a partial purchase cost.



Change in DCF€ 40.2 vs 36.1+11.4%

As out-years start from 2022, i.e. after an acquisition spree of value-enhancing businesses, the DCF is mechanically positively impacted even though we have allowed for an expanded number of shares (€100m rights issue).



Target
Upside 95.5%
Price (€) 13.64
Market Cap (€M) 389
Perf. 1W: 1.64%
Perf. 1M: -10.1%
Perf. 3M: -19.0%
Perf Ytd: -20.1%
10 day relative perf. to stoxx600: 1.32%
20 day relative perf. to stoxx600: -7.61%
Updates

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

16 Nov 18 Earnings/sales releases
On time delivery, cont’d

07 Sep 18 Earnings/sales releases
Robust earnings delivery in more choppy (FX) ...

29 Jun 18 M&A /Corp. Action
One stone, many great birds

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