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Chargeurs

CR
Bloomberg   CRI FP
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From an industrialist to a luxury player
Target
Upside 36.3%
Price (€) 10.36
Market Cap (€M) 258
Perf. 1W: 1.77%
Perf. 1M: -12.9%
Perf. 3M: -7.83%
Perf Ytd: -11.3%
10 day relative perf. to stoxx600: 8.45%
20 day relative perf. to stoxx600: -13.2%
Earnings/sales releases30/04/2024 21:25

Q1-24 Chargeurs kicks off the year in high gear

Chargeurs got off to a good start in 2024 with 10% yoy organic revenue growth, boosted by all of its divisions. As in the previous quarters, the Luxury segment continued to be the Group’s main driving force, bolstered by the museum activity. The positive surprise of this release, however, was Advanced Materials, which returned to growth territory after 6 consecutive quarters of decline, lifted by a volume effect, even in an adverse pricing environment.


Fact

  • Chargeurs posted organic revenue growth of 10% yoy to €177.8m.
  • The Luxury division performed particularly well, with organic growth of 20% yoy to €54.1m. The Technology division also reported 6% revenue growth to €123.7m.
  • Chargeurs Advanced Materials (CAM) began its upturn with organic sales growth of 2.7% to €72.4m.
  • Chargeurs Museum Studio (CMS) recorded impressive organic sales growth of 35% to €28.2m.
  • The PCC Fashion Technologies (CFT-PCC) and Luxury Fibers (CLF) divisions achieved organic growth of 11% and 7.4% respectively.
Revenue breakdown by division

  • Concerning the takeover bid for Chargeurs Group shares, the transaction was successfully completed on April 9. Following the tender offer, Colombus Holding and Colombus Holding 2, Groupe Familial Fribourg and its partners control 67.58% of the capital and 68.46% of the voting rights.

Analysis

Chargeurs started the new year on a high note with organic sales growth of 10% yoy to €178m, underpinned by a resilient performance across all the divisions, particularly at Chargeurs Advanced Materials (CAM) (+2.7% organic growth yoy) and Chargeurs Museum Studio (CMS) (+35% organic growth yoy).

Recovery underway in the Advanced Materials division

After nearly six quarters of decline, CAM was back in positive growth territory, with sales up by 2.7% yoy to €72.4m. This achievement was powered by a positive volume effect (+6% yoy) against the backdrop of a recovery gaining strength in Europe, which had already got underway in Asia and America. This performance is all the more commendable in a context of a 13% drop in polyethylene prices vs. Q1-23. The outlook is good for the division, which has regained an order backlog close to its Q1-22 levels. Given the positive trend in terms of volume, and its solid order book, the division should gradually return to proper profitability as the Group progresses with its contracts, even if the management remains cautious in view of the structurally low visibility (the order book covers 6 to 8 weeks at most).

Still no signs of fragility in fashion

While the current environment would suggest a decline in Chargeurs’ Fashion Technologies (CFT-PCC) business, CFT-PCC’s figures proved otherwise, with organic sales growth of 11% to €51.3m. This performance was driven by solid growth in Asia (which accounts for over 50% of sales), which offset the sluggish performance experienced in Europe. In view of the solid order book and its strategy of targeting high-margin customers, Chargeurs is confident about the prospects for the division which, like CAM, has good visibility. The division was nevertheless hit by the devaluation of the Argentine peso, which reduced the reported growth to zero. Argentina had already marred the Q4-2023 reported sales.

Chargeurs Museum Studio builds on momentum

As in recent quarters, CMS continues to be Chargeurs’ main growth driver. CMS recorded remarkable revenue growth of 35% organic yoy to €28m. This was due to the projects won in 2021 and 2022, which are progressing as planned by Chargeurs. Although we are still a long way from the €150m expected for 2024, there is no need to worry. The quarterly figures are bound to be bouncy as the projects complete. Chargeurs is confident about this figure and has reiterated its guidance.

NATIVA expansion pursued at Chargeurs Luxury Fibers

Like the other divisions, Chargeurs Luxury Fibers (CLF) reported robust figures for Q1-24, with organic revenue growth of 7.4% to €23.1m. Sales of conventional wool continued to grow. Chargeurs intends to extend its offer to various European and American brands, and also to broaden its offer to cotton fibers, starting in Europe.

Personal goods: a marginal yet promising division

Personal Goods, the Group’s smallest division with sales of €2.8m, showed continued growth. The division recorded organic growth of 5%, underpinned by demand for Altesse Studio’s high-end accessories and Swaine’s increased visibility since the opening of its flagship store in London’s New Bond Street.


Impact

Our model is currently being revised to incorporate these results and roll forward our estimates for 2026. The near-term top-line dynamic is clearly good news while the management will be cautious about over-discounting a recovery. We maintain a positive stance on the stock and any changes to our model should not materially impact our recommendation.


Updates

30 Apr 24 Earnings/sales releases
Q1-24 Chargeurs kicks off the year in high gear

16 Feb 24 Earnings/sales releases
Operational results in line with the 2023 expect...

15 Nov 23 Target Change
Adjustments to our FY 23-24 outlook

13 Nov 23 Earnings/sales releases
The worst is over as Chargeurs Advanced Mate...

12 Sep 23 Earnings/sales releases
Solace in museums

25 May 23 Earnings/sales releases
Heading for a Chargeurs Advanced Materials re...

13 Mar 23 Earnings/sales releases
Strong 2022 introduces a promising 2023

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