Chargeurs

We have revised our FY 23-24 assumptions following the Q1-23 release. We now estimate sales for 2023 at €788m versus €831m previously, and the underlying operating profit at 6.1% versus 7.2%. This decline is due to a downward revision in the sales and margins at Chargeurs Advanced Materials, on which we had been overly optimistic after an exceptionally high level in Q1-22 due to a post-Covid catch-up effect. We had also been too optimistic on Chargeurs Luxury Materials, with a sales growth forecast of 7%, despite the particularly high level of activity in 2022. We have also reduced our estimates for the HealthCare Solution division (with sales growth of 0% vs. 30% previously), as we no longer have any visibility on the division's revenues and margins in the context of an improving healthcare situation. For 2025, however, we are more optimistic, estimating strong sales growth for Chargeurs Museum Studio (+25%) to over €200m with a margin of 12%, 10% for Chargeurs Luxury Materials to €110m with a margin of c.4% and 50% for Chargeurs Personal Goods to c.€24m with a margin of 10%.

Our NAV has increased on the back of updated EV/EBITDA multiples and peer groups. We now use average estimated EBITDA for 23/24 and 25. As a result, Chargeurs Advanced Materials has seen its value drop significantly, with a multiple of 11.5x versus 14.5x previously, while Chargeurs Fashion Technologies' value has risen sharply due to a change in methodology, from an EV/EBITDA of 9x to an EV/EBITDA of 11.6x. Finally, we have applied an EV/EBITDA of 11.4x for Chargeurs Museum Studio, compared with 10.5x previously.

Our DCF-based valuation is reduced slightly from €28.76 to €26.20 after incorporating our adjustment to the FY23-24 EPS forecast (see EPS commentary). We expect revenues of around €788m (vs. €831m) for FY 2023 with an underlying profit of c.€34m (vs.€51m) and €872m (vs. €892m) for FY2024 with an underlying operating profit of €53m (vs. €67m). We are also less optimistic on the WCR, which we had underestimated due to the extremely low level in 2021 (3.8% of sales).