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From an industrialist to a luxury player?
Upside 101%
Price (€) 12.72
Market Cap (€M) 319
Perf. 1W: 2.58%
Perf. 1M: -10.2%
Perf. 3M: -7.96%
Perf Ytd: -6.26%
10 day relative perf. to stoxx600: -10.4%
20 day relative perf. to stoxx600: -11.2%
Earnings/sales releases03/10/2012

Worsening context weighs on profitability


For H1 12, management reported revenues of €283.1m, -2.6% compared to last year with a significant drop in volumes -13.6%, but increasing prices +7.3% and favourable FX of +3.7%.
Operating profit stood at €8.1m, -44.5% with each business unit being affected, and net income was €1.2m.
Cash flow from operations reached €12.7m which allowed a €11.8m decrease in net debt. The group’s target is to continue drastically decreasing its net debt.
The group has also announced the sale of a 50% interest in the Chargeurs Wool companies in Uruguay to the Otegui family, representing annual revenues of €28m. The transaction price was US$6.5m on the basis of the assets’ book value and the companies’ distributed dividends of US$2.8m before the sale. No further details provided.


Lower Chinese growth and the current European economic environment strongly impacted the group’s activity and profitability in H1, and primarily in Q2, beyond what we had feared previously.
Consequently, H1 12 figures were below the previous group’s guidance of sales at around €290m and operating income at some €9m… but:

- Chargeurs Protective Films succeeded in passing on price increases (thanks mainly to the indexation of the polyethylene price) and operating margins declined from 6.8% in H1 11 to 5% during the period as volumes declined due to the slowdown in the Construction sector in Europe.
- Chargeurs Interlining’s operating margin dropped to 3.7% versus 5.8% last year which was a very steep level indeed. The group sees no upturn for H2 at this stage and the order book keeps only a short visibility.
Strong pricing power was not enough to face the turmoil.
Operating profit was also affected by a cost reduction programme implemented in Chargeurs Interlining with an optimisation of production facilities in France, reorganisation in Spain and Portugal, and consolidation of business units in China.
The restructuring of the Intissel plant will not impact production capacity: the group will “do better with less”.
At this stage, the Group expects €1.4m of annual savings for Europe on H1 actions taken.
For FY 12, management now expects sales to reach €527m (taking into account the sale of the Uruguayan BU) and operating profit to be around €15m.


We substantially lower our forecasts (-30% at the operating level) to take into account the worsening economic context.


26 Nov 12 Earnings/sales releases
Resistance of prices, drop in volumes

03 Oct 12 Earnings/sales releases
Worsening context weighs on profitability

04 May 12 Other news/comments
Lower volumes will impact profitability

04 May 12 EPS change
A challenging 2012

19 Mar 12 Earnings/sales releases
Increasing profitability in a challenging context

21 Jan 12 Earnings/sales releases
Sales release: in line with our expectations

02 Dec 11 Other news/comments
Eduardo Malone has increased his stake

16 Nov 11 DCF Change
Visible slowdown in demand