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
Support Services  /  France  Web Site   |   Investors Relation
From an industrialist to a luxury player?
Target
Upside 22.3%
Price (€) 11.92
Market Cap (€M) 301
Benchmarks Current multiplesWeightValues (€)Upside 
DCF (Edit and simulate)  35%11.7-2%
NAV/SOTP per share   20%28.0135%
EV/Ebitda Peers 7.6 x 20%7.00-41%
P/E Peers 17.6 x 10%7.03-41%
Dividend Yield Peers 5.7% 10%18.152%
P/Book Peers 1.0 x 5%19.261%
Target Price  100%14.622% 
Valuation matters

We regard Chargeurs SA as an industrial group in the Support Services sector, a highly diversified universe of businesses catering for various B2B services on a low capital intensity basis. We had initiated coverage of Chargeurs as a holding company then battling on to pay back its debt. The strategy pursued by the new owner, with a focus on active management of its industrial assets and leveraging its existing capabilities to develop new capital light businesses, has led us to reassess our view on Chargeurs’ valuation profile.

Peer metrics therefore consist of a multi-sector group of companies with a B2B services dimension; plus the odd reference to specialist chemicals as Advanced Materials is the historically-dominant business (overtaken momentarily by CHS in COVID-19-hit 2020) with a 5-year average of 46% of group sales and 58% of EBITDA. We apply a discount to the peer-based references to account for Chargeurs’ smaller scale versus peers.

The DCF is based on fairly modest EBITDA growth and sales growth of 2.5% in line with industry expectations. We therefore estimate an EBITDA margin of between 7% and 9% until 2033. In terms of capex, we expect Chargeurs to remain below 3%.

For the NAV, we have stopped using the data calculated and provided by the company in the parent company’s financial statements. The more entrepreneurial management since late 2015 warrants the use of sector multiples.

Comparison Based Valuation
Computed on 18 month forecastsMcap (€M]P/E (x)Ev/Ebitda (x)P/Book (x)Yield(%)
Peers ratios 15.4 8.78 2.36 2.82
Chargeurs's ratios 17.6 7.60 0.98 5.70
Premium -33.0% -33.0% -33.0% -33.0%
Default comparison based valuation (€) 7.03 7.00 19.2 18.1
Rentokil Initial 12,558 19.610.22.211.85
Bureau Veritas 12,230 23.311.55.033.19
AkzoNobel 11,910 20.911.72.922.91
Teleperformance 8,445 7.014.841.393.57
Quadient 659 18.65.960.563.33
DCF Valuation Per Share Help View DCF history
WACC % 7.97
PV of cashflow FY1-FY11 €M 222
FY11CF €M 39.6
Normalised long-term growth"g" % 2.00
Sustainability "g" % 1.55
Terminal value €M 617
PV terminal value €M 287
PV terminal value in % of total... % 56.4
Total PV €M 509
Avg net debt (cash) at book v... €M 211
Provisions €M 40.4
Unrecognised actuarial losses... €M 0.00
Financial assets at market price €M 20.7
Minorities interests (fair value) €M 0.00
Equity value €M 278
Number of shares Mio 23.7
Implied equity value per share 11.7
Sustainability impact on DCF % -7.22
Assessing The Cost Of Capital Help
Synthetic default risk free rate % 3.50
Target equity risk premium % 5.00
Tax advantage of debt financ... % 25.0
Average debt maturity Year 5
Sector asset beta x 0.84
Debt beta x 0.70
Market capitalisation €M 288
Net debt (cash) at book value €M 208
Net debt (cash) at market value €M 170
Company debt spread bp 350
Marginal Company cost of debt % 7.00
Company beta (leveraged) x 1.21
Company gearing at market v... % 72.2
Company market gearing % 41.9
Required return on geared eq... % 9.56
Cost of debt % 5.25
Cost of ungeared equity % 7.71
WACC % 7.97
DCF Calculation Help
  12/22A 12/23E 12/24E 12/25E Growth 12/26E
Sales €M   746 669 753 843 3.00% 868   
EBITDA €M   67.9 47.8 64.9 80.6 2.50% 82.6   
EBITDA Margin %   9.10 7.13 8.61 9.56 9.52   
Change in WCR €M   -40.5 -9.47 -14.0 -16.3 2.50% -16.7   
Total operating cash flows (pre tax) €M   5.00 30.3 42.9 56.3 65.9   
Corporate tax €M   2.50 7.77 0.21 -3.19 2.50% -3.27   
Net tax shield €M   -4.78 -5.12 -4.04 -4.04 2.50% -4.14   
Capital expenditure €M   -10.8 -17.8 -20.0 -22.4 4.00% -23.3   
Capex/Sales %   -1.45 -2.66 -2.66 -2.66 -2.69   
Pre financing costs FCF (for DCF purposes) €M   -8.08 15.1 19.0 26.6 35.1   
Various add backs (incl. R&D, etc.) for DCF... €M   0.00 0.00 0.00 0.00 0.00   
Free cash flow adjusted €M   -8.08 15.1 19.0 26.6 35.1   
Discounted free cash flows €M   -8.08 15.1 17.6 22.8 27.9   
Invested capital   413 436 465 495 514   
NAV/SOTP Calculation
 % ownedValuation technique Multiple used Valuation at 100%
(€M)
Stake
valuation
(€M)
In currency per share
(€)
% of gross assets
Protective Films 100% EV/EBITDA 12 305 305 12.9 35.0%
Fashion Technologies (ex Interlining) 100% EV/EBITDA 11.5 270 270 11.4 31.0%
Museum Solutions (ex Technical Subst... 100% EV/EBITDA 11.4 187 187 7.89 21.4%
Luxury Acquisitions 100% AlphaValue valuation 45.0 45.0 1.90 5.16%
Luxury Materials (ex Wool) 100% Adj. historical price 35.0 35.0 1.48 4.01%
Tax loss carryforwards 100% AlphaValue valuation 30.0 30.0 1.27 3.44%
Other
Total gross assets 872 36.8 100%
Net cash/(debt) by year end -208 -8.79 -23.9%
Commitments to pay
Commitments received
NAV/SOTP 664 28.0 76.1%
Number of shares net of treasury shares - year end (Mio) 23.7
NAV/SOTP per share (€) 28.0
Current discount to NAV/SOTP (%) 57.5 View history

Changes to Story : 22/11/2023, Changes to Forecasts : 22/11/2023.