AlphaValue Corporate Services
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Chargeurs

CR
Bloomberg   CRI FP
Support Services  /  France  Web Site   |   Investors Relation
Strong 2025 ambitions, luxury flavour
Target
Upside 76.3%
Price (€) 15.7
Market Cap (€M) 391
Benchmarks Current multiplesWeightValues (€)Upside 
DCF (Edit and simulate)  35%27.978%
NAV/SOTP per share   20%38.0142%
EV/Ebitda Peers 6.3 x 20%20.430%
P/E Peers 11.8 x 10%18.115%
Dividend Yield Peers 7.5% 10%31.4100%
P/Book Peers 1.2 x 5%25.462%
Target Price  100%27.776% 
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 Protective Films 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 of 3.0%, in line with industry expectations. We assume that the well managed net debt situation of the group would warrant a tight spread now at 280bp. This reflects the fact that the firm seems determined to keep a substantial financing buffer. We make no allowance for the net present value of the tax assets (see below) beyond what stems from the relatively low tax rate projected in 2022 (19%).

For the NAV, we stopped using 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 which leads to the Protective Films business accounting for around half of the total gross assets.

Finally, there is the vexing issue of what to do with the huge tax loss carry forwards resulting from the historical losses. The previous view, that they were unlikely to be used up by operations over the next few years and the French tax rule tightening so that the open-ended portion was unlikely ever to materialise, is probably too cautious now that the earnings delivery of the group has been confirmed for the fifth year in a row.

Comparison Based Valuation
Computed on 18 month forecastsMcap (€M]P/E (x)Ev/Ebitda (x)P/Book (x)Yield(%)
Peers ratios 20.2 11.4 2.89 1.95
Chargeurs's ratios 11.8 6.30 1.20 7.47
Premium -33.0% -33.0% -33.0% -33.0%
Default comparison based valuation (€) 18.1 20.4 25.4 31.4
Teleperformance 15,799 14.99.363.581.52
Rentokil Initial 14,156 26.411.82.071.35
AkzoNobel 12,677 22.814.52.932.82
Bureau Veritas 12,326 24.312.45.392.20
Quadient 557 7.125.010.423.90
DCF Valuation Per Share Help View DCF history
WACC % 8.02
PV of cashflow FY1-FY11 €M 358
FY11CF €M 63.7
Normalised long-term growth"g" % 2.00
Sustainability "g" % 1.70
Terminal value €M 1,007
PV terminal value €M 465
PV terminal value in % of total... % 56.5
Total PV €M 823
Avg net debt (cash) at book v... €M 134
Provisions €M 36.4
Unrecognised actuarial losses... €M 0.00
Financial assets at market price €M 15.0
Minorities interests (fair value) €M 0.00
Equity value €M 668
Number of shares Mio 23.9
Implied equity value per share 27.9
Sustainability impact on DCF % -3.35
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 0.88
Debt beta x 0.70
Market capitalisation €M 374
Net debt (cash) at book value €M 135
Net debt (cash) at market value €M 97.7
Company debt spread bp 350
Marginal Company cost of debt % 7.00
Company beta (leveraged) x 1.05
Company gearing at market v... % 36.1
Company market gearing % 26.5
Required return on geared eq... % 8.74
Cost of debt % 5.25
Cost of ungeared equity % 7.89
WACC % 8.02
DCF Calculation Help
  12/21A 12/22E 12/23E 12/24E Growth 12/25E
Sales €M   737 752 827 892 3.00% 919   
EBITDA €M   73.8 64.1 80.1 96.5 2.50% 98.9   
EBITDA Margin %   10.0 8.53 9.68 10.8 10.8   
Change in WCR €M   21.9 -17.5 -12.4 -14.9 2.50% -15.3   
Total operating cash flows (pre tax) €M   78.4 38.6 59.7 73.6 83.6   
Corporate tax €M   -0.50 0.16 -5.59 -9.64 2.50% -9.88   
Net tax shield €M   -2.65 -2.90 -2.63 -2.75 2.50% -2.82   
Capital expenditure €M   -13.0 -8.20 -14.0 -16.0 4.00% -16.6   
Capex/Sales %   -1.76 -1.09 -1.69 -1.79 -1.81   
Pre financing costs FCF (for DCF purposes) €M   62.3 27.7 37.5 45.2 54.3   
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   62.3 27.7 37.5 45.2 54.3   
Discounted free cash flows €M   62.3 27.7 34.7 38.7 43.1   
Invested capital   345 376 402 432 449   
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 14.5 608 608 25.4 58.2%
Fashion Technologies (ex Interlining) 100% EV/EBIT 9 156 156 6.51 14.9%
Museum Solutions (ex Technical Subst... 100% EV/EBITDA 10.5 144 144 6.01 13.8%
Luxury Acquisitions 100% AlphaValue valuation 45.0 45.0 1.88 4.31%
Luxury Materials (ex Wool) 100% Adj. historical price 35.0 35.0 1.46 3.35%
Tax loss carryforwards 100% AlphaValue valuation 30.0 30.0 1.25 2.87%
Healthcare Solutions 100% EV/EBITDA 12 27.6 27.6 1.15 2.64%
Other
Total gross assets 1,045 43.7 100%
Net cash/(debt) by year end -135 -5.65 -12.9%
Commitments to pay
Commitments received
NAV/SOTP 910 38.0 87.1%
Number of shares net of treasury shares - year end (Mio) 23.9
NAV/SOTP per share (€) 38.0
Current discount to NAV/SOTP (%) 58.7 View history

Changes to Story : 03/01/2023, Changes to Forecasts : 03/01/2023.