SAVE THE DATE - Hypoport AG

Recticel
Belgium/Chemicals Analyser
Recticel (Hold)
Hold
Recommendation unchanged
Share price: EUR
closing price as of 07/05/2012
Target price: EUR
Target Price unchanged
Reuters/Bloomberg
5.50
6.00
RECT.BR/REC BB
Market capitalisation (EURm) 159
Current N° of shares (m) 29
Free float 61%
Daily avg. no. trad. sh. 12 mth 31,931
Daily avg. trad. vol. 12 mth (m) 0
Price high 12 mth (EUR) 7.80
Price low 12 mth (EUR) 3.80
Abs. perf. 1 mth -2.14%
Abs. perf. 3 mth 11.11%
Abs. perf. 12 mth -27.82%
Key financials (EUR) 12/11 12/12e 12/13e
Sales (m) 1,378 1,359 1,408
EBITDA (m) 89 90 103
EBITDA margin 6.4% 6.7% 7.3%
EBIT (m) 42 47 59
EBIT margin 3.0% 3.5% 4.2%
Net Profit (adj.)(m) 17 22 31
ROCE 6.1% 6.6% 8.0%
Net debt/(cash) (m) 150 159 153
Net Debt/Equity 0.6 0.6 0.5
Debt/EBITDA 1.7 1.8 1.5
Int. cover(EBITDA/Fin. int) 6.7 7.8 8.8
EV/Sales 0.2 0.2 0.2
EV/EBITDA 3.4 3.7 3.2
EV/EBITDA (adj.) 3.4 3.7 3.2
EV/EBIT 7.2 7.2 5.6
P/E (adj.) 7.6 7.2 5.1
P/BV 0.5 0.6 0.6
OpFCF yield 25.7% 25.1% 26.0%
Dividend yield 5.1% 5.5% 6.4%
EPS (adj.) 0.60 0.76 1.07
BVPS 8.60 9.08 9.85
DPS 0.28 0.30 0.35
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7.5
7.0
6.5
6.0
5.5
5.0
4.5
4.0
3.5
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12
RECTICEL Belgium All Share (Rebased)
Shareholders: Cie Bois Sauvage 29%;
Sihold/Vean/Lennart/Sallas 9%; Rec-Man
1.02%;
Analyst(s):
Bernard Hanssens, Bank Degroof
bernard.hanssens@degroof.be
+32 (0) 2 287 9689
Weak 1Q12 trading update
The facts: This morning Recticel released a weak 1Q12 trading update, with
consolidated sales down 2.4% to EUR 351.1m. EBITDA margin seems on track
with consensus estimates for FY12, but a new round of raw material price
increases is ongoing in 2Q12.
Our analysis: Sales dropped in all segments, with the exception of the insulation
BU.
Sales (EUR m) 1Q11 2Q11 3Q11 4Q11 FY11 1Q12 % chg
Flexible Foams 159.8 142.4 147.3 146.6 596.1 157.4 -1.5%
Bedding 78.9 62.7 76.8 73.8 292.2 73.6 -6.7%
Insulation 48.4 60.2 54.8 59.7 223.1 53.0 9.5%
Automotive 88.1 87.0 74.3 75.4 324.8 82.4 -6.4%
Coporate/interco -15.6 -12.2 -16.6 -13.7 -58.1 -15.4 -1.3%
Total 359.6 340.1 336.6 341.8 1,378.1 351.1 -2.4%
Sources: Recticel
In Flexible foams, sales held quite well. They are down 1.5% only, we guess
thanks to some costs passed on.
In Bedding, sales are down 6.7% mainly driven by weak performance in the nonbranding
segment.
In Automotive, sales decreased 6.5%, which is slightly better than the drop in car
sales in Europe in 1Q12. The sub-segment Interiors saw sales down 11% as some
running programs approach their phase-out stage.
In Insulation, sales are up 9.5%, despite difficult climatic conditions in February.
In 1Q12 raw material prices have been at levels comparable to those of the first
quarter of 2011 and have been quickly rising as last year. It is our understanding
that year-to-date raw material costs are up by a high single digit.
However, management indicated that despite lower sales in most segments the
overall profitability was in line with consensus expectations for FY12
(EBITDA margin to sales of about 6.5%). This is due to the progressive passthrough
of the higher raw material costs into the selling prices. However, there
were further price increases in April and other price hikes announced for
May. This explains why management is reluctant to provide any guidance for
FY12.
Conclusion & Action: No major surprises in this 1Q12 trading update. This
changes little in our view on the company.
The valuation is not demanding based on short term multiples (P/E of
EV/EBITDA), but it is still hard to find triggers that could justify a re-rating in the
coming months. This is due to the poor visibility on earnings and on the outcome
of the antitrust investigations that could cost up to EUR 3.17 per share (we
discount EUR 1.56 per share in our valuation). HOLD.
Page 70 of 80 European Securities Network
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