Research, Charts & Company Announcements
Research Tree provides access to ongoing research coverage, media content and regulatory news on TARKETT. We currently have 5 research reports from 1 professional analysts.
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Research reports on
Recovery in CIS oversold/Tarkett doesn’t deserve to trade at American peers’ EV/EBITDA
28 Oct 16
Key information (9m figures): • Sales up by only 0.5% and 1.7% organically. • Adjusted EBITDA up by 12.2%. • Adjusted EBITDA margin up by 135bp to 12.9%. Key information (3m figures): • Sales decreased by 1.8% and by 2.1% organically. • Adjusted EBITDA up by 5.3%. • Adjusted EBITDA margin up by 101bp to 15.0%. Guidance: • For FY2016, management expects net sales between €2,700m and €2,750m, adjusted EBITDA in the range of €315m to €330m and financial leverage between 1.2x and 1.4x adjusted EBITDA.
North America and productivity gains boost adjusted EBITDA margin by 160bp
29 Jul 16
Key information: • Sales increased by +1.9% on a reported basis and by +4.1% organically. • Adjusted EBITDA increased by 18%. • Adjusted EBITDA margin up by 160bp to 11.7%. • Net profit increased by 49%. • Net debt / LTM adjusted EBITDA at 1.8x in H1 16 vs 2.3x in H1 15.
Good set of results but below our estimates
24 Feb 16
h2. Key information: • Net sales up 12.4% to €2,715m and down 0.3% on a lfl basis: scope effect +9.0% and currency effect of 7.2% excluding CIS and -3.4% from the CIS. • Adjusted EBITDA increased by 3.7% to €285m. • Adjusted EBITDA margin at 10.5% vs 11.4% in 2014 because of the negative developments in emerging countries (the CIS, APAC & LatAm division). • Net profit up by 36% to €83m. • Net debt/adjusted EBITDA at 1.7x vs 2.0x at end of 2014. • EPS at €1.31 per share vs €0.96 in 2014. • Dividend proposed of €0.52 per share, namely a 37% increase.
Low oil price environment should allow Tarkett to improve its financial performance
20 Jan 16
h1. Business Tarkett has a €1.5bn market cap. It is the third largest manufacturer of flooring and sports surfaces (namely “Resilient” but the clear leader when considering the broad portfolio of products and geographical reach. Thanks to its high exposure to the renovation market (c.80% of sales in sqm), the company remains fairly resilient to the construction cycle. On the negative side, the company is absent from the residential carpet and the ceramic markets, which reduces its potential market by two-thirds. We estimate that Tarkett has a 10% to 14% global market share when considering only its end-markets. The company has a multibrand distribution strategy (global and national brands adapted to the distribution strategy implemented in each market) and management believes that it has the strongest brand portfolio. Brand awareness among installers and sales advisors is the key to maintaining market share and solid margins. This explains the high proportion of sales people amongst employees (c.10% of overall employees). The two other strengths of Tarkett’s business model is the diversified mix of distribution channels as well as its local manufacturing facilities (35 industrial sites) in each of its principal geographic regions. h1. Recommendation and upside Thanks to the overall decline in equity valuations, we are initiating coverage of Tarkett with a buy recommendation and 16% upside. One month ago, we would have initiated Tarkett with the same target price but with a lower recommendation. h1. The weak oil price environment acts as a strong catalyst to profitability In 2012 (last available information), purchases of raw materials represented 61.9% of the cost of sales, of which 74% relate to oil-based products, namely PVC and plasticisers. Hence the company should enjoy a significant benefit from the low oil price environment. We estimate that the 75% decrease in oil price should result in a c.20-30% decrease in the overall cost of sales, which should allow the company to increase its profitability and reduce the selling price of its products. h1. Need to know The two main shareholders are the Deconinck family (50.2%), namely the heirs of Mr Allibert, the founder of the company, and KKR (21.5%). The company’s bylaws provide for double-voting rights for registered shares held for more than two years by the same holders from 22 November 2015. As a consequence, the power of other shareholders is fairly limited. In our opinion, KKR could sell its remaining stake as soon as it is satisfied with the valuation, implying an overhang on the potential upside.
08 Dec 16
Elderstreet stake acquired 02 GENERAL NEWS Globalworth premium In this issue Venture capital firm Draper Esprit has taken a 30.8% stake in venture capital trust manager Elderstreet. Both investment managers focus on the technology sector and they will be able to co-invest. Elderstreet has investments in a number of AIM-quoted companies through its VCTs. The purchase was funded by an issue of Draper Esprit shares worth just over £250,000. Simon Cook, the chief executive of Draper Esprit, is a former partner at Elderstreet so he knows the business and the people who run it, although he did leave more than 14 years ago. Cook has previously acquired portfolios from 3i and Cazenove, two other firms where he has worked. Draper Esprit has an option to acquire the remaining shares in Elderstreet, which has more than £25m under management. Adding Elderstreet to the group enables Draper Esprit to offer investors a range of EIS funds, VCTs and an ISA qualifying listed evergreen patient capital fund. The enlarged group has venture capital assets under management of more than £350m. At the end of September 2016, Draper Esprit had a net asset value of 352p a share, which is similar to the current share price. The June 2016 flotation price was 300p a share. Draper Esprit is quoted on Ireland’s Enterprise Securities Market as well as AIM.
Focused on the long term
08 Dec 16
These are rare events but it is nice to see a management use its public listing advantageously to trade short-term dilution in EPS for the optionality of asymmetric upside in the long term. With over £10m already in the balance sheet, ABD has successfully raised £5.4m gross in a placing and expects to raise another £1m from an offer. We were not surprised to learn that the placing was over 3.5x oversubscribed. How many listed UK companies are positioned to take advantage of the digital revolution in the automotive industry? The additional investment in new people, facilities, products & services should be dilutive to FY2017-18 EPS but this is small price to pay to establish the leading supplier of integrated test, measurement and simulation solutions to the autonomous vehicle industry. Our forecasts assume that growth will accelerate from FY2019. We raise our target price to 575p based on 15x FY2019 EPS, equivalent to Ricardo, the only other UK stock which has embraced the optionalities offered by the technological changes in the automotive industry.
07 Dec 16
Severfield’s (SFR’s) H117 results were well ahead of the previous year; margin performance and order book development cause us to raise our FY17 profit expectations. This combination has also proved to be a catalyst for share price outperformance following the results. Revenue growth and further margin development towards management’s stated aim of doubling FY16 PBT by 2020 can sustain further progress.
Exceptional trading continues
08 Nov 16
Keywords has announced that the strong trading in localisation and audio services has continued into H216. In particular, the Synthesis business acquired in April continues to benefit from exceptionally strong trading. Full-year results are now expected to be materially ahead of consensus and we upgrade our FY16e EPS by 13%. Erring on the side of caution, we have not changed our FY17 estimates significantly. Nevertheless, we believe the company does have a platform to sustain double-digit earnings growth, and hence medium-/long-term prospects for further share appreciation remain good.
N+1 Singer - Waterman Group - Encouraging AGM statement in line with expectations
09 Dec 16
This morning’s AGM Statement confirms that trading in the first four months of the year to 31st October was in line with expectations. Revenue was slightly above the prior year period and cash collection has remained strong. The Group has reiterated its commitment to maintaining a progressive dividend policy. The statement is encouraging and we therefore leave our forecasts unchanged. We note the attractions of a 5% dividend yield and consider the shares inexpensive at 4.5x FY’17 EV/EBITDA.