Financial analysis
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Transcript of Financial analysis
Contract research, paid for by the above corporate entity. Equity research methods and procedures are as applied by AlphaValue. Target prices and opinions are thus exclusively determined by those
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Poujoulat
Building Prod. & Materials / France Document generated on the 11/01/2013
Pull out all the “wood” stops
Buy Upside potential : 46.6 %
Target Price (6 months) 49.7
Share Price € 33.9
Market Capitalisation €M 67.4
Price Momentum STRONG
Extremes 12Months 28.8 38.5
Analyst
Gaetan Dupont [email protected]
@ www.alphavalue.com
+33 (0) 1 70 61 10 50
Last forecasts updated on the 11/01/2013
KEY DATA 12/10A 12/11A 12/12E 12/13E 12/14E
Adjusted P/E (x) 5.18 7.35 9.61 6.67 5.83
Dividend yield (%) 2.92 2.20 1.86 1.84 2.03
EV/EBITDA(R) (x) 3.96 6.08 6.70 5.97 5.42
Adjusted EPS (€) 4.47 4.16 3.49 5.08 5.82
Growth in EPS (%) 8.54 -6.80 -16.1 45.3 14.6
Dividend (€) 0.68 0.68 0.63 0.63 0.69
Sales (€th) 151,522 175,548 192,250 222,000 237,000
Net result margin (%) 5.82 4.57 3.39 4.48 4.80
Attributable net profit (€th) 8,737 8,144 6,834 9,933 11,380
ROE (after tax) (%) 15.8 12.9 10.2 13.9 14.1
Gearing (%) 39.2 52.1 72.9 75.6 71.7
Benchmarks Values (€) Upside Weight
DCF 68.9 103 % 35 %
NAV/SOTP per share 34.7 2 % 20 %
EV/Ebitda Peers 45.2 33 % 20 %
P/E Peers 59.9 77 % 10 %
Dividend Yield Peers 15.3 -55 % 10 %
P/Book Peers 41.3 22 % 5 %
TARGET PRICE 49.7 47 % 100 %
Conflicts of interest Corporate broking NO
Trading in corporate shares NO
Analyst ownership NO
Advising of corporate (strategy, marketing, debt, etc) NO
Research paid for by corporate YES
Provision of corporate access paid for by corporate NO
Link between AlphaValue and a banking entity NO
Brokerage activity at AlphaValue NO
11/01/2013 A sensible acquisition to start the year. M&A /Corp. Action
Fact On 9 January, Poujoulat announced that it had acquired VA STAAL, a Danish company and a European leader for industrial steel stacks with a unique know-how in large size projects (up to 6m diameter and 130m high).
Analysis Thanks to this acquisition, the Poujoulat group becomes the European leader in large size projects with total turnover of around €35m in this business and a European market share of more than 20%. Bringing together the companies BEIRENS (manufacturing and installation of industrial stacks), MCC21 (audit, maintenance and services) and now VL STAAL, the Poujoulat group's industrial steel stacks division will offer a comprehensive range of products and services, generating 60% of its sales in export markets (versus c.15% for the Group as a whole). In this segment, Poujoulat will now lead the French, Scandinavian and German markets while also having a presence in Benelux, the UK, Ukraine, Russia, the Middle East and North Africa. In 2012, VL STAAL generated sales of around €15m and a net margin of over 10%, comfortably above that of the Group which should approach 4% in 2013e (without VL STAAL). Other than this boost to sales (+7% of external growth in 2013 thanks to this acquisition alone) and the associated expansion in margins (around +45bp over 2013), the synergies expected for the Group should also be significant.
Impact We will upgrade our forecasts to take into account the additional sales and the improvement in the Group's profitability following this acquisition.
11/01/2013 Target upgrade by 9.6%
2012 : € 3.49 vs 3.52 -0.69 %2013 : € 5.08 vs 4.22 +20.3 %
We have upgraded our 2013 (and 2014) EPS forecasts following the Poujoulat group’s acquisition of Danish company VL STAAL, which should generate 2013 turnover of around €16m for a net profit approaching €1.7m. We estimate the additional sales and net margin for 2013 associated with this transaction to be, respectively,+7% and +45bp.
€ 68.9 vs 63.0 +9.33 %
We have upgraded our 2013 (and 2014) EPS forecasts following the Poujoulat group’s acquisition of Danish company VL STAAL, which should generate 2013 turnover of around €16m for a net profit approaching €1.7m. We estimate the additional sales and net margin for 2013 associated with this transaction to be, respectively,+7% and +45bp.
Change in EPS
Change in DCF
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Updates
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 2
27/11/2012 Q3 acceleration in activity Publication Res./CA
Actualité In Q3 12, Poujoulat reported sales up by 4.2% to €43.9m, taking the sales growth over nine months to +6.3%, to €125m.
Analyse Q3 sales growth slowed relative to H1 (+7.5%), but note that the good first half performance was exclusively based on a very strong Q1(+14.5%), whereas Poujoulat had posted a marked slowdown in its Q1 sales (-0.5%). This thus represents good news in that the sales trend has again been positive over the past few months. The rebound in sales over this quarter was mainly in "France" (+5.7%, to €38.2m), whereas "export" activity saw a significant slowdown (-5.3%, to €5.7m). Against a depressed economic backdrop, the Group continues to gain market shares and pursue its international development, something which constitutes, alongside energy efficiency and wood energy, one of the Group's major future growth relays, explaining the substantial investment over the 2011-2013 period. Multiple marketing and commercial initiatives - and notably participation in the Vendée Globe - will also continue to drive sales and facilitate the launch of new products, innovation remaining at the heart of the Group's strategy. The pick-up in activity as of October currently underpins a growth forecast of around 10% for the full year 2012 (management guidance at the end of H1 was for growth of between +5% and 10%), with a H2 2012 result close to that of 2011, which will ultimately lead to significantly lower earnings.
Impact Little new news barring the more optimistic tone from management on the growth in full year sales. We remain buyers of the stock.
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Achat)Matériaux de construction / France
Mises à jour
11 janvier 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 3
Stock Price and Target Price
Earnings Per Share & Opinion
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Target Price & Opinion
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 4
Poujoulat is the leading European manufacturer of chimneys and flues for houses/apartments (65% of sales), industry (20% of sales) and public authorities (15% of sales). The Group is active both on the new construction and renovation segments, with an up-market positioning as regards all customer profiles, particularly specialised distributors (70% of sales) and builders/installers (15%). In terms of products, insulated ducts accounted for 44% of the Niort-based group’s sales, single wall flue pipes and flexible ducts represent 18%, roof outlets 15%, energy 13% and industrial chimneys 10%. In France, where more than 85% of Poujoulat’s business is generated (chimneys are voluminous products making transport costs very expensive), chimney sales grew substantially at the beginning of the 2000s, the market registering growth of nearly 95% between 2002 and 2006, driven by a number of favourable elements. Among these inciting factors, the creation of a tax credit on the purchase of wood-burning domestic heating appliances (from 40% in 2005 it was pushed up to 50% in 2006, before being progressively reduced since then, standing at 15% in 2012), the dynamism of the home maintenance market, boosted by a reduction in VAT to 5.5% on home improvements and alterations (taken back up to 7% in 2012), the rise in the cost of fossil fuels used for domestic heating (oil and gas) and a broader ecological awareness which explains the incitement of public authorities in favour of renewable energy producers (NB: renewable energies only represented 18% of world energy consumption in 2011, 11% for fuel wood alone, 4% for hydroelectricity and 1.5% for biomass/solar energy). Between 2007 and 2009, a period marked by new thermal regulations and a reduction in tax incentives, the fireplace market in France evolved towards more technical products. That is when Poujoulat opted to diversify into renewable energies – mainly into wood fuels, the prime renewable energy source used in buildings – to the point of becoming one of the leading players on the “fuel wood” market (wood pellets, densified logs and firewood). Today, it is estimated that 40 million cubic metres of wood are consumed each year in France, knowing that 6 million French households use wood as a source of energy. It is worth noting that Poujoulat’s first “premium” log factory, located in the department of the Indre (Bois Factory 36) has an annual capacity of 150,000 cubic metres. Very shortly, there will be two additional factories, one in the Loire (Bois Factory 42), the other in the Haute-Saône (Bois Factory 70), giving the company a total capacity of 350,000 cubic metres by the end of 2013. Established in 1950, and initially specialised in industrial sheet metal processing, Poujoulat moved into manufacturing stove pipes as from the 1960s, then into smoke evacuation ducts when, in 1975, the company was taken over by Yves Coirier (current Chairman of the Supervisory Board). In 1988, the company was floated on the Stock Exchange. At the beginning of the 90s, the company embarked on a process of external growth in France (acquiring Tôlerie Forézienne and Westaflex Bâtiment) and internationally, especially in Belgium (Poujoulat BeLux) and the United Kingdom (Poujoulat UK). In 2001, Poujoulat acquired the company Beirens. Between 2002 and 2006, Poujoulat recorded dual-digit sales growth, boosted by a favourable environment. 2007 was marked by a new phase in the company’s operational diversification with the creation of Euro Energies (wood fuel trading), which constituted a major turnaround in the development of the Group. Two years later, the German company LIVE GmbH (manufacturing and trading in metal conduits) was acquired. Between 2011 and 2012, Poujoulat successively launched Bois Factory 36, Bois Factory 70, Solaires-Energies (marketing photovoltaic systems) and Bois Factory 42, confirming its determination to intensify its presence in the renewable energy sector. From a more operational point of view, despite market conditions proving difficult in 2009 and a context marked by the ongoing European sovereign debt crisis, the instability of raw material costs and particularly mild temperatures, the Group has still managed to achieve a dual-digit pace of growth (+10.8% in 2010 and +15.9% in 2011), mainly due to the high performance of the “Wood and renewable energies” division, up 30% over the previous financial year. This division now accounts for some 8% of sales. Guidance for 2012 comprises annual sales growth close to 10%, a significant slowdown in construction and public contracts likely to be more than offset by the positive effects on Poujoulat’s business of the high prices of fossil fuels and the implementation of new thermal regulations. Looking ahead to 2013-2014, a significant proportion of sales growth should come from the “Wood and renewable energies” business, following the major investments made in this area in the period 2010 to 2014. It should also be noted that Poujoulat is in the process of setting up in China, with the aim of being operational by 2014, this market representing virtually half of the world industrial chimney market.
Businesses & Trends
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Businesses & Trends
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 5
We address exposures (eg. how much of the turnover is exposed to the $ ) rather than sensitivities (say, how much a 5% move in the $ affects the bottom line). This is to make
comparisons easier and provides useful tools when extracting relevant data. Actually, the subject is rather complex on the ground. The default position is one of an investor managing in €. An investor in £ will obviously not react to a £ based stock trading partly in € as would a € based investor. In addition, certain circumstances can prove difficult to unravel such as for eg. a € based investor confronted to a Swiss company reporting in $ but with a quote in CHF... Sales exposure is probably straightforward but one has to be careful with deep cyclicals. Costs exposure is a bit less easy to determine (we do not allow for hedges as they can only be postponing the day of reckoning). How much of the equity is exposed to a given subject is rarely straightforward but can be quite telling In addition, subjects are frequently intertwined. A $ exposure may encompass all revenues in $ pegged currencies and an emerging currency exposure is likely to include $ pegged currencies as well. Exposure to global warming issues is frequently indirect and may require to stretch a bit imagination.
Sector 12/11A 12/12E 12/13E 12/14E Change 12E/11 Change 13E/12E
€th of % total
€th of % total
Fabrication et négoce de con...
Advanced Materials
200,508 207,630 232,545 240,555 7,122 43 % 24,915 84 %
Bois et énergie solaire
Advanced Materials
13,432 21,148 30,525 41,475 7,716 46 % 9,377 32 %
Other -38,392 -36,528 (1)
-41,070 -45,030 1,864 11 % -4,542 -15 %
Total sales 175,548 192,250 222,000 237,000 16,702 100 % 29,750 100 %
Divisional Breakdown Of Revenues
1. Start-up of Solaires-Energies business activity
Revenues Costs Equity
Dollar 0.0 % 0.0 % 0.0 %
Emerging currencies 0.5 % 0.5 % 0.0 %
Key exposures
France 84.5 %
Belgium 4.1 %
UK 3.1 %
Europe 6.2 %
Other 2.1 %
Sales by geography
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Businesses & Trends
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 6
Historically, Poujoulat SA, the parent company, generates some 70% of net income, with net margins of between 4.5% and 5.50%. The second largest contributor to results is the Tôlerie Forézienne subsidiary (manufacturing of rigid metallic conduits for the French market), which registers some of the Group’s highest margins - Tolerie Forézienne and Poujoulat BeLux being the only two subsidiaries with margins near on 10% - followed by Westaflex Bâtiment (manufacturing of flexible metallic conduits for the French market), whose margins are significantly lower, at around 4%. The “Wood and renewable energies” activities are currently generating losses because of particularly high depreciation and factory openings which are progressive, so the business is not yet operating at full capacity. This business activity essentially involves dealing with and marketing to professionals who sell to private individuals (professional networks) – under the “Woodstock” and “Crépito” brand names – high-performance fuel wood for wood-fuelled heating appliances. It all starts with a rigorous selection of the wood from suppliers, followed by drying and preparation processes. The products are then packaged or shipped in bulk, knowing that production and storage capacities are sized to guarantee fuel availability all-year round. These products are permanently quality checked in the CERIC laboratory, which is the benchmark in the combustion of wood fuel. Since end-2011, Euro Energies is operating 3 high-performance fuel wood production sites: BF36 in the Indre, BF42 in the Loire and BF70 in Haute-Saône. This “Wood and renewable energies” activity, destined to achieve higher capacity over the next 3 years (according to management, within this time frame it should represent around 25% of the activity), recorded its heaviest loss in 2011 (€724k at the end of the first full financial year of Bois Factory 36 which delivered a loss of €575k, 2/3 of which coming from depreciation expenses). As fulfilling management’s ambitions regarding this activity is a crucial factor in the valuation of the Group, we have chosen to adopt a somewhat conservative attitude by estimating a net profit of about €1m in 2014, which would represent c. 10% of total Group net profit. Overall, Poujoulat Group’s net margins have proved relatively resilient throughout the crisis, moving up from 4.9% in 2007 to an average 5.9% in 2009 and 2010. Conversely, 2011 saw margins fall back quite significantly due to the soaring price of raw materials – the main raw material used is stainless steel, which represents about 50% of the costs of goods sold – but also, and especially, the increased investments - €23.5m in 2011 compared with €8.5m in 2010 and €4.5m in 2009 – and substantial commercial investments. In the long run, and to fully benefit from the market’s growth potential, sector players will need to pursue their efforts, specifically focusing on the post-tax credit scenario (as from 31/12/2015), which instigated the boom in sales as from the middle of the previous decade. The two major challenges will therefore be to maintain profitability in order to underpin innovation (with metal and energy raw material prices rising, this forces chimney manufacturers to pass on these increases in their selling prices, which equally impacts sales volumes), but also to guarantee coherence within the sector, as chimney retailing is extremely fragmented in France, effectively representing the weak link in the manufacturers’ value chain (the predominance of multi-brand sales outlets adversely affects the dissemination of brands for which the identity tends to become an overriding competitive advantage).
12/11A 12/12E 12/13E 12/14E Change 12E/11 Change 13E/12E
€thof % total €th
of % total
Fabrication et négoce de conduits et cheminées métalliques
8,904 8,347 10,536 11,096 -557 37 % 2,189 64 %
Bois et énergie solaire -724 -1,321 -24.9 939 -597 40 % 1,296 38 %
Other/cancellations -161 -505 (1) -572 -654 -344 23 % -67 -2 %
Total 8,019 6,521 9,940 11,380 -1,498 100 % 3,419 100 %
12/11A 12/12E 12/13E 12/14E
Fabrication et négoce de conduits et cheminées ...
4.44 % 4.02 % 4.53 % 4.61 %
Bois et énergie solaire -5.39 % -6.24 % -0.08 % 2.26 %
Total 4.57 % 3.39 % 4.48 % 4.80 %
Money Making
Divisional NET RESULT
1. Start-up of Solaires-Energies business activity
Divisional NET RESULT margin
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Money Making
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 7
Poujoulat is showing net debt of around €50m but it is important to note that only half of this figure constitutes genuine debt, insofar as some €30m is used to pay suppliers cash in return for a discount (tactical choice by management, in the knowledge that the discount rate is 7x higher than the cost of short-term funding, which enables Poujoulat to generate financial income almost equal to the total cost of its debt). As a result, the Poujoulat Group has almost no trade payables (around €10m). 2011 marked an important stage in Poujoulat’s development. This is because, its industrial investments, which amounted to about 8% of sales on average over the previous 5 years, soared to almost 14% of sales (€24m), and should remain buoyant in 2012 (nearly 9% of sales), especially in order to get the “Wood and renewable energies” activity up to full steam, which already represented more than half of the investment figure in 2011. The investment programme, whose 3 key focus areas are energy efficiency, renewable energies and exports (market entry into China), should ease back by end-2014. At the same time, the WCR has also increased significantly since 2010, mainly due to the increase in the “stocks” item (60% of this increase is due to raw materials and fuels), but also to the “trade receivables” item, in a context of an increase in average payment terms and relatively long supply lead-times. The combination of these two elements – high investments and increase in WCR – is the reason for 2011’s higher debt ratios, gearing above 50% (against less than 40% in 2010), but especially the net debt/EBITDA ratio at more than 2.5x (against 1.3x in 2010, the slight decrease in 2011 EBITDA accentuating the effect slightly). As dividends were no longer covered by the FCF, and the investment programme had not been completed, the company decided to suspend its uninterrupted dividend growth policy, despite a particularly low payout (historically around 15%). Nevertheless, gross debt – evenly balanced between short and long-term debt – remains at a reasonable level. EBITDA coverage of financial expenses therefore exceeds 10x. It should also be specified that the average maturity of this gross debt is approximately 4.5 years, which is a relatively short maturity for an industrial business. The Group works with diversified funding sources. As at 31/12/2011, Poujoulat had €38m worth of short-term credit lines available.
12/11A 12/12E 12/13E 12/14E
EBITDA €th 17,597 17,491 21,851 23,844
Funds from operations (FFO) €th 13,529 7,679 16,609 17,905
Ordinary shareholders' equity €th 66,757 67,114 75,520 85,347
Gross debt €th 60,746 69,746 75,746 74,746
o/w Less than 1 year - Gross debt €th 29,593 (2) 33,977 (2) 36,900 (2) 36,413 (2)
o/w 1 to 5 year - Gross debt €th 25,774 29,593 32,138 31,714
o/w Beyond 5 years - Gross debt €th 5,379 6,176 6,707 6,619
+ Gross Cash €th 15,186 17,430 13,878 14,294
= Net debt / (cash) €th 45,560 52,316 61,868 60,452
Other financing €th 60,746 69,746 75,746 74,746
Undrawn committed financing facilities €th 38,000
Gearing (at book value) % 52.1 72.9 75.6 71.7
Adj. Net debt/EBITDA(R) x 2.59 2.99 2.83 2.54
Adjusted Gross Debt/EBITDA(R) x 3.60 4.12 3.58 3.24
Interest cover (x) x 37.2 17.4 44.2 52.1
FFO/Net debt % 29.7 14.7 26.8 29.6
(Gross cash+ "cash" FCF+undrawn)/ST debt x 1.19 0.35 0.15 0.46
"Cash" FCF/ST debt x -0.60 -0.16 -0.23 0.07
Debt
Funding - Liquidity
2. The < 1 year high debt policy is based on a management choice in the current context of very low rates (cash payment to suppliers in return for discount).
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Debt
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 8
Due to the absence of real comparables for Poujoulat’s activities, the peers used in our valuation based on the comparables valuation method come from very disparate sectors such as: Construction & Construction Materials, Non-Food Retail, Capital Goods,… Our DCF model is based on an average growth of sales of 5% and an EBITDA of 5.75%, hence meaning that EBITDA margin should reach 11% by 2022, which in our view is conservative given the future high margins of the “Wood and renewable energies” activity. Furthermore, the currently very high CAPEX figures should progressively be reduced in the years to come (investment peak in 2011), likewise for the frequency of acquisitions. For our Sum of the Parts valuation, we value the two activities by using a price-earnings ratio of 10x for the "Chimneys and associated products” business and a price of €16m for the "Wood and renewable energies” division, which corresponds to the price at which the capital increase was made. At end-December 2012, a set of quoted peers comprising companies such as Centrotec (13.5x), Rougier (23.7x), Somfy (13.6x), Cogra (23.6x), Moulinvest (14.1x) and Sika (22.5x) is trading at significantly higher price-earnings levels (pre-exceptional PE). These ratios will apply to the average result for the years 2012 to 2014 for the “Chimney” activity and to a conservative 2014 result for the “Wood and renewable energies” activity”.
Benchmarks Values (€) Upside Weight
DCF 68.9 103 % 35 %
NAV/SOTP per share 34.7 2 % 20 %
EV/Ebitda Peers 45.2 33 % 20 %
P/E Peers 59.9 77 % 10 %
Dividend Yield Peers 15.3 -55 % 10 %
P/Book Peers 41.3 22 % 5 %
Target Price 49.7 47 %
Computed on 18 month forecasts P/E (x) Ev/Ebitda (x) P/Book (x) Yield(%)
Peers ratios 11.8 6.92 1.05 4.18
Poujoulat's ratios 6.69 5.91 0.86 1.89
Premium 0.00 % 0.00 % 0.00 % 0.00 %
Default comparison based valuation (€) 59.9 45.2 41.3 15.3
Saint-Gobain 11.1 6.84 0.92 3.89
Legrand 15.4 8.72 2.40 3.42
UPM-Kymmene 10.4 6.03 0.62 7.11
Imerys 11.0 6.54 1.44 3.52
Valuation
Valuation Summary
Comparison based valuation
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Valuation
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 9
12/11A 12/12E 12/13E 12/14E Growth 12/15E 12/22E
Sales €th 175,548 192,250 222,000 237,000 5.00 % 248,850 350,157
EBITDA €th 17,597 17,491 21,851 23,844 5.75 % 25,215 37,293
EBITDA Margin % 10.0 9.10 9.84 10.1 10.1 10.7
Change in WCR €th -7,932 3,908 -8,418 -4,244 2.00 % -4,329 -4,973
Total operating cash flows (pre tax) €th 9,723 15,399 13,433 19,600 20,886 32,320
Corporate tax €th -4,032 -3,212 -4,896 -5,605 2.00 % -5,717 -6,567
Net tax shield €th -99.9 -206 -134 -131 0.00 % -131 -131
Capital expenditure €th -23,278 -17,000 -16,500 -11,000 -3.50 % -10,615 -8,272
Capex/Sales % -13.3 -8.84 -7.43 -4.64 -4.27 -2.36
Pre financing costs FCF (for DCF purposes)
€th -17,687 -5,018 -8,096 2,864 4,423 17,350
Various add backs (incl. R&D, etc.) for DCF purposes
€th
Free cash flow adjusted €th -17,687 -5,018 -8,096 2,864 4,423 17,350
Discounted free cash flows €th -17,687 -5,018 -7,515 2,467 3,537 8,238
Invested capital € 117 123 141 149 144 112
DCF Valuation Per Share
WACC % 7.73
PV of cashflow FY1-FY11 €th 44,429
FY11CF €th 17,697
Normalised long-term growth"g" % 2.00
Terminal value €th 308,700
PV terminal value €th 146,577
PV terminal value in % of total value % 76.7
Total PV €th 191,006
Avg net debt (cash) at book value €th 57,092
Provisions €th 2,310
Unrecognised actuarial losses (gains) €th 0.00
Financial assets at market price €th 0.00
Minorities interests (fair value) €th -3,130
Equity value €th 134,734
Number of shares Th 1,956
Implied equity value per share € 68.9
Assessing The Cost Of Capital
Synthetic default risk free rate % 4.00
Target equity risk premium % 5.00
Tax advantage of debt finance (normalised)
% 30.0
Average debt maturity Year 5
Sector asset beta x 0.87
Debt beta x 0.30
Market capitalisation €th 66,289
Net debt (cash) at book value €th 52,316
Net debt (cash) at market value €th 50,082
Company debt spread bp 150
Marginal Company cost of debt % 5.50
Company beta (leveraged) x 1.33
Company gearing at market value % 78.9
Company market gearing % 44.1
Required return on geared equity % 10.7
Cost of debt % 3.85
Cost of ungeared equity % 8.36
WACC % 7.73
DCF Calculation
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
DCF
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 10
% owned
Valuation technique
Multiple used
Valuation at 100%
(€th)
Stake valuation
(€th)
In currency per share
(€)
% of gross assets
Cheminées et produit... 100 % PE 10.0 91,500 91,500 46.8 90.1 %
Bois et énergies reno... 100 % Adj.
historical price
16,000 16,000 8.18 15.8 %
Operating revenues
Ebitda
Ebitda margin
Operating profit
Operating margin
Adj. Attrib. Net profit
Free cash flow
France
Belgium
UK
Europe
Other
Fabrication et négoce...
Bois et énergie solaire
Other
Total sales
NET RESULT Analysis
Fabrication et négoce...
Fabrication et négoce...
Bois et énergie solaire
Bois et énergie solaire
Other/cancellations
Other/cancellations
Total
Total
NET RESULT margin
Sales
Sales growth
CONSOLIDATED P&...
Sales
Sales
Sales
Adjusted P/E
Change in sales
Change in sales
Sales per employee
Sales per staff
Staff costs
Purchases and extern...
Staff costs
Staff costs per emplo...
Change in staff costs
Change in staff costs
Change in staff costs
Staff costs per emplo...
Operating lease pay...
Change in unit cost of...
Cost of sales/COGS (...
EBITDA
EBITDA
NAV/SOTP Calculation
1. Net debt of the parent company Poujoulat SA
2. Provisions and minority interests
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 11
EBITDA
EBITDA
EBITDA
of which controlled ...
EBITDA(R)
EBITDA(R) margin
EBITDA(R) margin
EBITDA(R) margin
EBITDA(R) per emp...
Depreciation
Depreciation
Depreciation
Depreciations/Sales
Amortisation
of which amortisatio...
Additions to provisions
Reduction of provisions
Underlying operating ...
Underlying operating ...
Underlying operating ...
Underlying operating ...
Underlying operating ...
Other income/expens...
Other inc./ exp. (non ...
Mark to market on var...
Operating profit (EBIT)
Operating profit (EBIT)
Interest expenses
Earnings from joint ve...
Actual dividends fro...
Actual accrued cas...
Impairment charges/g...
Operating profit (EBIT)
of which effectively...
Financial income
Other financial incom...
Net financial expenses
Net financial expense
Net financial expense
Net financial expense
of which related to p...
of which related to p...
of which related to ...
Pre-tax profit before e...
Exceptional items an...
Exceptional items & o...
Exceptional items & o...
of which cash (cost)...
Current tax
Impact of tax loss carr...
Deferred tax
Corporate tax
Corporate tax
Corporate tax
Tax rate
Net margin
Equity associates
Equity associates
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 12
Equity associates
Equity associates
Actual dividends rec...
Actual dividends rec...
Minority interests
Minority interests
Minority interests
Minority interests
Actual dividends pai...
Actual dividends pai...
Income from disconti...
Attributable net profit
Impairment charges/g...
Other adjustments
Adjusted attributable ...
Adjusted attributable ...
Adjusted attributable ...
Adjusted attributable ...
Dividend yield
Funds from operation...
EBITDA
EBITDA
Interest expense savi...
Fully diluted adjusted ...
NOPAT
NOPAT
NOPAT
NOPAT
CASH FLOW STAT...
Change in WCR
Change in WCR
EBITDA
Change in WCR
Actual div. received fr...
Actual dividends recei...
of which (increases)/...
of which increases i...
of which increases i...
of which (increases)/...
of which increases/(...
of which increases i...
of which increases/(...
Paid taxes
Paid taxes
Actual dividends recei...
Exceptional items
Exceptional items
Paid taxes
Exceptional items
Other operating cash ...
Other operating cash ...
Total operating cash f...
Total operating cash f...
Other operating cash ...
Total operating cash f...
Capital expenditure
Capital expenditure
Capital expenditure
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 13
Total investment flows
Total investment flows
Capital expenditure
Net investments in sh...
Capex as a % of depr...
Net investments in sh...
Other investment flows
Net interest expense
Net interest expense
Total investment flows
Dividends (parent co...
Dividends (parent co...
Net interest expense
Of which (acquisition...
Of which (acquisition...
of which cash intere...
Dividends (parent co...
Dividends to minoritie...
Dividends to minoritie...
New shareholders' eq...
Dividends (parent co...
New shareholders' eq...
Dividends to minoritie...
Dividends to minoritie...
New shareholders' eq...
New shareholders' eq...
of which (acquisition...
Roe (return on equity...
Shareholders funds (...
Net debt
Average gearing
Capex
Change in gross debt
Total financial flows
Total financial flows
Other financial flows
Change in cash positi...
Change in cash positi...
Change in net financi...
Free cash flow (pre di...
Free cash flow (pre di...
Total financial flows
Change in scope of c...
----
Change in cash positi...
Change in net debt p...
Free cash flow (pre di...
Capitalised R&D
Goodwill
Ordinary shareholder...
BALANCE SHEET
Contracts & Rights (in...
Other intangible assets
Goodwill
Goodwill
Goodwill
Total intangible
Total intangible
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 14
Total intangible
Concession intangibl...
Tangible fixed assets
Other intangible assets
Tangible fixed assets
Tangible fixed assets
Tangible fixed assets
Financial fixed assets...
Financial fixed assets...
Financial fixed assets
Financial hedges (LT ...
Other financial assets...
of which available f...
WCR
WCR
WCR
WCR
of which trade & rec...
of which inventories ...
of which payables (+)
of which other curre...
Other current assets
Other assets
Other assets
of which tax assets (+)
Total assets (net of s...
Total assets (net of s...
Total assets (net of s...
Total assets (net of s...
Ordinary shareholder...
Quasi Equity & Prefer...
Ordinary shareholder...
Ordinary shareholder...
Ordinary shareholder...
Gross debt
Pension ratio
o/w Less than 1 yea...
o/w 1 to 5 year - Gr...
of which Y+2
of which Y+3
of which Y+4
of which Y+5
o/w Beyond 5 years...
Preference shares
Quasi Equity & Prefer...
Minority interests
Provisions for pensions
Minority interests
Minority interests
Minority interests
Provisions for pensions
Provisions for pensions
Provisions for pensions
Other provisions for ri...
Other provisions for ri...
Other provisions for ri...
Deferred tax liabilities
Total provisions for ri...
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 15
Total provisions for ri...
Tax liabilities
Tax liabilities
Other liabilities
Other liabilities
Other liabilities
Net debt / (cash)
Total liabilities and sh...
Net debt (cash)
Net debt (cash)
Net debt (cash)
+ Gross Cash
= Net debt / (cash)
----
Total liabilities and ...
Total liab. and shareh...
Average net debt / (c...
Bank borrowings
Issued bonds
Financial leases liabili...
Mortgages
Other financing
of which commercial...
----
----
Parent company net d...
Operating leases and ...
Off B/S business guar...
Contingent considerat...
Y-1 shareholders' eq...
+ Net profit of year
- Dividends (parent cy)
+ Additions to equity
o/w reduction (addit...
o/w stock option pr...
- Unrecognised actua...
+ Comprehensive inc...
Comprehensive inco...
= Year end sharehold...
EV/EBITDA(R)
CAPITAL EMPLOYED
Capital employed afte...
Capital employed afte...
EV/EBIT (underlying ...
Market Cap
EV/Sales
PROFITABILITY AN...
EV/Invested capital
ROE (after tax)
ROE (after tax)
Market cap
ROCE
ROCE (Nopat/net ca...
Gearing (at book val...
Gearing (at book val...
Europe
North America
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 16
+ Provisions (includin...
+ Unrecognised actua...
Adj. Net debt/EBITD...
Adj. Net debt/EBITD...
+ Net debt at year end
+ Leases debt equival...
Interest cover (x)
Interest cover (x)
VALUATION RATIOS
- Provisions for reserv...
- Financial fixed asset...
EV/EBITDA(R)
Reference P/E (benc...
Reference P/E (benc...
+ Minority interests (f...
= Enterprise Value
Free cash flow yield
Free cash flow yield
Undrawn committed fi...
PER SHARE DATA
Adjusted EPS (bfr gwi...
Growth in EPS
Reported EPS
Net dividend per share
Free cash flow per sh...
Operating cash flow p...
Book value per share
Restated NAV per sh...
----
Number of ordinary s...
Share class 2
Treasury stock (year ...
Number of shares net...
Number of shares net...
No. of shares net of tr...
Share class 3
Share class 4
Ordinaries to class ...
ROCE
Ordinaries to class ...
Ordinaries to class ...
Number of equivalent ...
Number of shares ma...
Treasury stock (year ...
Number of diluted sha...
Number of diluted sha...
Benchmark EPS
EPS before gwill amo...
Benchmark EPS
Number of shares net...
Number of common s...
Growth in EPS
Net dividend per share
Dividend
Conversion of debt i...
Goodwill per share (di...
EPS after goodwill a...
Settlement of casha...
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 17
Probable settlement...
Reported EPS
Book value per share
Other commitments...
Increase in shares ou...
Restated NAV per sh...
Restated NAV per sh...
Operating Cash flow ...
Number of diluted sha...
----
Adjusted EPS
Goodwill per share (di...
EPS after goodwill a...
Net dividend per share
Net dividend per share
EPS before goodwill ...
Actual payment
Preferential dividend
Payout ratio
P/Book
P/Book
Adjusted P/E
Dividend yield
Reported P/E
Dividend yield
Sales
EV/EBITDA(R)
EV CALCULATION
P/Book
Net result margin
Dividend yield
Market cap
Market cap
+ Provisions
Provisions
Attributable net profit
Preferred dividend yield
Free cash flow yield
Average stock price
Average preferred sto...
Unrecognised acturial...
+ Unrecognised acturi...
ROCE (NOPAT+leas...
----
Goodwill
Accumulated good...
All intangible assets
Accumulated intang...
Financial hedges (LT ...
Capitalised R&D
PV of non-capitalised ...
Other fixed assets
Accumulated depre...
WCR
Capital employed bef...
Other assets
Net debt at year end
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 18
+ Net debt at year end
----
Fabrication et négoce...
Bois et énergie solaire
Other
Total capital employed
CAPITAL INTENSITY
Operating cash flow (...
Reinvestment rate (ca...
Capital payout ratio (...
Unrecognised actuari...
Leases debt equivalent
+ Leases debt equival...
Financial fixed assets...
- Financial fixed asset...
ROE (after tax)
ROE (after tax)
ROCE (NOPAT/(net) ...
Capital employed afte...
+ Minority interests (f...
Minority interests (fair...
EV
= EV
Gearing (at book value)
Gearing
Gearing (at book value)
Adj. Net debt/EBITDA...
Adj. Net debt/EBITDA...
EV/EBITDA(R)
EV/EBITDA(R)
EV/Sales
EV/Sales
Interest cover (x)
Adjusted Gross Debt...
Interest cover (x)
FFO/Net debt
Total debt gross/mark...
(Gross cash+ "cash" ...
"Cash" FCF/ST debt
Tax burden (Net inco...
Interest burden (preta...
EBIT margin (EBIT/sa...
Assets rotation (Sales...
Financial leverage (A...
ROE
Synthetic default risk f...
Target equity risk pr...
Tax advantage of deb...
Average debt maturity
Sector asset beta
Sector Asset Beta
Debt beta
Market capitalisation
Net debt (cash) at bo...
Net debt (cash) at ma...
Company debt spread
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 19
Company debt spread
Marginal Company co...
Company beta (lever...
Company gearing at ...
Company market gea...
Required return on ge...
Cost of debt
Cost of ungeared equity
WACC
WACC
Keys to long term
Sales growth out years
EBITDA growth out y...
WC growth out years
Taxes growth out years
Tax shield growth out ...
Interest charges and t...
Capex growth out years
Implicit CAGR of free ...
Implicit CAGR of last ...
Total discounted free ...
Total AV discounted f...
Sales
EBITDA
EBITDA Margin
Change in WCR
Total operating cash f...
Corporate tax
Net tax shield
Capital expenditure
Capex/Sales
Pre financing costs F...
Various add backs (in...
Free cash flow adjusted
Discounted free cash ...
Invested capital
ALTERNATIVE ALP...
AlphaValue narrow F...
Various add backs (in...
Interest charges and t...
Alternative AV FCF a...
AV discounted free ca...
WACC
PV of cashflow FY1-...
FY11CF
Normalised long-term...
Terminal value
PV terminal value
PV terminal value in ...
Total PV
Avg net debt (cash) at...
Provisions
Unrecognised actuari...
Financial assets at m...
Minorities interests (f...
Equity value
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 20
Equity value
Number of shares
Implied equity value p...
Normalised equity yield
Synthetic default risk f...
Risk free rate 10 year...
Risk free rate 10 year £
Risk premium target
Risk premium comput...
Discount rate : US
Discount rate : UK
Discount rate : Euroz...
Discount rate : Nordic...
Discount rate : Switze...
Expected wage inflati...
Expected wage inflati...
Expected wage inflati...
Expected wage inflati...
Expected wage inflati...
Expected wage inflati...
Bonds: normalised ex...
Equities : normalised ...
Property : normalised ...
Other/alternative ass...
Cash: normalised exp...
Expected average re...
Average term of pay...
Years needed to satis...
Annual increase in he...
Normalised corporate...
----
Average workforce
South Americas
Asia
Other key countries
----
Total staff costs
Wages and salaries
of which social secu...
Equity linked payments
Pension related costs
Benefits related paym...
----
ASSUMPTIONS
----
ACTUARIAL: PLAN...
% of assets in equities
% of assets in bonds
% of assets in property
% of other/alternative ...
% of assets in cash e...
Total
US exposure
UK exposure
Euro exposure
Nordic countries
Switzerland
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 21
Other
Total
----
Financial assumptions
Company variables of...
Discount rate
Company discount rate
Ordinary shareholder...
Company Future sala...
Future salary increase
Total benefits provisio...
Expected rate of retur...
Company Expected r...
of which funded pen...
AlphaValue variables ...
AlphaValue discount r...
AlphaValue Discount ...
of which unfunded p...
AlphaValue Future sa...
AlphaValue future sal...
of which benefits / h...
Unrecognised actuari...
AlphaValue expected ...
AlphaValue Expected...
Short term AV expect...
Short term AV expect...
Short term AV expect...
Short term AV expect...
Short term AV expect...
Short term AV expect...
Average term of pay...
Expected average re...
Annual rate of increas...
Corporate tax rate
Years needed to satis...
Corridor
Funded status surplu...
Unfunded status surpl...
Total surplus / (deficit)
----
Total unrecognised a...
Pension ratio
Company discount rate
----
Normalised recomput...
Provision (B/S) on fu...
Company future salar...
Provision (B/S) on un...
Normalised recomput...
Company expected ra...
Total pension provisio...
Normalised recomput...
Other benefits (health...
Other benefits (health...
Total benefit provisions
Funded obligations p...
Unfunded obligations ...
Total periodic costs
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 22
of which financial co...
of which incl. in labo...
of which incl. in inte...
Balance beginning of ...
Current service cost
Interest expense
Employees' contributi...
Impact of change in a...
of which impact of c...
of which impact of c...
Pension payments
Changes to scope of ...
Currency translation ...
Pension payments
Year end obligation
Other
Year end obligation
Funded : Impact of ac...
Value at beginning
Company expected re...
Actuarial gain /(loss)
Employer's contribution
Employer's contribution
Employees' contributi...
Changes to scope of ...
Currency translation ...
Pension payments
Other
Value end of period
Value end of period
----
Actual and normalise...
FUNDED CORRIDO...
PBO total
Plan value
----
Unrecognised actuari...
10% corridor at the b...
Beyond 10% linked to...
Average expected re...
Actuarial (gain) / loss ...
----
Unrecognised actuari...
Actuarial (gain) / loss ...
Actuarial (gain) / loss ...
Subtotal of actuarial (...
----
Unrecognised actuari...
----
FUNDED B/S IMPLI...
( Deficit ) / surplus o...
Unrecognized actuari...
Minimum liability adju...
Other
Net balance
Balance beginning of ...
Current service cost
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 23
Other
Year end obligation
Interest expense
Employees' contributi...
Impact of change in a...
of which Impact of c...
of which Impact of c...
Changes to scope of ...
Pension payments
Currency translation ...
Pension payments
Year end obligation
Unfunded : Impact of ...
----
UNFUNDED CORRI...
Unrecognised actuari...
10% corridor at the b...
Beyond 10% linked to...
Average expected re...
Actuarial (gain) / loss ...
----
Unrecognised actuari...
Actuarial (gain) / loss ...
Subtotal of actuarial (...
----
Unrecognised actuari...
----
UNFUNDED B/S IMP...
( Deficit ) / surplus o...
Unrecognised actuari...
Minimum liability adju...
Other
Net balance
Comparison based va...
DCF based
NAV based
PE based
EV/EBITDA based
P/book based
Yield based
Valuation
Other -5,922 -3.03 -5.83 %
Total gross assets 101,578 51.9 100 %
Net cash/(debt) by year end -30,586 (1) -15.6 -30.1 %
Commitments to pay -3,105 (2) -1.59 -3.06 %
Commitments received
NAV/SOTP 67,887 34.7 66.8 %
Number of shares net of treasury shares - year end (Th) 1,956
NAV/SOTP per share (€) 34.7
Current discount to NAV/SOTP (%) 2.35
EV/EBITDA
Liquidity 1 = (gross c...
Payout ratio
Compared companies
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 24
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
NAV/SOTP (edit)
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 25
- The Group is present in about 30 countries through 16 companies and is currently in the process of setting up in China, which constitutes a very high potential industrial market. - The Poujoulat Group is at the leading edge of internet development with 20 websites to its credit. Furthermore, poujoulat.fr is one of the most visited sites in the building sector, having recorded 2 million visits in 2011. - Poujoulat owns all its assets and its balance sheet contains virtually no goodwill or other intangible assets. - In a spirit of economy and ecology, 70% of the Group’s premises are heated using wood off-cuts from Bois Factory 36, and Poujoulat has also undertaken to replace the majority of its light fittings which should cut the Group’s lighting consumption in two. - Poujoulat products are eco-design and more than 95% recyclable.
Name % owned Of which % voting rights
Of which % free to float
Holding d'animation contrôlée par la famille Coirier 42.5 % 47.2 % 0.00 %
Famille Coirier 32.0 % 36.0 % 0.00 %
Apparent free float 25.5 %
Worth Knowing
Shareholders
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Worth Knowing
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 26
12/11A 12/12E 12/13E 12/14E
Sales €th 175,548 192,250 222,000 237,000
Sales growth % 15.9 9.51 15.5 6.76
Sales per employee €th 129 137 153 157
Purchases and external costs (incl. IT) €th -103,880 -115,662 -132,744 -141,599
Staff costs €th -51,050 -56,250 -64,400 -68,613
Operating lease payments €th
Cost of sales/COGS (indicative) €th
EBITDA €th 17,597 17,491 21,851 23,844
EBITDA(R) €th 17,597 17,491 21,851 23,844
EBITDA(R) margin % 10.0 9.10 9.84 10.1
EBITDA(R) per employee €th 13.0 12.4 15.1 15.8
Depreciation €th -5,607 -6,966 -6,890 -6,762
Depreciations/Sales % 3.19 3.62 3.10 2.85
Amortisation €th
Additions to provisions €th -434 -560 -480 -510
Reduction of provisions €th 835 460 800 850
Underlying operating profit €th 12,391 10,425 15,281 17,422
Underlying operating margin % 7.06 5.42 6.88 7.35
Other income/expense (cash) €th 0.00 -7.00 -7.00 0.00
Other inc./ exp. (non cash; incl. assets revaluation) €th
Earnings from joint venture(s) €th
Impairment charges/goodwill amortisation €th
Operating profit (EBIT) €th 12,391 10,418 15,274 17,422
Interest expenses €th -1,308 -1,325 -1,365 -1,345
of which effectively paid cash interest expenses €th -94.0
Financial income €th 1,214 820 920 908
Other financial income (expense) €th -239 -180 0.00 0.00
Net financial expenses €th -333 -685 -445 -437
of which related to pensions €th -85.0 -98.9 -103
Pre-tax profit before exceptional items €th 12,058 9,733 14,829 16,985
Exceptional items and other (before taxes) €th 0.00 0.00 0.00 0.00
of which cash (cost) from exceptionals €th
Current tax €th -4,032 -3,212 -4,896 -5,605
Impact of tax loss carry forward €th
Deferred tax €th 0.00 0.00 0.00 0.00
Corporate tax €th -4,032 -3,212 -4,896 -5,605
Tax rate % 33.4 33.0 33.0 33.0
Net margin % 4.57 3.39 4.47 4.80
Equity associates €th 0.00 0.00 0.00 0.00
Actual dividends received from equity holdings €th
Minority interests €th 118 313 0.00 0.00
Actual dividends paid out to minorities €th 0.00 0.00 0.00 0.00
Income from discontinued operations €th
Attributable net profit €th 8,144 6,834 9,933 11,380
Impairment charges/goodwill amortisation €th 0.00 0.00 0.00 0.00
Other adjustments €th
Adjusted attributable net profit €th 8,144 6,834 9,933 11,380
Interest expense savings €th
Fully diluted adjusted attr. net profit €th 8,144 6,834 9,933 11,380
NOPAT €th 8,674 7,357 10,766 12,267
Consolidated P&L
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Financials
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 27
12/11A 12/12E 12/13E 12/14E
Adjusted P/E x 7.35 9.61 6.67 5.83
Reported P/E x 7.35 9.61 6.67 5.83
EV/EBITDA(R) x 6.08 6.70 5.97 5.42
P/Book x 0.90 0.98 0.88 0.78
Dividend yield % 2.20 1.86 1.84 2.03
Free cash flow yield % -29.9 -8.37 -12.7 3.86
Average stock price € 30.6 33.6 33.9 33.9
12/11A 12/12E 12/13E 12/14E
EBITDA €th 17,597 17,491 21,851 23,844
Change in WCR €th -7,932 3,908 -8,418 -4,244
of which (increases)/decr. in receivables €th -3,394 12,518 -6,257 -3,155
of which (increases)/decr. in inventories €th -11,811 -2,095 -6,906 -3,482
of which increases/(decr.) in payables €th 3,425 -3,554 2,117 1,067
of which increases/(decr.) in other curr. liab. €th 3,848 -2,961 2,629 1,326
Actual dividends received from equity holdings €th 0.00 0.00 0.00 0.00
Paid taxes €th -4,367 -3,212 -4,896 -5,605
Exceptional items €th
Other operating cash flows €th 393 -6,000 0.00 0.00
Total operating cash flows €th 5,691 12,187 8,538 13,995
Capital expenditure €th -23,278 -17,000 -16,500 -11,000
Capex as a % of depreciation & amort. % 415 244 239 163
Net investments in shares €th -15.0 0.00 0.00 0.00
Other investment flows €th 34.0 0.00 0.00 0.00
Total investment flows €th -23,259 -17,000 -16,500 -11,000
Net interest expense €th -333 -685 -445 -437
of which cash interest expense €th -94.0 -600 -346 -334
Dividends (parent company) €th -1,300 -1,343 -1,244 -1,244
Dividends to minorities interests €th 0.00 0.00 0.00 0.00
New shareholders' equity €th 645 0.00 0.00 0.00
of which (acquisition) release of treasury shares €th 0.00 0.00 0.00 0.00
Change in gross debt €th 8,638 9,000 6,000 -1,000
Other financial flows €th 0.00 0.00 0.00 0.00
Total financial flows €th 7,889 7,057 4,410 -2,578
Change in scope of consolidation, exchange rates & other €th -673 0.00 0.00 0.00
Change in cash position €th -10,352 2,244 -3,552 417
Change in net debt position €th -18,990 -6,756 -9,552 1,417
Free cash flow (pre div.) €th -17,920 -5,498 -8,407 2,558
Operating cash flow (clean) €th 5,691 12,187 8,538 13,995
Reinvestment rate (capex/tangible fixed assets) % 22.4 26.0 22.0 13.9
Valuation Key Data
Cashflow Statement
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Financials
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 28
12/11A 12/12E 12/13E 12/14E
Goodwill €th 2,173 2,173 2,173 2,173
Other intangible assets €th 997 997 997 997
Total intangible €th 3,170 3,170 3,170 3,170
Tangible fixed assets €th 55,342 65,376 74,986 79,224
Financial fixed assets (part of group strategy) €th 0.00
Other financial assets (investment purpose mainly) €th 987 1,073 1,073 1,073
of which available for sale €th 60.0 0.00 0.00 0.00
WCR €th 58,304 54,396 62,814 67,058
of which trade & receivables (+) €th 52,954 40,436 46,693 49,848
of which inventories (+) €th 42,535 44,630 51,536 55,019
of which payables (+) €th 17,232 13,678 15,795 16,862
of which other current liabilities (+) €th 19,953 16,992 19,621 20,947
Other current assets €th 39.0 39.0 39.0 39.0
of which tax assets (+) €th 0.00
Total assets (net of short term liabilities) €th 117,842 124,054 142,082 150,564
Ordinary shareholders' equity (group share) €th 66,757 67,114 75,520 85,347
Minority interests €th 1,687 1,374 1,374 1,374
Provisions for pensions €th 2,125 1,731 1,800 1,872
Other provisions for risks and liabilities €th 547 579 579 579
Deferred tax liabilities €th 1,166 940 940 940
Other liabilities €th 0.00 0.00 0.00 0.00
Net debt / (cash) €th 45,560 52,316 61,868 60,452
Total liabilities and shareholders' equity €th 117,842 124,054 142,082 150,564
Average net debt / (cash) €th 34,749 48,938 57,092 61,160
12/11A 12/12E 12/13E 12/14E
EV/EBITDA(R) x 6.08 6.70 5.97 5.42
EV/EBIT (underlying profit) x 8.63 11.2 8.54 7.42
EV/Sales x 0.61 0.61 0.59 0.55
EV/Invested capital x 0.92 0.95 0.93 0.86
Market cap €th 59,887 65,653 66,289 66,289
+ Provisions (including pensions) €th 2,672 2,310 2,379 2,451
+ Unrecognised actuarial losses/(gains) €th 0.00 0.00 0.00 0.00
+ Net debt at year end €th 45,560 52,316 61,868 60,452
- Financial fixed assets (fair value) & Others €th
+ Minority interests (fair value) €th -1,180 -3,130 0.00 0.00
= Enterprise Value €th 106,939 117,149 130,536 129,191
Balance Sheet
EV Calculations
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Financials
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 29
12/11A 12/12E 12/13E 12/14E
Adjusted EPS (bfr gwill amort. & dil.) € 4.16 3.49 5.08 5.82
Growth in EPS % -6.80 -16.1 45.3 14.6
Reported EPS € 4.16 3.49 5.08 5.82
Net dividend per share € 0.68 0.63 0.63 0.69
Free cash flow per share € -9.16 -2.81 -4.30 1.31
Operating cash flow per share € 2.91 6.23 4.36 7.15
Book value per share € 34.1 34.3 38.6 43.6
Number of ordinary shares Th 1,990 1,990 1,990 1,990
Number of equivalent ordinary shares (year end) Th 1,990 1,990 1,990 1,990
Number of shares market cap. Th 1,990 1,990 1,990 1,990
Treasury stock (year end) Th 34.0 34.0 34.0 34.0
Number of shares net of treasury stock (year end) Th 1,956 1,956 1,956 1,956
Number of common shares (average) Th 1,956 1,956 1,956 1,956
Conversion of debt instruments into equity Th
Settlement of cashable stock options Th
Probable settlement of non mature stock options Th
Other commitments to issue new shares Th
Increase in shares outstanding (average) Th 0.00 0.00 0.00 0.00
Number of diluted shares (average) Th 1,956 1,956 1,956 1,956
Goodwill per share (diluted) € 0.00 0.00 0.00 0.00
EPS after goodwill amortisation (diluted) € 4.16 3.49 5.08 5.82
EPS before goodwill amortisation (non-diluted) € 4.16 3.49 5.08 5.82
Actual payment €
Payout ratio % 16.2 17.9 12.3 11.8
Capital payout ratio (div +share buy back/net income) % 16.5 18.2 12.5
12/11A 12/12E 12/13E 12/14E
EBITDA €th 17,597 17,491 21,851 23,844
Funds from operations (FFO) €th 13,529 7,679 16,609 17,905
Ordinary shareholders' equity €th 66,757 67,114 75,520 85,347
Gross debt €th 60,746 69,746 75,746 74,746
o/w Less than 1 year - Gross debt €th 29,593 (2) 33,977 (2) 36,900 (2) 36,413 (2)
o/w 1 to 5 year - Gross debt €th 25,774 29,593 32,138 31,714
o/w Beyond 5 years - Gross debt €th 5,379 6,176 6,707 6,619
+ Gross Cash €th 15,186 17,430 13,878 14,294
= Net debt / (cash) €th 45,560 52,316 61,868 60,452
Other financing €th 60,746 69,746 75,746 74,746
Undrawn committed financing facilities €th 38,000
Gearing (at book value) % 52.1 72.9 75.6 71.7
Adj. Net debt/EBITDA(R) x 2.59 2.99 2.83 2.54
Adjusted Gross Debt/EBITDA(R) x 3.60 4.12 3.58 3.24
Interest cover (x) x 37.2 17.4 44.2 52.1
FFO/Net debt % 29.7 14.7 26.8 29.6
(Gross cash+ "cash" FCF+undrawn)/ST debt x 1.19 0.35 0.15 0.46
"Cash" FCF/ST debt x -0.60 -0.16 -0.23 0.07
Per Share Data
Funding - Liquidity 2. The < 1 year high debt policy is based on a management choice in the current context of very low rates (cash payment to suppliers in return for discount).
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Financials
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 30
12/11A 12/12E 12/13E 12/14E
Tax burden (Net income/pretax pre excp income) x 0.68 0.70 0.67 0.67
Interest burden (pretax inc./EBIT) x 0.97 0.93 0.97 0.97
EBIT margin (EBIT/sales) % 7.06 5.42 6.88 7.35
Assets rotation (Sales/Avg assets) x 1.70 1.59 1.67 1.62
Financial leverage (Avg assets /Avg equity) x 1.63 1.81 1.87 1.82
ROE % 12.9 10.2 13.9 14.1
12/11A 12/12E 12/13E 12/14E
Y-1 shareholders' equity €th 60,206 66,695 67,114 75,520
+ Net profit of year €th 8,144 6,834 9,933 11,380
- Dividends (parent cy) €th -1,300 -1,343 -1,244 -1,244
+ Additions to equity €th 645 0.00 0.00 0.00
o/w reduction (addition) to treasury shares €th 0.00 0.00 0.00 0.00
- Unrecognised actuarial gains/(losses) €th 0.00 0.00 0.00 0.00
+ Comprehensive income recognition €th -1,000 -5,072 -283 -309
= Year end shareholders' equity €th 66,695 67,114 75,520 85,347
12/11A 12/12E 12/13E 12/14E
Sales per staff €th 129 137 153 157
Staff costs per employee €th -37.6 -40.0 -44.5 -45.6
Change in staff costs % 14.2 10.2 14.5 6.54
Change in unit cost of staff % -42.6 6.50 11.1 2.51
Average workforce unit 1,358 1,405 1,448 1,505
Europe unit 1,345 1,390 1,430 1,475
North America unit 0.00 0.00 0.00 0.00
South Americas unit 0.00 0.00 0.00 0.00
Asia unit 0.00 0.00 0.00 0.00
Other key countries unit 13.0 15.0 18.0 30.0
Total staff costs €th -51,050 -56,250 -64,400 -68,613
Wages and salaries €th -51,050 -56,250 -64,400 -68,613
of which social security contributions €th -11,812 -13,000 -13,850 -14,690
Equity linked payments €th
Pension related costs €th 0.00 0.00 0.00
12/11A 12/12E 12/13E 12/14E
Fabrication et négoce de conduits et cheminées métalliques €th 200,508 207,630 232,545 240,555
Bois et énergie solaire €th 13,432 21,148 30,525 41,475
Other €th -38,392 -36,528 (1) -41,070 -45,030
Total sales €th 175,548 192,250 222,000 237,000
12/11A 12/12E 12/13E 12/14E
NET RESULT Analysis
Fabrication et négoce de conduits et cheminées métalliques €th 8,904 8,347 10,536 11,096
Bois et énergie solaire €th -724 -1,321 -24.9 939
Other/cancellations €th -161 -505 (1) -572 -654
Total €th 8,019 6,521 9,940 11,380
NET RESULT margin % 4.57 3.39 4.48 4.80
ROE Analysis (Dupont's Breakdown)
Shareholder's Equity Review (Group Share)
Staffing Analytics
Divisional Breakdown Of Revenues 1. Start-up of Solaires-Energies business activity
Divisional Breakdown Of Earnings 1. Start-up of Solaires-Energies business activity
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Financials
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 31
12/11A 12/12E 12/13E 12/14E
France % 86.8 84.5 (3)
Belgium % 3.69 4.15
UK % 2.62 3.11
Europe % 5.50 (4) 6.22 (4)
Other % 1.43 2.07 (1)
12/11A 12/12E 12/13E 12/14E
ROCE (NOPAT+lease exp.*(1-tax))/(net) cap employed adjusted % 7.43 5.98 7.64 8.21
Goodwill €th 2,173 2,173 2,173 2,173
Accumulated goodwill amortisation €th 0.00 0.00 0.00 0.00
All intangible assets €th 997 997 997 997
Accumulated intangible amortisation €th 0.00 0.00 0.00 0.00
Financial hedges (LT derivatives) €th 0.00 0.00 0.00 0.00
Capitalised R&D €th 0.00 0.00 0.00 0.00
PV of non-capitalised lease obligations €th 0.00 0.00 0.00 0.00
Other fixed assets €th 55,342 65,376 74,986 79,224
Accumulated depreciation €th 48,709 0.00 0.00 0.00
Capital employed before depreciation €th 165,525 122,942 140,970 149,452
WCR €th 58,304 54,396 62,814 67,058
Other assets €th 0.00 0.00 0.00 0.00
Unrecognised actuarial losses/(gains) €th 0.00 0.00 0.00 0.00
Capital employed after deprec. (Invested capital) €th 116,816 122,942 140,970 149,452
12/11A 12/12E 12/13E 12/14E
Fabrication et négoce de conduits et cheminées métalliques €th
Bois et énergie solaire €th
Other €th 116,816 122,942 140,970 149,452
Total capital employed €th 116,816 122,942 140,970 149,452
Revenue Breakdown By Country 3. First full year of activity for Solaires-Energies (marketing photovoltaic systems), Bois-Factory 70 (transforming and marketing fuel wood, acquired in Q4 2011) and MCC2I (expertise and maintenance of industrial chimneys, acquired in Q4 2011)
4. Particularly Germany
1. Start-up of Solaires-Energies business activity
Capital Employed
Divisional Breakdown Of Capital
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Financials
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 32
In 2011 the Poujoulat Group employed 1,358 staff – including some 200 people abroad, mainly in Poland, Germany, Belgium and the United Kingdom – compared to half that number in 2010. The bulk of the staff breaks down into workers (59%), management staff (31%) and sales staff (6%). In addition to the continuing growth in the Group’s staff numbers over the last 15 years (multiplied by 4 over the period, with 150 jobs created in 2011 alone), it should be noted that the profiles have changed considerably, moving to more qualified positions, thanks to a programme of training/innovation costing on average 4% of the total payroll. As regards its commitments in terms of pensions proper, they only amounted to some €2m in 2011, only just exceeding 3% of group equity. Being regularly provisioned, pension obligations present no concern.
12/11A 12/12E 12/13E 12/14E
Pension ratio % 3.08 2.51 2.33 2.15
Ordinary shareholders' equity €th 66,757 67,114 75,520 85,347
Total benefits provisions €th 2,125 1,731 1,800 1,872
of which funded pensions €th 0.00 0.00 0.00 0.00
of which unfunded pensions €th 2,125 1,731 1,800 1,872
of which benefits / health care €th 0.00 0.00 0.00
Unrecognised actuarial (gains)/losses €th 0.00 0.00 0.00 0.00
Company discount rate % 3.30 3.50 3.50 3.50
Normalised recomputed discount rate % 4.00
Company future salary increase % 2.00 2.00 2.00 2.00
Normalised recomputed future salary increase % 3.00
Company expected rate of return on plan assets % 1.00 1.00 1.00 1.00
Normalised recomputed expd rate of return on plan assets % 1.00
Funded : Impact of actuarial assumptions €th 0.00
Unfunded : Impact of actuarial assumptions €th 263
12/11A 12/12E 12/13E 12/14E
US exposure %
UK exposure %
Euro exposure % 100 100 100 100
Nordic countries %
Switzerland %
Other %
Total % 100 100 100 100
12/11A 12/12E 12/13E 12/14E
Funded status surplus / (deficit) €th 0.00 0.00 0.00 0.00
Unfunded status surplus / (deficit) €th -2,125 -2,473 -2,572 -2,674
Total surplus / (deficit) €th -2,125 -2,473 -2,572 -2,674
Total unrecognised actuarial (gains)/losses €th 0.00 0.00 0.00 0.00
Provision (B/S) on funded pension €th 0.00 0.00 0.00 0.00
Provision (B/S) on unfunded pension €th 2,125 1,731 1,800 1,872
Other benefits (health care) provision €th 0.00 0.00 0.00
Total benefit provisions €th 2,125 1,731 1,800 1,872
12/11A 12/12E 12/13E 12/14E
Funded obligations periodic costs €th 0.00 0.00 0.00 0.00
Unfunded obligations periodic costs €th 0.00 -85.0 -98.9 -103
Total periodic costs €th 0.00 -85.0 -98.9 -103
of which incl. in labour costs €th 0.00 0.00 0.00 0.00
of which incl. in interest expenses €th 0.00 -85.0 -98.9 -103
Pension matters
Summary Of Pension Risks
Geographic Breakdown Of Pension Liabilities
Balance Sheet Implications
P&L Implications
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Pension Risks
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 33
12/11A 12/12E 12/13E 12/14E
Balance beginning of period €th 0.00 0.00 0.00 0.00
Current service cost €th 0.00 0.00 0.00
Interest expense €th 0.00 0.00 0.00
Employees' contributions €th
Impact of change in actuarial assumptions €th 0.00 0.00 0.00
of which impact of change in discount rate €th 0.00
of which impact of change in salary increase €th 0.00
Changes to scope of consolidation €th
Currency translation effects €th
Pension payments €th
Other €th
Year end obligation €th 0.00 0.00 0.00 0.00
12/11A 12/12E 12/13E 12/14E
Value at beginning €th 0.00 0.00 0.00 0.00
Company expected return on plan assets €th 0.00 0.00 0.00
Actuarial gain /(loss) €th 0.00 0.00 0.00
Employer's contribution €th 0.00 0.00 0.00
Employees' contributions €th 0.00 0.00 0.00 0.00
Changes to scope of consolidation €th
Currency translation effects €th
Pension payments €th 0.00 0.00 0.00 0.00
Other €th
Value end of period €th 0.00 0.00 0.00 0.00
Actual and normalised future return on plan assets €th 0.00 0.00 0.00 0.00
12/11A 12/12E 12/13E 12/14E
Balance beginning of period €th 1,754 2,125 2,473 2,572
Current service cost €th 0.00 0.00 0.00
Interest expense €th 85.0 98.9 103
Employees' contributions €th
Impact of change in actuarial assumptions €th 263 0.00 0.00
of which Impact of change in discount rate €th -195
of which Impact of change in salary increase €th 458
Changes to scope of consolidation €th
Currency translation effects €th
Pension payments €th
Other €th 371
Year end obligation €th 2,125 2,473 2,572 2,674
Funded Obligations
Plan Assets
Unfunded Obligations
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Pension Risks
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 34
Name Function Birth date Date in Date out Compensation, in k€ (year) Cash Equity linked
Frédéric COIRIER M CEO 126 (2011)
Jean-Francois BÉNOT M CFO 130 (2011)
Philippe BULLIER M Senior Executive 136 (2011)
André PRUNIER M Senior Executive 143 (2010)
Stéphane THOMAS M Senior Executive 131 (2011)
Name Indep. Function Completion of current mandate
Birth date Date in Date out
Fees / indemnity, in k€ (year)
Value of holding, in k€ (year)
Yves COIRIER M President/Chairman of th... 38.9 (2010)
Jean MENUT M Member 38.9 (2010)
Michel CAMP M Member 10.1 (2010)
Louis DEPARIS M Member 10.1 (2010)
Hedwige DE PENFENTENYO F Member 2012
Yes / No Weighting One share, one vote 20 %
Chairman vs. Executive split 5 %
Chairman not ex executive 5 %
Independent directors equals or above 50% of total directors 20 % Full disclosure on mgt pay (performance related bonuses, pensions and non financial benefits)
10 %
Disclosure of performance anchor for bonus trigger 15 %
Compensation committee reporting to board of directors 5 %
Straightforward, clean by-laws 20 %
Governance score 75 100%
Ticking list of key governance issues Existing committees
Audit / Governance Committee
Compensation committee
Financial Statements Committee
Litigation Committee
Nomination Committee
Safety committee
SRI / Environment
Management
Board of directors
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Governance & Management
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 35
Accidents at work 25 % Of H.R. Score
Human resources development 35 % Of H.R. Score
Pay 20 % Of H.R. Score
Job satisfaction 10 % Of H.R. Score
Internal communication 10 % Of H.R. Score
Yes / No Rating Accidents at work 25 % 25/100
Set targets for work safety on all group sites? 40 % 10/100
Are accidents at work declining? 60 % 15/100
Human resources development 35 % 35/100
Are competences required to meet medium term targets identified? 10 % 4/100
Is there a medium term (2 to 5 years) recruitment plan? 10 % 4/100
Is there a training strategy tuned to the company objectives? 10 % 4/100
Are employees trained for tomorrow's objectives? 10 % 4/100
Can all employees have access to training? 10 % 4/100
Has the corporate avoided large restructuring lay-offs over the last year to date? 10 % 4/100
Have key competences stayed? 10 % 4/100
Are managers given managerial objectives? 10 % 4/100
If yes, are managerial results a deciding factor when assessing compensation level? 10 % 4/100
Is mobility encouraged between operating units of the group? 10 % 4/100
Pay 20 % 20/100
Is there a compensation committee? 30 % 6/100
Is employees' performance combining group performance AND individual performance? 70 % 14/100
Job satisfaction 10 % 0/100
Is there a measure of job satisfaction? 33 % 0/100
Can anyone participate ? 34 % 0/100
Are there action plans to prop up employees' morale? 33 % 0/100
Internal communication 10 % 10/100
Are strategy and objectives made available to every employee? 100 % 10/100
Human Ressources score: 90/100
Human Resources
HR Breakdown
HR Score
H.R. Score Building Prod. & Materials Poujoulat
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Governance & Management
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 36
: Strong momentum corresponding to a continuous and overall positive moving average trend confirmed by volumes
: Relatively good momentum corresponding to a positively-oriented moving average, but offset by an overbought pattern or lack of confirmation
from volumes
: Relatively unfavorable momentum with a neutral or negative moving average trend, but offset by an oversold pattern or lack of confirmation from
volumes
: Strongly negative momentum corresponding to a continuous and overall negative moving average trend confirmed by volumes
Momentum analysis consists in evaluating the stock market trend of a given financial instrument, based on the analysis of its trading flows. The main indicators used in our momentum tool are simple moving averages over three time frames: short term (20 trading days), medium term (50 days) and long term (150 days). The positioning of these moving averages relative to each other gives us the direction of the flows over these time frames. For example, if the short and medium-term moving averages are above the long-term moving average, this suggests an uptrend which will need to be confirmed. Attention is also paid to the latest stock price relative to the three moving averages (advance indicator) as well as to the trend in these three moving averages - downtrend, neutral, uptrend - which is more of a lagging indicator. The trend indications derived from the flows through moving averages and stock prices must be confirmed against trading volumes in order to confirm the signal. This is provided by a calculation based on the average increase in volumes over ten weeks together with a buy/sell volume ratio.
Momentum
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Graphics
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 37
Moving Average MACD & Volume
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Graphics
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 38
Sector Building Prod. & Materials
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Graphics
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 39
Fundamental Opinion It is implicit that recommendations are made in good faith but should not be regarded as the sole source of advice.
Recommendations are geared to a “value” approach.
Valuations are computed from the point of view of a secondary market minority holder looking at a medium term (say 6 months) performance.
Valuation tools are built around the concepts of transparency, all underlying figures are accessible, and consistency, same methodology whichever the stock, allowing for differences in nature between financial and non financial stocks. A stock with a target price below its current price should not and will not be regarded as an Add or a Buy.
Recommendations are based on target prices with no allowance for dividend returns. The thresholds for the four recommendation levels may change from time to time depending on market conditions. Thresholds are defined as follows, ASSUMING long risk free rates remain in the 2-5% region.
There is deliberately no “neutral” recommendation. The principle is that there is no point investing in equities if the return is not at least the risk free rate (and the dividend yield which again is not allowed for).
Although recommendations are automated (a function of the target price whenever a new equity research report is released), the management of AlphaValue intends to maintain global consistency within its universe coverage and may, from time to time, decide to change global parameters which may affect the level of recommendation definitions and /or the distribution of recommendations within the four levels above. For instance, lowering the risk premium in a gloomy context may increase the proportion of positive recommendations.
Valuation Valuation processes have been organized around transparency and consistency as primary objectives. Stocks belong to different categories that recognise their main operating features : Banks, Insurers and Non Financials. Within those three universes, the valuation techniques are the same and in relation to the financial data available. The weighting given to individual valuation techniques is managed centrally and may be changed from time to time. As a rule, all stocks of a similar profile are valued using equivalent weighting of the various valuation techniques. This is for obvious consistency reasons. Within the very large universe of Non Financials, there are in effect 4 sub-categories of weightings to cater for subsets: 1) 'Mainstream' stocks; 2) 'Holding companies' where the stress is on NAV measures; 3) 'Growth' companies where the stress is on peer based valuations; 4) 'Loss making sectors' where peers review is essentially pointing nowhere. The bulk of the valuation is then built on DCF and NAV, in effect pushing back the time horizon.
RecommendationLow Volatility
(10-30)Normal Volatility
(15-35)High Volatility
(above 35)
Buy More than 15 % upside More than 20 % upside More than 30 % upside
Add From 5 % to 15 % From 5 % to 20 % From 10 % to 30 %
Reduce From -10 % to 5 % From -10 % to 5 % From -10 % to 10 %
Sell Below -10 % Below -10 % Below -10 %
Valuation Issue Normal industrials
Growth industrials
Holding company
Loss runners
Bank Insurers
DCF 35% 35% 10% 40% 0% 0%
NAV 20% 20% 55% 40% 25% 15%
PE 10% 10% 10% 5% 10% 20%
EV/EBITDA 20% 20% 0% 5% 0% 0%
Yield 10% 10% 20% 5% 15% 15%
P/Book 5% 5% 5% 5% 15% 10%
Banks' instrinsic method 0% 0% 0% 0% 25% 0%
Embedded Value 0% 0% 0% 0% 0% 40%
Mkt Cap/Gross Operating Profit 0% 0% 0% 0% 10% 0%
Typical sectors
Bio Techs
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Methodology
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 40
Important Warning Above comments are solely aimed at institutional and other professional investors. They are designed to complement services made available by subscription only to AlphaValue via www.alphavalue.com . Above comments may only make sense in connection with an access to AlphaValue on line equity research
ALPHAVALUE CORPORATE SERVICES
Poujoulat (Buy)Building Prod. & Materials / France
Methodology
January 11 2013 Copyright AlphaValue - 2013 – www.alphavalue.com Page 41