Polynt Group : Further dividend distribution expected amid good deleveraging capabilities

While the chemical industry remains under pressure, notably in Europe amid cheaper imports, oversupply and weak demand for key end markets such as construction and automotive, Polynt has been able to improve its margins while continuing to generate positive FCF. Besides the consolidation of the composite industry, the company’s leading position and strong pricing power, switch to higher margin products, and good technological capabilities, have led to margin expansion. Furthermore, Polynt has low capex requirements, while it has good control of its working capital. Margins are expected to continue improving alongside FCF generation, although we believe that the overall deleveraging of the balance sheet will continue to be limited by aggressive shareholder distributions.