Fine-tuning for Protective Films' challenging dynamic in H1 (Chargeurs)
Fine-tuning for Protective Films' challenging dynamic in H1EPS CHANGE
CHANGE IN EPS2019 : € 0.87 vs 1.21 -27.7%
2020 : € 1.28 vs 1.68 -23.9%
Our EPS estimates decreased on the back of a downward adjustment in our turnover and operating profit forecasts for the Protective Films division. This is to account for the lower demand in Germany and China in H1, which also weighed on profitability as these markets exhibit particularly high margins in this activity. While we expect a steady recovery over the course of H2 and the start of 2020, this negative blip in demand has a had an effect on overall profitability given the important contribution of the Protective Films division to the group's earnings.
CHANGE IN DCF€ 38.5 vs 41.0 -6.25%
Our DCF valuation is impacted by our lower earnings forecasts for 2019-20, due to the challenging market dynamics for the Protective Films division, as explained in our EPS change comment. This, however, has a marginal impact on our target price which is dominated by a NAV/SOTP-based valuation which is hardly swayed by quarterly revenues.
Chargeurs SA is a France-based company, which provides customizable specialty material solutions. The Company and its subsidiaries operate in four sectors: Protective Films, Fashion Technologies, Museum Solutions and Luxury Materials. Protective Films designs, produces and markets technical solutions to protect the quality of steel, aluminum, plastic or other surfaces during the transformation process, as well as film application machines. Fashion Technologies produces and markets linings for clothing. Museum Solutions includes the industrial divisions Senfa, specialized in the functionalization of technical textiles, and Chargeurs Creative Collection, specialized in the provision of services to cultural institutions. Luxury Materials manufactures and markets combed wool ribbons. The Company is active globally.
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