Issue of convertible bonds does not change the big picture (Gaussin)
Issue of convertible bonds does not change the big pictureEPS CHANGE
CHANGE IN TARGET PRICE€ 1.11 vs 1.10 +1.02%
Following a decrease in our forecast of WCR, net debt has been lowered. As a result, the EV/EBITDA peer valuation increased sharply and compensated for the decrease in our DCF, resulting in an unchanged target price and recommendation.
CHANGE IN EPS2016 : € -0.07 vs -0.05 ns
2017 : € 0.04 vs 0.04 -1.55%
As we have changed the timeline for the capital increases following the issue of €10m of convertible bonds from 2016 to 2017 and 2018, this had an impact on the average number of shares for the year 2016. We have not changed our net income forecast.
CHANGE IN NAV€ 1.61 vs 1.64 -1.83%
In our NAV, the lower net debt expected at 2016 year-end had a positive effect on the valuation and we have also increased the valuation of the licence which was compensated by a decrease in the multiple used for the Port division from 0.7x order book to 0.6x, as we now forecast a lower EBITDA margin than previously for this division, and by the removal of DTA from gross assets as a result of the warning by auditors. Our forecast concerning the number of shares remains mostly unchanged.
CHANGE IN DCF€ 1.29 vs 1.52 -14.7%
In our DCF, the main change is the lower forecasted EBITDA margin from 2018 onwards. We now assume a 15.5% EBITDA margin from 2018 onwards versus 19.0% previously. The change was motivated by the fact that the average EBITDA margin for the capital goods sector is roughly 14%, and therefore our assumptions were not conservative enough. The lower net debt expected partially had an offsetting effect on our DCF valuation. We have left capex assumptions unchanged. Our forecast concerning the number of shares remains mostly unchanged.
Gaussin SA. Gaussin SA is a France-based company that is principally engaged in the design, manufacturing and marketing of industrial and port trailers and self-propelled barges. The Company manufactures trailers and other transport solutions for use in the industrial sector and the shipping and aviation industries. Gaussin SA sells and leases its products to clients and also provides after-sales services and replacement parts. It is present in such markets as transportation, raw materials and manufacturing, as well as the environment. In addition, the Company offers various services, including audit, rental, training, credit, maintenance, and 24 hours servicing. Gaussin is present through sales networks throughout the world. The Company operates through a number of direct and indirect subsidiaries, including Event, Leaderlease SA, SCI Hall 7, SCI Hall 8, and affiliated companies, such as Metalliance, Sofimmob and Triangle SCES Industrie.
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