Plastic Omnium: 2019 EPS revised up by 4.5% following HBPO integration, FV up €2 to €41.
Plastic Omnium: (NEUTRAL, Fair Value EUR41 vs. EUR39 (+7%))2019 EPS revised up by 4.5% following HBPO integration, FV up €2 to €41.
We now fully consolidate HBPO into our Plastic Omnium’s model, which implies respectively a 1.5% and 4.5% favourable impact in our 2019e EPS vs. previously. Profitability will be negatively affected (>180bp net negative impact on group’s EBIT margin – POM definition) yet the group will remain one of the European supplier with the highest ROCE metrics. We upgraded our FV by €2 to €41 yet maintained our Neutral rating on the stock due to the lack of short term momentum and the limited short term upside potential. We also assume multiples paid by investors could be altered negatively by the change in profitability level.
Compagnie Plastic Omnium is a manufacturing and services company which partners with car manufacturers and local communities, through its two core businesses which are Automotive Equipment and Environment. Co.'s activities can be divided into two divisions: the Automotive division and the Environment division. The Automotive division designs, manufactures and sells vehicle body parts (exterior parts and modules) and plastic fuel systems. The Environment division provides products and services for local authorities, including waste pre-collection and management equipment and services, and road and highway signage.
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