Thrace Plastics | Overcoming challenges, positioned for recovery
Resilient H1’24, albeit in a challenging setting – H1’24 results showcased significant volume growth (+9% yoy), with Thrace reverting to positive sales growth (+3.5% yoy) for the first time after 9 consecutive quarters of negative yoy run-rates (which were hampered by high base effects -covid related products- and waning demand). H1 EBITDA grew c2% yoy (to €24.5m), thanks to +5.4% growth in Q1, with the highly competitive environment and tough conditions in the key markets (e.g. Central Europe, UK), especially in the technical fabrics division, eating into the margins (H1’24 EBITDA margin 13.1%, -0.2pps yoy).Slightly slower growth in 2024e than envisaged before, but little-changed EBITDA yoy – Taking into account the demand-supply backdrop, which indicates pricing headwinds, and considering the geopolitical landscape, we have trimmed our 2024e average pricing per unit and gross margins, thus coming up with a c6% downward EBITDA revision (€44m). That said, we expect EBITDA to be flattish yoy, quite respectable performance given the challenges. We see revenues growing c4% yoy, with growth in volumes (+5.6% yoy) being offset by modest price/mix dilution.
Positive operating leverage to drive c12% growth in 2025-26e – Looking further out, we believe Thrace remains well positioned to leverage on cost efficiencies and volume growth, while growing the business in a sustainable manner and focusing on gaining market share. We maintain our conservative view on pricing (+1% annually), amid a precarious industrial environment and competitive intensity by large-scale peers, but still anticipate healthy annual volume growth in 2025-26e (c4-5%), thus coming up with 6-7% annual revenue growth. Starting from a lower base in 2024, we see the EBITDA margin now rising to 13.6% and the EBIT margin to 7.2% by 2026e, both up c1pp in the period. This corresponds to c12% annual EBITDA growth in 2025-26e, indicative of the positive operating leverage scope.
Strong cash flow key to the thesis – Despite the challenges faced, the group has maintained its healthy balance sheet, while implementing c€30m of investments (based on plans) and having distributed c€7m in dividends in the current year. Overall, Thrace has invested c€150m in the past 5 years, in the context of its growth strategy, while having returned almost €45m to shareholders. Looking ahead we estimate net debt/EBITDA will stay
Thrace Plastics Holding and Commercial SA Formerly known as Thrace Plastics Holding and Commercial Societe Anonyme. Thrace Plastics Holding and Commercial Societe Anonyme, formerly Thrace Plastics Co SA, is a Greece-based company engaged in the production and trade of plastic products, textiles and packaging materials. The Company's range of products are divided into three categories: Technical Fabrics & Fibers, which includes such products as woven and non-woven geotextiles, ground covers, crop covers, nets, roofing membranes, staple fibers, concrete reinforcement fibers, geogrids, Mega bag components and carpet and industrial yarns; Consumer Packaging, which offers plastic containers and lids, cups, tubs, bottles, bags for liquid packaging, as well as plastic packaging for food products, and Industrial Packaging, which includes ropes and twines, big bags, films, woven polypropylene bags, bags for heavy duty, pallet covers, and stretch hoods. The Company operates through its local and international subsidiaries.
Eurobank Equities is a Greek-based firm offering research, sales and trading services to institutional, corporate and private clients. The company is wholly owned by Eurobank, one of the 4 systemic banks in Greece.
Research is the backbone of Eurobank Equities' platform, with a team of 4 professionals committed to generating actionable investment ideas by providing timely research products. We are committed to offering value-added services to clients by filtering market noise and providing insights on the multiple sectors that we cover. Our universe includes 26 - large, medium and small cap - companies whose market capitalization amounts to 80-85% of the total market capitalization of the Athens Stock Exchange. Our research team also maintains the capacity to generate ad-hoc research for micro-cap listed companies.
Our team has consistently gained recognition among institutional investors for its quality research, having ranked No. 1 team in Greece at the Extel Surveys of 2013-2016 and 2018. We have also been named Leading Brokerage Firm in Greece over 2014-2016 and in 2018.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.