Recticel After closing the Engineered Foams sale, focus back on growth
After yesterday's announcement of the closing of a revised Engineered Foams deal with Carpenter, Recticel is now a pure Insulation play with a net cash position of c € 170m. We believe the chances of a capital return to shareholders have declined (while not totally being excluded though) with the key focus now on growing the Insulation activities via M&A. Discussions are already ongoing we believe, with deals both possible in both the Insulation boards and panels businesses while the geographic focus seems to be on Europe. We have updated our model following the revised Engineered Foams deal with only changes made being the integration of the scope changes, leading to an overall increase in our adjusted EBITDA23 forecast of c. 8%. Taking into account the still difficult building market conditions, we decided to stick to our Hold rating for now, with a target price of € 14.5.Recticel is engaged in the production of a variety of polyurethane foams that are used in the furniture, technical, automotive, bedding and insulation industries. The Flexible Foam Business Line covers the manufacture, conversion and marketing of flexible polyurethane foam. The types of flexible foams are classified as Comfort, Technical Foams and Composite Foams. Co. is also engaged in the manufacture of foams used in mattresses and slat bases. In addition, Co. manufactures rigid polyurethane and phenolic foams for thermal insulation. Co.'s automotive activities include: manufacturing moulded seat cushions, window encapsulation and manufacturing interior trim components.
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