Recticel FIRST LOOK: 3Q23 revenue disappoints and FY guidance lowered
3Q revenue declined by a disappointing 17.5% whilst Recticel has lowered FY adjusted EBITDA guidance from a € 40-45m range to a € 35-40m range. The net cash position has further increased in 3Q to € 155.6m. Whilst the war chest offers the potential for making sizeable value creating acquisitions and this seems plan A for now, we are not blind to alternative scenarios whereby immediate share upside might come from a take-out scenario for Recticel or a combination with Recticel being the smaller partner. Despite the weaker than expected short term business momentum, we consider that valuation is compelling enough to justify our Accumulate rating.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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