Recticel Model update – still firepower for further growth
We have finetuned our earnings model post the FY23 results release. From a low base we expect Recticel to grow adjusted EBITDA by c. 33% in FY24, with about half of the growth coming from the recently acquired Rex business and the remainder mainly coming from savings initiatives. We expect building markets to only improve materially as from 2025. While we still believe in the strategic attractiveness of Recticel's (mainly) polyurethane focussed insulation offering, we deem valuation is about fair and hence we have a hold rating on the stock.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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