Recticel Never a dull moment: CEO change and continued search for M&A
We have lowered our adjusted EBITDA forecasts for FY23 by 25% after the weaker than expected 1H performance and the FY guidance of 40-45m adjusted EBITDA. Note however that the guidance implies a significant sequential improvement in 2H performance (+20-47%) with a volume recovery in Insulated Panels visible. We are a bit more prudent on a recovery in the residential market and have also lowered our FY24-25 forecasts. The CEO change suggests a tighter grip of Baltisse on the strategic direction, with M&A high on the agenda and no capital return of the excess cash for now. We believe in the attractiveness of PU as insulating material and the structural growth opportunities, but the 1H margin pressure underpins that this is also a competitive industry. We maintain our Hold rating for now.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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