(BFM Bourse) – The plastics and automotive supplier has unveiled its annual results, highlighting in particular a deterioration in profitability and a net loss. The market is disappointed one month following having been conquered by the solidity of the annual turnover of Plastivaloire in a context of shortage of components.
The publications follow each other but are not alike for Plastivaloire….One month following its annual activity update which had generated a lot of enthusiasm (+8.30% on November 15), the detailed annual results of the manufacturer of complex plastic parts intended for consumer products are greatly disappointing. The 2021-2022 financial year ended at the end of September thus ended in a net loss for the Tours group, the latter having suffered from inflation on raw materials and energy.
The reaction was immediate on the stock market. At 10:30 a.m., the title Plastivaloire plunged 9% to 3.66 euros, the lowest since November 10.
Everything started well for Plastivaloire. Last month, it reported “very solid” 2021-2022 sales, with “the second highest turnover in its history, at 704.2 million euros”. The group had managed to exceed its own annual turnover target set at 680 million euros following a summer activity marked by double-digit growth.
In the fourth quarter of 2021-2022, Plastivaloire had achieved revenues up +29.7% (+27.3% at constant exchange rates), to reach 185.4 million euros. The end of the year was therefore favorable for a group which had accumulated difficulties in the first part of the year. It was dependent on the slowdown in production linked to the “stop & go” of car manufacturers.
A penalizing inflationary context
For the rest of the company’s accounts, the operating profitability of Plastivaloire was penalized by the sharp increase in the cost of raw materials as well as energy and transport. Thus, the Ebitda margin (gross operating surplus) comes out “in line with its objective” at 7.4%, a decrease of 2.6 points compared to 2020-2021. The group had already warned that its profitability would be degraded given the inflation on raw materials and energy. “However, the margin began to rebound in the second half to 7.7%, following the low point reached in the first half (7.1%), thanks to the good level of activity and the first effects of the actions taken, including the adjustment selling prices”, points out Plastivaloire.
“The 2022 EBITDA is in line with our expectations (52.3 million euros, -23% over one year) reflecting a compression of the margin to 7.4% (-260 basis points over one year). The latter has been affected by the continuous inflation of operating costs (raw materials, energy and logistics) and only partially rebounded during the second half with the start of sales price increases granted by manufacturer customers coupled with rigorous management of fixed charges” explains TP ICAP Midcap in its note of the day devoted to Plastivaloire.
An annual net loss
In this context, Plastivaloire continues to rationalize its industrial capacities. The French plastic parts manufacturer plans to close the Creutzwald site in the first quarter of 2023, which has been structurally loss-making since 2016. At the start of the year, the group merged the neighboring sites of Mamers (Sarthe) and Bellême (Orne). . The company has also decided to sell its 40% stake in the joint venture with BIA in Slovakia, which specializes in the chrome plating of parts, given the evolution of the market towards increasingly “green” vehicles.
Plastivaloire therefore recorded 15.1 million euros in restructuring charges, resulting in an annual net loss of 20.2 million euros, i.e. 22.7 million euros in group share, once morest a profit of 8.8 million euros, a year earlier.
The group burned 6.4 million euros in cash over the year. “In addition to the pressure on profitability, there have been reinvestments (in current and non-current assets). As a result, net debt amounts to 240.4 million euros, i.e. a high leverage of 4.6x ND/EBITDA [la dette nette rapportée à l’Ebitda, NDLR]“, emphasizes TP ICAP Midcap. The group indicates that it is working with its banking partners on the establishment of new financial resources “to support its development and preserve its available cash, taking into account future repayment deadlines”.
Continued adaptation to inflation: “a major challenge” for 2022-2023
Pour 2022-2023 Plastivaloire anticipates continued growth in Europe and North America thanks to its portfolio of programs and is aiming for revenue of around 730 million euros for the 2022-2023 financial year. Plastivaloire is also targeting a slightly improved Ebitda margin compared to 2021-2022. “The group intends to offset the expected rise in energy prices and production costs by improving the gross margin rate thanks to the effects of price negotiations with customers and the continued rigorous management of its costs”, explains the company.
Beyond 2022-2023, Plastivaloire indicates that it has good visibility on its activity thanks to very good order intake of 884 million euros during the 2021-2022 financial year (+45.4% compared to 2020-2021 and close to the historical level of 2018-2019).
“The group is counting on a gradual restoration of the EBITDA margin by: i) intensifying the collection of price increases already negotiated despite continuing high inflation (notably energy); ii) continued rigorous management of its fixed costs and the contribution of the restructuring carried out during this financial year” notes TP ICAP Midcap. In short, the figures announced Wednesday evening following the market by Plastivaloire are in line with the design office’s expectations. The analyst thus confirms his recommendation to “keep” with a target price of 6.3 euros.
Sabrina Sadgui – ©2022 BFM Bourse
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