(News Bulletin 247) – Despite a first half in line with expectations, Plastivaloire is sanctioned on the stock market after a lowering of its annual outlook. The cause is the delay in the launch of three major contracts for its automotive division.

Plastivaloire is facing a difficult stock market in 2024. At Thursday’s close, the automotive supplier was behind by more than 30%, with investors having turned their backs on a fairly indebted portfolio, which is penalizing in a world of high rates. The Touraine group’s lack of regularity in its communications to the market has also not helped to gain favor with investors. And today’s publication is not going to stop this downward trend.

On the Paris Stock Exchange, Plastivaloire is currently falling by 17%, sanctioned after a lowering of its annual ambitions due to the delay in the launches of 3 major contracts. The stock thus shows the biggest drop on the Parisian market this Friday, and returns to levels more explored since the end of 2013.

This downward revision of the outlook comes after half-year results generally in line with market expectations. The group reported a gross operating profit (Ebitda), down 2% to 32.7 million euros, for a turnover already published of 405 million euros, down 3 .1% like-for-like, in the first half of its staggered 2023-2024 financial year.

Late in 2 programs

“The activity took place in a less favorable economic environment for automobile and industrial production, illustrated by the delay in the launch of 2 new programs, which represents a lack of turnover of around 4 million euros over the half-year”, explains Plastivaloire in its press release.

For TP ICAP Midcap, the plastics manufacturer and automotive supplier revealed profitability “totally in line” with its expectations which were for its part placed at 32.6 million euros.

Despite a drop in its activity, Plastivaloire managed to increase its Ebitda margin to 8.1% at the end of its first half of the 2023-2024 financial year, compared to 7.9% a year later. early. The plastics manufacturer explains that it benefited from a reduction in the cost of raw materials and from price renegotiations obtained from certain partners, which offset the increase in wages.

Plastivaloire also significantly reduced its loss over one year, bringing it down to 2 million euros in the first half of 2023-2024, compared to 15 million euros a year earlier.

The group also generated a free cash flow of 9.2 million euros, “thanks to a good conversion of Ebitda and control of working capital requirements”, specifies the research office, which clearly participated in the group’s reduction in debt.

A gap that weighs

Despite these results, described as “solid” by Julien Thomas, analyst at TP ICAP Midcap, the group says it is approaching the second half of 2023-2024 “with caution”. Plastivaloire’s management cites the shortfall estimated at 30 million euros in turnover, which is linked to the launch delay of a few months on 3 major programs for its automobile division and “to the gloomy economic climate which tends to influence the production rates requested by customers.

Thus, the group was forced to lower its annual outlook, which was confirmed last month. It now expects a turnover of around 770 million euros, while it was targeting revenues “above 800 million euros” for the 2023-2024 financial year so far.

The group also anticipates a deterioration in its Ebitda margin, this being expected lower than that of the 2022-2023 financial year, i.e. below 8.3%, where the group was still expecting “a slight increase” on a year.

Another point which chills the market, Plastivaloire indicated that it could, if necessary, request a “waiver”, that is to say an adjustment of its commitments in terms of debt ratio towards its banks. The group is required to respect an Ebitda level of 60 million euros in 2023-2024.

According to TP ICAP Midcap, this scenario would arise if “the group recorded an Ebitda margin lower than 7.7%, which would imply, according to the research office, “an incremental margin greater than 24% linked to these 3 contracts delayed”, a level which seems “very high and which would imply that the group plans to suffer other headwinds in terms of its profitability”.

Falling order intake

Finally, the group recorded a clear decline in its order intake to 410.3 million euros compared to 535.5 million euros a year earlier. Plastivaloire attributes this decline “to the low volume of orders received for a major French automobile manufacturer” which was 10.9 million euros compared to 138.6 million euros in the first half of 2022-2023.

“This is a correct level in absolute terms but which suffers from comparison with the previous year which was excellent” notes TP ICAP Midcap which plans to modify its expectations after reviewing this publication with the management of Plastivaloire .

“A deterioration of our expectations would lead to a failure (restore potential to the title, Editor’s note) of the title which is already trading at the level of its 1-year average and is therefore not particularly given in relative terms”, suggests Julien Thomas who nevertheless remains buyer of the file with a target of 3.6 euros. Which grants an upside potential of 63.6% compared to the current price.