(News Bulletin 247) – The contract logistics specialist published Monday evening a turnover that accelerated in the second quarter. ID Logistics is reaping the benefits of its international expansion, particularly in North America where the level of activity has been sustained.

ID Logistics delighted the market on Tuesday, after revealing spring activity that exceeded expectations.

Between April and the end of June, the Orgon-based group revealed a turnover increase of 19.7% in published data and 16% in comparable data, reaching 782 million euros. This level of sales is higher than the expectations of the panel of analysts covering the file. TP ICAP Midcap was counting on sales of 748 million euros, while Oddo BHF was aiming for a little less (739 million euros).

A “record” quarterly turnover

“This good performance includes the turnover of Spedimex, a company acquired in Poland and consolidated since June 1, 2023,” explains ID Logistics.

ID Logistics thus recorded “record turnover in the second quarter […] despite difficult conditions on its domestic market (France, Editor’s note)”, appreciates Stifel. “This quarter therefore marks a new acceleration after a first quarter up 12%”, notes TP ICAP Midcap.

The acceleration in like-for-like growth was driven by a strong contribution from international sales, which now account for 73% of the company’s revenue. In Europe (excluding France), the group saw its business grow by 19% like-for-like thanks to a new contract signed with Spanish giant Inditex, while the “Latin America and Asia” region grew by 20% like-for-like.

It is especially in North America where the group has accelerated the pace. ID Logistics’ quarterly turnover jumped 40% in comparable data over a year, supported among other things by the ramp-up of the contract signed in 2023, with “a global e-commerce giant”, namely Amazon. The latter entrusted the French group with the management of a new platform in Pennsylvania, whose operations began at the end of June 2024 and which will ramp up to reach a peak of activity in the fourth quarter, specifies ID Logistics.

“This second contract with the American giant confirms the group’s successful presence in the country and suggests many new contracts of this type,” adds Stifel.

Better in France

In France, the situation is gradually improving, with activity returning to growth in the second quarter thanks to the start of new projects since the beginning of 2024. For Stifel, this is a “good performance”.

“Thanks to the start of three new contracts and slight price increases, ID Logistics was able to compensate for the 3% drop in volumes in the warehouses it manages on behalf of its customers,” the research office continued.

TP ICAP Midcap also identifies this price effect: “France is returning to positive territory with an increase of 0.3% (vs. +1% expected) thanks in particular to the start of new files suggesting price effects that are normalizing (around +2% according to our estimates) and a drop in volumes”, explains Florent Thy-tine, head of equity research at the research office.

ID Logistics thus ends the first half of 2024 with a turnover of 1.52 billion euros, an increase of 18.7%, including 14.3% in comparable data. Since the beginning of the year, the logistics specialist has started 14 new projects and says it is “ahead of its roadmap for 2024”.

“In total, the group should be close to 25 start-ups over the year, which is higher than the 20 start-ups projected by the group,” specifies Oddo BHF.

As usual, the company does not provide any quantified targets. “The 2024 financial year should therefore mark a new year of profitable growth for ID Logistics,” the group states as an outlook.

Florent Thy-tine is making up for this deliberate lack of quantified targets. For 2024, the specialist estimates that ID Logistics’ activity “should continue at growth rates that are still sustained in the second half of the year”.

“France should accelerate with the increase in contracts started in the second half of the year and international activity should not really weaken even if the base effects will be more difficult. The start-ups (14 new files in the first half of the year) seem to have gone well, leaving little room for a bad surprise in the results of the first half of the year,” he continues.

On the Paris Stock Exchange, the publication of the ID Logistics group was welcomed, with a share price which rose by another 4.2% to 432 euros this Tuesday afternoon and by 40.5% since the start of the year.

A valuation that raises questions

ID Logistics’ excellent stock market performance has fueled debates about the valuation of the logistics group. Stifel still believes that the French group is able to double its size and that its stock should “be able to double in value” over the next five years. However, the 65% increase in the share price over the last nine months “has reduced the upside potential”.

The financial intermediary points out that the group is “currently trading at more than 36 times its estimated earnings per share for 2024”, while GXO Logistics, “its main American competitor, is less valued with a price/earnings ratio of 20 times for 2024”. “In our opinion, ID Logistics deserves a nice premium given its growth profile, but a premium of 80% seems excessive to us”, continues Stifel, which remains to hold on the stock while raising its price target to 380 euros, given the group’s excellent publication.

For its part, TP ICAP Midcap also shares the opinion of its counterpart Stifel on the tight valuation of ID Logistics.

“We do not see any reason for the stock to fall in the short term, but the valuation now seems to us to integrate all the good news on the stock with a 35% increase since January 1 (at Monday’s closing price, Editor’s note) and valuation levels that are becoming less sustainable,” says Florent Thy-tine. The specialist still appreciates the group’s fundamentals but believes that the stock deserves a break.

The research office downgraded its rating to “hold” while adjusting its price target to 454 euros, compared to 419 euros previously.