Picanol released 26th of Feb 2013 annual results.

Outstanding results :
Revenues : 560MEUR (+21,5% vs 2012)
EBIT : 104 MEUR (+43,3% vs 2012), 18,5% of revenues
NET : 73 MEUR (+32% vs 2012), 13% of revenue, 25% of Equity ('13 end)

Picanol, which used to have huge cash on hand, bought end of Nov '13, 27,5% of Tessenderlo, a group in a totally different area of business, to reduce exposure of Picanol to volatility of its market.

Outlook doesn't seems to be as good as 2013, Picanol warning that its order book is much lower than beginning of 2013 . Forecast is to achieve for H1 2014 same level of sales as in H1 2012

Picanol Market capitalization is 495MEUR (28Eur/sh)

Let's try to give, with a simple model based on Free cash flow, an estimate of Picanol value:

- Sustainable FCF of Picanol (w/o working capital) is 65MEUR (average last 4 years). This give an EV of core business of 565 MEUR with 0% growth, and 13% capital cost,

- On top of this we need to add market value of 27,5% of Tessenderlo (650MEUR):  179 MEUR

- And the excess cash (Current asset-Current Liability-LT Debt)=30MEUR

Total = 565+179+30=774MEUR or 43,7 EUR/share

 

My estimate of the value of the share, based on quite conservative assumptions,  is  56% higher than current share price. A good bargain for me.

Disclosure : I am shareholder of Picanol

Best regards

 

Denis

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