jeudi 6 décembre 2012

Mises à jour rapides GEA, TES

Quelques mises à jour

GEA a publié son chiffre d'affaires du 4è trimestre : ici
Le CA 2012 est donc pratiquement stable par rapport à 2011.
Plutôt bon signe, mais j'attends les résultats 2012 pour voir si la marge se maintient.

Tessi  (ou ici en anglais) a fait l'objet d'un intéressant article sur ce blog US ici.
J'ai une petite remarque sur sa conclusion :
"With ’12 earnings estimated in the €30-31 million range, Tessi should generate close to €40 million in FCF, for a yield of 20.1%".

Tessi a donné quelques perspectives sur ses résultats 2012 ici.
En clair : le chiffre d'affaires sur 9 mois est en baisse (186 vs 193).

La branche marketing perd de l'argent et sera réorganisée (charge non récurrente de 1,5 à 2 m€)
Le CA de la branche CPR OR ne sera pas à la hauteur de celui du 2ème semestre 2011, mais la marge devrait rester élevée.
La branche Documents semble en légère croissance.
Avec des extrapolations plus ou moins hasardeuses, je m'attends donc à un RN de 20-25 m€ plutôt que 30 m€.

D'autre part, le PDG Marc Rebouah a déclaré à l'AMF en novembre 2011 pas mal d'acquisistions d'actions Tessi à 71-73 € (voir le site de l'AMF), donc plutôt bon signe ?

Enfin dans les résolutions proposées à l'AG (voir ici), la société envisage d'emettre des obligations pour un montant de 20 m€, ce qui me surprend, compte-tenu de la grosse trésorerie excédentaire de Tessi. Y a t'il une acquisition majeure en préparation ?

Comme d'habitude, je me tâte pour renforcer ou attendre un hypothétique trou d'air.

dimanche 16 septembre 2012


 1. Intro

GEA (ticker : GEA) manufactures highway toll equipment. In my area (Escota highway network, owned by Vinci Group), almost every automatic toll I see is badged GEA.

The company has already been covered by several bloggers, which will spare me time :
- Actions ordinaires entreprises extraordinaires : Here and here (in French)
- Trying to be like warren : Here (in French and partially in English)
- The Red Corner : here (in English) , a very interesting and impressive analysis. I've added the blog to my blogroll.

To sum it up :
- GEA currently (for a quote of 65 €) trades at EV/EBIT ~ 2x, PER ~ 9 (2011 results)
- 2011 operating margin 22% (before taxes), 2011 ROE 22 %
- 0 debt, 40 m€ cash for a market cap of 78 m€, no goodwill
- order backlog covers more than 1 year of activity,
-  low maintenance CAPEX requirements

The company supplies 85 % of French motorways and has sold its toll systems in 33 countries worldwide.

All this sounds too good to be true and of course the question is : why is it so cheap ?

As pointed out by the Red Corner blog, there's a dramatic improvement of the business after 2007 (both sales and margins) : why ?

Another chart illustrating this (net result) :

The underlying issue of course is what will the future look like ? As pre-2007 (the current valuation is justified) or more like the recent years (then the current valuation is a bargain) ?

Second point : GEA is cheap because of its large cash position and absence of debt. Where will this cash go ?

2. Drivers behind the business improvement

I've read the annual reports but the management does not supply a clear explanation or I've missed it.
The Red Corner blog article  attributes this to international sales and a greater mix of services (maintenance,...) with a higher margin.

Here is what I found on my side.

What has driven the sales growth ?

Many highways went private in 2005 and embarked on an automatic toll collection program in the late 2000's. Here is an article giving the number of highway employees working in toll collection. The gain in productivity for highway companies is immediate and the return on this investment is quick.

Electronic toll collection  in French highways mainly relies on a DSRC (dedicated short range communication system) and a transponder or tag that is placed in the vehicle : Liber-t system in France (all highway operators use the same standard).

Other technologies have been developped (for instance satellite-based systems).
See for instance this neat presentation by Kapsch TrafficCom, a competitor of GEA (based in Austria)

For example according to this release, ~50 % of transactions on the APPR highway network are now made with this system and automatic transactions represent ~90 % of the total transactions. Almost all toll plazzas are now completely or partially automated.
So the market is probably saturated here.

In 2010 the highway companies signed with the Government a "green" investment program of 1 bn€ in exchange for a extended public concession time (so called "paquet vert" ="Green package") : article.  One of these investments is the immediate deployment of a 30 km/h drive-though toll in dedicated lanes; cars and trucks won't have to stop and restart, which reduces CO2 emissions.
GEA will benefit from this (see for instance GEA presentation here).

In 2013 all trucks will have to pay taxes on the national roads and smaller departmental roads : see link here. Apparently the system  involves "free-flow" tolling using overhead gantries and an on board unit (OBU). However I do not see GEA appear in the list of the Ecomouv company partners).

Free-flow tolling is the logical next step for highways and GEA should benefit from that.

In this article, there is an interview of Grigori Zass, the son of the company founder Serge Zass (in French).
A few items roughly translated :
- CAPEX requirements are low (~300 k€) but about 5 % of the salaries can be considered as R&D investments (1-2 m€/year)
- we were late in developping a "free-flow" system ; it was a mistake because it's the future and competitors are ready
- the French market remains central for GEA : few new highways are expected, but toll systems have to be maintained, upgraded every 3-5 years and replaced every 10 years "We live from this renewal/evolution market"
- export markets are difficult, especially China (local suppliers tried to copy their products). The product is 1st launched/tested on the French market, then made available for export
- same trend towards automatization on international markets
- in France the market has concentrated (more on that later)


GEA does not provide a breakdown of margins by business segment but its competitor Kapsch does :

Double-digit operating margins for services, extensions,... (recurring part of the business), much more fluctuating for the new projects (one-time effects). But of course you can't have the first business without the second.

I think this explains GEA 2005 loss. The 2005 annual report (loosely translated) says "this year an unusually high number of new pluri-annual contracts have been started, which significantly impacted the (net) result. The (positive) effects will be felt in 3-5 years".

I think that GEA currently benefits from long-term contracts signed a few years ago when French highways embarked on a large automatization program. I think this will slow down but the overall trend is positive.

Competitors and comparables

Main local competitor is the transport branch of group "Communication et Systemes" : link.
The Sanef group (itself a subsidiary of Spanish Group Abertis) has recently made an offer to buy the transport branch of CS, for a yet undisclosed amount.

Another French competitor is Thales (apparently it's a little more complicated because Thales has collaborated with GEA in the past to produce tags). Toll collection is just one of the numerous activities of Thales.
Another one is Multitoll  apparently a former subsidiary of Ascom group (Swiss), now independent.
Other competitors I could identify are Kapsch (already mentionned), Q-Free, from Norway, and SICE from Spain.
Kapsch and Q-Free are listed companies, SICE and Multitoll apparently not.

 See below the operating margins of competitor Kapsch (the 2011 surge in sales is linked to a major contract in Poland)

 The 2004-2011 average operating margin is around 10 % for GEA, 13 % for Kapsch, 5 % for Q-Free
According to the 2011 CS annual report, operational result 1.4 /sales 31 m€ = 4.5 % for the transport branch.
Multitoll is privately owned  but you can find some info here. Operating margins are around 4.4 %.

So I don't think that the current margins of GEA (>20 %) are sustainable in the future.

3. What will happen to the cash ?

GEA has 40 m€ in cash and 0 debt. What will happen to this cash ? Will it go back to ordinary shareholders ?

GEA is a small familial company, founded in 1970. The founder has 33 % of outstanding shares and more than 50 % of shareholder votes.
In the annual reports I have seen no trace of golden parachutes, free shares, stock-options, special retirement packages and related stuff. Management salaries seem very reasonnable.

The company pays a dividend (current yield 3.4 %), but there is no notable share buy-back program.

In the above mentioned article, Mr Zass states that GEA went to the stockmarket in 1994 to find capital to fund its exportation effort and that GEA independence is fundamental : "we wanted neither to sell our company to a larger group or to be indebted to banks".
Given this state of mind, I hardly imagine GEA giving this cash back to shareholders as a special dividend or a major share buyback. I think that GEA would need this cash in case of a large export contract, because cash flow can be very negative during some phases of the contract ; see for instance the free cash flow of Kapsch.

4. Conclusion

Ce que l'on conçoit bien s'énonce clairement. Et les mots pour le dire arrivent aisément.

In my case, just the opposite. I spent a long time writing and deleting this paragraph, which shows that I have a hard time reaching a clear conclusion.
All the bloggers mentionned at the beginning are very positive about GEA.

I'm not sure at all about extrapolating GEA recent results in the future (but 2012HY results are good ; some slowdown in sales but strong margins).

On the other hand, GEA valuation is very low compared to its competitors Kapsch and Q-Free. 2011 EV/EBIT ratios are around 16 for these two.
In 2008 it was possible to buy GEA at 10 €/share, an incredible deal offered by Mr Market (with the benefit of 100 % hindsight). Is it too late now ?

Insider trading : some buying by the family mid-2010 at around 40 €, nothing since.

A very simple DCF valuation (perpetuity) :

So the current price (around 65 €) is consistent with these assumptions :
- 0 growth
- 10 % EBIT margin (reversion to the mean)
- around 13 % required return / discount rate.
So am I willing to "buy" this company with reasonnably conservative assumptions about its future, and a return of ~13 % ? Yes. Do I have a large margin of safety ? Not sure.

Disclosure : long GEA.

mardi 26 juin 2012

FFP (English Version)

Version Française : voir ici

FFP is the main shareholder of the PSA Peugeot Citroen Group. The company belongs to the Peugeot family.

It also develops "a diversification portfolio, composed primarily of minority, significant and friendly holdings with a long-term shareholding approach, but also including private equity and real estate."

This porfolio is detailed in the 2011 annual report (in French only, apparently ; however their website is translated)

These diversification holdings are mostly outside the car manufacturing sector. These acquisitions have mainly been funded with dividends from the PSA group and a little debt.

Participations cotees = listed holdings
non cotees = non listed
capital investissement = private equity
immobilier = real estate

Largest listed holdings are Groupe Seb (home appliances) and Zodiac Aerospace. Zodiac Aerospace is doing very well, and the oulook for the aeronautical sector is good.

Peugeot PSA Group (ticker : UG), on the contrary, is facing difficulties. The stock is at an all-time low, and the whole sector is in crisis. The stock has lost 90 % in a few years and has taken FFP down with it.

Investment thesis (short version)

FFP calculates a Net Asset Value.

It is calculated from stock market prices at the end of the period for listed companies and for non-listed assets, a market value obtained by discounting cash-flows, or by applying different methods of multiples, mainly listed comparables multiples.

FFP last quote is under 30 €, a 50% discount to NAV.
Lets assume the Peugeot PSA group, second european carmaker (by units) in 2010 behind Volkswagen is worth 0.
NAV would still be around 36 €. FFP current price still offers more than 20 % discount in this case.

At the current price, you can buy a diversified basket of holdings and get Peugeot PSA group for free (sum-of-parts analysis).

You can also find this investment thesis here (Gurufocus article) or here (French value blog Super-Pognon, ~ Super-bucks in English !)

Investment thesis (long version)

I wanted to take a closer look at these holdings before putting my hard-earned and much-taxed savings on the table.
Sorry this is really long and tedious, but I see no other way around it.

Note that in 2008 NAV/share went down to 43 € (divided by 3 in 1 year !), which tends to show that the current NAV is not necessarily a lower value limit.
ANR par action  = NAV / share in English

Let's start with a word on Peugeot PSA group (ticker : UG)

The European market is saturated : 600 cars/1000 people and there is excess production capacity.
Buying a car can easily be postponed during a crisis ; besides there was a "cash for clunkers" program a few years ago.
Besides, Peugeot is doing poorly, caught between high-end German manufacturers and low-cost offers. Renault is doing better thanks to Nissan and low-cost brand Dacia (see articles here and here, in French).

Peugeot PSA shares are down 90 % over the last 5 years, 40 % losses so for this year.
In March 2012, PSA announced an alliance with General Motors, and carried out a capital increase (€ 1 billion, at a price of 8.27 € / share).
The company has sold its Paris headquarters, and its car-rental subsidiary Citer.

A few figures
Net income (in mio€) (excluding minority interests)
2009 losses amont to 1,161 m€.

Zoom over the last 5 years

CA = chiffres d'affaires = sales
ROP/CA = operating margin
FCF/CA = FCF/Sales
Dette nette = net debt

Stagnant sales, low operating margins (2-3%), heavy maintenance CAPEX, low FCF in good years.
When the margin is negative, the cash burning rate is impressive (~ -€2bn in 2011).

In 2011, operating income is positive, but manufacturing activities are still losing money (income comes from the car financing activity Banque PSA Finance and subsidiaries Faurecia and Gefco).
Long term debt almost doubled between 2008 and 2009, but remains (for now) limited to 25% of equity.

I calculated the Z-score of Peugeot. I get a Z-score of ~ 1.9 in 2011, the "red zone" (bankruptcy risk) is below 1.8 and that according to this website Ford Z-score is ~ 1.9. If I take the 2009 figures, the Z-score falls to 1.7. Moodys recently degraded the obligations of PSA to junk bond status.

I have a hard time imagining a bankruptcy of Peugeot PSA but the numbers are not brilliant, to say the least.

Current market cap is around €2.6bn, EV (taking into account debt and the recent capital increase) is about €5bn .
Some valuation ratios: P/B~0.2. Current PER~ 5.
EV / EBIT ~ 6. 13 year trailing PER is around 3 !

Always look on the bright side of life : for FFP, the disaster (massive depreciation of the main holding) has ALREADY occured.

The Peugeot Citroen PSA group includes :
- logistics group GEFCO, 40 % of sales outiside PSA Group. 2011 Sales 3.5 €bn and op income 223 €m. PSA has announced its intention to sell the shares, and the offers (private equity groups) range from 800 to 1200 m € (source : Les Echos, in French), so ~ 1/3rd of the current market cap of UG.

- 57 % of auto-parts (car seats, dashboards,...) maker Faurecia (ticker : EO). Only 17 % of Faurecia sales are done with the PSA Group, the 1st client is Volkswagen. Faurecia market cap is ~ 1.5 €bn, so PSA share is worth ~ 1/3rd of the current market cap.

So with FFP current valuation, you get Peugeot PSA for free, including Gefco and ~a half Faurecia.

I will not try to predict the long term future of Peugeot PSA : is it just a hiccup or the start of a permanent decline, like so many (too many ) industrial sectors in France (shipbuilding, refining, steel,...).
Anyway is Peugeot recovers, the upside on FFP stock is interesting. If not, the downside is I think limited.
The margin of safety consists of the other FFP participations, that we'll list below.

Note that some hedge funds are shorting PSA Peugeot stock (with some success, given the evolution of the price). Odey asset management (from the name of its manager Crispin Odey) : link to official AMF declaration.
See also this link from Aswath Damodoran on contrarian investing : Peugeot PSA group is among its top list of "losers" for the last 52 weeks

An article on Peugeot PSA in Gurufocus here

Diversification portfolio

There's a large number of companies in this portfolio and each one would require an entire post. Besides I acknowledge that my ressources/aptitudes are limited. So my objective is to have a look at each participation and make a conservative back-of-the enveloppe evaluation, to check that I'm not buying overvalued participations, and to better know FFP.

Lets start by listed holdings.

LISI (ticker FII) manufactures fasterners for the automotive, aerospace and medical (implants) industries. English financial report here. Sales are split equally between aerospace and automotive sectors, medical much smaller. According to the annual report, 2012 outlook is good for aerospace, ok for automative. Supplies mainly Airbus, but recent contract with Boeing. Automotive sells to all major european car manufacturers (strategic supplier of Daimler). Seems like a good business.
Mean ROE~10%. Last quote 45 €, EV/EBIT ~8, EV/EBIT (2006 to 2011 avg) ~ 8. P/B ~ 1.
Does not seem overvalued to me.

SEB group (ticker : SB) is a home appliance manufacturer. Well known brands Moulinex, Krups, Rowenta,. in Europe, I don't know if they are familiar in the US or elsewhere. Strong presence in emerging markets (acquisition of local brands and manufacturers). Only 20 % of sales in France and 38 % in western Europe.
Quote ~ 50 €. EV/EBIT ~ 8, EV/2002-2012 avg EBIT ~13. Decent margins, mean ROE ~ 20% pretty impressive. P/B~2.
The stock tanked to 20 € in 2008 and has strongly rebounded since.
Does not seem overvalued.

Zodiac aerospace (ticker ZC) makes aeronautical on-board systems, safety systems, aircraft seats,... See wikipedia article here. It's a blue-chip stock (favorable sector, niche market, probably protected with certification constraints in the aeronautical sector). Double digit margins, mid-teens ROE, sales growth. Valuation reflects this (80 €, up 40% this year, EV/EBIT ~ 14; PER ~20).
To be conservative, I'll take a much lower valuation (50 €, EV/EBIT ~10, knowing that 2011 was a record year for sales).

Orpea (ticker : ORP) is an European leader in clinics/nursing homes for elderly people (long term, especially for people needing physical/psychiatric care). English financial report here, investor presentation here. Double digit operating margins, probable barriers to entry (regulations, large investments), favorable market outlook with the greying of the European population, growth of revenue, results. But a spectacular run-up in debt to finance new buildings (~400 facilities total) and beds (~37000 beds, +10000 beds in 2 years) accross Europe.
For a last quote of 25€, 2011 PER ~17.
To be conservative, I'll take a much lower valuation (15€, PER~10). I use the PER, not taking into account financial debt because it's balanced by real-estate assets.

Ipsos (ticker : IPS) is a market research company (advertising research, opinion polls,...). Comparable to Nielsen in the US, albeit much smaller. Company motto is "Nobody's unpredictable". See wikipedia article here. English financial report here, investor presentation here. 43% of Sales in Europe. Pretty stable operating margin ~10 %. Growth, lots of acquisitions, and a major one in 2011 (Synovate, a UK company) which has sent the gearing up from 30 % to 66 %.
For a last quote of 25 €, PER = 13, EV/EBIT ~ 13, EV/avg 5 year EBIT ~13.
To be conservative, I'll take a much lower valuation (17 €, EV/ROP ~ 10).

Linedata (ticker : LIN) makes specialized sotfware for the financial/banking sectors. Linedata has launched a tender offer for 25.7 % of its shares at 16 €, and FFP has said they would sell their participation. 43% of the tendered shares have been repurchased.
For my evaluation, I take an average of 43%*16+(100-43)%*13 (last quote) = 14.3 €. FFP should receive some ~10 €mio in cash.

Let's now move to unlisted holdings

DKSH is a services company with a focus on Asia. DKSH has made an IPO this year. FFP has sold 35 % of its shares during this IPO, and made a nice profit (x3.2) on its initial investment. FFP keeps the remaining shares : see FFP press release here.
DKSH is now listed on the swiss stock exchange, and the 2011 financial report is available.
For a last quote of 51 CHF, entreprise value is ~ 3200 CHFm, for an EBIT of 237 CHFm. EV/EBIT ~ 13.
To be conservative, I take a lower valuation (38 CHF, around  30 €, EV/ROP ~ 10). If I'm not mistaken, FFP still holds around 4,360,000 DKSH shares.

Sanef operates 4 of 6 motorways providing access to Paris. Traffic is not about to plunge. FFP does not provide its evaluation of its stake in Sanef in 2011, but did it in the 2010 annual report : 135 m€. I do not have acess to Sanef accounts.

Is this a reasonable estimate?  Autoroutes Paris Rhin Rhone, a listed comparable company (ticker: ARR) has a market cap of € 4,700 m for 2011 sales of  € 2,022 m, a ~ 0.5 ratio.
If I apply the same ratio to 2011 sales of Sanef (€ 1,489 m), Sanef is worth ~ € 3 billion. FFP holds 5.1%, which gives a valuation of € 150m compared with € 135 m given by FFP end 2010.
I keep this figure for my evaluation.

Onet is a facility/multi services company (cleaning, logistics, services for the nuclear industry,..). FFP valued its stake in Onet around 97 m€ end 2010. I do not have access to Onet annual reports, but only to the data given by FFP on its website :

Onet would be worth 435 m€ for a net result of 18 m€, a PER of 24 of astronomical proportions for a company with meager margins. With the operating result, EV/ROP ~10 or 0.3x 2011 sales, more reasonable ratios.
Net margin decreased from 2.4% in 2010 to 1.3% in 2011. According to the FFP website, this is mainly due to a delay in passing through an increase in salary charges to customers.
A comparable listed company is Derichebourg (ticker : DGB), currently valued 6x its operational result and 0.3x sales. But the company is not directly comparable (DGB is mainly involved in recycling).

A direct competitor of Onet is ISS, based in Danemark. ISS publishes some figures but is a private company (owned by Goldman Sachs). Onet is 10x smaller than ISS, but apparently ISS is heavily in debt. Surfing on the net, you can find this pdf (evaluation of ISS done by Danish MBA students, with outside references). ISS would be worth between 40 to 50 DKKbn, EV/EBIT between 9 and 10.

To be conservative, I'll take an EV/EBIT ratio of 8 for Onet, a 20 % discount on FFP evaluation.

Chateau Guiraud makes wine (Sauternes). Valued 10 €m end 2010. Given the numerous and wild approximations I've already made for the other participations, it's negligible.

Private equity

IDI (ticker : IDIP) is a private equity company, listed on Euronext. Last quote is around 22 €, NAV 38 €/share according to the latest report. 40 % discount on NAV.
I take 22 € for my evalution.

Sagard, LBO France are unlisted private equity companies. Pretty opaque for me, even if I recognize some names in their holdings (such as excellent railway equiment Faiveley).
To be conservative, I'll brutally apply a 50% discount on their evaluation by FFP.

Real estate

Immobiliere Dassault owns ~10 buildings in Paris. Judging from the pictures and prime locations, seems like high-quality real estate. FFP evaluation relies on a professionnel appraiser.
To be conservative, I apply a 20 % discount on this appraisal.


The following table sums up my estimates compared to the NCAV published by FFP end 2011.
In a recent release, FFP announced that it had decreased its debt by 31 m€ (DKSH sale during IPO, but participation to PSA Peugeot capital increase).

Montant = amount
Cours = quote
Cours maintenant = latest stock quote
Cours retenu = retained (for the evaluation) stock quote

So to sum it up, FFP is still cheap even valuing its main asset for 0, and taking conservative (or so I hope) valuations for the other assets.
Besides, valuing Peugeot PSA at 0 makes little sense, because Gefco and Faurecia make up ~half of PSA current market cap).
Some hodlings are interesting for my portfolio allocation (aeronautics, exposure to Swiss Francs and emerging markets,...).

Why is FFP cheap ?

Pretty obvious reasons :
- low notoriety,
- FFP image = Peugeot + car maker + Europe France (even worse) ; I guess a fund manager normal reaction is not to touch it with a ten-foot pole ?
- lots of very different holdings => complicated valuation, risk of compound errors, holding discount
- scaring downward momentum
- no possibility of external takeover
- no control over capital allocation (the Peugeot familiy decides everything, you just ride shotgun, or more aptly in the rear trunk !)

Who is selling ?

I don't know. No signification insider selling or treshold crossing declared on the AMF website.

What's the upside potential ?

No precise idea. If the NCAV goes back to 2010 level, and the holding discount to a "normal" of 20-30 %, we're looking at a ~65 € target. That's a lot of  IFs.

Why am I publishing this ?

All right, I'm frigthened by the plunge of FFP shares. Maybe I've fallen to some psychological bias (confirmation bias, over confidence,...) or missed something vital. I'd love to hear (argumented) contrary opinions, and have an outside "reality check").
Comments welcomed. Otherwise, my email is in the contact page, thanks in advance..

Disclosure : long FFP.


mercredi 20 juin 2012


(English version : here)

FFP est le principal actionnaire du groupe PSA Peugeot Citroën. La société appartient à la famille Peugeot.

FFP développe par ailleurs un portefeuille "composé principalement de participations minoritaires, significatives et amicales, avec une approche d'actionnaires de long terme, mais aussi de capital-investissement et d'immobilier", dixit FFP.

Ces participations sont détaillées dans le rapport annuel 2011 de FFP.
Leur point commun ? Ne rien à voir avec l'automobile, logique de la part de la famille Peugeot dans une optique de diversification.
Ces acquisitions se sont faites au fil du temps, financées essentiellement par les revenus tirés de PSA et un peu par emprunt.

On a donc affaire à une société holding, avec des activités très diverses. On reviendra plus bas sur ces participations.

Les plus importantes participations cotées sont le Groupe Seb (electroménager), et Zodiac Aerospace. Le groupe Zodiac va très très bien, porté par la bonne santé du secteur .

On ne peut pas en dire autant du groupe PSA Peugeot-Citroën (ticker : UG) , qui a atteint ses plus bas depuis 10 ans, sur fond de crise du secteur automobile en Europe. Le cours de Peugeot PSA a perdu presque 90 % de sa valeur ces dernières années. La déconfiture du cours de Peugeot a entraîné FFP à sa suite.

Pourquoi acheter (version courte)

FFP calcule dans son rapport annuel un calcul de l'actif net réevalué, c'est à dire en évaluant les sociétés cotées à leur cours de bourse (Zodiac, Seb,...), et les sociétés non cotées par d'autres méthodes d'évaluation (sociétés comparables, DCF, etc...).

Ici les chiffres de fin 2011 :

L'action FFP cote sous les 30 €, soit 50 % en dessous de l'actif net réevalué calculé fin 2011.

Mettons que Peugeot PSA, 2ème constructeur de voitures européen en 2010 derrière Volkswagen (en nombre d'unités)  vaille 0.

L'actif net réevalué serait alors de 36 €. FFP offre encore une décote de plus de 20% par rapport à cette hypothèse.

Autrement dit au cours actuel FFP permet d'acheter un portefeuille diversifié et de prendre part dans le groupe PSA gratuitement.

Ce n'est pas une idée originale, on trouve la même analyse dans ce blog (salut à Super-Pognon !), ou par exemple sur le site US Gurufocus.

Détail des participations

J'ai voulu aller un peu plus loin et regarder plus en détail les différentes participations, et vérifier qu'elles ne sont pas surévaluées. Désolé, c'est fastidieux. En tous cas je me sens obligé de descendre un peu dans les détails avant de d'investir mon épargne.

Notons notamment qu'en 2008 l'ANR est descendu à 43 € (divisé par 3 en un an !), ce qui prouve que l'ANR actuel n'est pas nécéssairement une valeur plancher.

Commençons par dire un mot sur Peugeot PSA (ticker : UG)

Le marché européen est globalement en surcapacité de production et le marché est saturé (600 voitures pour 1000 habitants). L'achat d'une voiture neuve peut facilement être repoussé.
Le groupe Peugeot PSA souffre particulièrement  (La Tribune, Les Echos) et semble pris en tenaille entre le haut de gamme allemand et le low-cost. Renault s'en sort un peu mieux grâce à Nissan et Dacia.

Le cours de PSA a perdu 90 % de sa valeur en 5 ans, 40 % depuis le début de l'année.
En mars 2012, le groupe PSA a annoncé une alliance avec General Motors, et procédé à une augmentation de capital (1 Md€, au prix de 8,27 €/action). Le siège social à Paris a été vendu, ansi que la participation dans le loueur Citer.

Quelques chiffres
Résultat net (en mio €)
En 2009 les pertes on avoisiné 1161 m€.

Zoom sur les 5 dernières années

Stagnation des ventes, marge faible (2-3%), beaucoup de CAPEX, faible génération de cash les bonnes années.
Dès que la marge est insuffisante, la consommation de cash est impressionante (~-2 Md€ en 2011).
En 2011, le résultat opérationnel est positif, mais la branche auto perd encore de l'argent (c'est la branche "financement" Banque PSA Finance, ainsi que les filiales Faurecia et Gefco, qui permettent d'assurer un résultat positif).
La dette (long terme) a quasiment doublé entre 2008 et 2009, mais reste (pour l'instant) limitée à 25 % des fonds propres.

Je me suis "amusé" à calculer le Z-score de Peugeot. J'obtiens un Z-score ~ 1,9 en 2011, sachant que la "zone rouge" (risque de faillite) commence pour un score < 1,8 et que sur internet le Z-score de Ford est de l'ordre de 1,9. Mais avec les chiffres de 2009, le Z-score de UG descend à 1,7. Moodys a récemment dégradé les obligations de PSA au rang de "junk bonds".

J'ai beaucoup de mal à imaginer une faillite de PSA mais les chiffres ne sont donc pas brillants.

La capitalisation boursière actuelle du groupe est de l'ordre de 2,6 Md€, mais la valeur d'entreprise (en tenant compte de la dette et de l'augmentation de capital) est de l'ordre de 5 Md€.
Quelques ratios de valorisation : UG est valorisé 0,2 fois ses fonds propres. Le PER 2011 est de 5 environ. EV/ROP 2011 ~6. Le PER en prenant la moyenne sur les 13 dernières années est de 3 !

Always look on the bright side of life : pour le holding FFP, la catastrophe (dépreciation du principal actif) est DEJA arrivée.

Notons que le le groupe PSA ne comprend pas uniquement les Peugeot et Citroën, mais également :

-100 % du groupe de logistique GEFCO, qui réalise 40 % de son chiffres d'affaires en dehors du groupe PSA. CA 2011 de 3,8 Md d'€ et résultat opérationnel de 223 m€. Le groupe PSA a annoncé sa volonté de vendre cette participation, et les offres présentées (groupes de private equity) vont de 800 à 1200 m€ (source : Les Echos), soit pas loin du tiers de la capitalisation actuelle du Groupe PSA !

- 57 % de Faurecia (ticker : EO), 6e équimentier automobile mondial (sièges auto, planches de bord,....), dont le groupe PSA ne représente que 17 % des ventes. Le premier client est le groupe Volkswagen. La capitalisation boursière de Faurecia est de 1,5 Md€, donc là encore la participation représentent pas loin du tiers de la capitalisation actuelle de PSA.

Comme dit plus haut, en achetant FFP on a Peugeot Citroën pour 0 mais également Gefco et la participation dans Faurecia.
Je ne me hasarderais pas pronostiquer l'avenir à long terme de PSA : accident de parcours ou déclin durable, comme tant d'industries lourdes en France ? (construction navale, sidérurgie, raffinage, etc....).
En cas de redressement l'effet sur le cours devrait être spectaculaire.
Sinon mes pertes devraient être limitées. La marge de sécurité est constituée par les autres participations, que l'on va regarder ci-dessous.

Notons que certains hedge funds parient sur une baisse de PSA (avec succès vu l'évolution du cours).
Odey asset management (du nom du principal manager Crispin Odey) vend PSA à découvert : déclaration AMF.

Détail des participations de diversification

Vu le nombre de participations, et étant donné mes ressources/compétences limitées, mon objectif est de faire une évaluation approximative. Chaque valeur du portefeuille détenu par FFP mériterait un post à part entière et les risques d'erreur augmentent.

Je commence par les participations cotées.

Lisi (ticker : FII) fabrique des fixations (vis spéciales, clips,..) pour l'automobile, l'aéronautique (par exemple contrat récent avec Boeing) et le médical (implants...).
Cours actuel ~ 45 €. EV/ROP 2011 ~ 8. EV/ROP moyen de 2006 à 2011 ~ 8. PER 2011 ~9. CB/FP ~1 La société ne semble pas survalorisée à ce cours (le chiffre d'affaires se répartit équitablement entre automobile et aéronautique et les perspectives pour 2012 sont bonnes).

Groupe Seb (ticker : SK) fabrique de l'electroménager (leader mondial du petit electoménager; marques bien connues Moulinex, Krups,...seulement 20 % des ventes se font en France et 38 % en Europe occidentale).
Cours actuel ~ 50 €. EV/ROP 2011 ~8, EV/ROP moyen de 2002 à 2011 ~13, PER 2011~12. L'action s'était effondrée en 2008 (20 €) et a fortement rebondi depuis. La société ne semble pas surévaluée à ce cours.

Zodiac Aerospace (ticker : ZC) (l'activité Zodiac nautique, qui a été cédée) est un équipementier aéronautique (sièges, gestion carburant, équipement cabine,...).
Je pense que c'est une société de qualité (secteur porteur, marché de niche, probables avantages concurrentiels de Zodiac, marché "protégé" par des contraintes de certification dans l'aéronautique). Le cours de bourse (80 €, +40 % sur un an) et les ratios de valorisation actuels (EV/ROP 2011 ~14 PER 2011 ~20) reflètent cette situation.
Je choisis néanmoins de retenir une valorisation "à la louche" beaucoup plus prudente de 50 € (qui correspond à EV/ROP 2011 ~10), sachant que l'année 2011 a été une année record en termes de chiffre d'affaire et marge opérationnelle.

Orpéa  (ticker : ORP) gère des maisons de retraite médicalisées en France et en Europe. Marge opérationnelle à deux chiffres, barrières à l'entrée (réglementaires, investissements), marché porteur (vieillissement démographique), croissance des résultats, mais montée de l'endettement pour financer le parc immobilier. Pour un dernier cours de 25 €, le PER 2011 est de 17. Je retiens un cours "à la louche" correspondant à un PER 2011 de 10, soit 15 € environ (utilisation du PER pour ne pas tenir compte de la dette, compensée à l'actif par le parc immobilier, en espérant qu'il n'ait pas été surpayé).

Ipsos est un institut de sondages/études marketing. Pour un denier cours de 25 €, PER de 13, EV/ROP 2011~13; EV/ROP moyen sur 5 ans ~ 13. 43 % du CA en Europe, le reste aux US en en Asie. Marge opérationnelle stable de l'ordre de 10%. Le groupe a procédé à de nombreuses acquisitions, dont une importante en 2011, ce qui a fait beaucoup monter l'endettement. Je retiens une valorisation "à la louche" beaucoup plus prudente de 17€ correspondant à EV/ROP ~10.

Linedata (ticker : LIN) est un éditeur de logiciels pour la gestion/finance.  Linedata a annoncé un rachat partiel de ses actions à 16 €, et FFP a annoncé son intention d'apporter à l'offre. Le taux de rachat récemment annoncé est de 43 %, je retiens donc un cours moyen de 43%*16+(100-43)%*13€ (dernier cours) =14,3 €. FFP devrait donc récupérer une dizaine de m€ en cash.

Passons maintenant aux participations non cotées

DKSH  est une société Suisse de services essentiellement tournée vers l'Asie, introduite en bourse cette année. FFP a annoncé avoir cédé 35 % de sa participation lors de l'intro, avoir réalisé une plus value de 92 m€ (x3.2 sur l'investssement initial), et conservé le solde de ses actions : communiqué. DKSH est donc maintenant cotée en Suisse et on a accès au rapport annuel 2011. Pour un dernier cours de 51 CHF, la valeur d'entreprise est de l'odre de 3200 mCHF, pour un résultat opérationnel de 238 mCHF. EV/ROP~13. Je retiens un cours plus prudent de 38 CHF (EV/ROP ~10), soit environ 30 €. Si je ne me trompe pas FFP doit encore détenir environ 4 360 000 actions de DKSH après cession.

Sanef est une société d'autoroute. Sanef est concessionnaire de 4 des 6 autoroutes d'accès à Paris, je pense que le traffic n'est pas près de baisser sérieusement ! FFP ne fournit pas son estimation de sa participation dans Sanef en 2011, mais l'avait fait dans son rapport annuel 2010 : 135 m€. Je n'ai pas accès aux rapports annuels de Sanef.

Est-ce une estimation raisonnable ? Le groupe des Autoroutes Paris Rhin Rhone (ticker : ARR) a une capitalisation boursière de 4700 m€, pour un CA 2011 de 2022 m€, soit un ratio ~ 0.5. Si j'applique le même ratio au chiffre d'affaires de Sanef (1489 m€), Sanef vaudrait donc dans les 3 Md€. FFP en détient 5,1 %, ce qui donne donc une valorisation de 150 m€ à comparer aux 135 m€ de FFP fin 2010. Pas délirant donc. Je m'en tiens là et retiens l'estimation fin 2010 de FFP.

Onet est un groupe de services aux entreprises (propreté, multiservices,...). FFP estimait cette participation (23 % de Onet) à 97 m€ fin 2010. Là encore je n'ai pas accès aux rapports annuels d'Onet, mais aux infos que FFP veut bien communiquer :

Onet serait donc valorisée 435 m€ pour un résultat net en 2011 de 18 m€, ce qui me paraît astronomique (PER de 24), ou encore 10 fois le résultat opérationnel 2011 ou encore 0,3 fois le chiffre d'affaires 2011 ce qui paraît plus raisonnable.
FFP indique que la marge nette est en baisse en 2011 en raison d’un renchérissement des charges sur salaires qui ne sont pas répercutées immédiatement à la clientèle. Aucune info sur l'endettement du groupe.
Une société comparable cotée est le groupe Derichebourg (ticker : DGB), valorisée actuellement 6 fois son ROP 2011 et 0,3 fois son chiffre d'affaires. L'activité n'est pas toutefois directement comparable (Derichebourg s'occupe essentiellement de recyclage de métaux, gestion des déchets, etc...). DGB est lourdement endettée.

Un concurrent direct de Onet est le groupe danois ISS.
ISS donne quelques chiffres, mais malheureusement ISS n'est pas cotée en bourse (elle appartient à Goldman Sachs). ISS fait 10 fois le chiffre d'affaires de Onet mais est apparemment endettée jusqu'aux oreilles. En farfouillant sur internet on trouve ce pdf (rapport écrit par des étudiants en finance). ISS serait estimée entre 40 et 50 Md de DKK (couronnes danoises), soit EV/ROP entre 9 et 11 
Je retiens prudemment un ratio EV/ROP 2011 de 8 soit une décote d'environ 20 % par rapport à l'estimation de FFP.

Chateau Guiraud fait du vin (Sauternes). La participation est estimée à 10 m€ fin 2010. Vu les nombreuses et hasardeuses approximations que j'ai pu faire avant, on est dans l'épaisseur du trait.

Participations de capital investissement

IDI (ticker: IDIP) est une société de capital investissement (private equity), cotée en bourse. Le dernier cours est de 22 €, l'ANR au 31/03/12 est de 38 € par action. Je retiens 22 € (40 % de décote sur l'ANR).

Sagard, LBO France, sont des fonds de private equity non cotés et plutôt opaques pour moi.
J'applique "brutalement" une décote de 50 % sur la valeur estimée par FFP.


Enfin Immobilière Dassault détient une dizaine d'immeubles à Paris.
Les immeubles détenus sont manifestement des adresses prestigieuses. La valeur retenue pour le calcul de l'ANR repose sur une expertise. J'applique une décote de 20 % sur la valeur d'expertise.

En Résumé

Le tableau ci-dessous résume mes estimations comparées au calcul de l'ANR publié par FFP fin 2011.
FFP annonce dans un communiqué s'être désendetté de 31 m€ (cession de DKSH dminiuée de la participation à l'augmentation de capital du groupe PSA).

Moralité : même en prenant Peugeot PSA à 0 et des évaluations plutôt basses pour les autres actifs, au cours actuel FFP décote encore par rapport à mes estimations.

Pourquoi FFP n'est pas chère ?

Plusieurs raisons évidentes au manque d'acheteurs
- faible notoriété
- image de FFP = Peugeot +  automobile + Europe : un gérant n'est pas prêt d'y toucher !
- beaucoup de participations très différentes => évaluation compliquée, décote de holding
- dégringolade du cours effrayante.

Qui vend et pouquoi ?

Je ne sais pas. Je n'ai vu aucune déclaration significative et récente sur le site de l'AMF (franchissement de seuil à la baisse d'un FCP/SICAV, ou d'un initié).

Au cours actuel je pense que FFP décote largement par rapport à la seule valeur de ses participations de diversification.
Mon évaluation est certainement fausse, mais elle est j'espère conservative.

Le groupe Peugeot PSA est alors valorisé pour 0, sachant que :
- la capitalisation actuelle du groupe PSA est de 2,6 Md€
- les seules participations du groupe PSA (Gefco, Faurecia) représentent plus de la moitié de cette capitalisation

Certaines de ses participations offrent pour moi une diversification intéressante :
- DKSH : cotée en francs suisses, activité en Asie
- Zodiac : aéronautique (je n'en ai pas en portefeuille)

Je compte sur mes lecteurs pour un "reality check". Il est assez facile de croire à ses propres illusions, ou de ne sélectionner que les informations/opinions qui m'arrangent.
D'autre part un biais psychologique bien connu est que plus on a consacré de temps à une analyse, plus on lui accorde de valeur et plus on a (à tord) l'impression de maîtriser le risque.

Je serais donc ravi d'avoir des avis contraires (mais constructifs).

déclaration AMF : actionnaire FFP.

jeudi 24 mai 2012

LaCie (LAC)

English version : see below. En Français : voir en fin d'article (à venir).
Sorry for the telegram style, I don't have much time.

LaCie (LAC on Euronext) made the headlines today.
Seagate (STX on the Nasdaq) announced to it would buy LaCie (more precisely 64.5 % of the company, from Phillipe Spruch, one of the founders and CEO of the company).

Seagate will then make a tender offer for the remaing shares € 4.05 /share in cash.
LaCie stock jumped some 20 % today, closing around € 4.

This values LaCie at € 146 milion.
I'm interested because :
- I'm a LaCie shareholder : is it a fair offer ?
- it's interesting as a reference point for valuation.

My immediate reaction was that it's a lowball offer.

LaCie sells computer hardware storage solutions (external hard drives, but also flash drives ; the company recently acquired Wuala for cloud storage and a participation in Loewe AG, a german high-end electronics company).
Some valuation ratios (4.05 €/share)
Market cap : 147 m€
Entreprise Value (based on the latest HY report) = Market cap + short term financial debt + LT financial debt - cash and equivalent
EV = 147 + 2.1 + 4.3 - 44 = 109 m€
LaCie has almost no debt, and ample cash reserves.

2011 operational result 18.4 m€
EV/ROP 2011 = 6

With a last dividend of €0.33, current yield is 8.1 %.
According to the latest LaCie HY report, 2012 was not shaping up as a bad year. Lower sales but better margins.

So Seagate buys LaCie for 6 times 2011 EBIT. Pretty low on a first look and much less than what I expected when I bought LaCie a few months ago.
Note that in 2009 it was possible to buy LaCie for less than 2 €, it was a net-net then.

Is it a fair offer ?

If we have a look at the past results and free cash flow generation :
- LaCie has been profitable, even during the 2008-2009 crisis and after the 2011 floods in Thailand
- no growth in recent years ; temporary or the sign of a secular decline in a commodity business facing an intense competion ?

ROP = operational result
ROP/CA = operational margin
FCF = free cash flow

EV/2005 to 2011 mean ROP = 5
EV/2005 to 2011 mean FCF = 9

See this post at Gurufocus

Note that the point of the original gurufocus article was that WDC was a bargain. So if WDC is a bargain, LAC is a bargain ?

LaCie is a dwarf compared to these market leaders, which somehow distorts the analysis.
EV/Sales (LAC) 0.4x
EV/EBIT (LAC) 5.9x

WDC recently bought Hitachi Storage for EV/Sales = 0.7x and EV/EBIT=6.8x

Interim conclusion

It will be interesting to read the "independent expert" report on the tender offer.
For having read a few of these, my impression is that it's possible to justify about any price by adjusting some parameters in the DCF evaluation process.

STX offer does not seem un-reasonable when looking at comparable companies but rather low on an "absolute" basis and decidely ungenerous. Good timing on their part in the midst of the current European crisis (scared shareholders and drepressed valuations).

Here is an interview by Phillip Spruch on financial channel BFM.
It's in French but to sum it up :
- STX was at the same time a supplier and a competitor of LaCie. Only 3 actors in the hard drive industry now (STX, WDC and Toshiba) => difficult situation
- we could have made the choice to downsize (from 400 to 150 people) and focus on high-end products
- we have choosen to bounce back and go to Seagate ; we'll be in charge of all the external hard-drive division
- it's a good offer and it's the best solution for LaCie employees.

I'm not selling at this price on a first analysis. It'll be interesting to see if the independent expert judges the price fair for a squeeze-out procedure.

Regarding the second point (reference point for valuation, valuation methodology) my post is obviously not complete. In the interim, see this post by Geof Gannon on WDC.

Feedback welcomed.

Version en Français  : demain !

samedi 21 avril 2012

Seth Klarman / Vivendi update

The Baupost / Klarman position taking in Vivendi (see my previous post) news and with it the possibility that I'm missing something continues to nag me so I've done some additional checking.
It's not really important, but I tend to get obsessed once a subject interests me.

Turns out that Klarman took a position in a French company in the late 90's : link.
The 95-2001 Baupost fund letters are compiled here.

This company is Chargeurs (ticker : CRI). The Value and opportunity blog had signaled it but I hadn't noticed.

If you check the 2011 Chargeur Group annual report, page 12, The Baupost Group still holds ~9 % of the capital, some ~15 years later

Actionnaire = shareholder
action = share
nombre d'actions = number of shares

I wasn't able to find much details about Chargeurs in the Baupost letters, but the AMF (=French SEC) requires major shareholders to officialy register when they cross some treshholds (5%, 10%,...).
Their records are public.

Turns out that
in '98 Baupost had more than 5 % : link (in French)
in '99 Baupost had more than 10 % of Chargeurs : link
in '11 Baupost went under 10 % : link.

Below is the long term graph of Chargeurs.
I checked it, taking into account stock splits and Francs => Euro conversion and checked if it was consistent with some pre-2000 Chargeurs annual reports, but a mistake is always possible.

If I'm not mistaken and if the long-term graph is right, Baupost is facing a large potential loss on this position.

So whats's my point ?

Klarman position-taking in Vivendi is a strong positive signal, not a guarantee
And I'm still a fan of Seth Klarman.

P.S : for those interested, Chargeurs currently trades at 25 % of book value and 2011 PER is 4.