X VOUS ÊTES ICI : NEWS > Analyses Financières

Analyses Financières

18/11/2004

While holding company Sapec has a few attractive growth
businesses and a low valuation, a major potential
investment in wind farms is creating uncertainty, as it may
substantially raise Sapec’s already high leverage. HOLD.

A diversified set of businesses with decreasing capex
requirements. Of Sapec’s six businesses, Agro and Micronutrients offer
significant long-term growth potential with few incremental capex
requirements. We expect these businesses to represent half of Sapec’s
2006F EBITA, with revenues expected to grow 15% pa in 2003-06. Sapec’s
other businesses are capital-intensive and cyclical (though following different
cycles), but should not require significant incremental investments in the
medium term, as the company has either completed significant investments
in them recently (Logistics & Port Handling and Hydraulic Power
Generation), or intends not to increase their size (Chemicals and Food
Processing Distribution). As a result, Sapec’s high debt burden (3.1x interest
cover and 102% gearing) is likely to come down gradually, unless Sapec
decides to build and operate the 200MW of wind power plants it hopes to
gain concessions for in the near future. The company will make a decision
on the subject in March 2005.
Our discounted cash-flow model values Sapec at €71.7,
assuming no further investments in wind farms. This
corresponds to 7.1x 2006F EPS or 6.0x 2006F adjusted EBITDA.

download here

Olivier Parein
Brussels +32 2 547 7532
olivier.parein@ing.be

Back