(BFM Bourse) – The Vendée group raises its operating profit and margin objectives after record 2023 activity. For the current year, Beneteau, however, expects clearances at dealerships, in a context of a sharp rise in interest rates. This phenomenon is expected to normalize in 2025.
Beneteau managed to outwit the bad macroeconomic elements to arrive safely at the dock with annual sales at the peak. This performance, superior to its expectations, was also acclaimed on the stock market this Tuesday. The world leader in nautical industries gained 7.2% around 1:40 p.m., signing the largest increases in the Parisian market, just ahead of Michelin which delighted the market after unveiling 2023 cash generation which exceeded expectations.
As for Beneteau, the market also appreciates the direction of the group’s activity based in Saint-Gilles-Croix-de-Vie. For the 2023 financial year, the nautical group achieved a turnover up 18% in published data to reach a “record” level of 1.785 billion euros. Beneteau slightly exceeds the expectations of the Factset consensus, which expects on average a turnover of 1.76 billion euros.
Excluding the housing division which is in the process of being sold to Trigano, the group’s turnover in published data therefore amounts to 1.465 billion euros, an increase of 17% on a comparable basis.
In detail, the boat division – which concentrates the majority of the company’s billings – increased by 18% in published data for its turnover which stood at 1.465 billion euros. However, the end of the year was more difficult for Beneteau. In the fourth quarter, activity contracted by 7.4% year-on-year to 440.6 million euros, but the company reports having done better than its own expectations over the period.
The group reports having suffered a heavy drop of 30% in engine activity over one year. This trend “confirmed the slowdown in demand in the dayboating segments, affected by the rise in interest rates”. Alongside, Beneteau also indicates having been penalized by an unfavorable base effect to the extent that, for the largest units, “the second part of 2022 had been significantly increased by a postponement of delivery from the first to the second half”.
As for the housing division, 2023 turnover increased by 24% year-on-year to amount to 320 million euros. “It benefits from the favorable dynamics of the outdoor hotel markets, particularly in the French market. This growth is also due to the continued improvement of the product mix, and includes the effects of inflation,” adds The direction.
Increased profitability
Given the “remarkable levels” of turnover generated by its two home and boat divisions “associated with operational efficiency and good inflation management”, Beneteau has authorized itself to raise the bar for one of its indicators and this less than a month before the full publication of the annual accounts on Tuesday March 19.
The company therefore intends to “significantly” exceed its latest current operating profit forecast of 210 million euros for the 2023 financial year. This new objective is understood before the application of an accounting standard linked to the process of selling the housing activity in Trigano.
Thus, the operating margins of Beneteau’s two businesses will exceed the 12% projected for the Boat division and the 11% announced for the housing division.
Destocking on the 2024 program
But the macroeconomic context has somewhat blurred Beneteau’s visibility, particularly in terms of order volumes for small boats. In the latest publications, Beneteau indicated that it expected a destocking in certain distribution networks in 2024, “in a context of a sharp rise in interest rates and with a level of stocks at dealers returning to the level pre-covid in volume”.
The company provided further details and quantified this destocking effect. It estimates the impact of this phenomenon on its accounts at between 100 and 150 million euros in 2024, before these strong inventory variations normalize in 2025.
“With increases in interest rates, financing the purchase of boats is more expensive. This penalizes both final demand, that is to say customers, but also dealers who need to finance their stocks “, indicated Emmanuel Parot, head of equity research at Gilbert Dupont, in September.
Despite everything, Beneteau is counting on the continued move upmarket of its product offering, as well as on a more flexible industrial tool to preserve its profitability. It estimates that its boat division is able to generate a current operating margin of between 7% and 10% in 2024, in accordance with its “Let’s go beyond” strategic plan launched in 2020.
This roadmap establishes the ambitions of the Saint-Gilles-Croix-de-Vie group for 2025, based “on 10 boat brands, a more efficient industrial strategy and innovation in the service of the environment”.
The company also confirms its double-digit operating margin trajectory in 2025.
Sabrina Sadgui – ©2024 BFM Bourse
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