(Boursier.com) — THE TREND
Red morning in Paris. The day after a very calm session in the absence of American investors, the CAC40 dropped 0.60% to 7,292 points at midday, penalized by the return of fears of prolonged monetary tightening. Stronger than expected flash PMI indices in both France and the euro zone, as well as a higher-than-expected ZEW index in Germany, argue for continued ECB rate hikes. The resurgence of geopolitical tensions is also not very reassuring. Vladimir Putin this morning accused NATO and the West of stoking the conflict in Ukraine by mistakenly thinking they could defeat Russia, whose existence they seek to destroy. This renewed concern is clearly visible on the bond market with rates tending quite clearly this afternoon and a ten-year OAT rate again close to 3% (+4.5 bp).
In this context, corporate publications take a back seat. Despite solid results, Capgemini and Worldline are falling. The accounts of Engie and Edenred are welcomed.
The rise in the dollar is penalizing oil prices, which are also suffering from fears about the economy in the event of prolonged monetary tightening by central banks. A barrel of Brent from the North Sea fell 0.3% to $83.8 in London.
RISING VALUES
* Engie gains 4% to 14.1 euros. The company will increase its dividend by 65% after seeing its results soar last year thanks to soaring natural gas and electricity prices caused by supply disruptions following the invasion of the Ukraine by Russia. The energy company thus generated net recurring income group share of 5.2 billion euros in 2022, compared to 2.9 billion euros a year earlier, for revenues up 62.2% (+60 .4% on an organic basis) to 93.9 billion euros. Operating income amounted to 9 billion euros against 6.1 billion euros in 2021, an organic increase of 43%. The Board of Directors proposes a dividend of 1.40 euro per share for 2022, compared to 0.85 euro for the previous financial year, which corresponds to a distribution rate of 65%, in line with the dividend policy of the Group aiming to distribute 65 to 75% of the net recurring income, Group share and including a minimum dividend of 0.65 euros per share for the period from 2023 to 2025.
* Air France-KLM climbed 2% to 1.74 euros, helped by a note from Barclays. According to our information, the British bank has started monitoring the carrier with an advice of ‘overweight’ and a target of 2.3 euros. Overall, the broker believes that the post-pandemic European airline industry will have many similarities to the pre-pandemic one. Regarding more specifically Air France-KLM, Barclays considers the company well positioned strategically and has, according to him, a solid management team. The restructuring of Air France is bearing fruit. KLM will change its strategy to “sweat” its assets. The post-Covid restructuring of the balance sheet remains in progress, but the results of the 2022 financial year underline that it is progressing. “We expect the strength in business activity to support organic deleveraging and provide a favorable backdrop for hybrid capital actions aimed at addressing negative equity challenges,” the analyst added.
* Edenred rose 1.6% to 53.1 euros after the publication of historic 2022 results. Last year, the group generated an EBITDA of 836 million euros (829 ME consensus), up 24.9% on a reported basis and 23.3% on a like-for-like basis, for revenue growth of 25 % to more than 2 billion euros (+21.2% like-for-like). The EBITDA margin thus came out at 41.2%, up 0.7 points like-for-like. The payment solutions specialist also recorded unprecedented free cash flow of 881 ME. Edenred says it is “ideally positioned” to continue to generate profitable growth in 2023 and beyond and confirms the objectives of its Beyond 22-25 plan for 2023, namely organic EBITDA growth above +12% and a Free-cash-flow / EBITDA conversion rate of more than 70%.
* Catana Group (+0.3% to 7.5 euros) opens a new page in its history with the creation of a motorboating center in Portugal thanks to the acquisition of a majority stake in the Portuguese company Composite Solutions. For an investment of 2 ME, Catana takes a 50.01% stake in the company Composite Solutions, valued at 4 ME. At the same time, the family group Financière Poncin, through its subsidiary AP Yacht Conception, will also take a 39.99% stake for 1.6 ME. The founders of the company also retain 10% of the capital.
FALLING VALUES
* Atos fell 4.7% to 13 euros. The hedge fund TCI sent a letter to Airbus demanding that it give up its plan to take over 29.9% of the capital of Evidian. The digital services company announced last week that it had entered a new phase of non-exclusive discussions with Airbus with a view to concluding a long-term technology agreement and selling the European aircraft manufacturer a minority stake of 29.9%. in its future branch of digital and cybersecurity activities Evidian. In a public letter addressed to the aerospace giant, and initially disclosed by the ‘Financial Times’, Christopher Hohn, the fund’s famous leader, declares that Evidian is a “very indebted company” and that investing in it “would dilute the quality of the activities of Airbus”. TCI, which owns more than 3% of the capital of Airbus, adds that “it would be tied up capital and an extremely inefficient use of shareholder funds”. According to the investor, “Airbus can continue to maintain a mutually productive and profitable relationship with Evidian without taking an equity stake. Not being a reference shareholder does not prevent increased collaboration between the two companies”.
* Worldline yields 3.6% to 39.7 euros after the publication of its annual results. Accounts perceived as solid by the financial community. The payment services specialist recorded last year an OMDA (gross operating surplus) of 1.13 billion euros, materializing a margin of 26%, up 110 basis points, for a turnover of 4.364 billion euros, up 10.7% organically. Free cash flow reached 520 ME. Management anticipates 8% to 10% organic revenue growth in 2023, more than 100 basis points improvement in OMDA margin compared to 2022 pro forma and 46% to 48% conversion rate of OMDA in free cash flow. Stifel (‘buy’) points to solid results in line with expectations but also notes a slight disappointment on the 2023 implied OMDA margin, which should improve as expected, but from a lower base.
* Capgemini lost 2.6% to 182.3 euros, penalized by prospects deemed cautious for 2023 despite growth in sales and free cash flow above market expectations in the fourth quarter. For the 2023 financial year, the Group is targeting revenue growth at constant exchange rates of between +4% and +7%, an operating margin of between 13.0% and 13.2% and a generation of free organic cash flow of around 1.8 billion euros. The group also indicated that its board of directors had decided to propose to the general meeting scheduled for May 16 next the payment of a dividend of 3.25 euros per share for 2022. The dividend paid the year past, for 2021, amounted to 2.40 euros per share.