(Boursier.com) — THE TREND
The Paris Stock Exchange started the session with a very timid rebound but this was confirmed at the end of the morning, the CAC40 recovering 1.5% to 6,620 points after its fall of almost 4% yesterday, following the invasion of the Ukraine by Russia. Wall Street recovered yesterday (in particular the Nasdaq) but the atmosphere remains heavy in the trading rooms as the Russian army continues its offensive. Although operators make a few bargain purchases, risk-taking remains limited in a very anxiety-provoking environment.
Many groups exposed to Russia are also on the sidelines of the rebound on Friday. The major Western powers have multiplied the sanctions aimed at Moscow in recent hours, but the operators consider the latter still quite measured, in particular because they do not include the exclusion of Russia from the SWIFT interbank network.
Another point of concern for investors is the new surge in inflation, which should hardly abate over the next few weeks given the surge in energy prices since the Russian offensive (a barrel of Brent is trading at above $101 this morning after crossing $105 on Thursday). Consumer prices would thus have increased by 3.6% in February in France, after +2.9% the previous month. Over one month, consumer prices would increase by 0.7%, after +0.3% in January, showed the initial data from INSEE. Harmonized with European standards, annual inflation should come out at 4.1%, after +3.3% in January.
Across the Atlantic, the macro program is still busy since durable goods orders (2:30 p.m.), household income and expenditure (2:30 p.m.), the final index of consumer sentiment measured by the University of Michigan (4:00 p.m.) and promises of housing sales (4:00 p.m.) will be unveiled.
On the business front, the latest results are received to varying degrees with strong penalties for Casino and Valeo and good surprises on the side of Vallourec and Saint Gobain.
RISING VALUES
* Vallourec jumped 15% to 7.76 euros at the start of the session, operators welcoming the better than expected results of the specialist in seamless tubes in the fourth quarter. Vallourec had not experienced such an increase for over a year. Over the last three months of the financial year, the group saw its Ebitda soar by 79% to 136 million euros for revenues of 1.06 billion euros (+28%). The net result came out positive at 89 ME against a loss of 570 ME a year ago. Management is aiming for a further improvement in its EBITDA for the 2022 financial year compared to 2021. The first quarter will however be impacted by the incident at the iron mine and certain inflationary pressures, but Vallourec expects a rebound in the second quarter.
* Saint Gobain climbed 3.8% to 56.6 euros after having signed a record year in 2021, driven by the dynamism of the construction sector in the United States and Asia and its exposure to the European renovation market. Over the past financial year, the group notably saw its operating profit jump 57.9% to 4.51 billion euros, enabling it to generate a double-digit margin for the first time (10.2%). The firm, which posted an 18.4% year-on-year rise in like-for-like revenue for 2021, raised prices to try to offset the impact of inflation. “The price effect reached +6.7% over the year as a whole, and strengthened continuously during the year to reach +9.5% in the second half alone and +10, 3% in the fourth quarter”. Management is targeting another year of operating profit growth at comparable exchange rates in 2022.
* Beneteau gained 6% to 14.2 euros. The group has published its annual turnover and indicated that its current operating profit for 2021 will be higher than the last forecast communicated on November 9, 2021 which, as a reminder, was between 59 and 65 ME.
FALLING VALUES
* Valeo corrected by 10% to 21.2 euros this Friday, after its financial publication, accompanied by a 2022 guidance deemed a little short. For 2021, the group announced a turnover increase of 5% to 17.26 MdsE, an Ebitda margin of 13.4% and a net profit CEO of 175 ME. In 2022, Valeo will focus on the integration of Valeo Siemens eAutomotive, the implementation of its efficiency program and the management of inflation. Valeo has set itself the objectives for 2022 of a turnover of 19.2 to 20 billion euros, an EBITDA of 11.8% to 12.3% of turnover, as well as an operating margin ranging from 3.2 to 3.7%. Free cash flow is expected to be around 320 ME. These 2022 targets do not take into account the potentially unfavorable consequences on the economic environment of recent developments in the Russian-Ukrainian crisis, for example a drop in production volumes or a rise in energy or raw material prices above beyond known prices at the start of 2022.
* Casino plunged 15% to 15.4 euros. The presentation of the distributor’s annual accounts is struggling to convince investors when its debt has increased further in 2021 and the company is still struggling in its domestic market. For Jefferies (‘underperforming’), this publication shows that the group has made “no progress” on deleveraging in 2021. The challenge of dealing with high input pressures and the risk of seeing the relevance of the market to crumble further as the French retail market consolidates are “on the agenda”, writes the analyst. Bryan Garnier (‘sell’) worries about the respect of the banking covenant at the end of the quarter after the increase in net debt in France.
* Societe Generale remains down 1.5% and Renault by 0.3%. Directly exposed to Russia via its subsidiary AvtoVaz, Renault posted a drop of 20% over the week. Societe Generale lost more than 16% over the week with fears surrounding its Russian subsidiary Rosbank.
* In the red for the eighth consecutive session, Technip Energies lost 9% to 10.4 euros this Friday. Less media than Renault or Société Générale, the firm also pays for its exposure to Russia. Russia and its satellite countries represent 27% of Technip Energies’ order book. “The market is particularly concerned about potential risks for the financing [du projet Arctic LNG 2]”, explains to ‘L’Agefi-Dow Jones’ an analyst based in Paris. “In the worst case scenario, Western companies could find themselves prohibited from carrying out activities in Russia”.