CPH CHEMIE + PAPIER

CPHN
Delayed Quote. Delayed  - 01/19 11:30:34 am
59.4CHF -1.00%

CPH Chemie + Papier : Event update 5 Jul 2021 (pdf)

07/06/2021 | 02:34am

This report has been issued for information purposes only and is not intended to constitute investment advice. It is based on estimates and forecasts of third parties regarding revenues, earnings and business developments. Such estimates and forecasts cannot be independently verified by reason of the subjective character. CPH Chemie + Papier Holding AG gives no guarantee, representation or warranty and is not responsible or liable as to its accuracy and completeness.

This report is not a prospectus within the meaning of art. 652a CO or art. 27 et seq. of the SIX Listing Rules. This document is neither an advice on investment, nor a recommendation or invitation for purchasing, holding or selling any securities, money market instruments or derivatives and no investment decision should be based on this report. This report speaks as of its date. Neither CPH Chemie + Papier Holding AG nor Dynamics Group AG assume any responsibility to up-date the report.

CPH Chemie + Papier Holding AG

Switzerland | Industrial Goods & Services

Event update

5 July 2021

Company Data

Price:

CHF 68.4

Market Cap:

CHF 410.4mn

Free Float:

39.7%

No. of shares:

6.0mn

Avg. traded volume (30 day):

1,375

Bloomberg:

CPHN SW

Reuters:

CPHN-EB

ISIN:

CH0001624714

Source: SIX Swiss Exchange and Bloomberg

Share Price Development

Source: Bloomberg

Key Financial Data

2019

2020

2021E

2022E

Sales

524.7

445.2

446.1

473.2

EBITDA %

16.8%

12.4%

8.0%

13.6%

EBIT %

10.8%

5.5%

0.8%

6.8%

Net Margin %

9.2%

10.5%

0.2%

4.6%

Basic EPS

8.06

7.82

0.13

3.65

Diluted EPS

8.06

7.82

0.13

3.65

DPS

1.80

1.80

1.80

1.80

Equity Ratio %

62.6%

66.8%

66.3%

66.8%

Capex

(22.0)

(13.5)

(41.2)

(31.4)

P/Sales

0.8x

0.9x

0.9x

0.9x

P/E

8.7x

8.8x

NM

18.9x

EV/EBITDA

4.8x

7.5x

11.6x

6.5x

Source: Research Dynamics, Company data

Next Events

2021 Half-Year Report (to 30

21 July 2021

June)

Investora Equity Conference in

15 Sep 2021

Zurich

ZKB Equity Conference

3/4 Nov 2021

Analysts

Doris Rudischhauser dru@researchdynamics.ch

Alexandre Müller amu@researchdynamics.ch

Tel: +41 43 268 3232

www.researchdynamics.ch

CPH to undertake expansion at Chemistry division

CPH's Chemistry Division, Zeochem, is set to expand the capacity of two of its molecular sieve product lines to meet the growing demand. The expansion would entail an investment of just over CHF 10mn and will help further consolidate Zeochem's leading technological position in the high-quality molecular sieves market. The expansion of the existing capacities is expected to be completed by mid-2022e.

Expansion in lithium molecular sieves capacity to tap the demand for portable oxygen concentrators

The COVID-19 induced acceleration in respiratory diseases has led to a spike in demand for portable oxygen concentrators. To meet this growing demand, CPH is looking to increase the capacity of lithium molecular sieves at Zeochem's Louisville production plant in the USA. The lithium molecular sieves are used to concentrate medical oxygen and are also required in oxygen production for industrial applications. The total output of the plant will be increased by ~700 tonnes a year by investing into the expansion of additional capacities at the existing facility.

Purmol capacity expansion to tap new and existing growing applications

Purmol, a molecular sieve powder that finds its usage in numerous applications is next on the expansion list. Prumol is useful in preventing bubble formation in polyurethane floor coverings. In addition, Purmol is useful in the new and fast growing area of its application in window technology. Earlier, aluminium spacers were provided together with a molecular sieve in multiple-pane windows to prevent fogging on the panes, now plastic spacers are gaining prominence. Plastic spacer provides better thermal insulation, and the molecular sieve desiccant can be used in powder form into the plastic. The company is looking to increase the annual capacity of Purmol by ~800 tonnes by installing a new calciner at its Zvornik site in Bosnia & Herzegovina.

Investment program

CPH stated that the necessary investments for the two expansion projects are expected to amount to just over CHF 10 million until operations are up and running by mid-2022. Assuming an even split, this adds CHF 5 million for 2H2021E and CHF 5 million for 1H2022E. Our current forecasts are for CAPEX amounts of CHF 40 million and CHF 30 million for this year and next, respectively. Ahead of the half-year 2021E results due 21 July, we are leaving our forecasts unchanged.

Valuation and conclusion

We value CPH using DCF and relative valuation techniques. Our intrinsic value of CHF 91.3 per share, which is similar to our previous target price (CHF 91.3), implying an upside of ~33.5% from current levels. For relative valuation, since the Group operates in three entirely different divisions, we compare each of CPH's divisions with different sets of relevant industry peers. We have employed three parameters - EV/EBITDA, P/S and P/E - to analyze the relative valuation of the Group. CPH currently trades at a P/S multiple of 0.9x (FY2021E), a significant 36% discount to the weighted average multiple of division peers.

The global economy is expected to recover gradually from 2021e with the IMF forecasting 6% growth in 2021. While this bodes well for the business in general, in the short-term, we expect the uncertainty to continue. Specifically, the Paper Division is expected to be under pressure due to an unfavourable operating environment. However, the Packaging and Chemical Divisions are expected to be the key beneficiary of a revival in the economic activity and should offset the expected weakness in the Paper Division to some extent. Specifically, we believe the Pacakaging Division to emerge even strsonger in the ongoing economic revival as it has all positive levers in place to capture upcoming opportunities. Equally complimenting it will be the Chemistry division which is expected to benefit from the emerging trends that the company is looking to tap through timely capacity expansion. Operations aside, management's focus on offering sustainable solutions and simplification of the corporate structure should improve investor sentiment going forward. Moreover, we expect the group-level cost optimisation initiatives to offer support to the company's stock price.

Important disclosures are on the last page of this report. CPH Chemie + Papier Holding AG is a research client of Research Dynamics. The equity research reports are prepared for information purposes only.

CPH 2

Switzerland | Industrial Goods & Services

Exhibit 1: CPH - Comparison with division peers

Company

EV/EBITDA

P/S

P/E

3 year

3 year

3 year

average

CY2021E

CY2022E

average

CY2021E

CY2022E

average

CY2021E

CY2022E

CPH Chemie & Paper

5.7x

10.4x

7.0x

0.9x

0.9x

0.8x

10.2x

96.9x

21.4x

Paper peers:

Holmen

17.8x

16.7x

16.7x

2.8x

3.7x

3.7x

15.2x

28.2x

28.8x

Stora Enso

9.3x

9.0x

8.7x

1.0x

1.4x

1.4x

12.5x

15.0x

14.5x

Altri

8.1x

6.7x

7.6x

1.7x

1.6x

1.6x

14.4x

9.7x

12.8x

Metsa Board

10.6x

7.6x

7.8x

1.2x

1.6x

1.5x

14.4x

12.2x

12.9x

UPM-Kymmene

8.9x

10.5x

10.1x

1.5x

1.9x

1.9x

15.7x

18.1x

18.1x

Norkse Scogindustrier

NA

NA

NA

NA

NA

NA

NA

NA

NA

James Cropper

15.8x

0.6x

NM

1.1x

0.0x

0.0x

35.1x

44.6x

22.3x

OJI Holdings

7.9x

NM

NM

0.4x

0.4x

0.4x

13.1x

7.7x

8.8x

Chemistry peers:

Honeywell Int.

14.3x

19.1x

17.3x

3.3x

4.4x

4.1x

22.8x

27.6x

24.4x

Clariant

12.3x

NA

NA

1.4x

NA

NA

40.3x

NA

NA

Arkema

6.2x

7.8x

7.6x

0.8x

1.0x

1.0x

14.7x

15.5x

14.3x

WR Grace & Co.

15.3x

11.8x

10.5x

2.2x

2.4x

2.2x

69.1x

18.3x

15.2x

Packaging peers:

Meadvestwaco

NA

NA

NA

NA

NA

NA

NA

NA

NA

MacFarlane Group

9.2x

0.1x

0.1x

0.7x

0.0x

0.0x

16.5x

13.1x

12.4x

Gerresheimer

11.6x

12.3x

11.2x

1.7x

2.0x

1.9x

20.7x

21.2x

18.7x

West Pharmaceutical Services

31.6x

34.6x

31.2x

7.2x

10.1x

9.3x

52.1x

51.5x

47.8x

Convertidora Industrial

4.3x

2.9x

2.6x

0.2x

0.2x

0.1x

11.9x

NA

NA

PSB Industries

4.5x

12.1x

7.1x

0.4x

0.7x

0.6x

15.5x

-46.2x

29.9x

Astrapak Ltd

NA

NA

NA

NA

NA

NA

NA

NA

NA

Bilcare Ltd

47.6x

NA

NA

0.1x

NA

NA

2.3x

NA

NA

Median

10.6x

9.8x

8.7x

1.2x

1.6x

1.5x

15.5x

16.8x

16.6x

High

47.6x

34.6x

31.2x

7.2x

10.1x

9.3x

69.1x

51.5x

47.8x

Low

4.3x

0.1x

0.1x

0.1x

0.0x

0.0x

2.3x

-46.2x

8.8x

Premium (disc) to peers

(46%)

7%

(19%)

(28%)

(42%)

(45%)

(34%)

477%

29%

Source: Thomson Eikon (as on 2nd July 2021)

Exhibit 2: CPH - Comparison with weighted average of division peers

EV/EBITDA

P/S

P/E

3 year

3 year

3 year

average

CY2021E CY2022E

average CY2021E

CY2022E

average

CY2021E

CY2022E

Weighted peer multiples

10.2x

9.9x

8.5x

1.1x

1.4x

1.4x

17.4x

16.1x

17.4x

CPH

5.7x

10.4x

7.0x

0.9x

0.9x

0.8x

10.2x

96.9x

21.4x

Premium (disc) to peers

(44%)

5%

(17%)

(20%)

(36%)

(38%)

(41%)

501%

23%

Source: Thomson Eikon (as on 2nd July 2021)

145.6
1.1
0.1
52.5
30.0
4.8
351.2
(7.9)
68.9 59.2
69.1 77.8
8.9 18.0

CPH 3

Switzerland | Industrial Goods & Services

DETAILED FINANCIAL STATEMENTS

Income Statement

CHF mn (except per share)

FY16

FY17

FY18

FY19

FY20

FY21E

FY22E

Chemistry sales

69

75

79

78

73

74

78

Paper sales

246

264

301

293

210

209

213

Packaging sales

119

130

153

153

162

164

183

Net Sales

435

470

534

525

445

446

473

Cost of Sales

(267)

(309)

(311)

(298)

(255)

(273)

(279)

Gross profit

168

161

222

227

190

173

194

Personnel cost

(89)

(84)

(92)

(93)

(93)

(95)

(90)

Outsourced maintenance/repairs

(18)

(17)

(19)

(20)

(17)

(18)

(16)

Other operating expense

(25)

(26)

(28)

(26)

(25)

(25)

(24)

Total operating costs

(131)

(127)

(139)

(139)

(135)

(137)

(130)

EBITDA

37

34

83

88

55

36

64

Depreciation

(31)

(30)

(30)

(30)

(29)

(31)

(31)

Amortisation

(1)

(1)

(1)

(1)

(1)

(1)

(1)

Operating profit (EBIT)

before impairment

6

3

52

57

25

3

32

Impairment

0

0

0

0

0

0

0

Operating profit (EBIT)

6

3

52

57

25

3

32

Finance costs

(6)

(8)

(7)

(6)

(5)

(5)

(3)

Finance income

1

2

1

0

0

0

0

Total financial income

(expenses)

(5)

(7)

(6)

(6)

(5)

(5)

(3)

Profit before taxes (before

exceptional items)

1

(4)

46

51

20

(1)

29

Non-operating items

(4)

23

0

1

19

4

0

Income taxes

(4)

(3)

(3)

(3)

8

(2)

(7)

Profit attributable to the

parent

(8)

16

42

48

47

0.8

22

Basic EPS

(1.3)

2.7

7.1

8.1

7.8

0.1

3.6

Diluted EPS

(1.3)

2.7

7.1

8.1

7.8

0.1

3.6

DPS

0.7

0.7

1.8

1.8

1.8

1.8

1.8

Source: Research Dynamics, Company data

Balance Sheet

CHF mn

FY16

Assets

Non-current assets

PPE

384.6

Intangible assets

3.1

Long-term financial assets

10.0

Long-term financial receivables

0.0

Other non-current assets

52.6

Total non-current assets

450.3

Current assets

Inventories

Trade accounts receivable

Other receivables

Prepaid expenses and accrued

income

4.8

Short-term financial receivables

0.1

Liquid funds and Securities

70.4

Total assets

672.4

Shareholders' Equity and Liabilities Share capital Capital reserves

Profit reserves

Net result for the year

Non-current liabilities

Long-term financial liabilities

Pension scheme liabilities

Other long-term liabilities

Long-term provisions

Current liabilities

FY17

FY18

FY19

FY20

FY21E

FY22E

384.1

376.1

366.4

352.6

357.2

356.7

4.8

5.8

5.6

5.6

5.4

5.3

10.0

10.0

10.0

10.0

10.0

10.0

0.0

0.0

0.0

0.0

0.0

0.0

56.4

55.3

54.0

64.8

64.8

64.8

455.3

447.2

436.0

432.9

437.4

436.7

69.6

78.5

78.3

73.3

78.6

72.1

72.4

52.9

63.6

67.4

13.1

14.0

17.2

17.2

17.2

7.0

9.2

8.6

6.7

6.7

6.7

0.0

100.3

0.0

0.0

0.0

0.0

80.2

89.0

93.1

116.3

97.0

100.1

697.6

800.5

702.7

704.2

695.1

706.7

30.0

12.0

12.0

1.2

1.2

1.2

0.8

15.0

4.2

4.2

4.2

4.2

346.4

336.2

375.2

418.5

454.6

444.5

16.0

42.3

48.3

46.9

0.8

21.9

143.5

120.5

116.8

109.7

106.0

102.3

0.6

1.3

0.7

1.2

1.2

1.2

0.0

0.8

0.6

0.4

0.4

0.4

51.8

50.0

47.5

31.5

31.5

31.5

Trade accounts payable

53.1

69.5

69.7

66.3

56.8

61.6

66.0

Other payables

8.3

3.3

4.1

3.6

4.6

4.6

4.6

Accrued liabilities and deferred

income

16.5

17.2

20.0

16.3

16.8

16.8

16.8

Short-term financial liabilities

7.0

9.8

125.8

5.9

8.1

7.8

7.5

Short-term provisions

7.6

5.6

1.2

3.8

3.3

3.3

3.3

Total liabilities

291.6

301.3

393.3

261.4

232.4

233.2

233.6

Total equity and liab.

672.4

697.6

800.5

702.7

704.2

695.1

706.7

Source: Research Dynamics, Company data

CPH

4

Switzerland | Industrial Goods & Services

Cash Flow Statement

CHF mn

FY16

FY17

FY18

FY19

FY20

FY21E

FY22E

Net profit for the period

(7.7)

16.2

42.3

48.5

47.0

0.8

22.0

Non-cash adjustments:

33.9

(1.5)

26.3

31.2

(2.2)

32.3

32.1

Change in CA and CL:

(Increase)/ decrease in

(13.1)

13.6

(8.6)

(10.2)

(4.1)

5.0

(5.3)

inventories

Decrease in trade accounts

(0.5)

(7.7)

5.0

(1.3)

20.5

(10.7)

(3.9)

receivable

Increase/ (decrease) in

1.6

15.8

(1.1)

(2.8)

(9.0)

4.9

4.4

trade accounts payable

Other changes in working

7.7

(4.2)

0.4

(4.3)

2.8

-

-

capital

CFO

21.9

32.2

64.3

61.0

55.0

32.3

49.4

Investments in tangible

(20.7)

(32.3)

(22.3)

(21.9)

(17.5)

(40.0)

(30.4)

fixed assets

Disposals of tangible fixed

20.5

15.4

6.3

0.8

5.2

-

-

assets

Investments in intangible

(1.2)

(2.4)

(2.2)

(1.0)

(1.3)

(1.1)

(1.1)

assets

Investments in business

(18.5)

-

(27.9)

-

(1.6)

-

-

activities

Repayment of long-term

-

-

-

100.9

(0.3)

-

-

financial receivables

CFI

(19.9)

(19.3)

(46.0)

78.9

(15.3)

(41.2)

(31.4)

Increase/ (Decrease) in

0.1

1.0

(4.3)

(123.4)

(4.4)

(0.3)

(0.3)

short-term financial

liabilities and receivables

Increase/ (Decrease) in

19.0

(0.6)

(3.0)

(1.1)

-

(3.7)

(3.7)

long-term financial

liabilities

Increase in other long-

(0.4)

0.2

2.1

(0.2)

(0.4)

4.4

-

term liabilities

Dividends to shareholders

(3.6)

(3.9)

(3.9)

(10.9)

(10.8)

(10.8)

(10.8)

CFF

15.2

(3.3)

(9.1)

(135.6)

(15.6)

(10.4)

(14.8)

Exchange (losses)/gains

0.1

0.2

(0.3)

(0.2)

(0.9)

-

-

Net change in cash

17.2

9.8

8.9

4.1

23.2

(19.3)

3.2

Opening cash balance

53.1

70.3

80.1

89.0

93.1

116.3

96.9

Closing cash balance

70.3

80.1

89.0

93.1

116.3

96.9

100.1

Source: Research Dynamics, Company data

Key Ratios

FY16

FY17

FY18

FY19

FY20

FY21E

FY22E

Growth Ratios

Sales Growth

4%

8%

14%

(2%)

(15%)

0%

6%

Chemistry division

11%

9%

5%

(2%)

(6%)

1%

6%

Paper division

(1%)

7%

14%

(3%)

(29%)

(1%)

2%

Packaging division

9%

9%

17%

0%

6%

1%

12%

Operating Profit Growth

NM

(51%)

NM

10%

(56%)

(86%)

NM

Net Income Growth

NM

NM

165%

14%

(3%)

(98%)

NM

Profitability Ratios (%)

Operating margin (before

1%

1%

10%

11%

6%

1%

7%

impairment) (% )

Chemistry division

2%

5%

8%

6%

6%

7%

7%

Paper division

(2%)

(5%)

10%

12%

(1%)

(9%)

1%

Packaging division

8%

7%

10%

11%

13%

13%

13%

EBITDA Margin %

8%

7%

16%

17%

12%

8%

14%

Net Margin (%)

(2%)

3%

8%

9%

11%

0%

5%

Return Ratios

Profit Margin

(2%)

3%

8%

9%

11%

0%

5%

Asset Turnover

0.7x

0.7x

0.7x

0.7x

0.6x

0.6x

0.7x

Financial Leverage

1.7x

1.8x

1.9x

1.8x

1.5x

1.5x

1.5x

Dupont ROE (%)

(2%)

4%

11%

11%

10%

0%

5%

ROCE (%)

1%

1%

10%

10%

4%

1%

6%

ROA (%)

(1%)

2%

6%

6%

7%

0%

3%

Leverage Ratios

Debt - Equity Ratio

0.4x

0.4x

0.6x

0.3x

0.2x

0.2x

0.2x

Net Debt - Equity Ratio

0.2x

0.2x

0.4x

0.1x

0.0x

0.0x

0.0x

Interest Coverage

1.4x

0.7x

11.8x

9.1x

9.1x

0.7x

9.5x

Liquidity Ratios

Current Ratio

2.4x

2.3x

1.6x

2.8x

3.0x

2.7x

2.7x

Quick Ratio

1.7x

1.7x

1.3x

2.0x

2.2x

2.0x

1.9x

Valuation Ratios

EV/EBITDA

11.4x

12.5x

5.1x

4.7x

7.5x

11.6x

6.5x

P/E

NM

26.3x

9.9x

8.5x

8.8x

NM

18.9x

Source: Research Dynamics, Bloomberg, Company data

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

CPH Chemie + Papier Holding AG published this content on 06 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 06 July 2021 06:33:00 UTC.

© Publicnow 2022
Copier lien
All news about CPH CHEMIE + PAPIER HOLDING AG
5d ago
5d ago
7d ago
7d ago
7d ago