Recticel (AO) | Buy | New recycling plant strengthens delivers attractive cost savings

Research evidence excerpt

Recticel (AO) | Buy | New recycling plant strengthens delivers attractive cost savings

Recticel Buy | Target Price: EUR14.70

Company description Management

Recticel is a European insulation player. The company recently divested its Jan Vergote, CEO

Engineered Foam and Bedding segment, making it a pure-play focused on Bart Van den Eede, CFO

insulation boards and insulated panels. Wim Dejonghe, Chairman BoD

Key shareholders

Free float 71.34%

Baltisse 28.08%

Recticel (own shares) 0.58%

Janus Henderson Group 5.00%

Investment case Valuation methodology

Not only do we expect the European push for more renovation We combine the multiple approach with a DCF-based valuation

to provide volume support, but current insulation prices make (WACC 8.8%, TG 2%).

polyiso insulation increasingly attractive vs. alternatives, and For our multiple-based valuation, we value a 10x EBITDA 1y

insulation should remain an important consideration. forward multiple.

Short term, it appears markets remain at trough levels but Risks to our rating

several markets are turning the corner, albeit from a lower base. Downside risk: Lower EBITDA margins due to market saturation

Synergies from recent acquisitions are likely to provide in insulation, especially in a downcycle. Insulation is vulnerable

additional tailwinds. to substitution or pricing pressure. Stronger-than-expected

Hence, we believe the risk-reward profile remains positive. recession. A EUR50m debt exposure to the divestment of

Catalysts Ascorium.

M&A or a bid for Recticel from an interested party.

Any material changes on the macro front (i.e. lower interest

rates or green deal subsidies).

Key data charts

Price performance Sales split by region Sales split by division

SWOT analysis

Strengths Weaknesses

Strong focus on Insulation.