Naturex : enjoy the air hole – The Income

The group is from avignon, has published good annual results, but leaders predict a slowdown in the first half. The profitability should continue to improve. Invest in a medium-term perspective.

The transformation plan is bearing fruit. Deployed for 18 months by the new director general, Olivier Rigaud, it has allowed the specialist of natural ingredients to deliver an excellent performance in 2016.

Its gross operating surplus has risen by 13.3%, to 61.4 million euros, and net profit has been multiplied by 30, to $ 17.9 million euros. Despite this performance, the title fell 2.7% as a result of these ads.

Investors were hoping for even better prospects and were a little disappointed. The leaders in particular warned that the growth would be zero in the first half of 2017.

20% margin in 2020

This slowdown is not really disturbing. It is a new dereference products are not very profitable and should help to enhance the profile of Naturex. Last year, the gross operating margin rose by 1.6 percentage points, to 15.2%. It should continue to grow this year and could reach 20% in 2020.

Has 33 times the net profit estimated for 2017, the action displays a level of valuation demanding, but justified. Naturex operates on the very attractive market of «natural» (food, cosmetic, nutraceutical), and, after a difficult period of transition in 2014-2015, the company has been put on the rails by the new management.

The last adjustments will weigh on activity in the first half but this item seems to already be integrated by the Stock price, which has lost 9% since its highest. Enjoy this air hole for you to place in a medium-term perspective.


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