DLSI Equity Research Espresso
Target price change
DLSI | Buy(Buy) | |
France | Support services | MCAP EUR 34.5m | Target Price | EUR 17.60 |
21 April 2016 | Current Price Up/downside Change in TP Change in EPS | EUR 13.6 29.5% 14.29% -7.5% 2015E |
Outstanding 2015 performance in earnings combined with positive outlook for 2016 leads us to raise our TP from EUR15.4 to EUR17.6.
FY 2015 reported earnings well above expectationsFor 2015, DLSI reported a spectacular increase in operating profit to EUR9.2m (+42% YOY) and net profit of EUR6.2m (+57% YOY). Reported earnings were a nice surprise, as they were well above our estimates (Table 1). Earlier in the year, in March, the company announced it had posted 5% growth in revenues (EUR189.5m) in line with the French staffing market (+4.4%).
CICE and cost discipline as main driversThe remarkable financial performance is driven by cost discipline. The group obviously is reaping the fruit of the restructuring implemented in 2014-15 at several agencies in the south of France. The positive contribution from the CICE (employment tax credit in France to enhance competitiveness of SMEs) was stable around EUR4m. The convergence of DLSI's profitability metrics towards competitors Groupe Crit and Synergie is notable. With operating and net profit margin reaching 4.9% (+130bps) and 3.2% (+107bps) respectively, DLSI is catching up quite remarkably (Table 2).
Doubling DPS, sharp deleveragingOther key findings of the publication relate to: 1) the improvement in the dividend policy, as DPS was doubled from EUR0.23 to EUR0.46 against 2015 net profit, which corresponds to a 20% payout and 4.2% yield; and 2) the sharp reduction in indebtedness (-53% YOY) to EUR8.1m at 2% of equity vs. 35% previously.
Positive outlook for 2016DLSI does not disclose specific guidance for 2016 but aims for an "excellent year" in light of: 1) good momentum observed in Jan/Feb in both French and foreign markets (Prism'Emploi indicates 5% growth in the French temp market with above-average performance in eastern regions where DLSI is present); 2) continuing to develop in nuclear where dedicated agencies that recently opened in Chinon and Lyon will start
Baptiste de Leudeville
Equity Research Analyst bdeleudeville@keplercheuvreux.com
+41 22 994 1573
Market data | |
Bloomberg: ALDLS FP | Reuters: ALDSL.PA |
Market cap (EURm) | 35 |
Free float | 34% |
No. of shares outstanding (m) | 3 |
Avg. daily volume('000) | 8 |
YTD abs performance | 24.7% |
52-week high/low (EUR) | 13.59/9.60 |
FY to 31/12 (EUR) | 12/16E | 12/17E | 12/18E |
Sales (m) | 200.0 | 206.0 | 212.1 |
EBITDA adj (m) | 10.5 | 11.0 | 11.4 |
EBIT adj (m) | 9.9 | 10.4 | 10.7 |
Net profit adj (m) | 6.3 | 6.7 | 6.9 |
Net fin. debt (m) | 8.5 | 2.6 | -3.6 |
FCF (m) | 6.5 | 7.1 | 7.3 |
EPS adj. and fully dil. | 2.50 | 2.63 | 2.72 |
Consensus EPS | 2.06 | 2.10 | na |
Net dividend FY to 31/12 (EUR) | 0.46 12/16E | 0.46 12/17E | 0.46 12/18E |
P/E adj and ful. dil. | 5.4 | 5.2 | 5.0 |
EV/EBITDA | 4.3 | 3.6 | 2.9 |
EV/EBIT | 4.6 | 3.8 | 3.1 |
FCF yield | 18.8% | 20.5% | 21.1% |
Dividend yield | 3.4% | 3.4% | 3.4% |
Net fin.debt/EBITDA | 0.8 | 0.2 | -0.3 |
Gearing | 23.5% | 6.1% | -7.4% |
ROIC | 31.7% | 33.0% | 33.7% |
EV/IC | 1.1 | 0.9 | 0.8 |
14.0 | |||
13.5 | |||
13.0 | |||
12.5 | |||
12.0 | |||
11.5 | |||
11.0 | |||
10.5 | |||
10.0 | |||
9.5 | |||
9.0 |
Apr 15 Jul 15 Oct 15 Jan 16 Apr
operating in the black; and, 3) further cost efficiencies at newly acquired
subsidiary C2A conseil for an estimated EUR0.3m.
New TP: EUR17.60.We adjust our FCF estimates to the upside and subsequently raise our target price from EUR15.40 to EUR17.60 in light of better-than-expected earnings and a favourable 2016 outlook. DLSI is trading at a c. 35% discount to Groupe Crit and Synergie, which we believe is excessive.
KEPLER CHEUVREUX and the
issuer have agreed that KEPLER CHEUVREUX will produce and disseminate investment research on the said issuer as a service to the issuer.
Price
DJ Stoxx 600 (rebased)
IMPORTANT. Please refer to keplercheuvreux.comdisclaimer for "Important disclosures" and analyst certification(s).
keplercheuvreux.comThis research is the product of Kepler Cheuvreux, which is authorised and regulated by the Autorité des Marché Financiers in France.
Table 1:Reported FY 2015 earnings vs. KECH estimates | ||||
FY15 est. | FY15 reported | FY14 reported | ||
Operating profit | 8.2 | 9.2 | 6.5 | |
%Growth | 26% | 42% | ||
Operating margin % | 4.3% | 4.9% | 3.6% | |
Net profit -group share | 5.0 | 6.2 | 3.9 | |
%Growth | 28% | 57% | ||
Net margin | 2.7% | 3.2% | 2.3% | |
Source: Kepler Cheuvreux | ||||
Table 2: DLSI vs. Peers operating performance | ||||
Synergie (2015) | Groupe Crit (2014) | DLSI (2015) | ||
Operating margin | 5.5% | 5.0% | 4.9% | |
Net margin | 3.3% | 3.6% | 3.3% | |
Source: Kepler Cheuvreux | ||||
keplercheuvreux.com
Key financialsFY to 31/12 (EUR)
2011
2012
2013
2014
2015E
2016E
2017E
2018E
Per share data
EPS adjusted
0.57
0.15
1.54
1.55
1.83
2.50
2.63
2.72
EPS adj and fully diluted
0.57
0.15
1.54
1.55
1.83
2.50
2.63
2.72
% Change
4.5%
-73.3%
901.2%
0.8%
18.4%
36.2%
5.4%
3.2%
EPS reported
0.57
0.15
1.54
1.55
1.83
2.50
2.63
2.72
Cash flow per share
2.81
1.85
1.69
1.12
2.55
2.71
2.95
3.04
Book value per share
6.91
6.82
8.15
9.47
11.59
13.78
16.11
18.52
Dividend per share
0.30
0.23
0.23
0.23
0.46
0.46
0.46
0.46
Number of shares, YE (m)
2.54
2.54
2.54
2.54
2.54
2.54
2.54
2.54
Valuation
P/E adjusted
12.6
23.7
3.1
7.0
7.4
5.4
5.2
5.0
P/E adjusted and fully diluted
12.6
23.7
3.1
7.0
7.4
5.4
5.2
5.0
P/BV
1.0
0.5
0.6
1.1
1.2
1.0
0.8
0.7
P/CF
2.6
2.0
2.8
9.7
5.3
5.0
4.6
4.5
Dividend yield (%)
4.2%
6.3%
4.8%
2.1%
3.4%
3.4%
3.4%
3.4%
FCF yield (%)
36.7%
49.2%
32.7%
9.3%
17.7%
18.8%
20.5%
21.1%
EV/Sales
0.2
0.2
0.2
0.2
0.3
0.2
0.2
0.2
EV/EBITDA
5.8
7.5
4.0
6.0
5.8
4.3
3.6
2.9
EV/EBIT
6.6
8.7
4.5
6.7
5.4
4.6
3.8
3.1
Income Statement (EURm)
Sales
205.2
183.9
183.8
180.9
189.9
200.0
206.0
212.1
% Change
18.8%
-10.4%
0.0%
-1.6%
5.0%
5.3%
3.0%
3.0%
EBITDA adjusted
6.6
3.8
7.4
7.3
8.7
10.5
11.0
11.4
EBITDA margin (%)
3.2%
2.1%
4.0%
4.0%
4.6%
5.3%
5.4%
5.4%
EBIT adjusted
5.9
3.3
6.6
6.5
9.2
9.9
10.4
10.7
EBIT margin (%)
2.9%
1.8%
3.6%
3.6%
4.9%
5.0%
5.1%
5.1%
Net financial items & associates
-1.0
-0.9
-0.5
-0.5
-0.4
-0.4
-0.4
-0.4
Others
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Tax
-3.2
-1.9
-1.9
-1.9
-2.9
-3.0
-3.2
-3.3
Net profit from continuing operations
1.6
0.6
4.2
4.1
4.9
6.5
6.9
7.1
Net profit from discontinuing activities
0.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Net profit before minorities
1.6
0.6
4.2
4.1
4.9
6.5
6.9
7.1
Net profit reported
1.5
0.4
3.9
3.9
4.7
6.3
6.7
6.9
Net profit adjusted
1.5
0.4
3.9
3.9
4.7
6.3
6.7
6.9
Cash Flow Statement (EURm)
Cash flow from operating activities
7.1
4.7
4.3
2.8
6.5
6.9
7.5
7.7
Capex
-0.4
-0.2
-0.3
-0.3
-0.4
-0.4
-0.4
-0.4
Free cash flow
6.7
4.5
4.0
2.6
6.1
6.5
7.1
7.3
Acquisitions & Divestments
-3.3
-2.1
-0.7
0.0
-5.0
0.0
0.0
0.0
Dividend paid
-0.8
-0.8
-0.6
-0.8
-0.8
-0.8
-0.8
-0.8
Others
0.0
0.0
0.0
1.7
0.0
0.0
0.0
0.0
Change in net financial debt
2.7
1.7
2.7
3.5
0.3
5.7
6.3
6.5
Balance Sheet (EURm)
Intangible assets
24.5
26.8
26.3
26.0
29.4
29.3
29.2
29.1
Tangible assets
1.1
1.0
1.0
0.7
2.1
2.0
1.9
1.8
Financial & other non-current assets
1.3
1.3
1.3
1.9
1.9
1.9
1.9
1.9
Total shareholders' equity
18.1
18.0
21.5
24.9
30.5
36.2
42.4
48.7
Pension provisions
0.2
0.2
0.3
0.9
0.9
0.9
0.9
0.9
Liabilities and provisions
63.7
61.5
59.2
61.9
54.8
56.7
57.9
59.0
Net debt
19.7
18.9
16.6
15.5
14.7
9.4
3.4
-2.7
Working capital requirement
11.1
7.9
9.7
12.1
11.4
12.0
12.4
12.7
Invested Capital
34.2
33.6
35.5
37.5
41.8
42.3
42.6
42.8
Ratios
ROE (%)
8.5%
2.2%
20.5%
17.6%
17.4%
19.7%
17.6%
15.7%
ROIC (%)
23.4%
13.0%
25.7%
24.0%
31.3%
31.7%
33.0%
33.7%
Net fin. debt / EBITDA (x)
3.0
4.9
2.2
2.0
1.6
0.8
0.2
-0.3
Gearing (%)
107.7%
103.7%
76.0%
58.9%
45.6%
23.5%
6.1%
-7.4%
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DLSI SA issued this content on 21 April 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 25 April 2016 16:09:32 UTC
Original Document: http://www.groupedlsi.com/GetDocument?id=799081
