Papoutsanis (ASE Small Cap Digital Roadshow Presentation Highlights)

Papoutsanis (ASE Small Cap Digital Roadshow Presentation Highlights):

  • On yesterday’s presentation to ASE for Small Cap companies Papoutsanis guided for a similar to 2020 shareholders’ remuneration in 2021 in the tune of €1.25mn (ie €0.05/share) in a combination of dividend and capital return.

Regarding business operations, the company guided for a FY’20 turnover of €41.4mn (we stand at €41.2mn) assisted by all products categories with the exception of hotel products. Other P&L figures growth rates will be similar to the ones recorded in the 9M results.

  • We estimate FY’20 Gross profit €13.43mn (+52.4%), EBITDA at €8.63mn (+132%), EBIT €6.8mn (+177.3%), EBT at €6.42mn (+246.1%) and Net Income €4.88mn (++262.2%).

For 2021 the company will undertake the distribution network of its branded labels across Greece while in the PL segment new contract with HENKEL (Q3’20) will come in full exploitation. In the hotel segment for 2021 and providing recovery from Covid implications the management guided for hotel segment sales ++50% vs 2020 (we stand at €3.5mn for 2020 and €5mn for 2021).

  • Capex for 2020 and 2021 will come in at €10mn regarding doubling capacity in solid soap and soap noodles and expansion in synthetic soap product category (including solid shampoo).

We have an outperform rating for the company (which will enter FTSE Mid Cap index as of December 18) with a TP of €4.05/share.

  • The company trades at a projected FY’20 P/E 12.3, EV/EBITDA 7.7x, Net Debt/EBITDA 0.7x and DY 4.2%. Stay OVERWEIGHT.

The stock has outscored GI by 62.9% so far in 2020 and FTSE Mid CAP 53.6%.