Norbert Dentressangle: Positioning Itself As Global Player
Edison | Apr 07, 2015 06:07AM ET
The Norbert way
Norbert Dentressangle (PARIS:GNDP) has positioned itself as a global player in transportation and logistics from a strong European base. 2014 was a pivotal year in this strategy, with the acquisition of Jacobson positioning the group as the fourth largest independent player in the US. With consolidation activity gathering pace, we see this not as the end, but merely the beginning of the journey in the $150bn US 3PL market. With a growth strategy driven by increasing geographic reach, scale and service scope, we believe that Norbert should increasingly be viewed as a top tier international supply chain player. The current rating sits at a 31% discount to international peers and we view Norbert’s positioning as more akin to DHL, Kuehne+Nagel and DSV than local peers or single service providers.
2014 a pivotal year for the group
Norbert Dentressangle has built its business through the application of a consistent strategy of expansion, acquisition and service delivery. This has seen revenues grow by a CAGR of 14% since listing in 1994, while achieving sector-leading operating margins built around strict cost control inherited from its transport roots. 2014 was no exception and a pivotal year following the $750m acquisition of Jacobson, which provides not just a foothold but also a strong number four position in the US contract logistics market on which to build now that integration is complete.
Full year results also highlight organic potential
The 2014 full year results demonstrated that Norbert has continued to deliver both on an organic and integration basis. Revenues were up 15.8% to €4.7bn, of which 4.1% organic growth was achieved against the backdrop of a sluggish European environment. EBITA increased by 18.6% to €167.9m at a margin of 3.6% (2013: 3.5%) benefiting from four months of the higher-margin contribution from Jacobson, but still maintained on an organic basis. With higher interest charges as a result of the acquisition, partially offset by an improved tax charge, net income increased by 8.3% to €75.9m. Net debt increased to €1.0bn with net debt:EBIDTA of 3.0x.
Valuation: Does not recognise international scale
The current rating of Norbert Dentressangle sits at a 31% discount to larger international peers. Following integration of Jacobson and with a top-to-tail supply chain offering in Europe, the US and increasingly worldwide, we believe Norbert Dentressangle looks more like global peers DHL, Kuehne+Nagel and DSV. Using a 20% discount to these comparators yields a fair value of €190/share.
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