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The value of the day in Paris – Oeneo supported by record current operating income

(AOF) – Oeneo gains 2.4% to 14.95 euros after the publication of solid 2021/2022 results. The manufacturer of cork stoppers and barrels for aging wine and whiskey benefited from the rebound in activity after the confinement periods. The quality of these products enables the group indirectly controlled by Rémy Cointreau to enjoy robust pricing power. Oeneo thus recorded a net income group share up 17.9% to 37.1 million euros.

The French flagship also achieved record operating income of 54 million euros, up 17.4%. The current operating margin thus stood at 16.6% of turnover, “in line with the group’s objectives”.

Already published, turnover reached 326 million euros, an increase of 19.5%.

Backed by a very healthy financial situation and the generation of structural cash flow, the group will pay a dividend of 0.30 euro per share and an exceptional dividend of 0.30 euro per share.

For the 2022-2023 financial year, Oeneo is confident about the continuation of its development, with however a more moderate rate of growth given a demanding basis of comparison and a complex economic and geopolitical context.

The group also continues to pay increased attention to its costs in order to preserve its current operating profitability.

In a longer-term perspective, to cope with the growth of the closures business, Oeneo is preparing to launch the construction of a new production capacity for Diam closures for an investment of around 25 million euros, which should be spread over a period of three years.

Midcap confirmed its Hold recommendation and its price target of 15.5 euros on Oeneo after the publication by the group of annual results broadly in line with its expectations.

The broker stresses that, due to the continued very strong growth in volumes in the second half of the year and its strong pricing power, Oeneo has managed to absorb the rise in raw material prices and the drift in production costs (doubling of price of electricity in Spain, tripling in Portugal).

The inflationary “raw materials” context, however, encourages the design office to remain cautious on its margin estimates, as the increase in sales prices becomes more complicated to negotiate with customers.

Midcap nevertheless points out that the group is pursuing a very strong strategy of value creation, by constantly pushing its product mix towards the top of the range and by raising its selling prices to better absorb the increase in production costs.

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