(BFM Bourse) – The high-end furniture specialist has published a sharp decline in half-yearly accounts and lowered its outlook for the rest of 2024. Roche Bobois is logically under pressure on the Paris Stock Exchange.
Roche Bobois, which prides itself on being a global reference in high-end furniture and the “French art de vivre” through its eponymous brand, is facing a complicated first half of 2024. Its clientele with high purchasing power, capable of spending thousands of euros, no longer immunizes the French group against an economic context less favorable to consumer actions.
Roche Bobois’ latest publication illustrates these difficulties, with management citing “a less favourable market context for furniture”.
Results below expectations
In the first half of 2024, Roche Bobois’ sales amounted to €204.4 million, representing a 7.8% drop in sales (-8% at constant exchange rates) compared to the €221.7 million generated as of June 30, 2023. The company specifies that this turnover could have been higher than announced, without the one-off delay in deliveries of items totaling €5 million in the second half. This postponement was linked to a logistics delay at a supplier in Italy, which according to Roche Bobois, is in the “process of being resolved”.
This decline in invoicing is far from neutral on the group’s profitability level in the first half of the year. Current gross operating income (EBITDA) is “as expected by management” down sharply, at 36.6 million euros (-26.6% compared to the first half of 2023). However, this level of EBITDA is lower than the expectations of TP ICAP Midcap, which was counting on 40.7 million euros for this profitability indicator.
The corresponding margin logically crumbles, landing at 17.9%, down 4.6 percentage points compared to the first half of 2023.
“As expected, the gross margin proved rather resilient with a decline of only 10 basis points (0.1 percentage point) to 60.4%. Capital expenditure increased by 1.3% while we expected a slight decline,” said Florent Thy-tine, head of equity research at TP ICAP Midcap.
Net profit more than halved to 8.1 million euros in the first half compared to 19.6 million euros last year, due to the sharp drop in operating profit (-55% over one year).
For the analyst, the only “good news” in the publication comes from cash generation, with an increase in free cash flow (FCF), to 13.7 million euros against 6.8 million euros a year earlier, thanks essentially to a favorable variation in working capital requirements and a decrease in investments.
Dull outlook
However, management is looking to the future in 2024, and is aiming for a return to slight growth in its turnover in the second half of the year. Roche Bobois admits that this hoped-for recovery in activity in the second half of 2024 will not fully compensate for the delay in the first half of the year.
The company is now aiming for a turnover of around 418 million euros, which represents a 2.7% drop compared to the 429.5 million euros achieved in 2023. This new forecast is proving disappointing; last July, Roche Bobois confirmed that it was aiming for a turnover equivalent to, or even slightly higher than, its 2023 record.
The new target announced by Roche Bobois management also turns out to be very short compared to the consensus cited by TP ICAP Midcap, which is set at 434 million euros in turnover for 2024.
“Let us remember that even if the objective of a turnover down by only 2.7% may seem rather resilient in the current context, it hides perimeter effects and therefore a significantly lower organic performance,” adds the specialist.
As for gross operating income, the company is also downgrading its ambitions compared to those announced last July. It is now targeting a 15% to 20% decline in its current EBITDA compared to the 83.2 million euros achieved in 2023, compared to a previous forecast of a decline of between 5% and 10%.
The observation is clear for Florent Thy-tine since this publication concretizes a “caution” that he has expressed on the matter for several months now. Thus, he revises his estimates downwards with an impact on the 2024 earnings per share estimated at -22%.
The analyst has downgraded his recommendation to “sell” from “hold” on Roche Bobois, not anticipating a short-term reversal of the newsflow on the stock. His target price has also been lowered, from 44 euros to 39 euros.
On the stock market, the publication of the furniture specialist is logically punished. Its share price stumbled again by 5.5% to 46.50 euros around 11:00, after having fallen by more than 8% in the first trading.
Sabrina Sadgui – ©2024 BFM Bourse
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