Renta 4: The company has announced the sale of its cork flooring business in Sweden and Denmark to the Salix group for a total of €23.7 million.
This divestment is part of its strategy to reorganise and optimise the flooring, composites and insulation businesses under a single unit called Amorim Cork Solutions, announced in the first half of the year.
Timberman Denmark A/S and Amorim Cork Sweden AB will continue to be distributors of Corticeira Amorim’s flooring products in the Danish and Swedish markets, moving from a branch-based to a distributor-based model.
The implied multiples of the deal imply EV/sales ratios ~0.66x and EV/EBITDA ~6x ‘24 R4e, attractive multiples due to the high margins of the business, which the management team believes are difficult to sustain.
The transaction will have a positive accounting impact of €14m in the 2024 annual accounts.
Valuation: Positive news that continues to advance in the achievement of the Company’s plans, seeking to recover its flooring and insulation businesses, which have recorded disappointing performances and/or negative margins in recent years.
We recall that the Company’s optimisation plan estimates short-term cost savings of around €10-12 million and expects to close the businesses in Finland and Benelux, where they expect to sell a real estate asset for an additional €4 million.
We do not expect a significant impact on the share price given the small size of the transaction and its limited impact at the operating level.
We reiterate our recommendation to OVERWEIGHT with P.O. €11/share.
