TESB.BR - Tessenderlo Group

[skanjete]

Tack will stay, that's for sure. He won't sell.

So the share price to him is of no matter, unless he can be opportunistic in buying some more. I think he controls about 36% of the company now.

 

Valuation and the question whether this is a no brainer or not, is something everyone has to determine for himself.

 

Right now, the EV. is about 31€/sh, for a EBITDA of about 5,2€/sh in 2016 or EV/EBITDA =5,96.

P/E is about 15,5. Is this cheap? A no-brainer? This depends who is looking at these figures.

 

If Tack can continue as he did in the past 2 years, I think this is cheap. Can it get cheaper still? Of course! I bought some as recently as February at 23€/sh. So everything is possible...

 

Of course, the low hanging fruit in terms of efficiency gains will be gone by now. But if they succeed in investing their cash flow at high ROI, a lot is possible still.

[skanjete]

Guess who's buying again : 82.576sh for 2,4m€ in the last week.

[skanjete]

EBITDA forcast is a little lower again. They expect only +10% for 2016, mainly because Kerley was weaker than expected.

The good news however is that bio valorisation is profitable again and from now on, expansion investments will start to come on stream.

 

 

So, less than 1 year after the proposed merger of Tessenderlo and Picanol, where are we?

Tack proposed a merger on a relative valuation of 31,5€/sh for Tessenderlo and 45,85€/sh for Picanol.

Tack would gain control of  somewhat more than 50% of the combined group, with lots of free cash flow from Picanol to invest in the consolidation in the chemicals sector.

 

Shareholders under the lead of Meryl Wittmer blocked the deal because the relative valuation numbers "didn't make any sense".

 

Now, less than a year later, we have :

- Tessenderlo share at 29€, 8% lower than the valuation

- Picanol share at 73€, 59% above the valuation price

- Tack still controls more than 90% of Picanol.

- Through purchases on the open market at less than 31,5€/sh (yesterday 1mio shares), Tack now also controls almost 40% (39,63%) of Tessenderlo.

 

For now, it seems Tack did a very good deal and Meryl did a very bad deal by blocking the deal...

[namo]

Since we have no clue how the merged cos would have traded, I don't see your argument as very convincing...

What we can say, in hindsight, is: we should have all bought PIC! But hindsight is easy.

 

Anyway, regarding the results: +10% is certainly not bad, though Tack has gotten us used to better.

I believe patience is key, since two new plants will only come online in S2 2017.

 

 

[skanjete]

I suggest you look up the numbers. Both companies trade in line with their result evolution.

 

And my argument was mainly that the proposed transaction by Tack was fair for all shareholders, contrary to what was suggested by Meryl.

I think there can't be any discussion anymore that the valuations did make sense after all.

 

About buying PIC instead of TESB : as you know, only less than 1.700.000sh PIC were available, de rest controlled is by Tack.

This aspect has been discussed here before.

[thefatbaboon]

skanjete,

 

you already know of my frustration with wittmer, and the various people who so quickly jumped to insult the character of tack.

 

My investment is principally in picanol not tessenderlo so I have not suffered financially because of these peoples' stupidity but I nonetheless have found it upsetting. 1. Because BRK is a large investment of mine and I don't like the idea of a someone on the board so quick to judge (poorly) and 2. It's a shame to insult Tack and make him think that having a public company is not fun and that he can not find a group of grateful and supportive shareholders.

 

Anyway, maybe that 1m block was wittmer creeping away!

[Jurgis]

I possibly should have looked in more depth and considered buying (some) PIC vs TESB.

[ukvalueinvestment]

Press release out this afternoon saying Tack had gone above 30% ownership.  Doesn't this trigger a takeover bid under belgian takeover law?

[misterkrusty]

not if the >30% position was achieved - at least in part - via a rights offering, which it was.  the entire reason that TESB did the rights offering was to allow Tack to go over 30% without triggering takeover law provisions

[thefatbaboon]

Press release out this afternoon saying Tack had gone above 30% ownership.  Doesn't this trigger a takeover bid under belgian takeover law?

 

 

Picanol crossed 35% not 30%

[skanjete]

Press release out this afternoon saying Tack had gone above 30% ownership.  Doesn't this trigger a takeover bid under belgian takeover law?

 

 

Picanol crossed 35% not 30%

 

cfr. announcement yesterday : Tack controls more than 40% now.

[netnet]

It seems as if between Picanol and Tessenderlo, Picanol, aside from liquidity issues, is the still the better company, on a PE and EV/EBITDA and free cash flow basis.  I was thinking of buying a little more of Tessenderlo, but now I think that Picanol is the way to go, with the caveat that Tack is buying Tessenderlo's stock.

 

Skanjete (or anyone else) did you attend the Picanol annual meeting?

 

Thoughts?

[jimjam]

Anyone aware of why Picanol is up 8% today (currently around 100 eur/share)?

I didn't see any particular news on their site.

Thanks!

[A Dhandho Investor]

I saw a quote of the spokesperson of Picanol in the Belgian financial press that they are not aware of a reason for the market reaction today (they did not give any interviews or presentations lately and there is also nothing in the pipeline).

 

Ofcourse the float of Picanol is very small..

[WayWardCloud]

The annual report is out.

https://www.tessenderlo.com/EN/Documents/Annual%20reports/Annual%20report%202017%20ENG.pdf

 

Tack and Haspeslagh foresee a stagnation of revenues in 2018.

This is despite the many growth investments they've made and the new factories they opened in 2017...

Management seems hard at work deeply reshaping the company's organization, building new factories and doing product R&D.

opinions?

[Spekulatius]

The annual report is out.

https://www.tessenderlo.com/EN/Documents/Annual%20reports/Annual%20report%202017%20ENG.pdf

 

Tack and Haspeslagh foresee a stagnation of revenues in 2018.

This is despite the many growth investments they've made and the new factories they opened in 2017...

Management seems hard at work deeply reshaping the company's organization, building new factories and doing product R&D.

opinions?

 

Chemicals and particularly their markets (fertilizer, constructions tubes) are cyclical, especially with respect to margins ). I think most chemical companies in Europe expect a down year in terms of profits for Y2018.

[patsyluck]

 

I see there has been some more insider buying of Tessenderlo by Picanol

 

https://www.trivano.com/aandeel/tessenderlo-group.227.insiders

[Libs]

Half year results are out, stock is down 4%.

 

It's getting interesting at ~14 X earnings.

 

https://assets.tessenderlo.com/press/Documents/PR%202Q18%20HY18/2018%20PR%20Tessenderlo%20Group%20HY18%20results%20English.pdf

[Libs]

Q4 and 2018 results out:"

 

 

 

https://assets.tessenderlo.com/press/Documents/PR%2014032019/2019%20PR%20Tessenderlo%20Group%202018%20results%20English.pdf

[skanjete]

This is really cheap at E.V./EBITDA of 6, low debt and at an cyclical low.

[WayWardCloud]

Half Year results are out.

https://assets.tessenderlo.com/press/Documents/PR%2026082019/2019%20PR%20Tessenderlo%20Group%20HY19%20results%20English.pdf

[skanjete]

Look at free cash flow! And this without any working capital bonus...

 

Also, it strikes me again how they present results in a way that downplays their progress.

[kab60]

Look at free cash flow! And this without any working capital bonus...

 

Also, it strikes me again how they present results in a way that downplays their progress.

In what way do you feel they're downplaying the results (taking the power plant somewhat out of the equation)? I agree results look strong, espescially impressive compared to results of other chemical companies atm, but I feel like it's difficult to get a grasp for where they're going (guides to increased earnings...). Do you feel you have a good idea for what'll drive earnings in the coming years or is it a matter of high uncertainty, low risk (follow Tackes money?)? (probably a combination?).

[Libs]

Market cap 1.1B, FCF 145MM = 7.5X.

 

From their annual report, released 3/26.

 

Note how essential their markets are. Revenue should hold up well.

 

This stock is a bargain.

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In light of the latest developments concerning the global spread of the COVID-19 (Coronavirus) disease,

Tessenderlo Group is taking all the necessary steps to ensure that it keeps its people safe and keep its plants

and businesses running. This is because the group provides support for vital services and the flow of crucial

goods. Tessenderlo Group supplies the basic chemicals for the production of drinking water based on side

streams in the form of hydrochloric acid from the production of sulfate of potash (SOP). In addition, the

group produces gelatin for medical and food applications, crop nutrition and crop protection products for

agriculture (for which the season is just starting in the northern hemisphere), and plastic pipe systems for

maintaining drinking water supply systems and polluted water evacuation, while Akiolis protects the meat

chain (in France).

 All of the plants and activities are running in line with expectations at the moment, except for the current

disruption of production at DYKA Group’s French plant in Sainte-Austreberthe (segment Industrial Solutions).

In February 2020, the COVID-19 disease also disrupted production at the Chinese plant in Nehe (PB Leiner –

segment Bio-valorization), which restarted production in early March. Based on current information, the

impact of these events on the financial results is expected to be limited.

 Activities could be further impacted in the coming weeks or months if too many employees are impacted by

COVID-19 and/or if access to raw materials and auxiliary materials or means of transportation becomes more

complicated, or if our customers are no longer able to process our products

[A Dhandho Investor]

Luc Tack also bought an additional 400k shares on Monday at an average price of 24,50€ via his own investment vehicle (Symphony mills)