In a market in Paris that is anemic and is constantly disintegrating for economic and economic reasons, as well as for regulatory and fiscal reasons, and therefore structural, any sizeable introduction is welcome. NOVARES with an estimated value of 521 million is enough to put some comfort in the hearts of financial professionals and give hope to companies looking for financing for their growth.
However, there are many reasons to be cautious
The plastics sector is by definition difficult, as it is subject to strong fluctuations in raw materials, often amplified by variations in currency exchange rates and with cyclical outlets. Margins, when positive, are actually quite low traditionally. The operating margin should reach 6.5%.
The past has shown this when the company was in a more than perilous situation following the 2008 crisis and when the FAA (Fonds d’Avenir Automobile), at Nicolas Sarkozy’s initiative, acquired a stake in the company, thus ensuring its survival. Since then, the Equistone fund has carried out a remarkable reversal work but, is this a sign, it will take advantage of the initial public offering to partially withdraw.
Moreover, if the company has been able to become stronger by restructuring itself through the diversification of customer manufacturers and geographical areas of location, it is questionable whether there are any margins for improvement. However, the horizon is not quite clear. Rising interest rates could lead to an economic slowdown and in particular to the purchase of vehicles, often purchased on credit. Moreover, the position in China is presented as an opportunity but should not overshadow the Chinese authorities’ desire for the domestic industry to become independent. No one can forget the development of the railway industry, which in a short decade has managed to do without foreign partners.
Finally, the financial markets are experiencing turbulence linked to rate hikes, which are not about to diminish.