Robertet remains undervalued but undeterred

Robertet, the French flavours and fragrances group, has seen a sharp rise in its share price this year helped by renewed interest in the sector due to a number of high profile transactions, but the company's chairman Philippe Maubert said that the company remained undervalued.

According to a report in the French paper Le Figaro​, Robertet's share price has risen 32 per cent since the start of the year, but the company's market value remains low. While FIS was sold by Nestle to Givaudan for 1.84 times its turnover and Bayer is hoping to get two times turnover for Haarmann & Reimer, Robertet's market capitalisation is little more than one times turnover.

The 32 per cent rise so far this year is encouraging, said Maubert, but no more than the company deserved given that it had doubled turnover and increased its net profits by more than two-and-a-half times over the last five years to €203 million and €12.3 million respectively.

Maubert remained unconcerned by the relatively poor performance of the Robertet share price, however. He told the paper that the company would continue with its expansion plan which aims for 10 per cent growth each year through both acquisitions and existing business.

The Maubert family currently holds 51 per cent of Robertet's shares, but the company's chairman said the family was prepared to dilute its holding via a capital increase if it needed to raise cash for a suitable acquisition. He stressed, however, that the company would be able to raise up to €100 million on acquisitions without the need for a capital increase because of the company's low debt levels - just €15 million compared to assets of €89.5 million.

Robertet's growth targets were met easily last year, with sales rising 14 per cent, operating profits growing 20.5 per cent and net profits increasing 24.2 per cent. Part of the sales increase was due to the acquisition of Belgian group PAB Savoury from Danone, as well as the acquisition of minority stakes in its US subsidiaries - 25 per cent of Robertet Flavors and 17.6 per cent of Robertet Fragrances.

However, Maubert stressed that the good performance had also come from expansion into a number of new markets during the year.

Sales are expected to rise by around 5 per cent in 2002, with an associated increase in profits, despite a downturn in cosmetics and perfume sales via airport outlets caused by the events of 11 September, Maubert said. The US remained a difficult market, he said, and this could impact results given that some 41 per cent of the company's turnover came from that market.

Maubert remained optimistic, however, not least because of a planned expansion into the Asian markets which currently accounts for just 6 per cent of sales. Maubert estimated that this figure would double within just two to three years.