UPDATE 1-Altran eyes takeovers as returns to profit

Thu Mar 14, 2013 6:52am EDT

Related Topics

* Returns to net profit in 2012, op margin 8.6 pct

* Eyes one or two acquisitions in Q2 - CEO

* Shares up 2 percent

By Alice Cannet

PARIS, March 14 (Reuters) - Altran could make several acquisitions this year, Chief Executive Philippe Salle said on Thursday, after the French engineering consultancy said it expected sales and profitability to grow in 2013.

Salle said the takeovers, which follows the company's return to profit last year, would likely include one in India and were part of Altran's search for targets abroad to help boost sales to more than 2 billion euros ($2.59 billion) in 2015.

"We have the ability to make several acquisitions this year, the sum of which could well exceed 100 million in sales," Salle told journalists. "I think in the second quarter, we will perhaps be able to announce one or even two."

Altran shares were up 2.1 percent at 10.40 GMT, one of the biggest risers on France's broad SBF120 index, as analysts said results came in line with their expectations and reacted positively to an improvement in the company's finances.

"Balance sheet deleverag(ing) should accelerate in the future, with Altran signalling that it is ahead of its 2015 plan in terms of free cash flow on revenue," Societe Generale analysts wrote in a note.

Altran aims to hit and possibly beat the average estimate among analysts for a current operating margin of 9 percent this year, Salle said. As part of its 2015 strategic plan, it is targeting a margin of between 11 and 12 percent.

Current operating profit reached 124.6 million euros last year, ahead of the 123.5 million average analyst estimate, leading to an 8.6 percent margin on sales of 1.46 billion.

Altran, which helps clients with the design and manufacturing of products and services and the set-up of information systems, posted its first net profit in three years in 2012 as restructuring efforts started to pay off.

Net profit reached 64.6 million euros last year, compared with the average analyst estimate of 67.9 million, according to Thomson Reuters I/B/E/S.

EXPANSION ABROAD

Salle was appointed in June 2011 after former CEO Yves Chaisemartin was ousted in a battle over strategy with top shareholder Apax Partners, which argued that new leadership was needed to boost profits and expand its international business.

Since then, he has focused on reversing losses through asset sales and cost-cutting efforts, and has been seeking acquisitions outside sluggish southern Europe.

In December, Altran announced the takeover of Munich-based IndustrieHansa, a car engineering specialist, for an unspecified sum. The acquisition will turn Germany into Altran's second market after France and help boost sales growth and earnings this year.

The Societe Generale analysts said they expected the company's financials to "remain sound" even after the deal. Excluding the acquisition, the company's net debt to EBITDA ratio is now below 1.0 for the first time since 2005, they said.

Ten out of 11 analysts who cover the stock have a buy rating on it, according to Starmine data. Altran shares are up 1.6 percent this year, after more than doubling in 2012, valuing the company at 843 million euros.

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.