da Intermonte – FRANCHI UMBERTO MARMI company research report

Buon pomeriggio,

di seguito e in allegato inviamo il company research report relativo a FRANCHI UMBERTO MARMI a cura di Intermonte.

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Un caro saluto,

Ludovica Bertola

M: +39 347 1667538

Sharp Acceleration in 2Q after Challenging Start to Year

• Strong growth in 2Q24 brings 1H24 sales up +14% YoY. Franchi Umberto Marmi released sales figures for 1H24 that show strong growth in 2Q24 (+53% YoY) to Eu23.1m, which brought 1H24 sales to Eu42.8m, up 14% on last year. This is a particularly positive signal as the start of the year had been challenging for the company with 1Q24 revenues at Eu19.7, down 19.7% YoY. EMEA led sales with Eu24.9m, a 5.1% rise from Eu23.7m in 2023. Asia contributed Eu9.0m, down from Eu9.7m. North America saw substantial growth, with sales nearly doubling to Eu7.1m, accounting for 17% of total sales. Australia also showed a significant improvement, with sales reaching Eu1.4m. Italy sales declined 4%, totalling Eu16.7m, consolidating 39% of total sales. South America and Africa had notable contributions of Eu0.2m, respectively. The geographical diversification highlights the company’s strategy of leveraging market opportunities and balancing seasonal variations across regions, emphasizing its strength in multiple key markets.
• Prospects remains intact. It is worth recalling that management provided positive (albeit qualitative) outlook, which remains valid. Macro-economic conditions and a potential rise in transport costs due to problems in the Suez Canal must be considered but for the moment no direct impact has been seen. Despite this, management said that expectations for 2024 are for further top-line growth; the recent acquisition of Marmoles Man together with product and geographical synergies are having important effects from the first months of this year, while the commercial development of the Group is expected to continue, in particular through 3 main lines: i) further penetration of the most important markets such as China, the US and Australia; ii) expansion into new geographical areas considered particularly interesting and growing such as Vietnam and the Gulf countries; and iii) development of new strategic partnerships based on what has already been done with Corsi & Nicolai in Australia and with Ciot NY in the US.
• Estimates unchanged. After the 1Q24 sales release, we incorporated actuals and some adjustments to profitability for 2024 onward, which were mainly driven by a revised sales mix that now recognises the fast-growing Marmoles Man and Australian companies. We therefore leave estimates unchanged as 1H24 sales figures seem coherent with our previous assumptions and on track to meet FY24 estimates.
• Buy, target Eu9 confirmed. Thanks to its positioning at the very top end of the marble sector, its comprehensive business model, advanced technological facilities and, most importantly, its privileged access to the highest quality marble, FUM looks very well placed to exploit the full potential of a steadily-growing industry. The clear opportunity to further expand its presence globally, coupled to the constantly increasing demand for high-end natural materials, provide a compelling investment case with material upside potential. As the only listed player in the marble sector and with characteristics that are closer to pure luxury rather than construction material players, we value the company through a DCF model, which gives a target price of Eu9, material upside compared to the current market price.