Picard Memo 171021
- Understand how well covered Picard’ SSNs and SNs are by DCF EV across base and bear cases, and the scope for Picard’s leveraged capital structure (post the Jul-21 refinancing, including dividend recap) to handle shocks to LFL sales growth, cost inflation and valuation multiples / parameters
- Understand extent to which Picard can defend its frozen food leadership within the competitive French food retail market
- Comparison of Picard’s KPIs vs other French food retailers – sales and EBITDA densities, store estates, rent levels, margins, cash generation
- Comparison of frozen food retailers – Picard vs Iceland
- Financial projections, DCF valuation and sensitivities, across base and bear cases
- Pro forma for its Jul-21 refinancing, Q1 22 net leverage (IFRS 16) increased to 7.0x (from 5.1x at Q1 22 prior to refinancing) on our figures – to what extent could either Picard’s SNs or SSNs be at risk of impairment in any adverse operating environment and / or if market re-appraises Picard’s premium valuation to other French food retailers / historic transaction multiples at which Picard has been transacted / Iceland (UK frozen food retailer)?
- How defendable is Picard’s frozen food leadership in France and its associated high gross and EBITDA margins and high unleveraged FCF generation?