(BFM Bourse) – The automotive manufacturer Stellantis flashed its brilliant results in front of the veterinary laboratory Virbac in the past year. At the opposite end of the spectrum, Orpea balanced its balance sheet at the cost of a nearly 100% drop, while fellow retirement home operator Clariane also suffered.
The Paris market had a good year in 2023, driven by relatively good corporate results and also by the end of the cycle of monetary policy tightening by major central banks. SBF 120 ended up getting 15.26%. However, the ranking of the second flagship index of the Paris Stock Exchange after the CAC 40 shows that some stocks performed better, while others, on the contrary, had a year to forget in 2023.
Stellantis shines brighter than ever
It’s not that common for the best performing CAC 40 to also have the SBF 120. Simply because large caps tend to show less volatility than others, both on the downside and upside.
But in 2023, it’s Stellantis who topped both the CAC 40 and the SBF 120, with an increase of 59.34%. The group, created by the merger between Fiat Chrysler and PSA, once again demonstrated the quality of its operational execution with an operating margin of 14.4% for the first six months of 2023. Only Porsche and Ferrari, but with a “luxury” positioning very different from the group, generate higher profitability .
“Stellantis’ operating income margins are impressive compared to its European peers, despite sales in similar markets, demonstrating its ability to maintain cost discipline,” boasts Royal Bank of Canada. The Franco-Italian-American group is also one of five auto stocks to favor in 2024, according to Bank of America. And to think that its CEO Carlos Tavares, a perfectionist at heart, believes that his teams have “fallen short” of a few things this year…
Veterinary laboratory Virbac (+57.68%) climbs to second place and takes revenge after a difficult year in 2022 (-46.3%). The company has raised its targets several times this year, helping put the cyber attack the company suffered over the summer on the back burner.
Also, Solutions 30, which was mistreated last year (-76%), regained strength in 2023 (+56.27%) and is in third place. Its performance was supported by the strength of its activity in the “Benelux” zone (Belgium, the Netherlands, Luxembourg), a region that saw growth of more than 67% on a comparable basis in the third quarter, mainly thanks to the deployment of the very high-speed network in Belgium and the countries. In addition, the market appreciated the group’s desire to target a double-digit gross operating margin (Ebitda) in all its geographies.
X-Fab at the foot of the stage
Semiconductor group X-Fab (+53.89%), which joined the SBF 120 in September, is failing to make the podium. X-Fab is one of the main European foundries specializing in the development of chips on silicon wafers for digital or analog circuits.
Its products mainly serve the automotive industry, which accounts for roughly half of its turnover. This year, the group saw strong growth of 31% in the third quarter for its core businesses. “After a temporary decline in 2020, sales recovered and gross margins and adjusted gross operating profit (EBITDA) reached new highs,” highlights Degroof Petercam.
“Growth is clearly visible as bookings have been excellent, prototyping has increased and is a major indicator of growth, and there is a major external driver: the continued growth of silicon content in cars,” adds the Belgian bank.
Once expected to join the CAC 40, Accor completes the top 5 (+48.18%). Led by Sébastien Bazin, the company pushed for the recovery of tourism, raised its annual outlook several times, held an investor day that was considered a success by analysts, saw an increase in agency ratings and announced share buybacks.
Among the other groups present in the top 10 are CAC 40 companies whose transformations have produced robust results, positively surprising investors: Saint-Gobain (+46.02%), the oldest company in the CAC 40, and Publicis (+41.37%).
Retirement home operators on back of pack
If the markets have been on the rise this year, several SBF 120 stocks have suffered greatly with dizzying declines. If Casino (-91.97%) left the index in September and therefore did not appear in the “list” of the biggest declines, the largest decline remains, unsurprisingly, the retirement home operator Orpea (-99.48%).
2022 was marked by the revelation of the investigative book “The Undertaker” and a spike in inflation that brought the group’s model to the ground, undermined by its debt and large property portfolio. In 2023, Orpea was completely recapitalized to ensure its survival and came under the control of a consortium led by the Caisse des Dépôts.
This was done at the cost of three capital increases – the third will take place at the beginning of the year – and the issuance of a total of 159 billion (yes, you read that correctly) shares. Shareholders thus suffered a huge dilution, which ended with the price falling to 1.69 euro cents. And when I think that just two years ago he had a share of almost 47 euros…
Another large operator of the Clariane retirement home also suffered this year (-76.25%). The former Korian had to deal with doubts all year about the refinancing of its debt maturities (which at the beginning of the year were around 900 million euros for 2023 and barely less for 2024), in the context of high interest rates. There were concerns about raising capital and the group had to revise its year-end debt forecast upwards.
In mid-November, Clariane decided to launch a €300 million capital increase project, partially guaranteed by Crédit Agricole Assurances and planned for next year, as well as to sell assets worth around €1 billion from 2024.
Euroapi (-58.63%) is in third place for the biggest declines of the year. Sanofi’s former active pharmaceutical ingredients subsidiary experienced a hellish descent into the stock market on Oct. 10, plunging 59% in one session after issuing a stark earnings warning and delaying its medium-term targets.
Completing this “flop 5” are Worldline (-57.1%) and Alstom (-46.63%), two groups that in October competed for the unenviable title of the heaviest historical drop in the CAC 40 value for one session (-37.6% for Alstom then -59% for Worldline). Alstom issued stark warnings about its cash flows before opening the door to a potential capital raise in mid-November to maintain its credit rating, an option the group had previously refused to consider. Worldline cut its annual targets and delayed its medium-term targets, posting below-expected growth. This represented a serious setback for a market that had already shown its disillusionment with the payments sector in recent years. This poor performance cost it a place in the CAC 40, Worldline was dropped from the flagship index in mid-December.
Julien Marion – ©2023 BFM Bourse