Carbios — Update 10 June 2016

Carbios (EU: ALCRB)

Last close As at 20/12/2024

36.98

−2.46 (−6.24%)

Market capitalisation

413m

More on this equity

Research: Industrials

Carbios — Update 10 June 2016

Carbios

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Written by

Industrials

Carbios

Closer to industrialisation with first JV - Carbiolice

Corporate update

Industrials

10 June 2016

Price

€10.95

Market cap

€42m

Net cash (€m) at 31 Dec 2015

8.8

Shares in issue

3.8m

Free float

11%

Code

ALCRB

Primary exchange

Alternext

Secondary exchange

N/A

Share price performance

Business description

Carbios develops enzyme-based processes for biodegradation and bioproduction of plastics, with a long-term aim of displacing current recycling and production practices.

Analysts

Catharina Hillenbrand-Saponar

+44 (0)20 3077 5700

Roger Johnston

+44 (0)20 3077 5722

Carbios is a research client of Edison Investment Research Limited

Carbios has announced its first joint venture, Carbiolice, in partnership with Limagrain and SPI. This is a key step and will combine Carbios technology with Limagrain’s industrial and commercial expertise in a €29.5m project to be developed over four years. Demand is supported by French legislation, which will enforce the use of bio-sourced and biodegradable plastics for certain bags from 2017. Our valuation range is unchanged, €23-37/share.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(c)

DPS
(c)

P/E
(x)

Yield
(%)

12/14

0.7

(3.3)

(59.3)

0.0

N/A

N/A

12/15

0.8

(4.0)

(81.3)

0.0

N/A

N/A

12/16e

0.6

(5.5)

(111.7)

0.0

N/A

N/A

12/17e

0.7

(5.4)

(93.1)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, share-based payments

Carbios has announced its first industrial joint venture, earlier than it expected. With existing partner Limagrain and venture fund SPI, the company will create a JV, Carbiolice, to focus on developing biodegradable plastics for plastic bags and mulching films. The venture will use Limagrain’s existing production facilities, where it produces and commercialises bioplastic, but with a different technology. Carbiolice will progressively integrate Carbios’s enzyme, depolymerisation and biodegradation technology. These add specific characteristics, such as controlled degradation and greater resilience. Demand is assured, as French law requires fruit and vegetable plastic bags to be biodegradable from 1 January 2017, although the Carbiolice product will not be ready by then. The JV, over four to five years, will integrate the Carbios technology, while moving to industrial and commercial scale, benefiting from Limagrain’s expertise. Total investment will be €29.5m in three phases over four years, of which €11m will be funded by SPI, building to a 37% stake. It is worth noting that the other partners will altogether have to fund 30% each time SPI commits investment.

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Germany

London +44 (0)20 3077 5700

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London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

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US

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NSW 2000, Australia

Wellington +64 (0)48 948 555

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Wellington 6011

New Zealand

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 9258 1161

Level 25, Aurora Place

88 Phillip St, Sydney

NSW 2000, Australia

Wellington +64 (0)48 948 555

Level 15, 171 Featherston St

Wellington 6011

New Zealand

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