EUROPEAN EQUITIES
R-co Core Equity Europe: investment Case
Fresenius – German medical company
Bunzl – Specialised English distributor
▪ Recovery case : new CEO divesting non-core activities and implementing restructuring plan
▪ Improving business mix : own brand penetration driving margin higher
▪ Business model resilience : noncyclical end markets and vertical integration of the company
▪ Growth potential : organic growth coupled with market consolidation marché (external growth)
▪ Positioned on long term trend of aging population and growth in hospitalization
▪ Track record of value creation : ROCE stable around 13%
▪ Attractive valuation : P/E multiple 40% below historic average
▪ Strong FCF generation driven by excellent cash conversion (100% Conversion of EPS into FCF)
▪ Alignment of interest with shareholders : ROCE added to KPI of variable remuneration
▪ Alignment of interest : favorable KPI (Share price and EPS) and running share buyback programme
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Source: Rothschild & Co Asset Management – 31/12/2024
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