It has been three years since Fluidra, at the beginning of 2022, published its results for the 2021 financial year, which until now measures the record profits for the Catalan company in its entire history. During this time it has suffered a setback in its business that has not been specific to the company but to the entire sector, but which is already on its way to recovery.
In more detail, what happened was that as a result of Covid, the sector experienced an intense rebound in sales. Many hotels took advantage of the period of inactivity to improve their swimming pool facilities while at the residential level, the client valued having this type of construction at home or improving those that were already there. To this growth of the pool park at a global level, it would be necessary to add its maintenance, which is increasingly gaining weight in Fluidra’s business.
Thus, it reached an EBITDA of 549 million euros in 2021, which was more than doubling the gross profit of 2019, prior to the pandemic. However, in the following years the excesses of this specific moment in the market have been paid for in the form of a surplus that remained in the supply chain, since many intermediate agents in the sector had gathered stocks to satisfy a demand that later became normal.
In this new context, the company’s EBITDA was reduced until it hit the floor at 445 million in 2023, a moment that represented a turning point in the sector, which began to eliminate the oversupply in the market and for Fluidra in particular, which This added to a cost reduction plan that is still underway. Thus, the consensus of analysts collected by FactSet predicts that it will close 2024 with a gross profit of 470 million, 5.6% above the previous year. The recovery will continue in the coming years and The market expects it to reach its highest historical EBITDA again in 2026.
In this first half of the year, it will also celebrate its Investor Day in which he will give the guidelines for the coming years. “We think that it can be a key catalyst for the price going forward, so that it could contribute to continuing to recover sentiment about the sector, something that Buffett’s entry into the capital of Pool Corp, which is the main distributor in the US,” they explain at Bankinter.
All these ups and downs have been reflected on the trading floor. In 2021, a boom year, Fluidra shares reached 38 euros, their all-time high so far. From there, and until the end of 2022, the stock lost more than half of its capitalization and, since then, it has been gradually recovering until it has once again exceeded the 25 euros at the end of last year, something that had not happened since 2022.
Analysts have also been improving their valuations recently and the consensus already sets the average target price at 25.6 euros, which leaves an upside potential of 7%. This good moment coincides with the increase in the position of the Puig family in the company’s capital, which already amounts to 7.53% after its latest acquisitions, becoming the third largest shareholder by surpassing the Planes and only by behind Serra Duffo and Rhone Capital.
“We believe that the recovery of 2024 will continue in 2025, with prices rising and the expected cost savings that will boost margins,” they point out at Barclays. “The valuation continues to offer a discount compared to competitors despite the fact that greater growth in its profits is expected,” they add. “However, it may have to raise prices to offset the tariffs that Trump could impose on imports from China and Mexico, from where Fluidra brings components to the US,” they conclude.
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