Stock Analysis & Valuation Groupe Guillin S.A. (ALGIL.PA)

• Previous Close: €24.65
• Sector Valuation Confidence Level: Moderate

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	35.77	45
Intrinsic value (DCF)	10.19	-59
Graham-Dodd Method	24.98	1
Graham Formula	21.33	-13

Strategic Investment Analysis

Company Overview

Groupe Guillin S.A. (ALGIL.PA) is a leading French producer of food packaging solutions, serving supermarkets, hypermarkets, commercial catering, and food industries since 1972. Headquartered in Ornans, France, the company specializes in a diverse range of packaging products, including bags, trays, containers, and sealing machines, as well as meal distribution equipment. Operating in the Packaging & Containers sector under Consumer Cyclical, Groupe Guillin has established a strong presence both domestically and internationally. With a market capitalization of approximately €550 million, the company combines innovation with sustainability, catering to evolving food packaging demands. Its product portfolio supports food safety, convenience, and environmental considerations, positioning it as a key player in the European packaging industry. Investors value its steady revenue growth, operational efficiency, and commitment to dividend distributions.

Investment Summary

Groupe Guillin presents a stable investment opportunity within the food packaging sector, supported by consistent revenue (€869.7M in FY 2024) and net income (€59.7M). The company’s low beta (0.818) suggests lower volatility compared to the broader market, appealing to risk-averse investors. Its strong operating cash flow (€93.7M) and manageable debt (€118.5M) indicate financial resilience. However, capital expenditures (€80.4M) reflect ongoing investments in production capabilities, which could pressure short-term liquidity. The dividend yield (~2% based on a €1.10 per share payout) adds income appeal. Risks include exposure to raw material price fluctuations and competitive pressures in the European packaging market. Overall, Groupe Guillin’s niche expertise and diversified client base make it a solid mid-cap pick.

Competitive Analysis

Groupe Guillin competes in the fragmented food packaging industry, differentiating itself through a broad product portfolio and integrated solutions (e.g., packaging machines and meal distribution equipment). Its competitive advantage lies in its vertical integration, serving both retail and industrial catering sectors, which reduces dependency on any single market segment. The company’s focus on sustainable packaging aligns with EU regulatory trends, enhancing its appeal to eco-conscious clients. However, it faces stiff competition from larger multinationals with greater R&D budgets and global distribution networks. Groupe Guillin’s regional dominance in France provides stability but limits growth compared to rivals with broader international footprints. Its ability to maintain margins despite rising input costs (e.g., plastics, paper) will be critical to long-term competitiveness. Strategic partnerships or acquisitions could help expand its market share in adjacent packaging segments.

Major Competitors

• DS Smith Plc (DSM.AS): DS Smith is a global leader in sustainable packaging, with a strong presence in corrugated and plastic packaging. Its scale and recycling capabilities give it an edge in cost efficiency, but it lacks Groupe Guillin’s specialization in foodservice packaging. DSM’s broader geographic reach poses a challenge to ALGIL’s regional focus.
• Ardagh Metal Packaging (AMBP): Ardagh specializes in metal packaging (e.g., cans), competing indirectly with Guillin’s food trays and containers. Its focus on beverage and aerosol markets limits direct overlap, but its global scale and sustainability initiatives could encroach on Guillin’s industrial clients. Ardagh’s higher leverage compared to ALGIL increases its risk profile.
• Ball Corporation (BALL): Ball dominates the aluminum packaging space, particularly in beverages. While not a direct competitor in food trays, its innovation in lightweight, recyclable packaging sets industry standards. Ball’s vast R&D budget and multinational contracts overshadow Guillin’s regional operations, though ALGIL retains an edge in customized foodservice solutions.
• Sonoco Products Company (SKA.BR): Sonoco offers diversified packaging, including rigid paper containers and flexible packaging, overlapping with Guillin’s product lines. Its stronger North American presence contrasts with Guillin’s European base. Sonoco’s higher revenue base provides economies of scale, but Guillin’s niche in catering equipment offers differentiation.