| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 813.85 | 5362 |
| Intrinsic value (DCF) | 7.08 | -52 |
| Graham-Dodd Method | 27.53 | 85 |
| Graham Formula | 14.36 | -4 |
Rougier S.A. (ALRGR.PA) is a France-based global leader in sustainable timber production, operating with a vertically integrated model across Africa. Founded in 1923 and headquartered in Niort, the company manages approximately 2.3 million hectares of forest concessions in Gabon, Cameroon, Congo, and the Central African Republic. Rougier specializes in high-value tropical wood products, including logs, sawn timber, plywood, and secondary-processed items like decking, laminated timber, and technical plywood. The company serves international markets with both African-sourced and imported timber products, positioning itself at the intersection of sustainable forestry and premium wood manufacturing. As environmental regulations tighten globally, Rougier's FSC-certified operations and long-term concession agreements provide a competitive edge in the €100B+ global timber products market. The company's niche focus on African tropical hardwoods differentiates it within the basic materials sector, though it faces ESG scrutiny common to forest product companies.
Rougier presents a specialized play on African timber resources with modest financials (€96.6M revenue, €2.7M net income in last reporting period). The near-zero beta (0.056) suggests low correlation to broader markets, potentially appealing for diversification. However, the micro-cap status (€18.7M market cap) and lack of dividends limit institutional interest. Key attractions include valuable forest concessions and FSC certification in an era of constrained timber supply. Risks include political instability in operating regions, currency fluctuations in African markets, and potential ESG controversies. The negative free cash flow (€-2.2M operating cash flow vs €-4.5M capex) raises questions about capital allocation. Valuation appears reasonable at 0.19x P/S, but investors must weigh Africa operational risks against scarce tropical hardwood assets.
Rougier occupies a unique position as one of few European-listed pure plays on African tropical timber, differentiating itself through: 1) Vertical integration from forest management to finished products, 2) Long-term concession agreements securing rare species like Okoumé, and 3) FSC certification enabling EU market access. However, the company faces intense competition at multiple levels. In African forestry, it competes with larger multinationals for concession renewals. In timber processing, Asian manufacturers benefit from lower labor costs. The company's small scale limits R&D spending on engineered wood products compared to Nordic peers. Rougier's competitive moat lies in its century of African operational experience and rare tropical wood portfolio, but this is offset by geographic concentration risk. Unlike boreal forest operators, Rougier cannot easily expand concessions due to political constraints. The shift toward mass timber construction in Europe plays to competitors with spruce/pine resources, though Rougier's hardwoods command premium pricing in niche applications. ESG performance is a double-edged sword - while certifications are valuable, tropical forestry attracts more activist scrutiny than temperate operations.