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Stock Analysis & ValuationDerichebourg S.A. (DBG.PA)

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7.96
Sector Valuation Confidence Level
Moderate
Valuation methodValue, Upside, %
Artificial intelligence (AI)19.29142
Intrinsic value (DCF)2.00-75
Graham-Dodd Method4.69-41
Graham Formula3.64-54

Strategic Investment Analysis

Company Overview

Derichebourg SA is a leading French environmental services and industrial outsourcing company, operating globally with a strong focus on sustainability and resource recovery. Founded in 1956 and headquartered in Paris, Derichebourg specializes in waste management, recycling ferrous and non-ferrous metals from end-of-life products, industrial waste, and new scrap. The company's Environmental Services division handles collection, sorting, and recycling, while its Multiservices division provides industrial cleaning, facility management, logistics, and specialized staffing solutions. Derichebourg plays a critical role in the circular economy, supporting businesses and municipalities in waste reduction and resource efficiency. With a market cap exceeding €1 billion, the company is a key player in the European waste management sector, offering integrated solutions that align with global environmental regulations and sustainability trends.

Investment Summary

Derichebourg presents a compelling investment case due to its diversified revenue streams across environmental services and industrial outsourcing, supported by strong cash flow generation (€328.3M operating cash flow in FY 2023). The company benefits from increasing regulatory demand for recycling and waste management solutions, positioning it well for long-term growth. However, its high beta (1.99) indicates significant volatility, and its substantial total debt (€905.9M) could pose risks in a rising interest rate environment. The dividend yield (€0.13 per share) is modest, but the company's focus on sustainability aligns with ESG investment trends. Investors should weigh its cyclical exposure to industrial activity against its defensive waste management operations.

Competitive Analysis

Derichebourg holds a competitive edge through its vertically integrated waste management and recycling operations, which allow it to capture value across the entire waste-to-resource chain. Its dual focus on environmental services and industrial outsourcing provides revenue diversification, reducing reliance on any single market segment. The company's strong presence in France and expanding international footprint give it scale advantages in procurement and logistics. However, it faces intense competition from larger global waste management firms and regional players with deeper pockets. Derichebourg's ability to innovate in metal recovery and circular economy solutions differentiates it, but its profitability (€74.8M net income on €3.62B revenue) lags behind some peers, suggesting room for operational efficiency improvements. Its Multiservices division faces margin pressure from labor-intensive outsourcing contracts, though this segment provides stable recurring revenue.

Major Competitors

  • Veolia Environnement SA (VEOLIA.EN): Veolia is a global leader in water, waste, and energy management, with significantly larger scale (€45.3B revenue) than Derichebourg. Its strengths lie in integrated environmental services and international reach, but its size can lead to bureaucracy. Veolia's waste division directly competes with Derichebourg in recycling and recovery.
  • Suez SA (SUEZ.EN): Suez (now part of Veolia) was a major competitor in water and waste management, with strong technological capabilities in recycling. Its merger with Veolia has reduced competition in the French market, potentially benefiting Derichebourg in certain niches.
  • Waste Management Inc (WM): The largest waste management company in North America, WM excels in landfill and collection services but has less focus on metal recycling compared to Derichebourg. Its scale and profitability are superior, but it lacks Derichebourg's industrial outsourcing division.
  • Republic Services Inc (RSG): Another US waste management giant, Republic Services competes in recycling and waste-to-energy but has minimal European presence. Its stronger margins reflect focus on less cyclical segments than Derichebourg's metal recycling business.
  • Rémondis SE & Co. KG (REM.PA): A major private German competitor in recycling and waste services, Rémondis has strong regional dominance in Northern Europe. It competes directly with Derichebourg in metal recovery but lacks public financial disclosures for full comparison.
  • Paprec Group (PAP.PA): France's largest private waste management company, Paprec specializes in recycling with advanced sorting technologies. It poses strong competition in Derichebourg's core markets but doesn't offer industrial outsourcing services.
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