German car parts maker Novem plans IPO, sees Chinese opportunities - CEO
By Alexander Hübner
VORBACH, Germany (Reuters) - Novem is preparing for a stock market flotation as Chinese car makers step up production of premium cars, opening up new business opportunities for the German interiors supplier, Chief Executive Guenter Brenner said.
Novem could be valued at about 1.5 billion euros in a potential flotation, and an IPO could be announced as early as next week, people familiar with the matter said.
"We can see that the Chinese carmakers are now starting to build their own premium vehicles and want to attack the world market as well", Brenner told Reuters, adding Novem stands to benefit from a surge in demand for its products.
"An IPO would be an almost logical step after our bond issue", he said, adding the company was working with JPMorgan, Berenberg on preparation for such a deal.
The Dutch billionaire Brenninkmeijer family, best known for its fashion retailer C&A, owns Novem through its fund Bregal Unternehmerkapital and would be able to finally cash out, after an initial attempt to exit in 2019 was pulled.
Based in Vorbach near Bayreuth, Novem supplies carmakers including Audi, BMW, Daimler, Porsche and Maserati with door trim and decorative function elements for interior parts such as dashboards.
"Novem has a market share of 46% in the relevant premium segment. Last year we equipped 4.2 million vehicles with 26.8 million parts", Brenner said.
Peers include Ningbo Joyson and Ningbo Huaxiang Electronic.
Novem employs 5,800 staff and posted earnings before interest, tax, depreciation and amortisation of about 120 million euros on revenue of 646 million euros in fiscal 2019/20.
In March, Moody's lifted Novem's credit rating outlook to stable, citing the recovery in its revenue and margins from the trough of the pandemic.
"We already achieved margins of 17 to 18% before the coronavirus crisis. We still consider this to be a realistic target", Chief Financial Officer Johannes Burtscher said, adding the company expects annual revenue growth of 5-6% in the medium term.
(Additional reporting by Arno Schuetze; Editing by Bernadette Baum)
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