A glimmer of hope for tourism professionals. Last week, the government of Edouard Philippe presented an emergency plan for the sector, which already involves the authorization granted to the French to go on vacation this summer in France. Certainly, the deconfinement of travel on a national scale will not save the season of specialists. But it will limit the damage by promoting local tourism, based on values of authenticity. Unfortunately, for an international player like Voyageurs du Monde, the carrots are already cooked with a 2020 exercise which is similar to an “annus horribilis”. For this travel agency specializing in adventure and personalized routes, most of the activity is indeed on standby, pending the opening of borders, perhaps in the coming weeks if the epidemic continues to decline. For the moment, the measures taken by the states on this subject are heterogeneous, which prevents a real restart of the trips abroad. Of course, Voyageurs du Monde will be able to count on a carryover effect on the French market, in particular on trekking. Unfortunately, this is not really the specialty of the company (only 4% of its turnover made in France). The favorable impact of deconfinement measures for tourism in France will amount to a few million euros, a marginal windfall effect at the group level which generated a turnover of 487.5 million euros in 2019, up + 4.6%, compared to a market down 2.9% according to statistics from the SETO professional union.
Uncertain scenario at this stage of the epidemic
By analyzing the fundamentals of Voyageurs du Monde, it is important to distinguish between short-term uncertainties and underlying trends, always favorable in terms of the deep aspirations of travelers, in search of new, unique and personalized experiences. There will therefore be a recovery. How often? Here is all the question. Regarding the landing of the 2020 accounts, the company executives evoke a break-even point at 230 million euros in revenue by including 50% partial unemployment, knowing that 70 million have already been recorded between January and the half-March. As for carryovers, they amount to around 200 million euros. It remains to be seen whether they will take place in the current year or in 2021. The most likely hypothesis at this stage – and that retained by the consensus of analysts – is that of a business volume of less than 200 million, leading to a net loss of a few tens of millions of euros. A shortfall that the group will have no trouble supporting with regard to cash which reached 130 million euros in April. In the post-crisis world, we can think that Voyageurs du Monde will be successful. Its offer meets the requirements and challenges of the moment: respect for the environment, individual travel, return to nature, distance from areas mass tourism, etc. 2021 should be a return to normal exercise with revenues expected to return to above 400 million. In this context, we can bet on a net profit of 15 million euros. A reasonable assumption capitalized 15 times today, which is very modest in terms of the potential for catching up on profits and the quality of the balance sheet. In a medium-term approach, it therefore seems interesting to take a position on this value or, if necessary, to strengthen the line.
Our advice: the current price offers a great opportunity to take a stand. Buy Voyageurs du Monde for 57 euros to aim for a return to 75 euros within 12-18 months. Isin code: FR0004045847.
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