Mr. Bricolage SA: Financial analysis

Résumé du document

Mr. Bricolage is a French company which offers Do-It-Yourself (DIY) products and services. The Group has been created officially in 1980, in Fleury-les-Aubrais. At the origin, in 1955, different stores of DIY were created, especially in the North of France. In 1965, the Association Nationale des Promoteurs du Faites-le-vous-même; was founded in order to gather the different brands of DIY in France, to reduce the purchases costs and to select “the best products at the best prices”. In 1980, the ANPF decided to gather all the DIY stores of the different members under the brand Mr. Bricolage. It is quoted at Nyse-Euronext in 2000. Nowadays, it owns 700 stores, among which 50 are located abroad, and 12000 employees work for them, under the direction of Mr. Jean-François Boucher. Today, its turnover achieved the 2.2 billions euros and its market shares reach 12.4%.

As its sales surface reaches 600m² in average, it belongs to the middle-size DIY surfaces segment. The company became recently the leader on this segment in buying two brands of DIY in 2009: “Les Briconautes” and “Les Jardinautes”. These purchases highlighted the strategy of expansion, already expressed with the progressive transformation of Catena stores in Mr. Bricolage stores for seven years. The main strategic stakes with these operations are based on the long-term, the objectives are gaining market shares, and increasing their turnover. To finance these investments, Mr. Bricolage launches a bond debt of 47,8 millions euros in 2009.

Extraits

[...] Bricolage Mr. Bricolage is a French company which offers Do-It-Yourself (DIY) products and services. The Group has been created officially in 1980, in Fleury-les-Aubrais. At the origin, in 1955, different stores of DIY were created, especially in the North of France. In 1965, the Association Nationale des Promoteurs du Faites-le-vous-même was founded in order to gather the different brands of DIY in France, to reduce the purchases costs and to select best products at the best prices”. In 1980, the ANPF decided to gather all the DIY stores of the different members under the brand Mr. [...]

[...] Bricolage finances most of its assets through debt. So, the company is exposed to the movement of interest rates in particular. The debt to equity ratio is a measure of a company's leverage, to know how much financing it has in the form of debt as compared with how much it has invested in the business. To quantify this, we use the following ratio : Debt-equity ratio = total liabilities / total owners' equity Total owners' equity (in million euros) 2007 = = Debt-equity ratio = / = The debt repayment terms are another consideration. [...]

[...] So we can say that the company has a low turnover in 2008)1. The pleasant working conditions are in accordance with the developed values in the Group. In the website, we can see the 5 values: Customer, satisfaction, success, team work spirit, services. These characteristics have a direct and positive impact on market growth. This is a great and safe source of revenue. Indeed, in 2008, Mr. Bricolage had a turnover of 513,3 millions euros. It represents an increase of compared to the last year. [...]

[...] Bricolage to Kingfisher, Mr. Bricolage can be seen as a very profitable company which has increased its ROA from 2007 to 2008 while the ROA of Kingfisher has decreased. We assume that the management of the company Mr. Bricolage is more efficient at using its assets to generate earnings. Return on equity Mr. Bricolage Kingfisher The ratio of ROE shows how well Mr. Bricolage is at employing the investors' capital invested in the company, in comparison to Kingfisher. We deduce that Mr. [...]

[...] Bricolage appears as a solvent company able to resort successfully to debt financing. Indeed, resorting to debt is a big part of its financial strategy and the company succeeds in meeting its financial long-term obligations. Profitability ratios We have seen that liquidity and solvency ratios tell us about the company ability to meet its immediate and long-term obligations. Now we extend our analysis by adding profitability ratios which help us gauge how well the firm is managing its expenses. Measures of profitability will be important for several reasons; first, to be sure that the firm is able to generate and sustain profits from which to distribute dividends and then because profitability affects the company's liquidity and solvency. [...]