Jacquet Metals: Well-Run Cyclical Leader Trading at Trough Multiple

Jeremie Couix of HC Capital Advisors presented his investment thesis on Jacquet Metals (France: JCQ) at European Investing Summit 2025.

Thesis summary:

Jacquet Metal is a small-cap French company and the European market leader (c. 25% share) in the niche business of specialty steel distribution. The company operates three divisions (Jacquet, Stappert, and IMS) focusing on stainless steel/nickel alloy quarto plates and long products, serving a diverse industrial customer base (65k customers) with minimal exposure (less than 5%) to automotive or construction. Jeremie highlights the business model, which combines centralized purchasing—providing a 2-3% cost advantage—with a decentralized network of over 65 local depots. The company bridges the gap between manufacturers (2-12 month lead times) and end-users (less than 1 week delivery), holding on average 3-4 months of inventory.

According to Jeremie, although the business is cyclical, it is exceptionally well-run by a management team (led by CEO Eric Jacquet, c. 48% owner) that has not incurred a loss since the 2011 merger with IMS. The company has generated a 12-13% annual TSR since 2011, driven by book value growth (from €11 to €32 per share) and an opportunistic dividend. The balance sheet is clean, with gearing steadily declining. Jeremie notes the business model benefits from inflation, as rising steel prices (especially nickel) expand margins on inventory held, which was evident in the high ROE (up to 28%) generated in 2021-2022.

A core part of the thesis presented by Jeremie is the company’s conservative accounting. Management consistently books high provisions against inventory (recently 19% of gross inventory) and operations, which smooths margins and EBITA. These total provisions (c. 140m on inventory) account for c. 30% of the company’s book value. Jeremie argues this suggests the stated book value might be underestimated by 20-30%. This prudence is paired with a contra-cyclical FCF generation profile; the company consumes cash (for WC) in boom years but generates high FCF during downturns.

Management deploys this contra-cyclical FCF effectively, pursuing M&A, growth CapEx (like land purchases), and share buybacks during down-cycles. Jeremie notes that since 2022, the company repurchased 13% of its capital (26% of the free float) at an average price of €15, below 0.5x P/BV. The shares recently traded at 0.5x-0.6x P/BV, which is at the low end of the historical range, comparable to 2011 and 2020 levels. The investment thesis anticipates a re-rating, with a reversion to a 1.0x-1.5x P/BV multiple, which Jeremie believes could lead to an expected IRR north of 25% per year.

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About the instructor:

Jeremie Couix is a co-founder and managing director of HC Capital Advisors based in Germany. Prior to co-founding HC Capital, he worked at Discover Capital as an investment analyst and later as co-portfolio advisor of the fund Squad Growth. Previously, he worked at FORUM Family Office, a value-oriented investment manager based in Munich. Jeremie graduated from EM Lyon Business School in France with an MSc in Management.