With its record IPO, SGTM chooses the Stock Exchange for sustainability

SGTM's IPO signifies the arrival of a major player in the real economy, particularly in a sector poised for upcoming public investment cycles. Founded in 1972 by brothers Ahmed and Mohamed Kabbaj, SGTM has thrived against the backdrop of a market dominated by foreign companies. Over fifty years later, the rationale behind the IPO is clear: it is not about "exiting," but rather about organizing the future. Following the IPO, historical shareholders will retain 80% of the capital, with the central goal being to institutionalize governance, attract new investors, and ensure the group's longevity beyond the founding generation. The group's debt is well-managed, primarily consisting of leasing related to equipment. In this context, a capital increase would have mainly resulted in "idle" excess cash, according to Idriss Berrada, CEO of Attijari Finances, the financial advisor for the operation. During a press conference, Hamza Kabbaj, CEO of SGTM, emphasized that the company does not have a true counterpart covering its entire range of activities. Beyond sector diversification, SGTM claims advanced technical integration. Notably, SGTM is currently the only Moroccan company to have delivered complete industrial units, including technological processes (such as cement plants and fertilizer factories), with all necessary skills developed in-house. This strategic position is timely as a cycle of investments in green hydrogen, desalination, renewables, and heavy industry looms. Financially, SGTM presents a narrative of continuity and robustness. The group reported revenues increasing from approximately 8.7 billion dirhams in 2022 to 10 billion in 2024, with a target of 14 billion in 2025. The EBITDA margin averaged around 17% over the past three years, with a projection of 16.9% for 2025. The adjusted net income (excluding non-recurring items) averaged 8.5% of revenue recently, with a target of 7.7% in 2025, equating to nearly 2 billion dirhams. The net debt stood at approximately 830 million dirhams at the end of 2024, corresponding to a gearing ratio of about 32%, projected to rise to 45% in 2025, indicating significant leverage capacity. The contractual order book amounts to 37 billion dirhams by 2028, with nearly 38% from public contracts, 60% semi-public, and 5% private. Visibility is strong: 2025 revenues are secured at 100%, 2026 at 72%, 2027 at 46%, and 2028 at 23%. The management emphasizes the conservative nature of these projections, based on growth assumptions lower than those anticipated for the entire sector. Regarding working capital management, a critical issue in the construction sector, SGTM outlines a range of tools: contractual advance payments on a significant portion of projects, traditional bank pre-financing schemes backed by market pledges, and more innovative approaches such as "project bonds" for major projects like the Dakhla port. Another notable aspect of this IPO is its structure. It involves 20% of the capital, sold by the Kabbaj family, with a valuation of 26.7 billion dirhams (445 dirhams per share according to the DCF method) and an introductory price set at 420 dirhams, with discounts for individuals (subscriptions under 5 million dirhams) and employees. Ultimately, nearly 60% of the operation is reserved for individuals, an unprecedented ratio for an IPO of this size on the Casablanca market. This opening occurs within a macroeconomic context described as a "historic investment cycle," with over 1 trillion dirhams in public investments planned by 2031, a rise in major industrial and energy programs, and a strong projection of Moroccan expertise in Africa and regional markets, according to SGTM's top management. This operation is expected to provide a much-needed boost to the Casablanca market as the year comes to a close, where activity has somewhat slowed.