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ESN Analyser
Investment Research
Page 1 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
ESN Analyser
Investment Research
DEAR CLIENT,
INVITATION
“31st ESN EUROPEAN CONFERENCE”
London, 13 December 2016
Merchant Taylors’ Hall (30 Threadneedle Street, London, EC2R 8JB)
Companies available for one-to-one meetings Please consult the ESN website conference dedicated page
http://www.esnpartnership.eu/conferences/actual
ESN Top Picks
Roadshows
Corporate Events
Tactical Sector Views
ESN European Top Picks
POSTE ITALIANE (IN)- BLUE CHIPS
RECOMMENDATION CHANGES
SRV Buy from Accumulate On a strong earnings growth path
F-Secure Accumulate from Neutral Growth momentum is building up
NEWS BY SECTOR
AEROSPACE & DEFENSE
Leonardo (Buy) Q3 results: P&L disappointed a bit, Net Debt did well indeed
AUTOMOBILES & PARTS
Bittium Corporation (Accumulate) Story unchanged for the next few years
BMW (Accumulate) Solid Q3 2016 results
BANKS
Commerzbank (Buy) Q3 better than expected on net profit level
Intesa Sanpaolo (Accumulate) Q3 16 results preview
Poste Italiane (Accumulate) Pioneer: the new-co could be listed
BASIC RESOURCES
Altri (Buy) 3Q16 results comment: high margin despite falling pulp prices
Corticeira Amorim (Accumulate) Sale of 10% of share capital through ABB
Outokumpu (Accumulate) Earnings turnaround progressing
ESN Analyser
Investment Research
Page 2 of 59
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ELECTRONIC & ELECTRICAL EQUIPMENT
Nexans (Accumulate) Less favourable activity in Q3
FINANCIAL SERVICES
Azimut (Accumulate) New little acquisition in Australia
CapMan (Neutral) Norvestia merger strengthens the profile
FOOD & BEVERAGE
Coca Cola HBC AG (Neutral) 3Q16 conference call highlights
KWS Saat (Buy) KWS Saat: For 160 years in business and still thriving
FOOD & DRUG RETAILERS
Sonae (Buy) 9M16 results preview – sales pick up expected
Sonae (Buy) Sonae Sierra’s 9M16 results – higher indirect results
INDUSTRIAL ENGINEERING
Sector News Global ship market – decline stabilising
Duro Felguera (Neutral) 3Q’16 results
Technotrans (Accumulate) Sale of treasury stock – no material impact
INSURANCE
AXA (Buy) A more demanding climate for Savings activities
Banca Mediolanum (Accumulate) A part of Mr Berlusconi’s voting rights was suspended
Sampo (Accumulate) Additional support from Topdanmark to the dividend flow
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Ferrovial (Accumulate) Best proposal for I-66
LafargeHolcim (Buy) Q3 a bit better than expected
SRV (Buy) On a strong earnings growth path
Titan Cement (Accumulate) Solid performance in 3Q16, bottom line boosted by one-off tax
Vicat (Accumulate) Q3 in line but guidance revised down
MEDIA
Sector News SPAIN: October audience/targets. A3M positive
JCDecaux (Accumulate) Q3 revenues: an organic contraction in Q4
Ubisoft (Neutral) H1 2016/17 results: EBIT guidance revised upwards
OIL & GAS PRODUCERS
Repsol (Buy) Details from the 3Q results conference call
OIL SERVICES
Tenaris (Neutral) Better than expected margins in Q3
PERSONAL GOODS
adidas (Sell) Great Q3 underpins strong current year forecast
Hermès Intl. (Neutral) Feedback from the conference call on Q3 revenues
L’Oréal (Reduce) Q3 revenues slightly higher than expectations
ESN Analyser
Investment Research
Page 3 of 59
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REAL ESTATE
Beni Stabili (Accumulate) Rental income sizeably down as expected
Sponda (Accumulate) Q3 results matched expectations and a technical guidance upgrade
SOFTWARE & COMPUTER SERVICES
F-Secure (Accumulate) Growth momentum is building up
SUPPORT SERVICES
Ei Towers (Accumulate) 9m 2016 Post: solid results
Fiera Milano (Accumulate) Improvement expected in Q3 2016
TELECOMMUNICATIONS
Sector News SPAIN: Orange changes its commercial strategy
Vodafone (Accumulate) H1 2016 Pre: we expect good results
UTILITIES
EDP (Accumulate) 9M16 results in line with expectations
Snam (Neutral) On the gas!
Terna (Neutral) We expect resilient results in 9M 2016 Y/Y
ESN Top Picks
Page 4 of 59
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Blue Chips Top Picks
Compa ny Count r y S e c t or I de a Ra t i ngP r i c e a s of
0 3 / 11/ 2 0 16
Ta r ge t
P r i c e
Upsi de /
Downsi deEnt r y da t e
Ent r y
pr i c e
Ent r y
pr i c e
( D i v .
Adj )
Tot a l
Re t ur n
Ent r y To
Da t e
Re l . Cml . d
pe r f . v s Eur o
S t ox x
AM ADEUS Spain Sof t ware & Comput er Services Long Buy 40.96 49.20 20% 18/ 08/ 2016 41.96 41.96 - 2 . 4 % -1.8%
CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 63.10 76.00 20% 17/ 10/ 2016 66.30 66.30 - 4 . 8 % -3.1%
HEI NEKEN Net herlands Food & Beverage Long Buy 73.22 100.00 37% 25/ 05/ 2016 83.08 82.56 - 11. 3 % -10.7%
I NDI TEX Spain General Ret ailers Long Accumulat e 31.12 36.10 16% 18/ 08/ 2016 30.93 30.93 0 . 6 % 1.2%
J CDECAUX France Media Long Accumulat e 26.98 31.00 15% 17/ 10/ 2016 28.16 28.16 - 4 . 2 % -2.4%
KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.86 3.55 24% 20/ 09/ 2016 2.82 2.82 1. 1% 1.6%
P OS TE I TALI ANE It aly Banks Long Accumulat e 6.02 7.90 31% 03/ 11/ 2016 5.96 5.96 1. 0 % 1.2%
RELX Net herlands Media Long Accumulat e 14.72 16.75 14% 27/ 10/ 2016 15.14 15.14 - 2 . 8 % 0.4%
S TORA ENS O Finland Basic Resources Long Accumulat e 8.50 9.30 9% 17/ 10/ 2016 8.16 8.16 4 . 1% 5.9%
TECHNI P France Oil Services Long Buy 59.25 67.00 13% 18/ 10/ 2016 58.60 58.60 1. 1% 2.4% source: ESN Members’ estimates
M/S Caps Top Picks
Compa ny Count r y S e c t or I de a Ra t i ngP r i c e a s of
0 3 / 11/ 2 0 16
Ta r ge t
P r i c e
Upsi de /
Downsi deEnt r y da t e
Ent r y
pr i c e
Ent r y pr i c e
( D i v . Adj )
Tot a l
Re t ur n
Ent r y To
Da t e
Re l . Cml . d
pe r f . v s
Eur o
S t ox x
ACERI NOX Spain Basic Resources Long Buy 10.79 14.00 30% 18/ 08/ 2016 11.71 11.71 - 7 . 9 % -7.2%
ALTRAN France Sof t ware & Comput er Services Long Buy 12.83 15.00 17% 17/ 10/ 2016 13.20 13.20 - 2 . 8 % -1.1%
CAF Spain Indust r ial Transport at ion Long Accumulat e 337.50 390.00 16% 18/ 08/ 2016 342.80 342.80 - 1. 5 % -0.9%
DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.15 12.30 34% 22/ 08/ 2016 8.10 8.10 13 . 0 % 13.4%
FORFARM ERS Net herlands Food & Beverage Long Buy 6.82 8.30 22% 28/ 09/ 2016 6.48 6.48 5 . 3 % 5.8%
FUGRO Net herlands Oil Services Long Buy 15.24 19.00 25% 20/ 10/ 2016 15.56 15.56 - 2 . 1% 0.8%
J UM BO Greece General Ret ailers Long Buy 12.15 14.99 23% 21/ 10/ 2016 12.62 12.62 - 3 . 7 % -0.4%
NH HOTEL GROUP Spain Travel & Leisure Long Buy 3.99 6.80 71% 18/ 08/ 2016 4.00 4.00 - 0 . 4 % 0.2%
NOS Port ugal Telecommunicat ions Long Buy 5.86 7.00 19% 17/ 10/ 2016 5.89 5.89 - 0 . 5 % 1.2%
OP AP Greece Travel & Leisure Long Buy 8.34 9.60 15% 28/ 06/ 2016 5.98 5.86 4 2 . 3 % 31.5%
RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 12.25 14.00 14% 20/ 06/ 2016 8.29 8.29 4 7 . 8 % 43.0%
TECHNOGYM It aly Personal Goods Long Buy 3.97 4.95 25% 15/ 06/ 2016 3.78 3.78 5 . 0 % -1.4%
THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.58 4.60 78% 22/ 06/ 2016 2.72 2.72 - 5 . 1% -6.0%
YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 25.12 31.30 25% 17/ 10/ 2016 27.82 27.82 - 9 . 7 % -7.9%
source: ESN Members’ estimates
This selection of stocks is not intended to provide a recommended portfolio; therefore there is no point in comparing its performance with any benchmark. The performance of each stock has to be considered independently. Risk factors are taken into account when selecting individual stocks but the risk profile of the selection as a whole is not considered. The approach used to select each investment idea is opportunistic with an absolute return target.
ESN Top Picks
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POSTE ITALIANE (IN)- BLUE CHIPS
Insurance and financial services are likely to play a key role in focusing and diversifying the offer on more profitable and
marketable products, such as asset management services and P&C (Non-Auto). The huge amount of money managed (c.
EUR 476bn at the end of 2015), the capillarity of the distribution network and one of the largest client bases in Italy, ought to
underpin the upside in the medium term. We believe the expected EPS adj. growth (c. 10.1% in 2016 -2018) can be bought
at a reasonable price (Adj. P/E 2016 and 2017 at c. 10x and 8.3x respectively). Poste could also consider some acquisitions
in the parcel business - to support the expected growth in e-commerce and mitigate the price pressure - and in payment
platform operators, to ride the digital revolution ahead. The real estate assets could act as further hidden value in the long
term. We estimate an operating profit of c. EUR 1.3bn in 2018 (CAGR 14.5%), driven by the sizable contribution from the
expected turnaround in the mail and parcel business unit and thanks to the insurance division. We estimate a Net profit adj.
of EUR 1.1bn in 2018 (CAGR 10.1%), which is likely to lead to a ROE Adj of 10.7% in 2018 from 8.5% in 2015. We expect an
average DPS of .c EUR 0.43 in 2016 -2018, which corresponds to an average annual yield of c. 7% in the next three years.
By applying the SOP approach, we obtained a TP of EUR 7.9 per share. The offer on Pioneer is still pending: if the priced
offered is near EUR 4bn, the stock could react negatively in the short term, although we believe the acquisition could create
value in the medium term. The delivery of the plan and its execution remain the main risks.
Roadshows
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SUBJECT LOCATION EVENT DATE
EDENRED Geneva Cross-country Company Roadshow 09/11/2016
EDENRED Zurich Cross-country Company Roadshow 10/11/2016
Mediaset España Madrid Local Company Roadshow 10/11/2016
Kemira Lisboa Cross-country Company Roadshow 11/11/2016
Corporate Events
Page 7 of 59
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Corporate Events today
Source: Precise
CompanyBloomberg
codeDate Event Type Description
ACCIONA ANA SM 04/11/16 Results Q3 2016 Results
AMADEUS AMS SM 04/11/16 Results Q3 2016 Results
AMS SM 04/11/16 Results Q3 2016 Webcast
AXA CS FP 04/11/16 Trading Update Q3 2016 Activity Indicators
BMW BMW GR 04/11/16 Results Q3 2016 Results
BMW GR 04/11/16 Results Q3 2016 Earnings conference call {analyst}
BMW GR 04/11/16 Results Q3 2016 Earnings conference call {press}
CIE FIN. RICHEMONT CFR VX 04/11/16 Analyst Meeting Interim 2017 Webcast
CFR VX 04/11/16 Results Interim 2017 Results
COMMERZBANK CBK GR 04/11/16 Results Q3 2016 Results
CBK GR 04/11/16 Results Q3 2016 Earnings conference call / Webcast
EDP EDP PL 04/11/16 Results Q3 2016 Earnings conference call / Webcast
FIERA MILANO FM IM 04/11/16 Results Q3 2016 Results
INTESA SANPAOLO ISP IM 04/11/16 Results Q3 2016 Results
ISP IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast
JUMBO BELA GA 04/11/16 Ex Dividend Date Full year 2016 Ex-dividend date - proposed EUR 0.27
LAFARGEHOLCIM LHN VX 04/11/16 Results Q3 2016 Results
LEONARDO LDO IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast
NEXANS NEX FP 04/11/16 Trading Update Q3 2016 Sales
OTE HTO GA 04/11/16 AGM EGM - 2nd call {if required} re framework cooperation & service agreement for provision by OTE SA to Deutsche Telekom Pan-Net SRO
RAMIRENT RMR1V FH 04/11/16 Analyst Meeting Q3 2016 Press & analyst meeting / Webcast
RMR1V FH 04/11/16 Results Q3 2016 Results
REN RENE PL 04/11/16 Results Q3 2016 Results
RHOEN-KLINIKUM RHK GR 04/11/16 Results Q3 2016 Earnings conference call / Webcast
RHK GR 04/11/16 Results Q3 2016 Results
SONAE CAPITAL SONC PL 04/11/16 Results Q3 2016 Results
SPONDA SDA1V FH 04/11/16 Results Q3 2016 Results
SDA1V FH 04/11/16 Results Q3 2016 Earnings conference call / Webcast
TENARIS TEN IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast
TERNA TRN IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast
TRN IM 04/11/16 Results Q3 2016 Results
VICAT VCT FP 04/11/16 Trading Update Q3 2016 Sales conference call
ESN Tactical Sector Views
Page 8 of 59
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Tactical Sector Allocation Matrix July 2016
SectorCurrent Tactical
ViewAction
Previous
Tactical View
Stoxx 600
Weighting
LATEST REVIEW
DATE
Automobiles & Parts + upgrade = 3% Jul-16
Banks - - 10% Jul-16
Basic Resources = = 2% Jul-16
Chemicals = = 5% Jul-16
Construction & Materials + + 3% Jul-16
Financial Services - dow ngrade = 2% Jul-16
Food & Beverage + + 7% Jul-16
Healthcare + upgrade = 14% Jul-16
Industrial Good & Services + upgrade = 11% Jul-16
Insurance - dow ngrade + 6% Jul-16
Media - dow ngrade = 3% Jul-16
Oil & Gas = = 5% Jul-16
Personal & Household Goods + + 9% Jul-16
Real Estate + upgrade - 2% Jul-16
Retail - dow ngrade = 3% Jul-16
Technology + upgrade = 4% Jul-16
Telecommunications = dow ngrade + 5% Jul-16
Travel & Leisure + + 2% Jul-16
Utilities + upgrade - 4% Jul-16
Legend: + (Overw eight); =/+ (Slightly Overw eight); = (Market Weight); =/- (Slightly Underw eight); - (Underw eight);
Note: The tactical sector view is the shorter term trading view of the ESN strategy team and it can vary from the longer term
fundamental view of the relevant ESN sector analyst team
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Leonardo
Italy/Aerospace & Defense Analyser
AEROSPACE & DEFENSE
Leonardo (Buy) Q3 results: P&L disappointed a bit, Net Debt did well indeed
Q3 results: P&L disappointed a bit, Net Debt did well indeed
The facts: LDO released bang in line Q3 results yesterday after trading hours.
LDO kept its FY16 guidance unchanged (new orders: ~EUR 20bn; revenues:
EUR 12.2/12.7bn; EBITA: EUR 1.22/1.27bn; FOCF at EUR 500/600m; Net Debt
at ~EUR 2.8bn).
The management is due to hold a conference call at 09.00 am (Italy: + 39 02
8020911; UK: + 44 1 212 818004; USA: + 1 718 7058796)
Our analysis: new orders (~EUR 2.6bn, +17% Y/Y) beat our estimates (EUR
2.2bn); revenues (~EUR 2.6bn, ~-13% Y/Y) were ~6% lower than expected;
EBITA (EUR 274m, -7% Y/Y) was ~6% below our estimates (EUR 293m) and
Adj. net profit (EUR 143m, +84% Y/Y) was better than expected (EUR 126m)
mainly thanks to lower financial charges.
Net Debt (~EUR 3.9bn) improved by ~EUR 0.3bn Q/Q beating our expectations
(~EUR 4.2bn), thanks to an advance payment by Kuwait (EUR 0.2bn) and better
cash generation while the negative impact from the devaluation of the UK Pound
weighed for EUR 180m. Here follow more details on Q3 results:
- Helicopters: new orders hit EUR 580m (~-7% Y/Y and -47% YTD);
revenues fell ~22% Y/Y (-20% YTD) and EBITA reached EUR 83m (-31%
Y/Y) with a 9.7% margin (-130 b.ps Y/Y). We had expected revenues to
come in at EUR 951m and EBITA to reach EUR 100m.
- Defence Electronics: new orders reached EUR 1.75bn (~+63% Y/Y);
revenues came in at EUR 1.1bn (-8.5% Y/Y) and EBITA hit EUR 92m (~-
14% Y/Y) at 8.1% of revenues (-60 b.ps Y/Y). We had expected revenues
of EUR 1.13bn and an EBITA of EUR 116m.
- Aeronautics: new orders came in at ~EUR 568m (~-46% Y/Y), revenues
reached EUR 681m (~-6% Y/Y) and EBITA was EUR 83m (~+8% Y/Y) at
~12% of revenues (+160 b.ps Y/Y). We had expected revenues of EUR
681m and an EBITA of EUR 82m.
- Space: EBITA improved to EUR 14m (EUR 5m in Q3 2015), better than
our estimate of EUR 7m.
The performance of the helicopter and defence electronics businesses came
short of our estimates, which were higher than consensus.
When it comes to helicopters, the reference scenario remains challenging,
although now orders remained flat Q/Q and fell "only" 7% Y/Y; in addition, we
stress that the GBP devaluation should have weighed for at least 3 or 4% Y/Y on
revenues. When dealing with Defence Electronics, we argue that the margin
softening derived from DRS, the US subsidiary, for a mix reason.
Conclusion & Action: Q3 P&L results were broadly in line with consensus, but
lower than our own estimates; Net Debt was surprisingly low in comparison with
our and consensus' estimates. The helicopter business deterioration went on, but
it seems that the scenario is improving, little by little. We will wait the conference
call to possibly tune our estimates.
Analyst(s):
Gabriele Gambarova, Banca Akros
gabriele.gambarova@bancaakros.it
+39 02 43 444 289
Buy
10.82
closing price as of 03/11/2016
15.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg LDOF.MI/LDO IM
Market capitalisation (EURm) 6,256
Current N° of shares (m) 578
Free float 64%
Daily avg. no. trad. sh. 12 mth 2,940
Daily avg. trad. vol. 12 mth (m) 25,144
Price high 12 mth (EUR) 13.71
Price low 12 mth (EUR) 8.38
Abs. perf. 1 mth 8.53%
Abs. perf. 3 mth 14.50%
Abs. perf. 12 mth -8.23%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 12,995 12,576 12,938
EBITDA (m) 1,668 1,683 1,846
EBITDA margin 12.8% 13.4% 14.3%
EBIT (m) 884 1,002 1,169
EBIT margin 6.8% 8.0% 9.0%
Net Profit (adj.)(m) 524 637 597
ROCE 6.7% 7.4% 7.6%
Net debt/(cash) (m) 3,278 2,655 2,072
Net Debt/Equity 0.8 0.6 0.4
Debt/EBITDA 2.0 1.6 1.1
Int. cover(EBITDA/Fin. int) 3.8 4.5 5.1
EV/Sales 0.7 0.5 0.5
EV/EBITDA 5.2 4.0 3.4
EV/EBITDA (adj.) 4.6 3.7 3.3
EV/EBIT 9.8 6.8 5.4
P/E (adj.) 14.2 9.8 10.5
P/BV 1.7 1.3 1.2
OpFCF yield 9.9% 9.9% 13.2%
Dividend yield 0.0% 2.3% 2.6%
EPS (adj.) 0.91 1.10 1.03
BVPS 7.40 8.18 8.80
DPS 0.00 0.25 0.28
8
9
10
11
12
13
14
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
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LEONARDO Stoxx Aerospace & Defense (Rebased)Source: Factset
Shareholders: Italian Government 32%; Norges Bank
2%; Libyan Investment Authority 2%;
Page 10 of 59
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Bittium Group
Q3 2015a
M€ Q3a OP Cons. Diff. OP Cons. Diff.
Sales 14.1 14.8 12.9 15% 0 11.1 0 62 64 -2%
EBIT 0.9 1.3 0.4 271% # 0.0 0 2.3 3.1 -26%
EBIT margin 6.4 % 8.8 % 2.7 % 0.0 % # 0.0 % # 3.7 % 4.9 %
PTP 1.1 1.5 0.5 233% 0 0.1 0 2.9 3.8 -24%
EPS 0.03 0.04 0.01 300% 0.00 0.08 0.10 -21%
DPS 0.00 0.30 0.30 # 0.03 # 0.04 0.07 -41%
Source: OP and FactSet
2016eQ3 2016e
Bittium Corporation
Finland/Automobiles & Parts Analyser
AUTOMOBILES & PARTS
Bittium Corporation (Accumulate) Q3 results: P&L disappointed a bit, Net Debt did well indeed
Story unchanged for the next few years
The facts: Bittium's Q3 results were in line with our forecasts but topped
consensus expectations. The growth of service business (+36.8% YoY) was
supported by the device designs for the MEXSAT project. As regards equipment,
a device delivery to a US client as well as an order from the Finnish Defence
Forces took place in the comparison period, and the equipment business
therefore declined 8%. According to the company, the trend in equipment
business largely met expectations. The good profitability in Q3 was also impacted
by the lower costs during the holiday quarter.
Our analysis: Bittium keeps its sales guidance unchanged and expects 2016 net
sales to grow from 2015 (EUR 56.8m). In connection with the Q3 results the
company also issued EBIT guidance for 2016 for the first time. Bittium expects
EBIT to be at the same level as in 2015 (EUR 2.3m). On the basis of the
guidance, the company’s sales in Q4 will be at least EUR 11m and EBIT will be
around EUR 0.70m. The company justifies the drop in Q4 EBIT with the costs
relating to defining its new strategy as well as high R&D expenses. The R&D
costs relate to the development of the company's secure smartphone and IoT
products. Bittium also repeated its estimate of strong growth in equipment sales
in 2017.
Bittium's potential deals are large compared to its size and the negotiations take a
long time. It is challenging to predict the timing of deals. We expect the phone
deliveries for the MEXSAT project to start during 2017 and to underpin equipment
sales. At maximum 150,000 devices will be connected to the MEXSAT system,
and Bittium will deliver at least part of them. The company is also negotiating on
some projects relating to tactical communication systems.
Conclusion & Action: Our biggest forecast revision concerns the EBIT forecast
for 2016, which fell from EUR 4m to EUR 2.3m after the profitability guidance. We
have not made any significant revisions to our forecasts for 2017 and 2018. We
maintain our target price at EUR 6.60. Our recommendation is Accumulate
Analyst(s):
Hannu Rauhala, OP Corporate Bank
hannu.rauhala@op.fi
+358 10 252 4392
Accumulate
5.82
closing price as of 03/11/2016
6.60
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg BITTI.HE/BITTI FH
Market capitalisation (EURm) 208
Current N° of shares (m) 36
Free float 86%
Daily avg. no. trad. sh. 12 mth 92
Daily avg. trad. vol. 12 mth (m) 693
Price high 12 mth (EUR) 7.54
Price low 12 mth (EUR) 5.17
Abs. perf. 1 mth -12.87%
Abs. perf. 3 mth -3.00%
Abs. perf. 12 mth -5.06%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 57 64 69
EBITDA (m) 8 10 11
EBITDA margin 13.2% 15.1% 16.6%
EBIT (m) 2 4 7
EBIT margin 4.1% 6.3% 9.6%
Net Profit (adj.)(m) 536 4 6
ROCE 10.2% 10.0% 15.0%
Net debt/(cash) (m) (122) (110) (110)
Net Debt/Equity -0.9 -0.8 -0.8
Debt/EBITDA -16.2 -11.5 -9.6
Int. cover(EBITDA/Fin. int) high high high
EV/Sales 2.2 1.5 1.4
EV/EBITDA 17.0 10.0 8.3
EV/EBITDA (adj.) 17.0 10.0 8.3
EV/EBIT 55.4 24.1 14.3
P/E (adj.) 0.5 48.8 32.1
P/BV 1.8 1.5 1.4
OpFCF yield 3.8% -4.4% 1.1%
Dividend yield 5.2% 1.0% 1.6%
EPS (adj.) 15.06 0.12 0.18
BVPS 3.86 3.92 4.04
DPS 0.30 0.06 0.09
5.0
5.5
6.0
6.5
7.0
7.5
8.0
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
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BITTIUM CORPORATION OMXH (Rebased)Source: Factset
Shareholders: Harju Jukka 5%; Hulkko Juha 5%;
Veikkolainen Erkki 4%;
Page 11 of 59
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BMW
Germany/Automobiles & Parts Analyser
AUTOMOBILES & PARTS
BMW (Accumulate) Story unchanged for the next few years
Solid Q3 2016 results
The facts: BMW reported a set of Q3 2016 results, which was operationally in
line with expectations. On a pre-tax and net profit basis results were better than
expected as the financial result turned positive.
Our analysis: As the financial result is fluctuating heavily due to fair value
adjustments of derivatives this should however not be in the focus of investors.
Earning quality looks ok at first glance. Production topped deliveries to customers
only marginally (and less than in Q3 2015). Operating cashflow in the Automobile
segment increased by 5.5% yoy and thus stronger than the operating result.
The guidance for 2016 was confirmed. BMW continues to target an increase in
deliveries to customers in the Automotive segment as well as a slight increase of
group pretax profit to a new record number and EBIT margin in the Automobile
segment of 8-10%.
Conclusion & Action: BMW continues to development pretty solidly in a year
which is difficult to a weakness in the model cycle. We expect the model cycle to
turn and become more positive in FY 2017, which would also help to improve the
relative momentum to the competition.
Analyst(s):
Tim Schuldt, CFA, equinet Bank
tim.schuldt@equinet-ag.de
+49 69 5899 7433
Accumulate
75,23
closing price as of 03/11/2016
96,00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg BMWG.DE/BMW GR
Market capitalisation (EURm) 49.388
Current N° of shares (m) 656
Free float 57%
Daily avg. no. trad. sh. 12 mth 1.734
Daily avg. trad. vol. 12 mth (m) 108.574
Price high 12 mth (EUR) 103,30
Price low 12 mth (EUR) 65,10
Abs. perf. 1 mth 0,56%
Abs. perf. 3 mth -0,77%
Abs. perf. 12 mth -19,60%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 92.175 96.404 99.073
EBITDA (m) 14.150 15.468 16.227
EBITDA margin 15,4% 16,0% 16,4%
EBIT (m) 9.464 10.088 10.542
EBIT margin 10,3% 10,5% 10,6%
Net Profit (adj.)(m) 6.369 6.427 6.777
ROCE 20,6% 21,2% 21,1%
Net debt/(cash) (m) (17.712) (18.800) (20.420)
Net Debt/Equity -0,4 -0,4 -0,4
Debt/EBITDA -1,3 -1,2 -1,3
Int. cover(EBITDA/Fin. int) 38,3 25,8 35,3
EV/Sales 0,5 0,3 0,3
EV/EBITDA 3,3 2,0 1,8
EV/EBITDA (adj.) 3,3 2,0 1,8
EV/EBIT 5,0 3,1 2,8
P/E (adj.) 10,1 7,7 7,3
P/BV 1,5 1,1 1,0
OpFCF yield -7,7% 12,3% 12,0%
Dividend yield 4,3% 4,5% 5,0%
EPS (adj.) 9,70 9,79 10,32
BVPS 64,81 71,45 78,48
DPS 3,20 3,35 3,75
65
70
75
80
85
90
95
100
105
Okt 15 Nov 15 Dez 15 Jan 16 Feb 16 Mrz 16 Apr 16 Mai 16 Jun 16 Jul 16 Aug 16 Sep 16 Okt 16 Nov 16
vvdsvdvsdy
BMW Stoxx Automobiles & Parts (Rebased)Source: Factset
Shareholders: Stefan Quandt 16%; Johanna Quandt
15%; Susanne Klatten 12%;
BMW - Review Q3 2016
EUR m Q3 2016 Q3 2015 % YoY equinet Delta Cons. Delta
Revenues 23.362,0 22.345,0 4,6% 22.211 5,2% 23.205 0,7%
- BMW Automobiles 21.564,0 20.970,0 2,8% 20.760 3,9% 21.670 -0,5%
- Motorcycles 451,0 454,0 -0,7% 468 -3,6% 463 -2,6%
- Financial Services 6.403,0 5.621,0 13,9% 5.846 9,5% 5.861 9,2%
- Consolidation -5.056,0 -4.700,0 7,6% -4.863 4,0% -4.789 5,6%
EBIT 2.380,0 2.354,0 1,1% 2.301 3,4% 2.347 1,4%
EBIT Margin 10,2% 10,5% -35 BP 10,4% -17 BP 10,1% 7 BP
- BMW Automobiles 1.837,0 1.912,0 -3,9% 1.855 -0,9% 1.898 -3,2%
- Motorcycles 32,0 46,0 -30,4% 41 -22,7% 39 -17,9%
- Financial Services 576,0 465,0 23,9% 488 18,0% 471 22,3%
- Consolidation -65,0 -69,0 -5,8% -83 -21,7% -61 6,6%
EBT 2.575,0 2.263,0 13,8% 2.266 13,6% 2.307 11,6%
EBIT Margin 11,0% 10,1% 89 BP 10,2% 82 BP 9,9% 108 BP
Net income 1.821,0 1.579,0 15,3% 1.640 11,0% 1.670 9,0%
Source: BM W, equinet Research
Page 12 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Commerzbank
Germany/Banks Analyser
BANKS
Commerzbank (Buy) Solid Q3 2016 results
Q3 better than expected on net profit level
The facts: Commerzbank reported a net loss of EUR 288m for Q3 which was
however better than expected (equinet: EUR -442m) due to lower taxes, higher
other revenues and a lower goodwill write-down. Underlying profit development
was slightly lower than expected. The combined Net Interest Income & Trading
Profit figure was with EUR 1,508m EUR 120m below our forecast, while risk
provisions came in slightly lower (delta of EUR 25m), costs slightly higher than
forecasted (delta of EUR 33m) and commission income was in line with
expectations. Positively, the CT1 ratio increased by 30 bp’s qoq to 11.8%. CBK
sticks to its 2016e target of a achieving a slightly net profit and keeping risk
provisions below EUR 1bn. CT1 ratio should rise to around 12%.
Our analysis:
Other revenues/expenses amounted to EUR 97m in Q3 and were thus higher
than expected (EUR 0m), while at the same time goodwill write-down was with
EUR 627m below our forecast of EUR 700m as well. Last but not least the tax
payment was with EUR 14m well below our forecast of EUR 100m.
Segments: In PC operating profit declined by 8% yoy to EUR 209m due to lower
revenues (-4% yoy). CIR deteriorated by 3%-pts. yoy to 78%. In MSB operating
results remained stable yoy at EUR 229m. Higher risk provisions were offset by
valuation effects. In CEE the operating profit declined by 41% yoy to EUR 57m
due to higher costs (mainly the impact of the Polish banking tax). In Corporates &
Markets the operating result increased by 53% yoy to EUR 104m due to a
positive delta of valuation effects (OCS, FVA and CVA/DVA) and lower costs
while risk provisions more than doubled yoy. ACR showed a loss of EUR 108m
due to a sharp rise in risk provisions to EUR 147m. Positively, the Shipping
Exposure declined by 7% qoq to EUR 5.0bn.
Conclusion & Action: Q3 results were better than expected due to lower than
expected taxes and a less negative impact from one-offs. Positively, the CT1 ratio
improved by 30 bp’s qoq to 11.8%. We stick to our Buy rating with a target price
of EUR 7.50 on the back of CBK’s low valuation – 2017e P/BV of 0.3x is too low
in our view and does not reflect the bank’s earnings recovery potential in the mid-
term.
Analyst(s):
Philipp Häßler, CFA, equinet Bank
philipp.haessler@equinet-ag.de
+49 69 58997 414
Buy
6.07
closing price as of 03/11/2016
7.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CBKG.DE/CBK GR
Market capitalisation (EURm) 7,601
Current N° of shares (m) 1,252
Free float 83%
Daily avg. no. trad. sh. 12 mth 10,790
Daily avg. trad. vol. 12 mth (m) 71,395
Price high 12 mth (EUR) 10.73
Price low 12 mth (EUR) 5.20
Abs. perf. 1 mth 5.77%
Abs. perf. 3 mth 16.73%
Abs. perf. 12 mth -42.85%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 9,762 8,919 8,976
Pre-Provision Profit (PPP) (m) 2,605 1,744 1,307
Operating profit (OP) 1,909 894 407
Earnings Before Tax (m) 1,795 304 407
Net Profit (adj.) (m) 1,062 23 224
Shareholders Equity (m) 29,403 29,175 29,400
Tangible BV (m) 27,327 27,099 27,324
RWA (m) 198,232 198,232 202,197
ROTE 4.1% 0.1% 0.8%
Total Capital Ratio (B3) 16.5% 16.6% 16.3%
Cost/Income 73.3% 80.4% 85.4%
NPL ratio (gross) 3.1% 2.9% 2.6%
P/PPP 4.5 4.4 5.8
P/E (adj.) 10.9 nm 33.9
P/BV 0.4 0.3 0.3
P/TBV 0.4 0.3 0.3
Dividend Yield 3.3% 0.0% 0.0%
PPPPS 2.15 1.39 1.04
EPS (adj.) 0.88 0.02 0.18
BVPS 23.48 23.30 23.47
TBVPS 21.82 21.64 21.82
DPS 0.20 0.00 0.00
5
6
7
8
9
10
11
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
COMMERZBANK Stoxx Banks (Rebased)Source: Factset
Shareholders: German government 17%;
Commerzbank - Q3 2016
EUR m Q3 '16 Q3 '16e Q3 '15 yoy Consensus delta
Revenues 2,437 2,398 2,309 6% 2,206 9%
of which NII 1,141 1,508 1,310 -13% na na
Expenses 1,733 1,700 1,734 0% 1,706 0%
CIR 71.1% 70.9% 75.1% -421 BP 77.3% -8%
Risk provis. 275 300 146 88% 255 18%
EBT -255 -302 401 na -455 na
Net income -288 -442 207 na -487 na
Sources: Commerzbank, equinet Research
Page 13 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Intesa Sanpaolo
Italy/Banks Analyser
BANKS
Intesa Sanpaolo (Accumulate) Q3 better than expected on net profit level
Q3 16 results preview
The facts: Intesa Sanpaolo is due to publish Q3 16 results today, conference call
presentation at 4.00pm CET.
Our analysis: We summarize our preview in the following table:
(EUR m) Q3 16E Q3 15A Y/Y Q2 16A Q/Q
Revenues 3,927 4,127 -4.8% 4,605 -14.7%
Operating costs -2,100 -2,059 2.0% -2,154 -2.5%
GOP 1,827 2,068 -11.7% 2,451 -25.5%
Loan provisions -800 -769 4.0% -923 -13.3%
Net Profit 594 722 -17.7% 901 -34.1%
Source: Company data, Banca Akros estimates
Pressured by lower revenues, higher costs and still high loan impairments, we
anticipate a weak quarter for Intesa Sanpaolo, ending with a net profit down 18%
Y/Y to approx. EUR 600m.
Total revenues are anticipated down 4.8% Y/Y to EUR 3.9bn, negatively impacted
by ca. EUR 100m annual contribution to the Deposit Guarantee Scheme vs.
roughly EUR 200m one-off gain one year ago from a successful claim. However,
the NII is seen decreasing 3% Y/Y to EUR 1.83bn (flat Q/Q), while net
commissions are estimated 1.7% lower Y/Y to EUR 1.72bn. Some EUR 200m
trading income vs. nil in Q3 15 should help support the revenue line.
Operating costs are expected to increase 2% Y/Y to EUR 2.1bn, leading to a
gross operating profit (GOP) of EUR 1.8bn, some 12% lower Y/Y with a C/I ratio
of 53.5%.
Loan impairments are forecast up 4% Y/Y to EUR 800m as we anticipate a further
strengthening of the coverage ratios.
The capital position should remain strong, with a CET1 ratio of around 13% both
phased-in and fully-loaded.
Conclusion & Action: We cut our Adj. EPS estimate for FY16 from EUR 0.18 to
0.15, while keeping EUR 0.22 and 0.24 for FY17 and FY18 respectively.
We reiterate Accumulate with EUR 2.8 target price.
Analyst(s):
Luigi Tramontana, Banca Akros
luigi.tramontana@bancaakros.it
+39 02 4344 4239
Accumulate
2.04
closing price as of 03/11/2016
2.80
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ISP.MI/ISP IM
Market capitalisation (EURm) 32,290
Current N° of shares (m) 15,860
Free float 75%
Daily avg. no. trad. sh. 12 mth 126,875
Daily avg. trad. vol. 12 mth (m) 205,102
Price high 12 mth (EUR) 3.25
Price low 12 mth (EUR) 1.55
Abs. perf. 1 mth 5.60%
Abs. perf. 3 mth 11.93%
Abs. perf. 12 mth -35.24%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 17,149 16,285 17,368
Pre-Provision Profit (PPP) (m) 7,933 7,200 8,218
Operating profit (OP) 4,627 3,789 5,589
Earnings Before Tax (m) 4,597 3,647 5,567
Net Profit (adj.) (m) 2,601 2,543 3,624
Shareholders Equity (m) 46,899 48,137 49,183
Tangible BV (m) 35,238 36,046 36,637
RWA (m) 284,319 289,631 299,675
ROTE 6.9% 7.1% 10.0%
Total Capital Ratio (B3) 16.6% 16.3% 15.6%
Cost/Income 51.4% 54.2% 51.4%
NPL ratio (gross) 11.7% 0.0% 0.0%
P/PPP 6.5 4.7 4.2
P/E (adj.) 19.9 13.4 9.4
P/BV 1.5 0.9 0.9
P/TBV 1.5 0.9 0.9
Dividend Yield 6.9% 8.8% 10.3%
PPPPS 0.47 0.43 0.49
EPS (adj.) 0.15 0.15 0.22
BVPS 2.10 2.15 2.18
TBVPS 2.10 2.15 2.18
DPS 0.14 0.18 0.21
1.4
1.6
1.8
2.0
2.2
2.4
2.6
2.8
3.0
3.2
3.4
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
INTESA SANPAOLO Stoxx Banks (Rebased)Source: Factset
Shareholders: Local Foundations 25%;
Page 14 of 59
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Poste Italiane
Italy/Banks Analyser
BANKS
Poste Italiane (Accumulate) Q3 16 results preview
Pioneer: the new-co could be listed
The facts: The Italian newspaper “Il Messaggero” reported more details about
Poste’s offer on Pioneer.
Our analysis: Aberdeen and Poste Italiane, together with Anima an CDP are
going to present a joint binding offer for Pioneer on 10th
Novemeber. The
shareholders of the new-co, which will acquire Pioneer, could be the following:
Poste, 60%; Anima, 20%; Aberdeen, 10%; CDP, 10%. The aim of this “new”
consortium is to submit a competing offer to that of Amundi and Macquaire.
Amundi’a offer, according to the press, ought to be around EUR 3.6bn, while
Poste’s consortium offer is likely to be around EUR 3.4bn. The final price offered
will also depend on Pioneer’s cash (around EUR 500m) and on the distribution
agreement which is likely to be signed with Unicredit.
Conclusion & Action: this is neutral news. The joint offer could increase the
likelihood for Poste to acquire Pioneer, as well as the price offered. The point will
be the total consideration of the deal: around EUR 4bn, corresponding to a P/E
around 18x and c. 1.9% the AuM, could be challenging to create value. Anyway,
we believe in Pioneer’s strategic role in Poste’s business plan in the medium
term. The news could also be positive for the development of Anima (Buy; TP
EUR 5.8), which could be merged with the new-co which will acquire Pioneer.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
enrico.esposti@bancaakros.it
+39 02 4344 4022
Accumulate
6.02
closing price as of 03/11/2016
7.90
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg PST.MI/PST IM
Market capitalisation (EURm) 7,856
Current N° of shares (m) 1,306
Free float 35%
Daily avg. no. trad. sh. 12 mth 3,644
Daily avg. trad. vol. 12 mth (m) 13,308
Price high 12 mth (EUR) 7.20
Price low 12 mth (EUR) 5.17
Abs. perf. 1 mth -1.15%
Abs. perf. 3 mth -2.91%
Abs. perf. 12 mth -8.59%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 30,738 32,667 33,304
Pre-Provision Profit (PPP) (m) 880 910 1,096
Operating profit (OP) 880 910 1,096
Earnings Before Tax (m) 933 933 1,120
Net Profit (adj.) (m) 825 813 958
Shareholders Equity (m) 9,658 9,785 10,036
Tangible BV (m) 9,658 9,785 10,036
RWA (m) 12,613 13,119 13,639
ROTE 8.5% 8.3% 9.5%
Total Capital Ratio (B3) 0.0% 0.0% 0.0%
Cost/Income 97.1% 97.2% 96.7%
NPL ratio (gross) 0.0% 0.0% 0.0%
P/PPP 10.5 8.6 7.2
P/E (adj.) 11.2 9.7 8.2
P/BV 1.0 0.8 0.8
P/TBV 1.0 0.8 0.8
Dividend Yield 5.6% 5.8% 7.2%
PPPPS 0.67 0.70 0.84
EPS (adj.) 0.63 0.62 0.73
BVPS 7.39 7.49 7.68
TBVPS 7.39 7.49 7.68
DPS 0.34 0.35 0.43
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
POSTE ITALIANE FTSE MIB (Rebased)Source: Factset
Shareholders: Ministry of Economy and Finance 65%;
Page 15 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Altri
Portugal/Basic Resources Analyser
BASIC RESOURCES
Altri (Buy) Pioneer: the new-co could be listed
3Q16 results comment: high margin despite falling pulp prices
The facts: Altri released its 3Q16 results today after the close of the Portuguese
market. The company recorded revenues of EUR 149.5m, EBITDA of EUR 40.2m
and net income of EUR 16.8m. On a cumulative basis (9M16), the company
recorded revenues of EUR 453.4m, EBITDA of EUR 128.7m and net income of
EUR 57.0m.
Our analysis: Once again and as stated in our Preview Note, the decrease in
pulp prices was the main driver of earnings in Q3, since there were no planned
annual stoppages in Celbi and Celtejo. The company produced 268.5 thousand
tons of pulp (o.w. 26.9 thousand dissolving) and reached sales of 258.5 thousand
(o.w. 28.0 thousand dissolving). This represented an increase of 14% QoQ in
production and 10% QoQ in terms of sales. The YoY decrease of the top line (a
price effect) was partially offset by a fall in operational costs of 7.7% YoY, leading
to a decrease of EBITDA (-36.2% YoY). EBITDA margin stood at 26.9% in the
quarter, i.e., +1.0 p.p. versus 2T16.
Net debt was of EUR 457m at the end of the quarter, a decrease of EUR 2m
against the previous quarter. The company recorded capex of EUR 21m in the
quarter and EUR 33m in the 9M16.
3Q16 results table
Source: Company data and CaixaBI Equity Research
Conclusion & Action: This set of results came above our estimates in the topline
and EBITDA. The major deviation against our estimates came from taxes (EUR -
6.9m versus EUR -4.9m estimated).
Lower pulp prices were the main event of the 3Q16’s results, with Altri still
maintaining a very efficient operating margin (26.9% in the quarter or 28.0% in
the 9M16) despite the pressure in terms of prices. The company believes that
BHKP prices could be affected by some temporary capacity cuts from major
producers or by some delays in their projects. We highlight once again that the
performance of the US dollar against the euro will be a key driver of profitability (a
stronger dollar is potentially positive).
Analyst(s):
Carlos Jesus, Caixa-Banco de Investimento
carlos.jesus@caixabi.pt
+351 21 389 6812
Artur Amaro Caixa-Banco de Investimento
artur.amaro@caixabi.pt
+351 213 89 6822
Buy
3.09
closing price as of 03/11/2016
5.90
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ALSS.LS/ALTR PL
Market capitalisation (EURm) 634
Current N° of shares (m) 205
Free float 34%
Daily avg. no. trad. sh. 12 mth 480
Daily avg. trad. vol. 12 mth (m) 445
Price high 12 mth (EUR) 5.24
Price low 12 mth (EUR) 2.86
Abs. perf. 1 mth -0.68%
Abs. perf. 3 mth -5.94%
Abs. perf. 12 mth -34.26%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 665 597 603
EBITDA (m) 221 169 166
EBITDA margin 33.3% 28.2% 27.5%
EBIT (m) 168 118 121
EBIT margin 25.3% 19.7% 20.0%
Net Profit (adj.)(m) 118 76 77
ROCE 15.1% 11.0% 11.4%
Net debt/(cash) (m) 430 388 322
Net Debt/Equity 1.3 1.1 0.8
Debt/EBITDA 1.9 2.3 1.9
Int. cover(EBITDA/Fin. int) 10.7 9.9 9.4
EV/Sales 2.1 1.7 1.6
EV/EBITDA 6.4 6.1 5.8
EV/EBITDA (adj.) 6.4 6.1 5.8
EV/EBIT 8.4 8.7 7.9
P/E (adj.) 8.3 8.3 8.3
P/BV 3.0 1.8 1.6
OpFCF yield 13.0% 16.9% 13.5%
Dividend yield 10.7% 8.1% 3.2%
EPS (adj.) 0.57 0.37 0.37
BVPS 1.57 1.70 1.97
DPS 0.33 0.25 0.10
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
ALTRI Stoxx Basic Resources (Rebased)Source: Factset
Shareholders: Management 61%; Bestinver 5%;
EURm 3Q15 2Q16 3Q16 3Q16eChg. %
(YoY)
Chg. %
(QoQ)9M15 9M16 9M16e
Chg. %
(YoY)
Revenues 181.5 143.0 149.5 143.9 -17.6% 4.6% 494.3 453.4 448.6 -8.3%
EBITDA 63.1 37.1 40.2 37.9 -36.2% 8.6% 163.1 128.7 127.1 -21.1%
margin 34.8% 25.9% 26.9% 26.3% -7.9 p.p. 1.0 p.p. 32.9% 28.0% 28.2% -4.9 p.p.
EBIT 50.0 23.9 27.0 25.4 -46.0% 13.1% 123.9 88.9 88.1 -28.3%
margin 27.6% 16.7% 18.1% 17.6% -9.5 p.p. 1.4 p.p. 24.9% 19.2% 28.2% -5.7 p.p.
Net Fin. -4.5 -2.7 -3.3 -3.2 -26.8% 22.6% -15.6 -10.8 -10.7 -31.0%
Net Inc. 34.4 15.9 16.8 17.2 -51.1% 5.5% 84.7 57.0 58.3 -32.7%
margin 19.0% 11.2% 11.2% 12.0% -7.7 p.p. 0.1 p.p. 17.0% 12.3% 12.9% -4.7 p.p.
Page 16 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Corticeira Amorim
Portugal/Basic Resources Analyser
BASIC RESOURCES
Corticeira Amorim (Accumulate) 3Q16 results comment: high margin despite falling pulp prices
Sale of 10% of share capital through ABB
The facts: On November 3, Corticeira Amorim announced that Amorim
Internacional Participations and Investmark Holdings will each be selling 5% of
Corticeira Amorim’s share capital (to a total of 10% of its share capital) through
an Accelerated Bookbuilding procedure to take place until November 4.
The total consideration of the Offer amounts to EUR 105m, corresponding to a
price of EUR 7.90 per share.
Our analysis: Following a successful conclusion of this ABB, Corticeira Amorim’s
free float will rise to 25% (from 15% currently), contributing to the increase of the
stock’s liquidity and of its weight in the PSI-20 index.
Conclusion & Action: We believe that the added free float resulting from this
sale will be beneficial for the stock; it paves the way for the removal of the 10%
liquidity discount currently considered in our fair value appraisal. However, we will
wait for the announcement of the US Floors stake sale conditions before making
any adjustment to our valuation.
Analyst(s):
José Mota Freitas, CFA, Caixa-Banco de Investimento
mota.freitas@caixabi.pt
+351 22 607 09 31
Accumulate
8.65
closing price as of 03/11/2016
8.30
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CORA.LS/COR PL
Market capitalisation (EURm) 1,150
Current N° of shares (m) 133
Free float 15%
Daily avg. no. trad. sh. 12 mth 32
Daily avg. trad. vol. 12 mth (m) 521
Price high 12 mth (EUR) 9.66
Price low 12 mth (EUR) 5.01
Abs. perf. 1 mth -0.60%
Abs. perf. 3 mth 13.14%
Abs. perf. 12 mth 67.60%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 605 650 678
EBITDA (m) 101 124 132
EBITDA margin 16.7% 19.0% 19.5%
EBIT (m) 73 96 103
EBIT margin 12.0% 14.8% 15.2%
Net Profit (adj.)(m) 55 70 75
ROCE 11.6% 14.4% 15.2%
Net debt/(cash) (m) 84 75 62
Net Debt/Equity 0.2 0.2 0.2
Debt/EBITDA 0.8 0.6 0.5
Int. cover(EBITDA/Fin. int) 155.5 122.7 132.0
EV/Sales 1.5 1.9 1.8
EV/EBITDA 8.7 10.0 9.3
EV/EBITDA (adj.) 8.7 10.0 9.3
EV/EBIT 12.1 12.9 11.9
P/E (adj.) 14.4 16.5 15.3
P/BV 2.3 3.1 2.9
OpFCF yield 3.2% 3.9% 5.8%
Dividend yield 4.7% 4.6% 4.9%
EPS (adj.) 0.41 0.52 0.57
BVPS 2.56 2.80 2.96
DPS 0.41 0.39 0.42
4
5
6
7
8
9
10
out 15 nov 15 dez 15 jan 16 fev 16 mar 16 abr 16 mai 16 jun 16 jul 16 ago 16 set 16 out 16 nov 16
vvdsvdvsdy
CORTICEIRA AMORIM PSI20 (Rebased)Source: Factset
Shareholders: Amorim Capital 51%; Investmark
Holdings 19%; Amorim Int. Part. 15%;
Treasury Shares 0.00%;
Page 17 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Outokumpu
EURm Q3a vs. Cons. OP Cons. Diff. Low High
Europe 946.0 -2% 970 969 0% 848 1,138
Americas 372.0 11% 322 334 -4% 275 385
Long Products 119.0 -11% 140 134 4% 82 160
Other operations #DIV/0! 135 #DIV/0!
Internal #DIV/0! -135 #DIV/0!
Total sales 1,419.0 -2% 1,432 1,452.0 -1% 1,272 1,656
Sales growth
EBIT
Europe 45.0 67% 13.0 27 -52% 8 42
Americas -7.0 36% 5.0 -11 n.a. -39 17
Long Products -1.0 #DIV/0! 1.0 0 #DIV/0! -4 7
Other operations n.a. -9.0 -7 -29 % -12 23
Total EBIT 40.0 167% 10.0 15.0 -33% -9 41
Total EBIT 32.0 113% 10.0 15.0 -33% -9 46
Total EBIT margin 2.3 % 0.7 % 1.0 %
PTP 13 n.a. -21.0 -12.0 -75 %
EPS 0.03 n.a. -0.04 -0.02 -86 %
Source : OP and Vara Research
Q3/2016e
Outokumpu
Finland/Basic Resources Analyser
BASIC RESOURCES
Outokumpu (Accumulate) Sale of 10% of share capital through ABB
Earnings turnaround progressing
The facts: Outokumpu’s results were more positive than expected with support
from the gradual recovery of the stainless steel market. Q3 sales were EUR
1,419m (OP: 1,432m/consensus: EUR 1,452m). Underlying EBIT improved by
EUR 98m to EUR 32m (EUR 10m/EUR 15m). The positive earnings performance
was supported by an increase in delivery volumes, higher average prices and
improved cost-efficiency in particular in the Americas. The delivery volumes were
608,000 tonnes (+6.6% vs. Q2/2015). The operating cash flow was EUR 61m.
Net debt reduced from the Q2 level by EUR 100m to EUR 1.4bn and gearing
reduced to 65.3%. The target is still to reduce the net debt level to EUR 1.2bn by
the end of 2017.
Our analysis: The underlying EBIT improved clearly both in Europe and the
Americas. In Europe, market demand was weaker due to the vacation season in
Europe. In contrast, Outokumpu’s delivery volumes in the Americas were record
high. The imports of cold rolled steel products to the EU and NAFTA area
increased in Q3. The maintenance break in ferrochrome production reduced the
earnings in Europe and related start-up difficulties will still be reflected on Q4 in
2016.
The guidance for Q4 results was below expectations. In terms of seasonality, the
volumes in the Americas clearly decline from the Q3 level and in Europe,
deliveries are estimated to be at the Q3 level. The underlying EBIT is expected to
be at the Q3 level (EUR 32m).
Conclusion & Action: The report did not result in any major revisions in
forecasts. In our Q4 forecast, the underlying EBIT is EUR 29m and as a whole,
the positive profit in 2016 would be EUR 59m, which is the first time since 2008.
Our underlying EBIT forecasts for 2017–2018 are upgraded by 2% and 1%. More
information on the market environment and strategy will be received at the
company’s CMD on 29 November 2016. In the short term, the share’s drivers are
related to the price performance of nickel and the improving earnings power in the
Americas. Our target price is still based on the EV/EBITDA 2017 level 7.5x, and
our target price consequently rises to EUR 6.50. We maintain our Accumulate
recommendation.
Analyst(s):
Jari Raisanen, OP Corporate Bank
jari.raisanen@op.fi
+358 10 252 4504
Accumulate
6.22
closing price as of 03/11/2016
6.50
6.20from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg OUT1V.HE/OUT1V FH
Market capitalisation (EURm) 2,584
Current N° of shares (m) 415
Free float 100%
Daily avg. no. trad. sh. 12 mth 3,810
Daily avg. trad. vol. 12 mth (m) 42,644
Price high 12 mth (EUR) 6.57
Price low 12 mth (EUR) 2.08
Abs. perf. 1 mth 1.80%
Abs. perf. 3 mth 21.48%
Abs. perf. 12 mth 90.33%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 6,386 5,624 6,328
EBITDA (m) 531 293 521
EBITDA margin 8.3% 5.2% 8.2%
EBIT (m) 229 63 281
EBIT margin 3.6% 1.1% 4.4%
Net Profit (adj.)(m) 87 (50) 126
ROCE 4.0% 1.2% 5.5%
Net debt/(cash) (m) 1,732 1,477 1,258
Net Debt/Equity 0.7 0.6 0.5
Debt/EBITDA 3.3 5.0 2.4
Int. cover(EBITDA/Fin. int) 3.6 2.4 4.7
EV/Sales 0.4 0.7 0.6
EV/EBITDA 5.4 13.9 7.4
EV/EBITDA (adj.) 5.4 13.9 7.4
EV/EBIT 12.5 64.5 13.7
P/E (adj.) 13.0 nm 20.6
P/BV 0.5 1.1 1.1
OpFCF yield 43.3% 7.0% 14.1%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) 0.21 (0.12) 0.30
BVPS 5.61 5.49 5.76
DPS 0.00 0.00 0.00
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
OUTOKUMPU OMXH25 (Rebased)Source: Factset
Shareholders: Solidium Oy 31%; Keskinäinen
työeläkevakuutusyhtiö Varma 8%;
Kansaneläkelaitos 5%;
Page 18 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Nexans
France/Electronic & Electrical Equipment Analyser
ELECTRONIC & ELECTRICAL EQUIPMENT
Nexans (Accumulate) Earnings turnaround progressing
Less favourable activity in Q3
The facts: The momentum for activity deteriorated in Q3 (-3.3% and -0.9% over
9M vs +0.2% in H1), dragged down by a decline in Oil & Gas activities (-39% over
the quarter). For the 2016 FY, Nexans has stated that it is expecting flat organic
growth but a significant improvement in the EBIT margin. We expect EUR241m
vs EUR195m at end-2015.
Our analysis: In addition to difficulties on the oil markets, demand on the
construction market, mainly in Europe and North America, (building cables, -5.7%
in Q3) and that of low and medium voltage cables (cables for utilities, -7.4%
especially in Europe -12.1%) slowed down the last quarter. However, the sharp
rise in revenues in land high voltage has been confirmed (organic growth ~50% in
Q3 after +17% in Q2). In submarine high voltage, while the order book came out
at a historical high, the unfavourable timing of some projects as well as the
slowdown in umbilical sales weighed on the quarter (revenues fell by -16.7%).
Conclusion & Action: Excluding the Oil & Gas business, activity still posted
growth of +1.1% over 9M. Given a still difficult environment, Nexans has indicated
a 2016 revenue momentum likely to fall vs 2015. However, the stronger order
book ensures sustained growth for project activities in 2017 and Nexans has
confirmed a significant increase in its EBIT margin, the main point of interest in
the event of investing in the stock.
Analyst(s):
Ari Agopyan, CM - CIC Market Solutions
ari.agopyan@cmcic.fr
+33 1 53 48 80 63
Accumulate
49.62
closing price as of 03/11/2016
47.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg NEXS.PA/NEX FP
Market capitalisation (EURm) 2,110
Current N° of shares (m) 43
Free float 60%
Daily avg. no. trad. sh. 12 mth 164
Daily avg. trad. vol. 12 mth (m) 10,439
Price high 12 mth (EUR) 54.80
Price low 12 mth (EUR) 29.37
Abs. perf. 1 mth -3.49%
Abs. perf. 3 mth 11.87%
Abs. perf. 12 mth 33.77%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 4,604 4,439 4,529
EBITDA (m) 72 292 366
EBITDA margin 1.6% 6.6% 8.1%
EBIT (m) (66) 159 230
EBIT margin nm 3.6% 5.1%
Net Profit (adj.)(m) (64) 141 162
ROCE 5.2% 8.9% 10.6%
Net debt/(cash) (m) 201 164 59
Net Debt/Equity 0.2 0.1 0.0
Debt/EBITDA 2.8 0.6 0.2
Int. cover(EBITDA/Fin. int) 0.7 3.4 4.4
EV/Sales 0.5 0.6 0.6
EV/EBITDA 29.2 9.5 7.3
EV/EBITDA (adj.) 7.5 7.3 6.3
EV/EBIT nm 17.4 11.6
P/E (adj.) nm 15.0 13.0
P/BV 1.2 1.7 1.6
OpFCF yield 28.6% 1.8% 5.7%
Dividend yield 0.0% 0.7% 1.8%
EPS (adj.) (1.50) 3.31 3.82
BVPS 27.58 28.87 31.05
DPS 0.02 0.35 0.91
25
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40
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50
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Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
NEXANS SBF 120 (Rebased)Source: Factset
Shareholders: Madeco 28%; French State Sovereign
Fund (FSI) 8%; Employees 4%;
Page 19 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Azimut
Italy/Financial Services Analyser
FINANCIAL SERVICES
Azimut (Accumulate) Less favourable activity in Q3
New little acquisition in Australia
The facts: Yesterday, during market hours, Azimut announced that AZ Next
Generation Advisory (AZ NGA), Azimut’s Australian subsidiary, acquired the
company On-Track Financial Solutions.
Our analysis: more in detail, AZ Next Generation Advisory signed a binding sale
and purchase agreement to acquire the entire capital of On-Track Financial
Solutions Pty Ltd. The agreement includes a share swap of 49% of On-Track’s
equity for AZ NGA shares and a progressive buy back of these shares over the
next ten years. The remaining 51% stake will be paid to the founding partner in
cash over a period of two years. On-Track is responsible for approximately AUD
170m of funds and comprises a team of 9, including 3 financial planners. The
company offers a full suite of advisory services to clients in Australia including
wealth accumulation, retirement planning, insurance, and strategic financial
planning advice. The total value of the transaction, considering both the cash and
share swap, entails a purchase price of around AUD 5.8m (around EUR 4.1m),
corresponding to c. 2.3% of assets acquired. The closing of the transaction is
expected in November 2016.
Conclusion & Action: this is positive news, although negligible. In this way,
Azimut is continuing its strategy to consolidate high quality Australian companies,
providing wealth management services to retail, HNW and institutional clients in
Australia. This new deal also represents another step to improve Azimut’s
geographical diversification, which is the best among its Italian peers. AZ Next
Generation, after this last acquisition, achieved c. EUR 2.7bn in total AuM. Azimut
is focused on developing its presence in high growth markets abroad, which
represent around.15% of Azimut’s total assets in 1H16.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
enrico.esposti@bancaakros.it
+39 02 4344 4022
Accumulate
14.16
closing price as of 03/11/2016
18.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg AZMT.MI/AZM IM
Market capitalisation (EURm) 2,028
Current N° of shares (m) 143
Free float 87%
Daily avg. no. trad. sh. 12 mth 1,057
Daily avg. trad. vol. 12 mth (m) 11,695
Price high 12 mth (EUR) 24.17
Price low 12 mth (EUR) 12.83
Abs. perf. 1 mth 3.74%
Abs. perf. 3 mth 5.04%
Abs. perf. 12 mth -34.99%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 415 298 311
Pre-Provision Profit (PPP) (m) 278 161 173
Operating profit (OP) 278 161 173
Earnings Before Tax (m) 278 161 173
Net Profit (adj.) (m) 197 113 121
Shareholders Equity (m) 717 657 709
Tangible BV (m) 388 329 380
RWA (m) 0 0 0
ROTE 29.1% 16.5% 17.8%
Total Capital Ratio (B3) 0.0% 0.0% 0.0%
Cost/Income 33.0% 45.9% 44.5%
P/PPP 11.0 11.6 10.9
P/E (adj.) 15.5 16.6 15.5
P/BV 4.3 2.9 2.6
P/TBV 7.9 5.7 4.9
Dividend Yield 10.6% 5.2% 5.6%
PPPPS 2.10 1.22 1.30
EPS (adj.) 1.48 0.86 0.92
BVPS 5.41 4.96 5.35
TBVPS 2.93 2.48 2.87
DPS 1.50 0.73 0.79
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18
20
22
24
26
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
AZIMUT FTSE MIB (Rebased)Source: Factset
Shareholders: Timone Fiduciaria 13%;
Page 20 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
CapMan
Finland/Financial Services Analyser
FINANCIAL SERVICES
CapMan (Neutral) New little acquisition in Australia
Norvestia merger strengthens the profile
The facts: CapMan's earnings continued on a strong uptrend in Q3 as the very
good value performance of investments continued. EBIT was, however, weaker
than in Q1 and Q2 with commission income falling clearly from the level of the
previous quarters, which can be only partly explained by the timing of carried
interest income. Operating expenses also declined slightly in line with our
forecasts. The full-year outlook was kept unchanged.
Our analysis: CapMan also announced yesterday that it would offer to acquire
the rest of the shares of the investment company Norvestia (71.3%). The
company offers the other shareholders of Norvestia as consideration six (6) new
CapMan shares for each Norvestia share after the payment of the EUR 3.35 extra
dividend proposed by Norvestia's BoD, which corresponds to a premium of 21%
to the price on the day preceding the offer. Relative to the Norvestia share's net
asset value of EUR 11.09 at the end of September, adjusted for the planned extra
dividend, the premium is 4%. We find the merger plan sensible as it will grow
CapMan's asset under management, increase the agility of investment operations
and enable significant cost synergies. All these combined will strengthen the
growth platform and dividend outlook. We find it likely that the offer will be
accepted because the majority of the shareholders with voting power have
expressed their support to the transaction, as has the BoD. We also find the offer
consideration good.
The valuations of financial sector shares offering a high dividend yield have
recovered during the autumn, which has also shown in CapMan's valuation. The
markets' increasing yield-hunting stance cannot be expected to change in an
environment of negative interest rates, which will support the present valuations
and possibly even a further rise in valuations. The yield-hunting stance also
underpins the growth outlook for the private equity investment business. On our
dividend projection of 7.5 cents, CapMan's dividend yield next spring would be
good at 5.9% on yesterday's closing price.
Conclusion & Action: We maintain our Neutral recommendation and raise our
target price to EUR 1.30 (from EUR 1.10) as the Q3 results and the planned
Norvestia merger reinforce the big picture.
Analyst(s):
Niclas Catani, OP Corporate Bank
niclas.catani@op.fi
+358 10 252 8780
Neutral
1.28
closing price as of 03/11/2016
1.30
1.10from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CPMBV.HE/CPMBV FH
Market capitalisation (EURm) 111
Current N° of shares (m) 86
Free float 76%
Daily avg. no. trad. sh. 12 mth 103
Daily avg. trad. vol. 12 mth (m) 883
Price high 12 mth (EUR) 1.28
Price low 12 mth (EUR) 0.92
Abs. perf. 1 mth 6.67%
Abs. perf. 3 mth 23.08%
Abs. perf. 12 mth 18.52%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 32 31 32
EBITDA (m) 10 12 20
EBITDA margin 30.1% 38.1% 62.5%
EBIT (m) 9 11 20
EBIT margin 29.1% 37.3% 61.7%
Net Profit (adj.)(m) 5 7 13
ROCE 67.3% 46.7% 58.1%
Net debt/(cash) (m) 48 41 54
Net Debt/Equity 0.7 0.6 0.4
Debt/EBITDA 5.0 3.5 2.7
Int. cover(EBITDA/Fin. int) 3.3 3.5 7.4
EV/Sales 4.2 5.0 7.8
EV/EBITDA 14.0 13.0 12.5
EV/EBITDA (adj.) 14.0 13.0 12.5
EV/EBIT 14.5 13.3 12.6
P/E (adj.) 17.7 16.9 15.4
P/BV 1.3 1.7 1.4
OpFCF yield 5.2% 7.0% 7.1%
Dividend yield 5.5% 5.9% 6.3%
EPS (adj.) 0.06 0.08 0.08
BVPS 0.76 0.77 0.91
DPS 0.07 0.08 0.08
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
CAPMAN OMXH (Rebased)Source: Factset
Shareholders: Ilmarinen Mutual Pension Insurance Co
8%; OY Inventiainvest AB 8%; Winsome
Oy + Tuomo Raasio 4%;
Page 21 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Coca Cola HBC AG
Greece/Food & Beverage Analyser
FOOD & BEVERAGE
Coca Cola HBC AG (Neutral) Norvestia merger strengthens the profile
3Q16 conference call highlights
The facts: In CCH 3Q16 cc management highlighted it is satisfied with the
quarterly performance, while volume growth was mainly weighed by the tough
comparatives in the prior year quarter. The adverse currency movements and
volume declines in the established and developing markets weighed negatively
leading to revenue declines, with the developing markets also burdened by
unfavourable channel mix. However, the top line benefited from favourable
package and category mix in the established markets and improved package and
category mix in the developing and emerging markets, with further support from
pricing actions mainly in Russia and Nigeria, which mitigated the negative
revenue performance in emerging markets. CCH announced 3Q16 sales volume
of 571.6m unit cases (-1% YoY), with established down 2.5% YoY, developing
down 4.2% YoY and emerging up 1.3% YoY, and net sales revenues of EUR
1,735m (-1.9% YoY), with established down 3.6% YoY, developing down 2.3%
YoY and emerging flat (-0.1% YoY). FX-neutral net sales revenue per case rose
3.8% YoY in the quarter, driven by +8.1% YoY in emerging markets and +3.5%
YoY in developing markets, while established markets -0.3% YoY, with the
adverse currency impact calculated at 4.5%.
Our Analysis: Regarding FY16 management reiterated it expects improvement in
FX neutral revenue/case and EBIT margin expansion, with FX-neutral input costs
/case marginally up. In the last quarter, Q4:16, management highlighted we
should expect volume leverage to improve with the addition of 1 selling day. On
the currency front, management noted that an improvement in the Russian ruble
is expected slightly better than the decline in the Nigerian naira embedded rate,
leading to an expectation for negative currency impact of EUR 110m in FY16,
down from EUR 115m expected previously. On Nigeria performance management
noted it remains positive, stressing that it expects that volume will be affected
mainly in FY17, noting it is taking gradual pricing actions, which could need even
2 years to reach inflation levels, on top of optimization initiatives. Regarding
Russia, the market is expected to turnaround in FY17, with CCH reiterating it
expects overall FY16 performance to improve compared to FY15.
Conclusion & Action: We see minor changes in our FY16 forecasts, mainly fine-
tuning to the improved category and package mix and currency impact, on the
back of slightly lower than we had expected volume performance. We reiterate
our Neutral rating.
Analyst(s):
Natalia Svyrou-Svyriadi, Investment Bank of Greece
nsviriadi@ibg.gr
+30 210 81 73 384
Neutral
19.94
closing price as of 03/11/2016
18.60
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg EEEr.AT/EEE GA
Market capitalisation (EURm) 7,348
Current N° of shares (m) 368
Free float 54%
Daily avg. no. trad. sh. 12 mth 36
Daily avg. trad. vol. 12 mth (m) 587
Price high 12 mth (EUR) 23.16
Price low 12 mth (EUR) 16.00
Abs. perf. 1 mth -3.81%
Abs. perf. 3 mth 9.38%
Abs. perf. 12 mth -8.70%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 6,346 6,293 6,451
EBITDA (m) 766 815 899
EBITDA margin 12.1% 13.0% 13.9%
EBIT (m) 418 459 533
EBIT margin 6.6% 7.3% 8.3%
Net Profit (adj.)(m) 314 353 399
ROCE 8.8% 9.8% 11.0%
Net debt/(cash) (m) 1,217 975 755
Net Debt/Equity 0.4 0.3 0.2
Debt/EBITDA 1.6 1.2 0.8
Int. cover(EBITDA/Fin. int) 12.6 18.3 21.9
EV/Sales 1.3 1.3 1.2
EV/EBITDA 10.9 10.1 8.9
EV/EBITDA (adj.) 10.4 9.7 8.7
EV/EBIT 20.1 17.9 15.0
P/E (adj.) 23.2 20.8 18.4
P/BV 2.6 2.5 2.3
OpFCF yield 4.9% 5.7% 5.0%
Dividend yield 2.0% 2.2% 2.4%
EPS (adj.) 0.85 0.96 1.08
BVPS 7.67 8.12 8.71
DPS 0.40 0.43 0.49
16
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Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
COCA COLA HBC AG Stoxx Food & Beverage (Rebased)Source: Factset
Shareholders: Kar Tess Holdings SA 23%; The Coca
Cola Co. 23%;
Page 22 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
KWS Saat
Germany/Food & Beverage Analyser
FOOD & BEVERAGE
KWS Saat (Buy) 3Q16 conference call highlights
KWS Saat: For 160 years in business and still thriving
We initiate coverage on the KWS share with a “Buy” recommendation. Based
on a DCF valuation, we calculate a target price of 346 EUR, resulting in an
upside of 17%. The valuation upside is however held back by KWS’ high
capital needs as prerequisite for growth.
We think that the KWS share offers attractive exposure to well-known, long-
term growth trends: Demand for food is steadily increasing because of
population growth and changing diet patterns in the Emerging Markets. At the
same time, resources are constrained. Farmland cannot be expanded a lot
further or will even shrink as a consequence of urbanization. As a result,
productivity of the agricultural industry needs to go up to keep markets in
balance, with seeds offering better long-time productivity potential than other
production factors (crop protection, fertilizers, equipment), especially for
sophisticated markets.
Despite these beneficial long-term growth trends, crop prices are trading close
to a cyclical low, following numerous years in a row with favourable global
weather conditions and harvests, good productivity progress on the side of
farmers and resulting high stock levels. Although we certainly don’t know the
exact point in time, we believe the probability of crop prices experiencing some
mean-reversion in the mid-term is rather good. This also puts current
valuations multiples in perspective, which at first glance appear not super
cheap at the moment.
Whatever the direction of crop prices will be, we believe that KWS will deliver
sound growth rates coupled with margin stability in the near-term future as a
result of the expansion strategy in corn, sound pricing power in sugar beet and
the disappearing of one-offs that burdened last year’s result. In this context, we
find it reassuring that the CEO of KWS exhibited his confidence by investing
the maximum share of his variable compensation into KWS shares in 2015.
We believe the overall risk level attached to the KWS share is relatively low:
Barriers to entry are high, the correlation of crop prices with general economic
cycles and the stock market is low, the customer base is fragmented and
served by a subscription-like business model. Moreover, the current race for
consolidation in the industry (Bayer - Monsanto, Syngenta - ChemChina, Dow -
Dupont) effectively constitutes a put option for the current majority
shareholders, limiting to some extend the downside of the KWS share.
Our target price of 346 EUR is based on 3% long-term growth, 6.3% WACC
and a long-term EBIT margin of 11.5% percent (compared to 11-14% in the
last five years). More upside is held back by KWS’ above average capital
requirements for growth, as KWS plans to deploy capex budgets of c. 100m
annually in the next couple of years, the R&D intensity as % of sales will
remain at 17-18% and net working capital is as high as 40% of sales, resulting
in an inferior cash flow profile compared to larger competitors.
Analyst(s):
Dr. Knud Hinkel, CFA, equinet Bank
knud.hinkel@equinet-ag.de
+ 49 69 58997 419
Buy
294.00
closing price as of 03/11/2016
346.00
from
Target price: EUR
Share price: EUR
Reuters/Bloomberg KWSG.DE/KWS GY
Market capitalisation (EURm) 1,940
Current N° of shares (m) 7
Free float 29%
Daily avg. no. trad. sh. 12 mth 2
Daily avg. trad. vol. 12 mth (m) 388
Price high 12 mth (EUR) 309.80
Price low 12 mth (EUR) 245.10
Abs. perf. 1 mth -1.95%
Abs. perf. 3 mth 2.53%
Abs. perf. 12 mth 1.07%
Key financials (EUR) 06/16 06/17e 06/18e
Sales (m) 1,037 1,075 1,152
EBITDA (m) 161 178 194
EBITDA margin 15.5% 16.5% 16.9%
EBIT (m) 113 125 136
EBIT margin 10.9% 11.6% 11.8%
Net Profit (adj.)(m) 85 98 112
ROCE 8.9% 9.2% 9.3%
Net debt/(cash) (m) 88 73 55
Net Debt/Equity 0.1 0.1 0.1
Debt/EBITDA 0.5 0.4 0.3
Int. cover(EBITDA/Fin. int) 13.8 13.5 15.0
EV/Sales 2.2 2.0 1.9
EV/EBITDA 13.9 12.4 11.2
EV/EBITDA (adj.) 13.9 12.4 11.2
EV/EBIT 19.9 17.6 16.1
P/E (adj.) 23.0 19.9 17.4
P/BV 2.6 2.3 2.1
OpFCF yield 1.6% 1.8% 2.0%
Dividend yield 1.0% 1.0% 1.1%
EPS (adj.) 12.92 14.80 16.91
BVPS 115.99 127.79 141.37
DPS 3.00 3.00 3.33
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Okt 15 Nov 15 Dez 15 Jan 16 Feb 16 Mrz 16 Apr 16 Mai 16 Jun 16 Jul 16 Aug 16 Sep 16 Okt 16 Nov 16
vvdsvdvsdy
KWS SAAT CDAX (Rebased)Source: Factset
Shareholders: GIESECKE BUECHTING FAMILY 31%;
OETKER AREND FAMILY 25%;
TESSNER HANS JOACHIM 15%;
Page 23 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Sonae
Portugal/Food & Drug Retailers Analyser
FOOD & DRUG RETAILERS
Sonae (Buy) KWS Saat: For 160 years in business and still thriving Buy
0.71
closing price as of 03/11/2016
1.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg YSO.LS/SON PL
Market capitalisation (EURm) 1,412
Current N° of shares (m) 2,000
Free float 34%
Daily avg. no. trad. sh. 12 mth 3,793
Daily avg. trad. vol. 12 mth (m) 1,556
Price high 12 mth (EUR) 1.12
Price low 12 mth (EUR) 0.63
Abs. perf. 1 mth 2.17%
Abs. perf. 3 mth 7.46%
Abs. perf. 12 mth -36.34%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 5,014 5,365 5,667
EBITDA (m) 334 327 373
EBITDA margin 6.7% 6.1% 6.6%
EBIT (m) 148 157 135
EBIT margin 2.9% 2.9% 2.4%
Net Profit (adj.)(m) 175 158 138
ROCE 6.0% 6.2% 5.4%
Net debt/(cash) (m) 1,304 960 856
Net Debt/Equity 0.7 0.5 0.4
Debt/EBITDA 3.9 2.9 2.3
Int. cover(EBITDA/Fin. int) 10.0 9.6 11.1
EV/Sales 0.4 0.2 0.2
EV/EBITDA 6.2 3.9 3.1
EV/EBITDA (adj.) 6.2 3.9 3.1
EV/EBIT 14.1 8.1 8.7
P/E (adj.) 12.0 8.9 10.2
P/BV 1.3 0.8 0.8
OpFCF yield -0.2% 9.0% 12.9%
Dividend yield 10.6% 0.0% 5.6%
EPS (adj.) 0.09 0.08 0.07
BVPS 0.83 0.91 0.94
DPS 0.08 0.00 0.04
9M16 results preview – sales pick up expected
The facts: Sonae is scheduled to report its 9M16 results on November 9, after
market close. The company will host an analyst conference call on the following
day.
Our analysis: Our estimates point to Sonae having reached EUR 3,820m in
sales during the 9M16, managing to record a 5% yoy gain. This positive evolution
should be mostly attributed to Sonae MC’s sales area expansion during the last
12 months, even though we are expecting like-for-like sales to have been positive
during the 3Q16, given the overall market’s positive performance. Sonae SR’s
sales growth should have also contributed positively to Sonae’s higher expected
sales helped by the impact of Losan and Salsa’s purchases (this was the first
quarter of Salsa’s consolidation). Sonae RP’s 25% lower sales estimate is due to
the reduction in the company’s freehold. EBITDA’s 10% yoy expected decrease
should be mostly attributed to Sonae RP’s evolution too, even though we are also
expecting a c. 50 bps yoy reduction in Sonae MC’s EBITDA margin due to the
continuation of the aggressive promotional policy that has been in place since
early 2015. Net Profit is expected to be down 20% yoy on lower indirect results
(resulting from the slower appreciation pace of Sonae Sierra’s properties’ value
appraisal), even though we are expecting direct results to have fairly appreciated.
Conclusion & Action. The quarterly figures should show some organic top-line
growth, in line with the appreciation we have been witnessing in local Food,
Beverages and Tobacco sales index. Nonetheless, EBITDA margins should
remain pressured both in Food and in Specialized retail units (where historical
comparability was hurt due to the effect of Losan and Salsa purchases – for
which no historical operational data was made available).
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
SONAE Geral (Rebased)Source: Factset Shareholders: Efanor 53%; BPI 9%; Fund. Berardo 2%;
Invesco 1.97%; Treas. Shares -0.17%;
Analyst(s):
José Mota Freitas, CFA, Caixa-Banco de Investimento
mota.freitas@caixabi.pt
+351 22 607 09 31
Consolidated P&L (EURm) 9M15 9M16e % Chg.
Sales and Services (adj.) 3,639 3,820 5%
Sonae MC (Food Retail) 2,549 2,678 5.1%
Sonae SR (Specialized Retail) 917 966 5.3%
Sonae RP (Retail Properties) 92 69 -24.8%
IM (Investment Management) 187 190 1.7%
Others & Adj -107 -84 22%
Underlying EBITDA (adj.) 226 203 -10%
Sonae MC (Food Retail) 152 147 -3%
Sonae MC's Margin 6.0% 5.5%
Sonae SR (Specialized Retail) -9 -1 84%
Sonae SR's Margin -1.0% -0.1%
Sonae RP (Retail Properties) 83 61 -26%
IM (Investment Management) 9 9 -7%
Others & Adj -10 -12 -26%
Underlying EBITDA margin 6.2% 5.3%
Non-recurrent EBITDA 35 55 59%
EBIT 119 116 -3%
Associates (Direct results) 38 36 -6%
Financial Income -52 -40 -23%
Taxes -4 -7 89%
Direct Net Income 102 105 3%
Total Minorities -3 -2 53%
Indirect results 44 11 -75%
Total Net Income after Minorities 142 114 -20%Eps 0.071 0.057
Source: Company data and Caix aBI Equity Research
Page 24 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Sonae
Portugal/Food & Drug Retailers Analyser
FOOD & DRUG RETAILERS
Sonae (Buy) 9M16 results preview – sales pick up expected
Sonae Sierra’s 9M16 results – higher indirect results
The facts: Sonae disclosed Sonae Sierra’s 9M16 results on November 3, after
market close
Our analysis: Sonae Sierra (50% owned by Sonae and equity consolidated)
reported a EUR 92.6m Net Profit for the period, which compares with the
EUR 94.8m Net Profit recorded in 9M15. EBIT was 8% lower than during the
previous year but, while Direct Income decreased 5% relative to 9M15 (EUR
40.2m). Indirect Results went marginally down from EUR 70.5m in 9M15 to EUR
69.4m in 9M16 as a result of yields compression in Europe, of the value creation
related to the opening of ParkLake and of some gains generated by recent
disposals. Inrev NAV amounted to EUR 1,286.3m (up from EUR 1,179.8m by
year end 2015).
Conclusion & Action: Sonae Sierra’s 9M16 results present stable operational
figures accompanied by the generation of profits resulting from successful
property management. Notwithstanding, we see no potential impact from this
announcement on Sonae’s stock price.
Analyst(s):
José Mota Freitas, CFA, Caixa-Banco de Investimento
mota.freitas@caixabi.pt
+351 22 607 09 31
Buy
0.71
closing price as of 03/11/2016
1.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg YSO.LS/SON PL
Market capitalisation (EURm) 1,412
Current N° of shares (m) 2,000
Free float 34%
Daily avg. no. trad. sh. 12 mth 3,793
Daily avg. trad. vol. 12 mth (m) 1,556
Price high 12 mth (EUR) 1.12
Price low 12 mth (EUR) 0.63
Abs. perf. 1 mth 2.17%
Abs. perf. 3 mth 7.46%
Abs. perf. 12 mth -36.34%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 5,014 5,365 5,667
EBITDA (m) 334 327 373
EBITDA margin 6.7% 6.1% 6.6%
EBIT (m) 148 157 135
EBIT margin 2.9% 2.9% 2.4%
Net Profit (adj.)(m) 175 158 138
ROCE 6.0% 6.2% 5.4%
Net debt/(cash) (m) 1,304 960 856
Net Debt/Equity 0.7 0.5 0.4
Debt/EBITDA 3.9 2.9 2.3
Int. cover(EBITDA/Fin. int) 10.0 9.6 11.1
EV/Sales 0.4 0.2 0.2
EV/EBITDA 6.2 3.9 3.1
EV/EBITDA (adj.) 6.2 3.9 3.1
EV/EBIT 14.1 8.1 8.7
P/E (adj.) 12.0 8.9 10.2
P/BV 1.3 0.8 0.8
OpFCF yield -0.2% 9.0% 12.9%
Dividend yield 10.6% 0.0% 5.6%
EPS (adj.) 0.09 0.08 0.07
BVPS 0.83 0.91 0.94
DPS 0.08 0.00 0.04
0.60
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
SONAE Geral (Rebased)Source: Factset
Shareholders: Efanor 53%; BPI 9%; Fund. Berardo 2%;
Invesco 1.97%; Treas. Shares -0.17%;
Page 25 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Finnish Industrial Engineering
Analyser
INDUSTRIAL ENGINEERING
Sonae Sierra’s 9M16 results – higher indirect results
Global ship market – decline stabilising
170
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vvdsvdvsdy
The number of global ship orders is stabilising to a very low level, about 30
ships per month. In October, 30 ships were ordered (111 ships in 10/2015),
and 359 ships were ordered between January and October (1,352 ships in
2015). In terms of segments, the situation has remained unchanged, and there
are few orders across the board – the only exception is still cruise ships the
orders of which are on a good level. The higher oil price does not pick up
offshore orders. A total of 675 offshore vessels are under construction in
shipyards, and capacity will increase further. The orders for gas carriers are still
extremely low, and only 14 carriers were ordered in 1–10/2016 (88 in 2015).
Container traffic continues to increase slightly, but it is not justified to expect a
pick-up in the orders for container ships, as overcapacity reduces cargo levels
and the challenges of shipping companies have increased.
Cargotec’s (Accumulate) MacGregor is aiming to achieve additional savings of
EUR 25m as its profitability continues to decline and sales will still drop
considerably in 2017. MacGregor’s forecasts were notably downgraded after
the Q3 report although the effect on Cargotec as a whole will be moderate.
Hiab's margin is excellent, and Kalmar’s profitability is stable. Cargotec’s
valuation is clearly below the sector's multiples as a result of which the share is
attractive.
The orders for Wärtsilä’s (Neutral) Marine Solutions segment and sales in 2017
will decline even though cruise ships orders facilitate the situation in the long
term. Wärtsilä as a whole is stable as a result of service activity and good
power plant activities. In our opinion, Wärtsilä’s long-term prospects are
attractive. The increasing role of services will improve profitability, and an
expanding product portfolio will help equipment operations benefit from growth
opportunities.
---------- Stoxx Industrial Engineering,
DJ Stoxx TMI rebased on sector
Analyst(s): Pekka Spolander, OP Corporate Bank
pekka.spolander@op.fi +358 10 252 4351
New ship orders
Total Tankers Bulkcarriers Container Offshore LNG+LPG Cruise
1-10/2015 1352 372 294 205 142 88 9
1-10/2016 359 59 38 63 35 14 29
Change -73% -84% -87% -69% -75% -84% 222%
Source: Clarkson, OP, 3 November 2016
Total new ship orders, number
Source: Clarkson, 3/11/2016
0
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900
New orders 6-month average
Page 26 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Duro Felguera
Spain/Industrial Engineering Analyser
INDUSTRIAL ENGINEERING
Duro Felguera (Neutral) Global ship market – decline stabilising
3Q’16 results
The facts: Duro Felguera presented 3Q’16 results yesterday.
Our analysis: Results slightly below forecasts:
Net debt reached EUR253m, in line with our full year forecasts. In 1H’16 the rise
in net debt came from the execution of guarantees on the Roy Hill project valued
at EUR88m and overhead costs in the Vuelta de Obligado plant in Argentina. In
3Q’16, net debt increased EUR18m more. We do not expect net debt to differ
much from current levels and the worst case scenario remains at EUR275m.
Duro Felguera has begun to take the steps to improve liquidity while the legal
disputes remain. The Company has put non-productive assets for sale, such as a
building in Madrid. On the other hand, Duro Felguera no longer rules out the sale
of treasury stock, which at current prices would bring in EUR18m cash. Regarding
Venezuela, maturities (equal to sovereign debt) pending payment amount to
EUR101m in 1H’16. This debt with Venezuela could also be monetised, assuming
a discount. Duro Felguera continues to negotiate with financial entities to extend
the maturity of EUR75m in 2017. In the worst case, a capital increase cannot be
ruled out, if in the hypothetical case for example, Venezuela enters default of if
Duro Felguera is asked for guarantees to refinance debt.
9m’16 order intake EUR321m to which another EUR172m would have to be
added from the JV on the CCGT plant in Romania. There are various projects for
EUR100m to be signed soon and others that could take a little longer such as
Panama (>EUR500m) possibly activated in 6 months’ time, or the first project of
two CCGT plants in Brazil (EUR700m in backlog) that will not begin until 2H’17.
The company will not renounce to new opportunities in Argentina despite the
problems with Vuelta de Obligado. The Company has taken note of the mistakes
in the mentioned project and confides in the changes underway in the country
with the new government, which should allow better negotiations in price clauses.
Backlog at 9m’16 amounts to EUR2,104m, 3.3% below 2015. The pipeline of
offers presented and being elaborated comes to EUR12,581m, of which 62% is in
energy, 14% mining and handling, and 13% services.
Conclusion: Duro Felguera continues to be greatly affected by the cash trapped
in the projects in Argentina and Australia, and is trying not to further erode
liquidity levels. In 2017 we expect net debt to improve due to the arbitrage in
Argentina, although Roy Hill will take longer. The focus is on net debt and the
performance in contracts.
Analyst(s):
Iñigo Recio Pascual, GVC Gaesco Beka
inigo.recio@gvcgaesco.es
+34 91 436 7814
Neutral
1.11
closing price as of 03/11/2016
1.40
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg MDF.MC/MDF SM
Market capitalisation (EURm) 178
Current N° of shares (m) 160
Free float 40%
Daily avg. no. trad. sh. 12 mth 455
Daily avg. trad. vol. 12 mth (m) 305
Price high 12 mth (EUR) 2.33
Price low 12 mth (EUR) 1.03
Abs. perf. 1 mth -6.72%
Abs. perf. 3 mth -4.31%
Abs. perf. 12 mth -50.00%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 771 644 748
EBITDA (m) (96) 38 49
EBITDA margin nm 6.0% 6.5%
EBIT (m) (115) 32 42
EBIT margin nm 4.9% 5.6%
Net Profit (adj.)(m) (69) 8 20
ROCE -28.8% 4.9% 7.4%
Net debt/(cash) (m) 75 252 172
Net Debt/Equity 0.5 1.7 1.0
Debt/EBITDA -0.8 6.6 3.5
Int. cover(EBITDA/Fin. int) 36.2 2.2 3.5
EV/Sales 0.4 0.7 0.5
EV/EBITDA nm 11.5 7.4
EV/EBITDA (adj.) nm 11.5 7.4
EV/EBIT nm 14.0 8.7
P/E (adj.) nm 23.4 8.7
P/BV 1.6 1.3 1.1
OpFCF yield -76.3% -98.0% 45.1%
Dividend yield 1.8% 0.0% 0.0%
EPS (adj.) (0.43) 0.05 0.13
BVPS 0.84 0.87 1.00
DPS 0.02 0.00 0.00
DURO FELGUERA: 9M16 RESULTS
9M15 %sles 9M16 %sles % y/y 1Q16 2Q16 3Q16
Sales 578.9 100% 480.9 100% -17% 192 142 147
EBITDA 18.4 3.2% 22.2 4.6% 21% 10 6 6
Depreciation -18.6 -3.2% -4.9 -1.0%
EBIT -0.3 0.0% 17.3 3.6% n.s. 7 5 5
Financial Results 8.1 1.4% -15.2 -3.2%
EBT 8.4 1.5% 2.2 0.5% -74% 3 -2 1
Net Profit 6.7 1.2% 1.6 0.3% -76% 2 -4 3
Source: Company data. GVC Gaesco Beka estimates
1.0
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Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
DURO FELGUERA Stoxx Industrial Engineering (Rebased)Source: Factset
Shareholders: Invs Somió 24%; Invs Río Magdalena
10%; Onchena SL 5%;
Page 27 of 59
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Technotrans
Germany/Industrial Engineering Analyser
INDUSTRIAL ENGINEERING
Technotrans (Accumulate) 3Q’16 results
Sale of treasury stock – no material impact
The facts: Late yesterday evening, Technotrans has announced successful
private placement of treasury shares (supported by Bankhaus Lampe),
representing around 5.4% of its share capital and increasing group’s free float to
~6.9m from 6.5m.
Our analysis: According to the PR the shares have been sold to long-term
investors in Germany and other European countries with total gross proceeds of
around EUR8.2m. The money will be primarily used for general corporate
purposes as well as to offset funds used for the recently acquired gwk, which was
to 1/3 financed with group’s own funds (around EUR5.2m).
Conclusion & Action: Overall, we see no material impact from the transaction
apart from restoring group’s cash position and a bit higher liquidity of its shares.
We stick to our PT EUR24 and Accumulate recommendation.
Analyst(s):
Victoria Kruchevska (CFA,FRM), equinet Bank
victoria.kruchevska@equinet-ag.de
+49 69 5 89 97 416
Accumulate
22.23
closing price as of 03/11/2016
24.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TTRGn.DE/TTR1 GR
Market capitalisation (EURm) 145
Current N° of shares (m) 7
Free float 81%
Daily avg. no. trad. sh. 12 mth 9
Daily avg. trad. vol. 12 mth (m) 53
Price high 12 mth (EUR) 23.70
Price low 12 mth (EUR) 15.75
Abs. perf. 1 mth -1.75%
Abs. perf. 3 mth 17.47%
Abs. perf. 12 mth 21.22%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 123 147 188
EBITDA (m) 12 14 16
EBITDA margin 9.9% 9.2% 8.4%
EBIT (m) 9 11 13
EBIT margin 7.3% 7.2% 6.8%
Net Profit (adj.)(m) 6 7 9
ROCE 13.6% 15.6% 18.1%
Net debt/(cash) (m) (13) (17) (22)
Net Debt/Equity -0.2 -0.3 -0.3
Debt/EBITDA -1.0 -1.2 -1.4
Int. cover(EBITDA/Fin. int) 46.7 97.6 154.8
EV/Sales 0.9 0.9 0.7
EV/EBITDA 9.3 9.5 7.9
EV/EBITDA (adj.) 9.3 9.5 7.9
EV/EBIT 12.7 12.1 9.7
P/E (adj.) 20.3 19.6 16.1
P/BV 2.5 2.6 2.3
OpFCF yield 6.6% 4.3% 4.9%
Dividend yield 1.5% 2.6% 3.1%
EPS (adj.) 0.95 1.14 1.38
BVPS 7.83 8.59 9.64
DPS 0.33 0.57 0.69
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Okt 15 Nov 15 Dez 15 Jan 16 Feb 16 Mrz 16 Apr 16 Mai 16 Jun 16 Jul 16 Aug 16 Sep 16 Okt 16 Nov 16
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TECHNOTRANS CDAX (Rebased)Source: Factset
Shareholders: Objectif Small Cap 6%; Treasury stock
5%; Midlin NV 4%;
Page 28 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
AXA
France/Insurance Analyser
INSURANCE
AXA (Buy) Sale of treasury stock – no material impact
A more demanding climate for Savings activities
The facts: Axa has published its 9m-2016 activity indicators. Revenues came out
at EUR75.7bn (vs. consensus of EUR75.2bn), up +0.4% l-f-l.
Our analysis: In Life & Savings, revenues declined by 0.9% to EUR44.2bn (vs.
EUR43.7bn), mainly due to lower revenues in UL, that did offset growth in G/A
Savings and Protection & Health. APE totalled EUR4.8bn (vs. EUR4.7bn), posting
a limited decrease of 0.4%. The margin came out at 38% (vs. 37%), down by 0.4
points due to a smaller margin in China. NPV thus declined 1% to EUR1.8bn (vs.
EUR1.7bn). In P&C, revenues rose +3% to EUR25.4bn (vs. EUR25.3bn), mainly
due to the 3% increase in prices. Note still growth in revenues in Direct (+6% to
EUR2.2bn) and countries with rapid growth (+10% to EUR3.9bn, notably Turkey).
Lastly, in Asset Management, revenues totalled EUR2.9bn (vs. EUR2.7bn),
tumbling by 6% despite net inflows of EUR18bn (of which +EUR30bn for Axa IM
and -EUR12bn for AB due to the loss of two mandates). AuM fell by 2% to
EUR1,052bn (vs. EUR1,103bn). The economic solvency ratio came out at 191%
(-6pts vs. 30.06.2016, mainly due to the markets and the impact from the change
in the EIOPA reference portfolio used in the volatility adjuster calculation).
Conclusion & Action: These indicators are above expectations, as the market
was expecting a tougher backdrop for Life activities and Asset Management. The
P&C business remains buoyant, even if it is driven more by prices than by
volumes.
Analyst(s):
Pierre Chedeville, CM - CIC Market Solutions
pierre.chedeville@cmcic.fr
+33 1 53 48 80 97
Buy
19.98
closing price as of 03/11/2016
22.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg AXAF.PA/CS FP
Market capitalisation (EURm) 48,513
Current N° of shares (m) 2,429
Free float 72%
Daily avg. no. trad. sh. 12 mth 7,174
Daily avg. trad. vol. 12 mth (m) 144,315
Price high 12 mth (EUR) 25.81
Price low 12 mth (EUR) 16.31
Abs. perf. 1 mth 6.62%
Abs. perf. 3 mth 17.16%
Abs. perf. 12 mth -18.59%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 59,212 59,839 60,805
Non-Life Gross prem.(m) 35,290 35,415 36,341
Total Net Revenues (m) 99,093 99,926 101,973
Life Ins.Tech.Result (m) 609 731 804
Non-Life Ins. Tech.Result 1,175 896 1,075
EBIT (m) 7,879 6,950 7,578
Net Profit (adj.) (m) 5,691 5,585 5,302
Shareholders Equity (m) 68,476 71,513 74,264
ANAV (m) 26,185 27,232 28,322
ROE (adj.) (%) 13.1 11.3 11.5
Combined ratio (%) 96.2 97.1 96.6
Solvency Ratio 0.0% 0.0% 0.0%
P/E (adj.) 10.8 9.1 8.4
P/BV 0.8 0.6 0.6
P/ANAV 1.2 0.9 0.9
P/EbV 1.2 0.9 0.8
Dividend Yield 5.5% 5.2% 5.7%
EPS (adj.) 2.34 2.19 2.38
BVPS 29.76 31.02 32.16
ANAVPS 20.46 21.72 22.86
EbVPS 21.00 22.33 23.95
DPS 1.10 1.04 1.14
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vvdsvdvsdy
AXA CAC 40 (Rebased)Source: Factset
Shareholders: Mutuelles Axa 15%; Employees 8%; BNP
Paribas 5%;
Page 29 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Banca Mediolanum
Italy/Insurance Analyser
INSURANCE
Banca Mediolanum (Accumulate) A more demanding climate for Savings activities
A part of Mr Berlusconi’s voting rights was suspended
The facts: Yesterday, according to Consob, a part of Mr Berlusconi’s voting rights
in Banca Mediolanum was suspended, due to ECB’s decision against Fininvest’s
ownership of a significant stake in the bank.
Our analysis: more in detail, Mr Berlusconi owns, through Fininvest, a stake
around 30,124% in Banca Mediolanum. Mr Berlusconi’s voting rights on 20.125%
of its stake were suspended. Berlusconi and Doris’ Families syndicated the 51%
(25.5% each), renewing for three years the pact in October 2016. The suspension
shouldn’t hurt the shareholders’ agreement on Banca Mediolanum shares and its
governance.
Conclusion & Action: this is neutral news. The overhang risk, due to ECB’s
position against Fininvest’s ownership of a significant stake in Banca
Mediolanum, is negligible in our view, because we believe the stake, will be
possibly placed through some private placements. We reiterate our stance on the
stock: Banca Mediolanum has one of the best business-model to face the
challenging context of the banking sector. Some positive surprises could arise
from the increase in the number of clients in the medium term, which are likely to
switch from AuA to the more profitable AuM. The strategic desire to play a key
role in the new mobile and internet banking sector could also make the difference
in the long run. 3Q16 results are going to be published on 8th
November.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
enrico.esposti@bancaakros.it
+39 02 4344 4022
Accumulate
6.12
closing price as of 03/11/2016
7.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg BMED.MI/BMED IM
Market capitalisation (EURm) 4,498
Current N° of shares (m) 736
Free float 30%
Daily avg. no. trad. sh. 12 mth 1,482
Daily avg. trad. vol. 12 mth (m) 6,691
Price high 12 mth (EUR) 7.91
Price low 12 mth (EUR) 5.32
Abs. perf. 1 mth 2.60%
Abs. perf. 3 mth 1.49%
Abs. perf. 12 mth -17.92%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 2,283 2,243 2,143
Non-Life Gross prem.(m) 0 0 0
Total Net Revenues (m) 3,939 3,766 3,693
EBIT (m) 561 384 397
Net Profit (adj.) (m) 470 311 321
Shareholders Equity (m) 2,070 2,049 2,046
ANAV (m) 1,876 1,855 1,852
ROE (adj.) (%) 25.5 16.0 16.5
Combined ratio (%) 0.0 0.0 0.0
Solvency Ratio 128.0% 119.2% 120.1%
P/E (adj.) 11.5 14.4 14.0
P/BV 2.6 2.2 2.2
P/ANAV 2.9 2.4 2.4
P/EbV 1.6 1.3 1.3
Dividend Yield 4.9% 4.5% 4.6%
EPS (adj.) 0.64 0.42 0.44
BVPS 2.81 2.79 2.78
ANAVPS 2.55 2.52 2.52
EbVPS 4.65 4.69 4.76
DPS 0.30 0.28 0.28
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
BANCA MEDIOLANUM Stoxx Insurance (Rebased)Source: Factset
Shareholders: Doris family 40%; Fininvest 30%;
Page 30 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Sampo
EURm Q3a OP Diff. Cons. Diff. Low High
If premium income 1080 1,079 0% 1,083 0% 848 1,120
Net investment income 40 58 -30% 0 0 0
Combined ratio 84.6 % 84.3 % 0% 85.5 % -1% 82.6 % 86.2 %0%
If PTP 224 232 -3% 238 -6% 199 260
Life PTP 53 52 2% 49 8% 30 55
Nordea 182 182
PTP 450 472 -5% 464 -3% 404 481
Net Profit 396 414 -4% 404 -2% 361 424
EPS 0.71 0.74 -4% 0.72 -1% 0.64 0.76
NAVPS 21.81 21.88 0% 21.30 2% 18.80 21.90
Dividend 0.00 0% 0.00 0.00
Source: OP and Vara Research
Q3 2016e
Sampo
Finland/Insurance Analyser
INSURANCE
Sampo (Accumulate) A part of Mr Berlusconi’s voting rights was suspended
Additional support from Topdanmark to the dividend flow
The facts: Once again, Sampo’s results demonstrate that it is a steadily
progressing dividend machine that is gathering increasing interest by the recent
activation in the M&A sector. As we expected, Sampo also announced in the
report that it will propose a change of distribution policy to the next Topdanmark
AGM, whereby a dividend would be reinstated and the share buyback program
discontinued. On the basis of Sampo’s current ownership (41.1%), the change
should be carried out without problems and it will further support Sampo’s
dividend payment capacity as of 2018 by about EUR 60m/year. Sampo offers an
attractive dividend yield of 5.5% for 2016.
Our analysis: According to the guidance for 2016 that was revised in connection
with the Q3 report, If's combined ratio is now expected to be 86–88% excluding
NRIs (prev. 87–90%). Our forecast for the 2016 combined ratio excl. NRI is
86.4% (2015: 86.5% excl. NRI).
Sampo’s Q3 EBIT of EUR 450m was slightly below forecasts (OPe: EUR 472m;
consensus: EUR 464m). However, the explanation is that the company has
recognised investment income as revenue quite sparsely through the income
statement during the quarter. However, the solid NAV performance (total: EUR
21.81; OPe: EUR 21.88; consensus: EUR 21.30) indicates that the value of the
investment portfolio has increased favourably during the quarter.
From the operational perspective, the performance of the non-life insurance
business was extremely solid. If’s combined ratio was better than expected at
84.6%. Claims increased slightly compared to the exceptionally low level of the
comparison period, but operative efficiency continued to improve moderately. If’s
premiums were still under slight pressure (-0.4% YoY in local currency), but we
estimate that they will turn to a moderate growth in 2017 as Finland’s economic
situation is starting to pick up. Mandatum Life’s (ML) premiums are now
increasing after a long decline. Net releases of funds from reserves lend support
to the earnings by EUR 9m and as a result of extremely low discount rates we
expect that ML will continue to gradually release funds from reserves, which will
support its earnings power also in the future.
Conclusion & Action: We reiterate Sampo’s Accumulate recommendation and
EUR 44 target price after the operationally solid Q3 report.
Analyst(s):
Antti Saari, OP Corporate Bank
antti.saari@op.fi
+358 10 252 4359
Accumulate
40.45
closing price as of 03/11/2016
44.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg SAMPO.HE/SAMPO FH
Market capitalisation (EURm) 22,652
Current N° of shares (m) 560
Free float 88%
Daily avg. no. trad. sh. 12 mth 755
Daily avg. trad. vol. 12 mth (m) 44,601
Price high 12 mth (EUR) 47.35
Price low 12 mth (EUR) 34.42
Abs. perf. 1 mth 1.40%
Abs. perf. 3 mth 12.24%
Abs. perf. 12 mth -10.11%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 1,144 921 940
Non-Life Gross prem.(m) 4,378 4,298 4,358
Total Net Revenues (m) 6,578 5,801 6,032
Life Ins.Tech.Result (m) 169 199 205
Non-Life Ins. Tech.Result 862 900 844
EBIT (m) 1,888 1,782 1,750
Net Profit (adj.) (m) 1,656 1,564 1,540
Shareholders Equity (m) 13,323 12,770 13,053
ANAV (m) 13,323 12,770 13,053
ROE (adj.) (%) 12.7 12.0 11.9
Combined ratio (%) 85.3 84.6 86.1
Solvency Ratio 0.0% 0.0% 0.0%
P/E (adj.) 15.9 14.5 14.7
P/BV 2.0 1.8 1.7
P/ANAV 2.0 1.8 1.7
P/EbV 2.0 1.8 1.7
Dividend Yield 5.3% 5.6% 5.8%
EPS (adj.) 2.96 2.79 2.75
BVPS 23.79 22.80 23.31
ANAVPS 23.79 22.80 23.31
EbVPS 23.79 22.80 23.31
DPS 2.15 2.25 2.35
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48
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
SAMPO OMXH25 (Rebased)Source: Factset
Shareholders: Solidium Oy 12%; Mutual Pension
Insurance Company Varma 6%; Björn
Wahlroos 2%;
Page 31 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Ferrovial
Spain/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Ferrovial (Accumulate) Additional support from Topdanmark to the dividend flow
Best proposal for I-66
The facts: The consortium participated by Ferrovial has been named the
Preferred Proposer to design, build, finance, operate and maintain the I-66
concession in Virginia (US).
Our analysis: The contract amounts to EUR3bn and the concession is for 50
years, whereas the construction will take until 2022. Meridian is a partner in the
consortium and the construction will be undertaken by Ferrovial and the local
construction company Allan Myers. The project includes the construction of
35kms through the I-66 corridor between Route 29 (close to Gainesville and the
Washington belt) and the I-495, in Fairfax County. This new tranche will include
three toll-free lanes and two managed lines per direction. The finance should be
closed next summer.
Conclusion: Positive news for Ferrovial, again demonstrating its expertise in
managed lines and with good examples in the NTE and LBJ (12% EBITDA
9M16). Accumulate recommendation reiterated.
Analyst(s):
Rafael Fernández de Heredia, GVC Gaesco Beka
rafael.fernandezdeheredia@gvcgaesco.es
+34 91 436 78 08
Accumulate
17.03
closing price as of 03/11/2016
22.10
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg FER.MC/FER SM
Market capitalisation (EURm) 12,469
Current N° of shares (m) 732
Free float 65%
Daily avg. no. trad. sh. 12 mth 3,228
Daily avg. trad. vol. 12 mth (m) 43,954
Price high 12 mth (EUR) 22.42
Price low 12 mth (EUR) 15.96
Abs. perf. 1 mth -9.92%
Abs. perf. 3 mth -4.94%
Abs. perf. 12 mth -23.71%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 9,698 9,353 9,646
EBITDA (m) 1,024 980 973
EBITDA margin 10.6% 10.5% 10.1%
EBIT (m) 899 1,021 725
EBIT margin 9.3% 10.9% 7.5%
Net Profit (adj.)(m) 718 657 440
ROCE 8.0% 9.4% 6.5%
Net debt/(cash) (m) 4,542 4,574 4,746
Net Debt/Equity 0.7 0.7 0.7
Debt/EBITDA 4.4 4.7 4.9
Int. cover(EBITDA/Fin. int) 2.0 2.2 2.1
EV/Sales 1.2 0.9 0.9
EV/EBITDA 11.4 9.0 9.2
EV/EBITDA (adj.) 11.4 9.0 9.2
EV/EBIT 13.0 8.7 12.3
P/E (adj.) 21.3 19.0 28.3
P/BV 2.5 2.0 2.1
OpFCF yield 3.3% 4.6% 5.7%
Dividend yield 4.2% 4.3% 4.4%
EPS (adj.) 0.98 0.90 0.60
BVPS 8.27 8.44 8.29
DPS 0.71 0.73 0.75
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vvdsvdvsdy
FERROVIAL Stoxx Construction & Materials (Rebased)Source: Factset
Shareholders: Del Pino Family 36%;
Page 32 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
LafargeHolcim
Switzerland/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
LafargeHolcim (Buy) Best proposal for I-66
Q3 a bit better than expected
The facts: Comments ahead of the conference call today at 11 am Zurich time.
Lafarge has published a quarterly ‘adjusted’ EBITDA of CHF1,685m, up in
organic terms by 10%. The 2016 synergy target was raised from CHF450m to
CHF550m. The consensus had expected adjusted EBITDA of CHF1664m.
Our analysis: This morning Lafarge published Q3-2016 results that were largely
satisfactory despite the imposing challenges with which the company is grappling
in Nigeria and Brazil (see the note we published yesterday). Revenues, at
CHF7,036m, fell -10.1% but only -3.1% in organic terms. Recurring operating
EBITDA (before charges needed to unlock synergies) was CHF1,685m, up 10.5%
in organic terms but 15% stripping out the negative impact of Nigeria. Despite a
negative volume effect, the group was helped by favourable comps, and the end
of the price war last year had impacted profitability during the merger period. By
region, the good performance in North America was notable even though volumes
were less favourable in Q3, as were France/Europe operations.
Conclusion & Action: IV of CHF59 confirmed in a more propitious market
environment for companies with a footprint in emerging market countries.
Analyst(s):
Jean-Christophe Lefèvre-Moulenq, CM - CIC Market Solutions jeanchristophe.lefevremoulenq@cmcic.fr
+33 1 53 48 80 65
Buy
50.75
closing price as of 03/11/2016
59.30
Target Price unchanged
Recommendation unchanged
Target price: CHF
Share price: CHF
Reuters/Bloomberg LHN.VX/LHN VX
Market capitalisation (CHFm) 30,801
Current N° of shares (m) 607
Free float 71%
Daily avg. no. trad. sh. 12 mth 2,050
Daily avg. trad. vol. 12 mth (m) 87,838
Price high 12 mth (CHF) 57.70
Price low 12 mth (CHF) 34.06
Abs. perf. 1 mth -3.33%
Abs. perf. 3 mth 13.66%
Abs. perf. 12 mth -10.65%
Key financials (CHF) 12/15 12/16e 12/17e
Sales (m) 29,483 27,959 26,888
EBITDA (m) 4,645 5,307 5,583
EBITDA margin 15.8% 19.0% 20.8%
EBIT (m) (346) 2,707 3,339
EBIT margin nm 9.7% 12.4%
Net Profit (adj.)(m) 788 1,355 1,869
ROCE 0.9% 4.0% 4.7%
Net debt/(cash) (m) 17,398 14,893 12,510
Net Debt/Equity 0.5 0.4 0.3
Debt/EBITDA 3.7 2.8 2.2
Int. cover(EBITDA/Fin. int) 3.5 5.7 8.3
EV/Sales 1.7 1.8 1.7
EV/EBITDA 11.0 9.3 8.4
EV/EBITDA (adj.) 8.9 8.6 8.1
EV/EBIT nm 18.2 14.0
P/E (adj.) 38.7 22.7 16.5
P/BV 1.0 1.0 1.0
OpFCF yield -0.2% 4.8% 8.5%
Dividend yield 3.0% 3.0% 3.3%
EPS (adj.) 1.30 2.23 3.08
BVPS 51.68 51.75 52.46
DPS 1.50 1.50 1.70
30
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40
45
50
55
60
65
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
LAFARGEHOLCIM Stoxx Construction & Materials (Rebased)Source: Factset
Shareholders: SCIG (Dr. Thomas Schmidheiny) 11%;
Groupe Bruxelles-Lambert 9%; NNS
Jersey (Sawiris) 5%; BlackRock 3%;
Page 33 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
SRV
Finland/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
SRV (Buy) Q3 a bit better than expected
On a strong earnings growth path
The facts: Although SRV's sales missed our forecasts in Q3, EBIT was just
barely above our forecast. However, the earnings overshoot came from the FX
impact as the RUB appreciated. Sales of Operations in Finland fell short of our
forecast because only 26 units were recognised in consumer apartments. Thus
around 400 units should be recognised in Q4. The margin of Operations in
Finland rested on contracting and remained at a good level taking that into
account. There were few new contracts, but an improvement is on the cards for
Q4 (order book +24%).
Our analysis: Consumer housing starts are lagging behind last year for the first
nine months of the year, but the starts of the first residential tower Majakka in
Redi and a few other projects will patch up the situation in Q4. Of the 283
apartments in Majakka 230 have been reserved and 20 apartments reserved
preliminarily. The company is planning to build over 2,500 apartments close to the
Western Metro over the next few years. The margin content of contracting
continues to improve when residential sales to investors are performing well and,
for example, a new self-developed project Kauppakeskus Karuselli (EUR 50m)
will be launched soon in Kerava with a nearly full occupancy rate.
In Russia, temporary rental rebates in the Pearl Plaza shopping centre have
decreased as the year progresses and RUB-denominated sales have increased
20% in the first nine months. We estimate that the Okhta Mall and 4Daily to be
opened next spring will start to support the earnings of associated companies
during 2017.
We do not revise our forecasts based on the Q3 results. The Q4 results are set to
be strong, driven by residential building, and next year earnings growth will be
underpinned by residential building and the growing contracting order backlog as
well as its improved margin content. The earnings of associated companies will
turn positive, but capital gains will not be seen until towards the end of the
strategy period expending to 2020. The lower valuation relative to the sector will,
however, offer upside for the share.
Conclusion & Action: We are upgrading our target price to EUR 5.50 (from
EUR 4.80) and our recommendation to Buy (from Accumulate) after the earnings
improvement continued at a brisk pace in Q3. The target price upgrade is based
on shifting the target price horizon to the 2018 forecasts and our target price is
based on P/E valuation 11.5, which has been the typical level for a construction
company in the long term.
Analyst(s):
Matias Rautionmaa, OP Corporate Bank
matias.rautionmaa@op.fi
+358 10 252 4408
Buy
4.33
closing price as of 03/11/2016
5.50
4.80from Target Price: EUR
from Accumulate
Target price: EUR
Share price: EUR
Reuters/Bloomberg SRV1V.HE/SRV1V FH
Market capitalisation (EURm) 262
Current N° of shares (m) 60
Free float 100%
Daily avg. no. trad. sh. 12 mth 37
Daily avg. trad. vol. 12 mth (m) 88
Price high 12 mth (EUR) 4.67
Price low 12 mth (EUR) 2.69
Abs. perf. 1 mth -3.78%
Abs. perf. 3 mth 5.10%
Abs. perf. 12 mth 59.78%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 751 880 1,063
EBITDA (m) 28 39 54
EBITDA margin 3.7% 4.5% 5.0%
EBIT (m) 24 36 50
EBIT margin 3.3% 4.1% 4.7%
Net Profit (adj.)(m) 14 15 28
ROCE 7.1% 8.8% 10.8%
Net debt/(cash) (m) 231 268 289
Net Debt/Equity 0.8 0.9 0.9
Debt/EBITDA 8.3 6.8 5.4
Int. cover(EBITDA/Fin. int) 4.1 2.3 3.7
EV/Sales 0.6 0.7 0.6
EV/EBITDA 16.6 14.6 11.1
EV/EBITDA (adj.) 16.6 14.6 11.1
EV/EBIT 19.0 16.0 11.9
P/E (adj.) 13.4 17.6 9.2
P/BV 0.7 0.9 0.8
OpFCF yield 23.9% -14.3% -4.3%
Dividend yield 2.3% 2.3% 2.5%
EPS (adj.) 0.23 0.25 0.47
BVPS 4.58 4.83 5.13
DPS 0.10 0.10 0.11
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
SRV OMXH (Rebased)Source: Factset
Shareholders: Kokkila Ilpo 22%; Kolpi Investments Oy
19%; Kokkila Timo 13%;
Page 34 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Titan Cement
Greece/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Titan Cement (Accumulate) On a strong earnings growth path
Solid performance in 3Q16, bottom line boosted by one-off tax
The facts: Titan reported its 3Q16 financial results yesterday after market opening:
Specifically, group sales rose by 0.8% YoY to EUR 400m (vs. our estimate of EUR 406m),
EBITDA advanced by 43% YoY to EUR 85.5m (vs. our estimate of EUR 84.8m), while
reported net income stood at EUR 112.7m (vs. our estimate of EUR 31.5m) including EUR
79m deferred tax asset from the utilization of tax loss carry-forwards in the US.
Our Analysis: Below is an analysis of performance and management’s outlook per
geographic region: 1) Greece: Revenues rose by 20% YoY to EUR 62m due to favourable
comparison after the impact of capital controls imposed at the end of June 2015, while
higher utilization rate helped EBITDA to increase by 144% YoY to EUR 8.3m.š On the
negative side, export margins were affected by competition and rising energy and freight
costs. The outlook for domestic demand remains weak, while pressure on exports margins
might continue. 2) USA: Following a slowdown in 2Q16 due to maintenance works in plants,
the company resumed double digit sales growth rate on the back of price increases, volume
growth, strong USD and expansion of ready mix operations. Overall, revenues increased by
16% YoY to EUR 212m, while EBITDA rose by 5.5% YoY to EUR 46m. The positive outlook
remains intact on solid demand growth on all regions, new price increases in January,) and
further investments in downstream activities. 3) SEE: Revenues declined by 7.4% YoY to
EUR 60m and EBITDA fell by 7% YoY to EUR 20m as volume increases in some regions
and fuel savings were offset by continued price pressures. The modest outlook is
unchanged. 4) Egypt: Amid a mixed environment due to challenging macro and currency
conditions and strong cement demand (approximately +9%), revenues increased by 17%
YoY to EUR 67m on higher utilization rate. Significant reduction in production costs due to
the full operation of the second coal grinding mill in Beni-Suef led EBITDA higher by 87%
YoY to EUR 11m. The short-term outlook is uncertain as operational efficiencies and strong
demand is mitigated by the decision of the Central Bank of Egypt to allow local currency to
float freely. Anticipating the new currency devaluation, 3Q16 results include a provision of
EUR 6.4m (below EBITDA) for FX loss on the assumption for a c.20% devaluation, however
there is risk for additional FX losses to be recorded in 4Q16. FCF in 9M16 was negative by
approximately EUR 15m including capex of EUR 94m, working capital outflow of EUR 33m
and completion of acquisition in Brazil for around EUR 90m. Following the payment of
interest expenses of c.EUR 53m and payment of dividends and share repurchases of c.EUR
40m, group net debt stood at EUR 713m at the end of 3Q16 from EUR 578m at the end of
2Q16 and EUR 621m at the end of 2015.
Titan 9M16 results
EUR m 9M15 IBGe 9M16 % YoY
Sales 1029.5 1129.7 1124.2 9.2%
EBITDA 165.2 204.3 205.0 24.1%
EBITDA margin 16.0% 18.1% 18.2%
Net Profit 36.2 40.8 121.9 236.7%
Source: The Company, IBG Research
Conclusion & Action: Excluding the differed tax, 3Q16 results were in line with our
estimates. With the added uncertainty in Egypt due to currency devaluation, key trends are
unchanged in other regions. In this framework, we expect to trim our 2016-2017 EBITDA
estimates due to weaker performance in SE Europe and effect of Egyptian currency until
local cement prices adjust to the new environment. On the other hand, bottom line in 2016 is
boosted by the deferred tax, more than offsetting FX losses, prompting management to
imply the distribution of a higher dividend for FY16 results at the conference call held
yesterday. We will revert soon with new estimates and valuation.
-
Analyst(s):
Vassilis Roumantzis, Investment Bank of Greece
vroumantzis@ibg.gr
+30 2108173394
Accumulate
19.81
closing price as of 03/11/2016
22.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TTNr.AT/TITK GA
Market capitalisation (EURm) 1,677
Current N° of shares (m) 85
Free float 62%
Daily avg. no. trad. sh. 12 mth 44
Daily avg. trad. vol. 12 mth (m) 890
Price high 12 mth (EUR) 22.40
Price low 12 mth (EUR) 15.00
Abs. perf. 1 mth -4.58%
Abs. perf. 3 mth -2.32%
Abs. perf. 12 mth -0.95%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 1,398 1,521 1,669
EBITDA (m) 216 275 340
EBITDA margin 15.5% 18.1% 20.3%
EBIT (m) 86 156 222
EBIT margin 6.1% 10.2% 13.3%
Net Profit (adj.)(m) 34 50 136
ROCE 2.8% 4.6% 6.5%
Net debt/(cash) (m) 621 700 600
Net Debt/Equity 0.4 0.4 0.3
Debt/EBITDA 2.9 2.5 1.8
Int. cover(EBITDA/Fin. int) 3.3 4.6 6.5
EV/Sales 1.6 1.5 1.3
EV/EBITDA 10.0 8.5 6.6
EV/EBITDA (adj.) 9.7 8.5 6.6
EV/EBIT 25.3 15.0 10.1
P/E (adj.) 42.7 32.7 11.4
P/BV 1.0 1.1 1.1
OpFCF yield -2.4% -0.6% 6.9%
Dividend yield 1.5% 2.0% 2.5%
EPS (adj.) 0.41 0.61 1.74
BVPS 17.12 18.57 18.40
DPS 0.30 0.40 0.50
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vvdsvdvsdy
TITAN CEMENT Stoxx Construction & Materials (Rebased)Source: Factset
Shareholders: Founding families 38%;
Page 35 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Vicat
France/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Vicat (Accumulate) Solid performance in 3Q16, bottom line boosted by one-off tax
Q3 in line but guidance revised down
The facts: Comments ahead of the conference call this afternoon (3pm CET).
Vicat has published 9m-2016 revenues of EUR1867m, up +3.4% in organic. In
Q3 alone (revenues of EUR629m), organic growth was only +1.7% (+4.3% in H1).
As expected, 2016 guidance has been revised down, with now only modest
growth expected in EBITDA. The reason for this dip is of course the devaluation
of currency in certain emerging markets, particularly the Egyptian pound (EGP).
Our analysis: Organic growth in Q3 (+1.7%) hides a contrasting situation with: 1)
good performance in France which confirms its recovery (+3.1%) thanks to
export; 2) satisfactory momentum in Senegal; 3) but this performance is impacted
by a decline in Switzerland, a contrasting situation in the US (positive in Alabama
but negative in California) and by a halt in Turkey. Revenues jumped by 36.2% in
Egypt thanks to volumes picking up but the results for this country will inevitably
be impacted by devaluation effects.
Conclusion & Action: IV of EUR68.8.
Analyst(s):
Jean-Christophe Lefèvre-Moulenq, CM - CIC Market Solutions jeanchristophe.lefevremoulenq@cmcic.fr
+33 1 53 48 80 65
Accumulate
56.05
closing price as of 03/11/2016
68.80
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg VCTP.PA/VCT FP
Market capitalisation (EURm) 2,517
Current N° of shares (m) 45
Free float 32%
Daily avg. no. trad. sh. 12 mth 27
Daily avg. trad. vol. 12 mth (m) 1,679
Price high 12 mth (EUR) 61.06
Price low 12 mth (EUR) 46.22
Abs. perf. 1 mth -3.35%
Abs. perf. 3 mth 6.22%
Abs. perf. 12 mth -5.00%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 2,458 2,462 2,547
EBITDA (m) 447 470 510
EBITDA margin 18.2% 19.1% 20.0%
EBIT (m) 249 269 306
EBIT margin 10.2% 10.9% 12.0%
Net Profit (adj.)(m) 120 134 157
ROCE 4.6% 5.1% 5.8%
Net debt/(cash) (m) 1,086 954 826
Net Debt/Equity 0.4 0.4 0.3
Debt/EBITDA 2.4 2.0 1.6
Int. cover(EBITDA/Fin. int) 12.1 12.6 14.2
EV/Sales 1.6 1.6 1.5
EV/EBITDA 9.0 8.3 7.4
EV/EBITDA (adj.) 9.0 8.3 7.4
EV/EBIT 16.2 14.5 12.3
P/E (adj.) 20.3 18.5 15.8
P/BV 1.1 1.1 1.1
OpFCF yield 5.0% 8.4% 8.8%
Dividend yield 2.7% 2.7% 3.2%
EPS (adj.) 2.73 3.04 3.56
BVPS 50.15 51.35 52.76
DPS 1.50 1.50 1.80
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vvdsvdvsdy
VICAT Stoxx Construction & Materials (Rebased)Source: Factset
Shareholders: Family & Holdings 61%; Treasury stock
3%; Employees 5%;
Page 36 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Media
Analyser
MEDIA
Q3 in line but guidance revised down SPAIN: October audience/targets. A3M positive
The facts: October TV audience/target data released.
The Y/Y comparison between A3M/MSE is distorted by the different
number of channels (progressive opening of 6 NGC since October 2015 +
Mega). In April the equal number of channels between the two ended.
Now the scenario is stable with MSE holding one more NGC channel (7
vs. A3M’s 6). Audience in the new channels were moderate (although
some share was scratched from the large chains) even with the new
programming: 13TV (2.12%, 24h, SD), Atreseries (0.81% HD), BeMad
(0.66%, HD), DKiss (0.76%, SD), TEN (0.43%, SD) y Real Madrid (0.24%, HD).
Our analysis: MSE/A3M obtained good results, recovering normal
audience levels following the Eurocup (MSE)/Olympic Games (RTVE) and
bearing in mind that A3M broadcasted some Champion games. MSE has
reached two years and a half as audiovisual leader in 24h and prime time
audience. Telecinco was the most watched channel with 13.8% share (vs.
12.6% Antena 3) and 13.7% (vs. 12.5% Antena 3) in commercial target.
Cuatro was surpassed again by La Sexta in 24h audience (6.4% vs. 7.6%)
and prime time (6.4% vs. 8.4%). The annual performance is still positive for
A3M due to the Champions (and considering it offered F1 in 2015), Antena
3/La Sexta’s prime time audience/targets and temporary equal number of
channels.
The total NGC, FDF (MSE) continues leading (2.81% prime time vs. 2.41%
Neox vs. 2.2% Energy) durign 55 months although audience dropped a Little.
MSE’s NGC surpassed 2.3pp total day/ind audience (2.1pp in prime time) vs.
A3M’s in October.
Conclusion: Positive data especially for A3M. In the latter, the negative trend
reverted thanks to the Champions and La Sexta. We maintain our estimated
audience and monetising levels for MSE (31.3% 24h/ind. 2016e, 1.39x
power ratio16e) and A3M (27.1%, 1.59x).
---------- Stoxx Media,
DJ Stoxx TMI rebased on sector
Analyst(s):
Eduardo Garcia Arguelles, GVC Gaesco Beka
eduardo.garciaarguelles@gvcgaesco.es
+34 914 367 810
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vvdsvdvsdy
Page 37 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
JCDecaux
France/Media Analyser
MEDIA
JCDecaux (Accumulate) SPAIN: October audience/targets. A3M positive
Q3 revenues: an organic contraction in Q4
The facts: Q3 revenues were released yesterday at market close. Company
contact.
Our analysis: The Q3 slowdown (vs +3.4% in Q2) was a bit steeper than
expected owing to China (20%+ of revenues), as there was a double-digit decline
(impact on Transport). There was a good surprise in Street Furniture (+6.0% after
+2.4% in Q2), especially in France, while the Billboards division was helped by
the improved situation in Moscow.
EURm
Q3-16 revenues reported
Org. change
Q3-16e CM-CIC
Org. change
Q3-16 Cons.
Total 793 +1.5% 804 +2.0% 802
Street furniture 341 +6.0% 334 +2.0% 332
Transport 332 -2.4% 343 +2.6% 348
Billboards 120 +1.1% 127 +0.0% 117
The guidance of a -2% contraction in Q4 (vs Q4-15, the strongest quarter of the
year at +6.2%; lack of visibility, especially on Brexit) was unexpected: the
consensus was +3.8% on the year, and the group guided for +3%, stressing the
negative impact on EBITDA of this poor year-end. We are adjusting our forecasts
for 2016E: organic growth from +4.1% to +3.0%, and EBITDA from EUR661m to
EUR639m.
Conclusion & Action: The stock is likely to fall on the surprisingly poor figures.
However, following the decline of 23% since April, the share has reached an entry
point in our view, with EV/EBITDA 16E of 9.1x (although hurt by Cemusa), vs. an
average of 10.0x in 2008-15 for the global leader in outdoor advertising.
Analyst(s):
Eric Ravary, CM - CIC Market Solutions
eric.ravary@cmcic.fr
+33 1 53 48 80 71
Emmanuel Chevalier CM - CIC Market Solutions
emmanuel.chevalier@cmcic.fr
+33 1 53 48 80 72
Accumulate
26.98
closing price as of 03/11/2016
31.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg JCDX.PA/DEC FP
Market capitalisation (EURm) 5,734
Current N° of shares (m) 213
Free float 34%
Daily avg. no. trad. sh. 12 mth 178
Daily avg. trad. vol. 12 mth (m) 5,033
Price high 12 mth (EUR) 39.53
Price low 12 mth (EUR) 26.85
Abs. perf. 1 mth -5.33%
Abs. perf. 3 mth -9.89%
Abs. perf. 12 mth -27.93%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 2,807 2,973 3,071
EBITDA (m) 583 520 604
EBITDA margin 20.8% 17.5% 19.7%
EBIT (m) 270 204 272
EBIT margin 9.6% 6.9% 8.9%
Net Profit (adj.)(m) 234 205 261
ROCE 6.8% 4.9% 6.6%
Net debt/(cash) (m) 511 597 527
Net Debt/Equity 0.2 0.2 0.2
Debt/EBITDA 0.9 1.1 0.9
Int. cover(EBITDA/Fin. int) 41.0 28.0 29.9
EV/Sales 2.8 2.0 1.9
EV/EBITDA 13.6 11.7 9.8
EV/EBITDA (adj.) 13.6 11.7 9.8
EV/EBIT 29.4 29.8 21.7
P/E (adj.) 33.0 28.0 22.0
P/BV 3.2 2.4 2.2
OpFCF yield 4.4% 2.1% 3.5%
Dividend yield 2.1% 2.1% 2.2%
EPS (adj.) 1.07 0.97 1.23
BVPS 11.03 11.38 12.00
DPS 0.56 0.56 0.60
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vvdsvdvsdy
JCDECAUX Stoxx Media (Rebased)Source: Factset
Shareholders: JcDecaux holding 65%; Decaux family
1.48%; Employees 0.07%;
Page 38 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Ubisoft
France/Media Analyser
MEDIA
Ubisoft (Neutral) Q3 revenues: an organic contraction in Q4
H1 2016/17 results: EBIT guidance revised upwards
The facts: Presentation yesterday evening of H1 results which were higher than
expectations.
Our analysis: Note: 1) Higher-than-expected revenues: Q2 EUR142m, +29% (vs
cautious guidance of EUR100m); in H1, digital +103%, back catalogue +46%,
thanks to expansion packs; 2) positive effect on the gross margin from the digital
mix: 80.5% vs 74.4%; FCF close to breakeven in H1, which is rare.
EURm H1 16/17 - reported H1 16/17E - CM-CIC H1-15/16
Revenues 281 255 207
Gross margin 226 197 154
uEBIT before SO -62 -121 -108
Revision of 2016/17 guidance: more cautious on revenues EUR1,610m-
EUR1,670m vs EUR1,700m, more optimistic on EBIT EUR230m-EUR250m vs
EUR230m. Management is being more cautious over the success of its games
but the digital mix effect (revised to 40% vs 35%) has a positive impact on
margins. We have left our 2016/17E EBIT forecast unchanged at EUR236m.
Conclusion & Action: The mix has rapidly improved due to digital (additional
sales extend the life cycle of games) but management is being more prudent over
the success of its games in H2. At 13.7x 16/17E EBIT (vs 14x on average for its
US peers), we think that the stock continues to factor in a speculative premium.
We have updated our fundamental value to EUR23 (50% DCF, 50% EV/EBIT of
11x, -20% vs US peers).
Analyst(s):
Eric Ravary, CM - CIC Market Solutions
eric.ravary@cmcic.fr
+33 1 53 48 80 71
Neutral
29.03
closing price as of 03/11/2016
23.00
20.00from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg UBIP.PA/UBI FP
Market capitalisation (EURm) 3,263
Current N° of shares (m) 112
Free float 90%
Daily avg. no. trad. sh. 12 mth 293
Daily avg. trad. vol. 12 mth (m) 15,226
Price high 12 mth (EUR) 38.31
Price low 12 mth (EUR) 18.99
Abs. perf. 1 mth -15.50%
Abs. perf. 3 mth -18.93%
Abs. perf. 12 mth 8.50%
Key financials (EUR) 03/16 03/17e 03/18e
Sales (m) 1,394 1,662 1,807
EBITDA (m) 600 770 884
EBITDA margin 43.0% 46.3% 48.9%
EBIT (m) 137 200 265
EBIT margin 9.8% 12.0% 14.6%
Net Profit (adj.)(m) 93 131 185
ROCE 11.5% 13.4% 17.3%
Net debt/(cash) (m) 30 (16) (231)
Net Debt/Equity 0.0 0.0 -0.2
Debt/EBITDA 0.1 0.0 -0.3
Int. cover(EBITDA/Fin. int) 80.7 120.3 978.2
EV/Sales 2.3 2.0 1.7
EV/EBITDA 5.2 4.2 3.4
EV/EBITDA (adj.) 5.0 4.1 3.3
EV/EBIT 22.9 16.3 11.5
P/E (adj.) 34.3 25.6 18.2
P/BV 3.0 2.8 2.4
OpFCF yield -6.2% 4.9% 6.6%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) 0.81 1.13 1.60
BVPS 9.06 10.23 11.88
DPS 0.00 0.00 0.00
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vvdsvdvsdy
UBISOFT SBF 120 (Rebased)Source: Factset
Shareholders: Fr¿res Guillemot 9%; Employees 0.84%;
Page 39 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Repsol
Spain/Oil & Gas Producers Analyser
OIL & GAS PRODUCERS
Repsol (Buy) H1 2016/17 results: EBIT guidance revised upwards
Details from the 3Q results conference call
The facts: Following results, management held a conference call.
Our analysis: We highlight the following aspects:
Capex: 2016 full year estimates revised down from EUR3.9bn to EUR3.5bn
and extendable to 2017.
Rating: Positive conclusions expected from the meeting held in October with
the ratings agencies, having covered the actions made since the
presentation of the strategy plan. There is room to improve if necessary with
a hybrid issuance (now requiring a cost of 4.6%) and/or divestment of smaller
non-strategic assets.
Working capital: Improvement expected vs. 9m’16 (EUR1.07bn). Due to:
new finance agreement in Venezuela (credit line to PDVSA to finance
investments for the next 5 years) which is expected to reduce the accounts
pending payment that have increased over EUR200m in the year. For year-
end, working capital could improve vs. 9m’16 by EUR300-400m.
Downstream: Strength continues in the division thus the Group reiterates its
refining margin target of $6.9/b considering the end of the maintenance stops
and improvements in local demand for middle distillates. In this 4Q’16,
refining margins are performing very well, between $7-9/b. For 2017 margins
could even outpace 2016.
Shareholders’ remuneration: We will have to wait for a more stable outlook
in the credit rating before returning to the traditional remuneration and
implementation of share buy-backs to offset the negative, dilutive impact
from scrip dividends. For 2016, awaiting the Board’s approval, we could
consider a similar dividend against 2016 as in 2015 (EUR0.8/share).
Intended financial ratios (Debt/EBITDA 1.2-1.3x) to assure the investment
grade (vs. 2.18x 9m’16).
Efficiencies and synergies: The Company expects to retain 80% of the
target until 2018 onwards (EUR2.1bn) as it is not linked to the current
commodities prices.
Production in upstream: For 2016, in line with the 590-700k boe/d guidance
and no contribution expected from Libya as the asset is still on hold, but in a
good state.
Conclusion: Although results have not surpassed market consensus, there are a
number of positive aspects (improving break-even, sturdy downstream activity
despite the weakness in international margins, improving efficiency and synergies
plans, and cost control in explorations). On the other hand, based on the reduced
capex during the year and the possible smaller divestments we can expect the
investment grade to be maintained as well as remuneration policy. More so, the
expected retention in future efficiencies will bring about a substantial
improvement in operating leverage that will flourish during the more bullish crude
price momentums. Buy recommendation reiterated at current market prices.
Analyst(s):
Sonia Ruiz De Garibay, GVC Gaesco Beka
sonia.ruizdegaribay@gvcgaesco.es
+34 91 436 7841
Buy
12.50
closing price as of 03/11/2016
15.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg REP.MC/REP SM
Market capitalisation (EURm) 18,321
Current N° of shares (m) 1,466
Free float 73%
Daily avg. no. trad. sh. 12 mth 11,109
Daily avg. trad. vol. 12 mth (m) 103,063
Price high 12 mth (EUR) 13.07
Price low 12 mth (EUR) 8.02
Abs. perf. 1 mth 3.78%
Abs. perf. 3 mth 13.95%
Abs. perf. 12 mth 0.64%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 41,460 36,990 44,262
EBITDA (m) 5,013 5,014 5,861
EBITDA margin 12.1% 13.6% 13.2%
EBIT (m) 1,806 2,044 2,650
EBIT margin 4.4% 5.5% 6.0%
Net Profit (adj.)(m) 1,860 1,717 1,940
ROCE 3.0% 3.6% 4.7%
Net debt/(cash) (m) 11,934 8,403 6,471
Net Debt/Equity 0.4 0.3 0.2
Debt/EBITDA 2.4 1.7 1.1
Int. cover(EBITDA/Fin. int) (21.5) 11.1 13.8
EV/Sales 0.6 0.6 0.5
EV/EBITDA 4.6 4.8 3.8
EV/EBITDA (adj.) 4.6 4.8 3.8
EV/EBIT 12.9 11.7 8.3
P/E (adj.) 7.6 10.7 9.4
P/BV 0.5 0.6 0.6
OpFCF yield 11.0% 3.9% 6.1%
Dividend yield 6.4% 6.4% 8.0%
EPS (adj.) 1.33 1.17 1.32
BVPS 20.32 20.45 21.49
DPS 0.80 0.80 1.00
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vvdsvdvsdy
REPSOL Stoxx Oil & Gas (Rebased)Source: Factset
Shareholders: CaixaBank 10%; Sacyr Vallehermoso
8%; Temasek 5%;
Page 40 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Tenaris
Italy/Oil Services Analyser
OIL SERVICES
Tenaris (Neutral) Details from the 3Q results conference call
Better than expected margins in Q3
The facts: the company published its third quarter results yesterday after market
closing. A conference call is scheduled today at 1pm CET.
Our analysis: the company’s results were better than expected because of
sizeably higher margins. The EBIT was negatively affected by USD 10m
severance charges and by a USD 14m positive one-off related to the sale of a
plot of land
Q3-15 Q3-16 Y/Y Q3-16e 9M-15 9M-16e Y/Y
Sales 1,559.0 1,048.0 -32.8% 1,076.4 5,680.0 3,426.0 -39.7%
EBITDA 239.7 153.7 -35.9% 133.4 1,031.4 482.6 -53.2%
margin 15.4% 14.7%
12.4% 18.2% 14.1%
EBIT -319.5 -13.8
-31.6 171.0 -12.0
margin -20.5% -1.3%
-2.9% 3.0% -0.4%
PBT -320.3 16.6
-16.3 172.8 43.8
Net profit -354.9 16.6
-15.5 -33.6 21.0
The company’s net cash at the end of September was USD 1.8bn unchanged
compared to the end of June.
Improvement expected in Q4 16 and H1 17 - the company said that US drilling
activity was gradually increasing and is up 25% from its low in May. In the rest of
the world, drilling activity is close to bottoming out. The recovery, however, will be
gradual while oil inventories remain high and the financial condition of the oil and
gas industry and its suppliers is stretched.
The company also said it expected its sales and EBITDA in the fourth quarter to
benefit from the gradual recovery of demand in North America and a strong level
of shipments in the Middle East and Africa. In the first half of 2017, sales and
EBITDA are expected to continue to benefit from a recovery in sales in North
America but a slowdown in sales to the Middle East and Africa will hold back the
results of the first quarter.
Interim dividend at USD 0.13/sh - the board approved the payment of an
interim dividend of USD 0.13 per share (USD 0.26 per ADS), or approximately
USD 153 million. This compares with USD 0.15 per share paid in November
2015.
.
Conclusion & Action: the company’s results were slightly better than expected
and a recovery is expected soon. However, we believe the present stock price
already assumes a sizeable recovery in the next few quarters.
Analyst(s):
Francesco Sala, Banca Akros
francesco.sala@bancaakros.it
+39 02 4344 4240
Neutral
12.29
closing price as of 03/11/2016
13.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TENR.MI/TEN IM
Market capitalisation (EURm) 14,533
Current N° of shares (m) 1,183
Free float 40%
Daily avg. no. trad. sh. 12 mth 4,001
Daily avg. trad. vol. 12 mth (m) 53,561
Price high 12 mth (EUR) 13.45
Price low 12 mth (EUR) 8.64
Abs. perf. 1 mth -3.23%
Abs. perf. 3 mth 5.13%
Abs. perf. 12 mth 3.54%
Key financials (USD) 12/15 12/16e 12/17e
Sales (m) 7,101 4,749 6,054
EBITDA (m) 1,255 663 1,011
EBITDA margin 17.7% 14.0% 16.7%
EBIT (m) 197 (16) 384
EBIT margin 2.8% nm 6.3%
Net Profit (adj.)(m) 152 (4) 279
ROCE 1.4% -0.1% 2.8%
Net debt/(cash) (m) (1,806) (1,625) (1,276)
Net Debt/Equity -0.2 -0.1 -0.1
Debt/EBITDA -1.4 -2.5 -1.3
Int. cover(EBITDA/Fin. int) (109.0) (54.4) (110.3)
EV/Sales 1.6 2.8 2.3
EV/EBITDA 9.0 20.4 13.7
EV/EBITDA (adj.) 9.0 20.4 13.7
EV/EBIT 57.6 nm 36.1
P/E (adj.) nm nm nm
P/BV 1.2 1.4 1.5
OpFCF yield 8.1% 2.2% 1.1%
Dividend yield 3.3% 3.3% 3.3%
EPS (adj.) 0.13 (0.00) 0.24
BVPS 10.05 9.61 9.40
DPS 0.45 0.45 0.45
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vvdsvdvsdy
TENARIS FTSE MIB (Rebased)Source: Factset
Shareholders: San Faustin 60%;
Page 41 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
adidas
Germany/Personal Goods Analyser
PERSONAL GOODS
adidas (Sell) Better than expected margins in Q3
Great Q3 underpins strong current year forecast
The facts: New CEO Kasper Rorsted presided over his first set of quarterly
results which emerged at the top end of the range of estimates. FY-16 guidance
was repeated, although it was clear during the conference call that annual net
income will be at the top end of the EUR 975m-1bn range (+39% yoy), despite at
least EUR 30m of one-off costs, effectively increasing the guidance by 3% for the
current year and still further going forward with a commitment to rising margins
from these measures.
Our analysis: Q3-16 sales of EUR 5.41bn (+13.8% reported, +17% currency-
adjusted) beat both equinet estimate of EUR 5.28bn and cons. at EUR 5.36bn.
EBIT of EUR 563m (+11.5%) was a clear beat compared to our EUR 549m and
consensus EUR 557m estimates for a 10.4% margin (down 20bp yoy). Moreover,
this outcome included EUR 10m one-off costs and in our view represents a very
good performance against the strongest comparative quarter in 2015.
Meanwhile 2016 will see double-digit sales growth across all regions bar Russia.
Moreover, in 9M the group beat the key competition by taking share in Greater
China (+25%), North America (+20%) and W. Europe (+15%) regions.
Gross margin was hit 90bp in Q3 (10bp in 9M) but this was largely driven by FX
which was negative 490bp in Q3 (400bp in 9M). ie nothing to do with promotional
activity (as was suggested by US sporting brands, aside some minor hit in the golf
segment).
The new CEO is fully committed to the “Creating the New” growth platform
outlined by previous management. Priority on sustainable top line growth and
improved operating margins is confirmed. However no initial 2017 guidance
issued today (contrary to outlook provided in previous years).
Reebok is to move to a new HQ in Boston, reducing head office staff from 950 to
650 (150 to transfer to adidas Portland / 150 jobs to go). This involves EUR 30m
exceptional costs, but we view it as a sign that Rorsted is already getting a grip.
Reebok to evolve as a fitness brand, boosting the top line and improving margins.
Meanwhile the TaylorMade disposal is to be signed by the end of year (could be
loss on disposal) as was previously signalled – might be a sentiment trigger.
The next CMD in March will provide details behind two focus points, namely the
group’s digital transformation and the turnaround of the North American
operations (in last 18 months US footwear market share doubled from 5% to 10%
regaining the Nr. 2 position, but expect above average growth again in 2017).
Conclusion & Action: Following the results, the shares fell 6%, which seems a
bit excessive with good quality 9M results and confirmed guidance. The problem
is that consensus was already at the top end of guidance whilst the exceptional
costs and FX hit restricts the ability to upgrade forecasts (as had been the
whisper word). There may also be some disappointment with lack of further
“general growth principles” from Kasper Rorsted before March.
We will review our model post the call expecting only minor changes for 2016.
However, the Reebok restructuring costs (in 2016 figures) will lead to higher
margins going forward which will push future estimates a little and may increase
our current EUR 128 TP. We will then review the relevance of our Sell rating.
Analyst(s):
Mark Josefson, equinet Bank
mark.josefson@equinet-ag.de
+4969-58997-437
Sell
137.35
closing price as of 03/11/2016
128.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ADSG.DE/ADS GR
Market capitalisation (EURm) 27,497
Current N° of shares (m) 200
Free float 100%
Daily avg. no. trad. sh. 12 mth 931
Daily avg. trad. vol. 12 mth (m) 394,918
Price high 12 mth (EUR) 159.50
Price low 12 mth (EUR) 82.14
Abs. perf. 1 mth -11.10%
Abs. perf. 3 mth -7.13%
Abs. perf. 12 mth 69.15%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 16,915 18,998 20,167
EBITDA (m) 1,433 1,810 1,920
EBITDA margin 8.5% 9.5% 9.5%
EBIT (m) 1,059 1,442 1,525
EBIT margin 6.3% 7.6% 7.6%
Net Profit (adj.)(m) 680 1,000 1,056
ROCE 9.5% 11.8% 11.4%
Net debt/(cash) (m) 92 (57) 88
Net Debt/Equity 0.0 0.0 0.0
Debt/EBITDA 0.1 0.0 0.0
Int. cover(EBITDA/Fin. int) 69.9 (670.3) (179.4)
EV/Sales 1.1 1.5 1.4
EV/EBITDA 12.9 15.3 14.5
EV/EBITDA (adj.) 12.5 15.3 14.5
EV/EBIT 17.4 19.2 18.3
P/E (adj.) 26.7 27.5 26.0
P/BV 3.2 4.3 3.9
OpFCF yield 3.2% 1.6% 0.8%
Dividend yield 1.1% 1.2% 1.3%
EPS (adj.) 3.37 5.00 5.27
BVPS 28.11 31.60 35.05
DPS 1.50 1.60 1.80
70
80
90
100
110
120
130
140
150
160
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
ADIDAS Stoxx Personal Goods (Rebased)Source: Factset
Shareholders: Fidelity 5%; Bruxelles Lambert 5%;
Capital Research 3%;
Page 42 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Hermès Intl.
France/Personal Goods Analyser
PERSONAL GOODS
Hermès Intl. (Neutral) Great Q3 underpins strong current year forecast
Feedback from the conference call on Q3 revenues
The facts: The group provided some details which prompted us to slightly revise
our 2016 forecasts without any significant impact on the valuation.
Our analysis: Management is maintaining its 2016 forecasts: growth of <8% and
a slightly higher EBIT margin (>31.8% in 2015). Leather Goods and Saddlery
(50% of revenues) should be able to post growth of between 13% and 13.5% over
the financial year, which implies Q4 growth of 6/7%. This is a conservative figure
despite the Héricourt anniversary and a more difficult base effect. The BU seems
to be able to grow to around ~10% in Q4, i.e. >14% over the year. The
momentum for the other BUs, totalling the other half of revenues, should benefit
from the announced increase in communication spending (5% of 2016 revenues
vs 4% in H1) to renew with growth at +3% in Q4 vs 0% y-t-d. Silk & Textiles is still
exposed to lower tourist flows to France but should be able to limit the decline vs -
6% y-t-d, resulting from the fall in sales after the Paris terrorist attacks in
November 2015. Perfumes will also benefit from an easier base effect. Overall, by
factoring in a less negative forex effect in Q4, we are revising up our 2016
revenues by at least 1% to EUR5.17bn (FactSet consensus EUR5.16bn) with
organic growth of 7.4% vs 7.7% y-t-d. Forex hedging (+100bp) and the weighting
of Leather Goods and Saddlery should allow for a 120bp improvement in the
gross margin, helping to cover the increased communication items (+40bp vs
+50bp in our previous forecast) and general expenses (+30bp including free
shares), as well as record a 50bp increase in the EBIT margin to 32.3% (forecast
increase of +10bp). With regard to its financial policy (net cash forecast of
EUR2bn at end-2016), the group has confirmed that it is retaining some leeway,
which we think is primarily for significant real-estate programmes.
Conclusion & Action: Valuation currently seems correct. The slowdown phase
in Leather Goods and Saddlery vs a temporary difficulty for the other BUs to
accelerate, could help to recover an entry point of below EUR350.
Analyst(s):
Arnaud Cadart, CM - CIC Market Solutions
arnaud.cadart@cmcic.fr
+33 1 53 48 80 86
Neutral
368.40
closing price as of 03/11/2016
370.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg HRMS.PA/RMS FP
Market capitalisation (EURm) 38,892
Current N° of shares (m) 106
Free float 21%
Daily avg. no. trad. sh. 12 mth 56
Daily avg. trad. vol. 12 mth (m) 28,122
Price high 12 mth (EUR) 398.60
Price low 12 mth (EUR) 291.60
Abs. perf. 1 mth 1.98%
Abs. perf. 3 mth -3.67%
Abs. perf. 12 mth 6.86%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 4,841 5,171 5,583
EBITDA (m) 1,780 1,929 2,044
EBITDA margin 36.8% 37.3% 36.6%
EBIT (m) 1,541 1,668 1,756
EBIT margin 31.8% 32.3% 31.4%
Net Profit (adj.)(m) 972 1,061 1,117
ROCE 54.6% 55.2% 54.3%
Net debt/(cash) (m) (1,548) (2,112) (2,685)
Net Debt/Equity -0.4 -0.5 -0.5
Debt/EBITDA -0.9 -1.1 -1.3
Int. cover(EBITDA/Fin. int) (269.7) (256.2) (197.4)
EV/Sales 6.5 7.1 6.5
EV/EBITDA 17.7 19.1 17.8
EV/EBITDA (adj.) 17.7 19.1 17.8
EV/EBIT 20.4 22.1 20.7
P/E (adj.) 33.8 36.7 34.8
P/BV 8.8 8.7 7.5
OpFCF yield 2.8% 2.3% 2.5%
Dividend yield 0.9% 1.0% 1.2%
EPS (adj.) 9.21 10.05 10.58
BVPS 35.45 42.18 49.11
DPS 3.35 3.70 4.30
280
300
320
340
360
380
400
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
HERMES INTL. Stoxx Personal Goods (Rebased)Source: Factset
Shareholders: Family holding 'H51' and linked 65%;
Nicolas Puech 5%; Groupe Arnault 8%;
Auto detention 1.10%;
Page 43 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
L’Oréal
France/Personal Goods Analyser
PERSONAL GOODS
L’Oréal (Reduce) Feedback from the conference call on Q3 revenues
Q3 revenues slightly higher than expectations
The facts: Yesterday after market, L’Oréal published Q3 revenues of
EUR6,153m, in line with our expectations and those of the Factset consensus
(EUR6,130m).
Our analysis: Organic growth came out at 5.6%, a sequential improvement after
+4.3% in H1. The group continues to benefit from its leading global positions on a
very buoyant make-up market. By geographical region, it enjoyed strong demand
in North America and the awakening of emerging markets (Latin America,
Eastern Europe), whereas Western Europe has been driven down by the French
market. By division: 1) Professional Products posted weak organic growth, slightly
below our Q3 expectations at +0.9%, still affected by a North American market
that is not very dynamic for the group, in a continuation of Q2. Management is
expecting better as of Q4; 2) Consumer Products maintained a strong growth rate
(4.7% l-f-l), in line with our expectations, driven by initiatives in make-up and hair;
3) L’Oréal Luxe and 4) Active Cosmetics did better than expected at respectively
+9.3% and +6.5% l-f-l. L’Oréal Luxe benefitted from global demand for make-up
and fragrance initiatives. Active Cosmetics outperformed a difficult European
market. 5) The Body Shop benefitted from its 40th anniversary to get back in the
black (+2.8%), in line with our expectations. For 2016, the group is expecting to
outperform a growing market by around 4% and improve its profitability.
Conclusion & Action: A publication slightly above expectations in a favourable
context for make-up. A reassuring point is that the Consumer Products division is
still on the right track. L’Oréal remains a safe haven investment with a relatively
limited risk profile and IRR in the medium to long term (6%).
Analyst(s):
Arnaud Cadart, CM - CIC Market Solutions
arnaud.cadart@cmcic.fr
+33 1 53 48 80 86
Reduce
161.60
closing price as of 03/11/2016
150.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg OREP.PA/OR FP
Market capitalisation (EURm) 89,566
Current N° of shares (m) 554
Free float 43%
Daily avg. no. trad. sh. 12 mth 615
Daily avg. trad. vol. 12 mth (m) 119,216
Price high 12 mth (EUR) 176.20
Price low 12 mth (EUR) 144.30
Abs. perf. 1 mth -3.95%
Abs. perf. 3 mth -4.58%
Abs. perf. 12 mth -2.42%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 25,257 25,705 26,872
EBITDA (m) 5,157 5,654 5,965
EBITDA margin 20.4% 22.0% 22.2%
EBIT (m) 4,194 4,498 4,755
EBIT margin 16.6% 17.5% 17.7%
Net Profit (adj.)(m) 3,298 3,365 3,569
ROCE 18.7% 20.1% 21.0%
Net debt/(cash) (m) (618) (2,199) (3,793)
Net Debt/Equity 0.0 -0.1 -0.1
Debt/EBITDA -0.1 -0.4 -0.6
Int. cover(EBITDA/Fin. int) (14.0) (16.1) (15.4)
EV/Sales 3.0 3.0 2.8
EV/EBITDA 14.7 13.7 12.7
EV/EBITDA (adj.) 14.7 13.7 12.7
EV/EBIT 18.1 17.3 15.9
P/E (adj.) 26.4 27.0 25.4
P/BV 3.7 3.6 3.3
OpFCF yield 3.5% 3.7% 3.8%
Dividend yield 1.9% 2.0% 2.1%
EPS (adj.) 5.88 6.00 6.36
BVPS 42.08 45.25 48.70
DPS 3.10 3.20 3.40
140
145
150
155
160
165
170
175
180
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
L'OREAL Stoxx Personal Goods (Rebased)Source: Factset
Shareholders: Famille Bettencourt-Meyers 33%; Nestl¿
23%; Treasury shares 0.53%;
Management & Employees 0.82%;
Page 44 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Beni Stabili
Italy/Real Estate Analyser
REAL ESTATE
Beni Stabili (Accumulate) Q3 revenues slightly higher than expectations
Rental income sizeably down as expected
The facts: the company unveiled yesterday the rents recorded in the first nine
months.
Our analysis: the company no longer disclosed its “full” quarterly results but only
some data on the top line.
The company said that the financial occupancy rate on total portfolio (excluding
development) increased to 95.2% from 93.5% at the end of 2015. The
improvement is mainly due to new contracts. In particular, for 9M 2016 Beni
Stabili reports:
34 new contracts for 28,500sqm and an annual base value of EUR 7m;
17 renewals for 18,200sqm and an annual base value of EUR 6m;
an average maturity of lease agreements of 9.2 years.
As a result the total rental income was EUR 149m vs EUR 160.2m in 9M 2015.
The change is mainly due to reduced rents due to the sales of assets (net of
acquisitions) for EUR 8.2m and reduced rents due to Telecom Italia renegotiation
for EUR 1.9m.
On the like-for-like1 basis, rental income is stable (-0.2%). The Office TI portfolio,
reported a decrease of 2.5% due to the renegotiation of Telecom leases finalized
in 2015. Excluding Telecom Italia portfolio, the rental income like-for-like growth is
solid at +2.1%,
2016 guidance revised upwards - Beni Stabili revised its 2016 outlook and has
now an objective of a 2016 RNI increase by +5% vs slight increase previously
announced.
Conclusion & Action: the rental income (gross) in the first nine months is
consistent with our present estimate. Recommendation and target confirmed.
Analyst(s):
Francesco Sala, Banca Akros
francesco.sala@bancaakros.it
+39 02 4344 4240
Accumulate
0.53
closing price as of 03/11/2016
0.75
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg BNSI.MI/BNS IM
Market capitalisation (EURm) 1,191
Current N° of shares (m) 2,269
Free float 46%
Daily avg. no. trad. sh. 12 mth 2,684
Daily avg. trad. vol. 12 mth (m) 1,159
Price high 12 mth (EUR) 0.75
Price low 12 mth (EUR) 0.48
Abs. perf. 1 mth -6.00%
Abs. perf. 3 mth -7.08%
Abs. perf. 12 mth -29.91%
Key financials (EUR) 12/15 12/16e 12/17e
Gross Rental Income (m) 174 167 170
EBITDA (m) 101 149 152
EBITDA margin 57.9% 89.2% 89.4%
Portfolio Result (m) (19) 2 2
Net Financial Result (149) (68) (66)
Net Profit (adj.)(m) (51) 80 86
Funds From Operations (52) 80 84
EPS (adj.) -0.03 0.04 0.04
DPS 0.02 0.03 0.03
IFRS NAVPS 0.86 0.87 0.89
EPRA NAVPS 1.05 1.05 1.05
Premium/(Discount) (18.8%) (39.9%) (40.9%)
DPS 0.02 0.03 0.03
Earnings adj. yield nm 7.5% 8.0%
Dividend yield 4.6% 4.8% 5.0%
EV/EBITDA 36.2 22.1 21.4
P/E (adj.) nm 13.4 12.5
Int. cover(EBITDA/Fin.int) 0.7 2.2 2.3
Net debt/(cash) (m) 2,064 2,087 2,055
Net Debt/Total Assets 50.2% 50.1% 49.4%
0.45
0.50
0.55
0.60
0.65
0.70
0.75
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
BENI STABILI FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Fonciere des regions 49%; Credit
Agricole 6%;
Page 45 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Sponda
Q3/2015a Growth
EURm Q3a OP Cons. Diff. Low High
Total sales 66.3 66.7 67.0 0% 64 68 56.7 16.9 %
Net operating income 51.5 50.0 0.0 #DIV/0! 0 0 42.2 22.0 %
EPRA EBIT 46.4 44.4 44.9 -1% 43.4 45.5 41.50 11.8%
EPRA EBIT margin 70.0 % 66.5 % 66.9 % 0.0 % 0.0 % 0.0 % 73.2 %
Fair value changes -10.0 0.0 0.5
Financials (net) -12.8 -11.9 -12.1
PTP 24.4 32.5 31.9 2% 30.0 33.5 28.5 -14.4 %
Taxes -1.4 -1.2 0.0 0 0 0 -0.3
EPRA Earnings* 31.0 31.2 29.9 4% 24.0 32.5 27.8 11.4 %
EPRA EPS* 0.09 0.09 -1% 0.07 0.10 # 0.10 -8%
IFRS EPS* 0.09 0.09 0.00 0.07 0.10 # 0.06 -14.8%
EPRA NAVPS 5.38 5.38 5.58 -3.6 %
IFRS NAVPS* 5.05 5.07 4.71 7.2 %
Source: OP and FactSet * After hybrid bond, with new number of shares
Q3/2016e
Sponda
Finland/Real Estate Analyser
REAL ESTATE
Sponda (Accumulate) Rental income sizeably down as expected
Q3 results matched expectations and a technical guidance upgrade
The facts: Sponda reported its Q3 results this morning.
Our analysis: Sponda reported a slightly better net income and EPRA-EBIT in
Q3 than we expected. However, financial costs slightly exceeded our forecast,
and EPRA earnings and EPS were at the expected level. The fair value change
was EUR -10m, which mainly resulted from occupancy changes in Citycenter.
NAV was nearly as we expected 5.05/5.07 (act/OP). The growth in comparable
net income was 2% (1–9/16), the occupancy rate was 89.3% (Q2:89.1%). The
guidance is upgraded mainly as a result of postponed real estate property sales:
NRI 189–194 (prev. 182–192, OP 189), EPRA-earnings 111–116 (prev. 102–114,
OP 113).
Conclusion & Action: In our opinion, the Q3 results that matched expectations
and the technical guidance upgrade do not justify a significant price reaction
today.
Analyst(s):
Matias Rautionmaa, OP Corporate Bank
matias.rautionmaa@op.fi
+358 10 252 4408
Accumulate
4.19
closing price as of 03/11/2016
4.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg SDA1V.HE/SDA1V FH
Market capitalisation (EURm) 1,423
Current N° of shares (m) 340
Free float 85%
Daily avg. no. trad. sh. 12 mth 476
Daily avg. trad. vol. 12 mth (m) 2,396
Price high 12 mth (EUR) 4.80
Price low 12 mth (EUR) 3.36
Abs. perf. 1 mth -9.50%
Abs. perf. 3 mth 6.67%
Abs. perf. 12 mth 9.00%
Key financials (EUR) 12/15 12/16e 12/17e
Gross Rental Income (m) 230 258 260
EBITDA (m) 157 166 168
EBITDA margin 68.0% 64.4% 64.3%
Portfolio Result (m) 24 20 8
Net Financial Result (49) (48) (50)
Net Profit (adj.)(m) 105 113 114
Funds From Operations 105 113 114
EPS (adj.) 0.37 0.36 0.34
DPS 0.19 0.19 0.19
IFRS NAVPS 5.26 5.17 5.33
EPRA NAVPS 5.60 5.49 5.65
Premium/(Discount) (25.4%) (18.9%) (21.4%)
DPS 0.19 0.19 0.19
Earnings adj. yield 8.8% 8.7% 8.0%
Dividend yield 4.5% 4.5% 4.5%
EV/EBITDA 16.8 19.7 19.9
P/E (adj.) 10.6 11.5 12.4
Int. cover(EBITDA/Fin.int) 3.2 3.4 3.4
Net debt/(cash) (m) 1,423 1,758 1,812
Net Debt/Total Assets 41.4% 45.3% 45.4%
3.2
3.4
3.6
3.8
4.0
4.2
4.4
4.6
4.8
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
SPONDA OMXH (Rebased)Source: Factset
Shareholders: Oy Palsk Ab 15%; Keskinäinen
Työeläkevakuutusyhtiö Varma 10%; HC
Fastigheter Holding Oy Ab 10%;
Page 46 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
F-Secure
EURm Q3a vs. Cons. OP Cons.
Corporate security 15.1 #DIV/0! 15.6
Consumer security 23.7 #DIV/0! 24.1
Total sales 38.8 -2% 39.7 39.5
Sales growth
Total EBIT 4.5 -22% 5.1 5.8
Total EBIT margin 11.6 % 12.9 % 14.7 %
PTP 4.5 -15% 5.4 5.3
EPS 0.02 -33% 0.02 0.03
DPS
Source : OP and FactSet
Q3/2016e
F-Secure
Finland/Software & Computer Services Analyser
SOFTWARE & COMPUTER SERVICES
F-Secure (Accumulate) Q3 results matched expectations and a technical guidance upgrade
Growth momentum is building up
The facts: F-Secure’s sales in Q3 were slightly soft compared to expectations.
The organic growth was around 4% whereas in Q2, the company reached growth
at ~7%. The strong growth continued in the corporate market (10% YoY, all
organic) and there was also moderate growth in the consumer market (1%). Q3
EBIT (EUR 4.5m) was clearly below expectations (consensus: EUR 5.8m, OP:
EUR 5.1m) as growth investments weighed on profitability. The company
reiterated its guidance for EBIT in 2016 at EUR 17–21m. F-Secure continues to
invest in accelerating growth also in Q4, and we estimate that the earnings will be
at the lower end of the guidance range (EUR 17.5m).
Our analysis: The big picture of the company is unchanged. The corporate
market is seeing robust growth, and deferred revenue is showing signs of picking
up (Q3 16% YoY vs. Q2 14%). New products have been well received and
according to the company, sales activities related to the RDS product are
increasing rapidly. On the reporting day, F-Secure announced its cooperation with
Salesforce.com, and a new kind of a cloud-based data security will likely be
available to Salesforce’s customers during H1/2017.
The consumer market is stable and we expect its sales to grow by 1–2%.
However, the launch of Sense (a new data security solution for domestic use) is
postponed again, and currently, the service is planned to be launched in H1/2017.
We are optimistic about the demand for the service if F-Secure is able to refine
the product so that it is easy to use. Initially, the service will erode the existing
products in the consumer market but in our opinion, it will offer the company with
an interesting growth opportunity.
Conclusion & Action: We upgrade our forecasts for the corporate market as a
result of the growth in prepayments that was better than anticipated. Following
the revision, our EBIT forecasts for 2017–2018 are upgraded by 7% and 12%.
We expect that the company will reach EBITDA of EUR 35m in 2018 and we
allow EV/EBITDA multiple of 11x to F-Secure (previously 10x) on the basis of the
growth profile. Our target price is upgraded to EUR 3.30 and our recommendation
is now Accumulate.
Analyst(s):
Kimmo Stenvall, OP Corporate Bank
kimmo.stenvall@op.fi
+358 10 252 4561
Accumulate
3.20
closing price as of 03/11/2016
3.30
3.00from Target Price: EUR
from Neutral
Target price: EUR
Share price: EUR
Reuters/Bloomberg FSC1V.HE/FSC1V FH
Market capitalisation (EURm) 499
Current N° of shares (m) 156
Free float 60%
Daily avg. no. trad. sh. 12 mth 155
Daily avg. trad. vol. 12 mth (m) 215
Price high 12 mth (EUR) 3.52
Price low 12 mth (EUR) 2.24
Abs. perf. 1 mth -5.60%
Abs. perf. 3 mth 13.07%
Abs. perf. 12 mth 9.22%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 148 157 168
EBITDA (m) 26 24 29
EBITDA margin 17.4% 15.0% 17.1%
EBIT (m) 20 17 22
EBIT margin 13.4% 11.1% 13.3%
Net Profit (adj.)(m) 12 13 16
ROCE -348.9% 482.3% 175.1%
Net debt/(cash) (m) (94) (101) (114)
Net Debt/Equity -1.2 -1.1 -1.0
Debt/EBITDA -3.7 -4.3 -4.0
Int. cover(EBITDA/Fin. int) (42.8) (29.4) (57.2)
EV/Sales 2.1 2.5 2.3
EV/EBITDA 12.0 16.9 13.4
EV/EBITDA (adj.) 12.0 16.9 13.4
EV/EBIT 15.5 22.8 17.2
P/E (adj.) 34.1 37.4 31.2
P/BV 5.2 5.6 4.6
OpFCF yield 4.5% 2.5% 3.1%
Dividend yield 3.8% 3.1% 3.1%
EPS (adj.) 0.08 0.09 0.10
BVPS 0.49 0.57 0.70
DPS 0.12 0.10 0.10
2.2
2.4
2.6
2.8
3.0
3.2
3.4
3.6
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
F-SECURE OMXH (Rebased)Source: Factset
Shareholders: Siilasmaa Risto 38%; Mutual Pension
Insurance Company Ilmarinen 6%;
Finnish State Pension Fund 5%;
Page 47 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Ei Towers
Italy/Support Services Analyser
SUPPORT SERVICES
Ei Towers (Accumulate) Growth momentum is building up
9m 2016 Post: solid results
The facts: publication of Q3 2016 results.
Our analysis: Q2 results were pretty in line with our expectations and with the H1
trend on revenues and EBITDA (ex the positive exceptional item). Top-line growth
was driven by M&A, organic growth was basically zero. EBITDA was better than
expected, the opex grew less than half the pace of revenues and labour costs
were down by 2% in 9months. Net debt was slightly higher than our expectations
and was down by EUR 7m vs. the end of June; EIT spent EUR 7m in M&A in Q3
on top of EUR 3m recurring capex.
EI Towers 9m 2016 results
Q3 15a Q3 16e Q3 16a Y/Y 9m 15a 9m 16a Y/Y
Core Revenues 60.5 62.5 62.8 3.8% 179.8 186.6 3.8%
EBITDA adj 29.2 30.4 31.7 8.2% 84.9 92.3 8.7%
Margin 48.4% 48.6% 50.4% 2.1% 47.2% 49.5% 2.2%
EBITDA rep 28.8 30.4 31.2 8.3% 81.8 89.4 9.3%
EBIT 19.2 20.0 21.8 13.3% 54.0 60.6 12.4%
Margin 31.7% 32.1% 34.7% 2.9% 30.0% 32.5% 2.5%
Net Income 11.5 11.9 13.4 16.8% 31.7 36.3 14.3%
Net debt 104 115 118 12.7% 104 118 12.7%
Source: Company data, BANCA AKROS estimates
Outlook. FY 2016 targets were confirmed: c EUR 120m EBITDA, implying just
EUR 5m Y/Y growth, of which a couple of million comes from completed M&A.
We expect EUR 125m based on a more aggressive acquisition campaign; indeed
new acquisitions are not reflected in this outlook yet.
M&A. the updated campaign as disclosed last July included 112 new sites, (94 as
of July) contributing an annual EBITDA of EUR 2.7m (EUR 2.2m), at a cost
(Enterprise value) of EUR 21.6m (EUR 18m). The implied multiple was 8x
EV/EBITDA vs. 10x of EIT.
Shareholder remuneration. EIT set its maiden dividend policy with a target of
100% pay-out on net income for the years 2016 to 2018. EIT board also
authorized a buy-back of up to 5% of the company capital; today it has acquired c
0.6% of the outstanding shares. This remuneration is consistent with small M&A
campaign. The target leverage is 2.5x debt/EBITDA.
Conclusion & Action: Solid set of results, guidance confirmed, estimates
unchanged. We confirm our positive rating.
Analyst(s):
Andrea Devita, CFA, Banca Akros
andrea.devita@bancaakros.it
+39 02 4344 4031
Accumulate
42.70
closing price as of 03/11/2016
55.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg EIT.MI/EIT IM
Market capitalisation (EURm) 1,207
Current N° of shares (m) 28
Free float 58%
Daily avg. no. trad. sh. 12 mth 28
Daily avg. trad. vol. 12 mth (m) 3,910
Price high 12 mth (EUR) 59.55
Price low 12 mth (EUR) 41.59
Abs. perf. 1 mth -11.72%
Abs. perf. 3 mth -6.61%
Abs. perf. 12 mth -22.50%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 245 250 275
EBITDA (m) 113 125 139
EBITDA margin 46.2% 50.0% 50.7%
EBIT (m) 74 85 99
EBIT margin 30.1% 34.0% 36.2%
Net Profit (adj.)(m) 49 51 61
ROCE 6.6% 7.1% 8.7%
Net debt/(cash) (m) 130 109 74
Net Debt/Equity 0.2 0.2 0.1
Debt/EBITDA 1.2 0.9 0.5
Int. cover(EBITDA/Fin. int) 13.1 22.7 25.3
EV/Sales 7.1 5.0 4.4
EV/EBITDA 15.4 9.9 8.7
EV/EBITDA (adj.) 15.2 9.9 8.7
EV/EBIT 23.6 14.6 12.1
P/E (adj.) 34.2 23.6 19.7
P/BV 2.8 1.8 1.8
OpFCF yield 1.1% 1.7% 7.1%
Dividend yield 0.0% 4.2% 5.0%
EPS (adj.) 1.74 1.81 2.16
BVPS 21.62 23.43 23.79
DPS 0.00 1.80 2.15
35
40
45
50
55
60
ott 15 nov 15 dic 15 gen 16 feb 16 mar 16 apr 16 mag 16 giu 16 lug 16 ago 16 set 16 ott 16 nov 16
vvdsvdvsdy
EI TOWERS FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Mediaset 40%; Mr Falciai 1.80%;
Page 48 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Fiera Milano
Italy/Support Services Analyser
SUPPORT SERVICES
Fiera Milano (Accumulate) 9m 2016 Post: solid results
Improvement expected in Q3 2016
The facts: Fiera Milano is due to report its third quarter results today.
Our analysis: we summarize our preview in the following table:
Q3-15 Q3-16e Y/Y 9M-15 9M-16e Y/Y
Revenues 46.8 43.4 -7.4% 228.4 182.0 -20.3%
EBITDA -9.5 -5.4
17.2 15.3 -11.2%
margin -20.4% -12.5%
7.5% 8.4%
EBIT -12.2 -8.0
0.6 5.8
margin -26.1% -18.4%
0.2% 3.2%
PBT -14.1 -8.5
-3.4 5.2
Source: Company data, Banca Akros estimates
We expect the company’s third quarter results, normally very weak because of a
unfavourable seasonality, to show a smaller loss compared to Q3 2015; this is
mainly the result of the cost saving plans the company has put in place in the last
few quarters.
Conclusion & Action: we expect the company’s results to show a sizeable
improvement compared to Q3 2015. Recommendation and target confirmed.
Analyst(s):
Francesco Sala, Banca Akros
francesco.sala@bancaakros.it
+39 02 4344 4240
Accumulate
1.51
closing price as of 03/11/2016
2.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg FIMI.MI/FM IM
Market capitalisation (EURm) 111
Current N° of shares (m) 73
Free float 25%
Daily avg. no. trad. sh. 12 mth 97
Daily avg. trad. vol. 12 mth (m) 35
Price high 12 mth (EUR) 3.46
Price low 12 mth (EUR) 1.36
Abs. perf. 1 mth -7.06%
Abs. perf. 3 mth -5.02%
Abs. perf. 12 mth -56.71%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 337 239 308
EBITDA (m) 38 8 34
EBITDA margin 11.2% 3.2% 11.2%
EBIT (m) 12 (6) 21
EBIT margin 3.6% nm 6.8%
Net Profit (adj.)(m) 1 (5) 13
ROCE 9.2% -3.8% 14.7%
Net debt/(cash) (m) 12 21 (9)
Net Debt/Equity 0.1 0.3 -0.1
Debt/EBITDA 0.3 2.7 -0.3
Int. cover(EBITDA/Fin. int) 10.8 5.1 68.8
EV/Sales 0.4 0.4 0.3
EV/EBITDA 3.9 13.8 2.4
EV/EBITDA (adj.) 3.9 13.8 2.4
EV/EBIT 12.4 nm 3.9
P/E (adj.) nm nm 8.4
P/BV 2.0 1.4 1.2
OpFCF yield 17.5% -7.4% 26.6%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) 0.02 (0.06) 0.18
BVPS 1.16 1.09 1.27
DPS 0.00 0.00 0.00
1.0
1.5
2.0
2.5
3.0
3.5
4.0
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
FIERA MILANO FTSE Italy STAR (Rebased)Source: Factset
Shareholders: Ente Autonomo Fiera 62%; Camera di
Commercio, Industria, Artigianato e
Agricoltura di Milano 7%; Others 6%;
Page 49 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Spanish Telecommunications
Analyser
TELECOMMUNICATIONS
Improvement expected in Q3 2016 SPAIN: Orange changes its commercial strategy
The facts: Orange Spain announced repositioning its convergent offer focused
on high-end.
Our analysis: “Canguro” tariffs have been renamed “Love”, including new
services but maintaining pries. The offers are: “Love Familia Esencial” (2
mobile lines + FttH 300Mb EUR76.95/month, FttH 50Mb EUR64.95/month),
“Love Familia Sin Límites” (2 mobile lines + FttH 300Mb EUR91.95/month, FttH
50Mb EUR79.95/month) and a bond “Love Datos”. The last offer is an
additional 2GB mobile data extendable to 7Gb available for the prior previous
offers mentioned.
The common denominator in these packages is mobile data can be shared by
various family members and have a 3 month promotion period with a 50%
discount over the total price. We recall that in ORA football is paid apart and
implies an additional EUR9.95/month (the league/The Match/Copa del Rey)
and EUR5/month for BeIN Sports (Champions).
Both tariffs are available with symmetric optic fibre of 50Mbps or 300Mbps, 4G+
mobile technology and Orange TV (Netflix free during 3 months when
Films+Series is subscribed).
The main difference with peers is that with ORA clients can decide not to
subscribe Orange TV in the convergent packages and/or subscribe the
football package giving customers capacity to choose. On the other hand,
the number of channels offered is much less than Telefonica’s Fusión (all
convergent packages include football except the basic Fusión Contigo (50-
300Mb).
Conclusion: High-end competition increases against TEF with ORA’s
more flexible packages. MasMovil’s market nitch remains untouched
considering traditional MRO’s high prices.
In general we could say that the main points in favour of the three large MRO’s
high-end (FTTH 300Mbps symmetrical) are: Movistar (Fusión; contents/TV,
greater FTTH coverage); Vodafone (One more Gb in mobile data) and Orange
(Love: versatile when choosing the bundle). The prices are relatively similar if
we consider the characteristics of each package.
NB: 83% of ORA Spain’s fixed BB base was convergent at 9m’16, +2.4pp Y/Y.
In Spain, the French operator has captured +194k BB customers with FTTH
technology in 3Q’16 (share 30%, 9m homes passed, 2.5x in a year) and 1.41m
accumulated. Fibre represented 36% of the total fixed BB base and grew
+21pp in one year (bearing in mind the inorganic growth due to the acquisition
of Jazztel).
---------- Stoxx Telecommunications,
DJ Stoxx TMI rebased on sector
Analyst(s):
Victor Peiro Pérez, GVC Gaesco Beka
victor.peiro@gvcgaesco.es
+34 91 436 7812
Eduardo Garcia Arguelles, GVC Gaesco Beka
eduardo.garciaarguelles@gvcgaesco.es
+34 914 367 810
280
300
320
340
360
380
400
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
Page 50 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Vodafone
United Kingdom/Telecommunications Analyser
TELECOMMUNICATIONS
Vodafone (Accumulate) SPAIN: Orange changes its commercial strategy
H1 2016 Pre: we expect good results
The facts: H1 2016 preview (publication on November 15).
Our analysis: We expect service revenue trend to remain close to 2% Y/Y
growth on organic basis (cons. +1.9%), vs. +2.2% in Q1. The management has
already anticipated a modest slow-down in the quarter (drag on roaming, tough
comps in South Africa and Spain), which should lead to further acceleration in
Q3. By country, we expect modest deviation in most European operations, with
Italy probably improving by 50bp Q/Q (+1.2% in Q1), extrapolating Wind results,
Spain slightly worse (+1.3% in Q1) due to company commercial policies, UK likely
improving as the billing and migration issues have been addressed and Germany
in line with the +1.6% of the previous quarter. A further slow-down in India (from
+6.4%) is generally expected given the pre-empting pricing initiatives for the entry
of Jio last month. In Turkey, we wonder about the impact of the recent unrest on
trading conditions (+19.5% in Q1). FX Impact. Vodafone has moved to Euro
reporting since the publication of Q1 2016/17. The depreciation of the Pound (-
15.5% Y/Y average in Q2) just impacts the reported figures of the UK unit, which
accounts for just 13.5% of groups revenues and 10.8% of EBITDA. We note that
other currencies are still down Y/Y vs. the EURO but definitely improving on a
sequential basis from Q1 (TRL, Rupee and especially the Rand which was down
21% Y/Y in Q1). We expect EBITDA margin to be stable or slightly up,
Vodafone is targeting a solid underlying growth on a full-year basis which be
worth more than double the negative impact of regulation (H1 already reflects in
full the roaming effect) and increased technology costs. The focus is on UK where
the already low margin (21.7% last year) could be further pressured (hopefully still
above 20%). Italy should be stable also looking at the results of Wind and
Fastweb. Spain is affected by content costs and could be down by 1/2pp from
26.5% of H1 15/16. We expect a strong FCF in the region of EUR 2bn (it was
EUR 0.7bn negative last year), as Vodafone has completed its Spring project in
March 2016 and is now targeting "mid-teens" capex/sales ratio vs. 21/22% in the
past couple of years. We expect net debt in the region of EUR 39bn, up by EUR
2.1bn vs. the March 31 level, taking into account EUR 2.8bn dividend and EUR
0.79bn spectrum disbursement in Turkey. As announced in early October, VOD
has spent further EUR 2.74bn for Indian spectrum which will be booked in H2.
Vod H1 2016/17 preview (management view)
H1
2015/16a
H2
2015/16a
YTM
2016
H1
2016/17e
Revenues 28,151 27,779 55,930 27,112
EBITDA reported 8,039 7,801 15,840 7,817
Margin 28.6% 28.1% 28.3% 28.8%
adj operating profit 2,281 1,974 4,255 2,247
Adjusted net income 928 914 1,842 867
EPS adj 3.50 3.40 6.90 3.25
DPS 5.11 10.52 15.63 5.27
Capex (excl Spectrum) -5,149 -6,514 -11,663 -4,400
FCF** -752 2,135 1,383 2,044
Net debt 39,249 36,897 36,897 38,988
Source: Company data, ESN estimates (*) excluding spectrum
Full-year guidance. The guidance for the YTM 2017 was reiterated with Q1 KPIs
publication last July and includes: organic EBITDA +3/6%, to EUR 15.7/16.2bn;
Capex/sales ratio in the "mid-teens", FCF >EUR 4.0bn. The co intends to
increase DPS going forward, from the baseline level of EUR 14.48c in the YTM
2016.
Conclusion & Action: Solid results expected. We remain positive on the stock.
Analyst(s):
Andrea Devita, CFA, Banca Akros
andrea.devita@bancaakros.it
+39 02 4344 4031
Accumulate
217.50
closing price as of 03/11/2016
250.00
Target Price unchanged
Recommendation unchanged
Target price: GBp
Share price: GBp
Reuters/Bloomberg VOD.L/VOD LN
Market capitalisation (GBPm) 57,701
Current N° of shares (m) 26,529
Free float 100%
Daily avg. no. trad. sh. 12 mth 51,396
Daily avg. trad. vol. 12 mth (m) 170,376
Price high 12 mth (GBp) 239.70
Price low 12 mth (GBp) 200.20
Abs. perf. 1 mth -3.29%
Abs. perf. 3 mth -5.54%
Abs. perf. 12 mth 0.97%
Key financials (EUR) 03/16 03/17e 03/18e
Sales (m) 55,464 54,411 55,476
EBITDA (m) 15,840 16,099 16,577
EBITDA margin 28.6% 29.6% 29.9%
EBIT (m) 4,195 4,319 4,888
EBIT margin 7.6% 7.9% 8.8%
Net Profit (adj.)(m) 1,842 1,622 2,093
ROCE 3.3% 3.8% 4.4%
Net debt/(cash) (m) 36,897 31,203 31,893
Net Debt/Equity 0.4 0.4 0.4
Debt/EBITDA 2.3 1.9 1.9
Int. cover(EBITDA/Fin. int) 8.5 9.0 9.8
EV/Sales 2.1 1.8 1.8
EV/EBITDA 7.3 6.2 6.1
EV/EBITDA (adj.) 7.3 6.2 6.1
EV/EBIT 27.4 23.2 20.6
P/E (adj.) 41.3 39.9 30.9
P/BV 0.9 0.8 0.8
OpFCF yield -5.9% 16.0% 6.4%
Dividend yield 6.4% 6.6% 6.8%
EPS (adj.) 0.07 0.06 0.08
BVPS 3.11 3.03 2.94
DPS 0.16 0.16 0.17
160
170
180
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200
210
220
230
240
ott 15 nov 15 dic 15 gen 16 feb 16 mar 16 apr 16 mag 16 giu 16 lug 16 ago 16 set 16 ott 16 nov 16
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VODAFONE Stoxx Telecommunications (Rebased)Source: Factset
Shareholders:
Page 51 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
EDP
Portugal/Utilities Analyser
UTILITIES
EDP (Accumulate) H1 2016 Pre: we expect good results
9M16 results in line with expectations
The facts: Yesterday after the market close EDP published the 9M16 results and
today will hold a conference call at 11.30 GMT. Overall the results were in line
with our forecasts with the Brazilian unit contribution ahead of expectations.
Our analysis: In the 9M16 consolidated EBITDA dropped 3% YoY to EUR
2,893m. Excluding net one-off impacts YoY adjusted EBITDA grew by 10% YoY
reflecting a higher contribution from the liberalized activities (strong hydro
resources and price volatility), renewables and EDP Brasil (+19% YoY in local
currency and +4% YoY in EUR terms with a negative impact from the forex
evolution).
Notwithstanding the decrease net debt and in the average cost of debt from 4.7%
in 9M15 to 4.5% in 9M16 net financial results increased 1% to EUR 635m,
namely due to lower financial income related to regulatory receivables (-EUR 48m
YoY) and to impairments in the BCP stake (EUR 31m).
Net profit dropped 16% to EUR 615m. If adjusted for extraordinary items
registered the bottom-line would have improved by 17% YoY in the 9M16 to EUR
667m.
Total capex in the 9M16 was EUR 1,160m vs EUR 1,218m in the 9M15; the net
investments dropped 53% YoY from EUR 1,069m to due to the cash-in of the
asset rotation deals at EDPR’s level.
The net debt was EUR 15,9bn as of September 2016, down EUR 1,417m since
the FY2015 corresponding to a net debt/EBITDA of 4.2x. Excluding regulatory
receivables the adjusted net debt/EBITDA is 3.9x.
Conclusion & Action: No surprises from this set of results that were in line with
forecasts. Despite the non-recurrent events that affect YoY comparisons we
consider that the diversified profile of EDP should be highlighted with the growth
in renewables and in liberalized activities compensating the decline in other
areas. Additionally we underline that at current market prices the company
presents a dividend yield of 6.6%.
Analyst(s):
Helena Barbosa, Caixa-Banco de Investimento
helena.barbosa@caixabi.pt
+351 21 389 6831
Accumulate
2.91
closing price as of 03/11/2016
3.65
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg EDP.LS/EDP PL
Market capitalisation (EURm) 10,637
Current N° of shares (m) 3,657
Free float 58%
Daily avg. no. trad. sh. 12 mth 6,608
Daily avg. trad. vol. 12 mth (m) 15,989
Price high 12 mth (EUR) 3.46
Price low 12 mth (EUR) 2.57
Abs. perf. 1 mth -0.44%
Abs. perf. 3 mth -2.64%
Abs. perf. 12 mth -15.66%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 15,517 15,672 15,829
EBITDA (m) 3,924 3,643 3,776
EBITDA margin 25.3% 23.2% 23.9%
EBIT (m) 2,443 2,163 2,264
EBIT margin 15.7% 13.8% 14.3%
Net Profit (adj.)(m) 913 859 913
ROCE 6.0% 5.3% 5.6%
Net debt/(cash) (m) 18,026 17,870 17,367
Net Debt/Equity 1.5 1.5 1.4
Debt/EBITDA 4.6 4.9 4.6
Int. cover(EBITDA/Fin. int) 4.7 5.1 5.5
EV/Sales 2.1 1.9 1.9
EV/EBITDA 8.1 8.3 7.9
EV/EBITDA (adj.) 8.1 8.3 7.9
EV/EBIT 13.1 14.0 13.1
P/E (adj.) 13.3 12.4 11.7
P/BV 1.4 1.2 1.2
OpFCF yield 21.8% 10.9% 14.3%
Dividend yield 6.4% 6.5% 6.5%
EPS (adj.) 0.25 0.23 0.25
BVPS 2.37 2.42 2.48
DPS 0.19 0.19 0.19
EUR m 9M15 9M16 YoY 9M16e Dev %
EBITDA 2,991 2,893 -3% 2,876 1%
LT Contracted Generation 466 395 -15% 405 -2%
Renew ables 782 847 8% 857 -1%
Liberalised Activities Iberia 276 458 66% 462 -1%
Regulated Netw orks Iberia 810 749 -8% 746 0%
Brazil 655 464 -29% 436 6%
Others & Adjustments 2 -21 n.m -30 -32%
Depreciation & Provisions -1,067 -1,100 3% -1,114 -1%
EBIT 1,924 1,793 -7% 1,762 2%
Financial Results -626 -635 1% -623 2%
Other Financials -25 -3 -88% -5 -40%
EBT 1,273 1,155 -9% 1,134 2%
Taxes -236 -300 27% -295 2%
Extraord. Contribution -61 -61 0% -59 0%
Minority Interests -240 -179 -26% -161 11%
Net Profit 736 615 -16% 619 -1%
2.50
2.60
2.70
2.80
2.90
3.00
3.10
3.20
3.30
3.40
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
EDP Stoxx Utilities (Rebased)Source: Factset
Shareholders: China Three Gorges 21%; Capital Group
Companies 10%; Oppidum 7%; Senfora
4%; BCP Group 2%; Sonatrach 2%;
Qatar Investment 2%; José de Mello
Page 52 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Snam
Italy/Utilities Analyser
UTILITIES
Snam (Neutral) 9M16 results in line with expectations
On the gas!
The facts: Snam and Italgas have confirmed the efficacy of the demerger and the
consequent start of trading of the ordinary shares of Italgas on the MTA
(Electronic Share Market) from 7th November 2016.
Our analysis: CONSOB (the Italian market watchdog) has provided its green light
and thus the listing is due to take place next Monday. Both Snam and Italgas will
be included in the main Italian index (FTSE MIB). Therefore, the index is going to
be composed of 41 companies instead of 40.
The next index review is due to take place on 19th
December. We believe the
Index will remain made of 41 members until that date.
Conclusion & Action: we continue to believe in the strong rationale of the spin-
off, all to the benefit of both companies: for Snam, the spin-off provides the
company with additional fire-power to follow its international aim (debt/total assets
at around 49% with the possibility to increase it to about 55%); for Italgas, the
spin-off is due to provide the company with the independence needed to freely
face the gas tender process (debt/total assets at about 59%).
Analyst(s):
Dario Michi, Banca Akros
dario.michi@bancaakros.it
+39 02 4344 4237
Neutral
4.53
closing price as of 03/11/2016
5.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg SRG.MI/SRG IM
Market capitalisation (EURm) 16,748
Current N° of shares (m) 3,697
Free float 69%
Daily avg. no. trad. sh. 12 mth 13,033
Daily avg. trad. vol. 12 mth (m) 67,010
Price high 12 mth (EUR) 5.53
Price low 12 mth (EUR) 4.53
Abs. perf. 1 mth -7.48%
Abs. perf. 3 mth -10.30%
Abs. perf. 12 mth -6.67%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 3,649 3,464 3,524
EBITDA (m) 2,799 2,660 2,718
EBITDA margin 76.7% 76.8% 77.1%
EBIT (m) 1,950 1,758 1,799
EBIT margin 53.4% 50.8% 51.0%
Net Profit (adj.)(m) 1,238 1,044 1,125
ROCE 6.8% 5.6% 5.9%
Net debt/(cash) (m) 13,779 14,209 14,275
Net Debt/Equity 1.8 1.8 1.8
Debt/EBITDA 4.9 5.3 5.3
Int. cover(EBITDA/Fin. int) 7.4 7.3 7.5
EV/Sales 8.3 8.5 8.4
EV/EBITDA 10.8 11.1 10.9
EV/EBITDA (adj.) 10.8 11.1 10.9
EV/EBIT 15.5 16.8 16.5
P/E (adj.) 14.4 16.0 14.9
P/BV 2.4 2.2 2.1
OpFCF yield 4.4% 2.7% 4.0%
Dividend yield 5.5% 4.6% 4.8%
EPS (adj.) 0.33 0.28 0.30
BVPS 2.05 2.10 2.20
DPS 0.25 0.21 0.22
4.0
4.2
4.4
4.6
4.8
5.0
5.2
5.4
5.6
ott 15 nov 15 dic 15 gen 16 feb 16 mar 16 apr 16 mag 16 giu 16 lug 16 ago 16 set 16 ott 16 nov 16
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SNAM Stoxx Utilities (Rebased)Source: Factset
Shareholders: CDP 31%;
Page 53 of 59
Produced & Distributed by the Members of ESN (see last page of this report)
Terna
Italy/Utilities Analyser
UTILITIES
Terna (Neutral) On the gas!
We expect resilient results in 9M 2016 Y/Y
The facts: Terna is due to release its 9M 2016 results today.
Our analysis: Terna ought to post slightly improving results YoY:
EURm 9M 15A 9M 16E Y/Y
Revenues 1,517 1,549 2.1%
Regulated revenues 1,261 1,309 3.8%
Dispatching activities + other regulated 106 104 -1.9%
Non-regulated revenues 138 125 -9.4%
IFRIC 12 13 11 -15.4%
EBITDA 1,161 1,164 0.3%
EBITDA margin 76.5% 75.1%
EBIT 799 762 -4.6%
Pre-tax 682 701 2.8%
Net Profit 455 473 4.0%
Source: Company data, Banca Akros estimates
Results ought to be affected by the lower allowed return set by the Authority. It is
also worth noting that AEEGSI has set 2016 reference-regulated revenues at
nearly EUR 1,800m. On this basis we derived regulated revenues of EUR
1,390m, i.e. roughly 75% of the total for 9M 2016 (the binomial tariff entails the
equal distribution of revenues throughout the year). On top of this we have to
consider the contribution of FS network (EUR 30m) and other regulated revenues
for about EUR 20m. We also remind readers that Terna is almost immune to the
volume dynamics (it accounts for a maximum of 10% of the regulated revenues,
i.e. EUR 180m of the tariff is exposed to the volume dynamic). In the first nine
months of 2016 volumes were down by around 3.1% YoY. The impact is around
EUR 4.2m.
EBITDA ought to be affected by higher costs (FS network impact for around EUR
42m on a yearly basis as set by AEEGSI, while Tamini ought to account for
roughly EUR 79m in 9M 16). These negatives are due to be partially offset by the
efficiency programme the company is successfully carrying on. This explains the
different EBITDA margin YoY.
EBIT ought to be hit by higher depreciation YoY (EUR 402m vs. EUR 362m). This
is mainly due to the investments made and the impact of FS (this ought to
account for around EUR 17m, i.e. EUR 674m RAB for 29 years).
Net profit should be up YoY, notwithstanding the decreasing EBIT trend
expected YoY. In fact, we are projecting nearly EUR 61m of financial charges vs.
EUR 117m posted in 9M 2015. Tax rate ought to be almost flat YoY at 33%.
Net debt should reach around EUR 7.9bn, down vs. around EUR 8.2bn posted as
at the end of H1 16. According to our estimates, the average cost of debt in 9M
16 was around 1.3% (it was 2.4% in 2015 and the company guidance points to an
average of about 1.5% in 2016). Based on our estimates, Terna invested circa
EUR 520m in 9M 2016 vs. EUR 702m in 9M 2015.
Interim dividend. Terna ought to announce an interim dividend of about EUR
0.07 per share (flat YoY). The dividend policy points to a 3% CAGR over 2015-
2019. The yield is about 1.6% at the current market price.
Conclusion & Action: we confirm our neutral stance on Terna, we continue to
appreciate the management quality and the company solidity, but the high
premium the company is trading at (based on our estimated around 35% vs. year-
end expected equity RAB) are affecting the stock appeal in our view.
Analyst(s):
Dario Michi, Banca Akros
dario.michi@bancaakros.it
+39 02 4344 4237
Neutral
4.22
closing price as of 03/11/2016
4.90
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TRN.MI/TRN IM
Market capitalisation (EURm) 8,482
Current N° of shares (m) 2,010
Free float 70%
Daily avg. no. trad. sh. 12 mth 7,041
Daily avg. trad. vol. 12 mth (m) 23,929
Price high 12 mth (EUR) 5.08
Price low 12 mth (EUR) 4.22
Abs. perf. 1 mth -7.21%
Abs. perf. 3 mth -11.68%
Abs. perf. 12 mth -9.44%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 2,082 2,097 2,185
EBITDA (m) 1,539 1,517 1,604
EBITDA margin 73.9% 72.4% 73.4%
EBIT (m) 1,022 987 1,055
EBIT margin 49.1% 47.0% 48.3%
Net Profit (adj.)(m) 596 574 637
ROCE 5.5% 5.1% 5.5%
Net debt/(cash) (m) 8,003 8,306 8,438
Net Debt/Equity 2.4 2.4 2.3
Debt/EBITDA 5.2 5.5 5.3
Int. cover(EBITDA/Fin. int) 10.9 13.7 13.7
EV/Sales 8.6 8.1 7.9
EV/EBITDA 11.6 11.3 10.7
EV/EBITDA (adj.) 11.6 11.3 10.7
EV/EBIT 17.5 17.3 16.3
P/E (adj.) 16.1 14.8 13.3
P/BV 2.9 2.4 2.3
OpFCF yield 0.2% 1.2% 3.3%
Dividend yield 4.7% 4.9% 5.0%
EPS (adj.) 0.30 0.29 0.32
BVPS 1.65 1.74 1.85
DPS 0.20 0.21 0.21
3.8
4.0
4.2
4.4
4.6
4.8
5.0
5.2
Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16 Nov 16
vvdsvdvsdy
TERNA Stoxx Utilities (Rebased)Source: Factset
Shareholders: Cassa Depositi e Prestiti 30%;
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European Coverage of the Members of ESN
A ero space & D efense M em(*) Bcp CBI Kemira OPG Corbion NIBC
Airbus Group CIC Bnp Paribas CIC Linde EQB Danone CIC
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Latecoere CIC Bpi CBIElectro nic & Electrical
EquipmentM em(*) Enervit BAK
Leonardo BAK Caixabank GVC Alstom CIC Fleury M ichon CIC
Lisi CIC Commerzbank EQB Areva CIC Forfarmers NIBC
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Safran CIC Creval BAK Legrand CIC La Doria BAK
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Air France Klm CIC Ing Group NIBC Rexel CIC Naturex CIC
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Faurecia CIC Ubi Banca BAK Banca Sistema BAK Vranken Pommery M onopole CIC
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Fiat Chrysler Automobiles BAK B asic R eso urces M em(*) Binckbank NIBC F o o d & D rug R etailers M em(*)
Landi Renzo BAK Acerinox GVC Bolsas Y M ercados Espanoles Sa GVC Ahold NIBC
Leoni EQB Altri CBI Capman OPG Carrefour CIC
M ichelin CIC Arcelormittal GVC Christian Dior CIC Casino Guichard-Perrachon CIC
Nokian Tyres OPG Corticeira Amorim CBI Cir BAK Dia GVC
Norma Group EQB Ence GVC Comdirect EQB Jeronimo M artins CBI
Piaggio BAK Europac GVC Corp. Financiera Alba GVC Kesko OPG
Plastic Omnium CIC M etka IBG Deutsche Boerse EQB M arr BAK
Sogefi BAK M etsä Board OPG Deutsche Forfait EQB M etro CIC
Stern Groep NIBC M ytilineos IBG Eq OPG Sligro NIBC
Valeo CIC Outokumpu OPG Euronext CIC Sonae CBI
Volkswagen EQB Semapa CBI Ferratum EQB General Industria ls M em(*)
B anks M em(*) Ssab OPG Finecobank BAK 2G Energy EQB
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Abn Amro Group Nv NIBC Surteco EQB Hypoport Ag EQB Accell Group NIBC
Aktia OPG The Navigator Company CBI M lp EQB Ahlstrom OPG
Alpha Bank IBG Tubacex GVC Ovb Holding Ag EQB Arcadis NIBC
Banca Carige BAK Upm-Kymmene OPG Patrizia Ag EQB Aspo OPG
Banca M ps BAK B io techno lo gy M em(*) Rallye CIC Huhtamäki OPG
Banco Popolare BAK 4Sc EQB Unipol Gruppo Finanziario BAK Kendrion NIBC
Banco Popular GVC Cytotools Ag EQB F o o d & B everage M em(*) Nedap NIBC
Banco Sabadell GVC Epigenomics Ag EQB Acomo NIBC Pöyry OPG
Banco Santander GVC Wilex EQB Atria OPG Prelios BAK
Bankia GVC C hemicals M em(*) Bonduelle CIC Rubis CIC
Bankinter GVC Air Liquide CIC Campari BAK Saf-Holland EQB
Bbva GVC Holland Colours NIBC Coca Cola Hbc Ag IBG Serge Ferrari Group CIC
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Siegfried Holding Ag EQB H o useho ld Go o ds M em(*) Axa CIC Thermador Groupe CIC
Tkh Group NIBC Bic CIC Banca M edio lanum BAK Titan Cement IBG
Wendel CIC De Longhi BAK Catto lica Assicurazioni BAK Trevi BAK
General R etailers M em(*) Fila BAK Delta Lloyd NIBC Uponor OPG
Banzai BAK Osram Licht Ag EQB Generali BAK Vicat CIC
Beter Bed Holding NIBC Seb Sa CIC Hannover Re EQB Vinci CIC
Elumeo Se EQB Zumtobel Group Ag EQB M apfre Sa GVC Yit OPG
Fielmann EQB Industria l Engineering M em(*) M unich Re EQB M edia M em(*)
Folli Fo llie Group IBG Accsys Technologies NIBC Nn Group Nv NIBC Ad Pepper EQB
Fourlis Holdings IBG Aixtron EQB Sampo OPG Alma M edia OPG
Groupe Fnac Sa CIC Ansaldo Sts BAK Talanx Group EQB Atresmedia GVC
Inditex GVC Biesse BAK Unipolsai BAK Axel Springer EQB
Jumbo IBG Cargotec Corp OPGM aterials, C o nstruct io n &
InfrastructureM em(*) Brill NIBC
M acintosh NIBC Cnh Industrial BAK Abertis GVC Cofina CBI
Rapala OPG Danieli BAK Acs GVC Cts Eventim EQB
Stockmann OPG Datalogic BAK Aena GVC Editoriale L'Espresso BAK
Yoox Net-A-Porter BAK Deutz Ag EQB Aeroports De Paris CIC Gl Events CIC
H ealthcare M em(*) Dmg M ori Seiki Ag EQB Astaldi BAK Havas CIC
Amplifon BAK Duro Felguera GVC Atlantia BAK Impresa CBI
Bayer EQB Emak BAK Bilfinger Se EQB Ipsos CIC
Biotest EQB Exel Composites OPG Boskalis Westminster NIBC Jcdecaux CIC
Diasorin BAK Gesco EQB Buzzi Unicem BAK Lagardere CIC
Fresenius EQB Ima BAK Caverion OPG M 6-M etropole Television CIC
Fresenius M edical Care EQB Interpump BAK Cramo OPG M ediaset BAK
Gerresheimer Ag EQB Kone OPG Eiffage CIC M ediaset Espana GVC
Korian CIC Konecranes OPG Ellaktor IBG Notorious Pictures BAK
M erck EQB Kuka EQB Eltel OPG Nrj Group CIC
Orio la-Kd OPG M anz Ag EQB Ezentis GVC Publicis CIC
Orion OPG M ax Automation Ag EQB Fcc GVC Rcs M ediagroup BAK
Orpea CIC M etso OPG Ferrovial GVC Relx NIBC
Pihlajalinna OPG Outotec OPG Fraport EQB Rtl Group EQB
Recordati BAK Pfeiffer Vacuum EQB Heidelberg Cement Ag CIC Sanoma OPG
Rhoen-Klinikum EQB Ponsse OPG Heijmans NIBC Solocal Group CIC
H o tels, T ravel & T o urism M em(*) Prima Industrie BAK Hochtief EQB Spir Communication CIC
Accor CIC Prysmian BAK Imerys CIC Syzygy Ag EQB
Autogrill BAK Smt Scharf Ag EQB Italcementi BAK Telegraaf M edia Groep NIBC
Beneteau CIC Technotrans EQB Lafargeholcim CIC Teleperformance CIC
Elior CIC Valmet OPG Lehto OPG Tf1 CIC
Europcar CIC Wärtsilä OPG Lemminkäinen OPG Ubisoft CIC
I Grandi Viaggi BAK Zardoya Otis GVC M aire Tecnimont BAK Vivendi CIC
Iberso l CBI Industria l T ranspo rtat io n M em(*) M ota Engil CBI Wolters Kluwer NIBC
Intralo t IBG Bollore CIC Obrascon Huarte Lain GVC Oil & Gas P ro ducers M em(*)
Kotipizza OPG Caf GVC Ramirent OPG Eni BAK
M elia Hotels International GVC Ctt CBI Royal Bam Group NIBC Galp Energia CBI
Nh Hotel Group GVC Deutsche Post EQB Sacyr GVC Gas Plus BAK
Opap IBG Hhla EQB Saint Gobain CIC Hellenic Petro leum IBG
Snowworld NIBC Logwin EQB Salini Impregilo BAK M aurel Et Prom CIC
Sodexo CIC Insurance M em(*) Sias BAK M otor Oil IBG
Sonae Capital CBI Aegon NIBC Sonae Industria CBI Neste Corporation OPG
Trigano CIC Allianz EQB Srv OPG Petrobras CBI
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Qgep CBI Wcm Ag EQB Enav BAK Falck Renewables BAK
Repsol GVC R enewable Energy M em(*) Fiera M ilano BAK Fortum OPG
Total CIC Daldrup & Soehne EQB Lassila & Tikanoja OPG Gas Natural Fenosa GVC
Oil Services M em(*) Gamesa GVC Openjobmetis BAK Hera BAK
Bourbon CIC So ftware & C o mputer Services M em(*)T echno lo gy H ardware &
EquipmentM em(*)Iberdro la GVC
Cgg CIC Affecto OPG Asm International NIBC Iren BAK
Fugro NIBC Akka Technologies CIC Asml NIBC Public Power Corp IBG
Saipem BAK Alten CIC Besi NIBC Red Electrica De Espana GVC
Sbm Offshore NIBC Altran CIC Elmos Semiconductor EQB Ren CBI
Technip CIC Amadeus GVC Ericsson OPG Snam BAK
Tecnicas Reunidas GVC Assystem CIC Gemalto CIC Terna BAK
Tenaris BAK Atos CIC Gigaset EQB
Vallourec CIC Basware OPG Ingenico CIC
Vopak NIBC Cenit EQB Nokia OPG
P erso nal Go o ds M em(*) Comptel OPG Roodmicrotec NIBC
Adidas EQB Ctac NIBC Slm Solutions EQB
Adler M odemaerkte EQB Digia OPG Stmicroelectronics BAK
Amer Sports OPG Docdata NIBC Suess M icrotec EQB
Basic Net BAK Econocom CIC Teleste OPG
Cie Fin. Richemont CIC Ekinops CIC T eleco mmunicat io ns M em(*)
Geox BAK Esi Group CIC Acotel BAK
Gerry Weber EQB Exprivia BAK Deutsche Telekom EQB
Hermes Intl. CIC F-Secure OPG Drillisch EQB
Hugo Boss EQB Gft Technologies EQB Elisa OPG
Interparfums CIC Ict Group NIBC Euskaltel GVC
Kering CIC Indra Sistemas GVC Freenet EQB
L'Oreal CIC Nemetschek Se EQB Kpn Telecom NIBC
Luxottica BAK Neurones CIC M asmovil GVC
Lvmh CIC Nexus Ag EQB Nos CBI
M arimekko OPG Novabase CBI Oi CBI
M oncler BAK Ordina NIBC Ote IBG
Puma EQB Psi EQB Tele Columbus EQB
Safilo BAK Reply BAK Telecom Italia BAK
Salvatore Ferragamo BAK Rib Software EQB Telefonica GVC
Sarantis IBG Seven Principles Ag EQB Telia OPG
Technogym BAK Software Ag EQB Tiscali BAK
Tod'S BAK Sopra Steria Group CIC United Internet EQB
R eal Estate M em(*) Tie Kinetix NIBC Vodafone BAK
Adler Real Estate EQB Tieto OPG Utilit ies M em(*)
Beni Stabili BAK Tomtom NIBC A2A BAK
Citycon OPG Visiativ CIC Acciona GVC
Deutsche Euroshop EQB Wincor Nixdorf EQB Acea BAK
Grand City Properties EQB Suppo rt Services M em(*) Albioma CIC
Hispania Activos Inmobiliarios GVC Asiakastieto Group OPG Direct Energie CIC
Igd BAK Batenburg NIBC Edp CBI
Lar España GVC Bureau Veritas S.A. CIC Edp Renováveis CBI
Realia GVC Cellnex Telecom GVC Enagas GVC
Sponda OPG Dpa NIBC Endesa GVC
Technopolis OPG Edenred CIC Enel BAK
Vib Vermoegen EQB Ei Towers BAK Eydap IBG
LEGEND: BAK: Banca Akros; CIC: CM CIC Market Solutions; CBI: Caixa-Banca de Investimento; GVC: GVC Gaesco Beksa, SV, SA; EQB: Equinet bank; IBG: Investment Bank of
Greece, NIBC: NIBC Markets N.V: OPG: OP Corporate Bank:; as of 1st September 2016
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List of ESN Analysts (**)
Ari Agopyan CIC +33 1 53 48 80 63 ari.agopyan@cmcic.fr Victoria Kruchevska (CFA,FRM) EQB +49 69 5 89 97 416 victoria.kruchevska@equinet-ag.de
Artur Amaro CBI +351 213 89 6822 artur.amaro@caixabi.pt Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 jeanchristophe.lefevremoulenq@cmcic.fr
Helena Barbosa CBI +351 21 389 6831 helena.barbosa@caixabi.pt Konstantinos Manolopoulos IBG +30 210 817 3388 kmanolopoulos@ibg.gr
Javier Bernat GVC +34 91 436 7816 jav ier.bernat@gvcgaesco.es Dario Michi BAK +39 02 4344 4237 dario.michi@bancaakros.it
Dimitris Birbos IBG +30 210 81 73 392 dbirbos@ibg.gr Marietta Miemietz CFA EQB +49-69-58997-439 marietta.miemietz@equinet-ag.de
Agnès Blazy CIC +33 1 53 48 80 67 agnes.blazy@cmcic.fr José Mota Freitas, CFA CBI +351 22 607 09 31 mota.freitas@caixabi.pt
Charles Edouard Boissy CIC +33 01 53 48 80 81 charlesedouard.boissy@cmcic.fr Henri Parkkinen OPG +358 10 252 4409 henri.parkkinen@op.fi
Rafael Bonardell GVC +34 91 436 78 171 rafael.bonardell@gvcgaesco.es Victor Peiro Pérez GVC +34 91 436 7812 victor.peiro@gvcgaesco.es
Louise Boyer CIC +33 1 53 48 80 68 louise.boyer@cmcic.fr Francis Prêtre CIC +33 4 78 92 02 30 francis.pretre@cmcic.fr
Giada Cabrino, CIIA BAK +39 02 4344 4092 giada.cabrino@bancaakros.it Francesco Previtera BAK +39 02 4344 4033 francesco.prev itera@bancaakros.it
Arnaud Cadart CIC +33 1 53 48 80 86 arnaud.cadart@cmcic.fr Jari Raisanen OPG +358 10 252 4504 jari.raisanen@op.fi
Niclas Catani OPG +358 10 252 8780 niclas.catani@op.fi Hannu Rauhala OPG +358 10 252 4392 hannu.rauhala@op.fi
Pierre Chedeville CIC +33 1 53 48 80 97 pierre.chedeville@cmcic.fr Matias Rautionmaa OPG +358 10 252 4408 matias.rautionmaa@op.fi
Emmanuel Chevalier CIC +33 1 53 48 80 72 emmanuel.chevalier@cmcic.fr Eric Ravary CIC +33 1 53 48 80 71 eric.ravary@cmcic.fr
David Consalvo CIC +33 1 53 48 80 64 david.consalvo@cmcic.fr Iñigo Recio Pascual GVC +34 91 436 7814 inigo.recio@gvcgaesco.es
Edwin de Jong NIBC +312 0 5508569 edwin.de.jong@nibc.com Gerard Rijk NIBC + 31 (0)20 550 8572 gerard.rijk@nibc.com
Martijn den Drijver NIBC +312 0 5508636 martijn.den.drijver@nibc.com André Rodrigues CBI +351 21 389 68 39 andre.rodrigues@caixabi.pt
Christian Devismes CIC +33 1 53 48 80 85 christian.devismes@cmcic.fr Jean-Luc Romain CIC +33 1 53 48 80 66 jeanluc.romain@cmcic.fr
Andrea Devita, CFA BAK +39 02 4344 4031 andrea.devita@bancaakros.it Jochen Rothenbacher, CEFA EQB +49 69 58997 415 jochen.rothenbacher@equinet-ag.de
Sebastian Droste EQB +49 69 58 99 74 34 sebastian.droste@equinet-ag.de Vassilis Roumantzis IBG +30 2108173394 vroumantzis@ibg.gr
Enrico Esposti, CIIA BAK +39 02 4344 4022 enrico.esposti@bancaakros.it Sonia Ruiz De Garibay GVC +34 91 436 7841 sonia.ruizdegaribay@gvcgaesco.es
Rafael Fernández de Heredia GVC +34 91 436 78 08 rafael.fernandezdeheredia@gvcgaesco.es Antti Saari OPG +358 10 252 4359 antti.saari@op.fi
Enrico Filippi, CEFA BAK +39 02 4344 4071 enrico.filippi@bancaakros.it Paola Saglietti BAK +39 02 4344 4287 paola.saglietti@bancaakros.it
Gabriele Gambarova BAK +39 02 43 444 289 gabriele.gambarova@bancaakros.it Francesco Sala BAK +39 02 4344 4240 francesco.sala@bancaakros.it
Eduardo Garcia Arguelles GVC +34 914 367 810 eduardo.garciaarguelles@gvcgaesco.es Holger Schmidt, CEFA EQB +49 69 58 99 74 32 holger.schmidt@equinet-ag.de
Alexandre Gérard CIC +33 1 53 48 80 93 alexandre.gerard@cmcic.fr Cengiz Sen EQB +4969 58997 435 cengiz.sen@equinet-ag.de
Philipp Häßler, CFA EQB +49 69 58997 414 philipp.haessler@equinet-ag.de Pekka Spolander OPG +358 10 252 4351 pekka.spolander@op.fi
Simon Heilmann EQB +49 69 58 997 413 simon.heilmann@equinet-ag.de Kimmo Stenvall OPG +358 10 252 4561 kimmo.stenvall@op.fi
Dr. Knud Hinkel EQB + 49 69 58997 419 knud.hinkel@equinet-ag.de Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 nsviriadi@ibg.gr
Marcell Houben NIBC +31 20 550 8649 marcell.houben@nibc.com Luigi Tramontana BAK +39 02 4344 4239 luigi.tramontana@bancaakros.it
Carlos Jesus CBI +351 21 389 6812 carlos.jesus@caixabi.pt Johan van den Hooven NIBC +312 0 5508518 johan.van.den.hooven@nibc.com
Mark Josefson EQB +4969-58997-437 mark.josefson@equinet-ag.de Kévin Woringer CIC +33 1 53 48 80 69 kevin.woringer@cmcic.fr
(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts
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ESN Recommendation System The ESN Recommendation System is Absolute. It means that each stock is rated on the basis of
a total return, measured by the upside potential (including dividends and capital reimbursement)
over a 12 month time horizon.
The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories: Buy
(B), Accumulate (A), Neutral (N), Reduce (R) and Sell (S).
Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate the
stocks as Rating Suspended (RS) or Not Rated (NR), as explained below.
Meaning of each recommendation or rating:
Buy: the stock is expected to generate total return of over 15% during the next 12 months time horizon
Accumulate: the stock is expected to generate total return of 5% to 15% during the next 12 months time horizon
Neutral: the stock is expected to generate total return of -5% to +5% during the next 12 months time horizon
Reduce: the stock is expected to generate total return of -5% to -15% during the next 12 months time horizon
Sell: the stock is expected to generate total return under -15% during the next 12 months time horizon
Rating Suspended: the rating is suspended due to a change of analyst covering the stock or a capital operation (take-over bid, SPO, …) where the issuer of the document (a partner of ESN) or a related party of the issuer is or could be involved
Not Rated: there is no rating for a company being floated (IPO) by the issuer of the document (a partner of ESN) or a related party of the issuer
Certain flexibility on the limits of total return bands is permitted especially during higher phases of volatility on the markets
ESN Ratings Breakdown
Date and time of production: 4 November 2016 9:20am CET First date and time of dissemination: 4 November 2016 9:24am CET
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For disclosure upon “conflicts of interest” on the companies under
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and individual disclaimers please refer to www.esnpartnership.eu and
to each ESN Member websites:
www.bancaakros.it regulated by the CONSOB - Commissione Nazionale per le Società e la Borsa
www.caixabi.pt regulated by the CMVM - Comissão do Mercado de Valores Mobiliários
www.cmcicms.com regulated by the AMF - Autorité des marchés financiers
www.equinet-ag.de regulated by the BaFin - Bundesanstalt für Finanzdienstleistungsaufsicht
www.ibg.gr regulated by the HCMC - Hellenic Capital Market Commission
www.nibcmarkets.com regulated by the AFM - Autoriteit Financiële Markten
www.op.fi regulated by the Financial Supervision Authority
www.valores.gvcgaesco.es regulated by CNMV - Comisión Nacional del Mercado de Valores
Members of ESN (European Securities Network LLP)
Caixa-Banco de Investimento
Rua Barata Salgueiro, nº 33
1269-057 Lisboa
Portugal
Phone: +351 21 313 73 00
Fax: +351 21 389 68 98
GVC Gaesco Beka, SV, SA
C/ Marques de Villamagna 3
28001 Madrid
Spain
Phone: +34 91 436 7813
Investment Bank of Greece
32 Aigialeias Str & Paradissou,
151 25 Maroussi,
Greece
Tel: +30 210 81 73 383
Banca Akros S.p.A.
Viale Eginardo, 29
20149 MILANO
Italy
Phone: +39 02 43 444 389
Fax: +39 02 43 444 302
NIBC Markets N.V.
Nieuwezijds Voorburgwal 162
P.O.Box 235
1000 AE Amsterdam
The Netherlands
Phone: +31 20 550 8500
Fax: +31 20 626 8064
CM - CIC Market Solutions
6, avenue de Provence
75441 Paris
Cedex 09
France
Phone: +33 1 53 48 80 78
Fax: +33 1 53 48 82 25
equinet Bank AG
Gräfstraße 97
60487 Frankfurt am Main
Germany
Phone:+49 69 – 58997 – 212
Fax:+49 69 – 58997 – 299
OP Corporate Bank plc
P.O.Box 308
Teollisuuskatu 1, 00013 Helsinki
Finland
Phone: +358 10 252 011
Fax: +358 10 252 2703
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