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ESN Analyser
Investment Research
Page 1 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
ESN Analyser
Investment Research
11 November 2016
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
RECOMMENDATION CHANGES
Merlin Properties Initiation of Coverage: Buy A sure bet
STRATEGY NEWS
European Strategy News: Finnish companies’ Q3 results: Earnings increasing but less than expected
NEWS BY SECTOR
ALTERNATIVE ENERGY
Gamesa (Neutral) 3Q’16 results. 2016 guidance revised positively.
AUTOMOBILES & PARTS
Landi Renzo (Reduce) Weak Q3 - Measures to rebalance the financial position envisaged
Norma Group (Buy) Weak growth should prove to be a temporary issue
BANKS
BPER (Buy) Q3 16 results
Credem (Neutral) Q3 2016 results preview
Poste Italiane (Accumulate) Poste will growth up to 24.9% in Anima in 2017 – Agreement to the jointly bid for Anima
UBI Banca (Buy) Q3 16 results
UniCredit (Accumulate) Q3 16 results
FINANCIAL SERVICES
Anima (Buy) 3Q 2016 preview
Azimut (Accumulate) 3Q16 results: in line with expectations; buyback could be in the cards
Banca Ifis (Neutral) Q3 16 results
FOOD & BEVERAGE
Parmalat (Neutral) 9M 16 results
ESN Analyser
Investment Research
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GENERAL INDUSTRIALS
Nedap (Accumulate) Slowdown in growth in 2H; good margin improvement
Prelios (Neutral) Q3 results in line
GENERAL RETAILERS
Stockmann (Accumulate) Sales continued to decline in October
HEALTHCARE
DiaSorin (Accumulate) Q3 sales and profitability slightly higher than expected
HOUSEHOLD GOODS
De Longhi (Neutral) Q3: weak top line but good cash flow generation
Fila (Buy) 9M 2016 results preview
INDUSTRIAL ENGINEERING
CNH Industrial (Accumulate) NAFTA 4WD tractor sales rebounded for the first time since 2014
Datalogic (Accumulate) Q3 2016 results preview
Interpump (Accumulate) Q3 sales slightly lower than expected but strong profitability
Prima Industrie (Buy) Q3 to confirm top line and profitability improvement
INSURANCE
Allianz (Buy) Strong Q3 results well above expectations
Cattolica Assicurazioni (Neutral) 3Q 2016 preview
Generali (Accumulate) Conference call: some highlights
MAPFRE SA (Neutral) Q3 2016 Earnings: Slightly better
UnipolSai (Accumulate) 3Q16 net profit in line with estimates
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Atlantia (Accumulate) Good results expected in Q3
Boskalis Westminster (Neutral) Trading update in line; Offshore Energy looks good
Buzzi Unicem (Accumulate) Good results as expected
Maire Tecnimont (Accumulate) USD 328m new award in Malaysia
Sacyr (Buy) Good growths in 9m’16
Salini Impregilo (Accumulate) 2016 targets confirmed
OIL & GAS PRODUCERS
Hellenic Petroleum (Buy) 3Q16 financial results – Solid performance exceeding estimates
QGEP (Buy) 3Q16 results: lower production from Manati
OIL SERVICES
Tecnicas Reunidas (Accumulate) 3Q’16 results in line with forecasts.
REAL ESTATE
Merlin Properties (Buy) A sure bet
WCM AG (Accumulate) WCM acquires further retail portfolio for EUR 98.2m
SOFTWARE & COMPUTER SERVICES
Reply (Neutral) 9m 2016 Post: slowing growth
ESN Analyser
Investment Research
Page 3 of 64
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SUPPORT SERVICES
ENAV (Accumulate) Good Q3 results confirming business resiliency
TECHNOLOGY HARDWARE & EQUIPMENT
Nokia (Buy) Nokia’s CMD to be held in Barcelona on 15 November
TELECOMMUNICATIONS
Sector News SPAIN: More regulation “to boost” FttH deployments
Acotel (Reduce) 9m 2016 Post: higher sales drop/lower EBITDA loss
OTE Hellenic Telecom (Buy) Forecast-beating 3Q16 results thanks to Greek and Romanian fixed units
TRAVEL & LEISURE
Autogrill (Buy) Sound results as expected – 2016 guidance confirmed
UTILITIES
A2A (Buy) Increasing results in 9M16 YoY (with one-offs)
Acea (Accumulate) Increasing results YoY also net of one-offs
Enel (Accumulate) Better than expected results in 9M 2016 YoY
Falck Renewables (Buy) Results were a tad better than expected in 9M 16 YoY
Iren (Buy) Increasing results in 9M 2016 YoY
ESN Top Picks
Page 4 of 64
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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
10 / 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 40.29 49.20 22% 18/ 08/ 2016 41.96 41.96 - 4 . 0 % -5.0%
CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 66.60 76.00 14% 17/ 10/ 2016 66.30 66.30 0 . 5 % 0.6%
I NDI TEX Spain General Ret ailers Long Accumulat e 30.49 36.10 18% 18/ 08/ 2016 30.93 30.33 0 . 5 % -0.6%
KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.72 3.55 31% 20/ 09/ 2016 2.82 2.82 - 3 . 6 % -4.9%
P OS TE I TALI ANE It aly Banks Long Accumulat e 6.01 7.90 31% 03/ 11/ 2016 5.96 5.96 0 . 9 % -0.6%
RELX Net herlands Media Long Accumulat e 14.14 16.75 18% 27/ 10/ 2016 15.14 15.14 - 6 . 6 % -5.0%
S TORA ENS O Finland Basic Resources Long Accumulat e 8.94 9.30 4% 17/ 10/ 2016 8.16 8.16 9 . 6 % 9.7%
TECHNI P France Oil Services Long Buy 64.08 67.00 5% 18/ 102016 58.60 58.60 9 . 4 % 9.0% 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
10 / 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 11.85 14.00 18% 18/ 08/ 2016 11.71 11.71 1. 2 % 0.1%
ALTRAN France Sof t ware & Comput er Services Long Buy 12.47 15.00 20% 17/ 10/ 2016 13.20 13.20 - 5 . 5 % -5.4%
CAF Spain Indust r ial Transport at ion Long Accumulat e 352.55 390.00 11% 18/ 08/ 2016 342.80 342.80 2 . 8 % 1.8%
DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.71 12.30 27% 22/ 08/ 2016 8.10 8.10 19 . 9 % 18.6%
FOLLI FOLLI E GROUP Greece General Ret ailers Long Buy 20.85 27.70 33% 07/ 11/ 2016 20.91 20.91 - 0 . 3 % -2.7%
FORFARM ERS Net herlands Food & Beverage Long Buy 6.89 8.30 21% 28/ 09/ 2016 6.48 6.48 6 . 3 % 5.1%
FUGRO Net herlands Oil Services Long Buy 15.86 19.00 20% 20/ 10/ 2016 15.56 15.56 2 . 0 % 3.2%
J UM BO Greece General Ret ailers Long Buy 12.06 14.99 24% 21/ 10/ 2016 12.62 12.35 - 2 . 3 % -0.7%
NH HOTEL GROUP Spain Travel & Leisure Long Buy 3.97 6.80 71% 18/ 08/ 2016 4.00 4.00 - 0 . 7 % -1.8%
NOS Port ugal Telecommunicat ions Long Buy 5.75 7.00 22% 17/ 10/ 2016 5.89 5.89 - 2 . 5 % -2.4%
RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 13.43 14.00 4% 20/ 06/ 2016 8.29 8.29 6 2 . 0 % 55.4%
TECHNOGYM It aly Personal Goods Long Buy 3.80 4.95 30% 15/ 06/ 2016 3.78 3.78 0 . 6 % -7.6%
THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.63 4.60 75% 22/ 06/ 2016 2.72 2.72 - 3 . 2 % -5.8%
YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 25.29 31.30 24% 17/ 10/ 2016 27.82 27.82 - 9 . 1% -9.0%
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.
Roadshows
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SUBJECT LOCATION EVENT DATE
Repsol Vienna Cross-country Company Roadshow 21/11/2016
Mapfre Lisboa Cross-country Company Roadshow 22/11/2016
Repsol Frankfurt Cross-country Company Roadshow 22/11/2016
AKKA TECHNOLOGIES Geneva Cross-country Company Roadshow 24/11/2016
Corporate Events
Page 6 of 64
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Corporate Events today
Source: Precise
CompanyBloomberg
codeDate Event Type Description
ALLIANZ ALV GY 11/11/16 Results Q3 2016 Earnings conference call / Webcast {press}
ALV GY 11/11/16 Results Q3 2016 Results
ALV GY 11/11/16 Results Q3 2016 Earnings conference call / Webcast {analyst}
ANIMA ANIM IM 11/11/16 Results Q3 2016 Results
ATLANTIA ATL IM 11/11/16 Results Q3 2016 Results
BIESSE BSS IM 11/11/16 Results Q3 2016 Results
BOSKALIS WESTMINSTER BOKA NA 11/11/16 Trading Update Q3 2016 Trading statement
CATTOLICA ASSICURAZIONI CASS IM 11/11/16 Results Q3 2016 Results
CREDEM CE IM 11/11/16 Results Q3 2016 Results
DATALOGIC DAL IM 11/11/16 Results Q3 2016 Results
EMAK EM IM 11/11/16 Results Q3 2016 Results
EXPRIVIA XPR IM 11/11/16 Results Q3 2016 Results
FILA FILA IM 11/11/16 Results Q3 2016 Results
HISPANIA ACTIVOS INMOBILIARIOSHIS SM 11/11/16 Results Q3 2016 Results
LA DORIA LD IM 11/11/16 Results Q3 2016 Results
OPENJOBMETIS OJM IM 11/11/16 Results Q3 2016 Results
PIHLAJALINNA PIHLIS FH 11/11/16 Analyst Meeting Q3 2016 Press & analyst meeting {Finnish}
PIHLIS FH 11/11/16 Results Q3 2016 Results
PRIMA INDUSTRIE PRI IM 11/11/16 Results Q3 2016 Results
SIAS SIS IM 11/11/16 Results Q3 2016 Results
STOCKMANN STCBV FH 11/11/16 Sales October Sales
UBI BANCA UBI IM 11/11/16 Results Q3 2016 Earnings conference call
UBI IM 11/11/16 Results Q3 2016 Results
ESN Tactical Sector Views
Page 7 of 64
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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
Page 8 of 64
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Finnish Strategy Update Summary
Analyser
$SECTOR$
European Strategy News: Finnish companies’ Q3 results: Earnings increasing but less than expected
Finnish companies’ Q3 results: Earnings increasing but less than expected
The Q3 earnings season of Finnish companies was weaker than predicted as only about 30% of the companies that are
included in our coverage exceeded consensus expectations in terms of sales and EBIT. The results deviate considerably
from the US S&P 500 and European Stoxx 600 indices in which surprises were more or less positive. The difference is at
least partly due to the fact that the Helsinki stock exchange is driven by industrial engineering companies and information
technology. However, major companies again succeeded better than average in relation to expectations, as the total EBIT
of companies enlisted in the Helsinki stock exchange exceeded consensus by as much as 3.3%, even though surprises
were negative in terms of their numbers.
In relation to the comparison period, the earnings performance was positive even though achieving growth was still
difficult. The aggregate sales of the Finnish companies in our coverage declined by 0.6% YoY in Q3 2016 while operating
profits grew by 4.3%. Nokia has a significant effect on the results as its comparable sales and EBIT reduced notably.
Nokia excluded, sales increased by 0.5% YoY in Q3 and operating profits rose by 7.6%. The earnings momentum has
remained positive as operating profits increased in Q2 by 4.6% YoY and by only 0.6% in Q1 YoY. Measured by numbers,
the sales and EBIT increased in slightly more than 50% of the companies in Q3 in relation to the comparison period.
Similar to the previous quarter, among the sectors, basic metals, media and retail performed especially well relative to
both the benchmark and expectations. Consumer staples and construction (excl. troubled Caverion) also showed notable
profit improvement, but this was in line with expectations. In terms of business sectors, there was weak performance in
relation to both expectations and the comparison period in the capital goods, information technology and energy sectors.
Analyst(s): Antti Saari, OP Corporate Bank, [email protected], +358 10 252 4359
+
Sources: OP, Factset, Inquiry Financial, Reuters, SM E Direkt, Vara Research
Finnish companies Q3 2016 results vs. consensus
23 24 28
8 9
8
45 42 38
0%
25%
50%
75%
100%
Sales EBIT EPS
Above expecta tions In line Below expectation s
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Gamesa
Spain/Alternative Energy Analyser
ALTERNATIVE ENERGY
Gamesa (Neutral) Finnish companies’ Q3 results: Earnings increasing but less than expected
3Q’16 results. 2016 guidance revised positively.
The facts: The Company yesterday presented 3Q’16 results and, again,
improved the 2016 guidance.
Our analysis: Gamesa reported the following 9m’16 results.
Results came in above consensus (EUR330m EBIT and EUR212m net profit
9m’16). These good results lean on solid revenues growth and ongoing cost
control.
Gamesa improved its guidance on MWs sold in 2016 by +7.5%, from >=4,000
MW to >=4,300 MW. And also increased its EBIT guidance from >=EUR430m to
EUR450-470m, that is between 5% and 9%. EBIT margin would be close to 10%.
Despite fears regarding changes in the US market, Gamesa mentioned that the
PTC agreements approved months ago by the two US parties will go ahead.
Gamesa expects to sell in US 400MW in 2016, with a substantially increase in
sales in 2017.
On the other hand, there is greater pressure on prices and Gamesa is prepared
to compete, thanks to the ongoing cost reduction which makes the Company
more competitive.
The outlook on India, Gamesa’s main market, is still positive. Despite some
negative regulatory changes, there are measures that compensate these, at least
partially. Hence, the Company expects the market to stabilise or grow a little.
Other markets where Gamesa is obtaining good results in tenders are Mexico and
Cuba.
Conclusion: Good 3Q’16 results and 2016e. Although there is no guidance
regarding 2017, Gamesa expects good order intake in 4Q’16 and in 1Q’17, with
2017 also improving visibility. The focus is still on the merger process with
Siemens Wind Power. The operation is subject to the approval of the Anti-Trust
Tribune and conformation on behalf of the CNMV that Siemens would not have to
formulate a mandatory takeover bid once the merger is completed.
Analyst(s):
Iñigo Recio Pascual, GVC Gaesco Beka
+34 91 436 7814
Neutral
17.59
closing price as of 10/11/2016
20.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg GAM.MC/GAM SM
Market capitalisation (EURm) 4,912
Current N° of shares (m) 279
Free float 69%
Daily avg. no. trad. sh. 12 mth 2,390
Daily avg. trad. vol. 12 mth (m) 105,362
Price high 12 mth (EUR) 21.77
Price low 12 mth (EUR) 13.78
Abs. perf. 1 mth -15.49%
Abs. perf. 3 mth -11.63%
Abs. perf. 12 mth 15.00%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 3,504 4,340 4,786
EBITDA (m) 520 689 743
EBITDA margin 14.8% 15.9% 15.5%
EBIT (m) 323 440 482
EBIT margin 9.2% 10.1% 10.1%
Net Profit (adj.)(m) 177 273 304
ROCE 26.5% 32.0% 30.6%
Net debt/(cash) (m) (301) (437) (548)
Net Debt/Equity -0.2 -0.2 -0.3
Debt/EBITDA -0.6 -0.6 -0.7
Int. cover(EBITDA/Fin. int) 15.5 25.9 38.1
EV/Sales 1.1 1.0 0.9
EV/EBITDA 7.4 6.1 5.6
EV/EBITDA (adj.) 7.4 6.1 5.6
EV/EBIT 11.9 9.6 8.6
P/E (adj.) 24.9 18.0 16.2
P/BV 2.9 2.8 2.5
OpFCF yield 4.0% 3.6% 3.6%
Dividend yield 0.9% 1.4% 1.4%
EPS (adj.) 0.64 0.98 1.09
BVPS 5.47 6.28 7.12
DPS 0.15 0.24 0.25
GAMESA: 9M16 RESULTS
EUR m 9M15 % sles 9M16 % sles %y/y 9M16e % dev
Sales 2,533 100% 3,339 100% 32% 3,234 3.2%
EBITDA 353 14.0% 520 15.6% 47% 497 4.7%
Depreciation -73 -2.9% -91 -2.7% 24% -88 3.6%
Provisions -75 -3.0% -89 -2.7% 19% -82 7.8%
EBIT (*) 205 8.1% 340 10.2% 66% 327 4.2%
N. Profit 122 4.8% 225 6.7% 84% 215 4.8%
Source: GVC Gaesco Beka estimates.(*) Adwen is not included
10
12
14
16
18
20
22
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
GAMESA IBEX 35 (Rebased)Source: Factset
Shareholders: Iberdrola 20%; Blackrock Inc. 3%;
Norges Bank 3%;
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Landi Renzo
Italy/Automobiles & Parts Analyser
AUTOMOBILES & PARTS
Landi Renzo (Reduce) 3Q’16 results. 2016 guidance revised positively.
Weak Q3 - Measures to rebalance the financial position envisaged
The facts: LR released weak Q3 results yesterday during trading hours. LR
confirmed the FY16 guidance (revenues -> EUR 180/190m; Adj. EBITDA ->
EUR 4/6m); the guidance implies that the top line will fall by ~3/19% Y/Y in Q4,
while the Adj. EBITDA implied for Q4 is ~EUR 1.4/3.4m (EUR 2.6m in Q4 2015).
LR BoD "appointed Mediobanca as financial adviser (…) in the context of" a "plan
for the optimisation of the Group's financial structure". LR "has instructed the
financial adviser to arrange preliminary meetings with the main financial creditors
of the Group aimed at exploring possible measures aimed at rebalancing the
overall financial position of the Group on the basis of the mentioned
optimisation plan. The above activity is part of a wider project the Company is
carrying out since a while, aimed at providing the Group with a more balanced
financial structure in line with the industrial plan expected results."
Finally, LR BoD appointed Mr Cristiano Musi as General Manager (from 12
December 2016) and Managing Director later on. Mr Musi has a vast experience
in sectors adjacent to the automotive one and significant managerial skills.
Our analysis: here follow the Q3 results and our estimates.
EUR m Q3 16 Q3 15 Δ% Y/Y Q3 16e 9M 16 9M 15
Revenues 42.7 48.1 -8.9% 43.8 132.5 147.1
EBITDA 0.7 1.8 -12.0% 1.5 (0.8) 1.9
EBITDA margin 1.7% 3.7%
3.6% -0.6% 1.3%
D & A (4.1) (3.8) 0.0% (3.8) (12.1) (11.5)
EBIT (3.4) (2.0) 10.3% (2.2) (13.0) (9.6)
EBIT margin -8.0% -4.3%
-5.2% -9.9% -6.6%
Financial charges (1.5) (2.4) -58.8% (1.0) (3.4) (3.6)
Pre-tax profit (4.9) (4.5) -26.2% (3.3) (16.5) (13.5)
Taxes (0.2) 0.5 -173.8% (0.3) (1.3) 2.2
Net profit (5.0) (4.0) -10.3% (3.6) (17.5) (11.2)
In Q3, revenues in Italy fell ~8% Y/Y, grew ~6% Y/Y in the Rest of Europe, fell
~30% Y/Y in the Americas and ~20% Y/Y in the rest of the world; Adj. EBITDA
came in at ~EUR 0.7m (EUR 1.8m in Q3 2015); the net loss was EUR 5m.
NFP (EUR ~-78m as at the end of June) worsened to ~EUR -87m at the end of
September, worse than expected (EUR -80m), also following lower factoring.
Conclusion & Action: the investment case seems increasingly at risk of a capital
increase; the core business is burning cash and the level of debt is increasingly
high; finally, we see little/no sign that the reference market scenario will improve.
We believe that LR will hardly reach the lower end of the FY16 guidance; we
have cut our estimates further and now our DCF gives us a EUR 0.2 target price
without taking into account a possible capital increase. We keep our Reduce
recommendation.
Analyst(s):
Gabriele Gambarova, Banca Akros
+39 02 43 444 289
Reduce
0.31
closing price as of 10/11/2016
0.20
0.43from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg LR.MI/LR IM
Market capitalisation (EURm) 35
Current N° of shares (m) 113
Free float 33%
Daily avg. no. trad. sh. 12 mth 90
Daily avg. trad. vol. 12 mth (m) 131
Price high 12 mth (EUR) 0.78
Price low 12 mth (EUR) 0.31
Abs. perf. 1 mth -22.85%
Abs. perf. 3 mth -34.94%
Abs. perf. 12 mth -60.18%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 206 185 194
EBITDA (m) (1) 0 5
EBITDA margin nm 0.0% 2.5%
EBIT (m) (27) (15) (10)
EBIT margin nm nm nm
Net Profit (adj.)(m) (35) (19) (10)
ROCE -12.9% -7.3% -4.6%
Net debt/(cash) (m) 59 79 89
Net Debt/Equity 0.8 1.5 2.1
Debt/EBITDA -46.3 nm 18.2
Int. cover(EBITDA/Fin. int) (0.2) 0.0 1.1
EV/Sales 0.6 0.5 0.6
EV/EBITDA nm nm 22.4
EV/EBITDA (adj.) nm nm 22.4
EV/EBIT nm nm nm
P/E (adj.) nm nm nm
P/BV 1.2 0.7 0.8
OpFCF yield -19.2% -50.4% -32.3%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) (0.31) (0.17) (0.08)
BVPS 0.63 0.46 0.38
DPS 0.00 0.00 0.00
0.30
0.40
0.50
0.60
0.70
0.80
0.90
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
LANDI RENZO Stoxx Automobiles & Parts (Rebased)Source: Factset
Shareholders: Trust Landi 59%; Aerius IH 5%; Impax
AM 3%;
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Norma Group
Germany/Automobiles & Parts Analyser
AUTOMOBILES & PARTS
Norma Group (Buy) Weak Q3 - Measures to rebalance the financial position envisaged
Weak growth should prove to be a temporary issue
The facts: Yesterday afternoon, Norma warned that its organic growth rate in FY
2016 is likely to fall short of the guidance of 2-5%. While this is clearly a
disappointment, especially since the company had reiterated its guidance only
last week, we believe that this period of weaker growth should prove to be only a
temporary issue. We thus reiterate our Buy recommendation but with a lower
target price of EUR 48.
Our analysis: After having reiterated its guidance last week only, Norma
yesterday cut its organic growth guidance from 2-5% to now roughly 0%. This
warning was triggered by lower order-intake numbers, which came in from the US
part of the business and is in our view most likely conservative.
We believe that the current period of weaker growth is mainly related to the
weakness of the US truck and agricultural machinery market. ACT is currently
forecasting US heavy truck production to decline by 30% in 2016.
Given that roughly 12% of global sales are directly or indirectly related to the US
truck and agricultural equipment market, we believe that the weakness of this
market does cost the company almost 4% points of organic growth. This
calculation shows also, that the rest of the business is developing in line with the
company’s guidance range.
The margin guidance was left untouched. This is in our view also a very good sign
as it shows that Norma is able to protect its margin also in a weaker market
environment.
In FY 2017 we expect organic growth to recovery to a good level of roughly 4%.
This is based on the assumption that the rest of the business continue to develop
in line with this year, while the truck related business should recover. The election
of Donald Trump as the upcoming president of the United States of America
should support this recovery, as he has announced a significant tax rate reduction
as well an infrastructure spending program. Both should support demand for
trucks and related equipment.
Once organic growth does return we believe that Norma will again see a re-rating
to higher multiples, which are in our view justified by the premium quality
business.
Electrification of the powertrain should be only a burden of 0.7% p.a. on growth.
We have based our target price on a peer group multiple comparison, which
includes companies from the automotive supplier space as well as from the water
technology and distribution services side. It implies a PE ratio of 13.8x for FY
2017.
Our DCF model indicates a fair value of EUR 54. However, we believe that the
recent disappointment will not allow the market to regain confidence in this model
in the next quarters.
Conclusion & Action: We reiterate our Buy recommendation and consider the
recent drop in the share price a very attractive buying opportunity.
Analyst(s):
Tim Schuldt, CFA, equinet Bank
+49 69 5899 7433
Buy
35.57
closing price as of 10/11/2016
48.00
60.00from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg NOEJ.DE/NOEJ GR
Market capitalisation (EURm) 1,133
Current N° of shares (m) 32
Free float 100%
Daily avg. no. trad. sh. 12 mth 64
Daily avg. trad. vol. 12 mth (m) 24,087
Price high 12 mth (EUR) 52.62
Price low 12 mth (EUR) 35.57
Abs. perf. 1 mth -21.00%
Abs. perf. 3 mth -29.76%
Abs. perf. 12 mth -27.56%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 890 892 969
EBITDA (m) 171 183 200
EBITDA margin 19.2% 20.6% 20.6%
EBIT (m) 125 137 149
EBIT margin 14.0% 15.4% 15.4%
Net Profit (adj.)(m) 90 101 110
ROCE 10.8% 11.0% 11.5%
Net debt/(cash) (m) 351 398 372
Net Debt/Equity 0.8 0.8 0.7
Debt/EBITDA 2.1 2.2 1.9
Int. cover(EBITDA/Fin. int) 9.9 10.5 12.1
EV/Sales 2.3 1.7 1.6
EV/EBITDA 11.7 8.5 7.7
EV/EBITDA (adj.) 10.3 7.3 6.7
EV/EBIT 16.1 11.4 10.3
P/E (adj.) 18.1 11.2 10.3
P/BV 3.8 2.4 2.1
OpFCF yield 4.3% 5.4% 5.2%
Dividend yield 2.1% 2.5% 2.9%
EPS (adj.) 2.82 3.18 3.47
BVPS 13.46 15.11 16.90
DPS 0.75 0.90 1.03
34
36
38
40
42
44
46
48
50
52
54
56
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
NORMA GROUP Stoxx Automobiles & Parts (Rebased)Source: Factset
Shareholders: Threadneedle Asset Management Ltd.
7%; Allianz Global Investors GmbH 5%;
AXA Investment Managers (Paris) SA
5%;
Page 12 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
BPER
Italy/Banks Analyser
BANKS
BPER (Buy) Weak growth should prove to be a temporary issue
Q3 16 results
The facts: BPER published and presented Q3 16 results overnight.
Our analysis: BPER closed Q3 16 with a net profit up 6% Q/Q to EUR 36m vs.
our 29m forecast, thanks to better than expected operating costs. The net profit is
not comparable with Q3 15, when EUR 54m leaving incentives were booked.
The capital position remained strong as expected, with a CET1 ratio of 14.5%
phased-in and 14.1% fully-loaded.
(EUR m) Q3 16A Q3 16E Differ. Q3 15A Y/Y Q2 16A Q/Q
Revenues 500 502 -0.4% 513 -2.5% 549 -8.9%
Operating
costs -300 -321 -6.5% -346 -13.3% -325 -7.7%
GOP 200 181 10.5% 167 19.8% 224 -10.7%
Loan
provisions -125 -123 1.6% -127 -1.6% -162 -22.8%
Net Profit 36 29 24.1% 9 nm 34 5.9%
Total revenues decreased 2.5% Y/Y to EUR 500m and were bang in line, with the
NII down 5.3% Y/Y to EUR 285m, net commissions down 1.7% Y/Y to EUR 175m
and a trading income of EUR 25.5m vs. 20m one year ago.
Operating costs were cut 13% Y/Y to EUR 300m or 6.5% better than expected,
leading to a gross operating profit (GOP) of EUR 200m, 20% higher Y/Y and 10%
ahead of our forecast, with a C/I ratio of 60%.
Loan impairments were broadly flat Y/Y at EUR 125m as expected, with a cost of
credit risk of 122bps in 9M 16.
Conclusion & Action: We increase our Adj. EPS estimates from EUR 0.24 to
0.26 in FY16, but cut it from EUR 0.54 to 0.51 in FY17 and from EUR 0.74 to 0.66
in FY18 on the back of a deceleration in NII and net commissions. Hence, we cut
our target price from EUR 5.3 to 5.1 and reiterate Buy.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Buy
4.18
closing price as of 10/11/2016
5.10
5.30from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg EMII.MI/BPE IM
Market capitalisation (EURm) 2,004
Current N° of shares (m) 480
Free float 100%
Daily avg. no. trad. sh. 12 mth 5,875
Daily avg. trad. vol. 12 mth (m) 31,453
Price high 12 mth (EUR) 7.47
Price low 12 mth (EUR) 2.58
Abs. perf. 1 mth 20.40%
Abs. perf. 3 mth 17.10%
Abs. perf. 12 mth -41.03%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 2,127 2,057 2,071
Pre-Provision Profit (PPP) (m) 708 718 795
Operating profit (OP) 2 187 374
Earnings Before Tax (m) 214 172 374
Net Profit (adj.) (m) 3 123 247
Shareholders Equity (m) 5,025 5,089 5,278
Tangible BV (m) 4,644 4,709 4,898
RWA (m) 40,100 32,975 33,550
ROTE 0.1% 2.6% 5.1%
Total Capital Ratio (B3) 12.8% 15.7% 16.0%
Cost/Income 64.3% 61.9% 58.5%
NPL ratio (gross) 14.5% 14.1% 12.8%
P/PPP 4.8 2.8 2.5
P/E (adj.) nm 16.3 8.1
P/BV 0.7 0.4 0.4
P/TBV 0.7 0.4 0.4
Dividend Yield 2.4% 2.9% 4.1%
PPPPS 1.48 1.50 1.66
EPS (adj.) 0.01 0.26 0.51
BVPS 10.47 10.61 11.00
TBVPS 9.68 9.82 10.21
DPS 0.10 0.12 0.17
2.5
3.0
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
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
BPER Stoxx Banks (Rebased)Source: Factset
Shareholders:
Page 13 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Credem
Italy/Banks Analyser
BANKS
Credem (Neutral) Q3 16 results
Q3 2016 results preview
The facts: Credem is due to publish the Q3 16 results today.
Our analysis: We summarize our preview in the following table:
(EUR m) Q3 16E Q3 15A Y/Y Q2 16A Q/Q
Revenues 255 248 2.8% 258 -1.2%
Operating costs -182 -172 5.8% -193 -5.7%
GOP 73 76 -3.9% 65 12.3%
Loan provisions -16 -18 -11.1% -21 -23.8%
Net Profit 31 31 0.0% 24 29.2%
Source: Company data, Banca Akros estimates
We forecast Credem to close Q3 16 with a net profit of EUR 31m, flat Y/Y as a
weaker operating profitability is expected to be compensated by lower loan
impairments.
Total revenues are seen increasing 2.8% Y/Y to EUR 255m, with the NII up 1.8%
both Y/Y and Q/Q to EUR 113m thanks to higher lending volumes. Net
commissions are anticipated down 2.5% Y/Y to EUR 117m due to weak inflows in
asset mgmt., suffering from financial market volatility. On the other hand, the
insurance contribution is seen at EUR 12m vs. 8.5m one year ago, while the
trading income is anticipated at EUR 7m vs. 3m in Q3 15.
Operating costs are expected to grow 5.8% Y/Y to EUR 182m, fuelled by
continuous hiring and investments to gain market share, leading to a gross
operating profit (GOP) of EUR 73m, some 4% lower Y/Y with a C/I ratio of 71.4%.
Loan impairments are seen down 11% Y/Y to EUR 16m, with a cost of credit risk
of roughly 30bps, the lowest in Italy thanks to the outstanding credit quality of the
group.
The capital position should remain sound, with a CET1 ratio not distant from
13.4% phased-in and 12.2% fully-loaded recorded in the previous quarter.
Conclusion & Action: We cut our Adj. EPS estimates from EUR 0.47 to 0.44 in
FY16 but increase from EUR 0.53 to 0.54 in FY17 and from EUR 0.62 to 0.63 in
FY18 and reiterate Neutral with EUR 6.2 TP.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Neutral
5.13
closing price as of 10/11/2016
6.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg EMBI.MI/CE IM
Market capitalisation (EURm) 1,702
Current N° of shares (m) 332
Free float 23%
Daily avg. no. trad. sh. 12 mth 273
Daily avg. trad. vol. 12 mth (m) 1,571
Price high 12 mth (EUR) 6.99
Price low 12 mth (EUR) 4.81
Abs. perf. 1 mth 0.49%
Abs. perf. 3 mth -4.65%
Abs. perf. 12 mth -16.26%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 1,127 1,072 1,129
Pre-Provision Profit (PPP) (m) 385 314 354
Operating profit (OP) 271 245 263
Earnings Before Tax (m) 239 195 248
Net Profit (adj.) (m) 189 148 179
Shareholders Equity (m) 2,480 2,547 2,666
Tangible BV (m) 2,192 2,259 2,378
RWA (m) 13,251 14,061 14,803
ROTE 7.8% 5.9% 6.9%
Total Capital Ratio (B3) 14.8% 14.4% 14.4%
Cost/Income 64.3% 70.0% 67.9%
NPL ratio (gross) 3.8% 3.6% 3.4%
P/PPP 5.9 5.4 4.8
P/E (adj.) 12.1 11.5 9.5
P/BV 1.0 0.8 0.7
P/TBV 1.0 0.8 0.7
Dividend Yield 2.9% 2.9% 3.9%
PPPPS 1.16 0.94 1.07
EPS (adj.) 0.57 0.44 0.54
BVPS 6.60 6.80 7.16
TBVPS 6.60 6.80 7.16
DPS 0.15 0.15 0.20
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
CREDEM Stoxx Banks (Rebased)Source: Factset
Shareholders: Credemholding 77%;
Page 14 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Poste Italiane
Italy/Banks Analyser
BANKS
Poste Italiane (Accumulate) Q3 2016 results preview
Poste will growth up to 24.9% in Anima in 2017 – Agreement to the jointly bid for Anima
The facts: Poste, CDP and Anima announced the agreement to jointly bid for
Pioneer. Furthermore, Poste will contribute its AM company to Anima, increasing
in this way the weight of asset management business.
Our analysis: more in detail, Poste, CDP and Anima, through a specially
incorporated vehicle of which Poste Italiane holds the majority stake, submitted
an offer for the acquisition of the asset management business of Pioneer Global
Asset Management. Moreover, in 2017 Poste will contribute its asset
management company (BancoPosta Fondi SGR) to ANIMA Holding, thus
increasing the stake in ANIMA from the current 10.32% up to a maximum of
24.9% of ANIMA voting rights. This operation will allow as of the beginning, to
count on over EUR 147bn in assets (as of 30 September 2016).
Conclusion & Action: in this way, Poste Italiane will pursue the target of
enlarging its presence in the asset management business, as stated in its
business plan. On Anima (Buy; TP EUR 5.8) side, this could improve its
distribution strength in the medium-long term, considering the size of Poste’s
network and the huge amount of money (over EUR 500bn) managed by Poste.
On the other side, we believe that Anima could need a free capital increase to
“acquire” Poste’s asset management company. The game changer, for all the
companies involved, will be the offer on Pioneer, presented yesterday. But, what
will be the future of BPM’s stake (14.66%) in Anima at this stage? Considering the
distribution agreement in place with BPM, we still bet on the merger of Aletti SGR
in Anima, but the likelihood of other solution, after Poste’s choice, are increasing.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
+39 02 4344 4022
Accumulate
6.01
closing price as of 10/11/2016
7.90
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg PST.MI/PST IM
Market capitalisation (EURm) 7,850
Current N° of shares (m) 1,306
Free float 35%
Daily avg. no. trad. sh. 12 mth 3,624
Daily avg. trad. vol. 12 mth (m) 30,546
Price high 12 mth (EUR) 7.20
Price low 12 mth (EUR) 5.17
Abs. perf. 1 mth -2.91%
Abs. perf. 3 mth -7.11%
Abs. perf. 12 mth -10.16%
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
4.5
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 64
Produced & Distributed by the Members of ESN (see last page of this report)
UBI Banca
Italy/Banks Analyser
BANKS
UBI Banca (Buy) Poste will growth up to 24.9% in Anima in 2017 – Agreement to the jointly bid for Anima
Q3 16 results
The facts: UBI Banca published Q3 16 results this morning before market
opening, with a conference call presentation scheduled at 3.00pm CET.
Our analysis: UBI Banca closed Q3 16 with a net profit down 13.5% Y/Y to EUR
32m vs. our 26m forecast, thanks to a better tax rate of just 25% vs. our 33%
estimate. The rest of the results was bang in line with our expectations.
(EUR m) Q3 16A Q3 16E Differ. Q3 15A Y/Y Q2 16A Q/Q
Revenues 746 745 0.1% 758 -1.6% 816 -8.6%
Operating
costs -515 -522 -1.3% -497 3.6% -511 0.8%
GOP 231 223 3.6% 261 -11.5% 305 -24.3%
Loan
provisions -167 -169 -1.2% -169 -1.2% -1,051 -84.1%
Net Profit 32 26 23.1% 38 -13.5% -829 nm
Total revenues decreased 1.6% Y/Y to EUR 746m as anticipated, with the NII
falling 7.8% Y/Y to EUR 368m on the back of weak loans (-2.2% Y/Y), reducing
commercial margins and lower contribution from the financial portfolio. On the
contrary, net commissions grew 7% Y/Y to EUR 321m thanks to positive asset
mgmt. inflows and the repricing of some banking services. The trading income
held up at EUR 24m vs. 28m one year ago.
Operating costs increased 3.6% Y/Y to EUR 515m vs. our 522m estimate,
including EUR 26.4m annual DGS contribution and leading to a gross operating
profit (GOP) of EUR 231m, 11.5% lower Y/Y with a C/I ratio of 69%.
Following the increase in the NPL cash coverage recorded in Q2, the loan
impairments normalised and were broadly flat Y/Y at EUR 167m as expected.
The CET1 ratio improved 25bps Q/Q to 11.7% phased-in and 11.3% fully-loaded.
Conclusion & Action: We reiterate Buy with EUR 4.3 TP.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Buy
2.31
closing price as of 10/11/2016
4.30
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg UBI.MI/UBI IM
Market capitalisation (EURm) 2,252
Current N° of shares (m) 976
Free float 100%
Daily avg. no. trad. sh. 12 mth 11,389
Daily avg. trad. vol. 12 mth (m) 48,752
Price high 12 mth (EUR) 6.54
Price low 12 mth (EUR) 2.00
Abs. perf. 1 mth 2.85%
Abs. perf. 3 mth -2.86%
Abs. perf. 12 mth -65.45%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 3,289 3,101 3,154
Pre-Provision Profit (PPP) (m) 1,111 897 1,144
Operating profit (OP) 308 -658 453
Earnings Before Tax (m) 374 -707 453
Net Profit (adj.) (m) 195 -799 251
Shareholders Equity (m) 9,982 9,085 9,228
Tangible BV (m) 8,517 7,680 7,823
RWA (m) 61,338 61,906 62,481
ROTE 2.3% -9.9% 3.2%
Total Capital Ratio (B3) 13.9% 12.8% 12.9%
Cost/Income 66.1% 67.7% 63.5%
NPL ratio (gross) 7.9% 7.3% 8.1%
P/PPP 5.0 2.5 2.0
P/E (adj.) 28.6 nm 9.0
P/BV 0.7 0.3 0.3
P/TBV 0.7 0.3 0.3
Dividend Yield 4.8% 4.8% 5.6%
PPPPS 1.23 0.92 1.17
EPS (adj.) 0.22 -0.82 0.26
BVPS 9.46 7.87 8.02
TBVPS 9.46 7.87 8.02
DPS 0.11 0.11 0.13
1.5
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
UBI BANCA Stoxx Banks (Rebased)Source: Factset
Shareholders:
Page 16 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
UniCredit
Italy/Banks Analyser
BANKS
UniCredit (Accumulate) Q3 16 results
Q3 16 results
The facts: UniCredit published and presented Q3 16 results yesterday.
Our analysis: UniCredit closed Q3 16 with a net profit down 12% Y/Y to EUR
447m vs. our 376m forecast and bang in line with company-compiled consensus.
The capital position was stronger than expected, with a CET1 ratio of 11%
phased-in vs. our 10.7% and 10.8% fully-loaded vs. our 10.5%. The 50bps
quarterly increase was due not only to the disposal of 10% stakes in in
Finecobank and Bank Pekao we anticipated (+20bps), but also to a strong
reduction in RWA (+23bps).
(EUR m) Q3 16A Q3 16E Differ. Q3 15A Y/Y Q2 16A Q/Q
Revenues 5,455 5,298 3.0% 5,332 2.3% 6,139 -11.1%
Operating
costs -3,228 -3,286 -1.8% -3,383 -4.6% -3,289 -1.9%
GOP 2,227 2,012 10.7% 1,949 14.3% 2,850 -21.9%
Loan
provisions -1,008 -1,000 0.8% -1,005 0.3% -914 10.3%
Net Profit 447 376 18.9% 506 -11.7% 916 -51.2%
The operating performance was stronger than expected, with total revenues
growing 2.3% Y/Y to EUR 5,455m or 3% more than anticipated, thanks to a
stronger trading income doubling Y/Y to EUR 509m vs. our ca. 400m estimate,
while the NII decreased 2.6% Y/Y and 2.3% Q/Q to EUR 2.85bn as expected and
net commissions were down 2.3% Y/Y and 4% Q/Q to EUR 1.86bn as
anticipated.
Operating costs decreased 4.6% Y/Y to EUR 3.23bn or 1.8% better than
estimated, leading to a gross operating profit (GOP) growing 14% Y/Y to EUR
2.2bn or 11% more than expected, with a C/I ratio of 59.2%.
Loan impairments were flat Y/Y as anticipated at EUR 1bn with a cost of credit
risk of 83bps overall and 41bps in the Core Bank.
Results’ presentation was rather deceptive as most answers were delayed to 13th
Dec when new business plan will be announced to the market.
Main elements stressed by the top mgmt. were the additional 41bps to be added
to FL CET1 ratio in Q4, particularly arising from further disposals (24bps). RWA
reduction in Q3 due to a positive one-off in market risk related to the
implementation of new models. Mgmt anticipates fully manageable impact from
IFRS9 adoption and does not expect a massive impact from upcoming Basel IV
regulation due to basic commercial banking model instead of universal bank
followed by some competitors.
Conclusion & Action: We stick to Accumulate with EUR 2.6 target price.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Accumulate
2.29
closing price as of 10/11/2016
2.60
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CRDI.MI/UCG IM
Market capitalisation (EURm) 13,689
Current N° of shares (m) 5,967
Free float 66%
Daily avg. no. trad. sh. 12 mth 94,972
Daily avg. trad. vol. 12 mth (m) 429,442
Price high 12 mth (EUR) 5.67
Price low 12 mth (EUR) 1.75
Abs. perf. 1 mth 7.90%
Abs. perf. 3 mth 11.90%
Abs. perf. 12 mth -59.57%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 22,405 22,498 22,532
Pre-Provision Profit (PPP) (m) 7,202 7,752 8,435
Operating profit (OP) 3,088 4,011 5,521
Earnings Before Tax (m) 2,671 3,588 5,521
Net Profit (adj.) (m) 2,089 1,843 3,352
Shareholders Equity (m) 50,087 50,913 51,400
Tangible BV (m) 46,468 47,295 47,781
RWA (m) 390,599 399,747 423,739
ROTE 4.5% 3.9% 7.1%
Total Capital Ratio (B3) 14.4% 13.5% 13.8%
Cost/Income 60.8% 58.1% 57.3%
NPL ratio (gross) 8.7% 8.7% 8.7%
P/PPP 4.1 1.8 1.6
P/E (adj.) 14.1 7.4 4.1
P/BV 0.6 0.3 0.3
P/TBV 0.6 0.3 0.3
Dividend Yield 5.2% 5.2% 5.2%
PPPPS 1.21 1.30 1.41
EPS (adj.) 0.35 0.31 0.56
BVPS 7.78 7.92 8.00
TBVPS 7.78 7.92 8.00
DPS 0.12 0.12 0.12
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
5.5
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
UNICREDIT Stoxx Banks (Rebased)Source: Factset
Shareholders: Fondaz. Cariverona 4%; Fondaz. CRT
3%; Carimonte Holding 2%; Central Bank
of Libya 3%; Aabar 5%; Del Vecchio 3%;
Page 17 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Anima
Italy/Financial Services Analyser
FINANCIAL SERVICES
Anima (Buy) Q3 16 results
3Q 2016 preview
The facts: Anima is due to report its 3Q16 results today. A conference call will be
held the same day (details not yet disclosed).
Our analysis: we summarise our preview in the following table.
3Q16E Y/Y 9M16E Y/Y 3Q15 9M15
Net commissions 53 -2% 160 2% 54 157
Performance fees 1 -41% 4 -91% 1 45
Other income 5 1% 16 -4% 5 17
Total revenues 58 -2% 181 -17% 59 219
Total operating expense -17 10% -51 -5% -15 -53
Other income / costs -9 -10% -27 -3% -10 -28
EBT 32 -5% 103 -25% 34 138
Net profit 21 -14% 60 -38% 24 96
Adj Net profit 27 -11% 85 -25% 30 113
We expect total revenues of c. EUR 58m, -2% Y/Y, mainly due to the lack of
performance fees and to a little bit lower management fees, due to the weak net
inflows, already disclosed, during the quarter (EUR -764m vs EUR 2.5bn in
3Q15). Total assets achieved EUR 71.5bn at the end of September, +11.3% Y/Y,
+6.9% vs 2016 but flat m/m. We expect margins in slight reduction q/q (net
commissions on average assets at c. 7bps vs 8bps in 2Q16). The total costs are
seen slightly higher Y/Y (EUR 26m vs EUR 25m). Therefore, the net profit ought
to close at around EUR 21m vs EUR 24m in 3Q15.
Conclusion & Action: overall we expect a neutral set of results, which were
already discounted by the market. Recommendation and target price confirmed.
M&A remain the trigger in the short term.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
+39 02 4344 4022
Buy
4.13
closing price as of 10/11/2016
5.80
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ANIM.MI/ANIM IM
Market capitalisation (EURm) 1,239
Current N° of shares (m) 300
Free float 75%
Daily avg. no. trad. sh. 12 mth 1,528
Daily avg. trad. vol. 12 mth (m) 6,816
Price high 12 mth (EUR) 8.76
Price low 12 mth (EUR) 3.90
Abs. perf. 1 mth -0.53%
Abs. perf. 3 mth -10.29%
Abs. perf. 12 mth -51.67%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 291 242 262
Pre-Provision Profit (PPP) (m) 202 155 175
Operating profit (OP) 202 155 175
Earnings Before Tax (m) 183 138 168
Net Profit (adj.) (m) 151 118 133
Shareholders Equity (m) 796 802 876
Tangible BV (m) 0 0 0
RWA (m) 0 0 0
ROTE 20.0% 14.7% 15.9%
Total Capital Ratio (B3) 0.0% 0.0% 0.0%
Cost/Income 30.6% 35.8% 33.3%
P/PPP 11.9 8.0 7.1
P/E (adj.) 16.0 10.5 9.3
P/BV 3.0 1.5 1.4
P/TBV nm nm nm
Dividend Yield 6.0% 3.3% 4.6%
PPPPS 0.67 0.52 0.58
EPS (adj.) 0.50 0.39 0.44
BVPS 2.66 2.68 2.92
TBVPS 0.00 0.00 0.00
DPS 0.25 0.13 0.19
3.5
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
8.5
9.0
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ANIMA FTSE Italy All Share (Rebased)Source: Factset
Shareholders: BPM 15%; Poste Italiane 10%;
Page 18 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Azimut
Italy/Financial Services Analyser
FINANCIAL SERVICES
Azimut (Accumulate) 3Q 2016 preview
3Q16 results: in line with expectations; buyback could be in the cards
The facts: Azimut published its 3Q16 results yesterday during trading hours,
followed by a conference call.
EUR m 3Q16 Y/Y A/E 9M16 3Q16E 9M16E
Total revenues 186 40% 7% 499 175 487
Fees and commissions 175 44% 6% 465 166 456
Commission expenses -79 17% -1% -240 -80 -241
Total other costs -36 2% 3% -122 -35 -121
PBT 60 110% 0% 125 60 125
Net Profit 54 94% 2% 121 53 120
Our analysis: Azimut reported results, overall in line with estimates. The growth
was solid both in management fees (EUR 138m, +18% Y/Y; EUR 131m our
estimate) and in performance fees (EUR 34m vs EUR 2m in 3Q15). Thanks to the
absence of recruitment costs, like in 1Q and 2Q, and to a more disciplined cost
control, the pay-out ratio decreased to around 56% vs c. 66% in 1Q and in 2Q
and the CI ratio, net of performance fees, closed around 80% compared to 94%
achieved in 2Q. This resulted in a recovery of margin q/q, with net fees on
average asset we estimated around 0.15% from 0.11% in 1Q and 2Q. On the
back of this consideration, the net profit amounted to EUR 54m, +94% Y/Y and c.
+2% compared to our estimates. NFP closed around EUR 249m vs EUR 194m in
1H16. Cash was c. EUR 496m vs EUR 438m in 1H 16.
Conference call take-away: 2019 targets were confirmed (total assets EUR
50bn vs EUR 42bn at the end of September 2016; net profit around EUR 300m vs
EUR 121m in 9M16; Net inflows c. EUR 2.5bn vs EUR 5.6bn in 9M16; pay-out
ratio between 60% and 75% compared to current 80%); a share buyback program
could be in the cards soon, on the back of c. EUR 300m of cash in Azimut’s
hands after the dividend payment (EUR 133m on 23rd
November); Azimut,
contrary to some competitors, will not anticipate any reform of its performance
fees calculation scheme, facing this chance increasing its geographical
diversification.
Conclusion & Action: the stock reacted positively to the results, mainly thanks
to the improvement in margins and to the restored confidence of investors in
Azimut’s numbers and business model. We also underlined that Mr Albarelli’s first
speech to the investment community was very positive in our view: the message
was clear and we believe he could be able to start a reshuffle of the company and
of its strategic guidelines. The investment case remains unchanged: the company
is likely to have around EUR 300m extra capital for a share buy-back program,
extraordinary dividends or for acquisitions; the group proposed a DPS of EUR
1.5, of which EUR 1.0 is going to be paid on 23rd
November, corresponding to an
yield of c 6% at the current price; the net inflows, also thanks to the acquisitions
of financial advisors and companies abroad, don’t seem to be hurt by the difficult
market conditions. After the results, we increased our EPS estimates around 18%
and 11% for 2016 and 2017 respectively. We anyway confirm our target price
(EUR 18.5 per share) and we stick to accumulate.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
+39 02 4344 4022
Accumulate
16.59
closing price as of 10/11/2016
18.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg AZMT.MI/AZM IM
Market capitalisation (EURm) 2,377
Current N° of shares (m) 143
Free float 87%
Daily avg. no. trad. sh. 12 mth 1,071
Daily avg. trad. vol. 12 mth (m) 62,050
Price high 12 mth (EUR) 24.17
Price low 12 mth (EUR) 12.83
Abs. perf. 1 mth 9.58%
Abs. perf. 3 mth 14.02%
Abs. perf. 12 mth -26.82%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 415 347 352
Pre-Provision Profit (PPP) (m) 278 179 188
Operating profit (OP) 278 179 188
Earnings Before Tax (m) 278 179 188
Net Profit (adj.) (m) 197 124 131
Shareholders Equity (m) 717 682 733
Tangible BV (m) 388 353 404
RWA (m) 0 0 0
ROTE 29.1% 17.7% 18.5%
Total Capital Ratio (B3) 0.0% 0.0% 0.0%
Cost/Income 33.0% 48.3% 46.4%
P/PPP 11.0 12.3 11.7
P/E (adj.) 15.5 17.8 16.8
P/BV 4.3 3.2 3.0
P/TBV 7.9 6.2 5.4
Dividend Yield 9.0% 5.2% 5.3%
PPPPS 2.10 1.35 1.42
EPS (adj.) 1.48 0.93 0.99
BVPS 5.41 5.14 5.53
TBVPS 2.93 2.67 3.05
DPS 1.50 0.86 0.87
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AZIMUT FTSE MIB (Rebased)Source: Factset
Shareholders: Timone Fiduciaria 13%;
Page 19 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Banca Ifis
Italy/Financial Services Analyser
FINANCIAL SERVICES
Banca Ifis (Neutral) 3Q16 results: in line with expectations; buyback could be in the cards
Q3 16 results
The facts: Banca Ifis published and presented Q3 16 results yesterday.
Our analysis: Banca Ifis closed Q3 16 with a net profit of EUR 27m, including
EUR 21m one-off gains from NPL transactions we deemed as probable but did
not include in our EUR 19m forecast. Net of one-off items, the performance was
weaker than expected, due to lower revenues and higher costs.
The capital position remained sound ahead of the Interbanca acquisition for which
regulatory approval is still ongoing, with a CET1 ratio improving 30bps Q/Q to
13.5%.
(EUR m) Q3 16A Q3 16E Differ. Q3 15A Y/Y Q2 16A Q/Q
Revenues 66 68 -2.9% 63 4.8% 69 -4.3%
Operating
costs -42 -38 10.5% -29 44.8% -43 -2.3%
GOP 24 30 -20.0% 34 -29.4% 26 -7.7%
Loan
provisions -4 -3 Nm -1 nm -6 -33.3%
Net Profit 27 19 nm 18 50.0% 17 58.8%
At recurrent level, total revenues increased 4.8% Y/Y to EUR 66, but were 3%
lower than expected, as the NII grew 10% Y/Y to EUR 53m vs. our 55m estimate
and net commissions fell 11% Y/Y to EUR 13m as anticipated.
Operating costs came grew 45% Y/Y to EUR 42m or 10% more than estimated
and were impacted by continued hiring (157 new staff in 9M) and systemic
charges, leading to a gross operating profit (GOP) of EUR 24m vs. our 30m
forecast, with a C/I ratio of 63.6%.
Loan impairments came in at a low EUR 4m as expected, with a cost of credit risk
of 86bps in Trade receivables for 9M 16 vs. 79bps one year ago.
The financial report clarifies the NPL transaction was on a portfolio of 42k
positions with a par value of EUR 861.6m and net value of EUR 4.7m or 0.5% of
GBV. We understand this is after having processed the positions several times
without reaching a restructuring agreement. Given the EUR 21m capital gain, we
estimate the selling price was EUR 26m or 3% of GBV.
While DRL is growing at full steam, ahead of plans, we see Trade receivables
underperforming this year’s budget. Still no visibility on the capital position post
Interbanca acquisition.
Conclusion & Action: We reiterate Neutral on the stock ahead of the Interbanca
acquisition.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Neutral
25.04
closing price as of 10/11/2016
24.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg IF.MI/IF IM
Market capitalisation (EURm) 1,325
Current N° of shares (m) 53
Free float 41%
Daily avg. no. trad. sh. 12 mth 84
Daily avg. trad. vol. 12 mth (m) 2,096
Price high 12 mth (EUR) 29.11
Price low 12 mth (EUR) 16.66
Abs. perf. 1 mth 7.05%
Abs. perf. 3 mth 23.41%
Abs. perf. 12 mth 3.00%
Key financials (EUR) 12/15 12/16e 12/17e
Total Revenue (m) 267 275 305
Pre-Provision Profit (PPP) (m) 139 128 155
Operating profit (OP) 114 106 129
Earnings Before Tax (m) 246 134 129
Net Profit (adj.) (m) 75 71 87
Shareholders Equity (m) 574 623 670
Tangible BV (m) 574 623 670
RWA (m) 3,264 3,651 4,269
ROTE 13.1% 11.4% 12.9%
Total Capital Ratio (B3) 14.9% 14.9% 14.0%
Cost/Income 49.0% 51.9% 47.7%
P/PPP 11.0 10.3 8.5
P/E (adj.) 20.3 18.7 15.3
P/BV 2.7 2.1 2.0
P/TBV 2.7 2.1 2.0
Dividend Yield 3.0% 3.0% 3.4%
PPPPS 2.63 2.42 2.94
EPS (adj.) 1.42 1.34 1.64
BVPS 10.84 11.78 12.66
TBVPS 10.84 11.78 12.66
DPS 0.76 0.76 0.85
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BANCA IFIS FTSE Italy STAR (Rebased)Source: Factset
Shareholders: La Scogliera 50%; Others 8%;
Page 20 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Parmalat
Italy/Food & Beverage Analyser
FOOD & BEVERAGE
Parmalat (Neutral) Q3 16 results
9M 16 results
9M 16 results: 9M 16 sales were at EUR 4,632.1m down 2.4% Y/Y (at constant
scope of consolidation and constant exchange rates and excluding hyperinflation
in Venezuela revenues were up +2.4%).
Parmalat: 9M 16 results
EUR m 9M 15a 9M 16a %Chg
Sales 4.744.5 4,632.1 -2.4%
EBITDA 312.2 313.4 +0.4%
Margin (%) 6.6% 6.8%
Source: Company data, BANCA AKROS-ESN estimates
Parmalat Group 9M 16 EBITDA was EUR 171.6m (+0.4% Y/Y). At constant
exchange rates and scope of consolidation and excluding hyperinflation 9M 16
EBITDA was up 9.6% Y/Y. This improvement in profitability is especially due to
the US profitability increase, which is the result of efficiency measures and sales
promotions, coupled with the positive impact of a favourable trend in the cost of
raw milk.
Management FY 16 guidance slightly revised: management expects at const.
exch. rates, considering for the new acquisitions pro forma 2015 comparative
data and excluding the Venezuelan subsidiary, gains of about 2-3% for net
revenues (vs previous 5%) and over 10% for EBITDA (vs previous around 10%).
Our analysis: based on 9M 16 results, we factored the foregoing FY 16 guidance
into our estimates.
Conclusion & Action: based on our estimates, we confirm our Neutral
recommendation and our target price of EUR 2.40 per share calculated based on
our DCF model (WACC 6.35% and perpetual growth of 1.50%).
Analyst(s):
PaolaSaglietti, Banca Akros
+39 02 4344 4287
Neutral
2.46
closing price as of 10/11/2016
2.40
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg PLT.MI/PLT IM
Market capitalisation (EURm) 4,567
Current N° of shares (m) 1,855
Free float 17%
Daily avg. no. trad. sh. 12 mth 573
Daily avg. trad. vol. 12 mth (m) 1,345
Price high 12 mth (EUR) 2.48
Price low 12 mth (EUR) 2.30
Abs. perf. 1 mth 4.15%
Abs. perf. 3 mth 4.77%
Abs. perf. 12 mth 3.45%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 6,416 6,352 6,384
EBITDA (m) 445 447 454
EBITDA margin 6.9% 7.0% 7.1%
EBIT (m) 277 268 271
EBIT margin 4.3% 4.2% 4.2%
Net Profit (adj.)(m) 146 150 153
ROCE 6.3% 6.1% 6.4%
Net debt/(cash) (m) (301) (425) (647)
Net Debt/Equity -0.1 -0.1 -0.2
Debt/EBITDA -0.7 -1.0 -1.4
Int. cover(EBITDA/Fin. int) 16.8 16.9 17.2
EV/Sales 0.7 0.7 0.7
EV/EBITDA 10.6 10.6 10.0
EV/EBITDA (adj.) 10.6 10.6 10.0
EV/EBIT 17.0 17.7 16.7
P/E (adj.) 30.0 30.2 29.8
P/BV 1.5 1.5 1.4
OpFCF yield -19.6% 2.9% 4.8%
Dividend yield 0.6% 0.6% 0.6%
EPS (adj.) 0.08 0.08 0.08
BVPS 1.64 1.69 1.76
DPS 0.02 0.02 0.02
2.15
2.20
2.25
2.30
2.35
2.40
2.45
2.50
2.55
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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PARMALAT Stoxx Food & Beverage (Rebased)Source: Factset
Shareholders: Sofil SAS 83%;
Page 21 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Nedap
Netherlands/General Industrials Analyser
GENERAL INDUSTRIALS
Nedap (Accumulate) 9M 16 results Accumulate
31.18
closing price as of 10/11/2016
34.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg NEDP.AS/NEDAP NA
Market capitalisation (EURm) 209
Current N° of shares (m) 7
Free float 26%
Daily avg. no. trad. sh. 12 mth 2
Daily avg. trad. vol. 12 mth (m) 155
Price high 12 mth (EUR) 32.49
Price low 12 mth (EUR) 28.33
Abs. perf. 1 mth 3.64%
Abs. perf. 3 mth 1.60%
Abs. perf. 12 mth 2.53%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 181 190 201
EBITDA (m) 14 25 30
EBITDA margin 7.7% 12.9% 15.0%
EBIT (m) 4 15 20
EBIT margin 2.4% 7.8% 10.2%
Net Profit (adj.)(m) 13 13 17
ROCE 9.3% 12.5% 19.0%
Net debt/(cash) (m) 19 12 (1)
Net Debt/Equity 0.4 0.2 0.0
Debt/EBITDA 1.3 0.5 0.0
Int. cover(EBITDA/Fin. int) 44.9 409.1 (335.7)
EV/Sales 1.2 1.1 1.0
EV/EBITDA 15.5 8.6 6.5
EV/EBITDA (adj.) 10.0 8.6 6.5
EV/EBIT 49.9 14.1 9.6
P/E (adj.) 16.4 16.4 12.1
P/BV 3.9 3.7 3.2
OpFCF yield 3.1% 5.8% 10.2%
Dividend yield 4.1% 4.2% 5.6%
EPS (adj.) 1.88 1.90 2.58
BVPS 7.90 8.53 9.81
DPS 1.28 1.30 1.76
Slowdown in growth in 2H; good margin improvement
The facts: Nedap published its Q3 trading update. Management expects revenue
growth for the full year of 3% (1H growth 6%) and an increase of 20-25% in pre-
tax profit (1H growth 22%).
Our analysis: Revenue growth seems to have decelerated during the second half
as the company expects 3% growth for the full year following 6% growth in 1H.
This reflects flat revenues in the second half whereas we had anticipated 4%
growth. Five out of the nine business units are expected to show growth in the full
year whereas in the first half 7 out of 9 reported growth.
Organic revenue growth will come in at 5% for the full year when corrected for
Energy Systems which activities are phased out this year. Also several activities
within Light Controls are phased out which will have a negative impact on full year
growth although this business unit still showed growth in 1H.
Looking at the business units, Healthcare, Staffing Solutions, Security
Management, Library Systems and Identification Systems will show growth this
year whilst Livestock Management, Retail and NSecure will show broadly flat
revenues.
The International Maritime Organization recently ratified the ballast water treaty,
meaning that ships will be subject to new regulations with effect from September
2017. Investments in treatment systems for ballast water offer good growth
opportunities for Nedap’s UV products in the next few years.
Nedap is gradually making progress with the outsourcing of most of its
production. The selected suppliers will start delivering the first products in the next
few months and manufacturing on a larger scale will be outsourced during 1H17.
Nedap will take a charge of EUR 4-5m in 2016 related to this process, of which
EUR 2-4m is related to write down of inventories (as we previously anticipated).
Cost savings of EUR 4m annually are still on track with the full benefit expected in
2018.
Management expects 3% revenue growth in 2016 and an increase in pre-tax
profit of 20-25% towards EUR 13.4-14.0m. Our current estimates assume 5%
revenue growth for the full year and an increase in pre-tax profit of 33% (EUR
14.9m). Although management’s outlook is traditionally conservative, our current
estimates might be too optimistic.
Conclusion & Action: Nedap’s third quarter trading update shows a slowdown in
revenue growth during the year following good growth of 6% in the first half.
Several business units are showing flat revenues following growth in the first half.
Pre-tax profit is expected to increase 20-25% which shows a good margin
improvement after years of weaker margins. Based on this expected
improvement, combined with the cost savings of the outsourcing of its production
activities, we have an Accumulate rating (EV-EBITDA 2017 is 6.5). Our DCF-
based price target is EUR 34.00, with an attractive dividend yield of 4-5%.
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NEDAP Amsterdam Small Cap Index (Rebased)Source: Factset Shareholders: Cross Options 15%; Delta Lloyd
Deelnemingen 13%; Delta Lloyd 13%;
ASR 8%; Kempen CM 6%; Darlin 5%;
TKH 5%; Decico 5%;
Analyst(s):
Johan van den Hooven, NIBC Markets N.V.
+312 0 5508518
Page 22 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Prelios
Italy/General Industrials Analyser
GENERAL INDUSTRIALS
Prelios (Neutral) Slowdown in growth in 2H; good margin improvement
Q3 results in line
The facts: Prelios published its Q3 results yesterday after market closing.
Our analysis: the company’s results were almost in line with our estimates
Q3 15 Q3 16 Y/Y % Q3 16e 9M 15 9M 16 Y/Y %
Revenues 12.2 17.2 41.0% 18.1 45.8 51.3 12.0%
EBIT services 0.3 0.6
0.8 -3.3 0.1
Investments -1.7 -0.2
0.0 -8.8 -13.3
EBIT after inve -1.4 0.3
0.8 -12.1 -13.3
restructuring costs 2.6 -1.5
-1.0 0.6 -5.1
fair value change 0.2 0.0
0.0 2.7 0.0
EBIT 1.4 -1.2
-0.2 -8.8 -18.4
financial expenses -4.7 0.7
-0.2 -9.1 -4.1
PBT -3.3 -0.5
-0.4 -17.9 -22.5
income taxes -0.1 -0.3
-0.1 -1.8 -1.6
discontinued operations 0.0 0.0
0.0 3.2 0.0
net profit -3.4 -0.8
-0.5 -16.5 -24.1
The company confirmed its targets for 2016 with regard to the central cost (G&A)
reduction trend and EBIT for the management and services platform (between
EUR 10m and EUR 12m) that were communicated to the market. Revenues from
the management and services platform at the end of 2016 are expected to be
below the announced target (between EUR 100m and EUR 105m), but
nonetheless improved over 2015.
Conclusion & Action: we revised our estimates to take into account the
foregoing targets. Neutral confirmed.
Analyst(s):
Francesco Sala, Banca Akros
+39 02 4344 4240
Neutral
0.08
closing price as of 10/11/2016
0.10
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg PCRE.MI/PRS IM
Market capitalisation (EURm) 110
Current N° of shares (m) 1,364
Free float 42%
Daily avg. no. trad. sh. 12 mth 4,390
Daily avg. trad. vol. 12 mth (m) 277
Price high 12 mth (EUR) 0.31
Price low 12 mth (EUR) 0.07
Abs. perf. 1 mth 0.75%
Abs. perf. 3 mth 0.62%
Abs. perf. 12 mth -73.67%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 71 75 84
EBITDA (m) (3) 3 8
EBITDA margin nm 4.4% 9.5%
EBIT (m) (21) 3 8
EBIT margin nm 4.4% 9.5%
Net Profit (adj.)(m) (45) (30) 4
ROCE -19.9% 3.2% 7.7%
Net debt/(cash) (m) 188 0 3
Net Debt/Equity 3.0 0.0 0.1
Debt/EBITDA -69.5 0.1 0.3
Int. cover(EBITDA/Fin. int) (0.2) 0.6 4.0
EV/Sales 2.8 2.0 1.7
EV/EBITDA nm 45.0 18.2
EV/EBITDA (adj.) nm 45.0 18.2
EV/EBIT nm 45.0 18.2
P/E (adj.) nm nm 27.5
P/BV 3.1 3.6 3.2
OpFCF yield -14.2% -12.0% 1.4%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) (0.06) (0.02) 0.00
BVPS 0.08 0.02 0.03
DPS 0.00 0.00 0.00
0.05
0.10
0.15
0.20
0.25
0.30
0.35
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PRELIOS FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Pirelli 13%; Unicredit 12%; Intesa
Sanpaolo 10%; shareholders' agreement
23%;
Page 23 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Stockmann Group - change in sales*, YoY
Source: OP, St ockmann *Timing of Finnish Crazy Days campaign conf used March-April dynamics
-1.4 %-2.9 %
-26.9 %
26.8 %
-2.7 %-4.6 %
-9.7 %
0.2 %
-10.7 %
-7.2 %-4.6 %
-30%
-20%
-10%
0%
10%
20%
30%
01/16 02/16 03/16 04/16 05/16 06/16 07/16 08/16 09/16 10/16 1-10/16
Continuing product areas and businesses
Sales by business area, YoY
Source: OP, St ockmann
-10.1 % -10.4 %
-46.2 %
57.5 %
-12.6 % -14.0 % -13.8 %
-5.1 %
-11.9 %-7.7 %
5.5 % 3.2 %0.0 % 3.2 %
6.8 %0.5 %
-7.1 %
2.2 %
-9.6 %-6.0 %
-60%
-40%
-20%
0%
20%
40%
60%
1/16 2/16 3/16 4/16 5/16 6/16 7/16 8/16 9/16 10/16
Stockmann Retail Lindex (at comparable exchange rates)
Stockmann
Finland/General Retailers Analyser
GENERAL RETAILERS
Stockmann (Accumulate) Q3 results in line
Sales continued to decline in October
The facts: Stockmann reported on Thursday its sales figures for October. The
performance remained weak. The whole group’s sales were down 7.2% YoY in
continuing product areas and businesses. Stockmann Retail's sales fell 7.7%,
burdened by the poor performance in Finland (-9.2%). Instead, sales in the
Baltics continued to grow slightly (+0.8%). Lindex's sales also continued to
decline; the drop was -6.0% at comparable exchange rates (-6.6% in euros).
Conclusion & Action: We estimate that the fairly warm weather in October
continued to postpone the sales of seasonal products, which has made the
decline in sales steeper. The impact will probably be offset by the early start of
snowfall in November compared to last year, but the underlying trend is still
worrying.
Analyst(s):
Niclas Catani, OP Corporate Bank
+358 10 252 8780
Accumulate
6.75
closing price as of 10/11/2016
7.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg STCBV.HE/STCBV FH
Market capitalisation (EURm) 486
Current N° of shares (m) 72
Free float 100%
Daily avg. no. trad. sh. 12 mth 51
Daily avg. trad. vol. 12 mth (m) 217
Price high 12 mth (EUR) 7.89
Price low 12 mth (EUR) 5.08
Abs. perf. 1 mth -2.60%
Abs. perf. 3 mth 9.41%
Abs. perf. 12 mth -4.80%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 1,469 1,332 1,229
EBITDA (m) 20 79 113
EBITDA margin 1.3% 5.9% 9.2%
EBIT (m) (52) 20 56
EBIT margin nm 1.5% 4.6%
Net Profit (adj.)(m) (89) (16) 29
ROCE -2.1% 0.8% 2.3%
Net debt/(cash) (m) 764 749 712
Net Debt/Equity 0.7 0.7 0.7
Debt/EBITDA 39.2 9.5 6.3
Int. cover(EBITDA/Fin. int) 0.9 4.3 6.3
EV/Sales 0.8 0.9 0.9
EV/EBITDA 57.5 14.9 10.1
EV/EBITDA (adj.) 57.5 14.9 10.1
EV/EBIT nm 57.9 20.3
P/E (adj.) nm nm 16.5
P/BV 0.4 0.5 0.5
OpFCF yield 3.4% -3.9% 8.7%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) (1.23) (0.22) 0.41
BVPS 14.53 14.24 14.57
DPS 0.00 0.00 0.00
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
vvdsvdvsdy
STOCKMANN Stoxx General Retailers (Rebased)Source: Factset
Shareholders: HTT STC Holding Oy Ab 12%;
Föreningen Konstsamfundet -ryhmä 9%;
Svenska litteratursällskapet i Finland r.f.
8%;
Page 24 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
DiaSorin
Italy/Healthcare Analyser
HEALTHCARE
DiaSorin (Accumulate) Sales continued to decline in October
Q3 sales and profitability slightly higher than expected
DIASORIN: Q3/9M 16 results
9M 15a 9M 16a % Chg Akros 9M 16e
Sales 368.4 413.3 +12.2% 409.8
EBITDA 136.4 158.4 +16.1% 155.2
% margin 37.0% 38.3% 37.9%
Q3 15a Q3 16a % Chg Akros 9M 16e
Sales 123.2 147.0 +19.3% 143.6
EBITDA 45.0 56.1 +24.6% 52.9
% margin 36.5% 38.1% 36.8%
Source: Company Data
9M 16 sales were slightly higher than our estimates. Positive sales growth
was due to: 1) continuous strong growth of CLIA ex Vit-D 25 OH tests sales
(+13.6% at CER), which was helped in particular by the good performance of
Infectious Diseases, Pre-natal screening, Stool Testing and Vitamin D1,25; 2) the
expected sales slowdown of Vitamin D 25 OH test sales (-2.2% at CER); 3) the
positive growth of Instrumentation & other (+11.6% at CER); 4) the positive
contribution of the newly acquired Focus business (EUR 25.5m); 5) the negative
impact of forex (EUR 6m).
9M 16 EBITDA was higher than our estimates (9M EBITDA margin 38.3% vs
Akros est 36.8%). 9M 16 EBITDA grew by 16.1% Y/Y. The growth was especially
due to: 1) a stable trend of the gross margin (68.3% in 9M 16 vs 68.2% in 9M 15
–gross margin reduction inn Q3 was due to some phasing on sales to distributors
which enjoy lower prices, higher one-off scrap and rework costs, light dilution
coming from one full quarter of Focus Business); 2) the lower incidence of
operating expenses on sales.
Cash generation remains strong: NFP at September 30, 2016 was positive by
EUR 44m, down by EUR 223.9m compared to EUR 267.9m at December 31,
2015, mainly as a result of the acquisition of Focus Diagnostics and of EUR 14m
of share buyback (Q3M 16 free cash flow was EUR 43.3m vs EUR 35.5m in Q3
15).
FY 16 guidance confirmed: during the result conference call, the management
confirmed FY 16 guidance previously announced:
- sales growth of +6 - 7% Y/Y at CER;
- EBITDA growth of +9% Y/Y at CER.
Conclusion & Action: based on the foregoing results, we reckon unjustified
the yesterday negative reaction of the stock, therefore we confirm our
Accumulate recommendation. Based on the management indications, we
maintain our FY 16 estimates, which are substantially in line with the company’s
guidance and confirm our target price of EUR 62.70 per share calculated based
on our DCF model (WACC of 6.65% and 2.0% perpetual growth rate).
Analyst(s):
Paola Saglietti, Banca Akros
+39 02 4344 4287
Accumulate
50.75
closing price as of 10/11/2016
62.70
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg DIAS.MI/DIA IM
Market capitalisation (EURm) 2,839
Current N° of shares (m) 56
Free float 43%
Daily avg. no. trad. sh. 12 mth 80
Daily avg. trad. vol. 12 mth (m) 12,338
Price high 12 mth (EUR) 62.00
Price low 12 mth (EUR) 41.79
Abs. perf. 1 mth -13.32%
Abs. perf. 3 mth -16.60%
Abs. perf. 12 mth 21.53%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 499 562 637
EBITDA (m) 185 211 241
EBITDA margin 37.1% 37.5% 37.7%
EBIT (m) 152 168 194
EBIT margin 30.5% 29.9% 30.5%
Net Profit (adj.)(m) 101 111 128
ROCE 28.7% 16.9% 19.1%
Net debt/(cash) (m) (268) (66) (190)
Net Debt/Equity -0.5 -0.1 -0.2
Debt/EBITDA -1.4 -0.3 -0.8
Int. cover(EBITDA/Fin. int) 97.4 92.6 88.0
EV/Sales 4.9 5.0 4.2
EV/EBITDA 13.3 13.2 11.1
EV/EBITDA (adj.) 13.3 13.2 11.1
EV/EBIT 16.2 16.6 13.7
P/E (adj.) 27.0 25.6 22.1
P/BV 4.6 4.1 3.4
OpFCF yield 3.7% -6.9% 4.2%
Dividend yield 1.3% 1.3% 1.3%
EPS (adj.) 1.80 1.99 2.29
BVPS 10.49 12.48 14.77
DPS 0.65 0.65 0.68
30
35
40
45
50
55
60
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DIASORIN FTSE Italy All Share (Rebased)Source: Factset
Shareholders: IP Investimenti e partcipazioni 44%;
Management 13%;
Page 25 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
De Longhi
Italy/Household Goods Analyser
HOUSEHOLD GOODS
De Longhi (Neutral) Q3 sales and profitability slightly higher than expected
Q3: weak top line but good cash flow generation
The facts: Yesterday De Longhi released its Q3 and 9M 2016 results and held a
CC in the afternoon. After results and CC stock closed at -3.7%.
Our analysis: De Longhi’s quarterly results came in weaker than expected in
terms of top line but with a slightly better operating performance, despite a difficult
market scenario (top line -4.6% Y/Y in 9M, -2% like for like). Improved profitability
allowed DLG to improve net profit from EUR 62.5m to EUR 72.1m in 9M (+15%).
EBITDA major contributor in 9M were: positive: price effect (EUR 16m) and cost
reduction (EUR 20m); negative: FX (EUR -21m), Volumes (EUR -10m).
Data in EUR m Q3
15A
Q3
16A Y/Y
Q3
16E
9M
15A
9M
16A Y/Y
9M
2016E
Sales 424.2 387.2 -8.7% 398.9 1,215 1,159 -4.6% 1,171
EBITDA 54.6 50.6 -7.3% 51.5 149.9 154.5 3.1% 155.4
EBITDA margin 12.9% 13.1%
12.9% 12.3% 13.3%
13.3%
EBIT 41.4 37.9 -8.5% 39.1 111.8 117.7 5.3% 118.9
EBIT margin 9.8% 9.8% 9.8% 9.2% 10.2% 10.2%
Source: Banca Akros, De Longhi estimates
Strong operating cash flow allowed DLG to slightly reduce its net cash in Q3 to
EUR 159m (EUR 173m in June) despite the seasonal increase in NWC due to
stocking activity (inventories up from EUR 382m to EUR 433m in Q3, thus leading
NWC/FY 2016E sales from 12.3% in June to 13.7% in Sep). High focus on NWC
was confirmed by the management decision to avoid increase in accounts
receivable despite a potential sales loss in the period.
Geographic. Strong weakness in MEIA (-25.8% Y/Y in 9M, -31.4% in Q3) only
partially offset by high single digit growth in North America, China and Japan.
Europe declined by 2.1%. The drop in MEIA was driven by: i) reduction of activity
in Egypt; ii) destocking in Saudi Arabia; iii) slowdown in Cooking & Food
Preparation after 2015 strong performance.
Products. Still strong contribution from Coffee makers in 9M despite the negative
performance from capsule products that was not able to offset a strong decline in
sales in the Cooking & Food Preparation division.
Guidance. DLG’s management provided a guidance on 2016 implying stable top
line and an EBITDA improvement in absolute value. In 2017 top line should grow
by at least 5% due to new products launch (Cooking & Food Preparation to
benefit since Q4-16), new distribution agreements, recovery in some geographical
areas.
M&A. Possible sizeable deal thanks to net cash position and strong cash flow
generation. Best targets would be companies’ in US and APAC with a focus on
products distributable with the current DLG’s network.
Conclusion & Action: Weak set of results as expected, testifying some
difficulties in the reference market and, in particular, in some geographical areas
(MEIA) and product categories (i.e. Cooking & Food Preparation, Capsule coffee
makers). However, we appreciate once again the strong focus on profitability
enhancement and cash flow generation achieved also through NWC policies. We
believe new products and general market recovery in some geographical areas in
2017 could support the company’s guidance for 2017, while profitability will
continue to gradually increase over the years. M&A still an opportunity in a
mature market but we do not expect any major announcement in the short term.
We trim our estimates on 2016 to factor in a slightly lower top line and we move
our TP to EUR 21.5/sh. Neutral confirmed.
Analyst(s):
Enrico Filippi, CEFA, Banca Akros
+39 02 4344 4071
Neutral
19.77
closing price as of 10/11/2016
21.50
21.90from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg DLG.MI/DLG IM
Market capitalisation (EURm) 2,956
Current N° of shares (m) 150
Free float 38%
Daily avg. no. trad. sh. 12 mth 111
Daily avg. trad. vol. 12 mth (m) 7,111
Price high 12 mth (EUR) 27.67
Price low 12 mth (EUR) 18.93
Abs. perf. 1 mth -9.64%
Abs. perf. 3 mth -16.90%
Abs. perf. 12 mth -15.48%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 1,891 1,893 1,977
EBITDA (m) 285 287 301
EBITDA margin 15.1% 15.2% 15.2%
EBIT (m) 232 235 248
EBIT margin 12.3% 12.4% 12.5%
Net Profit (adj.)(m) 149 154 163
ROCE 22.7% 22.4% 23.2%
Net debt/(cash) (m) (188) (260) (341)
Net Debt/Equity -0.2 -0.3 -0.3
Debt/EBITDA -0.7 -0.9 -1.1
Int. cover(EBITDA/Fin. int) 8.5 10.1 10.1
EV/Sales 2.1 1.4 1.3
EV/EBITDA 13.9 9.5 8.8
EV/EBITDA (adj.) 13.9 9.5 8.8
EV/EBIT 17.1 11.6 10.6
P/E (adj.) 27.8 19.2 18.2
P/BV 4.6 3.0 2.7
OpFCF yield 3.4% 4.7% 5.0%
Dividend yield 2.1% 2.2% 2.3%
EPS (adj.) 1.00 1.03 1.09
BVPS 6.06 6.65 7.27
DPS 0.41 0.44 0.46
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DE LONGHI Stoxx Household Goods (Rebased)Source: Factset
Shareholders: De Longhi Industrial SA 62%;
Page 26 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Fila
Italy/Household Goods Analyser
HOUSEHOLD GOODS
Fila (Buy) Q3: weak top line but good cash flow generation
9M 2016 results preview
The facts: Fila is due to release its 9M 16E results today after market closure, a
conf. call will follow @ 6:00 pm CET.
Our analysis: our estimates point to 40% sales increase in 9M 16 but we do not
rule out even higher growth. The top line drivers were: over historical average
organic growth (our est. +9% in 9M 16E to EUR 222m); contribution from
acquisitions (est. EUR 81m in 9M 16E). We calculated EUR 34.6m contribution
from Writefine and EUR 48m from Daler Rowney.
It is reasonable to expect a dilution in EBITDA margin (130 bps in 9M 16E)
related to the recently acquired companies’ integration.
Fila: 9M 16E results preview
(EUR m) Q3 15 Q3 16E Y/Y 9M 15 9M 16E Y/Y
Sales 76.3 103.3 35.4% 217.8 304.9 40.0%
EBITDA adj. 13.1 16.8 28.0% 40.9 53.3 30.4%
% on sales 17.1% 16.2%
18.8% 17.5%
Net income adj. 7.4 8.2 10.3% 20.7 25.2 22.0%
Source: Company data and Banca Akros estimates
Conclusion & Action: Buy confirmed based, once again, on the strong top line
organic growth and on the capability to make valuable acquisitions.
Analyst(s):
Giada Cabrino, CIIA, Banca Akros
+39 02 4344 4092
Buy
13.00
closing price as of 10/11/2016
14.80
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg FILA.MI/FILA IM
Market capitalisation (EURm) 536
Current N° of shares (m) 41
Free float 26%
Daily avg. no. trad. sh. 12 mth 33
Daily avg. trad. vol. 12 mth (m) 418
Price high 12 mth (EUR) 14.00
Price low 12 mth (EUR) 9.85
Abs. perf. 1 mth -2.62%
Abs. perf. 3 mth 1.96%
Abs. perf. 12 mth 30.39%
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vvdsvdvsdy
FILA FTSE Italy Microcap (Rebased)Source: Factset
Shareholders: Pencil 66%; VEI 8%;
Key financials (EUR)
12/15 12/16e
12/17e Sales (m) 275 394 419
EBITDA (m) adj. 47.5 63.1 71 EBITDA margin adj. 17.3
% 15
%
17.0
% EBIT (m) 34 52 59 EBIT margin 12.3
% 13.1
% 14.2
% Net Profit (adj.)(m) 25 32 35 ROCE 9.8
% 8.6
% 9.2
% Net debt/(cash) (m)
39 129 109 Net Debt/Equity 0.2 0.5 0.3 Debt/EBITDA
0.9 2.0 1.5 Int. cover(EBITDA/Fin. int) high 9.3 12.3 EV/Sales 1.9 1.8 1.6 EV/EBITDA 12.4 11.2 9.6 EV/EBITDA (adj.) 10.9 10.8 9.6 EV/EBIT 15.3 13.7 11.6 P/E (adj.) 18.1 17.0 15.3 P/BV 2.4 2.4 2.1 OpFCF yield -
9.0% -
20.4% 4.5
% Dividend yield 0.7
% 1.1
% 1.4
% EPS (adj.) 0.60 0.77 0.86 BVPS 4.50 5.51 6.22 DPS 0.09 0.15 0.19
Page 27 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
CNH Industrial
Italy/Industrial Engineering Analyser
INDUSTRIAL ENGINEERING
CNH Industrial (Accumulate) 9M 2016 results preview
NAFTA 4WD tractor sales rebounded for the first time since 2014
The facts: The US Association of Equipment Makers ("AEM") released the US
and Canadian AG equipment registration data for the month of October 2016 last
night.
Our analysis: Here follow the October data by segment:
2 wheel-drive tractor sales came in at 23.4 K units, marking a +1.7% Y/Y
and a +1.5% YTD.
4 wheel-drive tractor sales came in at 612 units, marking a +19% Y/Y and
a -20% YTD.
Combine sales came in at 579 units, marking a -27.5% Y/Y and a -21.5%
YTD.
October is a rather important month as it weighs for ~10% of the annual US and
Canadian annual sales; October 2016 had two working days less than October
2015; also in this light, the October data seem pretty good, especially for 4 wheel-
drive tractors, while the combine performance remained weak.
Consider that the NAFTA 4WD tractor sales fell for at least 33 months in a row
with only one exception (December 2015, +0.6% Y/Y).
Conclusion & Action: we remind you that the NAFTA 4WD tractor registrations
are expected to fall ~25% Y/Y in 2016 reaching ~3 K units, marking a -65% vs the
record level reached in 2012 (8.5 K units); the 2001-15 average registrations for
4WD tractors stands at ~5.2 K units and the FY16 sales should be ~43% below
that level. We deem the news be positive.
Analyst(s):
Gabriele Gambarova, Banca Akros
+39 02 43 444 289
Accumulate
7.39
closing price as of 10/11/2016
7.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CNHI.MI/CNHI IM
Market capitalisation (EURm) 10,016
Current N° of shares (m) 1,355
Free float 56%
Daily avg. no. trad. sh. 12 mth 4,196
Daily avg. trad. vol. 12 mth (m) 68,227
Price high 12 mth (EUR) 7.39
Price low 12 mth (EUR) 5.17
Abs. perf. 1 mth 10.46%
Abs. perf. 3 mth 9.48%
Abs. perf. 12 mth 14.40%
Key financials (USD) 12/15 12/16e 12/17e
Sales (m) 24,677 23,360 24,208
EBITDA (m) 2,126 2,073 2,258
EBITDA margin 8.6% 8.9% 9.3%
EBIT (m) 1,432 1,395 1,581
EBIT margin 5.8% 6.0% 6.5%
Net Profit (adj.)(m) 626 436 601
ROCE 8.9% 8.8% 9.9%
Net debt/(cash) (m) 1,622 2,068 1,568
Net Debt/Equity 0.3 0.5 0.3
Debt/EBITDA 0.8 1.0 0.7
Int. cover(EBITDA/Fin. int) 4.4 4.6 5.3
EV/Sales 0.4 0.5 0.5
EV/EBITDA 4.6 5.6 4.9
EV/EBITDA (adj.) 4.6 5.6 4.9
EV/EBIT 6.8 8.4 7.0
P/E (adj.) 15.0 25.0 18.1
P/BV 1.9 2.4 2.1
OpFCF yield 12.6% -0.7% 3.9%
Dividend yield 1.6% nm 2.4%
EPS (adj.) 0.46 0.32 0.44
BVPS 3.57 3.31 3.76
DPS 0.13 -0.06 0.19
4.0
4.5
5.0
5.5
6.0
6.5
7.0
7.5
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CNH INDUSTRIAL FTSE MIB (Rebased)Source: Factset
Shareholders: EXOR 27%; HARRIS LP 14%;
BLACKROCK 3%;
Page 28 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Datalogic
Italy/Industrial Engineering Analyser
INDUSTRIAL ENGINEERING
Datalogic (Accumulate) NAFTA 4WD tractor sales rebounded for the first time since 2014
Q3 2016 results preview
The facts: Q3 16 results are due out today.
Our analysis: the management already announced that Q3 16 sales recorded an
increase of 4.6% Y/Y at EUR 139.9m. This growth was due to a positive
performance of ADC sector (+8.4% Y/Y, +8.6% at CER) and a stable trend of IA
sector (+1.1% Y/Y).
We forecast Q3 16 profitability to continue to benefit from the operating leverage
in the ADC division and will be positively impacted by the first significant
improvements of operating efficiency in the IA division.
The following table shows our Q3/9M 16 forecast:
DATALOGIC: Q3 16e and 9M 16e preview
Q3 15a Q3 16e Chg 9M 15a 9M 16e Chg
Sales 133.8 139.9 4.6% 391.3 421.8 7.8%
EBITDA 18.8 20.5 9.1% 53.1 65.4 23.3%
Margin % 14.0% 14.6% 13.6% 15.5%
Source: Company Data and BANCA AKROS estimates
Conclusion & Action: we confirm our Accumulate recommendation.
Analyst(s):
Paola Saglietti, Banca Akros
+39 02 4344 4287
Accumulate
18.00
closing price as of 10/11/2016
19.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg DAL.MI/DAL IM
Market capitalisation (EURm) 1,052
Current N° of shares (m) 58
Free float 33%
Daily avg. no. trad. sh. 12 mth 43
Daily avg. trad. vol. 12 mth (m) 318
Price high 12 mth (EUR) 19.30
Price low 12 mth (EUR) 12.52
Abs. perf. 1 mth -2.70%
Abs. perf. 3 mth 4.53%
Abs. perf. 12 mth 14.80%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 535 578 617
EBITDA (m) 74 89 98
EBITDA margin 13.8% 15.4% 15.9%
EBIT (m) 56 67 75
EBIT margin 10.4% 11.7% 12.2%
Net Profit (adj.)(m) 47 56 66
ROCE 11.1% 12.1% 12.3%
Net debt/(cash) (m) 21 2 (24)
Net Debt/Equity 0.1 0.0 -0.1
Debt/EBITDA 0.3 0.0 -0.2
Int. cover(EBITDA/Fin. int) 16.6 20.8 24.2
EV/Sales 1.9 1.9 1.8
EV/EBITDA 14.0 12.4 11.0
EV/EBITDA (adj.) 14.0 12.4 11.0
EV/EBIT 18.7 16.4 14.4
P/E (adj.) 23.6 20.9 17.9
P/BV 3.2 3.0 2.6
OpFCF yield 5.2% 2.5% 2.8%
Dividend yield 0.9% 0.9% 0.9%
EPS (adj.) 0.69 0.86 1.01
BVPS 5.10 5.96 6.97
DPS 0.15 0.15 0.16
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DATALOGIC FTSE Italy STAR (Rebased)Source: Factset
Shareholders: Hydra 67%;
Page 29 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Interpump
Italy/Industrial Engineering Analyser
INDUSTRIAL ENGINEERING
Interpump (Accumulate) Q3 2016 results preview
Q3 sales slightly lower than expected but strong profitability
9M 16 sales up by 1.6% (slightly lower than our est of +1.8%) - -0.5% on a
like-for-like basis and at constant exchange rates: in particular, the Water
Jetting division decreased by 2.0% (-3.3% on a like-for-like basis and at constant
exchange rates) and the Hydraulic sector showed a sales growth of +3.8%
(+1.2% on a like-for-like basis and at constant exchange rates). The performance
of the hydraulic sector is due to an increasing market share, due to cross selling
and cross market; while the slowdown in the water jetting market are due to the
uncertainty linked to US elections, indirectly to the fall of the oil price sector and to
the shift between purchase and rental.
9M 16 EBITDA margin improved by 7.3% (better than our estimates of
+5.8%): in particular, the profitability in the Water Jetting remained stable, while,
the strong profitability growth in the Hydraulic division of +13.5% has been driven
by integration synergies and the positive effects of the ongoing reorganization
process.
INTERPUMP: Q3/9M 16 results
Q3 15a Q3 16a % Chg
Sales 214.9 220.6 +2.6%
EBITDA 44.8 49.3 +10.1%
% margin 20.8% 22.3%
9M 15a 9M 16a % Chg
Sales 681.9 693.0 +1.6%
EBITDA 141.3 151.6 +7.3%
% margin 20.7% 21.9%
Source: Company Data
Positive outlook on FY 16 results confirmed: based on the current visibility, the
management expects sales to continue to show the same low but positive growth
trend recorded in the first nine months, while the profitability will continue to
benefit from the reorganisation process. So the management is confident in
confirming FY 16 guidance announced in February for profitability and NFP: FY
16 EBITDA at EUR 190m (+/-5m) and FY 16 NFP at EUR 190m (+/- 10m); while
the revenues, excluding acquisitions, will be slightly below the initial expectations:
FY 16 sales guidance of EUR 915m (+/- 10m).
Based on 9M 16 profitability, we confirm our FY 16e EBITDA of EUR 190.4m.
In addition, the group’s chairman, Mr Montipò, said to expect an acceleration in
the M&A activity in 2017, in order to achieve the target to 2017 of EUR 1bn sales.
In particular, the group wants to strengthen its position in the recently entered
Hoses & Fittings sector and in the plunger pumps for food industry recently
entered through Bertoli acquisition.
Conclusion & Action: we reiterate our positive stance on the stock and we
confirm our Accumulate recommendation and our target price of EUR 16.20 per
share, calculated based on our DCF model (WACC at 7.1% and 1.8% perpetual
growth rate).
Analyst(s):
PaolaSaglietti, Banca Akros
+39 02 4344 4287
Accumulate
14.77
closing price as of 10/11/2016
16.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ITPG.MI/IP IM
Market capitalisation (EURm) 1,608
Current N° of shares (m) 109
Free float 80%
Daily avg. no. trad. sh. 12 mth 271
Daily avg. trad. vol. 12 mth (m) 4,517
Price high 12 mth (EUR) 15.99
Price low 12 mth (EUR) 10.45
Abs. perf. 1 mth -4.15%
Abs. perf. 3 mth -1.93%
Abs. perf. 12 mth 3.94%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 895 913 944
EBITDA (m) 180 190 198
EBITDA margin 20.1% 20.9% 20.9%
EBIT (m) 137 146 151
EBIT margin 15.3% 16.0% 16.0%
Net Profit (adj.)(m) 116 114 118
ROCE 9.5% 9.7% 10.2%
Net debt/(cash) (m) 255 193 58
Net Debt/Equity 0.4 0.3 0.1
Debt/EBITDA 1.4 1.0 0.3
Int. cover(EBITDA/Fin. int) (6.7) (6.8) (6.9)
EV/Sales 2.0 2.0 1.8
EV/EBITDA 10.0 9.4 8.5
EV/EBITDA (adj.) 10.0 9.4 8.5
EV/EBIT 13.2 12.3 11.1
P/E (adj.) 15.9 16.7 16.2
P/BV 2.5 2.3 2.0
OpFCF yield -9.3% 10.2% 8.5%
Dividend yield 1.2% 1.3% 1.3%
EPS (adj.) 0.90 0.88 0.91
BVPS 5.66 6.52 7.42
DPS 0.18 0.19 0.20
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INTERPUMP Stoxx Industrial Engineering (Rebased)Source: Factset
Shareholders: IPG Holding 20%;
Page 30 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Prima Industrie
Italy/Industrial Engineering Analyser
INDUSTRIAL ENGINEERING
Prima Industrie (Buy) Q3 sales slightly lower than expected but strong profitability
Q3 to confirm top line and profitability improvement
The facts: Prima Industrie is going to release Q3 / 9M 2016 results today. No CC
is scheduled.
Our analysis: The strong order backlog already announced during the last
months should have supported a material top line increase, coupled with
profitability enhancement in Q3.
As shown in the following table revenues should increase to EUR 94.7m in the
quarter (+12.5% Y/Y) or EUR 278m in 9M 16 (+6.9% Y/Y). EBITDA should reach
EUR 23.5m in 9M (8.5% margin) whilst EBIT should come at EUR 12.4m (4.5%
margin). On the back of our estimates on financial charges and taxes for the year
we project a net profit of EUR 1.8m in Q3 (EUR 4.7m in 9M, more than doubling
the figure recorded in 9m 15).
EUR m Q3-15A Q3-16E Y/Y 9M-15A 9M-16E Y/Y
Sales 84.2 94.7 12.5% 260.1 278.0 6.9%
EBITDA 7.0 8.7 24.2% 21.7 23.5 8.2%
EBITDA margin 8.3% 9.20%
8.3% 8.5%
D&A (3.4) (3.2) -6.3% (9.9) (10.9) 10.1%
EBIT 3.6 5.5 53.2% 11.8 12.6 6.6%
EBIT margin 4.3% 5.8%
4.5% 4.5%
Net Profit 0.9 1.8 95.4% 2.2 4.7 n.m.
Source: Company data, Banca Akros estimates
Conclusion & Action: we expect a good top line growth in Q3 16, thus
confirming once again previous quarters positive indications on top line growth;
profitability should increase too supporting our estimates of margins expansion by
FY 16 and further improving over the next years thanks to better product mix (i.e.
increase in sales of internally developed laser fibre solutions). We believe
investors will pay attention also to updated order backlog - we remind that the
management recently talked about a historical high 6-months backlog – that could
once again confirm positive trend for the coming quarters.
Analyst(s):
Enrico Filippi, CEFA, Banca Akros
+39 02 4344 4071
Buy
14.00
closing price as of 10/11/2016
16.40
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg PRII.MI/PRI IM
Market capitalisation (EURm) 147
Current N° of shares (m) 10
Free float 43%
Daily avg. no. trad. sh. 12 mth 13
Daily avg. trad. vol. 12 mth (m) 256
Price high 12 mth (EUR) 15.29
Price low 12 mth (EUR) 8.75
Abs. perf. 1 mth 0.50%
Abs. perf. 3 mth 10.24%
Abs. perf. 12 mth -9.03%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 364 395 428
EBITDA (m) 31 36 43
EBITDA margin 8.6% 9.1% 10.1%
EBIT (m) 17 21 28
EBIT margin 4.8% 5.2% 6.6%
Net Profit (adj.)(m) 6 10 15
ROCE 4.2% 4.7% 6.2%
Net debt/(cash) (m) 102 103 95
Net Debt/Equity 0.8 0.7 0.6
Debt/EBITDA 3.2 2.9 2.2
Int. cover(EBITDA/Fin. int) 3.4 5.1 6.4
EV/Sales 0.7 0.6 0.6
EV/EBITDA 8.3 7.0 5.7
EV/EBITDA (adj.) 8.3 7.0 5.7
EV/EBIT 14.9 12.3 8.6
P/E (adj.) 25.8 14.8 10.0
P/BV 1.2 1.1 1.0
OpFCF yield -7.5% 5.8% 6.6%
Dividend yield 1.8% 2.1% 2.5%
EPS (adj.) 0.57 0.95 1.39
BVPS 12.37 13.07 14.16
DPS 0.25 0.30 0.35
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PRIMA INDUSTRIE Stoxx Industrial Engineering (Rebased)Source: Factset
Shareholders: Management 7%; Stable Financial
Investors 50%;
Page 31 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Allianz
Germany/Insurance Analyser
INSURANCE
Allianz (Buy) Q3 to confirm top line and profitability improvement
Strong Q3 results well above expectations
The facts: Allianz has just reported strong Q3 results which came in well above
our and consensus expectations. Operating profit increased by 18% yoy to EUR
2,899m (equinet: EUR 2,600m), all business units surpassing our forecast. In P/C
operating profit increased by 4% yoy to EUR 1,410m (equinet: EUR 1,300m) due
to a lower than forecasted C/R of 93.5% (exp. 95.0%). In L/H operating profit
increased by 53% yoy to EUR 1,129m (exp. EUR 900m). Positively, Pimco
reported net inflows of EUR 4.7bn, for the whole group net inflows stood at EUR
6.2bn (exp. EUR 0bn). Solvency II ratio increased by 1%-pts. qoq 186%. ALV
sticks to its 2016 operating profit target of EUR 10.5bn (+/- EUR 0.5bn); note that
it has achieved a 9M operating profit of EUR 8bn.
Our analysis: In P/C Allianz benefited from low nat cat losses (nat cat ratio stood
at 0.2%-pts.) while the run-off ratio was at 3.0%-pts. on a normal level. Revenues
remained stable yoy in Q3 at EUR 11.5bn, the price effect stood at 1.6%-pts. in
Q3 ‘16 (Q2 ‘16: 0.7%-pts.). In L/H the operating performance benefited from the
favourable capital market environment and positive one-offs (DAC true-ups). In
Asset Management CIR improved by almost 3%-pts. yoy to 60.8% due to lower
costs, while revenues were down by 6% yoy in Q3, mainly due to lower
performance fees (-38% yoy). Other non-operating items were with EUR -120m
better than expected (equinet: EUR -400m); therefore net profit was with EUR
1.85bn well above our forecast of EUR 1.4bn.
Conclusion & Action: Allianz reported strong Q3 results which came in better
than expected. Particularly the fact that Pimco has finally managed to show net
inflows again should be seen positively. We stick to our Buy rating with a target
price of EUR 160 as the shares remain attractively valued (2017e PER: 9x) while
offering a dividend yield of more than 5% for 2016e.
Analyst(s):
Philipp Häßler, CFA, equinet Bank
+49 69 58997 414
Buy
148.75
closing price as of 10/11/2016
160.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ALVG.DE/ALV GY
Market capitalisation (EURm) 66,938
Current N° of shares (m) 450
Free float 100%
Daily avg. no. trad. sh. 12 mth 1,603
Daily avg. trad. vol. 12 mth (m) 618,412
Price high 12 mth (EUR) 168.00
Price low 12 mth (EUR) 119.20
Abs. perf. 1 mth 8.38%
Abs. perf. 3 mth 9.46%
Abs. perf. 12 mth -5.82%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 66,903 70,248 73,761
Non-Life Gross prem.(m) 51,597 53,145 54,208
Total Net Revenues (m) 144,887 148,043 152,345
Life Ins.Tech.Result (m) -9,103 -8,606 -8,102
Non-Life Ins. Tech.Result 2,243 2,138 2,235
EBIT (m) 10,923 11,738 12,162
Net Profit (adj.) (m) 6,616 7,085 7,375
Shareholders Equity (m) 63,144 66,944 70,832
ANAV (m) 33,032 36,275 39,589
ROE (adj.) (%) 10.7 10.9 10.7
Combined ratio (%) 95.6 95.0 95.0
Solvency Ratio 186.6% 192.2% 198.0%
P/E (adj.) 11.2 9.5 9.2
P/BV 1.2 1.0 0.9
P/ANAV 2.2 1.8 1.7
P/EbV 1.1 1.0 0.9
Dividend Yield 4.9% 5.2% 5.4%
EPS (adj.) 14.55 15.58 16.22
BVPS 140.32 148.76 157.40
ANAVPS 73.40 80.61 87.98
EbVPS 145.47 155.33 165.49
DPS 7.30 7.75 8.00
110
120
130
140
150
160
170
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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ALLIANZ Stoxx Insurance (Rebased)Source: Factset
Shareholders:
Allianz - Q3 2016
EUR m Q3 '16 Q3 '16e Q3 15 yoy Cons. delta
Net premiums 27,700 29,450 27,500 1% na na
C/R P/R Reins. 93.5% 95.0% 94.1% -60 BP na na
Operating res. 2,899 2,600 2,452 18% 2,569 1%
P/C 1,410 1,300 1,352 4% 1,331 -2%
L/H 1,129 900 738 53% 894 1%
Asset Man. 604 570 500 21% 566 1%
Others -244 -170 -138 na na na
Pretax Profit 2,793 2,200 2,159 29% 2,390 -8%
Net income 1,855 1,396 1,359 36% 1,559 -10%
Sources: Allianz, equinet Research
Page 32 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Cattolica Assicurazioni
Italy/Insurance Analyser
INSURANCE
Cattolica Assicurazioni (Neutral) Strong Q3 results well above expectations
3Q 2016 preview
The facts: Cattolica is due to release its 3Q 16 results today, during market
hours. A conference call will be arranged the same day at 15.00 CET.
Our analysis: we summarize our result preview in the following table.
3Q16E Y/Y 9M16E Y/Y 3Q15 9M15
Net premiums 886 -9% 3,136 -16% 974 3,740
Net Profit 21 -31% 38 -54% 31 84
Net Profit Adj. 21 -42% 93 -10% 37 104
CoR 93.5% 1% 93.1% 1% 92.3% 92.5%
We estimate a decrease of c. 9% Y/Y in net premiums, mainly due to the
slowdown in the distribution agreement with Banca Popolare di Vicenza in life
business and to the weak momentum we expect in auto business, still affected by
the decrease in tariffs and despite the positive trend we estimates in the numbers
of policies sold. The CoR is seen around 93.5% vs 92.3% in 3Q15, mainly due to
the impact of the Italian August earthquake. We expect a financial result (EUR
110m) better than in 3Q15 (EUR 89m) which anyway was affected by non-
recurring items.
That said, we estimate an adj. net profit of c. EUR 21m, -42% Y/Y, mainly due, as
highlighted, by the life weak net premiums. After the impairment of Cattolica’s
stake in some small Italian banks in 1H16, we don’t expect further write-downs in
this quarter.
Conclusion & Action. In view of the results, we stick to neutral. It will be crucial
to understand the future of Banca Popolare di Vicenza stake (15.1%), now owned
by Atlante fund. We also remind readers that Cattolica is likely to exercise the put
options on the insurance partnerships with BPVI, which exercise will expire in
February 2017 and could produce a cash-in of c. EUR 175m. The transformation
of Cattolica into a joint stock company or a more likely improvement in corporate
governance in 2017 remains the most important upside potential in the medium
term, as well as M&As, in accordance with the business plan presented in 2014.
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
+39 02 4344 4022
Neutral
5.50
closing price as of 10/11/2016
6.40
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CASS.MI/CASS IM
Market capitalisation (EURm) 941
Current N° of shares (m) 171
Free float 85%
Daily avg. no. trad. sh. 12 mth 522
Daily avg. trad. vol. 12 mth (m) 4,445
Price high 12 mth (EUR) 7.49
Price low 12 mth (EUR) 4.98
Abs. perf. 1 mth 5.77%
Abs. perf. 3 mth 1.38%
Abs. perf. 12 mth -23.77%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 3,129 2,631 2,608
Non-Life Gross prem.(m) 2,079 2,042 2,089
Total Net Revenues (m) 5,429 4,812 4,802
Life Ins.Tech.Result (m) 0 0 0
Non-Life Ins. Tech.Result 0 0 0
EBIT (m) 225 258 251
Net Profit (adj.) (m) 140 113 110
Shareholders Equity (m) 1,912 1,994 2,054
ANAV (m) 1,696 1,778 1,838
ROE (adj.) (%) 7.3 5.9 5.5
Combined ratio (%) 91.5 93.0 92.5
Solvency Ratio 209.6% 218.7% 221.0%
P/E (adj.) 9.0 8.3 8.5
P/BV 0.7 0.5 0.5
P/ANAV nm nm nm
P/EbV nm nm nm
Dividend Yield 6.4% 5.4% 5.9%
EPS (adj.) 0.82 0.66 0.64
BVPS 11.17 11.65 12.00
ANAVPS 0.00 0.00 0.00
EbVPS 0.00 0.00 0.00
DPS 0.35 0.30 0.32
4.5
5.0
5.5
6.0
6.5
7.0
7.5
8.0
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CATTOLICA ASSICURAZIONI FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Banca Popolare di Vicenza 15%;
Page 33 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Generali
Italy/Insurance Analyser
INSURANCE
Generali (Accumulate) 3Q 2016 preview
Conference call: some highlights
The facts: Generali reported its 9M16 yesterday, followed by a Q&A conference call.
Our analysis: following a set of operating results essentially in line with consensus,
despite better than ours, the conference call set the following take away:
Italy: the profitability in motor business (c 40% of the total motor business of the
group) is deteriorating, although the management team expects prices will go up in
the next months with a possible improvement in current generation’s profitability:
the volume effect is good and Generali sold over 1m telematics policies so far. In
Non-Motor business, Generali’s market share is around 30% and the underwriting
and profitability are solid, despite low growth rate linked to Italian economic
condition. To protect margins, the Life business is going towards unit liked,
protection and hybrid products (controlled volatility funds like underlying were also
introduced), as well as in Germany and France. The Italian earthquake costs could
be around EUR 100m (gross of taxes), like in Aquila’s one;
Exposure on Italian financial sector: c. 1% of the total assets base, of which c.
40% in subordinated bond and the rest is split between senior and covered bonds.
Generali doesn’t have an exposure to equity in the Italian banking sector;
Germany: Life business, despite the low interest rates, is solid and it doesn’t
require any capital injection in the short term, at least until 2021 or 2022 (Generali
Leben);
France: the CoR is around 100% at the moment, but the situation is improving
quickly. The country is cash positive both in Life and in P&C.
Solvency II: the approval to include the French life operations in the internal model
calculation is expected by the end of March 2017, reducing therefore the gap
between internal-model (188%) and Regulatory Solvency Ratio (159%). On the
other side Generali will use the EIOPA portfolio in FY 16 calculation, with a
possible negative impact between 6% and 8% in terms of Solvency ratio.
Conclusion & Action: overall, 3Q16 technical performance improved and conference
mood was essentially positive. Dividend apart (yield around 6%), the real trigger will be
the investor day in the short term (23rd November). Relative valuation is still cheap: we
are talking about a discount of c. 20% in terms of P/E multiples, despite a more
generous dividend policy compared to peers. We stick to accumulate.
Yield P/E Adj.
Company 2016 2017 2018 2016 2017 2018
ASSICURAZIONI GENERALI 6.6 7.1 7.5 8.2 7.7 7.5
ALLIANZ SE-REG 5.0 5.1 5.4 10.3 9.8 9.3
AXA SA 5.2 5.5 5.8 9.4 9.2 8.9
ZURICH INSURANCE GROUP AG 6.3 6.4 6.5 12.3 11.2 10.3
PEERS' MEDIAN 5.2 5.5 5.8 10.3 9.8 9.3
GENERALI VS PEERS 27% 29% 30% -21% -21% -20%
Source: Bloomberg’s consensus
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
+39 02 4344 4022
Accumulate
11.77
closing price as of 10/11/2016
13.40
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg GASI.MI/G IM
Market capitalisation (EURm) 18,324
Current N° of shares (m) 1,557
Free float 76%
Daily avg. no. trad. sh. 12 mth 8,858
Daily avg. trad. vol. 12 mth (m) 224,414
Price high 12 mth (EUR) 18.00
Price low 12 mth (EUR) 9.82
Abs. perf. 1 mth 3.52%
Abs. perf. 3 mth -2.81%
Abs. perf. 12 mth -32.74%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 49,425 47,745 48,222
Non-Life Gross prem.(m) 20,868 20,214 20,428
Total Net Revenues (m) 84,477 80,657 80,777
EBIT (m) 4,088 4,149 4,084
Net Profit (adj.) (m) 2,130 2,113 2,074
Shareholders Equity (m) 23,565 24,557 25,575
ANAV (m) 20,403 21,401 22,419
ROE (adj.) (%) 9.3 9.0 8.5
Combined ratio (%) 93.3 93.2 93.2
Solvency Ratio 196.5% 199.8% 203.8%
P/E (adj.) 12.4 8.7 8.8
P/BV 1.1 0.7 0.7
P/ANAV 1.3 0.9 0.8
P/EbV 0.9 0.6 0.6
Dividend Yield 6.1% 5.8% 5.7%
EPS (adj.) 1.37 1.36 1.33
BVPS 15.14 15.78 16.43
ANAVPS 13.11 13.75 14.40
EbVPS 19.35 20.14 20.31
DPS 0.72 0.68 0.67
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GENERALI Stoxx Insurance (Rebased)Source: Factset
Shareholders: Mediobanca 13%;
Page 34 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
MAPFRE SA
Spain/Insurance Analyser
INSURANCE
MAPFRE SA (Neutral) Conference call: some highlights
Q3 2016 Earnings: Slightly better
The facts: 9m’16 net profit reached EUR572m, 4.4% above our estimated
EUR548m; the 3Q data (EUR191.6m) repeated the EUR191.7m in 1Q’16 and
surpasses 2Q’16 by 1.5% (EUR188.7m).
Our analysis: Business performance: in 9m’16 net premiums (EUR17.1bn) fell
1.3% Y/Y, which compares with -0.8% drop in June 2016. Per insurance
business, Non-life premiums (EUR13.5bn) drop -2.3T Y/Y (-1.3% 1H’16 partially
owing to the forex effect). Life premiums (EUR3.6bn) increases +3.2% (+1.3%
1H’16), which leans on 25% Y/Y growth in the agent network in Spain.
Combined ratio: reaching 97.2% 9m’16 at Group level and higher during the
quarter (6m’16 97.5%) and also vs. 9m’15 (98.7%). The improvement comes due
to the Claims Ratio (69.2%) which compares with the 70.0% a year earlier and
69.9% at June’16. Per areas and vs. June 2016, the advance leans on the
improvements in MAP-Iberia (71.1% vs. 72.4%); MAP-Brazil (62.5% vs. 64.3%, in
which the extreme weather events in 1Q’16 have not repeated), in MAP-
N.America (73.9% vs. 74.6%) and in MAP-Re (65.2% vs. 67.1%). On the
contrary, Mapfre’s Expense ratio erode to 28.0% vs. 27.6% (6m’16), although
improves vs. 9m’15 (28.7%).
Managed savings: increased 6.0% YTD to EUR38.7bn (excluding the impact from
Unión Duero Vida and Duero Pensiones the growth would be 10% YTD)
Equity (EUR9,158m): back to growth, rising 6.8% YTD and surpassing the
EUR8,946m at June’16 by +2.4% and EUR8,620m at Sep15.
ROE: still under pressure, reaching 7.8% vs. 8.8% June’16, although compares
with the 8.0% 9m’15, which is partially due to the rise in equity.
Dividend: Mapfre announced a DPS EUR0.06 (gross), the same as in 2015; as
well as the total DPS against 2016 rising to EUR0.13, 7.3% below 2015.
Solvencia: la dirección de MAPFRE ha declarado que se encuentra cómoda con
el ratio de Solvencia II del 171% II que la compañía publicó en el 2T16.
Solvency: MAPFRE’s management declared that is comfortable with the ratio
Solvency II ratio released at 2Q16 but did not disclosed additional data.
Conclusion: We positively value these quarterly results. However, we prefer to
wait until the Investors Day of next week (November 16th) before making any
changes to our estimates. Mapfre trades at P/NAV’17e of 1.0x vs. peers’ 1.0x,
2017e yield of 5.3% (peers: 5.2%). Neutral reiterated.
Analyst(s):
Javier Bernat, GVC Gaesco Beka
+34 91 436 7816
Neutral
2.64
closing price as of 10/11/2016
2.85
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg MAP.MC/MAP SM
Market capitalisation (EURm) 8,127
Current N° of shares (m) 3,080
Free float 32%
Daily avg. no. trad. sh. 12 mth 9,662
Daily avg. trad. vol. 12 mth (m) 29,269
Price high 12 mth (EUR) 2.73
Price low 12 mth (EUR) 1.68
Abs. perf. 1 mth 2.37%
Abs. perf. 3 mth 12.06%
Abs. perf. 12 mth 5.77%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 4,871 4,992 5,142
Non-Life Gross prem.(m) 17,441 18,513 19,438
Total Net Revenues (m) 20,648 21,798 22,950
Life Ins.Tech.Result (m) 699 720 741
Non-Life Ins. Tech.Result 919 1,143 1,264
EBIT (m) 1,476 1,863 2,132
Net Profit (adj.) (m) 577 723 860
Shareholders Equity (m) 8,574 9,158 9,588
ANAV (m) 1,366 1,407 1,449
ROE (adj.) (%) 6.5 8.2 9.2
Combined ratio (%) 98.6 96.9 96.2
Solvency Ratio 190.0% 185.0% 180.0%
P/E (adj.) 12.3 11.2 9.4
P/BV 0.8 0.9 0.8
P/ANAV 1.0 1.1 1.0
P/EbV 2.4 2.7 2.7
Dividend Yield 4.9% 4.9% 5.3%
EPS (adj.) 0.19 0.23 0.28
BVPS 2.78 2.97 3.11
ANAVPS 2.27 2.47 2.61
EbVPS 0.97 0.98 0.98
DPS 0.13 0.13 0.14
Net Income (EURm) 9M '15 9M '16 (E) Y/Y vs.GVC 1Q16 2Q16 3Q16 Q Trend wieght (*)
Iberia 416.2 386.1 (7.2)% 19.2% 112.3 131.2 142.6 59.0%
LatAm North 39.1 36.5 (6.6)% (20.7)% 18.0 14.8 3.7 5.5%
LatAm South 33.1 18.4 (44.4)% (31.9)% 13.9 3.8 0.7 4.7%
Brazil 132.4 102.1 (22.9)% (0.9)% 27.0 41.0 34.1 18.8%
EMEA 18.9 (36.7) nm nm (10.9) (13.4) (12.7) 2.7%
North America (44.5) 59.5 nm nm 16.8 25.7 17.0 (6.3)%
APAC 0.5 (11.0) nm 37.5% (6.2) (0.7) (4.1) 0.1%
Mapfre RE 109.2 122.6 12.3% (3.5)% 51.1 39.3 32.2 15.5%
Adjustments (113.6) (105.5) (7.1)% (7.5)% (30.3) (53.0) (22.2) (16.1)%
Net Income 591.3 572.0 (3.3)% 4.4% 191.7 188.7 191.3 83.9%
Source MAP(*) pre adjustments
1.6
1.8
2.0
2.2
2.4
2.6
2.8
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
MAPFRE SA Stoxx Insurance (Rebased)Source: Factset
Shareholders: Fundación Mapfre 68%;
Page 35 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
UnipolSai
Italy/Insurance Analyser
INSURANCE
UnipolSai (Accumulate) Q3 2016 Earnings: Slightly better
3Q16 net profit in line with estimates
The facts: UnipolSai reported 3Q16 results this early morning. CC @ at 12.00 am CET
today.
3Q16 Y/Y A/E 9M16 3Q16E 9M16E
GWP 2,279 -21% -6% 9,000 2,430 9,151
Life 864 -38% -12% 3,900 980 4,016
Non-Life 1,415 -4% -2% 5,100 1,450 5,135
EBT 222 4% 11% 605 200 583
Life 76 52% 27% 252 60 236
Non - Life 156 -9% 6% 381 148 373
RE -6 -33% 50% -16 -4 -14
Others -5 n.m. 25% -13 -4 -12
CoR (Net reinsurance) 95.2% n.a 0% 96.0% 95.4% 96.4%
Net Profit 140 -1% 2% 409 137 406
Solvency II n.a. n.m. n.a. 1.69 n.a. 1.75
Our analysis: bottom line was essentially in line with our estimates, although EBT
closed over, mainly thanks to the better result in Life business. This effect was due to
taxes higher than we estimated. We underline also the better than expected results in
RE business unit.
In the Non-Life business the direct premiums amounted to EUR 5.141bn, -2.1% Y/Y,
of which EUR 3.023bn from MV business, -4.6% Y/Y, and c. EUR 2.118bn from Non-
MV business, +1.7% Y/Y mainly thanks to the solid performance of business relating to
persons as well as new production in MV business (c. 200k policies more than 9M15).
With regard to underwriting profitability, the positive performance recorded by Non-MV
business made it possible to offset the continuous decline in average MV TPL
premiums resulting from strong competitive pressure. The company recorded a CoR
net of reinsurance around 96% (96.9% in 1H16) a little bit worse than last year (95.7%)
and better than our estimates. The Italian’s earthquake had a marginal impact.
In Life business, the direct premiums achieved EUR 3.9bn, -20.6% Y/Y, mainly due to
the comparison with the strong performance recorded last year and relating mainly to
the bancassurance channel, attributable to the commercial policy adopted by the
company aimed at maintaining the production of traditional policies at a level
compatible with the financial balance of segregated accounts over a multi-year period.
The commercial offer was consequently geared towards unit-linked and multi-branch
products.
RE business the pre-tax result closed with a loss of c. EUR 6m compared to EUR -
90m of last year, and it was still affected by the difficult situation of the real estate
market.
Conclusion & Action: considering the challenging scenario, this is a good set of
result, which, in terms of EBT, beat our estimates in all the business segments. In
terms of cumulated net profit we are in the middle (EUR 1.493bn) of UnipolSai’s
business plan targets (EUR 1.4bn – EUR 1.6bn in 2016 - 2018). Our estimates are
more conservative in terms of cumulated dividend (EUR 894m vs EUR 1bn of the
business plan in 2016 - 2018).
Analyst(s):
Enrico Esposti, CIIA, Banca Akros
+39 02 4344 4022
Accumulate
1.72
closing price as of 10/11/2016
1.65
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg US.MI/US IM
Market capitalisation (EURm) 4,928
Current N° of shares (m) 2,865
Free float 37%
Daily avg. no. trad. sh. 12 mth 9,675
Daily avg. trad. vol. 12 mth (m) 21,574
Price high 12 mth (EUR) 2.44
Price low 12 mth (EUR) 1.26
Abs. perf. 1 mth 13.46%
Abs. perf. 3 mth 12.71%
Abs. perf. 12 mth -26.31%
Key financials (EUR) 12/15 12/16e 12/17e
Life Gross premiums (m) 6,648 5,651 5,538
Non-Life Gross prem.(m) 7,334 7,072 7,219
Total Net Revenues (m) 15,142 13,654 13,615
EBIT (m) 1,044 769 737
Net Profit (adj.) (m) 711 508 494
Shareholders Equity (m) 6,278 6,361 6,560
ANAV (m) 5,527 5,557 5,756
ROE (adj.) (%) 11.7 8.2 7.8
Combined ratio (%) 94.6 95.0 95.1
Solvency Ratio 172.9% 176.7% 183.4%
P/E (adj.) 9.5 9.7 10.0
P/BV 1.1 0.8 0.8
P/ANAV 1.2 0.9 0.9
P/EbV 1.2 0.9 0.8
Dividend Yield 8.7% 6.2% 6.0%
EPS (adj.) 0.25 0.18 0.17
BVPS 2.19 2.22 2.29
ANAVPS 1.93 1.94 2.01
EbVPS 1.99 2.00 2.07
DPS 0.15 0.11 0.10
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
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
UNIPOLSAI Stoxx Insurance (Rebased)Source: Factset
Shareholders: Unipol Gruppo Finanziario S.p.A. 61%;
Norges Bank 2%;
Page 36 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Atlantia
Italy/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Atlantia (Accumulate) 3Q16 net profit in line with estimates
Good results expected in Q3
The facts: Atlantia is publishing 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
Total revenues 1,510 1,544 2.2% 4,003 4,109 2.6%
o/w Italian motorways 1,085 1,100 1.3% 2,842 2,950 3.8%
o/w Foreign motorways 136 149 9.2% 415 404 -2.8%
o/w ADR 252 263 4.2% 622 662 6.4%
o/w Other 50 35 -30.0% 139 102 -26.6%
EBITDA 970 1,042 7.4% 2,488 2,618 5.2%
% revenues 64.2% 67.5%
62.2% 63.7%
EBIT 729 750 2.9% 1,804 1,713 -5.0%
PBT 584 616 5.5% 1,220 1,325 8.6%
Net profit 377 376 -0.3% 754 787 4.4%
Source: Company data, Banca Akros estimates
We highlight that the company has already disclosed the traffic figures for the fist
nine months of 2016.
Conclusion & Action: we expect the company’s results to be good and show a
sizeable growth in EBITDA compared to Q3 15.
Analyst(s):
Francesco Sala, Banca Akros
+39 02 4344 4240
Accumulate
20.19
closing price as of 10/11/2016
27.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ATL.MI/ATL IM
Market capitalisation (EURm) 16,673
Current N° of shares (m) 826
Free float 52%
Daily avg. no. trad. sh. 12 mth 1,920
Daily avg. trad. vol. 12 mth (m) 83,237
Price high 12 mth (EUR) 25.00
Price low 12 mth (EUR) 20.19
Abs. perf. 1 mth -7.68%
Abs. perf. 3 mth -9.42%
Abs. perf. 12 mth -17.42%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 5,304 5,295 5,488
EBITDA (m) 3,215 3,349 3,475
EBITDA margin 60.6% 63.2% 63.3%
EBIT (m) 2,212 2,376 2,450
EBIT margin 41.7% 44.9% 44.7%
Net Profit (adj.)(m) 741 915 959
ROCE 5.0% 5.3% 5.4%
Net debt/(cash) (m) 10,399 10,028 10,070
Net Debt/Equity 1.2 1.1 1.1
Debt/EBITDA 3.2 3.0 2.9
Int. cover(EBITDA/Fin. int) 4.3 5.6 5.9
EV/Sales 6.1 5.3 5.1
EV/EBITDA 10.0 8.4 8.1
EV/EBITDA (adj.) 10.0 8.4 8.1
EV/EBIT 14.6 11.9 11.5
P/E (adj.) 27.3 18.2 17.4
P/BV 3.0 2.4 2.3
OpFCF yield 5.2% 7.2% 5.2%
Dividend yield 4.4% 4.8% 5.2%
EPS (adj.) 0.90 1.11 1.16
BVPS 8.13 8.49 8.82
DPS 0.88 0.97 1.04
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ATLANTIA Stoxx Construction & Materials (Rebased)Source: Factset
Shareholders: Sintonia 30%; Investco 8%; Blackrock
5%; Fondazione CRT 5%;
Page 37 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Boskalis Westminster
Netherlands/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Boskalis Westminster (Neutral) Good results expected in Q3 Neutral
29.41
closing price as of 10/11/2016
33.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg BOSN.AS/BOKA NA
Market capitalisation (EURm) 3,695
Current N° of shares (m) 126
Free float 60%
Daily avg. no. trad. sh. 12 mth 473
Daily avg. trad. vol. 12 mth (m) 17,540
Price high 12 mth (EUR) 43.54
Price low 12 mth (EUR) 28.17
Abs. perf. 1 mth -9.88%
Abs. perf. 3 mth -12.43%
Abs. perf. 12 mth -32.15%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 3,249 2,378 2,159
EBITDA (m) 813 550 484
EBITDA margin 25.0% 23.1% 22.4%
EBIT (m) 520 283 238
EBIT margin 16.0% 11.9% 11.0%
Net Profit (adj.)(m) 459 246 190
ROCE 16.0% 8.4% 6.5%
Net debt/(cash) (m) 169 233 193
Net Debt/Equity 0.0 0.1 0.0
Debt/EBITDA 0.2 0.4 0.4
Int. cover(EBITDA/Fin. int) 25.6 19.6 13.7
EV/Sales 1.1 1.1 1.2
EV/EBITDA 4.5 4.9 5.4
EV/EBITDA (adj.) 4.5 4.9 5.4
EV/EBIT 7.0 9.4 11.0
P/E (adj.) 10.3 15.0 19.4
P/BV 1.3 1.0 0.9
OpFCF yield 12.1% 1.7% 2.8%
Dividend yield 5.4% 3.5% 2.7%
EPS (adj.) 3.65 1.96 1.52
BVPS 29.57 30.57 31.65
DPS 1.60 1.02 0.80
Trading update in line; Offshore Energy looks good
The facts: Boskalis reported a trading update that was in line with expectations.
Our analysis: Boskalis reported a mostly qualitative trading update. As was to be
expected, Boskalis reiterated its outlook of a level of operating net profit in 2H16
to approach the level achieved in the first half of the year. The order book
increased to EUR 2.9bn from EUR 2.7bn at 1H16, driven by the consolidation of
the now fully incorporated Volker Wessels offshore activities. Capex guidance is
decreased to a range of EUR 180-200m from approximately EUR 200m with the
1H16 results.
If we look at the phrasing of the comments of the divisions, Dredging & Inland
Infra had a quiet third quarter in line with 1H16. Project margins were good and
project results from earlier finalizations were fine but with utilization at Hoppers in
line with the exceptionally low level in 1H16 (25 weeks), results were probably
less than we had pencilled in. Hopper utilization usually is a good indicator of
EBITDA development.
So the phrasing in Dredging was somewhat less than we had expected. This is
more than compensated by a better phrasing at Offshore Energy which had a
good Q3, supported by the contribution from the offshore activities acquired from
VolkerWessels. Revenue and results at the segment rose compared to the
previous quarters, which is more than we had hoped for and excluding the
VolkerWessels activities, revenue and the result were slightly lower compared to
1H which we see as a strong development. The spot and services market is
getting more difficult, but new opportunities are rising in offshore wind and we
expect that the long large contracts Dockwise had, also generated a strong
contribution.
Towage & Salvage was in line, although Lamnalco and Keppel Smit were lower
than expected in terms of results. All in all, Boskalis reiterated its expectation that
2H16 operating net profit will be in line with 1H16. Boskalis does not exclude
impairments on the offshore activities (Dockwise) with the FY results, but potential
impairments will not affect dividend.
Capital expenditure is expected to be EUR 180-200m from approximately EUR
200 million expressed earlier.
Conclusion & Action: Boskalis’ trading update was in line with expectations. On
balance we will increase our FY16 estimates lightly, as the Offshore Energy
activities are performing much better than we expected and Dredging somewhat
less. Potential impairments on the Offshore activities could scare the market
somewhat, but as there will be no effect on the dividend and the balance sheet is
very strong, it has no impact on our investment case. We have a Neutral rating
and PT of EUR 33.
28
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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
BOSKALIS WESTMINSTER Stoxx Construction & Materials (Rebased)Source: Factset Shareholders: HAL 32%; Marathon Asset management
4%; Spucegrove 5%; Oppenheim 4%;
Sarasin 3%; Blackrock 5%; Analyst(s):
Edwin de Jong, NIBC Markets N.V.
+312 0 5508569
Page 38 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Buzzi Unicem
Italy/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Buzzi Unicem (Accumulate) Trading update in line; Offshore Energy looks good
Good results as expected
The facts: Buzzi Unicem published its third quarter results yesterday before
market closing.
Our analysis: the company’s results were good and almost in line with our
estimates at the EBITDA level. On the contrary financial costs were much higher
than expected in Q3 at EUR 41.3m vs. EUR 22.0m in Q2. T
Q3 15 Q3 16 % Y/Y Q3 16e 9M 15 9M 16 % Y/Y
Revenues 764.1 748.0 -2.1% 764.0 2,031.1 2,038.1 0.3%
o/w west-Eur 296.6 294.3 -0.8% 300.5 838.3 841.0 0.3%
o/w US 329.5 301.5 -8.5% 311.8 823.5 831.7 1.0%
o/w east-Eur 144.7 151.1 4.4% 147.7 365.6 354.0 -3.2%
EBITDA 185.5 193.6 4.4% 198.8 352.1 416.2 18.2%
margin 24.3% 25.9%
26.0% 17.3% 20.4%
EBIT 136.8 143.3 4.8% 150.6 206.9 272.4 31.7%
margin 17.9% 19.2%
19.7% 10.2% 13.4%
PBT 124.8 126.1 1.0% 153.1 178.9 255.3 42.7%
Taxes -40.9 -37.2
-51.3 -58.6 -74.9
Net profit 83.9 88.9 5.9% 101.8 120.3 180.4 50.0%
o/w minorities -1.1 -1.4
-0.7 -2.7 -2.6
The company confirmed its 2016 target of a recurring EBITDA of around EUR
520m.
Conclusion & Action: the results were sound. We confirm our recommendation
and target on the stock.
Analyst(s):
Francesco Sala, Banca Akros
+39 02 4344 4240
Accumulate
19.72
closing price as of 10/11/2016
21.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg BZU.MI/BZU IM
Market capitalisation (EURm) 4,064
Current N° of shares (m) 206
Free float 42%
Daily avg. no. trad. sh. 12 mth 777
Daily avg. trad. vol. 12 mth (m) 41,457
Price high 12 mth (EUR) 19.72
Price low 12 mth (EUR) 12.10
Abs. perf. 1 mth 8.47%
Abs. perf. 3 mth 4.95%
Abs. perf. 12 mth 22.48%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 2,718 2,725 2,844
EBITDA (m) 473 528 581
EBITDA margin 17.4% 19.4% 20.4%
EBIT (m) 264 334 380
EBIT margin 9.7% 12.2% 13.4%
Net Profit (adj.)(m) 125 183 221
ROCE 3.7% 4.7% 5.3%
Net debt/(cash) (m) 1,030 943 787
Net Debt/Equity 0.4 0.3 0.3
Debt/EBITDA 2.2 1.8 1.4
Int. cover(EBITDA/Fin. int) 4.5 5.8 7.8
EV/Sales 1.5 1.7 1.6
EV/EBITDA 8.5 8.7 7.6
EV/EBITDA (adj.) 8.5 8.7 7.6
EV/EBIT 15.2 13.7 11.6
P/E (adj.) 27.3 22.3 18.4
P/BV 1.3 1.5 1.4
OpFCF yield 1.6% 2.5% 4.6%
Dividend yield 0.4% 0.8% 0.9%
EPS (adj.) 0.61 0.89 1.07
BVPS 12.39 13.23 14.22
DPS 0.08 0.15 0.18
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BUZZI UNICEM FTSE MIB (Rebased)Source: Factset
Shareholders: Buzzi family 58%;
Page 39 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Maire Tecnimont
Italy/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Maire Tecnimont (Accumulate) Good results as expected
USD 328m new award in Malaysia
The facts: Maire Tecnimont said yesterday that it had been awarded a USD
328m new contract in Malaysia
Our analysis: Maire Tecnimont in joint venture with China HuanQiu Contracting &
Engineering Corporation Ltd. (HQC) – 65% Tecnimont / 35% HQC – has been
awarded by PRPC Polymers Sdn Bhd (PRPC Polymers) a package of
PETRONAS’ Integrated Complex (PIC) relating to the realization of a High
Density Polyethylene Unit on an EPCC (engineering, procurement, construction
and commissioning) Lump Sum Turn-Key basis, for an amount of approximately
USD 328m.
This award follows up the USD 482m contract granted to the same joint venture
by PETRONAS in November 2015. The unit will be located inside the PIC, in
Pengerang, in the southeastern region of Johor, Malaysia, where the joint venture
is currently carrying out the activities related to the first project. PRPC Polymers is
a wholly owned subsidiary of PETRONAS Chemicals Group Berhad which in turn
is a subsidiary of Petroliam Nasional Berhad (“PETRONAS”), Malaysia’s fully
integrated oil and gas multinational, one of the largest players in the sector
globally. Beijing-based HQC, affiliated with China National Petroleum Corporation
(CNPC), is a leading engineering company in the Oil & Gas industry in China and
a reputable EPC contractor in the region.
The project’s Scope of Work envisages the provision of complete engineering
services, equipment and material supply, erection and construction activities up to
start up and guarantee test run. Completion is expected in early of third quarter
2019. The High Density Polyethylene Unit will be based on LyondelBasell’s
Hostalen Advance Cascade Process (HACP) technology and will have a capacity
of 400,000 t/y (tons per year).
Conclusion & Action: the contract is sizeable and this is clearly good news.
Analyst(s):
Francesco Sala, Banca Akros
+39 02 4344 4240
Accumulate
2.37
closing price as of 10/11/2016
3.20
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg MTCM.MI/MT IM
Market capitalisation (EURm) 723
Current N° of shares (m) 306
Free float 35%
Daily avg. no. trad. sh. 12 mth 865
Daily avg. trad. vol. 12 mth (m) 3,587
Price high 12 mth (EUR) 2.72
Price low 12 mth (EUR) 1.86
Abs. perf. 1 mth 13.31%
Abs. perf. 3 mth 12.67%
Abs. perf. 12 mth -11.19%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 1,670 2,280 2,432
EBITDA (m) 131 150 175
EBITDA margin 7.8% 6.6% 7.2%
EBIT (m) 115 143 167
EBIT margin 6.9% 6.3% 6.9%
Net Profit (adj.)(m) 44 66 91
ROCE 35.0% 47.7% 62.5%
Net debt/(cash) (m) 126 53 (39)
Net Debt/Equity 1.0 0.3 -0.1
Debt/EBITDA 1.0 0.4 -0.2
Int. cover(EBITDA/Fin. int) 3.6 6.1 9.2
EV/Sales 0.5 0.3 0.3
EV/EBITDA 6.8 5.2 4.0
EV/EBITDA (adj.) 6.8 5.2 4.0
EV/EBIT 7.7 5.5 4.2
P/E (adj.) 17.6 10.9 8.0
P/BV 6.2 3.8 2.7
OpFCF yield 38.7% 11.6% 14.4%
Dividend yield 2.0% 2.1% 2.1%
EPS (adj.) 0.14 0.22 0.30
BVPS 0.41 0.62 0.87
DPS 0.05 0.05 0.05
1.6
1.8
2.0
2.2
2.4
2.6
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MAIRE TECNIMONT FTSE Italy All Share (Rebased)Source: Factset
Shareholders: GLV capital 55%; Ardeco 10%;
Page 40 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Sacyr
Spain/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Sacyr (Buy) USD 328m new award in Malaysia
Good growths in 9m’16
The facts: Growth at operating level (EBITDA +6.1%) and recurrent net profit
(+25%, EUR89m vs. EUR71m), where concessions standout – company driver –
as well as industrial services.
Our analysis : From these results we highlight :
1) Repsol: Debt EUR1,305m (EUR10.7/share). The EUR213m from the derivate
subscribed in October is not included yet. With the latter part of the risk is
eliminated (16%) from the stake (8.4%) below EUR10.7/share and if the share
rises, the rise is guaranteed up to a certain level. The book value is
EUR15.6/share.
2) Net debt : Increases (EUR54m vs. 2015) to EUR4,234m. The lower debt in
Repsol (EUR308m) is offset by the higher debt in activities. Corporate debt
increases slightly (EUR549m vs. EUR525m). Cash increases to EUR516m
following the amortisation of ERU200m in bonds.
3) Results : Traffic grows well in Spain (+5%), EBITDA in concessions +10.4%,
with margins improving ; construction continues weak (-28% EBITDA) and
continues with the restructuring process. Industrials grows substantially (+82%
EBITDA) due to organic growth and acquisitions. Services increases slightly,
dragged by international development costs.
4) Concessions : Equity commitments have been covered in concessions for
2016. In 2017 EUR80-90m equity will be invested.
Conclusion: Good results. The focus is on how pending investments in
concessions will be financed. Positive outlook maintained.
Analyst(s):
Rafael Fernández de Heredia, GVC Gaesco Beka
+34 91 436 78 08
Buy
2.02
closing price as of 09/11/2016
2.02
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg SCYR.MC/SCYR SM
Market capitalisation (EURm) 1,044
Current N° of shares (m) 517
Free float 74%
Daily avg. no. trad. sh. 12 mth 5,403
Daily avg. trad. vol. 12 mth (m) 10,159
Price high 12 mth (EUR) 2.43
Price low 12 mth (EUR) 1.29
Abs. perf. 1 mth 2.02%
Abs. perf. 3 mth 28.39%
Abs. perf. 12 mth -17.51%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 2,949 2,973 3,129
EBITDA (m) 318 344 389
EBITDA margin 10.8% 11.6% 12.4%
EBIT (m) 148 230 261
EBIT margin 5.0% 7.7% 8.3%
Net Profit (adj.)(m) (227) 118 146
ROCE 5.5% 11.1% 11.1%
Net debt/(cash) (m) 4,180 4,019 4,048
Net Debt/Equity 2.2 2.0 1.9
Debt/EBITDA 13.1 11.7 10.4
Int. cover(EBITDA/Fin. int) 1.3 1.5 1.7
EV/Sales 1.3 1.3 1.3
EV/EBITDA 12.3 11.2 10.0
EV/EBITDA (adj.) 12.3 11.3 10.1
EV/EBIT 26.4 16.8 15.0
P/E (adj.) nm 8.8 7.1
P/BV 0.6 0.6 0.6
OpFCF yield 3.1% 7.4% 14.2%
Dividend yield 2.5% 2.6% 2.6%
EPS (adj.) (0.44) 0.23 0.28
BVPS 3.20 3.38 3.61
DPS 0.05 0.05 0.05
9M15 9M16 %
Construction 1,175.0 996.7 -15.2%
Concessions 409.7 401.2 -2.1%
Services 756.6 943.7 24.7%
Holding/adjustments -218.1 -180.4 -17.3%
SALES 2,123.2 2,161.2 1.8%
9M15 9M16 %
Construction 53.1 38.3 -28.0%
Concessions 143.4 158.3 10.4%
Services 62.6 74.9 19.5%
Holding/adjustments -12.6 -9.8 -22.4%
EBITDA 246.5 261.6 6.1%
EBITDA 9M15 9M16 %
Amortisations/Prov -112.4 -102.3 -8.9%
Operating result 134.2 159.3 18.7%
Financial result -186.4 -154.6 -17.1%
Other -127.3 -3.5 -97.2%
Associates -294.5 115.1 -139.1%
Ordinary Result -473.9 116.3 -124.5%
Other 1,006.2 -27.0 -102.7%
Net Income 532.3 89.4 -83.2%
1.2
1.4
1.6
1.8
2.0
2.2
2.4
2.6
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
SACYR Stoxx Construction & Materials (Rebased)Source: Factset
Shareholders: Grupo Carceller 13%; Jose Manuel
Loureda 8%; Manuel Manrique 5%;
Page 41 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Salini Impregilo
Italy/Materials, Construction & Infrastructure Analyser
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Salini Impregilo (Accumulate) Good growths in 9m’16
2016 targets confirmed
The facts: the company said yesterday that 2016 targets were confirmed.
Our analysis: the company said that new orders in the first nine months were
EUR 6.9bn, EUR 1.3bn for Lane,
The company also said that 2016 targets were confirmed: revenues of around
EUR 6.1bn with an EBITDA margin higher than 9% and a net debt in line with
2015 excluding the cash-out related to the acquisition of Lane.
Conclusion & Action: the perspectives of the US market are promising.
recommendation and target confirmed.
Analyst(s):
Francesco Sala, Banca Akros
+39 02 4344 4240
Accumulate
2.67
closing price as of 10/11/2016
3.60
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg SALI.MI/SAL IM
Market capitalisation (EURm) 1,313
Current N° of shares (m) 492
Free float 33%
Daily avg. no. trad. sh. 12 mth 1,445
Daily avg. trad. vol. 12 mth (m) 11,293
Price high 12 mth (EUR) 4.14
Price low 12 mth (EUR) 2.42
Abs. perf. 1 mth 5.87%
Abs. perf. 3 mth 4.63%
Abs. perf. 12 mth -32.32%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 4,739 6,103 6,561
EBITDA (m) 487 549 600
EBITDA margin 10.3% 9.0% 9.2%
EBIT (m) 273 283 321
EBIT margin 5.8% 4.6% 4.9%
Net Profit (adj.)(m) 85 94 127
ROCE 13.7% 10.3% 11.4%
Net debt/(cash) (m) 46 441 368
Net Debt/Equity 0.0 0.3 0.3
Debt/EBITDA 0.1 0.8 0.6
Int. cover(EBITDA/Fin. int) 5.4 5.3 6.5
EV/Sales 0.4 0.3 0.2
EV/EBITDA 3.7 2.8 2.5
EV/EBITDA (adj.) 3.7 2.8 2.5
EV/EBIT 6.7 5.5 4.6
P/E (adj.) 23.3 13.9 10.4
P/BV 1.6 1.0 1.0
OpFCF yield 4.0% -28.4% 6.9%
Dividend yield 1.5% 1.5% 1.5%
EPS (adj.) 0.17 0.19 0.26
BVPS 2.47 2.57 2.80
DPS 0.04 0.04 0.04
2.4
2.6
2.8
3.0
3.2
3.4
3.6
3.8
4.0
4.2
4.4
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
SALINI IMPREGILO FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Salini costruttori 67%;
Page 42 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Hellenic Petroleum
Greece/Oil & Gas Producers Analyser
OIL & GAS PRODUCERS
Hellenic Petroleum (Buy) 2016 targets confirmed
3Q16 financial results – Solid performance exceeding estimates
The facts: ELPE reported yesterday a strong set of 3Q16 of financials results,
exceeding estimates: Specifically, “clean” group EBITDA stood at EUR 191m (vs.
consensus of EUR 179m and our estimate of EUR 193m) compared to EUR
240m in 3Q15, while “clean” net income settled at EUR 75m (vs. consensus of
EUR 59m and our estimate of EUR 71m) compared to “clean” net income of EUR
111m in 3Q15. Recording inventory gains of EUR 11m vs. inventory losses of
EUR 125m in 3Q15, ELPE reported IFRS EBITDA of EUR 199m (+73% YoY) and
IFRS net income of EUR 80m (+111% YoY).
Our Analysis: Below is an analysis per division:
Refining and trading division: Amid a softer refining environment, ELPE’s refining
margin stood at USD 8.3/bbl from USD 8.6/bbl in 2Q16 and USD 12.3/bbl in
3Q15. Sales volume rose by 20% YoY to 4.3m tons driven by record utilization
rate. Exports accounted for c.60% of total refining sales. Overall “clean” EBITDA
shaped at EUR 121m from EUR 105m in 2Q16 and EUR 163m in 3Q15.
Marketing: Fuel demand in 3Q16 was up 8% YoY (diesel +10%, gasoline +3%) on
favourable comparison due to the impact of capital controls imposed at the end of
June 2015. Although ELPE sales volume was up 1% YoY, EBITDA was down 5%
YoY to EUR 26m due to adverse aviation fuel pricing. International EBITDA fell by
12% YoY to EUR 18m due to increased competition in Bulgaria that affected
margins.
Petrochemicals: Solid performance continued in 3Q16 as the impact of somewhat
weaker PP margins was offset by higher sales volume. Specifically, EBITDA was
down 4% YoY to EUR 25m.
Power & gas (equity consolidation): Elpedison EBITDA stood at EUR 16m from
zero in 3Q15 on significant increase of power plant utilization and capacity
payments. Strong demand for natural gas from power plants also boosted
DEPA’s EBITDA by 50% YoY to EUR 48m.
Net debt & FCF: Group net debt stood at EUR 1.78bn (within the target of EUR
1.5-2.0bn) compared to EUR 1.7bn at the end of 2Q16 and EUR 2.4bn at the end
of 3Q15. In 9M16 ELPE generated negative FCF of EUR 515m (c.EUR -45m in
3Q16) on working capital normalization and capex of EUR 82m.
ELPE 9M16 results
EUR m 9M15 IBGe 9M16 % YoY
EBITDA 413 527 533 29.1%
EBITDA adj. * 575 504 517 -10.1%
Net Profit 105 175 184 75.2%
Net Profit (adj) * 203 179 183 -9.9%
EPS (adj)* 0.66 0.58 0.60 -9.9%
Source: The Company, IBG, *excluding inventory and one-offs
Conclusion & Action: Overall, it was a very good quarter amid a modest refining
environment supported by operational efficiencies (high utilization rate and crude
slate optimization), with FCF showing that it is close to turn positive as working
capital is gradually coming to desired levels. Going forward, the recovery of
refining margins in 4Q16 suggests that our annual estimates are achievable,
allowing management to resume dividend distribution next year. We reiterate our
Buy recommendation.
Analyst(s):
Vassilis Roumantzis, Investment Bank of Greece
+30 2108173394
Buy
4.15
closing price as of 10/11/2016
5.30
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg HEPr.AT/ELPE GA
Market capitalisation (EURm) 1,268
Current N° of shares (m) 306
Free float 26%
Daily avg. no. trad. sh. 12 mth 150
Daily avg. trad. vol. 12 mth (m) 316
Price high 12 mth (EUR) 5.10
Price low 12 mth (EUR) 2.90
Abs. perf. 1 mth 2.47%
Abs. perf. 3 mth 8.64%
Abs. perf. 12 mth -18.79%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 7,303 6,085 7,354
EBITDA (m) 444 679 602
EBITDA margin 6.1% 11.2% 8.2%
EBIT (m) 245 483 408
EBIT margin 3.4% 7.9% 5.5%
Net Profit (adj.)(m) 267 216 178
ROCE 18.6% 10.7% 9.3%
Net debt/(cash) (m) 1,123 1,441 1,269
Net Debt/Equity 0.6 0.7 0.6
Debt/EBITDA 2.5 2.1 2.1
Int. cover(EBITDA/Fin. int) 2.2 3.6 3.8
EV/Sales 0.2 0.3 0.2
EV/EBITDA 3.8 3.0 3.0
EV/EBITDA (adj.) 2.2 3.1 3.2
EV/EBIT 6.8 4.2 4.5
P/E (adj.) 4.6 5.9 7.1
P/BV 0.7 0.7 0.6
OpFCF yield 3.7% -23.5% 17.8%
Dividend yield 0.0% 2.4% 4.8%
EPS (adj.) 0.87 0.71 0.58
BVPS 5.51 6.26 6.81
DPS 0.00 0.10 0.20
2.5
3.0
3.5
4.0
4.5
5.0
5.5
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
HELLENIC PETROLEUM Stoxx Oil & Gas (Rebased)Source: Factset
Shareholders: Hellenic state 36%; Latsis group 46%;
Page 43 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
QGEP
Brazil/Oil & Gas Producers Analyser
OIL & GAS PRODUCERS
QGEP (Buy) 3Q16 financial results – Solid performance exceeding estimates
3Q16 results: lower production from Manati
The facts: QGEP release its 3Q16 results on Wednesday after the close of the
Brazilian market. The company recorded revenues of BRL 108.4m, EBITDA of
BRL 46m and net income of BRL 63m.
Our analysis: There are three main differences between the reported figures and
our own estimates. The first lays on the volumes produced in Manati, which came
below our 4.8 MMcm/d forecast reaching 4.4 MMcm/d. The second major
difference is at exploratory costs that at BRL 6m were below our BRL 22.9m
estimate. Finally, financial results reached a positive BRL 37.1m against the BRL
9.7m loss forecast. In this last case, the reason behind our loss assumption was
the depreciation of the US dollar against the Brazilian real, which would hurt
income from USD denominated financial assets (as happen in the previous
quarter). Management maintains its 2016 production target for Manati at 5.1
MMcm/d and estimates an average production of 4.9 MMcm/d in 2017. The
decline in production below Manati’s 6.0 MMcm/d capacity continues to relate with
challenging economic conditions in Brazil that impact gas demand. The
deployment of FPSO Petrojarl I in Atlanta (the first liquids project of the company,
in block BS-4) was delayed until the third quarter of 2017 from 1Q17, with
management citing “challenges” in the adaptation of the unit.
Conclusion & Action. Results came higher than expected in terms of EBITDA
but mainly in what concerns net income. This is a direct effect of more favourable
net financials, as we were anticipating a worse impact from the quarter’s
depreciation of the US dollar against the Brazilian real. The company continues to
expect an average production from Manati of 5.1 MMcm/d in 2016 and now
anticipates 4.9 Mmcm/d in 2017. This decrease is a result of a worst performance
of the Brazilian economy and the demand for gas. The deployment of FPSO
Petrojarl I was delayed until 3Q17 from the first quarter previously expected. We
continue to see QGEP as an interesting story in the Brazilian oil and gas industry,
with an operating hedge against potential further declines of the price of oil due to
the gas pricing mechanism of Manati. In addition, the company has a portfolio of
very interesting assets, namely in the pre-salt (Carcará) and the upcoming project
of Atlanta (despite the now announced delay).
Analyst(s):
Carlos Jesus, Caixa-Banco de Investimento
+351 21 389 6812
Buy
4.98
closing price as of 10/11/2016
16.60
Target Price unchanged
Recommendation unchanged
Target price: BRL
Share price: BRL
Reuters/Bloomberg QGEP3.SA/QGEP3 BZ
Market capitalisation (BRLm) 1,324
Current N° of shares (m) 266
Free float 27%
Daily avg. no. trad. sh. 12 mth 878
Daily avg. trad. vol. 12 mth (m) 4,401
Price high 12 mth (BRL) 6.59
Price low 12 mth (BRL) 3.62
Abs. perf. 1 mth -5.14%
Abs. perf. 3 mth -17.96%
Abs. perf. 12 mth -24.09%
Key financials (BRL) 12/15 12/16e 12/17e
Sales (m) 496 572 996
EBITDA (m) (93) 212 333
EBITDA margin nm 37.1% 33.5%
EBIT (m) (197) 116 142
EBIT margin nm 20.3% 14.2%
Net Profit (adj.)(m) 94 145 136
ROCE -7.9% 3.4% 4.0%
Net debt/(cash) (m) (753) (258) (272)
Net Debt/Equity -0.3 -0.1 -0.1
Debt/EBITDA 8.1 -1.2 -0.8
Int. cover(EBITDA/Fin. int) 0.3 (2.0) (5.2)
EV/Sales 0.6 1.0 0.6
EV/EBITDA nm 2.8 1.7
EV/EBITDA (adj.) nm 2.8 1.7
EV/EBIT nm 5.0 4.0
P/E (adj.) 16.6 9.1 9.7
P/BV 0.6 0.5 0.5
OpFCF yield -7.5% -34.3% 4.0%
Dividend yield 2.9% 3.0% 3.0%
EPS (adj.) 0.35 0.55 0.51
BVPS 10.12 10.51 10.87
DPS 0.15 0.15 0.15
3
4
5
6
7
8
9
10
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
QGEP IBOV (Rebased)Source: Factset
Shareholders: Queiroz Galvão SA 63%; FIP Quantum
7%; Other 3%;
BRLm 3Q15 2Q16 3Q16 9M2015 9M2016 3Q16e
Net revenues 112.1 120.4 108.4 362.7 372.6 117.8
Operating costs -57.3 -67.7 -57.4 -182.7 -185.6 -62.3
Gross profit 66.9 52.7 51.0 179.9 187.0 55.5
General expenditures -9.7 -10.5 -13.5 -36.4 -34.6 -10.3
Exploratory costs -7.7 -36.5 -6.0 -33.9 -51.4 -22.9
Other operating expenses -0.4 -2.8 0.1 -0.8 -2.3 0.0
EBIT 37.0 2.9 31.6 108.9 98.7 22.3
Net financials 133.4 -11.5 37.1 242.5 13.0 -9.7
EBT 170.5 -8.6 68.7 351.4 111.7 12.6
Taxes -51.6 0.8 -5.9 -98.4 -10.3 -4.3
Net income 118.9 -7.8 63.0 253.0 101.6 8.3
EBITDA 55.4 19.4 46.0 184.0 150.9 40.2
Dry and subcommercial wells 0.1 0.0 -0.2 9.8 0.2 0.0
EBITDAX 55.3 19.4 46.2 174.2 150.7 40.2
Manati gross gas production (MMcm/d) 5.0 5.0 4.4 5.5 5.1 4.8
Page 44 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Tecnicas Reunidas
Spain/Oil Services Analyser
OIL SERVICES
Tecnicas Reunidas (Accumulate) 3Q16 results: lower production from Manati
3Q’16 results in line with forecasts.
The facts : Tecnicas Reunidas presented 3Q’16 results
Our analysis : Results in line with forecasts :
Although sales in 9m’16 (+14.4%) decelerated vs. 1H’16 (+22%) it is within
forecasts. We estimate sales closing 2016 with +9.7% growths, at the top of the
guidance given. The EBIT margin in 3Q’16 reached 4.1%, slightly above the 4%
in 2Q and is performing as anticipated by the Company.
Orders in 3Q’16 reached EUR517m, thanks to the MGT Teesside biomass plant
in UK, in a JV with Samsung (EUR700m, 70% TRE). The deceleration in orders in
2016, with EUR1,532m new orders, took the pipeline at 3Q’16 to EUR10,090m,
far from highs seen at 2015 yearend with EUR12,136m (-17%). It seems that
Tecnicas Reunidas could be awarded the project to update the Ras Tanura
refinery (Saudi Arabia) for USD1.5-2.0bn in 2016 that would let the company
reach total new orders close to our estimated EUR3.3bn. Tecnicas Reunidas is
making offers and receiving invitations to attend tenders in the Middle East, Asia,
North America and LatAm. The Company is also focused on high added value
engineering projects such as Front End Engineering and Design (FEED). During
the conference call, TRE mentioned that order intakes in 2017 will be higher than
in 2016.We estimate EUR3.8bn in 2017.
In the breakdown of backlog, the following stand out: Middle East with 61%,
LatAm 18%, Europe 12% and RoW 9%. IN sales, Oil & Gas projects represented
88.5% of the total, with 14.7% growths vs. 9m’15, highlighting the contribution
from Refining & Petrochemicals and processing of natural gas. Revenues from
Generation & Energy grew 13.3% vs. 9m’15, representing 8.5% of the total.
Infrastructure & Industrial sales increased 7.4% vs. 9m’15 and its total weight
comes to 3%.
Although the investment in working capital for 9m’16 reaches EUR133m, and
EUR75m has been paid in dividends, net cash only dropped EUR44m to
EUR488m since 2015 year-end, which is similar to our estimated EUR501m.
Conclusion: Results in line with forecasts. Net cash, although dropped a little,
remains at a good level. The focus is also on order intakes. We maintain our
estimates and valuation.
Analyst(s):
Iñigo Recio Pascual, GVC Gaesco Beka
+34 91 436 7814
Accumulate
33.75
closing price as of 10/11/2016
36.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TRE.MC/TRE SM
Market capitalisation (EURm) 1,886
Current N° of shares (m) 56
Free float 52%
Daily avg. no. trad. sh. 12 mth 480
Daily avg. trad. vol. 12 mth (m) 20,834
Price high 12 mth (EUR) 38.31
Price low 12 mth (EUR) 21.75
Abs. perf. 1 mth -6.24%
Abs. perf. 3 mth 6.23%
Abs. perf. 12 mth -12.70%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 4,188 4,593 4,740
EBITDA (m) 105 204 211
EBITDA margin 2.5% 4.4% 4.4%
EBIT (m) 86 184 190
EBIT margin 2.1% 4.0% 4.0%
Net Profit (adj.)(m) 59 131 138
ROCE -23.8% -72.1% -218.5%
Net debt/(cash) (m) (533) (501) (427)
Net Debt/Equity -1.3 -1.1 -0.8
Debt/EBITDA -5.1 -2.5 -2.0
Int. cover(EBITDA/Fin. int) (70.4) 61.7 197.0
EV/Sales 0.3 0.3 0.3
EV/EBITDA 13.4 6.8 6.9
EV/EBITDA (adj.) 13.4 6.8 6.9
EV/EBIT 16.4 7.5 7.6
P/E (adj.) 32.8 14.4 13.6
P/BV 4.9 4.2 3.7
OpFCF yield 6.8% 2.5% 0.2%
Dividend yield 4.1% 4.1% 4.1%
EPS (adj.) 1.06 2.34 2.47
BVPS 7.04 7.99 9.07
DPS 1.40 1.40 1.40
TECNICAS REUNIDAS : 9M16 RESULTS
9M15 %sles 9M16 %sles %y/y 2Q16 3Q15 3Q16
Sales 3,006.0 100% 3,437.9 100% 14.4% 1,252.6 1,122.4 1,134.0
EBITDA 159.2 5.3% 154.1 4.5% -3.2% 55.4 56.6 51.6
Depreciation -11.6 -0.4% -15.2 -0.4% 31.0% -5.2 -4.0 -5.0
EBIT 147.6 4.9% 138.9 4.0% -5.9% 50.3 52.6 46.5
Financial results 4.2 0.1% -1.1 0.0% -1.4 1.0 3.2
EBT 151.8 5.0% 137.8 4.0% -9.2% 48.8 51.4 48.2
Income tax -36.6 -1.2% -36.5 -1.1% -0.3% -13.2 -11.3 -12.7
Net profit 115.2 3.8% 101.3 2.9% -12.1% 35.7 40.1 35.4
Source: GVC Gaesco Beka estimates
20
22
24
26
28
30
32
34
36
38
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
TECNICAS REUNIDAS IBEX 35 (Rebased)Source: Factset
Shareholders: Lladó Family 37%; Causeway 5%;
Page 45 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Merlin Properties
Spain/Real Estate Analyser
REAL ESTATE
Merlin Properties (Buy) 3Q’16 results in line with forecasts.
A sure bet
The facts : We initiate coverage on Merlin Properties with a Buy recommendation
and fair value of EUR12.51/share.
Our analysis: Merlin is the largest listed REIT (Real Estate Investment Trust) in
Spain and forms part of the Ibex 35 since December 2015. Merlin focuses on
the acquisition and active management of real estate assets in Spain and to
a lesser extent in Lisbon. The majority of the activities are offices mainly in Madrid
and Barcelona in both the CBD, the BD and new business areas (NBA).
Regarding shopping centres, the Company prefers dominating assets in city
centres, although it is also present on the outskirts with unique assets such as the
shopping centre Marineda. Regarding commercial premises, the majority comes
from an excellent contract signed with BBVA.
On the acquisition of Metrovacesa, firstly we highlight the price at which
Merlin’s shares were issued, EUR11.40/share, which implies a 7.5%
premium vs. the latest available NAV (1H’16). This acquisition increases
exposure to shopping centres, increases the office GAV in CBD/BD and
relative weight of new business areas in Madrid and Barcelona. In addition
visibility is increased on assets subject to be sold such as the residential and
hotel rental activity.
Metrovacesa is an excellent opportunity for Merlin’s team to demonstrate
its capacity in management. Occupancy is low compared with Merlin, as is
the gross margin (NRI or Net Rental Income). Active management seeking to
reposition certain assets with a short term contract context (WAULT 2.4 years)
should translate into positive surprises in the future NAV performance.
Merlin will access Metrovacesa’s tax shields which would accelerate
asset sales without a fiscal impact. This implies the possibility of surprising
the market with divestments above the GAV as carried out – in a small scale –
with some of Tree’s (BBVA) premises.
Once Metrovacesa is incorporated, we expect a robust performance of
EPS (+10% average 2016-18e) and FFO (+7%), that should overflow to the
dividend, increasing from EUR0.19/share in 2015 up to EUR0.48 2018e.
We also expect a good performance of NAV in coming years (+10.6%
2016-18e) assuming an average 0.6% drop in yield until 2018 and increasing
NRI (assuming 100% occupancy) of 3.2%. We reach a NAV 2017e of
EUR12.51/share which we use as our target price. With the above, we
expect an average return for shareholders (dividends + NAV growth) of 14%
during the period 2016-18.
Conclusion: Merlin offers the opportunity to benefit from a quality asset portfolio,
which trades at a discount over NAV, focused mainly on offices, retail and
logistics. The portfolio should be at full-steam in coming years (EPS +10% 2016-
18; FFO +7%), and that Merlin’s shareholders will benefit from with an average
14% shareholder return (dividends + NAV growth).
Analyst(s):
Rafael Fernández de Heredia, GVC Gaesco Beka
+34 91 436 78 08
Buy
9.23
closing price as of 10/11/2016
12.51
from
Target price: EUR
Share price: EUR
Reuters/Bloomberg MRL.MC/MRL SM
Market capitalisation (EURm) 4,337
Current N° of shares (m) 470
Free float 66%
Daily avg. no. trad. sh. 12 mth 2,180
Daily avg. trad. vol. 12 mth (m) 37,625
Price high 12 mth (EUR) 12.13
Price low 12 mth (EUR) 8.34
Abs. perf. 1 mth -7.50%
Abs. perf. 3 mth -10.71%
Abs. perf. 12 mth -16.86%
Key financials (EUR) 12/15 12/16e 12/17e
Gross Rental Income (m) 214 352 495
EBITDA (m) 161 281 389
EBITDA margin 73.6% 77.1% 76.8%
Portfolio Result (m) 251 561 687
Net Financial Result (355) (121) (124)
Net Profit (adj.)(m) 99 169 251
Funds From Operations 109 187 260
EPS (adj.) 0.44 0.43 0.53
DPS 0.19 0.37 0.44
IFRS NAVPS 9.06 11.07 12.69
EPRA NAVPS 9.84 11.01 12.51
Premium/(Discount) 27.4% (16.6%) (27.2%)
DPS 0.19 0.37 0.44
Earnings adj. yield 4.8% 4.6% 5.8%
Dividend yield 2.0% 4.0% 4.8%
EV/EBITDA 39.9 31.6 23.1
P/E (adj.) 26.3 21.6 17.3
Int. cover(EBITDA/Fin.int) 3.0 3.0 3.0
Net debt/(cash) (m) 2,696 4,804 4,934
Net Debt/Total Assets 39.0% 43.1% 41.0%
8.0
8.5
9.0
9.5
10.0
10.5
11.0
11.5
12.0
12.5
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
MERLIN PROPERTIES IBEX 35 (Rebased)Source: Factset
Shareholders: Santander 22%; BBVA 6%; Blackrock
3%; Popular 3%;
Page 46 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
WCM AG
Germany/Real Estate Analyser
REAL ESTATE
WCM AG (Accumulate) A sure bet Accumulate
2.56
closing price as of 10/11/2016
3.25
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg WCMKK.DE/WCMK GR
Market capitalisation (EURm) 334
Current N° of shares (m) 131
Free float 61%
Daily avg. no. trad. sh. 12 mth 413
Daily avg. trad. vol. 12 mth (m) 1,561
Price high 12 mth (EUR) 3.30
Price low 12 mth (EUR) 2.21
Abs. perf. 1 mth -8.42%
Abs. perf. 3 mth -17.34%
Abs. perf. 12 mth 8.13%
Key financials (EUR) 12/15 12/16e 12/17e
Gross Rental Income (m) 10 32 35
EBITDA (m) 4 27 32
EBITDA margin 29.5% 78.0% 86.3%
Portfolio Result (m) 55 20 23
Net Financial Result (2) (4) (4)
Net Profit (adj.)(m) 54 29 34
Funds From Operations 8 22 24
EPS (adj.) 0.72 0.24 0.26
DPS 0.00 0.09 0.09
IFRS NAVPS 2.23 2.41 2.58
EPRA NAVPS 2.38 2.50 2.67
Premium/(Discount) 19.1% 5.9% (1.1%)
DPS 0.00 0.09 0.09
Earnings adj. yield 28.1% 9.4% 10.3%
Dividend yield 0.0% 3.6% 3.7%
EV/EBITDA 146.8 22.8 19.5
P/E (adj.) 3.7 10.6 9.7
Int. cover(EBITDA/Fin.int) 1.9 6.8 7.3
Net debt/(cash) (m) 253 265 270
Net Debt/Total Assets 45.9% 40.7% 39.9%
WCM acquires further retail portfolio for EUR 98.2m
The facts: Today, WCM Beteiligungs- und Grundbesitz-AG announced the
acquisition of a further retail portfolio in the federal states of Baden-Wuertemberg
and Saxony-Anhalt. Closing of the transaction is expected within the first quarter
2017. Three retail centres were purchased for EUR 98.2m with a leading food
retail chain as the anchor tenant. The acquired portfolio has a total rental space of
88,000 sqm and an EPRA vacancy of 7%.
Our analysis: Annualized rental income of the acquired portfolio is approximately
EUR 7.6m. The gross rental yield is calculated at 7.7% and the Funds from
Operations (FFO) amounts to around EUR 4.2m. The weighted average lease
term (WALT) stands at 6.1 years for the anchor tenants and for the acquired
portfolio at 5.6 years.
The purchase price is planned to be financed with existing cash and a bank loan.
With this transaction WCM increases its portfolio value from EUR 645m (as of
June 2016) to EUR 766m. Annualized rental income is calculated at EUR 46m
and the annualized FFO I at EUR 25.5m (H1 June 2016: EUR 8.3m). The WALT
of WCM’s portfolio amounts to 8.5 years (vs. 9.4 years as of June 2016) with an
EPRA vacancy rate of 4.7% (vs.4.1% as of June 2016).
WCM forecast NAV per share to increase at least EUR 2.85 (vs. EUR 2.54 as of
June 2016) and the average cost of debt are expected to below 2%, including the
announced acquisition in September as well as the announced acquisition today.
Conclusion & Action: With the announced acquisition WCM is well on track in
terms of its growth strategy. We see the transaction positively because it will
result in a higher EPRA NAV and FFO. We maintain our price target of EUR 3.25
per share and reiterate our Accumulate recommendation.
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
WCM AG SDAX (Rebased)Source: Factset Shareholders: DIC Asset AG 25%; Karl Ehlerding 5%;
John Ehlerding 5%; Christoph Kroschke
4%; Stavros Efremidis 1.90%; Frank
Roseen 0.40%;
Analyst(s):
Philipp Häßler, CFA, equinet Bank
+49 69 58997 414
Page 47 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Reply
Italy/Software & Computer Services Analyser
SOFTWARE & COMPUTER SERVICES
Reply (Neutral) WCM acquires further retail portfolio for EUR 98.2m
9m 2016 Post: slowing growth
The facts: publication of Q3 2016 results
Our analysis: the headline P&L figures were in line/slightly below our estimates,
while the net financial position was definitely better. Reported growth slowed to
below single-digit in Q3, for the first time in a few years, while we estimate that
organic growth was just above of 3%. The geographic breakdown was
surprising, as Italy posted a 20% growth and the UK accelerated in spite of a
large currency drop. We note on the other hand the large intra-group adjustment
(EUR 22.7m or 11% of the total) which definitely makes the Y/Y comparison
opaque. In addition, both Italy and the UK benefitted in the quarter from a larger
consolidation perimeter (the latter increased the employee base by 11% in 3
months).
The EBITDA was a couple of millions EUROs below our forecasts, the negative
gap materialized in Germany and the UK.
Contrarily to Q2, this time the cash generation in the quarter was a positive
surprise, with EUR 19m improvement vs. the end of June (EUR -49m in Q2). Q2
outcome was explained by EUR 23m spent in M&A and financial investments, the
cash bridge is not available this time.
Reply 9m 2016 results (EUR m)
Q3
15a
Q3
2016e
Q3
2016a Y/Y
9m
2015a
9m
2016 Y/Y
Revenues 171 186 185 8.0% 517 571 10.6%
Italy 123 135 149 21.5% 379 431 13.9%
Germany* 30.1 31.6 32.1 6.7% 85.2 98.0 15.0%
UK 23.0 21.7 25.6 11.5% 66.1 70.2 6.2%
Other/adj -4.6 -3.2 -22.0 377.9% -13.4 -28.1 109.7%
EBITDA 23.0 25.9 23.9 3.6% 70.3 75.2 7.0%
mg 13.5% 14.0% 12.9% -0.5% 13.6% 13.2% -0.4%
Italy EBITDA 16.8 19.6 20.1 19.6% 57.7 64.6 12.0%
Germany EBITDA 4.0 4.1 2.4 -40.0% 8.1 8.6 6.2%
UK EBITDA 2.5 2.3 1.4 -43.6% 5.9 2.4 -59.3%
Other EBITDA na -0.2 0.00 nm na 0.0 nm
EBIT 20.5 23.3 20.8 1.3% 63.4 68.8 8.5%
EBT 19.2 23.3 21.9 13.7% 63.1 68.9 9.2%
Net debt/(cash) -42.0 -28.3 -42.2 0.6% -42.0 -42.2 0.6%
Source: Company data, BANCA AKROS estimates
Outlook: We are not significantly changing our estimates following the 9month
release; the implied performance in Q4 is around 8% revenues growth, 17%
EBITDA margin, neutral cash generation (taking into account the outstanding
earn-out, which is worth 28m at the end of September).
Conclusion & Action: neutral to negative release given the very low organic
growth and slight miss in the EBITDA.
Analyst(s):
Andrea Devita, CFA, Banca Akros
+39 02 4344 4031
Neutral
114.70
closing price as of 10/11/2016
124.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg REY.MI/REY IM
Market capitalisation (EURm) 1,073
Current N° of shares (m) 9
Free float 38%
Daily avg. no. trad. sh. 12 mth 10
Daily avg. trad. vol. 12 mth (m) 1,172
Price high 12 mth (EUR) 135.90
Price low 12 mth (EUR) 105.00
Abs. perf. 1 mth -6.37%
Abs. perf. 3 mth -5.75%
Abs. perf. 12 mth -1.55%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 706 776 817
EBITDA (m) 99 107 117
EBITDA margin 14.0% 13.8% 14.3%
EBIT (m) 89 97 105
EBIT margin 12.7% 12.5% 12.9%
Net Profit (adj.)(m) 57 62 67
ROCE 16.3% 25.5% 26.6%
Net debt/(cash) (m) (28) (55) (104)
Net Debt/Equity -0.1 -0.2 -0.3
Debt/EBITDA -0.3 -0.5 -0.9
Int. cover(EBITDA/Fin. int) 47.8 107.3 234.1
EV/Sales 1.7 1.3 1.2
EV/EBITDA 12.0 9.5 8.3
EV/EBITDA (adj.) 12.0 9.5 8.3
EV/EBIT 13.2 10.5 9.3
P/E (adj.) 20.8 17.4 16.1
P/BV 4.0 3.1 2.6
OpFCF yield 1.7% 2.6% 5.0%
Dividend yield 0.7% 0.9% 0.9%
EPS (adj.) 6.07 6.61 7.14
BVPS 31.66 37.27 43.40
DPS 0.85 1.00 1.00
100
105
110
115
120
125
130
135
140
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
REPLYSource: Factset
Shareholders: Rizzante Mario 53%; Shareholder value
mgmt AG 4%; Lodigiani Riccardo 1.90%;
JP Morgan 2.00%; Toqueville 1.20%;
Page 48 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
ENAV
Italy/Support Services Analyser
SUPPORT SERVICES
ENAV (Accumulate) 9m 2016 Post: slowing growth
Good Q3 results confirming business resiliency
The facts: Yesterday ENAV released its Q3 & 9M 2016 results and held a CC in
the afternoon.
Our analysis: ENAV released Q3 and 9M 2016 results bang in line with our
estimates coupled with a slight improvement in profitability as shown in the
following table. We remark that balance component was EUR -11.5m in Q3
(above our estimates of EUR -10m) whilst non-regulated revenues in the quarter
was EUR 2.4m (below our projections of EUR 3.3m). Net profit came in at EUR
70.4m in 9M, improving from EUR 63m last year, benefiting also from a strong
decline in write-downs (EUR 0.5m vs. EUR 4.8m) in the period.
Traffic data 9M 15A 9M 16A Y/Y 9M 16E
Total en-route traffic (k SUs) 6,365 6,493 2.2% 6,490
Total terminal traffic (k SUs) 679 704 3.7% 704
Total traffic 7,044 7,197 2.3% 7,194
Source: ENAV; Banca Akros estimates
P&L (Eur m) Q3
15A
Q3
16A Y/Y
Q3
16E
9M
15A
9M
16A Y/Y
9M
16E
En-route revenues 181.8 191.0 5.0% 190.5 441.9 456.5 3.3% 456.0
Terminal revenues 54.5 59.4 9.0% 54.3 138.4 151.0 9.1% 145.9
Characteristic revenues 236.3 250.3 6.0% 244.8 580.3 607.4 4.7% 601.9
Balance 2.0 -11.4 nm -10 11.1 10.1 -9.3% 11.5
Non regulated revenues 1.8 2.4 31.3% 3.3 6.3 9.0 41.6% 9.9
Other revenues 9.8 11.8 20.9% 17.3 44.2 35.6 19.5% 41.1
Total revenues 249.8 253.2 1.3% 255.4 642.0 662.1 3.1% 664.3
EBITDA 104.6 104.6 0.0% 102.9 195.3 208.0 6.5% 206.3
EBITDA margin 41.9% 41.3%
40.3% 30.4% 31.4%
31.1%
D&A -34.0 -31.8 -6.6% -31.6 -106.5 -100.6 -5.5% -100.4
EBIT 70.6 72.8 3.2% 71.3 88.8 107.5 21.0% 105.9
EBIT margin 28.3% 28.8% 27.9% 13.8% 16.2% 15.9%
Source: ENAV; Banca Akros estimates
Q3 confirmed ENAV’s strong cash flow generation in the period (EUR 173m gross
operating cash flow), together with low Capex (EUR 63m) led Net Debt to EUR
148m in Sep-16 (vs. EUR 236m in June).
The management guided for a further traffic growth in Q4 thus leading to a c. 2%
traffic increase in FY 16E coupled with profitability enhancement on the back of
cost control measures. We also highlight that: i) write downs should slightly
increase in Q4 but will close 2016 below 2015 level (EUR 1m vs. EUR 5m); ii)
Capex should increase Q4 thus being in line with our estimates of EUR 126m
total Capex in FY 16.
Conclusion & Action: Results in line with our expectations confirming the
business resiliency and a stable P&L dynamic. We reiterate our positive
recommendation on the stock, reminding the low exposure to Italy (c. 25% of
traffic) and the 5.3% recurring dividend yield, not mentioning a potential sound
extra dividend if ENAV would decide to re-leverage (Net Debt / EBITDA 2016E
0.8x). However, the stock would still under pressure if current concerns on
possible interest rate increase will go on, thus replying on equity the fixed income
price pressure (ENAV’s bond YTM run to 0.7% yield from 0.3% 1w ago).
Analyst(s):
Enrico Filippi, CEFA, Banca Akros
+39 02 4344 4071
Francesco Sala Banca Akros
+39 02 4344 4240
Accumulate
3.16
closing price as of 10/11/2016
4.15
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ENAV.MI/ENAV IM
Market capitalisation (EURm) 1,715
Current N° of shares (m) 542
Free float 47%
Daily avg. no. trad. sh. 12 mth 2,302
Daily avg. trad. vol. 12 mth (m) 8,877
Price high 12 mth (EUR) 3.80
Price low 12 mth (EUR) 3.16
Abs. perf. 1 mth -8.98%
Abs. perf. 3 mth -15.08%
Abs. perf. 12 mth
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 850 865 870
EBITDA (m) 243 259 264
EBITDA margin 28.6% 30.0% 30.3%
EBIT (m) 93 118 126
EBIT margin 11.0% 13.6% 14.5%
Net Profit (adj.)(m) 66 77 85
ROCE 4.9% 5.9% 6.6%
Net debt/(cash) (m) 188 201 191
Net Debt/Equity 0.2 0.2 0.2
Debt/EBITDA 0.8 0.8 0.7
Int. cover(EBITDA/Fin. int) (106.3) 52.9 56.1
EV/Sales 2.2 2.2
EV/EBITDA 7.4 7.2
EV/EBITDA (adj.) 7.4 7.2
EV/EBIT 16.3 15.1
P/E (adj.) 22.3 20.1
P/BV 1.5 1.5
OpFCF yield 2.3% 6.4%
Dividend yield 0.0% 5.5% 5.5%
EPS (adj.) 0.14 0.16
BVPS 2.07 2.05
DPS 0.00 0.18 0.18
3.10
3.20
3.30
3.40
3.50
3.60
3.70
3.80
3.90
giu 16 lug 16 ago 16 set 16 ott 16 nov 16
vvdsvdvsdy
ENAV FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Mef 53%;
Page 49 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Nokia
Finland/Technology Hardware & Equipment Analyser
TECHNOLOGY HARDWARE & EQUIPMENT
Nokia (Buy) Good Q3 results confirming business resiliency
Nokia’s CMD to be held in Barcelona on 15 November
The facts: Nokia will organise a Capital Markets Day in Barcelona. The event
starts at 9.00 am CET (10.00 am EET). The focus at the CMD will be on 1) the
progress of Nokia’s cost savings measures and cost savings targets, and 2) the
market outlook for 2017.
Our analysis: After the Q3 results, Nokia’s share price weighed on the
company’s cautious comments about growth in Q4 and a preliminary estimate
about the outlook for 2017. Nokia estimated that the decline in the Networks
business division in Q4 will be more or less the same as in Q3 (YoY: -12%),
which is below market expectations. The company still expects a significant
improvement in the EBIT margin excluding non-recurring items. The 2016 EBIT
guidance for the Networks business division is 7–9% excluding NRIs. Nokia
estimates that the network market will decline by a low one-digit percentage in
2017. Although the overall market outlook is modest, there are also growing
areas in the wireless network market, such as Small Cell networks. Nokia did not
comment its sales performance in connection with the market comment.
Consensus expects the total sales of the Networks business division to decline by
2% in 2017 (OP: +3%). Consensus expects the Ultra Broadband Networks
business to decline by 4% (OP: 2%) and the sales of the IP Networks and
Applications business are expected to remain at the level of 2016 forecasts (OP:
+5%). In our opinion, the growth forecasts are not challenging. We justify our view
on the basis of the launch of network projects in India and the acquisitions of
public safety networks, for example. The growth forecasts for Small Cell and DAS
technologies are also positive. Small Cell Forum predicts that the sales of the
technologies will increase from USD 1bn in 2015 to USD 6bn in 2020. The
demand for software is also expected to increase as operators initiate
virtualisation projects. On the basis of Alcatel-Lucent’s Q3 report, Nokia’s own
base station business performed better than reported while the sales of Alcatel-
Lucent’s base stations declined by 25%. We expect the performance to stabilise
in 2017.
Another interesting question is the company’s cost savings programme. We
expect Nokia to revise its cost savings programme with regard to the fixed
network products (IP Networks and Applications and the Fixed Access Networks
business that is part of the Ultra Broadband Networks business). The profitability
of Nokia’s fixed network business is clearly below the peer group average, and in
our opinion, there is potential for improving efficiency. Consensus expects Nokia’s
EBIT margin in 2016 to be 8.2% and for 2017, the expected margin is 9.7%. (OP:
8.7% and 12%).
Conclusion & Action: We do not expect any major revisions for the Techologies
business division as Nokia is negotiating the renewal of a licensing agreement
with Apple, for example. While the negotiations are ongoing, Nokia cannot issue
sales guidance since the outcome of the negotiations is probably not yet known
next week.
The Capital Markets Day is a good opportunity to revise the company’s outlook
for the near future. In our opinion, concerns about a general decline in
investments in the mobile phone market cast an unnecessarily dark shadow over
Nokia.
Analyst(s):
Hannu Rauhala, OP Corporate Bank
+358 10 252 4392
Buy
4.09
closing price as of 10/11/2016
6.30
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg NOKIA.HE/NOKIA FH
Market capitalisation (EURm) 23,108
Current N° of shares (m) 5,650
Free float 100%
Daily avg. no. trad. sh. 12 mth 20,665
Daily avg. trad. vol. 12 mth (m) 133,477
Price high 12 mth (EUR) 7.07
Price low 12 mth (EUR) 3.86
Abs. perf. 1 mth -17.57%
Abs. perf. 3 mth -19.33%
Abs. perf. 12 mth -39.50%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 26,609 24,008 25,673
EBITDA (m) 3,221 1,061 3,331
EBITDA margin 12.1% 4.4% 13.0%
EBIT (m) 2,829 (985) 2,671
EBIT margin 10.6% nm 10.4%
Net Profit (adj.)(m) 2,329 (2,001) 1,654
ROCE 158.8% -4.6% 12.3%
Net debt/(cash) (m) (7,770) (7,647) (8,613)
Net Debt/Equity -0.7 -0.3 -0.4
Debt/EBITDA -2.4 -7.2 -2.6
Int. cover(EBITDA/Fin. int) 18.6 4.2 10.7
EV/Sales 1.0 0.3 0.2
EV/EBITDA 8.0 6.0 1.6
EV/EBITDA (adj.) 8.0 6.0 1.6
EV/EBIT 9.1 nm 2.0
P/E (adj.) 16.3 nm 14.3
P/BV 3.6 1.1 1.0
OpFCF yield 5.1% -1.6% 3.4%
Dividend yield 6.4% 4.9% 4.9%
EPS (adj.) 0.40 (0.35) 0.29
BVPS 1.81 3.81 4.03
DPS 0.26 0.20 0.20
3.5
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
NOKIA Stoxx Telecom Equipment (Rebased)Source: Factset
Shareholders: Keskinäinen työeläkevakuutusyhtiö
Varma 2.00%; Keskinäinen
Eläkevakuutusyhtiö Ilmarinen 0.70%;
Valtion Eläkerahasto 0.60%;
Page 50 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Spanish Telecommunications
Analyser
TELECOMMUNICATIONS
Nokia’s CMD to be held in Barcelona on 15 November
SPAIN: More regulation “to boost” FttH deployments
The facts: The CNMC approved the revision (5th) on TEF’s wholesale and
ducts offer.
Our analysis: The intention is to facilitate the deployment of FTTH on behalf of
alternate operators (ORA, VOD, MM, EKT, Telecable and VMOs), via a
wholesale offer by the incumbent (TEF) with access to infrastructures via the
MARCo regulation (2009).
To do so, the restrictions on the use of textile mesh and microducts to simplify
some procedures and obtain savings in costs and operating improvements.
In addition it would simplify the deployment in homes, reducing the supply
times from current 35 days to 10 days to access ducts. TEF will not have to
participate in the setting-out of installations
One of the most relevant points in the revision is Access to TEF’s posts that
could be considered bottle necks in rural areas for the deployment of NGA
networks due to the complex operative and high costs. The CNMC proposed
various improvements including a mechanism to share opex. In this manner,
the MRO executing the initial investment could partially recover some via the
co-habitation with other MROs in the infrastructure.
Conclusion: NGA network deployment costs in Spain are the lowest in
Europe: c. EUR150-200m per home passed thanks to the high verticality
in our country (according to Jazztel, 30% of the constructions vs. 16% in
France vs. 6% in Germany). This range is similar to Portugal which contrasts
with the EUR1k costs in Germany and EUR1.5k in UK. In addition is that the
majority of the cases, the verticals are fastened to the façade (70-80%) and not
in internally.
This favourable context encourages investments and migration from
xDSL to FTTH. The latter is the most employed technology in the new
deployments due to the lower costs and homogenisation of standards.
Small Green shoots can be seen in regulation. As expected the regulator
will have to be more lax from now on if Spain is to comply with the European
Digital Agenda. Not only encouraging other MROs and VMOs but also TEF to
increase investments.
---------- Stoxx Telecommunications,
DJ Stoxx TMI rebased on sector
Analyst(s):
Victor Peiro Pérez, GVC Gaesco Beka
+34 91 436 7812
Eduardo Garcia Arguelles, GVC Gaesco Beka
+34 914 367 810
280
290
300
310
320
330
340
350
360
370
380
390
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 51 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Acotel
Italy/Telecommunications Analyser
TELECOMMUNICATIONS
Acotel (Reduce) SPAIN: More regulation “to boost” FttH deployments
9m 2016 Post: higher sales drop/lower EBITDA loss
The facts: publication of Q3 2016 results.
Our analysis: H1 release was affected by the deconsolidation of the Mobile
Virtual Network Aggregator activities, which constituted the vast majority of the
TLC division. ACO announced in mid-October the disposal of the unit to Telecom
Italia for EUR 4.5m. In Q3, the legacy business of interactive remained sharply
down Y/Y (12% below expectations), in spite of the growth in the Indian market
(which now accounts for 29% of revenues). The net division performed in line with
expectations but still accounts for below 10% of total revenue. Bucksense partially
compensated with a revenue surprise, altough it is probably a very volatile
business. The EBITDA remained in red in Q3 however less than expected, we
suspect this is due to lower commercial investments in the interactive division and
lower losses at Bucksense (revenues tripling Q/Q). Net cash declined by EUR
1.7m in Q3 (2m cash burn expected).
Acotel 9m 2016 results (EUR m)
Q3 2015a Q3 2016e Q3 2016a Y/Y 9m 2016a
Interactive 8.71 4.70 4.15 -52% 14.5
TLC 0.61 0 0 nm 0.00
NET 0.47 0.55 0.54 14.8% 1.60
Bucksense/adj 0.00 0.25 0.55 nm 0.82
Net sales 9.80 5.50 5.25 -46% 16.92
Turnover 9.83 5.60 5.27 -46% 16.98
EBITDA -1.74 -1.13 -0.59 -66% -4.17
Margin -17.7% -20.1% -11.2% 6.5% -24.5%
EBIT -2.19 -1.68 -0.92 -58% -5.06
Net income (Loss) -3.17 -1.58 -1.30 -59% -8.23
Net debt (Cash) -13.9 -5.50 -5.90 -58% -5.90
Source: Company data, BANCA AKROS estimates (adjusted for Jinny).
Outlook: ACO acknowledges the current weak economic performance and
deteriorating financial conditions. The H1 2016 results were definitely below the
company's internal targets, by 23% at the revenue level and by EUR 1.6m at the
EBITDA level. The auditors had also expressed doubts on the going concern
status of the company. No comparison is provided with 9m publication as the
company is working on a new business plan. We cut our revenues estimates; we
leave our EBITDA forecasts unchanged.
Conclusion & Action: The reco remains negative. Half of the company's current
market cap is explained by the EUR 11m pro-forma cash position, the residual
value is very tricky to be assessed, in presence of continued cash burn and slow
growth for the IoT business line. We cut our target price to EUR 3.5, assuming
the residual interactive activities can be trimmed further and sold for a few
millions while the NET division begins to be more tangible.
Analyst(s):
Andrea Devita, CFA, Banca Akros
+39 02 4344 4031
Reduce
4.06
closing price as of 10/11/2016
3.50
5.00from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ACO.MI/ACO IM
Market capitalisation (EURm) 17
Current N° of shares (m) 4
Free float 35%
Daily avg. no. trad. sh. 12 mth 5
Daily avg. trad. vol. 12 mth (m) 67
Price high 12 mth (EUR) 9.14
Price low 12 mth (EUR) 4.06
Abs. perf. 1 mth -23.40%
Abs. perf. 3 mth -32.56%
Abs. perf. 12 mth -55.97%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 37 23 23
EBITDA (m) (9) (6) (2)
EBITDA margin nm nm nm
EBIT (m) (11) (8) (4)
EBIT margin nm nm nm
Net Profit (adj.)(m) (5) (4) (2)
ROCE -141.8% -686.7% -85.4%
Net debt/(cash) (m) (12) (6) (1)
Net Debt/Equity -0.8 -1.0 -0.4
Debt/EBITDA 1.3 1.0 0.4
Int. cover(EBITDA/Fin. int) 14.3 8.3 3.4
EV/Sales 0.7 0.5 0.7
EV/EBITDA nm nm nm
EV/EBITDA (adj.) nm nm nm
EV/EBIT nm nm nm
P/E (adj.) nm nm nm
P/BV 2.3 2.9 5.9
OpFCF yield -43.8% -48.6% -38.8%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) (1.25) (0.88) (0.44)
BVPS 3.67 1.40 0.69
DPS 0.00 0.00 0.00
4
5
6
7
8
9
10
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vvdsvdvsdy
ACOTEL FTSE Italy STAR (Rebased)Source: Factset
Shareholders: Clama 41%; Claudio Carnevale 17%;
Ellepif Ltd 0.00%;
Page 52 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
OTE Hellenic Telecom
Greece/Telecommunications Analyser
TELECOMMUNICATIONS
OTE Hellenic Telecom (Buy) 9m 2016 Post: higher sales drop/lower EBITDA loss
Forecast-beating 3Q16 results thanks to Greek and Romanian fixed units
The facts: OTE reported forecast-beating 3Q16 results reflecting the solid
performance of the Greek-fixed business and the improvement of the operating
profitability in Romtelecom (after 8 consecutive quarters of decline). Specifically,
revenues came in at EUR 998m (+2.7% y-o-y, 2% above consensus), pro-forma
EBITDA shaped at EUR 357m (+2.0% y-o-y, 4% above consensus), while ‘clean’
net profits came in at EUR 74.6m (+11% y-o-y, 10% above our estimates).
Our Analysis: Adjusted free cash flow shaped at EUR 26m in 3Q16 compared to
EUR 93m in the same period of 2015, driving 9M16 adj FCF to EUR 175m versus
EUR 252m in 9M15, down by 31%. The reduction of group’s adj FCF in 9M16 is
attributed to the EUR 23m decrease in adj OpCF and the EUR 54m increase in
adj. capex. On a reported basis, free cash flow stood at EUR 113m in 9M16
compared to EUR 71m in 9M15, while in 3Q16 OTE’s FCF was negative (minus
EUR 8m) compared to EUR 1m in 3Q15, reflecting VES-related payments,
increased working capital needs and higher capex. The company has trimmed its
guidance on FY16 adjusted FCF to EUR 440m (vs. EUR 500m previously) due to
higher capex (EUR 600m versus an initial target for EUR 550m). In the
conference call, management highlighted that the proposed Vectoring regulation
introduces discriminations against OTE, while the acceleration of capex this year
relates to the development of fixed- line networks in Greece and Romania.
Finally, retail service revenues in OTE-fixed grew for the 5th straight quarter and
at the fastest pace (+4.2% y-o-y) due to a 10% increase in broadband revenues
and a 33% increase in pay-TV revenues that offset a 1.4% y-o-y decrease in
voice revenues (or nearly a EUR 2m drop).
OTE 9M16 results
EUR m 9M15a 9M16e IBG 9M16 % YoY
Sales 2,865.6 2,863.3 2,881.1 0.5%
Clean EBITDA* 994.5 960.4 977.2 -1.7%
margin 34.7% 33.5% 33.9%
Net earnings 115.1 109.8 123.4 7.2%
Net earnings adj** 168.0 141.9 149.6 -11.0%
Source: The Company, IBG, * Excluding VRS costs, ** Excluding VRS costs and other one-offs
Conclusion & Action: Overall, OTE’s good performance in 3Q16 should be
attributed to the solid performance of OTE-fixed and the first positive quarter for
Romtelecom both in terms of revenues and EBITDA. On the flip side, mobile
EBITDA remained under pressure for a 7th straight quarter reflecting a soft top
line and increased opex. In addition, FCF was worse than we had expected,
driving to a downward revision to management’s guidance for 2016 on higher
capex needs. We increase FY16e pro-forma EBITDA to EUR 1,310m (plus EUR
22m or 2% upward revision) and adj. net profits to EUR 214m (plus EUR 22m,
11% upward revision). For the period 2017-2020 we slightly increase our EBITDA
estimates to reflect our more positive stance on Telekom Romania and proceed
to a material upward revision to our net profits estimates due to the use of a lower
effective tax rate. We now forecast net profits of EUR 242m (+13% y-o-y) for
FY17 and EUR 293m (+21% y-o-y). Accordingly, we raise our target price on the
stock to EUR 10.80/share, re-affirming our ‘Buy’ rating on valuation grounds (35%
upside potential for current price levels). On our revised estimates, OTE trades on
a 3.7x 2017e EV/EBITDA ratio versus 5.7x for European telcos.
Analyst(s):
Dimitris Birbos, Investment Bank of Greece
+30 210 81 73 392
Buy
8.06
closing price as of 10/11/2016
10.80
10.60from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg OTEr.AT/HTO GA
Market capitalisation (EURm) 3,951
Current N° of shares (m) 490
Free float 50%
Daily avg. no. trad. sh. 12 mth 637
Daily avg. trad. vol. 12 mth (m) 13,846
Price high 12 mth (EUR) 9.58
Price low 12 mth (EUR) 6.75
Abs. perf. 1 mth 1.26%
Abs. perf. 3 mth -7.36%
Abs. perf. 12 mth -10.44%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 3,903 3,910 3,899
EBITDA (m) 1,221 1,264 1,283
EBITDA margin 31.3% 32.3% 32.9%
EBIT (m) 391 441 465
EBIT margin 10.0% 11.3% 11.9%
Net Profit (adj.)(m) 240 214 242
ROCE 9.3% 9.8% 10.4%
Net debt/(cash) (m) 860 625 302
Net Debt/Equity 0.3 0.2 0.1
Debt/EBITDA 0.7 0.5 0.2
Int. cover(EBITDA/Fin. int) 7.9 8.6 10.6
EV/Sales 1.5 1.3 1.2
EV/EBITDA 4.8 4.0 3.7
EV/EBITDA (adj.) 4.6 3.9 3.7
EV/EBIT 15.0 11.4 10.1
P/E (adj.) 18.8 18.4 16.3
P/BV 2.0 1.7 1.6
OpFCF yield 6.3% 10.6% 13.0%
Dividend yield 1.2% 1.6% 1.9%
EPS (adj.) 0.49 0.44 0.49
BVPS 4.60 4.81 5.11
DPS 0.10 0.13 0.16
6.5
7.0
7.5
8.0
8.5
9.0
9.5
10.0
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
OTE Stoxx Telecommunications (Rebased)Source: Factset
Shareholders: Deutsche Telecom 40%; Greek State
10%;
Page 53 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Autogrill
Italy/Travel & Leisure Analyser
TRAVEL & LEISURE
Autogrill (Buy) Forecast-beating 3Q16 results thanks to Greek and Romanian fixed units
Sound results as expected – 2016 guidance confirmed
The facts: Autogrill published its third quarter results yesterday before market
closing. The company held a conference call in the afternoon
Our analysis: the company’s results were good and almost in line with our
estimates at the operating level. The net profit was better than expected after a
much lower tax rate.
Q3 15 Q3 16 y/y % Q3 16e 9M 15 9M 16 y/y %
Total sales 1,206.5 1,241.4 2.9% 1,212.8 3,173.1 3,281.5 3.4%
Other income 33.3 34.1
33.5 92.4 87.5
Total revenues 1,239.8 1,275.5 2.9% 1,246.3 3,265.5 3,369.0 3.2%
EBITDA 166.0 166.5 0.3% 169.0 290.1 320.2 10.4%
margin 13.4% 13.1%
13.6% 8.9% 9.5%
EBIT 113.7 118.9 4.6% 120.7 135.3 179.3 32.5%
margin 9.2% 9.3%
9.7% 4.1% 5.3%
PBT 99.3 113.5 14.3% 111.7 102.4 158.5 54.8%
Net profit 77.1 87.4
72.6 66.3 110.1
o/w minorities 5.3 6.6
5.9 10.1 12.7
The company confirmed its 2016 guidance: 2016 Revenues seen at EUR 4,465-
4,565m; 2016 EBITDA seen at EUR 411-426m.
Conclusion & Action: the company’s results were sound and the guidance was
confirmed. We confirm our recommendation on the stock on the back of its
exposure to the US market and the ability to grow organically.
Analyst(s):
Francesco Sala, Banca Akros
+39 02 4344 4240
Buy
7.12
closing price as of 10/11/2016
9.60
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg AGL.MI/AGL IM
Market capitalisation (EURm) 1,810
Current N° of shares (m) 254
Free float 50%
Daily avg. no. trad. sh. 12 mth 755
Daily avg. trad. vol. 12 mth (m) 4,994
Price high 12 mth (EUR) 8.93
Price low 12 mth (EUR) 6.22
Abs. perf. 1 mth -3.92%
Abs. perf. 3 mth -8.72%
Abs. perf. 12 mth -18.50%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 4,494 4,631 4,764
EBITDA (m) 376 421 431
EBITDA margin 8.4% 9.1% 9.0%
EBIT (m) 152 208 212
EBIT margin 3.4% 4.5% 4.4%
Net Profit (adj.)(m) 64 88 90
ROCE 8.0% 10.8% 11.0%
Net debt/(cash) (m) 649 589 526
Net Debt/Equity 1.1 0.8 0.7
Debt/EBITDA 1.7 1.4 1.2
Int. cover(EBITDA/Fin. int) 9.9 11.3 11.8
EV/Sales 0.7 0.5 0.5
EV/EBITDA 8.0 6.0 5.6
EV/EBITDA (adj.) 8.0 6.0 5.6
EV/EBIT 19.9 12.2 11.3
P/E (adj.) 35.0 20.6 20.1
P/BV 4.0 2.8 2.6
OpFCF yield 6.3% 5.0% 5.5%
Dividend yield 1.7% 2.0% 2.2%
EPS (adj.) 0.25 0.34 0.35
BVPS 2.20 2.54 2.78
DPS 0.12 0.14 0.16
6.0
6.5
7.0
7.5
8.0
8.5
9.0
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AUTOGRILL Stoxx Travel & Leisure (Rebased)Source: Factset
Shareholders: Edizione Holding 50%;
Page 54 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
A2A
Italy/Utilities Analyser
UTILITIES
A2A (Buy) Sound results as expected – 2016 guidance confirmed
Increasing results in 9M16 YoY (with one-offs)
The facts: A2A released its 9M 2016 results yesterday.
Our analysis: A2A posted increasing results YoY:
EURm 9M 15A 9M 16E 9M 16A Chg.
Sales 3,632 3,369 3,482 -4.1%
EBITDA 814 859 872 7.1%
Energy 369 358 373 1.1%
Networks & Heat 253 296 293 15.8%
Waste 161 170 174 8.1%
EPCG 43 47 48 11.6%
Other services & Corporate -12 -12 -16 33.3%
EBIT 454 508 524 15.4%
Pre-tax profit 346 472 484 39.9%
Net profit 237 314 323 36.3%
It is worth noting that A2A recorded positive non-recurring topics for EUR 84m at
an EBITDA level in H1 16, mainly related to the water sector/networks (recovery
of adjustment items related to the period 2007-2011 for about EUR 50m). Net of
this impact, EBITDA was slightly down YoY. In fact, on the negative side, it is
worth mentioning lower: price (PUN nearly -27% YoY) and electricity demand
(roughly -3% YoY); on the positive, the consolidation of LGH since August 2016
(impact EUR 7m). Furthermore, we remind readers that A2A posted EUR 52m of
positive one-off, below the EBITDA, in Q1 16 related to the different value
between the book value and the implied value recognised in the Edipower deal.
Energy division was hit by lower demand and lower prices. It is also worth
mentioning that the spin-off of Edipower hydro assets in favour of SEL is due to
impact for roughly EUR 15m of lower EBITDA (EUR 20m on a yearly basis). The
retail segment posted increasing figures (EUR 100m vs. EUR 78m in 9M 15)
mainly related to the regulatory reform impact (EUR 20m in terms of EBITDA on a
yearly basis, we expect EUR 13m in 9M 16). It is worth noting that A2A posted
nearly EUR 20m of positive one-offs in this area in H1 16.
Network. This division was affected by the regulatory review, which downward
modified the allowed return since January. On the positive side A2A registered a
EUR 50m one-off in the water sector mentioned above and the positive outcome
of the efficiency programme the company is carrying on. Heat. A2A posted
decreasing figures in this area YoY, mainly due to the unfavourable price
dynamic.
Waste division benefited from higher volumes collected (around +7% YoY). On
the positive side, it is worth noting that A2A posted a nearly EUR 8m positive one-
off in this area in H1 16.
Pre-tax profit and net profit are took advantage of the EUR 52m positive one-off
related to the Edipower deal, lower financial charges – i.e. EUR 96m vs. EUR
107m in 9M 15; FY cost of debt guidance points to 3.4/3.5%).
Net debt was around EUR 3.24bn vs. EUR 2.83bn posted as at the end of H1 16,
this is mainly due to LGH (EUR 375m of additional debt + EUR 52 cash-out for
the acquisition) and the Riesco-Resmal deal (impact EUR 25m).
2016 guidance. The company has increased its 2016 EBITDA guidance to EUR
1,140/1,150m from previous EUR 1,036m (including LGH contribution).
Conclusion & Action: we don’t believe 9M 16 results may be considered a
catalyst for stock performances. We argue the key issues are the M&A and the
business plan targets achievement. BUY.
Analyst(s):
Dario Michi, Banca Akros
+39 02 4344 4237
Buy
1.13
closing price as of 10/11/2016
1.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg A2.MI/A2A IM
Market capitalisation (EURm) 3,537
Current N° of shares (m) 3,133
Free float 50%
Daily avg. no. trad. sh. 12 mth 11,535
Daily avg. trad. vol. 12 mth (m) 19,217
Price high 12 mth (EUR) 1.35
Price low 12 mth (EUR) 0.96
Abs. perf. 1 mth -6.77%
Abs. perf. 3 mth -8.73%
Abs. perf. 12 mth -6.69%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 4,921 5,032 5,416
EBITDA (m) 1,048 1,057 1,137
EBITDA margin 21.3% 21.0% 21.0%
EBIT (m) 215 635 666
EBIT margin 4.4% 12.6% 12.3%
Net Profit (adj.)(m) 73 376 341
ROCE 1.9% 6.0% 6.0%
Net debt/(cash) (m) 2,897 3,156 3,023
Net Debt/Equity 0.9 0.9 0.8
Debt/EBITDA 2.8 3.0 2.7
Int. cover(EBITDA/Fin. int) 7.8 8.2 8.5
EV/Sales 1.6 1.6 1.4
EV/EBITDA 7.5 7.4 6.8
EV/EBITDA (adj.) 7.5 7.4 6.8
EV/EBIT 36.6 12.4 11.5
P/E (adj.) nm 9.4 10.4
P/BV 1.5 1.2 1.0
OpFCF yield 9.7% -2.6% 7.2%
Dividend yield 3.6% 4.5% 5.3%
EPS (adj.) 0.02 0.12 0.11
BVPS 0.84 0.91 1.17
DPS 0.04 0.05 0.06
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
1.35
1.40
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
A2A Stoxx Utilities (Rebased)Source: Factset
Shareholders: Milan City Council 25%; Brescia City
Council 25%;
Page 55 of 64
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Acea
Italy/Utilities Analyser
UTILITIES
Acea (Accumulate) Increasing results in 9M16 YoY (with one-offs)
Increasing results YoY also net of one-offs
The facts: Acea unveiled its 9M 2016 results yesterday.
Our analysis: the company posted increasing results YoY:
EURm 9M 15A 9M 16E 9M 16A Chg.
Revenues 2,168 2,058 2,047 -5.6%
EBITDA 531 645 646 21.7%
Water 225 252 257 14.2%
El. distribution 188 256 250 33.0%
Waste 40 43 42 5.0%
El. Gen. & sales 78 94 95 21.8%
Corporate 0 0 2 n.m.
EBIT 285 388 378 32.6%
Pre-tax profit 217 327 317 46.1%
Net profit 137 214 201 46.7%
We remind readers that Acea recorded a positive one-off of EUR 63.3m in the
distribution business in H1 16. The one-off is related to the regulatory delibera
AEEGSI 654/2015, which eliminated the so called “regulatory lag”. Acea
estimates the positive impact in around EUR 90m and EUR 60m in terms of
respectively EBITDA and net profit on a yearly basis. This impacted for around
EUR 77m in 9M 16. Even without considering the positive one-off, Acea recorded
a sound around 7% growth YoY in terms of EBITDA.
In the water area, Acea took advantage of the efficiency programme the
company is successfully carrying on, from the increase in tariffs (around 5%),
while volumes sold ought to slightly down YoY (-2%). It is worth noting that as
regards ATO 2 tariff increases, Acea agreed not to apply any tariff increase in
2016 (due to be spread out over time) while for the following years the agreed
increases are: +4.8% in 2017, +6.0% in 2018 and +5.9% in 2019. The NPV of this
tariff trend is almost zero (vs. an increase of 2016 tariffs and in the following years
but with a lower size and using the agreed financial cost of 2.9%). The cash effect
of the delay is around EUR 26m on 2016.
Electricity distribution’s results were affected by the regulatory review, which
lowered the allowed return. This negative was more than compensated by the
positive impact of the regulatory lag cancellation.
In the waste area, Acea benefited from an increase in volumes treated (roughly
+6.5% YoY), while the electricity sold was almost flat YoY. These positive effects
were partially offset by lower electricity prices.
Generation & sales division was hit by lower prices (PUN ca. -27% YoY) and
electricity demand (-3% YoY). These negatives were more than offset by the
increase in margins on the captive customer sales.
Net debt reached around EUR 2.14bn, almost stable in comparison with the level
posted as at the end of H1 2016.
Conclusion & Action: Acea posted resilient results, even without considering the
one-off. This paved the way for an upward revision of FY EBITDA guidance (from
+3/4% vs. 2015 without considering the one-off impact to +5/6% - including EUR
18/20m of quality premia in the water sector; net debt EUR 2.1/2.2bn) and for the
business plan target achievements. On top of these positive triggers, Acea is due
to unveil, according to company guidance, M&A deals in the coming days. We
reiterate our positive stance on Acea.
Analyst(s):
Dario Michi, Banca Akros
+39 02 4344 4237
Accumulate
10.80
closing price as of 10/11/2016
14.00
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ACE.MI/ACE IM
Market capitalisation (EURm) 2,300
Current N° of shares (m) 213
Free float 21%
Daily avg. no. trad. sh. 12 mth 106
Daily avg. trad. vol. 12 mth (m) 2,046
Price high 12 mth (EUR) 14.25
Price low 12 mth (EUR) 9.84
Abs. perf. 1 mth -0.64%
Abs. perf. 3 mth -13.11%
Abs. perf. 12 mth -19.04%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 2,917 3,037 3,106
EBITDA (m) 732 746 761
EBITDA margin 25.1% 24.6% 24.5%
EBIT (m) 386 412 404
EBIT margin 13.2% 13.6% 13.0%
Net Profit (adj.)(m) 175 203 214
ROCE 6.3% 6.7% 6.9%
Net debt/(cash) (m) 2,010 2,121 2,100
Net Debt/Equity 1.3 1.3 1.2
Debt/EBITDA 2.7 2.8 2.8
Int. cover(EBITDA/Fin. int) 8.0 9.5 9.5
EV/Sales 1.8 1.5 1.5
EV/EBITDA 7.1 6.1 6.0
EV/EBITDA (adj.) 7.1 6.1 6.0
EV/EBIT 13.4 11.1 11.3
P/E (adj.) 17.3 11.3 10.8
P/BV 2.0 1.4 1.3
OpFCF yield 3.2% -1.0% 6.1%
Dividend yield 4.6% 5.3% 5.6%
EPS (adj.) 0.82 0.95 1.00
BVPS 7.16 7.61 8.04
DPS 0.50 0.57 0.60
9.5
10.0
10.5
11.0
11.5
12.0
12.5
13.0
13.5
14.0
14.5
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
ACEA Stoxx Utilities (Rebased)Source: Factset
Shareholders: Rome Council 51%; Francesco Gaetano
Caltagirone 16%; Suez Environnement
12%;
Page 56 of 64
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Enel
Italy/Utilities Analyser
UTILITIES
Enel (Accumulate) Increasing results YoY also net of one-offs
Better than expected results in 9M 2016 YoY
The facts: Enel released its 9M 16 results yesterday.
Our analysis: Enel reported slightly declining results YoY, flat once adjusted for
one-offs (both in 2015 and 2016):
EURm 9M 15A 9M 16A YoY Chg.
Sales 55,998 51,459 -8.1%
EBITDA 12,161 12,010 -1.2%
EBITDA margin 21.7% 23.3%
Italy 5,266 5,445 3.4%
Iberia 2,978 2,970 -0.3%
LatAm 2,388 2,612 9.4%
Europe and North Africa 1,230 609 -50.5%
North and Central America 435 470 8.0%
Sub-Saharan Africa and Asia -7 7 -200.0%
Other -129 -103 -20.2%
EBIT 6,308 7,689 21.9%
EBIT margin 11.3% 14.9%
Net Profit 2,089 2,757 32.0%
It is worth noting that 9M 15 results benefited from positive one-offs related to:
3Sun deal and small asset sales in the Renewables worth c. EUR 50m; Co2 sales
in Iberia roughly EUR 180m; distribution activities in Argentina c. EUR 40m. We
also remind readers that Enel took advantage of EUR 124m one-off in H1 16. In
Q3 16 Enel recorded a positive one-off of around EUR 311 related to the gas
contract renegotiations. This mainly explains the EBITDA posted vs. our estimate
of EUR 11,682m in 9M 16.
Net debt. Enel posted ca. EUR 36.8bn of debt vs. around EUR 38.1bn as at the
end of H1 16. This is mainly due to two positive effects: forex for around EUR
700m and the NWC trend for EUR 300m (due to be reabsorbed during the year)
related to the Italian television tax collection.
Interim dividend. Enel is due to pay an interim DPS of EUR 0.09 in January
(yield about 2.5%) and the remaining part in July (we expect an additional EUR
0.09).
2016 guidance. Enel has improved its debt guidance for 2016. The new target is
around EUR 37.2bn vs. the previous guidance of EUR 38.2bn. This is mainly due
to the positive forex impact and lower capex connected with the restructuring
process in Latam. As regards the other items, we remind readers that as at the
end of H1 16, Enel upwards revised its 2016 targets included in its 2016-2019
strategic plan: a) ordinary EBITDA to around EUR 15bn from approx. EUR
14.7bn; b) net ordinary income to around EUR 3.2bn from approx. EUR 3.1bn.
Conclusion & Action: we confirm our positive stance on Enel, given that the
results confirmed the resilience of the company’s business mix in a still difficult
environment. The key catalysts for the stock are the reorganisation process in
Latam, the disposal programme and the cost cutting achievement. All these
elements are due to be detailed in the business plan presentation scheduled for
22nd
November. ACCUMULATE.
Analyst(s):
Dario Michi, Banca Akros
+39 02 4344 4237
Accumulate
3.65
closing price as of 10/11/2016
4.50
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ENEI.MI/ENEL IM
Market capitalisation (EURm) 37,033
Current N° of shares (m) 10,157
Free float 72%
Daily avg. no. trad. sh. 12 mth 37,361
Daily avg. trad. vol. 12 mth (m) 309,772
Price high 12 mth (EUR) 4.21
Price low 12 mth (EUR) 3.40
Abs. perf. 1 mth -4.80%
Abs. perf. 3 mth -10.06%
Abs. perf. 12 mth -12.10%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 75,658 75,865 74,906
EBITDA (m) 15,297 15,048 15,394
EBITDA margin 20.2% 19.8% 20.6%
EBIT (m) 7,685 9,468 9,865
EBIT margin 10.2% 12.5% 13.2%
Net Profit (adj.)(m) 2,196 3,127 3,386
ROCE 4.6% 5.6% 5.8%
Net debt/(cash) (m) 37,545 39,083 40,867
Net Debt/Equity 0.7 0.7 0.7
Debt/EBITDA 2.5 2.6 2.7
Int. cover(EBITDA/Fin. int) 6.2 6.0 5.8
EV/Sales 1.0 1.0 1.0
EV/EBITDA 4.8 4.9 4.9
EV/EBITDA (adj.) 4.8 4.9 4.9
EV/EBIT 9.6 7.8 7.6
P/E (adj.) 16.7 11.8 10.9
P/BV 1.1 1.0 1.0
OpFCF yield 3.2% 1.8% 3.0%
Dividend yield 4.4% 4.9% 5.5%
EPS (adj.) 0.23 0.31 0.33
BVPS 3.44 3.50 3.83
DPS 0.16 0.18 0.20
3.30
3.40
3.50
3.60
3.70
3.80
3.90
4.00
4.10
4.20
4.30
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
ENEL Stoxx Utilities (Rebased)Source: Factset
Shareholders: Italian governement - Ministry of
Economy and Finance 26%; People's
Bank of China 2%;
Page 57 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
Falck Renewables
Italy/Utilities Analyser
UTILITIES
Falck Renewables (Buy) Better than expected results in 9M 2016 YoY
Results were a tad better than expected in 9M 16 YoY
The facts: Falck Renewables unveiled its 9M 2016 results yesterday.
Our analysis: the company posted decreasing results YoY, in line with the
company guidance for the FY (EBITDA at about EUR 130m in 2016, it was EUR
152m in 2015), slightly up vs. our estimates:
EURm 9M 2015A 9M 2016E 9M 16A YoY Chg.
Revenues 200 173 180 -10.0%
EBITDA 110 93 96 -12.7%
Ebitda mg 55.1% 53.8% 53.3%
EBIT 51 41 44 -13.7%
PBT 19 13 17 -10.5%
Falck Renewables’ results were hit by the drop in prices (in Italy the PUN was
down by around 27% YoY in 9M 2016), in the electricity demand (in Italy roughly
3% YoY) and by the different value set for the green certificates. The negative
trend in prices also affected the UK assets: prices around -11% YoY and the LEC
incentive cancellation (since August 2015).
Wind production was almost flat YoY (circa 1,150GWh), factoring in a very limited
contribution of the newly entered in operation plants of Kingsburn and
Spaldington (Assel Valley wind farm entered in operation in October). The
positive trend in Italy (we expect wind production +20% YoY vs. around +13%
YoY at a national level in 9M 16) was offset by the UK one (-17% YoY). Total
production was around 1,356GWh in 9M 16 vs. 1,337 in 9M 15.
Furthermore, still on the negative side, it is worth mentioning the GBP devaluation
vs. the EURO. This ought to affect EBITDA for around EUR 3.5m in 9M 16, i.e.
revenues (EUR -5m) and costs (EUR +1.5m).
Net debt was roughly EUR 592m, flat vs. the level posted as at the end of H1 16.
Here the GBP devaluation is acting positively (we estimate an impact of around
EUR 35m vs. the level posted as at the end of 2015, i.e. EUR 630m).
2016 guidance. Falck Renewables has confirmed its FY guidance, which points
to an EBITDA of about EUR 130m (+2%/-3% range).
Conclusion & Action: we don’t believe 9M 2016 results may be considered a
catalyst for the stock, even though they confirmed the weak short-term
environment (2016 figures are due to be hit by the change in the green
certificates value calculation and by the lack of LECs). In our view, the trigger
remains the business plan presentation (due on 29th
November 2016), with a
focus on the new operational initiatives, and on the potential deal with CII. We
reiterate our positive stance on the stock: BUY.
Analyst(s):
Dario Michi, Banca Akros
+39 02 4344 4237
Buy
0.73
closing price as of 10/11/2016
1.40
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg AA4.MI/FKR IM
Market capitalisation (EURm) 213
Current N° of shares (m) 291
Free float 40%
Daily avg. no. trad. sh. 12 mth 354
Daily avg. trad. vol. 12 mth (m) 507
Price high 12 mth (EUR) 1.13
Price low 12 mth (EUR) 0.65
Abs. perf. 1 mth -7.18%
Abs. perf. 3 mth -6.53%
Abs. perf. 12 mth -33.21%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 277 258 282
EBITDA (m) 152 125 145
EBITDA margin 55.0% 48.5% 51.5%
EBIT (m) 66 56 72
EBIT margin 23.9% 21.8% 25.7%
Net Profit (adj.)(m) 5 0 9
ROCE 4.4% 2.5% 3.3%
Net debt/(cash) (m) 630 651 626
Net Debt/Equity 1.2 1.3 1.2
Debt/EBITDA 4.1 5.2 4.3
Int. cover(EBITDA/Fin. int) 3.4 2.8 3.2
EV/Sales 3.6 3.6 3.1
EV/EBITDA 6.6 7.3 6.0
EV/EBITDA (adj.) 6.6 7.3 6.0
EV/EBIT 15.2 16.3 12.1
P/E (adj.) nm nm 22.2
P/BV 0.7 0.5 0.5
OpFCF yield 13.7% -4.1% 18.2%
Dividend yield 6.2% 4.8% 4.8%
EPS (adj.) 0.02 0.00 0.03
BVPS 1.62 1.58 1.58
DPS 0.05 0.04 0.04
0.65
0.70
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
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
FALCK RENEWABLES Stoxx Europe 600 (Rebased)Source: Factset
Shareholders: Falck SpA 60%;
Page 58 of 64
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Iren
Italy/Utilities Analyser
UTILITIES
Iren (Buy) Results were a tad better than expected in 9M 16 YoY
Increasing results in 9M 2016 YoY
The facts: Iren released its 9M 16 results yesterday.
Our analysis: the company posted increasing results YoY:
EURm 9M 15A 9M 16E 9M 16A Chg.
Sales 2,219 2,031 2,228 0.4%
EBITDA 498 558 559 12.2%
Generation & Heat 120 139 140 16.7%
Networks 109 110 106 -2.8%
Water 125 116 113 -9.6%
Market 66 97 97 47.0%
Waste 57 90 96 68.4%
Other services 21 6 7 -66.7%
EBIT 253 285 285 12.6%
Pre-tax Profit 185 215 219 18.4%
Net Profit 99 122 125 26.3%
Generation & heat management division benefited from higher margins on the
thermoelectric and co-generative production, as well as from higher volumes
produced (around +3% in 9M 16 YoY). On the negative side it is worth mentioning
the lower electricity price (PUN around -27% YoY), demand (nearly -3.1% YoY)
and lower volumes on the hydroelectric production (around -14% in 9M 16 YoY).
In the network division, Iren posted almost flat results, mainly due to the
regulatory review, which lowered the allowed returns. This was offset by the
efficiency programme the company is successfully carrying on.
Water results were affected by the reduction in the allowed return. This was
partially offset by the increase in tariffs (around +4%). Volumes should were up
YoY mainly thanks to the SAP volumes.
In the market division, Iren took advantage of the commercial efforts aimed at
increasing the customer base.
Waste division benefited from the consolidation of TRM (we estimate a positive
contribution of around EUR 38m in terms of EBITDA i.e. EUR 50/55m per annum
– TRM posted nearly EUR 50m of EBITDA in 2015).
We remind readers that pre-tax profit benefited from a positive one-off of EUR
12.6m related to an adjustment of the value of the equity investment in TRM in H1
16 and this explains the increase posted in 9M 16.Cost of debt was around 3.4%.
Net Debt was around EUR 2.53bn, almost flat vs. H1 16.
2016 outlook. Iren has slightly improved its FY guidance, which points to an
EBITDA of ca. EUR 760m (vs. EUR 750m), a net profit of about EUR 150m and a
debt/EBITDA ratio of 3.4x/3.5x (vs. <3.5x). DPS EUR 0.06 with a pay-out of about
50%.
Conclusion & Action: we confirm our positive stance on the stock. In fact, we
believe 2016 results will prove the management quality and the success of the
actions taken and included in the recently unveiled business plan. We reiterate
our BUY recommendation on the stock.
Analyst(s):
Dario Michi, Banca Akros
+39 02 4344 4237
Buy
1.43
closing price as of 10/11/2016
1.80
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg IREE.MI/IRE IM
Market capitalisation (EURm) 1,693
Current N° of shares (m) 1,182
Free float 32%
Daily avg. no. trad. sh. 12 mth 1,816
Daily avg. trad. vol. 12 mth (m) 7,049
Price high 12 mth (EUR) 1.67
Price low 12 mth (EUR) 1.27
Abs. perf. 1 mth -1.78%
Abs. perf. 3 mth -3.50%
Abs. perf. 12 mth -0.97%
Key financials (EUR) 12/15 12/16e 12/17e
Sales (m) 3,094 4,287 3,454
EBITDA (m) 678 767 775
EBITDA margin 21.9% 17.9% 22.4%
EBIT (m) 347 369 373
EBIT margin 11.2% 8.6% 10.8%
Net Profit (adj.)(m) 118 156 160
ROCE 4.4% 5.3% 5.5%
Net debt/(cash) (m) 2,169 2,529 2,544
Net Debt/Equity 1.1 1.2 1.1
Debt/EBITDA 3.2 3.3 3.3
Int. cover(EBITDA/Fin. int) 7.1 9.1 8.5
EV/Sales 1.4 1.2 1.5
EV/EBITDA 6.5 6.9 6.8
EV/EBITDA (adj.) 6.5 6.9 6.8
EV/EBIT 12.7 14.3 14.2
P/E (adj.) 14.9 10.8 10.6
P/BV 16.4 4.7 6.3
OpFCF yield 8.7% 11.7% 12.2%
Dividend yield 3.8% 3.8% 4.2%
EPS (adj.) 0.10 0.13 0.14
BVPS 0.09 0.31 0.23
DPS 0.06 0.06 0.06
1.20
1.25
1.30
1.35
1.40
1.45
1.50
1.55
1.60
1.65
1.70
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
IREN Stoxx Utilities (Rebased)Source: Factset
Shareholders: Finanziaria Sviluppo Utilities (FSU) 33%;
Reggio Emilia Council 8%; Parma
Council 6%;
Page 59 of 64
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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
Dassault Aviation CIC Bper BAK Tikkurila OPG Ebro Foods GVC
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
M tu EQB Credem BAK Euromicron Ag EQB Heineken NIBC
Ohb Se EQB Credit Agrico le Sa CIC Kontron EQB Hkscan OPG
Safran CIC Creval BAK Legrand CIC La Doria BAK
Thales CIC Deutsche Bank EQB Neways Electronics NIBC Lanson-Bcc CIC
Zodiac Aerospace CIC Deutsche Pfandbriefbank EQB Nexans CIC Laurent Perrier CIC
A irlines M em(*) Eurobank IBG Pkc Group OPG Ldc CIC
Air France Klm CIC Ing Group NIBC Rexel CIC Naturex CIC
Finnair OPG Intesa Sanpaolo BAK Schneider Electric Se CIC Olvi OPG
Lufthansa EQB M ediobanca BAK Vaisala OPG Parmalat BAK
A uto mo biles & P arts M em(*) M erkur Bank EQB Viscom EQB Pernod Ricard CIC
Bittium Corporation OPG National Bank Of Greece IBG F inancial Services M em(*) Raisio OPG
Bmw EQB Natixis CIC Anima BAK Refresco Group NIBC
Brembo BAK Nordea OPG Athex Group IBG Remy Cointreau CIC
Continental EQB Piraeus Bank IBG Azimut BAK Vidrala GVC
Daimler Ag EQB Poste Italiane BAK Banca Generali BAK Vilmorin CIC
Elringklinger EQB Societe Generale CIC Banca Ifis BAK Viscofan GVC
Faurecia CIC Ubi Banca BAK Banca Sistema BAK Vranken Pommery M onopole CIC
Ferrari BAK Unicredit BAK Bb Biotech EQB Wessanen NIBC
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
Aareal Bank EQB Stora Enso OPG Grenke EQB Aalberts NIBC
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
Page 62 of 64
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List of ESN Analysts (**)
Ari Agopyan CIC +33 1 53 48 80 63 [email protected] Victoria Kruchevska (CFA,FRM) EQB +49 69 5 89 97 416 [email protected]
Artur Amaro CBI +351 213 89 6822 [email protected] Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 [email protected]
Helena Barbosa CBI +351 21 389 6831 [email protected] Konstantinos Manolopoulos IBG +30 210 817 3388 [email protected]
Javier Bernat GVC +34 91 436 7816 jav [email protected] Dario Michi BAK +39 02 4344 4237 [email protected]
Dimitris Birbos IBG +30 210 81 73 392 [email protected] Marietta Miemietz CFA EQB +49-69-58997-439 [email protected]
Agnès Blazy CIC +33 1 53 48 80 67 [email protected] José Mota Freitas, CFA CBI +351 22 607 09 31 [email protected]
Charles Edouard Boissy CIC +33 01 53 48 80 81 [email protected] Henri Parkkinen OPG +358 10 252 4409 [email protected]
Rafael Bonardell GVC +34 91 436 78 171 [email protected] Victor Peiro Pérez GVC +34 91 436 7812 [email protected]
Louise Boyer CIC +33 1 53 48 80 68 [email protected] Francis Prêtre CIC +33 4 78 92 02 30 [email protected]
Giada Cabrino, CIIA BAK +39 02 4344 4092 [email protected] Francesco Previtera BAK +39 02 4344 4033 francesco.prev [email protected]
Arnaud Cadart CIC +33 1 53 48 80 86 [email protected] Jari Raisanen OPG +358 10 252 4504 [email protected]
Niclas Catani OPG +358 10 252 8780 [email protected] Hannu Rauhala OPG +358 10 252 4392 [email protected]
Pierre Chedeville CIC +33 1 53 48 80 97 [email protected] Matias Rautionmaa OPG +358 10 252 4408 [email protected]
Emmanuel Chevalier CIC +33 1 53 48 80 72 [email protected] Eric Ravary CIC +33 1 53 48 80 71 [email protected]
David Consalvo CIC +33 1 53 48 80 64 [email protected] Iñigo Recio Pascual GVC +34 91 436 7814 [email protected]
Edwin de Jong NIBC +312 0 5508569 [email protected] Gerard Rijk NIBC + 31 (0)20 550 8572 [email protected]
Martijn den Drijver NIBC +312 0 5508636 [email protected] André Rodrigues CBI +351 21 389 68 39 [email protected]
Christian Devismes CIC +33 1 53 48 80 85 [email protected] Jean-Luc Romain CIC +33 1 53 48 80 66 [email protected]
Andrea Devita, CFA BAK +39 02 4344 4031 [email protected] Jochen Rothenbacher, CEFA EQB +49 69 58997 415 [email protected]
Sebastian Droste EQB +49 69 58 99 74 34 [email protected] Vassilis Roumantzis IBG +30 2108173394 [email protected]
Enrico Esposti, CIIA BAK +39 02 4344 4022 [email protected] Sonia Ruiz De Garibay GVC +34 91 436 7841 [email protected]
Rafael Fernández de Heredia GVC +34 91 436 78 08 [email protected] Antti Saari OPG +358 10 252 4359 [email protected]
Enrico Filippi, CEFA BAK +39 02 4344 4071 [email protected] Paola Saglietti BAK +39 02 4344 4287 [email protected]
Gabriele Gambarova BAK +39 02 43 444 289 [email protected] Francesco Sala BAK +39 02 4344 4240 [email protected]
Eduardo Garcia Arguelles GVC +34 914 367 810 [email protected] Holger Schmidt, CEFA EQB +49 69 58 99 74 32 [email protected]
Alexandre Gérard CIC +33 1 53 48 80 93 [email protected] Cengiz Sen EQB +4969 58997 435 [email protected]
Philipp Häßler, CFA EQB +49 69 58997 414 [email protected] Pekka Spolander OPG +358 10 252 4351 [email protected]
Simon Heilmann EQB +49 69 58 997 413 [email protected] Kimmo Stenvall OPG +358 10 252 4561 [email protected]
Dr. Knud Hinkel EQB + 49 69 58997 419 [email protected] Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 [email protected]
Marcell Houben NIBC +31 20 550 8649 [email protected] Luigi Tramontana BAK +39 02 4344 4239 [email protected]
Carlos Jesus CBI +351 21 389 6812 [email protected] Johan van den Hooven NIBC +312 0 5508518 [email protected]
Mark Josefson EQB +4969-58997-437 [email protected] Kévin Woringer CIC +33 1 53 48 80 69 [email protected]
(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts
Page 63 of 64
Produced & Distributed by the Members of ESN (see last page of this report)
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: 11th November 2016 9 :11am CET First date and time of dissemination: 11th November 2016 9 :13am CET
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Caixa-Banco de Investimento
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Phone: +351 21 313 73 00
Fax: +351 21 389 68 98
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Spain
Phone: +34 91 436 7813
Investment Bank of Greece
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151 25 Maroussi,
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Tel: +30 210 81 73 383
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