1. No category

European Small & Mid Caps Stock Guide
MAY 2014
Investment research
Produced and Distributed by the Members of ESN
European Small & Mid Caps Selection
European Securities Network (ESN)
ESN is a “multi-local” network of European banks and investment firms: over 100 analysts from 9 countries
analyse a total of over 650 stocks and 30 sectors.
The partners retain their independence and expertise on their respective home markets.
The joint research products are based on a single ESN recommendation system, a central proprietary Database
and a Pan European approach to sectoral coverage.
Banca Akros
Italy
SNS Securities
The Netherlands
Pohjola
Bank Degroof
Belgium
BEKA Finance
Finland
Spain
Caixa - Banco de Investimento
Investment Bank of Greece
Portugal
Greece
Equinet Bank
CM - CIC Securities
France
Germany
ESN research is also available in the ‘ESNR’ Bloomberg page
th
All prices as of 19 May 2014
1
EUROPEAN SMALL & MID CAPS SELECTION
COVERAGE
May 2014
AALBERTS
NL
16
BONDUELLE
FR
48
EUROPAC
ES
80
AAREAL BANK
DE
17
BOURBON
FR
49
EVS
BE
81
AB-BIOTICS
ES
18
BOURSORAMA
FR
50
EXACT HOLDING NV
NL
82
ACCELL GROUP
NL
19
BPI
PT
51
EXPRIVIA
IT
83
ACEA
IT
20
BREMBO
IT
52
EZENTIS
ES
84
ACOMO
NL
21
BRUNEL
NL
53
F-SECURE
FI
85
ACOTEL
IT
22
CAF
ES
54
FAES FARMA
ES
86
AEDIFICA
BE
23
CAPMAN
FI
55
FAIVELEY
FR
87
AHLSTROM
FI
24
CARBURES EUROPE SA
ES
56
FALCK RENEWABLES
IT
88
DE
25
CAVERION
FI
57
FINNAIR
FI
89
FI
26
CFE
BE
58
FOURLIS HOLDINGS
GR
90
ALMIRALL
ES
27
CITYCON
FI
59
GAMELOFT
FR
91
ALTEN
FR
28
COMDIRECT
DE
60
GAS PLUS
IT
92
ALTRAN
FR
29
CORP. FINANCIERA ALBA
ES
61
GEOX
IT
93
ALTRI
PT
30
CRAMO
FI
62
GERRESHEIMER AG
DE
94
AMPLIFON
IT
31
CREDEM
IT
63
Gimv
BE
95
ANSALDO STS
IT
32
CREVAL
IT
64
GRENKELEASING AG
DE
96
ARCADIS
NL
33
CTT
PT
65
HELLENIC EXCHANGES
GR
97
ASM INTERNATIONAL
NL
34
DANIELI
IT
66
HERA
IT
98
ASTALDI
IT
35
DATALOGIC
IT
67
HES BEHEER
NL
99
ATRIA
FI
36
DE LONGHI
IT
68
HHLA
DE
100
BARCO
BE
37
DEUTSCHE EUROSHOP
DE
69
HKSCAN
FI
101
BASWARE
FI
38
DIASORIN
IT
70
IGD
IT
102
BAYWA
DE
39
DRAEGERWERK
DE
71
IMA
IT
103
BB BIOTECH
DE
40
DRILLISCH
DE
72
IMPRESA
PT
104
BENETEAU
AIXTRON
AKTIA
FR
41
DURO FELGUERA
ES
73
IMTECH
NL
105
BENI STABILI
IT
42
EDITORIALE L'ESPRESSO
IT
74
INDESIT
IT
106
BESI
NL
43
EI TOWERS
IT
75
INTERPARFUMS
FR
107
BINCKBANK
NL
44
ELRINGKLINGER
DE
76
INTERPUMP
IT
108
BIOTEST
DE
45
ENCE
ES
77
INTERVEST OFFICES & WAREHOUSES
BE
109
BOIS SAUVAGE
BE
46
ENGINEERING
IT
78
INTRALOT
GR
110
BOLSAS Y MERCADOS ESPANOLES SA
ES
47
ESPIRITO SANTO SAUDE
PT
79
IREN
IT
111
2
EUROPEAN SMALL & MID CAPS SELECTION
COVERAGE
ITALCEMENTI
IT
112
OLVI
FI
145
SPONDA
FI
178
JENOPTIK
DE
113
ORDINA
NL
146
STALLERGÈNES
FR
179
Joyou Ag
DE
114
ORIOLA-KD
FI
147
STOCKMANN
FI
180
KBC ANCORA
BE
115
ORPEA
FR
148
SURTECO
DE
181
KENDRION
NL
116
PATRIZIA AG
DE
149
TECHNOPOLIS
FI
182
KINEPOLIS
BE
117
PFEIFFER VACUUM
DE
150
TELEGRAAF MEDIA GROEP
NL
183
KORIAN-MEDICA
FR
118
PIAGGIO
IT
151
TEN CATE
NL
184
LABORATORIOS ROVI
ES
119
PKC GROUP
FI
152
TESSENDERLO
BE
185
LASSILA & TIKANOJA
FI
120
PORTUCEL
PT
153
TF1
FR
186
LDC
FR
121
PSI
DE
154
TI MEDIA
IT
187
LEASINVEST REAL ESTATE
BE
122
RAISIO
FI
155
TIETO
FI
188
LEONI
DE
123
RALLYE
FR
156
TIKKURILA
FI
189
LISI
FR
124
RAMIRENT
FI
157
TKH GROUP
NL
190
LOTUS BAKERIES
BE
125
RCS MEDIAGROUP
IT
158
TOMTOM
NL
191
LUXEMPART
LU
126
RECORDATI
IT
159
TREVI
IT
192
M6-METROPOLE TELEVISION
FR
127
REPLY
IT
160
TUBACEX
ES
193
MAIRE TECNIMONT
IT
128
RETAIL ESTATES
BE
161
UBISOFT
FR
194
MANITOU
FR
129
RHEINMETALL
DE
162
UPONOR
FI
195
MARR
IT
130
RIB SOFTWARE
DE
163
USG PEOPLE
NL
196
MAUREL ET PROM
FR
131
ROYAL BAM GROUP
NL
164
VACON
FI
197
MELIA HOTELS INTERNATIONAL
ES
132
SAF-HOLLAND
DE
165
VAISALA
FI
198
METSÄ BOARD
FI
133
SAFILO
IT
166
VASTNED RETAIL
NL
199
MLP
DE
134
SAFT
FR
167
VICAT
FR
200
MOBISTAR
BE
135
SALINI IMPREGILO
IT
168
VIDRALA
ES
201
MOTA ENGIL
PT
136
SALZGITTER
DE
169
VILMORIN
FR
202
MOTOR OIL
GR
137
SANOMA
FI
170
WESSANEN
NL
203
NATUREX
FR
138
SEMAPA
PT
171
WINCOR NIXDORF
DE
204
NEDAP
NL
139
SIAS
IT
172
YIT
FI
205
NEOPOST
FR
140
SIEGFRIED HOLDING AG
CH
173
ZELTIA
ES
206
NEXANS
FR
141
SIPEF
BE
174
NH HOTEL GROUP
ES
142
SLIGRO
NL
175
NOVABASE
PT
143
SOGEFI
IT
176
NUTRECO
NL
144
SORIN
IT
177
3
BELGIUM
COMPANY
Price on
19/05/14 (EUR)
AEDIFICA
51.0
BARCO
54.8
BOIS SAUVAGE
234.3
CFE
74.6
EVS
39.0
Gimv
37.3
INTERVEST OFFICES & WAREHOUSES
22.3
KBC ANCORA
24.3
KINEPOLIS
138.9
LEASINVEST REAL ESTATE
80.0
LOTUS BAKERIES
830.0
LUXEMPART
32.4
MOBISTAR
15.1
RETAIL ESTATES
60.5
SIPEF
63.5
TESSENDERLO
22.1
VASTNED RETAIL
36.6
WDP
53.8
Capitalisation
(EURm )
504
670
369
1,888
543
922
322
1,905
734
395
647
776
907
352
568
703
698
865
Analysts
JMC
BJ
HD
HD
BJ
HD
DP
DP
DP
DP
HD
HD
BJ
DP
BH
BH
DP
DP / JMC
ESN
recom .
Hold
Accumulate
Reduce
Accumulate
Hold
Hold
Hold
Reduce
Hold
Hold
Hold
Hold
Reduce
Hold
Hold
Hold
Hold
Hold
YTD
-1.0%
-3.3%
9.4%
15.2%
-16.9%
-1.8%
14.6%
-7.4%
20.7%
8.7%
16.3%
16.5%
9.5%
7.4%
10.1%
16.6%
11.1%
2.1%
Abs. Perform ance
3 m onths
1 m onth
-0.4%
2.0%
-0.3%
-3.3%
2.5%
2.3%
15.8%
-6.2%
-15.4%
-14.1%
0.8%
1.2%
8.5%
0.5%
-15.7%
-9.4%
17.1%
2.0%
3.6%
-0.7%
2.0%
5.0%
15.8%
1.9%
8.6%
13.4%
5.1%
5.4%
9.5%
2.7%
9.1%
6.7%
1.2%
4.1%
1.6%
-2.4%
P/E Adj.
2014
25.6
12.1
16.0
16.1
14.0
20.9
14.2
22.4
30.2
16.1
14.1
35.0
16.6
13.3
Gross yield
2014
3.7%
2.9%
3.2%
1.7%
6.2%
6.6%
6.3%
0.0%
2.3%
5.9%
1.4%
3.0%
0.0%
5.0%
2.0%
0.0%
5.1%
6.3%
EV/Sales
2014
EV/EBITDA
2014
0.5
3.5
0.7
3.9
5.6
10.2
3.2
11.2
2.0
12.3
1.1
5.6
2.7
0.7
7.3
12.5
BEL 20 index (50 days & 200 days averages)
Head of Research: Jean-Marie Caucheteux
3,200
Contributing Analysts
Bart Jooris, CFA
Bernard Hanssens
Dirk Peeters
Hans D'Haese
Jean-Marie Caucheteux
BJ
BH
DP
HD
JMC
+32 2 287 92 79
+32 (0) 2 287 9689
+32 2 287 97 16
+32 (0) 2 287 9223
+32 2 287 99 20
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
3,000
2,800
2,600
2,400
2,200
2,000
1,800
Mar 11
4
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
FINLAND
COMPANY
AHLSTROM
AKTIA
ATRIA
BASWARE
CAPMAN
CAVERION
CITYCON
CRAMO
F-SECURE
FINNAIR
HKSCAN
LASSILA & TIKANOJA
METSÄ BOARD
OLVI
ORIOLA-KD
PKC GROUP
RAISIO
RAMIRENT
SANOMA
SPONDA
STOCKMANN
TECHNOPOLIS
TIETO
TIKKURILA
UPONOR
VACON
VAISALA
YIT
Price on
19/05/14 (EUR)
7.7
8.9
7.0
34.7
1.1
7.7
2.7
15.1
2.3
3.0
3.5
14.2
3.4
23.4
2.3
21.1
4.2
7.3
5.1
3.7
10.1
4.4
19.6
18.9
14.0
29.0
23.6
7.4
Capitalisation
(EURm )
359
593
198
445
90
962
1,178
656
357
377
188
551
1,112
486
352
504
665
791
828
1,050
728
470
1,424
835
1,025
885
426
929
Analysts
NC
AS
NC
KS
NC
MR
MR
MR
KS
JR
NC
HP
HP
NC
KS
HR
NC
MR
KS
MR
JR
MR
HR
AS
MR
PS
HR
MR
ESN
recom .
Reduce
Accumulate
Buy
Accumulate
Accumulate
Accumulate
Rating Suspended
Buy
Reduce
Accumulate
Hold
Buy
Accumulate
Hold
Hold
Reduce
Buy
Buy
Accumulate
Hold
Reduce
Accumulate
Sell
Hold
Accumulate
Reduce
Reduce
Hold
YTD
-7.2%
9.9%
-9.4%
38.5%
-7.9%
-13.9%
4.3%
-1.4%
23.0%
6.5%
-7.4%
-6.8%
7.6%
-18.1%
-8.6%
-12.8%
-4.8%
-20.4%
-20.4%
8.5%
-8.4%
1.6%
19.4%
-4.9%
-1.5%
-0.7%
1.7%
-27.0%
Abs. Perform ance
3 m onths
1 m onth
2.7%
-1.3%
0.6%
1.1%
-20.5%
-0.3%
5.9%
2.2%
-3.7%
1.9%
7.3%
-8.5%
-0.4%
1.1%
-1.4%
0.1%
5.5%
5.5%
9.3%
5.4%
-7.9%
-10.3%
-5.6%
-0.3%
11.9%
3.4%
-17.4%
-7.6%
-2.1%
0.0%
-5.6%
-4.6%
-14.2%
-8.4%
-18.7%
-7.1%
-4.8%
9.4%
-3.1%
-1.9%
-15.9%
-2.1%
-3.3%
5.2%
7.9%
6.1%
-4.7%
8.9%
11.6%
7.9%
0.5%
-2.0%
-2.3%
0.2%
-13.8%
-2.8%
Head of Research: Henri Parkkinen
Gross yield
2014
3.9%
5.6%
3.1%
0.9%
7.4%
4.7%
5.9%
4.3%
3.5%
0.0%
31.6%
4.2%
2.9%
3.2%
2.1%
3.6%
3.4%
5.5%
3.9%
4.9%
1.5%
3.2%
5.2%
4.4%
3.6%
2.4%
3.8%
6.0%
EV/Sales
2014
0.4
EV/EBITDA
2014
6.5
0.4
3.3
2.9
0.4
7.0
24.2
7.1
9.2
1.5
1.9
0.4
0.0
0.9
0.9
1.6
0.2
0.6
1.1
1.5
0.8
5.5
9.1
2.6
1.2
5.4
7.5
9.3
7.9
8.1
11.9
5.2
3.5
0.7
12.0
0.8
1.3
1.0
2.0
1.2
1.3
6.4
8.7
9.6
13.9
2.4
9.2
OMXH index (50 days & 200 days averages)
Contributing Analysts
Antti Saari
Hannu Rauhala
Henri Parkkinen
Jari Raisanen
Kimmo Stenvall
Matias Rautionmaa
Niclas Catani
Pekka Spolander
P/E Adj.
2014
32.5
11.2
27.9
nm
9.1
15.4
13.4
14.9
22.3
29.9
2.4
13.9
15.2
13.7
19.9
20.3
23.4
15.8
23.5
10.2
nm
9.5
13.5
15.9
24.0
24.8
21.8
8.4
8,000
AS
HR
HP
JR
KS
MR
NC
PS
+358 10 252 4359
+358 10 252 4392
+358 10 252 4409
+358 10 252 4504
+358 10 252 4561
+358 10 252 4408
+358 10 252 8780
+358 10 252 4351
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
7,500
7,000
6,500
6,000
5,500
5,000
4,500
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
At
End
Source: Factset
5
FRANCE
COMPANY
ALTEN
ALTRAN
BENETEAU
BONDUELLE
BOURBON
BOURSORAMA
FAIVELEY
GAMELOFT
INTERPARFUMS
KORIAN-MEDICA
LDC
LISI
M6-METROPOLE TELEVISION
MANITOU
MAUREL ET PROM
NATUREX
NEOPOST
NEXANS
ORPEA
SAFT
STALLERGÈNES
TF1
UBISOFT
VICAT
VILMORIN
Price on
19/05/14 (EUR)
36.0
7.4
12.0
22.2
23.8
12.0
56.5
7.0
31.0
27.3
132.9
116.4
13.9
12.5
12.4
65.1
59.9
41.8
51.3
24.3
56.2
12.4
14.3
59.3
97.2
Capitalisation
(EURm )
1,178
1,297
995
710
1,777
1,054
804
585
689
928
1,084
1,256
1,746
494
1,503
502
2,004
1,756
2,848
628
755
2,612
1,490
2,602
1,841
Analysts
JMK
SL
FP
FP
JLR
PC
CA
ER
AC
CA
FP
AB
ER / EC
CA
JLR
JPB
CA
AA
CA
ER
AG
ER / EC
ER
JM
FP
ESN
recom .
Reduce
Reduce
Buy
Accumulate
Buy
Hold
Sell
Hold
Reduce
Hold
Hold
Hold
Hold
Buy
Accumulate
Hold
Hold
Reduce
Buy
Reduce
Hold
Hold
Hold
Hold
Buy
YTD
9.1%
16.4%
-11.4%
15.3%
19.2%
47.2%
7.7%
-15.0%
-1.1%
32.4%
19.0%
8.0%
-16.8%
-9.6%
2.0%
11.7%
7.0%
13.5%
21.5%
-2.9%
3.6%
-11.7%
38.7%
9.7%
0.0%
Abs. Perform ance
3 m onths
1 m onth
0.9%
-3.8%
1.7%
-8.3%
3.9%
-2.6%
12.7%
8.5%
11.8%
-0.1%
35.0%
-0.9%
-3.9%
-1.6%
-11.9%
-0.6%
-3.1%
-4.0%
5.2%
1.0%
11.8%
0.1%
-5.4%
1.1%
-18.7%
-10.1%
-4.7%
2.2%
4.6%
0.8%
1.0%
2.1%
-7.8%
3.8%
10.4%
7.4%
17.1%
7.8%
-4.2%
-2.5%
0.3%
-2.4%
-11.8%
-2.5%
19.8%
13.7%
4.8%
-3.2%
-0.6%
0.4%
P/E Adj.
2014
14.2
12.9
nm
15.0
17.5
28.7
12.9
25.6
25.4
31.2
13.6
14.2
15.3
13.9
9.2
24.9
13.6
29.2
23.5
15.1
16.8
13.2
15.7
16.0
17.9
Gross yield
2014
3.5%
0.0%
0.8%
1.8%
4.8%
0.0%
1.8%
0.0%
1.3%
2.2%
1.4%
1.4%
6.1%
1.8%
3.6%
0.2%
6.6%
0.4%
1.2%
3.3%
1.4%
4.4%
0.0%
2.9%
1.7%
EV/Sales
2014
0.8
0.8
1.3
0.7
2.3
EV/EBITDA
2014
8.0
8.2
14.4
7.2
8.5
1.0
1.9
1.5
1.6
0.3
1.1
1.2
0.4
2.6
2.0
2.7
0.5
2.6
1.1
2.3
0.9
0.9
1.6
1.4
7.8
10.4
10.1
11.3
4.2
6.7
4.9
5.9
3.2
11.5
9.4
9.3
14.3
6.7
7.5
6.7
2.3
7.7
6.8
CAC All Tradable index (50 days & 200 days averages)
Head of Research: Marc Gouget
3,600
Contributing Analysts
Emmanuel Chevalier
Agnès Blazy
Ari Agopyan
Arnaud Cadart
Arsène Guekam
Christian Auzanneau
Eric Ravary
Francis Prêtre
Jean-Christophe Lefèvre-Moulenq
Jean-Luc Romain
Jean-Michel Koster
Jean-Pascal Brivady
Sébastien Liagre
6
3,400
EC
AB
AA
AC
AG
CA
ER
FP
JM
JLR
JMK
JPB
SL
+33 1 45 96 77 42
+33 1 45 96 77 61
+33 1 45 96 85 80
+33 1 45 96 78 76
+33 4 78 92 01 85
+33 1 45 96 79 53
+33 4 78 92 02 30
+33 1 45 96 91 04
+33 1 45 96 77 36
+33 1 45 96 77 17
+33 4 78 92 02 25
+33 1 45 96 90 34
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
3,200
3,000
2,800
2,600
2,400
2,200
2,000
Mar 11
Jun 11
Source: Factset
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
GERMANY
COMPANY
AAREAL BANK
AIXTRON
BAYWA
BB BIOTECH
BIOTEST
COMDIRECT
DEUTSCHE EUROSHOP
DRAEGERWERK
DRILLISCH
ELRINGKLINGER
GERRESHEIMER AG
GRENKELEASING AG
HHLA
JENOPTIK
Joy ou Ag
LEONI
MLP
PATRIZIA AG
PFEIFFER VACUUM
RHEINMETALL
RIB SOFTWARE
SAF-HOLLAND
SALZGITTER
SIEGFRIED HOLDING AG
SURTECO
WINCOR NIXDORF
Price on
19/05/14 (EUR)
33.4
10.2
40.4
119.5
83.1
8.2
36.1
75.0
27.0
28.6
47.9
75.6
17.5
12.4
12.8
53.2
4.9
9.4
79.6
47.0
11.5
11.5
32.2
129.2
28.4
43.3
Capitalisation
(EURm )
1,997
1,047
1,394
1,416
1,029
1,156
1,947
1,238
1,294
1,813
1,505
1,100
1,226
709
307
1,739
529
594
785
1,783
437
522
1,741
461
440
1,290
Analysts
PH
AP
MS
MM
MM
PH
JR
KL
AP
TS
KL
PH
JR
AP
KL
TS
PH
PH
AP
AP
JR
TS
SF
MM
KL
AP
ESN
recom .
Accumulate
Sell
Accumulate
Buy
Hold
Accumulate
Hold
Hold
Hold
Reduce
Hold
Hold
Reduce
Buy
Buy
Accumulate
Accumulate
Accumulate
Reduce
Accumulate
Buy
Buy
Buy
Buy
Hold
Buy
YTD
15.9%
-3.3%
6.9%
3.7%
9.3%
-1.1%
13.4%
-21.0%
28.3%
-3.2%
-5.7%
11.1%
-1.6%
0.3%
-0.2%
-2.0%
-6.0%
22.9%
-19.6%
4.8%
60.3%
6.4%
3.8%
-2.2%
23.2%
-14.0%
Abs. Perform ance
3 m onths
1 m onth
13.5%
4.6%
-19.1%
-11.4%
-1.1%
0.9%
-16.9%
2.6%
-4.5%
-4.2%
-4.9%
0.6%
10.6%
6.2%
-23.1%
-14.3%
12.6%
3.8%
3.5%
-0.1%
-1.8%
0.9%
-0.7%
2.4%
-10.2%
2.8%
-1.7%
4.8%
-6.8%
2.2%
-4.2%
-0.5%
-6.8%
1.1%
15.4%
14.2%
-9.4%
-3.0%
-11.2%
-6.3%
21.7%
5.0%
-5.9%
5.2%
0.7%
5.4%
-3.7%
-2.5%
-1.0%
1.4%
-24.4%
-9.2%
P/E Adj.
2014
16.7
nm
12.4
27.5
18.8
19.2
14.4
23.0
17.1
17.9
19.9
24.6
14.3
8.4
11.3
13.4
14.7
17.2
16.3
31.1
12.2
nm
14.8
21.0
13.0
Gross yield
2014
3.7%
0.0%
2.0%
4.8%
0.0%
4.4%
3.6%
1.7%
6.3%
2.1%
1.5%
1.5%
2.6%
1.7%
0.0%
2.8%
5.1%
2.0%
3.7%
2.1%
1.3%
3.7%
0.8%
0.9%
2.3%
3.9%
EV/Sales
2014
EV/EBITDA
2014
3.9
0.1
nm
6.2
1.8
10.9
0.6
4.1
1.8
1.8
6.0
13.9
9.1
9.0
1.5
1.1
0.9
0.5
0.9
4.4
1.7
0.5
5.1
0.7
0.3
1.6
1.0
0.6
6.6
8.9
5.3
6.0
7.1
41.1
9.5
6.2
13.8
7.1
6.8
8.3
8.0
7.0
MDAX index (50 days & 200 days averages)
Head of Research: Tim Schuldt, CFA
17,000
16,000
Contributing Analysts
Philipp Häßler, CFA
Adrian Pehl, CFA
Holger Schmidt, CEFA
Jochen Rothenbacher, CEFA
Konrad Lieder
Marietta Miemietz CFA
Michael Schaefer
Stefan Freudenreich, CFA
Tim Schuldt, CFA
PH
AP
HS
JR
KL
MM
MS
SF
TS
+49 69 58997 414
+49 69 58997 438
+49 69 58 99 74 32
+49 69 58997 415
+49 69 5899 7436
+49-69-58997-439
+49 69 58997 419
+49 69 58997 437
+49 69 5899 7433
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
15,000
14,000
13,000
12,000
11,000
10,000
9,000
8,000
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source: Factset
7
GREECE
COMPANY
FOURLIS HOLDINGS
HELLENIC EXCHANGES
INTRALOT
MOTOR OIL
Price on
19/05/14 (EUR)
4.8
7.6
1.9
7.7
Capitalisation
(EURm )
242
497
294
854
Analysts
DB / NSS
DB
DB
VR
ESN
recom .
Buy
Buy
Accumulate
Accumulate
YTD
16.1%
-5.0%
0.5%
-6.2%
Abs. Perform ance
3 m onths
1 m onth
-4.6%
-17.7%
-1.3%
-12.6%
-13.1%
-14.0%
-12.4%
-13.1%
P/E Adj.
2014
nm
17.0
25.3
9.7
Gross yield
2014
0.0%
2.9%
0.4%
7.8%
EV/Sales
2014
0.9
6.3
0.6
0.2
EV/EBITDA
2014
13.0
10.2
4.9
6.1
Athex Composite index (50 days & 200 days averages)
Head of Research: Konstantinos Manolopoulos
1,600
Contributing Analysts
Dimitris Birbos
Natalia Svyrou-Svyriadi
Dimitris Birbos
Vassilis Roumantiz
DB
NSS
DB
+30 210 81 73 392
+30 210 81 73 384
+30 210 81 73 392
VR +30 2108173394
[email protected]
[email protected]
[email protected]
[email protected]
1,400
1,200
1,000
800
600
400
Mar 11
Jun 11
Source: Factset
8
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
ITALY
COMPANY
ACEA
ACOTEL
AMPLIFON
ANSALDO STS
ASTALDI
BENI STABILI
BREMBO
CREDEM
CREVAL
DANIELI
DATALOGIC
DE LONGHI
DIASORIN
EDITORIALE L'ESPRESSO
EI TOWERS
ENGINEERING
EXPRIVIA
FALCK RENEWABLES
GAS PLUS
GEOX
HERA
IGD
IMA
INDESIT
INTERPUMP
IREN
ITALCEMENTI
MAIRE TECNIMONT
MARR
PIAGGIO
RCS MEDIAGROUP
RECORDATI
REPLY
SAFILO
SALINI IMPREGILO
SIAS
SOGEFI
SORIN
TI MEDIA
TREVI
Price on
19/05/14 (EUR)
9.3
17.4
4.4
7.6
7.3
0.6
27.3
6.3
1.5
23.3
8.7
16.0
29.0
1.5
37.8
46.5
0.8
1.3
4.8
2.8
2.0
1.2
31.5
9.9
9.8
1.1
7.4
2.3
13.6
2.7
1.5
11.4
57.0
15.6
4.1
8.5
3.9
2.2
1.4
7.1
Capitalisation
(EURm )
1,990
72
993
1,372
715
1,149
1,826
2,091
706
1,609
508
2,391
1,620
602
1,067
581
42
365
214
729
2,857
413
1,158
1,130
1,066
1,259
1,817
709
905
973
728
2,376
526
960
1,658
1,928
460
1,039
143
501
Analysts
DM
ADV
PS
GG
FS
FS
GG
LT
LT
PS
PS
CG
PS
ADV
ADV
ADV
ADV
DM
DM
GC
DM
FS
PS
CG
PS
DM
FS
FS
CG
GG
ADV
PS
ADV
GC
FS
FS
GG
PS
ADV
PS
ESN
recom .
Accumulate
Hold
Accumulate
Buy
Accumulate
Accumulate
Accumulate
Reduce
Hold
Accumulate
Buy
Hold
Accumulate
Hold
Accumulate
Hold
Hold
Buy
Buy
Hold
Accumulate
Accumulate
Hold
Hold
Accumulate
Buy
Hold
Accumulate
Hold
Hold
Accumulate
Accumulate
Hold
Hold
Hold
Buy
Accumulate
Accumulate
Reduce
Hold
YTD
12.9%
-11.7%
10.0%
-2.9%
-5.2%
22.4%
39.6%
8.3%
9.7%
-6.7%
5.1%
34.7%
-14.9%
8.4%
12.9%
6.9%
-2.8%
-3.3%
0.2%
6.6%
22.8%
37.6%
12.3%
3.1%
12.3%
-4.3%
19.0%
42.5%
12.6%
11.9%
9.8%
8.6%
0.2%
-8.5%
-15.7%
17.5%
-9.8%
4.6%
-22.5%
13.4%
Abs. Perform ance
3 m onths
1 m onth
1.4%
-12.3%
-21.1%
-15.6%
-1.2%
-1.0%
-5.6%
1.1%
3.0%
-6.7%
-0.5%
-6.0%
23.4%
0.5%
-2.9%
-13.2%
17.4%
-10.3%
-13.2%
-6.2%
12.2%
-7.6%
8.8%
-0.1%
-15.6%
-0.4%
-23.0%
-9.6%
-3.4%
-6.7%
-3.1%
-6.1%
-17.0%
-9.2%
-9.5%
-10.4%
-2.1%
-0.3%
-8.9%
-7.7%
8.3%
-5.4%
8.4%
-6.3%
-9.8%
-12.6%
-1.2%
-5.5%
-1.6%
-5.4%
-11.3%
-15.5%
-7.3%
-17.4%
36.7%
-3.3%
3.4%
-1.2%
22.9%
-3.9%
-7.6%
-12.0%
-9.5%
-7.6%
-8.1%
-13.5%
-8.3%
7.6%
-9.5%
-7.6%
4.6%
0.5%
-4.6%
-16.9%
-3.6%
3.0%
-26.4%
-24.6%
2.4%
-12.6%
P/E Adj.
2014
14.6
nm
32.1
16.9
7.1
22.4
nm
15.4
nm
12.7
16.9
18.6
19.6
44.1
30.0
12.4
7.7
nm
16.9
nm
16.8
16.9
20.5
24.5
22.5
10.5
nm
17.2
17.5
31.6
nm
15.6
14.1
27.3
12.9
13.6
11.9
16.8
nm
33.7
Gross yield
2014
4.5%
0.0%
1.0%
2.1%
3.5%
3.7%
1.8%
1.9%
0.0%
1.4%
1.7%
2.9%
1.8%
2.0%
2.7%
1.4%
0.0%
0.4%
3.6%
0.0%
4.4%
3.6%
4.0%
0.0%
1.9%
5.3%
2.1%
0.0%
4.4%
1.9%
0.0%
2.7%
1.2%
0.0%
1.5%
4.1%
3.2%
0.0%
0.0%
1.8%
EV/Sales
2014
1.3
0.4
1.5
0.7
0.6
EV/EBITDA
2014
5.8
11.3
9.7
6.7
4.7
1.2
8.3
0.2
1.3
1.4
3.3
1.0
4.6
0.6
0.8
3.8
1.4
1.0
1.2
2.1
9.4
9.2
9.0
9.0
10.0
5.0
6.5
7.5
4.7
30.9
6.4
1.5
0.6
1.8
1.1
1.1
0.5
0.8
1.1
0.8
2.7
0.9
0.9
0.4
3.2
0.6
1.5
5.9
0.8
9.7
7.7
9.3
5.9
7.0
7.5
11.1
8.8
20.5
10.4
6.7
9.5
3.6
5.5
6.0
8.2
13.9
7.2
9
FTSE Italy All Share index (50 days & 200 days averages)
Head of Research: Francesco Previtera
Contributing Analysts
Andrea Devita, CFA
Claudio Giacomiello, CFA
Dario Michi
Francesco Sala
Gabriele Gambarova
Giada Cabrino, CIIA
Luigi Tramontana
Paola Saglietti
23,000
ADV
CG
DM
FS
GG
GC
LT
PS
+39 02 4344 4031
+39 02 4344 4269
+39 02 4344 4237
+39 02 4344 4240
+39 02 43 444 289
+39 02 4344 4092
+39 02 4344 4239
+39 02 4344 4287
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
22,000
21,000
20,000
19,000
18,000
17,000
16,000
15,000
14,000
13,000
Mar 11
Jun 11
Source: Factset
10
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
NETHERLANDS
COMPANY
AALBERTS
ACCELL GROUP
ACOMO
ARCADIS
ASM INTERNATIONAL
BESI
BINCKBANK
BRUNEL
EXACT HOLDING NV
HES BEHEER
IMTECH
KENDRION
NEDAP
NUTRECO
ORDINA
ROYAL BAM GROUP
SLIGRO
TELEGRAAF MEDIA GROEP
TEN CATE
TKH GROUP
TOMTOM
USG PEOPLE
WESSANEN
Price on
19/05/14 (EUR)
23.7
13.8
17.5
26.5
30.2
11.6
8.5
44.7
26.9
44.1
1.2
25.4
32.0
33.0
1.9
3.6
30.5
7.2
20.7
25.0
5.2
10.4
4.4
Capitalisation
(EURm )
2,616
338
408
1,914
1,917
434
628
1,090
640
399
537
329
214
2,270
174
867
1,338
336
554
948
1,157
832
329
Analysts
GS
GS
GR
EDJ
EDJ
EDJ
LS
GS
MDD
MDD
EDJ
GS / JVDH
JVDH
GR
JVDH
EDJ
GR
JVDH
GS
GS
MDD
GS
GR
ESN
recom .
Buy
Reduce
Hold
Accumulate
Buy
Buy
Hold
Buy
Hold
Hold
Hold
Buy
Hold
Hold
Hold
Buy
Buy
Buy
Buy
Hold
Hold
Reduce
Accumulate
YTD
2.1%
2.7%
5.6%
3.5%
26.1%
41.4%
9.9%
0.4%
14.4%
-2.0%
-44.2%
6.3%
6.7%
-8.6%
-0.8%
-5.1%
8.1%
-20.4%
-9.8%
-1.8%
1.2%
7.3%
53.3%
Abs. Perform ance
3 m onths
1 m onth
-0.5%
-3.2%
-3.0%
-4.4%
3.4%
-1.5%
-1.5%
0.3%
16.1%
4.9%
29.7%
6.2%
3.7%
6.7%
-0.7%
-8.0%
2.6%
0.9%
-1.2%
-0.6%
-40.8%
-20.0%
5.7%
2.3%
2.6%
-0.1%
1.2%
3.0%
-8.2%
-7.0%
-10.6%
-7.4%
4.3%
-0.4%
0.3%
-1.4%
-15.8%
-8.8%
-1.4%
-1.4%
14.2%
13.2%
-21.2%
-10.7%
30.0%
8.5%
P/E Adj.
2014
14.7
12.3
14.0
14.8
31.4
14.2
11.7
18.3
21.5
14.1
nm
13.9
18.7
16.9
14.2
11.4
17.8
11.6
12.7
11.9
16.3
14.5
14.8
Gross yield
2014
2.0%
4.4%
4.7%
2.2%
1.8%
2.6%
4.3%
2.7%
4.7%
0.0%
0.0%
2.9%
4.0%
3.0%
1.7%
3.5%
3.9%
6.9%
2.6%
3.2%
0.0%
2.3%
1.6%
EV/Sales
2014
1.4
0.6
0.8
0.8
2.7
1.2
EV/EBITDA
2014
9.3
10.3
10.0
8.7
16.1
7.0
0.7
2.5
2.7
0.3
1.0
1.3
0.7
0.4
0.0
0.5
0.6
0.7
0.9
1.2
0.5
0.7
11.0
12.0
9.0
10.6
8.0
9.9
9.8
9.2
1.5
8.8
4.4
7.6
8.3
7.4
10.9
8.2
Amsterdam Small Cap Index index (50 days & 200 days averages)
Head of Research: Martijn den Drijver
Contributing Analysts
Edwin de Jong
Gerard Rijk
Gert Steens
Johan van den Hooven
Martijn den Drijver
600
EDJ
GR
GS
JVDH
MDD
+312 0 5508569
+ 31 (0)20 550 8572
+312 0 5508639
+312 0 5508518
+312 0 5508636
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
550
500
450
400
350
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source: Factset
11
PORTUGAL
COMPANY
ALTRI
BPI
CTT
ESPIRITO SANTO SAUDE
IMPRESA
MOTA ENGIL
NOVABASE
PORTUCEL
SEMAPA
ZON OPTIMUS
Price on
19/05/14 (EUR)
2.3
1.6
7.1
3.6
1.7
4.7
3.9
3.4
10.3
4.8
Capitalisation
(EURm )
467
2,227
1,070
348
281
914
121
2,626
1,219
2,469
Analysts
CJ / AA
AR
CJ / AA
AR / JMF
HB
JMF
JMF
CJ / AA
CJ
AA
ESN
recom .
Buy
Hold
Hold
Hold
Reduce
Rating Suspended
Accumulate
Accumulate
Hold
Accumulate
Abs. Perform ance
3 m onths
1 m onth
-16.7%
-5.5%
-4.6%
-18.3%
-0.6%
-8.0%
12.3%
7.1%
53.5%
12.3%
-11.9%
9.2%
-4.3%
-11.0%
47.9%
7.2%
-0.3%
17.6%
9.5%
7.9%
26.5%
0.5%
2.3%
-11.2%
-9.6%
-7.1%
YTD
1.6%
31.7%
27.5%
P/E Adj.
2014
10.2
18.9
15.3
20.7
16.3
12.8
30.4
21.7
20.1
30.0
Gross yield
2014
0.9%
0.0%
5.7%
1.2%
0.0%
4.1%
5.2%
7.6%
2.5%
2.5%
EV/Sales
2014
1.8
EV/EBITDA
2014
6.9
0.8
1.4
1.9
0.8
0.5
2.1
1.6
2.5
4.6
8.8
11.4
5.4
7.1
10.0
8.1
7.0
PSI20 index (50 days & 200 days averages)
Head of Research: João Miguel Lourenço
8,000
Contributing Analysts
André Rodrigues
Artur Amaro
Carlos Jesus
Helena Barbosa
José Mota Freitas, CFA
AR
AA
CJ
HB
JMF
+351 21 389 68 39
+351 213 89 6822
+351 21 389 6812
+351 21 389 6831
+351 22 607 09 31
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
7,500
7,000
6,500
6,000
5,500
5,000
4,500
4,000
Mar 11
12
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
SPAIN
COMPANY
Price on
19/05/14 (EUR)
ALMIRALL
11.8
BOLSAS Y MERCADOS ESPANOLES SA
31.2
CAF
340.3
CARBURES EUROPE SA
26.3
CORP. FINANCIERA ALBA
43.0
DURO FELGUERA
4.9
ENCE
2.1
EUROPAC
3.9
EZENTIS
1.0
FAES FARMA
2.1
LABORATORIOS ROVI
9.9
MELIA HOTELS INTERNATIONAL
9.2
NH HOTEL GROUP
4.3
REALIA
1.2
TUBACEX
3.6
VIDRALA
36.6
ZELTIA
2.6
Capitalisation
(EURm )
2,037
2,605
1,167
501
2,509
790
527
334
152
455
494
1,699
1,332
361
479
896
576
Analysts
AIGG
JBV
IR
IR
JBV
IR
IR
IR
RF
AIGG
AIGG
SRG
SRG
RF
IR
IR
AIGG
ESN
recom .
Buy
Buy
Buy
Buy
Buy
Reduce
Accumulate
Hold
Buy
Hold
Hold
Accumulate
Accumulate
Buy
Hold
Buy
Accumulate
YTD
-0.5%
12.6%
-11.4%
100.9%
1.2%
0.8%
-22.8%
0.3%
-36.8%
-15.5%
-1.1%
-1.5%
0.8%
41.6%
24.7%
-2.3%
12.1%
Abs. Perform ance
3 m onths
1 m onth
-6.0%
10.1%
3.3%
4.3%
-10.7%
-9.1%
13.8%
-21.9%
2.7%
-4.4%
2.3%
0.0%
-20.0%
-2.1%
1.2%
-2.7%
-27.2%
-12.4%
-13.4%
-3.2%
3.2%
3.1%
-1.9%
4.1%
-2.0%
-4.3%
3.1%
-12.0%
19.6%
7.3%
0.8%
-3.9%
-3.7%
3.6%
P/E Adj.
2014
33.3
16.0
12.0
nm
11.8
nm
13.5
nm
20.0
21.6
24.5
nm
34.1
24.7
14.7
42.4
Gross yield
2014
1.1%
6.0%
3.1%
0.0%
2.3%
4.9%
1.4%
3.3%
0.0%
1.9%
1.6%
0.8%
0.0%
0.0%
1.2%
2.0%
0.0%
EV/Sales
2014
2.8
6.1
1.0
4.0
EV/EBITDA
2014
17.4
8.7
7.2
23.6
0.7
1.1
0.7
0.7
2.2
1.9
1.7
1.7
7.4
1.2
2.0
4.1
7.6
11.5
5.7
8.0
10.3
13.2
9.0
15.7
14.2
10.9
7.9
24.3
IBEX 35 index (50 days & 200 days averages)
Head of Research: Victor Peiro Pérez
11,000
Contributing Analysts
Ana Isabel González García CIIA
Iñigo Recio Pascual
Javier Bernat
Rafael Fernández de Heredia
Sonia Ruiz De Garibay
Victor Peiro Pérez
10,500
AIGG
IR
JBV
RF
SRG
VPP
+34 91 436 78 09
+34 91 436 7814
+34 91 436 7816
+34 91 436 78 08
+34 91 436 7841
+34 91 436 7812
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
[email protected]
10,000
9,500
9,000
8,500
8,000
7,500
7,000
6,500
6,000
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
13
EUROPEAN SMALL & MID CAPS SELECTION
RANKING
10 Highest P/E (x)
2014
10
Lowest P/E (x)
2014
10
Highest P/BV (x)
2014
20 Highest ROCE/WACC
2014
20 Highest Gross Yield
2014
1
MAUREL ET PROM
9.2
1
HKSCAN
2.5
1
MAIRE TECNIMONT
9.2
1 CAPMAN
14.8
1
PORTUCEL
7.5
2
REN
9.9
2
ASTALDI
7.2
2
ZELTIA
8.7
2 TIETO
14.5
2
MOTOR OIL
7.4
3
IPSOS
11.1
3
EXPRIVIA
7.8
3
KINEPOLIS
7.9
3 BOLSAS Y MERCADOS ESPANOLES SA 14.4
3
CAPMAN
7.3
4
ADLER MODEMAERKTE
11.6
4
Joyou Ag
8.3
4
EVS
7.5
4 CTT
11.3
4
TELEGRAAF MEDIA GROEP
6.9
8.4
6.9
5 EXACT HOLDING NV
5
GESCO
11.7
5
YIT
5
VACON
9.1
5
Gimv
6.6
6
GL EVENTS
12.2
6
CAPMAN
9.2
6
BOLSAS Y MERCADOS ESPANOLES
6.7
SA6 ANSALDO STS
8.2
6
NEOPOST
6.5
7
DPA
12.3
7
MAUREL ET PROM
9.2
7
DRILLISCH
6.7
7 HELLENIC EXCHANGES
7.6
7
INTERVEST OFFICES & WAREHOUSES
6.3
8
FLEURY MICHON
12.7
8
TECHNOPOLIS
9.4
8
EXACT HOLDING NV
6.4
8 F-SECURE
6.5
8
DRILLISCH
6.2
9
MOTA ENGIL
12.8
9
ALTRI
10.1
9
F-SECURE
5.3
9 DURO FELGUERA
5.9
9
EVS
6.2
12.9
10
MOTOR OIL
10.2
10 IMA
5.0
10 VACON
5.8
10 M6-METROPOLE TELEVISION
6.1
11 DRILLISCH
5.7
11 LEASINVEST REAL ESTATE
6.0
12 DIASORIN
5.0
12 YIT
5.9
10 ALTRAN
10 Lowest P/BV (x)
2014
10 Highest abs. perf. YTD (%)
10 Lowest abs. perf. YTD (%)
13 STALLERGÈNES
4.4
13 CITYCON
5.9
100.9
1 IMTECH
-44.2
14 EVS
4.2
14 BOLSAS Y MERCADOS ESPANOLES SA
5.8
RIB SOFTWARE
60.3
2 EZENTIS
-36.8
15 BRUNEL
3.7
15 CTT
5.7
0.7
3
IMPRESA
53.5
3 YIT
-27.0
16 GAMELOFT
3.4
16 AKTIA
5.4
0.6
4
WESSANEN
53.3
4 ENCE
-22.8
17 TIKKURILA
3.3
17 IREN
5.3
5 FINNAIR
0.6
5
NOVABASE
47.9
5 TI MEDIA
-22.5
18 AB-BIOTICS
3.2
18 RAMIRENT
5.3
6 EXPRIVIA
0.5
6
BOURSORAMA
47.2
6 DRAEGERWERK
-21.0
19 M6-METROPOLE TELEVISION
3.1
19 VASTNED RETAIL
5.2
20 REPLY
2.9
20 MLP
5.2
1 ENCE
0.8
1
CARBURES EUROPE SA
2 Joyou Ag
0.8
2
3 ITALCEMENTI
4 SANOMA
7 SALZGITTER
0.5
7
MAIRE TECNIMONT
42.5
7 RAMIRENT
-20.4
8 ATRIA
0.5
8
BESI
41.4
8 TELEGRAAF MEDIA GROEP
-20.4
9 HKSCAN
0.4
9
BREMBO
39.6
9 SANOMA
-20.4
0.4
10 UBISOFT
38.7
10 PFEIFFER VACUUM
-19.6
10 CREVAL
14
EUROPEAN SMALL & MID CAPS SELECTION
MARKET CAPS
Stocks by market capitalisation (EURm)
HERA
IT
2,857
MAUREL ET PROM
FR
1,503
MOTA ENGIL
PT
966
EDITORIALE L'ESPRESSO
IT
602
ACCELL GROUP
NL
380
ORPEA
FR
2,848
UBISOFT
FR
1,490
CAVERION
FI
962
PATRIZIA AG
DE
594
FINNAIR
FI
378
AALBERTS
NL
2,640
BB BIOTECH
DE
1,416
SAFILO
IT
960
AKTIA
FI
593
BOIS SAUVAGE
BE
370
PORTUCEL
PT
2,626
TIETO
FI
1,407
YIT
FI
929
GAMELOFT
FR
585
FALCK RENEWABLES
IT
365
TF1
FR
2,613
BAYWA
DE
1,394
GIMV
BE
922
ENGINEERING
IT
581
AHLSTROM
FI
359
BOLSAS Y MERCADOS ESPANOLESES
SA
2,605
ANSALDO STS
IT
1,372
MOBISTAR
BE
907
NATUREX
FR
579
F-SECURE
FI
357
VICAT
FR
2,602
CORP. FINANCIERA ALBA
ES
2,509
SLIGRO
NL
1,324
MARR
IT
905
ZELTIA
ES
576
ORIOLA-KD
FI
352
DE LONGHI
IT
2,391
ALTRAN
FR
1,297
VIDRALA
ES
896
TEN CATE
NL
574
ESPIRITO SANTO SAUDE
PT
348
RECORDATI
IT
2,376
DRILLISCH
DE
1,294
VACON
FI
885
SIPEF
BE
568
TELEGRAAF MEDIA GROEP
NL
336
NUTRECO
NL
2,267
WINCOR NIXDORF
DE
1,290
ROYAL BAM GROUP
NL
867
LASSILA & TIKANOJA
FI
551
EUROPAC
ES
334
BPI
PT
2,227
IREN
IT
1,259
MOTOR OIL
GR
854
EVS
BE
543
WESSANEN
NL
329
KORIAN-MEDICA
FR
2,116
LISI
FR
1,256
USG PEOPLE
NL
842
IMTECH
NL
537
KENDRION
NL
329
CREDEM
IT
2,091
DRAEGERWERK
DE
1,238
TIKKURILA
FI
835
MLP
DE
529
INTERVEST OFFICES & WAREHOUSES
BE
328
ALMIRALL
ES
2,037
HHLA
DE
1,226
SANOMA
FI
828
ENCE
ES
527
JOYOU AG
DE
307
PT
1,219
FAIVELEY
FR
804
REPLY
IT
526
INTRALOT
GR
294
NEOPOST
FR
2,004
SEMAPA
AAREAL BANK
DE
1,997
ALTEN
FR
1,178
RAMIRENT
FI
791
SAF-HOLLAND
DE
522
IMPRESA
PT
281
ACEA
IT
1,990
CITYCON
FI
1,178
DURO FELGUERA
ES
790
DATALOGIC
IT
508
FOURLIS HOLDINGS
GR
242
ARCADIS
NL
1,984
CAF
ES
1,167
PFEIFFER VACUUM
DE
785
AEDIFICA
BE
504
NEDAP
NL
214
DEUTSCHE EUROSHOP
DE
1,947
TOMTOM
NL
1,160
LUXEMPART
LU
776
PKC GROUP
FI
504
GAS PLUS
IT
214
SIAS
IT
1,928
IMA
IT
1,158
STALLERGENES
FR
755
TREVI
IT
501
ATRIA
FI
198
ASM INTERNATIONAL
NL
1,917
COMDIRECT
DE
1,156
GEOX
IT
729
CARBURES EUROPE SA
ES
501
PSI
DE
193
KBC ANCORA
BE
1,905
BENI STABILI
IT
1,149
KINEPOLIS
BE
728
FAES FARMA
ES
498
HKSCAN
FI
188
CFE
BE
1,888
BRUNEL
NL
1,135
STOCKMANN
FI
728
HELLENIC EXCHANGES
GR
497
ORDINA
NL
174
VILMORIN
FR
1,841
AIXTRON
DE
1,134
RCS MEDIAGROUP
IT
728
MANITOU
FR
494
TI MEDIA
IT
153
BREMBO
IT
1,826
ASTALDI
IT
722
LABORATORIOS ROVI
ES
494
152
1,813
1,130
ES
DE
IT
EZENTIS
ELRINGKLINGER
INDESIT
RALLYE
FR
1,781
METSA BOARD
FI
1,112
CREVAL
IT
720
OLVI
FI
486
NOVABASE
PT
121
BOURBON
FR
1,777
GRENKELEASING AG
DE
1,111
MAIRE TECNIMONT
IT
714
TUBACEX
ES
479
CAPMAN
FI
90
RHEINMETALL
DE
1,775
BIOTEST
DE
1,089
BONDUELLE
FR
710
TECHNOPOLIS
FI
470
ACOTEL
IT
72
NEXANS
FR
1,756
LDC
FR
1,084
JENOPTIK
DE
709
ALTRI
PT
467
EXPRIVIA
IT
42
M6-METROPOLE TELEVISION
FR
1,746
CTT
PT
1,070
TESSENDERLO
BE
703
RETAIL ESTATES
BE
461
AB-BIOTICS
ES
25
SALZGITTER
DE
1,741
EI TOWERS
IT
1,067
VASTNED RETAIL
NL
698
SOGEFI
IT
460
LEONI
DE
1,739
INTERPUMP
IT
1,066
INTERPARFUMS
FR
689
BASWARE
FI
445
MELIA HOTELS INTERNATIONAL
ES
1,699
BOURSORAMA
FR
1,054
BARCO
BE
670
BESI
NL
441
1,658
SPONDA
FI
1,050
LOTUS BAKERIES
BE
667
SURTECO
DE
440
IT
1,039
CRAMO
FI
656
RIB SOFTWARE
DE
431
1,025
RAISIO
FI
654
VAISALA
FI
426
SALINI IMPREGILO
IT
ITALCEMENTI
IT
1,640
SORIN
DIASORIN
IT
1,620
UPONOR
FI
DANIELI
IT
1,609
BENETEAU
FR
995
EXACT HOLDING NV
NL
640
IGD
IT
413
NH HOTEL GROUP
ES
1,513
AMPLIFON
IT
993
BINCKBANK
NL
628
ACOMO
NL
411
GERRESHEIMER AG
DE
1,505
PIAGGIO
IT
973
SAFT
FR
628
HES BEHEER
NL
399
TKH GROUP
NL
973
SIEGFRIED HOLDING AG
CH
621
LEASINVEST REAL ESTATE
BE
394
15
Netherlands
SMALL & MID CAPS SELECTION
EUR 23.66
Buy
AALBERTS
AALB.AS/AALB NA
Market capitalisation: EUR 2628m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR25.79 / 16.50
12/12
2,025
296
14.6%
202
10.0%
135
152
227
542
0.6
1.8
14.4
8.7%
1.0
1.4
1.1
7.7
11.4
11.3
1.8
5.8%
2.2%
1.39
3.1%
8.86
0.35
30.8%
12/13
12/14e
12/15e
2,040
2,150
2,325
305
326
372
14.9%
15.2%
16.0%
207
226
270
10.2%
10.5%
11.6%
134
161
201
152
178
219
223
262
305
480
340
152
0.5
0.3
0.1
1.6
1.0
0.4
19.2
27.4
54.0
8.7%
9.5%
11.3%
1.0
1.1
1.9
1.8
1.7
1.5
1.4
1.2
10.2
9.3
7.7
15.0
13.5
10.6
16.8
14.7
12.0
2.5
2.2
1.9
3.9%
6.2%
7.7%
1.7%
2.0%
2.5%
1.38
1.61
1.97
-0.9%
16.5%
22.4%
9.42
10.74
12.35
0.41
0.48
0.59
6.7%
-0.5%
-3.2%
Avg. Daily nb traded shares:195,689
Profile: Aalberts Industries is an international group of companies active in the fine metalwork and plumbing
materials industry organized in two groups.
1 Industrial services offers specialised high end technologies for the production of complex customer specific
precision products and advanced material treatment technologies through a European network of service
centers.
2 Flow Control offers a wide range of plumbing materials for water, gas and heating systems and dispensing
systems for soft drinks and beers The company has grown in 20 years from a company that was active in
industrial products with 6 locations and EUR 22m turnover into a international group of more than 150
companies with EUR 2bn turnover offering a wide range of products and services.
SWOT Analysis
Strengths
• • Integrated network
Weaknesses
• • Short lead times
• • Entrepreneurial, delegated set-up
• • Distributed working capital may lessen group control
• Full branded Flow Control catalogue
Opportunities
• • Modularisation and branding of building installations
Threats
• • Geographical stretch as clients move on
• • Networked outsourcing of high-end manufacturing
• • Geo-political influence on raw material availability
• • Upstream oil & gas installations
• • Talent scarcity in Germany
Main shareholders: Free float 60.0%; Aalberts family 13.0%; FMR 10.0%;
Ameriprise 5.0%; Oppenheimer 5.0%; Norges Bank 4.0%; Cantillon 3.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: Aalberts seems positioned for operating profit growth, even when markets remain
sluggish. New initiatives in the area of for instance cross selling, new product development and key account
management are starting to bear fruit. Recovering top line momentum and restrained capex will trigger
significant operational leverage in ROCE. 10x EV/EBITDA is a modest valuation for Aalberts’ quality portfolio
and built-in sustainable profitability.
Target Price: EUR 26.50
titre
26
14/08/14 Results
24
2014H1
22
AALBERTS SMALL & MID CAPS SELECTION
Analyst(s)
20
18
16
14
Gert Steens
12
10
Mar 11
Source : Factset
16
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+312 0 5508639
SNS Securities
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 33.37
Accumulate
AAREAL BANK
ARLG.DE/ARL GY
Market capitalisation: EUR 1997m
Banks
EUR
12/12
12/13
12/14e
12/15e
Total Revenue (m)
639
686
809
852
Pre-Provision Profit (PPP) (m)
281
311
369
399
Loan Impairment Charge (m)
-106
-113
-130
-130
Operating profit (OP) (m)
175
198
239
269
Earnings before tax (m)
176
198
389
269
Net profit (reported) (m)
85.0
93.0
269
140
Net profit (adj.) (m)
84.3
93.0
119
140
Shareholders equity (m)
2,109
2,208
2,433
2,498
Tier 1 Ratio
16.7%
19.5%
17.3%
17.1%
Cost/Income ratio
56.0%
54.7%
54.4%
53.2%
ROE (adj.)
5.1%
5.2%
6.1%
6.6%
NPL ratio (gross)
3.5%
3.6%
3.9%
3.5%
NPL coverage
38.5%
41.9%
34.8%
34.8%
LIC/Avg. RWA
0.7%
0.8%
0.9%
0.8%
P/Pre-Provision Profit per Share
3.3
5.5
5.4
5.0
P/E (adj.)
11.2
18.5
16.7
14.2
P/BV
0.4
0.8
0.8
0.8
P/NAV
0.5
0.9
1.0
0.9
Dividend yield
0.0%
2.2%
3.7%
4.5%
PPPPS
4.69
5.20
6.16
6.66
EPS (adj.)
1.41
1.55
2.00
2.34
EPS (adj.) growth
-17.7%
10.3%
28.5%
17.4%
BVPS
30.22
31.88
35.63
36.72
NAVPS
29.32
30.77
34.73
35.82
DPS
0.00
0.75
1.25
1.50
Abs. Performances(12m,6m,3m,1m):
76.3%
24.8%
13.5%
4.6%
12 month High/low: EUR34.22 / 17.50
Avg. Daily nb traded shares:291,808,000
Main shareholders: Free float 71.0% (0.0%); Verwaltungsgesellschaft 29.0%;
Profile: Aareal Bank focuses on commercial real estate financing and software/consulting services for
commercial real estate clients. Aareal Bank was one of the first German mortgage banks that expanded
internationally and has thus one of the most diversified international portfolios with an international
proportion of almost 90%. ARL is among the best capitalized Euro banks with a fully loaded Basel III CT 1
ratio of 13.4% (Q4 2013). End of last year ARL announced the takeover of Corealcredit which is not
strategically but purely financially driven. In addition to its real estate financing activities Aareal Bank offers
various real estate related services like software development for the housing sector. Aareon, its most
important subsidiary, is an international consultant and system integrator and offers its services to
professional customers in the real estate sector. Currently some 8m dwellings and commercial units are
managed by almost 50,000 users at c. 2,000 clients using Aareon systems. For 2014 we expect EBT to
almost double yoy to EUR 389m due to the badwill of EUR 150m resulting from the Corealcredit takeover.
SWOT Analysis
Strengths
• Solid capitalization
Weaknesses
• Relatively dependent on wholesale funding
• Good asset quality
• High exposure to commercial real estate markets
• Strong management track record
Opportunities
• Extra dividend
Threats
• Euro crisis comes back
• Portfolio growth higher than expected
• Market environment deteriorates again
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: We recommend Accumulating the shares with a target price of EUR 36.00. ARL is on its
way to become a dividend stock as we expect ARL to significantly increase its payout ratio in the coming
years; an extra dividend for 2015 is quite likely in our view as ARL needs to actively manage its capital if it
want to reach its 12% pretax ROE target.
titre
35
30
25
22/05/14 Dividend Payment
2013
22/05/14 Ex Dividend Date
2013
21/05/14 AGM
2013
20
15
10
5
Mar 11
Target Price: EUR 36.00
AAREAL BANK SMALL & MID CAPS SELECTION
Analyst(s)
Philipp Häßler, CFA
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+49 69 58997 414
Equinet Bank
[email protected]
Jun 14
Source : Factset
17
Spain
SMALL & MID CAPS SELECTION
EUR 2.62
Hold
AB-BIOTICS
ABBO.MC/ABB SM
Market capitalisation: EUR 25m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.80 / 1.33
12/12
3.1
-2.0
nm
-2.6
nm
-1.8
-1.7
-2.0
-0.8
-0.1
0.4
nm
0.0%
0.0
2.6
4.3
nm
nm
nm
1.8
-29.3%
0.0%
-0.18
-chg
1.20
0.00
63.8%
12/13
2.2
-1.4
nm
-2.2
nm
-1.8
-1.8
-1.3
1.1
0.1
-0.8
nm
46.2%
3.2
3.4
7.5
nm
nm
nm
2.2
-15.3%
0.0%
-0.19
-chg
1.04
0.00
54.1%
12/14e
12/15e
4.1
5.5
-0.7
0.4
nm
7.4%
-1.3
-0.2
nm
nm
-0.9
-0.3
-0.9
-0.3
-0.9
-0.1
3.2
3.4
0.4
0.4
-4.6
8.3
nm
2.1
44.2%
5.6%
3.2
0.4
3.7
3.8
5.4
4.0
nm
54.9
nm
nm
nm
nm
2.8
2.9
-7.6%
0.2%
0.0%
0.0%
-0.10
-0.03
+chg
+chg
0.94
0.91
0.00
0.00
-6.4%
-14.1%
Avg. Daily nb traded shares:0,000
Profile AB-BIOTICS is advancing in its growth based on strategic agreements to leverage its two business
areas: Functional Ingredients (probiotics) and personalised medicine (Genotyping). Positioned in growing
markets: functional ingredients market, particularly the segment of probiotics (which has been
showing double-digit growth over the last decade) and the personalised medicine market (by marketing
different types of Neurofarmagen). Following the agreement reached at the end of last year with the Danish
company, DuPont Nutrition & Health, to market AB-Life, we expect the company to announce new
agreements for probiotics soon.
SWOT Analysis
Strengths
• Management flexibility and limited investment due to a
new outlicensed model strategy
• Proven innovation capabilities
Weaknesses
• Small size & short experience
• Relevant partners in the main divisions (GlaxoSmithkline,
Almiral & Dupont)
• Market illiquidity
Opportunities
• Sustained growth of the probiotics market
Threats
• Potential loss of market exclusivity and future revenues
due to an inadequate patent protection policy
• Short term funding needs for the execution of its business
plan
• Shareholder dilution
• Positioned in the personalized medicine segmen
• Additional alliances within the pharmaceutical & food
industries
• Economies of scale in AB-Genotyping and AB-Functional
Ingredients
• Slow market penetration
• Entry of new competitors with greater resources
Main shareholders: Free float 41.7%; Founders & Advisors 41.4%; Employees 11.7%;
Almirall 5.1%;
Recommendation: We value the company via the sum of the parts method in EUR3.80/sh. The out-license
agreements with strategic partners for the probiotics business line (DuPont) improves the visibility of this
division. We expect the announcement of a new strategic partnership in the functional ingredients
division in order to back the company’s strategy.
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 3.80
titre
4.0
3.5
3.0
AB-BIOTICS SMALL & MID CAPS SELECTION
Analyst(s)
2.5
2.0
Ana Isabel González García CIIA
1.5
1.0
Mar 11
Source : Factset
18
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+34 91 436 78 09
BEKA Finance
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 13.76
Reduce
ACCELL GROUP
ACCG.AS/ACCEL NA
Market capitalisation: EUR 359m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR15.02 / 11.80
12/12
773
40.8
5.3%
32.5
4.2%
23.1
23.1
33.9
153
0.6
3.7
5.8
5.9%
0.7
1.4
0.7
13.8
17.3
13.9
1.3
12.3%
5.6%
0.96
-36.2%
10.39
0.75
-1.1%
12/13
12/14e
12/15e
849
885
913
45.6
52.2
56.4
5.4%
5.9%
6.2%
36.9
44.3
48.2
4.3%
5.0%
5.3%
19.0
28.5
31.8
22.4
29.1
32.4
33.8
31.5
39.4
193
181
156
0.8
0.7
0.6
4.2
3.5
2.8
3.9
5.1
6.1
6.5%
7.6%
8.3%
0.7
1.4
1.2
1.2
0.7
0.6
0.6
13.3
10.3
9.5
16.4
12.2
11.1
14.7
12.3
11.7
1.4
1.4
1.4
-7.8%
-1.1%
8.1%
4.0%
4.4%
4.7%
0.91
1.11
1.18
-5.0%
22.0%
5.5%
9.84
9.56
9.97
0.55
0.60
0.65
-3.1%
-3.0%
-4.4%
Avg. Daily nb traded shares:11,345
Main shareholders: Free float 70.5%; Darlin 7.0%; Delta Lloyd 6.6%;
Profile: Accell designs, assembles and markets bicycles, bicycle parts and fitness equipment. Its products
sell under mostly national brands. Accell distributes only to specialist retailers, forgoing the lower-end
markets supplied by general stores and hypermarkets. The largest supplier of bicycles in Europe, Accell is
the market leader in the Netherlands and has a top-three position in Germany. Bicycles represent 74% of
group sales, of which an estimated half in the Netherlands and Germany. In the spring of 2012, Accell is
acquired Raleigh Cycle, which adds significant shares in the US and the UK. Bicycle parts and
accessories generate a quarter of group sales, fitness equipment 3%. The company’s business model
hinges on the local positioning of its brands through design and marketing, and efficient distribution. Apart
from engineering improvements and design updates, top line performance is driven by the uptake of
electric bikes. The group has limited owned manufacturing capacity and procures most parts in Japan,
China and Taiwan. Capital intensity is concentrated in working capital much more than in fixed assets.
SWOT Analysis
Strengths
• Local positions in mid- and high-end bicycle markets,
leading specialist distribution networks
• Efficient design-assemble-market-distribute business
model
• Scale that allows in-house development for electric
bicycles
Weaknesses
• Dependency on Shimano and Bosch for crucial drive-train
parts
• Large exposure to mature markets
Opportunities
• Expansion of bicycle parts distribution
Threats
• Working capital is moving upstream from dealers to
assemblers
• New (electric) technology may shake up competitive
landscape
• International expansion through acquisition of local-forlocal distributors
• High-end bicycles and electric bikes are gaining share in
mature markets
ASR 5.8%; JH Langendoen 5.1%; De Engh 5.1%; Fidelity 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
21
22/05/14 Dividend Payment
20
2013
Recommendation: With the revenue mix improving through electric bicycles with a higher selling price,
Accell has attempted to offset the lack of volume growth and rising capital intensity. Exposure to mature
Dutch and German bicycle markets is counterbalanced by the rising importance of the bicycle parts
business. Margins that result from positioning and distribution, on a light asset base, should provide
decent cash flows from current operations, were it not for a high working capital intensity. 10x EV/EBITA
for the current year appears excessive in the light of business model issues, slow growth and high debt.
19
Target Price: EUR 11.00
18
17
16
15
14
Analyst(s)
13
12
11
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Gert Steens
SNS Securities
+312 0 5508639
[email protected]
Source : Factset
19
Italy
SMALL & MID CAPS SELECTION
EUR 9.35
Accumulate
ACEA
ACE.MI/ACE IM
Market capitalisation: EUR 1990m
Utilities
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR10.96 / 5.55
12/12
3,613
695
19.2%
294
8.1%
77.4
77.4
487
2,495
1.9
3.6
5.8
6.9%
1.0
0.8
1.0
5.1
12.1
12.5
0.8
-13.1%
6.6%
0.36
-10.0%
5.89
0.30
70.7%
12/13
12/14e
12/15e
3,571
3,529
3,535
766
792
812
21.5%
22.4%
23.0%
384
384
396
10.7%
10.9%
11.2%
182
136
143
182
136
143
576
555
570
2,468
2,485
2,465
1.8
1.7
1.6
3.2
3.1
3.0
13.4
7.1
7.3
8.8%
8.7%
8.9%
1.3
1.2
1.3
1.0
1.0
1.0
1.2
1.3
1.3
5.7
5.8
5.7
11.4
12.0
11.6
12.4
14.6
13.9
1.3
1.5
1.4
10.1%
3.2%
5.7%
4.5%
4.5%
4.7%
0.67
0.64
0.67
83.5%
-3.9%
4.7%
6.22
6.44
6.69
0.42
0.42
0.44
12.9%
1.4%
-12.3%
Avg. Daily nb traded shares:120,408
Main shareholders: Rome Council 51.0%; Free Float 24.2%; Francesco Gaetano Caltagirone 14.8%;
GdF-Suez 10.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
11
29/07/14 Results
10
2014H1
9
8
23/06/14 Ex Dividend Date
2013
26/05/14 Dividend Payment
2013
7
6
Profile: the company is involved in the management of water, environmental and energy services: integrated water
service management, the disposal and creation of energy from waste, the production, sale and distribution of
energy, the development of renewable sources, public and artistic lighting. Acea features a balanced portfolio of
mainly regulated businesses: around 80% of the group’s margins are generated by these activities, with little
exposure to the energy sector.
SWOT Analysis
Strengths
• Solid position in Central Italy
Weaknesses
• Very high exposure on the uncertain water business.
• Business structure that is giving a competitive advantage
in comparison to its peers (short in generation and on takegas contracts)
•or-pay
Network
leadership in the reference areas
• The Rome city council approved to dispose of 21% in
Acea, fuelling an overhang risk
Opportunities
• The plant revamping should boost margins in the coming
years
• Great room for efficiencies
Threats
• Execution risk of current projects and efficiency
achievements
• A sharp increase in interest rates, which may reduce the
appeal of the whole utilities sector
• Changes in the regulatory framework
• Photovoltaic sale should help debt reduction programme
Recommendation: the company has recently showed its 2014-2018 business plan, which is mainly focused on the
regulated activities, which generate around 80% of the company’s current EBITDA; the operative and organizational
efficiencies and the financial structure improvement. In particular, the company’s business plan is aimed at: a) boosting
earnings across all the business areas, with particular focus on the regulated businesses that contribute for ca. 80% of
consolidated EBITDA; b) selectively developing the businesses through careful management of capex; c) developing
operating and organisational efficiencies; d) improving the quality of the services offered to customers through the
expansion of communication channels, technological innovation and new billing processes; e) containing and reducing
working capital; f) maintaining a solid and competitive financial structure. Based on the aforementioned guidelines, the
company’s 2014-2018 business plan points to the following targets: Capex EUR 2.4bn related to the need to modernise
grids and plants and improve the profitability; EBITDA CAGR of 5.2%; Pre-tax ROIC in 2018 at 12.5%; Net invested
capital in 2018 at EUR 4,238m. On a divisional basis, Acea is pointing to the following targets: Water. The company is
pointing to consolidate its leadership in the Italian water market and to invest in modernisation of the network and in
improving water treatment. EBITDA CAGR: +5.3%; Networks. Acea is committed to develop energy efficiency projects
and to exploit new technologies. EBITDA CAGR: +1.1%; Energy. In this segment, Acea is one of the leading energy
retailers in Italy with around 13 TWh of electricity sold. EBITDA CAGR: 5.0%. The main focus is to improve the quality
of the services provided and the customer relationship; Waste. The goal is to boost Acea’s position to number 3 (it is
5th now) in the Italian market by volume of waste treated by 2018, producing around 600 GWh from WTE per year.
2013-2018 EBITDA CAGR: 16.0%. In this area, the growth strategy will focus on: a) upgrading energy recovery plant
facilities; b) consolidating Acea’s position by upgrading/building new plants; c) M&A opportunistic approach in other
regions in central and northern Italy. We confirm our positive stance on ACEA given the high potential of the company’s
portfolio.
5
Target Price: EUR 12.30
4
3
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Dario Michi
20
Banca Akros
+39 02 4344 4237
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 17.48
Hold
ACOMO
ARBN.AS/ACOMO NA
Market capitalisation: EUR 411m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR18.10 / 13.90
12/12
593
43.9
7.4%
41.1
6.9%
27.0
27.0
29.1
76.0
0.6
1.7
15.9
13.8%
2.0
1.9
0.7
9.1
9.7
12.0
2.7
11.8%
5.0%
1.16
0.5%
5.25
0.70
13.8%
12/13
584
43.7
7.5%
40.2
6.9%
27.4
27.4
31.7
76.5
0.6
1.8
17.2
13.3%
1.9
2.1
0.8
10.6
11.5
14.1
3.0
3.1%
4.4%
1.17
1.0%
5.61
0.77
5.7%
12/14e
12/15e
596
614
48.0
49.0
8.0%
8.0%
44.5
45.5
7.5%
7.4%
29.4
30.1
29.4
30.1
32.9
33.5
68.2
60.7
0.5
0.4
1.4
1.2
19.5
18.9
14.0%
14.1%
2.0
2.0
2.2
2.1
0.8
0.8
10.0
9.6
10.8
10.4
14.0
13.7
2.9
2.7
6.4%
6.5%
4.7%
4.7%
1.25
1.28
6.5%
2.1%
6.04
6.49
0.81
0.83
3.4%
-1.5%
Avg. Daily nb traded shares:9,571
Main shareholders: Free float 51.9%; Mont Cervin 15.8%; Red Wood Trust 10.7%;
Jan Plas 5.9%; Todlin 5.5%; Westerduin 5.2%; Mawer 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
19
19/05/14 Dividend Payment
18
2013
Profile: Amsterdam Commodities (Acomo) is a Netherlands-based group of companies operating
internationally in the trade and distribution of agricultural niche products. It is a trading house in spices, nuts,
dried fruits, tea and sunflower seeds and distributes a wide array of ingredients for the food industry.
SWOT Analysis
Strengths
• Diversified products portfolio reduces risk profile
Weaknesses
• Limited free cash flow after dividend payment
• Relatively stable operating performance
• Limited synergy potential from acquisitions
• Reputation for meeting contract terms
• Loyalty and expertise of traders
Opportunities
• Acquisitions add to EPS
Threats
• Political risks as most sourcing is in emerging markets
• Leverage limited market transparency of niche products
• Prolonged period of low prices and low volatility
• Benefit from commodity price volatility
• Management control challenge at head office when more
subsidiaries are added
• Competition from local companies in originating countries
• More focus on sustainability
Recommendation: We rate Acomo shares Hold with a target price of EUR 17.50. Our recommendation is
based on 1) Acomo’s solid track record based on contacts in origin countries, market intelligence and a loyal
client base. The company has proved its value as an inventory holder in times of scarcity and volatile
commodity prices. Earnings per share have grown strongly in the past 6 years. 2) The group is actively
looking for expansion through M&A, which has been a key share price trigger in recent years. Acomo has
paid relatively low multiples for acquisitions. Acomo aims to move into a new niche of €200m sales. 3) The
new CEO Erik Rietkerk also plans to focus more strongly on more activities in the existing chains like in the
sunflower seeds at this moment. 4) The new CEO has a focus on sustainability, which is a key growth
segment for its main clients. 5) We forecast limited EPS growth going forward although the sustainability
approach might give some acceleration through market share gains. Our EUR 17.5 target price is based on
a base scenario (DCF calculation), and does not incorporate acquisitions.
17
Target Price: EUR 17.50
16
15
14
13
12
Analyst(s)
11
10
9
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Gerard Rijk
SNS Securities
+ 31 (0)20 550 8572
[email protected]
Source : Factset
21
Italy
SMALL & MID CAPS SELECTION
EUR 17.38
Hold
ACOTEL
ACO.MI/ACO IM
Market capitalisation: EUR 72m
Telecommunications
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR25.35 / 16.85
12/12
101
1.1
1.1%
-3.2
nm
-5.5
-1.5
-1.1
-29.6
-0.5
-25.9
nm
-10.3%
-1.2
2.1
0.6
57.6
nm
nm
1.6
-4.0%
0.0%
-0.35
-chg
14.36
0.00
-12.9%
12/13
121
-2.3
nm
-6.8
nm
-8.9
-3.6
-4.2
-18.2
-0.4
7.8
6.0
-24.2%
-2.8
2.2
0.5
nm
nm
nm
1.8
-13.0%
0.0%
-0.86
-chg
10.87
0.00
-24.7%
12/14e
12/15e
142
146
4.6
8.0
3.2%
5.5%
0.3
3.8
0.2%
2.6%
-0.8
2.1
0.2
2.4
3.8
6.5
-20.1
-22.8
-0.4
-0.5
-4.4
-2.8
nm
nm
1.2%
14.8%
0.1
1.7
2.0
1.9
0.4
0.3
11.3
6.1
nm
12.9
nm
29.7
1.6
1.6
2.5%
3.8%
0.0%
0.0%
0.06
0.58
+chg
nm
10.69
11.19
0.00
0.00
-21.1%
-15.6%
Avg. Daily nb traded shares:2,720
Main shareholders: Clama 41.4%; Free float 37.2%; Claudio Carnevale 16.6%;
Intesa Sanpaolo 4.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
40
Profile: ACO is an Italian-based multinational operating in the information and communications technology (ITC)
industry. ACO operates in three business segments: Interactive (77% group sales in 2013), TLC (22% sales) and
NET (1% sales). The interactive division includes the traditional B2C services “digital entertainment” provided
through proprietary brands, “white label” services to mobile Cos and media and interactive advertising. The TLC
division includes a) Mobile VAS Technology (Jinny Software) for mobile operators; b) Mobile Comms – mobile tlc
services for end users provided by Noverca Italia Srl, and SMS information for corporate customers; c) Mobile
Virtual Network Enabler; d) MVN Aggregator. The NET division represents the potential growth engine, leveraging
on the booming markets of M2M, “internet of things”. The actual business of the unit is however still limited to the
legacy activities, ie security and tele-surveillance. The traditional VAS business is migrating to a new internet model,
and ACO is reengineering its B2C and B2B activities, is revamping its tlc operations, and launching new business in
the M2M space.
FY 2013 results. Q4 results were characterized by similar trends of the previous quarters, namely double-digit
revenue growth and negative EBITDA. On the positive, net cash slightly improved in the past three months, to EUR
18.2m; however cash burn was above EUR 11m in the full year. The top-line was driven by the TLC division, which
in turn reflects the full consolidation of Noverca. The interactive BU kept growing although at a slower pace than in
9m. The activities of the NET division are not generating meaningful revenues yet. The EBITDA was still at a small
loss in Q4; on the full year, the performance reflects the consolidation of 100% losses of Noverca; the higher
advertising expenses of Interactive (EUR 19.3m) and the costs to prepare the commercial offer of Acotel NET.
Outlook 2014: The company said in a note that: a) Acotel Interactive: Margins will benefit from the actions taken in
the previous year in new services, new geographies. b) Acotel TLC. Jinny software should provide good results,
taking into account the positive market response to the new products presented at the MWC. The prospects for the
telephone company, Nòverca, in 2014 are difficult to predict as “there is a clear need to find a partner capable of
obtaining adequate synergies with its core business in order to drive the commercial roll out and achieve a return on
the initiative”. c)
Acotel NET. ACO expects "to enter into agreements with major commercial partners to
proceed with the large-scale launch of operations”. The success of the latter initiatives and fixing the TLC business
can deeply change the P&L of the Co.
SWOT Analysis
Strengths
• Proprietary technological platform
• Established relationship with operators
• Financial independence
Opportunities
• New geographies
• New approach to interactive services
• The “Internet of things
Weaknesses
• Limited size
• Poor track record
• Limited financial communication
Threats
• Mobile VAS regulation
• Changing Usage Profile
• Changing Operators’ priorities
Recommendation: HOLD. We warn of a very uncertain S/T outlook; the perspectives of all the three divisions
seem to be very volatile. We suggest investors wait for more convincing evidence on new activities.
Target Price: EUR 20.00
35
30
ACOTEL SMALL & MID CAPS SELECTION
Analyst(s)
25
20
15
Mar 11
Source : Factset
22
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Andrea Devita, CFA
+39 02 4344 4031
Banca Akros
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 51.00
Hold
AEDIFICA
AOO.BR/AED BB
Market capitalisation: EUR 504m
Real Estate
EUR
06/12
34
26
76.1%
9
(20)
15
15
15.32
294
597
642
2.14
1.86
37.29
30.1%
42.23
4.4%
3.8%
24.6
23
1.3
294
48.3%
0.5%
06/14e
06/15e
40
44
EBITDA (m)
31
34
EBITDA margin
77.3%
78.2%
Portfolio Result (m)
7
11
Net Financial Result
(10)
(12)
Net Profit (reported)(m)
28
33
Net Profit (adj.)(m)
20
22
Funds From Operations
19.74
22.44
Net Debt (m)
330
360
Portfolio Value (m)
761
806
Enterprise Value (m)
834
864
EPS (adj.)
2.00
2.27
DPS
1.89
1.98
IFRS NAVPS
39.83
41.29
Premium/(discount)
28.0%
23.5%
EPRA NAVPS
41.91
41.91
Earnings adj. yield
3.9%
4.4%
Dividend yield
3.7%
3.9%
EV/EBITDA
27.0
25.3
P/E (adj.)
26
22
Int. cover(EBITDA/Fin.int)
3.3
2.9
Net debt/(cash) (m)
330
360
Net Debt/Total Assets
43.0%
44.3%
Abs. Performances(12m,6m,3m,1m):
-0.4%
2.0%
12 month High/low: EUR52.95 / 46.77
Avg. Daily nb traded shares:5,868
Main shareholders: Free float 88.2% (88.1%); Jubeal Fondation 6.4%; Wulfsdonck Invest. (via Finasucre) 5.5%;
Gross Rental Income (m)
06/13
36
27
75.9%
9
(9)
28
17
17.00
226
647
696
1.95
1.86
38.63
22.9%
42.07
3.8%
3.6%
25.4
24
3.1
226
34.7%
0.4%
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
54
52
50
48
46
44
Profile: Aedifica is a Belgian REIT whose strategy is driven by the ageing of the population and the return
to city centers. Real estate portfolio of EUR 739m on top of a development pipeline of EUR 129m: 48
Belgian senior houses (67% of EBIT), 864 apartments (21% of EBIT) of which 281 furnished ones and 6
hotels with 521 rooms (12% of EBIT). Considering a huge wave of acquisitions and commitments since the
capital increase of EUR 100m in December 2012, the debt ratio has climbed from 33% to 44.7% at the issue
of March 2014. In the middle of 2013, Aedifica made its first step in the rest home sector in Germany. Today
its German portfolio is made of five rest homes for a total value of EUR 36m. Aedifica has very ambitious
objectives in Germany (EUR 200m at long term). Acquisitions in senior housing in the Netherlands are not
planned for the short term. The inclusion of the stock since March 2013 in the “FTSE EPRA/NAREIT
Developed Europe Index” had helped to boost its price.
SWOT Analysis
Strengths
• 79% of EBITDA is triple net & inflation linked
• Average remaining length of leases is 19 years
• Development expertise offers competitive advantage
Weaknesses
• Limited net property yield offers small margin over
average cost of debt
• No organic growth potential of rents unless through
indexation
• Insufficient NOPAT of furnished apartments may lead to
impairments if conversion in unfurnished apartments
• Conservative valuation of apartments
Opportunities
• Operational leverage
• Ageing of population, privatisation of senior houses and
lack of public financing offer growth potential for the few
actors
•private
Start of
rotation of unfurnished apartments will make
clear that valuation is conservative
• 6% rise in Belgium population over next 7 yrs
Threats
• Regionalisation of taxation may imply a higher tax burden
from 2014 onwards
• Lasting of low inflation environment implying low
indexation of rents
• Poor economic environment weighing on occupancy rate
of furnished apartments
Recommendation: Aedifica is probably the best available inflation hedge in the Belgian REIT universe built
on a length of leases of 19 years, of which 79% of the EBIT is indexed (Belgian health index) on a secure
contractual basis (triple net). Because of the further weakening in the furnished apartments (occupancy rate
of 76.8%) Aedifica is renovating 9% of them while short term rentals will be avoided. The debt is totally
hedged. Both the senior houses and the apartments offer good capital gain potential. NAV exclusive IAS39
was EUR41.57 at the end of March 2014.
Target Price: EUR 50.00
42
40
38
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Jean-Marie Caucheteux
Bank Degroof
+32 2 287 99 20
[email protected]
23
Finland
SMALL & MID CAPS SELECTION
EUR 7.70
Reduce
AHLSTROM
AHL1V.HE/AHL1V FH
Market capitalisation: EUR 359m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR12.14 / 7.40
12/12
1,011
68.9
6.8%
16.5
1.6%
-21.9
-22.5
58.5
326
0.6
4.7
high
1.5%
0.2
1.0
0.8
12.0
49.9
nm
1.2
27.5%
4.8%
-0.48
+chg
11.37
0.63
-34.2%
12/13
12/14e
12/15e
1,015
1,018
1,068
64.6
70.4
94.6
6.4%
6.9%
8.9%
10.7
19.2
43.5
1.1%
1.9%
4.1%
-20.5
2.5
17.8
-18.5
11.1
17.8
61.3
68.1
85.5
292
269
275
0.9
0.8
0.8
4.5
3.8
2.9
high
high
high
1.9%
4.5%
6.2%
0.3
0.6
0.8
0.9
0.9
0.9
0.5
0.4
0.4
7.9
6.5
4.9
47.4
23.8
10.6
nm
32.5
20.2
1.2
1.1
1.1
-53.8%
3.4%
7.4%
3.9%
3.9%
3.9%
-0.40
0.24
0.38
+chg
+chg
61.1%
7.12
6.87
6.90
0.30
0.30
0.30
-15.7%
2.7%
-1.3%
Avg. Daily nb traded shares:21,658
Main shareholders: Free float 89.6%; Vimpu Intressenter Ab 10.4%; Antti Ahlström Perilliset Oy 10.0%;
Varma Mutual Pension Insurance Co 3.3%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Ahlstrom produces fibre based materials on rolls for industrial purposes. The products are used in
many applications, such as filters, medical gowns and drapes, diagnostics, wallcoverings, flooring and food
packaging. Ahlstrom is counted among the leading companies in each of its customer segments. Europe
accounts over 50% of the company's sales, North America for one quarter and the rest is accounted for by
South America, Asia Pacific and rest of the world.
SWOT Analysis
Strengths
• Strong market shares
Weaknesses
• Heavy dependence on Europe
• Global focus
• Weak position in the middle of the value chain
• Technological expertise
• Weak business visibility
• Concentrated ownership structure
Opportunities
• Streamlining of business structure after heavy M&A
activity
• Growth in Asia
Threats
• Failure to turn around focus units (Chirnside, Mundra,
Longkou)
• Volatile raw material prices
• Tapping megatrends relating to global resource scarcity,
emerging needs in healthcare, and urbanization
• Commercialisation of innovations
Recommendation: Ahlstrom's growth strategy relying strongly on pioneering products and global mega
trends is certainly an appealing story but, in order to gain the market's trust, Ahlstrom needs to
demonstrate improvement since the weak profitability history does support the story.
Notable non-recurring expenses arising from the rightsizing programme are likely to keep profits and
dividends lacklustre this year, which is why we think there is no hurry to buy the share. However, if the
company shows it is on track to deliver on its profitability target and if the market begins to price this in
during 2015, the share could offer plenty of upside in the medium term, even up to EUR 16 – but we are not
convinced of this yet.
titre
20
Target Price: EUR 7.20
18
16
AHLSTROM SMALL & MID CAPS SELECTION
Analyst(s)
14
12
10
8
6
Mar 11
Source : Factset
24
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Niclas Catani
+358 10 252 8780
Pohjola
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 10.16
Sell
AIXTRON
AIXG.DE/AIXA GR
Market capitalisation: EUR 1134m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR13.80 / 9.68
12/12
228
-118
nm
-132
nm
-145
-93.9
-139
-209
-0.4
1.8
50.9
-33.0%
-3.4
2.5
3.0
nm
nm
nm
1.9
-9.5%
0.0%
-0.93
-chg
4.66
0.00
-17.2%
12/13
12/14e
12/15e
183
218
287
-77.8
-1.7
26.2
nm
nm
9.1%
-95.7
-18.0
10.7
nm
nm
3.8%
-101
-15.2
10.8
-61.9
-15.2
10.8
-78.3
0.3
28.0
-306
-290
-298
-0.7
-0.6
-0.6
3.9
168
-11.4
nm
2.3
nm
-33.1%
-9.1%
5.3%
-3.4
-0.9
0.6
4.3
4.9
4.7
4.2
3.9
2.9
nm
nm
31.8
nm
nm
77.6
nm
nm
nm
2.3
2.5
2.5
-1.4%
-0.7%
0.8%
0.0%
0.0%
0.0%
-0.60
-0.14
0.10
+chg
+chg
+chg
4.52
4.04
4.13
0.00
0.00
0.00
3.5%
-19.1%
-11.4%
Avg. Daily nb traded shares:288,785
Profile: Aixtron AG is a leading developer and producer of so-called MOCVD (metal organic chemical
vapour deposition) reactors. With the help of this equipment, Aixtron’s customers can produce compound
semiconductors that have the ability to transform electric current into light and laser beams (LED/OLEDs).
Beyond this, AIXA tools can produce power electronic chips or specialised solar cells to mention further
examples. The main manufacturing site is located in Herzogenrath, near Aachen. 80% of Aixtron revenues
are generated in Asia. The company employs around 900 people, one third of them engineers.
SWOT Analysis
Strengths
• MOCVD duopoly with Veeco
Weaknesses
• Market share losses in MOCVD vs. main rival Veeco
• Rock-solid balance sheet without debt and c. EUR 2 cash
per share
• Business model with high entry barriers
• Cyclical business
Opportunities
• General/solid state lighting could emerge as the next
mega-trend for LEDs
• A stronger USD would support AIXA's operating margins
Threats
• Business visibility usually not beyond 3-6 months
• Potential of organic light emitting diodes (OLED)
• Technology changes
• Power electronics and future ALD applications
• Asian OLED players
• ALD products for classical semis with limited financial
performance so far
• Dependence on key personnel is probably high
Main shareholders: Free float 93.2%; Camma B.V. 6.8%; Allianz Global Investors 6.1%;
Generation Investment 5.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
28
29/07/14 Results
26
2014Q2
Recommendation: We see some positive signals from the underlying LED lighting demand and AIXA
should post increasing order soon, but has to win back lost market share terrain from its main rival Veeco in
this domain. AIXA’s OLED activities for TV production are still in an early stage. Despite the topic could
mean big business, its success is currently hard to assess. AIXA’s share price usually reacts very sensitive
to news flow and the speculation on an order recovery has kept valuation rich and short covering amplified
upward movements. We believe that risks are high and EV/sales’15e of c.3x is too expensive in our opinion.
We keep our ‘Sell’ rating and our PT of EUR 8.50
Target Price: EUR 8.50
24
22
20
18
16
AIXTRON SMALL & MID CAPS SELECTION
Analyst(s)
14
12
10
8
Mrz 11
Source : Factset
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Adrian Pehl, CFA
+49 69 58997 438
Equinet Bank
[email protected]
25
Finland
SMALL & MID CAPS SELECTION
EUR 8.90
Accumulate
AKTIA
AKTAV.HE/AKTAV FH
Market capitalisation: EUR 593m
Banks
EUR
12/12
12/13
12/14e
12/15e
Total Revenue (m)
218
224
217
222
Pre-Provision Profit (PPP) (m)
63.5
66.6
70.0
79.5
Loan Impairment Charge (m)
-8.2
-2.8
-3.8
-4.9
Operating profit (OP) (m)
55.3
63.8
66.2
74.6
Earnings before tax (m)
65.0
63.8
66.2
74.6
Net profit (reported) (m)
49.2
50.8
52.7
59.4
Net profit (adj.) (m)
39.5
50.8
52.7
59.4
Shareholders equity (m)
593
577
603
630
Tier 1 Ratio
12.1%
13.8%
13.7%
14.3%
Cost/Income ratio
70.8%
70.3%
67.7%
64.2%
ROE (adj.)
6.7%
8.8%
8.7%
9.4%
NPL ratio (gross)
0.9%
1.0%
0.9%
0.9%
NPL coverage
73.1%
73.1%
73.1%
73.1%
LIC/Avg. RWA
0.2%
0.1%
0.1%
0.1%
P/Pre-Provision Profit per Share
6.1
8.1
8.5
7.5
P/E (adj.)
9.8
10.6
11.2
10.0
P/BV
0.7
0.9
1.0
0.9
P/NAV
0.7
0.9
1.0
0.9
Dividend yield
8.6%
4.7%
5.6%
6.2%
PPPPS
0.95
1.00
1.05
1.19
EPS (adj.)
0.59
0.76
0.79
0.89
EPS (adj.) growth
8.2%
29.4%
3.8%
12.7%
BVPS
8.85
8.67
9.06
9.46
NAVPS
8.85
8.67
9.06
9.46
DPS
0.50
0.42
0.50
0.55
Abs. Performances(12m,6m,3m,1m):
28.8%
10.8%
0.6%
1.1%
12 month High/low: EUR9.70 / 6.60
Avg. Daily nb traded shares:7,674,000
Main shareholders: Free float 70.0%; Tre Smeder Foundation 10.5%; Elinkorkolaitos Hereditas 10.0%;
Pension Insurance Company Veritas 9.2%;
Profile: Aktia is a Finnish bank with a strong focus on household clients, especially in mortgages. It offers a
wide range of banking, asset management, insurance and real estate services. Aktia operates mainly in the
Helsinki region, Finnish coastal areas and growth centres. It has about 350,000 customers who are served
via 60 branch offices. With its partners, savings banks and local co-operative banks, Aktia operates an
extensive network of about 430 branch offices for certain financial services.
SWOT Analysis
Strengths
• Stable underlying market
• Strong solvency position, high dividend
• Very low balance sheet risks (NPL clearly below 1%)
Weaknesses
• Tightening of banking regulation eating into business
profitability
• Limited growth opportunities due to the strict focus on
Finnish retail banking
• More sensitive to the interest rate environment than
most Nordic banks
• Loyal customer base
Opportunities
• Cost savings measures could improve ROE
Threats
• Cooling down of the Finnish housing market
• Potential for a significant capital repayment
• Increasing competition in the field of Finnish mortgages
• Further strengthening position in asset management
business
• European sovereign debt problems affect development in
the sector as a whole
Recommendation: We see Aktia as an attractive low-risk bet that provides a high dividend yield. The bank's
growth prospects are fairly modest, but cost cutting measures will boost both earnings and ROE in 2015. In
addition, Aktia has potential for a significant capital repayment once the Finnish FSA approves Aktia's IRBA
application. Considering the stable business outlook, the earnings prospects and the very low balance sheet
risks (NPL only 0.7% of loan portfolio), we regard Aktia's P/B 1.0 valuation level as attractive.
All share prices at 19/05/14.
Target Price: EUR 10.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
10
AKTIA SMALL & MID CAPS SELECTION
Analyst(s)
9
8
7
Antti Saari
6
5
4
Mar 11
Source : Factset
26
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4359
Pohjola
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 11.78
Buy
ALMIRALL
ALM.MC/ALM SM
Market capitalisation: EUR 2037m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR12.99 / 8.69
12/12
683
124
18.2%
56.0
8.2%
76.4
77.8
147
-0.1
0.0
0.0
27.7
7.1%
0.8
1.7
1.9
10.7
23.6
16.3
1.4
8.6%
2.4%
0.46
-22.5%
5.42
0.18
22.3%
12/13
12/14e
12/15e
693
824
915
85.1
133
234
12.3%
16.2%
25.6%
15.7
59.2
158
2.3%
7.2%
17.3%
-33.7
61.1
136
31.0
61.1
136
136
135
211
244
232
92.1
0.3
0.2
0.1
2.9
1.7
0.4
17.5
7.0
11.3
1.4%
5.5%
15.1%
0.2
0.8
2.2
2.1
2.2
2.1
3.4
2.8
2.4
27.5
17.4
9.3
nm
39.2
13.8
nm
33.3
15.0
2.3
2.1
1.9
-8.2%
3.9%
7.9%
nm
1.1%
2.3%
0.18
0.35
0.78
-60.7%
97.3%
122.0%
5.14
5.56
6.22
-0.07
0.12
0.27
5.6%
-6.0%
10.1%
Avg. Daily nb traded shares:290,175
Main shareholders: Founders & BoD 66.7%; Free float 28.4%; Wellington Management Co. 5.0%;
Profile: Almirall is the leading domestic integrated pharmaceutical, with a diversified product portfolio
specialised on high growth potential therapeutic areas (respiratory, central nervous system, dermatology and
digestive illnesses). Its local leadership places the company as a strategic partner for large industry peers.
The company has focussed on the respiratory area (asthma and COPD), the gastrointestinal, the autoimmune and the dermatology areas as the main growth pillars. Two products of its respiratory pipeline
stand out Eklira (aclidinium bromide), approved mid 2012 in the US and EU, and its LAMA/LABA
combination (EU approval expected in Q4’14e) and the US (2015). Besides the company has
presented Phase II results of its OD-LABA 100977 (with an excellent efficacy profile vs. other
competitors’ drugs). This data should trigger an out-license agreement for the new molecule (ex-US).
On the other hand, linaclotide, first in class in IBS-c on which Almirall holds the pan-European rights,
has been launched in Europe mid 2013. The commercialisation of the new products, together with the
restructuration program implemented in Spain should support mid-term growth, while improving the
consolidated operating margins.
SWOT Analysis
Strengths
• 2nd LAMA in the market in the US until 2015e
Weaknesses
• Highly regulated sector.
• Potential 3rdLAMA+LABA to reach the market
• Still high concentration in Spain.
• Diversified product portfolio.
• Rivaroxaban’s slow market penetration
• Solid balance sheet (Cash positive) and recurrent cash
flow generation.
Opportunities
• Gearing on its respiratory and gastro-intestinal franchises
• Strong commercial investment in 2013
• Short/mid term product portfolio renovation.
• Competition from generic drugs.
• Abediterol’s (OD-LABA) out-license
• Possible failure of R&D efforts
• Increase of its geographic diversification
• Possible delays in authorisation processes, limiting the
group’s ability to gain market share
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Almirall)
PRICE (SHORT & LONG AVERAGE)
titre
13
12
28/07/14
11
Results
2014Q2
Threats
• Domestic regulatory pressures
Recommendation: We rate the company Buy with a target price of EUR 15.4/share (including AB in COPD
and linaclotide in IBS-c, and the risk adjusted AB+formoterol combination (85% approval probability) as well
as the dermatological pipeline. The new compounds should help to keep mid term double digit growths in
sales and net profit. Newsflow should concentrate in 2H 2014 (LAMA/LABA FDA meeting in September and
EU approval in mid Q4). Additionally, we expect the company to out-license its second respiratory molecule.
Target Price: EUR 15.40
10
9
8
7
Analyst(s)
6
5
4
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Ana Isabel González García CIIA
BEKA Finance
+34 91 436 78 09
[email protected]
Source : Factset
27
France
SMALL & MID CAPS SELECTION
EUR 36.00
Reduce
ALTEN
LTEN.PA/ATE FP
Market capitalisation: EUR 1178m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR.39 / .25
12/12
1 198
125
10,4%
116
9,7%
78,2
78,2
86,0
-58,6
-0,1
-0,5
nm
-11,0%
-1,2
2,1
0,6
6,2
6,6
11,0
1,9
7,1%
2,8%
2,39
22,5%
13,64
1,00
22,9%
12/13e
12/14e
12/15e
1 216
1 358
1 378
124
132
139
10,2%
9,7%
10,1%
111
125
132
9,1%
9,2%
9,6%
73,6
83,3
87,5
80,4
83,3
87,5
85,8
88,1
93,1
-91,7
-91,9
-123
-0,2
-0,2
-0,2
-0,7
-0,7
-0,9
nm
nm
nm
-10,1%
-10,7%
-11,1%
-1,1
-1,2
-1,2
2,6
2,6
2,4
0,8
0,8
0,7
7,8
8,0
7,4
8,7
8,4
7,8
13,4
14,2
13,5
2,2
2,2
2,1
6,6%
3,5%
6,1%
3,5%
3,5%
3,5%
2,46
2,54
2,67
2,9%
3,6%
5,1%
14,73
16,02
17,45
1,25
1,25
1,25
10,9%
0,9%
-3,8%
Avg. Daily nb traded shares:28405,000
Main shareholders: Free float 6.0% (5.8%); Founders 2.4% (3.6%); FMR 0.6% (0.5%);
International Value Advisers LLC 0.4% (0.3%); Harris Associated Ltd 0.3%; Treasury Stock 0.1% (0.0%); FCPE
Alten 0.1%; Managers 0.1%;
All share prices at 19/05/14.
Profile: High technology consulting company with a large R&D component which generated sales of
EUR1,216m in 2013. The workforce totals 14,820 in 16 countries.
Breakdown of sales by country: France 62%, Germany 9%, Sweden 8%, Spain 5%, UK 4%, Other 12%.
Breakdown of sales by business sector: Aeronautics and Space 18.5%, Energy 20.2%, Automotive 14.5%,
Finance & Tertiary 14.5%, Telecoms 12.5%, Multimedia 5.9%, Other: 13.9%.
SWOT Analysis
STRENGTHS
 Among the best management/performances of
the sector (10.1% operating margin in 2012 vs
10.2% in 2010 and 2011)
 Positioning in a sector (outsourced R&D) with
high entry barriers due to existing listing process
 Player of reference in France which helps listings
 Healthy balance sheet: EUR80m FCF in 2012 /
net cash position of EUR58.4m on 31/12/12
OPPORTUNITIES
 Currently benefiting from its leadership position
to gain market share
 Could take advantage of the fall in prices to
pursue acquisitions
WEAKNESSES
 High exposure to France (63% of sales),
where the context is uncertain and margins
lower.
 Still insufficient differentiation of services
(mainly for engineers)
 Difficulties in Spain: 2012 sales publication
showed some negative news regarding Spain,
which was rapidly assumed at a cost of
around EUR5m (however the margin on
Spain is not likely to increase before 2014 and
should remain at around 3-4% in 2013)
THREATS
 Need to change the business model to
develop fixed-price contract know-how, which
is likely to weigh on margins
 Uncertain context in France
Recommendation: The stock trades at 8.8x EBIT 2014e which is close to the historical valuation (9x). The
company indicated that we could expect acquisitions representing EUR80m of sales which provide a 2%
upside on the share price. However, the acquisition of GECI Engineering is expected to weigh on margins in
the short term.
Target Price: EUR 37,00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
40
29/07/14 Trading Update
2014Q2
35
18/06/14 AGM
30
25
20
15
mars 11
Source : Factset
28
juin 11
sept. 11
déc. 11
mars 12
juin 12
sept. 12
déc. 12
mars 13
juin 13
sept. 13
déc. 13
mars 14
juin 14
2013
ALTEN SMALL & MID CAPS SELECTION
Analyst(s)
Jean-Michel Köster
+33 1 45 96 77 17
CM - CIC Securities
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 7.42
Reduce
ALTRAN
ALTR.PA/ALT FP
Market capitalisation: EUR 1297m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.44 / 5.04
12/12
1,456
126
8.7%
111
7.6%
64.6
64.6
56.6
163
0.3
1.3
6.1
14.9%
1.8
1.9
0.7
8.0
9.1
12.9
1.7
0.2%
0.0%
0.45
+chg
3.29
0.00
25.8%
12/13
12/14e
12/15e
1,633
1,750
1,815
118
168
187
7.2%
9.6%
10.3%
105
157
175
6.4%
9.0%
9.7%
65.8
100
114
67.9
100
114
16.7
99.6
119
121
82.0
-14.1
0.2
0.1
0.0
1.0
0.5
-0.1
9.1
23.3
38.1
13.8%
15.0%
16.4%
1.7
1.8
1.6
1.9
2.0
1.8
0.8
0.8
0.7
10.5
8.2
6.8
11.8
8.8
7.3
16.4
12.9
11.3
1.7
1.7
1.5
-11.2%
3.0%
7.4%
0.0%
0.0%
0.0%
0.39
0.57
0.65
-12.9%
47.8%
13.9%
3.74
4.32
4.97
0.00
0.00
0.00
14.5%
1.7%
-8.3%
Avg. Daily nb traded shares:334,921
Profile: European leader in externalised R&D generating EUR1,633m sales in 2013. The workforce is
composed by more of 20,000 people in 11 countries.
Breakdown of sales by region: France 45%, Northern Europe 32%, Southern Europe 19%, Rest of World:
4%.
Breakdown by business sector: Aeronautics and Space 27%, Manufacturing 22%, Automotive 20%,
Telecom and Media 18%, Financial services and Public sector 11%, Other 20%.
SWOT Analysis
STRENGTHS
WEAKNESSES
 French market leader in the R&D outsourcing
sector
 A broad and diversified portfolio of expertise
with a supply-side policy
 Limited exposure to the banking sector in an
uncertain environment
 According to our estimates, low added value
projects excluding performance guarantees
account for 70 to 75% of the group's activities
 Aggressive price
competitive sector
policy
in
a moderately
 Rising earnings with much higher margins since
the sale of ADL and the Brazilian activities
OPPORTUNITIES
THREATS
 Capacity to improve its operating margin even
in a tough environment

 The recent cash flow generation may allow the
group to finance its next acquisitions without
weakening its balance sheet
Main shareholders: Free float 71.9% (68.5%); Altrafin 17.4% (19.6%); Harris Associates 4.4% (4.1%);
 IndustrieHansa integration in Germany
H. Martigny 3.2% (3.9%); A. Kniazeff 3.1% (3.9%);
 Use of offshoring
In 2013 the European macroeconomic
environment could still weigh on the R&D
outsourcing sector and could lead to industrial
projects being deferred or scaled back,
especially in France
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: The group has shown its ability to meet the expectations developed in the 2012-2015
strategic plan. The capacity to improve its margin to 11-12% has been confirmed in 2013 (11.3% in H2
2013) and the trend should be supported in 2014. Our recommendation was downgraded post Q1 2014
results when the stock was at EUR8 and our price target was defined on the basis of 9x EV/EBIT.
titre
10.0
29/07/14 Trading Update
9.0
Target Price: EUR 7.60
2014Q2
8.0
Analyst(s)
7.0
6.0
Sébastien Liagre
5.0
CM - CIC Securities
+33 1 45 96 90 34
[email protected]
4.0
3.0
2.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
29
Portugal
SMALL & MID CAPS SELECTION
EUR 2.27
Buy
ALTRI
ALSS.LS/ALTR PL
Market capitalisation: EUR 467m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.94 / 1.64
12/13e
577
147
25.5%
95.3
16.5%
54.1
54.1
106
564
2.4
3.8
5.6
8.2%
1.0
1.2
1.8
7.0
10.7
8.5
2.0
18.6%
0.9%
0.26
3.7%
1.14
0.02
16.1%
12/14e
12/15e
12/16e
536
552
558
140
141
148
26.1%
25.6%
26.5%
93.2
97.8
107
17.4%
17.7%
19.2%
45.6
51.3
60.8
45.6
51.3
60.8
92.4
95.0
102
496
429
352
1.8
1.3
0.9
3.5
3.0
2.4
4.9
5.7
7.1
8.3%
8.9%
10.0%
1.0
1.1
1.2
1.2
1.1
1.0
1.8
1.6
1.5
6.9
6.3
5.5
10.3
9.2
7.6
10.2
9.1
7.7
1.7
1.4
1.2
15.5%
15.1%
17.3%
0.9%
0.9%
0.9%
0.22
0.25
0.30
-15.7%
12.6%
18.4%
1.34
1.57
1.85
0.02
0.02
0.02
-12.5%
-16.7%
-5.5%
Avg. Daily nb traded shares:429,004
Main shareholders: Free float 43.0%; Management 23.0%; Ana Mendonça 15.0%;
UBS 10.0%;
Profile: As a pure pulp player Altri is exposed to the changes in its prices, which tend to be more volatile
than paper. However, given its location and the characteristics of its industrial infrastructure, it is one of the
most efficient players of the European industry. These enable Altri to produce above average operating
margins, providing the indispensable buffer to accommodate its high debt stock. In fact, the ability to
generate high cash flow outputs and the fact that there is no major investment plans in the radar screen, are
the two major assets of the investment case for the company. We argue that this will provide, over the next
years, a gradual erosion of the debt stock and the consequent higher appropriation of the company’s value
from creditors to shareholders. The main risk is the rate of delivery of the deleveraging process, which is
totally dependent on the evolution of pulp prices.
SWOT Analysis
Strengths
• Celbi (highly efficient pulp mill)
Weaknesses
• Focus on the pulp business
• Geographic localization vs. Brazilian pulp players
• Above average leverage ratios
• Pulp feedstock (eucalyptus globulus)
• Cyclical nature of the pulp business
• Cost efficiency oriented management
Opportunities
• Pulp production expansion plans
Threats
• Lower BHKP prices
• Biomass business
• Higher wood prices
• Higher growth rates of short fibre pulp consumption in
the world
• Consolidation opportunities
• Competition from LatAm producers
• Economic slowdown
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: We continue to highlight the company’s strong cash flow generation profile, standing at
the top of PSI20 members when adjusted by the share price. The decrease in net debt going forward (with
no expansion plans on sight) should at least sustain the share price even at current EV values.
titre
3.0
Target Price: EUR 2.80
2.8
2.6
2.4
2.2
2.0
Analyst(s)
1.8
1.6
1.4
1.2
1.0
0.8
mar 11
Source : Factset
30
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Carlos Jesus
Artur Amaro
Caixa-Banco de Investimento
+351 21 389 6812
+351 213 89 6822
[email protected]
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 4.44
Accumulate
AMPLIFON
AMPF.MI/AMP IM
Market capitalisation: EUR 993m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR4.89 / 3.59
12/12
847
145
17.1%
97.9
11.6%
43.1
52.8
90.8
306
0.7
2.1
5.7
7.0%
0.9
1.4
1.4
8.2
12.1
18.7
2.0
5.8%
1.1%
0.20
0.4%
1.92
0.04
11.8%
12/13
12/14e
12/15e
829
855
887
117
131
142
14.2%
15.3%
16.0%
68.5
80.5
91.0
8.3%
9.4%
10.3%
12.8
37.6
44.5
18.3
47.3
54.2
63.0
88.0
95.6
275
233
178
0.7
0.6
0.4
2.3
1.8
1.3
3.9
5.5
6.0
3.2%
6.7%
7.8%
0.4
0.9
1.1
1.6
1.7
1.7
1.5
1.5
1.4
10.4
9.7
8.5
17.8
15.7
13.3
nm
32.1
27.0
2.4
2.5
2.3
4.8%
5.5%
7.2%
1.0%
1.0%
1.1%
0.06
0.14
0.16
-70.1%
130.8%
19.0%
1.71
1.80
1.91
0.04
0.04
0.05
15.3%
-1.2%
-1.0%
Avg. Daily nb traded shares:250,094
Main shareholders: Ampliter N.V. 54.8%; Free float 45.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
5.0
4.8
4.6
4.4
4.2
Profile: Established in 1950, Amplifon (AMP) is an Italian multinational company which operates in the distribution of
hearing systems (hearing aids and related services) and their fitting and personalisation to the needs of clients with hearing
impairment. It is the world-wide leader with 9% of global market share. It is active in 20 countries (Italy, the Netherlands,
France, Germany, the UK and Ireland, Switzerland, Spain, Portugal, Belgium, Luxembourg, Hungary, Turkey, Poland,
Egypt, USA, Canada, Australia, New Zealand and India) through a network of over 3,200 points of sale and 2,200 service
centres.
SWOT Analysis
Strengths
• World-wide leader in the highly fragmented hearing aid
retail market
• High brand recognition and good geographical
diversification
• Strong operational leverage thanks to high purchase
power to suppliers
• Strong cash generation
Weaknesses
• USD exposure (about 18% of total sales), AUD exposure
(about 16.3% of total sales) and GBP exposure (about 4.7%
ofSudden
total sales)
•
changes in the health regulation
Opportunities
• Global presence in a growing market due to: 1) ageing
population£pv£ 2) acoustic pollution£pv£ 3) even higher
prevalence
by modern
•
Improvingdriven
adoption
rates aslifestyle
stigma attached to hearing
aids wears off
Threats
• Weakness in the economic scenario entails a strong
slowdown in the consumption trend of ageing population
• Evolution of Hearing Aids market from Medical to Retail
oriented due to deregulation led to growing importance of
traditional
marketing
•
Price pressure
from tools
optical chains, venture capital,
traditional competitors moving abroad
• Potential delay in increasing the size of its local
subsidiaries in some historical countries (such as France,
Germany, in order to maximize profitability
Q1 14 sales (+1.9% Y/Y) confirmed the expected recovery in Europe and the continuous positive momentum in the
USA and APAC. Q1 14 profitability was decidedly better than expected: Q1 14 EBITDA grew by 5.0% Y/Y at EUR
18.6m. This improvement was achieved thanks to the sales recovery in several European countries and to the
reorganisation processes in 2013.
M&A activity speed-up: the group strengthened its international presence through several operations in the last
few months: 1) entrance in the Israeli market by acquiring 60% of MedOrt; 2) acquisition of the retail chain retail
chain owned by Audika in Italy; 3) increased the stake in Amplifon Poland from 49% to 63%; 4) network expansion
in Germany (5 shops), France (4 shops opened + 4 recently acquired in April), Iberia (2 new openings), Turkey (2
shops acquired) and Hungary (1 shop opened). In our opinion, these acquisitions point out that the management is
back to focus on the M&A activity, which was an important growth driver in the past. We believe that the group will
continue a more aggressive M&A activities also in the coming months both in Europe and in new markets.
Sales and profitability recovery expected in 2014: the management said that Q2 14 should confirm the positive
sales and profitability trends recorded in Q1 14. after a difficult 2013, we reckon that the group could record a
recovery both in sales and profitability in 2014. Indeed, we expect all the macro geographic areas (Europe, USA
and APAC) to contribute positively to the group’s turnover growth.
Recommendation: based on the foregoing indications, we confirm our Accumulate recommendation and our
Target price of EUR 5.50 per share (WACC 7.2% and perpetual growth 1.5%).
4.0
Target Price: EUR 5.50
3.8
3.6
3.4
3.2
3.0
2.8
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Paola Saglietti
Banca Akros
+39 02 4344 4287
[email protected]
31
Italy
SMALL & MID CAPS SELECTION
EUR 7.62
Buy
ANSALDO STS
STS.MI/STS IM
Market capitalisation: EUR 1372m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.52 / 6.42
12/12
1,248
138
11.0%
117
9.4%
75.7
75.7
96.5
-302
-0.6
-2.2
46.6
62.5%
6.9
4.9
0.5
4.4
5.2
13.3
2.1
4.9%
2.9%
0.47
-9.2%
2.93
0.18
4.0%
12/13
12/14e
12/15e
1,256
1,337
1,409
132
140
161
10.5%
10.5%
11.4%
118
127
148
9.4%
9.5%
10.5%
75.9
81.3
94.8
75.9
81.3
94.8
90.1
95.0
108
-260
-331
-355
-0.5
-0.6
-0.6
-2.0
-2.4
-2.2
41.9
41.6
37.2
57.2%
74.9%
74.4%
6.3
8.2
8.2
7.8
8.4
7.0
0.8
0.7
0.6
8.0
6.7
5.7
9.0
7.4
6.2
18.6
16.9
14.5
2.7
2.4
2.2
-0.5%
7.5%
4.2%
1.9%
2.1%
2.4%
0.42
0.45
0.53
-10.9%
7.2%
16.6%
2.87
3.17
3.54
0.15
0.16
0.18
-5.5%
-5.6%
1.1%
Avg. Daily nb traded shares:640,717
Main shareholders: Free float 55.8%; Finmeccanica 40.0%; Altrinsic GA LLC 2.1%;
Columbia Wanger AM 2.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
8.5
8.0
22/05/14 Dividend Payment
2013
19/05/14 Ex Dividend Date
2013
7.5
7.0
6.5
Profile: STS provides railway signalling (“Signalling”) and mass-transit transportation systems (driverless
metro systems); the signalling business generated ~58% of 2013 revenues, with a ~5% ROS, while the
transportation system business generated ~42% of revenues with a ~14% ROS.
STS boasts a ~EUR 5.6bn order backlog covering more than 4 years of activity. The company has a strong
international exposure: in 2013, it booked ~16% of its new orders in Italy, ~21% in the Rest Of Europe,
~10% in APAC, ~12% in North America and ~41% in the Rest of the World (mainly Asia).
STS is targeting a ~2.3/4.6% CAGR in the 2012-15 timeframe, virtually in line with the reference market’s
growth expectation (CAGR of ~3% until 2015). The company is facing stiff market competition in the field of
signalling and is working continuously at increasing the technological content of its solutions while reducing
its cost base.
SWOT Analysis
Strengths
• Strong positioning in the field of signalling
Weaknesses
• Price pressure on standardized signalling
• Growing presence in the mass-transport field
• Lack of a reliable rolling stock partner
• Huge backlog and outstanding visibility
• Downpayments are increasingly lower
Opportunities
• FNC may sell its 40% stake to someone else
Threats
• Chinese players are likely to become more and more
competitive in the medium term
• The resumption of the Libyan jobs is in doubt
• Operating efficiency can be improved further
• Huge business opportunities are looming in the MiddleEast and Russia
• Budget constraints in mature countries
Recommendation: The new order collection reached ~EUR 1.5bn in 2013 (flat Y/Y); revenues came in at
EUR 1.25bn (~+1% Y/Y), with a ~EUR 114m EBIT (flat Y/Y, at 9.4% of revenues); net profit was EUR 75m
(flat Y/Y). The net cash position came in at EUR 280m (EUR 302m as at the end of 2012).
STS aims at collecting new orders worth EUR 1.4/1.7bn in 2014; the company had a good start of the year
with an order collection of ~EUR 660m YTD; revenues are expected to come in at EUR 1.25/1.35bn with a
9.5% EBIT margin (implying a EUR 119/128m EBIT guidance); the net cash position should reach ~EUR
270/300m.
We believe that STS' fundamental fair value is ~EUR 7.0 based on a DCF approach; if we look at the
multiples of the Siemens/Invensys Rail deal, we can draw a higher "speculative" valuation of ~EUR 12; our
current target price (EUR 9.3) is calculated as the average of these two valuations.
6.0
Target Price: EUR 9.30
5.5
5.0
4.5
4.0
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
ANSALDO STS SMALL & MID CAPS SELECTION
Analyst(s)
Gabriele Gambarova
32
+39 02 43 444 289
Banca Akros
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 26.52
Accumulate
ARCADIS
ARDS.AS/ARCAD NA
Market capitalisation: EUR 1984m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR28.23 / 18.75
12/12
2,545
199
7.8%
152
6.0%
89.1
105
136
285
0.5
1.4
9.1
10.8%
1.4
1.5
0.6
7.4
9.7
12.2
2.4
5.1%
2.7%
1.47
22.6%
7.49
0.47
23.0%
12/13
12/14e
12/15e
2,516
2,590
2,722
197
229
242
7.8%
8.9%
8.9%
146
183
197
5.8%
7.1%
7.2%
91.4
122
133
111
134
145
148
168
178
218
106
9.0
0.4
0.2
0.0
1.1
0.5
0.0
10.9
16.3
20.0
10.7%
13.3%
14.6%
1.4
1.8
1.9
2.0
2.0
1.9
0.8
0.8
0.7
10.1
8.7
7.8
13.6
10.9
9.6
17.2
14.8
13.7
3.8
3.5
3.3
5.2%
7.9%
7.3%
2.1%
2.2%
2.4%
1.49
1.79
1.94
1.7%
19.9%
8.2%
6.68
7.49
7.99
0.57
0.59
0.64
11.5%
-1.5%
0.3%
Avg. Daily nb traded shares:100,720
Main shareholders: Free float 56.8%; St. Lovinklaan 20.6%; ASR Nederland 4.2%;
All share prices at 19/05/14.
Profile: Arcadis is a truly international engineering company and has operations in 4 divisions:
Infrastructure, Water, Environment and Buildings. For these segments ARCADIS delivers consulting,
engineering and project management services. The company is active worldwide and is ranked in the top 3
engineering companies of Europe and top 10 of the world. The largest part of revenues is derived from the
US (over 35%).
SWOT Analysis
Strengths
• Track record in top line growth and margin expansion by
positioning higher in the value chain
• A successful history of value adding acquisitions
Weaknesses
• A large part of the company’s cost base is inflexible
• Strong global presence
• Despite presence in growth segments, still sensitive to the
construction cycle
Opportunities
• Successful leader in consolidation within the fragmented
industry. Financial head room for more acquisitions
• Opportunities for further expansion, especially in Asia
(a.o. China)
• Benefiting from global trends like climate change and
urbanization
Threats
• Limited pricing power in a downturn because of
underutilization of staff
• Surprises in the restructuring process in Europe
• Low margins in Europe.
• Exchange rate fluctuations (USD, GBP, PLZ and BRL)
Recommendation: We believe that Arcadis is an excellently managed company that has successfully
focused its activities to fast growing, higher margin businesses. The restructuring in Europe seems well on
track and margins are moving accordingly. We have an Accumulate rating on the company as we believe
that it is well positioned for the economic upturn especially in the US, South America and Asia. In terms of
valuation it is not most cheap in the sector.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
Target Price: EUR 29.00
30
28
09/06/2014 Dividend Payment 2013
26
24
ARCADIS SMALL & MID CAPS SELECTION
Analyst(s)
22
20
18
16
14
Edwin de Jong
12
10
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+312 0 5508569
SNS Securities
[email protected]
Jun 14
Source : Factset
33
Netherlands
SMALL & MID CAPS SELECTION
EUR 30.20
Buy
ASM INTERNATIONAL
ASMI.AS/ASM NA
Market capitalisation: EUR 1917m
Technology Hardware & Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR31.83 / 22.64
12/12
1,418
141
9.9%
88.5
6.2%
7.1
7.1
50.0
-196
-0.2
-1.4
6.5
9.0%
0.8
3.6
2.1
21.5
34.2
nm
2.0
-1.7%
1.8%
0.13
-94.9%
13.44
0.50
12.8%
12/13
12/14e
12/15e
452
542
640
44.7
92.8
117
9.9%
17.1%
18.3%
44.7
68.3
88.3
9.9%
12.6%
13.8%
1,004
122
151
24.5
61.1
78.5
45.4
197
242
-310
-426
-577
-0.2
-0.3
-0.3
-6.9
-4.6
-4.9
4.2
nm
nm
21.2%
29.0%
33.4%
1.9
2.6
3.0
6.8
7.5
6.0
2.7
2.7
2.1
27.1
16.1
11.4
27.1
21.8
15.2
nm
31.4
24.4
1.1
1.2
1.1
1.1%
7.9%
9.8%
1.8%
1.8%
2.0%
0.39
0.96
1.24
198.6%
149.5%
28.4%
22.79
24.96
27.72
0.55
0.55
0.60
24.1%
16.1%
4.9%
Avg. Daily nb traded shares:150,081
Main shareholders: Free float 65.1%; Mr A. Del Prado 18.0%; Aberdeen 9.9%;
JP Morgan Chase 6.0%; Eminence Capital 5.0%; Capital 4.4%; Tokyo Electron 4.0%; Den Norges Bank 3.2%; MFS
3.0%;
All share prices at 19/05/14.
Profile: ASMI is a supplier of Front End semiconductor manufacturing equipment. The company targets the
CVD market (Epitaxy, Vertical Furnaces, PECVD), where it competes with AMAT, Tokyo Electron and
Novellus. The growth driver is the new ALD technology, which is being rapidly adopted because this
technology is needed at higher nodes. In this fast growing segment, ASMI is by far market leader.
Furthermore, ASMI has a 40% stake in ASMPT (with a separate listing in Hong Kong) which is the market
leader in the back-end assembly equipment market.
SWOT Analysis
Strengths
• Strong position in advanced technologies
Weaknesses
• Discount Front End activities ex value ASMPT stake
• Well exposed to Intel and TSMC
• Dependent on a limited number of products
• Participation in ASMPT is market leader in back-end
• Front-end still has to build track record of profitable
growth
Opportunities
• Bring profitability in line with competition
Threats
• Front-end competes with large players (AMAT, TEL)
• Capture growth in new applications for (PE) ALD
• High dependency on a few customers
• Expand in Memory and Foundry
• Highly cyclical nature chip industry
Recommendation: ASMI’s ALD technology is getting adopted rapidly and also in other parts of the front
end business, like epitaxy and vertical furnaces ASMI holds defendable niche market positions. We do not
exclude that ASMI will be involved in a new consolidation round in the front end, with the concentrated
positions that the potential AMAT/TEL combination and ASML now hold. ASMI’s valuation is extremely
undemanding.
Target Price: EUR 30.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
34
23/07/14 Results
32
2014Q2
30
28
06/06/14 Dividend Payment
2013
23/05/14 Ex Dividend Date
2013
21/05/14 AGM
2013
26
24
22
20
18
16
Mar 11
Source : Factset
34
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
ASM INTERNATIONAL SMALL & MID CAPS SELECTION
Analyst(s)
Edwin de Jong
+312 0 5508569
SNS Securities
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 7.26
Accumulate
ASTALDI
AST.MI/AST IM
Market capitalisation: EUR 715m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR7.91 / 5.13
12/12
2,457
264
10.8%
212
8.6%
74.1
74.1
127
626
1.1
2.4
3.1
14.8%
1.5
1.2
0.5
4.4
5.5
6.7
1.0
-33.7%
3.1%
0.75
4.1%
5.16
0.16
33.0%
12/13
12/14e
12/15e
2,520
2,776
3,133
324
346
369
12.9%
12.5%
11.8%
236
264
276
9.4%
9.5%
8.8%
79.9
100
115
77.8
100
115
171
187
213
798
888
839
1.3
1.3
1.1
2.5
2.6
2.3
3.1
3.6
4.4
15.1%
-28.0%
-69.5%
1.6
-2.9
1.5
1.3
1.2
0.6
0.6
0.5
4.9
4.7
4.3
6.7
6.2
5.8
9.7
7.1
6.3
1.3
1.1
1.0
-13.3%
-10.6%
10.1%
2.6%
3.5%
4.0%
0.79
1.02
1.15
5.0%
29.0%
13.2%
5.68
6.54
7.44
0.19
0.25
0.29
0.2%
3.0%
-6.7%
Avg. Daily nb traded shares:185,584
Profile: Astaldi is one of the main Italian contractors and concession operators; transport infrastructures,
water and renewable energy, civil and industrial building are the group’s key sectors. The group also
operates as a promoter of project finance initiatives and as a concession manager. Astaldi group was set up
in the 1920s by the Astaldi family and was listed on the Milan stock exchange in June 2002. The group’s
main shareholder is still the Astaldi family which owns 52.06% of the company.
In November 2012 Astaldi unveiled its 2013-2017 business plan which focuses on: concession projects,
development of new markets (namely Russia and Canada), development of large EPC contracts. The
company’s main targets are: a 9% 2012-2017 CAGR in revenues, a 12% CAGR in EBIT and a 18% CAGR
in net profit. It’s worth noting the high visibility the company has on its future revenues; particularly around
70% of revenues is expected to be secured in the next 5 years. One of the main issues on Astaldi is its
capex and investment plan, particularly on the existing and new concessions, and the related impact on the
company’s gross debt. Most of the concession projects the company invested in do not contribute, “line by
line”, to the company’s P&L (e.g. Brescia-Padova Highway) or are in an early stage of development (e.g.
Milan 5 subway line). Though the percentage of guarantee revenues on total revenues of Astaldi’s
concession projects is quite high, the equity payback period is, on average, 15 years.
The company is going to invest around EUR 400m in the concession business over the plan’s horizon. As a
result the company’s net debt related to the concession business is expected to increase from the present
EUR 330m to EUR 700m by 2017. The increase in the concession business’ net debt is expected to be
offset by the cash-flow generated by the construction sector. At the end of the plan’s horizon the company
expects EUR 630m net debt (EUR 800m at the end of 2013).
SWOT Analysis
Strengths
• Excellent track record in the execution of the business
plan
• Low exposure to risky countries
Weaknesses
• low geographical diversification
Opportunities
• investments in the concession business
Threats
• sizeable investments in the concession business in Italy
could increase the risk profile of the company..
• high exposure on the Italian market
Main shareholders: Astaldi family 52.1%; Free float 47.9%;
All share prices at 19/05/14.
• geographical diversification
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
8.0
7.5
7.0
6.5
6.0
Recommendation: the concession projects are the key issue for Astaldi; in this respect we do not expect
the visibility to improve in the short term since most of the projects are still not completed. However, the
stock is trading at cheap multiples and the stock price is an interesting entry point.
5.5
Target Price: EUR 9.00
5.0
4.5
4.0
3.5
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
ASTALDI SMALL & MID CAPS SELECTION
Analyst(s)
Francesco Sala
+39 02 4344 4240
Banca Akros
[email protected]
35
Finland
SMALL & MID CAPS SELECTION
EUR 7.00
Buy
ATRIA
ATRAV.HE/ATRAV FH
Market capitalisation: EUR 198m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.88 / 6.01
12/12
1,344
80.1
6.0%
30.3
2.3%
10.2
10.2
59.9
364
0.8
4.5
7.1
2.7%
0.4
0.6
0.4
6.7
17.6
17.3
0.4
23.1%
3.5%
0.36
+chg
15.26
0.22
5.7%
12/13
1,411
84.1
6.0%
19.7
1.4%
-4.3
-4.3
60.1
306
0.7
3.6
6.6
2.0%
0.3
0.7
0.4
6.2
26.2
nm
0.5
11.2%
3.1%
-0.15
-chg
14.56
0.22
-12.9%
12/14e
12/15e
1,443
1,476
74.7
97.3
5.2%
6.6%
24.7
47.3
1.7%
3.2%
7.1
27.0
7.1
27.0
57.2
77.2
333
314
0.8
0.7
4.5
3.2
5.5
8.1
2.4%
4.6%
0.4
0.7
0.7
0.6
0.4
0.3
7.0
5.2
21.2
10.7
27.9
7.3
0.5
0.5
-10.6%
13.0%
3.1%
6.9%
0.25
0.95
+chg
nm
14.59
15.33
0.22
0.48
-20.5%
-0.3%
Avg. Daily nb traded shares:9,631
Main shareholders: Free float 39.4%; Itikka osuuskunta 29.9%; Lihakunta 27.8%;
Mandatum Life 2.9%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: A supplier of meat products, Atria makes 60% of its sales in Finland, 30% in Sweden, and 10% in
Russia and the Baltic countries by selling products to customers in the retail, industrial and HoReCa sectors
and export markets. Atria's product mix consists of fresh meat, processed meat and convenience foods. The
company has own primary production in the Baltic countries.
SWOT Analysis
Strengths
• Market leader in Finland
Weaknesses
• Weak bargaining power (Finnish and Swedish retail
sectors are the most heavily concentrated in the world)
• Weak market position in the Moscow region
• Strong brands
• Well-managed product portfolio
• Two share series of which the voting ones are held by a
cooperation of Finnish contract producers
Opportunities
• Turnaround in Russia
Threats
• Failure to turn the Russian business around
• “Normalisation” of profitability after the raw material
spike
• Completed Saarioinen acquisition
• Private label taking more market share
• Declining supply of domestic meat raw material in Finland
• Russia's import ban on EU pork prolonging
Recommendation: Atria’s share price has come down to an attractive level. Our view for the next
12 months is positive, largely on the back of next year’s profit outlook, which is improved by the restructuring
cost savings in Russia (some EUR 6m) and the achievement of full synergies from the acquired Saarioinen
operations (some EUR 5m) from early 2015 onwards. If we assume that the measures yield the expected
results and the meat market gradually regains its balance from the negative effects of Russia's import ban
on EU pork, Atria’s valuation on our forecasts for 2015 is attractive. We see few positive triggers over the
next couple of quarters as the meat market will not recover from the disruption immediately and price hikes
will take time, but we believe these factors have been priced in already.
titre
9.0
Target Price: EUR 8.50
8.5
8.0
7.5
7.0
ATRIA SMALL & MID CAPS SELECTION
Analyst(s)
6.5
6.0
5.5
5.0
4.5
Mar 11
Source : Factset
36
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Niclas Catani
+358 10 252 8780
Pohjola
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 54.82
Accumulate
BARCO
BAR.BR/BAR BB
Market capitalisation: EUR 670m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR67.36 / 52.41
12/12
1,156
159
13.8%
97.6
8.4%
94.2
96.9
156
-104
-0.2
-0.7
nm
14.7%
1.4
1.4
0.5
3.8
6.2
7.4
1.3
18.7%
2.6%
7.34
9.0%
41.42
1.40
-17.9%
12/13
12/14e
12/15e
1,158
1,155
1,161
153
155
162
13.2%
13.4%
14.0%
69.6
71.9
74.4
6.0%
6.2%
6.4%
57.1
60.0
60.5
57.1
60.0
60.5
132
143
148
-101
-127
-171
-0.2
-0.2
-0.3
-0.7
-0.8
-1.1
70.9
nm
nm
11.4%
9.2%
10.3%
1.1
0.9
1.0
1.2
1.1
1.0
0.5
0.5
0.4
3.9
3.5
3.1
8.6
7.6
6.8
13.1
12.1
12.0
1.2
1.1
1.0
12.5%
6.8%
9.5%
2.7%
2.9%
3.1%
4.33
4.54
4.58
-41.1%
5.0%
0.8%
47.44
50.75
54.10
1.50
1.60
1.70
-0.5%
-0.3%
-3.3%
Avg. Daily nb traded shares:21,275
Profile: Barco is specialised in visualisation solutions for professional markets. The company is divided in 5
Business Units: Entertainment & Corporate (Digital Cinema, Rental & Staging, Coporate AV), Healthcare
(Diagnostic Imaging, Modalities, Surgical Imaging, Healthcare IT), Industrial & Govenrment (Research &
Design, Security & Surveillance, Utilities), Defense & Aerospace (Defense, Avionics, Air Traffic Control,
Training & Simulation) and Ventures (small start-ups or recently acquired companies developing with the
goal to be integrated in another BU). Barco's strategy is based on differentiation and R&D culture. It is active
all over the world: the Americas, Europe and APAC.
SWOT Analysis
Strengths
• Leader in high-end niche markets with growth potential
• Strong activity in growing markets
Weaknesses
• Short technology life-cycle resulting in short product life
cycle and the need to innovate.
• The USD depreciation: 45% of sales and 35% of costs in
USD related currencies.
• R&D excellence as main differentiator
• Broad patent portfolio
Opportunities
• Strong growth potential in several markets (AV,
Healthcare, etc)
• Further development in emerging markets
Threats
• Maturation nears in penetration Digital Cinema
• Positioning in upcoming technologies
• Technological opportunity misjudgement resulting in
missing key technology or investing in unprofitable sectors
• Price pressure from potential competitors
• Local production reducing exposure to currency
transactional risks
Main shareholders: Free float 74.5%; Gimv 9.8%; Treasury shares 5.8%;
Recommendation: Barco’s 1Q sales were a clear disappointment with a decrease of 12.3%. The increase
of the EBITDA margin was a soothing factor, especially since it is unusual for Barco, given such a decrease.
Therefore, we give management the benefit of the doubt and have only slightly decreased our estimates.
With a FY P/E of 12, the share is still not expensive; hence we stick to our Accumulate rating. Our Target
Price decreases from EUR 64.5 to EUR 64, our new DCF value.
Templeton Investment Counsel 5.0%; Franklin Templeton Inv 4.9%;
All share prices at 19/05/14.
Target Price: EUR 64.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
70
65
23/07/14 Results
2014H1
23/07/14 Results
2014H1
23/07/14 Results
2014H1
60
55
50
45
40
BARCO SMALL & MID CAPS SELECTION
Analyst(s)
Bart Jooris, CFA
+32 2 287 92 79
Bank Degroof
[email protected]
35
30
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
37
Finland
SMALL & MID CAPS SELECTION
EUR 34.67
Accumulate
BASWARE
BAS1V.HE/BAS1V FH
Market capitalisation: EUR 445m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR40.80 / 17.43
12/12
114
14.8
13.0%
8.3
7.3%
5.9
5.9
12.4
-24.0
-0.2
-1.6
nm
8.4%
1.1
3.1
2.0
15.6
27.8
44.1
2.6
-4.2%
1.1%
0.46
-39.4%
7.89
0.23
72.1%
12/13
123
10.4
8.4%
3.3
2.7%
2.6
2.6
9.7
-4.6
0.0
-0.4
nm
2.8%
0.4
3.4
2.5
30.1
93.7
nm
3.3
0.9%
0.7%
0.20
-55.8%
7.62
0.23
66.7%
12/14e
12/15e
132
143
17.8
26.2
13.5%
18.3%
10.6
19.0
8.0%
13.3%
8.5
15.0
8.5
15.0
15.7
22.2
-11.2
-21.7
-0.1
-0.2
-0.6
-0.8
nm
nm
9.1%
16.1%
1.2
2.1
4.8
4.7
3.3
2.9
24.2
16.1
40.6
22.1
nm
29.7
4.3
3.9
3.2%
4.0%
0.9%
1.6%
0.66
1.17
nm
75.7%
7.99
8.79
0.30
0.55
5.9%
2.2%
Avg. Daily nb traded shares:3,945
Main shareholders: Free float 70.7%; Mutual Pension Insurance Company Ilmarinen 11.3%; Sihvo Ilkka 6.8%;
Eräkangas Kirsi 6.2%;
All share prices at 19/05/14.
Profile: Basware develops enterprise purchase to pay (P2P), electronic purchase and travelling expense
management, and financial management solutions. The company has shown robust growth for a couple of
years, but recent quarters have been difficult for it due to changes in the sales mix. For the period between
2011 and 2015, the company targets 15–30% growth, with the EBIT margin improving towards the end of
the period, to 15–20%. Basware intends to become the leading e-invoice supplier in the world and to reach
the threshold of 150 million transactions by 2015.
SWOT Analysis
Strengths
• Able to produce good profits even under difficult
macroeconomic conditions
• Offers solutions that quickly lower customers' costs
• Competitive: often competes with small local companies
in areas that are not core fields for large ERP providers
Opportunities
• Co-operation with Mastercard
• Outside the Nordic region e-invoicing has only taken baby
steps
• Exploitation of market growth potential especially with
the SaaS service model
• Several small competitors (e-invoicing operators) are lowprofit businesses: buyer's market in acquisitions
• Investments needed in the distribution channel,
problematic indirect/external distribution channel
• Growth requires investment in business support services
Threats
• Large ERP providers increasing outlays in P2P, lowering
prices
• Fast growth may require more outlays in Basware's own
distribution channel, resulting in a weak margin
Recommendation: In the long term, Basware's investment case is appealing. The company operates in
growing markets where it has a strong position. Several international reviewers have rated Basware's
products among the best in the sector. Recent years have been tough for the company but we expect things
to turn out better in 2014 when the current SaaS business model should start scaling up. Co-operation with
Mastercard offers a unique new revenue source for Basware, with very limited additional costs. The sector’s
M&A activity has been very good in recent years (SAP/Ariba, Tungsten/OB10, Lexmark/Readsoft).
Target Price: EUR 42.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Weaknesses
• Weak profitability at the moment
titre
45
10/07/14 Results
40
30
25
Kimmo Stenvall
20
15
Mar 11
Source : Factset
38
2014Q2
BASWARE SMALL & MID CAPS SELECTION
Analyst(s)
35
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4561
Pohjola
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 40.35
Accumulate
BAYWA
BYWGa.DE/BYW6 GY
Market capitalisation: EUR 1394m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR41.55 / 35.27
12/12
10,531
307
2.9%
187
1.8%
96.7
87.2
142
1,462
1.3
4.8
4.8
5.1%
0.8
0.6
0.2
5.3
8.7
12.8
1.3
7.6%
2.0%
2.54
62.8%
25.01
0.65
3.9%
12/13
12/14e
12/15e
15,958
16,204
17,010
360
355
368
2.3%
2.2%
2.2%
222
235
245
1.4%
1.4%
1.4%
98.2
112
121
90.2
112
121
129
231
274
1,671
1,613
1,567
1.4
1.3
1.1
4.6
4.5
4.3
6.7
5.7
6.1
5.1%
5.4%
5.5%
0.8
0.8
0.9
0.6
0.7
0.7
0.1
0.1
0.1
5.5
6.2
6.1
9.0
9.3
9.2
14.4
12.4
11.6
1.4
1.4
1.3
27.2%
6.2%
5.5%
1.9%
2.0%
2.2%
2.62
3.25
3.49
3.1%
24.0%
7.4%
26.46
28.96
31.65
0.75
0.80
0.90
2.9%
-1.1%
0.9%
Avg. Daily nb traded shares:43,390
Profile: BayWa is one of the global Top 10 traders in grains/oilseeds with strong roots in German
origination. The acquisition of a majority in Turners&Growers in New Zealand boosted BayWa’s presence in
the fruit trading market. This primarily opens the door to Asia while the acquisition in the Southern
Hemisphere allows for fruit deliveries across the entire year. BayWa’s Renewable Energy Segment
leverages the company’s customer base and financial strength. BayWa also holds No2 spot in the German
Building Materials market, currently benefiting from strong construction activities. We expect BayWa to
further improve the leverage of its ample elevator capacity in a (mostly) contango-shaped world of grain
trading. Most recent acquisition of a Dutch grain trader is about to quintuple BayWa’s grain trading volume.
SWOT Analysis
Strengths
• Top 10 in global grain trading£pv£ Top European fertilizer
wholesaler
• No 2 in German Building Materials Market
Weaknesses
• Group profitability and Return on Equity below peers
• Structural weakness in Heating Oil Segment
• Global footprint in grains via acquisitions
• Solid balance sheet, Strong portfolio management
Opportunities
• Expanding acquired market position in Renewable Energy
by leveraging financial firepower and customer base
• Accelerated expansion into fast-growing Agri markets
• Consolidating market position in fragmented Building
Materials market
• Implementing value-based steering
Main shareholders: Free float 39.2% (0.0%); Bayerische Raiffeisen Beteiligungs AG 35.7%; Raiffeisen Agrar Invest GmbH 14.8%;
Threats
• Volatility in grain prices remains low
• Farm economics and, hence, farmer’s ability to invest
remain poor (weighs on Agro Trading / Equipment)
• Turnaround in Building Materials no sustainable
• Change in regulation in Renewables
RWA Verbundservice 10.3%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
42
40
07/08/14 Results
2014Q2
07/08/14 Results
2014Q2
Recommendation: Our PT of EUR 45 implies a target PE 14e of13.8x, recognizing around EUR 22 / share
property value of the company. We recommend to ACCUMULATE BayWa on the back of the company’s
ongoing transformation towards a global grain/oilseed trading house with strong roots in German origination.
Further growth in in fruit and visible growth in the renewables asset segment are additional key drivers for
BayWa’s performance.
38
36
Target Price: EUR 45.00
34
32
30
17/06/14 AGM
2013
17/06/14 AGM
2013
28
26
24
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
BAYWA SMALL & MID CAPS SELECTION
Analyst(s)
Michael Schaefer
+49 69 58997 419
Equinet Bank
[email protected]
39
Germany
SMALL & MID CAPS SELECTION
EUR 119.50
Buy
BB BIOTECH
BION.DE/BBZA GR
Market capitalisation: EUR 1416m
Financial Services
PROFIT & LOSS (CHFm)
BALANCE SHEET (CHFm)
NAV Constituents & Total NAV (CHFm)
Celgene
Actelion
Gilead
Vertex Pharmaceuticals
Novo Nordisk
Incyte
Isis Pharmaceuticals
NAV others component
Total Net Asset Value
Discount/(Premium) to NAV
Listed shareholdings on NAV
OTHER ITEMS (CHFm)
Total Market Cap
Dividend Yield (Gross)
PER SHARE DATA (CHF)
NAVPS
DPS
2012
2013
2014e
2015e
288.5
219.6
220.3
97.4
80.3
164.8
216.6
646.1
1,933.6
-20.9%
105.4%
289.1
302.4
259.3
105.4
18.3
242.7
335.1
955.4
2,507.7
-21.0%
101.0%
272.0
274.0
214.0
79.0
89.0
160.0
191.0
622.0
1,901.0
-15.0%
101.0%
272.0
274.0
214.0
79.0
89.0
160.0
191.0
622.0
1,901.0
-15.0%
101.0%
1,038.0
5.1%
1,671.6
4.8%
1,732.1
4.8%
1,732.1
4.8%
163.173
4.500
163.200
7.000
163.200
7.000
163.200
7.000
Profile: BB Biotech is a listed biotechnology investment company focussed on selecting the innovation
leaders in the field of new drug development
Source: Company, Equinet Bank estimates
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
160
140
SWOT Analysis
Strengths
• Core holdings
Weaknesses
• M&A opportunities not part fo investment criteria
• Experienced portfolio management team
• Some investment opportunities are unavailabkle to BB
Biotech
• Persistent discount to NAV
• Rigorous analytical approach
• Thorough due diligence process
Opportunities
• Medical breakthroughs in indications where BB Biotech
ahs exposure
• Underserved therapeutic areas
• Some investors may face restrictions to invest in BB
Biotech
Threats
• Clinical development risk
• Medical innovation may be driven by firms unsuitable as
investments
• Biotechnology sector eprformance
Recommendation: The shares are suited to investors who wish to participate in the potentially significant
upside associated with medical progress, but lack the extensive resources or expertise required to
determine the likely winners. Key features include core holdings that account for more than half of the
portfolio’s value in the aggregate and high exposure to the US biotechnology segment. Our rounded €156
price target is based on the assumption of a 17% discount to the NAV implied in consensus price targets
and an EUR/CHF rate of 0.82. For more detail please refer to our in-depth fundamental report published on
June 10, 2013.
Target Price: EUR 156.00
120
100
80
60
40
Mar 11
Source : Factset
40
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
BB BIOTECH SMALL & MID CAPS SELECTION
Analyst(s)
Marietta Miemietz CFA
+49-69-58997-439
Equinet Bank
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 12.02
Buy
BENETEAU
CHBE.PA/BEN FP
Market capitalisation: EUR 995m
Hotels, Travel & Tourism
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.18 / 7.99
08/12
831
54.9
6.6%
0.2
0.0%
-0.7
-0.7
49.6
-21.7
0.0
-0.4
38.8
-0.5%
0.0
1.7
1.0
14.8
nm
nm
1.4
-8.4%
0.0%
-0.01
-chg
5.94
0.00
50.3%
08/13
08/14e
08/15e
815
815
928
58.1
73.5
101
7.1%
9.0%
10.9%
1.0
13.2
33.5
0.1%
1.6%
3.6%
0.7
10.2
25.5
0.7
10.2
25.5
58.7
67.5
89.7
-9.9
-6.3
-8.1
0.0
0.0
0.0
-0.2
-0.1
-0.1
29.2
73.5
nm
0.1%
1.7%
4.3%
0.0
0.2
0.4
2.2
2.1
2.0
1.3
1.3
1.1
18.8
14.4
10.2
nm
80.2
30.9
nm
nm
38.2
0.7
0.9
0.9
-3.0%
-0.4%
1.7%
0.0%
0.8%
2.1%
0.01
0.13
0.31
+chg
nm
150.9%
13.00
13.00
13.00
0.00
0.10
0.25
-7.5%
3.9%
-2.6%
Avg. Daily nb traded shares:14,462
Main shareholders: B‚ri 21 (family holding) 54.3% (62.0%); Free float 43.5% (38.0%); Treasury stock 2.1% (0.0%);
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
15.0
Profile: Bénéteau has been building boats since 1884 and has almost 30% of global market share in sailing
boats. Today, pleasure boating (76% of sales, or 38% excluding Europe) accounts for 76% of the group’s
sales (Europe 62%; RoW 38%) and 86% of its earnings. The House division, 21% of sales (Mobile Homes
90%; Wooden-frame houses 10%), is a new division with a European leadership position in mobile homes.
SWOT Analysis
Strengths
• Established brand in prepared meats and delicatessen
products
• Network of 1,500 dealers worldwide
Weaknesses
• Challenger in motor boats with 2% of market
share with the target being >10% in 5 years
• Absent in >70’ segment of motor boats
• Recent industrial setup bringing productivity gains
• Challenger to become an international boating company
Opportunities
• Excellent financial situation could theoretically make
acquisitions possible in the Boats line
• Entry in motor boats in Brazil, US and China
Threats
• The number of rings available in French ports which slow
down market growth
• A boat activity dependent on purchasing power
• Opening up to top-of-the-range boats for clients
with its Prestige and Monte Carlo motorboat brand
• Increase in raw materials which are passed onto selling
prices but could curb growth
Recommendation: Usually negative, H1 2014 results are not significant due to the preponderance of
billings in H2. Underlying operating loss of EUR31m vs a loss of EUR40m, driven by renewed profitability for
the boats division. Hence, the net loss was less deep (-EUR18.1m vs -EUR24.5m). Management confirmed
the buoyant trend for leisure boat markets outside Europe and maintained its guidance. The habitat division
is streamlining and launching a new product. The Habitat division posted UOI at breakeven (vs EUR4.2m in
H1-2013). The division continues its three-pronged redeployment plan: 1) increased integration upstream; 2)
less cannibalisation between the two brands; and 3) streamlining the sales force and product line-up.
Management also announced a new product that is a cross between a mobile home and a tent and set to be
on offer for long-term rental as of September. The Boats division confirmed its annual earnings forecast,
despite lower-than-expected business, EUR20m below management’s expectations (notwithstanding 35%
growth in the US). This reflects tighter control of variable costs (margin improved 3pts vs 2013) and fixed
costs (down EUR3m vs 2013), despite postponed purchases in emerging markets, where clients have not
accepted the abrupt increase in prices (+20-30%).
Target Price: EUR 16.50
14.0
13.0
12.0
BÉNÉTEAU SMALL & MID CAPS SELECTION
Analyst(s)
11.0
10.0
9.0
8.0
7.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Francis Prêtre
+33 4 78 92 02 30
CM - CIC Securities
[email protected]
Source : Factset
41
Italy
SMALL & MID CAPS SELECTION
EUR 0.60
Accumulate
BENI STABILI
BNSI.MI/BNS IM
Market capitalisation: EUR 1149m
Real Estate
EUR
12/12
196
183
88.2%
(84)
(134)
(16)
47
49.93
2,217
4,051
3,086
0.02
0.02
0.86
(48.3%)
1.07
4.8%
4.9%
16.9
21
1.4
2,217
48.8%
10.4%
12/13
12/14e
12/15e
195
200
206
EBITDA (m)
175
180
186
EBITDA margin
85.5%
85.8%
85.9%
Portfolio Result (m)
(78)
3
4
Net Financial Result
(134)
(125)
(123)
Net Profit (reported)(m)
(4)
54
63
Net Profit (adj.)(m)
42
55
63
Funds From Operations
41.60
54.33
63.10
Net Debt (m)
2,164
2,162
2,140
Portfolio Value (m)
3,963
3,973
3,973
Enterprise Value (m)
3,117
3,325
3,304
EPS (adj.)
0.02
0.03
0.03
DPS
0.02
0.02
0.02
IFRS NAVPS
0.94
0.95
0.96
Premium/(discount)
(47.7%)
(36.7%)
(37.7%)
EPRA NAVPS
1.05
1.05
1.05
Earnings adj. yield
3.3%
4.5%
5.2%
Dividend yield
3.7%
3.7%
3.7%
EV/EBITDA
17.8
18.4
17.7
P/E (adj.)
25
22
19
Int. cover(EBITDA/Fin.int)
1.3
1.4
1.5
Net debt/(cash) (m)
2,164
2,162
2,140
Net Debt/Total Assets
46.7%
46.4%
45.9%
Abs. Performances(12m,6m,3m,1m):
16.5%
-0.5%
-6.0%
12 month High/low: EUR.66 / .46
Avg. Daily nb traded shares:3,445,347
Main shareholders: Fonciere des regions 52.5%; Free float 42.5%; Predica 5.0%;
Gross Rental Income (m)
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Beni Stabili is one of Italy’s leading property companies and has been listed since 1999. The Beni Stabili
business model is based on a long-term strategy. The management is focused on acquiring property portfolios at
competitive prices and manages these assets for a long period; during this period the investment portfolio is rented
to reliable tenants. Beni Stabili's business model shows a low exposure to the real estate cycle; the company's
income is protected during a property downturn by long lease terms, quality tenants and high occupancy rate. At the
end of 2013 Beni Stabili’s NNNAV, based on the market value of its properties, was EUR 0.955/sh on a fully diluted
basis.
SWOT Analysis
Strengths
• Reliable and quality tenants
Weaknesses
• No reversionary potential in the short-medium term
• Long term rental agreements
• High cost of debt
• 95% of Beni Stabili’s total debt is hedged
• Real estate prices in Italy are under pressure
Opportunities
• Consolidation in the sector
Threats
• Increase in the cost of debt
• Completion of large development projects in Milan
• Higher vacancy
• Change in SIIQ law
Recommendation: Beni Stabili portfolio is worth EUR 4.15bn with an average yield of 5.5% and is booked, on
average, at EUR 2,176 per sqm, a cheap valuation if we consider that 50% of the company’s portfolio is located in
Milan and Rome. The present 37% discount on NNNAV implies a valuation of around EUR 1,750 per sqm. In 2013
the company signed 27 closings for a gross selling price of EUR 134.1m (5.3% exit yield and 2.9% capital gain)
and 9 preliminaries for a gross selling price of EUR 37.8m (5.4% exit yield and 0.1% capital gain) without incurring
losses. At the end of 2013 Beni Stabili’s net debt was EUR 2.16bn.
The company’s loan-to-value ratio was 49.9% while 96.9% of Beni Stabili’s total debt is hedged with a weighted
average hedging duration of 3.6 years. The weighted average debt maturity was 3.78 years and theweighted cost
of debt was 4.56% in 2013 vs 4.62% in 2012%. In 2010 Beni Stabili managed to achieve the SIIQ status (Italian
REIT) which provides for a total tax exemption on rental fees.
titre
0.80
The company issued EUR 350m of senior unsecured notes (maturity in 2018 with a coupon of 4.125%) in mid
January sizeably lengthening its debt duration.
0.75
0.70
0.65
Valuation: we have valued Beni Stabili with a DCF model assuming a 6.83% WACC (5.0% cost of debt and 8.9%
cost of equity) and a 2% perpetual growth rate. Our valuation implies a P/NNNAV of 0.7x on a NNNAV per share of
EUR 0.955/sh. We confirm our Accumulate rating and target price of EUR 0.70/sh.
0.60
0.55
0.50
0.45
0.40
0.35
Target Price: EUR 0.70
0.30
0.25
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
Analyst(s)
Francesco Sala
42
Banca Akros
+39 02 4344 4240
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 11.62
Buy
BESI
BESI.AS/BESI NA
Market capitalisation: EUR 438m
Technology Hardware & Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR12.33 / 7.09
12/12
274
33.3
12.2%
20.8
7.6%
15.8
15.8
22.0
-79.5
-0.3
-2.4
12/13
254
31.7
12.5%
18.7
7.3%
15.9
15.9
25.0
-72.7
-0.3
-2.3
8.6%
0.7
0.8
0.5
4.1
6.6
13.8
0.8
10.5%
5.2%
0.42
-43.2%
7.05
0.30
53.4%
12/14e
292
50.6
17.3%
36.1
12.4%
30.8
30.8
40.4
-85.4
-0.3
-1.7
12/15e
336
65.7
19.6%
50.2
14.9%
42.6
42.6
55.1
-97.5
-0.3
-1.5
7.4%
13.9%
17.4%
0.6
1.2
0.2
1.2
1.8
1.6
0.9
1.2
1.0
7.4
7.0
5.2
12.5
9.8
6.8
19.4
14.2
10.3
1.2
1.5
1.4
0.8%
4.4%
4.3%
2.6%
2.6%
3.0%
0.42
0.82
1.12
0.6%
93.1%
37.7%
7.09
7.69
8.60
0.30
0.30
0.35
47.0%
29.7%
6.2%
Avg. Daily nb traded shares:41,331
Main shareholders: Free float 53.8%; TWE Beheer BV 13.9%; D. Lindenbergh 6.6% (6.3%);
Aviva 6.3% (6.6%); Darlin 5.9%; Project Holland 5.3%; J. van Caldenborgh 5.0%; Kempen Oranje Participaties
4.1%; Via Finis 3.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Besi is one of the leading players in the market for semiconductor back-end equipment. This means
that Besi makes machines for the assembly and packaging of chips. The company has a broad portfolio with
the main activities being equipment for die bonding, attach and molding. The acquisition of Esec in 2009 (at
highly attractive terms) has been a turning point in the company’s history, as it brought scale, leadership in
one of the key market segments (die bonding).
SWOT Analysis
Strengths
• One of the largest players in back-end equipment
Weaknesses
• High staff expenses
• Leadership in selected segments such as die bonding
• Weak after sales
• Focus on innovation (flip chip, advanced packaging)
• Market leader but still relatively low market share
• Highly fragmented dealership network
Opportunities
• Weakness of competition, M&A opportunities
Threats
• Rolling out the general Stern Universeel format
• New regulation
• Increasing oil prices
• Geographical expansion
• New regulation
• Improvement of public transport
Recommendation: While the most appealing technology shifts in semi equipment manufacturing are
usually captured by the front-end, we expect that the Back End will become more prominent. Form factor
is getting more and more important and Besi has a strong position in packages for smaller shaped chips
with its Flip Chip machines and also in the new growth segment Thermo Compression Bonders (TCB).
Besi’s share price has had a good run recently. But we believe that there is more to come due to the better
growth prospects.
Target Price: EUR 13.00
t i t re
13
12
11
10
BESI SMALL & MID CAPS SELECTION
Analyst(s)
9
8
7
6
Edwin de Jong
5
4
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+312 0 5508569
SNS Securities
[email protected]
Jun 14
Source : Factset
43
Netherlands
SMALL & MID CAPS SELECTION
EUR 8.49
Hold
BINCKBANK
BINCK.AS/BINCK NA
Market capitalisation: EUR 630m
Financial Services
EUR
12/12
12/13e
12/14e
12/15e
Total Revenue (m)
49.8
187
184
183
Pre-Provision Profit (PPP) (m)
15.9
38.3
35.6
14.1
Loan Impairment Charge (m)
Operating profit (OP) (m)
15.9
38.3
35.6
14.1
Earnings before tax (m)
15.8
38.3
35.6
14.1
Net profit (reported) (m)
11.1
29.1
30.5
14.3
Net profit (adj.) (m)
18.9
57.1
45.0
45.0
Shareholders equity (m)
420
402
355
355
Tier 1 Ratio
12.0%
13.1%
13.0%
0.0%
Cost/Income ratio
68.1%
80.1%
81.7%
93.4%
ROE (adj.)
4.5%
14.2%
12.7%
12.7%
NPL ratio (gross)
0.0%
0.0%
0.0%
0.0%
NPL coverage
0.0%
0.0%
0.0%
0.0%
LIC/Avg. RWA
P/Pre-Provision Profit per Share
28.5
14.9
17.7
44.6
P/E (adj.)
23.9
10.0
11.8
16.0
P/BV
1.1
1.4
1.8
1.8
P/NAV
1.7
2.3
3.6
nm
Dividend yield
1.5%
4.5%
4.2%
3.1%
PPPPS
0.22
0.52
0.48
0.19
EPS (adj.)
0.26
0.77
0.72
0.53
EPS (adj.) growth
-70.5%
196.2%
-6.4%
-26.5%
BVPS
0.00
5.43
5.12
0.03
NAVPS
3.67
3.36
2.39
-2.03
DPS
0.13
0.39
0.36
0.27
Abs. Performances(12m,6m,3m,1m):
19.4%
12.0%
3.1%
7.0%
12 month High/low: EUR8.78 / 6.23
Avg. Daily nb traded shares:147,565,000
Main shareholders: Free float 55.9%; Delta Lloyd N.V. 10.2%; Delta Lloyd Asset Management 9.4%;
Profile: BinckBank is an online broker targeting retail and professional clients, with activities in the
Netherlands, Belgium, France and Italy. The rationale behind the foundation of the online broker was to offer
private investors the same trading possibilities as professional investors at extremely low fees. Currently,
BinckBank has a dominant market share of approximately 50% with respect to transaction volume and the
number of brokerage accounts in the Netherlands.
SWOT Analysis
STRENGTHS
 Brand name
 Higher than average active clients
 Innovative
 Flexible infrastructure
OPPORTUNITIES
 Offering equity research and advice free of charge
in order to keep the level of transactions high
 Targeting new client segments
 Winning new BPO contracts
 Expansion into new geographies (Italy)
 Derivatives trading via TOM on Euronext platform
WEAKNESSES
 Dependency on Dutch market
 Integration risk
 Highly reliant on volatility levels
THREATS
 Price wars
 General exposure to economic climate and
market volumes
 Large banks in play for market share
 Operational deficiencies
 Financial transaction tax
Recommendation: We anticipate that BinckBank is facing several short term and long term triggers which
could have beneficial implications for the company. In particular, the growth of Professional Services is
moving in favour of BinckBank. Based on these expectations and an attractive valuation we rate the stock a
Buy with a target price of EUR 7.20.
Target Price: EUR 7.20
Oppenheimerfunds 5.8%; Navitas BV 5.1%; Boron Investments 5.1%;
All share prices at 20/05/14.
BINCKBANK SMALL & MID CAPS SELECTION
Analyst(s)
Lemer Salah
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
12
11
10
9
8
7
6
5
Mar 11
Source : Factset
44
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
'+312 0 5508516
SNS Securities
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 83.09
Hold
BIOTEST
BIOG_P.DE/BIO3 GR
Market capitalisation: EUR 1089m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR98.20 / 50.60
12/12
440
76.1
17.3%
44.7
10.1%
23.0
23.0
73.7
55.2
0.1
0.7
8.3
5.9%
0.6
1.3
1.6
9.2
15.6
25.0
1.6
5.2%
0.0%
1.97
23.1%
31.49
0.00
49.9%
12/13
12/14e
12/15e
501
552
606
85.6
92.8
116
17.1%
16.8%
19.1%
53.8
60.0
80.6
10.7%
10.9%
13.3%
32.0
39.9
55.0
32.0
39.9
55.0
86.4
107
123
-128
-151
-183
-0.3
-0.3
-0.3
-1.5
-1.6
-1.6
12.2
30.9
57.9
6.3%
6.9%
8.4%
0.6
0.7
0.8
1.5
1.7
1.5
1.8
1.8
1.6
10.4
10.9
8.5
16.5
16.8
12.2
29.6
27.5
19.9
2.1
2.2
2.0
-3.5%
4.5%
6.0%
0.0%
0.0%
0.6%
2.57
3.03
4.17
30.7%
17.8%
37.8%
36.97
37.51
41.11
0.00
0.00
0.50
23.2%
-4.5%
-4.2%
Avg. Daily nb traded shares:20,030
Profile: Biotest operates three business units: Therapy (c. 75% of sales) focuses on plasma-derived
proteins like IVIG, clotting factors and albumin; it also comprises a pipeline of therapeutic antibodies. Plasma
& Services (c. 22% of sales) comprises toll manufacturing of plasma proteins & the sale of blood plasma..
SWOT Analysis
Strengths
• Resilient plasma protein base business: high production
yields, double-digit EBIT margin
• Strong position in the lucrative niche of hyper-immune
globulins.
• Tregalizumab (BT-061) partnership with the leading
rheumatoid arthritis player, AbbVie
Weaknesses
• Currently under-represented in the lucrative US IVIG
market (entry as recently as Feb 2013).
• Modest size implies limited scope for economies of scale
with respect to the IVIG business, although we note
significant
incremental
towardsits
the
endin
of the
• Unlike peers,
Biotest iscapacity
not evaluating
IVIGs
Alzheimer’s disease, thus limiting the upside (but also the
risk).
Opportunities
• Bivigam, launched in the US in February, has US peak
sales potential of ca. $100m.
• Further geographic expansion, notably re-entry of the
Chinese market with Albiomin expected next year.
• Rich plasma protein pipeline, with peak sales potential of
€0.4bn and €0.2bn before and after risk adjustment,
•respectively.
Budding therapeutic antibody pipeline, with three
potential blockbusters in clinical development
Threats
• IVIG pricing pressure in Europe may continue and may
periodically worsen as and when peers add capacity.
• Coagulation factor franchise is largely ex-growth and
pressures may intensify further.
• Clinical and regulatory delays to pipeline projects,
including Albiomin for the Chinese market.
Main shareholders: Free float 67.0% (41.0%); OGEL 24.0% (50.0%); KSK Biberach 9.0%;
Recommendation: We recommend accumulating the shares based on our DCF-derived price target.
All share prices at 19/05/14.
Target Price: EUR 93.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
100
12/08/14 Results
90
80
2014Q2
BIOTEST SMALL & MID CAPS SELECTION
Analyst(s)
Marietta Miemietz CFA
+49-69-58997-439
Equinet Bank
[email protected]
70
60
50
40
30
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
45
Belgium
SMALL & MID CAPS SELECTION
EUR 234.25
Reduce
BOIS SAUVAGE
CBOS.BR/COMB BB
Market capitalisation: EUR 370m
Financial Services
PROFIT & LOSS (EURm)
Revenues
Non Recurrent Items
Net Profit (reported)
BALANCE SHEET (EURm)
Shareholders Equity
Minorities equity
Net Debt
NAV Constituents & Total NAV (EURm)
Treasury portfolio
Cofinimmo
Oth. real estate
Strategic Finance
Neuhaus
Recticel
Other assets
Net cash/(debt) position
Total Net Asset Value
Discount/(Premium) to NAV
Listed shareholdings on NAV
OTHER ITEMS (EURm)
Total Market Cap
Debt / Equity
Payout Ratio
P/BV
Dividend Yield (Gross)
PER SHARE DATA (EUR)
EPS (reported)
NAVPS
BVPS
DPS
2011
17.4
8.9
31.1
2012
15.4
-4.8
16.4
2013
11.6
6.3
-1.4
2014e
369.2
14.9
71.0
350.1
16.6
62.0
318.1
18.7
53.2
16.7
27.8
84.9
73.1
171.0
38.5
102.3
-71.0
443.4
-41.7%
40.4%
9.6
0.0
87.5
66.4
200.5
44.0
107.0
-62.0
453.0
-33.3%
36.1%
10.1
0.0
62.2
69.8
219.0
47.1
101.4
-53.2
456.3
-25.8%
43.1%
11.4
0.0
53.2
69.8
219.0
59.8
99.3
-42.5
469.9
-20.9%
32.6%
223.1
19.2%
162.1%
0.6
22.6%
300.9
17.7%
67.3%
0.9
3.7%
337.2
16.7%
nm
0.9
3.1%
369.8
19.735
280.000
234.360
32.000
10.405
286.400
222.239
7.000
-0.891
288.480
229.505
7.280
3.2%
296.225
7.480
Source: Company, Bank Degroof estimates
Main shareholders: Entr. Et Chemins de fer en Chine 43%, Guy Paquot/Fingaren 6%
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
240
230
220
210
200
190
180
Profile: Compagnie du Bois Sauvage (COMB) is a holding company with a stable “family” main shareholder.
It wants to concentrate on a limited number of participations, mainly industrial, to which it wishes not only to
influence the choice of management and strategic orientations, but also to provide support to operational
management and help in financial management. Vigilant with regards to the interest of its own shareholders,
Bois Sauvage requires a recurring income from its investments in order to allow the distribution of a (if
possible steadily growing) dividend.
SWOT Analysis
Strengths
• Outstanding performance in recent years of Neuhaus
(100% stake) and Berenberg Bank (12% stake)
• Focused portfolio with 2 majore shareholdings that
account for over 50% of GAV
• Only limited capital gains taxes in Belgium
Opportunities
• Hidden value at the level of private equity (Neuhaus,
Berenberg Bank, Noel Group…)
• Turnaround of Recticel or change of control of the
company.
• Value creation in dormant property portfolio in Belgium
(plots of lands).
• Disposal of US real estate activities could be NAV
enhancing
Weaknesses
• Lack of scale vs. Belgian peers and very low deal flow
which casts some doubts on the strategy going forward
• Limited visibility on the performance of private equity
participations
• Corporate governance peculiarities: the company is
managed directly by its BoD
• Poor track-record of Recticel and mixed performance of
Noel Group in recent years
Threats
• Vulnerable to changes in stock market sentiment and
impact holding company discount to NAV volatility
• Uncertainty about future changes to tax legislation for
holding companies in Belgium
• Cash drag on return. Proceeds from cash have a negative
impact on ROE.
Recommendation: Although COMB is not the “pure-play” investors often are looking for, the portfolio of this
holding company contains some assets which could entice long term value investors that at the same time
are looking for yield. Why? Because of its present valuation and of its trophy asset Neuhaus. After all,
COMB offers an indirect way to invest in the famous Belgian manufacturer of luxury chocolate Neuhaus,
next to a shareholding the renowned German private bank Berenberg.
We slightly revised our valuation of Neuhaus and Berenberg (together 60% of NAV) and computed a NAV of
EUR 481m. Our EUR 217 TP implies an downward potential of 7%. Our adjusted NAV estimate is computed
after “in the money” dilution. We assess the current -25% discount as rather low, when compared to the 5years historical average for COMB of -33% and the present market cap weighted average discount of
Belgian peers (-25%).
170
160
Target Price: EUR 217.00
150
140
130
Mar 11
Source : Factset
46
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Hans D'Haese
Bank Degroof
+32 (0) 2 287 9223
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 31.15
Buy
BOLSAS Y MERCADOS ESPANOLES SA
BME.MC/BME SM
Market capitalisation: EUR 2605m
Financial Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR32.80 / 18.51
12/12
296
197
66.6%
189
64.0%
136
136
138
-349
-0.8
-1.8
nm
113%
11.9
10.1
4.0
6.0
6.3
11.4
3.7
7.8%
8.7%
1.62
-12.6%
4.93
1.60
55.8%
12/13
12/14e
12/15e
308
340
380
209
239
276
67.8%
70.2%
72.8%
201
230
266
65.4%
67.6%
70.1%
143
163
189
143
163
189
145
166
192
-317
-530
-650
-0.8
-1.3
-1.6
-1.5
-2.2
-2.4
nm
nm
nm
126%
136%
158%
13.3
14.4
16.6
17.8
17.5
16.5
6.5
6.1
5.1
9.6
8.7
7.1
9.9
9.0
7.3
16.2
16.0
13.8
5.9
6.5
6.4
5.5%
6.0%
7.0%
5.3%
5.9%
6.9%
1.71
1.95
2.26
5.6%
13.9%
15.9%
4.69
4.79
4.90
1.65
1.85
2.15
16.0%
3.3%
4.3%
Avg. Daily nb traded shares:673,501
Main shareholders: Free float 96.6%; B Santander 3.4%;
Profile: Bolsas y Mercados Españoles (BME) runs all Spanish stock and financial markets (equity, fixed
income, derivatives, etc.). Since July 2006 BME has been a listed company as well as an IBEX35
constituent. In 2013 BME reiterated its leadership in terms of efficiency (C/I: 32.2%) and profitability (Roe:
35.9%). BME is a diversified company structured into seven business-units (reorganised in 2014): i)
Equities (50% w/Ebitda); ii) Settlement (26% w/Ebitda); iii) Information (10% w/Ebitda); iv) Clearing (5%
w/Ebitda); v) Fixed Income (3.2% w/Ebitda); vi) Derivatives (2.9% w/Ebitda) & vii) IT & Consulting (1.7%
w/Ebitda). The main risk for BME is the threat of alternative platforms (last April’14 BATS claimed a 14.9%
market share in the Spanish market vs. 12.6% a year ago).
1Q’2014 Earnings: EBITDA (EUR60.9m) increased 17.8%Y/Y based on: i) the 17.5% Y/Y rise in equity
trading and ii) operating cost under control remaining almost flat. Efficiency: quarterly operating expenses
(EUR25.12m) fell 0.2% Y/Y, which is within BME’s strategy pointing to these costs growing below CPI
rate. At 1Q’14 BME’s C/I ratio reached 29.2% vs. 34.5% in 1Q’13. The improvement partially came from
reducing personnel by 27 employees (-3.4% Y/Y decrease in the total workforce). Performance of
operating costs also helps EBITDA reach 70.8% improving vs. 69.7% in 4Q’13 and 65.5%, a year ago.
Profitability: With ROE at 41.1%, this is another indicator performing well above the 31% at 1Q’13.
SWOT Analysis
Strengths
• Best in class C/I (29.2%), allowing BME to face shrinking
fees and retain strong ROE.
• Outstanding market depth and liquidity for all Spanish
large caps.
• Net cash: + EUR270m & stable cash dividend
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
34
01/08/14 Results
32
30
28
26
2014Q2
• High dependence in equity trading and related business
(+65%/70% of revenue) and EBITDA.
• Limited to increase product catalogue due to conservative
financial culture.
• Solid ROE 41% (no negative quarterly results in 10y)
Opportunities
• To develop product diversification with local
opportunities like MAB (S&M caps listings), etc.
• Consultancy services in developing markets.
• New Clearing & Settlement business, CCP.
All share prices at 19/05/14.
Weaknesses
• Relative small player & vulnerable to attacks.
Threats
• Regulatory: transaction tax & short selling bans.
• Alternative platforms, MTFs (Chi-x, etc.) and global
competition and integration.
• Risk aversion due to volatile debt markets
Recommendation: BME is under sound a position to reap the profits from a low costs base and the
recovery of equity trading in the stock exchange. During the economic cycle downturn, BME did not report
a single quarter with a “profit” below EUR30m. Also, BME is a free debt company that makes this company
a cash cow producer. For 2014 we expect a DPS of EUR1.71, currently yielding 5.5% (vs EUR1.65/sh in
2013). Buy Reiterated.
24
Target Price: EUR 34.95
22
20
Analyst(s)
18
16
14
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Javier Bernat
BEKA Finance
+34 91 436 7816
[email protected]
Source : Factset
47
France
SMALL & MID CAPS SELECTION
EUR 22.19
Accumulate
BONDUELLE
BOND.PA/BON FP
Market capitalisation: EUR 710m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR22.19 / 17.17
06/12
1,767
133
7.5%
98.2
5.6%
46.7
49.5
110
631
1.3
4.7
4.8
6.5%
0.9
1.0
0.7
8.8
12.0
10.6
1.1
-8.7%
2.3%
1.57
15.7%
15.23
0.38
20.1%
06/13
06/14e
06/15e
1,896
1,955
2,100
149
189
209
7.9%
9.7%
10.0%
103
105
120
5.4%
5.4%
5.7%
52.1
46.5
57.5
54.1
46.5
57.5
124
151
158
607
609
581
1.2
1.1
1.0
4.1
3.2
2.8
4.9
6.3
7.5
6.8%
5.3%
6.1%
0.9
0.8
0.9
1.1
1.1
1.1
0.6
0.7
0.6
8.0
7.2
6.3
11.6
12.9
11.0
10.7
15.0
12.1
1.2
1.3
1.2
-6.2%
0.9%
6.1%
1.8%
1.8%
1.8%
1.72
1.48
1.83
9.3%
-14.0%
23.7%
15.87
16.64
17.97
0.40
0.40
0.40
18.7%
12.7%
8.5%
Avg. Daily nb traded shares:26,494
Main shareholders: Bonduelle family 60.0%; Free float 32.0%; Employees and treasury stock 8.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
23.0
22.0
Profile: European leader in prepared vegetables: 1) tinned foods (47% of sales), in which it is European
leader (29% market share) in a market where shipments are steady; 2) frozen foods (24% of sales), number
two (12% market share) behind Unilever in a slowing market; and 3) fresh-cut products (28% of sales,
covering chilled and delicatessen products), which are experiencing strong growth.
SWOT Analysis
Strengths
• European leadership in processed vegetables
Weaknesses
• Dependence on supermarket food retail in Europe
• A strong and European brand that can be rolled out in all • Significant capital intensity in conserves, which
hampers the development of the product line
vegetable segments
• Improved margins
• Becoming a large actor in Americas
Opportunities
• Enter supermarket food retail in emerging markets
Threats
• Climate effect
• More acquisitions in USA (after Allens) and Europe
• Weight of sales dollar
• Level of consumer in CEE
Recommendation: Bonduelle’s H1 2014 results for the period ending 31 Dec. 2013 show strong
operating profit growth to EUR56.2m (EUR53m CM-CIC) vs EUR52.2m, +7.5%. The operating margin
climbed to 5.7% from 5.3%. Financial debt fell EUR117.6m to EUR696.3m. The group adjusted its organic
top-line growth to +4% (EUR1,970m/EUR1,980m) and raised the level of organic UOI to
EUR106m/EUR107m (from flat at EUR105m). As H1 revenues climbed only +0.9% (+4.9% organic) the
+7.5% UOI is somewhat surprising. The Canned division, which generates the bulk of the group’s
earnings, maintained its momentum with organic top-line growth of +8.5% (+5.5% on the actual structure),
which explains this performance. The international activity was the biggest driver of growth and earnings
as the margin rose 110bp in organic terms to 11.3%. Management factors in a less profitable H2 owing to
costs from the summer 2013 campaigns and an increase in A&P. While we consider the guidance on
organic evolution to be reasonable, we are more cautious overall given the threat posed by currencies
(especially the rouble and the real).
21.0
Target Price: EUR 22.50
20.0
19.0
18.0
17.0
Analyst(s)
16.0
15.0
Mar 11
Source : Factset
48
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Francis Prêtre
CM - CIC Securities
+33 4 78 92 02 30
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 23.84
Buy
BOURBON
GPBN.PA/GBB FP
Market capitalisation: EUR 1777m
Oil Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR24.36 / 18.00
12/12
1,187
406
34.2%
162
13.6%
41.9
41.9
322
2,061
1.5
5.1
5.7
3.3%
0.5
1.1
3.2
9.4
23.7
33.6
1.0
-5.4%
3.4%
0.56
nm
18.09
0.82
19.8%
12/13e
12/14e
12/15e
1,312
1,443
1,587
437
399
448
33.3%
27.6%
28.2%
164
180
214
12.5%
12.4%
13.5%
115
146
148
19.5
102
148
415
394
411
1,610
991
535
1.1
0.6
0.3
3.7
2.5
1.2
5.3
8.7
15.4
4.4%
5.8%
7.7%
0.5
0.6
0.8
1.1
1.3
1.3
2.7
2.3
1.7
8.0
8.5
6.2
21.3
18.8
13.0
nm
17.5
12.0
1.1
1.2
1.2
-4.0%
0.1%
9.8%
4.2%
4.8%
5.5%
0.26
1.36
1.99
-53.4%
nm
46.0%
18.79
19.75
20.59
1.00
1.15
1.30
22.0%
11.8%
-0.1%
Avg. Daily nb traded shares:115,977
Main shareholders: Free float 56.9% (59.2%); Jaccar 26.1% (27.2%); Mach-Invest 7.7% (8.1%);
Pleyel Investissements 5.3% (5.5%); Treasury shares 4.0% (0.0%);
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
28
26
24
22
03/06/14 Dividend Payment
2013
29/05/14 Ex Dividend Date
2013
Profile: Bourbon’s maritime services include Offshore - logistics for oil-drilling & oil-producing platforms, with
a focus on the deepwater niche and provision of state-of-the-art vessels for shallow waters, and Subsea
Services (mainly Inspection, Repair and Maintenance of subsea installations). These are two strong-growth
segments. Bourbon’s 2015 Strategic Leadership Plan allows for USD1.5bn in investments between 2012
and 2015 to build 100 extra vessels. With 520 operated vessels by end-2015, Bourbon will once again have
doubled its size between 2010 and 2015. Bourbon is both the most aggressive player in the sector and the
best protected thanks to its modern, state-of-the-art vessels, long-term contract policy and local JVs
maximising local workforce content. Burdened by heavy debt, Bourbon announced a major change in
strategy during the presentation of its 2012 results. In 2013 and 2014, the group plans to sell one-third of its
fleet, both recent and under construction (AHTS+PSV+IMR), to investors for USD2.5bn and lease back
these vessels for 10-year periods. This has already allowed Bourbon to reduce its debt by USD450m.
SWOT Analysis
STRENGTHS
 Technical know-how in offshore, with global sourcing of
crews
 Constitution of barriers to entry in Offshore by forming
links with local players (Angola, Nigeria, Mexico,
Qatar and India, etc.) on markets where being local is
a decisive factor
 Long-term, high-margin contracts (over 15 months)
 Fleet of modern ships lower clients’ costs
 Sale and long-term lease of 1/3 of PSV & AHTS fleet
helps reduce debt
OPPORTUNITIES
 Need to replace global ageing offshore
continental fleet with modern vessels
 More segmentation, quality of customer service
 Lower costs (building long series of ships in China)
 Increase share of costs in USD (vessel leases +
centralised maintenance & repair costs)
Target Price: EUR 27.30
18
16
Source : Factset
THREATS
 Excessive supply of deepwater offshore
vessels (PSVs) partially offset by focusing
capex on smaller vessels
 Risk of downturn in cycle leading to lower oil
prices, industry capex and daily rates while
fixed rental costs have increased
Recommendation: Bourbon’s sale and leaseback operations will: 1) significantly improve Bourbon's ROCE
(EBITDA/CE) to 24% compared with its previous target of 20%; 2) significantly lower its net debt (but there
are off-balance sheet commitments); and 3) better reflect the value of its fleet. Jaccar’s offer on Bourbon at
EUR24 per share does not reflect the fair value of the company or its fleet. This is even more the case as
Bourbon’s debt is being reduced rapidly and the company is set to announce a new, bold strategic plan
before the end of the year. We estimate the fair value of the stock between EUR27 (DCF) and EUR30.8
(restated NAV).
20
14
Mar 11
WEAKNESSES
 High exposure of earnings to dollar weakness, as
Bourbon generates 70% of its revenues in USD but
has only 30% of its costs in the same currency
 Sensitivity of EBITDAR margins to utilisation rate
and availability rate of the fleet. 1% +/- utilisation
rate can cost up to 1% of EBITDA margin in the
Offshore Supply division
 Fixed rental costs on leased vessels increase
Bourbon’s exposure if dayrates fall
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
BOURBON SMALL & MID CAPS SELECTION
Analyst(s)
CM - CIC Securities
Jean-Luc Romain
[email protected]
+33 1 45 96 77 36
49
France
SMALL & MID CAPS SELECTION
EUR 12.00
Hold
BOURSORAMA
FMTX.PA/BRS FP
Market capitalisation: EUR 1054m
Banks
EUR
12/12
12/13e
12/14e
12/15e
Total Revenue (m)
201
205
221
237
Pre-Provision Profit (PPP) (m)
66.5
50.9
58.7
65.7
Loan Impairment Charge (m)
-2.0
-1.9
-2.0
-2.1
Operating profit (OP) (m)
64.5
49.0
56.7
63.7
Earnings before tax (m)
64.5
49.0
56.7
63.7
Net profit (reported) (m)
40.5
-30.9
35.6
40.0
Net profit (adj.) (m)
40.5
-30.9
35.6
40.0
Shareholders equity (m)
749
707
752
782
Tier 1 Ratio
60.8%
52.5%
51.4%
50.7%
Cost/Income ratio
67.0%
75.2%
73.4%
72.3%
ROE (adj.)
5.7%
-4.2%
4.9%
5.2%
NPL ratio (gross)
1.3%
1.3%
1.3%
1.3%
NPL coverage
35.0%
35.0%
35.0%
35.0%
LIC/Avg. RWA
0.2%
0.2%
0.2%
0.2%
P/Pre-Provision Profit per Share
6.4
13.7
17.5
15.6
P/E (adj.)
10.5
nm
28.7
25.6
P/BV
0.6
1.0
1.4
1.3
P/NAV
0.6
1.0
1.4
1.3
Dividend yield
0.0%
0.0%
0.0%
0.0%
PPPPS
0.78
0.60
0.69
0.77
EPS (adj.)
0.47
-0.36
0.42
0.47
EPS (adj.) growth
-6.6%
-chg
+chg
12.1%
BVPS
8.81
8.31
8.84
9.19
NAVPS
8.33
8.56
8.57
9.01
DPS
0.00
0.00
0.00
0.00
Abs. Performances(12m,6m,3m,1m):
98.3%
57.1%
35.0%
-0.9%
12 month High/low: EUR12.14 / 5.82
Avg. Daily nb traded shares:0,000
Main shareholders: Soci‚t‚ G‚n‚rale 56.1% (56.6%); Free float 23.0% (23.1%); Caixa (Hodefi) 20.1% (20.3%);
Treasury shares 0.8% (0.0%);
All share prices at 19/05/14.
Profile: France’s first online broker, Boursorama has continually innovated and expanded its offer and can
now lay claim to being the No. 1 French online bank. In France, Boursorama is the leader in online
brokerage with a 30% market share ahead of Direct Bourse, Fortunéo-Symphonis and Cortal. On 30 June
2013, operating revenues in France broke down as follows: 64.5% banking, 29.2% brokerage, 6.3% Internet
portal. International revenues (Spain, UK and Germany) accounted for 21.0% of total revenues.
SWOT Analysis
STRENGTHS
WEAKNESSES
 Leading Internet platform in France for financial
information helps capture clients
 French leader in online brokerage: strong brand
recognition.
 Capacity to innovate.
 Support of parent company Société Générale.
 Tier 1 ratio at 36.8% as at 30 June 2013.
OPPORTUNITIES
 Restructuring in the UK, with a net loss of
EUR4.3m in H1-2013
 Low interest rates continue to erode revenues
stemming from inflows
 Three CEOs in less than three years.
 Possible extension to other products in the
medium term (consumer credit and insurance)
 Participation in Société Générale’s global project
of accelerating expansion of retail banking
 Volatility of brokerage activities
 Competition in France with Hello Bank (BNPP)
even if the business model is slightly different
 International strategy still unclear and difficulties
implementing online banking abroad.
 Slow recovery in Spain and Germany, with net
profit in H1-2013 vs net losses in 2012.
THREATS
Recommendation: H1-2013 net attributable profit was down 5.4% y-o-y at EUR17.6m. Guidance of a
20-25% decrease in 2013 net profit, mainly due to restructuring in the UK. Moreover, the recent change in
governance could prompt the group to use its surplus shareholders’ equity more judiciously, e.g. exceptional
pay-outs or acquisitions (means of payment or online banking in Europe). The current valuation appears
unwarranted given the company’s surplus shareholders’ equity and its fairly resilient model.
Target Price: EUR 9,30
PRICE (SHORT & LONG AVERAGE)
FINANCIAL CALENDAR (Source: Precise)
BOURSORAMA SA SMALL & MID CAPS SELECTION
Analyst(s)
30/07/14 Results
Pierre Chedeville
titre
13.0
12.0
11.0
10.0
9.0
8.0
7.0
6.0
5.0
4.0
Mar 11
Source : Factset
50
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
2014H1
+33 1 45 96 78 71
CM - CIC Securities
[email protected]
Portugal
SMALL & MID CAPS SELECTION
EUR 1.60
Hold
BPI
BBPI.LS/BPI PL
Market capitalisation: EUR 2227m
Banks
EUR
12/12
12/13
12/14e
12/15e
Total Revenue (m)
1,330
1,048
1,051
1,154
Pre-Provision Profit (PPP) (m)
654
410
380
481
Loan Impairment Charge (m)
-254
-255
-150
-129
Operating profit (OP) (m)
400
155
231
352
Earnings before tax (m)
424
182
260
383
Net profit (reported) (m)
249
66.8
118
206
Net profit (adj.) (m)
249
66.8
118
206
Shareholders equity (m)
1,708
1,922
2,034
2,221
Tier 1 Ratio
14.9%
16.3%
14.7%
14.1%
Cost/Income ratio
48.1%
62.1%
60.7%
55.5%
ROE (adj.)
22.9%
3.7%
6.0%
9.7%
NPL ratio (gross)
3.2%
3.6%
3.8%
3.6%
NPL coverage
92.4%
100%
89.7%
88.7%
LIC/Avg. RWA
1.0%
1.1%
0.7%
0.6%
P/Pre-Provision Profit per Share
2.0
4.1
5.9
4.6
P/E (adj.)
5.3
25.3
18.9
10.8
P/BV
nm
nm
nm
nm
P/NAV
0.8
0.9
1.1
1.0
Dividend yield
0.0%
0.0%
0.0%
0.0%
PPPPS
0.47
0.29
0.27
0.35
EPS (adj.)
0.18
0.05
0.08
0.15
EPS (adj.) growth
+chg
-73.2%
76.4%
74.8%
BVPS
1.23
1.38
1.46
1.60
NAVPS
1.23
1.38
1.46
1.60
DPS
0.00
0.00
0.00
0.00
Abs. Performances(12m,6m,3m,1m):
47.0%
35.8%
-4.6%
-18.3%
12 month High/low: EUR1.99 / .83
Avg. Daily nb traded shares:3,185,775,000
Main shareholders: Caixabank 46.2% (20.0%); Free float 22.8% (22.9%); Santoro Financial Holding 19.5% (19.6%);
Profile: The main focus of BPI management continues to be linked to the potential early repayment of the
EUR 420m CoCo bonds currently in the bank’ balance sheet (from EUR 1.2bn in December 2012) that could
be concluded before 30 June 2014.
On 23 April the bank presented 1Q14 net loss of EUR 104.8m mainly due to weaker than anticipated
consolidated NII (lower carry trade). Moreover, no main surprises in the other key lines, with the net loss
related to the sale of MLT sovereign debt (Portugal and Italy) as the main event in the quarterly P&L. Going
forward, the improvement in the macro economic outlook for Portugal is a relevant driver for the bank while
the reform on the DTAs could have an impact close to EUR 230m (Core TIER I improvement).
SWOT Analysis
Strengths
• Comfortable liquidity position - Loan-to-Deposits ratio at
94% by the end of 1Q14
• Lower provisioning cost than peers (cost of risk of 64bps
by the end of March 2014)
• Best asset quality in the Portuguese banking system with
a NPL (>90 days) ratio of 3.7%.
• Solid shareholder structure, as its three major
shareholders have a 74.5% stake (CaixaBank with 46.2%,
Opportunities
Angolan company Santoro with 19.5% and Allianz with
• Potential with BFA in Angola, a market with substantial
potential for banking growth
• Due to its liquidity position BPI has the flexibility to
increase activity, namely credit, without regulatory
constraints
Weaknesses
• World economic slowdown, mostly in Portuguese main
trading partners
• Higher risk in Angola with risk of volatility in BFA’s results
and activity
Threats
• BPI investment case is closely related to the evolution of
sovereign debt yields
• Potential worsening of the Euro zone “sovereign debt
crisis” namely in what refers to the evolution of risk
aversion towards Portugal
Recommendation: Our valuation for FY14 is EUR 1.50 per share with an Hold Recommendation, according
to the ESN ratings matrix.
All share prices at 19/05/14.
From a fundamental point of view, BPI maintains a better than peers structural funding mix (customers'
resources account for around 60% of its balance sheet vs. 50% in the case of BES and 55% for BCP) and
low provisioning costs (based on its low risk portfolio). We also highlight its sound liquidity position with a
consolidated LtD ratio of 94% at the end of 1Q14.
Target Price: EUR 1.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.0
23/07/14 Results
1.8
1.6
1.4
1.2
1.0
2014H1
BPI SMALL & MID CAPS SELECTION
Analyst(s)
André Rodrigues
0.8
0.6
+351 21 389 68 39
Caixa-Banco de Investimento
[email protected]
0.4
0.2
mar 11
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Source : Factset
51
Italy
SMALL & MID CAPS SELECTION
EUR 27.34
Accumulate
BREMBO
BRBI.MI/BRE IM
Market capitalisation: EUR 1826m
Automobiles & Parts
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR28.80 / 12.52
12/12
1,389
172
12.4%
89.4
6.4%
77.5
77.5
160
321
0.8
1.9
25.6
12.9%
1.7
1.5
0.7
5.5
10.6
8.2
1.7
6.3%
4.1%
1.19
81.1%
5.82
0.40
118.5%
12/13
12/14e
12/15e
1,566
1,770
1,911
212
257
268
13.5%
14.5%
14.0%
121
154
157
7.8%
8.7%
8.2%
89.0
115
115
89.0
115
115
180
218
226
320
327
266
0.7
0.6
0.4
1.5
1.3
1.0
12.5
15.7
17.9
15.2%
16.4%
15.7%
2.0
2.2
2.1
2.3
2.8
2.6
1.0
1.2
1.1
7.5
8.3
7.7
13.1
13.8
13.2
14.3
nm
15.4
3.1
3.6
3.1
3.7%
3.2%
4.9%
1.8%
1.8%
1.8%
1.37
0.00
1.77
14.8%
-chg
+chg
6.35
7.59
8.85
0.50
0.48
0.48
40.8%
23.4%
0.5%
Avg. Daily nb traded shares:259,861
Main shareholders: Bombassei Alberto 53.5%; Free float 41.6%; Goodman & Co 2.5%;
Gamco INC. 2.3%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
30
25
Profile: Brembo is a leading supplier of high-performance braking systems for passenger cars (~70% of
2013 revenues), LCVs (~12%) and motorbikes (~10%); the company also manufactures brakes for racing
applications (~8% of 2013 revenues) and safety systems (~1%). BRE operates essentially through the OEM
channel (~85% of revenues), while the after-market has a limited weight (~15%).
BRE's major markets are: Germany (~24% of 2013 revenues), the NAFTA area (~24% of 2013 revenues),
Italy (~13% of 2013 revenues) and the rest of Europe (~11% of 2013 revenues); Brazil, India and China
accounted for ~12% of 2013 revenues.
BRE’s customer base is well diversified as no single customer weighs more than 10% of group revenues.
After the painful 2009, BRE re-started investing aggressively doubling its Polish plant, purchasing and
revamping a Chinese foundry and building a new plant in the Czech Republic. Cumulated capex reached
EUR 500m in the 2010-13 timeframe and should come in at ~EUR 130m in 2014.
SWOT Analysis
Strengths
• Niche positioning at the top of the market
Weaknesses
• Limited exposure to the after-market channel
• Strong brand recognition
• Strong vertical integration making the cost structure less
flexible
• Limited FCF generation due to very high capex
• Strong technical expertise
Opportunities
• Expansion in the mid-premium segment
Threats
• Competition by some Chinese producers on most simple
products and aftermarket
• Bigger competitors might enter Brembo’s niche market
• Entrance in the aeronautic business
• De-localisation in Poland/Czech Republic/China
Recommendation: Revenues came in at ~EUR 1.6bn in 2013 (~+12.5% Y/Y), with the automotive, LCV
and motorbike businesses growing ~17% Y/Y, ~4% Y/Y and ~6% Y/Y respectively. EBITDA reached EUR
212m (~+24% Y/Y at ~13.5% of revenues) and EBIT came in at ~EUR 121m (~+36% Y/Y). The bottom line
result came in at ~EUR 89m (~+16% Y/Y) also thanks to a particularly low tax rate (~15%), while the NFP
reached EUR -320m, flat year-over-year.
After a very good Q1, BRE improved its FY14 guidance and now it sees the top line growing by 10/10.5%
Y/Y, while EBITDA margin is expected to reach ~14%. We value Brembo on the basis of a DCF and peer
multiples; our current target price is EUR 30.
Target Price: EUR 30.00
20
15
10
5
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
BREMBO SMALL & MID CAPS SELECTION
Analyst(s)
Gabriele Gambarova
52
+39 02 43 444 289
Banca Akros
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 44.69
Buy
BRUNEL
BRUN.AS/BRNL NA
Market capitalisation: EUR 1113m
Support Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR51.88 / 32.33
12/12
1,237
78.0
6.3%
73.6
5.9%
44.8
47.7
47.0
-98.6
-0.4
-1.3
nm
34.8%
4.2
5.0
0.6
10.1
10.7
18.3
3.4
3.0%
2.7%
2.00
18.6%
10.91
1.00
30.7%
12/13
12/14e
12/15e
1,283
1,416
1,522
78.3
91.7
102
6.1%
6.5%
6.7%
72.3
85.3
95.4
5.6%
6.0%
6.3%
50.0
60.3
67.4
50.0
60.3
67.4
64.0
59.7
74.2
-90.0
-102
-131
-0.3
-0.3
-0.4
-1.1
-1.1
-1.3
nm
high
nm
28.7%
30.6%
32.3%
3.5
3.7
3.9
5.3
4.8
4.5
0.8
0.7
0.7
12.7
11.0
9.8
13.8
11.9
10.5
21.5
18.3
16.7
3.9
3.5
3.1
1.3%
3.0%
4.8%
2.5%
2.7%
3.0%
2.07
2.44
2.67
3.3%
18.2%
9.5%
11.39
12.79
14.21
1.10
1.20
1.35
-0.3%
-0.7%
-8.0%
Avg. Daily nb traded shares:20,845
Main shareholders: Noverhead 63.0%; Free float 37.0%;
All share prices at 19/05/14.
Profile: Brunel is a staffing company specialised in engineers, technicians and IT and legal specialists. In Oil
& Gas, engineers are hired for and seconded to client projects around the world. In other sectors, specialists
are full-time employed by Brunel and seconded on temporary assignments in Europe, predominantly the
Netherlands and Germany.
Brunel’s business model in oil and gas has been widened to include full-project recruitment and
management services. Although lumpy in nature, such business offers revenues and profits uncorrelated to
the highly cyclical patterns in European general engineering.
SWOT Analysis
Strengths
• Integrated systems and co-ordinated management
practices throughout network
• International/global coverage
Weaknesses
• Fixed-cost business model in European engineering,
operational gearing balancing act
• Bargaining power vis-à-vis large corporations in oil & gas
and scarce technical specialists in Europe
• No Debt
Opportunities
• Quest for flexibility in volatile and cyclical manufacturing
industry (e.g. automotive)
• Increasing technical complexity of oil & gas projects
Threats
• Limited barriers to entry, especially in general engineering
• Lumpy nature of upstream energy projects can
temporarily swallow cash flow
Recommendation: The Oil & Gas business continues to show strong growth outside the large projects; the
secondment of German and Dutch engineers reflects the recovery of activity in the local manufacturing
sector. The rising penetration of flexible contract engineering in the German industry and in offshore will
extend top line growth potential. Brunel’s success in securing the top spot in specific outsourcing trends
warrants a full valuation ahead of today’s multiples.
Target Price: EUR 51.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
55
50
BRUNEL SMALL & MID CAPS SELECTION
Analyst(s)
Gert Steens
45
+312 0 5508639
SNS Securities
[email protected]
40
35
30
25
20
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
53
Spain
SMALL & MID CAPS SELECTION
EUR 340.30
Buy
CAF
CAF.MC/CAF SM
Market capitalisation: EUR 1167m
Industrial Transportation
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR400.00 / 312.60
12/12
1,721
182
10.6%
141
8.2%
100
100
141
415
0.6
2.3
17.4
10.6%
1.4
1.5
0.9
8.9
11.4
12.0
1.7
-12.7%
3.0%
29.18
-24.3%
206.42
10.50
9.0%
12/13
1,535
223
14.5%
151
9.9%
90.2
90.2
163
525
0.7
2.4
6.6
11.4%
1.5
1.8
1.2
8.3
12.3
14.6
1.8
-16.9%
3.1%
26.31
-9.8%
209.78
10.50
-9.7%
12/14e
12/15e
1,565
1,602
224
241
14.3%
15.1%
177
183
11.3%
11.4%
97.2
106
97.2
106
144
164
451
381
0.5
0.4
2.0
1.6
5.2
6.4
10.6%
11.0%
1.4
1.4
1.3
1.3
1.0
1.0
7.2
6.4
9.2
8.5
12.0
11.0
1.4
1.3
4.4%
9.1%
3.1%
3.1%
28.35
30.81
7.8%
8.7%
242.87
263.18
10.50
10.50
-10.7%
-9.1%
Avg. Daily nb traded shares:8,449
Profile: Construcciones y Auxiliar de Ferrocarriles, or CAF, is one of the international leaders in designing,
manufacturing, maintenance and supply of equipment and components for railway systems. More than 80%
of CAF’s revenues proceed from foreign countries (possibly rising to 90% in a couple of years).
SWOT Analysis
Strengths
• Solid growths
Weaknesses
• Not a very communicative company
• Good geographic diversification
• Less than 20% sales in Spain
• Strong order book (EUR 5 bn)
Opportunities
• Infrastructure plans in all countries where present
• Strong growth of the railway sector due to the
advantages vs. other transports
Threats
• Growth of companies within the Chinese railway sector,
possibly gaining an important role
• Margin pressure
Recommendation: In 1Q14, sales below forecasts, representing 23.6% of the full year estimate, dropping
7% vs. 1Q’13. EBITDA fell 25% vs. 1Q’13.1Q’14 was affected by the delay of two construction projects,
originating additional costs and not allowing higher sales volumes. Backlog reached EUR4,702m, 2.1%
below 2013.
The higher costs in 1Q’14 will affect the numbers of the year. Now we estimate EBITDA in 2014 will be close
to 2013.
Main shareholders: Free float 44.9%; Cartera Social 29.6%; Kutxa 20.1%;
BNP 5.5%;
Target Price: EUR 450.00
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
420
400
08/06/14 AGM
2013
07/06/14 AGM
2013
380
360
340
320
300
280
260
Mar 11
Source : Factset
54
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
CAF SMALL & MID CAPS SELECTION
Analyst(s)
Iñigo Recio Pascual
+34 91 436 7814
BEKA Finance
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 1.05
Accumulate
CAPMAN
CPMBV.HE/CPMBV FH
Market capitalisation: EUR 90m
Financial Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.21 / .79
12/12
27.3
3.4
12.6%
2.6
9.6%
2.7
0.3
3.6
25.5
0.3
7.4
nm
7.1%
0.7
3.5
3.5
27.9
36.6
nm
0.9
-2.3%
0.0%
0.00
-96.8%
0.99
0.00
25.0%
12/13
12/14e
12/15e
29.8
35.2
37.4
4.0
14.6
16.6
13.5%
41.4%
44.3%
3.3
14.1
16.2
11.2%
40.2%
43.3%
1.5
10.8
12.6
-1.0
9.9
11.6
2.1
11.2
13.0
14.5
13.6
14.2
0.2
0.2
0.2
3.6
0.9
0.9
5.4
21.8
39.0
32.5%
146%
167%
3.3
14.8
16.9
14.4
13.3
13.4
3.8
2.9
2.8
27.9
7.1
6.3
33.4
7.3
6.4
nm
9.1
7.7
1.5
1.3
1.2
3.7%
12.6%
14.5%
3.8%
7.4%
8.7%
-0.01
0.12
0.14
-chg
+chg
17.9%
0.76
0.84
0.90
0.04
0.08
0.09
-10.3%
-3.7%
1.9%
Avg. Daily nb traded shares:27,392
Main shareholders: Free float 76.4%; Ilmarinen Mutual Pension Insurance Co 8.4%; OY Inventiainvest AB 8.2%;
Winsome Oy + Tuomo Raasio 4.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
1.60
Profile: CapMan is a listed private equity fund manager with EUR 3.1 billion of assets under management.
The company operates in the Nordic countries and Russia. In addition to fund management, the company is
committed to investing money from its own balance sheet in the funds it manages.
SWOT Analysis
Strengths
• Good investment track record
Weaknesses
• High labor costs
• Well-established, reputable player in the market place
• Deteriorated pricing power
• Multiproduct platform (Equity, Mezzanine, Real estate
funds)
Opportunities
• Russia, where CapMan has a good foothold compared to
other foreign private equity firms
• A relative advantage in the fundraising market as a Nordic
player during the euro crisis
• Revived M&A market
Threats
• Failure to raise funds in the extremely challenging market
situation
• Increasing regulation rendering private equity
investments less competitive in relation to other assets
• Lower availability of buyout funding
• Political risks in Russia
Recommendation: Action programmes in the more challenging portfolio companies have slowly started to
bear fruit and CapMan is expecting a clear improvement in their performance in the next 12 months. This
will support the group’s result through the fair value development of the company’s own fund investments.
CapMan’s portfolio also holds several investments the company is ready to exit. Accordingly, we expect to
see exits this year especially from funds that are in carry, with CapMan’s carried interest income rising
materially as a consequence.
The M&A market has livened up noticeably early this year, which supports CapMan’s determined exit
intentions and underpins our profit forecasts, which involve high expectations for carried interest income
generated during this and the following years. We regard the share price level as attractive in view of the
anticipated positive news flow and earnings trend.
1.50
Target Price: EUR 1.25
1.40
1.30
1.20
1.10
CAPMAN SMALL & MID CAPS SELECTION
Analyst(s)
1.00
0.90
0.80
0.70
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Niclas Catani
+358 10 252 8780
Pohjola
[email protected]
55
Spain
SMALL & MID CAPS SELECTION
EUR 26.28
Buy
CARBURES EUROPE SA
CAR.MC/CAR SM
Market capitalisation: EUR 501m
Aerospace & Defense
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR39.89 / 5.01
12/12p
21.2
2.3
10.6%
1.0
4.9%
1.1
1.1
2.3
13.0
0.6
5.8
4.3
2.3%
0.2
1.1
1.6
15.3
33.2
23.2
1.0
-20.8%
0.0%
0.07
+chg
1.57
0.00
382.1%
12/13e
12/14e
12/15e
69.7
157
356
9.5
26.7
70.3
13.7%
17.0%
19.8%
5.3
20.1
56.5
7.6%
12.8%
15.9%
2.7
6.9
31.5
2.7
6.9
31.5
6.9
13.5
46.3
47.4
168
168
0.8
1.3
1.0
5.0
6.3
2.4
4.6
2.5
6.6
4.8%
5.3%
13.2%
0.5
0.5
1.3
3.3
2.4
2.1
3.7
4.0
1.8
26.9
23.6
9.0
48.2
31.4
11.2
nm
nm
15.9
4.0
3.9
3.1
-6.3%
-36.4%
0.1%
0.0%
0.0%
0.0%
0.14
0.36
1.65
97.1%
158.0%
nm
3.29
6.80
8.46
0.00
0.00
0.00
165.7%
13.8%
-21.9%
Avg. Daily nb traded shares:49,763
Profile: Carbures is a nitch player in the aeronautic sector. The company takes advantage of its small size
to make better use of the work load that for other large aeronautic structure manufacturers implies higher
costs and management problems. Its engineering know-how makes manufacturing a wide range of airplane
components possible, optimising procedures, and taking advantage of raw materials optimisation. The
intention to reduce polluting emissions has boosted the use of lightweight materials such as carbon fibre,
now being used by other sectors such as automobiles and civil construction, where Carbures has also taken
a strong foothold. Carbures has made a number of acquisitions, diversified geographically in terms of clients
and products, and incorporated new executives with ample experience. Carbures’ strategy is to grow in the
aeronautic activity and develop new business lines (civil works, automotive, production lines manufacturing)
allowing large scale production of carbon fibre products. Carbures is now beginning an important investment
phase, to grow organically and inorganically, nationally and abroad, that will make the company a world
reference in the production of fibre carbon structures
SWOT Analysis
Strengths
• Carbon fiber is a key material for the aerospace industry.
Entrance barriers to the sector
• It is expected a significant growth in its use. Located in
Europe, USA and China
Weaknesses
• Execution risk of new programs and new products.
• Its main customer's financial position is strong, and its
order backlog also, which gives visibility to suppliers.
Opportunities
• The A350 and the A320 Neo programs offer good
prospects.
• Carbures is growing via acquisitions and organically.
• Rapid growth could affect its management.
Main shareholders: Free float 35.0%; Neuer Gedanke 19.5%; SPE Juárez 8.0%;
Rafcon Economist 6.6%;
• Volatility of the air traffic
Threats
• Risk of delays in aeronautical programs
• Risk of a slower than expected pace in the launch of the
new industrial activities.
• Newcomers to the production lines manufacturing
business line
All share prices at 19/05/14.
• Carbon fiber is beginning to be used in the automotive
sector, in civil works and other activities.
PRICE (SHORT & LONG AVERAGE)
Recommendation: If the growth plans remain on course, the estimated EBITDA for 2013 (EUR9.5m) will be
10 fold in 2016 (EUR95.3m). We begin our coverage on Carbures Europe with a fair value of
EUR45.10/share and a Buy recommendation.
FINANCIAL CALENDAR (Source: Precise)
titre
40
Target Price: EUR 45.10
35
30
25
CARBURES EUROPE SA SMALL & MID CAPS SELECTION
Analyst(s)
20
15
10
5
0
Mar 11
Source : Factset
56
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Iñigo Recio Pascual
+34 91 436 7814
BEKA Finance
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 7.66
Accumulate
CAVERION
CAV1V.HE/CAV1V FH
Market capitalisation: EUR 962m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.90 / 3.75
12/12
2,803
85.8
3.1%
61.6
2.2%
42.9
61.6
67.2
-9.8
0.0
-0.1
45.2
17.6%
2.4
12/13
12/14e
12/15e
2,544
2,520
2,667
71.4
105
125
2.8%
4.2%
4.7%
49.8
81.5
102
2.0%
3.2%
3.8%
35.9
59.7
73.2
44.9
62.4
73.2
57.5
82.8
96.3
86.3
12.5
-41.4
0.3
0.0
-0.1
1.2
0.1
-0.3
10.8
21.1
27.8
13.4%
20.9%
26.8%
1.9
2.9
3.7
2.7
2.4
2.4
0.5
0.4
0.3
16.8
9.2
7.3
24.0
11.9
8.9
24.9
15.4
13.1
4.5
3.5
3.1
7.5%
10.9%
10.3%
2.9%
4.7%
6.1%
0.36
0.50
0.58
-27.1%
39.0%
17.3%
1.99
2.22
2.44
0.22
0.36
0.47
4.4%
7.3%
-8.5%
Avg. Daily nb traded shares:884,897
0.49
3.08
0.00
Main shareholders: Free float 100.0%; Structor S.A. 12.1%; Varma Mutual Pension Insurance Co 6.1%;
Profile: Caverion is one of the leading building systems and industrial service companies in the Nordic
countries, Central Europe, Russia and the Baltic countries. Caverion designs, builds and maintains userfriendly and energy-efficient building systems and offers industrial services. Building services, which
comprises building systems and their service and maintenance in all of the Caverion’s countries of
operation, accounts for the majority of Caverion’s revenue. In addition, Caverion offers industrial services
mainly in Finland and Sweden, covering project deliveries of technical systems and processes to industry
together with industrial service and maintenance as well as modernisation projects. In 2012, approximately
75% of revenue was generated in Northern Europe. Service and maintenance operations accounted for 64%
of revenue in Northern Europe and 31% in Central Europe.
SWOT Analysis
Strengths
• Comprehensive service portfolio
Weaknesses
• Low entry barriers
• Good market positions in core markets
• Fragmented market, no pricing power
• Good cash conversion
• Low visibility from outside
• Focus on enengy efficiency
• Poor management track record
Opportunities
• Successful turnaround in Northern Europe
Threats
• Slow GDP growth keeping competition up
• Consolidation opportunities
• Profitability turnaround fails
• Upturn in Nordic non-residential new construction
volumes
• Streak of successful acquisitions continues
Herlin Antti 3.6%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
9.0
Recommendation: A profitability rebound to the level of competitors through project selection, cost savings
and efficiency improvement is essential for Caverion’s investment case. At the EV/EBIT valuation of 10, the
share price has upside to EUR 12 (+40%) if the company attains its 6% EBITDA margin target, lowers net
working capital mildly below zero and records 6% top-line growth by 2016. Measures to release working
capital will support cash flow over the coming years. Favourable risk/reward.
10/06/14 Analyst Meeting
8.5
Target Price: EUR 9.50
8.0
7.5
7.0
6.5
CAVERION SMALL & MID CAPS SELECTION
Analyst(s)
6.0
5.5
5.0
4.5
4.0
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Matias Rautionmaa
+358 10 252 4408
Pohjola
[email protected]
57
Belgium
SMALL & MID CAPS SELECTION
EUR 74.60
Accumulate
CFE
CFEB.BR/CFEB BB
Market capitalisation: EUR 1888m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR84.19 / 41.11
12/12
1,898
201
10.6%
81.4
4.3%
49.4
49.4
169
400
0.7
2.0
10.6
4.5%
0.6
0.7
0.5
4.9
12.0
11.6
1.1
0.4%
2.6%
3.77
-16.4%
40.67
1.15
62.5%
12/13
12/14e
12/15e
2,267
3,496
3,566
198
458
474
8.7%
13.1%
13.3%
-28.6
210
232
nm
6.0%
6.5%
-81.2
118
139
-81.2
118
139
138
377
393
783
646
522
0.7
0.5
0.4
4.0
1.4
1.1
7.5
14.4
18.2
-0.9%
6.4%
7.0%
-0.1
0.8
0.9
1.0
1.0
1.0
1.1
0.7
0.7
12.3
5.6
5.2
nm
12.2
10.6
nm
16.0
13.6
1.4
1.5
1.4
-0.9%
8.8%
8.2%
1.5%
1.7%
1.9%
-3.21
4.67
5.49
-chg
+chg
17.5%
47.13
50.56
54.65
1.15
1.25
1.40
21.6%
15.8%
-6.2%
Avg. Daily nb traded shares:23,043
Main shareholders: Ackermans & van Haaren 60.4%; Free float 27.5%; Vinci 12.1%;
Profile: CFE is an international multidisciplinary group, active in dredging and marine engineering,
construction, real estate, multitechnics, rail & road and PPP-concessions. CFE forms a coherent whole in
which each division is supported by the others. CFE’s dredging division DEME is by far the most important
business line, accounting for c. 95% of EBITDA. The concessions and property development divisions award
work to the general contracting companies, which in turn are potential customers of the companies making
up the multitechnics division, which maintain the structures built under public private partnership contracts.
SWOT Analysis
Strengths
• Structural market growth in dredging and well-filled order
book
• Oligopolic market: dominant market positions of top-5
world-wide
• Stable management and clear strategy with balanced
activity portfolio
• Important barriers of entry: technological,
geographical/topographical, capital needs…
Opportunities
• Opening of (semi-)protected dredging markets such as
China, India and the US
• Exposure to renewable energy, deep-sea mining,
treatment of industrial polluted water, marine services…
• Improving market momentum (amongst others larger
works upcoming in Singapore)
• Ramp-up of PPP & concessions segment and synergies
between segments
Threats
• Cost inflation and cost over-run in Public Private
Partnerships
• Stated budgetary constraints and financing for the Public
Private Partnership segment
• Declining dredging capacity utilisation when additional
capacity is added or made in unsuited niches
• Exposure to geopolitical risks
Recommendation: Throughout the years, in support of DEME’s core business, viz. dredging and land
reclamation, a number of new entrepreneurial initiatives with future growth potential have been developed,
such as hydraulic engineering, offshore and environmental works, deep-sea mining, marine services…
The recent transformational deal with AvH warrants a re-rating of the stock as CFE has become a true
offshore company with 95-100% of EBITDA derived from maritime infrastructure activities. The stock has
had a strong run thanks to the improved outlook for dredging.
All share prices at 19/05/14.
Target Price: EUR 86.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Weaknesses
• Very capital intensive business in a competitive
environment
• Highly cyclical activity, operations are very dependent on
developments in the world economy
• USD exposure in dredging, geopolitical risks in some
important areas
titre
85
28/05/14 Dividend Payment
80
75
70
65
60
55
45
40
35
Mar 11
58
CFE SMALL & MID CAPS SELECTION
Analyst(s)
Hans D'Haese
50
Source : Factset
2013
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+32 (0) 2 287 9223
Bank Degroof
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 2.67
Rating Suspended
CITYCON
CTY1S.HE/CTY1S FH
Market capitalisation: EUR 1178m
Real Estate
EUR
12/12
226
135
56.4%
28
(68)
90
63
63.40
1,477
2,734
2,392
0.21
0.15
3.24
(20.8%)
3.49
8.2%
5.8%
17.7
12
2.0
1,477
52.4%
5.1%
12/13
12/14e
12/15e
234
237
244
EBITDA (m)
150
151
156
EBITDA margin
60.5%
60.3%
60.4%
Portfolio Result (m)
24
12
0
Net Financial Result
(63)
(61)
(64)
Net Profit (reported)(m)
113
101
93
Net Profit (adj.)(m)
85
88
89
Funds From Operations
85.00
88.02
89.44
Net Debt (m)
1,420
1,468
1,563
Portfolio Value (m)
2,743
2,818
2,937
Enterprise Value (m)
2,651
2,753
2,848
EPS (adj.)
0.22
0.20
0.20
DPS
0.15
0.16
0.16
IFRS NAVPS
3.04
3.13
3.18
Premium/(discount)
(15.7%)
(14.7%)
(16.1%)
EPRA NAVPS
3.10
3.19
3.24
Earnings adj. yield
8.3%
7.5%
7.6%
Dividend yield
5.6%
5.9%
6.0%
EV/EBITDA
17.6
18.2
18.2
P/E (adj.)
12
13
13
Int. cover(EBITDA/Fin.int)
2.4
2.5
2.5
Net debt/(cash) (m)
1,420
1,468
1,563
Net Debt/Total Assets
47.7%
48.1%
49.3%
Abs. Performances(12m,6m,3m,1m):
2.7%
-0.4%
1.1%
12 month High/low: EUR2.85 / 2.23
Avg. Daily nb traded shares:338,765
Main shareholders: Free float 91.0%; Gazit-Globe Ltd. 9.0%; Ilmarinen Mutual Pension Insurance Co 0.7%;
Gross Rental Income (m)
Profile: Citycon is an owner, manager and long-term developer of shopping centres. A total of 56% of its
assets are located in Finland, 30% in Sweden and 14% in the Baltics. Citycon owns or manages
36 shopping centres and 33 other retail properties. Common for the core assets is that they are located in
areas where people live and work and, thus, enjoy natural population growth. The shopping centres provide
access to public transportation and benefit from high barriers to entry, such as land constraints and zoning
restrictions. The core assets also boast shared access to education, healthcare, culture or municipality
services. The company's vision is to be leading owner and manager of urban, grocery-anchored shopping
centres in the Nordics and Baltics.
SWOT Analysis
Strengths
• Expertise in managing shopping centres
Weaknesses
• Dominant main owner
• Good quality of top assets
• Chronic discount to NAV makes growth difficult
Opportunities
• Successful sale of non-core supermarket premises to
release capital
• Several attractive development opportunities in the
property portfolio
Threats
• Equity issues on discount to NAV to fund growth
• e-Commerce erodes growth
• Aggressive expansion on too tight prices
State Pension Fund 0.6%;
All share prices at 19/05/14.
Recommendation: Since Pohjola Bank plc has committed to act as the lead manager of a rights issue
proposed recently, we provide no recommendation or target price for Citycon for the moment (previously
Accumulate, EUR 2.9).
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.4
10/07/14 Results
3.2
3.0
06/06/14 AGM
2.8
2.6
2.4
CITYCON SMALL & MID CAPS SELECTION
Analyst(s)
Matias Rautionmaa
2.2
2.0
Mar 11
2014H1
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+358 10 252 4408
Pohjola
[email protected]
Jun 14
Source : Factset
59
Germany
SMALL & MID CAPS SELECTION
EUR 8.21
Accumulate
COMDIRECT
CDBG.DE/COM GR
Market capitalisation: EUR 1156m
Financial Services
EUR
12/12
Total Revenue (m)
330
Pre-Provision Profit (PPP) (m)
93.0
Loan Impairment Charge (m)
-4.4
Operating profit (OP) (m)
88.6
Earnings before tax (m)
92.3
Net profit (reported) (m)
73.4
Net profit (adj.) (m)
73.4
Shareholders equity (m)
586
Tier 1 Ratio
46.1%
Cost/Income ratio
71.8%
ROE (adj.)
12.9%
NPL ratio (gross)
2.3%
NPL coverage
0.0%
LIC/Avg. RWA
0.8%
P/Pre-Provision Profit per Share
11.9
P/E (adj.)
15.1
P/BV
1.9
P/NAV
1.9
Dividend yield
5.6%
PPPPS
0.66
EPS (adj.)
0.52
EPS (adj.) growth
-34.4%
BVPS
4.16
NAVPS
4.16
DPS
0.44
Abs. Performances(12m,6m,3m,1m):
8.5%
12 month High/low: EUR8.87 / 7.07
Main shareholders: Commerzbank 79.9%; Free float 20.2%;
12/13
12/14e
12/15e
332
344
361
71.9
80.6
94.2
-1.4
-1.0
-1.0
70.5
79.6
93.2
80.0
85.6
97.2
60.5
61.6
70.0
60.3
61.6
70.0
552
557
567
47.2%
45.5%
43.7%
78.3%
76.6%
73.9%
10.6%
11.1%
12.4%
2.3%
2.3%
2.3%
0.0%
26.7%
26.7%
0.2%
0.2%
0.1%
16.2
14.3
12.3
19.4
18.8
16.5
2.1
2.1
2.0
2.1
2.1
2.0
4.4%
4.4%
4.8%
0.51
0.57
0.67
0.43
0.44
0.50
-17.8%
2.2%
13.6%
3.92
3.96
4.03
3.92
3.96
4.03
0.36
0.36
0.40
-2.2%
-4.9%
0.6%
Avg. Daily nb traded shares:12,712,000
Profile: Comdirect is Germany’s biggest discount broker in terms of B2C brokerage accounts (844,083
acc. as of 31/03/2014) and among the leading online banks in Germany with 1.5m Tagesgeld PLUS and
more than 1m current accounts. The bank’s major revenue source is net commission income which it
receives for the execution of stock market transactions. Net interest income has become more and more
important as a revenue source following comdirect’s conversion to an online bank.
Due to higher commission income (+7% yoy) and a stabilizing net interest income (+1% yoy) we expect
pretax profit to grow by 7% yoy in 2014e. Key earnings trigger in the mid-term should he higher short term
rates which should have a significant positive earnings impact as comdirect holds around EUR 4bn of retail
deposits (that do not pay any interest).
SWOT Analysis
Strengths
• Highly scalable business model
Weaknesses
• Relatively high dependence on equity markets
• Solid capitalization
• Solid asset quality
Opportunities
• Market potential remains huge
Threats
• Price war in online banking
• Rising short term rates
• New aggressive competitors enter the market
All share prices at 19/05/14.
Recommendation:. We recommend accumulating the shares with a target price of EUR 9.50.
Target Price: EUR 9.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
9.0
8.5
COMDIRECT
8.0
Philipp Häßler, CFA
7.0
6.5
6.0
Mar 11
Source : Factset
60
SMALL & MID CAPS SELECTION
Analyst(s)
7.5
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Equinet Bank
+49 69 58997 414
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 43.03
Buy
CORP. FINANCIERA ALBA
ALB.MC/ALB SM
Market capitalisation: EUR 2509m
Financial Services
PROFIT & LOSS (EURm)
Revenues
Non Recurrent Items
Net Profit (reported)
BALANCE SHEET (EURm)
Shareholders Equity
Minorities equity
Net Debt
NAV Constituents & Total NAV (EURm)
ACS
Acerinox
Indra
Ebro Foods
Clínica Baviera
Antevenio
NON-LISTED
REAL ESTATE
OTHER ASSETS
Total Net Asset Value
Discount/(Premium) to NAV
Listed shareholdings on NAV
OTHER ITEMS (EURm)
Total Market Cap
Debt / Equity
Payout Ratio
P/BV
Dividend Yield (Gross)
PER SHARE DATA (EUR)
EPS (reported)
NAVPS
BVPS
DPS
2012
-263.2
0.0
-299.4
2013
299.1
0.0
226.9
2014e
299.1
0.0
226.9
2015e
299.1
0.0
226.9
2,764.0
0.7
144.2
2,951.1
0.4
-255.6
3,064.6
0.4
-265.5
3,178.0
0.4
-275.3
911.9
670.9
274.5
188.3
36.7
3.4
208.8
220.2
74.4
2,765.4
64.8%
81.8%
1,437.5
680.7
257.5
207.5
34.7
2.9
243.7
214.2
946.1
4,024.8
64.1%
65.1%
1,437.5
680.7
257.5
207.5
34.7
2.9
243.7
214.2
946.1
4,024.8
64.1%
65.1%
1,437.5
680.7
257.5
207.5
34.7
2.9
243.7
214.2
946.1
4,024.8
64.1%
65.1%
2,058.6
5.2%
nm
0.7
2.8%
2,477.8
-8.7%
25.7%
0.8
2.3%
2,508.6
-8.7%
25.7%
0.8
2.3%
2,508.6
-8.7%
25.7%
0.8
2.3%
0.000
47.515
47.410
1.000
3.896
69.108
50.620
1.000
3.896
69.108
52.566
1.000
3.896
69.108
54.511
1.000
Source: Company, BEKA Finance estimates
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
50
45
40
12/06/14 AGM
2013
11/06/14 AGM
2013
Profile: Corporación Financiera Alba (ALB) is a private equity investment company 68.8% owned by
“Grupo March” (owner also of Banca March and Fundación Juan March). Alba’s main activity is to invest in
other companies (Spanish mainly), either listed or not. The company has a select portfolio of equity
shareholdings (ACS, ACX, IDR, EBRO, CBAV & Antevenio). In addition, Alba directly manages a real
estate property business (close to 82,250m²) invested in top-tier office buildings in prime downtown or
suburban business locations, strongly focused on the cities of Madrid and Barcelona.
H1'2013 Results: In 1Q'2014 Corporación Financiera Alba (ALB) records a consolidated net profit of
EUR77.2, 25.9% below the EUR104.2m in 1Q’2013. The 1Q’2014 earnings drop is mainly attributable to
the fact that the capital gain obtained by ALBA (EUR46.2m, pretax) is lower vs. the EUR89.7m that earned
in 1Q’2013 (Prosegur stake sale). 1Q'2014 Activity: i) Investments / Divestitures: sale of 1.31% stake of
ACS by EUR117.1m (pretax capital gain of EUR46.2m) and acquisition of 1.80% stake of Ebro Foods, for
a EUR45.1m consideration; ii) Income from Equity portfolio: increases 8.6%Y/Y to EUR44.0m vs.
EUR40.5m same period last year, growth attributable to the earnings stream improvement of the
companies in which ALBA is invested; iii) Financial Income (net): amounts to EUR3.5m vs. EUR1.2m at
1Q’2013, mainly due to increase in ST investments (EUR355m vs. EUR256m in1Q’14); iv) Corporate Tax:
of EUR14.2m vs. EUR25.0m (1Q'2013), recapping the divestitures impact (lower gains & lower tax).
SWOT Analysis
Strengths
• Proven management capacity.
Weaknesses
• Heavy weighting of listed stocks in the investment
portfolio.
• Valuation volatility due to exposure of the equity markets.
• Robust history in attaining capital gains.
• Active in share buy backs and treasury stock redemptions,
enhancing shareholder value.
Opportunities
• Healthy financial statements.
Threats
• Potential losses from the quoted companies included in
the investment portfolio.
• Positive recommendation on main listed companies
(mostly covered by ESN).
• Sound position to take advantage from economic
recovery.
35
Recommendation: We value ALBA shares at EUR55.3/sh (previous EUR52.8), backed by the good quality
of ALBA’s equity portfolio of listed companies, that recently have seen improvements in earnings and
outlook. We reiterate our Buy recommendation
30
25
20
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Target Price: EUR 55.30
Source : Factset
Analyst(s)
Javier Bernat
BEKA Finance
+34 91 436 7816
[email protected]
61
Finland
SMALL & MID CAPS SELECTION
EUR 15.14
Buy
CRAMO
CRA1V.HE/CRA1V FH
Market capitalisation: EUR 656m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR16.83 / 8.61
12/12
688
178
25.9%
66.0
9.6%
40.1
34.1
152
349
0.7
2.0
8.7
5.5%
0.6
0.7
0.9
3.5
9.5
9.6
0.6
14.5%
5.3%
0.82
-23.3%
12.85
0.42
50.6%
12/13
12/14e
12/15e
658
658
701
173
176
204
26.4%
26.8%
29.0%
66.5
72.0
99.2
10.1%
10.9%
14.2%
42.5
43.9
65.0
39.5
43.9
65.0
149
148
169
365
336
336
0.7
0.6
0.6
2.1
1.9
1.7
11.7
11.1
12.7
5.5%
6.0%
7.9%
0.6
0.7
0.9
1.1
1.1
1.0
1.5
1.5
1.4
5.8
5.5
4.8
15.3
13.6
9.8
16.9
14.9
10.1
1.3
1.3
1.2
3.5%
0.6%
1.9%
4.0%
4.3%
5.3%
0.91
1.01
1.50
10.7%
11.2%
48.1%
11.55
11.97
12.82
0.60
0.65
0.80
2.3%
-1.4%
0.1%
Avg. Daily nb traded shares:132,306
Main shareholders: Free float 100.0%; Harwall Capital Oy Ab 15.5%; Rakennusmestarit Group 5.1%;
Profile: Cramo is the second largest equipment rental company in the Nordic countries and Central and
Eastern Europe. The company also operates in Germany (10% of sales). The share of the construction
industry as a customer is 57%, meaning a 43% share for non-construction customers.
In the Nordic countries, the equipment rental market has historically grown by twice the rate for construction
volumes. As a market leader in Sweden and the second biggest in Finland, Cramo has captured faster
growth than the equipment rental market. The long-term growth driver for the equipment rental market is
increasing rental penetration. The market offers growth potential as the penetration is developing towards
the 80% rate prevailing in the UK. In the Nordic countries, the penetration rate is currently between 30–40%
and in Eastern Europe around 10%. Increasing rental penetration is driven by the benefits of rental, including
release of capital, cost efficiency due to better capacity utilisation, no maintenance costs, and better access
to equipment as well as higher safety.
SWOT Analysis
Strengths
• Market leader in Sweden with a strong position in several
markets
• Modular space business reduces cyclical fluctuations
Weaknesses
• High importance of the Swedish market
• High operational leverage makes the company a
derivative of construction markets
• High operational leverage makes the company a
derivative of construction markets
Opportunities
• Growth in rental penetration continuing for several years
Threats
• Weakening of the construction cycle
• Cyclical end-markets
• Low penetration in German markets provides long term
potential
• Improving outlook for construction industry
K. Hartwall Invest Oy Ab 5.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: We estimate that Q1 2014 represented the bottom of the European debt crisis-sparked
downtrend for Cramo. The Swedish construction markets started to recover last year, with residential
construction picking up first. Growth in rental demand should contribute to the company’s earnings as of H2.
Last year Cramo made 61% of its profit in Sweden. Our target price leans on our 2015 forecasts and the
EV/EBITDA valuation of 5.5.
Target Price: EUR 18.50
titre
18
16
14
CRAMO SMALL & MID CAPS SELECTION
Analyst(s)
12
10
Matias Rautionmaa
8
6
Mar 11
Source : Factset
62
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4408
Pohjola
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 6.29
Reduce
CREDEM
EMBI.MI/CE IM
Market capitalisation: EUR 2091m
Banks
EUR
12/12
Total Revenue (m)
971
Pre-Provision Profit (PPP) (m)
271
Loan Impairment Charge (m)
-89.1
Operating profit (OP) (m)
182
Earnings before tax (m)
228
Net profit (reported) (m)
121
Net profit (adj.) (m)
96.6
Shareholders equity (m)
1,985
Tier 1 Ratio
9.4%
Cost/Income ratio
65.6%
ROE (adj.)
5.3%
NPL ratio (gross)
2.9%
NPL coverage
55.3%
LIC/Avg. RWA
0.5%
P/Pre-Provision Profit per Share
5.1
P/E (adj.)
14.2
P/BV
0.7
P/NAV
0.8
Dividend yield
2.9%
PPPPS
0.82
EPS (adj.)
0.29
EPS (adj.) growth
-3.2%
BVPS
5.11
NAVPS
5.11
DPS
0.12
Abs. Performances(12m,6m,3m,1m):
43.7%
12 month High/low: EUR7.78 / 3.58
Main shareholders: Credemholding 76.9%; Free float 23.1% (0.0%);
12/13
12/14e
12/15e
995
1,017
1,056
335
341
370
-120
-98.4
-77.7
215
243
292
211
243
292
116
136
164
118
136
164
2,156
2,252
2,375
9.9%
10.8%
10.3%
65.2%
66.0%
64.7%
5.7%
6.2%
7.1%
3.6%
3.4%
3.3%
58.2%
58.2%
58.2%
0.7%
0.6%
0.5%
5.8
6.1
5.7
16.4
15.4
12.8
0.9
0.9
0.9
1.0
1.1
1.0
1.9%
1.9%
3.2%
1.01
1.03
1.11
0.36
0.41
0.49
22.3%
15.1%
20.6%
5.62
5.91
6.29
5.62
5.91
6.29
0.12
0.12
0.20
10.4%
-2.9%
-13.2%
Avg. Daily nb traded shares:153,290,000
Profile: Credem is one of the few privately-owned banks in Italy, as it is controlled with a 77% stake by
Credemholding, a company held by private investors, mainly entrepreneurs, including the Maramotti
family (Credemholding’s main shareholder with about 35.5%).
The FY13 results were slightly better than expected, ending with a net profit down 4% Y/Y to EUR 116m
or 3.6% higher than anticipated, with a stable DPS of EUR 0.12 as we were expecting. The (fully Core)
Tier1 ratio reached 9.9% and Solvency ratio 13.4% based on the Standardized approach.
The operating performance was a bit stronger than estimated, with the gross operating profit increasing
4% to EUR 347m or 2% better than expected, thanks to revenues growing 2.5% to EUR 995m and
operating costs increasing 1.7% to EUR 648m, leading to a C/I ratio of 65%.
The good operating performance was however compensated by higher loan impairments, which grew
35% to EUR 120m or 5% more than expected, with a cost of risk of 60bps which enabled the bank to
increase the NPL coverage ratio to 58.2% vs. 55.4% one year ago.
In detail, the NII was down only 0.4% to EUR 466m thanks to continuous repricing and a resurgence of
lending growth in Q4. Net commissions increased 3% to EUR 425m thanks to strong inflows in asset
mgmt. products. The trading income grew 10% to EUR 48m thanks to the harvesting of the Italian Govies
portfolio.
Credem may post a 3-4% gain in revenues this year to over EUR 1bn as the NII is expected to be close
to last year’s level while a 6-7% increase in non-interest income will drive revenue higher. Credem’s
operating costs may increase 3-4% this year because of investments in personnel and technology. The
CEO also said he expects 2014 net profit and dividend in line with last year (EUR 116m and EUR 0.12
per share respectively).
SWOT Analysis
Strengths
• Stable shareholder structure
Weaknesses
• High cost/income ratio
• Solid funding and strong liquidity
• Sub-optimal presence in asset management
Opportunities
• Attrition in competitors’ client bases
Threats
• Consolidating sector
• Branch acquisitions
• Growing cost of credit risk
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
8
7
6
22/05/14 Dividend Payment
2013
19/05/14 Ex Dividend Date
2013
Recommendation: Credem is best in class on asset quality and profitability. With a P/NAV of 1.2x we think
this comes at a high price and have a Reduce recommendation on the stock.
5
Target Price: EUR 6.00
4
3
2
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Luigi Tramontana
Banca Akros
+39 02 4344 4239
[email protected]
63
Italy
SMALL & MID CAPS SELECTION
EUR 1.50
Hold
CREVAL
PCVI.MI/CVAL IM
Market capitalisation: EUR 720m
Banks
EUR
Total Revenue (m)
Pre-Provision Profit (PPP) (m)
Loan Impairment Charge (m)
Operating profit (OP) (m)
Earnings before tax (m)
Net profit (reported) (m)
Net profit (adj.) (m)
Shareholders equity (m)
Tier 1 Ratio
Cost/Income ratio
ROE (adj.)
NPL ratio (gross)
NPL coverage
LIC/Avg. RWA
P/Pre-Provision Profit per Share
P/E (adj.)
P/BV
P/NAV
Dividend yield
PPPPS
EPS (adj.)
EPS (adj.) growth
BVPS
NAVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.75 / .86
Main shareholders: Free float 100.0%;
12/12
810
270
-391
-121
-425
-322
-103
1,982
8.1%
65.8%
-7.0%
5.7%
59.7%
1.9%
1.9
nm
0.3
0.3
0.0%
0.61
-0.23
-chg
4.48
3.78
0.00
50.7%
12/13
12/14e
12/15e
828
875
867
321
365
360
-266
-323
-227
55.1
41.7
133
39.9
41.7
133
11.7
12.3
63.8
17.1
12.3
63.8
1,908
1,931
1,995
8.6%
10.8%
10.8%
60.8%
57.5%
57.8%
1.0%
0.8%
3.9%
8.9%
9.5%
8.9%
58.0%
58.0%
58.0%
1.4%
1.8%
1.3%
2.0
2.0
2.0
37.5
nm
11.3
0.3
0.4
0.4
0.4
0.4
0.4
0.0%
0.0%
2.7%
0.68
0.76
0.75
0.04
0.03
0.13
+chg
-29.5%
nm
4.05
4.02
4.15
3.40
3.38
3.51
0.00
0.00
0.04
11.5%
17.4%
-10.3%
Avg. Daily nb traded shares:1,743,875,000
Profile: Credito Valtellinese (Creval) is a cooperative banking group with almost 550 branches, o/w some 230 are located
in Lombardy (3.5% market share).
Creval’s EGM approved a EUR 400m rights issue, possibly due to take place before next Jul and pre-underwritten by a
consortium led by Banca IMI, Credit Suisse and Mediobanca. The capital increase is aimed at adding some 220bps and
reaching a pro-forma fully-loaded CET ratio of 10.9% as at YE13, in line with peers, including the impact of the SME
supporting factor, estimated in 35bps. The organic capital generation should be rather limited over 2014-16, as half of the
40bps of retained earnings should be absorbed by RWA growth, with a net capital generation of 20bps. Creval also
included in the plan some 70bps of capital generation arising from non-core asset disposals and other strategic actions.
We think the group is considering the following: 1) the sale & lease back of some 150-200 instrumental properties to a
specialised property company, which may potentially generate a one-off capital gain in the short term; 2) the disposal of
some EUR 100m NPL to a specialised partner to free up liquidity and capital; 3) a partnership with a specialised partner in
the leasing activity to become a distributor of third-party products and free up liquidity and capital on the new production.
Finally, the AIRB model validation, which the bank postponed to the end of its business plan but which may happen in
2015, is expected to cut RWA for some EUR 5.4bn, corresponding some 150bps of higher equity, partly compensated by
the creation of EUR 270m (or 15-20bps) shortfall on expected losses, with net positive impact on the CET ratio of 130bps.
Over 2014-16 the revenue mix is due to improve as the recovery will be driven by the NII and net commissions generated
by the commercial network, while the financial & other income sources are expected to decrease. Positively, the plan is
based on very prudent macro assumptions, The NII growth will be supported mainly by loan and funding repricing.
Positively, the mgmt. indicated the targeted 2.38% commercial spread has already been achieved end-Feb and will be
kept stable over the coming years.
Following the huge cost cutting of the last few years, we see this lever losing steam in the coming ones, as operating
expenses will not decline over the plan horizon. The bank will continue to streamline its operations, with 165 less staff or
3.8% of the current workforce. However, the benefits on personnel costs (less than EUR 10m) will be compensated by the
growth in other admin expenses. We think more aggressive branch closures would be needed to obtain further cost cuts.
Most of the profitability rebound will come from the reduction in the cost of credit risk, with FY14 remaining tough and
guided at 131bps, FY15 guided at 115bps, and FY16 guided at 96bps. This looks coherent with the expected stabilization
of Italian GDP embedded in the plan.
SWOT Analysis
Strengths
• Deeply rooted branch network
Weaknesses
• Weak capital position
• Solid funding and strong liquidity
• High cost/income ratio
Opportunities
• Attrition in competitors’ client bases
Threats
• Consolidating sector
• Branch acquisitions
• Growing cost of credit risk
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.5
3.0
2.5
Recommendation: We stick to Hold with EUR 1.35 target price.
2.0
Target Price: EUR 1.35
1.5
1.0
0.5
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Luigi Tramontana
64
Banca Akros
+39 02 4344 4239
[email protected]
Portugal
SMALL & MID CAPS SELECTION
EUR 7.13
Hold
CTT
CTT.LS/CTT PL
Market capitalisation: EUR 1070m
Industrial Transportation
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.20 / 5.53
12/13
705
122
17.3%
87.2
12.4%
61.0
61.0
95.8
-485
-1.8
-4.0
29.0
79.7%
10.8
4.5
0.5
2.9
4.1
13.7
3.1
8.7%
7.2%
0.41
70.7%
1.82
0.40
12/14
704
126
17.9%
101
14.3%
69.8
69.8
87.4
-484
-1.7
-3.8
30.2
83.1%
11.3
6.7
0.8
4.6
5.8
15.3
3.8
5.8%
5.9%
0.47
14.4%
1.87
0.42
12/15
12/16
704
701
130
134
18.4%
19.1%
104
108
14.8%
15.4%
72.5
75.7
72.5
75.7
90.2
93.2
-491
-498
-1.7
-1.7
-3.8
-3.7
32.8
35.8
86.5%
89.5%
11.7
12.1
6.6
6.5
0.8
0.8
4.5
4.3
5.6
5.3
14.7
14.1
3.7
3.6
6.8%
7.1%
6.1%
6.4%
0.48
0.50
3.9%
4.3%
1.91
1.96
0.44
0.45
-0.6%
-8.0%
Avg. Daily nb traded shares:676,592
Profile: CTT – Correios de Portugal, is the leader in the Portuguese postal sector with c. 94% market
share of the postal market, being the largest logistics operator in Portugal and the single designated
provider of the Universal Service Obligations (USO) until 2020.CTT is a Portuguese state owned
company, offering a wide range of services through its 4 business units, covering 3 product markets: (i)
Mail (including mail, business solutions and retail & others); (ii) Express & Parcels; and (iii) Financial
Services.
CTT is a strong trusted brand that benefits from a 500-year history and a unique distribution network with a
country wide coverage and high level of capillarity. Its strong brand combined with a strong balance sheet
and resilient cash flow generation gives CTT a privileged position to leverage its network. The company’s
solid balance sheet and its ability to generate cash are excellent foundations to implement a generous
dividend policy going further (at least 90% pay-out ratio from 2014 onwards).
SWOT Analysis
Strengths
• Large retail network
Weaknesses
• Declining mail volumes
• Dense last mile network
• Low margins in express & parcels
• Solid balance sheet
• Loss of market share in express & parcels
• Strong margins in financial services
Opportunities
• Growth of e-commerce
Threats
• E-substitution
• Innovation and optimization of products
• Competition in parcels
Main shareholders: Free float 61.4%; Portuguese government 31.5%; Goldman Sachs 5.0%;
• Network leveraging
• Economic environment
Unicredit 2.1%;
• Cross selling
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: We arrived at a YE14 fair value of EUR 7.90 per and a Hold recommendation.
titre
8.5
30/07/14 Results
8.0
Target Price: EUR 7.90
2014Q2
7.5
CTT SMALL & MID CAPS SELECTION
Analyst(s)
7.0
6.5
6.0
5.5
mar 11
Source : Factset
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Carlos Jesus
Artur Amaro
+351 21 389 6812
+351 213 89 6822
Caixa-Banco de Investimento
[email protected]
[email protected]
65
Italy
SMALL & MID CAPS SELECTION
EUR 23.28
Accumulate
DANIELI
DANI.MI/DAN IM
Market capitalisation: EUR 1609m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR26.83 / 17.76
06/12
3,081
303
9.8%
214
7.0%
193
192
265
-826
-0.6
-2.7
nm
25.0%
2.6
0.4
0.1
0.7
1.0
7.0
1.0
-47.6%
2.0%
2.36
-0.3%
16.08
0.33
10.9%
06/13
06/14e
06/15e
2,783
2,869
2,945
277
288
304
10.0%
10.0%
10.3%
182
193
208
6.6%
6.7%
7.1%
136
136
148
162
149
161
232
232
244
-851
-1,036
-1,118
-0.6
-0.6
-0.6
-3.1
-3.6
-3.7
high
high
high
19.6%
17.9%
17.4%
2.0
1.9
1.8
0.6
0.8
0.6
0.1
0.2
0.2
1.4
2.1
1.7
2.1
3.2
2.6
9.0
12.7
11.8
1.0
1.1
1.0
7.4%
-2.4%
3.9%
1.4%
1.4%
1.4%
2.00
1.84
1.98
-15.3%
-8.0%
7.6%
17.50
21.01
22.99
0.33
0.33
0.33
7.5%
-13.2%
-6.2%
Avg. Daily nb traded shares:48,582
Main shareholders: Sind International 67.6%; Free float 32.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
28
26
24
22
20
Profile: Danieli Group is one of the three largest worldwide suppliers of equipment and plants to the metals
industry. The Group is involved in the construction and sale of plants for the iron and steel industry, offering
a range of machines from primary process management to production of the finished products. Danieli also
operates in the production of special steel through its subsidiary ABS (Acciaierie Bertoli Safau) located in
Italy (near Udine), exporting about 65% of its steel output; the main reference markets for its products are
the automotive sector, petrochemical, mechanics and pipe industries.
SWOT Analysis
Strengths
• Strong worldwide leadership in the core business
Weaknesses
• Profitability exposed to steel price fluctuations
• Recognised high technological know-how and continuous
investments in R&D
• Country risk: Danieli works often in countries
characterized by strong instability
• Capital intensive business
Opportunities
• Continuous growing trend in steel demand in the
emerging markets (especially Far East, Middle East and
Eastern
Europe)
•
Revamping
process of the old plants in Europe and USA
Threats
• Potential excess of capacity in steelmaking
9M 13/14 sales increased by 11% Y/Y thanks to the strong sales increase in the steel making division (+23%)
and the good sales recovery in the plant making division (+7%). 9M EBITDA grew by 15%, especially thanks
to the continuous strong improvement in the operating margins of the steel making sector (+62%) and a stable
profitability in the plant making sector.
Good trend the order book: Danieli’s total order book on 30 March 14 was of EUR 3,145m (EUR 3,110m on 31
December 2013). We remind investors that, based on the company guidance, the order book at the end of
June 2014 is expected to be around EUR 3,000/3,100.
Management confirmed FY 13/14 guidance: based on 9M results and on the visibility on the next quarter, the
management is confident to reach annual results in line with the guidance (FY 13/14 sales 2,800/3,000; FY
13/14 EBITDA 270/290). So, we confirm our estimates, which are substantially in line with the guidance: FY
14e sales at EUR 2,868.6m and FY 14e EBITDA at EUR 287.8m.
Sector perspectives: owing to the current over capacity in the steel making sector, the demand of new plants
will be weak in the next 2/3 years. Nevertheless, the expected weaker trend in the plant making sector will be
partially offset by the growing sales and profitability expected in the steel making division thanks to the
important investments to increase the production capacity.
Recommendation: the ongoing recovery in the steel making allows us to confirm our Accumulate
recommendation and our target price of EUR 28.60 calculated based on our DCF model (1.2% perpetual
growth rate and WACC from 9.7% to 9.4)%; EUR 19.80 for the saving shares assuming a 30% discount).
Target Price: EUR 28.60
18
16
14
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
DANIELI SMALL & MID CAPS SELECTION
Analyst(s)
Paola Saglietti
66
• Entry of Chinese low cost manufacturers in traditional
steel plants in the long term
• A sudden slowdown in the emerging economies and a
longer-than expected economic stagnation could entail a
strong drop in the order book in the plant making division
+39 02 4344 4287
Banca Akros
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 8.70
Buy
DATALOGIC
DAL.MI/DAL IM
Market capitalisation: EUR 508m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR9.86 / 6.19
12/12
462
63.2
13.7%
16.3
3.5%
10.2
12/13
12/14e
12/15e
451
486
533
60.0
66.8
80.2
13.3%
13.7%
15.0%
45.5
49.7
64.1
10.1%
10.2%
12.0%
26.9
30.2
42.8
29.5
33.5
45.3
41.4
47.3
58.9
97.0
74.0
45.3
0.5
0.3
0.2
1.6
1.1
0.6
9.6
9.4
11.3
15.4%
16.2%
19.6%
1.9
1.9
2.6
2.1
2.0
1.8
1.4
1.3
1.1
10.4
9.4
7.5
13.8
12.6
9.3
18.0
16.9
11.9
2.6
2.4
2.0
5.2%
5.3%
5.6%
1.7%
1.7%
1.8%
0.46
0.52
0.73
162.6%
12.1%
41.8%
3.17
3.69
4.42
0.15
0.15
0.15
3.0%
12.2%
-7.6%
Avg. Daily nb traded shares:18,288
52.8
121
0.7
1.9
18.1
5.0%
0.6
1.7
1.2
8.8
34.2
37.7
2.2
-12.9%
2.3%
0.18
-60.5%
2.97
0.15
42.2%
Main shareholders: Hydra 67.2%; Free float 32.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
10.0
Profile: Datalogic provides products and solutions in Automatic Data Capture (ADC) and Industrial Automation (IA)
for the retail, manufacturing, transportation & logistics and healthcare industries. Its products are used in over a
third of the world’s checkouts, airports and mail sorting offices. Datalogic produces innovative bar code readers,
data collection mobile computers, sensors, vision systems and laser marking systems. Over the last ten years,
Datalogic has been transformed from a mid-sized player into a global market leader in the market of bar code
readers and data collection mobile computers and vision systems (sales CAGR 2001-13 was +12%). The
management has proved its ability to mix organic growth (a portfolio of over 1,000 patents) and growth through
acquisitions (11 companies acquired in the period 1988-2013).
SWOT Analysis
Strengths
• Strong position in high-end ADC market
Weaknesses
• Price erosion
• Experienced management team
• Limited free float
• Geographic diversification
• R&D crucial to preserve the competitive positioning
• High entry barriers
Opportunities
• Potential consolidator in the highly fragmented IA market
Threats
• Working capital absorption
• Growth in the emerging markts
• Slowdown in the European market
Today, after the slowdown in orders in 2012/13 due to the consumer crisis, as shown by the strong results recovery
started in the second part of last year, the big retailers and couriers have started to invest again and Datalogic is
ready to seize on this new growth opportunity through the launch of some innovative products, which could
potentially become the new standard technology in the sector.
Room to improve profitability: according to the 2013-15 strategic plan presented by the management, we believe
that Datalogic will improve its profitability significantly in the coming years thanks to: 1) the increasing sold volumes
in ADC; 2) the important internal reorganisation measures, geared to increase the processes efficiency.
Q1 14 results confirmed the recovery started in H2 13: the good sales growth in the ADC division (+14.5% Y/Y)
allowed the group to offset the still weak sales performance in the IA sector (-4.6% Y/Y). The profitability improved
thanks to the strong operating leverage in the ASD division: while the IA division margins are still suffering for the
ongoing reorganisation process, the ADC division showed a strong recovery in the profitability due to the strong
operating leverage (EBITDA margin moved from 14.4% in Q1 13 to 19.5% in Q1 14).
Recommendation: We confirm our Buy recommendation and we are setting a target price of EUR 12.00 per share,
thus an upside over 30% on the current share price. Our valuation is based on a DCF model (WACC 7.55% and
1.5% of perpetual growth rate).
9.5
9.0
Target Price: EUR 12.00
8.5
8.0
7.5
7.0
6.5
6.0
5.5
5.0
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
DATALOGIC SMALL & MID CAPS SELECTION
Analyst(s)
Paola Saglietti
+39 02 4344 4287
Banca Akros
[email protected]
67
Italy
SMALL & MID CAPS SELECTION
EUR 15.99
Hold
DE LONGHI
DLG.MI/DLG IM
Market capitalisation: EUR 2391m
Household Goods
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR17.00 / 10.92
12/12
1,530
225
14.7%
189
12.4%
118
118
162
61.4
0.1
0.3
6.5
20.6%
2.3
2.3
1.1
7.6
9.1
13.8
2.6
5.6%
2.7%
0.79
26.2%
4.22
0.29
30.0%
12/13
12/14e
12/15e
1,633
1,731
1,847
240
259
289
14.7%
14.9%
15.6%
195
214
244
11.9%
12.3%
13.2%
117
128
151
117
128
151
165
174
196
2.2
-29.7
-80.9
0.0
0.0
-0.1
0.0
-0.1
-0.3
6.3
6.3
6.9
20.5%
21.1%
23.3%
2.3
2.4
2.6
2.5
3.1
3.0
1.1
1.4
1.3
7.5
9.2
8.1
9.2
11.2
9.6
15.2
18.6
15.9
2.6
3.2
2.9
7.1%
3.9%
5.2%
2.5%
2.9%
3.4%
0.78
0.86
1.01
-1.3%
9.8%
17.3%
4.48
4.94
5.48
0.40
0.47
0.54
27.9%
8.8%
-0.1%
Avg. Daily nb traded shares:86,033
Main shareholders: De Longhi Soparfi 67.0%; Free float 33.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
20
18
16
Profile: De Longhi is now a pure leading small domestic appliances player: according to company data De
Longhi is world leader in espresso coffee makers, portable air conditioners, portable heaters and food
preparation. De Longhi has now a high focus on core Coffee Machines and Kitchen segments, that together
represented around 76% of sales. With around 50% of its products positioned in the highest price quartile
(price above EUR 179) vs. main competitors never exceeding 25%, De Longhi could claim to be in the high
end of small domestic appliances segment.
SWOT Analysis
Strengths
• World leader in espresso coffee makers, portable air
conditioners, portable heaters and food preparation
Weaknesses
• Low visibility on sales due to lag time between sell in and
sell out
• Exposure to consumer spending
Opportunities
• Focus on core Coffee Machines and Kitchen segments
Threats
• Price pressure from low cost countries especially China
Recommendation: De Longhi Group Q1 2014 sales were at EUR 338.1m increasing by 7.1% and up
12.0% at constant fx. Sales breakdown by regions & countries: positive performance of European markets
(positive contribution on Group sales from UK, Spain, Scandinavia and Russia-despite fx headwind and a
very difficult market here); sales in US and Brazil were strong; Middle East, India and Africa region was
positive (strong performance from Saudi Arabia); Australia and New Zealand were negative (also due to fx
headwinds).
Q1 2014 EBITDA of EUR 46.1m was higher than our estimates of EUR 44.0m; Q1 2014 EBITDA margin of
13.6% was some 40bps lower than Q1 2013 level and better than expected. Q1 2014 EBIT was at EUR
35.4m vs. our forecasts of EUR 33.6m.
Q1 2014 Net debt was at EUR 54.6m (vs. Q1 2013 level restated of EUR 55.1m); Q1 2014 NWC on sales at
17.0% (vs. Q1 2013 level of 17.3%).
Q1 2014 results were solid despite heavy fx headwinds (impressive results in Russia but weaker in
Nespresso overall in the quarter in our understanding), and ahead of our estimates. Our FY 2014e-FY
2015e estimates point to FY 2014e EBITDA of EUR 258.5m and FY 2015e EBITDA of EUR 288.7m. Our
DCF-based Target Price is of EUR 17.40 per share. Hold.
14
Target Price: EUR 17.40
12
10
8
6
4
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
DE LONGHI SMALL & MID CAPS SELECTION
Analyst(s)
Claudio Giacomiello, CFA
68
+39 02 4344 4269
Banca Akros
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 36.09
Hold
DEUTSCHE EUROSHOP
DEQGn.DE/DEQ GR
Market capitalisation: EUR 1947m
Real Estate
EUR
12/12
210
181
85.7%
8
(86)
0
73
86.44
1,485
3,330
3,528
1.35
1.20
24.50
29.1%
28.53
4.3%
3.8%
19.5
23
2.5
1,485
41.9%
5.4%
12/13
12/14e
12/15e
187
201
205
EBITDA (m)
166
177
181
EBITDA margin
88.2%
87.8%
88.0%
Portfolio Result (m)
56
30
30
Net Financial Result
(34)
(53)
(53)
Net Profit (reported)(m)
0
0
0
Net Profit (adj.)(m)
94
101
104
Funds From Operations
112.00
117.00
120.00
Net Debt (m)
1,446
1,405
1,371
Portfolio Value (m)
2,963
2,988
3,013
Enterprise Value (m)
3,417
3,610
3,581
EPS (adj.)
1.74
1.88
1.94
DPS
1.25
1.30
1.35
IFRS NAVPS
26.49
27.47
28.46
Premium/(discount)
20.1%
31.4%
26.8%
EPRA NAVPS
30.59
31.29
32.28
Earnings adj. yield
4.8%
5.2%
5.4%
Dividend yield
3.5%
3.6%
3.7%
EV/EBITDA
20.6
20.3
19.8
P/E (adj.)
18
19
19
Int. cover(EBITDA/Fin.int)
2.9
2.9
3.0
Net debt/(cash) (m)
1,446
1,405
1,371
Net Debt/Total Assets
42.6%
40.4%
39.1%
Abs. Performances(12m,6m,3m,1m):
8.9%
10.6%
6.2%
12 month High/low: EUR36.10 / 29.45
Avg. Daily nb traded shares:119,394
Main shareholders: Free float 82.0%; Alexander Otto 12.1%; Benjamin Otto 5.9%;
Gross Rental Income (m)
All share prices at 19/05/14.
Profile: Deutsche EuroShop (DEQ) is Germany’s only public company that invests solely in shopping
centers in prime locations. The company currently has equity interests in 19 European shopping centers in
Germany (16), Austria (1), Hungary (1) and Poland (1). The market value of these shopping centers, which
are predominantly in city centre locations amounts to EUR3.7bn.
SWOT Analysis
Strengths
• Parts of the dividend are tax-free
• Good locations and good condition of the properties
Weaknesses
• Relationship with ECE and the Otto family might lead to
conflicts of interest
• Demographic trends in Germany
• "Pure play" shopping center property stock focused on
Germany and partly Eastern Europe
Opportunities
• Benefitting from potential inflation
Threats
• Capital increases to finance growth
• Potential for long-term appreciation of the shopping
centers
• Refinancing of debt leads to lower interest expenses
• Earnings fluctuations as a result of property valuation
• Exposure to developments in the retail trade
• Trade tax issue might burden
Recommendation: DEQ reported good Q1 2014 results with growth of 18% (equine forecast: about 17%) in
revenue and EBIT, respectively. FFO per share increased by 10% to EUR0.55 (equinet forecast: EUR0.54).
Additionally, DEQ confirmed the FY 2014 guidance. It is positive that the KAGB does not apply tor DEQ.
We keep our forecast unchanged but increase our price target to EUR36 (EUR33) per share based on a
premium of 15% to the EPRA NAV 2014e. Peer group multiples have increased accordingly. However, we
reiterate our Hold recommendation.
Target Price: EUR 36.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
38
36
DEUTSCHE EUROSHOP SMALL & MID CAPS SELECTION
Analyst(s)
34
32
30
Jochen Rothenbacher, CEFA
28
26
+49 69 58997 415
Equinet Bank
[email protected]
24
22
Mrz 11
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Source : Factset
69
Italy
SMALL & MID CAPS SELECTION
EUR 29.00
Accumulate
DIASORIN
DIAS.MI/DIA IM
Market capitalisation: EUR 1620m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR35.69 / 29.00
12/12
434
170
39.1%
140
32.3%
87.7
87.7
117
-47.2
-0.1
-0.3
59.4
39.9%
4.5
4.7
3.8
9.8
11.9
19.3
4.6
4.5%
1.7%
1.57
-12.1%
6.58
0.50
-3.3%
12/13
12/14e
12/15e
435
444
472
163
164
175
37.5%
36.9%
37.1%
135
135
145
31.0%
30.3%
30.7%
83.1
82.7
89.2
83.1
82.7
89.2
112
112
120
-98.0
-167
-259
-0.2
-0.3
-0.4
-0.6
-1.0
-1.5
30.5
30.3
32.1
38.2%
36.4%
39.0%
5.2
5.0
5.3
5.2
4.0
3.7
4.2
3.3
2.9
11.2
9.0
7.9
13.6
11.0
9.6
22.9
19.6
18.2
4.6
3.3
2.8
4.1%
5.3%
5.5%
1.8%
1.8%
1.9%
1.49
1.48
1.60
-5.2%
-0.4%
7.8%
7.41
8.89
10.49
0.52
0.53
0.55
-17.6%
-15.6%
-0.4%
Avg. Daily nb traded shares:66,517
Main shareholders: IP Investimenti e partcipazioni 44.1%; Free float 44.0%; Management 11.9%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
36
34
22/05/14 Dividend Payment
2013
19/05/14 Ex Dividend Date
2013
32
30
Profile: the company is specialized in the development, manufacturing and distribution of products in
immunodiagnostics segment. The group develops, produces, and markets reagent kits for a wide range of in vitro
tests for diagnosis in the main clinical areas (hepatitis and retrovirus, cardiac markers, infectious diseases,
oncology and endocrinology and bone and minerals). After strong 5-year growth helped by the boom in demand
for Vitamin- D tests, DiaSorin is now developing new drivers: 1) further menu expansion through new specialty
test launches; 2) leveraging on Liaison XL’s new features to serve large hospital labs; 3) entry into the growing
molecular diagnostic market through an innovative approach; 4) further geographical expansion and potential new
acquisitions.
SWOT Analysis
Strengths
• Assay menu that is unique for its width and presence of
specialty tests
• Anti-cyclical and defensive nature of its reference sector
Weaknesses
• Smaller size than big players
• Strong cash flow generation and sound financials
• USD exposure (about 35% of total sales) and Brazilian and
Chinese currencies exposure (around 10%)
• Negative impact of austerity measures in Europe and USA
• Well established management
Opportunities
• Chances of finding further answers for hitherto unmet
diagnostic needs
• Dynamic growth in emerging markets
• Growth through the importnat 5-year partnership with
Roche and potential new acquisitions
• Entrance in the molecular diagnostic segment
Threats
• Potential acquisitions realized at an unfair value or with
strong difficulties in integration
• Potential development of new and alternative
technologies
• Inability to develop new effective specialty tests
Q1 14 results: the continuous strong growth in CLIA ex Vit-D tests sales (+21.4% at CER) was enough to offset
the expected still negative trend in Vit-D tests sales (-7.2 at CER%). The profitability was negatively impacted by
the negative forex effects (- EUR 1.1m) and by the costs to support the molecular business, which is still in a
start-up phase (-EUR 1.9m). Net of these negative effects, the EBITDA margin would be 38.5%, in line with the
profitability reported in the last 2 quarters of 2013.
Cash remains strong and stable: Q1 14 free cash flow was EUR 27.5m, compared to EUR 25.2m in Q1 13. This
confirms that DiaSorin is a value story that is very interesting for the strong cash generation; thanks its stable
EBITDA margin, in a range of 38-40%, it generates around EUR 80-90m of free cash flow per year.
FY 14 guidance confirmed: during the results conference call, the management confirmed its previously
announced FY 14 guidance: 1) sales growth of +3 - 5% Y/Y at CER; 2) EBITDA growth of +3% Y/Y at CER.
Recommendation: we maintain our positive view on the stock and confirm our Accumulate recommendation and
our Target Price of EUR 34.70 per share (calculated based on our DCF model - WACC 7.4%, 2.0% perpetual
growth rate).
28
26
Target Price: EUR 34.70
24
22
Analyst(s)
20
18
Mar 11
Source : Factset
70
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Paola Saglietti
Banca Akros
+39 02 4344 4287
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 74.99
Hold
DRAEGERWERK
DRWG_p.DE/DRW3 GY
Market capitalisation: EUR 1238m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR106.60 / 74.45
12/12
2,374
295
12.4%
230
9.7%
126
126
216
90.1
0.1
0.3
8.9
11.0%
1.3
1.1
0.6
4.9
6.3
9.9
1.8
8.3%
1.2%
7.69
4.7%
43.64
0.92
-24.0%
12/13
12/14e
12/15e
2,374
2,414
2,535
270
240
277
11.4%
10.0%
10.9%
201
164
191
8.5%
6.8%
7.5%
115
85.3
102
115
85.3
102
115
171
204
121
89.9
59.3
0.1
0.1
0.1
0.4
0.4
0.2
11.5
11.2
13.1
9.1%
7.2%
8.0%
1.1
0.9
1.0
1.2
1.0
0.9
0.8
0.6
0.6
6.6
6.0
5.1
8.9
8.7
7.4
13.7
14.4
12.1
1.9
1.4
1.3
-1.3%
3.5%
4.1%
1.1%
1.7%
2.0%
6.94
5.20
6.21
-9.8%
-25.0%
19.4%
49.18
53.55
58.49
0.83
1.27
1.52
-16.7%
-23.1%
-14.3%
Avg. Daily nb traded shares:22,108
Main shareholders: Free float 56.1% (28.7%); Draeger family 43.9% (71.3%);
All share prices at 19/05/14.
Profile: DRW3’s activities are divided into two segments: Dräger Medical (64% of revenues) specializes on
respiratory, anaesthesia and monitoring systems that are mainly used at the acute point of care in hospitals.
Dräger Safety (36% of revenues) manufactures and markets systems for personal protection and gas
detection. The overall Dräger Group has a strong level of diversity: None of Dräger’s products accounts for
more than 5% of sales. Dräger derives sales in more than 200 countries in more than 80 different
currencies.
SWOT Analysis
Strengths
• High barriers to entry related to quality and regulatory
requirements
• Demographics (growing & aging population) as long-term
growth driver
• Restructuring program has led to sustainable efficiency
gains
• Healthy balance sheet
Weaknesses
• Discount for corporate structure: 2 trading equity (ord.
and pref.shares), 1 highly dilutive participation certificates
10xEBIT
pref.margin
shareslevel
dividend),
KGaA structure
•(receive
Draeger's
is c. 200bps
below the
industry level. This makes the company less resilient in
•downturns.
Lack of external growth ambition
Opportunities
• Market growth driven by increasing healthcare and safety
standards and the build up of the healthcare and public
markets
•infrastructure
R&D projectsin/ emerging
innovations
are hitting the market, which
should support the product mix
• Structural efficiency improvements from a group-wide IT
systems and re-organization of the company's sales &
marketing
organization
• Transformation
from a product into a service & solution
provider may allow for stronger growth and higher margins
Threats
• Reduction in public funding may have an adverse impact
on Dräger
• Cyclicality of Dräger’s equipment business. Only c. 30%
recurring sales from consumables & services
• Rising low cost competition from Asian / cost pressure on
healthcare systems
• Consolidation in end markets, particularly in the hospital
industry may lead to increased price pressure
Recommendation: We rate Drägerwerk ‘Hold’ with a target price of EUR 76. Following disappointing Q1
2014 results and a stronger share price setback, it should be too early to bet on a stronger share price
recovery. Dräger should have little self-help potential to improve profitability in the shorter term, thus
profitability should largely depend on external factors (market environment, business volume, fx rates). Q2
should not be particularly strong (Q1 order book -3.3% YoY vs. headcount +5.7%; unchanged fx
headwinds). We consider even Dräger’s revised FY2014 guidance as ambitious and potentially at risk.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
120
Target Price: EUR 76.00
110
100
DRAEGERWERK SMALL & MID CAPS SELECTION
Analyst(s)
90
80
70
60
Mrz 11
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Konrad Lieder
+49 69 5899 7436
Equinet Bank
[email protected]
Source : Factset
71
Germany
SMALL & MID CAPS SELECTION
EUR 26.95
Hold
DRILLISCH
DRIGn.DE/DRI GY
Market capitalisation: EUR 1294m
Telecommunications
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR27.65 / 12.00
12/12
324
61.9
19.1%
55.5
17.1%
23.5
32.7
32.0
255
2.1
4.1
5.8
26.6%
3.4
4.2
1.8
9.2
10.2
18.2
4.9
-4.7%
11.6%
0.61
3.5%
2.25
1.30
89.9%
12/13
12/14e
12/15e
290
297
309
70.8
87.3
100
24.4%
29.4%
32.4%
61.2
77.3
90.1
21.1%
26.0%
29.1%
156
56.3
63.2
41.4
56.3
63.2
162
66.6
74.1
-101
-85.5
-72.9
-0.5
-0.4
-0.4
-1.4
-1.0
-0.7
1.4
39.2
41.8
33.6%
44.1%
53.6%
4.4
5.7
6.9
6.9
9.6
10.1
3.1
4.1
3.9
12.8
13.9
12.2
14.9
15.7
13.6
26.0
23.0
20.5
5.0
6.6
7.2
15.4%
4.7%
5.3%
5.9%
6.3%
6.7%
0.81
1.17
1.32
31.6%
45.4%
12.2%
4.24
4.11
3.72
1.60
1.70
1.80
25.9%
12.6%
3.8%
Avg. Daily nb traded shares:495,688
Profile: With nearly 2 million mobile customers and more than 350 employees, Drillisch AG is one of the
largest network-independent telecommunications providers in Germany. The operating activities of the
Drillisch Group are brought together in our wholly-owned subsidiaries Drillisch Telecom GmbH, MS Mobile
Services GmbH and eteleon AG. With more than 25 years' experience as a wireless service provider and
mobile virtual network operator (MVNO), Drillisch draws on standardised and unbundled advance services
from the network operators Telefónica Germany GmbH & Co. OHG (O2) and Vodafone GmbH (Vodafone) to
provide individual wireless services and products tailored to our customers' needs.
SWOT Analysis
Strengths
• Price leader in domestic mobile, lean cost structures
Weaknesses
• Business model limited on German mobile
• Net cash balance sheet, high shareholder remuneration
• Deutsche Telekom partnership lost
• Experienced mangement team with strong track record
• Relatively low entry barriers
• Rapid shift fo subscribers to the higher margin MVNO
model
Opportunities
• German smartphone penetration might nearly double to
80%
• M&A as a result of potential O2D/e-plus remedies
• A smaller number of brands would reduce complexity
• Own shares with EUR 50m gain could be sold
• MVNO model might require additional resources
• ARPU stabilisation as a result of consolidation
• Operator pre-product conditions might worsen
Threats
• Market consolidation could lead to lower operator churn
• Saturation of the smartphone market
Main shareholders: Free float 86.7%; Drillisch 9.8%; M. Brucherseifer 2.0%;
Management 1.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
30
22/05/14 Ex Dividend Date
2013
22/05/14 Dividend Payment
2013
21/05/14 AGM
2013
25
20
15
Source : Factset
72
Target Price: EUR 27.50
Analyst(s)
10
5
Mrz 11
Recommendation: We have recently lowered our recommendation from ‘Accumulate’ to ‘Hold’ as our PT of
EUR 27.50 was reached. Despite DRI’s still attractive dividend yields of more than 6%, we point now to the
valuation that has come to 12x EV/EBITDA’15e which appears not attractive anymore. The 1Q14 report was
very solid on new adds and margin, the average gross profit per user in the highly important budget tariff
group failed to meet expectations slightly. We rate the outlook for the EBITDA’14e of EUR 82-85m however
not in danger and model further increased to c. EUR 100m in FY15e, basically in line with the management
guidance. Speculative appeal stems from potential M&A as a consequence of likely regulator remedies from
the O2 Deutschland / e-plus deal.
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Adrian Pehl, CFA
Equinet Bank
+49 69 58997 438
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 4.94
Reduce
DURO FELGUERA
MDF.MC/MDF SM
Market capitalisation: EUR 790m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.46 / 4.55
12/12
916
126
13.7%
118
12.9%
116
116
126
-320
-1.0
-2.5
nm
-291%
nm
nm
0.5
3.7
4.0
6.6
2.6
6.5%
8.3%
0.72
16.3%
1.86
0.40
-8.3%
12/13
12/14e
12/15e
924
866
880
106
85.4
81.9
11.5%
9.9%
9.3%
108
77.8
74.2
11.7%
9.0%
8.4%
83.5
66.8
64.0
83.5
66.8
64.0
84.1
75.4
72.7
-159
-168
-163
-0.6
-0.6
-0.5
-1.5
-2.0
-2.0
38.7
nm
nm
107%
63.7%
45.0%
9.9
5.9
4.2
8.7
7.1
5.3
0.7
0.7
0.7
6.1
7.6
8.0
6.0
8.3
8.8
9.4
11.8
12.3
3.3
3.0
2.8
-3.1%
6.6%
4.2%
5.3%
4.9%
4.9%
0.52
0.42
0.40
-28.0%
-19.9%
-4.2%
1.48
1.63
1.79
0.26
0.24
0.24
4.2%
2.3%
0.0%
Avg. Daily nb traded shares:60,126
Profile: Duro Felguera is divided into three business lines: 1. Large turnkey projects, the engineering
business, broken down into Energy, Mining & Handling and Oil & Gas facilities (82% of sales 13). The
company specialises in simple or combined gas turbine power plants, conventional thermal plants and
desulphurisation and denitrification plants for coal-fired power stations. Industrial plants include engineering
and execution of turnkey projects in the mining, material handling, steelworks and petrochemical sectors. 2.
Manufacturing and “others” (8% of sales 13). 3. Specialised Services (10% of sales 13): provides plant
assembly, operations, and maintenance services.
SWOT Analysis
Strengths
• Collaboration agreements with the four main electrical
equipment providers.
• Continuation of the dividend policy (although expected to
be reduced)
• 150 years of industrial experience
Weaknesses
• Low free float (34%)
• Concentration on few projects
• Lower prepayments
• Solid finance
Opportunities
• Good backlog
• First class clients
Threats
• Economic deceleration. Backlog depends on the global
economy
• Risks in developing countries
• Presence in the energy sector.
• Risks of delays in projects in Venezuela, increasing costs.
• Presence in developing countries
• Competition from larger engineering companies
Main shareholders: Free float 40.0%; Invs El Piles 24.4%; Invs Río Magdalena 9.6%;
Onchena SL 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
6.2
6.0
20/05/14 AGM
2013
19/05/14 AGM
2013
5.8
5.6
5.4
Recommendation: Weak 1Q14 results, with EBITDA falling 12%. The fall in the financial line resulted in
EBT (EUR10.3m) plummeting 46% vs. 1Q’13, and EBT margin of 5.8%. As the most profitable project nears
its completion, margins will be closer to current market levels. In addition, Duro Felguera has decided to
increase provisions for contingencies in the Roy Hill project (Australia) due to the increasing risk perceived
following the exclusion of Forge from the project. Duro Felguera’s net cash reached EUR217m, above the
EUR159m at 2013. 1Q’14 order intake dropped to EUR90m. According to the company, future projects have
a greater probability of becoming firm contracts in 2H’14. Backlog reached EUR1,872m and 49% is made up
by energy projects..
Target Price: EUR 4.85
5.2
5.0
4.8
Analyst(s)
4.6
4.4
4.2
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Iñigo Recio Pascual
BEKA Finance
+34 91 436 7814
[email protected]
Source : Factset
73
Italy
SMALL & MID CAPS SELECTION
EUR 1.47
Hold
EDITORIALE L'ESPRESSO
ESPI.MI/ES IM
Market capitalisation: EUR 602m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.95 / .77
12/12
804
102
12.7%
60.4
7.5%
21.8
21.8
64.0
108
0.2
1.1
6.3
4.5%
0.6
0.6
0.6
4.6
7.7
16.4
0.6
3.8%
0.0%
0.05
-62.8%
1.36
0.00
73.4%
12/13
12/14e
12/15e
708
675
691
63.5
77.7
89.0
9.0%
11.5%
12.9%
31.3
46.7
58.0
4.4%
6.9%
8.4%
3.7
13.6
21.3
3.7
13.6
21.3
36.1
44.9
52.6
73.5
76.7
49.0
0.1
0.1
0.1
1.2
1.0
0.6
4.5
6.5
11.1
1.1%
2.6%
3.6%
nm
0.3
0.5
0.9
1.0
1.0
0.9
1.0
1.0
10.2
9.0
7.5
20.7
14.9
11.6
nm
44.1
28.3
1.0
1.0
1.0
6.7%
0.0%
6.2%
0.0%
2.0%
2.0%
0.01
0.03
0.05
-83.2%
nm
56.2%
1.37
1.40
1.43
0.00
0.03
0.03
4.2%
-23.0%
-9.6%
Avg. Daily nb traded shares:1,138,793
Main shareholders: Carlo De Benedetti 53.3%; Free float 40.1%; Eredi Caracciolo 11.7%;
SWOT Analysis
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.2
23/07/14 Results
2.0
1.8
Profile: L’Espresso is one of the leading media groups in Italy, active in: 1) newspapers: La Repubblica, the first
national title in Italy with 324K avg copies sold and 2.8m readers, and 16 local titles with a total of 365K copies and
>3m readers; 2) magazines: 6 titles, among which L’Espresso, the second news weekly in Italy with 239K copies; 3)
radio: 3 national channels, with a total of 8m daily listeners, including Radio DeeJay, the second commercial radio
in Italy with 5m listeners; 4) television: Deejay TV, a national music channel; 5) Internet: a yearly average of 1.8m
unique users. L’Espresso ad agency Manzoni controls c. 6% of the Italian market. In spite of flattish newspapers
diffusion in recent years, l’Espresso was able to keep circulation revenues increasing until 2006 thanks to the
success of add-ons (like books, CDs and DVDs). The saturation of the market did however lead to a progressive
decline in this revenue source.
Q1 2014 results reflected the weak trend of the reference markets in terms of both advertising and diffusion.
Indeed, in 2m 2014 the Italian ad collection was down by 15.7% Y/Y in print, 6% in on-line while radio was up by
7.5%. L’Espresso was affected by the loss of third-party collection whereas the performance of group properties
outperformed the market with -9.7%. The diffusion figures follow the general market trend (-12% according to ADS).
EBITDA was better than expected as a combination of tight cost cutting, decline of low margin activity (third-party
ad collection) and more favourable accounting of certain provisions (estimated impact a couple of millions EUROs).
Net debt declined by EUR 15m in the quarter to EUR 58m (slightly better than expected).
Outlook: L’Espresso said in a note that based on the current booking figures, the second quarter outlook signals an
attenuation of the negative trend. We have cut our full-year estimates to reflect the trend in third party advertising
with a -5/3./1.5% negative impact on FY 2013/14/15 respectively.
Corporate Action: L’Espresso is now in the process of merging its two Digital Multiplexes with the three of TI
Media obtaining 30% of the MuxCo. The deal announced on April 9 and subject to the Agcom approval, could help
improve L’Espresso financial position further, as a disposal is planned by year end. On April 2, the company issued
a EUR 100m equity-linked bond with a fixed coupon of 2.625% and a conversion price of EUR 2.1523. The
proceeds will help refinance the EUR 227m outstanding bond due next October, along with the EUR 182m cash
available.
A huge potential tax bill. In May 2012, ES disclosed an adverse sentence on behalf of a fiscal tribunal, referred to
a deal dating back in 1991. The ruling states that a EUR 228m capital gain would have been taxable. ES estimates
the potential sanction could reach EUR 350m. A different interpretation would suggest EUR 150m. ES asked thirdgrade review of the sentence; the Co declared to be confident of a positive outcome based on legal opinions and
past sentences; the Co could be able to afford a EUR 150m bill through liquid assets (EUR 190m). The impact on
FV would be EUR 0.36; the worst case scenario would wipe-out 85% of our FV.
2014H1
Strengths
• Fully diversified and leader in media business
Weaknesses
• Pure domestic player, with no international role
• Tight cost control
Opportunities
• DTT bandwidth rental/Mux disposal
• Further cost cutting action
• Small TV broadcasting business
Threats
• Increase in competition in the media sector
• Negative tax ruling
1.6
1.4
Recommendation: In-line Q1 2014 publication, including weak top line but solid EBITDA performance. Limited impact on
estimates. Neutral reco confirmed.
Target Price: EUR 1.70
1.2
1.0
0.8
0.6
0.4
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Andrea Devita, CFA
74
Banca Akros
+39 02 4344 4031
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 37.76
Accumulate
EI TOWERS
EIT.MI/EIT IM
Market capitalisation: EUR 1067m
Support Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR44.00 / 26.65
12/12
234
94.6
40.4%
44.5
19.0%
23.6
23.6
73.7
189
0.4
2.0
15.5
3.9%
0.5
1.0
3.1
7.6
16.2
24.7
1.1
3.1%
2.0%
0.84
nm
18.95
0.42
32.5%
12/13
12/14e
12/15e
233
236
243
106
109
114
45.3%
46.3%
47.0%
58.4
63.2
67.9
25.0%
26.7%
28.0%
32.9
35.5
39.3
32.9
35.5
39.3
80.2
81.9
85.7
131
86.6
46.7
0.2
0.1
0.1
1.2
0.8
0.4
high
16.3
19.7
5.4%
5.9%
6.7%
0.7
0.7
0.8
1.6
1.7
1.7
4.4
4.6
4.4
9.7
10.0
9.3
17.5
17.4
15.6
28.7
30.0
27.1
1.7
1.8
1.8
7.6%
4.2%
6.4%
0.0%
2.7%
2.9%
1.17
1.26
1.39
39.3%
7.8%
10.7%
19.69
20.95
21.33
0.00
1.01
1.11
12.4%
-3.4%
-6.7%
Avg. Daily nb traded shares:62,167
Profile: EI Towers (EIT) is the largest Italian tower infrastructure operator for broadcasting and telecom players, with
3,200 sites under management including 2,300 directly owned. EIT is the result of the merger between the listed company
DMT and Mediaset’s tower network operator unit, which was completed at the beginning of 2012. In turn, DMT originated
back in year 2000 from the management buy-out of a MS technological division operating in the design and
manufacturing of digital signal hardware and antennas. EI Towers is a pure play in the Italian tower sector, as the
hardware activities of DMT, included in the Technology division, were disposed at the beginning of 2010 following three
years of EBITDA losses. DMT grew to a size of 1,500 towers in 6 years in virtue of the acquisition of small local operators
totalling c EUR 200m EV. This investment has been partially financed with the EUR 80m proceeds from the IPO in 2004.
With the integration of MS EI Towers, it reached 3,200 sites, securing the leadership in the Italian broadcasting market.
Solid FY 2013 results. Also the last quarter was characterized by solid results with strong margin performance.
Revenues were slightly down Y/Y on a reported basis, due to the presence of switch-off related installations last year
(EUR 6.7m); the organic performance was +2.5% with 1.8pp contributed by inflation indexation. The EBITDA was in line
with our expectations and slightly higher than the revised target of EUR 105m. EIT basically achieved the 5-year plan
efficiency target in just two years, with EUR 7.5m in both 2012 and incremental EUR 7.5m in 2013. Capex was EUR 10m
in the full-year, as anticipated by the company with 9m publication (from EUR 12m previous target, originally EUR 20m).
The pre-dividend FCF was EUR 58m, vs. a target of above EUR 50m; de-leveraging was EUR 27m in Q4.
FY 2014 Outlook. EIT management expects EUR 3/4m increase in EBITDA, with low inflation offset by efficiencies,
capex below EUR 15m and tax rate at 37%. The cash taxes will be around EUR 35. The forthcoming attribution of new
muxes will not have an impact this year.. Mid-term targets. According to the business plan EIT is looking for EUR 268m
revenues and EUR 128m EBITDA in 2016 (3.2% and 10.5% CAGR respectively). M&A. EIT acquired a small tower
portfolio (mainly mobile towers) in February at a cost of EUR 4m (7.4x the underlying EBITDA). EIT is preparing to stepup its growth with M&A including diversification in mobile and/ or “transformational” deals. These could include Wind or TI
towers, as well as Rai Way. The Board proposes to distribute no dividend “in order to keep financial flexibility”. The mgmt
said such transformational deals could materialize at the end of this year beginning 2015.
SWOT Analysis
Strengths
• Market leadership
Weaknesses
• Customer concentration
• Full service operator
• Domestic market concentration
• Predictable revenue curve, High cash conversion
Main shareholders: Free float 58.2% (0.0%); Mediaset 40.0% (0.0%); Mr Falciai 1.8% (0.0%);
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Opportunities
• New Mux
Threats
• Potential new competition
• Additional telco business (eg Atlantia)
• Substituting technologies
• Domestic Consolidation
• Regulatory risk
titre
50
45
Recommendation: Accumulate. Following FY 2013 publication, we have increased our TP to EUR 43, to include the better
than expected NFP, the expected value (EUR 2 at 50%) of a new mux and more favourable DCF parameters. We maintain
a positive view on the stock. The next few months will be eventful with the Mux award, potential large M&A and the
presentation of the new 2014/18 business plan.
Target Price: EUR 43.00
40
35
30
25
20
15
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Andrea Devita, CFA
Banca Akros
+39 02 4344 4031
[email protected]
75
Germany
SMALL & MID CAPS SELECTION
EUR 28.61
Reduce
ELRINGKLINGER
ZILGn.DE/ZIL2 GR
Market capitalisation: EUR 1813m
Automobiles & Parts
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR35.14 / 24.20
12/12
1,127
218
19.4%
139
12.3%
85.7
85.7
112
260
0.4
1.2
14.5
8.1%
1.0
1.9
1.8
9.2
14.4
18.8
2.6
-0.1%
1.8%
1.35
2.2%
9.64
0.45
7.3%
12/13
12/14e
12/15e
1,175
1,271
1,347
240
245
267
20.4%
19.3%
19.8%
165
167
186
14.0%
13.1%
13.8%
105
108
122
89.2
106
120
120
204
220
295
268
210
0.4
0.3
0.2
1.2
1.1
0.8
15.3
21.2
26.7
8.6%
8.3%
8.9%
1.1
1.0
1.1
2.0
1.8
1.7
2.0
1.8
1.6
9.7
9.1
8.2
14.0
13.4
11.8
21.0
17.1
15.1
2.8
2.4
2.1
-0.4%
3.1%
4.9%
1.7%
2.1%
2.4%
1.41
1.67
1.89
4.1%
18.6%
13.4%
10.69
12.04
13.58
0.50
0.60
0.68
-6.5%
3.5%
-0.1%
Avg. Daily nb traded shares:47,034
Profile: ElringKlinger is a manufacturer of cylinder-head gaskets, specialty gaskets, cam cover modules and
heat shields as well as high tech plastic components. The largest part of the business is related to the
automotive industry. Additionally, the company has a lucrative aftermarket business and provides engine
testing services.
SWOT Analysis
Strengths
• Strong top-line growth.
Weaknesses
• High capital requirements.
• High margins.
• High labour costs in Germany.
• Strong technological position.
Opportunities
• Growth with new products.
Threats
• Margin pressure.
• Market share gains in Emerging Markets.
Recommendation: ElringKlinger is not only one of the world’s most profitable automotive suppliers; it is also
a supplier with
above average organic growth. In recent years ElringKlinger has developed a broad range of new high tech
products, has won new customers and successfully penetrated new markets. However, this growth has
resulted in a strong increase of capital employed, while earnings did not keep track with this development.
ROCE is one of the weakest in sector. Given that the valuation is still one of the highest in the sector, we
see downside risks for the share price and thus advise to Reduce ElringKlinger shares.
Main shareholders: Lechler Family 52.0%; Free float 48.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
36
07/08/14 Results
34
32
30
28
2014H1
19/05/14 Ex Dividend Date
2013
19/05/14 Dividend Payment
2013
26
24
22
20
18
16
14
Mar 11
Source : Factset
76
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Target Price: EUR 24.00
ELRINGKLINGER SMALL & MID CAPS SELECTION
Analyst(s)
Tim Schuldt, CFA
+49 69 5899 7433
Equinet Bank
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 2.11
Accumulate
ENCE
ENC.MC/ENC SM
Market capitalisation: EUR 527m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.13 / 2.05
12/12
828
139
16.8%
82.3
9.9%
43.0
43.0
100
277
0.4
2.0
5.9
5.6%
0.6
0.8
1.0
5.7
9.7
11.9
0.7
-12.8%
3.4%
0.17
4.5%
2.90
0.07
-13.7%
12/13
12/14e
12/15e
853
722
731
142
69.5
111
16.7%
9.6%
15.2%
31.8
-16.4
23.8
3.7%
nm
3.3%
4.3
-31.3
-6.3
4.3
-31.3
-6.3
115
54.7
80.8
195
257
301
0.3
0.4
0.5
1.4
3.7
2.7
5.0
2.4
3.4
2.4%
-1.2%
1.7%
0.3
-0.1
0.2
0.9
0.8
0.9
1.0
1.1
1.2
6.3
11.5
7.6
28.0
nm
35.4
nm
nm
nm
1.0
0.8
0.8
15.5%
-6.2%
-4.6%
3.3%
1.4%
1.4%
0.02
-0.12
-0.03
-90.0%
-chg
+chg
2.84
2.64
2.59
0.07
0.03
0.03
-29.0%
-20.0%
-2.1%
Avg. Daily nb traded shares:640,687
Profile: ENCE is one of the largest eucalyptus pulp producer in the world and the one with the largest
market share in Europe. ENCE's three plants have a capacity of 1,340,000 tons of pulp each year. Europe
makes up 94% of ENCE's sales. The main variables affecting ENCE are the USD/EUR exchange rate, pulp
prices and prices for energy generated with biomass. ENCE is the leading company in renewable energy
through the use of biomass residue and energy crops in Spain. The current capacity of the three production
mills is an operating 229 MW, of which 180 MW are exclusively from biomass. Ence develops biomass
projects, one of which (Huelva 50 MW) started operations by the end of 2012 and another one in 2014
(Mérida 20 MW). Ence has started a plan to compensate the important impact from electricity regulation.
SWOT Analysis
Strengths
• ENCE is the leader in Europe in eucalyptupulp (15%).
Weaknesses
• New renewable energy projects currently at a standstill.
• High quality of its product and large client portfolio
• Important impact from new electricity regulation.
• Factories at good locations, near raw materials and
clients.
• Pulp prices depend of growth in China
Opportunities
• New restructuring measures
Threats
• Possibility in the medium-term of new capacities coming
on stream that would lead to oversupply
• Environmental requisites could become more stringent.
• Eucalyptus pulp gaining ground over pine.
• The Iberian Peninsula is the only European region capable
of producing eucalyptus cellulose.
• Disposal of forest assets progressively.
Main shareholders: Free float 35.0%; Retos Operativos XXI 25.6%; Alcor Holding 19.8%;
Fuente Salada 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.2
30/07/14 Results
3.0
2014H1
Recommendation: 1Q’14 sales -21%, EBITDA -78% and Net Losses EUR-14m, impacted by the changes
to the electricity regulation, very low pool prices (EUR26/MWh) and coinciding with certain industrial
problems as well as a strong euro, thus the exceptionally low results (cannot be extrapolated). The
Ministerial Order has not been approved as it is awaiting the allegations on behalf of the sector and
companies affected. ENCE’s results estimate a 48% impact of the new regulation. If approved as is,
additional cuts would have to be applied to energy revenues. The final draft is expected to be released in
June/July and ENCE confides in maintaining the estimated 48% impact. ENCE has begun a competitive
plan (2014-16) with cost management measures, investments in efficiency and restructuring of mix.
2.8
Target Price: EUR 2.35
2.6
2.4
2.2
2.0
1.8
1.6
1.4
1.2
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
ENCE SMALL & MID CAPS SELECTION
Analyst(s)
Iñigo Recio Pascual
+34 91 436 7814
BEKA Finance
[email protected]
77
Italy
SMALL & MID CAPS SELECTION
EUR 46.49
Hold
ENGINEERING
ENG.MI/ENG IM
Market capitalisation: EUR 581m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR54.05 / 27.16
12/12
770
92.6
12.0%
74.6
9.7%
51.9
41.4
70.7
28.6
0.1
0.3
25.2
6.5%
0.6
0.3
0.5
4.1
5.0
7.6
0.9
12.4%
1.8%
3.31
-9.2%
27.18
0.45
50.8%
12/13
823
101
12.2%
80.1
9.7%
46.9
53.1
67.5
-39.0
-0.1
-0.4
17.5
6.5%
0.7
0.4
0.6
5.3
6.7
10.2
1.4
15.3%
1.1%
4.25
28.1%
31.21
0.53
14.8%
12/14e
12/15e
862
890
107
106
12.4%
11.9%
86.8
87.3
10.1%
9.8%
54.8
53.6
46.8
45.6
74.7
72.3
-83.3
-120
-0.2
-0.3
-0.8
-1.1
nm
nm
6.9%
6.8%
0.7
0.7
0.4
0.4
0.6
0.6
5.0
4.7
6.1
5.7
12.4
12.7
1.4
1.2
9.8%
8.5%
1.4%
1.4%
3.75
3.65
-11.8%
-2.6%
34.30
37.29
0.66
0.66
-3.1%
-6.1%
Avg. Daily nb traded shares:4,281
Profile: Founded in Padua in 1980, the Engineering group is one of the largest Italian players in Information
Technology services. The business model extends into a number of areas, including system integration,
organizational consultancy and specialist services, proprietary application solutions, management applications
and outsourcing. The target market consists of medium-to-large-sized customers in all primary market segments:
public sector (central and local administration, healthcare and defence), Finance (banks, insurances and asset
managers), industry and services, TLC and utilities. Recurring revenues account for c. 60% of group turnover and
include outsourcing, license fees, application management revenues and evolutionary maintenance services.
Over the past few years, ENG has been able to outperform both Italian GDP growth and the Italian IT market.
Since its creation, Engineering has grown both internally and through acquisitions. In 2008, the group widened its
diversification in terms of products, markets and countries with the acquisition of the Italian activities of Atos
Origin (EUR 280m sales in 2007). In March 2013, ENG announced the acquisition of the Italian branch of TSystems International (a subsidiary of DT). The deal implied EUR 42m cash-in for ENG. FY 2013: The economic
and financial performance in Q4 2013 was satisfying. Revenues were in line with expectations and within the
guidance of EUR 810/830m, with Q4 keeping the growth rate of the first nine months. EBITDA was slightly above
the guidance (EUR 98/100m) and our forecasts (it also includes residual integration costs with T-Systems) with
Q4 flat Y/Y. ENG generated EUR 32m cash in Q4, EUR 68m on a full-year basis (incl. EUR 41m T-System). The
Board proposed a dividend of EUR 0.656 per share, implying +23% on the FY 2012 DPS. MHT acquisition. On
February 3, 2014, ENG announced the acquisition of MHT, an Italian IT services company focussed on the
implementation of Microsoft products in ERP and CRM for SMEs. The deal includes an investment in the range of
EUR 4.5/6m. MHT generated EUR 9.4m annual revenues through a workforce of 90 units.
SWOT Analysis
Strengths
• Promising portfolio of reference customers
Weaknesses
• Strong dependence on the Italian IT market
• Well-implemented vertical offering
• WC dynamic affected by Public sector exposure
• Business model with high entry barriers
• Corporate tax higher than its international peers
Menicucci Marilena 12.0%; Bestinver 10.0%;
Opportunities
• Increased contribution from outsourcing
Threats
• Firms could reduce their IT budget
All share prices at 19/05/14.
• Further expansion through acquisitions and partnership
• Increasing competition from global players
• Strengthening in Brazil
• Souring price pressure
Main shareholders: One Equity Partners 29.9%; Free float 24.9%; Cinaglia Michele 23.2%;
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
55
10/07/14 Dividend Payment
50
45
40
2013
Recommendation: ENG stock performed very well in 2013 with +72%, while YTD it is up double-digit. Given the
underlying trend in the sovereign bond, once can say the current price level is not stretched on a relative basis.
On Mar-4, we have increased our TP to EUR 50 (+25%) assuming 9% WACC (from 10%), 1.5% g. Further upside
shall be tested against accelerated revenue growth, earnings surprise or the final implementation of Public
Administration debt repayment.
35
Target Price: EUR 50.00
30
25
20
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
ENGINEERING SMALL & MID CAPS SELECTION
Analyst(s)
Andrea Devita, CFA
78
+39 02 4344 4031
Banca Akros
[email protected]
Portugal
SMALL & MID CAPS SELECTION
EUR 3.64
Hold
ESPIRITO SANTO SAUDE
ESSS.LS/ESS PL
Market capitalisation: EUR 348m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.73 / 3.12
12/13
374
59.0
15.8%
30.9
8.3%
14.0
14.0
42.1
210
1.5
3.6
5.7
0.0%
0.0
12/14e
385
60.3
15.7%
33.3
8.6%
16.8
16.8
43.7
186
1.0
3.1
6.3
0.0%
0.0
1.2
1.4
8.8
16.0
20.7
2.0
1.7%
1.2%
0.18
19.6%
1.85
0.04
12/15e
12/16e
398
411
65.1
67.8
16.3%
16.5%
38.4
41.2
9.6%
10.0%
22.0
25.0
22.0
25.0
48.6
51.5
163
141
0.8
0.7
2.5
2.1
8.0
9.9
0.0%
0.0%
0.0
0.0
1.1
1.1
1.3
1.2
7.8
7.2
13.3
11.8
15.8
13.9
1.8
1.6
8.1%
8.2%
1.6%
1.8%
0.23
0.26
30.9%
13.7%
2.02
2.22
0.06
0.07
12.3%
7.1%
Avg. Daily nb traded shares:41,797
0.0%
0.15
+chg
1.48
0.00
Main shareholders: Espírito Santo Healthcare Investments 51.0%; Free float 26.7%; Och-Ziff 5.4%;
T.Rowe 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.80
3.70
Profile: Espírito Santo Saúde (ESS) is one of the reference players in Portuguese private healthcare sector.
The company, incorporated in 2000, currently operates a network of 9 hospitals (one of which through a
Public Private Partnership – PPP), 7 outpatient clinics and 2 senior residences.
ESS’ growth has been based on both organic growth and acquisitions, allowing it to become one of the three
largest private healthcare providers in Portugal (alongside José de Mello Saúde and Hospitais Privados de
Portugal). The company operates 3 main areas (Private Healthcare, Public Healthcare and Other
Businesses) and runs a Corporate Center unit destined to free the main areas from non-core activities, while
capturing the associated synergies. At YE13, the Private Healthcare area accounted for 77.1% of the EUR
373.6m total operating revenues, the Public Healthcare segment generated 22% and the Other Businesses,
namely Senior Residences, were responsible for the remaining 0.9%.
SWOT Analysis
Strengths
• Leading position of Hospital da Luz (the largest private
hospital and one of the most technologically advanced in
•Portugal)
Highly experienced management team (in ESS since
inception)
• Support and MLT commitment of Espírito Santo Group
• Differentiation given ESS Integrated offer (Hospitals,
Outpatient Clinics and Senior Residences)
Opportunities
• Demographic trends in Portugal (ageing population)
• Financial difficulties in the public sector (more PPPs)
Weaknesses
• Senior Residences financial performance
• Net Debt close to 3.6x EBITDA
• Business concentration in Portugal
Threats
• Challenging economic environment in Portugal (high
unemployment and low GDP growth)
• Potential competition from other private players in a
market with positive outlook
• Highly fragmented private healthcare market (top 3
players account for around 12% of the market)
• Expansion of Hospital da Luz and internationalization
(Angola)
Recommendation: We initiated our coverage of ESS on 28 March with a YE14 fair value of EUR 3.90 per
share and a Hold recommendation.
Overall, we believe that the healthcare sector in Portugal will tend to benefit from demographic trends as
Portugal’s population is ageing fast due to a combination of longer life expectancy with a marked decline in
birth rates. In this context, we also consider that public awareness of private healthcare companies’
competency will increase, along with demand for its services, being ESS one of the main potential winners
of these dynamics. 1Q14 results will be published on Monday 26 May.
3.60
Target Price: EUR 3.90
3.50
3.40
3.30
Analyst(s)
3.20
3.10
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
André Rodrigues
José Mota Freitas, CFA
Caixa-Banco de Investimento
+351 21 389 68 39
+351 22 607 09 31
[email protected]
[email protected]
79
Spain
SMALL & MID CAPS SELECTION
EUR 3.86
PYCE.MC/PAC SM
Market capitalisation: EUR 334m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR4.14 / 2.60
Main shareholders: Harpalus
Angel Fdez.
Hold
EUROPAC
12/12
724
90.1
12.4%
41.1
5.7%
14.3
14.3
63.2
298
0.9
3.3
3.4
4.1%
0.4
0.7
0.7
5.3
11.6
12.0
0.5
8.8%
3.4%
0.17
-51.2%
3.68
0.07
36.3%
12/13
12/14e
12/15e
802
809
817
104
106
109
13.0%
13.1%
13.3%
54.9
56.5
57.7
6.8%
7.0%
7.1%
27.4
24.8
26.6
27.4
24.8
26.6
76.6
74.2
77.4
298
266
240
0.9
0.8
0.7
2.9
2.5
2.2
4.9
5.4
6.0
5.5%
5.8%
6.0%
0.6
0.6
0.6
0.9
0.9
0.8
0.8
0.7
0.7
6.1
5.7
5.3
11.6
10.7
10.0
12.1
13.5
12.5
1.0
1.0
0.9
12.9%
12.9%
11.0%
3.3%
3.3%
3.3%
0.32
0.29
0.31
91.9%
-9.7%
7.4%
3.86
4.02
4.20
0.13
0.13
0.13
-3.4%
1.2%
-2.7%
Avg. Daily nb traded shares:22,226
40.0%; Free float 38.0%; Cartera REA 6.6%;
6.4%;
All share prices at 19/05/14.
th
Profile: Europac is one of the main European producers of containerboard (7 ). The key to activity is the
vertical integration, beginning with the selective collection of recovered paper (raw material) to
manufacture paper (recycled and kraftliner), to the corrugated board, and ending with packaging or
cardboard boxes. This strategy includes all of the group’s added value. The fact the activity is intensive in
energy, generating electricity has been incorporated via three cogeneration plants reaching an installed
potential of 153MW. Europac has finished all the investments in new capacity, in all the business lines,
paper (kraftliner and testliner), cardboard, and co-generation.
SWOT Analysis
Strengths
• Europac draws 35%-45% of turnover from the food
industry.
• Few groups in Europe produce kraftliner paper
Weaknesses
• Consumption weakness hits at demand for boxes.
• The right mix of kraftliner/testliner
• Modest growth in the sector.
• Vertical integration delivers greater added value
• Impact from new electricity regulation
Opportunities
• Underrepresented in agriculture, with an enormous
market.
• Europac will be in the front line of industry concentration
Threats
• Volatility of prices in main raw materials used, paper and
wood.
• Kraftliner imports from USA when euro is strong vs. USD.
• Paper/cardboard's high recyclability makes it more future
friendly than plastic or wood
Recommendation: 1Q’14 results were mainly affected by the new electricity regulation. Europac reports
energy results according to the draft regulation, not including a positive effect. To minimise the impact, the
company has reduced production 37%. Although paper prices have dropped a little in recent weeks, it
remains at a reasonable level. Recycled paper fell 2% from highs and raw material also by -5%, thus
margins could be maintained throughout the year. We highlight the good performance of recycled paper in
France, which continues improving margins due to the controlled costs and efficiency measures
implemented, although in Spain the margin has fallen little. Also worth mentioning is the improving
cardboard activity in Portugal, where Europac holds a 40% market share. In our view, annual results could
be similar to 2013 and the company has the capacity to improve EBITDA progressively.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
• Rise in energy costs
Target Price: EUR 4.00
titre
4.5
10/06/14 AGM
4.0
EUROPAC SMALL & MID CAPS SELECTION
Analyst(s)
3.5
3.0
2.5
Iñigo Recio Pascual
2.0
1.5
Mar 11
Source : Factset
80
2013
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+34 91 436 7814
BEKA Finance
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 39.05
Hold
EVS
EVSB.BR/EVS BB
Market capitalisation: EUR 543m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR55.81 / 39.05
12/12
138
66.6
48.3%
61.2
44.4%
41.7
42.3
47.6
-20.6
-0.3
-0.3
nm
80.1%
8.4
10.9
4.2
8.7
9.4
14.1
8.9
5.5%
5.9%
3.15
32.3%
5.00
2.64
-30.1%
12/13
12/14e
12/15e
129
141
150
52.8
53.6
55.1
40.9%
38.0%
36.8%
48.4
50.1
51.4
37.5%
35.5%
34.4%
32.7
33.7
35.5
33.4
33.8
35.5
36.8
37.3
38.3
-1.7
2.9
-6.5
0.0
0.0
-0.1
0.0
0.1
-0.1
nm
62.6
73.5
43.6%
39.8%
44.4%
4.6
4.2
4.7
8.6
6.3
6.8
5.1
3.9
3.6
12.4
10.2
9.8
13.5
10.9
10.5
19.4
16.1
15.3
9.6
7.5
7.4
2.5%
4.6%
7.8%
5.5%
6.2%
6.3%
2.42
2.43
2.55
-23.1%
0.3%
5.2%
4.89
5.20
5.26
2.16
2.42
2.45
-6.9%
-15.4%
-14.1%
Avg. Daily nb traded shares:49,969
Main shareholders: Free float 92.7%; Founders 6.3%; Treasury shares 1.0%;
Profile: EVS assembles and sells solutions mainly for the production of live and near live broadcasts. The
origin of its products lies in the Sports markets where EVS has gained significant experience in processing
and manipulating (live) video and is clear market leader. Currently, the company aims at expanding this
franchise to the News, Media and Entertainment market.
SWOT Analysis
Strengths
• Technological advantage
Weaknesses
• Concentrated product portfolio
• Leader in Sports market
• Need to remain technologically superior
• New CEO’s experience in ENM
• Limited visibility
• Entry barriers
Opportunities
• Transition to new formats
Threats
• Entrance of new competitors
• Increasing investments in Sport broadcasting
• Current competitors matching up technology
• Increasing penetration of the ENM market
• Risk of declining margins
• Increasing number of content distributors
Recommendation: Though 1Q14 was broadly in line with our estimates (but below consensus), we had to
adapt our FY estimates downwards, decreasing our FY14 EPS from EUR 2.63 to EUR 2.43 preliminary. We
consider the resulting FY14 P/E of 18 too high to keep buying the shares given the doubts around the profit
growth levels in the medium term. Hence, we downgraded the share from Accumulate to Hold and our
Target Price from EUR 50.5 to EUR 46.5.
All share prices at 19/05/14.
Target Price: EUR 46.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
60
55
50
45
02/06/14 Dividend Payment
2013
28/05/14 Ex Dividend Date
2013
EVS SMALL & MID CAPS SELECTION
Analyst(s)
Bart Jooris, CFA
+32 2 287 92 79
Bank Degroof
[email protected]
40
35
30
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
81
Netherlands
SMALL & MID CAPS SELECTION
EUR 26.36
Hold
EXACT HOLDING NV
EXAH.AS/EXACT NA
Market capitalisation: EUR 627m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR28.45 / 15.76
12/12
217
50.7
23.4%
39.2
18.0%
17.4
17.4
43.0
-53.4
-0.5
-1.1
66.1
55.4%
6.7
7.4
1.5
6.3
8.2
21.9
3.9
9.1%
7.8%
0.73
17.1%
4.09
1.26
57.0%
12/13
12/14e
12/15e
213
228
240
47.2
47.4
54.2
22.1%
20.8%
22.5%
37.6
37.0
44.0
17.6%
16.2%
18.3%
31.8
29.8
35.5
31.8
29.8
35.5
41.7
40.7
46.1
-59.6
-68.4
-76.0
-0.6
-0.7
-0.7
-1.3
-1.4
-1.4
nm
nm
nm
80.8%
75.7%
95.9%
9.7
9.1
11.6
12.7
14.8
15.6
2.3
2.5
2.3
10.6
12.0
10.4
13.3
15.4
12.8
17.6
21.5
18.0
6.1
6.4
6.1
6.0%
5.4%
6.2%
4.4%
4.7%
5.5%
1.34
1.25
1.49
83.0%
-6.4%
19.1%
3.88
4.21
4.41
1.18
1.25
1.49
17.4%
2.6%
0.9%
Avg. Daily nb traded shares:19,144
Main shareholders: Free float 47.7%; van Nieuwland 15.7%; Hagens 14.9%;
Janivo 8.9%; Aviva 7.5%; Delta VPV deelnemingenfonds 5.3%;
All share prices at 19/05/14.
Profile: Exact Software is an independent software vendor that focuses on ERP software and related
applications for the SME and midmarket based on Microsoft technology. The company, which listed in 1999,
has some 2,400 employees, subsidiaries in over 40 countries and serves customers in over 125 countries.
Its main products are Exact Globe, Exact Synergie and Exact Online. Major competitors include Sage,
Deltek and Epicor in the US and Sage, Microsoft Dynamics, Unit4 and Cegid in Europe.
SWOT Analysis
Strengths
• Fast growing Cloud applications
Weaknesses
• Lack of scale in midmarket
• High level of recurring revenues
• Split in company between Cloud and ERP
• Robust balance sheet (net cash)
Opportunities
• Grow in Cloud solutions
Threats
• High levels of competition
• Expand internationally
• Execution risk international strategy
• Re-ignite midmarket segment
• Loss of market share Benelux
Recommendation: We have recently changed our rating to Hold because of the strong performance of the
shares (from EUR 21 to EUR 27). The shares have slipped somewhat, to EUR 26.40, meaning that there is
material upside relative to our price target. However, the 1Q14 performance in Business Solutions was not
satisfying while the developments in Cloud in the US were also less than encouraging despite very good
overall growth (mainly Benelux). This explains why we maintain the Hold rating.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 29.10
t i t re
28
01/08/14 Results
26
24
22
20
16
14
Mar 11
82
24/05/14 AGM
2013
23/05/14 Ex Dividend Date
2013
EXACT HOLDING NV SMALL & MID CAPS SELECTION
Analyst(s)
Martijn den Drijver
18
Source : Factset
2014H1
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+312 0 5508636
SNS Securities
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 0.81
Hold
EXPRIVIA
XPR.MI/XPR IM
Market capitalisation: EUR 42m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.00 / .64
12/12
132
12.4
9.4%
7.2
5.5%
2.2
2.2
7.6
44.0
0.6
3.5
4.1
6.0%
0.6
1.0
0.9
9.7
16.6
15.0
0.5
18.7%
5.0%
0.04
-36.6%
1.32
0.03
9.5%
12/13
12/14e
12/15e
131
152
160
13.1
18.8
17.8
10.0%
12.3%
11.1%
8.7
13.7
12.4
6.6%
9.0%
7.8%
2.4
5.4
4.5
2.4
5.4
4.5
7.3
10.9
10.2
37.4
34.0
32.3
0.5
0.4
0.4
2.9
1.8
1.8
4.9
7.5
8.1
7.5%
11.4%
10.2%
0.8
1.2
1.1
1.1
1.0
1.0
1.0
0.8
0.8
9.5
6.5
6.8
14.3
8.9
9.7
17.8
7.7
9.3
0.6
0.5
0.5
16.7%
7.9%
9.1%
0.0%
0.0%
5.0%
0.05
0.10
0.09
12.3%
123.1%
-17.0%
1.37
1.47
1.52
0.00
0.00
0.04
-5.3%
-17.0%
-9.2%
Avg. Daily nb traded shares:50,830
Profile: Exprivia is an Italian IT Group, created in 2005 with the merger between the listed Co AISoftware (a
developer of innovative technologies in finance, medical imaging, and knowledge management) and Abaco
(consulting on relational database and object-oriented SW which later evolved as a system integrator). Since then,
Exprivia grew mainly through M&A at a CAGR of 17.4% to a EUR 132m revenues, 10% EBITDA margin in 2012.
Based in Molfetta (Bari), Exprivia is now a group employing c 2,000 people, through 10 subsidiaries in Italy and 6
abroad, including Spain, Mexico, Guatemala, Peru, Brazil and China. The international activities accounted for c
11% of the consolidated revenues in FY 2013. Exprivia covers 6 main industries including Finance, Energy &
Utilities, Industry & Aerospace, Telco and Media, Healthcare and Public Administrations. Exprivia serves 2,000
clients in the corporate segment, focussing on large and medium enterprises. Most of revenues are generated with
consulting and system integration. The location of the company in the Puglia Region offers a competitive advantage
with the access to skilled workforce and decent infrastructure at competitive cost, thus enabling a price leadership
strategy.
FY 2013 results were broadly in line with our expectations; we anticipated that the original 3year plan revenue
target (EUR 140m w/o acquisitions) could not be reasonably met. Turnover was stable Y/Y with a positive sign in
Q4. EBITDA margin hit again 10% in the full-year; however Q4 profitability was slightly down Y/Y. Net income was
in line with our estimates. As expected, the company will not pay any dividend Outlook. EXP said it will update the
market with a new industrial plan in the first half of the year. The mgmt will leverage on the international
development, which we assume will keep a double-digit increase, and on the consolidation of auSystems (EUR
16m revenues). Following a 4.5% decline in 2013, the domestic market remains challenging. Gartner predicts a
small growth in IT services in 2014, due to accelerate in the following 3 years. EXP could grow the Italian business
mainly in virtue of new contracts in healthcare and with the finalization of some tasks acquired last year. Profitability
should improve thanks to the positive impact of the reorganization of business and legal entities carried out in the
past few months.
SWOT Analysis
Strengths
• “Strategic” geographic location
Weaknesses
• Still unbalanced capital structure.
• High quality and differentiated customer portfolio.
• Refinancing issues
• Price leadership
• Working capital dynamics
Opportunities
• Further domestic expansion through acquisitions and
partnership
• International Expansion
Threats
• Longer-than-expected path to macro-economic recovery
FINANCIAL CALENDAR (Source: Precise)
• Digital Agenda
• Continuing price pressure
01/08/14 Results
Recommendation: The DCF valuation provides a FV in the range of EUR 0.9/1.0ps (g 1/2%, WACC 9/10%,
terminal EBITDA mg 12.5%). EXP trades at double-digit discount to Italian peers on forward EV/EBIT and P/E, in
line on EV/EBITDA. We confirm our Hold recommendation and EUR 0.93 target price after Neutral set of results,
limited incremental information on the current trading conditions.
Main shareholders: Abaco Spa 48.6%; Free float 42.6%; Merula Srl 5.0%;
Data Management Spa 2.0%; Own Shares 1.8%;
All share prices at 19/05/14.
PRICE (SHORT & LONG AVERAGE)
• Increasing competition
titre
1.00
0.90
0.80
0.70
2014H1
0.60
Target Price: EUR 0.93
0.50
0.40
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Andrea Devita, CFA
Banca Akros
+39 02 4344 4031
[email protected]
83
Spain
SMALL & MID CAPS SELECTION
EUR 1.00
Buy
EZENTIS
EZEN.MC/EZE SM
Market capitalisation: EUR 157m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.87 / .46
12/12
182
12.2
6.7%
9.0
4.9%
-19.4
-14.4
2.8
26.8
nm
2.2
1.6
36.5%
2.7
2.6
0.4
5.7
7.8
nm
nm
-4.3%
0.0%
-0.09
+chg
-0.06
0.00
79.9%
12/13
12/14e
12/15e
149
244
559
4.4
20.4
50.3
3.0%
8.3%
9.0%
-7.4
10.2
35.6
nm
4.2%
6.4%
-40.9
4.3
25.2
-8.2
4.3
25.2
-1.0
15.7
43.3
23.5
7.0
4.1
-2.3
0.1
0.0
5.3
0.3
0.1
0.6
5.6
25.4
-21.8%
12.7%
30.3%
-1.7
1.1
2.5
7.4
2.4
1.6
1.8
0.7
0.3
61.0
8.2
3.3
nm
16.3
4.6
nm
nm
9.3
nm
4.2
2.4
-4.4%
6.4%
21.9%
0.0%
0.0%
0.0%
-0.05
0.02
0.11
+chg
+chg
nm
-0.09
0.24
0.42
0.00
0.00
0.00
-33.2%
-27.3%
-12.4%
Avg. Daily nb traded shares:1,722,971
Main shareholders: Free float 72.6%; M. García Durán/Others 22.1%; Merchbank 3.0%;
PREMAAT 2.3%;
All share prices at 15/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Ezentis is an Industrial Services company focused on engineering, installation and maintenance of
telecommunications, energy and water distribution networks. Ezentis’ main clients are Telefónica, Edenor,
Endesa, Light and Claro. Close to 90% of the sales proceed from Latin American countries. We estimate
Ezentis carrying out new investments of up to EUR83m, which would allow the company to reach an
EBITDA similar to that announced (EUR63m vs EUR 66m), thanks to organic growth (CAGR 2014-17
EBITDA +12%) and inorganic EBITDA representing around 52% of the total in 2017 (EUR32m). Regarding
net profit, we estimate EUR30m, similar to the company’s forecasts.
SWOT Analysis
Strengths
• High backlog
Weaknesses
• Exchange rate volatility
• Strong relationship with clients (25 years)
• Argentina exposure
• Sound service quality
• High dependance on few clients
Opportunities
• Heavy infrastructure investment expectedn in Latam
Threats
• New investments execution risk
• New acquistions
• High competition
• Operational improvements thanks to innovation
Recommendation: We re-initiate coverage of Ezentis with a valuation ranging between EUR1.41 –
1.24/share, depending on the final price (EUR1.1 - 0.77/share) at which the capital increase of EUR50m is
realised at, as well as the following two for a total of EUR32m (EUR15m + EUR17m) - earmarked for new
investments. Ezentis offers the opportunity to benefit from the strong development phase expected in
telecommunication and electricity networks in LatAm via a completely restructured company, with a new
executive team which has indepth knowledge of the activity and, moreover, excellent relationships with their
main clients thanks to the high quality service provided.
titre
2.0
Target Price: EUR 1.41
1.8
1.6
1.4
EZENTIS SMALL & MID CAPS SELECTION
Analyst(s)
1.2
1.0
0.8
0.6
0.4
Mar 11
Source : Factset
84
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Rafael Fernández de Heredia
+34 91 436 78 08
BEKA Finance
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 2.30
Reduce
F-SECURE
FSC1V.HE/FSC1V FH
Market capitalisation: EUR 357m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.54 / 1.68
12/12
157
33.7
21.4%
20.2
12.8%
14.6
14.6
28.1
-33.3
-0.5
-1.0
67.4
36.6%
4.8
5.1
1.3
6.1
10.3
16.4
3.7
6.1%
3.9%
0.09
-11.1%
0.42
0.06
25.0%
12/13
12/14e
12/15e
155
158
161
38.7
33.0
36.2
24.9%
21.0%
22.6%
27.2
22.5
26.7
17.5%
14.3%
16.6%
16.6
16.0
18.9
16.6
16.0
18.9
28.1
26.5
28.4
-47.9
-55.1
-59.6
-0.7
-0.7
-0.7
-1.2
-1.7
-1.6
55.2
nm
nm
58.4%
49.1%
54.6%
7.7
6.5
7.2
7.0
8.9
8.2
1.6
1.9
1.8
6.3
9.1
8.2
8.9
13.4
11.1
17.5
22.3
18.9
4.0
4.5
4.1
7.0%
5.7%
5.8%
2.6%
3.5%
4.3%
0.11
0.10
0.12
13.4%
-3.6%
18.2%
0.47
0.51
0.55
0.06
0.08
0.10
17.3%
5.5%
5.5%
Avg. Daily nb traded shares:40,629
Main shareholders: Free float 60.0%; Siilasmaa Risto 39.7%; Mutual Pension Insurance Company Ilmarinen 8.6%;
Finnish State Pension Fund 5.6%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.8
Profile: F-Secure develops and sells security services to consumers and businesses. It is the world-leading
provider of security services through telecom operators. The operator business (~60% of sales) has been
the company's growth driver for several years. F-Secure's partner network consists of over 200 operators
that serve over 250 million broadband customers in more than 40 countries. The operator business is based
on the SaaS model and includes PC and mobile security services as well as several types of storage/sync
and share services. The traditional channel (40% of sales) consists of license sales and sales to businesses.
SWOT Analysis
Strengths
• A good sales channel thanks to a unique position as a
partner to operators
• Able to produce good profits even under difficult
macroeconomic conditions
• Good cash flow and profitability
Opportunities
• Increasing need for security in mobile handsets
• Better use of market growth potential in the operator
channel
• Sync&share offering through operators
Weaknesses
• Weak outlook in pc based security market
• Windows XP exit from the market
• Growth requires sales and marketing outlays
• Pricing pressures due to freely-available products
(Windows 8)
Threats
• Increasing use of freely-available products weakening
growth prospects
• Fast growth may require more outlays in F-Secure's own
distribution channel, resulting in a weak margin
• Failure in new growth areas (storage/sync& share services
• May clearly improve profitability should the pace of
growth slacken
Recommendation: F-Secure’s industry is undergoing a major upheaval as the conventional PC-based data
security market has become saturated. A sales turnaround is still possible, but it would necessitate
successful products in the storage, sync & share services as well as attractive profit distribution model
offered to operators. The key in the successful launch of new services is ensuring a rapid rise in the number
of subscribers, which calls for aggressive pricing. This, in turn, keeps top-line growth very moderate in the
coming quarters. We estimate that the margin is likely to remain around 15%, because accelerating the
growth pace requires marketing and R&D investments. Consequently, performance in the coming quarters is
subject to considerable uncertainty.
2.6
Target Price: EUR 2.10
2.4
2.2
2.0
F-SECURE SMALL & MID CAPS SELECTION
Analyst(s)
1.8
1.6
1.4
1.2
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Kimmo Stenvall
+358 10 252 4561
Pohjola
[email protected]
85
Spain
SMALL & MID CAPS SELECTION
EUR 2.15
Hold
FAES FARMA
FAE.MC/FAE SM
Market capitalisation: EUR 485m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.79 / 1.77
12/12
176
31.1
17.6%
21.4
12.1%
19.5
19.5
25.1
49.6
0.3
1.6
14.7
7.6%
0.9
1.6
1.7
9.4
13.7
16.0
1.7
7.3%
1.3%
0.10
37.6%
0.90
0.02
1.2%
12/13
12/14e
12/15e
180
190
203
36.3
41.3
45.2
20.1%
21.8%
22.3%
25.8
31.4
35.0
14.3%
16.5%
17.2%
22.6
24.8
27.3
22.6
24.8
27.3
31.8
36.4
39.0
30.4
12.9
-5.7
0.2
0.1
0.0
0.8
0.3
-0.1
25.0
25.6
29.5
9.6%
11.8%
13.2%
1.1
1.5
1.7
2.8
2.5
2.4
2.8
2.2
2.1
13.7
10.3
9.3
19.3
13.6
12.0
24.7
20.0
18.3
2.8
2.3
2.2
5.0%
6.2%
6.2%
0.0%
1.9%
1.9%
0.10
0.11
0.12
7.9%
4.1%
9.7%
0.90
0.92
1.00
0.00
0.04
0.04
-16.6%
-13.4%
-3.2%
Avg. Daily nb traded shares:110,563
Profile: Faes Farma is an integrated Spanish company that specialises on the investigation, production and
marketing of pharmaceutical products (own and third party products) as well as raw materials. Following the
acquisition of Ingaso in 2007, the company diversified its activity incorporating an animal nutrition products
line (specialised in piglets). Although the international marketing of bilastine (antihistaminic) has contributed
to improve its consolidated operating results and to its geographic diversification, the company stilll
concentrates much of its activity on the Iberian Peninsula (>70% consolidated net revenues at 2013e), a
region affected by the austerity measures implemented in recent years and taking their toll on results. The
company counts with has first class partners for its commercialization: Pfizer, Takeda, Merck, Menarini and
Tahio among others, covering a total of 48 countries and expects its launch in 78 additional countries. The
increasing competition in the anti-histamine market and the regulatory impact has reduced the
management’s expected revenues. Considering the healthy financial situation (0.3x ND/EBITDA’13), we
expect a corporate move to be announced, reinforcing growth in consolidated revenues.
SWOT Analysis
Strengths
• Alternative partner for international pharmaceuticals
Weaknesses
• Pharmaceutical portfolio’s exposure to the RPS
• New international launches of Bilastine
• Dependence on the commercialisation of bilastine
• Consistent dividend policy
• High concentration in Spain
• Lack of short term triggers in its R&D pipeline
Opportunities
• Operating leverage from new in-license agreements.
• International expansion of the health and animal nutrition
Threats
• Regulatory instability at the national level, due to high
public deficit and need to reduce costs
• Those inherent to the industry
Main shareholders: Free float 98.0%; Management 2.0%;
• Internationalisation of bilastine (Japan)
All share prices at 19/05/14.
Recommendation: We rate Faes hold with a TP of EUR2.1 per share (DCF, wacc 8.7% & g: 1%). We
expect the company to announce an acquisition in order to diversify its activity and improve visibility o
Target Price: EUR 2.10
PRICE (SHORT & LONG AVERAGE)
FINANCIAL CALENDAR
titre
2.8
2.6
2.4
2.2
Ana Isabel González García CIIA
2.0
1.8
1.6
1.4
1.2
1.0
Mar 11
Source : Factset
86
FAES FARMA SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+34 91 436 78 09
BEKA Finance
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 56.46
Sell
FAIVELEY
FAIP.PA/LEY FP
Market capitalisation: EUR 804m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR63.49 / 44.97
03/12
901
122
13.5%
94.7
10.5%
47.4
47.4
69.3
331
0.7
2.7
8.0
6.8%
0.9
1.2
1.3
9.3
11.9
15.4
1.6
6.6%
1.6%
3.38
-35.6%
32.99
0.85
21.2%
03/13
988
136
13.8%
112
11.4%
59.3
59.3
91.5
207
0.4
1.5
10.0
8.7%
1.1
1.1
1.0
7.1
8.6
11.9
1.4
7.3%
1.7%
4.17
23.1%
36.08
0.95
-3.5%
03/14e
03/15e
982
977
129
129
13.2%
13.2%
112
111
11.4%
11.3%
50.5
62.5
50.5
62.5
74.5
86.3
176
109
0.3
0.2
1.4
0.8
14.4
18.4
8.5%
8.5%
1.1
1.0
1.2
1.2
1.1
1.0
8.1
7.8
9.3
9.0
14.8
12.9
1.4
1.3
6.0%
10.1%
1.8%
1.8%
3.55
4.39
-14.8%
23.7%
38.63
42.02
1.00
1.00
-3.9%
-1.6%
Avg. Daily nb traded shares:4,507
Main shareholders: Faiveley Family 52.6% (67.1%); Free float 44.8% (32.9%); Treasury shares 2.6% (0.0%);
Profile: The global rolling stock industry is mainly controlled by three leading manufacturers: Bombardier,
Alstom and Siemens. The industry is founded on an assembler business model and a network of
subcontractors has been built up, many of which are specialised in niche markets. Faiveley has risen to the
number two position worldwide behind German company Knorr-Bremse. With key expertise in airconditioning, brakes, electronics and transmission systems, Faiveley has raised barriers to entry, paving the
way for its arrival on the North American rail freight market, which is currently its main driver for growth.
Asia-Pacific’s share of Faiveley’s sales is set to rise to almost 20% in 2013 vs. 7% in 1996. This trend is tied
to rail investment trends in China and could give the group 2-4pts of annual growth over the next two years,
from which the negative contribution of the European markets will have to be deducted.
SWOT Analysis
STRENGTHS
 Faiveley operates in a near-global duopoly on
each of its niche markets
 Flexible industrial model which generates cash
thanks to the maintenance business and services
with high margins
 Long term, Faiveley will be a true yield stock
WEAKNESS
 Not many big clients
Bombardier) or end clients.
 The industry depends to a significant extent on
macroeconomic and political factors.
 Faiveley’s debt levels will stifle any
opportunistic acquisitions of a significant size
OPPORTUNITIES
 Reduction in debt which will give significant room
for manœuvre in two to three years’ time
THREATS
 Very promising growth in North America
 Growth in the rail sector depends to a large
extent on Asia
 For shareholders: take some precautions to
protect against the downturn in the railway sector
cycle
 Reduction in investment in Spain, the UK,
Germany, France and the US
Recommendation: The Chairman has stepped down from his operating functions and the entire top
management has been renewed over the past two years. With the consensus still aggressive, and at a time
when China is experiencing recurring problems with its railway network, the “sustainable” three-years growth
in Faiveley’s most dynamic portion of sales (+20% to +40% y-o-y in Asia) is not yet in the bag. We maintain
our Sell recommendation (from Neutral – 30 January 2013). Our opinion is based on our own perception of
the global recession in the railway market, and changes in the consensus on the past three years.
All share prices at 19/05/14.
Target Price: EUR 39.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
(Siemens/Alstom/
titre
75
30/05/14 Results
70
65
60
55
50
2014
FAIVELEY SA SMALL & MID CAPS SELECTION
Analyst(s)
Christian Auzanneau
45
+33 4 78 92 01 85
CM - CIC Securities
[email protected]
40
35
30
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
87
Italy
SMALL & MID CAPS SELECTION
EUR 1.25
Buy
FALCK RENEWABLES
AA4.MI/FKR IM
Market capitalisation: EUR 365m
Utilities
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.49 / .79
12/12
277
158
57.0%
-21.4
nm
-91.7
-91.7
93.3
843
2.5
5.3
3.4
-1.7%
-0.2
0.9
4.1
7.1
nm
nm
0.8
11.4%
0.0%
-0.27
-chg
1.18
0.00
43.5%
12/13
12/14e
12/15e
276
289
317
157
148
161
56.9%
51.3%
50.8%
79.3
74.2
93.0
28.7%
25.7%
29.4%
15.1
3.8
12.8
15.1
3.8
12.8
91.9
86.3
94.9
757
716
644
2.0
1.9
1.6
4.8
4.8
4.0
3.2
3.1
3.6
6.7%
6.6%
8.6%
0.8
0.8
nm
1.0
1.0
1.0
4.1
3.8
3.3
7.3
7.5
6.5
14.4
14.9
11.3
25.0
nm
28.5
1.0
1.0
1.0
16.4%
-17.5%
20.1%
2.6%
0.4%
1.2%
0.05
0.01
0.04
+chg
-75.1%
nm
1.28
1.26
1.30
0.03
0.01
0.02
6.2%
-9.5%
-10.4%
Avg. Daily nb traded shares:943,036
Main shareholders: Falck SpA 60.0%; Free Float 57.1%; Achille Colombo 2.9%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
1.50
07/08/14 Results
1.40
2014H1
Profile: Falck Renewables operates in the production of energy from renewable sources through wind farms and
waste-to-energy, biomass and photovoltaic plants. The specialisation in the renewable energy sector has allowed
the company to gain experience and acquire know-how in the operation and maintenance (O&M) of proprietary and
third party-owned renewable energy power plants. The company operates in Italy, the UK, France and Spain.
SWOT Analysis
Strengths
• Young asset portfolio and geographical diversification
Weaknesses
• Exposure to GBP/EUR exchange rate fluctuations
• Strong management team
• Overhang risk related to Mr. Colombo’ stakes (on a total
of roughly 3% share capital)£pv£
• High exposure in terms of revenues to the incentives (i.e.
around 50%)
• Low free float
• No relevant short-term re-financial needs
• Sound and visible growth over 2012-2017 (EBITDA CAGR
around 3% based on our estimates)
Opportunities
• Potential positive outcome arising from the Sicilian
dispute
• Programmable source developments
• Service sector developments
Threats
• Potential negative outcome arising from the Sicilian
dispute
• Changes in the regulatory frameworks
• Additional windfall tax introduction
• Development of the partnership with the infrastructure
fund Copenhagen Infrastructure I K/S
Recommendation: Falck Renewables has recently unveiled its 2013-2017 business plan. The current economic
scenario, characterised by the decrease in demand, resulting in pressure on energy prices due to lower
consumption, the grid management issues caused by increasing intermittent input, the sovereign debt crisis and
the consequent negative outlook on incentives and the banks’ reduced willingness to finance industrial
investments, led the company to rethink its business model and growth strategy. More in detail, Falck
Renewables has identified in its portfolio the following issues that need to be readdressed: a) excessive focus on
wind technology (around 92% of its installed capacity and 81% of its production in 2012); b) high exposure to
wind unpredictability; c) the progressive decrease in wind quality of new sites (i.e. lower load factors). All these
elements are pushing the company: 1) to increase the programmable source exposures; 2) to focus on
technologies where profitability is less dependent on incentives; 3) to reduce out-sourcing services (greenfield
development); 4) to progressively decrease debt leverage; 5) to widen the portfolio to get scale effects and direct
control on plant performances (O&M). By leveraging on the management’s technical and development expertise
acquired in the area of renewable energy, the company’s strategic objective is to continue to develop new
initiatives. We reiterate our positive stance on the company.
Target Price: EUR 1.90
1.30
1.20
FALCK RENEWABLES SMALL & MID CAPS SELECTION
Analyst(s)
1.10
1.00
0.90
0.80
0.70
Mar 11
Source : Factset
88
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Dario Michi
+39 02 4344 4237
Banca Akros
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 2.95
Accumulate
FINNAIR
FIA1S.HE/FIA1S FH
Market capitalisation: EUR 378m
Airlines
EUR
Sales (m)
EBITDAR (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
AEV / EBITDAR
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.23 / 2.39
12/12
2,449
252
6.8%
35.5
1.4%
11.8
11.8
143
125
0.2
0.8
13.3
2.8%
0.4
0.3
0.1
1.2
8.6
25.8
0.4
59.8%
4.2%
0.09
+chg
6.14
0.10
11.7%
12/13
12/14e
12/15e
2,400
1,137
1,780
214
239
263
5.4%
13.8%
10.0%
7.9
23.0
54.5
0.3%
2.0%
3.1%
27.0
12.6
24.8
27.0
12.6
24.8
149
147
148
160
35.0
100
0.2
0.1
0.2
1.2
0.2
0.6
nm
18.0
12.5
0.7%
2.3%
4.8%
0.1
0.3
0.7
0.4
0.5
0.5
0.2
0.4
0.3
1.9
1.7
1.8
50.9
17.7
8.7
13.1
29.9
15.2
0.5
0.6
0.6
31.1%
4.1%
-13.1%
0.0%
0.0%
1.7%
0.21
0.10
0.19
128.7%
-53.3%
96.2%
5.49
4.89
5.10
0.00
0.00
0.05
-0.3%
9.3%
5.4%
Avg. Daily nb traded shares:22,584
Main shareholders: Free float 100.0%; Suomen valtio / Valtioneuvoston kanslia 55.8%; Skagen Rahastot 4.6%;
Keva 4.5%;
All share prices at 19/05/14.
Profile: Finnair’s operations cover scheduled passenger traffic and leisure traffic, technical and ground
handling operations, catering, travel agencies as well as travel information and reservation services. The
company's strategy is to focus on European and Asian traffic: Helsinki's location makes the city optimal for
transit traffic. The company's strategic objective is double Asian revenues by 2020 from the 2010 level.
Finnair’s competition strategy is to focus on high-quality service, so the company does not directly compete
with budget airlines.
SWOT Analysis
Strengths
• Helsinki's location enabling direct flights to Asia provides
competitive advantage
• Young and cost-efficient fleet
Weaknesses
• Very capital-intensive cost structure
Opportunities
• Asia's robust economic development offers growth
potential
• European-wide sector consolidation
Threats
• Pricing pressure from budget airlines
• Several labour organisations within the company reduce
business flexibility
• High oil price weighing on profitability
• Fairly good financing position for implementing future
fleet investments
Recommendation: Finnair’s traffic figures have remained fairly good but cargo and leisure flights are
suffering from low demand. In addition, the weakening Japanese yen has had a clearly negative impact on
sales and earnings numbers during the last 12 months. While some cost savings are already underway,
Finnair is currently in talks with the cabin crew over yet tighter savings, which largely define whether the
company can rise into the black this year. Finnair has a healthy financial position and the reform of its widebody fleet will begin next year once the first Airbus 350 planes arrive in H2 2015. We think the share’s
downside risk on the current price is small, while even remotely positive news from the sector could push the
share up. Our target price is EUR 3.30 and our recommendation is Accumulate.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
4.0
Target Price: EUR 3.30
22/05/14 Capital Markets Day
3.5
3.0
FINNAIR SMALL & MID CAPS SELECTION
Analyst(s)
2.5
2.0
1.5
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Jari Raisanen
+358 10 252 4504
Pohjola
[email protected]
Source : Factset
89
Greece
SMALL & MID CAPS SELECTION
EUR 4.75
Buy
FOURLIS HOLDINGS
FRLr.AT/FOYRK GA
Market capitalisation: EUR 242m
General Retailers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.90 / 2.26
12/12
420
20.1
4.8%
2.8
0.7%
-11.3
-8.9
4.1
138
0.8
6.9
1.4
0.8%
0.1
0.8
0.5
11.5
82.8
nm
0.6
12.2%
0.0%
-0.18
-chg
3.47
0.00
61.6%
12/13
12/14e
12/15e
403
413
434
25.4
27.7
33.0
6.3%
6.7%
7.6%
10.6
13.9
20.4
2.6%
3.4%
4.7%
-8.3
0.2
4.9
-7.0
0.2
4.9
7.6
14.0
17.5
129
127
122
0.8
0.7
0.7
5.1
4.6
3.7
1.6
2.0
2.4
3.0%
4.1%
6.0%
0.3
0.5
0.7
1.3
1.4
1.4
0.8
0.9
0.8
13.0
13.0
10.8
31.1
26.0
17.4
nm
nm
49.4
1.2
1.4
1.4
5.2%
2.2%
2.1%
0.0%
0.0%
0.0%
-0.14
0.00
0.10
+chg
+chg
nm
3.32
3.38
3.48
0.00
0.00
0.00
38.9%
-4.6%
-17.7%
Avg. Daily nb traded shares:117,642
Main shareholders: Free float 69.3%; Dafni Fourli 20.6%; Mitica 5.1%;
Fidelity 5.0%;
All share prices at 19/05/14.
Profile: Fourlis has evolved from a domestic wholesale group to a retailer with presence in both Greece and
abroad. The company operates 7 IKEA franchise stores in Greece (5 stores plus 4 pick-up points), Cyprus (1
store) and Bulgaria (1 store), being the only listed IKEA franchisee. Apart from IKEA, the group also holds
the franchise of Intersport, already operating 90 stores in Greece (41), Romania (25), Turkey (17), Bulgaria
(4) and Cyprus (3).
SWOT Analysis
Strengths
• Strong brand portfolio (IKEA, Intersport)
Weaknesses
• Directly affected by consumer spending trends£cr£
• Market leadership in the Greek home furnishing market
• Highly dependent from the Greek market
• Satisfactory geographical diversification
• Overdependence on IKEA and its rollout plans
• Good management track record
• Unattractive gearng ratios currently
Opportunities
• Opening of new IKEA stores in Greece and abroad
Threats
• Further slowdown in consumer spending and pricing
pressures from local consumer environment deterioration
• Continuation of economic stagnation in Greece
• Acceleration of Intersport expansion both in Greece and
abroad
• Signifincant earnings potential in a 'normalized' economic
environment in Greece
• Real estate portfolio could be used for liquidity
enhancement
• Political and macro instability in Turkey
Recommendation: We have set our target price at EUR 5.40/share with a ‘Buy’ rating. Fourlis is a highly
geared ‘Grecovery’ play given that Greece’s home furnishing market currently accounts for 0.4% of GDP
compared to an average 1% in EU countries. In a ‘normalized’ economic environment, Fourlis’s EBITDA is
expected to grow by 17% over 2013-2018 reaching EUR 55m (vs. EUR 25m in FY13) driven by a strong
rebound in the profitability of Greek operations and the solid performance of its international activities.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 5.40
t i t re
6
27/05/14 Results
5
FOURLIS HOLDINGS SMALL & MID CAPS SELECTION
Analyst(s)
4
3
2
1
0
Mar 11
Source : Factset
90
2014Q1
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Dimitris Birbos
Natalia Svyrou-Svyriadi
+30 210 81 73 392
+30 210 81 73 384
Investment Bank of Greece
[email protected]
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 6.96
Hold
GAMELOFT
GLFT.PA/GFT FP
Market capitalisation: EUR 585m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.32 / 5.23
12/12
208
31.2
15.0%
14.9
7.1%
9.3
9.3
29.7
-55.6
-0.4
-1.8
nm
23.8%
2.2
6.8
1.9
12.4
26.1
nm
3.4
1.6%
0.0%
0.10
-50.7%
1.56
0.00
25.6%
12/13
12/14e
12/15e
233
267
308
37.2
48.7
57.8
15.9%
18.3%
18.8%
23.6
34.1
42.4
10.1%
12.8%
13.8%
7.5
24.2
30.1
7.5
24.2
30.1
26.7
38.8
45.9
-60.3
-76.9
-94.3
-0.4
-0.5
-0.5
-1.6
-1.6
-1.6
nm
nm
nm
30.4%
38.0%
40.5%
2.8
3.5
3.7
10.2
7.6
6.4
2.7
1.9
1.6
17.0
10.5
8.6
26.8
15.1
11.7
nm
26.0
20.9
5.1
3.6
3.1
0.3%
2.8%
3.0%
0.0%
0.0%
0.0%
0.08
0.27
0.33
-18.9%
nm
24.5%
1.62
1.91
2.27
0.00
0.00
0.00
-15.3%
-11.9%
-0.6%
Avg. Daily nb traded shares:149,508
Main shareholders: Free float 88.0% (78.6%); Guillemot brothers 12.0% (21.4%);
All share prices at 19/05/14.
Profile: Gameloft is one of the largest players in video games for mobile phones and tablets; the group is
offering its downloadable games on all digital platforms (smartphones, tablets, Internet boxes, smart TVs).
2013 revenues: 1) 66% on smartphones and tablets (AppStore, Android Market Place, Amazon, Windows
Phone); 2) 32% on feature phones (Java-Brew); 3) 2% for large screens (smart TVs and set top boxes).
SWOT Analysis
Strengths
• Global network (200 carriers, 80 countries)
Weaknesses
• Size (compared to EA Mobile)
• Complete in-house low cost production: 27 studios in 12
countries
• Coverage of 350 feature phones in 13 languages and
3,000 smartphones
• High quality games (best-ranking in the sector for 4 years)
• Unable to produce "hits" (games in global top ten for
months)
• Difficulties to monetize the games in free-to-play model
Opportunities
• High level of growth for smartphones and tablets (Apple,
Android, WP)
• Cannibalisation of hand-held consoles by smartphones
and tablets
• Low cost smartphone adoption in emerging markets
Threats
• Toward competition with major publishers through
mobile/console convergence
Recommendation: The group is experiencing very fast growth (+16% organic in 2013, +19%e in 2014)
thanks to its pure play positioning on games for mobile and tablets. The 2013 results confirmed its ability to
improve its operating margin, thanks to the stabilisation of the R&D headcount, and despite some forex
headwinds at the end of the year. Q1 revenues were reassuring on the group’s strategy to improve the
monetization capabilities of its games, which should be confirmed with new game releases in Q2. However,
the fall of USD and EM currencies vs EUR could weigh on the margin improvement in 2014. We believe that
at 14x EBIT 13e the strong growth and leverage prospects are fairly valued, given the risks. Hold.
Target Price: EUR 7.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
8.5
8.0
GAMELOFT SMALL & MID CAPS SELECTION
Analyst(s)
7.5
7.0
6.5
6.0
5.5
5.0
Eric Ravary
4.5
+33 1 45 96 79 53
CM - CIC Securities
[email protected]
4.0
3.5
3.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
91
Italy
SMALL & MID CAPS SELECTION
EUR 4.76
Buy
GAS PLUS
GSP.MI/GSP IM
Market capitalisation: EUR 214m
Oil & Gas Producers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.03 / 4.35
12/12
267
73.1
27.3%
43.4
16.2%
16.4
16.4
45.8
150
0.7
2.1
4.8
7.5%
0.9
0.6
1.4
5.1
8.6
13.6
1.1
10.9%
4.4%
0.36
+chg
4.56
0.22
0.2%
12/13
194
60.5
31.2%
35.3
18.2%
11.8
11.8
36.7
102
0.5
1.7
4.3
6.5%
0.8
0.6
1.6
5.2
9.0
18.1
1.0
41.3%
3.3%
0.26
-28.1%
4.60
0.16
0.2%
12/14e
12/15e
209
216
62.9
67.7
30.0%
31.3%
33.0
33.5
15.8%
15.5%
12.7
15.2
12.7
15.2
42.3
49.1
82.3
73.3
0.4
0.3
1.3
1.1
5.4
8.7
6.1%
6.1%
0.8
0.8
0.5
0.5
1.4
1.3
4.7
4.2
9.0
8.6
16.9
14.0
1.0
1.0
9.5%
6.3%
3.6%
4.3%
0.28
0.34
7.5%
20.2%
4.73
4.90
0.17
0.20
-2.1%
-0.3%
Avg. Daily nb traded shares:1,598
Main shareholders: Us.Fin. Srl 73.9%; Findim 15.5%; Free Float 7.6%;
Own Shares 3.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
8
05/08/14 Results
7
6
5
2014H1
Profile: due to the growth that began after the liberalization process in the Italian energy market in the early 2000,
Gas Plus, as integrated operator (it covers the entire chain of natural gas management process), is one of the most
important players among the new ones; in particular, it is focused on exploration and production (E&P), on gas
supply and sales both to wholesale (S&S) and to the end customer (Retail) and on municipal gas distribution
(Network). In each segment, the company has gained a solid know-how and this has given it a strong presence
over the market in the last few years.
SWOT Analysis
Strengths
• Vertical integration of the gas activities£pv£ Gas Plus
covers the entire natural gas management process
• High skills and know-how of the management
Weaknesses
• Exposure to the fluctuations in gas prices and to the
Italian gas market competition
• Limited free-float
• Stable and predictable cash flows from regulated
activities
• High degree of competition in the gas distribution tenders
• Exposure to the Robin Tax
Opportunities
• Padana Energia is due to boost production and margins in
the coming years in Italy
• Further development of international activities
Threats
• A drop in hydrocarbon prices
• Development of the storage business in Italy
• Possible delays to the start-up of the ongoing projects
(Sinarca and Romania)
• The Italian Government has set in the National Strategic
Energy Plan an important role for the National gas
production£pv£
Recommendation: Gas Plus has recently provided an update on its strategic guidelines: E&P - Gas Plus aims to
increase production from nearly 226m cm recorded in 2013 to 410m cm in 2016, through the development of the
Italian gas fields: Mezzocolle and Longanesi should be the largest contributors to the expected growth. We estimate
2P reserves at ca. 4.0bn cm as at the end of 2016 (they were roughly 4.9bn cm as at the end of 2013). This
estimate doesn’t take into account any new discovery and it is only based on the difference between the current 2P
reserves level and the expected production in the coming years; Regulated activities. The Italian Electricity and
Gas Authority (AEEG) has recently approved the new regulatory framework for the gas distribution activity. The new
allowed return is 6.9% vs. 7.6%. We estimate a sensitivity of around EUR 40/50k of EBITDA for each 10bps
change. Captive client sale prices - Gas Delibera. AEEG has recently approved a Delibera to set the rules for the
sale price for captive clients in the gas sector. According to our estimates, 2014 selling price should be lower by
around 15% vs. 2013 while EBITDA should be down by roughly 40%. In any case, the impact we are factoring in
terms of lower EBITDA for the commercial gas divisions is less than EUR 3m in 2014 vs. 2013. Romania.
ExxonMobil and OMV Petrom acquired 85% stake in the 15 Midia block deep water late in 2012. The consideration
was roughly USD 100m. Gas Plus owns a 15% stake in the block portion and refused the offer for its stake. This
means that the company’s interest in the area may be worth at least ca. USD 20m.
Target Price: EUR 6.00
4
3
2
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
GAS PLUS SMALL & MID CAPS SELECTION
Analyst(s)
Dario Michi
92
• Regulatory risk on the distribution and storage activities
+39 02 4344 4237
Banca Akros
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 2.81
Hold
GEOX
GEO.MI/GEO IM
Market capitalisation: EUR 729m
Personal Goods
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.49 / 1.86
12/12
808
86.0
10.6%
47.0
5.8%
10.0
23.9
51.6
-54.1
-0.1
-0.6
38.2
9.8%
0.8
1.7
0.7
6.5
12.0
23.6
1.4
4.5%
3.2%
0.09
-52.2%
1.56
0.07
28.0%
12/13
12/14e
12/15e
754
792
851
10.7
37.8
61.1
1.4%
4.8%
7.2%
-34.6
-3.2
19.1
nm
nm
2.2%
-29.7
-9.7
10.1
-29.7
-9.7
10.1
15.6
31.3
52.1
28.2
6.5
13.1
0.1
0.0
0.0
2.6
0.2
0.2
2.8
9.4
16.5
-6.9%
-0.7%
4.0%
-0.6
-0.1
0.3
2.3
2.6
2.5
1.0
1.0
1.0
73.1
21.3
13.3
nm
nm
42.6
nm
nm
nm
1.9
2.1
2.0
-6.6%
2.9%
-1.0%
0.0%
0.0%
0.0%
-0.11
-0.04
0.04
-chg
+chg
+chg
1.37
1.33
1.37
0.00
0.00
0.00
38.5%
-8.9%
-7.7%
Avg. Daily nb traded shares:493,317
Main shareholders: Mario Moretti Polegato 71.0%; Free float 26.8%; Columbia Wanger Asset Management 2.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Geox is among the Italian leaders in the footwear sector and one of the world leaders in the brown shoes segment. It
designs, produces and distributes shoes for around 87% of its total sales and apparel for the remaining 13% (in FY 13). The
entire production is outsourced, with fixed costs totalling 20/23% of total sales. The company was founded in 1995 by Mr Moretti
Polegato, (Geox’ chairman), an entrepreneur who worked in the wine sector. It was he who launched and patented the system
to create the first rubber “breathable” sole for shoes. The second step took place in 1999 with the creation of breathable
garments, especially jackets. In 2000, the company started to go international and in 2001 it extended the patented technology
for rubber soles to leather soles. In 2004 it was listed on the Milan Stock Exchange. The offer ranges from classical to casual,
fashion and, lastly, sports footwear (the launch of shoes especially dedicated for sports took place at the beginning of 2008) in
addition to apparel and covers the entire family segment: products specifically for men, women and children, making Geox a
real family brand. Mr Moretti Polegato, through his holding Lir, has bought Diadora. Geox posted 32% of total sales in Italy; 44%
in Europe (ex Italy), 7% in North America, 17% in the Rest of the World in FY 13. Geox distribution mix was as follows in FY 13:
wholesale 43%, DOS 38%, Franchisers 19%. Geox shops totalled 1,299 (o/w 450 DOS) –year end 2013.
SWOT Analysis
Strengths
• Geox is being turned-around
Weaknesses
• Consumer preferences could weaken/change
• Geox’s offer ranges from fashion to classic to sport
• “Ex-growth” company
• Collections are not trend setters
• Late in developing in growing countries (emerging and
new emerging markets).
• Shift from wholesale to retail£cr£
Opportunities
• Management reshuffling
Threats
• The turnaround could take longer to bear fruits
• Flexible production, 100% outsourced
• Pressure from competitors
• New patented product launches
• Geox’s market is fragmented
• Supply chain reshaping - Never out of stock project
• Pricing policy could reveal inadequate
Recommendation: Geox presented its new 2014/2016 business plan in Milan in Geox’s show room on November 15th. The plan
was rich in details and in numbers: objectives to reach are clear and were well explained by the new strategic moves and
organizational changes. Overall sales CAGR target during the business plan should be in the range of 9%, while EBITDA CAGR
should be 62%; this should be reached through a first phase (2013 until H1 14) of product re-focusing (complexity reduction – giveup the kids apparel and total look production i.e.), cost cutting, business securing in the core markets, efficiency improvements and
investments and NWC control; and through a second phase (from H2 14) of sustainable growth, development in core markets and
profitability improvement, expansion in new markets and web channel maximization.
titre
Our impression is that the targets proposed by the company are reachable but strongly demanding; however, they are pursued by a
very committed management team. Trust in the new management capability to turn the company around, is a pre-requisite to
consider Geox as an investment opportunity.
5.5
5.0
4.5
4.0
Target Price: EUR 2.50
3.5
3.0
Analyst(s)
2.5
2.0
1.5
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Giada Cabrino, CIIA
Banca Akros
+39 02 4344 4092
[email protected]
Source : Factset
93
Germany
SMALL & MID CAPS SELECTION
EUR 47.94
Hold
GERRESHEIMER AG
GXI.DE/GXI GR
Market capitalisation: EUR 1505m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR53.75 / 41.80
11/12
1,219
231
19.0%
126
10.3%
60.2
80.2
160
377
0.6
1.6
7.1
7.3%
0.9
1.5
1.6
8.4
15.5
15.4
2.3
4.9%
1.6%
2.55
4.5%
17.04
0.65
2.3%
11/13
11/14e
11/15e
1,266
1,327
1,415
241
259
276
19.1%
19.5%
19.5%
133
147
163
10.5%
11.1%
11.5%
62.2
70.1
79.6
96.7
84.0
91.5
165
189
202
435
402
367
0.8
0.6
0.5
1.8
1.6
1.3
7.1
7.2
7.5
6.9%
7.4%
8.0%
0.9
0.9
1.7
1.7
1.6
1.9
1.8
1.6
9.9
9.0
8.4
18.0
15.8
14.2
16.1
17.9
16.4
3.1
2.7
2.5
1.8%
4.0%
4.1%
1.5%
1.5%
1.5%
3.08
2.68
2.91
20.6%
-13.1%
8.9%
16.11
17.64
19.48
0.70
0.70
0.73
-0.3%
-1.8%
0.9%
Avg. Daily nb traded shares:45,652
Profile: Gerresheimer (GXI) has established itself as a global glass and plastic packaging specialist with a
strong focus on the pharmaceutical industry (c. 80% of sales). Its glass business holds leading positions in
the US and the European market. Additionally, GXI is a European leader in health care plastic packaging
solutions (from primary plastic packaging to more sophisticated drug delivery systems such as inhaler,
insulin pens, etc.). GXI’s main markets are characterized by high regulatory and technical requirements in
combination with the need for cost effective, high volume production. Customers contract long-term supply
agreements, and GXI can typically pass on raw material prices increase to customer via price escalation
clauses.
SWOT Analysis
Strengths
• Global one-stop shop for pharma packaging
Weaknesses
• Non-patentable manufacturing process
• Leading market positions in Europe and NA in Tubular
Glass & Moulded Glass, in Europe in Plastic System, in NA in
•LSR
Diversified by product portfolio, geography and
customers (biggest client <5% of sales)
• Capital intense business model (70% CE/Sales)
Opportunities
• Exposure to growth market (RTF syringes 14% p.a.
growth, insulin pens 8% p.a., emerging markets double•digit-growth
Underlying rates)
market growth, acquisitions and new product
launches should ensure high-single-digit sales growth
• Increasing sales share of Medical Devices vs. primary
pharmaceutical packaging should help margins
Threats
• Limited pricing power and pricing pressure from
competition in emerging countries
• Rising labour, energy and raw material costs
Main shareholders: Free float 100.0%;
• Historically low FCF generation and flat margin
development
• Political uncertainty in emerging markets
• Substitution of glass packaging by plastic packaging
All share prices at 19/05/14.
Recommendation: We rate Gerresheimer ‘Hold’ with a target price of EUR 45. We believe the positives of
the GXI investment case is priced in. The current level of valuation should leave little upside potential.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
55
50
Target Price: EUR 45.00
45
40
GERRESHEIMER AG SMALL & MID CAPS SELECTION
Analyst(s)
35
30
25
Mrz 11
Source : Factset
94
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Konrad Lieder
+49 69 5899 7436
Equinet Bank
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 37.31
Hold
Gimv
GIMV.BR/GIMB BB
Market capitalisation: EUR 922m
Financial Services
PROFIT & LOSS (EURm)
Revenues
Non Recurrent Items
Net Profit (reported)
BALANCE SHEET (EURm)
Shareholders Equity
Minorities equity
Net Debt
NAV Constituents & Total NAV (EURm)
Consumer 2020
Health & Care
Smart Industries
Sustainable Cities
Third Party Funds
Other assets
Net cash/(debt) position
Total Net Asset Value
Discount/(Premium) to NAV
Listed shareholdings on NAV
OTHER ITEMS (EURm)
Total Market Cap
Debt / Equity
Payout Ratio
P/BV
Dividend Yield (Gross)
PER SHARE DATA (EUR)
EPS (reported)
NAVPS
BVPS
DPS
2010
30.9
104.2
135.2
2011
36.9
-58.8
-21.9
2012
28.7
4.0
32.7
2013e
1,112.0
20.6
-185.8
1,022.1
10.8
-183.4
1,020.7
8.9
-195.3
177.5
72.0
237.4
113.4
184.0
30.0
197.5
1,011.8
-7.7%
18.0%
219.3
75.5
247.8
143.4
208.5
37.6
57.7
989.8
-6.8%
13.1%
SWOT Analysis
905.6
185.8
1,091.4
-9.8%
11.2%
168.7
73.9
238.9
93.7
176.9
93.2
166.0
1,011.3
-12.3%
19.0%
985.0
-16.7%
42.0%
0.9
5.8%
886.5
-17.9%
nm
0.9
6.4%
934.3
-19.1%
179.5%
0.9
6.6%
917.8
5.833
47.092
47.980
2.450
-0.946
43.634
44.101
2.450
1.365
42.223
42.593
2.450
Opportunities
• Large growth potential in Europe and improving European
M&A market
• Specific activities or certain countries are approached
through specialised funds with experienced partners
• Fragmented private equity market offers consolidation
possibilities
6.6%
40.033
2.450
Source: Company, Bank Degroof estimates
Main shareholders: VPM 27%
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
48
46
22/05/14 Results
2014
22/05/14 Results
2014
22/05/14 Analyst Meeting
2014
44
42
Profile: Gimv is an independent investment company that is specialised in private equity (PE) and venture
capital (VC), focusing mainly on the European market. The company pursues active participation and an
enterprise-driven approach, oriented towards value creation. This way, Gimv helps companies increase
turnover and profitability. Over the past decades, Gimv has formed partnerships with top companies, helping
them to realise their strategic plans. Today, Gimv continues to invest in small and medium-sized enterprises
with an attractive track record, potentially strong growth perspectives and a strong market position. As such,
Gimv gives investors the opportunity to participate in non-listed companies.
Strengths
• Over 3 decades of experience in PE and VC with historical
IRR of >11%
• Strong net cash position: ample financial means for new
acquisitions
• Stable dividend policy with optional stock dividend and
high dividend yield
Weaknesses
• Limited visibility on the underlying operations of the
private equity portfolio
• Cash drag on return. Proceeds from cash have a negative
impact on ROE.
• Young vintage portfolio, which hampers potential for
divestments
• Limited international scope: still mainly Belgium and
neighbouring countries
Threats
• Some participations are very exposed to economic cycle
in Europe.
• Uncertainty about future tax legislation for investment
companies in Belgium
• Vulnerable to changes in stock market sentiment and
impact holding company discount to NAV volatility
Recommendation: Gimv boasts a historical IRR of >11% and although past performance is no guide to the
future, it underlines management competence. Moreover, Gimv valuates its portfolio conservatively, which
results in consistent exits above “opening equity value” (in recent years on average >45% above the
valuation at the start of the fin. year in which the asset has been divested). Therefore we are ready to accept
a low discount to NAV. Expect investments to outpace divestments in the course of FY14/15 (1-Apr till 31Mar). This will limit the uplift on NAV as long as the macro environment does not show a clear improvement,
needed by Gimv’s underlying operating companies to support valuations. We therefore maintain our Hold
rating and confirm our EUR 38.5 target price. At a gross dividend yield of 6.5% at unchanged DPS of
EUR 2.45, the present stock price level could tempt yield seeking investors, though.
Target Price: EUR 38.50
40
38
36
34
32
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
GIMV SMALL & MID CAPS SELECTION
Analyst(s)
Hans D'Haese
+32 (0) 2 287 9223
Bank Degroof
[email protected]
95
Germany
SMALL & MID CAPS SELECTION
EUR 75.55
Hold
GRENKELEASING AG
GKLG.DE/GLJ GR
Market capitalisation: EUR 1111m
Financial Services
EUR
12/12
Total Revenue (m)
185
Pre-Provision Profit (PPP) (m)
103
Loan Impairment Charge (m)
-43.4
Operating profit (OP) (m)
59.8
Earnings before tax (m)
59.7
Net profit (reported) (m)
42.5
Net profit (adj.) (m)
42.5
Shareholders equity (m)
351
Tier 1 Ratio
0.0%
Cost/Income ratio
44.1%
ROE (adj.)
12.7%
NPL ratio (gross)
9.3%
NPL coverage
49.0%
LIC/Avg. RWA
high
P/Pre-Provision Profit per Share
6.7
P/E (adj.)
16.3
P/BV
2.0
P/NAV
2.0
Dividend yield
1.6%
PPPPS
7.54
EPS (adj.)
3.10
EPS (adj.) growth
8.2%
BVPS
25.65
NAVPS
25.65
DPS
0.80
Abs. Performances(12m,6m,3m,1m):
25.7%
12 month High/low: EUR81.60 / 59.29
Main shareholders: Free float 57.4%; Grenke Family 42.6%;
12/13
12/14e
12/15e
214
242
273
114
132
150
-49.8
-55.0
-60.0
64.7
77.0
89.9
64.3
76.4
89.1
47.0
55.8
65.1
47.0
55.8
65.1
439
483
535
0.0%
0.0%
0.0%
46.5%
45.5%
45.0%
11.9%
12.1%
12.8%
8.2%
7.5%
7.0%
49.0%
49.0%
49.0%
high
high
high
8.6
8.4
7.4
21.1
19.9
17.1
2.3
2.3
2.1
2.3
2.3
2.1
1.3%
1.5%
1.6%
7.86
8.98
10.20
3.23
3.79
4.43
4.1%
17.5%
16.7%
30.19
32.86
36.39
30.19
32.86
36.39
1.00
1.10
1.20
7.9%
-0.7%
2.4%
Avg. Daily nb traded shares:5,490,000
Profile: Grenkeleasing has become the leading small-ticket IT financing specialist in Germany and
Switzerland since its foundation in 1978. Grenkeleasing offers its services with the help of around 7,400
German and 4,500 international non-exclusive sales partners. Currently it is offering its services in more
than 20 countries. It has started operations in Brazil, its first overseas country, in 2012. In 2013 66% of
Grenke’s total new business (EUR 1.2bn, +16% yoy) was generated in the international offices. With an
equity ratio of 17% Grenkeleasing is well capitalized. Its CIR of 47% (2013) is well below the competitors’
level. Last but not least Grenke has broadened its funding base since 2009 with the acquisition of Hesse
Newman Bank (now operating under the brand Grenke Bank) and the issuance of corporate bonds.
For 2014 we expect strong earnings growth (+19% yoy) due to good interest income growth resulting from
the good portfolio growth in recent quarters, which should more than offset the cost growth related to the
ongoing international expansion.
SWOT Analysis
Strengths
• Good asset quality
Weaknesses
• International expansion may trigger another capital
increase
• Scalable business model
• Very good management track record
Opportunities
• International expansion outside of Europe continues
Threats
• Euro crisis comes back
• Competitive market environment deteriorates again
All share prices at 19/05/14.
Recommendation: As we do not see any share price triggers and as we see the shares as fairly valued at
the current share price level we stick to our Hold recommendation with a target price of EUR 70.00.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 70.00
titre
85
02/07/14 Trading Update
80
2014Q2
75
70
65
GRENKELEASING AG SMALL & MID CAPS SELECTION
Analyst(s)
60
55
50
45
40
Philipp Häßler, CFA
35
30
Mar 11
Source : Factset
96
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+49 69 58997 414
Equinet Bank
[email protected]
Greece
SMALL & MID CAPS SELECTION
EUR 7.60
Buy
HELLENIC EXCHANGES
EXCr.AT/EXAE GA
Market capitalisation: EUR 497m
Financial Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR9.50 / 5.31
12/12
33.0
11.6
35.0%
9.8
29.5%
11.8
11.9
6.5
-114
-0.8
-9.9
nm
18.9%
1.5
4.1
4.9
14.1
16.7
23.9
1.9
1.2%
2.1%
0.18
-39.7%
2.33
0.09
10.3%
12/13
12/14e
12/15e
81.5
56.4
63.1
60.5
35.1
40.9
74.3%
62.2%
64.8%
59.1
33.2
39.0
72.5%
58.9%
61.8%
32.3
29.2
34.0
18.2
29.2
34.0
50.2
31.1
35.9
-163
-133
-122
-0.9
-0.8
-0.8
-2.7
-3.8
-3.0
nm
nm
nm
126%
79.4%
99.4%
10.1
7.6
9.5
10.1
10.8
12.0
4.3
6.3
5.8
5.8
10.2
9.0
6.0
10.7
9.4
28.7
17.0
14.6
2.9
3.1
3.3
9.9%
5.9%
7.3%
0.0%
2.9%
3.4%
0.28
0.45
0.52
53.1%
60.6%
16.3%
2.77
2.49
2.29
0.00
0.22
0.26
2.4%
-1.3%
-12.6%
Avg. Daily nb traded shares:266,433
Main shareholders: Free float 100.0%;
Profile: Hellenic Exchanges (HELEX) is the operator of the Greek cash, derivatives and bond markets. It is
also the organisation responsible for the clearing and settlement of the ATHEX transactions and
administration of the Dematerialized Securities System. Since 2003, HELEX is a fully privatised group. In
2013, nearly 25% of the group’s sales derived from trading and clearing of transactions in the stock
exchange and the derivatives market, while 52% of total revenues resulted from share capital increases and
CCH's delisting. The company has a very high operating leverage that results in a rather volatile earnings
stream.
SWOT Analysis
Strengths
• Sustainable cash flow stream
• Generous dividend policy
Weaknesses
• Financial performance is highly dependent on market
conditions in ATHEX
• More expensive pricing structure compared to other
bourses
• Thin derivatives market
• Debt-free balance sheet
• Scarcity of new listings
Opportunities
• Introduction of new products and services
Threats
• Vulnerable to Greece’s economic outlook
• ATHEX demotion to emerging markets by MSCI to
support trading activity
• Reduced country-specific risks to raise investor appetite
for Greek equities
• MiFID paved the way for the entry of new competitors
• High operating leverage
• The potential delisting of any of the key names would
harm ATHEX's attractiveness
Recommendation: We have set our target price at EUR 10.00/share assigning a ‘Buy’ recommendation on
the stock. We remain bullish on Hellenic Exchanges as we view that there is significant room for further
improvement in the average daily transaction value (ADT) after the reclassification of ATHEX to emerging
markets by MSCI and the positive developments from the macro front that are expected to lead to a strong
earnings momentum (26% compound EPS growth over 2013-2018) and a generous dividend policy (>6%
dividend yield for 2013-2018).
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
10
9
30/06/14 AGM
2013
17/06/14 AGM
2013
Target Price: EUR 10.00
8
7
6
5
4
27/05/14 Results
2014Q1
26/05/14 Results
2014Q1
3
2
1
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
HELLENIC EXCHANGES SMALL & MID CAPS SELECTION
Analyst(s)
Investment Bank of Greece
Dimitris Birbos
+30 210 81 73 392
[email protected]
Source : Factset
97
Italy
SMALL & MID CAPS SELECTION
EUR 2.03
Accumulate
HERA
HRA.MI/HER IM
Market capitalisation: EUR 2857m
Utilities
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.17 / 1.36
12/12
4,493
662
14.7%
335
7.5%
112
112
451
2,217
1.2
3.3
4.9
7.8%
1.2
0.8
0.8
5.2
10.2
12.0
0.8
-3.6%
7.4%
0.10
7.1%
1.57
0.09
26.7%
12/13
12/14e
12/15e
4,580
4,370
4,341
831
850
874
18.1%
19.4%
20.1%
416
473
476
9.1%
10.8%
11.0%
165
171
167
165
171
167
941
558
576
2,595
2,719
2,833
1.1
1.2
1.2
3.1
3.2
3.2
5.4
4.4
4.3
8.0%
8.8%
8.6%
1.2
1.3
1.3
0.9
1.0
1.0
1.0
1.2
1.3
5.8
6.4
6.4
11.5
11.5
11.7
14.1
16.8
17.1
1.1
1.3
1.3
4.7%
0.4%
0.8%
4.4%
4.4%
4.4%
0.12
0.12
0.12
16.4%
3.4%
-2.0%
1.53
1.56
1.59
0.09
0.09
0.09
27.2%
8.3%
-5.4%
Avg. Daily nb traded shares:2,002,413
Main shareholders: Free Float 48.2%; Romagna Provinces 21.3%; Bologna Provinces 20.5%;
Modena Procinces 13.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.2
2.0
1.8
1.6
05/06/14 Dividend Payment
2013
02/06/14 Ex Dividend Date
2013
Profile: HERA is active in a wide range of services, including Gas and Electricity (nowadays, mainly downstream),
Waste Management, Integrated Water Management and Other Activities (District Heating, Public Lighting, etc.). In
2013, EBITDA was well diversified and around 60% came from regulated activities, with Energy representing
approx. 23% of the total, Networks 47%, Waste 29% and Other Activities 1%. Business diversification represents a
natural hedge against profitability drops in some specific sectors and smoothes the effects of seasonal factors in
each sector.
SWOT Analysis
Strengths
• Sound, stable and safe growth
• Stable customer base (churn rate is very low,
approximately 1.5%, in the gas business)
• Well proportioned and diversified business mix
• Growth in profitability is coupled with a dividend yield of
around 7%
Opportunities
• The sound financial structure is giving the company
additional fire power for M&A
• The consolidation of local utilities in Italy
• The progressive start-up of new plants/projects should
boost margins
• The Fondo Strategico Italiano entrance in Hera
Weaknesses
• Upstream capacity in power generation below volumes
sold
• Procurement of gas concentrated on few suppliers
• Uncertainty on the water business, due to the lack of
regulatory framework
Threats
• Changes in the regulatory framework
• The possibility that a merger could be closed at
unfavourable conditions
• A sharp increase in interest rates, which could reduce the
appeal of the entire utilities sector
Hera has recently unveiled its new business plan covering 2012-2017. The business plan includes AcegasAPS,
Energonut, AMGA and AIMAG contributions. The first two companies are already part of the group while AMGA
(EBITDA 25m circa) is consolidated since January 2014. AIMAG (EBITDA 44m circa) should be merged in 2014
and thus it should be consolidated since January 2015. 2017 financial targets: revenues of around EUR 5.6bn
(EUR 4.6bn in 2013); EBITDA EUR 951m (EUR 831m in 2013); EBIT EUR 500m (EUR 416m) and a net financial
position of roughly EUR 2.75bn, nearly 2.9x EBITDA (3.15x in 2013). DPS policy: EUR 0.09 per share granted as a
floor (yield around 4.2%). The BP, will leverage on: Service. Further efficiencies as a result of operating activities
and improvements in service levels. Business mix. Maintaining a balanced service portfolio between regulated and
free market businesses. Sale of energy. Increase in the sale of energy, increasing the number of customers and
the use of online channels. Upstream. Updating the position of the group in upstream energy. Network services
infrastructures. Development of networks following a smart area/city approach. Waste management. Further
development of waste collection and plants with the improvement of infrastructures dedicated to the recovery of
materials and energy. Renewables. Further development of energy production (electrical and thermal) from
renewable sources especially in relation to the waste/biomass chain. Merger. Exploitation of the options for growth,
both organic and through acquisitions, consistent with local area strategies and the core businesses .
Target Price: EUR 2.35
1.4
1.2
Analyst(s)
1.0
0.8
Mar 11
Source : Factset
98
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Dario Michi
Banca Akros
+39 02 4344 4237
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 44.59
Hold
HES BEHEER
HESA.AS/HES NA
Market capitalisation: EUR 404m
Industrial Transportation
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR50.12 / 37.85
12/12
87.5
23.7
27.1%
15.6
17.8%
25.6
25.6
32.5
50.1
0.4
2.1
10.2
14.5%
1.8
3.4
3.8
14.0
21.3
14.2
3.0
2.7%
1.8%
2.92
5.0%
13.94
0.76
8.9%
12/13
97.1
24.4
25.2%
14.5
14.9%
24.3
24.3
33.9
75.0
0.5
3.1
6.4
8.8%
1.1
1.7
2.6
10.5
17.7
16.8
2.8
5.5%
1.0%
2.68
-8.1%
15.85
0.43
-8.9%
12/14e
12/15e
99.4
109
29.4
33.2
29.6%
30.4%
18.0
19.2
18.1%
17.6%
28.2
30.4
28.2
30.4
32.3
36.8
92.3
144
0.5
0.8
3.1
4.3
5.2
5.2
8.8%
7.3%
1.1
0.9
1.4
1.3
2.7
2.9
9.0
9.5
14.7
16.5
14.1
13.1
2.3
2.1
-4.3%
-9.4%
0.0%
3.4%
3.12
3.36
16.2%
7.9%
18.97
20.82
0.00
1.51
-1.2%
-0.6%
Avg. Daily nb traded shares:0,587
Main shareholders: Free float 30.6%; Westerduin 21.3%; Strating/Gestion 11.9%;
PPF 9.9%; Plimsoll 9.5%; Menor Investments 6.5%; Parkland 5.2%; Onderdijk 5.1%;
All share prices at 19/05/14.
Profile: HES Beheer is a Euronext listed Netherlands based holding company that owns (wholly or via jointventures and minority stakes) companies that provide logistical services in ports. The core activity of the
company is stevedoring dry and liquid bulk goods destined for industrial end-users as well as the storage of
dry and liquid bulk. End clients are energy companies, steel companies and oil refiners and traders as the
most important dry bulk is cokes and coal while the key liquid bulk is oil (in its various, distilled, forms).
SWOT Analysis
Strengths
• Excellent position in market (location)
Weaknesses
• Not direct control of certain opco's\
• Experienced management team
• Convoluted shareholder structure of affiliates
• Robust financial position
Opportunities
• Grow in Liquid bulk market
Threats
• Product substitution (renewables versus coal)
• Expand internationally
• Change of production location steel factories to Asia
• Increase efficiency existing operations
Recommendation: Now that Hestya is formally launching the offer of EUR 45 per share for all outstanding
shares of HES, the chance is high that most shareholders will eventually opt to accept this offer. If they do
not accept the offer and Hesty obtains over 80% of the shares (58% is already committed), Hestya may opt
for a legal merger, leaving them with a stake in a non-listed entity which is not very appealing either.
Because of the above, we rate the shares with a rating in line with the offer even though we realize that, with
ATIC on board now, the fair value should be a little higher.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
Target Price: EUR 45.00
50
25/07/14 Results
48
2014H1
46
44
42
28/05/14 Dividend Payment
2013
23/05/14 Ex Dividend Date
2013
21/05/14 AGM
2013
40
38
36
34
32
30
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
HES BEHEER SMALL & MID CAPS SELECTION
Analyst(s)
Martijn den Drijver
+312 0 5508636
SNS Securities
[email protected]
Jun 14
Source : Factset
99
Germany
SMALL & MID CAPS SELECTION
EUR 17.50
Reduce
HHLA
HHFGn.DE/HHFA GY
Market capitalisation: EUR 1226m
Industrial Transportation
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR20.30 / 16.29
12/12
1,101
290
26.4%
173
15.7%
66.6
66.6
199
189
0.4
0.6
11.7
10.5%
1.2
1.6
1.6
6.2
10.5
18.7
2.3
5.2%
3.6%
0.95
-20.8%
7.69
0.65
-6.3%
12/13
12/14e
12/15e
1,127
1,150
1,188
263
261
277
23.3%
22.7%
23.3%
144
142
155
12.8%
12.3%
13.1%
48.3
49.8
58.5
48.3
49.8
58.5
206
172
187
146
150
141
0.3
0.3
0.2
0.6
0.6
0.5
7.3
7.8
9.4
8.9%
8.6%
9.2%
1.0
1.0
1.1
1.5
1.5
1.5
1.6
1.5
1.5
6.7
6.6
6.3
12.1
12.2
11.2
25.8
24.6
21.0
2.2
2.1
2.0
7.3%
2.3%
3.6%
2.6%
2.6%
2.9%
0.69
0.71
0.83
-27.6%
3.2%
17.3%
8.18
8.44
8.82
0.45
0.45
0.50
-2.6%
-10.2%
2.8%
Avg. Daily nb traded shares:67,315
Profile: HHLA is one of the leading port logistics companies in the European North Range, i.e. the ports
between Hamburg and Le Havre. The geographical focus of its commercial activities is on the Port of
Hamburg and its hinterland.
The Class A shares listed on the stock exchange belong to the sub-group Port Logistics and only entitle
shareholders to participate in the result and net assets of these operations. The sub-group Port Logistics is
made up of the Container, Intermodal and Logistics segments.
SWOT Analysis
Strengths
• With a market share of about 20% HHLA is a leading
player in the European North Range
• Infrastructure investment with growing cash flows
Weaknesses
• HHLA depends on the framework set by the state
regarding the infrastructure (e.g. channel improvement of
Elbe
River and
the hinterland
infrastructure
•the
The
company
is majority
state owned
• Unique network between overseas ports and European
hinterland
• Specialised inland terminals for rail traffic
• Limited cost flexibility due to capital-intensive business
model
• High dependence on Hamburg location
Opportunities
• HHLA is in a good position to benefit from growth in
global trade
• Hamburg has distance advantages in the natural
catchment area as an easterly hub for transhipments to
Europe
•Eastern
The river
Elbe dredging might start in 2014
Threats
• Hamburg competes with other ports of the North Range.
As there is excess capacity in the market, a price war could
be ruledtoout
•not
Exposure
Odessa and Russia
• Freight volume concentrates at major international
handling sites like these of HHLA in Hamburg
• Worsening of the peak load situation at the Hamburg
container terminals due to increasing ship sizes
• The dredging of the river Elbe might be postponed again
Main shareholders: City of Hamburg 68.4%; Free float 31.6%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
34
32
14/08/14 Results
2014Q2
14/08/14 Results
2014Q2
Recommendation: The reported Q1 2014 results beat our expectations in sales driven by good volume
growth of 2.4% (equinet forecast 2.0%) and by very high storage fees. Consequently, EBITDA and EBIT
came in slightly better than expected. However, net profit and EPS were burdened by the devaluation of the
Ukrainian local currency and came in below expectations. Overall, Q1 2014 was a good quarter and HHLA
confirmed the full year guidance.
We adjust our forecasts slightly. We maintain our price target of EUR16 per share and reiterate our Reduce
recommendation.
Target Price: EUR 16.00
30
28
26
24
22
20/06/14 Ex Dividend Date
2013
20/06/14 Dividend Payment
2013
19/06/14 AGM
2013
20
18
16
Mrz 11
Source : Factset
100
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
HHLA SMALL & MID CAPS SELECTION
Analyst(s)
Jochen Rothenbacher, CEFA
+49 69 58997 415
Equinet Bank
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 3.48
Hold
HKSCAN
HKSAV.HE/HKSAV FH
Market capitalisation: EUR 188m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR4.34 / 3.30
12/12
2,503
129
5.1%
43.0
1.7%
16.4
16.4
104
441
1.0
3.4
4.5
4.1%
0.6
0.7
0.2
4.1
12.2
12.0
0.5
21.0%
2.8%
0.30
62.8%
7.85
0.10
-9.4%
12/13
12/14e
12/15e
2,113
2,065
2,112
83.3
52.1
75.9
3.9%
2.5%
3.6%
11.7
1.1
25.4
0.6%
0.1%
1.2%
-10.1
77.7
24.7
-10.1
77.7
24.7
62.7
130
76.7
336
54.0
89.0
0.8
0.1
0.2
4.0
1.0
1.2
4.0
nm
nm
1.5%
0.2%
5.0%
0.2
0.0
0.7
0.6
0.2
0.2
0.2
0.0
0.0
4.3
1.2
1.3
30.8
56.9
3.8
nm
2.4
7.6
0.5
0.4
0.4
44.5%
153%
13.8%
2.9%
31.6%
5.7%
-0.19
1.44
0.46
-chg
+chg
-68.2%
7.41
8.75
8.11
0.10
1.10
0.20
0.3%
-7.9%
-10.3%
Avg. Daily nb traded shares:65,013
Main shareholders: Free float 52.6%; LSO Osuuskunta 34.9%; Sveriges Djurbönder ek.för 12.5%;
Varma Mutual Pension Insurance Co 6.8%;
Profile: A supplier of meat and meat products, HKScan makes 46% of its sales in Sweden, 38% in Finland,
11% in Denmark and the rest in the Baltic countries by selling products to customers in the retail, industrial
and HoReCa sectors and export markets.
SWOT Analysis
Strengths
• Market leader in Sweden and the Baltic countries
• Good poultry business in Finland and the Baltic countries
Weaknesses
• Weak bargaining power – the Finnish and Swedish retail
sectors are the most heavily concentrated in the world
• Slaughter overcapacity in Sweden
• Strong brands
• Two share series, a cooperation of Finnish contract
producers holds the voting ones
Opportunities
• “Normalisation” of profitability after the raw material
spike
• Ongoing streamlining measures
Threats
• Further diminishing availability of domestic meat raw
material in Sweden
• Weakening loyalty to domestic meat products in general
• Redirecting the Danish poultry business’ focus from
frozen to fresh products
• Goodwill impairment
• Private label taking more market share
Recommendation: The share will be overshadowed by the profit warning risk in the coming quarters. On
the other hand, the markedly strengthening balance sheet following the sale of the Sokolów stake will in the
future enable generous dividend payments, which in our view will support the share price.
All share prices at 19/05/14.
Target Price: EUR 4.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
6.5
HKSCAN SMALL & MID CAPS SELECTION
Analyst(s)
6.0
5.5
5.0
4.5
Niclas Catani
4.0
+358 10 252 8780
Pohjola
[email protected]
3.5
3.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
101
Italy
SMALL & MID CAPS SELECTION
EUR 1.19
Accumulate
IGD
IGD.MI/IGD IM
Market capitalisation: EUR 413m
Real Estate
EUR
12/12
118
86
69.6%
(32)
(48)
0
24
35.85
1,090
1,845
1,359
0.06
0.07
1.82
(55.4%)
2.49
7.3%
8.6%
15.9
14
high
1,090
54.6%
35.1%
12/13
12/14e
12/15e
116
115
119
EBITDA (m)
83
82
87
EBITDA margin
68.1%
68.6%
69.4%
Portfolio Result (m)
(35)
(1)
(2)
Net Financial Result
(47)
(48)
(50)
Net Profit (reported)(m)
0
0
0
Net Profit (adj.)(m)
23
30
33
Funds From Operations
33.84
31.74
35.48
Net Debt (m)
1,086
1,079
1,129
Portfolio Value (m)
1,838
1,851
1,920
Enterprise Value (m)
1,388
1,494
1,544
EPS (adj.)
0.05
0.07
0.16
DPS
0.07
0.04
0.05
IFRS NAVPS
1.77
1.82
1.86
Premium/(discount)
(51.2%)
(34.7%)
(36.2%)
EPRA NAVPS
2.45
0.00
0.00
Earnings adj. yield
4.5%
5.9%
13.1%
Dividend yield
5.5%
3.6%
4.1%
EV/EBITDA
16.7
18.1
17.8
P/E (adj.)
16
17
8
Int. cover(EBITDA/Fin.int)
high
high
high
Net debt/(cash) (m)
1,086
1,079
1,129
Net Debt/Total Assets
54.8%
54.1%
54.6%
Abs. Performances(12m,6m,3m,1m):
35.3%
8.4%
-6.3%
12 month High/low: EUR1.36 / .72
Avg. Daily nb traded shares:837,313
Main shareholders: Free float 44.9%; Coop Adriatica 41.5%; Unicoop Tirreno 13.6%;
Gross Rental Income (m)
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.0
07/08/14 Results
1.8
1.6
1.4
1.2
1.0
0.8
2014H1
Profile: IGD is one of the main players in the retail segment of the Italian real estate market. Founded by
Coop Adriatica and Unicoop Tirreno, which are part of Coop group, the market leader in the Italian food
retailing sector, IGD business model is mainly focused on the acquisition, leasing and management of
shopping centres, hypermarkets and shopping malls in the domestic market, which account for around 90%
of total turnover.
SWOT Analysis
Strengths
• IGD’s main shareholders are part of the market leader in
the Italian food retailing sector
• Hypermarkets and supermarkets are leased under longterm rental agreements
Weaknesses
• No reversionary potential for hypermarket and
supermarkets
• Romanian portfolio
Opportunities
• Property acquisition by marginal players
Threats
• High loan-to-value
• SIIQ law improvements
• Increase in interest rates
• Third parties’ property contribution into IGD
• Weak macroeconomic environment in Italy
Recommendation: at the end of 2013 IGD portfolio was worth EUR 1,891.3m (90% Italy,10% Romania).
Italian properties account for EUR 1,718m (including plot of lands and assets held for sale) and are primarily
located in the north of the country: Hypermarkets are the stable component of IGD’s portfolio. They are
leased on a long-term basis to Coop Adriatic and Unicoop Tirreno. The occupancy rate is 100%, with an
average yield of 6.63% (market value EUR 544.4m). Shopping malls are the dynamic portion of IGD's
portfolio. At the end of 2013, the occupancy rate was 96.2%, with an average yield of 6.52% (market value
EUR 971.5m). The Romanian portfolio is worth EUR 170.0m and has a 6.44% yield with an occupancy of
84.5%.
IGD NNAV at the end of 2013 was EUR 2.22/sh compared to EUR 2.31/sh at the end of 2012; the company
paid a EUR 0.07/sh dividend payable in cash or in new shares. The main concern on IGD is the LTV at
57.4% which is sizeably higher than the industry average; the average cost of debt is 3.94%.
At the beginning of May Quantum fund bought 3.15% of the company by IGD itself which sold to the fund
all of its treasury shares (10,976,592); the fund bought another 1.8%,6,423,494, from Unicoop Tirreno (the
present second largest shareholder of the company). As a consequence Quantum Strategic Partners owns
now 17,400,086 shares or 5% of the company.
Valuation: we have valued IGD by using a DCF model with a 6.71% WACC (5.0% cost of debt and 8.9%
cost of equity) and a 2% perpetual growth. We confirm our target price and our recommendation on the
stock.
0.6
0.4
Mar 11
Source : Factset
Target Price: EUR 1.40
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Francesco Sala
102
Banca Akros
+39 02 4344 4240
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 31.45
Hold
IMA
IMAI.MI/IMA IM
Market capitalisation: EUR 1158m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR39.22 / 16.20
12/12
734
101
13.8%
75.0
10.2%
56.2
56.2
93.5
131
0.8
1.3
nm
16.1%
1.9
2.1
0.9
6.4
8.6
11.1
3.5
18.9%
6.9%
1.30
69.1%
4.15
1.00
60.5%
12/13
12/14e
12/15e
761
848
886
112
126
133
14.7%
14.9%
15.0%
94.1
99.7
106
12.4%
11.8%
11.9%
57.4
59.9
63.5
62.0
64.7
68.3
92.2
104
109
131
80.5
0.3
0.6
0.3
0.0
1.2
0.6
0.0
nm
high
high
16.1%
18.4%
20.6%
1.9
2.2
2.8
3.2
3.5
3.4
1.5
1.5
1.3
10.3
9.7
8.7
12.2
12.3
10.9
18.5
20.5
19.3
5.0
4.9
3.9
3.6%
7.1%
8.1%
4.0%
4.0%
4.0%
1.51
1.53
1.63
16.6%
1.6%
6.3%
5.55
6.46
7.98
1.25
1.25
1.25
15.3%
-9.8%
-12.6%
Avg. Daily nb traded shares:129,185
Main shareholders: SO.FI.MA 67.6%; Free float 30.4%; COFIVA 2.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
40
08/08/14 Results
35
30
2014Q2
29/05/14 Dividend Payment
2013
26/05/14 Ex Dividend Date
2013
Profile: IMA is a major producer of packaging and processing machines for the pharmaceutical industry
(62% sales) and world leader in the manufacture of automatic machines for packaging of tea bags, foods
and others (38% sales). In the pharma sector its machines cover the entire production line of those
industries ranging from the solid dose, blistering, filling, cartooning and end of line. IMA operates through 22
production plants in Italy, Germany, UK, USA, India and China. IMA has an extensive sales network
comprising 16 branches in Western Europe, USA, Asia, and over 50 agencies covering more than 70
countries. Major strengths of the group are 1) international diversification (92% of turnover realised abroad);
2) low fixed costs base as a result of a high degree of outsourcing (around 80% of mechanical components);
3) product innovation, with continuous introduction on the market of new models.
SWOT Analysis
Strengths
• Market leader in niche sectors
Weaknesses
• Heavily depending on pharma sector top line growth
• Cost flexibility: 80% of COGS subcontracted out
• Potential slowdown in the order intake and consequent
decrease in the growth expectation for 2014-2015
• Potential difficulties to integrate new acquisitions
• High customer loyalty
• High barriers to market entry
Opportunities
• Growth opportunities in the emerging markets (especially
in China with last local acquisition)
• Interesting synergies with new acquired companies in
food packaging sector
• Potential acquisitions in both sectors
10
Mar 11
Target Price: EUR 33.50
Analyst(s)
15
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
• Increase in raw material costs
Q1 14 sales increased by +32%: this result was achieved thanks to the positive trend of all group's divisions
and to the positive contribution of ILAPAK group, which has been consolidate from August 2013. EBITDA
margin improved from 6.2% in Q1 13 to 9.3% in Q1 14: the growth of operating margins was due to higher
sold volumes and a better product mix.
IMA’s order book at the end of March 2014 was EUR 506.4m, decidedly higher that EUR 446.1m at the end
of March 2013 (+13.5%).
FY 14 guidance confirmed – the management confirmed that they are confident that the group will meet
FY 14 guidance previously announced: sales around EUR 850m and EBITDA around EUR 127m. Based on
the foregoing results and indications, we maintain our FY 14 estimates, which are substantially in line with
the company’s guidance.
Recommendation: we maintain our Hold recommendation and, based on our DCF model (1.8% perpetual
growth rates and WACC of 7.4%), we confirm our target price of EUR 33.50 per share.
25
20
Threats
• Potential weakness in a global economy
Paola Saglietti
Banca Akros
+39 02 4344 4287
[email protected]
Source : Factset
103
Portugal
SMALL & MID CAPS SELECTION
EUR 1.67
Reduce
IMPRESA
IMPA.LS/IPR PL
Market capitalisation: EUR 281m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.97 / .60
12/12
229
19.5
8.5%
9.6
4.2%
-4.9
-4.9
5.0
219
1.8
11.2
1.4
2.1%
0.2
0.8
1.1
13.0
26.3
nm
0.4
27.7%
0.0%
-0.03
+chg
0.71
0.00
174.3%
12/13e
12/14e
12/15e
229
240
251
31.9
39.5
44.1
13.9%
16.5%
17.5%
27.4
34.8
39.2
11.9%
14.5%
15.6%
11.3
17.3
20.6
11.3
17.3
20.6
15.8
21.9
25.3
202
186
167
1.5
1.3
1.0
6.3
4.7
3.8
2.7
3.4
3.9
6.0%
7.6%
8.6%
0.6
0.8
0.9
1.1
1.4
1.3
1.6
1.9
1.7
11.5
11.4
9.7
13.4
12.9
10.9
16.2
16.3
13.6
1.4
1.9
1.7
9.3%
5.4%
6.9%
0.0%
0.0%
0.0%
0.07
0.10
0.12
+chg
52.7%
19.2%
0.78
0.88
1.00
0.00
0.00
0.00
83.8%
12.3%
-11.9%
Avg. Daily nb traded shares:44,540
Profile: Impresa is a leading media company in Portugal and focuses mainly on two areas: i) Television
with SIC, one of the 4 FTA channels (two private and two state owned), as well as a further 5 channels on
cable and ii) publishing (newspapers and magazines, with one of the largest portfolios in Portugal).
Furthermore, the company develops a multimedia segment focusing on internet contents (sites, tourism
and leisure platforms and games digital distribution).
Total revenues increased by 8% in 1Q14 to EUR 55.8m and operating costs increased by 4.4%; the
EBITDA recorded a 56.2% increase from EUR 3.6m in 1Q13 to EUR 5.6m in 1Q14 and the net profit
reached EUR 1.2m, a significant improvement compared with the net loss of EUR 0.9m registered in
1Q13. The increase in revenues was supported by the television segment (+14.1% YoY) while the
publishing area contribution dropped 9.5% YoY. Consolidated adverting revenues increased by 2.6%, with
Impresa outperforming the market due to the good audience levels, particularly in prime time.
As of March Imp returned to the main Portuguese index, the PSI 20.
SWOT Analysis
Strengths
• Diversified portfolio
Weaknesses
• Dependence on the economic and advertising cycle
• Strong position in FTA
• High competition in the publishing segment
• Leader in “premium time” audiences
• High leverage
• Good performance in cable TV
• There is no dividend payment
Opportunities
• Improvement in the advertising market
Threats
• Strong competition
• Reinforcement of audience share
• Economic environment
• Taking advertising and audience from smaller players or
players exiting the market
• Slower than expected recovery environment
Main shareholders: Impreger 50.3%; Free float 33.3%; Madre 4.9%;
BPI 3.2%;
All share prices at 19/05/14.
• Future decision’s about RTP (return to privatization or
concession idea)
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.0
Recommendation: Our recommendation is reduce with a fair-value of EUR 1.35.
Target Price: EUR 1.35
1.8
1.6
1.4
1.2
IMPRESA SMALL & MID CAPS SELECTION
Analyst(s)
1.0
0.8
0.6
0.4
0.2
mar 11
Source : Factset
104
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Helena Barbosa
+351 21 389 6831
Caixa-Banco de Investimento
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 1.19
Hold
IMTECH
IMUN.AS/IM NA
Market capitalisation: EUR 537m
Support Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.71 / 1.19
12/12
5,433
-51.7
nm
-159
nm
-226
-109
-172
798
1.4
-15.4
nm
-6.9%
-0.6
0.9
0.3
nm
nm
nm
1.2
-7.5%
0.0%
-1.18
-chg
5.90
0.00
-66.1%
12/13
12/14e
12/15e
4,945
5,057
5,212
-49.2
125
197
nm
2.5%
3.8%
-175
64.3
137
nm
1.3%
2.6%
-701
-81.0
35.8
-237
-56.0
58.8
-426
59.7
94.3
750
794
745
2.4
3.4
3.3
-15.3
6.4
3.8
nm
0.9
2.1
-8.9%
3.4%
7.5%
-0.8
0.3
0.7
1.5
1.0
1.0
0.4
0.3
0.2
nm
10.6
6.5
nm
20.5
9.3
nm
nm
9.1
3.2
2.4
2.4
-36.1%
7.9%
16.3%
0.0%
0.0%
0.0%
-0.53
-0.12
0.13
+chg
+chg
+chg
0.68
0.50
0.49
0.00
0.00
0.00
-43.9%
-40.8%
-20.0%
Avg. Daily nb traded shares:16,222,850
Profile: : Imtech is a European technical service provider in the field of electrical engineering, information
and communication technology and mechanical engineering. Its activities are distributed over a number of
market segments: buildings, industry, maritime, infra and telecom. The company targets top 3 positions in
each market segment.
Imtech’s ambitious growth strategy has come to a complete stop after irregularities in Poland and Germany
surfaced. More operational problems followed. Top management has been replaced. The company has
come in financial stress leading to a large rights issue and still not all pain has disappeared.
SWOT Analysis
Strengths
• Leading positions in Benelux, Germany and maritime
market
• Solution provider instead of capacity provider
• Imtech’s business model is strong in most markets
Opportunities
• Technical services becomes a larger part of total
construction values
• Energy efficiency is becoming more important
• Rebuilding the organization
Weaknesses
• Business controls were not in order, leading to
irregularities in Germany and Poland
• Margins are vulnerable for market overcapacity, like is the
case in the Benelux currently
• Highly project based work which could impact operating
margins if pre-calculations are incorrect
Threats
• Reputational risk
• Construction companies increasingly entering the
technical services market
• Availability of high skilled personnel
Main shareholders: Free float 86.5%; ING 5.1%; Bestinver 5.0%;
DNB 3.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: Last year’s rights issue has not taken away worries with investors. A new very
expensive financial rescue package was agreed with banks earlier this year, but this is also not enough. The
ICT division will be divested, which could fetch ~EUR 300m. We expect other measures like new
divestments and a new equity issue. This would be at the cost of valuation ratios. As Imtech is already not
cheap compared to competition, this does not improve the investment case. Of course there is recovery
potential in margins in the longer term, but we believe that these do not outweigh the short term risks. Hold.
t i t re
11
10
Target Price: EUR 1.90
9
8
7
6
IMTECH SMALL & MID CAPS SELECTION
Analyst(s)
5
4
3
2
1
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Edwin de Jong
+312 0 5508569
SNS Securities
[email protected]
105
Italy
SMALL & MID CAPS SELECTION
EUR 9.90
Hold
INDESIT
IND.MI/IND IM
Market capitalisation: EUR 1130m
Household Goods
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR11.26 / 5.28
12/12
2,886
243
8.4%
133
4.6%
62.3
62.3
172
256
0.4
1.1
8.0
7.0%
0.9
1.0
0.3
4.1
7.5
10.6
1.0
6.5%
3.5%
0.55
5.6%
5.57
0.20
55.5%
12/13
12/14e
12/15e
2,671
2,805
2,911
178
223
255
6.7%
8.0%
8.7%
68.1
114
146
2.5%
4.1%
5.0%
3.3
46.2
66.5
3.3
46.2
66.5
114
155
175
325
290
210
0.7
0.6
0.4
1.8
1.3
0.8
3.5
5.9
6.9
4.9%
7.1%
8.8%
0.6
0.9
1.1
1.6
1.6
1.5
0.6
0.6
0.6
9.5
7.7
6.5
24.8
15.1
11.3
nm
24.5
17.0
2.4
2.2
2.0
-1.2%
3.2%
7.1%
0.0%
0.0%
0.0%
0.03
0.40
0.58
-94.9%
nm
44.2%
4.07
4.48
5.08
0.00
0.00
0.00
13.8%
-1.2%
-5.5%
Avg. Daily nb traded shares:330,268
Main shareholders: Merloni Family 60.5%; Free float 40.5%;
Profile: Indesit is the third largest white goods producer in Europe with around 15.5% market share.
This compares with 16.6% and 16.2% for Bosch-Siemens and Electrolux respectively. Today Indesit is
market leader in Italy, Russia and the UK with market shares in the 30% region. This is also the result of the
acquisition of Stinol (CSI) in 2000 and GDA (Hotpoint - UK) in 2002. Indesit’s profitability has been achieved
by creating a common manufacturing platform for each of the product line (washing machines, dishwashers
and fridges) and through a focused marketing approach based on only two European brands: Hotpoint (builtin) and Indesit (free standing).
SWOT Analysis
Strengths
• Market leader in key markets like UK, Italy and Russia
with shares around 30%£pv£
• Very streamlined brand portfolio
Weaknesses
• Low market share in the built-in segment, the most
profitable segment: 15% vs. 30% of Bosch
• Very High product innovation
Opportunities
• Potential acquisitions to enter in new markets such as
Asia for example
• Demand recovery
Threats
• Persistent price pressure
• Weak consumer spending and low visibility
Recommendation: Indesit reported Q1 2014 sales at EUR 560.1m down -6.6% Y/Y vs. our forecasts of
EUR 565.4m. Q1 2014 volumes were down around 4.6%, price/mix was +1.7% (a touch higher than our
estimates). Overall Q1 2014 demand in Greater Europe was up 1.9% (in Q4 2013 down -1.2%).
Q1 2014 EBITDA reached EUR 38.8 m (-6.1% Y/Y) and was better than our forecast: with implied Q1 2014
EBITDA margin at 6.9% (flat vs. Q1 2013). Q1 2014 EBIT was of EUR 13.5m (-3.0% Y/Y) vs. our estimates
of EUR 11.2m: Q1 2014 EBIT margin was at 2.4% some 40bps above our estimates, and 10bps higher than
Q1 2013.
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
12
11
30/07/14 Results
2014H1
30/07/14 Results
2014H1
10
9
8
Q1 2014 numbers were decent considering the tough scenario and fx in Eastern Europe. Given the recent
newsflow on Indesit implying increasing uncertainty on the probability (and timing) of corporate actions, our
Target Price is of EUR 10.60 per share and it is based on a Fair Value of around EUR 8.80 per share (DCFbased) to which we apply now a 20% M&A premium for possible corporate actions.
7
Target Price: EUR 10.60
6
5
4
3
2
Mar 11
Source : Factset
106
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Claudio Giacomiello, CFA
Banca Akros
+39 02 4344 4269
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 31.02
Reduce
INTERPARFUMS
IPAR.PA/ITP FP
Market capitalisation: EUR 689m
Personal Goods
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR34.50 / 21.15
12/12
445
223
50.0%
213
47.8%
136
137
224
-208
-0.6
-0.9
nm
20.0%
2.1
1.3
0.6
1.1
1.2
3.1
1.2
44.9%
5.1%
6.79
nm
17.06
1.08
42.6%
12/13
350
58.3
16.7%
52.2
14.9%
34.8
34.8
-56.4
-222
-0.6
-3.8
nm
27.9%
2.9
3.9
1.4
8.1
9.1
19.9
2.0
5.4%
1.6%
1.57
-76.9%
16.00
0.49
-0.4%
12/14e
12/15e
301
332
45.1
49.5
14.9%
14.9%
38.1
42.5
12.6%
12.8%
27.1
30.0
27.1
30.0
37.8
36.9
-234
-251
-0.6
-0.6
-5.2
-5.1
nm
nm
19.2%
21.1%
2.0
2.2
3.5
3.3
1.5
1.3
10.1
8.9
12.0
10.3
25.4
22.9
1.9
1.8
3.5%
4.0%
1.3%
1.3%
1.22
1.35
-22.2%
10.8%
16.68
17.53
0.39
0.40
-3.1%
-4.0%
Avg. Daily nb traded shares:5,485
Main shareholders: Inter Parfums Holding 73.2% (84.4%); Free float 26.6% (15.6%); Treasury stock 0.2% (0.0%);
Profile: Interparfums designs, manufactures and distributes luxury fragrances, mainly under license (Mont
Blanc, Jimmy Choo, Lagerfeld, Repetto), and is a brand owner since 2007 (Lanvin). The company is
positioned on a competitive fragrance market and is undeniably a brand with a strong growth story despite
the recent loss of the Burberry license, with a flair for renewing its portfolio with long-standing brands and
generating outperformance. This lies in the quality of its teams headed by Philippe Bénacin, its operating
performance and long-term vision. The growth trajectory is set to continue in 2014 with the launch of a new
masculine fragrance by Montblanc and a duo by Lagerfeld. This is a Fabless business model as it is
economical in tangible investments, mainly investing in plastic moulds and display stands. The most
significant investments are intangible (upfront costs can reach EUR20m). Two concerns: the operating cycle
as this is long and costly in WCR, and the overall level of sales and marketing expenditure. A launch
requires up to 50% of annual sales being invested in S&M in the first few years. Launches in 2014 are set to
weigh on results and bring total advertising spend to more than 20% of the group’s sales.
SWOT Analysis
Strengths
• Asset light business model
• Dedicated pure player, expert of the Fragrance business
Weaknesses
• Small size vs largest retailers >> difficulties to impose
innovations
• Non-proprietary brands : the Burberry drama
• Well diversified portfolio of Licenses
• Not present in cosmetics
• Low exposure to Forex relatively to peers in the Luxury
business
Opportunities
• Obtain new licenses with low entry costs
Threats
• Mature and deflationary European market
• Emergence of a middle class in new territories
• Low culture of Fragrance in Asia
• Low entry barriers
• Over competition
• Prohibitions of certain components
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
35
Recommendation: Recent rally on the stock is excessive. Multiples are set to stretch significantly and cash
generation to go down. Despite the company’s fundamental quality, we opt for a Reduce recommendation.
Target Price: EUR 29.50
30
25
20
15
10
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
INTERPARFUMS SMALL & MID CAPS SELECTION
Analyst(s)
CM - CIC Securities
Arnaud Cadart
[email protected]
+33 1 45 96 77 41
Source : Factset
107
Italy
SMALL & MID CAPS SELECTION
EUR 9.79
Accumulate
INTERPUMP
ITPG.MI/IP IM
Market capitalisation: EUR 1066m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR11.23 / 6.39
12/12
527
106
20.1%
84.0
15.9%
52.3
52.3
75.0
74.5
0.2
0.7
13.2
10.1%
1.1
1.3
1.3
6.6
8.4
14.3
1.6
7.3%
2.9%
0.41
12.1%
3.59
0.17
47.1%
12/13
12/14e
12/15e
557
657
682
105
125
133
18.9%
19.0%
19.5%
79.3
96.1
104
14.3%
14.6%
15.3%
43.2
56.0
61.3
43.2
56.0
61.3
69.9
85.5
91.2
88.7
89.2
48.5
0.2
0.2
0.1
0.8
0.7
0.4
12.7
15.1
16.1
8.5%
9.5%
10.3%
1.2
1.3
1.4
1.7
1.8
1.7
1.9
1.8
1.6
9.8
9.3
8.4
13.0
12.0
10.7
26.0
22.5
20.6
2.2
2.3
2.1
3.3%
2.0%
5.5%
1.8%
1.9%
2.0%
0.34
0.43
0.48
-17.3%
29.6%
9.5%
3.92
4.25
4.63
0.18
0.19
0.20
17.5%
-1.6%
-5.4%
Avg. Daily nb traded shares:697,802
Main shareholders: Free Float 63.3%; IPG Holding 26.3%; Harris Associates LP 10.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
11
10
22/05/14 Dividend Payment
2013
19/05/14 Ex Dividend Date
2013
9
8
7
Profile: Interpump Group (IPG) operates in the mechanical component industry. It is present in two different
niches:  Water jetting sector (51.1% of total sales and 65% of the group’s EBITDA) - the group is the world
leader with 50% market share; this division realizes high and very high-pressure pumps and pumping
systems that are used in a wide range of industrial sectors for the conveyance of fluids.  Hydraulic sector
(48.9% of total sales and 35% of the group’s EBITDA) - in this segment IPG is the world leader with more
than 50% market share in the power take-offs (devices designed to transmit the engine power of an
industrial vehicle to other hydraulic components, and are installed on the vehicles' gearbox) and one of the
top producers of the hydraulic cylinders.
SWOT Analysis
Strengths
• Market leader in niche sectors
Weaknesses
• Few target companies to acquire
• Strong geographic differentiation
• Potential acquisitions realized at an unfair value (with
dilution effects on EPS)
• High entry barriers to defend the high profitability
Opportunities
• External growth through acquisitions in hydraulic sector
• Strong growth opportunities in the emerging markets
(China, India and Brazil) and in new applications in the
water jetting sector
Threats
• A macroeconomic downturn in the developed markets in
general affects the company's overall business
• USD exposure
Q1 14 results - good improvement in profitability: Q1 14 results confirmed positive sales and profitability
trend started in H2 13. Q1 14 sales up by 21.1% at EUR 160.2m and Q1 14 EBITDA grew by 25.9%. the
larger order portfolio in the Water Jetting Sector at 31 March 2014 offset the decrease in sales in the first
quarter of 2014 (+15%), whereas order portfolio in the Hydraulic Sector increased by 30% on a like-for-like
basis and with unchanged exchange rate. Therefore, the current visibility and the good sales performance
recorded in April allowed the management to confirm FY 14 guidance announced in February: FY 14 sales
guidance of EUR 660m (+/- 10m), FY 14 EBITDA at EUR 126m (+/- 4m) and FY 14 NFP at EUR 100m (+/10m).
Growth strategy: two divisions with different growth speeds: the continuous and constant organic growth of
the Water Jetting division, which is characterised by very high margins (EBITDA margin around 24-25%),
means the group can sustain the opportunities of external growth in the Hydraulic sector, in which the
current strong re-organisation plan should allow Interpump to return to the historical profitability shortly
(EBITDA margin around 20% vs current 17%).
Recommendation: we maintain our positive stance on the stock and, consequently, we confirm our
Accumulate recommendation and target price of EUR 11.80 per share (WACC 7.35% and 2.0% perpetual
growth rate).
Target Price: EUR 11.80
6
5
4
3
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
INTERPUMP SMALL & MID CAPS SELECTION
Analyst(s)
Paola Saglietti
108
+39 02 4344 4287
Banca Akros
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 22.32
Hold
INTERVEST OFFICES & WAREHOUSES
PRIF.BR/INTO BB
Market capitalisation: EUR 328m
Real Estate
EUR
12/12
41
36
85.0%
(15)
(14)
7
24
24.10
300
581
585
1.71
1.76
19.34
4.0%
19.73
8.5%
8.7%
16.2
12
3.2
300
50.4%
15.6%
Gross Rental Income (m)
EBITDA (m)
EBITDA margin
Portfolio Result (m)
Net Financial Result
Net Profit (reported)(m)
Net Profit (adj.)(m)
Funds From Operations
Net Debt (m)
Portfolio Value (m)
Enterprise Value (m)
EPS (adj.)
DPS
IFRS NAVPS
Premium/(discount)
EPRA NAVPS
Earnings adj. yield
Dividend yield
EV/EBITDA
P/E (adj.)
Int. cover(EBITDA/Fin.int)
Net debt/(cash) (m)
Net Debt/Total Assets
12/13
40
36
86.9%
8
(9)
35
25
25.00
282
581
563
1.74
1.53
19.86
(1.9%)
20.20
7.8%
6.9%
15.8
11
3.2
282
47.9%
14.1%
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR22.99 / 17.60
Main shareholders: Nieuwe Steen Investments Group 54.0%; Free float 46.0%;
12/14e
12/15e
39
39
35
35
86.4%
86.3%
(3)
(3)
(11)
(10)
20
22
23
24
23.27
24.47
280
274
576
571
608
602
1.60
1.67
1.40
1.46
19.40
19.49
15.1%
14.5%
19.39
19.49
7.2%
7.5%
6.3%
6.6%
17.6
17.4
14
13
3.1
3.4
280
274
46.7%
47.4%
8.5%
0.5%
Avg. Daily nb traded shares:3,709
Profile: Offices & Warehouses (IO&W) has a real estate portfolio with a fair value of EUR 579.2m,
representing a GLA of 596,714 sqm and consisting for 58% of offices and for 42% of logistics real estate. Its
16 office buildings are located in the periphery of Brussels (38%), on the axis Brussels-Antwerp A1/E19
(50%) and in Antwerp (12%). Its 21 logistics sites are located on the axes Antwerp-Malines A1/E19 - A12
(44%) and Antwerp-Liege A13/E313 – E34 – E314 (48%), and in the periphery of Brussels (8%). The
portfolio had a high gross yield of 7.3% and, when fully let, 8.5% at 31 December 2013. The spot occupancy
rate at 31 March 2014 stood at 85%. IO&W is listed on NYSE Euronext Brussels (under its legal name
Intervest Offices) and is included in the EPRA index. Nieuwe Steen Investments is the reference
shareholder with a 54% stake.
SWOT Analysis
Strengths
• High gross portfolio yield of 7.3% (excl. Vacancy)
Weaknesses
• Portfolio vacancy of 15%
• 38% share in Belgian logistics, which has an excellent
location, high yield, low maintenance costs and high ratio
•land/buildings
Office portfolio vacancy in Brussels periphery at 11% vs
market at 18%
• Facility management with turn-key interior design
projects offers competitive advantages in the office
Opportunities
segment
• Improving occupancy + attracting tenants through facility
management
• Expanding the portfolio share of logistics
• Some tenant concentration with important renewals
coming up
• Relative high cyclical sensitivity
• Reconversion offices into residential / other
• Decreasing occupier demand offices (mobility)
• Low free float & liquidity, but active OTC market
Threats
• Important lease contracts with top tenants expiring in
2015/2016
• Deterioration of Brussels' office market
• Lifecycle of offices - a hike in interest rates
All share prices at 19/05/14.
Recommendation: In the past months, Intervest Offices & Warehouses’ share performed very strong with a
year-to-date share price performance of 16.0% and a total return (including the EUR 1.53 dividend) of
23.8%. In the same period, the LT interest rates declined by c. 40bps whereas the market risk premium also
declined by c. 50bps. The fair value (DCF) of IO&W currently stands at EUR 24.2 per share.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
24
02/06/14 Dividend Payment
23
22
2013
1Q14 net current profit declined by 6.1% to EUR 5.9m which is consistent with our full year investment
scenario where we expect the net current profit to decline by 4.1%. The fair value (DCF) of IO&W currently
stands at EUR 24.2 per share.
21
Target Price: EUR 24.00
20
19
18
17
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Dirk Peeters
Bank Degroof
+32 2 287 97 16
[email protected]
109
Greece
SMALL & MID CAPS SELECTION
EUR 1.85
Accumulate
INTRALOT
INLr.AT/INLOT GA
Market capitalisation: EUR 294m
Hotels, Travel & Tourism
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.47 / 1.31
12/12
1,374
178
12.9%
80.0
5.8%
6.1
16.5
139
386
1.0
2.2
8.5
9.0%
0.9
1.5
0.7
5.7
12.7
18.4
1.0
3.3%
0.1%
0.10
-30.1%
1.91
0.00
-20.9%
12/13
12/14e
12/15e
1,539
1,621
1,679
195
203
215
12.7%
12.5%
12.8%
100
118
136
6.5%
7.3%
8.1%
-4.6
11.6
22.2
-4.6
11.6
22.2
109
129
142
405
373
339
1.2
0.9
0.7
2.1
1.8
1.6
6.0
4.4
5.0
12.0%
13.4%
15.3%
1.3
1.3
1.5
1.7
1.5
1.4
0.7
0.6
0.6
5.5
4.9
4.5
10.6
8.5
7.1
nm
25.3
13.3
1.1
0.9
0.8
7.9%
15.6%
18.9%
0.0%
0.4%
0.8%
-0.03
0.07
0.14
-chg
+chg
90.9%
1.68
2.17
2.44
0.00
0.01
0.01
-1.1%
-13.1%
-14.0%
Avg. Daily nb traded shares:344,972
Main shareholders: Free float 71.0%; Kokkalis S. 20.0%; Dimitriadis K 9.0%;
All share prices at 19/05/14.
Profile: Intralot is the leading supplier of integrated gaming systems and services with active presence in
more than 30 countries. During 2006-2011, Intralot has developed a balanced portfolio of operations which
includes assets in developed markets as well as ‘greenfield’ projects in emerging markets with great upside
potential. In the last two years, the management has decided to change its strategy from pure growth
through the acquisition of new contracts to investing in jurisdictions already being present, also focusing on
the new investment opportunities arisen in the home country.
SWOT Analysis
Strengths
• Strong position in the global gaming industry
Weaknesses
• Weak cash flow generation
• Balanced portfolio of operations with presence in
developed and emerging markets
• Well-protected from Greece's economic downturn
• Exposure to currency and regulatory risks
Opportunities
• New games in Greece (VLTs, licensing of online games)
£cr£
• Further international expansion as the global gaming
market expands
• Unattractive gearing ratios
• International expansion has slowed-down currently on
the back of scarce resources
Threats
• Emerging or developing market status in the countries
that Intralot is expanding
• Termination or renegotiation of the contracts with OPAP
• Lower margins of existing contracts due to increased
competition
• Failure to renew existing contracts
Recommendation: We have set our target price at EUR 2.50/share assigning a ‘Accumulate’ rating on the
stock. On our estimates, the stock trades 25x its FY14 net profits and 13x its FY15 net profits, at a premium
over its closest peer GTech. In relation to EV/EBITDA, Intralot trades at a discount of 14% compared to
GTech. Positive developments in relation to the business opportunities in Greece that can improve the midterm outlook for the group, as well as the continuation of the positive earnings performance of foreign
operations in the coming quarters, will support a better valuation going forward.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
2.4
Target Price: EUR 2.50
2.2
2.0
1.8
INTRALOT SMALL & MID CAPS SELECTION
Analyst(s)
1.6
1.4
1.2
1.0
0.8
0.6
Mar 11
Source : Factset
110
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Dimitris Birbos
+30 210 81 73 392
Investment Bank of Greece
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 1.06
Buy
IREN
IREE.MI/IRE IM
Market capitalisation: EUR 1259m
Utilities
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR1.34 / .77
12/12
4,328
630
14.5%
341
7.9%
153
153
451
2,555
1.3
4.1
6.1
7.7%
1.0
0.8
0.8
5.8
10.8
3.6
0.9
-0.2%
11.3%
0.13
32.2%
0.51
0.05
21.7%
12/13
12/14e
12/15e
3,448
3,433
3,453
646
659
679
18.7%
19.2%
19.7%
313
333
352
9.1%
9.7%
10.2%
80.6
120
126
80.6
120
126
425
458
466
2,525
2,330
2,263
1.3
1.1
1.1
3.9
3.5
3.3
7.2
5.8
5.6
6.5%
7.1%
7.5%
0.8
0.9
0.9
0.9
0.8
0.8
1.2
1.1
1.1
6.4
5.9
5.6
13.2
11.7
10.9
16.3
10.5
10.0
2.5
4.5
8.6
11.3%
14.1%
18.3%
4.9%
5.3%
5.6%
0.07
0.10
0.11
-47.2%
49.2%
5.2%
0.45
0.24
0.12
0.05
0.06
0.06
-1.4%
-11.3%
-15.5%
Avg. Daily nb traded shares:3,398,687
Main shareholders: Finanziaria Sviluppo Utilities (FSU) 33.3%; Free Float 32.4%; Reggio Emilia Council 7.8%;
Parma Council 6.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
1.4
1.2
1.0
0.8
0.6
Profile: IREN was set up on 1st July 2010 through the merger of Enia and Iride. IREN operates in the
following sectors: electricity, gas, district heating, integrated water service and environment, and it also
provides other public utility services (telecommunications, public lighting, traffic light services, facility
management). A diversified business model characterized by a good balance of profits between free
activities (39%) and regulated activities (61%), which guarantees solidity, development prospects and
reduced risk levels.
SWOT Analysis
Strengths
• Solid position in the north-west of Italy
Weaknesses
• Small and young know-how in waste segment
• High degree of vertical integration
• Sound future growth (mainly in the upstream)
• Historically disappointing on execution-timing of projects
(e.g. OLT and Torino Nord)
• Strict decision-making processes
• LNG presence with the construction of the third Italian
LNG terminal
Opportunities
• The start-up of plants/projects should boost margins in
the coming years
• The progressive liberalisation of the electricity market in
Italy
• Chance to consolidate small local entities in the Piedmont
and Liguria area
• Gioia Tauro LNG terminal
• Uncertainty on the water business, after the referenda
results
Threats
• Execution risk or delay in the realisation of current
projects£pv£
• A sharp increase in interest rates, which could reduce the
appeal of the whole utilities sector
• Reductions in electricity prices, particularly in the green
certificate tariff, which would reduce expected returns on
projects
•new
Changes
in the regulatory framework
Recommendation: Iren has recently confirmed its strategic objectives included in the 2012-2015 business
plan. The key pillars are: growth in the core business areas and in the reference territories; opportunistic
external growth approach; asset disposals e debt reduction; low capex and operative efficiencies. The
growth expected is mainly coming from the entry in operation of the main projects: PAI (WTE Parma), Turin
North (co-generation plant); from the consolidation of Turbigo and Tusciano plants (ex Edipower) and from
the benefits related to the OLT LNG terminal (cheap gas). EBITDA. Iren points to an EBITDA target of EUR
670m in 2015 (it was roughly EUR 650m in 2013), with a CAGR of nearly 3%. The EBITDA breakdown
remains almost unchanged in terms of regulated (57%) and not regulated activities (43%). Main keys by
division. Generation and district heating: completion of Turin North, saturation of DH networks in Turin and
Parma; generation plant optimisation; integration of Turbigo and Tusciano plants; market: consolidation and
increase in customer base, taking advantage of the present flexible short/long term conditions; networks:
exploitation of the full benefits of the OLT LNG terminal, bid for tenders in reference areas; water:
consolidation and development in reference areas by taking into account the new regulatory framework;
waste: completion of Parma WTE, new financial partnership with F2I, new TMB (biological treatment) plant
construction in Reggio Emilia.
Target Price: EUR 1.50
0.4
0.2
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Dario Michi
Banca Akros
+39 02 4344 4237
[email protected]
111
Italy
SMALL & MID CAPS SELECTION
EUR 7.40
Hold
ITALCEMENTI
ITAI.MI/IT IM
Market capitalisation: EUR 1640m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR9.73 / 4.88
12/12
4,480
615
13.7%
-151
nm
-396
-396
403
1,998
0.5
3.2
7.3
12/13
4,235
618
14.6%
159
3.8%
-165
-165
370
1,939
0.5
3.1
5.0
0.6
0.9
6.5
nm
nm
0.4
-6.0%
1.4%
-1.40
-chg
10.50
0.06
42.4%
12/14e
4,440
689
15.5%
234
5.3%
24.1
24.1
565
1,986
0.5
2.9
8.0
12/15e
4,687
819
17.5%
359
7.7%
102
102
659
1,922
0.5
2.3
10.1
0.7
0.8
0.8
1.0
1.1
1.0
6.9
7.0
5.8
26.9
20.6
13.3
nm
nm
17.8
0.7
0.7
0.7
0.7%
7.0%
10.7%
0.8%
2.1%
2.5%
-0.58
0.10
0.42
+chg
+chg
nm
9.22
10.63
10.89
0.06
0.16
0.19
16.9%
-7.3%
-17.4%
Avg. Daily nb traded shares:183,005
Profile: Italcementi is one of the main European cement maker operating in over 20 countries. In 2013 the
group is recorded around 65% of its revenues and 40% of its EBITDA in mature countries (essentially
Western Europe and the USA), with the remainder being booked in developing countries such as Egypt,
Morocco and India.
“150 project”- the company announced a major reorganisation process at the beginning of March; the
reorganisation includes:
Bid on Ciments Francais – the company will launch a public tender offer on Ciments Francais minorities
at a price of EUR 78/sh (cum dividend). The offer is aimed at delisting Ciments Francais. The offer is
expected to be completed at the beginning of July.
Conversion of ITC sav – the company approved a mandatory conversion of Italcementi saving shares
based on a conversion ratio of EUR 0.65 ordinary shares for each saving shares.
EUR 450m capital increase – the company announced a EUR 450m. This sum is basically equal to the
cost of the bid on Ciments Francais
2014 outlook –the company said it expected the on-going rationalization of overheads and structural
costs should generate a small improvement in EBIT compared with 2013.
Lafarge/Holcim merger effects - the management said that the company was not going to invest
sizeably in the potential disposal plan of the two companies
SWOT Analysis
Strengths
• Good geographic diversification
• Strong presence in developing countries
Weaknesses
• Mature countries' cement consumption still weak
(particularly in Italy)
• Italian market still fragmented
Opportunities
• A recovery in volumes in Italy in 2014
Threats
• The Italian market could take much time to recover
• Recovery in the Egyptian market
• The Egyptian market could be negatively affected by the
uncertain political situation
Main shareholders: Italmobiliare 60.3%; Free float 37.5%; First eagle 2.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
10
30/07/14 Results
9
8
7
6
2014H1
05/06/14 Dividend Payment
2013
05/06/14 Dividend Payment
2013
02/06/14 Ex Dividend Date
2013
02/06/14 Ex Dividend Date
2013
5
4
3
Mar 11
Source : Factset
112
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Recommendation: we do not believe a sizeable improvement in the Italian market could be achieved
before 2015 since volumes are still down y/y in the first months of 2014. We confirm our rating and target
on the stock.
Target Price: EUR 8.80
ITALCEMENTI SMALL & MID CAPS SELECTION
Analyst(s)
Francesco Sala
+39 02 4344 4240
Banca Akros
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 12.39
Buy
JENOPTIK
JENG.DE/JEN GR
Market capitalisation: EUR 709m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR13.84 / 8.82
12/12
585
77.7
13.3%
54.8
9.4%
50.2
50.2
75.6
73.8
0.2
1.0
8.9
13.4%
1.8
1.1
0.8
6.3
8.9
9.3
1.3
7.0%
2.4%
0.80
36.2%
5.77
0.18
35.8%
12/13
12/14e
12/15e
600
651
713
74.8
83.5
95.0
12.5%
12.8%
13.3%
52.7
61.8
72.5
8.8%
9.5%
10.2%
47.2
49.5
59.6
47.2
49.5
59.6
49.5
71.2
82.0
43.3
44.7
31.1
0.1
0.1
0.1
0.6
0.5
0.3
13.6
14.8
19.7
11.9%
11.2%
12.2%
1.6
1.5
1.6
1.7
1.5
1.4
1.2
1.1
1.0
9.9
8.9
7.7
14.0
12.0
10.1
15.9
14.3
11.9
1.9
1.8
1.6
4.5%
1.4%
3.6%
1.6%
1.7%
1.9%
0.78
0.86
1.04
-2.6%
11.5%
20.4%
6.41
7.07
7.91
0.20
0.20
0.23
-2.6%
-1.7%
4.8%
Avg. Daily nb traded shares:76,092
Profile: Jenoptik AG is engaged in the manufacture of laser solutions, optical systems. It operates three
segments. The Lasers & Optical Systems segment comprises the activities relating to high power diode
lasers, laser systems and laser machines and optical systems, high-precision optics and opto-mechanical
systems based on glass or polymers in which the company holds leading positions. The Metrology segment
focuses in technologies for measuring forms, dimensions, surfaces, speeds and distances. The Defense and
Civil Systems segment focuses on the areas of military and civil vehicle, rail and aircraft equipment, drive
and stabilization technology as well as energy systems.
SWOT Analysis
Strengths
• Market leading player in high-end niche markets
Weaknesses
• Defence business with relatively low margins
• Strong R&D network
• Solid equity ratio
• High complexity of the comapny, large number of
products
• More than 60% of revenues still in Europe
• Massive tax loss carry forwards
• Significant working capital ratio above 30%
Opportunities
• Structural growth of the Photonics market
Threats
• Cyclicality of the semit and industrial sectors
• Strengthening of international distribution
• Defence project delays
• Offering of systems comes more into focus
• Technolog adoption, timing and change risks
• Improvements of after-market revenues
• R&D costs may rise structurally over time
Main shareholders: 0 0.0%; Free float 75.0%; ECE 14.0%;
bm-t 11.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: We have recently initiated the coverage of Jenoptik AG with a ‘Buy’ rating and a PT of
EUR 15 based on a blend of Sum-of-the-parts and DCF valuation. Jenoptik holds leading positions in
attractive high-tech niche markets and should benefit largely from underlying megatrends in the Photonics
industry in which the company generates 70% of revenues, we reckon. A strong balance sheet and good
chances for over-proportionate earnings growth should render the investment attractive.
titre
15
14
13
12
11
13/06/14 Ex Dividend Date
2013
13/06/14 Dividend Payment
2013
Target Price: EUR 15.00
10
9
8
7
6
5
4
Mrz 11
Source : Factset
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
JENOPTIK SMALL & MID CAPS SELECTION
Analyst(s)
Adrian Pehl, CFA
+49 69 58997 438
Equinet Bank
[email protected]
113
Germany
SMALL & MID CAPS SELECTION
EUR 12.80
Buy
Joyou Ag
JY8G DE/JY8 GR
Market capitalisation: EUR 307m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR15.20 / 10.06
12/12
330
49.8
15.1%
45.3
13.7%
38.5
39.7
33.1
3.8
0.0
0.1
39.1
11.2%
1.2
0.7
0.7
4.5
5.0
5.6
0.7
-5.4%
0.0%
1.66
3.0%
14.23
0.00
8.1%
12/13
358
57.0
15.9%
50.8
14.2%
39.7
33.2
32.4
0.8
0.0
0.0
5.0
11.7%
1.2
0.9
0.9
5.4
6.1
9.2
0.9
2.8%
0.0%
1.39
-16.2%
15.03
0.00
-6.4%
12/14e
12/15e
386
417
61.8
67.0
16.0%
16.0%
53.2
57.3
13.8%
13.7%
24.0
36.5
36.5
40.7
46.4
51.8
22.8
18.1
0.1
0.0
0.4
0.3
7.4
8.4
10.4%
10.2%
1.1
1.1
0.9
0.8
0.9
0.8
5.3
4.9
6.2
5.7
8.4
7.5
0.8
0.7
-7.2%
1.6%
0.0%
2.0%
1.52
1.70
9.8%
11.4%
16.55
18.25
0.00
0.25
-6.8%
2.2%
Avg. Daily nb traded shares:0,750
Main shareholders: Grohe (Lixil) 72.3%; Free float 27.7%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Joyou is a Chinese small cap listed in the Prime Standard of the German Frankfurt stock exchange.
Its operations and headquarter are based in China. Counting c. 3,400 employees the company achieved
EUR 358m in sales in 2013, thereof EUR 298m from China and EUR 32m from international markets. Joyou
designs, produces and sells faucets and other sanitary ware products. The main product groups sold are
own brand bathroom faucets (36% of group sales in FY 2013), shower products (18%), kitchen products
(12%), ceramic and bathtubs (11%), and more commodity like other faucets, sanitary hardware and semifinished products (11% of sales).
SWOT Analysis
Strengths
• Strong market position in China with largest retail store
network (>4200 stores) for bathroom solution products
• Solid balance sheet with c. 70% equity ratio and almost
zero net financial debt
• Modern, low cost production sites in China
Weaknesses
• Freefloat Mcap at only EUR 85m. Low liquidity of the
shares.
• China Country Risk (despite the company now having a
Japanese majority shareholder)
• FCF should remain negative FCF as Joyou should continue
to investment into growth. No dividend
Opportunities
• High-single digit market growth driven by urbanization,
income and household growth in China
• Growth in international market supported by the strategic
cooperation with majority shareholder (>72%) Grohe/Lixil
• Special situation – Potential takeover offer by Majority
shareholder Lixil (>72%)
Threats
• Lixil may not file a profit transfer and domination
agreement
• Share price discount for foreign listed Chinese small caps
may remain high or even increase
• Concerns over potential Chinese real estate bubble
Recommendation: We rate Joyou ‘Buy’ with a target price of EUR 21.9. On November 6, Lixil (>72%
shareholder) published a voluntary takeover offer for Joyou at EUR 12.16 per share. Management rejected
the offer as it was too low. Whereas downside should be very limited by the strategic buyer Lixil and the
sound underlying fundamentals (we derive a standalone DCF based value of EUR 18 per share), we see a
good chance for offer / compensation to minority shareholders at a substantial premium to the current share
price. 1/ Industry logic of the Grohe acquisition also applies to Joyou, 2/ Lixil paid 11.8x EV/EBITDA for
Grohe implying EUR 27.9 per share for Joyou, 3/ Just months before Lixil acquired Grohe, Joyou
management transferred its 36.5% stake in Joyou for 12.5% in Grohe implying EUR 25.9 per share.
titre
16
15/08/14 Results
15
Target Price: EUR 21.90
2014Q2
14
18/06/14 AGM
13
12
10
9
8
7
Mrz 11
Source : Factset
114
2013
Analyst(s)
Konrad Lieder
11
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Equinet Bank
+49 69 5899 7436
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 24.33
Reduce
KBC ANCORA
KBCA.BR/KBCA BB
Market capitalisation: EUR 1905m
Financial Services
PROFIT & LOSS (EURm)
Revenues
Non Recurrent Items
Net Profit (reported)
BALANCE SHEET (EURm)
Shareholders Equity
Minorities equity
Net Debt
NAV Constituents & Total NAV (EURm)
KBC
Other assets
Net cash/(debt) position
Total Net Asset Value
Discount/(Premium) to NAV
Listed shareholdings on NAV
OTHER ITEMS (EURm)
Total Market Cap
Debt / Equity
Payout Ratio
P/BV
Dividend Yield (Gross)
PER SHARE DATA (EUR)
EPS (reported)
NAVPS
BVPS
DPS
2012
0.8
0.0
-30.4
2013
82.2
0.0
50.8
2014e
15.8
35.9
25.0
2015e
155.0
0.0
137.9
1,961.8
0.0
-623.9
2,012.6
0.0
-573.1
2,037.6
0.0
-390.0
2,175.5
0.0
-390.0
1,370.1
0.0
-623.9
746.3
28.1%
183.6%
2,351.8
0.0
-573.1
1,778.7
34.0%
132.2%
3,399.9
0.0
-390.0
3,009.9
26.7%
113.0%
3,399.9
0.0
-390.0
3,009.9
26.7%
113.0%
536.4
-31.8%
0.0%
0.3
0.0%
1,174.5
-28.5%
0.0%
0.6
0.0%
1,905.1
-19.1%
0.0%
0.9
0.0%
1,905.1
-17.9%
0.0%
0.9
0.0%
-0.389
9.531
25.054
0.000
0.649
22.716
25.703
0.000
0.319
38.440
26.022
0.000
1.761
38.440
27.783
0.000
Profile: KBC Ancora (KBCA) is a single asset holding company which invests in the KBC Group. In FY06/07
and FY07/08 leverage was added to acquire additional KBC shares. KBCA is the result of a long litigation
between Cera (former owner of Cera Bank and ABB Insurance, that merged with Kredietbank to form KBC)
and its cooperative shareholders. Since the merger of the former KBC with its parent mono holding company
Almanij, KBC Ancora’s sole significant asset is a stake in KBC. KBCA currently holds 77,516,380 KBC
shares (or 0.99 KBC per KBCA share) and a net debt of c. EUR 394m (EUR 5.08 per KBCA share).
SWOT Analysis
Strengths
• Attractive bancassurance model (cross-selling and
improved efficiency)
• Well capitalised with FY13 pro-forma fully loaded B3
common equity ratio of 12.5%
• Strong FY13 Net Stable Funding Ratio at 111% and
Liquidity Coverage Ratio at 131%
• Strong market positions in Belgium and Czech R.
Weaknesses
• Single asset company invested in KBC
Opportunities
• Very well run and profitable underlying operations in
Belgium
• Operating leverage improvements in both Belgium and
Czech Republic
• Losses on legacy assets (CDO, ABS) may prove lower than
anticipated
Threats
• Further negative impact from lower stock markets and
increased provisions
• Highly competitive domestic Belgian market for some
products (E.g. Mortgages)
• Further losses on CDOs and ABSs
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
35
30
25
20
15
10
5
0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
• Exposure to Ireland (real estate)
• Higher capital requirements & regulation
Source: Company, Bank Degroof estimates
Source : Factset
• International markets expected to be loss making until
end 2015
• Exposed to Hungary
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Recommendation: The NAV is calculated as 0.99 times the share price of KBC minus net debt of EUR 5.08
per share. Based on KBC’s closing price (EUR 44.96) at May 14, 2014 KBC Ancora’s NAV stood at
EUR 39.42 per share. With KBC Ancora’s closing price at EUR 26.34, this implies a 33.2% discount to NAV.
Lack of any dividend payment by KBC in FY13, KBC Ancora expected to realize c. EUR 10m interest
charges in 2H13/14E and operating costs in line with last year. This should leave a full year net profit
forecast of c. EUR 25m. KBC Ancora will not pay a dividend for the current accounting year. No change to
guidance was made in the 3Q13/14 trading update.
With a target NAV of EUR 22.9 (based on KBC target price of EUR 36) and an applied target discount to
NAV of 25% (lowered from 1 year average of 31% to reflect the lower net debt) our target price of EUR 23 is
maintained as well as our Reduce recommendation.
Target Price: EUR 23.00
KBC ANCORA SMALL & MID CAPS SELECTION
Analyst(s)
Dirk Peeters
+32 2 287 97 16
Bank Degroof
[email protected]
115
Netherlands
SMALL & MID CAPS SELECTION
EUR 25.36
Buy
KENDRION
SVEL.AS/KENDR NA
Market capitalisation: EUR 329m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR25.79 / 19.70
12/12
285
32.4
11.4%
19.7
6.9%
17.9
16.2
19.9
21.3
0.2
0.7
6.6
8.8%
1.0
1.2
0.7
6.4
10.5
11.4
1.8
2.5%
3.6%
1.41
-19.6%
8.79
0.58
25.2%
12/13
12/14e
12/15e
354
447
478
36.9
52.2
60.1
10.4%
11.7%
12.6%
20.9
32.7
40.0
5.9%
7.3%
8.4%
16.7
21.2
26.6
19.7
24.2
29.6
29.1
41.6
47.7
49.0
74.1
53.6
0.4
0.5
0.3
1.3
1.4
0.9
7.1
8.4
10.9
6.5%
10.5%
12.9%
0.7
1.1
1.5
1.7
1.6
1.0
0.9
0.8
9.7
7.7
6.4
17.1
12.3
9.6
15.1
13.6
11.1
2.3
2.3
2.0
4.3%
8.3%
9.2%
2.3%
2.9%
3.5%
1.58
1.86
2.28
12.4%
17.7%
22.6%
10.31
11.25
12.56
0.58
0.75
0.90
10.7%
5.7%
2.3%
Avg. Daily nb traded shares:10,209
Main shareholders: Free float 51.6%; Delta Lloyd 15.0%; Project Holland 6.8%;
Janivo 6.0%; Invesco 6.0%; T Rowe Price 5.0%; Menor 5.0%; Caldenborgh 5.0%; Darlin 4.7%;
All share prices at 19/05/14.
Profile: Kendrion develops, manufactures and markets electromagnetic systems and components, which
are used in lifts, door-locking systems, industrial robots, electrical switchbox systems, diesel engines, airconditioning installations and motor cooling systems. Automotive business represents c. 2/3 of the group,
Industrial 1/3. In a very local and highly fragmented market, Kendrion has a leading position in Europe
(Germany > 60% of revenues). Management targets organic sales growth of at least 10% annually and an
EBIT margin of more than 10%.
SWOT Analysis
Strengths
• Strong leading market positions in Europe
Weaknesses
• High exposure to German industry (machine building &
automotive)
• Relatively large clients (largest accounts for 9% of total
revenue)
• Global presence
• Strong R&D competences
• Deep relationship with customers
Opportunities
• Consolidator in a fragmented market
• High demand for solenoids driven by safety, comfort and
automation
• Further geographic expansion
Threats
• Backward integration of Original Equipment
Manufacturers
• Shortage of experienced engineers in Germany
Recommendation: Kendrion rides the global trend of electromagnetic switches and drives replacing
mechanical and hydraulic systems. We expect that Kendrion will continue to gain market share in the
growing market for electromagnetic components, by adding new applications and entering new market
segments. Supported by a cyclical recovery, trend exposure and operational excellence underpin a solid
appreciation of the stock over the medium term.
Target Price: EUR 27.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
28
26
24
Gert Steens
Johan van den Hooven
22
20
18
16
14
Mar 11
Source : Factset
116
KENDRION SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+312 0 5508639
+312 0 5508518
SNS Securities
[email protected]
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 138.90
Hold
KINEPOLIS
KIPO.BR/KIN BB
Market capitalisation: EUR 728m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR145.00 / 95.52
12/12
255
72.3
28.4%
51.7
20.3%
35.7
37.4
56.3
90.6
0.8
1.3
14.5
19.6%
2.4
2.7
2.1
7.5
10.6
12.5
4.2
10.3%
3.2%
6.55
18.5%
19.60
2.60
41.1%
12/13
246
75.1
30.5%
55.1
22.4%
37.5
37.4
57.6
88.5
0.8
1.2
14.9
20.5%
2.5
3.6
2.8
9.3
12.6
16.9
5.8
7.0%
2.3%
6.83
4.2%
19.81
3.19
28.4%
12/14e
12/15e
255
265
73.6
75.7
28.8%
28.5%
55.0
57.2
21.5%
21.6%
36.1
37.4
36.1
37.4
54.7
55.9
97.4
104
1.1
1.3
1.3
1.4
16.2
15.2
21.1%
22.4%
2.5
2.7
4.4
4.5
3.2
3.1
11.2
11.0
15.0
14.5
20.9
20.2
8.0
9.0
5.5%
5.5%
2.3%
2.4%
6.63
6.88
-2.8%
3.7%
17.31
15.44
3.17
3.29
17.1%
2.0%
Avg. Daily nb traded shares:1,993
Main shareholders: Free float 48.4%; Kinohold Bis & Joost Bert 45.5%; Treasury shares 5.4%;
Profile: The Kinepolis Group is Belgian market leader and a European reference player in the operation of
movie theatres and related activities. The company operates 23 cinema complexes with 317 screens across
5 European countries. 60% of revenue is generated in Belgium, 26% in France, 12% in Spain and 2% in
Poland and Switzerland. The most important revenue drivers for Kinepolis are ticket sales (55% of total
revenues), followed by in-theatre sales (22%), B2B (14%), which is screen advertisement, the organisation
of events and sale of vouchers, and finally the letting of commercial locations and restaurants in and around
the movie theatre (4%) and Brightfish. Kinepolis is the owner of more than 90% of the real estate property.
The group was born out of the merger of two family companies (Bert and Claeys) which began working
together in the early 1970s. The company has been listed on the Belgian stock market since 1998 and in
Sept. 2006 the family Claeys exited by placing its 23% participation in the market with institutional investors.
SWOT Analysis
Strengths
• Cinema is a non-cyclical business
Weaknesses
• Mature market environment
• Highest margins in the industry
• Dependence on movie offer and weather
• Quality theatres in good locations
• Structural declining visitor numbers
• Owns all of its complexes - Strong management
Opportunities
• Unlocking value from real estate portfolio
Threats
• Competition from home cinema and piracy
• Self-learning organisation
• 3D may lose some of its popularity
• Personalised direct marketing
• Exposure to weak Spanish market (+ impact Spanish VAT
increase)
• Active movie offering - B2B and alternative content
M. Joost Bert 0.8%;
All share prices at 19/05/14.
Recommendation: We expect Kinepolis to generate EUR 50m to EUR 60m of free cash flow per year in
2013-2016. This implies that Kinepolis is trading at an expected FCF yield of >9%.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
160
140
02/06/2014 Dividend Payment
2013
28/05/2014 Ex Dividend Date
2013
In 1Q14 Kinepolis welcomed 4.8m visitors, an increase of 11.2% compared to 1Q13. The rise was driven by
the good international and local film offer and by the mild winter weather. All revenue lines, except Brightfish,
were up whereas EBITDA and EBITDA per share improved. We do not exclude that a third share buy-back
will be announced shortly. Shares will split 5 to 1 effective July 1, 2014.
Target Price: EUR 130.00
120
100
80
Analyst(s)
60
40
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Dirk Peeters
Bank Degroof
+32 2 287 97 16
[email protected]
Source : Factset
117
France
SMALL & MID CAPS SELECTION
EUR 27.27
Hold
KORIAN-MEDICA
KORI.PA/KORI FP
Market capitalisation: EUR 2137m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR28.76 / 16.04
12/12
1,108
137
12.4%
92.3
8.3%
23.2
23.2
58.8
567
0.8
4.1
4.0
3.5%
0.6
0.7
1.0
8.0
11.8
19.5
0.7
17.4%
2.2%
0.68
2.8%
20.42
0.60
58.1%
12/13e
12/14e
12/15e
1,371
2,244
2,612
182
321
363
13.3%
14.3%
13.9%
121
219
258
8.8%
9.7%
9.9%
28.8
67.8
111
28.8
67.8
111
93.2
173
219
761
1,391
1,375
1.0
0.9
0.8
4.2
4.3
3.8
4.0
5.1
5.3
4.1%
4.0%
4.8%
0.6
0.6
0.8
0.9
1.2
1.1
1.1
1.6
1.4
8.5
11.3
9.9
12.8
16.6
13.9
24.3
31.5
19.3
1.0
1.4
1.3
3.6%
7.5%
5.3%
2.2%
2.2%
2.2%
0.85
0.87
1.41
24.2%
2.3%
63.5%
20.67
20.18
20.99
0.60
0.60
0.60
12.0%
5.2%
1.0%
Avg. Daily nb traded shares:52,400
Profile: Korian-Médica resulted from the merger of privately-held group Suren and listed company Medidep,
before the merger with Médica, in 2014. The group specialises in the provision of permanent assistance for
geriatric patients, and temporary assistance including follow-up and psychiatric assistance after surgery. It is
one of the two leading players in the permanent dependence segment in Europe and the temporary
dependence segment (with Générale de Santé), ahead of non-listed DVD. The group recently extended its
geographic footprint to include Italy (acquisition of Segesa) and Germany (acquisition of Phoenix, followed
by Curanumin in March 2013) where consolidation of the private commercial sector provides a major
opportunity given its level of fragmentation. There are also opportunities in the private not-for-profit sector
whose investment capacities are limited given the requirements to upgrade the equipment and bring it into
line with quality standards.
SWOT Analysis
Strengths
• Sharp increase in demand for care of the over 85-age
group in all European countries
• Limited offer in qualitative and quantitative terms
• Close contact with authorities which provide
authorisation to practise in Germany
Opportunities
• Capacity for sector consolidation in Germany
Weaknesses
• Merger Korian-Medica and synergies production
• High debt following the acquisitions in Italy and Germany
and merger Korian-M‚dica
• Slow improvement in margins over very short term ?
Threats
• Exposure to rumours of mistreatment
• Transfer of activity from private not-for-profit sector
towards private commercial sector
Main shareholders: Free float 40.3% (10.9%); Predica 20.4%; Batipart 16.0%;
Recommendation: The releveraging of Korian until mid-2013 gave the company enough cash to accelerate
its growth. This releveraging reduced Korian’s discount vs. Orpéa and Medica, which peaked in 2010.
COVEA 12.7%; Malakoff M‚d‚ric 6.4%; ACM Vie 4.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
30
16/07/14 Trading Update
28
26
24
22
2014Q2
The expected improvement in margins (quarter-on-quarter optimisation of occupancy rates and structural
costs) within a buoyant sector (insufficient capacity, doubling in the population of over 85s, excellent cash
position of senior citizens) are the main drivers behind the recent re-rating. We now estimate that upside
potential is not sufficient enough to support this positive stance. The new Korian-Médica has to provide the
market with some good news concerning synergies, cost-cutting and margin improvement in Germany to
push valuation multiples up, after the strong performance (x2.5) of the past 2 years. Hold.
20
Target Price: EUR 26.00
18
16
14
12
10
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
KORIAN-MEDICA SMALL & MID CAPS SELECTION
Analyst(s)
Christian Auzanneau
118
+33 4 78 92 01 85
CM - CIC Securities
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 9.87
Hold
LABORATORIOS ROVI
ROVI.MC/ROVI SM
Market capitalisation: EUR 494m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR10.05 / 6.62
12/12
203
27.0
13.3%
21.7
10.7%
19.5
19.5
24.8
-7.3
-0.1
-0.3
32.2
17.0%
1.8
1.7
1.1
8.3
10.3
13.6
2.1
3.3%
2.6%
0.39
8.4%
2.53
0.14
47.3%
12/13
12/14e
12/15e
219
240
264
32.4
34.7
41.3
14.8%
14.5%
15.6%
25.5
25.2
31.3
11.6%
10.5%
11.9%
23.0
22.9
28.9
23.0
22.9
28.9
30.0
32.4
38.8
-11.0
-10.2
-24.3
-0.1
-0.1
-0.1
-0.3
-0.3
-0.6
27.5
30.8
54.6
17.5%
16.1%
19.5%
2.1
1.9
2.3
3.2
2.9
2.8
2.1
1.9
1.7
14.3
13.2
10.8
18.2
18.2
14.2
21.7
21.6
17.1
3.5
3.1
2.7
1.0%
2.5%
4.9%
1.6%
1.6%
2.1%
0.46
0.46
0.58
18.0%
-0.7%
26.3%
2.89
3.18
3.59
0.16
0.16
0.20
5.4%
3.2%
3.1%
Avg. Daily nb traded shares:19,096
Main shareholders: Founding Family 66.8%; Free float 20.0%; Bestinver 5.1%;
Iondumenta Puery 5.0%; Norges Bank 3.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Rovi is an integrated and specialised pharmaceutical laboratory engaging in research, development,
manufacturing, and marketing of small molecules and biological medical specialties and contrast agents,
also providing services such as manufacturing (filling) of injectables for other companies in the sector. The
laboratory’s long track record and its prestigious reputation position it as a strategic partner in domestic
grounds for international pharmaceuticals. The strategic agreement signed with MSD (2010) has been
essential in accelerating the operating leverage process in the main divisions. MSD’s agreement has
enabled to intensify the expansion of Rovi’s specialised pharmaceuticals division, through the incorporation
of new products to its portfolio, as well as the toll-manufacturing business line (CAGR’13-18e 8.3% and 4%
respectively), enhancing the improvement of operating margins (+20bp.in 2015e), while aiming to reduce its
dependence from its biological drug bemiparine, indicated for the treatment of venous thrombocytopenia in
medical and surgical patients (30% of Group revenues in 2013). The laboratory counts with a high patent
protected portfolio (75% of the specialised pharmaceuticals), that includes compounds such as Corlentor
(Ivrabadine); EXXIV, Thymanax, Absorcol and Vitoryn which stem from the MSD’s agreement among others,
and will commercialise Novartis’ indacaterol as from mid 2014.
SWOT Analysis
Strengths
• Nationwide leader in syringe and vial bottling
services.
• Product portfolio diversification
• High visibility
• Sound balance sheet
Opportunities
• Operational leverage strategy (MSD)
• Strategic national partner of international peers
Weaknesses
• Highly regulated sector
• Operational leverage of its toll-manufacturing
division
• Leveraging in its R&D pipeline: ISM platform
• Oral anticoagulants competition in the long term
• Dependence on bemiparine.
• Pricing pressure under new SRP
• Weak R&D performance
Threats
• Regulatory reforms
• Generics competition
• Bemiparin's raw material price increase
Recommendation: We value the company via DCF method reaching a fair value of EUR10.10/share
(wacc: 8.4% and g:1%) excluding its R&D pipeline (ISM investigation line with risperidone) and including the
first 4 in-license agreement options from MSD (atorvastatine’s combination, odanacatib and Janumet). The
company should launch Bemiparine in China before the year end.
Target Price: EUR 10.10
titre
11
10
9
Analyst(s)
8
7
Ana Isabel González García CIIA
6
BEKA Finance
+34 91 436 78 09
[email protected]
5
4
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
119
Finland
SMALL & MID CAPS SELECTION
EUR 14.20
Buy
LASSILA & TIKANOJA
LAT1V.HE/LAT1V FH
Market capitalisation: EUR 551m
Support Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR15.52 / 12.71
12/12
674
92.0
13.6%
48.4
7.2%
36.4
36.4
80.0
82.3
0.4
0.9
27.0
10.8%
1.6
1.6
0.8
5.8
11.0
12.4
1.9
5.9%
5.2%
0.94
-29.8%
6.01
0.60
1.7%
12/13
12/14e
12/15e
668
665
686
106
110
114
15.8%
16.5%
16.7%
51.7
55.1
59.6
7.7%
8.3%
8.7%
37.2
39.8
42.3
37.2
39.8
42.3
91.2
94.3
97.1
60.0
36.6
24.1
0.3
0.2
0.1
0.6
0.3
0.2
37.3
30.4
28.6
13.5%
14.2%
15.0%
2.0
2.1
2.2
2.2
2.0
1.9
1.0
0.9
0.8
6.2
5.4
5.0
12.6
10.7
9.6
15.9
13.9
13.0
2.8
2.4
2.2
13.0%
7.9%
8.9%
3.5%
4.2%
4.2%
0.96
1.02
1.09
2.1%
7.0%
6.3%
5.45
5.98
6.47
0.50
0.60
0.60
-6.0%
-5.6%
-0.3%
Avg. Daily nb traded shares:37,028
Main shareholders: Free float 100.0%; Evald ja Hilda Nissin Säätiö 6.2%; Mandatum Henkivakuutusosakeyhtiö 5.8%;
Nordea-rahastot 4.3%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Lassila & Tikanoja specialises in environmental management and property and plant support
services, and supplies wood-based biofuels, recovered fuels and recycled raw materials. L&T operates in
Finland, Sweden, Latvia and Russia.
SWOT Analysis
Strengths
• Solid foothold in the Finnish waste management and
recycling segments
• Efficient facilities
• Strong barriers to entry
Weaknesses
• Multifaceted business portfolio
• Legislative factors significantly affect its business
prospects
• Margin improvement in the core businesses is very
difficult
Opportunities
• Use of renewable energy sources represents a politically
attractive goal to support
• Higher waste taxes in Finland
Threats
• Renewable fuels getting less support in the politically
uncertain atmosphere
• Tightening competition further depressing margins
• Could still streamline the business portfolio by selling
assets
• Earnings sensitive to diesel prices
Recommendation: The outlook for Environmental Services, Lassila & Tikanoja’s most important business
division, is enhancing, supported by growing demand for waste management and rising capacity utilisation in
the industry. In Facility Services and in Industrial Services, the earnings improvement path has been quite
slow in recent quarters. The recent market turbulence has favoured companies and sectors characterised by
steady cash flow and high cash flow yield, which has also raised the average valuation of L&T’s peer group.
We continue to set our target price for L&T based on its peer group’s valuation and, using our 2014
forecasts, we end up with EUR 17.50.
Target Price: EUR 17.50
titre
16
15
14
LASSILA & TIKANOJA SMALL & MID CAPS SELECTION
Analyst(s)
13
12
11
10
Henri Parkkinen
9
8
Mar 11
Source : Factset
120
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4409
Pohjola
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 132.86
Hold
LDC
LDCP.PA/LOUP FP
Market capitalisation: EUR 1084m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR133.16 / 94.80
02/12
2,774
177
6.4%
96.1
3.5%
56.4
56.4
132
-50.0
-0.1
-0.3
nm
10.1%
1.1
1.0
0.2
3.6
6.7
12.2
1.1
5.7%
2.1%
6.92
18.1%
76.34
1.80
40.1%
02/13
2,923
163
5.6%
87.5
3.0%
60.5
60.5
141
-49.1
-0.1
-0.3
nm
8.7%
0.9
1.1
0.2
4.4
8.3
12.8
1.2
2.1%
1.4%
7.49
8.3%
81.81
1.80
12.1%
02/14e
02/15e
3,026
3,101
202
227
6.7%
7.3%
102
120
3.4%
3.9%
66.6
78.8
66.6
78.8
160
180
-64.1
-123
-0.1
-0.2
-0.3
-0.5
nm
nm
9.7%
11.4%
1.0
1.2
1.3
1.4
0.3
0.3
4.5
4.2
8.8
7.9
14.4
13.6
1.3
1.4
6.4%
8.4%
1.4%
1.4%
8.24
9.75
10.0%
18.3%
88.49
96.19
1.90
1.90
11.8%
0.1%
Avg. Daily nb traded shares:0,798
Profile: LDC produces and sells: 1) poultry in France (three-quarters of sales): standard grade with the Le
Gaulois brand and premium grade with the Loué brand, sold as whole chickens, chicken portions and
crumbed products; and 2) poultry abroad, mainly in Poland, through its Drosed subsidiary acquired in June
2000. By product range, 82.5% of business is in processed foods, including delicatessen foods such as
pizzas, sandwiches, Asian dishes under the Chip Long brand, and meat pastries
SWOT Analysis
Strengths
• Leader in the French mass retail segment for poultry
• Leading producer of premium poultry under the Lou‚
brand
• Recently acquired international standing
Weaknesses
• The French poultry sector is frequently hit by crises linked
to over-production
• Absence of a strong brand, difficulty establishing Le
Gaulois as a horizontal brand
• Earnings highly dependent on the state of the French
poultry market
• Sound financial structure
Opportunities
• Poultry sector rationalisation via consolidation or a
substantial reduction in production capacity
• LDC could shore up supplies by buying rivals
• Development of delicatessen products, notably pizzas and
sandwiches
• Market recovery in Poland
Threats
• Imports of cheap chicken from Brazil & Thailand
• Cooperatives continue to focus on volumes rather than
prices
• Risk of epidemics, such as bird flu
Recommendation: We expected low growth of 1% in Q4; the reported figure was flat at -0.2% (-0.8% on
constant scope), i.e., revenues of EUR811.9m (EUR822m CM-CIC). FY 2013 revenues were EUR3,026m
Main shareholders: Lambert & Chancereul families 61.0% (70.3%); Free float 24.3% (14.4%); Huttepain Family 9.6% (10.3%);
vs EUR2,923.1m in 2012 (+3.5%, of which a +1.5% volume effect and +2% price effect). That said, given the
Guillet family 4.3% (5.0%); Treasury stock 0.9% (0.0%);
good product-mix trend, the group expects UOI growth excl. the CICE competitive tax credit while they
initially expected it to be flat. We maintain our UOI at EUR102m (3.39% margin) vs EUR85.9m (2.94%). Q4
All share prices at 19/05/14.
clearly points to a fall in consumption. LDC has shown staunch resilience by focusing on high value added
product ranges. While France was hit hard, international ops turned in a good performance with constant
scope growth of 9.4% over the full year and 3.9% in Q4. The disposal of the lossmaking upstream activity in
Spain on 1 February 2013 led to full-year growth of 0.7%. The delicatessen division posted a rise in sales of
PRICE (SHORT & LONG AVERAGE)
FINANCIAL CALENDAR (Source: Precise)
its Marie brand (which should be in the black in H2) while the private label segment was weak. Management
is cautious on 2014 owing to still-low consumer spending and volatile commodity prices, with increases in
recent weeks.
titre
140
130
120
110
100
Target Price: EUR 119.00
90
80
70
60
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Francis Prêtre
CM - CIC Securities
+33 4 78 92 02 30
[email protected]
121
Belgium
SMALL & MID CAPS SELECTION
EUR 80.00
LNRE.BR/LEAS BB
Market capitalisation: EUR 394m
Real Estate
EUR
12/12
38
29
79.1%
1
(10)
21
21
21.11
362
579
624
5.26
4.40
63.80
2.2%
70.62
8.1%
6.7%
21.5
12
3.8
362
54.3%
5.1%
12/14e
12/15e
48
49
EBITDA (m)
38
39
EBITDA margin
79.1%
79.1%
Portfolio Result (m)
5
0
Net Financial Result
(10)
(10)
Net Profit (reported)(m)
33
28
Net Profit (adj.)(m)
28
28
Funds From Operations
27.81
28.21
Net Debt (m)
375
372
Portfolio Value (m)
676
678
Enterprise Value (m)
770
766
EPS (adj.)
5.63
5.73
DPS
4.70
4.80
IFRS NAVPS
68.12
69.37
Premium/(discount)
17.4%
15.3%
EPRA NAVPS
73.77
75.04
Earnings adj. yield
7.0%
7.2%
Dividend yield
5.9%
6.0%
EV/EBITDA
20.3
19.9
P/E (adj.)
14
14
Int. cover(EBITDA/Fin.int)
3.8
3.8
Net debt/(cash) (m)
375
372
Net Debt/Total Assets
49.2%
48.6%
Abs. Performances(12m,6m,3m,1m):
3.6%
-0.7%
12 month High/low: EUR83.00 / 65.15
Avg. Daily nb traded shares:0,936
Main shareholders: Free float 33.6%; Ackermans & van Haaren Group 30.0%; AXA Belgium NV 29.0%;
Gross Rental Income (m)
12/13
44
34
79.0%
2
(10)
27
25
24.59
376
663
739
4.98
4.45
65.93
11.6%
71.58
6.2%
5.6%
21.5
15
3.6
376
50.0%
9.1%
AG Insurance 7.4%;
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
85
80
75
26/05/14 Dividend Payment
2013
21/05/14 Ex Dividend Date
2013
19/05/14 AGM
2013
70
65
60
55
Mar 11
122
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Profile: Leasinvest Real Estate is a Belgian REIT that owns and manages a EUR 710.7m portfolio
consisting of offices (35%), retail (43%) and logistics (22%) premises – some 35 properties in total – located
in the Grand Duchy of Luxembourg (60%) and Belgium (40%). In addition, Leasinvest owns 8% of the
shares of the Belgian REIT Retail Estates valued at EUR 43.0m on 31 March 2014. The company is listed
on NYSE Euronext Brussels since 1999 and is, since January 2005, included in the EPRA Eurozone Total
Return Index.
SWOT Analysis
Strengths
• Presence in Luxembourg (58% of portfolio)
• High gross portfolio yield (exc. Vac.) of 7.3%
Weaknesses
• Some exposure to challenging Brussels office market,
although it is limited: 14% of portfolio, of which 9.5% in the
Decentralised
• No pure playArea
• Value creation through (re)developments
• Limited liquidity, but active OTC market
Opportunities
• Leverage knowhow in Luxembourg market
Threats
• Vacancy risk, notably in office segment
• Fully letting The Crescent (31% vacant)
• Hike in interest rates
• Additional (re)developments
• Lifecycle of buldings
• Expand activities to a third country
Recommendation: Leasinvest reported higher 1Q14 revenues and earnings, but on a per share basis the
net current profit declined by 13.5%. The EPRA NAV stands at EUR 71.5 per share which prices the stock at
a c. 15% premium (cum EUR 4.50 gross coupon, ex-coupon May 21). Management has realised its strategic
orientation (more Luxembourg and more retail) and is now guiding for higher full year FY14E net current
result and net reported result. Caterpillar and Sal. Oppenheim have announced that they won’t renew their
leases when they expire (respectively 30/10/14 and 31/12/14). Leasinvest is however confident that given
the prime location and low vacancy rate on that location, it will be able to replace the tenants soon.
All share prices at 19/05/14.
Source : Factset
Hold
LEASINVEST REAL ESTATE
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
We maintain our Hold rating and EUR 74 TP.
Target Price: EUR 74.00
LEASINVEST REAL ESTATE SMALL & MID CAPS SELECTION
Analyst(s)
Dirk Peeters
+32 2 287 97 16
Bank Degroof
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 53.23
Accumulate
LEONI
LEOGn.DE/LEO GY
Market capitalisation: EUR 1739m
Automobiles & Parts
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR59.57 / 35.02
12/12
3,809
352
9.2%
236
6.2%
156
35.3
212
249
0.3
0.7
9.3
14.5%
1.7
1.0
0.3
3.5
5.2
26.4
1.1
5.5%
5.3%
1.08
51.4%
25.82
1.50
40.8%
12/13
12/14e
12/15e
3,918
4,176
4,534
284
347
381
7.3%
8.3%
8.4%
163
217
248
4.2%
5.2%
5.5%
106
140
165
27.6
154
181
187
272
300
257
247
186
0.3
0.3
0.2
0.9
0.7
0.5
8.8
11.6
13.6
10.0%
11.5%
12.6%
1.2
1.4
1.6
1.5
1.4
0.5
0.5
0.5
7.5
6.0
5.4
13.1
9.7
8.2
nm
11.3
9.6
2.1
1.9
1.7
1.9%
2.4%
6.3%
1.9%
2.8%
3.3%
0.85
4.73
5.55
-21.7%
nm
17.3%
25.29
28.62
32.18
1.00
1.50
1.76
5.1%
-4.2%
-0.5%
Avg. Daily nb traded shares:227,074
Main shareholders: Free float 100.0%;
All share prices at 19/05/14.
Profile: Leoni is one of Europe’s leading companies in its core Wiring Systems (WS) business and has a
leading market position within its chosen Wire & Cable (WCS) niche markets. A key focus of the company’s
business activity is the production of wiring systems for the automobile industry, which therefore also
represents Leoni’s dominant client group. Wiring Systems should account for roughly 64% of group EBIT in
FY 2014. The remaining is attributable to the Wire & Cable Solutions division.
SWOT Analysis
Strengths
• Strong market position in Europe.
Weaknesses
• Low capacity utilisation in the industrial cable production
in Europe.
• Cost leader in the wiring systems industry.
• Strong order book.
Opportunities
• Recovery of the European car market.
Threats
• Country risks in their low cost production locations
(Ukraine, North Africa etc.)
• Further growth in Emerging Markets.
• Recovery of demand for industrial cables in Europe.
Recommendation: Leoni has done its homework during the crisis by reducing its cost position significantly.
Revenues and earnings have risen to new record levels in 2012. In 2013 the company had a transition year
and suffered from the ramp-up of new orders. This should however result in a significant earnings growth in
the next years. This is not yet fully included in the current share price, in our view. Accumulate.
Target Price: EUR 58.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
65
60
12/08/14 Results
2014H1
12/08/14 Results
2014H1
55
50
45
LEONI SMALL & MID CAPS SELECTION
Analyst(s)
Tim Schuldt, CFA
+49 69 5899 7433
Equinet Bank
[email protected]
40
35
30
25
20
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
123
France
SMALL & MID CAPS SELECTION
EUR 116.40
Hold
LISI
GFII.PA/FII FP
Market capitalisation: EUR 1256m
Aerospace & Defense
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR129.35 / 82.00
12/12
1,107
155
14.0%
100
9.1%
57.3
57.1
120
76.7
0.1
0.5
65.3
8.9%
12/13
1,175
179
15.2%
129
11.0%
74.6
74.5
142
67.8
0.1
0.4
46.9
10.7%
1.0
0.7
4.8
7.4
11.7
1.2
6.7%
2.3%
5.29
-1.7%
53.28
1.40
37.8%
1.6
1.0
6.9
9.5
15.6
1.9
2.7%
1.5%
6.91
30.5%
57.96
1.70
8.8%
12/14e
1,257
198
15.7%
143
11.4%
80.8
81.7
152
42.1
0.1
0.2
27.9
11.5%
12/15e
1,344
218
16.3%
158
11.7%
90.8
90.9
169
8.0
0.0
0.0
30.0
12.1%
1.6
1.5
1.0
0.9
6.6
5.8
9.1
8.0
15.4
13.8
1.8
1.7
7.5%
4.3%
1.6%
1.7%
7.57
8.43
9.6%
11.3%
63.75
70.34
1.83
1.96
-5.4%
1.1%
Avg. Daily nb traded shares:1,607
Main shareholders: CID 60.9% (69.7%); Free float 24.2% (19.4%); VMC - VIELLARD MIGEON & Cie 5.7% (6.9%);
Profile: LISI is the world No. 3 for metal and plastic clips, and threaded fasteners for the aerospace and
automotive industries. LISI (LInk Solutions for Industry) is specialised in all types of industrial solutions to link
different parts of an aircraft, or an auto. The company has three business units: Aeronautics (56% of sales),
Automobile (36%), and Medical (5%), and owns 36 factories around the world.
In 2013, the group’s main clients in the aerospace segment were Airbus, Boeing, Bombardier, and Dassault
Aviation, while auto clients consist of major parts suppliers and carmakers.
SWOT Analysis
Strengths
• Exposure to the aerospace cycle, which is holding up well
in the dismal macroeconomic cycle
• Very healthy balance sheet which allow to external
growth
• Management team very efficient : managers hold the
capital, ang take care of each type of risk
Weaknesses
• Regular collapse of the auto sector, Long term pressure
on automotive margins
• Financial market use to associate LISI with the automotive
industry
• Historically a very cyclical stock
Opportunities
• Significant cash flow generation
Threats
• Aerospace growth cycle could stall
• Change of LT status as aerospace sector now accounts for
more than 2/3 of profits
• Could buy a lot of smaller company, right now in
negociation to reinforce Aerospace
• Risk of paying too much for acquisitions in this phase of
the cycle
Recommendation: LISI intends to carry out acquisitions, and has the means to do so, as shown by the
acquisition of rival Manoir, announced in March 2014 (its last deal dated back to 2010).
All share prices at 19/05/14.
This transaction will enable the company to: 1) double its revenues in the structural components business;
and 2) increase its economic presence with clients, which have been seeking a much more concentrated
segment.
PRICE (SHORT & LONG AVERAGE)
LISI’s share price is likely to undergo a transition year. No major change in valuation expected in the
medium term.
Aviation
FFP Invest 5.1% (3.2%); Autocontr“le et auto d‚tention 2.8% (0.0%); Salari‚s 1.2% (0.8%);
FINANCIAL CALENDAR (Source: Precise)
Target Price: EUR 125.00
titre
130
25/07/14 Analyst Meeting
120
2014H1
110
100
90
Analyst(s)
80
70
Agnès Blazy
60
50
40
Mar 11
Source : Factset
124
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
CM - CIC Securities
+33 1 45 96 77 61
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 830.00
Hold
LOTUS BAKERIES
LOTB.BR/LOTB BB
Market capitalisation: EUR 667m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR858.99 / 620.10
12/12
288
47.0
16.3%
34.7
12.0%
25.7
25.5
38.6
35.2
0.2
0.7
29.9
12.5%
2.0
2.1
1.6
10.0
13.6
16.9
3.0
-1.6%
1.8%
32.77
6.4%
186.17
9.80
27.8%
12/13
332
51.1
15.4%
37.7
11.3%
27.9
27.9
42.1
58.3
0.3
1.1
29.4
11.4%
1.8
2.2
1.9
12.1
16.4
19.9
3.2
-4.8%
1.3%
35.81
9.3%
219.74
10.80
16.1%
12/14e
12/15e
355
371
56.9
62.5
16.0%
16.8%
39.6
45.3
11.2%
12.2%
29.8
35.2
29.8
35.2
47.0
52.3
29.5
1.8
0.1
0.0
0.5
0.0
45.2
nm
11.4%
12.5%
1.9
2.0
2.5
2.4
2.0
1.8
12.3
10.8
17.6
14.8
22.4
19.0
3.4
3.0
4.8%
5.5%
1.4%
1.5%
37.05
43.78
3.5%
18.2%
246.69
278.94
11.30
12.70
2.0%
5.0%
Avg. Daily nb traded shares:0,518
Main shareholders: STAK Lotus Bakeries 57.3%; Free float 31.3%; Christavest 8.1%;
Lotus Bakeries Group Services 3.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Lotus Bakeries focuses on authentic specialities from the biscuit and cake world: caramelised
biscuits (“speculoos”), gingerbread, cake specialties, waffles, and pepparkakor biscuits. Lotus Bakeries, with
headquarters in Belgium, is an internationally oriented company with production facilities in Belgium, the
Netherlands, France and Sweden. The company has its own sales organisations in 10 European countries
and in the US, Hong-Kong, China and Chile. Lotus Bakeries sells its products under the Lotus, Peijnenburg
and Annas brand names.
SWOT Analysis
Strengths
• Strong brand management (Lotus, Peijnenburg, Annas,
Biscoff brand names)
• Market leader in niches: caramelised biscuits in Belgium,
gingerbread in the Netherl., Pepparkakor in the Nordics
• Limited forex risks. The larger part of earnings is only
exposed to the euro-zone.
• Strong balance sheet and high free cash flow. Will soon
be debt free.
Opportunities
• Continued international sales expansion of caramelised
biscuits “speculoos”
• International sales expansion of other top-products:
madeleine cakes, franchipane cakes and waffles
• Launch of innovative products on the base of existing
traditional biscuits
Weaknesses
• Rather low liquidity (low velocity) and very limited free
float
• Limited scale versus a number of European peers that are
part of multinationals
• Active in a mature market industry with low organic
growth potential
Threats
• Concentration of customers (big retail chains): price
pressure and margin squeeze from major food retailers
• A major food crisis could create a sudden drop in demand
for almost all products
• Increasing private label competition and consumer that is
inclined to look for cheaper products
• Raw materials price evolution (suger, wheat, edible oils,
chocolate…)
Recommendation: Strong market positions in its niche markets and massive investments in branding allow
protecting against margin erosion. Moreover, we the company is focusing on its best performing products
(predominantly caramelised biscuits, next to waffles, gingerbread etc.) and its recently expanded production
capacity will pay off. This comes at a price, though. At present Lotus Bakeries is trading at rather rich
earnings and EBITDA multiples that are above the median of multiples of small & mid cap food & beverage
sector peers. We however think that it is warranted given the track-record, strong growth and underlying
operational performance. However, at the present level the stock seems fairly valued (viz. our DCF-based
EUR 820 TP) and therefore we reiterate our Hold recommendation.
Target Price: EUR 820.00
titre
850
800
750
700
LOTUS BAKERIES SMALL & MID CAPS SELECTION
Analyst(s)
650
600
550
500
450
Hans D'Haese
400
350
300
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+32 (0) 2 287 9223
Bank Degroof
[email protected]
Jun 14
Source : Factset
125
Luxembourg
SMALL & MID CAPS SELECTION
EUR 32.40
Hold
LUXEMPART
LUXP.LU/LXMP LX
Market capitalisation: EUR 776m
Financial Services
PROFIT & LOSS (EURm)
Revenues
Non Recurrent Items
Net Profit (reported)
BALANCE SHEET (EURm)
Shareholders Equity
Minorities equity
Net Debt
NAV Constituents & Total NAV (EURm)
Core portfolio
PE & unquoted
Other assets
Net cash/(debt) position
Total Net Asset Value
Discount/(Premium) to NAV
Listed shareholdings on NAV
OTHER ITEMS (EURm)
Total Market Cap
Debt / Equity
Payout Ratio
P/BV
Dividend Yield (Gross)
PER SHARE DATA (EUR)
EPS (reported)
NAVPS
BVPS
DPS
2011
22.9
-4.7
43.3
2012
24.7
-1.8
28.3
2013
31.6
60.3
92.6
2014e
832.5
20.4
-163.6
864.0
2.5
-229.1
971.6
7.5
256.1
554.0
73.0
74.6
159.0
860.6
-36.5%
61.7%
528.0
129.0
25.8
200.0
882.8
-32.4%
63.1%
493.0
149.0
64.2
331.0
1,037.2
-35.8%
62.0%
526.8
146.3
109.3
333.2
1,115.6
-30.4%
51.2%
546.7
-19.7%
41.7%
0.7
3.3%
597.0
-26.5%
67.1%
0.7
3.3%
665.5
26.4%
23.0%
0.7
2.8%
776.1
1.800
35.950
34.751
0.750
1.230
36.880
36.067
0.825
3.940
43.330
40.558
0.908
3.0%
46.571
0.980
Source: Company, Bank Degroof estimates
Main shareholders: Foyer Finance (43.6%), Banque International à Luxembourg (10.0%), Sofina (5.3%), Treasury
shares (4.2%)
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
34
32
30
28
26
24
22
Profile: Luxempart (LXMP) is a Luxembourg based financial holding company, managing a portfolio of
stakes in both quoted and non-quoted companies. LXMP undertakes its activities as a professional
shareholder in two distinct manners: (1) through supportive investments managed by a team geared
towards creating long-term value and generating recurring revenue (“Strategic portfolio”: Direct Energy,
Foyer, SES, RTL Group, Atenor Group), (2) through the private equity business entrusted to a team geared
towards realising medium-term exit capital gains (“Private equity”: direct stakes and venture capital,
indirectly through ICP SICAR and LCP SICAR and through VC funds).
SWOT Analysis
Strengths
• Financially involved management with strong network
and over 20 years of experience
• Historical gross IRR of 16% (Luxempart calculations) since
its IPO in 1992
• Good exit track record of several larger participations and
historical dividend growth
• Fiscal optimisation: Luxempart and Indufin SICAR
structures for venture investments
Opportunities
• Investment capacity: financial means of over EUR 300m
ready for investments
• Favourable tax status for holding companies: No capital
gains taxes in Luxembourg
• Hidden value in the private equity portfolio and new PE
partnerships in France, Italy and Germany
• Acquisition of a new high dividend payer as a source of
cash earnings for future LXMP dividends
Weaknesses
• Limited visibility on operational performance of private
equity participations
• Uncertainty about allocation of tash position
(reinvestment risk for 21% of NAV).
• Limited international scope: maily Luxembourg, next to
Belgium, France, Germany and Italy
• Low portfolio turnover. Some participations are staying in
the portfolio for over a decade
Threats
• Vulnerable to changes in stock market sentiment and
impact holding company discount to NAV volatility
• Divestments are negatively impacting cash earnings.
Future dividend payout could be dependent on capital
•gains.
Cash drag on return. Proceeds from cash have a negative
impact on ROE.
Recommendation: LXMP has a very defensive profile thanks to its ample cash position (30% of NAV),
while the stock prices of its main stakes should withstand potential economic headwinds: SES (30% of
Gross Asset Value) is a stable cash flow company with attractive growth, Foyer Finance (17% of GAV),
mainly consists in Foyer shares (cheaply valued insurance and asset management company) & LXMP
treasury shares, and RTL Group (6% of GAV), seems to have an increased cash return potential thanks to
FCF generation. Because of the reduction of the stake, however, we have reviewed LXMP’s cash earnings
downwards. Our EUR 33 TP is based on ESN Research target prices for underlying assets and discount to
NAV mean reverting. It leaves enough upside potential to warrant an Accumulate recommendation.
20
18
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
Target Price: EUR 33.00
Analyst(s)
Hans D'Haese
126
Bank Degroof
+32 (0) 2 287 9223
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 14.22
Hold
M6-METROPOLE TELEVISION
MMTP.PA/MMT FP
Market capitalisation: EUR 1791m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR18.04 / 11.40
12/12
1,387
329
23.8%
206
14.8%
140
132
229
-299
-0.4
-0.9
nm
29.2%
2.8
2.8
0.9
3.7
5.9
11.3
2.2
8.3%
15.7%
1.05
-11.9%
5.42
1.85
18.2%
12/13
12/14e
12/15e
1,265
1,270
1,309
325
306
304
25.7%
24.1%
23.2%
211
192
190
16.7%
15.1%
14.5%
112
114
113
98.8
114
113
246
228
227
-261
-265
-270
-0.5
-0.5
-0.5
-0.8
-0.9
-0.9
nm
nm
nm
39.9%
32.7%
32.3%
3.8
3.1
3.1
5.6
4.2
4.2
1.5
1.2
1.2
5.7
5.0
5.0
8.7
8.0
8.0
21.2
15.7
15.8
3.7
3.1
3.1
9.0%
6.2%
6.2%
6.0%
6.0%
6.0%
0.78
0.91
0.90
-25.0%
15.7%
-0.9%
4.54
4.60
4.66
0.85
0.85
0.85
-11.1%
-15.4%
-7.8%
Avg. Daily nb traded shares:207,260
Main shareholders: RTL Group 48.4% (34.0%); Free float 44.3% (58.7%); CNP-A.FrŠre 7.3%;
All share prices at 20/05/14.
Profile: M6 was the No. 2 TV channel in France for women under 50 in 2013 (audience share of 16.2% vs
25.2% for TF1). 2014 est. group sales can be broken down as follows: 50% advertising on the M6 channel,
35% diversified businesses and broadcasting rights, 15% digital channels, free or pay channels (W9, 6ter,
TF6, Série Club, Paris Première, Teva, etc.). Diversified businesses include home shopping, football
(Girondins), publishing (CDs, DVDs, etc.), the M6 mobile licence, broadcasting rights and Internet revenues.
SWOT Analysis
Strengths
• Real skills in cost management and programming
• Creativity in programming and formats (Capital, L'Amour
est dans le Pre, Top Chef)
• Capacity to create rapidly profitable businesses (M6
mobile by Orange, W9)
• Commercial innovations: flash sales of ad slots, W9 and
6ter simultaneous ad screens
Opportunities
• Gain TV ad market shares
• Make 6ter profitable through a full operating and
advertising integration
Weaknesses
• Limited resources compared with TF1 (programming
costs of EUR347m in 2012 vs EUR936m for TF1)
• Lack of cost cutting potentail
• Limited acquisition opportunities
• Failure in some diversifications (e-commerce, Girondins
football club)
Threats
• Very crowded competition in free-to-air, ongoing
fragmentation of TV audiences
• Arrival of Canal+ in free-to-air TV, with a potential budget
of more than EUR100m (30% of M6 channel, x2 vs W9)
Recommendation: At 8.4x EBIT 14e and a dividend yield of 5.4%, M6’s multiples look attractive in the
European TV sector. Our SOP stands at EUR16. However, we fear that hopes of a mild recovery in M6
channel ad revenues (+1% in our estimates) could fade later in the year, as the French TV market remains
deflationary (weak economic environment and new entrants in the free-to-air TV market) and M6 channel
audience shares are eroding. The diversification strategy is less convincing, following the disposal of loss
making Mister Good Deal at a slightly negative EV. Girondins are structurally loss making. We believe that
TF1 has better dynamics: cost cutting, full integration of TMC/NT1 in 2015, disposal of Eurosport at a high
price, more powerful multimedia ad selling, and better performances of small FTA channels.
Target Price: EUR 16.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
19.0
22/05/14 Dividend Payment
18.0
17.0
16.0
15.0
2013
M6-MÉTROPOLE TÉLÉVISION SMALL & MID CAPS SELECTION
Analyst(s)
CM - CIC Securities
Eric Ravary
Emmanuel Chevalier
14.0
13.0
12.0
11.0
+33 1 45 96 79 53
+33 1 45 96 77 42
[email protected]
[email protected]
10.0
9.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
127
Italy
SMALL & MID CAPS SELECTION
EUR 2.32
Accumulate
MAIRE TECNIMONT
MTCM.MI/MT IM
Market capitalisation: EUR 712m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.87 / .59
12/12
2,187
-159
nm
-187
nm
-208
-208
-180
226
-1.9
-1.4
nm
-781%
nm
nm
0.3
nm
nm
nm
nm
-59.2%
0.0%
-0.64
+chg
-0.38
0.00
43.2%
12/13
12/14e
12/15e
1,656
1,766
1,982
116
118
139
7.0%
6.7%
7.0%
90.1
98.6
116
5.4%
5.6%
5.8%
17.1
41.5
56.9
17.0
41.5
56.9
43.6
61.4
80.9
305
173
79.1
nm
2.2
0.6
2.6
1.5
0.6
2.9
3.3
4.6
19.5%
-43.6%
-147%
2.0
-4.5
2.6
2.9
3.0
0.5
0.5
0.4
6.9
7.5
5.7
8.9
9.0
6.9
29.4
17.2
12.6
14.9
9.5
5.4
-57.9%
6.0%
12.9%
0.0%
0.0%
0.0%
0.06
0.14
0.18
+chg
143.9%
36.6%
0.11
0.24
0.43
0.00
0.00
0.00
54.8%
36.7%
-3.3%
Avg. Daily nb traded shares:1,907,237
Main shareholders: GLV capital 55.0%; Free float 35.0%; Ardeco 10.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
4.5
4.0
3.5
Profile: Maire Tecnimont is an engineering and contracting group operating worldwide in the oil, gas &
petrochemicals, power, infrastructure sectors. The company has key competitive advantages in the chemical and
petrochemical sector (world leader in the construction of plants using technologies licensed by Basell), in the
fertilizer plant business (Stamicarbon is a global leader in urea licenses) and in gas treatment. Maire Tecnimont’s
main shareholder is Fabrizio Di Amato, who also founded the company.
SWOT Analysis
Strengths
• competitive advantages in the chemical and
petrochemical sector
• global leadership in the Urea Licenses market
Weaknesses
• no off-shore operations that have higher margins
• the company is small size compared to most of its peers
• Skills in managing projects in gas production
Opportunities
• fertilizer plant business
Threats
• still high debt
• infrastructures and facilities for gas
• change in strategy could not be easy
In 2011 and 2012 the group experienced a period of financial distress. As of mid-2011, exceptional events in the
Power business unit in South America negatively affected the company’s results, requiring a significant amount of
liquidity that contributed to the deterioration of the net financial position. The net financial position worsened by
EUR 442.2m to EUR 226.2m at the end of 2012 from a net cash of EUR 216m at the end of 2010. As a result the
company launched a financial strengthening plan for around EUR 500m in April. This plan included: EUR 50m
new financing; EUR 307m debt rescheduling (expiration 31/12/2017 grace period until 31/12/2014); EUR 150m
capital increase. The capital increase was finalized at the end of July. At the beginning of June Ardeco bought a
5% stake in Maire for EUR 15m after a reserved capital increase. After a reverse stock split (ratio 10:1) Maire
Tecnimont finalized a EUR 135m capital increase at EUR 0.50/sh.
The company aims at selling non-core assets for around EUR 300m in the 2013-2016 period. In June 2013 the
company announced the disposal of its stake in the COCIV consortium for EUR 50m and the sale of its stake in
the CMT consortium (Copenhagen subway) for EUR 15m. The company is now going to sell the “Biolevano”
power plant; the sale price is expected to be worth around EUR 70/80m
The company’s new strategy is aimed at focusing on low-risk high margin technology driven business and
engineering services; the company is going to pursue a greater selectivity of projects with focus on value (versus
volumes) and reduced construction risk. This strategy is expected to structurally reduce the company’s risk without
negatively affecting its margins which, on the contrary, are expected to improve in the next few years.
Recommendation: our EUR 3.0/sh target price takes into account the improvements expected in the next few
years both as regards profitability and as regards the decrease in net debt.
3.0
Target Price: EUR 3.00
2.5
2.0
Analyst(s)
1.5
1.0
0.5
Mar 11
Source : Factset
128
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Francesco Sala
Banca Akros
+39 02 4344 4240
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 12.38
Buy
MANITOU
MANP.PA/MTU FP
Market capitalisation: EUR 490m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.55 / 9.42
12/12
1,265
75.1
5.9%
45.5
3.6%
44.9
44.9
37.7
121
0.3
1.6
7.5
5.3%
0.6
1.1
0.5
8.2
13.5
11.4
1.2
-5.5%
3.6%
1.14
23.4%
10.59
0.45
8.9%
12/13e
1,176
50.9
4.3%
20.7
1.8%
6.7
6.7
30.9
84.8
0.2
1.7
6.7
2.5%
0.3
1.1
0.5
12.0
29.4
nm
1.3
6.7%
0.1%
0.17
-85.1%
10.62
0.01
-12.2%
12/14e
12/15e
1,234
1,284
90.2
103
7.3%
8.0%
59.3
71.2
4.8%
5.6%
35.5
42.7
35.5
42.7
65.3
73.3
70.7
30.1
0.2
0.1
0.8
0.3
18.0
20.6
7.0%
8.5%
0.8
1.0
1.0
0.9
0.4
0.4
6.0
4.8
9.0
6.9
13.8
11.5
1.1
1.0
4.7%
10.5%
1.8%
2.2%
0.90
1.08
nm
20.4%
11.29
12.10
0.22
0.27
-5.0%
1.4%
Avg. Daily nb traded shares:3,794
Main shareholders: Founders 65.4% (65.8%); Free float 31.0% (31.3%); Toyota 2.8% (2.9%);
Treasury Shares 0.8% (0.0%);
All share prices at 20/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: World leader in forklift trucks (market share close to 40%). It is present on three segments:
construction (3/8 of sales), agriculture (3/8 of sales) and industry (2/8 of sales). In addition to its traditional
models, Manitou now sells chargers, industrial loaders and aerial work platforms. With the acquisition of
Gehl at end-2008, Manitou has prospects for large-scale expansion on the leading global market: the US.
SWOT Analysis
Strengths
• 40% market share in Europe
Weaknesses
• A very cyclical activity
• Loyal distribution network. Possibility of extension thanks
to Gehl and Yanmar.
• Heightened competitiveness for several years, which
weighs on margin trends. Return to 12% operating margin
therefore unlikely.
Opportunities
• Manitou has survived to become a stock with strong
economic and stock market leverage
• Growth set to be strong until 2015, after a decrease in H1
2013
Threats
• Bond market crash would have an impact on already
weakened clients
• Final markets still ill and fragile
Recommendation: There was a first severe downturn in the construction sector with public works, ending
mid-2010. Investment by industrial players is undergoing a correction on a scale not seen for the past 20
years. The agricultural sector has been unable to put in a satisfactory performance due to farmers adopting
a wait-and-see stance, but the recovery phase began for these three divisions in Q3-2010.
The company has confirmed that it will boost its production capacity by 25-30% p.a. over several years. As a
result, Manitou could, in 2014 or 2015, see pro-forma sales return to the previous cycle peak of EUR1.5bn.
The market’s recent reaction evidenced that Manitou’s outlook for 2014 and 2015 is not priced in. If we
assume that the cycle in 2014 and 2015 will be higher than the previous one, we can decide to play on
multi-year growth for the company. Moreover, we feel that the level of risk is much more acceptable than it
has been over the past four years.
Target Price: EUR 16.50
titre
26
24
22
MANITOU SMALL & MID CAPS SELECTION
Analyst(s)
20
18
16
14
12
Christian Auzanneau
10
8
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+33 4 78 92 01 85
CM - CIC Securities
[email protected]
Jun 14
Source : Factset
129
Italy
SMALL & MID CAPS SELECTION
EUR 13.60
Hold
MARR
MARR.MI/MARR IM
Market capitalisation: EUR 905m
Food & Drug Retailers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.38 / 9.08
12/12
1,260
90.3
7.2%
77.1
6.1%
49.0
49.0
62.2
165
0.7
1.8
16.1
13.0%
1.8
1.8
0.6
7.8
9.1
10.6
2.2
8.4%
7.3%
0.74
0.0%
3.53
0.58
38.5%
12/13
12/14e
12/15e
1,365
1,429
1,471
94.9
100
106
7.0%
7.0%
7.2%
80.0
84.4
90.2
5.9%
5.9%
6.1%
47.6
51.0
54.0
47.6
51.0
54.0
62.5
66.6
69.6
194
193
172
0.8
0.8
0.6
2.0
1.9
1.6
11.3
14.1
12.6
12.2%
12.4%
13.3%
1.7
1.8
1.9
2.3
2.5
2.4
0.7
0.8
0.7
10.6
11.1
10.2
12.6
13.1
12.0
16.8
17.5
16.6
3.3
3.5
3.4
2.0%
4.8%
7.1%
4.2%
4.4%
4.5%
0.72
0.77
0.82
-3.4%
7.8%
5.8%
3.67
3.84
4.05
0.58
0.60
0.61
14.7%
3.4%
-1.2%
Avg. Daily nb traded shares:88,155
Main shareholders: Cremonini S.p.a. 50.6%; Free float 49.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
15
04/08/14 Results
14
13
12
2014H1
Profile: MARR markets and distributes about 18,000 stock keeping units (10,000 food and 8,000 non food)
to approximately 38,000 clients. With around 30 distribution centres across Italy and 4 Cash & Carry stores,
it is the only truly national operator of the Italian foodservice distribution industry. Its reference market is
worth around EUR 11.0bn. MARR has around 10% market share of the wholesale market. MARR’s most
important client segment is the street market (i.e restaurants and hotels) with around 61% of total sales.
MARR focuses entirely on the Italian market.
SWOT Analysis
Strengths
• Domestic market leadership: it reached 13% in terms of
value (Wholesalers food supply to Italian Foodservice est. of
EUR
11bn) and
over 25% inthe
terms
of clients
served
• Capability
to outperform
reference
market
Weaknesses
• Reference market growing between 0.5% - 2.0% in
volumes
• Management with historical track record of excellent
execution
Opportunities
• Consolidation of a very fragmented market
Threats
• No acquisitions at reasonable multiples
• Deeper commercial presence on existing clients
• Potential effects of historical high product innovation
Recommendation: Marr reported Q1 2014 sales at EUR 290.1m, up by 9.0% Y/Y and a touch better than
expected. Q1 2014 sales of the Street Market and National Account were at EUR 230.9m up 7.6% Y/Y:
organic growth was +5.2%, while growth due to acquisition was of +2.4%. In the Street Market and National
Account price mix was +1.5% (prices now recovering in some seafood products), while volume growth was
+6.1% (where grocery had the largest increase with a growth of 7.9%, vs. meat +4.7% and seafood
+0.0%).Q1 2014 sales to clients in the Wholesale category were at EUR 55.5m up 15.0% Y/Y (due to a
benign winter fishing campaign) and better than expected.
Q1 2014 EBITDA reached EUR 13.4m (+11.8% Y/Y) and was better than our estimates of EUR 12.8m: Q1
2014 COGS on sales were at 78.3% decreasing by 20bps vs. Q1 2013; Q1 2014 EBIT of EUR 10.2m
(+10.0% Y/Y) was ahead of our forecasts. Q1 2014 Net financial interests were at EUR -2.1m vs. EUR 1.7m
in Q1 2013.Q1 2014 trade NWC was at EUR 249.5m (higher than expected) vs. EUR 226.6m in FY 2013.
Q1 2014 Net debt was of EUR 206.6m vs. Q1 2013 level of EUR 184.9m.
Q1 2014 numbers were solid, and management said that sales to the Street Market & National accounts
were positive also thanks to benign trend during Easter period. Our DCF-based Target Price is at EUR 14.30
per share. Hold.
11
10
Target Price: EUR 14.30
9
8
7
6
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
MARR SMALL & MID CAPS SELECTION
Analyst(s)
Claudio Giacomiello, CFA
130
+39 02 4344 4269
Banca Akros
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 12.35
Accumulate
MAUREL ET PROM
MAUP.PA/MAU FP
Market capitalisation: EUR 1497m
Oil & Gas Producers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR13.46 / 10.93
12/12
461
335
72.8%
212
46.1%
98.6
98.6
186
354
0.4
1.1
9.5
7.8%
0.1
1.5
3.9
5.3
8.4
15.6
1.8
3.2%
2.2%
0.81
-40.1%
6.88
0.27
-7.6%
12/13e
12/14e
12/15e
589
618
582
483
508
477
81.9%
82.1%
81.8%
341
364
343
57.9%
58.8%
58.8%
150
163
157
150
163
157
253
266
246
296
245
224
0.3
0.2
0.2
0.6
0.5
0.5
13.6
14.3
13.4
12.0%
12.4%
11.1%
0.4
0.4
0.5
1.3
1.2
1.1
2.8
2.6
2.7
3.4
3.2
3.3
4.8
4.4
4.6
9.8
9.2
9.6
1.5
1.4
1.3
6.2%
6.7%
5.0%
3.4%
3.6%
3.5%
1.24
1.35
1.29
52.6%
8.4%
-3.9%
7.85
8.78
9.62
0.41
0.45
0.43
5.8%
4.0%
0.4%
Avg. Daily nb traded shares:163,698
Main shareholders: Free float 64.0%; Pacifico (JF Henin) 24.6%; MACIF 6.7%;
Halisol 3.3%; Financiere de Rosario 1.5%;
All share prices at 20/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Maurel et Prom is an independent oil exploration and production company listed in Paris. In 2009,
M&P refocused on production activities to generate solid cash flow. As a counterpart to this, the group
reduced its exposure to exploration risk. Operations are therefore now focused on developing the group in
Gabon and on increasing its production, as well as on actions aimed at fully or partially disengaging from
risky assets or assets that demand heavy financial resources.
In 2013, production in Gabon increased sharply to an average of 19,580 b/d (+19%) and ended the year near
25 kb/d. M&P’s production will continue to grow significantly in 2014 and for Gabon the group is aiming for over
35kb/d by year-end, which should lead to positive free cash flow for 2014. The group is finalising negotiations of
a gas sale contract to monetise its Mnazi-Bay gas resources in Tanzania.
Exploration investments are more limited in 2014 and will partially be borne by M&P’s partners (Colombia
and Peru). Maurel et Prom has participations in exploration assets in Tanzania, Mozambique, Namibia and
Latin America. Along with MPI (2/3), Maurel et Prom (1/3) has embarked on investments in new, promising
areas: Myanmar (offshore gas) and Canada (tight light oil in the east and oil sands in the west).
SWOT Analysis
STRENGTHS
 Solid reserve/resources base in Gabon
(195mboe 2P) Tanzania (52mboe) and Colombia
 Light structure helping move rapidly and
exploiting opportunities
 Carried exploration costs in Colombia and Peru
OPPORTUNITIES
 Exploration in high risk/high reward areas (e.g.
Offshore Namibia)
 Monetise gas assets in Tanzania that could
rapidly increase M&P’s sales and cash flow
WEAKNESSES
 Limited access to bank financing
 Imposed financing through issues of two
OCEANEs expiring in 2014 and 2015
 Limited technical capacities
THREATS
 Fall in oil prices
 Lack of exploration success
 Failure to fix well productivity issues in Gabon
limiting potential growth
Recommendation: The group’s proven reserves were sharply revised upwards to around 142mboe at end2013 vs EUR54mboe at end-2012 due to the signing of a new production sharing contract in Gabon. This
new PSC enhances the visibility and attractiveness of M&P’s reserves and production profile, enabling the
company to form new alliances. Moreover, M&P’s JV with MPI Energy has allowed the group to expand its
exploration interests to Myanmar (offshore and Canada (unconventional resources), opening up
opportunities for longer term growth.
Our total valuation of EUR14.9/share offers only a modest upside.
Target Price: EUR 14.90
titre
19.0
05/08/14 Trading Update
18.0
2014Q2
17.0
16.0
15.0
14.0
13.0
12.0
11.0
10.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
MAUREL ET PROM SMALL & MID CAPS SELECTION
Analyst(s)
CM - CIC Securities
Jean-Luc Romain
[email protected]
+33 1 45 96 77 36
Jun 14
Source : Factset
131
Spain
SMALL & MID CAPS SELECTION
EUR 9.20
MELIA HOTELS INTERNATIONAL
MEL.MC/MEL SM
Market capitalisation: EUR 1699m
Accumulate
Hotels, Travel & Tourism
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR9.93 / 5.32
12/12
1,505
417
27.7%
327
21.7%
200
45.1
125
1,003
0.9
2.4
6.3
13.1%
1.7
1.0
1.4
4.9
6.2
23.7
1.0
1.4%
0.7%
0.24
12.3%
5.80
0.04
66.1%
12/13
12/14e
12/15e
1,352
1,494
1,656
242
278
305
17.9%
18.6%
18.4%
178
186
211
13.1%
12.5%
12.8%
-73.2
66.1
103
-37.9
69.3
104
20.1
161
199
1,158
844
756
1.0
0.6
0.5
4.8
3.0
2.5
3.2
3.7
5.0
7.9%
8.5%
9.6%
1.0
1.1
1.3
1.5
1.3
1.3
2.1
1.7
1.5
11.7
9.0
7.9
15.9
13.4
11.4
nm
24.5
16.4
1.6
1.3
1.3
-3.4%
3.8%
4.5%
0.4%
0.8%
1.2%
-0.21
0.38
0.56
-chg
+chg
49.8%
5.95
6.84
7.33
0.04
0.07
0.11
11.6%
-1.9%
4.1%
Avg. Daily nb traded shares:723,915
Main shareholders: Familia Escarrer 64.6%; Free float 35.4%;
All share prices at 19/05/14.
PRICE (SHORT & LONG AVERAGE)
titre
11
10
FINANCIAL CALENDAR (Source: Company)
04/06/14 AGM
Profile: Meliá is the leading Spanish hotel chain, 3rd European and 19th internationally. It currently counts
on a total of 305 hotels and 78.515 rooms distributed in 4 continents and 30 cities of which 57% are under
management, 20% leased and the remaining 23% owned. According to a geographic breakdown: Spain
45% of the total rooms, 28% America, 24% rest of Europe and 3% Asia. By category 52% of the rooms are
midscale (brands Tryp and Sol Hotels) while the remaining 48% are upscale & premium (brands Gran Melia,
Paradisus, ME or Innside). Hotel revenues account for the 85% of the total, but Melia has three more
business lines: real estate (whre capital gains are recurrently registered), Club Melia (each accounting 4.7%
total) and overheads the remaining 5.6%. Melia’s strategy is focused on expanding through an “asset light”
model based on management, mainly upscale and within high potential growth markets. In this regard recent
signatures have been Bahamas, Jamaica, Mongolia, Manhattan, Morocco and Milan. Regarding the financial
situation, Melia closed 1Q14 with EUR 1.242m of net debt and pursues: 1) extending 2014 maturities (EUR
139m excluding the convertible bond). 2) Better balance 50/50% between banking debt and capital markets,
3) Increasing dollar exposure as natural hedge with the dollar denominated revenues (America’s division
accounts for 33% revenues and 56% EBIT) and 4) further streamlining (debt reduction of at least
EUR0.25bn). In this regard there is no relevant expansion capex 2014-15 and asset rotation will continue (at
least EUR 125m/year). Jones Lang LaSalle valuation assigns a gross value of EUR3.1bn to the owned
assets. For 2014e: revpar +7.3% (guidance mid-high single digit growth) and hotel EBITDA > 10%.
SWOT Analysis
Strengths
• Spanish leader hotel chain
• Worldwide leader in resort segment
• High exposure to management regime
• Attractive pipeline (60 hotels and 17.000 rooms)
Weaknesses
• Difficult macro situation in feeder countries
• Potential dilution due to convertible bonds
• Slowdown in cutting debt
Opportunities
• Expected recovery of domestic demand
• Asset rotation possibilities
• Increasing exposure to direct channels
• Successful loyalty programme
Threats
• Dependant on Spain (14% EBITDA)
• High dollar exposure (51% EBITDA)
• Venezuelan currency devaluation (8% EBIT)
Recommendation: Accumulate given the positive stance for the tourism industry in Spain and the good
prospects for America, EMEA’s and ME segments for the year. On the negative we expect a capital increase
during the year due to the cancellation of the convertible bond by December 2014.
Target Price: EUR 11.85
9
8
7
Analyst(s)
6
Sonia Ruiz De Garibay
5
4
3
Mar 11
Source : Factset
132
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
BEKA Finance
+34 91 436 7841
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 3.39
Accumulate
METSÄ BOARD
METSB.HE/METSA FH
Market capitalisation: EUR 1112m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.48 / 2.37
12/12
19,059
1,618
8.5%
669
3.5%
380
380
1,329
6,926
0.9
4.3
4.1
3.7%
0.5
1.0
0.7
8.1
19.7
17.3
0.8
-0.4%
2.8%
1.16
nm
23.89
0.54
22.8%
12/13
12/14e
12/15e
18,258
18,637
20,173
1,572
2,219
2,509
8.6%
11.9%
12.4%
943
1,308
1,641
5.2%
7.0%
8.1%
496
663
907
496
663
907
1,126
1,574
1,774
7,161
6,530
6,004
0.9
0.8
0.7
4.6
2.9
2.4
3.1
4.8
6.0
5.1%
7.2%
-3.1%
0.7
0.9
1.2
1.2
1.2
0.9
0.9
0.8
10.4
7.5
6.4
17.3
12.7
9.8
18.8
15.2
11.1
1.2
1.2
1.2
-2.6%
9.3%
8.8%
2.7%
2.9%
2.9%
1.51
2.02
2.76
30.7%
33.6%
36.7%
23.41
24.61
26.47
0.81
0.90
0.90
14.5%
11.9%
3.4%
Avg. Daily nb traded shares:155,885
Main shareholders: Free float 100.0%; Metsäliitto Cooperative 38.8%; Varma Mutual Pension Insurance Company 4.3%;
Ilmarinen Mutual Pension Insurance Company 2.0%;
All share prices at 19/05/14.
Profile: Metsä Board produces high-quality folding boxboard and kraftliner, mainly of virgin fibre. It is the
largest producer of folding boxboard in Europe, with output accounting for about one-third of the total. In
2012, Metsä Board completed the investment programme to expand folding boxboard capacity by a total
of 150,000 tonnes (+19%) to 935,000 tonnes. Metsä Board is some 250 thousand tonnes long in pulp on
an annual basis.
Metsä Board's only paper-making asset, the Husum Mill, is Europe’s largest integrated paper and pulp
mill, producing uncoated and coated fine paper and bleached market pulp.
SWOT Analysis
Strengths
• Expansion of packaging board markets at a rate of 3–5%
Weaknesses
• Consumer packaging production mostly in Finland
• Extremely competitive production facilities in packaging
boards
• Profile transformation into a packaging company in the
final stretch
• Very sensitive to pulp prices
Opportunities
• Accelerating growth of the market for fibre-based
packages thanks to emerging economies
• Growing market share in virgin fibre packages
Threats
• Cost inflation
• Faster sector consolidation in Europe
• Declining trend demand in paper
• Competitors investing further in packaging board
production in Europe
• Growth in Asian capacity and persistence of European
overcapacity in fine paper
Recommendation: Metsä Board’s strength is its consumer board operations, which will have even better
earnings potential thanks to the investments being made. The segment's market outlook is strong and, in
folding boxboard, there have been signs of a transition from recycled fibre products to virgin fibre products,
favouring Metsä Board. All other things being equal, the higher relative portion of consumer packaging may
in the long run raise the valuation multiples accepted for the company. Our target price is based on the
median EV/EBITDA level of peer group.
Target Price: EUR 3.80
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.5
METSÄ BOARD SMALL & MID CAPS SELECTION
Analyst(s)
3.0
2.5
Henri Parkkinen
2.0
+358 10 252 4409
Pohjola
[email protected]
1.5
1.0
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
133
Germany
SMALL & MID CAPS SELECTION
EUR 4.90
Accumulate
MLP
MLPG.DE/MLP GR
Market capitalisation: EUR 529m
Financial Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.98 / 4.41
12/12
568
86.7
15.3%
74.1
13.0%
52.7
52.7
64.8
-40.7
-0.1
-0.5
nm
20.6%
1.9
2.4
0.9
6.0
7.0
10.2
1.4
3.5%
6.4%
0.49
74.7%
3.59
0.32
-8.8%
12/13p
12/14e
12/15e
501
546
567
44.6
67.5
76.4
8.9%
12.4%
13.5%
32.8
55.4
63.9
6.5%
10.1%
11.3%
25.5
39.5
45.7
25.5
39.5
45.7
37.3
51.7
58.2
-46.4
-68.0
-84.1
-0.1
-0.2
-0.2
-1.0
-1.0
-1.1
nm
nm
nm
8.7%
14.4%
16.5%
0.8
1.3
1.5
2.3
2.1
2.0
1.1
0.9
0.8
12.0
7.1
6.1
16.3
8.7
7.3
22.1
13.4
11.6
1.5
1.3
1.3
8.4%
6.9%
8.2%
3.3%
5.1%
6.1%
0.24
0.37
0.42
-51.6%
55.0%
15.7%
3.47
3.68
3.85
0.16
0.25
0.30
6.9%
-6.8%
1.1%
Avg. Daily nb traded shares:12,606
Profile: MLP is a financial services provider for academics and other highly educated individuals. The
company integrates insurance and banking services into a financial concept tailored for each individual
customer. MLP advises its clients in all issues concerning private cover and provisions and provides
solutions by selecting from a diverse range of products and services offered by different banks, insurance
companies and investment organisations. Furthermore, the company offers advice and solutions regarding
financial investments, mortgages and business start-ups as well as wealth planning and management
(through its subsidiary Feri). MLP is only active in Germany. Products related to long-term asset formation
and retirement saving account for approximately 80% of total revenues.
For 2014 we expect earnings to increase by 61% yoy due to higher revenues stemming from MLP’s
traditional old-age provision/health insurance business and the built-up of the residential real estate
brokerage business. Generally MLP should continue to suffer from the difficult market environment as
people should continue to be reluctant to invest into old-age provision products (MLP’s key revenue source).
SWOT Analysis
Strengths
• Highly cash flow generative business
Weaknesses
• High dependence on regulatory environment
• Strong asset quality
• Good market position in wealth management
Opportunities
• Rising demand for old-age provision products
Threats
• Market environment further deteriorates
Main shareholders: Free float 47.6%; Lautenschläger 29.6%; HDI 9.9%;
Barmenia 6.7%; Allianz 6.3%;
All share prices at 19/05/14.
Recommendation: On the back of MLP’s attractive valuation and the expected earnings improvement for
2014 we recommend buying the shares with a target price of EUR 6.30.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 6.30
titre
7.5
7.0
6.5
6.0
5.5
5.0
4.0
Mar 11
134
2013
06/06/14 Ex Dividend Date
2013
05/06/14 AGM
2013
MLP SMALL & MID CAPS SELECTION
Analyst(s)
Philipp Häßler, CFA
4.5
Source : Factset
06/06/14 Dividend Payment
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+49 69 58997 414
Equinet Bank
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 15.11
Reduce
MOBISTAR
MSTAR.BR/MOBB BB
Market capitalisation: EUR 907m
Telecommunications
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR18.55 / 10.25
12/12
1,703
494
29.0%
277
16.3%
186
186
410
394
1.1
0.8
46.2
24.0%
3.5
1.9
0.9
3.1
5.6
6.3
3.3
14.1%
9.3%
3.09
-15.9%
5.96
1.80
-18.6%
12/13
12/14e
12/15e
1,494
1,329
1,303
317
266
315
21.2%
20.1%
24.2%
129
51.5
99.7
8.6%
3.9%
7.7%
87.5
30.1
65.4
87.5
30.1
65.4
275
245
280
557
585
521
1.7
1.6
1.2
1.8
2.2
1.7
40.1
26.6
33.7
9.8%
3.7%
7.1%
1.4
0.5
1.0
1.4
1.5
1.4
0.9
1.1
1.1
4.3
5.6
4.5
10.7
28.7
14.2
9.5
30.2
13.9
2.5
2.5
2.1
-7.0%
-3.1%
7.1%
0.0%
0.0%
3.3%
1.46
0.50
1.09
-52.9%
-65.7%
117.5%
5.62
6.12
7.21
0.00
0.00
0.50
11.3%
8.6%
13.4%
Avg. Daily nb traded shares:111,808
Main shareholders: France Telecom 52.9%; Free Float 47.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
55
50
Profile: Mobistar is a subsidiary of the Orange group and Belgium's second mobile operator with an active
client’s market share of around 30% after Belgacom, the incumbent operator. Offering mobile services from
August 1996 on, the company also offers converged services for enterprises and is now working on a triple
play retail fixed product by using the opening of the cable network (launch planned in the end of 2014).
Mobistar's strategy is to consolidate its mobile position by rolling out a strong 4G network, to differentiate
with services, to up customer service and to lead efficiency Next to this, Mobistar is also active as a mobile
operator in Luxembourg and responsible for the business of mobile machine-to-machine communication of
the Orange group (with the exception of France).
SWOT Analysis
Strengths
• Strong balance sheet
Weaknesses
• Missing converged offers in retail
• Profiting from belonging to the Orange group
• Regulation hits mobile business the most
• Small market limits newcomers
• Mobile network not up to speed with the one of
Belgacom
• Low possibilities to offload mobile data to wifi
• Ample room for cost cutting
Opportunities
• If successful, new fixed offering could level competitive
playing field
• Monetising increased mobile date usage with 4G
Threats
• Regulated cable opening can still be blocked by court
• Cost cutting can protect margins
• Competition could eliminate possibilities to monetise 4G
• Fixed offering could be unsuccessful
Recommendation: 1Q14 disappointed on client acquisitions but surprised us in the timing of its cost
savings, leading to a better than expected EBITDA. Since this is only a timing effect, it does not change the
case fundamentally. The share price has gone up because of speculative reasons, for which there are still
many questions. Does Orange want to sel? (The operator declined the rumor that there was a divestment
process started). If so, at what price? Are likely (cable) buyers ready to buy? Telenet or Voo are the most
obvious buyers because they can generate most synergies, however they might prefer pure cable
consolidation first and we believe that Altice needs to enlarge its fixed footprint in Belgium before being able
to generate sufficient synergies. Hence, we stick to our operational Target Price of EUR 12.6 (based on
DCF) and Reduce recommendation.
45
Target Price: EUR 12.60
40
35
30
25
Analyst(s)
20
15
10
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Bart Jooris, CFA
Bank Degroof
+32 2 287 92 79
[email protected]
Source : Factset
135
Portugal
SMALL & MID CAPS SELECTION
EUR 4.72
Rating Suspended
MOTA ENGIL
MOTA.LS/EGL PL
Market capitalisation: EUR 966m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cov er (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF y ield
Div idend y ield
EPS (adj.)
EPS (adj.) grow th
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low : EUR5.96 / 2.09
12/12
2,326
287
12.4%
171
7.4%
40.7
47.2
190
1,034
2.4
3.6
4.5
11.5%
1.4
1.0
0.4
3.6
6.1
6.4
0.9
15.2%
7.0%
0.24
69.8%
1.67
0.11
115.7%
12/13
12/14e
12/15e
2,375
2,608
2,902
363
376
426
15.3%
14.4%
14.7%
243
256
294
10.2%
9.8%
10.1%
50.5
75.5
94.8
60.0
75.2
95.2
208
243
280
1,136
964
929
2.0
1.7
1.4
3.1
2.6
2.2
4.5
6.3
7.2
14.3%
15.1%
16.6%
1.7
1.6
1.7
1.7
1.7
1.6
0.9
0.8
0.7
5.8
5.4
4.7
8.6
7.9
6.8
13.9
12.8
10.2
2.3
2.4
2.1
-2.0%
13.2%
9.5%
2.6%
4.1%
5.2%
0.31
0.37
0.46
27.1%
18.5%
26.5%
1.85
1.99
2.27
0.12
0.19
0.24
25.7%
-4.3%
-11.0%
Av g. Daily nb traded shares:484,296
Main shareholders: FM - Soc. Cont. 56.4%; Free float 41.5%; Amber UK 2.1%;
Profile: Mota-Engil is a construction company that has been diversifying its activities into fast growing
markets in Sub-Saharan Africa and in Latam. Africa is Mota-Engil’s prevalent value driver, backed by its
continuous revenue growth and, particularly, by the impressive EBITDA margins obtained. Latam is also
proving to be a winning bet, albeit generating less value than Africa due to the lower margins generated.
European activity is expected to show some stabilization from 2014 onwards.
In Africa: (44% of 2013 Turnover, 67% of EBITDA and 79% of EBIT) The company is present in Angola,
Mozambique, Malawi, Zambia and Ghana. Even though the bulk of local Turnover is generated by heavy
construction activities, the company is diversifying its local activities into the concessions, mining, water and
waste management sectors. The African Order Backlog amounted to EUR 1,620m at the end of 2013 (of a
total EUR 3,870m reported).
SWOT Analysis
Strengths
• Growth focused and geographically diversified
• Market leader in Portugal
• Ascendi stake (mostly highway concessions )
Weaknesses
• Exposed to Portugal (difficult economic climate)
• Too small to compete in mature European
markets
• Reduced free-float
• Logistics unit benefits from Portuguese exports’
growth
Opportunities
• Focused on high GDP growth markets
• Ascendi Group data lacks transparency
• Concentration opportunities
• Further economic deterioration in Portugal
• Entering new countries in Latam and Africa
• Order execution problems affecting profitability
• Good know-how of its activities
• Difficulty entering the Brazilean infrastructures
Threats
• Forex risk exposure
All share prices at 19/05/14.
Recommendation: Our rating is currently suspended.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
6.0
30/05/14 Dividend Payment
5.5
5.0
2013
4.5
4.0
29/05/14 Results
3.5
2014Q1
3.0
2.5
27/05/14 Ex Dividend Date
2.0
1.5
1.0
0.5
mar 11
Source : Factset
136
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
2013
MOTA ENGIL SMALL & MID CAPS SELECTION
Analyst(s)
José Mota Freitas, CFA
+351 22 607 09 31
Caixa-Banco de Investimento
[email protected]
Greece
SMALL & MID CAPS SELECTION
EUR 7.71
Accumulate
MOTOR OIL
MORr.AT/MOH GA
Market capitalisation: EUR 854m
Oil & Gas Producers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR10.27 / 6.40
12/12
9,682
270
2.8%
178
1.8%
77.6
104
154
987
1.7
3.7
3.3
10.8%
1.1
1.2
0.2
6.9
10.4
8.8
1.6
26.4%
3.6%
0.94
-17.4%
5.14
0.30
-15.7%
01/13
12/14e
12/15e
9,282
9,519
9,599
185
280
356
2.0%
2.9%
3.7%
91.5
189
267
1.0%
2.0%
2.8%
-4.6
88.4
149
38.9
88.4
149
107
201
240
925
903
844
1.8
1.5
1.3
5.0
3.2
2.4
2.4
3.8
5.2
6.5%
9.1%
12.6%
0.7
0.9
1.3
1.2
1.1
1.0
0.2
0.2
0.2
9.8
6.1
4.6
19.7
9.0
6.2
24.2
9.7
5.7
1.8
1.5
1.3
10.7%
12.2%
14.6%
2.6%
7.8%
9.1%
0.35
0.80
1.35
-62.6%
127.4%
69.0%
4.70
5.30
6.05
0.20
0.60
0.70
-6.0%
-12.4%
-13.1%
Avg. Daily nb traded shares:129,926
Main shareholders: Vardinoyannis group 61.5%; Free float 38.5%;
All share prices at 19/05/14.
Profile: MOH is the second largest refiner in Greece with a strong export activity. Owner of a highly
sophisticated coastal refinery with total nominal capacity of 180 kbd. Additionally, after the acquisition of
Shell’s assets in Greece in 2010, including the operation of c.700 branded petrol stations, which will retain
Shell brand name for at least 5 years, MOH’s total retail market share exceeds 30%, with upward trend.
Finally, the company has recently entered electricity generation (35% stake in 437 MW CCGT power plant in
commercial operation) and LNG trading. The company recently raised EUR 350m through a 5-year bond
issue, significantly improving its debt maturity profile.
SWOT Analysis
Strengths
• High complexity of the refinery, location next to coast
facilitating exports and proximity to many crude oil
•suppliers.
Production geared towards middle distillates capitalizing
on rising deficit in the region.
• Strong export activity (over 50% of production is
exported).
• High dividend yield policy.
Weaknesses
• High sensitivity of earnings to refining margins, oil prices
and EUR/USD exchange rate.
• High working capital needs.
Opportunities
• Room for optimization of product and crude mix.
Threats
• Weak world demand combined with new capacity and
rising US exports retain pressure on Med margins.
• Slower than expected recovery of domestic fuels demand
• Market share gains in retail market
• Entrance in the electricity generation and LNG
• Challenging financing environment in Greece
• Crude oil supply disruptions in the region (Iran, Syria,
Libya) have reduced traditional advantage in crude oil costs.
Recommendation: The combination of mediocre outlook for global refining margins, higher crude costs due
to tightening crude differentials and weak domestic demand indicates a negative operating environment for
MOH in the near-term. Nevertheless, due to its flexibility in production and sales mix and low capex
requirements, we estimate that MOH will continue to generate solid FCF, even at mediocre margins,
retaining a satisfactory dividend policy and at the same time deleveraging balance sheet.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 9.80
t i t re
11
19/06/14 AGM
10
2013
9
8
29/05/14 Results
2014Q1
29/05/14 Results
2014Q1
7
6
5
Vassilis Roumantzis
4
3
Μαρ 11
MOTOR OIL SMALL & MID CAPS SELECTION
Analyst(s)
Ιουν 11
Σεπ 11
Δεκ 11
Μαρ 12
Ιουν 12
Σεπ 12
Δεκ 12
Μαρ 13
Ιουν 13
Σεπ 13
Δεκ 13
Μαρ 14
+30 2108173394
Investment Bank of Greece
[email protected]
Ιουν 14
Source : Factset
137
France
SMALL & MID CAPS SELECTION
EUR 65.14
Hold
NATUREX
NATU.PA/NRX FP
Market capitalisation: EUR 541m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR65.90 / 55.40
12/12
300
49.6
16.6%
35.5
11.8%
18.3
18.3
32.5
119
0.5
2.4
10.5
6.4%
0.8
1.4
1.9
11.3
15.8
24.7
1.7
-4.1%
0.2%
2.31
2.8%
33.49
0.12
13.9%
12/13
321
53.0
16.5%
35.3
11.0%
16.8
16.8
34.5
152
0.6
2.9
9.7
5.8%
0.7
1.4
1.9
11.4
17.1
27.4
1.6
-6.5%
0.2%
2.12
-8.1%
35.37
0.11
9.9%
12/14e
12/15e
354
402
60.3
70.5
17.0%
17.5%
41.2
49.9
11.6%
12.4%
22.3
27.9
22.3
27.9
41.4
48.5
155
144
0.4
0.4
2.6
2.0
9.7
11.5
5.6%
6.6%
0.7
0.8
1.3
1.4
2.0
1.8
11.5
10.3
16.9
14.5
24.9
21.3
1.5
1.5
0.5%
2.1%
0.2%
0.2%
2.62
3.07
23.3%
17.0%
43.26
43.39
0.13
0.15
3.2%
2.1%
Avg. Daily nb traded shares:5,154
Main shareholders: Flottant 52.0% (62.0%); SGD 21.0% (25.3%); Groupe Natraceutical 20.7% (3.2%);
CM-CIC invest 3.2% (5.6%); Ed Rotschild IP 3.1% (3.9%);
All share prices at 20/05/14.
Profile: Naturex is a leading producer of natural extracts for the flavouring, food processing, nutraceutical
and cosmetics industries.
SWOT Analysis
Strengths
• Among the leaders of the industry, with a full range of
products and applications,
• A large, diversified, locally established production tool,
Weaknesses
• Financial performances in the low range of the industry,
especially in terms of cash flow generation,
• Still a weak position on some fast growing segments like
colours
• Experience in acquisitions, which is one of the KFS of the
group's strategy
Opportunities
• Increasing use of natural flavours and ingredients in food
industry as well as cosmetics
• A still fragmented industry
Threats
• Bargaining power against the largest clients,
• Weaker growth in Europe.
• Concentration accelerate at the top of the industry, led by
the large chemical groups
Recommendation: Naturex has been reorganizing over the past year. This programme was initiated jointly
by the management and the new shareholders, in order to lift operating performances to the industry
standards. As a result, the operating margin is slightly under pressure, whereas organic top line growth is
back in the 6-7% range versus 8-10% previously. The company is focusing on its best practices and has put
aside its aggressive acquisition strategy for now. But the main challenge could, however, come from a faster
than expected change in the industry structure, under the impetus of chemical players accelerating the
consolidation of the natural extracts producers, and therefore weakening the position of Naturex. That could
lead management to reconsider the question of critical size and, consequently, their strategic priorities.
Target Price: EUR 65.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
75
25/07/14 Trading Update
70
65
26/06/14 AGM
60
55
26/05/14 Results
50
45
40
Mar 11
Source : Factset
138
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
2014Q2
2013
2014Q1
NATUREX SMALL & MID CAPS SELECTION
Analyst(s)
Jean-Pascal Brivady
+33 4 78 92 02 25
CM - CIC Securities
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 32.02
Hold
NEDAP
NEDP.AS/NEDAP NA
Market capitalisation: EUR 214m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR32.95 / 27.67
12/12
172
25.6
14.9%
16.4
9.5%
13.5
13.5
23.5
31.3
0.5
1.2
39.2
11.0%
1.3
2.1
1.3
8.8
13.7
14.5
3.3
6.5%
5.2%
2.01
22.8%
8.83
1.51
0.7%
12/13
174
21.8
12.5%
11.8
6.8%
9.8
9.8
16.3
33.7
0.6
1.5
37.0
7.9%
0.9
2.2
1.3
10.6
19.6
20.5
3.7
3.5%
3.4%
1.46
-27.4%
8.00
1.10
10.4%
12/14e
12/15e
179
188
24.0
27.5
13.4%
14.6%
13.7
16.6
7.6%
8.8%
11.5
13.8
11.5
13.8
21.8
24.7
28.4
24.0
0.5
0.4
1.2
0.9
61.7
95.0
9.3%
11.1%
1.1
1.3
2.3
2.2
1.3
1.2
9.9
8.5
17.5
14.1
18.7
15.5
3.7
3.4
5.9%
6.1%
4.0%
4.8%
1.72
2.07
17.3%
20.3%
8.62
9.39
1.29
1.55
2.6%
-0.1%
Avg. Daily nb traded shares:3,658
Profile: Nedap describes itself as a manufacturer of intelligent technological solutions for relevant themes
such as energy, water, agri, healthcare and security. The company’s products and technology are used in
applications for cattle farming, access control, security management, shrink management, library
solutions, water purification, energy efficiency, and the recognition, identification and management of
vehicles and drivers. It also offers a planning and registration system for healthcare professionals.
The common denominator between Nedap’s products is technology, with most of its products being based
on Radio Frequency Identification (RFID) technology.
SWOT Analysis
Strengths
• Highly innovative company
• Flexible organisation structure, adapting quickly to new
markets or market circumstances
• Highly diversified product portfolio
Weaknesses
• The company has project-based work with a short order
book
• Highly sensitive for sales changes due to high gross
margins
• Relatively small company with limited resources
• Solid financial position
Opportunities
• Internationalisation by using partners and web-based
technology
• Increase of recurring business
• Further transformation into a software oriented and
market driven company
Threats
• Competitors going for market share
• Increase of required R&D spending to continue
development of new products
• Availability of educated and skilled personnel
• High dependence on RF technology
Main shareholders: Free float 28.3%; Cross Options 15.1%; Delta Lloyd Deelnemingen 13.5%;
Delta Lloyd 12.6%; ASR 8.2%; Kempen 7.1%; Darlin 5.2%; TKH 5.1%; Decico 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
34
32
Recommendation: Nedap has transformed from a pure technology player into a much more market
oriented organisation with a larger sales force and partner network. With continued internationalisation we
expect that the next step in the company’s strategy is scalability which will further improve the company’s
added value per employee in the next few years.
Nedap is showing improving revenue trends following the slow growth in 2013. High investments made
over the last 12 months could result in net profit growth lagging sales growth in 1H14. These investments
are expected to pay off in the longer term and the improved revenue trends will drive margin improvement.
Target Price: EUR 30.00
30
28
26
24
22
20
18
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
NEDAP SMALL & MID CAPS SELECTION
Analyst(s)
Johan van den Hooven
+312 0 5508518
SNS Securities
[email protected]
139
France
SMALL & MID CAPS SELECTION
EUR 59.94
Hold
NEOPOST
NPOS.PA/NEO FP
Market capitalisation: EUR 2004m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR66.61 / 48.65
01/12
1,003
300
29.9%
237
23.6%
154
154
239
796
1.4
2.7
10.9
11.8%
2.1
1.8
2.6
8.7
11.0
11.8
3.2
9.5%
7.2%
4.59
-4.8%
16.93
3.90
12.5%
01/13
01/14e
01/15e
1,070
1,096
1,104
323
331
324
30.2%
30.2%
29.3%
256
255
245
23.9%
23.2%
22.2%
161
162
146
161
162
146
233
237
225
964
949
964
1.6
1.5
1.5
3.0
2.9
3.0
10.6
8.8
9.4
10.8%
10.5%
9.8%
2.0
1.8
1.7
1.5
1.9
1.8
2.2
2.8
2.7
7.4
9.3
9.2
9.3
12.0
12.2
8.7
13.0
13.7
2.3
3.3
3.0
11.6%
9.1%
7.6%
6.5%
6.6%
6.6%
4.80
4.84
4.37
4.6%
0.9%
-9.8%
18.43
19.32
19.74
3.90
3.95
3.95
5.2%
-7.8%
3.8%
Avg. Daily nb traded shares:81,214
Main shareholders: Free float 74.5%; First Eagle Investment 9.5%; Mondrian 5.7%;
Profile: Europe’s biggest and the world’s second-biggest supplier of mail-processing equipment. Neopost is
positioned in two main markets: franking systems (2/3 of consolidated sales) and document management
systems and logistics (1/3). Sales split by country: 39% in North America; 21% in France; 32% in Europe,
excluding France; 7% in the rest of the world. Its main rival is market leader Pitney Bowes (PBI US) which
holds key positions in North America, a market on which Neopost, as a challenger, has residual growth
potential.
SWOT Analysis
Strengths
• Markets have been turned into cartels by national postal
services
• Effective R&D, new products on a regular basis
• Very high, durable dividend yield
Opportunities
• Development of cross-selling, given that only 10% of
Neopost's clients are equipped with both of its two main
(franking
machines and
inserting
•products
Consolidation
of distributors
andenvelope
their margins
• US market 80% controlled by Pitney Bowes, positioned on
the highest-margin segments
• Renewal of Pitney Bowes' product range, which should
limit the competitive advantage of Neopost (new products
launched in 2012)
Threats
• Revenue exposure to the dollar (40% of sales)
• Crash in bond market, as the defensive high dividend
yield story is linked to an arbitrage against interest rates
Recommendation: Neopost is currently and slowly gaining market share in North America. The group
expects growth in its service offer to bring about both organic growth and higher profits in 204-16, but at a
low level (0-2%). We believe that the average long-yield will exceed 7% based on changes in share price
and dividends. Lastly, Neopost recently confirmed it is interested in its embattled German rival, Francotyp
Postalia. Buy recommendation as we believe that the dividend is solid. Also short positions on the stock are
really high at around 13% of existing shares (according to Bloomberg and AMF).
Marathon 5.7%; Blackrock 4.7%;
All share prices at 19/05/14.
Target Price: EUR 62.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Weaknesses
• Risky diversifications?
titre
70
01/07/14 AGM
65
60
27/05/14 Trading Update
55
50
40
35
Mar 11
140
2014Q1
NEOPOST SMALL & MID CAPS SELECTION
Analyst(s)
Christian Auzanneau
45
Source : Factset
2013
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+33 4 78 92 01 85
CM - CIC Securities
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 41.80
Reduce
NEXANS
NEXS.PA/NEX FP
Market capitalisation: EUR 1756m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR43.14 / 30.38
12/12
4,872
292
6.0%
143
2.9%
28.0
46.0
224
606
0.3
2.1
2.6
4.3%
0.5
0.6
0.4
6.4
13.1
19.1
0.5
4.3%
2.7%
1.56
+chg
62.35
1.14
21.8%
12/13e
12/14e
12/15e
4,689
4,877
5,126
-37.0
280
380
nm
5.7%
7.4%
-182
129
226
nm
2.6%
4.4%
-333
20.1
106
-200
60.1
141
181
179
328
337
345
180
0.2
0.2
0.1
-9.1
1.2
0.5
nm
2.8
4.2
3.4%
5.3%
7.8%
0.4
0.6
1.0
0.8
1.0
0.5
0.5
nm
9.3
nm
20.3
nm
29.2
12.4
1.0
1.1
1.1
4.4%
-0.5%
9.7%
0.0%
0.4%
1.9%
-4.76
1.43
3.36
-chg
+chg
135.0%
36.88
37.36
39.72
0.00
0.17
0.78
28.0%
10.4%
7.4%
Avg. Daily nb traded shares:195,957
Main shareholders: Free float 65.4%; Madeco 25.8%; French State Sovereign Fund (FSI) 5.6%;
Employees 3.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
65
25/07/14 Results
60
Profile: Worldwide leader in the cable industry, Nexans brings solutions to clients regarding infrastructures
(energy and telecoms), industry and building cables. Nexans derives more than 55% of its sales from
Europe, and has roughly 100 production sites spread across 39 countries. Energy-related business accounts
for more than 80% of sales. This covers infrastructure cables (high voltage), industrial cables targeting the
oil and renewable energy markets, and low- and medium-voltage cables for construction markets. There are
many drivers in the energy infrastructure market: modernisation of power systems (saturation issues),
urbanisation and electrification in emerging markets, development of renewable energy sources (scattered
and intermittent) and the interconnection of national grids (creating an integrated European market).
SWOT Analysis
STRENGTHS
 Repositioning in market segments with highadded value (energy infrastructure)
 Industry leadership position in high-voltage
cables, where growth and margins are high
 Strong presence in emerging markets, which
provide 34% of group revenue
OPPORTUNITIES
 Urbanisation/electrification in emerging markets
 Upgrading of electrical networks (renovation,
burying lines), connecting of new renewable
energy sources
 European electricity interconnection needs
WEAKNESSES
 Balance sheet impacted by changes in commodity
prices (copper, aluminium)
 Western Europe still accounts for more than 60% of
group revenue, weak presence in China.
 The cost structure (WCR, R&D, SG&A) still needs
improvement
THREATS
 Cyclical nature of the cable industry in some
segments (construction, cars, aerospace)
 Competition from emerging players (China, India),
so far limited to generic products
 Investigations
underway
for
distortion
of
competition in high-voltage cables
Recommendation: Shareholders at the AGM voted for Fréderic Vincent to remain a Director of Nexans.
The Board of Directors, decided to separate the functions of Chairman (Fréderic Vincent) and CEO (Arnaud
Poupart Lafarge). The separation of powers, requested for several months now by several US and UK
funds-shareholders and independent shareholder advisory bodies, leaves Arnaud Poupart-Lafarge as the
sole architect of the group’s short-term strategy, notably the shaping of the restructuring plan. This move will
allay investor concerns on this subject. A request has been made by Invexans (28% shareholder) to
terminate its 2011 agreement (modified in 2012). In order to reassure minority shareholders, Invexans stated
it has no intention of taking control of Nexans, or increasing its stake to over 30%, or selling all or part of its
stake. Given the company’s current valuation, we believe that the benefits of the reorganisation are already
priced in to a large extent (the goal is to lift operating profit from EUR141m in 2013 to EUR290m in 2015).
Our intrinsic value method, which is based on an approach using Nexans’ normalised results, points to a
EUR30.8 valuation.
2014H1
55
50
Target Price: EUR 31.00
45
40
35
30
Analyst(s)
25
20
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Ari Agopyan
CM - CIC Securities
+33 1 45 96 85 80
[email protected]
141
Spain
SMALL & MID CAPS SELECTION
EUR 4.32
Accumulate
NH HOTEL GROUP
NHH.MC/NHH SM
Market capitalisation: EUR 1513m
Hotels, Travel & Tourism
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.17 / 2.53
12/12
1,310
77.9
5.9%
-34.8
nm
-292
-66.7
132
996
1.0
12.8
1.4
0.2%
0.0
0.8
1.3
21.9
nm
nm
0.8
27.6%
0.0%
-0.27
-chg
3.38
0.00
58.2%
12/13
12/14e
12/15e
1,281
1,311
1,370
143
139
163
11.2%
10.6%
11.9%
49.0
46.2
69.0
3.8%
3.5%
5.0%
-39.8
-6.8
12.7
-44.1
-6.8
12.7
55.2
86.6
107
745
673
720
0.6
0.6
0.6
5.2
4.9
4.4
2.4
2.6
3.3
1.1%
1.9%
2.7%
0.1
0.2
0.4
1.1
1.2
1.2
1.7
1.7
1.6
14.9
15.7
13.6
43.4
47.1
32.2
nm
nm
nm
1.2
1.3
1.3
-0.7%
-3.7%
-3.3%
0.0%
0.0%
0.0%
-0.15
-0.02
0.04
+chg
+chg
+chg
3.46
3.20
3.24
0.00
0.00
0.00
6.0%
-2.0%
-4.3%
Avg. Daily nb traded shares:846,523
Main shareholders: Free float 34.0%; HNA 24.1%; Hesperia 20.1%;
Banca Intesa 4.5%;
Profile: NH Hotel Group occupies the 23rd position worldwide and fifth in Europe (88% of its total rooms are
located within Europe). It is a hotel chain focused on business travellers (91% of the rooms are urban), with
379 hotels and 58,195 rooms (at December 2013) within the midscale category (3-4*). Currently its major
business comes from Benelux and Central Europe (jointly 51% of its revenues and 57% of its EBITDA). By
country revenue breakdown: 23% Spain, 22% Benelux, 15% Italy, 28% Central Europe and 6% LatAm.
According to the contract type: 23% of the rooms are owned, 53% leased (mainly in Germany & Italy) and
24% managed. During 2013 relevant financial and shareholder restructuration’s took place. Regarding the
former, several disposals were accomplished giving entrance to a more stable shareholders. HNA, Hesperia
and Banca Intesa currently hold 48.6% of the capital, although the latter will increase its stake after a capital
increase in the s/t. Concerning the financial situation, a relevant refining policy has enabled to count on a
more comfortable financial calendar (no relevant maturities until 2017) at a similar cost (5.15%).
Nonetheless an additional asset disposal is required (at least of EUR 125m) to complete de asset
repositioning plan currently in force (capex needs 2014-15 will surpass EUR 100m/year). The aim is to
reduce the number of hotels by cancelling non-strategic and non-profitable leasing contracts & economy
category premises; as well as rising ADR (especially in Spain, Italy and Benelux).
SWOT Analysis
Strengths
• Leader in urban segments in Italy, Spain,
Netherlands, Belgium & Germany.
• Entrance of long term shareholders
Weaknesses
• Poor outlook real estate business (Sotogrande)
• Successful refinancing policy
• Good track record in asset sales
Opportunities
• Ambitiousasset repositioning plan
• Operating leverage accomplished
• Low resort presence (Hesperia brand)
• ADR and operating margins below peak cycle
Threats
• Slow recovery Spanish & Italian urban segments
• Strong asset concentration in Spain & Italy (c.
50%)
• High exposure to rental hotels
• High exposure to domestic clients
• Low possibilities of relevant expansion in the s/t
All share prices at 19/05/14.
• Mid term expansion with HNA (China)
• Asset portfolio valued EUR 1.4-1.6bn
PRICE (SHORT & LONG AVERAGE)
Recommendation: Accumulate. Year 2014 will be a key in operating terms awaiting for the delivery of the
asset repositioning plan and obtaining additional financial muscle to accomplish intense investments. On the
negative after the AGM a capital increase will take place and in the s/t Hesperia might divest 8% stake.
titre
6.5
6.0
FINANCIAL CALENDAR (Source: Company)
26/06 AGM
Target Price: EUR 5.70
5.5
5.0
4.5
4.0
Analyst(s)
3.5
Sonia Ruiz De Garibay
3.0
2.5
2.0
1.5
Mar 11
Source : Factset
142
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
BEKA Finance
+34 91 436 7841
[email protected]
Portugal
SMALL & MID CAPS SELECTION
EUR 3.86
Accumulate
NOVABASE
NBA.LS/NBA PL
Market capitalisation: EUR 121m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cov er (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF y ield
Div idend y ield
EPS (adj.)
EPS (adj.) grow th
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low : EUR3.97 / 2.31
12/12
212
18.1
8.5%
12.3
5.8%
7.9
6.6
15.5
-33.7
-0.3
-1.9
nm
10.3%
1.1
0.5
0.2
2.4
3.5
11.0
0.7
16.9%
1.3%
0.21
177.7%
3.19
0.03
33.3%
12/13
12/14e
12/15e
217
217
233
14.9
15.5
18.3
6.9%
7.1%
7.8%
9.1
9.4
11.7
4.2%
4.3%
5.0%
7.5
5.3
6.7
4.2
4.0
5.3
15.0
13.5
15.6
-17.7
-26.1
-29.7
-0.2
-0.3
-0.3
-1.2
-1.7
-1.6
25.9
24.5
34.3
7.9%
9.0%
10.9%
0.9
1.0
1.2
0.9
1.5
1.4
0.3
0.5
0.5
4.9
7.1
5.9
7.9
11.7
9.2
19.5
30.4
22.7
0.9
1.4
1.3
15.6%
12.3%
5.5%
15.5%
5.2%
2.6%
0.13
0.13
0.17
-36.1%
-5.1%
34.1%
2.87
2.84
2.95
0.60
0.20
0.10
35.4%
7.2%
-0.3%
Av g. Daily nb traded shares:4,499
Main shareholders: Management 42.1% (42.9%); Free float 30.0% (30.6%); Partbleu, SGPS 10.1% (10.3%);
Grupo BES 5.9% (6.0%); F. F. Santos 5.0% (5.1%); Santander A. M. 4.9% (5.0%); Treas. Stock 1.9%;
Profile: Novabase is one of the leading IT companies in the Portuguese market. Created in 1989 and listed
since 2000, its activity is divided into three segments: (i) Business Solutions, (ii) Infrastructures and
Managed Services and (iii) Novabase Capital. Novabase is a sound and flexible company with a very
focused and ambitious management that shows very strong governance and a strong will to increase its
market awareness.
SWOT Analysis
Strengths
• One of the largest players in Portugal's IT market
Weaknesses
• Reduced stock market liquidity
• Presents transparent accounts
• Low market cap
• Focused management
• Solid balance sheet
Opportunities
• International expansion – namely in Africa
Threats
• Portuguese economic woes
• M&A activity increase in the IT sector
• International peers’ competition
Recommendation: Novabase’s guidance for 2014 points to reaching EUR 220m in Turnover, EBITDA
between EUR 14m and EUR 17m and 35% foreign Sales. The company is stepping up its
internationalization effort, seeking new sources of growth. Novabase has recently (March) changed its
payout policy by indicating a lower 30% of Net Profit limit and leaving the total dividend amount more
dependent on the effective cash generation during the period (and future needs).
We have an Accumulate recommendation on the stock.
All share prices at 19/05/14.
Target Price: EUR 4.40
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
30/07/14 Results
2014Q2
NOVABASE SMALL & MID CAPS SELECTION
Analyst(s)
30/07/14 Results
2014Q2
José Mota Freitas, CFA
titre
4.0
3.5
3.0
2.5
05/06/14 Dividend Payment
2013
02/06/14 Ex Dividend Date
2013
+351 22 607 09 31
Caixa-Banco de Investimento
[email protected]
2.0
1.5
mar 11
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Source : Factset
143
Netherlands
SMALL & MID CAPS SELECTION
EUR 33.01
Hold
NUTRECO
NUTR.AS/NUO NA
Market capitalisation: EUR 2267m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR39.19 / 30.50
12/12
5,229
307
5.9%
235
4.5%
177
157
222
262
0.3
0.9
11.6
17.3%
2.4
2.3
0.5
8.0
10.5
14.2
2.3
2.7%
3.2%
2.27
26.2%
13.98
1.03
0.6%
12/13
12/14e
12/15e
3,867
3,975
4,135
251
265
278
6.5%
6.7%
6.7%
195
209
221
5.0%
5.3%
5.4%
150
157
166
127
134
143
195
189
199
352
349
333
0.4
0.3
0.3
1.4
1.3
1.2
8.6
9.4
9.5
12.9%
12.8%
12.9%
1.8
1.8
1.8
2.4
2.1
2.0
0.7
0.7
0.6
11.2
9.8
9.3
14.4
12.4
11.6
19.5
16.9
15.9
2.6
2.3
2.1
2.3%
4.0%
4.4%
3.0%
3.0%
3.0%
1.85
1.96
2.08
-18.3%
5.8%
6.3%
13.70
14.63
15.72
1.00
1.00
1.00
-7.2%
1.2%
3.0%
Avg. Daily nb traded shares:142,285
Main shareholders: Free float 90.0%; ING Group 10.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
40
38
Profile: Nutreco is internationally active in animal nutrition (premix/additives) and fish feed in various
species and in various countries worldwide. Additionally, it produces and distributes compound feed in
Spain/Portugal and is a processor of poultry and pork in Spain. Nutreco is the global market leader in fish
feed, in particular in salmon feed in which it has an estimated market share of 35%. Nutreco plans to divest
its Spanish/Portuguese businesses in compound feed and meat processing.
SWOT Analysis
Strengths
• Market leadership in fish feed, in particular salmon feed
• Strong balance sheet
Weaknesses
• Exposure to livestock makes Nutreco vulnerable to animal
diseases
• Volatility of Spanish poultry operations
• Sustainability approach
• Declining livestock staples Western Europe
• Many management changes
Opportunities
• Growth in fish demand and aquaculture drives growth in
fish feed
• Growth of protein demand in emerging markets
Threats
• Price increases of raw materials
• Consolidation potential Animal Nutrition
• Will investments in shrimp feed bear fruit?
• Take-over target
• Marine Harvest starts salmon feed factory
• Consolidation in salmon farming industry
Recommendation: We rate Nutreco shares Hold with a target price of EUR 33. Our recommendation is
based on 1) Nutreco operates in attractive markets with underlying volume growth prospects of c. 5% in fish
feed and 3% in animal nutrition due to megatrends in demographics/increased protein intake. 2) Nutreco has
invested substantially in R&D and has created strong conversion rates/improved formulas in salmon feed. In
premix/specialty feed, Nutreco invested in application centres. 3) Nutreco has a good focus on sustainability.
4) However, the company has some transformational issues. The divestment process of the Iberian
activities, the roll-out of the UnITe platform in Animal Nutrition, and the MicroBalance concept in the
fragmented shrimp sector. The valuation range for Nutreco is €27 (DCF including discount) and €40 (breakup). Although 1H14E results will be strong based on high water temperatures YoY in Norway, the issues will
hold back the share price. Our TP is based on a 50/50 weight for DCF and break-up/bid.
36
Target Price: EUR 33.00
34
32
30
28
26
Analyst(s)
24
22
20
Mar 11
Source : Factset
144
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Gerard Rijk
SNS Securities
+ 31 (0)20 550 8572
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 23.41
Hold
OLVI
OLVAS.HE/OLVAS FH
Market capitalisation: EUR 486m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR29.04 / 23.10
12/12
312
52.4
16.8%
30.5
9.8%
25.7
25.7
46.2
52.8
0.4
1.0
high
11.7%
1.8
2.3
1.5
8.7
15.0
15.9
2.8
1.4%
2.5%
1.24
95.6%
7.10
0.50
-3.9%
12/13
327
56.8
17.4%
43.2
13.2%
33.5
33.5
49.2
45.3
0.3
0.8
high
15.3%
2.4
2.9
1.9
11.2
14.7
17.7
3.5
2.7%
2.8%
1.61
30.6%
8.26
0.65
-12.6%
12/14e
12/15e
322
341
56.1
62.2
17.4%
18.3%
41.7
46.7
12.9%
13.7%
35.4
39.5
35.4
39.5
51.0
56.6
38.6
30.9
0.2
0.1
0.7
0.5
high
high
13.8%
14.4%
2.1
2.2
2.2
2.1
1.6
1.5
9.3
8.3
12.5
11.0
13.7
12.3
2.5
2.2
4.4%
5.1%
3.2%
3.4%
1.70
1.90
5.5%
11.7%
9.32
10.47
0.75
0.80
-17.4%
-7.6%
Avg. Daily nb traded shares:2,879
Profile: A beer and soft drinks company, Olvi makes over 30% of its sales in Finland, approximately 50% in
the Baltic countries and almost 20% in Belarus. The company's main brands include the flagship brand Olvi
as well as Sandels, A. Le Coq, Cēsu, Volfas Engelman and Lidskoe. Olvi supplies beer and soft drinks
primarily to retailers.
SWOT Analysis
Strengths
• Brewing know-how
Weaknesses
• Downbeat, mature Finnish market
• Strong track record of above average growth and
profitability
• Light organisation and able management
• Olvi Foundation's (controlling) stake not likely to change
hands
• Innovative R&D
Opportunities
• Further growth in Belarus
Threats
• Intensifying competition
• Expansion into new emerging markets
• Tightening regulation
• New brand and product extensions
• Stricter excise taxation
• Belarusian economy's structural problems
Main shareholders: Free float 78.2%; Olvi Foundation 15.7%; Hortling Heikki 5.1%;
Ilmarinen Mutual Pension Insurance Company 1.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
32
14/08/14 Results
30
2014H1
Recommendation: Olvi's earnings momentum has been hit by the strong decline in Angry Birds soft drink
sales and excise tax hikes in Finland. This negative earnings momentum and the potential guidance
downgrade are essential risks for the share in the short term, in our view. Yet the share price decline has
moderated the company’s 2015 valuation to an acceptable level when taking into account company's good
track record in delivering solid earnings growth. The main risk for the investment case is that the harsh
economic situation in Belarus escalates into a balance of payments crisis that would hurt the share price.
28
Target Price: EUR 26.00
26
24
22
20
18
Analyst(s)
16
14
12
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Niclas Catani
Pohjola
+358 10 252 8780
[email protected]
Source : Factset
145
Netherlands
SMALL & MID CAPS SELECTION
EUR 1.89
Hold
ORDINA
ORDN.AS/ORDI NA
Market capitalisation: EUR 174m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.16 / 1.19
12/12
401
13.6
3.4%
3.0
0.8%
0.4
8.1
11.0
9.8
0.0
0.7
9.0
-0.8%
-0.1
0.5
0.3
8.3
37.4
12.8
0.5
3.3%
0.0%
0.09
29.9%
2.25
0.00
41.7%
12/13
12/14e
12/15e
377
385
400
8.8
18.2
27.8
2.3%
4.7%
6.9%
1.8
12.1
21.5
0.5%
3.1%
5.4%
0.9
8.7
16.4
8.4
12.2
17.3
16.3
14.8
21.9
2.2
-7.0
-19.6
0.0
0.0
-0.1
0.3
-0.4
-0.7
5.9
36.6
nm
-7.1%
-12.0%
-29.4%
-0.6
-1.1
-2.7
1.1
1.0
0.9
0.5
0.4
0.4
20.1
9.2
5.6
99.4
13.8
7.2
20.8
14.2
10.1
1.2
1.1
1.1
7.1%
5.3%
9.0%
0.0%
1.7%
3.8%
0.09
0.13
0.19
4.0%
44.9%
41.6%
1.55
1.64
1.78
0.00
0.03
0.07
4.8%
-8.2%
-7.0%
Avg. Daily nb traded shares:304,395
Main shareholders: Project Holland 9.3%; Lazard Frères Gestion 5.1%; Invesco 5.1%;
Todlin 5.0%; Deutsche Bank 3.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Ordina is a top-10 IT services player in the Netherlands, with a particularly strong position in the
Finance and Public sectors (about 70% of total revenues). The other 30% of revenues comes from the
Industry segment. Key clients include the Ministries of Home Affairs, Infrastructure and Justice, ING,
Rabobank and KPN, with the top-10 customers delivering around 45% of total revenues. The Belgian
activities account for about 18% of total revenues.
SWOT Analysis
Strengths
• Blue chip client list
Weaknesses
• Relatively high mix of non-recurring ‘time & material’
business
• Fully focused on Benelux market, which has proven to be
extremely cyclical
• Scale in local market
• Skills in managing the core IT services business
Opportunities
• Growth in outsourcing market
• Cyclical recovery fueling renewed growth
Threats
• Dutch Public sector spending under pressure due to
political uncertainty and budget cuts
• IT services business is cyclical, impact economy
• Sector consolidation
• Competing with strong international players
Recommendation: Revenues in the first quarter showed a decline of 0.4%, which reflects a slowdown
compared to the last two quarters in which Ordina showed positive growth (3Q13 +1.9%; 4Q13 +0.8%).
EBITDA margin improved 250bps in 1Q14, fully driven by cost savings. The number of fte was further
reduced by 39 to 2,879. Last year’s cost savings actions were mainly focused on reducing the number of
indirect personnel which declined 7.5% to 335 fte in the first quarter. Ordina’s financial position remains
sound with net debt / EBITDA currently at 0.7 and improving.
Valued at an EV/EBITDA of 8.5 for 2014, the improved outlook and profitability seems to be priced in. We do
not see short term triggers for further multiple expansions. We have a Hold rating.
t i t re
3.5
Target Price: EUR 2.00
3.0
2.5
2.0
ORDINA SMALL & MID CAPS SELECTION
Analyst(s)
1.5
1.0
0.5
Mar 11
Source : Factset
146
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Johan van den Hooven
+312 0 5508518
SNS Securities
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 2.33
Hold
ORIOLA-KD
OKDBV.HE/OKDBV FH
Market capitalisation: EUR 352m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.78 / 2.18
12/12
2,474
37.0
1.5%
27.7
1.1%
18.0
18.9
27.3
6.6
0.0
0.2
6.9
6.4%
0.8
1.0
0.1
9.3
12.4
17.9
1.1
4.7%
4.0%
0.12
-73.3%
2.08
0.09
-2.1%
12/13
12/14e
12/15e
2,599
2,580
2,700
50.1
61.0
84.3
1.9%
2.4%
3.1%
29.0
34.6
59.3
1.1%
1.3%
2.2%
13.7
16.9
36.4
20.9
17.7
34.4
34.8
43.3
59.4
182
126
55.9
0.7
0.4
0.1
3.6
2.1
0.7
3.7
4.6
5.9
5.9%
5.6%
9.5%
0.8
0.7
1.2
1.2
1.0
0.8
0.2
0.2
0.2
11.3
7.9
4.9
19.6
13.8
6.9
18.5
19.9
10.3
1.4
1.1
0.9
-42.4%
0.8%
10.8%
0.0%
2.1%
4.3%
0.14
0.12
0.23
10.5%
-15.3%
94.4%
1.84
2.21
2.65
0.00
0.05
0.10
-7.2%
-2.1%
0.0%
Avg. Daily nb traded shares:46,055
Profile: Oriola-KD is a leading pharmaceutical retail and wholesale company in the Nordic countries and
Russia. Its operating segments are Pharmaceutical Trade Finland and the Baltics; Pharmaceutical Trade
Sweden; and Pharmaceutical Trade Russia.
SWOT Analysis
Strengths
• Attractive growth strategy implemented with
determination. Streamlining has been made and the focus
on core operations
•is Healthcare
is generally regarded as a stable and defensive
sector
• High barriers to entry in wholesale trade
Weaknesses
• Unhealthy competition in Russian wholesale, significant
consolidation needed in Russia
• Regulation changes in Russia tend to be fast and
unpredictable, market visibility is extremely poor
• Weak business visibility has resulted in several profit
warnings
Opportunities
• Liberalisation of the Finnish pharmacy market would give
rise to an attractive growth opportunity
• The still underdeveloped Russian market offers long-term
growth potential
• Target for a European buyer, but the difference in the
voting rights of share series makes this difficult
Threats
• Small market share in Russia keeps the margin
low/negative
• Situation in Russia enhances only if some of the
businesses go bust
• Future of wholesale trade in general (has to be supported
by retail sales channel)
Recommendation: The company fares well in Finland, with margins between 4.5% and 5.0%, and the
future also looks bright in Sweden, where the company has gained considerable market share in both
wholesale and retail trade. The acquisition of Medstop in Sweden was costly but a necessary move for the
long 3.4%;
term. The financial worries concentrate on Russia, which is having yet another poor year. Automation
Main shareholders: Free float 100.0%; Keskinäinen Työeläkevakuutusyhtiö Varma 4.2%; Ilmarinen Keskinäinen Eläkevakuutusyhtiö
has been increased and the new main logistics centre will be opened in Moscow in 2015. These measures
Keskinäinen Eläkevakuutusyhtiö Etera 2.8%;
should finally raise Russia into the black, but market visibility remains foggy.
All share prices at 19/05/14.
Target Price: EUR 2.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.0
2.8
2.6
ORIOLA-KD SMALL & MID CAPS SELECTION
Analyst(s)
Kimmo Stenvall
2.4
+358 10 252 4561
Pohjola
[email protected]
2.2
2.0
1.8
1.6
1.4
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
147
France
SMALL & MID CAPS SELECTION
EUR 51.33
Buy
ORPEA
ORP.PA/ORP FP
Market capitalisation: EUR 2848m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR53.67 / 34.81
12/12
1,429
258
18.0%
194
13.6%
97.0
97.0
212
1,963
1.7
7.6
3.5
3.2%
0.6
0.9
2.6
14.5
19.3
18.3
1.5
4.0%
1.2%
1.83
20.8%
22.31
0.60
46.2%
12/13e
12/14e
12/15e
1,608
1,949
2,169
299
347
384
18.6%
17.8%
17.7%
227
265
294
14.1%
13.6%
13.5%
116
122
133
116
122
133
188
204
223
1,767
1,864
1,852
1.3
1.3
1.2
5.9
5.4
4.8
3.3
4.1
4.5
3.7%
4.1%
4.5%
0.6
0.7
0.8
1.0
1.1
1.1
2.6
2.4
2.2
13.8
13.6
12.3
18.1
17.9
16.1
20.1
23.3
21.4
1.7
2.0
1.8
8.0%
3.9%
3.6%
1.4%
1.5%
1.6%
2.10
2.20
2.40
14.7%
4.7%
9.0%
24.64
26.14
27.79
0.70
0.75
0.80
23.9%
17.1%
7.8%
Avg. Daily nb traded shares:79,791
Main shareholders: Free float 64.5% (64.6%); CPPIB 15.0% (12.0%); Marian Family 7.6% (12.8%);
Profile: Specialised since 1989 in permanent dependence (extended care for seniors and the very elderly
with growing needs for medication) and temporary dependence (post-operative and psychiatric care), with
more than 520 establishments. One-fifth of beds are under construction or being restructured, which will
provide upside in 2014-16. The targeted population is very solvent and consolidation of the commercial
private sector (22% of the overall offer) still holds opportunities given its fragmented nature (50% of supply
excluding major groups) and the non-profit making private sector (78% of the French global offer) whose
investment capacity is limited given the need to standardise quality and rehabilitation standards.
SWOT Analysis
Strengths
• Sharp increase in demand for the over 85 age bracket
Weaknesses
• Debt is huge.
• Limited offering in quantitative & qualitative terms
• . but finances real estate only
• Close links with the health ministry on which
authorisations depend
• Government to broaden offering
• Valuation multiples are high.
Opportunities
• Capacity for sector consolidation (capacity for additional
debt >EUR200m)
• Transfer of activity from non-lucrative private sector to
commercial private sector
• Increase in quality specifications which is good news for
main sector players
• Pressure on solvency of end clients
Threats
• Crash in French real estate prices
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
Target Price: EUR 50.00
titre
55
• Strong de-rating of stock is possible as growth will slow.
but will generate high leverage on stock price valuation
(growing EBITDA, stabilizing net debt).
Recommendation: 1) debt is hedged against an increase in rates and is covered by assets approaching
EUR3.0bn; 2) property debt corresponds to assets. The group’s strength is still intact and stems from: 1)
continued strong organic growth with stable prices and a high occupancy rate); 2) regular acquisitions; 3) the
growth from beds under restructuring/construction; 4) high profitability over the long term (operating margin
>10% over the long term); 5) the assistance of a banking pool. This will allow the group to post target sales
of over EUR2.0bn in 2015. This visibility and the fact that profitability is steady justify a high valuation. The
property crisis could create opportunities to return to this stock over the next years or so.
FFP 7.1% (5.8%); SOFINA 5.8% (4.8%);
PRICE (SHORT & LONG AVERAGE)
• . but hidden value of real estate is huge
11/07/2014 Dividend Payment
2013
25/06/2014 AGM
2013
50
45
40
35
30
Christian Auzanneau
25
20
Mar 11
Source : Factset
148
ORPÉA SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+33 4 78 92 01 85
CM - CIC Securities
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 9.42
Accumulate
PATRIZIA AG
P1ZGn.DE/P1Z GR
Market capitalisation: EUR 594m
Financial Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR9.42 / 6.48
12/12
196
49.2
25.1%
44.7
22.8%
25.4
25.4
0.1
588
1.7
11.9
2.1
0.0%
nm
2.2
4.6
18.5
20.3
12.6
1.0
8.5%
0.0%
0.46
79.5%
6.12
0.00
22.2%
12/13
12/14e
12/15e
208
219
210
24.8
23.6
21.9
11.9%
10.8%
10.4%
18.7
16.6
13.9
9.0%
7.6%
6.6%
37.2
40.5
46.2
37.2
40.5
46.2
2.4
31.4
47.1
503
377
270
1.3
0.9
0.6
20.3
16.0
12.3
2.1
2.1
3.8
0.0%
0.0%
0.0%
nm
nm
3.6
6.3
nm
4.7
4.4
4.1
39.7
41.1
39.4
52.7
58.4
62.3
13.0
14.7
12.9
1.3
1.4
1.3
35.7%
10.5%
10.5%
0.0%
2.0%
3.1%
0.59
0.64
0.73
26.9%
9.0%
14.1%
5.91
6.56
7.29
0.00
0.19
0.29
25.5%
15.4%
14.2%
Avg. Daily nb traded shares:186,324
Profile: Patrizia, which was founded by Wolfgang Effer, CEO and majority shareholder, in 1984, used to be
a traditional real estate asset manager with a focus on residential real estate. In recent years it has started a
strategic reorientation moving from a holder of real estate property to a real estate manager (of both
residential and commercial real estate property). As of Dec 2013 Patrizia has EUR 12bn assets under
management of which EUR 5.7bn are third parties AuM, EUR 5.6bn Co-Investments and EUR 0.5bn of own
investments. The company is operating in 14 European countries. Patrizia intends to completely sell off its
remaining own real estate property in the next two years.
We forecast Patrizia to increase its operating profit, its key performance indicator, by 36% yoy to EUR 52m,
an improving financial result and higher earnings contributions from its Co-Investments being the key
earnings drivers.
SWOT Analysis
Strengths
• Extensive market know how
Weaknesses
• High dependence on German residential market
• Well capitalized, low leverage
Opportunities
• Additional acquisition of real estate portfolios
Threats
• Rising interest rates lead to lower demand for real estate
property
• Disposal of own real estate property can be realized at
higher prices
Main shareholders: First Capital Partner GmbH 51.6%; Free float 48.4% (0.0%);
Recommendation: We recommend accumulating the shares with a target price of EUR 10. Firstly we see
good earnings growth for 2014e and 2015e, secondly Patrizia’s shift to a real estate management should
trigger higher valuation multiples in the mid-term and thirdly PAT should continue to benefit from a growing
demand for real estate asset management services.
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 10.00
titre
10
9
8
PATRIZIA AG SMALL & MID CAPS SELECTION
Analyst(s)
7
6
5
Philipp Häßler, CFA
4
3
2
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+49 69 58997 414
Equinet Bank
[email protected]
Jun 14
Source : Factset
149
Germany
SMALL & MID CAPS SELECTION
EUR 79.56
Reduce
PFEIFFER VACUUM
PV.DE/PFV GR
Market capitalisation: EUR 785m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR99.45 / 77.94
12/12
461
87.5
19.0%
67.7
14.7%
45.3
51.8
81.5
-49.9
-0.2
-0.6
81.6
17.9%
1.9
3.1
1.9
10.0
12.9
17.5
3.3
9.2%
3.8%
5.24
-5.4%
28.07
3.45
-18.8%
12/13
12/14e
12/15e
409
431
458
70.7
77.5
85.2
17.3%
18.0%
18.6%
50.5
57.4
65.3
12.4%
13.3%
14.3%
34.8
39.0
45.1
41.3
45.5
51.6
48.4
61.5
68.3
-53.6
-73.2
-91.3
-0.2
-0.3
-0.3
-0.8
-0.9
-1.1
nm
nm
nm
15.0%
16.9%
19.1%
1.6
1.8
2.1
3.6
2.8
2.8
2.3
1.7
1.6
13.4
9.5
8.4
18.7
12.8
11.0
23.6
17.2
15.2
3.5
2.7
2.6
4.6%
6.1%
6.3%
3.3%
3.7%
4.3%
4.19
4.61
5.23
-20.2%
10.2%
13.3%
27.97
29.28
30.89
2.65
2.95
3.40
-13.3%
-9.4%
-3.0%
Avg. Daily nb traded shares:15,934
Main shareholders: Free float 96.5%; Hakuto 3.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
100
95
23/05/14 Ex Dividend Date
2013
23/05/14 Dividend Payment
2013
22/05/14 AGM
2013
Profile: Pfeiffer Vacuum (PFV) develops and produces vacuum pumps and systems for various
applications. The company was founded in 1890 and emerged as one of the world wide leading players in its
domain. A major milestone in its history was achieved through the acquisition of one of its main rivals:
thanks to the takeover of Adixen, PFV emerged as the no.2 in its market behind Edwards. We would like to
highlight PFV's sector leading expertise in turbo-pumps and Adixen’s special knowledge in dry backing
pumps. Besides the mentioned core focus, PFV complements its offerings by devices, gauges and
components for analysis of vacuum and gases as well as valves and vacuum chambers.
SWOT Analysis
Strengths
• World leader in turbo-pumps and dry backing pumps
• Tubo-pump EBIT margin probably still around 25-30%
• Net debt-free balance sheet
Opportunities
• Cross-selling/synergies from Adixen takeover
Weaknesses
• High share of turns business, thus limited visibility in
general
• Exposure to cyclical industries has increased as a
consequence of the Adixen takeover
• Adixen dilutes the group margin
• Up-selling vacuum systems
Threats
• Price pressure at lower margin products (e.g. backing
pumps)
• USD sensitivity
• Further acquisitions
• Market share losses as PFV favours price over volume
Recommendation: Before the takeover of Adixen, PFV – being a product company – had operating
margins of around 25%. Still, adj. EBIT margins are solid at around 10-13% after the consolidation of the
acquisition. However, the revenue profile has become more volatile as largely through the acquisition of the
French vacuum specialist, PFV generates now more than a third of sales with semiconductor customers.
Still, relative revenue stability is however provided by R&D and analytical markets (together c. 30% of group
sales) as well as partly by industrial segments. However, in our opinion, the proof of concept as regards the
synergy realisation is still missing and we do not believe that the company can return to a 20% EBIT margin
as desired by the management too soon. Due to its rich valuation (P/E’14e of c. 17x), we rate the stock a
‘Reduce’.
Target Price: EUR 79.00
90
85
80
75
70
65
60
Mrz 11
Source : Factset
150
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
PFEIFFER VACUUM SMALL & MID CAPS SELECTION
Analyst(s)
Adrian Pehl, CFA
+49 69 58997 438
Equinet Bank
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 2.70
Hold
PIAGGIO
PIA.MI/PIA IM
Market capitalisation: EUR 973m
Automobiles & Parts
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.98 / 1.88
12/12
1,406
176
12.5%
96.6
6.9%
42.0
42.0
122
391
0.9
2.2
6.1
7.4%
1.0
1.4
0.8
6.8
12.3
18.0
1.7
2.0%
4.5%
0.11
-10.5%
1.18
0.09
22.7%
12/13
12/14e
12/15e
1,213
1,322
1,458
147
170
195
12.1%
12.9%
13.4%
62.6
86.2
108
5.2%
6.5%
7.4%
-6.6
30.8
45.1
-6.6
30.8
45.1
77.6
-1.6
132
476
468
449
1.2
1.1
1.0
3.2
2.8
2.3
4.5
4.8
5.7
5.0%
6.3%
7.8%
0.7
0.9
1.1
1.5
1.6
1.6
1.1
1.1
1.0
9.5
8.8
7.6
22.2
17.3
13.6
nm
31.6
21.6
2.2
2.3
2.2
-7.0%
-10.5%
3.3%
0.0%
1.9%
2.8%
-0.02
0.09
0.12
-chg
+chg
46.3%
1.08
1.17
1.24
0.00
0.05
0.08
21.3%
22.9%
-3.9%
Avg. Daily nb traded shares:1,075,640
Main shareholders: IMMSI 50.6%; Free float 38.7%; Della Valle Diego 5.5%;
Financière de l'Echiquier 5.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.0
2.8
2.6
2.4
Profile: PIA is the biggest European 2/3 wheel vehicle manufacturer. In 2013, PIA sold ~352 K 2 wheelers
(~-13% Y/Y) and ~204 K light commercial vehicles (-2.6% Y/Y); the group recorded ~11% of its FY13
revenues in Italy, ~36% in the rest of Europe, ~6% in North America, ~26% in India, ~10% in Vietnam and
~10% in the rest of the world.
PIA has strengthened its operations in India and Vietnam: it has built a diesel engine plant and started
assembling the “Vespa” in India (production capacity: 150 K units/year) and it is in the process to doubling
the current Vietnamese production capacity (100 K units/year) to further penetrate East-Asia countries.
PIA is targeting to increase its sales to ~800 K units by 2017 (CAGR of 9.5%) with Europe, Far East Asia
and Indian sales of two and four wheelers contributing for ~60 K additional units each. The company aims at
increasing its top line to EUR 1.75bn, its EBITDA to EUR 250m and the bottom line to EUR 70m.
SWOT Analysis
Strengths
• Full range of 2/3 wheelers
Weaknesses
• The EU market weighs for ~53% of revenues
• Good brand portfolio
• Japanese competitors are bigger and stronger
• Consolidated positioning in India, Vietnam
• Reliability is in some cases still an issue
Opportunities
• Global sourcing initiatives
Threats
• Korean and Chinese manufacturers’ competition
• The Vespa brand can be exploited further
• European market is falling for the 5th year in a row
• Further expansion in the ASEAN area
Recommendation: PIA recorded revenues of EUR 1.2bn in 2013 (~-14% Y/Y), with a ~EUR 147m EBITDA
(~-17% Y/Y) and a ~EUR 18m adjusted net profit (-57% Y/Y); the NFP reached EUR -476m (EUR -392m as
at the end of 2012). PIA European revenues were down ~22% Y/Y in 2013; they were up ~4% Y/Y in India,
they grew 10% Y/Y in the USA and they fell ~10% Y/Y in Far East Asia; PIA preserved its EBITDA margin
which came in at ~12.1% (-0.4 p.ps).
Q1 2014 results showed the first signs of a recovery in Europe after 5 years of crisis, while Indian and the
Far East Asia sales were down 16% and 19% Y/Y respectively; we are assuming that PIA's Italian and Rest
of Europe sales will grow 10% Y/Y in 2014 while we see the Indian and Far East Asia sales to grow by 15%
and 10% respectively. We value PIA on the basis of a DCF which gives us a EUR 2.50 target price. We
argue that much of the European recovery is factored in the price and that weaker-than-expected results in
India/Far east Asia may offset such growth.
Target Price: EUR 2.50
2.2
2.0
1.8
1.6
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
PIAGGIO SMALL & MID CAPS SELECTION
Analyst(s)
Gabriele Gambarova
+39 02 43 444 289
Banca Akros
[email protected]
151
Finland
SMALL & MID CAPS SELECTION
EUR 21.10
Reduce
PKC GROUP
PKC1V.HE/PKC1V FH
Market capitalisation: EUR 504m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR26.21 / 17.60
12/12
928
74.7
8.1%
43.5
4.7%
24.0
24.0
57.9
111
0.7
1.5
12.8
13.9%
2.1
1.7
0.4
5.5
9.4
13.9
2.1
21.0%
3.9%
1.12
-5.1%
7.34
0.60
4.2%
12/13
12/14e
12/15e
886
847
944
64.1
63.0
85.5
7.2%
7.4%
9.1%
30.5
36.3
62.8
3.4%
4.3%
6.7%
14.0
24.8
40.6
14.0
24.8
40.6
49.8
51.9
63.3
30.4
25.2
-2.0
0.2
0.1
0.0
0.5
0.4
0.0
9.6
13.4
17.8
11.5%
13.5%
23.9%
1.7
2.0
3.6
2.9
2.5
2.4
0.7
0.6
0.5
9.1
8.1
5.6
19.3
14.0
7.6
41.5
20.3
12.4
2.7
2.4
2.2
7.7%
4.3%
9.0%
3.3%
3.6%
3.8%
0.58
1.04
1.70
-47.8%
78.1%
63.4%
9.04
8.83
9.77
0.70
0.75
0.80
-12.6%
-5.6%
-4.6%
Avg. Daily nb traded shares:30,756
Main shareholders: Free float 100.0%; Keskinäinen Eläkevakuutusyhtiö Ilmarinen 10.2%; As Harju Elekter 6.4%;
Profile: PKC Group is a global designer and contract manufacturer of wiring systems and electronics. The
group provides its products and services to the commercial vehicle, automotive and electronics industries.
The operations are split into two business areas: Wiring Systems (93% of total sales) and Electronics (EMS).
The group's manufacturing facilities on four different continents provide a comprehensive service and
production network. PKC employs some 18,800 people. In 2013, South and North America accounted for
65% and Europe for 32% of PKC's sales. In the coming years, Asia will contribute more to PKC's sales.
As a leading global designer and manufacturer of electrical distribution systems for trucks, PKC serves all
the six leading Western truck OEM groups. The business competes with, for instance, Yazaki, Delphi,
Stoneridge and Leoni. The Electronics business offers electronics contract design and manufacturing
services for the automotive, electronics and energy industries. Electronics is in fact a non-core business with
no strategic value for PKC.
SWOT Analysis
Strengths
• Specialises in the provision of wiring harnesses to heavy
commercial vehicles, which enables optimisation of
to fit customer
needs
•production
Close customer
relationships
with large commercial
vehicle manufacturers
Weaknesses
• Relatively small company compared to competitors
Opportunities
• Truck sector integration opens up opportunities to win
new customers
• Customers outside the truck industry (e.g. off-road
machinery)
• Joint venture with Sinotruk
Threats
• Tightening competition especially from Asia
OP-Focus-erikoissijoitusrahasto 3.2%;
• Deepening of the European debt crisis could push the
truck market's recovery forward
• Realignments in customer industries may affect
component suppliers as well
Recommendation: The company is expecting 2014 sales and comparable EBITDA to be lower than in
2013. This year, profitability will be burdened by the reorganisation of European operations and production
transfers, in addition to weak sales. 2014 will be a stressful year for PKC.
All share prices at 19/05/14.
Target Price: EUR 22.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
30
07/08/14 Results
28
26
24
22
20
16
14
12
10
Mar 11
152
PKC GROUP SMALL & MID CAPS SELECTION
Analyst(s)
Hannu Rauhala
18
Source : Factset
2014Q2
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4392
Pohjola
[email protected]
Portugal
SMALL & MID CAPS SELECTION
EUR 3.42
Accumulate
PORTUCEL
PTI.LS/PTI PL
Market capitalisation: EUR 2626m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.56 / 2.24
12/12
1,502
385
25.7%
286
19.1%
211
211
310
275
0.2
0.7
23.9
10.2%
1.3
1.0
1.3
5.3
7.1
8.3
1.1
14.8%
6.5%
0.28
7.6%
2.04
0.22
28.6%
12/13e
12/14e
12/15e
1,492
1,359
1,357
333
289
283
22.3%
21.3%
20.9%
231
188
181
15.5%
13.9%
13.4%
181
121
113
181
121
113
283
222
215
225
271
296
0.1
0.2
0.2
0.7
0.9
1.0
17.2
17.1
13.6
8.6%
7.1%
6.9%
1.1
0.9
0.9
1.2
1.5
1.5
1.6
2.1
2.2
7.4
10.0
10.3
10.6
15.4
16.1
12.4
21.7
23.2
1.4
1.8
1.8
11.7%
5.8%
5.0%
8.0%
7.6%
6.0%
0.24
0.16
0.15
-14.5%
-33.1%
-6.2%
2.02
1.92
1.86
0.27
0.26
0.20
18.9%
9.5%
7.9%
Avg. Daily nb traded shares:308,254
Main shareholders: Semapa 75.9% (80.8%); Free float 24.1% (19.2%);
Profile: Portucel Group is one of the largest producers of uncoated fine paper in Europe. The group holds a
strong position in the office paper market and has a leading position in graphic papers in Europe. Its value
chain extends from forest to pulp and paper production, sheeting, and merchant operations. The company
invested in a new paper machine of 500 Kton per year in its Setúbal mill. This new investment should allow
the company to significantly strengthen its competitiveness in the paper market.
Portucel is one of the most interesting listed companies in the Portuguese equity market in terms of
profitability and strength of its balance sheet. The need for cash of its main shareholder (Semapa) means
that minorities have an extra bonus of high-end dividend yields at current market prices. With limited capex
needs in the medium term, the company should be able to generate a very substantial level of cash flow
going forward that, in our view, will not be entirely translated into a similar decrease of net debt given high
dividend distribution.
SWOT Analysis
Strengths
• State-of-the-art assets
Weaknesses
• Structural imbalance between demand and supply
• Operating margins above European peers
• Heavily dependent on economic cycle
• Brand recognition
Opportunities
• Further cost cutting
• USD devaluation has a negative effect on the European
producers competitiveness
• Increase of some raw materials prices (wood and
chemicals)
Threats
• Economic slowdown
• Biomass business
• Further devaluation of the USD
• Greenfield pulp business outside Europe
• Strong and rising competition
• Access to high quality raw materials
• Capacity closure and price power
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: Our YE2014 fair value stands at EUR 3.50 per share with a Accumulate
recommendation.
titre
3.6
21/05/14 AGM
3.4
Target Price: EUR 3.50
2013
3.2
3.0
2.8
2.6
Analyst(s)
2.4
2.2
2.0
1.8
1.6
mar 11
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Carlos Jesus
Artur Amaro
Caixa-Banco de Investimento
+351 21 389 6812
+351 213 89 6822
[email protected]
[email protected]
Source : Factset
153
Germany
SMALL & MID CAPS SELECTION
EUR 12.30
Hold
PSI
PSAG.DE/PSA2 GY
Market capitalisation: EUR 193m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR15.74 / 11.40
12/12
181
16.9
9.4%
12.9
7.1%
9.4
9.4
10.0
-24.0
-0.3
-1.4
9.8
8.4%
0.9
2.4
1.4
15.2
19.9
25.7
3.3
-1.5%
1.9%
0.60
27.7%
4.69
0.30
-17.9%
12/13
176
8.0
4.5%
4.2
2.4%
0.4
0.4
2.7
-14.9
-0.2
-1.9
5.0
2.7%
0.3
2.2
1.3
29.8
57.1
nm
3.2
-2.1%
0.0%
0.02
-96.7%
4.29
0.00
-1.1%
12/14e
12/15e
189
200
16.5
19.3
8.7%
9.7%
12.5
15.4
6.6%
7.7%
8.4
10.8
8.4
10.8
13.0
14.9
-22.0
-26.1
-0.3
-0.3
-1.3
-1.3
9.7
12.0
7.9%
9.5%
0.9
1.1
1.9
1.8
1.1
1.0
12.8
10.7
16.9
13.4
22.8
17.8
2.5
2.4
3.7%
4.5%
2.4%
2.8%
0.54
0.69
nm
27.8%
4.83
5.21
0.30
0.35
-14.0%
-5.1%
Avg. Daily nb traded shares:9,475
Profile: PSI AG, founded in 1969, offers software and solutions for the management of large networks.
Solutions and software for the control of energy networks such as electricity, gas, oil, water, and heat are
provided in Energy Management. Expected strong demand for grid management applications on the back of
the so-called Energiewende in Germany may spur future growth. Production management focuses on steel,
mechanical engineering, automotive as well as logistics. We expect the segment to turn-around from pilot
project cost overruns in 2013 and to benefit from a strong global market position and a unified production
platform. The Infrastructure Management division combines solutions for telecommunications and transport.
SWOT Analysis
Strengths
• High quality product
Weaknesses
• Disappointing company history and low confidence
• Successful entry and expansion of export markets like
Russia, China, other Asian countr.
• Rising share of high-margin recurring revenues
• Cost overruns in pilot projects
• Platform consolidation finished, lifts economy of scale
effects
Opportunities
• Strategy to grow through export and increasingly focus on
license sales instead of services
• Target to become leading player, charging higher margins
• Low sales/employee ratio
• Smart grid expansion
• Further increasing working capital needs due to export
strategy
• Comparably low margins for a software company
Threats
• IT/power/gas grid capex slowdown
• Dependence on partner to succeed in export markets
• Supportive grid regulation
Main shareholders: Free float 60.2% (0.0%); RWE 17.8%; Employees 9.4%;
Harvinder Singh 8.1%; AGI 4.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: PSI’s strong market position leaves the company perfectly prepared to go for ample
add-on revenue potential in upcoming years related to the overhaul of Germany’s grid infrastructure along
the lines of expanded renewable energy feed-in. However, visibility of future sales growth in the German
energy market is still weak on deferred planning and implementation processes. Hence, we expect PSI
shares to trade around the current level as valuation already digested a lot. HOLD
titre
24
Target Price: EUR 13.50
22
20
18
PSI SMALL & MID CAPS SELECTION
Analyst(s)
16
14
12
10
Mar 11
Source : Factset
154
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Michael Schaefer
+49 69 58997 419
Equinet Bank
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 4.16
Buy
RAISIO
RAIVV.HE/RAIVV FH
Market capitalisation: EUR 654m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.03 / 3.31
12/12
584
48.2
8.3%
31.6
5.4%
11.9
22.0
44.3
15.0
0.0
0.3
high
7.5%
1.2
1.4
0.9
10.4
15.9
22.4
1.5
-1.1%
3.9%
0.14
-1.5%
2.04
0.12
17.2%
12/13
12/14e
12/15e
557
545
562
48.7
51.7
58.3
8.7%
9.5%
10.4%
33.7
36.7
43.3
6.0%
6.7%
7.7%
26.3
27.9
33.4
26.3
27.9
33.4
42.8
44.4
49.7
-28.6
-34.7
-46.6
-0.1
-0.1
-0.1
-0.6
-0.7
-0.8
high
high
high
9.7%
9.4%
10.7%
1.5
1.5
1.7
2.1
2.0
1.9
1.2
1.1
1.1
13.7
11.9
10.3
19.7
16.7
13.9
26.5
23.4
19.6
2.1
1.9
1.9
8.7%
4.3%
5.5%
3.1%
3.4%
3.6%
0.16
0.18
0.21
19.9%
7.9%
19.6%
2.07
2.15
2.22
0.13
0.14
0.15
-3.7%
-14.2%
-8.4%
Avg. Daily nb traded shares:65,310
Profile: Raisio is a food company that focuses on plant-based nutrition. Brands, the food industry business,
accounts for more than half of sales and Raisioagro, the feed and farming supplies segment, for less than
half. The main markets are Finland, the UK, Sweden, Russia, Ukraine, Poland, Estonia and the Czech
Republic. The company’s strategic objective is to grow organically and through acquisitions, emphasising
health, ecology and food suited to mobile lifestyle in the breakfast and snack categories. The main brands
on the food industry side are Benecol, Elovena, Sunnuntai, Honey Monster, Nordic, Fox's, Poppets and
Juicee Gummee. On the animal feed side, company's flagship brand/innovation is dairy feed Benemilk.
SWOT Analysis
Strengths
• Strong brands
Weaknesses
• Small company that has less marketing resources than its
competitors
• Two share series, with raw material producers and their
representatives owning the voting shares
• Able and highly committed management
• Innovative research and development
• Strong balance sheet
Opportunities
• Internationalisation of dairy feed innovation Benemilk
Threats
• Failure of the international commercialisation of Benemilk
• Growth opportunities of cholesterol-lowering Benecol
products
• Combination of the share series
• Failure of the acquisition strategy
• Reduction of livestock production in Finland and the
impact of this on demand for feed
• Demerger of Brands and Agro into separate companies in
the long term
Main shareholders: Free float 97.5%; Keskinäinen Eläkevakuutusyhtiö Ilmarinen 3.3%; Reso Management Oy 2.7%;
Central Union of Agricultural Producers and Forest Owners (MTK) 2.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
5.0
12/08/14 Results
4.5
Recommendation: The primarily Benemilk-driven investment story gained more support from the Q1
report. Raisio and its partner Intellectual Ventures have been on a roadshow marketing a licensing
partnership to many potential partners around the world. The dairy feed innovation has been very well
received and has attracted great attention. At the moment, the biggest question is when will we hear
further chapters of the story, in other words, some patent and licensing news. We believe this could still
take a couple of quarters. The declined share price appears highly attractive because Benemilk Ltd’s
project potential, now moderately priced in, and the outstanding balance sheet offer attractive upside.
2014H1
Target Price: EUR 5.50
4.0
3.5
RAISIO SMALL & MID CAPS SELECTION
Analyst(s)
3.0
2.5
2.0
1.5
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Niclas Catani
+358 10 252 8780
Pohjola
[email protected]
155
France
SMALL & MID CAPS SELECTION
EUR 36.57
Buy
RALLYE
GENC.PA/RAL FP
Market capitalisation: EUR 1781m
Food & Drug Retailers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR38.40 / 25.90
12/12
42,663
3,246
7.6%
2,371
5.6%
313
313
2,423
8,641
0.6
2.7
4.6
12/13e
50,490
3,344
6.6%
2,302
4.6%
-15.4
-15.4
2,065
8,828
0.6
2.6
4.9
4.0
0.7
161%
5.0%
6.43
nm
37.48
1.83
16.1%
12/14e
53,884
3,707
6.9%
2,593
4.8%
30.4
30.4
2,401
8,547
0.6
2.3
5.6
12/15e
56,890
4,024
7.1%
2,846
5.0%
68.6
68.6
2,648
8,112
0.5
2.0
6.4
nm
nm
26.0
0.9
1.1
1.1
28.7%
22.2%
34.2%
5.0%
5.0%
5.0%
-0.32
0.62
1.41
-chg
+chg
125.6%
35.36
34.15
33.73
1.83
1.83
1.83
16.0%
18.2%
5.5%
Avg. Daily nb traded shares:64,186
Main shareholders: FonciŠre Euris 56.1% (71.1%); Free float 42.7% (28.9%); Autocontr“le 1.2% (0.0%);
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
40
30/07/14 Results
38
2014H1
36
34
21/05/14 Dividend Payment
32
2013
Profile: Rallye is the holding company that controls Casino, in which it owns 49.0% of the ordinary shares
(and 59.3% of the voting rights). Rallye is controlled by Foncière Euris (which owns 55.6% of shares and
72.2% of voting rights). Rallye’s gross assets (before holding company debt) essentially comprise the stake
in Casino (94% of gross assets), the stake in Go Sport (1% of gross assets) and financial investments
(property, LBO funds) estimated by the company at EUR257m (5% of gross assets).
SWOT Analysis
Strengths
• Leading player in convenience in France &
leading food retailer in emerging countries
• Well diversified portfolio of business units per
countries & per format
• Control of complementary banners, allowing the
group to maximise its market share
Opportunities
• Convenience: favourable demographic trends
• Huge potential in some emerging countries:
Brazil, Colombia, Thailand, Vietnam, etc.
• Strong ambition and opportunities in E-commerce
Weaknesses
• Dilemma as regards G‚ant hypermarkets in
France.
• Dilemma as regard Leader Price hard discount in
France
• Complex structure of ownership of the brazilian
assets
Threats
• Performance of store banners in an adverse
climate (economy, maturity of hard discounters)
• Spreading of price war (unlikely) to the
convenience segment
• Substantial financial leverage
Recommendation: The traditional investment case on the Rallye share rests on two pillars: 1) Rallye is a
high-yield stock, and 2) whether or not it trades at an attractive discount in relation to its restated net asset
value. The reasoning behind the classic Rallye investment case needs dusting off. We have opted to
examine how Rallye’s cash-flow statement could be returned to balance. The Rallye holding company’s
inflows (primarily the dividends paid by Casino) do not cover its outflows (interest charges, operating costs
and its dividend), nor have they for some time. Over the long term, this imbalance explains why Rallye’s
share has underperformed that of Casino. Our view on Rallye is correlated with our take on Casino. In our
2012 October report on Casino we stressed the company’s ability to generate an increasing amount of
free cash flow, earnings and thus dividends (on a constant pay-out). The increase of the Casino dividend
received by Rallye would thus make a steady contribution to balancing the holding company’s inflows and
outflows. The expected re-balancing will enable the leverage effect to function once again. In our
simulation table, we have projected a return to balance of Rallye’s cash-flow statement in 2018 and
factored in the current value of the deficit over the next five years at our ‘target’ NAV.
Target Price: EUR 38.40
30
28
26
24
22
20
Mar 11
Source : Factset
156
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Christian Devismes
CM - CIC Securities
+33 1 45 96 77 63
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 7.28
Buy
RAMIRENT
RMR1V.HE/RMR1V FH
Market capitalisation: EUR 791m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR10.18 / 6.50
12/12
714
210
29.4%
92.3
12.9%
63.6
63.6
182
239
0.7
1.1
22.3
10.3%
1.2
1.3
1.3
4.3
9.8
10.7
1.9
2.5%
5.4%
0.59
42.7%
3.33
0.34
-1.6%
12/13
12/14e
12/15e
647
623
664
196
185
219
30.4%
29.6%
33.0%
83.7
77.1
106
12.9%
12.4%
16.0%
55.9
50.1
69.7
55.9
50.1
69.7
169
158
183
207
206
198
0.6
0.5
0.5
1.1
1.1
0.9
10.7
15.2
16.8
10.6%
9.6%
12.8%
1.2
1.1
1.5
1.9
1.6
1.5
1.8
1.5
1.4
5.9
5.2
4.3
13.9
12.4
9.0
17.8
15.8
11.4
2.7
2.1
1.9
9.3%
3.6%
4.6%
5.1%
5.5%
6.9%
0.51
0.46
0.64
-12.2%
-10.3%
39.1%
3.41
3.50
3.74
0.37
0.40
0.50
-21.0%
-18.7%
-7.1%
Avg. Daily nb traded shares:125,814
Main shareholders: Free float 71.0%; Nordstjernan AB 29.3%; Oy Julius Tallberg Ab 11.0%;
Varma Mutual Pension Insurance Co 6.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Ramirent is the leading equipment rental company in the Nordic and CEE countries, offering a
wide range of machinery and equipment rental services to construction and installation companies,
customers in the industrial, shipyard and public sectors, and households.
In the Nordic countries, the equipment rental market has historically grown by twice the rate for construction
volumes. As a market leader in most of the operating markets, Ramirent has captured faster growth than the
equipment rental market. The long-term growth driver for the equipment rental market is increasing rental
penetration. The market growth potential is significant as the market is developing towards the 80%
penetration rate prevailing in the UK. In the Nordic countries, the penetration rate is currently between 30–
40% and in Eastern Europe around 10%. Increasing rental penetration is driven by the benefits of rental,
including release of capital, cost efficiency due to better capacity utilisation, no maintenance costs, better
access to equipment as well as higher safety.
SWOT Analysis
Strengths
• Market leader in e.g. Finland, Norway, Denmark, and
Poland
• Strong balance sheet
Weaknesses
• The business is a derivative of the construction market
• Track record of above-industry average profitability
Opportunities
• Balance sheet allows acquisitions
Threats
• Weakening of the construction cycle
• Growth in equipment rental penetration continuing for
several years
• Favourable construction cycle extending over several
years
Recommendation: The share trades with a EUR 0.65 extraordinary dividend, which is still conditional on
the BoD’s approval and which, if paid, would deliver a 14% yield over the next 12 months with our ordinary
dividend forecast for next spring. Valuation is also at the over-the-cycle-level and allows multiple expansion
if the growth outlook for 2015 strengthens later this year like we believe. Our target price is based on our
2015 EBITDA forecast and the 10-year median EV/EBITDA valuation of 5.5.
Target Price: EUR 9.50
titre
11
10
9
RAMIRENT SMALL & MID CAPS SELECTION
Analyst(s)
8
7
6
Matias Rautionmaa
5
4
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+358 10 252 4408
Pohjola
[email protected]
Jun 14
Source : Factset
157
Italy
SMALL & MID CAPS SELECTION
EUR 1.45
Accumulate
RCS MEDIAGROUP
RCSM.MI/RCS IM
Market capitalisation: EUR 728m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.49 / 1.10
12/12
1,598
1.3
0.1%
-525
nm
-509
-40.4
-418
846
4.7
651
high
-23.6%
-3.1
1.2
1.5
nm
nm
nm
13.2
-27.3%
0.0%
-0.10
-chg
0.32
0.00
-34.4%
12/13
12/14e
12/15e
1,315
1,345
1,401
-82.9
50.2
151
nm
3.7%
10.8%
-201
-19.8
82.9
nm
nm
5.9%
-219
-50.5
33.7
-124
-30.6
30.9
-137
23.6
108
476
446
421
1.4
1.5
1.3
-5.7
8.9
2.8
nm
1.7
5.4
-5.0%
1.3%
3.7%
-0.7
0.2
0.5
0.6
0.7
0.7
0.7
0.8
0.7
nm
20.5
6.6
nm
nm
12.1
nm
nm
21.3
2.0
2.6
2.3
-29.7%
8.1%
3.3%
0.0%
0.0%
0.0%
-0.27
-0.07
0.07
-chg
+chg
+chg
0.66
0.55
0.63
0.00
0.00
0.00
8.8%
-7.6%
-12.0%
Avg. Daily nb traded shares:2,437,267
Profile: RCS is a leading Italian publishing group, namely: a) Newspapers: Italy #1 generalist and sport, free press
title (37% group sales in 2013); b) Magazines: 9 weekly, 22 monthly (10% sales); c) books publishing (19% sales);
d) television content production (1% sales). Presence in the Spanish market with #3 newspapers (28% sales). In
February 07, RCS acquired the Spanish media group Recoletos for EUR 1.1bn (13.8x EV/EBITDA 06). The
financial effort implied by the deal, along with the macro-economic crisis and the secular dynamics of the publishing
industry put the company balance sheet under pressure.
Restructuring. In May 2012, RCS AGM appointed a new BoD, a new chairman Mr. Provasoli and a new CEO Mr.
Scott Jovane, former CEO of Microsoft.. Industrial targets. In Dec 2012 RCS presented the economic guidelines of
the new 2013/15 plan. The main assumptions included a strong growth in digital activities and a new savings worth
EUR 100m. Financial plan. In April 2013, RCS approved its financial package which included EUR 400m share
issue, and a EUR 575m bank refinancing. Asset disposal.. In April 2011, RCS sold the consumer division of its
Dada subsidiary to Buongiorno for EUR 32m. In August 2012, RCS sold the French publisher Flammarion for EUR
251m. The residual B2B activities of Dada were sold in July 2013 to Sawiris (EUR 60m impact). The company HQ
was sold to Blackstone in December for EUR 120m. FY 2013 results were broadly in line with our estimates and the
plan targets on an underlying basis. While the revenue performance fell short of the original estimates, the
acceleration in cost savings allowed the co to meet the adjusted EBITDA target. In detail, revenues fell by 13% vs.
the last projection of -10/12% (and the original plan indication of high-single-digit decline). Cost cutting was EUR
92m (EUR 30m in Q4), implying EUR 10m higher efficiencies against the plan. The EBITDA was positive as
promised and strongly up Y/Y in Q4; however it slightly missed the plan target mainly due to RCS Sport. Net debt
was in line with expectations and sharply down Y/Y in virtue of the EUR 410m capital increase and the real estate
disposal. Other corporate action. In March 2014 the BoD proposed the conversion of the outstanding savings
shares (category “A” and “B”) in ord shares according to either a voluntary or mandatory scheme. Following the
unwinding of the shareholders pact and the willingness of Intesa and Mediobanca to dispose of their stakes, we
believe the current control structure of RCS looks unstable with the 21% relative majority of FIAT challenged by
Della Valle (9% stake), probably teaming up with Cairo (3.7%).
SWOT Analysis
Strengths
• Leading titles in Italian newspapers
• Strong presence in several verticals
• International projection
Weaknesses
• Still fragile balance sheet
• Governance issues
Opportunities
• Digitalization
• Cost-cutting
Threats
• Secular trend in print
• Fragmentation in on-line
Main shareholders: Free float 41.7%; FIAT 20.6%; Mediobanca 9.9%;
Della Valle 9.0%; Intesa 6.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
5.5
Recommendation: Following the RCS investor Day on March 13, we increased our TP to EUR 1.85 and moved
our Recommendation to Accumulate. The stock is clearly not cheap on short-term ratios; the equity story is based
on a combination of credible and increased cost-cutting action, Short-Term peculiar top-line growth looking for a
cyclical recovery M/T and sensible strategic vision.
5.0
Target Price: EUR 1.85
4.5
4.0
Analyst(s)
3.5
3.0
Andrea Devita, CFA
2.5
2.0
1.5
1.0
Mar 11
Source : Factset
158
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Banca Akros
+39 02 4344 4031
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 11.36
Accumulate
RECORDATI
RECI.MI/REC IM
Market capitalisation: EUR 2376m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR13.33 / 7.98
12/12
828
192
23.1%
167
20.2%
118
118
143
153
0.2
0.8
28.9
12.7%
1.5
1.9
2.0
8.5
9.8
12.2
2.2
-4.5%
4.3%
0.57
1.7%
3.16
0.30
41.6%
12/13
12/14e
12/15e
942
987
1,055
230
254
271
24.4%
25.8%
25.7%
195
221
234
20.7%
22.4%
22.2%
135
152
161
135
152
161
170
186
198
261
236
167
0.4
0.3
0.2
1.1
0.9
0.6
29.7
20.5
18.2
12.2%
13.0%
13.3%
1.6
1.7
nm
2.3
2.3
2.2
2.6
2.7
2.4
10.8
10.4
9.5
12.7
12.0
11.0
16.2
15.6
14.8
3.0
2.9
2.6
-0.3%
3.6%
5.5%
2.6%
2.7%
2.8%
0.65
0.73
0.77
14.0%
12.9%
5.4%
3.50
3.93
4.39
0.30
0.31
0.32
12.6%
-9.5%
-7.6%
Avg. Daily nb traded shares:238,336
Main shareholders: Recordati Family 56.2%; Free float 43.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
14
13
12
11
10
9
8
Profile: REC is an Italian mid-sized specialty pharmaceutical operator engaged in the research, manufacturing, development
and marketing of pharmaceuticals (around 95.0% of sales). Though the headquarters are located in Milan, the group has a
European reach, with operations in the main European countries and in North Africa (Germany, France, Spain, Portugal, UK,
Ireland, Greece Turkey, Tunisia, Czech Republic, Romania, Russia and other C.I.S. countries). Recordati’s original research is
currently focused on the cardiovascular and urological fields in order to discover new chemical compounds for the treatment of
urogenital conditions and to develop new combinations of lercanidipine; furthermore, thanks to the acquisition of Orphan
Europe, the group entered the growing niche of drugs for rare diseases. In addition to the new combo lercanidipine+enalapril,
the group has been launching two new interesting molecules (silodosin for the treatment the benign prostatic hyperplasia, BPH;
pitavastatin for the treatment of hypercholesterolaemia). Lastly, the group is strengthening its OTC products portfolio.
SWOT Analysis
Strengths
Weaknesses
• Solid distribution network in the mature European
• Increase in R&D expenses (by 20% per year) may weaken
markets
margins
• Good presence in the countries in Eastern Europe and
• Potential risk of paying multiples that are too high for
Middle East that are characterised by interesting growth
future acquisitions
rates
•
Successful track record in acquiring and integrating
• Potential risk that new molecules in R&D pipeline fail to
pharmaceutical businesses
obtain the necessary approvals
• Strong cash generation and sound financial structure to
support new product/company acquisitions
Opportunities
Threats
• Steady internationalisation (from Italy to emerging
• Possible further price cuts on reimbursable drugs across
markets/eastern Europe) and diversification of its product
Europe
portfolio
new product
launches
•
Furtherthrough
strengthening
and growth
in the segment of rare
• Strong growth in generic drugs in Europe may weaken
diseases
margins
• Potential positive repercussions on Rec, the European
licensee, in caso of the approval of NX-1207 (new product
for the treatment of BHP) in USA
As previously announced, Q1 14 sales grew by +6.5%. Despite the negative impact from the exchange rates (Turkish Lira
EUR 6.2m + Russian Rouble EUR 3.2m) and the temporary sales decrease in Russia due to the distribution network
reorganisation, the group achieved positive sales growth thanks to: 1) positive sales trend in Italy (+4.0%Y/Y) and in Germany
(+7.8% Y/Y); 2) good sales growth of the new US portfolio (+9.7% Y/Y); 3) the positive contribution of the last two acquisitions
in Spain and Tunisia. EBIT grew by 18.1%, higher than our estimates (EUR 55.2m); the growth was especially due to: 1) the
improvement in the gross margin (Q1 14 66.6% vs 65.1% in Q1 13) owing to the higher profitability of the last acquired
product; 2) the lower incidence of SG&A expenses on sales.
2013-2015 business plan: this business plan, which updated the previous plan (May 2011), confirms the growing sales trend
(organically and through bolt-on acquisitions 2013-15e sales CAGR +10%) and stable profitability targets for the next three
years (sustainable EBIT margin around 22-23%).
FY 14 guidance confirmed: the management slightly revised FY 14 sales guidance due to the strong negative forex impact
(EUR <1,000), but they confirmed the strong improvement in profitability (EUR >220m).
Potential growth drivers not yet priced in: the current price the stock does not reflect the potential upside from: 1 ) steady
internationalisation (from Italy to emerging markets/Eastern Europe) and diversification of its product portfolio through new
product launches; 2 ) further strengthening and growth in the segment of rare diseases and in the OTC market.
Recommendation: given the expected strong improvement in profitability, we confirm our Target Price of EUR 14.00 per
share calculated based on our DCF Model (WACC 7.5% and 2.0% perpetual growth rate). Accumulate recommendation
confirmed.
7
Target Price: EUR 14.00
6
5
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Paola Saglietti
Banca Akros
+39 02 4344 4287
[email protected]
159
Italy
SMALL & MID CAPS SELECTION
EUR 57.00
Hold
REPLY
REY.MI/REY IM
Market capitalisation: EUR 526m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR66.15 / 32.70
12/12
495
62.4
12.6%
55.5
11.2%
30.4
27.1
38.4
0.4
0.0
0.0
31.5
22.2%
2.7
1.0
0.5
3.9
4.3
7.1
1.1
10.2%
2.4%
2.94
12.1%
19.06
0.50
82.0%
12/13
12/14e
12/15e
563
623
654
72.6
80.9
86.9
12.9%
13.0%
13.3%
64.7
72.6
78.1
11.5%
11.6%
11.9%
34.9
37.3
41.3
34.5
37.3
41.3
43.5
46.9
51.3
-5.0
-26.7
-37.8
0.0
-0.1
-0.1
-0.1
-0.3
-0.4
29.8
53.9
96.5
23.1%
24.2%
23.8%
2.8
2.9
2.9
2.0
1.8
1.6
1.0
0.9
0.8
7.7
6.7
6.1
8.7
7.5
6.8
15.2
14.1
12.7
2.5
2.2
1.9
1.5%
3.7%
2.5%
1.0%
1.2%
1.2%
3.74
4.04
4.47
27.3%
8.2%
10.6%
23.05
26.40
30.17
0.57
0.70
0.70
11.7%
-8.1%
-13.5%
Avg. Daily nb traded shares:54,036
Main shareholders: Rizzante Mario 53.7%; Free float 31.6%; Kairos Partners SGR 4.8%;
Highclere International Investors 3.6%; Anima SGR 3.1%; Lodigiani Riccardo 2.3%; Other institutional investors
0.9%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Founded in 1996, Reply is a leading system integrator and business process operator/outsourcer; it is
specialized in the creation and implementation of solutions based on new communication networks and digital
media. Reply operates in three main markets: Italy (75% of group sales in FY 13), Germany (15%), and the UK
(12%) where the group entered in July 08 through the acquisition of Glue: Ltd, specialized in Enterprise and
Service-Oriented architectures. Corporate action. In Nov-11, Reply acquired an 80% stake in the English
consulting firm Portaltech for GBP 1.6m. In Oct-2012, Reply acquired Arlanis Software AG, a German company
specialized in consulting and data integration, leader in Continental Europe on Salesforce.com solutions. A small
deal, more relevant from a strategic point of view, given the rising importance of cloud computing and Software as a
service solutions. In Dec-2012, Reply announced the acquisition of Avvio Design Associates Ltd, a UK company
specialised in consulting and implementation of Brand engagement and Internal Communication solutions, based
on Corporate Social Networking. Reply paid GBP 1.2m cash, the acquisition adds to the presence of Reply in the
UK a centre of excellence on the themes of Social Media. In July 2013, Reply announced the acquisition of a small
German digital consulting company “Triplesense Gmbh” for EUR 3.4m. Reply operates through a business model
based on: a) established proprietary products; b) strategic partnerships with leading vendors; c) considerable
knowledge of the end market and d) a deep knowledge of the customer business model. FY 2013 results were
solid and broadly in line with our estimates through the P&L. Revenue growth were the main positive surprise, as
Q4 accelerated on a sequential basis and exceeded our forecasts. Germany delivered the largest sequential sales
improvement which was also coupled with margin increase (>4pp Y/Y to 10.7% in Q4, +1pp to 8.7% in the full year).
In Italy, top-line growth was also strong, while EBITDA increased by just 5.5% as margin declined by 0.7pp to
12.7% in FY 2013. UK margin was up by 4.4pp in the 12 months (to 16.6%) in spite of a Y/Y decline in Q4, out of a
sales growth of almost 50%. The net financial position was also in line with expectations implying EUR 5.5m cash
generation in the year, EUR 5m cash burn in Q4. The board proposed a DPS of EUR 0.7 up by 22% Y/Y (we were
expecting a stable distribution). The cash outlay for the company is EUR 6.5m, the yield offered is c 1.2%.
SWOT Analysis
Strengths
• Promising portfolio of reference customers
Weaknesses
• High dependence on the Italian IT market
• Well-implemented vertical offering
• Business in Germany is highly dependent on banking
sector IT spending
• Experienced management team
Opportunities
• Self financed expansion through acquisitions and
partnerships
• Gain mkt share from global operators (IBM, Accenture),
thanks to flexibility and prices.
Threats
• Firms could reduce their IT budget due to the
deterioration of the macroeconomic context
• Maturing technologies can reduce the need for additional
IT spending
titre
Recommendation: solid results in Q4 2013,, characterized by a positive surprise in German top-line growth. Modest
impact on our estimates (c +2/3% at the EBITDA level in FY 2014/15). Large impact on Fair Value from more
favourable valuation parameters and the roll-over of DCF; we reflect the lower risks from country specific and company
specific perspective with a WACC reduction of 100bp to 8.2%. TP increased to EUR 60
70
60
50
40
Target Price: EUR 60.00
30
20
10
Mar 11
Source : Factset
160
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Andrea Devita, CFA
Banca Akros
+39 02 4344 4031
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 60.50
Hold
RETAIL ESTATES
RETE.BR/RET BB
Market capitalisation: EUR 461m
Real Estate
EUR
03/12
36
31
86.2%
9
(13)
27
18
18.01
272
537
533
3.39
2.80
44.39
8.0%
49.20
7.1%
5.8%
17.3
14
2.4
272
49.0%
10.4%
03/14e
03/15e
47
50
EBITDA (m)
40
43
EBITDA margin
85.5%
85.6%
Portfolio Result (m)
5
8
Net Financial Result
(16)
(16)
Net Profit (reported)(m)
29
35
Net Profit (adj.)(m)
24
27
Funds From Operations
23.96
26.68
Net Debt (m)
318
323
Portfolio Value (m)
721
759
Enterprise Value (m)
748
784
EPS (adj.)
3.66
3.58
DPS
3.00
3.00
IFRS NAVPS
48.72
50.67
Premium/(discount)
20.9%
19.4%
EPRA NAVPS
48.72
50.67
Earnings adj. yield
6.0%
5.9%
Dividend yield
5.0%
5.0%
EV/EBITDA
18.6
18.2
P/E (adj.)
16
17
Int. cover(EBITDA/Fin.int)
2.5
2.7
Net debt/(cash) (m)
318
323
Net Debt/Total Assets
43.1%
41.9%
Abs. Performances(12m,6m,3m,1m):
5.1%
5.4%
12 month High/low: EUR60.50 / 52.25
Avg. Daily nb traded shares:3,288
Main shareholders: Free float 54.6%; FPIM 11.3%; Het Torentje (Leasinvest) 10.0%;
Gross Rental Income (m)
03/13
42
36
86.0%
9
(15)
30
21
20.70
345
676
673
3.62
2.90
46.38
21.7%
51.55
6.0%
4.8%
18.6
16
2.4
345
50.2%
8.0%
KBC 9.2%; Axa 5.3%;
All share prices at 19/05/14.
Profile: Retail Estates is a Belgian REIT that specializes in peripheral retail parks and retail warehouses that
are located along access roads to urban centres in Belgium. The portfolio has a fair value of EUR 743.7m
and consists of 551 retail properties with a typical size of about 1000 sqm. Retail Estates has a long
experience in redeveloping its properties to respond to tenants’ demand. The 3-6-9 leases are indexed to
the Belgian Health Index (an adjusted consumer price index). The company operates in an advantageous
legal and fiscal framework offered by the status of Belgian REIT (= Sicafi or Bevak).
SWOT Analysis
Strengths
• High portfolio yield of 6.96% despite its quality
• Pure player in Belgian retail warehouses, which benefit
from strong demand (cf. Low rents and good accessibility)
limited offer
(regulation)
•and
Conservative
average
rental level of the portfolio
• Low cyclicality as Belgian retail sales are not volatile
thanks to high & solid purchasing power
Opportunities
• Capturing the reversionary potential
• Growth opportunities in Belgium thanks to large market
share private investors (60%)
• Development experience
Weaknesses
• Limited size of single asset makes portfolio expansion a
labour-intensive process
• Limited liquidity, but active OTC market
Threats
• E-commerce
• Depressed consumer spending
• Rising interest rates
Recommendation: Rental income for 9M13/14 was EUR 34.98m, an increase of 13.2% compared to
9M12/13, driven by portfolio expansion and positive indexations. The net current result of the Group for
9M13/14 amounted to EUR 18.07m, up 19.66% over the year. On a per share basis, the net current result
was EUR 2.65, flat over the year and better than 1H13/14 (-1.7%), notwithstanding an increase in the
weighted average number of shares by 19.1%. This points to a better 3Q13/14 net current EPS.
Retail Estates continues to report solid figures and raised its full year net current EPS (> EUR 3.25)
guidance.
We maintain our Hold recommendation and EUR 57 TP.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
62
23/05/14 Results
60
2014
Target Price: EUR 57.00
58
56
54
RETAIL ESTATES SMALL & MID CAPS SELECTION
Analyst(s)
52
50
48
46
44
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Dirk Peeters
+32 2 287 97 16
Bank Degroof
[email protected]
Source : Factset
161
Germany
SMALL & MID CAPS SELECTION
EUR 47.00
Accumulate
RHEINMETALL
RHMG.DE/RHM GR
Market capitalisation: EUR 1775m
Aerospace & Defense
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR57.87 / 35.01
12/12
4,704
472
10.0%
278
5.9%
173
201
537
64.0
0.0
0.1
11.0
9.3%
1.1
0.8
0.5
4.6
7.9
6.9
1.0
26.9%
4.9%
5.29
-4.6%
35.54
1.80
23.4%
12/13
12/14e
12/15e
4,613
4,799
5,172
293
414
501
6.4%
8.6%
9.7%
81.0
202
285
1.8%
4.2%
5.5%
28.6
109
162
124
109
162
200
312
401
104
60.1
-23.9
0.1
0.0
0.0
0.4
0.1
0.0
6.2
9.2
11.5
4.5%
5.8%
7.7%
0.5
0.7
0.9
0.9
0.9
0.9
0.5
0.5
0.5
8.4
6.2
5.2
30.2
12.7
9.1
13.7
16.3
10.9
1.4
1.3
1.2
3.9%
2.9%
5.8%
0.9%
2.1%
3.2%
3.27
2.89
4.30
-38.1%
-11.7%
48.7%
33.09
35.71
39.01
0.40
1.00
1.50
6.6%
-11.2%
-6.3%
Avg. Daily nb traded shares:254,475
Profile: The Dusseldorf based Rheinmetall runs two main divisions. In the Automotive segment it supplies
large OEMs with pumps, components for air supply and emission control, pistons, plain bearings and
aluminium motor blocks. Also, Rheinmetall offers aftermarket services in this division. The Defence business
is composed of four sub-segments: Land Systems (armoured vehicles and systems), Air Defence Systems,
Weapon Munition and Defence Electronics. While Rheinmetall operates facilities for the Automotive segment
in a number of worldwide locations, the Defence business is run basically from Germany due to its special
character. The company employs currently more than 18,000 people, two thirds of these in Automotive with
an increasing emphasis on lower-cost countries.
SWOT Analysis
Strengths
• 2.5 years reach of order backlog in Defence
Weaknesses
• No real synergies between Automotive and Defence
• Leading European land systems producer
• Market leading position in some Automotive areas
• RHM's Auto division portfolio is completely focused on
the combustion engine only
• RHM does not earn capital costs at the moment
• Rather limited USD influence
• Cash flow history has not been sustained
Opportunities
• New export orders in Defence (e.g. Saudi Arabia, UAE,
Northern and Southern Africa)
• Attractive acquisitions
Threats
• Further austerity measures in Europe and the US
• Effective Defence restructuring
• Ammunition business might not return in the desired
magnitude/time frame
• Raw material pricing (copper and aluminium)
• European Auto recovery
Main shareholders: Free float 84.7%; Harris Associates 10.5%; Treasury shares 4.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
65
60
Recommendation: While the Auto division keeps on performing well, RHM was hit by austerity measures in
Defence in particular in the high margin ammunition sub-division. Beyond that, RHM had to secure the
loading of its MAN JV which appears to have largely improved, however, after bigger contracts from
Australia and Scandinavia support here. Downside risks are arising from the government side as the export
permissions seem to be treated more strictly. The long-term Defence margin target was recently revised
from 10% to 7-9% while in Auto, RHM is on its way to achieve 8% once volumes are sufficient. The valuation
is attractive with an EV/EBITDA’15e of 5.2x, but RHM has not been a strong cash flow generator in the past.
55
Target Price: EUR 55.00
50
45
40
Analyst(s)
35
30
Mrz 11
Source : Factset
162
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Adrian Pehl, CFA
Equinet Bank
+49 69 58997 438
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 11.55
Buy
RIB SOFTWARE
RSTA.DE/RSTA GY
Market capitalisation: EUR 431m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR11.98 / 3.68
12/12
39.2
16.0
40.9%
11.9
30.2%
8.8
8.8
15.7
-89.1
-0.6
-5.6
nm
10.6%
1.1
1.0
2.1
5.3
7.1
19.3
1.1
5.5%
3.2%
0.23
4.2%
3.83
0.14
202.5%
12/13
12/14e
12/15e
57.0
68.7
96.7
18.7
25.4
36.1
32.8%
37.0%
37.4%
13.4
19.6
29.4
23.6%
28.5%
30.5%
9.0
13.8
20.8
9.0
13.8
20.8
18.2
17.3
24.3
-82.1
-83.3
-87.9
-0.6
-0.6
-0.5
-4.4
-3.3
-2.4
46.4
nm
nm
11.3%
15.2%
21.0%
1.2
1.6
2.2
2.3
3.8
3.4
3.4
5.1
3.6
10.4
13.8
9.6
14.4
17.9
11.8
30.1
31.1
20.7
1.9
2.9
2.7
4.0%
1.0%
2.2%
0.5%
1.3%
2.2%
0.24
0.37
0.56
4.7%
55.4%
49.9%
3.77
4.04
4.35
0.06
0.15
0.25
59.0%
21.7%
5.0%
Avg. Daily nb traded shares:55,340
Profile: RIB sells integrated software solutions for the construction industry. The new software RIB iTWO
business suite spans the entire value chain of construction, including project conception, planning,
budgeting, tender processing, estimations, procurement, coordination, control and maintenance (5D building
model). Hence, the iTWO solution bridges the gap between CAD and ERP.
Over the next few years, RIB will seek to become the leading provider of digital software processes to the
construction industry on a global basis. Hence, the company will aggressively market iTWO. Additionally,
acquisitions and new products like the xTWO cloud should be further growth drivers.
SWOT Analysis
Strengths
• Leading market position in Germany
Weaknesses
• Country risk China (R&D is located there)
• Very solid balance sheet with more than EUR80m net
cash
• Partnership with Autodesk
• Track record in terms of delivering on the guidance was
poor after the IPO
Opportunities
• iTWO business suite could become an industry standard
Threats
• Acceptance of iTWO might be lower than expected
• Customer wins like YIT should attract more potential
customers
• Strategic acquisitions (MC² and US COST) should
accelerate growth especially in the US
• Could become member of the TecDAX
• Competitors might catch up faster than expected
• Strategic acquisitions might fail
Main shareholders: Free float 39.8%; Mr. Wolf & associates 32.2%; Sander family 7.3%;
Capital Group 6.7%; SAP 4.8%; Schroder 3.3%; UBS 3.0%; Henderson 3.0%;
Recommendation: At first glance the Q1 2014 results appear weak. However, this is not the case as none
of the achieved three Phase II deals was recognized in the p&l of Q1 2014. RIB confirmed the full year
guidance and Q2 2014 should now become a strong quarter. We maintain our price target of EUR15 and
reiterate our Buy recommendation.
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 17.00
titre
12
05/06/14 AGM
11
2013
10
9
RIB SOFTWARE SMALL & MID CAPS SELECTION
Analyst(s)
8
7
6
5
Jochen Rothenbacher, CEFA
4
3
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+49 69 58997 415
Equinet Bank
[email protected]
Jun 14
Source : Factset
163
Netherlands
SMALL & MID CAPS SELECTION
EUR 3.59
Buy
ROYAL BAM GROUP
BAMN.AS/BAMNB NA
Market capitalisation: EUR 867m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR4.73 / 3.09
12/12
7,225
191
2.6%
102
1.4%
-184
149
239
480
0.7
2.5
nm
26.9%
2.9
0.7
0.0
1.8
3.4
5.2
1.0
36.7%
3.1%
0.63
17.2%
3.08
0.10
-5.7%
12/13
12/14e
12/15e
7,042
7,138
7,390
160
213
278
2.3%
3.0%
3.8%
3.8
127
189
0.1%
1.8%
2.6%
37.7
78.1
138
101
75.9
136
203
166
229
373
217
-28.6
0.4
0.2
0.0
2.3
1.0
-0.1
nm
nm
nm
0.5%
15.9%
25.3%
0.1
1.7
2.7
0.7
0.5
0.3
0.1
0.0
0.0
2.6
1.5
0.6
nm
2.5
0.9
9.1
11.4
6.4
1.0
0.9
0.8
2.4%
9.3%
21.7%
1.4%
3.5%
6.3%
0.42
0.31
0.56
-33.5%
-24.6%
78.7%
3.85
4.13
4.57
0.05
0.13
0.23
-6.1%
-10.6%
-7.4%
Avg. Daily nb traded shares:2,833,573
Main shareholders: Free float 70.7%; A. van Herk 10.0%; ING 9.8%;
Delta Lloyd Deelnemingen 5.0%; Governance for Owners 4.5%;
Profile: BAM is the largest construction company in the Netherlands and a top-10 player in Europe with
sales of approximately EUR 7bn. Furthermore, the company has strong positions In the UK, Belgium and
Germany. With its large land bank it has a strong position on the currently lacklustre Dutch residential
property market and in the growing Public Private Partnerships market BAM has also a strong position.
SWOT Analysis
Strengths
• Size is an important driver and BAM is Nr. 1 in The
Netherlands/Belgium and top-5 position in the UK
• Well positioned in growth areas like PPP
• BAM International is benefiting from growth
opportunities outside Europe
Weaknesses
• BAM is a (late) cyclical company and relies heavily on the
economic cycle
• The way business was done in the sector in the past did
not comply with EU/Dutch competition regulations. More
not excluded
•issues
Largeare
exposure
to residential property
Opportunities
• Benefitting from a recovery in German construction
Threats
• Still mixed signals recovery Europe
• Budget balancing improves potential for Public Private
Partnership projects
• Increased investments in Rail Infra structure in Europe
• Continued margin pressure as a result of rising raw
material costs and higher subcontractor, which can not be
to the
customer hard to find
•passed
Skilledon
staff
is increasingly
Recommendation: BAM continues to be our favourite in the Dutch construction universe. The company
generates over half of revenues outside The Netherlands. The outlook for the Dutch construction sector
remains weak, but there are some early indicators of improvement. Valuation is still on attractive levels, but
the very weak outlook for Dutch construction could continue to weigh on investor sentiment We have a Buy
rating
All share prices at 19/05/14.
Target Price: EUR 4.20
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
5.0
20/05/14 Dividend Payment
4.5
4.0
3.5
2.5
2.0
1.5
Mar 11
164
ROYAL BAM GROUP SMALL & MID CAPS SELECTION
Analyst(s)
Edwin de Jong
3.0
Source : Factset
2013
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+312 0 5508569
SNS Securities
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 11.50
Buy
SAF-HOLLAND
SFQN.DE/SFQ GR
Market capitalisation: EUR 522m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR12.22 / 6.62
12/12
860
67.7
7.9%
46.8
5.4%
7.4
28.3
24.2
142
0.7
2.1
2.2
8.4%
0.9
1.0
0.5
5.7
8.3
7.7
1.1
-1.5%
0.0%
0.68
-6.8%
4.76
0.00
58.5%
12/13
12/14e
12/15e
857
942
1000
67.1
92.9
112
7.8%
9.9%
11.2%
49.3
67.8
88.0
5.7%
7.2%
8.8%
24.4
38.4
53.0
31.4
42.8
55.8
38.9
63.5
77.0
123
115
83.6
0.6
0.5
0.3
1.8
1.2
0.7
3.8
7.1
9.1
9.0%
11.9%
15.3%
0.9
1.2
1.6
1.7
1.7
1.6
0.7
0.7
0.6
9.5
7.1
5.6
13.0
9.8
7.2
15.6
12.2
9.4
2.2
2.1
1.8
4.8%
5.4%
9.7%
2.3%
3.7%
5.1%
0.69
0.94
1.23
1.7%
36.3%
30.4%
4.90
5.47
6.22
0.27
0.42
0.58
11.5%
-5.9%
5.2%
Avg. Daily nb traded shares:201,574
Profile: SAF-HOLLAND is one of the leading manufacturers of truck & trailer components. The company
was established in 2006 by the merger of two industry leaders: SAF, Europe’s Nr.2 producer of trailer axle
systems, and Holland in the US. The company is specialized in trailer axle systems, fifth wheels, suspension
systems, kingpins, landing gears and other parts. In addition SAF-HOLLAND maintains a global service
network.
SWOT Analysis
Strengths
• Strong market position in most business areas
Weaknesses
• Relatively low margins in the trailer systems
division
• Highly flexible production
Opportunities
• Margin potential in the Trailer Systems division
Threats
• Potential cyclical downturn of the truck and
trailer cycle
• Revenue potential in the high margin aftermarket
business
Recommendation: SAF-Holland is benefitting from the recovery of the truck and trailer market world wide at
the moment. The company is significantly better positioned than 2008, with debt reduced significantly, equity
strengthened and cost structures even more flexible. We thus see the company as well positioned to master
even the current difficult environment in the European market. Buy
Main shareholders: Free float 95.4%; Management 4.6%;
Target Price: EUR 14.10
All share prices at 19/05/14.
SAF-HOLLAND SMALL & MID CAPS SELECTION
Analyst(s)
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Tim Schuldt, CFA
+49 69 5899 7433
Equinet Bank
[email protected]
titre
14
13
12
11
10
9
8
7
6
5
4
3
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
165
Italy
SMALL & MID CAPS SELECTION
EUR 15.55
Hold
SAFILO
SFLG.MI/SFL IM
Market capitalisation: EUR 960m
Personal Goods
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR19.03 / 13.15
12/12
1,175
115
9.8%
73.9
6.3%
25.9
25.7
68.3
215
0.2
1.9
3.9
4.7%
0.5
0.5
0.5
5.0
7.8
16.0
0.5
6.6%
0.0%
0.42
-14.1%
13.89
0.00
14.2%
12/13
12/14e
12/15e
1,122
1,230
1,328
112
116
142
10.0%
9.5%
10.7%
74.7
74.4
99.7
6.7%
6.0%
7.5%
15.5
26.7
51.5
29.6
35.1
51.5
55.0
69.2
94.5
182
183
146
0.2
0.2
0.2
1.6
1.6
1.0
4.9
7.8
10.9
5.0%
4.8%
6.3%
0.5
0.5
0.7
1.2
1.0
1.0
1.1
0.9
0.8
10.7
9.5
7.5
16.0
14.9
10.8
35.5
27.3
18.7
1.2
1.1
1.0
0.0%
7.4%
8.4%
0.0%
0.0%
0.0%
0.48
0.57
0.83
15.2%
18.7%
46.5%
13.65
14.05
14.88
0.00
0.00
0.00
-10.0%
-8.3%
7.6%
Avg. Daily nb traded shares:194,992
Main shareholders: Free Float 48.5%; Hal Holding 42.2%; Tabacchi Family 9.2%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
20
18
16
14
12
10
8
Profile: Safilo is the second worldwide player in the eyewear sector. Main licensed brands are Gucci, Dior and Hugo Boss
and generate around 30 / 40% of total sales. A new licensing agreement was signed recently (June 2013) with Fendi. Safilo
also has proprietary brands: Carrera, Smith, Safilo, Oxydo, Blue Bay and the recently acquired Polaroid. The company
designs, manufactures and distributes worldwide mainly sunglasses and prescription frames. It runs 6 manufacturing plants
located in Italy, China and Slovenia. Safilo’s main channel is the wholesale. In the last couple of years the company had to
adapt its organization to a new brand mix: Diesel, Armani, Valentino, Nine West, Balenciaga licences were not renewed.
Tommy Hilfiger and Céline were newly signed while Polaroid was acquired (becoming one of the owned brands). The
phasing out of the mentioned licenses is complete with no big issues, Polaroid was launched with success as well as Céline.
First deadline for some minor licenses expiration is 2015 but the main licenses such as the Boss galaxy or Gucci and
Bottega Veneta are locked until 2019/2020. New managers were hired and Mr. Robert Polet (Gucci’s former CEO) is
Safilo’s Chairman. In June a new BoD was appointed and Ms. Luisa Delgado, who was candidate of HAL, became Safilo’s
CEO. This appointment will reinforce the position of the main shareholder.
Main Shareholder is currently HAL with 42.2% of total shares. HAL Holding, is an international investment company based
in Netherlands specialised in the optical retail business (it operates around 4,500 stores)
SWOT Analysis
Strengths
• Leadership in the luxury segment
Weaknesses
• Business dependant on licences
• 2010 financial and business restructuring were successful
• Moderate top line growth rate expected for 2014
• Recent phasing out of non-renewed licenses was
successful.
Opportunities
• HAL could strengthen Safilo’s bargaining power toward
suppliers, licensors and customers and provide fresh
finance
if needed
•
Proprietary
brands could grow
• Recent management reshuffling
Threats
• Weak macroeconomic context which penalises
discretionary purchases
• Risk of brands cannibalization, especially Carrera and
Polaroid
• Rationalisation of the licence portfolio helps to reduce
SKU’s but can spark negative mkt reaction.
• Launch of Polaroid as well as polarized lenses, which can
be extended also to other brands.
Recommendation: Our investment idea is based on:
Safilo well replaced lost licenses by new proprietary brands and new luxury licenses. First was Polaroid, acquired thanks
to HAL support. The brand is expected to generate higher sales than previously estimated (in the mid run EUR 100 /
150m). Polaroid lenses, produced by Essilor, will give boost to brand awareness and will generate royalties for Safilo.
This brand, together with Carrera and other owned brands is targeted to generate 25% of total revenues within few years.
This way, Safilo reduces its risk profile thanks to a higher percentage of revenues from owned brands vs. the past. Safilo
is regaining reputation in the world of luxury: this is witnessed by the agreements with new licenses (Fendi) and the Marc
Jacobs early renewal. HAL, the main shareholder, is supporting SFL strategic decisions and sustaining Safilos’ product
distribution through its retail chains (Grand Vision).The risk profile has also reduced thanks to the debt refinancing.
Considering the upside potential, our EUR18 price target reflects a buy rather than hold. We believe this could be
reached in a shorter time than we expect if the gross margin positive dynamics last also in the following quarters leading
to a targeted 11.5% / 12% FY 14E EBITDA margin and to 13.5% FY 15E EBITDA margin. According to the company, the
reach of EUR1,250 / 1,300m top line in FY 15 is not a must in order to obtain 13.5% EBITDA margin (and this is coherent
with the above mentioned accretive profitability dynamics).
Target Price: EUR 18.00
6
4
Mar 11
Source : Factset
166
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Giada Cabrino, CIIA
Banca Akros
+39 02 4344 4092
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 24.28
S1A.PA/SAFT FP
Market capitalisation: EUR 628m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR27.29 / 16.76
12/12
598
102
17.0%
68.9
11.5%
34.1
34.1
82.9
108
0.3
1.1
12.7
7.5%
0.9
0.9
0.9
5.4
8.0
13.9
1.1
2.8%
4.2%
1.27
-54.3%
15.72
0.75
27.1%
12/13
12/14e
12/15e
624
670
717
99.1
105
122
15.9%
15.6%
17.1%
61.1
65.9
83.0
9.8%
9.8%
11.6%
36.5
44.3
58.5
36.5
44.3
58.5
80.8
88.3
100
114
81.1
38.1
0.3
0.2
0.1
1.2
0.8
0.3
14.6
16.0
30.7
5.5%
6.7%
8.5%
0.6
0.8
0.9
1.2
1.1
1.1
1.2
1.1
0.9
7.7
6.7
5.4
12.4
10.7
7.9
18.8
15.1
11.4
1.6
1.4
1.3
2.4%
8.5%
10.2%
3.2%
3.3%
3.5%
1.33
1.61
2.13
4.4%
21.3%
32.1%
16.07
17.00
18.47
0.78
0.80
0.85
5.5%
-4.2%
-2.5%
Avg. Daily nb traded shares:41,555
Main shareholders: Free float 97.5%; management and employees 2.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
28
26
24
22
11/06/14 Dividend Payment
2013
19/05/14 Ex Dividend Date
2013
Profile: Global number one for industrial batteries with high market share in several niche markets: global
number one in 75% of its sales. Space and defence (16% of sales): portable equipment, tracers, radios,
missiles and torpedoes. Civil lithium (25% of sales): automatic meters, etc. Transport (22% of sales):
aviation (exclusive supplier to Airbus), trains. Industrial standby (35% of sales): safety batteries for oil-gas,
telecom, industries. Principal technologies: nickel-cadmium, primary lithium, rechargeable lithium, nickel–
metal hydride, lithium-ion (18% of sales).
SWOT Analysis
Strengths
• Long contracts, products made to client specifications:
pricing power
• Global number one in 75% of its revenues
• Variety of technologies, applications and clients, with
different cycles
18
16
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Weaknesses
• Late cyclical profile
• No longer exposed to the automotive sector since the JV
with JCI was dissolved
• Small-scale companies vs Asian giants
for Li-ion batteries
Opportunities
Threats
• Growth of lithium-ion applications in telecoms & military, • Cuts in government spending: defence, grants for
as well as storage of renewable energy
renewable energy
• Stronger competition in lithium-ion than in nickelcadmium
• Li-ion will be progressively substituted for Ni-Cd in some
applications
Recommendation: Saft is the profitable leader of a low-growth activity, Nickel-Cadmium, which is set to
lose market share to Lithium-ion, a technology that is expanding fast but in which competition is fierce. The
start-up of the Jacksonville plant (sales and profitability) is a risk factor: visibility remains low on the ramp-up
of the plant, and breakeven at the EBITDA level has been postponed to 2015. On the Lithium-ion market,
the group has exited the main application (automotive) following breakup of the JV with Johnson Controls.
Our EUR23.0 price target is based on a DCF method, of which EUR4.60 for the Jacksonville plant. At the
current stock price, the EV/EBIT 14e of 11.7x looks high to us, given the lack of visibility on the normalised
margins of Li-ion. The performances of H1-14 will be good, both on top-line and margins, on an easy base of
comparison.
Target Price: EUR 23.00
SAFT SMALL & MID CAPS SELECTION
Analyst(s)
20
14
Mar 11
Reduce
SAFT
Eric Ravary
+33 1 45 96 79 53
CM - CIC Securities
[email protected]
Source : Factset
167
Italy
SMALL & MID CAPS SELECTION
EUR 4.12
Hold
SALINI IMPREGILO
SALI.MI/SAL IM
Market capitalisation: EUR 1658m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR5.14 / 2.66
12/12
2,281
84.3
3.7%
-25.5
nm
603
680
713
-567
-0.3
-6.7
2.7
-1.8%
-0.2
0.8
0.3
7.8
nm
2.1
0.8
21.7%
42.2%
1.69
nm
4.49
1.49
-7.6%
12/13
12/14e
12/15e
3,970
4,435
5,115
626
474
552
15.8%
10.7%
10.8%
434
272
341
10.9%
6.1%
6.7%
299
129
182
252
129
182
491
330
393
331
244
232
0.2
0.1
0.1
0.5
0.5
0.4
10.7
5.5
7.2
19.4%
-28.0%
-76.8%
2.2
1.6
1.3
1.1
0.5
0.4
0.3
3.4
3.6
3.1
4.8
6.2
5.0
7.8
12.9
9.1
1.3
1.0
0.9
-20.2%
-1.0%
2.0%
0.0%
1.5%
1.9%
0.62
0.32
0.45
-63.0%
-48.9%
41.7%
3.73
4.05
4.44
0.00
0.06
0.08
-17.2%
-9.5%
-7.6%
Avg. Daily nb traded shares:251,734
Main shareholders: Salini Spa 89.7%; Free float 10.3%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
Profile: Impregilo is one of the main Italian construction companies and is involved in Infrastructure,
engineering, plant construction and concessions. In the Infrastructure sector, the group engages in public
works projects. It undertakes construction of dams and hydroelectric plants, roads, bridges, railways, airports
and underground railway works. In the Engineering sector, the group builds and provides technical
management services for desalination, water treatment and solid waste treatment plants.
SWOT Analysis
Strengths
• Historical leadership in large infrastructural works in
many countries
• Well recognised engineering technical capacity
Weaknesses
• Desalination plant business still suffering from lack of new
orders
• Smaller size compared to competitors
Opportunities
• Italian market has a sizeable infrastructure deficit vs other
European countries
• Geographical expansion
Threats
• The company is exposed to high-risk countries
Bid by Salini– In February 2013, Salini made a bid for Impregilo’s ordinary shares at EUR 4.0/sh. At the end
of the offer Salini reached 92.08% of Impregilo. Salini decided to keep the company listed.
Extraordinary dividend – Impregilo sold its stake in Ecorodovias for a total cash-in of around EUR 940m.
The company distributed EUR 600m in dividends (EUR 1.49/sh) in May 2013.
Merger of Salini and Impregilo - the boards of Impregilo and Salini approved the merger of the two
companies in June 2013. The merger is effective starting from January 2014.
Impregilo unveiled its business plan on the merger with Salini in June 2013. The new company will focus on
managing large complex projects where margins are expected to be higher and competition lower. The
company expects the revenues to almost double in the 2012-2016 period with an EBITDA and EBIT margin
to be respectively higher than 13.5% and 9% at the end of the plan.
Capital hike to increase free float – the company is going to increase the free float from the present 10%
(Salini owns a 89.95% stake) to 30/35%. The management said it was going to reach this goal both through
a capital increase without options and through the disposal of some of the shares owned by Salini in
Impregilo. The timing of these moves was not disclosed but we believe that both the moves can be finalized
in the next few weeks.
5.5
05/08/14 Results
5.0
4.5
4.0
2014H1
Conclusion & Action: the main focus is the increase in the free float which is expected to be finalized in the
next few weeks.
Target Price: EUR 5.30
3.5
3.0
2.5
2.0
1.5
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
SALINI IMPREGILO SMALL & MID CAPS SELECTION
Analyst(s)
Francesco Sala
168
+39 02 4344 4240
Banca Akros
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 32.17
Buy
SALZGITTER
SZGG.DE/SZG GR
Market capitalisation: EUR 1741m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR33.82 / 24.78
12/12
10,397
390
3.8%
25.2
0.2%
-102
-102
347
-241
-0.1
-0.6
3.1
1.6%
0.2
0.6
0.3
8.2
nm
nm
0.6
-1.5%
0.6%
-1.89
-chg
67.20
0.25
3.6%
12/13
12/14e
12/15e
9,244
10,176
10,439
165
411
557
1.8%
4.0%
5.3%
-364
68.5
220
nm
0.7%
2.1%
-499
24.4
140
-492
24.4
140
-93.7
433
429
-126
-196
-318
0.0
-0.1
-0.1
-0.8
-0.5
-0.6
2.1
3.5
4.6
-7.6%
1.2%
3.9%
-0.8
0.1
0.4
0.6
0.6
0.5
0.3
0.3
0.2
16.6
6.8
4.7
nm
40.6
11.8
nm
nm
12.4
0.5
0.5
0.5
-5.8%
3.8%
6.8%
0.6%
0.8%
1.1%
-9.10
0.45
2.60
-chg
+chg
nm
58.76
59.01
61.35
0.20
0.25
0.35
-0.3%
0.7%
5.4%
Avg. Daily nb traded shares:473,505
Profile: Salzgitter AG holds more than 200 domestic and international subsidiaries active in the steel and
technology industry. The company operates through five divisions. The Steel division manufactures flat steel
and profiles, plate, sheet piles, components for roofing and cladding, blanks and tailored blanks for a variety
of applications. The Trading division covers the Group's sales network for large-scale, medium-sized and
small end customers. The Tubes division offers large-diameter tubes, high-frequency inductive (HFI) welded
line pipes, cold-finished and seamless stainless steel tubes. The Services division caters for the needs of
other areas within the group and offers supply chain, logistics, research services and information technology
services to external clients. The Technology division comprises the Kloeckner Group, a supplier of plant
solutions for the food industry.
SWOT Analysis
Strengths
• SZG is one of Europe's largest flat steel makers and cost
leader in European pig-iron production
• Market leading position in large-diameter pipes and
precision tubes
• Healthy balance sheet vs. peers (eFY13 gearing: -12% /
equity-ratio: 37%)
Weaknesses
• With above 70% of sales in Steel/Trading, SZG is heavily
exposed to downturns in the steel sector
• Limited integration implies dependency on third parties
and comparably high sourcing costs
• High exposure to Europe makes SZG susceptible to
downturns in this region
Opportunities
• Net cash of eEUR370m provides financial stability and
leaves a wide range of strategic opportunities (i.e. M&A)
• High exposure to cyclical sectors offers earnings swing
potential during economic recovery
• The SZGA 2015 program should improve the company's
profitability and internal efficien
Threats
• European capacity overhang in long steel paired with
weak demand from the construction sector weighs on
•margins
SZG relies on external supply implying significant
problems if one of its suppliers does not deliver
• Despite operational improvements, price pressure is likely
to stay at 'Technology' weighing on margins
Main shareholders: Free float 59.4%; State of Lower Saxony 26.5%; Treasury shares 10.0%;
Blackrock 4.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: We continue to see SZG as an interesting restructuring story, with some additional help
from the improving steel cycle. 1Q14 results have provided strong evidence on the management’s
successful efforts to turn the company into a profitable business. Our new PT of EUR37 values the stock in
line with its closest EU steel peer ArcelorMittal (BUY, PT EUR16.10) at 5.1x (was 4.9x) FY15 EV/EBITDA.
This reflects a significant ‘restructuring discount’ to the EU steel sector which currently trades at 7.3x FY14
and 6.3x FY15. We confirm Buy.
Target Price: EUR 37.00
titre
55
50
45
14/08/14 Analyst Meeting
2014H1
13/08/14 Analyst Meeting
2014H1
40
22/05/14 AGM
35
SALZGITTER SMALL & MID CAPS SELECTION
Analyst(s)
Stefan Freudenreich, CFA
30
25
Mar 11
2013
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+49 69 58997 437
Equinet Bank
[email protected]
Jun 14
Source : Factset
169
Finland
SMALL & MID CAPS SELECTION
EUR 5.09
Accumulate
SANOMA
SAA1V.HE/SAA1V FH
Market capitalisation: EUR 828m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR7.24 / 4.52
12/12
2,379
557
23.4%
232
9.8%
115
115
446
1,241
0.8
2.2
9.7
5.8%
0.8
0.8
1.0
4.2
10.1
10.5
0.7
29.9%
8.1%
0.71
-11.6%
10.00
0.60
-23.3%
12/13
12/14e
12/15e
2,084
1,886
1,803
790
409
420
37.9%
21.7%
23.3%
155
128
140
7.4%
6.8%
7.8%
105
35.2
70.6
105
35.2
70.6
727
316
351
1,038
848
822
0.9
0.6
0.6
1.3
2.1
2.0
14.9
7.9
8.2
5.3%
4.4%
4.7%
0.7
0.6
0.7
0.8
0.7
0.6
0.9
0.8
0.8
2.3
3.5
3.3
11.8
11.1
10.0
9.9
23.5
11.7
0.9
0.6
0.6
62.2%
27.1%
33.1%
2.0%
3.9%
3.9%
0.64
0.22
0.43
-9.1%
-66.3%
100.5%
7.24
8.38
8.62
0.10
0.20
0.20
-25.5%
-4.8%
9.4%
Avg. Daily nb traded shares:117,647
Main shareholders: Free float 54.0%; Aatos Erkko 23.0%; Langenskiöld Robin 7.5%;
Profile: Sanoma specialises in consumer media and learning solutions and is one of the leading European
magazine publishers and learning materials providers. Recently, the company has made fast progress in
restructuring by divesting meagrely growing operations, and the company has focused on advancing organic
growth.
SWOT Analysis
Strengths
• Strong market position in main product areas/countries of
operation
• Business not entirely dependent on advertising markets
as learning materials create stability
• Acquisition of SBS increased debt load substantially
• Low free float
• Exceptionally weak outlook for magazine advertising
Opportunities
• Further streamlining
Threats
• Structural issues in print media (circulation declining)
• Cost savings potential
• Low barriers to entry in digital media
• Investment in digital media
• Media spending focuses increasingly on social media
• Inability to handle the debt load
Recommendation: Sanoma has undergone an extensive structural change and will spend the next few
years integrating its operations. The weakness of media advertising in Europe is having a full-blown impact
on Sanoma’s profits, but the company’s ongoing savings programmes (EUR 100m, 2013–2015) limits profit
drop. Minor bright spots have emerged particularly on the TV market and, after Q1 results, we raised our
recommendation for the share to Accumulate. The share price is close to its all-time low and we expect the
worst decline to be over.
Seppälä Rafaela 6.3%;
All share prices at 19/05/14.
Target Price: EUR 5.70
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Weaknesses
• Unimpressive organic growth
titre
14
13
25/07/14 Results
2014Q2
25/07/14 Analyst Meeting
2014Q2
12
11
10
9
Kimmo Stenvall
8
7
6
5
4
Mar 11
Source : Factset
170
SANOMA SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4561
Pohjola
[email protected]
Portugal
SMALL & MID CAPS SELECTION
EUR 10.30
Hold
SEMAPA
SEM.LS/SEM PL
Market capitalisation: EUR 1219m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR11.03 / 6.29
12/12
1,953
495
25.3%
295
15.1%
127
127
361
1,601
1.4
3.2
7.9
6.7%
0.8
0.7
1.2
4.6
7.7
5.3
0.8
39.7%
2.5%
1.07
1.9%
6.73
0.26
46.2%
12/13e
12/14e
12/15e
1,965
1,849
1,905
398
356
357
20.2%
19.3%
18.7%
249
209
208
12.7%
11.3%
10.9%
78.7
60.5
58.1
78.7
60.5
58.1
260
229
228
1,601
1,660
1,646
1.4
1.4
1.4
4.0
4.7
4.6
4.4
3.9
3.7
5.7%
4.6%
4.6%
0.7
0.6
0.6
0.8
0.9
0.9
1.3
1.6
1.5
6.4
8.1
8.0
10.3
13.8
13.8
12.2
20.1
21.0
1.2
1.5
1.4
13.0%
-0.6%
5.3%
2.5%
2.5%
2.5%
0.67
0.51
0.49
-37.8%
-23.1%
-4.0%
6.80
7.06
7.29
0.26
0.26
0.26
31.4%
0.5%
2.3%
Avg. Daily nb traded shares:53,298
Main shareholders: Cimigest 51.1%; Free float 22.6%; BPI 10.6%;
Bestinver 10.5%;
Profile: Semapa is a holding company with exposure to pulp and paper (with a significant interest in
Portucel) and cement (via Secil). Semapa’s value should be closely linked to that of Portucel, and in the
sense that Portucel is a listed company it makes it easier for investors to determine part of the overall market
implicit NAV and the performance of Semapa’s stock price versus its asset portfolio at market prices.
The main source of value of Semapa continues to come from its stake in Portucel, a pulp and paper
company. Semapa is a holding that aggregates 76% of Portucel and 100% of Secil (Semapa is now the sole
shareholder of Secil after buying CRH’s 49% of the company), amongst other small stakes in other areas.
With Secil now fully consolidated and the bet on Brazil’s Supremo, the company is pursuing its desire to
develop a growth strategy for the cement business. This strategy should be backed by the dividends from
the pulp and paper area (Portucel), endogenous cash from cement activities and debt, but very much
supported by Semapa’s stake in the first.
SWOT Analysis
Strengths
• Portucel is one of the largest and most efficient pulp and
paper producers in Europe
• Very significant cash flow profile through its stake in
Portucel
• Leadership position in office paper through its stake in
Portucel
• One of the major cement players in Portugal
Weaknesses
• Heavily dependent on the economic cycle
Opportunities
• Investment in pulp capacity in Africa or LatAm cuts the
distance to Chinese market and enhances margin
• Development of biomass, namely acknowledging the
potential for an upgrade revision in pricing policy
• Expansion of cement production to high growth markets
Threats
• Economic slowdown
• Portuguese cement market is approaching full maturity
• Construction spending in Portugal very dependent on
State investment programmes
• Lower construction activity in its cement markets
• Decrease in paper prices
All share prices at 19/05/14.
Recommendation: We reach a YE14 fair value of EUR 9.60 per share and a Hold recommendation.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
11
23/05/14 AGM
10
Target Price: EUR 9.60
2013
9
SEMAPA SMALL & MID CAPS SELECTION
Analyst(s)
8
7
6
5
4
mar 11
jun 11
set 11
dez 11
mar 12
jun 12
set 12
dez 12
mar 13
jun 13
set 13
dez 13
mar 14
jun 14
Carlos Jesus
+351 21 389 6812
Caixa-Banco de Investimento
[email protected]
Source : Factset
171
Italy
SMALL & MID CAPS SELECTION
EUR 8.47
Buy
SIAS
SIS.MI/SIS IM
Market capitalisation: EUR 1928m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR9.01 / 6.22
12/12
998
570
57.1%
310
31.0%
493
138
768
1,521
0.8
2.7
5.1
6.8%
1.0
0.6
2.7
4.7
8.6
11.6
0.9
4.2%
5.8%
0.61
-4.7%
7.58
0.41
15.1%
12/13
12/14e
12/15e
1,047
1,037
1,109
566
605
650
54.1%
58.4%
58.6%
308
324
341
29.4%
31.2%
30.7%
139
142
152
139
142
152
420
448
487
1,670
1,798
1,889
0.8
0.9
0.9
3.0
3.0
2.9
7.7
7.8
7.8
7.4%
7.3%
-7.3%
1.1
1.1
0.7
0.7
0.7
2.7
3.2
3.1
5.0
5.5
5.3
9.2
10.2
10.1
11.8
13.6
12.7
1.0
1.1
1.1
-6.4%
-4.0%
-0.7%
14.2%
4.1%
4.8%
0.61
0.62
0.67
0.3%
2.1%
7.4%
7.38
7.65
7.91
1.20
0.35
0.40
11.1%
4.6%
0.5%
Avg. Daily nb traded shares:163,195
Main shareholders: Gavio Group 73.3%; Free float 18.0%; Lazard AM 5.0%;
Generali Group 3.6%;
Profile: SIAS is the second largest national operator in motorways, managing 9 highway concessions in
Italy for a total network of more than 1,000km. The average expiry for the motorway concessions is 2026.
The company also operates in the technology sector through subsidiaries SINELEC and Euroimpianti
Electronic and in the construction sector (motorway infrastructure maintenance and expansion services
primarily for group concession operators) through subsidiary ABC Costruzioni and Itinera.
SWOT Analysis
Strengths
• Long term duration of the concession portfolio
• New focus only on highway management-core business
Weaknesses
• Economic slowdown could negatively affect group’s
results
• Capex profile will remain at peak level for 2-3 years and
this can drain FCF generation
Opportunities
• New law on concessions
Threats
• high oil price could hit light vehicles traffic
• Acquisition of other concessions
• A rise in interest rates
• Increased regulatory risk
Lengthening of concessions - It is our understanding the Italian government is considering approving a new
regulation on concessions. The Italian government in order to lower the impact of the investments on tariff
increases could approve a decree aimed at incentivizing the merger of concessions (according to some
statements by the Minister of Infrastructure). The goal of this law would be to smooth the tariff increases
which can be particularly high because of a prolonged period of weak traffic and because of a close
concession expiry. The main features of the foregoing law, according to press rumours, would be the
alignment of the concession expiry to the longest one between the companies involved in the merger and
the chance to spread the tariff increases among different concessions.
Tem/Brebemi – Sias invested around EUR 270m in the projects «BreBeMi» and «Tem». Once completed
these two new motorways could sizeably increase the company’s revenues and EBITDA (around EUR 400m
cumulated per year once completed).
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
Italian traffic is improving - the traffic on Italian network was up 1.5% y/y in the first four months of the year
with the “heavy” component rising 2.3% y/y.
9.0
8.5
Recommendation: We confirm our positive view on the stock on the back of better traffic and higher tariffs.
8.0
7.5
Target Price: EUR 10.00
7.0
6.5
6.0
Analyst(s)
5.5
Francesco Sala
5.0
4.5
Mar 11
Source : Factset
172
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Banca Akros
+39 02 4344 4240
[email protected]
Switzerland
SMALL & MID CAPS SELECTION
CHF 158.00
Buy
SIEGFRIED HOLDING AG
SFZN.S/SFZN SW
Market capitalisation: CHF 620m
General Industrials
CHF
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: CHF170.00 / 123.40
12/12
368
44.2
12.0%
16.8
4.6%
20.9
20.9
70.4
-25.8
-0.1
-0.6
22.0
12/13
375
64.9
17.3%
40.1
10.7%
53.7
47.6
64.3
-50.4
-0.1
-0.8
nm
12/14e
371
72.0
19.4%
42.0
11.3%
42.0
42.0
75.0
-6.7
0.0
-0.1
24.0
12/15e
397
78.5
19.8%
45.5
11.5%
46.5
46.5
81.5
-21.7
-0.1
-0.3
39.3
Profile: Siegfried is a contract manufacturing organization offering the manufacture of drub substances and
drug products to the pharmaceutical and biotechnology industry. Sites in Zofingen (Switzerland), Hal Far
(Malta), Pennsville (New Jersey), Irvine (California); a site in Nantong near Shanghai is under construction.
SWOT Analysis
Strengths
• Servcie offering comprises drug substances as well as
drug products
• Broad customer base
Weaknesses
• Relatively low margins
• Relative lack of "anchor" investors
• Balanced portfolio of services
1.0
8.3
21.8
20.5
1.4
5.9%
0.8%
5.56
117.8%
84.20
0.97
23.5%
1.3
7.8
12.6
13.3
1.7
3.7%
0.7%
12.14
118.2%
92.40
1.09
2.3%
1.6
1.5
8.3
7.5
14.2
12.9
14.8
13.4
1.6
1.5
-6.8%
3.9%
0.9%
1.1%
10.71
11.82
-11.8%
10.4%
99.62
107.64
1.50
1.80
-3.7%
-2.5%
Avg. Daily nb traded shares:1,471
Main shareholders: Free float 74.6%; Tweedy Browne 9.9%; Rainer Marc Frey 9.5%;
KSK Biberach 3.6%;
• Profitable operations, strong balance sheet
Opportunities
• Growth of the contract manufacturing market
Threats
• Operational risks
• Capacity expansion
• Long-term risks related to the pharmaceutical market
• Margin expansion
Recommendation: We rate Siegfried shares a Buy, as we expect a 15% basic EPS CAGR 2012-2020 on
the basis of strong top-line growth, operating leverage and various efficiency measures. We set a
DCFderived price target of CHF202. For detail, please refer to our 32-page fundamental report published on
January 7, 2014.
All share prices at 19/05/14.
Target Price: CHF 202.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
180
170
160
150
SIEGFRIED HOLDING AG SMALL & MID CAPS SELECTION
Analyst(s)
Marietta Miemietz CFA
140
130
+49-69-58997-439
Equinet Bank
[email protected]
120
110
100
90
80
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
173
Belgium
SMALL & MID CAPS SELECTION
EUR 63.50
Hold
SIPEF
SIFB.BR/SIP BB
Market capitalisation: EUR 568m
Food & Beverage
USD
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR63.60 / 50.00
12/12
242
78.5
32.4%
68.6
28.4%
49.8
44.3
55.7
-13.3
0.0
-0.2
nm
12.1%
1.4
1.3
2.3
6.9
7.9
11.4
1.5
-1.7%
2.7%
4.95
-28.2%
38.48
1.59
15.4%
12/13
213
69.9
32.8%
57.8
27.2%
40.8
34.0
46.8
23.3
0.1
0.3
nm
9.0%
1.0
1.2
2.7
8.2
10.0
15.3
1.4
-3.9%
1.9%
3.80
-23.3%
41.37
1.21
15.1%
12/14e
12/15e
230
230
85.3
84.4
37.0%
36.6%
72.3
70.6
31.4%
30.6%
47.6
46.8
40.2
38.6
56.1
55.4
21.9
20.2
0.1
0.0
0.3
0.2
37.8
50.1
10.3%
9.4%
1.2
1.1
1.2
1.1
2.7
2.7
7.3
7.4
8.7
8.8
14.1
14.7
1.4
1.3
2.4%
2.6%
2.0%
2.0%
4.49
4.32
18.3%
-3.9%
45.80
49.77
1.26
1.26
9.5%
2.7%
Avg. Daily nb traded shares:3,387
Profile: Sipef's primary activity consists in taking stakes in palm oil, natural rubber, banana and tea
plantations. These activities generally include downstream industrial as well as commercial activities. Sipef
markets its own products and at times those of other producers, enabling it to earn commission income. Its
holdings are concentrated mainly in southeast Asia. Sipef has holdings in nine plantations in Indonesia
and two in Papua New Guinea (PNG). These plantations mainly produce crude palm oil (CPO), palm
kernels, rubber and tea, and account together for ca. 93% of the group's gross profit. Sipef aims to
increase its planted acreage from 52,280 ha (group’s share) at the end of FY13 to 100,000 ha in 2020,
through the expansion of its existing plantations, the buy-out of minorities and new projects.
SWOT Analysis
Strengths
• Management’s skills for tropical plantations
• Favourable cost base of the Indonesian plantations
• All plantations are vertically integrated
• 100% of the crude palm oil production is Roundtable on
Sustainable Palm Oil (RSPO) certified
Opportunities
• Expansion of planted areas & acquisitions of other
plantations / green fields
• Acquisition of minority interests in plantation managed by
Sipef
• Demand from Asian emerging markets like China and
India + demand from bio-diesel industry
All share prices at 19/05/14.
PRICE (SHORT & LONG AVERAGE)
FINANCIAL CALENDAR
titre
75
Recommendation: 1Q14 crude palm oil production was particularly strong in North Sumatra as well as in
Papua New Guinea, with double digit growth. However, the comparison base was very favourable for both
Tolan Tiga and Hargy Oils. 62% of the expected CPO sales have already been placed on the market at an
average price equivalent to USD 948/t CIF Rotterdam. In addition, 41% of rubber volumes were sold at an
average of USD 2,179/t FOB and a third of the tea volumes at ±USD 2,330/t FOB. Given the potential risk
associated to El Niño, we do not change our production estimate for FY14 (+9% for the own CPO
production). However, given the higher than expected proportion of CPO volumes already sold at slightly
better terms, we have further increased our average CPO price for FY14 by USD 11/t. HOLD.
11/06/2014: AGM
70
Target Price: EUR 65.00
65
21/08/2014: 1H14 results
60
55
23/10/2014: 3Q14 trading update
50
45
Mar 11
Source : Factset
174
Threats
• Mainly active in countries with a political risk (Indonesia
and Papua New Guinea)
• Weakness of the USD versus EUR or versus IDR and/or
PGK (50% of the production costs are in local currency)
• Substitution risk of the natural rubber by synthetic rubber
• Strong increase in labour costs both in Indonesia and in
Papua New Guinea
Main shareholders: Free float 49.7%; Baron Bracht family + AVH 39.6%; FIM Belgium 5.5%;
Alcatel Pensioenfonds 5.3%;
Weaknesses
• High dependence on one crop (palm oil accounted for ca.
80% of the gross profit)
• Negative image of the crude palm oil in some regions due
to the deforestation in Indonesia
• Size of the market capitalisation and low liquidity of the
share
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
SIPEF
Analyst(s)
Bernard Hanssens
Bank Degroof
+32 (0) 2 287 9689
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 30.50
Buy
SLIGRO
SLIGR.AS/SLIGR NA
Market capitalisation: EUR 1331m
Food & Drug Retailers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR31.17 / 25.50
12/12
2,467
142
5.8%
88.5
3.6%
68.6
68.6
119
73.1
0.1
0.5
26.9
10.3%
1.4
1.6
0.4
7.2
11.6
13.9
1.7
8.7%
4.8%
1.56
-12.4%
12.64
1.05
18.0%
12/13
2,498
142
5.7%
88.5
3.5%
68.0
68.0
115
37.8
0.1
0.3
31.2
10.7%
1.4
2.0
0.5
9.0
14.4
18.2
2.2
7.2%
3.4%
1.55
-0.6%
13.02
1.05
12.6%
12/14e
12/15e
2,615
2,723
153
163
5.9%
6.0%
98.8
108
3.8%
4.0%
74.9
83.2
74.9
83.2
126
134
10.0
-26.8
0.0
0.0
0.1
-0.2
33.6
47.9
11.7%
13.0%
1.6
1.7
2.1
2.0
0.5
0.5
8.8
8.0
13.6
12.0
17.8
15.9
2.2
2.1
6.2%
6.6%
3.9%
4.3%
1.72
1.92
10.7%
11.7%
13.66
14.36
1.20
1.30
4.3%
-0.4%
Avg. Daily nb traded shares:6,345
Main shareholders: Free float 34.2%; St. adm. kantoor Slippens 34.0%; Darlin 6.1%;
ING Groep 5.4%; FMR 5.2%; Arkelhave 5.1%; Boron Investments 5.0%; T. van Wettum 5.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
32
Profile: Sligro Food Group is active on the Dutch market as a food service company and as a food retailer.
In food retail, Sligro has a market share of about 3%. It operates the Em-Té format. Sligro is the leader in
the foodservice market in the Netherlands operating >40 cash-and-carry stores and >10 distribution centres.
Its market share in foodservice amounts to c. 20%. In the sub-segment cash-and-carry, market share is
35%.
SWOT Analysis
Strengths
• Strong and dedicated management team
Weaknesses
• Profitability of Sligro's food retail format
• Membership of larger buying consortium
• Price/quality positioning of food retail
• Competitive advantage from a vertically integrated
business model in fresh ranges
• Large marketleadership in cash-and-carry
• Small market share food retail
Opportunities
• Improve the positioning of Em-Té in order to improve
floor productivity
• Apply best practices from food retail in foodservice and
vice versa
• Benefit from consolidation in the foodservice market
Threats
• Sligro is more cyclical than a pure food retailer due to the
foodservice activities
• Competitive pricing environment
• Execution regarding conversion of all stores to the new
Em-té format
Recommendation: We rate Sligro shares Buy with a target price of EUR 35. Our recommendation is based
on 1) Continued growth despite continued difficult market conditions in the Netherlands, where consumers’
disposable income is under pressure and unemployment is high in a historical context. As a consequence,
competition in the industry is fierce. 2) Sligro’s foodservice business remains the star performer of the
company. We expect it to continue gaining market share due to its focus on specific customer segments and
operational excellence. Still, market circumstances in this part of the business also remain difficult. 3) The
food retail segment is under scrutiny as it needs to improve profitability. 4) We believe Sligro is a good
example of a company with a management team that has a clear focus on long-term goals. 5) Integration of
acquisitions is a core competence. 6) Conditions in 2014 are incidentally very positive as good weather
1H14 supports sales, and the bankruptcy of competitor De Kruidenier adds 4% to growth for Sligro Group.
Based on our DCF outcome, we rate the stock a BUY.
Target Price: EUR 35.00
30
28
26
SLIGRO SMALL & MID CAPS SELECTION
Analyst(s)
24
22
20
18
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Gerard Rijk
+ 31 (0)20 550 8572
SNS Securities
[email protected]
Source : Factset
175
Italy
SMALL & MID CAPS SELECTION
EUR 3.94
Accumulate
SOGEFI
SGFI.MI/SO IM
Market capitalisation: EUR 460m
Automobiles & Parts
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR4.98 / 2.17
12/12
1,319
121
9.2%
62.8
4.8%
29.3
32.5
90.9
296
1.4
2.4
7.3
9.7%
1.5
1.1
0.4
4.2
8.2
7.0
1.2
16.8%
7.6%
0.28
11.9%
1.68
0.15
76.2%
12/13
12/14e
12/15e
1,355
1,379
1,459
126
137
166
9.3%
9.9%
11.4%
69.1
73.6
99.4
5.1%
5.3%
6.8%
21.1
26.0
41.1
32.0
38.8
45.9
82.0
92.1
113
305
325
322
1.6
1.5
1.3
2.4
2.4
1.9
4.4
4.9
5.8
10.6%
11.2%
12.4%
1.6
1.7
1.9
1.7
1.5
1.4
0.6
0.6
0.6
6.6
6.0
4.9
12.1
11.1
8.2
15.9
11.9
10.0
3.0
2.4
2.1
2.3%
-0.7%
4.0%
0.0%
3.2%
0.0%
0.27
0.33
0.39
-1.5%
21.2%
18.5%
1.44
1.67
1.89
0.00
0.13
0.00
-5.4%
-4.6%
-16.9%
Avg. Daily nb traded shares:148,642
Profile: Sogefi is a TIER 1 automotive component supplier; the company is the EU leader in the automotive
filtration system market with a ~60% share; Sogefi has also a strong positioning in LAT AM in this business
(~40% of market share). Sogefi also produces suspension systems with significant shares both in Europe
and Latin America.
Sogefi recorded ~64% of its FY13 revenues in Europe (~-2% Y/Y), ~17% of them in Latin America (~-3%
Y/Y), 14% in the NAFTA area (~+24% Y/Y) and ~5% in Asia (+6% Y/Y).
After years of growth through acquisitions, the recently-appointed CEO intends to focus more on organic
growth and on boosting/developing the internal technological skills of the company; Sogefi has sped-up the
European footprint restructuring in 2013 and 2014 and the company's margins should benefit from both the
ongoing European recovery and a more efficient cost base.
SWOT Analysis
Strengths
• Good client/geographic diversification
Weaknesses
• Sogefi relies for ~60% of its revenues on Europe
• Skilled management team
• Sogefi is much smaller than many competitors
• Good ability for product innovation
Opportunities
• Growth in developing countries
• Launch of the first composite suspensions
• A recovery in the truck market may grant a margin
expansion
Threats
• Competition from low cost countries, especially in the
filtration business
• EU-South Korea free-trade agreement is likely to increase
the competitive pressure
• Mature and very competitive reference market
Main shareholders: CIR 56.3%; Free float 35.9%; JP MORGAN AM 5.0%;
Giovanni Germano 2.7%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
5.0
4.5
4.0
Recommendation: Sogefi revenues came in at EUR 1.3bn in 2013 (~+1% Y/Y), EBITDA reached EUR
126m (~+4% Y/Y, at 9.5% of revenues), while EBIT was ~EUR 69m (+10% Y/Y, at 5.2% of revenues); the
bottom line recorded a EUR 21m net profit (-28% Y/Y, due to higher restructuring costs), while the NFP
came in at EUR -305m (EUR -296m as at the end of 2012).
The European car and heavy truck market is recovering and Sogefi is set to benefit from this trend; the
company is posting strong growth rates in North America and Asia, while Latin American operations may
suffer in the short term. We expect Sogefi’s top line to grow moderately, with slightly improving operating
margin: we expect a stronger growth next year. Sogefi trades at 11.9x in terms of P/E, when the European
industry trades at ~13.5x; our DCF model gives us a EUR 5.0 target price; we advise to accumulate the
stock.
Target Price: EUR 5.00
3.5
3.0
SOGEFI SMALL & MID CAPS SELECTION
Analyst(s)
2.5
2.0
1.5
Mar 11
Source : Factset
176
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Gabriele Gambarova
+39 02 43 444 289
Banca Akros
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 2.17
Accumulate
SORIN
SORN.MI/SRN IM
Market capitalisation: EUR 1039m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.31 / 1.90
12/12
731
96.7
13.2%
36.9
5.1%
23.0
12/13
12/14e
12/15e
738
767
794
131
138
143
17.8%
18.0%
18.0%
70.1
82.0
92.5
9.5%
10.7%
11.6%
49.9
61.8
68.6
49.9
61.8
68.6
111
118
119
68.7
13.1
-52.3
0.1
0.0
-0.1
0.5
0.1
-0.4
12.7
20.7
36.1
9.7%
11.2%
12.5%
1.0
1.5
1.7
1.6
1.6
1.4
1.5
1.5
1.3
8.7
8.2
7.5
16.3
13.8
11.6
16.8
16.8
14.7
1.6
1.5
1.4
3.3%
5.1%
5.9%
0.0%
0.0%
0.0%
0.12
0.13
0.15
157.5%
4.5%
14.3%
1.27
1.40
1.55
0.00
0.00
0.00
5.1%
-3.6%
3.0%
Avg. Daily nb traded shares:906,212
82.8
87.8
0.2
0.9
6.8
5.4%
0.6
1.4
1.3
10.1
26.4
35.0
1.4
6.7%
0.0%
0.05
-60.3%
1.17
0.00
2.3%
Main shareholders: Free float 70.0%; Bios 18.9%; Equinox two 6.6%;
Unipol 4.5%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
2.4
30/07/14 Results
2.2
2.0
1.8
1.6
1.4
2014H1
Profile: Sorin is currently one of the main players in the manufacture of medical devices for the treatment of cardiovascular
diseases. It develops, manufactures and markets medical technologies for cardiac surgery and for the treatment of cardiac
rhythm disorders. The group focuses on 3 major therapeutic areas 1) cardiopulmonary (global market leader with 40%
market share); 2) HV - heart valve repair and replacement (global market share above 10% due to a large market share of
around 30% in mechanical valves and growing opportunities in tissue valves, especially thanks to the penetration of the US
market and the launch of an innovative satureless biological valve); 3) CRM - cardiac rhythm management (with strong
presence in some key European countries and in Japan).
SWOT Analysis
Strengths
• Global leadership in Heart-lung machines
Weaknesses
• High R&D costs to maintain its competitiveness
• Strong relationship with cardiac surgeons
• Strong impact of exchange rates
• Good management track-record in restructuring
• Sudden changes in the health regulation
• Stable profitability and strong cash flow generation
• Potential risk of delay in obtaining approval of new
products by Medical Authorities
Threats
• Increasing competition in the future due to the
continuous growth of minimally invasive procedures
• Further strengthening of big US competitors through
potential consolidation processes
Opportunities
• Further penetration in the emerging markets
• Further expansion in the USA (especially in HV and CRM)
• New acquisitions to increase its critical mass
• Development of new technological platforms
Feasible strategic plan (2013-2018): the business plan presented last November, which updates the previous plan
(September 2012), confirms the growth trend of sales (organic and through bolt-on acquisitions) and shows that
there is room to significantly improve the group’s net profit (FY18 EPS >20 and cumulated FCF at EUR 350-400m).
FY2013: it was the year in which sales and profitability completely recovered after the negative impact of the
earthquake in May/June 2012. 2014/15: these will be the years in which the group will consolidate its market
position and continue to grow in the base businesses and, at the same time, invest in the new growth platforms and
in the emerging markets. 2016/18: this is when growth will accelerate thanks to the market launch of new
technologies (oxygenators Inspire, valve Perceval, SonR and KORA in CRM) and an increase in emerging market
penetration.
Recommendation: we confirm our Accumulate recommendation and our target price of EUR 2.70 per share
(valuation based on DCF model - WACC 7.4% and 1.5% perpetual growth rate).
Speculative appeal: we remind investors that the main shareholders are currently financial investors: the
shareholders pact signed in October 2009 expired on 18th November 2013; so, after two placements in the last few
months for about 51.5m shares, the current free float is 70.0% from 52.6% in 2010. Considering that
financial investors are normally targeting their return on investment over a shorter period, compared to industrial
owners, we see a speculative potential for the stock. We do not believe the remaining stake held by Unipol (4.5%),
the last stakeholder of the old pact, can represent any drag on the stock performance.
Target Price: EUR 2.70
1.2
1.0
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Paola Saglietti
Banca Akros
+39 02 4344 4287
[email protected]
177
Finland
SMALL & MID CAPS SELECTION
EUR 3.71
Hold
SPONDA
SDA1V.HE/SDA1V FH
Market capitalisation: EUR 1050m
Real Estate
EUR
12/12
258
177
66.9%
41
(68)
91
105
105.04
1,698
3,345
2,717
0.37
0.17
4.44
(19.0%)
4.84
10.3%
4.7%
15.4
10
2.6
1,698
48.2%
-13.7%
12/13
12/14e
12/15e
257
241
222
EBITDA (m)
177
160
144
EBITDA margin
67.1%
65.2%
65.1%
Portfolio Result (m)
(11)
(4)
0
Net Financial Result
(60)
(55)
(54)
Net Profit (reported)(m)
102
79
69
Net Profit (adj.)(m)
114
103
88
Funds From Operations
113.72
102.67
87.58
Net Debt (m)
1,762
1,654
1,680
Portfolio Value (m)
3,342
3,098
3,143
Enterprise Value (m)
2,730
2,705
2,730
EPS (adj.)
0.40
0.36
0.31
DPS
0.18
0.18
0.18
IFRS NAVPS
4.64
4.73
4.80
Premium/(discount)
(26.2%)
(21.5%)
(22.7%)
EPRA NAVPS
5.29
5.41
5.45
Earnings adj. yield
10.8%
9.8%
8.3%
Dividend yield
4.9%
4.9%
4.9%
EV/EBITDA
15.4
16.9
18.9
P/E (adj.)
9
10
12
Int. cover(EBITDA/Fin.int)
3.0
2.9
2.7
Net debt/(cash) (m)
1,762
1,654
1,680
Net Debt/Total Assets
50.8%
48.4%
48.6%
Abs. Performances(12m,6m,3m,1m):
0.3%
-3.1%
-1.9%
12 month High/low: EUR4.40 / 3.34
Avg. Daily nb traded shares:81,803
Main shareholders: Free float 85.1%; Oy Palsk Ab 14.9%; Keskinäinen Työeläkevakuutusyhtiö Varma 10.3%;
Gross Rental Income (m)
Keskinäinen Eläkevakuutusyhtiö Ilmarinen 9.6%;
Profile: Sponda is a real estate investment company focused on office space in the Helsinki central
business district and Ruoholahti. In addition to owning office space in Finland and Russia, the company has
retail and logistics properties in Finland. The Finnish properties are in the Helsinki metropolitan area, Oulu,
Tampere and Turku, and the Russian properties in St. Petersburg and Moscow. The company has decided
to exit from Russia, logistics and Turku within 3–5 years and to focus on retail and office space in the
Helsinki metropolitan area and Tampere.
SWOT Analysis
Strengths
• Focuses on prime office and retail properties in Helsinki
and Tampere
Weaknesses
• High vacancy rate
• Property portfolio includes several weaker holdings
Opportunities
• Successful implementation of strategy to sell logistics and
Russian portfolio
• Increasing volume of property development
Threats
• Weak trend in office demand persisting for long
• Abruptly rising interest rates increasing financing costs
Recommendation: While Sponda's P/NAV and P/E ratios are among the sector’s lowest, EBITDA/EV15e is
at 5.5%, which we consider fair for Sponda's current assets. Further upside would require recycling of capital
from high-yield non-core to low-yield core in accordance with strategy, with no impact on cash flow.
All share prices at 19/05/14.
Target Price: EUR 3.90
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
4.4
01/08/14 Results
4.2
4.0
3.8
3.6
3.2
3.0
2.8
2.6
Mar 11
178
SPONDA SMALL & MID CAPS SELECTION
Analyst(s)
Matias Rautionmaa
3.4
Source : Factset
2014Q2
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4408
Pohjola
[email protected]
France
SMALL & MID CAPS SELECTION
EUR 56.20
Hold
STALLERGÈNES
GENP.PA/GENP FP
Market capitalisation: EUR 755m
Healthcare
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR61.92 / 50.08
12/12
240
69.4
28.9%
55.6
23.2%
37.4
37.4
56.8
-90.4
-0.5
-1.3
nm
36.9%
3.7
4.9
2.0
7.0
8.8
15.5
3.1
5.3%
1.3%
2.77
1.2%
13.91
0.75
9.6%
12/13e
245
71.3
29.2%
57.2
23.4%
40.4
40.4
54.5
-120
-0.6
-1.7
nm
37.7%
3.8
6.1
2.5
8.5
10.7
18.2
3.4
5.5%
1.3%
2.99
8.0%
16.16
0.75
2.1%
12/14e
12/15e
264
284
80.3
86.8
30.5%
30.5%
65.9
72.0
25.0%
25.3%
45.2
49.4
45.2
49.4
59.6
64.1
-155
-193
-0.6
-0.7
-1.9
-2.2
nm
nm
43.4%
47.3%
4.4
4.8
6.0
5.6
2.3
2.0
7.5
6.5
9.1
7.8
16.8
15.4
3.0
2.6
6.0%
6.5%
1.4%
1.8%
3.34
3.65
11.9%
9.2%
18.77
21.65
0.80
1.00
0.3%
-2.4%
Avg. Daily nb traded shares:1,159
Main shareholders: ArŠs Life Sciences 73.2%; Free float 22.8%; Personal and managers 4.0%;
Profile: Specialist in Specific ImmunoTherapy (SIT), a desensitisation method of treating allergies, tailored
to individual patients. The allergy market is worth over EUR16bn; SIT is a fast-growing niche (~10% per
annum) worth roughly EUR800m. Few players are present on this highly concentrated market: the top three
account for two-thirds of total sales. Stallergènes, market leader in terms of the number of patients treated,
makes just about all its sales in Europe, and half in its home market (France). Change in this market is being
driven by innovation (galenic forms, packaging, etc.). Stallergènes has been leading the way in SIT: it was
the first to introduce sublingual treatments, which are more easily administered than subcutaneous ones.
The next stage, the tablet formulation of Oralair, should allow Stallergènes to change dimension by
extending its market considerably due to a more convenient formulation.
SWOT Analysis
Strengths
• SIT is a highly concentrated niche market, led by
StallergŠnes
• Expertise acknowledged by sector professionals
(practitioners and medical authorities)
• Tablets are a more convenient formulation
Weaknesses
• Significant marketing effort needed to promote Oralair in
the US
• The company is mainly focused in Europe
Opportunities
• Tablet formulations are set to broaden the SIT market
considerably.
• The SIT market is set to double in size by 2020 and exceed
EUR2bn.
• American market is as big as the European one
Threats
• Alk-Abell¢ signed a partnership with Merck & Co to
launch Grazax in the US
• FDA decision
• Greer's commitment to commercial success of Oralair
• Asthma market: SIT should make it possible to better
control this pathology
Treasury stocks 0.1%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: Although performance for Q1 2014 fell slightly short of expectations, Stallergenes
confirmed its FY target of low single-digit growth. After the recent approval of Oralair by the FDA in early
April 2014, the group is now focused on marketing Oralair in the US, a market that is twice as big as Europe.
However, the ramp-up of Oralair in the US will likely only gradually feed through to Stallergènes’ results.
Target Price: EUR 60.00
titre
60
17/06/14 Analyst Meeting
55
27/05/14 AGM
50
45
40
35
Mar 11
2013
STALLERGÈNES SMALL & MID CAPS SELECTION
Analyst(s)
Arsène Guekam
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+33 1 45 96 78 76
CM - CIC Securities
[email protected]
Jun 14
Source : Factset
179
Finland
SMALL & MID CAPS SELECTION
EUR 10.11
Reduce
STOCKMANN
STCBV.HE/STCBV FH
Market capitalisation: EUR 728m
General Retailers
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR13.94 / 10.04
12/12
2,116
162
7.6%
87.5
4.1%
52.5
52.5
127
813
0.9
5.0
4.9
3.8%
0.6
1.0
0.8
11.0
20.2
18.7
1.1
8.0%
4.4%
0.73
68.2%
12.40
0.60
-12.7%
12/13
12/14e
12/15e
2,037
2,002
2,050
129
124
151
6.3%
6.2%
7.4%
54.5
50.6
76.8
2.7%
2.5%
3.7%
48.5
12.4
38.1
48.5
12.4
38.1
123
86.1
112
781
781
757
0.9
0.9
0.9
6.1
6.3
5.0
4.7
4.6
5.4
2.5%
2.3%
3.5%
0.4
0.3
0.5
0.9
0.9
0.9
0.8
0.7
0.7
12.0
12.0
9.7
28.5
29.4
19.1
16.4
nm
19.1
0.9
0.8
0.8
6.4%
4.3%
5.4%
4.0%
1.5%
4.0%
0.67
0.17
0.53
-7.6%
-74.4%
nm
12.42
12.05
12.29
0.40
0.15
0.40
-10.8%
-15.9%
-2.1%
Avg. Daily nb traded shares:12,113
Main shareholders: Free float 100.0% (0.0%); HTT STC Holding Oy Ab 11.7%; Föreningen Konstsamfundet -ryhmä 9.4%;
Svenska litteratursällskapet i Finland r.f. 7.6%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: Stockmann's operations comprise the department store business and fashion chain business
including two affordable fashion chains, Lindex and Seppälä. The divisions operate in 13 countries. The
Department Store Division with its 16 department stores brings in around 60% of the group's sales, while the
Fashion Chains Division represents 40%. Of the most important market areas, Finland accounts for 50%,
Sweden and Norway for 26%, Russia and Ukraine for 17%, and the Baltic countries, Czech Republic and
Slovakia for 7% of sales. The company's strategy for internationalisation has been to open on average one
department store per year in Russia but, after the Ukraine crisis, the planned expansion is on hold.
SWOT Analysis
Strengths
• Strong brands
Weaknesses
• Ownership structure and two share series reduce the
share's liquidity and limit any bigger corporate structuring
•projects
Large amount of goodwill
• Excellently located department stores
• Well known in the growing markets of Russia
Opportunities
• Russia still offers significant growth prospects
Threats
• Weak consumer confidence and spending in Finland
• The sizeable capex programme has been completed cash flow clearly strengthening
• Volatile raw material prices
• Intensifying competition in the fashion trade
• Increasing of internet retail trade
Recommendation: Stockmann has suffered from poor consumer demand in Finland. In Russia, too, the
economic situation has turned out to be more cautious. Operating result in both of these countries is in the
red and, at the moment, basically all earnings are generated in Sweden by Lindex operations. Stockmann’s
guidance expects that top-line will be slightly down and operating profit will not exceed last year’s level.
Monthly sales figures have been characterised by weak consumer demand in Finland. We believe that cost
savings and strategic reorganizations will continue. The major investments have now been completed and
therefore the company’s cash flow should remain stable. In our view, the share’s valuation is not attractive
and the share lacks short-term drivers.
titre
22
Target Price: EUR 10.00
20
18
16
STOCKMANN SMALL & MID CAPS SELECTION
Analyst(s)
14
12
10
8
Mar 11
Source : Factset
180
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Jari Raisanen
+358 10 252 4504
Pohjola
[email protected]
Germany
SMALL & MID CAPS SELECTION
EUR 28.40
Hold
SURTECO
SURG.DE/SUR GR
Market capitalisation: EUR 440m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR30.45 / 15.61
12/12
408
51.7
12.7%
29.7
7.3%
15.0
16.0
49.7
113
0.5
2.2
5.9
6.4%
0.8
0.8
0.7
5.7
10.0
10.9
0.8
21.1%
2.9%
1.45
-15.9%
20.12
0.45
70.2%
12/13
12/14e
12/15e
404
635
641
59.9
75.5
75.0
14.8%
11.9%
11.7%
37.3
39.3
38.5
9.2%
6.2%
6.0%
21.9
19.6
20.2
10.3
21.0
25.8
99.8
56.0
57.0
162
155
138
0.5
0.5
0.4
2.7
2.0
1.8
6.5
6.8
8.1
5.4%
3.7%
5.6%
0.7
0.5
0.7
1.0
1.2
1.2
1.3
1.0
0.9
8.8
8.0
7.8
14.2
15.4
15.3
34.6
21.0
17.1
1.2
1.4
1.3
6.8%
7.1%
6.1%
2.3%
2.3%
2.3%
0.67
1.35
1.67
-54.0%
103.1%
23.1%
20.04
20.65
21.30
0.65
0.65
0.65
24.0%
-1.0%
1.4%
Avg. Daily nb traded shares:14,386
Profile: SURTECO is engaged in the design, production and sale of plastic and paper based decorative
surfaces. The company’s core products are edgebandings, flat foils, skirtings and decorative printings.
SUR’s products are sold mainly to the furnishing and interior construction industry in Germany and the rest
of Europe.
SWOT Analysis
Strengths
• Global £d£1 in paper edgebandings with >50% mshare
and £d£2 in plastic edgebandings with 22% mshare
• Mmost profitable players within its industry.
Management with long-standing experience in the industry
• Only player active in both, the paper and plastic
decorative surfaces market, giving SUR a unique selling
position
Weaknesses
• Ccapital intense business model (tangible CE/sales of
60%), low growth and increasingly cost driven industry
• Underrepresented in faster growing geographic markets
e.g. Eastern Europe, Russia, Asia-Pacific or Latin America
• Low organic growth and negative margin trend over the
past 10 years
Opportunities
• Underpenetrated markets (America, Eastern Europe),
become global TOP 5 , expansion into production
relatedopportunities
business fields
•technology
External growth
/ Up to EUR 24m p.a.
synergery form the integration of the recent SÜDDEKOR
•acquisition
Margin upside from an overall economic recovery or
industry consolidation
Threats
• The European economic crisis may escalate again and
reduce demand for SURTECO’s products
• Furniture imports to Europe may reduce SUR’s global
market share
• Maring pressure from the consolidation of the furnishing
industry, new competitors in emerging markets, the
of existing
players
across
•vertical/horizontal
Technology risk - integration
digital printing
may replace
gravure
printing in some market segments
Recommendation: We rate SURTECO ‘Hold’ with a price target of EUR 29. Following the company’s
strong share price performance (+80% since the announcement of the acquisition of Süddekor), we expect
the share price to consolidate around current levels. Whereas the Süddekor acquisition, an improved free
float and the SDAX listing should largely be discounted in the share price, further upside may come from 1/ a
recovery of the European furniture market, 2/ more favourable industry dynamics following industry
consolidation, and 3/ most importantly a successful integration of Süddekor.
Main shareholders: Pool and Family Shareholders 54.7%; Free float 45.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 29.00
titre
32
14/08/14 Results
30
2014H1
28
26
SURTECO SMALL & MID CAPS SELECTION
Analyst(s)
24
22
20
18
Konrad Lieder
16
14
Mrz 11
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
+49 69 5899 7436
Equinet Bank
[email protected]
Jun 14
Source : Factset
181
Finland
SMALL & MID CAPS SELECTION
EUR 4.42
Accumulate
TECHNOPOLIS
TPS1V.HE/TPS1V FH
Market capitalisation: EUR 470m
Real Estate
EUR
12/12
93
55
51.6%
(6)
(14)
25
30
30.21
608
1,014
865
0.43
0.20
5.16
(34.0%)
5.60
12.5%
5.9%
15.6
8
4.1
608
56.2%
7.9%
12/13
12/14e
12/15e
Profile: Technopolis offers business premises and services to companies in business parks in Finland,
112
149
152
Norway, Baltics and Russia. 68% of the property portfolio is located in Finland, 15% in Norway, 12% in
EBITDA (m)
64
88
91
Baltics and 5% in Russia. The business idea is to combine premises and services into an offering that
EBITDA margin
50.4%
53.6%
54.3%
supports growth and success of customers. The company’s roots lie in the technology sector as well as
Portfolio Result (m)
(18)
1
0
Nokia in Oulu, the biggest city in Northern Finland. Nowadays ITC represents 21 % of revenues.
Net Financial Result
(21)
(21)
(22)
The company aims at annual growth of 15% in sales and EBITDA to lever its sound business concept. The
Net Profit (reported)(m)
19
56
57
track is convincing, 17% CAGR achieved in the last 10 years.
Net Profit (adj.)(m)
36
49
51
Funds From Operations
36.33
49.30
51.27
Net Debt (m)
862
843
823
SWOT Analysis
Portfolio Value (m)
1,437
1,443
1,458
Strengths
Weaknesses
Enterprise Value (m)
1,325
1,313
1,294
• A business model that combines space with services
• Growth can be too fast
EPS (adj.)
0.40
0.46
0.48
DPS
provides for a longer value chain and competive advantage
0.10
0.14
0.15
IFRS NAVPS
5.87
6.22
6.55
• Effective leasing operations
• Market uncertainties may negatively affect the property
Premium/(discount)
(25.9%)
(29.0%)
(32.6%)
market’s yield requirements
EPRA NAVPS
4.93
5.21
5.54
• Solid platform for leveraging the business model in
• Abruptly rising interest rates may increase financing costs
Earnings adj. yield
9.0%
10.5%
10.9%
acquisitions
as a result of low hedges
Dividend yield
2.3%
3.2%
3.4%
EV/EBITDA
20.8
14.9
14.2
P/E (adj.)
11
10
9
Opportunities
Threats
Int. cover(EBITDA/Fin.int)
3.0
4.2
4.2
• Economic uncertainty and lack of funding gives plenty of
• Still dependent on the city of Oulu, IT and software
Net debt/(cash) (m)
862
843
823
opportunities in the acquisition market
industries, and small businesses
Net Debt/Total Assets
55.3%
53.0%
51.2%
• Premises mostly in non-prime locations
Abs. Performances(12m,6m,3m,1m):
6.5%
-3.3%
5.2%
12 month High/low: EUR4.88 / 3.71
Avg. Daily nb traded shares:47,769
• Ambitious growth target requires equity injections from
Main shareholders: Free float 100.0%; Keskinäinen työeläkevakuutusyhtiö Varma 24.1%; Keskinäinen eläkevakuutusyhtiö Ilmarinen 10.5%;
time to time
Gross Rental Income (m)
Oulun kaupunki 4.8%;
• Rental contracts are short
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
5.0
Recommendation: We see Technopolis as a company with a sustainable competitive advantage and
promising growth opportunities, which translates into a ROE of around one percentage point higher than in
its Nordic peer group. Despite the weak Finnish economy, we believe that Technopolis can still outperform
the market. The company can still add value by developing existing campuses or acquiring new campuses
and by taking advantage of the scalable concept.
4.5
Target Price: EUR 5.00
4.0
3.5
3.0
2.5
Mar 11
Source : Factset
182
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
TECHNOPOLIS SMALL & MID CAPS SELECTION
Analyst(s)
Matias Rautionmaa
+358 10 252 4408
Pohjola
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 7.25
Buy
TELEGRAAF MEDIA GROEP
TLGNc.AS/TMG NA
Market capitalisation: EUR 336m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.58 / 6.77
12/12
577
34.3
5.9%
-42.1
nm
-16.3
31.8
6.8
70.2
0.2
2.0
9.0
-4.2%
-0.5
0.3
0.3
4.7
nm
11.7
0.9
-1.4%
0.0%
0.69
-4.7%
9.20
0.00
-26.6%
12/13
542
21.1
3.9%
-10.3
nm
178
19.2
5.2
-26.8
-0.1
-1.3
4.8
7.0%
0.8
0.9
0.7
18.7
nm
22.0
1.4
-9.0%
89.7%
0.41
-39.6%
6.45
6.50
-22.1%
12/14e
12/15e
527
518
68.0
71.0
12.9%
13.7%
36.6
39.6
6.9%
7.6%
29.5
31.5
29.0
30.9
35.4
44.8
-37.5
-35.2
-0.1
-0.1
-0.6
-0.5
nm
nm
7.0%
7.9%
0.8
1.0
0.7
0.8
0.6
0.6
4.4
4.2
8.2
7.6
11.6
10.9
1.0
1.0
5.3%
8.3%
6.9%
6.9%
0.63
0.67
50.8%
6.8%
7.07
7.24
0.50
0.50
0.3%
-1.4%
Avg. Daily nb traded shares:3,926
Main shareholders: Free float 32.3%; Family Puijenbroek 30.5%; Cyrte 20.1%;
Profile: Telegraaf Media Group (TMG) is a Dutch media group with its principal activities being national,
regional and door-to-door newspapers (together contributing more than 65% of sales). Other activities are
the publication of puzzle magazines, radio via its stake in Sky Radio Group and several digital media
platforms. Almost all revenues are derived from the Netherlands, with some international exposure with its
puzzle activities. In 2013, 52% of revenues came from circulation, 37% from advertising, 3% from printing
and distribution and 8% from other income.
SWOT Analysis
Strengths
• Owner of the largest newspaper in the Netherlands
Weaknesses
• Large exposure to the Dutch media market
• Sky Radio is top 3 radio station
• Weak acquisition track record
• Puzzles are highly profitable
• Strategic uncertainty
Opportunities
• Further cost reductions
Threats
• Structural decline in newspaper sales
• Acquisitions to further diversify from newspaper
publishing
• Optimize position of strong brands
• Pressure on advertising income
• Risk of overpaying for acquisitions
Recommendation: Both advertising and subscription income are still in decline. Increased promotions have
put pressure on margins in the first quarter of 2014 whilst the benefits are not expected before the second
half of the year. Cost savings are second half weighted and in the first quarter only partly compensated for
the lower revenues and higher selling expenses. We expect results to improve throughout the year. We have
a Buy rating with the company valued at a 2014E EV/EBITDA of only 4.5.
Delta Lloyd 7.1%; Navitas 5.0%; Boekhoorn 5.0%;
All share prices at 19/05/14.
Target Price: EUR 11.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
15
01/08/14 Results
14
13
12
11
10
2014H1
TELEGRAAF MEDIA GROEP SMALL & MID CAPS SELECTION
Analyst(s)
Johan van den Hooven
9
8
+312 0 5508518
SNS Securities
[email protected]
7
6
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
183
Netherlands
SMALL & MID CAPS SELECTION
EUR 20.66
Buy
TEN CATE
NTCN.AS/KTC NA
Market capitalisation: EUR 564m
Industrial Engineering
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR24.61 / 17.82
12/12
1,049
89.1
8.5%
37.5
3.6%
19.6
36.8
61.4
230
0.5
2.6
7.4
4.0%
0.5
1.2
0.8
9.1
21.7
14.0
1.2
15.8%
2.5%
1.42
-49.5%
17.27
0.50
8.8%
12/13
12/14e
12/15e
1,012
1,048
1,113
89.4
101
119
8.8%
9.6%
10.7%
41.5
52.5
70.0
4.1%
5.0%
6.3%
18.9
31.0
45.4
36.7
44.1
58.5
66.1
83.3
95.5
189
165
157
0.4
0.3
0.3
2.1
1.6
1.3
8.9
11.1
14.7
4.7%
6.0%
7.7%
0.5
0.7
1.3
1.2
1.1
0.8
0.7
0.7
9.4
7.6
6.5
20.3
14.6
11.0
16.6
12.7
9.7
1.3
1.1
1.1
10.8%
6.5%
3.5%
2.4%
2.6%
3.4%
1.38
1.63
2.12
-3.1%
18.4%
30.2%
17.70
18.00
18.62
0.50
0.54
0.70
-12.6%
-15.8%
-8.8%
Avg. Daily nb traded shares:100,790
Profile: From its high-technology core in combining textiles and chemistry, Ten Cate is exploiting niches in
various materials markets. Key to Ten Cate‘s approach is the development of products in close cooperation with the end user such as the US Army, Boeing, Airbus and FIFA.
In its advanced textiles and composites division, the company does not own most of the manufacturing
chain, focusing on added value in processes, development and marketing as suppliers, assemblers and
end users tend to be highly sophisticated. The geosynthetics and artificial grass division is much more
vertically integrated, reflecting the need to protect the technological advantages in the application process
and to capture the related added value. In all businesses, managing the value chain is crucial to the
success.
SWOT Analysis
Strengths
• IP base in technology and processes, not products
• Leading market shares in narrowly defined niches
Weaknesses
• Vulnerability of working capital requirements to lumpy
business
• Concentrated customer roster per division
• Intimate relationships with end users£pv£ high switching
costs
• Brand value depends on partners‘ performance (note the
difficulties in artificial grass)
Opportunities
• Extending the product portfolio through new applications
of existing technology
• Widening the client roster geographically
Threats
• Raw material price volatility
• Substitute products and technologies
• Government budgets shrinking and subsidies waning
Main shareholders: Free float 71.0%; Delta Lloyd 15.8%; Allianz 5.1%;
Ameriprise 4.7%; Norges Bank 3.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Recommendation: On 8x EV/EBITDA 2014E, the market is not paying enough for the medium-term
structural growth in the various Ten Cate niches. The grass activities, with their short term raw material
vulnerability and recent strategic hurdles, appear to be weighing on the stock‘s multiples despite being only
20% of group revenues. We have set a EUR 27 target price based on discounted cash flow.
Target Price: EUR 27.00
titre
32
30
28
TEN CATE SMALL & MID CAPS SELECTION
Analyst(s)
26
24
22
20
Gert Steens
18
16
Mar 11
Source : Factset
184
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+312 0 5508639
SNS Securities
[email protected]
Belgium
SMALL & MID CAPS SELECTION
EUR 22.15
Hold
TESSENDERLO
TESB.BR/TESB BB
Market capitalisation: EUR 703m
Chemicals
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR23.75 / 16.68
12/12
2,130
38.9
1.8%
-163
nm
-199
40.0
38.1
314
0.9
8.1
2.0
5.9%
0.7
1.4
0.5
30.1
nm
19.0
2.3
-12.8%
5.4%
1.31
-35.5%
10.95
1.33
3.5%
12/13
12/14e
12/15e
1,790
1,460
1,506
52.1
83.4
137
2.9%
5.7%
9.1%
-18.7
19.5
72.9
nm
1.3%
4.8%
-64.0
1.1
39.1
16.7
20.1
43.5
34.6
65.1
103
259
250
247
1.1
1.0
0.9
5.0
3.0
1.8
3.4
5.0
8.5
4.1%
4.2%
7.0%
0.5
0.5
0.9
1.4
1.5
1.4
0.5
0.7
0.7
18.3
12.5
7.6
nm
53.6
14.3
36.2
35.0
16.2
2.5
3.0
2.5
2.1%
-2.3%
0.5%
0.0%
0.0%
0.0%
0.53
0.63
1.37
-59.8%
20.5%
116.4%
7.46
7.49
8.73
0.00
0.00
0.00
31.0%
9.1%
6.7%
Avg. Daily nb traded shares:26,367
Main shareholders: Free float 70.8%; Verbrugge NV (Group Picanol) 27.5%; Employees 1.7%;
All share prices at 19/05/14.
Profile: Originally active in basic chemicals, Tessenderlo Chemie (TC) is embarked since 2007 in an indepth revamping process of its activities, with the aim of transforming itself into an international speciality
group providing solutions for global needs in food, agriculture, water management and efficient (re)use of
natural resources. To achieve these goals, the group focuses its efforts on the disposal of non-core assets
while the resources available for development are allocated in priority to two business areas: 1. In gelatine,
with the aim of maintaining its position among the leaders by reinforcing its international presence (mainly in
Latin America and in Asia); 2. In businesses combining service and valorisation of by-products, which are
activities close to customers, drawing on TC’s strong experience in this area (Kerley Akiolis).
SWOT Analysis
Strengths
• Good track record, market positioning and profitability of
core activities, before the price war in the French rendering
started
in 1Q13 style: more business oriented than
•that
New
management
previous management
• Management strongly focuses on costs optimisation at all
levels (activities and overheads)
Weaknesses
• Very strong US dollar exposure post disposal of non-core
assets
• Very weak visibility of the market on the mains activities
of the group (Akiolis, Gelatines and Kerley)
• Size of the market capitalisation and low liquidity of the
share
Opportunities
• Kerley: expansion of the mining and industrial pillar, a
model to be expanded into Europe, Middle East & LatAm
• Akiolis: acquisition opportunities in South and Eastern
Europe.
• Re-rating of the share post disposal of remining non-core
assets and post profitability
Threats
• Possible new European fine in the pipes and fittings
activities
• Regulatory risks in crop protection businesses in the USA
• Price war in the French rendering market since early 2013
Recommendation: 1Q14 results came in ahead of expectations with Rebitda at EUR 39.7m, up 34% Y-oY and largely above our and consensus estimates. Rebitda was supported by stronger results at Kerley
and in pipes and cost improvement initiatives.
The current strategy to focus on costs control is likely to mitigate the poor market environment in Gelatine &
Akiolis and in Inorganics (here due to a technical issue). This combined with a better environment for Kerley
and in the pipes activities, led us to review upwards our FY14 Rebitda to about EUR 108m.
FINANCIAL CALENDAR)
PRICE (SHORT & LONG AVERAGE)
Although short term multiples are demanding, we maintain our HOLD rating with a TP at EUR 21.5.
titre
34
Target Price: EUR 21.50
32
03/06/2014: AGM
30
28
26
27/08/2014: 1H14 results
24
22
20
29/10/2014: 3Q14 trading update
18
16
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
TESSENDERLO SMALL & MID CAPS SELECTION
Analyst(s)
Bernard Hanssens
+32 (0) 2 287 9689
Bank Degroof
[email protected]
Source : Factset
185
France
SMALL & MID CAPS SELECTION
EUR 12.37
Hold
TF1
TFFP.PA/TFI FP
Market capitalisation: EUR 2613m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.80 / 8.16
12/12
2,621
295
11.2%
210
8.0%
136
136
176
-238
-0.1
-0.8
high
-5.8%
-0.5
1.0
0.6
5.0
7.0
13.7
1.1
11.4%
6.2%
0.65
-25.0%
8.00
0.55
51.8%
12/13
12/14e
12/15e
2,085
2,090
2,114
241
289
265
11.6%
13.8%
12.5%
147
206
185
7.0%
9.9%
8.8%
137
198
142
137
198
142
131
71.1
136
-185
-363
-330
-0.1
-0.2
-0.2
-0.8
-1.3
-1.2
nm
nm
nm
-4.9%
-5.6%
-4.8%
-0.4
-0.5
-0.4
2.7
1.6
1.5
1.3
0.9
0.9
11.2
6.7
7.5
18.5
9.4
10.7
21.5
13.2
18.4
1.7
1.5
1.4
0.3%
0.7%
3.2%
4.4%
4.4%
4.4%
0.65
0.94
0.67
0.8%
44.0%
-28.1%
8.10
8.49
8.61
0.55
0.55
0.55
-7.2%
-11.8%
-2.5%
Avg. Daily nb traded shares:279,666
Main shareholders: Free float 49.5%; Bouygues 43.5%; Employees 7.0%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Profile: TF1 is France’s leading free-to-air TV network, with a 32.6% audience share among women under
50 in 2013 (including channels TMC, NT1 and HD1); the M6 group ranks number two with a 21.0% share.
TF1's share of TV advertising market was 46%. Advertising on TF1’s core channel will generate 63% of
2014 est. group revenues. In diversified businesses, TF1 is present in free DTT with TMC, NT1 and HD1,
which was launched at end-2012; TF1 now owns 49% of Eurosport (broadcast in Europe and Asia), after it
sold 51% to Discovery in two steps. The group is also present in publishing and distribution, production,
broadcasting rights, e-commerce and the Internet.
SWOT Analysis
Strengths
• Still the favourite French channel, 52% watch TF1 channel
daily
• Leader in audience share on all targets
• TV ad market share close to 50%, cross media strategy
• Secured content in sport, film and fiction
Opportunities
• Integration of TMC and NT1
Threats
• New ways of content consumption
• Ongoing cost cutting programme
• Canal+ ambitions on free-to-air TV
• Disposal of Eurosport at a good price
• Price pressure from M6
• Stabilising audience
Recommendation: The French TV advertising market outlook remains bleak, in an uncertain
macroeconomic environment, and with new DTT channels putting pressure on prices. However, the Q1
figures showed a stabilisation of TF1 ad revenues, on a favourable basis, and thanks to stabilised
audiences. We believe that TF1 advertising will outperform M6 in 2014, thanks to better audiences and the
football World Cup. We prefer TF1 to M6 also because it offers more cost-cutting prospects, especially in
2015 with the full integration of TMC and NT1 (integration of media selling and programming). The group will
probably distribute a part of its EUR1bn war chest in 2015, after the full disposal of Eurosport. We have a
SOP at EUR13.50.
Target Price: EUR 13.50
titre
15.0
25/07/14 Results
14.0
Weaknesses
• Full exposure to the mature French advertising market
2014H1
13.0
12.0
TF1 SMALL & MID CAPS SELECTION
Analyst(s)
11.0
10.0
9.0
8.0
7.0
6.0
5.0
Mar 11
Source : Factset
186
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Eric Ravary
Emmanuel Chevalier
+33 1 45 96 79 53
+33 1 45 96 77 42
CM - CIC Securities
[email protected]
[email protected]
Italy
SMALL & MID CAPS SELECTION
EUR 1.37
Reduce
TI MEDIA
TCM.MI/TME IM
Market capitalisation: EUR 153m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.32 / 1.02
12/12
222
-44.4
nm
-263
nm
-241
-79.1
-30.1
260
nm
-5.9
nm
-86.0%
-10.1
2.9
2.4
nm
nm
nm
nm
-51.1%
0.0%
-0.76
-chg
-0.35
0.00
-4.4%
12/13
12/14e
12/15e
75.7
69.0
71.1
30.2
29.3
32.6
39.9%
42.4%
45.9%
-132
1.7
5.9
nm
2.5%
8.3%
-132
-3.3
1.3
3.6
-1.7
1.5
24.3
24.3
28.0
260
230
227
-4.3
-3.6
-3.6
8.6
7.9
6.9
5.2
5.9
10.9
-40.4%
0.7%
2.2%
-5.1
0.1
0.3
2.4
2.5
2.5
6.2
5.9
5.7
15.5
13.9
12.4
nm
nm
68.4
nm
nm
nm
nm
nm
nm
-26.6%
20.6%
1.9%
0.0%
0.0%
0.0%
0.03
-0.02
0.01
+chg
-chg
+chg
-0.57
-0.57
-0.56
0.00
0.00
0.00
-26.6%
-26.4%
-24.6%
Avg. Daily nb traded shares:53,969
Main shareholders: Telecom Italia 77.7%; Free float 22.3%;
Profile: TI Media is the television arm of Telecom Italia Group; the company was created with the spin-off
of the directories business into SEAT in 2004, it subsequently disposed Office Products and Internet
business lines. After the long-awaited disposal of La7 channel, TME operates MTV Italy, a Free-to-Air
music channel jointly owned with Viacom (partner with 49%). The ownership of three DTT multiplexes has
allowed TME to focus on the infrastructure side of the TV business, by renting bandwidth to other
publishers in both FtA and Pay-TV. TME originally intended to sell the Network Operator unit (TIMB) for
EUR 0.4bn in order to offset its EUR 0.35bn debt; the failure to finalize a deal led to a EUR 240m capital
increase successfully concluded in June 10, also thanks to the support of the parent co. Given the
perpetual losses of La7, TME has struggled to generate a positive EBITDA until the first half of 2010. On
March 4, 2013, TI Media finalized the sale of La7 to Cairo Communication. The deal conditions were: a) disposal
at token value against a positive NFP of EUR 88m at the time of the finalization; b) lock up-clause for 2 years; c)
favourable conditions for Mux rent. TI waived EUR 100m intra-group debt. The “gift” was basically equal to the
cash paid to Cairo, plus interim losses. In Sept 2013, TME also completed the disposal of its 51% stake in MTV to
its JV partner Viacom for EUR 13m.
FY 2013: Sport needed to support the EBITDA. Q4 was weaker than expected, due to a 5% decline in TIMB
revenues, which the company attributes to the discontinuation of the legacy services for La7 and MTV. The
EBITDA disappointed, as the lower revenue base combined with new provisions for risks and bad debt. We
understand these are related with the former SportItalia channels, which have closed at the end of last year. On
the other hand, we note the reduction in holding costs, with personnel expenses down by EUR 4.5m Y/Y. In any
case, the EBITDA sequence for TIMB is rather poor with EUR 12/8/6m in the past three quarters respectively.
The net loss for the year was EUR 132m, affected by the capital loss on La7 disposal. On the positive, deleveraging was better than expected in Q4 with EUR 13m; the NFP was stable vs. last year as the disposal costs
of La7 were completely covered by the parent company TI.
Corporate action. TME and L’Espresso finally agreed the combination of their respective Muxes in a newCO in
which the partners will control 70% and 30% respectively. TME will have an option to acquire the right of use of
one of the five frequencies that will be controlled by the vehicle. The MuxCo will generate around EUR 100m
annual revenues, with an EBITDA that we estimate in the region of EUR 35m. The companies said the deal will
generate relevant industrial synergies, which have not however been disclosed. TIMedia will be entitled to
appoint the majority of Directors including the CEO, whilst Gruppo Espresso will appoint the company’s
Chairman.
SWOT Analysis
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.5
Strengths
• Ownership of scarce resource in TV broadcasting
Weaknesses
• Fragile balance sheet
• Financial backing of Telecom Italia
• Better defined business model a Mux operator
• Unclear strategy of parent company
Opportunities
• Growing needs of Bandwidth in DTT
• Attribution of new muxes
Threats
• Competition from satellite
• Other alternative video delivery media
3.0
Recommendation: The 14:1 reverse share split led to the adjustment of our Target Price to EUR 1.68. We
further trim our valuation by c 20%, to EUR 1.35, to take into account the lower quality of current tenants resulting
into a lower yield and higher risk attached to the mux portfolio.
2.5
2.0
1.5
Target Price: EUR 1.35
1.0
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Analyst(s)
Andrea Devita, CFA
Banca Akros
+39 02 4344 4031
[email protected]
187
Finland
SMALL & MID CAPS SELECTION
EUR 19.63
Sell
TIETO
TIE1V.HE/TIE1V FH
Market capitalisation: EUR 1407m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR20.17 / 14.35
12/12
1,825
180
9.9%
63.0
3.5%
31.1
94.3
148
72.7
0.1
0.4
35.3
80.5%
11.8
1.8
0.6
5.9
16.9
11.3
1.9
10.2%
5.6%
1.31
29.9%
7.73
0.83
17.8%
12/13
12/14e
12/15e
1,609
1,638
1,694
170
212
248
10.6%
13.0%
14.6%
85.8
123
159
5.3%
7.5%
9.4%
62.3
85.4
112
105
104
112
146
173
199
80.3
-4.6
-54.2
0.2
0.0
-0.1
0.5
0.0
-0.2
23.0
29.5
34.4
79.0%
98.5%
90.1%
11.6
14.5
13.2
2.1
2.6
2.5
0.8
0.8
0.8
7.2
6.4
5.2
14.2
10.9
8.1
11.4
13.5
12.6
2.3
2.7
2.5
3.4%
10.3%
9.4%
4.6%
5.2%
5.6%
1.45
1.45
1.56
10.1%
0.3%
7.5%
7.06
7.34
7.87
0.90
1.02
1.09
20.8%
7.9%
6.1%
Avg. Daily nb traded shares:76,141
Profile: Tieto is the largest Nordic IT services company providing full life-cycle services for both private and
public sectors. The company has a global presence through its product development business and delivery
centres. Founded in 1968 and headquartered in Helsinki, Finland, Tieto operates in over 20 countries. The
current core market is the Nordics, and the company is building on its strong position in Finland (45% of
sales) and Sweden (35% of sales). In product development services, Tieto serves its customers worldwide,
but its core markets are the Nordic countries. Public, Healthcare and Welfare is the biggest customer sector
with a 25% share. At the end of Q1 2014, Tieto had 14,102 employees, with 31% of them based in Finland
and 19% in Sweden. The offshoring rate is over 45%. Tieto’s biggest competitors in the Nordic markets
include CGI, IBM, HP and Evry.
SWOT Analysis
Strengths
• Strong market position in Finland
Weaknesses
• Large government holding
• Long-term relationships with major Finnish corporations,
especially in finance and the public sector
• Mature markets of Finland and Sweden, which account
for the bulk of Tieto's sales
Opportunities
• New business areas (in consulting and system integration)
Threats
• Cost pressures especially in Finland and Sweden
• More focused organisations increase competiveness
• Global competition and cloud services
• Cloud services
Main shareholders: Free float 100.0%; Cevian Capital 15.3%; Solidium Oy 10.2%;
Keskinäinen Eläkevakuutusyhtiö Etera 4.1%;
Recommendation: Tieto estimates that 2014 operating profit excluding one-off items will increase from the
level of 2013 (EUR 141.2m). IT services market growth is still estimated at approximately 2%. Tieto’s growth
estimate is in line with its Nordic peers’ market estimates. On our forecasts, Tieto’s valuation multiples have
already reached the level of its large international peers, and we see no grounds for this.
All share prices at 19/05/14.
Target Price: EUR 16.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
20
18/07/14 Results
18
27/05/14 Capital Markets Day
16
12
10
8
Mar 11
188
TIETO SMALL & MID CAPS SELECTION
Analyst(s)
Hannu Rauhala
14
Source : Factset
2014Q2
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4392
Pohjola
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 18.92
Hold
TIKKURILA
TIK1V.HE/TIK1V FH
Market capitalisation: EUR 835m
Chemicals
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR20.89 / 16.49
12/12
672
91.6
13.6%
66.5
9.9%
40.5
45.6
65.6
99.6
0.5
1.1
12.6
19.2%
2.9
2.5
1.1
7.9
10.9
14.2
3.2
7.1%
5.2%
1.03
24.9%
4.67
0.76
12.0%
12/13
653
93.8
14.4%
71.5
10.9%
50.0
50.9
72.3
49.6
0.2
0.5
20.9
20.6%
3.1
3.3
1.4
9.7
12.7
17.3
4.2
7.8%
4.2%
1.15
11.5%
4.72
0.80
-7.6%
12/14e
12/15e
653
672
96.6
99.1
14.8%
14.7%
75.6
78.1
11.6%
11.6%
53.1
56.8
52.5
56.8
74.1
77.8
27.9
16.1
0.1
0.1
0.3
0.2
21.2
31.0
21.8%
22.1%
3.3
3.3
3.2
3.1
1.3
1.2
8.7
8.4
11.1
10.6
15.9
14.7
3.7
3.4
6.8%
5.9%
4.4%
4.7%
1.19
1.29
3.2%
8.1%
5.12
5.57
0.84
0.88
-4.7%
8.9%
Avg. Daily nb traded shares:5,933
Main shareholders: Free float 82.0%; Oras Invest Oy 18.1%; Ilmarinen Mutual Pension Insurance Co 10.5%;
Varma Mutual Pension Insurance Co 8.6%;
All share prices at 19/05/14.
Profile: Tikkurila is a provider of paints to consumers and industrial users. The company makes more than
half of its sales in Eastern Europe and the rest in Finland and Scandinavia. It is the market leader in Finland
(over 50% of the market), Sweden (40%) and Russia (18%), one of the leading companies in the Baltic
countries and the fourth biggest in Poland (12%). Decorative paints account for some 80% of its sales and
industrial coatings for 20%.
SWOT Analysis
Strengths
• Solid market shares: no 1 in Russia, Finland and Sweden
Weaknesses
• Raw material volatility
• Large proportion of business in emerging markets
• No growth in mature markets of Finland and Scandinavia
• Outstanding pricing power
• Growth in Russia has clearly decelerated
Opportunities
• Recovering growth of Russian paint markets
Threats
• Increasing competition
• Establishment of a position in the CEE region
• Increasing popularity of wallpapers
• A potential acquisition target
• Brand weakening
Recommendation: Paint markets in Eastern Europe are facing clear softness due to weakening consumer
confidence at the same time as paint manufacturing capacity is increasing in Russia. This together with
rising expenses will put both margins are volumes under pressure for Tikkurila. Historically, Tikkurila's
growth has based on continuously rising sales prices as the company's pricing power has been outstanding.
However, increased competition has started to erode Tikkurila's market share and therefore we see that this
growth model will hardly function in the coming years. Considering the weak growth outlook, we do not
believe Tikkurila’s multiples (P/E, EV/EBITDA) should be above their historical median.
Target Price: EUR 18.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
21
20
TIKKURILA SMALL & MID CAPS SELECTION
Analyst(s)
19
18
17
16
Antti Saari
15
14
+358 10 252 4359
Pohjola
[email protected]
13
12
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
189
Netherlands
SMALL & MID CAPS SELECTION
EUR 24.95
Hold
TKH GROUP
TWKNc.AS/TWEKA NA
Market capitalisation: EUR 961m
General Industrials
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR27.18 / 18.99
12/12
1,102
106
9.6%
65.3
5.9%
41.3
62.2
83.8
196
0.5
1.9
8.7
7.7%
0.9
1.4
0.9
9.3
15.0
11.8
2.0
6.5%
3.3%
1.65
-7.8%
9.75
0.65
20.7%
12/13
12/14e
12/15e
1,198
1,310
1,388
119
140
152
10.0%
10.7%
11.0%
74.7
94.4
106
6.2%
7.2%
7.6%
43.0
55.6
63.2
68.1
80.7
88.3
96.1
117
122
194
142
82.9
0.4
0.3
0.2
1.6
1.0
0.5
7.8
11.5
16.6
8.4%
9.8%
10.6%
1.0
1.1
1.2
1.7
1.6
1.6
1.0
0.9
0.8
10.2
8.3
7.3
16.3
12.3
10.5
14.2
11.9
11.0
2.5
2.3
2.1
5.4%
7.4%
8.2%
3.0%
3.2%
3.3%
1.79
2.10
2.26
8.5%
17.0%
8.0%
9.97
10.92
12.00
0.75
0.80
0.82
-1.7%
-1.4%
-1.4%
Avg. Daily nb traded shares:47,099
Profile: TKH Group specializes in the development and delivery of systems and networks for the IT,
telecommunication, engineering and industrial production industry. TKH Group consists of three divisions:
Telecom, Building and Industrial and is active mainly in Europe. Telecom is mainly aimed at the telecom
operators, alternative carriers and their installers. Building services specific niches as well as distributors that
service construction and other markets. Industrial services specific industries (such as automotive and
robotic) while the division also manufactures production systems for the tyre and metal packaging industry.
SWOT Analysis
Strengths
• Strong positions in selected growth markets
Weaknesses
• § Continued partial exposure to commodity products
• High margins on value added solutions
• Limited scale in regional markets
• Solutions approach gives higher client loyalty
Opportunities
• Growing need for security products
Threats
• Cyclical exposure in Building
• Ageing population increases home care demand
• Limited scale in regional markets
• Continuing high demand for high speed data- and
telecommunication products
• Big 5 tyre producers opening up for external machine
producers
Main shareholders: Free float 65.0%; Delta Lloyd 10.1%; Fidelity 9.3%;
Darlin 5.3%; BreedInvest 5.2%; ASR 5.1%;
Recommendation: We appreciate TKH’s strategy to expand downstream into suppliers of integrated
systems in specialist niches. The valuation of TKH, 8x EV/EBITDA, would be undemanding for the “new”
business, but appears to deny the weight of the still existing volume-sensitive cable-making units. Hold.
All share prices at 19/05/14.
Target Price: EUR 22.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
32
30
28
26
Gert Steens
24
22
20
18
16
14
12
Mar 11
Source : Factset
190
TKH GROUP SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+312 0 5508639
SNS Securities
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 5.21
Hold
TOMTOM
TOM2.AS/TOM2 NA
Market capitalisation: EUR 1158m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR6.10 / 3.67
12/12
1,057
181
17.1%
70.2
6.6%
129
175
157
82.7
0.1
0.5
15.1
13.1%
1.3
0.8
0.9
5.3
13.7
4.8
1.0
13.6%
0.0%
0.79
44.4%
3.77
0.00
39.0%
12/13e
12/14e
12/15e
963
882
909
143
148
172
14.8%
16.8%
19.0%
25.5
35.4
64.5
2.7%
4.0%
7.1%
19.5
24.5
46.9
66.0
71.0
93.4
206
58.6
97.0
-84.3
-108
-154
-0.1
-0.1
-0.2
-0.6
-0.7
-0.9
48.5
74.0
high
2.1%
2.5%
4.7%
0.2
0.3
0.5
1.1
1.1
1.0
1.1
1.2
1.1
7.7
7.4
6.0
42.9
30.7
16.2
17.3
16.3
12.4
1.3
1.3
1.3
15.3%
2.0%
7.0%
0.0%
0.0%
3.1%
0.30
0.32
0.42
-62.4%
7.4%
31.3%
3.84
3.99
4.08
0.00
0.00
0.16
-6.8%
14.2%
13.2%
Avg. Daily nb traded shares:689,702
Main shareholders: Free float 52.8%; P.Geelen 11.8%; P.F. Pauwels 11.8%;
C.Goddijn 11.8%; H.Goddijn 11.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
t i t re
6.0
Profile: TomTom is a provider of personal navigation products, content and services to consumer mass
markets, businesses and governmental agencies. Its main products are the TomTom Go, Via and One
series, devices allowing for dynamic navigation and connectivity. It is a market leader in Europe and has the
number two position in North America and has recently entered the In-car market in a deal with Renault. It
has also entered the smart phone market by means of its deal with Apple. The acquisition of Tele Atlas
(2007) has added a key ingredient for navigation: the digital database on which maps are based. This has
allowed the company to branch out in various ways, including providing traffic services both the corporations
and public entities.
SWOT Analysis
Strengths
• Market leader in PND, Maps & Traffic
Weaknesses
• High R&D cost base
• Strong balance sheet
• Limited product range
• Quality of software and content
• No strategic view management
Opportunities
• Grow Fleet management
Threats
• Google expanding in Automotive
• Expand in Automotive
• Increased competition in Fleet management
• Increase presenence in Fitness
• Acceleration in decline in PND
Recommendation: The consumer business is stabilizing and Telematics continues to grow rapidly.
However, in Licensing TomTom continues to see revenues decline (despite the Apple contract) while in
Automotive the phasing out of certain contracts will also result in declining revenues in FY14. The continued
high investment levels is also a cause for concern, especially as the competition also increases spend,
turning it into a rat race about who has the highest quality and richest map database. This will hamper both
EBITDA and cash flow going forward. TomTom may have a strategic asset because of its map database but
we do not see the founders (48%) looking at the available options (sale of minority stake in map business,
IPO of TomTom telematics). As a result, we rate the shares Hold.
5.5
Target Price: EUR 5.00
5.0
4.5
4.0
TOMTOM SMALL & MID CAPS SELECTION
Analyst(s)
3.5
3.0
2.5
2.0
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Martijn den Drijver
+312 0 5508636
SNS Securities
[email protected]
191
Italy
SMALL & MID CAPS SELECTION
EUR 7.13
Hold
TREVI
TFI.MI/TFI IM
Market capitalisation: EUR 501m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR8.48 / 5.80
12/12
1,155
132
11.4%
60.4
5.2%
0.5
11.5
91.7
398
0.9
3.0
4.1
7.1%
1.0
0.9
0.7
6.1
13.3
24.7
0.7
14.1%
3.2%
0.16
-57.2%
5.97
0.13
12.1%
12/13
12/14e
12/15e
1,276
1,311
1,373
144
147
161
11.3%
11.2%
11.7%
80.3
76.4
89.4
6.3%
5.8%
6.5%
10.1
11.2
18.3
13.8
14.8
21.9
98.9
96.9
105
442
430
419
1.0
1.0
0.9
3.1
2.9
2.6
4.8
4.8
5.0
9.2%
8.7%
10.1%
1.2
1.2
1.4
1.2
1.2
1.2
0.8
0.8
0.8
7.0
7.2
6.6
12.5
13.9
11.8
32.1
33.7
22.9
1.1
1.2
1.2
12.9%
6.5%
5.9%
1.8%
1.8%
1.8%
0.20
0.21
0.31
19.7%
7.8%
47.6%
5.78
5.86
6.05
0.13
0.13
0.13
9.9%
2.4%
-12.6%
Avg. Daily nb traded shares:83,824
Main shareholders: Trevi family 50.2%; Free Float 49.8%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
11
10/07/14 Dividend Payment
10
9
8
7
6
2013
Profile: the group is a world-wide leader in the field of soil engineering (special foundations, tunnel excavations, soil
consolidation and the production and marketing of special rigs and equipment relevant to this engineering sector); the group
is also active in the drilling sector (oil, gas and water), both in the production of plant and the supply of services. Its success
is due to the vertical integration of its 4 divisions: Trevi, that supplies special services in the field of soil engineering and
drilling; Petreven, the oil drilling division of the Group; Soilmec, that produces and develops rigs and equipment for soil
engineering; and Drillmec, the division that produces and develops drilling rigs (oil, gas and water).
SWOT Analysis
Strengths
• Strong interaction between equipment and service
divisions
• Strong track record and high technological level
• High entry barriers (only 4 world players specialized in the
soil foundation work)
• High geographical diversification
Opportunities
• Strong increase expected in the Exploration and
Production activity so in the drilling equipment sector
• Potential big projects in the infrastructure in Middle East
Weaknesses
• Major competition in infrastructure andgeopolitical risks
• difficulties in generating cash flow in view of sustained
level capex to keep the business running and unbalances in
NWC
management
•the
USD
exposure
(50% of total sales)
• Potential size problems (managers, technicians)
Threats
• Slowdown in the oil & gas prices entails low orders in the
drilling equipment
• A longer-than expected economic stagnation entail a
further sales drop in the foundation division (especially in
Europe)
Q1 14 revenues decrease was due to a weak sales performance both in the foundation and drilling division (-8.6% Y/Y) and in
the mechanical division (-19.1% Y/Y). The sales decrease negatively impacted the profitability (EBITDA margin moved from
12.5% in Q1 13 to 11.7% in Q1 14).
Sound order book: thanks to the important orders in the drilling equipment obtained in the last few months, the order book at the
end of March 2014 was of EUR 1,092m, +24.4% compared to EUR 877.4m at the end of December 2013 and in line with EUR
1,109m at the end of March 2013..
Perspectives for 4 group’s divisions: Foundation Services – despite a still difficult situation in some European markets,
especially in Italy, a positive sales trend and stable margins should be achieved thanks to the long-term visibility of the order
backlog and the several opportunities in some key markets. Foundation equipment – the continuous strong demand for
construction and infrastructure in South and North America and in the Middle East and the recovery in some European key
markets should allow the group to improve the profitability. Drilling service – after the postponement of some contracts in
2013, currently all 14 rigs of the group are in use; furthermore, one or two drilling works should begin during the current
year. So, the profitability should benefit from the expected positive sales growth. Oil & gas Drilling equipment – the orders
received in the last few months and the current negotiations confirm the current positive momentum in the oil and gas
equipment market. The group has good perspectives to sign new contracts in onshore and off-shore sectors in Russia &
CIS, Far East and America.
FY 14 guidance: based on Q1 order book and on the current visibility, the management said that the group should achieve
FY 14 sales around EUR 1.3bn (vs FY 13 sales of EUR 1.28bn), a FY 14 EBIT of approximately EUR 70m (vs FY 13 EBIT
of EUR 80m) and FY 14 NFP in line with the previous year. We have factored the new guidance into our FY 14e estimates.
Recommendation: based on the current visibility, we confirm our Hold recommendation and our target price of EUR 8.20
per share, which is calculated based on the DCF model valuation (WACC 7.4%, 1.5% perpetual growth rate).
Target Price: EUR 8.20
5
Analyst(s)
4
3
Mar 11
Source : Factset
192
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Paola Saglietti
Banca Akros
+39 02 4344 4287
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 3.61
Hold
TUBACEX
TUBA.MC/TUB SM
Market capitalisation: EUR 479m
Basic Resources
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR3.61 / 2.27
12/12
532
45.8
8.6%
26.5
5.0%
11.9
11.9
31.3
262
1.0
5.7
3.4
3.9%
0.4
1.1
1.0
11.8
20.3
22.3
1.0
-11.9%
1.5%
0.09
nm
1.89
0.03
43.3%
12/13
12/14e
12/15e
554
573
611
51.3
62.4
70.1
9.3%
10.9%
11.5%
31.5
39.6
46.4
5.7%
6.9%
7.6%
15.0
19.4
24.8
15.0
19.4
24.8
34.4
42.6
49.1
196
187
180
0.7
0.7
0.6
3.8
3.0
2.6
3.8
4.9
5.7
5.4%
6.7%
7.6%
0.6
0.7
0.8
1.4
1.5
1.5
1.1
1.2
1.1
11.6
10.9
9.6
18.8
17.2
14.5
25.6
24.7
19.3
1.5
1.7
1.6
20.8%
2.7%
2.8%
1.0%
1.2%
1.4%
0.11
0.15
0.19
26.6%
29.2%
27.8%
1.95
2.07
2.21
0.03
0.04
0.05
26.3%
19.6%
7.3%
Avg. Daily nb traded shares:1,116,396
Main shareholders: Free float 62.0%; J.M Aristrain 11.0%; Amber 7.0%;
Profile: Tubacex is specialized in the production of seamless stainless steel tubes. World production of
seamless stainless steel tubes is only around 0.3 million tonnes. Tubacex is the second producer worldwide
in what is an extremely concentrated market (80% of output in the hands of the top four manufacturers).
Tubacex tubes are extruded to withstand extreme pressures and temperature conditions. The company's
main clients are in industries like oil, petrochemicals, chemicals, energy, nuclear power, aeronautics,
automobiles. Its business is primarily export-led.
SWOT Analysis
Strengths
• SBER and TTI's specialised added value products
Weaknesses
• Moderate growth sector
• Entrance barriers in the sector
• Highly dependent on the projects market
• Large investments in the petrochemical sector
• Highly cyclical
Opportunities
• Better product mix
Threats
• The volatility of nickel prices is not positive.
• Potential to increase market share
• A strong fall in nickel price could affect the P&L account
• High free float
• Growing supply
• Prolonged economic weakness
Recommendation: 1Q14 results slightly better than expected in 1Q’14. The reactivation of nickel prices is
giving the market a boost and the Oil & Gas sector continues very active, as demonstrated by engineering
companies backlog. EBITDA margin reached 11.8%, above the 11% target for this period. At the end of
1Q’14, working capital fell a little compared to 2013, and is now at 39% o/sales 12m, below the first phase
target (<45%). Net debt reached EUR176.7m, below 2013 (3.3x net debt/EBITDA’12m). By the end of the
year we expect the company to near the target of <3x..
Ecofin Ltd. 4.9%;
All share prices at 19/05/14.
Target Price: EUR 3.70
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
4.0
28/05/14 AGM
2013
27/05/14 AGM
2013
3.5
3.0
2.5
Iñigo Recio Pascual
2.0
1.5
Mar 11
TUBACEX SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+34 91 436 7814
BEKA Finance
[email protected]
Jun 14
Source : Factset
193
France
SMALL & MID CAPS SELECTION
EUR 14.26
Hold
UBISOFT
UBIP.PA/UBI FP
Market capitalisation: EUR 1490m
Media
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.26 / 8.19
03/13
1,256
461
36.7%
87.9
7.0%
64.8
68.4
451
-111
-0.1
-0.2
99.5
9.4%
1.0
1.0
0.6
1.5
8.0
14.6
1.0
0.4%
0.0%
0.58
62.0%
8.73
0.00
45.8%
03/14e
03/15e
03/16e
1,007
1,518
1,638
307
618
691
30.5%
40.7%
42.2%
-97.9
158
195
nm
10.4%
11.9%
-67.2
100.0
129
-67.2
100.0
129
300
570
635
13.3
-67.2
-170
0.0
-0.1
-0.2
0.0
-0.1
-0.2
41.1
nm
nm
-5.8%
14.3%
16.6%
-0.6
1.5
1.7
1.8
1.8
1.6
1.4
0.9
0.8
4.5
2.3
1.9
nm
9.1
6.8
nm
15.7
12.2
1.7
1.6
1.4
-12.0%
5.4%
6.9%
0.0%
0.0%
0.0%
-0.61
0.91
1.17
-chg
+chg
29.0%
7.75
8.71
9.94
0.00
0.00
0.00
43.0%
19.8%
13.7%
Avg. Daily nb traded shares:507,913
Main shareholders: Free float 89.4% (81.6%); FrŠres Guillemot 10.6% (18.4%);
All share prices at 19/05/14.
Profile: Ubisoft is a key player in video games (No. 4 in Europe and in the US), active in high-end games for
core gamers as well as casual games and mobile/tablets. Breakdown of sales in 2012-13: 26% casual, 74%
HD, 12% online, with the main platforms being Nintendo Wii 15%, Xbox 360 34%, PS3 30%.
SWOT Analysis
Strengths
• Strong brands: 4 key franchises for the next cycle
(Assassin's Creed, Just Dance, Far Cry, Watch Dogs)
• Creative capability in casual games (Just Dance)
• Know how on "open world" games, key feature of next
gen consoles
• Lack of regularity in game releases (eg WatchDogs)
Opportunities
• Success of next gen consoles
Threats
• High-end games for the new consoles: very competitive
market, there will be an inflation of thedeveloment costs
cycle
•over
Fallthe
of Nintendo
Wii casual segment
• Development of digital games
Recommendation: The stock price recovered strongly after the warning last October due to the delay for
Watch Dogs. The stock is now trading at an EV/Sales of 0.9x, compared to 1.5x for EA, and EV/EBIT of
9.6x, higher than Activision (8.8x) and EA (9.4x). This multiple is based on the company’s 2014-15 guidance
of EBIT at EUR150m, assuming solid successes for Watch Dogs and Assassin’s Creed, and no bad
surprises! We therefore believe that the risk/reward is unattractive at the current share price, as Ubisoft
clearly deserves a discount to its two major competitors, which have stronger brands and advantages in
terms of size, profitability and being more advanced in the move toward digital distribution and mobile (EA).
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Weaknesses
• Size vs US majors (sales EUR1.0bn vs USD4.3bn for
Activision and USD3.9bn for EA)
• Weak presence in certain genres, most notably sport and
cars
• Still small in online distribution, free-to-play and mobile
Target Price: EUR 12.50
titre
16
01/07/14 AGM
14
10
8
Eric Ravary
6
4
2
Mar 11
Source : Factset
194
2014
UBISOFT SMALL & MID CAPS SELECTION
Analyst(s)
12
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+33 1 45 96 79 53
CM - CIC Securities
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 14.00
Buy
UPONOR
UNR1V.HE/UNR1V FH
Market capitalisation: EUR 1025m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR15.74 / 11.00
12/12
812
86.9
10.7%
57.7
7.1%
32.9
32.9
62.1
94.1
0.4
1.1
10.5
14.4%
1.6
2.5
0.9
8.8
13.2
21.4
3.4
2.9%
4.0%
0.45
40.0%
2.87
0.38
12.9%
12/13
12/14e
12/15e
906
1,036
1,097
83.2
114
134
9.2%
11.0%
12.3%
50.2
77.9
97.0
5.5%
7.5%
8.8%
28.1
44.9
56.8
28.1
44.9
56.8
60.1
84.4
99.1
96.9
68.3
50.2
0.3
0.2
0.2
1.2
0.6
0.4
11.9
12.2
15.1
9.6%
15.3%
18.9%
1.1
1.7
2.1
2.8
2.7
2.7
1.2
1.0
1.0
13.4
9.3
7.8
22.1
13.7
10.8
37.0
22.8
18.0
4.7
4.3
4.0
0.9%
5.8%
5.8%
2.7%
3.6%
3.9%
0.38
0.61
0.78
-14.6%
59.8%
26.6%
3.00
3.24
3.51
0.38
0.50
0.54
-7.9%
11.6%
7.9%
Avg. Daily nb traded shares:18,239
Profile: Uponor provides plastic pipe systems to international building markets. Main demand drivers are
new residential construction and residential renovation in Europe and in North-America. The company
provides plumbing and indoor climate solutions as well as infrastructure systems. Plastic resins are the key
raw material in production. Plastic pipe systems continue to gain ground both in new build and renovation,
thanks to their handling properties, easy installation and durability. The largest countries by sales are
Germany, USA, Finland, Sweden, Norway, Canada and Denmark.
SWOT Analysis
Strengths
• Brand loyalty
Weaknesses
• Large role of wholesalers in the distribution chain
• Pricing power
• Raw material costs driven by oil prices
• Sustainability and energy efficiency foster the company's
offering
• Plastic systems continue to replace copper
Opportunities
• Energy efficiency favours hydronic heating and cooling
systems
• Revival of construction markets in the US and especially in
Europe
• Possible entry into Asia
Threats
• Tightening competition, Private label, Asian
manufacturers
• European construction volumes suffering for a long time
• Consolidation benefits in Uponor Infra
Main shareholders: Free float 75.0%; Oras Invest Oy 22.6%; Varma Mutual Pension Insurance Co 7.1%;
Ilmarinen Mutual Pension Insurance Co 1.9%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
16
15
25/07/14 Results
2014Q2
25/07/14 Results
2014Q2
Recommendation: We see Uponor as an early cyclical company benefitting from European recovery. It has
major growth potential in the medium term when new residential construction takes an upward turn in
Europe after 7 consecutive years of decline and the low capacity utilisation rate of around 50 % picks up.
Stabilisation of the European decline will bolster top-line growth already this year and launching the SACP
product innovation will prop up growth through a strengthening market share. Furthermore, Uponor Infra is in
a good place to improve its profits through consolidation benefits. The EUR 16 target price is based on our
2015 forecast and the 5-year average EV/EBIT of 12.5.
Target Price: EUR 16.00
14
13
12
11
UPONOR SMALL & MID CAPS SELECTION
Analyst(s)
10
9
8
7
6
Mar 11
Source : Factset
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Matias Rautionmaa
+358 10 252 4408
Pohjola
[email protected]
195
Netherlands
SMALL & MID CAPS SELECTION
EUR 10.40
Reduce
USG PEOPLE
USGP.AS/USG NA
Market capitalisation: EUR 842m
Support Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR14.10 / 5.00
12/12
2,877
106
3.7%
67.9
2.4%
36.6
45.9
50.1
244
0.5
2.3
8.9
7.2%
0.8
1.2
0.3
7.8
12.1
10.4
1.0
5.1%
2.0%
0.58
-25.6%
6.29
0.12
73.5%
12/13
12/14e
12/15e
2,270
2,397
2,492
82.5
106
118
3.6%
4.4%
4.7%
53.0
78.6
90.6
2.3%
3.3%
3.6%
23.6
44.6
54.5
21.0
58.1
68.0
-5.4
25.5
79.4
178
189
169
0.4
0.4
0.3
2.2
1.8
1.4
8.6
14.0
21.1
6.2%
9.2%
10.4%
0.7
1.7
1.8
1.7
0.5
0.5
0.5
13.0
10.9
9.5
20.3
14.7
12.4
36.9
14.5
12.4
1.7
1.8
1.6
-3.4%
-0.3%
4.1%
1.3%
2.3%
3.2%
0.26
0.72
0.84
-54.7%
173.1%
17.0%
5.73
5.90
6.35
0.14
0.24
0.34
9.5%
-21.2%
-10.7%
Avg. Daily nb traded shares:809,545
Main shareholders: Free float 76.0%; Alex Mulder 20.0%; Norges Bank 4.0%;
Profile: USG People is a generalist staffing company with a substantial exposure to small and medium sized
companies. It also has a relatively high exposure to specialty niches. Approximately 50% of total sales are
specialty or professional staffing business.
The company is executing a re-invigoration of its business portfolio, with operating command per vertical
assumed at the head office. The company is actively going after a multitude of perceived opportunities, and
the much-speculated bid-an-break-up scenario is not on the management’s cards.
SWOT Analysis
Strengths
• Exposure to SME market
Weaknesses
• Exposure to relatively mature Benelux market
• Benelux market shares
• Lack of strategic clout elsewhere
• Secretary+ vertical excellence
• Cyclical due to high fixed cost base (multi-brand)
• Financial leverage
Opportunities
• Best-practice know-how transfer amongst divisions
• Sell France in the upturn
Threats
• Aggressive market share strategy from the major staffing
companies
• Penetration in the Netherlands stagnant
Recommendation: We stay on the sidelines as USG’s strategic ambitions are being pursued in the cyclical
upswing. Recent performance appears to have exaggerated the impact of momentum on fundamental
runner-up value in the Benelux and small shares in France and Germany. On 10x restructured and
recovered 2015E EV/EBITDA, the stock’s valuation too easily takes success for granted. Reduce.
All share prices at 19/05/14.
Target Price: EUR 6.50
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
14
30/07/14 Analyst Meeting
13
2014Q2
12
11
05/06/14 Dividend Payment
10
9
8
7
6
5
4
Mar 11
Source : Factset
196
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
2013
USG PEOPLE SMALL & MID CAPS SELECTION
Analyst(s)
Gert Steens
+312 0 5508639
SNS Securities
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 29.04
Reduce
VACON
VAC1V.HE/VAC1V FH
Market capitalisation: EUR 885m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR31.10 / 23.95
12/12
388
48.3
12.4%
37.7
9.7%
26.6
25.6
37.1
-2.4
0.0
0.0
53.7
27.1%
4.7
5.8
1.5
12.4
15.9
24.0
5.7
5.4%
2.7%
0.84
5.0%
3.55
0.55
3.7%
12/13
403
54.4
13.5%
40.7
10.1%
29.6
29.6
42.5
-7.7
-0.1
-0.1
60.4
29.3%
5.1
8.1
2.2
16.0
21.4
30.1
7.6
2.7%
2.2%
0.97
16.1%
3.85
0.65
2.8%
12/14e
12/15e
423
451
61.6
67.0
14.6%
14.9%
47.6
53.0
11.2%
11.8%
35.7
40.0
35.7
40.0
49.5
53.8
-15.5
-28.0
-0.1
-0.2
-0.3
-0.4
nm
high
33.1%
35.2%
5.8
6.1
7.7
7.3
2.0
1.9
13.9
12.6
18.0
15.9
24.8
22.2
6.7
6.0
3.4%
3.7%
2.4%
2.8%
1.17
1.31
20.7%
11.8%
4.31
4.85
0.70
0.80
0.5%
-2.0%
Avg. Daily nb traded shares:8,604
Main shareholders: Free float 100.0%; Ac Invest Three Bv 13.5%; Ilmarinen Mutual Pension Insurance Company 5.6%;
Tapiola Mutual Pension Insurance Company 3.8%;
All share prices at 19/05/14.
Profile: Vacon develops and manufactures low voltage AC drives that are used for controlling the speed of
electric motors and in renewable energy production. Vacon’s R&D and production units are located in
Finland, the US, China, India and Italy, and the company has sales offices in 30 countries. The largest
industry segments using AC drives are building automation, cranes & hoists, marine & offshore, mining &
metals, water & wastewater, elevators & escalators, pulp & paper, food & beverage, solar and wind. In 2013,
Vacon made approximately 60% of its sales in the EMEA region, 17% in the Americas and 23% in APAC.
Vacon estimates that its share of the global AC drives market is approximately 5%. The low voltage AC
driver market is quite fragmented. The company's competitors include ABB, Siemens, Schneider Toshiba
and Rockwell.
SWOT Analysis
Strengths
• Strong market position in low frequency AC drives
Weaknesses
• Small in size
• Extensive product selection for different applications and
power ranges
• Wide and evenly spread clientele
• Service business represents a minor portion of sales
• Good profitability thanks to a narrow product strategy
focus
Opportunities
• Small market share enables growth through market share
gains as well
• Renewable energy products offer growth potential
• Technological changes, maintaining position at the cutting
edge of development
Recommendation: Vacon’s Q1 sales were on a par with our estimate, but operating profit missed both
our forecast and the optimistic consensus. The broad guidance was reiterated: 5–15% top-line growth,
margin between 11% and 13%. Even the mid-point of it will require notable profitability improvement later
this year on Q1 and the same period last year. Q1 demonstrated that when sales total less than
EUR 100m, margin will be clearly below the target readings. Vacon’s growth, profitability and balance
sheet justify a premium, but not as high as currently. In our opinion, the share price reflects future
growth/profitability, which is hard to achieve.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Threats
• Increasing competition from low-cost countries
Target Price: EUR 25.00
titre
32
30
30/07/14 Results
2014H1
30/07/14 Analyst Meeting
2014H1
28
26
24
22
20
18
Pekka Spolander
16
14
12
Mar 11
VACON SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+358 10 252 4351
Pohjola
[email protected]
Jun 14
Source : Factset
197
Finland
SMALL & MID CAPS SELECTION
EUR 23.60
Reduce
VAISALA
VAIAS.HE/VAIAS FH
Market capitalisation: EUR 426m
Electronic & Electrical Equipment
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR24.98 / 17.75
12/12
293
146
49.7%
30.1
10.3%
21.7
21.7
138
-71.6
-0.4
-0.5
high
20.8%
3.1
1.9
0.7
1.4
7.0
13.2
1.5
49.5%
13.2%
1.20
108.4%
10.55
2.10
9.6%
12/13
273
135
49.3%
18.2
6.7%
11.1
11.1
128
-37.8
-0.2
-0.3
high
12.6%
1.9
3.3
1.4
2.8
20.4
37.8
2.6
28.8%
3.8%
0.61
-48.8%
9.01
0.90
19.2%
12/14e
12/15e
310
344
157
175
50.8%
50.8%
27.4
35.6
8.8%
10.3%
19.6
25.5
19.6
25.5
150
165
-33.8
-42.7
-0.2
-0.2
-0.2
-0.2
high
high
17.6%
22.8%
2.6
3.4
3.2
3.1
1.2
1.1
2.4
2.1
14.0
10.5
21.8
16.7
2.6
2.4
28.4%
35.5%
3.8%
4.2%
1.08
1.41
76.3%
30.1%
9.22
9.74
0.90
0.99
-2.3%
0.2%
Avg. Daily nb traded shares:1,008
Profile: Vaisala is a globally leading environmental and industrial measurement company established
75 years ago. Vaisala sells and develops observation and measurement products and services for
meteorology, weather-dependent businesses (73% of sales) and controlled environments (27% of sales).
The customers of the Weather business are meteorological institutes, airports, road and railroad, defence,
and the energy industry. The Controlled Environment business offers products and services to life science
customers and chosen applications in various industries.
Headquartered in Finland, Vaisala employs over 1,400 people. In 2013, exports represented 97% of
Vaisala’s sales, with North America contributing 39%, Asia Pacific 25% and Europe 36%. Vaisala does not
have any major competitors, only small rivals.
SWOT Analysis
Strengths
• Market leader in several sectors related to weather
observation and measurement
• Highly fragmented market, competitors are small
compared to Vaisala
• Strong balance sheet
Weaknesses
• Customers are very dependent on government budget
appropriations
• Service business accounts for a minor share of sales
Opportunities
• The role of environmental measurement is continuously
increasing
• Expanding the business to selected industry and
healthcare sectors
Threats
• Legislation changes (some products are for defence
industry)
• New customer industries fail to grow as expected
Main shareholders: Free float 100.0%; Novametor Oy 10.2%; Suomalainen Tiedeakatemia 7.3%;
Mikko Voipio 3.5%;
Recommendation: On our new forecasts, Vaisala’s valuation is still high given the weak visibility into this
year. Vaisala is an interesting company in the long term but, over a 12-month horizon, we consider the
return potential of the company’s shares limited.
All share prices at 19/05/14.
Target Price: EUR 22.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
25
23/07/14 Results
24
23
22
26/05/14 Capital Markets Day
21
20
19
18
16
15
14
Mar 11
198
VAISALA SMALL & MID CAPS SELECTION
Analyst(s)
Hannu Rauhala
17
Source : Factset
2014Q2
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+358 10 252 4392
Pohjola
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 36.65
Hold
VASTNED RETAIL
VASN.AS/VASTN NA
Market capitalisation: EUR 698m
Real Estate
EUR
12/12
133
107
80.0%
(121)
(37)
(41)
63
62.55
864
1,981
1,488
3.31
2.55
47.26
(30.7%)
50.55
10.1%
7.8%
13.9
10
3.0
864
43.1%
1.8%
12/13
12/14e
12/15e
123
98
105
EBITDA (m)
98
78
83
EBITDA margin
79.4%
79.2%
79.5%
Portfolio Result (m)
(131)
(50)
0
Net Financial Result
(47)
(29)
(29)
Net Profit (reported)(m)
(89)
(10)
47
Net Profit (adj.)(m)
54
42
47
Funds From Operations
54.20
42.13
47.06
Net Debt (m)
751
670
672
Portfolio Value (m)
1,536
1,561
1,581
Enterprise Value (m)
1,378
1,368
1,370
EPS (adj.)
2.85
2.21
2.47
DPS
2.55
1.88
2.10
IFRS NAVPS
41.57
38.71
39.25
Premium/(discount)
(20.7%)
(5.3%)
(6.6%)
EPRA NAVPS
44.47
41.41
41.99
Earnings adj. yield
7.8%
6.0%
6.7%
Dividend yield
7.0%
5.1%
5.7%
EV/EBITDA
14.1
17.5
16.4
P/E (adj.)
12
17
15
Int. cover(EBITDA/Fin.int)
2.8
2.7
2.9
Net debt/(cash) (m)
751
670
672
Net Debt/Total Assets
43.9%
42.5%
42.2%
Abs. Performances(12m,6m,3m,1m):
7.7%
1.2%
4.1%
12 month High/low: EUR38.81 / 29.79
Avg. Daily nb traded shares:17,869
Main shareholders: Free float 77.0% (82.1%); CBRE Clarion Securities 6.9%; Commonwealth Bank of Australia 5.7%;
Gross Rental Income (m)
Belfius Insurance 5.3%; Stichting Pensioenfonds ABP 5.2%;
All share prices at 19/05/14.
Profile: Vastned Retail is a Dutch REIT with a property portfolio of EUR 1.7bn invested in high street shops
(69.3%) and other retail properties (mainly shopping centres and to a lesser extent retail warehouses). The
strategy is to increase the share of high street shops to 65%, with a focus on A-locations in major cities. The
portfolio is located in the Netherlands (36.8%), France (21.2%), Belgium (21.3%), Spain/Portgual (7.6%) and
Turkey (13.0%). The property portfolio comprises approx. 550 properties, with the top 50 properties
representing about 70% of the total portfolio value. Vastned Retail was founded in 1986 listed on Euronext
Amsterdam since November 1987 and on Euronext Paris since December 2004.
SWOT Analysis
Strengths
• Well diversified, large retail portfolio
• Defensiveness high-street portfolio
Weaknesses
• Exposure to Spanish retail market, but has been reduced
in January 2014
• Limited organic growth track record and potential
• Liquid portfolio (a lot of small properties)
• Part of properties are secondary
• Portfolio rents overall in line with market
Opportunities
• Strategy of increasing the share of high street shops from
49% to 65% should decrease risk profile and increase
growth
potential
•organic
Hands-on
tenant
management
Threats
• Marco-economic situation, especially in Spain
• E-commerce
• CFO is leaving the company at the end of the year
Recommendation: The direct result per share for 2013 was EUR 2.85 down 13.9% vs 2012 (EUR 3.31).
This is at the upper end of management’s guidance (between EUR 2.75 and EUR 2.85) as at the publication
of 9M13 results. EPRA NAV per share was EUR 43.58, down 14.9% over the year. Hence, Vastned Retail is
trading at a discount of 16.0%.
As a result of divestments at the end of 2013 and beginning 2014, management expects the FY14E direct
result per share to range between EUR 2.10 and EUR 2.30. We expect a comparable decline in FY14E
dividend. We maintain our Hold recommendation.
Target Price: EUR 39.00
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
55
14/08/14 Results
50
29/05/14 Dividend Payment
45
2014H1
2013
40
22/05/14 Results
35
19/05/14 Ex Dividend Date
30
25
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
2014Q1
VASTNED RETAIL SMALL & MID CAPS SELECTION
Analyst(s)
Dirk Peeters
+32 2 287 97 16
Bank Degroof
[email protected]
2013
Jun 14
Source : Factset
199
France
SMALL & MID CAPS SELECTION
EUR 59.25
Hold
VICAT
VCTP.PA/VCT FP
Market capitalisation: EUR 2602m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR63.49 / 45.88
12/12
2,292
437
19.1%
246
10.7%
129
129
327
1,193
0.5
2.7
12.7
4.5%
0.6
0.9
1.5
8.1
14.4
16.1
1.0
2.4%
2.5%
2.94
-21.3%
48.52
1.50
24.3%
12/13e
12/14e
12/15e
2,331
2,382
2,461
446
488
541
19.1%
20.5%
22.0%
255
292
335
10.9%
12.3%
13.6%
136
161
191
136
162
193
324
359
402
1,119
1,012
851
0.4
0.4
0.3
2.5
2.1
1.6
10.6
12.7
16.7
4.6%
5.4%
6.3%
0.7
0.7
nm
0.9
1.0
1.0
1.5
1.6
1.5
8.1
7.7
6.7
14.2
12.9
10.8
17.4
16.0
13.3
1.1
1.2
1.1
6.9%
7.7%
9.8%
2.7%
2.9%
2.9%
3.10
3.71
4.44
5.4%
19.9%
19.6%
49.59
51.10
53.30
1.60
1.70
1.70
7.9%
4.8%
-3.2%
Avg. Daily nb traded shares:10,550
Main shareholders: Family & Holdings 60.6%; Free Float 31.7%; Employees 4.7%;
Treasury stock 3.1%;
All share prices at 19/05/14.
Profile: Vicat is the third largest cement producer in France (16% of market share), and is vertically
integrated in aggregates and ready-mix concrete. The group is present in eight countries, and remains highly
exposed to the French market (38% of its 2013 sales), mainly in the Rhône-Alpes and south-west regions.
Emerging markets now account for 30% of sales and 65% of cement production capacity. Regional
breakdown of 2013 sales: France 37%, US 10%, Switzerland and Italy 19%, Turkey-Kazakhstan and India
20%, Mediterranean Rim/French-speaking West Africa 14%.
SWOT Analysis
Strengths
Weaknesses

Excellent management


Profitability above the sector average
Good industrial network reflected by better
environmental performances than the sector
average (C02, SOx and NOx emissions, energy
savings, etc.).


Targeted markets (plans for Kazakhstan, India)
Programme to extend cement capacities (+50%
by 2010).
Specific situation unfavourable in Egypt (the
plant is located in the Sinaï region, which is not
very secure, and there is market disruption
stemming from a new entrant)

Plans to install terminals & grinders in France by
importers
Short-term downturn in African cement prices
(ongoing new entrant Dangoté in Sénégal)
Opportunities
Threats

Recommendation: Consolidated sales in the 2013 financial year came to EUR2,286 million, representing
growth of 2.9% at constant scope and exchange rates compared with 2012. Net income attributable to equity
holders of the parent decreased by 6.9% to EUR120 million. EBITDA of EUR427m declined by 2.2% but
was stable on a like-for like basis. Ebitda was affected by 1) adverse pricing conditions in Africa 2) difficult
market conditions in Egypt 3) start-up of Vicat Sagar Chatrasala greenfield plant coupled with economic
slowdown in India. Conversely, improvement of the Construction sector in the “Sunbelt States” in US pushed
North American profitability to positive numbers and strong momentum in Kazakhstan improved the EBITDA
of Jambyl Cement by EUR12m. However, we think that after three years “in the wilderness” Vicat’s earnings
are likely to improve in 2014-2015. On the back of a more competitive landscape in Sénégal we downgraded
Vicat from Accumulate to Hold with a TP of EUR52.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)

Target Price: EUR 52.00
titre
65
04/08/14 Results
60
50
45
40
Jean-Christophe Lefèvre-Moulenq
35
30
Mar 11
Source : Factset
200
2014H1
VICAT SMALL & MID CAPS SELECTION
Analyst(s)
55
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
+33 1 45 96 91 04
CM - CIC Securities
[email protected]
Spain
SMALL & MID CAPS SELECTION
EUR 36.58
Buy
VIDRALA
VID.MC/VID SM
Market capitalisation: EUR 896m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR39.63 / 26.35
12/12
458
103
22.6%
65.3
14.3%
46.5
46.5
84.7
160
0.5
1.5
16.8
9.9%
1.3
1.3
1.4
6.4
10.1
11.0
1.5
13.4%
2.5%
1.90
6.5%
13.82
0.53
38.2%
12/13
12/14e
12/15e
474
493
503
110
122
127
23.3%
24.8%
25.2%
72.3
80.0
81.9
15.3%
16.2%
16.3%
52.3
60.9
63.5
52.3
60.9
63.5
90.4
103
108
118
86.9
46.0
0.3
0.2
0.1
1.1
0.7
0.4
27.7
47.7
nm
10.7%
11.9%
12.1%
1.4
1.6
1.6
2.0
1.8
1.7
2.2
2.0
1.8
9.2
7.9
7.3
14.1
12.1
11.3
17.5
14.7
14.1
2.4
2.1
1.9
4.7%
6.0%
6.6%
1.8%
2.0%
2.1%
2.14
2.49
2.59
12.4%
16.4%
4.2%
15.29
17.17
19.01
0.65
0.72
0.75
13.7%
0.8%
-3.9%
Avg. Daily nb traded shares:13,523
Main shareholders: Free float 48.0%; Familia Delclaux 40.0%; Addvalia 5.0%;
Familia Gallo 3.5%; Bestinver 3.5%;
All share prices at 19/05/14.
Profile: Vidrala is a hollow glass manufacturer with 6 plants (13 furnaces) in 4 countries, and estimated
production capacity of 1,125,000 tons/year. It holds a market share of 25% in the Iberian Peninsula, 6% in
France, 4% in Italy and 8% in Western Europe. In recent years the companies benefitting most from the
hollow-glass market in Europe have been the medium (Vidrala among these) and small sized companies
increasing their market share and volumes. This is due to the gradual capacity reduction on behalf of the
large players (e.g. O-I and Saint Gobain Verallia). Demand in Europe is still below pre-crisis levels.
SWOT Analysis
Strengths
• Leading position in the Iberian Peninsula
Weaknesses
• Strong correlation with energy prices
• Capacity to increase volumes
• Little growth in Italy
• Good geographic positioning
• Low liquidity
Opportunities
• Better margins due to progressive start up of capacity
Threats
• Competition with other containers: Tetra brick, PET
• advanced integration of the less efficient plants
• Economic crisis
• Sector consolidation
Recommendation: 1Q14 results in line with forecasts. The fall in sales was due to the weak demand in
addition to the programmed stop of a furnace for its renovation. This resulted in EBIT margin reaching
14.2% vs. 15.3% in 4Q’13. Net debt (EUR122.8m) dropped 30% in 1Q’14 vs. 1Q’13, thanks to the
substantial cash generation and control of investments, in line with 2013 year end (EUR117.9m). Vidrala
points to still weak demand, which limits the visibility in sales, although the cost reduction measures
underway will allow operating margins to recover progressively. Although sales growth was low, and we
will adjust full year forecasts, our opinion on the company is positive, pointing out the cost reduction policy,
high EBIT margins, ongoing net debt reduction, shareholders remuneration. In this sense, at the next
AGM, Vidrala will propose a final dividend of EUR0.175/share (July 14th) and 1x20 bonus issue.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 37.10
titre
40
30/05/14 AGM
2013
29/05/14 AGM
2013
35
30
25
Iñigo Recio Pascual
20
15
Mar 11
VIDRALA SMALL & MID CAPS SELECTION
Analyst(s)
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+34 91 436 7814
BEKA Finance
[email protected]
Jun 14
Source : Factset
201
France
SMALL & MID CAPS SELECTION
EUR 97.19
Buy
VILMORIN
VILM.PA/RIN FP
Market capitalisation: EUR 1840m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR101.80 / 84.89
06/12
1,338
269
20.1%
138
10.3%
80.6
86.9
249
316
0.3
1.2
19.6
7.3%
0.9
1.2
1.4
6.9
13.5
17.1
1.4
1.2%
1.8%
4.90
61.3%
58.48
1.50
3.4%
06/13
1,472
302
20.5%
157
10.6%
99.4
86.6
265
337
0.3
1.1
18.5
7.4%
0.9
1.4
1.5
7.2
13.8
20.4
1.6
4.2%
1.7%
4.31
-11.9%
54.17
1.65
3.9%
06/14e
06/15e
1,580
1,660
328
350
20.8%
21.1%
169
181
10.7%
10.9%
101
109
103
111
267
286
306
246
0.2
0.2
0.9
0.7
15.6
17.5
7.9%
8.3%
0.9
1.0
1.4
1.3
1.5
1.4
7.0
6.4
13.6
12.4
19.0
17.5
1.6
1.5
2.5%
4.9%
1.7%
1.8%
5.13
5.54
18.8%
8.1%
59.98
64.10
1.65
1.75
-0.6%
0.4%
Avg. Daily nb traded shares:5,150
Main shareholders: Limagrain 61.7% (75.5%); Free float 27.6% (18.0%); CDC 5.0% (6.5%);
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
105
July 30th 2014 Q4 2013-2014
October 7th results 2013-2014
100
95
90
Profile: Vilmorin is the fourth biggest global seed player, operating on the professional market and selling
vegetable seeds (46% of sales) and cereal seeds (54% of sales). The group is present on all five continents,
with Europe accounting for 61% of sales and France 26%. The US accounts for 27% of sales via a 50/50
joint venture with German seed player KWS. Asia accounts for 7% of its activity and the rest of the world
5%.
SWOT Analysis
Strengths
• Growing market
Weaknesses
• Level on price in emergent country
• Very technological market due to the appearance of
GMOs and the genomic seed
• Sector dominated by europaen and american companies
• Level on R&D
Opportunities
• Significant growth in new profitable markets i.e. India and
China
• Increasing power of GMOs
Threats
• Monsanto has today the world leadership of stickers
GMOs
• Risk in Europe with the ecologist for GMOs technology
• Developped on own stickers GMOs (corn and wheat)
• Inter connexion between seed company and the
governments in emergent country
• Price on M&A go up
Recommendation: With consolidated sales in Asia already representing 9% of group sales (mainly Japan
and China), Vilmorin is pursuing its acquisitions strategy – as announced – in order to enhance its foothold
in Asia and its species variety in its arable crops portfolio. The target acquired is based in Thailand and
specialised in hybrid tropical corn seeds. Seed Asia has over 80 employees and sales of USD9m with a
significant distribution network (200 distributors) spread throughout South East Asia. 40% of its sales are
generated through exports: Cambodia, Myanmar, Sri Lanka, etc. This acquisition provides Vilmorin with a
new field of activity, i.e. tropical corn, which accounts for nine million hectares of corn in Asia. The
technological contribution of this type of seed will enable Vilmorin to expand its presence in southern China
and in new regions where the group has recently established a foothold: South America and Africa. Halfyear results are traditionally negative and thus not representative. These numbers do, however, offer insight
into the full-year outlook, which is revised up. Guidance is for 2014 organic revenue growth of >+6% (+8.5%
CM-CIC and +7% on the actual structure) vs +5%; the operating margin is unchanged at >10.5% (10.82%
CM-CIC vs 10.77% in 2013).
Target Price: EUR 114.00
85
80
Analyst(s)
75
70
Mar 11
Source : Factset
202
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Francis Prêtre
CM - CIC Securities
+33 4 78 92 02 30
[email protected]
Netherlands
SMALL & MID CAPS SELECTION
EUR 4.35
Accumulate
WESSANEN
BSWSc.AS/WES NA
Market capitalisation: EUR 329m
Food & Beverage
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR4.50 / 2.62
12/12
711
15.0
2.1%
-45.8
nm
-49.4
-53.0
22.2
54.9
0.5
3.7
high
8.7%
1.0
0.9
0.3
14.6
nm
nm
1.5
5.4%
2.3%
-0.70
-chg
1.46
0.05
52.1%
12/13
12/14e
12/15e
516
510
525
25.7
43.7
44.4
5.0%
8.6%
8.5%
11.9
32.5
33.2
2.3%
6.4%
6.3%
1.8
29.2
24.7
-4.5
22.3
23.2
12.2
34.4
34.4
50.7
29.1
9.2
0.5
0.2
0.1
2.0
0.7
0.2
high
high
high
-1.6%
13.7%
14.2%
-0.2
1.6
1.7
1.5
2.0
1.9
0.5
0.7
0.6
10.3
8.2
7.6
22.2
11.0
10.2
nm
14.8
14.2
2.0
2.6
2.3
7.1%
8.3%
8.3%
1.1%
1.6%
3.5%
-0.06
0.29
0.31
+chg
+chg
4.0%
1.39
1.65
1.89
0.05
0.07
0.15
51.6%
30.0%
8.5%
Avg. Daily nb traded shares:155,875
Main shareholders: Free float 67.0%; Delta Partners 25.6%; Invesco 4.2%;
Sparinvest 3.2%;
All share prices at 19/05/14.
Profile: Wessanen is a Netherlands-based food company operating mainly on the market for organic
products in France, the Netherlands, the UK and Germany. Its organic products are distributed through
supermarkets, specialty health food stores and through foodservice outlets. Wessanen recently announced
to have sold its frozen snacks business IZICO to Egeria. In the US, Wessanen still owns the kids and
pouches business called American Beverage Corporation.
SWOT Analysis
Strengths
• Mid-sized position in European organic and natural
products niche
• Relationships with major retailers especially in France and
the Netherlands
• Strong brand names, especially Bjorg, Allos and
Bonneterre
• New CEO with hand-on approach
Weaknesses
• Poor strategy execution in the past
Opportunities
• Take advantage of growing organic food market
Threats
• Retailers developing own label ranges
• Create further focus by divesting ABC
• Disintermediation in wholesale
• Consolidation opportunities in the European organic
products market
• Lower the cost base a bit further
• Fast moving consumer goods companies moving into the
category
• Weak financial markets reputation
• Product portfolio has too many small brands
Recommendation: We rate Wessanen shares Accumulate with a target price of EUR 4.62. Our
recommendation is based on 1) Wessanen’s positions on growth markets, 2) a new energetic CEO with
hands-on approach, 3) a lower cost base and a lean organisation. 4) Sales growth rates have recently
improved and we expect slightly better margins in the next few years, 5) This is in the Brands business, with
a rationalized portfolio, 6) The divestment of ABC after the summer gives more focus, 7) An improved
balance sheet with reduced risk. Based on a weighted average of DCF (50%) and sum-of-the-parts (50%),
we calculate a target price of €4.62.
Target Price: EUR 4.62
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
• Failure to divest ABC business
t i t re
4.5
4.0
WESSANEN SMALL & MID CAPS SELECTION
Analyst(s)
3.5
3.0
Gerard Rijk
2.5
+ 31 (0)20 550 8572
SNS Securities
[email protected]
2.0
1.5
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Source : Factset
203
Germany
SMALL & MID CAPS SELECTION
EUR 43.33
Buy
WINCOR NIXDORF
WING.DE/WIN GY
Market capitalisation: EUR 1290m
Software & Computer Services
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR58.07 / 39.90
09/12
2,343
174
7.4%
101
4.3%
62.6
103
180
199
0.6
1.1
18.9
10.6%
1.2
1.2
0.5
6.7
11.5
8.8
2.8
3.6%
3.5%
3.45
-0.8%
10.90
1.05
-1.9%
09/13
09/14e
09/15e
2,465
2,514
2,612
191
210
225
7.8%
8.4%
8.6%
132
150
164
5.3%
6.0%
6.3%
87.1
99.1
110
107
99.1
110
146
167
184
124
75.6
12.7
0.3
0.2
0.0
0.6
0.4
0.1
33.8
35.7
52.6
11.4%
11.1%
11.8%
1.3
1.3
1.4
1.7
1.5
1.4
0.6
0.6
0.5
8.2
7.0
6.3
11.9
9.8
8.6
12.8
13.0
11.8
3.6
3.0
2.6
5.6%
6.5%
7.9%
3.4%
3.9%
4.4%
3.60
3.33
3.68
4.4%
-7.5%
10.7%
12.72
14.56
16.54
1.48
1.70
1.90
-11.2%
-24.4%
-9.2%
Avg. Daily nb traded shares:155,056
Profile: Wincor Nixdorf (WIN) provides hardware and software solutions and related services for the
segments Banking and Retail. It primarily manufactures a full range of cash dispensing machines and socalled electronic point of sale (EPOS) systems. Taking its growing outsourcing division into account, the
company can be considered a full-solution provider. The client base includes almost all renowned key
accounts in the afore-mentioned segments. Thanks to close collaboration with clients and innovation
leadership, Wincor now has an outstanding position in the international arena after significant market share
gains in recent years. Wincor is currently the European and German market leader in Retail. In Banking it is
the domestic market leader and among the top players word-wide.
SWOT Analysis
Strengths
• Strong history, high cash generative business model
• Profit focused management, high shareholder orientation
and attractive remuneration policy
• Relatively high entry barriers at the upper end
Weaknesses
• Competition causes price decline of 6-8% p.a. in the
hardware segment
• High dependence upon two challenging sectors (Banking
and Retail)
• Generally low order visibility
• Solid balance sheet with limited net debt
• Low US market share
Opportunities
• Wincor could be take over target
Threats
• IT budgets remain under tight control
• Banks could accelerate outsourcing
• Banking (branch) consolidation could reduce market
potential
• Competition in low-end products
• Retailers moving more capex into self-check-out
• Wincor's cashless activities
Main shareholders: Free float 89.6%; Own shares 10.4%;
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
60
55
Recommendation: We are betting on a share price rebound and upgraded the stock to ‘Buy’ from
‘Accumulate’ recently on a less dramatic 1H13/14 reporting at second glance. We keep our DCF based PT
of EUR 56 unchanged. Actually, we expected a mild profit warning (FY14e sales growth to be revised from
4% to 2% and a 3% lower EBIT) after a softer 2Q13/14 reporting and as fx as well as Russia and Turkey
exposure hit (5-10% of sales). We believe however that the share price slump was overdone.
EV/EBITDA'15e came down to 6.5x (EV/EBIT'15e to 8.9x). The P/E'15e is now at 12.3x. The dividend yield
is around 4% and the operating free cash flow yield at a solid 7%.
50
Target Price: EUR 56.00
45
40
35
30
Analyst(s)
25
20
Mrz 11
Source : Factset
204
Jun 11
Sep 11
Dez 11
Mrz 12
Jun 12
Sep 12
Dez 12
Mrz 13
Jun 13
Sep 13
Dez 13
Mrz 14
Jun 14
Adrian Pehl, CFA
Equinet Bank
+49 69 58997 438
[email protected]
Finland
SMALL & MID CAPS SELECTION
EUR 7.42
Hold
YIT
YTY1V.HE/YTY1V FH
Market capitalisation: EUR 929m
Materials, Construction & Infrastructure
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR15.55 / 7.05
12/12
0.0
20.6
nm
0.0
nm
-56.7
-56.7
-35.0
616
0.8
29.9
1.5
0.0%
0.0
1.7
nm
nm
nm
nm
2.4
-74.2%
5.1%
-0.45
-chg
6.08
0.75
-51.7%
12/13
12/14e
12/15e
1,087
1,169
1,138
122
171
167
11.2%
14.7%
14.7%
104
160
156
9.6%
13.7%
13.7%
70.2
111
109
70.2
111
109
87.8
122
120
782
684
532
1.1
1.0
0.7
6.4
4.0
3.2
13.7
10.5
10.4
6.8%
11.1%
11.5%
0.8
1.3
1.3
1.3
1.1
1.0
1.9
1.3
1.2
16.6
9.2
8.5
19.3
9.8
9.1
18.1
8.4
8.6
1.8
1.3
1.2
-5.0%
20.4%
21.7%
5.1%
6.0%
6.2%
0.56
0.88
0.87
+chg
57.8%
-2.0%
5.57
5.72
6.20
0.38
0.44
0.46
-21.3%
-13.8%
-2.8%
Avg. Daily nb traded shares:189,234
Main shareholders: Free float 100.0%; Structor S.A. 12.1%; Varma Mutual Pension Insurance Co 6.1%;
Mandatum Life 3.6%;
All share prices at 19/05/14.
Profile: YIT is one of the largest residential constructors in Europe. In Finland, YIT is the largest residential
developer and in Russia and Eastern Europe it is the largest foreign housing construction company.
Residential construction has good long-term demand prospects in Russia and Eastern Central Europe,
where the rising standard of living allows expanding the small living space per person compared to the West.
Development of mortgage markets also offers growth potential in Russia. Finnish housing demand is driven
by rising urbanisation rate, which is seemingly below the other Nordic countries.
SWOT Analysis
Strengths
• Strong market position
Weaknesses
• Cyclicality of the residential development business
• Good track record of above-industry growth and
profitability
• Capital intensity of the development business
• Unpredictability of the Russian economy
Opportunities
Threats
• Rising interest rates especially in Finland
• Economic growth and political stability in Russia
• Sharp increase in Finnish unemployment
• Increasing ROI to the over 20% target in International
Construction Services
• Turbulence in the Russian economy and politics
Recommendation: In Finland, YIT is presently adjusting its production portfolio to demand which seems to
have stabilised on a lower level. In fact, the outlook for Finnish household income growth appears poor. In
the Finnish business, we expect that cash will start to flow in H2, which also gives some comfort to the
share. Russia has performed well for now, as devaluation of the rouble has induced a flight from cash to real
estate. However, household income there is pressured due to rising inflation and mortgage rates face
upward pressure after central bank rate hikes. We therefore expect H2 to be challenging in Russia and the
company is forced to cut back start-ups, which will have negative implications for future growth.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
Target Price: EUR 7.50
titre
20
04/06/14 Analyst Meeting
18
YIT SMALL & MID CAPS SELECTION
Analyst(s)
16
14
12
10
Matias Rautionmaa
8
6
Mar 11
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
+358 10 252 4408
Pohjola
[email protected]
Jun 14
Source : Factset
205
Spain
SMALL & MID CAPS SELECTION
EUR 2.59
Accumulate
ZELTIA
ZEL.MC/ZEL SM
Market capitalisation: EUR 576m
Biotechnology
EUR
Sales (m)
EBITDA (m)
EBITDA margin
EBIT (m)
EBIT margin
Net profit (reported) (m)
Net profit (adj.) (m)
Cash Flow from Ops.bef. chg in NWC (m)
Net debt (Cash) (m)
Net Debt/Equity
Net Debt/EBITDA
Interest cover (EBITDA/Fin. interest)
ROCE (adj.)
ROCE (adj.)/WACC
EV / CE
EV / Sales
EV / EBITDA
EV / EBIT
P/E (adj.)
P/BV
OpFCF yield
Dividend yield
EPS (adj.)
EPS (adj.) growth
BVPS
DPS
Abs. Performances(12m,6m,3m,1m):
12 month High/low: EUR2.99 / 1.51
12/12
138
20.4
14.8%
14.6
10.5%
6.6
3.7
20.3
79.2
2.0
3.9
4.0
11.1%
0.8
3.8
2.5
16.9
23.7
nm
6.3
8.6%
0.0%
0.02
-30.7%
0.19
0.00
64.4%
12/13
12/14e
12/15e
142
155
163
23.8
25.9
41.9
16.8%
16.7%
25.7%
19.0
20.4
36.0
13.4%
13.2%
22.1%
11.3
13.6
29.0
11.1
13.6
29.0
17.5
19.3
34.5
60.0
57.2
35.0
1.2
0.9
0.4
2.5
2.2
0.8
4.6
5.7
10.6
15.0%
14.4%
23.8%
1.1
1.1
1.8
6.4
6.3
5.7
4.0
4.1
3.7
23.9
24.3
14.5
30.0
30.9
16.9
46.1
42.4
19.8
9.4
8.4
5.9
4.9%
2.2%
5.6%
0.0%
0.0%
0.0%
0.05
0.06
0.13
199.1%
21.9%
113.6%
0.25
0.31
0.44
0.00
0.00
0.00
11.2%
-3.7%
3.6%
Avg. Daily nb traded shares:242,405
Main shareholders: Free float 72.0% (50.0%); Fernandez Sousa (family) 21.2%; Rosp Corunna 5.0%;
Profile: Zeltia focuses on two different activities. One activity is the group’s biotech unit: a) Pharma Mar,
specialised in marine derived anti-cancer drugs, b) Genomica (molecular diagnostics) and c) Sylentis (in
Glaucoma). The other activity is chemicals: integrated by Zelnova (insecticides, air fresheners) and Xylazel
(wood and metal protection) which produce the recurrent income, whose cash flow is almost completely
invested in its biotec R&D. PharmaMar, the group’s key growth driver, currently commercialises Yondelis in
Europe for the treatment of Advanced Soft Tissue Sarcoma and ovarian cancer. The company is running a P
III trial with Yondelis in 1st Line STS. Besides, Janssen (J&J) is currently financing two P-III trials with
Yondelis in the US: in STS and ovarian cancer, the first indication could open a window for Yondelis in the
US market during 2015. Zeltia also counts with an important molecule in its pipeline, PM01183
(Lurbinectedin), orphan drug in platinum resistant/refractory ovarian cancer due to the promising
PhII results in this indication will be presented during ASCO and ERS Congress this year.
SWOT Analysis
Strengths
• Quality and uniqueness of its pipeline and marine
compound library.
• Low toxicity of products & long patent protection
Weaknesses
• Short experience commercialising compounds
• Committed management
• Current dependence in doxorrubicine for the
commercialisation of Yondelis in Ovarian cancer
• Weak financial situation (but improving)
Opportunities
• Out licensing of PM01183
Threats
• Not approval of other compounds in the mid term
• Sylentis’s pipeline
• Adverse clinical trial results
• Leverage on R&D (PM01183, Aplidin, Sylentis)
• Need of higher investments vs. initially planned
• Leveraging the commercial taskforce
• Competition of new products
All share prices at 19/05/14.
FINANCIAL CALENDAR (Source: Precise)
PRICE (SHORT & LONG AVERAGE)
titre
3.0
2.8
2.6
2.4
Recommendation: We are currently reviewing our estimates and valuation with a positive stance. The
potential out-license of PM01183 would imply the collection of an upfront payment of ca.EUR 50m). We
keep the positive recommendation on the stock ahead of the intensive newsflow. Among short term drivers
we highlight: 1) end Ph II results with PM01183 in platinum resistant/refractory ovarian cancer, relevant
positive results should accelerate an out-license agreement 2) Yondelis’ potential approval in STS in the
US market mid 2015. We rate the company buy, with TP EUR 3.3/sh.
Target Price: EUR 3.30
2.2
2.0
1.8
1.6
1.4
Analyst(s)
1.2
1.0
Mar 11
Source : Factset
206
Jun 11
Sep 11
Dec 11
Mar 12
Jun 12
Sep 12
Dec 12
Mar 13
Jun 13
Sep 13
Dec 13
Mar 14
Jun 14
Ana Isabel González García CIIA
BEKA Finance
+34 91 436 78 09
[email protected]
Small & Mid Caps Selection
Price and country index charts
Net profit Adj. (m)
Current price: used to calculate ratio on current years plus estimated years. Simple yearly average of
closing prices (weighted average price): used to calculate ratio on past years. Moving averages are
used by numerous chartists and technical analysts as indicators of long- and medium-term trends.
They define what are considered to be support (downside) and resistance (upside) levels.
As it is not possible to standardise this calculation due to a level of subjectivity it deserves, this item is
an analyst input. The adjustments made by the ESN analysts are related mainly to exclude Non
Recurrent Items and Discontinued Operations (in the past the adjustments were related to
extraordinary items and goodwill amortisation).
Definitions and common abbreviations
Cash flow Adj. (m)

The company codes are from Reuters and Bloomberg.

Highs/lows are based on closing prices.

nm = not meaningful.
Data items
Sales (m)
Published consolidated net sales, excluding other revenues
EBITDA (m)
EBITDA = Earnings Before Interest, Tax, Depreciation, Amortisation & Provisions. EBITDA is defined
as operating result after operating exceptional items (e.g. restructuring costs, start-up costs, etc.),
before Depreciation, Amortisation & Provisions, before Other Operating & Non Operating Expenses
(Income), before Interest (also on pension provision for Germany), Associates, Non Recurrent Items
& Tax.
EBIT Reported (m)
EBIT = Earnings Before Interest and Tax. EBIT is defined as operating result after Depreciation,
Amortisation & Provisions, after Other Operating & Non Operating Expenses (Income), before Interest
(also on pension provision for Germany), Associates, Non Recurrent Items & Tax.
Net profit reported (m)
Net Profit (Reported) = reported earnings after Non Recurrent Items, after Tax, after Minorities.
Net Operating Cash Flow Adj. = Net Profit (adj.) + Minorities + Depreciation, Amortisation &
Provisions + other non cash items. This item is Net Operating Cash Flow before Capital Expenditure
and before change in NWC.
Per share items
Current and historic per share items are based on average outstanding ordinary shares. Estimated
data are based on averagae diluted ordinary shares. Dilution (due to stock options, warrants,
convertible bonds) as defined by the analyst, is always considered when expiration is within the year
and in the money at the current price.
EPS (Adj.)
Earnings per share calculated as Net profit Adj. divided by the weighted average of the outstanding
ordinary shares.
Gross dividend per share (DPS)
Dividend per Share Gross (before tax) calculated as total dividend divided by outstanding Ordinary
shares.
Book value per share (BVPS)
Book value per share calculated as Shareholders’ Equity divided by outstanding number ordinary
shares.
Valuation Items
P/E Adj. (x)
Price/Earnings ratio: for historic years calculated as the fiscal year end date closing share price
divided by EPS Adj. For current and future years calculated as the current share price divided by EPS
Adj.
207
Small & Mid Caps Selection
CAGR (Compound average growth rate) (%)
Market value (MV) of Preferred Shares (m)
Estimated % change in the normative growth rate of an item (i.e. EPS used to calculate PEG ratio). 4
years: last year + current + 2 estimate years (CAGR calculated on 4 years; 3 periods).
For historic years calculated as the fiscal year average estimated MV of any preferred shares. For
current and future years calculated as the current estimated MV of any preferred shares.
Dividend yield (%)
For historic years calculated as gross DPS divided by the fiscal year end date closing price. For
current and future years calculated as gross DPS divided by the current share price.
Price / BV (x)
For historic years calculated as the fiscal year end date closing share price divided by BVPS.
For current and future years calculated as the current share price divided by BVPS.
Capital Employed (m)
Capital Employed (or Capital Invested) =Net Fixed Tangible Assets + Net Fixed Intangible Assets
(excluding Goodwill) + Goodwill + Net Financial Assets + Net Working Capital.
ROCE Adj. (%)
EBIT (adj.)*(1-normative tax rate)/ (Capital Employed.- Net Financial Assets)
WACC
Weighted average cost of capital.
Total Market Cap. or Market Cap (adj.) (m)
Mkt. cap. (m) + MV Pref. (m).
EV Adj. (m)
EV = Market cap. Adj. + net debt + off balance sheet items + Provisions (retirement and others
related to future cash outs) + Minorities Equity (estimated market value) - Peripheral Assets (market
value).
EV Adj. / Sales
EV Adj. (m) divided by Sales (m).
EV Adj. / EBITDA
EV Adj. (m) divided by EBITDA (m). This figure can be seen as an ‘operating P/E’.
EV Adj. / Capital Employed
EV Adj. (m) divided by Gross capital employed (m).
Enterprise Value
Ratios
Market Capitalisation (Market Cap) (m)
EPS Growth (%)
For historic years calculated as the market capitalisation in millions as the fiscal year end date closing
share price of the ordinary shares times the average amount of outstanding ordinary shares. For
current and future years calculated as the market capitalisation in millions as the current share price
of the ordinary shares times the current total amount of outstanding ordinary shares.
208
Growth in EPS (adj.) on an annual basis.
Gearing (%)
Net debt (m) divided by total equity (m). When negative this ratio shows cash.
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, Accumulate (or Add), Hold, Reduce and Sell (in short: B, A, H, R,
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 20% during the next 12 months time
horizon
Accumulate: the stock is expected to generate total return of 10% to 20% during the next 12
months time horizon
Hold: the stock is expected to generate total return of 0% to 10% during the next 12 months
time horizon.
Reduce: the stock is expected to generate total return of 0% to -10% during the next 12 months
time horizon
Sell: the stock is expected to generate total return under -10% during the next 12 months time
horizon
Rating Suspended: the rating is suspended due to 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 or to a change of analyst covering the stock
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
ESN Ratings Breakdown
Reduce Sell
1%
5%
Buy
42%
Hold
29%
Accumulate
23%
History of ESN Recommendation System
Since 18 October 2004, the Members of ESN are using an Absolute Recommendation
System (before was a
Relative Rec. System) to rate any single stock under coverage.
Since 4 August 2008, the ESN Rec. System has been amended as follow.
 Time horizon changed to 12 months (it was 6 months)
 Recommendations Total Return Range changed as below:
TODAY
SELL
REDUCE
-10%
HOLD
0%
ACCUMULATE
10%
BUY
20%
BEFORE
SELL
-15%
REDUCE
HOLD
0%
ACCUMULATE
5%
BUY
15%
209
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Fax: +358 10 252 2703
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