-2.15 1.96 16,796 20,868 Other Market Indicators -1.05 -1 ... dn 07set2015.pdf · - Improved risk...
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![Page 1: -2.15 1.96 16,796 20,868 Other Market Indicators -1.05 -1 ... dn 07set2015.pdf · - Improved risk profile: To cut the cost of credit risk to 90bps in 2017 and 41bps in 2019, the bank](https://reader036.fdocuments.in/reader036/viewer/2022090519/6045cc0842edb20ef3717044/html5/thumbnails/1.jpg)
Italian Morning Sight
07 September 2015
Equity Research +39 02 4344 - 4389 Institutional Sales - 5101 Relative Value - 4788 Equity Derivatives - 5451
All ESN research is available
on Bloomberg: “ESNR” <go>
Investment Research
Technical Analysis
DJ STOXX: Daily relative performance by sector
Stock Exchanges
4 Sep 15 Last %Chg %YtD Min YtD Max YtD
FTSE Italy All-Share 23,072 -2.97 14.57 19,270 25,684
FTSE MIB 21,473 -3.18 12.94 18,123 24,031
FTSE Italy Star 23,771 -1.06 27.39 18,482 26,520
Comit 1,200.4 -1.56 15.62 1,002.9 1,323.7
Stoxx 600 353.11 -2.52 3.09 331.62 414.06
EuroStoxx 50 3,180.2 -2.75 1.08 3,007.9 3,828.8
Dow Jones Industrials 16,102 -1.66 -9.65 15,666 18,312
Nasdaq Comp 4,684 -1.05 -1.10 4,506 5,219
Nikkei 225 17,792 -2.15 1.96 16,796 20,868
Other Market Indicators
4 Sep 15 Last %Chg %YtD Min YtD Max YtD
EUR/USD 1.1116 0.17 -8.14 1.0522 1.2031
USD/YEN 119.19 -0.91 -0.59 116.87 125.65
London Brent Crude Oil Index U$/BBL 50.37 2.54 -12.14 42.81 67.95
10 Yrs Bund Futures 154.89 0.58 -0.63 148.98 160.36
Source: Datastream
Recommendation and target price changes
Banca Carige: TP EUR 2.20 from EUR 2.30
Trevi: TP EUR 1.50 from 1.90
News
Banca Carige (Buy) A restructuring story with M&A appeal Enel (Accumulate) Going-on Fiat Chrysler Automobiles (Buy) FCA likely to wait until 2016 before moving on GM Telecom Italia (Accumulate) New rumours on savings' conversion Trevi (Neutral) Feedback from H1 presentation: challenging guidance UniCredit (Neutral) Interview with Mr Ghizzoni in La Repubblica
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Italian Morning Sight 07 September 2015
Banca
Akros 2
Banca Carige
Italy/Banks
BANKS
Banca Carige (Buy) A restructuring story with M&A appeal
A restructuring story with M&A appeal
The facts: We are publishing this morning a company update on Banca Carige.
Our analysis: - Better operating profits: The main income driver will remain NII:
the main income source is targeted to grow by EUR 255m in 5Y, with a 11.8%
CAGR, mainly thanks to a very strong reduction in funding costs. The net
commissions are expected to increase by EUR 148m in 5Y, with a 9.3% CAGR,
thanks to a higher weight of AUM on indirect funding (from 48.7% to 56.6%) and
the relaunch of lending growth. We consider these revenue targets as quite
ambitious, as we think increasing the weight of AUM requires significant
investments in staff training for customer advice.
- Improved risk profile: To cut the cost of credit risk to 90bps in 2017 and
41bps in 2019, the bank plans to reduce the share of bad loans stock via
disposal of EUR 1-1.5bn with non-recourse, with a gross capital loss
estimated in EUR 150-200m (or 30bps of CET1) to be finalized in 2016. The
bank will also maximize recovery rates through a partnership agreement with
a servicer for positions not exceeding EUR 5m, for a portfolio of EUR 2-2.7bn
and estimated commissions of 4-6bps in terms of cost of risk.
- H1 15 results: The most outstanding achievement of the de-risking process
realized by the mgmt. over the last year was a fall in loan impairments in Q2,
decreasing 30% Q/Q and 46% Y/Y to EUR 54m. In H1 15 the bank signed
workout agreements for EUR 813m worth of unlikely-to-pay loans, planned to
reach over EUR 1.6bn by end-Sep. Once restructured, these loans will be
classified in the forborne category and may return to performing loans after
1Y. These would allow to halve the unlikely-to-pay loans, currently at EUR
3.3bn gross.
- M&A appeal: Apart from the restructuring story on a standalone basis, we
think Banca Carige is likely to be involved in the expected consolidation of the
Italian banking sector, possibly in two different ways. We think Banca Carige
could be easily integrated in a larger group as its branch network remains
highly concentrated in the historical region of Liguria. In a top-down approach,
we estimate on avg. 17% of Banca Carige’s cost base can be cut in 3Y by a
potential partner, with a value creation of EUR 0.35 per Carige share.
- Alternatively, the subsidiaries Carige Italia and BML make up approx. 53%
of group revenues and 33% of customer loans. While their relative size for the
group is high, in our view their local market shares are too limited to give
them a competitive advantage and it could make sense for the parent
company to sell them. Their disposal at a price in line with the carrying values
(over EUR 0.8bn) would add up to 550bps to the group’s capital ratios,
freeing up approx. EUR 1.1bn capital (or EUR 1.3 per share) and offering the
mgmt. the means to distribute an extraordinary dividend and invest into the
transformation of the remaining Banca Carige from a traditional retail bank
into a wealth manager.
Conclusion & Action: The business plan targets a ROTE of 8% in 2019: Banca
Carige will not match its estimated COE in the next 5Y and will destroy value in
the meantime. Therefore, our standalone target price is EUR 2.2 per share, or
0.7x P/TBV. However, we think an aggregation by a larger group could add EUR
0.35 per share of additional cost synergies, while the disposal of the branch
network outside Liguria could free up capital for as much as EUR 1.3 per share.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Buy
1.63
closing price as of 04/09/2015
2.20
2.30from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CRGI.MI/CRG IM
Market capitalisation (EURm) 1,356
Current N° of shares (m) 830
Free float 74%
Daily avg. no. trad. sh. 12 mth 6,388,856
Daily avg. trad. vol. 12 mth (m) 10,587
Price high 12 mth (EUR) 3.65
Price low 12 mth (EUR) 1.50
Abs. perf. 1 mth -3.03%
Abs. perf. 3 mth -13.05%
Abs. perf. 12 mth -55.28%
Key financials (EUR) 12/14 12/15e 12/16e
Total Revenue (m) 822 709 749
Pre-Provision Profit (PPP) (m) 106 61 125
Operating profit (OP) -539 -201 -99
Earnings Before Tax (m) -579 -176 -269
Net Profit (adj.) (m) -254 -106 -63
Shareholders Equity (m) 1,766 2,596 2,421
Tangible BV (m) 1,709 2,539 2,364
RWA (m) 20,500 18,980 19,504
ROTE -15.9% -5.0% -2.6%
Total Capital Ratio (B3) 12.4% 17.7% 16.4%
Cost/Income 86.4% 90.7% 82.6%
NPL ratio (gross) 11.7% 11.8% 11.1%
P/PPP 155.4 22.3 10.8
P/E (adj.) nm nm nm
P/BV 9.4 0.5 0.6
P/TBV 9.7 0.5 0.6
Dividend Yield 0.0% 0.0% 0.0%
PPPPS 0.01 0.07 0.15
EPS (adj.) -0.02 -0.13 -0.08
BVPS 0.17 3.13 2.92
TBVPS 0.17 3.06 2.85
DPS 0.00 0.00 0.00
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
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BANCA CARIGE FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Malacalza 17%; local Foundations 6%;
Volpi 6%; BPCE 1.90%;
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Italian Morning Sight 07 September 2015
Banca
Akros 3
Enel
Italy/Utilities
UTILITIES
Enel (Accumulate) A restructuring story with M&A appeal
Going-on
The facts: “Milano Finanza” published an interview with Mr. Starace, Enel’s CEO.
Our analysis: in our view, the main issues of the interview are:
2016 dividend, already announced in terms of floor (EUR 0.18 per share –
yield around 4.6%) may be conservative and thus investors ought to look
for a positive surprise;
Mr. Starace confirmed Enel’s growth path in the renewable and in the
network sectors. Most of the planned growth in the coming years, in fact,
will come from these two units;
the exclusive talks with EPH for Slovenske Electrarne disposal are
proceeding and the sale ought to materialise in two steps. The first stake
due to be sold is expected in the coming months (by the end of 2015),
the second step once the nuclear unit constructions ends;
Enel is facing the technical issues of the “national broadband project” with
Telecom Italia. Enel confirmed its interest in the project by opening its
network infrastructures and bundling fibre with new devices in the
planned substitution of 33m new generation-domestic-digital meters.
News on this matter is expected soon.
Conclusion & Action: Mr. Starace is continuing to deliver on the announced
targets and the change to increase 2016 dividends is confirming the quality of the
results posted. We continue to appreciate Enel’s strategic moves both in Italy and
abroad and we reiterate our positive stance on the stock: accumulate.
Analyst(s):
Dario Michi, Banca Akros
+39 02 4344 4237
Accumulate
3.91
closing price as of 04/09/2015
4.75
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg ENEI.MI/ENEL IM
Market capitalisation (EURm) 36,767
Current N° of shares (m) 9,403
Free float 72%
Daily avg. no. trad. sh. 12 mth 51,781,350
Daily avg. trad. vol. 12 mth (m) 203,234
Price high 12 mth (EUR) 4.46
Price low 12 mth (EUR) 3.44
Abs. perf. 1 mth -9.20%
Abs. perf. 3 mth -8.35%
Abs. perf. 12 mth -8.00%
Key financials (EUR) 12/14 12/15e 12/16e
Sales (m) 75,791 74,528 73,865
EBITDA (m) 15,757 14,943 15,018
EBITDA margin 20.8% 20.1% 20.3%
EBIT (m) 3,087 9,000 9,093
EBIT margin 4.1% 12.1% 12.3%
Net Profit (adj.)(m) 517 2,997 3,019
ROCE 2.9% 5.8% 5.8%
Net debt/(cash) (m) 37,383 39,593 38,588
Net Debt/Equity 0.7 0.7 0.7
Debt/EBITDA 2.4 2.6 2.6
Int. cover(EBITDA/Fin. int) 5.0 5.4 5.8
EV/Sales 0.9 1.0 1.0
EV/EBITDA 4.5 4.9 4.7
EV/EBITDA (adj.) 4.5 4.9 4.7
EV/EBIT 23.1 8.1 7.8
P/E (adj.) nm 12.3 12.2
P/BV 1.1 1.1 1.0
OpFCF yield 9.6% -0.2% 6.5%
Dividend yield 3.6% 4.1% 4.6%
EPS (adj.) 0.05 0.32 0.32
BVPS 3.35 3.53 3.85
DPS 0.14 0.16 0.18
3.4
3.6
3.8
4.0
4.2
4.4
4.6
Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
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ENEL Stoxx Utilities (Rebased)Source: Factset
Shareholders: Italian governement - Ministry of
Economy and Finance 26%; People's
Bank of China 2%;
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Italian Morning Sight 07 September 2015
Banca
Akros 4
Fiat Chrysler Automobiles
Italy/Automobiles & Parts
AUTOMOBILES & PARTS
Fiat Chrysler Automobiles (Buy) Going-on
FCA likely to wait until 2016 before moving on GM
The facts: According to Bloomberg, FCA is likely to wait until next year before
making a bid for GM as the spin-off of Ferrari - due in early 2016 - could be the
catalyst for FCA to make an offer for the U.S. automaker.
According to the article, the Ferrari separation is a cornerstone in the process to
combines FCA with GM because a) it would grant money to afford an offer and b)
because the Agnelli family is keen to keep control of the Italian supercar maker.
Our analysis: We have always thought that FCA intended to merge its operations
with GM after the spin-off of Ferrari as the management started to tackle the
subject of industry consolidation only after having engineered the separation of the
sports car maker.
The IPO of Ferrari – due after 12 October 2015 – is going to grant FCA a EUR
1bn cash-in in the best case; we argue that FCA may afford a very limited stake in
GM: the US carmaker's market cap is ~EUR 42bn, while FCA's current market cap
is EUR 18.5bn; Ferrari potentially weighs for EUR 9bn on that market cap.
If we assume that the Ferrari equity value is EUR 10bn and that FCA is going to
cash in EUR 1bn from the IPO and give the remaining shares to its own
shareholders for free, the current FCA-ex-Ferrari market cap is ~EUR 10.5bn or
~25% of the GM market cap: it is clear that any attempt of FCA to merge with GM
should lever on the support of activist funds.
Conclusion & Action: We do not expect the news to have any impact on FCA
share price today.
Analyst(s):
Gabriele Gambarova, Banca Akros
+39 02 43 444 289
Buy
12.20
closing price as of 04/09/2015
18.65
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg FCHA.MI/FCA IM
Market capitalisation (EURm) 18,390
Current N° of shares (m) 1,507
Free float 59%
Daily avg. no. trad. sh. 12 mth 11,596,620
Daily avg. trad. vol. 12 mth (m) 141,877
Price high 12 mth (EUR) 15.80
Price low 12 mth (EUR) 6.88
Abs. perf. 1 mth -17.79%
Abs. perf. 3 mth -15.34%
Abs. perf. 12 mth 58.75%
Key financials (EUR) 12/14 12/15e 12/16e
Sales (m) 96,090 113,306 121,772
EBITDA (m) 8,120 6,342 7,236
EBITDA margin 8.5% 5.6% 5.9%
EBIT (m) 3,223 4,817 5,579
EBIT margin 3.4% 4.3% 4.6%
Net Profit (adj.)(m) 846 1,576 2,194
ROCE 5.6% 7.0% 7.7%
Net debt/(cash) (m) 7,654 7,905 7,947
Net Debt/Equity 0.6 0.5 0.5
Debt/EBITDA 0.9 1.2 1.1
Int. cover(EBITDA/Fin. int) 4.0 2.8 3.6
EV/Sales 0.3 0.3 0.3
EV/EBITDA 3.3 4.8 4.3
EV/EBITDA (adj.) 3.1 4.8 4.3
EV/EBIT 8.2 6.4 5.5
P/E (adj.) 17.1 11.7 8.4
P/BV 1.1 1.2 1.1
OpFCF yield -3.8% -1.5% -0.3%
Dividend yield 0.0% 0.0% 0.0%
EPS (adj.) 0.56 1.05 1.46
BVPS 8.91 9.95 11.41
DPS 0.00 0.00 0.00
6
7
8
9
10
11
12
13
14
15
16
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FIAT CHRYSLER AUTOMOBILES Stoxx Automobiles & Parts (Rebased)Source: Factset
Shareholders: EXOR 29%; Baillie Gifford & Co 10%;
Bank of China 1.87%;
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Italian Morning Sight 07 September 2015
Banca
Akros 5
Telecom Italia
Italy/Telecommunications
TELECOMMUNICATIONS
Telecom Italia (Accumulate) FCA likely to wait until 2016 before moving on GM
New rumours on savings' conversion
The facts: new rumours of a potential offer on behalf of TI to exchange the
conversion shares appeared last Friday. The company dismissed the rumour in a
press release. Unrelated, new statements from TI and Vivendi management
supporting a long-term industrial partnership.
Our analysis: TI management admitted again in the Q2 results conference call
that the current capital structure was not optimal given the presence of 6bn
savings shares, and conceded in H2 the issue would be addressed by the board.
New rumours emerged on Friday that a proposal of conversion would be have
been discussed by TI's control and risk committees in early August; the article
suggested a 1:1 exchange ratio along with a cash payment worth half of the
current difference in value of just below EUR 20c. In this case, TI would cash-in
around EUR 0.5bn, as a side effect, Vivendi's stake would be diluted from 14.9%
to c 10.3%. TI confirmed that the deal has "been analysed internally", but added
that "at the present time, no formal executive plan exists".
On the TI/Vivendi relationships, the top managers of both companies commented
on their relationships amid the Cernobbio business meeting; Vivendi reiterated its
long term view on the investment and praised TI's strategy and the synergy
potential in content distribution. At the same time, Vivendi denied interest for
Mediaset and the intention to increase the stake in Telefonica from the current
1%. A potential further increase in TI's stake was not ruled out, though.
Conclusion & Action: the conversion of TI savings shares is expected to take
place sooner rather than later. TI's statement just says it has not been approved
for the time being. We believe it is still time to play the spread. On TI/VIV, we do
not see further short-term newsflow.
Analyst(s):
Andrea Devita, CFA, Banca Akros
+39 02 4344 4031
Accumulate
1.09
closing price as of 04/09/2015
1.30
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TLIT.MI/TIT IM
Market capitalisation (EURm) 20,191
Current N° of shares (m) 19,443
Free float 75%
Daily avg. no. trad. sh. 12 mth 136,597,200
Daily avg. trad. vol. 12 mth (m) 150,748
Price high 12 mth (EUR) 1.26
Price low 12 mth (EUR) 0.77
Abs. perf. 1 mth -11.59%
Abs. perf. 3 mth -7.46%
Abs. perf. 12 mth 24.26%
Key financials (EUR) 12/14 12/15e 12/16e
Sales (m) 21,573 20,340 20,143
EBITDA (m) 8,786 8,108 8,363
EBITDA margin 40.7% 39.9% 41.5%
EBIT (m) 4,530 3,858 4,133
EBIT margin 21.0% 19.0% 20.5%
Net Profit (adj.)(m) 1,350 844 1,474
ROCE 6.2% 5.8% 5.7%
Net debt/(cash) (m) 28,021 27,012 26,437
Net Debt/Equity 1.3 1.2 1.1
Debt/EBITDA 3.2 3.3 3.2
Int. cover(EBITDA/Fin. int) 4.0 3.6 4.9
EV/Sales 2.2 2.5 2.5
EV/EBITDA 5.4 6.2 5.9
EV/EBITDA (adj.) 5.4 5.9 5.9
EV/EBIT 10.4 13.0 12.0
P/E (adj.) 12.7 25.1 14.4
P/BV 0.9 1.1 1.1
OpFCF yield 8.7% 1.6% 2.6%
Dividend yield 0.0% 1.8% 1.8%
EPS (adj.) 0.07 0.04 0.08
BVPS 0.93 0.97 1.02
DPS 0.00 0.02 0.02
0.75
0.80
0.85
0.90
0.95
1.00
1.05
1.10
1.15
1.20
1.25
1.30
Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
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TELECOM ITALIA Stoxx Telecommunications (Rebased)Source: Factset
Shareholders: Vivendi 15%; Blackrock 6%; brandes 2%;
Findim 2.00%;
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Italian Morning Sight 07 September 2015
Banca
Akros 6
Trevi
Italy/Materials, Construction & Infrastructure
MATERIALS, CONSTRUCTION & INFRASTRUCTURE
Trevi (Neutral) New rumours on savings' conversion
Feedback from H1 presentation: challenging guidance
FY 15 guidance confirmed: during the H1 presentation the management
confirmed the FY 15 guidance given in July:
- FY 15 EBIT at EUR -30 / -40m;
- FY NFP at EUR 450m (+/- 15m).
In light of the negative H1 results (H1 EBIT -104.5m), FY 15 EBIT guidance of
EUR -30/-40m is very challenging; however, the management is confident to meet
the guidance thanks to both the good visibility of the order book (5-6 months for
Trevi, > 2 months for Soilmec and 6 months for Drillmec) and several contracts
that should be signed shortly.
Our analysis: we consider these targets very challenging, so we set FY 15
estimates more prudent compared to the management indications: FY 15e EBIT
moved from EUR -37m to EUR -47m.
Conclusion & Action: we confirm our Neutral recommendation and, based on
the revised estimates, our Target Price decreases from EUR 1.90 to EUR 1.50 per
share (DCF model – WACC from 7.6% to 7.9% and 1.5% perpetual growth rate)
while we wait to verify the orders delivery, the obtaining of new contracts and the
NFP trend in the coming months.
Analyst(s):
Paola Saglietti, Banca Akros
+39 02 4344 4287
Neutral
1.19
closing price as of 04/09/2015
1.50
1.90from Target Price: EUR
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg TFI.MI/TFI IM
Market capitalisation (EURm) 196
Current N° of shares (m) 165
Free float 50%
Daily avg. no. trad. sh. 12 mth 1,232,804
Daily avg. trad. vol. 12 mth (m) 1,479
Price high 12 mth (EUR) 4.05
Price low 12 mth (EUR) 1.19
Abs. perf. 1 mth -20.72%
Abs. perf. 3 mth -45.66%
Abs. perf. 12 mth -69.06%
Key financials (EUR) 12/14 12/15e 12/16e
Sales (m) 1,251 1,280 1,325
EBITDA (m) 126 40 140
EBITDA margin 10.1% 3.1% 10.5%
EBIT (m) 63 (47) 61
EBIT margin 5.0% nm 4.6%
Net Profit (adj.)(m) 24 (63) 13
ROCE 4.2% -3.4% 4.2%
Net debt/(cash) (m) 378 472 440
Net Debt/Equity 0.6 0.9 0.8
Debt/EBITDA 3.0 11.9 3.2
Int. cover(EBITDA/Fin. int) 3.7 1.1 3.7
EV/Sales 0.8 0.6 0.6
EV/EBITDA 7.8 20.5 5.7
EV/EBITDA (adj.) 7.8 20.5 5.7
EV/EBIT 15.7 nm 13.3
P/E (adj.) 13.7 nm 15.6
P/BV 0.7 0.4 0.4
OpFCF yield -17.3% 12.2% -2.9%
Dividend yield 10.9% 10.9% 10.9%
EPS (adj.) 0.21 (0.38) 0.08
BVPS 3.94 2.92 3.27
DPS 0.13 0.13 0.13
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
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TREVI FTSE Italy All Share (Rebased)Source: Factset
Shareholders: Trevi family 33%; FSI 17%;
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Italian Morning Sight 07 September 2015
Banca
Akros 7
UniCredit
Italy/Banks
BANKS
UniCredit (Neutral) Feedback from H1 presentation: challenging guidance
Interview with Mr Ghizzoni in La Repubblica
The facts: Italian daily La Repubblica publishes this morning an interview with Mr
Ghizzoni, UniCredit’s CEO.
Our analysis: In the interview, Mr Ghizzoni flags the main guidelines for the
upcoming revision of the business plan.
He considers 3-5Y business plans must be regularly updated due to the rapid
change of the environment, like the booming asset mgmt. industry or the
European Banking Union, both unexpected 3Y ago.
The update of the business plan will be concentrated on the relaunch of organic
growth in specific activities, like the asset mgmt., private banking, investment
banking and specific segments of CIB, like export and FDI financing or investment
banking solutions for mid-corporate clients.
Mr Ghizzoni highlights the group started successfully a new approach in France,
where initially the bank was serving the Italian firms investing there, but is now
doing business with French multinationals investing in CEE, where UniCredit can
leverage on its regional leadership. The same approach will now be launched in
Spain, UK and USA.
In terms of capital, he thinks the uncertainty has been generated by the lack of a
clear and stable regulatory target, due to the introduction of the yearly SREP
revision. However, Mr Ghizzoni stresses the bank is already ahead of the
business plan target (10% CET1 ratio by end-2016) and generates capital on an
organic basis (15-20bps per quarter). Going on, the bank will try to optimize the
capital allocation on the businesses offering the best returns, while scaling back
those without proper value creation.
Conclusion & Action: The upcoming revision of the business plan will not be
based just on cost cuts and staff reduction, but also on the relaunch of organic
growth and better capital allocation. We stick to Neutral with EUR 6.6 target price.
Analyst(s):
Luigi Tramontana, Banca Akros
+39 02 4344 4239
Neutral
5.60
closing price as of 04/09/2015
6.60
Target Price unchanged
Recommendation unchanged
Target price: EUR
Share price: EUR
Reuters/Bloomberg CRDI.MI/UCG IM
Market capitalisation (EURm) 33,387
Current N° of shares (m) 5,967
Free float 66%
Daily avg. no. trad. sh. 12 mth 97,360,650
Daily avg. trad. vol. 12 mth (m) 550,368
Price high 12 mth (EUR) 6.55
Price low 12 mth (EUR) 4.91
Abs. perf. 1 mth -6.44%
Abs. perf. 3 mth -13.92%
Abs. perf. 12 mth -12.51%
Key financials (EUR) 12/14 12/15e 12/16e
Total Revenue (m) 22,513 23,024 24,162
Pre-Provision Profit (PPP) (m) 8,316 8,696 9,678
Operating profit (OP) 4,024 4,772 6,126
Earnings Before Tax (m) 4,091 4,772 5,476
Net Profit (adj.) (m) 1,963 2,420 3,562
Shareholders Equity (m) 49,390 50,915 52,540
Tangible BV (m) 45,828 47,353 48,979
RWA (m) 409,223 409,992 399,747
ROTE 4.4% 5.2% 7.4%
Total Capital Ratio (B3) 13.6% 14.1% 14.1%
Cost/Income 61.5% 58.7% 56.6%
NPL ratio (gross) 8.7% 8.7% 8.7%
P/PPP 3.7 3.8 3.5
P/E (adj.) 15.7 13.8 9.4
P/BV 0.7 0.7 0.7
P/TBV 0.7 0.7 0.7
Dividend Yield 2.1% 2.7% 3.6%
PPPPS 1.44 1.46 1.62
EPS (adj.) 0.34 0.41 0.60
BVPS 7.91 7.93 8.20
TBVPS 7.91 7.93 8.20
DPS 0.12 0.15 0.20
4.5
5.0
5.5
6.0
6.5
7.0
7.5
Aug 14 Sep 14 Oct 14 Nov 14 Dec 14 Jan 15 Feb 15 Mar 15 Apr 15 May 15 Jun 15 Jul 15 Aug 15 Sep 15
vvdsvdvsdy
UNICREDIT Stoxx Banks (Rebased)Source: Factset
Shareholders: Aabar 5%; Fondaz. Cariverona 4%; Del
Vecchio 3%; Central Bank of Libya 3%;
Fondaz. CRT 3%; Carimonte Holding 2%;
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Italian Morning Sight 07 September 2015
Banca
Akros 8
Technical Analysis (daily ratings) 07/09/2015
FINMECCANICA SIFI.MI ASTALDI AST.MI
Close 11.78 Close 9.08
Rating REDUCE Rating REDUCE
Supp. 11.65-11.20-10.80-10.40 Supp. 8.90-8.55-8.10-7.85-7.40
Resist. 12.25-12.70-13.65 Resist. 9.85-10.20-10.85
Stop loss Stop loss
Profit taking Profit taking
VOSSLOH VOSG.DE WENDEL MWDP.PA
Close 62.50 Close 112
Rating REDUCE Rating REDUCE
Supp. 60.95-59.60-58.20-57.00 Supp. 110.80-106.54-103.38
Resist. 65.10-66.00-68.00-70.00 Resist. 115.80-118.40-121.85
Stop loss Stop loss
Profit taking Profit taking
Technical Analysis FTSE MIB (expiration September 2015)
Supports: 21.800-21.650-21.350-21.200-21.000
Resistances: 22.300-22.500-22.650-22.800-23.000
RSI: N-POSITIVE STOCHASTICS: N-POSITIVE MACD: NEGATIVE
Short Term Trend: N-POSITIVE
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Italian Morning Sight 07 September 2015
Banca
Akros 9
DJ STOXX: Daily relative performance by sector
0.60
0.54
0.27
-0.35
-0.01
-0.60
0.12
0.00
0.75
0.82
-0.04
0.35
-1.51
0.96
-0.06
-0.12
-2.53
-0.37
-4% -2% 0% 2%
Media
Telecom
Technology
Financial Services
Insurance
Banks
Utilities
Personal Goods
Food & Beverage
Healthcare
Industrial G&S
Construction & Materials
Oil & Gas
Travel & Leisure
Auto & Parts
Retail
Basic Resources
Chemical
(DJ Stoxx 04/09: 353.11 - chg -2.52%)
Source: Datastream Cyclical Non-Cyclical Financial TMT
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Italian Morning Sight 07 September 2015
Banca
Akros 10
Disclaimer
This research has been prepared by Andrea Devita, Luigi Tramontana, Claudio Giacomiello, Paola Saglietti, Gabriele Gambarova, Dario Michi, Giada Cabrino, Enrico Esposti (all members of AIAF), Francesco Previtera, Francesco Sala, Marcello Renna (ordinary member of SIAT), who are financial analysts with Banca Akros SpA ("Banca Akros"), which is responsible for the preparation of the research.
Banca Akros is a bank authorised to perform also investment services; it is part of the Bipiemme Banca Popolare di Milano Group (the “Group”) and it is duly subject to the management and co-ordination of Banca Popolare di Milano (the “Parent Company”). Banca Akros is registered with the Italian Banking Association code n. 5328 and is subject to the regulation and surveillance of Bank of Italy and Consob (Commissione Nazionale per le Società e la Borsa)." Banca Akros has prepared this research for its professional clients only, pursuant to Directive 2004/39/CE and Annex 3 of Consob Regulation on intermediaries (Resolution n. 16190). This research is being distributed as of 07 September 2015.
In compliance with arts. 69 “quater” and “quinquies” of Consob Regulations for Issuers (“notification to the public regarding interest and conflict of interest”) Banca Akros hereby declared that it has a personal interest in some of the companies examined in this research, specifically:
1) Anima Holding, Fiera Milano, Gabetti Property Solution, Prelios, Premuda, Risanamento, Zucchi: Banca Akros’ parent group holds more than 2% or is a member of shareholders pacts.
2) Cape Live, Prima Industrie: the Bank is acting as corporate advisor in communication to institutional investors.
3) Alerion Clean Power, Best Union, Class Editori, IMMSI, Italcementi, Piaggio, Servizi Italia, Sorin: dual administrator role in related parties.
4) Acotel, Amplifon, Autostrada To-Mi (TAH), Axelero (AIM), Enervit, Exprivia, Falck Renewables, Gas Plus, Notorious Pictures, QF Investietico, QF Mediolanum RE A, QF Mediolanum RE B, Sias (MTA-TAH): for which the Bank is a specialist or liquidity provider.
5) Aeroporto di Bologna, Banca Sistema, Cerved, Fincantieri, Fineco Bank, Inwit, Rai Way, OVS: Banca Akros was the placement bank and guarantor for the pertinent IPO organized in the last twelve months.
6) Aedes, Banca Carige, Banca MPS, Banca Pop. Sondrio, Cattolica Assicurazione, Creval: the Bank was acting as Co-Lead Manager in pertinent consortium for the capital increase organized in the last twelve months.
7) Autostrade per l'Italia, Cassa Depositi e Prestiti the Bank was acting as Co-Lead Manager in pertinent consortium for the bond issue / buyback organized in May/June 2015.
8) Georgia Worldwide (GTech), Mediobanca: the Bank was acting as Co-Lead Manager of the consortium for the placement of the non-negotiable bonds organized in the last twelve months.
9) I Grandi Viaggi the Bank is a specialist or liquidity provider; the Bank was acting as Co-Lead Manager in pertinent consortium for the capital increase organized in June/July 2015.
10) Banzai: the Bank is a specialist or liquidity provider; Banca Akros was the placement bank and guarantor for the pertinent IPO organized in the last twelve months.
11) Vita Società Editoriale: the Bank is a specialist or liquidity provider; the Bank was acting as Co-Lead Manager in pertinent consortium for the capital increase organized in the last twelve months.
12) Prysmian: the Bank was acting as Lead Manager of the consortium for the placement of the negotiable bonds organized in April 2015.
Financial analysts Andrea Devita, Luigi Tramontana, Claudio Giacomiello, Paola Saglietti, Gabriele Gambarova, Dario Michi, Giada Cabrino, Enrico Esposti (all members of AIAF), Francesco Previtera, Francesco Sala, Marcello Renna (ordinary member of SIAT), who prepared this research, have gained considerable experience with Banca Akros and other authorised brokerage houses. Said financial analysts do not receive a bonus, salary or any other form of remuneration, whether directly or indirectly, from any earnings in any investment banking operation. Gabriele Gambarova holds financial instruments issued by FCA. Other analysts and their families do not hold financial instruments issued by the companies under examination, nor are they directors, managers or advisors of the companies.
Pursuant to Consob rulings to implement art. 114, paragraph 8 of Italian Legislative Decree 58/98 (TUF) and specifically art. 69 “quinquies”, paragraph 2 of the Issuers Regulation, Banca Akros hereby informs its clients that additional information is available at its web site:
http://www.bancaakros.it/en/information-menu/financial-analysis-market-abuse.aspx
The information and opinions given in this research are based on sources believed to be reliable. Banca Akros has done its best to check the source of said information and that it has already been made public. However, notwithstanding the said controls Banca Akros does not guarantee nor shall it be held liable if the information supplied herein or used to prepare this research is found to be inaccurate, incomplete, untrue or incorrect.
This research is for information purposes only. It shall not be regarded as a proposal for a contract, an offer to sell nor as a solicitation to buy and/or sell financial products nor, in general, to invest. Nor shall it be regarded as advice on investment opportunities. Banca Akros does not guarantee that any of the forecasts and/or estimates supplied in this research are attainable. Moreover, Banca Akros shall not be held liable for any consequences and/or damage that may derive from the use of this research and/or the information contained herein. All the information or opinions contained in this research are subject to change without notice, without detriment to any legal or regulatory requirements.
Unless specifically authorised, this research may not be reproduced and/or circulated, whether wholly or in part, directly or indirectly.
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Members of ESN (European Securities Network LLP)
Banca Akros S.p.A. Viale Eginardo, 29 20149 MILANO Italy Phone: +39 02 43 444 389 Fax: +39 02 43 444 302
Equinet Bank AG
Gräfstraße 97 60487 Frankfurt am Main Germany Phone:+49 69 – 58997 – 410 Fax:+49 69 – 58997 – 299
SNS Securities N.V.
Nieuwezijds Voorburgwal 162 P.O.Box 235 1000 AE Amsterdam The Netherlands Phone: +31 20 550 8500 Fax: +31 20 626 8064
Pohjola Bank plc P.O.Box 308 FI- 00013 Pohjola Finland Phone: +358 10 252 011 Fax: +358 10 252 2703
Caixa-Banco de Investimento Rua Barata Salgueiro, nº 33 1269-057 Lisboa Portugal Phone: +351 21 313 73 00 Fax: +351 21 389 68 98
CM - CIC Securities 6, avenue de Provence 75441 Paris Cedex 09 France Phone: +33 1 4596 7940 Fax: +33 1 4596 7748
Bank Degroof Rue de I’Industrie 44 1040 Brussels Belgium Phone: +32 2 287 91 16 Fax: +32 2 231 09 04
Investment Bank of Greece 32 Aigialeias Str & Paradissou, 151 25 Maroussi, Greece Tel: +30 210 81 73 383
BEKA Finance Serrano, 39 28001 Madrid Spain Phone: +34 91 436 7813 Fax: +34 91 577 3770
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Members of ESN (European Securities Network LLP)
Banca Akros S.p.A. Viale Eginardo, 29 20149 MILANO Italy Phone: +39 02 43 444 389 Fax: +39 02 43 444 302
Equinet Bank AG
Gräfstraße 97 60487 Frankfurt am Main Germany Phone:+49 69 – 58997 – 410 Fax:+49 69 – 58997 – 299
SNS Securities N.V.
Nieuwezijds Voorburgwal 162 P.O.Box 235 1000 AE Amsterdam The Netherlands Phone: +31 20 550 8500 Fax: +31 20 626 8064
Pohjola Bank plc P.O.Box 308 FI- 00013 Pohjola Finland Phone: +358 10 252 011 Fax: +358 10 252 2703
Caixa-Banco de Investimento Rua Barata Salgueiro, nº 33 1269-057 Lisboa Portugal Phone: +351 21 313 73 00 Fax: +351 21 389 68 98
CM - CIC Securities 6, avenue de Provence 75441 Paris Cedex 09 France Phone: +33 1 4596 7940 Fax: +33 1 4596 7748
Bank Degroof Rue de I’Industrie 44 1040 Brussels Belgium Phone: +32 2 287 91 16 Fax: +32 2 231 09 04
Investment Bank of Greece 32 Aigialeias Str & Paradissou, 151 25 Maroussi, Greece Tel: +30 210 81 73 383
BEKA Finance Serrano, 39 28001 Madrid Spain Phone: +34 91 436 7813 Fax: +34 91 577 3770