Autogrill - Equita · Autogrill and WDF are two global leaders ready to exploit multiple...

IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT� 1

Autogrill ITALY \ Leisure & Tourism

Demerger

World Duty Free Target: € 8.5 (n.a.) Risk: Medium

Autogrill Target: € 5.1 (n.m.) Risk: Medium WORLD DUTY FREE

STOCK DATA

Price € n.a.

Bloomberg code WDF IM

Market Cap. (€ mn) n.a.

Free Float 40.7%

Shares Out. (mn) 253.4

MAIN METRICS 2013 2014E 2015E

Revenues 2,178 2,506 2,694

Adjusted EBITDA 296 323 339

Net income 85 92 106

Adj. EPS - € cents 53.8 57.1 62.4

DPS ord - € cents 0.0 0.0 0.0

INDEBTEDNESS 2013 2014E 2015E

NFP -1,022 -892 -694

Debt/EBITDA 3.8 x 3.0 x 2.2 x

Interests cov 5.1 x 6.3 x 7.7 x AUTOGRILL

STOCK DATA

Price € n.a.

Bloomberg code AGL IM

Market Cap. (€ mn) n.a.

Free Float 40.7%

Shares Out. (mn) 253.4

MAIN METRICS 2012 2013E 2014E

Revenues 4,074 4,027 4,025

EBITDA 328 323 330

Net income 11 24 38

Adj. EPS - € cents 5.6 9.6 15.0

DPS ord - € cents 0.0 0.0 4.5

INDEBTEDNESS 2012 2013E 2014E

NFP -933 -640 -568

Debt/EBITDA 2.8 x 2.0 x 1.7 x

Interests cov 6.6 x 6.5 x 10.7 x ANALYSTS

Stefano Lustig +39 02 6204 357; [email protected] September 30, 2013 # 312

TWO GLOBAL LEADERS READY TO TAKE OFF

Autogrill and WDF are two global leaders ready to exploit multiple

opportunities to expand business organically and through

combinations. We set a valuation of € 5.1 per AGL and € 8.5 for WDF.

� Two global leaders ready to take off

On 1st October Autogrill will carry out WDF’s demerger according to a

1:1 ratio. This demerger will present the market with 2 companies with a

powerful international orientation, holding leading positions

worldwide and still offering multiple growth opportunities.

� Autogrill: innovation and expansion in EM

Autogrill is the world leader in the F&B business in concession for

travellers. >50% of its revenues are accounted for by North

America, where it is active in 22 out of 25 top airports through

proprietary brands but above all resorting to a wide range of famous

brands (Starbucks, BK). Some 30% of the business are made in Italy

and 18% in the Rest Of Europe, with motorway being the main channel.

Over the last 5 years AGL’s EBITDA has recorded a steady decrease

mainly due to: 1) rising rents paid to landlords; 2) food inflation; 3) drop

in traffic on the motorway channel.

The future strategy is re-locating business outside of Europe and

motorways and more towards emerging countries and airports while

increasing travellers capture innovating the restaurant concepts.

The implementation of these strategies and the gradual recovery of

traffic prompt us to forecast a return to mid / high single digit growth

for EBITDA as early as in 2014.

The DCF model we applied has resulted in a valuation of € 5.1 per

share, implicitly equal to 2015 PE at 21.4x and 2015 FCF yield of 6%.

� WDF: exploitation of long contracts and further expansion

WDF is the second-ranking world operator for airport retail. As

much as nearly 50% of its sales come from UK, whereas the Rest Of

Europe (mainly Spain) accounts for approximately another 30% of

revenues. In bigger airports (like Heathrow and Madrid) >50% of sales

are made through passengers or travellers coming from destinations

outside the EU.

Over the last 5 years EBITDA have grown steadily (nearly doubled)

thanks to improved mix in traveller and product sold as well as huge

synergies among the 3 merged companies.

The strategy envisages: sales expansion (nearly doubling) in Spain

through a radical plan of locations refurbishing, exploiting Heathrow

T2 opening, growth in EM also by way of business combinations.

DCF analysis result in a valuation of € 8.5 per share. Implicitly, this

means 2015 PE at 20x and 2015 FCF yield of 9%.

� Demerged to attract business combinations

One of the rationales behind the demerging process is to let both

companies seek out potential business combinations. The track record of

WDF proves that business combinations in retail are material and

quick to achieve, especially in procurements and logistics. In the F&B

business synergies can be material but less immediate because of the

high percentage of fresh food supplied and processed locally.

The valuation of AGL combined entity (before split) amounts to € 13.6

and it exceeds the previous one by 28%. This change was the result of

more aggressive estimates on both businesses following recent

management presentations.

Autogr i l l – September 30, 2013


WORLD DUTY FREE

MAIN FIGURES € mn 2011 2012 2013E 2014E 2015E 2016E

Revenues 1,821 2,027 2,178 2,506 2,694 2,848

Growth 9% 11% 7% 15% 8% 6%

EBITDA 228 262 266 293 309 327

Growth 18% 15% 1% 10% 6% 6%

Adjusted EBITDA 228 262 296 323 339 357

Growth 18% 15% 13% 9% 5% 5%

EBIT 107 150 161 173 185 198

Growth 37% 40% 8% 7% 7% 7%

Profit before tax 80 133 110 127 145 167

Growth 126% 66% -17% 15% 14% 15%

Net income 62 101 85 92 106 122

Growth 129% 64% -15% 8% 15% 16%

Adj. net income 111 150 136 145 158 175

Growth 62% 35% -9% 6% 9% 10%

MARGIN 2011 2012 2013E 2014E 2015E 2016E

Ebitda Margin 12.5% 12.9% 12.2% 11.7% 11.5% 11.5%

Ebitda adj Margin 12.5% 12.9% 13.6% 12.9% 12.6% 12.5%

Ebit margin 5.9% 7.4% 7.4% 6.9% 6.9% 7.0%

Pbt margin 4.4% 6.6% 5.1% 5.1% 5.4% 5.9%

Ni rep margin 3.4% 5.0% 3.9% 3.7% 3.9% 4.3%

Ni adj margin 6.1% 7.4% 6.3% 5.8% 5.9% 6.1%

SHARE DATA 2011 2012 2013E 2014E 2015E 2016E

EPS - € cents 24.3 39.7 33.6 36.4 41.7 48.2

Growth 130.3% 63.8% -15% 8% 15% 16%

Adj. EPS - € cents 43.6 59.1 53.8 57.1 62.4 68.9

Growth 62.5% 35.5% -9% 6% 9% 10%

DPS ord - € cents 0.0 0.0 0.0 0.0 0.0 0.0

BVPS - € 2.3 2.4 1.8 2.1 2.5 3.0

VARIOUS - € mn 2011 2012 2013E 2014E 2015E 2016E

Capital employed 1,218 1,173 1,476 1,437 1,345 1,243

FCF 112 160 139 130 198 224

Capex -24 -28 -78 -89 -45 -45

Working capital -94 -102 -98 -83 -83 -83

INDEBTNESS - €mn 2011 2012 2013E 2014E 2015E 2016E

NFP -639 -562 -1,022 -892 -694 -470

D/E 1.11 x 0.92 x 2.25 x 1.65 x 1.07 x 0.61 x

Debt/EBITDA 2.8 x 2.1 x 3.8 x 3.0 x 2.2 x 1.4 x

Interests cov 8.1 x 15.7 x 5.1 x 6.3 x 7.7 x 10.4 x

REMUNERATION 2011 2012 2013E 2014E 2015E 2016E

ROE 11.4% 16.9% 16.4% 18.4% 17.6% 17.1%

ROCE 11.5% 14.2% 14.2% 12.7% 14.0% 15.8%

Source: company data and EQUITA SIM estimates



BREAKDOWN BY SALES AREAS (2012)

UK48%

RoE30%

Americas14%

Asia & ME8%

BREAKDOWN BY PRODUCT CATEGORIES (2012)

Perfumery&Co

smetics44%

Liquors18%

Tobacco12%

Food11%

Other15%

CONTRACTS BY MATURITIES (2013)

> 10 YEARS60% 5-10 YEARS

34%

< 5 YEARS6%

MAIN SHAREHOLDERS

Edizione Holding (Benetton Family) controls 59.3%

of the capital.

WDF: GLOBAL LEADER IN A GROWING MARKET

WDF is a global leader in travel retail. It operates in 20 Countries, 101

airports and 561 airport shops.

Through a concession contract, a retailer such as WDF is authorized by a

landlord (institution controlling the Airport, port or other) to manage several

retail outlets (duty free or duty paid) for a certain period.

The concession portfolio has an average duration > 8 years with an

historical 96% retention rate. The UK airports contract has been secured

until 2023 (2020 + 3 years of extension), whereas the Spanish concession

has been recently extended until 2020.

In terms of sales, WDF is the second player in the sector after Dufry.

Other big (unlisted) players are Nuance, LS Travel Retail (Lagardere),

Heinemann.

The worldwide passenger traffic trend is forecast to grow by some

+4.9% CAGR 2012-16. Europe captures the largest portion of international

passenger traffic and it is expected to continue to do so. On the other hand,

America and A sia areas are the biggest markets for domestic passengers.

For this reason, WDF has had a chance to benefit from the improvement in

the passenger mix. As a matter of fact, in 2012 78% of WDF sales were

generated in Europe but >50% of them were made up by passengers

travelling to non-EU destinations. Long-haul travellers tend to show a

higher than average inclination to spend within the airport as: 1) they have

more time available for shopping; 2) they often come across products that

are not available at home; 3) they are more in a mood of “celebrating” their

return home.

In the last few years beauty has become the most sold product category in

airport retail, contributing to 43% of group sales. All product categories

have enjoyed a very positive performance in recent years, except for

tobacco. This has resulted in an opportunity for gross margin expansion, as

the profitability of food and cosmetics is higher than the one associated to

tobacco & alcohol.

WDF HISTORICAL RESULTS (€ MN)

World Duty Free 2007A 2008A 2009A 2010A 2011A 2012A

Sales 1,733 1,668 1,538 1,676 1,821 2,027

YoY Growth % -3.7% -7.8% 9.0% 8.6% 11.3%

EBITDA 140 143 157 194 228 262

YoY Growth % 2% 10% 23% 18% 15%

During the 5 last years WDF has recorded a strong growth in terms of both

top line and profitability, which expanded even during the recession in

2009. The business has a low capital intensity and therefore the FCF is

high and visible. As a matter of fact, the capex needed for stores is quite

low (just a few pieces of furniture and a cash counter). Furthermore, the

vast majority of sales are cash (or by credit card), inventory rotation is high

and as a result the investment in Working Capital is low, if not negative.

Main challenges for the future are the expansion in Asia and possible

business combinations.

Strenghts/Opportunities Weaknesses/Threats

Global air traffic constantly growing

Length of the concession > 8 years

Material synergies in business combinations

Still low penetration of EM

High fees in renewing concessions



WDF: A CASH MACHINE WITH MULTIPLE GROWTH OPPORTUNITIES

WDFG: A GLOBAL TRAVEL RETAIL LEADER

Source: Company presentation

� Growing organically while considering external growth options

WDF’s current structure has originated from the 2008 merger of 3 recently

acquired retail operators: Aldeasa (mainly Spain, but with exposure to Latam and

Middle East), World Duty Free (leading player in UK) and Alpha (operating in UK

and in Asia).

WDF’s management boasts an excellent track record, having achieved

outstanding results. With the exception of 2009 and its recession, turnover has

been growing at a steady pace; moreover, the constant increase in profitability

has mainly been the result of:

1. An improvement in the mix of travellers towards passengers heading for longer

distance destinations and therefore with a greater inclination to spend in airports;

2. An improvement in the product mix (e.g. more cosmetics and less tobacco);

3. High synergies (€40-45 mn) from the merger of the 3 original companies

(WDF, Aldeasa and Alpha).

TOP LINE GREW IN EVERY REGION….


HIGH SYNERGIES FROM BUSINESS COMBINATION




….AND IN ALL PRODUCT CATEGORIES


This excellent track record proves that WDF is well equipped to manage growth

through acquisitions and aggregation with other players.

The worldwide travel retail business amounts to some €50 bn sales (they have

almost doubled over the last 6 years). Airports are the most important Travel Retail

Channel, accounting for >60% of the business.

The business is still rather fragmented, as the main top 5 players control

around 35% of the global airport business.

Significant free cash flow generation, globalisation of consumption habits and

substantial economies of scale are currently driving a consolidation process.

WDFG ENJOYS A LEADING POSITION TRAVEL RETAIL


The bulk of WDF business will remain in Europe. However, a lot of attention will be

devoted to a potential expansion into the Asian market. The latter is expected

to become the most dynamic market in the next few years. Expansion will be

pursued both organically and through acquisitions.

WDF estimates that over the next 5 years contracts will expire amounting to € 8

bn total revenues per year. WDF is currently engaged in the selection process to

operate the retail business in Singapore (around € 500 mn per annum).



MEETING $8BN OF NEW CONTRACTS


At the moment, WDF is also busy opening/refurbishing many new shops. During

the 15 months that started last March 2013, WDF will process more than 110

stores, opening more than 14,000 new sqm. The 2 most relevant projects will be

• the refurbishment of the Spanish airports, due to that concession being

recently renegotiated until 2020. WDF has the opportunity to expand the

operating surface by 33% or by adding further 12,000 sqm. This project will be

carried out mostly in 2013 and 2014. In the first few months after refurbishing

Barcelona, WDF has recorded an 8% increase in penetration rate (percentage

of passengers turning into customers) as well as a +26% rise in spend per

head (SPH). As a whole, the management assumes that revenues should

gradually double by the end of the concession period (2020);

• In June 2014 the new Terminal 2 at Heathrow will be opened. WDF will

have the opportunity to open around 2200 sqm of new commercial areas on

that very same occasion.

A LONG LIST OF NEW OPENINGS IN A SHORT PERIOD OF TIME




WDF SALES BREAKDOWN (2010-2015)

2010 2011 2012 2013E 2014E 2015E

Total WDF (ex other sales) 1,676 1,821 2,002 2,152 2,482 2,669

growth na 8.7% 10.0% 7.5% 15.3% 7.5%

UK 784 859 961 969 1,023 1,074

growth na 9.6% 11.8% 0.9% 5.5% 5.0%

RoE 535 572 597 661 755 850

growth na 7.0% 4.3% 10.8% 14.2% 12.6%

Americas 198 240 280 349 518 543

Growth na 21.6% 16.6% 24.6% 48.3% 5.0%

Asia & ME 158 149 162 173 187 202

Growth na -5.2% 8.6% 6.6% 8.0% 8.0% Source: Company data and EQUITA SIM estimates

� WDF VALUATION AT € 8.5 PER SHARE

We set a valuation of € 8.5 for WDF based on a DCF model supported by the

multiple analysis.

The following table shows the implied multiples at different prices of WDF.

WDF – IMPLIED MULTIPLES (2014-2015)

Price (PS) 6.0 7.0 8.5 9.0 10.0

Fiscal Year 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

P/E 16.5 14.4 19.3 16.8 23.5 20.5 24.8 21.6 27.5 24.0

P/E Adj. 10.5 9.6 12.3 11.2 15.0 13.7 15.8 14.4 17.5 16.0

FCF yield 8.6% 13.0% 7.3% 11.2% 6.0% 9.1% 5.7% 8.7% 5.1% 7.8%

EV/EBITDA 7.7 6.7 8.4 7.5 9.7 8.6 10.0 8.9 10.8 9.7 Source: EQUITA SIM estimates

We believe it is suitable to value WDF based upon a DCF model, since it is a high

cash-generation business.

DCF

Assumptions

2013 2014 2015 2016 2017 Perpetuity

g 1.5% Sales 2,178 2,506 2,694 2,848 2,905 2,949

WACC 7.9%

Change % 7.4% 15.1% 7.5% 5.7% 2.0% 1.5%

EBITDA 266 293 309 327 334 333

Change % 1.3% 10.1% 5.7% 5.9% 2.0% 1.7%

Margin 12.2% 11.7% 11.5% 11.5% 11.5% 11.3%

D&A -104 -119 -124 -129 -132 -45

EBIT 161 173 185 198 202 288

Change % 7.7% 7.3% 6.7% 7.1% 1.8% 45.4%

Margin 7.4% 6.9% 6.9% 7.0% 6.9% 9.8%

Taxes -48 -52 -55 -59 -60 -86

Valuation EBIT after Tax 113 121 129 139 141

NPV of FCFs (14-17) 799

Change % 7.7% 7.3% 6.7% 7.1% 1.8% 45.4%

NPV of Terminal Value 2,449

Other (incl. Advanced Spanish fees) 30 30 30 30 30 0

Adj. 2013 Net Debt -1,022

Capex -78 -89 -45 -45 -40 -45

AGL Equity 2,226

(increase) decrease in WC -4 -15 0 0 0 0

Peripherals & others -60 Free Cash Flow before minorities 165 167 239 253 263 202

Total Equity 2,166

FCF Minorities 0 0 0 0 0 0

Adj. # of shares 253 Free Cash Flow after minorities 165 167 239 253 263 202

Discount Factor

1.02 1.10 1.19 1.28 1.28

Target Price Ord. 8.5 PV of FCF 163 217 213 205 157


WDF Implied Multiples at

different market prices



DCF SENSITIVITY (€)

LONG-TERM GROWTH 1.0% 1.5% 2.0%

4.9% 7.2 7.9 8.7

FREE RISK RATE 4.4% 7.8 8.5 9.4 3.9% 8.4 9.3 10.3

Source: EQUITA SIM estimates

It is just natural to compare WDF with Dufry, the leading player in the sector.

Unfortunately we do not find as reliable the current consensus estimates on Dufry.

This because the company just announced the renegotiation of a giant contract (in

Brazil) and the conditions of the deal are still of a quite poor visibility.

DUFRY AG MULTIPLES

Company EV / EBITDA P/E Adj P/E EBITDA margin FCF yield

2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015 2013 2014 2015

Dufry AG 10.6 x 8.7 x 7.2 x 21.4 x 16.1 x 13.3 x 31.5 x 21.7 x 16.7 x 14.2% 14.9% 15.2% 5.9% 5.9% 10.0% Source: Bloomerg data

We find therefore more useful to look at the historical multiple at which Dufry

was trading. We calculate that avg EV/EBITDA and the avg. PE (adjusted for the

amortization of the concession costs) was respectively around 9x and 15x. The

table below shows the implied valuation of WDF when setting as a multiple target

9.0x EBITDA and 15x Adj. Earnings.

WDF @ DUFRY AVG.HISTORICAL MULTIPLES (2006-2013)

EV / EBITDA Adj. PE

(A) 2015E multiple 9.0 x (A) 2015E Adj PE multiple 15.0 x

(B) 2015E EBITDA 339 (B) 2015 Adj Net Income 158

(C)=(A)x(B) EV (EUR) 3,052 (C) (A) x (B) Total Equity Value (eur mn) 2,372

(D) Net Debt (EUR) -694 (D) Dividends to be cashed-in (eur mn) 0

(E) Adjustments to NFP (2015) 0 (E) (C) + (D) Total Stock Value (eur mn) 2,372

(F) = (C)+(D) Total stock value (EUR) 2,359

(G) Discount (1+Ke) 1.1 (F) Discount (1+Ke) 1.1

(H)=(E)/(F) Stock value (EUR) 2,080 (G) (E) / (F) Actualized Total Stock Value (eur) 2,092

(I) N.shares 253 (H) N.shares 253

Price Target € 8.2 8.3 Source: EQUITA SIM estimate and Bloomberg data

We however tend not to focus on EV/EBITDA, because below the EBITDA Dufry

has a high amount of minorities, since several business segments are

developed through local JVs.

We also do not like the comparison based upon PE or Adj. PE, because of the

different interpretations that can be given to intangible assets amortization (it is

usually the concession amortization).

We therefore tend to prefer the FCF yield multiple, since it better captures the

actual cash generated by the company regardless of the applied accountancy policy.

Based upon Dufry’s historical FCF yield (which was around 7.5% in 2006-2013),

we achieve a valuation of € 9.2 per share for WDF.

FCF YIELD VALUATION

(A) FCF yield target 7.5%

(B) 2015E FCF 197.8

(C) = (B)/(A) Total stock value (EUR) 2,638

(D) Discount (1+Ke) 1.13

(E)=(C)/(D) Stock value (EUR) 2,326

(F) N.shares 253.4

(G) Target (eur PS) 9.2 Source: EQUITA SIM estimates



� Value creation through business combinations

The WDF demerger from AGL is also the result of the decision to allow WDF to

seize the opportunity to expand its business also through business combinations.

There is evidence that travel retail business combinations generate significant

synergies. Synergies in the most important deals announced by Autogrill-WDF and

Dufry can be calculated at least 3% of turnover.

As a way of an example, we estimate that in the event of a merger between

WDF and Dufry (a public company), the potential synergies would amount to

at least €150mn of EBITDA (based on combined sales of close to € 6 bn),

leading to around €1.2bn of EV (roughly 8x EBITDA) to be split between the

shareholders of the combined entity.

Such a value is around 23% of the current market valuation of the two stocks.

SYNERGIES - TRAVEL RETAIL COMBINATIONS

2008 (€ mn)

Sales 1,733

Autogrill, Aldeasa, Alpha and WDF EBITDA 140

Announced Synergies 45

2012 (CHF mn)

Sales 365

Dufry- Follie Follie EBITDA 102

Announced Synergies 12

2011PF ($ mn)

Sales 395

Dufry- Interbaires EBITDA 97

Announced Synergies 25 Source: EQUITA SIM estimates and company data



P&L 2011 2012 2013E 2014E 2015E 2016E

Revenues 1,821 2,027 2,178 2,506 2,694 2,848

Growth 9% 11% 7% 15% 8% 6%

Total opex -1,617 -1,765 -1,912 -2,213 -2,385 -2,521

Margin -89% -87% -88% -88% -89% -89%

EBITDA 228 262 266 293 309 327

Growth 18% 15% 1% 10% 6% 6%

Margin 13% 13% 12% 12% 11% 11%

Adjusted EBITDA 228 262 296 323 339 357

Growth 18% 15% 13% 9% 5% 5%

Margin 13% 13% 14% 13% 13% 13%

Depreciation& amortization -121 -112 -104 -119 -124 -129

Provisions na na na na na na

Depreciation&provistion -121 -112 -104 -119 -124 -129

EBIT 107 150 161 173 185 198

Growth 37% 40% 8% 7% 7% 7%

Margin 6% 7% 7% 7% 7% 7%

Net financial profit/Expenses -28 -17 -52 -47 -40 -31

Profits/exp from equity inv na na na na na na

Other financial profit/Exp 1 0 0 0 0 0

Total financial expenses -27 -17 -51 -47 -40 -31

Non recurring pre tax 0 0 0 0 0 0


Growth 126% 66% -17% 15% 14% 15%

Taxes -16 -30 -23 -32 -36 -42

Tax rate -20% -23% -21% -25% -25% -25%

Minoritiy interests -3 -2 -2 -3 -3 -3

Non recurring post tax na na na na na na

Net income 62 101 85 92 106 122

Growth 129% 64% -15% 8% 15% 16%

Margin 3% 5% 4% 4% 4% 4%

Adj. net income 111 150 136 145 158 175

Growth 62% 35% -9% 6% 9% 10%

Margin 6% 7% 6% 6% 6% 6%

CF Statement 2011 2012 2013E 2014E 2015E 2016E

Adjusted EBITDA 228 262 296 323 339 357

Financials -29 -18 -46 -47 -40 -31

Taxes -34 -43 -29 -32 -36 -42

Capex -24 -28 -78 -89 -45 -45

∆ WC and other -31 -14 -4 -15 0 0

Other 2 1 1 -10 -20 -15

FCF 112 160 139 130 198 224

Dividends na na -220 0 0 0

M&A na na -90 0 0 0

Other na na -289 0 0 0

(Increase) Decrease in Net Debt 86 78 -460 130 198 224




AUTOGRILL

MAIN FIGURES € mn 2011 2012 2013E 2014E 2015E 2016E

Revenues 4,024 4,074 4,027 4,025 4,189 4,306

Growth -29% 1% -1% 0% 4% 3%

EBITDA 389 328 323 330 361 387

Growth -36% -16% -1% 2% 9% 7%

Adjusted EBITDA 389 328 323 330 361 387

Growth -36% -16% -1% 2% 9% 7%

EBIT 196 103 113 115 146 172

Growth -23% -47% 10% 2% 27% 18%


Growth -18% -65% 22% 36% 40% 25%

Net income 71 11 24 38 60 79

Growth -31% -85% 114% 61% 59% 32%

Adj. net income 72 14 24 38 59 78

Growth -51% -80% 72% 56% 55% 32%

MARGIN 2011 2012 2013E 2014E 2015E 2016E

Ebitda Margin 9.7% 8.1% 8.0% 8.2% 8.6% 9.0%

Ebitda adj Margin 9.7% 8.1% 8.0% 8.2% 8.6% 9.0%

Ebit margin 4.9% 2.5% 2.8% 2.9% 3.5% 4.0%

Pbt margin 3.7% 1.3% 1.5% 2.1% 2.8% 3.4%

Ni rep margin 1.8% 0.3% 0.6% 0.9% 1.4% 1.8%

Ni adj margin 1.8% 0.3% 0.6% 0.9% 1.4% 1.8%

SHARE DATA 2011 2012 2013E 2014E 2015E 2016E

EPS - € cents 28.0 4.3 9.3 15.0 23.7 31.2

Growth -31.1% -84.5% 114% 61% 155% 109%

Adj. EPS - € cents 28.5 5.6 9.6 15.0 23.3 30.7

Growth -51.3% -80.5% 72% 56% 143% 105%

DPS ord - € cents 28.0 0.0 0.0 4.5 7.1 9.4

BVPS - € 0.9 0.9 1.8 2.0 2.2 2.4

VARIOUS - € mn 2011 2012 2013E 2014E 2015E 2016E

Capital employed 1,133 1,171 1,102 1,068 1,042 1,020

FCF 2 -20 55 62 77 90

Capex -185 -251 -180 -181 -189 -194

Working capital -491 -514 -514 -504 -494 -484

INDEBTNESS - €mn 2011 2012 2013E 2014E 2015E 2016E

NFP -913 -933 -640 -568 -493 -411

D/E 1.32 x 4.24 x 2.69 x 1.23 x 0.99 x 0.75 x

Debt/EBITDA 2.3 x 2.8 x 2.0 x 1.7 x 1.4 x 1.1 x

Interests cov 8.3 x 6.6 x 6.5 x 10.7 x 13.2 x 15.7 x

REMUNERATION 2011 2012 2013E 2014E 2015E 2016E

ROE 15.9% 6.2% 6.9% 7.9% 11.2% 13.4%

ROCE 9.5% 4.3% 5.4% 6.1% 8.3% 10.3%




SALES BREAKDOWN (2012)

HMSHost52%

Italy30%

RoW18%

EBITDA BREAKDOWN (2012)

HMSHost64%

Italy24%

RoW12%

CHANNEL BREAKDOWN (2012)

Airports50%

Motorways40%

Railways Stations

4%Others6%

MAIN SHAREHOLDERS

Edizione Holding (Benetton Family) controls 59.3%

of the capital.

AUTOGRILL: ON THE EVE OF A REVERSAL IN TREND OF RESULTS

Autogrill is the world’s leading operator of food and beverage services

for travellers. It operates via restaurants located at airports, motorway

service stations, and railway stations. Autogrill often uses famous brands

(Starbucks, Burger King…) under long-term (sometimes exclusive)

contracts for specific channels.

AGL runs its businesses (both restaurants and retail shops) through

concession contracts with landlords (the owners of the airport or the

motorway). AGL pays a concession fee to the landlords and is fully

responsible for the outlet’s P&L. The avg. AGL concession contract has a

duration of around 8 years. As opposed to outlets located in city centres,

the ones based in airports or along motorways enjoy a very favourable

competitive arena (within the area) and, as a result, a rather high visibility

of the FCF generated during the concession period.

AGL enjoys very high market shares in the F&B business within North

American airports and along Italian motorways.

Among the main competitors there are private companies, such as SSP

and Elior.

More than 50% of sales and >60% of EBITDA come from the North

American business (HMS) where AGL is active in 22 out of the top 25 US

airports, accounting for 68% of US traffic. AGL is the leading operator,

since the size of the US second-ranking player is about one tenth of AGL’s

size. In North America AGL mainly operates through renowned brands

(80% of its revenues) and only partially through proprietary brands.

In Europe and especially in Italy AGL is mainly active in the motorway

channel, whose traffic and performance are more linked to local GDP and

not to the global figure, as it is the case for airports.

In the last 5 years the group has enjoyed quite stable revenues (with

positive performance in airports and negative dynamics along motorways).

Margins have been decreasing steadily due to the following factors:

1. rising rents paid to landlords;

2. food inflation;

3. drop in sales and profitability on the motorway channel. In Italy, which is

highly exposed to motorways, EBITDA has almost halved.

Since the F&B business is pretty “greedy” for investments, the falling

EBITDA has brought AGL’s FCF generation down to zero, whereas in the

previous years it had been as high as € 150-200 mn.

AGL HISTORICAL RESULTS (€ MN)

Food&Beverage 2007A 2008A 2009A 2010A 2011A 2012A

Sales 3,878 3,934 3,787 4,028 4,024 4,074

YoY Growth % na 1% -4% 6% 0% 1%

EBITDA** 494 465 438 439 414 356

YoY Growth % na -6% -6% 0% -6% -14%

** EBITDA data are before corporate costs

The future challenges are: relocating business outside of Europe and

motorways and more towards emerging countries and airports.

Furthermore, a long innovation/restructuring process of proposed

restaurants is long due in order to increase travellers capture.

Strenghts/Opportunities Weaknesses/Threats

Global air traffic constantly growing

High market shares in the penetrated market

Wide range of brands

Length of the concession > 7 years

High capital intensity

Poor business trend on motorways (EU)

Still low penetration of EM



AUTOGRILL: THE RECIPE FOR A RETURN TO GROWTH

GLOBAL LEADER IN RESTAURANT FOR TRAVELLER


� Innovation and re-location

The management has pointed out the following objectives to reverse the recent

negative trend in results:

• To increase exposure to emerging markets. Autogrill has recently

established a presence in Vietnam, Russia and Turkey, where in 2012 it has

made some € 30 mn sales. Focus will be mostly placed on Asia, which is likely

to become the world top airport market soon and where the market for F&B

business is still very fragmented and operated by local brands.

• To reduce the weight of European motorways: some 60% of motorway

concessions in Europe are due to expire over the next 3 years (for example,

in 2014 approximately 1/3 of the Italian business is expiring). AGL considers

this occurrence as an opportunity to renegotiate royalties and bid for a selected

number of restaurants only, in order to eventually reduce sales while

increasing FCF

2012** – F&B - AIRPORTS ARE THE MOST IMPORTANT CHANNEL


** Data are pre the disposal of US Retail business to WDF

• To increase capture towards customers mainly through innovation. AGL is

currently testing new formats of restaurants, recipes, concepts all over the

world in order to increase its appeal to customers. Just to make an example, in

2012 in North America 370 new restaurants were opened, 497 restaurants

were closed and investments amounted to $191 mn, also targeted to new

formats offering more service content, more appeal and a higher average ticket



• To growth through business combination. AGL management enjoys a solid

track record in big business combinations, especially when it comes to the

successful business combinations carried out for WDF. Also the acquisition of

HMS Host by Autogrill has been a great success.

The objectives of business combination are:

- speeding up growth in airports and railways stations;

- reducing the weight of continental Europe;

- leveraging on G&A and purchasing synergies.

A possible business combination that has been often mentioned by the press (eg

WSJ online May 9 2013) is the one with SSP.

Select Service Partner is one of the main operators of food and beverage brands

in travel locations worldwide. It operates in more than 30 countries (in particular in

Europe) and in more than 400 locations through a portfolio of brands such as

Burger King, Caffè Ritazza, Starbucks and Upper Crust.

In 2012, SSP generated revenues of GBP 1.7 bn and an EBITDA of GBP139 mn.

The company is currently owned by the Swedish Private Equity EQT.

There are no public indications on the current level of Debt.

We estimate however that today D/EBITDA could be around 6.5x (debt around

GBP 900 mn).

Such a high level of leverage can be an obstacle for any m&a deal because the

EV of the deal can be high even with low valuation of the equity.

READY FOR BUSINESS COMBINATIONS


� Main challenges

• We feel deep admiration for the achievements of the management team

led by Mr. Tondato (CEO) and his co-workers. Precisely for this reason it is

difficult to identify “easy” actions to be carried out that might have been

neglected by the management in the past (except for more focus on emerging

markets, perhaps). We therefore believe that, if the F&B business has

gradually moved from nearly €200 mn FCF to zero in just a few years despite

an excellent management, the real reason lies in some negative elements that

are probably structurally adverse. Among these elements there is the

inflationary trend in food, the structural reduction of motorway traffic, a change

in consumer behaviour (especially on motorways) and greediness of the

landlords.

RICH BRAND PORTFOLIO




• Following years of monitoring AGL’s history, we have come to the conclusion

that – as opposed to the Travel Retail business – there are no clear synergies

between a restaurant in Vietnam and one in Seattle, the reason being that

fresh food procurement is necessarily local.

For the same reason, as opposed to the retail business, business

combinations are less quick and immediate in delivering substantial value.

• With its thousands of restaurants in > 1000 locations all over the world and its

>€ 4bn sales, Autogrill is so “big” that the impact of new business development

in emerging countries (the management aims at € 100 mn sales in 2015),

however advisable and positive, will certainly deliver appealing returns but it

will take years before the impact on the group economics will be sizeable.

EXPANSION IN EMERGING MARKETS


AGL SALES BREAKDOWN (2011-2016)

2011 2012 2013E 2014E 2015E 2016E

Food & Beverage Sales 4,024 4,074 4,027 4,025 4,189 4,306

Growth -0.1% 1.3% -1.2% -0.1% 4.1% 2.8%

HMSHost 1,924 2,124 2,113 2,129 2,248 2,330

Growth 0.2% 10.4% -0.5% 0.8% 5.6% 3.6%

Italy 1,356 1,228 1,179 1,139 1,162 1,173

Growth 0.7% -9.5% -3.9% -3.4% 2.0% 1.0%

Rest of Europe 744 723 735 757 780 803

Growth -2.2% -2.8% 1.7% 3.0% 3.0% 3.0%

Source: Company data and EQUITA SIM estimates

AGL EBITDA BREAKDOWN (pre-corporate costs)

2011 2012 2013E 2014E 2015E 2016E

Food & Beverage EBITDA 414 356 355 358 389 415

Margin 10.3% 8.7% 8.8% 8.9% 9.3% 9.6%

HMSHost 224 228 235 244 262 272

Margin 11.6% 10.7% 11.1% 11.4% 11.7% 11.7%

Italy 133 87 75 64 74 87

Margin 9.8% 7.1% 6.4% 5.6% 6.4% 7.4%

Rest of Europe 57 42 45 50 52 57

Margin 7.6% 5.7% 6.1% 6.6% 6.7% 7.1%

Source: Company data and EQUITA SIM estimates



� VALUATION OF AUTOGRILL AT € 5.1 PER SHARE

We set a valuation of € 5.1 for AGL based on a DCF model.

The following table shows the implied multiples at different prices of AGL.

AUTOGRILL - MULTIPLES SENSITIVITY (2014-2015)

Price (PS) 3.1 4.1 5.1 6.1 7.1

Fiscal Year 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015

P/E 20.5 12.9 27.2 17.2 33.9 21.4 40.6 25.6 47.3 29.8

P/E Adj. 20.5 13.2 27.2 17.5 33.9 21.8 40.6 26.1 47.3 30.4

FCF yield 7.9% 9.8% 6.0% 7.4% 4.8% 6.0% 4.0% 5.0% 3.4% 4.3%

EV/EBITDA 4.8 4.2 5.5 4.9 6.3 5.6 7.1 6.3 7.9 7.0 Source: EQUITA SIM estimates

We believe the DCF model to be the best way to capture the actual wealth

generated by the management.

DCF

Assumptions

2013 2014 2015 2016 2017 Perpetuity

g 1.5%

Sales 4,027 4,025 4,189 4,306 4,407 4,474

WACC 7.37%

Change % -1.2% -0.1% 4.1% 2.8% 2.4%

EBITDA 323 330 361 387 417 415

Change % -1.5% 2.2% 9.3% 7.4% 7.7%

Margin 8.0 8.2 8.6 9.0 9.5 9.3

D&A -210 -215 -215 -215 -215 -208

EBIT 113 115 146 172 202 207

Change % 9.8% 1.7% 26.5% 18.3% 17.4%

Margin 2.8 2.9 3.5 4.0 4.6 4.6

Taxes -43 -44 -55 -65 -77 -79

Valuation

EBIT after Tax 270 276 295 312 330

NPV of Free Cash Flows (2014-2017) 397

Change % -8.1% 2.3% 6.9% 5.6% 6.0%

NPV of Terminal Value 1,759 Adj. Net Debt -640

Capex -180 -181 -189 -194 -198 -190

AGL Equity 1,285

(increase) decrease in WC 0 -10 -10 -10 -10

Peripherals & others* -231

Free Cash Flow before minorities 90 95 107 118 132 146

Total Equity 1,285

FCF Minorities Adj. # of shares 253

Free Cash Flow after minorities 90 95 107 118 132 146

Discount Factor 1.00 0.98 0.91 0.85 0.79

Target Price Ord. 5.1

PV of FCF 89 94 98 101 105 Source: EQUITA SIM estimates

DCF SENSITIVITY (€)

LONG-TERM GROWTH 1.0% 1.5% 2.0%

3.9% 5.0 5.6 6.4

FREE RISK RATE 4.4% 4.5 5.1 5.7 4.9% 4.1 4.6 5.2

Source: EQUITA SIM estimates

There are no direct listed competitors of AGL.

Catering companies like Compass and Sodexo are often used as peers but

actually they are more business services companies. We believe that a

EV/EBITDA-based comparison with these businesses could be misleading, since

these companies have a lower capital intensity and therefore enjoy a higher cash-

generating capacity. Moreover, AGL is penalised by a high tax rate mainly

because of the Irap tax (Regional income tax) due on Italian operations.

At our valuation of € 5.1 per share, AGL is implicitly valued only 5.6x the 2015

EBITDA (vs. 8.7x of the “peers”). At the same time is implicitly valued 21.4x

earnings vs 15.6x for the panel.

AGL Implied Multiples at

different market prices



F&B PEERS

Company Mkt Cap (€) EV / EBITDA P/E Adj FCF Yield EBITDA margin Tax Rate NFP/EBITDA Sales CAGR EPS ADJ

2013 2014 2015 2013 2014 2015 2013 2014 2015 2014 Last FY 2014 2013-2015 2013-2015

Compass Gr. 18,279 11.0x 10.3x 9.4x 18.1x 16.7x 15.3x 4.5% 5.4% 5.9% 9.6% -23.1% -0.7x 4.7% 8.6%

Sodexo 10,861 9.5x 8.5x 7.2x 21.6x 19.1x 16.1x 5.0% 6.0% 7.1% 8.0% -34.2% -0.1x 4.0% 16.0%

Restaurant Gr. 1,286 10.5x 9.4x 8.5x 20.1x 17.9x 16.1x 3.2% 4.1% 4.8% 19.8% -25.3% -0.1x 9.5% 11.5%

WhitBread 6,514 11.7x 10.8x 9.8x 18.1x 16.3x 14.7x 2.8% 3.5% 3.8% 24.3% -25.8% -0.9x 10.0% 11.1%

Average 10.7x 9.7x 8.7x 19.5x 17.5x 15.6x 3.8% 4.8% 5.4% 15.4% -27.1% -0.5x 7.1% 11.8% Source: Bloomberg Consensus

ANNEX: COMPANY DESCRIPTION

SODEXO

Sodexo is a Paris-based company that designs, manages and delivers

comprehensive on-site service solutions for a wide range of companies and

institutions. The company offers food, construction management, reception,

technical maintenance and housekeeping services. The company employs circa

390.000 workers in 80 countries. In FY2012 it reported sales of €18.2 bn and an

EBITDA of €1.32 bn. A large portion of Sodexo’s revenues comes from Food

Services (in 2012 roughly 70%) mainly delivered through catering contracts.

COMPASS GROUP PLC

Compass Group PLC is a British company that provides catering and support

services in countries throughout the world. The main company’s clients are in

locations including: offices, hospitals and care homes, colleges and schools,

sports locations, military facilities. The group operates in around 50 countries and

in over 45.000 client locations. In 2012 Compass generated revenues of £16.9 bn

and an EBITDA of £1.48 bn. >75% of Compass Group’s sales are generated

delivering F&B products through multi-year contracts.

WHITBREAD PLC

Whitbread is the UK’s largest hotel, restaurant and coffee shop operator.

Company employs over 40,000 people worldwide and serves 22 million customers

every month. The company manages two main businesses:

- Hotel & Restaurants (67% of total sales): Premier Inn is a UK’s leading hotel

business, with 649 hotels and more than 51,000 rooms across the UK. All

company’s hotels have a bar and restaurant, either inside the building, or next

to it offering a wide range of dishes. 372 of these restaurants are company’s

own brands: Beefeater, Brewers Fayre, Table Table and Taybarns;

- Costa (33% of total sales): Costa is an international coffee shops brand

represented in 29 countries (1,578 stores in the UK and 949 overseas). It

employs a multi–channel strategy, with equity stores, franchise stores and

joint ventures as well as a wholesale operation and Costa Express, which now

has 2,560 machines.

In 2013 Whitbread generated revenues of £2.0 bn and an EBIT of £0.38 bn.

THE RESTAURANT GROUP PLC

The Restaurant Group PLC operates over 400 restaurants and pub restaurants in

UK. Company’s principal brands are Frankie & Benny’s, Chiquito, Coast to Coast,

Garfunkel’s, Home Counties Pub Restaurants and Brunning & Price. They also

operate a concessions division which trades at over 50 outlets primarily in UK

airports. In 2012 the Restaurant Group PLC generated revenues of £533 mn and

an Adjusted EBITDA of £95.5 mn.



STATEMENT OF RISK

The travel concession business depends on traffic flows and on passengers’

freedom of movement. Events such as terrorism or wars may therefore cause

sudden and temporary business setbacks (particularly in the airport business), as

happened in the weeks following the terrorist attacks of September 11th 2001,

during which Autogrill in any case demonstrated flexibility in its cost structure and

the ability to achieve rapid margin recovery.

AGL stock might occasionally reflect the effects of the run-up to expiry (with the

possible risk of non-renewal) of major contracts.

Traffic flows are affected by GDP trend.



P&L 2011 2012 2013E 2014E 2015E 2016E

Revenues 4,024 4,074 4,027 4,025 4,189 4,306

Growth -29% 1% -1% 0% 4% 3%

Total opex -3,635 -3,746 -3,704 -3,695 -3,828 -3,919

Growth -29% 3% -1% 0% 4% 2%

Margin -90% -92% -92% -92% -91% -91%

EBITDA 389 328 323 330 361 387

Growth -36% -16% -1% 2% 9% 7%

Margin 10% 8% 8% 8% 9% 9%

Depreciation& amortization 193 225 210 215 215 215

Provisions na na na na na na

Depreciation&provistion 193 225 210 215 215 215

EBIT 196 103 113 115 146 172

Growth -23% -47% 10% 2% 27% 18%

Margin 5% 3% 3% 3% 3% 4%

Net financial profit/Expenses -47 -50 -50 -31 -27 -25

Profits/exp from equity inv na na na na na na

Other financial profit/Exp na na na na na na

Total financial expenses -47 -50 -50 -31 -27 -25

Non recurring pre tax -2 -2 -1 0 0 0


Growth -18% -65% 22% 36% 40% 25%

Taxes -66 -27 -28 -35 -46 -56

Tax rate 45% 53% 44% 41% 39% 38%

Minoritiy interests -10 -11 -11 -12 -12 -13

Non recurring post tax na na na na na na

Net income 71 11 24 38 60 79

Growth -31% -85% 114% 61% 59% 32%

Margin 2% 0% 1% 1% 1% 2%

Adj. net income 72 14 24 38 59 78

Growth -51% -80% 72% 56% 55% 32%

Margin 2% 0% 1% 1% 1% 2%

CF Statement 2011 2012 2013E 2014E 2015E 2016E

Cash Flow from Operations 252 251 246 264 287 307

(Increase) decrease in OWC -69 -17 0 -10 -10 -10

(Purchase of fixed assets) -185 -251 -180 -181 -189 -194

(Other net investments) n.a. n.a. n.a. n.a. n.a. n.a.

(Distribution of dividends) -61 -71 0 0 -11 -18

Rights issue n.a. n.a. n.a. n.a. n.a. n.a.

Other 1 66 227 -2 -2 -3

(Increase) Decrease in Net Debt -62 -22 293 72 75 82




INFORMATION PURSUANT TO ARTICLE 69 ET SEQ. OF CONSOB (Italian securities & exchange commission) REGULATION no. 11971/1999 This publication has been prepared by Stefano Lustig on behalf of EQUITA SIM SpA (licensed to practice by CONSOB resolution no. 11761 of December 22nd 1998 and registered as no. 67 in the Italian central register of investment service companies and financial intermediaries)

In the past EQUITA SIM has published studies on Autogrill

EQUITA SIM is distributing this publication via e-mail to more than 700 qualified operators today: Monday, 30 September 2013

The prices of the financial instruments shown in the report are the reference prices posted on the day before publication of the same.

EQUITA SIM intends to provide continuous coverage of the financial instrument forming the subject of the present publication, with a semi-annual frequency and, in any case, with a frequency consistent with the timing of the issuer’s periodical financial reporting and of any exceptional event occurring in the issuer’s sphere of activity. The information contained in this publication is based on sources believed to be reliable. Although EQUITA SIM makes every reasonable endeavour to obtain information from sources that it deems to be reliable, it accepts no responsibility or liability as to the completeness, accuracy or exactitude of such information. If there are doubts in this respect, EQUITA SIM clearly highlights this circumstance. The most important sources of information used are the issuer’s public corporate documentation (such as, for example, annual and interim reports, press releases, and presentations) besides information made available by financial service companies (such as, for example, Bloomberg and Reuters) and domestic and international business publications. It is EQUITA SIM’s practice to submit a pre-publication draft of its reports for review to the Investor Relations Department of the issuer forming the subject of the report, solely for the purpose of correcting any inadvertent material inaccuracies. This note has been submitted to the issuer. EQUITA SIM has adopted internal procedures able to assure the independence of its financial analysts and that establish appropriate rules of conduct for them.

Furthermore, it is pointed out that EQUITA SIM SpA is an intermediary licensed to provide all investment services as per Italian Legislative Decree no. 58/1998. Given this, EQUITA SIM might hold positions in and execute transactions concerning the financial instruments covered by the present publication, or could provide, or wish to provide, investment and/or related services to the issuers of the financial instruments covered by this publication. Consequently, it might have a potential conflict of interest concerning the issuers, financial issuers and transactions forming the subject of the present publication.

Equita SIM S.p.A. places or has placed in the last 12 months financial instruments issued by Atlantia S.p.A. Equita SIM S.p.A. provides, or has provided in the last 12 months, corporate finance services to Atlantia S.p.A. or to a company of the same group Equita SIM S.p.A. performs the role of market maker for financial instruments whose underlying assets are shares issued by Atlantia

In addition, it is also pointed out that, within the constraints of current internal procedures, EQUITA SIM’s directors, employees and/or outside professionals might hold long or short positions in the financial instruments covered by this publication and buy or sell them at any time, both on their own account and that of third parties.

The remuneration of the financial analysts who have produced the publication is not directly linked to corporate finance transactions undertaken by EQUITA SIM.

The recommendations to BUY, HOLD and REDUCE are based on Expected Total Return (ETR – expected absolute performance in the next 12 months inclusive of the dividend paid out by the stock’s issuer) and on the degree of risk associated with the stock, as per the matrix shown in the table. The level of risk is based on the stock’s liquidity and volatility and on the analyst’s opinion of the business model of the company being analysed. Due to fluctuations of the stock, the ETR might temporarily fall outside the ranges shown in the table.

EXPECTED TOTAL RETURN FOR THE VARIOUS CATEGORIES OF RECOMMENDATION AND RISK PROFILE

RECOMMENDATION/RATING Low Risk Medium Risk High Risk

BUY ETR >= 10% ETR >= 15% ETR >= 20%

HOLD -5% <ETR< 10% -5% <ETR< 15% 0% <ETR< 20%

REDUCE ETR <= -5% ETR <= -5% ETR <= 0%

The methods preferred by EQUITA SIM to evaluate and set a value on the stocks forming the subject of the publication, and therefore the Expected Total Return in 12 months, are those most commonly used in market practice, i.e. multiples comparison (comparison with market ratios, e.g. P/E, EV/EBITDA, and others, expressed by stocks belonging to the same or similar sectors), or classical financial methods such as discounted cash flow (DCF) models, or others based on similar concepts. For financial stocks, EQUITA SIM also uses valuation methods based on comparison of ROE (ROEV – return on embedded value – in the case of insurance companies), cost of capital and P/BV (P/EV – ratio of price to embedded value – in the case of insurance companies).

MOST RECENT CHANGES IN RECOMMENDATION AND/OR IN TARGET PRICE (OLD ONES IN BRACKETS):

Date Rec. Target Price (€) Risk Comment

1 February 2013 HOLD (HOLD) 10.0 (9.0) Low Change in estimates and valuation

9 November 2012 HOLD (BUY) 9.0 (8.5) Low Change in upside/downside potential because of stock performance

DISCLAIMER The purpose of this publication is merely to provide information that is up to date and as accurate as possible. The publication does not represent to be, nor can it be construed as being, an offer or solicitation to buy, subscribe or sell financial products or instruments, or to execute any operation whatsoever concerning such products or instruments. EQUITA SIM does not guarantee any specific result as regards the information contained in the present publication, and accepts no responsibility or liability for the outcome of the transactions recommended therein or for the results produced by such transactions. Each and every investment/divestiture decision is the sole responsibility of the party receiving the advice and recommendations, who is free to decide whether or not to implement them. Therefore, EQUITA SIM and/or the author of the present publication cannot in any way be held liable for any losses, damage or lower earnings that the party using the publication might suffer following execution of transactions on the basis of the information and/or recommendations contained therein. The estimates and opinions expressed in the publication may be subject to change without notice.

EQUITY RATING DISPERSION AS OF JUNE 30, 2013 (art. 69-quinquies c. 2 lett. B e c. 3 reg. Consob 11971/99)

COMPANIES COVERED COMPANIES COVERED WITH BANKING RELATIONSHIP

BUY 40.5% 41.2%

HOLD 50.9% 52.9%

REDUCE 8.7% 5.9%

NOT RATED 0.0% 0.0%

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