ESN Analyser Investment Research - Zonavalue Club · 2017-05-15 · ESN Analyser Investment...

ESN Analyser

Investment Research

of 60

Produced & Distributed by the Members of ESN (see last page of this report)

ESN Analyser

Investment Research

25 October 2016

ESN Daily Open Slot TODAY at 11.00 am CET José Mota Freitas (CaixaBI) will provide an update on Sonae Capital through the ESN Daily Open Slot. All interested people have to contact their reference sales person for the phone number and details for the call.

ESN Top Picks

Roadshows

Corporate Events

Tactical Sector Views

RECOMMENDATION CHANGES

IOL Initiation of Coverage: Buy Making Italian SMEs digital

Uponor upgraded to Buy from Accumulate Q3 preview: Growth potential from Europe

Lemminkäinen upgraded to Accumulate from Neutral Q3 preview: Strong H2 expected

Atria downgraded to Accumulate from Buy Q3 preview: Recommendation downgraded to Accumulate after recent share price rise

Kesko upgraded to Neutral from Reduce Q3 preview: Cash flow outlook improved

NEWS BY SECTOR

AEROSPACE & DEFENSE

Safran (Neutral) Q3-2016 revenues: weak but Safran had warned us

AUTOMOBILES & PARTS

Fiat Chrysler Automobiles (Buy) Q3 results: we expect Adj. EBIT and NID to have grown

Sogefi (Buy) Q3 results beat our estimates

BANKS

Banca MPS (Rating Suspended) New 3Y business plan

Banca MPS (Rating Suspended) Disposal of merchant acquiring business

Banco Santander (Buy) Preview 3Q’16e : Net Income EUR1.5bn (-10.7% Y/Y)

Bankia (Accumulate) Preview 3Q’16e: low CoR >0.30% (release date 26.10.16)

BASIC RESOURCES

Ence (Buy) 3Q’16 results preview

The Navigator Company (Buy) 3Q16 results: pricing impact

CHEMICALS

Air Liquide (Neutral) Business buoyed by recurring activities and Airgas

Kemira (Accumulate) Q3 results clearly weaker than expected

Tikkurila (Neutral) Q3 preview: Volumes on the rise, support for the East segment from RUB appreciation

ESN Analyser

Investment Research

of 60


FINANCIAL SERVICES

Corp. Financiera ALBA (Buy) EUR0.50/share DPS

FOOD & BEVERAGE

Atria (Accumulate) Q3 preview: Recommendation downgraded to Accumulate after recent share price rise

Olvi (Neutral) Q3 preview: Pace is likely to clearly slow down compared to Q2

Wessanen (Neutral) A stronger-than-expected temporary deceleration

FOOD & DRUG RETAILERS

DIA (Buy) Good results, positive LFL trend consolidating

Kesko (Neutral) Q3 preview: Cash flow outlook improved

INDUSTRIAL ENGINEERING

Datalogic (Accumulate) Q3 16 preliminary sales: continuous good trend in ADC

Wärtsilä (Neutral) Error! No text of specified style in document.

INSURANCE

Generali (Accumulate) Generali suspends the investment in Cajamar

Talanx Group (Accumulate) Interview with CEO in the “Börsenzeitung”

MATERIALS, CONSTRUCTION & INFRASTRUCTURE

Caverion (Neutral) Q3 preview: Fifth (and final) profit warning on the table

Cramo (Neutral) Q3 preview: Calmer but still robust growth

Fcc (Accumulate) CPV 9m results. Strong provisions

Lemminkäinen (Accumulate) Q3 preview: Strong H2 expected

Saint Gobain (Buy) Less strong momentum expected in Q3

Uponor (Buy) Q3 preview: Growth potential from Europe

YIT (Buy) Q3 preview: Russia staging a return to share valuation

MEDIA

Alma Media (Neutral) Q3 preview: Good Q3 results in the cards

IOL (Buy) Making Italian SMEs digital

OIL SERVICES

CGG (Buy) Major contract won in offshore Mexico

Saipem (Accumulate) Decent results expected in Q3

PERSONAL GOODS

Interparfums (Buy) Good Q3 sales figures

Luxottica (Accumulate) 9M 16 sales, in line with our estimates; Price Target from EUR 50/sh to EUR 48.3/sh

Tod's (Neutral) 9M 16 sales, in line

SOFTWARE & COMPUTER SERVICES

Altran (Buy) New acquisition in Germany improves the region’s outlook

Tieto (Neutral) Q3 results

ESN Analyser

Investment Research

of 60


TECHNOLOGY HARDWARE & EQUIPMENT

Nokia (Buy) Q3 preview: Worries about Ericsson's indication for Nokia exaggerated

STMicroelectronics (Neutral) STM said in search for a new CEO

Teleste (Neutral) Q3 preview: Focus on the profitability of Network Services

TELECOMMUNICATIONS

Deutsche Telekom (Neutral) Good results from T-Mobile US

Tiscali (Neutral) First fibre deal in Sardegna

TRAVEL & LEISURE

Sector News SPAIN: September hotel data

Int. Airlines Group (Buy) 3Q’16 results preview

NH Hotel Group (Buy) HNA: new investment

UTILITIES

Snam (Neutral) Capital market day

ESN Top Picks

of 60


Blue Chips Top Picks

Compa ny Count r y S e c t or I de a Ra t i ngP r i c e a s of

2 4 / 10 / 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y

pr i c e

( D i v .

Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s Eur o

S t ox x

AM ADEUS Spain Sof t ware & Comput er Services Long Buy 43.64 49.20 13% 18/ 08/ 2016 41.96 41.96 4 . 0 % 0.7%

CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 65.05 76.00 17% 17/ 10/ 2016 66.30 66.30 - 1. 9 % -4.0%

HEI NEKEN Net herlands Food & Beverage Long Buy 79.17 100.00 26% 25/ 05/ 2016 83.08 82.56 - 4 . 1% -7.4%

I NDI TEX Spain General Ret ailers Long Accumulat e 32.93 36.10 10% 18/ 08/ 2016 30.93 30.93 6 . 5 % 3.2%

J CDECAUX France Media Long Accumulat e 27.37 31.00 13% 17/ 10/ 2016 28.16 28.16 - 2 . 8 % -4.9%

KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.83 3.55 26% 20/ 09/ 2016 2.82 2.82 0 . 1% -3.3%

NORDEA Finland Banks Long Accumulat e 9.57 10.00 4% 03/ 08/ 2016 7.78 7.78 2 3 . 0 % 16.9%

S TORA ENS O Finland Basic Resources Long Accumulat e 8.07 9.10 13% 17/ 10/ 2016 8.16 8.16 - 1. 0 % -3.1%

TECHNI P France Oil Services Long Buy 60.53 67.00 11% 18/ 10/ 2016 58.60 58.60 3 . 3 % 0.8% source: ESN Members’ estimates

M/S Caps Top Picks

Compa ny Count r y S e c t or I de a Ra t i ngP r i c e a s of

2 4 / 10 / 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y pr i c e

( D i v . Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s

Eur o

S t ox x

ACERI NOX Spain Basic Resources Long Buy 11.74 14.00 19% 18/ 08/ 2016 11.71 11.71 0 . 2 % -3.1%

ALTRAN France Sof t ware & Comput er Services Long Buy 13.58 15.00 10% 17/ 10/ 2016 13.20 13.20 2 . 9 % 0.8%

CAF Spain Indust r ial Transport at ion Long Accumulat e 350.00 390.00 11% 18/ 08/ 2016 342.80 342.80 2 . 1% -1.2%

DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.37 12.30 31% 22/ 08/ 2016 8.10 8.10 15 . 7 % 12.3%

FORFARM ERS Net herlands Food & Beverage Long Buy 6.78 8.30 22% 28/ 09/ 2016 6.48 6.48 4 . 7 % 1.3%

FUGRO Net herlands Oil Services Long Buy 16.69 19.00 14% 20/ 10/ 2016 15.56 15.56 7 . 3 % 6.4%

J UM BO Greece General Ret ailers Long Buy 12.85 14.99 17% 21/ 10/ 2016 12.62 12.62 1. 8 % 1.3%

NH HOTEL GROUP Spain Travel & Leisure Long Buy 4.16 6.80 64% 18/ 08/ 2016 4.00 4.00 3 . 9 % 0.6%

NOS Port ugal Telecommunicat ions Long Buy 6.08 7.00 15% 17/ 10/ 2016 5.89 5.89 3 . 2 % 1.1%

OP AP Greece Travel & Leisure Long Buy 7.75 9.60 24% 28/ 06/ 2016 5.98 5.86 3 2 . 3 % 17.1%

RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 12.06 12.00 0% 20/ 06/ 2016 8.29 8.29 4 5 . 4 % 36.5%

TECHNOGYM It aly Personal Goods Long Buy 4.16 4.95 19% 15/ 06/ 2016 3.78 3.78 10 . 2 % -0.3%

THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.67 4.60 72% 22/ 06/ 2016 2.72 2.72 - 1. 7 % -6.6%

YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 28.70 31.30 9% 17/ 10/ 2016 27.82 27.82 3 . 2 % 1.1%

source: ESN Members’ estimates

This selection of stocks is not intended to provide a recommended portfolio; therefore there is no point in comparing its performance with any benchmark. The performance of each stock has to be considered independently. Risk factors are taken into account when selecting individual stocks but the risk profile of the selection as a whole is not considered. The approach used to select each investment idea is opportunistic with an absolute return target.

Roadshows

of 60


SUBJECT LOCATION EVENT DATE

TECHNOGYM Helsinki Cross-country Company Roadshow 26/10/2016

TECHNOGYM Amsterdam Cross-country Company Roadshow 27/10/2016

EDENRED Geneva Cross-country Company Roadshow 09/11/2016

EDENRED Zurich Cross-country Company Roadshow 10/11/2016

Corporate Events

of 60


Corporate Events today

Source: Precise

CompanyBloomberg

codeDate Event Type Description

AENA AENA SM 25/10/16 Results Q3 2016 Results

AIR LIQUIDE AI FP 25/10/16 Trading Update Q3 2016 Sales conference call / Webcast

AI FP 25/10/16 Trading Update Q3 2016 Sales

CARGOTEC CORP CGCBV FH 25/10/16 Results Q3 2016 Results

CGCBV FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast {simultaneous}

DIA DIA SM 25/10/16 Results Q3 2016 Webcast

DIA SM 25/10/16 Results Q3 2016 Results

EXEL COMPOSITES EXL1V FH 25/10/16 Results Q3 2016 Results

FIAT CHRYSLER AUTOMOBILESFCA IM 25/10/16 Results Q3 2016 Results

FORTUM FUM1V FH 25/10/16 Results Q3 2016 Results

FUM1V FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast

FUM1V FH 25/10/16 Results Q3 2016 Press conference / Webcast

INTERPARFUMS ITP FP 25/10/16 Trading Update Q3 2016 Sales

KEMIRA KEMIRA FH 25/10/16 Results Q3 2016 Earnings conference call {simultaneous}

KEMIRA FH 25/10/16 Results Q3 2016 Press conference / Webcast

KEMIRA FH 25/10/16 Results Q3 2016 Results

KERING KER FP 25/10/16 Trading Update Q3 2016 Sales

NESTE CORPORATION NESTE FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast

NESTE FH 25/10/16 Results Q3 2016 Press conference

NESTE FH 25/10/16 Results Q3 2016 Results

SAIPEM SPM IM 25/10/16 Results Q3 2016 Results

SPM IM 25/10/16 Results Q3 2016 Earnings conference call / Webcast

SEB SA SK FP 25/10/16 Trading Update Q3 2016 Sales

STORA ENSO STERV FH 25/10/16 Results Q3 2016 Results

STERV FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast

TIETO TIE1V FH 25/10/16 Results Q3 2016 Results

TIE1V FH 25/10/16 Results Q3 2016 Press conference

TIE1V FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast {simultaneous}

UPM-KYMMENE UPM1V FH 25/10/16 Results Q3 2016 Press conference {invitation only}

UPM1V FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast

UPM1V FH 25/10/16 Results Q3 2016 Results

VINCI DG FP 25/10/16 Trading Update Q3 2016 Sales

WESSANEN WES NA 25/10/16 Trading Update Q3 2016 Trading statement conference call / Webcast

WES NA 25/10/16 Trading Update Q3 2016 Trading statement

WÄRTSILÄ WRT1V FH 25/10/16 Analyst Meeting Q3 2016 Press & analyst meeting

WRT1V FH 25/10/16 Results Q3 2016 Earnings conference call / Webcast {simultaneous}

WRT1V FH 25/10/16 Results Q3 2016 Results

ESN Tactical Sector Views

of 60


Tactical Sector Allocation Matrix July 2016

SectorCurrent Tactical

ViewAction

Previous

Tactical View

Stoxx 600

Weighting

LATEST REVIEW

DATE

Automobiles & Parts + upgrade = 3% Jul-16

Banks - - 10% Jul-16

Basic Resources = = 2% Jul-16

Chemicals = = 5% Jul-16

Construction & Materials + + 3% Jul-16

Financial Services - dow ngrade = 2% Jul-16

Food & Beverage + + 7% Jul-16

Healthcare + upgrade = 14% Jul-16

Industrial Good & Services + upgrade = 11% Jul-16

Insurance - dow ngrade + 6% Jul-16

Media - dow ngrade = 3% Jul-16

Oil & Gas = = 5% Jul-16

Personal & Household Goods + + 9% Jul-16

Real Estate + upgrade - 2% Jul-16

Retail - dow ngrade = 3% Jul-16

Technology + upgrade = 4% Jul-16

Telecommunications = dow ngrade + 5% Jul-16

Travel & Leisure + + 2% Jul-16

Utilities + upgrade - 4% Jul-16

Legend: + (Overw eight); =/+ (Slightly Overw eight); = (Market Weight); =/- (Slightly Underw eight); - (Underw eight);

Note: The tactical sector view is the shorter term trading view of the ESN strategy team and it can vary from the longer term

fundamental view of the relevant ESN sector analyst team

of 60


Safran

France/Aerospace & Defense Analyser

AEROSPACE & DEFENSE

Safran (Neutral) Q3-2016 revenues: weak but Safran had warned us

Q3-2016 revenues: weak but Safran had warned us

The facts: 9m-2016 revenues of EUR12,923m +3.0%, of which organic +4.1%.

Q3-2016 revenues of EUR3,987m, -3.7%, of which organic -0.7%, and scope -3%

(deconsolidation of Aerospace Propulsion assets which are going to ASL).

Propulsion: EUR2,056m, organic growth -2.3%, reported -7.4%

> deconsolidation of aerospace activities, which are reconsolidated by the

equity method.

Equipment: EUR1,208m, organic growth +3%, reported +2.4% > better than

expected

Defence: EUR253m, organic growth -4.5%, reported -4.9%.

Security: EUR470m, organic growth -0.2%, reported -0.8%.

Our analysis: Safran has maintained its annual guidance (previously revenues

+2% to +4%) but due to the change in scope has adjusted it in consequence:

Reported 2016 revenues should grow by +1%, adjusted 2016 underlying EBIT

should increase by +5%, including the stake in ASL which comes at this level but

more in revenues (favourable impact in the underlying EBIT/revenues margin

percentage). There are small adjustments to guidance relative to the

deconsolidation of Security, which has resulted in a decline in R&D of

EUR100/150m and in investments which will come out at less than EUR800m.

Conclusion & Action: Industrial and financial projects cannot be seen in

revenues but are positive: The sale of Security to be finalised in 2017, LEAP in

service for two airlines, Rafale contract in India (already factored into the 2016

guidance for FCF after WCR).

Our assumption of a dividend with the money from Security is correct. It is the first

thing that the CEO mentioned in response to a question.

No reason to see the share rise on the back of this publication of minor

importance, especially as the year will be in the lower range of guidance. Wait for

2017, as the share price is in line with our valuation on the left.

Analyst(s):

Agnès Blazy, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 67

Neutral

64.07

closing price as of 24/10/2016

64.57

Target Price unchanged

Recommendation unchanged

Target price: EUR

Share price: EUR

Reuters/Bloomberg SAF.PA/SAF FP

Market capitalisation (EURm) 26,719

Current N° of shares (m) 417

Free float 63%

Daily avg. no. trad. sh. 12 mth 1,155

Daily avg. trad. vol. 12 mth (m) 47,670

Price high 12 mth (EUR) 70.54

Price low 12 mth (EUR) 49.15

Abs. perf. 1 mth -1.49%

Abs. perf. 3 mth 5.29%


Key financials (EUR) 12/15 12/16e 12/17e

Sales (m) 18,100 18,105 18,629

EBITDA (m) 3,595 3,604 3,661

EBITDA margin 19.9% 19.9% 19.6%

EBIT (m) 2,453 2,562 2,722

EBIT margin 13.6% 14.2% 14.6%

Net Profit (adj.)(m) 1,482 1,690 1,795

ROCE 23.4% 19.9% 17.3%

Net debt/(cash) (m) 783 1,080 1,360

Net Debt/Equity 0.1 0.2 0.2

Debt/EBITDA 0.2 0.3 0.4

Int. cover(EBITDA/Fin. int) 128.4 184.1 135.6

EV/Sales 1.4 1.4 1.4

EV/EBITDA 7.2 7.2 7.1

EV/EBITDA (adj.) 6.5 7.2 7.3

EV/EBIT 10.5 10.1 9.6

P/E (adj.) 17.8 15.8 14.9

P/BV 4.7 4.0 3.4

OpFCF yield 3.7% 3.5% 3.8%

Dividend yield 2.2% 2.5% 2.7%

EPS (adj.) 3.55 4.05 4.30

BVPS 13.49 16.16 18.85

DPS 1.38 1.62 1.72

45

50

55

60

65

70

75

Sep 15 Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16

vvdsvdvsdy

SAFRAN Stoxx Aerospace & Defense (Rebased)Source: Factset

Shareholders: State 22%; Employees 14%; Treasury

stock 0.14%;

of 60


Fiat Chrysler Automobiles

Italy/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Fiat Chrysler Automobiles (Buy) Q3-2016 revenues: weak but Safran had warned us

Q3 results: we expect Adj. EBIT and NID to have grown

The facts: FCA is due to release its Q3 2016 results today around noon; a

conference call has been set at 02.30 PM CET (Italy: +39 02 3626 9650; UK: +44

(0)20 3427 1907; US: +1 212 444 0412; access code: 3851878).

We expect Q3 results to be strong thanks to higher volumes and a better

mix; Net Debt is expected to have grown Q/Q, following the usual

seasonality.

Our analysis: we see mass-market operations' volumes to have grown to ~1.17m

vehicles (~+1.6% Y/Y) with NAFTA sales down ~1% Y/Y, LAT AM down ~18%

Y/Y, APAC down ~20% Y/Y (~+100% Y/Y when including the locally-built

vehicles) and EMEA up ~12% Y/Y; we do not expect any material FOREX impact

on the top line.

(EUR m) Q3 16e Q3 15 (*) Δ% Y/Y 9M 16e 9M 15 (*) Δ% Y/Y

Revenues 28,364 26,745 6.1% 82,827 80,982 2.3%

EBIT Adj. 1,510 1,163 29.8% 4,517 3,083 46.5%

EBIT Adj. Margin 5.3% 4.3%

5.4% 3.8%

Adjustments 0 (943) n.m. (640) (1,128) -43.3%

EBIT 1,510 220 586% 3,877 1,955 98.3%

Financial expenses (495) (621) -20.3% (1,498) (1,752) -14.5%

Result before taxes 1,015 542 87.3% 2,379 1,331 78.7%

Income taxes (406) 9 n.m. (971) (402) 142%

Tax rate -40.0% 1.7%

-40.8% -30.2%

Minority Interest 0 0 n.m. 0 83 n.m.

Net result 609 551 10.5% 1,408 1,012 39.2%

* Adjusted for the Ferrari spin-off

We expect Q3 revenues to have improved by ~6% Y/Y mainly thanks to better

mix; we see Adj. EBIT to have reached ~EUR 1,51bn including a ~EUR 0.2bn

provision for the recall of ~1.9m vehicles in September; we see financial

charges to have come in at ~EUR 0.5bn or less thanks to a lower average debt

and lower interest rates (FCA recalled 2 Chrysler LLC notes carrying a coupon of

8 and 8¼ %); we expect net income to have hit EUR 609m.

We estimate that Net Industrial Debt (~EUR 5.5bn as at the end of June 2016)

hit ~EUR 6.7bn as at the end of September, following the normal seasonality of

the working capital.

Conclusion & Action. As usual, we will pay particular attention to the Adj. EBIT

performance; the Net Industrial Debt is not expected to have improved, but we

expect it to fall below the EUR 5bn mark by the end of the year, as per the

guidance. Estimates, rating and target price confirmed.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Buy

5.90


10.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg FCHA.MI/FCA IM


Current N° of shares (m) 1,507

Free float 59%









Sales (m) 113,191 114,438 118,506

EBITDA (m) 9,059 12,044 13,439

EBITDA margin 8.0% 10.5% 11.3%

EBIT (m) 3,098 5,764 6,860

EBIT margin 2.7% 5.0% 5.8%

Net Profit (adj.)(m) 1,787 2,699 3,279

ROCE 7.4% 8.7% 8.9%

Net debt/(cash) (m) 5,910 4,700 3,300




EV/Sales 0.2 0.2 0.1

EV/EBITDA 2.6 1.5 1.3

EV/EBITDA (adj.) 2.1 1.4 1.3

EV/EBIT 7.7 3.2 2.5

P/E (adj.) 7.2 3.3 2.7

P/BV 0.8 0.5 0.4

OpFCF yield -24.1% -1.2% 15.8%


EPS (adj.) 1.19 1.79 2.18

BVPS 10.68 12.19 14.37

DPS 0.00 0.00 0.00

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

set 15 ott 15 nov 15 dic 15 gen 16 feb 16 mar 16 apr 16 mag 16 giu 16 lug 16 ago 16 set 16 ott 16

vvdsvdvsdy

FIAT CHRYSLER AUTOMOBILES Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: EXOR 29%; Baillie Gifford & Co 10%;

Harris & Associates 2%;

of 60


Sogefi

Italy/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Sogefi (Buy) Q3 results: we expect Adj. EBIT and NID to have grown

Q3 results beat our estimates

The facts: Yesterday, Sogefi released better-than-expected Q3 results. The

management is due to hold a c. call this morning at 09.00 a.m. CET (Italy: +39 02

805 88 11; UK: +44 1 212 818 003; France: +33 1 709 187 03).

Our analysis: Here are Q3 results and our estimates.

EUR m Q3 16 Q3 15 Δ% Y/Y Q3 16e 9M 16

Revenues 383.0 362.9 5.5% 375.3 1,182

Contribution margin 111.1 100.9 10.1% 107.0 339.7

As a % of revenues 29.0% 27.8%

28.5% 28.8%

Operating Profit 26.6 22.9 16.2% 22.6 84.2


6.0% 7.1%

Restructuring costs (1.0) (2.0) -50.0% (2.0) (4.0)

Exchange rate gains/(losses) (0.7) (2.5) -44.0% 0.0 (0.1)

Other non-operating (exp.)/inc. (2.8) (5.7) -50.9% (1.8) (21.4)

EBIT 22.1 12.7 74.0% 18.7 58.7


5.0% 5.0%

Financial exp./(inc.) net (5.7) (8.9) -36.0% (9.0) (22.6)

Gains/(Losses) from equity inv. 4.0 0.0 n.m. 0.0 3.6

Profit bef. Tax/min. Int. 20.4 3.8 436.8% 9.7 39.7

Income taxes (12.1) (5.3) 128.3% (3.9) (20.6)

Minorities (0.9) (0.8) 8.9% (1.0) (3.4)

Group Net Profit 7.4 (2.3) n.m. 4.8 15.7

Revenues (better than expected) posted a 10.2% Y/Y organic growth; revenues

in Europe grew organically ~3% Y/Y, ~20% Y/Y in North America, ~23% Y/Y in

Latin America and ~36% Y/Y in Asia. The contribution margin beat our

assumptions reaching 29.0% (-0.2 p.ps Q/Q); EBIT beat our estimates also

thanks to lower restructuring and other non-operating costs. Net profit beat our

estimates also thanks to lower financial charges, higher gains from equity

participations and despite higher-than-expected taxes.

The NFP (EUR 326m as at the end of June) improved to EUR 314m, better than

expected; Sogefi stressed that year-to-date the FCF was positive by EUR

12.3mvis à vis EUR -44.3m a year ago; the Δ is attributable to lower extraordinary

cash-outs (EUR 26.6m) and a better operating cash flow (EUR 33m).

For 2016, Sogefi foresees a top line growth in line with the first 9 months of the

year (reported growth: +4.9% Y/Y; organic growth: +10.2% Y/Y); even gross

margin and EBITDA are expected to move in line with the 9M trend.

Conclusion & Action: Q3 results beat our estimates, thanks to a better

contribution margin and some non-operating aspects; all in all, we deem the

quality of Q3 results decent. We will wait the c. call before possibly tuning our

estimates, anyway we stress that by assuming a 0.5 p.ps improvement in our

FY16 contribution margin assumption (to 29.0%), we draw a ~EUR 5m

improvement in our FY16 EBITDA estimate (~+4%). Buy confirmed.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Buy

1.84


2.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg SGFI.MI/SO IM

Market capitalisation (EURm) 215


Free float 36%

Daily avg. no. trad. sh. 12 mth 318

Daily avg. trad. vol. 12 mth (m) 913







Sales (m) 1,499 1,559 1,621

EBITDA (m) 116 140 158


EBIT (m) 51 70 87

EBIT margin 3.4% 4.5% 5.4%

Net Profit (adj.)(m) 8 22 32

ROCE 4.0% 8.9% 10.5%

Net debt/(cash) (m) 322 322 317




EV/Sales 0.4 0.3 0.3

EV/EBITDA 5.1 3.8 3.4

EV/EBITDA (adj.) 4.3 3.6 3.2

EV/EBIT 11.6 7.7 6.1

P/E (adj.) 33.6 9.8 6.6

P/BV 1.5 1.1 1.0

OpFCF yield -4.2% 0.9% 7.9%


EPS (adj.) 0.06 0.19 0.28

BVPS 1.46 1.61 1.77

DPS 0.00 0.07 0.00

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6


vvdsvdvsdy

SOGEFI Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: CIR 56%; JP MORGAN AM 5%; Giovanni

Germano 3%;

of 60


Banca MPS

Italy/Banks Analyser

BANKS

Banca MPS (Rating Suspended) Q3 results beat our estimates

New 3Y business plan

The facts: Banca MPS published this morning its new 3Y business plan, due to

be presented in an Analyst meeting hold in Milan at 8.30am CET.

Our analysis: The main business plan targets are summarized in the following

tables:

The plan targets a remix of the loan book towards retail and small business

clients, while the exposure to corporate and other loans will be reduced. In

parallel, the cure rate of NPL should be enhanced, in order to cut the cost of risk

to just 55bps in 2019. At the operating level, the better credit rating after the EUR

5bn capital increase is expected to add EUR 0.4 bn to the NII, while 2,600 staff

will be cut and 500 branches closed in order to cut costs.

Conclusion & Action: the EUR 5bn capital increase, or 5x current market cap,

will heavily dilute current shareholders. Our rating remains suspended.

Analyst(s):

Luigi Tramontana, Banca Akros

[email protected]

+39 02 4344 4239

Rating Suspended

0.35



Share price: EUR

Reuters/Bloomberg BMPS.MI/BMPS IM



Free float 90%









Total Revenue (m) 5,216 4,365 4,304

Pre-Provision Profit (PPP) (m) 2,327 1,609 1,650

Operating profit (OP) 336 -3,106 650

Earnings Before Tax (m) 439 -3,106 650

Net Profit (adj.) (m) 294 -3,140 496

Shareholders Equity (m) 9,596 7,388 7,884

Tangible BV (m) 9,588 7,380 7,876

RWA (m) 70,828 68,148 67,584

ROTE 3.8% -37.0% 6.5%

Total Capital Ratio (B3) 16.0% 13.3% 14.2%

Cost/Income 50.4% 58.6% 58.4%

NPL ratio (gross) 16.3% 21.8% 22.5%

P/PPP 1.6 0.6 0.6

P/E (adj.) 12.3 nm 2.1

P/BV 0.4 0.1 0.1

P/TBV 0.4 0.1 0.1

Dividend Yield 0.0% 0.0% 0.0%

PPPPS 0.79 0.55 0.56

EPS (adj.) 0.10 -1.07 0.17

BVPS 3.27 2.52 2.69

TBVPS 3.27 2.52 2.69

DPS 0.00 0.00 0.00

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8


vvdsvdvsdy

BANCA MPS Stoxx Banks (Rebased)Source: Factset

Shareholders: Fintech Advisory 2%; Axa 3%; Italian

Government 4%;

of 60


Banca MPS

Italy/Banks Analyser

BANKS

Banca MPS (Rating Suspended) New 3Y business plan Rating Suspended

0.35



Share price: EUR

Reuters/Bloomberg BMPS.MI/BMPS IM



Free float 90%









Total Revenue (m) 5,216 4,365 4,304


Operating profit (OP) 336 -3,106 650

Earnings Before Tax (m) 439 -3,106 650

Net Profit (adj.) (m) 294 -3,140 496


Tangible BV (m) 9,588 7,380 7,876

RWA (m) 70,828 68,148 67,584

ROTE 3.8% -37.0% 6.5%


Cost/Income 50.4% 58.6% 58.4%

NPL ratio (gross) 16.3% 21.8% 22.5%

P/PPP 1.6 0.6 0.6

P/E (adj.) 12.3 nm 2.1

P/BV 0.4 0.1 0.1

P/TBV 0.4 0.1 0.1


PPPPS 0.79 0.55 0.56

EPS (adj.) 0.10 -1.07 0.17

BVPS 3.27 2.52 2.69

TBVPS 3.27 2.52 2.69

DPS 0.00 0.00 0.00

Disposal of merchant acquiring business

The facts: To further strengthen the CET1, on October 21 2016 BMPS received

an offer from Istituto Centrale delle Banche Popolari Italiane S.p.A. (“ICBPI”) for

the potential acquisition of BMPS’ Merchant Acquiring business activities for a

total consideration of Euro 520m and a proposal for a commercial partnership in

this business. The offer is subject to the negotiation and execution of the relevant

contractual documentation and to the authorization from relevant authorities. The

Board of Directors has taken note of the proposal and has resolved to perform the

necessary analyses and, to this extent, has agreed to grant ICBPI with an

exclusivity period until December 31 2016 in order to perform the described

activities.

Our analysis: The disposal of this payment business would be in line with BMPS

enhanced strategic focus on core activities, while strengthening capital in parallel.

Conclusion & Action: A positive news for the stock. Our rating remains

suspended.

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8


vvdsvdvsdy

BANCA MPS Stoxx Banks (Rebased)Source: Factset Shareholders: Fintech Advisory 2%; Axa 3%; Italian

Government 4%;

Analyst(s):

Luigi Tramontana, Banca Akros

[email protected]

+39 02 4344 4239

of 60


Banco Santander

Spain/Banks Analyser

BANKS

Banco Santander (Buy) Disposal of merchant acquiring business

Preview 3Q’16e : Net Income EUR1.5bn (-10.7% Y/Y)

The facts: Banco Santander will release 3Q’16 results tomorrow (26.10.16)

Our analysis: We estimate net profit EUR1.5bn for 3Q, -10.7% below 3Q’15. The

quarterly result will allow the YTD figure to reach EUR4.8bn which implies almost

80% of our 2016 forecasts (EUR6.111bn)

Consensus

Conclusion: Recommendation reiterated.

Analyst(s):

Javier Bernat, GVC Gaesco Beka

[email protected]

+34 91 436 7816

Buy

4.49


5.13



Target price: EUR

Share price: EUR

Reuters/Bloomberg SAN.MC/SAN SM



Free float 99%









Total Revenue (m) 45,272 43,909 43,486


Operating profit (OP) 13,594 13,391 13,092

Earnings Before Tax (m) 10,339 10,424 11,029

Net Profit (adj.) (m) 6,566 6,011 6,316


Tangible BV (m) 61,080 65,467 69,516

RWA (m) 592,781 626,878 655,495

ROTE 11.0% 9.5% 9.4%


Cost/Income 47.6% 48.8% 49.3%

NPL ratio (gross) 4.9% 4.1% 3.5%

P/PPP 2.7 2.9 2.9

P/E (adj.) 9.8 10.8 10.3

P/BV 0.7 0.7 0.7

P/TBV 1.1 1.0 0.9


PPPPS 1.68 1.56 1.53

EPS (adj.) 0.46 0.42 0.44

BVPS 6.25 6.35 6.63

TBVPS 4.32 4.54 4.82

DPS 0.15 0.17 0.15

B SANTANDER (EURm) 9m16E y/y 3Q16E 3Q15 y/y q/q 2Q16 1Q16

NII 23,282 (4.2)% 7,675 7,983 (3.9)% 1.4% 7,570 7,624

GOP 33,111 (3.7)% 11,065 11,316 (2.2)% 1.2% 10,930 10,730

PPP 17,270 (5.3)% 5,724 5,973 (4.2)% 0.4% 5,703 5,572

PBT 8,116 (7.4)% 2,606 2,778 (6.2)% (11.8)% 2,954 2,732

Net income 4,814 (5.7)% 1,500 1,680 (10.7)% (8.9)% 1,646 1,634

EPS 0.334 (5.7)% 0.104 0.117 (11.4)% (8.9)% 0.114 0.113

Estimates GVC Gaesco Beka

EURm 3T16 Y/Y Q/Q

NII 7,702 (3.5)% 1.7%

Net Income 1,546 (8.0)% 21.0%

Source Thomsonreuters

3.0

3.5

4.0

4.5

5.0

5.5


vvdsvdvsdy

BANCO SANTANDER Stoxx Banks (Rebased)Source: Factset

Shareholders: Botin family 1.05%;

of 60


Bankia

Spain/Banks Analyser

BANKS

Bankia (Accumulate) Preview 3Q’16e : Net Income EUR1.5bn (-10.7% Y/Y)

Preview 3Q’16e: low CoR >0.30% (release date 26.10.16)

The facts: Bankia will release 3Q’16 results tomorrow 26th of October (CC@

12:30 CET).

Our analysis: We estimate (excluding CNB, bank in Florida sold in 2015) a net

profit of EUR243m, -14.5% below 3Q’15. At 9m’16, we estimate net profit

EUR773m, -4.8% vs. 9m’15.

Consensus


Analyst(s):


[email protected]

+34 91 436 7816

Accumulate

0.81


0.91



Target price: EUR

Share price: EUR

Reuters/Bloomberg BKIA.MC/BKIA SM



Free float 35%









Total Revenue (m) 3,806 3,358 3,397


Operating profit (OP) 1,565 1,445 1,489

Earnings Before Tax (m) 1,452 1,402 1,445

Net Profit (adj.) (m) 1,138 975 990


Tangible BV (m) 9,964 10,619 11,282

RWA (m) 81,303 79,402 80,702

ROTE 11.8% 9.5% 9.0%


Cost/Income 43.6% 44.7% 45.0%

NPL ratio (gross) 11.6% 10.6% 9.3%

P/PPP 5.8 5.0 5.0

P/E (adj.) 10.9 9.6 9.4

P/BV 1.0 0.7 0.7

P/TBV 1.2 0.9 0.8


PPPPS 0.19 0.16 0.16

EPS (adj.) 0.10 0.08 0.09

BVPS 1.10 1.16 1.22

TBVPS 0.87 0.92 0.98

DPS 0.03 0.03 0.03

BANKIA (EURm) 9M16E 9M15 y/y 3Q'16E y/y q/q 2Q'16 1Q'16 4Q'15 3Q'15

NII (EURm) 1,699 1,964 (13.5)% 505 (22.1)% (7.6)% 546 577 658 648

NII / RWA (%) 2.86% 3.00% (4.8)% 2.64% (12.1)% (6.4)% 2.81% 2.92% 3.24% 3.00%

Fees & Comm (net) 634 701 (9.5)% 202 (10.2)% (2.1)% 207 200 228 225

Trading 190 223 (14.9)% 58 (20.3)% 1.0% 58 61 56 73

Other (net) 42 22 86.9% 7 (48.5)% (70.4)% 22 14 (175) 13

GOP 2,564 2,910 (11.9)% 772 (19.5)% (7.3)% 833 853 767 959

NII / RWA (%) 4.31% 4.44% (3.0)% 4.03% (9.2)% (6.1)% 4.29% 4.31% 3.78% 4.44%

Ope. Expenses (1,136) (1,200) (5.3)% (354) (10.3)% (8.5)% (387) (399) (398) (395)

C/I ratio (%) 44.3% 41.2% 7.4% 45.9% 11.4% (1.3)% 46.5% 46.8% 51.9% 41.2%

PPP 1,428 1,710 (16.5)% 418 (25.9)% (6.3)% 446 454 369 564

NII / RWA (%) 2.40% 2.61% (8.1)% 2.18% (16.5)% (5.0)% 2.30% 2.29% 1.82% 2.61%

LIC (326) (472) (30.9)% (89) (40.2)% 2.4% (87) (116) (76) (149)

LIC/GOP (%) (12.7)% (16.2)% (21.6)% (11.5)% (25.7)% 10.4% (10.4)% (13.6)% (9.9)% (15.5)%

PBT 1,011 1,093 (7.5)% 304 (20.3)% (6.2)% 324 315 276 382

NII / RWA (%) 1.70% 1.67% 1.8% 1.59% (10.2)% (5.0)% 1.67% 1.59% 1.36% 1.77%

Net income 773 812 (4.8)% 243 (14.5)% (0.6)% 245 237 66 285

EPS 0.067 0.070 (4.8)% 0.021 (14.5)% (0.6)% 0.021 0.021 0.006 0.025

Estimates GVC Gaesco Beka. Ex CNB Florida

EURm 9m16E 9m15 Y/Y Q316E Y/Y Q/Q

Revenue 2,480 2,910 (14.8)% n/a n/a n/a

NII 1,642 1,964 (16.4)% 519 (19.9)% (4.9)%

PPP 1,310 1,710 (23.4)% n/a n/a n/a

Net profit 723 813 (11.1)% 241 (15.4)% (1.6)%

Source Thomsonreuters

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30


vvdsvdvsdy

BANKIA Stoxx Banks (Rebased)Source: Factset

Shareholders: FROB 65%;

of 60


Ence

Spain/Basic Resources Analyser

BASIC RESOURCES

Ence (Buy) Preview 3Q’16e: low CoR >0.30% (release date 26.10.16)

3Q’16 results preview

The facts: Ence will release results tomorrow at market close.

Our analysis: The pulp activity was defined by the -3.1% average price vs. 2Q’16

in USD, offset by the slightly more favourable USD/EUR for Ence

(USD1.116/EUR vs. 1.129 in 2Q). We estimate volumes sold to have improved

0.8% vs. 2Q’16 and +5.6% vs. 3Q’15. For this past quarter, 3Q, we estimate a

cash cost of EUR355/t, in line with Ence’s guidance, below the EUR367/t in 2Q16

and EUR363/t in 3Q’15. Biomass plants are also expected to outperform 1H’16.

On the other hand, Ence sold land for EUR34.9m, receiving an advance of

EUR7.3m. In 2H’16, the remaining EUR27.6m should be received, reaching

capital gains EUR14m of which EUR5m has been incorporated to our 3Q’16

forecasts (between EBITDA and EBIT).

Conclusion: We expect 3Q’16 results to improve partially due to cost reduction.

Although since the end of 3Q’16 eucalyptus pulp prices have dropped another

USD7, this bearish trend should stop if Ence’s USD10/ton price hike since

October succeeds, which could again set prices at around USD665/ton, which

would be good news. The focus is also on cost performances.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Buy

1.98


2.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg ENC.MC/ENC SM



Free float 39%









Sales (m) 664 602 597

EBITDA (m) 192 115 115

EBITDA margin 28.9% 19.1% 19.3%

EBIT (m) 133 49 48

EBIT margin 20.1% 8.1% 8.1%


ROCE 13.6% 5.4% 5.3%

Net debt/(cash) (m) 241 214 205




EV/Sales 1.7 1.2 1.2

EV/EBITDA 5.9 6.1 6.0

EV/EBITDA (adj.) 5.9 6.1 6.0

EV/EBIT 8.4 14.4 14.4

P/E (adj.) 11.1 23.2 22.9

P/BV 1.5 0.9 0.9

OpFCF yield 4.4% 7.8% 4.8%


EPS (adj.) 0.32 0.09 0.09

BVPS 2.27 2.21 2.24

DPS 0.14 0.06 0.06

ENCE: 9M16e Estimates

9M15 %sles 9M16e %sles % y/y 2Q16 3Q15 3Q16e

Total sales 486.7 100% 440.8 100% -9% 139 174 151

EBITDA 129.7 27% 84.0 19% -35% 20 52 31

Depreciation & provs -46.0 -9% -41.7 -9% -9%

EBIT 83.7 17% 42.3 10% -49% 6 38 19

Financial Results -35.5 -7% -13.9 -3% -61%

EBT 48.1 10% 28.4 6% -41% -3 17 13

Taxes -13.1 -3% -7.5 -2% -43%

Net Profit 35.0 7% 20.9 5% -40% -2 13 10

Source: GVC Gaesco Beka estimates

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8


vvdsvdvsdy

ENCE IGBM (Rebased)Source: Factset

Shareholders: Retos Operativos XXI 26%; Alcor Holding

10%; Fuente Salada 5%;

of 60


The Navigator Company

Portugal/Basic Resources Analyser

BASIC RESOURCES

The Navigator Company (Buy) 3Q’16 results preview

3Q16 results: pricing impact

The facts: The Navigator Company (NVG) will disclose its 3Q16 results on

October 27 before the opening of the Lisbon market. We anticipate revenues of

EUR 381.2m, EBITDA of EUR 90.5m and net income of EUR 42.6m.

Our analysis: FOEX price of A4 B-copy paper stood at 820 EUR/ton against 832

EUR/ton in Q2 and 826 EUR/ton in 3Q15. BHKP prices reached an average of

670 USD/ton in FOEX vs. 693 USD/ton in the previous quarter and 804 USD/ton

in 3Q15, with euro denominated prices standing 602 per ton in 3Q16, 614 per ton

in Q2 and 723 per ton in 3Q15. We expect UWF paper sales to reach levels close

to 3Q15 of c. 380 thousand tons and the same trend in market pulp (68 thousand

tons). Pulp prices remain under pressure in Asia, with robust inventories in China

and new capacity expected to come online in the final quarter of 2016 acting as

caps to prices.

Paper prices are more stable, despite signs of possible spillovers of lower UK

pricing (FX effect) to continental Europe. We expect a yoy decline of EBITDA

margin mainly driven by lower prices. The qoq comparison is slightly negative in

EBITDA margin, but better in terms of EBIT margin (the company booked non-

recurrent items in the previous quarter, namely write-offs). Net financials are

expected to normalize after the one-off cost of EUR 7.9m related to the

repayment of senior notes.

3Q16 results preview

Conclusion & Action. NVG’s Q3 results are expected to be impacted by lower

paper and pulp prices. This will mainly be felt in terms of EBITDA, with the

reversal of non-recurrent items recorded in Q2 making up in terms of EBIT and in

the bottom line. Management should hold a conference call with analysts in the

same day (27th

), after which we will publish a detailed comment of results.

Analyst(s):

Carlos Jesus, Caixa-Banco de Investimento

[email protected]

+351 21 389 6812

Artur Amaro Caixa-Banco de Investimento

[email protected]

+351 213 89 6822

Buy

2.67


4.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg NVGR.LS/NVG PL



Free float 35%









Sales (m) 1,628 1,594 1,662

EBITDA (m) 390 383 373

EBITDA margin 24.0% 24.0% 22.5%

EBIT (m) 283 231 242

EBIT margin 17.4% 14.5% 14.6%


ROCE 10.3% 8.2% 8.6%

Net debt/(cash) (m) 558 690 693




EV/Sales 2.0 1.6 1.6

EV/EBITDA 8.5 6.8 7.0

EV/EBITDA (adj.) 8.5 6.8 7.0

EV/EBIT 11.7 11.3 10.8

P/E (adj.) 14.1 11.1 11.3

P/BV 2.1 1.6 1.6

OpFCF yield 4.1% 7.3% 7.9%


EPS (adj.) 0.26 0.24 0.24

BVPS 1.70 1.69 1.71

DPS 0.57 0.24 0.28

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4


vvdsvdvsdy

THE NAVIGATOR COMPANY Stoxx Basic Resources (Rebased)Source: Factset

Shareholders: Semapa 65%;

EURm 3Q15 2Q16 3Q16eChg. %

(YoY)

Chg. %

(QoQ)9M16e 9M15

Revenues 409.4 394.0 381.2 -6.9% -3.3% 1,159.8 1,204.3

EBITDA 109.5 101.8 90.5 -17.4% -11.1% 285.7 294.0

margin 26.7% 25.8% 23.7% 24.6% 24.4%

EBIT 78.1 51.5 57.0 -27.0% 10.6% 164.9 207.7

margin 19.1% 13.1% 14.9% 14.2% 17.2%

Net Financials -27.1 -10.7 -3.7 -17.2 -44.9

Net Income 41.5 40.7 42.6 2.8% 4.6% 128.1 141.9

margin 10.1% 10.3% 11.2% 11.0% 11.8%

of 60


Air Liquide

France/Chemicals Analyser

CHEMICALS

Air Liquide (Neutral) 3Q16 results: pricing impact

Business buoyed by recurring activities and Airgas

The facts: Activity marked by the second quarter of Airgas’ consolidation (since

23/05/2016) and the impact of the slowdown on more cyclical markets (Industrial

Merchant and Engineering & Construction). However, revenues for Gas &

Services were up by +2% excluding Airgas, underpinned by recurring activities for

Large Industries and Healthcare. Engineering & Construction (under 5% of group

revenues) fell sharply (-51.9%) and affected the group’s growth at only -1.1%,

excluding Airgas.

Our analysis: Large Industries (+5%) benefitted from the ramping up of

production units (Europe, Asia and North America), notably in China (+10%).

Industrial Merchant (-2% excluding Airgas) is still affected by the slowdown in

North America but Air Liquide observed a slight positive change in activity in Q4.

Growth in activity for Healthcare is still solid (+5.2%) despite constant pressure on

prices in Europe. Lastly, Electronics has finally seen its momentum slow (-0.5%)

after 30 months of highly sustained growth (~10% on average), affected by lower

equipment sales. The group continues to benefit from efficiency gains, EUR223m

over 9M, to which may be added initial Airgas synergies. Air Liquide has specified

that all the cost synergies (EUR~200m) will be made before end-2018, earlier

than the initial target.

Conclusion & Action: Despite an unfavourable environment in Western Europe

and North America, activity was buoyed by recurring activities and emerging

economies (+6.7%). We have slightly adjusted our forecasts for 2020 in order to

take account of Airgas’ activity as well as a less favourable growth rate on the

group’s more cyclical business lines. Our prospective value comes out at

EUR125, i.e. an implicit IRR of over 10% (including a dividend yield of 3.5%). Air

Liquide has confirmed its growth targets for net income and EPS for 2016.

Analyst(s):

Ari Agopyan, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 63

Neutral

92.83


103.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg AIRP.PA/AI FP



Free float 100%









Sales (m) 16,380 18,136 20,384

EBITDA (m) 4,130 4,596 5,283

EBITDA margin 25.2% 25.3% 25.9%

EBIT (m) 2,759 3,127 3,632

EBIT margin 16.8% 17.2% 17.8%

Net Profit (adj.)(m) 1,757 1,802 2,108

ROCE 9.3% 7.4% 8.1%

Net debt/(cash) (m) 7,233 13,992 13,842




EV/Sales 2.7 2.9 2.6

EV/EBITDA 10.7 11.6 10.1

EV/EBITDA (adj.) 10.4 11.6 10.2

EV/EBIT 16.1 17.1 14.7

P/E (adj.) 19.3 20.0 17.1

P/BV 2.7 2.8 2.6

OpFCF yield 2.4% 2.0% 2.0%


EPS (adj.) 5.10 4.65 5.44

BVPS 35.97 33.19 35.88

DPS 2.60 2.37 2.77

80

85

90

95

100

105

110

115

120


vvdsvdvsdy

AIR LIQUIDE Stoxx Chemicals (Rebased)Source: Factset

Shareholders: Treasury shares 0.00%;

of 60


Kemira

Finland/Chemicals Analyser

CHEMICALS

Kemira (Accumulate) Business buoyed by recurring activities and Airgas

Q3 results clearly weaker than expected

The facts: Kemira released its Q3 results this morning. Q3 sales stood at

EUR 596m (OPe: EUR 631m and consensus EUR 626m), comparable EBIT was

EUR 46.5m (EUR 51.1/50.2 million) and comparable EPS was EUR 0.18

(EUR 0.23/0.22). Pulp and Paper division's underlying EBIT was EUR 30m (OPe:

EUR 32m) and Oil and Mining's EBIT EUR -1.6m (OPe: EUR 1.1m). The

company downgrades its sales guidance for 2016 - sales are expected to be

stable (previously: to grow) compared to 2015. The guidance on underlying

EBITDA growth in 2016 was kept unchanged.

Conclusion & Action: The results were clearly weaker than expected and the

sales guidance downgrade was a clear disappointment (consensus and our

forecast expected sales growth of slightly below 2% in 2016). We expect the

share price reaction to be clearly negative.

Analyst(s):

Henri Parkkinen, OP Corporate Bank

[email protected]

+358 10 252 4409

Accumulate

12.36


12.70



Target price: EUR

Share price: EUR

Reuters/Bloomberg KRA1V.HE/KEMIRA FH



Free float 65%









Sales (m) 2,373 2,416 2,474

EBITDA (m) 289 317 331

EBITDA margin 12.2% 13.1% 13.4%

EBIT (m) 163 185 207

EBIT margin 6.9% 7.6% 8.4%


ROCE 7.5% 8.5% -3.0%

Net debt/(cash) (m) 621 559 541




EV/Sales 0.8 0.9 0.9

EV/EBITDA 6.8 6.7 6.4

EV/EBITDA (adj.) 6.8 6.7 6.4

EV/EBIT 12.0 11.6 10.2

P/E (adj.) 17.4 15.1 13.2

P/BV 1.4 1.6 1.5

OpFCF yield 2.9% 2.9% 6.1%


EPS (adj.) 0.63 0.82 0.94

BVPS 7.60 7.87 8.22

DPS 0.53 0.57 0.60

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5


vvdsvdvsdy

KEMIRA Stoxx Chemicals (Rebased)Source: Factset

Shareholders: Oras Invest Oy 18%; Solidium Oy 17%;

Varma Mutual Pension Insurance

Company 5%;

of 60


Tikkurila

Q3/2015a Growth

EURm OP Cons. Diff. OP Cons. Diff.

West 113.9 111.8 2% 109 5% 406 #DIV/0!

East 59.0 59.5 -1% 59 -1% 183 #DIV/0!

Total sales 172.9 171.3 1% 168 3% 589 587 0%

Sales growth 0.9 % 0.5 %

EBIT

West 22.5 #DIV/0! 22 3% 54 #DIV/0!

East 4.5 #DIV/0! 5 -10% 10 #DIV/0!

Eliminations -0.4 #DIV/0! -1 -50% -4 #DIV/0!

Total EBIT 26.6 27.6 -4% 25.8 3% 59 59 0%

Total EBIT margin 15.4 % 16.1 % 15.4 % 10.0 % 10.1 %#DIV/0!

PTP 25.7 26.7 -4% 20.2 27.2 % 60 59 1%

EPS 0.45 0.46 -1% 0.37 24.5 % 1.07 1.06 1%#DIV/0!

DPS #DIV/0! 0.80 0.80 0%

Source : OP, FactSet, Reuters Knowledge

Q3/2016e 2016e

Tikkurila

Finland/Chemicals Analyser

CHEMICALS

Tikkurila (Neutral) Q3 results clearly weaker than expected

Q3 preview: Volumes on the rise, support for the East segment from RUB appreciation

The facts: Tikkurila releases its Q3 report on Friday, 28 October 2016.

Our analysis: The positive element of Q2 was the profoundly increased volumes

supported by the partial transfer of prepayments from Sweden and Finland from

Q1. According to our estimate, volumes have still slightly continued to increase,

but the trend has probably been weakened by unfavourable weather conditions in

July and August in the Nordic countries.

Volumes in the East area started to increase slightly in Q2 after a long while,

which we expect to have continued in Q3. However, an increase in raw material

costs may still weigh on profitability, even though the company aims to use more

local raw materials in Russia than before. The translation effect of RUB

appreciation on sales has become positive in Q3, and it seems to still become

stronger towards the end of the year. However, due to the weak purchasing

power in Russia, sales are still more focused on the lower price categories. We

predict that Tikkurila’s Q3 sales have increased by 2.9% to EUR 172.9m

(consensus EUR 171m). Our EBIT forecast excluding NRIs is EUR 26.6m

(consensus EUR 27m).

Conclusion & Action: We do not believe that the company will change its

guidance for 2016 according to which the company’s sales and EBIT (excluding

NRIs) are at the same level as in 2015. We have raised our forecasts for 2017–

2018 by 2% mainly as a result of RUB appreciation. We upgrade our target price

to EUR 19.50 (previously EUR 18) with which 2017 PE and EV/EBITDA multiples

correspond to the peer group level. The share is also supported by a solid

balance sheet and a dividend yield level of more than 4%. We retain our Neutral

recommendation.

Analyst(s):

Jari Raisanen, OP Corporate Bank

[email protected]

+358 10 252 4504

Neutral

19.52


19.50

18.00from Target Price: EUR


Target price: EUR

Share price: EUR

Reuters/Bloomberg TIK1V.HE/TIK1V FH



Free float 82%









Sales (m) 584 589 617

EBITDA (m) 80 78 86

EBITDA margin 13.6% 13.2% 14.0%

EBIT (m) 62 59 66

EBIT margin 10.5% 10.0% 10.8%


ROCE 17.0% 17.0% 18.6%

Net debt/(cash) (m) 48 50 46



Int. cover(EBITDA/Fin. int) 8.9 (97.4) 43.2

EV/Sales 1.3 1.5 1.4

EV/EBITDA 9.4 11.5 10.3

EV/EBITDA (adj.) 9.8 11.3 10.3

EV/EBIT 12.1 15.2 13.4

P/E (adj.) 18.2 18.0 17.4

P/BV 3.6 4.3 4.1

OpFCF yield 4.6% 5.2% 5.3%


EPS (adj.) 0.88 1.09 1.12

BVPS 4.42 4.57 4.74

DPS 0.80 0.80 0.85

14

15

16

17

18

19

20


vvdsvdvsdy

TIKKURILA OMXH (Rebased)Source: Factset

Shareholders: Oras Invest Oy 18%; Ilmarinen Mutual

Pension Insurance Co 6%; Varma Mutual

Pension Insurance Co 6%;

of 60


Corp. Financiera ALBA

Spain/Financial Services Analyser

FINANCIAL SERVICES

Corp. Financiera ALBA (Buy) Q3 preview: Volumes on the rise, support for the East segment from RUB appreciation

EUR0.50/share DPS

The facts: Corporación Financiera Alba has agreed to pay a dividend of EUR0.50

per share (gross).

Our analysis: Dividend in line with forecasts and the same amount at the DPS

against 2015. This dividend will be paid on October 31st 2016.


Analyst(s):


[email protected]

+34 91 436 7816

Buy

39.91


60.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg ALB.MC/ALB SM



Free float 35%








Estimated NAV breakdown (EURm) 12/18 12/18

ACS 1,113.8 33%

Acerinox 693.8 21%

Indra 224.3 7%

BME 298.5 9%

Ebro Foods 298.4 9%

Viscofan 210.6 6%

Clínica Baviera 27.3 1%

Euskatel 145.5 4%

NON-LISTED 316.6 10%

Total Net Asset Value 3,328.9 100%

NAVPS (EUR) 70.619 70.619

Share price*: EUR 39.91 39.91

Discount/(Premium) to NAV 50.3% 50.3%

28

30

32

34

36

38

40

42

44


vvdsvdvsdy

CORP. FINANCIERA ALBA IGBM (Rebased)Source: Factset

Shareholders: Acción Concertada 65%;

of 60


Atria

Q3/2015a

EURm OP Cons. Diff. Low High

Sales

Finland 236 #DIV/0! 235

Scandinavia 90 #DIV/0! 81

Russia 18 #DIV/0! 19

Baltic countries 8 #DIV/0! 8

Sales 345 351 -2% 344 362 337


EBIT

Finland 9.0 #DIV/0! 9.5

Scandinavia 5.3 #DIV/0! 5.2

Russia 0.5 #DIV/0! 0.5

Baltic countries 0.2 #DIV/0! 0.0

Total EBIT 14.8 14.0 6% 12.0 15.0 15.1

EBIT excl. NRI 14.8 15.1

Total EBIT margin 4.3 % 4.0 % 4.5 %

EBIT margin excl. NRI 4.3 % 4.5 %

PTP 13.2 12.0 10% 9.0 14.2 12.9

EPS 0.36 0.28 28% 0.27 0.39 0.27

DPS

Source : OP and FactSet

Q3/2016e

Atria

Finland/Food & Beverage Analyser

FOOD & BEVERAGE

Atria (Accumulate) EUR0.50/share DPS

Q3 preview: Recommendation downgraded to Accumulate after recent share price rise

The facts: Atria reports its Q3 results on Thursday, 27 October, at around 7.00

am CET.

Our analysis: The company expects its sales to grow and EBIT to improve in

2016. The underlying EBIT improved slightly in H1 (EUR 7.2m -> EUR 7.4m). In

H2, earnings growth is underpinned by several different factors, such as the

stabilisation of the Russian market (domestic production has reached self-

sufficiency), improved outlook for Russian consumers (the oil price and RUB

appreciation) and acquisitions. However, the effect of these factors is partly

diluted by market challenges in Finland and Scandinavia.

For Q3, we predict that sales has increased by 2% YoY driven by the Lagerberg

acquisition, but the underlying EBIT has declined to EUR 14.8m (Q3/2015: EUR

15.1m) as profitability is burdened by tight competition in Finland. Our Q3 EBIT

forecast is slightly more optimistic than consensus (EUR 14.0m).

In connection with the Q3 report, the focus will also be on the acquisition price

paid for the share majority in Kaivon Liha Kaunismaa Oy. The company has

communicated that the acquisition will be closed in October and that is when the

acquisition price will also be confirmed and communicated to the market,

according to our understanding. The Finnish Competition and Consumer Authority

already approved the acquisition in September. The acquisition should increase

the Group’s sales by about EUR 40m, and in 2014–15, the company's average

adjusted EBIT was about EUR 4m. The closing of the acquisition would also

support the guidance.

Conclusion & Action: We downgrade our recommendation for Atria to

Accumulate (previously Buy) as the share price rise over the past couple of

weeks has lowered the upside potential in relation to our target price of EUR 11.

Analyst(s):

Niclas Catani, OP Corporate Bank

[email protected]

+358 10 252 8780

Accumulate

9.81


11.00


from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg ATRAV.HE/ATRAV FH



Free float 38%









Sales (m) 1,340 1,359 1,378

EBITDA (m) 85 84 93


EBIT (m) 29 37 44

EBIT margin 2.2% 2.7% 3.2%


ROCE 3.4% 4.2% 5.0%

Net debt/(cash) (m) 195 202 186




EV/Sales 0.3 0.4 0.3

EV/EBITDA 5.3 5.7 5.0

EV/EBITDA (adj.) 5.3 5.7 5.0

EV/EBIT 15.6 12.9 10.5

P/E (adj.) 18.5 12.1 9.7

P/BV 0.6 0.7 0.6

OpFCF yield 11.9% 2.2% 10.3%


EPS (adj.) 0.49 0.81 1.02

BVPS 14.32 14.73 15.29

DPS 0.40 0.45 0.55

7.5

8.0

8.5

9.0

9.5

10.0


vvdsvdvsdy

ATRIA Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Itikka osuuskunta 30%; Lihakunta 28%;

Mandatum Life 4%;

of 60


Olvi

Q3/2015a

EURm Pohjola Cons. Diff. Low High Pohjola Cons. Diff.

Finland 27 #DIV/0! 28 110 #DIV/0!

Estonia 22 #DIV/0! 21 79 #DIV/0!

Latvia 9 #DIV/0! 9 32 #DIV/0!

Lithuania 11 #DIV/0! 11 36 #DIV/0!

Belarus 23 #DIV/0! 22 71 #DIV/0!

Eliminations -2 #DIV/0! -2 -8 #DIV/0!

Sales 90 93 -3% 90 93 89 320 326 -2%

Sales growth 0.8 % 4.0 % 0.8 % 4.6 % 3.1 % 4.8 %

EBIT

Finland 2.8 #DIV/0! 3.1 9.8 #DIV/0!

Estonia 5.4 #DIV/0! 5.1 17.1 #DIV/0!

Latvia 1.3 #DIV/0! 1.3 3.4 #DIV/0!

Lithuania 1.5 #DIV/0! 1.5 2.7 #DIV/0!

Belarus 3.5 #DIV/0! 3.3 7.8 #DIV/0!

Total EBIT 14.4 15.3 -6% 14.4 15.6 14.1 40.9 41.0 0%

Total EBIT margin 16.1 % 16.5 % 15.9 % 12.8 % 12.6 %

PTP 13.9 15.0 -8% 13.9 15.0 7.8 38.9 40.4 -4%

EPS 0.58 0.61 -5% 0.57 0.64 0.37 1.55 1.56 -1%

DPS 0.80 0.80 0%


Q3/2016e 2016e

Olvi

Finland/Food & Beverage Analyser

FOOD & BEVERAGE

Olvi (Neutral) Q3 preview: Recommendation downgraded to Accumulate after recent share price rise

Q3 preview: Pace is likely to clearly slow down compared to Q2

The facts: We maintain Olvi's Neutral recommendation and EUR 26.50 target

price ahead of the Q3 results released on Thursday, 27 October 2015. Our

forecasts remain unchanged. The company has traditionally published its interim

report at around 8 am CET.

Our analysis: Olvi is expecting full-year sales volumes and sales to increase

slightly compared to the previous year, and operating profit to on a par with the

previous year or increase slightly. Our forecasts are in line with this guidance: we

forecast 4.6% growth in volumes and 3.1% growth in sales. We estimate

operating profit to improve by nearly 7% to EUR 40.9m, which is in line with

consensus (EUR 41.0m). We do not therefore anticipate any significant changes

to this guidance in the Q3 report. During H1, sales increased by nearly 5% and

EBIT improved by 12%. We predict that the pace slows down during H2.

In terms of the Q3 results, we are more conservative than consensus both for

sales and EBIT. We forecast 0.8% growth in sales (consensus: +4.0%) and an

improved EBIT of EUR 14.4m (consensus: EUR 15.3m; Q3'15: EUR 14.1m).

Conclusion & Action: Increased market shares have supported the sales trend,

which has also been reflected in a positive way on the earnings performance

together with the effects of the efficiency measures that have been implemented.

However, we do not expect the volume growth of more than 10% to continue as in

Q2. According to our estimate, this was in particular affected by the better

weather in Finland early this summer compared to the comparison period, which

improved volumes considerably. There were 17 hot days in Q2 compared to only

one in the comparison period. Meanwhile, there were as many hot days in Finland

in Q3 as in 2015.

Analyst(s):


[email protected]

+358 10 252 8780

Neutral

27.39


26.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg OLVAS.HE/OLVAS FH



Free float 78%









Sales (m) 310 320 331

EBITDA (m) 55 59 62

EBITDA margin 17.6% 18.3% 18.9%

EBIT (m) 38 41 45

EBIT margin 12.3% 12.8% 13.5%


ROCE 13.1% 13.7% 14.8%




Int. cover(EBITDA/Fin. int) high high high

EV/Sales 1.6 1.8 1.7

EV/EBITDA 9.0 10.0 9.1

EV/EBITDA (adj.) 9.0 10.0 9.1

EV/EBIT 12.9 14.4 12.8

P/E (adj.) 20.6 17.7 16.3

P/BV 2.5 2.8 2.6

OpFCF yield 9.0% 4.7% 6.3%


EPS (adj.) 1.08 1.55 1.68

BVPS 8.99 9.84 10.72

DPS 0.70 0.80 0.90

20

21

22

23

24

25

26

27

28


vvdsvdvsdy

OLVI Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Olvi Foundation 16%; Hortling Heikki 5%;

Ilmarinen Mutual Pension Insurance

Company 1.02%;

of 60


Wessanen

Netherlands/Food & Beverage Analyser

FOOD & BEVERAGE

Wessanen (Neutral) Q3 preview: Pace is likely to clearly slow down compared to Q2

Neutral

12.30


11.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg BSWSc.AS/WES NA



Free float 74%









Sales (m) 523 578 648

EBITDA (m) 43 52 61


EBIT (m) 35 43 52

EBIT margin 6.6% 7.5% 8.1%


ROCE 13.5% 14.1% 16.4%

Net debt/(cash) (m) (18) 16 (8)

Net Debt/Equity -0.1 0.1 -0.1

Debt/EBITDA -0.4 0.3 -0.1


EV/Sales 1.3 1.6 1.4

EV/EBITDA 15.9 18.1 15.0

EV/EBITDA (adj.) 15.8 17.4 15.0

EV/EBIT 19.9 21.7 17.5

P/E (adj.) 25.4 33.0 26.6

P/BV 3.9 6.4 5.6

OpFCF yield 2.3% 3.6% 4.2%


EPS (adj.) 0.37 0.37 0.46

BVPS 2.43 1.93 2.21

DPS 0.11 0.19 0.23

A stronger-than-expected temporary deceleration

The facts: Wessanen reported 3Q16 net sales growth of 9.2% to EUR 137.5m,

which was below EUR 145m consensus. Normalized EBIT was 6.4% up to EUR

10m, which was below the EUR 10.9m consensus. The company took a EUR

1.4m charge for restructuring in Germany. Net profit from continuing operations

stood at EUR 6m (+3%) which was behind the EUR 6.9m consensus. Net debt

was EUR 35.3m, slightly better than we had (EUR 38.6m). The company leaves

the guidance nearly intact and expects autonomous revenue growth at the upper

end of the 5-7% guidance range, a higher EBITE versus 2015 and a higher

margin. Tax rate is now set at 30% (was 30-35%).

Our analysis: In 3Q16, autonomous growth of own brands (80% of total) was

7.4%. This was a deceleration versus the 9.5% of 1Q and 10.3% of 2Q. However,

the other 20% of total sales (private label, third parties) showed a decline of 10%

as organic sales growth of the whole portfolio was only 3.7% (1Q 9.3%, 2Q 8.0%).

The main decline was in private labels in Italy. Acquisitions of Piramide, Inebio

and Mrs Crimble added 8% to sales. Pound Sterling weakness had a -3% impact.

The deceleration of own brands is probably mainly located in Germany. The

competition in veggie meals has increased as supermarkets have extended their

portfolio here. Tartex is feeling the pain. The brand now reacts by increasing the

listings in drugstores. In Germany, Wessanen has no real access to

supermarkets as its brands are tied to health food stores and also because

supermarkets have a different approach to the duality between brands and private

labels. The strong decline in private label sales is totally no worry for us.

Wessanen is a branded company and capacity can be much better used for

brand sales instead of private label sales. We think this decline in private labels

makes capacity available for more brand sales. The fact that the German Allos

brand is expanding in dairy alternatives is a positive development.

Due to the lower than expected sales, also the EBITE was lower than expected.

Wessanen already had guided that marketing would be weighted to 2H16. This

might also be partly related to requests from the merged AholdDelhaize to

contribute more to the roll-out of the biological products. Although this will need

more A&P in the short-term, we think in the long-term Wessanen will benefit from

more shelf space.

Wessanen took a EUR 1.4m charge for German restructuring, but we are not

sure whether this will be the end. Although Wessanen is now moving into

drugstores, we think the main problem is the absence of exposure to the

supermarkets.

Conclusion & Action: The deceleration at Wessanen does not worry us as our

analysis shows that the organic food market in Wessanen’s relevant areas can

grow by a CAGR of 10% in coming 5-10 years’ period. However, it is not one

straight line and de-listing (private label), repositioning (Allos, Tartex) and country

issues (Germany, Benelux) might lead to temporary set-backs. Valuation of

Wessanen had moved up to very high levels, also due to a competing broker’s

report recently. We expect that the share price might return to ‘reality’ and we

stick to our EUR 11.1 share price based on a weighted average of DCF, peer

group and bid valuation. Note that the bid speculation should now not be to much

fuelled as Hain Foods remains to have accounting issues.

6

7

8

9

10

11

12

13


vvdsvdvsdy

WESSANEN Midkap (Rebased)Source: Factset Shareholders: Delta Partners 18%; Mr. Jobson 8%;

Invesco 3%; FIL 2%; ING IM 1.90%; KBC

Group 1.80%; Analyst(s):

Gerard Rijk, NIBC Markets N.V.

[email protected]

+ 31 (0)20 550 8572

of 60


DIA

Spain/Food & Drug Retailers Analyser


DIA (Buy) A stronger-than-expected temporary deceleration

Good results, positive LFL trend consolidating

The facts: DIA released 9m results this morning. We highlight: sales +0.8%; adj

EBITDA +0.4%; attributed net profit +17.2%.

Our analysis: Sales at Group level were affected by the lower currency vs.

previous quarters (-8pp 3Q’16 vs. -12.1% 1H’16) thanks to the Brazilian real’s

appreciation (+8%). LFL sales reached +8.9% 9m’16. The adjusted EBITDA

increased 0.4%, maintaining the margin at 7%. We highlight the substantial cut in

one-offs (-44% vs. 3Q’15) which took net profit up +17.2%.

Iberia: 3Q sales fell -1.7% due to the remodelling program and transferring

owned stores to franchises. 9m LFL sales reached 0.9%. The EBITDA margin

remains flat at 8.4% (9m’16).

Emerging: Strong sales growths continue in local currencies, +26.7% 9m’16 but

affected by the strong currency effect, subtracting 31 points from growths. LFL

sales increased +19.4% leaning on inflation. Margins improved +10bps to 3%.

Net debt increased slightly (EUR1,221.1m 9m’126 vs. EUR1,132.4m 1H’16) due

to the dividend payment and coupons as well as acquiring treasury stock to cover

the incentive plan.

Conclusion: Good results although lower earnings than estimated due to the

higher recurrent costs than expected. Recommendation reiterated.

Analyst(s):

Rafael Bonardell, GVC Gaesco Beka

[email protected]

+34 91 436 78 171

Buy

5.48


6.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg DIDA.MC/DIA SM



Free float 81%









Sales (m) 8,926 8,962 9,737

EBITDA (m) 488 558 598


EBIT (m) 274 322 339

EBIT margin 3.1% 3.6% 3.5%


ROCE 20.0% 28.6% 29.8%

Net debt/(cash) (m) 1,132 986 895




EV/Sales 0.5 0.5 0.4

EV/EBITDA 9.0 7.6 7.0

EV/EBITDA (adj.) 7.2 6.8 6.2

EV/EBIT 16.0 13.2 12.3

P/E (adj.) 13.3 11.4 10.5

P/BV 10.8 8.4 6.7

OpFCF yield -0.2% 7.9% 6.9%


EPS (adj.) 0.41 0.48 0.52

BVPS 0.50 0.65 0.81

DPS 0.20 0.23 0.25

DIA Group. Q3 results

(EUR m) 3Q'15 3Q'16 Y/Y 3Q'16e 9M'15 9M'16 Y/Y

Net sales 2,302.6 2320.5 0.8% 2322.9 6,644.6 6563.6 -1.2%

Iberia 1,505.9 1479.5 -1.8% 1501.4 4,274.5 4306.8 0.8%

Emerging 796.8 841 5.5% 821.5 2,370.1 2256.9 -4.8%

Adj. EBITDA 161.1 161.7 0.4% 161.6 427.2 429.1 0.4%

% mg 7.0% 7.0% 0.0 p.p. 7.0% 6.4% 6.5% 0.1 p.p.

Iberia 131.2 130.9 -0.2% 130.8 358.0 360.8 0.8%

% mg 8.7% 8.8% 0.1 p.p. 8.7% 8.4% 8.4% 0.0 p.p.

Emerging 29.8 30.8 3.4% 30.8 69.3 68.2 -1.6%

% mg 3.7% 3.7% -0.1 p.p. 3.7% 2.9% 3.0% 0.1 p.p.

Adj. EBIT 105.4 101.2 -4.0% 102.1 269.5 254.4 -5.6%

EBIT 74.4 83.9 12.8% 91.1 189.1 188.3 -0.4%

Atributted NP 40.7 47.7 17.2% 55.0 104.1 107.5 3.3%

Adj. NP 63.9 61.1 -4.4% -- 165.1 157.2 -4.8%Source: GVC Gaesco Beka & Company data

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6

5.8

6.0

6.2


vvdsvdvsdy

DIA Stoxx Food & Drug Retailers (Rebased)Source: Factset

Shareholders: Baillie Gifford & Co. 10%; BlackRock Inc.

5%; Black Creek Investment

Management Inc. 3%; Citadel Multi-

strategy Equities Master Fund Ltd.

of 60


Kesko

Q3/2015a

EURm OP Cons. Diff. Low High OP Cons. Diff.

Sales

Grocery trade 1,362 #DIV/0! 1,171 5,282 #####

Building and technical trade 1,242 #DIV/0! 857 4,078 #####

Car trade 187 #DIV/0! 170 808 #####

Common operations and eliminations4 #DIV/0! 4 5 #####

Sales 2,795 2,816 -1% 2,791 2,844 2,203 10,173 10,207 0%

26.9 % 27.8 % 26.7 % 29.1 % 17.2 % 17.6 %

Total EBIT 90.5 90.9 0% 89.0 97.3 82.5 268.7 267.0 1%

EBIT margin

Grocery trade 3.3 % #DIV/0! 3.8 % 3.3 % #DIV/0!

Building and technical trade 3.5 % #DIV/0! 4.2 % 2.4 % #DIV/0!

Car trade 3.1 % #DIV/0! 3.5 % 3.2 % #DIV/0!


PTP 91.1 89.1 2% 87.0 94.3 78.5 272.2 268.4 1%

EPS 0.67 0.66 2% 0.62 0.69 0.53 2.02 1.97 2%

DPS 2.00 1.95 3%

Source : OP, Vara Research, FactSet

Q3/2016e 2016e

Kesko

Finland/Food & Drug Retailers Analyser


Kesko (Neutral) Good results, positive LFL trend consolidating

Q3 preview: Cash flow outlook improved

The facts: Kesko reports its Q3 results on Wednesday, 26 October at around

8.00 am CET.

Our analysis: We have only made marginal changes in our forecasts on the

basis of the latest sales figures. The growth pace of sales continued to pick up in

Q3 – an increase of +27% YoY – Onninen’s business was included in full weight

in its first full quarter. The sales of grocery trade increased by 16% as a result of

the acquisition of Suomen Lähikauppa in April. The acquisition of Onninen at the

beginning of June generated a major boost in the sales of building and technical

trade that increased by 45%. The growth of car trade was also solid in Q3

(+10%), which was achieved without acquisitions.

We predict that the comparable EBIT has improved in Q3 by 10% to EUR 90.5m

(consensus: +10%; EUR 90.9m). We estimate that Onninen’s profit contribution is

EUR +7.8m and Suomen Lähikauppa’s contribution is EUR -1.0m of the improved

EBIT of EUR 8.0m. We estimate that the guidance will remain unchanged for the

next 12 months (10/2016–9/2017): sales and comparable EBIT will exceed the

level of the comparable period.

Kesko confirmed at the end of last week that it is negotiating on the disposal of its

grocery trade operations in Russia with Lenta Ltd. The divestment would improve

Kesko’s cash flow outlook as its operations have been making loss – about EUR

10–15m at an annual level according to our estimate – and capital would be

released for more profitable use. So far, Kesko has invested about EUR 200m in

grocery trade operations in Russia. If sold, nearly not all of this amount would be

regained, as there is a buyer's market in Russia at the moment. The greatest

question mark related to the possible divestment is most likely the extent to which

Kesko is willing to compromise on the price in relation to the investments.

Conclusion & Action: We upgrade our recommendation for Kesko to Neutral

(prev. Reduce) and target price to EUR 43 (prev. EUR 39) as a result of

increased valuation levels in general and an improved cash flow outlook.

Analyst(s):


[email protected]

+358 10 252 8780

Neutral

43.22


43.00


from Reduce

Target price: EUR

Share price: EUR

Reuters/Bloomberg KESBV.HE/KESBV FH



Free float 100%









Sales (m) 8,679 10,173 10,920

EBITDA (m) 381 416 483


EBIT (m) 244 269 311

EBIT margin 2.8% 2.6% 2.8%


ROCE 13.9% 9.7% 9.7%

Net debt/(cash) (m) (448) 220 359

Net Debt/Equity -0.2 0.1 0.2

Debt/EBITDA -1.2 0.5 0.7

Int. cover(EBITDA/Fin. int) 59.6 (1,280.8) 71.0

EV/Sales 0.3 0.4 0.4

EV/EBITDA 6.3 10.0 8.9

EV/EBITDA (adj.) 5.6 9.6 8.9

EV/EBIT 9.8 15.5 13.8

P/E (adj.) 17.2 20.1 18.5

P/BV 1.5 2.0 2.0

OpFCF yield 7.1% -9.4% 2.0%


EPS (adj.) 1.88 2.16 2.34

BVPS 21.84 21.31 21.66

DPS 2.50 2.00 2.20

24

26

28

30

32

34

36

38

40

42

44

46


vvdsvdvsdy

KESKO Stoxx Food & Drug Retailers (Rebased)Source: Factset

Shareholders: K-Kauppiasliitto ry 4%; Vähittäiskaupan

Takaus Oy 4%; Kruunuvuoren Satama

Oy 3%;

of 60


Datalogic

Italy/Industrial Engineering Analyser


Datalogic (Accumulate) Q3 preview: Cash flow outlook improved

Q3 16 preliminary sales: continuous good trend in ADC

The facts: Q3 16 sales published yesterday stood at EUR 139.9m up by 4.6%

compared to Q3 15 (+4.8% at CER).

In particular, the group recorded a positive sales trend in both divisions in Q3 16:

1) ADC Division continued to show positive growth thanks to the fixed retail

scanners and mobile computer sales; it achieved revenues at EUR

97.9m, up by 8.4% compared to Q3 15 (+8.6% at CER);

2) IA Division achieved revenues at EUR 37.2m, up by 1.1% compared to

Q3 13, including Business Unit Systems revenues. The IA revenues

benefited from growth beyond expectations in Europe, but was affected

by a reflective performance on the US market

Outlook on FY 16e: the order intake reached EUR 138.1m in Q3 (+3.5% Y/Y).

The management said that, given the traditional positive performance of the last

quarter of the year, they are confident that the close of the year will be in line with

the growth trend for the first nine months. So, based on the Q3 order book, we

believe that the group will be able to achieve this guidance.

Conclusion & Action: while we are waiting to see complete Q3 16 results (due

out on 11th

November), we maintain our positive stance on the stock and confirm

our Accumulate recommendation.

Analyst(s):

Paola Saglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

18.87


19.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg DAL.MI/DAL IM



Free float 33%









Sales (m) 535 585 624

EBITDA (m) 74 91 101

EBITDA margin 13.8% 15.5% 16.3%

EBIT (m) 56 69 80

EBIT margin 10.4% 11.8% 12.8%


ROCE 11.1% 12.3% 13.0%

Net debt/(cash) (m) 21 1 (28)

Net Debt/Equity 0.1 0.0 -0.1

Debt/EBITDA 0.3 0.0 -0.3


EV/Sales 1.9 2.0 1.8

EV/EBITDA 14.0 12.8 11.2

EV/EBITDA (adj.) 14.0 12.8 11.2

EV/EBIT 18.7 16.8 14.1

P/E (adj.) 23.6 21.5 18.1

P/BV 3.2 3.2 2.7

OpFCF yield 5.2% 2.4% 2.7%


EPS (adj.) 0.69 0.88 1.05

BVPS 5.10 5.98 7.03

DPS 0.15 0.15 0.16

12

13

14

15

16

17

18

19

20


vvdsvdvsdy

DATALOGIC FTSE Italy STAR (Rebased)Source: Factset

Shareholders: Hydra 67%;

of 60


Wärtsilä - OP forecasts and consensus

Q3/2015a

EURm Q3a OP Diff. Cons. Low High

Sales

Ship Power 390 420 -7% 400 334 438 448

Change -13% -6% 0% -11% 23%

Power Plants 177 190 -7% 194 169 307 243

Change -27% -22% 0% -20% -14%

Services 512 550 -7% 544 534 560 531

Change -4% 4% 0% 2% 13%

Total sales 1,079 1,160 -7% 1,131 1,091 1,191 1,222

Change -12% -5% 0% -7% 9%

Total EBIT 122 150 -19% 136 96 175 149

Margin 11.3 % 12.9 % 12.0 % 12.2 %

Non-recurring items -1 -10 0 -12 -20 8- -11

EBIT excl. NRI 123 160 -23% 148 116 160 160

Margin 11.4 % 13.8 % 13.1 %

Financials (net) -7 -4 0%

PTP 115 146 -21% 128 90 146 132

Taxes -31 -32 3%

EPS 0.43 0.57 -25% 0.50 0.34 0.57 0.48

EPS excl NRI 0.43 0.61 -30% 0.56 0.44 0.61 0.52

DPS, EUR 0.00

Source: OP (13 October 2016) and Vara Research (17 October 2016)

Q3/2016e

Wärtsilä

Finland/Industrial Engineering Analyser


Wärtsilä (Neutral) Q3 16 preliminary sales: continuous good

trend in ADC

Q3 below expectations due to timing issues

The facts: Wärtsilä's sales and EBIT missed expectations. Due to timing issues,

sales declined YoY, weighing on profitability. A more important matter is the

strong Q4 predicted by the guidance. Q3 cash flow was strong at EUR 189m.

Order intake: Marine Solutions EUR 287/331/320 million (act/cons/OP), Energy

Solutions EUR 330/306/250 million, Services EUR 522/533/510 million, in total

EUR 1,139/1,185/1,080 million. The orders of Marine Solutions were down -29%

YoY. Wärtsilä no longer reports the impact of the acquisition it made last year –

we estimate that other orders dropped more than total orders.

Our analysis: . The orders of Energy were good, which would indicate that the

basic market conditions have remained stable. Sales of Services dropped -4% vs.

our expectation +4% and consensus +2% – growth in services has come to a

halt, which will make a profit improvement more difficult. The guidance was

downgraded on 12 October: sales are expected to decline by 5% and EBIT excl.

NRI is expected to be around 12%. The comments on the market were

unchanged. The outlook for the ship market is difficult and for the power

generation market stable. Wärtsilä expects the ongoing negotiations to bring in

additional power plant orders.

Conclusion & Action: The bigger-than-expected decline in Marine's orders and

the sales decline in service may weigh on the share.

Analyst(s):

Pekka Spolander, OP Corporate Bank

[email protected]

+358 10 252 4351

Neutral

40.88


40.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg WRT1V.HE/WRT1V FH



Free float 83%









Sales (m) 5,029 4,778 4,860

EBITDA (m) 711 668 730

EBITDA margin 14.1% 14.0% 15.0%

EBIT (m) 587 529 598

EBIT margin 11.7% 11.1% 12.3%


ROCE 14.3% 14.1% 14.9%





EV/Sales 1.7 1.7 1.7

EV/EBITDA 12.1 12.3 11.0

EV/EBITDA (adj.) 11.7 11.5 10.9

EV/EBIT 14.7 15.5 13.5

P/E (adj.) 18.9 20.3 17.8

P/BV 3.8 3.4 3.2

OpFCF yield 2.5% 4.5% 5.9%


EPS (adj.) 2.23 2.02 2.30

BVPS 11.16 11.85 12.97

DPS 1.20 1.20 1.25

32

34

36

38

40

42

44


vvdsvdvsdy

WÄRTSILÄ Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Invaw Invest AB (Investor) 18%; Fiskars

Corp. 6%; Varma Mutual Pension

Insurance Company 5%;

of 60


Generali

Italy/Insurance Analyser

INSURANCE

Generali (Accumulate) Q3 16 preliminary sales: continuous good trend in ADC

Generali suspends the investment in Cajamar

The facts: According to Milano Finanza, Generali suspended the investment in

Cajamar.

Our analysis: more in detail, the investment was decided by Mr Greco’s

management team, who thought about the acquisition of c. 3.85% in the Spanish

Cajamar, for a total consideration of c. EUR 40m. The deal aimed to improve the

joint venture both in life business (Cajamar Life) and P&C business (Cajamar

Seguros Generales). The profitable distribution agreement with Cajamar is still in

place, with a particular focus on bancassurance. Generali’s policies are sold

through Cajamar’s 1,300 branches and the agreement weighs for c. 13% of

Generali’s total premiums in Spain. Generali Spagna’s market share is around

4% in Life and c. 4.2% in P&C. The net profit was c EUR 226m in 2015, while Life

premiums were c. EUR 958m and P&C premiums c. EUR 1.358bn.

Conclusion & Action: this is neutral news. In view of the 3Q 16 results (on 10th

November) and of the Investor day (on 23rd

November) we stick to accumulate.

Generali’s consensus P/E is c. 8.3x and 7.9x for 2016 and 2017 respectively, still

cheaper than Axa (8.8x and 8.6x) and Allianz (9.8x and 9.3x). Consensus

dividend yield remains also appealing (6.4% and 6.8% for 2016 and 2017

respectively.

Analyst(s):

Enrico Esposti, CIIA, Banca Akros

[email protected]

+39 02 4344 4022

Accumulate

12.09


13.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg GASI.MI/G IM



Free float 76%









Life Gross premiums (m) 49,425 47,745 48,222

Non-Life Gross prem.(m) 20,868 20,214 20,428

Total Net Revenues (m) 84,477 80,657 80,777

EBIT (m) 4,088 4,149 4,084

Net Profit (adj.) (m) 2,130 2,113 2,074


ANAV (m) 20,403 21,401 22,419

ROE (adj.) (%) 9.3 9.0 8.5

Combined ratio (%) 93.3 93.2 93.2

Solvency Ratio 196.5% 199.8% 203.8%

P/E (adj.) 12.4 8.9 9.1

P/BV 1.1 0.8 0.7

P/ANAV 1.3 0.9 0.8

P/EbV 0.9 0.6 0.6


EPS (adj.) 1.37 1.36 1.33

BVPS 15.14 15.78 16.43

ANAVPS 13.11 13.75 14.40

EbVPS 19.35 20.14 20.31

DPS 0.72 0.68 0.67

9

10

11

12

13

14

15

16

17

18

19


vvdsvdvsdy

GENERALI Stoxx Insurance (Rebased)Source: Factset

Shareholders: Mediobanca 13%;

of 60


Talanx Group

Germany/Insurance Analyser

INSURANCE

Talanx Group (Accumulate) Generali suspends the investment in Cajamar

Interview with CEO in the “Börsenzeitung”

The facts: This morning the CEO has given an interview in the “Börsenzeitung”.

Our analysis:

The CEO sees an even profit split between primary insurance and reinsurance in

Talanx within 5 years as achievable (currently reinsurance contributes around

65% to group earnings).

The restructuring of the primary insurance is on track; at the moment the CEO

does not see any need to cut additional jobs. The restructuring costs will be fully

booked in 2016, investment costs will however to continue to burden the P&L in

the next years. Q3 was unspectacular according to the CEO, large losses should

have been within the budget which would mean that the insurer has a buffer for

Q4.

Regarding M&A the CEO said that Turkey and Mexico would be interesting

countries in the primary insurance as Talanx is not yet among the TOP5 in these

countries. Currently the CEO sees however no targets.

Solvency II ratio of 165% is within Talanx’s 150-200% target; in case of a drop

below the 150% TLX could issue hybrid capital. Furthermore TLX expects a

positive 10%-pt. impact from a model change which is targeted to be

implemented during 2017. (operational risk which is still calculated under the

standard model will be calculated with internal model).

For 2016 CEO sees at least a stable dividend, an increase depends on the actual

profit.

Conclusion & Action: The CEO did not reveal anything really new in the

interview. Key message is in our view that TLX will keep its 2016 dividend at least

stable, that its solvency II ratio should increase by 10%-pts. from a model change

during 2016 and that restructuring costs for the German primary business are

completely booked in 2016. We stick to our Accumulate recommendation with a

TP of EUR 32.00 as the shares continue to trade with a discount vs. its peers

which is not justified in our view (2017e PER: 9x vs 11x). Next important event is

the investors’ day on November 18.

Analyst(s):

Philipp Häßler, CFA, equinet Bank

[email protected]

+49 69 58997 414

Accumulate

28.49


32.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TLXG.DE/TLX GR



Free float 21%









Life Gross premiums (m) 12,720 13,054 13,829

Non-Life Gross prem.(m) 19,079 19,581 20,744

Total Net Revenues (m) 32,632 32,582 34,257

Life Ins.Tech.Result (m) -350 -264 -232

Non-Life Ins. Tech.Result -1,020 -1,138 -1,063

EBIT (m) 2,182 2,061 2,100

Net Profit (adj.) (m) 734 773 822


ANAV (m) 9,045 9,780 10,273

ROE (adj.) (%) 9.0 9.1 9.2

Combined ratio (%) 96.5 96.0 96.0

Solvency Ratio 222.8% 229.5% 236.4%

P/E (adj.) 9.9 9.3 8.8

P/BV 0.9 0.8 0.8

P/ANAV 0.8 0.7 0.7

P/EbV 0.6 0.6 0.6


EPS (adj.) 2.90 3.05 3.25

BVPS 32.70 34.23 36.17

ANAVPS 35.71 38.61 40.56

EbVPS 45.43 48.64 50.90

DPS 1.30 1.30 1.30

23

24

25

26

27

28

29

30

31


vvdsvdvsdy

TALANX GROUP MDAX (Rebased)Source: Factset

Shareholders: HDI V.a.G. 79%;

of 60


Caverion

Finland/Materials, Construction & Infrastructure Analyser


Caverion (Neutral) Interview with CEO in the “Börsenzeitung”

Q3 preview: Fifth (and final) profit warning on the table

The facts: Caverion has already issued a fifth profit warning this year. The

warning was not surprising as such since the guidance range appeared

challenging after the Q2 results. The company has identified further challenges

with project management and execution. In addition to the previously mentioned

Sweden and Denmark-Norway, there are also challenges in Germany and

Industrial Solutions. Due to the stricter project tendering process, order backlog

began to decline in Q3, as a result of which total personnel reductions are

increased from 700 to 1,000.

Our analysis: According to the guidance, Caverion's EBITDA excl. restructuring

costs is estimated to be in the range of EUR 40–50m in 2016. Adjusted for the

margin revisions of EUR 12m made in H1 and our assumption for margin

revisions in H2 (EUR 10m), adjusted EBITDA would be around EUR 65–75m. We

estimate that the personnel reductions can reduce costs by around EUR 40m of

which ¾ will be recognised next year. The decline in sales will cut the gross

margin to some extent. Consequently, the company has a theoretical chance to

lift EBITDA back to the 2015 level of around EUR 90m.

Our attention with the Q3 report will focus on cash flow. We have estimated that

the balance sheet will be subject risks arising from the rather high receivables

(around EUR 26m), the investigated violation of competitive law (<10% of sales,

with Eltel ~3% of sales) and suspected bribery in Germany. Seasonal variation

should turn the heavily negative cash flow of H1 (EUR -61m) positive in H2, which

would bring EUR 90m to our net debt projection (Q2: EUR 131m).

Conclusion & Action: It is positive news that Ari Lehtoranta will begin as CEO at

the beginning of 2017. Yet, the valuation level cannot be considered especially

inexpensive. The peak of the previous margin cycle was 4.2% in 2015, and with

this margin EV/EBIT is 12 and EV/EBITDA 9. We maintain our target price of EUR

6.80 and maintain our Neutral recommendation.

Analyst(s):

Matias Rautionmaa, OP Corporate Bank

[email protected]

+358 10 252 4408

Neutral

6.89


6.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg CAV1V.HE/CAV1V FH



Free float 100%









Sales (m) 2,443 2,431 2,380

EBITDA (m) 91 19 89


EBIT (m) 65 (9) 61

EBIT margin 2.7% nm 2.6%


ROCE 14.9% 2.9% 11.4%





EV/Sales 0.5 0.4 0.4

EV/EBITDA 12.7 49.3 10.5

EV/EBITDA (adj.) 11.4 22.0 10.5

EV/EBIT 17.8 nm 15.4

P/E (adj.) 20.9 nm 20.2

P/BV 4.4 4.1 3.8

OpFCF yield 5.4% 0.2% 6.0%


EPS (adj.) 0.43 0.07 0.34

BVPS 2.04 1.69 1.82

DPS 0.28 0.22 0.24

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5


vvdsvdvsdy

CAVERION Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Structor S.A. 14%; Varma Mutual

Pension Insurance Co 11%; Keskinäinen

Eläkevakuutusyhtiö Ilmarinen 3%;

of 60


Cramo

Q3/2015a Growth

M€ OP Cons. Diff. OP Cons. Diff.

Sales 186 187 -1% 172 8% 719 720 0%

Total EBIT 37.3 35.9 4% 29.5 27% 106 104 2%


#DIV/0!

PTP 34.6 33.1 5% 25.8 34% 94.8 93 2%

EPS 0.61 0.60 1% 0.47 30% 1.67 1.67 0%

#DIV/0!

DPS #DIV/0! 0.75 0.75 0%


Q3/2016e 2016e

Cramo



Cramo (Neutral) Q3 preview: Fifth (and final) profit warning on the table

Q3 preview: Calmer but still robust growth

The facts: Cramo releases its Q3 results on 26 October 2016.

Our analysis: We expect Cramo's sales growth to decelerate in Q3 from the

previous quarter (+11%) when the timing of Easter underpinned growth. However,

we still predict strong sales growth of 7.8% in Q3 (H1: 8.5%) even though the

weaker SEK is once again beginning to dampen growth. We expect to see a

negative impact of 0.4pp in Q3.

The pick-up of growth in machinery and equipment rental will drive Cramo's

earnings growth. The company communicated in connection with the Q2 results

that the rise in prices will finally start to support earnings, especially in Sweden,

but there is also room for better prices in Finland with construction volumes on

the rise. In terms of geographical areas, we expect to see the strongest growth in

Sweden and Finland (+12%). We estimate that sales will decline in Eastern

Europe and Norway. The problematic segment, Central Europe, showed signs of

an improving earnings trajectory in the Q2 results. The trend in the rental income

of modular space will probably remain favourable.

After the Q2 results, the news flow has been positive for Cramo. The uncertainty

around the advanced construction cycle in Sweden is alleviated by homes prices,

which returned to an uptrend after the jitters caused by the repayment obligation

on mortgage loans. Moreover, building construction volumes have returned to

growth in Norway.

Conclusion & Action: In determining our target price of EUR 24 we have leaned

on the 2017 forecast and EV/EBITA 11.5 (EVEBITDA 6.0). The improved visibility

along with the positive news flow would justify shifting the horizon to 2018. In

such a case, the present forecast would provide upside up to EUR 27–28. We

will, however, make our revisions, if any, after the earnings release when we have

more detailed information available.

Analyst(s):


[email protected]

+358 10 252 4408

Neutral

25.04


24.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg CRA1V.HE/CRA1V FH



Free float 100%









Sales (m) 668 720 750

EBITDA (m) 188 215 232

EBITDA margin 28.1% 29.9% 31.0%

EBIT (m) 78 106 119

EBIT margin 11.7% 14.7% 15.9%


ROCE 6.5% 8.2% 9.1%

Net debt/(cash) (m) 368 386 349




EV/Sales 1.8 2.1 1.9

EV/EBITDA 6.4 6.9 6.3

EV/EBITDA (adj.) 6.4 6.9 6.3

EV/EBIT 15.5 14.1 12.2

P/E (adj.) 16.7 15.0 13.1

P/BV 1.7 2.1 1.9

OpFCF yield 1.7% -2.7% 1.5%


EPS (adj.) 1.14 1.67 1.91

BVPS 11.03 12.00 13.16

DPS 0.65 0.75 0.80

15

16

17

18

19

20

21

22

23

24

25

26


vvdsvdvsdy

CRAMO OMXH (Rebased)Source: Factset

Shareholders: Rakennusmestarit -yhteisö 11%;

Rakennusmestarit Group 3%; Nordea

funds 1.80%;

of 60


Fcc

Spain/Materials, Construction & Infrastructure Analyser


Fcc (Accumulate) Q3 preview: Calmer but still robust growth

CPV 9m results. Strong provisions

The facts: CPV released 9m’16 results

Our analysis: The main novelty are the strong provisions realised (EUR186m) in

Spain and Tunis. Sales fell 1.6% to EUR429m. EBITDA increased 17.6% to

EUR74m thanks to structural cost savings and lower energy costs. Total losses

rises to EUR233m compared to the EUR54m losses 9m’15. Debt dropped 0.5%

to EUR1.376m.

Conclusion: Good operating performance dampened by strong provisions. We

are still expectant on the new strategy to be released once Carlos Slim takes

control of the company.

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Accumulate

7.92


7.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg FCC.MC/FCC SM



Free float 15%









Sales (m) 6,476 6,485 6,738

EBITDA (m) 815 818 865

EBITDA margin 12.6% 12.6% 12.8%

EBIT (m) 324 376 413

EBIT margin 5.0% 5.8% 6.1%


ROCE 3.9% 5.8% 6.1%

Net debt/(cash) (m) 5,474 4,464 4,277

Net Debt/Equity nm 3.3 3.0



EV/Sales 1.0 1.1 1.0

EV/EBITDA 8.3 8.5 7.8

EV/EBITDA (adj.) 8.3 8.5 7.9

EV/EBIT 20.9 18.6 16.4

P/E (adj.) nm nm 45.3

P/BV 9.2 2.6 2.5

OpFCF yield 6.8% 8.3% 8.1%


EPS (adj.) 0.13 0.13 0.17

BVPS 0.74 3.04 3.22

DPS 0.00 0.00 0.00

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5


vvdsvdvsdy

FCC Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: EK 20%; Carlos Slim 61%; Three Bays

4%;

of 60


Lemminkäinen

Q3/2015a Growth


Sales 591 578 2% 569 4% 1,719 1,754 -2%

Total EBIT 42.5 43.2 -2% 21.0 102% 61 46 32%


#DIV/0!

PTP 39.0 36.9 6% 16.8 132% 45.5 28 62%

EPS 1.24 1.14 9% 0.43 187% 1.21 0.61 99%

#DIV/0!

DPS #DIV/0! 0.24 0.35 -31%


Q3/2016e 2016e

Lemminkäinen



Lemminkäinen (Accumulate) CPV 9m results. Strong provisions

Q3 preview: Strong H2 expected

The facts: Lemminkäinen will report its Q3 results on Thursday, 27 October.

Our analysis: We estimate that Lemminkäinen's earnings outlook for H2 is

positive. This year got off to a slow start, but there were some promising signals

in the Q2 report. The order intake was especially strong in paving, but strong in

infra projects, too. The Q3 results in the paving season will largely determine the

full-year results. Paving in Finland has excellent conditions to improve efficiency,

but the company has been having problems in Norway. After the reimbursements

of damages, Lemminkäinen upgraded its EBIT guidance for 2016. EBIT is now

expected to improve clearly in 2016 (previously: "improve"). We expect EBIT to

grow from EUR 37.3m to EUR 60.6m (without the reimbursements EUR 41.6m).

Based on the Helsinki Court of Appeal's decision, Lemminkäinen will receive

around EUR 19m of reimbursements of damages in the asphalt cartel case. The

amount translates into EUR 0.82 per share and around 4% of EV. The damages

were lowered mainly because the Court of Appeal applied a recent precedent of

the Supreme Court relating to a timber cartel and stated that some of the claims

for damages were outdated. Deviating from the District Court's ruling, the Court of

Appeal stated that the government was entitled to compensation because it did

not find evidence that the Finnish Road Enterprise (now Destia) would have been

aware of the cartel. We estimate that the case will almost certainly be submitted

to the Supreme Court, so even this decision will not be final.

Conclusion & Action: We have raised our target price to EUR 18 (from EUR 15)

and upgraded our recommendation to Accumulate (from Neutral) when we shift

our target price horizon to 2018 and add the reimbursements related to the

asphalt cartel damages to the balance sheet. We expect Lemminkäinen to deliver

robust H2 results. Even though the company received a positive decision on the

asphalt cartel damages, we expect the company to be clouded by uncertainty

until the case is handled by the Supreme Court. We base our target price on the

2018 forecasts and EV/EBITA valuation 10.

Analyst(s):


[email protected]

+358 10 252 4408

Accumulate

17.34


18.00


from Neutral

Target price: EUR

Share price: EUR

Reuters/Bloomberg LEM1S.HE/LEM1S FH



Free float 65%









Sales (m) 1,879 1,719 1,717

EBITDA (m) 80 99 84


EBIT (m) 37 61 48

EBIT margin 2.0% 3.5% 2.8%


ROCE 5.5% 10.3% 8.1%





EV/Sales 0.2 0.3 0.2

EV/EBITDA 5.1 4.4 5.0

EV/EBITDA (adj.) 5.1 4.4 5.0

EV/EBIT 10.8 7.2 8.7

P/E (adj.) nm 14.1 16.5

P/BV 0.8 1.1 1.1

OpFCF yield 12.4% 12.9% 10.0%


EPS (adj.) 0.10 1.23 1.05

BVPS 16.26 15.50 16.29

DPS 0.12 0.24 0.41

11

12

13

14

15

16

17

18


vvdsvdvsdy

LEMMINKÄINEN OMXH (Rebased)Source: Factset

Shareholders: PNT Group Oy 19%; Forstén Noora Eva

Johanna 10%; Varma Mutual Pension

Insurance Company 10%;

of 60


Saint Gobain

France/Materials, Construction & Infrastructure Analyser


Saint Gobain (Buy) Q3 preview: Strong H2 expected

Less strong momentum expected in Q3

The facts: publication of Q3 2016 revenues on 27 October after market. This

should confirm the positive trend reversal seen since Q4-2015, of course at a

weaker rate than in Q2 2016. We expect revenues of EUR9,756m. In addition to

this punctual publication, management will have to respond to investors’

questions on three key points: 1) downstream retracing of upstream momentum

(property), boosted by the monetary floodgates being opened, mainly visible for

new housing but apparently not yet for maintenance; 2) the group’s ability to

boost its sales prices, particularly for builder merchants; 3) the “state of the union”

for pipes.

Our analysis: We expect revenues of EUR9,756m, down by 2.1%, affected by a

forex effect (-2.2%) and a negative scope effect (-1.4%). Organic growth should

remain positive but less strongly than in Q2 (+1.6% vs. +3.8%) which had been

buoyed by a positive effect from working days. The price effect should turn out to

be slightly negative (-0.3%) dragged down by the deflation of sales prices in the

Distribution segment (-1.1%E), particularly in France (-0.8% to -1%). Organic

growth should be sustained by the solid nature of the Flat Glass and Interior

Finishing segments.

Conclusion & Action: IV of EUR44.3 confirmed.

Analyst(s):

Jean-Christophe Lefèvre-Moulenq, CM - CIC Market Solutions [email protected]

+33 1 53 48 80 65

Buy

39.23


44.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg SGOB.PA/SGO FP



Free float 80%









Sales (m) 39,623 39,424 39,886

EBITDA (m) 3,801 4,069 4,260


EBIT (m) 2,593 2,851 3,035

EBIT margin 6.5% 7.2% 7.6%

Net Profit (adj.)(m) 461 1,284 1,443

ROCE 6.2% 6.9% 7.3%

Net debt/(cash) (m) 4,797 4,909 4,157




EV/Sales 0.8 0.8 0.7

EV/EBITDA 8.5 7.4 6.9

EV/EBITDA (adj.) 8.5 7.4 6.9

EV/EBIT 12.5 10.5 9.7

P/E (adj.) 48.8 17.1 15.2

P/BV 1.2 1.1 1.1

OpFCF yield 5.1% 5.0% 6.4%


EPS (adj.) 0.82 2.29 2.58

BVPS 33.79 34.20 35.31

DPS 1.24 1.25 1.30

of 60


Uponor

Q3/2015a Growth

M€ OP Cons. Diff. Low High

Sales 296 298 -1% 293 306 274 8%

Total EBIT 32.9 32.0 3% 24.8 36.7 24.6 34%

Total EBIT margin 11.1 % 10.8 % 9.0 %

#DIV/0!

PTP 26.4 23.2 14% 21.0 34.0 25.4 4%

EPS 0.21 0.27 -20% 0.19 0.30 0.23 -6%

#DIV/0!

DPS #DIV/0!


Q3/2016e

Uponor



Uponor (Buy) Less strong momentum expected in Q3

Q3 preview: Growth potential from Europe

The facts: Uponor releases its Q3 results on 28 October 2016.

Our analysis: Uponor expects sales and comparable EBIT to improve in 2016

from 2015. After H1, comparable EBIT is 32% ahead of the comparison year, so

we find it possible that the company will add the word "clearly" to its EBIT

guidance. We expect comparable EBIT to grow 26%, which is also the consensus

expectation.

We expect Uponor Infra to drive earnings growth in Q3 thanks to the cost savings

and the better sales mix. Sales growth in Building Solutions – Europe will likely

calm down from the Q2 level of 6%, which is supported by a higher number of

selling days, to around 4% (Q1: 2%). The segment's results will be underpinned

by volume growth and the transformation programme targeting annual savings of

EUR 20m. We expect sales growth in North America to remain unchanged at

15% and earnings to return to growth as a solution was achieved for the lack of

raw materials for plastic fittings during the quarter.

Conclusion & Action: We are upgrading our target price to EUR 20 and our

recommendation to Buy when we transfer our target price basis to the 2018

forecasts (12.5xEV/EBIT 12.5). Uponor's valuation multiples for 2017 are slightly

below the typical level, the earnings momentum looks good and Building

Solutions – Europe has potential to achieve faster-than-expected volume growth.

Residential building permits in the EU-18 countries are growing by 20% and the

sales growth forecasts for Building Solutions – Europe are at 3% for 2017–2018

(both our and consensus forecast).

Analyst(s):


[email protected]

+358 10 252 4408

Buy

16.67


20.00


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg UNR1V.HE/UNR1V FH



Free float 75%









Sales (m) 1,051 1,119 1,163

EBITDA (m) 113 135 155

EBITDA margin 10.7% 12.1% 13.3%

EBIT (m) 76 96 116

EBIT margin 7.3% 8.6% 10.0%


ROCE 14.0% 15.9% 19.1%





EV/Sales 1.0 1.2 1.1

EV/EBITDA 9.3 9.6 8.2

EV/EBITDA (adj.) 9.3 9.6 8.2

EV/EBIT 13.7 13.5 10.9

P/E (adj.) 23.8 20.3 17.4

P/BV 4.0 4.7 4.1

OpFCF yield 2.4% 3.5% 5.8%


EPS (adj.) 0.57 0.82 0.96

BVPS 3.39 3.55 4.05

DPS 0.44 0.46 0.55

10

11

12

13

14

15

16

17

18


vvdsvdvsdy

UPONOR Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Oras Invest Oy 23%; Varma Mutual

Pension Insurance Co 5%; Ilmarinen

Mutual Pension Insurance Co 4%;

of 60


YIT

Q3/2015a Growth


Sales 446 439 2% 392 14% 1,778 1,727 3%

Total EBIT 22.0 23.0 -4% 20.3 8% 83 81 2%


#DIV/0!

PTP -12.0 17.0 n.a. -0.8 1400% 19.9 47 -57%

EPS -0.10 0.11 n.a. -0.01 1312% 0.10 0.29 -65%

#DIV/0!

DPS #DIV/0! 0.24 0.24 2%


Q3/2016e 2016e

YIT



YIT (Buy) Q3 preview: Growth potential from Europe

Q3 preview: Russia staging a return to share valuation

The facts: YIT releases its Q3 results on 27 October 2016.

Our analysis: YIT's positive message from the Capital Markets Day and the RUB

appreciation have lent considerable support to the share price. The share price,

which is approaching the target price, already factors in a big share of the uptrend

in Finland, but the improving economic conditions in Russia have made earnings

growth possible on a broader basis.

We estimate that YIT can reach EBIT of around EUR 15–25m in Russia in 2018

in a scenario where the RUB appreciates by about 10% from its present level and

purchasing power and home prices rise slightly. The scenario offers upside

potential up to a price level of around EUR 9–10. The earnings level of EUR 40–

70m of 2010–2014 is still far away because at the time the business volume was

double and the RUB much stronger. The CEE countries offset the deficit of

Russia nicely, by nearly EUR 30m in 2018, according to our estimate. Thus the

price level of EUR 10 after the demerger (Caverion) no longer seems distant.

We estimate that the Q3 results and profit guidance will not be subject to major

expectations. EBIT is still very weak compared to the outlook for the following

years. Furthermore, the company has disclosed in advance its residential sales

figures. The Q3 results will be burdened by the writedowns of EUR 27m in

Russia. We expect adjusted EBIT to be slightly higher than last year. In view of

the investment case, it is important that consumer starts are edging up and the

margin has improved in the Housing Finland and CEE segment. In our view, the

building contract for the Mall of Tripla can support the earnings of Business

Premises and Infrastructure in H2.

Conclusion & Action: We have not changed our target price of EUR 8 or our

Buy recommendation ahead of the Q3 results, but estimate that the forecasts for

Russia will be under some upside pressure.

Analyst(s):


[email protected]

+358 10 252 4408

Buy

7.81


8.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg YTY1V.HE/YTY1V FH



Free float 100%









Sales (m) 1,651 1,779 1,837

EBITDA (m) 78 97 129


EBIT (m) 66 85 116

EBIT margin 4.0% 4.8% 6.3%


ROCE 4.7% 6.0% 8.2%

Net debt/(cash) (m) 529 530 552




EV/Sales 0.7 0.8 0.7

EV/EBITDA 14.6 14.5 10.6

EV/EBITDA (adj.) 14.6 14.5 10.6

EV/EBIT 17.3 16.6 11.7

P/E (adj.) 32.7 25.7 14.5

P/BV 1.3 1.7 1.6

OpFCF yield 31.2% -2.3% -0.3%


EPS (adj.) 0.16 0.30 0.54

BVPS 4.18 4.65 5.03

DPS 0.22 0.24 0.26

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

YIT OMXH25 (Rebased)Source: Factset

Shareholders: Keskinäinen työeläkevakuutusyhtiö

Varma 9%; Varma Mutual Pension

Insurance Co 5%; Mandatum Life 4%;

of 60


Alma Media

EURm OP Cons. Diff. OP Cons. Diff.

Alma Regions 31.6 31.1 1% 129 128 1%

Alma Talent 24.0 24.5 -2% 119 118 1%

Alma Markets 17.2 17.7 -3% 69 72 -4%

Alma News & Life 10.7 10.9 -2% 46 46 -1%

Eliminations -1.4 -2.0 30% -5 -6 24%

Total sales 82.0 82.6 -1% 358 357 0%


EBIT

Alma Regions 2.8 #DIV/0! 9.6 #DIV/0!

Alma Talent 2.3 #DIV/0! 13.9 #DIV/0!

Alma Markets 5.3 #DIV/0! 18.3 #DIV/0!

Alma News & Life 1.3 #DIV/0! 6.2 #DIV/0!

Eliminations -2.5 #DIV/0! -13.4 #DIV/0!

Total EBIT 9.2 10.3 -11% 30.8 34.7 -11%

EBIT margin

Alma Regions 9.0 % 7.4 %

Alma Talent 9.6 % 11.7 %

Alma Markets 30.6 % 26.6 %

Alma News & Life 12.0 % 13.7 %

Total EBIT margin 11.2 % 12.5 % 8.6 % 9.7 %

PTP 8.9 10.1 -12% 29.7 33.7 -12%

EPS 0.07 0.08 -7% 0.24 0.26 -9%

DPS 0.15 0.17 -12%


Q3/2016e 2016e

Alma Media

Finland/Media Analyser

MEDIA

Alma Media (Neutral) Q3 preview: Russia staging a return to share valuation

Q3 preview: Good Q3 results in the cards

The facts: Alma Media will report its Q3 results on Friday, 28 October at around

7.30 am CET. The company upgraded its earnings guidance for 2016 on 14

September, and according to the recent guidance, the company’s FY sales and

adjusted EBIT will increase considerably YoY.

Our analysis: We expect Q3 EBIT to amount to EUR 9.2m (EUR +1.6m YoY)

and our forecast is below the consensus (FactSet) median (EUR 10.3m). The

consensus forecast is indicative as it only contains three forecasts.

With regard to the company’s segments, the Markets segment continues a solid

earnings performance in Q3. We estimate that the segment’s sales will increase

by nearly 17% (YoY) and the EBIT margin to rise to above 30%. On the basis of

our assumptions, the Q3 EBIT of the Markets segment is EUR 5.3m, which is

58% of the whole company’s EBIT. We also estimate that all other segments

improve their results from the comparison period. This is due to a slightly better

market situation and a tight cost discipline that is typical for the company.

Conclusion & Action: The share price has increased by 77% from the beginning

of the year, and the discount to the peer group has also been removed. We

reconfirm our target price of EUR 5.50, on which 2018 EV/EBIT is in line with the

peer group at ~11x. We reiterate our Neutral recommendation.

Analyst(s):

Kimmo Stenvall, OP Corporate Bank

[email protected]

+358 10 252 4561

Neutral

5.33


5.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg ALN1V.HE/ALN1V FH



Free float 70%









Sales (m) 292 357 360

EBITDA (m) 35 47 56

EBITDA margin 11.9% 13.3% 15.7%

EBIT (m) 18 30 42

EBIT margin 6.1% 8.4% 11.6%


ROCE 6.3% 11.0% 15.8%





EV/Sales 1.1 1.4 1.3

EV/EBITDA 8.9 10.3 8.2

EV/EBITDA (adj.) 8.9 10.3 8.2

EV/EBIT 17.5 16.2 11.2

P/E (adj.) 22.9 23.3 16.0

P/BV 1.9 3.2 2.9

OpFCF yield -2.3% 6.7% 9.3%


EPS (adj.) 0.13 0.23 0.33

BVPS 1.56 1.67 1.86

DPS 0.12 0.15 0.17

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5


vvdsvdvsdy

ALMA MEDIA OMXH (Rebased)Source: Factset

Shareholders: Ilkka Corporation 27%; Mutual Pension

Insurance Company Varma 19%; Life

Insurance Company Mandatum 7%;

of 60


IOL

Italy/Media Analyser

MEDIA

IOL (Buy) Q3 preview: Good Q3 results in the cards

Making Italian SMEs digital

The facts: We publish our initiating coverage report today.

Our analysis:

IOL, reloaded. IOL was officially created on June 20, 2016 from the combination of SEAT with IOL. SEAT had emerged from a financial restructuring and was controlled since the end of 2014 by distressed debt funds. In turn IOL came from the spin-off of the Libero portal from Wind to Naguib Sawiris, followed by the acquisition of Matrix/Virgilio from Telecom Italia in 2012.

A still interesting market. Italian advertising should grow by c 4% in 2016 (to EUR 8.2bn), driven by digital (>10% growth including search and social). Italy is one of the most interesting markets in Europe given an industrial fabric made of SMEs the relatively low adv investment per capita, and the under-penetration of digital.

Leadership and assets. IOL is a leading operator in local adv with 234K customers among SMEs, and the undisputed Italian internet leader with 68m daily page views from 4.1m DAUs and 2.0m Mobile DAUs (Audiweb, June 2016). IOL has a multi-platform approach, operates a strong brand portfolio (Libero, Virgilio, PagineGialle) and can leverage a network of 1,056 agents and 70 agencies in Italy.

Positive H1 2016 results. Revenues were still down Y/Y (-8.8% on a pro-forma basis) mainly due to the decline of traditional off-line activities, but EBITDA was up by 37.5% (5pp margin improvement, to 14.8%) as all the cost-items were lower Y/Y, net income was positive and Free Cash Flow more than doubled vs. H1 2015.

Industrial Plan. The mgmt is working on the update of its strategic/industrial plan which will focus on improving products, strengthening distribution and optimizing the combined assets of SEAT and IOL. The main financial targets disclosed last January pointed to revenue stabilization (back to the 2015 level) by 2018, EBITDA growing at 40/45% 3Y CAGR, to attain 25/30% margin and FCF reaching 55/60% of EBITDA in 2018. In absence of M&A, EUR 158.5m NFP in Dec-2018.

Compelling valuation. IOL trades at just 1.8x EV/EBITDA 2017, implying a significant discount vs. the main local and international peers and European companies more in general. The DCF points to a EUR 3.5 Fair Value, suggesting the current price level factors in a EUR 16.5m perpetual FCF, which is significantly below our estimates for the next years even net of NWC contribution.

Positive financial position. The huge debt has penalized SEAT for a long time and is still affecting other directories' players (Eniro, Solocal). SEAT emerged debt-free as a result of the restructuring, and IOL had a pro-forma net cash of EUR 75m at end-2015 after the payment of EUR 65m for the PTO. The NFP increased by EUR 28m in the following six months to EUR 102m at end June 2016.

Main risks/negatives. IOL operates in the cyclical advertising business, where the digital component is definitely more dynamic but also more subject to competition and potentially disruptive innovation. The free float is still very low at 11.1%.

Conclusion & Action: We initiate our coverage on Italiaonline (IOL) with a Buy recommendation and EUR 2.8/sh Target Price (26% upside). We appreciate the new equity story following the merger of Seat Pagine Gialle (SEAT) and IOL, including significant value creation via synergies of products, customers, and technology and distribution networks. While revenue inflection could still take time to materialize, the cost optimization potential is still significant, IOL does and should continue to generate cash and the net financial position is positive for above EUR 100m.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Enrico Filippi, CEFA Banca Akros

[email protected]

+39 02 4344 4071

Buy

2.22


2.80

Initiating Coverage

Target price: EUR

Share price: EUR

Reuters/Bloomberg IOL.MI/IOL IM



Free float 11%









Sales (m) 465 396 391

EBITDA (m) 54 66 73

EBITDA margin 11.5% 16.5% 18.7%

EBIT (m) (9) 14 23

EBIT margin nm 3.4% 5.9%

Net Profit (adj.)(m) (2) 2 9

ROCE -1.7% 3.1% 5.3%

Net debt/(cash) (m) (75) (112) (120)

Net Debt/Equity -0.2 -0.3 -0.3

Debt/EBITDA -1.4 -1.7 -1.6

Int. cover(EBITDA/Fin. int) 52.6 (163.8) (130.7)

EV/Sales 0.6 0.4 0.3

EV/EBITDA 5.2 2.2 1.8

EV/EBITDA (adj.) 5.2 2.2 1.8

EV/EBIT nm 10.4 5.8


P/BV 1.0 0.7 0.7

OpFCF yield -4.1% -6.6% 8.5%


EPS (adj.) (0.02) 0.02 0.07

BVPS 2.99 3.01 3.07

DPS 0.00 0.01 0.05

1.5

2.0

2.5

3.0

3.5

4.0

4.5


vvdsvdvsdy

IOL FTSE Italy All Share (Rebased)Source: Factset

Shareholders: N. Sawiris 59%; Golden Tree funds 16%;

GL Europe 14%;

of 60


CGG

France/Oil Services Analyser

OIL SERVICES

CGG (Buy) Making Italian SMEs digital

Major contract won in offshore Mexico

The facts: Mexican oils services company Pemex has awarded CGG with a

major marine wide-azimuth and imaging acquisition contract.

Our analysis: This new wide-azimuth marine survey will cover an area of around

10,000km2. The images will be acquired perpendicularly over the existing wide-

azimuth data acquired by CGG in 2010. The final imaging obtained from the

combination of these orthogonal wide-azimuth dataset should enable Pemex to

better understand the geological obstructions situated under the complex salt

canopy.

The company will thus enhance its knowledge of the complex geological area with

huge potential located in the deep waters of the Perdido region in Mexico. On the

US side, the Perdido Fold Belt area has been the object of several discoveries,

notably by Shell and Chevron, over the past decade. Many of them have already

been developed and other development projects are being finalised.

The wide-azimuth marine acquisition survey is set to begin in early 2017. The first

intermediary imaging (pre-stack depth migration RTM) will be available at the end

of 2017. Final and complete data are expected in 2018. Data will be processed in

CGG’s imaging centres in Villahermosa and Houston.

Conclusion & Action: We value the size of this contract, which includes the

acquisition and processing of seismic data, at between USD50m and USD100m.

This is excellent news for CGG, as the contract also signals the start of

exploration activity again in the Gulf of Mexico.

Analyst(s):

Jean-Luc Romain, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 66

Buy

26.77


86.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg GEPH.PA/CGG FP



Free float 82%








Key financials (USD) 12/15 12/16e 12/17e

Sales (m) 2,101 1,616 1,747

EBITDA (m) 527 456 688

EBITDA margin 25.1% 28.2% 39.4%

EBIT (m) (1,154) (39) 149

EBIT margin nm nm 8.5%

Net Profit (adj.)(m) (274) (181) (57)

ROCE -23.6% -0.9% 3.2%

Net debt/(cash) (m) 2,331 1,972 2,047




EV/Sales 1.0 1.4 1.3

EV/EBITDA 4.2 4.9 3.4

EV/EBITDA (adj.) 4.2 4.9 3.4

EV/EBIT nm nm 15.5

P/E (adj.) nm nm nm

P/BV 0.2 0.5 0.5

OpFCF yield -104.8% 4.5% -11.7%


EPS (adj.) (49.63) (8.16) (2.59)

BVPS 212.80 59.75 57.16

DPS 0.00 0.00 0.00

15

20

25

30

35

40

45

50

55

60

65


vvdsvdvsdy

CGG SBF 120 (Rebased)Source: Factset

Shareholders: BPI France 7%; IFP EN 4%; DNCA

Finance 7%; CGG Actionnariat 0.04%;

Treasury shares 0.53%;

of 60


Saipem

Italy/Oil Services Analyser

OIL SERVICES

Saipem (Accumulate) Major contract won in offshore Mexico

Decent results expected in Q3

The facts: Saipem is due to publish its third quarter results today. A conference

call is scheduled at 6:30pm CET.

Our analysis: we summarize our preview in the following table:

Q3 15 Q3 16e Y/Y 9M 15 9M 16e Y/Y

Revenues 3,072 2,521 -17.9% 8,445 7,796 -7.7%

EBITDA 321 316 -1.7% 124 898 nm

margin 10.4% 12.5%

1.5% 11.5%

EBIT 150 137 -8.7% -640 374 nm

margin 4.9% 5.4%

-7.6% 4.8%

EBIT adj.

137

-436 461 nm

margin

5.4%

-5.2% 5.9%

PBT 69 106 53.6% -824 282 nm

Net profit 54 68 26.3% -866 121 nm

2015 nine months results were hit by some EUR 929m write-downs in current

assets.

The show in the chart below the 2016 guidance unveiled at the end of July after a

slightly downwards revision.

2016 guidance

Revenues ~ EUR 10.5bn

EBIT ~ EUR 600m

Net Profit ~ EUR 250m

Net debt ~ EUR 1.5bn

Investments EUR 400m

Conclusion & Action: we expect the company’s results to be solid. The next few

quarters are expected to be weaker since the long term contracts signed before

the crisis are about to expire. However, the present recovery in oil prices is clearly

very good news for Saipem and the off-shore part of the business is expected to

show signs of recovery starting from H2 2017/beginning of 2018

Analyst(s):

Francesco Sala, Banca Akros

[email protected]

+39 02 4344 4240

Accumulate

0.44


0.46



Target price: EUR

Share price: EUR

Reuters/Bloomberg SPMI.MI/SPM IM



Free float 57%









Sales (m) 11,512 10,576 8,945

EBITDA (m) 508 1,238 1,213


EBIT (m) (452) 530 525


Net Profit (adj.)(m) (806) 399 395

ROCE -4.0% 7.3% 7.2%

Net debt/(cash) (m) 5,390 1,500 1,047



Int. cover(EBITDA/Fin. int) 2.1 high high

EV/Sales 0.5 0.5 0.6

EV/EBITDA 10.4 4.6 4.2

EV/EBITDA (adj.) 10.4 4.6 4.2

EV/EBIT nm 10.7 9.8

P/E (adj.) nm 11.0 11.1

P/BV 0.0 0.6 0.6

OpFCF yield -2187.1% 10.4% 12.3%


EPS (adj.) (1.83) 0.04 0.04

BVPS 7.87 0.73 0.77

DPS 0.00 0.00 0.01

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70


vvdsvdvsdy

SAIPEM FTSE MIB (Rebased)Source: Factset

Shareholders: ENI 30%; FSI 13%;

of 60


Interparfums

France/Personal Goods Analyser

PERSONAL GOODS

Interparfums (Buy) Decent results expected in Q3

Good Q3 sales figures

The facts: Q3 revenues, published this morning, are well above our forecasts at

EUR111m, up 11%, o/w +14% on constant forex and +7% organic.

Our analysis: (Q3-16 vs Q3-15 revenues, reported change) Of the three strategic

pillars, Montblanc (EUR29m, +10%) was boosted by the launch of Legend Spirit,

despite tough comps. Jimmy Choo (EUR25m, -19%) dipped after an exceptional

Q3-15 (+46%), when Illicit was launched. Lanvin, although exposed to the

Russian market, was resilient (+1%) thanks to the placement of Modern Princess.

The jewellers (Boucheron and Van Cleef & Arpels) also grew, while the other

historical brands in the portfolio suffered fairly severe erosion against a backdrop

of declining listings with retailers and widespread weakness in markets which had

been buoyant in recent years (South America, Eastern Europe, Middle-East).

Overall, the brands in the portfolio at end-2014 were down 6%. The Corporate

development in 2015 picked up the slack, allowing the company to continue its

profitable growth. Rochas posted sharp growth y-o-y in Q3 (+80%) on easy

comps. And Coach recorded an excellent level of activity, topping targets, at

EUR12m, thanks to the launch of the first range of products for women.

Management has thus raised its top-line target for the year by EUR10m to

EUR350m, in line with our forecasts, but had no additional comments on the EBIT

margin, which we expect at 13%.

Conclusion & Action: In a challenging perfume market, the group once again

set itself apart in Q3 thanks to its initiatives, its launches and its ongoing market

penetration in the US. The weak markets (South America, Eastern Europe,

Middle-East) are likely to recover in 2017. We maintain our Buy rating.

Analyst(s):

Arnaud Cadart, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 86

Buy

25.91


25.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg IPAR.PA/ITP FP



Free float 27%









Sales (m) 327 350 376

EBITDA (m) 59 54 59

EBITDA margin 18.1% 15.3% 15.6%

EBIT (m) 46 46 50

EBIT margin 14.0% 13.0% 13.3%


ROCE 12.1% 11.7% 12.8%

Net debt/(cash) (m) (135) (151) (167)


Debt/EBITDA -2.3 -2.8 -2.8

Int. cover(EBITDA/Fin. int) 88.2 (41.2) (39.1)

EV/Sales 1.5 1.8 1.7

EV/EBITDA 8.4 12.1 10.7

EV/EBITDA (adj.) 8.4 12.1 10.7

EV/EBIT 10.9 14.2 12.6

P/E (adj.) 21.6 28.3 25.8

P/BV 1.6 2.2 2.1

OpFCF yield -12.2% 3.8% 4.0%


EPS (adj.) 0.95 0.91 1.01

BVPS 12.61 11.94 12.49

DPS 0.50 0.53 0.58

17

18

19

20

21

22

23

24

25

26

27


vvdsvdvsdy

INTERPARFUMS CAC Small & Mid 190 (Rebased)Source: Factset

Shareholders: Inter Parfums Holding 73%; Treasury

stock 0.19%;

of 60


Luxottica

Italy/Personal Goods Analyser

PERSONAL GOODS

Luxottica (Accumulate) Good Q3 sales figures

9M 16 sales, in line with our estimates; Price Target from EUR 50/sh to EUR 48.3/sh

The facts: Luxottica released its 9M 16 sales results yesterday after market

closure, a conf. call followed. Revenues were in line with our estimates, in the

mid/high range of the consensus.

Our analysis: As expected, the wholesale was affected by the MAP policy in

NAM (-11.2% in Q3 16 Currency Neutral ) which was put in place in order to

protect the brand equity (essentially Ray Ban and online channel); this coupled

with the Oakley sport channel re-organization: overall wholesale in NAM dropped

4.8% in 9M 16 CN. The retail channel was up 1.5% in 9M 16 CN and 2.4% in Q3

16, driven by SGH (+2.9% comps and +8% overall in Q3 16); Lenscrafter comps

were weak (-1.6%in Q3 16 due to sub optimal execution in retail transformation

and lower promotional advertising). There were 47 new Lens stores in Macy’s at

the end of the quarter.

European performance was positive in every country (ex-Turkey), up 8.3% CN in

Q3 16; driven both by wholesale and retail (there were 50 SGH stores in Galèrie

Lafayette at the end of the quarter).

Asia (flat CN in Q3 16 and in 9M 16) suffered from the channel re-organization in

China (without China and Japan the macro area would have been positive to

+4% in Q3 16 CN).

Latam delivered sound results (+6.8% CN in Q3 16 and +11% in 9M 16).

Overall retail comps. were up +0.6% in 9M 16 (+0.7% in Q3 16); the retail

channel, in addition to new openings, benefitted also from the more favourable

retail calendar.

Luxottica: 9M 16 sales results

EUR m Q3 15 Q3 16 Y/Y Chg. 9M 15 9M 16 Y/Y Chg.

Wholesale 826.1 800.0 -3.2% 2,834.1 2,770.0 -2.3%

Retail 1,328.8 1,425.0 7.2% 3,987.6 4,174.0 4.7%

Retail adj. 1,373.1 1,425.0 3.8% 4,117.7 4,174.0 1.4%

Total sales 2,154.9 2,225.0 3.3% 6,821.7 6,944.0 1.8%

Total sales adj. 2,199.2 2,225.0 1.2% 6,951.8 6,944.0 -0.1%

Source: company data

Q4 16E will benefit from improving trends both in North America and in China

(September and October) and from a more favourable calendar of retail in NAM.

FY 17E growth is expected to accelerate.

We cut our FY 16E top line estimates by 2.3% and FY 17Etop line estimates by

2.3%; our FY 16E EBITDA is cut by 4.5% and FY 17E EBITDA margin by 6.5%.

We obtain a new Price Target of EUR 48.3/sh.

Conclusion & Action: The management is undertaking many actions in order to

benefit the most from Luxottica’s vertical model (efficiencies, centralizations,

simplification, better service to customers, also through Lenses production in 3

main production facilities, leaner retail organization in Lenscrafters..) and benefits

could start in H2 17.

We cut our price target but keep our Accumulate since we believe that the mega-

trend (prescription frames needs and sun/fashion eyewear feel-good factor)

where Luxottica is the first player is still developing, however we hardly see

Luxottica back to the past performances in the short time.

Analyst(s):

Giada Cabrino, CIIA, Banca Akros

[email protected]

+39 02 4344 4092

Accumulate

42.62


48.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg LUX.MI/LUX IM



Free float 24%









Sales (m) 8,837 9,086 9,560

EBITDA (m) 1,853 1,908 2,013

EBITDA margin 21.0% 21.0% 21.1%

EBIT (m) 1,376 1,413 1,492

EBIT margin 15.6% 15.6% 15.6%


ROCE 13.0% 13.0% 13.5%

Net debt/(cash) (m) 1,006 806 497




EV/Sales 3.5 2.4 2.2

EV/EBITDA 16.5 11.4 10.7

EV/EBITDA (adj.) 16.5 11.4 10.7

EV/EBIT 22.2 15.4 14.4

P/E (adj.) 36.1 24.3 22.9

P/BV 5.4 3.5 3.3

OpFCF yield 2.3% 3.0% 3.5%


EPS (adj.) 1.67 1.75 1.86

BVPS 11.19 12.04 12.96

DPS 0.89 0.93 1.00

40

45

50

55

60

65


vvdsvdvsdy

LUXOTTICA Stoxx Personal Goods (Rebased)Source: Factset

Shareholders: Del Vecchio 66%; Giorgio Armani 5%;

of 60


Tod’s

Italy/Personal Goods Analyser

PERSONAL GOODS

Tod's (Neutral) 9M 16 sales, in line with our estimates; Price Target from EUR 50/sh to EUR 48.3/sh

9M 16 sales, in line

The facts: Tod’s released its 9M 16 sales yesterday after market closure, (conf.

call followed) in line.

Our analysis: 9M 16 revenues were down 4.4% at constant currencies. By

brand, we noted the upbeat performance of Roger Vivier, (up 5.5% const. curr. in

9M 16) in every market, except for the US; Fay was positive as well (+4% in 9M

16); with a slight deceleration in Q3 16 Y/Y. By area, was hit by the general

weakness in consumption and by lower tourists flow; Europe broadly flat; in the

Americas the local consumption partially offset lower tourist purchases; Greater

China slightly improved in Q3 16. By product: leather goods sales were down

10% (with no improvement in Q3 16), while shoes revenues dropped 2.9% (a

little worse than in H1 16). The retail channel delivered -6.1% in +9M 16 on the

back of -14.6% SSSG and +8.5% space contribution ; wholesale was flat. The

slight deterioration in Q3 16 of SSSG (-15% est.) was due to July and August

while in September and the performance is less negative.

Tod’s 9M 16 sales results

EUR m Q3 15 Q3 16 Y/Y Chg. 9M 15 9M 16 Y/Y Chg.

Italy 101.2 95.1 -6.0% 254.1 243.9 -4.0%

as % of sales 37.3% 36.6%

32.3% 32.2%

Europe 67.5 68.2 1.0% 189.7 188.3 -0.7%

as % of sales 24.9% 26.2%

24.1% 24.9%

Americas 22 20.8 -5.5% 73.9 69.5 -6.0%

as % of sales 8.1% 8.0%

9.4% 9.2%

Greater China 49.6 45.9 -7.5% 167.8 152.9 -8.9%

as % of sales 18.3% 17.6%

21.3% 20.2%

RoW 31.3 30.1 -3.8% 101.4 103.1 1.7%

as % of sales 11.5% 11.6%

12.9% 13.6%

Total 271.6 260.1 -4.2% 786.9 757.7 -3.7%

Source: company data and Banca Akros elaborations

From the call we have understood that starting from mid-August to date the

performance in UK has improved, followed by Mainland China (from September,

thanks to stronger local consumption) and by the US (driven by local

consumption). Expectations for new bags in the “core” segment are for an

increasingly recovery starting from Q4 16 when they’ll be in the shops.

The S/S 17 order backlog (now at 2/3) is low single digit negative (like-for-like, or

considering the same number of customers Y/Y).

Guidance: -1.7% FY 16E (or +4% Q4 16E) top line guidance is confirmed

(excluding the wholesale), implying mid-single—digit down SSSG and at least

+8% space contribution (est.). The 18% consensus EBITDA margin is seen

challenging but doable.

Conclusion & Action: On the back of these results, in line with estimates, and

on the back of the company’s indications, we won’t change our cautious view on

the stock even though we believe that the first signs of the strategy’s fine-tuning

might be visible in FY 17E.

Analyst(s):

Giada Cabrino, CIIA, Banca Akros

[email protected]

+39 02 4344 4092

Neutral

50.80


53.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg TOD.MI/TOD IM



Free float 32%









Sales (m) 1,037 1,021 1,062

EBITDA (m) 203 189 207

EBITDA margin 19.5% 18.5% 19.5%

EBIT (m) 149 135 151

EBIT margin 14.3% 13.2% 14.3%


ROCE 13.9% 11.3% 11.2%

Net debt/(cash) (m) (134) 111 102

Net Debt/Equity -0.2 0.2 0.1

Debt/EBITDA -0.7 0.6 0.5


EV/Sales 2.1 1.8 1.8

EV/EBITDA 10.9 9.9 9.0

EV/EBITDA (adj.) 10.9 9.9 9.0

EV/EBIT 14.9 13.9 12.3

P/E (adj.) 24.1 18.7 16.6

P/BV 2.6 2.5 2.2

OpFCF yield 2.7% -21.9% 6.6%


EPS (adj.) 3.03 2.72 3.07

BVPS 28.16 19.99 23.06

DPS 2.00 3.20 3.40

45

50

55

60

65

70

75

80

85


vvdsvdvsdy

TOD'S Stoxx Personal Goods (Rebased)Source: Factset

Shareholders: Della Valle Diego 61%; Oppenheimer

4%; Arnault Bernard 3%; Capital

Research and Management 5%;

of 60


Altran

France/Software & Computer Services Analyser


Altran (Buy) 9M 16 sales, in line

New acquisition in Germany improves the region’s outlook

The facts: Altran announced this morning that it had acquired Swell, an

engineering company specialised in automobiles. Based in the Czech Republic, it

has large clients in Germany. We put revenues at ~EUR10m.

Our analysis: Swell is an engineering company with expertise in automobile

tests, prototyping and Computer Aided Engineering (CAE). The client portfolio

comprises car manufacturers and, especially, equipment manufacturers (Bosch,

Continental and Magna), primarily in Germany.

The acquisition responds to two major issues in the 2020 plan:

1. Restructure and develop the German division: the goal is to generate

revenues of EUR400m by 2020 (vs. EUR220m in 2015) through restructuring the

existing division This transaction, like that of Benteler, is a positive signal for the

ongoing restructuring. These two deals, both companies specialised in autos, will

enable Altran to beef up its shortlisting in the industry where momentum is still

difficult for the existing business.

2. Develop a Globalshore platform: offshore in India and nearshore in Eastern

Europe, South and North Africa. This transaction is set to respond to the latter problem

thanks to the 160 employees in the Czech Republic.

Conclusion & Action: One week after the announced acquisition of Benteler, the

sentiment is still the same, i.e. that these transactions are inevitable to become a

reference player in the outsourced R&D market in Europe. This news backs up

the investment case set out in our report published on 14 October. Of course,

integration risk is omnipresent if we look at the group’s history in the region but

new management should benefit from this experience to not repeat the same

mistakes. These transactions are also a sign that the division is back on solid

ground, a vital component in achieving an underlying EBIT margin of 13% by

2020 (~50% of operating leverage).

Analyst(s):

Kévin Woringer, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 69

Buy

13.58


15.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ALTR.PA/ALT FP



Free float 76%









Sales (m) 1,945 2,136 2,285

EBITDA (m) 181 220 240


EBIT (m) 155 193 212

EBIT margin 8.0% 9.0% 9.3%


ROCE 11.2% 11.5% 12.2%

Net debt/(cash) (m) 191 251 189




EV/Sales 1.2 1.2 1.1

EV/EBITDA 13.0 12.0 10.7

EV/EBITDA (adj.) 11.3 11.0 9.9

EV/EBIT 15.2 13.6 12.1

P/E (adj.) 17.7 16.5 15.0

P/BV 2.7 2.7 2.4

OpFCF yield 3.7% 3.9% 4.4%


EPS (adj.) 0.70 0.82 0.90

BVPS 4.54 5.07 5.63

DPS 0.15 0.19 0.24

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0


vvdsvdvsdy

ALTRAN Stoxx Software & Computer Services (Rebased)Source: Factset

Shareholders: Altrafin Participations (Apax Partners)

16%; Alexis KNIAZEFF 4%; Hubert

MARTIGNY 4%; Managers 0.20%;

of 60


Tieto

M€ Q3a OP Cons. Diff.

Sales

Technology Services and Modernization 179 180 180 177 2%

Business Consulting and Implementation 30 34 32 28 22%

Industry Solutions 106 108 112 101 7%

Product Development Services 26 29 29 29 -2%

Total sales 341 351 352 335 5%

EBIT (excl. non-recurring items)

Technology Services and Modernization 24.0 22.5 23.9 23.4 -4%

Business Consulting and Implementation -1.5 0.0 0.3 0.0 #####

Industry Solutions 13.2 17.2 18.1 16.6 4%

Product Development Services 1.7 2.0 2.1 1.8 11%

Group Operations -2 -2.9 -3.0 -3.2 -9%-20 %

Total EBIT (excl. NRI) 35.4 39 43 39 1%

Reported 35.1 38 38 41 -9%

Margin 10.4% 11.1 % 12.1 % 11.5 % 0%

PTP 34.1 36 37 40 -9%

EPS 0.37 0.36 0.38 0.40 -11%

excl. non-recurring items 0.38 0.37 0.43 0.38

DPS 0.00

Source: OP and SME Direct

Q3/2016e Q3/2015a

Tieto

Finland/Software & Computer Services Analyser


Tieto (Neutral) New acquisition in Germany improves the region’s outlook

Q3 results

The facts: Tieto released its Q3 figures this morning.

Our analysis: Tieto kept its guidance intact: Tieto estimates that 2016 adjusted

operating profit will improve from the previous year’s level (EUR 150.8m). It is bad

news that the results of Industry Products were disappointing. H2 is typically

better than H1 in this segment but now it appears that H2 will be weak. This

segment represents around 50% of Tieto's EBIT. To reach the guidance, Q4 has

to be good. Otherwise the results of the different divisions were largely in line with

expectations.

Conclusion & Action: The initial reaction to the results will probably be negative.

We will hear Tieto's further comments at the analyst meeting beginning at 10 am

CET. The solid dividend outlook should support the share price. If the share price

goes near EUR 24, the dividend yield will be around 6%.

Analyst(s):

Hannu Rauhala, OP Corporate Bank

[email protected]

+358 10 252 4392

Neutral

25.85


25.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TIE1V.HE/TIE1V FH



Free float 100%









Sales (m) 1,461 1,482 1,524

EBITDA (m) 182 200 176

EBITDA margin 12.5% 13.5% 11.6%

EBIT (m) 125 145 143

EBIT margin 8.6% 9.8% 9.4%


ROCE 84.7% 87.3% 90.9%





EV/Sales 1.3 1.3 1.2

EV/EBITDA 10.1 9.5 10.6

EV/EBITDA (adj.) 2.9 3.1 3.0

EV/EBIT 14.6 13.0 13.0

P/E (adj.) 16.4 16.9 17.0

P/BV 3.8 3.9 4.1

OpFCF yield 1.2% 7.1% 5.0%


EPS (adj.) 1.51 1.53 1.52

BVPS 6.56 6.62 6.31

DPS 1.35 1.40 1.50

21

22

23

24

25

26

27

28

29


vvdsvdvsdy

TIETO Stoxx Software & Computer Services (Rebased)Source: Factset

Shareholders: Cevian Capital 15%; Solidium Oy 10%;

Silchester International Investors LLP

10%;

of 60


Nokia

Q3/2015a

EURm OP Cons. OP Cons. Diff.

Sales

Networks business Total 5,442 5,410 6,021 22,180 22,406 -1%

Ultra Broadband Networks 4,035 3,934 4,469 16,212 16,152 0%

IP Networks and Applications 1,407 1,496 1,552 5,968 6,238 -4%

Nokia Technologies 217 227 169 853 893 -5%

Group Common and Other 230 233 211 1,037 965 7%

Sales 5,886 5,860 6,395 24,033 24,263 -1%

Gross profit - non-IFRS 2,327 2,248 2,411 9,495 9,472 0%

Gross margin 39.5 % 38.4 % 37.7 % 39.5 % 39.0 %

EBIT (non-IFRS) 476 450 680 1,849 2,004 -8%

EBIT-margin 8.1 % 7.7 % 11% 8% 8%

PTP 449 360 597 1,703 1,721 -1%

EPS (non-IFRS) 0.05 0.04 0.15 0.18 0.19 -3%

DPS 0.25 0.19 32%

Source: SME Direkt, OP

Q3/2016e 2016e

Nokia

Finland/Technology Hardware & Equipment Analyser


Nokia (Buy) Q3 results

Q3 preview: Worries about Ericsson's indication for Nokia exaggerated

The facts: Nokia will report its Q3 results on Thursday, 27 October, at around

7.00 am CET. A telephone conference for investors, lasting about an hour, begins

at 2 pm CET. Nokia has not issued actual quarterly guidance, but the company

estimated in its Q2 telephone conference for analysts that its sales decline in the

networks business will slow down in Q3 (Q2: -8%) and that seasonal fluctuation

(QoQ growth) will be unusually strong in Q4. Nokia expects the FY 2016 sales of

the Networks business to decline from the 2015 level and the EBIT margin excl.

NRI to be 7–9%.

Our analysis: The comments by Nokia's competitors support the view that there

is brisk activity in fixed network products. Ericsson's modest Q3 performance and

the guidance for Q4 increased uncertainty around the demand for mobile

networks in H2. Ericsson's profit warning was based on weak sales in emerging

markets, the renewal of a major service agreement in the US as well as lower-

than-expected sales of capacity projects in Europe. We estimate that in Europe

the network upgrade has been shifted because market data does not indicate a

slowdown in the data consumption in mobile networks. Network software

upgrades go automatically to the equipment supplier of the network to be

upgraded. We expect market growth to remain modest but stable in the US.

Investment activity is slowing down in Chinese wireless networks, but there are

still investment needs in fixed networks. In Asia, the pick-up in the network roll-out

activity in India will lend support to the Asian markets. In summary, we feel

confident about Nokia's outlook for 2016.

We expect the positive contribution from Nokia's efficiency measures to become

gradually visible from Q3 onwards. We also expect Nokia's product mix to

improve in H2 compared to H1, which will support the gross margin of networks

business. We estimate that Nokia will also raise its synergy target to over EUR

1.2bn (now EUR 1.2bn).

Conclusion & Action: We have not made any forecast revisions. We have

determined Nokia’s target price based on the average of the peer group’s 2016

and 2017 P/E, EV/EBITDA and P/B multiples and the DCF-based valuation. We

maintain our target price of EUR 6.60 and our Buy recommendation.

Analyst(s):


[email protected]

+358 10 252 4392

Buy

4.55


6.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg NOKIA.HE/NOKIA FH



Free float 100%









Sales (m) 26,609 24,205 26,005

EBITDA (m) 3,221 864 3,677


EBIT (m) 2,829 (316) 3,017

EBIT margin 10.6% nm 11.6%

Net Profit (adj.)(m) 2,329 (1,102) 2,240

ROCE 158.8% -1.5% 14.0%

Net debt/(cash) (m) (7,770) (7,948) (9,024)


Debt/EBITDA -2.4 -9.2 -2.5


EV/Sales 1.0 0.4 0.3

EV/EBITDA 8.0 10.0 2.1

EV/EBITDA (adj.) 8.0 10.0 2.1

EV/EBIT 9.1 nm 2.5

P/E (adj.) 16.3 nm 11.7

P/BV 3.6 1.2 1.1

OpFCF yield 5.1% -1.9% 4.3%


EPS (adj.) 0.41 (0.19) 0.39

BVPS 1.82 3.80 4.04

DPS 0.26 0.25 0.25

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5


vvdsvdvsdy

NOKIA Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: Keskinäinen työeläkevakuutusyhtiö

Varma 2.00%; Keskinäinen

Eläkevakuutusyhtiö Ilmarinen 0.70%;

Valtion Eläkerahasto 0.60%;

of 60


STMicroelectronics

Italy/Technology Hardware & Equipment Analyser


STMicroelectronics (Neutral) Q3 preview: Worries about Ericsson's indication for Nokia exaggerated

STM said in search for a new CEO

The facts: According to Bloomberg the Italian and French state shareholders are

still searching for a new CEO to succeed Mr Bozzotti after his contract expires in

6 months. Several French and Italian executives seemed to have rebuffed

company’s approach for the role.

Our analysis: Few months after the evident criticism to the current CEO from the

French economy minister Emmanuel Macron regarding dividend payment and too

low cost cutting measures we got new rumours on a likely substitution of Mr.

Bozzotti. Taking into account the Italian and French Gov’t own 14% stake each in

ST we believe there will be a political discussion with French gov’t asking for CEO

role after the Italian Mr. Bozotti and Italian Gov’t searching for a possible

international solution.

Conclusion & Action: The news confirmed previous rumours on new CEO

appointment. Even though the company is already looking to a new market

positioning in semiconductor we believe a change in its top management could

further support this refocusing process. However, the Italian and French Gov’t

should try to find a solution shortly in order to avoid incertitude, that could

negatively impact the stock.

Analyst(s):

Francesco Previtera, Banca Akros

[email protected]

+39 02 4344 4033

Enrico Filippi, CEFA Banca Akros

[email protected]

+39 02 4344 4071

Neutral

7.43


7.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg STM.MI/STM IM



Free float 72%








Key financials (USD) 12/15 12/16e 12/17e

Sales (m) 6,897 6,928 7,143

EBITDA (m) 900 857 1,021

EBITDA margin 13.0% 12.4% 14.3%

EBIT (m) 109 239 405

EBIT margin 1.6% 3.4% 5.7%


ROCE 3.1% 6.7% 8.8%

Net debt/(cash) (m) (494) (487) (551)


Debt/EBITDA -0.5 -0.6 -0.5


EV/Sales 0.8 1.0 0.9

EV/EBITDA 6.0 7.8 6.5

EV/EBITDA (adj.) 5.6 6.7 5.9

EV/EBIT 49.7 27.9 16.3

P/E (adj.) nm 39.6 22.2

P/BV 1.3 1.6 1.6

OpFCF yield 1.8% 3.9% 3.8%


EPS (adj.) 0.11 0.20 0.36

BVPS 5.15 5.04 5.16

DPS 0.40 0.24 0.24

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

STMICROELECTRONICS Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: STMicroelectronic holding 28%;

of 60


Teleste

Q3 2015a

EURm OP Cons. OP Cons. Diff. OP Cons. Diff.

Sales

Video and Broadband Solutions40.6 0 0 43.8 0 168 0 #DIV/0! 0 184 0 #DIV/0!

Network Services 22.2 0 0 22.4 0 95 0 #DIV/0! 0 100 0 #DIV/0!

Sales 62.9 71.0 0 66.2 0 264 271 -3% 0 284 285 0%

EBIT

Video and Broadband Solutions4.1 0 0 5.1 0 13.5 0 #DIV/0! 0 15.0 0 #DIV/0!

Network Services 0.8 0 0 0.8 0 2.8 0 #DIV/0! 0 4.6 0 #DIV/0!

EBIT 4.9 6.1 0 5.9 0 16.3 16.5 -1% 0 19.6 19.5 1%

EBIT margin 7.8 % 8.6 % # 8.9 % # 6.2 % 6.1 % # 6.9 % 6.8 %

PTP 4.8 6.1 0 5.5 0 15.5 16.3 -5% 0 20.0 19.0 5%

EPS 0.19 0.27 # 0.24 # 0.60 0.67 -10% # 0.76 0.76 0%

DPS 0.00 0.00 # 0.00 # 0.24 0.28 -14% # 0.30 0.31 -2%

Source: OP and Factset

2017e2016eQ3 2016e

Teleste

Finland/Technology Hardware & Equipment Analyser


Teleste (Neutral) STM said in search for a new CEO

Q3 preview: Focus on the profitability of Network Services

The facts: Teleste reports its Q3 results on Wednesday, 2 November. Teleste

expects its 2016 sales and EBIT to exceed the 2015 level (EUR 245m/EUR

14.3m). In connection with the guidance, Teleste comments that the launch of

some of its projects will be postponed to 2017. Teleste does not have quarterly

guidance.

Our analysis: According to our estimate, network building activities in Europe

have remained at a good level in early autumn, which should also support

Teleste’s sales. The profitability in equipment sales has been weakened by the

emphasis in Teleste’s product mix on lower margin products. We expect the trend

to also continue in H2 as the volumes of amplifier deliveries for Huawei’s network

project will increase. We predict that equipment sales margins in H2 will be at the

H2 2015 level (EBIT-% 6%).

The earnings improvement that we have forecasted will mainly result from the

Network Services business. In connection with Q2 results, the company

commented that its Network Services business in the UK will remain positive in

H2 and that its profitability in Germany will gradually increase towards the end of

the year. The EBIT margin of 3% for 2016 that complies with our forecast is not

yet at an acceptable level, which in our opinion, is around 6–8%. The profitability

improvement in the Network Services business would dilute the effect of price

pressures in the equipment business.

Conclusion & Action: We have determined Teleste’s target price based on the

average of the peer group’s 2016 and 2017 P/E and EV/EBITDA multiples, and

DCF valuation. We are raising our target price to EUR 10 (from EUR 9,6). Our

recommendation is Neutral.

Analyst(s):


[email protected]

+358 10 252 4392

Reuters/Bloomberg TLT1V.HE/TLT1V FH



Free float 100%









Sales (m) 248 264 284

EBITDA (m) 16 24 33


EBIT (m) 14 16 20

EBIT margin 5.8% 6.2% 6.9%


ROCE 10.9% 12.6% 15.6%





EV/Sales 0.8 0.8 0.7

EV/EBITDA 12.8 8.7 6.0

EV/EBITDA (adj.) 12.8 8.7 6.0

EV/EBIT 14.6 12.7 9.9

P/E (adj.) 16.9 16.5 13.1

P/BV 2.4 2.4 2.1

OpFCF yield -9.0% 13.5% 13.6%


EPS (adj.) 0.58 0.60 0.76

BVPS 4.08 4.20 4.71

DPS 0.23 0.24 0.30

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0


vvdsvdvsdy

TELESTE Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: EM Group Oy 23%; Mandatum

Henkivakuutusosakeyhtiö 9%;

Keskinäinen Eläkevakuutusyhtiö

Ilmarinen 5%;

Neutral

9.9

5 closing price as of 24/10/2016 10.0

0 9.6

0 from Target Price: EUR

Recommendation unchangedl

Target price: EUR

Share price: EUR

of 60


Deutsche Telekom

Germany/Telecommunications Analyser

TELECOMMUNICATIONS

Deutsche Telekom (Neutral) Q3 preview: Focus on the profitability of Network Services

Good results from T-Mobile US

The facts: T-Mobile US (TMUS) reported in-line MSR (mobile services rev)

numbers of US$ 7.1bn, although gross revenue falls below expectations.

Net add gains came in with +2m, consensus was at 1.9m and churn 1.32% (exp.

1.40%).

Main highlight for DTE and sentiment reg. DTE: TMUS increases its guidance on

EBITDA level with target raising to US$ 10.2-10.4bn from US$ 9.8-10.1bn.

Also net add guidance increased to 3.7-3.9m (3.4-3.8m) for 2016.

Our analysis: Negative in our view is TMUS increased net debt situation and

cash conversion. Net debt at the moment is around EUR 22bn, increasing from

EUR 19bn last year. Cash conversion of only 30-40% is pretty weak and should

be in focus in coming quarters to improve significantly.

Conclusion & Action: We retain our Neutral rating on DTE as Germany and

Europe are still in declining mode at the moment. TMUS numbers should help for

a better sentiment in the stock but we do not expect any big moves in DTE

shares, that trade on a P/E of 12x FY16e and non-compelling 3.7% dividend

yield. TMUS is the only hot spot for DTE investors. TMUS again delivered good

KPIs (net adds, adj. EBITDA, ARPU growth) and gained market share in the US

with aggressive promotions with the release of the new iP7. Bear in mind that all

four carriers (AT&T, VZ, TMUS and S) this year did aggressive marketing

campaigns and it seems that all three lost market share to TMUS.

Analyst(s):

Cengiz Sen, equinet Bank

[email protected]

+4969 58997 435

Neutral

14.69


15.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg DTEGn.DE/DTE GY



Free float 63%









Sales (m) 69,228 70,681 72,524

EBITDA (m) 18,469 19,981 20,162

EBITDA margin 26.7% 28.3% 27.8%

EBIT (m) 7,028 8,694 8,197

EBIT margin 10.2% 12.3% 11.3%

Net Profit (adj.)(m) 3,542 5,803 5,380

ROCE 5.2% 7.3% 6.9%

Net debt/(cash) (m) 49,678 47,889 48,051




EV/Sales 1.9 1.7 1.6

EV/EBITDA 7.0 5.8 5.8

EV/EBITDA (adj.) 7.0 5.3 5.2

EV/EBIT 18.3 13.4 14.2

P/E (adj.) 21.5 11.5 12.4

P/BV 2.6 2.2 2.1

OpFCF yield -0.9% 7.3% 4.4%


EPS (adj.) 0.78 1.27 1.18

BVPS 6.46 6.77 6.98

DPS 0.55 0.57 0.58

13.0

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0


vvdsvdvsdy

DEUTSCHE TELEKOM Stoxx Telecommunications (Rebased)Source: Factset

Shareholders: Federal Republic of Germany 14%; KfW

17%; Blackstone Group 5%;

of 60


Tiscali

Italy/Telecommunications Analyser

TELECOMMUNICATIONS

Tiscali (Neutral) Good results from T-Mobile US

First fibre deal in Sardegna

The facts: Tiscali and Enel Open Fibre announced an agreement in Sardinia.

The companies will cover 50% of households in Cagliari by July 2017, 80% by

March 2018 (66K units) with a planned EUR 20m investment. The two expects to

connect 20K clients by that date.

Our analysis: the above agreement follows Tiscali announcement of a

partnership with Enel Open Fibre (EoF) for the provision of end-to-end

connections on EoF's soon-to-be-built FttH network. The initial roll-out obviously

involves the Sardinia region, where Tiscali is market leader (40% share in the

capital city Cagliari). Cagliari is also among the five pilot cities for the EoF's FttH

project. In turn, EoF will have access to Tiscali's wholesale network, in particular

to two 1Gbps channels between Cagliari and Roma.

Conclusion & Action: logical and expected evolution of the framework

agreement announced in July. Tiscali can afford to implement fibre in the region

where it commands the strongest market share, whereas LTE should remain the

preferred access mode in other "digital divide" areas.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Neutral

0.05


0.06



Target price: EUR

Share price: EUR

Reuters/Bloomberg TIS.MI/TIS IM



Free float 49%









Sales (m) 202 244 254

EBITDA (m) 39 46 50

EBITDA margin 19.3% 18.9% 19.5%

EBIT (m) (2) 10 14



ROCE -6.4% 22.9% 36.1%

Net debt/(cash) (m) 169 175 168




EV/Sales 1.7 1.3 1.2

EV/EBITDA 9.0 6.9 6.3

EV/EBITDA (adj.) 9.0 6.9 6.3

EV/EBIT nm 33.2 22.2


P/BV nm nm nm

OpFCF yield 9.6% 1.8% 11.7%


EPS (adj.) (0.00) 0.00 0.00

BVPS (0.05) (0.05) (0.05)

DPS 0.00 0.00 0.00

0.035

0.040

0.045

0.050

0.055

0.060

0.065


vvdsvdvsdy

TISCALI Stoxx Telecommunications (Rebased)Source: Factset

Shareholders: OTKRITIE FUND SPC 22%; CAMPHIL

ASSETS LIMITED 18%; Soros 10%;

of 60


Spanish Travel & Leisure

Analyser

TRAVEL & LEISURE

First fibre deal in Sardegna SPAIN: September hotel data

The facts: The INE released September hotel data.

• Hotel overnight stays: +5.0% (vs. +3.8% August). Residents -1.7% and

non-residents +8.0%. Accumulated +7.4% vs. 7.8% up to August).

• Hotel occupancy: 67.5% (vs. 78% in August) and +3.2% (vs. +2.2%

August).

• ADR: EUR84.4/room; +5.6% (vs. +5.2% August).

• REVPAR: EUR63.8/room, +11.3% (vs. +8.9% August).

Our analysis: Various aspects worth pointing out: 1) improvement in hotel

overnight stays (+5.0% vs. 3.8% August) and good accumulated data (+7.4%).

2) Better prices (+5.6%, above August increase) and surpassing variations in

occupancy (+3.2%), thus the attractive +11.3% in REVPAR (vs. 8.9% in

August). On the negative side, is the residential overnight stays that have

dropped during the second consecutive month (-1.7% September and year to

date accumulate +3.1% vs. 2015 closing at +5.3%.

Conclusion: In general, good hotel data with improvements in prices above

occupancy, although the deceleration in domestic overnight stays is

consolidating.

---------- Stoxx Travel & Leisure,

DJ Stoxx TMI rebased on sector

Analyst(s):

Sonia Ruiz De Garibay, GVC Gaesco Beka

[email protected]

+34 91 436 7841

310

320

330

340

350

360

370

380

390

400

410

420

Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16

vvdsvdvsdy

of 60


International Cons. Airlines Group

Spain/Travel & Leisure Analyser

TRAVEL & LEISURE

Int. Airlines Group (Buy) SPAIN: September hotel data

3Q’16 results preview

The facts: IAG will release 3Q’16 results on October 28th prior to market

opening, to be followed by a conference call.

Our analysis: We estimate the following 3Q results: adjusted operating results

EUR1,209m (-3.3% vs. 3Q’15) and adjusted net profit EUR934m (+5.7% vs.

3Q’15).

We highlight the following:

Capacity, traffic and load factor: For 3Q +9.6% ASK; +9.4% RPK and -

0.12% respectively, reaching 85.61% load factor. For 9m’16 we will continue

to see double digit growths in ASK and RPK but below 1H’16 because Aer

Lingus was incorporated to the Holding in August 2015.

Unit Revenues (RASK) and Yield. The negative trend continues with

estimated falls of -9.4% an d-9.6%, respectively affected by the eroding

pricing in the industry and the impact from forex.

Other non-operating aspects: We estimate an improvement due to the

maturity of some debt (anticipated amortisation of EUR390m convertible

bonds at 1.75% and maturity of GBP250m issuance in July at 8.75%).

Conclusion: We do not expect 3Q’16 results to surpass the operating result at

3Q’15 due to the pressure on unit revenues and yields derived from a

combination of various variables: 1) impact from events in Europe (attacks in the

past, Brexit); 2) weak GBP exchange rate; 3) pressure on pricing following a low

jet fuel prices; and 4) capacity deceleration (ASK 1H’16 +12.3% vs. 11.3%

9m’16). Either way, IAG is at the moment a good option in terms of value due to

the attractive trading ratios vs. the sector and vs. the historical average. In

addition, we expect more detail at the upcoming CMD regarding lower capex,

decelerating growth in capacity to maintain good load factors, and emphasis on

the positive CASK ex-fuel performance expected. The Group’s cash generation

together with the progressive deleveraging and attractive shareholders’

remuneration policy will continue to be the pillars behind our positive

recommendation on the stock.

Analyst(s):


[email protected]

+34 91 436 7841

Buy

4.53


5.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg ICAG.MC/IAG SM



Free float 48%









Sales (m) 22,858 23,154 23,166

EBITDA (m) 3,642 3,894 4,043

EBITDA margin 15.9% 16.8% 17.5%

EBIT (m) 2,335 2,582 2,702

EBIT margin 10.2% 11.2% 11.7%

Net Profit (adj.)(m) 1,539 1,833 1,963

ROCE 12.2% 13.3% 13.7%

Net debt/(cash) (m) 2,774 1,784 925




EV/Sales 0.9 0.5 0.5

EV/EBITDA 5.5 3.0 2.7

EV/EBITDA (adj.) 5.5 3.0 2.7

EV/EBIT 8.6 4.6 4.0

P/E (adj.) 11.0 5.3 4.9

P/BV 3.2 1.4 1.2

OpFCF yield 1.8% 17.6% 17.4%


EPS (adj.) 0.75 0.86 0.92

BVPS 2.56 3.13 3.84

DPS 0.20 0.21 0.24

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0


vvdsvdvsdy

INT. AIRLINES GROUP IBEX 35 (Rebased)Source: Factset

Shareholders: Qatar Airways 20%; Lansdowne 7%;

Standard Life Investment 6%;

of 60


NH Hotel Group

Spain/Travel & Leisure Analyser

TRAVEL & LEISURE

NH Hotel Group (Buy) 3Q’16 results preview

HNA: new investment

The facts: HNA (29.5% NH) has reached an agreement with Blackstone to

acquire 25% Hilton Hotels (long term vocation) and in the two new affiliates, Park

Hotels & Resorts and Hilton Grand Vacations (real estate and time-sharing) soon

to be spun-off. The total amount is $6.5bn ($26.25/share in cash, premium 15%

over last closing price) and the transaction is expected to be closed in 1Q’17,

following which HNA would be the main shareholder ahead Blackstone which

maintains a 21% stake. HNA has the right to appoint to board members in Hilton

(proprietor and independent) and thus assumes a commitment to remain in

Hilton’s shareholder core during at least two years. Hilton is mainly a

management chain (55% of the total rooms) and presence in US (80% of the total

EBITDA vs. 9% in Europe).

Our analysis: This is just another example of HNA’s ambitious strategy to create

a large holding world-wide and in activities related to tourism and leisure.

Specifically, in terms of hotels, with this operation and the expected

materialization of the Carlson deal, the Group intends to obtain substantial

presence in America, in addition to its presence in the Asian market (60 hotels in

China). Regarding Europe, the intentions are yet to be clarified and thus we will

have to wait for the green light on the Carlson deal and its affiliate in Europe,

Rezidor. At the moment there are many options for HNA, ranging from

abandoning NH to integrating both companies considering the highly

complementary characters. We lean towards the second option considering that

in Europe NH (374 hotels) contributes more critical mass and EBITDA than

Rezidor (282 hotels). Considering HNA’s aspirations seem to include substantial

presence in hotels in various continents throughout the world, it would be

necessary to join the two companies to obtain said positioning in Europe.

Regarding multiples, HNA would be valuing Hilton’s equity at $26bn and EV

c.$35bn, resulting EV/EBITDA 12.3x at 2015 year-end; and very close to 12.2x

EV/EBITDA in the Starwood and Marriot deals. Either way, multiples above the

two listed, Spanish hotels (EV/EBITDA’17e <10x).

Conclusion: Independently of HNA’s aspirations with NH, the truth is the

company has advanced greatly in financial and operating aspects and the results

of the repositioning plan are yet to completely flourish (to result in EBITDA c.

EUR250m 2017-18e). More so, in 2016 positive net profits will be consolidated

and for 2017 we expect the Company to implement a shareholders remuneration

policy. Therefore, we remain positive on the stock with a Buy recommendation

and high upside potential towards our fair value.

Analyst(s):


[email protected]

+34 91 436 7841

Buy

4.16


6.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg NHH.MC/NHH SM



Free float 37%









Sales (m) 1,395 1,495 1,582

EBITDA (m) 142 229 220

EBITDA margin 10.1% 15.3% 13.9%

EBIT (m) 47 129 114

EBIT margin 3.4% 8.6% 7.2%


ROCE 1.8% 3.4% 4.3%

Net debt/(cash) (m) 838 758 773




EV/Sales 1.8 1.4 1.4

EV/EBITDA 17.9 9.4 9.8

EV/EBITDA (adj.) 17.9 11.4 9.8

EV/EBIT 54.1 16.6 18.9

P/E (adj.) nm 39.1 40.8

P/BV 1.6 1.3 1.3

OpFCF yield -5.4% -2.9% 0.5%


EPS (adj.) (0.01) 0.11 0.10

BVPS 3.11 3.21 3.31

DPS 0.00 0.00 0.00

3.0

3.5

4.0

4.5

5.0

5.5

6.0


vvdsvdvsdy

NH HOTEL GROUP Stoxx Travel & Leisure (Rebased)Source: Factset

Shareholders: Hesperia 9%; HNA 30%; Oceanwood

Capital 12%;

of 60


Snam

Italy/Utilities Analyser

UTILITIES

Snam (Neutral) HNA: new investment

Capital market day

The facts: Italgas held its capital market day yesterday.

Our analysis: Italgas has confirmed the mail goals already unveiled by Snam in

its business plan. The listing has been confirmed for 7th

November. In our view,

the main key points were:

organic capex at EUR 2bn over 2016-2020. 41% of total capex are

related to metering activity. This ought to drive the weight of the metering

RAB on the total RAB at 15% in 2020 vs. 11% in 2015. We remind

readers that metering has an higher allowed return than the distribution

(i.e. 6.6% vs. 6.1%). Organic RAB CAGR of >1% over 2015-2020 (from

EUR 5.7bn to EUR >6bn);

Italgas is eager to play a leading role in the gas tender process. The

company points to increase its redelivery points from 6.5m in 2015 to

>8m once the concessions renewal is completed (post 2020), reaching a

market share of about 40% vs. the current 30% (without considering

affiliates; if we consider also affiliates these figures are respectively 34%

and roughly 45%). In terms of RAB the company’s guidance is to reach

about EUR >7bn once the concessions renewal process is completed

(from nearly EUR 5.7bn) The tender process ought to last 1-2 years

since the tender is published. The cash-out expected for the gas tender

awards is around EUR 1.3bn. The capex expected for the new

concessions is roughly EUR 0.9bn;

Italgas expects to post around EUR 20m of annual savings on capex at

regime through efficiency actions: increasing workers productivity,

improving infrastructural and telecom service contractual structures,

awarding of new tenders for facility contracts, reducing telecom costs

associated to smart meters reading, upgrading procurement strategy;

debt structure target consistent with the regulatory profile and limiting

exposure to interest rate while protecting financial outperformance. The

goal is to reach a fix/floating breakdown of around 2/3 and 1/3.

Operating cash flow is expected to cover both dividends and capex as

well as to provide the company with the financial flexibility to take market

opportunities (new tender/consolidation) and enhance shareholders’

remuneration. The cost of debt ought to <1%;

Italgas is distributing EUR 0.2 per share as a dividend on 2016 results.

Based on our estimates, the yield offered ought to be around 4.6%. EUR

0.2 per share is a floor. 2017-2018 dividends are expected to growth at a

low single-digit rate (1-3%). Additional details on the dividend policy are

due to be provided next spring once the company will disclose its

business plan;

2016 guidance points to revenues for EUR > 1bn, EBITDA margin of

circa 65%, EBIT/RAB at about 6%;

Italgas expects the allowed return to remain substantially unchanged

after the interim review effective in 2019 (the regulatory period expires in

December 2021).

Conclusion & Action: Italgas has detailed its targets already disclosed (at least

in part by Snam). The key for the equity story relies on the dividend (which is

sustainable with a pay-out of around 60/65%) and the gas tender process. The

award of the tenders is due to change, in our view the equity value of the

company. For Snam the upside relies on the financial flexibility arising from the

spin-off. We reiterate our neutral stance on Snam.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Neutral

4.79


5.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg SRG.MI/SRG IM



Free float 69%









Sales (m) 3,649 3,464 3,524

EBITDA (m) 2,799 2,660 2,718

EBITDA margin 76.7% 76.8% 77.1%

EBIT (m) 1,950 1,758 1,799

EBIT margin 53.4% 50.8% 51.0%

Net Profit (adj.)(m) 1,238 1,044 1,125

ROCE 6.8% 5.6% 5.9%

Net debt/(cash) (m) 13,779 14,209 14,275




EV/Sales 8.3 8.8 8.7

EV/EBITDA 10.8 11.5 11.3

EV/EBITDA (adj.) 10.8 11.5 11.3

EV/EBIT 15.5 17.4 17.0

P/E (adj.) 14.4 17.0 15.8

P/BV 2.4 2.3 2.2

OpFCF yield 4.4% 2.5% 3.8%


EPS (adj.) 0.33 0.28 0.30

BVPS 2.05 2.10 2.20

DPS 0.25 0.21 0.22

4.0

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6


vvdsvdvsdy

SNAM Stoxx Utilities (Rebased)Source: Factset

Shareholders: CDP 31%;

of 60


European Coverage of the Members of ESN

A ero space & D efense M em(*) Bcp CBI Kemira OPG Corbion NIBC

Airbus Group CIC Bnp Paribas CIC Linde EQB Danone CIC

Dassault Aviation CIC Bper BAK Tikkurila OPG Ebro Foods GVC

Latecoere CIC Bpi CBIElectro nic & Electrical

EquipmentM em(*) Enervit BAK

Leonardo BAK Caixabank GVC Alstom CIC Fleury M ichon CIC

Lisi CIC Commerzbank EQB Areva CIC Forfarmers NIBC

M tu EQB Credem BAK Euromicron Ag EQB Heineken NIBC

Ohb Se EQB Credit Agrico le Sa CIC Kontron EQB Hkscan OPG

Safran CIC Creval BAK Legrand CIC La Doria BAK

Thales CIC Deutsche Bank EQB Neways Electronics NIBC Lanson-Bcc CIC

Zodiac Aerospace CIC Deutsche Pfandbriefbank EQB Nexans CIC Laurent Perrier CIC

A irlines M em(*) Eurobank IBG Pkc Group OPG Ldc CIC

Air France Klm CIC Ing Group NIBC Rexel CIC Naturex CIC

Finnair OPG Intesa Sanpaolo BAK Schneider Electric Se CIC Olvi OPG

Lufthansa EQB M ediobanca BAK Vaisala OPG Parmalat BAK

A uto mo biles & P arts M em(*) M erkur Bank EQB Viscom EQB Pernod Ricard CIC

Bittium Corporation OPG National Bank Of Greece IBG F inancial Services M em(*) Raisio OPG

Bmw EQB Natixis CIC Anima BAK Refresco Group NIBC

Brembo BAK Nordea OPG Athex Group IBG Remy Cointreau CIC

Continental EQB Piraeus Bank IBG Azimut BAK Vidrala GVC

Daimler Ag EQB Poste Italiane BAK Banca Generali BAK Vilmorin CIC

Elringklinger EQB Societe Generale CIC Banca Ifis BAK Viscofan GVC

Faurecia CIC Ubi Banca BAK Banca Sistema BAK Vranken Pommery M onopole CIC

Ferrari BAK Unicredit BAK Bb Biotech EQB Wessanen NIBC

Fiat Chrysler Automobiles BAK B asic R eso urces M em(*) Binckbank NIBC F o o d & D rug R etailers M em(*)

Landi Renzo BAK Acerinox GVC Bolsas Y M ercados Espanoles Sa GVC Ahold NIBC

Leoni EQB Altri CBI Capman OPG Carrefour CIC

M ichelin CIC Arcelormittal GVC Christian Dior CIC Casino Guichard-Perrachon CIC

Nokian Tyres OPG Corticeira Amorim CBI Cir BAK Dia GVC

Norma Group EQB Ence GVC Comdirect EQB Jeronimo M artins CBI

Piaggio BAK Europac GVC Corp. Financiera Alba GVC Kesko OPG

Plastic Omnium CIC M etka IBG Deutsche Boerse EQB M arr BAK

Sogefi BAK M etsä Board OPG Deutsche Forfait EQB M etro CIC

Stern Groep NIBC M ytilineos IBG Eq OPG Sligro NIBC

Valeo CIC Outokumpu OPG Euronext CIC Sonae CBI

Volkswagen EQB Semapa CBI Ferratum EQB General Industria ls M em(*)

B anks M em(*) Ssab OPG Finecobank BAK 2G Energy EQB

Aareal Bank EQB Stora Enso OPG Grenke EQB Aalberts NIBC

Abn Amro Group Nv NIBC Surteco EQB Hypoport Ag EQB Accell Group NIBC

Aktia OPG The Navigator Company CBI M lp EQB Ahlstrom OPG

Alpha Bank IBG Tubacex GVC Ovb Holding Ag EQB Arcadis NIBC

Banca Carige BAK Upm-Kymmene OPG Patrizia Ag EQB Aspo OPG

Banca M ps BAK B io techno lo gy M em(*) Rallye CIC Huhtamäki OPG

Banco Popolare BAK 4Sc EQB Unipol Gruppo Finanziario BAK Kendrion NIBC

Banco Popular GVC Cytotools Ag EQB F o o d & B everage M em(*) Nedap NIBC

Banco Sabadell GVC Epigenomics Ag EQB Acomo NIBC Pöyry OPG

Banco Santander GVC Wilex EQB Atria OPG Prelios BAK

Bankia GVC C hemicals M em(*) Bonduelle CIC Rubis CIC

Bankinter GVC Air Liquide CIC Campari BAK Saf-Holland EQB

Bbva GVC Holland Colours NIBC Coca Cola Hbc Ag IBG Serge Ferrari Group CIC

of 60


Siegfried Holding Ag EQB H o useho ld Go o ds M em(*) Axa CIC Thermador Groupe CIC

Tkh Group NIBC Bic CIC Banca M edio lanum BAK Titan Cement IBG

Wendel CIC De Longhi BAK Catto lica Assicurazioni BAK Trevi BAK

General R etailers M em(*) Fila BAK Delta Lloyd NIBC Uponor OPG

Banzai BAK Osram Licht Ag EQB Generali BAK Vicat CIC

Beter Bed Holding NIBC Seb Sa CIC Hannover Re EQB Vinci CIC

Elumeo Se EQB Zumtobel Group Ag EQB M apfre Sa GVC Yit OPG

Fielmann EQB Industria l Engineering M em(*) M unich Re EQB M edia M em(*)

Folli Fo llie Group IBG Accsys Technologies NIBC Nn Group Nv NIBC Ad Pepper EQB

Fourlis Holdings IBG Aixtron EQB Sampo OPG Alma M edia OPG

Groupe Fnac Sa CIC Ansaldo Sts BAK Talanx Group EQB Atresmedia GVC

Inditex GVC Biesse BAK Unipolsai BAK Axel Springer EQB

Jumbo IBG Cargotec Corp OPGM aterials, C o nstruct io n &

InfrastructureM em(*) Brill NIBC

M acintosh NIBC Cnh Industrial BAK Abertis GVC Cofina CBI

Rapala OPG Danieli BAK Acs GVC Cts Eventim EQB

Stockmann OPG Datalogic BAK Aena GVC Editoriale L'Espresso BAK

Yoox Net-A-Porter BAK Deutz Ag EQB Aeroports De Paris CIC Gl Events CIC

H ealthcare M em(*) Dmg M ori Seiki Ag EQB Astaldi BAK Havas CIC

Amplifon BAK Duro Felguera GVC Atlantia BAK Impresa CBI

Bayer EQB Emak BAK Bilfinger Se EQB Ipsos CIC

Biotest EQB Exel Composites OPG Boskalis Westminster NIBC Jcdecaux CIC

Diasorin BAK Gesco EQB Buzzi Unicem BAK Lagardere CIC

Fresenius EQB Ima BAK Caverion OPG M 6-M etropole Television CIC

Fresenius M edical Care EQB Interpump BAK Cramo OPG M ediaset BAK

Gerresheimer Ag EQB Kone OPG Eiffage CIC M ediaset Espana GVC

Korian CIC Konecranes OPG Ellaktor IBG Notorious Pictures BAK

M erck EQB Kuka EQB Eltel OPG Nrj Group CIC

Orio la-Kd OPG M anz Ag EQB Ezentis GVC Publicis CIC

Orion OPG M ax Automation Ag EQB Fcc GVC Rcs M ediagroup BAK

Orpea CIC M etso OPG Ferrovial GVC Relx NIBC

Pihlajalinna OPG Outotec OPG Fraport EQB Rtl Group EQB

Recordati BAK Pfeiffer Vacuum EQB Heidelberg Cement Ag CIC Sanoma OPG

Rhoen-Klinikum EQB Ponsse OPG Heijmans NIBC Solocal Group CIC

H o tels, T ravel & T o urism M em(*) Prima Industrie BAK Hochtief EQB Spir Communication CIC

Accor CIC Prysmian BAK Imerys CIC Syzygy Ag EQB

Autogrill BAK Smt Scharf Ag EQB Italcementi BAK Telegraaf M edia Groep NIBC

Beneteau CIC Technotrans EQB Lafargeholcim CIC Teleperformance CIC

Elior CIC Valmet OPG Lehto OPG Tf1 CIC

Europcar CIC Wärtsilä OPG Lemminkäinen OPG Ubisoft CIC

I Grandi Viaggi BAK Zardoya Otis GVC M aire Tecnimont BAK Vivendi CIC

Iberso l CBI Industria l T ranspo rtat io n M em(*) M ota Engil CBI Wolters Kluwer NIBC

Intralo t IBG Bollore CIC Obrascon Huarte Lain GVC Oil & Gas P ro ducers M em(*)

Kotipizza OPG Caf GVC Ramirent OPG Eni BAK

M elia Hotels International GVC Ctt CBI Royal Bam Group NIBC Galp Energia CBI

Nh Hotel Group GVC Deutsche Post EQB Sacyr GVC Gas Plus BAK

Opap IBG Hhla EQB Saint Gobain CIC Hellenic Petro leum IBG

Snowworld NIBC Logwin EQB Salini Impregilo BAK M aurel Et Prom CIC

Sodexo CIC Insurance M em(*) Sias BAK M otor Oil IBG

Sonae Capital CBI Aegon NIBC Sonae Industria CBI Neste Corporation OPG

Trigano CIC Allianz EQB Srv OPG Petrobras CBI

of 60


Qgep CBI Wcm Ag EQB Enav BAK Falck Renewables BAK

Repsol GVC R enewable Energy M em(*) Fiera M ilano BAK Fortum OPG

Total CIC Daldrup & Soehne EQB Lassila & Tikanoja OPG Gas Natural Fenosa GVC

Oil Services M em(*) Gamesa GVC Openjobmetis BAK Hera BAK

Bourbon CIC So ftware & C o mputer Services M em(*)T echno lo gy H ardware &

EquipmentM em(*)Iberdro la GVC

Cgg CIC Affecto OPG Asm International NIBC Iren BAK

Fugro NIBC Akka Technologies CIC Asml NIBC Public Power Corp IBG

Saipem BAK Alten CIC Besi NIBC Red Electrica De Espana GVC

Sbm Offshore NIBC Altran CIC Elmos Semiconductor EQB Ren CBI

Technip CIC Amadeus GVC Ericsson OPG Snam BAK

Tecnicas Reunidas GVC Assystem CIC Gemalto CIC Terna BAK

Tenaris BAK Atos CIC Gigaset EQB

Vallourec CIC Basware OPG Ingenico CIC

Vopak NIBC Cenit EQB Nokia OPG

P erso nal Go o ds M em(*) Comptel OPG Roodmicrotec NIBC

Adidas EQB Ctac NIBC Slm Solutions EQB

Adler M odemaerkte EQB Digia OPG Stmicroelectronics BAK

Amer Sports OPG Docdata NIBC Suess M icrotec EQB

Basic Net BAK Econocom CIC Teleste OPG

Cie Fin. Richemont CIC Ekinops CIC T eleco mmunicat io ns M em(*)

Geox BAK Esi Group CIC Acotel BAK

Gerry Weber EQB Exprivia BAK Deutsche Telekom EQB

Hermes Intl. CIC F-Secure OPG Drillisch EQB

Hugo Boss EQB Gft Technologies EQB Elisa OPG

Interparfums CIC Ict Group NIBC Euskaltel GVC

Kering CIC Indra Sistemas GVC Freenet EQB

L'Oreal CIC Nemetschek Se EQB Kpn Telecom NIBC

Luxottica BAK Neurones CIC M asmovil GVC

Lvmh CIC Nexus Ag EQB Nos CBI

M arimekko OPG Novabase CBI Oi CBI

M oncler BAK Ordina NIBC Ote IBG

Puma EQB Psi EQB Tele Columbus EQB

Safilo BAK Reply BAK Telecom Italia BAK

Salvatore Ferragamo BAK Rib Software EQB Telefonica GVC

Sarantis IBG Seven Principles Ag EQB Telia OPG

Technogym BAK Software Ag EQB Tiscali BAK

Tod'S BAK Sopra Steria Group CIC United Internet EQB

R eal Estate M em(*) Tie Kinetix NIBC Vodafone BAK

Adler Real Estate EQB Tieto OPG Utilit ies M em(*)

Beni Stabili BAK Tomtom NIBC A2A BAK

Citycon OPG Visiativ CIC Acciona GVC

Deutsche Euroshop EQB Wincor Nixdorf EQB Acea BAK

Grand City Properties EQB Suppo rt Services M em(*) Albioma CIC

Hispania Activos Inmobiliarios GVC Asiakastieto Group OPG Direct Energie CIC

Igd BAK Batenburg NIBC Edp CBI

Lar España GVC Bureau Veritas S.A. CIC Edp Renováveis CBI

Realia GVC Cellnex Telecom GVC Enagas GVC

Sponda OPG Dpa NIBC Endesa GVC

Technopolis OPG Edenred CIC Enel BAK

Vib Vermoegen EQB Ei Towers BAK Eydap IBG

LEGEND: BAK: Banca Akros; CIC: CM CIC Market Solutions; CBI: Caixa-Banca de Investimento; GVC: GVC Gaesco Beksa, SV, SA; EQB: Equinet bank; IBG: Investment Bank of

Greece, NIBC: NIBC Markets N.V: OPG: OP Corporate Bank:; as of 1st September 2016

of 60


List of ESN Analysts (**)

Ari Agopyan CIC +33 1 53 48 80 63 [email protected] Victoria Kruchevska (CFA,FRM) EQB +49 69 5 89 97 416 [email protected]

Artur Amaro CBI +351 213 89 6822 [email protected] Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 [email protected]

Helena Barbosa CBI +351 21 389 6831 [email protected] Konstantinos Manolopoulos IBG +30 210 817 3388 [email protected]

Javier Bernat GVC +34 91 436 7816 jav [email protected] Dario Michi BAK +39 02 4344 4237 [email protected]

Dimitris Birbos IBG +30 210 81 73 392 [email protected] Marietta Miemietz CFA EQB +49-69-58997-439 [email protected]

Agnès Blazy CIC +33 1 53 48 80 67 [email protected] José Mota Freitas, CFA CBI +351 22 607 09 31 [email protected]

Charles Edouard Boissy CIC +33 01 53 48 80 81 [email protected] Henri Parkkinen OPG +358 10 252 4409 [email protected]

Rafael Bonardell GVC +34 91 436 78 171 [email protected] Victor Peiro Pérez GVC +34 91 436 7812 [email protected]

Louise Boyer CIC +33 1 53 48 80 68 [email protected] Francis Prêtre CIC +33 4 78 92 02 30 [email protected]

Giada Cabrino, CIIA BAK +39 02 4344 4092 [email protected] Francesco Previtera BAK +39 02 4344 4033 francesco.prev [email protected]

Arnaud Cadart CIC +33 1 53 48 80 86 [email protected] Jari Raisanen OPG +358 10 252 4504 [email protected]

Niclas Catani OPG +358 10 252 8780 [email protected] Hannu Rauhala OPG +358 10 252 4392 [email protected]

Pierre Chedeville CIC +33 1 53 48 80 97 [email protected] Matias Rautionmaa OPG +358 10 252 4408 [email protected]

Emmanuel Chevalier CIC +33 1 53 48 80 72 [email protected] Eric Ravary CIC +33 1 53 48 80 71 [email protected]

David Consalvo CIC +33 1 53 48 80 64 [email protected] Iñigo Recio Pascual GVC +34 91 436 7814 [email protected]

Edwin de Jong NIBC +312 0 5508569 [email protected] Gerard Rijk NIBC + 31 (0)20 550 8572 [email protected]

Martijn den Drijver NIBC +312 0 5508636 [email protected] André Rodrigues CBI +351 21 389 68 39 [email protected]

Christian Devismes CIC +33 1 53 48 80 85 [email protected] Jean-Luc Romain CIC +33 1 53 48 80 66 [email protected]

Andrea Devita, CFA BAK +39 02 4344 4031 [email protected] Jochen Rothenbacher, CEFA EQB +49 69 58997 415 [email protected]

Sebastian Droste EQB +49 69 58 99 74 34 [email protected] Vassilis Roumantzis IBG +30 2108173394 [email protected]

Enrico Esposti, CIIA BAK +39 02 4344 4022 [email protected] Sonia Ruiz De Garibay GVC +34 91 436 7841 [email protected]

Rafael Fernández de Heredia GVC +34 91 436 78 08 [email protected] Antti Saari OPG +358 10 252 4359 [email protected]

Enrico Filippi, CEFA BAK +39 02 4344 4071 [email protected] Paola Saglietti BAK +39 02 4344 4287 [email protected]

Gabriele Gambarova BAK +39 02 43 444 289 [email protected] Francesco Sala BAK +39 02 4344 4240 [email protected]

Eduardo Garcia Arguelles GVC +34 914 367 810 [email protected] Holger Schmidt, CEFA EQB +49 69 58 99 74 32 [email protected]

Alexandre Gérard CIC +33 1 53 48 80 93 [email protected] Cengiz Sen EQB +4969 58997 435 [email protected]

Philipp Häßler, CFA EQB +49 69 58997 414 [email protected] Pekka Spolander OPG +358 10 252 4351 [email protected]

Simon Heilmann EQB +49 69 58 997 413 [email protected] Kimmo Stenvall OPG +358 10 252 4561 [email protected]

Dr. Knud Hinkel EQB + 49 69 58997 419 [email protected] Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 [email protected]

Marcell Houben NIBC +31 20 550 8649 [email protected] Luigi Tramontana BAK +39 02 4344 4239 [email protected]

Carlos Jesus CBI +351 21 389 6812 [email protected] Johan van den Hooven NIBC +312 0 5508518 [email protected]

Mark Josefson EQB +4969-58997-437 [email protected] Kévin Woringer CIC +33 1 53 48 80 69 [email protected]

(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts

of 60


ESN Recommendation System The ESN Recommendation System is Absolute. It means that each stock is rated on the basis of

a total return, measured by the upside potential (including dividends and capital reimbursement)

over a 12 month time horizon.

The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories: Buy

(B), Accumulate (A), Neutral (N), Reduce (R) and Sell (S).

Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate the

stocks as Rating Suspended (RS) or Not Rated (NR), as explained below.

Meaning of each recommendation or rating:

Buy: the stock is expected to generate total return of over 15% during the next 12 months time horizon

Accumulate: the stock is expected to generate total return of 5% to 15% during the next 12 months time horizon

Neutral: the stock is expected to generate total return of -5% to +5% during the next 12 months time horizon

Reduce: the stock is expected to generate total return of -5% to -15% during the next 12 months time horizon

Sell: the stock is expected to generate total return under -15% during the next 12 months time horizon

Rating Suspended: the rating is suspended due to a change of analyst covering the stock or a capital operation (take-over bid, SPO, …) where the issuer of the document (a partner of ESN) or a related party of the issuer is or could be involved

Not Rated: there is no rating for a company being floated (IPO) by the issuer of the document (a partner of ESN) or a related party of the issuer

Certain flexibility on the limits of total return bands is permitted especially during higher phases of volatility on the markets

ESN Ratings Breakdown

Date and time of production: 25th October 2016 9:13am CET First date and time of dissemination: 25th October 2016 9:16am CET

Disclaimer: These reports have been prepared and issued by the Members of

European Securities Network LLP (‘ESN’). ESN, its Members and their

affiliates (and any director, officer or employee thereof), are neither liable

for the proper and complete transmission of these reports nor for any

delay in their receipt. Any unauthorised use, disclosure, copying,

distribution, or taking of any action in reliance on these reports is strictly

prohibited. The views and expressions in the reports are expressions of

opinion and are given in good faith, but are subject to change without

notice. These reports may not be reproduced in whole or in part or passed

to third parties without permission. The information herein was obtained

from various sources. ESN, its Members and their affiliates (and any

director, officer or employee thereof) do not guarantee their accuracy or

completeness, and neither ESN, nor its Members, nor its Members’

affiliates (nor any director, officer or employee thereof) shall be liable in

respect of any errors or omissions or for any losses or consequential

losses arising from such errors or omissions. Neither the information

contained in these reports nor any opinion expressed constitutes an offer,

or an invitation to make an offer, to buy or sell any securities or any

options, futures or other derivatives related to such securities (‘related

investments’). These reports are prepared for the clients of the Members

of ESN only. They do not have regard to the specific investment

objectives, financial situation and the particular needs of any specific

person who may receive any of these reports. Investors should seek

financial advice regarding the appropriateness of investing in any

securities or investment strategies discussed or recommended in these

reports and should understand that statements regarding future prospects

may not be realised. Investors should note that income from such

securities, if any, may fluctuate and that each security’s price or value may

rise or fall. Accordingly, investors may receive back less than originally

invested. Past performance is not necessarily a guide to future

performance. Foreign currency rates of exchange may adversely affect the

value, price or income of any security or related investment mentioned in

these reports. In addition, investors in securities such as ADRs, whose

value are influenced by the currency of the underlying security, effectively

assume currency risk. ESN, its Members and their affiliates may submit a

pre-publication draft (without mentioning neither the recommendation nor

the target price/fair value) 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. Like all

members employees, analysts receive compensation that is impacted by

overall firm profitability For further details about the analyst certification,

the specific risks of the company and about the valuation methods used to

determine the price targets included in this report/note, please refer to the

specific disclaimer pages prepared by the ESN Members. In the case of a

short note please refer to the latest relevant published research on single

stock or contact the analyst named on the front of the report/note for

detailed information on the valuation methods, earning estimates and

risks. A full description of all the organisational and administrative

measures taken by the Members of ESN to manage interest and conflicts

of interest are available on the website of the Members. Research is

available through the ESN Members sales representative. ESN will

provide periodic updates on companies or sectors based on company-

specific developments or announcements, market conditions or any other

publicly available information. Unless agreed in writing with an ESN

Member, this research is intended solely for internal use by the recipient.

Neither this document nor any copy of it may be taken or transmitted into

Australia, Canada or Japan or distributed, directly or indirectly, in

Australia, Canada or Japan or to any resident thereof. This document is

for distribution in the U.K. Only to persons who have professional

experience in matters relating to investments and fall within article 19(5) of

the financial services and markets act 2000 (financial promotion) order

2005 (the “order”) or (ii) are persons falling within article 49(2)(a) to (d) of

the order, namely high net worth companies, unincorporated associations

etc (all such persons together being referred to as “relevant persons”).

This document must not be acted on or relied upon by persons who are

not relevant persons. Any investment or investment activity to which this

document relates is available only to relevant persons and will be engaged

in only with relevant persons. The distribution of this document in other

jurisdictions or to residents of other jurisdictions may also be restricted by

law, and persons into whose possession this document comes should

inform themselves about, and observe, any such restrictions. By accepting

this report you agree to be bound by the foregoing instructions. You shall

indemnify ESN, its Members and their affiliates (and any director, officer or

employee thereof) against any damages, claims, losses, and detriments

resulting from or in connection with the unauthorized use of this document.

For disclosure upon “conflicts of interest” on the companies under

coverage by all the ESN Members and on each “company

recommendation history”, please visit the ESN website

(www.esnpartnership.eu) or refer to the ESN Members website. Additional

information is always available upon request. For additional information

and individual disclaimers please refer to www.esnpartnership.eu and

to each ESN Member websites:

www.bancaakros.it regulated by the CONSOB - Commissione Nazionale per le Società e la Borsa

www.caixabi.pt regulated by the CMVM - Comissão do Mercado de Valores Mobiliários

www.cmcicms.com regulated by the AMF - Autorité des marchés financiers

www.equinet-ag.de regulated by the BaFin - Bundesanstalt für Finanzdienstleistungsaufsicht

www.ibg.gr regulated by the HCMC - Hellenic Capital Market Commission

www.nibcmarkets.com regulated by the AFM - Autoriteit Financiële Markten

www.op.fi regulated by the Financial Supervision Authority

www.valores.gvcgaesco.es regulated by CNMV - Comisión Nacional del Mercado de Valores

Members of ESN (European Securities Network LLP)

Caixa-Banco de Investimento

Rua Barata Salgueiro, nº 33

1269-057 Lisboa

Portugal

Phone: +351 21 313 73 00

Fax: +351 21 389 68 98

GVC Gaesco Beka, SV, SA

C/ Marques de Villamagna 3

28001 Madrid

Spain

Phone: +34 91 436 7813

Investment Bank of Greece

32 Aigialeias Str & Paradissou,

151 25 Maroussi,

Greece

Tel: +30 210 81 73 383

Banca Akros S.p.A.

Viale Eginardo, 29

20149 MILANO

Italy

Phone: +39 02 43 444 389

Fax: +39 02 43 444 302

NIBC Markets N.V.

Nieuwezijds Voorburgwal 162

P.O.Box 235

1000 AE Amsterdam

The Netherlands

Phone: +31 20 550 8500

Fax: +31 20 626 8064

CM - CIC Market Solutions

6, avenue de Provence

75441 Paris

Cedex 09

France

Phone: +33 1 53 48 80 78

Fax: +33 1 53 48 82 25

equinet Bank AG

Gräfstraße 97

60487 Frankfurt am Main

Germany

Phone:+49 69 – 58997 – 212

Fax:+49 69 – 58997 – 299

OP Corporate Bank plc

P.O.Box 308

Teollisuuskatu 1, 00013 Helsinki

Finland

Phone: +358 10 252 011

Fax: +358 10 252 2703

http://www.bancaakros.it/

http://www.caixabi.pt/

https://mail.esnpartnership.eu/owa/redir.aspx?C=8Zt3eXAOIkqYEQDE_-yjO4gceHQnAtMIAKuq5wlXoeMctWfJzR5HnUAHD5WapHeCCa8AyfgTFB4.&URL=http%3a%2f%2fwww.cmcicms.com

http://www.equinet-ag.de/

http://www.ibg.gr/

http://www.nibcmarkets.com/

http://www.op.fi/

http://www.valores.gvcgaesco.es/

ESN Analyser Investment Research - Zonavalue Club · 2017-05-15 · ESN Analyser Investment...

Documents

Transcript of ESN Analyser Investment Research - Zonavalue Club · 2017-05-15 · ESN Analyser Investment...