ESN Analyser Investment Research - Zonavalue Club...Repsol (Buy) Details from the 3Q results...

ESN Analyser

Investment Research

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

ESN Analyser

Investment Research

DEAR CLIENT,

INVITATION

“31st ESN EUROPEAN CONFERENCE”

London, 13 December 2016

Merchant Taylors’ Hall (30 Threadneedle Street, London, EC2R 8JB)

Companies available for one-to-one meetings Please consult the ESN website conference dedicated page

http://www.esnpartnership.eu/conferences/actual

ESN Top Picks

Roadshows

Corporate Events

Tactical Sector Views

ESN European Top Picks

POSTE ITALIANE (IN)- BLUE CHIPS

RECOMMENDATION CHANGES

SRV Buy from Accumulate On a strong earnings growth path

F-Secure Accumulate from Neutral Growth momentum is building up

NEWS BY SECTOR

AEROSPACE & DEFENSE

Leonardo (Buy) Q3 results: P&L disappointed a bit, Net Debt did well indeed

AUTOMOBILES & PARTS

Bittium Corporation (Accumulate) Story unchanged for the next few years

BMW (Accumulate) Solid Q3 2016 results

BANKS

Commerzbank (Buy) Q3 better than expected on net profit level

Intesa Sanpaolo (Accumulate) Q3 16 results preview

Poste Italiane (Accumulate) Pioneer: the new-co could be listed

BASIC RESOURCES

Altri (Buy) 3Q16 results comment: high margin despite falling pulp prices

Corticeira Amorim (Accumulate) Sale of 10% of share capital through ABB

Outokumpu (Accumulate) Earnings turnaround progressing

http://www.esnpartnership.eu/conferences/actual

ESN Analyser

Investment Research

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ELECTRONIC & ELECTRICAL EQUIPMENT

Nexans (Accumulate) Less favourable activity in Q3

FINANCIAL SERVICES

Azimut (Accumulate) New little acquisition in Australia

CapMan (Neutral) Norvestia merger strengthens the profile

FOOD & BEVERAGE

Coca Cola HBC AG (Neutral) 3Q16 conference call highlights

KWS Saat (Buy) KWS Saat: For 160 years in business and still thriving

FOOD & DRUG RETAILERS

Sonae (Buy) 9M16 results preview – sales pick up expected

Sonae (Buy) Sonae Sierra’s 9M16 results – higher indirect results

INDUSTRIAL ENGINEERING

Sector News Global ship market – decline stabilising

Duro Felguera (Neutral) 3Q’16 results

Technotrans (Accumulate) Sale of treasury stock – no material impact

INSURANCE

AXA (Buy) A more demanding climate for Savings activities

Banca Mediolanum (Accumulate) A part of Mr Berlusconi’s voting rights was suspended

Sampo (Accumulate) Additional support from Topdanmark to the dividend flow

MATERIALS, CONSTRUCTION & INFRASTRUCTURE

Ferrovial (Accumulate) Best proposal for I-66

LafargeHolcim (Buy) Q3 a bit better than expected

SRV (Buy) On a strong earnings growth path

Titan Cement (Accumulate) Solid performance in 3Q16, bottom line boosted by one-off tax

Vicat (Accumulate) Q3 in line but guidance revised down

MEDIA

Sector News SPAIN: October audience/targets. A3M positive

JCDecaux (Accumulate) Q3 revenues: an organic contraction in Q4

Ubisoft (Neutral) H1 2016/17 results: EBIT guidance revised upwards

OIL & GAS PRODUCERS

Repsol (Buy) Details from the 3Q results conference call

OIL SERVICES

Tenaris (Neutral) Better than expected margins in Q3

PERSONAL GOODS

adidas (Sell) Great Q3 underpins strong current year forecast

Hermès Intl. (Neutral) Feedback from the conference call on Q3 revenues

L’Oréal (Reduce) Q3 revenues slightly higher than expectations

ESN Analyser

Investment Research

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REAL ESTATE

Beni Stabili (Accumulate) Rental income sizeably down as expected

Sponda (Accumulate) Q3 results matched expectations and a technical guidance upgrade

SOFTWARE & COMPUTER SERVICES

F-Secure (Accumulate) Growth momentum is building up

SUPPORT SERVICES

Ei Towers (Accumulate) 9m 2016 Post: solid results

Fiera Milano (Accumulate) Improvement expected in Q3 2016

TELECOMMUNICATIONS

Sector News SPAIN: Orange changes its commercial strategy

Vodafone (Accumulate) H1 2016 Pre: we expect good results

UTILITIES

EDP (Accumulate) 9M16 results in line with expectations

Snam (Neutral) On the gas!

Terna (Neutral) We expect resilient results in 9M 2016 Y/Y

ESN Top Picks

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Blue Chips Top Picks

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

0 3 / 11/ 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y

pr i c e

( D i v .

Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s Eur o

S t ox x

AM ADEUS Spain Sof t ware & Comput er Services Long Buy 40.96 49.20 20% 18/ 08/ 2016 41.96 41.96 - 2 . 4 % -1.8%

CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 63.10 76.00 20% 17/ 10/ 2016 66.30 66.30 - 4 . 8 % -3.1%

HEI NEKEN Net herlands Food & Beverage Long Buy 73.22 100.00 37% 25/ 05/ 2016 83.08 82.56 - 11. 3 % -10.7%

I NDI TEX Spain General Ret ailers Long Accumulat e 31.12 36.10 16% 18/ 08/ 2016 30.93 30.93 0 . 6 % 1.2%

J CDECAUX France Media Long Accumulat e 26.98 31.00 15% 17/ 10/ 2016 28.16 28.16 - 4 . 2 % -2.4%

KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.86 3.55 24% 20/ 09/ 2016 2.82 2.82 1. 1% 1.6%

P OS TE I TALI ANE It aly Banks Long Accumulat e 6.02 7.90 31% 03/ 11/ 2016 5.96 5.96 1. 0 % 1.2%

RELX Net herlands Media Long Accumulat e 14.72 16.75 14% 27/ 10/ 2016 15.14 15.14 - 2 . 8 % 0.4%

S TORA ENS O Finland Basic Resources Long Accumulat e 8.50 9.30 9% 17/ 10/ 2016 8.16 8.16 4 . 1% 5.9%

TECHNI P France Oil Services Long Buy 59.25 67.00 13% 18/ 10/ 2016 58.60 58.60 1. 1% 2.4% 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

0 3 / 11/ 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y pr i c e

( D i v . Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s

Eur o

S t ox x

ACERI NOX Spain Basic Resources Long Buy 10.79 14.00 30% 18/ 08/ 2016 11.71 11.71 - 7 . 9 % -7.2%

ALTRAN France Sof t ware & Comput er Services Long Buy 12.83 15.00 17% 17/ 10/ 2016 13.20 13.20 - 2 . 8 % -1.1%

CAF Spain Indust r ial Transport at ion Long Accumulat e 337.50 390.00 16% 18/ 08/ 2016 342.80 342.80 - 1. 5 % -0.9%

DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.15 12.30 34% 22/ 08/ 2016 8.10 8.10 13 . 0 % 13.4%

FORFARM ERS Net herlands Food & Beverage Long Buy 6.82 8.30 22% 28/ 09/ 2016 6.48 6.48 5 . 3 % 5.8%

FUGRO Net herlands Oil Services Long Buy 15.24 19.00 25% 20/ 10/ 2016 15.56 15.56 - 2 . 1% 0.8%

J UM BO Greece General Ret ailers Long Buy 12.15 14.99 23% 21/ 10/ 2016 12.62 12.62 - 3 . 7 % -0.4%

NH HOTEL GROUP Spain Travel & Leisure Long Buy 3.99 6.80 71% 18/ 08/ 2016 4.00 4.00 - 0 . 4 % 0.2%

NOS Port ugal Telecommunicat ions Long Buy 5.86 7.00 19% 17/ 10/ 2016 5.89 5.89 - 0 . 5 % 1.2%

OP AP Greece Travel & Leisure Long Buy 8.34 9.60 15% 28/ 06/ 2016 5.98 5.86 4 2 . 3 % 31.5%

RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 12.25 14.00 14% 20/ 06/ 2016 8.29 8.29 4 7 . 8 % 43.0%

TECHNOGYM It aly Personal Goods Long Buy 3.97 4.95 25% 15/ 06/ 2016 3.78 3.78 5 . 0 % -1.4%

THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.58 4.60 78% 22/ 06/ 2016 2.72 2.72 - 5 . 1% -6.0%

YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 25.12 31.30 25% 17/ 10/ 2016 27.82 27.82 - 9 . 7 % -7.9%

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.

ESN Top Picks

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POSTE ITALIANE (IN)- BLUE CHIPS

Insurance and financial services are likely to play a key role in focusing and diversifying the offer on more profitable and

marketable products, such as asset management services and P&C (Non-Auto). The huge amount of money managed (c.

EUR 476bn at the end of 2015), the capillarity of the distribution network and one of the largest client bases in Italy, ought to

underpin the upside in the medium term. We believe the expected EPS adj. growth (c. 10.1% in 2016 -2018) can be bought

at a reasonable price (Adj. P/E 2016 and 2017 at c. 10x and 8.3x respectively). Poste could also consider some acquisitions

in the parcel business - to support the expected growth in e-commerce and mitigate the price pressure - and in payment

platform operators, to ride the digital revolution ahead. The real estate assets could act as further hidden value in the long

term. We estimate an operating profit of c. EUR 1.3bn in 2018 (CAGR 14.5%), driven by the sizable contribution from the

expected turnaround in the mail and parcel business unit and thanks to the insurance division. We estimate a Net profit adj.

of EUR 1.1bn in 2018 (CAGR 10.1%), which is likely to lead to a ROE Adj of 10.7% in 2018 from 8.5% in 2015. We expect an

average DPS of .c EUR 0.43 in 2016 -2018, which corresponds to an average annual yield of c. 7% in the next three years.

By applying the SOP approach, we obtained a TP of EUR 7.9 per share. The offer on Pioneer is still pending: if the priced

offered is near EUR 4bn, the stock could react negatively in the short term, although we believe the acquisition could create

value in the medium term. The delivery of the plan and its execution remain the main risks.

Roadshows

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SUBJECT LOCATION EVENT DATE

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

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

Mediaset España Madrid Local Company Roadshow 10/11/2016

Kemira Lisboa Cross-country Company Roadshow 11/11/2016

Corporate Events

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Corporate Events today

Source: Precise

CompanyBloomberg

codeDate Event Type Description

ACCIONA ANA SM 04/11/16 Results Q3 2016 Results

AMADEUS AMS SM 04/11/16 Results Q3 2016 Results

AMS SM 04/11/16 Results Q3 2016 Webcast

AXA CS FP 04/11/16 Trading Update Q3 2016 Activity Indicators

BMW BMW GR 04/11/16 Results Q3 2016 Results

BMW GR 04/11/16 Results Q3 2016 Earnings conference call {analyst}

BMW GR 04/11/16 Results Q3 2016 Earnings conference call {press}

CIE FIN. RICHEMONT CFR VX 04/11/16 Analyst Meeting Interim 2017 Webcast

CFR VX 04/11/16 Results Interim 2017 Results

COMMERZBANK CBK GR 04/11/16 Results Q3 2016 Results

CBK GR 04/11/16 Results Q3 2016 Earnings conference call / Webcast

EDP EDP PL 04/11/16 Results Q3 2016 Earnings conference call / Webcast

FIERA MILANO FM IM 04/11/16 Results Q3 2016 Results

INTESA SANPAOLO ISP IM 04/11/16 Results Q3 2016 Results

ISP IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast

JUMBO BELA GA 04/11/16 Ex Dividend Date Full year 2016 Ex-dividend date - proposed EUR 0.27

LAFARGEHOLCIM LHN VX 04/11/16 Results Q3 2016 Results

LEONARDO LDO IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast

NEXANS NEX FP 04/11/16 Trading Update Q3 2016 Sales

OTE HTO GA 04/11/16 AGM EGM - 2nd call {if required} re framework cooperation & service agreement for provision by OTE SA to Deutsche Telekom Pan-Net SRO

RAMIRENT RMR1V FH 04/11/16 Analyst Meeting Q3 2016 Press & analyst meeting / Webcast

RMR1V FH 04/11/16 Results Q3 2016 Results

REN RENE PL 04/11/16 Results Q3 2016 Results

RHOEN-KLINIKUM RHK GR 04/11/16 Results Q3 2016 Earnings conference call / Webcast

RHK GR 04/11/16 Results Q3 2016 Results

SONAE CAPITAL SONC PL 04/11/16 Results Q3 2016 Results

SPONDA SDA1V FH 04/11/16 Results Q3 2016 Results

SDA1V FH 04/11/16 Results Q3 2016 Earnings conference call / Webcast

TENARIS TEN IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast

TERNA TRN IM 04/11/16 Results Q3 2016 Earnings conference call / Webcast

TRN IM 04/11/16 Results Q3 2016 Results

VICAT VCT FP 04/11/16 Trading Update Q3 2016 Sales conference call

ESN Tactical Sector Views

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Tactical Sector Allocation Matrix July 2016

SectorCurrent Tactical

ViewAction

Previous

Tactical View

Stoxx 600

Weighting

LATEST REVIEW

DATE

Automobiles & Parts + upgrade = 3% Jul-16

Banks - - 10% Jul-16

Basic Resources = = 2% Jul-16

Chemicals = = 5% Jul-16

Construction & Materials + + 3% Jul-16

Financial Services - dow ngrade = 2% Jul-16

Food & Beverage + + 7% Jul-16

Healthcare + upgrade = 14% Jul-16

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

Insurance - dow ngrade + 6% Jul-16

Media - dow ngrade = 3% Jul-16

Oil & Gas = = 5% Jul-16

Personal & Household Goods + + 9% Jul-16

Real Estate + upgrade - 2% Jul-16

Retail - dow ngrade = 3% Jul-16

Technology + upgrade = 4% Jul-16

Telecommunications = dow ngrade + 5% Jul-16

Travel & Leisure + + 2% Jul-16

Utilities + upgrade - 4% Jul-16

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

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

fundamental view of the relevant ESN sector analyst team

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Leonardo

Italy/Aerospace & Defense Analyser

AEROSPACE & DEFENSE

Leonardo (Buy) Q3 results: P&L disappointed a bit, Net Debt did well indeed

Q3 results: P&L disappointed a bit, Net Debt did well indeed

The facts: LDO released bang in line Q3 results yesterday after trading hours.

LDO kept its FY16 guidance unchanged (new orders: ~EUR 20bn; revenues:

EUR 12.2/12.7bn; EBITA: EUR 1.22/1.27bn; FOCF at EUR 500/600m; Net Debt

at ~EUR 2.8bn).

The management is due to hold a conference call at 09.00 am (Italy: + 39 02

8020911; UK: + 44 1 212 818004; USA: + 1 718 7058796)

Our analysis: new orders (~EUR 2.6bn, +17% Y/Y) beat our estimates (EUR

2.2bn); revenues (~EUR 2.6bn, ~-13% Y/Y) were ~6% lower than expected;

EBITA (EUR 274m, -7% Y/Y) was ~6% below our estimates (EUR 293m) and

Adj. net profit (EUR 143m, +84% Y/Y) was better than expected (EUR 126m)

mainly thanks to lower financial charges.

Net Debt (~EUR 3.9bn) improved by ~EUR 0.3bn Q/Q beating our expectations

(~EUR 4.2bn), thanks to an advance payment by Kuwait (EUR 0.2bn) and better

cash generation while the negative impact from the devaluation of the UK Pound

weighed for EUR 180m. Here follow more details on Q3 results:

- Helicopters: new orders hit EUR 580m (~-7% Y/Y and -47% YTD);

revenues fell ~22% Y/Y (-20% YTD) and EBITA reached EUR 83m (-31%

Y/Y) with a 9.7% margin (-130 b.ps Y/Y). We had expected revenues to

come in at EUR 951m and EBITA to reach EUR 100m.

- Defence Electronics: new orders reached EUR 1.75bn (~+63% Y/Y);

revenues came in at EUR 1.1bn (-8.5% Y/Y) and EBITA hit EUR 92m (~-

14% Y/Y) at 8.1% of revenues (-60 b.ps Y/Y). We had expected revenues

of EUR 1.13bn and an EBITA of EUR 116m.

- Aeronautics: new orders came in at ~EUR 568m (~-46% Y/Y), revenues

reached EUR 681m (~-6% Y/Y) and EBITA was EUR 83m (~+8% Y/Y) at

~12% of revenues (+160 b.ps Y/Y). We had expected revenues of EUR

681m and an EBITA of EUR 82m.

- Space: EBITA improved to EUR 14m (EUR 5m in Q3 2015), better than

our estimate of EUR 7m.

The performance of the helicopter and defence electronics businesses came

short of our estimates, which were higher than consensus.

When it comes to helicopters, the reference scenario remains challenging,

although now orders remained flat Q/Q and fell "only" 7% Y/Y; in addition, we

stress that the GBP devaluation should have weighed for at least 3 or 4% Y/Y on

revenues. When dealing with Defence Electronics, we argue that the margin

softening derived from DRS, the US subsidiary, for a mix reason.

Conclusion & Action: Q3 P&L results were broadly in line with consensus, but

lower than our own estimates; Net Debt was surprisingly low in comparison with

our and consensus' estimates. The helicopter business deterioration went on, but

it seems that the scenario is improving, little by little. We will wait the conference

call to possibly tune our estimates.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Buy

10.82

closing price as of 03/11/2016

15.00

Target Price unchanged

Recommendation unchanged

Target price: EUR

Share price: EUR

Reuters/Bloomberg LDOF.MI/LDO IM

Market capitalisation (EURm) 6,256

Current N° of shares (m) 578

Free float 64%

Daily avg. no. trad. sh. 12 mth 2,940

Daily avg. trad. vol. 12 mth (m) 25,144

Price high 12 mth (EUR) 13.71

Price low 12 mth (EUR) 8.38

Abs. perf. 1 mth 8.53%


Abs. perf. 12 mth -8.23%

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

Sales (m) 12,995 12,576 12,938

EBITDA (m) 1,668 1,683 1,846

EBITDA margin 12.8% 13.4% 14.3%

EBIT (m) 884 1,002 1,169

EBIT margin 6.8% 8.0% 9.0%

Net Profit (adj.)(m) 524 637 597

ROCE 6.7% 7.4% 7.6%

Net debt/(cash) (m) 3,278 2,655 2,072

Net Debt/Equity 0.8 0.6 0.4

Debt/EBITDA 2.0 1.6 1.1

Int. cover(EBITDA/Fin. int) 3.8 4.5 5.1

EV/Sales 0.7 0.5 0.5

EV/EBITDA 5.2 4.0 3.4

EV/EBITDA (adj.) 4.6 3.7 3.3

EV/EBIT 9.8 6.8 5.4

P/E (adj.) 14.2 9.8 10.5

P/BV 1.7 1.3 1.2

OpFCF yield 9.9% 9.9% 13.2%

Dividend yield 0.0% 2.3% 2.6%

EPS (adj.) 0.91 1.10 1.03

BVPS 7.40 8.18 8.80

DPS 0.00 0.25 0.28

8

9

10

11

12

13

14

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

vvdsvdvsdy

LEONARDO Stoxx Aerospace & Defense (Rebased)Source: Factset

Shareholders: Italian Government 32%; Norges Bank

2%; Libyan Investment Authority 2%;

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Bittium Group

Q3 2015a

M€ Q3a OP Cons. Diff. OP Cons. Diff.

Sales 14.1 14.8 12.9 15% 0 11.1 0 62 64 -2%

EBIT 0.9 1.3 0.4 271% # 0.0 0 2.3 3.1 -26%

EBIT margin 6.4 % 8.8 % 2.7 % 0.0 % # 0.0 % # 3.7 % 4.9 %

PTP 1.1 1.5 0.5 233% 0 0.1 0 2.9 3.8 -24%

EPS 0.03 0.04 0.01 300% 0.00 0.08 0.10 -21%

DPS 0.00 0.30 0.30 # 0.03 # 0.04 0.07 -41%

Source: OP and FactSet

2016eQ3 2016e

Bittium Corporation

Finland/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Bittium Corporation (Accumulate) Q3 results: P&L disappointed a bit, Net Debt did well indeed

Story unchanged for the next few years

The facts: Bittium's Q3 results were in line with our forecasts but topped

consensus expectations. The growth of service business (+36.8% YoY) was

supported by the device designs for the MEXSAT project. As regards equipment,

a device delivery to a US client as well as an order from the Finnish Defence

Forces took place in the comparison period, and the equipment business

therefore declined 8%. According to the company, the trend in equipment

business largely met expectations. The good profitability in Q3 was also impacted

by the lower costs during the holiday quarter.

Our analysis: Bittium keeps its sales guidance unchanged and expects 2016 net

sales to grow from 2015 (EUR 56.8m). In connection with the Q3 results the

company also issued EBIT guidance for 2016 for the first time. Bittium expects

EBIT to be at the same level as in 2015 (EUR 2.3m). On the basis of the

guidance, the company’s sales in Q4 will be at least EUR 11m and EBIT will be

around EUR 0.70m. The company justifies the drop in Q4 EBIT with the costs

relating to defining its new strategy as well as high R&D expenses. The R&D

costs relate to the development of the company's secure smartphone and IoT

products. Bittium also repeated its estimate of strong growth in equipment sales

in 2017.

Bittium's potential deals are large compared to its size and the negotiations take a

long time. It is challenging to predict the timing of deals. We expect the phone

deliveries for the MEXSAT project to start during 2017 and to underpin equipment

sales. At maximum 150,000 devices will be connected to the MEXSAT system,

and Bittium will deliver at least part of them. The company is also negotiating on

some projects relating to tactical communication systems.

Conclusion & Action: Our biggest forecast revision concerns the EBIT forecast

for 2016, which fell from EUR 4m to EUR 2.3m after the profitability guidance. We

have not made any significant revisions to our forecasts for 2017 and 2018. We

maintain our target price at EUR 6.60. Our recommendation is Accumulate

Analyst(s):

Hannu Rauhala, OP Corporate Bank

[email protected]

+358 10 252 4392

Accumulate

5.82


6.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg BITTI.HE/BITTI FH

Market capitalisation (EURm) 208


Free float 86%

Daily avg. no. trad. sh. 12 mth 92

Daily avg. trad. vol. 12 mth (m) 693







Sales (m) 57 64 69

EBITDA (m) 8 10 11

EBITDA margin 13.2% 15.1% 16.6%

EBIT (m) 2 4 7

EBIT margin 4.1% 6.3% 9.6%


ROCE 10.2% 10.0% 15.0%

Net debt/(cash) (m) (122) (110) (110)

Net Debt/Equity -0.9 -0.8 -0.8

Debt/EBITDA -16.2 -11.5 -9.6

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

EV/Sales 2.2 1.5 1.4

EV/EBITDA 17.0 10.0 8.3

EV/EBITDA (adj.) 17.0 10.0 8.3

EV/EBIT 55.4 24.1 14.3

P/E (adj.) 0.5 48.8 32.1

P/BV 1.8 1.5 1.4

OpFCF yield 3.8% -4.4% 1.1%


EPS (adj.) 15.06 0.12 0.18

BVPS 3.86 3.92 4.04

DPS 0.30 0.06 0.09

5.0

5.5

6.0

6.5

7.0

7.5

8.0


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BITTIUM CORPORATION OMXH (Rebased)Source: Factset

Shareholders: Harju Jukka 5%; Hulkko Juha 5%;

Veikkolainen Erkki 4%;

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BMW

Germany/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

BMW (Accumulate) Story unchanged for the next few years

Solid Q3 2016 results

The facts: BMW reported a set of Q3 2016 results, which was operationally in

line with expectations. On a pre-tax and net profit basis results were better than

expected as the financial result turned positive.

Our analysis: As the financial result is fluctuating heavily due to fair value

adjustments of derivatives this should however not be in the focus of investors.

Earning quality looks ok at first glance. Production topped deliveries to customers

only marginally (and less than in Q3 2015). Operating cashflow in the Automobile

segment increased by 5.5% yoy and thus stronger than the operating result.

The guidance for 2016 was confirmed. BMW continues to target an increase in

deliveries to customers in the Automotive segment as well as a slight increase of

group pretax profit to a new record number and EBIT margin in the Automobile

segment of 8-10%.

Conclusion & Action: BMW continues to development pretty solidly in a year

which is difficult to a weakness in the model cycle. We expect the model cycle to

turn and become more positive in FY 2017, which would also help to improve the

relative momentum to the competition.

Analyst(s):

Tim Schuldt, CFA, equinet Bank

[email protected]

+49 69 5899 7433

Accumulate

75,23


96,00



Target price: EUR

Share price: EUR

Reuters/Bloomberg BMWG.DE/BMW GR

Market capitalisation (EURm) 49.388


Free float 57%

Daily avg. no. trad. sh. 12 mth 1.734

Daily avg. trad. vol. 12 mth (m) 108.574

Price high 12 mth (EUR) 103,30

Price low 12 mth (EUR) 65,10

Abs. perf. 1 mth 0,56%

Abs. perf. 3 mth -0,77%

Abs. perf. 12 mth -19,60%


Sales (m) 92.175 96.404 99.073

EBITDA (m) 14.150 15.468 16.227

EBITDA margin 15,4% 16,0% 16,4%

EBIT (m) 9.464 10.088 10.542

EBIT margin 10,3% 10,5% 10,6%

Net Profit (adj.)(m) 6.369 6.427 6.777

ROCE 20,6% 21,2% 21,1%

Net debt/(cash) (m) (17.712) (18.800) (20.420)

Net Debt/Equity -0,4 -0,4 -0,4

Debt/EBITDA -1,3 -1,2 -1,3

Int. cover(EBITDA/Fin. int) 38,3 25,8 35,3

EV/Sales 0,5 0,3 0,3

EV/EBITDA 3,3 2,0 1,8

EV/EBITDA (adj.) 3,3 2,0 1,8

EV/EBIT 5,0 3,1 2,8

P/E (adj.) 10,1 7,7 7,3

P/BV 1,5 1,1 1,0

OpFCF yield -7,7% 12,3% 12,0%

Dividend yield 4,3% 4,5% 5,0%

EPS (adj.) 9,70 9,79 10,32

BVPS 64,81 71,45 78,48

DPS 3,20 3,35 3,75

65

70

75

80

85

90

95

100

105

Okt 15 Nov 15 Dez 15 Jan 16 Feb 16 Mrz 16 Apr 16 Mai 16 Jun 16 Jul 16 Aug 16 Sep 16 Okt 16 Nov 16

vvdsvdvsdy

BMW Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: Stefan Quandt 16%; Johanna Quandt

15%; Susanne Klatten 12%;

BMW - Review Q3 2016

EUR m Q3 2016 Q3 2015 % YoY equinet Delta Cons. Delta

Revenues 23.362,0 22.345,0 4,6% 22.211 5,2% 23.205 0,7%

- BMW Automobiles 21.564,0 20.970,0 2,8% 20.760 3,9% 21.670 -0,5%

- Motorcycles 451,0 454,0 -0,7% 468 -3,6% 463 -2,6%

- Financial Services 6.403,0 5.621,0 13,9% 5.846 9,5% 5.861 9,2%

- Consolidation -5.056,0 -4.700,0 7,6% -4.863 4,0% -4.789 5,6%

EBIT 2.380,0 2.354,0 1,1% 2.301 3,4% 2.347 1,4%

EBIT Margin 10,2% 10,5% -35 BP 10,4% -17 BP 10,1% 7 BP

- BMW Automobiles 1.837,0 1.912,0 -3,9% 1.855 -0,9% 1.898 -3,2%

- Motorcycles 32,0 46,0 -30,4% 41 -22,7% 39 -17,9%

- Financial Services 576,0 465,0 23,9% 488 18,0% 471 22,3%

- Consolidation -65,0 -69,0 -5,8% -83 -21,7% -61 6,6%

EBT 2.575,0 2.263,0 13,8% 2.266 13,6% 2.307 11,6%

EBIT Margin 11,0% 10,1% 89 BP 10,2% 82 BP 9,9% 108 BP

Net income 1.821,0 1.579,0 15,3% 1.640 11,0% 1.670 9,0%

Source: BM W, equinet Research

of 59


Commerzbank

Germany/Banks Analyser

BANKS

Commerzbank (Buy) Solid Q3 2016 results

Q3 better than expected on net profit level

The facts: Commerzbank reported a net loss of EUR 288m for Q3 which was

however better than expected (equinet: EUR -442m) due to lower taxes, higher

other revenues and a lower goodwill write-down. Underlying profit development

was slightly lower than expected. The combined Net Interest Income & Trading

Profit figure was with EUR 1,508m EUR 120m below our forecast, while risk

provisions came in slightly lower (delta of EUR 25m), costs slightly higher than

forecasted (delta of EUR 33m) and commission income was in line with

expectations. Positively, the CT1 ratio increased by 30 bp’s qoq to 11.8%. CBK

sticks to its 2016e target of a achieving a slightly net profit and keeping risk

provisions below EUR 1bn. CT1 ratio should rise to around 12%.

Our analysis:

Other revenues/expenses amounted to EUR 97m in Q3 and were thus higher

than expected (EUR 0m), while at the same time goodwill write-down was with

EUR 627m below our forecast of EUR 700m as well. Last but not least the tax

payment was with EUR 14m well below our forecast of EUR 100m.

Segments: In PC operating profit declined by 8% yoy to EUR 209m due to lower

revenues (-4% yoy). CIR deteriorated by 3%-pts. yoy to 78%. In MSB operating

results remained stable yoy at EUR 229m. Higher risk provisions were offset by

valuation effects. In CEE the operating profit declined by 41% yoy to EUR 57m

due to higher costs (mainly the impact of the Polish banking tax). In Corporates &

Markets the operating result increased by 53% yoy to EUR 104m due to a

positive delta of valuation effects (OCS, FVA and CVA/DVA) and lower costs

while risk provisions more than doubled yoy. ACR showed a loss of EUR 108m

due to a sharp rise in risk provisions to EUR 147m. Positively, the Shipping

Exposure declined by 7% qoq to EUR 5.0bn.

Conclusion & Action: Q3 results were better than expected due to lower than

expected taxes and a less negative impact from one-offs. Positively, the CT1 ratio

improved by 30 bp’s qoq to 11.8%. We stick to our Buy rating with a target price

of EUR 7.50 on the back of CBK’s low valuation – 2017e P/BV of 0.3x is too low

in our view and does not reflect the bank’s earnings recovery potential in the mid-

term.

Analyst(s):

Philipp Häßler, CFA, equinet Bank

[email protected]

+49 69 58997 414

Buy

6.07


7.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg CBKG.DE/CBK GR


Current N° of shares (m) 1,252

Free float 83%









Total Revenue (m) 9,762 8,919 8,976

Pre-Provision Profit (PPP) (m) 2,605 1,744 1,307

Operating profit (OP) 1,909 894 407

Earnings Before Tax (m) 1,795 304 407

Net Profit (adj.) (m) 1,062 23 224

Shareholders Equity (m) 29,403 29,175 29,400

Tangible BV (m) 27,327 27,099 27,324

RWA (m) 198,232 198,232 202,197

ROTE 4.1% 0.1% 0.8%

Total Capital Ratio (B3) 16.5% 16.6% 16.3%

Cost/Income 73.3% 80.4% 85.4%

NPL ratio (gross) 3.1% 2.9% 2.6%

P/PPP 4.5 4.4 5.8

P/E (adj.) 10.9 nm 33.9

P/BV 0.4 0.3 0.3

P/TBV 0.4 0.3 0.3

Dividend Yield 3.3% 0.0% 0.0%

PPPPS 2.15 1.39 1.04

EPS (adj.) 0.88 0.02 0.18

BVPS 23.48 23.30 23.47

TBVPS 21.82 21.64 21.82

DPS 0.20 0.00 0.00

5

6

7

8

9

10

11


vvdsvdvsdy

COMMERZBANK Stoxx Banks (Rebased)Source: Factset

Shareholders: German government 17%;

Commerzbank - Q3 2016

EUR m Q3 '16 Q3 '16e Q3 '15 yoy Consensus delta

Revenues 2,437 2,398 2,309 6% 2,206 9%

of which NII 1,141 1,508 1,310 -13% na na

Expenses 1,733 1,700 1,734 0% 1,706 0%

CIR 71.1% 70.9% 75.1% -421 BP 77.3% -8%

Risk provis. 275 300 146 88% 255 18%

EBT -255 -302 401 na -455 na

Net income -288 -442 207 na -487 na

Sources: Commerzbank, equinet Research

of 59


Intesa Sanpaolo

Italy/Banks Analyser

BANKS

Intesa Sanpaolo (Accumulate) Q3 better than expected on net profit level

Q3 16 results preview

The facts: Intesa Sanpaolo is due to publish Q3 16 results today, conference call

presentation at 4.00pm CET.

Our analysis: We summarize our preview in the following table:

(EUR m) Q3 16E Q3 15A Y/Y Q2 16A Q/Q

Revenues 3,927 4,127 -4.8% 4,605 -14.7%

Operating costs -2,100 -2,059 2.0% -2,154 -2.5%

GOP 1,827 2,068 -11.7% 2,451 -25.5%

Loan provisions -800 -769 4.0% -923 -13.3%

Net Profit 594 722 -17.7% 901 -34.1%

Source: Company data, Banca Akros estimates

Pressured by lower revenues, higher costs and still high loan impairments, we

anticipate a weak quarter for Intesa Sanpaolo, ending with a net profit down 18%

Y/Y to approx. EUR 600m.

Total revenues are anticipated down 4.8% Y/Y to EUR 3.9bn, negatively impacted

by ca. EUR 100m annual contribution to the Deposit Guarantee Scheme vs.

roughly EUR 200m one-off gain one year ago from a successful claim. However,

the NII is seen decreasing 3% Y/Y to EUR 1.83bn (flat Q/Q), while net

commissions are estimated 1.7% lower Y/Y to EUR 1.72bn. Some EUR 200m

trading income vs. nil in Q3 15 should help support the revenue line.

Operating costs are expected to increase 2% Y/Y to EUR 2.1bn, leading to a

gross operating profit (GOP) of EUR 1.8bn, some 12% lower Y/Y with a C/I ratio

of 53.5%.

Loan impairments are forecast up 4% Y/Y to EUR 800m as we anticipate a further

strengthening of the coverage ratios.

The capital position should remain strong, with a CET1 ratio of around 13% both

phased-in and fully-loaded.

Conclusion & Action: We cut our Adj. EPS estimate for FY16 from EUR 0.18 to

0.15, while keeping EUR 0.22 and 0.24 for FY17 and FY18 respectively.

We reiterate Accumulate with EUR 2.8 target price.

Analyst(s):

Luigi Tramontana, Banca Akros

[email protected]

+39 02 4344 4239

Accumulate

2.04


2.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg ISP.MI/ISP IM



Free float 75%









Total Revenue (m) 17,149 16,285 17,368

Pre-Provision Profit (PPP) (m) 7,933 7,200 8,218

Operating profit (OP) 4,627 3,789 5,589

Earnings Before Tax (m) 4,597 3,647 5,567

Net Profit (adj.) (m) 2,601 2,543 3,624


Tangible BV (m) 35,238 36,046 36,637

RWA (m) 284,319 289,631 299,675

ROTE 6.9% 7.1% 10.0%


Cost/Income 51.4% 54.2% 51.4%

NPL ratio (gross) 11.7% 0.0% 0.0%

P/PPP 6.5 4.7 4.2

P/E (adj.) 19.9 13.4 9.4

P/BV 1.5 0.9 0.9

P/TBV 1.5 0.9 0.9


PPPPS 0.47 0.43 0.49

EPS (adj.) 0.15 0.15 0.22

BVPS 2.10 2.15 2.18

TBVPS 2.10 2.15 2.18

DPS 0.14 0.18 0.21

1.4

1.6

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4


vvdsvdvsdy

INTESA SANPAOLO Stoxx Banks (Rebased)Source: Factset

Shareholders: Local Foundations 25%;

of 59


Poste Italiane

Italy/Banks Analyser

BANKS

Poste Italiane (Accumulate) Q3 16 results preview

Pioneer: the new-co could be listed

The facts: The Italian newspaper “Il Messaggero” reported more details about

Poste’s offer on Pioneer.

Our analysis: Aberdeen and Poste Italiane, together with Anima an CDP are

going to present a joint binding offer for Pioneer on 10th

Novemeber. The

shareholders of the new-co, which will acquire Pioneer, could be the following:

Poste, 60%; Anima, 20%; Aberdeen, 10%; CDP, 10%. The aim of this “new”

consortium is to submit a competing offer to that of Amundi and Macquaire.

Amundi’a offer, according to the press, ought to be around EUR 3.6bn, while

Poste’s consortium offer is likely to be around EUR 3.4bn. The final price offered

will also depend on Pioneer’s cash (around EUR 500m) and on the distribution

agreement which is likely to be signed with Unicredit.

Conclusion & Action: this is neutral news. The joint offer could increase the

likelihood for Poste to acquire Pioneer, as well as the price offered. The point will

be the total consideration of the deal: around EUR 4bn, corresponding to a P/E

around 18x and c. 1.9% the AuM, could be challenging to create value. Anyway,

we believe in Pioneer’s strategic role in Poste’s business plan in the medium

term. The news could also be positive for the development of Anima (Buy; TP

EUR 5.8), which could be merged with the new-co which will acquire Pioneer.

Analyst(s):

Enrico Esposti, CIIA, Banca Akros

[email protected]

+39 02 4344 4022

Accumulate

6.02


7.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg PST.MI/PST IM



Free float 35%









Total Revenue (m) 30,738 32,667 33,304

Pre-Provision Profit (PPP) (m) 880 910 1,096

Operating profit (OP) 880 910 1,096

Earnings Before Tax (m) 933 933 1,120

Net Profit (adj.) (m) 825 813 958


Tangible BV (m) 9,658 9,785 10,036

RWA (m) 12,613 13,119 13,639

ROTE 8.5% 8.3% 9.5%


Cost/Income 97.1% 97.2% 96.7%

NPL ratio (gross) 0.0% 0.0% 0.0%

P/PPP 10.5 8.6 7.2

P/E (adj.) 11.2 9.7 8.2

P/BV 1.0 0.8 0.8

P/TBV 1.0 0.8 0.8


PPPPS 0.67 0.70 0.84

EPS (adj.) 0.63 0.62 0.73

BVPS 7.39 7.49 7.68

TBVPS 7.39 7.49 7.68

DPS 0.34 0.35 0.43

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5


vvdsvdvsdy

POSTE ITALIANE FTSE MIB (Rebased)Source: Factset

Shareholders: Ministry of Economy and Finance 65%;

of 59


Altri

Portugal/Basic Resources Analyser

BASIC RESOURCES

Altri (Buy) Pioneer: the new-co could be listed

3Q16 results comment: high margin despite falling pulp prices

The facts: Altri released its 3Q16 results today after the close of the Portuguese

market. The company recorded revenues of EUR 149.5m, EBITDA of EUR 40.2m

and net income of EUR 16.8m. On a cumulative basis (9M16), the company

recorded revenues of EUR 453.4m, EBITDA of EUR 128.7m and net income of

EUR 57.0m.

Our analysis: Once again and as stated in our Preview Note, the decrease in

pulp prices was the main driver of earnings in Q3, since there were no planned

annual stoppages in Celbi and Celtejo. The company produced 268.5 thousand

tons of pulp (o.w. 26.9 thousand dissolving) and reached sales of 258.5 thousand

(o.w. 28.0 thousand dissolving). This represented an increase of 14% QoQ in

production and 10% QoQ in terms of sales. The YoY decrease of the top line (a

price effect) was partially offset by a fall in operational costs of 7.7% YoY, leading

to a decrease of EBITDA (-36.2% YoY). EBITDA margin stood at 26.9% in the

quarter, i.e., +1.0 p.p. versus 2T16.

Net debt was of EUR 457m at the end of the quarter, a decrease of EUR 2m

against the previous quarter. The company recorded capex of EUR 21m in the

quarter and EUR 33m in the 9M16.

3Q16 results table

Source: Company data and CaixaBI Equity Research

Conclusion & Action: This set of results came above our estimates in the topline

and EBITDA. The major deviation against our estimates came from taxes (EUR -

6.9m versus EUR -4.9m estimated).

Lower pulp prices were the main event of the 3Q16’s results, with Altri still

maintaining a very efficient operating margin (26.9% in the quarter or 28.0% in

the 9M16) despite the pressure in terms of prices. The company believes that

BHKP prices could be affected by some temporary capacity cuts from major

producers or by some delays in their projects. We highlight once again that the

performance of the US dollar against the euro will be a key driver of profitability (a

stronger dollar is potentially positive).

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

3.09


5.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg ALSS.LS/ALTR PL



Free float 34%









Sales (m) 665 597 603

EBITDA (m) 221 169 166

EBITDA margin 33.3% 28.2% 27.5%

EBIT (m) 168 118 121

EBIT margin 25.3% 19.7% 20.0%


ROCE 15.1% 11.0% 11.4%

Net debt/(cash) (m) 430 388 322




EV/Sales 2.1 1.7 1.6

EV/EBITDA 6.4 6.1 5.8

EV/EBITDA (adj.) 6.4 6.1 5.8

EV/EBIT 8.4 8.7 7.9

P/E (adj.) 8.3 8.3 8.3

P/BV 3.0 1.8 1.6

OpFCF yield 13.0% 16.9% 13.5%


EPS (adj.) 0.57 0.37 0.37

BVPS 1.57 1.70 1.97

DPS 0.33 0.25 0.10

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5


vvdsvdvsdy

ALTRI Stoxx Basic Resources (Rebased)Source: Factset

Shareholders: Management 61%; Bestinver 5%;

EURm 3Q15 2Q16 3Q16 3Q16eChg. %

(YoY)

Chg. %

(QoQ)9M15 9M16 9M16e

Chg. %

(YoY)

Revenues 181.5 143.0 149.5 143.9 -17.6% 4.6% 494.3 453.4 448.6 -8.3%

EBITDA 63.1 37.1 40.2 37.9 -36.2% 8.6% 163.1 128.7 127.1 -21.1%

margin 34.8% 25.9% 26.9% 26.3% -7.9 p.p. 1.0 p.p. 32.9% 28.0% 28.2% -4.9 p.p.

EBIT 50.0 23.9 27.0 25.4 -46.0% 13.1% 123.9 88.9 88.1 -28.3%

margin 27.6% 16.7% 18.1% 17.6% -9.5 p.p. 1.4 p.p. 24.9% 19.2% 28.2% -5.7 p.p.

Net Fin. -4.5 -2.7 -3.3 -3.2 -26.8% 22.6% -15.6 -10.8 -10.7 -31.0%

Net Inc. 34.4 15.9 16.8 17.2 -51.1% 5.5% 84.7 57.0 58.3 -32.7%

margin 19.0% 11.2% 11.2% 12.0% -7.7 p.p. 0.1 p.p. 17.0% 12.3% 12.9% -4.7 p.p.

of 59


Corticeira Amorim

Portugal/Basic Resources Analyser

BASIC RESOURCES

Corticeira Amorim (Accumulate) 3Q16 results comment: high margin despite falling pulp prices

Sale of 10% of share capital through ABB

The facts: On November 3, Corticeira Amorim announced that Amorim

Internacional Participations and Investmark Holdings will each be selling 5% of

Corticeira Amorim’s share capital (to a total of 10% of its share capital) through

an Accelerated Bookbuilding procedure to take place until November 4.

The total consideration of the Offer amounts to EUR 105m, corresponding to a

price of EUR 7.90 per share.

Our analysis: Following a successful conclusion of this ABB, Corticeira Amorim’s

free float will rise to 25% (from 15% currently), contributing to the increase of the

stock’s liquidity and of its weight in the PSI-20 index.

Conclusion & Action: We believe that the added free float resulting from this

sale will be beneficial for the stock; it paves the way for the removal of the 10%

liquidity discount currently considered in our fair value appraisal. However, we will

wait for the announcement of the US Floors stake sale conditions before making

any adjustment to our valuation.

Analyst(s):

José Mota Freitas, CFA, Caixa-Banco de Investimento

[email protected]

+351 22 607 09 31

Accumulate

8.65


8.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg CORA.LS/COR PL



Free float 15%









Sales (m) 605 650 678

EBITDA (m) 101 124 132

EBITDA margin 16.7% 19.0% 19.5%

EBIT (m) 73 96 103

EBIT margin 12.0% 14.8% 15.2%


ROCE 11.6% 14.4% 15.2%

Net debt/(cash) (m) 84 75 62




EV/Sales 1.5 1.9 1.8

EV/EBITDA 8.7 10.0 9.3

EV/EBITDA (adj.) 8.7 10.0 9.3

EV/EBIT 12.1 12.9 11.9

P/E (adj.) 14.4 16.5 15.3

P/BV 2.3 3.1 2.9

OpFCF yield 3.2% 3.9% 5.8%


EPS (adj.) 0.41 0.52 0.57

BVPS 2.56 2.80 2.96

DPS 0.41 0.39 0.42

4

5

6

7

8

9

10

out 15 nov 15 dez 15 jan 16 fev 16 mar 16 abr 16 mai 16 jun 16 jul 16 ago 16 set 16 out 16 nov 16

vvdsvdvsdy

CORTICEIRA AMORIM PSI20 (Rebased)Source: Factset

Shareholders: Amorim Capital 51%; Investmark

Holdings 19%; Amorim Int. Part. 15%;

Treasury Shares 0.00%;

of 59


Outokumpu

EURm Q3a vs. Cons. OP Cons. Diff. Low High

Europe 946.0 -2% 970 969 0% 848 1,138

Americas 372.0 11% 322 334 -4% 275 385

Long Products 119.0 -11% 140 134 4% 82 160

Other operations #DIV/0! 135 #DIV/0!

Internal #DIV/0! -135 #DIV/0!

Total sales 1,419.0 -2% 1,432 1,452.0 -1% 1,272 1,656

Sales growth

EBIT

Europe 45.0 67% 13.0 27 -52% 8 42

Americas -7.0 36% 5.0 -11 n.a. -39 17

Long Products -1.0 #DIV/0! 1.0 0 #DIV/0! -4 7

Other operations n.a. -9.0 -7 -29 % -12 23

Total EBIT 40.0 167% 10.0 15.0 -33% -9 41

Total EBIT 32.0 113% 10.0 15.0 -33% -9 46

Total EBIT margin 2.3 % 0.7 % 1.0 %

PTP 13 n.a. -21.0 -12.0 -75 %

EPS 0.03 n.a. -0.04 -0.02 -86 %

Source : OP and Vara Research

Q3/2016e

Outokumpu

Finland/Basic Resources Analyser

BASIC RESOURCES

Outokumpu (Accumulate) Sale of 10% of share capital through ABB

Earnings turnaround progressing

The facts: Outokumpu’s results were more positive than expected with support

from the gradual recovery of the stainless steel market. Q3 sales were EUR

1,419m (OP: 1,432m/consensus: EUR 1,452m). Underlying EBIT improved by

EUR 98m to EUR 32m (EUR 10m/EUR 15m). The positive earnings performance

was supported by an increase in delivery volumes, higher average prices and

improved cost-efficiency in particular in the Americas. The delivery volumes were

608,000 tonnes (+6.6% vs. Q2/2015). The operating cash flow was EUR 61m.

Net debt reduced from the Q2 level by EUR 100m to EUR 1.4bn and gearing

reduced to 65.3%. The target is still to reduce the net debt level to EUR 1.2bn by

the end of 2017.

Our analysis: The underlying EBIT improved clearly both in Europe and the

Americas. In Europe, market demand was weaker due to the vacation season in

Europe. In contrast, Outokumpu’s delivery volumes in the Americas were record

high. The imports of cold rolled steel products to the EU and NAFTA area

increased in Q3. The maintenance break in ferrochrome production reduced the

earnings in Europe and related start-up difficulties will still be reflected on Q4 in

2016.

The guidance for Q4 results was below expectations. In terms of seasonality, the

volumes in the Americas clearly decline from the Q3 level and in Europe,

deliveries are estimated to be at the Q3 level. The underlying EBIT is expected to

be at the Q3 level (EUR 32m).

Conclusion & Action: The report did not result in any major revisions in

forecasts. In our Q4 forecast, the underlying EBIT is EUR 29m and as a whole,

the positive profit in 2016 would be EUR 59m, which is the first time since 2008.

Our underlying EBIT forecasts for 2017–2018 are upgraded by 2% and 1%. More

information on the market environment and strategy will be received at the

company’s CMD on 29 November 2016. In the short term, the share’s drivers are

related to the price performance of nickel and the improving earnings power in the

Americas. Our target price is still based on the EV/EBITDA 2017 level 7.5x, and

our target price consequently rises to EUR 6.50. We maintain our Accumulate

recommendation.

Analyst(s):

Jari Raisanen, OP Corporate Bank

[email protected]

+358 10 252 4504

Accumulate

6.22


6.50

6.20from Target Price: EUR


Target price: EUR

Share price: EUR

Reuters/Bloomberg OUT1V.HE/OUT1V FH



Free float 100%









Sales (m) 6,386 5,624 6,328

EBITDA (m) 531 293 521

EBITDA margin 8.3% 5.2% 8.2%

EBIT (m) 229 63 281

EBIT margin 3.6% 1.1% 4.4%

Net Profit (adj.)(m) 87 (50) 126

ROCE 4.0% 1.2% 5.5%

Net debt/(cash) (m) 1,732 1,477 1,258




EV/Sales 0.4 0.7 0.6

EV/EBITDA 5.4 13.9 7.4

EV/EBITDA (adj.) 5.4 13.9 7.4

EV/EBIT 12.5 64.5 13.7

P/E (adj.) 13.0 nm 20.6

P/BV 0.5 1.1 1.1

OpFCF yield 43.3% 7.0% 14.1%


EPS (adj.) 0.21 (0.12) 0.30

BVPS 5.61 5.49 5.76

DPS 0.00 0.00 0.00

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0


vvdsvdvsdy

OUTOKUMPU OMXH25 (Rebased)Source: Factset

Shareholders: Solidium Oy 31%; Keskinäinen

työeläkevakuutusyhtiö Varma 8%;

Kansaneläkelaitos 5%;

of 59


Nexans

France/Electronic & Electrical Equipment Analyser

ELECTRONIC & ELECTRICAL EQUIPMENT

Nexans (Accumulate) Earnings turnaround progressing

Less favourable activity in Q3

The facts: The momentum for activity deteriorated in Q3 (-3.3% and -0.9% over

9M vs +0.2% in H1), dragged down by a decline in Oil & Gas activities (-39% over

the quarter). For the 2016 FY, Nexans has stated that it is expecting flat organic

growth but a significant improvement in the EBIT margin. We expect EUR241m

vs EUR195m at end-2015.

Our analysis: In addition to difficulties on the oil markets, demand on the

construction market, mainly in Europe and North America, (building cables, -5.7%

in Q3) and that of low and medium voltage cables (cables for utilities, -7.4%

especially in Europe -12.1%) slowed down the last quarter. However, the sharp

rise in revenues in land high voltage has been confirmed (organic growth ~50% in

Q3 after +17% in Q2). In submarine high voltage, while the order book came out

at a historical high, the unfavourable timing of some projects as well as the

slowdown in umbilical sales weighed on the quarter (revenues fell by -16.7%).

Conclusion & Action: Excluding the Oil & Gas business, activity still posted

growth of +1.1% over 9M. Given a still difficult environment, Nexans has indicated

a 2016 revenue momentum likely to fall vs 2015. However, the stronger order

book ensures sustained growth for project activities in 2017 and Nexans has

confirmed a significant increase in its EBIT margin, the main point of interest in

the event of investing in the stock.

Analyst(s):

Ari Agopyan, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 63

Accumulate

49.62


47.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg NEXS.PA/NEX FP



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Sales (m) 4,604 4,439 4,529

EBITDA (m) 72 292 366


EBIT (m) (66) 159 230

EBIT margin nm 3.6% 5.1%

Net Profit (adj.)(m) (64) 141 162

ROCE 5.2% 8.9% 10.6%





EV/Sales 0.5 0.6 0.6

EV/EBITDA 29.2 9.5 7.3

EV/EBITDA (adj.) 7.5 7.3 6.3

EV/EBIT nm 17.4 11.6

P/E (adj.) nm 15.0 13.0

P/BV 1.2 1.7 1.6

OpFCF yield 28.6% 1.8% 5.7%


EPS (adj.) (1.50) 3.31 3.82

BVPS 27.58 28.87 31.05

DPS 0.02 0.35 0.91

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NEXANS SBF 120 (Rebased)Source: Factset

Shareholders: Madeco 28%; French State Sovereign

Fund (FSI) 8%; Employees 4%;

of 59


Azimut

Italy/Financial Services Analyser

FINANCIAL SERVICES

Azimut (Accumulate) Less favourable activity in Q3

New little acquisition in Australia

The facts: Yesterday, during market hours, Azimut announced that AZ Next

Generation Advisory (AZ NGA), Azimut’s Australian subsidiary, acquired the

company On-Track Financial Solutions.

Our analysis: more in detail, AZ Next Generation Advisory signed a binding sale

and purchase agreement to acquire the entire capital of On-Track Financial

Solutions Pty Ltd. The agreement includes a share swap of 49% of On-Track’s

equity for AZ NGA shares and a progressive buy back of these shares over the

next ten years. The remaining 51% stake will be paid to the founding partner in

cash over a period of two years. On-Track is responsible for approximately AUD

170m of funds and comprises a team of 9, including 3 financial planners. The

company offers a full suite of advisory services to clients in Australia including

wealth accumulation, retirement planning, insurance, and strategic financial

planning advice. The total value of the transaction, considering both the cash and

share swap, entails a purchase price of around AUD 5.8m (around EUR 4.1m),

corresponding to c. 2.3% of assets acquired. The closing of the transaction is

expected in November 2016.

Conclusion & Action: this is positive news, although negligible. In this way,

Azimut is continuing its strategy to consolidate high quality Australian companies,

providing wealth management services to retail, HNW and institutional clients in

Australia. This new deal also represents another step to improve Azimut’s

geographical diversification, which is the best among its Italian peers. AZ Next

Generation, after this last acquisition, achieved c. EUR 2.7bn in total AuM. Azimut

is focused on developing its presence in high growth markets abroad, which

represent around.15% of Azimut’s total assets in 1H16.

Analyst(s):


[email protected]

+39 02 4344 4022

Accumulate

14.16


18.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg AZMT.MI/AZM IM



Free float 87%









Total Revenue (m) 415 298 311

Pre-Provision Profit (PPP) (m) 278 161 173

Operating profit (OP) 278 161 173

Earnings Before Tax (m) 278 161 173

Net Profit (adj.) (m) 197 113 121

Shareholders Equity (m) 717 657 709

Tangible BV (m) 388 329 380

RWA (m) 0 0 0

ROTE 29.1% 16.5% 17.8%


Cost/Income 33.0% 45.9% 44.5%

P/PPP 11.0 11.6 10.9

P/E (adj.) 15.5 16.6 15.5

P/BV 4.3 2.9 2.6

P/TBV 7.9 5.7 4.9


PPPPS 2.10 1.22 1.30

EPS (adj.) 1.48 0.86 0.92

BVPS 5.41 4.96 5.35

TBVPS 2.93 2.48 2.87

DPS 1.50 0.73 0.79

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AZIMUT FTSE MIB (Rebased)Source: Factset

Shareholders: Timone Fiduciaria 13%;

of 59


CapMan

Finland/Financial Services Analyser

FINANCIAL SERVICES

CapMan (Neutral) New little acquisition in Australia

Norvestia merger strengthens the profile

The facts: CapMan's earnings continued on a strong uptrend in Q3 as the very

good value performance of investments continued. EBIT was, however, weaker

than in Q1 and Q2 with commission income falling clearly from the level of the

previous quarters, which can be only partly explained by the timing of carried

interest income. Operating expenses also declined slightly in line with our

forecasts. The full-year outlook was kept unchanged.

Our analysis: CapMan also announced yesterday that it would offer to acquire

the rest of the shares of the investment company Norvestia (71.3%). The

company offers the other shareholders of Norvestia as consideration six (6) new

CapMan shares for each Norvestia share after the payment of the EUR 3.35 extra

dividend proposed by Norvestia's BoD, which corresponds to a premium of 21%

to the price on the day preceding the offer. Relative to the Norvestia share's net

asset value of EUR 11.09 at the end of September, adjusted for the planned extra

dividend, the premium is 4%. We find the merger plan sensible as it will grow

CapMan's asset under management, increase the agility of investment operations

and enable significant cost synergies. All these combined will strengthen the

growth platform and dividend outlook. We find it likely that the offer will be

accepted because the majority of the shareholders with voting power have

expressed their support to the transaction, as has the BoD. We also find the offer

consideration good.

The valuations of financial sector shares offering a high dividend yield have

recovered during the autumn, which has also shown in CapMan's valuation. The

markets' increasing yield-hunting stance cannot be expected to change in an

environment of negative interest rates, which will support the present valuations

and possibly even a further rise in valuations. The yield-hunting stance also

underpins the growth outlook for the private equity investment business. On our

dividend projection of 7.5 cents, CapMan's dividend yield next spring would be

good at 5.9% on yesterday's closing price.

Conclusion & Action: We maintain our Neutral recommendation and raise our

target price to EUR 1.30 (from EUR 1.10) as the Q3 results and the planned

Norvestia merger reinforce the big picture.

Analyst(s):

Niclas Catani, OP Corporate Bank

[email protected]

+358 10 252 8780

Neutral

1.28


1.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg CPMBV.HE/CPMBV FH



Free float 76%









Sales (m) 32 31 32

EBITDA (m) 10 12 20

EBITDA margin 30.1% 38.1% 62.5%

EBIT (m) 9 11 20

EBIT margin 29.1% 37.3% 61.7%


ROCE 67.3% 46.7% 58.1%





EV/Sales 4.2 5.0 7.8

EV/EBITDA 14.0 13.0 12.5

EV/EBITDA (adj.) 14.0 13.0 12.5

EV/EBIT 14.5 13.3 12.6

P/E (adj.) 17.7 16.9 15.4

P/BV 1.3 1.7 1.4

OpFCF yield 5.2% 7.0% 7.1%


EPS (adj.) 0.06 0.08 0.08

BVPS 0.76 0.77 0.91

DPS 0.07 0.08 0.08

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CAPMAN OMXH (Rebased)Source: Factset

Shareholders: Ilmarinen Mutual Pension Insurance Co

8%; OY Inventiainvest AB 8%; Winsome

Oy + Tuomo Raasio 4%;

of 59


Coca Cola HBC AG

Greece/Food & Beverage Analyser

FOOD & BEVERAGE

Coca Cola HBC AG (Neutral) Norvestia merger strengthens the profile

3Q16 conference call highlights

The facts: In CCH 3Q16 cc management highlighted it is satisfied with the

quarterly performance, while volume growth was mainly weighed by the tough

comparatives in the prior year quarter. The adverse currency movements and

volume declines in the established and developing markets weighed negatively

leading to revenue declines, with the developing markets also burdened by

unfavourable channel mix. However, the top line benefited from favourable

package and category mix in the established markets and improved package and

category mix in the developing and emerging markets, with further support from

pricing actions mainly in Russia and Nigeria, which mitigated the negative

revenue performance in emerging markets. CCH announced 3Q16 sales volume

of 571.6m unit cases (-1% YoY), with established down 2.5% YoY, developing

down 4.2% YoY and emerging up 1.3% YoY, and net sales revenues of EUR

1,735m (-1.9% YoY), with established down 3.6% YoY, developing down 2.3%

YoY and emerging flat (-0.1% YoY). FX-neutral net sales revenue per case rose

3.8% YoY in the quarter, driven by +8.1% YoY in emerging markets and +3.5%

YoY in developing markets, while established markets -0.3% YoY, with the

adverse currency impact calculated at 4.5%.

Our Analysis: Regarding FY16 management reiterated it expects improvement in

FX neutral revenue/case and EBIT margin expansion, with FX-neutral input costs

/case marginally up. In the last quarter, Q4:16, management highlighted we

should expect volume leverage to improve with the addition of 1 selling day. On

the currency front, management noted that an improvement in the Russian ruble

is expected slightly better than the decline in the Nigerian naira embedded rate,

leading to an expectation for negative currency impact of EUR 110m in FY16,

down from EUR 115m expected previously. On Nigeria performance management

noted it remains positive, stressing that it expects that volume will be affected

mainly in FY17, noting it is taking gradual pricing actions, which could need even

2 years to reach inflation levels, on top of optimization initiatives. Regarding

Russia, the market is expected to turnaround in FY17, with CCH reiterating it

expects overall FY16 performance to improve compared to FY15.

Conclusion & Action: We see minor changes in our FY16 forecasts, mainly fine-

tuning to the improved category and package mix and currency impact, on the

back of slightly lower than we had expected volume performance. We reiterate

our Neutral rating.

Analyst(s):

Natalia Svyrou-Svyriadi, Investment Bank of Greece

[email protected]

+30 210 81 73 384

Neutral

19.94


18.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg EEEr.AT/EEE GA



Free float 54%









Sales (m) 6,346 6,293 6,451

EBITDA (m) 766 815 899

EBITDA margin 12.1% 13.0% 13.9%

EBIT (m) 418 459 533

EBIT margin 6.6% 7.3% 8.3%


ROCE 8.8% 9.8% 11.0%

Net debt/(cash) (m) 1,217 975 755




EV/Sales 1.3 1.3 1.2

EV/EBITDA 10.9 10.1 8.9

EV/EBITDA (adj.) 10.4 9.7 8.7

EV/EBIT 20.1 17.9 15.0

P/E (adj.) 23.2 20.8 18.4

P/BV 2.6 2.5 2.3

OpFCF yield 4.9% 5.7% 5.0%


EPS (adj.) 0.85 0.96 1.08

BVPS 7.67 8.12 8.71

DPS 0.40 0.43 0.49

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COCA COLA HBC AG Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Kar Tess Holdings SA 23%; The Coca

Cola Co. 23%;

of 59


KWS Saat

Germany/Food & Beverage Analyser

FOOD & BEVERAGE

KWS Saat (Buy) 3Q16 conference call highlights

KWS Saat: For 160 years in business and still thriving

We initiate coverage on the KWS share with a “Buy” recommendation. Based

on a DCF valuation, we calculate a target price of 346 EUR, resulting in an

upside of 17%. The valuation upside is however held back by KWS’ high

capital needs as prerequisite for growth.

We think that the KWS share offers attractive exposure to well-known, long-

term growth trends: Demand for food is steadily increasing because of

population growth and changing diet patterns in the Emerging Markets. At the

same time, resources are constrained. Farmland cannot be expanded a lot

further or will even shrink as a consequence of urbanization. As a result,

productivity of the agricultural industry needs to go up to keep markets in

balance, with seeds offering better long-time productivity potential than other

production factors (crop protection, fertilizers, equipment), especially for

sophisticated markets.

Despite these beneficial long-term growth trends, crop prices are trading close

to a cyclical low, following numerous years in a row with favourable global

weather conditions and harvests, good productivity progress on the side of

farmers and resulting high stock levels. Although we certainly don’t know the

exact point in time, we believe the probability of crop prices experiencing some

mean-reversion in the mid-term is rather good. This also puts current

valuations multiples in perspective, which at first glance appear not super

cheap at the moment.

Whatever the direction of crop prices will be, we believe that KWS will deliver

sound growth rates coupled with margin stability in the near-term future as a

result of the expansion strategy in corn, sound pricing power in sugar beet and

the disappearing of one-offs that burdened last year’s result. In this context, we

find it reassuring that the CEO of KWS exhibited his confidence by investing

the maximum share of his variable compensation into KWS shares in 2015.

We believe the overall risk level attached to the KWS share is relatively low:

Barriers to entry are high, the correlation of crop prices with general economic

cycles and the stock market is low, the customer base is fragmented and

served by a subscription-like business model. Moreover, the current race for

consolidation in the industry (Bayer - Monsanto, Syngenta - ChemChina, Dow -

Dupont) effectively constitutes a put option for the current majority

shareholders, limiting to some extend the downside of the KWS share.

Our target price of 346 EUR is based on 3% long-term growth, 6.3% WACC

and a long-term EBIT margin of 11.5% percent (compared to 11-14% in the

last five years). More upside is held back by KWS’ above average capital

requirements for growth, as KWS plans to deploy capex budgets of c. 100m

annually in the next couple of years, the R&D intensity as % of sales will

remain at 17-18% and net working capital is as high as 40% of sales, resulting

in an inferior cash flow profile compared to larger competitors.

Analyst(s):

Dr. Knud Hinkel, CFA, equinet Bank

[email protected]

+ 49 69 58997 419

Buy

294.00


346.00

from

Target price: EUR

Share price: EUR

Reuters/Bloomberg KWSG.DE/KWS GY



Free float 29%









Sales (m) 1,037 1,075 1,152

EBITDA (m) 161 178 194

EBITDA margin 15.5% 16.5% 16.9%

EBIT (m) 113 125 136

EBIT margin 10.9% 11.6% 11.8%


ROCE 8.9% 9.2% 9.3%





EV/Sales 2.2 2.0 1.9

EV/EBITDA 13.9 12.4 11.2

EV/EBITDA (adj.) 13.9 12.4 11.2

EV/EBIT 19.9 17.6 16.1

P/E (adj.) 23.0 19.9 17.4

P/BV 2.6 2.3 2.1

OpFCF yield 1.6% 1.8% 2.0%


EPS (adj.) 12.92 14.80 16.91

BVPS 115.99 127.79 141.37

DPS 3.00 3.00 3.33

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KWS SAAT CDAX (Rebased)Source: Factset

Shareholders: GIESECKE BUECHTING FAMILY 31%;

OETKER AREND FAMILY 25%;

TESSNER HANS JOACHIM 15%;

of 59


Sonae

Portugal/Food & Drug Retailers Analyser


Sonae (Buy) KWS Saat: For 160 years in business and still thriving Buy

0.71


1.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg YSO.LS/SON PL



Free float 34%









Sales (m) 5,014 5,365 5,667

EBITDA (m) 334 327 373


EBIT (m) 148 157 135

EBIT margin 2.9% 2.9% 2.4%


ROCE 6.0% 6.2% 5.4%

Net debt/(cash) (m) 1,304 960 856




EV/Sales 0.4 0.2 0.2

EV/EBITDA 6.2 3.9 3.1

EV/EBITDA (adj.) 6.2 3.9 3.1

EV/EBIT 14.1 8.1 8.7

P/E (adj.) 12.0 8.9 10.2

P/BV 1.3 0.8 0.8

OpFCF yield -0.2% 9.0% 12.9%


EPS (adj.) 0.09 0.08 0.07

BVPS 0.83 0.91 0.94

DPS 0.08 0.00 0.04

9M16 results preview – sales pick up expected

The facts: Sonae is scheduled to report its 9M16 results on November 9, after

market close. The company will host an analyst conference call on the following

day.

Our analysis: Our estimates point to Sonae having reached EUR 3,820m in

sales during the 9M16, managing to record a 5% yoy gain. This positive evolution

should be mostly attributed to Sonae MC’s sales area expansion during the last

12 months, even though we are expecting like-for-like sales to have been positive

during the 3Q16, given the overall market’s positive performance. Sonae SR’s

sales growth should have also contributed positively to Sonae’s higher expected

sales helped by the impact of Losan and Salsa’s purchases (this was the first

quarter of Salsa’s consolidation). Sonae RP’s 25% lower sales estimate is due to

the reduction in the company’s freehold. EBITDA’s 10% yoy expected decrease

should be mostly attributed to Sonae RP’s evolution too, even though we are also

expecting a c. 50 bps yoy reduction in Sonae MC’s EBITDA margin due to the

continuation of the aggressive promotional policy that has been in place since

early 2015. Net Profit is expected to be down 20% yoy on lower indirect results

(resulting from the slower appreciation pace of Sonae Sierra’s properties’ value

appraisal), even though we are expecting direct results to have fairly appreciated.

Conclusion & Action. The quarterly figures should show some organic top-line

growth, in line with the appreciation we have been witnessing in local Food,

Beverages and Tobacco sales index. Nonetheless, EBITDA margins should

remain pressured both in Food and in Specialized retail units (where historical

comparability was hurt due to the effect of Losan and Salsa purchases – for

which no historical operational data was made available).

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SONAE Geral (Rebased)Source: Factset Shareholders: Efanor 53%; BPI 9%; Fund. Berardo 2%;

Invesco 1.97%; Treas. Shares -0.17%;

Analyst(s):


[email protected]

+351 22 607 09 31

Consolidated P&L (EURm) 9M15 9M16e % Chg.

Sales and Services (adj.) 3,639 3,820 5%

Sonae MC (Food Retail) 2,549 2,678 5.1%

Sonae SR (Specialized Retail) 917 966 5.3%

Sonae RP (Retail Properties) 92 69 -24.8%

IM (Investment Management) 187 190 1.7%

Others & Adj -107 -84 22%

Underlying EBITDA (adj.) 226 203 -10%

Sonae MC (Food Retail) 152 147 -3%

Sonae MC's Margin 6.0% 5.5%

Sonae SR (Specialized Retail) -9 -1 84%

Sonae SR's Margin -1.0% -0.1%

Sonae RP (Retail Properties) 83 61 -26%

IM (Investment Management) 9 9 -7%

Others & Adj -10 -12 -26%

Underlying EBITDA margin 6.2% 5.3%

Non-recurrent EBITDA 35 55 59%

EBIT 119 116 -3%

Associates (Direct results) 38 36 -6%

Financial Income -52 -40 -23%

Taxes -4 -7 89%

Direct Net Income 102 105 3%

Total Minorities -3 -2 53%

Indirect results 44 11 -75%

Total Net Income after Minorities 142 114 -20%Eps 0.071 0.057

Source: Company data and Caix aBI Equity Research

of 59


Sonae

Portugal/Food & Drug Retailers Analyser


Sonae (Buy) 9M16 results preview – sales pick up expected

Sonae Sierra’s 9M16 results – higher indirect results

The facts: Sonae disclosed Sonae Sierra’s 9M16 results on November 3, after

market close

Our analysis: Sonae Sierra (50% owned by Sonae and equity consolidated)

reported a EUR 92.6m Net Profit for the period, which compares with the

EUR 94.8m Net Profit recorded in 9M15. EBIT was 8% lower than during the

previous year but, while Direct Income decreased 5% relative to 9M15 (EUR

40.2m). Indirect Results went marginally down from EUR 70.5m in 9M15 to EUR

69.4m in 9M16 as a result of yields compression in Europe, of the value creation

related to the opening of ParkLake and of some gains generated by recent

disposals. Inrev NAV amounted to EUR 1,286.3m (up from EUR 1,179.8m by

year end 2015).

Conclusion & Action: Sonae Sierra’s 9M16 results present stable operational

figures accompanied by the generation of profits resulting from successful

property management. Notwithstanding, we see no potential impact from this

announcement on Sonae’s stock price.

Analyst(s):


[email protected]

+351 22 607 09 31

Buy

0.71


1.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg YSO.LS/SON PL



Free float 34%









Sales (m) 5,014 5,365 5,667

EBITDA (m) 334 327 373


EBIT (m) 148 157 135

EBIT margin 2.9% 2.9% 2.4%


ROCE 6.0% 6.2% 5.4%

Net debt/(cash) (m) 1,304 960 856




EV/Sales 0.4 0.2 0.2

EV/EBITDA 6.2 3.9 3.1

EV/EBITDA (adj.) 6.2 3.9 3.1

EV/EBIT 14.1 8.1 8.7

P/E (adj.) 12.0 8.9 10.2

P/BV 1.3 0.8 0.8

OpFCF yield -0.2% 9.0% 12.9%


EPS (adj.) 0.09 0.08 0.07

BVPS 0.83 0.91 0.94

DPS 0.08 0.00 0.04

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SONAE Geral (Rebased)Source: Factset

Shareholders: Efanor 53%; BPI 9%; Fund. Berardo 2%;

Invesco 1.97%; Treas. Shares -0.17%;

of 59


Finnish Industrial Engineering

Analyser


Sonae Sierra’s 9M16 results – higher indirect results

Global ship market – decline stabilising

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The number of global ship orders is stabilising to a very low level, about 30

ships per month. In October, 30 ships were ordered (111 ships in 10/2015),

and 359 ships were ordered between January and October (1,352 ships in

2015). In terms of segments, the situation has remained unchanged, and there

are few orders across the board – the only exception is still cruise ships the

orders of which are on a good level. The higher oil price does not pick up

offshore orders. A total of 675 offshore vessels are under construction in

shipyards, and capacity will increase further. The orders for gas carriers are still

extremely low, and only 14 carriers were ordered in 1–10/2016 (88 in 2015).

Container traffic continues to increase slightly, but it is not justified to expect a

pick-up in the orders for container ships, as overcapacity reduces cargo levels

and the challenges of shipping companies have increased.

Cargotec’s (Accumulate) MacGregor is aiming to achieve additional savings of

EUR 25m as its profitability continues to decline and sales will still drop

considerably in 2017. MacGregor’s forecasts were notably downgraded after

the Q3 report although the effect on Cargotec as a whole will be moderate.

Hiab's margin is excellent, and Kalmar’s profitability is stable. Cargotec’s

valuation is clearly below the sector's multiples as a result of which the share is

attractive.

The orders for Wärtsilä’s (Neutral) Marine Solutions segment and sales in 2017

will decline even though cruise ships orders facilitate the situation in the long

term. Wärtsilä as a whole is stable as a result of service activity and good

power plant activities. In our opinion, Wärtsilä’s long-term prospects are

attractive. The increasing role of services will improve profitability, and an

expanding product portfolio will help equipment operations benefit from growth

opportunities.

---------- Stoxx Industrial Engineering,

DJ Stoxx TMI rebased on sector

Analyst(s): Pekka Spolander, OP Corporate Bank

[email protected] +358 10 252 4351

New ship orders

Total Tankers Bulkcarriers Container Offshore LNG+LPG Cruise

1-10/2015 1352 372 294 205 142 88 9

1-10/2016 359 59 38 63 35 14 29

Change -73% -84% -87% -69% -75% -84% 222%

Source: Clarkson, OP, 3 November 2016

Total new ship orders, number

Source: Clarkson, 3/11/2016

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of 59


Duro Felguera

Spain/Industrial Engineering Analyser


Duro Felguera (Neutral) Global ship market – decline stabilising

3Q’16 results

The facts: Duro Felguera presented 3Q’16 results yesterday.

Our analysis: Results slightly below forecasts:

Net debt reached EUR253m, in line with our full year forecasts. In 1H’16 the rise

in net debt came from the execution of guarantees on the Roy Hill project valued

at EUR88m and overhead costs in the Vuelta de Obligado plant in Argentina. In

3Q’16, net debt increased EUR18m more. We do not expect net debt to differ

much from current levels and the worst case scenario remains at EUR275m.

Duro Felguera has begun to take the steps to improve liquidity while the legal

disputes remain. The Company has put non-productive assets for sale, such as a

building in Madrid. On the other hand, Duro Felguera no longer rules out the sale

of treasury stock, which at current prices would bring in EUR18m cash. Regarding

Venezuela, maturities (equal to sovereign debt) pending payment amount to

EUR101m in 1H’16. This debt with Venezuela could also be monetised, assuming

a discount. Duro Felguera continues to negotiate with financial entities to extend

the maturity of EUR75m in 2017. In the worst case, a capital increase cannot be

ruled out, if in the hypothetical case for example, Venezuela enters default of if

Duro Felguera is asked for guarantees to refinance debt.

9m’16 order intake EUR321m to which another EUR172m would have to be

added from the JV on the CCGT plant in Romania. There are various projects for

EUR100m to be signed soon and others that could take a little longer such as

Panama (>EUR500m) possibly activated in 6 months’ time, or the first project of

two CCGT plants in Brazil (EUR700m in backlog) that will not begin until 2H’17.

The company will not renounce to new opportunities in Argentina despite the

problems with Vuelta de Obligado. The Company has taken note of the mistakes

in the mentioned project and confides in the changes underway in the country

with the new government, which should allow better negotiations in price clauses.

Backlog at 9m’16 amounts to EUR2,104m, 3.3% below 2015. The pipeline of

offers presented and being elaborated comes to EUR12,581m, of which 62% is in

energy, 14% mining and handling, and 13% services.

Conclusion: Duro Felguera continues to be greatly affected by the cash trapped

in the projects in Argentina and Australia, and is trying not to further erode

liquidity levels. In 2017 we expect net debt to improve due to the arbitrage in

Argentina, although Roy Hill will take longer. The focus is on net debt and the

performance in contracts.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Neutral

1.11


1.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg MDF.MC/MDF SM



Free float 40%









Sales (m) 771 644 748

EBITDA (m) (96) 38 49

EBITDA margin nm 6.0% 6.5%

EBIT (m) (115) 32 42


Net Profit (adj.)(m) (69) 8 20

ROCE -28.8% 4.9% 7.4%



Debt/EBITDA -0.8 6.6 3.5


EV/Sales 0.4 0.7 0.5

EV/EBITDA nm 11.5 7.4

EV/EBITDA (adj.) nm 11.5 7.4

EV/EBIT nm 14.0 8.7

P/E (adj.) nm 23.4 8.7

P/BV 1.6 1.3 1.1

OpFCF yield -76.3% -98.0% 45.1%


EPS (adj.) (0.43) 0.05 0.13

BVPS 0.84 0.87 1.00

DPS 0.02 0.00 0.00

DURO FELGUERA: 9M16 RESULTS

9M15 %sles 9M16 %sles % y/y 1Q16 2Q16 3Q16

Sales 578.9 100% 480.9 100% -17% 192 142 147

EBITDA 18.4 3.2% 22.2 4.6% 21% 10 6 6

Depreciation -18.6 -3.2% -4.9 -1.0%

EBIT -0.3 0.0% 17.3 3.6% n.s. 7 5 5

Financial Results 8.1 1.4% -15.2 -3.2%

EBT 8.4 1.5% 2.2 0.5% -74% 3 -2 1

Net Profit 6.7 1.2% 1.6 0.3% -76% 2 -4 3

Source: Company data. GVC Gaesco Beka estimates

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6


vvdsvdvsdy

DURO FELGUERA Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Invs Somió 24%; Invs Río Magdalena

10%; Onchena SL 5%;

of 59


Technotrans

Germany/Industrial Engineering Analyser


Technotrans (Accumulate) 3Q’16 results

Sale of treasury stock – no material impact

The facts: Late yesterday evening, Technotrans has announced successful

private placement of treasury shares (supported by Bankhaus Lampe),

representing around 5.4% of its share capital and increasing group’s free float to

~6.9m from 6.5m.

Our analysis: According to the PR the shares have been sold to long-term

investors in Germany and other European countries with total gross proceeds of

around EUR8.2m. The money will be primarily used for general corporate

purposes as well as to offset funds used for the recently acquired gwk, which was

to 1/3 financed with group’s own funds (around EUR5.2m).

Conclusion & Action: Overall, we see no material impact from the transaction

apart from restoring group’s cash position and a bit higher liquidity of its shares.

We stick to our PT EUR24 and Accumulate recommendation.

Analyst(s):

Victoria Kruchevska (CFA,FRM), equinet Bank

[email protected]

+49 69 5 89 97 416

Accumulate

22.23


24.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TTRGn.DE/TTR1 GR



Free float 81%









Sales (m) 123 147 188

EBITDA (m) 12 14 16


EBIT (m) 9 11 13

EBIT margin 7.3% 7.2% 6.8%


ROCE 13.6% 15.6% 18.1%

Net debt/(cash) (m) (13) (17) (22)


Debt/EBITDA -1.0 -1.2 -1.4


EV/Sales 0.9 0.9 0.7

EV/EBITDA 9.3 9.5 7.9

EV/EBITDA (adj.) 9.3 9.5 7.9

EV/EBIT 12.7 12.1 9.7

P/E (adj.) 20.3 19.6 16.1

P/BV 2.5 2.6 2.3

OpFCF yield 6.6% 4.3% 4.9%


EPS (adj.) 0.95 1.14 1.38

BVPS 7.83 8.59 9.64

DPS 0.33 0.57 0.69

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vvdsvdvsdy

TECHNOTRANS CDAX (Rebased)Source: Factset

Shareholders: Objectif Small Cap 6%; Treasury stock

5%; Midlin NV 4%;

of 59


AXA

France/Insurance Analyser

INSURANCE

AXA (Buy) Sale of treasury stock – no material impact

A more demanding climate for Savings activities

The facts: Axa has published its 9m-2016 activity indicators. Revenues came out

at EUR75.7bn (vs. consensus of EUR75.2bn), up +0.4% l-f-l.

Our analysis: In Life & Savings, revenues declined by 0.9% to EUR44.2bn (vs.

EUR43.7bn), mainly due to lower revenues in UL, that did offset growth in G/A

Savings and Protection & Health. APE totalled EUR4.8bn (vs. EUR4.7bn), posting

a limited decrease of 0.4%. The margin came out at 38% (vs. 37%), down by 0.4

points due to a smaller margin in China. NPV thus declined 1% to EUR1.8bn (vs.

EUR1.7bn). In P&C, revenues rose +3% to EUR25.4bn (vs. EUR25.3bn), mainly

due to the 3% increase in prices. Note still growth in revenues in Direct (+6% to

EUR2.2bn) and countries with rapid growth (+10% to EUR3.9bn, notably Turkey).

Lastly, in Asset Management, revenues totalled EUR2.9bn (vs. EUR2.7bn),

tumbling by 6% despite net inflows of EUR18bn (of which +EUR30bn for Axa IM

and -EUR12bn for AB due to the loss of two mandates). AuM fell by 2% to

EUR1,052bn (vs. EUR1,103bn). The economic solvency ratio came out at 191%

(-6pts vs. 30.06.2016, mainly due to the markets and the impact from the change

in the EIOPA reference portfolio used in the volatility adjuster calculation).

Conclusion & Action: These indicators are above expectations, as the market

was expecting a tougher backdrop for Life activities and Asset Management. The

P&C business remains buoyant, even if it is driven more by prices than by

volumes.

Analyst(s):

Pierre Chedeville, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 97

Buy

19.98


22.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg AXAF.PA/CS FP



Free float 72%









Life Gross premiums (m) 59,212 59,839 60,805

Non-Life Gross prem.(m) 35,290 35,415 36,341

Total Net Revenues (m) 99,093 99,926 101,973

Life Ins.Tech.Result (m) 609 731 804

Non-Life Ins. Tech.Result 1,175 896 1,075

EBIT (m) 7,879 6,950 7,578

Net Profit (adj.) (m) 5,691 5,585 5,302


ANAV (m) 26,185 27,232 28,322

ROE (adj.) (%) 13.1 11.3 11.5

Combined ratio (%) 96.2 97.1 96.6

Solvency Ratio 0.0% 0.0% 0.0%

P/E (adj.) 10.8 9.1 8.4

P/BV 0.8 0.6 0.6

P/ANAV 1.2 0.9 0.9

P/EbV 1.2 0.9 0.8


EPS (adj.) 2.34 2.19 2.38

BVPS 29.76 31.02 32.16

ANAVPS 20.46 21.72 22.86

EbVPS 21.00 22.33 23.95

DPS 1.10 1.04 1.14

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vvdsvdvsdy

AXA CAC 40 (Rebased)Source: Factset

Shareholders: Mutuelles Axa 15%; Employees 8%; BNP

Paribas 5%;

of 59


Banca Mediolanum

Italy/Insurance Analyser

INSURANCE

Banca Mediolanum (Accumulate) A more demanding climate for Savings activities

A part of Mr Berlusconi’s voting rights was suspended

The facts: Yesterday, according to Consob, a part of Mr Berlusconi’s voting rights

in Banca Mediolanum was suspended, due to ECB’s decision against Fininvest’s

ownership of a significant stake in the bank.

Our analysis: more in detail, Mr Berlusconi owns, through Fininvest, a stake

around 30,124% in Banca Mediolanum. Mr Berlusconi’s voting rights on 20.125%

of its stake were suspended. Berlusconi and Doris’ Families syndicated the 51%

(25.5% each), renewing for three years the pact in October 2016. The suspension

shouldn’t hurt the shareholders’ agreement on Banca Mediolanum shares and its

governance.

Conclusion & Action: this is neutral news. The overhang risk, due to ECB’s

position against Fininvest’s ownership of a significant stake in Banca

Mediolanum, is negligible in our view, because we believe the stake, will be

possibly placed through some private placements. We reiterate our stance on the

stock: Banca Mediolanum has one of the best business-model to face the

challenging context of the banking sector. Some positive surprises could arise

from the increase in the number of clients in the medium term, which are likely to

switch from AuA to the more profitable AuM. The strategic desire to play a key

role in the new mobile and internet banking sector could also make the difference

in the long run. 3Q16 results are going to be published on 8th

November.

Analyst(s):


[email protected]

+39 02 4344 4022

Accumulate

6.12


7.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg BMED.MI/BMED IM



Free float 30%









Life Gross premiums (m) 2,283 2,243 2,143

Non-Life Gross prem.(m) 0 0 0


EBIT (m) 561 384 397

Net Profit (adj.) (m) 470 311 321


ANAV (m) 1,876 1,855 1,852

ROE (adj.) (%) 25.5 16.0 16.5

Combined ratio (%) 0.0 0.0 0.0

Solvency Ratio 128.0% 119.2% 120.1%

P/E (adj.) 11.5 14.4 14.0

P/BV 2.6 2.2 2.2

P/ANAV 2.9 2.4 2.4

P/EbV 1.6 1.3 1.3


EPS (adj.) 0.64 0.42 0.44

BVPS 2.81 2.79 2.78

ANAVPS 2.55 2.52 2.52

EbVPS 4.65 4.69 4.76

DPS 0.30 0.28 0.28

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5


vvdsvdvsdy

BANCA MEDIOLANUM Stoxx Insurance (Rebased)Source: Factset

Shareholders: Doris family 40%; Fininvest 30%;

of 59


Sampo

EURm Q3a OP Diff. Cons. Diff. Low High

If premium income 1080 1,079 0% 1,083 0% 848 1,120

Net investment income 40 58 -30% 0 0 0

Combined ratio 84.6 % 84.3 % 0% 85.5 % -1% 82.6 % 86.2 %0%

If PTP 224 232 -3% 238 -6% 199 260

Life PTP 53 52 2% 49 8% 30 55

Nordea 182 182

PTP 450 472 -5% 464 -3% 404 481

Net Profit 396 414 -4% 404 -2% 361 424

EPS 0.71 0.74 -4% 0.72 -1% 0.64 0.76

NAVPS 21.81 21.88 0% 21.30 2% 18.80 21.90

Dividend 0.00 0% 0.00 0.00

Source: OP and Vara Research

Q3 2016e

Sampo

Finland/Insurance Analyser

INSURANCE

Sampo (Accumulate) A part of Mr Berlusconi’s voting rights was suspended

Additional support from Topdanmark to the dividend flow

The facts: Once again, Sampo’s results demonstrate that it is a steadily

progressing dividend machine that is gathering increasing interest by the recent

activation in the M&A sector. As we expected, Sampo also announced in the

report that it will propose a change of distribution policy to the next Topdanmark

AGM, whereby a dividend would be reinstated and the share buyback program

discontinued. On the basis of Sampo’s current ownership (41.1%), the change

should be carried out without problems and it will further support Sampo’s

dividend payment capacity as of 2018 by about EUR 60m/year. Sampo offers an

attractive dividend yield of 5.5% for 2016.

Our analysis: According to the guidance for 2016 that was revised in connection

with the Q3 report, If's combined ratio is now expected to be 86–88% excluding

NRIs (prev. 87–90%). Our forecast for the 2016 combined ratio excl. NRI is

86.4% (2015: 86.5% excl. NRI).

Sampo’s Q3 EBIT of EUR 450m was slightly below forecasts (OPe: EUR 472m;

consensus: EUR 464m). However, the explanation is that the company has

recognised investment income as revenue quite sparsely through the income

statement during the quarter. However, the solid NAV performance (total: EUR

21.81; OPe: EUR 21.88; consensus: EUR 21.30) indicates that the value of the

investment portfolio has increased favourably during the quarter.

From the operational perspective, the performance of the non-life insurance

business was extremely solid. If’s combined ratio was better than expected at

84.6%. Claims increased slightly compared to the exceptionally low level of the

comparison period, but operative efficiency continued to improve moderately. If’s

premiums were still under slight pressure (-0.4% YoY in local currency), but we

estimate that they will turn to a moderate growth in 2017 as Finland’s economic

situation is starting to pick up. Mandatum Life’s (ML) premiums are now

increasing after a long decline. Net releases of funds from reserves lend support

to the earnings by EUR 9m and as a result of extremely low discount rates we

expect that ML will continue to gradually release funds from reserves, which will

support its earnings power also in the future.

Conclusion & Action: We reiterate Sampo’s Accumulate recommendation and

EUR 44 target price after the operationally solid Q3 report.

Analyst(s):

Antti Saari, OP Corporate Bank

[email protected]

+358 10 252 4359

Accumulate

40.45


44.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg SAMPO.HE/SAMPO FH



Free float 88%









Life Gross premiums (m) 1,144 921 940

Non-Life Gross prem.(m) 4,378 4,298 4,358


Life Ins.Tech.Result (m) 169 199 205

Non-Life Ins. Tech.Result 862 900 844

EBIT (m) 1,888 1,782 1,750

Net Profit (adj.) (m) 1,656 1,564 1,540


ANAV (m) 13,323 12,770 13,053

ROE (adj.) (%) 12.7 12.0 11.9

Combined ratio (%) 85.3 84.6 86.1

Solvency Ratio 0.0% 0.0% 0.0%

P/E (adj.) 15.9 14.5 14.7

P/BV 2.0 1.8 1.7

P/ANAV 2.0 1.8 1.7

P/EbV 2.0 1.8 1.7


EPS (adj.) 2.96 2.79 2.75

BVPS 23.79 22.80 23.31

ANAVPS 23.79 22.80 23.31

EbVPS 23.79 22.80 23.31

DPS 2.15 2.25 2.35

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vvdsvdvsdy

SAMPO OMXH25 (Rebased)Source: Factset

Shareholders: Solidium Oy 12%; Mutual Pension

Insurance Company Varma 6%; Björn

Wahlroos 2%;

of 59


Ferrovial

Spain/Materials, Construction & Infrastructure Analyser


Ferrovial (Accumulate) Additional support from Topdanmark to the dividend flow

Best proposal for I-66

The facts: The consortium participated by Ferrovial has been named the

Preferred Proposer to design, build, finance, operate and maintain the I-66

concession in Virginia (US).

Our analysis: The contract amounts to EUR3bn and the concession is for 50

years, whereas the construction will take until 2022. Meridian is a partner in the

consortium and the construction will be undertaken by Ferrovial and the local

construction company Allan Myers. The project includes the construction of

35kms through the I-66 corridor between Route 29 (close to Gainesville and the

Washington belt) and the I-495, in Fairfax County. This new tranche will include

three toll-free lanes and two managed lines per direction. The finance should be

closed next summer.

Conclusion: Positive news for Ferrovial, again demonstrating its expertise in

managed lines and with good examples in the NTE and LBJ (12% EBITDA

9M16). Accumulate recommendation reiterated.

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Accumulate

17.03


22.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg FER.MC/FER SM



Free float 65%









Sales (m) 9,698 9,353 9,646

EBITDA (m) 1,024 980 973

EBITDA margin 10.6% 10.5% 10.1%

EBIT (m) 899 1,021 725

EBIT margin 9.3% 10.9% 7.5%


ROCE 8.0% 9.4% 6.5%

Net debt/(cash) (m) 4,542 4,574 4,746




EV/Sales 1.2 0.9 0.9

EV/EBITDA 11.4 9.0 9.2

EV/EBITDA (adj.) 11.4 9.0 9.2

EV/EBIT 13.0 8.7 12.3

P/E (adj.) 21.3 19.0 28.3

P/BV 2.5 2.0 2.1

OpFCF yield 3.3% 4.6% 5.7%


EPS (adj.) 0.98 0.90 0.60

BVPS 8.27 8.44 8.29

DPS 0.71 0.73 0.75

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vvdsvdvsdy

FERROVIAL Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Del Pino Family 36%;

of 59


LafargeHolcim

Switzerland/Materials, Construction & Infrastructure Analyser


LafargeHolcim (Buy) Best proposal for I-66

Q3 a bit better than expected

The facts: Comments ahead of the conference call today at 11 am Zurich time.

Lafarge has published a quarterly ‘adjusted’ EBITDA of CHF1,685m, up in

organic terms by 10%. The 2016 synergy target was raised from CHF450m to

CHF550m. The consensus had expected adjusted EBITDA of CHF1664m.

Our analysis: This morning Lafarge published Q3-2016 results that were largely

satisfactory despite the imposing challenges with which the company is grappling

in Nigeria and Brazil (see the note we published yesterday). Revenues, at

CHF7,036m, fell -10.1% but only -3.1% in organic terms. Recurring operating

EBITDA (before charges needed to unlock synergies) was CHF1,685m, up 10.5%

in organic terms but 15% stripping out the negative impact of Nigeria. Despite a

negative volume effect, the group was helped by favourable comps, and the end

of the price war last year had impacted profitability during the merger period. By

region, the good performance in North America was notable even though volumes

were less favourable in Q3, as were France/Europe operations.

Conclusion & Action: IV of CHF59 confirmed in a more propitious market

environment for companies with a footprint in emerging market countries.

Analyst(s):

Jean-Christophe Lefèvre-Moulenq, CM - CIC Market Solutions [email protected]

+33 1 53 48 80 65

Buy

50.75


59.30



Target price: CHF

Share price: CHF

Reuters/Bloomberg LHN.VX/LHN VX

Market capitalisation (CHFm) 30,801


Free float 71%



Price high 12 mth (CHF) 57.70

Price low 12 mth (CHF) 34.06




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

Sales (m) 29,483 27,959 26,888

EBITDA (m) 4,645 5,307 5,583

EBITDA margin 15.8% 19.0% 20.8%

EBIT (m) (346) 2,707 3,339


Net Profit (adj.)(m) 788 1,355 1,869

ROCE 0.9% 4.0% 4.7%

Net debt/(cash) (m) 17,398 14,893 12,510




EV/Sales 1.7 1.8 1.7

EV/EBITDA 11.0 9.3 8.4

EV/EBITDA (adj.) 8.9 8.6 8.1

EV/EBIT nm 18.2 14.0

P/E (adj.) 38.7 22.7 16.5

P/BV 1.0 1.0 1.0

OpFCF yield -0.2% 4.8% 8.5%


EPS (adj.) 1.30 2.23 3.08

BVPS 51.68 51.75 52.46

DPS 1.50 1.50 1.70

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vvdsvdvsdy

LAFARGEHOLCIM Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: SCIG (Dr. Thomas Schmidheiny) 11%;

Groupe Bruxelles-Lambert 9%; NNS

Jersey (Sawiris) 5%; BlackRock 3%;

of 59


SRV

Finland/Materials, Construction & Infrastructure Analyser


SRV (Buy) Q3 a bit better than expected

On a strong earnings growth path

The facts: Although SRV's sales missed our forecasts in Q3, EBIT was just

barely above our forecast. However, the earnings overshoot came from the FX

impact as the RUB appreciated. Sales of Operations in Finland fell short of our

forecast because only 26 units were recognised in consumer apartments. Thus

around 400 units should be recognised in Q4. The margin of Operations in

Finland rested on contracting and remained at a good level taking that into

account. There were few new contracts, but an improvement is on the cards for

Q4 (order book +24%).

Our analysis: Consumer housing starts are lagging behind last year for the first

nine months of the year, but the starts of the first residential tower Majakka in

Redi and a few other projects will patch up the situation in Q4. Of the 283

apartments in Majakka 230 have been reserved and 20 apartments reserved

preliminarily. The company is planning to build over 2,500 apartments close to the

Western Metro over the next few years. The margin content of contracting

continues to improve when residential sales to investors are performing well and,

for example, a new self-developed project Kauppakeskus Karuselli (EUR 50m)

will be launched soon in Kerava with a nearly full occupancy rate.

In Russia, temporary rental rebates in the Pearl Plaza shopping centre have

decreased as the year progresses and RUB-denominated sales have increased

20% in the first nine months. We estimate that the Okhta Mall and 4Daily to be

opened next spring will start to support the earnings of associated companies

during 2017.

We do not revise our forecasts based on the Q3 results. The Q4 results are set to

be strong, driven by residential building, and next year earnings growth will be

underpinned by residential building and the growing contracting order backlog as

well as its improved margin content. The earnings of associated companies will

turn positive, but capital gains will not be seen until towards the end of the

strategy period expending to 2020. The lower valuation relative to the sector will,

however, offer upside for the share.

Conclusion & Action: We are upgrading our target price to EUR 5.50 (from

EUR 4.80) and our recommendation to Buy (from Accumulate) after the earnings

improvement continued at a brisk pace in Q3. The target price upgrade is based

on shifting the target price horizon to the 2018 forecasts and our target price is

based on P/E valuation 11.5, which has been the typical level for a construction

company in the long term.

Analyst(s):

Matias Rautionmaa, OP Corporate Bank

[email protected]

+358 10 252 4408

Buy

4.33


5.50


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg SRV1V.HE/SRV1V FH



Free float 100%









Sales (m) 751 880 1,063

EBITDA (m) 28 39 54


EBIT (m) 24 36 50

EBIT margin 3.3% 4.1% 4.7%


ROCE 7.1% 8.8% 10.8%

Net debt/(cash) (m) 231 268 289




EV/Sales 0.6 0.7 0.6

EV/EBITDA 16.6 14.6 11.1

EV/EBITDA (adj.) 16.6 14.6 11.1

EV/EBIT 19.0 16.0 11.9

P/E (adj.) 13.4 17.6 9.2

P/BV 0.7 0.9 0.8

OpFCF yield 23.9% -14.3% -4.3%


EPS (adj.) 0.23 0.25 0.47

BVPS 4.58 4.83 5.13

DPS 0.10 0.10 0.11

2.0

2.5

3.0

3.5

4.0

4.5

5.0


vvdsvdvsdy

SRV OMXH (Rebased)Source: Factset

Shareholders: Kokkila Ilpo 22%; Kolpi Investments Oy

19%; Kokkila Timo 13%;

of 59


Titan Cement

Greece/Materials, Construction & Infrastructure Analyser


Titan Cement (Accumulate) On a strong earnings growth path

Solid performance in 3Q16, bottom line boosted by one-off tax

The facts: Titan reported its 3Q16 financial results yesterday after market opening:

Specifically, group sales rose by 0.8% YoY to EUR 400m (vs. our estimate of EUR 406m),

EBITDA advanced by 43% YoY to EUR 85.5m (vs. our estimate of EUR 84.8m), while

reported net income stood at EUR 112.7m (vs. our estimate of EUR 31.5m) including EUR

79m deferred tax asset from the utilization of tax loss carry-forwards in the US.

Our Analysis: Below is an analysis of performance and management’s outlook per

geographic region: 1) Greece: Revenues rose by 20% YoY to EUR 62m due to favourable

comparison after the impact of capital controls imposed at the end of June 2015, while

higher utilization rate helped EBITDA to increase by 144% YoY to EUR 8.3m.š On the

negative side, export margins were affected by competition and rising energy and freight

costs. The outlook for domestic demand remains weak, while pressure on exports margins

might continue. 2) USA: Following a slowdown in 2Q16 due to maintenance works in plants,

the company resumed double digit sales growth rate on the back of price increases, volume

growth, strong USD and expansion of ready mix operations. Overall, revenues increased by

16% YoY to EUR 212m, while EBITDA rose by 5.5% YoY to EUR 46m. The positive outlook

remains intact on solid demand growth on all regions, new price increases in January,) and

further investments in downstream activities. 3) SEE: Revenues declined by 7.4% YoY to

EUR 60m and EBITDA fell by 7% YoY to EUR 20m as volume increases in some regions

and fuel savings were offset by continued price pressures. The modest outlook is

unchanged. 4) Egypt: Amid a mixed environment due to challenging macro and currency

conditions and strong cement demand (approximately +9%), revenues increased by 17%

YoY to EUR 67m on higher utilization rate. Significant reduction in production costs due to

the full operation of the second coal grinding mill in Beni-Suef led EBITDA higher by 87%

YoY to EUR 11m. The short-term outlook is uncertain as operational efficiencies and strong

demand is mitigated by the decision of the Central Bank of Egypt to allow local currency to

float freely. Anticipating the new currency devaluation, 3Q16 results include a provision of

EUR 6.4m (below EBITDA) for FX loss on the assumption for a c.20% devaluation, however

there is risk for additional FX losses to be recorded in 4Q16. FCF in 9M16 was negative by

approximately EUR 15m including capex of EUR 94m, working capital outflow of EUR 33m

and completion of acquisition in Brazil for around EUR 90m. Following the payment of

interest expenses of c.EUR 53m and payment of dividends and share repurchases of c.EUR

40m, group net debt stood at EUR 713m at the end of 3Q16 from EUR 578m at the end of

2Q16 and EUR 621m at the end of 2015.

Titan 9M16 results

EUR m 9M15 IBGe 9M16 % YoY

Sales 1029.5 1129.7 1124.2 9.2%

EBITDA 165.2 204.3 205.0 24.1%

EBITDA margin 16.0% 18.1% 18.2%

Net Profit 36.2 40.8 121.9 236.7%

Source: The Company, IBG Research

Conclusion & Action: Excluding the differed tax, 3Q16 results were in line with our

estimates. With the added uncertainty in Egypt due to currency devaluation, key trends are

unchanged in other regions. In this framework, we expect to trim our 2016-2017 EBITDA

estimates due to weaker performance in SE Europe and effect of Egyptian currency until

local cement prices adjust to the new environment. On the other hand, bottom line in 2016 is

boosted by the deferred tax, more than offsetting FX losses, prompting management to

imply the distribution of a higher dividend for FY16 results at the conference call held

yesterday. We will revert soon with new estimates and valuation.

-

Analyst(s):

Vassilis Roumantzis, Investment Bank of Greece

[email protected]

+30 2108173394

Accumulate

19.81


22.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg TTNr.AT/TITK GA



Free float 62%









Sales (m) 1,398 1,521 1,669

EBITDA (m) 216 275 340

EBITDA margin 15.5% 18.1% 20.3%

EBIT (m) 86 156 222

EBIT margin 6.1% 10.2% 13.3%


ROCE 2.8% 4.6% 6.5%

Net debt/(cash) (m) 621 700 600




EV/Sales 1.6 1.5 1.3

EV/EBITDA 10.0 8.5 6.6

EV/EBITDA (adj.) 9.7 8.5 6.6

EV/EBIT 25.3 15.0 10.1

P/E (adj.) 42.7 32.7 11.4

P/BV 1.0 1.1 1.1

OpFCF yield -2.4% -0.6% 6.9%


EPS (adj.) 0.41 0.61 1.74

BVPS 17.12 18.57 18.40

DPS 0.30 0.40 0.50

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vvdsvdvsdy

TITAN CEMENT Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Founding families 38%;

of 59


Vicat

France/Materials, Construction & Infrastructure Analyser


Vicat (Accumulate) Solid performance in 3Q16, bottom line boosted by one-off tax

Q3 in line but guidance revised down

The facts: Comments ahead of the conference call this afternoon (3pm CET).

Vicat has published 9m-2016 revenues of EUR1867m, up +3.4% in organic. In

Q3 alone (revenues of EUR629m), organic growth was only +1.7% (+4.3% in H1).

As expected, 2016 guidance has been revised down, with now only modest

growth expected in EBITDA. The reason for this dip is of course the devaluation

of currency in certain emerging markets, particularly the Egyptian pound (EGP).

Our analysis: Organic growth in Q3 (+1.7%) hides a contrasting situation with: 1)

good performance in France which confirms its recovery (+3.1%) thanks to

export; 2) satisfactory momentum in Senegal; 3) but this performance is impacted

by a decline in Switzerland, a contrasting situation in the US (positive in Alabama

but negative in California) and by a halt in Turkey. Revenues jumped by 36.2% in

Egypt thanks to volumes picking up but the results for this country will inevitably

be impacted by devaluation effects.

Conclusion & Action: IV of EUR68.8.

Analyst(s):

Jean-Christophe Lefèvre-Moulenq, CM - CIC Market Solutions [email protected]

+33 1 53 48 80 65

Accumulate

56.05


68.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg VCTP.PA/VCT FP



Free float 32%









Sales (m) 2,458 2,462 2,547

EBITDA (m) 447 470 510

EBITDA margin 18.2% 19.1% 20.0%

EBIT (m) 249 269 306

EBIT margin 10.2% 10.9% 12.0%


ROCE 4.6% 5.1% 5.8%

Net debt/(cash) (m) 1,086 954 826




EV/Sales 1.6 1.6 1.5

EV/EBITDA 9.0 8.3 7.4

EV/EBITDA (adj.) 9.0 8.3 7.4

EV/EBIT 16.2 14.5 12.3

P/E (adj.) 20.3 18.5 15.8

P/BV 1.1 1.1 1.1

OpFCF yield 5.0% 8.4% 8.8%


EPS (adj.) 2.73 3.04 3.56

BVPS 50.15 51.35 52.76

DPS 1.50 1.50 1.80

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vvdsvdvsdy

VICAT Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Family & Holdings 61%; Treasury stock

3%; Employees 5%;

of 59


Media

Analyser

MEDIA

Q3 in line but guidance revised down SPAIN: October audience/targets. A3M positive

The facts: October TV audience/target data released.

The Y/Y comparison between A3M/MSE is distorted by the different

number of channels (progressive opening of 6 NGC since October 2015 +

Mega). In April the equal number of channels between the two ended.

Now the scenario is stable with MSE holding one more NGC channel (7

vs. A3M’s 6). Audience in the new channels were moderate (although

some share was scratched from the large chains) even with the new

programming: 13TV (2.12%, 24h, SD), Atreseries (0.81% HD), BeMad

(0.66%, HD), DKiss (0.76%, SD), TEN (0.43%, SD) y Real Madrid (0.24%, HD).

Our analysis: MSE/A3M obtained good results, recovering normal

audience levels following the Eurocup (MSE)/Olympic Games (RTVE) and

bearing in mind that A3M broadcasted some Champion games. MSE has

reached two years and a half as audiovisual leader in 24h and prime time

audience. Telecinco was the most watched channel with 13.8% share (vs.

12.6% Antena 3) and 13.7% (vs. 12.5% Antena 3) in commercial target.

Cuatro was surpassed again by La Sexta in 24h audience (6.4% vs. 7.6%)

and prime time (6.4% vs. 8.4%). The annual performance is still positive for

A3M due to the Champions (and considering it offered F1 in 2015), Antena

3/La Sexta’s prime time audience/targets and temporary equal number of

channels.

The total NGC, FDF (MSE) continues leading (2.81% prime time vs. 2.41%

Neox vs. 2.2% Energy) durign 55 months although audience dropped a Little.

MSE’s NGC surpassed 2.3pp total day/ind audience (2.1pp in prime time) vs.

A3M’s in October.

Conclusion: Positive data especially for A3M. In the latter, the negative trend

reverted thanks to the Champions and La Sexta. We maintain our estimated

audience and monetising levels for MSE (31.3% 24h/ind. 2016e, 1.39x

power ratio16e) and A3M (27.1%, 1.59x).

---------- Stoxx Media,


Analyst(s):

Eduardo Garcia Arguelles, GVC Gaesco Beka

[email protected]

+34 914 367 810

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of 59


JCDecaux

France/Media Analyser

MEDIA

JCDecaux (Accumulate) SPAIN: October audience/targets. A3M positive

Q3 revenues: an organic contraction in Q4

The facts: Q3 revenues were released yesterday at market close. Company

contact.

Our analysis: The Q3 slowdown (vs +3.4% in Q2) was a bit steeper than

expected owing to China (20%+ of revenues), as there was a double-digit decline

(impact on Transport). There was a good surprise in Street Furniture (+6.0% after

+2.4% in Q2), especially in France, while the Billboards division was helped by

the improved situation in Moscow.

EURm

Q3-16 revenues reported

Org. change

Q3-16e CM-CIC

Org. change

Q3-16 Cons.

Total 793 +1.5% 804 +2.0% 802

Street furniture 341 +6.0% 334 +2.0% 332

Transport 332 -2.4% 343 +2.6% 348

Billboards 120 +1.1% 127 +0.0% 117

The guidance of a -2% contraction in Q4 (vs Q4-15, the strongest quarter of the

year at +6.2%; lack of visibility, especially on Brexit) was unexpected: the

consensus was +3.8% on the year, and the group guided for +3%, stressing the

negative impact on EBITDA of this poor year-end. We are adjusting our forecasts

for 2016E: organic growth from +4.1% to +3.0%, and EBITDA from EUR661m to

EUR639m.

Conclusion & Action: The stock is likely to fall on the surprisingly poor figures.

However, following the decline of 23% since April, the share has reached an entry

point in our view, with EV/EBITDA 16E of 9.1x (although hurt by Cemusa), vs. an

average of 10.0x in 2008-15 for the global leader in outdoor advertising.

Analyst(s):

Eric Ravary, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 71

Emmanuel Chevalier CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 72

Accumulate

26.98


31.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg JCDX.PA/DEC FP



Free float 34%









Sales (m) 2,807 2,973 3,071

EBITDA (m) 583 520 604

EBITDA margin 20.8% 17.5% 19.7%

EBIT (m) 270 204 272

EBIT margin 9.6% 6.9% 8.9%


ROCE 6.8% 4.9% 6.6%

Net debt/(cash) (m) 511 597 527




EV/Sales 2.8 2.0 1.9

EV/EBITDA 13.6 11.7 9.8

EV/EBITDA (adj.) 13.6 11.7 9.8

EV/EBIT 29.4 29.8 21.7

P/E (adj.) 33.0 28.0 22.0

P/BV 3.2 2.4 2.2

OpFCF yield 4.4% 2.1% 3.5%


EPS (adj.) 1.07 0.97 1.23

BVPS 11.03 11.38 12.00

DPS 0.56 0.56 0.60

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vvdsvdvsdy

JCDECAUX Stoxx Media (Rebased)Source: Factset

Shareholders: JcDecaux holding 65%; Decaux family

1.48%; Employees 0.07%;

of 59


Ubisoft

France/Media Analyser

MEDIA

Ubisoft (Neutral) Q3 revenues: an organic contraction in Q4

H1 2016/17 results: EBIT guidance revised upwards

The facts: Presentation yesterday evening of H1 results which were higher than

expectations.

Our analysis: Note: 1) Higher-than-expected revenues: Q2 EUR142m, +29% (vs

cautious guidance of EUR100m); in H1, digital +103%, back catalogue +46%,

thanks to expansion packs; 2) positive effect on the gross margin from the digital

mix: 80.5% vs 74.4%; FCF close to breakeven in H1, which is rare.

EURm H1 16/17 - reported H1 16/17E - CM-CIC H1-15/16

Revenues 281 255 207

Gross margin 226 197 154

uEBIT before SO -62 -121 -108

Revision of 2016/17 guidance: more cautious on revenues EUR1,610m-

EUR1,670m vs EUR1,700m, more optimistic on EBIT EUR230m-EUR250m vs

EUR230m. Management is being more cautious over the success of its games

but the digital mix effect (revised to 40% vs 35%) has a positive impact on

margins. We have left our 2016/17E EBIT forecast unchanged at EUR236m.

Conclusion & Action: The mix has rapidly improved due to digital (additional

sales extend the life cycle of games) but management is being more prudent over

the success of its games in H2. At 13.7x 16/17E EBIT (vs 14x on average for its

US peers), we think that the stock continues to factor in a speculative premium.

We have updated our fundamental value to EUR23 (50% DCF, 50% EV/EBIT of

11x, -20% vs US peers).

Analyst(s):

Eric Ravary, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 71

Neutral

29.03


23.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg UBIP.PA/UBI FP



Free float 90%









Sales (m) 1,394 1,662 1,807

EBITDA (m) 600 770 884

EBITDA margin 43.0% 46.3% 48.9%

EBIT (m) 137 200 265

EBIT margin 9.8% 12.0% 14.6%


ROCE 11.5% 13.4% 17.3%

Net debt/(cash) (m) 30 (16) (231)

Net Debt/Equity 0.0 0.0 -0.2

Debt/EBITDA 0.1 0.0 -0.3


EV/Sales 2.3 2.0 1.7

EV/EBITDA 5.2 4.2 3.4

EV/EBITDA (adj.) 5.0 4.1 3.3

EV/EBIT 22.9 16.3 11.5

P/E (adj.) 34.3 25.6 18.2

P/BV 3.0 2.8 2.4

OpFCF yield -6.2% 4.9% 6.6%


EPS (adj.) 0.81 1.13 1.60

BVPS 9.06 10.23 11.88

DPS 0.00 0.00 0.00

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vvdsvdvsdy

UBISOFT SBF 120 (Rebased)Source: Factset

Shareholders: Fr¿res Guillemot 9%; Employees 0.84%;

of 59


Repsol

Spain/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

Repsol (Buy) H1 2016/17 results: EBIT guidance revised upwards

Details from the 3Q results conference call

The facts: Following results, management held a conference call.

Our analysis: We highlight the following aspects:

Capex: 2016 full year estimates revised down from EUR3.9bn to EUR3.5bn

and extendable to 2017.

Rating: Positive conclusions expected from the meeting held in October with

the ratings agencies, having covered the actions made since the

presentation of the strategy plan. There is room to improve if necessary with

a hybrid issuance (now requiring a cost of 4.6%) and/or divestment of smaller

non-strategic assets.

Working capital: Improvement expected vs. 9m’16 (EUR1.07bn). Due to:

new finance agreement in Venezuela (credit line to PDVSA to finance

investments for the next 5 years) which is expected to reduce the accounts

pending payment that have increased over EUR200m in the year. For year-

end, working capital could improve vs. 9m’16 by EUR300-400m.

Downstream: Strength continues in the division thus the Group reiterates its

refining margin target of $6.9/b considering the end of the maintenance stops

and improvements in local demand for middle distillates. In this 4Q’16,

refining margins are performing very well, between $7-9/b. For 2017 margins

could even outpace 2016.

Shareholders’ remuneration: We will have to wait for a more stable outlook

in the credit rating before returning to the traditional remuneration and

implementation of share buy-backs to offset the negative, dilutive impact

from scrip dividends. For 2016, awaiting the Board’s approval, we could

consider a similar dividend against 2016 as in 2015 (EUR0.8/share).

Intended financial ratios (Debt/EBITDA 1.2-1.3x) to assure the investment

grade (vs. 2.18x 9m’16).

Efficiencies and synergies: The Company expects to retain 80% of the

target until 2018 onwards (EUR2.1bn) as it is not linked to the current

commodities prices.

Production in upstream: For 2016, in line with the 590-700k boe/d guidance

and no contribution expected from Libya as the asset is still on hold, but in a

good state.

Conclusion: Although results have not surpassed market consensus, there are a

number of positive aspects (improving break-even, sturdy downstream activity

despite the weakness in international margins, improving efficiency and synergies

plans, and cost control in explorations). On the other hand, based on the reduced

capex during the year and the possible smaller divestments we can expect the

investment grade to be maintained as well as remuneration policy. More so, the

expected retention in future efficiencies will bring about a substantial

improvement in operating leverage that will flourish during the more bullish crude

price momentums. Buy recommendation reiterated at current market prices.

Analyst(s):

Sonia Ruiz De Garibay, GVC Gaesco Beka

[email protected]

+34 91 436 7841

Buy

12.50


15.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg REP.MC/REP SM



Free float 73%









Sales (m) 41,460 36,990 44,262

EBITDA (m) 5,013 5,014 5,861

EBITDA margin 12.1% 13.6% 13.2%

EBIT (m) 1,806 2,044 2,650

EBIT margin 4.4% 5.5% 6.0%

Net Profit (adj.)(m) 1,860 1,717 1,940

ROCE 3.0% 3.6% 4.7%

Net debt/(cash) (m) 11,934 8,403 6,471



Int. cover(EBITDA/Fin. int) (21.5) 11.1 13.8

EV/Sales 0.6 0.6 0.5

EV/EBITDA 4.6 4.8 3.8

EV/EBITDA (adj.) 4.6 4.8 3.8

EV/EBIT 12.9 11.7 8.3

P/E (adj.) 7.6 10.7 9.4

P/BV 0.5 0.6 0.6

OpFCF yield 11.0% 3.9% 6.1%


EPS (adj.) 1.33 1.17 1.32

BVPS 20.32 20.45 21.49

DPS 0.80 0.80 1.00

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REPSOL Stoxx Oil & Gas (Rebased)Source: Factset

Shareholders: CaixaBank 10%; Sacyr Vallehermoso

8%; Temasek 5%;

of 59


Tenaris

Italy/Oil Services Analyser

OIL SERVICES

Tenaris (Neutral) Details from the 3Q results conference call

Better than expected margins in Q3

The facts: the company published its third quarter results yesterday after market

closing. A conference call is scheduled today at 1pm CET.

Our analysis: the company’s results were better than expected because of

sizeably higher margins. The EBIT was negatively affected by USD 10m

severance charges and by a USD 14m positive one-off related to the sale of a

plot of land

Q3-15 Q3-16 Y/Y Q3-16e 9M-15 9M-16e Y/Y

Sales 1,559.0 1,048.0 -32.8% 1,076.4 5,680.0 3,426.0 -39.7%

EBITDA 239.7 153.7 -35.9% 133.4 1,031.4 482.6 -53.2%

margin 15.4% 14.7%

12.4% 18.2% 14.1%

EBIT -319.5 -13.8

-31.6 171.0 -12.0

margin -20.5% -1.3%

-2.9% 3.0% -0.4%

PBT -320.3 16.6

-16.3 172.8 43.8

Net profit -354.9 16.6

-15.5 -33.6 21.0

The company’s net cash at the end of September was USD 1.8bn unchanged

compared to the end of June.

Improvement expected in Q4 16 and H1 17 - the company said that US drilling

activity was gradually increasing and is up 25% from its low in May. In the rest of

the world, drilling activity is close to bottoming out. The recovery, however, will be

gradual while oil inventories remain high and the financial condition of the oil and

gas industry and its suppliers is stretched.

The company also said it expected its sales and EBITDA in the fourth quarter to

benefit from the gradual recovery of demand in North America and a strong level

of shipments in the Middle East and Africa. In the first half of 2017, sales and

EBITDA are expected to continue to benefit from a recovery in sales in North

America but a slowdown in sales to the Middle East and Africa will hold back the

results of the first quarter.

Interim dividend at USD 0.13/sh - the board approved the payment of an

interim dividend of USD 0.13 per share (USD 0.26 per ADS), or approximately

USD 153 million. This compares with USD 0.15 per share paid in November

2015.

.

Conclusion & Action: the company’s results were slightly better than expected

and a recovery is expected soon. However, we believe the present stock price

already assumes a sizeable recovery in the next few quarters.

Analyst(s):

Francesco Sala, Banca Akros

[email protected]

+39 02 4344 4240

Neutral

12.29


13.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TENR.MI/TEN IM



Free float 40%








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

Sales (m) 7,101 4,749 6,054

EBITDA (m) 1,255 663 1,011

EBITDA margin 17.7% 14.0% 16.7%

EBIT (m) 197 (16) 384

EBIT margin 2.8% nm 6.3%


ROCE 1.4% -0.1% 2.8%

Net debt/(cash) (m) (1,806) (1,625) (1,276)


Debt/EBITDA -1.4 -2.5 -1.3

Int. cover(EBITDA/Fin. int) (109.0) (54.4) (110.3)

EV/Sales 1.6 2.8 2.3

EV/EBITDA 9.0 20.4 13.7

EV/EBITDA (adj.) 9.0 20.4 13.7

EV/EBIT 57.6 nm 36.1

P/E (adj.) nm nm nm

P/BV 1.2 1.4 1.5

OpFCF yield 8.1% 2.2% 1.1%


EPS (adj.) 0.13 (0.00) 0.24

BVPS 10.05 9.61 9.40

DPS 0.45 0.45 0.45

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TENARIS FTSE MIB (Rebased)Source: Factset

Shareholders: San Faustin 60%;

of 59


adidas

Germany/Personal Goods Analyser

PERSONAL GOODS

adidas (Sell) Better than expected margins in Q3

Great Q3 underpins strong current year forecast

The facts: New CEO Kasper Rorsted presided over his first set of quarterly

results which emerged at the top end of the range of estimates. FY-16 guidance

was repeated, although it was clear during the conference call that annual net

income will be at the top end of the EUR 975m-1bn range (+39% yoy), despite at

least EUR 30m of one-off costs, effectively increasing the guidance by 3% for the

current year and still further going forward with a commitment to rising margins

from these measures.

Our analysis: Q3-16 sales of EUR 5.41bn (+13.8% reported, +17% currency-

adjusted) beat both equinet estimate of EUR 5.28bn and cons. at EUR 5.36bn.

EBIT of EUR 563m (+11.5%) was a clear beat compared to our EUR 549m and

consensus EUR 557m estimates for a 10.4% margin (down 20bp yoy). Moreover,

this outcome included EUR 10m one-off costs and in our view represents a very

good performance against the strongest comparative quarter in 2015.

Meanwhile 2016 will see double-digit sales growth across all regions bar Russia.

Moreover, in 9M the group beat the key competition by taking share in Greater

China (+25%), North America (+20%) and W. Europe (+15%) regions.

Gross margin was hit 90bp in Q3 (10bp in 9M) but this was largely driven by FX

which was negative 490bp in Q3 (400bp in 9M). ie nothing to do with promotional

activity (as was suggested by US sporting brands, aside some minor hit in the golf

segment).

The new CEO is fully committed to the “Creating the New” growth platform

outlined by previous management. Priority on sustainable top line growth and

improved operating margins is confirmed. However no initial 2017 guidance

issued today (contrary to outlook provided in previous years).

Reebok is to move to a new HQ in Boston, reducing head office staff from 950 to

650 (150 to transfer to adidas Portland / 150 jobs to go). This involves EUR 30m

exceptional costs, but we view it as a sign that Rorsted is already getting a grip.

Reebok to evolve as a fitness brand, boosting the top line and improving margins.

Meanwhile the TaylorMade disposal is to be signed by the end of year (could be

loss on disposal) as was previously signalled – might be a sentiment trigger.

The next CMD in March will provide details behind two focus points, namely the

group’s digital transformation and the turnaround of the North American

operations (in last 18 months US footwear market share doubled from 5% to 10%

regaining the Nr. 2 position, but expect above average growth again in 2017).

Conclusion & Action: Following the results, the shares fell 6%, which seems a

bit excessive with good quality 9M results and confirmed guidance. The problem

is that consensus was already at the top end of guidance whilst the exceptional

costs and FX hit restricts the ability to upgrade forecasts (as had been the

whisper word). There may also be some disappointment with lack of further

“general growth principles” from Kasper Rorsted before March.

We will review our model post the call expecting only minor changes for 2016.

However, the Reebok restructuring costs (in 2016 figures) will lead to higher

margins going forward which will push future estimates a little and may increase

our current EUR 128 TP. We will then review the relevance of our Sell rating.

Analyst(s):

Mark Josefson, equinet Bank

[email protected]

+4969-58997-437

Sell

137.35


128.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ADSG.DE/ADS GR



Free float 100%









Sales (m) 16,915 18,998 20,167

EBITDA (m) 1,433 1,810 1,920


EBIT (m) 1,059 1,442 1,525

EBIT margin 6.3% 7.6% 7.6%

Net Profit (adj.)(m) 680 1,000 1,056

ROCE 9.5% 11.8% 11.4%

Net debt/(cash) (m) 92 (57) 88



Int. cover(EBITDA/Fin. int) 69.9 (670.3) (179.4)

EV/Sales 1.1 1.5 1.4

EV/EBITDA 12.9 15.3 14.5

EV/EBITDA (adj.) 12.5 15.3 14.5

EV/EBIT 17.4 19.2 18.3

P/E (adj.) 26.7 27.5 26.0

P/BV 3.2 4.3 3.9

OpFCF yield 3.2% 1.6% 0.8%


EPS (adj.) 3.37 5.00 5.27

BVPS 28.11 31.60 35.05

DPS 1.50 1.60 1.80

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ADIDAS Stoxx Personal Goods (Rebased)Source: Factset

Shareholders: Fidelity 5%; Bruxelles Lambert 5%;

Capital Research 3%;

of 59


Hermès Intl.

France/Personal Goods Analyser

PERSONAL GOODS

Hermès Intl. (Neutral) Great Q3 underpins strong current year forecast

Feedback from the conference call on Q3 revenues

The facts: The group provided some details which prompted us to slightly revise

our 2016 forecasts without any significant impact on the valuation.

Our analysis: Management is maintaining its 2016 forecasts: growth of <8% and

a slightly higher EBIT margin (>31.8% in 2015). Leather Goods and Saddlery

(50% of revenues) should be able to post growth of between 13% and 13.5% over

the financial year, which implies Q4 growth of 6/7%. This is a conservative figure

despite the Héricourt anniversary and a more difficult base effect. The BU seems

to be able to grow to around ~10% in Q4, i.e. >14% over the year. The

momentum for the other BUs, totalling the other half of revenues, should benefit

from the announced increase in communication spending (5% of 2016 revenues

vs 4% in H1) to renew with growth at +3% in Q4 vs 0% y-t-d. Silk & Textiles is still

exposed to lower tourist flows to France but should be able to limit the decline vs -

6% y-t-d, resulting from the fall in sales after the Paris terrorist attacks in

November 2015. Perfumes will also benefit from an easier base effect. Overall, by

factoring in a less negative forex effect in Q4, we are revising up our 2016

revenues by at least 1% to EUR5.17bn (FactSet consensus EUR5.16bn) with

organic growth of 7.4% vs 7.7% y-t-d. Forex hedging (+100bp) and the weighting

of Leather Goods and Saddlery should allow for a 120bp improvement in the

gross margin, helping to cover the increased communication items (+40bp vs

+50bp in our previous forecast) and general expenses (+30bp including free

shares), as well as record a 50bp increase in the EBIT margin to 32.3% (forecast

increase of +10bp). With regard to its financial policy (net cash forecast of

EUR2bn at end-2016), the group has confirmed that it is retaining some leeway,

which we think is primarily for significant real-estate programmes.

Conclusion & Action: Valuation currently seems correct. The slowdown phase

in Leather Goods and Saddlery vs a temporary difficulty for the other BUs to

accelerate, could help to recover an entry point of below EUR350.

Analyst(s):

Arnaud Cadart, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 86

Neutral

368.40


370.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg HRMS.PA/RMS FP



Free float 21%









Sales (m) 4,841 5,171 5,583

EBITDA (m) 1,780 1,929 2,044

EBITDA margin 36.8% 37.3% 36.6%

EBIT (m) 1,541 1,668 1,756

EBIT margin 31.8% 32.3% 31.4%

Net Profit (adj.)(m) 972 1,061 1,117

ROCE 54.6% 55.2% 54.3%

Net debt/(cash) (m) (1,548) (2,112) (2,685)


Debt/EBITDA -0.9 -1.1 -1.3


EV/Sales 6.5 7.1 6.5

EV/EBITDA 17.7 19.1 17.8

EV/EBITDA (adj.) 17.7 19.1 17.8

EV/EBIT 20.4 22.1 20.7

P/E (adj.) 33.8 36.7 34.8

P/BV 8.8 8.7 7.5

OpFCF yield 2.8% 2.3% 2.5%


EPS (adj.) 9.21 10.05 10.58

BVPS 35.45 42.18 49.11

DPS 3.35 3.70 4.30

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vvdsvdvsdy

HERMES INTL. Stoxx Personal Goods (Rebased)Source: Factset

Shareholders: Family holding 'H51' and linked 65%;

Nicolas Puech 5%; Groupe Arnault 8%;

Auto detention 1.10%;

of 59


L’Oréal

France/Personal Goods Analyser

PERSONAL GOODS

L’Oréal (Reduce) Feedback from the conference call on Q3 revenues

Q3 revenues slightly higher than expectations

The facts: Yesterday after market, L’Oréal published Q3 revenues of

EUR6,153m, in line with our expectations and those of the Factset consensus

(EUR6,130m).

Our analysis: Organic growth came out at 5.6%, a sequential improvement after

+4.3% in H1. The group continues to benefit from its leading global positions on a

very buoyant make-up market. By geographical region, it enjoyed strong demand

in North America and the awakening of emerging markets (Latin America,

Eastern Europe), whereas Western Europe has been driven down by the French

market. By division: 1) Professional Products posted weak organic growth, slightly

below our Q3 expectations at +0.9%, still affected by a North American market

that is not very dynamic for the group, in a continuation of Q2. Management is

expecting better as of Q4; 2) Consumer Products maintained a strong growth rate

(4.7% l-f-l), in line with our expectations, driven by initiatives in make-up and hair;

3) L’Oréal Luxe and 4) Active Cosmetics did better than expected at respectively

+9.3% and +6.5% l-f-l. L’Oréal Luxe benefitted from global demand for make-up

and fragrance initiatives. Active Cosmetics outperformed a difficult European

market. 5) The Body Shop benefitted from its 40th anniversary to get back in the

black (+2.8%), in line with our expectations. For 2016, the group is expecting to

outperform a growing market by around 4% and improve its profitability.

Conclusion & Action: A publication slightly above expectations in a favourable

context for make-up. A reassuring point is that the Consumer Products division is

still on the right track. L’Oréal remains a safe haven investment with a relatively

limited risk profile and IRR in the medium to long term (6%).

Analyst(s):

Arnaud Cadart, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 86

Reduce

161.60


150.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg OREP.PA/OR FP



Free float 43%









Sales (m) 25,257 25,705 26,872

EBITDA (m) 5,157 5,654 5,965

EBITDA margin 20.4% 22.0% 22.2%

EBIT (m) 4,194 4,498 4,755

EBIT margin 16.6% 17.5% 17.7%

Net Profit (adj.)(m) 3,298 3,365 3,569

ROCE 18.7% 20.1% 21.0%

Net debt/(cash) (m) (618) (2,199) (3,793)

Net Debt/Equity 0.0 -0.1 -0.1

Debt/EBITDA -0.1 -0.4 -0.6


EV/Sales 3.0 3.0 2.8

EV/EBITDA 14.7 13.7 12.7

EV/EBITDA (adj.) 14.7 13.7 12.7

EV/EBIT 18.1 17.3 15.9

P/E (adj.) 26.4 27.0 25.4

P/BV 3.7 3.6 3.3

OpFCF yield 3.5% 3.7% 3.8%


EPS (adj.) 5.88 6.00 6.36

BVPS 42.08 45.25 48.70

DPS 3.10 3.20 3.40

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vvdsvdvsdy

L'OREAL Stoxx Personal Goods (Rebased)Source: Factset

Shareholders: Famille Bettencourt-Meyers 33%; Nestl¿

23%; Treasury shares 0.53%;

Management & Employees 0.82%;

of 59


Beni Stabili

Italy/Real Estate Analyser

REAL ESTATE

Beni Stabili (Accumulate) Q3 revenues slightly higher than expectations

Rental income sizeably down as expected

The facts: the company unveiled yesterday the rents recorded in the first nine

months.

Our analysis: the company no longer disclosed its “full” quarterly results but only

some data on the top line.

The company said that the financial occupancy rate on total portfolio (excluding

development) increased to 95.2% from 93.5% at the end of 2015. The

improvement is mainly due to new contracts. In particular, for 9M 2016 Beni

Stabili reports:

34 new contracts for 28,500sqm and an annual base value of EUR 7m;

17 renewals for 18,200sqm and an annual base value of EUR 6m;

an average maturity of lease agreements of 9.2 years.

As a result the total rental income was EUR 149m vs EUR 160.2m in 9M 2015.

The change is mainly due to reduced rents due to the sales of assets (net of

acquisitions) for EUR 8.2m and reduced rents due to Telecom Italia renegotiation

for EUR 1.9m.

On the like-for-like1 basis, rental income is stable (-0.2%). The Office TI portfolio,

reported a decrease of 2.5% due to the renegotiation of Telecom leases finalized

in 2015. Excluding Telecom Italia portfolio, the rental income like-for-like growth is

solid at +2.1%,

2016 guidance revised upwards - Beni Stabili revised its 2016 outlook and has

now an objective of a 2016 RNI increase by +5% vs slight increase previously

announced.

Conclusion & Action: the rental income (gross) in the first nine months is

consistent with our present estimate. Recommendation and target confirmed.

Analyst(s):


[email protected]

+39 02 4344 4240

Accumulate

0.53


0.75



Target price: EUR

Share price: EUR

Reuters/Bloomberg BNSI.MI/BNS IM



Free float 46%









Gross Rental Income (m) 174 167 170

EBITDA (m) 101 149 152

EBITDA margin 57.9% 89.2% 89.4%

Portfolio Result (m) (19) 2 2

Net Financial Result (149) (68) (66)

Net Profit (adj.)(m) (51) 80 86

Funds From Operations (52) 80 84

EPS (adj.) -0.03 0.04 0.04

DPS 0.02 0.03 0.03

IFRS NAVPS 0.86 0.87 0.89

EPRA NAVPS 1.05 1.05 1.05

Premium/(Discount) (18.8%) (39.9%) (40.9%)

DPS 0.02 0.03 0.03

Earnings adj. yield nm 7.5% 8.0%


EV/EBITDA 36.2 22.1 21.4

P/E (adj.) nm 13.4 12.5

Int. cover(EBITDA/Fin.int) 0.7 2.2 2.3

Net debt/(cash) (m) 2,064 2,087 2,055

Net Debt/Total Assets 50.2% 50.1% 49.4%

0.45

0.50

0.55

0.60

0.65

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BENI STABILI FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Fonciere des regions 49%; Credit

Agricole 6%;

of 59


Sponda

Q3/2015a Growth

EURm Q3a OP Cons. Diff. Low High

Total sales 66.3 66.7 67.0 0% 64 68 56.7 16.9 %

Net operating income 51.5 50.0 0.0 #DIV/0! 0 0 42.2 22.0 %

EPRA EBIT 46.4 44.4 44.9 -1% 43.4 45.5 41.50 11.8%

EPRA EBIT margin 70.0 % 66.5 % 66.9 % 0.0 % 0.0 % 0.0 % 73.2 %

Fair value changes -10.0 0.0 0.5

Financials (net) -12.8 -11.9 -12.1

PTP 24.4 32.5 31.9 2% 30.0 33.5 28.5 -14.4 %

Taxes -1.4 -1.2 0.0 0 0 0 -0.3

EPRA Earnings* 31.0 31.2 29.9 4% 24.0 32.5 27.8 11.4 %

EPRA EPS* 0.09 0.09 -1% 0.07 0.10 # 0.10 -8%

IFRS EPS* 0.09 0.09 0.00 0.07 0.10 # 0.06 -14.8%

EPRA NAVPS 5.38 5.38 5.58 -3.6 %

IFRS NAVPS* 5.05 5.07 4.71 7.2 %

Source: OP and FactSet * After hybrid bond, with new number of shares

Q3/2016e

Sponda

Finland/Real Estate Analyser

REAL ESTATE

Sponda (Accumulate) Rental income sizeably down as expected

Q3 results matched expectations and a technical guidance upgrade

The facts: Sponda reported its Q3 results this morning.

Our analysis: Sponda reported a slightly better net income and EPRA-EBIT in

Q3 than we expected. However, financial costs slightly exceeded our forecast,

and EPRA earnings and EPS were at the expected level. The fair value change

was EUR -10m, which mainly resulted from occupancy changes in Citycenter.

NAV was nearly as we expected 5.05/5.07 (act/OP). The growth in comparable

net income was 2% (1–9/16), the occupancy rate was 89.3% (Q2:89.1%). The

guidance is upgraded mainly as a result of postponed real estate property sales:

NRI 189–194 (prev. 182–192, OP 189), EPRA-earnings 111–116 (prev. 102–114,

OP 113).

Conclusion & Action: In our opinion, the Q3 results that matched expectations

and the technical guidance upgrade do not justify a significant price reaction

today.

Analyst(s):

Matias Rautionmaa, OP Corporate Bank

[email protected]

+358 10 252 4408

Accumulate

4.19


4.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg SDA1V.HE/SDA1V FH



Free float 85%









Gross Rental Income (m) 230 258 260

EBITDA (m) 157 166 168

EBITDA margin 68.0% 64.4% 64.3%

Portfolio Result (m) 24 20 8

Net Financial Result (49) (48) (50)


Funds From Operations 105 113 114

EPS (adj.) 0.37 0.36 0.34

DPS 0.19 0.19 0.19

IFRS NAVPS 5.26 5.17 5.33

EPRA NAVPS 5.60 5.49 5.65

Premium/(Discount) (25.4%) (18.9%) (21.4%)

DPS 0.19 0.19 0.19

Earnings adj. yield 8.8% 8.7% 8.0%


EV/EBITDA 16.8 19.7 19.9

P/E (adj.) 10.6 11.5 12.4

Int. cover(EBITDA/Fin.int) 3.2 3.4 3.4

Net debt/(cash) (m) 1,423 1,758 1,812

Net Debt/Total Assets 41.4% 45.3% 45.4%

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vvdsvdvsdy

SPONDA OMXH (Rebased)Source: Factset

Shareholders: Oy Palsk Ab 15%; Keskinäinen

Työeläkevakuutusyhtiö Varma 10%; HC

Fastigheter Holding Oy Ab 10%;

of 59


F-Secure

EURm Q3a vs. Cons. OP Cons.

Corporate security 15.1 #DIV/0! 15.6

Consumer security 23.7 #DIV/0! 24.1

Total sales 38.8 -2% 39.7 39.5

Sales growth

Total EBIT 4.5 -22% 5.1 5.8

Total EBIT margin 11.6 % 12.9 % 14.7 %

PTP 4.5 -15% 5.4 5.3

EPS 0.02 -33% 0.02 0.03

DPS

Source : OP and FactSet

Q3/2016e

F-Secure

Finland/Software & Computer Services Analyser

SOFTWARE & COMPUTER SERVICES

F-Secure (Accumulate) Q3 results matched expectations and a technical guidance upgrade

Growth momentum is building up

The facts: F-Secure’s sales in Q3 were slightly soft compared to expectations.

The organic growth was around 4% whereas in Q2, the company reached growth

at ~7%. The strong growth continued in the corporate market (10% YoY, all

organic) and there was also moderate growth in the consumer market (1%). Q3

EBIT (EUR 4.5m) was clearly below expectations (consensus: EUR 5.8m, OP:

EUR 5.1m) as growth investments weighed on profitability. The company

reiterated its guidance for EBIT in 2016 at EUR 17–21m. F-Secure continues to

invest in accelerating growth also in Q4, and we estimate that the earnings will be

at the lower end of the guidance range (EUR 17.5m).

Our analysis: The big picture of the company is unchanged. The corporate

market is seeing robust growth, and deferred revenue is showing signs of picking

up (Q3 16% YoY vs. Q2 14%). New products have been well received and

according to the company, sales activities related to the RDS product are

increasing rapidly. On the reporting day, F-Secure announced its cooperation with

Salesforce.com, and a new kind of a cloud-based data security will likely be

available to Salesforce’s customers during H1/2017.

The consumer market is stable and we expect its sales to grow by 1–2%.

However, the launch of Sense (a new data security solution for domestic use) is

postponed again, and currently, the service is planned to be launched in H1/2017.

We are optimistic about the demand for the service if F-Secure is able to refine

the product so that it is easy to use. Initially, the service will erode the existing

products in the consumer market but in our opinion, it will offer the company with

an interesting growth opportunity.

Conclusion & Action: We upgrade our forecasts for the corporate market as a

result of the growth in prepayments that was better than anticipated. Following

the revision, our EBIT forecasts for 2017–2018 are upgraded by 7% and 12%.

We expect that the company will reach EBITDA of EUR 35m in 2018 and we

allow EV/EBITDA multiple of 11x to F-Secure (previously 10x) on the basis of the

growth profile. Our target price is upgraded to EUR 3.30 and our recommendation

is now Accumulate.

Analyst(s):

Kimmo Stenvall, OP Corporate Bank

[email protected]

+358 10 252 4561

Accumulate

3.20


3.30


from Neutral

Target price: EUR

Share price: EUR

Reuters/Bloomberg FSC1V.HE/FSC1V FH



Free float 60%









Sales (m) 148 157 168

EBITDA (m) 26 24 29

EBITDA margin 17.4% 15.0% 17.1%

EBIT (m) 20 17 22

EBIT margin 13.4% 11.1% 13.3%


ROCE -348.9% 482.3% 175.1%

Net debt/(cash) (m) (94) (101) (114)


Debt/EBITDA -3.7 -4.3 -4.0


EV/Sales 2.1 2.5 2.3

EV/EBITDA 12.0 16.9 13.4

EV/EBITDA (adj.) 12.0 16.9 13.4

EV/EBIT 15.5 22.8 17.2

P/E (adj.) 34.1 37.4 31.2

P/BV 5.2 5.6 4.6

OpFCF yield 4.5% 2.5% 3.1%


EPS (adj.) 0.08 0.09 0.10

BVPS 0.49 0.57 0.70

DPS 0.12 0.10 0.10

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2.4

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vvdsvdvsdy

F-SECURE OMXH (Rebased)Source: Factset

Shareholders: Siilasmaa Risto 38%; Mutual Pension

Insurance Company Ilmarinen 6%;

Finnish State Pension Fund 5%;

of 59


Ei Towers

Italy/Support Services Analyser

SUPPORT SERVICES

Ei Towers (Accumulate) Growth momentum is building up

9m 2016 Post: solid results

The facts: publication of Q3 2016 results.

Our analysis: Q2 results were pretty in line with our expectations and with the H1

trend on revenues and EBITDA (ex the positive exceptional item). Top-line growth

was driven by M&A, organic growth was basically zero. EBITDA was better than

expected, the opex grew less than half the pace of revenues and labour costs

were down by 2% in 9months. Net debt was slightly higher than our expectations

and was down by EUR 7m vs. the end of June; EIT spent EUR 7m in M&A in Q3

on top of EUR 3m recurring capex.

EI Towers 9m 2016 results

Q3 15a Q3 16e Q3 16a Y/Y 9m 15a 9m 16a Y/Y

Core Revenues 60.5 62.5 62.8 3.8% 179.8 186.6 3.8%

EBITDA adj 29.2 30.4 31.7 8.2% 84.9 92.3 8.7%

Margin 48.4% 48.6% 50.4% 2.1% 47.2% 49.5% 2.2%

EBITDA rep 28.8 30.4 31.2 8.3% 81.8 89.4 9.3%

EBIT 19.2 20.0 21.8 13.3% 54.0 60.6 12.4%

Margin 31.7% 32.1% 34.7% 2.9% 30.0% 32.5% 2.5%

Net Income 11.5 11.9 13.4 16.8% 31.7 36.3 14.3%

Net debt 104 115 118 12.7% 104 118 12.7%

Source: Company data, BANCA AKROS estimates

Outlook. FY 2016 targets were confirmed: c EUR 120m EBITDA, implying just

EUR 5m Y/Y growth, of which a couple of million comes from completed M&A.

We expect EUR 125m based on a more aggressive acquisition campaign; indeed

new acquisitions are not reflected in this outlook yet.

M&A. the updated campaign as disclosed last July included 112 new sites, (94 as

of July) contributing an annual EBITDA of EUR 2.7m (EUR 2.2m), at a cost

(Enterprise value) of EUR 21.6m (EUR 18m). The implied multiple was 8x

EV/EBITDA vs. 10x of EIT.

Shareholder remuneration. EIT set its maiden dividend policy with a target of

100% pay-out on net income for the years 2016 to 2018. EIT board also

authorized a buy-back of up to 5% of the company capital; today it has acquired c

0.6% of the outstanding shares. This remuneration is consistent with small M&A

campaign. The target leverage is 2.5x debt/EBITDA.

Conclusion & Action: Solid set of results, guidance confirmed, estimates

unchanged. We confirm our positive rating.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Accumulate

42.70


55.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg EIT.MI/EIT IM



Free float 58%









Sales (m) 245 250 275

EBITDA (m) 113 125 139

EBITDA margin 46.2% 50.0% 50.7%

EBIT (m) 74 85 99

EBIT margin 30.1% 34.0% 36.2%


ROCE 6.6% 7.1% 8.7%





EV/Sales 7.1 5.0 4.4

EV/EBITDA 15.4 9.9 8.7

EV/EBITDA (adj.) 15.2 9.9 8.7

EV/EBIT 23.6 14.6 12.1

P/E (adj.) 34.2 23.6 19.7

P/BV 2.8 1.8 1.8

OpFCF yield 1.1% 1.7% 7.1%


EPS (adj.) 1.74 1.81 2.16

BVPS 21.62 23.43 23.79

DPS 0.00 1.80 2.15

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vvdsvdvsdy

EI TOWERS FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Mediaset 40%; Mr Falciai 1.80%;

of 59


Fiera Milano

Italy/Support Services Analyser

SUPPORT SERVICES

Fiera Milano (Accumulate) 9m 2016 Post: solid results

Improvement expected in Q3 2016

The facts: Fiera Milano is due to report its third quarter results today.

Our analysis: we summarize our preview in the following table:

Q3-15 Q3-16e Y/Y 9M-15 9M-16e Y/Y

Revenues 46.8 43.4 -7.4% 228.4 182.0 -20.3%

EBITDA -9.5 -5.4

17.2 15.3 -11.2%

margin -20.4% -12.5%

7.5% 8.4%

EBIT -12.2 -8.0

0.6 5.8

margin -26.1% -18.4%

0.2% 3.2%

PBT -14.1 -8.5

-3.4 5.2


We expect the company’s third quarter results, normally very weak because of a

unfavourable seasonality, to show a smaller loss compared to Q3 2015; this is

mainly the result of the cost saving plans the company has put in place in the last

few quarters.

Conclusion & Action: we expect the company’s results to show a sizeable

improvement compared to Q3 2015. Recommendation and target confirmed.

Analyst(s):


[email protected]

+39 02 4344 4240

Accumulate

1.51


2.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg FIMI.MI/FM IM



Free float 25%









Sales (m) 337 239 308

EBITDA (m) 38 8 34


EBIT (m) 12 (6) 21

EBIT margin 3.6% nm 6.8%


ROCE 9.2% -3.8% 14.7%

Net debt/(cash) (m) 12 21 (9)

Net Debt/Equity 0.1 0.3 -0.1

Debt/EBITDA 0.3 2.7 -0.3


EV/Sales 0.4 0.4 0.3

EV/EBITDA 3.9 13.8 2.4

EV/EBITDA (adj.) 3.9 13.8 2.4

EV/EBIT 12.4 nm 3.9

P/E (adj.) nm nm 8.4

P/BV 2.0 1.4 1.2

OpFCF yield 17.5% -7.4% 26.6%


EPS (adj.) 0.02 (0.06) 0.18

BVPS 1.16 1.09 1.27

DPS 0.00 0.00 0.00

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vvdsvdvsdy

FIERA MILANO FTSE Italy STAR (Rebased)Source: Factset

Shareholders: Ente Autonomo Fiera 62%; Camera di

Commercio, Industria, Artigianato e

Agricoltura di Milano 7%; Others 6%;

of 59


Spanish Telecommunications

Analyser

TELECOMMUNICATIONS

Improvement expected in Q3 2016 SPAIN: Orange changes its commercial strategy

The facts: Orange Spain announced repositioning its convergent offer focused

on high-end.

Our analysis: “Canguro” tariffs have been renamed “Love”, including new

services but maintaining pries. The offers are: “Love Familia Esencial” (2

mobile lines + FttH 300Mb EUR76.95/month, FttH 50Mb EUR64.95/month),

“Love Familia Sin Límites” (2 mobile lines + FttH 300Mb EUR91.95/month, FttH

50Mb EUR79.95/month) and a bond “Love Datos”. The last offer is an

additional 2GB mobile data extendable to 7Gb available for the prior previous

offers mentioned.

The common denominator in these packages is mobile data can be shared by

various family members and have a 3 month promotion period with a 50%

discount over the total price. We recall that in ORA football is paid apart and

implies an additional EUR9.95/month (the league/The Match/Copa del Rey)

and EUR5/month for BeIN Sports (Champions).

Both tariffs are available with symmetric optic fibre of 50Mbps or 300Mbps, 4G+

mobile technology and Orange TV (Netflix free during 3 months when

Films+Series is subscribed).

The main difference with peers is that with ORA clients can decide not to

subscribe Orange TV in the convergent packages and/or subscribe the

football package giving customers capacity to choose. On the other hand,

the number of channels offered is much less than Telefonica’s Fusión (all

convergent packages include football except the basic Fusión Contigo (50-

300Mb).

Conclusion: High-end competition increases against TEF with ORA’s

more flexible packages. MasMovil’s market nitch remains untouched

considering traditional MRO’s high prices.

In general we could say that the main points in favour of the three large MRO’s

high-end (FTTH 300Mbps symmetrical) are: Movistar (Fusión; contents/TV,

greater FTTH coverage); Vodafone (One more Gb in mobile data) and Orange

(Love: versatile when choosing the bundle). The prices are relatively similar if

we consider the characteristics of each package.

NB: 83% of ORA Spain’s fixed BB base was convergent at 9m’16, +2.4pp Y/Y.

In Spain, the French operator has captured +194k BB customers with FTTH

technology in 3Q’16 (share 30%, 9m homes passed, 2.5x in a year) and 1.41m

accumulated. Fibre represented 36% of the total fixed BB base and grew

+21pp in one year (bearing in mind the inorganic growth due to the acquisition

of Jazztel).

---------- Stoxx Telecommunications,


Analyst(s):

Victor Peiro Pérez, GVC Gaesco Beka

[email protected]

+34 91 436 7812

Eduardo Garcia Arguelles, GVC Gaesco Beka

[email protected]

+34 914 367 810

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vvdsvdvsdy

of 59


Vodafone

United Kingdom/Telecommunications Analyser

TELECOMMUNICATIONS

Vodafone (Accumulate) SPAIN: Orange changes its commercial strategy

H1 2016 Pre: we expect good results

The facts: H1 2016 preview (publication on November 15).

Our analysis: We expect service revenue trend to remain close to 2% Y/Y

growth on organic basis (cons. +1.9%), vs. +2.2% in Q1. The management has

already anticipated a modest slow-down in the quarter (drag on roaming, tough

comps in South Africa and Spain), which should lead to further acceleration in

Q3. By country, we expect modest deviation in most European operations, with

Italy probably improving by 50bp Q/Q (+1.2% in Q1), extrapolating Wind results,

Spain slightly worse (+1.3% in Q1) due to company commercial policies, UK likely

improving as the billing and migration issues have been addressed and Germany

in line with the +1.6% of the previous quarter. A further slow-down in India (from

+6.4%) is generally expected given the pre-empting pricing initiatives for the entry

of Jio last month. In Turkey, we wonder about the impact of the recent unrest on

trading conditions (+19.5% in Q1). FX Impact. Vodafone has moved to Euro

reporting since the publication of Q1 2016/17. The depreciation of the Pound (-

15.5% Y/Y average in Q2) just impacts the reported figures of the UK unit, which

accounts for just 13.5% of groups revenues and 10.8% of EBITDA. We note that

other currencies are still down Y/Y vs. the EURO but definitely improving on a

sequential basis from Q1 (TRL, Rupee and especially the Rand which was down

21% Y/Y in Q1). We expect EBITDA margin to be stable or slightly up,

Vodafone is targeting a solid underlying growth on a full-year basis which be

worth more than double the negative impact of regulation (H1 already reflects in

full the roaming effect) and increased technology costs. The focus is on UK where

the already low margin (21.7% last year) could be further pressured (hopefully still

above 20%). Italy should be stable also looking at the results of Wind and

Fastweb. Spain is affected by content costs and could be down by 1/2pp from

26.5% of H1 15/16. We expect a strong FCF in the region of EUR 2bn (it was

EUR 0.7bn negative last year), as Vodafone has completed its Spring project in

March 2016 and is now targeting "mid-teens" capex/sales ratio vs. 21/22% in the

past couple of years. We expect net debt in the region of EUR 39bn, up by EUR

2.1bn vs. the March 31 level, taking into account EUR 2.8bn dividend and EUR

0.79bn spectrum disbursement in Turkey. As announced in early October, VOD

has spent further EUR 2.74bn for Indian spectrum which will be booked in H2.

Vod H1 2016/17 preview (management view)

H1

2015/16a

H2

2015/16a

YTM

2016

H1

2016/17e

Revenues 28,151 27,779 55,930 27,112

EBITDA reported 8,039 7,801 15,840 7,817

Margin 28.6% 28.1% 28.3% 28.8%

adj operating profit 2,281 1,974 4,255 2,247

Adjusted net income 928 914 1,842 867

EPS adj 3.50 3.40 6.90 3.25

DPS 5.11 10.52 15.63 5.27

Capex (excl Spectrum) -5,149 -6,514 -11,663 -4,400

FCF** -752 2,135 1,383 2,044

Net debt 39,249 36,897 36,897 38,988

Source: Company data, ESN estimates (*) excluding spectrum

Full-year guidance. The guidance for the YTM 2017 was reiterated with Q1 KPIs

publication last July and includes: organic EBITDA +3/6%, to EUR 15.7/16.2bn;

Capex/sales ratio in the "mid-teens", FCF >EUR 4.0bn. The co intends to

increase DPS going forward, from the baseline level of EUR 14.48c in the YTM

2016.

Conclusion & Action: Solid results expected. We remain positive on the stock.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Accumulate

217.50


250.00



Target price: GBp

Share price: GBp

Reuters/Bloomberg VOD.L/VOD LN

Market capitalisation (GBPm) 57,701


Free float 100%



Price high 12 mth (GBp) 239.70

Price low 12 mth (GBp) 200.20





Sales (m) 55,464 54,411 55,476

EBITDA (m) 15,840 16,099 16,577

EBITDA margin 28.6% 29.6% 29.9%

EBIT (m) 4,195 4,319 4,888

EBIT margin 7.6% 7.9% 8.8%

Net Profit (adj.)(m) 1,842 1,622 2,093

ROCE 3.3% 3.8% 4.4%

Net debt/(cash) (m) 36,897 31,203 31,893




EV/Sales 2.1 1.8 1.8

EV/EBITDA 7.3 6.2 6.1

EV/EBITDA (adj.) 7.3 6.2 6.1

EV/EBIT 27.4 23.2 20.6

P/E (adj.) 41.3 39.9 30.9

P/BV 0.9 0.8 0.8

OpFCF yield -5.9% 16.0% 6.4%


EPS (adj.) 0.07 0.06 0.08

BVPS 3.11 3.03 2.94

DPS 0.16 0.16 0.17

160

170

180

190

200

210

220

230

240


vvdsvdvsdy

VODAFONE Stoxx Telecommunications (Rebased)Source: Factset

Shareholders:

of 59


EDP

Portugal/Utilities Analyser

UTILITIES

EDP (Accumulate) H1 2016 Pre: we expect good results

9M16 results in line with expectations

The facts: Yesterday after the market close EDP published the 9M16 results and

today will hold a conference call at 11.30 GMT. Overall the results were in line

with our forecasts with the Brazilian unit contribution ahead of expectations.

Our analysis: In the 9M16 consolidated EBITDA dropped 3% YoY to EUR

2,893m. Excluding net one-off impacts YoY adjusted EBITDA grew by 10% YoY

reflecting a higher contribution from the liberalized activities (strong hydro

resources and price volatility), renewables and EDP Brasil (+19% YoY in local

currency and +4% YoY in EUR terms with a negative impact from the forex

evolution).

Notwithstanding the decrease net debt and in the average cost of debt from 4.7%

in 9M15 to 4.5% in 9M16 net financial results increased 1% to EUR 635m,

namely due to lower financial income related to regulatory receivables (-EUR 48m

YoY) and to impairments in the BCP stake (EUR 31m).

Net profit dropped 16% to EUR 615m. If adjusted for extraordinary items

registered the bottom-line would have improved by 17% YoY in the 9M16 to EUR

667m.

Total capex in the 9M16 was EUR 1,160m vs EUR 1,218m in the 9M15; the net

investments dropped 53% YoY from EUR 1,069m to due to the cash-in of the

asset rotation deals at EDPR’s level.

The net debt was EUR 15,9bn as of September 2016, down EUR 1,417m since

the FY2015 corresponding to a net debt/EBITDA of 4.2x. Excluding regulatory

receivables the adjusted net debt/EBITDA is 3.9x.

Conclusion & Action: No surprises from this set of results that were in line with

forecasts. Despite the non-recurrent events that affect YoY comparisons we

consider that the diversified profile of EDP should be highlighted with the growth

in renewables and in liberalized activities compensating the decline in other

areas. Additionally we underline that at current market prices the company

presents a dividend yield of 6.6%.

Analyst(s):

Helena Barbosa, Caixa-Banco de Investimento

[email protected]

+351 21 389 6831

Accumulate

2.91


3.65



Target price: EUR

Share price: EUR

Reuters/Bloomberg EDP.LS/EDP PL



Free float 58%









Sales (m) 15,517 15,672 15,829

EBITDA (m) 3,924 3,643 3,776

EBITDA margin 25.3% 23.2% 23.9%

EBIT (m) 2,443 2,163 2,264

EBIT margin 15.7% 13.8% 14.3%


ROCE 6.0% 5.3% 5.6%

Net debt/(cash) (m) 18,026 17,870 17,367




EV/Sales 2.1 1.9 1.9

EV/EBITDA 8.1 8.3 7.9

EV/EBITDA (adj.) 8.1 8.3 7.9

EV/EBIT 13.1 14.0 13.1

P/E (adj.) 13.3 12.4 11.7

P/BV 1.4 1.2 1.2

OpFCF yield 21.8% 10.9% 14.3%


EPS (adj.) 0.25 0.23 0.25

BVPS 2.37 2.42 2.48

DPS 0.19 0.19 0.19

EUR m 9M15 9M16 YoY 9M16e Dev %

EBITDA 2,991 2,893 -3% 2,876 1%

LT Contracted Generation 466 395 -15% 405 -2%

Renew ables 782 847 8% 857 -1%

Liberalised Activities Iberia 276 458 66% 462 -1%

Regulated Netw orks Iberia 810 749 -8% 746 0%

Brazil 655 464 -29% 436 6%

Others & Adjustments 2 -21 n.m -30 -32%

Depreciation & Provisions -1,067 -1,100 3% -1,114 -1%

EBIT 1,924 1,793 -7% 1,762 2%

Financial Results -626 -635 1% -623 2%

Other Financials -25 -3 -88% -5 -40%

EBT 1,273 1,155 -9% 1,134 2%

Taxes -236 -300 27% -295 2%

Extraord. Contribution -61 -61 0% -59 0%

Minority Interests -240 -179 -26% -161 11%

Net Profit 736 615 -16% 619 -1%

2.50

2.60

2.70

2.80

2.90

3.00

3.10

3.20

3.30

3.40


vvdsvdvsdy

EDP Stoxx Utilities (Rebased)Source: Factset

Shareholders: China Three Gorges 21%; Capital Group

Companies 10%; Oppidum 7%; Senfora

4%; BCP Group 2%; Sonatrach 2%;

Qatar Investment 2%; José de Mello

of 59


Snam

Italy/Utilities Analyser

UTILITIES

Snam (Neutral) 9M16 results in line with expectations

On the gas!

The facts: Snam and Italgas have confirmed the efficacy of the demerger and the

consequent start of trading of the ordinary shares of Italgas on the MTA

(Electronic Share Market) from 7th November 2016.

Our analysis: CONSOB (the Italian market watchdog) has provided its green light

and thus the listing is due to take place next Monday. Both Snam and Italgas will

be included in the main Italian index (FTSE MIB). Therefore, the index is going to

be composed of 41 companies instead of 40.

The next index review is due to take place on 19th

December. We believe the

Index will remain made of 41 members until that date.

Conclusion & Action: we continue to believe in the strong rationale of the spin-

off, all to the benefit of both companies: for Snam, the spin-off provides the

company with additional fire-power to follow its international aim (debt/total assets

at around 49% with the possibility to increase it to about 55%); for Italgas, the

spin-off is due to provide the company with the independence needed to freely

face the gas tender process (debt/total assets at about 59%).

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Neutral

4.53


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 8.5 8.4

EV/EBITDA 10.8 11.1 10.9

EV/EBITDA (adj.) 10.8 11.1 10.9

EV/EBIT 15.5 16.8 16.5

P/E (adj.) 14.4 16.0 14.9

P/BV 2.4 2.2 2.1

OpFCF yield 4.4% 2.7% 4.0%


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 59


Terna

Italy/Utilities Analyser

UTILITIES

Terna (Neutral) On the gas!

We expect resilient results in 9M 2016 Y/Y

The facts: Terna is due to release its 9M 2016 results today.

Our analysis: Terna ought to post slightly improving results YoY:

EURm 9M 15A 9M 16E Y/Y

Revenues 1,517 1,549 2.1%

Regulated revenues 1,261 1,309 3.8%

Dispatching activities + other regulated 106 104 -1.9%

Non-regulated revenues 138 125 -9.4%

IFRIC 12 13 11 -15.4%

EBITDA 1,161 1,164 0.3%

EBITDA margin 76.5% 75.1%

EBIT 799 762 -4.6%

Pre-tax 682 701 2.8%

Net Profit 455 473 4.0%


Results ought to be affected by the lower allowed return set by the Authority. It is

also worth noting that AEEGSI has set 2016 reference-regulated revenues at

nearly EUR 1,800m. On this basis we derived regulated revenues of EUR

1,390m, i.e. roughly 75% of the total for 9M 2016 (the binomial tariff entails the

equal distribution of revenues throughout the year). On top of this we have to

consider the contribution of FS network (EUR 30m) and other regulated revenues

for about EUR 20m. We also remind readers that Terna is almost immune to the

volume dynamics (it accounts for a maximum of 10% of the regulated revenues,

i.e. EUR 180m of the tariff is exposed to the volume dynamic). In the first nine

months of 2016 volumes were down by around 3.1% YoY. The impact is around

EUR 4.2m.

EBITDA ought to be affected by higher costs (FS network impact for around EUR

42m on a yearly basis as set by AEEGSI, while Tamini ought to account for

roughly EUR 79m in 9M 16). These negatives are due to be partially offset by the

efficiency programme the company is successfully carrying on. This explains the

different EBITDA margin YoY.

EBIT ought to be hit by higher depreciation YoY (EUR 402m vs. EUR 362m). This

is mainly due to the investments made and the impact of FS (this ought to

account for around EUR 17m, i.e. EUR 674m RAB for 29 years).

Net profit should be up YoY, notwithstanding the decreasing EBIT trend

expected YoY. In fact, we are projecting nearly EUR 61m of financial charges vs.

EUR 117m posted in 9M 2015. Tax rate ought to be almost flat YoY at 33%.

Net debt should reach around EUR 7.9bn, down vs. around EUR 8.2bn posted as

at the end of H1 16. According to our estimates, the average cost of debt in 9M

16 was around 1.3% (it was 2.4% in 2015 and the company guidance points to an

average of about 1.5% in 2016). Based on our estimates, Terna invested circa

EUR 520m in 9M 2016 vs. EUR 702m in 9M 2015.

Interim dividend. Terna ought to announce an interim dividend of about EUR

0.07 per share (flat YoY). The dividend policy points to a 3% CAGR over 2015-

2019. The yield is about 1.6% at the current market price.

Conclusion & Action: we confirm our neutral stance on Terna, we continue to

appreciate the management quality and the company solidity, but the high

premium the company is trading at (based on our estimated around 35% vs. year-

end expected equity RAB) are affecting the stock appeal in our view.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Neutral

4.22


4.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg TRN.MI/TRN IM



Free float 70%









Sales (m) 2,082 2,097 2,185

EBITDA (m) 1,539 1,517 1,604

EBITDA margin 73.9% 72.4% 73.4%

EBIT (m) 1,022 987 1,055

EBIT margin 49.1% 47.0% 48.3%


ROCE 5.5% 5.1% 5.5%

Net debt/(cash) (m) 8,003 8,306 8,438




EV/Sales 8.6 8.1 7.9

EV/EBITDA 11.6 11.3 10.7

EV/EBITDA (adj.) 11.6 11.3 10.7

EV/EBIT 17.5 17.3 16.3

P/E (adj.) 16.1 14.8 13.3

P/BV 2.9 2.4 2.3

OpFCF yield 0.2% 1.2% 3.3%


EPS (adj.) 0.30 0.29 0.32

BVPS 1.65 1.74 1.85

DPS 0.20 0.21 0.21

3.8

4.0

4.2

4.4

4.6

4.8

5.0

5.2


vvdsvdvsdy

TERNA Stoxx Utilities (Rebased)Source: Factset

Shareholders: Cassa Depositi e Prestiti 30%;

of 59


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

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Volkswagen EQB Semapa CBI Ferratum EQB General Industria ls M em(*)

B anks M em(*) Ssab OPG Finecobank BAK 2G Energy EQB

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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

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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

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Kotipizza OPG Caf GVC Ramirent OPG Eni BAK

M elia Hotels International GVC Ctt CBI Royal Bam Group NIBC Galp Energia CBI

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Opap IBG Hhla EQB Saint Gobain CIC Hellenic Petro leum IBG

Snowworld NIBC Logwin EQB Salini Impregilo BAK M aurel Et Prom CIC

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Trigano CIC Allianz EQB Srv OPG Petrobras CBI

of 59


Qgep CBI Wcm Ag EQB Enav BAK Falck Renewables BAK

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Saipem BAK Alten CIC Besi NIBC Red Electrica De Espana GVC

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Technip CIC Amadeus GVC Ericsson OPG Snam BAK

Tecnicas Reunidas GVC Assystem CIC Gemalto CIC Terna BAK

Tenaris BAK Atos CIC Gigaset EQB

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Basic Net BAK Econocom CIC Teleste OPG

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Geox BAK Esi Group CIC Acotel BAK

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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

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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

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List of ESN Analysts (**)

Ari Agopyan CIC +33 1 53 48 80 63 [email protected] Victoria Kruchevska (CFA,FRM) EQB +49 69 5 89 97 416 [email protected]

Artur Amaro CBI +351 213 89 6822 [email protected] Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 [email protected]

Helena Barbosa CBI +351 21 389 6831 [email protected] Konstantinos Manolopoulos IBG +30 210 817 3388 [email protected]

Javier Bernat GVC +34 91 436 7816 jav [email protected] Dario Michi BAK +39 02 4344 4237 [email protected]

Dimitris Birbos IBG +30 210 81 73 392 [email protected] Marietta Miemietz CFA EQB +49-69-58997-439 [email protected]

Agnès Blazy CIC +33 1 53 48 80 67 [email protected] José Mota Freitas, CFA CBI +351 22 607 09 31 [email protected]

Charles Edouard Boissy CIC +33 01 53 48 80 81 [email protected] Henri Parkkinen OPG +358 10 252 4409 [email protected]

Rafael Bonardell GVC +34 91 436 78 171 [email protected] Victor Peiro Pérez GVC +34 91 436 7812 [email protected]

Louise Boyer CIC +33 1 53 48 80 68 [email protected] Francis Prêtre CIC +33 4 78 92 02 30 [email protected]

Giada Cabrino, CIIA BAK +39 02 4344 4092 [email protected] Francesco Previtera BAK +39 02 4344 4033 francesco.prev [email protected]

Arnaud Cadart CIC +33 1 53 48 80 86 [email protected] Jari Raisanen OPG +358 10 252 4504 [email protected]

Niclas Catani OPG +358 10 252 8780 [email protected] Hannu Rauhala OPG +358 10 252 4392 [email protected]

Pierre Chedeville CIC +33 1 53 48 80 97 [email protected] Matias Rautionmaa OPG +358 10 252 4408 [email protected]

Emmanuel Chevalier CIC +33 1 53 48 80 72 [email protected] Eric Ravary CIC +33 1 53 48 80 71 [email protected]

David Consalvo CIC +33 1 53 48 80 64 [email protected] Iñigo Recio Pascual GVC +34 91 436 7814 [email protected]

Edwin de Jong NIBC +312 0 5508569 [email protected] Gerard Rijk NIBC + 31 (0)20 550 8572 [email protected]

Martijn den Drijver NIBC +312 0 5508636 [email protected] André Rodrigues CBI +351 21 389 68 39 [email protected]

Christian Devismes CIC +33 1 53 48 80 85 [email protected] Jean-Luc Romain CIC +33 1 53 48 80 66 [email protected]

Andrea Devita, CFA BAK +39 02 4344 4031 [email protected] Jochen Rothenbacher, CEFA EQB +49 69 58997 415 [email protected]

Sebastian Droste EQB +49 69 58 99 74 34 [email protected] Vassilis Roumantzis IBG +30 2108173394 [email protected]

Enrico Esposti, CIIA BAK +39 02 4344 4022 [email protected] Sonia Ruiz De Garibay GVC +34 91 436 7841 [email protected]

Rafael Fernández de Heredia GVC +34 91 436 78 08 [email protected] Antti Saari OPG +358 10 252 4359 [email protected]

Enrico Filippi, CEFA BAK +39 02 4344 4071 [email protected] Paola Saglietti BAK +39 02 4344 4287 [email protected]

Gabriele Gambarova BAK +39 02 43 444 289 [email protected] Francesco Sala BAK +39 02 4344 4240 [email protected]

Eduardo Garcia Arguelles GVC +34 914 367 810 [email protected] Holger Schmidt, CEFA EQB +49 69 58 99 74 32 [email protected]

Alexandre Gérard CIC +33 1 53 48 80 93 [email protected] Cengiz Sen EQB +4969 58997 435 [email protected]

Philipp Häßler, CFA EQB +49 69 58997 414 [email protected] Pekka Spolander OPG +358 10 252 4351 [email protected]

Simon Heilmann EQB +49 69 58 997 413 [email protected] Kimmo Stenvall OPG +358 10 252 4561 [email protected]

Dr. Knud Hinkel EQB + 49 69 58997 419 [email protected] Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 [email protected]

Marcell Houben NIBC +31 20 550 8649 [email protected] Luigi Tramontana BAK +39 02 4344 4239 [email protected]

Carlos Jesus CBI +351 21 389 6812 [email protected] Johan van den Hooven NIBC +312 0 5508518 [email protected]

Mark Josefson EQB +4969-58997-437 [email protected] Kévin Woringer CIC +33 1 53 48 80 69 [email protected]

(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts

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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: 4 November 2016 9:20am CET First date and time of dissemination: 4 November 2016 9:24am CET

Disclaimer: These reports have been prepared and issued by the Members of

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respect of any errors or omissions or for any losses or consequential

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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/

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