Exane 2
Exane 2
06 MARCH 2013
SIGNIFICANT CHANGES
Rating
LARGE CAPS
ABF
TP
EPS % ch.
%ch.
13e
14e
(=) X (-) 29
(+)
(5)
(5)
Brembo
(+)
27
(8)
Elia
(=)
(2)
Pace
(=)
TF1
(+)
Ansaldo STS
(+)
(7)
(5)
Steria
(+)
(6)
(6)
Elekta
(1)
BEIERSDORF AG (+)
Q412 results and 15 Questions for Management
RESULTS
There were some interesting observations during the Q4 presentation on current and forthcoming
innovations, and we get the sense that this is a true turnaround. Whereas sell-siders like us would
like more margin, now, CEO Heidenreich does not work on the sell-side. For this turnaround to be
sustainable, it needs to be top-line driven. The 16% margin will follow. Beiersdorf has all the makings
of being the next Henkel or Estee Lauder: a poor track record but with a new management team that
finally realises the clear potential. We see a material rebound in organic sales growth and material
expansion in margins in the quarters/years ahead. Near-term, the shares could pause here.
MORRISON (-)
Unrealistic to emerge unscathed from a perfect storm
AGENDA
MEETINGS
Millicom / Nordea...
DIVIDENDS
document
Morrison has a lot on its plate: trading is lagging the competition by a distance, sales are
haemorrhaging to the discounters, the store of the future is seemingly underwhelming and
convenience and on-line offerings have to be built. Investors need a firm base to forecasts and
reassurance that management has a coherent plan. We fear Morrison will be insufficiently bold on
the former and will struggle to communicate the latter. The commitment to grow the DPS by 10%
again in 2013/14e offers some support in a c.5% yield but, for us, the shares are best avoided.
KEY PUBLICATIONS
LARGE CAPS
ELEKTA (+): Ambitious but believable guidance - Fundamentals still valid
WOOD GROUP (+): Good results and solid 2013 guidance
INVESTMENT DAILY
06 MARCH 2013
PDF
Report
Target price
EPS 13e
(=) X (-)
29%
3%
Rating
Food & HPC
Mkt cap (GBPbn / EURbn)
Free float (GBPbn / EURbn)
EV (GBPbn / EURbn)
Financials
EPS, Adjusted (p)
EPS, IBES (p)
Net dividend (p)
Sales (GBPm)
EBITA, Adj. (GBPm)
Net profit, Adj.(GBPm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
EPS 14e
Underperform
Underperform
14.7 / 17.1
6.6 / 7.7
16.3 / 18.9
09/12
09/13e
09/14e
09/15e
87.2
87.2
28.5
94.7
95.3
31.2
104.3
105.5
34.4
120.0
116.2
39.6
12,252
1,077
688
11.1
0.7
13,156
1,154
747
11.3
0.6
14,240
1,258
823
11.8
0.4
15,322
1,400
947
12.8
0.1
09/12
09/13e
09/14e
09/15e
13.7
2.4
4.6
0.9
7.6
10.4
1.5
19.7
1.7
2.6
1.2
10.5
14.1
2.1
17.9
1.8
3.7
1.1
9.5
12.7
2.0
15.6
2.1
5.0
1.0
8.4
11.1
1.9
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI Europe
Rel. Food & HPC
2
(1)
(1)
6
1
4
27
11
13
59
26
35
Jeff Stent
(+44) 207 039 9469
[email protected]
James Wyatt
(+44) 203 430 8421
[email protected]
Eamonn Ferry
(+44) 207 039 9404
[email protected]
James Bushnell
(+44) 207 039 9409
[email protected]
INVESTMENT DAILY
06 MARCH 2013
PDF
BEIERSDORF AG (+)
Food & HPC - Germany | BEI GY - BEIG.DE
Postview
Target price
EPS 13
EPS 14e
(3%)
Rating
Food & HPC
Mkt cap/Free float (EURbn)
EV (EURbn)
Financials
12/12p
12/13e
12/14e
12/15e
2.06
2.11
0.70
2.43
2.40
0.70
2.88
2.69
0.84
3.30
2.96
0.99
6,040
735
468
28.1
-
6,389
849
551
32.8
-
6,814
973
654
38.4
-
7,254
1,091
748
43.4
-
12/12p
12/13e
12/14e
12/15e
25.8
1.3
2.8
1.7
11.3
13.7
6.0
27.7
1.0
3.6
2.0
12.7
15.1
7.6
23.3
1.2
4.2
1.8
10.9
12.7
7.3
20.4
1.5
4.8
1.6
9.4
10.9
6.9
Valuation metrics*
Outperform
Underperform
15.3 / 6.0
12.9
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI Europe
Rel. Food & HPC
1
(1)
0
3
(1)
2
10
3
5
41
16
27
Eamonn Ferry
(+44) 207 039 9404
[email protected]
Summary
In summary, a sizeable miss on margin, EBIT and EPS in Q412, although this
was largely caused by a one-off provision wrt. 'old' Chinese hair care products
that will be returned by the trade as the new range is launched.
News
We detail the main newsworthy items that may not have been gleaned from a
quick read of the results release. We would highlight in particular CEO
Heidenreichs EUR30m exposure to changes in Sales and EBIT in the
Consumer division in the years ahead.
Estimates / Target price
We tweak down our FY13 EPS (3%) to take account of a slightly lower margin
assumption and a slightly higher tax rate. We leave our EPS estimates for all
other years unchanged. Our target price of EUR70 also remains unchanged.
Investment Thesis
We get the sense here that this is a true turnaround. While sell-siders like us
would like more margin, now, Heidenreich does not work on the sell-side. For
this turnaround to be sustainable, it needs to be top-line driven. The 16%
margin will follow. Beiersdorf has all the makings of being the next Henkel or
Estee Lauder: a poor track record but with a new management team that finally
realises the clear potential. We see a material rebound in organic sales growth
and material expansion in margins in the quarters/years ahead. Near-term, the
shares could pause here.
15 Questions for Management
Why, given that Consumer LFL sales expanded close to +7% in two quarters of
2012 and close to +9% in another, did you not handily beat consensus margin
expectations? The GM in your Consumer division is in the high-60s after all:
where is the leverage?
Jeff Stent
James Bushnell
James Wyatt
INVESTMENT DAILY
06 MARCH 2013
PDF
MORRISON (-)
Food Retail - United Kingdom | MRW LN - MRW.L
News
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Underperform
Neutral
5.9 / 6.9
5.9 / 6.9
8.4 / 9.8
01/13e
01/14e
01/15e
01/16e
26.0
26.5
11.8
24.4
26.4
13.0
25.2
27.5
13.3
27.0
27.4
14.2
17,834
966
649
8.8
1.7
18,009
918
584
8.0
1.9
18,596
941
595
8.0
1.8
19,219
987
636
8.2
1.7
01/13e
01/14e
01/15e
01/16e
10.7
4.3
0.5
0.5
6.6
9.1
1.1
10.9
4.9
2.5
0.5
6.4
9.2
1.0
10.5
5.0
5.2
0.5
6.2
8.9
0.9
9.9
5.3
5.8
0.4
5.9
8.5
0.9
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI Europe
Rel. Food retail
(1)
2
0
4
2
2
(1)
(13)
(11)
(6)
(18)
(18)
John Kershaw
+44 203 430 8422
[email protected]
Andrew Gwynn
+44 203 430 8438
[email protected]
So much to do and say but investors need a firm floor to profits and broad
reassurance
With trading lagging the competition by a distance, sales haemorrhaging to the
discounters, the store of the future seemingly underwhelming and with
convenience and on-line offerings to build, Morrison has a lot on its plate. There
is plenty of explaining to do but management must avoid drowning in the detail
at the FY results on 14 March. Investors need a firm base to forecasts and
reassurance that management has a coherent plan. We fear Morrison will be
insufficiently bold on the former and will struggle to communicate the latter. The
commitment to grow the DPS 10% again in 2013/14E offers some support in a
c5% yield but, for us, the shares remain best avoided.
What cost to repel the discounters, recoup lost share and build
convenience and on-line?
Investors will want to understand how Morrison sets about stabilising trading
and providing solutions to the discounters threat whilst building a multi-channel
offering and generating greater customer loyalty (insight). However, the market
will want credible answers to why EBITDAR margins as high as Tescos should
be secure given Morrisons underperformance in a sector suffering excess
capacity addition and given perhaps cGBP20-25m extra start-up costs to incur
(on-line and convenience) in 2013/14. GBP300m of cost savings will help, but
we think consensus for c2.5% EBIT (post start-up cost) decline in FY14 looks
optimistic we are c5% below. On the positive, we think these pressures will
result in a further cutting in Morrisons new space ambitions.
How to position the brand?
We think management now appreciates the brand risks looking anachronistic
without a coherent on-line grocery offering and expect to hear more on a
national solution and of how it will knit into a multi-format estate. Perhaps more
pressing is how management looks to position the brand that is in danger of
going too up-market with its store of the future conversions (30% of selling
area). Adverts fronted by Ant & Dec may temporally attract mass-appeal but we
look for more on how Morrison wins back its differentiation with Market Street
and fresh food provenance, whilst re-emphasising its value credentials to keep
the discounters at bay. It is possible but will take time and likely will need
retrospective tweaks to the future-store model and margin investment.
INVESTMENT DAILY
06 MARCH 2013
PDF
ELEKTA (+)
Healthcare Providers & Services - Sweden | EKTAB SS EKTAb.ST
Postview
Target price
EPS 12
EPS 13
(5%)
(8%)
(5%)
Rating
Healthcare Providers & Services
Mkt cap (SEKbn / EURbn)
Free float (SEKbn / EURbn)
EV (SEKbn / EURbn)
Financials
EPS, Adjusted (SEK)
EPS, IBES (SEK)
Net dividend (SEK)
Sales (SEKm)
EBITA, Adj. (SEKm)
Net profit, Adj.(SEKm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Outperform
Neutral
36.0 / 4.3
34.5 / 4.1
38.1 / 4.6
04/12
04/13e
04/14e
04/15e
3.03
3.20
0.28
3.42
3.83
1.26
4.44
4.60
1.60
5.35
5.41
1.92
9,048
1,726
1,135
19.8
1.4
10,133
1,973
1,324
18.5
1.0
11,490
2,507
1,735
22.2
0.5
12,985
2,975
2,102
25.2
0.1
04/12
04/13e
04/14e
04/15e
23.7
0.4
1.9
3.3
15.7
17.2
4.7
27.7
1.3
3.1
3.8
17.8
19.3
4.9
21.4
1.7
4.3
3.3
13.8
14.9
4.5
17.7
2.0
5.2
2.8
11.3
12.2
4.1
1w
1m
3m
12m
(3)
(4)
(4)
(5)
(6)
(6)
(6)
(7)
(11)
15
2
5
Performance (%)
Absolute
Rel. MSCI SMID
Rel. Healthcare Providers
Romain Zana
(+33) 1 44 95 58 79
[email protected]
John Aldersley (Marketing analyst)
Julien Dormois
Strong miss on Q3 figures Sales and EBIT respectively 11% and 36%
below expectations
Q3 cc. order growth of +6% was not so bad (108% for Cons.Exane) and
implied further market share gain over Varian. But sales were weak primarily
due to postponed business in Middle East, wait-and-see attitude of US clients
(waiting for budget agreement / reimbursement rates). In all, organic sales
growth was -2% in Q3 but +9% over 9M12/13 (+1% in Q1; +27% in Q2).
Recurring EBIT was down 36% y/y (of which 8% from FX) mainly reflecting a
lack of volume. Net income was impacted by a one-off of EUR15m in
associated company (government project in Ghana).
Q4 guidance highly ambitiousbut believable
Despite the weak Q3, FY guidance was only revised by 3%, mainly to reflect the
recent currency volatility and cautious demand in the US. The >15% growth in
l.c. on both sales and recurring EBIT (with 3% negative impact from FX) implies
a strong Q4 of 18% organic growth and >35% EBIT growth. With the backlog
strong, the company is confident it can reach this target. It is hard to appreciate
the visibility that company has on Q4; however, it is worth noting that its track
record in guiding for Q4 (after 9M) has been spotless over the past ten years
(see Figure 4). Several arguments plead for a catch-up: 1) business
seasonality; 2) catch-up of brachytherapy sales (bundled to LINACs); 3) roll-out
of the new Versa HD LINAC (more efficient / 30% less power consumption,
etc.). Cash conversion target of >70% accordingly reiterated (44% over
9M12/13).
Investment case remains valid as fundamentals are solid and Elekta is
gaining market share
It would be unfair to say that we are not a bit nervous about the Q4 target.
However, we are convinced by the steady fundamentals of the radiotherapy
market (610% growth duopoly market; high medical need and increasing
penetration) and Elektas positioning (>30% of sales from EMs; m.s. gain over
leader Varian; great innovation cycle; potential Brazilian incremental
opportunity).
Outperform reiterated Optimistic EPS have been cut by 85% for 04/13e
and 04/14e
To match guidance, consensus will need to cut its estimates by roughly 34%.
The stock has fallen 7% over the past two weeks on cautious previews.
INVESTMENT DAILY
06 MARCH 2013
PDF
Postview
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Outperform
Neutral
4.1 / 2.7
4.0 / 2.6
4.3 / 2.8
12/12p
12/13e
12/14e
12/15e
50.4
0.8
53.4
10.7
65.0
1.0
65.9
12.4
76.7
1.2
75.0
13.6
82.2
1.2
81.0
15.0
6,821
461
298
12.8
0.3
7,594
549
366
14.6
0.0
8,336
636
433
16.2
-
8,752
676
463
16.8
-
12/12p
12/13e
12/14e
12/15e
15.0
1.4
0.7
0.7
9.1
10.0
1.8
11.7
1.6
6.5
0.6
7.1
7.8
1.6
9.9
1.8
8.3
0.5
5.9
6.4
1.5
9.2
2.0
9.8
0.4
5.2
5.6
1.3
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI Europe
Rel. Oil & Gas
(5)
(3)
(4)
(7)
(6)
(9)
(2)
(6)
(12)
1
7
(12)
Alexandre Marie
(+44) 207 039 9427
[email protected]
INVESTMENT DAILY
06 MARCH 2013
PDF
Postview
Target price
Rating
Capital Goods
Mkt cap/Free float (EURbn)
EV (EURbn)
Financials
EPS, Adjusted (EUR)
EPS, IBES (EUR)
Net dividend (EUR)
Sales (EURm)
EBITA, Adj. (EURm)
Net profit, Adj.(EURm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
EPS 13
EPS 14
(7%)
(5%)
Outperform
Outperform
1.1 / 0.7
0.8
12/12
12/13e
12/14e
12/15e
0.47
0.49
0.18
0.54
0.54
0.19
0.63
0.59
0.22
0.68
0.63
0.24
1,248
117.1
75.7
-
1,332
128.4
85.8
-
1,466
148.5
100.1
-
1,557
161.9
109.2
-
12/12
12/13e
12/14e
12/15e
13.0
2.9
4.3
0.6
5.2
6.2
(15.0)
13.3
2.6
4.8
0.6
5.9
6.5
(46.0)
11.4
3.1
7.8
0.5
4.7
5.2
(88.1)
10.5
3.3
9.9
0.5
4.0
4.4
(52.1)
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI SMID
Rel. Capital Goods
(1)
(5)
(4)
(4)
(10)
(9)
6
(4)
(3)
14
(6)
(2)
Giuseppe Marsella
(+39) 02 89 63 17 20
[email protected]
Michele Baldelli
INVESTMENT DAILY
06 MARCH 2013
PDF
News
Target price
EPS 12
EPS 13e
NM
Rating
Banks
Mkt cap/Free float (EURbn)
Financials
Outperform
Outperform
2.2 / 2.1
12/12p
12/13e
12/14e
12/15e
(0.25)
(0.31)
0.04
4.97
3.63
0.00
0.13
0.13
0.11
5.13
3.79
0.04
0.21
0.21
0.17
5.32
3.98
0.05
0.24
0.24
0.24
5.51
4.17
0.06
234.9
235
6,686
3.6
9.8
370.5
371
7,026
5.4
9.6
430.5
431
7,358
6.0
9.4
12/12p
12/13e
12/14e
12/15e
0.23
0.32
0.46
0.22
0.0
-
9.2
0.24
0.32
0.41
0.32
3.3
30.0
5.8
0.23
0.31
4.1
23.8
5.0
0.22
0.29
4.9
24.6
Valuation metrics*
P/E (x)
P/BVPS (x)
P/Tangible BVPS (x)
- High (x)
- Low (x)
Net yield (%)
Payout (%)
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI Europe
Rel. Banks
(14)
(12)
(14)
(15)
(15)
(16)
5
(2)
0
(23)
(33)
(31)
Andrea Vercellone
(+44) 203 430 8424
[email protected]
Colin Hector (Marketing analyst)
Alastair Macintosh (Marketing analyst)
Daniel Davies
Andreas Hakansson
Santiago Lpez Daz
Abhishek Parthasarathy
Tom Rayner
Guillaume Tiberghien
Jag Yogarajah
INVESTMENT DAILY
06 MARCH 2013
PDF
BREMBO (+)
Automotive - Italy | BRE IM - BRBI.MI
Postview
Target price
EPS 13
27%
(8%)
Rating
Automotive
Mkt cap/Free float (EURm)
EV (EURm)
Financials
EPS, Adjusted (EUR)
EPS, IBES (EUR)
Net dividend (EUR)
Sales (EURm)
EBITA, Adj. (EURm)
Net profit, Adj.(EURm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
EPS 14e
Outperform
Neutral
732 / 300
1,070
12/11
12/12
12/13e
12/14e
0.58
0.66
0.30
0.89
0.84
0.40
0.94
0.98
0.41
1.26
1.15
0.45
1,255
73.0
37.6
8.9
2.3
1,389
89.2
57.8
13.2
2.1
1,500
99.6
61.5
11.2
1.8
1,649
129.2
82.5
14.4
1.3
12/11
12/12
12/13e
12/14e
14.0
3.7
(6.9)
0.7
6.0
12.1
1.5
9.4
4.8
6.4
0.6
5.2
10.1
1.4
11.9
3.6
4.4
0.7
5.7
10.7
1.6
8.9
4.1
10.5
0.6
4.5
7.9
1.5
Performance (%)
Absolute
Rel. MSCI SMID
Rel. Automotive
1w
1m
3m
12m
1
2
0
6
5
3
14
5
6
18
9
4
Michele Baldelli
(+39) 02 89 63 17 26
[email protected]
Giuseppe Marsella
FY12 results slightly better than expected NWC management the bright
spot
Top-line growth (+10.7% for FY12 vs. +9.4%e) and margins were slightly ahead
of our expectations (EBITDA margin at 12.4% vs. 12.3% expected). Tax rate
was 6% instead of the normalized level (25%) due to one offs (use of Italian and
Polish tax assets). Net debt was better than expected at EUR320.7m (vs.
EUR349m expected) thanks to a very tight control of the net working capital.
Proposed dividend is EUR40cents/share, with a yield of 4%.
2013 guidance does not surprise consensus, but we find it to be
conservative
Brembo expects top line growth of 7%/9% in 2013 (consensus +6%, Exane
+8%) and an EBITDA margin similar to the one recorded in 2012 (12.4%). We
find the margin guidance to be a bit conservative and we expect 12.7% EBITDA
margin in 2013 (consensus is at 12.9%).
EPS revised down by 8% in 2013e and up by +1% in 2014e
We revised down our 2013e EPS estimates due to the higher D&A expected
and the slightly lower EBITDA margin (12.7% vs. 13.1% previously) due to the
ongoing ramp-up costs of the Czech and Chinese plants, which are taking
longer to break even than previously expected. We have slightly increased our
EPS for 2014 on the back of a higher margin assumption as the company is
fairly confident of restoring a 14% EBITDA margin by 2014 with the current
production footprint.
Outperform reiterated TP raised from EUR10.4 to EUR13.2 a structural
growth story
Brembo is one of the few structural growth stories in the European auto
suppliers industry due to its good positioning (i.e. premium) and competitive
product offering (i.e. lightweight callipers). We increase our TP to EUR13.2
(from EUR10.4) as we roll our valuation over to 2014 figures (a year when all
the plants are expected to reach full profitability). We apply the average
between a multiple based methodology (historical avg. EV/EBIT and EV/CE
ratios) and a DCF (WACC at 11%). We believe that the growth story of Brembo
should also continue beyond 2014 (+8.5% sales CAGR in 2015-16) and for this
reason we think that applying historical average multiples is still reasonable.
INVESTMENT DAILY
06 MARCH 2013
PDF
ELIA (=)
Utilities - Belgium | ELI BB - ELI.BR
Postview
Target price
EPS 13
EPS 14
9%
2%
(2%)
Rating
Utilities
Mkt cap/Free float (EURbn)
EV (EURbn)
Financials
12/11
12/12
12/13e
12/14e
2.29
1.47
2.58
2.57
1.47
2.48
2.38
1.47
2.45
2.47
1.47
1,278
308.0
137.5
4.4
5.7
1,310
305.6
155.0
3.9
6.4
1,382
347.8
149.0
4.4
5.8
1,400
345.1
147.3
4.2
6.1
12/11
12/12
12/13e
12/14e
12.8
5.0
5.6
3.4
9.8
14.2
0.9
12.2
4.7
(13.8)
3.7
10.5
15.6
0.9
13.5
4.4
2.2
3.6
9.6
14.2
0.9
13.7
4.4
(5.8)
3.7
10.0
15.0
0.9
Valuation metrics*
Neutral
Outperform
2.0 / 0.9
5.0
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Performance (%)
Absolute
Rel. MSCI SMID
Rel. Utilities
1w
1m
3m
12m
(1)
(4)
(3)
(2)
(5)
(7)
3
4
(5)
10
11
(6)
INVESTMENT DAILY
06 MARCH 2013
PDF
PACE (=)
IT Hardware - United Kingdom | PIC LN - PIC.L
Postview
Target price
EPS 13
EPS 14
7%
5%
7%
Rating
IT Hardware
Mkt cap (USDbn / GBPm)
Free float (USDbn / GBPm)
EV (USDbn / GBPm)
Financials
EPS, Adjusted (GBP)
EPS, Adjusted (USD)
EPS, IBES (GBP)
Net dividend (GBP)
Sales (USDm)
EBITA, Adj. (USDm)
Net profit, Adj.(USDm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Neutral
Underperform
1.0 / 683
1.0 / 683
1.1 / 731.1
12/12
12/13e
12/14e
12/15e
0.21
0.33
0.20
0.03
0.30
0.45
0.26
0.03
0.35
0.52
0.28
0.05
0.35
0.52
0.22
0.06
2,403
155.0
103.1
16.0
1.4
2,487
199.2
142.8
23.9
0.3
2,538
224.1
164.7
28.6
-
2,542
224.7
165.1
30.9
-
12/12
12/13e
12/14e
12/15e
6.1
2.1
30.6
0.3
4.8
5.4
1.2
7.6
1.5
18.4
0.4
5.0
5.5
1.8
6.6
2.1
16.2
0.4
3.9
4.3
1.7
6.6
2.4
18.0
0.3
3.2
3.5
1.5
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI SMID
Rel. IT Hardware
(2)
(1)
(2)
1
0
(2)
24
(1)
9
165
121
125
Alexandre Faure
(+44) 207 039 9443
[email protected]
Cash generation is the main positive surprise Pace targets net cash
position by December
Unsurprisingly following its positive pre-announcement on January 10, Pace this
morning released an uneventful set of results for Fiscal 12. The major surprise
was very strong cash generation with FCF reaching USD183m (Vs USD175m+
pre-announced) thanks to good working cap management and tight capex
control. However, the main unknown was still 2013 guidance: Pace expects flat
sales and c.7.5% adj. EBITA margin, both in line with consensus. Importantly,
Pace sees strong FCF generation continuing this year, leading to a net cash
position by year-end.
Europe will continue to weigh on 2013s performance
Although Pace will lose its exclusivity on high-end boxes at Comcast and
DirecTV over the course of the year, we feel confident it will maintain its lead on
the next generation of such platforms whilst expanding its high-end knowhow to
US Tier-2 CATV providers in H2, in partnership with Tivo. We thus see further
growth this year in North America set-top boxes from a high base. We also
expect LatAm to confirm the rebound shown in H2 12 while Rest of World
should recover from a low base. However, Europe will remain an area of
weakness with further decline over the next twelve months until Paces recent
wins (Get, Telenet) translate into shipments and revenues. We believe a
number of important contracts throughout Europe are up for renewal this year
(VMED, Ono, UPC) which could lead to major wins for Pace, further
strengthening revenue potential in 2014.
We tweak our estimates to reflect lower capitalised R&D and lower tax rate
We have slightly raised our top line estimates on US strength, which fully offsets
a somewhat higher OPEX base. Paces management is now very focused on
limiting the number of projects under development and making sure of their
future benefits, which prompts us to slightly reduce the net development costs
we expense through the P&L. As a reminder, we fully expense (capitalised)
development costs. Finally, we understand some tax optimisation effort is
underway, hence our lower tax rate assumption (from 30% to 26-27%). These
all bring our 2013/14 Exane BNPP-adjusted EPS up 5%/7% to 45p/52p. Our
DCF-based TP edges up 7% to 245p. Neutral.
Alexander Peterc
(+44) 207 039 9413
[email protected]
Nav Sheera (Marketing analyst)
Jerome Ramel
INVESTMENT DAILY
06 MARCH 2013
PDF
Postview
Target price
Rating
Building Materials
Mkt cap (DKKbn / EURbn)
Free float (DKKbn / EURbn)
EV (DKKbn / EURbn)
Financials
EPS, Adjusted (DKK)
EPS, IBES (DKK)
Net dividend (DKK)
Sales (DKKm)
EBITA, Adj. (DKKm)
Net profit, Adj.(DKKm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
EPS 13
EPS 14
(3%)
(2%)
Outperform
Outperform
14.6 / 2.0
8.6 / 1.2
14.5 / 1.9
12/12
12/13e
12/14e
12/15e
38.3
35.7
10.2
43.7
41.3
13.1
49.6
46.9
14.9
57.9
59.2
17.4
14,664
1,221
828.4
8.2
0.1
15,106
1,347
945.3
8.5
0.0
15,786
1,502
1,072
8.9
0.0
16,844
1,753
1,253
10.1
-
12/12
12/13e
12/14e
12/15e
14.2
1.9
6.1
0.8
5.1
9.6
1.1
15.5
1.9
2.3
1.0
6.1
10.7
1.3
13.7
2.2
2.1
0.9
5.6
9.6
1.2
11.7
2.6
5.9
0.8
4.8
7.9
1.1
Performance (%)
1w
1m
3m
12m
Absolute
Rel. MSCI SMID
Rel. Building Mat.
(5)
(6)
(5)
3
(3)
0
11
0
4
22
12
7
Yassine Touahri
(+44) 207 039 9523
[email protected]
Paul Roger
(+44) 203 430 8415
[email protected]
Rohit Bhatia
INVESTMENT DAILY
06 MARCH 2013
PDF
STERIA (+)
News
Target price
Rating
IT Services
Mkt cap/Free float (EURm)
EV (EURm)
Financials
EPS, Adjusted (EUR)
EPS, IBES (EUR)
Net dividend (EUR)
Sales (EURm)
EBITA, Adj. (EURm)
Net profit, Adj.(EURm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
EPS 13e
EPS 14e
(6%)
(6%)
Outperform
Neutral
369 / 215
707
12/11
12/12
12/13e
12/14e
2.61
0.35
2.21
2.36
0.20
2.06
2.14
0.20
2.43
2.54
0.25
1,748
127.3
86.3
10.2
1.8
1,827
114.3
74.8
10.1
1.9
1,798
121.3
62.9
9.1
0.8
1,845
135.1
74.0
10.0
0.5
12/11
12/12
12/13e
12/14e
6.8
2.0
4.0
0.5
6.1
7.5
1.1
5.9
1.5
(1.7)
0.5
5.8
7.7
1.0
5.9
1.7
7.1
0.4
4.6
5.8
0.8
5.0
2.1
11.6
0.4
4.0
5.0
0.7
Performance (%)
Absolute
Rel. MSCI SMID
Rel. IT Services
1w
1m
3m
12m
(10)
(14)
(13)
(10)
(14)
(13)
(5)
(10)
(13)
(23)
(38)
(34)
Brice Prunas
(+44) 207 039 9539
[email protected]
Josep Bori
INVESTMENT DAILY
06 MARCH 2013
PDF
TF1 (+)
Update
Target price
EPS 13e
EPS 14e
6%
4%
9%
Rating
Media
Mkt cap/Free float (EURbn)
EV (EURbn)
Financials
EPS, Adjusted (EUR)
EPS, IBES (EUR)
Net dividend (EUR)
Sales (EURm)
EBITA, Adj. (EURm)
Net profit, Adj.(EURm)
ROCE (%)
Net Debt/EBITDA, Adj. (x)
Valuation metrics*
P/E (x)
Net yield (%)
FCF yield (%)
EV/Sales (x)
EV/EBITDA (x)
EV/EBITA (x)
EV/CE (x)
Outperform
Outperform
1.8 / 0.9
1.6
12/11
12/12
12/13e
12/14e
0.93
0.55
0.71
0.64
0.55
0.74
0.68
0.50
0.74
0.65
0.50
2,620
283.0
198.8
11.6
0.1
2,621
230.8
149.7
9.7
-
2,541
247.5
157.5
10.3
-
2,663
245.2
156.8
10.5
-
12/11
12/12
12/13e
12/14e
12.3
4.8
2.9
0.9
6.7
8.6
1.5
10.6
7.3
14.8
0.5
4.0
5.7
0.9
11.3
5.9
9.1
0.6
5.1
6.6
1.1
11.4
5.9
11.2
0.6
4.8
6.2
1.0
Performance (%)
Absolute
Rel. MSCI SMID
Rel. Media
1w
1m
3m
12m
0
(3)
(3)
(4)
(8)
(8)
6
(1)
(3)
(1)
(20)
(15)
Charles Bedouelle
(+44) 207 039 9482
[email protected]
Adrien de Saint Hilaire
(+44) 207 039 9499
[email protected]
We present the feedback from our roadshow with TF1s CFO last week, and
reiterate our positive stance on the shares despite the tougher ad trends.
Ad trends are worse than expected, but audiences are solid
TF1 confirmed Q1 for the core channel could be down more than the 10% seen
in Q3 12 (no number given). We thus cut Q1 to -14%, below our initial -89% as
current market weakness is exacerbated by some competitors slashing prices.
But January-February are small months, and we have no visibility for March and
comps improve Q2. We expect -8% for FY, (implying -6.5% for Q2Q4) without
pricing in the current solid audiences.
No upgrade to guidance, but cost cutting is a clear focus
Some were disappointed that the cost-cutting guidance was not raised at the FY
results, but this seemed too optimistic as the plan was only announced late in
2012. We note that TF1 is trying its best to accelerate cost cutting (more in
2013 than initially planned). Importantly, TF1s CFO highlighted that, beyond the
structural cost improvement plan, the group was also taking more classic cost
reduction measures in light of the worse-than-expected revenues (no number
given).
Looking beyond the core channel
The CFO stressed that TF1 is focusing on developing new areas (digital,
Eurosport, new channels) and leveraging the core channels content and brand
in other business lines, which are now all profitable and growing. This limits
cash return potential in 2013, but we are hopeful for 2014.
Reiterate Outperform, with updated EUR12.2 TP showing c.45% upside
Our raised EPS forecasts (+4% for 2013e, +9% for 2014e), despite the lower ad
forecasts, reflect better cost management (including in 2012). This puts us well
above the consensus, which we think is overlooking 1) the benefit of regulation,
2) one-offs in the 2012 cost base and 3) the cost-cutting potential. Plus, TF1s
valuation is clearly low excluding Eurosport/Diversifications at 0.2x 13e sales, a
fraction of peers multiples.
Sami Kassab
William Packer
INVESTMENT DAILY
06 MARCH 2013
PDF
SEMICONDUCTOR
Priced at 05 March 2013
News
INVESTMENT DAILY
06 MARCH 2013
Back to front page
AGENDA
(2/2)
Company
Price*
TP Upside
Type
Analyst / Phone
Conf. Call
FYPreliminary Results
Agfa-Gevaert
EUR1.50
Amplifon (+)
EUR4.23
EUR4.70 11.2%
FY 2012 Results
R.Zana (+33) 1 44 95 58 79
Bourbon (-)
EUR20.8
EUR20 (3.9%)
FYResults
Preview
CTC Media
USD10.0
Preview
FYResults
FYResults
GBP14.5 22.1%
J.Devevey (+33) 1 42 99 50 51
GEOX (-)
EUR2.46
EUR1.70 (30.9%)
FYResults
Conf. Call
G.Marsella (+39) 02 89 63 17 20
EUR68.7
EUR58 (15.5%)
FYResults
Preview
Inmarsat (=)
FYResults
Preview
EUR3.03
EUR4.80 58.4%
FYResults
EUR11.4
EUR11 (3.7%)
FYResults
Conf. Call
FYPreliminary Results
Manitou (=)
EUR13.7
FYResults
L.Gelebart (+33) 1 44 95 21 56
Millicom (=)
AGM
Investor Day
M.Rey (+33) 1 44 95 69 36
Nordea (-)
SEK76.4
Investor Day
FYPreliminary Results
Panalpina
CHF98.4
FYResults
EUR16 16.8%
SEK68 (10.9%)
SCOR (+)
EUR22.2
Safilo
EUR8.6
FYResults
Verbund (+)
EUR16.4
FYResults
P.Gottschalk (+33) 1 42 99 52 04
Ex date (0.57USD)
Bank of Greece
EUR14.9
EUR17.5
Novozymes
DKK200.3
EUR24 8%
FYResults
T.Jacquet (+33) 1 42 99 51 96
FYResults
EUR22 34.4%
Preview
Ex date (0.4032EUR)
EUR18 2.9%
Ex date (0.352EUR)
Ex date (0.0939GBP)
Stagecoach
EUR3.39
N.Guyon-Gellin (+33) 1 44 95 68 61
Ex date (0.083GBP)
P.Causse (+33) 1 42 99 84 30
FYResults
EUR9.8
Aviva (+)
EUR8.2 (16.3%)
FYPreliminary Results
Betfair (+)
GBP6.9
GBP8.7 26.1%
EUR6.0
EUR5.8 (4%)
FYResults
Carrefour (+)
EUR21.2
EUR22 3.6%
FY 2012 Results
Cementir
EUR2.00
EUR14.0
AGM
M.Desmarais (+33) 1 44 95 58 60
Cobham (=)
FYPreliminary Results
T.Sanson (+33) 1 42 99 24 04
Continental (+)
EUR92.2
EUR105 13.9%
FYResults
R.Freiha (+33) 1 42 99 84 62
Delhaize (=)
EUR37.0
EUR35 (5.4%)
FY 2012 Results
ERG (-)
EUR7.1
EUR5.9 (16.5%)
FYResults
Hannover Re (+)
EUR60.9
EUR63.5 4.2%
FYResults
EUR7.1
EUR8 12.8%
FYResults
L.Gelebart (+33) 1 44 95 21 56
Preview
Preview
FYResults
EUR14 0%
IMI (+)
FYPreliminary Results
JCDecaux (-)
EUR21.0
EUR17 (19%)
FYResults
Lagardre (=)
EUR27.6
EUR29 4.9%
FYResults
Linde (=)
FYResults
Q4Results
V.Meunier (+33) 1 42 99 24 42
Preview
Preview
Preview
INVESTMENT DAILY
06 MARCH 2013
Back to front page
Time CET
Company
Price*
TP Upside
Type
Analyst / Phone
EUR6.9
Recordati
EUR7.6
SBM Offshore
EUR10.8
FYResults
Schroders (=)
FYResults
Stallergnes (=)
EUR50.7
FYResults
N.Guyon-Gellin (+33) 1 44 95 68 61
FYPreliminary Results
TDC (+)
DKK45.6
DKK47 3.1%
AGM
EUR0.57
EUR0.80 40.6%
FYResults
Vicat (-)
EUR45.1
EUR40.5 (10.2%)
FYResults
Wartsila (+)
EUR35.8
EUR38 6.1%
AGM
adidas (+)
EUR71.6
EUR83 15.9%
FYResults
Kone (=)
EUR63.0
EUR60 (4.8%)
EUR60.9
Roche (=)
Ex date (4.7775CHF)
V.Meunier (+33) 1 42 99 24 42
USD38.1
F.Cespedes (+33) 1 42 99 84 93
Teva (+)
*Priced at 05 March 2013
EUR6 (13%)
FYResults
FYResults
EUR51 0.6%
Preview
INVESTMENT DAILY
06 MARCH 2013
Back to front page
Analyst location
As per contact details, analysts are based in the following locations: London, UK for telephone numbers commencing +44; Paris, France +33; Brussels, Belgium +32;
Frankfurt, Germany +49; Geneva, Switzerland +41; Madrid, Spain +34; Milan, Italy +39; New York, USA +1; Singapore +65; Stockholm, Sweden +46
Rating definitions
Stock Rating (vs Sector)
Outperform: The stock is expected to outperform the industry large-cap coverage universe over a 12-month investment horizon.
Neutral: The stock is expected to perform in line with the industry large-cap coverage universe over a 12-month investment horizon.
Underperform: The stock is expected to underperform the industry large-cap coverage universe over a 12-month investment horizon.
Under review: The rating of the stock has been placed under review for following important news. Any possible change will be confirmed as soon as possible.
Sector Rating (vs Market)
Outperform: The sector is expected to outperform the DJ STOXX50 over a 12-month investment horizon.
Neutral: The sector is expected to perform in line with the DJ STOXX50 over a 12-month investment horizon.
Underperform: The sector is expected to underperform the DJ STOXX50 over a 12-month investment horizon.
Key ideas
BUY: The stock is expected to deliver an absolute return in excess of 30% over the next two years. Exane BNP Paribas Key Ideas Buy List comprises selected stocks that meet
this criterion.
Exane
Pursuant to Directive 2003/125/CE and NASD Rule 2711(h)
Unless specified, Exane is unaware of significant conflicts of interest with companies mentioned in this report.
Source: Exane
See www.exane.com/disclosureequitiesuk for details
BNP Paribas
Exane is independent of BNP Paribas (BNPP) and the agreement between the two companies is structured to guarantee the independence of Exane's research, published
under the brand name Exane BNP Paribas. Nevertheless, to respect a principle of transparency, we separately identify potential conflicts of interest with BNPP regarding
the company/(ies) covered by this research document.
Potential conflicts of interest: None.
Source: BNP Paribas
LONDON
Exane Ltd
1 Hanover Street
London W1S 1YZ
UK
Tel: (+44) 207 039 9400
Fax: (+44) 207 039 9440
PARIS
Exane S.A.
16 Avenue Matignon
75008 Paris
France
Tel: (+33) 1 44 95 40 00
Fax: (+33) 1 44 95 40 01
FRANKFURT
Branch of Exane S.A.
Europa-Allee 12, 3rd floor
60327 Frankfurt
Germany
Tel: (+49) 69 42 72 97 300
Fax: (+49) 69 42 72 97 301
GENEVA
Branch of Exane S.A.
Rue du Rhne 80
1204 Geneva
Switzerland
Tel: (+41) 22 718 65 65
Fax: (+41) 22 718 65 00
MADRID
Branch of Exane S.A.
Calle Serrano 73
28006 Madrid
Spain
Tel: (+34) 91 114 83 00
Fax: (+34) 91 114 83 01
MILAN
Branch of Exane S.A.
Via dei Bossi 4
20121 Milan
Italy
Tel: (+39) 02 89 63 17 13
Fax: (+39) 02 89 63 17 01
NEW YORK
Exane Inc.
640 Fifth Avenue
15th Floor
New York, NY 10019
USA
Tel: (+1) 212 634 4990
Fax: (+1) 212 634 5171
SINGAPORE
Branch of Exane Ltd
20 Collyer Quay
#07-02 Tung Centre
Singapore 049319
Tel: (+65) 6212 9059
Fax: (+65) 6212 9082
STOCKHOLM
Representative office of Exane SA
Nybrokajen 5
111 48 Stockholm
Sweden
Tel: (+46) 8 5629 3500
Fax: (+46) 8 611 1802
All Exane research documents are available to all clients simultaneously on the Exane website (www.exanebnpparibas-equities.com). Most published research is
also available via third-party aggregators such as Bloomberg, Multex, Factset, Capital IQ and The Markets.com. Exane is not responsible for the redistribution of
research by third-party aggregators.
Important notice: Please refer to our complete disclosure notice available on www.exane.com/compliance
This research is produced by EXANE SA and / or EXANE LTD (EXANE) on behalf of themselves. EXANE SA is regulated by the "Autorit des Marchs
Financiers" (AMF) and EXANE LTD is regulated by the "Financial Services Authority" (FSA). In accordance with the requirements of FSA COB 7.16.7R and
associated guidances Exanes policy for managing conflicts of interest in relation to investment research" is published on Exanes web site (www.exane.com).
Exane also follows the guidelines described in the code of conduct of the AFEI (Association Francaise des Entreprises d'Investissement) on "managing conflicts of
interest in the field of investment research". This code of conduct is available on Exanes web site (www.exane.com).
This research is solely for the private information of the recipients. All information contained in this research report has been compiled from sources believed to be
reliable. However, no representation or warranty, express or implied, is made with respect to the completeness or accuracy of its contents, and it is not to be relied
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