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ESN Analyser

Investment Research

of 69

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

ESN Analyser

Investment Research

27 October 2016

ESN Top Picks

Roadshows

Corporate Events

Tactical Sector Views

RECOMMENDATION CHANGES

UniCredit downgraded to Accumulate from Buy Possible liability management exercise?

Nordea downgraded to Neutral from Accumulate Increased certainty about dividend but 2017 earnings under pressure

Bittium Corporation downgraded to Accumulate from Buy Q3 preview: Will the Mexsat design project alter H2 profitability?

Vaisala upgraded to Buy from Accumulate Profitability heading towards the target of 15%

Cramo upgraded to Accumulate from Neutral Convincingly controlled earnings growth

Fcc downgraded to Neutral from Accumulate EBITDA and working capital recovering

NEWS BY SECTOR

AEROSPACE & DEFENSE

Lisi (Accumulate) Q3-2016 sales: a gradual increase in growth

AUTOMOBILES & PARTS

Bittium Corporation (Accumulate) Q3 preview: Will the Mexsat design project alter H2 profitability?

ElringKlinger (Neutral) Acquisition of a minority stake in hofer AG

BANKS

Sector News Portuguese Banks: Exposure to Mozambique

Banco Sabadell (Buy) 3Q’16 forecasts: EUR215m (-5.4% Y/Y)

BBVA (Buy) 9M 16 earnings: EUR2,797m (-0.6% adjusted)

BPI (Neutral) 9M16 results: Positive results (NII in Angola and provisions/asset quality in Portugal). ROE at 10.5%

BPI (Neutral) GSM to vote on the sale of 2% of BFA (Angola) to Unitel

CaixaBank (Neutral) 3Q’16 results preview: EUR930m (-6.7% Y/Y)

Deutsche Bank (Neutral) Q3 results above expectations due to lower one-offs

Mediobanca (Accumulate) Q1 results preview

Nordea (Neutral) Increased certainty about dividend but 2017 earnings under pressure

UniCredit (Accumulate) Possible liability management exercise?

BASIC RESOURCES

Acerinox (Buy) Comments from 3Q’16 results presentation

Ence (Buy) 9m’16 results

Europac (Accumulate) Good 9m’16 results

CHEMICALS

Kemira (Accumulate) Defending the margins

ESN Analyser

Investment Research

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ELECTRONIC & ELECTRICAL EQUIPMENT

Kontron (Buy) Weak Q4 guidance but restructuring in focus

Vaisala (Buy) Profitability heading towards the target of 15%

FINANCIAL SERVICES

FinecoBank (Buy) The new cyborg advisory platform became fully operational

FOOD & BEVERAGE

Atria (Accumulate) Q3 results fell short of forecasts, the acquisition price of Well Beef Ltd very cheap

Ebro Foods (Neutral) Good 9m’16 results and 2016 close anticipated

Rémy Cointreau (Neutral) Small acquisition in premium whiskey

FOOD & DRUG RETAILERS

Kesko (Neutral) Earnings outlook improved, a good selling price for grocery trade in Russia

GENERAL INDUSTRIALS

Arcadis (Neutral) CEO steps down; trading update disappointing

Huhtamäki (Accumulate) Earnings missed expectations – focus remains on growth

HEALTHCARE

Amplifon (Accumulate) 9M 16 results: sales and profitability better than expected

Recordati (Accumulate) 9M 16 results preview

INDUSTRIAL ENGINEERING

Kone (Neutral) Alleviation to concerns related to China

Konecranes (Neutral) Weak orders, savings advancing

INSURANCE

Banca Mediolanum (Accumulate) ECB against Fininvest’s significant stake in BMED

MATERIALS, CONSTRUCTION & INFRASTRUCTURE

Abertis (Accumulate) Better profitability and good traffic growth

Cramo (Accumulate) Convincingly controlled earnings growth

Fcc (Neutral) EBITDA and working capital recovering

Ferrovial (Accumulate) Neutral results

MEDIA

Gruppo Ed. L'Espresso (Accumulate) 9m 2016 Post: surprising advertising growth in Q3

Ipsos (Buy) Confirmation of the return to growth with a good Q3-16

Mediaset Espana (Buy) Weak 3Q results, but cost guidance improved

OIL & GAS PRODUCERS

Eni (Buy) Q3 2016 preview: one-offs are due to affect production

Repsol (Buy) Agreement in Bolivia

OIL SERVICES

Technip (Buy) Q3 results better than expected, 2016 outlook raised

Vopak (Buy) Updates estimates and target + VTTI deal read through

ESN Analyser

Investment Research

of 69


SOFTWARE & COMPUTER SERVICES

Altran (Buy) Q3-2016 revenue in line

ICT Group (Accumulate) Ongoing good revenue growth, guidance reiterated

SUPPORT SERVICES

Ei Towers (Accumulate) Q3 2016 Pre: uneventful quarter in sight

Lassila & Tikanoja (Accumulate) Stability is essential

TECHNOLOGY HARDWARE & EQUIPMENT

ASM International (Buy) Q3 numbers ok; outlook weakish

Besi (Neutral) Another strong quarter

Ingenico (Buy) Mixed trends with no improvement in the outlook

SLM Solutions (Buy) Fundamentals now in focus

STMicroelectronics (Neutral) Q3 & 9M 16 release: positive results

TELECOMMUNICATIONS

KPN Telecom (Buy) 3Q16: EBITDA increases YoY but FCF disappoints

Telefonica (Accumulate) Dividend reduced. Results: acceptable

TRAVEL & LEISURE

Int. Airlines Group (Buy) Agreement in principle of the NAPS

UTILITIES

EDP Renováveis (Buy) 9M16 results preview: comparisons affected by positives one offs in the previous year and

increase in financial costs

Terna (Neutral) Not on the seaside this summer

ESN Top Picks

of 69


Blue Chips Top Picks

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

2 6 / 10 / 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y

pr i c e

( D i v .

Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s Eur o

S t ox x

AM ADEUS Spain Sof t ware & Comput er Services Long Buy 43.00 49.20 14% 18/ 08/ 2016 41.96 41.96 2 . 5 % -0.2%

CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 65.70 76.00 16% 17/ 10/ 2016 66.30 66.30 - 0 . 9 % -2.4%

HEI NEKEN Net herlands Food & Beverage Long Buy 76.17 100.00 31% 25/ 05/ 2016 83.08 82.56 - 7 . 7 % -10.4%

I NDI TEX Spain General Ret ailers Long Accumulat e 32.74 36.10 10% 18/ 08/ 2016 30.93 30.93 5 . 8 % 3.1%

J CDECAUX France Media Long Accumulat e 27.04 31.00 15% 17/ 10/ 2016 28.16 28.16 - 4 . 0 % -5.5%

KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.91 3.55 22% 20/ 09/ 2016 2.82 2.82 3 . 2 % 0.3%

NORDEA Finland Banks Long Neut ral 9.75 10.00 3% 03/ 08/ 2016 7.78 7.78 2 5 . 3 % 19.9%

S TORA ENS O Finland Basic Resources Long Accumulat e 8.73 9.30 7% 17/ 10/ 2016 8.16 8.16 7 . 0 % 5.5%

TECHNI P France Oil Services Long Buy 59.19 67.00 13% 18/ 10/ 2016 58.60 58.60 1. 0 % -1.0% source: ESN Members’ estimates

M/S Caps Top Picks

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

2 6 / 10 / 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y pr i c e

( D i v . Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s

Eur o

S t ox x

ACERI NOX Spain Basic Resources Long Buy 11.66 14.00 20% 18/ 08/ 2016 11.71 11.71 - 0 . 4 % -3.1%

ALTRAN France Sof t ware & Comput er Services Long Buy 13.48 15.00 11% 17/ 10/ 2016 13.20 13.20 2 . 1% 0.6%

CAF Spain Indust r ial Transport at ion Long Accumulat e 350.50 390.00 11% 18/ 08/ 2016 342.80 342.80 2 . 2 % -0.5%

DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.45 12.30 30% 22/ 08/ 2016 8.10 8.10 16 . 7 % 13.8%

FORFARM ERS Net herlands Food & Beverage Long Buy 6.82 8.30 22% 28/ 09/ 2016 6.48 6.48 5 . 3 % 2.5%

FUGRO Net herlands Oil Services Long Buy 16.12 19.00 18% 20/ 10/ 2016 15.56 15.56 3 . 6 % 3.3%

J UM BO Greece General Ret ailers Long Buy 12.42 14.99 21% 21/ 10/ 2016 12.62 12.62 - 1. 6 % -1.5%

NH HOTEL GROUP Spain Travel & Leisure Long Buy 4.05 6.80 68% 18/ 08/ 2016 4.00 4.00 1. 3 % -1.4%

NOS Port ugal Telecommunicat ions Long Buy 6.11 7.00 15% 17/ 10/ 2016 5.89 5.89 3 . 7 % 2.2%

OP AP Greece Travel & Leisure Long Buy 7.98 9.60 20% 28/ 06/ 2016 5.98 5.86 3 6 . 2 % 21.7%

RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 12.13 12.00 -1% 20/ 06/ 2016 8.29 8.29 4 6 . 3 % 38.0%

TECHNOGYM It aly Personal Goods Long Buy 4.08 4.95 21% 15/ 06/ 2016 3.78 3.78 8 . 1% -1.8%

THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.68 4.60 72% 22/ 06/ 2016 2.72 2.72 - 1. 5 % -5.7%

YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 27.07 31.30 16% 17/ 10/ 2016 27.82 27.82 - 2 . 7 % -4.2%

source: ESN Members’ estimates

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

Roadshows

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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

ALTRAN ALT FP 27/10/16 Trading Update Q3 2016 Sales conference call

ARCADIS ARCAD NA 27/10/16 Trading Update Q3 2016 Trading statement conference call

AREVA AREVA FP 27/10/16 Trading Update Q3 2016 Sales

ASM INTERNATIONAL ASM NA 27/10/16 Results Q3 2016 Earnings conference call / Webcast

ASPO ASPO FH 27/10/16 Results Q3 2016 Press conference

BBVA BBVA SM 27/10/16 Results Q3 2016 Webcast

BESI BESI NA 27/10/16 Results Q3 2016 Earnings conference call / Webcast

CORP. FINANCIERA ALBA ALB SM 27/10/16 Ex Dividend Date Interim 2016 Ex-dividend date EUR 0.50

ELISA ELISA FH 27/10/16 Capital Markets Day Capital Markets Day

ENCE ENC SM 27/10/16 Results Q3 2016 Earnings conference call / Webcast

IMERYS NK FP 27/10/16 Results Q3 2016 Results

KESKO KESBV FH 27/10/16 Results Q3 2016 Press & analyst meeting / Webcast

LEMMINKÄINEN LEM1S FH 27/10/16 Analyst Meeting Q3 2016 Press & analyst meeting

NATUREX NRX FP 27/10/16 Analyst Meeting Capital Markets Day

NOKIA NOKIA FH 27/10/16 Results Q3 2016 Earnings conference call / Webcast

NORDEA NDA1V FH 27/10/16 Analyst Meeting Q3 2016 Analyst meeting

PKC GROUP PKC1V FH 27/10/16 Results Q3 2016 Press conference

RECORDATI REC IM 27/10/16 Results Q3 2016 Earnings conference call

SCHNEIDER ELECTRIC SE SU FP 27/10/16 Trading Update Q3 2016 Earnings conference call

SU FP 27/10/16 Analyst Meeting Investor Day

STMICROELECTRONICS STM IM 27/10/16 Results Q3 2016 Earnings conference call / Webcast

STM IM 27/10/16 Results Q3 2016 Results

TECHNIP TEC FP 27/10/16 Results Q3 2016 Results

TEC FP 27/10/16 Results Q3 2016 Earnings conference call / Webcast

TELEFONICA TEF SM 27/10/16 Results Q3 2016 Earnings conference call / Webcast

TF1 TFI FP 27/10/16 Results Q3 2016 Earnings conference call / Webcast

VALMET VALMT FH 27/10/16 Results Q3 2016 Earnings conference call / Webcast {simultaneous}

VALMT FH 27/10/16 Analyst Meeting Q3 2016 Press & analyst meeting

VISCOFAN VIS SM 27/10/16 Results Q3 2016 Results

YIT YTY1V FH 27/10/16 Analyst Meeting Q3 2016 Press & analyst meeting {English}

YTY1V FH 27/10/16 Results Q3 2016 Earnings conference call / Webcast {simultaneous}

ESN Tactical Sector Views

of 69


Tactical Sector Allocation Matrix July 2016

SectorCurrent Tactical

ViewAction

Previous

Tactical View

Stoxx 600

Weighting

LATEST REVIEW

DATE

Automobiles & Parts + upgrade = 3% Jul-16

Banks - - 10% Jul-16

Basic Resources = = 2% Jul-16

Chemicals = = 5% Jul-16

Construction & Materials + + 3% Jul-16

Financial Services - dow ngrade = 2% Jul-16

Food & Beverage + + 7% Jul-16

Healthcare + upgrade = 14% Jul-16

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

Insurance - dow ngrade + 6% Jul-16

Media - dow ngrade = 3% Jul-16

Oil & Gas = = 5% Jul-16

Personal & Household Goods + + 9% Jul-16

Real Estate + upgrade - 2% Jul-16

Retail - dow ngrade = 3% Jul-16

Technology + upgrade = 4% Jul-16

Telecommunications = dow ngrade + 5% Jul-16

Travel & Leisure + + 2% Jul-16

Utilities + upgrade - 4% Jul-16

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

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

fundamental view of the relevant ESN sector analyst team

of 69


Lisi

France/Aerospace & Defense Analyser

AEROSPACE & DEFENSE

Lisi (Accumulate) Q3-2016 sales: a gradual increase in growth

Q3-2016 sales: a gradual increase in growth

The facts: Q3-2016 sales: EUR379m, +12% (of which organic growth +6.9%).

Aerospace: Q3 sales: EUR236m (+8.9%, of which organic growth +8.5%)

Auto: Q3 sales: EUR109m (+4.6%, of which organic growth +4.8%)

Medical: Q3 sales: EUR35m (+90%, organic growth +1%).

Our analysis: Sales in the first nine months came out at EUR1,174m, up 7.2% (of

which organic growth +4.6%). Q3 therefore brought an increase in organic growth

after a slow start to 2016. Recap of sales performance in 2016: Q1 +1.8; Q2 +5.4%.

AERO: A sharp ramp-up for the A350 (EUR1m/jet) and in parts for Leap.

Continued decline for Boeing: not yet back to normative levels. Acceleration

and operational efforts in relation to structural components, no halt in

recruitment, settlement of machines: development costs until mid-2017. Q4

and 2017 are both set to be strong periods.

AUTO: Began the year in decline, but Europe now shows growth. New

products: +10%, a record quarter, with a ramp-up in production anticipated for

several prototypes, and order intake to be converted to manufacturing stage.

Confirmation of recovery thanks to the hardware plan. Normative margin of 7%

targeted, which is higher than that mentioned in the report (4%) prepared to

determine an intrinsic value of EUR28.

Medical: First quarter with Remele complete, and new orders, therefore

extension of the Minneapolis plan authorised, while the Caen plant is faring

well.

Conclusion & Action: A very good third quarter, and Q4 and 2017 are set to

show even better results.

A quality stock, whose price has naturally corrected.

Bear in mind that one year ago, sales were falling by -3.1%, and there was a small

adjustment of forecasts.

This year the situation has completely turned around.

Analyst(s):

Agnès Blazy, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 67

Accumulate

27.05

closing price as of 26/10/2016

28.00

Target Price unchanged

Recommendation unchanged

Target price: EUR

Share price: EUR

Reuters/Bloomberg GFII.PA/FII FP

Market capitalisation (EURm) 1,461

Current N° of shares (m) 54

Free float 30%

Daily avg. no. trad. sh. 12 mth 13

Daily avg. trad. vol. 12 mth (m) 477

Price high 12 mth (EUR) 27.15

Price low 12 mth (EUR) 19.04

Abs. perf. 1 mth 12.64%



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

Sales (m) 1,458 1,531 1,608

EBITDA (m) 204 222 247

EBITDA margin 14.0% 14.5% 15.4%

EBIT (m) 146 157 176

EBIT margin 10.0% 10.2% 10.9%

Net Profit (adj.)(m) 82 93 105

ROCE 9.7% 9.9% 10.6%

Net debt/(cash) (m) 157 138 109

Net Debt/Equity 0.2 0.2 0.1

Debt/EBITDA 0.8 0.6 0.4

Int. cover(EBITDA/Fin. int) 33.1 49.8 66.1

EV/Sales 1.1 1.1 1.0

EV/EBITDA 7.6 7.4 6.5

EV/EBITDA (adj.) 7.6 7.4 6.5

EV/EBIT 10.5 10.4 9.1

P/E (adj.) 16.5 15.7 13.9

P/BV 1.7 1.7 1.5

OpFCF yield 3.4% 1.6% 2.3%

Dividend yield 1.4% 1.5% 1.7%

EPS (adj.) 1.52 1.73 1.94

BVPS 14.66 16.00 17.54

DPS 0.39 0.42 0.45

19

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27

28

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

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LISI CAC Small & Mid 190 (Rebased)Source: Factset

Shareholders: CID-Compagnie Industrielle de Delle

55%; VMC-VIELLARD-MIGEON&Cie 6%;

FFP Invest 5%; Treasury shares 3%;

Employees 1.24%;

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Bittium Group

Q3 2015a

M€ OP Cons. Diff. OP Cons. Diff.

Sales 14.8 12.9 15% 0 11.1 0 64 64 0%

EBIT 1.3 0.4 280% # 0.0 0 4 3 28%

EBIT margin 9.0 % 2.7 % 0.0 % # 0.0 % # 6.3 % 4.9 %

PTP 1.5 0.5 240% 0 0.1 0 4.6 3.8 20%

EPS 0.04 0.01 291% 0.00 0.12 0.10 19%

DPS 0.30 0.30 # 0.03 # 0.06 0.07 -12%

Source: OP and FactSet

2016eQ3 2016e

Bittium Corporation

Finland/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Bittium Corporation (Accumulate) Q3-2016 sales: a gradual increase in growth

Q3 preview: Will the Mexsat design project alter H2 profitability?

The facts: Bittium will report its Q3 figures on Thursday, 3 November at 7.00 am

CET. Bittium expects 2016 sales to be above the level of 2015 (EUR 56.8m). It

has no profitability guidance, which the company justifies by its ongoing strategy

process as well as the transaction at the turn of the year concerning tactical

communication systems. The schedule of the transaction is not yet certain.

Our analysis: Bittium's share price has been depressed by the company's

release on the possible impact of the reduced cooperation with Ericsson. Bittium

estimates that if the measures planned by Ericsson are realised in full, the

measures may have a negative impact on Bittium's 2017 sales and EBIT. We do

not expect the decline in the share of Ericsson to have a significant impact on

Bittium's growth drivers. Revenues of over EUR 10m from the design project

concerning Mexsat devices will be recognised this year. The cash flow of design

projects is typically back-end loaded, which is why we expect the project to

support H2. After the termination of the design project, actual deliveries of

equipment will start in 2017. We estimate that the biggest impact from the tactical

communication system deliveries will in any case be seen in 2017 irrespective of

the publication date of the transaction.

In the future, communication systems in the public safety markets will be based

on commercial mobile network technology. We believe that Bittium stands to gain

from this development trend as it has long experience from designing mobile

network solutions. Bittium's potential deals will be large in proportion to its size,

and an individual quarter will therefore be of minor importance in terms of the

future outlook. In quarterly comparison one should that Bittium's earnings are

highly volatile.

Conclusion & Action: Our target price is based on DCF (70%) and peer

company (30%) valuation (P/E and EV/EBITDA). We are assigning more weight

to DCF because the potential arising from large projects is beyond our present

forecast horizon. We have made no changes to our 2017–2018 forecasts and

maintain our target price of EUR 6.60. Due to the share price rise, our

recommendation falls to Accumulate (from Buy).

Analyst(s):

Hannu Rauhala, OP Corporate Bank

[email protected]

+358 10 252 4392

Accumulate

5.97


6.60


from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg BITTI.HE/BITTI FH

Market capitalisation (EURm) 213


Free float 86%





Abs. perf. 1 mth -11.03%




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 1.6 1.5

EV/EBITDA 17.0 10.6 8.8

EV/EBITDA (adj.) 17.0 10.6 8.8

EV/EBIT 55.4 25.4 15.1

P/E (adj.) 0.5 nm 32.9

P/BV 1.8 1.5 1.5

OpFCF yield 3.8% -4.3% 1.0%


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

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

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BITTIUM CORPORATION OMXH (Rebased)Source: Factset

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

Veikkolainen Erkki 4%;

of 69


ElringKlinger

Germany/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

ElringKlinger (Neutral) Q3 preview: Will the Mexsat design project alter H2 profitability?

Acquisition of a minority stake in hofer AG

The facts: ElringKlinger has announced this morning that it has acquired a

strategic 27% minority stake in the engineering company hofer AG. Additionally,

the transaction includes the acquisition of a 53% stake in hofer’s subisidiary

powertrain products GmbH. The price of the transaction is in the double digit EUR

million range. Closing will be in 2017.

Our analysis: hofer AG is an engineering services company, specialised in

powertrain development, mainly for small series production for sports and luxury

cars.

powertrain products GmbH is a production company, which produces the

developments of the mother company in small series production.

The strategic rationale behind the deal makes sense in our view, as it helps

ElringKlinger in getting better and earlier insides into the development of new

powertrain solutions. This is especially important as the company’s product

portfolio is heavily skewed towards products which are not necessary in electrical

cars anymore.

The deal is strategic and will not add much to the P&L in the short term. No

fundamentals were disclosed, but according to the Bundesanzeiger, hofer AG

recorded revenues of EUR 47.7m in FY 2014 and showed an operating result of

EUR 0.4m.

We estimate the price of the transaction to be around EUR 20m, which would

clearly be a strategic price.

Conclusion & Action: We believe that the transaction makes sense for

ElringKlinger. Nonetheless, it will not add much to the P&L in the short term and

also reminds us how important it is for the company to manage the transition

towards electrical drivetrains.

Analyst(s):

Tim Schuldt, CFA, equinet Bank

[email protected]

+49 69 5899 7433

Neutral

15.01


17.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ZILGn.DE/ZIL2 GR



Free float 48%


Daily avg. trad. vol. 12 mth (m) 2,404







Sales (m) 1,507 1,570 1,649

EBITDA (m) 222 239 265

EBITDA margin 14.7% 15.2% 16.1%

EBIT (m) 135 146 169

EBIT margin 9.0% 9.3% 10.2%


ROCE 5.4% 5.4% 6.0%

Net debt/(cash) (m) 487 511 494




EV/Sales 1.4 1.0 1.0

EV/EBITDA 9.6 6.8 6.1

EV/EBITDA (adj.) 9.6 6.8 6.1

EV/EBIT 15.7 11.2 9.6

P/E (adj.) 15.6 9.6 8.2

P/BV 1.8 1.1 1.0

OpFCF yield -4.5% 1.1% 5.5%


EPS (adj.) 1.51 1.57 1.83

BVPS 12.97 14.02 15.34

DPS 0.55 0.50 0.60

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Sep 15 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

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ELRINGKLINGER Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: Lechler Family 52%;

of 69


Portuguese Banks

Analyser

BANKS

Acquisition of a minority stake in hofer AG Portuguese Banks: Exposure to Mozambique

110

120

130

140

150

160

170

180

190

200

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

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The facts: Reportedly (Bloomberg), the Republic of Mozambique is in a “debt

distress” situation according to IMF criteria. On 25 October the local government

disclosed a presentation to creditors´ stating that it will now start conversations

with investors regarding “optimal format for creditors’ engagement” and expects

to reach an agreement in principle with those creditors for a debt resolution

proposal before YE16. Mozambique also stated that its primary objective is to

resume relations with the IMF in order to stabilize the economy and restore

confidence of the international investors. For further details:

http://www.mpd.gov.mz/images/Presentation_by_the_Ministry_of_Economy_an

d_Finance_-_25_October_2016.pdf

Our analysis: We present below some details on the local exposure of the two

listed Portuguese banks. The local operations of those companies differ as the

presence of BCP is related to the 66.7% stake in Millennium Bim (fully

consolidated) while the presence of BPI is related to the 30% stake in Banco

Comercial e de Investimentos (BCI) that is consolidated through the equity

method.

Source: BCP, BPI and CaixaBI Equity Research. Data as of 1H16 and expressed in EUR

m (unless otherwise specified). In the case of BPI (BCI), loans refer to net loans.

Conclusion & Action: Overall, the size of those local banks is small when

compared to the consolidated figures (2.4% of consolidated total assets in the

case of BCP). Moreover, there is no intragroup funding to those local

operations. In terms of their exposure to sovereign debt, and according to their

1H16 results presentations, BCP had a EUR 302m of Mozambican bonds

(available for sale portfolio) while BPI did not report any exposure.

---------- Stoxx Banks,

DJ Stoxx TMI rebased on sector

Analyst(s):

André Rodrigues Caixa-Banco de Investimento

[email protected]

+351 21 389 68 39

Millennium BCP Banco BPI

Local operation Millennium BimBanco Comercial e de

Investimentos (BCI)

Local balance sheet

Total Assets 1,739 1,925

Total loans (gross) 1,044 1,122

Total Customers' deposits 1,290 1,373

NPL ratio 5.4% 1.21% (>90 days; FY15)

NPL coverage 124% 192% (>90 days; FY15)

Local P&L

Total net profit (June 2016) 37 12

Net profit (% stake) 24.5 3.3

RoE 21.1% 20.48% (FY15)

Mozambique (100%) as a % of consolidated:

Total Assets 2.4% n.a.

Total loans (gross) 2.0% n.a.

Total Customers' deposits 2.6% n.a.

Total Risk Weighted Assets (RWAs) 7.0% n.a.

Other information

Branches 170 193

Employees 2,366 3,046

Market share (1H16):

Loans 28.8% 30.5% (May 2016)

Deposits 28.2% 28.6% (May 2016)

Exposure of Portuguese banks

Mozambican sovereign debt (consolidated B/S) 302 0

Book value (% of the stake) 196 46

Risk Weighted Assets (RWAs) 2,707 n.a.

Note: There is no relevant intragroup funding to the local operations

http://www.mpd.gov.mz/images/Presentation_by_the_Ministry_of_Economy_and_Finance_-_25_October_2016.pdf

http://www.mpd.gov.mz/images/Presentation_by_the_Ministry_of_Economy_and_Finance_-_25_October_2016.pdf

of 69


Banco Sabadell

Spain/Banks Analyser

BANKS

Banco Sabadell (Buy) Portuguese Banks: Exposure to Mozambique

3Q’16 forecasts: EUR215m (-5.4% Y/Y)

The facts: Banco Sabadell will release 3Q results tomorrow prior to market

opening and hold the CC at 09:00CET.

Our analysis: We estimate EUR215m for 3Q, 5.4% below 2015.

Consensus

Conclusion: Recommendation reiterated

Analyst(s):

Javier Bernat, GVC Gaesco Beka

[email protected]

+34 91 436 7816

Buy

1.24


1.73



Target price: EUR

Share price: EUR

Reuters/Bloomberg SABE.MC/SAB SM


Current N° of shares (m) 5,566

Free float 85%

Daily avg. no. trad. sh. 12 mth 28,379








Total Revenue (m) 5,593 5,735 5,423

Pre-Provision Profit (PPP) (m) 2,978 2,612 2,408

Operating profit (OP) 1,939 1,473 1,406

Earnings Before Tax (m) 745 897 1,069

Net Profit (adj.) (m) 1,016 686 764

Shareholders Equity (m) 12,731 13,248 13,783

Tangible BV (m) 10,209 10,316 10,958

RWA (m) 88,769 86,000 90,000

ROTE 10.7% 6.7% 7.2%

Total Capital Ratio (B3) 12.9% 13.2% 13.6%

Cost/Income 46.8% 54.5% 55.6%

NPL ratio (gross) 9.8% 7.1% 5.6%

P/PPP 2.8 2.6 2.9

P/E (adj.) 8.1 10.1 9.0

P/BV 0.6 0.5 0.5

P/TBV 0.8 0.7 0.6

Dividend Yield 2.4% 3.5% 4.4%

PPPPS 0.58 0.47 0.43

EPS (adj.) 0.20 0.12 0.14

BVPS 2.49 2.38 2.48

TBVPS 1.99 1.85 1.97

DPS 0.03 0.04 0.05

B SABADELL (EURm) 3Q'16E 3Q'15 2Q'16 Y/Y Q/Q

NII 942 941 969 0.1% (2.8)%

NIM 2.0% 2.0% 2.1% (0.1)% (1.9)%

Other Revenue 234 358 444 (34.7)% (47.4)%

GOP 1,176 1,299 1,413 (9.5)% (16.8)%

Ope expenses (738) (773) (758) (4.6)% (2.7)%

C/ I Ratio 62.7% 59.5% 53.6% 5.4% 17.0%

PPP 438 526 656 (16.6)% (33.1)%

LIC (337) (120) (351) 181% (4.0)%

LIC/ GOP 28.7% 9.2% 24.8% 210% 15.4%

Other (net) (195) 101 78 nm nm

PBT 297 305 226 (2.8)% 31.2%

Net Income (reported) 215 228 173 (5.4)% 24.2%

Estimates GVC Gaesco Beka .TSB since 06.30.18

EURm 3Q'16

NII 943

GOP 1,307

PPP 569

PBT 284

Net Profit 204

Source Inquiry Financial

1.00

1.10

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1.30

1.40

1.50

1.60

1.70

1.80

1.90


vvdsvdvsdy

BANCO SABADELL Stoxx Banks (Rebased)Source: Factset

Shareholders: ITOS Holding 7%; Winthrop Securities

Ltd. 5%; BlackRock 3%; BoD 1.13%;

of 69


BBVA


BANKS

BBVA (Buy) 3Q’16 forecasts: EUR215m (-5.4% Y/Y)

9M 16 earnings: EUR2,797m (-0.6% adjusted)

The facts: in 9m 15, BBVA reported a net profit of EUR2,797bn, 64.3% above

9m’15 and in line with our forecast and the consensus. Adjusting for the impact of

corporate operations, BBVA’s net profit would be similar to that obtained in the

same period 2015 (EUR2.815m).

Our analysis: this result includes the incorporation of Catalunya Banc accounts

since 24.04.15 and the purchase of the 14.89% additional in the Turkish bank

Garanti from the 3Q15.

Efficiency: Sep16 (51.8%) improves the 52.0% of Dic15 of 52% despite the new

incorporations.

Credit quality: The NPL ratio comes to 5.1%, implying a slight improvement over

5.4% at Dec15. NPLK coverage at 72% and CoR improves to 0.9% vs. 1.1% of

Dic15.

Solvency: the CET1 ratio ends at 11.0%, reaching the 2016 goal (includes impact

of 15pbs due to the sovereign rating downgrade of Turkey). For its part, the

leverage ratio stands at 6.1%, one of the highest in the banking industry.

Mexico (41.2% w/profit): records double-digit growth rates, both in loans and

customer funds. The NPL ratio ends at 2.5% and PL coverage is 122%. 9m 16

net profit grows 11.4% y/y to EUR 1.441 m.

Conclusion: first impression positive (CC @ 9:30), after a recovery of the RoTE

9.0% vs 6.4% (Dec15) and the RORWA at 1.26%. Recommendation reiterated.

Analyst(s):


[email protected]

+34 91 436 7816

Buy

6.43


6.70



Target price: EUR

Share price: EUR

Reuters/Bloomberg BBVA.MC/BBVA SM



Free float 96%









Total Revenue (m) 23,366 23,956 25,668



Earnings Before Tax (m) 4,602 6,068 6,851

Net Profit (adj.) (m) 2,701 3,722 4,202


Tangible BV (m) 40,480 43,286 46,531

RWA (m) 401,346 456,729 487,698

ROTE 6.4% 8.9% 9.4%


Cost/Income 43.2% 52.5% 52.3%


P/PPP 3.2 3.7 3.4

P/E (adj.) 15.9 11.2 9.9

P/BV 0.9 0.8 0.8

P/TBV 1.1 1.0 0.9


PPPPS 2.09 1.76 1.89

EPS (adj.) 0.42 0.57 0.65

BVPS 7.43 7.73 8.23

TBVPS 6.36 6.68 7.18

DPS 0.16 0.19 0.24

BBVA (EURm) 9M16 9M15 Y/Y (m) Y/Y (%)

GOP 18,431 17,534 897 5.1%

NII 12,674 12,011 663 5.5%

Fees & Comm. 3,557 3,442 115 3.3%

Trading 1,753 1,558 195 12.5%

Op Expense (9,549) (9,024) (525) 5.8%

Impairments (3,114) (3,283) 169 (5.1)%

% GOP (16.9)% (18.7)% 0 (9.8)%

PBT 5,107 4,335 772 17.8%

Net Inc. (reported) 2,797 1,702 1,095 64.3%

Net Inc. (adjust): 2,797 2,815 (18) (0.6)%

Financial ratios: Sep 2016 Dec 2015 YTDbp YTD (%)

CET1-FL (%) 11.00 10.30 70.0 6.8%

Total capital ratio (%) 15.50 14.40 110.0 7.6%

C /I Ratio (%) 51.80 52.00 (20.0) (0.4)%

NPL Coverage (%) 72.00 74.00 (200.0) (2.7)%

NPL Ratio (%) 5.10 5.40 (30.0) (5.6)%

CoR (%) 0.90 1.10 (20.0) (18.2)%

RoRWA (%) 1.26 0.87 39.0 44.8%

RoTE (%) 9.00 6.40 260.0 40.6%

Source Company

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5


vvdsvdvsdy

BBVA Stoxx Banks (Rebased)Source: Factset

Shareholders: BlackRock 4%;

of 69


BPI

Portugal/Banks Analyser

BANKS

BPI (Neutral) 9M 16 earnings: EUR2,797m (-0.6% adjusted)

9M16 results: Positive results (NII in Angola and provisions/asset quality in Portugal). ROE at 10.5%

The facts: BPI disclosed its 9M16 results yesterday after the market close. Today

the management will host a Conference call with analysts (11:00 Local time).

Our analysis: Consolidated net profit stood at EUR 182.9m in 9M16 (+21.2%

YoY) from the EUR 151m in 9M15. On a quarterly basis the net profit stood at EUR

77m (+27.8% QoQ) and +3% YoY vs. EUR 74.8m of 3Q15. The positive YoY

evolution was mainly due to the growth of the net interest income (+12.7% YoY in

consolidated terms, with +15.4% in the domestic operation) and also to the strong

drop in loan impairments (-53.3% YoY), in spite of the EUR 41.6m (vs. EUR 18m

in 9M15) of “other impairments and provisions” booked in 9M16, including

impairments in bonds of PT Int. Finance (Oi Group) of EUR 18m.

This result was equivalent to an ROE of 10.5% (with 4.1% in Portugal, a net profit

of EUR 57.5m). International units presented a profit of EUR 125.4m (+12% YoY),

an ROE of 38.5% and 68.6% of the consolidated net profit. The domestic NII

continued to benefit from the fall in the cost of term deposits (average rate close to

0% for new deposits originated in September 2016 vs. 0.03% in June). The main

deviation vs. our estimates came from Angola where the NII stood at EUR 96m in

3Q15 (+9.6% QoQ) and c. EUR 11m above our estimate.

In terms of costs, the recurrent figure stood at EUR 498.4m (+0.1% YoY). On the

top of that, BPI booked EUR 50.5m for costs with early retirements (for 276 early

retirements, of which 75 were concluded in 3Q16 and 200 will occur before YE16).

The amount reported as “non-recurring costs” in 9M16 is close to EUR 7m as it

also includes a gain of EUR 43m due to a revision in the Collective Labour

Agreement of the Banking Sector (ACT). Cost-to-income stood at 55.4% in 9M16.

Asset quality - Credit at risk ratio drop by 20bps YoY to 4.6% from 4.8% in 9M15

(-10bps QoQ) with a total coverage by impairments of 85%. In terms of net new

entries (NPL > 90 days) it was visible a strong improvement in 3Q16 with only EUR

8.5m vs. EUR 30.1m in 2Q16. In this context, the cost of credit risk (after

recoveries) drop from 54bps in 9M15 to only 22bps in 9M16, with only 16bps in the

domestic operation and 127bps in the international activity.

Capital - CET 1 ratio fully loaded was at 11.0% (11.4% phasing in) from 9.3% and

10.4%, respectively in September 2015.

Overall, 3Q16 should note be a trigger for BPI. In any case, we have a positive first

impression on these results. NII continued to evolve positively (and above our

estimate), recurrent costs stood stable YoY and loan impairments (namely in

Portugal) were a positive surprise in a context of a FL CET1 ratio of 11.0%. More

details after today’s Conference call.

Analyst(s):

André Rodrigues, Caixa-Banco de Investimento

[email protected]

+351 21 389 68 39

Neutral

1.13


1.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg BBPI.LS/BPI PL



Free float 26%


Total Revenue (m) 1,182 1,169 1,193

Pre-Provision Profit (PPP) (m) 492 484 497

Operating profit (OP) 373 391 413

Earnings Before Tax (m) 407 425 448

Net Profit (adj.) (m) 236 229 245


Tangible BV (m) 2,407 2,546 2,791

RWA (m) 23,294 24,419 25,404

ROTE 10.4% 9.2% 9.2%


Cost/Income 56.7% 56.8% 56.7%


P/PPP 3.2 3.4 3.3

P/E (adj.) 6.7 7.2 6.7

P/BV 0.7 0.6 0.6

P/TBV 0.7 0.6 0.6


PPPPS 0.34 0.33 0.34

EPS (adj.) 0.16 0.16 0.17

BVPS 1.65 1.75 1.92

TBVPS 1.65 1.75 1.92

DPS 0.00 0.00 0.00

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0.90

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1.10

1.20

1.30

1.40

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

vvdsvdvsdy

BPI Stoxx Banks (Rebased)Source: Factset

Shareholders: Caixabank 44%; Santoro 19%; Allianz

8%;

3Q16 3Q15 D YoY 2Q16 D QoQ 9M16 9M15 D YoY 3Q16e D D (%)

Net interest income (narrow sense) 186.8 153.9 21.4% 180.0 3.8% 525.5 466.2 12.7% 176.2 10.6 6.0%

Unit Link products gross margin 3.3 3.7 -10.8% 3.4 -2.9% 10.3 9.1 13.6% 3.4 (.1) -3.4%

Income from securities - - n.m. 3.9 n.m. 3.9 3.6 8.4% - - n.m.

Commissions (deferred cost) 5.3 4.7 12.8% 5.1 3.9% 15.8 14.6 8.7% 5.1 .2 3.7%

Net interest income 195.3 162.3 20.3% 192.4 1.5% 555.6 493.5 12.6% 184.7 10.6 5.7%

Technical result from insurance 5.4 8.2 -34.1% 5.6 -3.6% 18.9 27.6 -31.6% 5.6 (.2) -3.8%

Commissions (net) 81.0 81.7 -0.9% 79.8 1.5% 234.9 237.1 -0.9% 79.5 1.5 1.9%

Results - Financial operations 33.1 58.3 -43.2% 53.3 -37.9% 138.4 153.6 -10.0% 31.8 1.3 4.2%

Operating income and charges (9.2) (3.1) 196.8% (25.5) -63.9% (39.7) (17.3) 129.2% (1.3) (7.9) 625.8%

Net operating income 305.6 307.3 -0.6% 305.6 0.0% 908.0 894.5 1.5% 300.3 5.3 1.8%

Personnel costs (92.8) (94.8) -2.1% (97.3) -4.6% (284.8) (283.9) 0.3% (97.7) 4.9 -5.0%

Non-recurring costs (4.7) (4.6) 2.2% (2.3) 104.3% (7.6) (4.6) 63.2% - (4.7) n.m.

Other administrative expenses (60.4) (60.7) -0.5% (67.1) -10.0% (188.1) (187.7) 0.2% (65.4) 5.0 -7.7%

Depreciation of fixed Assets (8.5) (8.7) -2.3% (8.4) 1.2% (25.5) (26.2) -2.7% (8.4) (.1) 0.8%

Total Expenses (166.4) (168.8) -1.4% (175.0) -4.9% (505.9) (502.5) 0.7% (171.6) 5.2 -3.0%

Operating profit exc. provisions 139.2 138.5 0.5% 130.6 6.6% 402.0 392.1 2.5% 128.7 10.5 8.2%

Recovery of loans written-off 5.9 6.5 -9.2% 3.6 63.9% 14.2 14.3 -0.7% 3.6 2.3 63.0%

Loan provisions and impairments (5.7) (26.5) -78.5% (16.6) -65.7% (53.0) (113.4) -53.3% (17.6) 11.9 -67.5%

Other impairments and provisions (6.0) (2.0) 200.0% (31.5) -81.0% (41.6) (18.0) 131.5% (4.0) (2.0) 50.0%

Profits before taxes 133.4 116.5 14.5% 86.1 54.9% 321.6 274.9 17.0% 110.8 22.6 20.4%

Corporate income tax (16.0) (12.1) 32.2% 1.9 n.m. (37.6) (37.6) -0.1% (13.9) (2.1) 14.8%

Equity-accounted results 4.0 10.4 -61.5% 15.8 -74.7% 25.4 23.2 9.7% 6.4 (2.4) -37.4%

Minorities (44.5) (40.1) 11.0% (43.6) 2.1% (126.5) (109.5) 15.5% (44.8) .3 -0.6%

Net Profit 77.0 74.8 3.0% 60.2 27.9% 182.9 151.0 21.2% 58.5 18.5 31.7%

Accumulated BPI vs. CaixaBIQuarterly

of 69


BPI

Portugal/Banks Analyser

BANKS

BPI (Neutral) 9M16 results: Positive results (NII in Angola and provisions/asset quality in Portugal). ROE at 10.5%

Neutral

1,13


1,20



Target price: EUR

Share price: EUR

Reuters/Bloomberg BBPI.LS/BPI PL

Market capitalisation (EURm) 1.646

Current N° of shares (m) 1.457

Free float 26%

Daily avg. no. trad. sh. 12 mth 2.301


Price high 12 mth (EUR) 1,33

Price low 12 mth (EUR) 0,91

Abs. perf. 1 mth 0,00%




Total Revenue (m) 1.182 1.169 1.193




Net Profit (adj.) (m) 236 229 245

Shareholders Equity (m) 2.407 2.546 2.791

Tangible BV (m) 2.407 2.546 2.791

RWA (m) 23.294 24.419 25.404

ROTE 10,4% 9,2% 9,2%

Total Capital Ratio (B3) 11,1% 11,5% 12,0%

Cost/Income 56,7% 56,8% 56,7%

NPL ratio (gross) 3,6% 3,7% 3,7%

P/PPP 3,2 3,4 3,3

P/E (adj.) 6,7 7,2 6,7

P/BV 0,7 0,6 0,6

P/TBV 0,7 0,6 0,6

Dividend Yield 0,0% 0,0% 0,0%

PPPPS 0,34 0,33 0,34

EPS (adj.) 0,16 0,16 0,17

BVPS 1,65 1,75 1,92

TBVPS 1,65 1,75 1,92

DPS 0,00 0,00 0,00

GSM to vote on the sale of 2% of BFA (Angola) to Unitel

The facts: BPI informed the market that its Board of Directors has requested the

appointment of a General Shareholders Meeting (date to be confirmed) in order to

decide, among others, on the sale of a 2% stake on the share capital of BFA to

Unitel in Angola.

Our analysis: On 7 October, BPI informed the market that Unitel (controlled by

Mrs. Isabel dos Santos) has given its agreement to the proposal presented by BPI

related to Banco de Fomento Angola (BFA) In this context, the two parties

agreed:

The contract for the purchase and sale of BFA shares corresponding to

2% of its share capital (for an amount of EUR 28m). Following this

operation, Banco BPI’s and Unitel’s holdings in BFA’s share capital will

stand at, respectively, 48.1% and 51.9%;

The new shareholder agreement relating to BFA. This shareholder

agreement will come into effect on the date on which the transfer to

Unitel of the 2% shareholding in BFA is completed, without prejudice to

the immediate entry into force of certain rules concerning the

composition of BFA’s governing bodies.

According to BPI statement, this operation (including the change in BFA’s

statutes) is dependent on the authorization from Banco Nacional de Angola (BNA)

and should also be approved by Banco BPI General Shareholders Meeting.

Link to CaixaBank offer on BPI - It is important to recall that this proposal is

accepted in a context where the holding Santoro Finance (2nd largest

shareholder of Banco BPI with a stake of 18.6% and also controlled by Isabel dos

Santos) did not oppose to the removal of voting rights limits from BPI bylaws in

the GSM held on 21 September (essential condition for the success of the offer

presented by CaixaBank to control Banco BPI). In fact, the proposal of Banco BPI

for the sale of the 2% stake of BFA to Unitel was dependent on the removal of the

current voting right limit defined in BPI bylaws.

As we stated when BPI presented its proposal to Unitel on 20 September, this

newsflow should be seen positively for the investment case. In fact, this offer will

imply a solution for the current breach of large exposures limits to Angola (which

continues to be a key issue for the bank and a reason for ECB to pressure its

responsible to present a solution).

0,70

0,80

0,90

1,00

1,10

1,20

1,30

1,40

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

vvdsvdvsdy

BPI Stoxx Banks (Rebased)Source: Factset Shareholders: Caixabank 44%; Santoro 19%; Allianz

8%;

Analyst(s):

André Rodrigues, Caixa-Banco de Investimento

[email protected]

+351 21 389 68 39

of 69


CaixaBank


BANKS

CaixaBank (Neutral) GSM to vote on the sale of 2% of BFA (Angola) to Unitel

3Q’16 results preview: EUR930m (-6.7% Y/Y)

The facts: CaixaBank will release 9m’16 results tomorrow prior to market

opening. We estimate net profit EUR930m, i.e. 6.7% below 9m’15.

Our analysis: For 3Q standalone we estimate EUR292m, +1.1% vs. 9m’15. The

results presentation will be held at 11:00CET, which will focus on the

development of the friendly bid on BPI.

Conclusion: Recommendation reiterated

Analyst(s):


[email protected]

+34 91 436 7816

Neutral

2.71


3.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg CABK.MC/CABK SM



Free float 54%









Total Revenue (m) 7,726 7,867 7,215



Earnings Before Tax (m) 638 1,243 1,947

Net Profit (adj.) (m) 1,182 1,298 1,558


Tangible BV (m) 18,485 16,764 16,657

RWA (m) 143,312 135,314 133,113

ROTE 6.7% 7.4% 9.3%


Cost/Income 52.6% 52.3% 51.4%


P/PPP 5.1 4.3 4.6

P/E (adj.) 15.8 12.3 10.3

P/BV 0.8 0.7 0.6

P/TBV 1.0 1.0 1.0


PPPPS 0.63 0.64 0.59

EPS (adj.) 0.20 0.22 0.26

BVPS 4.07 3.71 4.57

TBVPS 3.18 2.84 2.82

DPS 0.08 0.09 0.11

CaixaBank (EURm) 9m16E Y/Y 3Q'16E Y/Y Q/Q 3Q'15

NII 3,092 (6.5)% 1,051 1.3% 3.0% 1,038

NII / ATA (%) 2.62% (11.5)% 2.67% (5.8)% (11.1)% 2.84%

Fees & Comm (net) 1,536 0.8% 526 5.8% 0.7% 497

T rading 821 9.7% 228 nm (30.0)% 52

Other (net) 542 (26.4)% 137 (17.0)% (47.1)% 165

GOP 5,991 (5.2)% 1,942 10.8% (8.7)% 1,752

Ope. Expenses (2,990) (17.2)% (988) (2.7)% (1.1)% (1,015)

C/I ratio (%) 49.9% (12.7)% 50.9% (12.2)% 8.3% 57.9%

PPP 3,001 10.9% 954 29.4% (15.4)% 737

LIC (1,392) (21.0)% (480) 48.7% (4.3)% (323)

LIC/GOP (%) (23.2)% (16.7)% (24.7)% 34.2% 4.8% (18.4)%

Other (net) (310) nm (63) nm nm (66)

PBT 1,299 43.5% 411 18.0% (19.8)% 348

Net income 930 (6.7)% 292 1.3% (20.1)% 288

EPS 0.159 (12.2)% 0.050 (3.4)% (20.1)% 0.052

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8


vvdsvdvsdy

CAIXABANK Stoxx Banks (Rebased)Source: Factset

Shareholders: Criteria 46%;

of 69


Deutsche Bank

Germany/Banks Analyser

BANKS

Deutsche Bank (Neutral) 3Q’16 results preview: EUR930m (-6.7% Y/Y)

Q3 results above expectations due to lower one-offs

The facts: This morning DBK has reported better than expected Q3 results

mainly due to lower than forecasted costs. While one-offs came in well below our

forecast, underlying costs developed also better than expected. Total revenues

increased by 2% yoy to EUR 7.5bn (EUR 7.2bn). CT1 ratio increased by 30 bp’s

to 11.1% (equinet: 10.8%); this is excluding the positive impact from the sale of

the stake in Hua Xia Bank of around 50 bp’s. Litigation reserves increased by

EUR 0.4bn qoq to EUR 5.9bn. Liquidity reserve was down by 10% qoq to EUR

200bn.

Our analysis: FICC revenues underperformed our expectation with an increase

by 14% yoy (equinet: +25% yoy), equity trading revenues performed slightly

better than expected (-5% yoy vs. -10% yoy). Litigation costs amounted to EUR

0.5bn (equinet: EUR 0.6bn) and restructuring expenses to EUR 0.1bn (equinet:

EUR 0.5bn) and were thus below our forecast. Main difference to our forecast

was the absence of a goodwill write-down linked to the sale of Abbey; we had

expected EUR 0.8bn to be booked in Q3 ’16 – this will however be booked in

Q4’16 or Q1’17. Positively underlying costs have declined by 6% yoy to EUR

5.9bn the lowest quarterly level since at least Q1 ’15.

In Global Markets pretax profit improved to EUR 330m (Q3 ’15: EUR -2bn), higher

revenues (+10% yoy) and significantly lower costs (-49% yoy) were the main

drivers. Positively, compensation costs were down by 19% yoy. The increase of

FICC revenues by 14% yoy compares with an average of selected US Investment

Banks by 37%. In CIB improved from negative EUR 188m to EUR 640m, 45%

lower costs having been the reason, while revenues were slightly down yoy. QoQ

profit was up by 48%. In PW&CC pretax profit improved to EUR 117m due to

lower costs (-38% yoy) and higher revenues (+20% yoy). QoQ pretax profit was

down by 37%. DAM showed a pretax profit of EUR 216m (+52% yoy, +26% qoq),

higher revenues (+30% yoy, +17% qoq) more than offset higher costs (+24% yoy,

+13% qoq).

Conclusion & Action: The better than expected Q3 results are clearly a positive

surprise although the differences to our forecast stems to a large extent from

lower than forecasted one-off costs. Positively, the CT1 ratio increased by 30 bp’s

qoq to 11.2%. We stick to our Neutral recommendation with a target price of EUR

13.00. Litigation remains the key risk factor for DBK and linked to this the risk of a

capital risk.

Analyst(s):

Philipp Häßler, CFA, equinet Bank

[email protected]

+49 69 58997 414

Neutral

13.30


13.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg DBKGn.DE/DBK GY



Free float 100%









Total Revenue (m) 33,322 30,007 31,959

Pre-Provision Profit (PPP) (m) -5,345 1,802 4,466

Operating profit (OP) -6,301 602 3,266

Earnings Before Tax (m) -6,097 602 3,266

Net Profit (adj.) (m) -7,021 -121 1,664


Tangible BV (m) 57,788 57,264 58,928

RWA (m) 396,714 396,714 396,714

ROTE -12.0% -0.2% 2.9%


Cost/Income nm 94.0% 86.0%


P/PPP -5.8 10.2 4.1

P/E (adj.) nm nm 11.1

P/BV 0.5 0.3 0.3

P/TBV 0.5 0.3 0.3


PPPPS -3.85 1.30 3.22

EPS (adj.) -5.06 -0.09 1.20

BVPS 45.17 44.78 45.98

TBVPS 41.64 41.26 42.46

DPS 0.00 0.00 0.50

10

12

14

16

18

20

22

24

26

28


vvdsvdvsdy

DEUTSCHE BANK Stoxx Banks (Rebased)Source: Factset

Shareholders:

Deutsche Bank - Q3 2016

EUR m Q3 2016 Q3 2016e (eq) Q3 2015 yoy Cons. delta

Revenues 7,493 7,150 7,330 2% 7,116 5%

of which NII 3,525 3,700 3,693 -5% na

Expenses 6,547 7,901 13,223 -50% 7,415 -12%

CIR 87.4% 110.5% 180.4% -6989 Bo na

Risk provis. 327 280 207 58% 283 16%

EBT 619 -1,031 -6,100 -110% -582 -206%

Net income 256 -482 -6,013 -104% -605 -142%

Sources: Deutsche Bank, equinet Research

of 69


Mediobanca

Italy/Banks Analyser

BANKS

Mediobanca (Accumulate) Q3 results above expectations due to lower one-offs

Q1 results preview

The facts: Mediobanca is due to publish and present (conference call at 8.45am)

Q1 results of the 2016/17 financial year and hold the AGM on 28Th

Oct.

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

(EUR m) Q1 16/17E Q1 15/16A Y/Y Q4 15/16A Q/Q

Revenues 521 507 2.8% 528 -1.3%

Operating costs -213 -197 8.1% -249 -14.5%

GOP 308 310 -0.6% 279 10.4%

Loan provisions -105 -115 -8.7% -100 5.0%

Net Profit 156 244 nm 162 -3.7%

Mediobanca finalised the acquisition of Barclays Italian retail operations over the

summer and consolidates them for just one month in Q1, with a limited impact of

approx. EUR 8m both on revenues (ca. EUR 5m NII and EUR 3m net

commissions) and operating costs.

Although figures are not fully comparable with previous quarters, we forecast total

revenues increasing 2.8% Y/Y to EUR 521m, driven by a 9% rise in net

commissions to EUR 105m thanks to a recovery in CIB and higher contribution

from Che Banca! The trading income is estimated at EUR 32m vs. 26m one year

ago, while the NII is seen up 1.6% Y/Y to EUR 307.5m. On the other hand, the

associates’ contribution (mainly Generali) is anticipated down 7% Y/Y to EUR

77m.

Operating costs are expected to increase 8% Y/Y to EUR 213m, fuelled by

continuous hiring and the Barclays retail consolidation, leading to a gross

operating profit (GOP) almost flat Y/Y at EUR 308m, with a C/I ratio of roughly

41%.

Loan impairments are seen down almost 9% Y/Y to EUR 105m thanks to a

benign credit cycle in consumer credit.

The expected net profit of EUR 156m is not comparable with EUR 244m booked

one year ago, which included EUR 88.5m capital gains from the disposal of the

stake held in Pirelli.

The CET1 ratio was 12.1% phased-in and 12.6% fully-loaded last June and the

Barclays retail acquisition is expected to absorb ca. 20bps.

Conclusion & Action. We expect Mediobanca’s top mgmt. to reiterate a

confident and positive message on the bank’s prospects ahead of the business

plan presentation expected next month. We stick to Accumulate with EUR 7.5

target price.

Analyst(s):

Luigi Tramontana, Banca Akros

[email protected]

+39 02 4344 4239

Accumulate

6.88


7.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg MDBI.MI/MB IM



Free float 69%









Total Revenue (m) 2,047 2,163 2,270




Net Profit (adj.) (m) 588 637 684


Tangible BV (m) 8,518 8,879 8,622

RWA (m) 53,862 55,862 57,362

ROTE 6.6% 7.0% 7.5%


Cost/Income 43.6% 42.6% 41.9%


P/PPP 3.9 4.8 4.5

P/E (adj.) 7.6 9.4 8.8

P/BV 0.5 0.6 0.7

P/TBV 0.5 0.7 0.7


PPPPS 1.33 1.43 1.51

EPS (adj.) 0.68 0.73 0.79

BVPS 10.24 10.66 10.36

TBVPS 9.78 10.19 9.90

DPS 0.27 0.30 0.35

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5


vvdsvdvsdy

MEDIOBANCA Stoxx Banks (Rebased)Source: Factset

Shareholders: Shareholder Pact 31%;

of 69


Nordea

Q3/2015a

M€ Q3 OP Diff. Cons. Diff. OP Cons. Diff.

Net interest income 1,178 1,196 -1% 1,188 -1% 1,233 4746 4733 0%

Net fee income 795 787 1% 793 0% 767 3,196 3,206 0%

Net fair value items 480 388 24% 403 19% 211 1,551 1,511 3%

Total income 2,466 2,413 2% 2,413 2% 2,253 9,762 9,715 0%

Total expenses -1,183 -1,170 -01 % -1,197 1% -1,108 -4,845 -4,824 -0 %

Loan losses -135 -142 5% -147 8% -112 -529 -540 2%

Operating profit 1,148 1,101 4% 1,081 6% 1033 4,387 4,345 1%

Net profit 888 848 5% 827 7% 780 3,440 3,407 1%

EPS 0.22 0.21 5% 0.20 10% 0.19 0.85 0.84 1%

DPS 0.00 0% 0.00 0.00 0.65 0.64 2%

Source: OP and SME Direkt

Q3 2016e 2016e

Nordea

Finland/Banks Analyser

BANKS

Nordea (Neutral) Q1 results preview

Increased certainty about dividend but 2017 earnings under pressure

The facts: Nordea's Q3 operating profit of EUR 1,148m was higher than expected

(OP: EUR 2,413m; cons: EUR 2,413m), which can, however, be explained by the

heavily fluctuating fair value changes. Net interest income and net fee and

commission income nearly matched expectations. Net interest income grew 1%

QoQ on account of the partly rising lending margins. Lending remained subdued

with the exception of the strongly performing Swedish housing market. Net

interest income grew 17% YoY in Swedish retail banking operations but shrank

clearly in the large customer segment (-21% YoY). Nordea expects net interest

income to increase in Q4 2016 vs. Q3 2016 with the support of repricing

measures. Volume growth will probably remain muted on group level relative to

the peers. Fee and commission income grew 4% YoY thanks to the very strong

sentiment in asset management and record-high net inflow.

Our analysis: Even though costs were in line with expectations in the quarter, the

bank's cost control is starting to slip slightly. Costs are still expected to grow 3%

YoY in 2016, but now the estimate includes a positive non-recurring item of EUR

80–85m to be recorded for Q4 2016. Thus, comparable costs for 2016 rise by

nearly 5%. In addition, management estimates that costs will increase slightly in

2017 as well. The costs of the Temenos IT system project continue to undermine

Nordea's earnings outlook in the next few years and the anticipated significant

benefits will not become visible until in 2019-2020.

Conclusion & Action: We are downgrading our recommendation to Neutral

(from Accumulate) after the Q3 report. Although net interest income has turned to

moderate growth, we estimate that EPS will continue to decline mildly in 2017 as

the cost level and tax burdens are edging up. Earnings should return to growth in

2018, when the entry into force of the new PSD2 Directive and the planned bank

tax in Sweden will, however, bring uncertainty to the development of payment

income and the tax rate. As there are no positive drivers, we see limited upside in

the share, especially as the bank's valuation (2017 P/E 11.6) is higher than

normal. The high dividend yield (6.7%) will, however, efficiently limit the risk of a

share price decline. Our target price remains at EUR 10.

Analyst(s):

Antti Saari, OP Corporate Bank

[email protected]

+358 10 252 4359

Neutral

9.75


10.00


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg NDA1V.HE/NDA1V FH



Free float 79%









Total Revenue (m) 10,140 9,804 9,912




Net Profit (adj.) (m) 3,662 3,493 3,393


Tangible BV (m) 28,371 28,577 29,299

RWA (m) 143,294 135,630 137,561

ROTE 11.8% 11.2% 10.6%


Cost/Income 48.9% 49.4% 49.6%


P/PPP 7.9 8.0 7.9

P/E (adj.) 11.2 11.3 11.6

P/BV 1.3 1.3 1.2

P/TBV 1.4 1.4 1.3


PPPPS 1.28 1.23 1.23

EPS (adj.) 0.90 0.86 0.84

BVPS 7.65 7.70 7.88

TBVPS 7.01 7.06 7.24

DPS 0.64 0.65 0.66

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0


vvdsvdvsdy

NORDEA Stoxx Banks (Rebased)Source: Factset

Shareholders: Sampo plc 21%; Nordea Fonden 4%;

Swedbank Robus Funds 3%;

of 69


UniCredit

Italy/Banks Analyser

BANKS

UniCredit (Accumulate) Increased certainty about dividend but 2017 earnings under pressure

Possible liability management exercise?

The facts: According to the Italian press, UniCredit would be studying a liability

mgmt. exercise on the CASHES issued early-2009 as part of the capital plan to

be announced on 13th

Dec.

Our analysis: The CASHES are equity-linked instruments, issued for a

countervalue of EUR 2,983m in Feb 2009 with a maturity on Dec 2050 and

convertible, under certain conditions, into 96.75m ordinary shares underwritten by

Mediobanca.

Such shares are legitimately issued and are fully loss absorbing, but their amount

is reclassified within Additional Tier1 capital for an amount of EUR 609m (or

15bps).

The press highlights the CASHES are currently priced 35-36% of their nominal

value and the buy-back by UniCredit at a premium would offer a hefty capital gain

to the bank.

More importantly, the current holders, among which the local Foundations CRT

Carimonte and Cassamarca, as well as the Sovereign funds of Abu Dhabi and

Libya, would exit an illiquid asset for cash that could be re-invested in the

forthcoming rights issue of the group.

Conclusion & Action: Following the recent stock rally, a limited 13% upside is

left on our EUR 2.6 TP and we downgrade the stock from Buy to Accumulate.

Analyst(s):

Luigi Tramontana, Banca Akros

[email protected]

+39 02 4344 4239

Accumulate

2.32


2.60


from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg CRDI.MI/UCG IM



Free float 66%









Total Revenue (m) 22,405 22,185 22,837




Net Profit (adj.) (m) 2,089 1,744 3,338


Tangible BV (m) 46,468 47,171 47,644

RWA (m) 390,599 399,747 423,739

ROTE 4.5% 3.7% 7.0%


Cost/Income 60.8% 59.6% 56.9%


P/PPP 4.1 1.9 1.6

P/E (adj.) 14.1 7.9 4.1

P/BV 0.6 0.3 0.3

P/TBV 0.6 0.3 0.3


PPPPS 1.21 1.25 1.44

EPS (adj.) 0.35 0.29 0.56

BVPS 7.78 7.90 7.98

TBVPS 7.78 7.90 7.98

DPS 0.12 0.12 0.12

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

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

vvdsvdvsdy

UNICREDIT Stoxx Banks (Rebased)Source: Factset

Shareholders: Fondaz. Cariverona 4%; Fondaz. CRT

3%; Carimonte Holding 2%; Central Bank

of Libya 3%; Aabar 5%; Del Vecchio 3%;

of 69


Acerinox

Spain/Basic Resources Analyser

BASIC RESOURCES

Acerinox (Buy) Possible liability management exercise?

Comments from 3Q’16 results presentation

The facts: Acerinox held its 3Q’16 results presentation yesterday.

Our analysis: The most relevant aspects from these results were:

Acerinox expects 4Q’16 to be below 3Q’16 (EUR103m) but EBITDA will allow

the full year EBITDA grow at double digits. This implies obtaining between

EUR92 and 102m EBITDA in 4Q. Hence, the annual EBITDA would reach

between EUR315m and EUR325m, practically in line with consensus’

EUR321m EBITDA for 2016. Our estimates are 6% higher. Net debt is also

performing better than expected.

Prices in Europe: Acerinox announced a rise of EUR50/t in Spain and

Portugal where the Company holds 60% market share. This price hike will be

seen in 1Q’17. We expect to see more rises in base prices in other European

countries, as these are less pressured and the conditions in demand and

stocks accompany the rise. Prices in US: stable following three hikes in

1H’16. New price hikes took place in specific qualities and there is room for

more, but would prefer to increase prices again when the moment is ripe, not

in 4Q’16 but possibly in 1Q’17.

Conclusion: We are positive with Acerinox’ results that will improve but a little

slower than estimated.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Buy

11.66


14.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ACX.MC/ACX SM



Free float 40%









Sales (m) 4,221 4,016 4,750

EBITDA (m) 286 340 482

EBITDA margin 6.8% 8.5% 10.1%

EBIT (m) 121 175 316

EBIT margin 2.9% 4.4% 6.6%


ROCE 3.1% 4.5% 7.8%

Net debt/(cash) (m) 711 715 778




EV/Sales 0.7 1.0 0.8

EV/EBITDA 10.9 11.2 8.0

EV/EBITDA (adj.) 10.9 11.2 8.0

EV/EBIT 25.9 21.8 12.3

P/E (adj.) nm 34.7 17.9

P/BV 1.3 1.7 1.6

OpFCF yield -7.3% 3.6% 1.9%


EPS (adj.) 0.16 0.34 0.65

BVPS 7.23 6.90 7.10

DPS 0.45 0.45 0.45

6

7

8

9

10

11

12

13


vvdsvdvsdy

ACERINOX Stoxx Basic Resources (Rebased)Source: Factset

Shareholders: CF Alba 20%; Omega Capital 12%;

Nisshin Steel 15%;

of 69


Ence


BASIC RESOURCES

Ence (Buy) Comments from 3Q’16 results presentation

9m’16 results

The facts: Ence presented results at market close yesterday.

Our analysis: Results in line with our forecasts.

The quarter was characterised by the -3.1% drop vs. 2Q’16 in average pulp prices

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

(USD/EUR1.116 vs. 1.129 2Q). Tons sold were below forecasts, according to

Ence due to the price hike announced for 4Q’16 – quarter in which the Company

expects higher volumes.

Net debt dropped in 3Q to EUR233.5m, EUR7.7m below 2015.

Conclusion: Results in line with forecasts, with greater volume from the capital

gains proceeding from land sales. Ence announced a USD10/t price hike as from

October and FOEX prices include a small rise up to USD656.69/t, thus we could

see the beginning of stabilising/rebounding prices, which would be positive news.

Conference call today at 16:00.

Analyst(s):


[email protected]

+34 91 436 7814

Buy

2.05


2.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg ENC.MC/ENC SM



Free float 39%









Sales (m) 664 602 597

EBITDA (m) 192 115 115

EBITDA margin 28.9% 19.1% 19.3%

EBIT (m) 133 49 48

EBIT margin 20.1% 8.1% 8.1%


ROCE 13.6% 5.4% 5.3%

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




EV/Sales 1.7 1.2 1.2

EV/EBITDA 5.9 6.3 6.2

EV/EBITDA (adj.) 5.9 6.3 6.2

EV/EBIT 8.4 14.7 14.7

P/E (adj.) 11.1 24.0 23.7

P/BV 1.5 0.9 0.9

OpFCF yield 4.4% 7.6% 4.7%


EPS (adj.) 0.32 0.09 0.09

BVPS 2.27 2.21 2.24

DPS 0.14 0.06 0.06

ENCE: 9M16 RESULTS

9M15 %sles 9M16 %sles % y/y 9M16e % dev

Total sales 486,7 100% 429,7 100% -12% 440,8 -3%

EBITDA 129,7 27% 83,4 19% -36% 84,0 -1%

Depreciation & provs -46,0 -9% -39,5 -9% -14% -41,7 -5%

EBIT 83,7 17% 43,9 10% -48% 42,3 4%

Financial Results -35,5 -7% -12,0 -3% -66% -13,9 -14%

EBT 48,1 10% 31,9 7% -34% 28,4 12%

Taxes -13,1 -3% -7,6 -2% -42% -7,5 2%

Net Profit 35,0 7% 24,3 6% -31% 20,9 16%

Source: GVC Gaesco Beka estimates

1.8

2.0

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8


vvdsvdvsdy

ENCE IGBM (Rebased)Source: Factset

Shareholders: Retos Operativos XXI 26%; Alcor Holding

10%; Fuente Salada 5%;

of 69


Europac


BASIC RESOURCES

Europac (Accumulate) 9m’16 results

Good 9m’16 results

The facts: Europac presented 3Q’16 results

Our analysis: In our previous note we mentioned that 3Q’16 results could drop a

little based on the seasonal effects and the downward inertia of prices in 1H’16

and, in the end, the fall in EBITDA was hardly noted, despite the small drop in

prices.

Conclusion: Results are still positive and in line with forecasts, despite paper

prices dropping during the year. The accumulated correction and bonus issue are

reasons to buy shares. If testliner prices stabilise, these would further support our

positive opinion on the company.

Analyst(s):


[email protected]

+34 91 436 7814

Accumulate

4.90


5.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg PYCE.MC/PAC SM



Free float 38%









Sales (m) 806 831 849

EBITDA (m) 111 121 129

EBITDA margin 13.8% 14.5% 15.2%

EBIT (m) 62 72 80

EBIT margin 7.8% 8.7% 9.4%


ROCE 5.9% 7.1% 8.1%

Net debt/(cash) (m) 304 250 204




EV/Sales 1.0 0.9 0.8

EV/EBITDA 7.1 5.9 5.2

EV/EBITDA (adj.) 7.1 5.9 5.2

EV/EBIT 12.7 9.9 8.3

P/E (adj.) 15.0 11.8 9.9

P/BV 1.4 1.2 1.1

OpFCF yield 5.7% 15.2% 14.0%


EPS (adj.) 0.35 0.42 0.50

BVPS 3.81 4.06 4.35

DPS 0.16 0.20 0.23

EUROPAC: 9M16 RESULTS

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

Sales 603,9 100,0% 603,6 100,0% 0,0% 206,4 197,8

EBITDA 81,5 13,5% 89,9 14,9% 10% 30,2 29,6

Depreciation -36,1 -6,0% -36,0 -6,0% 0% -12,2 -11,6

EBIT 45,5 7,5% 53,9 8,9% 19% 18,0 18,1

Financial Rst -13,7 -2,3% -10,5 -1,7%

EBT 31,7 5,3% 43,5 7,2% 37% 14,6 14,9

Impuestos -10,8 -1,8% -11,4 -1,9%

Net Profit 20,9 3,5% 32,0 5,3% 53% 10,7 11,1

Source: GVC Gaesco Beka estimates

4.2

4.4

4.6

4.8

5.0

5.2

5.4

5.6


vvdsvdvsdy

EUROPACSource: Factset

Shareholders: Harpalus 40%; Cartera

REA 7%; Angel Fdez. 6%;

of 69


Kemira

Finland/Chemicals Analyser

CHEMICALS

Kemira (Accumulate) Good 9m’16 results

Defending the margins

The facts: Kemira's comparable EBIT (EUR 46.6m) in Q3 was clearly lower than

our forecast (EUR 51.1m) and consensus (EUR 50.2m). The disappointing results

were caused by a combination of declining sales (-5% YoY) and mildly stronger

underlying profitability (EBIT margin + 0.4pp compared to Q3 2015).

In the Q3 report the company downgraded its sales guidance for 2016 so that

sales are expected to be stable (previously: to grow) compared to 2015. The

guidance on improving underlying EBITDA was kept intact.

Our analysis: We calculate that in the first nine months of 2016 the aggregate

comparable sales of Paper and Municipal&Industrial divisions increased by

around 0.3% in local currencies. We estimate that, thanks to the recent USD

appreciation and the higher prices of fossil fuels, Kemira can turn its group sales

to organic growth in Q1 2017 at the latest despite the fiercer price competition.

Our forecasts are not based on an assumption of a swift and robust market

rebound for Oil and Mining.

The Q3 results justify a more cautious view of growth in the following quarters and

improving profitability trajectory. Our 2017 EBIT forecast falls by 6% and our 2018

EBIT forecast drops by 1%.

Conclusion & Action: Our target price has been and still is based on the

average valuation (2017 P/E) of Kemira's European peer companies. Following

our earnings forecast revisions, we lower our target price to EUR 12 (from EUR

12.70) and maintain our Accumulate recommendation.

Analyst(s):

Henri Parkkinen, OP Corporate Bank

[email protected]

+358 10 252 4409

Accumulate

11.05


12.00

12.70from Target Price: EUR


Target price: EUR

Share price: EUR

Reuters/Bloomberg KRA1V.HE/KEMIRA FH



Free float 65%









Sales (m) 2,373 2,355 2,404

EBITDA (m) 289 310 324

EBITDA margin 12.2% 13.1% 13.5%

EBIT (m) 163 175 194

EBIT margin 6.9% 7.4% 8.1%


ROCE 7.5% 7.9% -2.8%

Net debt/(cash) (m) 621 602 565




EV/Sales 0.8 0.8 0.8

EV/EBITDA 6.8 6.4 6.0

EV/EBITDA (adj.) 6.8 6.4 6.0

EV/EBIT 12.0 11.3 10.0

P/E (adj.) 17.4 14.4 12.7

P/BV 1.4 1.4 1.4

OpFCF yield 2.9% 3.0% 5.1%


EPS (adj.) 0.63 0.77 0.87

BVPS 7.60 7.82 8.11

DPS 0.53 0.57 0.60

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5


vvdsvdvsdy

KEMIRA Stoxx Chemicals (Rebased)Source: Factset

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

Varma Mutual Pension Insurance

Company 5%;

of 69


Kontron

Germany/Electronic & Electrical Equipment Analyser


Kontron (Buy) Defending the margins

Weak Q4 guidance but restructuring in focus

The facts: Order intake a full disaster with -29% yoy at EUR 79m, revenue at

EUR 89.5m in-line with our expectations, bottom line figs below our estimates,

gross margin of 20.6% is approximately 610bps below the level of the prior year

of 26.7%.

Weak revenues continued to be recorded in all three business units: Industrial

down 16.2%, Infotainment and Medical down 32.1% and

Avionics/Transportation/Defense down 34.9%.

Seems that some of the business and orders are shifted to later periods.

S&T AG (SANT GY) currently holds a 5.1% stake in KBC and purchased a total of

29.9% based on certain conditions

3Q16 review

EUR m Q3 2016a Q3 2016e delta Q3 2015

Order Intake 79.0 90.0 -12% 111.2

Revenue 89.5 90.0 -1% 113.4

Gross Margin 20.6% 22.0% -140bp 26.7%

EBITDA -2.9 2.0 -245% 8.5

EBIT(adjusted) -6.7 -6.0 12% 5.1

Our analysis: SANT will address the right measures in our view: increase order

intake, enlarge product base with Ennoconn/Foxconn/SANT products (Foxconn

has 4000 designs each year and SANT/KBC will be able to choose from),

improve gross margin, add software on KBC´s hardware products, penetrate

Asian markets, reduce OPEX (currently EUR 100m) and other quick operational

measures that should improve KBC´s balance sheet and operational metrics.

KBC has an equity value of around EUR 211m that equals around EUR 3.75 per

share.

Conclusion & Action: According to our calculation SANT paid around EUR 3.60

per share or EUR 60m (from cap increase EUR 44m plus cash on balance EUR

16) and this should be the taken as a floor for future merger/takeover

negotiations. We are comfortable with the shareholding of SANT as the strategic

buyer will finally turn KBC around and put financial and credit risks to the side.

There should be more upside in the share price in H1 2017 when restructuring

efforts show improvement in bottom line figures and a full takeover at higher

levels will be priced in.

Analyst(s):

Cengiz Sen, equinet Bank

[email protected]

+4969 58997 435

Buy

3.01


3.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg KBCG.DE/KBC GR



Free float 65%









Sales (m) 468 413 425

EBITDA (m) 30 1 23


EBIT (m) 6 (22) 1

EBIT margin 1.3% nm 0.3%

Net Profit (adj.)(m) 3 (25) (0)

ROCE -0.5% -5.5% 0.3%

Net debt/(cash) (m) 29 (1) (23)

Net Debt/Equity 0.1 0.0 -0.1

Debt/EBITDA 1.0 -1.6 -1.0

Int. cover(EBITDA/Fin. int) 14.3 (1.7) (26.1)

EV/Sales 0.4 0.5 0.4

EV/EBITDA 6.7 nm 7.7

EV/EBITDA (adj.) 9.3 nm 7.7

EV/EBIT 32.3 nm nm

P/E (adj.) nm nm nm

P/BV 0.6 0.6 0.6

OpFCF yield -12.7% -13.9% 11.7%


EPS (adj.) 0.06 (0.45) (0.01)

BVPS 4.65 5.14 5.14

DPS 0.00 0.00 0.00

2.2

2.4

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0


vvdsvdvsdy

KONTRON Tec Dax (Rebased)Source: Factset

Shareholders: Warburg Pincus 19%; Triton 15%;

Management 1.00%;

of 69


Vaisala

Q3 2015a

EURm Q3a OP Cons.

Sales

Weather 53.4 53.1 0 58.4

Controlled Environment 28.4 26.5 0 23.4

Sales 81.8 79.6 78.5 81.7

EBIT

Weather -3.3 -3.6 0 8.2

Controlled Environment 7.4 6.4 0 6.1

Other 1.2 0.0 0 -0.2

EBIT 5.3 2.8 11.3 14.0

Margin 6.5 % 3.5 % 14.3 % 17.3 %

PTP 4.6 4.0 1.0 14.0

EPS 0.21 0.15 0.50 0.58

DPS

Source: OP and Factset

Q3 2016e

Vaisala

Finland/Electronic & Electrical Equipment Analyser


Vaisala (Buy) Weak Q4 guidance but restructuring in focus

Profitability heading towards the target of 15%

The facts: Vaisala’s sales and operating profit excluding non-recurring items

exceed forecasts. Vaisala’s sales were EUR 81.8m and EBIT EUR 15.8m.

Vaisala’s reported EBIT of EUR 5.3m includes a writedown of EUR 10.5m related

to the goodwill generated by the acquisitions of Second Wind Systems and

3TIER. In addition, Vaisala recorded EUR 2.7m of non-recurring costs for Q3 due

to the discontinuation of the U.S.AWOS system and cost savings totalling EUR

1.3m for the Weather Business Area.

Our analysis: Vaisala repeats its guidance and estimates that its sales in 2016

will be EUR 310–330m and EBIT EUR 18–28m including the writedown of EUR

10.5m. On the basis of the guidance, the company’s sales in Q4 will be EUR 84–

104m and EBIT EUR 10.3– 20.3m.. We assume that the Weather Business

Area’s EBIT in Q4 will improve as a result of cost savings implemented in the US.

According to the company, the demand for weather radars has been weak

globally and it estimates that the slower demand will also continue in Q4. Vaisala

expects that the activities in the Controlled Environment Business Area will

continue at a good level. The greatest uncertainty towards the end of the year is

related to the seasonality of the Weather Business Area in Q4.

Conclusion & Action: Vaisala’s profitability in 2017 is supported by cost savings

in the US and the positive outlook of the Controlled Environment Business Area.

Vaisala’s long-term (2014–2018) target is an EBIT margin of 15% at the end of

the strategy period and an average increase in sales of 5% during the strategy

period. The ongoing trends support the increase in the need for measuring. Our

forecasts were slightly upgraded for 2016– 2018. The price indicated by the DCF

model increased by EUR 1.5 to EUR 41.5, and the price indications according to

the 10-year median of P/E and EV/EBIT multiples are EUR 38 and EUR 36. The

foundation for Vaisala’s business operations is relatively unchanged, which in our

opinion justifies the use of long-term multiples. The average on the basis of the

above-mentioned methods rose to EUR 38 (prev. EUR 35). Our recommendation

is upgraded to Buy (prev. Accumulate).

Analyst(s):

Hannu Rauhala, OP Corporate Bank

[email protected]

+358 10 252 4392

Buy

29.60


38.00


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg VAIAS.HE/VAIAS FH



Free float 100%









Sales (m) 319 327 348

EBITDA (m) 45 42 60

EBITDA margin 14.0% 12.8% 17.3%

EBIT (m) 30 27 46

EBIT margin 9.3% 8.4% 13.3%


ROCE 19.3% 18.9% 31.9%

Net debt/(cash) (m) (52) (61) (77)


Debt/EBITDA -1.2 -1.5 -1.3

Int. cover(EBITDA/Fin. int) (12.4) 20.9 (37.7)

EV/Sales 1.2 1.4 1.3

EV/EBITDA 8.2 11.1 7.4

EV/EBITDA (adj.) 8.2 11.1 7.4

EV/EBIT 12.5 16.8 9.6

P/E (adj.) 16.6 28.6 15.5

P/BV 2.4 2.9 2.7

OpFCF yield 7.9% 4.7% 6.4%


EPS (adj.) 1.44 1.03 1.91

BVPS 9.98 10.13 11.05

DPS 0.90 1.00 1.10

20

22

24

26

28

30

32

34

36


vvdsvdvsdy

VAISALA OMXH (Rebased)Source: Factset

Shareholders: Novametor Oy 10%; Suomalainen

Tiedeakatemia ry 6%; Mandatum

Henkivakuutusosakeyhtiö 4%;

of 69


FinecoBank

Italy/Financial Services Analyser

FINANCIAL SERVICES

FinecoBank (Buy) Profitability heading towards the target of 15%

The new cyborg advisory platform became fully operational

The facts: According to Fineco’s press release, the new cyborg advisory platform

became fully operational with the launch of a number of new features based on

the bank’s leading digital retail technology.

Our analysis: the new technological platform (X-Net), internally developed by the

bank, ought to offer to Fineco’s PFAs an integrated solution, simplifying their work

and strengthening customers’ relationships. The platform allows advisors to

translate life goals, risk appetite and time horizon of their clients into investment

choices, helping them also to manage all the relationship aspects. Advisors can

use the tool to organize their activities and time, allowing them to focus on the

financial advisory, which is core in the current market environment. Its key

features include: 1) the investment needs tool, which is an innovative function

that enables advisors to share with clients their potential financial gaps connected

to own life goals, from pension to children’s education, and the consequent need

to identify an investment strategy to meet these goals; 2) co-browsing, which

enables advisors to share their screen remotely with the client allowing them to

analyse together the financial situation, to work more efficiently and build a closer

relationship; 3) personalised homepage, which is the gateway to the platform,

containing all the information needed by advisors to plan and monitor their work,

including budget targets, total assets, the composition of their clients’ portfolio

and their agenda.

Conclusion & Action: this news confirms Fineco’s efforts in developing its

technological platform to support its network and push on the future advisory

model, which is going to be the best practice, due to Mifid II (2017), in the sector.

The cyborg advisory approach enhances the role of the consultants which can

rely on the fundamental support of the technology in their day by day work. We

stick to Buy and we confirm our target price (EUR 5.75). Fineco will be still

consolidated by Unicredit, preserving its strong capital position (CET1 c. 22% at

the end of 1H16) and its net interest margin. The development of the financial

advisor network and the clear focus on commercial efforts on the more value

added products will drive the strategy in the following years. Compared to peers,

Fineco has a less risky business model with a growth we deem is more

sustainable, due to the lack of non-recurring items such as performance fees and

to the lower margins and more convenient prices, which can, together with the

high quality services, allow stronger potential growth in the number of clients. The

quality of earnings is also better than peers, thanks to the “cleaner” tax structure.

Analyst(s):

Enrico Esposti, CIIA, Banca Akros

[email protected]

+39 02 4344 4022

Buy

5.35


5.75



Target price: EUR

Share price: EUR

Reuters/Bloomberg FBK.MI/FBK IM



Free float 32%









Total Revenue (m) 544 545 557




Net Profit (adj.) (m) 195 199 202

Shareholders Equity (m) 633 670 707

Tangible BV (m) 543 580 617

RWA (m) 1,828 2,006 2,095

ROTE 32.8% 30.6% 29.3%


Cost/Income 42.7% 42.2% 41.9%

P/PPP 15.7 10.9 10.8

P/E (adj.) 23.9 16.4 16.2

P/BV 7.3 4.9 4.6

P/TBV 8.6 5.6 5.3


PPPPS 0.49 0.49 0.50

EPS (adj.) 0.32 0.33 0.33

BVPS 1.04 1.10 1.16

TBVPS 0.89 0.95 1.01

DPS 0.26 0.26 0.27

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

FINECOBANK FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Unicredit 56%; Threadneedle AM 2%;

of 69


Atria

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

Sales

Finland 227 #DIV/0! 236 #DIV/0!

Scandinavia 91 #DIV/0! 90 #DIV/0!

Russia 20 #DIV/0! 18 #DIV/0!

Baltic countries 9 #DIV/0! 8 #DIV/0!

Eliminations -7 #DIV/0! -7 #DIV/0!

Sales 339 -3% 345 348 -1% 344 362

Sales growth 0.6 % 2.2 % 3.2 %

EBIT

Total EBIT 13.2 -9% 14.8 14.5 2% 12.0 15.4

EBIT excl. NRI 13.2 14.8

Total EBIT margin 3.9 % 4.3 % 4.2 %

EBIT margin excl. NRI 3.9 % 4.3 %

PTP 11.8 -6% 13.2 12.5 6% 9.0 14.2

EPS 0.32 0% 0.36 0.32 12% 0.28 0.39

DPS

Source : OP and FactSet

Q3/2016e

Atria

Finland/Food & Beverage Analyser

FOOD & BEVERAGE

Atria (Accumulate) The new cyborg advisory platform became fully operational

Q3 results fell short of forecasts, the acquisition price of Well Beef Ltd very cheap

The facts: Atria reported weaker Q3 results than expected this morning.

Compared to our forecasts, the earnings disappointment mainly resulted from

Sweden where the earnings were burdened by an increase in the prices of raw

materials, the sales mix and the implementation costs of Lagerbergs acquired

earlier. In Finland, the earnings were burdened by costs related to the

commissioning of the pig cutting plant in Nurmo. In the future, the burdens from

Lagerbergs and Nurmo will turn into savings, growth and earnings.

Our analysis: The company retained its guidance for 2016 unchanged: EBIT is

estimated to improve compared to 2015 and sales will increase. After nine

months, the company is behind in terms of its EBIT guidance, but the acquisition

of the majority stake in Well Beef Ltd (70%) at the beginning of October and the

removal of the exceptional cost burden from Lagerbergs and the pig cutting plant

in Nurmo should together be sufficient to improve the company’s EBIT.

The acquisition price for the 70% share in Well Beef Ltd reported in connection

with Q3 results was about EUR 16m, which in our opinion is very cheap. In 2015,

the company generated total earnings of EUR 3.5m excluding non-recurring

earnings (2014: EUR 2.9m), which corresponds to P/E valuation 6.5x. The

transaction was closed on 3 October 2016.

Conclusion & Action: There were few comments on the licence granted to the

Nurmo production plant to export pork to China. Atria aims to initiate exports as

soon as possible, and the effects on sales will become more specific once

commercial activities have started. The matter will likely be addressed in more

detail at the Capital Markets Day organised on 30 November.

Analyst(s):

Niclas Catani, OP Corporate Bank

[email protected]

+358 10 252 8780

Accumulate

9.78


11.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ATRAV.HE/ATRAV FH



Free float 38%









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

EBITDA (m) 85 84 93


EBIT (m) 29 37 44

EBIT margin 2.2% 2.7% 3.2%


ROCE 3.4% 4.2% 5.0%

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




EV/Sales 0.3 0.4 0.3

EV/EBITDA 5.3 5.7 5.0

EV/EBITDA (adj.) 5.3 5.7 5.0

EV/EBIT 15.6 12.9 10.5

P/E (adj.) 18.5 12.1 9.6

P/BV 0.6 0.7 0.6

OpFCF yield 11.9% 2.2% 10.4%


EPS (adj.) 0.49 0.81 1.02

BVPS 14.32 14.73 15.29

DPS 0.40 0.45 0.55

7.5

8.0

8.5

9.0

9.5

10.0


vvdsvdvsdy

ATRIA Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Itikka osuuskunta 30%; Lihakunta 28%;

Mandatum Life 4%;

of 69


Ebro Foods

Spain/Food & Beverage Analyser

FOOD & BEVERAGE

Ebro Foods (Neutral) Q3 results fell short of forecasts, the acquisition price of Well Beef Ltd very cheap

Good 9m’16 results and 2016 close anticipated

The facts: Ebro Foods released 9m’16 results as well as year-end forecasts.

Our analysis: At the consolidated level, sales increased +1.7% (organic -1.3%)

leaning on the changes to the perimeter (EUR54m). EBITDA +16.7% (+13.7%

organic) despite the +12% rise in advertising. Net profit increased +25.3%.

Per divisions:

Rice: despite the divestment in Puerto Rico sales increased +0.7% leaning

on good quality harvests in Europe and US, allowing stable prices. EBITDA

+15.3%, and EBITDA margin increased +190bp to 15.2% (levels seen in

9m’10).

Pasta: sales +3.4% and EBITDA +18.2% up to EUR112m. EBITDA margins

increased +150bp to 12.4%. Wheat harvests were affected by the rains

(Europe and US) which reduced the amount apt for pasta production, allowing

a small rise in prices (EUR200/tn vs. EUR250/tn.

Net Debt: Reduced by EUR28m vs. 9m’15 (EUR420m).

2016 pre-close: The company expects to end the year with flat consolidated

sales leaning on the change in perimeter (organic -1.8%). EBITDA +8.3%

with margins improving +1pp (13.8% vs. 12.8%). Lastly ND of EUR395m, -

7.3% vs. 2015 despite the various acquisitions during the year (Riso Scotti,

Celnat, Harinas Santa Rita).

Conclusion: Good results. We will revise our forecasts, but at the moment

maintain our Neutral recommendation.

Analyst(s):

Rafael Bonardell, GVC Gaesco Beka

[email protected]

+34 91 436 78 171

Victor Peiro Pérez GVC Gaesco Beka

[email protected]

+34 91 436 7812

Neutral

20.67


18.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg EBRO.MC/EBRO SM



Free float 52%









Sales (m) 2,462 2,488 2,542

EBITDA (m) 315 317 344

EBITDA margin 12.8% 12.8% 13.5%

EBIT (m) 241 248 273

EBIT margin 9.8% 10.0% 10.7%


ROCE 6.2% 6.5% 7.1%

Net debt/(cash) (m) 421 360 288




EV/Sales 1.3 1.4 1.4

EV/EBITDA 10.4 11.3 10.2

EV/EBITDA (adj.) 10.4 11.3 10.2

EV/EBIT 13.6 14.4 12.8

P/E (adj.) 19.3 19.2 17.4

P/BV 1.4 1.8 1.7

OpFCF yield 3.5% 5.4% 5.9%


EPS (adj.) 0.94 1.07 1.19

BVPS 12.78 11.45 11.87

DPS 0.69 0.72 0.76

Ebro Foods

(EUR m) 9M15 9M16 Y/Y 2016e EBRO 2016e

Sales 1,789.8 1,820.3 1.7% 2,488.0 2,471.2

Rice 951.7 958.5 0.7% 1,282.2

Pasta 877.7 907.3 3.4% 1,243.3

Adjust. -39.6 -45.5 -54.3

Advertising 65.7 73.8 12.3% 104.0

EBITDA 214.4 250.3 16.7% 317.0 340.7

% margin 12.0% 13.7% 1.8 p.p. 13.8%

RIce 126.6 146.0 15.3% 193.4

% margin 13.3% 15.2% 1.9 p.p. 15.1%

Pasta 94.8 112.1 18.2% 157.9

% margin 10.8% 12.4% 1.5 p.p. 12.7%

EBIT 165.1 193.9 17.5% 263.1

% margin 9.2% 10.7% 1.4 p.p. 10.6%

EBT 155.6 195.5 25.6% 259.9

Net profit 101.6 127.3 25.3% 154.0 167.6Source: Ebro Food & GVC Gaesco Beka

15

16

17

18

19

20

21

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vvdsvdvsdy

EBRO FOODS Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Hernández family 16%; C.F.Alba 10%;

SEPI 10%; DAMM 10%; Trenor family

7%;

of 69


Rémy Cointreau

France/Food & Beverage Analyser

FOOD & BEVERAGE

Rémy Cointreau (Neutral) Good 9m’16 results and 2016 close anticipated

Small acquisition in premium whiskey

The facts: Rémy Cointreau has expanded its Wines & Spirits division by making

an exclusive bid for the Domaine des Hautes Glaces distillery.

Our analysis: Rémy Cointreau should thus acquire a second premium French

whiskey, located in a mountain region on the banks of the Obiou river. These

single malt whiskies, which are priced at EUR65-150, will round out the

company’s range of premium whiskies. There was no information on the billing

level.

Conclusion & Action: This small acquisition is a surprise but does respond to

the goal of expanding the company’s premium range. Given that it is distinct from

other high-end products of its peers, this premium range is a factor that sets the

company apart from other sector majors.

Analyst(s):

Francis Prêtre, CM - CIC Market Solutions

[email protected]

+33 4 78 92 02 30

Neutral

74.40


78.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg RCOP.PA/RCO FP



Free float 46%









Sales (m) 1,051 1,092 1,175

EBITDA (m) 198 220 244

EBITDA margin 18.8% 20.1% 20.8%

EBIT (m) 179 199 223

EBIT margin 17.0% 18.2% 19.0%


ROCE 8.0% 9.0% 10.0%

Net debt/(cash) (m) 458 411 370




EV/Sales 3.5 3.7 3.4

EV/EBITDA 18.9 18.3 16.3

EV/EBITDA (adj.) 18.9 18.3 16.3

EV/EBIT 20.9 20.2 17.8

P/E (adj.) 32.1 29.8 25.7

P/BV 3.0 3.1 3.0

OpFCF yield 1.6% 3.7% 3.5%


EPS (adj.) 2.10 2.49 2.89

BVPS 22.82 23.71 24.84

DPS 1.60 1.76 1.94

55

60

65

70

75

80

85


vvdsvdvsdy

REMY COINTREAU Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Orpar 35%; R¿copart 15%; Androm¿de

1.16%; FCI 2%;

of 69


Kesko

Q3/2015a

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

Sales

Grocery trade 1,367 -1% 1,362 1,382 #DIV/0! 1,171

Building and technical trade 1,238 -1% 1,242 1,255 #DIV/0! 857

Car trade 190 6% 187 179 #DIV/0! 170

Common operations and eliminations-3 n.a. 4 1 #DIV/0! 4

Sales 2,792 -1% 2,795 2,817 -1% 2,789 2,844 2,203

26.8 % 26.9 % 27.9 % 26.6 % 29.1 %

EBIT

Grocery trade 49.2 12% 44.8 44.0 #DIV/0! 44.8

Building and technical trade 45.3 -4% 43.6 47.0 #DIV/0! 35.8

Car trade 6.8 13% 5.7 6.0 #DIV/0! 6.0

Common operations and eliminations-3.1 38% -3.7 -5.0 #DIV/0! -4.1

Total EBIT 98.2 8% 90.5 91.0 -1% 89.0 97.3 82.5

Total EBIT margin 3.5 % 3.2 % 3.2 % 3.7 %

PTP 84.8 -6% 91.1 90.0 1% 87.0 95.0 78.5

EPS 0.73 9% 0.67 0.67 0% 0.63 0.69 0.53

DPS

Source : OP and VaraResearch

Q3/2016e

Kesko

Finland/Food & Drug Retailers Analyser

FOOD & DRUG RETAILERS

Kesko (Neutral) Small acquisition in premium whiskey

Earnings outlook improved, a good selling price for grocery trade in Russia

The facts: The comparable results reported yesterday for July–September

exceeded all market expectations.

Our analysis: The results were better than we had expected across the board;

the extent of improvement in grocery trade in particular (+10% YoY) was a

surprise. This was achieved thanks to cost savings as well as synergies from

Suomen Lähikauppa, which have become visible sooner than estimated. The

earnings improvement of building and technical trade was also great (+27% YoY).

The performance was supported by the earnings contribution of Onninen acquired

in June and improved market shares. The car trade’s earnings also improved as

the continued increase in sales was finally also reflected on the earnings

performance. Compared to the management’s previous comments, there are

small signs of recovery in the building and technical trade in Finland, whereas the

market growth in Sweden and Norway is slightly slowing down.

Kesko also reported yesterday that it had made an agreement with Lenta about

the disposing of its grocery trade business in Russia for about RUB 11bn (~EUR

160m). Even though the transaction will cause a writedown of about EUR 69m

(Q4), we consider the selling price good considering the circumstances. The

divestment will improve Kesko's cash flow outlook as its operations have been

making a loss (EBIT in 2015: -EUR 14m), and capital will be released for more

profitable use.

Kesko’s results have started to improve again in 2016 as a result of acquisitions

made in 2016 and 2015. The efficiency programme of EUR 50m launched last

year has supported this trend. The loss burden caused by grocery trade in Russia

will also be removed, which will improve earnings growth in 2017. However, there

are several uncertainty factors that weaken short-term predictability, which

subjects the share to surprises that could even be extensive. For Q3, the surprise

was clearly positive, which affected the extent of the price reaction. The Capital

Markets day that will be organised on 7 November could clarify the situation.

Conclusion & Action: We upgrade our target price for Kesko to EUR 46 (prev.

EUR 43) and retain our Neutral recommendation as earnings and cash flow

outlooks are improved as a result of Q3 performance and the divestment in

grocery trade in Russia.

Analyst(s):

Niclas Catani, OP Corporate Bank

[email protected]

+358 10 252 8780

Neutral

45.85


46.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg KESBV.HE/KESBV FH



Free float 100%









Sales (m) 8,679 10,134 10,774

EBITDA (m) 381 429 493


EBIT (m) 244 284 333

EBIT margin 2.8% 2.8% 3.1%


ROCE 13.9% 14.3% 11.5%

Net debt/(cash) (m) (448) 74 201

Net Debt/Equity -0.2 0.0 0.1

Debt/EBITDA -1.2 0.2 0.4

Int. cover(EBITDA/Fin. int) 59.6 (423.5) 72.5

EV/Sales 0.3 0.4 0.4

EV/EBITDA 6.3 10.0 8.9

EV/EBITDA (adj.) 5.6 8.2 8.9

EV/EBIT 9.8 15.0 13.2

P/E (adj.) 17.2 15.6 18.2

P/BV 1.5 2.2 2.2

OpFCF yield 7.1% -8.6% 2.1%


EPS (adj.) 1.88 2.95 2.52

BVPS 21.84 20.51 21.03

DPS 2.50 2.00 2.25

25

30

35

40

45

50


vvdsvdvsdy

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

Shareholders: K-Kauppiasliitto ry 4%; Vähittäiskaupan

Takaus Oy 4%; Kruunuvuoren Satama

Oy 3%;

of 69


Arcadis

Netherlands/General Industrials Analyser

GENERAL INDUSTRIALS

Arcadis (Neutral) Earnings outlook improved, a good selling price for grocery trade in Russia

Neutral

13.47


12.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg ARDS.AS/ARCAD NA



Free float 60%









Sales (m) 3,419 3,373 3,449

EBITDA (m) 252 216 241


EBIT (m) 162 133 157

EBIT margin 4.7% 3.9% 4.6%


ROCE 6.1% 5.5% 5.7%

Net debt/(cash) (m) 496 478 405




EV/Sales 0.6 0.4 0.4

EV/EBITDA 7.7 6.9 6.0

EV/EBITDA (adj.) 7.7 6.4 6.0

EV/EBIT 11.9 11.2 9.1

P/E (adj.) 11.5 10.5 9.2

P/BV 2.3 1.2 1.1

OpFCF yield 8.3% 9.3% 14.7%


EPS (adj.) 1.61 1.28 1.47

BVPS 7.99 11.30 11.86

DPS 0.63 0.45 0.52

CEO steps down; trading update disappointing

The facts: Arcadis reported a 3Q trading update; CEO Neil McArthur to step

down, CFO new interim CEO.

ARCADIS Q3 2016 3Q15 3Q16E 3Q16A

Gross revenue 856 812 797,0

Materials, services third parties -210 -201 -201,0

Net revenue 646 611 596,0

EBITA 60,0 47,1 38,6

Operating EBITA 68,6 51,6 43,3

Operating margin 10,6% 8,4% 7,3%

Our analysis: Arcadis reported disappointing results again. Organic growth of net

revenues deteriorated to -5% due to North America and Emerging markets.

EBITA and EBITA margin also were clearly below our expectations. Brexit

(translation of currency), price pressure and capacity imbalances were the cause

of lower than expected results. Also on working capital the situation did not

improve driven by slow payments in the Middle East.

Arcadis’ CEO Neil McArthur stepped down as a result of a difference of opinion

with the supervisory board on the way forward. CFO Renier Vree will take on the

CEO role temporarily as of now and the supervisory board will look for a

successor both internally and externally.

Mr. McArthur has not been able to improve the US activities and we guess that is

the most important reason for his departure. New leadership in the person of

Mary Ann Hopkins (which we do not know) and fresh restructuring (adjusting the

cost structure further and simplifying the the organization) should lead to

improvement. Fixing the US activities, which is still Arcadis’ most important region

in terms of sales, should be Arcadis’ first priority.

Also Emerging markets (the second most important business), had to cope with

decreasing revenues, especially in Brasil (-38%, not surprising), but also in Asia

(-12% driven by Hong Kong/Singapore). The latter is disappointing as well,

certainly if you realize that Australia Pacific performed well and China is the

biggest contributor in the region. Margins are stable.

Margins in Europe were also weaker than expected due to France and Belgium

and the UK was in line.

Conclusion & Action: Arcadis is facing serious headwinds and has not been

able to cope with this is in a satisfactory manner. The Americas are not improving

and now also Asia starts to With the departure of Mr. McArthur we are very

curious to see what the way forward will be and we expect more clarity on that

with the strategic update early 2017. We will have to revise our estimates

downward. No reason to change our Neutral rating.

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ARCADIS Stoxx General Industrials (Rebased)Source: Factset Shareholders: St. Lovinklaan 21%; ASR Nederland 4%;

APG 6%; Fidelity 10%;

Analyst(s):

Edwin de Jong, NIBC Markets N.V.

[email protected]

+312 0 5508569

of 69


Huhtamäki

Q3/2015a Growth

M€ Q3a vs. Cons. OP Cons. Diff. OP Cons. Diff.

Flexibles Global 216.5 -6% 230 230 0% 224 3% 898 896 0%

North America 244.4 -3% 249 251 -1% 238 5% 998 1,005 -1%

Molded Fiber Global 67.1 4% 64 64 0% 62 3% 264 265 0%

Foodservice Europe-Asia-Oceania195.2 -2% 196 200 -2% 169 16% 737 753 -2%

Total sales 719.2 -3% 739 745.0 -1% 692 7% 2,896 2,906 0%

Sales growth 6.2 % 6.6 %

EBIT

Flexibles Global 18.2 -2% 17.0 18.5 -8% 16 8% 74.5 76.3 -2%

North America 24.5 -17% 34.0 29.6 15% 25 36% 119.2 113.8 5%

Molded Fiber Global 8.3 4% 8.0 8.0 0% 8 1% 32.4 33.1 -2%

Foodservice Europe-Asia-Oceania18.3 6% 17.3 17.2 1% 14 25% 61.6 62.9 -2%

Other operations -2.4 #DIV/0! -1.5 #DIV/0! 0 #DIV/0! -9.3 #DIV/0!

Total EBIT 66.9 -9% 74.8 73.2 2% 62.4 20% 278.2 277.5 0%

Total EBIT margin 9.3 % 10.1 % 9.8 % 9.0 % 9.6 % 9.5 %#DIV/0!

PTP 60.2 -8% 67.3 65.2 3% 52.8 27.5 % 247 250 -1%

EPS 0.46 -10% 0.53 0.51 3% 0.42 24.5 % 1.93 1.92 1%#DIV/0!

DPS #DIV/0! 0.85 0.75 13%

Source : OP , Vara Research and Reuters Knowledge

Q3/2016e 2016e

Huhtamäki

Finland/General Industrials Analyser

GENERAL INDUSTRIALS

Huhtamäki (Accumulate) CEO steps down; trading update disappointing

Earnings missed expectations – focus remains on growth

The facts: Huhtamäki's Q3 sales grew 4% and EBIT excl. NRI improved by 7%,

but both were weaker than expected. Sales amounted to EUR 719m (OP: EUR

745m/cons. EUR 739m). Comparable growth stood at 2% but growth in emerging

markets was still strong at 7%. EBIT improved by EUR 4.5m to EUR 66.9m (OP:

EUR 74.8/cons. EUR 73.2m). EPS was EUR 0.46 (0.53/0.51).

Our analysis: As regards sales, the biggest difference from our forecasts

concerns the Flexibles Packaging and North America segments. Sales in the

North America region grew 2%, slowing clearly from the strong H1 growth (Q2:

8% and Q1:10%). Sales of retail tableware and foodservice packaging performed

well, but growth was dampened by the muted sales of ice cream packaging after

the very strong comparison period (YoY). The weakness of frozen desserts

packaging sales also had a negative impact on profitability, and consequently

EBIT of the North America segment was weaker than forecasted after a long

while. Sales of Flexibles Packaging declined 3%, affected by the slower demand

in Europe and the drop in exports to Africa. However, the EBIT margin improved

by 1.4pp to 8.4%. In our forecast, sales will turn again to mild growth in Q4.

Molded Fiber and Foodservice Europe-Asia-Oceania were largely in line with

forecasts.

Despite the disappointing quarter, we expect the growth picture to remain intact,

which is also indicated by the growth-seeking investments in USA, Egypt and

India. Operating cash flow has doubled (YoY) in January–September thanks to

the improved EBITDA, supporting the company's acquisition and dividend

payment possibilities.

Conclusion & Action: As a result of the weaker-than-expected results, we have

lowered our 2016–2018 EBIT forecasts by -3%, -4% and -4%. On account of the

growth investments, we have cut our 2016 dividend projection slightly to EUR

0.80 (from EUR 0.85), showing 20% growth YoY. The company will probably

specify its near-term growth and profitability targets at its CMD on 22 November.

As a result of our forecast downgrades, our DCF-based target price falls to EUR

41 (from EUR 42.50). We maintain our Accumulate recommendation.

Analyst(s):

Jari Raisanen, OP Corporate Bank

[email protected]

+358 10 252 4504

Accumulate

36.76


41.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg HUH1V.HE/HUH1V FH



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Sales (m) 2,726 2,861 3,035

EBITDA (m) 316 381 405

EBITDA margin 11.6% 13.3% 13.3%

EBIT (m) 215 269 293

EBIT margin 7.9% 9.4% 9.7%


ROCE 8.8% 10.2% 10.6%

Net debt/(cash) (m) 562 595 576




EV/Sales 1.5 1.5 1.4

EV/EBITDA 12.7 11.5 10.8

EV/EBITDA (adj.) 12.7 11.5 10.8

EV/EBIT 18.7 16.3 14.9

P/E (adj.) 23.3 19.8 17.9

P/BV 3.7 3.6 3.2

OpFCF yield 1.7% 2.3% 3.7%


EPS (adj.) 1.43 1.85 2.05

BVPS 9.13 10.34 11.59

DPS 0.66 0.80 0.90

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HUHTAMÄKI Stoxx General Industrials (Rebased)Source: Factset

Shareholders: Finnish Cultural Foundation 14%;

Ilmarinen Mutual Pension Insurance

Company 3%; Odin Norden 1.97%;

of 69


Amplifon

Italy/Healthcare Analyser

HEALTHCARE

Amplifon (Accumulate) Earnings missed expectations – focus remains on growth

9M 16 results: sales and profitability better than expected

AMPLIFON: 9M 16 results

9M 15a 9M 16a % Chg Akros 9M 16e Vs Estimates

Sales 733.7 803.9 +9.6% 797.8 +0.8%

EBITDA recurring 108.3 121.6 +12.3%

% margin 14.8% 15.1%

EBITDA reported 103.5 119.1 +15.1% 117.9 +1.0%

% margin 14.1% 14.8% 14.8%

Source: Company Data and Banca Akros estimates

9M 16 sales, which were slightly higher than our estimates, confirmed the

positive growth trend in all geographic areas – this sales performance was

due to: 1) organic growth +8.0% Y/Y; 2) external growth 2.8% Y/Y; 3) slight

negative effect of forex -1.2% Y/Y.

EMEA sales grew by 11.2% Y/Y thanks to the very strong sales in some

European key countries (in particular: continued strong momentum in Italy,

double-digit sales growth in Iberia, Belux and Switzerland and very strong

performance in Germany thanks to the external growth). AMERICAS recorded a

solid performance (+8.7% Y/Y at CER) thanks to a strong acceleration of sales in

Q3 (+13.2%Y/Y), which was especially driven by Miracle Ear and Amplifon

Hearing Health Care. Lastly, sales in APAC continued to show a positive

momentum (+11.1% Y/Y at CER).

Continuous improvement in profitability: thanks to the operating leverage and

to the increased operational efficiency, EBITDA recurring rose by 12.3% Y/Y

despite the strong increase in the marketing expenses (+20% in 9M 16 vs 9M 15).

From a geographical point of view, the group recorded a significant improvement

in the profitability in EMEA, driven by the top-line growth (EBITDA margin from

12.3% in 9M 15 to 14.2% in 9M 16); despite the strong increase in marketing

expenses (around +50% Y/Y) and the investments for the launch on the new

Miracle-Ear TV campaign in Q3, EBITDA in the AMERICAS remained stable in

absolute terms (EUR 28.5m in 9M 16 vs EUR 28.7m in 9M 15); EBITDA in APAC

was negatively affected by the negative forex effect and the increased marketing

investments (around +50% Y/Y), so EBITDA margin decreased from 31.3% in 9M

15 to 30.5% in 9M 16.

Outlook on Q4 16: during yesterday conference call, the management said that

they are confident that the positive sales and profitability trend to continue in the

final part of the year. In particular, in a positive industry environment driven by

increasing sold volumes with stable ASP, the group’s top line is expected to

continue to grow in line with the first nine months of 2016, while the operating

leverage and further operational efficiencies should drive the profitability

improvement.

Based on the solid and sustainable sales growth rate in all regions, we slightly

increased our FY 16e sales from +7.5% to 8.8%.

Conclusion & Action: based on the good growth perspectives for Q4 16, we

maintain our positive stance on the stock and we confirm our Accumulate

recommendation and, based on our estimates, we adjust our target price at EUR

10.40 per share, calculated based on our DCF model (WACC 6.8% and perpetual

growth 2.0%)

Analyst(s):

Paola Saglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

9.70


10.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg AMPF.MI/AMP IM



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Sales (m) 1,034 1,125 1,208

EBITDA (m) 165 188 211

EBITDA margin 16.0% 16.7% 17.5%

EBIT (m) 111 127 144

EBIT margin 10.7% 11.3% 11.9%


ROCE 9.0% 9.6% 10.4%

Net debt/(cash) (m) 205 191 159




EV/Sales 2.0 2.2 2.0

EV/EBITDA 12.3 12.9 11.3

EV/EBITDA (adj.) 12.3 12.9 11.3

EV/EBIT 18.3 19.1 16.6

P/E (adj.) 37.2 33.4 28.6

P/BV 3.6 4.0 3.5

OpFCF yield 1.5% 3.2% 1.6%


EPS (adj.) 0.22 0.29 0.34

BVPS 2.23 2.45 2.74

DPS 0.04 0.04 0.05

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AMPLIFON FTSE Italy STAR (Rebased)Source: Factset

Shareholders: Ampliter N.V. 55%;

of 69


Recordati

Italy/Healthcare Analyser

HEALTHCARE

Recordati (Accumulate) 9M 16 results: sales and profitability better than expected

9M 16 results preview

The facts: 9M 16 results are due out today (Conference call at 4:00 pm CET).

Our analysis: as in H1 16, we expect a positive sales growth trend in Q3 16

thanks to the continuous positive performance of core products and rare diseases

division and to the contribution of Italchimici acquired at the end of May.

We forecast 9M 16 profitability to benefit from the expected positive sales trend.

The following table shows our sales and profitability forecast.

RECORDATI: 9M 16e preview

9M 15a 9M 16e %Chg. FY 16 guidance

Sales 784.4 852.8 +8.7% ~ 1,140 m

EBIT 213.0 243.5 +14.3% ~ 325 m

EBIT margin 27.2% 28.6% ~ 28.5%

Source: Company Data and BANCA AKROS estimates

Conclusion & Action: we confirm our Accumulate recommendation and our

target price of EUR 31.10 per share.

Analyst(s):

Paola Saglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

26.60


31.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg RECI.MI/REC IM



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Sales (m) 1,048 1,139 1,218

EBITDA (m) 317 364 395

EBITDA margin 30.3% 31.9% 32.4%

EBIT (m) 278 323 346

EBIT margin 26.6% 28.4% 28.4%


ROCE 18.7% 18.8% 19.8%

Net debt/(cash) (m) 89 130 27




EV/Sales 5.0 5.1 4.6

EV/EBITDA 16.4 15.8 14.3

EV/EBITDA (adj.) 16.4 15.8 14.3

EV/EBIT 18.7 17.8 16.4

P/E (adj.) 25.3 24.2 22.6

P/BV 5.8 5.7 5.1

OpFCF yield 4.2% 1.5% 4.2%


EPS (adj.) 0.95 1.10 1.18

BVPS 4.16 4.66 5.20

DPS 0.60 0.63 0.65

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RECORDATI FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Recordati Family 56%;

of 69


KONE - OP forecasts and consensus

Q3/2015a 2015

EURm Q3a OP Diff. Cons. Low High

Sales

New equipment 1,205 1,205 0% 1,278 1,230 1,490 1,280 4,935

Growth -6% -6% 0% 0% 23%

Service 965 965 0% 959 936 978 904 3,712

Growth 7% 7% 0% 6% 12%

Total sales 2,170 2,170 0% 2,228 2,175 2,299 2,184 8,646

Growth -1% -1% 2% 18%

EBIT 331 331 0% 338 318 349 326 1,242

Margin 15.3 % 15.3% 15.2% 14.6% 15.2% 14.9% 14%

Financials 6 6 0% 25 123

PTP 338 337 0% 348 321 360 351 1,364

Taxes -78 -78 -01 % -88 -311

EPS 0.00 0.50 n.a. 0.51 0.48 0.53 0.51 2.04

DPS 0.00 1.40

Source: OP (10 October 2016) and Vara Research (18 October 2016)

Q3/2016e

Kone

Finland/Industrial Engineering Analyser


Kone (Neutral) 9M 16 results preview

Alleviation to concerns related to China

The facts: KONE’s orders in Q3 exceeded expectations slightly, and its sales,

EBIT and margin were as expected. The guidance for 2016 was revised again:

sales increase by 3–5% (previously 2–6%) at comparable exchange rates and

EBIT is EUR 1,260–1,320m (previously EUR 1,250–1,330m) assuming the

exchange rates more or less in Q1–Q3/2016. The EBIT guidance contains an

assessment of the negative effect of exchange rates of about EUR 45m

(previously EUR 40).

Our analysis: The new equipment market in China reduced slightly in Q3 in

terms of numbers, but KONE’s orders increased by nearly 5%. A drop in prices

(5%) and a change in the product mix (5%) resulted in a reduction in the market’s

value. KONE revised its guidance for the whole year: the new equipment market

will reduce in terms of numbers by about 5%, while the previous estimate was 5–

10%. The pick-up in construction activities is now visible in new orders thanks to

the stimulus measures in the early part of the year. The growth in construction

has again slowed down over the past couple of months, and the effect of the

stimulus measures could be temporary. We do not expect that the new equipment

market in China would start to decline significantly; there are uncertainties related

to the outlook. The situation varies considerably depending on the area.

Our forecasts are revised only a little. The slight decline in the relative margin of

new orders justifies a more moderate margin forecast for 2018. We estimate that

the drop in prices in China cannot be compensated entirely by improved

productivity or reduced purchase prices. The increase in raw material prices will

result in a minor increase in costs.

Conclusion & Action: Our share valuation principles are unchanged: earnings

for 2016–18, KONE’s historical P/E and EV/EBITDA multiples and the DCF

analysis. Our target price of EUR 42 and Neutral recommendation are

unchanged. The report at least alleviates the short-terms concerns related to

China. KONE’s figures are excellent and services are increasing, but the

valuation does not offer upside potential in our opinion.

Analyst(s):

Pekka Spolander, OP Corporate Bank

[email protected]

+358 10 252 4351

Neutral

43.40


42.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg KNEBV.HE/KNEBV FH



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Sales (m) 8,646 8,770 8,950

EBITDA (m) 1,341 1,403 1,442

EBITDA margin 15.5% 16.0% 16.1%

EBIT (m) 1,242 1,300 1,337

EBIT margin 14.4% 14.8% 14.9%

Net Profit (adj.)(m) 1,032 1,029 1,035

ROCE 96.2% 82.7% 80.4%

Net debt/(cash) (m) (1,666) (1,800) (1,985)


Debt/EBITDA -1.2 -1.3 -1.4

Int. cover(EBITDA/Fin. int) (10.9) (28.3) (72.1)

EV/Sales 2.1 2.3 2.2

EV/EBITDA 13.6 14.5 14.0

EV/EBITDA (adj.) 13.6 14.5 14.0

EV/EBIT 14.7 15.6 15.1

P/E (adj.) 19.8 22.0 21.9

P/BV 8.1 8.0 7.2

OpFCF yield 4.9% 4.3% 4.3%


EPS (adj.) 1.98 1.97 1.98

BVPS 4.85 5.45 6.00

DPS 1.40 1.50 1.55

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KONE Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Antti Herlin 22%; Polttina Oy (Ilona

Herlin) 3%; Wipunen varainhallinta Oy

(ilkka Herlin) 3%;

of 69


Konecranes - OP and consensus estimates

Q3/2015a 2015

EURm Q3a OP Diff. Cons. Low High

Total sales 518 511 1% 509 502 514 507 2,126

Growth 2% 1% 0% 2% 6%

Total EBIT excl. NRI 37.9 39 -2% 38 35 41 33 118

Margin 7.3 % 7.5% 0.0% 7.5% 6.6% 5.5%

Total EBIT 25.0 41 -38% 36 33 39 4 63

Margin 4.8% 7.9 % 7.1 % 0.8% 3.0%

Financials (net) -4 -2 -80,0 % -2 -7

PTP 21.3 39 -45% 36 30 48 2 56

Taxes -5.4 -12 -1 -25

EPS 0.27 0.45 -41% 0.41 0.36 0.53 0.02 0.52

EPS excl. NRI 0.35 0.43 -19% 0.43 0.37 0.53 0.37 1.29

DPS 1.05

Source: OP (10 October 2016) and Vara Research (19 October 2016)

Q3/2016e

Konecranes

Finland/Industrial Engineering Analyser


Konecranes (Neutral) Alleviation to concerns related to China

Weak orders, savings advancing

The facts: Q3 sales and EBIT matched expectations, but orders were somewhat

lower than forecasted. Profitability of Equipment improved when the impact of

cost savings started to show. Guidance was reiterated: sales approximately at the

2015 level, adjusted EBIT expected to improve.

Our analysis: Overall, demand has remained rather stable, and the comments on

the outlook remained intact. Customers are cautious when making decisions on

big projects, and the order for delivering automated loading cranes to the US for

over EUR 200m announced by Konecranes is an exception.

The savings arising from efficiency programmes amounted to around EUR 22 in

January–September. Konecranes estimates that savings will exceed EUR 25–

30m (running rate) at the end of 2016.

Our forecasts include the Terex MHPS business from 2017 onwards and STAHL

will be excluded at the same time. Our estimates of the acquired business are

cautious and indicative because Terex has not reported the figures for equipment

and services separately. The divestment of the highly profitable STAHL weighs on

the profitability of Konecranes' equipment but will make financing the acquisition

considerably lighter.

Conclusion & Action: Our valuation principles are unchanged: 2017–2019

earnings, the sector’s long-term multiples (P/E and EV/EBITDA) and our DCF

model. Thus, our analysis does not include 2016. We have revised our forecasts

for Konecranes only slightly and will adjust our forecasts for Terex MHPS when

Terex publishes its Q3 report on 1 November. We also maintain our target price

of EUR 30 and our Neutral recommendation. The transaction offers Konecranes

significant potential which the share price already greatly reflects. On our 2017–

18 forecasts we do not find the valuation attractive enough relative to the

uncertainties.

Analyst(s):

Pekka Spolander, OP Corporate Bank

[email protected]

+358 10 252 4351

Neutral

30.64


30.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg KCR1V.HE/KCR1V FH



Free float 89%









Sales (m) 2,126 2,115 3,270

EBITDA (m) 117 167 274


EBIT (m) 63 109 164

EBIT margin 3.0% 5.2% 5.0%


ROCE 11.3% 14.1% 7.4%

Net debt/(cash) (m) 203 158 690




EV/Sales 0.7 0.9 0.9

EV/EBITDA 13.1 11.7 11.3

EV/EBITDA (adj.) 8.9 9.9 9.7

EV/EBIT 24.3 17.9 18.8

P/E (adj.) 22.6 21.7 22.0

P/BV 3.1 4.1 2.3

OpFCF yield 2.6% 4.2% -42.5%


EPS (adj.) 1.01 1.41 1.39

BVPS 7.49 7.47 13.53

DPS 1.05 0.80 0.80

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KONECRANES Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: HTT KCR Holding Oy Ab 11%; Stig

Gustavson and family 3%; Varma Mutual

Pension Insurance Company 1.90%;

of 69


Banca Mediolanum

Italy/Insurance Analyser

INSURANCE

Banca Mediolanum (Accumulate) Weak orders, savings advancing

ECB against Fininvest’s significant stake in BMED

The facts: According to Reuters and as anticipated by Milano Finanza some days

ago, the ECB took position against Fininvest’s ownership of a significant stake in

Banca Mediolanum.

Our analysis: We remind readers that, in October 2014, the Bank of Italy ordered

Fininvest, Berlusconi Family’s holding which owns c. 30% in Mediolanum, to sell a

stake of just over 20 percent because Mr Berlusconi was no longer considered fit

to own more than 10 percent of a financial company after being convicted for tax

fraud. However, an Italian appeals court later ruled in favour of Fininvest's request

to cancel the forced sale.

Conclusion & Action: this could be negative news, which the market already

priced in yesterday. Fininvest is likely to reject the ECB stance and it would act to

protect its interests like in the past. That said, the overhang risk could increase

again and the uncertainty weigh on the stock. Anyway, like in the previous

litigation, we believe the 20% is unlikely to be placed on the market. In the past,

we remind readers that Mr Ennio Doris confirmed he could consider buying a few

percentage points (up to a maximum of 5%) of the stake to be potentially

disposed of by Fininvest. Doris’ Family stake is actually around 40%. However,

we deem that the stake could be sold through a private placement, with a limited

impact on the share price.

Analyst(s):

Enrico Esposti, CIIA, Banca Akros

[email protected]

+39 02 4344 4022

Accumulate

6.31


7.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg BMED.MI/BMED IM



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

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

Total Net Revenues (m) 3,939 3,766 3,693

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 14.9 14.4

P/BV 2.6 2.3 2.3

P/ANAV 2.9 2.5 2.5

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

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BANCA MEDIOLANUM Stoxx Insurance (Rebased)Source: Factset

Shareholders: Doris family 40%; Fininvest 30%;

of 69


Abertis

Spain/Materials, Construction & Infrastructure Analyser


Abertis (Accumulate) ECB against Fininvest’s significant stake in BMED

Better profitability and good traffic growth

The facts: Abertis released 9m’16 results, in line with consensus in terms of

EBITDA and net profit. We highlight the good performance in traffic and improving

margins.

Our analysis: Traffic was positive in Spain (5.5% vs. 5.1% 1H ; 6.1% 2015),

above Abertis’ 4% target and above our estimates (3.5 – 4.9%). Traffic in France

was more moderate 8+1.6% vs. 1.2% 1H and 1.8% 2015) due to strikes and

other extraordinary events. Abertis’ points to 1.5% vs. Our estimated 1.9%. Traffic

in Chile increased 6.7% (3 – 3.8% estimated; ABE’s 3.5%) and Brazil drops -3.1%

(-2.4% to -4.2% estimated; vs. ABE’s -2.5%).

EBITDA increased 13% and in comparative terms 7.6%. EBITDA margin

improved from 64% to 66.6% and toll roads from 64.5% to 67.2%, especially in

France (from 65% to 67.3%) and Spain (80.4% vs. 82.4%). These improves are

above forecasts, although we are yet to perceive an improve in Brazil’s margins.

Debt increased EUR1,665m, 13.2% (up to EUR14,219m) due to the acquisition of

Autopista Central (EUR1,413m including debt) and other concepts (EUR265m)

and has EUR358m free cash flow.

Net profit is distorted by a one-off EUR248m proceeding from updating 50% of

the book value on Autopista Central held. In comparative terms the rise is of 10%.

Abertis is studying the acquisition of M-6 in UK, a toll road in Mexico and another

asset. The Company does not plan to amortise treasury stock in the short term

and may be in the future sell more activity in Chile.

Conclusion: Good results, in which the fruits of improving efficiency are

beginning to show. We maintain our positive outlook on the stock. The main focus

point is the dispute on the AP7 agreement that will not be resolved in the short

term and Abertis’ capacity to find attractive investments.

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Accumulate

13.64


14.75



Target price: EUR

Share price: EUR

Reuters/Bloomberg ABE.MC/ABE SM



Free float 58%









Sales (m) 4,379 4,726 4,953

EBITDA (m) 2,692 3,055 3,225

EBITDA margin 61.5% 64.6% 65.1%

EBIT (m) (65) 1,840 1,970

EBIT margin nm 38.9% 39.8%


ROCE -0.3% 7.1% 7.8%

Net debt/(cash) (m) 12,554 13,638 12,688




EV/Sales 6.0 6.0 5.6

EV/EBITDA 9.7 9.3 8.6

EV/EBITDA (adj.) 9.7 9.3 8.6

EV/EBIT nm 15.4 14.0

P/E (adj.) 25.0 20.6 18.7

P/BV 4.6 4.8 4.7

OpFCF yield 7.4% 13.7% 18.6%


EPS (adj.) 0.55 0.66 0.73

BVPS 3.00 2.87 2.90

DPS 0.69 0.72 0.76

9M15 9M16 %

Telecom 157.0 171.0 8.9%

Toll roads 3,170.0 3,439.0 8.5%

Holding 1.0 2.0 100.0%

SALES 3,328.0 3,612.0 8.5%

9M15 9M16 %

Telecom 133.0 134.0 0.8%

Toll roads 2,044.0 2,311.0 13.1%

Holding -48.0 -38.0 -20.8%

EBITDA 2,129.0 2,407.0 13.1%

9M15 9M16 %

Amortisations/other -2,487.0 -932.0 -62.5%

Financial result -571.0 -548.0 -4.0%

Associates -52.0 6.0 -111.5%

Other -318.0 211.0 -166.4%

Ordinary Result -1,299.0 1,144.0 -188.1%

Taxes/other 3,096.4 -426.0 -113.8%

Net Income 1,797 718.0 -60.1%

Source: Abertis

11.5

12.0

12.5

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13.5

14.0

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15.0


vvdsvdvsdy

ABERTIS Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Caixa Bank 24%; Capital 10%; Treasury

stock 8%;

of 69


Cramo

Q3/2015a Growth

M€ Q3a vs. Cons. OP Cons. Diff.

Finland 35.6 #DIV/0! 35 #DIV/0! 31 12%

Sweden 86.9 #DIV/0! 90 #DIV/0! 80 12%

Norway 16.2 #DIV/0! 16 #DIV/0! 17 -7%

Denmark 7.9 #DIV/0! 9 #DIV/0! 7 18%

East Europe 15.2 #DIV/0! 14 #DIV/0! 15 -7%

Central Europe 23.2 #DIV/0! 23 #DIV/0! 22 4%

Eliminations -0.2 #DIV/0! 0 #DIV/0! 0 -14%

Sales 184.8 -1% 186 187 -1% 172 8%

EBITA

Finland 10.2 #DIV/0! 10.5 8.5 23%

Sweden 21.1 #DIV/0! 22.0 18.1 22%

Norway 1.3 #DIV/0! 0.8 1.0 -21%

Denmark 0.9 #DIV/0! 0.9 #DIV/0! 0.7 25%

East Europe 3.9 #DIV/0! 3.2 #DIV/0! 4.0 -21%

Central Europe 3.4 #DIV/0! 3.0 #DIV/0! 1.5 106%

Eliminations -1.8 #DIV/0! -2.0 #DIV/0! -2.4 -16%

EBITA 38.9 38.4 37.9 1% 31.4 22%

Margin #DIV/0! 20.7 % 20.3 % 18.2 %#DIV/0!

PTP 35 6% 34.6 33.1 5% 25.8 34%

EPS 0.63 5% 0.61 0.60 1% 0.47 30%#DIV/0!

DPS #DIV/0!

Source : OP and FactSet

Q3/2016e

Cramo

Finland/Materials, Construction & Infrastructure Analyser


Cramo (Accumulate) Better profitability and good traffic growth

Convincingly controlled earnings growth

The facts: Cramo's Q3 results were largely in line with expectations. Sales

growth of equipment rental decelerated to 5.5% in local currencies from the

previous quarter which was supported by more working days (Q2: 9.7%). The

profitability of equipment rental strengthened extremely well when the total sales

growth (EUR 7.2m) poured into EBITA. Earnings growth was driven by Sweden,

Central Europe and Finland.

Our analysis: New sales of modular space were robust in Q3. The order book of

rental agreements rose by 2.7% QoQ and by 21% YoY (Q2: 13%) and equipment

rental sales were up 10%. The strong new sales increased service sales, and the

margin remained therefore weak.

Investments were growing in a controlled fashion. Net capex grew by about 20%

in January–September, and cash flow after investments was EUR 9m negative.

ROCE improved to 11% and ROE to 14.5%.

We are more confident than before about the well advanced construction cycle in

Sweden since home prices have remained on an uptrend. The Nordic

construction cycle still has great momentum as the Norwegian market has taken

a turn for the better, driven by Oslo. The demand outlook for modular space is

strong with the support of megatrends. We are moving our target price horizon to

2018 and use the valuation level EV/EBITA 11 (EV/EBITDA 6) as the basis for the

target price.

Conclusion & Action: We are upgrading our recommendation to Accumulate

(from Neutral) with a new target price of EUR 26 (prev. EUR 24). The company's

growth is underpinned by the Nordic construction cycle and the strong demand

outlook for modular space, and earnings growth is convincingly controlled. We

raise our 2018 forecast by 5%.

Analyst(s):

Matias Rautionmaa, OP Corporate Bank

[email protected]

+358 10 252 4408

Accumulate

23.48


26.00


from Neutral

Target price: EUR

Share price: EUR

Reuters/Bloomberg CRA1V.HE/CRA1V FH



Free float 100%









Sales (m) 668 720 761

EBITDA (m) 188 217 236

EBITDA margin 28.1% 30.1% 31.0%

EBIT (m) 78 105 122

EBIT margin 11.7% 14.6% 16.0%


ROCE 6.5% 8.0% 8.8%

Net debt/(cash) (m) 368 402 399




EV/Sales 1.8 2.0 1.9

EV/EBITDA 6.4 6.6 6.1

EV/EBITDA (adj.) 6.4 6.6 6.1

EV/EBIT 15.5 13.7 11.8

P/E (adj.) 16.7 14.0 12.1

P/BV 1.7 2.0 1.8

OpFCF yield 1.7% -2.6% 0.0%


EPS (adj.) 1.14 1.67 1.95

BVPS 11.03 12.00 13.20

DPS 0.65 0.75 0.80

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vvdsvdvsdy

CRAMO OMXH (Rebased)Source: Factset

Shareholders: Rakennusmestarit -yhteisö 11%;

Rakennusmestarit Group 3%; Nordea

funds 1.80%;

of 69


Fcc



Fcc (Neutral) Convincingly controlled earnings growth

EBITDA and working capital recovering

The facts: FCC released an EBITDA that continues accelerating (+3.4% vs. 1.3%

1H’16) due to the lower corporate costs and recovery of cement. Net losses

(EUR-179m) affected by the EUR345m provisions in cement and construction.

We highlight the debt reduction (EUR1,296m) due to the EUR709m capital

increase, divestments (EUR127m), anticipated payment in UK (EUR219m) and

factoring (EUR200m).

Our analysis: We highlight:

1) EBITDA: EUR613m (+3.4%), mainly affected by the lower activity in

construction (EBITDA EUR34m, -31%). Drop in services (-1.1%) due to lower

sales in UK (-14%). Water decelerates (0.2% vs. +1.3%) due to the decreasing

works on networks. Better margins except in construction. Cement increased due

to the lower energy costs and US;

2) WC: improving (EUR156m vs. EUR1.1m 1H16) due to factoring (EUR200m).

3) Debt: EUR417m of the convertible debt cancelled (6.5% interest). Of the

EUR502m tranche B debt, EUR386m has been cancelled including the EUR58m

relief. Pending is EUR116m. The company has earmarked EUR270m to reduce

debt in CPV.

Conclusion: Neutral results in a year of restructuring and progressive

normalisation in the operating trend. The next milestone in the financial

restructuring is the renegotiation of the Tranche A that will likely include the

Tranche B debt. We could increase our fair value, although not enough so as to

maintain an accumulate recommendation; hence we have revised it down to

Neutral.

Analyst(s):


[email protected]

+34 91 436 78 08

Neutral

7.89


7.00


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg FCC.MC/FCC SM



Free float 15%









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

EBITDA (m) 815 818 865

EBITDA margin 12.6% 12.6% 12.8%

EBIT (m) 324 376 413

EBIT margin 5.0% 5.8% 6.1%


ROCE 3.9% 5.8% 6.1%

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

Net Debt/Equity nm 3.3 3.0



EV/Sales 1.0 1.1 1.0

EV/EBITDA 8.3 8.5 7.8

EV/EBITDA (adj.) 8.3 8.5 7.8

EV/EBIT 20.9 18.5 16.4


P/BV 9.2 2.6 2.4

OpFCF yield 6.8% 8.4% 8.1%


EPS (adj.) 0.13 0.13 0.17

BVPS 0.74 3.04 3.22

DPS 0.00 0.00 0.00

SALES 9M15 9M16 %

Construction 1,425.8 1,134.4 -20.4%

Services 2,137.0 2,047.7 -4.2%

Water 780.7 747.4 -4.3%

Cement 436.2 429.3 -1.6%

Adjustments 12.7 21.2 66.9%

SALES 4,792.4 4,380.0 -8.6%

EBITDA 9M15 9M16 %

Construction 49.4 34.0 -31.2%

Services 321.6 318.2 -1.1%

Water 170.4 170.8 0.2%

Cement 63.2 74.3 17.6%

Adjustments -11.2 16.0 -242.9%

EBITDA 593.4 613.3 3.4%

9M15 9M16 %

Amortisations/Other -319.5 -657.7 105.9%

Financial result -265.6 -206.0 -22.4%

Other results 0.9 4.4 388.9%

Associates 34.5 63.2 83.2%

Ordinary Result 43.7 -182.8 -518.3%

Taxes 24.1 -32.3 -234.0%

Minoritaries/Other -81.4 35.7 -143.9%

Net Income -13.6 -179.4 -

Source: FCC

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

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vvdsvdvsdy

FCC Stoxx Construction & Materials (Rebased)Source: Factset

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

4%;

of 69


Ferrovial



Ferrovial (Accumulate) EBITDA and working capital recovering

Neutral results

The facts: Ferrovial released 9m’16 results yesterday afternoon. We highlight the

407 ETR and Heathrow performances, progressive recovery in traffic and

managed lines. On the negative side are the weak services performance in UK

and construction.

Our analysis: 1) 407 ETR: EBITDA +14.9% thanks to tariffs +9.3% and traffic’s

+4.4% growths. 2) HR: Good EBITDA (+4.4%) due to +0.7% traffic, +7.7% retail

passenger revenues and lower costs (-3.4%). 3) Dividends: Growing +5.4% in

407 ETR and flat in HR. 4) Services: EBITDA dropped (-25.1% LFL) due to Amey

(EUR24m, -61% LFL in EBITDA). 5) Brexit. 7% EBITDA in 1H came from UK.

The Company has hedged GBP368m to front the dividends received (GBP105m)

and cash in pounds. A rise in inflation benefits the Company as do lower rates.

The lower GDP could affect HR (although it is fairly resistant) and non-regulated

airports, Amey, construction (4% sales) and toll roads based on availability (M8).

6) Construction (-23% LFL) due to the lower activity in Spain and Webber. 7)

Cintra: EBITDA in NTE EUR41m, +53% (76.7% margin). 8) WC: Eroding

EUR475m. 9) Cash in the holding (EUR300m vs. EUR1,514m Dec’15) due to

Broadspectrum (EUR934m).

Conclusion: Neutral results. Good performance of HR, 407 ETR and managed

lines, damped by the weaker construction and working capital (expected to

recovery in 2H). Regarding services in UK the situation is worse than expected,

although the possible impact on our fair value would be limited (2%). Positive

outlook reiterated.

Analyst(s):


[email protected]

+34 91 436 78 08

Accumulate

18.59


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 1.1 1.0

EV/EBITDA 11.4 10.2 10.4

EV/EBITDA (adj.) 11.4 10.2 10.4

EV/EBIT 13.0 9.8 13.9

P/E (adj.) 21.3 20.7 30.9

P/BV 2.5 2.2 2.2

OpFCF yield 3.3% 4.2% 5.3%


EPS (adj.) 0.98 0.90 0.60

BVPS 8.27 8.44 8.29

DPS 0.71 0.73 0.75

SALES 9M15 9M16 Var

Construction 3,233.0 3,033.0 -6.2%

Highways 389.0 361.0 -7.2%

Services 3,621.0 4,314.0 19.1%

Adjustments -10.0 -12.0 20.0%

TOTAL 7,233.0 7,696.0 6.4%

EBITDA 9M15 9M16 Var

Construction 295.0 226.0 -23.4%

Highways 261.0 228.0 -12.6%

Services 264.0 209.0 -20.8%

Adjustments -5.0 -13.0 160.0%

TOTAL 815.0 650.0 -20.2%

ACCOUNT 9M15 9M16 Var

Amortisation/Other -166.0 34.0 -120.5%

Operating result 648.0 684.0 5.6%

Financial Result -321.0 -284.0 -11.5%

Associates 204.0 56.0 -72.5%

Ordinary Result 531.0 457.0 -13.9%

Taxes -71.0 -175.0 146.5%

Minoritaries/other 22.0 -3.0 -113.6%

Net Income 483.0 279.0 -42.2%

Source: Ferrovial

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vvdsvdvsdy

FERROVIAL Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Del Pino Family 36%;

of 69


Gruppo Ed. L’Espresso

Italy/Media Analyser

MEDIA

Gruppo Ed. L'Espresso (Accumulate) Neutral results

9m 2016 Post: surprising advertising growth in Q3

The facts: publication of Q3 2016 results.

Our analysis: Results were better than expected. The top-line decline was below

2%. L'Espresso said that its collection in radio was stable Y/Y in the 9 months

(the market was up by 1.3%), while internet followed the negative market trend (-

1.6%). The most notable element is that advertising was actually UP by 2.4% in

the third quarter. We note that, according to NMR figures, newspaper advertising

declined by 7.7% Y/Y in July/August vs. -5.4% in Q2, magazines deteriorated to -

6.6% vs. -1.8%, however radio strongly improved with +3.9% vs. a flattish (-0.3%)

trend in Q2. Internet also back to growth at +1.6% (-4.1%). We understand that

the out-performance was mainly related to third-party advertising collection, which

was strongly up also thanks to the acquisition of new contracts (chiefly ilmeteo.it).

With cost down by 2.4%, L'Espresso kept the EBITDA line almost stable Y/Y.

Another very positive item of the release is the cash position, which increased by

EUR 19m in Q3 alone, once again surpassing our expectations. We note that the

actual financial position could be even better taking into account the forthcoming

proceeds from the four local newspapers disposal (we estimate around 10m

including the attached EUR 4.1m cash position).

Editoriale L’Espresso 9m 2016 results (EUR m)

Q3

2015a

Q3

2016e

Q3

2016a Y/Y

9m

2015a

9m

16a Y/Y

Sales 133.9 128.5 131.4 -1.9% 439.6 424.3 -3.5%

advertising 67.5 65.1 69.1 2.4% 245.0 239.8 -2.1%

Circulation&Other 66.4 63.4 62.3 -6.2% 194.6 184.5 -5.2%

EBITDA rep. 9.9 8.5 9.7 -2.0% 40.9 37.0 -10%

margin 7.4% 6.6% 7.4% 0.0% 9.3% 8.7% -0.6%

EBIT 6.3 4.7 5.9 -6% 29.9 25.8 -14%

EBT 4.3 3.7 4.6 7% 32.9 21.0 -36%

Net Debt (cash) 8.1 -22.0 -37.2 nm 8.1 -37.2 nm

Source: Company data, BANCA AKROS estimates

Outlook: In our preview of H1 results, we cut our revenues estimates 2016/18 by

5% on average, with EBITDA impacted by 10% and net income, FCFE by

13/14%. Estimates unchanged post H1 publication.

The acquisition of ITEDI (La Stampa/Il Secolo XIX) is due to be finalized by Q1

2017; the company will announce the final terms of the deal by the end of this

month. We have not included the positive impact of the deal in our estimates, or

in the target price.

Conclusion & Action: Positive release, given the surprise in advertising

collection and cash generation. Positive view on the stock maintained on

valuation grounds.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Accumulate

0.76


1.12



Target price: EUR

Share price: EUR

Reuters/Bloomberg ESPI.MI/ES IM



Free float 40%









Sales (m) 605 581 579

EBITDA (m) 48 50 53


EBIT (m) 30 35 38

EBIT margin 5.0% 6.1% 6.6%


ROCE 4.2% 3.9% 4.0%

Net debt/(cash) (m) 11 (21) (23)



Int. cover(EBITDA/Fin. int) 5.4 8.4 high

EV/Sales 0.6 0.4 0.4

EV/EBITDA 7.3 4.5 4.3

EV/EBITDA (adj.) 5.9 4.4 4.1

EV/EBIT 11.4 6.5 6.0

P/E (adj.) 24.3 21.5 16.4

P/BV 0.7 0.5 0.5

OpFCF yield 7.4% 10.8% 0.2%


EPS (adj.) 0.04 0.04 0.05

BVPS 1.44 1.48 1.53

DPS 0.00 0.00 0.00

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05


vvdsvdvsdy

EDITORIALE L'ESPRESSO Stoxx Media (Rebased)Source: Factset

Shareholders: Carlo De Benedetti 53%; Eredi

Caracciolo 12%;

of 69


Ipsos

France/Media Analyser

MEDIA

Ipsos (Buy) 9m 2016 Post: surprising advertising growth in Q3

Confirmation of the return to growth with a good Q3-16

The facts: Q3-16 revenues were EUR431.7m (+0.9%), reflecting organic growth

of +3.2%, higher than our forecast (EUR426m, +2.0% org.) and the consensus

(EUR428m, +2.2% org.). Over 9M, org. growth is +3.3%, with revenues of

EUR1,265.3m (+0.3%). The company reiterated its goal of an underlying EBIT

margin of 10% in 2016. Company contact.

Our analysis: 1) Ipsos has maintained its momentum after a Q1-16 at +3.7% and

a Q2-16 at 3.0%. The forex impact continues to be negative: -3.8% over 9M; 2) by

market, Ipsos recorded an improvement in emerging markets (+4.1%) and in

developed markets (+2.9%); by region, EMEA (+2.5%) continued growing in Q3-

16 (+4.4%), the Americas (+3%) are driven by the US (Q3-16 +2.7%) and Asia-

Pacific (+6%) is still buoyant despite high comps in Q3-16 (+1.5%); 3) by division,

Ipsos Connect, which had experienced problems, reached breakeven over 9M,

i.e. a Q3-16 that marked a return to growth. The performance is very good on

Ipsos Marketing at +5% thanks to large clients that adopted less of a wait-and-

see attitude; 4) the new services are up 24% over 9M, i.e. 11% of group

revenues; and 5) other factors that require no comment (EBIT margin in line with

targets, gearing down to 55.6% vs. 67.9% at end-September 2015). Outlook: the

2016 targets are confirmed at the upper end of the range with a Q4-16 seen up by

around 3.3% vs. previous guidance of implicit growth of 0.8-4.6% and an EBIT

margin stable in 2016 at 10%, which includes EUR10m in costs tied to the ‘New

Way’ plan and higher provisions for bonuses. We have raised our org. growth

forecasts to 3.3% in 2016 vs. +2.0% and +3.0% in 2017 and 2018 vs +2.0%

Conclusion & Action: This is the third straight quarter in which Ipsos has turned

in surprisingly positive figures. The new services are growing apace, both

emerging markets and mature countries are in good shape overall and Ipsos

Connect moved into the black in Q3-16. Our entry point has been raised to

EUR28 vs EUR26, built on assumptions of 3% growth from 2017 (vs +2.0%) and

a normalised EBIT margin of 11.1%.

Analyst(s):

Emmanuel Chevalier, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 72

Buy

28.37


32.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ISOS.PA/IPS FP



Free float 70%









Sales (m) 1,785 1,795 1,849

EBITDA (m) 187 219 217

EBITDA margin 10.5% 12.2% 11.7%

EBIT (m) 156 186 183

EBIT margin 8.7% 10.3% 9.9%


ROCE 7.6% 7.7% 8.2%

Net debt/(cash) (m) 557 467 386




EV/Sales 0.9 1.0 0.9

EV/EBITDA 8.4 8.3 8.0

EV/EBITDA (adj.) 7.7 8.7 7.8

EV/EBIT 10.1 9.8 9.5

P/E (adj.) 9.9 11.8 10.8

P/BV 1.0 1.2 1.1

OpFCF yield 16.2% 9.8% 9.3%


EPS (adj.) 2.14 2.40 2.63

BVPS 20.41 23.75 25.48

DPS 0.80 0.85 0.90

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vvdsvdvsdy

IPSOS Stoxx Media (Rebased)Source: Factset

Shareholders: LT participations 26%; Treasury stock

0.09%; employees 1.43%; SG capital

developpement 1.14%; Salvepar 1.45%;

of 69


Mediaset Espana

Spain/Media Analyser

MEDIA

Mediaset Espana (Buy) Confirmation of the return to growth with a good Q3-16

Weak 3Q results, but cost guidance improved

The facts: MSE released results at market close and held the CC at 18:00CET.

Our analysis: EBITDA and net profit above our forecasts and consensus.

Weak quarterly results and positive in the accumulated period.

Top-line, below forecasts. Share below forecasts (+0.4pp 3Q, +44.2%)

even despite having paid an attractive price for the rights on the Eurocup and

the satisfactory results in terms of audience and targets. On the positive

side, the Company maintained its lead in share lost in 1Q’16. Good c/GRP

+1.2% and GRPs +1% bearing in mind the +22.2% rise in inventories.

Regarding “other advertising revenues with third parties” we saw a -29.9%

contraction for 9M’16 due to the cancellation of DTS’ contract in 2015 partially

offset by TNT/13TV new agreements. This fact was already discounted and

included in our estimates (-EUR12m y/y est).

Opex affected by cost contention (as usual, -24.7% since 9m’2010 pro-

forma) and extraordinaries from the FTA Eurocup (partial between 2 and

3Q). The positive surprise was in the downward revision of annual

costs, from EUR780 to 770m (guidance prior to the Eurocup). We expect

opex 2017e to drop as a premium event is not considered.

Strong CF in 9m (+21.3% Y/Y, CAGR 9m’13 – 9m’16 +214%).

Net cash position recovery (EUR118.4m, +81% t/t, -42.4% y/y) due to the

high remuneration policy implemented (Pay-out 100.7%, EUR167.4m) and

buy-back of 150mEUR.

Conclusion: Weak results and not very representative at the annual level.

The advertising market is in deceleration again partly explained by political

uncertainty. In the case of MSE, Eurocup didn’t perform as expected.

We are optimistic regarding the 4T16e (also MSE in its c.c.; without quantifying

the advertising market except October that said it will be flat/slightly positive) as

we observed a similar effect when campaigns were delayed between Dec-15 and

Jan-16 (Feb-16 grew above 20%). Added to this is the final government’s

formation, the less demanding comparative base (last year there were General

Elections in Dec-15 and TV advertising market grew slightly +2.8% y/y) and good

prospects ahead the Christmas season with high retail sales indicators.

Analyst(s):

Eduardo Garcia Arguelles, GVC Gaesco Beka

[email protected]

+34 914 367 810

Buy

10.30


14.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg TL5.MC/TL5 SM



Free float 50%









Sales (m) 972 1,026 1,043

EBITDA (m) 223 244 262

EBITDA margin 22.9% 23.8% 25.1%

EBIT (m) 205 226 244

EBIT margin 21.1% 22.0% 23.4%


ROCE 20.2% 18.7% 19.6%

Net debt/(cash) (m) (198) (141) (150)


Debt/EBITDA -0.9 -0.6 -0.6


EV/Sales 3.4 3.1 3.0

EV/EBITDA 14.9 13.0 12.1

EV/EBITDA (adj.) 14.9 13.0 12.1

EV/EBIT 16.2 14.1 13.0

P/E (adj.) 21.0 19.1 17.1

P/BV 3.3 2.9 2.8

OpFCF yield 5.5% 5.8% 7.6%


EPS (adj.) 0.48 0.54 0.60

BVPS 3.06 3.55 3.66

DPS 0.48 0.48 0.54

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vvdsvdvsdy

MEDIASET ESPANA IBEX 35 (Rebased)Source: Factset

Shareholders: Mediaset S.p.A. 50%; Treasury Stocks

0.05%;

of 69


Eni

Italy/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

Eni (Buy) Weak 3Q results, but cost guidance improved

Q3 2016 preview: one-offs are due to affect production

The facts: Eni is releasing its Q3 2016 results on 28th

October, before market

opening.

Our analysis: based on our estimates, Eni should post declining results YoY:

EUR m Operating segments Total

E&P R&M Chem G&P EBIT Adj. Net Inc Adj EPS

2015 Q3 757 163 172 -469 604 -257 -0.07

2016 Q2 355 44 112 -229 188 -290 -0.08

2016E Q3 395 60 85 -450 5 -507 -0.14

Q3 / Q3 -47.8% -63.2% -50.6% n.m. n.m. n.m. n.m.

Q3 / Q2 11.3% 36.4% -24.1% n.m. n.m. n.m. n.m.

Source: Company data and Banca Akros estimates

E&P: in comparison with Q2 16 (1.715m b/d), Q3 16 hydrocarbon production

ought to be affected by the stops at the Val d’Agri and Goliat fields, by the

depletion of mature fields, by the stops for maintenance (usually quite sizeable in

Q3) and by the PSA effect due to the higher Brent price QoQ (Eni’s sensitivity is

circa 1k b/d of production for each USD). We expect these negatives to be

partially offset by the new start-ups (e.g. Nooros) and by the ramp-ups. Overall,

based on our estimates, Q3 16 daily production was 1.710m b/d (-0.3% QoQ and

+0.4% YoY).

G&P: the gas market is continuing to be very weak, affected by low consumptions

(mainly for thermoelectric uses) and by high gas availability. This is fuelling

competition and the selling prices are aligned to those on the spot market. This

implies negative margins for the underlying activity.

R&M: this division ought to be hit by lower refining margins YoY (lower spreads

between heavy/light oils and lower spreads on middle distillates), while on the

positive we expect higher volumes sold (we expect nearly +5% YoY).

Chemicals: in comparison with Q3 15 results, the petrochemical division ought to

post declining results, also due to lower volumes expected.

Net income & EPS: net income ought to be negative. This is mainly due to the

negative performance expected at an EBIT level and the tax burden related to the

E&P performance.

Net debt: the net financial position should be around EUR 18bn, up vs. roughly

EUR 13.8bn posted as at the end of H1 2016. This is mainly due to the dividend

payment (around EUR 1.5bn).

Conclusion & Action: Eni should post a decreasing set of results in comparison

with Q3 15, mainly due to the worse performance expected in the E&P division.

We don’t believe Q3 2016 results may be considered a catalyst for the stock. In

our view, the sound production growth expected (Val d’Agri and Goliat fields are

now producing, as well as Kashagan – this ought to allow Eni to confirm its FY

guidance pointing to a flat production in 2016 YoY), coupled with the positive

outcomes of the turnaround process in the mid/downstream and the appealing

dividend yield of about 5.9%, make Eni an attractive investment opportunity.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Buy

13.54


18.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ENI.MI/ENI IM



Free float 70%









Sales (m) 68,945 89,698 93,519

EBITDA (m) 11,703 15,126 17,452

EBITDA margin 17.0% 16.9% 18.7%

EBIT (m) (2,774) 5,616 8,255

EBIT margin nm 6.3% 8.8%

Net Profit (adj.)(m) (8,821) 348 2,151

ROCE -0.7% 0.7% 3.1%

Net debt/(cash) (m) 16,863 12,848 10,072




EV/Sales 1.0 0.7 0.6

EV/EBITDA 5.9 4.2 3.5

EV/EBITDA (adj.) 5.9 4.2 3.5

EV/EBIT nm 11.3 7.4


P/BV 1.1 1.1 1.1

OpFCF yield -8.6% 1.4% 4.2%


EPS (adj.) (2.20) 0.09 0.54

BVPS 12.91 12.20 11.94

DPS 0.80 0.80 0.80

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vvdsvdvsdy

ENI Stoxx Oil & Gas (Rebased)Source: Factset

Shareholders: Italian Government 4%; Cassa Depositi e

Prestiti 26%;

of 69


Repsol

Spain/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

Repsol (Buy) Q3 2016 preview: one-offs are due to affect production

Agreement in Bolivia

The facts: Repsol’s chairman and Bolivia’s president have agreed to increase the

exploitation contract on Caipipendi, in the south of Bolivia. The new contract is for

another 15 years, from 2031 to 2046. The Caipipendi consortium is formed by

Repsol (37.5% and operator); Shell (37.5%) and PAE (25%), within the contract

subscribed with Yacimientos Petrolíferos Fiscales Bolivianos (YPFB).

Our analysis: Positive news (Bolivia now contributes 6% production and 6%

reserves to the Grou). With this agreement Repsol and its partners have

committed to invest $0.5bn during the next five years, to confirm the presence of

gas and accelerate hydrocarbon production in operating areas already identified

in the area (specifically Boyuy and Boicobo Sur, in the south and north of

Caipipendi). If successful, the new gas could also be offered to the country via the

existing installations which currently has available capacity. The studies realised

by Repsol have identified resources in the areas of up to 3 Tcf following the

seismic labour carried out.

To sum up, it implies extending an important concession in Bolivia and does not

demand a very high investment commitment (around $40m/year for Repsol,

which is fits with the less intensive capex phase). More so, it is not a high risk

investment within the area as it is well known to Repsol, having identified

resources, and does not require additional investments in midstream assets to

employ the potentially extracted gas.

Conclusion: Good news for the stock and an example of contained investments

and low risk profile, compatible with the Group’s priorities to manage cash

generation and protect the investment grade.

Analyst(s):

Sonia Ruiz De Garibay, GVC Gaesco Beka

[email protected]

+34 91 436 7841

Buy

12.91


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 0.7 0.5

EV/EBITDA 4.6 4.9 3.9

EV/EBITDA (adj.) 4.6 4.9 3.9

EV/EBIT 12.9 12.0 8.5

P/E (adj.) 7.6 11.0 9.8

P/BV 0.5 0.6 0.6

OpFCF yield 11.0% 3.8% 5.9%


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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vvdsvdvsdy

REPSOL Stoxx Oil & Gas (Rebased)Source: Factset

Shareholders: CaixaBank 10%; Sacyr Vallehermoso

8%; Temasek 5%;

of 69


Technip

France/Oil Services Analyser

OIL SERVICES

Technip (Buy) Agreement in Bolivia

Q3 results better than expected, 2016 outlook raised

The facts: Technip has reported Q3-2016 revenue of EUR2,919m (-6.1%), an

adjusted operating profit of EUR285m (-2.5%), representing an operating margin

of 9.7% (9.4%) and attributable net income of EUR184m (+12.4%). With order

intake of EUR1.5bn over the quarter, unchanged vs the previous quarter,

Technip’s backlog stands at EUR12.3bn (EUR17.5bn at end Q3-2015).

Our analysis: These results largely beat the consensus (revenue EUR2.7bn,

operating profit EUR222m, operating margin 8.2%, attributable net income

EUR139m) and our expectations (EUR2,845m, EUR265m, EUR173m) due to an

excellent operating performance in Subsea, with an operating margin of 16.4% vs

15% in Q3-2015 (our estimate) and the consensus forecast of 13.8%. Onshore

Offshore reported an operating margin of 4.6%, similar to Q3-2015 (4.8%), in line

with the consensus (4.7%), but slightly below our expectations. Cost-cutting

measures will deliver EUR900m over the year.

Strong operational project execution, particularly in Subsea, with the final delivery

of many of them (including Stones), has prompted Technip to raise its 2016

guidance slightly (Subsea revenue > EUR5bn and operating profit roughly

EUR700m, vs EUR4.7bn-5bn and roughly EUR680m). For 2017 and beyond,

quarterly order intake is stable, but Technip cites an upsurge in customer interest,

notably in Subsea, for long distance field connections to reduce investment costs.

Thus, Technip, which will have many Subsea projects in delivery phase in 2017,

expects to maintain its level of Subsea margins next year on a decline in revenue

(we are forecasting a 10% decline in revenue and an operating margin of 15%, vs

14.87% in 9M-2016), and to increase its Onshore Offshore operating margin, on

revenue down slightly (we are forecasting revenue down 5% and a 6% operating

margin).

Conclusion & Action: Technip’s outlook, with the merger with FMC set to close

in January 2017, remains very bright. Technip remains our top pick in the sector.

Analyst(s):

Jean-Luc Romain, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 66

Buy

59.19


67.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TECF.PA/TEC FP



Free float 85%









Sales (m) 12,209 11,193 10,368

EBITDA (m) 627 1,191 1,205


EBIT (m) 331 900 921

EBIT margin 2.7% 8.0% 8.9%


ROCE 2.5% 14.9% 15.3%

Net debt/(cash) (m) (24) (356) (697)

Net Debt/Equity 0.0 -0.1 -0.1



EV/Sales 0.4 0.6 0.6

EV/EBITDA 8.6 5.7 5.3

EV/EBITDA (adj.) 8.6 5.7 5.3

EV/EBIT 16.3 7.5 7.0

P/E (adj.) 10.2 13.1 12.6

P/BV 1.4 1.7 1.6

OpFCF yield 9.9% 8.0% 8.3%


EPS (adj.) 4.46 4.51 4.69

BVPS 33.20 35.60 38.09

DPS 2.10 2.21 2.32

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vvdsvdvsdy

TECHNIP CAC 40 (Rebased)Source: Factset

Shareholders: Oppenheimer Funds 5%; ING Group NV

5%; Employees 1.90%; Treasury stock

3%;

of 69


Vopak

Netherlands/Oil Services Analyser

OIL SERVICES

Vopak (Buy) Q3 results better than expected, 2016 outlook raised Buy

46.08


52.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg VOPA.AS/VPK NA



Free float 33%









Sales (m) 1,492 1,389 1,417

EBITDA (m) 755 723 732

EBITDA margin 50.6% 52.1% 51.7%

EBIT (m) 495 464 469

EBIT margin 33.2% 33.4% 33.1%


ROCE 11.6% 16.1% 16.0%

Net debt/(cash) (m) 2,296 1,642 1,320




EV/Sales 5.5 6.1 5.8

EV/EBITDA 11.0 11.7 11.2

EV/EBITDA (adj.) 10.2 9.9 9.4

EV/EBIT 16.7 18.3 17.4

P/E (adj.) 18.1 15.7 14.8

P/BV 2.6 2.6 2.2

OpFCF yield 4.6% 7.7% 8.4%


EPS (adj.) 2.19 2.94 3.11

BVPS 15.54 18.06 20.64

DPS 0.77 1.03 1.09

Updates estimates and target + VTTI deal read through

The facts: We have updated our estimates leading to modest upward revisions,

which also applies to our DCF model with updated estimates and assumptions for

certain variables. This leads to our price target going from EUR 51 per share to

EUR 52 per share.

Apart from the tweaking of our model, we note the proposed transaction between

Buckeye Partners LP and VTTI bv, the MLP that owns and manages liquid bulk

terminals in 13 terminals on 5 continents with a total capacity of 8.6m cbm.

Buckeye is offering USD 1.15bn for 50% of VTTI bv, which implies an EV/EBITDA

for FY17 of around 11x. This is more or less confirmed by Buckeye which states

in the presentation that the anticipated long term acquisition multiple is below 10x.

Given the growth of VTTI in the past (capacity increased by CAGR of 40% in last

10 years, not all organic).

Our analysis: In the last 12 months June 2016, Vopak generated proportionate

EBITDA of EUR 919m. If we adjust that EBITDA for divestments (UK) and then

apply the 11x multiple of the Buckeye VTTI transaction and deduct net debt of

EUR 1.8bn (1H16), we get to an equity value of around EUR 8.1bn or around

EUR 64 per share.

We realize that VTTI is an MLP with certain fiscal advantages (no corporate tax

applies) that make it an attractive vehicle leading to higher than normal multiples.

We also realize that valuations in the US are per definition between 5-10% higher

than in Europe. However, even taking all of that into account, this transaction

shows that Vopak at the moment is undervalued.

Vopak will report 3Q16 earnings on November 4th

.

Conclusion & Action: The twisting and tweaking of our model results in a

modest uptick to our price target, which moves from EUR 51 to EUR 52 per

share. The Buckeye – VTTI transaction shows that the valuation of Vopak at the

moment is still undemanding and leaves material upside. Especially if Vopak is

able to add new projects or expands existing projects, which we think the

company will be able to do given market characteristics and its own track record.

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vvdsvdvsdy

VOPAK Midkap (Rebased)Source: Factset Shareholders: HAL 47%; ING 5%; Aviva 5%; ASR

0.00%;

Analyst(s):

Martijn den Drijver, NIBC Markets N.V.

[email protected]

+312 0 5508636

of 69


Altran

France/Software & Computer Services Analyser


Altran (Buy) Updates estimates and target + VTTI deal read through

Q3-2016 revenue in line

The facts: Altran has reported Q3-2016 revenue of EUR501m, with organic

growth of 3.7% (+5.1% economic), in line (CMCIC: EUR509m; consensus:

EUR504m).

Our analysis: By geography, momentum remained strong in France, where

business continued to grow at a sustained pace (+5.8% economic, +4.6% total)

despite a negative trading day effect (-0.9%). In Northern Europe, business

increased slightly (+1.3% economic), but was backed by the German

restructuring, which seems to be paying off gradually. The trend remains strong in

Southern Europe (+7.4% economic), despite being below the double-digit growth

observed in the last 12 months. Altran reported a “one-time business context” in

Italy, with more information likely in the conference call. Lastly, the rest of the

world delivered sharp growth (+29.2%; +8.8% economic) driven notably by India.

The group also reported an increase in billing rates from 87.2% to 87.5% in Q3-

2016 vs Q3-2015 (+30bp), a better-than-expected improvement (87.3%), which

should boost profitability. For the record, billing rates had stabilised since Q3-

2015 after rising strongly. This no doubt illustrates the improvement of the

German situation, which weighed heavily on this indicator.

Conclusion & Action: These numbers in line with expectations and with no

major trends announced confirm the investment case of our 14 October report.

We will wait for this morning’s conference call at 9am to look further into the

performance by geography, and above all to look at the restructuring in Germany,

which so far seems to be going in the right direction, judging by the recent

acquisitions of Benteler and Swell.

Analyst(s):

Kévin Woringer, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 69

Buy

13.48


15.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ALTR.PA/ALT FP



Free float 76%









Sales (m) 1,945 2,136 2,285

EBITDA (m) 181 220 240


EBIT (m) 155 193 212

EBIT margin 8.0% 9.0% 9.3%


ROCE 11.2% 11.5% 12.2%

Net debt/(cash) (m) 191 251 189




EV/Sales 1.2 1.2 1.1

EV/EBITDA 13.0 11.9 10.6

EV/EBITDA (adj.) 11.3 10.9 9.8

EV/EBIT 15.2 13.5 12.0

P/E (adj.) 17.7 16.4 14.9

P/BV 2.7 2.7 2.4

OpFCF yield 3.7% 3.9% 4.4%


EPS (adj.) 0.70 0.82 0.90

BVPS 4.54 5.07 5.63

DPS 0.15 0.19 0.24

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vvdsvdvsdy

ALTRAN Stoxx Software & Computer Services (Rebased)Source: Factset

Shareholders: Altrafin Participations (Apax Partners)

16%; Alexis KNIAZEFF 4%; Hubert

MARTIGNY 4%; Managers 0.20%;

https://www.cmcics.com/fr/publication/FWEB_Publication.aspx?PerID=0000610005a1a2e4&DocName=315D9FA2BB582EBFDCFEEC0596ED19EB5C47EB

https://www.cmcics.com/fr/publication/FWEB_Publication.aspx?PerID=0000610005a1a2e4&DocName=3E73A0C4B4352CBFDAFDEF0594EB01B54845

https://www.cmcics.com/fr/publication/FWEB_Publication.aspx?PerID=0000610005a1a2e4&DocName=3E73A0C4B4352CBFDAFDEF0A9FE801B54845

of 69


ICT Group

Netherlands/Software & Computer Services Analyser


ICT Group (Accumulate) Q3-2016 revenue in line Accumulate

10.31


11.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg ICTA.AS/ICT NA



Free float 29%









Sales (m) 72 86 97

EBITDA (m) 7 10 11


EBIT (m) 5 7 9

EBIT margin 7.4% 8.6% 9.3%


ROCE 12.7% 12.2% 14.9%

Net debt/(cash) (m) (4) 1 (5)

Net Debt/Equity -0.1 0.0 -0.1

Debt/EBITDA -0.5 0.1 -0.5


EV/Sales 0.9 1.1 0.9

EV/EBITDA 9.3 10.1 8.0

EV/EBITDA (adj.) 9.3 10.1 8.0

EV/EBIT 12.5 13.0 10.0

P/E (adj.) 15.0 15.2 12.1

P/BV 2.1 2.1 2.0

OpFCF yield 7.5% 6.7% 8.5%


EPS (adj.) 0.56 0.68 0.85

BVPS 4.06 4.85 5.25

DPS 0.24 0.27 0.34

Ongoing good revenue growth, guidance reiterated

The facts: ICT Group published its 3Q16 trading update. Revenues increased

23% of which 5% organically. EBITDA increased 27% to EUR 2.1m. Full year

outlook reiterated: increase of 25-35% in EBITDA.

ICT, EURm 3Q15 3Q16 % change

Revenues 17.1 21.0 23%

EBITDA 1.7 2.1 27%

EBITDA margin 9.9% 10.0%

Source: ICT Group, NIBC Markets Research

Our analysis: Revenue growth was a bit better than expected with the difference

being a higher than expected organic revenue growth, i.e. 5% reported versus 3%

expected. We anticipated a levelling off of organic revenue growth as the

comparison base with last year is getting tougher but the reported 5% is strong.

All subsidiaries contributed to this growth. Within ICT Netherlands, productivity

levels in Q3 have been comparable to last year, but ICT increased average rates

and achieved better project results, which resulted in higher revenues. Strypes

Bulgaria continued double digit growth.

Several acquisitions added 18% to revenues with Nozhup being consolidated as

from 1 September.

EBITDA rose 27% reflecting a margin increase of ‘only’ 10bps. Given the good

organic revenue growth, operating leverage is pushing margins up and also the

consolidation of higher margin Nozhup will have had a positive impact on

margins, albeit consolidated for just 1 month in Q3. On the other hand, ICT is

investing heavily in its organisation in Bulgaria, as it did in the first half, which

temporarily pressures margins.

As expected, ICT reiterated its full year outlook of an improvement in EBITDA of

25-35%, including the contribution of Nozhup. Our current estimates assume 36%

growth in EBITDA, which might be a bit too optimistic.

Conclusion & Action: The third quarter trading update showed that the improved

market trends have continued with ICT reporting a strong 5% organic revenue

growth. Margin improvement of 10bps to 10% seems modest but ICT is investing

in its organisation in Bulgaria which temporarily pressures margins. As expected,

ICT reiterated its full year guidance of an increase in EBITDA of 25-35%. ICT

continues to execute its strategy which is focused on organic growth and growth

through acquisitions. ICT is valued at an EV/EBITDA of 8.0 for 2017E, reflecting a

small discount to international peers. We have an Accumulate recommendation

with price target of EUR 11.50.

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vvdsvdvsdy

ICT GROUP Amsterdam Small Cap Index (Rebased)Source: Factset Shareholders: Darlin 10%; Fidelity 10%; Quellhorst 7%;

Delta Lloyd Deelnemingen 6%;

Langendoen 5%; Invesco 5%; Navitas

5%; M. van Wettum 5%;

Analyst(s):

Johan van den Hooven, NIBC Markets N.V.

[email protected]

+312 0 5508518

of 69


Ei Towers

Italy/Support Services Analyser

SUPPORT SERVICES

Ei Towers (Accumulate) Ongoing good revenue growth, guidance reiterated

Q3 2016 Pre: uneventful quarter in sight

The facts: Q3 2016 preview (publication on November 3).

Our analysis: we expect another quarter of modest growth and increasing

margins driven by M&A, operating leverage and efficiency obtained at the

acquired towers. We highlight that in Q1 the company booked a EUR 1.2m capital

gain on the disposal of a building, which contributed to the total revenues and

also to the "adjusted EBITDA line" according to the company definition (which

however excluded EUR 0.3m one-off costs related to M&A deals). On the other

hand, Q2 saw some exceptional costs related to the offer on Inwit and to other

due-diligence on potential international expansion. We don't see in Q3 any

meaningful deviation in the operating trends, nor significant exceptional items.

We expect the net debt position to have improved by around EUR 10m since

June 30, 2016.

EI Towers 9m 2016 Preview (EUR m)

Q3 15a Q3 16e Y/Y 9m 15a 9m 16e Y/Y

Core Revenues 60.5 62.5 3.4% 179.8 186.3 3.6%

EBITDA adj 29.2 30.4 3.9% 84.9 91.0 7.2%

Margin 48.4% 48.6% 0.2pp 47.2% 48.8% 1.6pp

EBITDA rep 28.8 30.4 5.5% 81.8 88.5 8.3%

EBIT 19.2 20.0 4.3% 54.0 58.9 9.2%

Margin 31.7% 32.1% 0.3pp 30.0% 31.6% 1.6pp

Net Income 11.5 11.9 4.1% 31.7 34.8 9.6%

Net debt 104 115 10.0% 104 115 10.0%

Source: Company data, BANCA AKROS estimates

Outlook. FY 2016 targets were confirmed with H1 2016 publication: 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 94 new sites,

contributing an annual EBITDA of EUR 2.2m, at a cost of EUR 18m (Enterprise

value). The implied multiple was8.2x EV/EBITDA vs. 11.5x 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, stating next

September. This remuneration is consistent with small M&A campaign. The target

leverage is 2.5x debt/EBITDA.

Conclusion & Action: we expect solid results. We believe the recent share price

correction offers an interesting entry point; we argue that the market concerns'

over the Premium fate are overstated.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Accumulate

43.21


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 10.1 8.8

EV/EBITDA (adj.) 15.2 10.1 8.8

EV/EBIT 23.6 14.8 12.3

P/E (adj.) 34.2 23.9 20.0

P/BV 2.8 1.8 1.8

OpFCF yield 1.1% 1.7% 7.0%


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 69


Lassila & Tikanoja

Q3/2015a Growth

EURm Q3a OP OP OP OP

Environmental Services 68.2 66 65 2% 261 267 273

Industrial Services 23.9 21 21 2% 79 80 82

Facility Services 71.5 72 71 2% 291 297 303

Renewable Energy Sources 5.3 5 6 -2% 37 37 37

Inter-division sales -2.9 -2 -2 3% -9 -9 -9

Total sales 166.0 163 160 2% 658 673 687

Sales growth 1.8 % 2.3 % 2.1 %

EBIT

Environmental Services 10.2 10.3 11 -7% 34 37 40

Industrial Services 3.4 2.6 3 -10% 6 7 8

Facility Services 6.1 6.2 5 24% 14 16 17

Renewable Energy Sources 0.1 0.2 1 -67% 1 2 2

Inter-division sales -0.7 -0.7 0 600% -3 -4 -4

Total EBIT 19.1 18.6 19.5 -5% 52 58 62

Total EBIT margin 11.5 % 11.4 % 12.2 % 7.9 % 8.5 % 9.1 %#DIV/0!

PTP 18.7 18.3 18.6 -1.6 % 52 56 61

EPS 0.39 0.38 0.38 -1.7 % 1.15 1.13 1.22#DIV/0!

DPS #DIV/0! 0.85 0.85 0.90

Source : OP

2017eQ3/2016e 2016e 2018e

Lassila & Tikanoja

Finland/Support Services Analyser

SUPPORT SERVICES

Lassila & Tikanoja (Accumulate) Q3 2016 Pre: uneventful quarter in sight

Stability is essential

The facts: Lassila&Tikanoja’s sales increased in Q3 by 4% and EBIT reduced by

0.6 percentage points to11.5%. The actual results were well in line with our

forecast and consensus. The revisions in the earnings forecasts for 2016–2018

were minor as a result of the Q3 results.

Our analysis: The increase in the sales of Environmental Services (+5.4%) was

not enough to compensate for the price pressure caused by reduced secondary

raw material prices, and the division’s margin reduced by two percentage points

to 15.0%. Over the past couple of months, the prices of several raw materials

have started to rise supported by the increase of the oil price, and according to

our estimate, the margin of Environmental Services will start to increase in the

comparison at the annual level as of Q4/16.

The upward performance of Facility Services continued as a result of the

efficiency programmes carried out earlier. During the first nine months in 2016,

the division’s earnings level has increased by nearly 60%.

Lassila&Tikanoja is characterised by stability, the focus of its business in Finland,

and a high dividend yield. The positive trend in the Finnish economy and a solid

balance sheet create a foundation for growth in 2017 and a profit distribution that

favours shareholders.

Conclusion & Action: We maintain our target price at EUR 21.00 and our

Accumulate recommendation. Our target price is based on the peer group's 2016

P/E valuation.

Analyst(s):

Henri Parkkinen, OP Corporate Bank

[email protected]

+358 10 252 4409

Accumulate

19.15


21.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg LAT1V.HE/LAT1V FH



Free float 100%









Sales (m) 646 661 676

EBITDA (m) 92 93 98

EBITDA margin 14.2% 14.1% 14.5%

EBIT (m) 52 53 58

EBIT margin 8.0% 8.0% 8.5%


ROCE 14.6% 14.3% 15.8%





EV/Sales 1.2 1.2 1.1

EV/EBITDA 8.2 8.4 7.9

EV/EBITDA (adj.) 8.1 8.4 7.8

EV/EBIT 14.5 14.9 13.4

P/E (adj.) 17.5 16.5 16.8

P/BV 3.3 3.3 3.2

OpFCF yield 6.0% 4.3% 5.7%


EPS (adj.) 1.04 1.16 1.14

BVPS 5.45 5.76 6.05

DPS 0.85 0.85 0.85

14.0

14.5

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19.0

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vvdsvdvsdy

LASSILA & TIKANOJA OMXH (Rebased)Source: Factset

Shareholders: Evald ja Hilda Nissin Säätiö 6%;

Mandatum Henkivakuutusosakeyhtiö 6%;

Nordea-rahastot 6%;

of 69


ASM International

Netherlands/Technology Hardware & Equipment Analyser


ASM International (Buy) Stability is essential Buy

38.32


40.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ASMI.AS/ASM NA



Free float 51%









Sales (m) 670 589 648

EBITDA (m) 136 108 137

EBITDA margin 20.3% 18.3% 21.2%

EBIT (m) 106 84 115

EBIT margin 15.9% 14.3% 17.7%


ROCE 42.6% 34.0% 44.7%

Net debt/(cash) (m) (447) (421) (524)


Debt/EBITDA -3.3 -3.9 -3.8


EV/Sales 2.7 3.2 2.7

EV/EBITDA 13.2 17.6 12.7

EV/EBITDA (adj.) 13.2 17.6 12.7

EV/EBIT 16.9 22.6 15.2

P/E (adj.) 16.7 17.1 13.8

P/BV 1.2 1.3 1.2

OpFCF yield 4.6% 4.8% 6.7%


EPS (adj.) 2.17 2.24 2.77

BVPS 29.95 30.17 32.68

DPS 0.70 0.70 0.84

Q3 numbers ok; outlook weakish

The facts: ASMI reported Q3 results; conference call at 15:00 hours CET.

ASMI Results Q315A Q1 16 A Q216A Q316E Q316C Q316A Q416E

Revenues 162,0 142,4 138,7 145,0 143,7 144,2 164,0

Gross profit 70,7 62,4 60,8 63,0 63,4 63,7 69,5

Gross margin 43,6% 43,8% 43,8% 43,4% 44,1% 44,2% 42,3%

SG&A 24,0 22,5 21,0 20,5 0,0 -21,4 19,7

R&D 23,5 23,8 22,1 22,0 0,0 -24,2 20,5

Total op expenses 47,5 46,8 43,1 42,5 0,0 46,9 39,7

Operating profit 23,2 15,6 16,7 20,5 19,6 16,8 35,2

Operating margin 14,3% 11,0% 12,0% 14,1% 13,6% 11,7% 21,4%

Financial income 2,4 -11,3 4 0,0 -3,0 9,3

Pre tax profit 4,3 20,7 20,5 13,8 40,8

Tax 8,7 -1,2 -0,8 -2,0 -0,7 -7,5

ASMPT 1,4 -0,5 9,7 11,3 21,5 20,0 -7,5

Normalized net 42,4 9,4 36,3 36,5 38,2 39,8 0,6

Reported net profit 35,7 2,6 29,6 29,8 33,1 29,6

Our analysis: ASMI reported 3Q16 results that were in line with expectations top

line and in terms of gross margin, but lower than expected on operating profit due

to a bigger than expected R&D line and restructuring costs. The bottom line was

better than expected driven by a better than expected performance of ASMPT.

However the outlook was more cautious than we had expected. Not that much for

FY16 (sales guidance EUR 150-170m, vs our EUR 164m), but more on the

expected recovery of DRAM spending next year (now later in first half) which is

important for ASMI and where we had expected more positive remarks. The

remarks on Foundry/Logic (continue strong) and NAND (3DNAND single batch

double vs 2016 which is very low) were in line with expectations.

ASMI announced a new share buy back plan, as expected, but EUR 50m is not

much in light of the net cash position of EUR 363m. However, we see it as big

enough to signal that ASMI has no immediate acquisition plans (EUR 27m bought

back in Q3). Consolidation is certainly back on the table as a subject in the

deposition segment of Front End equipment makers with Hitachi possibly putting

up Hitachi Kokusai’s semi equipment activities up for sale. We guess that has

attracted attention of all big deposition players and the fit with ASMI is extremely

well (but also with LAM and to a lesser extent AMAT). Anyhow, M&A will probably

become a topic again.

Conclusion & Action: ASMI’s numbers were fine with the outlook somewhat

weaker than we expected for the timing of DRAM spending in 2017. Nevertheless

our visit at Semicon Europe once again demonstrated the importance of ALD for

the industry and the probable growth of this segment in equipment spending in

the coming years. With ASMPT also performing well again, a strong cash

generation in combination with low valuation compared to peers and M&A

potential, we keep very positive on this investment case. Buy; PT 40, up for

revision.

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vvdsvdvsdy

ASM INTERNATIONAL Stoxx Telecom Equipment (Rebased)Source: Factset Shareholders: Mr A. Del Prado 18%; Tokyo Electron

4%; Eminence Capital 10%; Goldman

Sachs 5%; JP Morgan Chase 9%; MFS

5%; ING 3%; Schroders 3%;

Analyst(s):


[email protected]

+312 0 5508569

of 69


Besi

Netherlands/Technology Hardware & Equipment Analyser


Besi (Neutral) Q3 numbers ok; outlook weakish Neutral

31.79


25.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg BESI.AS/BESI NA



Free float 72%









Sales (m) 349 370 407

EBITDA (m) 73 88 83

EBITDA margin 20.8% 23.8% 20.5%

EBIT (m) 58 73 67

EBIT margin 16.6% 19.6% 16.5%


ROCE 22.4% 26.2% 23.4%

Net debt/(cash) (m) (136) (117) (127)


Debt/EBITDA -1.9 -1.3 -1.5

EV/Sales 1.6 2.9 2.6

EV/EBITDA 7.8 12.2 12.8

EV/EBITDA (adj.) 7.8 12.2 12.8

EV/EBIT 9.8 14.8 15.9

P/E (adj.) 14.4 18.7 20.4

P/BV 2.1 3.6 3.4

OpFCF yield 9.4% 3.9% 4.0%


EPS (adj.) 1.29 1.70 1.56

BVPS 8.72 8.79 9.31

DPS 1.20 1.00 1.04

Another strong quarter

The facts: Besi reported Q3 results; conference call at 16:00 hours CET.

Besi key figures 15Q3 16Q2E 16Q2A 16Q3E 16Q3A

Revenue 72,1 98,8 109,0 92,7 94,3

Gross profit 35,1 48,2 55,5 46,0 47,6

Gross margin 48,7% 48,8% 50,9% 49,6% 50,5%

Total opex -28,7 -30,1 -29,1 -28,4 -28,2

Operating income 6,4 18,1 26,3 17,6 19,5

Operating margin 8,9% 18,3% 24,2% 19,0% 20,7%

Financial result 0,8 -0,1 -0,5 -0,1 -0,9

EBT 7,3 18,0 25,8 17,5 18,6

Tax -1,0 -2,0 -1,8 -1,9 -2,1

Tax rate -13,3% -11,0% -6,9% -11,0% -11,3%

Net income (loss) 6,3 16,0 24,0 15,6 16,6

Our analysis: Besi reported strong results again. Revenues came in ahead of

guidance and margins were better than expected as well. Mobile and Automotive

were the most important drivers. Demand for advanced packaging equipment is

on the rise and Besi has a very strong proposition especially in parts of the

market that are growing fastest. Fan out wafer level packaging was the buzz word

in 2016, also at Semicon Europe the last few days, and Besi has a dominant

position in this type of equipment. Biggest clients in the quarter were Taiwanese

and Chinese subcontractors buying Die attach systems (especially epoxy borders

for fingerprint sensor).

Besi initiates a new share purchase plan for 1m shares in addition to the current

program (3.7m shares) that runs to oktober 2017. The comfortable net cash

position of EUR 132m (Q2 EUR 111m) provides more than enough headroom to

return money to shareholders.

Revenue guidance is below our expectations (-10-15%), where we saw a more

sable development, while gross margins will be in the 49-51% range again, in line

with estimates. 2016 was well ahead of industry expectations and 2017 is also

expected to be strong. In general terms also at Semicon Europe it became clear

that the Back End is getting more and more important vs the still dominant Front

End.

Conclusion & Action: Again a very strong quarter for Besi. While the Q4 outlook

is somewhat weaker than expected in revenue terms, we look forward to another

strong year for the back end equipment industry in 2017 and Besi will certainly

benefit from that. We still have to adjust our numbers and PT, but have become

much more positive in the last months. For now, we have a Neutral rating and PT

of EUR 25.

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vvdsvdvsdy

BESI Stoxx Telecom Equipment (Rebased)Source: Factset Shareholders: D. Lindenbergh 3%; Darlin 6%; Via Finis

3%; Kempen Oranje Participaties 6%; JP

Morgan 3%; UBS 3%; LSV 3%; Analyst(s):


[email protected]

+312 0 5508569

of 69


Ingenico

France/Technology Hardware & Equipment Analyser


Ingenico (Buy) Another strong quarter

Mixed trends with no improvement in the outlook

The facts: Ingenico published 2016 Q3 revenue yesterday evening, which came

out at EUR570m, with organic growth of +7%, higher than our anticipations and

those of the consensus (EUR560m/EUR550m respectively).

Our analysis: The company shows very mixed trends, with the US in freefall at -

31% while Europe at +22% and the ePayment activity at +22% both turned in

exceptional performances. The outlook for the end of the year has not improved

for all that, with the growth guidance unchanged at +7%.

North America: no sign of an improvement and revenue coming out well

below expectations for the region. An improvement is not expected before

2017 due to a less challenging comparison base and the potential resumption

of migration in H2 ahead of the new liability shift on 1 April 2018.

Latin America: down 24% over the quarter, the region remains paralysed by

Brazil, even if there has been a very slight improvement in trend (-27% in Q2).

The trend towards stabilisation is likely to continue and to benefit from a

favourable comparison base in Q2-17.

Europe & Africa: up by a sharp +22%, driven by the migration of terminals to

PCI V1 to V3 in the UK and in the Nordic countries. This trend is expected to

decline as migration progresses (PCI V1 HS in 2017).

ePayment: this activity benefited significantly from new contracts, notably

the Alipay contract. Up by +22%, the activity was also driven by sharp growth

in transaction volumes, which can be seen as a one-off factor.

Conclusion & Action: Although this publication is better than expected, the

outlook shows no improvement. Q4 is likely to see a sharp slowdown, as

anticipated. Although the risk of a downward revision for 2017 remains, we feel

the share is undervalued at present (PER 2016/17 of 18.5x and 15.5x vs.

historical level of 25x).

Analyst(s):

Kévin Woringer, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 69

Buy

75.17


112.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg INGC.PA/ING FP



Free float 83%









Sales (m) 2,197 2,296 2,514

EBITDA (m) 436 404 478

EBITDA margin 19.8% 17.6% 19.0%

EBIT (m) 381 346 415

EBIT margin 17.3% 15.1% 16.5%


ROCE 13.5% 12.1% 14.6%

Net debt/(cash) (m) 252 129 (86)


Debt/EBITDA 0.6 0.3 -0.2


EV/Sales 3.3 2.1 1.8

EV/EBITDA 16.8 11.7 9.4

EV/EBITDA (adj.) 16.5 11.6 9.3

EV/EBIT 19.2 13.6 10.8

P/E (adj.) 26.3 18.2 15.3

P/BV 4.8 2.9 2.6

OpFCF yield 3.9% 5.1% 6.4%


EPS (adj.) 4.42 4.12 4.91

BVPS 24.21 26.20 29.22

DPS 1.30 1.25 1.52

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INGENICO Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: BPI France Participations 5%; Allianz

Global Investors 6%; Jupiter 5%;

Treasury shares 0.45%;

of 69


SLM Solutions

Germany/Technology Hardware & Equipment Analyser


SLM Solutions (Buy) Mixed trends with no improvement in the outlook

Fundamentals now in focus

The facts: According to press articles GE reported yesterday evening that the

75% threshold was not reached, GE should give up takeover efforts regarding

AM3D, no new offer expected at this stage

Procedure: GE can now walk away from this deal, already agreed share transfer

from anchor shareholders (in total 31%) will be dissolved, GE in our view is not

interested in minority shareholding, GE can revisit deal after 12m and propose a

new offer.

Fundamental data points to be in focus: we see an increased risk that AM3D

might miss on bottom-line figs in their Q3 and Q4 reporting as AM3D already

softened their revenue guidance (statement after Q1 "expected EUR 85-90m",

statement after Q2 "highly dependent on Q4").

Our analysis: We are expecting EUR 10m for FY16 compared to EUR 12-15m by

consensus.

Conclusion & Action: It seems that AM3D is not a trophy asset for GE as most

analysts and investors expected. We would not be surprised if we see lower

share prices after Q3 reporting (10th Nov). Main risk in our view could be

operational/management distraction during this M&A process and softer order

intake as customers hesitate in placing orders. As a reminder, GE is currently the

largest customer for SLM280 tools. We believe SLM has a rich valuation on our

projected FY17 estimates with 6x P/B, 28x EV/EBITDA, 5x EV/Sales and 55x P/E

ratios.

Analyst(s):

Cengiz Sen, equinet Bank

[email protected]

+4969 58997 435

Buy

37.40


27.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg AM3D.DE/AM3D GY



Free float 68%









Sales (m) 66 86 127

EBITDA (m) 7 10 22

EBITDA margin 10.4% 11.7% 17.3%

EBIT (m) 4 5 16

EBIT margin 5.5% 6.3% 12.9%


ROCE 5.3% 6.5% 12.6%

Net debt/(cash) (m) (45) (35) (28)


Debt/EBITDA -6.6 -3.5 -1.3

Int. cover(EBITDA/Fin. int) 490.0 (287.1) (416.8)

EV/Sales 4.3 7.1 4.9

EV/EBITDA 41.5 61.1 28.3

EV/EBITDA (adj.) 35.5 57.7 28.3

EV/EBIT 78.9 nm 37.8

P/E (adj.) nm nm nm

P/BV 3.4 6.5 5.9

OpFCF yield -7.1% -1.0% -1.1%


EPS (adj.) 0.24 0.29 0.69

BVPS 5.51 5.71 6.35

DPS 0.00 0.00 0.00

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vvdsvdvsdy

SLM SOLUTIONS Tec Dax (Rebased)Source: Factset

Shareholders: Ceresio (H.J. Ihde) 24%; Parcom Dtschld.

I 5%; H. Schöne-born 2%;

of 69


STMicroelectronics

Italy/Technology Hardware & Equipment Analyser


STMicroelectronics (Neutral) Fundamentals now in focus

Q3 & 9M 16 release: positive results

The facts: STM released its Q3 & 9M 2016 results this morning before market

opening. A webcast presentation is scheduled at 9:30 a.m. CET. A live webcast of

the conference call will be available by accessing http://investors.st.com.

Our analysis: As expected Q3 showed first recovery signs in top line with a 1.9%

progress Y/Y, thus leading to -2.2% Y/Y in 9M 16 vs. -4.2% in H1 16. Gross

margin and EBIT recorded initial benefits from restructuring.

Data in USD

m Q2-16A Q3-16A Q/Q Chg Q3-16E Q3-15A Y/Y Chg

Net revenues 1,703 1,797 5.5% 1,797 1,764 1.87%

Gross profit 577.3 643.3 11.4% 636.1 613 4.94%

Gross margin 33.9% 35.8%

35.4% 34.8%

EBIT 28 90 221.4% 98.8 91 -1.10%

EBIT margin 1.6% 5.0%

5.5% 5.2%

All in all results were positive with figures slightly above consensus that was

pointing to the mid-point of the guidance range. The improvement is due to a

better product mix with all division contributing to the improvement also MEMs

picking up. The contribution of a weaker currency combined with new product

ramp up offsetting the ongoing price pressure and higher unused capacity

charges.

Operating improvement is stronger when adjusted for the ongoing restructuring.

Investment and R&D spending still below the announced trend. This provided a

boost to cashflow generation and should be investigated during today analysts

conference call to understand if part is going to be recovered in Q4.

Outlook on Q4-16 – more improvement ahead with revenues up +3.2% +/-

3.5% and a gross margin of 37% +/- 2%.

Conclusion & Action: Positive release slightly above our expectations. Rating

and target price unchanged.

Analyst(s):

Francesco Previtera, Banca Akros

[email protected]

+39 02 4344 4033

Enrico Filippi, CEFA Banca Akros

[email protected]

+39 02 4344 4071

Neutral

7.23


7.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg STM.MI/STM IM



Free float 72%








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

Sales (m) 6,897 6,928 7,143

EBITDA (m) 900 857 1,021

EBITDA margin 13.0% 12.4% 14.3%

EBIT (m) 109 239 405

EBIT margin 1.6% 3.4% 5.7%


ROCE 3.1% 6.7% 8.8%

Net debt/(cash) (m) (494) (487) (551)


Debt/EBITDA -0.5 -0.6 -0.5


EV/Sales 0.8 0.9 0.9

EV/EBITDA 6.0 7.6 6.3

EV/EBITDA (adj.) 5.6 6.5 5.7

EV/EBIT 49.7 27.2 15.9

P/E (adj.) nm 38.7 21.6

P/BV 1.3 1.6 1.5

OpFCF yield 1.8% 3.9% 3.9%


EPS (adj.) 0.11 0.20 0.36

BVPS 5.15 5.04 5.16

DPS 0.40 0.24 0.24

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

vvdsvdvsdy

STMICROELECTRONICS Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: STMicroelectronic holding 28%;

http://investors.st.com/

of 69


KPN Telecom

Netherlands/Telecommunications Analyser

TELECOMMUNICATIONS

KPN Telecom (Buy) Q3 & 9M 16 release: positive results Buy

2.91


3.55



Target price: EUR

Share price: EUR

Reuters/Bloomberg KPN.AS/KPN NA



Free float 65%









Sales (m) 7,008 6,873 6,807

EBITDA (m) 2,324 2,392 2,401

EBITDA margin 33.2% 34.8% 35.3%

EBIT (m) 708 806 856

EBIT margin 10.1% 11.7% 12.6%


ROCE 7.4% 9.5% 10.3%

Net debt/(cash) (m) 7,679 6,498 5,928




EV/Sales 2.9 2.4 2.4

EV/EBITDA 8.7 6.9 6.7

EV/EBITDA (adj.) 8.7 6.9 6.7

EV/EBIT 28.6 20.6 18.7

P/E (adj.) 29.6 16.4 24.8

P/BV 3.0 2.2 2.1

OpFCF yield 6.1% 18.3% 9.5%


EPS (adj.) 0.12 0.18 0.12

BVPS 1.17 1.35 1.36

DPS 0.11 0.34 0.11

3Q16: EBITDA increases YoY but FCF disappoints

The facts: KPN has just reported its 3Q16 earnings, of which the key metrics are

shown below. KPN reiterated its guidance for the full year with an additional

qualification for FCF due to one-off elements. The Simplification program

achieved run-rate annual savings of EUR 405m, a key element in the target of

growing EBITDA.

KPN 3Q15Adj

NIBC

markets

3Q16E

KPN

consensus

3Q16

KPN

actual

2Q16

Sales adj 1,764 1,710 1,707 1,711

EBITDA adjusted 640 624 631 662

EBITDA margin (%) 36.3% 36.5% 37.0% 38.7%

Sales NL 1,551 1,501 1,506 1,518

EBITDA NL 646 620 623 657

EBITDA margin NL 41.7% 41.3% 41.4% 43.3%

Net income 87 39 45

FCF 213 246 146

Source: Company info, NIBC Markets

Our analysis: Due to price increases and installed base growth in post-paid and

fixed mobile bundles, revenue for the key Dutch division declined by only 1.9%,

the smallest decline in the last 4 quarters. However, key metrics such as net adds

in broadband and IPTV weakened considerably versus previous quarters

although they did remain in positive territory. Post-paid net adds were better

sequentially (+36k versus +23k in 2Q16) but if we look at the last 5 quarters, there

is a substantial weakening visible in this metric as well. Fixed mobile bundles

grew to 40% of the post-paid base, which provides a strong defence against

competition from Tele2 and Ziggo/Vodafone.

Due to the effects of the Simplification program and sales mix (Consumer

margins advanced by 110 basis points), adjusted EBITDA increased for the Dutch

division by 1.8% to EUR 657m, the first time that EBITDA increased year over

year in over 10 quarters! With more savings to come from Simplification and

further progress in Business, that bodes well for EBITDA.

FCF in 3Q16 disappointed looking at the headline numbers. KPN used EUR 23m

in additional cash for accrued interest on bonds tendered and EUR 40m to obtain

special discounts from suppliers in exchange for shorter payment terms. But even

if we adjust for those elements, FCF disappoints. As usual, KPN uses capex

phasing as an explanation but this is the 3rd

quarter in a row that we hear that

phrase.

Guidance for the full year remains unchanged with EBITDA in line with FY15

(year to date -0.8%), capex of around EUR 1.2bn and FCF > EUR 650m,

excluding one-off effects of the 3rd

quarter (EUR 52m net).

Conclusion & Action: A strong performance for KPN in the 3rd

quarter with

EBITDA of the key Dutch division finally improving after more than 10 quarters of

declines due to sales mix changes and the Simplification program. FCF

disappointed in 3Q16 but as the full year guidance is maintained, KPN’s FCF is

still set to improve considerably YoY, which is a key part of our investment case

which assumes strong growth in shareholder remuneration. KPN also continues

to be undervalued versus its peers while it should be trading at a modest

premium due to de-risking (pensions) and network investments.

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3.6

3.8


vvdsvdvsdy

KPN TELECOM Stoxx Telecommunications (Rebased)Source: Factset Shareholders: America Moviles 20%; Norges Bank 3%;

Paulson 3%; Franklin Mutual 4%; UBS

2%; Analyst(s):

Martijn den Drijver, NIBC Markets N.V.

[email protected]

+312 0 5508636

of 69


Telefonica

Spain/Telecommunications Analyser

TELECOMMUNICATIONS

Telefonica (Accumulate) 3Q16: EBITDA increases YoY but FCF disappoints

Dividend reduced. Results: acceptable

The facts: Telefonica announced reducing the 2016 dividend from

EUR0.75/share to EUR0.55/share (maintaining the EUR0.35 script in November

but reducing the final dividend from EUR0.40 to EUR0.20 in cash). The 2017 DPS

will be EUR0.40/share, to be paid in cash and in two instalments. The company

also released 3Q’16 results.

Our analysis: Results came in at the bottom of consensus in sales, but slightly

better in EBITDA margin.

The most important aspect is the decision expected by the market to reduce

dividends. This measure will allow for some EUR980m savings in 2017 (EUR0.20

per 4,900m shares) but in 2018 it would not be as much as the dividend would be

EUR0.4/share in cash vs. EUR0.20.

Conclusion: Positive decision to cut the dividend, considering that the moment

was questioning the need to pay an 8% dividend yield when debt must be

reduced.

Analyst(s):

Victor Peiro Pérez, GVC Gaesco Beka

[email protected]

+34 91 436 7812

Accumulate

9.25


14.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg TEF.MC/TEF SM



Free float 88%









Sales (m) 47,219 52,442 53,138

EBITDA (m) 11,414 15,831 16,112

EBITDA margin 24.2% 30.2% 30.3%

EBIT (m) 2,897 6,467 6,813

EBIT margin 6.1% 12.3% 12.8%

Net Profit (adj.)(m) 2,745 3,187 3,260

ROCE 6.8% 7.8% 8.5%

Net debt/(cash) (m) 49,921 52,387 50,873




EV/Sales 2.4 2.1 2.0

EV/EBITDA 9.7 6.9 6.7

EV/EBITDA (adj.) 7.8 6.9 6.7

EV/EBIT 38.3 16.8 15.8

P/E (adj.) 18.4 14.3 14.0

P/BV 2.8 2.6 2.7

OpFCF yield -2.6% 11.3% 11.3%


EPS (adj.) 0.56 0.65 0.66

BVPS 3.63 3.54 3.46

DPS 0.75 0.75 0.75

Telefónica 3Q2016 Figures: Growth and Consensus

3Q16 Var Var Org Consens

Revenues 13,080 -5.9% -0.2% 12.900-13.600

OIBDA 4,175 -1.0% 3.1% 3.880-4.220

Margin Ebitda 31.9% +1.6 +1.0 30.1%-32.7%

EBIT 1,718 -5.5% -0.4% 1.570-2.050

Net Income 983 38.5% 460-1000

EPS 0.19 44.8%

Capex 2,362 5.3% -3.8%

Telefonica and BEKA Finance

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0


vvdsvdvsdy

TELEFONICA Stoxx Telecommunications (Rebased)Source: Factset

Shareholders: BBVA 6%; Caixa 5%;

of 69


Int. Airlines Group

Spain/Travel & Leisure Analyser

TRAVEL & LEISURE

Int. Airlines Group (Buy) Dividend reduced. Results: acceptable

Agreement in principle of the NAPS

The facts: British Airways has signed an agreement in principle with the trustees

of its New Airways Pension Scheme (NAPS) on the scheme's regular triennial

valuation. The valuation is based on the scheme's funding position as at March

31, 2015. The main terms of the agreement are:

A technical deficit of GBP 2.8 bn (compared to GBP 2.7 bn at March 31,

2012, which was the basis for the last deficit recovery plan).

British Airways will make fixed deficit contributions of GBP 300 m/year until

2027.

The agreement provides British Airways with the flexibility to make dividend

payments to IAG. It also caps the level of additional contributions the airline

makes, based on its March 31 cash balance in any year, at GBP 150

m/year.

The slight increase in NAPS deficit between March 2012 and March 2015 is due

to a reduction in the interest rates used to discount the scheme's liabilities, partly

offset by contributions and investment returns.

Discussions on the actuarial valuation of the airline's Airways Pension Scheme

(APS) will resume once its current legal case has concluded.

Our analysis: Although there has been a slight increase in the technical deficit,

the difference is not very relevant, so we value positively the news as a relevant

uncertainty has been cleared up. The GBP 100m increase vs. an estimated

OPCF (post WCR) of EUR 18bn for 2016-20 is not a substantial impact.

There is still pending the revision of the APS (which at March 2012 had a

technical deficit of GBP 600m, being the combined one of both plans GBP

3.300m). We may have to slightly raise our estimated annual contributions to

both plans now accounting to EUR 1.9bn in our cash flow projections during

2016-20, but in any case compatible with the two main targets in cash

generation: sustained dividends and financial deleverage. We expect to annually

surpass a contribution of EUR 400/year vs. current range EUR 341-437m/year.

Conclusion and Action: Since we started coverage on IAG the stock has

raised +12% but it is still an attractive value option trading at 2017e EV/EBITDA

<3x vs. sector’s average c. 5x. Tomorrow IAG will release results and on

November 4 hold the CMD.

Analyst(s):

Sonia Ruiz De Garibay, GVC Gaesco Beka

[email protected]

+34 91 436 7841

Buy

4.74


5.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg ICAG.MC/IAG SM



Free float 48%









Sales (m) 22,858 23,154 23,166

EBITDA (m) 3,642 3,894 4,043

EBITDA margin 15.9% 16.8% 17.5%

EBIT (m) 2,335 2,582 2,702

EBIT margin 10.2% 11.2% 11.7%

Net Profit (adj.)(m) 1,539 1,833 1,963

ROCE 12.2% 13.3% 13.7%

Net debt/(cash) (m) 2,774 1,784 925




EV/Sales 0.9 0.5 0.5

EV/EBITDA 5.5 3.1 2.8

EV/EBITDA (adj.) 5.5 3.1 2.8

EV/EBIT 8.6 4.7 4.2

P/E (adj.) 11.0 5.5 5.2

P/BV 3.2 1.5 1.2

OpFCF yield 1.8% 16.9% 16.6%


EPS (adj.) 0.75 0.86 0.92

BVPS 2.56 3.13 3.84

DPS 0.20 0.21 0.24

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0


vvdsvdvsdy

INT. AIRLINES GROUP IBEX 35 (Rebased)Source: Factset

Shareholders: Qatar Airways 20%; Lansdowne 7%;

Standard Life Investment 6%;

of 69


EDP Renováveis

Portugal/Utilities Analyser

UTILITIES

EDP Renováveis (Buy) Agreement in principle of the NAPS

9M16 results preview: comparisons affected by positives one offs in the previous year and increase in financial costs

The facts: EDPR will disclose the 9M16 results on November 3rd before the

market opens and will hold a conference call with analysts on the same day at

14h Lisbon time.

Our analysis: According to our estimates total revenues should increase by 13%

to EUR 1,220m in the 9M16 YoY mostly supported by (i) the increase in

production and (ii) the consolidation of the ENEOP capacity in Portugal since

September 2015. The company already disclosed the operating data for the 9M16

with a 20% growth in production YoY supported by higher capacity (+504 MW

YoY) and higher load factor (29% in 9M16 vs 28% in 9M15). Nevertheless, the

rise in production is expected to be partially offset by the lower average selling

prices in all platforms (pool prices in Spain are down approximately 25% in the

3Q16 and almost 32% in the 9M16) and the new capacity in Portugal and US with

lower prices.

The EBITDA is expected to improve by 10% with the EBITDA margin remaining declining from 72.4% to 70.2%. We highlight that in 2015 the EBITDA was positively impacted by the capital gain booked following the transaction with ENEOP’s assets.

The increase in the lines below the EBITDA namely financial costs and minorities

will lead to a 63% YoY drop in the net profit from EUR 100m in 9M15 to EUR 37m

in 9M16.

Conclusion & Action: The 3Q of the year is typically a weak quarter due to the

seasonality of the wind resources; this year’s comparisons are affected by

positive one-offs in the 9M15, impairments already booked in the 1H16 and the

decrease in the lower average selling price.

Analyst(s):

Helena Barbosa, Caixa-Banco de Investimento

[email protected]

+351 21 389 6831

Buy

7.02


7.70



Target price: EUR

Share price: EUR

Reuters/Bloomberg EDPR.LS/EDPR PL



Free float 23%









Sales (m) 1,547 1,750 1,865

EBITDA (m) 1,142 1,252 1,337

EBITDA margin 73.8% 71.5% 71.7%

EBIT (m) 578 655 715

EBIT margin 37.3% 37.4% 38.3%


ROCE 3.4% 3.8% 4.0%

Net debt/(cash) (m) 3,784 3,858 3,956




EV/Sales 6.7 5.8 5.5

EV/EBITDA 9.0 8.1 7.7

EV/EBITDA (adj.) 9.0 8.1 7.7

EV/EBIT 17.8 15.5 14.4

P/E (adj.) 38.0 33.0 29.1

P/BV 1.1 1.0 1.0

OpFCF yield 8.3% 0.6% 0.7%


EPS (adj.) 0.19 0.21 0.24

BVPS 6.85 7.02 7.21

DPS 0.04 0.04 0.05

EUR m 9M15 9M16e Var.%

Revenues 1,079 1,220 13%

Portugal 128 215 68%

Spain 273 268 -2%

RoE 198 194 -2%

North America 465 514 11%

Brazil 16 27 72%

Other 1 2 n.m.

EBITDA 782 857 10%

EBITDA margin 72.4% 70.2%

Portugal 208 179 -14%

Spain 187 179 -4%

RoE 146 137 -7%

North America 282 361 28%

Brazil 9 19 105%

Other -51 -18 n.m.

Depreciation & Prov. 408 442 8%

EBIT 374 415 11%

Financial results -211 -262 24%

EBT 163 153 -6%

Income taxes -15 -38 155%

Minorities 48 78 62%

Net profit 100 37 -63%

5.4

5.6

5.8

6.0

6.2

6.4

6.6

6.8

7.0

7.2

7.4


vvdsvdvsdy

EDP RENOVÁVEIS Stoxx Utilities (Rebased)Source: Factset

Shareholders: EDP 78%;

of 69


Terna

Italy/Utilities Analyser

UTILITIES

Terna (Neutral) 9M16 results preview: comparisons affected by positives one offs in the previous year and increase in financial costs

Not on the seaside this summer

The facts: according to the press, State Grid International Development of Hong

Kong has made the highest offer for ADMIE.

Our analysis: we remind readers that a consortium made of Terna and F2i had

submitted a binding offer for the acquisition of 24% of the capital of ADMIE, in

compliance with the tender procedure launched on 12 July 2016 by Public Power

Corporation (PPC), the owner of ADMIE.

ADMIE is the Hellenic electricity transmission system operator and it owns and

operates the national interconnected electricity transmission system, composed

by 11,529 km of transmission lines with a voltage of 66 – 400 kV and 310 high

voltage substations.

According to “Il Sole 24 Ore”, the offer made by the Italian consortium was in the

range of EUR 200m, which meant around EUR 100m capital commitment for

Terna.

According to the press, State Grid International Development of Hong Kong

offered around EUR 320m for the 24% of ADMIE.

Conclusion & Action: according to the press the offer made by the Chinese

group is the highest received by PPC, and thus the Italian consortium ought to be

out of the game. The timetable for the sale entails the choice of the buyer by the

end of October, while the closing is expected in Q1 17. The acquisition of a stake

in the Grrek TSO would be consistent with Terna’s goal to improve its

international presence in a rigorous manner. We remind readers that Terna’s

2016-2019 business plan foresees a financial commitment of around EUR

150/200m to pursue international projects able to support growth and value

creation in the long-term. We confirm our neutral stance on the stock.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Neutral

4.45


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 8.4 8.1

EV/EBITDA 11.6 11.6 11.0

EV/EBITDA (adj.) 11.6 11.6 11.0

EV/EBIT 17.5 17.8 16.8

P/E (adj.) 16.1 15.6 14.0

P/BV 2.9 2.6 2.4

OpFCF yield 0.2% 1.1% 3.2%


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

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

vvdsvdvsdy

TERNA Stoxx Utilities (Rebased)Source: Factset

Shareholders: Cassa Depositi e Prestiti 30%;

of 69


European Coverage of the Members of ESN

A ero space & D efense M em(*) Bcp CBI Kemira OPG Corbion NIBC

Airbus Group CIC Bnp Paribas CIC Linde EQB Danone CIC

Dassault Aviation CIC Bper BAK Tikkurila OPG Ebro Foods GVC

Latecoere CIC Bpi CBIElectro nic & Electrical

EquipmentM em(*) Enervit BAK

Leonardo BAK Caixabank GVC Alstom CIC Fleury M ichon CIC

Lisi CIC Commerzbank EQB Areva CIC Forfarmers NIBC

M tu EQB Credem BAK Euromicron Ag EQB Heineken NIBC

Ohb Se EQB Credit Agrico le Sa CIC Kontron EQB Hkscan OPG

Safran CIC Creval BAK Legrand CIC La Doria BAK

Thales CIC Deutsche Bank EQB Neways Electronics NIBC Lanson-Bcc CIC

Zodiac Aerospace CIC Deutsche Pfandbriefbank EQB Nexans CIC Laurent Perrier CIC

A irlines M em(*) Eurobank IBG Pkc Group OPG Ldc CIC

Air France Klm CIC Ing Group NIBC Rexel CIC Naturex CIC

Finnair OPG Intesa Sanpaolo BAK Schneider Electric Se CIC Olvi OPG

Lufthansa EQB M ediobanca BAK Vaisala OPG Parmalat BAK

A uto mo biles & P arts M em(*) M erkur Bank EQB Viscom EQB Pernod Ricard CIC

Bittium Corporation OPG National Bank Of Greece IBG F inancial Services M em(*) Raisio OPG

Bmw EQB Natixis CIC Anima BAK Refresco Group NIBC

Brembo BAK Nordea OPG Athex Group IBG Remy Cointreau CIC

Continental EQB Piraeus Bank IBG Azimut BAK Vidrala GVC

Daimler Ag EQB Poste Italiane BAK Banca Generali BAK Vilmorin CIC

Elringklinger EQB Societe Generale CIC Banca Ifis BAK Viscofan GVC

Faurecia CIC Ubi Banca BAK Banca Sistema BAK Vranken Pommery M onopole CIC

Ferrari BAK Unicredit BAK Bb Biotech EQB Wessanen NIBC

Fiat Chrysler Automobiles BAK B asic R eso urces M em(*) Binckbank NIBC F o o d & D rug R etailers M em(*)

Landi Renzo BAK Acerinox GVC Bolsas Y M ercados Espanoles Sa GVC Ahold NIBC

Leoni EQB Altri CBI Capman OPG Carrefour CIC

M ichelin CIC Arcelormittal GVC Christian Dior CIC Casino Guichard-Perrachon CIC

Nokian Tyres OPG Corticeira Amorim CBI Cir BAK Dia GVC

Norma Group EQB Ence GVC Comdirect EQB Jeronimo M artins CBI

Piaggio BAK Europac GVC Corp. Financiera Alba GVC Kesko OPG

Plastic Omnium CIC M etka IBG Deutsche Boerse EQB M arr BAK

Sogefi BAK M etsä Board OPG Deutsche Forfait EQB M etro CIC

Stern Groep NIBC M ytilineos IBG Eq OPG Sligro NIBC

Valeo CIC Outokumpu OPG Euronext CIC Sonae CBI

Volkswagen EQB Semapa CBI Ferratum EQB General Industria ls M em(*)

B anks M em(*) Ssab OPG Finecobank BAK 2G Energy EQB

Aareal Bank EQB Stora Enso OPG Grenke EQB Aalberts NIBC

Abn Amro Group Nv NIBC Surteco EQB Hypoport Ag EQB Accell Group NIBC

Aktia OPG The Navigator Company CBI M lp EQB Ahlstrom OPG

Alpha Bank IBG Tubacex GVC Ovb Holding Ag EQB Arcadis NIBC

Banca Carige BAK Upm-Kymmene OPG Patrizia Ag EQB Aspo OPG

Banca M ps BAK B io techno lo gy M em(*) Rallye CIC Huhtamäki OPG

Banco Popolare BAK 4Sc EQB Unipol Gruppo Finanziario BAK Kendrion NIBC

Banco Popular GVC Cytotools Ag EQB F o o d & B everage M em(*) Nedap NIBC

Banco Sabadell GVC Epigenomics Ag EQB Acomo NIBC Pöyry OPG

Banco Santander GVC Wilex EQB Atria OPG Prelios BAK

Bankia GVC C hemicals M em(*) Bonduelle CIC Rubis CIC

Bankinter GVC Air Liquide CIC Campari BAK Saf-Holland EQB

Bbva GVC Holland Colours NIBC Coca Cola Hbc Ag IBG Serge Ferrari Group CIC

of 69


Siegfried Holding Ag EQB H o useho ld Go o ds M em(*) Axa CIC Thermador Groupe CIC

Tkh Group NIBC Bic CIC Banca M edio lanum BAK Titan Cement IBG

Wendel CIC De Longhi BAK Catto lica Assicurazioni BAK Trevi BAK

General R etailers M em(*) Fila BAK Delta Lloyd NIBC Uponor OPG

Banzai BAK Osram Licht Ag EQB Generali BAK Vicat CIC

Beter Bed Holding NIBC Seb Sa CIC Hannover Re EQB Vinci CIC

Elumeo Se EQB Zumtobel Group Ag EQB M apfre Sa GVC Yit OPG

Fielmann EQB Industria l Engineering M em(*) M unich Re EQB M edia M em(*)

Folli Fo llie Group IBG Accsys Technologies NIBC Nn Group Nv NIBC Ad Pepper EQB

Fourlis Holdings IBG Aixtron EQB Sampo OPG Alma M edia OPG

Groupe Fnac Sa CIC Ansaldo Sts BAK Talanx Group EQB Atresmedia GVC

Inditex GVC Biesse BAK Unipolsai BAK Axel Springer EQB

Jumbo IBG Cargotec Corp OPGM aterials, C o nstruct io n &

InfrastructureM em(*) Brill NIBC

M acintosh NIBC Cnh Industrial BAK Abertis GVC Cofina CBI

Rapala OPG Danieli BAK Acs GVC Cts Eventim EQB

Stockmann OPG Datalogic BAK Aena GVC Editoriale L'Espresso BAK

Yoox Net-A-Porter BAK Deutz Ag EQB Aeroports De Paris CIC Gl Events CIC

H ealthcare M em(*) Dmg M ori Seiki Ag EQB Astaldi BAK Havas CIC

Amplifon BAK Duro Felguera GVC Atlantia BAK Impresa CBI

Bayer EQB Emak BAK Bilfinger Se EQB Ipsos CIC

Biotest EQB Exel Composites OPG Boskalis Westminster NIBC Jcdecaux CIC

Diasorin BAK Gesco EQB Buzzi Unicem BAK Lagardere CIC

Fresenius EQB Ima BAK Caverion OPG M 6-M etropole Television CIC

Fresenius M edical Care EQB Interpump BAK Cramo OPG M ediaset BAK

Gerresheimer Ag EQB Kone OPG Eiffage CIC M ediaset Espana GVC

Korian CIC Konecranes OPG Ellaktor IBG Notorious Pictures BAK

M erck EQB Kuka EQB Eltel OPG Nrj Group CIC

Orio la-Kd OPG M anz Ag EQB Ezentis GVC Publicis CIC

Orion OPG M ax Automation Ag EQB Fcc GVC Rcs M ediagroup BAK

Orpea CIC M etso OPG Ferrovial GVC Relx NIBC

Pihlajalinna OPG Outotec OPG Fraport EQB Rtl Group EQB

Recordati BAK Pfeiffer Vacuum EQB Heidelberg Cement Ag CIC Sanoma OPG

Rhoen-Klinikum EQB Ponsse OPG Heijmans NIBC Solocal Group CIC

H o tels, T ravel & T o urism M em(*) Prima Industrie BAK Hochtief EQB Spir Communication CIC

Accor CIC Prysmian BAK Imerys CIC Syzygy Ag EQB

Autogrill BAK Smt Scharf Ag EQB Italcementi BAK Telegraaf M edia Groep NIBC

Beneteau CIC Technotrans EQB Lafargeholcim CIC Teleperformance CIC

Elior CIC Valmet OPG Lehto OPG Tf1 CIC

Europcar CIC Wärtsilä OPG Lemminkäinen OPG Ubisoft CIC

I Grandi Viaggi BAK Zardoya Otis GVC M aire Tecnimont BAK Vivendi CIC

Iberso l CBI Industria l T ranspo rtat io n M em(*) M ota Engil CBI Wolters Kluwer NIBC

Intralo t IBG Bollore CIC Obrascon Huarte Lain GVC Oil & Gas P ro ducers M em(*)

Kotipizza OPG Caf GVC Ramirent OPG Eni BAK

M elia Hotels International GVC Ctt CBI Royal Bam Group NIBC Galp Energia CBI

Nh Hotel Group GVC Deutsche Post EQB Sacyr GVC Gas Plus BAK

Opap IBG Hhla EQB Saint Gobain CIC Hellenic Petro leum IBG

Snowworld NIBC Logwin EQB Salini Impregilo BAK M aurel Et Prom CIC

Sodexo CIC Insurance M em(*) Sias BAK M otor Oil IBG

Sonae Capital CBI Aegon NIBC Sonae Industria CBI Neste Corporation OPG

Trigano CIC Allianz EQB Srv OPG Petrobras CBI

of 69


Qgep CBI Wcm Ag EQB Enav BAK Falck Renewables BAK

Repsol GVC R enewable Energy M em(*) Fiera M ilano BAK Fortum OPG

Total CIC Daldrup & Soehne EQB Lassila & Tikanoja OPG Gas Natural Fenosa GVC

Oil Services M em(*) Gamesa GVC Openjobmetis BAK Hera BAK

Bourbon CIC So ftware & C o mputer Services M em(*)T echno lo gy H ardware &

EquipmentM em(*)Iberdro la GVC

Cgg CIC Affecto OPG Asm International NIBC Iren BAK

Fugro NIBC Akka Technologies CIC Asml NIBC Public Power Corp IBG

Saipem BAK Alten CIC Besi NIBC Red Electrica De Espana GVC

Sbm Offshore NIBC Altran CIC Elmos Semiconductor EQB Ren CBI

Technip CIC Amadeus GVC Ericsson OPG Snam BAK

Tecnicas Reunidas GVC Assystem CIC Gemalto CIC Terna BAK

Tenaris BAK Atos CIC Gigaset EQB

Vallourec CIC Basware OPG Ingenico CIC

Vopak NIBC Cenit EQB Nokia OPG

P erso nal Go o ds M em(*) Comptel OPG Roodmicrotec NIBC

Adidas EQB Ctac NIBC Slm Solutions EQB

Adler M odemaerkte EQB Digia OPG Stmicroelectronics BAK

Amer Sports OPG Docdata NIBC Suess M icrotec EQB

Basic Net BAK Econocom CIC Teleste OPG

Cie Fin. Richemont CIC Ekinops CIC T eleco mmunicat io ns M em(*)

Geox BAK Esi Group CIC Acotel BAK

Gerry Weber EQB Exprivia BAK Deutsche Telekom EQB

Hermes Intl. CIC F-Secure OPG Drillisch EQB

Hugo Boss EQB Gft Technologies EQB Elisa OPG

Interparfums CIC Ict Group NIBC Euskaltel GVC

Kering CIC Indra Sistemas GVC Freenet EQB

L'Oreal CIC Nemetschek Se EQB Kpn Telecom NIBC

Luxottica BAK Neurones CIC M asmovil GVC

Lvmh CIC Nexus Ag EQB Nos CBI

M arimekko OPG Novabase CBI Oi CBI

M oncler BAK Ordina NIBC Ote IBG

Puma EQB Psi EQB Tele Columbus EQB

Safilo BAK Reply BAK Telecom Italia BAK

Salvatore Ferragamo BAK Rib Software EQB Telefonica GVC

Sarantis IBG Seven Principles Ag EQB Telia OPG

Technogym BAK Software Ag EQB Tiscali BAK

Tod'S BAK Sopra Steria Group CIC United Internet EQB

R eal Estate M em(*) Tie Kinetix NIBC Vodafone BAK

Adler Real Estate EQB Tieto OPG Utilit ies M em(*)

Beni Stabili BAK Tomtom NIBC A2A BAK

Citycon OPG Visiativ CIC Acciona GVC

Deutsche Euroshop EQB Wincor Nixdorf EQB Acea BAK

Grand City Properties EQB Suppo rt Services M em(*) Albioma CIC

Hispania Activos Inmobiliarios GVC Asiakastieto Group OPG Direct Energie CIC

Igd BAK Batenburg NIBC Edp CBI

Lar España GVC Bureau Veritas S.A. CIC Edp Renováveis CBI

Realia GVC Cellnex Telecom GVC Enagas GVC

Sponda OPG Dpa NIBC Endesa GVC

Technopolis OPG Edenred CIC Enel BAK

Vib Vermoegen EQB Ei Towers BAK Eydap IBG

LEGEND: BAK: Banca Akros; CIC: CM CIC Market Solutions; CBI: Caixa-Banca de Investimento; GVC: GVC Gaesco Beksa, SV, SA; EQB: Equinet bank; IBG: Investment Bank of

Greece, NIBC: NIBC Markets N.V: OPG: OP Corporate Bank:; as of 1st September 2016

of 69


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: 27th October 2016 9 :10am CET First date and time of dissemination: 27th October 2016 9 :12am CET

Disclaimer: These reports have been prepared and issued by the Members of

European Securities Network LLP (‘ESN’). ESN, its Members and their

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(www.esnpartnership.eu) or refer to the ESN Members website. Additional

information is always available upon request. For additional information

and individual disclaimers please refer to www.esnpartnership.eu and

to each ESN Member websites:

www.bancaakros.it regulated by the CONSOB - Commissione Nazionale per le Società e la Borsa

www.caixabi.pt regulated by the CMVM - Comissão do Mercado de Valores Mobiliários

www.cmcicms.com regulated by the AMF - Autorité des marchés financiers

www.equinet-ag.de regulated by the BaFin - Bundesanstalt für Finanzdienstleistungsaufsicht

www.ibg.gr regulated by the HCMC - Hellenic Capital Market Commission

www.nibcmarkets.com regulated by the AFM - Autoriteit Financiële Markten

www.op.fi regulated by the Financial Supervision Authority

www.valores.gvcgaesco.es regulated by CNMV - Comisión Nacional del Mercado de Valores

Members of ESN (European Securities Network LLP)

Caixa-Banco de Investimento

Rua Barata Salgueiro, nº 33

1269-057 Lisboa

Portugal

Phone: +351 21 313 73 00

Fax: +351 21 389 68 98

GVC Gaesco Beka, SV, SA

C/ Marques de Villamagna 3

28001 Madrid

Spain

Phone: +34 91 436 7813

Investment Bank of Greece

32 Aigialeias Str & Paradissou,

151 25 Maroussi,

Greece

Tel: +30 210 81 73 383

Banca Akros S.p.A.

Viale Eginardo, 29

20149 MILANO

Italy

Phone: +39 02 43 444 389

Fax: +39 02 43 444 302

NIBC Markets N.V.

Nieuwezijds Voorburgwal 162

P.O.Box 235

1000 AE Amsterdam

The Netherlands

Phone: +31 20 550 8500

Fax: +31 20 626 8064

CM - CIC Market Solutions

6, avenue de Provence

75441 Paris

Cedex 09

France

Phone: +33 1 53 48 80 78

Fax: +33 1 53 48 82 25

equinet Bank AG

Gräfstraße 97

60487 Frankfurt am Main

Germany

Phone:+49 69 – 58997 – 212

Fax:+49 69 – 58997 – 299

OP Corporate Bank plc

P.O.Box 308

Teollisuuskatu 1, 00013 Helsinki

Finland

Phone: +358 10 252 011

Fax: +358 10 252 2703

http://www.bancaakros.it/

http://www.caixabi.pt/

https://mail.esnpartnership.eu/owa/redir.aspx?C=8Zt3eXAOIkqYEQDE_-yjO4gceHQnAtMIAKuq5wlXoeMctWfJzR5HnUAHD5WapHeCCa8AyfgTFB4.&URL=http%3a%2f%2fwww.cmcicms.com

http://www.equinet-ag.de/

http://www.ibg.gr/

http://www.nibcmarkets.com/

http://www.op.fi/

http://www.valores.gvcgaesco.es/

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