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Investment Research

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

ESN Analyser

Investment Research

11 November 2016

DEAR CLIENT,

INVITATION

“31st ESN EUROPEAN CONFERENCE”

London, 13 December 2016

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

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

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

ESN Top Picks

Roadshows

Corporate Events

Tactical Sector Views

RECOMMENDATION CHANGES

Merlin Properties Initiation of Coverage: Buy A sure bet

STRATEGY NEWS

European Strategy News: Finnish companies’ Q3 results: Earnings increasing but less than expected

NEWS BY SECTOR

ALTERNATIVE ENERGY

Gamesa (Neutral) 3Q’16 results. 2016 guidance revised positively.

AUTOMOBILES & PARTS

Landi Renzo (Reduce) Weak Q3 - Measures to rebalance the financial position envisaged

Norma Group (Buy) Weak growth should prove to be a temporary issue

BANKS

BPER (Buy) Q3 16 results

Credem (Neutral) Q3 2016 results preview

Poste Italiane (Accumulate) Poste will growth up to 24.9% in Anima in 2017 – Agreement to the jointly bid for Anima

UBI Banca (Buy) Q3 16 results

UniCredit (Accumulate) Q3 16 results

FINANCIAL SERVICES

Anima (Buy) 3Q 2016 preview

Azimut (Accumulate) 3Q16 results: in line with expectations; buyback could be in the cards

Banca Ifis (Neutral) Q3 16 results

FOOD & BEVERAGE

Parmalat (Neutral) 9M 16 results

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

ESN Analyser

Investment Research

of 64


GENERAL INDUSTRIALS

Nedap (Accumulate) Slowdown in growth in 2H; good margin improvement

Prelios (Neutral) Q3 results in line

GENERAL RETAILERS

Stockmann (Accumulate) Sales continued to decline in October

HEALTHCARE

DiaSorin (Accumulate) Q3 sales and profitability slightly higher than expected

HOUSEHOLD GOODS

De Longhi (Neutral) Q3: weak top line but good cash flow generation

Fila (Buy) 9M 2016 results preview

INDUSTRIAL ENGINEERING

CNH Industrial (Accumulate) NAFTA 4WD tractor sales rebounded for the first time since 2014

Datalogic (Accumulate) Q3 2016 results preview

Interpump (Accumulate) Q3 sales slightly lower than expected but strong profitability

Prima Industrie (Buy) Q3 to confirm top line and profitability improvement

INSURANCE

Allianz (Buy) Strong Q3 results well above expectations

Cattolica Assicurazioni (Neutral) 3Q 2016 preview

Generali (Accumulate) Conference call: some highlights

MAPFRE SA (Neutral) Q3 2016 Earnings: Slightly better

UnipolSai (Accumulate) 3Q16 net profit in line with estimates

MATERIALS, CONSTRUCTION & INFRASTRUCTURE

Atlantia (Accumulate) Good results expected in Q3

Boskalis Westminster (Neutral) Trading update in line; Offshore Energy looks good

Buzzi Unicem (Accumulate) Good results as expected

Maire Tecnimont (Accumulate) USD 328m new award in Malaysia

Sacyr (Buy) Good growths in 9m’16

Salini Impregilo (Accumulate) 2016 targets confirmed

OIL & GAS PRODUCERS

Hellenic Petroleum (Buy) 3Q16 financial results – Solid performance exceeding estimates

QGEP (Buy) 3Q16 results: lower production from Manati

OIL SERVICES

Tecnicas Reunidas (Accumulate) 3Q’16 results in line with forecasts.

REAL ESTATE

Merlin Properties (Buy) A sure bet

WCM AG (Accumulate) WCM acquires further retail portfolio for EUR 98.2m

SOFTWARE & COMPUTER SERVICES

Reply (Neutral) 9m 2016 Post: slowing growth

ESN Analyser

Investment Research

of 64


SUPPORT SERVICES

ENAV (Accumulate) Good Q3 results confirming business resiliency

TECHNOLOGY HARDWARE & EQUIPMENT

Nokia (Buy) Nokia’s CMD to be held in Barcelona on 15 November

TELECOMMUNICATIONS

Sector News SPAIN: More regulation “to boost” FttH deployments

Acotel (Reduce) 9m 2016 Post: higher sales drop/lower EBITDA loss

OTE Hellenic Telecom (Buy) Forecast-beating 3Q16 results thanks to Greek and Romanian fixed units

TRAVEL & LEISURE

Autogrill (Buy) Sound results as expected – 2016 guidance confirmed

UTILITIES

A2A (Buy) Increasing results in 9M16 YoY (with one-offs)

Acea (Accumulate) Increasing results YoY also net of one-offs

Enel (Accumulate) Better than expected results in 9M 2016 YoY

Falck Renewables (Buy) Results were a tad better than expected in 9M 16 YoY

Iren (Buy) Increasing results in 9M 2016 YoY

ESN Top Picks

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Blue Chips Top Picks

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

10 / 11/ 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y

pr i c e

( D i v .

Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s Eur o

S t ox x

AM ADEUS Spain Sof t ware & Comput er Services Long Buy 40.29 49.20 22% 18/ 08/ 2016 41.96 41.96 - 4 . 0 % -5.0%

CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 66.60 76.00 14% 17/ 10/ 2016 66.30 66.30 0 . 5 % 0.6%

I NDI TEX Spain General Ret ailers Long Accumulat e 30.49 36.10 18% 18/ 08/ 2016 30.93 30.33 0 . 5 % -0.6%

KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.72 3.55 31% 20/ 09/ 2016 2.82 2.82 - 3 . 6 % -4.9%

P OS TE I TALI ANE It aly Banks Long Accumulat e 6.01 7.90 31% 03/ 11/ 2016 5.96 5.96 0 . 9 % -0.6%

RELX Net herlands Media Long Accumulat e 14.14 16.75 18% 27/ 10/ 2016 15.14 15.14 - 6 . 6 % -5.0%

S TORA ENS O Finland Basic Resources Long Accumulat e 8.94 9.30 4% 17/ 10/ 2016 8.16 8.16 9 . 6 % 9.7%

TECHNI P France Oil Services Long Buy 64.08 67.00 5% 18/ 102016 58.60 58.60 9 . 4 % 9.0% 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

10 / 11/ 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y pr i c e

( D i v . Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s

Eur o

S t ox x

ACERI NOX Spain Basic Resources Long Buy 11.85 14.00 18% 18/ 08/ 2016 11.71 11.71 1. 2 % 0.1%

ALTRAN France Sof t ware & Comput er Services Long Buy 12.47 15.00 20% 17/ 10/ 2016 13.20 13.20 - 5 . 5 % -5.4%

CAF Spain Indust r ial Transport at ion Long Accumulat e 352.55 390.00 11% 18/ 08/ 2016 342.80 342.80 2 . 8 % 1.8%

DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.71 12.30 27% 22/ 08/ 2016 8.10 8.10 19 . 9 % 18.6%

FOLLI FOLLI E GROUP Greece General Ret ailers Long Buy 20.85 27.70 33% 07/ 11/ 2016 20.91 20.91 - 0 . 3 % -2.7%

FORFARM ERS Net herlands Food & Beverage Long Buy 6.89 8.30 21% 28/ 09/ 2016 6.48 6.48 6 . 3 % 5.1%

FUGRO Net herlands Oil Services Long Buy 15.86 19.00 20% 20/ 10/ 2016 15.56 15.56 2 . 0 % 3.2%

J UM BO Greece General Ret ailers Long Buy 12.06 14.99 24% 21/ 10/ 2016 12.62 12.35 - 2 . 3 % -0.7%

NH HOTEL GROUP Spain Travel & Leisure Long Buy 3.97 6.80 71% 18/ 08/ 2016 4.00 4.00 - 0 . 7 % -1.8%

NOS Port ugal Telecommunicat ions Long Buy 5.75 7.00 22% 17/ 10/ 2016 5.89 5.89 - 2 . 5 % -2.4%

RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 13.43 14.00 4% 20/ 06/ 2016 8.29 8.29 6 2 . 0 % 55.4%

TECHNOGYM It aly Personal Goods Long Buy 3.80 4.95 30% 15/ 06/ 2016 3.78 3.78 0 . 6 % -7.6%

THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.63 4.60 75% 22/ 06/ 2016 2.72 2.72 - 3 . 2 % -5.8%

YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 25.29 31.30 24% 17/ 10/ 2016 27.82 27.82 - 9 . 1% -9.0%

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

Repsol Vienna Cross-country Company Roadshow 21/11/2016

Mapfre Lisboa Cross-country Company Roadshow 22/11/2016

Repsol Frankfurt Cross-country Company Roadshow 22/11/2016

AKKA TECHNOLOGIES Geneva Cross-country Company Roadshow 24/11/2016

Corporate Events

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Corporate Events today

Source: Precise

CompanyBloomberg

codeDate Event Type Description

ALLIANZ ALV GY 11/11/16 Results Q3 2016 Earnings conference call / Webcast {press}

ALV GY 11/11/16 Results Q3 2016 Results

ALV GY 11/11/16 Results Q3 2016 Earnings conference call / Webcast {analyst}

ANIMA ANIM IM 11/11/16 Results Q3 2016 Results

ATLANTIA ATL IM 11/11/16 Results Q3 2016 Results

BIESSE BSS IM 11/11/16 Results Q3 2016 Results

BOSKALIS WESTMINSTER BOKA NA 11/11/16 Trading Update Q3 2016 Trading statement

CATTOLICA ASSICURAZIONI CASS IM 11/11/16 Results Q3 2016 Results

CREDEM CE IM 11/11/16 Results Q3 2016 Results

DATALOGIC DAL IM 11/11/16 Results Q3 2016 Results

EMAK EM IM 11/11/16 Results Q3 2016 Results

EXPRIVIA XPR IM 11/11/16 Results Q3 2016 Results

FILA FILA IM 11/11/16 Results Q3 2016 Results

HISPANIA ACTIVOS INMOBILIARIOSHIS SM 11/11/16 Results Q3 2016 Results

LA DORIA LD IM 11/11/16 Results Q3 2016 Results

OPENJOBMETIS OJM IM 11/11/16 Results Q3 2016 Results

PIHLAJALINNA PIHLIS FH 11/11/16 Analyst Meeting Q3 2016 Press & analyst meeting {Finnish}

PIHLIS FH 11/11/16 Results Q3 2016 Results

PRIMA INDUSTRIE PRI IM 11/11/16 Results Q3 2016 Results

SIAS SIS IM 11/11/16 Results Q3 2016 Results

STOCKMANN STCBV FH 11/11/16 Sales October Sales

UBI BANCA UBI IM 11/11/16 Results Q3 2016 Earnings conference call

UBI IM 11/11/16 Results Q3 2016 Results

ESN Tactical Sector Views

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Tactical Sector Allocation Matrix July 2016

SectorCurrent Tactical

ViewAction

Previous

Tactical View

Stoxx 600

Weighting

LATEST REVIEW

DATE

Automobiles & Parts + upgrade = 3% Jul-16

Banks - - 10% Jul-16

Basic Resources = = 2% Jul-16

Chemicals = = 5% Jul-16

Construction & Materials + + 3% Jul-16

Financial Services - dow ngrade = 2% Jul-16

Food & Beverage + + 7% Jul-16

Healthcare + upgrade = 14% Jul-16

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

Insurance - dow ngrade + 6% Jul-16

Media - dow ngrade = 3% Jul-16

Oil & Gas = = 5% Jul-16

Personal & Household Goods + + 9% Jul-16

Real Estate + upgrade - 2% Jul-16

Retail - dow ngrade = 3% Jul-16

Technology + upgrade = 4% Jul-16

Telecommunications = dow ngrade + 5% Jul-16

Travel & Leisure + + 2% Jul-16

Utilities + upgrade - 4% Jul-16

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

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

fundamental view of the relevant ESN sector analyst team

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Finnish Strategy Update Summary

Analyser

$SECTOR$

European Strategy News: Finnish companies’ Q3 results: Earnings increasing but less than expected

Finnish companies’ Q3 results: Earnings increasing but less than expected

The Q3 earnings season of Finnish companies was weaker than predicted as only about 30% of the companies that are

included in our coverage exceeded consensus expectations in terms of sales and EBIT. The results deviate considerably

from the US S&P 500 and European Stoxx 600 indices in which surprises were more or less positive. The difference is at

least partly due to the fact that the Helsinki stock exchange is driven by industrial engineering companies and information

technology. However, major companies again succeeded better than average in relation to expectations, as the total EBIT

of companies enlisted in the Helsinki stock exchange exceeded consensus by as much as 3.3%, even though surprises

were negative in terms of their numbers.

In relation to the comparison period, the earnings performance was positive even though achieving growth was still

difficult. The aggregate sales of the Finnish companies in our coverage declined by 0.6% YoY in Q3 2016 while operating

profits grew by 4.3%. Nokia has a significant effect on the results as its comparable sales and EBIT reduced notably.

Nokia excluded, sales increased by 0.5% YoY in Q3 and operating profits rose by 7.6%. The earnings momentum has

remained positive as operating profits increased in Q2 by 4.6% YoY and by only 0.6% in Q1 YoY. Measured by numbers,

the sales and EBIT increased in slightly more than 50% of the companies in Q3 in relation to the comparison period.

Similar to the previous quarter, among the sectors, basic metals, media and retail performed especially well relative to

both the benchmark and expectations. Consumer staples and construction (excl. troubled Caverion) also showed notable

profit improvement, but this was in line with expectations. In terms of business sectors, there was weak performance in

relation to both expectations and the comparison period in the capital goods, information technology and energy sectors.

Analyst(s): Antti Saari, OP Corporate Bank, [email protected], +358 10 252 4359

+

Sources: OP, Factset, Inquiry Financial, Reuters, SM E Direkt, Vara Research

Finnish companies Q3 2016 results vs. consensus

23 24 28

8 9

8

45 42 38

0%

25%

50%

75%

100%

Sales EBIT EPS

Above expecta tions In line Below expectation s

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Gamesa

Spain/Alternative Energy Analyser

ALTERNATIVE ENERGY

Gamesa (Neutral) Finnish companies’ Q3 results: Earnings increasing but less than expected

3Q’16 results. 2016 guidance revised positively.

The facts: The Company yesterday presented 3Q’16 results and, again,

improved the 2016 guidance.

Our analysis: Gamesa reported the following 9m’16 results.

Results came in above consensus (EUR330m EBIT and EUR212m net profit

9m’16). These good results lean on solid revenues growth and ongoing cost

control.

Gamesa improved its guidance on MWs sold in 2016 by +7.5%, from >=4,000

MW to >=4,300 MW. And also increased its EBIT guidance from >=EUR430m to

EUR450-470m, that is between 5% and 9%. EBIT margin would be close to 10%.

Despite fears regarding changes in the US market, Gamesa mentioned that the

PTC agreements approved months ago by the two US parties will go ahead.

Gamesa expects to sell in US 400MW in 2016, with a substantially increase in

sales in 2017.

On the other hand, there is greater pressure on prices and Gamesa is prepared

to compete, thanks to the ongoing cost reduction which makes the Company

more competitive.

The outlook on India, Gamesa’s main market, is still positive. Despite some

negative regulatory changes, there are measures that compensate these, at least

partially. Hence, the Company expects the market to stabilise or grow a little.

Other markets where Gamesa is obtaining good results in tenders are Mexico and

Cuba.

Conclusion: Good 3Q’16 results and 2016e. Although there is no guidance

regarding 2017, Gamesa expects good order intake in 4Q’16 and in 1Q’17, with

2017 also improving visibility. The focus is still on the merger process with

Siemens Wind Power. The operation is subject to the approval of the Anti-Trust

Tribune and conformation on behalf of the CNMV that Siemens would not have to

formulate a mandatory takeover bid once the merger is completed.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Neutral

17.59

closing price as of 10/11/2016

20.20

Target Price unchanged

Recommendation unchanged

Target price: EUR

Share price: EUR

Reuters/Bloomberg GAM.MC/GAM SM

Market capitalisation (EURm) 4,912

Current N° of shares (m) 279

Free float 69%

Daily avg. no. trad. sh. 12 mth 2,390

Daily avg. trad. vol. 12 mth (m) 105,362

Price high 12 mth (EUR) 21.77

Price low 12 mth (EUR) 13.78

Abs. perf. 1 mth -15.49%


Abs. perf. 12 mth 15.00%

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

Sales (m) 3,504 4,340 4,786

EBITDA (m) 520 689 743

EBITDA margin 14.8% 15.9% 15.5%

EBIT (m) 323 440 482

EBIT margin 9.2% 10.1% 10.1%

Net Profit (adj.)(m) 177 273 304

ROCE 26.5% 32.0% 30.6%

Net debt/(cash) (m) (301) (437) (548)

Net Debt/Equity -0.2 -0.2 -0.3

Debt/EBITDA -0.6 -0.6 -0.7

Int. cover(EBITDA/Fin. int) 15.5 25.9 38.1

EV/Sales 1.1 1.0 0.9

EV/EBITDA 7.4 6.1 5.6

EV/EBITDA (adj.) 7.4 6.1 5.6

EV/EBIT 11.9 9.6 8.6

P/E (adj.) 24.9 18.0 16.2

P/BV 2.9 2.8 2.5

OpFCF yield 4.0% 3.6% 3.6%

Dividend yield 0.9% 1.4% 1.4%

EPS (adj.) 0.64 0.98 1.09

BVPS 5.47 6.28 7.12

DPS 0.15 0.24 0.25

GAMESA: 9M16 RESULTS

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

Sales 2,533 100% 3,339 100% 32% 3,234 3.2%

EBITDA 353 14.0% 520 15.6% 47% 497 4.7%

Depreciation -73 -2.9% -91 -2.7% 24% -88 3.6%

Provisions -75 -3.0% -89 -2.7% 19% -82 7.8%

EBIT (*) 205 8.1% 340 10.2% 66% 327 4.2%

N. Profit 122 4.8% 225 6.7% 84% 215 4.8%

Source: GVC Gaesco Beka estimates.(*) Adwen is not included

10

12

14

16

18

20

22

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

vvdsvdvsdy

GAMESA IBEX 35 (Rebased)Source: Factset

Shareholders: Iberdrola 20%; Blackrock Inc. 3%;

Norges Bank 3%;

of 64


Landi Renzo

Italy/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Landi Renzo (Reduce) 3Q’16 results. 2016 guidance revised positively.

Weak Q3 - Measures to rebalance the financial position envisaged

The facts: LR released weak Q3 results yesterday during trading hours. LR

confirmed the FY16 guidance (revenues -> EUR 180/190m; Adj. EBITDA ->

EUR 4/6m); the guidance implies that the top line will fall by ~3/19% Y/Y in Q4,

while the Adj. EBITDA implied for Q4 is ~EUR 1.4/3.4m (EUR 2.6m in Q4 2015).

LR BoD "appointed Mediobanca as financial adviser (…) in the context of" a "plan

for the optimisation of the Group's financial structure". LR "has instructed the

financial adviser to arrange preliminary meetings with the main financial creditors

of the Group aimed at exploring possible measures aimed at rebalancing the

overall financial position of the Group on the basis of the mentioned

optimisation plan. The above activity is part of a wider project the Company is

carrying out since a while, aimed at providing the Group with a more balanced

financial structure in line with the industrial plan expected results."

Finally, LR BoD appointed Mr Cristiano Musi as General Manager (from 12

December 2016) and Managing Director later on. Mr Musi has a vast experience

in sectors adjacent to the automotive one and significant managerial skills.

Our analysis: here follow the Q3 results and our estimates.

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

Revenues 42.7 48.1 -8.9% 43.8 132.5 147.1

EBITDA 0.7 1.8 -12.0% 1.5 (0.8) 1.9

EBITDA margin 1.7% 3.7%

3.6% -0.6% 1.3%

D & A (4.1) (3.8) 0.0% (3.8) (12.1) (11.5)

EBIT (3.4) (2.0) 10.3% (2.2) (13.0) (9.6)

EBIT margin -8.0% -4.3%

-5.2% -9.9% -6.6%

Financial charges (1.5) (2.4) -58.8% (1.0) (3.4) (3.6)

Pre-tax profit (4.9) (4.5) -26.2% (3.3) (16.5) (13.5)

Taxes (0.2) 0.5 -173.8% (0.3) (1.3) 2.2

Net profit (5.0) (4.0) -10.3% (3.6) (17.5) (11.2)

In Q3, revenues in Italy fell ~8% Y/Y, grew ~6% Y/Y in the Rest of Europe, fell

~30% Y/Y in the Americas and ~20% Y/Y in the rest of the world; Adj. EBITDA

came in at ~EUR 0.7m (EUR 1.8m in Q3 2015); the net loss was EUR 5m.

NFP (EUR ~-78m as at the end of June) worsened to ~EUR -87m at the end of

September, worse than expected (EUR -80m), also following lower factoring.

Conclusion & Action: the investment case seems increasingly at risk of a capital

increase; the core business is burning cash and the level of debt is increasingly

high; finally, we see little/no sign that the reference market scenario will improve.

We believe that LR will hardly reach the lower end of the FY16 guidance; we

have cut our estimates further and now our DCF gives us a EUR 0.2 target price

without taking into account a possible capital increase. We keep our Reduce

recommendation.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Reduce

0.31


0.20

0.43from Target Price: EUR


Target price: EUR

Share price: EUR

Reuters/Bloomberg LR.MI/LR IM

Market capitalisation (EURm) 35


Free float 33%

Daily avg. no. trad. sh. 12 mth 90

Daily avg. trad. vol. 12 mth (m) 131







Sales (m) 206 185 194

EBITDA (m) (1) 0 5

EBITDA margin nm 0.0% 2.5%

EBIT (m) (27) (15) (10)

EBIT margin nm nm nm

Net Profit (adj.)(m) (35) (19) (10)

ROCE -12.9% -7.3% -4.6%

Net debt/(cash) (m) 59 79 89

Net Debt/Equity 0.8 1.5 2.1

Debt/EBITDA -46.3 nm 18.2

Int. cover(EBITDA/Fin. int) (0.2) 0.0 1.1

EV/Sales 0.6 0.5 0.6

EV/EBITDA nm nm 22.4

EV/EBITDA (adj.) nm nm 22.4

EV/EBIT nm nm nm

P/E (adj.) nm nm nm

P/BV 1.2 0.7 0.8

OpFCF yield -19.2% -50.4% -32.3%


EPS (adj.) (0.31) (0.17) (0.08)

BVPS 0.63 0.46 0.38

DPS 0.00 0.00 0.00

0.30

0.40

0.50

0.60

0.70

0.80

0.90

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 nov 16

vvdsvdvsdy

LANDI RENZO Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: Trust Landi 59%; Aerius IH 5%; Impax

AM 3%;

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Norma Group

Germany/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Norma Group (Buy) Weak Q3 - Measures to rebalance the financial position envisaged

Weak growth should prove to be a temporary issue

The facts: Yesterday afternoon, Norma warned that its organic growth rate in FY

2016 is likely to fall short of the guidance of 2-5%. While this is clearly a

disappointment, especially since the company had reiterated its guidance only

last week, we believe that this period of weaker growth should prove to be only a

temporary issue. We thus reiterate our Buy recommendation but with a lower

target price of EUR 48.

Our analysis: After having reiterated its guidance last week only, Norma

yesterday cut its organic growth guidance from 2-5% to now roughly 0%. This

warning was triggered by lower order-intake numbers, which came in from the US

part of the business and is in our view most likely conservative.

We believe that the current period of weaker growth is mainly related to the

weakness of the US truck and agricultural machinery market. ACT is currently

forecasting US heavy truck production to decline by 30% in 2016.

Given that roughly 12% of global sales are directly or indirectly related to the US

truck and agricultural equipment market, we believe that the weakness of this

market does cost the company almost 4% points of organic growth. This

calculation shows also, that the rest of the business is developing in line with the

company’s guidance range.

The margin guidance was left untouched. This is in our view also a very good sign

as it shows that Norma is able to protect its margin also in a weaker market

environment.

In FY 2017 we expect organic growth to recovery to a good level of roughly 4%.

This is based on the assumption that the rest of the business continue to develop

in line with this year, while the truck related business should recover. The election

of Donald Trump as the upcoming president of the United States of America

should support this recovery, as he has announced a significant tax rate reduction

as well an infrastructure spending program. Both should support demand for

trucks and related equipment.

Once organic growth does return we believe that Norma will again see a re-rating

to higher multiples, which are in our view justified by the premium quality

business.

Electrification of the powertrain should be only a burden of 0.7% p.a. on growth.

We have based our target price on a peer group multiple comparison, which

includes companies from the automotive supplier space as well as from the water

technology and distribution services side. It implies a PE ratio of 13.8x for FY

2017.

Our DCF model indicates a fair value of EUR 54. However, we believe that the

recent disappointment will not allow the market to regain confidence in this model

in the next quarters.

Conclusion & Action: We reiterate our Buy recommendation and consider the

recent drop in the share price a very attractive buying opportunity.

Analyst(s):

Tim Schuldt, CFA, equinet Bank

[email protected]

+49 69 5899 7433

Buy

35.57


48.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg NOEJ.DE/NOEJ GR



Free float 100%









Sales (m) 890 892 969

EBITDA (m) 171 183 200

EBITDA margin 19.2% 20.6% 20.6%

EBIT (m) 125 137 149

EBIT margin 14.0% 15.4% 15.4%


ROCE 10.8% 11.0% 11.5%

Net debt/(cash) (m) 351 398 372


Debt/EBITDA 2.1 2.2 1.9


EV/Sales 2.3 1.7 1.6

EV/EBITDA 11.7 8.5 7.7

EV/EBITDA (adj.) 10.3 7.3 6.7

EV/EBIT 16.1 11.4 10.3

P/E (adj.) 18.1 11.2 10.3

P/BV 3.8 2.4 2.1

OpFCF yield 4.3% 5.4% 5.2%


EPS (adj.) 2.82 3.18 3.47

BVPS 13.46 15.11 16.90

DPS 0.75 0.90 1.03

34

36

38

40

42

44

46

48

50

52

54

56

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

vvdsvdvsdy

NORMA GROUP Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: Threadneedle Asset Management Ltd.

7%; Allianz Global Investors GmbH 5%;

AXA Investment Managers (Paris) SA

5%;

of 64


BPER

Italy/Banks Analyser

BANKS

BPER (Buy) Weak growth should prove to be a temporary issue

Q3 16 results

The facts: BPER published and presented Q3 16 results overnight.

Our analysis: BPER closed Q3 16 with a net profit up 6% Q/Q to EUR 36m vs.

our 29m forecast, thanks to better than expected operating costs. The net profit is

not comparable with Q3 15, when EUR 54m leaving incentives were booked.

The capital position remained strong as expected, with a CET1 ratio of 14.5%

phased-in and 14.1% fully-loaded.

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

Revenues 500 502 -0.4% 513 -2.5% 549 -8.9%

Operating

costs -300 -321 -6.5% -346 -13.3% -325 -7.7%

GOP 200 181 10.5% 167 19.8% 224 -10.7%

Loan

provisions -125 -123 1.6% -127 -1.6% -162 -22.8%

Net Profit 36 29 24.1% 9 nm 34 5.9%

Total revenues decreased 2.5% Y/Y to EUR 500m and were bang in line, with the

NII down 5.3% Y/Y to EUR 285m, net commissions down 1.7% Y/Y to EUR 175m

and a trading income of EUR 25.5m vs. 20m one year ago.

Operating costs were cut 13% Y/Y to EUR 300m or 6.5% better than expected,

leading to a gross operating profit (GOP) of EUR 200m, 20% higher Y/Y and 10%

ahead of our forecast, with a C/I ratio of 60%.

Loan impairments were broadly flat Y/Y at EUR 125m as expected, with a cost of

credit risk of 122bps in 9M 16.

Conclusion & Action: We increase our Adj. EPS estimates from EUR 0.24 to

0.26 in FY16, but cut it from EUR 0.54 to 0.51 in FY17 and from EUR 0.74 to 0.66

in FY18 on the back of a deceleration in NII and net commissions. Hence, we cut

our target price from EUR 5.3 to 5.1 and reiterate Buy.

Analyst(s):

Luigi Tramontana, Banca Akros

[email protected]

+39 02 4344 4239

Buy

4.18


5.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg EMII.MI/BPE IM



Free float 100%









Total Revenue (m) 2,127 2,057 2,071

Pre-Provision Profit (PPP) (m) 708 718 795

Operating profit (OP) 2 187 374

Earnings Before Tax (m) 214 172 374

Net Profit (adj.) (m) 3 123 247

Shareholders Equity (m) 5,025 5,089 5,278

Tangible BV (m) 4,644 4,709 4,898

RWA (m) 40,100 32,975 33,550

ROTE 0.1% 2.6% 5.1%

Total Capital Ratio (B3) 12.8% 15.7% 16.0%

Cost/Income 64.3% 61.9% 58.5%

NPL ratio (gross) 14.5% 14.1% 12.8%

P/PPP 4.8 2.8 2.5

P/E (adj.) nm 16.3 8.1

P/BV 0.7 0.4 0.4

P/TBV 0.7 0.4 0.4

Dividend Yield 2.4% 2.9% 4.1%

PPPPS 1.48 1.50 1.66

EPS (adj.) 0.01 0.26 0.51

BVPS 10.47 10.61 11.00

TBVPS 9.68 9.82 10.21

DPS 0.10 0.12 0.17

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

BPER Stoxx Banks (Rebased)Source: Factset

Shareholders:

of 64


Credem


BANKS

Credem (Neutral) Q3 16 results

Q3 2016 results preview

The facts: Credem is due to publish the Q3 16 results today.

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

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

Revenues 255 248 2.8% 258 -1.2%

Operating costs -182 -172 5.8% -193 -5.7%

GOP 73 76 -3.9% 65 12.3%

Loan provisions -16 -18 -11.1% -21 -23.8%

Net Profit 31 31 0.0% 24 29.2%

Source: Company data, Banca Akros estimates

We forecast Credem to close Q3 16 with a net profit of EUR 31m, flat Y/Y as a

weaker operating profitability is expected to be compensated by lower loan

impairments.

Total revenues are seen increasing 2.8% Y/Y to EUR 255m, with the NII up 1.8%

both Y/Y and Q/Q to EUR 113m thanks to higher lending volumes. Net

commissions are anticipated down 2.5% Y/Y to EUR 117m due to weak inflows in

asset mgmt., suffering from financial market volatility. On the other hand, the

insurance contribution is seen at EUR 12m vs. 8.5m one year ago, while the

trading income is anticipated at EUR 7m vs. 3m in Q3 15.

Operating costs are expected to grow 5.8% Y/Y to EUR 182m, fuelled by

continuous hiring and investments to gain market share, leading to a gross

operating profit (GOP) of EUR 73m, some 4% lower Y/Y with a C/I ratio of 71.4%.

Loan impairments are seen down 11% Y/Y to EUR 16m, with a cost of credit risk

of roughly 30bps, the lowest in Italy thanks to the outstanding credit quality of the

group.

The capital position should remain sound, with a CET1 ratio not distant from

13.4% phased-in and 12.2% fully-loaded recorded in the previous quarter.

Conclusion & Action: We cut our Adj. EPS estimates from EUR 0.47 to 0.44 in

FY16 but increase from EUR 0.53 to 0.54 in FY17 and from EUR 0.62 to 0.63 in

FY18 and reiterate Neutral with EUR 6.2 TP.

Analyst(s):


[email protected]

+39 02 4344 4239

Neutral

5.13


6.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg EMBI.MI/CE IM



Free float 23%









Total Revenue (m) 1,127 1,072 1,129




Net Profit (adj.) (m) 189 148 179


Tangible BV (m) 2,192 2,259 2,378

RWA (m) 13,251 14,061 14,803

ROTE 7.8% 5.9% 6.9%


Cost/Income 64.3% 70.0% 67.9%

NPL ratio (gross) 3.8% 3.6% 3.4%

P/PPP 5.9 5.4 4.8

P/E (adj.) 12.1 11.5 9.5

P/BV 1.0 0.8 0.7

P/TBV 1.0 0.8 0.7


PPPPS 1.16 0.94 1.07

EPS (adj.) 0.57 0.44 0.54

BVPS 6.60 6.80 7.16

TBVPS 6.60 6.80 7.16

DPS 0.15 0.15 0.20

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0


vvdsvdvsdy

CREDEM Stoxx Banks (Rebased)Source: Factset

Shareholders: Credemholding 77%;

of 64


Poste Italiane


BANKS

Poste Italiane (Accumulate) Q3 2016 results preview

Poste will growth up to 24.9% in Anima in 2017 – Agreement to the jointly bid for Anima

The facts: Poste, CDP and Anima announced the agreement to jointly bid for

Pioneer. Furthermore, Poste will contribute its AM company to Anima, increasing

in this way the weight of asset management business.

Our analysis: more in detail, Poste, CDP and Anima, through a specially

incorporated vehicle of which Poste Italiane holds the majority stake, submitted

an offer for the acquisition of the asset management business of Pioneer Global

Asset Management. Moreover, in 2017 Poste will contribute its asset

management company (BancoPosta Fondi SGR) to ANIMA Holding, thus

increasing the stake in ANIMA from the current 10.32% up to a maximum of

24.9% of ANIMA voting rights. This operation will allow as of the beginning, to

count on over EUR 147bn in assets (as of 30 September 2016).

Conclusion & Action: in this way, Poste Italiane will pursue the target of

enlarging its presence in the asset management business, as stated in its

business plan. On Anima (Buy; TP EUR 5.8) side, this could improve its

distribution strength in the medium-long term, considering the size of Poste’s

network and the huge amount of money (over EUR 500bn) managed by Poste.

On the other side, we believe that Anima could need a free capital increase to

“acquire” Poste’s asset management company. The game changer, for all the

companies involved, will be the offer on Pioneer, presented yesterday. But, what

will be the future of BPM’s stake (14.66%) in Anima at this stage? Considering the

distribution agreement in place with BPM, we still bet on the merger of Aletti SGR

in Anima, but the likelihood of other solution, after Poste’s choice, are increasing.

Analyst(s):

Enrico Esposti, CIIA, Banca Akros

[email protected]

+39 02 4344 4022

Accumulate

6.01


7.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg PST.MI/PST IM


Current N° of shares (m) 1,306

Free float 35%









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

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

Operating profit (OP) 880 910 1,096

Earnings Before Tax (m) 933 933 1,120

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


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

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

ROTE 8.5% 8.3% 9.5%


Cost/Income 97.1% 97.2% 96.7%


P/PPP 10.5 8.6 7.2

P/E (adj.) 11.2 9.7 8.2

P/BV 1.0 0.8 0.8

P/TBV 1.0 0.8 0.8


PPPPS 0.67 0.70 0.84

EPS (adj.) 0.63 0.62 0.73

BVPS 7.39 7.49 7.68

TBVPS 7.39 7.49 7.68

DPS 0.34 0.35 0.43

4.5

5.0

5.5

6.0

6.5

7.0

7.5


vvdsvdvsdy

POSTE ITALIANE FTSE MIB (Rebased)Source: Factset

Shareholders: Ministry of Economy and Finance 65%;

of 64


UBI Banca


BANKS

UBI Banca (Buy) Poste will growth up to 24.9% in Anima in 2017 – Agreement to the jointly bid for Anima

Q3 16 results

The facts: UBI Banca published Q3 16 results this morning before market

opening, with a conference call presentation scheduled at 3.00pm CET.

Our analysis: UBI Banca closed Q3 16 with a net profit down 13.5% Y/Y to EUR

32m vs. our 26m forecast, thanks to a better tax rate of just 25% vs. our 33%

estimate. The rest of the results was bang in line with our expectations.


Revenues 746 745 0.1% 758 -1.6% 816 -8.6%

Operating

costs -515 -522 -1.3% -497 3.6% -511 0.8%

GOP 231 223 3.6% 261 -11.5% 305 -24.3%

Loan

provisions -167 -169 -1.2% -169 -1.2% -1,051 -84.1%

Net Profit 32 26 23.1% 38 -13.5% -829 nm

Total revenues decreased 1.6% Y/Y to EUR 746m as anticipated, with the NII

falling 7.8% Y/Y to EUR 368m on the back of weak loans (-2.2% Y/Y), reducing

commercial margins and lower contribution from the financial portfolio. On the

contrary, net commissions grew 7% Y/Y to EUR 321m thanks to positive asset

mgmt. inflows and the repricing of some banking services. The trading income

held up at EUR 24m vs. 28m one year ago.

Operating costs increased 3.6% Y/Y to EUR 515m vs. our 522m estimate,

including EUR 26.4m annual DGS contribution and leading to a gross operating

profit (GOP) of EUR 231m, 11.5% lower Y/Y with a C/I ratio of 69%.

Following the increase in the NPL cash coverage recorded in Q2, the loan

impairments normalised and were broadly flat Y/Y at EUR 167m as expected.

The CET1 ratio improved 25bps Q/Q to 11.7% phased-in and 11.3% fully-loaded.

Conclusion & Action: We reiterate Buy with EUR 4.3 TP.

Analyst(s):


[email protected]

+39 02 4344 4239

Buy

2.31


4.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg UBI.MI/UBI IM



Free float 100%









Total Revenue (m) 3,289 3,101 3,154

Pre-Provision Profit (PPP) (m) 1,111 897 1,144

Operating profit (OP) 308 -658 453

Earnings Before Tax (m) 374 -707 453

Net Profit (adj.) (m) 195 -799 251


Tangible BV (m) 8,517 7,680 7,823

RWA (m) 61,338 61,906 62,481

ROTE 2.3% -9.9% 3.2%


Cost/Income 66.1% 67.7% 63.5%


P/PPP 5.0 2.5 2.0

P/E (adj.) 28.6 nm 9.0

P/BV 0.7 0.3 0.3

P/TBV 0.7 0.3 0.3


PPPPS 1.23 0.92 1.17

EPS (adj.) 0.22 -0.82 0.26

BVPS 9.46 7.87 8.02

TBVPS 9.46 7.87 8.02

DPS 0.11 0.11 0.13

1.5

2.0

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3.5

4.0

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5.0

5.5

6.0

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7.0


vvdsvdvsdy

UBI BANCA Stoxx Banks (Rebased)Source: Factset

Shareholders:

of 64


UniCredit


BANKS

UniCredit (Accumulate) Q3 16 results

Q3 16 results

The facts: UniCredit published and presented Q3 16 results yesterday.

Our analysis: UniCredit closed Q3 16 with a net profit down 12% Y/Y to EUR

447m vs. our 376m forecast and bang in line with company-compiled consensus.

The capital position was stronger than expected, with a CET1 ratio of 11%

phased-in vs. our 10.7% and 10.8% fully-loaded vs. our 10.5%. The 50bps

quarterly increase was due not only to the disposal of 10% stakes in in

Finecobank and Bank Pekao we anticipated (+20bps), but also to a strong

reduction in RWA (+23bps).


Revenues 5,455 5,298 3.0% 5,332 2.3% 6,139 -11.1%

Operating

costs -3,228 -3,286 -1.8% -3,383 -4.6% -3,289 -1.9%

GOP 2,227 2,012 10.7% 1,949 14.3% 2,850 -21.9%

Loan

provisions -1,008 -1,000 0.8% -1,005 0.3% -914 10.3%

Net Profit 447 376 18.9% 506 -11.7% 916 -51.2%

The operating performance was stronger than expected, with total revenues

growing 2.3% Y/Y to EUR 5,455m or 3% more than anticipated, thanks to a

stronger trading income doubling Y/Y to EUR 509m vs. our ca. 400m estimate,

while the NII decreased 2.6% Y/Y and 2.3% Q/Q to EUR 2.85bn as expected and

net commissions were down 2.3% Y/Y and 4% Q/Q to EUR 1.86bn as

anticipated.

Operating costs decreased 4.6% Y/Y to EUR 3.23bn or 1.8% better than

estimated, leading to a gross operating profit (GOP) growing 14% Y/Y to EUR

2.2bn or 11% more than expected, with a C/I ratio of 59.2%.

Loan impairments were flat Y/Y as anticipated at EUR 1bn with a cost of credit

risk of 83bps overall and 41bps in the Core Bank.

Results’ presentation was rather deceptive as most answers were delayed to 13th

Dec when new business plan will be announced to the market.

Main elements stressed by the top mgmt. were the additional 41bps to be added

to FL CET1 ratio in Q4, particularly arising from further disposals (24bps). RWA

reduction in Q3 due to a positive one-off in market risk related to the

implementation of new models. Mgmt anticipates fully manageable impact from

IFRS9 adoption and does not expect a massive impact from upcoming Basel IV

regulation due to basic commercial banking model instead of universal bank

followed by some competitors.

Conclusion & Action: We stick to Accumulate with EUR 2.6 target price.

Analyst(s):


[email protected]

+39 02 4344 4239

Accumulate

2.29


2.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg CRDI.MI/UCG IM



Free float 66%









Total Revenue (m) 22,405 22,498 22,532

Pre-Provision Profit (PPP) (m) 7,202 7,752 8,435

Operating profit (OP) 3,088 4,011 5,521

Earnings Before Tax (m) 2,671 3,588 5,521

Net Profit (adj.) (m) 2,089 1,843 3,352


Tangible BV (m) 46,468 47,295 47,781

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

ROTE 4.5% 3.9% 7.1%


Cost/Income 60.8% 58.1% 57.3%


P/PPP 4.1 1.8 1.6

P/E (adj.) 14.1 7.4 4.1

P/BV 0.6 0.3 0.3

P/TBV 0.6 0.3 0.3


PPPPS 1.21 1.30 1.41

EPS (adj.) 0.35 0.31 0.56

BVPS 7.78 7.92 8.00

TBVPS 7.78 7.92 8.00

DPS 0.12 0.12 0.12

1.5

2.0

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3.5

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5.5


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 64


Anima

Italy/Financial Services Analyser

FINANCIAL SERVICES

Anima (Buy) Q3 16 results

3Q 2016 preview

The facts: Anima is due to report its 3Q16 results today. A conference call will be

held the same day (details not yet disclosed).

Our analysis: we summarise our preview in the following table.

3Q16E Y/Y 9M16E Y/Y 3Q15 9M15

Net commissions 53 -2% 160 2% 54 157

Performance fees 1 -41% 4 -91% 1 45

Other income 5 1% 16 -4% 5 17

Total revenues 58 -2% 181 -17% 59 219

Total operating expense -17 10% -51 -5% -15 -53

Other income / costs -9 -10% -27 -3% -10 -28

EBT 32 -5% 103 -25% 34 138

Net profit 21 -14% 60 -38% 24 96

Adj Net profit 27 -11% 85 -25% 30 113

We expect total revenues of c. EUR 58m, -2% Y/Y, mainly due to the lack of

performance fees and to a little bit lower management fees, due to the weak net

inflows, already disclosed, during the quarter (EUR -764m vs EUR 2.5bn in

3Q15). Total assets achieved EUR 71.5bn at the end of September, +11.3% Y/Y,

+6.9% vs 2016 but flat m/m. We expect margins in slight reduction q/q (net

commissions on average assets at c. 7bps vs 8bps in 2Q16). The total costs are

seen slightly higher Y/Y (EUR 26m vs EUR 25m). Therefore, the net profit ought

to close at around EUR 21m vs EUR 24m in 3Q15.

Conclusion & Action: overall we expect a neutral set of results, which were

already discounted by the market. Recommendation and target price confirmed.

M&A remain the trigger in the short term.

Analyst(s):


[email protected]

+39 02 4344 4022

Buy

4.13


5.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg ANIM.MI/ANIM IM



Free float 75%









Total Revenue (m) 291 242 262




Net Profit (adj.) (m) 151 118 133

Shareholders Equity (m) 796 802 876

Tangible BV (m) 0 0 0

RWA (m) 0 0 0

ROTE 20.0% 14.7% 15.9%


Cost/Income 30.6% 35.8% 33.3%

P/PPP 11.9 8.0 7.1

P/E (adj.) 16.0 10.5 9.3

P/BV 3.0 1.5 1.4

P/TBV nm nm nm


PPPPS 0.67 0.52 0.58

EPS (adj.) 0.50 0.39 0.44

BVPS 2.66 2.68 2.92

TBVPS 0.00 0.00 0.00

DPS 0.25 0.13 0.19

3.5

4.0

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6.0

6.5

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9.0


vvdsvdvsdy

ANIMA FTSE Italy All Share (Rebased)Source: Factset

Shareholders: BPM 15%; Poste Italiane 10%;

of 64


Azimut


FINANCIAL SERVICES

Azimut (Accumulate) 3Q 2016 preview

3Q16 results: in line with expectations; buyback could be in the cards

The facts: Azimut published its 3Q16 results yesterday during trading hours,

followed by a conference call.

EUR m 3Q16 Y/Y A/E 9M16 3Q16E 9M16E

Total revenues 186 40% 7% 499 175 487

Fees and commissions 175 44% 6% 465 166 456

Commission expenses -79 17% -1% -240 -80 -241

Total other costs -36 2% 3% -122 -35 -121

PBT 60 110% 0% 125 60 125

Net Profit 54 94% 2% 121 53 120

Our analysis: Azimut reported results, overall in line with estimates. The growth

was solid both in management fees (EUR 138m, +18% Y/Y; EUR 131m our

estimate) and in performance fees (EUR 34m vs EUR 2m in 3Q15). Thanks to the

absence of recruitment costs, like in 1Q and 2Q, and to a more disciplined cost

control, the pay-out ratio decreased to around 56% vs c. 66% in 1Q and in 2Q

and the CI ratio, net of performance fees, closed around 80% compared to 94%

achieved in 2Q. This resulted in a recovery of margin q/q, with net fees on

average asset we estimated around 0.15% from 0.11% in 1Q and 2Q. On the

back of this consideration, the net profit amounted to EUR 54m, +94% Y/Y and c.

+2% compared to our estimates. NFP closed around EUR 249m vs EUR 194m in

1H16. Cash was c. EUR 496m vs EUR 438m in 1H 16.

Conference call take-away: 2019 targets were confirmed (total assets EUR

50bn vs EUR 42bn at the end of September 2016; net profit around EUR 300m vs

EUR 121m in 9M16; Net inflows c. EUR 2.5bn vs EUR 5.6bn in 9M16; pay-out

ratio between 60% and 75% compared to current 80%); a share buyback program

could be in the cards soon, on the back of c. EUR 300m of cash in Azimut’s

hands after the dividend payment (EUR 133m on 23rd

November); Azimut,

contrary to some competitors, will not anticipate any reform of its performance

fees calculation scheme, facing this chance increasing its geographical

diversification.

Conclusion & Action: the stock reacted positively to the results, mainly thanks

to the improvement in margins and to the restored confidence of investors in

Azimut’s numbers and business model. We also underlined that Mr Albarelli’s first

speech to the investment community was very positive in our view: the message

was clear and we believe he could be able to start a reshuffle of the company and

of its strategic guidelines. The investment case remains unchanged: the company

is likely to have around EUR 300m extra capital for a share buy-back program,

extraordinary dividends or for acquisitions; the group proposed a DPS of EUR

1.5, of which EUR 1.0 is going to be paid on 23rd

November, corresponding to an

yield of c 6% at the current price; the net inflows, also thanks to the acquisitions

of financial advisors and companies abroad, don’t seem to be hurt by the difficult

market conditions. After the results, we increased our EPS estimates around 18%

and 11% for 2016 and 2017 respectively. We anyway confirm our target price

(EUR 18.5 per share) and we stick to accumulate.

Analyst(s):


[email protected]

+39 02 4344 4022

Accumulate

16.59


18.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg AZMT.MI/AZM IM



Free float 87%













Net Profit (adj.) (m) 197 124 131



RWA (m) 0 0 0

ROTE 29.1% 17.7% 18.5%


Cost/Income 33.0% 48.3% 46.4%

P/PPP 11.0 12.3 11.7

P/E (adj.) 15.5 17.8 16.8

P/BV 4.3 3.2 3.0

P/TBV 7.9 6.2 5.4


PPPPS 2.10 1.35 1.42

EPS (adj.) 1.48 0.93 0.99

BVPS 5.41 5.14 5.53

TBVPS 2.93 2.67 3.05

DPS 1.50 0.86 0.87

12

14

16

18

20

22

24

26


vvdsvdvsdy

AZIMUT FTSE MIB (Rebased)Source: Factset

Shareholders: Timone Fiduciaria 13%;

of 64


Banca Ifis


FINANCIAL SERVICES

Banca Ifis (Neutral) 3Q16 results: in line with expectations; buyback could be in the cards

Q3 16 results

The facts: Banca Ifis published and presented Q3 16 results yesterday.

Our analysis: Banca Ifis closed Q3 16 with a net profit of EUR 27m, including

EUR 21m one-off gains from NPL transactions we deemed as probable but did

not include in our EUR 19m forecast. Net of one-off items, the performance was

weaker than expected, due to lower revenues and higher costs.

The capital position remained sound ahead of the Interbanca acquisition for which

regulatory approval is still ongoing, with a CET1 ratio improving 30bps Q/Q to

13.5%.


Revenues 66 68 -2.9% 63 4.8% 69 -4.3%

Operating

costs -42 -38 10.5% -29 44.8% -43 -2.3%

GOP 24 30 -20.0% 34 -29.4% 26 -7.7%

Loan

provisions -4 -3 Nm -1 nm -6 -33.3%

Net Profit 27 19 nm 18 50.0% 17 58.8%

At recurrent level, total revenues increased 4.8% Y/Y to EUR 66, but were 3%

lower than expected, as the NII grew 10% Y/Y to EUR 53m vs. our 55m estimate

and net commissions fell 11% Y/Y to EUR 13m as anticipated.

Operating costs came grew 45% Y/Y to EUR 42m or 10% more than estimated

and were impacted by continued hiring (157 new staff in 9M) and systemic

charges, leading to a gross operating profit (GOP) of EUR 24m vs. our 30m

forecast, with a C/I ratio of 63.6%.

Loan impairments came in at a low EUR 4m as expected, with a cost of credit risk

of 86bps in Trade receivables for 9M 16 vs. 79bps one year ago.

The financial report clarifies the NPL transaction was on a portfolio of 42k

positions with a par value of EUR 861.6m and net value of EUR 4.7m or 0.5% of

GBV. We understand this is after having processed the positions several times

without reaching a restructuring agreement. Given the EUR 21m capital gain, we

estimate the selling price was EUR 26m or 3% of GBV.

While DRL is growing at full steam, ahead of plans, we see Trade receivables

underperforming this year’s budget. Still no visibility on the capital position post

Interbanca acquisition.

Conclusion & Action: We reiterate Neutral on the stock ahead of the Interbanca

acquisition.

Analyst(s):


[email protected]

+39 02 4344 4239

Neutral

25.04


24.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg IF.MI/IF IM



Free float 41%













Net Profit (adj.) (m) 75 71 87



RWA (m) 3,264 3,651 4,269

ROTE 13.1% 11.4% 12.9%


Cost/Income 49.0% 51.9% 47.7%

P/PPP 11.0 10.3 8.5

P/E (adj.) 20.3 18.7 15.3

P/BV 2.7 2.1 2.0

P/TBV 2.7 2.1 2.0


PPPPS 2.63 2.42 2.94

EPS (adj.) 1.42 1.34 1.64

BVPS 10.84 11.78 12.66

TBVPS 10.84 11.78 12.66

DPS 0.76 0.76 0.85

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vvdsvdvsdy

BANCA IFIS FTSE Italy STAR (Rebased)Source: Factset

Shareholders: La Scogliera 50%; Others 8%;

of 64


Parmalat

Italy/Food & Beverage Analyser

FOOD & BEVERAGE

Parmalat (Neutral) Q3 16 results

9M 16 results

9M 16 results: 9M 16 sales were at EUR 4,632.1m down 2.4% Y/Y (at constant

scope of consolidation and constant exchange rates and excluding hyperinflation

in Venezuela revenues were up +2.4%).

Parmalat: 9M 16 results

EUR m 9M 15a 9M 16a %Chg

Sales 4.744.5 4,632.1 -2.4%

EBITDA 312.2 313.4 +0.4%

Margin (%) 6.6% 6.8%

Source: Company data, BANCA AKROS-ESN estimates

Parmalat Group 9M 16 EBITDA was EUR 171.6m (+0.4% Y/Y). At constant

exchange rates and scope of consolidation and excluding hyperinflation 9M 16

EBITDA was up 9.6% Y/Y. This improvement in profitability is especially due to

the US profitability increase, which is the result of efficiency measures and sales

promotions, coupled with the positive impact of a favourable trend in the cost of

raw milk.

Management FY 16 guidance slightly revised: management expects at const.

exch. rates, considering for the new acquisitions pro forma 2015 comparative

data and excluding the Venezuelan subsidiary, gains of about 2-3% for net

revenues (vs previous 5%) and over 10% for EBITDA (vs previous around 10%).

Our analysis: based on 9M 16 results, we factored the foregoing FY 16 guidance

into our estimates.

Conclusion & Action: based on our estimates, we confirm our Neutral

recommendation and our target price of EUR 2.40 per share calculated based on

our DCF model (WACC 6.35% and perpetual growth of 1.50%).

Analyst(s):

PaolaSaglietti, Banca Akros

[email protected]

+39 02 4344 4287

Neutral

2.46


2.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg PLT.MI/PLT IM



Free float 17%









Sales (m) 6,416 6,352 6,384

EBITDA (m) 445 447 454

EBITDA margin 6.9% 7.0% 7.1%

EBIT (m) 277 268 271

EBIT margin 4.3% 4.2% 4.2%


ROCE 6.3% 6.1% 6.4%

Net debt/(cash) (m) (301) (425) (647)


Debt/EBITDA -0.7 -1.0 -1.4


EV/Sales 0.7 0.7 0.7

EV/EBITDA 10.6 10.6 10.0

EV/EBITDA (adj.) 10.6 10.6 10.0

EV/EBIT 17.0 17.7 16.7

P/E (adj.) 30.0 30.2 29.8

P/BV 1.5 1.5 1.4

OpFCF yield -19.6% 2.9% 4.8%


EPS (adj.) 0.08 0.08 0.08

BVPS 1.64 1.69 1.76

DPS 0.02 0.02 0.02

2.15

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2.30

2.35

2.40

2.45

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vvdsvdvsdy

PARMALAT Stoxx Food & Beverage (Rebased)Source: Factset

Shareholders: Sofil SAS 83%;

of 64


Nedap

Netherlands/General Industrials Analyser

GENERAL INDUSTRIALS

Nedap (Accumulate) 9M 16 results Accumulate

31.18


34.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg NEDP.AS/NEDAP NA



Free float 26%









Sales (m) 181 190 201

EBITDA (m) 14 25 30


EBIT (m) 4 15 20

EBIT margin 2.4% 7.8% 10.2%


ROCE 9.3% 12.5% 19.0%

Net debt/(cash) (m) 19 12 (1)



Int. cover(EBITDA/Fin. int) 44.9 409.1 (335.7)

EV/Sales 1.2 1.1 1.0

EV/EBITDA 15.5 8.6 6.5

EV/EBITDA (adj.) 10.0 8.6 6.5

EV/EBIT 49.9 14.1 9.6

P/E (adj.) 16.4 16.4 12.1

P/BV 3.9 3.7 3.2

OpFCF yield 3.1% 5.8% 10.2%


EPS (adj.) 1.88 1.90 2.58

BVPS 7.90 8.53 9.81

DPS 1.28 1.30 1.76

Slowdown in growth in 2H; good margin improvement

The facts: Nedap published its Q3 trading update. Management expects revenue

growth for the full year of 3% (1H growth 6%) and an increase of 20-25% in pre-

tax profit (1H growth 22%).

Our analysis: Revenue growth seems to have decelerated during the second half

as the company expects 3% growth for the full year following 6% growth in 1H.

This reflects flat revenues in the second half whereas we had anticipated 4%

growth. Five out of the nine business units are expected to show growth in the full

year whereas in the first half 7 out of 9 reported growth.

Organic revenue growth will come in at 5% for the full year when corrected for

Energy Systems which activities are phased out this year. Also several activities

within Light Controls are phased out which will have a negative impact on full year

growth although this business unit still showed growth in 1H.

Looking at the business units, Healthcare, Staffing Solutions, Security

Management, Library Systems and Identification Systems will show growth this

year whilst Livestock Management, Retail and NSecure will show broadly flat

revenues.

The International Maritime Organization recently ratified the ballast water treaty,

meaning that ships will be subject to new regulations with effect from September

2017. Investments in treatment systems for ballast water offer good growth

opportunities for Nedap’s UV products in the next few years.

Nedap is gradually making progress with the outsourcing of most of its

production. The selected suppliers will start delivering the first products in the next

few months and manufacturing on a larger scale will be outsourced during 1H17.

Nedap will take a charge of EUR 4-5m in 2016 related to this process, of which

EUR 2-4m is related to write down of inventories (as we previously anticipated).

Cost savings of EUR 4m annually are still on track with the full benefit expected in

2018.

Management expects 3% revenue growth in 2016 and an increase in pre-tax

profit of 20-25% towards EUR 13.4-14.0m. Our current estimates assume 5%

revenue growth for the full year and an increase in pre-tax profit of 33% (EUR

14.9m). Although management’s outlook is traditionally conservative, our current

estimates might be too optimistic.

Conclusion & Action: Nedap’s third quarter trading update shows a slowdown in

revenue growth during the year following good growth of 6% in the first half.

Several business units are showing flat revenues following growth in the first half.

Pre-tax profit is expected to increase 20-25% which shows a good margin

improvement after years of weaker margins. Based on this expected

improvement, combined with the cost savings of the outsourcing of its production

activities, we have an Accumulate rating (EV-EBITDA 2017 is 6.5). Our DCF-

based price target is EUR 34.00, with an attractive dividend yield of 4-5%.

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NEDAP Amsterdam Small Cap Index (Rebased)Source: Factset Shareholders: Cross Options 15%; Delta Lloyd

Deelnemingen 13%; Delta Lloyd 13%;

ASR 8%; Kempen CM 6%; Darlin 5%;

TKH 5%; Decico 5%;

Analyst(s):

Johan van den Hooven, NIBC Markets N.V.

[email protected]

+312 0 5508518

of 64


Prelios

Italy/General Industrials Analyser

GENERAL INDUSTRIALS

Prelios (Neutral) Slowdown in growth in 2H; good margin improvement

Q3 results in line

The facts: Prelios published its Q3 results yesterday after market closing.

Our analysis: the company’s results were almost in line with our estimates

Q3 15 Q3 16 Y/Y % Q3 16e 9M 15 9M 16 Y/Y %

Revenues 12.2 17.2 41.0% 18.1 45.8 51.3 12.0%

EBIT services 0.3 0.6

0.8 -3.3 0.1

Investments -1.7 -0.2

0.0 -8.8 -13.3

EBIT after inve -1.4 0.3

0.8 -12.1 -13.3

restructuring costs 2.6 -1.5

-1.0 0.6 -5.1

fair value change 0.2 0.0

0.0 2.7 0.0

EBIT 1.4 -1.2

-0.2 -8.8 -18.4

financial expenses -4.7 0.7

-0.2 -9.1 -4.1

PBT -3.3 -0.5

-0.4 -17.9 -22.5

income taxes -0.1 -0.3

-0.1 -1.8 -1.6

discontinued operations 0.0 0.0

0.0 3.2 0.0

net profit -3.4 -0.8

-0.5 -16.5 -24.1

The company confirmed its targets for 2016 with regard to the central cost (G&A)

reduction trend and EBIT for the management and services platform (between

EUR 10m and EUR 12m) that were communicated to the market. Revenues from

the management and services platform at the end of 2016 are expected to be

below the announced target (between EUR 100m and EUR 105m), but

nonetheless improved over 2015.

Conclusion & Action: we revised our estimates to take into account the

foregoing targets. Neutral confirmed.

Analyst(s):

Francesco Sala, Banca Akros

[email protected]

+39 02 4344 4240

Neutral

0.08


0.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg PCRE.MI/PRS IM



Free float 42%









Sales (m) 71 75 84

EBITDA (m) (3) 3 8


EBIT (m) (21) 3 8

EBIT margin nm 4.4% 9.5%

Net Profit (adj.)(m) (45) (30) 4

ROCE -19.9% 3.2% 7.7%



Debt/EBITDA -69.5 0.1 0.3


EV/Sales 2.8 2.0 1.7

EV/EBITDA nm 45.0 18.2

EV/EBITDA (adj.) nm 45.0 18.2

EV/EBIT nm 45.0 18.2

P/E (adj.) nm nm 27.5

P/BV 3.1 3.6 3.2

OpFCF yield -14.2% -12.0% 1.4%


EPS (adj.) (0.06) (0.02) 0.00

BVPS 0.08 0.02 0.03

DPS 0.00 0.00 0.00

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vvdsvdvsdy

PRELIOS FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Pirelli 13%; Unicredit 12%; Intesa

Sanpaolo 10%; shareholders' agreement

23%;

of 64


Stockmann Group - change in sales*, YoY

Source: OP, St ockmann *Timing of Finnish Crazy Days campaign conf used March-April dynamics

-1.4 %-2.9 %

-26.9 %

26.8 %

-2.7 %-4.6 %

-9.7 %

0.2 %

-10.7 %

-7.2 %-4.6 %

-30%

-20%

-10%

0%

10%

20%

30%

01/16 02/16 03/16 04/16 05/16 06/16 07/16 08/16 09/16 10/16 1-10/16

Continuing product areas and businesses

Sales by business area, YoY

Source: OP, St ockmann

-10.1 % -10.4 %

-46.2 %

57.5 %

-12.6 % -14.0 % -13.8 %

-5.1 %

-11.9 %-7.7 %

5.5 % 3.2 %0.0 % 3.2 %

6.8 %0.5 %

-7.1 %

2.2 %

-9.6 %-6.0 %

-60%

-40%

-20%

0%

20%

40%

60%

1/16 2/16 3/16 4/16 5/16 6/16 7/16 8/16 9/16 10/16

Stockmann Retail Lindex (at comparable exchange rates)

Stockmann

Finland/General Retailers Analyser

GENERAL RETAILERS

Stockmann (Accumulate) Q3 results in line

Sales continued to decline in October

The facts: Stockmann reported on Thursday its sales figures for October. The

performance remained weak. The whole group’s sales were down 7.2% YoY in

continuing product areas and businesses. Stockmann Retail's sales fell 7.7%,

burdened by the poor performance in Finland (-9.2%). Instead, sales in the

Baltics continued to grow slightly (+0.8%). Lindex's sales also continued to

decline; the drop was -6.0% at comparable exchange rates (-6.6% in euros).

Conclusion & Action: We estimate that the fairly warm weather in October

continued to postpone the sales of seasonal products, which has made the

decline in sales steeper. The impact will probably be offset by the early start of

snowfall in November compared to last year, but the underlying trend is still

worrying.

Analyst(s):

Niclas Catani, OP Corporate Bank

[email protected]

+358 10 252 8780

Accumulate

6.75


7.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg STCBV.HE/STCBV FH



Free float 100%









Sales (m) 1,469 1,332 1,229

EBITDA (m) 20 79 113


EBIT (m) (52) 20 56


Net Profit (adj.)(m) (89) (16) 29

ROCE -2.1% 0.8% 2.3%

Net debt/(cash) (m) 764 749 712




EV/Sales 0.8 0.9 0.9

EV/EBITDA 57.5 14.9 10.1

EV/EBITDA (adj.) 57.5 14.9 10.1

EV/EBIT nm 57.9 20.3


P/BV 0.4 0.5 0.5

OpFCF yield 3.4% -3.9% 8.7%


EPS (adj.) (1.23) (0.22) 0.41

BVPS 14.53 14.24 14.57

DPS 0.00 0.00 0.00

5.0

5.5

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6.5

7.0

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vvdsvdvsdy

STOCKMANN Stoxx General Retailers (Rebased)Source: Factset

Shareholders: HTT STC Holding Oy Ab 12%;

Föreningen Konstsamfundet -ryhmä 9%;

Svenska litteratursällskapet i Finland r.f.

8%;

of 64


DiaSorin

Italy/Healthcare Analyser

HEALTHCARE

DiaSorin (Accumulate) Sales continued to decline in October

Q3 sales and profitability slightly higher than expected

DIASORIN: Q3/9M 16 results

9M 15a 9M 16a % Chg Akros 9M 16e

Sales 368.4 413.3 +12.2% 409.8

EBITDA 136.4 158.4 +16.1% 155.2

% margin 37.0% 38.3% 37.9%

Q3 15a Q3 16a % Chg Akros 9M 16e

Sales 123.2 147.0 +19.3% 143.6

EBITDA 45.0 56.1 +24.6% 52.9

% margin 36.5% 38.1% 36.8%

Source: Company Data

9M 16 sales were slightly higher than our estimates. Positive sales growth

was due to: 1) continuous strong growth of CLIA ex Vit-D 25 OH tests sales

(+13.6% at CER), which was helped in particular by the good performance of

Infectious Diseases, Pre-natal screening, Stool Testing and Vitamin D1,25; 2) the

expected sales slowdown of Vitamin D 25 OH test sales (-2.2% at CER); 3) the

positive growth of Instrumentation & other (+11.6% at CER); 4) the positive

contribution of the newly acquired Focus business (EUR 25.5m); 5) the negative

impact of forex (EUR 6m).

9M 16 EBITDA was higher than our estimates (9M EBITDA margin 38.3% vs

Akros est 36.8%). 9M 16 EBITDA grew by 16.1% Y/Y. The growth was especially

due to: 1) a stable trend of the gross margin (68.3% in 9M 16 vs 68.2% in 9M 15

–gross margin reduction inn Q3 was due to some phasing on sales to distributors

which enjoy lower prices, higher one-off scrap and rework costs, light dilution

coming from one full quarter of Focus Business); 2) the lower incidence of

operating expenses on sales.

Cash generation remains strong: NFP at September 30, 2016 was positive by

EUR 44m, down by EUR 223.9m compared to EUR 267.9m at December 31,

2015, mainly as a result of the acquisition of Focus Diagnostics and of EUR 14m

of share buyback (Q3M 16 free cash flow was EUR 43.3m vs EUR 35.5m in Q3

15).

FY 16 guidance confirmed: during the result conference call, the management

confirmed FY 16 guidance previously announced:

- sales growth of +6 - 7% Y/Y at CER;

- EBITDA growth of +9% Y/Y at CER.

Conclusion & Action: based on the foregoing results, we reckon unjustified

the yesterday negative reaction of the stock, therefore we confirm our

Accumulate recommendation. Based on the management indications, we

maintain our FY 16 estimates, which are substantially in line with the company’s

guidance and confirm our target price of EUR 62.70 per share calculated based

on our DCF model (WACC of 6.65% and 2.0% perpetual growth rate).

Analyst(s):

Paola Saglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

50.75


62.70



Target price: EUR

Share price: EUR

Reuters/Bloomberg DIAS.MI/DIA IM



Free float 43%









Sales (m) 499 562 637

EBITDA (m) 185 211 241

EBITDA margin 37.1% 37.5% 37.7%

EBIT (m) 152 168 194

EBIT margin 30.5% 29.9% 30.5%


ROCE 28.7% 16.9% 19.1%

Net debt/(cash) (m) (268) (66) (190)


Debt/EBITDA -1.4 -0.3 -0.8


EV/Sales 4.9 5.0 4.2

EV/EBITDA 13.3 13.2 11.1

EV/EBITDA (adj.) 13.3 13.2 11.1

EV/EBIT 16.2 16.6 13.7

P/E (adj.) 27.0 25.6 22.1

P/BV 4.6 4.1 3.4

OpFCF yield 3.7% -6.9% 4.2%


EPS (adj.) 1.80 1.99 2.29

BVPS 10.49 12.48 14.77

DPS 0.65 0.65 0.68

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DIASORIN FTSE Italy All Share (Rebased)Source: Factset

Shareholders: IP Investimenti e partcipazioni 44%;

Management 13%;

of 64


De Longhi

Italy/Household Goods Analyser

HOUSEHOLD GOODS

De Longhi (Neutral) Q3 sales and profitability slightly higher than expected

Q3: weak top line but good cash flow generation

The facts: Yesterday De Longhi released its Q3 and 9M 2016 results and held a

CC in the afternoon. After results and CC stock closed at -3.7%.

Our analysis: De Longhi’s quarterly results came in weaker than expected in

terms of top line but with a slightly better operating performance, despite a difficult

market scenario (top line -4.6% Y/Y in 9M, -2% like for like). Improved profitability

allowed DLG to improve net profit from EUR 62.5m to EUR 72.1m in 9M (+15%).

EBITDA major contributor in 9M were: positive: price effect (EUR 16m) and cost

reduction (EUR 20m); negative: FX (EUR -21m), Volumes (EUR -10m).

Data in EUR m Q3

15A

Q3

16A Y/Y

Q3

16E

9M

15A

9M

16A Y/Y

9M

2016E

Sales 424.2 387.2 -8.7% 398.9 1,215 1,159 -4.6% 1,171

EBITDA 54.6 50.6 -7.3% 51.5 149.9 154.5 3.1% 155.4


12.9% 12.3% 13.3%

13.3%

EBIT 41.4 37.9 -8.5% 39.1 111.8 117.7 5.3% 118.9

EBIT margin 9.8% 9.8% 9.8% 9.2% 10.2% 10.2%

Source: Banca Akros, De Longhi estimates

Strong operating cash flow allowed DLG to slightly reduce its net cash in Q3 to

EUR 159m (EUR 173m in June) despite the seasonal increase in NWC due to

stocking activity (inventories up from EUR 382m to EUR 433m in Q3, thus leading

NWC/FY 2016E sales from 12.3% in June to 13.7% in Sep). High focus on NWC

was confirmed by the management decision to avoid increase in accounts

receivable despite a potential sales loss in the period.

Geographic. Strong weakness in MEIA (-25.8% Y/Y in 9M, -31.4% in Q3) only

partially offset by high single digit growth in North America, China and Japan.

Europe declined by 2.1%. The drop in MEIA was driven by: i) reduction of activity

in Egypt; ii) destocking in Saudi Arabia; iii) slowdown in Cooking & Food

Preparation after 2015 strong performance.

Products. Still strong contribution from Coffee makers in 9M despite the negative

performance from capsule products that was not able to offset a strong decline in

sales in the Cooking & Food Preparation division.

Guidance. DLG’s management provided a guidance on 2016 implying stable top

line and an EBITDA improvement in absolute value. In 2017 top line should grow

by at least 5% due to new products launch (Cooking & Food Preparation to

benefit since Q4-16), new distribution agreements, recovery in some geographical

areas.

M&A. Possible sizeable deal thanks to net cash position and strong cash flow

generation. Best targets would be companies’ in US and APAC with a focus on

products distributable with the current DLG’s network.

Conclusion & Action: Weak set of results as expected, testifying some

difficulties in the reference market and, in particular, in some geographical areas

(MEIA) and product categories (i.e. Cooking & Food Preparation, Capsule coffee

makers). However, we appreciate once again the strong focus on profitability

enhancement and cash flow generation achieved also through NWC policies. We

believe new products and general market recovery in some geographical areas in

2017 could support the company’s guidance for 2017, while profitability will

continue to gradually increase over the years. M&A still an opportunity in a

mature market but we do not expect any major announcement in the short term.

We trim our estimates on 2016 to factor in a slightly lower top line and we move

our TP to EUR 21.5/sh. Neutral confirmed.

Analyst(s):

Enrico Filippi, CEFA, Banca Akros

[email protected]

+39 02 4344 4071

Neutral

19.77


21.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg DLG.MI/DLG IM



Free float 38%









Sales (m) 1,891 1,893 1,977

EBITDA (m) 285 287 301

EBITDA margin 15.1% 15.2% 15.2%

EBIT (m) 232 235 248

EBIT margin 12.3% 12.4% 12.5%


ROCE 22.7% 22.4% 23.2%

Net debt/(cash) (m) (188) (260) (341)


Debt/EBITDA -0.7 -0.9 -1.1


EV/Sales 2.1 1.4 1.3

EV/EBITDA 13.9 9.5 8.8

EV/EBITDA (adj.) 13.9 9.5 8.8

EV/EBIT 17.1 11.6 10.6

P/E (adj.) 27.8 19.2 18.2

P/BV 4.6 3.0 2.7

OpFCF yield 3.4% 4.7% 5.0%


EPS (adj.) 1.00 1.03 1.09

BVPS 6.06 6.65 7.27

DPS 0.41 0.44 0.46

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DE LONGHI Stoxx Household Goods (Rebased)Source: Factset

Shareholders: De Longhi Industrial SA 62%;

of 64


Fila

Italy/Household Goods Analyser

HOUSEHOLD GOODS

Fila (Buy) Q3: weak top line but good cash flow generation

9M 2016 results preview

The facts: Fila is due to release its 9M 16E results today after market closure, a

conf. call will follow @ 6:00 pm CET.

Our analysis: our estimates point to 40% sales increase in 9M 16 but we do not

rule out even higher growth. The top line drivers were: over historical average

organic growth (our est. +9% in 9M 16E to EUR 222m); contribution from

acquisitions (est. EUR 81m in 9M 16E). We calculated EUR 34.6m contribution

from Writefine and EUR 48m from Daler Rowney.

It is reasonable to expect a dilution in EBITDA margin (130 bps in 9M 16E)

related to the recently acquired companies’ integration.

Fila: 9M 16E results preview

(EUR m) Q3 15 Q3 16E Y/Y 9M 15 9M 16E Y/Y

Sales 76.3 103.3 35.4% 217.8 304.9 40.0%

EBITDA adj. 13.1 16.8 28.0% 40.9 53.3 30.4%

% on sales 17.1% 16.2%

18.8% 17.5%

Net income adj. 7.4 8.2 10.3% 20.7 25.2 22.0%

Source: Company data and Banca Akros estimates

Conclusion & Action: Buy confirmed based, once again, on the strong top line

organic growth and on the capability to make valuable acquisitions.

Analyst(s):

Giada Cabrino, CIIA, Banca Akros

[email protected]

+39 02 4344 4092

Buy

13.00


14.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg FILA.MI/FILA IM



Free float 26%








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FILA FTSE Italy Microcap (Rebased)Source: Factset

Shareholders: Pencil 66%; VEI 8%;

Key financials (EUR)

12/15 12/16e

12/17e Sales (m) 275 394 419

EBITDA (m) adj. 47.5 63.1 71 EBITDA margin adj. 17.3

% 15

%

17.0

% EBIT (m) 34 52 59 EBIT margin 12.3

% 13.1

% 14.2

% Net Profit (adj.)(m) 25 32 35 ROCE 9.8

% 8.6

% 9.2

% Net debt/(cash) (m)

39 129 109 Net Debt/Equity 0.2 0.5 0.3 Debt/EBITDA

0.9 2.0 1.5 Int. cover(EBITDA/Fin. int) high 9.3 12.3 EV/Sales 1.9 1.8 1.6 EV/EBITDA 12.4 11.2 9.6 EV/EBITDA (adj.) 10.9 10.8 9.6 EV/EBIT 15.3 13.7 11.6 P/E (adj.) 18.1 17.0 15.3 P/BV 2.4 2.4 2.1 OpFCF yield -

9.0% -

20.4% 4.5

% Dividend yield 0.7

% 1.1

% 1.4

% EPS (adj.) 0.60 0.77 0.86 BVPS 4.50 5.51 6.22 DPS 0.09 0.15 0.19

of 64


CNH Industrial

Italy/Industrial Engineering Analyser


CNH Industrial (Accumulate) 9M 2016 results preview

NAFTA 4WD tractor sales rebounded for the first time since 2014

The facts: The US Association of Equipment Makers ("AEM") released the US

and Canadian AG equipment registration data for the month of October 2016 last

night.

Our analysis: Here follow the October data by segment:

2 wheel-drive tractor sales came in at 23.4 K units, marking a +1.7% Y/Y

and a +1.5% YTD.

4 wheel-drive tractor sales came in at 612 units, marking a +19% Y/Y and

a -20% YTD.

Combine sales came in at 579 units, marking a -27.5% Y/Y and a -21.5%

YTD.

October is a rather important month as it weighs for ~10% of the annual US and

Canadian annual sales; October 2016 had two working days less than October

2015; also in this light, the October data seem pretty good, especially for 4 wheel-

drive tractors, while the combine performance remained weak.

Consider that the NAFTA 4WD tractor sales fell for at least 33 months in a row

with only one exception (December 2015, +0.6% Y/Y).

Conclusion & Action: we remind you that the NAFTA 4WD tractor registrations

are expected to fall ~25% Y/Y in 2016 reaching ~3 K units, marking a -65% vs the

record level reached in 2012 (8.5 K units); the 2001-15 average registrations for

4WD tractors stands at ~5.2 K units and the FY16 sales should be ~43% below

that level. We deem the news be positive.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Accumulate

7.39


7.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg CNHI.MI/CNHI IM



Free float 56%








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

Sales (m) 24,677 23,360 24,208

EBITDA (m) 2,126 2,073 2,258


EBIT (m) 1,432 1,395 1,581

EBIT margin 5.8% 6.0% 6.5%


ROCE 8.9% 8.8% 9.9%

Net debt/(cash) (m) 1,622 2,068 1,568




EV/Sales 0.4 0.5 0.5

EV/EBITDA 4.6 5.6 4.9

EV/EBITDA (adj.) 4.6 5.6 4.9

EV/EBIT 6.8 8.4 7.0

P/E (adj.) 15.0 25.0 18.1

P/BV 1.9 2.4 2.1

OpFCF yield 12.6% -0.7% 3.9%

Dividend yield 1.6% nm 2.4%

EPS (adj.) 0.46 0.32 0.44

BVPS 3.57 3.31 3.76

DPS 0.13 -0.06 0.19

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5


vvdsvdvsdy

CNH INDUSTRIAL FTSE MIB (Rebased)Source: Factset

Shareholders: EXOR 27%; HARRIS LP 14%;

BLACKROCK 3%;

of 64


Datalogic



Datalogic (Accumulate) NAFTA 4WD tractor sales rebounded for the first time since 2014

Q3 2016 results preview

The facts: Q3 16 results are due out today.

Our analysis: the management already announced that Q3 16 sales recorded an

increase of 4.6% Y/Y at EUR 139.9m. This growth was due to a positive

performance of ADC sector (+8.4% Y/Y, +8.6% at CER) and a stable trend of IA

sector (+1.1% Y/Y).

We forecast Q3 16 profitability to continue to benefit from the operating leverage

in the ADC division and will be positively impacted by the first significant

improvements of operating efficiency in the IA division.

The following table shows our Q3/9M 16 forecast:

DATALOGIC: Q3 16e and 9M 16e preview

Q3 15a Q3 16e Chg 9M 15a 9M 16e Chg

Sales 133.8 139.9 4.6% 391.3 421.8 7.8%

EBITDA 18.8 20.5 9.1% 53.1 65.4 23.3%

Margin % 14.0% 14.6% 13.6% 15.5%

Source: Company Data and BANCA AKROS estimates

Conclusion & Action: we confirm our Accumulate recommendation.

Analyst(s):

Paola Saglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

18.00


19.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg DAL.MI/DAL IM



Free float 33%









Sales (m) 535 578 617

EBITDA (m) 74 89 98

EBITDA margin 13.8% 15.4% 15.9%

EBIT (m) 56 67 75

EBIT margin 10.4% 11.7% 12.2%


ROCE 11.1% 12.1% 12.3%

Net debt/(cash) (m) 21 2 (24)

Net Debt/Equity 0.1 0.0 -0.1

Debt/EBITDA 0.3 0.0 -0.2


EV/Sales 1.9 1.9 1.8

EV/EBITDA 14.0 12.4 11.0

EV/EBITDA (adj.) 14.0 12.4 11.0

EV/EBIT 18.7 16.4 14.4

P/E (adj.) 23.6 20.9 17.9

P/BV 3.2 3.0 2.6

OpFCF yield 5.2% 2.5% 2.8%


EPS (adj.) 0.69 0.86 1.01

BVPS 5.10 5.96 6.97

DPS 0.15 0.15 0.16

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vvdsvdvsdy

DATALOGIC FTSE Italy STAR (Rebased)Source: Factset

Shareholders: Hydra 67%;

of 64


Interpump



Interpump (Accumulate) Q3 2016 results preview

Q3 sales slightly lower than expected but strong profitability

9M 16 sales up by 1.6% (slightly lower than our est of +1.8%) - -0.5% on a

like-for-like basis and at constant exchange rates: in particular, the Water

Jetting division decreased by 2.0% (-3.3% on a like-for-like basis and at constant

exchange rates) and the Hydraulic sector showed a sales growth of +3.8%

(+1.2% on a like-for-like basis and at constant exchange rates). The performance

of the hydraulic sector is due to an increasing market share, due to cross selling

and cross market; while the slowdown in the water jetting market are due to the

uncertainty linked to US elections, indirectly to the fall of the oil price sector and to

the shift between purchase and rental.

9M 16 EBITDA margin improved by 7.3% (better than our estimates of

+5.8%): in particular, the profitability in the Water Jetting remained stable, while,

the strong profitability growth in the Hydraulic division of +13.5% has been driven

by integration synergies and the positive effects of the ongoing reorganization

process.

INTERPUMP: Q3/9M 16 results

Q3 15a Q3 16a % Chg

Sales 214.9 220.6 +2.6%

EBITDA 44.8 49.3 +10.1%

% margin 20.8% 22.3%

9M 15a 9M 16a % Chg

Sales 681.9 693.0 +1.6%

EBITDA 141.3 151.6 +7.3%

% margin 20.7% 21.9%

Source: Company Data

Positive outlook on FY 16 results confirmed: based on the current visibility, the

management expects sales to continue to show the same low but positive growth

trend recorded in the first nine months, while the profitability will continue to

benefit from the reorganisation process. So the management is confident in

confirming FY 16 guidance announced in February for profitability and NFP: FY

16 EBITDA at EUR 190m (+/-5m) and FY 16 NFP at EUR 190m (+/- 10m); while

the revenues, excluding acquisitions, will be slightly below the initial expectations:

FY 16 sales guidance of EUR 915m (+/- 10m).

Based on 9M 16 profitability, we confirm our FY 16e EBITDA of EUR 190.4m.

In addition, the group’s chairman, Mr Montipò, said to expect an acceleration in

the M&A activity in 2017, in order to achieve the target to 2017 of EUR 1bn sales.

In particular, the group wants to strengthen its position in the recently entered

Hoses & Fittings sector and in the plunger pumps for food industry recently

entered through Bertoli acquisition.

Conclusion & Action: we reiterate our positive stance on the stock and we

confirm our Accumulate recommendation and our target price of EUR 16.20 per

share, calculated based on our DCF model (WACC at 7.1% and 1.8% perpetual

growth rate).

Analyst(s):

PaolaSaglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

14.77


16.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg ITPG.MI/IP IM



Free float 80%









Sales (m) 895 913 944

EBITDA (m) 180 190 198

EBITDA margin 20.1% 20.9% 20.9%

EBIT (m) 137 146 151

EBIT margin 15.3% 16.0% 16.0%


ROCE 9.5% 9.7% 10.2%




Int. cover(EBITDA/Fin. int) (6.7) (6.8) (6.9)

EV/Sales 2.0 2.0 1.8

EV/EBITDA 10.0 9.4 8.5

EV/EBITDA (adj.) 10.0 9.4 8.5

EV/EBIT 13.2 12.3 11.1

P/E (adj.) 15.9 16.7 16.2

P/BV 2.5 2.3 2.0

OpFCF yield -9.3% 10.2% 8.5%


EPS (adj.) 0.90 0.88 0.91

BVPS 5.66 6.52 7.42

DPS 0.18 0.19 0.20

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vvdsvdvsdy

INTERPUMP Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: IPG Holding 20%;

of 64


Prima Industrie



Prima Industrie (Buy) Q3 sales slightly lower than expected but strong profitability

Q3 to confirm top line and profitability improvement

The facts: Prima Industrie is going to release Q3 / 9M 2016 results today. No CC

is scheduled.

Our analysis: The strong order backlog already announced during the last

months should have supported a material top line increase, coupled with

profitability enhancement in Q3.

As shown in the following table revenues should increase to EUR 94.7m in the

quarter (+12.5% Y/Y) or EUR 278m in 9M 16 (+6.9% Y/Y). EBITDA should reach

EUR 23.5m in 9M (8.5% margin) whilst EBIT should come at EUR 12.4m (4.5%

margin). On the back of our estimates on financial charges and taxes for the year

we project a net profit of EUR 1.8m in Q3 (EUR 4.7m in 9M, more than doubling

the figure recorded in 9m 15).

EUR m Q3-15A Q3-16E Y/Y 9M-15A 9M-16E Y/Y

Sales 84.2 94.7 12.5% 260.1 278.0 6.9%

EBITDA 7.0 8.7 24.2% 21.7 23.5 8.2%


8.3% 8.5%

D&A (3.4) (3.2) -6.3% (9.9) (10.9) 10.1%

EBIT 3.6 5.5 53.2% 11.8 12.6 6.6%

EBIT margin 4.3% 5.8%

4.5% 4.5%

Net Profit 0.9 1.8 95.4% 2.2 4.7 n.m.


Conclusion & Action: we expect a good top line growth in Q3 16, thus

confirming once again previous quarters positive indications on top line growth;

profitability should increase too supporting our estimates of margins expansion by

FY 16 and further improving over the next years thanks to better product mix (i.e.

increase in sales of internally developed laser fibre solutions). We believe

investors will pay attention also to updated order backlog - we remind that the

management recently talked about a historical high 6-months backlog – that could

once again confirm positive trend for the coming quarters.

Analyst(s):


[email protected]

+39 02 4344 4071

Buy

14.00


16.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg PRII.MI/PRI IM



Free float 43%









Sales (m) 364 395 428

EBITDA (m) 31 36 43


EBIT (m) 17 21 28

EBIT margin 4.8% 5.2% 6.6%


ROCE 4.2% 4.7% 6.2%





EV/Sales 0.7 0.6 0.6

EV/EBITDA 8.3 7.0 5.7

EV/EBITDA (adj.) 8.3 7.0 5.7

EV/EBIT 14.9 12.3 8.6

P/E (adj.) 25.8 14.8 10.0

P/BV 1.2 1.1 1.0

OpFCF yield -7.5% 5.8% 6.6%


EPS (adj.) 0.57 0.95 1.39

BVPS 12.37 13.07 14.16

DPS 0.25 0.30 0.35

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vvdsvdvsdy

PRIMA INDUSTRIE Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Management 7%; Stable Financial

Investors 50%;

of 64


Allianz

Germany/Insurance Analyser

INSURANCE

Allianz (Buy) Q3 to confirm top line and profitability improvement

Strong Q3 results well above expectations

The facts: Allianz has just reported strong Q3 results which came in well above

our and consensus expectations. Operating profit increased by 18% yoy to EUR

2,899m (equinet: EUR 2,600m), all business units surpassing our forecast. In P/C

operating profit increased by 4% yoy to EUR 1,410m (equinet: EUR 1,300m) due

to a lower than forecasted C/R of 93.5% (exp. 95.0%). In L/H operating profit

increased by 53% yoy to EUR 1,129m (exp. EUR 900m). Positively, Pimco

reported net inflows of EUR 4.7bn, for the whole group net inflows stood at EUR

6.2bn (exp. EUR 0bn). Solvency II ratio increased by 1%-pts. qoq 186%. ALV

sticks to its 2016 operating profit target of EUR 10.5bn (+/- EUR 0.5bn); note that

it has achieved a 9M operating profit of EUR 8bn.

Our analysis: In P/C Allianz benefited from low nat cat losses (nat cat ratio stood

at 0.2%-pts.) while the run-off ratio was at 3.0%-pts. on a normal level. Revenues

remained stable yoy in Q3 at EUR 11.5bn, the price effect stood at 1.6%-pts. in

Q3 ‘16 (Q2 ‘16: 0.7%-pts.). In L/H the operating performance benefited from the

favourable capital market environment and positive one-offs (DAC true-ups). In

Asset Management CIR improved by almost 3%-pts. yoy to 60.8% due to lower

costs, while revenues were down by 6% yoy in Q3, mainly due to lower

performance fees (-38% yoy). Other non-operating items were with EUR -120m

better than expected (equinet: EUR -400m); therefore net profit was with EUR

1.85bn well above our forecast of EUR 1.4bn.

Conclusion & Action: Allianz reported strong Q3 results which came in better

than expected. Particularly the fact that Pimco has finally managed to show net

inflows again should be seen positively. We stick to our Buy rating with a target

price of EUR 160 as the shares remain attractively valued (2017e PER: 9x) while

offering a dividend yield of more than 5% for 2016e.

Analyst(s):

Philipp Häßler, CFA, equinet Bank

[email protected]

+49 69 58997 414

Buy

148.75


160.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ALVG.DE/ALV GY



Free float 100%









Life Gross premiums (m) 66,903 70,248 73,761

Non-Life Gross prem.(m) 51,597 53,145 54,208

Total Net Revenues (m) 144,887 148,043 152,345

Life Ins.Tech.Result (m) -9,103 -8,606 -8,102

Non-Life Ins. Tech.Result 2,243 2,138 2,235

EBIT (m) 10,923 11,738 12,162

Net Profit (adj.) (m) 6,616 7,085 7,375


ANAV (m) 33,032 36,275 39,589

ROE (adj.) (%) 10.7 10.9 10.7

Combined ratio (%) 95.6 95.0 95.0

Solvency Ratio 186.6% 192.2% 198.0%

P/E (adj.) 11.2 9.5 9.2

P/BV 1.2 1.0 0.9

P/ANAV 2.2 1.8 1.7

P/EbV 1.1 1.0 0.9


EPS (adj.) 14.55 15.58 16.22

BVPS 140.32 148.76 157.40

ANAVPS 73.40 80.61 87.98

EbVPS 145.47 155.33 165.49

DPS 7.30 7.75 8.00

110

120

130

140

150

160

170


vvdsvdvsdy

ALLIANZ Stoxx Insurance (Rebased)Source: Factset

Shareholders:

Allianz - Q3 2016

EUR m Q3 '16 Q3 '16e Q3 15 yoy Cons. delta

Net premiums 27,700 29,450 27,500 1% na na

C/R P/R Reins. 93.5% 95.0% 94.1% -60 BP na na

Operating res. 2,899 2,600 2,452 18% 2,569 1%

P/C 1,410 1,300 1,352 4% 1,331 -2%

L/H 1,129 900 738 53% 894 1%

Asset Man. 604 570 500 21% 566 1%

Others -244 -170 -138 na na na

Pretax Profit 2,793 2,200 2,159 29% 2,390 -8%

Net income 1,855 1,396 1,359 36% 1,559 -10%

Sources: Allianz, equinet Research

of 64


Cattolica Assicurazioni

Italy/Insurance Analyser

INSURANCE

Cattolica Assicurazioni (Neutral) Strong Q3 results well above expectations

3Q 2016 preview

The facts: Cattolica is due to release its 3Q 16 results today, during market

hours. A conference call will be arranged the same day at 15.00 CET.

Our analysis: we summarize our result preview in the following table.

3Q16E Y/Y 9M16E Y/Y 3Q15 9M15

Net premiums 886 -9% 3,136 -16% 974 3,740

Net Profit 21 -31% 38 -54% 31 84

Net Profit Adj. 21 -42% 93 -10% 37 104

CoR 93.5% 1% 93.1% 1% 92.3% 92.5%

We estimate a decrease of c. 9% Y/Y in net premiums, mainly due to the

slowdown in the distribution agreement with Banca Popolare di Vicenza in life

business and to the weak momentum we expect in auto business, still affected by

the decrease in tariffs and despite the positive trend we estimates in the numbers

of policies sold. The CoR is seen around 93.5% vs 92.3% in 3Q15, mainly due to

the impact of the Italian August earthquake. We expect a financial result (EUR

110m) better than in 3Q15 (EUR 89m) which anyway was affected by non-

recurring items.

That said, we estimate an adj. net profit of c. EUR 21m, -42% Y/Y, mainly due, as

highlighted, by the life weak net premiums. After the impairment of Cattolica’s

stake in some small Italian banks in 1H16, we don’t expect further write-downs in

this quarter.

Conclusion & Action. In view of the results, we stick to neutral. It will be crucial

to understand the future of Banca Popolare di Vicenza stake (15.1%), now owned

by Atlante fund. We also remind readers that Cattolica is likely to exercise the put

options on the insurance partnerships with BPVI, which exercise will expire in

February 2017 and could produce a cash-in of c. EUR 175m. The transformation

of Cattolica into a joint stock company or a more likely improvement in corporate

governance in 2017 remains the most important upside potential in the medium

term, as well as M&As, in accordance with the business plan presented in 2014.

Analyst(s):


[email protected]

+39 02 4344 4022

Neutral

5.50


6.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg CASS.MI/CASS IM



Free float 85%












Life Ins.Tech.Result (m) 0 0 0

Non-Life Ins. Tech.Result 0 0 0

EBIT (m) 225 258 251

Net Profit (adj.) (m) 140 113 110


ANAV (m) 1,696 1,778 1,838

ROE (adj.) (%) 7.3 5.9 5.5

Combined ratio (%) 91.5 93.0 92.5

Solvency Ratio 209.6% 218.7% 221.0%

P/E (adj.) 9.0 8.3 8.5

P/BV 0.7 0.5 0.5

P/ANAV nm nm nm

P/EbV nm nm nm


EPS (adj.) 0.82 0.66 0.64

BVPS 11.17 11.65 12.00

ANAVPS 0.00 0.00 0.00

EbVPS 0.00 0.00 0.00

DPS 0.35 0.30 0.32

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

CATTOLICA ASSICURAZIONI FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Banca Popolare di Vicenza 15%;

of 64


Generali


INSURANCE

Generali (Accumulate) 3Q 2016 preview

Conference call: some highlights

The facts: Generali reported its 9M16 yesterday, followed by a Q&A conference call.

Our analysis: following a set of operating results essentially in line with consensus,

despite better than ours, the conference call set the following take away:

Italy: the profitability in motor business (c 40% of the total motor business of the

group) is deteriorating, although the management team expects prices will go up in

the next months with a possible improvement in current generation’s profitability:

the volume effect is good and Generali sold over 1m telematics policies so far. In

Non-Motor business, Generali’s market share is around 30% and the underwriting

and profitability are solid, despite low growth rate linked to Italian economic

condition. To protect margins, the Life business is going towards unit liked,

protection and hybrid products (controlled volatility funds like underlying were also

introduced), as well as in Germany and France. The Italian earthquake costs could

be around EUR 100m (gross of taxes), like in Aquila’s one;

Exposure on Italian financial sector: c. 1% of the total assets base, of which c.

40% in subordinated bond and the rest is split between senior and covered bonds.

Generali doesn’t have an exposure to equity in the Italian banking sector;

Germany: Life business, despite the low interest rates, is solid and it doesn’t

require any capital injection in the short term, at least until 2021 or 2022 (Generali

Leben);

France: the CoR is around 100% at the moment, but the situation is improving

quickly. The country is cash positive both in Life and in P&C.

Solvency II: the approval to include the French life operations in the internal model

calculation is expected by the end of March 2017, reducing therefore the gap

between internal-model (188%) and Regulatory Solvency Ratio (159%). On the

other side Generali will use the EIOPA portfolio in FY 16 calculation, with a

possible negative impact between 6% and 8% in terms of Solvency ratio.

Conclusion & Action: overall, 3Q16 technical performance improved and conference

mood was essentially positive. Dividend apart (yield around 6%), the real trigger will be

the investor day in the short term (23rd November). Relative valuation is still cheap: we

are talking about a discount of c. 20% in terms of P/E multiples, despite a more

generous dividend policy compared to peers. We stick to accumulate.

Yield P/E Adj.

Company 2016 2017 2018 2016 2017 2018

ASSICURAZIONI GENERALI 6.6 7.1 7.5 8.2 7.7 7.5

ALLIANZ SE-REG 5.0 5.1 5.4 10.3 9.8 9.3

AXA SA 5.2 5.5 5.8 9.4 9.2 8.9

ZURICH INSURANCE GROUP AG 6.3 6.4 6.5 12.3 11.2 10.3

PEERS' MEDIAN 5.2 5.5 5.8 10.3 9.8 9.3

GENERALI VS PEERS 27% 29% 30% -21% -21% -20%

Source: Bloomberg’s consensus

Analyst(s):


[email protected]

+39 02 4344 4022

Accumulate

11.77


13.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg GASI.MI/G IM



Free float 76%












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

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


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

ROE (adj.) (%) 9.3 9.0 8.5

Combined ratio (%) 93.3 93.2 93.2

Solvency Ratio 196.5% 199.8% 203.8%

P/E (adj.) 12.4 8.7 8.8

P/BV 1.1 0.7 0.7

P/ANAV 1.3 0.9 0.8

P/EbV 0.9 0.6 0.6


EPS (adj.) 1.37 1.36 1.33

BVPS 15.14 15.78 16.43

ANAVPS 13.11 13.75 14.40

EbVPS 19.35 20.14 20.31

DPS 0.72 0.68 0.67

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vvdsvdvsdy

GENERALI Stoxx Insurance (Rebased)Source: Factset

Shareholders: Mediobanca 13%;

of 64


MAPFRE SA

Spain/Insurance Analyser

INSURANCE

MAPFRE SA (Neutral) Conference call: some highlights

Q3 2016 Earnings: Slightly better

The facts: 9m’16 net profit reached EUR572m, 4.4% above our estimated

EUR548m; the 3Q data (EUR191.6m) repeated the EUR191.7m in 1Q’16 and

surpasses 2Q’16 by 1.5% (EUR188.7m).

Our analysis: Business performance: in 9m’16 net premiums (EUR17.1bn) fell

1.3% Y/Y, which compares with -0.8% drop in June 2016. Per insurance

business, Non-life premiums (EUR13.5bn) drop -2.3T Y/Y (-1.3% 1H’16 partially

owing to the forex effect). Life premiums (EUR3.6bn) increases +3.2% (+1.3%

1H’16), which leans on 25% Y/Y growth in the agent network in Spain.

Combined ratio: reaching 97.2% 9m’16 at Group level and higher during the

quarter (6m’16 97.5%) and also vs. 9m’15 (98.7%). The improvement comes due

to the Claims Ratio (69.2%) which compares with the 70.0% a year earlier and

69.9% at June’16. Per areas and vs. June 2016, the advance leans on the

improvements in MAP-Iberia (71.1% vs. 72.4%); MAP-Brazil (62.5% vs. 64.3%, in

which the extreme weather events in 1Q’16 have not repeated), in MAP-

N.America (73.9% vs. 74.6%) and in MAP-Re (65.2% vs. 67.1%). On the

contrary, Mapfre’s Expense ratio erode to 28.0% vs. 27.6% (6m’16), although

improves vs. 9m’15 (28.7%).

Managed savings: increased 6.0% YTD to EUR38.7bn (excluding the impact from

Unión Duero Vida and Duero Pensiones the growth would be 10% YTD)

Equity (EUR9,158m): back to growth, rising 6.8% YTD and surpassing the

EUR8,946m at June’16 by +2.4% and EUR8,620m at Sep15.

ROE: still under pressure, reaching 7.8% vs. 8.8% June’16, although compares

with the 8.0% 9m’15, which is partially due to the rise in equity.

Dividend: Mapfre announced a DPS EUR0.06 (gross), the same as in 2015; as

well as the total DPS against 2016 rising to EUR0.13, 7.3% below 2015.

Solvencia: la dirección de MAPFRE ha declarado que se encuentra cómoda con

el ratio de Solvencia II del 171% II que la compañía publicó en el 2T16.

Solvency: MAPFRE’s management declared that is comfortable with the ratio

Solvency II ratio released at 2Q16 but did not disclosed additional data.

Conclusion: We positively value these quarterly results. However, we prefer to

wait until the Investors Day of next week (November 16th) before making any

changes to our estimates. Mapfre trades at P/NAV’17e of 1.0x vs. peers’ 1.0x,

2017e yield of 5.3% (peers: 5.2%). Neutral reiterated.

Analyst(s):

Javier Bernat, GVC Gaesco Beka

[email protected]

+34 91 436 7816

Neutral

2.64


2.85



Target price: EUR

Share price: EUR

Reuters/Bloomberg MAP.MC/MAP SM



Free float 32%












Life Ins.Tech.Result (m) 699 720 741

Non-Life Ins. Tech.Result 919 1,143 1,264

EBIT (m) 1,476 1,863 2,132

Net Profit (adj.) (m) 577 723 860


ANAV (m) 1,366 1,407 1,449

ROE (adj.) (%) 6.5 8.2 9.2

Combined ratio (%) 98.6 96.9 96.2

Solvency Ratio 190.0% 185.0% 180.0%

P/E (adj.) 12.3 11.2 9.4

P/BV 0.8 0.9 0.8

P/ANAV 1.0 1.1 1.0

P/EbV 2.4 2.7 2.7


EPS (adj.) 0.19 0.23 0.28

BVPS 2.78 2.97 3.11

ANAVPS 2.27 2.47 2.61

EbVPS 0.97 0.98 0.98

DPS 0.13 0.13 0.14

Net Income (EURm) 9M '15 9M '16 (E) Y/Y vs.GVC 1Q16 2Q16 3Q16 Q Trend wieght (*)

Iberia 416.2 386.1 (7.2)% 19.2% 112.3 131.2 142.6 59.0%

LatAm North 39.1 36.5 (6.6)% (20.7)% 18.0 14.8 3.7 5.5%

LatAm South 33.1 18.4 (44.4)% (31.9)% 13.9 3.8 0.7 4.7%

Brazil 132.4 102.1 (22.9)% (0.9)% 27.0 41.0 34.1 18.8%

EMEA 18.9 (36.7) nm nm (10.9) (13.4) (12.7) 2.7%

North America (44.5) 59.5 nm nm 16.8 25.7 17.0 (6.3)%

APAC 0.5 (11.0) nm 37.5% (6.2) (0.7) (4.1) 0.1%

Mapfre RE 109.2 122.6 12.3% (3.5)% 51.1 39.3 32.2 15.5%

Adjustments (113.6) (105.5) (7.1)% (7.5)% (30.3) (53.0) (22.2) (16.1)%

Net Income 591.3 572.0 (3.3)% 4.4% 191.7 188.7 191.3 83.9%

Source MAP(*) pre adjustments

1.6

1.8

2.0

2.2

2.4

2.6

2.8


vvdsvdvsdy

MAPFRE SA Stoxx Insurance (Rebased)Source: Factset

Shareholders: Fundación Mapfre 68%;

of 64


UnipolSai


INSURANCE

UnipolSai (Accumulate) Q3 2016 Earnings: Slightly better

3Q16 net profit in line with estimates

The facts: UnipolSai reported 3Q16 results this early morning. CC @ at 12.00 am CET

today.

3Q16 Y/Y A/E 9M16 3Q16E 9M16E

GWP 2,279 -21% -6% 9,000 2,430 9,151

Life 864 -38% -12% 3,900 980 4,016

Non-Life 1,415 -4% -2% 5,100 1,450 5,135

EBT 222 4% 11% 605 200 583

Life 76 52% 27% 252 60 236

Non - Life 156 -9% 6% 381 148 373

RE -6 -33% 50% -16 -4 -14

Others -5 n.m. 25% -13 -4 -12

CoR (Net reinsurance) 95.2% n.a 0% 96.0% 95.4% 96.4%

Net Profit 140 -1% 2% 409 137 406

Solvency II n.a. n.m. n.a. 1.69 n.a. 1.75

Our analysis: bottom line was essentially in line with our estimates, although EBT

closed over, mainly thanks to the better result in Life business. This effect was due to

taxes higher than we estimated. We underline also the better than expected results in

RE business unit.

In the Non-Life business the direct premiums amounted to EUR 5.141bn, -2.1% Y/Y,

of which EUR 3.023bn from MV business, -4.6% Y/Y, and c. EUR 2.118bn from Non-

MV business, +1.7% Y/Y mainly thanks to the solid performance of business relating to

persons as well as new production in MV business (c. 200k policies more than 9M15).

With regard to underwriting profitability, the positive performance recorded by Non-MV

business made it possible to offset the continuous decline in average MV TPL

premiums resulting from strong competitive pressure. The company recorded a CoR

net of reinsurance around 96% (96.9% in 1H16) a little bit worse than last year (95.7%)

and better than our estimates. The Italian’s earthquake had a marginal impact.

In Life business, the direct premiums achieved EUR 3.9bn, -20.6% Y/Y, mainly due to

the comparison with the strong performance recorded last year and relating mainly to

the bancassurance channel, attributable to the commercial policy adopted by the

company aimed at maintaining the production of traditional policies at a level

compatible with the financial balance of segregated accounts over a multi-year period.

The commercial offer was consequently geared towards unit-linked and multi-branch

products.

RE business the pre-tax result closed with a loss of c. EUR 6m compared to EUR -

90m of last year, and it was still affected by the difficult situation of the real estate

market.

Conclusion & Action: considering the challenging scenario, this is a good set of

result, which, in terms of EBT, beat our estimates in all the business segments. In

terms of cumulated net profit we are in the middle (EUR 1.493bn) of UnipolSai’s

business plan targets (EUR 1.4bn – EUR 1.6bn in 2016 - 2018). Our estimates are

more conservative in terms of cumulated dividend (EUR 894m vs EUR 1bn of the

business plan in 2016 - 2018).

Analyst(s):


[email protected]

+39 02 4344 4022

Accumulate

1.72


1.65



Target price: EUR

Share price: EUR

Reuters/Bloomberg US.MI/US IM



Free float 37%












EBIT (m) 1,044 769 737

Net Profit (adj.) (m) 711 508 494


ANAV (m) 5,527 5,557 5,756

ROE (adj.) (%) 11.7 8.2 7.8

Combined ratio (%) 94.6 95.0 95.1

Solvency Ratio 172.9% 176.7% 183.4%

P/E (adj.) 9.5 9.7 10.0

P/BV 1.1 0.8 0.8

P/ANAV 1.2 0.9 0.9

P/EbV 1.2 0.9 0.8


EPS (adj.) 0.25 0.18 0.17

BVPS 2.19 2.22 2.29

ANAVPS 1.93 1.94 2.01

EbVPS 1.99 2.00 2.07

DPS 0.15 0.11 0.10

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6


vvdsvdvsdy

UNIPOLSAI Stoxx Insurance (Rebased)Source: Factset

Shareholders: Unipol Gruppo Finanziario S.p.A. 61%;

Norges Bank 2%;

of 64


Atlantia

Italy/Materials, Construction & Infrastructure Analyser


Atlantia (Accumulate) 3Q16 net profit in line with estimates

Good results expected in Q3

The facts: Atlantia is publishing its third quarter results today.

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

Q3 15 Q3 16e Y/Y 9M 15 9M 16e Y/Y

Total revenues 1,510 1,544 2.2% 4,003 4,109 2.6%

o/w Italian motorways 1,085 1,100 1.3% 2,842 2,950 3.8%

o/w Foreign motorways 136 149 9.2% 415 404 -2.8%

o/w ADR 252 263 4.2% 622 662 6.4%

o/w Other 50 35 -30.0% 139 102 -26.6%

EBITDA 970 1,042 7.4% 2,488 2,618 5.2%

% revenues 64.2% 67.5%

62.2% 63.7%

EBIT 729 750 2.9% 1,804 1,713 -5.0%

PBT 584 616 5.5% 1,220 1,325 8.6%

Net profit 377 376 -0.3% 754 787 4.4%


We highlight that the company has already disclosed the traffic figures for the fist

nine months of 2016.

Conclusion & Action: we expect the company’s results to be good and show a

sizeable growth in EBITDA compared to Q3 15.

Analyst(s):


[email protected]

+39 02 4344 4240

Accumulate

20.19


27.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ATL.MI/ATL IM



Free float 52%









Sales (m) 5,304 5,295 5,488

EBITDA (m) 3,215 3,349 3,475

EBITDA margin 60.6% 63.2% 63.3%

EBIT (m) 2,212 2,376 2,450

EBIT margin 41.7% 44.9% 44.7%


ROCE 5.0% 5.3% 5.4%

Net debt/(cash) (m) 10,399 10,028 10,070




EV/Sales 6.1 5.3 5.1

EV/EBITDA 10.0 8.4 8.1

EV/EBITDA (adj.) 10.0 8.4 8.1

EV/EBIT 14.6 11.9 11.5

P/E (adj.) 27.3 18.2 17.4

P/BV 3.0 2.4 2.3

OpFCF yield 5.2% 7.2% 5.2%


EPS (adj.) 0.90 1.11 1.16

BVPS 8.13 8.49 8.82

DPS 0.88 0.97 1.04

20

21

22

23

24

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26

27


vvdsvdvsdy

ATLANTIA Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Sintonia 30%; Investco 8%; Blackrock

5%; Fondazione CRT 5%;

of 64


Boskalis Westminster

Netherlands/Materials, Construction & Infrastructure Analyser


Boskalis Westminster (Neutral) Good results expected in Q3 Neutral

29.41


33.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg BOSN.AS/BOKA NA



Free float 60%









Sales (m) 3,249 2,378 2,159

EBITDA (m) 813 550 484

EBITDA margin 25.0% 23.1% 22.4%

EBIT (m) 520 283 238

EBIT margin 16.0% 11.9% 11.0%


ROCE 16.0% 8.4% 6.5%

Net debt/(cash) (m) 169 233 193




EV/Sales 1.1 1.1 1.2

EV/EBITDA 4.5 4.9 5.4

EV/EBITDA (adj.) 4.5 4.9 5.4

EV/EBIT 7.0 9.4 11.0

P/E (adj.) 10.3 15.0 19.4

P/BV 1.3 1.0 0.9

OpFCF yield 12.1% 1.7% 2.8%


EPS (adj.) 3.65 1.96 1.52

BVPS 29.57 30.57 31.65

DPS 1.60 1.02 0.80

Trading update in line; Offshore Energy looks good

The facts: Boskalis reported a trading update that was in line with expectations.

Our analysis: Boskalis reported a mostly qualitative trading update. As was to be

expected, Boskalis reiterated its outlook of a level of operating net profit in 2H16

to approach the level achieved in the first half of the year. The order book

increased to EUR 2.9bn from EUR 2.7bn at 1H16, driven by the consolidation of

the now fully incorporated Volker Wessels offshore activities. Capex guidance is

decreased to a range of EUR 180-200m from approximately EUR 200m with the

1H16 results.

If we look at the phrasing of the comments of the divisions, Dredging & Inland

Infra had a quiet third quarter in line with 1H16. Project margins were good and

project results from earlier finalizations were fine but with utilization at Hoppers in

line with the exceptionally low level in 1H16 (25 weeks), results were probably

less than we had pencilled in. Hopper utilization usually is a good indicator of

EBITDA development.

So the phrasing in Dredging was somewhat less than we had expected. This is

more than compensated by a better phrasing at Offshore Energy which had a

good Q3, supported by the contribution from the offshore activities acquired from

VolkerWessels. Revenue and results at the segment rose compared to the

previous quarters, which is more than we had hoped for and excluding the

VolkerWessels activities, revenue and the result were slightly lower compared to

1H which we see as a strong development. The spot and services market is

getting more difficult, but new opportunities are rising in offshore wind and we

expect that the long large contracts Dockwise had, also generated a strong

contribution.

Towage & Salvage was in line, although Lamnalco and Keppel Smit were lower

than expected in terms of results. All in all, Boskalis reiterated its expectation that

2H16 operating net profit will be in line with 1H16. Boskalis does not exclude

impairments on the offshore activities (Dockwise) with the FY results, but potential

impairments will not affect dividend.

Capital expenditure is expected to be EUR 180-200m from approximately EUR

200 million expressed earlier.

Conclusion & Action: Boskalis’ trading update was in line with expectations. On

balance we will increase our FY16 estimates lightly, as the Offshore Energy

activities are performing much better than we expected and Dredging somewhat

less. Potential impairments on the Offshore activities could scare the market

somewhat, but as there will be no effect on the dividend and the balance sheet is

very strong, it has no impact on our investment case. We have a Neutral rating

and PT of EUR 33.

28

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32

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36

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vvdsvdvsdy

BOSKALIS WESTMINSTER Stoxx Construction & Materials (Rebased)Source: Factset Shareholders: HAL 32%; Marathon Asset management

4%; Spucegrove 5%; Oppenheim 4%;

Sarasin 3%; Blackrock 5%; Analyst(s):

Edwin de Jong, NIBC Markets N.V.

[email protected]

+312 0 5508569

of 64


Buzzi Unicem



Buzzi Unicem (Accumulate) Trading update in line; Offshore Energy looks good

Good results as expected

The facts: Buzzi Unicem published its third quarter results yesterday before

market closing.

Our analysis: the company’s results were good and almost in line with our

estimates at the EBITDA level. On the contrary financial costs were much higher

than expected in Q3 at EUR 41.3m vs. EUR 22.0m in Q2. T

Q3 15 Q3 16 % Y/Y Q3 16e 9M 15 9M 16 % Y/Y

Revenues 764.1 748.0 -2.1% 764.0 2,031.1 2,038.1 0.3%

o/w west-Eur 296.6 294.3 -0.8% 300.5 838.3 841.0 0.3%

o/w US 329.5 301.5 -8.5% 311.8 823.5 831.7 1.0%

o/w east-Eur 144.7 151.1 4.4% 147.7 365.6 354.0 -3.2%

EBITDA 185.5 193.6 4.4% 198.8 352.1 416.2 18.2%

margin 24.3% 25.9%

26.0% 17.3% 20.4%

EBIT 136.8 143.3 4.8% 150.6 206.9 272.4 31.7%

margin 17.9% 19.2%

19.7% 10.2% 13.4%

PBT 124.8 126.1 1.0% 153.1 178.9 255.3 42.7%

Taxes -40.9 -37.2

-51.3 -58.6 -74.9

Net profit 83.9 88.9 5.9% 101.8 120.3 180.4 50.0%

o/w minorities -1.1 -1.4

-0.7 -2.7 -2.6

The company confirmed its 2016 target of a recurring EBITDA of around EUR

520m.

Conclusion & Action: the results were sound. We confirm our recommendation

and target on the stock.

Analyst(s):


[email protected]

+39 02 4344 4240

Accumulate

19.72


21.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg BZU.MI/BZU IM



Free float 42%









Sales (m) 2,718 2,725 2,844

EBITDA (m) 473 528 581

EBITDA margin 17.4% 19.4% 20.4%

EBIT (m) 264 334 380

EBIT margin 9.7% 12.2% 13.4%


ROCE 3.7% 4.7% 5.3%

Net debt/(cash) (m) 1,030 943 787




EV/Sales 1.5 1.7 1.6

EV/EBITDA 8.5 8.7 7.6

EV/EBITDA (adj.) 8.5 8.7 7.6

EV/EBIT 15.2 13.7 11.6

P/E (adj.) 27.3 22.3 18.4

P/BV 1.3 1.5 1.4

OpFCF yield 1.6% 2.5% 4.6%


EPS (adj.) 0.61 0.89 1.07

BVPS 12.39 13.23 14.22

DPS 0.08 0.15 0.18

11

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vvdsvdvsdy

BUZZI UNICEM FTSE MIB (Rebased)Source: Factset

Shareholders: Buzzi family 58%;

of 64


Maire Tecnimont



Maire Tecnimont (Accumulate) Good results as expected

USD 328m new award in Malaysia

The facts: Maire Tecnimont said yesterday that it had been awarded a USD

328m new contract in Malaysia

Our analysis: Maire Tecnimont in joint venture with China HuanQiu Contracting &

Engineering Corporation Ltd. (HQC) – 65% Tecnimont / 35% HQC – has been

awarded by PRPC Polymers Sdn Bhd (PRPC Polymers) a package of

PETRONAS’ Integrated Complex (PIC) relating to the realization of a High

Density Polyethylene Unit on an EPCC (engineering, procurement, construction

and commissioning) Lump Sum Turn-Key basis, for an amount of approximately

USD 328m.

This award follows up the USD 482m contract granted to the same joint venture

by PETRONAS in November 2015. The unit will be located inside the PIC, in

Pengerang, in the southeastern region of Johor, Malaysia, where the joint venture

is currently carrying out the activities related to the first project. PRPC Polymers is

a wholly owned subsidiary of PETRONAS Chemicals Group Berhad which in turn

is a subsidiary of Petroliam Nasional Berhad (“PETRONAS”), Malaysia’s fully

integrated oil and gas multinational, one of the largest players in the sector

globally. Beijing-based HQC, affiliated with China National Petroleum Corporation

(CNPC), is a leading engineering company in the Oil & Gas industry in China and

a reputable EPC contractor in the region.

The project’s Scope of Work envisages the provision of complete engineering

services, equipment and material supply, erection and construction activities up to

start up and guarantee test run. Completion is expected in early of third quarter

2019. The High Density Polyethylene Unit will be based on LyondelBasell’s

Hostalen Advance Cascade Process (HACP) technology and will have a capacity

of 400,000 t/y (tons per year).

Conclusion & Action: the contract is sizeable and this is clearly good news.

Analyst(s):


[email protected]

+39 02 4344 4240

Accumulate

2.37


3.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg MTCM.MI/MT IM



Free float 35%









Sales (m) 1,670 2,280 2,432

EBITDA (m) 131 150 175


EBIT (m) 115 143 167

EBIT margin 6.9% 6.3% 6.9%


ROCE 35.0% 47.7% 62.5%

Net debt/(cash) (m) 126 53 (39)

Net Debt/Equity 1.0 0.3 -0.1

Debt/EBITDA 1.0 0.4 -0.2


EV/Sales 0.5 0.3 0.3

EV/EBITDA 6.8 5.2 4.0

EV/EBITDA (adj.) 6.8 5.2 4.0

EV/EBIT 7.7 5.5 4.2

P/E (adj.) 17.6 10.9 8.0

P/BV 6.2 3.8 2.7

OpFCF yield 38.7% 11.6% 14.4%


EPS (adj.) 0.14 0.22 0.30

BVPS 0.41 0.62 0.87

DPS 0.05 0.05 0.05

1.6

1.8

2.0

2.2

2.4

2.6

2.8


vvdsvdvsdy

MAIRE TECNIMONT FTSE Italy All Share (Rebased)Source: Factset

Shareholders: GLV capital 55%; Ardeco 10%;

of 64


Sacyr

Spain/Materials, Construction & Infrastructure Analyser


Sacyr (Buy) USD 328m new award in Malaysia

Good growths in 9m’16

The facts: Growth at operating level (EBITDA +6.1%) and recurrent net profit

(+25%, EUR89m vs. EUR71m), where concessions standout – company driver –

as well as industrial services.

Our analysis : From these results we highlight :

1) Repsol: Debt EUR1,305m (EUR10.7/share). The EUR213m from the derivate

subscribed in October is not included yet. With the latter part of the risk is

eliminated (16%) from the stake (8.4%) below EUR10.7/share and if the share

rises, the rise is guaranteed up to a certain level. The book value is

EUR15.6/share.

2) Net debt : Increases (EUR54m vs. 2015) to EUR4,234m. The lower debt in

Repsol (EUR308m) is offset by the higher debt in activities. Corporate debt

increases slightly (EUR549m vs. EUR525m). Cash increases to EUR516m

following the amortisation of ERU200m in bonds.

3) Results : Traffic grows well in Spain (+5%), EBITDA in concessions +10.4%,

with margins improving ; construction continues weak (-28% EBITDA) and

continues with the restructuring process. Industrials grows substantially (+82%

EBITDA) due to organic growth and acquisitions. Services increases slightly,

dragged by international development costs.

4) Concessions : Equity commitments have been covered in concessions for

2016. In 2017 EUR80-90m equity will be invested.

Conclusion: Good results. The focus is on how pending investments in

concessions will be financed. Positive outlook maintained.

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Buy

2.02


2.02



Target price: EUR

Share price: EUR

Reuters/Bloomberg SCYR.MC/SCYR SM



Free float 74%









Sales (m) 2,949 2,973 3,129

EBITDA (m) 318 344 389

EBITDA margin 10.8% 11.6% 12.4%

EBIT (m) 148 230 261

EBIT margin 5.0% 7.7% 8.3%

Net Profit (adj.)(m) (227) 118 146

ROCE 5.5% 11.1% 11.1%

Net debt/(cash) (m) 4,180 4,019 4,048


Debt/EBITDA 13.1 11.7 10.4


EV/Sales 1.3 1.3 1.3

EV/EBITDA 12.3 11.2 10.0

EV/EBITDA (adj.) 12.3 11.3 10.1

EV/EBIT 26.4 16.8 15.0

P/E (adj.) nm 8.8 7.1

P/BV 0.6 0.6 0.6

OpFCF yield 3.1% 7.4% 14.2%


EPS (adj.) (0.44) 0.23 0.28

BVPS 3.20 3.38 3.61

DPS 0.05 0.05 0.05

9M15 9M16 %

Construction 1,175.0 996.7 -15.2%

Concessions 409.7 401.2 -2.1%

Services 756.6 943.7 24.7%

Holding/adjustments -218.1 -180.4 -17.3%

SALES 2,123.2 2,161.2 1.8%

9M15 9M16 %

Construction 53.1 38.3 -28.0%

Concessions 143.4 158.3 10.4%

Services 62.6 74.9 19.5%

Holding/adjustments -12.6 -9.8 -22.4%

EBITDA 246.5 261.6 6.1%

EBITDA 9M15 9M16 %

Amortisations/Prov -112.4 -102.3 -8.9%

Operating result 134.2 159.3 18.7%

Financial result -186.4 -154.6 -17.1%

Other -127.3 -3.5 -97.2%

Associates -294.5 115.1 -139.1%

Ordinary Result -473.9 116.3 -124.5%

Other 1,006.2 -27.0 -102.7%

Net Income 532.3 89.4 -83.2%

1.2

1.4

1.6

1.8

2.0

2.2

2.4

2.6


vvdsvdvsdy

SACYR Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Grupo Carceller 13%; Jose Manuel

Loureda 8%; Manuel Manrique 5%;

of 64


Salini Impregilo



Salini Impregilo (Accumulate) Good growths in 9m’16

2016 targets confirmed

The facts: the company said yesterday that 2016 targets were confirmed.

Our analysis: the company said that new orders in the first nine months were

EUR 6.9bn, EUR 1.3bn for Lane,

The company also said that 2016 targets were confirmed: revenues of around

EUR 6.1bn with an EBITDA margin higher than 9% and a net debt in line with

2015 excluding the cash-out related to the acquisition of Lane.

Conclusion & Action: the perspectives of the US market are promising.

recommendation and target confirmed.

Analyst(s):


[email protected]

+39 02 4344 4240

Accumulate

2.67


3.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg SALI.MI/SAL IM



Free float 33%









Sales (m) 4,739 6,103 6,561

EBITDA (m) 487 549 600


EBIT (m) 273 283 321

EBIT margin 5.8% 4.6% 4.9%


ROCE 13.7% 10.3% 11.4%





EV/Sales 0.4 0.3 0.2

EV/EBITDA 3.7 2.8 2.5

EV/EBITDA (adj.) 3.7 2.8 2.5

EV/EBIT 6.7 5.5 4.6

P/E (adj.) 23.3 13.9 10.4

P/BV 1.6 1.0 1.0

OpFCF yield 4.0% -28.4% 6.9%


EPS (adj.) 0.17 0.19 0.26

BVPS 2.47 2.57 2.80

DPS 0.04 0.04 0.04

2.4

2.6

2.8

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3.8

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4.4


vvdsvdvsdy

SALINI IMPREGILO FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Salini costruttori 67%;

of 64


Hellenic Petroleum

Greece/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

Hellenic Petroleum (Buy) 2016 targets confirmed

3Q16 financial results – Solid performance exceeding estimates

The facts: ELPE reported yesterday a strong set of 3Q16 of financials results,

exceeding estimates: Specifically, “clean” group EBITDA stood at EUR 191m (vs.

consensus of EUR 179m and our estimate of EUR 193m) compared to EUR

240m in 3Q15, while “clean” net income settled at EUR 75m (vs. consensus of

EUR 59m and our estimate of EUR 71m) compared to “clean” net income of EUR

111m in 3Q15. Recording inventory gains of EUR 11m vs. inventory losses of

EUR 125m in 3Q15, ELPE reported IFRS EBITDA of EUR 199m (+73% YoY) and

IFRS net income of EUR 80m (+111% YoY).

Our Analysis: Below is an analysis per division:

Refining and trading division: Amid a softer refining environment, ELPE’s refining

margin stood at USD 8.3/bbl from USD 8.6/bbl in 2Q16 and USD 12.3/bbl in

3Q15. Sales volume rose by 20% YoY to 4.3m tons driven by record utilization

rate. Exports accounted for c.60% of total refining sales. Overall “clean” EBITDA

shaped at EUR 121m from EUR 105m in 2Q16 and EUR 163m in 3Q15.

Marketing: Fuel demand in 3Q16 was up 8% YoY (diesel +10%, gasoline +3%) on

favourable comparison due to the impact of capital controls imposed at the end of

June 2015. Although ELPE sales volume was up 1% YoY, EBITDA was down 5%

YoY to EUR 26m due to adverse aviation fuel pricing. International EBITDA fell by

12% YoY to EUR 18m due to increased competition in Bulgaria that affected

margins.

Petrochemicals: Solid performance continued in 3Q16 as the impact of somewhat

weaker PP margins was offset by higher sales volume. Specifically, EBITDA was

down 4% YoY to EUR 25m.

Power & gas (equity consolidation): Elpedison EBITDA stood at EUR 16m from

zero in 3Q15 on significant increase of power plant utilization and capacity

payments. Strong demand for natural gas from power plants also boosted

DEPA’s EBITDA by 50% YoY to EUR 48m.

Net debt & FCF: Group net debt stood at EUR 1.78bn (within the target of EUR

1.5-2.0bn) compared to EUR 1.7bn at the end of 2Q16 and EUR 2.4bn at the end

of 3Q15. In 9M16 ELPE generated negative FCF of EUR 515m (c.EUR -45m in

3Q16) on working capital normalization and capex of EUR 82m.

ELPE 9M16 results

EUR m 9M15 IBGe 9M16 % YoY

EBITDA 413 527 533 29.1%

EBITDA adj. * 575 504 517 -10.1%

Net Profit 105 175 184 75.2%

Net Profit (adj) * 203 179 183 -9.9%

EPS (adj)* 0.66 0.58 0.60 -9.9%

Source: The Company, IBG, *excluding inventory and one-offs

Conclusion & Action: Overall, it was a very good quarter amid a modest refining

environment supported by operational efficiencies (high utilization rate and crude

slate optimization), with FCF showing that it is close to turn positive as working

capital is gradually coming to desired levels. Going forward, the recovery of

refining margins in 4Q16 suggests that our annual estimates are achievable,

allowing management to resume dividend distribution next year. We reiterate our

Buy recommendation.

Analyst(s):

Vassilis Roumantzis, Investment Bank of Greece

[email protected]

+30 2108173394

Buy

4.15


5.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg HEPr.AT/ELPE GA



Free float 26%









Sales (m) 7,303 6,085 7,354

EBITDA (m) 444 679 602


EBIT (m) 245 483 408

EBIT margin 3.4% 7.9% 5.5%


ROCE 18.6% 10.7% 9.3%

Net debt/(cash) (m) 1,123 1,441 1,269




EV/Sales 0.2 0.3 0.2

EV/EBITDA 3.8 3.0 3.0

EV/EBITDA (adj.) 2.2 3.1 3.2

EV/EBIT 6.8 4.2 4.5

P/E (adj.) 4.6 5.9 7.1

P/BV 0.7 0.7 0.6

OpFCF yield 3.7% -23.5% 17.8%


EPS (adj.) 0.87 0.71 0.58

BVPS 5.51 6.26 6.81

DPS 0.00 0.10 0.20

2.5

3.0

3.5

4.0

4.5

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vvdsvdvsdy

HELLENIC PETROLEUM Stoxx Oil & Gas (Rebased)Source: Factset

Shareholders: Hellenic state 36%; Latsis group 46%;

of 64


QGEP

Brazil/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

QGEP (Buy) 3Q16 financial results – Solid performance exceeding estimates

3Q16 results: lower production from Manati

The facts: QGEP release its 3Q16 results on Wednesday after the close of the

Brazilian market. The company recorded revenues of BRL 108.4m, EBITDA of

BRL 46m and net income of BRL 63m.

Our analysis: There are three main differences between the reported figures and

our own estimates. The first lays on the volumes produced in Manati, which came

below our 4.8 MMcm/d forecast reaching 4.4 MMcm/d. The second major

difference is at exploratory costs that at BRL 6m were below our BRL 22.9m

estimate. Finally, financial results reached a positive BRL 37.1m against the BRL

9.7m loss forecast. In this last case, the reason behind our loss assumption was

the depreciation of the US dollar against the Brazilian real, which would hurt

income from USD denominated financial assets (as happen in the previous

quarter). Management maintains its 2016 production target for Manati at 5.1

MMcm/d and estimates an average production of 4.9 MMcm/d in 2017. The

decline in production below Manati’s 6.0 MMcm/d capacity continues to relate with

challenging economic conditions in Brazil that impact gas demand. The

deployment of FPSO Petrojarl I in Atlanta (the first liquids project of the company,

in block BS-4) was delayed until the third quarter of 2017 from 1Q17, with

management citing “challenges” in the adaptation of the unit.

Conclusion & Action. Results came higher than expected in terms of EBITDA

but mainly in what concerns net income. This is a direct effect of more favourable

net financials, as we were anticipating a worse impact from the quarter’s

depreciation of the US dollar against the Brazilian real. The company continues to

expect an average production from Manati of 5.1 MMcm/d in 2016 and now

anticipates 4.9 Mmcm/d in 2017. This decrease is a result of a worst performance

of the Brazilian economy and the demand for gas. The deployment of FPSO

Petrojarl I was delayed until 3Q17 from the first quarter previously expected. We

continue to see QGEP as an interesting story in the Brazilian oil and gas industry,

with an operating hedge against potential further declines of the price of oil due to

the gas pricing mechanism of Manati. In addition, the company has a portfolio of

very interesting assets, namely in the pre-salt (Carcará) and the upcoming project

of Atlanta (despite the now announced delay).

Analyst(s):

Carlos Jesus, Caixa-Banco de Investimento

[email protected]

+351 21 389 6812

Buy

4.98


16.60



Target price: BRL

Share price: BRL

Reuters/Bloomberg QGEP3.SA/QGEP3 BZ

Market capitalisation (BRLm) 1,324


Free float 27%



Price high 12 mth (BRL) 6.59

Price low 12 mth (BRL) 3.62




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

Sales (m) 496 572 996

EBITDA (m) (93) 212 333


EBIT (m) (197) 116 142



ROCE -7.9% 3.4% 4.0%

Net debt/(cash) (m) (753) (258) (272)


Debt/EBITDA 8.1 -1.2 -0.8

Int. cover(EBITDA/Fin. int) 0.3 (2.0) (5.2)

EV/Sales 0.6 1.0 0.6

EV/EBITDA nm 2.8 1.7

EV/EBITDA (adj.) nm 2.8 1.7

EV/EBIT nm 5.0 4.0

P/E (adj.) 16.6 9.1 9.7

P/BV 0.6 0.5 0.5

OpFCF yield -7.5% -34.3% 4.0%


EPS (adj.) 0.35 0.55 0.51

BVPS 10.12 10.51 10.87

DPS 0.15 0.15 0.15

3

4

5

6

7

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vvdsvdvsdy

QGEP IBOV (Rebased)Source: Factset

Shareholders: Queiroz Galvão SA 63%; FIP Quantum

7%; Other 3%;

BRLm 3Q15 2Q16 3Q16 9M2015 9M2016 3Q16e

Net revenues 112.1 120.4 108.4 362.7 372.6 117.8

Operating costs -57.3 -67.7 -57.4 -182.7 -185.6 -62.3

Gross profit 66.9 52.7 51.0 179.9 187.0 55.5

General expenditures -9.7 -10.5 -13.5 -36.4 -34.6 -10.3

Exploratory costs -7.7 -36.5 -6.0 -33.9 -51.4 -22.9

Other operating expenses -0.4 -2.8 0.1 -0.8 -2.3 0.0

EBIT 37.0 2.9 31.6 108.9 98.7 22.3

Net financials 133.4 -11.5 37.1 242.5 13.0 -9.7

EBT 170.5 -8.6 68.7 351.4 111.7 12.6

Taxes -51.6 0.8 -5.9 -98.4 -10.3 -4.3

Net income 118.9 -7.8 63.0 253.0 101.6 8.3

EBITDA 55.4 19.4 46.0 184.0 150.9 40.2

Dry and subcommercial wells 0.1 0.0 -0.2 9.8 0.2 0.0

EBITDAX 55.3 19.4 46.2 174.2 150.7 40.2

Manati gross gas production (MMcm/d) 5.0 5.0 4.4 5.5 5.1 4.8

of 64


Tecnicas Reunidas

Spain/Oil Services Analyser

OIL SERVICES

Tecnicas Reunidas (Accumulate) 3Q16 results: lower production from Manati

3Q’16 results in line with forecasts.

The facts : Tecnicas Reunidas presented 3Q’16 results

Our analysis : Results in line with forecasts :

Although sales in 9m’16 (+14.4%) decelerated vs. 1H’16 (+22%) it is within

forecasts. We estimate sales closing 2016 with +9.7% growths, at the top of the

guidance given. The EBIT margin in 3Q’16 reached 4.1%, slightly above the 4%

in 2Q and is performing as anticipated by the Company.

Orders in 3Q’16 reached EUR517m, thanks to the MGT Teesside biomass plant

in UK, in a JV with Samsung (EUR700m, 70% TRE). The deceleration in orders in

2016, with EUR1,532m new orders, took the pipeline at 3Q’16 to EUR10,090m,

far from highs seen at 2015 yearend with EUR12,136m (-17%). It seems that

Tecnicas Reunidas could be awarded the project to update the Ras Tanura

refinery (Saudi Arabia) for USD1.5-2.0bn in 2016 that would let the company

reach total new orders close to our estimated EUR3.3bn. Tecnicas Reunidas is

making offers and receiving invitations to attend tenders in the Middle East, Asia,

North America and LatAm. The Company is also focused on high added value

engineering projects such as Front End Engineering and Design (FEED). During

the conference call, TRE mentioned that order intakes in 2017 will be higher than

in 2016.We estimate EUR3.8bn in 2017.

In the breakdown of backlog, the following stand out: Middle East with 61%,

LatAm 18%, Europe 12% and RoW 9%. IN sales, Oil & Gas projects represented

88.5% of the total, with 14.7% growths vs. 9m’15, highlighting the contribution

from Refining & Petrochemicals and processing of natural gas. Revenues from

Generation & Energy grew 13.3% vs. 9m’15, representing 8.5% of the total.

Infrastructure & Industrial sales increased 7.4% vs. 9m’15 and its total weight

comes to 3%.

Although the investment in working capital for 9m’16 reaches EUR133m, and

EUR75m has been paid in dividends, net cash only dropped EUR44m to

EUR488m since 2015 year-end, which is similar to our estimated EUR501m.

Conclusion: Results in line with forecasts. Net cash, although dropped a little,

remains at a good level. The focus is also on order intakes. We maintain our

estimates and valuation.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Accumulate

33.75


36.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TRE.MC/TRE SM



Free float 52%









Sales (m) 4,188 4,593 4,740

EBITDA (m) 105 204 211


EBIT (m) 86 184 190

EBIT margin 2.1% 4.0% 4.0%


ROCE -23.8% -72.1% -218.5%

Net debt/(cash) (m) (533) (501) (427)


Debt/EBITDA -5.1 -2.5 -2.0


EV/Sales 0.3 0.3 0.3

EV/EBITDA 13.4 6.8 6.9

EV/EBITDA (adj.) 13.4 6.8 6.9

EV/EBIT 16.4 7.5 7.6

P/E (adj.) 32.8 14.4 13.6

P/BV 4.9 4.2 3.7

OpFCF yield 6.8% 2.5% 0.2%


EPS (adj.) 1.06 2.34 2.47

BVPS 7.04 7.99 9.07

DPS 1.40 1.40 1.40

TECNICAS REUNIDAS : 9M16 RESULTS

9M15 %sles 9M16 %sles %y/y 2Q16 3Q15 3Q16

Sales 3,006.0 100% 3,437.9 100% 14.4% 1,252.6 1,122.4 1,134.0

EBITDA 159.2 5.3% 154.1 4.5% -3.2% 55.4 56.6 51.6

Depreciation -11.6 -0.4% -15.2 -0.4% 31.0% -5.2 -4.0 -5.0

EBIT 147.6 4.9% 138.9 4.0% -5.9% 50.3 52.6 46.5

Financial results 4.2 0.1% -1.1 0.0% -1.4 1.0 3.2

EBT 151.8 5.0% 137.8 4.0% -9.2% 48.8 51.4 48.2

Income tax -36.6 -1.2% -36.5 -1.1% -0.3% -13.2 -11.3 -12.7

Net profit 115.2 3.8% 101.3 2.9% -12.1% 35.7 40.1 35.4

Source: GVC Gaesco Beka estimates

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vvdsvdvsdy

TECNICAS REUNIDAS IBEX 35 (Rebased)Source: Factset

Shareholders: Lladó Family 37%; Causeway 5%;

of 64


Merlin Properties

Spain/Real Estate Analyser

REAL ESTATE

Merlin Properties (Buy) 3Q’16 results in line with forecasts.

A sure bet

The facts : We initiate coverage on Merlin Properties with a Buy recommendation

and fair value of EUR12.51/share.

Our analysis: Merlin is the largest listed REIT (Real Estate Investment Trust) in

Spain and forms part of the Ibex 35 since December 2015. Merlin focuses on

the acquisition and active management of real estate assets in Spain and to

a lesser extent in Lisbon. The majority of the activities are offices mainly in Madrid

and Barcelona in both the CBD, the BD and new business areas (NBA).

Regarding shopping centres, the Company prefers dominating assets in city

centres, although it is also present on the outskirts with unique assets such as the

shopping centre Marineda. Regarding commercial premises, the majority comes

from an excellent contract signed with BBVA.

On the acquisition of Metrovacesa, firstly we highlight the price at which

Merlin’s shares were issued, EUR11.40/share, which implies a 7.5%

premium vs. the latest available NAV (1H’16). This acquisition increases

exposure to shopping centres, increases the office GAV in CBD/BD and

relative weight of new business areas in Madrid and Barcelona. In addition

visibility is increased on assets subject to be sold such as the residential and

hotel rental activity.

Metrovacesa is an excellent opportunity for Merlin’s team to demonstrate

its capacity in management. Occupancy is low compared with Merlin, as is

the gross margin (NRI or Net Rental Income). Active management seeking to

reposition certain assets with a short term contract context (WAULT 2.4 years)

should translate into positive surprises in the future NAV performance.

Merlin will access Metrovacesa’s tax shields which would accelerate

asset sales without a fiscal impact. This implies the possibility of surprising

the market with divestments above the GAV as carried out – in a small scale –

with some of Tree’s (BBVA) premises.

Once Metrovacesa is incorporated, we expect a robust performance of

EPS (+10% average 2016-18e) and FFO (+7%), that should overflow to the

dividend, increasing from EUR0.19/share in 2015 up to EUR0.48 2018e.

We also expect a good performance of NAV in coming years (+10.6%

2016-18e) assuming an average 0.6% drop in yield until 2018 and increasing

NRI (assuming 100% occupancy) of 3.2%. We reach a NAV 2017e of

EUR12.51/share which we use as our target price. With the above, we

expect an average return for shareholders (dividends + NAV growth) of 14%

during the period 2016-18.

Conclusion: Merlin offers the opportunity to benefit from a quality asset portfolio,

which trades at a discount over NAV, focused mainly on offices, retail and

logistics. The portfolio should be at full-steam in coming years (EPS +10% 2016-

18; FFO +7%), and that Merlin’s shareholders will benefit from with an average

14% shareholder return (dividends + NAV growth).

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Buy

9.23


12.51

from

Target price: EUR

Share price: EUR

Reuters/Bloomberg MRL.MC/MRL SM



Free float 66%









Gross Rental Income (m) 214 352 495

EBITDA (m) 161 281 389

EBITDA margin 73.6% 77.1% 76.8%

Portfolio Result (m) 251 561 687

Net Financial Result (355) (121) (124)


Funds From Operations 109 187 260

EPS (adj.) 0.44 0.43 0.53

DPS 0.19 0.37 0.44

IFRS NAVPS 9.06 11.07 12.69

EPRA NAVPS 9.84 11.01 12.51

Premium/(Discount) 27.4% (16.6%) (27.2%)

DPS 0.19 0.37 0.44

Earnings adj. yield 4.8% 4.6% 5.8%


EV/EBITDA 39.9 31.6 23.1

P/E (adj.) 26.3 21.6 17.3

Int. cover(EBITDA/Fin.int) 3.0 3.0 3.0

Net debt/(cash) (m) 2,696 4,804 4,934

Net Debt/Total Assets 39.0% 43.1% 41.0%

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5


vvdsvdvsdy

MERLIN PROPERTIES IBEX 35 (Rebased)Source: Factset

Shareholders: Santander 22%; BBVA 6%; Blackrock

3%; Popular 3%;

of 64


WCM AG

Germany/Real Estate Analyser

REAL ESTATE

WCM AG (Accumulate) A sure bet Accumulate

2.56


3.25



Target price: EUR

Share price: EUR

Reuters/Bloomberg WCMKK.DE/WCMK GR



Free float 61%









Gross Rental Income (m) 10 32 35

EBITDA (m) 4 27 32

EBITDA margin 29.5% 78.0% 86.3%

Portfolio Result (m) 55 20 23

Net Financial Result (2) (4) (4)


Funds From Operations 8 22 24

EPS (adj.) 0.72 0.24 0.26

DPS 0.00 0.09 0.09

IFRS NAVPS 2.23 2.41 2.58

EPRA NAVPS 2.38 2.50 2.67

Premium/(Discount) 19.1% 5.9% (1.1%)

DPS 0.00 0.09 0.09

Earnings adj. yield 28.1% 9.4% 10.3%


EV/EBITDA 146.8 22.8 19.5

P/E (adj.) 3.7 10.6 9.7

Int. cover(EBITDA/Fin.int) 1.9 6.8 7.3

Net debt/(cash) (m) 253 265 270

Net Debt/Total Assets 45.9% 40.7% 39.9%

WCM acquires further retail portfolio for EUR 98.2m

The facts: Today, WCM Beteiligungs- und Grundbesitz-AG announced the

acquisition of a further retail portfolio in the federal states of Baden-Wuertemberg

and Saxony-Anhalt. Closing of the transaction is expected within the first quarter

2017. Three retail centres were purchased for EUR 98.2m with a leading food

retail chain as the anchor tenant. The acquired portfolio has a total rental space of

88,000 sqm and an EPRA vacancy of 7%.

Our analysis: Annualized rental income of the acquired portfolio is approximately

EUR 7.6m. The gross rental yield is calculated at 7.7% and the Funds from

Operations (FFO) amounts to around EUR 4.2m. The weighted average lease

term (WALT) stands at 6.1 years for the anchor tenants and for the acquired

portfolio at 5.6 years.

The purchase price is planned to be financed with existing cash and a bank loan.

With this transaction WCM increases its portfolio value from EUR 645m (as of

June 2016) to EUR 766m. Annualized rental income is calculated at EUR 46m

and the annualized FFO I at EUR 25.5m (H1 June 2016: EUR 8.3m). The WALT

of WCM’s portfolio amounts to 8.5 years (vs. 9.4 years as of June 2016) with an

EPRA vacancy rate of 4.7% (vs.4.1% as of June 2016).

WCM forecast NAV per share to increase at least EUR 2.85 (vs. EUR 2.54 as of

June 2016) and the average cost of debt are expected to below 2%, including the

announced acquisition in September as well as the announced acquisition today.

Conclusion & Action: With the announced acquisition WCM is well on track in

terms of its growth strategy. We see the transaction positively because it will

result in a higher EPRA NAV and FFO. We maintain our price target of EUR 3.25

per share and reiterate our Accumulate recommendation.

2.0

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vvdsvdvsdy

WCM AG SDAX (Rebased)Source: Factset Shareholders: DIC Asset AG 25%; Karl Ehlerding 5%;

John Ehlerding 5%; Christoph Kroschke

4%; Stavros Efremidis 1.90%; Frank

Roseen 0.40%;

Analyst(s):

Philipp Häßler, CFA, equinet Bank

[email protected]

+49 69 58997 414

of 64


Reply

Italy/Software & Computer Services Analyser

SOFTWARE & COMPUTER SERVICES

Reply (Neutral) WCM acquires further retail portfolio for EUR 98.2m

9m 2016 Post: slowing growth

The facts: publication of Q3 2016 results

Our analysis: the headline P&L figures were in line/slightly below our estimates,

while the net financial position was definitely better. Reported growth slowed to

below single-digit in Q3, for the first time in a few years, while we estimate that

organic growth was just above of 3%. The geographic breakdown was

surprising, as Italy posted a 20% growth and the UK accelerated in spite of a

large currency drop. We note on the other hand the large intra-group adjustment

(EUR 22.7m or 11% of the total) which definitely makes the Y/Y comparison

opaque. In addition, both Italy and the UK benefitted in the quarter from a larger

consolidation perimeter (the latter increased the employee base by 11% in 3

months).

The EBITDA was a couple of millions EUROs below our forecasts, the negative

gap materialized in Germany and the UK.

Contrarily to Q2, this time the cash generation in the quarter was a positive

surprise, with EUR 19m improvement vs. the end of June (EUR -49m in Q2). Q2

outcome was explained by EUR 23m spent in M&A and financial investments, the

cash bridge is not available this time.

Reply 9m 2016 results (EUR m)

Q3

15a

Q3

2016e

Q3

2016a Y/Y

9m

2015a

9m

2016 Y/Y

Revenues 171 186 185 8.0% 517 571 10.6%

Italy 123 135 149 21.5% 379 431 13.9%

Germany* 30.1 31.6 32.1 6.7% 85.2 98.0 15.0%

UK 23.0 21.7 25.6 11.5% 66.1 70.2 6.2%

Other/adj -4.6 -3.2 -22.0 377.9% -13.4 -28.1 109.7%

EBITDA 23.0 25.9 23.9 3.6% 70.3 75.2 7.0%

mg 13.5% 14.0% 12.9% -0.5% 13.6% 13.2% -0.4%

Italy EBITDA 16.8 19.6 20.1 19.6% 57.7 64.6 12.0%

Germany EBITDA 4.0 4.1 2.4 -40.0% 8.1 8.6 6.2%

UK EBITDA 2.5 2.3 1.4 -43.6% 5.9 2.4 -59.3%

Other EBITDA na -0.2 0.00 nm na 0.0 nm

EBIT 20.5 23.3 20.8 1.3% 63.4 68.8 8.5%

EBT 19.2 23.3 21.9 13.7% 63.1 68.9 9.2%

Net debt/(cash) -42.0 -28.3 -42.2 0.6% -42.0 -42.2 0.6%

Source: Company data, BANCA AKROS estimates

Outlook: We are not significantly changing our estimates following the 9month

release; the implied performance in Q4 is around 8% revenues growth, 17%

EBITDA margin, neutral cash generation (taking into account the outstanding

earn-out, which is worth 28m at the end of September).

Conclusion & Action: neutral to negative release given the very low organic

growth and slight miss in the EBITDA.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Neutral

114.70


124.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg REY.MI/REY IM



Free float 38%









Sales (m) 706 776 817

EBITDA (m) 99 107 117

EBITDA margin 14.0% 13.8% 14.3%

EBIT (m) 89 97 105

EBIT margin 12.7% 12.5% 12.9%


ROCE 16.3% 25.5% 26.6%

Net debt/(cash) (m) (28) (55) (104)


Debt/EBITDA -0.3 -0.5 -0.9


EV/Sales 1.7 1.3 1.2

EV/EBITDA 12.0 9.5 8.3

EV/EBITDA (adj.) 12.0 9.5 8.3

EV/EBIT 13.2 10.5 9.3

P/E (adj.) 20.8 17.4 16.1

P/BV 4.0 3.1 2.6

OpFCF yield 1.7% 2.6% 5.0%


EPS (adj.) 6.07 6.61 7.14

BVPS 31.66 37.27 43.40

DPS 0.85 1.00 1.00

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vvdsvdvsdy

REPLYSource: Factset

Shareholders: Rizzante Mario 53%; Shareholder value

mgmt AG 4%; Lodigiani Riccardo 1.90%;

JP Morgan 2.00%; Toqueville 1.20%;

of 64


ENAV

Italy/Support Services Analyser

SUPPORT SERVICES

ENAV (Accumulate) 9m 2016 Post: slowing growth

Good Q3 results confirming business resiliency

The facts: Yesterday ENAV released its Q3 & 9M 2016 results and held a CC in

the afternoon.

Our analysis: ENAV released Q3 and 9M 2016 results bang in line with our

estimates coupled with a slight improvement in profitability as shown in the

following table. We remark that balance component was EUR -11.5m in Q3

(above our estimates of EUR -10m) whilst non-regulated revenues in the quarter

was EUR 2.4m (below our projections of EUR 3.3m). Net profit came in at EUR

70.4m in 9M, improving from EUR 63m last year, benefiting also from a strong

decline in write-downs (EUR 0.5m vs. EUR 4.8m) in the period.

Traffic data 9M 15A 9M 16A Y/Y 9M 16E

Total en-route traffic (k SUs) 6,365 6,493 2.2% 6,490

Total terminal traffic (k SUs) 679 704 3.7% 704

Total traffic 7,044 7,197 2.3% 7,194

Source: ENAV; Banca Akros estimates

P&L (Eur m) Q3

15A

Q3

16A Y/Y

Q3

16E

9M

15A

9M

16A Y/Y

9M

16E

En-route revenues 181.8 191.0 5.0% 190.5 441.9 456.5 3.3% 456.0

Terminal revenues 54.5 59.4 9.0% 54.3 138.4 151.0 9.1% 145.9

Characteristic revenues 236.3 250.3 6.0% 244.8 580.3 607.4 4.7% 601.9

Balance 2.0 -11.4 nm -10 11.1 10.1 -9.3% 11.5

Non regulated revenues 1.8 2.4 31.3% 3.3 6.3 9.0 41.6% 9.9

Other revenues 9.8 11.8 20.9% 17.3 44.2 35.6 19.5% 41.1

Total revenues 249.8 253.2 1.3% 255.4 642.0 662.1 3.1% 664.3

EBITDA 104.6 104.6 0.0% 102.9 195.3 208.0 6.5% 206.3


40.3% 30.4% 31.4%

31.1%

D&A -34.0 -31.8 -6.6% -31.6 -106.5 -100.6 -5.5% -100.4

EBIT 70.6 72.8 3.2% 71.3 88.8 107.5 21.0% 105.9

EBIT margin 28.3% 28.8% 27.9% 13.8% 16.2% 15.9%

Source: ENAV; Banca Akros estimates

Q3 confirmed ENAV’s strong cash flow generation in the period (EUR 173m gross

operating cash flow), together with low Capex (EUR 63m) led Net Debt to EUR

148m in Sep-16 (vs. EUR 236m in June).

The management guided for a further traffic growth in Q4 thus leading to a c. 2%

traffic increase in FY 16E coupled with profitability enhancement on the back of

cost control measures. We also highlight that: i) write downs should slightly

increase in Q4 but will close 2016 below 2015 level (EUR 1m vs. EUR 5m); ii)

Capex should increase Q4 thus being in line with our estimates of EUR 126m

total Capex in FY 16.

Conclusion & Action: Results in line with our expectations confirming the

business resiliency and a stable P&L dynamic. We reiterate our positive

recommendation on the stock, reminding the low exposure to Italy (c. 25% of

traffic) and the 5.3% recurring dividend yield, not mentioning a potential sound

extra dividend if ENAV would decide to re-leverage (Net Debt / EBITDA 2016E

0.8x). However, the stock would still under pressure if current concerns on

possible interest rate increase will go on, thus replying on equity the fixed income

price pressure (ENAV’s bond YTM run to 0.7% yield from 0.3% 1w ago).

Analyst(s):


[email protected]

+39 02 4344 4071

Francesco Sala Banca Akros

[email protected]

+39 02 4344 4240

Accumulate

3.16


4.15



Target price: EUR

Share price: EUR

Reuters/Bloomberg ENAV.MI/ENAV IM



Free float 47%







Abs. perf. 12 mth


Sales (m) 850 865 870

EBITDA (m) 243 259 264

EBITDA margin 28.6% 30.0% 30.3%

EBIT (m) 93 118 126

EBIT margin 11.0% 13.6% 14.5%


ROCE 4.9% 5.9% 6.6%

Net debt/(cash) (m) 188 201 191




EV/Sales 2.2 2.2

EV/EBITDA 7.4 7.2

EV/EBITDA (adj.) 7.4 7.2

EV/EBIT 16.3 15.1

P/E (adj.) 22.3 20.1

P/BV 1.5 1.5

OpFCF yield 2.3% 6.4%


EPS (adj.) 0.14 0.16

BVPS 2.07 2.05

DPS 0.00 0.18 0.18

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giu 16 lug 16 ago 16 set 16 ott 16 nov 16

vvdsvdvsdy

ENAV FTSE Italy All Share (Rebased)Source: Factset

Shareholders: Mef 53%;

of 64


Nokia

Finland/Technology Hardware & Equipment Analyser

TECHNOLOGY HARDWARE & EQUIPMENT

Nokia (Buy) Good Q3 results confirming business resiliency

Nokia’s CMD to be held in Barcelona on 15 November

The facts: Nokia will organise a Capital Markets Day in Barcelona. The event

starts at 9.00 am CET (10.00 am EET). The focus at the CMD will be on 1) the

progress of Nokia’s cost savings measures and cost savings targets, and 2) the

market outlook for 2017.

Our analysis: After the Q3 results, Nokia’s share price weighed on the

company’s cautious comments about growth in Q4 and a preliminary estimate

about the outlook for 2017. Nokia estimated that the decline in the Networks

business division in Q4 will be more or less the same as in Q3 (YoY: -12%),

which is below market expectations. The company still expects a significant

improvement in the EBIT margin excluding non-recurring items. The 2016 EBIT

guidance for the Networks business division is 7–9% excluding NRIs. Nokia

estimates that the network market will decline by a low one-digit percentage in

2017. Although the overall market outlook is modest, there are also growing

areas in the wireless network market, such as Small Cell networks. Nokia did not

comment its sales performance in connection with the market comment.

Consensus expects the total sales of the Networks business division to decline by

2% in 2017 (OP: +3%). Consensus expects the Ultra Broadband Networks

business to decline by 4% (OP: 2%) and the sales of the IP Networks and

Applications business are expected to remain at the level of 2016 forecasts (OP:

+5%). In our opinion, the growth forecasts are not challenging. We justify our view

on the basis of the launch of network projects in India and the acquisitions of

public safety networks, for example. The growth forecasts for Small Cell and DAS

technologies are also positive. Small Cell Forum predicts that the sales of the

technologies will increase from USD 1bn in 2015 to USD 6bn in 2020. The

demand for software is also expected to increase as operators initiate

virtualisation projects. On the basis of Alcatel-Lucent’s Q3 report, Nokia’s own

base station business performed better than reported while the sales of Alcatel-

Lucent’s base stations declined by 25%. We expect the performance to stabilise

in 2017.

Another interesting question is the company’s cost savings programme. We

expect Nokia to revise its cost savings programme with regard to the fixed

network products (IP Networks and Applications and the Fixed Access Networks

business that is part of the Ultra Broadband Networks business). The profitability

of Nokia’s fixed network business is clearly below the peer group average, and in

our opinion, there is potential for improving efficiency. Consensus expects Nokia’s

EBIT margin in 2016 to be 8.2% and for 2017, the expected margin is 9.7%. (OP:

8.7% and 12%).

Conclusion & Action: We do not expect any major revisions for the Techologies

business division as Nokia is negotiating the renewal of a licensing agreement

with Apple, for example. While the negotiations are ongoing, Nokia cannot issue

sales guidance since the outcome of the negotiations is probably not yet known

next week.

The Capital Markets Day is a good opportunity to revise the company’s outlook

for the near future. In our opinion, concerns about a general decline in

investments in the mobile phone market cast an unnecessarily dark shadow over

Nokia.

Analyst(s):

Hannu Rauhala, OP Corporate Bank

[email protected]

+358 10 252 4392

Buy

4.09


6.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg NOKIA.HE/NOKIA FH



Free float 100%









Sales (m) 26,609 24,008 25,673

EBITDA (m) 3,221 1,061 3,331


EBIT (m) 2,829 (985) 2,671

EBIT margin 10.6% nm 10.4%

Net Profit (adj.)(m) 2,329 (2,001) 1,654

ROCE 158.8% -4.6% 12.3%

Net debt/(cash) (m) (7,770) (7,647) (8,613)


Debt/EBITDA -2.4 -7.2 -2.6


EV/Sales 1.0 0.3 0.2

EV/EBITDA 8.0 6.0 1.6

EV/EBITDA (adj.) 8.0 6.0 1.6

EV/EBIT 9.1 nm 2.0

P/E (adj.) 16.3 nm 14.3

P/BV 3.6 1.1 1.0

OpFCF yield 5.1% -1.6% 3.4%


EPS (adj.) 0.40 (0.35) 0.29

BVPS 1.81 3.81 4.03

DPS 0.26 0.20 0.20

3.5

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5.0

5.5

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vvdsvdvsdy

NOKIA Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: Keskinäinen työeläkevakuutusyhtiö

Varma 2.00%; Keskinäinen

Eläkevakuutusyhtiö Ilmarinen 0.70%;

Valtion Eläkerahasto 0.60%;

of 64


Spanish Telecommunications

Analyser

TELECOMMUNICATIONS

Nokia’s CMD to be held in Barcelona on 15 November

SPAIN: More regulation “to boost” FttH deployments

The facts: The CNMC approved the revision (5th) on TEF’s wholesale and

ducts offer.

Our analysis: The intention is to facilitate the deployment of FTTH on behalf of

alternate operators (ORA, VOD, MM, EKT, Telecable and VMOs), via a

wholesale offer by the incumbent (TEF) with access to infrastructures via the

MARCo regulation (2009).

To do so, the restrictions on the use of textile mesh and microducts to simplify

some procedures and obtain savings in costs and operating improvements.

In addition it would simplify the deployment in homes, reducing the supply

times from current 35 days to 10 days to access ducts. TEF will not have to

participate in the setting-out of installations

One of the most relevant points in the revision is Access to TEF’s posts that

could be considered bottle necks in rural areas for the deployment of NGA

networks due to the complex operative and high costs. The CNMC proposed

various improvements including a mechanism to share opex. In this manner,

the MRO executing the initial investment could partially recover some via the

co-habitation with other MROs in the infrastructure.

Conclusion: NGA network deployment costs in Spain are the lowest in

Europe: c. EUR150-200m per home passed thanks to the high verticality

in our country (according to Jazztel, 30% of the constructions vs. 16% in

France vs. 6% in Germany). This range is similar to Portugal which contrasts

with the EUR1k costs in Germany and EUR1.5k in UK. In addition is that the

majority of the cases, the verticals are fastened to the façade (70-80%) and not

in internally.

This favourable context encourages investments and migration from

xDSL to FTTH. The latter is the most employed technology in the new

deployments due to the lower costs and homogenisation of standards.

Small Green shoots can be seen in regulation. As expected the regulator

will have to be more lax from now on if Spain is to comply with the European

Digital Agenda. Not only encouraging other MROs and VMOs but also TEF to

increase investments.

---------- Stoxx Telecommunications,

DJ Stoxx TMI rebased on sector

Analyst(s):

Victor Peiro Pérez, GVC Gaesco Beka

[email protected]

+34 91 436 7812

Eduardo Garcia Arguelles, GVC Gaesco Beka

[email protected]

+34 914 367 810

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vvdsvdvsdy

of 64


Acotel

Italy/Telecommunications Analyser

TELECOMMUNICATIONS

Acotel (Reduce) SPAIN: More regulation “to boost” FttH deployments

9m 2016 Post: higher sales drop/lower EBITDA loss

The facts: publication of Q3 2016 results.

Our analysis: H1 release was affected by the deconsolidation of the Mobile

Virtual Network Aggregator activities, which constituted the vast majority of the

TLC division. ACO announced in mid-October the disposal of the unit to Telecom

Italia for EUR 4.5m. In Q3, the legacy business of interactive remained sharply

down Y/Y (12% below expectations), in spite of the growth in the Indian market

(which now accounts for 29% of revenues). The net division performed in line with

expectations but still accounts for below 10% of total revenue. Bucksense partially

compensated with a revenue surprise, altough it is probably a very volatile

business. The EBITDA remained in red in Q3 however less than expected, we

suspect this is due to lower commercial investments in the interactive division and

lower losses at Bucksense (revenues tripling Q/Q). Net cash declined by EUR

1.7m in Q3 (2m cash burn expected).

Acotel 9m 2016 results (EUR m)

Q3 2015a Q3 2016e Q3 2016a Y/Y 9m 2016a

Interactive 8.71 4.70 4.15 -52% 14.5

TLC 0.61 0 0 nm 0.00

NET 0.47 0.55 0.54 14.8% 1.60

Bucksense/adj 0.00 0.25 0.55 nm 0.82

Net sales 9.80 5.50 5.25 -46% 16.92

Turnover 9.83 5.60 5.27 -46% 16.98

EBITDA -1.74 -1.13 -0.59 -66% -4.17

Margin -17.7% -20.1% -11.2% 6.5% -24.5%

EBIT -2.19 -1.68 -0.92 -58% -5.06

Net income (Loss) -3.17 -1.58 -1.30 -59% -8.23

Net debt (Cash) -13.9 -5.50 -5.90 -58% -5.90

Source: Company data, BANCA AKROS estimates (adjusted for Jinny).

Outlook: ACO acknowledges the current weak economic performance and

deteriorating financial conditions. The H1 2016 results were definitely below the

company's internal targets, by 23% at the revenue level and by EUR 1.6m at the

EBITDA level. The auditors had also expressed doubts on the going concern

status of the company. No comparison is provided with 9m publication as the

company is working on a new business plan. We cut our revenues estimates; we

leave our EBITDA forecasts unchanged.

Conclusion & Action: The reco remains negative. Half of the company's current

market cap is explained by the EUR 11m pro-forma cash position, the residual

value is very tricky to be assessed, in presence of continued cash burn and slow

growth for the IoT business line. We cut our target price to EUR 3.5, assuming

the residual interactive activities can be trimmed further and sold for a few

millions while the NET division begins to be more tangible.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Reduce

4.06


3.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg ACO.MI/ACO IM



Free float 35%









Sales (m) 37 23 23

EBITDA (m) (9) (6) (2)

EBITDA margin nm nm nm

EBIT (m) (11) (8) (4)

EBIT margin nm nm nm

Net Profit (adj.)(m) (5) (4) (2)

ROCE -141.8% -686.7% -85.4%

Net debt/(cash) (m) (12) (6) (1)




EV/Sales 0.7 0.5 0.7

EV/EBITDA nm nm nm

EV/EBITDA (adj.) nm nm nm

EV/EBIT nm nm nm

P/E (adj.) nm nm nm

P/BV 2.3 2.9 5.9

OpFCF yield -43.8% -48.6% -38.8%


EPS (adj.) (1.25) (0.88) (0.44)

BVPS 3.67 1.40 0.69

DPS 0.00 0.00 0.00

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vvdsvdvsdy

ACOTEL FTSE Italy STAR (Rebased)Source: Factset

Shareholders: Clama 41%; Claudio Carnevale 17%;

Ellepif Ltd 0.00%;

of 64


OTE Hellenic Telecom

Greece/Telecommunications Analyser

TELECOMMUNICATIONS

OTE Hellenic Telecom (Buy) 9m 2016 Post: higher sales drop/lower EBITDA loss

Forecast-beating 3Q16 results thanks to Greek and Romanian fixed units

The facts: OTE reported forecast-beating 3Q16 results reflecting the solid

performance of the Greek-fixed business and the improvement of the operating

profitability in Romtelecom (after 8 consecutive quarters of decline). Specifically,

revenues came in at EUR 998m (+2.7% y-o-y, 2% above consensus), pro-forma

EBITDA shaped at EUR 357m (+2.0% y-o-y, 4% above consensus), while ‘clean’

net profits came in at EUR 74.6m (+11% y-o-y, 10% above our estimates).

Our Analysis: Adjusted free cash flow shaped at EUR 26m in 3Q16 compared to

EUR 93m in the same period of 2015, driving 9M16 adj FCF to EUR 175m versus

EUR 252m in 9M15, down by 31%. The reduction of group’s adj FCF in 9M16 is

attributed to the EUR 23m decrease in adj OpCF and the EUR 54m increase in

adj. capex. On a reported basis, free cash flow stood at EUR 113m in 9M16

compared to EUR 71m in 9M15, while in 3Q16 OTE’s FCF was negative (minus

EUR 8m) compared to EUR 1m in 3Q15, reflecting VES-related payments,

increased working capital needs and higher capex. The company has trimmed its

guidance on FY16 adjusted FCF to EUR 440m (vs. EUR 500m previously) due to

higher capex (EUR 600m versus an initial target for EUR 550m). In the

conference call, management highlighted that the proposed Vectoring regulation

introduces discriminations against OTE, while the acceleration of capex this year

relates to the development of fixed- line networks in Greece and Romania.

Finally, retail service revenues in OTE-fixed grew for the 5th straight quarter and

at the fastest pace (+4.2% y-o-y) due to a 10% increase in broadband revenues

and a 33% increase in pay-TV revenues that offset a 1.4% y-o-y decrease in

voice revenues (or nearly a EUR 2m drop).

OTE 9M16 results

EUR m 9M15a 9M16e IBG 9M16 % YoY

Sales 2,865.6 2,863.3 2,881.1 0.5%

Clean EBITDA* 994.5 960.4 977.2 -1.7%

margin 34.7% 33.5% 33.9%

Net earnings 115.1 109.8 123.4 7.2%

Net earnings adj** 168.0 141.9 149.6 -11.0%

Source: The Company, IBG, * Excluding VRS costs, ** Excluding VRS costs and other one-offs

Conclusion & Action: Overall, OTE’s good performance in 3Q16 should be

attributed to the solid performance of OTE-fixed and the first positive quarter for

Romtelecom both in terms of revenues and EBITDA. On the flip side, mobile

EBITDA remained under pressure for a 7th straight quarter reflecting a soft top

line and increased opex. In addition, FCF was worse than we had expected,

driving to a downward revision to management’s guidance for 2016 on higher

capex needs. We increase FY16e pro-forma EBITDA to EUR 1,310m (plus EUR

22m or 2% upward revision) and adj. net profits to EUR 214m (plus EUR 22m,

11% upward revision). For the period 2017-2020 we slightly increase our EBITDA

estimates to reflect our more positive stance on Telekom Romania and proceed

to a material upward revision to our net profits estimates due to the use of a lower

effective tax rate. We now forecast net profits of EUR 242m (+13% y-o-y) for

FY17 and EUR 293m (+21% y-o-y). Accordingly, we raise our target price on the

stock to EUR 10.80/share, re-affirming our ‘Buy’ rating on valuation grounds (35%

upside potential for current price levels). On our revised estimates, OTE trades on

a 3.7x 2017e EV/EBITDA ratio versus 5.7x for European telcos.

Analyst(s):

Dimitris Birbos, Investment Bank of Greece

[email protected]

+30 210 81 73 392

Buy

8.06


10.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg OTEr.AT/HTO GA



Free float 50%









Sales (m) 3,903 3,910 3,899

EBITDA (m) 1,221 1,264 1,283

EBITDA margin 31.3% 32.3% 32.9%

EBIT (m) 391 441 465

EBIT margin 10.0% 11.3% 11.9%


ROCE 9.3% 9.8% 10.4%

Net debt/(cash) (m) 860 625 302




EV/Sales 1.5 1.3 1.2

EV/EBITDA 4.8 4.0 3.7

EV/EBITDA (adj.) 4.6 3.9 3.7

EV/EBIT 15.0 11.4 10.1

P/E (adj.) 18.8 18.4 16.3

P/BV 2.0 1.7 1.6

OpFCF yield 6.3% 10.6% 13.0%


EPS (adj.) 0.49 0.44 0.49

BVPS 4.60 4.81 5.11

DPS 0.10 0.13 0.16

6.5

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vvdsvdvsdy

OTE Stoxx Telecommunications (Rebased)Source: Factset

Shareholders: Deutsche Telecom 40%; Greek State

10%;

of 64


Autogrill

Italy/Travel & Leisure Analyser

TRAVEL & LEISURE

Autogrill (Buy) Forecast-beating 3Q16 results thanks to Greek and Romanian fixed units

Sound results as expected – 2016 guidance confirmed

The facts: Autogrill published its third quarter results yesterday before market

closing. The company held a conference call in the afternoon

Our analysis: the company’s results were good and almost in line with our

estimates at the operating level. The net profit was better than expected after a

much lower tax rate.

Q3 15 Q3 16 y/y % Q3 16e 9M 15 9M 16 y/y %

Total sales 1,206.5 1,241.4 2.9% 1,212.8 3,173.1 3,281.5 3.4%

Other income 33.3 34.1

33.5 92.4 87.5

Total revenues 1,239.8 1,275.5 2.9% 1,246.3 3,265.5 3,369.0 3.2%

EBITDA 166.0 166.5 0.3% 169.0 290.1 320.2 10.4%

margin 13.4% 13.1%

13.6% 8.9% 9.5%

EBIT 113.7 118.9 4.6% 120.7 135.3 179.3 32.5%

margin 9.2% 9.3%

9.7% 4.1% 5.3%

PBT 99.3 113.5 14.3% 111.7 102.4 158.5 54.8%

Net profit 77.1 87.4

72.6 66.3 110.1

o/w minorities 5.3 6.6

5.9 10.1 12.7

The company confirmed its 2016 guidance: 2016 Revenues seen at EUR 4,465-

4,565m; 2016 EBITDA seen at EUR 411-426m.

Conclusion & Action: the company’s results were sound and the guidance was

confirmed. We confirm our recommendation on the stock on the back of its

exposure to the US market and the ability to grow organically.

Analyst(s):


[email protected]

+39 02 4344 4240

Buy

7.12


9.60



Target price: EUR

Share price: EUR

Reuters/Bloomberg AGL.MI/AGL IM



Free float 50%









Sales (m) 4,494 4,631 4,764

EBITDA (m) 376 421 431


EBIT (m) 152 208 212

EBIT margin 3.4% 4.5% 4.4%


ROCE 8.0% 10.8% 11.0%

Net debt/(cash) (m) 649 589 526




EV/Sales 0.7 0.5 0.5

EV/EBITDA 8.0 6.0 5.6

EV/EBITDA (adj.) 8.0 6.0 5.6

EV/EBIT 19.9 12.2 11.3

P/E (adj.) 35.0 20.6 20.1

P/BV 4.0 2.8 2.6

OpFCF yield 6.3% 5.0% 5.5%


EPS (adj.) 0.25 0.34 0.35

BVPS 2.20 2.54 2.78

DPS 0.12 0.14 0.16

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vvdsvdvsdy

AUTOGRILL Stoxx Travel & Leisure (Rebased)Source: Factset

Shareholders: Edizione Holding 50%;

of 64


A2A

Italy/Utilities Analyser

UTILITIES

A2A (Buy) Sound results as expected – 2016 guidance confirmed

Increasing results in 9M16 YoY (with one-offs)

The facts: A2A released its 9M 2016 results yesterday.

Our analysis: A2A posted increasing results YoY:

EURm 9M 15A 9M 16E 9M 16A Chg.

Sales 3,632 3,369 3,482 -4.1%

EBITDA 814 859 872 7.1%

Energy 369 358 373 1.1%

Networks & Heat 253 296 293 15.8%

Waste 161 170 174 8.1%

EPCG 43 47 48 11.6%

Other services & Corporate -12 -12 -16 33.3%

EBIT 454 508 524 15.4%

Pre-tax profit 346 472 484 39.9%

Net profit 237 314 323 36.3%

It is worth noting that A2A recorded positive non-recurring topics for EUR 84m at

an EBITDA level in H1 16, mainly related to the water sector/networks (recovery

of adjustment items related to the period 2007-2011 for about EUR 50m). Net of

this impact, EBITDA was slightly down YoY. In fact, on the negative side, it is

worth mentioning lower: price (PUN nearly -27% YoY) and electricity demand

(roughly -3% YoY); on the positive, the consolidation of LGH since August 2016

(impact EUR 7m). Furthermore, we remind readers that A2A posted EUR 52m of

positive one-off, below the EBITDA, in Q1 16 related to the different value

between the book value and the implied value recognised in the Edipower deal.

Energy division was hit by lower demand and lower prices. It is also worth

mentioning that the spin-off of Edipower hydro assets in favour of SEL is due to

impact for roughly EUR 15m of lower EBITDA (EUR 20m on a yearly basis). The

retail segment posted increasing figures (EUR 100m vs. EUR 78m in 9M 15)

mainly related to the regulatory reform impact (EUR 20m in terms of EBITDA on a

yearly basis, we expect EUR 13m in 9M 16). It is worth noting that A2A posted

nearly EUR 20m of positive one-offs in this area in H1 16.

Network. This division was affected by the regulatory review, which downward

modified the allowed return since January. On the positive side A2A registered a

EUR 50m one-off in the water sector mentioned above and the positive outcome

of the efficiency programme the company is carrying on. Heat. A2A posted

decreasing figures in this area YoY, mainly due to the unfavourable price

dynamic.

Waste division benefited from higher volumes collected (around +7% YoY). On

the positive side, it is worth noting that A2A posted a nearly EUR 8m positive one-

off in this area in H1 16.

Pre-tax profit and net profit are took advantage of the EUR 52m positive one-off

related to the Edipower deal, lower financial charges – i.e. EUR 96m vs. EUR

107m in 9M 15; FY cost of debt guidance points to 3.4/3.5%).

Net debt was around EUR 3.24bn vs. EUR 2.83bn posted as at the end of H1 16,

this is mainly due to LGH (EUR 375m of additional debt + EUR 52 cash-out for

the acquisition) and the Riesco-Resmal deal (impact EUR 25m).

2016 guidance. The company has increased its 2016 EBITDA guidance to EUR

1,140/1,150m from previous EUR 1,036m (including LGH contribution).

Conclusion & Action: we don’t believe 9M 16 results may be considered a

catalyst for stock performances. We argue the key issues are the M&A and the

business plan targets achievement. BUY.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Buy

1.13


1.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg A2.MI/A2A IM



Free float 50%









Sales (m) 4,921 5,032 5,416

EBITDA (m) 1,048 1,057 1,137

EBITDA margin 21.3% 21.0% 21.0%

EBIT (m) 215 635 666

EBIT margin 4.4% 12.6% 12.3%


ROCE 1.9% 6.0% 6.0%

Net debt/(cash) (m) 2,897 3,156 3,023




EV/Sales 1.6 1.6 1.4

EV/EBITDA 7.5 7.4 6.8

EV/EBITDA (adj.) 7.5 7.4 6.8

EV/EBIT 36.6 12.4 11.5

P/E (adj.) nm 9.4 10.4

P/BV 1.5 1.2 1.0

OpFCF yield 9.7% -2.6% 7.2%


EPS (adj.) 0.02 0.12 0.11

BVPS 0.84 0.91 1.17

DPS 0.04 0.05 0.06

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40


vvdsvdvsdy

A2A Stoxx Utilities (Rebased)Source: Factset

Shareholders: Milan City Council 25%; Brescia City

Council 25%;

of 64


Acea


UTILITIES

Acea (Accumulate) Increasing results in 9M16 YoY (with one-offs)

Increasing results YoY also net of one-offs

The facts: Acea unveiled its 9M 2016 results yesterday.

Our analysis: the company posted increasing results YoY:


Revenues 2,168 2,058 2,047 -5.6%

EBITDA 531 645 646 21.7%

Water 225 252 257 14.2%

El. distribution 188 256 250 33.0%

Waste 40 43 42 5.0%

El. Gen. & sales 78 94 95 21.8%

Corporate 0 0 2 n.m.

EBIT 285 388 378 32.6%

Pre-tax profit 217 327 317 46.1%

Net profit 137 214 201 46.7%

We remind readers that Acea recorded a positive one-off of EUR 63.3m in the

distribution business in H1 16. The one-off is related to the regulatory delibera

AEEGSI 654/2015, which eliminated the so called “regulatory lag”. Acea

estimates the positive impact in around EUR 90m and EUR 60m in terms of

respectively EBITDA and net profit on a yearly basis. This impacted for around

EUR 77m in 9M 16. Even without considering the positive one-off, Acea recorded

a sound around 7% growth YoY in terms of EBITDA.

In the water area, Acea took advantage of the efficiency programme the

company is successfully carrying on, from the increase in tariffs (around 5%),

while volumes sold ought to slightly down YoY (-2%). It is worth noting that as

regards ATO 2 tariff increases, Acea agreed not to apply any tariff increase in

2016 (due to be spread out over time) while for the following years the agreed

increases are: +4.8% in 2017, +6.0% in 2018 and +5.9% in 2019. The NPV of this

tariff trend is almost zero (vs. an increase of 2016 tariffs and in the following years

but with a lower size and using the agreed financial cost of 2.9%). The cash effect

of the delay is around EUR 26m on 2016.

Electricity distribution’s results were affected by the regulatory review, which

lowered the allowed return. This negative was more than compensated by the

positive impact of the regulatory lag cancellation.

In the waste area, Acea benefited from an increase in volumes treated (roughly

+6.5% YoY), while the electricity sold was almost flat YoY. These positive effects

were partially offset by lower electricity prices.

Generation & sales division was hit by lower prices (PUN ca. -27% YoY) and

electricity demand (-3% YoY). These negatives were more than offset by the

increase in margins on the captive customer sales.

Net debt reached around EUR 2.14bn, almost stable in comparison with the level

posted as at the end of H1 2016.

Conclusion & Action: Acea posted resilient results, even without considering the

one-off. This paved the way for an upward revision of FY EBITDA guidance (from

+3/4% vs. 2015 without considering the one-off impact to +5/6% - including EUR

18/20m of quality premia in the water sector; net debt EUR 2.1/2.2bn) and for the

business plan target achievements. On top of these positive triggers, Acea is due

to unveil, according to company guidance, M&A deals in the coming days. We

reiterate our positive stance on Acea.

Analyst(s):


[email protected]

+39 02 4344 4237

Accumulate

10.80


14.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg ACE.MI/ACE IM



Free float 21%









Sales (m) 2,917 3,037 3,106

EBITDA (m) 732 746 761

EBITDA margin 25.1% 24.6% 24.5%

EBIT (m) 386 412 404

EBIT margin 13.2% 13.6% 13.0%


ROCE 6.3% 6.7% 6.9%

Net debt/(cash) (m) 2,010 2,121 2,100




EV/Sales 1.8 1.5 1.5

EV/EBITDA 7.1 6.1 6.0

EV/EBITDA (adj.) 7.1 6.1 6.0

EV/EBIT 13.4 11.1 11.3

P/E (adj.) 17.3 11.3 10.8

P/BV 2.0 1.4 1.3

OpFCF yield 3.2% -1.0% 6.1%


EPS (adj.) 0.82 0.95 1.00

BVPS 7.16 7.61 8.04

DPS 0.50 0.57 0.60

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5


vvdsvdvsdy

ACEA Stoxx Utilities (Rebased)Source: Factset

Shareholders: Rome Council 51%; Francesco Gaetano

Caltagirone 16%; Suez Environnement

12%;

of 64


Enel


UTILITIES

Enel (Accumulate) Increasing results YoY also net of one-offs

Better than expected results in 9M 2016 YoY

The facts: Enel released its 9M 16 results yesterday.

Our analysis: Enel reported slightly declining results YoY, flat once adjusted for

one-offs (both in 2015 and 2016):

EURm 9M 15A 9M 16A YoY Chg.

Sales 55,998 51,459 -8.1%

EBITDA 12,161 12,010 -1.2%


Italy 5,266 5,445 3.4%

Iberia 2,978 2,970 -0.3%

LatAm 2,388 2,612 9.4%

Europe and North Africa 1,230 609 -50.5%

North and Central America 435 470 8.0%

Sub-Saharan Africa and Asia -7 7 -200.0%

Other -129 -103 -20.2%

EBIT 6,308 7,689 21.9%

EBIT margin 11.3% 14.9%

Net Profit 2,089 2,757 32.0%

It is worth noting that 9M 15 results benefited from positive one-offs related to:

3Sun deal and small asset sales in the Renewables worth c. EUR 50m; Co2 sales

in Iberia roughly EUR 180m; distribution activities in Argentina c. EUR 40m. We

also remind readers that Enel took advantage of EUR 124m one-off in H1 16. In

Q3 16 Enel recorded a positive one-off of around EUR 311 related to the gas

contract renegotiations. This mainly explains the EBITDA posted vs. our estimate

of EUR 11,682m in 9M 16.

Net debt. Enel posted ca. EUR 36.8bn of debt vs. around EUR 38.1bn as at the

end of H1 16. This is mainly due to two positive effects: forex for around EUR

700m and the NWC trend for EUR 300m (due to be reabsorbed during the year)

related to the Italian television tax collection.

Interim dividend. Enel is due to pay an interim DPS of EUR 0.09 in January

(yield about 2.5%) and the remaining part in July (we expect an additional EUR

0.09).

2016 guidance. Enel has improved its debt guidance for 2016. The new target is

around EUR 37.2bn vs. the previous guidance of EUR 38.2bn. This is mainly due

to the positive forex impact and lower capex connected with the restructuring

process in Latam. As regards the other items, we remind readers that as at the

end of H1 16, Enel upwards revised its 2016 targets included in its 2016-2019

strategic plan: a) ordinary EBITDA to around EUR 15bn from approx. EUR

14.7bn; b) net ordinary income to around EUR 3.2bn from approx. EUR 3.1bn.

Conclusion & Action: we confirm our positive stance on Enel, given that the

results confirmed the resilience of the company’s business mix in a still difficult

environment. The key catalysts for the stock are the reorganisation process in

Latam, the disposal programme and the cost cutting achievement. All these

elements are due to be detailed in the business plan presentation scheduled for

22nd

November. ACCUMULATE.

Analyst(s):


[email protected]

+39 02 4344 4237

Accumulate

3.65


4.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg ENEI.MI/ENEL IM



Free float 72%









Sales (m) 75,658 75,865 74,906

EBITDA (m) 15,297 15,048 15,394

EBITDA margin 20.2% 19.8% 20.6%

EBIT (m) 7,685 9,468 9,865

EBIT margin 10.2% 12.5% 13.2%

Net Profit (adj.)(m) 2,196 3,127 3,386

ROCE 4.6% 5.6% 5.8%

Net debt/(cash) (m) 37,545 39,083 40,867




EV/Sales 1.0 1.0 1.0

EV/EBITDA 4.8 4.9 4.9

EV/EBITDA (adj.) 4.8 4.9 4.9

EV/EBIT 9.6 7.8 7.6

P/E (adj.) 16.7 11.8 10.9

P/BV 1.1 1.0 1.0

OpFCF yield 3.2% 1.8% 3.0%


EPS (adj.) 0.23 0.31 0.33

BVPS 3.44 3.50 3.83

DPS 0.16 0.18 0.20

3.30

3.40

3.50

3.60

3.70

3.80

3.90

4.00

4.10

4.20

4.30


vvdsvdvsdy

ENEL Stoxx Utilities (Rebased)Source: Factset

Shareholders: Italian governement - Ministry of

Economy and Finance 26%; People's

Bank of China 2%;

of 64


Falck Renewables


UTILITIES

Falck Renewables (Buy) Better than expected results in 9M 2016 YoY

Results were a tad better than expected in 9M 16 YoY

The facts: Falck Renewables unveiled its 9M 2016 results yesterday.

Our analysis: the company posted decreasing results YoY, in line with the

company guidance for the FY (EBITDA at about EUR 130m in 2016, it was EUR

152m in 2015), slightly up vs. our estimates:

EURm 9M 2015A 9M 2016E 9M 16A YoY Chg.

Revenues 200 173 180 -10.0%

EBITDA 110 93 96 -12.7%

Ebitda mg 55.1% 53.8% 53.3%

EBIT 51 41 44 -13.7%

PBT 19 13 17 -10.5%

Falck Renewables’ results were hit by the drop in prices (in Italy the PUN was

down by around 27% YoY in 9M 2016), in the electricity demand (in Italy roughly

3% YoY) and by the different value set for the green certificates. The negative

trend in prices also affected the UK assets: prices around -11% YoY and the LEC

incentive cancellation (since August 2015).

Wind production was almost flat YoY (circa 1,150GWh), factoring in a very limited

contribution of the newly entered in operation plants of Kingsburn and

Spaldington (Assel Valley wind farm entered in operation in October). The

positive trend in Italy (we expect wind production +20% YoY vs. around +13%

YoY at a national level in 9M 16) was offset by the UK one (-17% YoY). Total

production was around 1,356GWh in 9M 16 vs. 1,337 in 9M 15.

Furthermore, still on the negative side, it is worth mentioning the GBP devaluation

vs. the EURO. This ought to affect EBITDA for around EUR 3.5m in 9M 16, i.e.

revenues (EUR -5m) and costs (EUR +1.5m).

Net debt was roughly EUR 592m, flat vs. the level posted as at the end of H1 16.

Here the GBP devaluation is acting positively (we estimate an impact of around

EUR 35m vs. the level posted as at the end of 2015, i.e. EUR 630m).

2016 guidance. Falck Renewables has confirmed its FY guidance, which points

to an EBITDA of about EUR 130m (+2%/-3% range).

Conclusion & Action: we don’t believe 9M 2016 results may be considered a

catalyst for the stock, even though they confirmed the weak short-term

environment (2016 figures are due to be hit by the change in the green

certificates value calculation and by the lack of LECs). In our view, the trigger

remains the business plan presentation (due on 29th

November 2016), with a

focus on the new operational initiatives, and on the potential deal with CII. We

reiterate our positive stance on the stock: BUY.

Analyst(s):


[email protected]

+39 02 4344 4237

Buy

0.73


1.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg AA4.MI/FKR IM



Free float 40%









Sales (m) 277 258 282

EBITDA (m) 152 125 145

EBITDA margin 55.0% 48.5% 51.5%

EBIT (m) 66 56 72

EBIT margin 23.9% 21.8% 25.7%


ROCE 4.4% 2.5% 3.3%

Net debt/(cash) (m) 630 651 626




EV/Sales 3.6 3.6 3.1

EV/EBITDA 6.6 7.3 6.0

EV/EBITDA (adj.) 6.6 7.3 6.0

EV/EBIT 15.2 16.3 12.1


P/BV 0.7 0.5 0.5

OpFCF yield 13.7% -4.1% 18.2%


EPS (adj.) 0.02 0.00 0.03

BVPS 1.62 1.58 1.58

DPS 0.05 0.04 0.04

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05

1.10

1.15


vvdsvdvsdy

FALCK RENEWABLES Stoxx Europe 600 (Rebased)Source: Factset

Shareholders: Falck SpA 60%;

of 64


Iren


UTILITIES

Iren (Buy) Results were a tad better than expected in 9M 16 YoY

Increasing results in 9M 2016 YoY

The facts: Iren released its 9M 16 results yesterday.

Our analysis: the company posted increasing results YoY:


Sales 2,219 2,031 2,228 0.4%

EBITDA 498 558 559 12.2%

Generation & Heat 120 139 140 16.7%

Networks 109 110 106 -2.8%

Water 125 116 113 -9.6%

Market 66 97 97 47.0%

Waste 57 90 96 68.4%

Other services 21 6 7 -66.7%

EBIT 253 285 285 12.6%

Pre-tax Profit 185 215 219 18.4%

Net Profit 99 122 125 26.3%

Generation & heat management division benefited from higher margins on the

thermoelectric and co-generative production, as well as from higher volumes

produced (around +3% in 9M 16 YoY). On the negative side it is worth mentioning

the lower electricity price (PUN around -27% YoY), demand (nearly -3.1% YoY)

and lower volumes on the hydroelectric production (around -14% in 9M 16 YoY).

In the network division, Iren posted almost flat results, mainly due to the

regulatory review, which lowered the allowed returns. This was offset by the

efficiency programme the company is successfully carrying on.

Water results were affected by the reduction in the allowed return. This was

partially offset by the increase in tariffs (around +4%). Volumes should were up

YoY mainly thanks to the SAP volumes.

In the market division, Iren took advantage of the commercial efforts aimed at

increasing the customer base.

Waste division benefited from the consolidation of TRM (we estimate a positive

contribution of around EUR 38m in terms of EBITDA i.e. EUR 50/55m per annum

– TRM posted nearly EUR 50m of EBITDA in 2015).

We remind readers that pre-tax profit benefited from a positive one-off of EUR

12.6m related to an adjustment of the value of the equity investment in TRM in H1

16 and this explains the increase posted in 9M 16.Cost of debt was around 3.4%.

Net Debt was around EUR 2.53bn, almost flat vs. H1 16.

2016 outlook. Iren has slightly improved its FY guidance, which points to an

EBITDA of ca. EUR 760m (vs. EUR 750m), a net profit of about EUR 150m and a

debt/EBITDA ratio of 3.4x/3.5x (vs. <3.5x). DPS EUR 0.06 with a pay-out of about

50%.

Conclusion & Action: we confirm our positive stance on the stock. In fact, we

believe 2016 results will prove the management quality and the success of the

actions taken and included in the recently unveiled business plan. We reiterate

our BUY recommendation on the stock.

Analyst(s):


[email protected]

+39 02 4344 4237

Buy

1.43


1.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg IREE.MI/IRE IM



Free float 32%









Sales (m) 3,094 4,287 3,454

EBITDA (m) 678 767 775

EBITDA margin 21.9% 17.9% 22.4%

EBIT (m) 347 369 373

EBIT margin 11.2% 8.6% 10.8%


ROCE 4.4% 5.3% 5.5%

Net debt/(cash) (m) 2,169 2,529 2,544




EV/Sales 1.4 1.2 1.5

EV/EBITDA 6.5 6.9 6.8

EV/EBITDA (adj.) 6.5 6.9 6.8

EV/EBIT 12.7 14.3 14.2

P/E (adj.) 14.9 10.8 10.6

P/BV 16.4 4.7 6.3

OpFCF yield 8.7% 11.7% 12.2%


EPS (adj.) 0.10 0.13 0.14

BVPS 0.09 0.31 0.23

DPS 0.06 0.06 0.06

1.20

1.25

1.30

1.35

1.40

1.45

1.50

1.55

1.60

1.65

1.70


vvdsvdvsdy

IREN Stoxx Utilities (Rebased)Source: Factset

Shareholders: Finanziaria Sviluppo Utilities (FSU) 33%;

Reggio Emilia Council 8%; Parma

Council 6%;

of 64


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 64


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 64


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 64


List of ESN Analysts (**)

Ari Agopyan CIC +33 1 53 48 80 63 [email protected] Victoria Kruchevska (CFA,FRM) EQB +49 69 5 89 97 416 [email protected]

Artur Amaro CBI +351 213 89 6822 [email protected] Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 [email protected]

Helena Barbosa CBI +351 21 389 6831 [email protected] Konstantinos Manolopoulos IBG +30 210 817 3388 [email protected]

Javier Bernat GVC +34 91 436 7816 jav [email protected] Dario Michi BAK +39 02 4344 4237 [email protected]

Dimitris Birbos IBG +30 210 81 73 392 [email protected] Marietta Miemietz CFA EQB +49-69-58997-439 [email protected]

Agnès Blazy CIC +33 1 53 48 80 67 [email protected] José Mota Freitas, CFA CBI +351 22 607 09 31 [email protected]

Charles Edouard Boissy CIC +33 01 53 48 80 81 [email protected] Henri Parkkinen OPG +358 10 252 4409 [email protected]

Rafael Bonardell GVC +34 91 436 78 171 [email protected] Victor Peiro Pérez GVC +34 91 436 7812 [email protected]

Louise Boyer CIC +33 1 53 48 80 68 [email protected] Francis Prêtre CIC +33 4 78 92 02 30 [email protected]

Giada Cabrino, CIIA BAK +39 02 4344 4092 [email protected] Francesco Previtera BAK +39 02 4344 4033 francesco.prev [email protected]

Arnaud Cadart CIC +33 1 53 48 80 86 [email protected] Jari Raisanen OPG +358 10 252 4504 [email protected]

Niclas Catani OPG +358 10 252 8780 [email protected] Hannu Rauhala OPG +358 10 252 4392 [email protected]

Pierre Chedeville CIC +33 1 53 48 80 97 [email protected] Matias Rautionmaa OPG +358 10 252 4408 [email protected]

Emmanuel Chevalier CIC +33 1 53 48 80 72 [email protected] Eric Ravary CIC +33 1 53 48 80 71 [email protected]

David Consalvo CIC +33 1 53 48 80 64 [email protected] Iñigo Recio Pascual GVC +34 91 436 7814 [email protected]

Edwin de Jong NIBC +312 0 5508569 [email protected] Gerard Rijk NIBC + 31 (0)20 550 8572 [email protected]

Martijn den Drijver NIBC +312 0 5508636 [email protected] André Rodrigues CBI +351 21 389 68 39 [email protected]

Christian Devismes CIC +33 1 53 48 80 85 [email protected] Jean-Luc Romain CIC +33 1 53 48 80 66 [email protected]

Andrea Devita, CFA BAK +39 02 4344 4031 [email protected] Jochen Rothenbacher, CEFA EQB +49 69 58997 415 [email protected]

Sebastian Droste EQB +49 69 58 99 74 34 [email protected] Vassilis Roumantzis IBG +30 2108173394 [email protected]

Enrico Esposti, CIIA BAK +39 02 4344 4022 [email protected] Sonia Ruiz De Garibay GVC +34 91 436 7841 [email protected]

Rafael Fernández de Heredia GVC +34 91 436 78 08 [email protected] Antti Saari OPG +358 10 252 4359 [email protected]

Enrico Filippi, CEFA BAK +39 02 4344 4071 [email protected] Paola Saglietti BAK +39 02 4344 4287 [email protected]

Gabriele Gambarova BAK +39 02 43 444 289 [email protected] Francesco Sala BAK +39 02 4344 4240 [email protected]

Eduardo Garcia Arguelles GVC +34 914 367 810 [email protected] Holger Schmidt, CEFA EQB +49 69 58 99 74 32 [email protected]

Alexandre Gérard CIC +33 1 53 48 80 93 [email protected] Cengiz Sen EQB +4969 58997 435 [email protected]

Philipp Häßler, CFA EQB +49 69 58997 414 [email protected] Pekka Spolander OPG +358 10 252 4351 [email protected]

Simon Heilmann EQB +49 69 58 997 413 [email protected] Kimmo Stenvall OPG +358 10 252 4561 [email protected]

Dr. Knud Hinkel EQB + 49 69 58997 419 [email protected] Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 [email protected]

Marcell Houben NIBC +31 20 550 8649 [email protected] Luigi Tramontana BAK +39 02 4344 4239 [email protected]

Carlos Jesus CBI +351 21 389 6812 [email protected] Johan van den Hooven NIBC +312 0 5508518 [email protected]

Mark Josefson EQB +4969-58997-437 [email protected] Kévin Woringer CIC +33 1 53 48 80 69 [email protected]

(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts

of 64


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: 11th November 2016 9 :11am CET First date and time of dissemination: 11th November 2016 9 :13am CET

Disclaimer: These reports have been prepared and issued by the Members of

European Securities Network LLP (‘ESN’). ESN, its Members and their

affiliates (and any director, officer or employee thereof), are neither liable

for the proper and complete transmission of these reports nor for any

delay in their receipt. Any unauthorised use, disclosure, copying,

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prohibited. The views and expressions in the reports are expressions of

opinion and are given in good faith, but are subject to change without

notice. These reports may not be reproduced in whole or in part or passed

to third parties without permission. The information herein was obtained

from various sources. ESN, its Members and their affiliates (and any

director, officer or employee thereof) do not guarantee their accuracy or

completeness, and neither ESN, nor its Members, nor its Members’

affiliates (nor any director, officer or employee thereof) shall be liable in

respect of any errors or omissions or for any losses or consequential

losses arising from such errors or omissions. Neither the information

contained in these reports nor any opinion expressed constitutes an offer,

or an invitation to make an offer, to buy or sell any securities or any

options, futures or other derivatives related to such securities (‘related

investments’). These reports are prepared for the clients of the Members

of ESN only. They do not have regard to the specific investment

objectives, financial situation and the particular needs of any specific

person who may receive any of these reports. Investors should seek

financial advice regarding the appropriateness of investing in any

securities or investment strategies discussed or recommended in these

reports and should understand that statements regarding future prospects

may not be realised. Investors should note that income from such

securities, if any, may fluctuate and that each security’s price or value may

rise or fall. Accordingly, investors may receive back less than originally

invested. Past performance is not necessarily a guide to future

performance. Foreign currency rates of exchange may adversely affect the

value, price or income of any security or related investment mentioned in

these reports. In addition, investors in securities such as ADRs, whose

value are influenced by the currency of the underlying security, effectively

assume currency risk. ESN, its Members and their affiliates may submit a

pre-publication draft (without mentioning neither the recommendation nor

the target price/fair value) of its reports for review to the Investor Relations

Department of the issuer forming the subject of the report, solely for the

purpose of correcting any inadvertent material inaccuracies. Like all

members employees, analysts receive compensation that is impacted by

overall firm profitability For further details about the analyst certification,

the specific risks of the company and about the valuation methods used to

determine the price targets included in this report/note, please refer to the

specific disclaimer pages prepared by the ESN Members. In the case of a

short note please refer to the latest relevant published research on single

stock or contact the analyst named on the front of the report/note for

detailed information on the valuation methods, earning estimates and

risks. A full description of all the organisational and administrative

measures taken by the Members of ESN to manage interest and conflicts

of interest are available on the website of the Members. Research is

available through the ESN Members sales representative. ESN will

provide periodic updates on companies or sectors based on company-

specific developments or announcements, market conditions or any other

publicly available information. Unless agreed in writing with an ESN

Member, this research is intended solely for internal use by the recipient.

Neither this document nor any copy of it may be taken or transmitted into

Australia, Canada or Japan or distributed, directly or indirectly, in

Australia, Canada or Japan or to any resident thereof. This document is

for distribution in the U.K. Only to persons who have professional

experience in matters relating to investments and fall within article 19(5) of

the financial services and markets act 2000 (financial promotion) order

2005 (the “order”) or (ii) are persons falling within article 49(2)(a) to (d) of

the order, namely high net worth companies, unincorporated associations

etc (all such persons together being referred to as “relevant persons”).

This document must not be acted on or relied upon by persons who are

not relevant persons. Any investment or investment activity to which this

document relates is available only to relevant persons and will be engaged

in only with relevant persons. The distribution of this document in other

jurisdictions or to residents of other jurisdictions may also be restricted by

law, and persons into whose possession this document comes should

inform themselves about, and observe, any such restrictions. By accepting

this report you agree to be bound by the foregoing instructions. You shall

indemnify ESN, its Members and their affiliates (and any director, officer or

employee thereof) against any damages, claims, losses, and detriments

resulting from or in connection with the unauthorized use of this document.

For disclosure upon “conflicts of interest” on the companies under

coverage by all the ESN Members and on each “company

recommendation history”, please visit the ESN website

(www.esnpartnership.eu) or refer to the ESN Members website. Additional

information is always available upon request. For additional information

and individual disclaimers please refer to www.esnpartnership.eu and

to each ESN Member websites:

www.bancaakros.it regulated by the CONSOB - Commissione Nazionale per le Società e la Borsa

www.caixabi.pt regulated by the CMVM - Comissão do Mercado de Valores Mobiliários

www.cmcicms.com regulated by the AMF - Autorité des marchés financiers

www.equinet-ag.de regulated by the BaFin - Bundesanstalt für Finanzdienstleistungsaufsicht

www.ibg.gr regulated by the HCMC - Hellenic Capital Market Commission

www.nibcmarkets.com regulated by the AFM - Autoriteit Financiële Markten

www.op.fi regulated by the Financial Supervision Authority

www.valores.gvcgaesco.es regulated by CNMV - Comisión Nacional del Mercado de Valores

Members of ESN (European Securities Network LLP)

Caixa-Banco de Investimento

Rua Barata Salgueiro, nº 33

1269-057 Lisboa

Portugal

Phone: +351 21 313 73 00

Fax: +351 21 389 68 98

GVC Gaesco Beka, SV, SA

C/ Marques de Villamagna 3

28001 Madrid

Spain

Phone: +34 91 436 7813

Investment Bank of Greece

32 Aigialeias Str & Paradissou,

151 25 Maroussi,

Greece

Tel: +30 210 81 73 383

Banca Akros S.p.A.

Viale Eginardo, 29

20149 MILANO

Italy

Phone: +39 02 43 444 389

Fax: +39 02 43 444 302

NIBC Markets N.V.

Nieuwezijds Voorburgwal 162

P.O.Box 235

1000 AE Amsterdam

The Netherlands

Phone: +31 20 550 8500

Fax: +31 20 626 8064

CM - CIC Market Solutions

6, avenue de Provence

75441 Paris

Cedex 09

France

Phone: +33 1 53 48 80 78

Fax: +33 1 53 48 82 25

equinet Bank AG

Gräfstraße 97

60487 Frankfurt am Main

Germany

Phone:+49 69 – 58997 – 212

Fax:+49 69 – 58997 – 299

OP Corporate Bank plc

P.O.Box 308

Teollisuuskatu 1, 00013 Helsinki

Finland

Phone: +358 10 252 011

Fax: +358 10 252 2703

http://www.bancaakros.it/

http://www.caixabi.pt/

https://mail.esnpartnership.eu/owa/redir.aspx?C=8Zt3eXAOIkqYEQDE_-yjO4gceHQnAtMIAKuq5wlXoeMctWfJzR5HnUAHD5WapHeCCa8AyfgTFB4.&URL=http%3a%2f%2fwww.cmcicms.com

http://www.equinet-ag.de/

http://www.ibg.gr/

http://www.nibcmarkets.com/

http://www.op.fi/

http://www.valores.gvcgaesco.es/

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