ESN_120227

ESN Analyser Investment Research

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

ESN Analyser Investment Research

27 February 2012

ESN Top Picks Roadshows Corporate Events RECOMMENDATION CHANGES GBL (Upgrade: Accumulate from Hold) Upgrade to Accumulate, TP raised to EUR 64 Merck (Downgrade: Reduce from Hold) It might not be a too bad timing to reduce exposure Volkswagen (Upgrade: Buy from Accumulate) Upgrade to Buy as the economic situation improves Gamesa (Downgrade: Hold from Buy) Estimates and recommendation adjusted downwards SMA Solar Technology (Upgrade: Hold from Reduce) New PT set at EUR40 on German PV subsidy cut - Hold STRATEGY NEWS Strategy news Eurozone Debt Crisis Still in Abatement for Now BLUE CHIPS COMPANY NEWS Acciona (Buy) 2011 results: hedging real estate risks Ahold (Buy) Expanding online activities by acquiring bol.com Atlantia (Hold) Strengthening Latin America Bayer (Hold) Q411 Results Preview Deutsche Post (Buy) Headwind from the German government Fresenius (Accumulate) A good looking overall picture. We continue to like. Acc. GBL (Accumulate) Upgrade to Accumulate, TP raised to EUR 64 Merck (Reduce) It might not be a too bad timing to reduce exposure Telefonica (Buy) Highlights from the conference call Vodafone (Accumulate) m-payment agreement with Visa Volkswagen (Buy) Upgrade to Buy as the economic situation improves

SMALL & MID CAPS COMPANY NEWS Aixtron (Reduce) Shorties squeezed, but will fundamentals follow soon? Almirall (Buy) TP reviewed after PADAC’s backing EKLIRA. 2011 Rslts. Arcadis (Buy) Strong underlying results Bekaert (Hold) Earnings and TP revisions post FY11 results DAB bank (Hold) Weaker Q4 results expected (28.2.2012) Danieli (Accumulate) H1 11/12 preview Finmeccanica (Accumulate) Investigations for alleged bribery in India and Canada Gamesa (Hold) Estimates and recommendation adjusted downwards M-real (Buy) Capacity closure ahead at Gohrsmühle RIB Software (Buy) Solid Q4 2011 expected SIAS (Buy) Back to Italy SMA Solar Technology (Hold) New PT set at EUR40 on German PV subsidy cut - Hold Sogefi (Buy) We keep our positive stance on the stock Trevi (Hold) Bleak perspectives for 2012 Wilex (Buy) FDA approves protocol amendment for ARISER

ESN Top Picks


Blue Chips Top Picks

Company Country Sector Idea Rating Price as of 26/02/2012

Target Price

Upside/Downside Entry date Entry

price

Entry price (Div. Adj)

Total Return Entry To Date

AHOLD Netherlands Food & Drug Retailers Long Buy 10.31 11.50 12% 11/01/2012 10.36 10.36 -0.4%

BNP PARIBAS France Banks Long Buy 36.92 55.00 49% 11/01/2012 29.58 29.58 24.8%

DEUTSCHE POST Germany Industrial Transportation & Motorways Long Buy 13.16 15.00 14% 11/01/2012 12.55 12.55 4.9%

FERROVIAL Spain Construction & Materials Long Buy 9.55 12.50 31% 11/01/2012 9.42 9.42 1.3%

FORTUM Finland Utilities Long Buy 18.50 23.00 24% 11/01/2012 16.24 15.24 21.4%

GALP ENERGIA Portugal Oil & Gas Producers Long Buy 13.26 18.70 41% 11/01/2012 12.79 12.79 3.6%

KERRY GROUP Ireland Food & Beverage Long Buy 31.55 36.00 14% 11/01/2012 29.17 28.95 9.0%

NORDEA Finland Banks Long Buy 7.16 7.80 9% 11/01/2012 6.14 6.14 16.6%

RYANAIR Ireland Airlines Long Accumulate 4.10 4.50 10% 11/01/2012 3.89 3.89 5.4%

TERNA Italy Utilities Long Buy 2.79 3.20 15% 11/01/2012 2.76 2.76 1.3%

UCB Belgium Healthcare Long Buy 30.63 39.00 27% 11/01/2012 32.51 32.51 -5.8%

source: ESN Members’ estimates

M/S Caps Top Picks

Company Country Sector Idea Rating Price as of 26/02/2012

Target Price

Upside/ Downside

Entry date Entry price

Entry price (Div. Adj)

Total Return Entry To Date

ATOS ORIGIN France Software & Computer Services Long Buy 43.22 50.00 16% 12/01/2012 34.95 34.95 23.7%

CFAO France Industrial Engineering Long Accumulate 30.05 29.50 -2% 19/01/2012 25.09 25.09 19.8%

CONSTRUCCIONES Y AUX. DE FERROCARRILES Spain Industrial Transportation &

Motorways Long Buy 408.15 539.24 32% 12/01/2012 380.50 380.50 7.3%

DIA Spain Food & Drug Retailers Long Buy 3.55 4.51 27% 16/02/2012 3.53 3.53 0.5%

DCC Ireland General Industrials Long Buy 19.50 22.80 17% 12/01/2012 18.50 18.50 5.4%

EVS Belgium Electronic & Electrical Equipment Long Accumulate 41.28 51.00 24% 12/01/2012 38.50 38.50 7.2%

GAMELOFT France Software & Computer Services Long Accumulate 5.05 5.90 17% 12/01/2012 4.95 4.95 2.0%

PIAGGIO Italy Automobiles & Parts Long Buy 2.05 2.40 17% 12/01/2012 1.77 1.77 15.6%

POSTNL Netherlands Industrial Transportation & Motorways Long Accumulate 4.61 5.60 21% 12/01/2012 2.76 2.76 67.0%

RHOEN-KLINIKUM Germany Healthcare Long Buy 14.44 22.00 52% 12/01/2012 14.96 14.96 -3.5%

SONAECOM Portugal Telecommunications Long Buy 1.26 1.70 35% 12/01/2012 1.27 1.27 -1.1%

TIKKURILA Finland Chemicals Long Accumulate 15.34 16.30 6% 12/01/2012 13.91 13.18 16.4%

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


Roadshows & Company Visits in ESN for the next two weeks

SUBJECT LOCATION EVENT DATE Marr Rimini Company visit 27/02/2012 Philips London Local Company Roadshow 27/02/2012 Total Luxembourg Cross-country Company Roadshow 27/02/2012 Sipef Brussels Local Company Roadshow 27/02/2012 Lunch meeting Banca Ifis Milan Local Company Roadshow 27/02/2012 GIMV Paris Cross-country Company Roadshow 28/02/2012 Gimv Paris Cross-country Company Roadshow 28/02/2012 Kinepolis Brussels Local Company Roadshow 28/02/2012 AKKA Technologies Frankfurt Cross-country Company Roadshow 29/02/2012 Bank of Ireland New York Company visit 29/02/2012 HERA Helsinki Cross-country Company Roadshow 29/02/2012 CFE Brussels Local Company Roadshow 29/02/2012 Wärtsilä Helsinki Company visit 29/02/2012 Ipsos Paris Local Company Roadshow 01/03/2012 Banimmo Brussels Local Company Roadshow 01/03/2012 Havas Paris Local Company Roadshow 02/03/2012 Vilmorin Paris Local Company Roadshow 02/03/2012 Atenor Brussels Local Company Roadshow 02/03/2012 Faurecia Lyon Local Company Roadshow 05/03/2012 Ackermans & van Haaren Brussels Local Company Roadshow 05/03/2012 Eiffage Paris Local Company Roadshow 06/03/2012 MOBOTIX Management Roadshow Zurich Cross-country Company Roadshow 06/03/2012 Deceuninck Brussels Local Company Roadshow 06/03/2012 BESI London Local Company Roadshow 07/03/2012 GL events Paris Local Company Roadshow 07/03/2012 SCHULER AG Paris Cross-country Company Roadshow 07/03/2012 Bois Sauvage Brussels Local Company Roadshow 07/03/2012 BESI Zurich Local Company Roadshow 08/03/2012 Smurfit Kappa New York Company visit 08/03/2012 Jacquet Metal Service Paris Local Company Roadshow 09/03/2012

Source: ESN Members

Corporate Events


Corporate Events today Company Bloomberg code Date Event Type Description

ABENGOA ABG SM 27/02/12 Results Full year 2011 Results

ACCIONA ANA SM 27/02/12 Results Full year 2011 Earnings conference call

ALMIRALL ALM SM 27/02/12 Results Full year 2011 Earnings conference call

ALM SM 27/02/12 Results Full year 2011 Results

ARCADIS ARCAD NA 27/02/12 Analyst Meeting Full year 2011 Analyst meeting / Webcast

ARCAD NA 27/02/12 Results Full year 2011 Press conference

ARCAD NA 27/02/12 Results Full year 2011 Results

DANIELI DAN IM 27/02/12 Results Interim 2012 Results

HERMES INTL. RMS FP 27/02/12 Ex Dividend Date Interim 2011 Ex-dividend date EUR 1.50

NOVARTIS NOVN VX 27/02/12 Ex Dividend Date Full year 2011 Ex-dividend date - proposed CHF 2.25

POSTNL PNL NA 27/02/12 Results Q4 2011 Earnings conference call / Webcast {analyst}

PNL NA 27/02/12 Results Q4 2011 Earnings conference call / Webcast {press}

PNL NA 27/02/12 Results Q4 2011 Results

REALIA RLIA SM 27/02/12 Results Full year 2011 Results

RLIA SM 27/02/12 Results Full year 2011 Earnings conference call

ZELTIA ZEL SM 27/02/12 Results Full year 2011 Results Source: Precise

of 33 European Securities Network

Please refer to important disclaimer on the last page

Strategy Update Summary

Analyser

Eurozone Debt Crisis Still in Abatement for Now

Eurozone Debt Crisis Still in Abatement for Now The risk of a Greek default has been significantly reduced. Markets remain sceptical about the likelihood of Greece meeting its fiscal targets post the recent bailout deal. Although these worries are justified, the Troika has nonetheless made significant progress in safeguarding against the risk of an eventual Greek sovereign default. Firstly, because the massive haircut taken by Greece’s creditors very significantly reduces the amount of debt to be refinanced and serviced in the future. Secondly, because the new escrow account requirement gives the Troika the power to ensure that the priority in using bailout funds is first to refinance and service existing Greek sovereign debt before funding ongoing budget deficits. Under this arrangement, budget overruns are significantly less likely to materialise since the incremental funds required to finance them would simply not be available. So, the risk of an unplanned escalation in Greek sovereign debt is removed and the risk of a default is much more tightly controlled. The ECB’s December LTRO facility has been surprisingly successful in encouraging banks to refinance PIIGS sovereign debt. The risk spread on Italian 2-year sovereign bond yields over the German equivalent has continued to break decisively lower over recent weeks. The less impressive (but nonetheless confirmed) break downwards in the risk spread on Italian 10-year bond yields over the German equivalent serves as a reminder that markets remain nervous about the longer term creditworthiness of the PIIGS governments. The recent rally in the Euro is also consistent with market perceptions that the crisis is being contained. The second LTRO on Tuesday / Wednesday this week can be expected to consolidate the success of the first facility. However, the ECB’s efforts to drive PIIGS bond yields lower are likely to wane considerably as these yields drop below the perceived danger zone. High PIIGS bond yields have been the key driver of the required austerity measures in the PIIGS economies and they must remain as such. The ECB knows that further required austerity and reform can only be achieved within the context of an ongoing crisis of confidence in the PIIGS sovereign bond markets. Progress with Italian labour market reform will now be watched closely. The Monti government has had notable success in driving through important pension reform in Italy. However, the outcome of current negotiations between the government, labour unions and employers for major labour market reforms will now be a key determinant of whether another escalation in PIIGS bond yields will be required to keep the retrenchment momentum going. So, although there are encouraging signs that the peak of the Eurozone debt crisis has passed, the equilibrium remains tentative and the risk of another flaring in PIIGS bond yields remains fairly high. Authors: Bernard Mc Alinden +353 87 241 4826 /Jane Riordan +353 1611 5922



Acciona Spain/Utilities Analyser

Acciona (Buy)

Buy

59.65 closing price as of 24/02/2012

88.50 Target Price unchanged

Recommendation unchanged

Target price: EUR

Share price: EUR

Reuters/Bloomberg ANA.MC/ANA SM

Market capitalisation (EURm) 3,791Current N° of shares (m) 64Free float 44% Daily avg. no. trad. sh. 12 mth 290,779Daily avg. trad. vol. 12 mth (m) 20Price high 12 mth (EUR) 80.47Price low 12 mth (EUR) 57.36Abs. perf. 1 mth -3.21%Abs. perf. 3 mth -6.11%Abs. perf. 12 mth -11.37%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 6,263 6,707 6,511EBITDA (m) 1,211 1,310 1,412EBITDA margin 19.3% 19.5% 21.7%EBIT (m) 527 868 690EBIT margin 8.4% 12.9% 10.6%Net Profit (adj.)(m) 124 143 162ROCE 3.0% 4.6% 3.6%Net debt/(cash) (m) 6,587 7,252 7,403Net Debt/Equity 1.1 1.2 1.2Debt/EBITDA 5.4 5.5 5.2Int. cover(EBITDA/Fin. int) 3.6 3.2 3.0EV/Sales 1.3 1.4 1.4EV/EBITDA 6.5 7.2 6.5EV/EBITDA (adj.) 6.5 7.2 6.5EV/EBIT 15.0 10.9 13.3P/E (adj.) 27.2 29.7 23.4P/BV 0.6 0.7 0.6OpFCF yield 2.2% -2.8% -0.8%Dividend yield 5.2% 5.5% 5.7%EPS (adj.) 1.95 2.25 2.55BVPS 90.19 92.56 91.85DPS 3.10 3.26 3.42

2011 results: hedging real estate risks The facts: Acciona reported EUR202m net profit, +21%. In recurrent terms, earnings came in above our estimates, although in line in EBITDA. The main drivers were the energy activity and the company’s international expansion. SALES 2010 2011 % 2011ePF Published/EstimatedInfrastructures 3,121.0 3,522.0 12.8% 3,400.5 3.6%Real Estate 204.0 104.0 -49.0% 144.8 -28.2%Energy 1,498.0 1,650.0 10.1% 1,752.7 -5.9%Urban services 732.0 697.0 -4.8% 721.1 -3.3%Logistics/Handling 777.0 714.0 -8.1% 738.6 -3.3%Other 119.0 135.0 13.4% 136.9 -1.4%Adjustments -188.0 -176.0 -6.4% -187.0 -5.9%TOTAL 6,263.0 6,646.0 6.1% 6,707.5 -0.9%EBITDA 2010 2011 % 2011e Published/EstimatedInfrastructures 203.0 215.0 5.9% 202.0 6.4%Real Estate 23.0 12.0 -47.8% 14.2 -15.7%Energy 821.0 956.0 16.4% 957.2 -0.1%Urban services 59.0 55.0 -6.8% 58.0 -5.2%Logistics/Handling 74.0 25.0 -66.2% 42.5 -41.2%Other 46.0 55.0 19.6% 53.0 3.9%Adjustments -17.0 -6.0 -64.7% -17.0 -64.7%TOTAL 1,209.0 1,312.0 8.5% 1,309.9 0.2%RESULTS ACCOUNT 2010 2011 % 2011e Published/EstimatedAmortisations/Prov -683.0 -680.2 -0.4% -701.2 -3.0%Operating Result 526.0 631.8 20.1% 608.7 3.8%Financial result -333.1 -409.7 23.0% -406.1 0.9%Other 46.7 1.9 - 1.9 -4.4%Taxes/Minorities -73.0 -21.8 -70.1% -38.1 -42.7%Net Income 166.7 202.1 21.3% 166.5 21.4%Recurrent 123.8 174.2 40.7% 166.5 4.6%* including EUR 259m of provisionsSource: Acciona. Estimates Bankia Bolsa

Our analysis: 1) Energy (+16% EBITDA, in line with estimates). In generation (16% EIBTDA, 2% above forecasts), attributable production falls (-4%), the load factor (wind, hydro) deteriorated and pool prices increased 34%. The new installed capacity comes to 651MW wind (600MW e) and 50MW thermosolar (+9% total vs. 2010). The target for 2010 is between 300-400MW (vs. 350Mw estimated). Higher losses in industry (EUR-103m vs. EUR-84m est); 2) Other activities: weak performance (-8% EBITDA) due to Transmed (-55% EBITDA, EUR25m), real estate (-47%, EUR12m) and urban services (-6%). On the positive side, infrastructure (+5%) thanks to construction (+8%) although disappointing portfolio (-10.5%); 3) Debt: Better than expected (EUR6,991m vs EUR7,252m estimated, EUR6,587m in 2010), as well as working capital (EUR-119m vs. EUR-222m). 4) Asset sales: EUR610m (EUR478m CF) from a shopping centre, 2 toll roads and parkings. Conclusion: Results above forecasts excluding the provision made. Acciona is not the only company to do so (ACS and FCC will follow suit in coming days). The main doubt refers to the framework, and in our opinion thermosolar. We maintain our positive outlook on the stock. Valuing the thermosolar activity in Spain at zero, results in a fair value of EUR65.8/share

55

60

65

70

75

80

85

Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12

vvdsvdvsdy

ACCIONA Stoxx Utilities (Rebased)Source: Factset

Analyst(s):

Rafael Fernández de Heredia, Bankia Bolsa [email protected]

+34 91 436 78 08



Ahold Netherlands/Food & Drug Retailers Analyser

Ahold (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg AHLN.AS/AH NA

Market capitalisation (EURm) 10,949Current N° of shares (m) 1,062Free float 72% Daily avg. no. trad. sh. 12 mth 4,111,065Daily avg. trad. vol. 12 mth (m) 39Price high 12 mth (EUR) 11.05Price low 12 mth (EUR) 7.83Abs. perf. 1 mth 0.49%Abs. perf. 3 mth 13.97%Abs. perf. 12 mth 5.84%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 29,530 30,271 31,948EBITDA (m) 2,082 2,122 2,270EBITDA margin 7.1% 7.0% 7.1%EBIT (m) 1,336 1,328 1,404EBIT margin 4.5% 4.4% 4.4%Net Profit (adj.)(m) 949 1,003 986ROCE 16.0% 17.4% 15.6%Net debt/(cash) (m) 737 1,152 747Net Debt/Equity 0.1 0.2 0.1Debt/EBITDA 0.4 0.5 0.3Int. cover(EBITDA/Fin. int) 7.7 9.5 10.7EV/Sales 0.4 0.4 0.3EV/EBITDA 5.7 5.5 4.8EV/EBITDA (adj.) 5.7 5.5 4.8EV/EBIT 9.0 8.8 7.8P/E (adj.) 12.2 11.5 11.1P/BV 2.0 2.0 1.7OpFCF yield 8.3% 7.0% 6.7%Dividend yield 2.8% 3.4% 3.9%EPS (adj.) 0.81 0.90 0.93BVPS 5.05 5.33 6.16DPS 0.29 0.35 0.40

Expanding online activities by acquiring bol.com The facts: Ahold announced that is has acquired bol.com for about EUR 350m. The transaction is expected to be accretive for EPS from day one and is expected to close in 2Q12. Our analysis: Bol.com is the largest web shop in the Netherlands and Belgium and offers a broad range of non-food products in the categories books, entertainment, electronics and toys. About half of the Dutch customers who shop online bought products at bol.com in 2011. In 2011, the number of articles sold increased by 9.4% while the number of clients increased by 13% to 3.4m. Bol.com also benefited from opening its platform to 3rd parties, via Bol.com plaza. With this acquisition, Ahold expands its exposure in the non-food segment, adding to the existing online food offering by albert.nl. Bol.com offers the company the platform, scale and expertise to accelerate its growth in online retailing. Bol.com reported revenues of EUR 355m in 2011, adding about 1% of Ahold’s 2011 revenues. According to Ahold, the acquisition will be earnings accretive from day one. Conclusion & Action: The acquisition of bol.com fits Ahold’s strategy to accelerate its online growth. We maintain our positive view on the shares and continue to rate them Buy with a target price of EUR 11.50.

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5


vvdsvdvsdy

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

Analyst(s):

Richard Withagen, SNS Securities [email protected]

+312 0 5508572



Atlantia Italy/Industrial Transportation & Motorways Analyser

Atlantia (Hold)

Hold




Target price: EUR

Share price: EUR

Reuters/Bloomberg ATL.MI/ATL IM

Market capitalisation (EURm) 8,445Current N° of shares (m) 662Free float 49% Daily avg. no. trad. sh. 12 mth 2,552,124Daily avg. trad. vol. 12 mth (m) 33Price high 12 mth (EUR) 15.87Price low 12 mth (EUR) 9.37Abs. perf. 1 mth 4.16%Abs. perf. 3 mth 26.09%Abs. perf. 12 mth -17.70%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 3,750 3,978 4,240EBITDA (m) 2,285 2,366 2,510EBITDA margin 60.9% 59.5% 59.2%EBIT (m) 1,767 1,810 1,903EBIT margin 47.1% 45.5% 44.9%Net Profit (adj.)(m) 634 797 755ROCE 7.3% 7.3% 6.9%Net debt/(cash) (m) 8,806 9,217 10,403Net Debt/Equity 2.5 2.3 2.4Debt/EBITDA 3.9 3.9 4.1Int. cover(EBITDA/Fin. int) 3.5 3.5 4.0EV/Sales 4.8 4.4 4.6EV/EBITDA 8.0 7.5 7.7EV/EBITDA (adj.) 8.0 7.5 7.7EV/EBIT 10.3 9.7 10.2P/E (adj.) 13.4 9.5 10.9P/BV 2.7 2.2 2.1OpFCF yield 14.3% 18.8% 17.0%Dividend yield 5.8% 5.8% 5.8%EPS (adj.) 1.08 1.30 1.17BVPS 5.30 5.74 5.96DPS 0.75 0.75 0.75

Strengthening Latin America The facts: Atlantia signed an agreement with Sias and Mediobanca for the acquisition of the 54.2% stake in Autostrade Sud America. At the same time, Atlantia sold to Argo Finanziaria its 33% stake held in IGLI for EUR 90m and granted SIAS a call option on its stretch Torino-Savona of EUR 223m. Our analysis: Such a complex deal comes after Atlantia decided to exit from IGLI, the vehicle that controls c. 30% of Impregilo, waiving its pre-emption rights on the IGLI shares currently being sold by Fondiaria Sai to Argo Finanziaria. In detail: 1) Atlantia will sell its 33% stake in IGLI to Argo Finanziaria for EUR 88m, valuing

Impregilo some EUR 3.65/sh, the same premium recognized to Ligresti. The transaction will involve a capital gain similar to the disposal price, considering that the IGLI stake is currently written off by Atlantia.

2) Atlantia will acquire from SIAS the 45.8% stake in Autostrade Sud America (ASA) for EUR 565m and the 8.5% stake held by Mediobanca in ASA for EUR 105m. The transaction will imply an enterprise value in the range of EUR 2.2bn for the 100% of ASA, considering EUR 997m debt. ASA generated EUR 147m EBITDA in 2011. Such a transaction would imply an EV/EBITDA of 15x (this compares with Atlantia 7.2x EV/EBITDA and 12.4x implicit multiple of the recent disposal of the Chilean assets of Cintra to ISA). Atlantia is expected to consolidate the Chilean activities by the end of June; the full consolidation will involve: 1) a capital gain in the range of EUR 380m, considering that the current 46% stake held by Atlantia is valued EUR 180m (book value); 2) additional annual sales and EBITDA in the range of EUR 190m and 160m; 3) additional net debt of EUR 997m.

3) Atlantia will grant SIAS a call option (to be exercised by September 2012) on its 99.98% stake in Autostrada Torino-Savona. The option price is 223m, implying an enterprise value of EUR 235m (debt as at June 30 of EUR 10m), or 7.8x 2011e EBITDA.

Conclusion & Action: Atlantia will benefit from huge capital gains, which we estimate in the range of EUR 470m, or 6% of the current market cap.; capital structure will be affected by additional debt of EUR 1bn, thus leading the group debt/EBITDA ratio above 4x. In a long term view, Atlantia is expected to benefit from an improvement in profitability (the EBITDA mg of the Chilean assets is above80% compared to 60% of Atlantia).

9

10

11

12

13

14

15

16


vvdsvdvsdy

ATLANTIA Stoxx Industrial Transportation (Rebased)Source: Factset

Analyst(s):

Francesco Previtera, Banca Akros [email protected]

+39 02 4344 4033

Francesco Di Gregorio Banca Akros

[email protected]

+39 02 4344 4217



Bayer Germany/Healthcare Analyser

Bayer (Hold)

Hold




Target price: EUR

Share price: EUR

Reuters/Bloomberg BAYG.DE/BAYN GR

Market capitalisation (EURm) 46,226Current N° of shares (m) 827Free float 100% Daily avg. no. trad. sh. 12 mth 3,638,547Daily avg. trad. vol. 12 mth (m) 185Price high 12 mth (EUR) 59.35Price low 12 mth (EUR) 36.81Abs. perf. 1 mth 4.96%Abs. perf. 3 mth 30.47%Abs. perf. 12 mth 1.64%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 35,088 36,421 36,264EBITDA (m) 6,286 6,879 6,518EBITDA margin 17.9% 18.9% 18.0%EBIT (m) 2,730 4,244 3,986EBIT margin 7.8% 11.7% 11.0%Net Profit (adj.)(m) 3,468 3,932 3,426ROCE 5.0% 7.9% 7.4%Net debt/(cash) (m) 8,993 7,015 5,907Net Debt/Equity 0.5 0.3 0.3Debt/EBITDA 1.4 1.0 0.9Int. cover(EBITDA/Fin. int) 6.2 8.3 8.2EV/Sales 1.7 1.5 1.6EV/EBITDA 9.6 7.8 8.9EV/EBITDA (adj.) 9.6 7.8 8.9EV/EBIT 22.2 12.7 14.6P/E (adj.) 13.2 10.4 13.5P/BV 2.4 2.0 2.2OpFCF yield 9.3% 7.9% 5.4%Dividend yield 2.7% 3.0% 2.6%EPS (adj.) 4.19 4.75 4.14BVPS 22.85 24.32 25.43DPS 1.50 1.66 1.45

Q411 Results Preview The facts: Bayer is going to publish its FY11 results on February 28th. Our analysis: Results 2011: We expect 2011 group sales to rise 4% to EUR36.42bn, a 7% increase in adjusted EBITDA to EUR7.60bn, while Core EPS should be up 13% to EUR4.75 (consensus: EUR36.46bn / EUR7.65bn / EUR4.82). Dividend 2011: Last Thursday, Bayer announced that its management proposes a dividend of EUR1.65 for 2011, which is in-line with our forecast and consensus of EUR1.66 and EUR1.65, respectively. Outlook 2012: We currently forecast group sales of EUR36.3bn, and underlying EBITDA of EUR6.9bn, which are significantly below current consensus expectations of sales of EUR37.3bn, and underlying EBITDA of EUR7.8bn. Our estimates are based on a recessionary scenario translating into a 0.4% group sales decline and a 190bps decline in group underlying EBITDA margin based on #1/ halving of MaterialScience EBITDA margin and #2/ a 70bps reduction in Healthcare Underlying EBITDA margin as a results of numerous new drug launches. Obviously, from today’s perspective our recessionary scenario should not materialize to the extent we had expected at MaterialScience. Therefore, BAY initial FY12 outlook should probably come above our expectations. Conclusion & Action: Beyond the Q4’11 results, Investors will focus on the FY12 outlook, especially at Material Science and Healthcare where intense launch activity is expected to impact margin next year. Given the recent news flow, a slowdown at MaterialScience should not materialize to the extent we had expected. Most likely, we should raise our FY12 estimates in the scope of the FY11 reporting. We stick to Hold for now.

35

40

45

50

55

60


vvdsvdvsdy

BAYER DAX30 (Rebased)Source: Factset

Analyst(s):

Edouard Aubery, Equinet Bank [email protected]

+49 69 5899 7439

EUR m Q4 2011e Q4 2010 % 2011 2010 %

Group Sales 9,084 9,012 1% 36,421 35,088 4%Healthcare 4,471 4,468 0% 17,045 16,913 1%Cropscience 1,709 1,653 3% 7,288 6,830 7%Materialscience 2,661 2,584 3% 10,897 10,154 7%Betaferon 289 313 -8% 1,125 1,206 -7%Yasmin 270 292 -8% 1,050 1,111 -5%Kogenate 248 245 1% 1,050 1,004 5%Nex av ar 180 189 -5% 700 705 -1%EBITDA (adj.) 1,532 1,689 -9% 7,604 7,101 7%Healthcare 1,132 1,138 -1% 4,654 4,405 6%Cropscience 186 270 -31% 1,567 1,293 21%Materialscience 243 297 -18% 1,308 1,356 -4%EPS Core (EUR) 0.90 0.95 -5% 4.75 4.19 13%

So urce: B ayer, equinet Research



Deutsche Post Germany/Industrial Transportation & Motorways Analyser

Deutsche Post (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg DPWGn.DE/DPW GR

Market capitalisation (EURm) 15,911Current N° of shares (m) 1,209Free float 69% Daily avg. no. trad. sh. 12 mth 4,859,755Daily avg. trad. vol. 12 mth (m) 58Price high 12 mth (EUR) 13.81Price low 12 mth (EUR) 9.13Abs. perf. 1 mth 2.81%Abs. perf. 3 mth 28.39%Abs. perf. 12 mth 0.50%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 51,481 52,986 53,255EBITDA (m) 3,131 3,740 3,638EBITDA margin 6.1% 7.1% 6.8%EBIT (m) 1,835 2,454 2,299EBIT margin 3.6% 4.6% 4.3%Net Profit (adj.)(m) 1,259 1,349 1,288ROCE 8.1% 8.9% 8.1%Net debt/(cash) (m) (1,382) (1,622) (1,736)Net Debt/Equity -0.1 -0.1 -0.1Debt/EBITDA -0.4 -0.4 -0.5Int. cover(EBITDA/Fin. int) (3.4) 6.9 7.6EV/Sales 0.4 0.3 0.4EV/EBITDA 6.0 4.7 5.3EV/EBITDA (adj.) 5.3 4.7 5.3EV/EBIT 10.2 7.2 8.4P/E (adj.) 12.2 10.6 12.4P/BV 1.5 1.3 1.4OpFCF yield 2.8% 6.9% 6.3%Dividend yield 4.9% 4.9% 4.9%EPS (adj.) 1.04 1.12 1.07BVPS 8.69 9.16 9.58DPS 0.65 0.65 0.65

Headwind from the German government The facts: German Economy Minister Philipp Roesler wants to foster competition on the country's postal market by limiting Deutsche Post AG's ability to set the prices for bulk mail, a spokeswoman for the ministry said Sunday. According to the spokeswoman, a new draft law for the postal market to be presented in the autumn foresees the Federal Network Agency, which oversees competition in German telecommunications, postal and electricity markets, to approve changes in the prices Deutsche Post can charge for bulk mails. "The goal is to strengthen competition in the market," the spokeswoman said, confirming a report in German weekly magazine Der Spiegel published Saturday. Our analysis: It is clearly negative that the German Government has the goal to strengthen competition in the bulk mail field. However, this would mean that DPW has to increase prices for bulk mail to attract competition. This should lead to higher profitability in the short term. Overall, the idea of the German government appears to be in an early stage and, in our opinion, the effect on DPW should not be significant. Conclusion & Action: We maintain our price target of EUR15.0 and reiterate our Buy recommendation. However, this news might burden the share price today.

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0


vvdsvdvsdy

DEUTSCHE POST DAX30 (Rebased)Source: Factset

Analyst(s):

Jochen Rothenbacher, CEFA, Equinet Bank [email protected]

+49 69 58997 415



Fresenius Germany/Healthcare Analyser

Fresenius (Accumulate)

Accumulate


87.00 86.00from Target Price: EUR


Target price: EUR

Share price: EUR

Reuters/Bloomberg FREG.DE/FRE GR

Market capitalisation (EURm) 12,665Current N° of shares (m) 162Free float 71% Daily avg. no. trad. sh. 12 mth 496,940Daily avg. trad. vol. 12 mth (m) 35Price high 12 mth (EUR) 79.71Price low 12 mth (EUR) 62.37Abs. perf. 1 mth 0.62%Abs. perf. 3 mth 15.74%Abs. perf. 12 mth 19.74%

Key financials (EUR) 12/11 12/12e 12/13eSales (m) 16,361 18,871 20,469EBITDA (m) 3,237 3,725 4,056EBITDA margin 19.8% 19.7% 19.8%EBIT (m) 2,563 2,962 3,211EBIT margin 15.7% 15.7% 15.7%Net Profit (adj.)(m) 770 868 948ROCE 7.6% 8.0% 8.5%Net debt/(cash) (m) 9,164 10,034 9,034Net Debt/Equity 0.8 0.8 0.6Debt/EBITDA 2.8 2.7 2.2Int. cover(EBITDA/Fin. int) 6.1 5.7 6.3EV/Sales 2.0 1.9 1.8EV/EBITDA 10.1 9.6 9.0EV/EBITDA (adj.) 10.1 9.6 9.0EV/EBIT 12.7 12.0 11.3P/E (adj.) 15.1 14.7 13.4P/BV 1.9 1.9 1.7OpFCF yield 8.0% -0.4% 10.1%Dividend yield 1.1% 1.2% 1.6%EPS (adj.) 4.73 5.32 5.81BVPS 36.68 40.96 45.54DPS 0.86 0.95 1.22

A good looking overall picture. We continue to like. Acc. The facts: Following last week FY11 reporting we update our model. Our analysis: A solid FY’12 guidance, and midterm targets upgrades at Kabi and Helios: FRE provided a robust FY12 outlook guiding for sales and net earnings to increase by 10-13% and 8-11% (constant fx), respectively. No impact of additional drug shortages is included in the guidance, which we consider a conservative scenario. Moreover, FRE has raised its guidance in five of the last six financial years. Beyond FY12, FRE is confident: mid-term guidance were upgraded at Kabi (EBIT margin of 18-21% vs. 18-20%) and Helios (FY’15 sales of EUR4.0-4.25bn vs. EUR3.5bn). Kabi does not look set to decelerate: Kabi continues to struggle to meet the strong demand in the US IV generic drug markets. Potentially some additional capacities could come on stream in FY13. The patent cliff fuels business opportunities, which could accelerate in FY13/14. In FY12, drug shortages look set to remain an issue. Beside IV generic, the growth momentum is strong in the Clinical Nutrition business (2nd largest Kabi business). Kabi is more than a growth story in N.A. (24% of sales: +7% organic in FY’11), momentum is solid in Europe (45% of sales: +6%) and very dynamic in APAC (20% of sales: +18%) and LatAm & Africa (11% of sales: +10%). Solid margins at Helios and the privatization deal flow continue to improve: Helios reported record 10.1% EBIT margin in FY11, up 80bps YoY. The consolidation of Rottweil and Helmstedt slightly burdened the margin, which, in the pre-existing portfolio stood at an excellent 10.6%. Overall the reimbursement environment has improved in FY12 vs. FY11 (FY12 DRG inflator at 1.5% vs 0.9% in FY11). The consolidation of Damp and KKD should weight on FY12 EBIT margin (we expect -50bps in FY12). Privatizations are picking up: the volume of privatized revenues increase from EUR230m in FY10 to EUR365m in FY11. YTD c. EUR400m revenues have been awarded or are pending! Vamed is back to growth and the Biotech question could be solved in FY12: After 4 quarters of decline YoY due to high comp and political unrest in the Middle East, sales surged by 31% in Q4’11. Order intake reached a record level, which bodes well for FY12. On the Biotech front, the CEO said that FY12 will be a crucial year for Biotech and expects to provide some news at a later point this year. Management initial objective to make out of Biotech the fifth business division of the conglomerate looks compromise to us as we struggle to understand how that business could turn into something else than a niche product manufacturer. Model adjustments and valuation: We have raised net profits estimate by 1% for FY’12. Our updated blended valuation approach (Historical multiples: EUR86, SOP: EUR83, DCF: EUR93) derive our new PT of EUR87. We keep our Accumulate rating. Conclusion & Action: We keep Accumulate and lift our PT to EUR87. For further details, please refer to the note we published this morning.

62

64

66

68

70

72

74

76

78

80


vvdsvdvsdy

FRESENIUS Stoxx Healthcare (Rebased)Source: Factset

Analyst(s):


+49 69 5899 7439



GBL Belgium/Financial Services Analyser

GBL (Accumulate)

Accumulate



from Hold

Target price: EUR

Share price: EUR

Reuters/Bloomberg GBLB.BR/GBLB BB

Market capitalisation (EURm) 8,934Current N° of shares (m) 161Free float 46% Daily avg. no. trad. sh. 12 mth 161,264Daily avg. trad. vol. 12 mth (m) 9Price high 12 mth (EUR) 67.87Price low 12 mth (EUR) 49.06Abs. perf. 1 mth -1.70%Abs. perf. 3 mth 12.18%Abs. perf. 12 mth -16.62%

NAV breakdown (EUR) NAV, m NAV

Total 3,952 31%

GDF-Suez 2,306 18%

Pernod-Ricard 2,003 16%

Imerys 1,934 15%

Lafarge 2,135 17%

PE, Arkema & oth. assets 1,195 9%

Gross Asset Value 13,524 105%

Net (debt)/cash -667 -5%

Taxes

Net Asset Value 12,857 100% Key financials (EUR) FY10 FY11e FY12e

NAVps 88.77 71.36 79.68

Discount to NAV -29.1% -27.8% -30.5%

EPS (reported) 4.13

ROE 4.5%

DPS 2.54 2.70 2.90

Dividend yield 4.0% 4.9% 5.2%

Net debt/NAV -5.2%

Net debt / Mcap -7.5%

Upgrade to Accumulate, TP raised to EUR 64 The facts: Today we are upgrading GBL from Hold to Accumulate and raise our target price to EUR 64, from EUR 61 previously. Our analysis: Our upgrade is based on higher share prices of underlying assets and higher valuation multiples and ESN – CM-CIC Research target prices, in combination with a discount to NAV that has increased to above the -30% level for more than a week (which has not occurred since 3Q09). Banking on discount to NAV mean reverting (using a 5-years average discount to target NAV of 26.8%), we compute a EUR 64 TP. Portfolio companies have released FY11 figures, confirming target prices and positive opinions for Total (Buy – TP EUR 54 – 29% upside potential) and Imerys (Accumulate – TP EUR 57 – 27% upside) and triggering higher target prices for Lafarge (Buy – TP upped 10% to EUR 45 – 30% upside) and Pernod-Ricard (Accumulate – TP upped 6% to EUR 83 – 7% upside). Only for GDF-Suez (Buy – TP down 5% to EUR 28 – 43% upside) and Suez Environnement (Hold – TP down 12% to EUR 13.50 – 32% upside) the FY11 release resulted in a downward review of the valuation). Please bear in mind that GBL is to release its FY11 figures next week, on Tuesday 6-Mar-11 after market (@ 5:40pm CET). Being a holding company, the publication of its annual results rarely is a share price trigger. The release however unveils often some (small) changes to the underlying portfolio that have barely impact on our SOTP valuation.

Source: Company data, Bloomberg, ESN – Bank Degroof Research

Conclusion & Action: Based on ESN Research TPs and recommendations for the respective underlying assets, we compute a target NAV of EUR 13.9bn. We derive a TP of EUR 64 and upgrade from Hold to Accumulate, amongst others due to the present excessive discount to NAV of above -30%.

vvdsvdvsdy

45

50

55

60

65

70


GBL BEL 20 (Rebased) Analyst(s):

Hans D'Haese, Bank Degroof [email protected]

+32 (0) 2 287 9223

discount to NAV (LHS) stock price (EUR, RHS) NAV (EUR, RHS)

Market cap.

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Total GDF-Suez Pernod-Ricard

Imerys Lafarge PE,Arkema &oth. assets

Net(debt)/cash

Total NAV

GBL-35%-33%-31%-29%-27%-25%-23%-21%-19%-17%-15%

Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12

NAV (discount)/premium 52 weeks rolling avg +/- 2 * St Dev

GBL

64

59

69

45

50

55

60

65

70

Feb-11 Aug-11 Feb-12 Aug-12

Target price Shaded: TP range applying 5-yr historical min/max discount on target NAV

-40%

-30%

-20%

-10%

0%03 04 05 06 07 08 09 10 11 12 13

30

60

90

120

150



Merck Germany/Healthcare Analyser

Merck (Reduce)

Reduce



from Hold

Target price: EUR

Share price: EUR

Reuters/Bloomberg MRCG.DE/MRK GR

Market capitalisation (EURm) 17,279Current N° of shares (m) 217Free float 29% Daily avg. no. trad. sh. 12 mth 465,608Daily avg. trad. vol. 12 mth (m) 33Price high 12 mth (EUR) 82.13Price low 12 mth (EUR) 56.82Abs. perf. 1 mth 2.82%Abs. perf. 3 mth 15.04%Abs. perf. 12 mth 22.81%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 9,291 10,237 10,432EBITDA (m) 2,371 2,650 2,643EBITDA margin 25.5% 25.9% 25.3%EBIT (m) 1,113 1,138 1,430EBIT margin 12.0% 11.1% 13.7%Net Profit (adj.)(m) 1,463 1,634 1,564ROCE 4.5% 4.4% 6.6%Net debt/(cash) (m) 4,267 2,576 1,637Net Debt/Equity 0.4 0.2 0.1Debt/EBITDA 1.8 1.0 0.6Int. cover(EBITDA/Fin. int) 9.4 9.1 12.6EV/Sales 2.0 2.0 2.0EV/EBITDA 7.9 7.9 7.8EV/EBITDA (adj.) 7.9 8.3 7.8EV/EBIT 16.9 18.3 14.3P/E (adj.) 8.9 10.2 11.0P/BV 1.3 1.6 1.5OpFCF yield -16.1% 11.7% 7.3%Dividend yield 1.6% 1.9% 2.2%EPS (adj.) 6.73 7.52 7.20BVPS 47.52 49.27 51.87DPS 1.25 1.50 1.75

It might not be a too bad timing to reduce exposure The facts: Today we D/G Merck to Reduce. Our analysis: Initiation of the restructuring program: Last Friday, Merck announced the initial presentation of its restructuring program to the supervisory board. The efficiency program “may include workforce reductions across all businesses and all regions”. “Recurring cost reductions will free up resources for investment in highly promising growth areas” in order to “address unprecedented market shifts, increasing competition in key product areas”. No concrete figures on the amount of the savings and implementation costs were given. High expectations might expose to disappointment: Probably no concrete figures will be disclosed in the FY’11 reporting. Earlier this year, MRK had already hinted that the restructuring details might come later than with the FY’11 results (March 6). In our understanding, the full picture should be given in 2 to 6 months from now, which might disappoint those who had hoped for a positive surprise next week. Morevover, given the huge challenges faced by the company at MerckSerono, we would not expect a massive slash in R&D which would hinder mid/long term growth prospects. Beside, as competition will intensify in the MS field, a drastic reduction in Marketing effort might not be the best way to defend the Rebif franchise. Upcoming competition should continue to weigh on sentiment for MerckSerono: Obviously, Novartis’ issue with Cladribine and the disappointing data of Sanofi’s Teriflunomide at the end of last year have eased somewhat the short term competitive pressure on Rebif (c. 30% of MerckSerono sales). Still with Biogen Idec’s BG-12, Daclizumab and BIB017, Sanofi’s Lemtrada, Roche’s Ocrelizumab and Active Biotech’s laquinimod, no less than 6 products could be filed in MS in the next 3 years! Beside, Sanofi/Regeneron’s Zaltrap could increase the competitive pressure on Erbitux in the treatment of metastatic colorectal cancer. The same is true for Liquid Cristals: MRK has spent a lot of time to address fears that the development of OLED TVs would hit its LC franchise (25% of MRK OR). According to MRK, mass production of OLED TVs faces huge technical challenges (lifetime of colors & high production costs). Hence, OLED TVs market penetration will be held back by high prices (industry observers see OLED TVs to represent 5% of large TV units sales by 2018 vs. 93% for LCD). In our view, the short term threat is limited, but the recent focus of Samsung (largest TV producers) on OLED technology should not be underestimated. Moreover, the success of MRK’s LC franchise in the last 2 years was driven by its new PS-VA technology. Competition is catching up: MRK’s PS-VA market share dropped from 100% to 60% in FY11. Model adjustments & valuation: We have moved away from our previous too pessimistic recessionary scenario and raised our estimates. We derive our new EUR75 PT from our ’13 SOP which also factor in EUR250m positive impact from the restructuring program. We downgrade to Reduce. Conclusion & Action: After MRK’s share price has surged by 33%, in the last 6 months, it might not be a too bad timing to Reduce exposure to MRK. For further detail, please refer to the note we published this morning.

55

60

65

70

75

80

85


vvdsvdvsdy

MERCK Stoxx Healthcare (Rebased)Source: Factset

Analyst(s):


+49 69 5899 7439



Telefonica Spain/Telecommunications Analyser

Telefonica (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg TEF.MC/TEF SM

Market capitalisation (EURm) 58,047Current N° of shares (m) 4,514Free float 89% Daily avg. no. trad. sh. 12 mth 50,326,434Daily avg. trad. vol. 12 mth (m) 766Price high 12 mth (EUR) 18.40Price low 12 mth (EUR) 12.69Abs. perf. 1 mth -2.58%Abs. perf. 3 mth -0.04%Abs. perf. 12 mth -28.56%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 60,737 62,574 62,930EBITDA (m) 25,777 20,021 22,682EBITDA margin 42.4% 32.0% 36.0%EBIT (m) 16,474 9,881 12,592EBIT margin 27.1% 15.8% 20.0%Net Profit (adj.)(m) 7,942 6,459 6,915ROCE 9.9% 10.0% 10.1%Net debt/(cash) (m) 54,623 56,058 55,866Net Debt/Equity 1.7 1.8 1.7Debt/EBITDA 2.1 2.8 2.5Int. cover(EBITDA/Fin. int) 9.7 7.0 7.6EV/Sales 2.2 1.9 1.8EV/EBITDA 5.1 5.9 5.0EV/EBITDA (adj.) 5.9 5.2 5.0EV/EBIT 8.0 12.0 9.0P/E (adj.) 9.6 9.4 8.4P/BV 3.1 2.6 2.4OpFCF yield 23.2% 21.1% 25.0%Dividend yield 10.9% 10.1% 10.1%EPS (adj.) 1.76 1.43 1.53BVPS 5.42 5.21 5.39DPS 1.40 1.30 1.30

Highlights from the conference call The facts: We highlight the following points from the analysts conference call held last Friday afternoon: Our analysis: Disposal of non-strategic assets: The company pointed mainly to non-strategic towers (such as in Mexico in 4Q’11), although no details have been given, shared networks and retail sakes such as in Portugal Telecom and ZON Multimedia (in addition to the recently divested Hispasat). Regarding other stakes, China Unicom and Telecom Italia are considered strategic (sale not contemplated). Debt reduction: During the first 2 months of 2012 debt has been reduced by EU1.5bn, of which EUR1.3bn comes from the restructuring process in Colombia (merger of Movistar Colombia with Colombia Telecom, the Colombian state contributing to the new company – which will be recapitalized). ND/EBITDA ratio comes to 2.40x (vs. 2.46x at Dec’11, and vs. 2.35x 2012 target). LatAm. In 2012, growth in Brazil (24% of EBITDA 11) is expected to pick up speed, leaning on client capturing and the quality of the latter. The company will update the estimated synergies in 1H’12. Spain: The trend during the first two months of 2012 continues weak, although marketing momentum continues improving. The company expects market share to become stable with the new positioning/tariffs and to reduce churn as well as marketing costs. Regarding costs, we highlight: 1) progressive reflection of the cost restructuring process in 2012 (EUR200m savings in personnel, according to the 2,356 reduction, i.e. 36% of the 6,500 included in the Employment Regulation Program; and 2) more rational policy in subsidising mobile telephony terminals (change that TEF believes will be undertaken by the rest of the operators). Europe: In 2012, the intention in UK is to recover the marketing momentum (stable market share), maintain the high exposure to added value clients and mobile data (margins in 4Q’11 penalised by the iPhone subsidy costs). In Germany, the intention is to continue outperforming the market and pointing to LTE as the driver. TEF Digital. A detailed update will be presented before 1Q’12 results. Conclusion: No big news, although we positively value the progressive debt reduction (visibility on the increased financial flexibility) and improving commercial momentum in Spain and UK. We are adjusting slightly our estimates but do not expect a large impact on fair value. Buy FV EUR17.8/share.

12

13

14

15

16

17

18

19


vvdsvdvsdy

TELEFONICA Stoxx Telecommunications (Rebased)Source: Factset

Analyst(s):

David Cabeza Jareño, Bankia Bolsa [email protected]

+34 91 4367818



Vodafone United Kingdom/Telecommunications Analyser

Vodafone (Accumulate)

Accumulate




Target price: GBp

Share price: GBp

Reuters/Bloomberg VOD.L/VOD LN

Market capitalisation (GBPm) 90,332Current N° of shares (m) 52,595Free float 100% Daily avg. no. trad. sh. 12 mth 91,217,492Daily avg. trad. vol. 12 mth (m) 155Price high 12 mth (GBp) 182.70Price low 12 mth (GBp) 155.05Abs. perf. 1 mth -2.55%Abs. perf. 3 mth 3.46%Abs. perf. 12 mth -0.87%

Key financials (GBP) 03/11 03/12e 03/13eSales (m) 45,884 46,573 47,452EBITDA (m) 14,670 14,576 14,629EBITDA margin 32.0% 31.3% 30.8%EBIT (m) 553 9,425 6,454EBIT margin 1.2% 20.2% 13.6%Net Profit (adj.)(m) 8,776 7,899 8,514ROCE 0.5% 9.8% 6.7%Net debt/(cash) (m) 29,858 25,449 25,803Net Debt/Equity 0.3 0.3 0.3Debt/EBITDA 2.0 1.7 1.8Int. cover(EBITDA/Fin. int) (16.7) 10.6 10.8EV/Sales 1.7 1.5 1.5EV/EBITDA 5.4 4.9 4.9EV/EBITDA (adj.) 5.4 4.9 4.9EV/EBIT nm 7.6 11.2P/E (adj.) 10.6 11.4 10.6P/BV 1.1 1.0 1.0OpFCF yield 11.9% 6.6% 10.5%Dividend yield 7.5% 7.9% 8.3%EPS (adj.) 16.69 15.02 16.19BVPS 166.47 168.60 171.26DPS 12.89 13.52 14.18

m-payment agreement with Visa The facts: Vodafone announced today a mobile-payment partnership with Visa. Our analysis: the partnership, which is announced within the Barcelona Mobile World Congress, it the first global alliance of this kind between a mobile operator and a credit card operator. The outcome will be a Vodafone-branded proposition, which will be available to all Vodafone 400m customer base, starting this year with Germany, the UK, Spain, the Netherland and Turkey. The “mobile wallet” is due to be based on Near-Field-Communication technology, leveraging on Vodafone SIM and handsets, along with Visa payment network and brand. The platform is said to be open to all partners in several industries, including retail, transportation and financial institution. The m-payment opportunity looks very interesting for mobile operators, giving access to a market with an impressive growth potential. IE Market Research Corporation expects mobile payment revenue to rise from USD 47.2bn in 2011 to USD 1.0tr in 2016, with an 83.7% CAGR. Conclusion & Action: positive strategic implications from an agreement giving access to a still untapped market potential.

140

145

150

155

160

165

170

175

180

185


vvdsvdvsdy

VODAFONE Stoxx Telecommunications (Rebased)Source: Factset

Analyst(s):

Andrea Devita, CFA,, Banca Akros [email protected]

+39 02 4344 4031



Volkswagen Germany/Automobiles & Parts Analyser

Volkswagen (Buy)

Buy



from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg VOWG_p.DE/VOW3 GR

Market capitalisation (EURm) 64,907Current N° of shares (m) 466Free float 48% Daily avg. no. trad. sh. 12 mth 1,429,200Daily avg. trad. vol. 12 mth (m) 176Price high 12 mth (EUR) 151.00Price low 12 mth (EUR) 88.54Abs. perf. 1 mth 2.24%Abs. perf. 3 mth 23.07%Abs. perf. 12 mth 23.83%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 126,875 159,337 175,611EBITDA (m) 14,892 20,344 20,832EBITDA margin 11.7% 12.8% 11.9%EBIT (m) 7,141 11,271 11,714EBIT margin 5.6% 7.1% 6.7%Net Profit (adj.)(m) 6,837 8,953 9,217ROCE 9.0% 11.4% 10.9%Net debt/(cash) (m) (18,639) (18,651) (20,834)Net Debt/Equity -0.4 -0.3 -0.3Debt/EBITDA -1.3 -0.9 -1.0Int. cover(EBITDA/Fin. int) 163.6 (2.9) (33.7)EV/Sales 0.2 0.2 0.2EV/EBITDA 2.1 1.6 2.0EV/EBITDA (adj.) 2.1 1.6 2.0EV/EBIT 4.4 2.8 3.5P/E (adj.) 8.0 6.0 7.0P/BV 1.2 0.9 0.9OpFCF yield 18.8% 10.4% 8.9%Dividend yield 1.6% 2.2% 2.1%EPS (adj.) 15.19 19.20 19.77BVPS 102.18 130.89 149.57DPS 2.20 3.00 2.97

Upgrade to Buy as the economic situation improves The facts: VW reported preliminary results for FY 2011 on Friday, which were broadly in line with expectations. No outlook was given for FY 2012 yet. We have nonetheless increased our estimates as we see the overall economic environment improving. We have raised our target price from EUR 145 to EUR 170 and upgrade Volkswagen to Buy. Our analysis: Revenues in Q4 2011 increased by 25% yoy to EUR 43.1bn. This was significantly higher than we and the market had expected. However, the majority of the deviation was most likely attributable to the first time consolidation of MAN, which we had not yet in our model. EBIT decreased by 1% yoy to EUR 2.3bn in Q4 2011. This was in line with expectations. MAN should have contributed negatively to the result due to ppa amortization. Additionally, VW is also said to have included some development costs for the new MQB platform in Q4 2011, which have also burdened the result. The new MQB platform will go into production in Q1 2012 and will in our view become the core earnings driver in the next years. Overall, without any further details on the results it is difficult to analyze the numbers any further. No outlook was given for FY 2012. Nonetheless, we have increased our estimates for FY 2012ff (EPS 2012e: +28% to EUR 19.77). This has two reasons:

1) We had based our estimates on a worldwide recessionary scenario until today. As we see the global economic environment improving, we have changed our economic base case towards a local recession in Europe, while the rest of the World should continue to grow.

2) Until to date we had not included MAN as a fully consolidated entity in our estimates. Despite an expected high level of PPA amortization, this should prove to be accretive to earnings.

Due to the increase of our estimates we have also increased our target price from EUR 145 to EUR 170. Conclusion & Action: Due to the increase of our estimates we upgrade our recommendation for VW from Accumulate to Buy. Volkswagen is a very interesting investment in our view, not only in the short term but especially in the long term.

70

80

90

100

110

120

130

140

150

160

Feb 11 Mrz 11 Apr 11 Mai 11 Jun 11 Jul 11 Aug 11 Sep 11 Okt 11 Nov 11 Dez 11 Jan 12 Feb 12

vvdsvdvsdy

VOLKSWAGEN Stoxx Automobiles & Parts (Rebased)Source: Factset

Analyst(s):

Tim Schuldt, CFA, Equinet Bank [email protected]

+49 69 5899 7433

Valuation based on mid-cycle earningsEUR m

Sustainable Revenue 160,987EBITA 10,606EBIT margin 6.6%EV /EBIT 7.8Target EV 82,836Industrial net debt -20,834Pension provisions 16,259Minorities 6,475Value peripheral Assets 13,528 Book ValueValue Financial Services 10,637Target market Cap 105,101# of shares 466Target Price excl. Discount 225Discount -55 25% discount for lack of voting rightsTarget Price 170

Source: equinet Research

Comment

2012e2012e

12x FY 2012e

Level of 2012

Level of 2012Level of 2012

Average 1998 - 2007

2012

Book Value



Aixtron Germany/Industrial Engineering Analyser

Aixtron (Reduce)

Reduce




Target price: EUR

Share price: EUR

Reuters/Bloomberg AIXG.DE/AIXA GR


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 784 605 324EBITDA (m) 289 172 37EBITDA margin 36.8% 28.4% 11.5%EBIT (m) 276 159 24EBIT margin 35.2% 26.3% 7.5%Net Profit (adj.)(m) 192 112 20ROCE 77.6% 42.0% 7.4%Net debt/(cash) (m) (385) (397) (449)Net Debt/Equity -0.6 -0.6 -0.7Debt/EBITDA -1.3 -2.3 -12.1Int. cover(EBITDA/Fin. int) (106.5) (81.7) (9.9)EV/Sales 3.0 1.0 2.5EV/EBITDA 8.2 3.4 22.1EV/EBITDA (adj.) 8.2 3.4 22.1EV/EBIT 8.6 3.7 33.8P/E (adj.) 14.6 9.0 nmP/BV 4.7 1.5 2.0OpFCF yield 3.2% 9.2% 5.2%Dividend yield 4.7% 2.7% 0.5%EPS (adj.) 1.89 1.10 0.19BVPS 5.90 6.41 6.26DPS 0.60 0.35 0.06

Shorties squeezed, but will fundamentals follow soon? The facts: We confirm our ‘Reduce’ rating, but upgrade our PT to EUR 11.5 (EUR 9) mainly as we include peer multiples that have significantly increased since our recent model review and as we changed our underlying USD/EUR rate from 1.40 to 1.35 for our planning horizon. We are well aware that the share price development might benefit from technical upside risks as short sellers might continue to be squeezed on speculations about a new Chinese subsidy scheme and on potential improvements as regards the over-capacity situation of the LED market. We continue to believe in a tough 2012 and a much improving 2013, the latter probably already reflected in the current share price to a large extent. FY11 figures are due on Thursday, March 1, 2012. Our analysis: China is obviously contemplating to subsidize LED products/ replacement retail prices to foster adoption. While this discussion is not new, we believe that it reduced AIXA short interest as at a first glance this looks like a relatively meaningful approach for much higher LED demand. On the other hand we see that 1/Chinese firms have still yield problems, 2/the Chinese industry consolidation process would be prolonged, but is probably not favourable, and 3/timing and amount of subsidies is unclear as well as 4/already 250-300 additional tools could be sufficient to meet Chinese home market demand. To put this into perspective: more than 300 tools were delivered to China in 2011 alone. AIXA has started to offer tool leasing, together with its partner Minsheng Financial Leasing, which should help to overcome credit tightness, but MOCVD operator and engineering know-how has still to be improved. We do not expect the leasing approach to generate a significant share of business soon. More interesting could be the GaN-on-Si technology that should reduce production cost significantly and help LED manufacturers to defend margins. A stable GaN-on-Si process could thus attract big names like GCL again that withdrew from the market in 2011 due to the LED strong price declines that jeopardized returns. 4Q11 preview

in EUR m 4Q11e 4Q11c delta 4Q10 yoy FY11e FY11c delta FY10 yoy

Order intake 52.5 n/a n/a 204.0 -74% 536.5 n/a n/a 748.3 -28%

Sales 134.5 133.3 1% 224.7 -40% 605.3 606.8 0% 783.8 -23%

EBIT 29.4 26.9 10% 86.0 -66% 159.2 160.7 -1% 275.5 -42%

EBIT margin 21.9% 20.2% +170bp 38.3% -2,640bp 26.3% 26.5% -20bp 35.2% -890bp

EPS [EUR] 0.21 0.21 0% 0.61 -65% 1.10 1.11 -1% 1.89 -42% Source: company data, equinet estimates, Thomson Financial

Falling prices may foster end consumer adoption and we believe orders should pick-up in 2H12 / 4Q12, but until then bookings should remain depressed which goes in line with recent statements from Veeco. AIXA’s rival guided for a c. 40% revenue drop in FY12 which might be as well applicable for the Herzogenrath based deposition specialist (FY12e sales of EUR 324m, down from EUR 605m). This should only allow for a FY12e EBIT margin of 7.5% as AIXA ramps up R&D (27.1% margin in FY11e). We expect order intakes to come in at EUR 50m on average for the 4Q11-2Q12/3Q12 time frame. The FY12 market development could be hampered by customer upgrade requests and used / grey market tools. Conclusion & Action: Confirm ‘Reduce’, new PT of EUR 11.5 (EUR 9).

5

10

15

20

25

30

35


vvdsvdvsdy

AIXTRON Tec Dax (Rebased)Source: Factset

Analyst(s):

Adrian Pehl, CFA, Equinet Bank [email protected]

+49 69 58997 438



Almirall Spain/Healthcare Analyser

Almirall (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg ALM.MC/ALM SM

Market capitalisation (EURm) 1,100Current N° of shares (m) 166Free float 29% Daily avg. no. trad. sh. 12 mth 194,032Daily avg. trad. vol. 12 mth (m) 1Price high 12 mth (EUR) 8.44Price low 12 mth (EUR) 4.73Abs. perf. 1 mth 24.91%Abs. perf. 3 mth 39.96%Abs. perf. 12 mth -19.66%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 882 781 699EBITDA (m) 216 164 139EBITDA margin 24.5% 21.0% 19.9%EBIT (m) 154 104 80EBIT margin 17.5% 13.3% 11.5%Net Profit (adj.)(m) 137 96 74ROCE 18.3% 11.5% 6.7%Net debt/(cash) (m) 20 (20) (100)Net Debt/Equity 0.0 0.0 -0.1Debt/EBITDA 0.1 -0.1 -0.7Int. cover(EBITDA/Fin. int) 18.2 19.6 47.8EV/Sales 1.3 1.1 1.4EV/EBITDA 5.3 5.2 7.2EV/EBITDA (adj.) 5.3 5.4 8.7EV/EBIT 7.5 8.3 12.4P/E (adj.) 8.3 9.2 14.8P/BV 1.4 1.0 1.2OpFCF yield 17.0% 10.1% 10.2%Dividend yield 5.0% 4.3% 3.3%EPS (adj.) 0.82 0.58 0.45BVPS 4.93 5.23 5.46DPS 0.33 0.29 0.22

TP reviewed after PADAC’s backing EKLIRA. 2011 Rslts. The facts: Following FDA’s Advisory Committee’s, PADAC, favourable recommendation on Eklira (aclidinium bromide 400mcg twice daily to treat COPD) we have increased our T.P. To EUR 9.3/share. Our analysis: Although the recommendations made by the PADAC are not binding for the FDA, these will be taken into account. Bearing in mind the favourable results, Almirall expects the FDA to announce its decision in 2Q’12. The favourable vote increases the possibilities of a positive outcome on behalf of the FDA. We also expect the EMA to follow suit mid-year. Eklira would be the second LAMA to reach the market (Spiriva the first). As a reference, Boheringer Ingelheim’s Tiotropium reached sales of USD4.1bn in 2010. The FDA extending the treatment of the drug in 2009, to reduce patients’ exacerbations with COPD, should continue improving sales. Our valuation includes only the marketing of Eklira (mono aclidinium bromide), without its combinations (ICS, formerol, etc.), or the rest of the respiratory pipeline. We have revised the success probabilities on the product up to 90% (previous 70%), affecting our valuation by a positive EUR0.6/share (+6.8%). Additionally, backing from PADAC could accelerate the closure of a license agreement on Eklira in Europe. Almirall’s respiratory pipeline will continue being a relevant future growth driver 2011 Results: The company has issued results slightly below our estimates at revenues (EUR 768m, -1.9%, vs. EUR 781m estimated, -11.5%), due to regulatory impact in 3Q11. Normalized Net profit came in line with estimates: EUR 97.9m, - 28.4%, vs. EUR 96.3m (-29.6% estimated). Non recurrent income related to Eklira will be relevant in 2012. Conclusion & Action: We have modified our fair value up to EUR9.3/share (+6,9%). reiterating our Buy recommendation. Almirall is our top pick within the sector in Spain.

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5


vvdsvdvsdy

ALMIRALL IGBM (Rebased)Source: Factset

Analyst(s):

Ana Isabel González García CIIA, Bankia Bolsa [email protected]

+34 91 436 78 09



Arcadis Netherlands/General Industrials Analyser

Arcadis (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg ARDS.AS/ARCAD NA


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 2,002 2,002 2,296EBITDA (m) 162 168 198EBITDA margin 8.1% 8.4% 8.6%EBIT (m) 128 135 161EBIT margin 6.4% 6.7% 7.0%Net Profit (adj.)(m) 78 77 95ROCE 11.9% 14.2% 14.0%Net debt/(cash) (m) 218 147 173Net Debt/Equity 0.5 0.3 0.3Debt/EBITDA 1.3 0.9 0.9Int. cover(EBITDA/Fin. int) 8.8 7.5 8.4EV/Sales 0.6 0.4 0.5EV/EBITDA 7.9 5.4 5.5EV/EBITDA (adj.) 7.9 5.4 5.5EV/EBIT 10.0 6.7 6.8P/E (adj.) 15.1 10.5 10.1P/BV 3.0 1.9 1.9OpFCF yield 8.5% 12.6% 1.2%Dividend yield 3.3% 3.4% 3.8%EPS (adj.) 1.15 1.15 1.41BVPS 5.83 6.52 7.30DPS 0.46 0.48 0.54

Strong underlying results The facts: Arcadis reported 4Q11 results this morning. Gross revenues increased 7% to EUR 576m, while net revenues increased 15% to 402m (our estimate 400m, consensus EUR 392m). Recurring EBITA increased 5% to EUR 41.7m, ahead of our estimate and consensus (EUR 40m). Recurring EBITA excludes EUR 4.8m acquisition costs for EC Harris, but includes restructuring costs of EUR 2.1m, carbon credits of EUR 0.3m and the positive effect of the sale of Brazilian energy projects of EUR 3.4m. Net profit came in at EUR 20.6m, while net operational profit increased 12% to 26.4m (our estimate 23m, consensus EUR 26.7m). Our analysis: Arcadis reported strong results in 4Q11. Net revenues were better than expected especially in the emerging markets and Europe, while below our estimates in the US (water). EBITA development was below our estimates in the Netherlands and US, but much higher than we expected in the emerging markets. In water the organic revenue decline eased somewhat in Q4. Arcadis expects that the trough in this market in the US is in sight and expects a recovery in the course of 2012, which we believe is positive. In environment the organic development of revenues eased somewhat, but is still very strong. The outlook for this segment continues to be good. In infra, the very strong development in Brazil and Chile more than offset the weak development in The Netherlands and Poland. Also in ths segment, the outlook continues to be positive. In buildings, Arcadis expects stable results in 2012. The order book is somewhat lower than in 2011. For 2012, Arcadis expects an increase of both revenues and results and guides for continued organic growth. Conclusion & Action: Arcadis reported strong underlying 4Q results. For 2012 Arcadis expects an increase in revenues and results and continued organic growth, which is in line with our estimates.

11

12

13

14

15

16

17

18


vvdsvdvsdy

ARCADIS Stoxx General Industrials (Rebased)Source: Factset

Analyst(s):

Edwin de Jong, SNS Securities [email protected]

+312 0 5508569



Bekaert Belgium/General Industrials Analyser

Bekaert (Hold)

Hold




Target price: EUR

Share price: EUR

Reuters/Bloomberg BEKB.BR/BEKB BB

Market capitalisation (EURm) 1,483Current N° of shares (m) 60Free float 61% Daily avg. no. trad. sh. 12 mth 284,989Daily avg. trad. vol. 12 mth (m) 14Price high 12 mth (EUR) 84.49Price low 12 mth (EUR) 23.95Abs. perf. 1 mth -22.07%Abs. perf. 3 mth -7.15%Abs. perf. 12 mth -66.56%

Key financials (EUR) 12/11 12/12e 12/13eSales (m) 3,340 3,367 3,527EBITDA (m) 477 248 402EBITDA margin 14.3% 7.4% 11.4%EBIT (m) 268 53 211EBIT margin 8.0% 1.6% 6.0%Net Profit (adj.)(m) 202 97 124ROCE 7.1% 5.0% 5.5%Net debt/(cash) (m) 860 933 959Net Debt/Equity 0.5 0.6 0.6Debt/EBITDA 1.8 3.8 2.4Int. cover(EBITDA/Fin. int) 7.2 3.1 5.0EV/Sales 0.7 0.7 0.7EV/EBITDA 4.9 9.8 6.1EV/EBITDA (adj.) 4.9 6.3 6.1EV/EBIT 8.8 46.1 11.6P/E (adj.) 7.4 15.3 11.9P/BV 0.9 0.9 0.9OpFCF yield 10.5% 7.5% 10.9%Dividend yield 4.7% 4.7% 4.9%EPS (adj.) 3.36 1.62 2.08BVPS 28.24 26.89 27.44DPS 1.17 1.17 1.20

Earnings and TP revisions post FY11 results The facts: We have further trimmed down our earnings for the coming years after the weaker than expected 2H11 results and comments from management at the analyst meeting of last Friday. Adjusted EPS for the years 2012-2014 were cut by 25.3%, 20.5% and 19.5%, respectively while the DCF fair value now stands at EUR 25.13 from EUR 28.37 prior earnings adjustments. Our analysis: The biggest negative surprises of the 2H11/FY11 reporting was the very poor performance recorded by the “matures” regions, starting with ENEA, which saw a 2H11 Rebit at EUR 12m against EUR 44m expected. EUR 9m of the shortfall are due negative FIFO impact, but the bulk is due to the losses made by the sawing wire and the stainless steel wire operations in Belgium. On top of that there were start up costs in Slovakia and Russia. In North America the performance was affected by a very weak 4Q11 (de-stocking at customers levels) and negative FIFO impacts. The cash flow generation was also worse than expected resulting into a net financial debt (NFD) at EUR 860m vs. EUR 815m expected.

Bekaert: estimates review(in EUR m) old Actual old new old new old new

Sales 3,313 3,340 3,379 3,367 3,555 3,527 3,742 3,712% change 0.8% -0.4% -0.8% -0.8%Rebit 308.5 280.9 216.2 187.5 254.9 233.2 297.5 269.2margin (%) 9.3% 8.4% 6.4% 5.6% 7.2% 6.6% 8.0% 7.3%% change -9.0% -13.3% -8.5% -9.5% -EMEA¹ 98.1 66.0 80.3 55.5 84.9 72.6 88.2 80.7 % change -32.7% -30.9% -14.5% -8.5% -North America 43.7 32.0 36.7 35.6 40.8 39.6 42.8 41.6 % change -26.7% -2.9% -2.8% -2.9% -Latin America 29.6 35.0 56.4 61.6 60.0 64.7 63.3 66.7 % change 18.4% 9.2% 7.9% 5.4% -Asia Pacific 209.2 224.0 102.9 94.9 119.3 106.3 148.2 130.2 % change 7.1% -7.8% -10.9% -12.1% - Corporate -72.0 -76.1 -60.0 -60.0 -50.0 -50.0 -45.0 -50.0 % change 5.7% 0.0% 0.0% 11.1%EBIT 288 268 141 53 233 211 276 247margin (%) 8.7% 8.0% 4.2% 1.6% 6.6% 6.0% 7.4% 6.7%Financial results -64 -19 -64 -87 -60 -86 -58 -86Associates 0 25 25 23 30 28 36 33Net result (group) 175 193 74 -1 140 108 172 136% change 10.3% -102.0% -22.6% -21.1%Net current result (group) 190 202 130 97 157 124 189 152% change 6.4% -25.3% -20.5% -19.5%Adj. EPS (in EUR) 3.16 3.36 2.17 1.62 2.61 2.08 3.15 2.53% change 6.4% -25.3% -20.5% -19.5%

Sources : Bekaert / Bank Degroof estimates¹ EMEA= Europe, the Middle East and Africa

2014e2011 2012e 2013e

Management does not see rapid improvement of the economic situation in its main markets and it is committed to implement as soon as possible the rightsizing of some of its activities to the new reality (more normal growth in China and tremendous over-capacities in sawing wire. We expect one-off costs of EUR 135m in FY12 in relation of the restructuring. Management also admitted that it will be challenging to stabilise the NFD this year. We now assume a NFD at EUR 933m at the end of FY12 (NFD/Rebitda of 2.45x). Conclusion & Action: The rightsizing of production capacities may take some time, particularly in Belgium. We do not anticipate to see real improvement in margin before next year. We still believe it is too early to turn positive on this share. HOLD.

vvdsvdvsdy

20

30

40

50

60

70

80

90


BEKAERT Stoxx General Industrials (Rebased) Analyst(s):

Bernard Hanssens, Bank Degroof [email protected]

+32 (0) 2 287 9689



DAB bank Germany/Financial Services Analyser

DAB bank (Hold)

Hold




Target price: EUR

Share price: EUR

Reuters/Bloomberg DRNG.DE/DRN GR

Market capitalisation (EURm) 307Current N° of shares (m) 83Free float 21% Daily avg. no. trad. sh. 12 mth 14,391Daily avg. trad. vol. 12 mth (m) 0Price high 12 mth (EUR) 4.65Price low 12 mth (EUR) 2.80Abs. perf. 1 mth 3.92%Abs. perf. 3 mth 17.78%Abs. perf. 12 mth -16.06%

Key financials (EUR) 12/10 12/11e 12/12eTotal Revenue (m) 151 144 145Pre-Provision Profit (PPP) (m) 32 26 26Operating profit (OP) 32 25 26Earnings Before Tax (m) 29 28 27Net Profit (adj.) (m) 16 19 18Shareholders Equity (m) 168 196 195Tangible BV (m) 148 176 175RWA (m) 970 1,019 1,069ROE (adj.) 10.7% 11.8% 10.5%Tier1 Ratio 8.5% 10.4% 9.9%Cost/Income 78.6% 82.2% 82.0%P/PPP 9.9 9.9 11.8P/E (adj.) 19.5 13.3 16.8P/BV 1.9 1.3 1.6P/NAV 2.2 1.4 1.8Dividend Yield 5.4% 6.8% 6.0%PPPPS 0.43 0.34 0.32EPS (adj.) 0.22 0.25 0.22BVPS 2.23 2.57 2.36NAVPS 1.97 2.31 2.11DPS 0.20 0.25 0.22

Weaker Q4 results expected (28.2.2012) The facts: We expect DAB bank to report weaker Q4 results tomorrow. Pretax profit should have declined by 9% yoy (-34% qoq) due to write-downs on Greek sovereign bonds. Underlying profit performance should have been solid with a slight decline of net interest and commission income which should have been more than offset by lower costs. We expect DAB to fully pay out its 2011 net income as dividend (DPS of EUR 0.25). As in previous years DAB will not give a full-year profit target at this point in time. Our analysis: Conclusion & Action: We stick to our Hold rating with a TP of EUR 3.40 as we do not see any share price triggers ahead. The dividend yield of 6% should however support the share price. We continue to prefer comdirect among the German online banks because of its higher customer growth rates.

2.6

2.8

3.0

3.2

3.4

3.6

3.8

4.0

4.2

4.4

4.6

Feb 11 Mrz 11 Apr 11 Mai 11 Jun 11 Jul 11 Aug 11 Sep 11 Okt 11 Nov 11 Dez 11 Jan 12 Feb 12

vvdsvdvsdy

DAB BANK Stoxx Financial Services (Rebased)Source: Factset

Analyst(s):

Philipp Häßler, CFA, Equinet Bank [email protected]

+49 69 58997 414

DAB bank - Q4 2011

P&L Figures (EUR '000) Q4 2011e Q3 2011 equinet qoq yoy Consensus*Net interest income 13,600 13,607 13,600 -0.1% -1.8% 13,589Commission Income 22,044 22,912 22,044 -3.8% -6.4% 21,963Trading prof it -3,000 -1,327 -3,000 126.1% -149.8% naOther operating prof it 500 465 500 7.5% -145.1% naCosts 28,700 29,227 28,700 -1.8% -15.3% 29,615Risk provisions 30 26 30 15.4% -92.7% naOther revenues 0 -330 0 -100.0% -100.0% naPretax Profit 4,414 6,660 4,414 -33.7% -9.3% 4,265Net Profit 3,090 4,253 3,090 -27.4% nm 3,077

Total revenues 33,144 35,327 33,144 -6.2% -21.7% naCIR 86.6% 82.7% 86.6% na na na

*Vara Research Source: equinet , DAB bank



Danieli Italy/Industrial Engineering Analyser

Danieli (Accumulate)

Accumulate




Target price: EUR

Share price: EUR

Reuters/Bloomberg DANI.MI/DAN IM


Key financials (EUR) 06/11 06/12e 06/13eSales (m) 3,129 2,888 3,041EBITDA (m) 386 315 348EBITDA margin 12.3% 10.9% 11.5%EBIT (m) 296 214 250EBIT margin 9.5% 7.4% 8.2%Net Profit (adj.)(m) 192 142 167ROCE 52.5% 30.7% 34.3%Net debt/(cash) (m) (879) (878) (900)Net Debt/Equity -0.7 -1.0 -0.8Debt/EBITDA -2.3 -2.8 -2.6Int. cover(EBITDA/Fin. int) 12.6 high highEV/Sales 0.1 0.1 0.1EV/EBITDA 0.9 1.2 1.0EV/EBITDA (adj.) 0.9 1.2 1.0EV/EBIT 1.2 1.8 1.4P/E (adj.) 8.1 11.5 9.7P/BV 1.3 1.8 1.5OpFCF yield 34.6% 13.8% 25.8%Dividend yield 1.7% 1.6% 1.6%EPS (adj.) 2.37 1.74 2.06BVPS 14.55 11.31 13.04DPS 0.33 0.33 0.33

H1 11/12 preview The facts: H1 11/12 results are due out today. We expect positive sales trend in the first part of the fiscal year and consequently the group should continue to show good operating margins.

DANIELI: H1 11/12 preview

H1 10/11a H1 11/12e % Chg Sales 1,405.2 1,480.0 +5.3% EBITDA 168.7 162.4 -3.7% % margin 12.0% 11.0% Source: Company data and Banca Akros estimates We expect an order book at the end of December around EUR 3.0bn, slightly lower than Q1 (EUR 3.2bn, -6.6%).

Conclusion & Action: we maintain our Accumulate recommendation while we are waiting to verify our estimates based on the results.

13

14

15

16

17

18

19

20

21

22

23


vvdsvdvsdy

DANIELI FTSE Italy All Share (Rebased)Source: Factset

Analyst(s):

Paola Saglietti, Banca Akros [email protected]

+39 02 4344 4287



Finmeccanica Italy/Aerospace & Defense Analyser

Finmeccanica (Accumulate)

Accumulate




Target price: EUR

Share price: EUR

Reuters/Bloomberg SIFI.MI/FNC IM


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 18,695 17,385 17,319EBITDA (m) 2,017 (232) 1,594EBITDA margin 10.8% nm 9.2%EBIT (m) 1,232 (1,444) 866EBIT margin 6.6% nm 5.0%Net Profit (adj.)(m) 723 (598) 338ROCE 11.7% -6.2% 7.1%Net debt/(cash) (m) 3,133 3,500 3,671Net Debt/Equity 0.4 0.6 0.6Debt/EBITDA 1.6 -15.1 2.3Int. cover(EBITDA/Fin. int) 5.7 2.2 4.7EV/Sales 0.4 0.3 0.3EV/EBITDA 3.9 nm 3.6EV/EBITDA (adj.) 3.4 11.4 3.6EV/EBIT 6.4 nm 6.7P/E (adj.) 6.8 nm 7.1P/BV 0.7 0.3 0.4OpFCF yield 11.1% -66.0% -1.1%Dividend yield 9.9% 0.0% 9.9%EPS (adj.) 1.25 (1.03) 0.58BVPS 11.79 9.19 9.64DPS 0.41 0.00 0.41

Investigations for alleged bribery in India and Canada The facts: Today’s “Corriere della Sera” writes that Indian authorities would have started an investigation for alleged bribery in reference to a contract to sell 12 Agusta-Westland AW-101 helicopters to the Indian forces for the transportation of government VIPs. Saturday’s “MF” writes that Canadian magistrates would be investigating over another case of alleged bribery concerning a contract for the supply of 10 AW-139 helicopters to the Ornge company. Our analysis: The first investigation regards a contract worth EUR 560m for the supply of 12 AW-101 helicopters in a deal worth EUR 560m for government transport. The second investigation regards a contract worth EUR 120m. Both contracts were signed when Giuseppe Orsi, the current CEO of FNC, was the head of Agusta-Westland. Conclusion & Action: We argue that the news is negative as investigations concern Agusta-Westland, the best asset of FNC in our view and because they might involve Mr. Orsi, FNC’s current CEO.

2

3

4

5

6

7

8

9

10

11


vvdsvdvsdy

FINMECCANICA Stoxx Aerospace & Defense (Rebased)Source: Factset

Analyst(s):

Gabriele Gambarova, Banca Akros [email protected]

+39 02 43 444 289



Gamesa Spain/Renewable Energy Analyser

Gamesa (Hold)

Hold



from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg GAM.MC/GAM SM

Market capitalisation (EURm) 665Current N° of shares (m) 247Free float 74% Daily avg. no. trad. sh. 12 mth 4,871,495Daily avg. trad. vol. 12 mth (m) 22Price high 12 mth (EUR) 7.46Price low 12 mth (EUR) 2.68Abs. perf. 1 mth -15.94%Abs. perf. 3 mth -10.36%Abs. perf. 12 mth -52.72%

Key financials (EUR) 12/11 12/12e 12/13eSales (m) 3,027 3,079 3,237EBITDA (m) 364 273 342EBITDA margin 12.0% 8.9% 10.6%EBIT (m) 131 66 116EBIT margin 4.3% 2.1% 3.6%Net Profit (adj.)(m) 51 11 49ROCE 4.6% 2.5% 3.9%Net debt/(cash) (m) 711 696 675Net Debt/Equity 0.4 0.4 0.4Debt/EBITDA 2.0 2.6 2.0Int. cover(EBITDA/Fin. int) 5.5 5.2 6.4EV/Sales 0.5 0.4 0.4EV/EBITDA 3.9 4.7 3.7EV/EBITDA (adj.) 3.8 4.5 3.6EV/EBIT 10.8 19.4 10.8P/E (adj.) 15.5 nm 13.6P/BV 0.5 0.4 0.4OpFCF yield -102.8% 44.2% 41.6%Dividend yield 0.7% 0.9% 1.1%EPS (adj.) 0.21 0.04 0.20BVPS 6.84 6.84 7.01DPS 0.02 0.02 0.03

Estimates and recommendation adjusted downwards The facts: Estimates and recommendation adjusted downward. Our analysis: Gamesa announced a lower MW guidance for 2012 and a lower range in EBIT margin for the wind turbine activity between 2% and 4%, vs. 4% reached in 2011 (low range of the 2011 guidance). The regulatory doubts in many countries affecting MW volumes, the industrial development of new wind turbines in new markets and strong competition causing negative pressure on prices, are reducing margins.

The main changes made to our estimates are included in the following table:

VARIATION IN GAMESA ESTIMATES: CONSOLIDATED P&L2012 e

Previous Current % chg Previous Current % chg Previous Current % chgSales 3,046 3,079 1% 3,192 3,237 1% 3,494 3,546 1%EBITDA 370 273 -26% 404 342 -16% 451 400 -11%EBIT 150 66 -56% 166 116 -30% 185 150 -19%Net Profit 71 11 -84% 80 49 -39% 97 76 -22%Sold MW 2,900 2,900 0% 3,100 3,100 0% 3,450 3,400 -1%EBIT mg WTG 5.03% 2.51% 5.08% 3.71% 5.10% 4.34%Bankia Bolsa estimates.

2013 e 2014 e

Conclusion & Action: Visibility for 2012 and 2013 is low, and our new valuation with lower margins comes to a new fair value of EUR3.25/share vs. previous EUR4.75/sh. Recommendation downgraded to Hold from Buy.

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5


vvdsvdvsdy

GAMESA IBEX 35 (Rebased)Source: Factset

Analyst(s):

Iñigo Recio Pascual, Bankia Bolsa [email protected]

+34 91 436 7814



M-real Finland/Basic Resources Analyser

M-real (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg MRLBV.HE/MRLBV FH

Market capitalisation (EURm) 712Current N° of shares (m) 328Free float 100% Daily avg. no. trad. sh. 12 mth 1,044,419Daily avg. trad. vol. 12 mth (m) 2Price high 12 mth (EUR) 3.21Price low 12 mth (EUR) 1.16Abs. perf. 1 mth 20.56%Abs. perf. 3 mth 73.60%Abs. perf. 12 mth -26.44%

Key financials (EUR) 12/11 12/12e 12/13eSales (m) 2,488 2,266 2,003EBITDA (m) 179 165 267EBITDA margin 7.2% 7.3% 13.3%EBIT (m) (21) 55 155EBIT margin nm 2.4% 7.7%Net Profit (adj.)(m) 10 (7) 66ROCE 2.9% 2.5% 7.3%Net debt/(cash) (m) 941 936 892Net Debt/Equity 1.3 1.3 1.1Debt/EBITDA 5.3 5.7 3.3Int. cover(EBITDA/Fin. int) 3.0 2.6 4.2EV/Sales 0.6 0.7 0.8EV/EBITDA 7.7 10.0 6.0EV/EBITDA (adj.) 5.3 10.0 6.0EV/EBIT nm 30.0 10.4P/E (adj.) 44.4 nm 10.8P/BV 0.6 1.0 0.9OpFCF yield 66.9% -4.7% 26.0%Dividend yield 0.0% 2.3% 4.6%EPS (adj.) 0.03 (0.02) 0.20BVPS 2.25 2.23 2.37DPS 0.00 0.05 0.10

Capacity closure ahead at Gohrsmühle The facts: On Friday, M-real announced that it has concluded the codetermination negotiations carried out at its Gohrsmühle mill in Germany. The next stage will involve the final closure of the mill’s capacity. Consequently, M-real’s capacity of uncoated fine paper will decrease by some 120,000 tonnes and that of specialty paper by some 70,000 tonnes. The company has conducted the related cost provisions already beforehand. However, M-real will still have minor production operations in Gohrsmühle and, in fact, it is trying to attract other companies in the area to conduct business utilising the infrastructure and machinery at the mill site. Our analysis: The capacity closure at Gohrsmühle is a step forward in M-real’s major structural transition. In its attempt to eliminate paper operations’ losses, the next phase after Gohrsmühle is completing the closure process of Alizay, France. Based on public statements, Alizay’s staff community has been quite unconditional in its demands and has, for example, required that the mill be sold to a party of their choice. In our view, it would be positive if the Alizay negotiations were completed during Q1 and if no major further costs arised. Conclusion & Action: We confirm our recommendation (Buy) and target price (EUR 2.70).

1.0

1.5

2.0

2.5

3.0

3.5


vvdsvdvsdy

M-REAL Stoxx Basic Resources (Rebased)Source: Factset

Analyst(s):

Henri Parkkinen, Pohjola [email protected]

+358 10 252 4409



RIB Software Germany/Software & Computer Services Analyser

RIB Software (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg RSTA.DE/RSTA GY


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 35 36 43EBITDA (m) 11 14 17EBITDA margin 30.8% 38.0% 38.8%EBIT (m) 8 11 12EBIT margin 22.8% 29.3% 28.8%Net Profit (adj.)(m) 8 8 10ROCE 21.1% 17.4% 17.3%Net debt/(cash) (m) (17) (99) (102)Net Debt/Equity -0.4 -0.7 -0.7Debt/EBITDA -1.6 -7.2 -6.1Int. cover(EBITDA/Fin. int) (261.5) (16.6) (17.3)EV/Sales 6.4 1.4 1.8EV/EBITDA 20.9 3.6 4.6EV/EBITDA (adj.) 15.4 3.6 4.6EV/EBIT 28.3 4.7 6.2P/E (adj.) 29.8 17.7 18.0P/BV 5.0 1.1 1.2OpFCF yield 0.7% 4.7% 5.9%Dividend yield 0.0% 0.0% 0.0%EPS (adj.) 0.28 0.21 0.25BVPS 1.65 3.44 3.69DPS 0.00 0.00 0.00

Solid Q4 2011 expected The facts: RIB is due to publish preliminary Q4 2011 results on the 28th of February 2012. The final report is due on the 22nd of March, 2012.

EURm Q4 2011e Q4 2010 yoy 2011e 2010 yoy Sales 9.6 9.0 7% 36.5 34.8 5% EBIT 2.8 2.2 26% 10.7 7.9 35% Net profit 2.8 1.3 108% 8.3 8.0 4% EPS (€)* 0.07 0.05 56% 0.21 0.28 -23% Source: Company data, equinet

Our analysis: For Q4 2011, we forecast a sales increase of 7% to EUR9.6m. Software sales should have been EUR4.7m. EBIT should come in at EUR2.8m up 26% yoy. We forecast a net profit of EUR of EUR2.8m. As a reminder RIB has net cash of more than EUR100m. EPS should increase by 50% to EUR0.07 from EUR0.05. Here, the capital increase has a dilutive impact. Conclusion & Action: We maintain our price target of EUR7.0 and reiterate our Buy recommendation.

3

4

5

6

7

8

9

10


vvdsvdvsdy

RIB SOFTWARE Tec Dax (Rebased)Source: Factset

Analyst(s):

Jochen Rothenbacher, CEFA, Equinet Bank [email protected]

+49 69 58997 415



SIAS Italy/Industrial Transportation & Motorways Analyser

SIAS (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg SIS.MI/SIS IM


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 929 1,006 1,074EBITDA (m) 525 575 621EBITDA margin 56.5% 57.2% 57.8%EBIT (m) 313 343 339EBIT margin 33.7% 34.1% 31.6%Net Profit (adj.)(m) 138 157 153ROCE 7.4% 8.1% 7.4%Net debt/(cash) (m) 1,372 1,472 1,467Net Debt/Equity 0.9 0.9 0.8Debt/EBITDA 2.6 2.6 2.4Int. cover(EBITDA/Fin. int) 6.6 7.4 7.7EV/Sales 2.8 2.3 2.2EV/EBITDA 5.0 4.1 3.8EV/EBITDA (adj.) 5.0 4.1 3.8EV/EBIT 8.4 6.8 7.1P/E (adj.) 11.9 8.4 8.9P/BV 1.2 0.9 0.9OpFCF yield 22.8% 24.8% 39.6%Dividend yield 5.0% 5.3% 5.6%EPS (adj.) 0.61 0.69 0.67BVPS 6.07 6.44 6.78DPS 0.30 0.32 0.34

Back to Italy The facts: Sias signed an agreement with Atlantia for the disposal of its 45.8% stake held in Autostrade Sud America for EUR 565m. At the same time, Sias signed a call option agreement for the acquisition of the Torino-Savona highway. Our analysis: This assets swap comes after Atlantia decided to exit from IGLI, the vehicle that controls c. 30% of Impregilo. Under the agreement, Atlantia will acquire from SIAS the 45.8% stake in Autostrade Sud America (ASA) for EUR 565m. The transaction will imply an enterprise value in the range of EUR 2.2bn for the 100% of ASA, considering EUR 997m debt. ASA generated EUR 147m EBITDA in 2011. Such a transaction would imply an EV/EBITDA of 15x (this compares with Sias 5.5x EV/EBITDA and 12.4x implicit multiple of the recent disposal of the Chilean assets of Cintra to ISA). The current 46% stake held by Sias is valued EUR 180m (book value), implying a capital gain in the range of EUR 380m, or 27% of the current market cap. The execution of the agreement will imply the discharge of c. EUR 180m of guarantees related to the Chilean activities, thus implying a total positive impact on the net financial position in the range of EUR 750m. As regards the Autostrada Torino-Savona, Atlantia will grant SIAS a call option (to be exercised by September 2012) on its 99.98% stake. The option price is 223m, implying an enterprise value of EUR 235m (debt as at June 30 of EUR 10m), or 7.8x 2011e EBITDA. Conclusion & Action: The disposal of the 46% stake of the Chilean assets at EUR 565m implies an additional value recognition of EUR 1.6/sh compared to our valuation that is assuming the 46% stake at book value of EUR 190m .

Although Sias will exit from a country with attractive growth rates, we positively assess the transaction, which should allow the group to reduce its leverage by c. 750m (we estimate a 2011e net debt of EUR 1.44bn, including ANAS debt).

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0


vvdsvdvsdy

SIAS Stoxx Industrial Transportation (Rebased)Source: Factset

Analyst(s):

Francesco Previtera, Banca Akros [email protected]

+39 02 4344 4033

Francesco Di Gregorio Banca Akros

[email protected]

+39 02 4344 4217



SMA Solar Technology Germany/Renewable Energy Analyser

SMA Solar Technology (Hold)

Hold



from Reduce

Target price: EUR

Share price: EUR

Reuters/Bloomberg S92G.DE/S92 GR


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 1,920 1,714 1,450EBITDA (m) 550 294 220EBITDA margin 28.7% 17.1% 15.2%EBIT (m) 517 243 161EBIT margin 26.9% 14.2% 11.1%Net Profit (adj.)(m) 365 173 113ROCE 62.1% 23.5% 13.4%Net debt/(cash) (m) (333) (193) (102)Net Debt/Equity -0.5 -0.2 -0.1Debt/EBITDA -0.6 -0.7 -0.5Int. cover(EBITDA/Fin. int) (422.9) (155.1) (226.3)EV/Sales 1.1 0.7 0.9EV/EBITDA 3.7 4.3 5.6EV/EBITDA (adj.) 3.7 4.3 5.6EV/EBIT 4.0 5.3 7.7P/E (adj.) 6.6 8.7 12.1P/BV 3.3 1.9 1.6OpFCF yield 16.0% 8.1% 9.6%Dividend yield 7.6% 4.6% 4.3%EPS (adj.) 10.52 4.98 3.26BVPS 20.99 22.97 24.43DPS 3.00 1.80 1.70

New PT set at EUR40 on German PV subsidy cut - Hold The facts: Last Thursday, German ministers Roesler and Roettgen published the cabinet draft on amended PV feed-in tariffs becoming effective for new installations from March 9th 2012 onwards. As a consequence, we have revised our forecasts (EPS12/13 cut by avg. –16%) and set our new PT at EUR40 (old: EUR43), in line with current market valuation. Recommendation is upgraded to Hold (old: Reduce). Our analysis: Key issues of the cabinet draft are 1) a one-time cut of 20-29% depending on system size, 2) a maximum of 85-90% (depending on system size) of generated electricity is applicable to the FiT scheme in order to stimulate captive consumption and PV market integration, 3) a continuous reduction of the FiT on a monthly basis by 0.15 ct/kWh to avoid pull-in effects as seen in Dec FY11 and 4) the implementation of statutory ordinances as a legislative tool to effectively adjust the EEG subsidies in a timely manner. The targeted corridor of annual PV capacity additions for FY12/13 is set to 2.5-3.5GW. All in all, we see the revised EEG as an effective measure to realign PV capacity growth with the targets set by the national renewable energy action plan. The demand gap arising from FiT amendments in PV key markets Germany and Italy (FY11: 60% global market share) is estimated at up to 7GW or 26% of the 27GW global capacity added in FY11. Given that most western PV manufacturers do not address the upcoming PV market China (First Solar may serve as an exception), growth opportunities appear even more subdued for FY12. Other markets like the US, India or Japan will most likely not provide sufficient growth dynamic to compensate for the downturn in Europe, in our view. Forecast & Model adjustment: To factor in the deteriorated market prospects in Europe, we have revised our FY12/13 shipment and product mix forecast. As indicated in course of the release of FY11’s prelims in January, S92 should however profit from demand generated by Germany’s 3GW of projects built in December and formally satisfied the FY11FiT requirements, but were not physically connected with an inverter to the grid. This catch-up effect will at least compensate for some decline in demand from new installations. With a -5% reduction in eFY12 MW shipments, revised EBIT margin estimates (FY12: 11.1% (old: 11.8%) FY13: 10.7% (old: 11.4%)), avg. FY12/13 EPS were cut by-16%. The new PT of EUR40 (old: EUR43) is derived by our DCF model. Conclusion & Action: With a current market valuation in line with our PT of EUR40, we upgrade our recommendation from Reduce to Hold.

30

40

50

60

70

80

90


vvdsvdvsdy

SMA SOLAR TECHNOLOGY Tec Dax (Rebased)Source: Factset

Analyst(s):

Stefan Freudenreich, CFA, Equinet Bank [email protected]

+49 69 58997 437



Sogefi Italy/Automobiles & Parts Analyser

Sogefi (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg SGFI.MI/SO IM


Key financials (EUR) 12/10 12/11e 12/12eSales (m) 925 1,158 1,363EBITDA (m) 87 108 140EBITDA margin 9.4% 9.3% 10.3%EBIT (m) 42 60 82EBIT margin 4.5% 5.1% 6.0%Net Profit (adj.)(m) 27 30 48ROCE 8.9% 7.8% 11.6%Net debt/(cash) (m) 165 300 293Net Debt/Equity 0.8 1.4 1.2Debt/EBITDA 1.9 2.8 2.1Int. cover(EBITDA/Fin. int) 9.2 8.5 8.6EV/Sales 0.5 0.5 0.4EV/EBITDA 5.4 5.0 4.0EV/EBITDA (adj.) 4.7 4.6 3.6EV/EBIT 11.1 9.1 6.8P/E (adj.) 10.8 7.6 5.4P/BV 1.5 1.2 1.2OpFCF yield 16.9% 24.9% 42.0%Dividend yield 5.8% 5.7% 9.0%EPS (adj.) 0.23 0.26 0.41BVPS 1.70 1.69 1.90DPS 0.13 0.13 0.20

We keep our positive stance on the stock The facts: We held a conference call with Sogefi’s management on Friday; here follow some topics:

• The company expects the European market to slow down in 2012, while all the other markets should post good growths; the top line should reach EUR 1,350/1,400m, marking a +1/5% Y/Y Vs the FY11 pro-forma revenues (EUR 1,335m).

• Operating margins are expected to remain flattish in 2012 as profitability in the European countries should be penalised by a lower plant utilisation rates, but margins in Latin America, the NAFTA area, China and India – structurally higher - should improve markedly.

• Sogefi is going to bear another EUR 10/15m of restructuring costs (~EUR 13m in the FY 11) to improve the efficiency of its European manufacturing structure.

• The tax rate, which was penalised by some loss carry forward write-offs in Q4 2011 and a still low level of profits in the US, should improve again reaching ~34% from FY11’s 40.4%.

• Sogefi is going to invest heavily in 2012: around EUR 75m will be spent to strengthen the company’s presence in markets such as Mexico, China and India. The newly-acquired Systèmes Moteurs alone should invest ~EUR 25m for the increase of the production capacity in 2012.

• The net working capital, which released ~EUR 20m of cash in 2011, should remain flat. The net financial debt should remain flat as well.

We have adjusted our estimates; the following table shows how.

2012 e 2013 e New Old ∆ New Old ∆ Revenues 1,363 1,311 3.9% 1,451 1,370 5.9% EBITDA 140.1 113.2 23.8% 154.1 131.1 17.5% EBIT 81.8 54.8 49.2% 94.3 72.5 30.1% Net Profit 39.4 27.5 43.4% 48.4 35.7 35.6% NFP (293.0) (275.3) (17.7) (263.4) (265.8) 2.4

2012 e 2013 e Akros Consensus ∆ Akros Consensus ∆ Revenues 1,363 1,350 1.0% 1,451 1,414 2.7% EBITDA 140.1 142.4 -1.6% 154.1 160.2 -3.8% EBIT 81.8 83.9 -2.6% 94.3 99.0 -4.7% Net Profit 39.4 45.7 -13.7% 48.4 49.4 -2.1%

Conclusion & Action: Based on our refreshed estimates and the peers’ multiples, Sogefi’s fair value is ~EUR 3.0. Our DCF model tells us that the fair value is even higher than that. We keep our Buy recommendation while keeping the EUR 2.8 target price unchanged.

1.8

2.0

2.2

2.4

2.6

2.8

3.0


vvdsvdvsdy

SOGEFI FTSE Italy STAR (Rebased)Source: Factset

Analyst(s):

Gabriele Gambarova, Banca Akros [email protected]

+39 02 43 444 289



Trevi Italy/Construction & Materials Analyser

Trevi (Hold)

Hold



Target price: EUR

Share price: EUR

Reuters/Bloomberg TFI.MI/TFI IM

Market capitalisation (EURm) 370Current N° of shares (m) 70Free float 44% Daily avg. no. trad. sh. 12 mth 240,158Daily avg. trad. vol. 12 mth (m) 2Price high 12 mth (EUR) 10.98Price low 12 mth (EUR) 4.81Abs. perf. 1 mth -11.20%Abs. perf. 3 mth 0.00%Abs. perf. 12 mth -43.88%

Key financials (EUR) 12/10 12/11e 12/12eSales (m) 953 1,019 1,056EBITDA (m) 137 123 128EBITDA margin 14.4% 12.1% 12.1%EBIT (m) 84 70 74EBIT margin 8.8% 6.9% 7.0%Net Profit (adj.)(m) 46 30 31ROCE 11.0% 8.6% 8.8%Net debt/(cash) (m) 395 404 404Net Debt/Equity 1.1 1.0 0.9Debt/EBITDA 2.9 3.3 3.2Int. cover(EBITDA/Fin. int) 8.8 7.3 6.8EV/Sales 1.2 0.8 0.8EV/EBITDA 8.6 6.9 6.8EV/EBITDA (adj.) 8.6 6.9 6.8EV/EBIT 14.1 12.0 11.7P/E (adj.) 14.9 11.1 11.9P/BV 1.9 0.9 0.9OpFCF yield 15.6% 22.5% 20.9%Dividend yield 2.5% 2.5% 2.5%EPS (adj.) 0.72 0.44 0.44BVPS 5.53 5.68 5.99DPS 0.13 0.13 0.13

Bleak perspectives for 2012 New reduced estimates for Q4 11 results: Q4 11 results could be decidedly lower than previous estimated due to a strong deterioration in the group’s business activities: 1) Petreven: operation problems in a plant in South America; 2) Trevi: delay in the foundations works for the underground in Copenhagen; 3) strong drop in the equipment demand due to the worldwide slowdown in the infrastructural projects. We believe that these events could have a negatively impact on margins; so we reduce our FY 11e EBITDA from EUR 13m (EBITDA margin 12.9%) to EUR 123.4m (EBITDA margin 12.1%). Furthermore, the geographical breakdown of group’s sales could impact on the group’s tax rate strongly than previous estimated (forecast tax rate moves from 38% to 41.5%). Bleak perspectives for 2012: owing to the uncertain economic scenario and the lack of available credit especially in Europe, the continue pressure on prices in the foundation equipment sector and the strong competitive scenario in the drilling equipment sector, we believe that the weak performance showed by the group in the final part of 2011 could continue in the first part of the current year. Therefore, we reduce our FY 12e EBITDA margin from 13.1% to 12.1%. Conclusion & Action: based on the foregoing considerations, in our opinion the stock has a low potential upside at the moment, so we confirm our Hold recommendation and we set a target price of EUR 6.0 per share calculated based on our DCF Model (WACC 8.0% and 1.5% perpetual growth rate).

4

5

6

7

8

9

10

11


vvdsvdvsdy

TREVI FTSE Italy All Share (Rebased)Source: Factset

Analyst(s):

Paola Saglietti, Banca Akros [email protected]

+39 02 4344 4287



Wilex Germany/Biotechnology Analyser

Wilex (Buy)

Buy




Target price: EUR

Share price: EUR

Reuters/Bloomberg WL6.DE/WL6 GR

Market capitalisation (EURm) 86Current N° of shares (m) 25Free float 33% Daily avg. no. trad. sh. 12 mth 18,270Daily avg. trad. vol. 12 mth (m) 0Price high 12 mth (EUR) 5.30Price low 12 mth (EUR) 3.06Abs. perf. 1 mth 0.00%Abs. perf. 3 mth -2.89%Abs. perf. 12 mth -6.00%

Key financials (EUR) 11/10 11/11e 11/12eSales (m) 1 11 14EBITDA (m) (23) (16) (13)EBITDA margin nm nm nmEBIT (m) (23) (16) (13)EBIT margin nm nm nmNet Profit (adj.)(m) (23) (17) (14)ROCE nm -117.6% -109.0%Net debt/(cash) (m) (2) 6 5Net Debt/Equity 1.5 -0.9 -0.5Debt/EBITDA 0.1 -0.4 -0.4Int. cover(EBITDA/Fin. int) 1,159.4 (30.5) (21.9)EV/Sales 61.0 7.7 6.4EV/EBITDA nm nm nmEV/EBITDA (adj.) nm nm nmEV/EBIT nm nm nmP/E (adj.) nm nm nmP/BV nm nm nmOpFCF yield -23.4% -10.4% -9.2%Dividend yield 0.0% 0.0% 0.0%EPS (adj.) (1.38) (0.80) (0.56)BVPS (0.08) (0.34) (0.45)DPS 0.00 0.00 0.00

FDA approves protocol amendment for ARISER The facts: This morning, Wilex announced that the FDA has approved protocol amendment needed to conduct the final analysis of the pivotal RENCAREX® Phase III trial. Our analysis: As a remainder, the change in ARISER protocol was still subject to formal clearance from the authorities. The company had already indicated that risk should be limited, as according to the management, these changes had already been discussed with the FDA/EMA. The company confirmed in todays’ press release that Final Disease Free Survival analysis and results are expected in Q4 2012. The study will continue as planned in order to assess overall survival Conclusion & Action: This positive news comes not as a surprise as WL6’ management already had given strong indication that the protocol amendment approval by the FDA should not be at risk. ARISER remains on track to deliver Phase III results in Q4’11. We reiterate our Buy rating and PT of EUR6.5.

2.5

3.0

3.5

4.0

4.5

5.0

5.5


vvdsvdvsdy

WILEX Stoxx Biotechnology (Rebased)Source: Factset

Analyst(s):


+49 69 5899 7439



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, Accumulate (or Add), Hold, Reduce and Sell (in short: B, A, H, R, 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 20% during the next 12 months time horizon

• Accumulate: the stock is expected to generate total return of 10% to 20% during the next 12 months time horizon

• Hold: the stock is expected to generate total return of 0% to 10% during the next 12 months time horizon.

• Reduce: the stock is expected to generate total return of 0% to -10% during the next 12 months time horizon

• Sell: the stock is expected to generate total return under -10% during the next 12 months time horizon

• Rating Suspended: the rating is suspended due to 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 or to a change of analyst covering the stock

• 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

ESN Ratings Breakdown

History of ESN Recommendation System Since 18 October 2004, the Members of ESN are using an Absolute Recommendation System (before was a Relative Rec. System) to rate any single stock under coverage. Since 4 August 2008, the ESN Rec. System has been amended as follow. • Time horizon changed to 12 months (it was 6 months) • Recommendations Total Return Range changed as below:

BEFORE

-15% 0% 5% 15%SELL REDUCE HOLD ACCUMULATE BUY

TODAY


BEFORE


BEFORE


TODAY


TODAY


Disclaimer: These reports have been prepared and issued by the Members of European Securities Network LLP (‘ESN’). ESN, its Members and their affiliates (and any director, officer or employee thereof), are neither liable for the proper and complete transmission of these reports nor for any delay in their receipt. Any unauthorised use, disclosure, copying, distribution, or taking of any action in reliance on these reports is strictly prohibited. The views and expressions in the reports are expressions of opinion and are given in good faith, but are subject to change without notice. These reports may not be reproduced in whole or in part or passed to third parties without permission. The information herein was obtained from various sources. ESN, its Members and their affiliates (and any director, officer or employee thereof) do not guarantee their accuracy or completeness, and neither ESN, nor its Members, nor its Members’ affiliates (nor any director, officer or employee thereof) shall be liable in respect of any errors or omissions or for any losses or consequential losses arising from such errors or omissions. Neither the information contained in these reports nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities (‘related investments’). These reports are prepared for the clients of the Members of ESN only. They do not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive any of these reports. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in these reports and should understand that statements regarding future prospects may not be realised. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in these reports. In addition, investors in securities such as ADRs, whose value are influenced by the currency of the underlying security, effectively assume currency risk. ESN, its Members and their affiliates may submit a pre-publication draft (without mentioning neither the recommendation nor the target price/fair value) of its reports for review to the Investor Relations Department of the issuer forming the subject of the report, solely for the purpose of correcting any inadvertent material inaccuracies. Like all members employees, analysts receive compensation that is impacted by overall firm profitability For further details about the 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 latest relevant published research on single stock or contact the analyst named on the front of the report/note. Research is available through your 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) For additional information and individual disclaimer 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.bankiabolsa.es regulated by CNMV - Comisión Nacional del Mercado de Valores

www.caixabi.pt regulated by the CMVM - Comissão do Mercado de Valores Mobiliários

www.cmcics.com regulated by the AMF - Autorité des marchés financiers

www.degroof.be regulated by the FSMA - Financial Services and Markets Authority

www.equinet-ag.de regulated by the BaFin - Bundesanstalt für Finanzdienstleistungsaufsicht

www.ibg.gr regulated by the HCMC - Hellenic Capital Market Commission

www.ncb.ie regulated by the Central Bank of Ireland

www.pohjola.com regulated by the Financial Supervision Authority

www.snssecurities.nl regulated by the AFM - Autoriteit Financiële Markten

Caixa-Banco de Investimento Rua Barata Salgueiro, 33-5 1269-050 Lisboa Portugal Phone: +351 21 389 68 00 Fax: +351 21 389 68 98

SNS Securities N.V. Nieuwezijds Voorburgwal 162 P.O.Box 235 1000 AE Amsterdam The Netherlands Phone: +31 20 550 8500 Fax: +31 20 626 8064

NCB Stockbrokers Ltd. 3 George Dock, Dublin 1 Ireland Phone: +353 1 611 5611 Fax: +353 1 611 5781

Investment Bank of Greece 24B, Kifisias Avenue 151 25 Marousi Greece Phone: +30 210 81 73 000 Fax: +30 210 68 96 325

Bank Degroof Rue de I’Industrie 44 1040 Brussels Belgium Phone: +32 2 287 91 16 Fax: +32 2 231 09 04

Equinet Bank AG Gräfstraße 97 60487 Frankfurt am Main Germany Phone:+49 69 – 58997 – 410 Fax:+49 69 – 58997 – 299

Pohjola Bank plc P.O.Box 308 FI- 00013 Pohjola Finland Phone: +358 10 252 011 Fax: +358 10 252 2703

CM - CIC Securities 6, avenue de Provence 75441 Paris Cedex 09 France Phone: +33 1 4596 7940 Fax: +33 1 4596 7748

Bankia Bolsa Serrano, 39 28001 Madrid Spain Phone: +34 91 436 7813 Fax: +34 91 577 3770

Banca Akros S.p.A. Viale Eginardo, 29 20149 Milano Italy Phone: +39 02 43 444 389 Fax: +39 02 43 444 302

Members of ESN (European Securities Network LLP)

ESN_120227

Documents

Transcript of ESN_120227