ESN Analyser Investment Research - Zonavalue.com Analyser Investment Research Page 1 of 63 Produced & Distributed by the Members of ESN (see last page of this report) ESN Analyser

ESN Analyser

Investment Research

Page 1 of 63

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

ESN Analyser

Investment Research

26 October 2016

ESN Top Picks

Roadshows

Corporate Events

Tactical Sector Views

RECOMMENDATION CHANGES

Ahlstrom downgraded to Neutral from Buy Q3 preview: Sharpest price rally already behind

Saipem downgraded to Neutral from Accumulate One-offs weigh on Q3 – 2017 targets revised downwards

Oriola-KD downgraded to Accumulate from Buy Additional investments weigh on cash flow

UPM-Kymmene downgraded to Neutral from Accumulate Still something positive for the rest of the year?

Nokian Tyres upgraded to Accumulate from Reduce Q3 preview: Turn to growth on the cards – Accumulate

Tieto upgraded to Accumulate from Neutral H2 earnings concentrated to Q4

NEWS BY SECTOR

AEROSPACE & DEFENSE

Airbus Group (Neutral) Q3-2016: very low net profit and cash halved, but 2017…

ALTERNATIVE ENERGY

Gamesa (Neutral) Shareholders approve merger with Siemens WP

AUTOMOBILES & PARTS

Fiat Chrysler Automobiles (Buy) Q3 results matched our estimates

Nokian Tyres (Accumulate) Q3 preview: Turn to growth on the cards – Accumulate

Sogefi (Buy) Positive feed-back from the conference call

Volkswagen (Buy) VW obtains approval of 2L TDI settlement in the US

BANKS

Banco Santander (Buy) 9M16 Earnings: EUR4.606m (-22.5% Y/Y)

Bankia (Accumulate) 9M16: EUR731m -10% Y/Y

BBVA (Buy) 3Q’16 Estimates: EUR874m (+11.4% Y/Y)

BASIC RESOURCES

Stora Enso (Accumulate) Target price upgraded to EUR 9.30

UPM-Kymmene (Neutral) Still something positive for the rest of the year?

FINANCIAL SERVICES

Sector News AM: net inflows c. EUR 5.8bn in September

FOOD & BEVERAGE

Heineken (Buy) Four comforting positives in 3Q16 trading update

GENERAL INDUSTRIALS

Ahlstrom (Neutral) Q3 preview: Sharpest price rally already behind

ESN Analyser

Investment Research

Page 2 of 63


HEALTHCARE

Amplifon (Accumulate) Q3 16 preview

Bayer (Buy) Q3 results: Covestro strong, slight guidance upgrade

Oriola-KD (Accumulate) Additional investments weigh on cash flow

Wilex (Buy) Research collaboration with Nordic Nanovector

HOUSEHOLD GOODS

Seb SA (Neutral) Q3 revenues in line with expectations

INDUSTRIAL ENGINEERING

Cargotec Corp (Accumulate) MacGregor a disappointment but not decisive

Exel Composites (Accumulate) Difficult market conditions continue – risks relating to dividend on the rise

Wärtsilä (Neutral) Weak ship market, stable big picture

INDUSTRIAL TRANSPORTATION

CAF (Accumulate) 9m’16 results

MATERIALS, CONSTRUCTION & INFRASTRUCTURE

Sector News Opportune quarter for guidance revisions

AENA (Neutral) Good results and cash generation

Eltel (Neutral) Q3 preview: Building confidence takes time

Ferrovial (Accumulate) Heathrow extension has been approved

Lehto (Accumulate) Q3 preview: A smaller quarter in store again

Ramirent (Accumulate) Q3 preview: Focus on the debut of the new CEO

SRV (Accumulate) Q3 preview: Significant earnings growth driven by residential construction

Vinci (Accumulate) 9M 2016: reported figures miss the consensus by EUR200m

MEDIA

Axel Springer (Neutral) Dull 9M results could put pressure on FY guidance

Gruppo Ed. L'Espresso (Accumulate) Q3 2016 Pre: negative trends expected to continue

Havas (Buy) Slightly disappointing Q3-16 but encouraging prospects!

Impresa (Buy) 3Q16 results below expectations

OIL & GAS PRODUCERS

Galp Energia (Accumulate) 3Q16 results: higher output and robust R&M

Neste Corporation (Neutral) Recommendation Neutral while waiting for decisions

OIL SERVICES

Saipem (Neutral) One-offs weigh on Q3 – 2017 targets revised downwards

PERSONAL GOODS

Kering (Neutral) Excellent Gucci and Saint Laurent performances in Q3

SOFTWARE & COMPUTER SERVICES

Reply (Neutral) Q3 2016 Pre: solid quarter expected

Tieto (Accumulate) H2 earnings concentrated to Q4

TomTom (Buy) Mixed news from French car markers in 3Q16

ESN Analyser

Investment Research

Page 3 of 63


TECHNOLOGY HARDWARE & EQUIPMENT

STMicroelectronics (Neutral) Q3 & 9M 16 preview

TELECOMMUNICATIONS

Sector News SPAIN: Orange, Strong growth in 3Q’16

Euskaltel (Buy) Possible agreement with Orange in terms of FttH

TRAVEL & LEISURE

Int. Airlines Group (Buy) Extension of Heathrow backed

UTILITIES

A2A (Buy) Brescia may reduce its quota

Fortum (Reduce) Attention on the CMD next

Iren (Buy) Salerno Energia Vendite due to be merged

Red Electrica De Espana (Accumulate) Results 9M16 in line with strategic targets

ESN Top Picks

Page 4 of 63


Blue Chips Top Picks

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

2 5 / 10 / 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y

pr i c e

( D i v .

Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s Eur o

S t ox x

AM ADEUS Spain Sof t ware & Comput er Services Long Buy 43.23 49.20 14% 18/ 08/ 2016 41.96 41.96 3 . 0 % 0.1%

CI E FI N . R I CHEM ONT Swit zerland Personal Goods Long Buy 65.15 76.00 17% 17/ 10/ 2016 66.30 66.30 - 1. 7 % -3.5%

HEI NEKEN Net herlands Food & Beverage Long Buy 79.00 100.00 27% 25/ 05/ 2016 83.08 82.56 - 4 . 3 % -7.2%

I NDI TEX Spain General Ret ailers Long Accumulat e 32.57 36.10 11% 18/ 08/ 2016 30.93 30.93 5 . 3 % 2.4%

J CDECAUX France Media Long Accumulat e 27.39 31.00 13% 17/ 10/ 2016 28.16 28.16 - 2 . 7 % -4.5%

KP N TELECOM Net herlands Telecommunicat ions Long Buy 2.94 3.55 21% 20/ 09/ 2016 2.82 2.82 4 . 0 % 0.9%

NORDEA Finland Banks Long Accumulat e 9.55 10.00 5% 03/ 08/ 2016 7.78 7.78 2 2 . 7 % 17.0%

S TORA ENS O Finland Basic Resources Long Accumulat e 8.63 9.30 8% 17/ 10/ 2016 8.16 8.16 5 . 8 % 4.0%

TECHNI P France Oil Services Long Buy 60.77 67.00 10% 18/ 10/ 2016 58.60 58.60 3 . 7 % 1.5% source: ESN Members’ estimates

M/S Caps Top Picks

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

2 5 / 10 / 2 0 16

Ta r ge t

P r i c e

Upsi de /

Downsi deEnt r y da t e

Ent r y

pr i c e

Ent r y pr i c e

( D i v . Adj )

Tot a l

Re t ur n

Ent r y To

Da t e

Re l . Cml . d

pe r f . v s

Eur o

S t ox x

ACERI NOX Spain Basic Resources Long Buy 11.82 14.00 18% 18/ 08/ 2016 11.71 11.71 0 . 9 % -2.1%

ALTRAN France Sof t ware & Comput er Services Long Buy 13.56 15.00 11% 17/ 10/ 2016 13.20 13.20 2 . 7 % 1.0%

CAF Spain Indust r ial Transport at ion Long Accumulat e 348.15 390.00 12% 18/ 08/ 2016 342.80 342.80 1. 6 % -1.4%

DEUTS CHE P FANDBRI EFBANK Germany Banks Long Buy 9.42 12.30 31% 22/ 08/ 2016 8.10 8.10 16 . 3 % 13.2%

FORFARM ERS Net herlands Food & Beverage Long Buy 6.85 8.30 21% 28/ 09/ 2016 6.48 6.48 5 . 7 % 2.7%

FUGRO Net herlands Oil Services Long Buy 16.35 19.00 16% 20/ 10/ 2016 15.56 15.56 5 . 1% 4.5%

J UM BO Greece General Ret ailers Long Buy 12.90 14.99 16% 21/ 10/ 2016 12.62 12.62 2 . 2 % 2.0%

NH HOTEL GROUP Spain Travel & Leisure Long Buy 4.07 6.80 67% 18/ 08/ 2016 4.00 4.00 1. 8 % -1.2%

NOS Port ugal Telecommunicat ions Long Buy 6.11 7.00 15% 17/ 10/ 2016 5.89 5.89 3 . 7 % 2.0%

OP AP Greece Travel & Leisure Long Buy 7.76 9.60 24% 28/ 06/ 2016 5.98 5.86 3 2 . 4 % 17.6%

RI B S OFTWARE Germany Sof t ware & Comput er Services Long Buy 12.41 12.00 -3% 20/ 06/ 2016 8.29 8.29 4 9 . 7 % 41.2%

TECHNOGYM It aly Personal Goods Long Buy 4.13 4.95 20% 15/ 06/ 2016 3.78 3.78 9 . 5 % -0.7%

THE NAVI GATOR COM P ANY Port ugal Basic Resources Long Buy 2.66 4.60 73% 22/ 06/ 2016 2.72 2.72 - 2 . 4 % -6.9%

YOOX NET- A- P ORTER It aly General Ret ailers Long Buy 27.70 31.30 13% 17/ 10/ 2016 27.82 27.82 - 0 . 4 % -2.2%

source: ESN Members’ estimates

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

Roadshows

Page 5 of 63


SUBJECT LOCATION EVENT DATE

TECHNOGYM Helsinki Cross-country Company Roadshow 26/10/2016

TECHNOGYM Amsterdam Cross-country Company Roadshow 27/10/2016

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

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

Mediaset España Madrid Local Company Roadshow 10/11/2016

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

Corporate Events

Page 6 of 63


Corporate Events today

Source: Precise

CompanyBloomberg

codeDate Event Type Description

ABERTIS ABE SM 26/10/16 Results Q3 2016 Results

ABE SM 26/10/16 Results Q3 2016 Earnings conference call

ACERINOX ACX SM 26/10/16 Results Q3 2016 Earnings conference call / Webcast

ACX SM 26/10/16 Results Q3 2016 Results

AIRBUS GROUP AIR FP 26/10/16 Results Q3 2016 Earnings conference call / Webcast

AIR FP 26/10/16 Results Q3 2016 Results

ALBIOMA ABIO FP 26/10/16 Results Q3 2016 Sales

AMPLIFON AMP IM 26/10/16 Results Q3 2016 Results

ASM INTERNATIONAL ASM NA 26/10/16 Results Q3 2016 Results

BANCO SANTANDER SAN SM 26/10/16 Results Q3 2016 Results

BANKIA BKIA SM 26/10/16 Results Q3 2016 Earnings conference call / Webcast

BKIA SM 26/10/16 Results Q3 2016 Results

BAYER BAYN GR 26/10/16 Results Q3 2016 Results

BAYN GR 26/10/16 Results Q3 2016 Earnings conference call / Webcast

BIC BB FP 26/10/16 Results Q3 2016 Results

BB FP 26/10/16 Results Q3 2016 Earnings conference call

BPI BPI PL 26/10/16 Results Q3 2016 Press conference

BPI PL 26/10/16 Results Q3 2016 Results

CARGOTEC CORP CGCBV FH 26/10/16 Analyst Meeting Q3 2016 Press & analyst meeting

CRAMO CRA1V FH 26/10/16 Results Q3 2016 Results

EBRO FOODS EBRO SM 26/10/16 Results Q3 2016 Results

EDITORIALE L'ESPRESSO ES IM 26/10/16 Results Q3 2016 Results

ENCE ENC SM 26/10/16 Results Q3 2016 Results

EXEL COMPOSITES EXL1V FH 26/10/16 Analyst Meeting Q3 2016 Press & analyst meeting

FINNAIR FIA1S FH 26/10/16 Results Q3 2016 Results

HEINEKEN HEIA NA 26/10/16 Trading Update Q3 2016 Trading statement

HUHTAMÄKI HUH1V FH 26/10/16 Results Q3 2016 Results

IBERDROLA IBE SM 26/10/16 Results Q3 2016 Earnings conference call

IBE SM 26/10/16 Results Q3 2016 Results

INGENICO ING FP 26/10/16 Trading Update Q3 2016 Sales conference call

ING FP 26/10/16 Trading Update Q3 2016 Sales

IPSOS IPS FP 26/10/16 Trading Update Q3 2016 Sales

KESKO KESBV FH 26/10/16 Results Q3 2016 Results

KONE KNEBV FH 26/10/16 Results Q3 2016 Analyst conference call / Webcast {simultaneous}

KNEBV FH 26/10/16 Results Q3 2016 Press conference {Finnish}

KNEBV FH 26/10/16 Analyst Meeting Q3 2016 Analyst meeting {English}

KONECRANES KCR1V FH 26/10/16 Results Q3 2016 Earnings conference call / Webcast {simultaneous}

KCR1V FH 26/10/16 Results Q3 2016 Results

KCR1V FH 26/10/16 Analyst Meeting Q3 2016 Press & analyst meeting

KORIAN KORI FP 26/10/16 Trading Update Q3 2016 Sales

LASSILA & TIKANOJA LAT1V FH 26/10/16 Results Q3 2016 Results

LAT1V FH 26/10/16 Analyst Meeting Q3 2016 Analyst meeting / Webcast

LISI FII FP 26/10/16 Trading Update Q3 2016 Sales

MEDIASET ESPANA TL5 SM 26/10/16 Results Q3 2016 Earnings conference call / Webcast

TL5 SM 26/10/16 Results Q3 2016 Results

NORDEA NDA1V FH 26/10/16 Results Q3 2016 Earnings conference call

NDA1V FH 26/10/16 Results Q3 2016 Press conference / Webcast

NDA1V FH 26/10/16 Results Q3 2016 Results

VAISALA VAIAS FH 26/10/16 Results Q3 2016 Results

VISIATIV ALVIV FP 26/10/16 Trading Update Q3 2016 Sales

ESN Tactical Sector Views

Page 7 of 63


Tactical Sector Allocation Matrix July 2016

SectorCurrent Tactical

ViewAction

Previous

Tactical View

Stoxx 600

Weighting

LATEST REVIEW

DATE

Automobiles & Parts + upgrade = 3% Jul-16

Banks - - 10% Jul-16

Basic Resources = = 2% Jul-16

Chemicals = = 5% Jul-16

Construction & Materials + + 3% Jul-16

Financial Services - dow ngrade = 2% Jul-16

Food & Beverage + + 7% Jul-16

Healthcare + upgrade = 14% Jul-16

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

Insurance - dow ngrade + 6% Jul-16

Media - dow ngrade = 3% Jul-16

Oil & Gas = = 5% Jul-16

Personal & Household Goods + + 9% Jul-16

Real Estate + upgrade - 2% Jul-16

Retail - dow ngrade = 3% Jul-16

Technology + upgrade = 4% Jul-16

Telecommunications = dow ngrade + 5% Jul-16

Travel & Leisure + + 2% Jul-16

Utilities + upgrade - 4% Jul-16

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

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

fundamental view of the relevant ESN sector analyst team

Page 8 of 63


Airbus Group

France/Aerospace & Defense Analyser

AEROSPACE & DEFENSE

Airbus Group (Neutral) Q3-2016: very low net profit and cash halved, but 2017…

Q3-2016: very low net profit and cash halved, but 2017…

The facts: As expected Airbus’ results were weak, for the P&L and the balance

sheet structure. The balance sheet deteriorated mainly due to the increase in

inventories, which is logical given the ongoing industrial ramp-up (change in WCR

+EUR4.4bn), and the share buyback -EUR736m. Revenues and EBIT by division:

Airbus: EUR10,450m +4%; EUR354m -26%

Airbus Helicopters: EUR1,595m +8%; EUR56m

Airbus Defense & Space: EUR2,274m -20% (changes of scope); EUR105m

HQ/Elim.: EUR(369)m; EUR(8)m

Airbus Group (consol data): EUR13,950m -9%; EBIT EUR507m -30%

Our analysis: Several headwinds on revenues and margins and some

deconsolidation resulted in Q3 reported EBIT of EUR507m -30% (below our

estimate of EUR640m).

Net cash of EUR5.6bn, vs. EUR10bn at 30 Dec. 2015 and EUR7.8bn at 30 Sept.

2015. As expected, the cash burn in Q3 was EUR3bn, twice as high as in Q3-2015.

Restoring this cash is set to occur through the deliveries concentrated in Q4

(destocking of around 20 A320NEO if the engines arrive, deliveries from the A350

final assembly line).

There was a slight change to guidance, relating to the financing of sales, itself due

to problems on ECA financing, hence Airbus excluded this point from guidance. In

sum, this means that the balance sheet could remain deteriorated compared to

initial expectations.

Conclusion & Action: The group maintained its EBIT guidance, but it is

stretched. We have to look further ahead and note that 2017 will be a good year,

with double-digit earnings growth. The environment is still good and there is

nothing in IATA figures that indicate that the slightest of downturns is underway.

Multiples are slightly high, but there is no reason why Airbus should correct

lastingly.

Analyst(s):

Agnès Blazy, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 67

Neutral

53.39

closing price as of 25/10/2016

53.00

Target Price unchanged

Recommendation unchanged

Target price: EUR

Share price: EUR

Reuters/Bloomberg AIR.PA/AIR FP

Market capitalisation (EURm) 41,253

Current N° of shares (m) 773

Free float 70%

Daily avg. no. trad. sh. 12 mth 2,290

Daily avg. trad. vol. 12 mth (m) 174,961

Price high 12 mth (EUR) 68.44

Price low 12 mth (EUR) 48.47

Abs. perf. 1 mth -0.78%

Abs. perf. 3 mth 4.52%


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

Sales (m) 64,450 63,206 65,171

EBITDA (m) 7,015 6,552 7,165

EBITDA margin 10.9% 10.4% 11.0%

EBIT (m) 4,062 3,929 4,390

EBIT margin 6.3% 6.2% 6.7%

Net Profit (adj.)(m) 2,696 2,699 3,055

ROCE -284.1% 54.7% 54.5%

Net debt/(cash) (m) 1,636 2,542 (567)

Net Debt/Equity 0.3 0.2 0.0

Debt/EBITDA 0.2 0.4 -0.1

Int. cover(EBITDA/Fin. int) 19.1 20.9 27.2

EV/Sales 0.9 0.8 0.7

EV/EBITDA 8.1 7.7 6.6

EV/EBITDA (adj.) 8.1 7.7 6.6

EV/EBIT 14.0 12.8 10.8

P/E (adj.) 18.1 15.3 13.5

P/BV 8.2 3.7 2.8

OpFCF yield 3.3% -8.1% 5.9%

Dividend yield 2.4% 2.6% 2.7%

EPS (adj.) 3.43 3.49 3.95

BVPS 7.60 14.36 19.17

DPS 1.30 1.37 1.43

48

50

52

54

56

58

60

62

64

66

68

70

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

vvdsvdvsdy

AIRBUS GROUP Stoxx Aerospace & Defense (Rebased)Source: Factset

Shareholders: SOGEPA- French State 12%; GZBV-

German State 11%; SEPI-Spain 4%;

Treasury shares 0.95%; Employees 2%;

Page 9 of 63


Gamesa

Spain/Alternative Energy Analyser

ALTERNATIVE ENERGY

Gamesa (Neutral) Q3-2016: very low net profit and cash halved, but 2017…

Shareholders approve merger with Siemens WP

The facts: Gamesa’s shareholders yesterday approved the merger with Siemens

Wind Power.

Our analysis: Gamesa held an EGM yesterday, ratifying the agreements required

to carry out the merger with Siemens Wind Power.

With this operation, Gamesa integrates Siemens’ wind activities via a share

exchange (new shares to be issued by Gamesa). Following this transaction,

Siemens would hold 59% of the new company.

Conclusion: Apart from results, the focus i son the performance of upcoming

milestones in the merger process with Siemens Wind Power. The operation is

subject to the approval of the Anti-Trust Tribune and the conformation on behalf

of the CNMV that Siemens will not have to carry out a mandatory takeover bid

following the merger. This operation is expected to be closed in 1Q’17.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Neutral

21.53


20.20



Target price: EUR

Share price: EUR

Reuters/Bloomberg GAM.MC/GAM SM



Free float 69%









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

EBITDA (m) 520 689 743

EBITDA margin 14.8% 15.9% 15.5%

EBIT (m) 323 440 482

EBIT margin 9.2% 10.1% 10.1%

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

ROCE 26.5% 32.0% 30.6%

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

Net Debt/Equity -0.2 -0.2 -0.3

Debt/EBITDA -0.6 -0.6 -0.7


EV/Sales 1.1 1.2 1.1

EV/EBITDA 7.4 7.7 7.0

EV/EBITDA (adj.) 7.4 7.7 7.0

EV/EBIT 11.9 12.1 10.9

P/E (adj.) 24.9 22.0 19.8

P/BV 2.9 3.4 3.0

OpFCF yield 4.0% 3.0% 2.9%


EPS (adj.) 0.64 0.98 1.09

BVPS 5.47 6.28 7.12

DPS 0.15 0.24 0.25

10

12

14

16

18

20

22


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GAMESA IBEX 35 (Rebased)Source: Factset

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

Norges Bank 3%;

Page 10 of 63


Fiat Chrysler Automobiles

Italy/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Fiat Chrysler Automobiles (Buy) Shareholders approve merger with Siemens WP

Q3 results matched our estimates

The facts: Yesterday, FCA released bang-in-line Q3 results; the company

improved its FY16 guidance for Adj. EBIT (to ">EUR 5.8bn" from ">EUR 5.5bn")

and Adj. Net Profit (to ">EUR 2.3bn" from ">2.0bn"), while keeping the revenues

(">EUR 112bn") and Net Industrial Debt guidance ("<EUR 5.0bn") unchanged.

Our analysis: Q3 revenues hit EUR 26.8bn (-1% Y/Y), while Adj. EBIT was EUR

1.5bn (+29% Y/Y), not far from our and consensus' estimates (~EUR 1.5/1.4bn);

Adj. net profit (EUR 740m, x3.5 Y/Y) beat our and consensus' estimates (EUR

609/557m). Net Industrial Debt (~EUR 5.5bn at the end of June) worsened to

~EUR 6.5bn, not far from our and consensus estimates (EUR 6.7/6.3bn). Here

follow some details:

- NAFTA operations did well with Adj. EBIT reaching EUR 1.28bn (+8% Y/Y)

and a 7.6% margin (+90 bps Y/Y), in line with our assumptions (7.6%).

- In LAT AM, Adj. EBIT was EUR -16m (EUR +28m in Q3 2015), worse than

expected (EUR +21m) due to adverse market conditions.

- In APAC, Adj. EBIT reached EUR 21m (EUR -83m in Q3 2015), missing our

estimate (EUR 42m); the Chinese JVs are ramping up fast.

- In EMEA, Adj. EBIT (EUR 104m, x4.2 Y/Y at 2.0% of revenues, +170 b.ps)

was in line with our estimates, thanks to higher volumes and better mix; the

effect of the new Alfa Romeo "Giulia" will be felt from Q4 onwards.

- Maserati Adj. EBIT (EUR 103m, x8.6 Y/Y) beat our estimates (EUR 74m)

thanks to the new "Levante" SUV, which had an excellent start with 18 K

orders collected and ~5 K units delivered in Q3.

Here follow a few more topics from the conference call:

- FCA did not improve the FY16 Net Industrial Debt guidance because of the

Brazilian Real revaluation: FCA has sizeable debt positions in BRL.

- Competition in NAFTA has increased, but market conditions remain

healthy; FCA goes on with its plan to focus the U.S. production capacity on

high value-added vehicles with the aim to reach a double-digit Adj. EBIT

margin in 2018.

- The Brazilian market is expected to flatten in Q4 and rebound in FY17.

- On the asset disposal front (components business), the CEO didn't confirm

the rumours around Samsung; anyway, no news are expected in Q4 2016.

Following the Q3 results release, we have tuned our estimates.

EUR m 2016 e 2017 e

New Old Δ New Old Δ

Revenues 111,698 114,438 -2.4% 118,775 118,606 0.1%

Adjusted EBIT 6,447 6,404 0.7% 7,093 6,860 3.4%

As a % of revenues 5.8% 5.6%

6.0% 5.8%

Net Profit (Adjusted) 2,817 2,699 4.4% 3,390 3,279 3.4%

NID 4,931 4,700 232 3,151 3,300 (149)

Conclusion & Action: Q3 results were in line and the investment case has not

changed in our view: FCA remains a cheap stock without particular triggers

(M&A) in the short term. FCA trades at ~3.6x in terms of P/E (under US GAAP)

when GM and Ford trade on average at ~6.2x.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Buy

5.95


10.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg FCHA.MI/FCA IM


Current N° of shares (m) 1,507

Free float 59%









Sales (m) 113,191 111,698 118,775

EBITDA (m) 9,059 11,928 13,672

EBITDA margin 8.0% 10.7% 11.5%

EBIT (m) 3,098 5,648 7,093

EBIT margin 2.7% 5.1% 6.0%

Net Profit (adj.)(m) 1,787 2,817 3,390

ROCE 7.4% 8.7% 9.2%

Net debt/(cash) (m) 5,910 4,931 3,151


Debt/EBITDA 0.7 0.4 0.2


EV/Sales 0.2 0.2 0.1

EV/EBITDA 2.6 1.6 1.2

EV/EBITDA (adj.) 2.1 1.5 1.2

EV/EBIT 7.7 3.3 2.4

P/E (adj.) 7.2 3.2 2.6

P/BV 0.8 0.5 0.4

OpFCF yield -24.1% -3.8% 19.9%


EPS (adj.) 1.19 1.87 2.25

BVPS 10.68 12.20 14.45

DPS 0.00 0.00 0.00

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

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

vvdsvdvsdy

FIAT CHRYSLER AUTOMOBILES Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: EXOR 29%; Baillie Gifford & Co 10%;

Harris & Associates 2%;

Page 11 of 63


Nokian Renkaat

Q3/2015a Growth

M€ OP Cons. Diff. OP Cons. Diff.

Passenger Car Tyres 237 236 0% 226 5% 956 950 1%

Heavy Tyres 39 39 -1% 38 2% 158 158 0%

Vianor 68 69 -1% 66 2% 336 337 0%

Other and eliminations -20 #DIV/0! -20 -1% -78 #DIV/0!

Total sales 324 329.0 -1% 311 4% 1,371 1,376 0%

Sales growth 0.8 % 1.2 %

EBIT

Passenger Car Tyres 79.0 78 1% 76 4% 283 287 -1%

Heavy Tyres 7.7 8 -4% 8 -1% 30 31 -4%

Vianor -5.5 -5 -10 % -6 -8% -1 -1 -40 %

Other and eliminations -4.0 #DIV/0! -5 -20% -11 #DIV/0!

Total EBIT 77.2 79.0 -2% 72.4 7% 301 308 -2%

Total EBIT margin 23.8 % 24.0 % 23.3 % 21.9 % 22.4 %#DIV/0!

PTP 74.2 75.0 -1% 64.6 14.9 % 288 295 -2%

EPS 0.46 0.48 -5% 0.42 8.8 % 1.77 1.82 -3%#DIV/0!

DPS #DIV/0! 1.50 1.50 0%

Source : OP and FactSet

Q3/2016e 2016e

Nokian Tyres

Finland/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Nokian Tyres (Accumulate) Q3 results matched our estimates

Q3 preview: Turn to growth on the cards – Accumulate

The facts: Nokian Tyres releases its Q3 results on Tuesday, 1 November, at 7

am CET. An analyst briefing starts at 9 am CET.

Our analysis: In Q3 the attention will focus on the sales performance in the

Nordic countries and Europe, where winter tyre sales have shifted closer to the

actual peak season. This means that seasonal variation may have a great impact

on earnings. In Q2, the rather high winter tyre inventories dampened sales in

Russia and North America, but we estimate that the inventory situation has

stabilised, allowing demand to strengthen at the time of H1 2017 pre-orders at the

latest. In recent years the share of Russian sales of the whole Group's sales has

clearly declined as a result of Russia's weak economic environment, but now a

turnaround appears to be at hand. Russian new car sales dropped 11% in

September and have declined by 14% in January–September. We estimate that

tyre sales volumes in Russia will rebound to slight growth next year, supported by

GDP growth and the stronger RUB. A more noticeable pick-up in new car sales

would underpin demand for the most expensive A segment in particular.

According to our forecast, Q3 sales will grow by 4% to EUR 324m (cons.

EUR 329m). We expect EBIT to improve by EUR 5m to EUR 77.2m (cons.

EUR 79m). The company expects full-year sales and EBIT excl. NRI to be at the

2015 level (EUR 1,360m/EUR 296m). The forecasts are now marginally above

the company's guidance range. The focus will, however, shift more strongly to

next year and the appointment of a new CEO after Ari Lehtoranta moves to

Caverion. A possible turnaround in Russia and the RUB appreciation will support

the growth outlook for 2017. In addition, the strong balance sheet will once again

enable a shareholder-friendly dividend yield.

Conclusion & Action: We have revised our 2017–2018 EBIT forecasts up by

2%. We are raising our target price to correspond to the value indicated by our

DCF model, i.e. EUR 34.50, and our recommendation rises to Accumulate (from

Reduce).

Analyst(s):

Jari Raisanen, OP Corporate Bank

[email protected]

+358 10 252 4504

Accumulate

30.94


34.50

31.50from Target Price: EUR

from Reduce

Target price: EUR

Share price: EUR

Reuters/Bloomberg NRE1V.HE/NRE1V FH



Free float 100%

Daily avg. no. trad. sh. 12 mth 552








Sales (m) 1,360 1,371 1,450

EBITDA (m) 379 382 405

EBITDA margin 27.8% 27.9% 27.9%

EBIT (m) 296 301 322

EBIT margin 21.8% 21.9% 22.2%


ROCE 22.2% -5.4% -5.5%

Net debt/(cash) (m) (208) (195) (196)


Debt/EBITDA -0.5 -0.5 -0.5


EV/Sales 3.1 2.9 2.7

EV/EBITDA 11.1 10.3 9.7

EV/EBITDA (adj.) 11.1 10.3 9.7

EV/EBIT 14.2 13.1 12.2

P/E (adj.) 18.5 17.5 16.4

P/BV 3.6 3.2 3.1

OpFCF yield 4.5% 4.8% 3.6%


EPS (adj.) 1.79 1.77 1.89

BVPS 9.29 9.56 10.02

DPS 1.50 1.50 1.60

22

24

26

28

30

32

34

36

38


vvdsvdvsdy

NOKIAN TYRES Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: Keskinäinen työeläkevakuutusyhtiö

Varma 4%; Keskinäinen

Eläkevakuutusyhtiö Ilmarinen 2%; Odin

Norden 0.80%;

Page 12 of 63


Sogefi

Italy/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Sogefi (Buy) Q3 preview: Turn to growth on the cards – Accumulate

Positive feed-back from the conference call

The facts: Yesterday, Sogefi management hold a conference call on Q3 results.

Our analysis: Here follow the main topics:

- The contribution margin improvement derivers from better productivity and

a lower cost of labour, while the low raw material costs didn't have a role in

the improvement. We understood that there's still room to improve

productivity through better capacity utilisation and stronger automation.

- Sogefi cashed in EUR 6m from the French fiscal authorities putting an end

to a 10-year long dispute.

- When it comes to the claim against Dayco (the seller of Systèmes Moteurs

in 2011), Sogefi got a EUR 5.5m payment following the May 2016 arbitration

ruling and it is still waiting for the remaining EUR 4m; the company has taken

legal action to get the rest of the reimbursement, but it does not assume to

get this money before the end of the year.

- The NFP (EUR -314m as at the end of September without meaningful Δ in

the level of factoring) is expected to improve to EUR -300/310m by the end of

the year, without taking into account the EUR 4m payment from Dayco.

- Restructuring costs are expected to come in at below EUR 7m this year,

EUR 1m less than expected by us.

- On the Chateauroux proceeding, there's no major news; the expert report

may be ready well into 2017; the expert is reportedly trying to understand the

level of "shared responsibility" between Sogefi (Tier I supplier), the clients

(BMW and PSA), the Tier II supplier (BTT/Mahle) and Tier III suppliers.

- When it comes to 2017, the management envisages an organic top line

growth in the range of 2/3% Y/Y.

Following Q3 results, we have adjusted our estimates to factor in certain one-offs

and to reflect a lower level of debt.

2016 e 2017 e

New Old Δ New Old Δ

Revenues 1,569 1,559 0.6% 1,632 1,621 0.7%

EBITDA Adj. 150 148

164 165 -0.6%

EBIT Adj. 83 78 6.4% 88 94 -6.8%

Net Profit Adj. 22 22 -1.6% 30 32 -8.6%

NFP (305) (322) 17 (289) (317) 28

Conclusion & Action: We argue that the management has a clear strategy when

dealing with contribution margin stabilisation/improvement and cash generation

improvement. We argue that the market environment remains supportive.

When it comes to the Chateauroux proceeding, the fact that the expert is taking

time to assess the level of "shared responsibility" between the actors is positive

because it makes our worst case scenario (i.e. only Sogefi has to pay for the

damages, EUR 123m) less and less likely.

We keep our positive stance on the stock and improve our target price (to

EUR 3.1) based on a 5X EV/EBITDA multiple.

Analyst(s):

Gabriele Gambarova, Banca Akros

[email protected]

+39 02 43 444 289

Buy

1.93


3.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg SGFI.MI/SO IM

Market capitalisation (EURm) 225


Free float 36%









Sales (m) 1,499 1,569 1,632

EBITDA (m) 116 143 157


EBIT (m) 51 76 88

EBIT margin 3.4% 4.8% 5.4%


ROCE 4.0% 8.2% 10.6%

Net debt/(cash) (m) 322 305 289




EV/Sales 0.4 0.3 0.3

EV/EBITDA 5.1 3.7 3.3

EV/EBITDA (adj.) 4.3 3.6 3.1

EV/EBIT 11.6 7.0 5.9

P/E (adj.) 33.6 10.4 6.6

P/BV 1.5 1.2 1.0

OpFCF yield -4.2% 4.2% 8.5%


EPS (adj.) 0.06 0.19 0.29

BVPS 1.46 1.64 1.90

DPS 0.00 0.00 0.00

1.0

1.2

1.4

1.6

1.8

2.0

2.2

2.4


vvdsvdvsdy

SOGEFI Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: CIR 56%; JP MORGAN AM 5%; Giovanni

Germano 3%;

Page 13 of 63


Volkswagen

Germany/Automobiles & Parts Analyser

AUTOMOBILES & PARTS

Volkswagen (Buy) Positive feed-back from the conference call

VW obtains approval of 2L TDI settlement in the US

The facts: Yesterday evening, Volkswagen has announced that it has Judge

Charles Breyer granted them the final approval of the settlement with private

plaintiffs to resolve civil claims regarding VW and Audi 2.0L TDI vehicles in the

US.

Concurrently, the judge also approved a Consent Decree between VW and the

US Department of Justice on behalf of the EPA and the state of California (CARB)

as well as a Consent Order between VW and the Federal Trade Commission.

Our analysis: According to the settlement, Volkswagen will pay a total of up to

USD 14.7bn, of which up to USD 10bn will be paid to customers and another USD

4.7bn will be paid to finance environmental programs in the US. This amount was

already agreed on in June 2016 and is thus no surprise.

Conclusion & Action: The approval by Judge Breyer was expected by the

market and does thus not come as a surprise. Nonetheless, we see this as

slightly positive news for VW as it resolves another point of uncertainty on the

way back to normality. Next step is to find a solution for the 3.0L TDI vehicles, for

which an amended offer by VW was transmitted to court on October 24th 2016.

Analyst(s):

Tim Schuldt, CFA, equinet Bank

[email protected]

+49 69 5899 7433

Buy

126.90


166.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg VOWG_p.DE/VOW3 GR



Free float 48%









Sales (m) 213,292 209,455 218,545

EBITDA (m) 9,447 25,872 28,392


EBIT (m) (4,069) 11,751 13,872

EBIT margin nm 5.6% 6.3%

Net Profit (adj.)(m) 11,411 10,430 10,546

ROCE -2.1% 7.0% 7.0%

Net debt/(cash) (m) (16,962) (20,438) (20,194)


Debt/EBITDA -1.8 -0.8 -0.7

Int. cover(EBITDA/Fin. int) (5.8) 12.9 16.5

EV/Sales 0.2 0.2 0.2

EV/EBITDA 5.3 1.7 1.7

EV/EBITDA (adj.) 5.3 1.6 1.7

EV/EBIT nm 3.8 3.4

P/E (adj.) 5.8 6.0 6.0

P/BV 0.8 0.7 0.6

OpFCF yield 3.9% 5.8% 11.3%


EPS (adj.) 22.98 21.00 21.24

BVPS 162.10 176.56 197.98

DPS 0.11 3.00 3.50

80

90

100

110

120

130

140

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

vvdsvdvsdy

VOLKSWAGEN Stoxx Automobiles & Parts (Rebased)Source: Factset

Shareholders: Porsche 37%; Lower Saxony 15%;

Page 14 of 63


Banco Santander

Spain/Banks Analyser

BANKS

Banco Santander (Buy) VW obtains approval of 2L TDI settlement in the US

9M16 Earnings: EUR4.606m (-22.5% Y/Y)

The facts: For 9m16 B Santander reported a net profit of EUR 4,606m, 22.5%

below EUR5,941m 9m 2015. Adjusting for non-recurring items, 9m16 profit

stands at 7,975m 2.6% vs comparable figure of 2015 (EUR5.106m).

Our analysis: The 2016 main non-recurring items are capital gains from the

disposal of the stake in VISA Europe (€227m), restructuring costs (€475m) and

contribution to the Single Resolution Fund (€120m). In 9M’15, reversal of tax

liabilities in Brazil (€835 million). Currencies had a negative impact of 8%.

Solvency: positive trends, the CET1 FL ratio increased by 11bp Q/Q to 10.47%

and 42 bp in the year. Some 16pbs were generated organically and by asset

optimization. Other 5pbs were a non-recurring generation. The fully loaded

leverage ratio stands at 5.0% (4.7% in September 2015).

Credit quality: NPL ratio of the Group improved to 4.15% (-14 bp quarterly; -35 bp

yoy) and coverage remains stable at 73%. The pressure of the CoR is reduced by

7bp to 1.19%.

Efficiency: the C/I ratio (including depreciation) ends the period at 47.8% vs

47.0% a year ago. The September figure is similar to the reported at Dec15 level:

47.6% which implies that the operating expenses remain under control.

Profitability: ROE reported ends at 7.66% vs. 7.23% (Dic15), while the ROTE

(11.36%) exceeds the Dec15 of 10.99% reference as well as the RORWA (1.40

% vs 1.30%).

Conclusion & action: Results and management ratios slightly better than

expected. The presentation to analysts is scheduled for today at 10:00 CET.

Recommendation reiterated.

Analyst(s):

Javier Bernat, GVC Gaesco Beka

[email protected]

+34 91 436 7816

Buy

4.44


5.13



Target price: EUR

Share price: EUR

Reuters/Bloomberg SAN.MC/SAN SM



Free float 99%









Total Revenue (m) 45,272 43,909 43,486

Pre-Provision Profit (PPP) (m) 23,702 22,489 22,027

Operating profit (OP) 13,594 13,391 13,092

Earnings Before Tax (m) 10,339 10,424 11,029

Net Profit (adj.) (m) 6,566 6,011 6,316

Shareholders Equity (m) 88,320 91,676 95,725

Tangible BV (m) 61,080 65,467 69,516

RWA (m) 592,781 626,878 655,495

ROTE 11.0% 9.5% 9.4%

Total Capital Ratio (B3) 13.1% 13.6% 14.1%

Cost/Income 47.6% 48.8% 49.3%

NPL ratio (gross) 4.9% 4.1% 3.5%

P/PPP 2.7 2.9 2.9

P/E (adj.) 9.8 10.7 10.1

P/BV 0.7 0.7 0.7

P/TBV 1.1 1.0 0.9

Dividend Yield 3.4% 3.7% 3.4%

PPPPS 1.68 1.56 1.53

EPS (adj.) 0.46 0.42 0.44

BVPS 6.25 6.35 6.63

TBVPS 4.32 4.54 4.82

DPS 0.15 0.17 0.15

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

GOP 32,740 34,378 (1,638) (4.8)%

NII 22,992 24,302 (1,310) (5.4)%

Fees & Comm. 7,543 7,584 (41) (0.5)%

Trading 1,311 1,702 (391) (23.0)%

Op Expense (15,634) (16,149) 515 (3.2)%

Impairments (7,112) (7,550) 438 (5.8)%

% GOP (21.7)% (22.0)% 0 (1.1)%

PBT 8,625 8,766 (141) (1.6)%

Net Inc. (reported) 4,606 5,941 (1,335) (22.5)%

Net Inc. (adjust): 4,975 5,106 (131) (2.6)%

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

CET1-FL (%) 10.47 10.05 42.0 4.2%

Total capital ratio (%) 13.70 13.05 65.0 5.0%

C /I Ratio (%) 47.40 47.60 (20.0) (0.4)%

NPL Coverage (%) 72.70 73.10 (40.0) (0.5)%

NPL Ratio (%) 4.15 4.36 (21.0) (4.8)%

CoR (%) 1.19 1.25 (6.0) (4.8)%

RoRWA (%) 1.40 1.30 10.0 7.7%

RoTE (%) 11.36 10.99 37.0 3.4%

Source SAN

3.0

3.5

4.0

4.5

5.0

5.5


vvdsvdvsdy

BANCO SANTANDER Stoxx Banks (Rebased)Source: Factset

Shareholders: Botin family 1.05%;

Page 15 of 63


Bankia


BANKS

Bankia (Accumulate) 9M16 Earnings: EUR4.606m (-22.5% Y/Y)

9M16: EUR731m -10% Y/Y

The facts: Bankia reports net income of EUR731m for 9m16.

Conclusion & Action: First impression Neutral. Results in line with estimates.

CC today @ 12:30 CET. Recommendation reiterated.

Analyst(s):


[email protected]

+34 91 436 7816

Accumulate

0.80


0.91



Target price: EUR

Share price: EUR

Reuters/Bloomberg BKIA.MC/BKIA SM



Free float 35%









Total Revenue (m) 3,806 3,358 3,397




Net Profit (adj.) (m) 1,138 975 990


Tangible BV (m) 9,964 10,619 11,282

RWA (m) 81,303 79,402 80,702

ROTE 11.8% 9.5% 9.0%


Cost/Income 43.6% 44.7% 45.0%

NPL ratio (gross) 11.6% 10.6% 9.3%

P/PPP 5.8 5.0 4.9

P/E (adj.) 10.9 9.5 9.3

P/BV 1.0 0.7 0.7

P/TBV 1.2 0.9 0.8


PPPPS 0.19 0.16 0.16

EPS (adj.) 0.10 0.08 0.09

BVPS 1.10 1.16 1.22

TBVPS 0.87 0.92 0.98

DPS 0.03 0.03 0.03

P&L EUR (m) 9M16 9M15 Y/Y (m) Y/Y (%)

GOP 2,460 2,910 (450) (15.5)%

NII 1,631 1,964 (333) (17.0)%

Fees & Comm. 611 701 (90) (12.8)%

Trading 184 223 (39) (17.5)%

Op Expense (1,057) (1,200) 143 (11.9)%

Impairments (256) (472) 216 (45.8)%

% GOP (10.4)% (16.2)% 0 (35.8)%

PBT 941 1,093 (152) (13.9)%

Net Inc. (reported) 731 812 (81) (10.0)%

Net Inc. (adjust): 731 812 (81) (10.0)%

Financial ratios: Sep 2016 Sep 2015 Y/Y (%) YTD (%)

CET1-Phase in (%) 13.24 12.26 98.0 8.0%

Total capital ratio (%) 16.80 15.15 165.0 10.9%

C /I Ratio (%) 47.70 41.50 620.0 14.9%

NPL Coverage (%) 60.50 60.00 50.0 0.8%

NPL Ratio (%) 9.50 10.80 (130.0) (12.0)%

CoR (%) 0.24 0.43 (19.0) (44.2)%

RoRWA (%) 1.30 1.32 (2.0) (1.5)%

RoTE (%) 10.20 9.90 30.0 3.0%

Source Company

0.50

0.60

0.70

0.80

0.90

1.00

1.10

1.20

1.30


vvdsvdvsdy

BANKIA Stoxx Banks (Rebased)Source: Factset

Shareholders: FROB 65%;

Page 16 of 63


BBVA


BANKS

BBVA (Buy) 9M16: EUR731m -10% Y/Y

3Q’16 Estimates: EUR874m (+11.4% Y/Y)

The facts: BBVA will release 3Q’16 results tomorrow prior to market opening. and

hold the CC at 09:30 CET. For 3Q we estimate net profit EUR874m, +11.4% vs.

3Q’15.

Our analysis: Last Monday, Garanti Bank released 3Q’16 results, obtaining

EUR400m, in line with our forecasts. BBVA holds 49.9% of Garanti Bank which

contributes 13.8% to the Group’s earnings.

BBVA Business Breakdown. 3Q16e

Consensus

Conclusion: Recommendation reiterated.

Analyst(s):


[email protected]

+34 91 436 7816

Buy

6.30


6.70



Target price: EUR

Share price: EUR

Reuters/Bloomberg BBVA.MC/BBVA SM



Free float 96%









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




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


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

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

ROTE 6.4% 8.9% 9.4%


Cost/Income 43.2% 52.5% 52.3%

NPL ratio (gross) 7.0% 5.5% 4.6%

P/PPP 3.2 3.6 3.3

P/E (adj.) 15.9 11.0 9.7

P/BV 0.9 0.8 0.8

P/TBV 1.1 0.9 0.9


PPPPS 2.09 1.76 1.89

EPS (adj.) 0.42 0.57 0.65

BVPS 7.43 7.73 8.23

TBVPS 6.36 6.68 7.18

DPS 0.16 0.19 0.24

BBVA (EURm) 9m16E 9m15 y/y Sep-16 Sep-15 Jun-16 y/y q/q

NII 12,523 12,011 4.3% 4,158 4,490 4,213 (7.4)% (1.3)%

GOP 18,234 17,534 4.0% 6,001 5,980 6,445 0.3% (6.9)%

PPP 8,815 8,510 3.6% 2,915 2,673 3,287 9.0% (11.3)%

PBT 4,984 4,335 0.1 1,593 1,289 2,053 0.2 (0.2)

Net income (adj) (*) 2,706 2,816 (3.9)% 874 784 1,123 11.4% (22.2)%

EPS 0.418 0.447 (6.5)% 0.135 0.124 0.173 8.4% (22.2)%

Estimates GVC Gaesco Beka (*) ex BW impacto integracion Garnati

GARANTI BANK

EURm Q1 2016 Q2 2016 Q3 2016 Q/Q

Net Interest Income 852.1 935.2 904.9 -3.2%

Non Interest Income 405.6 501.8 330.1 -34.2%

Net Revenue 1,257.7 1,436.9 1,235.0 -14.1%

Provision for Loan Losses 208.8 226.7 171.3 -24.4%

Non Interest Expense 636.7 631.3 494.6 -21.7%

Net Income to Common 322.3 469.7 400.3 -14.8%

Basic EPS, GAAP 0.077 0.112 0.095 -14.9%

Total Loans 56,726.3 58,438.8 54,804.1 -6.2%

Net Loans 55,370.2 57,058.7 54,804.1 -4.0%

Total Deposits 49,218.1 52,327.4 49,617.7 -5.2%

Total Liabilities 80,497.5 79,795.1 49,617.7 -37.8%

Efficiency Ratio % 47.5 40.6 40.0 -1.4%

Loans to Deposit Ratio % 115.3 111.7 110.5 -1.1%

Source: Bloomberg

EURm 9m16E Y/Y 3Q16E Y/Y Q/Q

Spain + RE 630 10.5% 220 56.8% (23.9)%

Spain 944 (4.4)% 325 27.0% (15.5)%

Real Estate (314) (24.7)% (105) (9.2)% 10.0%

Mexico 1,446 (5.0)% 478 0.2% (0.2)%

Turkey 521 108.9% 197 162.6% 3.0%

Rest of Eurasia 114 72.2% 38 67.7% (33.8)%

South America 582 (16.0)% 189 (13.6)% (10.9)%

USA 300 (23.8)% 122 3.7% (5.6)%

Estimates GVC Gaesco Beka

EURm 9m16E 9m15 Y/Y 3Q16E Y/Y Q/Q

Revenue 18,207 17,534 3.8% 4,228 (5.8)% 0.4%

NII 12,593 12,011 4.8% na na na

PPP 8,705 8,510 2.3% na na na

Netr Profit 2,684 2,815 (4.7)% 852 8.7% (24.1)%

Source Thomsonreuters

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

BBVA Stoxx Banks (Rebased)Source: Factset

Shareholders: BlackRock 4%;

Page 17 of 63


Stora Enso

Q3/2015a Growth

EURm Q3a vs. Cons. OP Cons. Diff.

Paper 792 -5% 888 835 6% 911 -3%

Biomaterials 334 -3% 400 344 16% 392 2%

Wood Products 385 -2% 398 391 2% 375 6%

Consumer Board 599 -3% 644 620 4% 608 6%

Packaging Solutions 259 -1% 243 262 -7% 226 8%

Other 559 #DIV/0! 675 #DIV/0! 563 20%

Inter-segment sales -535 #DIV/0! -682 #DIV/0! -575 19%

Total sales 2,393.0 -2% 2,566 2,451.0 5% 2,500 3%

Sales growth

EBIT

Paper 53 36% 26.0 39 -33% 6 333%

Biomaterials 43 -9% 60.0 47 28% 100 -40%

Wood Products 22 -8% 24.0 24 0% 22 9%

Consumer Board 67 16% 79.0 58 36% 80 -1%

Packaging Solutions 21 -19% 20.0 26 -23% 18 11%

Other 13 8% 5.0 12 -58% 20 -75%

Inter-segment sales #DIV/0! 0.0 #DIV/0! 0 #DIV/0!

Total EBIT 219.0 5% 214.0 208.0 3% 246.0 -13%

Total EBIT margin 9.2 % 8.3 % 8.5 % 9.8 %#DIV/0!

PTP 170 7% 159.0 159.0 0% 128.0 24.2 %

EPS 0.17 6% 0.16 0.16 -2% 0.13 20.3 %#DIV/0!

DPS #DIV/0!

Source : OP and VaraResearch

Q3/2016e

Stora Enso

Finland/Basic Resources Analyser

BASIC RESOURCES

Stora Enso (Accumulate) 3Q’16 Estimates: EUR874m (+11.4% Y/Y)

Target price upgraded to EUR 9.30

The facts: Stora Enso's comparable operating profit (EUR 219m) in Q3 came in

slightly higher than our forecast (EUR 214m) and consensus (EUR 208m). The

company’s cash flow was still solid – the operating cash flow in Q3 was EUR

390m and the amount of interest-bearing net debt reduced by nearly EUR 400m

compared to the end of Q2.

Our analysis: The absolute profit level and profit contribution of the Paper

division increased significantly compared to Q3/15. A favourable trend of variable

costs and internal efficiency that has improved thanks to efficiency measures and

structural changes resulted in an operating EBIT margin of 6.7% (0.7% in Q3/15).

Stora Enso will organise a Capital Markets Day in London on 17 November. We

repeat our view that the company could change its dividend policy towards cash

flow orientation, and a possible point of time for the change in the dividend policy

could be the Capital Markets Day.

We estimate that Stora Enso’s results will remain relatively stable in 2017 and

2018. The recent USD appreciation, SEK depreciation and the stabilisation of

pulp prices after a long decline are potential short-term positive share price

drivers in addition to our expectations for the Capital Markets Day.

Conclusion & Action: As a result of the revisions to our earnings forecasts, we

are raising our target price to EUR 9.30 (from EUR 9.10). The target corresponds

to the upper quartile of the company’s five-year EV/EBITDA (6.9) on 2016

forecasts. We reiterate the Accumulate recommendation.

Analyst(s):

Henri Parkkinen, OP Corporate Bank

[email protected]

+358 10 252 4409

Accumulate

8.63


9.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg STERV.HE/STERV FH



Free float 100%









Sales (m) 10,040 9,772 9,849

EBITDA (m) 1,447 1,403 1,454

EBITDA margin 14.4% 14.4% 14.8%

EBIT (m) 896 891 949

EBIT margin 8.9% 9.1% 9.6%


ROCE 9.6% 9.5% 10.1%

Net debt/(cash) (m) 3,388 2,842 2,616




EV/Sales 1.0 1.0 1.0

EV/EBITDA 6.9 6.9 6.5

EV/EBITDA (adj.) 6.9 6.9 6.5

EV/EBIT 11.2 10.8 9.9

P/E (adj.) 13.4 14.0 11.7

P/BV 1.2 1.2 1.1

OpFCF yield 5.5% 3.6% 11.9%


EPS (adj.) 0.63 0.62 0.74

BVPS 6.98 7.27 7.66

DPS 0.33 0.35 0.40

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5


vvdsvdvsdy

STORA ENSO Stoxx Basic Resources (Rebased)Source: Factset

Shareholders: FAM AB 10%; Solidium Oy 12%; Social

Insurance Institution of Finland 3%;

Page 18 of 63


UPM-Kymmene

Q3/2015a Growth

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

Biorefining 541 -1% 562 549 2% 502 605 554 1%

Energy 89 -4% 84 93 -10% 74 119 112 -25%

Raflatac 355 -2% 359 364 -1% 353 371 353 2%

Paper Asia 305 -8% 310 331 -6% 282 366 286 8%

Paper ENA 1,234 3% 1,215 1,201 1% 1,172 1,244 1,279 -5%

Plywood 106 -2% 112 108 4% 100 116 105 7%

Other 65 -32% 95 95 0% 75 101 97 -2%

Total sales 2,445 -1% 2,437 2,481.0 -2% 2,437 2,559 2,530 -4%

Sales growth

EBIT

Biorefining 94 0% 110.0 94 17% 68 110 122 -10%

Energy 30 7% 26.0 28 -7% 20 45 45 -42%

Raflatac 35 0% 30.0 35 -14% 23 37 29 3%

Paper Asia 36 20% 16.0 30 -47% 16 36 12 33%

Paper ENA 113 117% 39.0 52 -25% 21 73 9 333%

Plywood 12 -8% 12.0 13 -8% 10 17 11 9%

Other -4 n.a. 5.0 5 0% -14 14 14 -64%

Total EBIT 314.0 25% 236.0 251.0 -6% 211 284 240.0 -2%


PTP 288 22% 220.0 236.0 -7% 196 268 225.0 -2.2 %

EPS 0.44 26% 0.32 0.35 -8% 0.29 0.41 0.35 -8.9 %#DIV/0!

DPS #DIV/0!

Source : OP and UPM-Kymmene

Q3/2016e

UPM-Kymmene

Finland/Basic Resources Analyser

BASIC RESOURCES

UPM-Kymmene (Neutral) Target price upgraded to EUR 9.30

Still something positive for the rest of the year?

The facts: UPM-Kymmene’s comparable EBIT for Q3 (EUR 314m) came in

markedly above our forecast (EUR 236m) and consensus (EUR 251m) and it also

exceeded the upper end of consensus. In terms of divisions, the definite positive

surprise in the Q3 results came from the Paper ENA division that benefited from

solid seasonality, but in particular, high efficiency and exceptionally low fixed

costs.

Our analysis: The company has initiated a competitiveness review concerning

the European graphic paper business. According to our estimate, GBP

depreciation and a weaker predictability of the market in the UK due to Brexit

increase the probability that UPM-Kymmene’s production facilities in the UK

(Shotton and Caledonian) are part of possible structural arrangements.

As a result of forecast revisions, our EBIT forecast for 2017 is increased by 6%

and our EBIT forecast for 2018 is increased by 8%. Our dividend projections for

2016–2018 are unchanged (EUR 0.90, EUR 0.95 and EUR 0.95).

Conclusion & Action: We are raising our target price to EUR 21.00 (from EUR

19.50) and downgrading our recommendation Neutral (from Accumulate). The

upgraded target price results from forecast revisions and updated balance sheet

data. The target corresponds to the upper quartile of the company’s five-year

EV/EBITDA (7.4) on 2016 forecasts. In our opinion, the upside is more limited

than before after the strong share price movement (+11%) that took place

yesterday but expectations about modifying the balance sheet and the significant

extra dividend potential indicated by our calculations are likely to maintain the

share in a positive light.

Analyst(s):


[email protected]

+358 10 252 4409

Neutral

21.02


21.00


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg UPM1V.HE/UPM1V FH



Free float 100%









Sales (m) 10,138 9,729 9,506

EBITDA (m) 1,422 1,650 1,573

EBITDA margin 14.0% 17.0% 16.5%

EBIT (m) 916 1,111 1,033

EBIT margin 9.0% 11.4% 10.9%


ROCE 7.7% 9.9% 9.0%

Net debt/(cash) (m) 3,132 2,217 2,118




EV/Sales 1.2 1.4 1.4

EV/EBITDA 8.7 8.1 8.5

EV/EBITDA (adj.) 8.7 8.1 8.5

EV/EBIT 13.5 12.1 12.9

P/E (adj.) 12.4 13.3 14.8

P/BV 1.2 1.3 1.3

OpFCF yield 8.5% 9.5% 6.2%


EPS (adj.) 1.39 1.58 1.42

BVPS 14.88 15.71 16.22

DPS 0.75 0.90 0.95

10

12

14

16

18

20

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vvdsvdvsdy

UPM-KYMMENE Stoxx Basic Resources (Rebased)Source: Factset

Shareholders: Ilmarinen Mutual Pension Insurance

Company 1.33%; Varma Mutual Pension

Insurance Company 1.30%; The State

Pension Fund 0.90%;

Page 19 of 63


Italian Financial Services

Analyser

FINANCIAL SERVICES

Still something positive for the rest of the year?

AM: net inflows c. EUR 5.8bn in September

The facts: According to Assogestioni’s monthly data, the net inflows in asset

management industry were c EUR 5.8bn in September, -33% Y/Y.

Our analysis: the decrease Y/Y was mainly due to portfolio management

(EUR 581m vs EUR 5.9bn of last year), while open-end funds net inflows

achieved EUR 5.2bn vs EUR 2.8bn in September 2015. The performance was

still negative in equity funds (EUR -678m) and in hedge funds (EUR -57m),

while monetary funds (EUR 888m) were positive, after five months of negative

net inflows in a row. The bond funds were particularly strong (EUR 2.2bn vs

EUR -1.3bn in September 2015). The flexible fund net inflows were still

positive, but in decrease around EUR 1bn Y/Y. Total net inflows were c. EUR

42bn YTD at the end of September compared to EUR 116bn in the same

period of last year. The total funds under management achieved EUR 1,914bn

vs EUR 1,778bn in 2015.

Conclusion & Action: September was another difficult months compared to

2015, although net inflows were positive. We remind readers that the

companies in the asset gatherers sector we cover have already published

September data, which were still strong.

---------- Stoxx Financial Services,

DJ Stoxx TMI rebased on sector

Analyst(s):

Enrico Esposti, CIIA, Banca Akros

[email protected]

+39 02 4344 4022

340

360

380

400

420

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460

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vvdsvdvsdy

mailto:[email protected]

Page 20 of 63


Heineken

Netherlands/Food & Beverage Analyser

FOOD & BEVERAGE

Heineken (Buy) AM: net inflows c. EUR 5.8bn in September Buy

79.00


100.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg HEIN.AS/HEIA NA



Free float 38%









Sales (m) 20,511 20,528 21,454

EBITDA (m) 4,669 4,639 4,964

EBITDA margin 22.8% 22.6% 23.1%

EBIT (m) 3,075 3,154 3,429

EBIT margin 15.0% 15.4% 16.0%

Net Profit (adj.)(m) 2,045 2,116 2,319

ROCE 8.8% 8.6% 9.2%

Net debt/(cash) (m) 10,658 9,890 9,159




EV/Sales 2.7 2.7 2.5

EV/EBITDA 11.9 11.8 10.9

EV/EBITDA (adj.) 11.9 11.8 10.9

EV/EBIT 18.1 17.4 15.8

P/E (adj.) 22.1 21.3 19.4

P/BV 3.3 3.0 2.8

OpFCF yield 3.9% 3.3% 3.7%


EPS (adj.) 3.57 3.71 4.06

BVPS 23.62 26.13 28.52

DPS 1.30 1.67 2.03

Four comforting positives in 3Q16 trading update

The facts: Heineken reports a 3Q16 organic consolidated beer volume growth of

2.0%, slightly ahead of consensus estimates which were in the 1.4-1.6% range.

The company also mentions that CEO Jean-Francois van Boxmeer will be

nominated to be re-appointed for his fourth term.

The company says that it keeps its full year margin expectations unchanged

despite adverse economic / currency headwinds in some markets. It says that

based on the 20 October currency rates, the negative impact on consolidated

operating profit BEIA is EUR 215m and on net profit BEIA EUR 115m. These

numbers are slightly ahead of the guidance of 3 months ago (respectively EUR

200m and EUR 110m).

Our analysis: We see four positives in the trading update.

At first, the organic volume growth (2.0%) remains healthy despite difficult YoY

comps versus 3Q15 of 5.4%. In 3Q16, Asia-Pacific grew by 15.1% based on

strong growth in Vietnam and Cambodia. Also Europe grew ahead of

expectations as volume was up 0.6% (consensus: -0.2%). Americas showed

growth of 3% mainly based on Mexico and the Caribbean, although consensus

was 3.6%. US performed weak in the Heineken brand. In Africa/ME/Russia

volumes declined by 3.6%, slightly more than expected (-3.0%) due to weakness

in Russia, Egypt and DRC. Nigeria in fact showed low single digit growth.

The second positive is the nomination for re-appointment of Jean-Francois van

Boxmeer. He has been head of the company in its most important transformation

to a real global brewer with more target-setting to disciplined cost control

programs and revenue management. Successors are available, but probably the

‘fight’/selection of the best one has not yet finalized. Although a re-appointment

for a fourth term does not fit into modern governance practices, for the Heineken

structure this decision is not un-logical.

The third positive is the statement that the margin guidance for the year (40bps)

remains intact. With initial margin pressure from strong depreciation of the

Nigerian Naira and Pound Sterling, probably some investors had become

uncertain on this. Heineken’s disciplined efficiency programs, which are already

planned for the next couple of years, give a healthy foundation for forecasting.

With innovation and revenue management initiatives on top of that, the company

feels comfortable with this guidance.

The fourth positive is related to this. The impact of currency changes is slightly

raised versus three months ago while we expected a bit more. The impact is

always calculated at the time of publication and in August (three months ago) part

of the weakness of Naira and Pound Sterling was already there. Brazilian Real

and Mexican peso have improved.

Conclusion & Action: This 3Q16 trading update gives comfort to a defensive

stock as Heineken. Although revenue management in order to compensate for

higher local input costs in Nigeria and the UK in particular will take time, the

margin guidance shows that the disciplined medium/long-term policies in the

company on benchmarking and innovation remain very successful. EV/EBITDA of

Heineken is lagging 5% against peers and PER circa 15-20%. We remain positive

on this stock as a potential EUR 170 stock in 2022, despite Sterling and Naira

volatility.

70

72

74

76

78

80

82

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vvdsvdvsdy

HEINEKEN Stoxx Food & Beverage (Rebased)Source: Factset Shareholders: Heineken Holding 50%; CB Equity 13%;

Analyst(s):

Gerard Rijk, NIBC Markets N.V.

[email protected]

+ 31 (0)20 550 8572

Page 21 of 63


Ahlstrom

Q3/2016a


Filtration & Performance 172 #DIV/0! 168 686 #DIV/0!

Specialties 103 #DIV/0! 104 411 #DIV/0!

Other operations 9 #DIV/0! 11 37 #DIV/0!

Internal sales -12 #DIV/0! -16 -54 #DIV/0!

Sales 273 269 1% 267 1,080 1,080 0%

Sales growth 2.1 % 0.8 % 0.5 % 0.5 %

Total EBIT 19.1 17.1 12% 9.9 64.5 62.7 3%

EBIT excl. NRI 21.6 11.2 75.1

Total EBIT margin 7.0 % 6.4 % 3.7 % 6.0 % 5.8 %

EBIT margin excl. NRI 7.9 % 4.2 % 7.0 %

PTP 15.1 13.4 13% 8.5 49.2 51.2 -4%

EPS 0.18 0.23 -22% 0.06 0.52 0.65 -20%

DPS 0.32 0.32 0%


Q3/2016e 2016e

Ahlstrom

Finland/General Industrials Analyser

GENERAL INDUSTRIALS

Ahlstrom (Neutral) Four comforting positives in 3Q16 trading update

Q3 preview: Sharpest price rally already behind

The facts: Ahlstrom releases its figures for July–September on Friday, 28

October, at around 7:30 CET. It is rare that the company has upgraded its full-

year profit guidance three times during Q3, albeit one of the upgrades was purely

technical and related to the cancelled divestment of the Building and Wind

business unit. The outlook has clearly improved in a short period of time based on

continued improvement in operational performance as well as the drop in variable

costs (such as raw materials) which has continued longer than estimated. Sales

growth is still subdued. According to the valid guidance, full-year sales from

continuing operations are now expected to be in the range of EUR 1,060–1,100m

and the adjusted operating margin in the range of 6.5–7.5%.

Our analysis: We have not made any revisions to our forecasts in this context.

Our forecasts are in line with the mid-point of the guidance range. Thus we do not

expect any major guidance revisions in connection with the Q3 report but some

fine-tuning may be seen.

Ahlstrom's underlying EBIT has improved in 11 consecutive quarters, and based

on the recent indications it strongly appears that Q3 will increase the number to a

full dozen. We expect sales to turn to 2% growth in Q3 with the FX impact diluting

euro-denominated sales less than in Q2 (consensus: +0.8%). Our forecast for

adjusted EBIT is EUR 21.6m (+94% YoY) and for reported EBIT EUR 19.1m as

we estimate that restructuring costs will weigh on reported EBIT. The consensus

forecast collected by FactSet for Q3 EBIT is EUR 17.1m. The forecast range is

EUR 16–22m but it does not specify any adjusting items.

Conclusion & Action: Ahlstrom's share price has gained 61% in three months

and 76% YTD. We estimate that the strongest short-term upside potential has

now been used and downgrade our recommendation to Neutral (from Buy). We

are revising our target price up to EUR 13 (from EUR 12.50) as the valuation level

of peers has edged up. The target price leans on our 2017 earnings forecasts as

well as on the EV/EBITDA valuation derived from the most relevant peers (~6.3x).

Analyst(s):

Niclas Catani, OP Corporate Bank

[email protected]

+358 10 252 8780

Neutral

12.83


13.00


from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg AHL1V.HE/AHL1V FH



Free float 88%


Daily avg. trad. vol. 12 mth (m) 132







Sales (m) 1,075 1,080 1,100

EBITDA (m) 96 115 131


EBIT (m) 22 65 82

EBIT margin 2.0% 6.0% 7.5%


ROCE 7.2% 11.9% 13.4%

Net debt/(cash) (m) 196 160 197



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

EV/Sales 0.4 0.6 0.6

EV/EBITDA 4.6 5.8 5.4

EV/EBITDA (adj.) 3.6 5.3 5.4

EV/EBIT 20.2 10.3 8.6

P/E (adj.) 11.8 15.4 13.5

P/BV 1.1 1.9 2.3

OpFCF yield 15.1% 11.0% 12.0%


EPS (adj.) 0.61 0.84 0.95

BVPS 6.32 6.67 5.58

DPS 0.31 0.32 0.40

6

7

8

9

10

11

12

13

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vvdsvdvsdy

AHLSTROM OMXH (Rebased)Source: Factset

Shareholders: Vimpu Intressenter Ab 12%; AC Invest

Six B.V. 11%; Varma Mutual Pension

Insurance Co 3%;

Page 22 of 63


Amplifon

Italy/Healthcare Analyser

HEALTHCARE

Amplifon (Accumulate) Q3 preview: Sharpest price rally already behind

Q3 16 preview

The facts: Q3 16 results are due out today (Conference call at 3:00 pm CET).

Q3 16 estimates: as in the previous months, we expect positive sales growth

across all 3 regions.

In terms of profitability, the expected stable operating margins in APAC and the

further profitability improvement in EMEA should be offset by the lower margins in

AMERICAS affected by the strong increase in marketing expenses.

The following table shows our sales and profitability forecast.

AMPLIFON: Q3 16e and 9M 16e preview

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

Sales 233.5 253.7 +8.7% 733.7 797.8 +8.7%

EBITDA adj 29.7 32.4 +9.1% 101.5 117.9 +16.1%

Margin % 12.7% 12.8% 13.8% 14.8%

Source: Company Data and BANCA AKROS estimates

Conclusion & Action: we confirm our positive stance on the stock while we wait

to verify our estimates based on the results and on the management indications

during the conference call (Accumulate recommendation confirmed).

Analyst(s):

Paola Saglietti, Banca Akros

[email protected]

+39 02 4344 4287

Accumulate

9.15


9.90



Target price: EUR

Share price: EUR

Reuters/Bloomberg AMPF.MI/AMP IM



Free float 45%









Sales (m) 1,034 1,111 1,189

EBITDA (m) 165 185 208

EBITDA margin 16.0% 16.7% 17.5%

EBIT (m) 111 126 143

EBIT margin 10.7% 11.3% 12.0%


ROCE 9.0% 9.7% 10.6%

Net debt/(cash) (m) 205 180 135




EV/Sales 2.0 2.1 1.9

EV/EBITDA 12.3 12.4 10.8

EV/EBITDA (adj.) 12.3 12.4 10.8

EV/EBIT 18.3 18.2 15.7

P/E (adj.) 37.2 32.1 27.3

P/BV 3.6 3.7 3.4

OpFCF yield 1.5% 4.0% 2.4%


EPS (adj.) 0.22 0.29 0.34

BVPS 2.23 2.45 2.73

DPS 0.04 0.04 0.05

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0


vvdsvdvsdy

AMPLIFON FTSE Italy STAR (Rebased)Source: Factset

Shareholders: Ampliter N.V. 55%;

Page 23 of 63


Bayer

Germany/Healthcare Analyser

HEALTHCARE

Bayer (Buy) Q3 16 preview

Q3 results: Covestro strong, slight guidance upgrade

The facts: On October 26th

, Bayer reported Q3 2016 results as shown below. The

company raised group guidance for core EPS to the upper end of the previously

announced range: it is now expecting growth in the high-single-digit percentage

range (previously: mid- to high-single-digit percentage range). Group EBITDA

guidance remains unchanged, although guidance for the Covestro subgroup was

upgraded (the company now expects adjusted EBITDA of €1.9bn (previously: at

least on prior year level of €1.7bn), while slightly downgrading profit expectations

for its Animal Health business, where it now expects adjusted EBITDA on the

prior year level (previously: low- to mid-single-digit growth).

Bayer Q3 2016 results

EUR m Q3 2016 Q3 2016e equinet Q3 2016e

consensus Q3 2015

Sales

Group Sales 11,262 11,492 11,289 11,004

Pharmaceuticals 4,152 4,295 4,146 3,870

Cropscience 2,057 1,970 2,091 2,081

Covestro 3,004 3,020 2,973 3,009

Xarelto 772 799 747 571

Eylea 409 452 427 320

Kogenate 302 298 301 309

Betaseron 163 192 187 204

EBITDA

Group (adj) 2,682 2,436 2,532 2,530 Pharmaceuticals (adj) 1,421 1,290 1,359 1,253

Cropscience (adj) 318 296 297 316

Covestro (adj) 564 490 482 472

Special Items -122 0 -74 -204

EBITDA (reported) 2,560 2,436 2,448 2,332

EPS Core (EUR) 1.73 1.51 1.66 1.69

Source: Bayer, equinet Research

Our analysis: The beat versus consensus in Q3 2016 appears chiefly attributable

to continued strength of Covestro. Profitability of the pharmaceutical segment

also came in ahead of our expectations, although this appears to be a phasing

issue, with FY 2016 guidance for this segment unchanged. The modest upgrade

to group EPS guidance appears to be due to factors “below the line”, as group

EBITDA guidance remains unchanged. We note that the financial result tends to

benefit from share price weakness due to lower long-term incentive plan charges.

Conclusion & Action: Given that Bayer had held a Meet Management event as

recently as late September, major changes to guidance were unlikely in our view.

Against this backdrop, we regard the strength of Covestro and slight EPS

guidance upgrade as the best possible outcome for the Q3 2016 results. We

expect a slightly positive share price reaction to strong results, albeit likely muted

by lingering concerns over the proposed acquisition of Monsanto.

Analyst(s):

Marietta Miemietz CFA, equinet Bank

[email protected]

+49-69-58997-439

Buy

91.50


118.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg BAYG.DE/BAYN GR



Free float 100%









Sales (m) 46,085 46,684 48,709

EBITDA (m) 9,573 10,402 11,370

EBITDA margin 20.8% 22.3% 23.3%

EBIT (m) 6,241 7,318 8,377

EBIT margin 13.5% 15.7% 17.2%

Net Profit (adj.)(m) 5,647 5,988 6,526

ROCE 9.3% 10.2% 11.2%

Net debt/(cash) (m) 18,075 16,151 13,320




EV/Sales 2.6 2.1 2.0

EV/EBITDA 12.5 9.4 8.4

EV/EBITDA (adj.) 11.5 9.0 8.3

EV/EBIT 19.1 13.4 11.4

P/E (adj.) 17.0 12.6 11.6

P/BV 3.9 3.0 2.8

OpFCF yield 4.2% 7.3% 8.6%


EPS (adj.) 6.83 7.24 7.89

BVPS 29.34 30.39 32.72

DPS 2.26 2.50 2.60

80

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90

95

100

105

110

115

120

125

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vvdsvdvsdy

BAYER DAX30 (Rebased)Source: Factset

Shareholders:

Page 24 of 63


Oriola-KD

M€ Q3a vs. Cons. OP Cons.

Consumer 191.1 #DIV/0! 192.5

Services 278.5 #DIV/0! 262.3

Healthcare 10.7 #DIV/0! 11.6

Total sales 395.8 3% 380.3 386

Sales growth

EBIT

Consumer 9.5 #DIV/0! 10.4

Services 9.0 #DIV/0! 9.2

Healthcare 0.0 #DIV/0! -0.5

Total EBIT 17.0 -3% 17.4 17.5

EBIT margin

Consumer 5.0 % 5.4 % #DIV/0!

Services 3.2 % 3.5 % #DIV/0!

Healthcare 0.0 % -4.3 % #DIV/0!

Total EBIT margin 4.3 % 4.6 % 4.5 %

PTP 15.6 -3% 15.9 16.1

EPS 0.07 0% 0.07 0.07

DPS

Source : OP and Inquiry Financial

Q3/2016e

Oriola-KD

Finland/Healthcare Analyser

HEALTHCARE

Oriola-KD (Accumulate) Q3 results: Covestro strong, slight guidance upgrade

Additional investments weigh on cash flow

The facts: The key lines of Oriola-KD's Q3 results nearly matched expectations.

Profitability was slightly weaker than we estimated in the Consumer and Services

businesses, but the better-than-expected quarter of Healthcare offset the big

picture nicely. The start-up costs of pharmacies burdened the profitability of the

Consumer segment, and the company commented that new pharmacies would be

set up in Q4 as well. Full-year guidance remained unchanged (sales at the 2015

level and EBIT expected to be at the 2015 level or to increase).

Our analysis: The only flaw in the otherwise stable report was another new

investment programme. In 2015, the company decided on additional investments

of around EUR 20m for 2015–2018 and has now decided to make new

investments worth EUR 22m in Sweden. Investments will altogether amount to

EUR 35m per year on average in 2016–2018 (OP estimate: EUR 20m per year).

The new investments concern the automation and IT environment of the new

logistics centre in Sweden. The delivery volumes in Sweden will grow next year

when Oriola will start to distribute Meda's products. In addition, Oriola says that

the number of product lines will grow rapidly in Sweden as the offerings become

more versatile, which will also require increasing automation.

Conclusion & Action: In an industry witnessing slow growth cash flow

generation plays a key role, and the sizeable investments naturally erode it.

Profitability should basically improve with the investments, and we are revising

our margin forecasts slightly up. Our dividend projections are, in turn, revised

moderately down as a result of the growing capex. The changes in the margin

and investments offset each other, and the price indicated by DCF (EUR 5, 50%)

remains intact. The value according to the EV/EBITDA multiple (EUR 4.60; 50%)

also remains unchanged and we reiterate our target price of EUR 4.80. Following

the mild share price rise, we are downgrading our recommendation to Accumulate

(from Buy).

Analyst(s):

Kimmo Stenvall, OP Corporate Bank

[email protected]

+358 10 252 4561

Accumulate

4.26


4.80


from Buy

Target price: EUR

Share price: EUR

Reuters/Bloomberg OKDBV.HE/OKDBV FH



Free float 100%









Sales (m) 1,626 1,644 1,695

EBITDA (m) 85 92 90


EBIT (m) 63 60 64

EBIT margin 3.8% 3.7% 3.8%


ROCE 21.0% 18.6% 18.1%

Net debt/(cash) (m) 7 6 11




EV/Sales 0.5 0.5 0.5

EV/EBITDA 9.3 8.5 8.7

EV/EBITDA (adj.) 9.3 8.5 8.7

EV/EBIT 12.6 13.0 12.3

P/E (adj.) 17.7 17.9 16.6

P/BV 4.0 3.6 3.3

OpFCF yield 8.8% 4.7% 4.7%


EPS (adj.) 0.24 0.24 0.26

BVPS 1.07 1.18 1.29

DPS 0.13 0.15 0.17

3.60

3.70

3.80

3.90

4.00

4.10

4.20

4.30

4.40

4.50

4.60

4.70


vvdsvdvsdy

ORIOLA-KD OMXH (Rebased)Source: Factset

Shareholders: Keskinäinen Työeläkevakuutusyhtiö

Varma 8%; Ilmarinen Keskinäinen

Eläkevakuutusyhtiö 5%; Keskinäinen

Eläkevakuutusyhtiö Etera 4%;

Page 25 of 63


Wilex

Germany/Healthcare Analyser

HEALTHCARE

Wilex (Buy) Additional investments weigh on cash flow

Research collaboration with Nordic Nanovector

The facts: On October 26th

, Wilex announced that it had entered into a research

collaboration with Nordic Nanovector to develop novel drug antibody conjugates

for the treatment of leukemia. Terms were not disclosed.

Our analysis: We regard the deal as consistent with Wilex’ previously announced

strategy of focussing on its antibody-drug-conjugate technology. It also

complements the company’s exposure to the hematology space, as Wilex’ lead

compound HDP-101 is currently in pre-clinical development for multiple myeloma.

We believe that the deal provides long-term upside to our forecasts, although we

note the high development risk of research (i.e. early-stage) projects.

Conclusion & Action: The deal is consistent with Wilex’ strategy of focussing on

its antibody-drug-conjugate technology and adds to the company’s hematology

portfolio, where the pre-clinical asset HDP-101 for the treatment of multiple

myeloma is the lead compound. While the announcement relates to a research

collaboration and the project must thus be considered as high-risk and early-

stage, we note potential for long-term upside.

Analyst(s):

Marietta Miemietz CFA, equinet Bank

[email protected]

+49-69-58997-439

Buy

1.59


4.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg WL6.DE/WL6 GR



Free float 33%









Sales (m) 4 4 4

EBITDA (m) (6) (6) (6)

EBITDA margin nm nm nm

EBIT (m) (7) (7) (7)

EBIT margin nm nm nm

Net Profit (adj.)(m) (7) (7) (7)

ROCE -48.1% -48.1% -48.1%

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



Int. cover(EBITDA/Fin. int) (86.0) (86.0) (86.0)

EV/Sales 4.0 3.4 3.4

EV/EBITDA nm nm nm

EV/EBITDA (adj.) nm nm nm

EV/EBIT nm nm nm

P/E (adj.) nm nm nm

P/BV 2.0 1.8 1.8

OpFCF yield -88.4% -101.2% -101.2%


EPS (adj.) (0.62) (0.62) (0.62)

BVPS 0.89 0.89 0.89

DPS 0.00 0.00 0.00

1.40

1.50

1.60

1.70

1.80

1.90

2.00

2.10

2.20

2.30


vvdsvdvsdy

WILEX Stoxx Biotechnology (Rebased)Source: Factset

Shareholders: Dievini Hopp 56%; UCB 11%;

Management 1.10%;

Page 26 of 63


Seb SA

France/Household Goods Analyser

HOUSEHOLD GOODS

Seb SA (Neutral) Research collaboration with Nordic Nanovector

Q3 revenues in line with expectations

The facts: SEB published Q3 revenues of EUR1.204bn, up by 7% (idem

organic), in line with our expectations (EUR1.205bn), that of the consensus

(EUR1.201m, company) and the communication given at the last investor day.

Our analysis: Growth proved resilient sequentially vs Q2 (+7%) which had seen

Supor pick up pace prior to closure of its industrial site during the G20. By region:

1) Europe is still buoyant (+7%) with an improved context for the emerging part of

the zone (+13%). Western Europe is still on the right track (+5%) despite the poor

recent publications of some retailers; 2) Asia has thus slowed sequentially (+10%)

due to the Chinese industrial calendar (+10% after +17% in Q2); 3) Latin America

posted a more difficult Q3 (+3% l-f-l) with Brazil stabilising and activity disrupted

by strikes in Colombia; 4) North America has remained particularly weak for the

group (+1%). The geographic mix and management decisions taken two years

ago have had a favourable impact on growth. Operating result from activity

(ORfA) stood at EUR140m, up by 20% y-o-y, perfectly in line with our

expectations but above the consensus (EUR130m). Net financial debt stood at

EUR619m, obviously before the acquisition of WMF. The group has slightly

raised its 2016 targets: 6% organic growth (vs >5%) and a >15% rise in ORfA to

over EUR490m (vs >10%). With regard to the acquisition of WMF, the

competition authorities’ response should be given at end-November.

Conclusion & Action: The stock has generated a +60% performance since our

re-initiation of coverage one year ago. The investment case is still readable and

attractive, but the valuation potential seems to be exhausted.

Analyst(s):

Arnaud Cadart, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 86

Neutral

132.50


107.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg SEBF.PA/SK FP



Free float 43%









Sales (m) 4,770 5,336 6,244

EBITDA (m) 518 578 725

EBITDA margin 10.9% 10.8% 11.6%

EBIT (m) 371 426 567

EBIT margin 7.8% 8.0% 9.1%


ROCE 12.7% 7.8% 6.9%

Net debt/(cash) (m) 315 1,991 1,865




EV/Sales 1.2 1.8 1.5

EV/EBITDA 11.3 16.4 13.0

EV/EBITDA (adj.) 10.7 15.3 12.7

EV/EBIT 15.7 22.3 16.6

P/E (adj.) 21.7 24.8 19.1

P/BV 2.8 3.5 3.1

OpFCF yield 4.6% 3.0% 3.4%


EPS (adj.) 4.35 5.35 6.93

BVPS 33.73 37.55 42.80

DPS 1.54 1.70 2.00

70

80

90

100

110

120

130

140


vvdsvdvsdy

SEB SA SBF 120 (Rebased)Source: Factset

Shareholders: F¿d¿ractive 22%; Venelle Investissement

19%; Fonds Start¿gique de Participation

(FSP) 5%;

Page 27 of 63


Cargotec - OP forecasts and consensus

Q3/2016e Q2/2015a

EURm Q3a OP Diff. Cons. Low High

Sales

Kalmar 436 447 -2% 435 429 448 409

Hiab 250 245 2% 247 240 250 229

MacGregor 169 197 -14% 208 183 211 289

Total sales 854 889 -4% 889 867 901 928

EBIT

Kalmar 36.3 36 0% 39 36 44 36

Hiab 33.0 27 22% 31 27 35 25

MacGregor 2.8 9 -69% 6 0 9 13

Other -6 -7 - -7 0 0 -6

Total EBIT 56.2 63 -10% 63 55 66 62

EBIT excl. NRI 65.9 65 1% 68 65 72 68

Margin 7.7 % 7.3% 7.6% 7.4%

Financials (net) -9.6 -6 -7

PTP 46.6 57 -18% 55 51 60 55

Taxes -13.0 -15 -12

EPS 0.52 0.69 -25% 0.65 0.58 0.70 0.67

EPS, excl NRI 0.63 0.69 -9% 0.73 0.68 0.82 0.75

DPS 0.00 0.00 0.00

Source: OP (7 October 2016) and Vara Research (18 October 2016)

Cargotec Corp

Finland/Industrial Engineering Analyser


Cargotec Corp (Accumulate) Q3 revenues in line with expectations

MacGregor a disappointment but not decisive

The facts: The most solid figure in Cargotec’s report was Hiab’s margin that once

again exceeded expectations. Kalmar’s profitability complied with our forecast but

orders remained soft. Ports are postponing their investments due to uncertainty.

Our analysis: MacGregor’s results were clearly weaker than anticipated. The

number of orders declined and sales reduced considerably, which weighed on

profitability. MacGregor will start a new efficiency programme that aims to achieve

total savings of EUR 25m. The guidance was kept intact: sales at the 2015 level

or slightly below, EBIT excluding restructuring costs improving.

Our EBIT forecasts for Hiab are upgraded, Kalmar’s forecasts are slightly

downgraded, and we are cutting our MacGregor’s forecasts considerably. Orders

predict a considerable decline in MacGregor’s sales in 2017. We predict that its

EBIT will remain slightly positive in the next few quarters. Cost savings will start to

improve profitability in H2/2017. Our EBIT forecasts for Cargotec as a whole are

moderately downgraded as MacGregor's contribution to the earnings has already

become less significant.

Conclusion & Action: We value the share based on 2016–18 earnings, the

sector’s long-term P/E and EV/EBITDA multiples and our DCF analysis. We take

MacGregor’s uncertainty into consideration by weighing the earnings more and

the cash flow less than before. Our target price falls to EUR 40 (prev. EUR 42),

and we maintain our Accumulate recommendation. Hiab’s outlook remains

favourable and profitability is good. Kalmar’s sales will increase moderately and

the margin will slightly improve regardless of costs resulting from growth

investments. MacGregor is in an extremely weak economic situation but our

outlook for the long-term possibilities of its business operations remains positive.

In our opinion, the share price decline is too extensive in relation to the forecast

revisions. The valuation remains moderate, the cash flow is good and Cargotec

invests in services, automation and software on the basis of which we expect

additional growth.

Analyst(s):

Pekka Spolander, OP Corporate Bank

[email protected]

+358 10 252 4351

Accumulate

36.76


40.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg CGCBV.HE/CGCBV FH



Free float 65%









Sales (m) 3,730 3,500 3,500

EBITDA (m) 304 316 328


EBIT (m) 227 238 244

EBIT margin 6.1% 6.8% 7.0%


ROCE 7.9% 8.9% 9.4%

Net debt/(cash) (m) 661 535 400




EV/Sales 0.7 0.8 0.8

EV/EBITDA 9.1 8.9 8.1

EV/EBITDA (adj.) 9.0 8.3 7.5

EV/EBIT 12.2 11.8 10.9

P/E (adj.) 14.0 13.9 12.9

P/BV 1.7 1.6 1.5

OpFCF yield 7.9% 4.3% 7.4%


EPS (adj.) 2.47 2.65 2.86

BVPS 20.70 22.29 23.86

DPS 0.80 1.00 1.05

24

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vvdsvdvsdy

CARGOTEC CORP Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Ownership of Ilkka Herlin, total 14%;

Mariatorp Oy (controlled by Niklas Herlin)

12%; Pivosto Oy (controlled by Ilona

Herlin) 11%;

Page 28 of 63


Exel Composites

Q3/2015a Growth

M€ Q3a vs. Cons. OP OP Cons. Diff.

Total sales 16.4 #DIV/0! 17.7 18.0 -2% 75 #DIV/0!

Sales growth -8.7 % -6.7 %

Total EBIT 0.6 #DIV/0! 1.0 0.5 115% 4 #DIV/0!

Total EBIT margin 3.7 % 5.6 % 2.6 % 4.8 % #DIV/0!

#DIV/0!

PTP #DIV/0! 0.8 0.3 207.8 % 3 #DIV/0!

EPS 0.03 #DIV/0! 0.05 0.01 602.6 % 0.22 #DIV/0!

#DIV/0!

DPS #DIV/0! 0.22 #DIV/0!

Source : OP, no consensus available

Q3/2016e 2016e

Exel Composites



Exel Composites (Accumulate) MacGregor a disappointment but not decisive

Difficult market conditions continue – risks relating to dividend on the rise

The facts: The message in Exel Composites' Q3 business review remained

subdued. Sales decreased by 8.7% to EUR 16.4m and also missed our forecast

of EUR 17.7m. This can be attributed especially to the declined demand among

telecommunications customers. Overall, the order volumes of Exel's high-volume

customers decreased, and consequently production will be adjusted further to

correspond to the prevailing order flow. The company is actively seeking new

clientele from industries that can utilise composite materials.

Our analysis: Despite the lower volumes, Exel's EBIT improved slightly YoY

thanks to the implemented cost saving measures. Adjusted EBIT improved to

EUR 0.6m from EUR 0.5m a year ago (OP: EUR 1m). The company will continue

measures to lighten the cost base.

Demand factors look unfavourable for Exel in the short term. Due to the weaker

than expected results and the demand situation, we are cutting our 2016–2018

sales forecasts by 4–5%. Our EBIT forecasts fall by 20%, 19% and 12%. The

uncertainty around dividend payment will increase as the 2016 earnings will

decline notably. The balance sheet is in order, so in that respect the company

could pay out a dividend of EUR 0.22 in line with last year. Management has

indicated that it is trying to find acquisition targets, so if potential companies are in

sight, the company may cut its dividend.

Conclusion & Action: At this stage we maintain our forecast of EUR 0.22, on

which the share would offer a 4.5% dividend yield. We are lowering our target

price to EUR 5.30 (prev. EUR 5.50), which corresponds to the value indicated by

our DCF model.

Analyst(s):

Jari Raisanen, OP Corporate Bank

[email protected]

+358 10 252 4504

Accumulate

4.86


5.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg EXL1V.HE/EXL1V FH



Free float 100%









Sales (m) 80 72 75

EBITDA (m) 7 6 8


EBIT (m) 4 3 5

EBIT margin 5.5% 4.0% 6.3%


ROCE 10.6% 7.5% 11.9%

Net debt/(cash) (m) 1 (1) (2)


Debt/EBITDA 0.1 -0.2 -0.2


EV/Sales 1.0 0.8 0.8

EV/EBITDA 10.8 10.0 7.6

EV/EBITDA (adj.) 10.8 10.0 7.6

EV/EBIT 17.9 20.3 12.3

P/E (adj.) 27.4 28.3 18.2

P/BV 2.5 1.9 1.8

OpFCF yield -1.7% 7.9% 2.6%


EPS (adj.) 0.24 0.17 0.27

BVPS 2.58 2.53 2.63

DPS 0.22 0.22 0.22

4.5

5.0

5.5

6.0

6.5

7.0

7.5


vvdsvdvsdy

EXEL COMPOSITES Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Skandinaviska Enskilda Banken AB

(Hallintarekisteröity) 20%; Nordea Pankki

Suomi Oyj (Hallintarekisteröity) 15%;

Sijoitusrahasto Nordea Suomi 5%;

Page 29 of 63


Wärtsilä



Wärtsilä (Neutral) Difficult market conditions continue – risks relating to dividend on the rise

Weak ship market, stable big picture

The facts: Wärtsilä's results fell considerably short of expectations, which can be

attributed to the concentration of deliveries to Q4. Guidance was reiterated: sales

are expected to decline by around 5% and the EBIT margin excl. NRI is expected

to be around 12%. The guidance requires a strong Q4 margin. The orders of

Marine Solutions were slightly below expectations and dropped nearly 30% YoY.

Demand was brisk only for cruise and passenger ships, and the segment

accounted for over 40% of Marine Solutions' orders in the early part of the year.

Contrary to expectations, sales of Services shrank slightly on account of the

negative FX impact and especially the muted offshore-related activity.

Our analysis: Our forecasts for 2016 remain unchanged and in line with the

guidance. The weak order intake lead to an additional cut in the 2017–18 sales

forecasts for Marine Solutions. The delivery times of cruise ship orders are

exceptionally long, and we find the 2017 outlook weaker than the order book

would indicate. We are assuming a slightly more cautious view of growth in

Services but assume that its good profitability will remain stable. The orders of

Energy Solutions were good, but some of the anticipated orders have been

postponed, not cancelled. The stronger order book will turn Energy Solutions'

sales to clear growth next year.

Conclusion & Action: We base our target price on 2016–18 earnings, the

sector's historical P/E and EV/EBITDA multiples and our DCF model. The drop in

our forecasts leads to a target price of EUR 39 (prev. EUR 40). Our Neutral

recommendation remains unchanged. The decline in global ship orders is now

starting to weigh notably on Wärtsilä's sales, which is, however, largely offset by

the strengthening of the power plant market and stable maintenance activities.

Cash flow will be strong, and the balance sheet enables seeking of growth

through acquisitions, which we consider likely. On our forecasts, we find the

share's significant downside risk minor, but the uncertainty about the outlook for

Marine Solutions limits the upside potential for the time being.

Analyst(s):

Pekka Spolander, OP Corporate Bank

[email protected]

+358 10 252 4351

Neutral

39.32


39.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg WRT1V.HE/WRT1V FH



Free float 83%









Sales (m) 5,029 4,772 4,730

EBITDA (m) 711 665 695

EBITDA margin 14.1% 13.9% 14.7%

EBIT (m) 587 530 571

EBIT margin 11.7% 11.1% 12.1%


ROCE 14.3% 14.4% 14.8%

Net debt/(cash) (m) 391 185 (15)




EV/Sales 1.7 1.6 1.6

EV/EBITDA 12.1 11.8 11.0

EV/EBITDA (adj.) 11.7 11.1 10.9

EV/EBIT 14.7 14.8 13.4

P/E (adj.) 18.9 20.0 17.9

P/BV 3.8 3.3 3.1

OpFCF yield 2.5% 4.6% 6.0%


EPS (adj.) 2.23 1.96 2.20

BVPS 11.16 11.82 12.83

DPS 1.20 1.20 1.25

32

34

36

38

40

42

44


vvdsvdvsdy

WÄRTSILÄ Stoxx Industrial Engineering (Rebased)Source: Factset

Shareholders: Invaw Invest AB (Investor) 18%; Fiskars

Corp. 6%; Varma Mutual Pension

Insurance Company 5%;

Page 30 of 63


CAF

Spain/Industrial Transportation Analyser

INDUSTRIAL TRANSPORTATION

CAF (Accumulate) Weak ship market, stable big picture

9m’16 results

The facts: CAF presented 3Q’16 results at market close yesterday.

Our analysis: Results preactically in line with consensus (Sales EUR946m;

EBITDA EUR105.3m and net profit EUR28.1m)

Sales +3% thanks to the recovery in the industrial activity and higher sales in

services and signalling. The forex effect, mainly the Brazilian real, was not

relevant.

The 10x1 split will take place on November 30th.

Conclusion: Results very similar to consensus. In 2017 a good growth phase will

begin and CAF is well positioned to compete for important contracts.

Analyst(s):

Iñigo Recio Pascual, GVC Gaesco Beka

[email protected]

+34 91 436 7814

Accumulate

348.15


390.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg CAF.MC/CAF SM



Free float 49%









Sales (m) 1,284 1,353 1,545

EBITDA (m) 166 155 201

EBITDA margin 12.9% 11.4% 13.0%

EBIT (m) 127 120 166

EBIT margin 9.9% 8.8% 10.7%


ROCE 10.7% 11.4% 15.3%

Net debt/(cash) (m) 480 340 304




EV/Sales 1.1 1.1 1.0

EV/EBITDA 8.1 9.9 7.4

EV/EBITDA (adj.) 8.1 9.9 7.4

EV/EBIT 10.7 12.8 9.0

P/E (adj.) 21.3 28.9 14.2

P/BV 1.2 1.6 1.5

OpFCF yield 12.7% 13.2% 4.5%


EPS (adj.) 11.97 12.06 24.54

BVPS 205.29 213.13 232.42

DPS 5.25 5.25 8.50

CAF: 9M16 RESULTS

EUR m 9M15 % sles 9M16 % sles % y/y 3Q15 3Q16 3Q16e

Sales 935,4 100% 962,6 100% 2,9% 275,4 330,7 341,0

EBITDA 137,9 14,7% 104,2 10,8% -24,5% 42,5 39,5 38,2

EBIT 108,0 11,5% 81,5 8,5% -24,5% 34,1 30,9 29,8

Financial Results -56,6 -6% -39,1 -4%

EBT 51,4 5% 42,4 4% -17,4% 7,0 18,5 17,3

Net profit 35,8 4% 26,5 3% -26,0% 3,8 11,8 11,3

Source: GVC Gaesco Beka estimates

180

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vvdsvdvsdy

CAF IGBM (Rebased)Source: Factset

Shareholders: Cartera Social 26%; Kutxabank 19%;

Bestinver 3%; Others 0.00%;

Page 31 of 63


Construction Target price Price EPS16e P/E16 P/E17 P/E18 Div.yield 16e %

Caverion NEUTRAL 6.80 6.89 -0.07 - 20.2 15.1 3.2

Cramo NEUTRAL 24.00 25.04 1.67 15.0 13.1 12.0 3.0

Eltel (SEK) NEUTRAL 55.00 57.00 0.03 194.5 16.3 9.7 -

Lehto Group ACCUMULATE 9.00 9.10 0.44 20.6 17.6 15.5 1.9

Lemminkäinen ACCUMULATE 18.00 17.34 1.21 14.3 16.9 13.4 1.4

Ramirent ACCUMULATE 7.80 7.86 0.37 21.5 15.6 13.3 5.1

SRV ACCUMULATE 4.80 4.55 0.13 35.1 11.5 9.2 2.2

Uponor BUY 20.00 16.67 0.60 27.7 17.4 16.5 2.8

YIT BUY 8.00 7.81 0.10 76.8 14.5 11.1 3.1

Finnish Construction

Analyser

MATERIALS, CONSTRUCTION &

INFRASTRUCTURE

9m’16 results Opportune quarter for guidance revisions

290

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320

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350

360

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380

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vvdsvdvsdy

Share price performance has been robust in the Finnish construction sector

ahead of the Q3 earnings season. The favourable economic outlook supports

profits, and the earnings season will show how well corporate earnings match

expectations. Valuations in general still leave some upside if the big picture for

2018 remains positive. The sector's earnings will be released at a brisk pace

mainly this week and the next. Our report includes our Q3 previews for these

companies.

We have altered two recommendations in our report. We have upgraded

Uponor's recommendation to Buy (from Accumulate) with a target price of

EUR 20 (prev. EUR 18), as we think Uponor has potential for faster-than-

expected growth in Building Solutions - Europe. Our view does not apply so

much to the Q3 results but rather to 2017–2018. The other change of

recommendation concerns Lemminkäinen whose recommendation we have

upgraded to Accumulate (from Neutral) with a target price of EUR 18 (prev.

EUR 15). The positive decision on damages has prompted us to raise the

target price, but we also anticipate a strong H2 performance.

Cramo, Lehto, Ramirent and YIT are close to their target prices. We do not

change the recommendations or target prices of these companies in this

report; instead, we will wait for additional information provided by the earnings

releases. The share prices are loaded with high expectations, but small

disappointments without a change to the investment case will offer buy

opportunities.

Caverion and Eltel have issued warnings about their H2 results, and

Lemminkäinen has upgraded its guidance. We estimate that Uponor would

have good grounds to raise its guidance. SRV may also upgrade its guidance

but more likely around the turn of the year. Ramirent poses a minor risk of a

guidance downgrade.

---------- Stoxx Construction & Materials,


Matias Rautionmaa, OP Corporate Bank

[email protected]

+358 10 252 4408nalyst(s):

Page 32 of 63


AENA

Spain/Materials, Construction & Infrastructure Analyser


AENA (Neutral) Opportune quarter for guidance revisions

Good results and cash generation

The facts: AENA released 9m’16 results, in which the following aspects stand

out: traffic +11.2%; cost contention, EBITDA +10.5%, operating cash flow +22%,

debt reduction (EUR1,160m).

Our analysis: EBITDA increased 10.5% (EUR1,759m) thanks to the mentioned

aspects and the good services outside of the terminal (+16% EBITDA). PAX

decreased 3.8% (EUR10.9/PAX) due to the tariff cut (-1.9% since March 1st).

Net profit increased 47% to EUR944m, although excluding the positive impact

from the reversion of provisions (EUR204m) earnings would have increased

23.7%.

Operating cash flow +22% (EUR1,699m). Debt drops by EUR1,160m, and

stands at EUR8,241m and EUR8,139m covenants (3.7x vs. 4.5x Dec’15).

Investments dropped (EUR198m).

Conclusion: Excellent results and cash generation. We remain attentive to the

new tariffs for the next 5 year period. Neutral reiterated.

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Neutral

135,95


133,80



Target price: EUR

Share price: EUR

Reuters/Bloomberg AENA.MC/AENA SM

Market capitalisation (EURm) 20.393


Free float 32%


Daily avg. trad. vol. 12 mth (m) 47.811

Price high 12 mth (EUR) 136,00

Price low 12 mth (EUR) 94,07

Abs. perf. 1 mth 3,66%




Sales (m) 3.451 3.633 3.754

EBITDA (m) 2.098 2.222 2.298

EBITDA margin 60,8% 61,2% 61,2%

EBIT (m) 1.252 1.394 1.479

EBIT margin 36,3% 38,4% 39,4%

Net Profit (adj.)(m) 850 966 1.033

ROCE 6,4% 6,9% 7,5%

Net debt/(cash) (m) 9.402 8.440 7.625

Net Debt/Equity 2,2 1,7 1,4

Debt/EBITDA 4,5 3,8 3,3

Int. cover(EBITDA/Fin. int) 10,3 (28,6) 18,6

EV/Sales 7,3 7,7 7,2

EV/EBITDA 12,0 12,5 11,8

EV/EBITDA (adj.) 12,0 12,6 11,8

EV/EBIT 20,1 20,0 18,3

P/E (adj.) 18,6 21,1 19,7

P/BV 3,7 4,1 3,7

OpFCF yield 8,7% 6,7% 6,4%

Dividend yield 2,0% 2,4% 2,5%

EPS (adj.) 5,66 6,44 6,89

BVPS 28,69 33,28 36,95

DPS 2,71 3,22 3,44

SALES 9M15 9M16 %

Aeronautic 1,838.2 1,959.3 6.6%

Retail 568.2 626.9 10.3%

Other 284.5 304.5 7.0%

TOTAL 2,689.7 2,889.1 7.4%

9M15 9M16 %

Aeronautic 985.0 1,083.9 10.0%

Retail 479.1 532.9 11.2%

Other 128.4 142.7 11.1%

EBITDA 1,592.4 1,759.6 10.5%

RESULTS ACCOUNT 9M15 9M16 %

Amortisations/Prov -632.5 -611.3 -3.4%

Financial result -174.6 81.9 -146.9%

Associates 10.3 11.9 16.0%

Ordinary Result 795.6 1,242.1 56.1%

Taxes/Minorities -156.5 -297.7 90.3%

Net Income 639.1 944.4 47.8%

Source: AENA

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90

100

110

120

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vvdsvdvsdy

AENA Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Enaire 51%; TCI 11%; HSBC 5%;

Page 33 of 63


Eltel

Sweden/Materials, Construction & Infrastructure Analyser


Eltel (Neutral) Good results and cash generation

Q3 preview: Building confidence takes time

The facts: Eltel releases its Q3 results on 9 November 2016.

Eltel has issued two profit warnings within two months. The profit warnings have

been issued in a situation in which private equity firms have mainly exited the

company that was listed 18 months ago, the long-term CEO has left the company,

and business unit managers have sold some of their holdings. The risks relating

to the project business have been considerably bigger than we expected. The

markets' confidence in the company has suffered a severe blow.

Our analysis: Eltel expects EBITA to be EUR 8m in Q3 and EUR 10–15m in Q4.

The company has been having problems with the rail projects in Norway and the

power transmission network projects in Africa. Due to the made adjustments and

the low order intake in the segment, sales of Power Transmission are estimated

to decline in 2017. The sales of the Power Segment in H2 will offer an important

reference point based on which we can estimate the 2017 outlook.

We estimate that the company is about to breach its net debt/EBITDA covenant

of 4.0 in Q4. We do not find a share issue likely, but the financing problems will

restrain the company's dividend payment capacity significantly.

Conclusion & Action: The valuation reflects an EBITA margin of around 3.5%,

which would in practice mean a very small implicit margin expectation for the

project business (around 1/3 of sales). Due to the low visibility, our

recommendation is Neutral and our target price SEK 55, based on 10xEBITA17e.

Analyst(s):


[email protected]

+358 10 252 4408

Neutral

56.50


55.00



Target price: SEK

Share price: SEK

Reuters/Bloomberg ELTEL.ST/ELTEL SS

Market capitalisation (SEKm) 3,538


Free float 81%



Price high 12 mth (SEK) 99.25

Price low 12 mth (SEK) 50.00





Sales (m) 1,254 1,392 1,391

EBITDA (m) 72 40 64


EBIT (m) 47 14 39

EBIT margin 3.7% 1.0% 2.8%


ROCE 6.2% 1.7% 5.0%

Net debt/(cash) (m) 144 189 152




EV/Sales 0.5 0.3 0.3

EV/EBITDA 9.0 12.0 7.0

EV/EBITDA (adj.) 9.0 12.0 7.0

EV/EBIT 14.0 35.3 11.5

P/E (adj.) 13.4 nm 16.1

P/BV 1.3 0.9 0.8

OpFCF yield 13.6% 3.8% 15.9%


EPS (adj.) 0.69 0.03 0.36

BVPS 7.15 6.83 7.20

DPS 0.24 0.00 0.18

45

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65

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75

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85

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95

100


vvdsvdvsdy

ELTEL OMXS All (Rebased)Source: Factset

Shareholders: 3i 20%; Zeres Capital 11%; The Fourth

Swedish National Pension Fund 9%;

Page 34 of 63


Ferrovial

Spain/Materials, Construction & Infrastructure Analyser


Ferrovial (Accumulate) Q3 preview: Building confidence takes time

Heathrow extension has been approved

The facts: British Government approved Heathrow third runaway construction.

Our analysis: This decision adopted by British Government should be approved

by Parliament so the formal approval should be extended another 18/24 months.

This project will require GBP 17 bn investments and infrastructure construction

will require GBP 11.000m. Construction will start in 2020 and will be finished by

2025. Capacity will be increased by 54% in terms of flights and 88% in terms of

passengers.

Conclusion & Action: Ferrovial owns 25% of HR representing 7.4% of our

estimated equity. Good price of news, but difficult to quantify by now, but our

impression is that the impact on Ferrovial will be moderate.

Analyst(s):

Rafael Fernández de Heredia, GVC Gaesco Beka

[email protected]

+34 91 436 78 08

Accumulate

18.68


22.10



Target price: EUR

Share price: EUR

Reuters/Bloomberg FER.MC/FER SM



Free float 65%









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

EBITDA (m) 1,024 980 973

EBITDA margin 10.6% 10.5% 10.1%

EBIT (m) 899 1,021 725

EBIT margin 9.3% 10.9% 7.5%


ROCE 8.0% 9.4% 6.5%

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




EV/Sales 1.2 1.1 1.1

EV/EBITDA 11.4 10.2 10.4

EV/EBITDA (adj.) 11.4 10.2 10.4

EV/EBIT 13.0 9.8 14.0

P/E (adj.) 21.3 20.8 31.1

P/BV 2.5 2.2 2.3

OpFCF yield 3.3% 4.2% 5.2%


EPS (adj.) 0.98 0.90 0.60

BVPS 8.27 8.44 8.29

DPS 0.71 0.73 0.75

15

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18

19

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21

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23

24

25


vvdsvdvsdy

FERROVIAL Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Del Pino Family 36%;

Page 35 of 63


Lehto

Finland/Materials, Construction & Infrastructure Analyser


Lehto (Accumulate) Heathrow extension has been approved

Q3 preview: A smaller quarter in store again

The facts: Lehto Group releases its Q3 business review on 17 November. A

business review is a more concise version of the interim report. The company

expects sales growth to be at least in accordance with the average growth target

(10–15%) and operating profit to be around 8–10% of net sales. We estimate that

sales will grow 22% and the EBITA margin will be 9.8% in 2016 (cons. 20% and

10%). In addition, the company has specified that sales and EBIT are expected to

be higher in H2 than in H1. We estimate that H2 will represent 58% of full-year

sales and EBIT.

Our analysis: We predict Q3 sales of EUR 82m and EBIT of EUR 6.1m. The

margin would thus be 7.4%, which is weaker than in H1 (10%). Lehto has not

published benchmark data for the quarters of 2015. Besides our forecast,

FactSet's quarterly consensus also includes one forecast, amounting to EUR 9m.

It is typical of residential building companies that comply with the IFRS

recognition practice that Q3 is a small quarter and Q4 correspondingly bigger.

Earnings are swung by the timing of the completion of residential development

projects. A significant proportion of the residential production for the year is

typically completed in Q4. Lehto's Q2 results were strong since the volume of

completed apartments was high.

After the Q2 results, Lehto has announced a contract worth EUR 25m for building

accommodation for the nuclear power plant site in Pyhäjoki and an acquisition in

renovation construction. Furthermore, the company has agreed on building a total

of 188 apartments for Etera and VVO. We have not yet included the impact of

these in our forecasts.

Conclusion & Action: Even though Lehto's valuation multiples have limited

upside, its earnings growth still offers potential, maybe not in Q3 but in Q4 next

year. For the time being, we repeat our Accumulate recommendation and our

target price of EUR 9.

Analyst(s):


[email protected]

+358 10 252 4408

Accumulate

9.09


9.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg LEHTO.HE/LEHTO FH



Free float 28%







Abs. perf. 12 mth


Sales (m) 276 336 413

EBITDA (m) 29 35 41

EBITDA margin 10.4% 10.4% 10.0%

EBIT (m) 27 33 39

EBIT margin 9.9% 9.8% 9.4%


ROCE 108.3% 52.3% 41.2%

Net debt/(cash) (m) (8) (54) (51)


Debt/EBITDA -0.3 -1.6 -1.2

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

EV/Sales 1.4 1.1

EV/EBITDA 13.3 11.4

EV/EBITDA (adj.) 13.3 11.4

EV/EBIT 14.1 12.1

P/E (adj.) 20.6 17.5

P/BV 4.9 4.1

OpFCF yield 0.7% 1.3%


EPS (adj.) 0.36 0.44 0.52

BVPS 0.57 1.86 2.21

DPS 0.14 0.18 0.21

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 Sep 16 Oct 16

vvdsvdvsdy

LEHTO OMXH (Rebased)Source: Factset

Shareholders: Lehto Invest Oy 37%; Myllymäki Asko

11%; Kinnunen Mikko 4%;

Page 36 of 63


Ramirent

Q3/2015a Growth


Sales 177 176 1% 165 7% 675 672 0%

Total EBIT 25.3 26.6 -5% 22.6 12% 63 65 -2%


#DIV/0!

PTP 21.8 22.8 -4% 17.7 23% 51 54 -5%

EPS 0.16 0.18 -11% 0.13 17% 0.37 0.42 -13%

#DIV/0!

DPS #DIV/0! 0.40 0.40 0%


Q3/2016e 2016e

Ramirent



Ramirent (Accumulate) Q3 preview: A smaller quarter in store again

Q3 preview: Focus on the debut of the new CEO

The facts: Ramirent releases its Q3 results on 4 November 2016.

Our analysis: We expect rental income growth to accelerate in Q3, driven by

Finland, and the trend in gross margin to be consequently positive. Fixed costs

were high in Q2 and we expect them to remain higher than normal in H2 as well.

Even though the 2016 guidance of an improving EBITA margin leaves some

uncertainty factors, as it requires markedly better profitability in H2 than in H1, we

have emphasised in our view the outlook in the longer term.

The Nordic order book of construction companies grew 18% on an annual basis

at the end of Q2. The volumes of building construction are showing two-digit

growth in both Sweden and Finland. In Norway, building construction has started

to grow slightly but order growth is two-digit. 80% of Ramirent's sales come from

Sweden, Finland and Norway. All this should lend considerable support to the

company against the slight weakness of Latvia, and Central Europe, which is

suffering from delays in EU funding. The Nordic market leaders Cramo and

Ramirent have been struggling for a long time with weak pricing, especially in

Sweden, due to the low cost of capital and the competitive pressure it brings, we

estimate. Cramo commented that prices have finally started to underpin earnings

in Q2 and delivered a strong margin for Q2. We estimate that Ramirent should

also be supported by the improving pricing.

Conclusion & Action: Ramirent's share price has risen sharply and exceeded

the peak level preceding the disappointing Q2 results. Even though visibility into

H2 is weakened by the problems with companies' profitability in Sweden, the

robust market performance and the anticipated policy lines of the new CEO Tapio

Kolunsarka support the share.

Analyst(s):


[email protected]

+358 10 252 4408

Accumulate

7,85


7,80



Target price: EUR

Share price: EUR

Reuters/Bloomberg RMR1V.HE/RMR1V FH



Free float 71%



Price high 12 mth (EUR) 7,86

Price low 12 mth (EUR) 5,05





Sales (m) 636 675 716

EBITDA (m) 168 176 202

EBITDA margin 26,4% 26,1% 28,3%

EBIT (m) 58 63 83

EBIT margin 9,1% 9,4% 11,7%


ROCE 6,8% 7,1% 9,0%

Net debt/(cash) (m) 281 313 333

Net Debt/Equity 0,9 1,0 1,0

Debt/EBITDA 1,7 1,8 1,6

Int. cover(EBITDA/Fin. int) 14,7 14,5 15,6

EV/Sales 1,5 1,7 1,6

EV/EBITDA 5,7 6,5 5,8

EV/EBITDA (adj.) 5,7 6,5 5,8

EV/EBIT 16,6 18,1 14,0

P/E (adj.) 18,2 21,7 15,7

P/BV 2,2 2,7 2,6

OpFCF yield -1,5% -1,2% 1,9%

Dividend yield 5,1% 5,1% 5,4%

EPS (adj.) 0,35 0,36 0,50

BVPS 2,94 2,90 3,00

DPS 0,40 0,40 0,42

5,0

5,5

6,0

6,5

7,0

7,5

8,0

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

vvdsvdvsdy

RAMIRENT OMXH (Rebased)Source: Factset

Shareholders: Nordstjernan AB 28%; Oy Julius Tallberg

Ab 11%; Varma Mutual Pension

Insurance Co 5%;

Page 37 of 63


SRV Yhtiöt

Q3/2015a Growth


Sales 226 219 3% 187 21% 873 874 0%

Total EBIT 6.5 5.9 8% 4.1 57% 32 31 3%


#DIV/0!

PTP 3.7 3.9 -6% 0.1 7304% 15.1 17 -9%

EPS 0.05 0.03 62% -0.02 -316% 0.13 0.23 -44%

#DIV/0!

DPS #DIV/0! 0.10 0.11 -9%


Q3/2016e 2016e

SRV



SRV (Accumulate) Q3 preview: Focus on the debut of the new CEO

Q3 preview: Significant earnings growth driven by residential construction

The facts: SRV will report its Q3 results on 3 November. Due to the completion

schedules of residential production, a considerable proportion of earnings is

generated in Q4, so Q3 is a small quarter in terms of earnings. SRV expects

sales and EBIT to grow in 2016. We do not expect any guidance revisions in Q3

since the biggest uncertainty factor is whether the projects scheduled for

December will be completed on time. The guidance may be upgraded at the turn

of the year since we expect full-year EBIT to increase by one-third.

Our analysis: We expect SRV's EBIT growth to be the fastest in the sector in

2016–2017. Growing financial expenses will, however, cut earnings growth in

2016, so EPS will not grow markedly until in 2017.

SRV's earnings growth driver is the higher operating volume in residential

development projects. The company reacted swiftly to the pick-up in demand by

raising housing starts from 330 to 802 units last year. About double the amount

of residential units will be completed into the 2016 earnings (503 vs. 247 in 2014),

and in 2017 the number of residential units recognised as revenue should rise to

800. An interesting factor in view of the outlook is housing starts.

Conclusion & Action: SRV's share has stabilised at around EUR 4.50. The P/E

valuation on the 2017 forecasts is at the long-term level of construction firms at

11.5. The balance sheet is stretched but the valuation has upside if earnings

growth continues in 2018 in line with our forecast and economic conditions in

Russia continue to improve, enabling future exits from shopping centres.

Analyst(s):


[email protected]

+358 10 252 4408

Accumulate

4.53


4.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg SRV1V.HE/SRV1V FH



Free float 100%









Sales (m) 751 873 1,036

EBITDA (m) 28 35 53


EBIT (m) 24 32 49

EBIT margin 3.3% 3.6% 4.8%


ROCE 7.1% 7.7% 10.7%

Net debt/(cash) (m) 231 282 305




EV/Sales 0.6 0.7 0.6

EV/EBITDA 16.6 17.0 11.8

EV/EBITDA (adj.) 16.6 17.0 11.8

EV/EBIT 19.0 18.9 12.6

P/E (adj.) 13.4 22.7 9.8

P/BV 0.7 1.0 0.9

OpFCF yield 23.9% -15.0% -5.0%


EPS (adj.) 0.23 0.20 0.46

BVPS 4.58 4.62 4.91

DPS 0.10 0.10 0.11

2.0

2.5

3.0

3.5

4.0

4.5

5.0


vvdsvdvsdy

SRV OMXH (Rebased)Source: Factset

Shareholders: Kokkila Ilpo 22%; Kolpi Investments Oy

19%; Kokkila Timo 13%;

Page 38 of 63


Vinci

France/Materials, Construction & Infrastructure Analyser


Vinci (Accumulate) Q3 preview: Significant earnings growth driven by residential construction

9M 2016: reported figures miss the consensus by EUR200m

The facts: Without drama, it is true, published figures slightly diverged from

provisional ones. Vinci published consolidated revenues of EUR27.6bn, lower

than consensus revenues of EUR27.8bn (a difference of EUR200m, with the

guilty party being identified as the Vinci Énergies segment). Guidance has not

been changed (slight fall in revenues, rise in operating income and net income).

Our analysis: 9M revenues posted an organic decrease of -2.9% (-2.6% in H1,

-3.4% in Q3). The trend remains globally positive like in H1 but shows a two-

speed trend: very buoyant rate for concession business lines which posted

unwavering growth (H1 at + 5.8%, Q3 at +6.6%), but the opposite, i.e. a laborious

trend for contracting business lines, for which revenues fell by 5.4% l-f-l in Q3.

Vinci Énergies, an asset traditionally well managed (Quartz, a very efficient

software package for bidding and monitoring business) sprang a negative

surprise (stable in H1 but a decrease of 5.4% in Q3 focused on International

which fell by 7.6%, partially due to one-off invoicing delays in Germany with, in

principle, no impact on margins), as well as in France.

Conclusion & Action: IV maintained at EUR71. Given the momentum shown on

more profitable business lines (airport concessions, Cofiroute and ASF), Vinci

should have no difficulty in improving its results and nourishing its shareholders.

Analyst(s):

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

+33 1 53 48 80 65

Accumulate

67.48


71.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg SGEF.PA/DG FP



Free float 81%









Sales (m) 39,158 38,530 39,064

EBITDA (m) 5,966 6,188 6,352

EBITDA margin 15.2% 16.1% 16.3%

EBIT (m) 3,755 4,009 4,143

EBIT margin 9.6% 10.4% 10.6%

Net Profit (adj.)(m) 2,042 2,276 2,374

ROCE 7.7% 8.0% 8.4%

Net debt/(cash) (m) 12,439 12,298 10,853




EV/Sales 1.2 1.4 1.3

EV/EBITDA 8.0 8.6 8.1

EV/EBITDA (adj.) 8.0 8.5 8.0

EV/EBIT 12.7 13.2 12.4

P/E (adj.) 16.2 16.8 16.1

P/BV 2.3 2.5 2.3

OpFCF yield 8.6% 7.2% 6.7%


EPS (adj.) 3.65 4.01 4.18

BVPS 25.69 27.25 29.17

DPS 1.84 1.95 2.00

52

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vvdsvdvsdy

VINCI Stoxx Construction & Materials (Rebased)Source: Factset

Shareholders: Salari¿s/Employees 9%; Qatar Diar Real

Estate 4%; Treasury stock 6%;

Page 39 of 63


Axel Springer

Germany/Media Analyser

MEDIA

Axel Springer (Neutral) 9M 2016: reported figures miss the consensus by EUR200m

Dull 9M results could put pressure on FY guidance

The facts: We expect Q3 results to allow SPR to confirm existing operational

guidance although we anticipate consensus moving towards the lower end of the

guided range. However, higher financing charges are likely to make it difficult for

the group to record growth in adjusted EPS this year. We lower our target price

to EUR 51 but retain our Neutral rating.

Our analysis: For Q3-16 we model sales of EUR 807m (+1%) making for 9M-16

EUR 2.39bn (+1%). Thus existing guidance calling for annual sales around the

2015 level is still likely: we assume +1%. In terms of EBITDA despite modelling

strong 10% growth in Q3, with less than 5% at 9M, annual guidance calling for

mid to high-single digit growth is just achievable (but equinet +4%).

By division, Digital Classifieds is expected to be the main sales driver growing by

11% to EUR 214m with the real estate segment recording the strongest

development, but good growth also anticipated in job classifieds and general

segments. The slowing vs previous quarters reflect lower contribution from

acquisitions plus high single-digit organic growth. With flat margins EBITDA of

EUR 87m (+12%) is forecast in Q3.

In Paid Models we look for 4% sales decline to EUR 365m with national

businesses down 1% and international operations 12% lower following the

disposal of the Swiss titles. For EBITDA we see EUR 52m (+4%) with slightly

faster growth abroad supported by the first eMarketeer contribution.

Marketing Models could record 4% sales growth to EUR 213m, largely from

Reach-based models since the Performance models is the segment most

affected by Brexit FX hit. We expect 5% growth in EBITDA, but 9M will still be

down 1%. The division has been addressing its costs base, but sterling’s

devaluation will weigh on future profits.

Conclusion & Action: Assuming lower margins in our DCF, we lower our TP to

EUR51 and thus, Axel Springer shares look a little under-valued at the moment.

We believe that the key issue here is the depressed valuations seen in the

sector at large (particular digital peers) which has under-performed the weak

stock markets in 2016. For the time being we maintain a Neutral rating on the

shares.

Analyst(s):

Mark Josefson, equinet Bank

[email protected]

+4969-58997-437

Neutral

45.11


51.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg SPRGn.DE/SPR GR



Free float 39%









Sales (m) 3,295 3,321 3,441

EBITDA (m) 663 709 569

EBITDA margin 20.1% 21.4% 16.6%

EBIT (m) 463 508 360

EBIT margin 14.0% 15.3% 10.5%


ROCE 5.2% 4.7% 8.0%

Net debt/(cash) (m) 999 1,280 1,242



Int. cover(EBITDA/Fin. int) 42.2 high high

EV/Sales 2.1 2.1 2.0

EV/EBITDA 10.4 9.8 12.1

EV/EBITDA (adj.) 12.3 11.9 10.9

EV/EBIT 14.9 13.6 19.1

P/E (adj.) 23.2 20.3 16.9

P/BV 2.5 2.7 2.6

OpFCF yield 4.7% 4.2% 7.4%


EPS (adj.) 2.22 2.22 2.67

BVPS 20.69 16.71 17.16

DPS 1.79 1.66 1.85

42

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46

48

50

52

54


vvdsvdvsdy

AXEL SPRINGER MDAX (Rebased)Source: Factset

Shareholders: Axel Springer Gesellschaft fuer Publizistik

GmbH & Co. 47%; General Atlantic LLC

8%; Friede Springer 5%;

Page 40 of 63


Gruppo Ed. L’Espresso

Italy/Media Analyser

MEDIA

Gruppo Ed. L'Espresso (Accumulate) Dull 9M results could put pressure on FY guidance

Q3 2016 Pre: negative trends expected to continue

The facts: Q3 2016 preview (publication today).

Our analysis: We expect once again weak top-line taking into account the

negative performance of the Italian print advertising segment and the downward

acceleration in newspapers diffusion.

According to NMR figures, newspaper advertising declined by 7.7% Y/Y in

July/August vs. -5.4% in Q2, magazines deteriorated to -6.6% vs. -1.8%, however

radio strongly improved with +3.9% vs. a flattish (-0.3%) trend in Q2. Internet also

back to growth at +1.6% (-4.1%). The fall in copies for La Repubblica kept to

around 16% in August, in line with the trend of the market leader "Il Corriere". We

expect Q2 EBITDA to decline by EUR 1/2m Y/Y, depending on the balance

between new restructuring costs and the potential further release of past

provisions. We expect net cash to have further increased by EUR 4/5m vs. the

June 30, 2016 level thanks to positive NWC dynamics.

Editoriale L’Espresso 9m 2016 PREVIEW (EUR m)

Q3 2015a Q3 16e Y/Y 9m 2015a 9m 16e Y/Y

Sales 133.9 128.5 -4.0% 439.6 421.4 -4.1%

advertising 67.5 65.1 -3.5% 245.0 235.8 -3.7%

Circulation&Other 66.4 63.4 -4.5% 194.6 185.6 -4.6%

EBITDA rep. 9.9 8.5 -14.1% 40.9 35.8 -12%

margin 7.4% 6.6% -0.8pp 9.3% 8.5% -0.8pp

EBIT 6.3 4.7 -25% 29.9 24.6 -18%

EBT 4.3 3.7 -14.0% 32.9 20.1 -39%

Net Debt (cash) 8.1 (22.0) nm 8.1 (22.0) nm

Source: Company data, BANCA AKROS estimates (adjusted for Jinny)

Outlook: In our preview of H1 results, we cut our revenues estimates 2016/18 by

5% on average, with EBITDA impacted by 10% and net income, FCFE by

13/14%. Post-H1 2016 results, we have only marginally trimmed our forecasts.

The acquisition of ITEDI (La Stampa/Il Secolo XIX) is due to be finalized by Q1

2017; subject to the approval of relevant authorities. L'Espresso is selling some

regional newspapers in order to comply with the 20% threshold on circulation. We

have not included the impact of the deal in our estimates, or in the target price.

Conclusion & Action: We expect another weak quarter; the main positive point

is the net cash position, which is set to increase further.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Accumulate

0.74


1.12



Target price: EUR

Share price: EUR

Reuters/Bloomberg ESPI.MI/ES IM



Free float 40%









Sales (m) 605 581 579

EBITDA (m) 48 50 53


EBIT (m) 30 35 38

EBIT margin 5.0% 6.1% 6.6%


ROCE 4.2% 3.9% 4.0%

Net debt/(cash) (m) 11 (21) (23)


Debt/EBITDA 0.2 -0.4 -0.4

Int. cover(EBITDA/Fin. int) 5.4 8.4 high

EV/Sales 0.6 0.4 0.4

EV/EBITDA 7.3 4.4 4.1

EV/EBITDA (adj.) 5.9 4.2 4.0

EV/EBIT 11.4 6.2 5.7

P/E (adj.) 24.3 20.9 16.0

P/BV 0.7 0.5 0.5

OpFCF yield 7.4% 11.1% 0.2%


EPS (adj.) 0.04 0.04 0.05

BVPS 1.44 1.48 1.53

DPS 0.00 0.00 0.00

0.65

0.70

0.75

0.80

0.85

0.90

0.95

1.00

1.05


vvdsvdvsdy

EDITORIALE L'ESPRESSO Stoxx Media (Rebased)Source: Factset

Shareholders: Carlo De Benedetti 53%; Eredi

Caracciolo 12%;

Page 41 of 63


Havas

France/Media Analyser

MEDIA

Havas (Buy) Q3 2016 Pre: negative trends expected to continue

Slightly disappointing Q3-16 but encouraging prospects!

The facts: 9M 2016 revenues at EUR1,624m (+4.7%) posting organic growth of

+2.7%, i.e. a Q3-16 at EUR537m up by +2.0% organically, slightly lower than our

estimates (EUR538m +2.3%) and those of the consensus (EUR534m/+2.5%). To

be compared with Publicis (+0.2%), Interpublic (+4.3%) and Omnicom (+3.2%).

The company held a conference call.

Our analysis: 1) new growth slowdown after a Q1-16 at +3.4% and Q2-16 at

+2.7%. The base effect was still difficult (+5.5% in Q3-15) but will improve in Q4

(+3.1% in Q4-15); 2) in Q3-16, Europe (50% of revenues) performed very well with

an impressive +7.7% whereas all the other regions switched into negative growth

(North America -1.2%, APAC & Africa -7.1% and LatAm-6.3%); 3) strong

commercial momentum with 9M Net New Business at EUR2,054m vs EUR1,377m.

Outlook: in 2016, the group is expecting an improvement for North America in Q4.

The organic growth target which had been revised up to between 3% and 4% has

now been fixed at between +2.5% and +3%. We have adjusted our forecasts to

+2.9% vs +3.5% and have left our profitability growth estimate unchanged (+10bp)

at 14.5%. The group is going into 2017 with confidence thanks to a return to growth

for APAC, LatAm and North America. We have revised down our forecast to +3%

vs +3.5% as for Publicis, i.e., a 1% cut to our 2016-18 EPS estimates. Comments

on Bolloré’s declaration of intentions (for six months) communicated to French

market watchdog AMF on the fact that it is considering with Vivendi “to study

synergies or possible tie-ups between their respective activities in media and

communication: “time will tell”!

Conclusion & Action: For the second consecutive quarter, Havas no longer

outperformed its market. This does not invalidate our profitable growth scenario

even though momentum is less strong. The under-leveraged financial structure

(which helps to envisage a cash return and/or acquisitions) and the speculative

appeal in the long run (disposal or transfer to Vivendi, offers from WPP or Dentsu,

etc.) are support factors for the stock. Make the most of a possible decrease to

buy more shares.

Analyst(s):

Emmanuel Chevalier, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 72

Buy

7.43


8.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg EURC.PA/HAV FP



Free float 61%









Gross margin (m) 2,188 2,262 2,330

EBITDA (m) 343 361 382

EBIT (m) 293 309 329

EBIT margin 13.4% 13.7% 14.1%


ROCE 16.2% 17.1% 18.1%

Net debt/(cash) (m) (128) (278) (431)


Debt/EBITDA -0.4 -0.8 -1.1


EV/Sales 1.5 1.3 1.2

EV/EBITDA 9.6 8.3 7.4

EV/EBITDA (adj.) 9.1 7.8 7.1

EV/EBIT 11.3 9.6 8.6

P/E (adj.) 18.9 16.5 15.4

P/BV 2.3 2.0 1.8

OpFCF yield 7.7% 6.8% 7.3%


EPS (adj.) 0.41 0.45 0.48

BVPS 3.42 3.72 4.04

DPS 0.15 0.17 0.19

6.2

6.4

6.6

6.8

7.0

7.2

7.4

7.6

7.8

8.0

8.2


vvdsvdvsdy

HAVAS Stoxx Media (Rebased)Source: Factset

Shareholders: Bollor¿ M¿dias Investissements 37%;

Rod¿s Family 2%; Treasury shares

0.00%;

Page 42 of 63


Impresa

Portugal/Media Analyser

MEDIA

Impresa (Buy) Slightly disappointing Q3-16 but encouraging prospects!

3Q16 results below expectations

The facts: Yesterday Impresa disclosed the 3Q16 results and today the company

will hold a conference call at 15.00. The top line, EBITDA and bottom-line were

below our forecasts mainly due to a much worse than anticipated performance of

the television segment.

Our analysis: On the 3Q16 total revenues dropped 14.5% YoY (-8.9% YoY in the

9M16) with the television and publishing segment falling 15.5% and 13% YoY

respectively (-7.7% and -12.6% YoY respectively in the 9M16).

Revenues were lower than expected particularly in the advertising revenues of the

television segment: we were expecting an increase of 4.5% in the 3Q16 YoY

while we were surprised to see that advertising revenues dropped more than

8.3% with the company clearly loosing market share.

The 8.1% reduction in operating costs was not sufficient to offset the drop in the

top line and the EBITDA in the 3Q16 decreased YoY from EUR 4m to EUR 0.3m.

Conclusion & Action: Impresa presented a poorer than expected results, largely

due to a decrease in the advertising market in the 3Q while we were expecting an

increase. Considering this we will have to make a downwards adjustment in our

estimates for the FY16.

Analyst(s):

Helena Barbosa, Caixa-Banco de Investimento

[email protected]

+351 21 389 6831

Buy

0.23


0.75



Target price: EUR

Share price: EUR

Reuters/Bloomberg IMPA.LS/IPR PL



Free float 28%









Sales (m) 231 215 216

EBITDA (m) 23 24 26


EBIT (m) 19 20 22

EBIT margin 8.1% 9.5% 10.4%


ROCE 4.3% 4.7% 5.0%

Net debt/(cash) (m) 179 171 167




EV/Sales 1.0 0.9 0.9

EV/EBITDA 10.8 8.1 7.3

EV/EBITDA (adj.) 10.8 8.1 7.3

EV/EBIT 13.0 9.5 8.4

P/E (adj.) 19.6 4.7 4.0

P/BV 0.6 0.3 0.2

OpFCF yield 5.6% 21.6% 11.3%


EPS (adj.) 0.02 0.05 0.06

BVPS 0.84 0.89 0.95

DPS 0.00 0.00 0.00

EUR m 9M15 9M16 % Var 9M16e 3Q15 3Q16 % Var 3Q16e

Revenues 164.5 149.8 -8.9% 153.8 53.0 45.3 -14.5% 49.2

TV 123.1 113.6 -7.7% 117.5 39.6 33.4 -15.5% 37.3

Publishing 40.4 35.3 -12.6% 35.6 13.1 11.4 -13.0% 11.7

Others 1.0 0.9 -11.0% 0.7 0.3 0.4 61.9% 0.3

Operating Costs 150.2 141.1 -6.1% 143.0 49.0 45.0 -8.1% 47.1

EBITDA 14.2 8.7 -38.6% 10.8 4.0 0.3 -93.3% 2.2

EBITDA margin 8.7% 5.8% -2.9pp 7.0% 7.5% 0.6% -7.0pp 4.5%

TV 14.4 11.2 -21.7% 13.0 4.0 0.7 -82.6% 2.5

Publishing 2.3 0.1 -95.4% 0.4 0.7 0.2 -72.3% 0.5

Others -2.5 -2.6 6.2% -2.7 -0.8 -0.6 -17.7% -0.8

Depreciations 2.9 2.6 -10.3% 2.6 1.0 0.9 -10.1% 0.9

Financial results -9.2 -6.0 -34.4% -6.4 -2.2 -2.2 2.2% -2.0

Net Income 1.1 -0.6 n.m 1.0 0.4 -1.8 n.m -0.7

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.60

0.65


vvdsvdvsdy

IMPRESA Stoxx Media (Rebased)Source: Factset

Shareholders: Impreger 50%; Invesco 5%; Madre 5%;

FIL Ltd 5%; Grupo BPI 4%; Santander

3%;

Page 43 of 63


Galp Energia

Portugal/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

Galp Energia (Accumulate) 3Q16 results below expectations

3Q16 results: higher output and robust R&M

The facts: Galp will release its 3Q16 results on October 28 before the opening of

the Lisbon market. We anticipate EBITDA RCA of EUR 388m and net income

RCA of EUR 103m. Consensus for EBITDA and net income stands at EUR 377m

and EUR 115m, respectively.

Our analysis: The company already published its trading update on October 14,

disclosing key operating figures. Working interest production in the quarter rose

to 74 kboed from 54.7 kboed in Q2 and 45.7 kboed in 3Q15. The large qoq

increase is explained by a weaker second quarter when the ramp up of the

Brazilian pre-salt project of Lula/Iracema was hurt by maintenance operations

carried out in April in the Lula Pilot and Lula Northeast areas, and also by the lack

of connection of FPSO #4 to the Cabiúnas gas pipeline that restrained production

in that unit. Therefore, the reading of Q3 figure must be adjusted by this negative

base effect of Q2. Despite that, the ramp up of production in Brazil continues to

be the main highlight of the company’s investment case. Net entitlement

production reached 68.8 kboed from 51.7 kboed in Q2. Processed raw materials

in refining stood at 29.4 million barrels up from 26.3 million barrels in Q2, but

slightly less than the 29.8 million barrels of 3Q15. Product sales were of 4.3

million tons in the quarter (4.8 million in 3Q15), of which 2.3 million to direct

customers (2.4 million in 3Q15). Gas sales stood at 1.750 bcm in 3Q16 from

1.909 bcm in the same quarter of 2015. Benchmark NWE refining margin was 2.3

$/bbl vs. 6.2 $/bbl in 3Q15 and 2.9 $/bbl in Q2. As mentioned, the large qoq

increase in crude production is mainly explained by a base effect but,

nonetheless, the ramp up in production remains the single most important item in

Galp’s medium-long term investment case. After normalization of production in

the first units deployed in Lula/Iracema, the fourth FPSO (Cidade de Itaguaí)

reached plateau, the fifth (Cidade de Maricá) continued to ramp up and the sixth

unit (Cidade de Saquarema) contributed with 1 production well in the full quarter

and with a second in October. Flow rates are expected to remain high close to 30

kboed.

Conclusion & Action. In our opinion, the main highlights of the quarter are

related with the ramp up of production in Brazil and the good performance of R&M

despite the qoq decrease of benchmark refining margins. Management should

give more details on earnings and project delivery in the conference call on the

28th

, after which we’ll publish our comment on results.

Analyst(s):

Carlos Jesus, Caixa-Banco de Investimento

[email protected]

+351 21 389 6812

Accumulate

12.75


12.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg GALP.LS/GALP PL



Free float 60%









Sales (m) 15,517 13,858 16,183

EBITDA (m) 1,564 1,386 1,955

EBITDA margin 10.1% 10.0% 12.1%

EBIT (m) 996 715 1,161

EBIT margin 6.4% 5.2% 7.2%


ROCE 9.6% 7.4% 11.2%

Net debt/(cash) (m) 2,421 2,481 2,462




EV/Sales 0.7 0.9 0.8

EV/EBITDA 7.2 9.4 6.7

EV/EBITDA (adj.) 7.2 9.4 6.7

EV/EBIT 11.4 18.3 11.2

P/E (adj.) 13.9 24.2 19.0

P/BV 1.9 2.1 2.1

OpFCF yield 11.4% -0.8% 1.6%


EPS (adj.) 0.77 0.53 0.67

BVPS 5.76 5.97 6.15

DPS 0.41 0.50 0.50

7

8

9

10

11

12

13

14


vvdsvdvsdy

GALP ENERGIA Stoxx Oil & Gas (Rebased)Source: Factset

Shareholders: Amorim Energia 33%; Parpública 7%;

RCA figures (EURm) 3Q15 2Q16 3Q16e YoY QoQ 9M16e 9M15

EBITDA 411 337 388 -5.6% 15.1% 1,018 1,255

E&P 89 86 137 271 303

R&M 245 143 172 463 634

G&P 72 97 78 265 295

Depreciations -140 -144 -176 -471 -422

Provisions -8 -8 -5 -18 -17

EBIT 263 185 207 -21.2% 12.1% 529 816

Net financials -11 15 -22 -4 -94

Associates 17 24 25 70 60

Investments 0 0 0 0 1

Taxes -69 -79 -90 -208 -248

Minority interests -20 -12 -17 -38 -46

Net income 180 133 103 -43.0% -22.9% 350 490

EPS 0.22 0.16 0.12 0.42 0.59

Page 44 of 63


Neste

Q3/2015a Growth

EURm Q3a vs. Cons. OP Cons. Diff.

Oil Products 1,961 4% 1,599 1,886 -15% 2,060 -22%

Renewable Products 640 -3% 729 657 11% 582 25%

Oil Retail 925 -4% 985 960 3% 991 -1%

Others 73 20% 65 61 7% 60 8%

Eliminations -564 #DIV/0! -464 #DIV/0! -670 -31%

Total sales 3,034 4% 2,913 2,928.0 -1% 3,023 -4%

Sales growth

EBIT

Oil Products 120.0 4% 83.9 115 -27% 178 -53%

Renewable Products 124.0 -12% 153.5 141 9% 75 104%

Oil Retail 25.0 -7% 25.0 27 -7% 27 -7%

Others -6.0 -500,0 % 10.0 -1 n.a. -1 -1100%

Eliminations 0.0 #DIV/0! -2.0 #DIV/0! 1 -300%

Total EBIT 264.0 -6% 270.4 281.0 -4% 281.0 -4%


PTP 239 #DIV/0! 250.4 #DIV/0! 281.0 -10.9 %

EPS 0.80 -2% 0.80 0.82 -2% 0.89 -9.7 %#DIV/0!

DPS #DIV/0!

Source : OP and Neste

Q3/2016e

Neste Corporation

Finland/Oil & Gas Producers Analyser

OIL & GAS PRODUCERS

Neste Corporation (Neutral) 3Q16 results: higher output and robust R&M

Recommendation Neutral while waiting for decisions

The facts: Neste’s comparable EBIT (EUR 264m) in Q3 was slightly lower than

our forecast (EUR 270m) and consensus (EUR 281m). Compared to our

forecasts, the result of the Oil Products division was clearly a positive surprise,

and the result of Renewable Products was lower than predicted, mainly due to

lower than estimated sales volumes.

Our analysis: As usual, the company did not issue earnings guidance for Q4 or

2016. The reference margins for Oil Products are estimated to be slightly higher

in Q4 than in Q3, and the reference margins for Renewable Products are

estimated to remain at the average level of 2015. The reference margin for Oil

Products has improved in October, and the Q4 outlook for Renewable Products is

supported by solid volume expectations and the seasonal strengthening of the

market in Europe as well as RIN prices that have remained at a high level.

Conclusion & Action: We are downgrading our target price to EUR 37.00 (from

EUR 38.00). Our recommendation is still Neutral. Our target price corresponds to

the P/E multiple average (12.0) calculated using our revised earnings forecast for

2016 and Neste’s 12-month forecasts for 2013–2016. The time horizon of the

valuation multiple corresponds to the period of consistently positive generation of

quarterly operating profit at Renewable Products.

In our opinion, the most significant themes during the next couple of quarters in

terms of share price formation are the decision about the Blender’s Tax Credit in

the US biofuel market in 2017 and the end result of the company’s survey

concerning the increase of the Renewable Products’ capacity.

Analyst(s):


[email protected]

+358 10 252 4409

Neutral

38.50


37.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg NESTE.HE/NESTE FH



Free float 50%









Sales (m) 11,128 11,295 12,250

EBITDA (m) 1,054 1,294 1,126


EBIT (m) 925 1,000 898

EBIT margin 8.3% 8.9% 7.3%


ROCE 16.0% 16.8% 15.2%

Net debt/(cash) (m) 1,270 859 477




EV/Sales 0.7 0.9 0.8

EV/EBITDA 7.9 8.3 9.2

EV/EBITDA (adj.) 7.9 8.3 9.2

EV/EBIT 9.0 10.7 11.5

P/E (adj.) 9.7 12.7 14.9

P/BV 2.3 2.7 2.5

OpFCF yield 2.6% 5.0% 5.3%


EPS (adj.) 2.84 3.03 2.58

BVPS 12.13 14.17 15.55

DPS 1.00 1.20 1.20

15

20

25

30

35

40

45


vvdsvdvsdy

NESTE CORPORATION Stoxx Oil & Gas (Rebased)Source: Factset

Shareholders: Prime Minister´s Office 50%; Ilmarinen

Mutual Pension Insurance Company 3%;

Varma Mutual Pension Insurance

Company 1.20%;

Page 45 of 63


Saipem

Italy/Oil Services Analyser

OIL SERVICES

Saipem (Neutral) Recommendation Neutral while waiting for decisions

One-offs weigh on Q3 – 2017 targets revised downwards

The facts: Saipem published its third quarter results yesterday after market

closing

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

operative level. The company’s bottom line was much worse than expected after

some EUR 2bn write-downs and write-offs; this was mainly related to the offshore

drilling division (around EUR 1.1bn) and the E&C offshore (around EUR 400m).

Q3 15 Q3 16 y/y% Q3 16e

revenues 3,072 2,610 -15.0% 2,521

EBITDA 321 328 2.2% 316

margin 10.4% 12.6%

12.5%

EBIT adj. 143 155

137

margin 4.7% 5.9%

5.4%

PBT 62 108 74.2% 106

Net profit 47 60 27.7% 68

One-off 7 -2,038

0

Net profit reported 54 -1,978

68

2016 guidance confirmed - The company confirmed its 2016 guidance of

revenues at EUR 10.5bn, EBIT of EUR 600m, net profit of EUR 200m and net

debt at EUR 1.5bn.

2017 revised downwards – the company also updated its 2017 guidance as

follows

old guidance consensus new guidance

Revenues > EUR 11bn EUR 9.4bn ~ EUR 10bn

EBIT ~ EUR 700m EUR 470m ~ EUR 400m

Net debt <EUR 1bn EUR 1.05bn <EUR 1.4bn

The main difference is a sizeably worse guidance on net debt: this revision is the

result of some dividend payments to third parties arising from SPV related to

specific contracts and worse net working capital in some projects (not disclosed)

in the Middle East. This latter component could be reversed in 2018.

As regards the Turkish Stream/South stream project the management said that

the was the possibility to find an agreement before the arbitration. It is our

understanding this agreement could include an award for the construction of the

Turkish stream.

The management also confirmed the focus on a cost-saving programme; this

includes an overall headcount reduction (800 staff headcount reduction in

Europe)

Conclusion & Action: we lower our target price to EUR 0.43/sh to take into

account the foregoing guidance especially as regards the net debt. In addition to

a rebound in oil prices the main upside relies on a positive settlement of the

dispute over the South Stream project. We change our recommendation to

Neutral from Accumulate.

Analyst(s):

Francesco Sala, Banca Akros

[email protected]

+39 02 4344 4240

Neutral

0.42


0.43


from Accumulate

Target price: EUR

Share price: EUR

Reuters/Bloomberg SPMI.MI/SPM IM



Free float 57%









Sales (m) 11,512 10,576 9,682

EBITDA (m) 508 1,238 1,012


EBIT (m) (452) 530 399

EBIT margin nm 5.0% 4.1%

Net Profit (adj.)(m) (806) (1,879) 220

ROCE -4.0% 10.4% 7.4%

Net debt/(cash) (m) 5,390 1,490 1,352




EV/Sales 0.5 0.5 0.5

EV/EBITDA 10.4 4.5 5.2

EV/EBITDA (adj.) 10.4 4.5 5.2

EV/EBIT nm 10.4 13.2

P/E (adj.) nm nm 19.2

P/BV 0.0 0.8 0.8

OpFCF yield -2187.1% -39.2% 5.4%


EPS (adj.) (1.83) (0.19) 0.02

BVPS 7.87 0.50 0.53

DPS 0.00 0.00 0.01

0.00

0.10

0.20

0.30

0.40

0.50

0.60

0.70


vvdsvdvsdy

SAIPEM FTSE MIB (Rebased)Source: Factset

Shareholders: ENI 30%; FSI 13%;

Page 46 of 63


Kering

France/Personal Goods Analyser

PERSONAL GOODS

Kering (Neutral) One-offs weigh on Q3 – 2017 targets revised downwards

Excellent Gucci and Saint Laurent performances in Q3

The facts: Kering reported Q3 revenues of EUR3,185m after the market

yesterday, fairly well ahead of our estimate (EUR3,075m) and the Factset

consensus (EUR3,096m), and showing solid organic growth (11%).

Our analysis: As was the case for LVMH, the ‘Luxury’ arm gathered pace

sequentially (+11% l-f-l), with a more undemanding base effect, driven by Gucci

(+17%), which benefited from the same factors as in Q2 (recovery for Wholesale,

increase with European clients), but above all the brand’s excellent creative

momentum faced with a less wait-and-see emerging market clientele. Saint

Laurent picked up speed (+34%) and became the division’s second-largest brand

in terms of revenues. Bottega Veneta suffered more (-10%) from over-exposure

to Asian clients while awaiting a fresh creative impetus to further penetrate

western clients, under the helm of Claus-Dietrich Lahrs, the former CEO of Hugo

Boss. The ‘Other brands’ posted performances in line (+3%), jewellery and the

younger fashion brands offsetting a still sluggish watches business. The ‘Sport &

LS’ arm, which is less directly exposed than Adidas to summer competitions,

maintained good momentum (+10% l-f-l) but currencies weighed more strongly (-

4%). The group did not give any guidance for Q4.

Conclusion & Action: The performance gap between brands is high but Gucci

and Saint Laurent turned in excellent showings. Demand could show signs of

volatility in the coming quarters, depending on tourist flows. Following on the

heels of LVMH, the publication confirms that the Luxury market harbours more

lasting potential to accelerate.

Analyst(s):

Arnaud Cadart, CM - CIC Market Solutions

[email protected]

+33 1 53 48 80 86

Neutral

188.40


180.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg KER.PA/KER FP



Free float 59%









Sales (m) 11,584 12,053 12,855

EBITDA (m) 1,662 2,121 2,389

EBITDA margin 14.3% 17.6% 18.6%

EBIT (m) 1,253 1,708 1,951

EBIT margin 10.8% 14.2% 15.2%

Net Profit (adj.)(m) 696 1,260 1,457

ROCE 6.2% 6.4% 7.0%

Net debt/(cash) (m) 4,679 4,291 3,784




EV/Sales 2.2 2.4 2.2

EV/EBITDA 15.2 13.6 11.9

EV/EBITDA (adj.) 12.3 13.3 11.8

EV/EBIT 20.2 16.9 14.5

P/E (adj.) 28.7 18.9 16.3

P/BV 1.8 2.0 1.9

OpFCF yield 3.3% 4.4% 4.9%


EPS (adj.) 5.51 9.97 11.53

BVPS 86.66 92.61 99.92

DPS 4.00 4.20 4.70

130

140

150

160

170

180

190

200


vvdsvdvsdy

KERING Stoxx Personal Goods (Rebased)Source: Factset

Shareholders: Artemis 41%; Own shares 0.00%;

Page 47 of 63


Reply

Italy/Software & Computer Services Analyser


Reply (Neutral) Excellent Gucci and Saint Laurent performances in Q3

Q3 2016 Pre: solid quarter expected

The facts: Q3 2016 preview (publication on November 10)

Our analysis: We expect a solid quarter, characterized by the contribution of

acquired businesses in Italy (the agency Xister) and UK. In the latter country, the

Brexit impact will be fully visible in Q3 through the 15.5% average depreciation of

the Pound, while the underlying business could have probably remained intact.

The main issue there is the profitability of some contracts, which have erratically

affected the past few quarters. In Germany, we expect some slow-down of Y/Y

revenue growth (unexpectedly close to 20% in the first half) coupled with double-

digit EBITDA margin. We expect a positive net cash position at c EUR 28m (EUR

72m as per March 31, 2016, EUR 23.3m at the end of June) also depending on

the payment terms and conditions of the recent two deals (undisclosed) and the

payment of the outstanding EUR 28m in earn-out (as of June 30, 2016).

Reply 9m 2016 Preview (EUR m)

Q3 15a Q3 2016e Y/Y 9M 2015a 9m 2016e Y/Y

Revenues 171 186 8.5% 517 572 10.8%

Italy 123 135 10.5% 379 418 10.3%

Germany* 30.1 31.6 5.1% 85.2 97.5 14.4%

UK 23.0 21.7 -5.5% 66.1 66.3 0.3%

EBITDA 23.0 25.9 12.5% 70.3 77.2 9.9%

mg 13.5% 14.0% 0.5% 13.6% 13.5% -0.1%

Italy EBITDA 16.8 19.6 16.9% 57.7 64.1 11.0%

Germany EBITDA 4.0 4.1 2.8% 8.1 10.3 26.6%

UK EBITDA 2.5 2.3 -8.0% 5.9 3.3 -44.2%

Other EBITDA na -0.15 nm na -0.4 nm

EBIT 20.5 23.3 13.4% 63.4 71.3 12.5%

EBT 19.2 23.3 21.1% 63.1 70.6 11.8%

Source: Company data, BANCA AKROS estimates

Outlook: following the publication of H1 2016 results, we had increased our

estimates for full-year revenues by 3% in FY 2016, 2% for the following two years

to include the better than expected underlying trends across countries and the

impact of recent M&A. The EBITDA impact was 0.8% this year, 2.2% and 3% in

2017 and 2018 respectively.

Conclusion & Action: we expect a solid but not exceptional quarter taking into

account the first Brexit impact; focus on cash generation.

Analyst(s):

Andrea Devita, CFA, Banca Akros

[email protected]

+39 02 4344 4031

Neutral

114.00


124.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg REY.MI/REY IM



Free float 38%









Sales (m) 706 776 817

EBITDA (m) 99 107 117

EBITDA margin 14.0% 13.8% 14.3%

EBIT (m) 89 97 105

EBIT margin 12.7% 12.5% 12.9%


ROCE 16.3% 25.5% 26.6%

Net debt/(cash) (m) (28) (55) (104)


Debt/EBITDA -0.3 -0.5 -0.9


EV/Sales 1.7 1.3 1.2

EV/EBITDA 12.0 9.5 8.3

EV/EBITDA (adj.) 12.0 9.5 8.3

EV/EBIT 13.2 10.4 9.2

P/E (adj.) 20.8 17.2 16.0

P/BV 4.0 3.1 2.6

OpFCF yield 1.7% 2.6% 5.0%


EPS (adj.) 6.07 6.61 7.14

BVPS 31.66 37.27 43.40

DPS 0.85 1.00 1.00

100

105

110

115

120

125

130

135

140


vvdsvdvsdy

REPLYSource: Factset

Shareholders: Rizzante Mario 53%; Shareholder value

mgmt AG 4%; Lodigiani Riccardo 1.90%;

JP Morgan 2.00%; Toqueville 1.20%;

Page 48 of 63


Tieto

Finland/Software & Computer Services Analyser


Tieto (Accumulate) Q3 2016 Pre: solid quarter expected

H2 earnings concentrated to Q4

The facts: Tieto's Q3 results were disappointing compared to forecasts. The

disappointment can be largely attributed to the Industry Solutions business,

where EBIT fell EUR 5m short of consensus expectations. The lacklustre

performance was caused by shifts in licence sales to Q4. The introduction of a

new organisation model also caused temporary additional costs for Q3 (around

EUR 3–5m). Despite the modest quarter, Tieto repeats its guidance that 2016

adjusted EBIT is expect to improve from the previous year (EUR 150.8m).

Our analysis: Based on the guidance, Tieto has to deliver EBIT excl. NRI of at

least EUR 48m in Q4. On our sales forecast this means an EBIT margin of 12.1%

when in Q4 2015 the EBIT margin was 13%. We expect profitability to improve

during the rest of the year on account of the sales of Industry Solutions that have

moved to Q4. Tieto expects the EBIT margin of Technology Services and

Modernization to be at the H1 level (10.5%) or better. In practice, these two

divisions account for nearly all of Tieto's EBIT. Based on the company's

comments, we expect profitability in Q4 to be very close to the Q4 2015 EBIT

margin. Taking into account the order book to be recognised this year, Tieto will

have accumulated sales at the end of Q3 corresponding to last year's level. We

assume that the company will still get some additional sales during Q4, which

would put its sales on a growth track of around 2%. We find the EBIT guidance

realistic.

Visibility into the 2017 and 2018 performance is weakened by the rapid

transformation in the IT industry, which increasingly emphasises the cloud model.

The transition has weighed on the profitability of Tieto's peers during the transition

phase. Tieto also commented that price competitiveness has become an

increasingly important competitive factor. Tieto's cash flow is strong and we

expect the company to be able to pay out an attractive dividend even in a more

distressed market environment.

Conclusion & Action: We have not made any major revisions to our EBIT or

sales forecasts. Our target price is based on the average of the peer group's P/E

and EV/EBITDA multiples for 2017 and 2018, the dividend yield and DCF

valuation. On the basis of this method, our target price rises to EUR 26.50 (from

EUR 25) and our new recommendation is Accumulate (prev. Neutral).

Analyst(s):

Hannu Rauhala, OP Corporate Bank

[email protected]

+358 10 252 4392

Accumulate

25.33


26.50


from Neutral

Target price: EUR

Share price: EUR

Reuters/Bloomberg TIE1V.HE/TIE1V FH



Free float 100%









Sales (m) 1,461 1,490 1,558

EBITDA (m) 182 201 172

EBITDA margin 12.5% 13.5% 11.0%

EBIT (m) 125 146 147

EBIT margin 8.6% 9.8% 9.5%


ROCE 84.7% 80.6% 85.3%

Net debt/(cash) (m) 69 107 109




EV/Sales 1.3 1.3 1.2

EV/EBITDA 10.1 9.5 10.9

EV/EBITDA (adj.) 2.9 3.0 3.0

EV/EBIT 14.6 13.1 12.7

P/E (adj.) 16.4 16.2 15.2

P/BV 3.8 3.8 3.9

OpFCF yield 1.2% 6.2% 5.8%


EPS (adj.) 1.51 1.56 1.66

BVPS 6.56 6.67 6.44

DPS 1.35 1.40 1.45

21

22

23

24

25

26

27

28

29


vvdsvdvsdy

TIETO Stoxx Software & Computer Services (Rebased)Source: Factset

Shareholders: Cevian Capital 15%; Solidium Oy 10%;

Silchester International Investors LLP

10%;

Page 49 of 63


TomTom

Netherlands/Software & Computer Services Analyser


TomTom (Buy) H2 earnings concentrated to Q4 Buy

7.68


10.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg TOM2.AS/TOM2 NA



Free float 56%









Sales (m) 1,007 1,003 1,033

EBITDA (m) 124 138 154

EBITDA margin 12.3% 13.8% 14.9%

EBIT (m) 1 14 27

EBIT margin 0.1% 1.4% 2.6%


ROCE 0.0% 1.0% 1.8%

Net debt/(cash) (m) (99) (92) (106)


Debt/EBITDA -0.8 -0.7 -0.7


EV/Sales 2.6 1.7 1.6

EV/EBITDA 20.8 12.2 10.9

EV/EBITDA (adj.) 20.8 12.2 10.9

EV/EBIT nm nm 61.6

P/E (adj.) nm 42.1 33.8

P/BV 2.7 1.8 1.8

OpFCF yield 0.4% 1.2% 2.2%


EPS (adj.) 0.21 0.18 0.23

BVPS 4.23 4.17 4.17

DPS 0.00 0.12 0.11

Mixed news from French car markers in 3Q16

The facts: Yesterday PSA Citroen reported weak numbers in unit sales for the

key European market. Sales in 3Q16 in Europe, which is where most of the

models with TomTom technology are sold, were down 4.3% yoy, a steep drop

versus previous quarters. Year to date sales in units were still up 4.1%. PSA

Citrien is planning a commercial offensive in 4Q16 building upon the launch of the

Peurgeot 5008 and 4 other new models including the high selling Peugeot 3008

and the Citroen C8.

Renault in its 3Q16 numbers reported an 11.3% increase in unit sales in the 3rd

quarter, building upon the strong performance so far in the year. Renault, as PSA

Citroen, also reported strong numbers in Eurasia (including Iran), but we do not

assume that models with TomTom technology are sold in that particular market or

at least not in high volumes.

Our analysis: The PSA Citroen numbers for the 3rd

quarter are not positive nut

we assume that that is already included in the 3Q16 numbers of TomTom as the

payment becomes due upon completion of fabrication, meaning it will have been

recognized as revenue by TomTom. The statements about a commercial

offensive in the 4th

quarter obviously bode well for TomTom in 4Q16 and 1Q17 as

model penetration of high selling units continues.

Renault’s numbers have been strong throughout the year (ytd volume in Europe

up 13.3%) due to the success of the Talisman, Espace and especially the

updated Megane and the new Kadjar and Kaptur. Renault is planning some new

models for the 4th

quarter (the Kwid, a small economy car) but continued volume

growth should come from the models mentioned. As Renault’s partner for maps,

traffic and other components, TomTom’s revenue from Renault is set to remain

strong and a material component of overall TomTom Automotive revenue.

We also note that the Renault-Nissan alliance (Renault owns 43.4%of Nissan and

has effective control) issued a press release yesterday that it intends to launch 10

autonomous (electric) vehicles by the year 2020, see http://bit.ly/2dVeVd0. During

the 3Q16 call, CEO Goddijn mentioned that TomTom had won Nissan as a client,

a statement that was later labelled as incorrect by investor relations. However, if

Renault and Nissan want to launch an autonomous vehicle in 2020, they must

have the design ready in 2017. That suggests that suppliers must have already

been chosen and bodes well for TomTom in relation to Nissan. So perhaps it was

not a mistake after all.

Conclusion & Action: Mixed news from PSA Citroen with a weak global 3Q16

and especially a weak 3Q6 in Europe. However, this is offset by the

announcement of a commercial offensive in 4Q16 including new high selling

models and the continued strength of Renault, both in Europe and other markets.

On top of that, it seems as though TomTom has also won Nissan as a client

because of its relationship with Renault.

6

7

8

9

10

11

12

13


vvdsvdvsdy

TOMTOM EuroNext (Rebased)Source: Factset Shareholders: H.Goddijn 11%; C.Goddijn 11%; P.F.

Pauwels 11%; P.Geelen 11%;

Analyst(s):

Martijn den Drijver, NIBC Markets N.V.

[email protected]

+312 0 5508636

http://bit.ly/2dVeVd0

Page 50 of 63


STMicroelectronics

Italy/Technology Hardware & Equipment Analyser

TECHNOLOGY HARDWARE & EQUIPMENT

STMicroelectronics (Neutral) Mixed news from French car markers in 3Q16

Q3 & 9M 16 preview

The facts: STM will release its Q3 & 9M 2016 results on October 27th before

market opening. A webcast presentation is scheduled at 9:30 a.m. CET. A live

webcast of the conference call will be available by accessing

http://investors.st.com.

Our analysis: In the two following tables we provide our estimates on Q3-16 and

9M-16 P&L figures.

We project a 5.0% Q/Q top line growth - slightly above the middle of the guidance

provided by ST (+5.5% +/- 3.5%) – coupled with a sequential improvement in

gross and EBIT margins driven by higher volumes and better product mix.

Data in USD m Q2-16A Q3-16E Q/Q Chg Q3-15A Y/Y Chg

Net revenues 1,703.0 1,797.0 5.5% 1,764.0 1.9%

Gross profit 577.3 636.1 10.2% 613.0 3.8%

Gross margin 33.9% 35.4%

34.8%

EBIT 28.0 98.8 253.0% 91.0 8.6%

EBIT margin 1.6% 5.5%

5.2%

Source: Banca Akros estimates

Q3 should show first recovery signs in top line with a ca. 2% Y/Y net revenues

growth, thus leading to -2.2% Y/Y in 9M 16 vs. -4.2% in H1 16. Gross margin and

EBIT should record initial benefits from restructuring initiatives and products focus

on Smart Driving and IoT solutions.

Data in USD m 9M-15A 9M-16E Y/Y Chg

Sales 5,229.0 5,113.0 -2.2%

Gross profit 1,774.0 1,752.2 -1.2%

Gross margin 33.9% 34.3%

EBIT 84.0 93.8 11.7%

EBIT margin 1.6% 1.8%

Source: Banca Akros estimates

Finally, on the back of our estimates and taking into account an expected USD

180m Capex in Q3 (higher than Q1 and Q2) and USD 54.7m dividend payment

(or USD 0.06/sh paid in September-16) we believe NFP in Sep-16 could be

almost in line with June’s level (USD 426m):

Conclusion & Action: We have prudentially set our estimates at the middle of

the guidance provided by STM. Q3’s top line growth would support our

assumption of ST coming back to net revenues growth in 2016 after a 5-year in a

row decline; the company should also benefit from a recovery in profitability

related to a better product mix that should grant higher returns even on similar top

line.

Analyst(s):

Francesco Previtera, Banca Akros

[email protected]

+39 02 4344 4033

Enrico Filippi, CEFA Banca Akros

[email protected]

+39 02 4344 4071

Neutral

7.24


7.30



Target price: EUR

Share price: EUR

Reuters/Bloomberg STM.MI/STM IM



Free float 72%








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

Sales (m) 6,897 6,928 7,143

EBITDA (m) 900 857 1,021

EBITDA margin 13.0% 12.4% 14.3%

EBIT (m) 109 239 405

EBIT margin 1.6% 3.4% 5.7%


ROCE 3.1% 6.7% 8.8%

Net debt/(cash) (m) (494) (487) (551)


Debt/EBITDA -0.5 -0.6 -0.5


EV/Sales 0.8 0.9 0.9

EV/EBITDA 6.0 7.5 6.3

EV/EBITDA (adj.) 5.6 6.5 5.7

EV/EBIT 49.7 27.1 15.8

P/E (adj.) nm 38.5 21.5

P/BV 1.3 1.6 1.5

OpFCF yield 1.8% 4.0% 3.9%


EPS (adj.) 0.11 0.20 0.36

BVPS 5.15 5.04 5.16

DPS 0.40 0.24 0.24

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0


vvdsvdvsdy

STMICROELECTRONICS Stoxx Telecom Equipment (Rebased)Source: Factset

Shareholders: STMicroelectronic holding 28%;

http://investors.st.com/

Page 51 of 63


Spanish Telecommunications

Analyser

TELECOMMUNICATIONS

Q3 & 9M 16 preview SPAIN: Orange, Strong growth in 3Q’16

The facts: ORA Spain presented 3Q’16 results.

Our analysis: Strong results with positive revenues for the 5th

consecutive

quarter. Mobile services grew 9.8% in 3Q vs. +8.9% 2Q and +4.4% 1Q. This

performance is due to the greater variety in the commercial offer (especially

since 2015) and 4G development reaching 7.2m customers at 9m’16 (1.6x in a

year).

Fixed services +4.6% with 3.9m customers in fixed BB (+5.3% Y/Y) and

ARPU rising +2.6% Q/Q (+8.4% Y/Y to EUR30.9). Sales +7.8% Y/Y to

EUR1.3bn in 3Q (vs. +6.2% 2Q). For 9m’16 data, sales reached EUR3.7bn

(+5.3% Y/Y) due to the high customer capturing, in which Spain is the most

important behind France. On the negative side, mobile ARPI dropped from

EUR14.1 to EUR13.7.

In Spain, the French operator captured +194k customers in FttH BB in 3Q (9m

homes passed, 2.5x in a year) and 1.41m accumulated. Fibre represents 36%

total fixed BB and increased +21pp in the year (bearing in mind the

organic growth thanks to the acquisition of Jazztel).

Pay TV services also increased, +458k customers 9m’16 (2.1x in the year)

thanks to the premium content offered (football). 83% of its fixed BB base are

convergent (+2.4pp in a year).

Mobile contracts: +94k net adds in 3Q, performing well if compared to 3Q’15:

+5.4% Y/Y up to 12.5m customers. Prepaid increased +1% Y/Y to 3.3m. 4G

coverage spans 89% of the customer base.

The number of customers coming from VMOs increased from 1,487m to

1,923m at 9m’16 (+29.3% Y/Y).

Finally, we highlight the global collaboration agreement (similar with TEF in

local NEBA/VULA) signed with MasMovil, in which ORA Spain

substantially increases wholesale revenues, reduces costs as the mobile

BB infrastructure is shared and more efficient FttH deployments as

investments are also shared (the press also points to a possible agreement

with Euskaltel in this matter).

No visibility was shed regarding a possible listing of its affiliate in Spain

as realised in Belgium and Poland.

Conclusion: Strong results and positive reaction on behalf of the market

yesterday (+4.2% ORA). ORA Spain will continue to be the Group’s crown

jewel being the highest growing operator in Spain together with MasMovil. The

parent company bet on its affiliate not only when it acquired Jazztel but also in

capex used to develop FTTH in Spain. We expect ORA Spain’s business

model to be replicated in France with the implementation of convergence.

This fact will decelerate the price war that exists in the neighbouring country.

---------- Stoxx Telecommunications,


Analyst(s):

Victor Peiro Pérez, GVC Gaesco Beka

[email protected]

+34 91 436 7812

Eduardo Garcia Arguelles, GVC Gaesco Beka

[email protected]

+34 914 367 810

280

300

320

340

360

380

400


vvdsvdvsdy

Page 52 of 63


Euskaltel

Spain/Telecommunications Analyser

TELECOMMUNICATIONS

Euskaltel (Buy) SPAIN: Orange, Strong growth in 3Q’16

Possible agreement with Orange in terms of FttH

The facts: According to Bloomberg, Orange Spain is negotiating with Euskaltel a

collaboration agreement.

Our analysis: It would be a co-investment agreement for the FttH deployment

in Basque Country and Galicia. They didn’t disclose financial or operational

details.

Remember that Euskaltel is one of the largest MVNO customers (with

Másmovil/Yoigo) in the Orange Spain’s wholesale segment.

This agreement would be win-to-win for both parties since the cities in the

Basque Country and Galicia are not “free” cities (VULA’s regulation), so

Telefónica must share their FttH with consequent slowdown of new deployments.

Conclusion: If the agreement is confirmed for both parties, this would be a step

for signing a global collaboration agreement (Másmovil’s style) based on the

following four pillars: (1) national hosting contract OMV, (2) co-investment in FttH,

(3) FttH sharing (IRUs) already deployed and (4) cohabitation in mobile

broadband sites. In our opinion, ORA is preparing the ground for a possible

EKT acquisition in the medium term. It tries to do companies as much

complementary as possible.

Analyst(s):

Eduardo Garcia Arguelles, GVC Gaesco Beka

[email protected]

+34 914 367 810

Buy

9.37


12.00



Target price: EUR

Share price: EUR

Reuters/Bloomberg EKT.MC/EKT SM



Free float 61%









Sales (m) 327 570 580

EBITDA (m) 143 277 290

EBITDA margin 43.6% 48.6% 50.0%

EBIT (m) 64 154 169

EBIT margin 19.5% 26.9% 29.2%


ROCE 2.3% 5.5% 5.8%

Net debt/(cash) (m) 1,358 1,238 1,132




EV/Sales 9.0 4.5 4.3

EV/EBITDA 20.7 9.2 8.6

EV/EBITDA (adj.) 20.7 9.2 8.6

EV/EBIT 46.2 16.7 14.7

P/E (adj.) nm 15.5 13.4

P/BV 2.1 1.5 1.3

OpFCF yield 5.6% 7.2% 7.5%


EPS (adj.) 0.05 0.61 0.70

BVPS 5.56 6.16 7.39

DPS 0.00 0.00 0.55

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0


vvdsvdvsdy

EUSKALTEL Stoxx Telecommunications (Rebased)Source: Factset

Shareholders: Kutxabank 25%; Corp. Financ. Alba 10%;

JP Morgan Chase 4%;

Page 53 of 63


Int. Airlines Group

Spain/Travel & Leisure Analyser

TRAVEL & LEISURE

Int. Airlines Group (Buy) Possible agreement with Orange in terms of FttH

Extension of Heathrow backed

The facts: Following decades of debate, the new British government has issued

a recommendation to build a third runway and sixth terminal in Heathrow, the

largest airport in the UK with 75m PB/year, thus increasing capacity by 30% (the

number of flights increasing from current 480,000 to 740,000/year). Initially the

investment would be of GBP18-21.6bn. The decision must be ratified by the

British parliament prior to the public survey and the investment is not expected to

be finalised before 2025.

Our analysis: Unblocking the decision to build the new capacity in Heathrow is

positive news for IAG as it will solve the current congestion problems (IAG holds

51% in said airport) in which the Holding has the majority of the slots. Extending

the airport could increase routes from London to other markets, beyond the EU

where British Airways has an extensive network (i.e America and Africa).

However, there are still many doubts to be clarified:

Final amount of investment considering that IAG and other Airlines forming

the “Airlines for Europe” defend substantially lower costs, GBP180m (10% of

the amount indicated by the Davies Commission).

The distribution of the new slots. If the “grandfather’s rights” is respected, BA

will have similar quota to the current one in the new infrastructure which would

solve the current lack of slots and which was intended to be solved with the

acquisition of British Midland in 2012.

The effects on airport fees charged to Airlines (landing fees), a very sensitive

aspect for BA considering it has the largest presence in Heathrow. We recall

that the airport is currently one of the most costly for airlines around the world

(including the Air Passenger Duty) and increasing the cost would not be

positive to maintain BA’s current margins (EBITDA mg 12.2% and ROCE

13.2% at 2015). At the moment it seems that the authorities are in favour of

maintaining current tariffs but it will in correlation to the final investment.

Conclusion: Although there are still important aspects to be specified (final

approval of the project, investment and impact on current tariffs in Heathrow),

initially the backing by the current government to increase capacity solves one of

the problems suffered by BA in recent decades and could extend its network

beyond the European Union.

Analyst(s):

Sonia Ruiz De Garibay, GVC Gaesco Beka

[email protected]

+34 91 436 7841

Buy

4.47


5.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg ICAG.MC/IAG SM



Free float 48%









Sales (m) 22,858 23,154 23,166

EBITDA (m) 3,642 3,894 4,043

EBITDA margin 15.9% 16.8% 17.5%

EBIT (m) 2,335 2,582 2,702

EBIT margin 10.2% 11.2% 11.7%

Net Profit (adj.)(m) 1,539 1,833 1,963

ROCE 12.2% 13.3% 13.7%

Net debt/(cash) (m) 2,774 1,784 925




EV/Sales 0.9 0.5 0.5

EV/EBITDA 5.5 3.0 2.7

EV/EBITDA (adj.) 5.5 3.0 2.7

EV/EBIT 8.6 4.5 4.0

P/E (adj.) 11.0 5.2 4.9

P/BV 3.2 1.4 1.2

OpFCF yield 1.8% 17.9% 17.6%


EPS (adj.) 0.75 0.86 0.92

BVPS 2.56 3.13 3.84

DPS 0.20 0.21 0.24

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0


vvdsvdvsdy

INT. AIRLINES GROUP IBEX 35 (Rebased)Source: Factset

Shareholders: Qatar Airways 20%; Lansdowne 7%;

Standard Life Investment 6%;

Page 54 of 63


A2A

Italy/Utilities Analyser

UTILITIES

A2A (Buy) Extension of Heathrow backed

Brescia may reduce its quota

The facts: Brescia municipality has approved the change in the shareholders

pact in A2A.

Our analysis: according to “Corriere della Sera”, Brescia Municipality was eager

to change the shareholders pact in A2A in order to reduce its quota.

The goal is to change the rule according to which Brescia (25% stake + 1 share in

A2A) cannot reduce its quota in the public company if Milan (25% stake + 1 share

in A2A) doesn’t do the same and for the same amount.

In fact, Brescia would be eager, according to “Corriere della Sera”, to reduce its

quota in A2A up to a maximum of a 4% for budget reasons. Milan would not be

eager to do that but the municipality is going to approve the modification in the

shareholders’ pact as Brescia did.

For both the municipalities the change in the shareholders’ pact does not mean

they are obliged to sell the stake in A2A reducing the controlling quota at 42%.

This ought to be an opportunity.

Conclusion & Action: the overhang risk is not positive news for the stock, but

we have already seen municipalities reducing their stakes in the company in the

recent past, with no major impacts in terms of stock prices. On the contrary, we

argue that an increase in the free-float would be positively perceived from

investors. We reiterate our positive stance on the stock and we believe that any

possible negative reaction to the overhang risk represents a buy opportunity.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Buy

1.24


1.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg A2.MI/A2A IM



Free float 50%









Sales (m) 4,921 5,032 5,416

EBITDA (m) 1,048 1,057 1,137

EBITDA margin 21.3% 21.0% 21.0%

EBIT (m) 215 635 666

EBIT margin 4.4% 12.6% 12.3%


ROCE 1.9% 6.0% 6.0%

Net debt/(cash) (m) 2,897 3,156 3,023




EV/Sales 1.6 1.6 1.5

EV/EBITDA 7.5 7.8 7.1

EV/EBITDA (adj.) 7.5 7.8 7.1

EV/EBIT 36.6 12.9 12.0

P/E (adj.) nm 10.3 11.4

P/BV 1.5 1.4 1.1

OpFCF yield 9.7% -2.3% 6.5%


EPS (adj.) 0.02 0.12 0.11

BVPS 0.84 0.91 1.17

DPS 0.04 0.05 0.06

0.95

1.00

1.05

1.10

1.15

1.20

1.25

1.30

1.35

1.40


vvdsvdvsdy

A2A Stoxx Utilities (Rebased)Source: Factset

Shareholders: Milan City Council 25%; Brescia City

Council 25%;

Page 55 of 63


Fortum

Q3/2015a Growth

M€ Q2a vs. Cons. OP Cons. Diff. OP Cons. Diff.

Generation 371.0 #DIV/0! 389 #DIV/0! 377 3% 1,667 #DIV/0!

City Solutions 237.0 #DIV/0! 215 #DIV/0! 185 16% 1,247 #DIV/0!

Russia 175.0 #DIV/0! 152 #DIV/0! 154 -2% 845 #DIV/0!

Other operations 29.0 #DIV/0! 25 #DIV/0! 28 -11% 109 #DIV/0!

Eliminations -81.0 #DIV/0! -94 #DIV/0! -83 13% -467 #DIV/0!

Total sales 732.0 7% 687 686.0 0% 661 4% 3,401 3,479 -2%

Sales growth -1.7 % 0.6 %

EBIT

Generation 77.0 #DIV/0! 104.6 #DIV/0! 102 2% 469 #DIV/0!

City Solutions -16.0 #DIV/0! -8.0 #DIV/0! -13 -38% 117 #DIV/0!

Russia 12.0 #DIV/0! 15.0 #DIV/0! 0 #DIV/0! 208 #DIV/0!

Other operations -15.0 #DIV/0! -15.0 #DIV/0! -10 50% -61 #DIV/0!

Eliminations #DIV/0! 0.0 #DIV/0! -761 -100% 0 #DIV/0!

Total EBIT 58.0 -24% 96.6 76.0 27% 79.5 21% 734 717 2%

Total EBIT margin #DIV/0! 14.1 % 11.1 % 12.0 % 21.6 % 20.6 %#DIV/0!

PTP 22 -56% 60.6 50.0 21% 46.5 30.3 % 715 701 2%

EPS 0.03 -40% 0.05 0.05 6% 0.04 19.6 % 0.66 0.65 2%#DIV/0!

DPS #DIV/0! 1.10 0.82 34%

Source : OP and SME Direkt

Q3/2016e 2016e

Fortum

Finland/Utilities Analyser

UTILITIES

Fortum (Reduce) Brescia may reduce its quota

Attention on the CMD next

The facts: Fortum's Q3 comparable EBIT (EUR 58m) was clearly below

consensus (EUR 76m) and even more clearly below our forecast (EUR 97m). The

biggest surprise relative to our forecasts was that the Generation division's

hydropower volumes decreased by as much as 2.3 TWh (~35%) YoY. The Russia

division's EBIT was in line with our estimate. The positive impact of the stronger

RUB was EUR 4m YoY.

Our analysis: Our 2017 EBIT forecast rises by one per cent and our 2018 EBIT

forecast rises by two per cent. Our revised earnings forecast for 2017 is 4% lower

than the pre-results consensus and our 2018 forecast is almost 7% lower than

consensus.

Fortum hosts a Capital Markets Day (CMD) in Espoo on 16 November.

Beforehand the most interesting themes at the CMD will be the detailed

presentation of the new strategy and the timetable for planned measures as well

as the company's comments on how it intends to utilise the excessively liquid

balance sheet in growth and/or repayments of equity to shareholders.

Conclusion & Action: Our target price is based on the peer group valuation (P/E

14.8), historical valuation (last three years' average EV/EBITDA 11.3) and a 6%

dividend yield requirement (calculated on the average of our dividend projections

for 2016–2017). As a result of our updated earnings forecasts and on the basis of

our 2017 forecasts, we maintain our target price at EUR 14.50 and our Reduce

recommendation.

Analyst(s):


[email protected]

+358 10 252 4409

Reduce

15.36


14.50



Target price: EUR

Share price: EUR

Reuters/Bloomberg FUM1V.HE/FUM1V FH



Free float 49%









Sales (m) 3,458 3,486 3,760

EBITDA (m) 399 1,038 1,111

EBITDA margin 11.5% 29.8% 29.6%

EBIT (m) 54 684 763

EBIT margin 1.6% 19.6% 20.3%


ROCE 5.3% 4.2% 4.8%

Net debt/(cash) (m) (1,591) 82 171

Net Debt/Equity -0.1 0.0 0.0

Debt/EBITDA -4.0 0.1 0.2


EV/Sales 3.1 3.9 3.7

EV/EBITDA 27.0 13.2 12.4

EV/EBITDA (adj.) 9.3 13.2 12.4

EV/EBIT nm 20.1 18.1

P/E (adj.) 25.8 24.9 22.1

P/BV 0.9 1.0 1.0

OpFCF yield -5.4% 1.0% 2.9%


EPS (adj.) 0.54 0.62 0.69

BVPS 15.61 15.12 14.72

DPS 1.10 1.10 0.45

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0


vvdsvdvsdy

FORTUM Stoxx Utilities (Rebased)Source: Factset

Shareholders: Finnish state 51%; Ilmarinen Mutual

Pension Insurance Company 1.20%;

Varma-Sampo Mutual Pension Insurance

Company 1.00%;

Page 56 of 63


Iren

Italy/Utilities Analyser

UTILITIES

Iren (Buy) Attention on the CMD next

Salerno Energia Vendite due to be merged

The facts: the municipal council of Salerno has provided its green light to the

merger process of Salerno Energia Vendite and Iren Mercato.

Our analysis: the Municipal Council of Salerno has resolved upon the explicit

approval of the content of all the annexed documents to the framework

agreement, already signed by Salerno Energia Vendite and Iren Mercato on 6th

July 2016. With this Resolution the municipal council authorized the parties to

proceed with the merger process.

Salerno Energia Vendite’s share capital is currently held by: 39.4% GEA

Commerciale S.p.A (100% Iren Mercato), 59.0% by Salerno Energia Holding and

1.6% by Gescom S.r.l.

After the merger, which will take place through the incorporation of GEA

Commerciale S.p.A into Salerno Energia Vendite, the shareholding structure of

the latter will be as follows: Iren Mercato 50.0%, Salerno Energia Holding 48.8%

and Gescom 1.2%. The corporate governance of the company resulting from the

merger process will allow Iren to fully consolidate it.

The acquired and acquiring companies are both active in the natural gas sales

sector and in geographical areas of interest to Iren: GEA Commercial operates

mainly in the provinces of Grosseto in Tuscany and Frosinone in Lazio, while

Salerno Energia operates in almost all the provinces of Campania and in a

number of Municipalities in Basilicata and Calabria regions. The cumulative

portfolio of the two companies is equal to approximately 115,000 clients,

strengthening Iren’s presence in the Tyrrhenian area.

Conclusion & Action: the operation is part of the corporate rationalization

process targeted by the company in its recently unveiled business plan.

Furthermore, the deal is due to favour the achievement of customer-base growth,

with positive effects in terms of efficiency, competitiveness and the quality of the

services offered not only in gas sector but also in the electricity free market. Even

though the deal is not sizeable, we believe the management team is strictly

focused on the business plan targets achievement, as already proved in the

recent past. We reiterate our positive stance on the stock. Buy.

Analyst(s):

Dario Michi, Banca Akros

[email protected]

+39 02 4344 4237

Buy

1.64


1.80



Target price: EUR

Share price: EUR

Reuters/Bloomberg IREE.MI/IRE IM



Free float 32%









Sales (m) 3,094 4,287 3,454

EBITDA (m) 678 767 775

EBITDA margin 21.9% 17.9% 22.4%

EBIT (m) 347 369 373

EBIT margin 11.2% 8.6% 10.8%


ROCE 4.4% 5.3% 5.5%

Net debt/(cash) (m) 2,169 2,529 2,544




EV/Sales 1.4 1.3 1.6

EV/EBITDA 6.5 7.2 7.1

EV/EBITDA (adj.) 6.5 7.2 7.1

EV/EBIT 12.7 14.9 14.8

P/E (adj.) 14.9 12.4 12.1

P/BV 16.4 5.3 7.2

OpFCF yield 8.7% 10.3% 10.6%


EPS (adj.) 0.10 0.13 0.14

BVPS 0.09 0.31 0.23

DPS 0.06 0.06 0.06

1.25

1.30

1.35

1.40

1.45

1.50

1.55

1.60

1.65

1.70


vvdsvdvsdy

IREN Stoxx Utilities (Rebased)Source: Factset

Shareholders: Finanziaria Sviluppo Utilities (FSU) 33%;

Reggio Emilia Council 8%; Parma

Council 6%;

Page 57 of 63


Red Electrica De Espana

Spain/Utilities Analyser

UTILITIES

Red Electrica De Espana (Accumulate) Salerno Energia Vendite due to be merged

Results 9M16 in line with strategic targets

The facts: Red Eléctrica has published 9M16 results: revenues -0.8%, EBITDA

+2.3% and net profit +5.0%. Figures are in line with strategic targets and our

estimates (-0.8%, +2.1% y +4.9%, respectively).

Our analysis: We highlight the following:

Revenues and Costs: Even the decrease in revenues (-0.8% 9M16 due to

non-regulated components), the EBITDA achieves +2.3% thanks to

efficiency measures which have led to opex decrease of -9.8% (vs. -12.6

1H16). Consequently EBITDA margin improves +230 bps reaching 77% (vs.

+120 pbs 1Q16 and +250 bps 1H16) and in line with strategic target of at

least surpassing +200 pbs.

Depreciations and Financial Result: The former registers +3.2% due to

the new asset commissioned during 2015. The latter registers a -3.6% due

to the improved average financial cost to 2.99% (vs. 3.0% 1H16 and 3.21%

9M15). Figures incorporate a negative entry in equity method due to the

Chilean investments.

Capex: EUR 458.1m, +39% vs. 9M15 and due to the inclusion of the 50%

stake purchased in TEN Chile. 52% of the total capex has been dedicated to

network investment.

Net Debt: EUR 5.17bn, +2.1% vs. 1H16 as in this quarter there has been

dividend payment, negative working capital and temporary finance granted

to TEN Chile. All in all FFO +6.0% in 3Q16 and +1.9% 9M16. 84% of the

total debt in at fixed rate and 97.7% l/t. Cash in balance sheet EUR 293m.

Conclusion and Action: Results with no relevant surprises, in line with

estimates and with strategic targets. We reiterate our recommendation on the

stock and our preference on Enagas within the regulated Spanish utilities.

Analyst(s):

Sonia Ruiz De Garibay, GVC Gaesco Beka

[email protected]

+34 91 436 7841

Accumulate

19.10


22.40



Target price: EUR

Share price: EUR

Reuters/Bloomberg REE.MC/REE SM



Free float 80%









Sales (m) 1,939 1,942 1,974

EBITDA (m) 1,458 1,490 1,528

EBITDA margin 75.2% 76.7% 77.4%

EBIT (m) 989 1,004 1,032

EBIT margin 51.0% 51.7% 52.3%


ROCE 7.7% 7.7% 7.8%

Net debt/(cash) (m) 4,906 5,085 5,026




EV/Sales 8.0 8.0 7.8

EV/EBITDA 10.6 10.4 10.1

EV/EBITDA (adj.) 10.6 10.4 10.1

EV/EBIT 15.6 15.5 15.0

P/E (adj.) 17.2 16.2 15.5

P/BV 3.8 3.5 3.3

OpFCF yield 8.6% 2.5% 5.1%


EPS (adj.) 1.12 1.18 1.23

BVPS 5.07 5.45 5.83

DPS 0.80 0.86 0.92

16.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

20.5

21.0


vvdsvdvsdy

RED ELECTRICA DE ESPANA Stoxx Utilities (Rebased)Source: Factset

Shareholders: Spanish State 20%;

Page 58 of 63


European Coverage of the Members of ESN

A ero space & D efense M em(*) Bcp CBI Kemira OPG Corbion NIBC

Airbus Group CIC Bnp Paribas CIC Linde EQB Danone CIC

Dassault Aviation CIC Bper BAK Tikkurila OPG Ebro Foods GVC

Latecoere CIC Bpi CBIElectro nic & Electrical

EquipmentM em(*) Enervit BAK

Leonardo BAK Caixabank GVC Alstom CIC Fleury M ichon CIC

Lisi CIC Commerzbank EQB Areva CIC Forfarmers NIBC

M tu EQB Credem BAK Euromicron Ag EQB Heineken NIBC

Ohb Se EQB Credit Agrico le Sa CIC Kontron EQB Hkscan OPG

Safran CIC Creval BAK Legrand CIC La Doria BAK

Thales CIC Deutsche Bank EQB Neways Electronics NIBC Lanson-Bcc CIC

Zodiac Aerospace CIC Deutsche Pfandbriefbank EQB Nexans CIC Laurent Perrier CIC

A irlines M em(*) Eurobank IBG Pkc Group OPG Ldc CIC

Air France Klm CIC Ing Group NIBC Rexel CIC Naturex CIC

Finnair OPG Intesa Sanpaolo BAK Schneider Electric Se CIC Olvi OPG

Lufthansa EQB M ediobanca BAK Vaisala OPG Parmalat BAK

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Bmw EQB Natixis CIC Anima BAK Refresco Group NIBC

Brembo BAK Nordea OPG Athex Group IBG Remy Cointreau CIC

Continental EQB Piraeus Bank IBG Azimut BAK Vidrala GVC

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Nokian Tyres OPG Corticeira Amorim CBI Cir BAK Dia GVC

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Piaggio BAK Europac GVC Corp. Financiera Alba GVC Kesko OPG

Plastic Omnium CIC M etka IBG Deutsche Boerse EQB M arr BAK

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Valeo CIC Outokumpu OPG Euronext CIC Sonae CBI

Volkswagen EQB Semapa CBI Ferratum EQB General Industria ls M em(*)

B anks M em(*) Ssab OPG Finecobank BAK 2G Energy EQB

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Abn Amro Group Nv NIBC Surteco EQB Hypoport Ag EQB Accell Group NIBC

Aktia OPG The Navigator Company CBI M lp EQB Ahlstrom OPG

Alpha Bank IBG Tubacex GVC Ovb Holding Ag EQB Arcadis NIBC

Banca Carige BAK Upm-Kymmene OPG Patrizia Ag EQB Aspo OPG

Banca M ps BAK B io techno lo gy M em(*) Rallye CIC Huhtamäki OPG

Banco Popolare BAK 4Sc EQB Unipol Gruppo Finanziario BAK Kendrion NIBC

Banco Popular GVC Cytotools Ag EQB F o o d & B everage M em(*) Nedap NIBC

Banco Sabadell GVC Epigenomics Ag EQB Acomo NIBC Pöyry OPG

Banco Santander GVC Wilex EQB Atria OPG Prelios BAK

Bankia GVC C hemicals M em(*) Bonduelle CIC Rubis CIC

Bankinter GVC Air Liquide CIC Campari BAK Saf-Holland EQB

Bbva GVC Holland Colours NIBC Coca Cola Hbc Ag IBG Serge Ferrari Group CIC

Page 59 of 63


Siegfried Holding Ag EQB H o useho ld Go o ds M em(*) Axa CIC Thermador Groupe CIC

Tkh Group NIBC Bic CIC Banca M edio lanum BAK Titan Cement IBG

Wendel CIC De Longhi BAK Catto lica Assicurazioni BAK Trevi BAK

General R etailers M em(*) Fila BAK Delta Lloyd NIBC Uponor OPG

Banzai BAK Osram Licht Ag EQB Generali BAK Vicat CIC

Beter Bed Holding NIBC Seb Sa CIC Hannover Re EQB Vinci CIC

Elumeo Se EQB Zumtobel Group Ag EQB M apfre Sa GVC Yit OPG

Fielmann EQB Industria l Engineering M em(*) M unich Re EQB M edia M em(*)

Folli Fo llie Group IBG Accsys Technologies NIBC Nn Group Nv NIBC Ad Pepper EQB

Fourlis Holdings IBG Aixtron EQB Sampo OPG Alma M edia OPG

Groupe Fnac Sa CIC Ansaldo Sts BAK Talanx Group EQB Atresmedia GVC

Inditex GVC Biesse BAK Unipolsai BAK Axel Springer EQB

Jumbo IBG Cargotec Corp OPGM aterials, C o nstruct io n &

InfrastructureM em(*) Brill NIBC

M acintosh NIBC Cnh Industrial BAK Abertis GVC Cofina CBI

Rapala OPG Danieli BAK Acs GVC Cts Eventim EQB

Stockmann OPG Datalogic BAK Aena GVC Editoriale L'Espresso BAK

Yoox Net-A-Porter BAK Deutz Ag EQB Aeroports De Paris CIC Gl Events CIC

H ealthcare M em(*) Dmg M ori Seiki Ag EQB Astaldi BAK Havas CIC

Amplifon BAK Duro Felguera GVC Atlantia BAK Impresa CBI

Bayer EQB Emak BAK Bilfinger Se EQB Ipsos CIC

Biotest EQB Exel Composites OPG Boskalis Westminster NIBC Jcdecaux CIC

Diasorin BAK Gesco EQB Buzzi Unicem BAK Lagardere CIC

Fresenius EQB Ima BAK Caverion OPG M 6-M etropole Television CIC

Fresenius M edical Care EQB Interpump BAK Cramo OPG M ediaset BAK

Gerresheimer Ag EQB Kone OPG Eiffage CIC M ediaset Espana GVC

Korian CIC Konecranes OPG Ellaktor IBG Notorious Pictures BAK

M erck EQB Kuka EQB Eltel OPG Nrj Group CIC

Orio la-Kd OPG M anz Ag EQB Ezentis GVC Publicis CIC

Orion OPG M ax Automation Ag EQB Fcc GVC Rcs M ediagroup BAK

Orpea CIC M etso OPG Ferrovial GVC Relx NIBC

Pihlajalinna OPG Outotec OPG Fraport EQB Rtl Group EQB

Recordati BAK Pfeiffer Vacuum EQB Heidelberg Cement Ag CIC Sanoma OPG

Rhoen-Klinikum EQB Ponsse OPG Heijmans NIBC Solocal Group CIC

H o tels, T ravel & T o urism M em(*) Prima Industrie BAK Hochtief EQB Spir Communication CIC

Accor CIC Prysmian BAK Imerys CIC Syzygy Ag EQB

Autogrill BAK Smt Scharf Ag EQB Italcementi BAK Telegraaf M edia Groep NIBC

Beneteau CIC Technotrans EQB Lafargeholcim CIC Teleperformance CIC

Elior CIC Valmet OPG Lehto OPG Tf1 CIC

Europcar CIC Wärtsilä OPG Lemminkäinen OPG Ubisoft CIC

I Grandi Viaggi BAK Zardoya Otis GVC M aire Tecnimont BAK Vivendi CIC

Iberso l CBI Industria l T ranspo rtat io n M em(*) M ota Engil CBI Wolters Kluwer NIBC

Intralo t IBG Bollore CIC Obrascon Huarte Lain GVC Oil & Gas P ro ducers M em(*)

Kotipizza OPG Caf GVC Ramirent OPG Eni BAK

M elia Hotels International GVC Ctt CBI Royal Bam Group NIBC Galp Energia CBI

Nh Hotel Group GVC Deutsche Post EQB Sacyr GVC Gas Plus BAK

Opap IBG Hhla EQB Saint Gobain CIC Hellenic Petro leum IBG

Snowworld NIBC Logwin EQB Salini Impregilo BAK M aurel Et Prom CIC

Sodexo CIC Insurance M em(*) Sias BAK M otor Oil IBG

Sonae Capital CBI Aegon NIBC Sonae Industria CBI Neste Corporation OPG

Trigano CIC Allianz EQB Srv OPG Petrobras CBI

Page 60 of 63


Qgep CBI Wcm Ag EQB Enav BAK Falck Renewables BAK

Repsol GVC R enewable Energy M em(*) Fiera M ilano BAK Fortum OPG

Total CIC Daldrup & Soehne EQB Lassila & Tikanoja OPG Gas Natural Fenosa GVC

Oil Services M em(*) Gamesa GVC Openjobmetis BAK Hera BAK

Bourbon CIC So ftware & C o mputer Services M em(*)T echno lo gy H ardware &

EquipmentM em(*)Iberdro la GVC

Cgg CIC Affecto OPG Asm International NIBC Iren BAK

Fugro NIBC Akka Technologies CIC Asml NIBC Public Power Corp IBG

Saipem BAK Alten CIC Besi NIBC Red Electrica De Espana GVC

Sbm Offshore NIBC Altran CIC Elmos Semiconductor EQB Ren CBI

Technip CIC Amadeus GVC Ericsson OPG Snam BAK

Tecnicas Reunidas GVC Assystem CIC Gemalto CIC Terna BAK

Tenaris BAK Atos CIC Gigaset EQB

Vallourec CIC Basware OPG Ingenico CIC

Vopak NIBC Cenit EQB Nokia OPG

P erso nal Go o ds M em(*) Comptel OPG Roodmicrotec NIBC

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Adler M odemaerkte EQB Digia OPG Stmicroelectronics BAK

Amer Sports OPG Docdata NIBC Suess M icrotec EQB

Basic Net BAK Econocom CIC Teleste OPG

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Geox BAK Esi Group CIC Acotel BAK

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M arimekko OPG Novabase CBI Oi CBI

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Puma EQB Psi EQB Tele Columbus EQB

Safilo BAK Reply BAK Telecom Italia BAK

Salvatore Ferragamo BAK Rib Software EQB Telefonica GVC

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Tod'S BAK Sopra Steria Group CIC United Internet EQB

R eal Estate M em(*) Tie Kinetix NIBC Vodafone BAK

Adler Real Estate EQB Tieto OPG Utilit ies M em(*)

Beni Stabili BAK Tomtom NIBC A2A BAK

Citycon OPG Visiativ CIC Acciona GVC

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Grand City Properties EQB Suppo rt Services M em(*) Albioma CIC

Hispania Activos Inmobiliarios GVC Asiakastieto Group OPG Direct Energie CIC

Igd BAK Batenburg NIBC Edp CBI

Lar España GVC Bureau Veritas S.A. CIC Edp Renováveis CBI

Realia GVC Cellnex Telecom GVC Enagas GVC

Sponda OPG Dpa NIBC Endesa GVC

Technopolis OPG Edenred CIC Enel BAK

Vib Vermoegen EQB Ei Towers BAK Eydap IBG

LEGEND: BAK: Banca Akros; CIC: CM CIC Market Solutions; CBI: Caixa-Banca de Investimento; GVC: GVC Gaesco Beksa, SV, SA; EQB: Equinet bank; IBG: Investment Bank of

Greece, NIBC: NIBC Markets N.V: OPG: OP Corporate Bank:; as of 1st September 2016

Page 61 of 63


List of ESN Analysts (**)

Ari Agopyan CIC +33 1 53 48 80 63 [email protected] Victoria Kruchevska (CFA,FRM) EQB +49 69 5 89 97 416 [email protected]

Artur Amaro CBI +351 213 89 6822 [email protected] Jean-Christophe Lefèvre-Moulenq CIC +33 1 53 48 80 65 [email protected]

Helena Barbosa CBI +351 21 389 6831 [email protected] Konstantinos Manolopoulos IBG +30 210 817 3388 [email protected]

Javier Bernat GVC +34 91 436 7816 jav [email protected] Dario Michi BAK +39 02 4344 4237 [email protected]

Dimitris Birbos IBG +30 210 81 73 392 [email protected] Marietta Miemietz CFA EQB +49-69-58997-439 [email protected]

Agnès Blazy CIC +33 1 53 48 80 67 [email protected] José Mota Freitas, CFA CBI +351 22 607 09 31 [email protected]

Charles Edouard Boissy CIC +33 01 53 48 80 81 [email protected] Henri Parkkinen OPG +358 10 252 4409 [email protected]

Rafael Bonardell GVC +34 91 436 78 171 [email protected] Victor Peiro Pérez GVC +34 91 436 7812 [email protected]

Louise Boyer CIC +33 1 53 48 80 68 [email protected] Francis Prêtre CIC +33 4 78 92 02 30 [email protected]

Giada Cabrino, CIIA BAK +39 02 4344 4092 [email protected] Francesco Previtera BAK +39 02 4344 4033 francesco.prev [email protected]

Arnaud Cadart CIC +33 1 53 48 80 86 [email protected] Jari Raisanen OPG +358 10 252 4504 [email protected]

Niclas Catani OPG +358 10 252 8780 [email protected] Hannu Rauhala OPG +358 10 252 4392 [email protected]

Pierre Chedeville CIC +33 1 53 48 80 97 [email protected] Matias Rautionmaa OPG +358 10 252 4408 [email protected]

Emmanuel Chevalier CIC +33 1 53 48 80 72 [email protected] Eric Ravary CIC +33 1 53 48 80 71 [email protected]

David Consalvo CIC +33 1 53 48 80 64 [email protected] Iñigo Recio Pascual GVC +34 91 436 7814 [email protected]

Edwin de Jong NIBC +312 0 5508569 [email protected] Gerard Rijk NIBC + 31 (0)20 550 8572 [email protected]

Martijn den Drijver NIBC +312 0 5508636 [email protected] André Rodrigues CBI +351 21 389 68 39 [email protected]

Christian Devismes CIC +33 1 53 48 80 85 [email protected] Jean-Luc Romain CIC +33 1 53 48 80 66 [email protected]

Andrea Devita, CFA BAK +39 02 4344 4031 [email protected] Jochen Rothenbacher, CEFA EQB +49 69 58997 415 [email protected]

Sebastian Droste EQB +49 69 58 99 74 34 [email protected] Vassilis Roumantzis IBG +30 2108173394 [email protected]

Enrico Esposti, CIIA BAK +39 02 4344 4022 [email protected] Sonia Ruiz De Garibay GVC +34 91 436 7841 [email protected]

Rafael Fernández de Heredia GVC +34 91 436 78 08 [email protected] Antti Saari OPG +358 10 252 4359 [email protected]

Enrico Filippi, CEFA BAK +39 02 4344 4071 [email protected] Paola Saglietti BAK +39 02 4344 4287 [email protected]

Gabriele Gambarova BAK +39 02 43 444 289 [email protected] Francesco Sala BAK +39 02 4344 4240 [email protected]

Eduardo Garcia Arguelles GVC +34 914 367 810 [email protected] Holger Schmidt, CEFA EQB +49 69 58 99 74 32 [email protected]

Alexandre Gérard CIC +33 1 53 48 80 93 [email protected] Cengiz Sen EQB +4969 58997 435 [email protected]

Philipp Häßler, CFA EQB +49 69 58997 414 [email protected] Pekka Spolander OPG +358 10 252 4351 [email protected]

Simon Heilmann EQB +49 69 58 997 413 [email protected] Kimmo Stenvall OPG +358 10 252 4561 [email protected]

Dr. Knud Hinkel EQB + 49 69 58997 419 [email protected] Natalia Svyrou-Svyriadi IBG +30 210 81 73 384 [email protected]

Marcell Houben NIBC +31 20 550 8649 [email protected] Luigi Tramontana BAK +39 02 4344 4239 [email protected]

Carlos Jesus CBI +351 21 389 6812 [email protected] Johan van den Hooven NIBC +312 0 5508518 [email protected]

Mark Josefson EQB +4969-58997-437 [email protected] Kévin Woringer CIC +33 1 53 48 80 69 [email protected]

(**) excluding: strategists, macroeconomists, heads of research not covering specific stocks, credit analysts, technical analysts

Page 62 of 63


ESN Recommendation System The ESN Recommendation System is Absolute. It means that each stock is rated on the basis of

a total return, measured by the upside potential (including dividends and capital reimbursement)

over a 12 month time horizon.

The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories: Buy

(B), Accumulate (A), Neutral (N), Reduce (R) and Sell (S).

Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate the

stocks as Rating Suspended (RS) or Not Rated (NR), as explained below.

Meaning of each recommendation or rating:

Buy: the stock is expected to generate total return of over 15% during the next 12 months time horizon

Accumulate: the stock is expected to generate total return of 5% to 15% during the next 12 months time horizon

Neutral: the stock is expected to generate total return of -5% to +5% during the next 12 months time horizon

Reduce: the stock is expected to generate total return of -5% to -15% during the next 12 months time horizon

Sell: the stock is expected to generate total return under -15% during the next 12 months time horizon

Rating Suspended: the rating is suspended due to a change of analyst covering the stock or a capital operation (take-over bid, SPO, …) where the issuer of the document (a partner of ESN) or a related party of the issuer is or could be involved

Not Rated: there is no rating for a company being floated (IPO) by the issuer of the document (a partner of ESN) or a related party of the issuer

Certain flexibility on the limits of total return bands is permitted especially during higher phases of volatility on the markets

ESN Ratings Breakdown

Date and time of production: 26th October 2016 9 :11am CET First date and time of dissemination: 26th October 2016 9 :13am CET

Disclaimer: These reports have been prepared and issued by the Members of

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