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Salzgitter

Reasonable 9M numbers, but some margins were down

Salzgitter’s 9M numbers were just ahead of our expectations. Revenue increased by 1.7% to €6.93bn, EBIT by 42% to €332m, and pre-tax earnings by 63% to €285m. Our respective numbers had been €6.89bn, €318m, and €265m.

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  • 14 Nov 18
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Electricite de France

Robust 9M trading, supported by organic growth in all divisions

EDF released a robust set of Q3 trading figures, fully in line with our forecasts. The group’s top line increased by 5.3% organically, driven by higher output in both the historical French division and in the renewables segment. The group confirmed all its 2018 financial objectives.

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  • 14 Nov 18
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Rexel

Sluggish Q3

Q3 results came in below our estimates as well as market consensus. Growth momentum in Europe was halted primarily by Germany’s underperformance (resulting from its turnaround efforts), France’s lower than expected growth (led by difficult comparables) and the UK’s continuing contraction (on the back of Brexit-led uncertainty). Offsetting this, the US remained upbeat, benefiting from strong underlying demand. We have lowered our estimates. No change in the stock recommendation.

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  • 14 Nov 18
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J D Wetherspoon

Good Q1 performance; cost pressure a concern

It was a good quarterly performance but management’s outlook of weaker trading performance in FY18/19 has spooked investors. The outlook is a bit below our estimates but the company still remains well-placed among the branded publicans in the UK. We have reduced our earnings estimates but have assigned a premium in the relative valuation to factor in JDW’s strong position due to high reliance on drinks and ‘best-in-class’ prices in the country. No change in the stock recommendation.

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  • 13 Nov 18
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Nokian Tyres

Updated financial targets for the years 2019 through to 2021

At tomorrow’s capital markets day, management will present its new financial targets. These are: Revenue is to grow faster than the market with a growth rate of more than 5% currency-neutral from previously 4-5%. EBIT at a level of 22% from previously a minimum of 22%. Dividend payout ratio of more than 50% from previously at least 50%. Revenue growth is expected to come from Central Europe (+50% within five years) and North America (to double in five years). Nokian Renkaat has expanded its tyre production capacity in Russia (for the European markets) and is currently constructing an entirely new plant in the USA, i.e. capacities to realise these growth rates will be available. In addition, the revenue from ‘low-margin’ Heavy Tyres is expected to increase by 50% within five years. The EBIT margin target is not ambitious. However, this is the result of the anticipated disproportionate growth of Heavy Tyres which are currently generating a below-average margin. In addition, Retail is expected to generate a margin of 3% by the end of 2019 (negative in recent years and about break-even currently). Up to now, this division’s profits are booked by the manufacturing segments and it remains to be seen whether these will pass some of their profits to this division.

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  • 13 Nov 18
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Hamburger Hafen und Logistik

Good 9M numbers

HHLA’s revenue increased by 2.2% to €964m while the EBITDA number was down by 1.7% to €241m, whereas both EBIT and net earnings were up (+0.6% to €156m and +6.1% to €84m, respectively). Revenue was exactly in line with our projections while EBITDA and EBIT were marginally lower, whereas the net profit number is clearly higher than what we had expected. Compared to the group’s consensus numbers, all reported numbers were at the upper end of expectations.

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  • 13 Nov 18
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