Rest of EMEA

Rest of EMEA equity research

Explore the most viewed and latest equity research and media content we have for listed companies based in the rest of EMEA.

EMEA Equity Research

Broker research, valuations, and analysis on European stocks

21 Aug 18

Off to the races as NFL season draws closer

The US sports betting market has the potential to be significantly large. However, lack of federal level legislation, sluggish state by state legislative processes, and other limiting factors will cause a likely drag on the sport betting market’s full potential. The American Gaming Association estimates at least $150bn is wagered annually with offshore books, which implies a $10bn - $12bn revenue market. We estimate, onshore online sports revenue in 4 - 5 years of $6bn (table 6, p14) should be achievable across 25 States where Daily Fantasy Sports is legal in 22 states, if we include California, implies a market as large as $7.5bn in revenue. UK listed operators not necessarily only winners as US operators, Stockholm listed and some private companies make early inroads. Sports betting live in New Jersey, Mississippi, Delaware and Nevada, with West Virginia and Pennsylvania expected to follow soon.

Companies: GVC WMH PPB PTEC SPO 888 GAN NKTN KAMBI GIG SGMS IGT

16 Sep 18

Geely to increase its Daimler stake?

Chinese speculations suggest that Geely and its owner Li Shufu intend to increase their Daimler stake from currently slightly less than 10% by another 15%. According to Daimler’s most recent ownership report, Bank of America currently controls 15.7% of Daimler’s votes and Morgan Stanley another 5.5%, with Bank of America overwhelmingly via options. These two banks were apparently the organisers of Geely’s initial investment and some of Geely’s current Daimler shares might well be included. When Geely announced the initial stake, Daimler’s shares traded at around €70, but they have meanwhile fallen to some €55. As some or perhaps all of the above-mentioned options might not relate to Geely but to other institutional investors, these speculations might be to try to bring Daimler’s share price back to a higher level to limit, or at least reduce, the loss that has occurred since February of this year. Li Shufu’s wealth is believed to amount to $12bn or €10bn. The discrepancy between the Daimler purchase value and its current market value amounts to €1.6bn, i.e. Mr Li has lost some 15% of his wealth with this initial transaction alone. Is he willing to risk more?

Companies: Daimler

13 Sep 18

Vectron Systems - Shift in digital services strategy

Vectron has had a turbulent first half as it works to diversify its business into digital services. Several management changes have seen the company return to founder control. To develop its digital marketing services, the company has chosen to use an existing loyalty platform via a partnership with DeutschlandCard, revised its relationship with Coca-Cola and entered into a pilot project with the digital arm of Metro. Regulation is likely to reinvigorate POS system sales in FY19 with longer term growth dependent on the successful uptake of digital services.

Companies: Vectron Systems

14 Sep 18

Claranova - Adding new sales channels for myDevices

myDevices, Claranova’s internet of things (IoT) business, has announced two distribution agreements for IoT in a Box. These deals provide access to the reseller and distributor networks of Alibaba Cloud and Ingram Micro, substantially widening the business’s access to the Chinese and US markets. We maintain our forecasts for the myDevices division but note that these deals offer the potential for material revenue contributions once the reseller networks are fully trained up on the product.

Companies: Avanquest Software

13 Sep 18

Orexo - Orexo wins patent litigation appeal

Orexo’s appeal of the US District Court’s invalidation of the ‘330 patent, which had been anticipated for some months, has been successful. Zubsolv is Orexo’s largest and fastest-growing product – we anticipate sales of c SEK620m and over 25% growth in FY18. The initial invalidity of the ‘330 patent had weighed on the shares since 2014 and this overhang has now been removed. The exclusivity of the Zubsolv patents runs until 2019 and 2032. We have updated our valuation ahead of the Q318 results.

Companies: Orexo

13 Sep 18

Passenger numbers continue rising sharply

Frankfurt’s number increased by 8.1% to 6.8m in August which brought the ytd number to 46.3m, an increase of 8.7%. Our current full-year projections are based on an increase of 7.4% to 69.3m, which is achievable. However, this growth was overwhelmingly achieved with passengers flying within Europe (+12% and +13%, respectively) whereas the inter-continental passenger number increased by only 2.6% and 2.4%, respectively. However, the latter passengers typically contribute disproportionately to retail revenue at the airport and this business has been less profitable during H1 18. The above numbers suggest that this negative trend has continued in recent months. The other fully-consolidated airports saw somewhat more moderate growth. Newly-consolidated Brazilian airports (Fortaleza and Porto Alegre) experienced growth of 4.6% to 1.25m passengers in August and the 14 Greek airports (consolidated since April 2017) saw their combined passenger number increasing by around 6.5% to 5.4m. At-equity consolidated Antalya and St Petersburg, as well as Xi’an, continued to achieve very strong growth rates between 9% (Xi’an) and 15% (Antalya). Hanover is still shown in the August numbers, but this minority stake of 30% will be sold in due course, i.e. the contract has been signed.

Companies: Fraport AG Frankfurt Arprt Svcs Wrldwde

14 Sep 18

A sluggish Q2

Oriflame has reported lfl growth of 1% in Q2 and margins improved in the quarter thanks to a favourable price mix effect and tight opex control. Asia is slowing down.

Companies: Oriflame Holding

10 Jun 16

Frankfurt’s passenger number -5.5% in May

The number fell to 5.30m in the last month which brought the ytd number to 23.16m, a fall of 0.1%. This is clearly worse than we had expected and comes on top of management’s profit warning for at-equity profits from the stake in Antalya (see our comment from 22 May). Lima, the other fully-consolidated airport in Fraport’s portfolio, continued doing well. Here, the number of passengers was up by 13% to almost 1.6m in May and by 11% to 7.45m ytd. The usage of Antalya’s terminals fell by 37% to 1.86m and 22% to 5.45m, respectively. Frankfurt’s passenger number fell for both European (-5.7%) and inter-continental (-4.9%) destinations. It is interesting to note that the number of passengers flying to/from Middle Eastern destinations continued rising (+7.7% and +5.3%, respectively). This indicates that airlines from this region are achieving strongly rising market shares in Frankfurt.

Companies: Fraport AG Frankfurt Arprt Svcs Wrldwde

12 Feb 16

Another promising order in new vertical market

Thinfilm has announced it has been awarded a five-digit unit order for NFC SpeedTap labels from a leading global fast-moving consumer goods company (FMCG). The labels, which contain a single unique ID and an NFC printed circuit, enable consumers to tap the label with NFC-enabled smartphones to access information about the product, giving it powerful CRM and consumer engagement advantages. The client, who has not been named, is reported to have total annual sales volumes of several billion units. This order adds to the tally of new NFC-related pilot customers (Ypsomed, Jones Packaging, Tata Consulting Services), and supports our view that NFC will be a major growth driver for Thinfilm in coming years.

Companies: THIN FILM ELECTRONICS

18 Jul 16

Political risk over-hang

Mixed messages from UK and EU governments already highlight a potential for on-going political risk, with any sector volatility accentuated by Solvency II. With significant value in the sector we would look to now buy shares with strong fundamentals to be confirmed by upcoming results.

Companies: ALV CS PRU LGEN PHNX

28 Aug 17

Exit of BNP Paribas, Albert Frère’s historical partner

The year 2016 saw the end of a partnership of almost 50 years. If we go back to the origins of the relationship, it was in fact in 1968 that the French bank Paribas entered the capital of Albert Frère group, Albert Frère at the time being a Belgian industrialist buying up steelmakers. At the same time, in the 1970s, Albert Frère became one of Paribas’ shareholders, as well as the Canadian businessman Paul Desmarais. The story is that in 1982 the new French socialist government decided to nationalise the banks. Acting in consort with two former executives of Paribas, Albert Frère and Paul Desmarais formed the Swiss subsidiary Pargesa Suisse to escape from nationalisation. The assets of this company were housed in an “ empty shell ” denominated Pargesa (Paribas Genève SA). Some years later, Paribas and the Frère-Desmarais group normalised their relations. The bank recovered its assets and entered as a shareholder in Pargesa, which became a central holding of the Frère-Desmarais empire. The story does not end there. In 1987, the privatisation of Paribas led the tandem Frère-Desmarais to become one of the most important shareholders of the bank – before their leaving of the financial sector (the Paribas shares were entirely sold in 1998). At this date, Paribas remained a major shareholder of the group, as is shown in the chart below, which is dated 1998. The bank intervened at three levels: the first constitutive holding of the Albert Frère group: Erbé (with 47%); an intermediary holding of the Albert Frère group: Companie Nationale à Portefeuille (with 2.4%), which directly held some listed and unlisted investments; the support holding of the Frère-Desmarais group: Pargesa (with 13.9%), direct holding of GBL.

Companies: Pargesa Holding

27 Sep 17

Emphasis on controlled growth

H1 EBITDAR was at €407m (+10.3% yoy), in line with consensus estimates. EBITDA came in at €259m (+17.4% yoy; margin +100bp to 17.0%), beating consensus; net profit was €96m (+27.1% yoy), beating market expectations. This net profit excludes the €143m expense from the mark-to-market of the ORNANE derivative, which should be offset in H2 17. Orpea confirmed its 2017 guidance of 10% revenue growth, at over €3,125m, and expects a margin improvement.

Companies: Orpea

13 Feb 18

Q4 17 and guidance 2018 broadly in line

Q4 revenues were €816m (+10.8%, organic +5.7%), broadly in line with consensus estimates. Guidance 2018: revenue at €3.4bn (+8.3%), with an EBITDA margin at least the same as in 2017.

Companies: Orpea

23 Apr 18

Sound cash flow; “nothing else matters”

Despite lower earnings in Q1 18, Investor is as always in good shape thanks to its strong and recurrent cash-flow stream.

Companies: Investor

18 Jul 18

Sadly under the spell of global threats

Irrelevant quarterlies cannot hide the fact that trade war worries have cut into the NAV. Too bad. Non-listed units (booked under Patricia) do well.

Companies: Investor

03 Nov 16

Executive Interview - bet-at-home.com (Deutsch)

21 Mar 18

Bitesize briefing - Auriant Mining

09 May 18

Executive interview - Thin Film Electronics

29 Nov 17

Executive Interview - NeuroVive Pharmaceutical

07 Feb 18

Kenmare Resources plc - Update from Mining Indaba

27 Sep 17

Executive interview - The Marketing Group

07 Aug 17

Executive interview - Mondo TV (Italian)

14 Jul 17

Executive interview - Banca IFIS

24 Apr 18

Bitesize briefing - NeuroVive Pharmaceutical

30 Jun 17

Executive interview - UMT

07 Aug 17

Executive interview - Mondo TV

26 Jun 17

Executive Interview - Carmat

25 Jul 17

Executive Interview - DeA Capital

24 May 17

Executive Interview - Reworld Media

15 May 17

Executive Interview – MedServ

Latest Content

Easyvista

Strong H1 earnings, with sales +50% and positive EBIT

The pattern of H1 18 confirms the consistency of the business model. After the build-up of both management and workforce in previous years, the pay-back is now visible with a positive EBITDA (€2.1m vs €-1.8m in H1 17) and is on track for the €10m envisaged in 2020.

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20 Sep 18
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Salzgitter

Management raises 2018 guidance

Management continues to see revenue coming in at just above €9bn (our projection is €9.09bn), but instead of a pre-tax profit range of €250-300m, it now sees it reaching €300-350m (our projection is €310m). Management argues that this improved profit outlook is the result of protectionist measures taken by the EU. As a result, the inflow of steel coming from China has not developed as expected earlier. Whether the new trade barriers between the USA and China will lead to another change in the picture remains to be seen.

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20 Sep 18
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THIN FILM ELECTRONICS

Thin Film Electronics - New Apple phones show enhanced NFC support

Apple’s introduction of native NFC support in the iPhone models launched this month is a key development for Thinfilm. First, it makes it easier for consumers with these models to tap and read NFC tags, removing an inhibitor to adoption. Second, it indicates that Apple is becoming more supportive of a consumer-friendly NFC ecosystem. The initial reaction from Thinfilm’s customers to the announcement appears to be very positive. Because it will take time for this heightened interest to convert to potential orders, we leave our estimates and valuation broadly unchanged.

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19 Sep 18
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GEA Group Aktiengesellschaft

A successor for outgoing CEO Jürg Oleas has been found

Several profit warnings resulted in the immediate departure of the CFO in spring 2018 and the announcement that the CEO would leave in early 2019. It has taken the Supervisory Board some six months to present a successor: Stefan Klebert, born in 1965. This announcement has resulted in quite a sharp share price recovery today (19 September). Investors seem to believe that things can only get better under the new helm. Because of the company’s regular profit warnings in recent years, the share price fell from almost €50 in September 2016 to €27 in July this year. This share price bottom was reached about three months after the management shake-up was announced. Since then, the share price has recovered to a good €31. Only the future will tell whether Stefan Klebert is the right person. He is an experienced engineer but is pretty inexperienced with GEA’s client industries. His last job was to run Schuler AG, a manufacturer of heavy forging presses that go into the auto and other industries. This is not an industry GEA sees as a target. However, at the end of the day, the CEO’s responsibility is to run and optimise a company without necessarily knowing its clients in detail.

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19 Sep 18
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mVISE

mVISE - Focus on digital transformation and synergies

In recent quarters mVISE has completed the acquisition of a consulting team from SHS Viveon and the sale of loss-making workforce management software business Just Intelligence (JI). These have increased mVise’s ability to derive synergies from within the group and its focus on its core business of digitisation transformation. In H118, helped by increased consulting rates, the group was also able to report a 78% y-o-y increase in revenue and 50% margin expansion leading to a 1.6x y-o-y increase in EBITDA. We see good grounds for a continuation of favourable results in H2. Currently, mVise shares trade at a 24% discount to its two most profitable consulting-oriented peers on FY2 EV/EBITDA multiples. We believe this shows strong upside potential given the group’s growing exposure to the much more highly rated software products segment.

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18 Sep 18
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Deutsche Grundstuecksauktionen

Deutsche Grundstücksauktionen - Well-positioned

Deutsche Grundstücksauktionen (DGA) has improved even on an ‘outstanding’ H117 comparative, with the highest first-half gross turnover and net commission for more than a decade and net profit up c 60% in H118. While the driver (a record lot sale of €15m, almost a quarter of total gross turnover) was arguably exceptional, the offer of further high-value lots is not wishful thinking, given DGA’s good relationship with the Federal Bundesanstalt and excellent publicity as a reference sale. Indications of positive imminent Q3 auctions support guidance of a stable second half and thus forecasts of a bumper dividend (prospective 5.2% yield).

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18 Sep 18
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Mayr-Melnhof Karton

Operational resilience remains

Despite competition and cost headwinds, Mayr-Melnhof has done well to achieve consistent results. While Karton (in recent months) has been compensating for the weakness in Packaging, there are no major worries in either of the businesses. In fact, the ongoing packaging industry consolidation should result in the much-needed re-rating of packagers.

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18 Sep 18
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Safran

Positive CFM56-leap transition bears fruit

Safran released solid H1 results: adj. revenue grew by +23.9% yoy and EBIT by +32.6% yoy. It is worth noting that the reassuring Zodiac integration and the better-than-expected CFM56-Leap transition have strongly contributed to these results. The group significantly raised its FY18 guidance as the H1 results exceeded the expectations, and as the outlook seems promising.

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18 Sep 18
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H & M Hennes & Mauritz

Growth surprises in Q3

H&M has well surprised with its acceleration in pace of growth in Q3. Sales were up 4% at CER and 9% reported compared to flat sales in H1. Further information will be released in the 9-month report on 27 September.

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18 Sep 18
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Clariant

Friendly takeover?

It looks to us as if Clariant has become the cue ball in the Arabian strategy game as Saudi Arabian Sabic looks to be attracting Saudi Arabian Aramco. With its close to 25% stake in Clariant, Sabic has become the dominating shareholder with strategic ambitions. The announced creation of High Performance Materials, the new CEO and Mr Kottmann’s re-appointment as Chairman of the Board look more like a must rather than a may.

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