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

17 Jan 19

China stimulus boosting demand

China has received a large amount of pessimistic sentiment due to the perceived weakness in the economy from a slowdown in Industrial Production and slowing GDP growth. We believe that China has gone through a planned and necessary set of reforms in 2017 and 2018 and will emerge out of this self-imposed reform chrysalis into a period of infrastructure growth focused on two key dates: 2021 and 2022; the 100th year anniversary of the founding of the Communist Party of China in 2021 and President Xi’s 10th year in office in 2022.

Companies: ARS CAML MOD SOLG NDA BOL UMI VNP

07 Jan 19

Growth every Fortnite

With eGaming, Virtual Reality (VR) and Augmented Reality (AR) coming of age, we have examined the gaming industry to see if it can continue its staggering market growth and if these categories are still too early stage?

Companies: GFIN KWS CDM FDEV GMD MSFT ATVI EA UBI TTWO

17 Jan 19

Expansion at the expense of margins

Business Zalando came into existence in 2008 and over its decade of life, it became the leading European online platform for fashion-related goods and one of the top 10 fastest-growing retailers worldwide. The platform offers an extensive selection of fashion and beauty products to 17 markets in Europe. The company has gained a market share of around 1.1% of the overall European fashion retail market and 8% of the online fashion sector. Its customer base has expanded rapidly to reach 25.1m active customers across Europe in 2018. Zalando is consolidating basics to become a marketplace in the long term. Zalando is building the key assets for a performing online business. Fulfilment capacities are being raised across Europe and automation has been upgraded through AI tools across the entire value chain. This expansion is crucial as it allows for a competitive mix of offers and flexible logistics. However, there are still plenty of issues to be tackled. Returns and margins are foremost. Zalando still has a high rate of returned garments (around 50%), mainly in low established online markets. This adds a substantial risk to the common challenge of excess inventories. The shopping club and physical outlets enable it to dispose of excess stock but at discounted prices and this adds pressure on margins. The latter are already squeezed by high opex and costly e-commerce services. These issues would be eased by AI algorithms being developed by the company to optimise the purchasing process and reduce returns. Efficient logistics are another challenge in both upstream and downstream and this is why distribution will be limited to Europe for the time being. There is no aim to knock on markets’ doors outside Europe. Entry barriers in the online retail are tiny and competition is escalating with pure e-tailers raising their capacities and lifting their offer. Operational processes are being upgraded through advanced technologies which has become a key factor for operational efficiency and competitiveness. Zalando has leapt ahead of European peers on warehousing capacities and market share, but much work still needs to be done on the technological side. Growth perspectives are considerable for Zalando given the expected development of e-commerce penetration in Europe (estimated at 16% in 2018 and expected to reach 25% by 2023). Zalando is well armed to conquer a higher market share of the European online retail market. However, the path is not straightforward and is full of challenges. Recommendation and upside We are initiating coverage of the German Zalando (a market cap of €6.5bn and a free float of 58.7%) with a REDUCE recommendation and a target price of €26.8 per share, leading to a poor upside potential of 1.7%. Our upside is driven by: 1/ a top-line expansion at a double-digit rate in the long term thanks to the fast development of e-commerce; 2/ growing investments in assets supporting a competitive offer; 3/ a slow margin improvement due to the costly online offer. We are sceptical about the company’s earnings development compared to the huge capital employed invested. The online customer is increasingly demanding costly and sophisticated services which put retailers in a dilemma with competitiveness/profitability. Strategy Zalando is moving forward in expanding its business and building up the basics for a performing online offer. The strategy is focused on investing on warehousing and technology to move to an infrastructure provider in the long term. However, pressures on margins are intensifying and room for margin expansion is thin in the mid term.

Companies: Zalando

17 Jan 19

Strong organic growth in 2018 with a moderate finish

Beiersdorf reported a small set of top-line figures for FY 2018. Group sales rose +2.5% to €7,233m, driven by +5.4% organic growth, and meeting management’s guidance. Management gave no further guidance. The annual report will be available on 27 February 2019.

Companies: Beiersdorf

17 Jan 19

Robust Q3 orders and FY18/19 guidance confirmed

Alstom reported Q3 18/19 sales and orders Alstom booked €3.4bn of orders compared with €1.7bn last year, corresponding to an organic growth of 100%. The company reported sales of €2.0bn, up 10% organically versus €1,827m in Q3 17. The order book reached €39.7bn (5 years of sales). The company confirmed its FY18/19 guidance of sales of c.€8.0bn and an EBIT margin of c.7%.

Companies: Alstom

22 Jan 19

Second share buy-back announced

Linde plc had announced a $1.0bn share buy-back in mid-December and has now announced a $6.0bn buy-back. Based on the current share price, this represents almost 7% of Linde’s current outstanding number of shares. The transaction will start on 1 May 2019 (or earlier if the previous share buy-back has been finalised before this date) and last until 1 February 2021. Management has decided to pass a large chunk of the proceeds received from forced disposals to shareholders.

Companies: Linde

22 Jan 19

Impressive Q3 19 results, guidance raised for 2019

Logitech reported a strong set of Q3 19 results, which were above consensus on both the top- and bottom-line. Once again, Gaming and Video Collaboration are the biggest drivers which have contributed to growth and, hence, allowing the company to raise its non-GAAP operating income guidance for 2019. At this stage, we consider that the main risk is related to the ongoing discussions between the US and China, and any improvement would have a positive impact on the stock.

Companies: Logitech International

30 May 18

Executive interview - Banca Sistema

10 Dec 18

Executive interview – 2G Energy

03 Nov 16

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

07 Dec 18

Executive Interview - Nanogate

07 Dec 18

Executive Interview - Crealogix

06 Dec 18

Executive Interview - Finlab

21 Nov 18

Executive interview – Oryzon

06 Dec 18

Executive Interview - Delignit

10 Dec 18

Executive interview – mVise

09 May 18

Executive interview - Thin Film Electronics

10 Dec 18

Executive interview – Paion

24 Apr 18

Bitesize briefing - NeuroVive Pharmaceutical

10 Dec 18

Executive interview - paragon

21 Mar 18

Bitesize briefing - Auriant Mining

10 Dec 18

Executive interview – Bet-at-home

Latest Content

Logitech International

Impressive Q3 19 results, guidance raised for 2019

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22 Jan 19
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Remy Cointreau

Will Remy Cointreau be able to take advantage of China ?

The group reported strong Q3 results, which have pushed up the 9m FY18 figures. Sales grew by +8.7% organically and +9.5% on reported figures in Q3 (+8.1% organically and +6.7% on reported figures in 9m FY18) to €345.3m, leading to €931.5m of total sales during the first nine months of 2018. The House of Remy Martin division is still the best performer (+15.6% and +13.1% organically in Q3 and 9m FY18 respectively), while the Liqueurs & Spirits division reported a shy 9m FY18 growth, thanks to the Q3 contribution (+2.3% and +5% respectively). The Partner Brands division continued to decline, consistent with the group’s strategy to refocus gradually on Group Brands (-26.8% and -13.6% respectively in Q3 and 9m FY18). The FY guidance is maintained: the group expects positive growth in current operating profit.

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22 Jan 19
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Daimler

Another battery factory to be located in Poland

Daimler’s strategy is to offer various electric alternatives for each of its car segments by 2022. It has decided to assemble the batteries in its own factories but to purchase the cells on the world market.

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22 Jan 19
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UBS Group

Mixed Q4 and improved FY18 figures

Pre-tax profit increased by 2% to $862m for Q4 18 compared to Q4 17. Total operating income was down by 3% to $7.0bn for Q4 18 compared to Q4 17. Total operating expenses declined by 4% to $6.1bn compared to Q4 17. UBS reported a net profit attributable to shareholders of $696m for Q4 18. UBS reported a loss of $2.4bn for Q4 17 due to a booked charge of $2.9bn on DTA (deferred tax assets) by the US tax reforms. Net new money outflow was close to $13bn for Q4 18. UBS released preliminary figures for FY2018 too. Pre-tax profit rose by 19% to $6.4bn for FY2018 versus FY2017. Total operating income was up by 2% to $30.2bn for FY2018. Total operating expenses decreased by 2% to $23.8bn for FY2018 compared to FY2017. Personnel expenses were flat at $16.1bn in the same period. The charge of CHF2.9bn on DTAs by the US tax reforms, booked in Q4 17, burdened FY2017 as well. Net profit attributable to shareholders was $4.9bn for FY2018 compared to $969m for FY2017. It rose by 25% for FY2018 compared to adjusted FY2017. The RoE was 9.3% for FY2018 versus 1.8% for FY2017. Adjusted RoTE (return on tangible equity), was 13.8% for FY2018 compared to 13.7% for 2017 excluding DTAs. Net new money inflow was $57bn in FY2018 compared to CHF103bn in FY2017. Invested assets were down by 5% to $3.1tn at the end of 2018 compared to the end of 2017. UBS’s fully-applied Basel III common equity tier 1 (CET1) ratio was 13.1% at the end of 2018 compared to 13.8% at the end of 2017. The fully-applied CET1 leverage ratio was 3.81% at the end of 2018 compared to 3.69% at the end of 2017. The proposed ordinary dividend for FY2018 increased by 8% to CHF0.70 per share. UBS is targeting to repurchase up to $1bn of shares in 2019. Beginning in Q4 18, UBS changed its presentation currency to US dollars following changes in the functional currencies of UBS (formerly CHF). However, the impact is negligible as the current $/CHF exchange ratio is 1.00.

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22 Jan 19
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Esker

Esker - FY18 revenue growth of 14% confirmed

Esker saw another strong quarter in Q418, with underlying revenue growth of 15% resulting in FY18 revenue growth of 14% (or 16% in constant currency). A strong uplift in the value of contracts signed in FY18 provides good visibility for FY19 and support for the company’s target of generating another year of double-digit revenue growth. We have revised our forecasts to reflect FY18 revenues and the company’s strategy of reinvesting any profits above the 15% target operating margin level.

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22 Jan 19
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Linde

Second share buy-back announced

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22 Jan 19
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Abivax

Getting a brake in inflammation

With proof-of-concept trials in ulcerative colitis ("UC") suggesting efficacy on a par Abivax's ABX464 looks a real alternative to approved therapies. A new class of oral drug releasing a natural inflammatory brake, ABX464 could alleviate the treatment failures and possibly safety issues of existing drugs. This would open a significant opportunity in a > $70bn market. We are optimistic that clinical studies planned for 2019E should confirm the UC results and may suggest efficacy in Crohn's Disease and rheumatoid arthritis ("RA"). There appears a firm basis for a licensing / development deal expected during 2019E. We reiterate our OUTPERFORM recommendation and increase our target price ("TP") to €28.80 (from €19.50 / share).

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22 Jan 19
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Renault

2018 deliveries were short of our projections

Including the Chinese joint-venture that was set up in 2017 (it operates Jinbei and Huasong light commercial vehicle brands), deliveries amounted to 3.88m, an increase of 3.2% compared to the 2017 number which excluded any joint-venture deliveries. Excluding this volume of 166k LCVs, deliveries fell by 1.2% to 3.72m in 2018. We had expected 3.9m units. This gap of almost 5% or around 180k units is not insignificant. Africa, the Middle East, India was the weak spot last year. Regional deliveries fell by 16% to 449k and, outside France, deliveries fell by 0.6% to 1.23m in Europe (the number was up by 2.4% to 690k in France). Finally, APAC was another weak spot with deliveries down by 16% to 164k when the joint-venture is excluded. Renault experienced some growth of 2% to 748k in Eurasia (i.e. Russia and surrounding countries) and strong growth in LatAm (+12% to 437k). Management sees the volume increasing slightly in 2019, but positive growth is not expected to start in H1.

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18 Jan 19
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SELVITA

Selvita - SEL120 to enter clinical development in 2019

The data readout from the SEL24 Phase I/II trial in relapsed/refractory AML and the second lead asset, SEL120, moving into clinical development next year are milestones in Selvita’s internal drug R&D. This should accelerate, as the company’s plans to focus on innovation were endorsed by shareholders during the fund-raise earlier in 2018. R&D progress across the earlier-stage pipeline has been reported in several publications in recent months. The Innovations Platform continues to receive support from Selvita’s rapidly growing drug discovery services business. Our valuation is PLN1.24bn or PLN77.6/share.

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18 Jan 19
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Wacker Chemie

Better than expected

Wacker’s FY 18 profitability was negatively impacted by higher raw material prices (Polymers) and lower volumes and sales prices (Polysilicon) accompanied with the re-ramp up costs for the Charleston site. In addition to the difficult business environment, the compensation for the business interruption is still pending. All in all, Wacker’s preliminary figures exceeded our cautious expectations, but more information is needed to have a deeper dive into the figures.

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