Please find our Research on Bloomberg BRYG
Last Daily chg Chg YTD LUXOTTICA BUY, Fair Value EUR44 (+14%) close (%) (%) Indices The Investors Day next week could harbour some catalysts for the stock Dow Jones 14996.48 -0.90% +14.44% S&P 500 1678.66 -0.90% +17.70% Next week on October 8 & 9 Luxottica will host an Investors Day in its US Retail Nasdaq 3774.34 -1.07% +25.00% headquarters which are located in Mason (suburb of Cincinnati). For the first time since Nikkei 14024.31 -0.94% +36.19% the acquisition of Oakley in 2007, Luxottica will go further into its strategy for North Stoxx 600 309.554 -0.40% +10.68% America which accounts for 58% of group’s sales, with a particular focus on US Retail. As CAC 40 4127.98 -0.73% +13.37% highlighted in our Optics Sector Report in May (“US: an emerging market?”), the US Oil /Gold optics market harbours significant growth potential despite already being the leading Crude WTI 103.06 -0.92% +12.17% Gold (once) 1315.18 -0.24% -20.89% market for Luxottica or Essilor (~40% of sales). Currencies/Rates SOFTWARE AG BUY, Fair Value EUR30 (+13%) EUR/USD 1.36235 +0.24% +3.33% EUR/CHF 1.22615 +0.09% +1.60% Feedback from company contact: positive catalysts are still there
German 10 years 1.822 +0.91% +40.22% We reiterate our Buy rating and our DCF-derived fair value of EUR30 following a contact French 10 years 2.361 +1.10% +18.62% with the company last week. A change in our fx assumptions and higher opex due to an Euribor 0.224 -0.44% +19.79% aggressive sales recruitment activity and recent acquisitions have a minor negative Economic releases : impact to our EBIT margin assumptions in our view. Positive catalysts on Software AG Date remain the same: 1). Positive momentum in Business Process Management; 2). Return to 4th-Oct US - ALL Economic Data Delayed due to Govt. organic growth foreseeable from Q4 13; 3). Projected margin trends priced in; 4). Current Shutdown valuation that does not reflect Software AG’s repositioning.
BUSINESS SERVICES Upcoming BG events : Date Top Picks Q4 2013: Sodexo retained, Bureau Veritas exited 4th-Oct Sanofi/Genzyme (BG Paris Lunch with CEO) LOOKING BACK ON Q3 2013 10th-Oct Club conso Déjeuner avec le DG du pôle horloger For Q4 2013, we retain Sodexo . des Galeries Lafayette Since our upgrade at the end of May 2013, the stock performance has been a bit 15th-Oct CNP (BG Roadshow Luxembourg 1H results with IR) disappointing, i.e. +0.4% relative to the DJ Stoxx, reflecting sluggish results expected for FY st 31st-Oct Imerys (BG Paris Roadshow with CEO and CFO) 2012/13 ending 31 August. Nevertheless, actions implemented in H1 and reinforced in H2 6th-Nov Vinci (BG Paris Lunch with Ch. Welton) as well as the group’s fundamentals should help it to restore a more robust pace of growth, bearing in mind that the group’s target is to reach a 6.3% EBIT margin by the end of FY2014/15 compared to 5.1% anticipated for 2012/13, down 18bps. Recent reports : Staffing Downgraded Date After strong Q3 performances, we have decided to downgrade our recommendation on 3rd-Oct LVMH - The start of a recovery at Louis Vuitton staffing companies to sell from neutral on Adecco (Fair Value CHF58) and Randstad (Fair 2nd-Oct VINCI - BUY, Fair Value EUR47 vs. EUR45 (+7%) Value to EUR38 from EUR33) mainly due to valuations. We are convinced that the inflection 1st-Oct VICAT - Road Show feedback: Egypt improving in point could be reached in Q4, i.e. positive lfl revenue growth after negative figures since Q1 2014 2012 for Adecco and Q2 2012 for Randstad . 24th-Sept SUEZ ENVIRONNEMENT - Roadshow feedback - Key takeaways 18th-Sept VEOLIA ENVIRONNEMENT Roadshow feedback – In brief... Turnaround on track 17th-Sept FRESENIUS SE - Happy ending for the Rhoen saga KERING (EX PPR), Soft LFL sales growth for Gucci in Q3 (+2% expected vs. +4% in H1) We expect Gucci brand sales growth in Q3 13 should be limited, close to 2% after +4%
320 04/10/13 both in Q2 and in H1, despite an easier comparison base (+7% in Q3 12 and +10.8% in H1 12). 310
300 290
280
270
260
250
Stoxx Europe MAV 50D MAV 200D Source Thomson Reuters
BG’s Wake Up Call Back to front page
Luxury & Consumer Goods Luxottica The Investors Day next week could harbour some catalysts for the stock Price CHF38.50 Fair Value EUR44 (+14%) BUY
Bloomberg LUX IM Next week on October 8 & 9 Luxottica will host an Investors Day in its US Retail headquarters Reuters LUX.MI which are located in Mason (suburb of Cincinnati). For the first time since the acquisition of 12-month High / Low (CHF) 42.7 / 27.9 Oakley in 2007, Luxottica will go further into its strategy for North America which accounts for Market Cap (CHFm) 18,378 58% of group’s sales, with a particular focus on US Retail. As highlighted in our Optics Sector Ev (BG Estimates) (CHFm) 19,816 Report in May (“ US: an emerging market? ”), the US optics market harbours significant growth Avg. 6m daily volume (000) 541.8 3y EPS CAGR 15.1% potential despite already being the leading market for Luxottica or Essilor (~40% of sales). ANALYSIS 1 M 3 M 6 M 31/12/12 • North American Retail: 78% of Retail business sales and 48% of group revenue. With 2012 Absolute perf. -3.6% -1.9% -3.6% 23.9% sales of EUR3.4bn and 4,818 stores, NA Retail is definitely core for the Retail Business as well as Consumer Gds 1.4% 3.7% -1.5% 9.0% for the Italian group. The two major retail banners are: i) LensCrafters (~90% of sales in NA => DJ Stoxx 600 2.6% 8.4% 5.0% 10.7% ~EUR1.3bn), which is the leading optical retailer (mix: ~75% Rx and ~25% sun) and ii) Sunglass YEnd Dec. (€m) 2012 2013e 2014e 2015e Hut (~80% of sales in NA => ~EUR800m) which is also the largest specialty sunglass retail Sales 7,086 7,489 8,050 8,654 business. These two brands continue to gain market share in NA thanks to a premium/high end % change 5.7% 7.5% 7.5% product offering and a focus on service (LC: on-site labs, personalised shopping experience, use EBITDA 1,340 1,473 1,627 1,785 of the Accufit Digital Measurement System, etc.). Hence, they will continue to be the main growth engine of US Retail. EBIT 982.0 1,103 1,230 1,359 % change 12.3% 11.5% 10.4% • What future for Pearle Vision, Sears Optical and Target Optical? LUX might provide more Net income 541.7 642.5 739.7 832.5 details about its strategy for these three brands. Since 2011 Pearle Vision has been shifting % change 18.6% 15.1% 12.5% from a DOS-oriented business model (254 DOS at end-2012) into a franchising network(357 franchised stores) and we expect this trend to go on in the future. Sears Optical (775 stores, 2012 2013e 2014e 2015e sales of ~EUR300m) and Target Optical (331 stores, sales of ~EUR150m) are licensed brands Operating margin 13.9 14.7 15.3 15.7 with stores located in the eponymous department stores. Whilst TO is in good shape, SO Net margin 7.6 8.6 9.2 9.6 posted disappointing performance over the past few years as the department-store chain is ROE 13.6 15.1 16.0 16.5 struggling with tougher competition and a decline in footfall. There have had frequent rumours ROCE 9.7 11.0 12.2 13.4 of a possible sale of SO. Gearing 41.6 33.7 24.1 14.6 • North American Wholesale: 27% of Wholesale business sales and 11% of group revenue. (€) 2012 2013 e 2014 e 2015 e Although it will not be the key subject at the Investors Day, LUX should certainly come back on EPS 1.15 1.36 1.56 1.76 the significant growth prospects offered by the NA market for the Wholesale business. As a % change - 17.8% 15.1% 12.5% reminder LUX estimates that almost 80% of sunglass purchases are made at prices of less than P/E 33.4x 28.3x 24.6x 21.9x USD50, whereas in Europe it is around EUR100. To reduce this gap, LUX must expand its store FCF yield (%) 4.2% 3.8% 4.2% 4.8% network further, as its better-trained sales force will educate consumers and convince them to Dividends (€) 0.58 0.70 0.78 0.88 trade up. Again, US Retail will be a key pillar in the group’s Wholesale business expansion in NA. Div yield (%) 1.5% 1.8% 2.0% 2.3% • A word on the current trading? Despite a satisfying 24% increase in the share price ytd, the EV/Sales 2.8x 2.6x 2.4x 2.2x stock’s performance over 3M was a bit negative (-3.3%), explained by the weak USD and EV/EBITDA 15.0x 13.5x 12.0x 10.7x concerns regarding the US macro (end of QE3, US shutdown) despite signs of recovery (US EV/EBIT 20.4x 18.0x 15.9x 14.1x housing and unemployment rate figures are well-oriented). It will be interesting to have LUX’s opinion about the activity trends in the US after some groups have reported soft numbers during the summer due to consumers’ arbitrage in favour of new cars and real estate over discretionary products. As for the FX, we have already retained a significant negative FX impact in our Q3 forecasts (c.-6% on top line) which could lead to a c.-3% effect for 2013 and explains why our FY13 sales assumption is below consensus (EUR7.6bn). Ahead of the Q3 results, management should be reassuring: Wholesale portfolio orders were up “mid-teens” at end-July and the roll-out of G. Armani is still successful. VALUATION • At 15.8x 2014e EV/EBIT, the stock is trading at a slight 2% premium vs. the 2004-13 historical average. Ahead of the Investors Day we reiterate our Buy recommendation and our FV of EUR44. NEXT CATALYSTS • Investors Day in Cincinnati on October 8-9 // Q3 13 results on October 29, 2013. Click here to download
Analyst : Consumer Analyst Team : Cédric Rossi Loïc Morvan 33(0) 1 70 36 57 25 [email protected]
4 October 2013 2
BG’s Wake Up Call Back to front page
IT Software & Services Software AG Feedback from company contact: positive catalysts are still there Price EUR26.64 Fair Value EUR30 (+13%) BUY
Bloomberg SOW GR We reiterate our Buy rating and our DCF-derived fair value of EUR30 following a contact with the Reuters SOWG.DE company last week. A change in our fx assumptions and higher opex due to an aggressive sales 12-month High / Low (EUR) 35.1 / 22.5 recruitment activity and recent acquisitions have a minor negative impact to our EBIT margin Market Cap (EUR) 2,315 assumptions in our view. Positive catalysts on Software AG remain the same: 1). Positive Ev (BG Estimates) (EUR) 2,351 momentum in Business Process Management; 2). Return to organic growth foreseeable from Q4 Avg. 6m daily volume (000) 331.6 3y EPS CAGR -0.2% 13; 3). Projected margin trends priced in; 4). Current valuation that does not reflect Software AG’s repositioning. 1 M 3 M 6 M 31/12/12 ANALYSIS Absolute perf. 14.3% 17.0% -11.2% -17.0% • Fine-tuning our sales estimates . We shave our revenue ests. by 1% for 2013 and by 2% for Softw.& Comp. -0.3% 4.3% -1.3% 4.3% SVS 2014-15 on updated forward fx assumptions (EUR/USD 1.35 vs. 1.30, and other currencies). We DJ Stoxx 600 2.6% 8.4% 5.0% 10.7% calculate Software AG’s revenue growth will be negatively impacted at -0.9ppt for 2013 (o/w YEnd Dec. (€m) 2012 2013e 2014e 2015e est. -2ppt for Q4) and -1.4ppt (of which est. -2.4ppt for Q1 and -2.7ppt for Q2). That said, we do Sales 1,047 990.5 1,037 1,119 not touch our Product sales ests. in the BPE (Business Process Excellence) and ETS (Enterprise % change -5.4% 4.7% 7.9% Transaction Systems) divisions at cc, in the low-end of respective company guidance ranges for EBITDA 314 258 268 306 2013 (+16%/+20% in BPE, -9%/-4% in ETS). We reiterate for Q3 13 licence sales exceptionally high vs. Q2 in BPE (est. 30% higher, due to two large licences - o/w one of EUR10m with EBIT 248.3 212.7 213.2 251.5 USTranscom - delayed to Q3 from Q2), sequentially 29% lower vs. Q2 in ETS as one deal above % change -14.4% 0.2% 18.0% EUR10m was pushed forward, and seasonally declining revenues in Consulting (est. -5%, due to Net income 212.5 176.1 184.3 211.3 the divestment from the IDS Scheer Consulting business in Eastern Europe - EUR2-3m - and % change -17.1% 4.6% 14.7% summer holidays. Our new forecasts do not call into question a return to positive lfl revenue 2012 2013e 2014e 2015e growth in Q4 13 and 2014. Operating margin 28.7 24.7 24.5 26.1 • Fine-tuning our bottom-line assumptions . We shave our EBIT margin assumptions to 21.5% Net margin 15.7 14.0 13.5 14.9 from 22.1% for 2013 (-3% on EPS), to 20.6% from 21.4% for 2014 (-4% on EPS), and to 22.5% ROE 15.5 13.3 12.2 12.7 from 23.2% for 2015 (-4% on EPS). The 2018 plan remains valid, i.e. reaching EUR1bn Product ROCE 22.2 16.3 17.7 20.9 revenues in BPE, while generating an EPS of EUR3.00 (vs. EUR1.90 in 2012). However, we Gearing -4.7 3.4 -8.7 -23.1 understand aggressive investment in sales and marketing (sales reps hiring) and recent
(€) 2012 2013 e 2014 e 2015 e acquisitions (5 in 2013: Metaquark, LongJump, Alfabet, Apama, JackBe) will hit Software AG’s EPS 2.39 1.98 2.08 2.38 EBIT margin and EPS a little more significantly than we thought. In particular, BPE-related sales % change - -17.1% 4.6% 14.7% and marketing costs up 5% sequentially both in Q3 and Q4 is a fair assumption, while R&D costs P/E 11.1x 13.4x 12.8x 11.2x are expected to keep increasing sequentially in Q4 13. As such, we now believe that in Q3 13 FCF yield (%) 7.3% 7.6% 7.4% 8.6% Software AG will post an EBIT margin of 20.2% (down from 22.2%), in line with the consensus’ average. Dividends (€) 0.46 0.46 0.46 0.48 Div yield (%) 1.7% 1.7% 1.7% 1.8% • Positive catalysts are still there . Despite the volatile nature of growth, we think that strong EV/Sales 2.2x 2.4x 2.1x 1.8x trends in business process management and a more favourable revenue mix lend credibility to EV/EBITDA 7.2x 9.1x 8.3x 6.6x a positive growth scenario from Q4 2013 onwards, pending a higher EBIT margin in 2015: 1). EV/EBIT 7.5x 9.6x 8.7x 6.9x The BPE segment should maintain its vigorous momentum thanks to a set of new products that address new challenges in business process management (Cloud, Big data, Mobility, Enterprise social networks); 2). After eight quarters of negative growth, we think Software AG will be capable of restoring positive growth from Q4 2013 as BPE products grow and ETS products and Consulting decline; and 3). The likelihood that EBIT margin will not improve before 2015 is well priced in, as well as the possibility EPS could be slightly below the EUR1.70-1.80 guidance for 2013.
VALUATION • Software AG’s shares are trading at est. 9.6x 2013 and 8.7x 2014 EV/EBIT multiples. • Net debt on 30 th June 2013 was EUR83.8m (net gearing: 9%). NEXT CATALYSTS • Innovation World 2013 users’ conference on 8 th -10 th October in San Francisco. • Q3 13 results on 24 th October before markets open. Click here to download
Analyst : Gregory Ramirez 33(0) 1 56 68 75 91 [email protected]
4 October 2013 3 BG’s Wake Up Call Back to front page
Sector View Business Services Top Picks Q4 2013: Sodexo retained, Bureau Veritas exited
1 M 3 M 6 M 31/12/12 LOOKING BACK ON Q3 2013 Inds Gds & Svs 3.7% 10.9% 6.6% 15.2% With a slight better macro-economic environment in Europe, staffing companies continued to DJ Stoxx 600 2.6% 8.4% 5.0% 10.7% improve their results highlighted by less negative like-for-like revenue growth quarter after quarter *Stoxx Sector Indices since the end of last year and showed again the best performance during this quarter, i.e. nearly +10% relative to the DJ Stoxx for Adecco and 20% for Randstad . Companies covered ADECCO SELL vs. NEUTRAL CHF58 In food services , without really positive catalysts, all companies underperformed the DJ Stoxx with Last Price CHF64 Market Cap . CHF12,113m for once Compass group registering the lowest performance in Q3 (-8.5% in EUR). Strong exposure RANDSTAD SELL vs. NEUTRAL EUR33 to LatAm currencies kept Edenred under pressure (-6.5% in Q3) despite strong fundamentals. Last Price EUR41.555 Market Cap. EUR7,366m Although a negative performance (-2%), a better trend in Q3 for Sodexo after -12% in Q2, the share was largely impacted by disappointing H1 results. BUREAU VERITAS BUY EUR27 Last Price EUR22.06 Market Cap. EUR9,753m Contrasting performances for the TIC sector with a decrease of nearly 3% in Euro vs. DJ stoxx for SGS SGS BUY CHF2400 mainly due to its strong exposure to minerals, the sector which registered a significant slowdown. There was a more positive share price trend for Bureau Veritas, up 4% during Q3. Remember that Last Price CHF2113 Market Cap. CHF16,528m the stock price was hit hard in Q2 (-15%) by lower guidance on lfl revenue growth for 2013 than COMPASS GROUP NEUTRAL 900p defined in the “2015 strategic plan”. Last Price 848p Market Cap. GBP15,295m WHAT WE SEE FOR Q4 2013 EDENRED NEUTRAL EUR25 For all groups exposed to fast-growing emerging countries, i.e. especially SGS , Bureau Veritas in the Last Price EUR23.425 Market Cap. EUR5,292m TIC sector and Edenred in food services, the Q3 results are at risk largely due to negative currency SODEXO BUY EUR75 impacts. In general, this is mainly forex risks, hedges arising naturally with the matching of income Last Price EUR68.79 Market Cap. EUR10,809m and expenses in most countries in which the groups operate, since services are provided locally. Nevertheless, with a higher margin in most fast-growing zones, such negative currency impacts could weigh on the EBIT margin.
All in all, on top-line growth, currency conversion would have a negative impact of nearly 6% in Q3 for Bureau Veritas (-2.4% in H1) and 7.5% for Edenred (-4.8% in H1). SGS doesn’t release quarterly results. Accordingly, we exit Bureau Veritas from our top pick list. Staffing Rating changes After strong Q3 performances, we have decided to downgrade our recommendation on staffing companies to sell from neutral on Adecco (Fair Value CHF58) and Randstad (Fair Value to EUR38 from EUR33) mainly due to valuations. We are convinced that the inflection point could be reached in Q4, i.e. positive lfl revenue growth after negative figures since Q1 2012 for Adecco and Q2 2012 for Randstad . 1. Revenue growth expected in 2014 (lfl revenue growth of 2.7% for Adecco and 5.2% for Randstad , set through the strong correlation with GDP anticipated by Consensus Economics for each country where the groups have a presence. 2. Such growth will have a positive impact on margin (EBITA margin up 60bps for Adecco to 4.7% and +20bps for Randstad to 3.7%) but today largely integrated with a P/E 2014e of 18.6x for Adecco and 16x for Randstad compared with median historicals of respectively 17.3x and 16.3x. TOP PICK For Q4 2013, we retain Sodexo . Since our upgrade at the end of May 2013, the stock performance has been a bit disappointing, i.e. st +0.4% relative to the DJ Stoxx, reflecting sluggish results expected for FY 2012/13 ending 31 August. Nevertheless, actions implemented in H1 and reinforced in H2 as well as the group’s fundamentals should help it to restore a more robust pace of growth, bearing in mind that the group’s target is to reach a 6.3% EBIT margin by the end of FY2014/15 compared to 5.1% anticipated for 2012/13, down 18bps. Regarding the valuation, over the next 3 years (2013/2015), we forecast average annual growth of 2.6% in sales and 8.4% in EPS (vs. 9.5% over 2008/2012). At the current share price, the stock is trading at 10.6x and 8.7x EV/EBIT 2014e and 2015e respectively vs. 10.6x median historical (2003/2013). NEXT CATALYSTS Edenred : Q3 revenues on 16 th October and Investors day on 12 th November; SGS : Investors days on th th st 24 & 25 October; Randstad : Q3 results on 31 October and Investors day on ; Bureau Veritas : Q3 revenue on 6 th November; Adecco : Q3 results on 6 th November; Sodexo : FY results on 14 th November; Compass Group : FY results on 27 th November. Click here to download Analyst : Bruno de La Rochebrochard 33(0) 1 56 68 75 88 [email protected]
4 October 2013 4
BG’s Wake Up Call Back to front page
Luxury & Consumer Goods Kering (ex PPR) Soft LFL sales growth for Gucci in Q3 (+2% expected vs. +4% in H1) Price EUR164.85 Fair Value EUR174 (+6%) NEUTRAL
Bloomberg PP FP ANALYSIS Reuters PRTP.PA • 12-month High / Low (EUR) 184.5 / 118.9 We expect Gucci brand sales growth in Q3 13 should be limited, close to 2% after +4% both in Market Cap (EURm) 20,801 Q2 and in H1, despite an easier comparison base (+7% in Q3 12 and +10.8% in H1 12). Avg. 6m daily volume (000) 258.7 • In our view, there are four main reasons to explain this disappointment: 1) a lower store-
1 M 3 M 6 M 31/12/12 opening impact as, this year, Gucci will open around 10-15 stores vs. 53 last year; 2) declining Absolute perf. -4.8% 2.7% -4.4% 17.0% sales in Asia due to poor sales achieved with the “logo” lines which account for 60% of sales in Pers& H/H Gds 0.9% 2.0% 0.0% 10.3% Asia (47% globally), this premiumisation strategy is also being implemented by Louis Vuitton; 3) DJ Stoxx 600 2.6% 8.2% 4.5% 11.1% Wholesale network rationalisation mainly in Europe (wholesale accounts for 20% of Gucci sales); and 2012 2013e 2014e 2015e P/E 16.4x 16.7x 13.8x 12.3x 4) Store refurbishments: almost 40-50 are concerned this year, in order to heighten the customer experience. Div yield (%) 2.3% 2.5% 2.9% 3.1% • Furthermore, while BottegaVeneta ’s momentum in Q3 will remain globally similar to H1 (+13%), the “other brands” divisional sales growth will be less significant in Q3 than in Q2, the latter having benefited from shipments of Girard Perregaux watches. Therefore, we expect 6.9% organic sales growth for the Luxury division in Q3 versus +7.9% in H1 , implying +7.6% in 9M. Puma sales should again decline by 3% in Q3, implying a 3.9% LFL sales growth for the Kering Group. For the full year, LFL sales growth should be 4.5% vs +5% previously expected. VALUATION • We keep our FV unchanged at EUR 174. Neutral recommendation maintained . NEXT CATALYSTS • Q3 sales to be released on October 24 th after the market close. Click here to download
Loïc Morvan, [email protected]
4 October 2013 5 BG’s Wake Up Call Bryan Garnier stock rating system For the purposes of this Report, the Bryan Garnier stock rating system is defined as follows: Stock rating Positive opinion for a stock where we expect a favourable performance in absolute terms over a period of 6 months from the publication of a BUY recommendation. This opinion is based not only on the FV (the potential upside based on valuation), but also takes into account a number of elements including a SWOT analysis, positive momentum, technical aspects and the sector backdrop. Every subsequent published update on the stock will feature an introduction outlining the key reasons behind the opinion. Opinion recommending not t o trade in a stock short -term, neither as a BUYER or a SELLER, due to a specific set of factors. This view is intended to NEUTRAL be temporary. It may reflect different situations, but in particular those where a fair value shows no significant potential or where an upcoming binary event constitutes a high-risk that is difficult to quantify. Every subsequent published update on the stock will feature an introduction outlining the key reasons behind the opinion. Negative opinion for a stock where we expect an unfavourable performance in absolute terms over a period of 6 months from the publication of a SELL recommendation. This opinion is based not only on the FV (the potential downside based on valuation), but also takes into account a number of elements including a SWOT analysis, positive momentum, technical aspects and the sector backdrop. Every subsequent published update on the stock will feature an introduction outlining the key reasons behind the opinion. Distribution of stock ratings BUY ratings 56.5% NEUTRAL ratings 29.6% SELL ratings 13.9%
Bryan Garnier Research Team Healthcare Team Eric Le Berrigaud 33 (0) 1 56 68 75 33 eleberrigaud@ bryangarnier.com
Mathieu Chabert 33 (0) 1 70 36 57 45 mchabert@ bryangarnier.com
Martial Descou tures 33 (0) 1 56 68 75 18 mdescoutures@ bryangarnier.com
Consumer Goods Loïc Morvan 33 (0) 1 70 36 57 24 lmorvan@ bryangarnier.com
Cedric Rossi 33 (0) 1 70 36 57 25 crossi@ bryangarnier.com
IT Services Gregory Ramirez 33 (0) 1 56 68 75 91 gramirez@ bryangarnier.com
Insurance Olivier Pauchaut 33 (0) 1 56 68 75 49 opauchaut@ bryangarnier.com
Hotels/Business Services Bruno de la Rochebrochard 33 (0) 1 56 68 75 88 bdelarochebrochard@ bryangarnier.com
Utilities Julien Desmaretz 33 (0) 1 56 68 75 92 jdesmaretz@ bryangarnier.com
Construction & Concessions Sven Edelfelt 33 (0) 1 70 36 57 17 sedelfelt @bryangarnier.com
A copy of the Bryan Garnier & Co Limited conflicts policy in relation to the production of research is available at www.bryangarnier.com
4 October 2013
London Paris New York Geneva New Delhi 53 Chandos Place 26 Avenue des Champs Elysées 750 Lexington Avenue rue de Grenus 7 The Imperial Hotel London WC2N 4HS 75008 Paris New York, NY 10022 CP 2113 Janpath Tel: +44 (0) 207 332 2500 Tel: +33 (0) 1 56 68 75 00 Tel: +1 (0) 212 337 7000 Genève 1, CH 1211 New Delhi 110 001 Fax: +44 (0) 207 332 2559 Fax: +33 (0) 1 56 68 75 01 Fax: +1 (0) 212 337 7002 Tel +4122 731 3263 Tel +91 11 4132 6062 Authorised and regulated by Regulated by the Financial Conduct FINRA and SIPC member Fax+4122731 3243 +91 98 1111 5119 the Financial Conduct Authority Authority (FCA) and l’Autorité des Regulated by the Fax +91 11 2621 9062 (FCA) Marchés Financiers (AMF) Swiss Federal Banking Commission
Disclaimer:
This Report may not be reproduced, distributed or published by you for any purpose except with the Firms' prior written permission. The Firm reserves all rights in relation to this Report. Past performance information contained in this Report is not an indication of future performance. The information in this rep ort has not been audited or verified by an independent party and should not be seen as an indication of returns which might be received by investors. Similarly, where projections, forecasts, targeted or illustrative returns or related statements or expressions of opinion are given ("Forward Looking Information") they should not be regarded as a guarantee, prediction or de finitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. A number of factors, in addition to the risk factors stated in this Report, could cause actual results to differ materially from those in any Forward Looking Information. Important information - this report may contain "Independent " and "Corporate/Non-independent" research reports. Independent investment research reports:
This report is prepared by Bryan Garnier & Co Limited and distributed only to clients of Bryan Garnier & Co Limited (the "Firm"). Bryan Garnier & Co Limited is au thorised and regulated by the Financial Conduct Authority (the "FCA") and is a member of the London Stock Exchange. This Report is provided for information purposes only and does not constitute an offer, or a solicitation of an offer, to buy or sell relevant securities, including securities mentioned in this Report and options, warrants or rights to or interests in any such securities. This Report is for general circulation to clients of the Firm and as such is not, and should not be construed as, investment advice or a personal recommendation. No account is taken of the investment objectives, financial situation or part icular needs of any person. The information and opinions contained in this Report have been compiled from and are based upon generally available information which the Fi rm believes to be reliable but the accuracy of which cannot be guaranteed. All components and estimates given are statements of the Firm, or an associated company's, opinion only and no express representation or warranty is given or should be implied from such statements. All opinions expressed in this Rep! ort are subject to change without notice. To the fullest extent permitted by law neither the Firm nor any associated company accept any liability whatsoever for any direct or consequential loss arising from the use of this Report. Information may be available to the Firm and/or associated companies which are not reflected in this Report. The Firm or an associated company may have a consulting relationship with a company which is the subject of this Report. Corporate or Non-Independent investment research reports:
This non-independent research report (the "Report") was prepared by Bryan Garnier & Co Limited and is being distributed only to clients of Bryan Garnier & Co Limited (the "Firm"). Bryan Garnier & Co Limited is authorised and regulated by the Financial Conduct Authority (the "FCA") and is a member of the London Stock Exchange. This Report has been sent to you for marketing purposes. It is non-independent research within the meaning of the FCA rules. It is not being held out as an objective or independent explanation of the matters contained in it and should not be treated as such. It has not been prepared in accordance with the legal requirements designed to promote the independence of investment research. Accordingly, the Firm is not subject to any prohibition on dealing ahead of the dissemination of investment research. This Report focuses on emerging European growth companies. The contents of this Report as well as the other research docum ents on emerging growth stocks do not contain the Firms' usual stock ratings. The intrinsic value analysis is presented to provide a framework for stock valuation and discussi on, and represents an estimated value on the date of publishing, which may be subject to change without notice. The Firms' rationale for not having ratings on the stock includes the fact that such stock may have limited market capitalisa tion and liquidity and while the Firms may express an opinion on the near-term movement of the stock, what action investors should take depends on many factors, including liquidity/risk tolerance, holdings timeframe and inve stment philosophy. Emerging companies evolve rapidly with a continuous flow of information that can significantly impact the compan y and in the Firm's opinion this cannot be reflected by a periodic rating. Additionally, the Firms may have an advisory relationship with the company which is the subject of the Report, includ ing for the production of sponsored research, and may expect to receive or intend to seek compensation for investment banking services from that company in the six months following the date of this Report. To the fullest extent permitted by law, the Firms do not accept any liability whatsoever for any direct or consequ ential loss arising from any use of the information contained in this Report. Information may be available to the Firm which is not reflected in this Report. This Report is provided for informati on purposes only and does not constitute an offer or solicitation to buy or sell any of the securities discussed in it. The Report is for general circulation to clients of the Firm and a s such is not, and should not be construed as, investment advice or a personal recommendation. No account is taken of the investment objectives, financial situation or particular needs of any person. Disclosures specific to clients in the United Kingdom
This Report has not been approved by Bryan Garnier & Co Limited for the purposes of section 21 of the Financial Services and Markets Act 2000 because it is being distributed in the United Kingdom only to persons who have been classified by Bryan Garnier & Co Limited as professional clients or eligible cou nterparties. Any recipient who is not such a person should return the Report to Bryan Garnier & Co Limited immediately and should not rely on it for any purposes whatsoever. Notice to US investors
This research report (the "Report") was prepared by Bryan Garnier & Co. Ltd. for information purposes only. The Report is intended for distr ibution in the United States to "Major US Institutional Investors" as defined in SEC Rule 15a-6 and may not be furnished to any other person in the United States. Each Major US Institutional Investor which receives a co py of this Report by its acceptance hereof represents and agrees that it shall not distribute or provide this Report to any other person. Any US person that desir es to effect transactions in any security discussed in this Report should call or write to our US affiliated broker, Bryan Garnier Securities, LLC. 750 Lexington Avenue, New York NY 10022. Telephone: 1-212-337-7000. This Report is based on information obtained from sources that Bryan Garnier & Co. Ltd. believes to be reliable and, to the best of its knowledge, contains no misleading, untrue or false statements but which it has not independently verified. Neither Bryan Garnier & Co. Ltd. and/or Bryan Garnier Securities LLC make no guarantee, representation or warranty as to its accuracy or completeness. Expressions of opinion herein are subject to change without notice. This Report is not an offer to buy or sell any security. Bryan Garnier Securities, LLC and/or its affiliate, Bryan Garnier & Co. Ltd. may own more than 1% of the securities of the company(ies) which is (are) the subject matter of this Report, may act as a market maker in the securities of the company(ies) discussed herein, may manage or co-manage a public offering of securities for the subject company(ies), may sell such securities to or buy them from customers on a principal basis and may also perform or seek to perform investment banking services for the company(ies). Bryan Garnier Securities, LLC and/or Bryan Garnier & Co. Ltd. are unaware of any actual, material conflict of interest of the research analyst who prepare d this Report and are also not aware that the research analyst knew or had reason to know of any actual, material conflict of interest at the time this Report is distributed or made available. .