Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Sustainable Finance and Fintech: progress and innovation
6 February 2020 Sala Assemblee via Fratelli Gabba
Servizio Studi – Equity Research 1
6 February 2020 Sala Assemblee via Fratelli Gabba
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Servizio Studi – Equity Research 2
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Summary
Centrale del Latte d’Italia 4 MailUp 24 CNH Industrial 6 NB Aurora 26 Elettra Investimenti 8 NEXI 28 Equita Group 10 Notorious Pictures 30 Ferrari 12 Piaggio 32 First Capital 14 Reply 34 Gefran 16 SIT 36 Grifal 18 Spactiv 38 Leone Film Group 20 TraWell 40 LU-VE 22
Disclaimer 42
Team 44
Please note: all the reccomandations, estimates and target prices refer to our latest published reports on every single stock available on www.ubibanca.com/equity-research.
Servizio Studi – Equity Research 3
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Centrale del Latte d’Italia 03 February 2020 – 5:30 PM SELL TARGET PRICE: 2.03 MARKET PRICE: 2.46
Food & Beverage Company profile Corporate Governance
Centrale del Latte d’Italia is the third largest milk company in Italy after Parmalat Data Does the company have a combined Chairman/CEO? Yes and Granarolo and the market leader in the regions where it is present Percentage of independent directors Shares outstanding (m): 14.00 (Piedmont, Liguria, Tuscany and Veneto). The group produces and distributes 46.15% (6 out of 13) Market Cap. (EURm): 34.44 milk (fresh, ESL and UHT), milk derivatives, vegetable drinks, salads, cured meats, Does the company have loyalty shares? No
Enterprise Value (EURm): 121.70 eggs and pasta. It has four plants, a fleet of >300 self-cooling vehicles, and 413 Does major shareholders have a “shareholders pact” in place? Yes employees. Its four brands are well known and can demand a premium price and Av. Daily Trad. Vol. (000): 7.6 Are “poison pill” or “change of control” clauses adopted? have increased their market shares in recent years (now at 7.7% in the fresh milk No CLI.MI CLI IM Reuters/Bloomberg: and 4% in UHT). As for distribution channels, >50% of revenues come from mass Potential dilution from stock options outstanding + not yet granted? No 52-Week Range (EUR): 2.4 2.9 retail, 36% from traditional trade and around 7% from private label. CLI was listed CEO remuneration detail (fixed salary) EUR0.57 million Source: FactSet on the Milan Stock Exchange in 2000 and moved to the STAR segment in 2001. Chairman remuneration detail (fixed salary) EUR0.37 million Performance Is the share price included in the MBO criteria? No 1m 3m 12m Recent development Percentage of treasury shares 0.0%
Absolute 1.7% -3.9% -9.9% Despite the poor volume trend (value of production was down 1.3% in 3Q19 and 1.8% in 9M19) and soaring fresh milk price (+14.8% in 3Q19), CLI was able Climate related risk Rel. to FTSE IT 3.0% -6.3% -22.7% to increase EBITDA by 16% in 3Q19 (after the sharp slowdown of 1H19) thanks to effective cost cutting actions implemented in the past few months. However, Has the company defined GHG-emissions targets? No Graph Area Absolute/Relative 12 M higher D&A costs led to breakeven at EBIT level while pre-tax result was negative How does the company assess climate-related risk? No
for EUR0.45 million (EUR4.2 million in the first nine months) and net debt
remained stable at EUR84.8 million (including EUR4.8 million for the adoption of Social Responsibilities 3,200 IFRS 16). The company guided for the last quarter of the year financial results similar to 3Q19, thus implying a revenues slowdown of around 2% in the full year Does the company publish a separated Sustainability report? No
2,700 with an EBITDA margin around 4% (compared with 4.3% in 2018). Considering Does the company have a Chief SRI/CSR officer (or a committee)? No that: 1) cash flow generation should remain negative in the full year, 2) the Does the Chief SRI/CSR officer votes in any of the committee? investment plan for the revamping of the Turin plant is proceeding, 3) the risk of NA 2,200 breaking the existing covenants on the banks financing and on the 2017-24 bond, Is the Investor Relation officer a different person from CFO (or Yes the company confirmed significant capital and financial strengthening within year- other officers)? end, which in our view could translate in a capital increase which could generate Is the ESG strategy integrated in the Business Plan (or in the group a significant dilution for existing shareholders. A capital increase of EUR5.0 strategy)? No million was already approved by the Board for Centrale del Latte di Vicenza. CDL FTSE Italia All-Share Does the company have an ethical code? Yes
Percentage of female directors 38.46% (5 out of 13) Source: FactSet How is the cybersecurity issue managed? Not disclosed Graph Shareholders’ Structure SWOT Analysis Free Fin, Centr. Strengths Weaknesses float; • • Latte Torino; Leading position where it is present and strong brand awareness Declining consumption of fresh and UHT milk in Italy 36,3% • Increasing product diversification • Continuous price pressure from large distributors 39,3% • Low NWC and negative operating working capital • Lower innovation and marketing capacity than larger companies Comune di Opportunities Threats Comune Pistoia; • The restructuring of the Turin production facility • Strong volatility of the raw milk price di 5,3% • Cost synergies with Centrale del Latte di Firenze • Private label competition and potential entry of large multinationals Firenze; • Agreement with Alibaba to distribute UHT milk in China • Strong price power of mass retail chains Fidi Toscana; 6,8% 12,3% Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Centrale del Latte d’Italia
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 183.14 180.36 185.33 193.24 ROE 0.6% -4.1% -3.7% -2.4% EBITDA 7.79 7.21 7.72 9.35 Net Fin. Debt / Equity (x) 1.2 1.3 1.4 1.3 EBITDA margin 4.3% 4.0% 4.2% 4.8% Net Fin. Debt / EBITDA (x) 9.5 11.3 10.4 8.2 EBIT 0.85 -2.32 -1.56 -0.02 Capex / Sales 8.9% 8.4% 4.0% 3.0% EBIT margin 0.5% -1.3% -0.8% -0.0% Pay Out Ratio 0.0% 0.0% 0.0% 0.0% Profit before taxes -0.40 -4.18 -3.60 -2.01 Taxes 0.80 1.67 1.44 0.60 Net Income 0.40 -2.51 -2.16 -1.41 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.03 -0.18 -0.15 -0.10 Growth Rates DPS 0.00 0.00 0.00 0.00 (%) 2018A 2019E 2020E 2021E BVPS 4.55 4.37 4.22 4.12 Growth Group Net Sales 0.5% -1.5% 2.8% 4.3% Growth EBITDA 7.6% -7.5% 7.1% 21.2% Growth EBIT 29.0% nm nm nm Growth Net Profit nm nm nm nm Stock Market Ratios* (x)*((Priced(Priced 2018A 2019E 2020E 2021E P/E nm nm nm nm P/OpCFPS 7.6 4.5 4.2 3.5 Balance Sheet P/BV 0.7 0.6 0.6 0.6 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 0.0% 0.0% 0.0% 0.0% Capital Employed 137.52 142.50 139.52 133.95 EV/Sales 0.7 0.7 0.7 0.6 Shareholders’ Equity 63.72 61.22 59.06 57.65 EV/EBITDA 15.7 16.9 15.7 12.5 Net Financial Debt / (Cash) 73.80 81.29 80.46 76.30 EV/EBIT nm nm nm nm
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 5
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
CNH Industrial 03 February 2020 – 5:30 PM TARGET PRICE: 10.00 MARKET PRICE: 8.58
Capital Goods Company profile Corporate Governance
CNH Industrial is a global leader in capital goods and design, manufacture, and Does the company have a combined Chair/CEO? No Data distribute in international markets. It employs more than 64,000 people in Percentage of independent directors Shares outstanding (m): 1,340.2 66 manufacturing plants with 54 R&D centers in 180 countries. Through 12 66.67% (6 out of 9) Market Cap. (EURm): 11,411 brands serves the agriculture and industry markets: from tractors and combines Does the company have loyalty shares? Yes to trucks and buses, as well as powertrain solutions for on-road and off-road and Enterprise Value (EURm): 13,227 Does major shareholders have a “shareholders pact” in place? No marine vehicles. CNH Industrial shares are listed in New York and Milan Are “poison pill” or “change of control” clauses adopted? Av. Daily Trad. Vol. (‘000): 1,278 following the mergers in 2013 of Fiat Industrial and CNH Global. Shares are No Reuters/Bloomberg: CNHI.MI CNHI IM traded in USD on the NYSE and in EUR on the MTA. From 2014, the company Potential dilution from stock options outstanding + not yet granted? Yes 52-Week Range (EUR): 8.53 11.99 began reporting under US GAAP, and now use the USD as reporting currency. CEO remuneration detail (fixed salary) USD1.10 million CNH also report for Dutch corporate law and European listing purposes under Source: FactSet Chairman remuneration detail (fixed salary) USD0.25 million IFRS. Is the share price included in the MBO criteria? Performance No 1m 3m 12m Recent development Percentage of treasury shares 1.81% Absolute -13.3% -13.1% -1.6% Trucks December registrations in WE posted a +5.7% with solid performances Climate related risk from LCV and massive declines in Medium/Heavy trucks. The weaker than Has the company defined GHG-emissions targets? Yes Rel. to FTSE IT -11.7% -14.3% -16.6% expected data on EU trucks comes after solid figures in Brazil (+33%) despite a
softer December (company market outlook of +10% for LCV and 15/20% for How does the company assess climate-related risk? Through a Government and Graph Area Absolute/Relative 12 M M&H). Considering that EU weights on sales more than Brazil but that Sustainability Committee 12,000 profitability weights are the other way around, we believe that 4Q19 market Social Responsibilities were broadly in line with company expectations. Does the company publish a separated Sustainability report? Yes 11,000 Combines registrations in US for December posted a -12.3% YoY with 536 units Does the company have a Chief SRI/CSR officer (or a committee)? Yes sold. Farm tractors instead posted a +1.1% with a solid figure from the more 10,000 Does the Chief SRI/CSR officer votes in any of the committee? pricey 4WD tractors (+27.8% YoY). CNH market outlook with the FY2019 Yes 9,000 registrations figures just disclosed and it turned out that the market did better Is the Investor Relation officer a different person from CFO (or Yes 8,000 than what the company expected: a) the Combines market was expected down other officers)? 5% YoY while the year closed at -0.7%; b) Tractors >140hp were expected to Is the ESG strategy integrated in the Business Plan (or in the group post a -5% while the year closed at 3.5%; c) Small Tractors were expected to strategy)? Yes post a 0-5% while the year closed at 1.5%. Does the company have an ethical code? CNH reported a weak set of 3Q19 results when compared to the same quarter Yes CNH FTSE Italia All-Share a year ago but took the market by surprise cutting the guidance which was Percentage of female directors 33.33% (3 out of 9)
reiterated recently (4 September during the CMD). It all originated from the top How is the cybersecurity issue managed? CNH Industrial periodically undertakes an Source: FactSet line guidance now seen at USD26.5/27.0 billion (from previous USD27/27.5 information security risk assessment, conducted by ICT Security and based on the billion). Graph Shareholders’ Structure NIST12 Cybersecurity Framework
SWOT Analysis Strengths Weaknesses • One of the two major worldwide player on AG; • Profitability levels below peers in AG, CE and CV; Exor; • Strong and diversified product portfolio on powertrains, with an history of • Delay in tackling the businesses portfolio lead to underinvestment in some 27,20% delivering important innovations; segments; Free float; • Strong market positioning in some key trucks’ segments: WE and LATAM • Below-the-line items, already reduced vs. the past, still contribute to earnings 72,80% LCVs and Bus; volatility and lower visibility;
Opportunities Threats • Leadership position in CNG/LNG heavy trucks needs to be exploited; • Tariffs war is severely impact farmers net income and AG machinery sales; • US companies are lagging behind on gas-powered engines; • Adverse weather may impact commodities prices and machinery sales; • The spinoff of the “On-highway” from the “Off-highway” businesses will • Change in emissions regulations may adversely impact sales/capex; Source: Company data un-lock value, currently trapped in the “conglomerate nature”;
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
CNH Industrial
Income Statement Financial Ratios (USDm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 29.706 28.520 29.422 30.480 ROE 21,1% 23,7% 16,8% 17,1% EBITDA 2.671 2.495 2.666 2.873 Net Fin. Debt / Equity (x) 0,12 0,08 0,03 (0,01) EBITDA margin 9,0% 8,7% 9,1% 9,4% Net Fin. Debt / EBITDA (x) 0,22 0,22 0,09 (0,02) EBIT 2.101 1.891 2.088 2.298 Capex / Sales 2,0% 2,2% 3,5% 3,7% EBIT margin 7,1% 6,6% 7,1% 7,5% Pay Out Ratio 25,2% 20,9% 30,5% 30,8% Profit before taxes 1.566 1.373 1.702 1.995 Taxes (417) 165 (454) (532) Net Income 1.068 1.503 1.220 1.429 Per Share Data (USD) 2018A 2019E 2020E 2021E EPS 0,79 1,11 0,90 1,06 Growth Rates DPS 0,198 0,232 0,275 0,325 (%) 2018A 2019E 2020E 2021E BVPS 3,7 4,7 5,4 6,2 Growth Group Net Sales 7,2% -4,0% 3,2% 3,6% Growth EBITDA 15,1% -6,6% 6,9% 7,7% Growth EBIT 28,2% -10,0% 10,4% 10,0% Growth Net Profit n.m. 40,6% -18,8% 17,2% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 15,1 8,5 10,5 8,9 P/OpCFPS 13,9 15,6 7,6 7,0 Balance Sheet P/BV 3,18 2,01 1,75 1,53 (USDm) 2018A 2019E 2020E 2021E Dividend Yield (%) 1,7% 2,5% 2,9% 3,5% Capital Employed 23.710 24.594 24.582 24.703 EV/Sales 0,65 0,55 0,52 0,49 Shareholders’ Equity 5.043 6.312 7.246 8.338 EV/EBITDA 6,79 5,87 5,37 4,88 Net Financial Debt / (Cash) 600 537 227 (59) EV/EBIT 11,45 10,41 8,97 7,79
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 7
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Elettra Investimenti 03 February 2020 – 5:30 PM TARGET PRICE: 11.81 MARKET PRICE: 8.60
Energy Services Company profile Corporate Governance
Elettra Investimenti is an industrial holding company operating in Italy in the Data Does the company have a combined Chair/CEO? Yes sector of electricity and thermal energy production from natural gas and Percentage of independent directors Shares outstanding (m): 3.8 renewable sources according to the Distributed Generation approach (mainly 28.57% (2 out of 7) Market Cap. (EURm): 33.0 cogeneration and trigeneration plants with 14 plants for a total 26MW capacity), Does the company have loyalty shares? No
in energy efficiency and car sharing. The strategy of Elettra Investimenti involves Enterprise Value (EURm): Does major shareholders have a “shareholders pact” in place? No 53.6 strengthening the competitive position through the acquisition of third-party Are “poison pill” or “change of control” clauses adopted? Av. Daily Trad. Vol. (000): 4.8 plants, the development of O&M business lines and energy efficiency, No Reuters/Bloomberg: ELIN.MI ELIN IM technological innovation in energy service. Elettra Investmenti has been listed on Potential dilution from stock options outstanding + not yet granted? Yes 52-Week Range (EUR): 8.4 10.1 the AIM market since April 2015 at EUR6.0 per share raising EUR4.3 million. In CEO remuneration detail (fixed salary) Not disclosed the past four years the company grew substantially, doubling its size, thanks to Source: FactSet Chairman remuneration detail (fixed salary) acquisitions (Tholos in 2016, PHPower in 2017) and internal initiatives (UVAM, Not disclosed
car sharing etc.), diversifying its product portfolio. Is the share price included in the MBO criteria? Not disclosed Performance Percentage of treasury shares 0.90% 1m 3m 12m Recent development Absolute 1.8% -3.4% -11.2% Elettra Investimenti reported 1H19 results slightly above our estimates as for Climate related risk Rel. to FTSE IT sales but below our expectations as for EBITDA margin which came to 13.6% vs. 3.1% -5.8% -23.8% Has the company defined GHG-emissions targets? No 18.1% in 1H18 and our 15.2% estimate. This is explained by the drop of the gross Graph Area Absolute/Relative 12 M margin coming from the TEE trading (EUR1.64 million vs. EUR5.85 million in How does the company assess climate-related risk? No 1H18) and by higher labour cost (now at 10.4% of sales vs. 7.7% in 1H18) due to 12,000 further hiring to sustain the company’s expansion. The good news is the strong Social Responsibilities increase of the gross margin coming from industrial activities which more than 11,000 Does the company publish a separated Sustainability report? doubled reaching EUR6.8 million compared with EUR3.4 million in the first half No 10,000 of 2018 with an average margin of 29.9% vs. 23.5% in 1H18.In our view, this Does the company have a Chief SRI/CSR officer (or a committee)? No
clearly shows that Elettra Investimenti is ready to replace the earnings coming 9,000 Does the Chief SRI/CSR officer votes in any of the committee? NA from TEE, which will soften in future, with industrial activities which increased Is the Investor Relation officer a different person from CFO (or 8,000 sales by 59% in 1H19. Following 1H19 results and the sharp decrease of TEE other officers)? Yes contribution, we revised our estimates. For 2019, we slightly decreased our top line forecast, implying 15% sales growth in the second half of the year. However, Is the ESG strategy integrated in the Business Plan (or in the group Yes we lowered our EBITDA expectations incorporating the EBITDA slowdown strategy)?
reported in 1H19, implying a 16.2% EBITDA margin in the second half of the Does the company have an ethical code? Elettra FTSE Italia All-Share No year. Altogether, our net profit is expected at EUR2.2 million, 50% below our Percentage of female directors previous estimates. 42.9% (3 out of 7) Source: FactSet How is the cybersecurity issue managed? Not disclosed
Graph Shareholders’ Structure SWOT Analysis Free Strengths Weaknesses float; • Profitable operating assets not related to incentives • Limited size compared to main Italian peers 17,2% • Current order backlog covers nearly 7 years of revenues • Softening TEE market • Excellent M&A track record • Complex Group’s structure
Bombacci Opportunities Threats Treasury; family; • New “Exacto” platform for energy monitoring • Possible changes in the regulatory framework 0,9% 81,9% • Development of new products • Execution risk • Potential new acquisitions • The current wide product portfolio could stress the management
Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Elettra Investimenti
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 55.0 61.5 60.3 61.9 ROE 9.0% 14.1% 15.7% 16.0% EBITDA 8.5 9.2 9.9 10.4 Net Fin. Debt / Equity (x) 1.0 1.1 1.2 1.2 EBITDA margin 15.4% 15.0% 16.4% 16.8% Net Fin. Debt / EBITDA (x) 1.7 2.0 2.1 2.2 EBIT 3.7 4.2 4.7 5.1 Capex / Sales 13.7% 11.6% 13.9% 15.5% EBIT margin 6.8% 6.8% 7.8% 8.2% Pay Out Ratio 73.4% 68.9% 64.7% 65.8% Profit before taxes 3.1 3.7 4.3 4.7 Taxes -1.8 -1.5 -1.6 -1.8 Net Income 1.3 2.2 2.7 2.9 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.34 0.58 0.69 0.76 Growth Rates DPS 0.25 0.40 0.45 0.50 (%) 2018A 2019E 2020E 2021E BVPS 3.80 4.13 4.43 4.74 Growth Group Net Sales 17.0% 11.7% -1.9% 2.7% Growth EBITDA -28.0% 8.6% 7.5% 5.0% Growth EBIT -47.5% 11.8% 12.9% 7.3% Growth Net Profit -70.6% 70.6% 19.6% 9.3% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 29.5 14.8 12.4 11.3 P/OpCFPS 10.4 3.9 4.5 3.8 Balance Sheet P/BV 2.7 2.1 1.9 1.8 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 2.5% 4.7% 5.2% 5.8% Capital Employed 30.2 34.9 38.5 42.3 EV/Sales 1.0 0.9 0.9 0.9 Shareholders’ Equity 14.6 15.9 17.0 18.2 EV/EBITDA 6.6 5.8 5.7 5.6 Net Financial Debt / (Cash) 14.8 18.2 20.8 23.4 EV/EBIT 15.1 12.9 11.9 11.6
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 9
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Equita Group 03 February 2020 – 5:30 PM TARGET PRICE: 3.37 MARKET PRICE: 2.84
Investment Banking Company profile Corporate Governance
Equita is the leading boutique in Italy with distinctive features like the largest Data Does the company have a combined Chair/CEO? No trading floor in Italy, a top-ranked research team and clear positioning in the mid- Shares outstanding (m): 45.5 Percentage of independent directors 12.86% (3 out of 7) market segment. In the last ten years, Equita has grown its investment banking Does the company have loyalty shares? Market Cap. (EURm): 129.1 division from scratch and also developed an Alternative Asset Management Yes Enterprise Value (EURm): NA (AAM) division business, which, starting from portfolio management, has grown Does major shareholders have a “shareholders pact” in place? Yes Av. Daily Trad. Vol. (‘000): 26.1 into private debt and private equity. The diversification effort included also the Are “poison pill” or “change of control” clauses adopted? No EQUI.I EQUI IM entrance into retail trading on equities and bonds and the extension of the Global Reuters/Bloomberg: Potential dilution from stock options outstanding + not yet granted? Yes 52-Week Range (EUR): 2.43 3.27 markets activities to derivatives, ETFs and, more important, fixed incomes and CEO remuneration detail (fixed salary) EUR0.65 million Source: FactSet market making. Equita today operates three different business lines: a) Global Chairman remuneration detail (fixed salary) Markets (65% of 9M2019 Net Revenues); b) Investment Banking (27%); c) AAM EUR0.24 million Performance (8%). In 2017 it listed on the AIM segment and, in 2018, it moved to the STAR. Is the share price included in the MBO criteria? No 1m 3m 12m Percentage of treasury shares 9.1%
Absolute -0.4% 13.6% 7.2% Recent development Rel. to FTSE IT 1.2% 12.4% -26.1% Climate related risk Last November management presented a mid-long term business plan, in our Has the company defined GHG-emissions targets? Graph Area Absolute/Relative 12 M view, to give more visibility on what the shape of the group will be once all the No recent initiatives will reach a cruise speed: a) Global market: end-markets are How does the company assess climate-related risk? No still seen tough and the revenues growth toward the high end of the EUR30/34
3,700 million range (between 40% and 45% of total revenues) should be driven by cross-selling and diversification; b) IB: the plan assumes a EUR30/34 million Social Responsibilities 3,200 revenues target (again 40-45% of total) which means at least doubling from the Does the company publish a separated Sustainability report? No EUR15 million expected for this year, but the 2022 target is more realistic if seen Does the company have a Chief SRI/CSR officer (or a committee)? Yes 2,700 in the context of the EUR26 million achieved only one year ago; c) AAM: the Does the Chief SRI/CSR officer votes in any of the committee? Yes 2,200 launch of the SGR should ease the AuM growth towards the EUR2 billion targeted with revenues being 10% of total (EUR8-11 million). Is the Investor Relation officer a different person from CFO (or Yes In the third quarter of 2019 Equita financials showed, finally, some signs of other officers)? stabilization with a EUR1,6 million net profit, +4% vs. the 3Q18 figure. Revenues Is the ESG strategy integrated in the Business Plan (or in the group were up YoY thanks to market shares gains in Global Markets and despite strategy)? Yes Equita FTSE Italia All-Share negative m-t-m of Equita's SPAC. In the wording of the 3Q19 release, it seems Does the company have an ethical code? Yes clear how management perceives a stabilization in market conditions, specifically Source: FactSet in Investment Banking. Percentage of female directors 28.57% (2 out of 7) How is the cybersecurity issue managed? Not disclosed Graph Shareholders’ Structure SWOT Analysis Free float; Strengths Weaknesses 37,00% • Leading position in the cash-equity Italian market; • Sales & Trading and Proprietary Trading businesses are volatile; Management • Experienced management with an entrepreneurial attitude; • Revenues are Italy-centric (i.e. from Italian customers/Italian assets/stocks); and • High employees’ retention rates; • Its small size compared to International players/some Italian players; employees; 53,90%
Treasury shares; Opportunities Threats 9,10% • Higher cross-selling; • Reputational risk; • Development of AAM, which could add visibility to revenues; • Key people risk (mitigated by shareholders pacts) Source: Company data • The company has enough resources to grow in-organically; • Country risk.
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Equita Group
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 59,8 52,5 57,6 61,7 RoE 13,8% 10,4% 13,0% 14,5% Personnel Costs 27,4 24,2 26,0 28,0 RoTE 20,4% 14,8% 19,1% 21,6% Administrative Expenses 16,8 16,6 16,8 16,9 Cost/Income 73,9% 77,6% 74,3% 72,7% Profit Before Taxes 15,6 11,8 14,8 16,9 Comp/Revenues 45,8% 46,0% 45,2% 45,3% % on Net Revenues 26,1% 22,4% 25,7% 27,3% RoE/CoE (x) 1,97 1,48 1,85 2,06 Income Taxes 4,5 3,7 4,5 5,1 Group Net Profit 11,0 8,1 10,3 11,7 Net Income Adjusted 12,0 8,1 10,3 11,7 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS Adjusted 0,26 0,18 0,23 0,26 Growth Rates DPS 0,22 0,20 0,22 0,25 (%) 2018A 2019E 2020E 2021E BVPS ex treasury 1,76 1,72 1,75 1,78 Growth Group Net Sales 10,9% -12,2% 9,7% 7,2% Growth EBITDA 1,6% -24,5% 25,8% 13,8% Growth EBIT 0,2% -26,3% 26,7% 13,8% Growth Net Profit 6,6% -32,0% 26,7% 13,8% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E (x) 13,2 15,8 12,5 11,0 P/E Adjusted (x) 12,2 15,8 12,5 11,0 Balance Sheet P/BV (x) 1,8 1,6 1,6 1,6 (EURm) 2018A 2019E 2020E 2021E P/TBV (x) 2,2 2,0 2,0 2,0 Shareholders’ Equity 80,1 78,2 79,4 81,1 Dividend Yield (%) 6,9% 7,1% 7,7% 8,6% RWA 218,2 212,9 224,9 236,2 RoE/CoE (x) 2,0 1,5 1,9 2,1 RoTE 20,4% 14,8% 19,1% 21,6% Payout 90,7% 111,9% 97,1% 95,0%
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Ferrari 03 February 2020 – 5:30 PM TARGET PRICE: 180 MARKET PRICE: 152.5
Branded Goods Company profile Corporate Governance
Data Ferrari builds cars unique in terms of their performance, innovations, technology, Does the company have a combined Chair/CEO? No driving pleasure and design. Those cars are acknowledged the world over as the Shares outstanding (m): 179.7 Percentage of independent directors 66.7% (8 out of 12) pinnacle of Made in Italy achievement. Almost half of them are sold in Europe Market Cap. (EURm): 28,643 with another third sold in US. The company has a record-braking presence in Does the company have loyalty shares? Yes Enterprise Value (EURm): 27,427 racing being the only constructor to have taken part in every single edition of the Does major shareholders have a “shareholders pact” in place? Yes F1 championship since its launch (with 15 drivers’ world titles and 16 Av. Daily Trad. Vol. (‘000): 429.0 Are “poison pill” or “change of control” clauses adopted? No constructors’ world title). It employees almost 4,000 people and sells almost Reuters/Bloomberg: RACE.MI RACE IM 10,000 cars in more than 60 countries through a dealer network that surpassed Potential dilution from stock options outstanding + not yet granted? Yes 52-Week Range (EUR): 96.7 158.7 the 200 stores mark. CEO remuneration detail (fixed salary) EUR0.27 million Source: FactSet Chairman remuneration detail (fixed salary) EUR0.08 million
Performance Is the share price included in the MBO criteria? Yes Recent development 1m 3m 12m Percentage of treasury shares 3.38% At the end of January Ferrari has been named the most influential brand of the Absolute 3.1% 6.3% 40.4% world (for the second consecutive year) by Brand Finance. Climate related risk Rel. to FTSE IT 4.6% 5.1% 25.4% In a December 2019 interview, CEO Mr. Camilleri stated that Ferrari won't have its first fully electric model ready until after 2025 as the battery technology Has the company defined GHG-emissions targets? No Graph Area Absolute/Relative 12 M requires more development, pushing back expectations. He also hinted at strong How does the company assess climate-related risk? Through Governance and FY2019 results but statement was too generic to have a read-across from it. Sustainability Committee
164,000 Ferrari reported a solid set of results in 3Q19 showing sound YoY growth (+13% in units and +14% revenues for cars & spare parts), nice price/mix improvement Social Responsibilities 144,000 (+5.1% to EUR286K), margins expansion (70bps at EBITDA level) and above all Does the company publish a separated Sustainability report? Yes
impressive cash flow generation, despite heavy investments (EUR40 million Does the company have a Chief SRI/CSR officer (or a committee)? Yes 124,000 increase in R&D alone). The cash generation was probably the biggest surprise Does the Chief SRI/CSR officer votes in any of the committee? in this set of results: Net Industrial Debt reached the EUR369 million mark, in Yes 104,000 line with our estimates, but with more share buyback than expected (EUR93 Is the Investor Relation officer a different person from CFO (or Yes million delta). other officers)? Is the ESG strategy integrated in the Business Plan (or in the group strategy)? Yes
Ferrari FTSE Italia All-Share Does the company have an ethical code? Yes Percentage of female directors 33.33% (4 out of 12) Source: FactSet How is the cybersecurity issue managed? Compliance with GDPR, it adopted a Graph Shareholders’ Structure progressive approach to ensure compliance with data protection law requirements, such as the implementation of ICT and security systems
Exor; SWOT Analysis 24,0% Strengths Weaknesses • Unmatchable brand image, the world's most recognizable brand; • Exposure to exchange rate fluctuations; Free • Unique racing heritage; • Product category not ideal to benefit from growth in Chinese's HNWI; Piero Ferrari; float; • Loyal and growing customer base composed of UHNWI. • 100% reliance on a single plant (Maranello, Modena only for chassis); 10,2% 61,6% Treasury Opportunities Threats shares; 4,2% • Personalization increasing more than we estimate; • Trade war may impact volumes or margins and, with a single plant, is • Volumes increases; impossible to balance-out also in the long run; Source: Company data • Efficiencies higher than expected also on F1; • Need to maintain a proper balance between exclusivity and growth; • Lack of wins in F1;
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Ferrari
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 3.419,9 3.721,3 4.182,4 4.735,9 ROE 58,1% 37,9% 33,0% 30,2% EBITDA 1.134,5 1.280,6 1.460,0 1.715,7 Net Fin. Debt / Equity (x) (0,3) (0,2) 0,0 0,2 EBITDA margin 33,2% 34,4% 34,9% 36,2% Net Fin. Debt / EBITDA (x) (0,4) (0,3) 0,0 0,4 EBIT 826,0 925,6 1.033,7 1.213,5 Capex / Sales 18,6% 18,9% 17,8% 13,7% EBIT margin 24,2% 24,9% 24,7% 25,6% Pay Out Ratio 24,6% 28,3% 30,0% 30,0% Profit before taxes 803,0 883,3 1.012,8 1.202,8 Taxes (16,0) (176,8) (193,1) (233,7) Net Income 787,0 706,5 819,7 969,1 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 4,2 3,8 4,4 5,2 Growth Rates DPS 1,0 1,1 1,3 1,5 (%) 2018A 2019E 2020E 2021E BVPS 7,18 9,93 13,23 17,08 Growth Group Net Sales 0,1% 8,8% 12,4% 13,2% Growth EBITDA 9,5% 12,9% 14,0% 17,5% Growth EBIT 6,6% 12,1% 11,7% 17,4% Growth Net Profit 46,5% (10,2%) 16,0% 18,2% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 25,3 40,5 34,9 29,6 P/OpCFPS 38,8 27,8 26,9 18,3 Balance Sheet P/BV 14,7 10,6 8,0 6,2 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 1,0% 0,7% 0,9% 1,0% Capital Employed 2.487 2.993 3.190 3.258 EV/Sales 5,8 7,5 6,6 5,7 Shareholders’ Equity 1.349 1.861 2.480 3.204 EV/EBITDA 17,4 21,7 18,8 15,6 Net Financial Debt / (Cash) (1.133) (1.127) (704) (49) EV/EBIT 23,9 30,1 26,5 22,1
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
First Capital 03 February 2020 – 5:30 PM TARGET PRICE: 16.80 MARKET PRICE: 12.00
Financial Holding Company profile Corporate Governance
First Capital S.p.A. is an investment holding company specialised in Public Equity Data Does the company have a combined Chair/CEO? No and Private Equity Investments, focused on small-mid cap, with active approach Percentage of independent directors 44% (4 out of 9) Shares outstanding (m): 2.55 in managing investee companies. It was founded in February 2008 and has been listed on the AIM Italia since December 2010. Since the IPO, NAV/share total Does the company have loyalty shares? No Market Cap. (EURm): 30.6 return has been 93% (as at the end of September 2019) while share total return Does major shareholders have a “shareholders pact” in place? No NAV (EURm): 46.5 has been 50%. The main strategic investments are currently Tinexta and Intred; Are “poison pill” or “change of control” clauses adopted? No the other strategic investments are Orsero, ICF, Eukedos, Triboo and TPS. Av. Daily Trad. Vol. (‘000): 1,2 SPACs exposure amounts to around 10% of portfolio. Potential dilution from stock options outstanding + not yet granted? No Reuters/Bloomberg: FICM.MI FICM.IM CEO remuneration detail (fixed salary) EUR0.155 million
52-Week Range (EUR): 9.9 12.5 Chairman remuneration detail (fixed salary) EUR0.04 million
Source: FactSet Is the share price included in the MBO criteria? No
Percentage of treasury shares 2.84% Performance
Recent development 1m 3m 12m 1H19 results were outstanding: EUR13.7 million net profit and EUR47.1 million Climate related risk Absolute -0.8% 0.8% 21.0% NAV (+38% YTD, EUR13 million in absolute term after EUR1.6 million dividend Has the company defined GHG-emissions targets? No Rel. to FTSE IT 0.5% -1.7% 4.4% distribution). Net cash was EUR2.1 million at the end of June-19. In 1H19 the How does the company assess climate-related risk? Group realized EUR7.2 million capital gains by adhering to the tender offer on No Graph Area Absolute/Relative 12 M Bomi Italia (EUR1.5 million gain, >18% IRR) and by selling ca 1.6% stake in Tinexta (EUR5.4 million gain, >50% IRR) and LU-VE (EUR0.4 million gain, >45% IRR). In Social Responsibilities 13,500 the meantime, Value First SICAF invested EUR3.9 million in ICF to acquire an Does the company publish a separated Sustainability report? 12,500 No 8.7% stake and increased the stake in Intred by 0.4% to 9.8%. In July, First Capital 11,500 Does the company have a Chief SRI/CSR officer (or a committee)? No announced its strategic decision to enter into private equity investments by Does the Chief SRI/CSR officer votes in any of the committee? 10,500 promoting a club deal through First Private Investment; on 30 September it No 9,500 joined Space Capital Club with an initial soft commitment of EUR15 million. Is the Investor Relation officer a different person from CFO (or Yes other officers)? Is the ESG strategy integrated in the Business Plan (or in the group strategy)? No
First Capital FTSE Italia All-Share Does the company have an ethical code? Yes Percentage of female directors 11% (1 out of 9) Source: FactSet How is the cybersecurity issue managed? Not disclosed Graph Shareholders’ Structure SWOT Analysis Strategy Free Strengths Weaknesses Invest; Float; • Leading position in AIM/small caps fund management segment • Full exposure to the Italian stock market 31,2% 28,1% • Strong track record of investment management team • Stock performance is highly correlated to stock market performance • Quality of the strategic portfolio • Systematic liquidity risk in small cap investments
Treasury; Opportunities Threats 2,6% Next • Business diversification into private equity investments • Increasing compliance requirements CHUI; Holding; • Business diversification into SICAV management • Increasing competition • P.I.R. 2.0 potential effect on stock market • Potential lack of investment opportunities 9,1% 29,0%
Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
First Capital
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Dividends 0,38 0,65 0,67 0,69 Debt/Equity 0,16 -0,16 -0,18 -0,20 Other financial income 0,07 0,07 0,07 0,07 Cost/Income nm 19,2% 51,3% 52,0% Trading profit/(loss) -1,02 15,35 2,37 2,37 ROI -5,8% 32,5% 3,4% 3,4% Total income -0,57 16,07 3,11 3,13 ROE -6,0% 27,1% 2,4% 2,4% D&A -0,02 -0,10 -0,10 -0,10 Pay Out Ratio 90,0% 5,4% 60,9% 63,4% Operating (cost)/income -1,46 -3,08 -1,60 -1,63 Financial charges -0,25 -0,28 -0,12 -0,12 Pre-tax profit -2,29 12,61 1,29 1,28 Taxes 0,24 -0,16 -0,16 -0,16 Per Share Data Net profit -2,05 12,45 1,13 1,12 (EUR) 2018A 2019E 2020E 2021E EPS -0,80 4,87 0,44 0,44 DPS 0,25 0,26 0,27 0,28 BVPS 13,35 17,98 18,16 18,34
Balance Sheet Stock Market Ratios (EURm) 2018A 2019E 2020E 2021E (x) 2018A 2019E 2020E 2021E Capital Employed 39,44 38,75 38,05 37,36 P/E -12,0 2,3 27,1 27,4 Shareholders’ Equity 34,09 45,92 46,40 46,85 P/BV 0,7 0,6 0,7 0,7 Net Financial Debt / (Cash) 5,35 -7,18 -8,35 -9,50 Div Yield 2,6% 2,3% 2,2% 2,3%
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Gefran 03 February 2020 – 5:30 PM TARGET PRICE: 8.98 MARKET PRICE: 6.40
Electrical equipment Company profile Corporate Governance
Gefran is a leading industrial company specialized in three divisions: 1) Sensors Does the company have a combined Chair/CEO? Yes Data for industrial applications (44% of sales in 2018), typically for large industrial Percentage of independent directors Shares outstanding (m): 14.4 machine makers supplying the plastic industry, packaging industry, automotive, 33.3% (3 out of 9) and white goods companies; 2) Systems and components for automation (27% of Does the company have loyalty shares? No Market Cap. (EURm): 91.4 sales) including the production of complete electric panels for the plastic Does major shareholders have a “shareholders pact” in place? No Enterprise Value (EURm): 108.4 industry, and 3) Motion Controls division (29% of sales) which produces a Are “poison pill” or “change of control” clauses adopted? No Av. Daily Trad. Vol. (000): 34.8 complete range of electric drives to regulate the speed of AC and DC motors and is specialised in inverters for industrial applications and for domestic lifts Potential dilution from stock options outstanding + not yet granted? No Reuters/Bloomberg: GFRN.MI GE IM which are progressively replacing hydraulic and mechanical devices. The company CEO remuneration detail (fixed salary) EUR0.36 million 52-Week Range (EUR): 5.8 8.3 has 10 production sites, nearly 800 employees and 70% of sales outside Italy Chairman remuneration detail (fixed salary) Source: FactSet (mainly EU, China and the US). Gefran is vertically integrated, from R&D (2 R&D EUR0.31 million centers, with investments approaching 5% of revenues p.a.) to the Is the share price included in the MBO criteria? No Performance commercialization of its products (100,000 references) and has a leading position Percentage of treasury shares 0.19% 1m 3m 12m for plastic processing applications. Gefran, 60% controlled by the founder’s
Absolute family, which still manages the company, was listed in 1998 and entered the STAR -6.9% -7.8% -18.1% segment in 2001. Recently the CEO resigned and should be replaced by the end Climate related risk Rel. to FTSE IT -5.7% -10.1% -29.7% of April 2020. Has the company defined GHG-emissions targets? No
How does the company assess climate-related risk? The company underwent an Graph Area Absolute/Relative 12 M Recent development "Energetic Audit" in order to assess the efficiency of the use of energetic resources 10,000 The first nine months of 2019 were challenging for Gefran, which was impacted and it committed to solve the critical issues emerged by the slowdown of the high-margin Sensors division while the order intake 9,000 declined. From a geographical standpoint, all regions went down in 9M19 (Asia Social Responsibilities 8,000 by 2.7%, EU by 3.4% and other European countries by 33%) with the sole Does the company publish a separated Sustainability report? 7,000 exception of Americas (North America was up by 34% and Latam by 10.5%). Yes 6,000 Lastly, Italy positive performance (+10.1%) can be entirely ascribed to the change Does the company have a Chief SRI/CSR officer (or a committee)? Yes in scope of consolidation (consolidation of Elettropiemme). The EBITDA margin 5,000 Does the Chief SRI/CSR officer votes in any of the committee? Yes declined to 14.3% from 15.3% in 9M18 also due to higher personnel costs while Is the Investor Relation officer a different person from CFO (or the net debt rose to EUR14.9 million (>EUR10 million more than Dec-18) mainly other officers)? No because of the lower cash flow, substantial investments, the dividend distribution and the application of IFRS16. Against this backdrop, the management confirmed Is the ESG strategy integrated in the Business Plan (or in the group Yes Gefran FTSE Italia All-Share its guidance for higher revenues and EBITDA margin in line with 2018, implying strategy)? a recovery in the last quarter of the year. Does the company have an ethical code? Yes Source: FactSet Percentage of female directors 33.3% (3 out of 9) Graph Shareholders’ Structure How is the cybersecurity issue managed? Not disclosed
SWOT Analysis Free Strengths Weaknesses float; • Low exposure to the Italian market (70% revenues outside Italy) • Limited size compared to international peers • Strong and consistent product innovation, with R&D at >5% of revenues • Part of the products are now commodities, competing just on selling prices 37,2% Fingefran; • Solid financial structure and attractive dividend yield • Persistent losses for the Motion Control division 56,7% Franceschetti Opportunities Threats Ennio; 3,5%Lazard; • Growing reference market, in particular sensors • Weaker Chinese market 2,6% • Potential acquisitions in new segments and/or markets • Currency fluctuations • Arrival of the new CEO • High competition and low entry barriers in some segments Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Gefran
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 135.6 139.8 146.5 154.2 ROE 11.2% 9.6% 9.9% 10.9% EBITDA 20.1 19.9 21.4 23.0 Net Fin. Debt / Equity (x) 0.1 0.2 0.1 0.1 EBITDA margin 14.8% 14.3% 14.6% 14.9% Net Fin. Debt / EBITDA (x) 0.2 0.6 0.5 0.3 EBIT 13.7 10.7 12.3 14.2 Capex / Sales 6.9% 9.7% 6.5% 5.9% EBIT margin 10.1% 7.7% 8.4% 9.2% Pay Out Ratio 56.5% 63.7% 62.7% 57.3% Profit before taxes 13.2 10.3 12.0 13.9 Taxes -4.2 -3.1 -4.2 -4.9 Net Income 8.2 7.2 7.8 9.0 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.18 0.29 0.31 0.39 Growth Rates DPS 0.082 0.090 0.100 0.120 (%) 2018A 2019E 2020E 2021E BVPS 0.36 0.41 0.51 0.63 Growth Group Net Sales 5.4% 3.1% 4.7% 5.3% Growth EBITDA 5.4% -0.6% 7.4% 7.2% Growth EBIT 23.3% -21.9% 14.7% 15.0% Growth Net Profit 18.8% -11.2% 7.9% 15.8% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 14.0 12.6 11.7 10.1 P/OpCFPS 9.1 7.6 5.7 5.5 Balance Sheet P/BV 1.6 1.2 1.2 1.1 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 4.0% 5.0% 5.4% 5.7% Capital Employed 77.3 88.1 89.3 90.6 EV/Sales 0.9 0.8 0.7 0.7 Shareholders’ Equity 72.8 75.4 78.6 82.8 EV/EBITDA 6.1 5.4 5.0 4.5 Net Financial Debt / (Cash) 4.5 12.6 10.6 7.8 EV/EBIT 8.9 10.1 8.6 7.3
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Grifal 03 February 2020 – 5:30 PM TARGET PRICE: 4.67 MARKET PRICE: 3.61
Packaging Company profile Corporate Governance
Grifal is a leading industrial company specialized in the production of innovative Does the company have a combined Chair/CEO? Yes Data and patented packaging solutions and commodities based on EPE (polyethylene) Percentage of independent directors Shares outstanding (m): 10.55 and corrugated cardboards supplied to >700 automotive, white goods, 11.1% (1 out of 9) electronics, furniture and medical companies. With around 100 employees, Grifal Does the company have loyalty shares? No Market Cap. (EURm): 38.09 has one production site (Cologno al Serio, close to Bergamo) and is currently Does major shareholders have a “shareholders pact” in place? Yes Enterprise Value (EURm): 43.42 distributing in several countries (with Romania and Germany, where it has Are “poison pill” or “change of control” clauses adopted? No Av. Daily Trad. Vol. (000): 18.2 established a commercial branch, the most important) and revenues outside Italy are now 24% of total sales. Grifal is now at a turning point as it is moving from a Potential dilution from stock options outstanding + not yet granted? No Reuters/Bloomberg: GRALA.MI GRAL IM provider of tailored packaging solutions, mostly to local customers, to a supplier CEO remuneration detail (fixed salary) Not disclosed 52-Week Range (EUR): 2.9 5.6 of commodities exploiting its innovative cArtù and cushionPaper products, Chairman remuneration detail (fixed salary) Source: FactSet therefore entering a colossal market. To reach this goal, the company will Not disclosed leverage on a disruptive corrugated cardboard product, called cArtù, which Is the share price included in the MBO criteria? Not disclosed Performance offers lower weight, lower cost and is 100% recyclable. The company also Percentage of treasury shares 0% 1m 3m 12m produces other packaging solutions, mostly based on polyethylene foam.
Absolute -3.5% 5.6% -24.8% Climate related risk Recent development Rel. to FTSE IT -2.2% 3.0% -35.5% Has the company defined GHG-emissions targets? No Grifal reported an excellent 1H19 (sales up 9.7%, EBITDA up 55.5% net profit How does the company assess climate-related risk? Not disclosed Graph Area Absolute/Relative 12 M tripled) in line with the company business plan. All regions went up, in particular foreign markets: Italy grew by 2.0%, while Europe and RoW rose respectively by 45.1% and 29.1%. The firm is clearly benefitting from the national and Social Responsibilities 5,500 international success of cArtù brand, as confirmed by the license contract signed Does the company publish a separated Sustainability report? No, but the company in the semester for the outsourced production of cArtù packaging solutions. In committed to publish it starting by FY19 4,500 details, the company profitability in 1H19 has been positively affected by: 1) the Does the company have a Chief SRI/CSR officer (or a committee)? No 3,500 lower cost of paper caused by the higher weight of cArtù on comprehensive turnover; 2) the extraordinary IPO tax credit of EUR0.5 million. We highlight Does the Chief SRI/CSR officer votes in any of the committee? NA 2,500 that stripping out this one-off tax credit, EBITDA would have reached EUR1.0 Is the Investor Relation officer a different person from CFO (or million, corresponding to a 10.4% margin, broadly in line with the historical other officers)? No performance of Grifal. The company has recently obtained the authorizations for Is the ESG strategy integrated in the Business Plan (or in the group the construction of one facility (to be used as warehouse and to hold future strategy)? Yes production lines for both cArtù and cushionPaper solutions) for an overall 5,700 Grifal FTSE Italia All-Share sqm area besides the historical production site of Cologno al Serio. The building Does the company have an ethical code? No should start in 1Q20 and should be completed by Dec-2020. Grifal also published Percentage of female directors 11.1% (1 out of 9) Source: FactSet 2019 preliminary results with revenues topping EUR21.8 million (+11% vs. 2018) and EBITDA at EUR2.5 million (11..5% margin vs. 11.3% in 2018). How is the cybersecurity issue managed? The company is fully compliant with GDPR Graph Shareholders’ Structure regulation- The data protection policy is available on the website
Free SWOT Analysis float; Strengths Weaknesses 24,3% • Innovative business model • Strong concentration in the domestic market and limited size • Fully internal design and manufacturing of production machines • Dependence on a limited number of key customers Mediola • cArtù could be the new technological breakthrough in the industry • Limited production capacity and production constraints num G- SGR; Opportunities Threats Quattronove 7,3% • Entering in the commodity market through cArtù and cushionPaper • Paper, cardboard and EPE price fluctuations ; 68,4% • New distribution strategy based on integrated logistics approach • Increasing competition and potential entry of large international companies • Increasing environmental awareness • Delays in building the new plant Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Grifal
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 19.63 22.44 27.18 33.13 ROE 5.1% 6.8% 8.5% 10.9% EBITDA 2.21 2.97 3.79 5.00 Net Fin. Debt / Equity (x) 0.7 0.4 0.4 0.1 EBITDA margin 11.3% 13.2% 14.0% 15.1% Net Fin. Debt / EBITDA (x) 2.4 1.5 1.3 0.4 EBIT 0.74 1.21 1.77 2.73 Capex / Sales 23.5% 13.4% 12.9% 7.4% EBIT margin 3.8% 5.4% 6.5% 8.2% Pay Out Ratio 74.8% 44.5% 38.9% 36.2% Profit before taxes 0.52 1.02 1.60 2.57 Taxes -0.13 -0.30 -0.48 -0.77 Net Income 0.39 0.71 1.12 1.80 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.04 0.07 0.09 0.12 Growth Rates DPS 0.03 0.03 0.04 0.04 (%) 2018A 2019E 2020E 2021E BVPS 0.78 0.99 1.06 1.14 Growth Group Net Sales 10.6% 14.3% 21.1% 21.9% Growth EBITDA 19.0% 34.5% 27.7% 31.6% Growth EBIT 8.5% 63.2% 46.2% 54.0% Growth Net Profit 6.9% 84.6% 57.2% 61.3% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 142.5 53.6 40.2 29.0 P/OpCFPS 66.5 21.3 31.1 15.1 Balance Sheet P/BV 7.3 3.6 3.4 3.2 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 0.5% 0.8% 1.0% 1.2% Capital Employed 12.86 14.78 17.96 18.74 EV/Sales 3.1 1.9 1.9 1.7 Shareholders’ Equity 7.50 10.46 13.15 16.58 EV/EBITDA 27.8 14.6 13.3 11.1 Net Financial Debt / (Cash) 5.36 4.32 4.81 2.16 EV/EBIT 82.5 35.8 28.6 20.3
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Leone Film Group 03 February 2020 – 5:30 PM TARGET PRICE: 5.80 MARKET PRICE: 4.18
Entertainment Company profile Corporate Governance
Data Leone Film Group (LFG) is a leading company in the Italian movie industry. Does the company have a combined Chair/CEO? No Founded by the sons of the famous director, Sergio Leone, it produces and Shares outstanding (m): Percentage of independent directors 16.67% (2 out of 6) 14.20 distributes movies for both cinema and TV (series, international co-productions), Does the company have loyalty shares? No Market Cap. (EURm): 59.35 acquires full rights of foreign movies, lasting 15-25 years, co-distributing them through all available channels (cinema, Pay TV, Free TV, home video, digital and Does major shareholders have a “shareholders pact” in place? Enterprise Value (EURm): Yes 125.44 new media), performs executive productions and has a library of almost 500 Are “poison pill” or “change of control” clauses adopted? No Av. Daily Trad. Vol. (000): 2.1 movies with an excellent box office track record. LFG has always distributed foreign movies leveraging on long term agreements with the major US content Potential dilution from stock options outstanding + not yet granted? No Reuters/Bloomberg: LFG.MI LFG IM providers (Lionsgate, DreamWorks and others) but in 2009 it entered the film CEO remuneration detail (fixed salary) Not disclosed 52-Week Range (EUR): 3.9 5.2 production industry and has completed several movies to date. Production Chairman remuneration detail (fixed salary) Not disclosed Source: FactSet activity increased sharply in 2014 following the acquisition of Lotus Production Is the share price included in the MBO criteria? which is active in movie and TV co-productions (with long term agreements with Not disclosed Performance top directors) and is one of the main Italian companies in executive productions. Percentage of treasury shares 0.2%
1m 3m 12m The founder (Mr. Belardi) is now part of the Board of LFG with a 4.5% stake.
Absolute Climate related risk -5.0% -13.6% -6.3% Recent development Rel. to FTSE IT Has the company defined GHG-emissions targets? No -3.7% -15.8% -19.6% In 1H18 sales dropped by nearly 60% but this was totally due to the lack of How does the company assess climate-related risk? international executive productions (vs. 4 in 1H18), an activity that presents high No Graph Area Absolute/Relative 12 M revenues but a low margin. On the other side, distribution sales increased by 88% driven by several blockbusters (namely “Green Book”, “After” and “Mia e il Social Responsibilities 5,700 Leone Bianco” with EUR22 million of cumulative box office) making once again Does the company publish a separated Sustainability report? No LFG the first Italian distributor with a market share of 8.9% compared with 8.5% 5,200 Does the company have a Chief SRI/CSR officer (or a committee)? in 1H18. As a result, EBITDA margin surpassed 50% compared with 17.8% in No 4,700 1H18. However, higher financial charges and the lack of tax credits caused a net Does the Chief SRI/CSR officer votes in any of the committee? NA 4,200 profit slowdown of nearly 30%. In this scenario, LFG updated its business plan Is the Investor Relation officer a different person from CFO (or significantly cutting top line prospects due to the lower contribution of the Yes 3,700 other officers)? international executive productions but increased EBITDA expectation on 2020 Is the ESG strategy integrated in the Business Plan (or in the group on the back of a different product mix. LFG also expects higher D&A costs in strategy)? No 2020, therefore EBIT is anticipated at EUR9.1 million, 28% below the old business plan. For 2019, the new business plan anticipates sales of EUR65.3 million and Does the company have an ethical code? Yes EBITDA of EUR25.9 million, thus implying a buoyant second half of the year with Leone FTSE Italia All-Share Percentage of female directors 33.33% (2 out of 6) the release of 6 movies and 34% EBITDA margin. How is the cybersecurity issue managed? The company is fully compliant with GDPR Source: FactSet regulation. The data protection policy is available on the website
Graph Shareholders’ Structure SWOT Analysis P. Free A. Strengths Weaknesses Genove Float; Leone; • Outstanding track record in film production and distribution • High volatility of box office revenues se; 2,0% 20,3% 29,1% • Strong management expertise in the industry, with an extensive network • The business is totally dependent on a small number of key personnel A. • Long lasting agreements with top international content providers • Limited liquidity Belardi; 4,1% Opportunities Threats M. R. Sofia • Strong development of new media distribution channels • Piracy, which is rapidly increasing Holding; Bulgari; Leone; • Entry to international TV productions • Delays in film and TV production schedules could postpone releases 5,0% 10,6% 29,0% • Growing tax credits and subsidies reduce average production cost • High competition and fragmentation of the players in the industry
Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Leone Film Group
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 128.14 68.51 87.35 105.22 ROE 15.6% 10.0% 13.8% 14.0% EBITDA 30.47 25.53 39.20 47.11 Net Fin. Debt / Equity (x) 1.1 1.2 1.2 1.1 EBITDA margin 23.8% 37.3% 44.9% 44.8% Net Fin. Debt / EBITDA (x) 1.6 2.3 1.7 1.5 EBIT 6.65 6.08 9.55 10.66 Capex / Sales 18.1% 39.4% 43.3% 38.1% EBIT margin 5.2% 8.9% 10.9% 10.1% Pay Out Ratio 18.8% 27.1% 17.5% 15.2% Profit before taxes 6.54 4.62 7.16 8.23 Taxes 0.25 0.09 0.14 0.16 Net Income 6.79 4.71 7.31 8.39 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.48 0.33 0.51 0.59 Growth Rates DPS 0.09 0.09 0.09 0.09 (%) 2018A 2019E 2020E 2021E BVPS 3.07 3.31 3.73 4.24 Growth Group Net Sales 9.3% -46.5% 27.5% 20.5% Growth EBITDA 3.6% -16.2% 53.5% 20.2% Growth EBIT 22.7% -8.6% 57.1% 11.6% Growth Net Profit 73.9% -30.6% 55.2% 14.8% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 10.0 12.6 8.1 7.1 P/OpCFPS 4.2 2.8 1.8 1.5 Balance Sheet P/BV 1.6 1.3 1.1 1.0 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 1.9% 2.2% 2.2% 2.2% Capital Employed 93.01 105.14 118.54 128.94 EV/Sales 0.9 1.7 1.4 1.2 Shareholders’ Equity 43.57 47.00 53.03 60.14 EV/EBITDA 3.9 4.6 3.2 2.7 Net Financial Debt / (Cash) 49.42 58.14 65.51 68.80 EV/EBIT 17.7 19.4 13.1 12.1
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
LU-VE 03 February 2020 – 5:30 PM TARGET PRICE: 17.82 MARKET PRICE: 13.65
Heat exchangers, refrigeration Company profile Corporate Governance
LU-VE is a leading producer of heat exchangers and ventilated products for non- Does the company have a combined Chair/CEO? No Data residential applications with revenues of EUR307 million in 2018, 16 plants (of Percentage of independent directors Shares outstanding (m): 22.2 which 7 outside Italy), 12 commercial branches abroad, and a total of 2,655 15.4% (2 out of 13) employees at Dec-18. It is also present in the niche segments of close control Does the company have loyalty shares? Yes Market Cap. (EURm): 303.5 and glass doors. The group, founded and still managed by Liberali family, has Does major shareholders have a “shareholders pact” in place? Yes Enterprise Value (EURm): 462.6 reported average top line growth of about 10% in the past five years and strongly Are “poison pill” or “change of control” clauses adopted? No Av. Daily Trad. Vol. (000): 28.1 expanded abroad in the past few years thanks to the acquisition of Spirotech in India, Zyklus in the US and Al Air, a true game changing-acquisition finalized in Potential dilution from stock options outstanding + not yet granted? Yes Reuters/Bloomberg: LUVE.MI LUVE IM 2019 which added >EUR100 million sales. Because of its lean cost structure, CEO remuneration detail (fixed salary) EUR0.36 million 52-Week Range (EUR): 10.0 14.6 healthy operating leverage and the quality recognized by its customers, the Chairman remuneration detail (fixed salary) Source: FactSet company has maintained EBITDA margins close to 12% in the past five years. LU- EUR0.25 million VE was listed on the AIM market following the business combination with the Is the share price included in the MBO criteria? No Performance SPAC Industrial Star for Italy 1 in Jul-15 and moved to the MTA market segment Percentage of treasury shares 0.62% 1m 3m 12m in 2018.
Absolute 6.6% 32.5% 36.5% Climate related risk Recent development Rel. to FTSE IT 8.1% 29.3% 17.0% Has the company defined GHG-emissions targets? No LU-VE reported a remarkable product sales growth in 2019: sales were up 29% How does the company assess climate-related risk? LU-VE minimizes the Graph Area Absolute/Relative 12 M (+38% in 4Q19), broadly in line with our forecasts. Organic growth was also positive with an increase of 6.7% in the entire 2019 and of around 5% in 4Q19 environmental impact of its production processes, implementing policies of energy 15,000 despite the macro economic slowdown in Europe. Based on our estimates, Al efficiency, reduction of emissions, water consumption and of waste generation. 14,000 Air should have reported around EUR60 million in the past eight months (this 13,000 acquisition, for total consideration was EUR67.1 million corresponding to 6.5x Social Responsibilities 12,000 2018 EBITDA including an earn-out based on 2019 EBITDA, was consolidated Does the company publish a separated Sustainability report? Yes from May 2019), implying around EUR100 million revenues in the full year, in line 11,000 Does the company have a Chief SRI/CSR officer (or a committee)? 10,000 with LU-VE expectations. Order backlog at Dec-19 increased by 78.2% and by Not disclosed 9,000 13.6% organically, thus providing a positive kickoff for 2020. 1H19 was strong: Does the Chief SRI/CSR officer votes in any of the committee? Not disclosed EBITDA adjusted grew by >40% with 180 bps improvement in margin and all the Is the Investor Relation officer a different person from CFO (or companies acquired performed well (Spirotech was up 25%, Zyklus sales were other officers)? Yes up 39% with EBITDA margin >15%, Al Air added EUR13.6 million of revenues in Is the ESG strategy integrated in the Business Plan (or in the group two months). In addition, all the projects underway (new plant in Poland, plant strategy)? Yes LUVE FTSE Italia All-Share relocation in China, plant expansion in India, new plant in the US) are in line or ahead of schedule and this should pave the way for further margins improvement Does the company have an ethical code? Yes Source: FactSet in future. Percentage of female directors 23.1% (3 out of 13) Graph Shareholders’ Structure How is the cybersecurity issue managed? Not disclosed
Free SWOT Analysis Float Strengths Weaknesses 32,2% • Innovative products and low exposure to the Italian market • Net debt, after the acquisition of Ail Air, needs to be reduced Liberali • High entry barriers • High weight of goodwill (23% of the capital employed at Dec-18) family • Outstanding acquisition track record • Limited liquidity and free float 50,3% Opportunities Threats Faggioli • Synergies and cross selling opportunities from Al Air • Raw material fluctuations (mostly copper and aluminum) family • New plant in Poland should increase EBITDA margin • Currency fluctuations (in particular RUB and USD) 17,6% • Expansion in the US market thanks to Zyklus • Integration costs of Al Air
Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
LU-VE
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 306.9 399.6 472.1 491.1 ROE 10.8% 11.8% 14.7% 13.8% EBITDA 36.6 47.8 58.9 62.9 Net Fin. Debt / Equity (x) 0.4 0.9 0.8 0.6 EBITDA margin 11.9% 12.0% 12.5% 12.8% Net Fin. Debt / EBITDA (x) 1.7 3.1 2.4 2.0 EBIT 19.7 27.0 37.1 39.9 Capex / Sales 9.0% 6.3% 3.2% 3.1% EBIT margin 6.4% 6.8% 7.9% 8.1% Pay Out Ratio 36.1% 34.0% 26.1% 28.9% Profit before taxes 17.4 23.8 34.3 37.1 Taxes -1.3 -4.8 -7.9 -9.3 Net Income 15.4 18.3 25.6 26.9 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.69 0.82 1.15 1.21 Growth Rates DPS 0.25 0.28 0.30 0.35 (%) 2018A 2019E 2020E 2021E BVPS 6.40 6.97 7.84 8.75 Growth Group Net Sales 13.6% 30.2% 18.2% 4.0% Growth EBITDA 25.9% 30.7% 23.2% 6.7% Growth EBIT 39.7% 37.1% 37.1% 7.7% Growth Net Profit 173.1% 18.9% 39.6% 5.3% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 14.6 16.6 11.9 11.3 P/OpCFPS 10.7 11.8 7.2 6.3 Balance Sheet P/BV 1.6 2.0 1.7 1.6 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 2.5% 2.0% 2.2% 2.6% Capital Employed 208.9 304.9 317.1 324.4 EV/Sales 8.1 9.7 7.7 7.0 Shareholders’ Equity 142.2 155.0 174.3 194.6 EV/EBITDA 15.1 17.1 12.3 11.0 Net Financial Debt / (Cash) 63.6 146.3 138.9 125.4 EV/EBIT 1.4 1.5 1.4 1.4
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 23
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
MailUp 03 February 2020 – 5:30 PM TARGET PRICE: 6.00 MARKET PRICE: 4.37
IT Services Company profile Corporate Governance
MailUp was founded in 2002 and it is currently one of the top ten companies in Does the company have a combined Chair/CEO? No Data Europe to provide SaaS-based marketing platforms that enable companies to Percentage of independent directors create, test and send data-driven automated campaigns via email and SMS. The 20% (1 out of 5) Shares outstanding (m): 14.97 Group is scaling up from service provider to consultancy advisor to current Does the company have loyalty shares? No Market Cap. (EURm): 65.4 customers by also offering innovative marketing technology solutions and Does major shareholders have a “shareholders pact” in place? Yes Yes Enterprise Value (EURm): professional consulting services. In addition, it developed sophisticated email 64.7 Are “poison pill” or “change of control” clauses adopted? editing tools offered by BEE (100%-controlled). Over the past 5 years, MailUp No Av. Daily Trad. Vol. (‘000): 25.8 has carried out 5 acquisitions to reinforce its market share in email delivery in Potential dilution from stock options outstanding + not yet granted? Around 8% in 2021/2022 due to earn-out for Datatrics Reuters/Bloomberg: MAIL.MI MAIL IM Spain and Latam (Acumbamail) and in Northern Europe (Globase), to incorporate its SMS wholesale provider (Agile Telecom) and to enter into the CEO remuneration detail (fixed salary) Not disclosed 52-Week Range (EUR): 2.7 4.8 predictive marketing based on AI (Datatrics). The Group serves over 22,000 Chairman remuneration detail (fixed salary) Not disclosed Source: FactSet clients in 115 countries. International revenues account for 44% of total. Is the share price included in the MBO criteria? Not disclosed
Performance Percentage of treasury shares 0.47% Recent development 1m 3m 12m In 9M19, MailUp recorded consolidated revenues at EUR42.5 million (+60% Climate related risk Absolute -7,9% -3.3% 62.5% YoY), boosted mainly by SMS (+71% YoY to EUR30.7 million); email business Has the company defined GHG-emissions targets? No Rel. to FTSE IT -6.3% -5.8% 45.8% was up 17% YoY to EUR9.7 million, inclusive of BEE (EUR1.9 million gross sales, +131% YoY). Datatrics sales were EUR1.5 million compared to around EUR1 How does the company assess climate-related risk? New sustainable office, internal Graph Area Absolute/Relative 12 M million in FY18. 9M19 EBITDA was EUR3.3 million (+27.5% YoY) after EUR0.67 recycling culture and CO2 compensation policy since 2007 million negative one-off recorded in 1H19 by Agile Telecom as an effect of 5,000 unexpected increase in the cost of traffic applied since May 2018 by a telecom Social Responsibilities 4,500 operator. They are still in dispute with the telecom operator and there was no Does the company publish a separated Sustainability report? 4,000 further impact in 3Q19. In pipeline FY19 3,500 Does the company have a Chief SRI/CSR officer (or a committee)? No 3,000 Does the Chief SRI/CSR officer votes in any of the committee? No 2,500 Is the Investor Relation officer a different person from CFO (or 2,000 other officers)? Yes Is the ESG strategy integrated in the Business Plan (or in the group strategy)? No
Does the company have an ethical code? MailUp FTSE Italia All-Share Yes Percentage of female directors 20% (1 out of 5) 20% (1 out of 5) Source: FactSet How is the cybersecurity issue managed? The company is fully compliant with EU GDPR regulation. The company is member of M3AAWG to fight abuse
Graph Shareholders’ Structure SWOT Analysis Treasury Strengths Weaknesses ; 0,5% Founders ; Free • Highly talented and motivated people • Dependence on key talents 53,6% float; • Scalable business • Small size compared to competitors on big clients Employe 34,1% • Positive net cash position • High goodwill (EUR16.7 million at June 2019, 25% market cap) es; 0,3%
BMC Opportunities Threats Holding Pronti • Expansion outside Italy • Scarcity of talented personnel ; 4,4% Gianluca • Significant cross-selling opportunities into existing customers base • M&A risk ; 7,2% • Potential M&A to expand product offering • Increasing regulatory requirements and connected reputational risk
Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
MailUp
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 39,0 59,9 71,3 83,1 ROE 15,6% 12,9% 18,8% 24,7% EBITDA 3,8 4,8 7,3 9,6 Net Fin. Debt / Equity (x) -0,4 -0,1 -0,2 -0,2 EBITDA margin 9,7% 8,0% 10,2% 11,6% Net Fin. Debt / EBITDA (x) -1,7 -0,4 -0,5 -0,6 EBIT 1,9 2,4 4,5 6,4 Capex / Sales 8,5% 6,4% 6,2% 6,0% EBIT margin 4,9% 4,0% 6,3% 7,7% Pay Out Ratio 0,0% 0,0% 0,0% 0,0% Profit before taxes 1,9 2,4 4,5 6,4 Taxes -0,7 -1,1 -1,8 -2,3 Net Income 1,3 2,7 4,1 4,9 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0,08 0,09 0,18 0,27 Growth Rates DPS 0 0 0 0 (%) 2018A 2019E 2020E 2021E BVPS 1,07 1,15 1,34 1,61 Growth Group Net Sales 47,8% 53,5% 19,0% 16,6% Growth EBITDA 30,0% 27,8% 50,7% 32,3% Growth EBIT 45,9% 27,1% 85,6% 42,8% Growth Net Profit 143,9% 103,2% 49,0% 21,8% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 27,8 48,9 24,0 16,1 P/OpCFPS 3,1 4,2 3,8 3,3 Balance Sheet P/BV 2,19 3,79 3,27 2,72 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 0,0% 0,0% 0,0% 0,0% Capital Employed 9,6 15,4 16,4 18,2 EV/Sales 0,76 1,08 0,89 0,73 Shareholders’ Equity 15,9 17,3 20,0 24,0 EV/EBITDA 7,8 13,4 8,7 6,3 Net Financial Debt / (Cash) -6,4 -1,9 -3,5 -5,9 EV/EBIT 15,6 26,9 14,1 9,5
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 25
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
NB Aurora 03 February 2020 – 5:30 PM TARGET PRICE: 11.70 MARKET PRICE: 10.58
Financial Holding Company profile Corporate Governance
Data NB Aurora is the first permanent-capital fund listed on the Italian stock market Does the company have a combined Chair/CEO? No (in the MIV segment). NB Aurora targets double digit return through minority Shares outstanding (m): 15.0 Percentage of independent directors 60% (3 out of 5) equity investments in a portfolio of small and medium sized unlisted Italian Market Cap. (EURm): 158.7 companies. Listed on 4 May 2018 (raising EUR151.5 million), on 25 May 2018 NB Does the company have loyalty shares? No Enterprise Value (EURm): 87 Aurora completed the acquisition of 44.55% of the unit of Fondo Italiano Does major shareholders have a “shareholders pact” in place? No d’Investimento for a total consideration of EUR75.4 million (excluding Av. Daily Trad. Vol. (‘000): 6.0 Are “poison pill” or “change of control” clauses adopted? No transaction costs). Out of 15 companies, 9 have been already sold for a total Reuters/Bloomberg: NBA.MI NBA IM cash-in worth almost twice of the original investment (EUR126 million). Potential dilution from stock options outstanding + not yet granted? No 52-Week Range (EUR): 9.24 11.96 NB Aurora has a team of 10 fully dedicated professionals with long experience CEO remuneration detail (fixed salary) Not disclosed Source: FactSet in investing together (circa 10 years). Chairman remuneration detail (fixed salary) EUR20k Performance To their credit they can leverage on the NB Private Equity platform, one of the Is the share price included in the MBO criteria? No most extensive platforms in Italy. The team track record calls for: a) a MOIC Percentage of treasury shares 1m 3m 12m (Multiple On Invested Capital) of 2,2x which goes to 2,0x including write-offs; b) 0%
Absolute 0.0% 0.0% 26.6% a 17.5% gross IRR that goes to 15.8% including write-offs. Climate related risk Rel. to FTSE IT 1.5% -1.2% 11.6% Has the company defined GHG-emissions targets? No Graph Area Absolute/Relative 12 M Recent development How does the company assess climate-related risk? Not disclosed In December 2019, NB Aurora announced it has signed a binding co-investment 12,0 agreement together with Eddy De Vita (a manager and entrepreneur very well Social Responsibilities 11,0 known in the sector) for the acquisition, through a NewCo, of the majority stake Does the company publish a separated Sustainability report? No in Pharma Healthcare Supply Chain Expertise (PHSE). The three founding 10,0 Does the company have a Chief SRI/CSR officer (or a committee)? No partners will reinvest in the company by acquiring 30%, NB Aurora will invest Does the Chief SRI/CSR officer votes in any of the committee? 9,0 EUR16 million and will hold 30.8% of Newco. No 8,0 In September 2019, NB Aurora announced a co-investment with NB Renaissance Is the Investor Relation officer a different person from CFO (or No Partners in Rino Mastrotto Group, a world leader in the production and sale of other officers)? leather for the fashion, automotive and furniture sectors generating about 60% Is the ESG strategy integrated in the Business Plan (or in the group of its turnover abroad. strategy)? Yes
NB Aurora FTSE Italia All Shares Does the company have an ethical code? The company follows the Code of Conduct of Borsaitaliana Percentage of female directors 20% (1 out of 5) Source: FactSet How is the cybersecurity issue managed? Not disclosed Graph Shareholders’ Structure SWOT Analysis Strengths Weaknesses Neuberger • Experienced management team with proven track record; • FuM growth could come only through capital increases; Berman; • Unique selling proposition positioning: invest in minority stakes of private • Market down cycle (i.e. when it is not convenient to exit from investments) 4,00% companies through a listed vehicle (NB Aurora itself); could reduce or even zero the capital gains pot for dividend distribution;
Free Opportunities Threats • Increase the FuM would not change the structure costs proportionally thus • Visibility to outside investors of some of the smaller portfolio companies may float; decreasing their relative weight on the NAV; be low, thus increasing the discount to NAV; 96,00% • Potentially NB Aurora could manage third-party assets thus receiving • NB Aurora has a short track record, as a company, in investing and its ability management/performance fees itself; to deploy cash could impact the NAV discount.
Source: Company data
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
NB Aurora
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Realised/change in unre. Cap. gains 60,3 39,5 14,3 15,3 ROE 26,6% 16,2% 5,0% 5,6% Interest Income 0,0 0,0 0,0 0,0 Net Fin. Debt / Equity (x) -0,51 -0,50 -0,35 -0,20 Total investment income 60,3 39,5 14,4 15,3 ROI 53,9% 32,4% 7,7% 7,0% Total expenses 7,6 5,0 4,1 4,1 Cost/Income 12,6% 12,5% 28,5% 26,7% Total income for the period 52,7 34,6 10,3 11,2 Other items 0,0 0,0 0,0 0,0 Total compr. income for the period 52,6 34,6 10,3 11,2
Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 3,47 2,28 0,68 0,74 DPS 1,06 1,06 0,85 0,30 BVPS 13,07 14,11 13,54 13,27
Balance Sheet Stock Market Ratios (EURm) 2018A 2019E 2020E 2021E (x) 2018A 2019E 2020E 2021E Capital Employed 97,7 106,7 133,8 161,5 P/E 3,0 4,6 15,6 14,3 Shareholders’ Equity 198,0 213,7 205,1 201,1 P/BV 0,81 0,75 0,78 0,80 Net Financial Debt / (Cash) -100,3 -107,1 -71,3 -39,6 Dividend Yield 10,0% 10,0% 8,1% 2,9% ROI 53,9% 32,4% 7,7% 7,0% ROE 26,6% 16,2% 5,0% 5,6% Debt/Equity -0,51 -0,50 -0,35 -0,20
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 27
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
NEXI 03 February 2020 – 5:30 PM TARGET PRICE: 13.70 MARKET PRICE: 12.80
Financial Tech - Payments Company profile Corporate Governance
With 70% market share in merchant acquiring, 60% in cards issuing and circa 150 Does the company have a combined Chair/CEO? No Data partner banks (2018 data), Nexi is the leader in the Italian electronic payments Percentage of independent directors 23.1% (3 out of 13) Shares outstanding (m): 627.8 market, where card penetration of 26% is half the WE average. The company Does the company have loyalty shares? No Market Cap. (EURm): 8,036 operates through three divisions: Does major shareholders have a “shareholders pact” in place? Yes Enterprise Value (EURm): 10,285 ➢ Merchants Services & Solutions (48% of 2018 pro-forma revenues including Av. Daily Trad. Vol. (‘000): 3,100 other services like HelpLine): provider of electronic payments solutions to Are “poison pill” or “change of control” clauses adopted? No Reuters/Bloomberg: NEXI.MI NEXI IM merchants; Potential dilution from stock options outstanding + not yet granted? Yes 52-Week Range (EUR): 7.83 13.6 ➢ Cards & Digital Payments (39% of 2018 pro-forma revenues): consumer CEO remuneration detail (fixed salary) EUR1.2 million Source: FactSet cards, commercial cards, mobile payments and payment apps; Chairman remuneration detail (fixed salary) EUR0.5 million ➢ Digital Banking Solutions (13% of pro-forma revenues): advance banking Is the share price included in the MBO criteria? Yes Performance solutions, open banking and other services. Percentage of treasury shares 0% 1m 3m 12m
Absolute 3.4% 38.1% - Recent development Climate related risk 4.7% 35.5% - Rel. to FTSE IT In December 2019, Nexi announced a reinforcement of the long-term Has the company defined GHG-emissions targets? No
Graph Area Absolute/Relative 12 M partnership with Intesa SanPaolo “sealed” also through the acquisition of Intesa’s How does the company assess climate-related risk? Sustainability Report merchant acquiring business and by the contextual purchase by the Italian bank 14,00 of a 9.9% stake in Nexi (from Mercury UK, Nexi’s major shareholder). Nexi is Social Responsibilities buying Intesa merchant acquiring business for a total consideration of EUR1 Does the company publish a separated Sustainability report? Yes 12,00 billion plus a potential earn-out payable in 2025 (which is based on the 10,00 overperformance of the merchant portfolio vs. the plan while aligning Nexi and Does the company have a Chief SRI/CSR officer (or a committee)? Yes
Does the Chief SRI/CSR officer votes in any of the committee? 8,00 ISP interests). The two companies signed a marketing & distribution agreement Yes until 2044 whereby Intesa will promote and distribute the products/solutions Is the Investor Relation officer a different person from CFO (or 6,00 developed by Nexi. other officers)? Yes Nexi reported a solid set of 3Q19 results showing top line growth, EBITDA Is the ESG strategy integrated in the Business Plan (or in the group margin expansion (thanks to operating leverage and cost management) and
Jul-19 No Jan-20
Jun-19 strategy)?
Oct-19
Apr-19
Sep-19
Dec-19
Aug-19 Nov-19 May-19 positive cash generation. Management is continuing to execute on what “promised” at the IPO and this is extremely important for a stock new to the Does the company have an ethical code? Yes Nexi S.p.A. FTSE Italia All-Share market. Percentage of female directors 30.8% (4 out of 13) How is the cybersecurity issue managed? Compliance with GDPR regulation and Source: FactSet internal system for information security management
Graph Shareholders’ Structure SWOT Analysis Strengths Weaknesses • Market leader in Italy, in a business where scale matters, offering full • Lack of international presence; Free float; coverage of the payment system value-chain; • Low exposure to e-commerce; 44,40% • High entry barriers: much more entrenched than anyone in the Italian eco- • Limited direct exposure to retail customers (merchants and card holders); system both at the banking and merchant level; Mercury; • Large and diversified customer base with around 150 partner banks; 52,40%
Opportunities Threats • The Italian government plans to increase the share of digital payments; • Penetration of card payments could grow at a slower pace than predicted; GIC PTE; 3,20% • Nexi has its app (YAP) to attract millennials to the payment market; • In case of systemic risks, electronic payments value may decline; • 57% of millennials do not have a bank account. In the long run, this could be Source: Company data a threat for the banking system and ultimately for Nexi;
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Sustainable Finance and Fintech: progress and innovation, 6 February 2020
NEXI
Income Statement Financial Ratios (EURm, %) 2018PF 2019E 2020E 2021E (%) 2018PF 2019E 2020E 2021E Net Revenues 931 982 1157 1227 ROE 3,5% 8,0% 15,8% 15,6% EBITDA 424 505 669 744 Net Fin. Debt / Equity (x) 4,2 1,1 1,4 1,0 EBITDA margin 45,6% 51,4% 57,9% 60,7% Net Fin. Debt / EBITDA (x) 5,7 3,0 3,4 2,6 EBIT 349 390 519 569 Capex / Sales 16,1% 16,6% 13,1% 12,3% EBIT margin 37,5% 39,7% 44,9% 46,4% Pay Out Ratio 0% 0% 0% 0% Profit before taxes 70 168 375 440 Taxes (49) (61) (126) (147) Net Income 20 107 249 293 Per Share Data (EUR) 2018PF 2019E 2020E 2021E EPS 0,03 0,17 0,40 0,47 Growth Rates DPS 0,0 0,0 0,0 0,0 (%) 2018PF 2019E 2020E 2021E BVPS 0,92 2,12 2,52 2,98 Growth Group Net Sales 7,4% 5,6% 17,7% 6,1% Growth EBITDA 14,9% 19,1% 32,5% 11,1% Growth EBIT n.a. 11,8% 33,1% 9,5% Growth Net Profit n.a. 438,0% 132,9% 17,3% Stock Market Ratios (x) 2018PF 2019E 2020E 2021E P/E n.a. 55,8 32,2 27,5 P/OpCFPS n.a. 18,53 16,2 14,0 Balance Sheet P/BV n.a. 4,5 5,1 4,3 (EURm) 2018PF 2019E 2020E 2021E Dividend Yield (%) n.a. 0,0% 0,0% 0,0% Capital Employed 2994 2848 3830 3786 EV/Sales n.a. 7,6 8,9 8,1 Shareholders’ Equity 576 1331 1580 1873 EV/EBITDA n.a. 14,8 15,4 13,4 Net Financial Debt / (Cash) 2418 1517 2250 1913 EV/EBIT n.a. 19,2 19,8 17,5
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 29
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Notorious Pictures 03 February 2020 – 5:30 PM TARGET PRICE: 4.54 MARKET PRICE: XX.XX
Entertainment Company profile Corporate Governance
Notorious Pictures is a leading company in the Italian movie industry: it produces Data Does the company have a combined Chair/CEO? Yes and distributes movies for both cinema and TV, acquires full rights of foreign Percentage of independent directors Shares outstanding (m): 22.5 movies, lasting 15-25 years, distributing them through all available channels 20% (1 out of 5) (cinema, Pay TV, Free TV, home video, digital and new media), and has a library Does the company have loyalty shares? No Market Cap. (EURm): 53.8 of almost 600 movies with an excellent box office track record and the control Does major shareholders have a “shareholders pact” in place? No Enterprise Value (EURm): 56.8 over the entire value chain (thanks to its partnership with UCI Cinemas and The Are “poison pill” or “change of control” clauses adopted? No Av. Daily Trad. Vol. (000): 14.3 Space and its agent network). Led by Mr. Marchetti, who controls 82% of the Potential dilution from stock options outstanding + not yet granted? No Reuters/Bloomberg: NPI.MI NPI IM company and has more than 20 years of experience in the industry, in 2015 Notorious Pictures entered in the international production and co-production CEO remuneration detail (fixed salary) EUR14k 52-Week Range (EUR): 2.4 3.3 business (low EBITDA margin, but absence of risk and relevant tax credit), and Chairman remuneration detail (fixed salary) Source: FactSet in 2016 started the executive production activity. The company also entered the Combined Chair/CEO multiplex business in 2019 targeting to manage 20 multiplexes in 5 years (two Is the share price included in the MBO criteria? Not disclosed Performance multiplexes opened up to date) reaching around 5 million of admission and is Percentage of treasury shares 2.45% 1m 3m 12m now looking at TV series production and has already closed contracts with digital
Absolute media broadcaster, anticipating the evolution of the industry in the near future. -3.6% -5.2% -27.1% Notorious Pictures was listed in the AIM Italia market in June 2014. Climate related risk Rel. to FTSE IT -2.4% -7.5% -37.5% Has the company defined GHG-emissions targets? No
Recent development How does the company assess climate-related risk? Graph Area Absolute/Relative 12 M Not disclosed 1H19 was characterized by a sharp growth of theatrical and pay TV sales (+28% and +50% respectively) driven by the releases of several blockbusters (>EUR11.4 Social Responsibilities 3,500 million box office receipts or +20% vs. 1H18), but also from a declining EBITDA Does the company publish a separated Sustainability report? margin (29.6% vs. 37.3% in 1H18) caused by a different sales mix (EUR5.5 million No 3,000 for the distribution of library owned by third parties, a low-margin business, and Does the company have a Chief SRI/CSR officer (or a committee)? No
EUR6.5 million of work in progress which will record earnings in the last part of Does the Chief SRI/CSR officer votes in any of the committee? 2,500 No the year) and higher labor cost, due to variable costs associated with the Is the Investor Relation officer a different person from CFO (or production activity. EBIT, up 12%, benefitted from lower D&A costs but net other officers)? No result was impacted by a higher tax rate due to the lack of tax credits which, although certain, will be recorded in the second half. Net cash (EUR3.4 million Is the ESG strategy integrated in the Business Plan (or in the group No at Dec-18) turned into EUR5.2 million of net debt due to the impact of the first strategy)?
Notorious Pictures S.p.A. time adoption of IFRS 16. 2019 closed with a box office of EUR17.0 million, an Does the company have an ethical code? Yes increase of 20% vs. 2018 and well above the growth of the movie industry in Italy Percentage of female directors FTSE Italia All-Share (+14.3%). Also the first year in the multiplex business was positive: sales 0% increased by 47% compared to 2018. How is the cybersecurity issue managed? Not disclosed Source: FactSet SWOT Analysis Graph Shareholders’ Structure Strengths Weaknesses Free • Positive track record in film distribution and wide library • High volatility of box office revenues Float • Long-term experience of the management in the movie industry • The business is dependent on a small number of key personnel 17,0% • Sizable net cash to grab investment opportunities • The company was not able to finalize any acquisition since its listing
Opportunities Threats Treasury • Entrance in the TV series production business • Increasing piracy due to the digitalization process shares • Long-term agreements with new digital media players • Sudden and unexpected film postponement • Development of the multiplex business • Progressive reduction of independent distributors in Italy
Source: Company data
Servizio Studi – Equity Research 30
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Notorious Pictures
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 31.5 41.7 51.0 60.6 ROE 17.6% 23.2% 20.9% 22.1% EBITDA 11.1 15.2 15.4 18.3 Net Fin. Debt / Equity (x) -0.1 0.1 0.2 0.2 EBITDA margin 35.3% 36.5% 30.1% 30.1% Net Fin. Debt / EBITDA (x) -0.3 0.2 0.4 0.4 EBIT 4.1 8.1 8.5 10.7 Capex / Sales 23.7% 30.0% 25.0% 22.3% EBIT margin 13.2% 19.5% 16.6% 17.7% Pay Out Ratio 44.4% 30.9% 32.4% 30.8% Profit before taxes 4.1 8.0 8.5 10.7 Taxes 0.0 -1.4 -1.5 -1.9 Net Income 4.2 6.5 6.9 8.8 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0.18 0.29 0.31 0.39 Growth Rates DPS 0.08 0.09 0.10 0.12 (%) 2018A 2019E 2020E 2021E BVPS 1.05 1.26 1.48 1.77 Growth Group Net Sales 73.9% 32.2% 22.4% 18.7% Growth EBITDA 84.9% 36.8% 1.0% 18.8% Growth EBIT 119.0% 96.2% 4.2% 26.4% Growth Net Profit 181.4% 57.7% 5.9% 26.5% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 11.0 8.2 7.7 6.1 P/OpCFPS 5.7 5.8 4.7 3.8 Balance Sheet P/BV 1.9 1.9 1.6 1.4 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 4.0% 3.8% 4.2% 5.0% Capital Employed 20.1 31.0 39.2 47.3 EV/Sales 1.4 1.4 1.2 1.0 Shareholders’ Equity 23.6 28.3 33.2 39.7 EV/EBITDA 3.8 3.7 3.9 3.4 Net Financial Debt / (Cash) -3.4 2.7 6.0 7.6 EV/EBIT 10.3 7.0 7.1 5.8
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 31
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Piaggio 03 February 2020 – 5:30 PM TARGET PRICE: 3.20 MARKET PRICE: 2.47
Automotive Company profile Corporate Governance
Established in 1884, the Piaggio Group is Europe’s largest scooter and Does the company have a combined Chair/CEO? Yes Data motorcycle manufacturer and one of the world leaders in its sector. Today the Percentage of independent directors 55.6% (5 out of 9) Shares outstanding (m): 357.4 Piaggio Group has three separate business arms: two-wheelers, light commercial vehicles and the robotics division with Piaggio Fast Forward, the Group mobility Does the company have loyalty shares? No Market Cap. (EURm): 899 of the future research center in Boston. Does major shareholders have a “shareholders pact” in place? No Enterprise Value (EURm): 1,282 In 2018, the Piaggio Group sold 603,600 vehicles worldwide, an increase of 9.2% Are “poison pill” or “change of control” clauses adopted? Av. Daily Trad. Vol. (‘000): 717.2 from 552,800 in 2017. In the two-wheeler sector, Piaggio sold 393,100 vehicles No Reuters/Bloomberg: PIA.MI PIA IM worldwide. In Europe it has a share of 25.3%. It also retained a strong presence Potential dilution from stock options outstanding + not yet granted? No 52-Week Range (EUR): 1.89 3.16 on the North American scooter market, where its share reached 23.9% In the CEO remuneration detail (fixed salary) EUR1.29 million commercial vehicles sector, the Group sold 210,500 vehicles. On the Indian Source: FactSet Chairman remuneration detail (fixed salary) market for commercial vehicles, the PVPL subsidiary had an overall market share Combined Chair/CEO
of 23.3% in three-wheelers and confirmed its leadership in the Cargo segment Is the share price included in the MBO criteria? Not disclosed Performance with a share of 44.9%. Percentage of treasury shares 0.25%
1m 3m 12m Absolute -10.3% -12.6% 23.1% Recent development Climate related risk Rel. to FTSE IT -9.0% -15.1% 6.4% November & December data for the Indian market (28% of group revenues in Has the company defined GHG-emissions targets? No 2019E): 3 Wheelers figures were better than expected, 2 wheelers were worst Graph Area Absolute/Relative 12 M How does the company assess climate-related risk? Carefully defining the product than expected but, taking into account the relative size of the two businesses, planning process and the technological manufacturing cycle, and by using the best the news is positive: For 3/4 wheelers Piaggio posted a +7.4% better than the - 3,300 technologies and the most modern production methods
0.2% we are estimating in 4Q19 and the “mid single-digit decline” to which the company guided during the 3Q19 conf call. For 2 wheelers the market was weak Social Responsibilities 2,800 (-17.4% YoY) and Piaggio gained market share but, despite that, the sell-in Does the company publish a separated Sustainability report? Yes resulted in a -2.9% while we estimate for 4Q19 a +1.9%. Does the company have a Chief SRI/CSR officer (or a committee)? 2,300 Piaggio reported a set of 3Q19 results in line with our and consensus estimates Yes with an excellent cash flow generation (with the surprise to our estimates being Does the Chief SRI/CSR officer votes in any of the committee? No 1,800 mostly attributable to working capital). Group revenues grew (+5.3% YoY) Is the Investor Relation officer a different person from CFO (or despite a decline in units sales thus showing a sizeable price/mix/forex growth. other officers)? Yes The decline in units sales in Europe was against a solid end-market performance Is the ESG strategy integrated in the Business Plan (or in the group and driven by destocking. strategy)? Yes Piaggio & C. S.p.a. FTSE Italia All-Share Does the company have an ethical code? Yes
Percentage of female directors Source: FactSet 33.3% (3 out of 9) How is the cybersecurity issue managed? Compliance with GDPR regulation Graph Shareholders’ Structure SWOT Analysis Strengths Weaknesses Diego Della Valle; 5,50% • One of the major worldwide player in the 2 wheelers sector with strong • Some of its competitors (Yamaha, Honda mostly) can boast massive sizes on foothold in the European market; which leverage product/technology/distribution investments; • A major player in the Indian 3/4 wheelers market; • The company is quite levered, when compared to its peer group; • An unparalleled portfolio of brands; • The business is somewhat impacted by weather conditions.
Free float; Omniaholding; Opportunities Threats 40,90% 53,60% • An under-utilized production base (in Europe) with operating leverage; • Millennials less inclined to 2 wheelers when compared to older generations; • The (organized) entrance in markets like Latam, Africa and Middle East may • Past down-cycles have shown that 2 wheelers, although important, are not provide opportunities not yet visible; essential to people’s transportation needs; • Broader technological developments (electric, gas-powered 3-4 wheelers) • Future mobility operators may adopt the user-ship model rather than the Source: Company data work in favor of industry leaders like Piaggio. ownership.
Servizio Studi – Equity Research 32
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Piaggio
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 1.390 1.519 1.629 1.742 ROE 9,0% 12,6% 14,5% 17,0% EBITDA 202 229 247 274 Net Fin. Debt / Equity (x) 1,1 1,1 0,9 0,7 EBITDA margin 14,5% 15,1% 15,2% 15,7% Net Fin. Debt / EBITDA (x) 2,1 1,9 1,6 1,3 EBIT 93 112 127 153 Capex / Sales 8,0% 8,4% 7,4% 6,6% EBIT margin 6,7% 7,4% 7,8% 8,8% Pay Out Ratio 89,4% 69,5% 61,1% 51,2% Profit before taxes 68 88 106 132 Taxes -32 -38 -44 -53 Net Income 36 50 62 79 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0,10 0,14 0,17 0,22 Growth Rates DPS 0,09 0,10 0,10 0,11 (%) 2018A 2019E 2020E 2021E BVPS 1,12 1,11 1,18 1,30 Growth Group Net Sales 3,5% 9,3% 7,2% 6,9% Growth EBITDA 4,9% 13,7% 7,8% 10,8% Growth EBIT 28,3% 20,7% 13,8% 19,7% Growth Net Profit 80,5% 38,9% 22,7% 28,9% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 20,9 17,9 14,4 11,2 P/OpCFPS 4,8 4,2 4,8 4,4 Balance Sheet P/BV 1,9 2,3 2,1 1,9 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 4,3% 3,9% 4,3% 4,6% Capital Employed 829 823 821 813 EV/Sales 0,9 0,9 0,8 0,7 Shareholders’ Equity 400 398 424 466 EV/EBITDA 5,9 5,8 5,2 4,5 Net Financial Debt / (Cash) 429 425 397 347 EV/EBIT 12,8 11,8 10,1 8,1
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 33
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Reply 03 February 2020 – 5:30 PM TARGET PRICE: 71.3 MARKET PRICE:70.85
IT Services Company profile Corporate Governance
Reply is one of the largest IT services and software providers in Italy and has a Data Does the company have a combined Chair/CEO? No recognized operational excellence also in Germany and the UK in the most Percentage of independent directors Shares outstanding (m): 37.41 attractive and healthiest IT market segments: big data, IoT, cloud, cybersecurity, 33% AI and blockchain. The Group is a network of 130 highly specialized companies, Does the company have loyalty shares? Yes Market Cap. (EURm): 2,650.5 which support leading industrial groups at the forefront of all major innovation Does major shareholders have a “shareholders pact” in place? Yes Enterprise Value (EURm): 2,627.6 trends by offering premium services. Since its foundation in 1996, Reply has been Are “poison pill” or “change of control” clauses adopted? delivering outstanding double-digit revenues growth (>21% CAGR 2000-2018) No Av. Daily Trad. Vol. (m): 43.37 coupled with high margins (>14% on average at EBITDA level) thanks to both Potential dilution from stock options outstanding + not yet granted? No Reuters/Bloomberg: REY.MI REY IM organic growth and an aggressive M&A campaign: since 2006 Reply has acquired CEO remuneration detail (fixed salary) EUR0.73m EUR0.73 million 23 companies cumulating into EUR265 million revenues and it has never paid 52-Week Range (EUR): 47.5 77.5 Chairman remuneration detail (fixed salary) EUR0.6m double-digit EBIT multiples. Italy generates >60% of total revenues, Germany ca. EUR0.6 million Source: FactSet 20% and UK 10%; US is below 5%. The Group had over 8,000 employees across Is the share price included in the MBO criteria? No No
12 countries. Percentage of treasury shares 0.01% Performance 0.01%
1m 3m 12m Climate related risk Absolute 2,0% 21.3% 46.4% 78.4%Recent development Has the company defined GHG-emissions targets? No Rel. to FTSE IT 3.3% 18.8% 29.8% 56.6%9M19 closed with revenues at EUR866 million (+14.8% YoY reported, +10.2% How does the company assess climate-related risk? No organic), EBIT at EUR109 million (+19% YoY) and pre-tax profit at EUR108 Social Responsibilities Graph Area Absolute/Relative 12 M million (+12%). In 3Q19 the organic growth in region 1 (mainly Italy) slightly declined but remained >10% (+10.5% compared to +12% in 1Q and +12.6% in Does the company publish a separated Sustainability report? Yes
85,000 2Q), region 2 (mainly Germany) remained the greatest contributor to growth Does the company have a Chief SRI/CSR officer (or a committee)? No (+36% reported, +25% organic vs +15% organic growth in 2Q and +12% in 1Q) Does the Chief SRI/CSR officer votes in any of the committee? 75,000 and UK performance improved QoQ both on revenues (EUR29.8 million vs No EUR27 million in both 2Q and 3Q) and EBITDA (EUR6.2 million reported, Is the Investor Relation officer a different person from CFO (or other 65,000 Yes EUR3.5 million ex one-off vs EUR2 million in previous quarters). The net cash officers)? 55,000 position was EUR53 million. Is the ESG strategy integrated in the Business Plan (or in the group No 45,000 strategy)?
Does the company have an ethical code? Yes
Percentage of female directors 33% How is the cybersecurity issue managed? The Group wrote the “ICT security Reply FTSE Italia All-Share incident management policy” in 2018, which has been in force since January 2019 and which identifies 3 phases (identification, response and lessons learned) and the Source: FactSet roles and responsibilities for every phase.
Graph Shareholders’ Structure SWOT Analysis Strengths Weaknesses Alika; • Leading Italian consulting IT company • Low market share in Germany and the UK 45,1% • Solid client base: Tier-1 companies in different industries and countries • Low exposure to the US Free • Excellent M&A track record • Margins already optimized float; 50,8% Opportunities Threats • Potential expansion in the US market • Difficulty hiring of talented personnel Founders ex • Expansion in EU to reinforce Germany and UK or break into France • Increasing competitions Alika; 4,1% • Expansion into partner ecosystem • M&A execution risk
Source: Company data
Servizio Studi – Equity Research 34
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Reply
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 1.035,8 1.184,0 1.297,6 1.419,8 ROE 22,5% 20,7% 19,4% 18,5% EBITDA 144,8 189,9 205,2 225,0 Net Fin. Debt / Equity (x) -0,1 -0,1 -0,2 -0,2 EBITDA margin 14,0% 16,0% 15,8% 15,8% Net Fin. Debt / EBITDA (x) -0,5 -0,3 -0,6 -0,9 EBIT 132,4 152,5 167,5 186,3 Capex / Sales 2,9% 2,3% 2,0% 2,0% EBIT margin 12,8% 12,9% 12,9% 13,1% Pay Out Ratio 16,8% 17,0% 17,0% 17,0% Profit before taxes 139,2 153,5 170,5 189,3 Taxes -39,3 -43,4 -47,9 -52,6 Net Income 99,9 110,1 122,6 136,7 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 2,67 2,94 3,28 3,66 Growth Rates DPS 0,45 0,50 0,56 0,62 (%) 2018A 2019E 2020E 2021E BVPS 12,97 15,47 18,24 21,34 Growth Group Net Sales 17,1% 14,3% 9,6% 9,4% Growth EBITDA 17,5% 31,1% 8,1% 9,6% Growth EBIT 16,3% 15,2% 9,8% 11,3% Growth Net Profit 15,3% 28,3% 10,2% 11,3% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 19,5 25,0 22,4 20,1 P/OpCFPS 4,7 5,2 4,7 4,2 Balance Sheet P/BV 4,01 4,75 4,03 3,44 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 0,9% 0,7% 0,8% 0,8% Capital Employed 420,1 529,0 563,6 610,0 EV/Sales 1,92 2,30 2,05 1,82 Shareholders’ Equity 486,6 581,1 686,3 803,6 EV/EBITDA 13,8 14,4 12,9 11,5 Net Financial Debt / (Cash) -66,6 -52,1 -122,7 -193,7 EV/EBIT 15,0 17,9 15,9 13,9
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 35
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
SIT 03 February 2020 – 5:30 PM TARGET PRICE: 10.43 MARKET PRICE: 6.50
Heating, Smart gas metering Company profile Corporate Governance
SIT is a leading producer of components designed for the safety, efficiency and Does the company have a combined Chair/CEO? Yes Data performance of gas equipment with revenues of EUR360 million in 2018 (+11%), Percentage of independent directors eight plants (of which four outside Italy), 10 commercial branches abroad, and 33.3% (3 out of 9) Shares outstanding (m): 25.01 >2,000 employees. Since 2009, it has also been present in the fast-growing niche Does the company have loyalty shares? No Market Cap. (EURm): 162.55 segment of Smart Gas Metering. The group, founded and still managed by the Does major shareholders have a “shareholders pact” in place? Yes Enterprise Value (EURm): De’ Stefani family, has reported average organic growth of about 6.6% since 2012. 234.57 Are “poison pill” or “change of control” clauses adopted? Because of its lean cost structure, healthy operating leverage and the quality of No Av. Daily Trad. Vol. (000): 16.1 its products that is recognized by its customers, the company has maintained Potential dilution from stock options outstanding + not yet granted? Yes Reuters/Bloomberg: SIT.MI SIT IM EBITDA margins close to 13% in the past ten years (14.1% in 9M19). Almost 65% CEO remuneration detail (fixed salary) EUR0.65 million of SIT revenues are generated outside the domestic market, particularly in 52-Week Range (EUR): 6.0 9.0 Chairman remuneration detail (fixed salary) Combined Chair/CEO Source: FactSet Europe (41% of sales) and in the US (15%) but it also has a solid presence in Is the share price included in the MBO criteria? China and Turkey. SIT was listed on the AIM market following the business Yes Performance combination with the SPAC Industrial Star for Italy 2 in July-17 and moved to the Percentage of treasury shares 0.67% MTA market segment in 2019. 1m 3m 12m Climate related risk Absolute -8.5% -7.1% -19.8% Recent development Has the company defined GHG-emissions targets? No Rel. to FTSE IT -7.2% -9.4% -31.2% 3Q19 results were slightly above our expectations and gave some positive signals How does the company assess climate-related risk? SIT Group monitors on for the future: 1) contrary to the first half of the year when Heating division continuous basis the production activities commissioning to external laboratories Graph Area Absolute/Relative 12 M revenues dropped by 12.8%, 3Q19 saw limited sales erosion (-2.2%). This was to analize and report the compliance to the environmental regulation possible thanks to the recovery of China (+13.4%), a better trend in Turkey (- 3.1% vs. -46.1% in 1H19) and further growth in the US (+20.6%) pushed up by 10,000 Social Responsibilities market share and forex gains; 2) EBITDA margin improved, even on adjusted Does the company publish a separated Sustainability report? Yes 9,000 basis, due to a better product mix and further reduction of services costs; 3) Does the company have a Chief SRI/CSR officer (or a committee)? 8,000 Smart Gas Metering continued to grow (+12.7% in the quarter) and should easily Yes reach EUR90 million revenues in the full year; 4) The bottom line benefitted from Does the Chief SRI/CSR officer votes in any of the committee? 7,000 Yes EUR3.7 million of non-recurring fiscal benefit related to the release of costs Is the Investor Relation officer a different person from CFO (or 6,000 accounted in 2017-18 for the fair value of the outstanding warrants. Net debt other officers)? Yes was also below our estimates but this is due to SIT’s decision to postpone to Is the ESG strategy integrated in the Business Plan (or in the group 2020-21 the investments for the new laboratories and headquarter. Following strategy)? Yes 3Q19 results, the company slightly improved its guidance anticipating EBITDA growing at a mid-single digit rate and a further net debt reduction. Does the company have an ethical code? Yes SIT S.p.A. FTSE Italia All-Share Percentage of female directors 22.2% (2 out of 9)
Source: FactSet How is the cybersecurity issue managed? The group recently updated the antivirus instruments in order to prevent cyberattacks and strengthen the firewall Graph Shareholders’ Structure SWOT Analysis Free Float; Strengths Weaknesses • Market leader in the Heating market (50% market share worldwide) • Declining Heating market (-2.5% in 9M19) after many years of growth 25,9% • Limited exposure to Italy (35% of sales in 2018) • Large component of goodwill (42% of capital employed) • High and stable profitability despite the economic crisis • Lengthy time to market for new products due to testing and homologation
Treasury ; 0,7% SIT Opportunities Threats Technol • Fast growth of smart gas metering business • Regulatory risk ogies; • New products and higher share of wallet for Heating • Currency fluctuations (in particular GBP and USD) 73,4% • Potential acquisitions • Potential custom duties in the US and Brexit
Source: Company data
Servizio Studi – Equity Research 36
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
SIT
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 359.69 350.57 358.03 365.99 ROE 19.5% 12.6% 10.3% 11.4% EBITDA 43.82 45.93 48.69 51.60 Net Fin. Debt / Equity (x) 0.6 0.5 0.4 0.2 EBITDA margin 12.2% 13.1% 13.6% 14.1% Net Fin. Debt / EBITDA (x) 1.6 1.4 1.1 0.7 EBIT 23.96 22.93 23.49 25.80 Capex / Sales 8.3% 4.9% 7.6% 5.2% EBIT margin 6.7% 6.5% 6.6% 7.1% Pay Out Ratio 27.5% 40.8% 50.7% 46.0% Profit before taxes 32.23 17.93 19.99 23.50 Taxes -7.81 -0.78 -5.20 -6.11 Net Income 24.42 17.14 14.79 17.39 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 1.02 0.69 0.59 0.70 Growth Rates DPS 0.28 0.28 0.30 0.32 (%) 2018A 2019E 2020E 2021E BVPS 5.22 5.42 5.73 6.13 Growth Group Net Sales 11.2% -2.5% 2.1% 2.2% Growth EBITDA -0.6% 4.8% 6.0% 6.0% Growth EBIT -4.8% -4.3% 2.5% 9.8% Growth Net Profit 0.0% -29.8% -13.7% 17.6% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 10.0 9.5 11.0 9.3 P/OpCFPS 6.5 5.4 3.6 3.7 Balance Sheet P/BV 1.9 1.2 1.1 1.1 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 2.8% 4.3% 4.6% 4.9% Capital Employed 196.74 201.96 197.65 189.30 EV/Sales 0.9 0.7 0.6 0.6 Shareholders’ Equity 125.40 135.54 143.34 153.23 EV/EBITDA 7.3 5.1 4.6 3.9 Net Financial Debt / (Cash) 71.33 66.41 54.31 36.07 EV/EBIT 13.4 10.2 9.5 7.9
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
Servizio Studi – Equity Research 37
Sustainable Finance and Fintech: progress and innovation, 6 February 2020
Spactiv 03 February 2020 – 5:30 PM MARKET PRICE: 9.85
Luxury Goods Company profile Corporate Governance
Spactiv is a Special Purpose Acquisition Company (“SPAC”) and last September Data Does the company have a combined Chair/CEO? No announced the business combination with Betty Blue so that the newly-merged Percentage of independent directors 22% (2 out of 9) Shares outstanding (m): 9.3 company will be automatically listed under the name “Elisabetta Franchi”. Betty 22% (2 out of 9) Market Cap. (EURm): 91.6 Blue is a leading accessible luxury company operating in the womenswear market Does the company have loyalty shares? No
under the brand name Elisabetta Franchi. The deal attributes an equity valuation Enterprise Value (EURm): 92.3 Does major shareholders have a “shareholders pact” in place? No to Elisabetta Franchi of EUR195 million implying a 2019 Adjusted EV/ EBITDA of Are “poison pill” or “change of control” clauses adopted? Av. Daily Trad. Vol. (‘000): 16.43 8.2x and Adjusted EV/EBIT of 8.9x. We believe that the acquisition of Elisabetta No Reuters/Bloomberg: SPTV.MI SPTV IM Franchi is a great opportunity for Spactiv shareholders for the following reasons: Potential dilution from stock options outstanding + not yet granted? No 52-Week Range (EUR): 9.4 9.9 (1) the expected growth at 4-5% per year of the accessible luxury sector; (2) the CEO remuneration detail (fixed salary) EUR0.3 million strong brand recognition and competitive advantage in terms of “Made in Italy” Source: FactSet Chairman remuneration detail (fixed salary) style and quality of products; (3) the international growth potential; (4) the EUR0.35 million
development of the accessories business; (5) the attractive dividend yield. Is the share price included in the MBO criteria? No Performance Percentage of treasury shares 0% 1m 3m 12m
Absolute 0.5% 1.0% 5.0% Recent development Climate related risk Rel. to FTSE IT 1.8% -1.5% -11.6% In 2018, revenues increased by 5.9% to EUR115.6 million compared to EUR109.2 Has the company defined GHG-emissions targets? No No million posted in 2017, while in 1H19 sales grew by 4.4% reaching the EUR57.4 Graph Area Absolute/Relative 12 M million mark, reflecting an improved business and geographical positioning. How does the company assess climate-related risk? No No
Despite higher personnel costs (12.5% of sales in FY18 vs. 11.6% in Dec-17 for
11,500 new hiring and full speed of 2017 DOS openings), in 2018 EBITDA overcame Social Responsibilities 11,000 EUR22 million (vs. EUR20.4 million the previous year), implying a 18.6% margin. Does the company publish a separated Sustainability report? No 10,500 In 1H19, after an EUR1 million non-recurring write off related to trade and financial receivables vs. the controlled entity Betty Blue Asia Pacific Ltd., EBITDA Does the company have a Chief SRI/CSR officer (or a committee)? No 10,000 was up 20% to EUR9.7 million. Net Result slightly improved looking at the Does the Chief SRI/CSR officer votes in any of the committee? No 9,500 semester figure (EUR5.3 million in 1H19 vs. EUR5.0 million in 1H18) and was up No 18% considering the full year figure (EUR15.0 million in Dec-18 vs. EUR12.0 Is the Investor Relation officer a different person from CFO (or 9,000 Yes million in Dec-17). other officers)? Yes Is the ESG strategy integrated in the Business Plan (or in the group strategy)? No
Does the company have an ethical code? Yes Spactiv SpA FTSE Italia All-Share Yes Percentage of female directors Not disclosed yet Source: FactSet How is the cybersecurity issue managed? Not disclosed, but the company is fully compliant with EU GDPR regulation Graph Shareholders’ Structure SWOT Analysis Promotori; Strengths Weaknesses 3,2% • Well established brand name in the womenswear accessible luxury • Lack of presence in North America (only via e-commerce) and China • Healthy financial structure and strong free cash flow generation • Low exposure to accessories • Fast, agile production cycle, order delivery and concept store • Exposure to wholesale higher than competitors
Opportunities Threats Free float; • Foreign expansion, mainly in Europe • Dependence from Elisabetta Franchi’s leadership (systematic risk of fashion 96,8% • Reinforcing digital business, also through opening to e-tailers industry) • Product diversification opportunity in accessories • Execution risk in international strategy Source: Company data • Heavily exposed to domestic consumer spending
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Spactiv
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 115,6 123,0 129,2 141,3 ROE 29,2% 25,6% 25,2% 29,3% EBITDA 22,3 23,3 24,1 26,6 Net Fin. Debt / Equity (x) -0,18 -0,10 -0,09 -0,14 EBITDA margin 19,3% 19,0% 18,7% 18,8% Net Fin. Debt / EBITDA (x) -0,41 -0,25 -0,23 -0,31 EBIT 19,8 17,9 18,5 24,3 Capex / Sales 1,3% 0,5% 1,7% 1,8% EBIT margin 17,2% 14,5% 14,4% 17,2% Pay Out Ratio 99,8% 75,0% 75,0% 75,0% Profit before taxes 19,6 17,2 18,3 24,1 Taxes -4,6 -1,4 -2,5 -6,4 Net Income 15,0 15,8 15,9 17,7 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 0,74 0,78 0,78 0,87 Growth Rates DPS 0,74 0,46 0,49 0,65 (%) 2018A 2019E 2020E 2021E BVPS 2,52 2,40 2,60 2,98 Growth Group Net Sales 5,9% 6,4% 5,0% 9,4% Growth EBITDA 9,3% 4,4% 3,4% 10,5% Growth EBIT 10,5% -9,9% 3,8% 31,2% Growth Net Profit 18,1% -16,8% 6,6% 33,0% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 13,0 12,3 12,3 11,0 P/OpCFPS 4,4 4,3 4,0 3,6 Balance Sheet P/BV 3,8 4,0 3,7 3,2 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 7,7% 4,8% 5,1% 6,8% Capital Employed 42,1 43,9 48,1 52,3 EV/Sales 1,6 1,5 1,5 1,3 Shareholders’ Equity 51,4 48,9 52,8 60,6 EV/EBITDA 8,3 8,1 7,9 7,0 Net Financial Debt / (Cash) -9,3 -4,9 -4,7 -8,3 EV/EBIT 9,4 10,6 10,3 7,7
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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TraWell 03 February 2020 – 5:30 PM TARGET PRICE: 78.2 MARKET PRICE: 40.5
Airport Services Company profile Corporate Governance
Trawell is a leading service company specialising in luggage wrapping and tracing Data Does the company have a combined Chair/CEO? No for airline passengers. It operates in 56 airports with >500 million passengers per Percentage of independent directors Shares outstanding (m): 0.62 annum, in Italy (six airports including Rome), France (seven airports including 14.3% (1 out of 7) Market Cap. (EURm): 25.1 Paris), Portugal (five airports including Lisbon), Switzerland, Poland, Canada, the Does the company have loyalty shares? No
US (Miami), Russia, Estonia, Latvia, Lithuania, Kyrgyzstan, Thailand and Philippines Enterprise Value (EURm): Does major shareholders have a “shareholders pact” in place? No 32.8 managing about 160 wrapping machines with around 600 people. The average Are “poison pill” or “change of control” clauses adopted? Av. Daily Trad. Vol. (000): 2.1 duration of its concessions is 2.0 years. TraWell last August distributed as a No 118.5Reuters/Bloomberg: TRWL.MI TWL IM dividend 73.1% of the share capital of SOSTravel.com, (remaining a shareholder Potential dilution from stock options outstanding + not yet granted? No 52-Week Range (EUR): 40.5 118.5 with a stake of 11.1%) with a ratio of 7 SOSTravel.com shares every TraWell CEO remuneration detail (fixed salary) EUR0.65 million share. SOSTravel.com, which is listed on the AIM market, distributes several Source: FactSet Chairman remuneration detail (fixed salary) innovative services (luggage tracking, refund, lost & found concierge, travel info) EUR0.65 million
for airport passengers throughout the world. TraWell is 56.8% controlled by its Is the share price included in the MBO criteria? No Performance founder, Mr. Rudolph Gentile, and was listed on the AIM market in September Percentage of treasury shares 0% 1m 3m 12m 2013 and on Nasdaq in July 2019. In July TraWell finalized its stock reverse split
Absolute -43.7% -52.6% -55.4% with a 1:25 ratio. Climate related risk Rel. to FTSE IT -43.4% -52.3% -56.3% Has the company defined GHG-emissions targets? No Recent development Graph Area Absolute/Relative 12 M TraWell reported poor results in 1H19: despite the buoyant sales growth (up How does the company assess climate-related risk? Not disclosed 22.6%), driven by the consolidation of PackandFly and Care4Bag, EBITDA 110,000 dropped by 65%. EBITDA was depressed by EUR1.2 million of non-recurring Social Responsibilities costs and by lower volumes in Fiumicino as around 30% of the traffic was moved 90,000 Does the company publish a separated Sustainability report? to Terminal 1 (from Terminal 3) where TraWell is not present. Net profit No 70,000 reached EUR1 million only thanks to EUR1.7 million coming from the write up Does the company have a Chief SRI/CSR officer (or a committee)? No
of its stake in SOSTravel.com. Against this backdrop, TraWell immediately 50,000 Does the Chief SRI/CSR officer votes in any of the committee? No started several cost-cutting actions and closed loss-making concessions, and Is the Investor Relation officer a different person from CFO (or 30,000 profitability should recover next year and accelerate in 2021 when TraWell plans other officers)? Yes to finalise new acquisitions. The company updated its business plan, deeply cutting 2019-21 forecasts: EBITDA margin should reach 7.6% this year Is the ESG strategy integrated in the Business Plan (or in the group No (compared with 15% in 2018) progressively growing to 14.7% in 2021 while net strategy)?
profit expectations have been slashed by around 50% in 2019-20 and by 32% in Does the company have an ethical code? Yes TraWell Co S.p.A. FTSE Italia All-Share 2021. In addition, TraWell should not distribute dividends in the next three years. Percentage of female directors 14.3% (1 out of 7)
Source: FactSet How is the cybersecurity issue managed? Not disclosed
Graph Shareholders’ Structure SWOT Analysis Free Strengths Weaknesses Akhmedov e Float; • Leading position in the wrapping sector • Average duration of concessions is now relatively low (2.0 years) • Wide geographical diversification • Goodwill (EUR22.2 million at June-19) could be written down Fedoseev; 22,8% • Launch of innovative products with higher value added • No dividend should be distributed in the next three years 4,8%
RG Marchin Opportunities Threats Holding; Inv.; • Development in Russia following the acquisition of PackandFly • Currency fluctuations (mainly USD and RUB) 56,8% 6,5% • Further air passengers growth expected in the coming years • Strong competition for new concessions AC Hold; • Integration with Care4Bag • Geopolitical risk (e.g. terrorism attacks) 9,2%
Source: Company data
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TraWell
Income Statement Financial Ratios (EURm, %) 2018A 2019E 2020E 2021E (%) 2018A 2019E 2020E 2021E Net Revenues 43.1 46.4 48.7 61.7 ROE 8.1% 4.4% 6.8% 13.3% EBITDA 6.5 3.5 5.8 9.3 Net Fin. Debt / Equity (x) 0.1 0.1 0.0 0.0 EBITDA margin 15.0% 7.5% 11.9% 15.0% Net Fin. Debt / EBITDA (x) 0.3 1.0 0.2 0.1 EBIT 5.0 1.9 4.5 7.9 Capex / Sales 0.3% 4.0% 3.5% 3.5% EBIT margin 11.6% 4.1% 9.3% 12.9% Pay Out Ratio 0.0% 0.0% 0.0% 0.0% Profit before taxes 4.6 3.0 4.1 7.5 Taxes -0.9 -0.9 -1.2 -2.3 Net Income 1.9 1.1 1.7 4.1 Per Share Data (EUR) 2018A 2019E 2020E 2021E EPS 3.11 1.74 2.81 6.67 Growth Rates DPS 0.00 0.00 0.00 0.00 (%) 2018A 2019E 2020E 2021E BVPS 38.26 39.12 41.04 50.04 Growth Group Net Sales 41.2% 7.7% 5.1% 26.6% Growth EBITDA 35.4% -45.8% 66.0% 59.6% Growth EBIT 28.4% -62.3% 141.0% 74.8% Growth Net Profit 6.7% -44.1% 61.5% 137.7% Stock Market Ratios (x) 2018A 2019E 2020E 2021E P/E 30.6 23.3 14.4 6.1 P/OpCFPS 16.7 9.1 5.0 4.3 Balance Sheet P/BV 2.5 1.0 1.0 0.8 (EURm) 2018A 2019E 2020E 2021E Dividend Yield (%) 0.0% 0.0% 0.0% 0.0% Capital Employed 28.3 30.9 30.5 36.7 EV/Sales 1.6 0.7 0.6 0.5 Shareholders’ Equity 23.7 24.3 25.4 31.0 EV/EBITDA 10.5 9.4 5.2 3.3 Net Financial Debt / (Cash) 1.8 3.4 1.2 1.3 EV/EBIT 13.6 17.4 6.7 3.8
* Priced on 31 January 2020 Source: Company data, UBI Banca estimates 2018 Stock Market Ratios based on average 2018 price
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Disclaimer The information provided and the opinions expressed in this Report are based upon information and data provided to the public by the Companies or news otherwise public, and refers to the date of publication of the Report. The Analysts Declaration sources (press publications, financial statements, current and periodic releases, as well as meetings and telephone conversations with the Companies’ representatives) are believed to be reliable and in good faith, but no This research report (the “Report”) has been prepared by Marco Cristofori, Massimo Vecchio, Oriana Cardani and representation or warranty, express or implied, is made by UBI Banca as to their accuracy, completeness or Dario Fasani on behalf of UBI Banca S.p.A. (“UBI Banca”) in the context of the ancillary service provided by UBI Banca correctness. Past performance is not a guarantee of future results. 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f. Marco Cristofori is a member of AIAF; Massimo Vecchio is member of AIAF’s Directive Counsel; Oriana Cardani is a member of For further information please see UBI Banca’s website (www.ubibanca.com/equity-research - “Informativa sintetica AIAF, CFA charterholder. sull’attività di ricerca”) and (www.ubibanca.com/Mifid - “Policy sintetica conflitti di interessi”). More details about the conflicts of interests’ policy will be provided by UBI Banca upon request. General disclosure Disclosure of interests and conflicts of interests pursuant to Delegated Regulation 2016/958/EU This Report is for information purposes only. This Report (i) is not, nor may it be construed, to constitute, an offer for In relation to the Companies the following interest/conflict of interest have been found: sale or subscription or of a solicitation of any offer to buy or subscribe for any securities issued or to be issued by the Companies, (ii) should not be regarded as a substitute for the exercise of the recipient’s own judgement. In addition, UBI Banca act as Specialist for Elettra Investimenti, First Capital, Gefran, Leone Film Group, LU-VE, the information included in this Report may not be suitable for all recipients. Therefore the recipient should conduct Spactiv, TraWell; their own investigations and analysis of the Companies and securities referred to in this document, and make their UBI Banca acts as Corporate broker for Centrale del Latte d’Italia, Grifal, MailUp, NB Aurora, Notorious own investment decisions without undue reliance on its contents. Neither UBI Banca, nor any other company Pictures, SIT; belonging to the UBI Banca Group, nor any of its directors, managers, officers or employees, accepts any direct or indirect liability whatsoever (in negligence or otherwise), and accordingly no direct or indirect liability whatsoever UBI Banca acts as Sponsor (or equivalent) for Elettra Investimenti, First Capital, Spactiv; shall be assumed by, or shall be placed on, UBI Banca, or any other company belonging to the UBI Banca Group, or UBI Banca has delivered corporate finance sevices to CNH Industrial, NEXI and SIT in the last 12 months any of its directors, managers, officers or employees, for any loss, damage, cost, expense, lower earnings howsoever arising from any use of this Report or its contents or otherwise arising in connection with this Report. UBI Banca may have long or short positions not exceeding the threshold of 0.5 % of the total issued share capital of the issuer.
On the basis of the checks carried out no other interest/conflict of interest arose.
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RESEARCH DEPARTMENT Nomad - Key Executives
Head of Research Department Marco Germano +39.02.7781 4651 Giovanni Barone [email protected] [email protected] Gisella Barisone +39.02.7781 4618 [email protected] Macroeconomic and Financial Industry Research Market Research Equity Research Giulio Greco +338.6235158 Enza De Vita Francesca Pascali Marco Cristofori [email protected] [email protected] [email protected] +39.02.6275 3015 [email protected] Anna Cristina Visconti Vincenzo Petrignano [email protected] [email protected] Massimo Vecchio Head of Global Markets +39.02.6275 3016 Paolo Manzoni [email protected] Alessandro Michele Ravogli [email protected] [email protected] Oriana Cardani, CFA Quantitative Analysis Paolo Leoni +39.02.6275 3017 Solutions Sales [email protected] [email protected] Francesco Martinelli Andrea Paolo Martini [email protected] Lorenzo Biagioli Dario Fasani +39.02.7781 4341 [email protected] +39.02.6275 3014 [email protected] [email protected] Debora Palmieri Roberta Pupeschi [email protected] +39.02.7781 4682 [email protected]
Stefano Ottavi +338.6639433 [email protected]
Laura Katherine Milic +39.02.7781 4616 [email protected]
Gabriele Edoardo Banfi +39.02.77.81 4344 [email protected]
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