Abitare in Outperform

Milan, 15 June 2021 Italian Equity Research – New Coverage ABITARE IN OUTPERFORM Sector: Consumers Price: Eu58.00 - Target: Eu74.50 At Home With Innovation An innovative player in the Milanese residential arena: AbitareIn specialises in the Carlo Maritano +39-02-77115.358 development of residential property projects via an innovative operational strategy [email protected] and extensive use of technology. The company carries out urban redevelopment projects that involve the purchase and subsequent demolition of disused or abandoned properties in the City of Milan, so as to build new housing complexes on the cleared land and sell residential units directly to private customers, in particular Stock Rating families seeking to buy their own home. Unlike other sector operators, the company Rating: OUTPERFORM (New Coverage) focuses exclusively on the activities with the highest added value in the value chain, Target Price (Eu): 74.50 (New Coverage) while outsourcing less profitable activities (construction). Technology as an enabler to offer tailor-made solutions: AbitareIn differs from other firms on the market due to the very high degree of product customisation to ABITARE IN - 12M Performance meet customer requirements, made possible by the high degree of innovation the company offers, from its IT-driven production process using the Building 60 Information Modelling (BIM) software platform to advanced customer management thanks to the Salesforce CRM platform, which enables computerised management 55 of marketing and sale activities. In addition, the company reacted to the outbreak 50 of the pandemic by further accelerating the adoption of innovative technologies, which led to the launch of the new e-commerce platform in 2020, which offers the 45 client an increasingly secure, informed, and complete buying experience. 40 Why Milan? To date, AbitareIn has focused its business solely on the Milan residential market (although entry into new markets cannot be ruled out in the 35 future) due to its dynamism and constant evolution. Indeed, in the 5 years prior to g-20 a-20 o-20 d-20 f-21 a-21 Covid-19, the property market in the City of Milan followed a positive trend, mainly due to the steady rise in the population, which led to a 30% increase in prices per ABITARE IN ABITARE IN Rel. to FTSE All Shares (Reb.) m2 in 5 years and a steady rise in transactions, at an average rate of 10% per year between 2014 and 2019. Naturally, between 2020 and the start of 2021, the Milan Stock Data property market, like the national one, was hit by the outbreak of the pandemic, Reuters code: ABT.MI but data starting from 2H20 show the resilience and responsiveness of the sector to the crisis. Milan remains one of the cheapest global financial centres for residential Bloomberg code: ABT IM real estate and expected demographic and economic trends suggest a robust Performance 1M 3M 12M recovery in demand for new homes in the coming years. [email protected] Absolute 12.8% 19.3% 45.4% Initiating coverage with an OUTPERFORM recommendation; target Eu74.5. We Relative 8.6% 11.7% 8.3% appreciate AbitareIn, as the company stands out from the crowd thanks to its 12M (H/L) 58.00/39.00 unique offering and propensity for technological innovation in a sector typically 3M Average Volume (th): 3.35 anchored in tradition. We believe the company’s solid pipeline (the Group is the owner or promissory purchaser of areas totalling 251,000m2) puts it in a good Shareholder Data position to take advantage of the recovery in demand after the setback caused by No. of Ord shares (mn): 3 the outbreak of the pandemic. We begin our coverage with a target price of Eu74.5, partially factoring in the expected boost from the launch of the Homizy project Total no. of shares (mn): 3 which we believe is not currently incorporated in the market price. Our target offers Mkt Cap Ord (Eu mn): 150 29% upside to the current price, dictating an OUTPERFORM rating. Total Mkt Cap (Eu mn): 150 Mkt Float - Ord (Eu mn): 66 Mkt Float (in %): 44.0% Key Figures & Ratios 2019A 2020A 2021E 2022E 2023E Main Shareholder: Sales (Eu mn) 45 73 125 176 195 EBITDA Adj (Eu mn) 11 9 27 46 51 Gozzini Luigi Francesco 23.2% Net Profit Adj (Eu mn) 6 9 17 30 34 EPS New Adj (Eu) 2.496 3.546 6.583 11.682 13.005 Balance Sheet Data DPS (Eu) 0.000 0.000 0.000 0.000 0.000 Book Value (Eu mn): 75 EV/EBITDA Adj 12.1 15.3 6.1 4.0 3.5 BVPS (Eu): 29.08 EV/EBIT Adj 12.7 16.8 6.3 4.1 3.6 P/BV: 2.0 P/E Adj 23.2 16.4 8.8 5.0 4.5 Net Financial Position (Eu mn): -13 Div. Yield 0.0% 0.0% 0.0% 0.0% 0.0% Enterprise Value (Eu mn): 163 Net Debt/EBITDA Adj 2.8 3.0 0.5 0.7 0.6 The reproduction of the information, recommendations and research produced by Intermonte SIM contained herein, and any of its parts, is strictly prohibited. None of the contents of this document may be shared with third parties without Company authorization. Please see important disclaimer on the last page of this report Intermonte SIM S.p.A. Milan 20122 (Italy) - Galleria de Cristoforis, 7/8 - phone: +39-02-77115.1 - fax: +39-02-77115.300 New York (US) - Brasil Plural Securities LLC - 545 Madison Av. 8th Floor, NY 10022 –phone: +1 212 388 5600 www.intermonte.it Disclosure time 15/06/2021 07:40:29 ABITARE IN – Key Figures Profit & Loss (Eu mn) 2018A 2019A 2020A 2021E 2022E 2023E Sales 49 45 73 125 176 195 EBITDA 4 11 9 27 46 51 EBIT 4 11 8 26 45 50 Financial Income (charges) -0 -1 -2 -2 -2 -2 Associates & Others 0 0 5 0 0 0 Pre-tax Profit 4 9 11 24 43 48 Taxes -1 -3 -2 -7 -13 -14 Tax rate 30.1% 32.6% 18.1% 30.0% 30.0% 30.0% Minorities & Discontinued Operations 0 0 0 0 0 0 Net Profit 3 6 9 17 30 34 EBITDA Adj 4 11 9 27 46 51 EBIT Adj 4 11 8 26 45 50 Net Profit Adj 3 6 9 17 30 34 Per Share Data (Eu) 2018A 2019A 2020A 2021E 2022E 2023E Total Shares Outstanding (mn) - Average 3 3 3 3 3 3 Total Shares Outstanding (mn) - Year End 3 3 3 3 3 3 EPS f.d 1.001 2.496 3.546 6.583 11.682 13.005 EPS Adj f.d 1.001 2.496 3.546 6.583 11.682 13.005 BVPS f.d 15.970 18.580 22.496 29.078 40.760 53.765 Dividend per Share ORD 0.000 0.000 0.000 0.000 0.000 0.000 Dividend per Share SAV 0.000 0.000 0.000 0.000 0.000 0.000 Dividend Payout Ratio (%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Cash Flow (Eu mn) 2018A 2019A 2020A 2021E 2022E 2023E Gross Cash Flow 6 7 10 18 31 35 Change in NWC -35 -28 -4 -3 -51 -30 Capital Expenditure -6 -3 -1 -1 -1 -1 Other Cash Items 0 0 0 0 0 0 Free Cash Flow (FCF) -35 -23 5 13 -21 4 Acquisitions, Divestments & Other Items 0 -0 -4 0 0 0 Dividends 0 0 0 0 0 0 Equity Financing/Buy-back 26 0 5 0 0 0 Change in Net Financial Position -9 -23 6 13 -21 4 Balance Sheet (Eu mn) 2018A 2019A 2020A 2021E 2022E 2023E Total Fixed Assets 7 9 11 11 12 12 Net Working Capital 47 74 78 82 133 162 Long term Liabilities -4 -4 -5 -5 -5 -5 Net Capital Employed 50 79 84 88 139 169 Net Cash (Debt) -9 -32 -26 -13 -34 -30 Group Equity 41 47 58 75 106 139 Minorities 0 0 0 0 0 0 Net Equity 41 47 58 75 105 139 [email protected] Enterprise Value (Eu mn) 2018A 2019A 2020A 2021E 2022E 2023E Average Mkt Cap 79 105 110 150 150 150 Adjustments (Associate & Minorities) 0 0 0 0 0 0 Net Cash (Debt) -9 -32 -26 -13 -34 -30 Enterprise Value 88 137 136 163 184 180 Ratios (%) 2018A 2019A 2020A 2021E 2022E 2023E EBITDA Adj Margin 8.7% 25.5% 12.1% 21.5% 26.1% 26.2% EBIT Adj Margin 8.3% 24.2% 11.1% 20.8% 25.6% 25.7% Gearing - Debt/Equity 21.5% 67.4% 44.8% 16.9% 31.8% 21.4% Interest Cover on EBIT 9.5 7.9 3.9 15.3 24.9 24.3 Net Debt/EBITDA Adj 2.1 2.8 3.0 0.5 0.7 0.6 ROACE* 13.2% 16.8% 9.9% 30.1% 39.6% 32.5% ROE* 9.7% 14.4% 17.5% 25.7% 33.6% 27.6% EV/CE 2.8 2.1 1.7 1.9 1.6 1.2 EV/Sales 1.8 3.1 1.9 1.3 1.0 0.9 EV/EBITDA Adj 20.7 12.1 15.3 6.1 4.0 3.5 EV/EBIT Adj 21.6 12.7 16.8 6.3 4.1 3.6 Free Cash Flow Yield -23.0% -15.2% 3.6% 8.9% -13.9% 2.5% Growth Rates (%) 2018A 2019A 2020A 2021E 2022E 2023E Sales 429.4% -9.1% 64.0% 71.1% 40.4% 11.2% EBITDA Adj 79.1% 166.5% -22.2% 203.5% 71.0% 11.3% EBIT Adj 74.7% 164.6% -25.1% 221.5% 73.0% 11.5% Net Profit Adj 125.8% 149.3% 44.3% 85.7% 77.5% 11.3% EPS Adj 125.8% 149.3% 42.1% 85.7% 77.5% 11.3% DPS *Excluding extraordinary items Source: Intermonte SIM estimates 2 Disclosure time 15/06/2021 07:40:29 Contents The company at a glance .............................................................................................

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