CREMONINI
EQUITY RESEARCH
BUY (from HOLD)
Update December 7, 2007
Italy: Holdings 2005 2006 2007E 2008E 2009E
Sales
EBITDA
EBIT
EV/EBITDA
EV/EBIT
P/E (adj.)
Eur m
Eur m
Eur m
Net Profit EPS (adj.) DPS EV/Sales Eur m
Eur
Eur
X
X
x
X
Yield %
2,129 2,349 2,488 2,080 2,137
117.1 139.1 150.1 135.1 141.4
71.5 87.8 95.4 95.0 101.2
40.6 11.6 6.6 58.4 24.8
0.112 0.090 0.051 0.173 0.192
0.23 0.07 0.07 0.07 0.08
0.46 0.46 0.49 0.45 0.44
8.4 7.7 8.1 6.9 6.7
13.7 12.3 12.7 9.8 9.3
18.2 24.3 51.1 15.0 13.5
11.1% 3.2% 2.7% 2.7% 3.1%
Source: Company data and. Banca Aletti & C S.p.A. estimates.
Value enhancing deal on meat production Share Price 6/12/07 (Eur):
2.60
Tot Mkt Cap. (Eur m):
369
Tot N° of Shares (m):
141.8
Min-Max Ord.(52 wks Eur):
2.00-2.86
Price Target Ord. (Eur):
3.1
Major Shareholders: Cremonini Luigi
57.3%
Treasury Shares
9.3%
Free Float
33.4%
Cremonini vs. STAR (-1Y) 7/12 /0 7 2 .9 0
2 .8 0
2 .7 0
2 .6 0
2 .5 0
2 .4 0
2 .3 0
2 .2 0
2 .1 0
2 .0 0
1 .9 0 D C R EMO N IN I
J
F
M
A
M
J
J
A
S
O
N
MILAN MIB AL L STAR S - PR IC E IN D EX Sou r c e : Th oms on D ata s tr ea m
.
Andrea Bonfà (HoR) Phone: +39-0243358.194
[email protected]
The deal values the EV of meat production Eur 600m: Cremonini announced yesterday a deal with the Brazilian JBS, the world largest meat producer, with yearly sales of R$7.5bn and over 40k employees. The term of the deal foresees: 1) the transfer of the cured meat added value business Montana from Cremonini Spa, the group holding, to Inalca Spa, the beef production unit, for a consideration of Eur 70m. The operation will increase the net debt of the meat production from about Eur 300m to about Eur 370m and decrease of a correspondent amount that of the holding from about Eur 140m to about Eur 70m; 2) JBS will acquire 50% of Inalca for a consideration of Eur 225m of which 46.4% trough a capital increase of Eur 210m and the residual 3.6% by a direct purchase of Cremonini’s shares for a consideration of Eur 15m, 3) Cremonini Spa, will subscribe the residual capital increase of Eur 10m taking the total capital increase at Inalca level to Eur 220m; 4) on top of the above, the agreement foresees a earn-out of Eur 65m in 2011e if Inalca will reach an average EBITDA of Eur 75m over 2008e-2010e. EBIDA growth should also reflect the acquisitions potential that the company might implement thanks to the strengthening of the balance sheet. The deal should be closed by January 2008e. Finally, and this is important in our view, Cremonini will have a put call between 2011e and 2018e, to sell the residual 50% of Inalca at 5x to 10x EBITDA, accordingly to the level of the EBITDA itself. Assuming an EBITDA of around Eur90m in 2011e or an EBITDA margin of around 8% (today 5%), we value the NPV (WACC 8.5%) of the residual 50% between Eur 178m (5x EBITDA, no earn out) and Eur 407m (10x EBITDA plus earn-out). The rationale of the deal seems very sound: a) the two companies do not overlap geographically with JBS present in Latin America, USA and Australia and Cremonini present in Europe, Africa and Russia; b) JBS will access Cremonini’s clients and production technologies while Cremonini will access JBS sources of meat supplies. Main valuation implication: rating BUY from HOLD and PT of Eur 3.1 from Eur 2.3. The deal strongly enhance the value of the meat production business that we were valuing at EV level at around Eur 350m or 0.3x book. The reason for such a low valuation laid in the very low profitability (about 2% EBIT margin) which coupled with important capex were pointing to a value destroying activity. At the same time the deal will allow Cremonini to consolidate the meat production at 50% in 2008e enhancing traditional multiples. For the group we now value on our 2008e SOP, 50% of the meat at Eur 267m or the NPV of the 2011e EBITDA at 7.5x with no earn out as visibility on the latter is still modest, the catering at about 6x or 15% discount to Autogrill and Marr at market. Net debt is now around Eur 205m or the previous Eur 500 adjusted for the capital increase in Inalca of Eur 220 and Eur 80m of debt deconsolidation. With a still conservative holding discount of 20%, we derive a Price Target of Eur 3.1 or a 20% upside (see SOP next page). Rating from HOLD to BUY. The best case scenario, would assume the disposal of the beef at 10x EBITDA, with earn out and holding discount at 15% or Eur 4.2 of fair value. Main risks is the non closure of the above mentioned deal by January 2008e.
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Cremoni: company profile Activities: Cremonini is a holding involved in three activities: meat production (46% sales, Inalca and Montana), distribution to foodservice (40% sales, MARR) and commercial catering on highways, trains and railway stations (14%, Moto and Express Chef). 87% of the meat production is beef slaughtering. On this, Inalca is domestic leader and one of the largest European producer with over 35% of its revenues exported in Europe, Eastern Europe and Western Africa. In particular, Inalca is market leader in Italy with about 25% market share and European leader in tinned meat with over 200m tins sold yearly. Cured meat accounts for 13% of the production business and is carried out trough Montana Alimentari, the second player in its sector in Italy with 16% market share. MARR is the Italian leader in the foodservice market with a 28% market share in the specialized distributors to the foodservice sector segment and is over five time larger than the first follower. MARR’s product range is made of 18,000 items of which 10,000 food and 8,000 non food while its client base is of 30,000 units. About 62% of sales are made with street market clients (restaurants, hotels etc), 23% with wholesale clients and 15% with national accounts. The largest product category is seafood accounting for roughly 39% of sales, followed by grocery with 35% and meat with 23%. Private labels are important representing about 25% of sales while other products account for 75%. Marr distribution network is based on 22 distribution centers, four cash & carry, four agents with warehouses and over 500 third party vehicles driven by independent drivers. MARR was listed on the Star segment of the Italian stock exchange on June 21 st at a price of EUR 6.65. The catering business is based on concessions and is mainly focused on Italian railway stations (leader in Italy with almost 36% market share), on-board trains (second European player after Wagon Lits and sole concessionary for the Italian railways, 25% market share) and more recently on highways through Moto S.p.A (100% owned since July ’06). Moto is the second largest Italian motorway catering operator with a market share of more than 6%.
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Cremonini: Aletti Universe E N T E R P R IS E V A L U E (E U R m ) 2004 2005 2006 2007e 2008e 2009e S h a re P ric e 1 .5 4 2 .0 4 2 .2 0 2 .6 0 2 .6 0 2 .6 0 O u ts . N . o f S h a re s ('0 0 0 ) 1 4 1 ,8 2 0 1 4 1 ,8 2 0 1 4 1 ,8 2 0 1 4 1 ,8 2 0 1 4 1 ,8 2 0 1 4 1 ,8 2 0 T o ta l M a rk e t C a p 2 1 8 .3 2 8 9 .3 3 1 1 .3 3 6 8 .7 3 6 8 .7 3 6 8 .7 O th e rs 221 178 182 242 245 247 E V (a d j.) 871 979 1 ,0 7 8 1 ,2 1 2 934 941 P R O F IT & L O S S (E U R m ) S a le s 1 ,9 9 3 2 ,1 2 9 2 ,3 4 9 2 ,4 8 8 2 ,0 8 0 2 ,1 3 7 E B IT D A 1 1 4 .2 1 1 7 .1 1 3 9 .1 1 5 0 .1 1 3 5 .1 1 4 1 .4 D e p re c ia tio n & P ro v is io n s -4 3 .4 -4 5 .6 -5 1 .3 -5 4 .7 -4 0 .1 -4 0 .2 E B IT A 7 0 .7 7 1 .5 8 7 .8 9 5 .4 9 5 .0 1 0 1 .2 G W A m o rtis a tio n 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 E B IT 7 0 .7 7 1 .5 8 7 .8 9 5 .4 9 5 .0 1 0 1 .2 N e t F in a n c ia l In te re s t -1 7 .5 -2 1 .4 -2 8 .9 -4 0 .0 -2 6 .0 -2 6 .0 O th e r F in a n c ia ls -5 .9 0 .6 -3 .8 -3 .1 0 .0 0 .0 E x tra o rd in a ry Ite m s -1 .4 2 6 .1 0 .4 0 .0 3 8 .0 0 .0 E a rn in g B e fo re T a x (E B T ) 4 5 .9 7 6 .8 5 5 .4 5 2 .3 1 0 7 .0 7 5 .2 Tax -2 4 .9 -2 4 .3 -2 9 .3 -2 9 .8 -3 1 .6 -3 2 .3 T a x ra te 54% 32% 53% 57% 30% 43% A s s o c ia te s 0 .0 0 .0 0 .0 0 .0 0 .0 0 .0 M in o ritie s -1 0 .2 -1 1 .9 -1 4 .5 -1 5 .9 -1 7 .0 -1 8 .0 N e t P ro fit (re p o rte d ) 1 0 .8 4 0 .6 1 1 .6 6 .6 5 8 .4 2 4 .8 N e t P ro fit (a d j.) 1 0 .8 1 4 .5 1 1 .6 6 .6 2 2 .3 2 4 .8 P E R S H A R E D A T A (E U R ) E P S (re p o rte d ) 0 .0 7 6 0 .2 8 6 0 .0 8 2 0 .0 4 6 0 .4 1 2 0 .1 7 5 E P S (a d j.) 0 .0 8 4 0 .1 1 2 0 .0 9 0 0 .0 5 1 0 .1 7 3 0 .1 9 2 CFPS 0 .3 8 2 0 .6 0 7 0 .4 4 4 0 .4 3 2 0 .6 9 4 0 .4 5 9 BVPS 1 .3 5 5 2 .1 0 9 1 .9 9 2 2 .0 1 6 2 .3 5 8 2 .4 6 3 DPS 0 .0 5 0 0 .2 2 6 0 .0 7 0 0 .0 7 0 0 .0 7 0 0 .0 8 0 K E Y M A R K E T R A T IO S E V /S a le s 0 .4 4 0 .4 6 0 .4 6 0 .4 9 0 .4 5 0 .4 4 E V /E B IT D A 7 .6 8 .4 7 .7 8 .1 6 .9 6 .7 E V /E B IT 1 2 .3 1 3 .7 1 2 .3 1 2 .7 9 .8 9 .3 P /E (a d j) 1 8 .3 1 8 .2 2 4 .3 5 1 .1 1 5 .0 1 3 .5 P /C F 4 .0 3 .4 4 .9 6 .0 3 .7 5 .7 P /B V 1 .1 1 .0 1 .1 1 .3 1 .1 1 .1 D ivid e n d Y ie ld (G ro s s ) 3 .2 % 1 1 .1 % 3 .2 % 2 .7 % 2 .7 % 3 .1 % M A R G IN S A N D R A T IO S S a le s g ro w th 1 1 .6 % 6 .8 % 1 0 .3 % 5 .9 % -1 6 .4 % 2 .8 % E B IT D A g ro w th -3 .0 % 2 .6 % 1 8 .8 % 7 .9 % -1 0 .0 % 4 .6 % E B IT g ro w th 1 4 .5 % 1 .1 % 2 2 .8 % 8 .6 % -0 .4 % 6 .5 % E P S g ro w th 536% 3 3 .5 % -1 9 .4 % -4 3 .7 % 240% 1 1 .3 % E B IT D A m a rg in 5 .7 % 5 .5 % 5 .9 % 6 .0 % 6 .5 % 6 .6 % E B IT m a rg in 3 .5 % 3 .4 % 3 .7 % 3 .8 % 4 .6 % 4 .7 % ROCE 4 .4 % 3 .8 % 4 .0 % 3 .8 % 6 .5 % 6 .6 % D e b t / E q u ity 1 .8 1 .4 1 .7 1 .7 0 .8 0 .7 In te re s t C o v e r 6 .5 5 .5 4 .8 3 .8 5 .2 5 .4 P a yo u t R a tio 66% 79% 85% 151% 17% 46% N W C o n s a le s 9% 13% 12% 10% 8% 8% O p F C F /M k t. C a p 2 7 .9 % -1 4 .8 % -0 .1 % 6 .3 % 3 5 .4 % 3 .0 % C A S H F L O W (E U R m ) N e t P ro fit (re p o rte d ) + M in o ritie s 2 1 .0 5 2 .5 2 6 .1 2 2 .5 7 5 .4 4 2 .8 N o n c a s h ite m s 4 3 .4 4 5 .6 5 1 .3 5 4 .7 4 0 .1 4 0 .2 C a s h F lo w 6 4 .5 9 8 .1 7 7 .5 7 7 .2 1 1 5 .5 8 3 .0 C h a n g e in N e t W o rk in g C a p ita l 3 4 .4 -9 2 .8 -1 2 .8 3 2 .9 8 2 .2 -4 .8 C apex -3 8 .0 -4 8 .0 -6 5 .0 -8 7 .0 -6 7 .0 -6 7 .0 O p e r. F re e C a s h F lo w (O p F C F ) 6 0 .9 -4 2 .8 -0 .3 2 3 .1 1 3 0 .7 1 1 .2 D is p o s a ls /(A c q u is itio n s ) -1 2 .0 -0 .4 -3 2 .6 -1 2 .5 1 8 2 .0 0 .0 D ivid e n d s -1 9 .4 -7 .1 -3 2 .1 -9 .9 -9 .9 -9 .9 O th e rs (in c l. C a p ita l In c re a s e ) -1 0 .0 -2 7 .4 -1 0 .1 -1 7 .9 -2 2 .2 -5 .3 F re e C a s h F lo w 1 9 .5 -7 7 .6 -7 5 .0 -1 7 .3 2 8 0 .6 -4 .1 N O PLAT 3 1 .8 3 7 .2 4 1 .4 4 1 .0 5 4 .1 5 7 .7 B A L A N C E S H E E T (E U R m ) N e t T a n g ib le A s s e ts 3 9 5 .6 5 6 4 .1 5 9 5 .2 6 3 7 .0 4 9 1 .4 5 2 7 .7 N e t In ta n g ib le A s s e ts 1 0 4 .7 1 2 8 .1 1 4 7 .2 1 4 7 .2 1 4 7 .2 1 4 7 .2 N e t F in a n c ia l A s s e ts & O th e rs 3 9 .7 1 1 .1 1 2 .2 2 4 .7 2 4 .7 2 4 .7 T o ta l F ix e d A s s e ts 5 4 0 .0 7 0 3 .3 7 5 4 .7 8 0 9 .0 6 6 3 .4 6 9 9 .7 N e t W o rk in g C a p ita l 1 8 4 .7 2 7 7 .5 2 9 0 .3 2 5 7 .4 1 7 5 .3 1 8 0 .1 T o ta l N e t A s s e ts 7 2 4 .7 9 8 0 .8 1 ,0 4 5 .0 1 ,0 6 6 .4 8 3 8 .6 8 7 9 .8 S h a re h o ld e rs E q u ity 1 9 2 .2 2 9 9 .1 2 8 2 .5 2 8 6 .0 3 3 4 .4 3 4 9 .3 M in o ritie s e q u ity 5 1 .4 6 4 .7 6 6 .2 5 8 .0 7 2 .2 9 0 .2 N et D ebt 4 3 1 .6 5 1 2 .1 5 8 4 .2 6 0 1 .5 3 2 1 .0 3 2 5 .0 P ro v is io n s 4 0 .7 4 0 .1 4 2 .3 4 6 .9 4 9 .3 5 1 .7 O th e r L ia b ilitie s 8 .9 6 4 .8 6 9 .8 7 4 .0 6 1 .8 6 3 .5 S o u rc e :C o m p a n y d a ta a n d B a n c a A le tti fo re c a s ts
NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERIC A, CAN ADA, JAPAN OR AUSTRALIA
C A G R 0 6 /0 9 e
-3 .1 % 0 .5 % 4 .8 % 4 .8 %
2 8 .8 % 2 8 .8 % 2 8 .8 % 2 8 .7 % 1 .1 % 7 .3 % 4 .6 %
2 .3 %
n .m .
-6 2 .2 %
RESEARCH DISCLAIMER BANCA ALETTI & C. S.P.A. (BANCA ALETTI) A MEMBER OF THE BANCO POPOLARE GROUP S.C.A.R.L., IS AN AUTHORISED BANK REGISTERED WITH THE BANK OF ITALY.
ANALYST CERTIFICATION THIS PUBLICATION HAS BEEN PREPARED BY ANDREA BONFA’ ON BEHALF OF BANCA ALETTI. THE RESPECTIVE RESEARCH ANALYST(S) HEREBY CERTIFY THAT ALL THE VIEW EXPRESSED IN THIS RESEARCH REPORT ACCURATELY REFLECT THE ANALYST’S PERSONAL VIEWS ABOUT ANY OR ALL OF THE SUBJECT ISSUER OR SECURITIES. THE ANALYST(S) ALSO CERTIFY THAT NO DIRECT OR INDIRECT COMPENSATION HAS BEEN OR WILL BE RECEIVED IN EXCHANGE FOR ANY VIEWS EXPRESSED.
OTHER IMPORTANT DISCLOSURES THIS DOCUMENT IS PREPARED AS PART OF BANCA ALETTI INTERNAL RESEARCH ACTIVITY ON COMPANIES OR SECURITIES LISTED AND NOT LISTED ON THE REGULATED MARKETS. BANCA ALETTI AND ITS CONNECTED COMPANIES, AND THEIR RESPECTIVE DIRECTORS, OFFICERS AND EMPLOYEES MAY FROM TIME TO TIME HAVE A SHORT OR LONG POSITION, OR OTHER INTEREST, IN THE SECURITIES MENTIONED AND MAY SELL OR BUY SUCH SECURITIES FOR THEIR OWN ACCOUNT OR FOR THE ACCOUNT OF THE OTHERS. ANY OPINIONS, FORECAST OR ESTIMATES IN THIS REPORT, ARE THOSE OF THE AUTHOR ONLY; THEY REFLECTS ONLY CURRENT VIEWS OF THE AUTHOR AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. ALTHOUGH THE ANALYSIS, OPINIONS, PROJECTIONS, FORECASTS AND ESTIMATES EXPRESSED IN THIS REPORT WERE IN NO WAY AFFECTED OR INFLUENCED BY THE ISSUER, IT IS BANCA ALETTI’S PRACTICE TO SUBMIT A PRE-PUBLICATION DRAFT OF ITS REPORT FOR REVIEW TO THE INVESTOR RELATIONS DEPARTMENT OF THE ISSUER FORMING THE SUBJECT OF THE REPORT, SOLELY FOR THE PURPOSE OF CORRECTING ANY INADVERTENT MATERIAL INACCURACIES. THIS DOCUMENT IS INTENDED FOR DISTRIBUTION ONLY TO INSTITUTIONAL INVESTORS. THIS DOCUMENT IS FOR INFORMATIONAL PURPOSES ONLY AND SHALL NOT BE CONSTRUED AS AN OFFER OR SOLICITATION FOR THE SUBSCRIPTION OR PURCHASE OR SALE OF ANY SECURITIES, OR AS AN INVITATION, INDUCEMENT OR INTERMEDIATION FOR THE SALE, SUBSCRIPTION OR PURCHASE OF SECURITIES OR FOR ENGAGING IN ANY SPECIFIC TRANSACTION. THE INFORMATION PROVIDED HEREIN AND, IN PARTICULAR THE DATA CONTAINED IN THIS DOCUMENT ARE TAKEN FROM INFORMATION PROVIDED TO THE PUBLIC BY THE ISSUER HEREIN (THE ISSUER) OR OTHER INFORMATION AVAILABLE TO THE PUBLIC, AND REFER TO THE DATE OF THIS DOCUMENT. THIS DOCUMENT IS BEING SUPPLIED TO YOU SOLELY FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED, REDISTRIBUTED OR PASSED ONE, DIRECTLY OR INDIRECTLY TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE WITHOUT PRIOR WRITTEN CONSENT OF BANCA ALETTI. BY ACCEPTING THIS DOCUMENT YOU AGREE TO BE BOUND BY ALL THE ABOVE-MENTIONED PROVISIONS. THE OPINIONS CONTAINED IN THIS DOCUMENT ARE BASED UPON INFORMATION AND DATA FROM SOURCES BELIEVED TO BE RELIABLE AND IN GOOD FAITH, BUT HAS NOT BEEN INDEPENDENTLY VERIFIED BY BANCA ALETTI. BANCA ALETTI DOES NOT WARRANT THE COMPLETENESS OR ACCURACY OF SUCH INFORMATION AND DOES NOT ACCEPT ANY LIABILITY WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT TO THE EXTENT REQUIRED BY APPLICABLE LAW. BANCA ALETTI HAS NO OBLIGATION TO UPDATE, MODIFY OR AMEND THIS PUBLICATION OR TO OTHERWISE NOTIFY A READER OR RECIPIENT OF THIS PUBLICATION IN THE EVENT THAT ANY MATTER, OPINION, PROJECTION, FORECAST OR ESTIMATE CONTAINED HEREIN, CHANGES OR SUBSEQUENTLY BECOMES INACCURATE, OR IF RESEARCH ON THE SUBJECT COMPANY IS WITHDRAWN. RECOMMENDATIONS FREQUENCY DEPENDS ON MARKET EVENTS AND RELATIVE AND ABSOLUTE PERFORMANCE OF FINANCIAL INSTRUMENTS COMPARED TO FUNDAMENTALS VALUATION. THE INVESTMENTS REFERRED TO IN THIS PUBLICATION MAY NOT BE SUITABLE FOR ALL RECIPIENTS. RECIPIENTS ARE URGED TO BASE THEIR INVESTMENT DECISIONS UPON THEIR OWN APPROPRIATE INVESTIGATIONS THAT THEY DEEM NECESSARY. ANY LOSS OR OTHER CONSEQUENCE ARISING FROM THE USE OF THE MATERIAL CONTAINED IN THIS PUBLICATION SHALL BE THE SOLE AND EXCLUSIVE RESPONSIBILITY OF THE INVESTOR. IN THE EVENT OF ANY DOUBT ABOUT ANY INVESTMENT, RECIPIENTS SHOULD CONTACT THEIR OWN INVESTMENT, LEGAL AND/OR TAX ADVISERS TO SEEK ADVICE REGARDING THE APPROPRIATENESS OF INVESTING. THE PAST IS NOT NECESSARILY A GUIDE TO FUTURE PERFORMANCE OF AN INVESTMENT. TO THE EXTENT PERMITTED BY APPLICABLE LAW, NO LIABILITY WHATSOEVER IS ACCEPTED FOR ANY DIRECT OR CONSEQUENTIAL LOSS, DAMAGES, COSTS, PREJUDICES ARISING FROM THE USE OF THIS PUBLICATION OR ITS CONTENTS.
NOT FOR DISTRIBUTION IN THE UNITED STATES OF AMERIC A, CAN ADA, JAPAN OR AUSTRALIA
DISCLOSURE OF CONFLICTS OF INTERESTS BANCA ALETTI DISCLOSES CONFLICT OF INTEREST AS DEFINED BY ARTICLE 69 QUINQUIES OF CONSOB REGULATION N.11971 AS AMENDED FROM TIME TO TIME AND STATES THAT:
A FEW MEMBERS OF THE BOARD OF DIRECTORS OF THE FOLLOWING COMPANIES HAVE POSITIONS WITHIN
BANCO POPOLARE GROUP: ALERION INDUSTRIES, CAMPARI, INTERPUMP, MIRATO; SADI SERVIZI INDUSTRIALI
THE PARENT COMPANY BANCO POPOLARE GROUP, OWNS, DIRECTLY OR INDIRECTLY, A STAKE HIGHER THAN 2%
IN THE FOLLOWING COMPANIES: AZIMUTH HOLDING, BANCA ITALEASE, CREDITO BERGAMASCO, MILANO ASSICURAZIONI;
BANCO POPOLARE GROUP PROVIDES A SIGNIFICANT AMOUNT OF FINANCING TO THE FOLLOWING COMPANIES:
ANTICHI PELLETTIERI, BANCA FINNAT, BASTOGI, BENETTON, BRIOSCHI SVILUPPO IMMOBILIARE, CAMFIN, CAMPARI, CARRARO, CEMBRE, CREMONINI, DANIELI, DE LONGHI, EMAK, ESPRINET, GEWISS, GRUPPO COIN, INDESIT, INTERPUMP, KME, LOTTOMATICA, MARAZZI, MARIELLA BURANI, MIRATO, N. MONTANARI, PANARIA, PERMASTEELISA, PRYSMIAN, SADI SERVIZI INDUSTRIALI, STEFANEL.
IN THE LAST 12 MONTHS BANCA ALETTI HAS ACTED AS MANAGER, CO-MANAGER, LEAD MANAGER OR ADVISOR
IN CAPITAL MARKETS TRANSACTIONS OR OTHER RELEVANT TRANSACTIONS OF SADI SERVIZI INDUSTRIALI ;
BANCA ALETTI HAS A SPECIFIC INTEREST IN ISSUERS AND FINANCIAL INSTRUMENTS AND TRANSACTIONS, IN
THAT IT ACTS AS A SPECIALIST OF BANCA FINNAT, BONIFICHE FERRARESI, CAMFIN, CEMBRE, EMAK, INTERPUMP, MIRATO, RETELIT, SADI SERVIZI INDUSTRIALI, SICC AND STEFANEL. BANCA ALETTI KEEPS WITH THE REGULATIONS GOVERNING THE STOCK MARKETS, REGULATED AND MANAGED BY BORSA ITALIANA S.P.A. AND WITH ITS GUIDELINES ON SECURITIES ADMITTED TO LISTING ON THE BORSA ITALIANA SEGMENTS. IN ITS CAPACITY AS A SPECIALIST, BESIDES PREPARING AND DISTRIBUTING THIS REPORT, BANCA ALETTI MUST MAKE PURCHASES AND/OR SALES - AS A PRINCIPAL - OF ORDINARY SHARES OF THE ISSUERS MENTIONED ABOVE AND AS A RESULT BANCA ALETTI MAY HAVE LONG OR SHORT POSITIONS IN THE RELEVANT FINANCIAL INSTRUMENTS. BANCA ALETTI HAS IN PLACE POLICIES AND PROCEDURES IN ORDER TO AVOID ANY CONFLICT OF INTERESTS AND TO RESTRICT RESEARCH ANALYST IN TRADING (FOR THEIR PERSONAL ACCOUNT) IN THE TYPE OF SECURITIES IN RESPECT OF THE ISSUERS THAT THEY COVER. THE RESEARCH ANALYST MAY ONLY OLD SUCH SECURITIES IN CIRCUMSTANCES AS MAY BE CONTEMPLATED BY THE ABOVE POLICIES AND PROCEDURES.
CREMONINI: RATINGS HISTORY IN THE LAST 12 MONTHS DATE: 7/12/07 13/11/06
RATING: BUY from HOLD HOLD
STOCK RATINGS
THE RECOMMENDATIONS TO BUY, HOLD AND SELL ARE BASED ON EXPECTED MARKET OUTPERFORMANCE (EXPECTED OUTPERFORMANCE IN THE NEXT 12 MONTHS INCLUSIVE OF THE DIVIDEND PAID OUT BY THE STOCK’S ISSUER). EXPLANATION OF THE RATING SYSTEM: BUY: STOCK ESTIMATED TO OUTPERFORM THE MARKET BY MORE THAN 10% OVER A NEXT 12 MONTHS PERIOD HOLD: STOCK PERFORMANCE ESTIMATED AT BETWEEN –10% AND +10% COMPARED TO THE MARKET OVER A NEXT 12 MONTHS PERIOD SELL: STOCK ESTIMATED TO UNDERPERFORM THE MARKET BY HIGHER THAN 10% OVER A 12 MONTHS PERIOD IN CERTAIN OCCASIONS, THE RELATIVE PERFORMANCE MAY FALL OUTSIDE OF THESE RANGES BECAUSE OF MARKET PRICE MOVEMENTS AND/OR OTHER SHORT TERM VOLATILITY OR TRADING PATTERNS. SUCH INTERIM FROM THE SPECIFIED RANGES MIGHT NOT REQUIRE A CHANGE IN RATING.
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RATINGS DISTRIBUTION BANCA ALETTI & C. S.P.A. EQUITY RESEARCH DEPARTMENT’S DISTRIBUTION OF STOCK RATINGS IS AS FOLLOWS: BUY
HOLD
% ON ALETTI UNIVERSE
62%
31%
SELL 8%
OF WHICH INV. BANKING CLIENTS
0%
0%
0%
VALUATION METHODOLOGY THE BANCA ALETTI EQUITY RESEARCH DEPARTMENT VALUES THE COMPANIES UNDER COVERAGE USING A RANGE OF VALUATION METHODS, OF WHICH THE MOST PREVALENT ARE THE DISCOUNTED CASH FLOWS METHOD (DCF) AND MULTIPLE-BASED MODELS (E.G. P/E, P/BV, EV/SALES, EV/EBITDA, EV/EBIT). THE ANALYSTS ARE NEVERTHELESS FREE TO USE ALTERNATIVE OFFICIAL VALUATION METHODOLOGIES, WHERE DEEMED NECESSARY.
ORGANIZATIONAL AND ADMINISTRATIVE MECHANISMS TO PREVENT CONFLICTS OF INTEREST THIS RESEARCH HAS BEEN PUBLISHED IN ACCORDANCE WITH OUR CONFLICT MANAGEMENT POLICY. TO ENSURE THE INDEPENDENCE AND THE IMPARTIALITY OF ITS FINANCIAL ANALYSTS’ JUDGMENT, EMPLOYED IN THE EQUITY RESEARCH DEPARTMENT (AS FOLLOW DEPARTMENT), INVOLVED WITH THE RESEARCH, ANALYSIS, COMPANIES VALUATION AND\OR FINANCIAL INSTRUMENTS, AND WITH INVESTMENT RECOMMENDATIONS DISTRIBUTED TO INSTITUTIONAL INVESTORS, BANCA ALETTI HAS ADOPTED THE FOLLOWING ORGANIZATIONAL AND ADMINISTRATIVE MECHANISMS: •
THE DEPARTMENT HIERARCHICALLY RESPONDS TO THE GENERAL MANAGER OF THE BANK AND EXCLUSIVELY
AND DIRECTLY RESPONDS TO HIM; •
THE EXISTING HIERARCHICAL RELATIONSHIP BETWEEN GENERAL MANAGER AND THE DEPARTMENT OR EACH
ONE OF ITS FINANCIAL ANALYST(S) MEMBERS ARE SUBJECT TO PRINCIPLES OF PROFESSIONALISM AND TRANSPARENCY; •
THE CURRENT GENERAL AND\OR SPECIFIC GUIDANCE GIVEN BY THE GENERAL MANAGER TO THE DEPARTMENT
SHOULD NOT RESULT IN CONTRAST WITH THE EXISTING LEGISLATIVE OBJECTIVES OF COMPLETENESS, CLEARNESS AND IMPARTIALITY OF THE PRODUCED STUDIES AND BE INFLUENCED BY THE SPECIFIC INTERESTS OF THE BANK RELATED TO A PARTICULAR SUBJECT OR FINANCIAL INSTRUMENT; •
THE REQUESTS OR THE COMMERCIAL COLLABORATIONS IN FAVOUR OF OTHER STRUCTURES OF THE SAME BANK
OR THE GROUP TO WHICH THE BANK IS PERTINENT, WHICH, BY PRINCIPLE, COULD POTENTIALLY RESULT IN A CONFLICT OF INTEREST ACCORDING TO THE EXISTING REGULATIONS, CAN BE ORDERED TO THE DEPARTMENT OR A SINGLE ANALYST ONLY BY THE GENERAL MANAGER; •
IN THE RELATIONS WITH THE OTHER STRUCTURES OF THE BANK OR THE GROUP TO WHICH THE BANK
BELONGS TO, THE DEPARTMENT OR EACH COMPONENTS OF THE SAME MUST RETAIN THEMSELVES FROM SEARCHING, RECEIVING OR FURNISH INFORMATION THAT MIGHT INVALIDATE THE INDEPENDENCE AND\OR THE IMPARTIALITY OF JUDGMENT OF THE RESEARCH COMMENT AND\OR RECOMMENDATIONS OF INVESTMENTS OR FAVOUR AN ASYMMETRIC DISTRIBUTION OF THE INFORMATION EITHER INSIDE OR OUTSIDE THE BANK OF OR THE GROUP. THE DEPARTMENT AND EACH COMPONENTS OF THE SAME MUST STICK TO THE PRINCIPLES AND BEHAVIOUR RULES FOR A CORRECT CARRY OUT OF THE FINANCIAL ANALYST ACTIVITIES; •
THE REMUNERATION OF THE FINANCIAL ANALYST(S) AND OF DEPARTMENT EMPLOYEES IS NOT TIED, DIRECTLY
OR INDIRECTLY, TO INVESTMENT BANKING TRANSACTIONS AND\OR TO THE BUSINESS RELATIONSHIP DEVELOPMENT WITH ISSUERS UNDER FINANCIAL ANALYSIS. Banca Aletti & C. S.p.A. Via S.Spirito, 14 – 20121 Milan
Operating Office
Via Roncaglia, 12 - 20146 Milan Phone number +39 02 43358.1 - Fax +39 02 43358.254
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