TOP STORIES WEEKLY - Particulares - Millenniumbcp · Oi’s reduction of shareholder remuneration...
Transcript of TOP STORIES WEEKLY - Particulares - Millenniumbcp · Oi’s reduction of shareholder remuneration...
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All prices are those of the end of the trading session unless otherwise indicated. For important Disclosure and Disclaimer go to the second last page.
António Seladas, CFA
+351 21 003 7826
Av. José Malhoa, Lote 27
1099-010 Lisboa
Tel / Fax: +351 21 003 7800 / 09
TOP STORIES
Portugal Telecom dropped 9% this week. PT’s 2Q performance in the domestic market was ok, but Oi’s
earnings were disappointing. PT also announced a dividend cut, to €0.10/ share from €0.325, following
Oi’s reduction of shareholder remuneration to c. R$0.5 bn from R$2.0 bn. The market already anticipated a
dividend cut, but a reduction to €0.10 is more aggressive than we expected (page 4).
OUT THIS WEEK Snapshots/Company Reports – Portugal Telecom, Sonae
Price Target / Recommendation Changes – Sonae, Altri
WEEK AHEAD
Wednesday – Sonae’s 2Q13 Earnings
PORTFOLIOS
This week, Mib Aggressive Portfolio went up 4.77%, outperforming the PSI20 by 3.85pp. BES and
Novabase were the main contributors for this outperformance (page 8).
This week, Mib Liquidity Portfolio went up 0.9%, underperforming the PSI20 by 0.01pp. Portugal
Telecom was the main contributor for this underperformance (page 9).
Stock Market Last 1W YTD 2012 Daily Vol. (€mn) 1W 1M 6M 2012
PSI 20 6,021 0.9% 6.47% 2.93% PSI 20 127 103 105 66
IBEX 35 8,821 1.0% 8.00% -4.66% IBEX 35 1,509 1,828 2,436 2,578
Euro Stoxx 50 2,854 1.0% 8.28% 13.79% Euro Stoxx 50 5,276 6,101 7,648 7,867
Forex Rates Last 1W YTD 2012 Interest Rates Last 1W Chg YE12
EUR/USD 1.33 -0.2% 1.11% 1.97% Euribor 6m 0.34% 0.34% 0bp 0.32%
EUR/GBP 0.85 -0.9% 4.55% -2.30% 10Y Bond PT 6.37% 6.57% -20bp 7.01%
EUR/BRL 3.15 3.8% 16.39% -10.68% 10Y Bond SP 4.36% 4.50% -14bp 5.26%
-24.7
-22.2
-9.8
-2.6
-2.5
42.7
49.3
50.0
73.6
109.7
-60 -20 20 60 100 140
Portugal Telecom
Cofina
Cimpor
Inditex
EDP Renováveis
BCP
Zon Multimedia
Sonae Capital
Mota-Engil
Impresa
Best & Worse Performers - YTD (%)
-9.0
-2.7
-1.7
-0.9
-0.8
2.6
4.4
7.0
7.1
12.9
-15 -10 -5 0 5 10 15
Portugal Telecom
Sonaecom
Altri
Portucel
Sonae
BPI
Indra
BCP
Novabase
BES
Best & Worse Performers -1 Week (%)
IBERIA
16 Aug
ust 2
013
WEEKLY
EQUITY RESEARCH
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Millennium investment banking Weekly 16 Augus t 2013
CHANGES
EARNINGS
Rating Target Rating Target
Sonae Buy 1.15 Buy 1.00 Valuation Update
Altri Reduce 1.75 Sell 1.75 Price performance
MotivePreviousNew
Galp Energia * 15-07 BM 14-10 BM
Portucel 19-07 AM 21-10 AM
Media Capital 23-07 AM n.a.
BPI 24-07 AM 22-10 AM
Iberdrola 24-07 BM 23-10 BM 23-10-2013
EDP Renováveis 24-07 BM 30-11 BM
Zon Multimedia 24-07 BM 30-10 BM
Sonaecom 24-07 AM n.a.
Telefónica 25-07 BM 08-11 BM
Indra 25-07 AM n.a.
EDP 25-07 AM n.a.
Glintt 26-07 12-11
BES 26-07 AM 28-10 AM
Galp Energia 29-07 BM 28-10 BM 05-03-2013
BCP 29-07 AM 04-11 AM
Impresa 29-07 AM 28-10 AM
Novabase 29-07 AM 07-11 AM
Sonae Capital 30-07 AM 20-11 AM
Sonae Indústria 31-07 AM 14-11 AM
Jerónimo Martins 31-07 BM 31-10 BM
REN 01-08 AM 06-11 AM
Martifer 01-08 AM 07-11 AM
Altri 01-08 AM n.a.
Cofina 01-08 AM n.a.
Sonae Sierra 08-08 AM 07-11 AM
Reditus 08-08 28-11
Portugal Telecom 14-08 BM 14-11 BM
Soares da Costa 14-08 AM n.a.
ESFG 16-08 BM n.a.
Sonae 21-08 AM 13-11 AM
Cimpor 26-08 AM 25-11 AM
Mota-Engil 29-08 AM 21-11 AM
Ibersol 30-08 AM 19-11 AM
Semapa 30-08 AM 01-11 AM
SAG 30-08 n.a.
AM - After market; BM - Before market; n.a. - Not available; (e) Expected;
Company Investor Day2Q2013 3Q2013
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Millennium investment banking Weekly 16 Augus t 2013
DIVIDENDS
Gross Payment Ex-Div Last Year
DPS Date Date Pay Date Gross DPS
Corticeira amorim 0.100 4-Apr-13 30-Apr-13 25-Apr-13 Approved - 0.000
Media Capital 0.134 29-Apr-13 May-13 - Approved 19-Apr-12 0.069
Cofina 0.010 18-Apr-13 8-May-13 3-May-13 Approved 11-May-12 0.010
J. Martins 0.295 10-Apr-13 8-May-13 3-May-13 Approved 30-Apr-12 0.275
F Ramada 0.090 18-Apr-13 9-May-13 6-May-13 Approved 25-May-12 0.080
Galp Energia** 0.120 22-Apr-13 16-May-13 13-May-13 Approved 24-May-12 0.200
Portugal Telecom 0.325 19-Apr-13 17-May-13 14-May-13 Approved 25-May-12 0.435
Altri 0.025 18-Apr-13 17-May-13 14-May-13 Approved 25-May-12 0.020
Sonaecom 0.120 24-Apr-13 22-May-13 17-May-13 Approved 24-May-12 0.070
EDP 0.185 6-May-13 23-May-13 20-May-13 Approved 16-May-12 0.185
EDP Renováveis 0.040 23-Apr-13 23-May-13 20-May-13 Approved - 0.000
Zon Multimedia 0.120 24-Apr-13 24-May-13 21-May-13 Approved 25-May-12 0.160
Mota-Engil 0.110 24-Apr-13 24-May-13 21-May-13 Approved 17-May-12 0.110
REN 0.170 30-Apr-13 27-May-13 22-May-13 Approved 20-Apr-12 0.169
Sonae 0.033 30-Apr-13 30-May-13 27-May-13 Approved 30-May-12 0.033
Novabase 0.100 2-May-13 3-Jun-13 29-May-13 Approved 4-Jun-12 0.030
Ibersol 0.055 6-May-13 5-Jun-13 31-May-13 Approved 11-May-12 0.055
Portucel 0.160 21-May-13 6-Jun-13 3-Jun-13 Approved 20-Apr-12 0.221
Semapa 0.255 31-May-13 14-Jun-13 11-Jun-13 Approved 11-Jun-12 0.255
Teixeira Duarte 0.015 25-May-13 18-Jun-13 13-Jun-13 Approved - 0.000
Cimpor 0.016 23-May-13 24-Jun-13 19-Jun-13 Approved 3-Aug-12 0.166
Iberdrola* 0.030 22-Mar-12 3-Jul-13 3-Jul-13 Approved 23-Jul-12 0.160
Indra 0.340 26-Jun-13 9-Jul-13 9-Jul-13 Approved 4-Jul-12 0.680
Iberdrola* 0.130 - 22-Jul-13 22-Jul-13 Approved 0-Jan-00 0.000
Galp Energia** 0.144 - 1-Sep-13 - Estimated 18-Sep-12 0.120
Novabase**** 0.500 25-Sep-13 1-Oct-13 - Proposed - 0.000
Telefónica** 0.350 30-May-13 1-Nov-13 - Approved - 0.000
BCP *** - 20-May-13 - - - - 0.000
BES 0.000 27-Mar-13 - - Approved - 0.000
BPI *** - 24-Apr-13 - - - - 0.000
Banif 0.000 - - - - - 0.000
ESFG 0.000 26-Apr-13 - - Approved - 0.000
Telefónica** 0.000 30-May-13 - - Approved 18-May-12 0.530
Impresa 0.000 23-Apr-13 - - Approved - 0.000
Glintt 0.000 23-May-13 - - Approved - 0.000
Brisa 0.000 19-Mar-13 - - Approved - 0.000
Inapa 0.000 10-Apr-13 - - Approved - -
Sonae Industria 0.000 12-Apr-13 - - Approved - 0.000
Sonae Capital 0.000 18-Mar-13 - - Approved - 0.000
Soares da Costa - 30-May-13 - - - - 0.000
Martifer 0.000 10-Apr-13 - - Approved - 0.000
SAG 0.000 6-May-13 - - Approved - 0.000
Reditus 0.000 31-May-13 - - Approved - 0.000
na - Not available
Estimate: Estimated by the Millennium investment banking
Proposed: Announced by the company to be proposed in AGM
Approved: Dividend already approved by AGM
* Company pays dividends twice a year (the 1st one already paid in January)
** Company pays dividends twice a year.
*** The banks that have resquested COCO's are restrained from paying dividends
**** Extraordinary dividend
Company AGM Obs
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Millennium investment banking Weekly 16 Augus t 2013
NEXT WEEK RESULTS
Sonae Buy – Medium Risk (Target YE13: €1.15)
2Q13 Earnings Preview João Flores
Equity Analyst
Sonae will disclose its 2Q13 Earnings on August 21st (after market close).
We expect consolidated sales will slightly decline 1.2% YoY, penalized by specialized retail (non-food unit
will keep facing a tough scenario both in Portugal and Spain) and an unfavourable comparison basis
(Ester effect: Ester day was on April 08th last year while it was on March 31st in 2013). We estimate
EBITDA will increase 0.3% YoY while EBITDA margin is expected to increase 0.2pp YoY to 11.9% (flat
growth in Food and Specialized retail). Below operational numbers, indirect results (from Sonae Sierra)
will penalized Sonae`s numbers. Recall Sonae Sioerra and Sonaecom already disclosed 2Q13 Earnings,
thus attentions will be focused on retail.
TELECOMS
Portugal Telecom Buy – Medium Risk (Target YE13: €4.00)
2Q13 Earnings Comment – Domestic performance ok, but disappointing
Brazil; dividend cut to €0.10/ share
Alexandra Delgado, CFA
Equity Analyst
� PT announced this morning its 2Q13 Earnings. Revenues, EBITDA (exc. PRBs) and net income
reached €1,540 mn, €491 mn and €257 mn in the quarter, respectively. Net income benefited from
the capital gain derived from the sale of CTM (€310 mn). EBITDA was 6% below our estimate due to
a low EBITDA delivered by Brazilian Oi.
� Revenues in Portugal dropped 4.8% YoY in 2Q13, showing improvement vs. previous quarter (-6.8%
YoY). Service revenues in the residential segment advanced only 0.5% in 2Q13, much lower than
previous quarter (+4.1% YoY). Pay TV and BB net adds decelerated significantly. On a positive note,
service revenue in the personal segment continues to improve (-10.0% YoY in 2Q13 vs. -11.4% YoY
in 1Q13) and post-paid net adds continue strong thanks to 4play adoption. EBITDA in Portugal
declined 9.7% in 2Q13, but was still 2% above our estimate.
� Oi reported its 2Q earnings yesterday after market closing. Oi’s mobile revenue evolution was
disappointing, EBITDA was quite low, and FCF in 1H13 was extremely negative. Dividend cut (to
R$0.5 bn per year) ends uncertainty on this topic, but concerns on operational performance remain.
� PT announced it will cut its dividend to €0.10/ share in fiscal years 2013 & 2014, from previous
€0.325/ share. We were estimating PT would cut its dividend to €0.20/ share, so this was more
aggressive than we thought. This follows Oi’s dividend cut.
� The CFO clarified that since Oi will be paying R$500 mn as interim dividends in October 2013, there
is no issue with TmarPart servicing its debt in the short term. PT will in the meantime discuss this
issue with partners in Oi. PT’s share of TmarPart net debt is c. €250mn.
� The CFO said that out of the $280 mn dividends pending from Angola (Unitel), $94 mn were already
approved by Bank of Angola.
� In summary, performance in the domestic market was ok but Oi’s earnings were disappointing. For
now, we maintain the price target for Portugal Telecom at €4.00 (YE13), with a Buy, Medium Risk
recommendation.
Sales YoY EBITDA YoY EBIT YoY Net Profit YoY
1,275 -1% 152 0% 59 -5% 16 -8%
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Millennium investment banking Weekly 16 Augus t 2013
(For further details, please refer to our snapshot out this week)
Oi’s 2Q13 Earnings Comment – Dividend cut as expected; low EBITDA on bad debt and salaries
increase
� Oi reported yesterday its 2Q13 earnings. Consolidated Net Revenues in the quarter reached R$7,073
mn, which represents a 2.4% YoY increase (+3.5% YoY in 1Q13).
� Residential revenue grew 4.5% YoY in 2Q13, slightly below 1Q13 trend (+5.2% YoY). Personal
mobility revenue grew only 1.2% YoY (vs. 10.0% in 1Q13 & 14.6% in 4Q12) and MTRs decrease
only partially explains the deceleration. Business/ corporate revenues grew 4.1% YoY in 2Q13, much
better than in 1Q13 (-1.5% YoY). But performance in mobile was disappointing: mobile service
revenue (personal plus corporate & SMEs) dropped 1.6% YoY in 2Q13 (+0.8% in 1H13), worse than
market average.
� EBITDA was R$1,797mn, 18% below our estimates, impacted by higher bad debt provisions and
increased personnel expenses. EBITDA margin was 25.4% in the quarter, -5.7pp YoY.
� Net Debt was R$29.5 bn by the end of 1H13 vs. R$25.1 bn by YE12. Net debt increase results from:
negative FCF (-R$4.5 bn), dividend payment (-R$1.0 bn) and asset sales (+R$1.1 bn).
� Oi announced the revision of its shareholder remuneration policy: Oi will pay c. R$500mn for fiscal
years 2013 to 2016 vs. previous R$2bn per year.
� Oi is focused on improving cash flow generation. The CEO said they will continue to push for revenue
growth, but want to grow with profitability. Will focus on reducing current bad debt levels to half. On
the cost front, the company has several ongoing initiatives to increase productivity. Finally, Oi wants
to improve capex management, aligning it to the company’s CF generation. The CEO expects capex
to be below R$6bn in the next years.
� In summary, revenue growth is slowing and performance on mobile is disappointing; EBITDA was
quite low. More, FCF generation in 1H13 was extremely negative. Dividend cut brought definition on
the shareholder remuneration topic and increased financial flexibility is positive. However, concerns
on operational performance remain.
(For further details, please refer to our snapshot out this week)
CONGLOMERATE
Sonae Buy – Medium Risk (Target YE13: €1.15)
Update Valuation – From Holding to Retailer? João Flores;
Equity Analyst
� We fine-tuned our Sonae`s estimates based on latest data and updated WACC. Our price target
was revised upwards to €1.15 YE13from €1.00 YE13, while recommendation was kept unchanged
at Buy (Medium Risk), with a 34% upside vs current price. Upwards revision strongly benefited from
updated WACC (and food retail numbers) which offset negative effect from updated specialized
retail and retail properties estimates.
� We believe current stock price makes Sonae an attractive stock, since company keeps showing
strong resilience in Portugal while rethinking international expansion (focused on capital
light/franchising while slowdown stores openings in Spain). Furthermore, company keeps showing
debt reduction while is concluding long awaited M&A in telecoms.
� Updated valuation: i) updated estimates had a €0.05 negative effect on price target since upwards
revision in Sonae MC (higher top line and EBITDA margin) was offset by downwards revisions in
Page 6 of 12
Millennium investment banking Weekly 16 Augus t 2013
Sonae SR and Sonae RP. Consolidated Sales in 2013 were slightly revised downwards (from
€5.304Bn to €5.314Bn); Food retail upwards revised (from €3.287Bn to €3.315Bn: EBITDA margin
to 7.7% from 7.2%), Specialized retail downwards revised (from €1.167Bn to €1.141Bn: EBITDA
margin to -2.0% from -0.5%); ii) Sonaecom updated valuation (from €2.40 YE13 to €2.20 YE13) had
a €0.05 negative effect on Sonae`s price target; iii) updated WACC (Portugal sovereign yield was
revised to 7% from 10%) had a €0.25 positive effect on Sonae`s price target.
� Using Sonaecom current stock price (€1.762/share) and applying a 20% discount on Sonae Sierra
NAV (we are using 10%), Sonae`s price target would decline to €1.10 (28% upside).
� Overall, company is benefiting from food retail strong numbers while is fine-tuning its specialized
retail brands (Sportzone, Modalfa, Zippy) in order to leverage sales, since opening new (own) stores
is not an option at moment. Following the merger between Zon and Optimus and assuming Sonae
will exercise the option to buy Orange 20% stake in Sonaecom (increasing its stake to 74%) we
believe Sonae will try to simplify its holding structure (take over and spin-off of Sonaecom?) to focus
on retail and remove holding discount (we are using 10%). Furthermore, Sonae would be easily
compared to its retail peers. Excluding Holding discount, Sonae`s price target would rise to €1.25.
� Strategy based on Spain (and Angola) will not definitely be a growth driver for the next years.
Operational numbers in food retail keep showing positive surprises, reflecting a management
increasingly focused on a successful business model. Sonae is fine-tuning its specialized retail
brands (Sportzone, Modalfa, Zippy, Well`s) in order to leverage sales, since opening new (own)
stores is not an option at moment.
(For further details, please refer to our company report out this week)
Page 7 of 12
Millennium investment banking Weekly 16 Augus t 2013
SECTOR PERFORMANCE
� This week, the PSI20 went up 0.9%. The best performing sector was Financials, plus 8% and
the worst was Telecoms & IT, minus 6.3%.
� On a Ytd basis, the PSI20 went up 6.5%. The best performing sector was Industrials & Other,
plus 23.5% and the worst was Media, minus 22.2%.
AGGRESSIVE PORTFOLIO
� This week, Mib Aggressive Portfolio went up 4.77%, outperforming the PSI20 by 3.85pp. BES
and Novabase were the main contributors for this outperformance.
� We highlight that the portfolio is composed by the five stocks with the highest upside
potential of our coverage universe. It is equal weighted and rebalanced on a weekly basis.
LIQUIDITY PORTFOLIO
� This week, Mib Liquidity Portfolio went up 0.9%, underperforming the PSI20 by 0.01pp.
Portugal Telecom was the main contributor for this underperformance.
� We highlight that the portfolio is composed by the five stocks with the highest upside
potential of our coverage universe, excluding the less liquid stocks. It is equal weighted and
rebalanced on a weekly basis.
* includes Jeronimo Martins and Sonae
-22.2
-9.4
6.6
6.8
8.8
12.8
23.5
6.5
-35 -25 -15 -5 5 15 25
Media
Telecoms & IT
Oil & Gas
Financials
Retail *
Electric Utilities
Industrials & Other
PSI20
Sector Performance - YTD (%)
-6.3
-0.7
0.0
0.0
0.0
0.3
8.0
0.9
-10 -8 -6 -4 -2 0 2 4 6 8 10
Telecoms & IT
Oil & Gas
Industrials & Other
Retail *
Media
Electric Utilities
Financials
PSI20
Sector Performance -1 Week (%)
Page 8 of 12
Millennium investment banking Weekly 16 August 2013
8 3 4 13 8
Portfolio weekly return
Performance
Contribution Deviation
Novabase High 2.85 4.20 47% 7.1% 1.43pp 1.25pp
Sonae Industria High 0.50 0.77 54% 2.4% 0.49pp 0.31pp
EDP Renováveis Low 3.89 5.45 40% 1.1% 0.22pp 0.03pp
Telefónica Medium 10.99 14.60 33% 0.2% 0.05pp -0.14pp
BES High 0.91 1.05 16% 12.9% 2.58pp 2.40pp
Portfolio 4.77%
PSI 20 0.91%
Gain/loss 3.85pp
Explained by the portfolio 3.84pp
Explained by being underweight in the remaining PSI20 stocks 0.01pp
Next week Portfolio Changes in Portfolio
CompanyRisk
Rating
Market
Price (€)
Price
Target (€)
Upside
PotentialIn Out
Sonae Industria High 0.50 0.77 54% PT Telefónica
Novabase High 2.85 4.20 47% Sonae BES
Portugal Telecom Medium 2.82 4.00 42%
EDP Renováveis Low 3.89 5.45 40%
Sonae Medium 0.85 1.15 35%
Return vs. PSI 20
2009 2010 2011 2012 YTD 1 Month 1 Week
Portfolio 71.9% -7.30% -36.6% 22.1% 27.6% 18.0% 4.8%
PSI20 33.5% -10.30% -27.6% 2.9% 6.5% 9.0% 0.9%
Gain/loss 38.5pp 3.0pp -9.0pp 19.2pp 21.1pp 9.0pp 3.9pp
Source: Bloomberg; Millennium investment banking
"Mib Aggressive Portfolio" is composed by the five stocks with a higher upside potential of our coverage universe.
"Mib Aggressive Portfolio" is equal-weighted and its composition changes at the end of the last trading day of each week.
The portfolio YTD return was recalculated on the week of March 15.
Upside
Potential
Weekly
ReturnCompany
Risk
Rating
Market
Price (€)
Price
Target (€)
Mib AGGRESSIVE PORTFOLIO
90.0
100.0
110.0
120.0
130.0
31/Dec 14/Mar 26/May 07/Aug
Ytd Return
Portfolio PSI20
50.0
100.0
150.0
200.0
250.0
300.0
23/Jul 24/Jan 28/Jul 28/Jan 01/Aug 02/Feb 05/Aug
Return since inception (30th July 2004)
Portfolio PSI20
Page 9 of 12
Millennium investment banking Weekly 16 August 2013
8 3 4 13 8
Portfolio weekly return
Performance
Contribution Deviation
EDP Renováveis Low 3.89 5.45 40% 1.1% 0.22pp 0.03pp
Telefónica Medium 10.99 14.60 33% 0.2% 0.05pp -0.14pp
BES High 0.91 1.05 16% 12.9% 2.58pp 2.40pp
Portugal Telecom Medium 2.82 4.00 42% -9.0% -1.81pp -1.13pp
Galp Energia High 12.54 16.20 29% -0.7% -0.13pp -0.08pp
Portfolio 0.90%
PSI 20 0.91%
Gain/loss -0.01pp
Explained by the portfolio 3.84pp
Explained by being underweight in the remaining PSI20 stocks -3.86pp
Next week Portfolio Changes in Portfolio
CompanyRisk
RatingMarket Price (€)
Price
Target (€)
Upside
PotentialIn Out
Portugal Telecom Medium 2.82 4.00 42% Sonae BES
EDP Renováveis Low 3.89 5.45 40%
Sonae Medium 0.85 1.15 35%
Telefónica Medium 10.99 14.60 33%
Galp Energia High 12.54 16.20 29%
Return vs. PSI 20
2011 2012 YTD 1 Month 1 Week
Portfolio - 22.6% 19.1% 13.7% 0.9%
PSI20 -27.62% 2.9% 6.5% 9.0% 0.9%
Gain/loss - 19.7pp 12.6pp 4.7pp 0.0pp
Source: Bloomberg; Millennium investment banking
"Mib Liquidity Portfolio" is composed by the five stocks with a higher upside potential, excluding less liquid stocks.
"Mib Liquidity Portfolio" is equal-weighted and its composition changes at the end of the last trading day of each week.
The portfolio YTD return was recalculated on the week of March 15.
Upside
Potential
Weekly
ReturnCompany
Risk
RatingMarket Price (€)
Price
Target (€)
Mib LIQUIDITY PORTFOLIO
94.0
99.0
104.0
109.0
114.0
119.0
124.0
31/Dec 12/Feb 27/Mar 09/May 21/Jun 03/Aug
Ytd Return
Portfolio PSI20
75.0
85.0
95.0
105.0
115.0
125.0
135.0
145.0
155.0
30/Dec 25/Apr 20/Aug 15/Dec 11/Apr 06/Aug
Return since inception (31th December 2011)
Portfolio PSI20
Page 10 of 12
Millennium investment banking Weekly 16 August 2013
Risk Trnvr (€mn) M Cap EPS P / E EV / Sales P/BV
Rating 3m 6m (€ mn)Week ago Week 1M 3M 12M YTD 2012 2013E 2014E 2012 2013E 2014E 2012 2013E 2014E 2012 2013E 2014E 2012 2013E 2013E
PSI 20 6,021 - - 53,518 0.91 10.6 -0.7 24.2 6.5
Financials 103.8 97.7 18,670 6.1 38.9 20.7 25.3 30.8 - - - - - - - - - - - - - - -
BCP (1) 0.11 - - - - 9.7 12.5 2,109 7.0 20.2 0.9 76.6 42.7 - - - - - - - - - - - - - - -
BES 0.91 1.05 15.5% Buy High 12.4 15.2 3,652 12.9 49.8 16.2 71.5 1.6 0.03 -0.02 0.03 31.9 loss 31.3 - - - - - - 0.0% 0.0% 0.4
BPI 1.04 1.25 20.7% Buy High 1.4 1.6 1,440 2.6 13.3 -3.5 88.4 9.9 0.18 0.05 0.03 5.3 22.8 29.9 - - - - - - 0.0% 0.0% 0.7
Telecoms 275.7 322.2 54,534 -0.3 11.9 -2.2 5.2 6.5 - - - 12.0 13.7 13.7 1.8 2.0 2.0 5.5 6.0 6.1 0.7% 6.7% 1.9
Telefónica 10.99 14.60 32.9% Buy Medium 251.9 300.1 49,993 0.2 12.5 -1.7 5.1 7.8 0.87 0.78 0.82 11.7 14.1 13.4 1.9 2.0 2.1 5.5 6.1 6.2 0.1% 6.8% 2.2
Portugal Telecom 2.82 4.00 41.6% Buy Medium 19.6 19.0 2,532 -9.0 1.4 -20.2 -20.1 -24.7 0.27 0.42 0.12 14.0 6.8 24.0 1.8 1.8 1.8 5.4 5.4 5.3 8.7% 7.1% 1.0
Zon Multimedia (3) 4.44 4.30 -3.0% Reduce Medium 3.6 2.4 1,371 -0.6 15.5 27.8 113.6 49.3 0.12 0.15 0.18 24.8 28.8 24.3 2.0 1.6 2.1 5.4 4.6 6.0 4.0% 2.7% 1.1
Sonaecom 1.74 2.20 26.1% Buy High 0.7 0.8 639 -2.7 5.7 -0.2 41.7 17.8 0.21 0.14 0.15 7.2 12.3 11.6 1.1 1.3 1.2 3.7 4.4 4.1 7.9% 5.0% 0.6
Media 0.1 0.1 241 0.0 5.0 -6.6 15.4 22.2 - - - 10.9 1.1 - - 8.0 - - 4.8% - -
Impresa (2) 0.65 - - - - 0.0 0.0 109 0.0 0.0 3.2 85.7 109.7 0.01 - - 27.8 - - 1.2 - - 13.4 - - 0.0% - -
Media Capital (2) 1.00 - - - - 0.0 0.0 85 0.0 9.9 -16.7 -26.5 0.0 0.12 - - 8.3 - - 0.9 - - 4.5 - - 9.7% - -
Cofina (2) 0.46 - - - - 0.1 0.1 47 0.0 9.0 -6.9 34.7 -22.2 0.06 - - 10.1 - - 1.3 - - 9.3 - - 2.2% - -
Technology
Indra 11.90 12.35 3.8% Neutral High 16.2 12.1 1,953 4.4 17.6 10.7 50.0 18.8 1.00 0.93 0.88 10.0 12.8 13.6 0.8 0.8 0.8 7.7 8.9 8.6 3.4% 2.9% 1.6
Novabase 2.85 4.20 47.4% Buy High 0.1 0.1 89 7.1 18.8 -1.6 41.8 23.9 0.25 0.19 0.20 9.1 14.6 14.6 0.2 0.3 0.3 2.5 4.0 3.9 4.3% 2.8% 0.8
Utilities 232.0 210.0 41,242 0.7 11.1 3.3 36.2 7.7 - - - 9.4 10.9 9.8- 1.9 1.9 1.8 7.7 7.7 7.1 3.7% 4.3% 0.7
Iberdrola 4.29 5.00 16.5% Buy Low 215.3 190.3 26,776 0.9 12.4 4.7 36.1 5.7 0.47 0.40 0.44 9.02 10.8 9.8 1.6 1.6 1.5 7.3 7.1 6.6 7.9% 7.7% 0.6
EDP 2.71 2.85 5.5% Neutral Low 13.3 15.3 9,895 0.1 11.9 3.8 37.0 18.2 0.28 0.27 0.27 8.29 10.1 9.9 1.9 2.1 2.0 8.4 8.8 8.4 8.1% 6.8% 1.1
EDP Renováveis 3.89 5.45 40.0% Buy Low 3.1 4.0 3,397 1.1 2.8 -4.1 47.1 -2.5 0.14 0.15 0.22 27.6 26.1 17.4 6.2 5.6 4.9 8.5 7.9 6.9 1.0% 1.1% 0.6
REN 2.20 2.45 11.4% Buy Low 0.3 0.3 1,175 0.9 1.4 -5.6 10.1 7.1 0.23 0.21 0.24 8.9 10.4 9.0 4.5 4.6 4.5 7.0 7.2 7.1 8.3% 7.8% 1.1
Conglomerates 2.3 2.0 2,573 0.1 14.4 6.9 - - - - - - - - - - - - - - - - -
Sonae 0.85 1.15 34.8% Buy Medium 2.0 1.6 1,706 -0.8 19.8 11.5 91.3 24.2 0.02 0.04 0.05 42.2 23.1 17.7 0.7 0.7 0.7 6.1 6.6 6.5 4.8% 3.9% 1.3
Semapa 6.89 6.50 -5.6% Reduce High 0.3 0.3 815 2.2 4.5 -1.5 33.7 21.0 1.07 0.53 0.60 5.3 12.9 11.4 1.3 1.5 1.4 5.6 6.8 6.5 10.4% 3.5% 1.0
Sonae Capital 0.21 0.22 4.8% Neutral High 0.0 0.0 53 0.0 31.3 23.5 16.7 50.0 -0.04 -0.04 -0.03 loss loss loss 2.3 2.7 2.6 loss 66.3 49.3 0.0% 0.0% 0.2
Retail 136.1 208.9 73,747.8 -0.2 3.3 -8.3 37.5 3.0 - - - 27.2 24.3 21.4- 2.7 2.4 2.1 15.3 13.7 11.9 1.7% 2.1% 6.7
Inditex 102.75 110.10 7.2% Neutral Medium 122.0 195.0 64,047 -0.4 4.8 0.0 19.0 -2.6 3.81 4.24 4.83 5.5 24.2 21.3 3.9 3.4 3.0 15.8 13.9 12.0 1.7% 2.1% 6.7
Jerónimo Martins 15.42 16.90 9.6% Neutral Medium 14.1 13.9 9,701 0.2 -1.6 -8.2 18.5 5.6 0.61 0.64 0.69 4.8 24.3 22.2 0.9 0.9 0.8 13.2 12.8 11.5 2.0% 2.0% 6.8
Industrials 1.4 1.5 4,631 -0.1 1.5 -4.3 7.2 3.6 - - - - - - - - - - - - 7.7% - -
Sonae Industria 0.50 0.77 53.8% Buy High 0.1 0.1 70 2.4 5.7 -5.8 -5.8 2.7 -0.62 -0.22 -0.04 loss loss loss 0.7 0.7 0.6 10.4 10.2 8.1 61.8% 27.2% 0.5
Altri 1.92 1.75 -8.9% Reduce High 0.5 0.6 394 -1.7 8.4 -1.6 69 20.8 0.25 0.28 0.28 6.2 6.9 6.7 1.9 1.9 1.7 7.3 6.6 6.0 1.5% 1.5% 1.7
Portucel 2.66 2.50 -5.9% Reduce Medium 0.7 0.7 2,043 -0.9 1.0 0.3 28.3 16.8 0.28 0.23 0.23 8.3 11.8 11.7 1.5 1.8 1.7 5.9 7.3 7.0 9.4% 8.1% 1.4
Cimpor (2) 3.12 - - - - 0.1 0.1 2,097 -0.3 -0.6 -9.8 -13.3 -9.8 - - - - - - - - - - - - - - -
Construction 0.8 0.7 612 0.3 6.9 20.1 129.2 62.4 - - - - - - - - - - - - - - -
Mota-Engil 2.72 2.20 -19.1% Sell High 0.8 0.7 557 -0.7 6.6 26.1 161.5 73.6 0.20 0.23 0.30 7.9 11.8 8.9 0.7 0.8 0.7 6.0 7.2 6.3 6.6% 4.0% 1.2
Oil & Gas
Galp Energia 12.54 16.20 29.2% Buy High 15.9 16.1 10,395 -0.7 8.0 0.7 7.2 6.6 0.43 0.42 0.39 27.1 30.1 32.2 0.7 0.8 0.7 13.6 13.0 12.8 2.0% 2.3% 1.9
(1) We do not have a recommendation on BCP, as Mib is a registered trademark of BCP; (2) Not Covered; (3) Zon Multimedia figures assume merger with Optimus
Change (%) EV / EBITDA Div Yield2013/08/16
Latest
Pr (€)
Target
YE13RatingUpsd
Page 11 of 12
Millennium investment banking Weekly 16 Augus t 2013
DISCLOSURES � This report has been prepared on behalf of Millennium investment banking (Mib), a registered trademark of Banco Comercial
Português, S.A. (Millennium bcp).
� Millennium bcp is regulated by Comissão de Mercado de Valores Mobiliários.
� Recommendations:
Buy means more than 10% absolute return;
Neutral means between 0% and +10% absolute return;
Reduce means between -10% and 0% absolute return;
Sell means less than -10% absolute return.
� Unless otherwise specified, the time frame for price targets included in this report is current year-end or next year-end.
� Risk is defined by the analyst’s view in a qualitative way (High, Medium, Low).
� Usually we update our models and price targets in between 3 and 9 months.
� Millennium bcp prohibits its analysts and members of their households to own any shares of the companies covered by them.
� BCP group may have business relationships with the companies mentioned in this report.
� Millennium bcp, expects to receive or intends to seek compensations for investment banking services from the companies
mentioned in this report.
� The views expressed above, accurately reflect personal views of the authors. They have not and will not receive any
compensation for providing a specific recommendation or view in this report. There were not any agreements between the
companies covered and the analysts regarding the recommendation.
� Analysts are paid in part based on the profitability of BCP group, which includes investment banking revenues.
� BCP group has more than 2% of EDP.
� BCP group was chosen to evaluate EDP regarding the 8th stage of the privatization process.
� BCP group was chosen to evaluate REN regarding the 2nd stage of the privatization process.
� A member of the Executive Board of Directors of Millennium bcp is member of the General and Supervisory Board of EDP -
Energias de Portugal, SA.
� Banco Millennium bcp Investimento, S.A. (merged into Millennium bcp) was chosen as a joint global coordinator of the Initial
Public Offering of EDP Renováveis.
� Banco Millennium bcp Investimento, S.A. (merged into Millennium bcp) was part of the consortium, as a Co-Leader, of BES rights
issue, done in April 2009.
� Millennium bcp was part of the consortium, as Co-Manager, of BES rights issue completed in May 2012.
� Millenniumbcp through its investment banking department is providing investment banking services to Tagus Holdings S.a.r.l.
(“Offeror” in the launch of a tender offer over Brisa - Autoestradas de Portugal, S.A. shares).
� Recommendations on Millennium bcp covered companies (%)
DISCLAIMER
This information is not an offer to sell or a solicitation to enter into any particular deal or contract. It consists of data compiled by or of opinions
or estimates from Banco Comercial Português, S.A. and no representation or warranty is made as to its accuracy or completeness. This
information is merely an auxiliary means of analysis to be used by its recipients, who will be solely responsible for its use, including for any
losses or damages that may, directly or indirectly, derive from it. Its reproduction is not allowed without permission from the BCP group. The
data herein disclosed are merely indicative and reflect the market conditions prevailing on the date they have been collected. Thus, its accuracy
and timing must absolutely be confirmed before its usage. Any alteration in the market conditions shall imply the introduction of changes in this
report. This information / these opinions may be altered without prior notice and may differ or be contrary to opinions expressed by other
business areas of BCP group as a result of using different assumptions and criteria. The analysis contained herein is based on numerous
assumptions. Different assumptions could result in materially different results.
Recommendation Jul-13 Jun-13 Mar-13 Dec-12 Jun-12 Dec-11 Dec-10 Dec-09 Dec-08 Dec-07 Dec-06 Dec-05 Dec-04
Buy 68% 77% 76% 77% 78% 68% 79% 63% 54% 41% 37% 30% 63%
Neutral 9% 9% 10% 12% 4% 11% 7% 15% 4% 27% 11% 40% 6%
Reduce 18% 14% 14% 4% 0% 0% 0% 7% 0% 0% 21% 5% 6%
Sell 5% 0% 0% 4% 7% 7% 4% 4% 0% 14% 16% 5% 0%
Unrated/Under Revision 0% 0% 0% 4% 11% 14% 11% 11% 42% 18% 16% 20% 25%
Performance 3.0% -4.6% 3.0% 20.4% -14% -28% -10% 33% -51% 16% 30% 13% na
PSI 20 5,721 5,557 5,822 5,655 4,698 5,494 7,588 8,464 6,341 13,019 11,198 8,619 7,600
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