BIC: Still some short-term hurdles to overcome
NEUTRAL, Fair Value EUR87 vs. EUR90 (+9%)
In Q1, BIC showed a great resilience in Consumer Business by reporting a +1.8% LFL growth despite a record high Q1 12 (+10.6%), however BIC APP gave no signs of improvement and a new management has been in place since January. In our view, the low visibility on the profitability performance remains after the disappointing Q1 (-240bp to 15.6%), illustrated by the cautious normalised IFO guidance for 2013 in both businesses. Hence we assume the FY13 normalised IFO margin to decline 110bp (to 18.3%) and we revise down our 2014-15 normalised IFO margin forecasts by 5% on average. We are notching down our FV to EUR87 vs. EUR90 and reiterate our Neutral rating.
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