GDF Suez: H1 2013 results – Refocusing strategy well on track
BUY, Fair Value EUR19 (+14%)
We reiterate our Buy rating on GDF Suez following reassuring H1 2013 results. Management sounds very confident of achieving the high-end of the EUR3.1-3.5bn recurring net income guidance, providing 4 to 6% upside to consensus. More importantly to us, refocusing looks well on track: i) net debt of EUR30.5bn (incl. hybrid bonds) is ahead of the YE14 target (EUR30.0bn); ii) 37% of the 2012-15 savings plan is already implemented, providing room for positive surprise; and iii) solid progress has been made in International activities, which more than offset the underlying weaknesses in Europe in H1 (adj. for nuclear reactor outages in Belgium and positive weather effects). The dividend still appears to us very solid given the cash-flow profile of the group, despite high pay-out ratio.
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