Update on Integer.pl S.A.
Integer.pl (ITG) disappointed investors in 2015 and will likely report a significant operating loss. While ITG raised in total PLN 474.8m for easyPack from new investors and the spin-off of InPost, the company lost the contract from the Polish Ministry of Justice and did not deliver on the promises it made relating to the expansion of the APM network and its profitability in the key markets UK, Italy, France and Russia. We believe there is very low visibility at the company and thus decided to show only a fair value for the stock. Our DCF model of ITG derives a 12-months fair value of PLN 136.80 per share compared to PLN 192.20 before. Although the new conservative government wants to prefer Poczta Polska in public tenders, ITG’s Polish business should nevertheless exhibit rapid growth due to its parcel business as well as courier services, which reached the break-even after just seven months. In the international APM business, we believe that ITG is now focusing on profitability instead of network expansion, which should allow it to reach the break-even on EBITDA level in 2017E. In our view, this is realistic given rapid growth of E-Commerce worldwide.​
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