Edison Investment Research - Centrale del latte di Italia (CLI) Centrale del Latte dItalia - Recovery continues

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Edison Investment Research

Sara Welford

Centrale del Latte d'Italia - Recovery continues

Centrale del Latte d'Italia’s (CLI) price increases – which were successfully implemented during H1 – continue to drive the recovery. Underlying sales growth excluding M&A was an impressive 14% during Q317, and EBITDA margin more than doubled from 2.0% in Q316 to 5.4% in Q317. Revenue synergies continue to feature following the acquisition of CLF, as cross-selling of products across the CLI platform continues to contribute to growth. In October CLI announced that it had signed an agreement with Alibaba to sell its UHT milk online to Chinese consumers. While we have cut our near-term estimates to reflect recent increases in raw material costs, we raise our medium-term revenue growth by 100bp to capture the potential growth opportunity in China. Our fair value rises to €3.25/share (from €2.94 previously).

15/11/2017 5 EN

Underlying

Centrale del latte di Italia

Centrale del Latte d'Italia SpA, formerly Centrale del Latte di Torino & C SpA, is an Italy-based company engaged in the dairy products sector. The Company deals with the processing, transformation and sale of milk and dairy products. The Company offers packaged products in the fresh and ultra-fresh, and fresh vegetables. Its product's portfolio encompasses fresh pasteurized milk, ultra-high temperature processing (UHT) milk, yogurt, creams, fresh pasteurized and UHT cream, fresh-cut products, including vegetables and fruits, as well as other packaged products. Its offer consists of salads, juices, desserts, eggs, butter, fermented milk using acidophilus and bifida, and a range of pastas and cheeses, among others. Production is carried out in production units located in Turin, Casteggio (Pavia), Bardineto (Savona), Vicenza and Rapallo (Genoa). The Company operates through Latte Rapallo SpA, Centrale del Latte di Firenze Pistoia Livorno SpA, and Centrale del Latte di Vicenza SpA.

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IT0003023980 Italy

Provider

Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Sara Welford

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Centrale del Latte d'Italia - Steady performance in a tough environment

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Centrale del Latte d'Italia - Recovery continues

Centrale del Latte d'Italia - Steady performance in a tough environment

Centrale del Latte d'Italia - Deteriorating consumer environment

Centrale del Latte d'Italia - Steady progress

Basilea Pharmaceutica - Cresemba milestone payments continue to roll in

AAC Clyde Space - Solid start to the year with further order growth

Tinexta - Typical seasonality in Q124

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