Report
EUR 506.10 For Business Accounts Only

Back on its feet

Roularta is Belgium's leading media company with a core business in Printed Media (high-end business and news magazines as well as local free sheet) and with a 50% stake in Medialaan, Belgium's leading private free-to-air TV & Radio broadcaster (importantly, Medialaan weighs 78% of group earnings). The stock is trading at a significant discount to peers and our fair value estimate for Roularta,based on SOTP, is €30/share. Following the exit of loss-making French publishing business in early 2015, we expect Roularta to (1) expand ROCE to 14% by 2017e from an average of 4% since 2006, (2) improve its earnings power (15% EPS CAGR 2015-17e) and (3) significantly deleverage its balance sheet (net cash by 2017e). We see two value drivers going forward: (1) a rerating of the stock triggered by the value of Roularta's 50% stake in Medialaan (we estimate €22.6/share, well above Roularta's current share price) and (2) the earnings growth potential from the core publishing activity through efficiency improvements. The stock should attract a wider range of investors, including those seeking dividend yield, turnaround plays as well as classical GARP profile. Stock liquidity remains, however, an issue which could be solved, we believe, by improved visibility and understanding by investors.​

Underlying
Roularta Media Group N.V.

Roularta Media Group NV (RMG) is a Belgium-based company engaged in the publication and printing of news and magazines, newspapers and free sheets, as well as in the audiovisual media and electronic publishing. For the wider public, RMG produces free sheets, open network television (TV), radio and the Vlan.be Internet site. For special target groups, RMG produces magazines, a news TV station and portal sites. Its printed media business includes the sale of all printed publications, such as free sheets, newspapers, magazines, newsletters, books and related services. its audiovisual media business comprises advertising on TV and radio, production and broadcasting, as well as all related services. In addition, through bvba Bright Communication and bvba Bright Communication Antwerpen, the Company organizes STERCK. networking events and publishes STERCK. magazine.

Provider
Merodis Equity Research
Merodis Equity Research

Merodis Equity Research offers bespoke equity research backed by our extensive experience in equity markets at top-tier investment banks in London, Paris and Brussels serving institutional investors worldwide. Analysts at Merodis Equity Research have achieved #1 Extel rankings in the past for Benelux equity research.

Please note that we may have been mandated by the company to produce the research report (clearly indicated on the front page of the report), but that (1) our fees are not linked at all to our opinions and views, and (2) that we refund the company with the proceeds from the sale of our research as to remain 100% independent. This is an innovative business model, which we hope will contribute to improving the visibility towards worldwide investors of small & mid caps that deserve wider market attention and ownership.

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