EUR 100.00 For Business Accounts Only

IBERIAN DAILY 02 MARCH (ANÁLISIS BANCO SABADELL)

NEWS SUMMARY: AMADEUS, AMPER, CAF, IBERDROLA, REDEIA, TALGO, TELEFÓNICA, UNICAJA.

We begin a highly volatile week
European stock markets ended last week with corrections whereas doubts persist in the technology sector and the geopolitical tension between the US and Iran continues. The Ibex endured battery of earnings and ended above 18,000 points. In the STOXX 600, the best-performing sectors last week were Utilities and Real Estate, whereas Basic Materials and Telecoms had the biggest drops. On the macro side, in Spain, February’s inflation did not slow down, as expected, remaining at 2.3% YoY, with the core data climbing to 2.7%. In Germany, February’s inflation slowed down more than expected to 1.9% and February’s unemployment rose less than expected. In the US January’s production prices slowed down less than expected, with December’s construction expenses rising more than expected as did February’s Chicago PMI. In geopolitics, Iran has stated that it has closed the Strait of Hormuz after the attack by the US, and while Trump has asked Iranian generals to relinquish power, they have refused to negotiate with the US in a conflict that could take longer than initially expected. Germany France and the UK have warned that they will defend their interests in the region. Meanwhile, OPEC+ agreed to increase crude oil production by 206,000 b/d.
What we expect for today
European stock markets would open with losses near -2.0% at the opening bell, with the Energy sector in positive numbers along with Defence, whereas cyclical sectors like Cyclical Consumption (Travel & Leisure, Retail and Autos) and Financials would be among the hardest hit. Currently, S&P futures are down 1.9% (the S&P 500 ended flat vs. the European closing bell). Asian markets are mixed (China’s CSI 300 +0.3%, Japan’s Nikkei -1.4% and South Korea’s Kospi closed).
Today in the euro zone and Spain we will learn February’s final manufacturing PMI, in Germany January’s retail sales, and in the US February’s manufacturing ISM. In US 4Q’25 Results, Berkshire Hathaway among others, will release their earnings.



COMPANY NEWS

AMPER. Weak FY2025 Results in sales, good in defence and awaiting M&A. We reiterate our OVERWEIGHT recommendation,
Results came in far below expectations in sales (due to the slowdown of the offshore wind business) and far above in EBITDA (mainly thanks to Defence). EBITDA’25 totalled € 46 M (+31% vs. +16% BS(e)) with a significant increase in margins to 16.4% (+7.2pp vs. 2024). The market reaction was negative (the share price slid -6.8% vs. -0.8% IBEX), which we believe is explained by the sharp drop in sales’25 (and 2026), higher debt (WC) and the delay in announcing M&A deals. We will raise our estimates and valuation based on the good data in Defence and profitability.

CAF. FY2025 Results below expectations in sales, in line in EBIT and better in debt. OVERWEIGHT.
Sales came in below expectations due to Rail despite the improvement of Solaris. EBIT’25 totalled € 246 M (+13.9% vs. +16.2% BS(e) and +13.9% consensus), with a 5.5% margin (vs. 5.1% in 2024). NFD fell to € 188 M (0.5x EBITDA) better than our € 240 M estimate thanks to cash generation (€ 88 M in 2025; on WC containment, with € 94 M consumption vs. € 120 M BS(e)). The market reaction last Friday was lacklustre (-0.4% vs. -0.5% IBEX), where Rail’s worse data are offset by the improvement of Solaris and cash generation. We reiterate our positive stance on the company.

TALGO. Weak FY2025 Results, hit by the shareholding and financial restructuring process and DB contract. UNDERWEIGHT
Sales’25 totalled € 618.2 M (-7.6%), hit by the adjustment of the modification of DB contract (known), and excluding this impact sales would fall slightly by -0.7%. EBITDA’25 was in positive territory at € 0.6 M (vs. € -46.7 M in 2024). NFD’25 fell by -2.5% after the capital increase and convertible bond issues (€ 150 M) to € 393.7 M. We do not foresee any impact from these weak results, marked by an intense year focused on the resolution of the shareholding and financial restructuring process.

TELEFÓNICA. Potential interest for 1&1. OVERWEIGHT
Once again there are rumours suggesting TEF’s interest in 1&1 (subsidiary of United Internet, the fourth-largest mobile operator and third-largest in broadband in Germany) to acquire the business in a deal worth € 4.5-5.0 Bn (which we understand is EV). Positive news if confirmed (TEF rose +5% on Friday), as a deal of this kind would strengthen TEF’s scale in the largest European market. We calculate that if a 100% cash deal is made, TEF’s NFD/EBITDA would reach ~3.3x (vs. current ~2.9x) and would be at the limit of a possible impact on the company’s credit rating. Thus, we cannot rule out the possibility that at least part of the deal (50%) could be financed with a capital increase.