Spread Research

​Spread Research is France's first Rating Agency, registered by ESMA (European Securities and Markets Authority) and a leading European Independent Credit Research firm, founded in 2004 and based in Lyon, France. Our experienced team offer key research services using a wide range of investment strategies and research methodologies for the High Yield, Emerging Markets, Convertibles and Loan Markets.

 

Joan Sehim

Gamenet 2q18 - sport payout change offsets regulation impact, goldbet to boost profitability

Gamenet, Italy’s No. 3 gaming firm, reported good 2Q18 results with stable sales yoy at €148m and EBITDA up 9% yoy to €21m, giving a 14.5% LTM margin as of June 2018 against 13.2% as of December 2017. Once again, Gamenet has adjusted its sport betting payout (winnings returned to players), lowering it to 80.3% during the quarter from 85.7% last year, to mitigate the impact from the tightening of regulation on gaming machines initiated in May 2017.

Joan Sehim

INTRALOT- Special Comment

We initiated coverage in February with an Underweight recommendation on the Intralot 6.75% 2021 and 5.25% 2024 bonds, concluding that the group’s emerging profile and recent bad track record in tenders would weigh on bond prices. Since then, the 2021 and 2024 bonds have lost around 20-25 points to 86.375 and 78.375 respectively, now yielding at a high 10-12% to worst. The freefall started in May amid concerns over the group’s vulnerably to the Argentinean peso and Turkish lira (around 29% EBITDA), on top of contract losses in Morocco and South Carolina - in favor of Sisal and IGT respectively ...

Benjamin Sabahi

IQVIA- 2Q18 Comments

The world’s largest provider of healthcare information reported strong numbers for 2Q18. Reported revenues increased by 9% yoy in 2Q18 and +7.7% excluding FX. This was above market expectations and an intensification of the positive trends seen in 4Q17 (+5.5%) and 1Q18 (+5.2%) excluding FX impacts. This was down to a mix of accelerated organic growth coupled with M&A contributions, fully reflecting the investments in the next generation of clinical trials.

Marc Pierron

SACYR- 2Q18 Comments

Spanish construction company Sacyr reported strong 2Q18 results, driven by higher activity in most of its divisions. Indeed, total revenue increased by 24% yoy to €916m with the main contribution from Construction (44% of 2Q18 revenue) and Concessions (20%) recording respectively a yoy progression of 44% and 40%.

Anthony Giret

FNAC DARTY- 1H18 Comments

Fnac Darty has published another set of satisfactory results for 1H18, despite a slight decline in the top line. Sales decreased by 0.5% yoy to €3.2bn in H1, with LFL of -0.4%, due to theweak consumption environment in France, mainly in the competitive IT market (expected growth in household consumption spending for engineered goods is 1.4% for 2018, against 2.6% in 2017), and strikes in Q2. 

KLOECKNER & CO 4Q16, Strong quarter and decent prospects for FY17

​The German producer-independent steel and metal distributor reported a strong increase in profitability in 4Q16. While revenue declined by 4% yoy to €1.4bn on the back of lower volume in Europe and USA, partially due to location closures, reported EBITDA more than tripled to €37m boosted by favourable market effects as steel prices increased yoy. After a difficult FY15, penalised by declining steel price, FY16's EBITDA rebounded strongly to €196m driven by the recovery of the steel market. KCO’s conservative guidance expects FY17 to have slightly better EBITDA, with demand remaining subdued i...

Air Berlin Announces Exchange Offer for 2019 Convertible Bond

​Air Berlin Finance B.V, the subsidiary of Germany’s second largest airline, announced today an exchange offer for its €140m 6.00% convertible bond due 6 March 2019, but with a holder put option at the principal amount on 6 March 2017. The exchange offer consists of a one for one exchange of the existing convertible bond for a new convertible bond. The new convertible bond will have the same maturity date (6 March 2019), higher coupon of 8.50% (vs. 6.00%), lower conversion price of €1.15 (vs. 2.11), and a holder put option on 29 December 2017 at the principal amount. In addition to the exchang...

Cable and Telecom Sector Recommendations

​The Cable & Telecom sector has been active in terms of M&A in 2016. Mobile/Fixed convergence has become key in most European countries. Liberty Global, the largest cable operator in Europe, has been very active with the merger of Ziggo and Vodafone NL in the Netherlands and the acquisition of Base in Belgium. In Italy, the commercial agreement signed by Vodafone and Wind with Enel Open fiber will accelerate the momentum. On the contrary, mergers between mobile players have become increasingly difficult since Margrethe Vestager has been appointed the EU Competition Commissioner, as attested by...

AIR BERLIN 1Q16 RESULTS

​In contrast of the growing European market recording yoy +5.4% in revenue passenger kilometres (RPK) and +4.5% in available seat kilometres (ASK), Air Berlin continued its network rationalization with a yoy decrease of -7.0% in RPK and - 7.2% in ASK. It contributed with the dispute about the approbation of codeshare and lower tourism traffic to a revenue decline of -7.1% yoy at €737m. Adjusted EBITDAR improved slightly to €5m compared to the -€27m last year due to a 4.2% yoy decrease in cost per ASK thanks to lower fuel prices.

NUMERICABLE-SFR 1Q16

​SFR, the #2 French telecom operator, reported disappointing 1Q16 results.The topline was down by 6.1% to €2.6bn (vs.-3.5% in FY15). Adj.EBITDA came in at €851m, much weaker than 1Q15 i.e. a margin of 33.1% vs.34.1% in 1Q15. SFR also continued to largely underperform its competitor Orange in both fixed and mobile. The promotion activity initiated in 3Q15 has accelerated during the recent consolidation talks, pressurizing both mobile and fixed ARPU. Mobile customer erosion, which was halted in 4Q15 (+54k qoq),came back in 1Q16 (-276k qoq).

Joan Sehim

Gamenet 2q18 - sport payout change offsets regulation impact, goldbet to boost profitability

Gamenet, Italy’s No. 3 gaming firm, reported good 2Q18 results with stable sales yoy at €148m and EBITDA up 9% yoy to €21m, giving a 14.5% LTM margin as of June 2018 against 13.2% as of December 2017. Once again, Gamenet has adjusted its sport betting payout (winnings returned to players), lowering it to 80.3% during the quarter from 85.7% last year, to mitigate the impact from the tightening of regulation on gaming machines initiated in May 2017.

Joan Sehim

INTRALOT- Special Comment

We initiated coverage in February with an Underweight recommendation on the Intralot 6.75% 2021 and 5.25% 2024 bonds, concluding that the group’s emerging profile and recent bad track record in tenders would weigh on bond prices. Since then, the 2021 and 2024 bonds have lost around 20-25 points to 86.375 and 78.375 respectively, now yielding at a high 10-12% to worst. The freefall started in May amid concerns over the group’s vulnerably to the Argentinean peso and Turkish lira (around 29% EBITDA), on top of contract losses in Morocco and South Carolina - in favor of Sisal and IGT respectively ...

Benjamin Sabahi

IQVIA- 2Q18 Comments

The world’s largest provider of healthcare information reported strong numbers for 2Q18. Reported revenues increased by 9% yoy in 2Q18 and +7.7% excluding FX. This was above market expectations and an intensification of the positive trends seen in 4Q17 (+5.5%) and 1Q18 (+5.2%) excluding FX impacts. This was down to a mix of accelerated organic growth coupled with M&A contributions, fully reflecting the investments in the next generation of clinical trials.

Marc Pierron

SACYR- 2Q18 Comments

Spanish construction company Sacyr reported strong 2Q18 results, driven by higher activity in most of its divisions. Indeed, total revenue increased by 24% yoy to €916m with the main contribution from Construction (44% of 2Q18 revenue) and Concessions (20%) recording respectively a yoy progression of 44% and 40%.

Anthony Giret

FNAC DARTY- 1H18 Comments

Fnac Darty has published another set of satisfactory results for 1H18, despite a slight decline in the top line. Sales decreased by 0.5% yoy to €3.2bn in H1, with LFL of -0.4%, due to theweak consumption environment in France, mainly in the competitive IT market (expected growth in household consumption spending for engineered goods is 1.4% for 2018, against 2.6% in 2017), and strikes in Q2. 

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