Campbell Soup: Third Point confirms 8.42% active group stake (42.70 +0.72)
- The Reporting Persons acquired most of their Capital Stock following the Issuer's disastrous fiscal 3q18 earnings report and the unexpected departure of the Issuer's Chief Executive Officer Denise Morrison. The Reporting Persons believe that the subsequently announced strategic review, if conducted properly, will create significant value for the Issuer's shareholders.
- The Reporting Persons understand from our conversations with the Issuer's Interim Chief Executive Officer, Keith R. McLoughlin, and the Issuer's public statements that all options, including a sale, are being evaluated in the ongoing strategic review. The Reporting Persons are encouraged by recent press reports suggesting that a sale process is already underway. Given the significant obstacles facing the Issuer, the Reporting Persons believe that the only justifiable outcome of the strategic review is for the Issuer to be sold to a strategic buyer.
Adidas has been forced to retrospectively tweak its 2016 financial report after an accounting watchdog took issue with the book value of Reebok’s brand, in the latest embarrassment related to the German company’s botched 2006 acquisition of the US sportswear maker.
Adidas on Thursday said it booked an impairment “in the mid-triple digit million euro range” to its 2016 financial results after the Financial Reporting Enforcement Panel concluded that “the historical book value related to the Reebok trademark was not sufficiently proven by the annual impairment test conducted at the time”.
Adidas acquired Reebok in 2006 and since then has been struggling with weak sales and lacklustre profitability at the US division. Chief Executive Kasper Rorsted rebuffed shareholder calls to sell brand and kicked off another restructuring plan. In the second quarter of 2018, Reebok sales fell by 3 per cent due to weak demand for its training and running kit.
“[The] retrospective accounting restatement has no impact on the company’s cash position,” Adidas stressed in a statement, adding that neither its 2018 income and cash flow statements nor its short- and long-term guidance will be affected.
The world’s second largest sportswear maker after Nike confirmed its full-year guidance after beating analysts’ expectations for growth and profits in the second quarter of 2018 as the group increased internet sales and made headway in North America and Asia.
Adidas increased quarterly sales by 4.4 per cent year-on-year to €5.3bn, compared to €5.2 expected by analysts, according to data by S&P Global Market Intelligence. Adjusted for foreign-exchange movements, the increase was 10 per cent.
Operating profit in the three months up to June was 17.2 per cent higher than a year ago and at €592m exceeded analysts' expectations of €546m. Adidas operating margin improved by 1.2 percentage points to 11.3 per cent.
Adidas said it is on track to meet its full-year guidance of 10 per cent revenue growth excluding foreign exchange movements, as sales North America and Asia-Pacific are increasing at double-digit rates. It wants to improve its operating margin to 10.3-10.5 per cent after 9.8 per cent last year.
Ageas does not expect hostile takeover bid (translated)
09 AUG 2018
The Belgian insurance company Ageas (EURONEXT:AGS) is not expecting a hostile takeover bid, Ageas CEO Bart de Smet told the Belgian daily De Tijd in an interview.
A recent report said that Ageas is being eyed by the Chinese conglomerate Fosun, a company that already owns a 3.10% stake in Ageas. De Smet said that these are only rumours and that he has not received any notification that Fosun is working on a bid.
De Smet also said that such rumours show that Ageas is an interesting and a vulnerable company when it comes to takeovers.
Such takeovers may now become more attractive, because Ageas has just settled a disagreement with investors from Fortis, a Belgian bank that closed down in 2010 due to financial problems and of which Ageas was a part, the report said.
RBC PRE-MARKET INDICATIONS
ESTOXX: UNCH / FTSE: +18bp / CAC: UNCH / DAX: +8bps
*ADECCO: 0% Q2 results in light, EBITA touch better.
*ADIDAS: +2% Q2 results solid, gross margins better, FY'18 guidance confirmed.
*BTG: -4% gets non-approvable letter from US FDA for ELEVAIR.
*CINEWORLD: 0% H1 revenue in line, confident FY to reach expectations.
*COCA-COLA: +1% H1 in line, sees FY'18 rev growth and margin improvement.
*D. TELEKOM: +2% Q2 sales in line, raises '18 adjusted EBITDA guidance.
*G4S: -2% H1 numbers miss, strong into print.
*HANNOVER RE: +2% Q2 results beat, net income ahead, reiterating guidance.
*HEXAGON: -1% CEO sells half of holding.
*KBC: +1% Q2 net income 1.8% above, solid numbers.
*KERRY GROUP: -1% H1 adjusted EPS miss, FY'17 guidance updated.
*LEGAL & GENERAL: 0% H1 numbers mixed, operating profit ahead, net light.
*MERCK: -5% Q2 profit light, EBITDA miss, liquid crystal decline.
*ORSTED: 0% Q2 EBITDA beat, buys LINCOLN for $580M.
*PANDORA: -1% CEO steps down, after Monday's profit warning.
*RANDGOLD: -2% Q2 miss on lower production, higher costs, EPS miss.
*SAVILLS: -1% H1 numbers in line, challenging conditions, pretax light.
*TUI: -2% confirms FY'18 forecast, summer outperformance "less likely".
*ZURICH INSURANCE: +1% H1 numbers in line, net income ahead, boosts profit forecasts.
Implications for European equities:
- European equities around 3% lower than our base case: In our trade war scenario, we expect Euro area PMI momentum to remain deeply negative over the coming months rather than improving to slightly positive levels as in our base case, leading to a meaningful drag on European equity performance. However, this would be partly offset by the boost from a weaker euro and lower Euro area real bond yields, leaving the Stoxx 600’s implied fair-value around 3% below our base case on average over the coming months, with a trough of below 350 by late September (10% below current levels).
- Sectors: The sectors that would see the largest declines in fair-value relative to our base case would be banks (-12%), autos (-9%), consumer durables (-8%) and mining (-8%). Banks would suffer from the weakness in Euro area PMIs in combination with lower Bund yields, while mining would see a drag from a lower copper price than in our base case, in turn a function of a stronger USD and weaker China PMI momentum. Yet, in this scenario we would remain overweight mining, given that our models would still point to 11% upside in the sector’s price relative by late Q4, while we would downgrade banks from overweight to underweight (as our models would point to 6% downside by the end of our six-month forecast horizon in our trade war scenario, compared to 6% upside in our base base). The sectors that would see the biggest rise in the model-implied fair-value by the end of our forecast horizon are pharma (+7%) and food & beverages (+6%), both boosted by lower US bond yields in our trade war scenario.
- Countries: Italy would see the biggest fall in fair-value (-7%) in our trade war scenario, as this highly cyclical index would suffer from weaker Euro area PMI momentum and lower Bund yields (a key driver of performance, due to the high weighting of financials in the index). Germany and Spain would also see declines in their fair-value (4% and 5%, respectively), largely because of the impact of weaker Euro area PMI momentum. Switzerland would see the largest rise in fair-value (3%) in our trade war scenario, primarily as a result of its inverse relationship with US bond yields. Overall, we would not envisage any country recommendation changes in our trade war scenario.
- Styles: In a trade war scenario, the model-implied fair-value of European value versus growth would drop by around 3% relative to our base case, with lower oil prices acting as the main drag. Yet, this would still leave our models pointing to upside for the trade over the coming months. Small caps versus large cap would also see a fall in fair-value of around 3%, leaving most of the six-month forecast trajectory below current levels. Offsetting this, however, is the fact that small caps’ domestic exposure makes them less vulnerable than large caps to a possible shock to global trade activity as a consequence of rising protectionism. As a consequence, we would remain benchmark small caps versus large caps in our trade war scenario.