TheChek News Flow

ZODIAC - Q3 sales beat and guidance maintained for op profit. SI 6.5%.....+5%

INDITEX - Solid. EBITDA +1% ahead driven by top line with revs +17%.......+2%

JIMMY CHOO - Trading update inline but stock -15% in last 2 months......+1-2%

AIRBUS - Found temp solution to replace defective part of engine; Echos.+1-2%

UK MINERS - Copper +0.6%, Gold +0.2%, Iron Ore fut unch with BHP OZ -1.1%.+1%

INFINEON - +ve on Auto demand as Chin Poon suggests orders full until YE..+1%

OXIG - FY inline with EPS ahead at 49.2 v bbg cons 48.6. Net debt better..+1%

SCHNEIDER - Aveva terminates takeover talks with Schneider Electric.......+1%

SAS - Says reached wage agreement with Swedish pilot union. Ends strike.+0.5%

GALAPAGOS - R&D in US today. Of note 2 early stage drugs get through PI...u/c

TELENOR - First operator to remove EU roaming fees for Swedish customers..u/c

H&M - May sales +9% cFX, an improvement on 5% in Apr, v bbg cons +10.8%..u/c

ERICSSON - Dagbaldet now reporting 25k job reductions & divestment of biz.u/c

ABB - Said to consider rival bid if solicited by Kuka according to WSJ..-0.5%

YARA - We DOWNGRADE to Underperform, PO NOK 250 on deteriorating earnings.-1%

BERKELEY - PBT inline & on target for '18 BUT reservations -20% in 5mnths.-3%

AVEVA - Ends talks with Schneider. Think will trade back to Tues level....-8%

RBC PRE-MARKET INDICATIONS:

*ABB: 0% WSJ reports may consider rival KUKA bid.

*AVEVA: -4% terminate takeover talks with SCHNEIDER.

*BERKLEY GROUP: +1% Strong FY16 PBT ahead of guidance that was raised in March.

*H&M: -3% MAY sales up 9% versus estimated 11%, under pressure for Q2 results.

*INDITEX: +3% LFL sales +11% versus estimated +9%, above forecasts.

*JIMMY CHOO: +2% on track to deliver margin improvement, good start to 2016.

*RECKITTS: 0% rumours of PERRIGO (+9.6%) bid over night.

*SCHNEIDER: 0% AVEVA terminate takeover talks.

*WOLSELEY: 0% Census Bureau shows building material growth -3.6% in MAY.

*ZODIAC: +2% Q3 sales ahead of expectations, outlook cautious.

CS:

ABB unch Would consider making a rival bid for KUKA

Airbus M/P Co to deliver French Defense Ministry ninth A400M

Astra Zen +0.5% Farxiga gets tougher FDA warnings. (kidney treatment)

Autos +1% Decent bounce in Chinese peers Guangzhou (+3.7%)

Aveva -8-9%

CSFB pre mkt Termination of discussions with Schneider Electric SE

Berkeley grp -5% All inline, but outlook very cautious

Cosmo Pharma +2% Says Eleview has been granted the CE mark for mkting in EU

FCC +1% Inversora Carso exercises option to buy 9.45m FCC share

Iberdrola -1% IBE & RDS faces fine in US related to mkt manipulation

Inditex +1% Q1 revs 4.88 vs 4.84, EBITDA 955m vs. 942m

H&M unch Numbers look light but stock on 3 year lows

Jimmy Choo +3% Made a good start to the year, trding inline

Kuka +2-3% Midea Offer for Kuka Shares to Begin Tomorrow (€115/sh)

Luxottica +2-3% CS initiated with O/P on valuation

Michelin unch May tyre data a touch soft, European volumes -2%

Miners +1% Metals holding up, Aussie names +1%

Oils unch API surprisingly negative, ADRs added 50bps

OVS -1% Results mixed, sales a little disappointing

Oxford instr M/P FY revs £361.4m is slightly ahead, OUTLOOK INLINE

Royal Dutch -0.5% IBE & RDS faces fine in US related to mkt manipulation

Restaur grp M/P New CFO from Monarch travel group

Rheinmetall -1% Subsidiary said to be hacked by Chinese

Schneider +2% Schneider/Aveva terminate talks

VW +1% Said to Plan Merging Components Units, Weigh Asset Sale

Zodiac +3-5% No incremental negs, revs 5% ahead of consensus exp

'Dr No'. The Antitrust Authority has rejected the Canal+/BeIn Sports deal.

However, hope is not lost. According to its head Bruno Lasserre the Authority

"would now work on a clear regulatory framework for 2017-22, which will

give Canal+ a clear path to deploy its strategy".

'Ice Age'. True, visibility on subs growth – or stabilization – in France is

elusive. But Canal+ is today implicitly valued at a meagre ~€1-2bn – too low,

in our view: i) in France, cost-cutting ( €200m+ according to Les Echos) is likely

to be intensified, protecting earnings. New offers, due in H2, may also help

commercial momentum. ii) Africa, free-TV and Studiocanal growth should

more than offset domestic pay-TV weakness. iii) If the turnaround

succeeds,Vivendi 2019 EPS would be >15% too low and Canal+ would be

implicitly valued at ~2x 2019e EBITA.

'Give life back to Music'. UMG trends have been mildly disappointing so far.

We remain optimistic though as industry trends are strong. We expect organic

growth to accelerate from 0-2% to 3-5% as i) mix continues to improve (more

streaming, less physical/downloads); ii) 2014-15 market share losses should

reverse; iii) there is an opportunity to extract more money from ad-supported

music platforms.

'Command & Conquer'. Investor feedback suggests they are worried about

Vivendi capital allocation. Since 2014 though, €8.6bn has been returned to

shareholders against 'only' €5bn invested in bolt-on M&A and stakes. The

€2.5bn investment in TI is out of the money for now but fairly immaterial at

the Vivendi level (-€0.5ps).

It's tough out there. We cut our estimates and PT to €19 to reflect tougher

short-term trends at Canal+ and a lower value for TI (-35% YTD), but we still

see >25% upside.

'Bullish'. After a poor run since going xdiv, the risk/reward skews positively (-

10/+70%). We expect cost-cutting at Canal+ and acceleration in Music trends

to help drive a re-rating of the stock, which now trades at a ~20% discount to

the sector on ~8x 2017e EV/EBITDA. A resumption of the share buyback would

also help. The current share price is ~15% below Vincent Bollore's last

investment round, providing a good backstop.

Berkeley Group, the high end UK housebuilder, has warned that reservations on new homes have fallen by a fifth in the first five months of the year, due to a combination of the forthcoming EU membership referendum, weakening demand for luxury properties in London and the group launching fewer new schemes this year.

Presenting full-year results on Wednesday, the housebuilder, which is focused on London and the south-east of England, raised concerns that transaction levels in both the second hand and new homes market have not increased to “the levels we all would hope for at this stage in the cycle”, said Nathalie Thomas.

Revenue in the year to April 30 fell to £2.05bn from £2.12bn, while pre-tax profit also edged down to £530.9m from £539.7m a year earlier. It said:

Global macro uncertainty and the impending EU Referendum have had a dampening effect on investment levels across all businesses and this is likely to continue up to and immediately after the result of the Referendum. This, along with the market adjusting to higher levels of property transaction taxes, has affected the upper end of the housing market in London, although underlying interest and demand remain good.

Appetite for high-end properties in the UK capital has been waning following changes to stamp duty in December 2014, while agents have also cited factors such as a reduction in overseas buyers following the commodities slowdown and weakening of emerging market currencies.

The company also sold a large number of its developments in London in 2013 and 2014 and did not bring any new schemes to the market in the first five months of the year.

In his statement accompanying the results, chairman Tony Pidgley threw his weight behind the UK remaining in the EU. He said:

The outcome of next week’s referendum on Britain’s membership of the European Union is significant for the UK’s housebuilding and property sector. Berkeley supports a vote to remain in the EU. London’s status as the world’s best big city is underpinned by labour mobility, cultural diversity and a constant influx of talent and investment from around the world, and the UK economy in turn is powered by the success of our capital city.

However, London will always be a world city and a highly desirable place to live, work and play. For Berkeley, our brand, our land holdings and our forward sales will continue to differentiate and underpin our performance over the long term and, while we have a clear view about what the better outcome would be on Thursday 23 June, we are confident about the future for our business.

Property surveyors have predicted the first fall in UK house prices this year since 2012. Members of the Royal Institution of Chartered Surveyors said in a closely-watched survey published earlier this month that prices in London had already started to fall.

UK engineering software developer Aveva says the latest round of merger talks with French industrials groups Schneider have ended, just days after it confirming it had received an offer from the company over acquiring a majority stake.

The companies had resumed discussions after their previously agreed deal collapsed in late December last year.

Aveva said on Wednesday that it shares would resume trading following the announcement of a suspension on Monday. The transaction would have been considered a reverse takeover under the UK Listing Rules, so trading in Aveva shares was suspended with immediate effect.

In a statement, the software company said:

Following the termination of the preliminary discussions between AVEVA Group Plc and Schneider Electric SE, AVEVA has applied to the UKLA for the suspension of its shares to be lifted.

As a result, it is anticipated that AVEVA’s shares will resume trading at 8:00am BST this morning.

Macro :

- ECB, European Banks Discussed Stress Tests on Tuesday: Sole

- MSCI to Delay Including China A Shares in Emerging Markets Index

- Uber to Raise $1b-$2b in Form of Leveraged Loan: CNBC Cites DJ

Keep an eye on :

- ABBN VX : ABB Said to Likely Consider Rival Bid if Solicited by Kuka: WSJ

- AIR FP : Airbus to Deliver French Defense Ministry Ninth A400M: Echos

- AIR FP : Zodiac’s A350 Cabin Comments Show It Still Has ‘Challenges’: RBC

- AREVA FP : Areva to Be Divided Into 3 Units Under New Plan, Figaro Reports

- AVV LN : Aveva Ends Talks With Schneider Electric

- CBK GY : Commerzbank Sees ~19% Revenue Growth in Chinese Market in 2016

- DAI GY : Daimler’s Mercedes May Open Factory in Russia: Handelsblatt

- EDF FP : French Power Regulator Says France Interconnection Is Sufficient

- FCC SM : Slim’s Carso Exercises Purchase Option on 9.45M FCC Shrs

- HMB SS : H&M Sales Miss Estimates in May, 2Q

- ITX SM : Inditex 1Q Ebitda, Net Beat Estimates

- ITX SM : Inditex 1Q Is a Standout In a Tough Market, Bernstein Says

- KU2 GY : ABB Said to Likely Consider Rival Bid if Solicited by Kuka: WSJ

- ORA FP : Orange Could Make Moves to Boost Clout in Europe, CEO Says

- UG FP : CMA CGM, PSA in Container Terminal JV in Singapore

- RTN LN : Restaurant Group Names Barry Nightingale CFO

- RR/ LN : Rolls-Royce CEO Says Brexit Uncertainty Delaying Investment: BBC

- SU FP : Aveva Ends Talks With Schneider Electric

- TIT IM : Oi CEO Exit Said to Reveal Fight Between Bondholders, Investors

- HO FP : Thales CEO Reiterates Company Seeks 6,000 Hirings

- VOw3 GY : Volkswagen Said to Plan Merging Components Unit, Asset Reviews

- ZC FP : Zodiac’s A350 Cabin Comments Show It Still Has ‘Challenges’: RBC

- ZC FP : Zodiac Maintains Outlook for Current Operating Profit

*ANDRITZ RAISED TO BUY AT HSBC

>> Stock

*PERNOD RICARD ADDED TO CONVICTION LIST AT GOLDMAN