*STANDARD CHARTERED 1H ADJ. PRETAX $1.8B; EST. $2.7B
*STANCHART DIV PER SHARE REDUCED BY 50% TO 14.4C/SHR
*STANDARD CHARTERED 1H REV $8.5B; EST. $8.8B
De Mol Discloses 5% Stake in Dutch Mapping Software Maker TomTom
(Bloomberg) -- J.H.H. de Mol reported a 5.1 percent stake in TomTom NV amid reports that the Dutch navigation software and device maker is weighing options that could lead to a sale.
De Mol held 11.67 million ordinary shares of TomTom as of Aug. 4, according to a filing at Dutch regulator AFM on Wednesday, which didn’t disclose the price of sale. Billionaire John De Mol, known for creating one of the first modern-day reality-TV shows with “Big Brother,” agreed to sell his TV-format producer Talpa for $1.2 billion in March.
John de Mol’s spokeswoman wasn’t immediately able to comment. Shares of TomTom rose as much as 4.4 percent in Amsterdam, bringing the annual gain to about 89 percent. At Tuesday’s closing price of 10.03 euros per share, De Mol’s stake would have been worth about 117 million euros.
TomTom is exploring options that could lead to a sale as mapping technology draws growing interest from potential buyers, people familiar with the matter said earlier this week. There is no formal process under way and TomTom may decide against pursuing a sale and instead focus on investments, the people said.
Mapping companies are garnering more interest amid carmakers’ push for self-driving systems independent of technology giants such as Google Inc. German carmakers BMW AG, Audi AG and Daimler AG Monday announced an agreement to buy Nokia Oyj’s map business for 2.8 billion euros ($3 billion). TomTom was worth 2.3 billion euros at the close of trading in Amsterdam Tuesday.
Jack Ma just tapped a new president who promises to deliver the Goldman touch.
The ambitious chairman of Alibaba.com has hired former Goldman Sachs vice chairman Michael Evans to beef up the China-based e-commerce giant’s global merchandise networks.
First and foremost, that will mean building stronger ties with brands, manufacturers and retailers across Europe and the Americas to increase Alibaba’s access to coveted Western brands for everything from cosmetics to fashions to baby food.
Canada-born Evans, whose 20-year career at Goldman included a five-year stint as vice chairman that ended in 2013, has been on Alibaba’s board since the company went public last year.
Evans’s roles at Goldman included chairman of Asian operations, and he has known Ma for a decade. At least initially, he is expected to be based in New York as he tackles challenges that have included rampant counterfeiting of Western goods.
Kellogg Co’s Corn Flakes and Rice Krispies are set to turn all-natural soon.
The 109-year old company, whose cereals have been a popular breakfast choice for decades, said on Tuesday it was aiming to stop using artificial colors and flavors in its cereal and snack bars by the end of 2018.
The world’s biggest breakfast cereal maker is the latest in a string of U.S. food companies to bow to growing pressure to remove synthetic ingredients from products due to health concerns.
The company said 75 percent of its cereals in North America were being made without artificial colors and more than half without artificial flavors.
General Mills Inc, the maker of Cheerios cereals, said in June it plans to have 90 percent of its cereals free of artificial flavors and colors by 2016, up from about 60 percent currently.
Sales at both companies have shrunk in the United States due to a growing preference for less processed foods and cooked meals.
Kellogg reported second-quarter revenue on Tuesday that topped analysts’ expectations, but the 5.1 percent decline in sales was the seventh time in eight quarters that sales had fallen.
Sales in the company’s U.S. snacks business – its biggest – fell 2 percent, while sales in the U.S. morning foods business, which includes cereals, fell 2.2 percent.
Kellogg has been transforming itself – from making healthier products to trimming its costs.
The company started a multi-year cost cutting plan in 2013 and is using the savings to refresh its Special K brand and launch healthier foods such as granola and muesli in new markets.
Kellogg said sales of its Special K cereal were improving after repositioning the brand as “wellness”, rather than diet, food and introducing a gluten-free version and new flavors.
Net income attributable to Kellogg fell 24.4 percent to $223 million, or 63 cents per share, in the quarter ended July 4.
Excluding items, the company earned 92 cents per share, while revenue was $3.498 billion, while analysts were expecting earnings of 92 cents per share on revenue of $3.466 billion, according to Thomson Reuters I/B/E/S.
Kellogg’s shares were up 2.58 percent at $67.77 in afternoon trading on the New York Stock Exchange.
Adding Heineken, Removing Danone & Shire
Adding Heineken — We believe Heineken is entering a phase where it will grow
profit faster vs. history and vs. its beer peers, yet this isn’t reflected in valuation and
isn’t fully appreciated by many investors, in our view. We believe Heineken’s growth
trajectory has accelerated for a number of reasons: (1) improved EM geographic
footprint, (2) Western Europe — where Heineken is very operationally leveraged —
should be much less of a drag given improving volumes, (3) substantial mix benefits
(brand Heineken is in very good health in most markets and the company is
leveraging its innovation and premium portfolio better than it has done in the past).
Recent 1H results Heineken (HEIN.AS) - We raise EPS 2% and expect a strong H2
were solid (3.5% org EBIT growth on a +14% comp), underpinned by mix benefits
and cost savings. However, 1H was held back by some issues that should improve
going forward: we expect (1) operational leverage benefits in W Europe to come
through in 2H, on much easier volume comps; (2) Nigeria should gradually improve
too, mainly in 2016E. On this basis, we expect an acceleration in profit growth in 2H
and FY16 for the group. Heineken trades at about a 7% PE discount to ABI and
SAB (and to EU Staples) on consensus numbers (more than that on our forecasts)
and we expect the gap to close over the next 12 months, on accelerating growth.
Removing Danone — We no longer believe the very low raw milk price will result in
the company posting much better than consensus margins. The 1H results
delivered EPS in-line with consensus (and below our forecasts) because
management used the low milk price to offset a number of 'one-offs'. We now
assume the pattern of 1H will be repeated in 2H15 against a backdrop where the
foreseeable problems are building (eg pricing pressure of infant formula in China).
We retain the Buy recommendation; relative to other consumer names, Danone
looks attractively valued, its sales growth is within the top quartile, its margin
progression looks more assured and it seems more able to cope with the sort of
speed bumps that may have knocked it off course in previous years. But we now
believe the investment will be a slower burn and take the opportunity to remove
Danone from Citi Focus List Europe.
Removing Shire — Citigroup Global Markets is acting as an adviser to Baxalta
Incorporated on an announced unsolicited acquisition proposal from Shire plc. As a
consequence, Citi Research is unable to publish forecasts or opinions in respect to
Shire plc and as a further consequence Shire plc has been removed from the Focus
List.
Citi Focus List Europe — European analysts’ 15-20 strongest Buy ideas for the
next 12 months. We believe that Citi analysts offer investors strong views with
differentiated analysis on Focus List stocks. Liquidity means some names with high
return expectations are excluded.
Lundin CEO Sees Oil Supply, Demand Closer to Balance by End-2016
2015-08-05 07:18:05.494 GMT
By Mikael Holter
(Bloomberg) -- M&A in oil industry to increase as some
equity valuations starting to look “pretty interesting,”
Lundin CEO Ashley Heppenstall says in Bloomberg TV interview.
* Co. will consider acquisitions if opportunities match its
current assets
* Norwegian offshore rig rates have fallen ~50% as explorers
reduce spending after oil-price drop
* NOTE: Earlier story: Lundin Cuts Production Target as Lower
Oil Prices Reduce Sales
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Mikael Holter in Oslo at +47-22-00-8209 or
mholter2@bloomberg.net
To contact the editors responsible for this story:
James Herron at +44-20-3525-8705 or
jherron9@bloomberg.net
Mikael Holter
2015-08-05 07:18:05.494 GMT
By Mikael Holter
(Bloomberg) -- M&A in oil industry to increase as some
equity valuations starting to look “pretty interesting,”
Lundin CEO Ashley Heppenstall says in Bloomberg TV interview.
* Co. will consider acquisitions if opportunities match its
current assets
* Norwegian offshore rig rates have fallen ~50% as explorers
reduce spending after oil-price drop
* NOTE: Earlier story: Lundin Cuts Production Target as Lower
Oil Prices Reduce Sales
For Related News and Information:
First Word scrolling panel: FIRST<GO>
First Word newswire: NH BFW<GO>
To contact the reporter on this story:
Mikael Holter in Oslo at +47-22-00-8209 or
mholter2@bloomberg.net
To contact the editors responsible for this story:
James Herron at +44-20-3525-8705 or
jherron9@bloomberg.net
Mikael Holter
We remove Danone from Citi’s Focus List Europe but keep Buy
* We are removing Danone from the Citi Focus List Europe — This is because we no longer believe the very low raw milk price will result in the company posting much better than consensus margins.
* But we are retaining the Buy rating — We continue to see many positives with Danone, although we now believe the investment will be a slower burn:
Trading Meets Fundamentals: The Curious Incident of Chinese Luxury Demand
The incident to analyse here is the apparent divergence of Chinese personal luxury demand, which remained robust over 1H15 and accelerated in 2Q15 vs. 1Q15, from a weakening Chinese macroeconomic backdrop, a deteriorating real estate market, and a softening auto market.
Look at things by nationality, not by geography - Two structural tailwinds to be considered
Chinese consumers buy luxury goods everywhere in the world – this is what seems to have
accelerated over 1H15. By contrast, luxury goods sales in China – and in particular in Hong Kong
and Macau – have been declining (The Great Mall of China). Two structural tailwinds should be
considered: 1/ Continuing growth of luxury-hungry middle-class Chinese consumers; 2/ Boost to
discretionary spend from socio-demographic shifts.
Factor in contingent differences
1/ Anti-gifting creates easier y/y comps for personal luxury goods players; 2/ Stock market
gyrations: A massive stock market boom, followed by a sharp partial correction, may have
prompted many Chinese not to play with stocks for a while, and to enjoy some of their money
instead; 3/ Small ticket vs. Big ticket items replacement: It may well be that Chinese consumers are
postponing big ticket decisions in a more uncertain macro-economic environment and have more
money on their hands for smaller purchases; 4/ Daigou’s expectations that price gaps will close
somewhat over 2H15 (either because of FX movements or price changes) may have pushed sales
up as purchases are brought forward.
Stay on guard – Pick stocks, rather than seek broad sector exposure
We concentrate on names where self-help opportunity is least appreciated by the market against a
backdrop of soft economic conditions. LVMH, Kering and Swatch appear as reasonable longs.
Richemont may be added to the group, given its strong structural appeal and relatively compelling
valuation. We’d be more prudent on Burberry. By contrast, we think it is time to look at Prada, as it
is going to benefit from remedial action in 2H15. In this report, we also roll forward our 12-month
EPS and fine-tune our market relative P/E to derive our new TPs.
Shire has announced an all-stock approach for Baxalta. The proposed offer is for 0.1687 Shire ADRs per Baxalta share ($45.23 per Baxalta share at Shire's 3 August price). The Baxalta board has rejected the approach, stating it added nothing to the private offer made on 10 July. In this note we present a merger model and combined PharmaValues NPV analysis for Shire-Baxalta. We conclude:
■ CS merger model suggests 1% accretion in 2017e, increasing to 12% in 2019E. This assumes 5% sales synergies in overlapping franchises and 2.5% cost savings of the total combined cost base.
■ Operational synergies drive c.30% of accretion, split 60% between cost savings, revenue synergies and 40% tax. Shire has stated the combined group can achieve a tax rate of 17% vs our Baxalta 24% estimate in 2019E.
■ Buyback drives c.70% of accretion – could be achieved without deal. Shire needs to offer all stock to retain the tax-free nature of Baxalta's spin out from Baxter. Shire is committed to buy back 118m Shire shares to offset
dilution. We estimate a standalone buyback would be 9% accretive in 2019.
■ Shire could offer $53.40 to be EPS neutral in 2018E, +4% in 2019E based on our modelling and assumptions.
■ CS Special Situations team note that Baxalta's corporate defenses make a deal very unlikely before 2017 if the offer remains hostile.
■ Valuation: Shire trades on a 2016 PE of 19.8 a 6% discount to EU Specialty Pharma peers, but on a par with the CEO's preferred large US Biotech peer group. Shire trades on 1.83x PharmaValues NPV, vs. 1.32 average for EU
Specialty Pharma peers.