058f6c5c-f5ad-4fc9-bb23-755d2c77652d.pdf


First Take - Newsflow

Broadcasting | Germany



Splendid Medien AG

Buy | Target price : 3.50 EUR

$T ypCap$ 1583 40 1 1 x 6425 2

Price : 2.15 EUR | Upside : 63 %

S


Takeover of Joker Productions to boost sales by € 10m, EBIT by ~€ 1m


Wednesday 03 February 2016 Details of thedeal


3.0


2.8


2.6


2.4


2.2


2.0


1.8


1.6


1.4


1.2


1.0


0.8

Dez 12Mrz 13Jun 13Sep 13Dez 13Mrz 14Jun 14Sep 14Dez 14Mrz 15Jun 15Sep 15Dez 15Mrz 16


Splendid Medien AG Splendid Medien AG Relative to Media (Rebased)


Market Cap (EURm)

21

Enterprise value (EURm)

25

Extrema 12 months

1.96

2.75

Free Float (%)

32.3

Performance (%)

1m

3m

12m

Absolute

-10.3

-10.3

3.6

Perf. rel. Country Index

-1.9

1.0

13.7

Perf. rel. Media

-6.4

-4.6

4.6

P&L

12/15e

12/16e

12/17e

Sales (EURm)

57.4

70.7

76.1

EBITDA (EURm)

23.0

25.9

29.0

Current EBIT (EURm)

3.7

4.9

5.9

Attr. net profit (EURm)

2.6

3.7

4.1

Adjusted EPS (EUR)

0.27

0.37

0.42

Dividend (EUR)

0.10

0.10

0.10

P/E (x)

8.6

5.8

5.1

P/B (x)

0.8

0.7

0.6

Dividend Yield (%)

4.3

4.6

4.6

FCF yield (%)

33.8

4.9

9.1

EV/Sales (x)

0.43

0.33

0.29

EV/EBITDA (x)

1.1

0.9

0.8

EV/Current EBIT (x)

6.6

4.7

3.7

Gearing (%)

8

7

3

Net Debt/EBITDA(x)

0.1

0.1

0.0

Capital SPM GY | SPME.DE

At the end of last week Splendid Medien AG announced that it would acquire 60% of Joker Productions GmbH with an option to buy the remaining 40% in the near future. Joker develops and produces television formats as well as commercial and corporate image films. Joker's current focus is on non-fictional television formats like "Die Geissens", which Joker produced until 2014.


According to the release, Splendid will pay € 3.75m for the 60% stake, which values the entire company at € 6.25m. In 2014, Joker generated revenues of € 11.3m and EBIT of € 1.1m. Assuming largely flat sales and EBIT in 2015 (we assume revenues of € 10-11m, EBIT of

€ 1m), the price corresponds to 6x 2015e EBIT, while Spendid Media trades at 6.6x. Given Joker's EBIT margin of c.10% vs. Splendid's 6.5%, the deal is margin-accretive. We assume Splendid's EBIT margin will increase to 7.0% in 2016e and even to 7.8% in 2017e.

We forecast a jump in EBIT to € 4.9m in 2016e

This deal supports Splendid's growth story; we add revenues of € 10m for 2016e and EBIT of

€ 1m to our 2016e estimates. All in all, we expect group revenues to come in at € 70.7m in 2016e and EBIT at € 4.9m. Compared to 2015e, this equates to a top-line increase of 23.1% (5.7% organic) and EBIT growth of 32.4% (+6% organic). For 2017e we estimate group revenues at € 76.1m and group EBIT at € 5.9m.


On the bottom line we estimate EPS at € 0.37 in 2016e (up from € 0.27 in 2015e) and € 0.42 in 2017e.

Buy rating maintained; stock could break out of current trading range

Our initial take is that the takeover appears to be a good fit for Splendid and its strategy to diversify the business model of its TV production unit. This deal is definitely a step in that direction. Overall, the deal confirms our bullish view on Splendid Medien. We confirm our Buy recommendation and reiterate our TP of € 3.50, which implies a 2016e EV/EBIT multiple of 7x. This would still represent a discount of roughly 30% to its closest peers. Hence, further improvement in key KPIs could be a catalyst for the shares to realise some of their upside potential and reduce the deep discount to a more normalised level, which we estimate at c.10% based on the size of the company.


Next Events


Marcus Silbe, CEFA (Analyst)

+49 (69) 92 05 48 14

marcus.silbe@oddoseydler.com



Page 1/4

Conflict of interests:

Oddo Securities, a division of Oddo et Cie, limited sharepartnership - Bank authorised by ACPR. Oddo & Cie and/or one of its subsidiaries could be in a conflict of interest situation with one or several of the groups mentioned in this publication. Please refer to the conflict of interests section at the end of this document.

Page 2/4


SPME.DE | SPM GY

Broadcasting | Germany

Buy

Upside


62.56%


Price TP


2.1

3.5


5EUR

0EUR

PER SHARE DATA (EUR)

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

Adjusted EPS

0.52

0.37

0.37

0.09

0.27

0.37

0.42

Reported EPS

0.52

0.37

0.37

0.09

0.27

0.37

0.42

Growth in EPS(%)

-

-30.3%

2.1%

-75.4%

ns

39.6%

13.5%

Net dividend per share

0.10

0.00

0.00

0.05

0.10

0.10

0.10

FCF to equity per share

0.43

-0.53

-0.25

-0.30

0.78

0.10

0.20

Book value per share

2.06

2.33

2.60

2.57

2.78

3.06

3.38

Number of shares market cap

9.79

9.79

9.79

9.79

9.79

9.79

9.79

Number of diluted shares

9.79

9.79

9.79

9.79

9.79

9.79

9.79

VALUATION

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

12m highest price

1.45

2.56

3.00

2.94

2.75

2.34

12m lowest price

0.59

1.32

2.10

1.65

1.92

2.10

(*) Reference price

1.09

2.02

2.46

2.41

2.31

2.15

2.15

Capitalization

11

20

24

24

23

21

21

Restated Net debt

-4.1

2.0

5.4

9.3

2.1

2.1

1.1

Minorities (fair value)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Financial fixed assets (fair value)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Provisions

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Enterprise Value

6.6

22

30

33

25

23

22

P/E (x)

2.1

5.5

6.6

26

8.6

5.8

5.1

P/CF (x)

0.8

1.2

1.3

1.0

1.0

0.9

0.8

Net Yield (%)

9.1%

0.0%

0.0%

2.1%

4.3%

4.6%

4.6%

FCF yield (%)

39.4%

ns

ns

ns

33.8%

4.9%

9.1%

P/B incl. GW (x)

0.53

0.87

0.95

0.94

0.83

0.70

0.64

P/B excl. GW (x)

0.53

0.87

0.95

0.94

0.83

0.71

0.64

EV/Sales (x)

0.16

0.43

0.54

0.50

0.43

0.33

0.29

EV/EBITDA (x)

0.4

1.3

1.5

1.4

1.1

0.9

0.8

EV/EBIT (x)

(*) historical average price

1.6

5.1

6.8

18

6.6

4.7

3.7

PROFIT AND LOSS (EURm)

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

Sales

41.8

50

55

66

57

71

76

EBITDA

15.5

16.6

20.2

23.9

23.0

25.9

29.0

Depreciations

-11.3

-12.3

-15.9

-22.0

-19.2

-21.0

-23.1

Current EBIT

4.2

4.3

4.3

1.9

3.7

4.9

5.9

Published EBIT

4.6

4.2

4.1

2.0

3.7

4.9

5.9

Net financial income

-0.9

-0.8

-0.7

-0.6

-0.6

-0.6

-0.6

Corporate Tax

1.4

0.2

0.3

-0.5

-0.5

-0.7

-1.2

Net income of equity-accounted companies

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Profit/loss of discontinued activities (after tax)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Attributable net profit

5.1

3.6

3.7

0.9

2.6

3.7

4.1

Adjusted attributable net profit

5.1

3.6

3.7

0.9

2.6

3.7

4.1

BALANCE SHEET (EURm)

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

Goodwill

0.3

0.3

0.3

0.3

0.3

0.3

0.3

Other intangible assets

0.4

0.4

0.4

0.3

0.5

0.7

0.8

Tangible fixed assets

11

20

24

28

28

33

36

WCR

8.5

7.4

11

11

6.5

4.9

4.4

Financial assets

4.9

6.5

6.3

6.7

6.1

6.1

6.1

Ordinary shareholders equity

20

23

25

25

27

30

33

Minority interests

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Shareholders equity

20

23

25

25

27

30

33

Non-current provisions

8.9

9.5

11

12

13

13

13

Net debt

-4.1

2.0

5.4

9.3

2.1

2.1

1.1

CASH FLOW STATEMENT (EURm)

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

EBITDA

15.5

16.6

20.2

23.9

23.0

25.9

29.0

Change in WCR

1.8

-2.1

0.1

-0.9

5.1

2.1

0.9

Interests & taxes

-0.9

-1.2

-1.1

-1.2

-1.1

-1.3

-1.8

Others

-0.4

0.9

-0.4

-0.1

0.6

0.0

0.0

Operating Cash flow

16.0

14.3

18.8

21.7

27.5

26.7

28.1

CAPEX

-11.7

-19.5

-21.3

-24.7

-19.9

-25.7

-26.2

Free cash-flow

4.2

-5.2

-2.5

-2.9

7.6

1.0

1.9

Acquisitions / disposals

0.0

0.1

0.0

0.1

0.0

0.0

0.0

Dividends

0.0

-1.0

-1.0

-1.0

-0.5

-1.0

-1.0

Net capital increase

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Others

0.2

2.4

1.2

3.0

0.0

0.0

0.0

Change in net debt

4.2

-6.1

-3.4

-3.8

7.1

0.0

0.9

GROWTH MARGINS PRODUCTIVITY

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

Sales growth

-

19.8%

9.6%

20.2%

-13.1%

23.1%

7.6%

Lfl sales growth

-

19.8%

9.6%

20.2%

-13.1%

23.1%

7.6%

Current EBIT growth

-

2.2%

0.8%

-56.9%

ns

32.2%

20.0%

Growth in EPS(%)

-

-30.3%

2.1%

-75.4%

ns

39.6%

13.5%

Net margin

12.3%

7.1%

6.7%

1.4%

4.6%

5.2%

5.5%

EBITDA margin

37.0%

33.1%

36.9%

36.1%

40.0%

36.7%

38.1%

Current EBIT margin

10.0%

8.5%

7.9%

2.8%

6.5%

7.0%

7.8%

CAPEX / Sales

-28.1%

-39.0%

-38.7%

-37.4%

-34.6%

-36.3%

-34.4%

WCR / Sales

20.3%

14.8%

19.2%

16.2%

11.4%

6.9%

5.8%

Tax Rate

-36.4%

-6.8%

-7.5%

36.4%

16.7%

15.9%

22.2%

Normative tax rate

30.0%

30.0%

30.0%

30.0%

30.0%

30.0%

30.0%

Asset Turnover

-

2.1

1.7

1.8

1.5

1.9

1.9

ROCE post-tax (normative tax rate)

-

12.5%

9.6%

3.5%

7.0%

9.3%

10.3%

ROCE post-tax hors GW (normative tax rate)

-

12.7%

9.7%

3.5%

7.0%

9.4%

10.4%

ROE

-

16.7%

15.2%

3.6%

10.0%

12.8%

13.2%

DEBT RATIOS

12/11

12/12

12/13

12/14

12/15e

12/16e

12/17e

Gearing

-21%

9%

21%

37%

8%

7%

3%

Net Debt / Market Cap

-0.39

0.10

0.22

0.39

0.09

0.10

0.05

Net debt / EBITDA

ns

0.12

0.27

0.39

0.09

0.08

0.04

EBITDA / net financial charges

18.0

19.7

29.7

40.3

38.3

43.2

48.3

Recommendation and target price changes history over the last 12 months for the company analysed in this report

Date Reco Price Target (EUR) Price (EUR)


Disclosures


Investment banking and/or Distribution

Has Oddo Group, or Oddo & Cie, or Oddo Seydler managed or co-managed in the past 12 months a public offering of securities for the subject company/ies?

No

Has Oddo Group, or Oddo & Cie, or Oddo Seydler received compensation for investment banking services from the subject company/ies in the past 12 months or expects to receive or intends to seek compensation for investment banking services from the subject company/ies in the last 12 months?

No

Research contract between Oddo group & the issuer

Oddo & Cie and the issuer have agreed that Oddo & Cie will produce and disseminate investment recommendations on the said issuer as a service to the issuer

Yes

Liquidity provider agreement and market-making

At the date of the distribution of this report, does Oddo Group, or Oddo & Cie, or Oddo Seydler act as a market maker or has Oddo Group or Oddo & Cie, or Oddo Seydler signed a liquidity provider agreement with the subject company/ies?

Yes

Significant equity stake

Does Oddo Group, or Oddo & Cie, or Oddo Seydler own 5% or more of any class of common equity securities of the subject company/ies?

No

Does the subject company beneficially own 5% or more of any class of common equity of Oddo & Cie or its affiliates?

No

Disclosure to Company

Has a copy of this report ; with the target price and/or rating removed, been presented to the subject company/ies prior to its distribution, for the sole purpose of verifying the accuracy of factual statements ?

No

Have the conclusions of this report been amended following disclosure to the company/ies and prior its distribution?

No

Additional material conflicts

Is Oddo Group, or Oddo & Cie, or Oddo Seydler aware of any additional material conflict of interest?

No


Page 3/4

Statement of conflict of interests of all companies mentioned in this document may be consulted on Oddo & Cie's: www.oddosecurities.com


Disclaimer:


Disclaimer for Distribution by Oddo & Cie to Non-United States Investors:

This research publication is produced by Oddo Securities ("Oddo Securities"), a division of Oddo & Cie ("ODDO"), which is licensed by the Autorité de Contrôle Prudentiel et de Résolution (ACPR) and regulated by the Autorité des Marchés Financiers ("AMF"), and/or by ODDO SEYDLER BANK AG ("Oddo Seydler"), a German subsidiary of ODDO, regulated by Bundesanstalt für Finanzdienstleistungsaufsicht ("BaFin").

The research, when distributed outside of the U.S., is intended exclusively for non-U.S. customers of ODDO and cannot be divulged to a third-party without prior written consent of ODDO. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

This research has been prepared in accordance with regulatory provisions designed to promote the independence of investment research. "Chinese walls" (information barriers) have been implemented to avert the unauthorized dissemination of confidential information and to prevent and manage situations of conflict of interest. This research has been prepared in accordance with French and German regulatory provisions designed to promote the independence of investment research.

At the time of publication of this document, ODDO and/or Oddo Seydler, and/or one of its subsidiaries may have a conflict of interest with the issuer(s) mentioned. While all reasonable effort has been made to ensure that the information contained is not untrue or misleading at the time of publication, no representation is made as to its accuracy or completeness and it should not be relied upon as such. Past performances offer no guarantee as to future performances. All opinions expressed in the present document reflect the current context and which is subject to change without notice. The views expressed in this research report accurately reflect the analyst's personal views about the subject securities and/or issuers and no part of his compensation was, is, or will be directly or indirectly related to the specific views contained in the research report.

This research report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice.


Disclaimer for Distribution by Oddo New York to United States Investors:

This research publication is produced by Oddo Securities, a division of ODDO and/or by Oddo Seydler.

This research is distributed to U.S. investors exclusively by Oddo New York Corporation ("ONY"), MEMBER: FINRA/SIPC, and is intended exclusively for U.S. customers of ONY and cannot be divulged to a third-party without prior written consent of ONY. This document is not and should not be construed as an offer to sell or the solicitation of an offer to purchase or subscribe for any investment.

This research has been prepared in accordance with regulatory provisions designed to promote the independence of investment research. "Chinese walls" (information barriers) have been implemented to avert the unauthorized dissemination of confidential information and to prevent and manage situations of conflict of interest. This research has been prepared in accordance with French and German regulatory provisions designed to promote the independence of investment research.

At the time of publication of this document, ODDO and/or Oddo Seydler, and/or one of its subsidiaries may have a conflict of interest with the issuer(s) mentioned. While all reasonable effort has been made to ensure that the information contained is not untrue or misleading at the time of publication, no representation is made as to its accuracy or completeness and it should not be relied upon as such. Past performances offer no guarantee as to future performances. All opinions expressed in the present document reflect the current context and which is subject to change without notice.


Rule 15a-6 Disclosure:

Under Rule 15a-6(a)(3), any transactions conducted by ODDO and/or Oddo Seydler, and/or one of its subsidiaries with U.S. persons in the securities described in this foreign research must be effected through ONY. ONY accepts responsibility for the contents of the research only to the extent it may be distributed to persons who are not major

U.S. institutional investors as defined in Rule 15a-6, or where this research is distributed to major U.S. institutional investors who are located in states where there is no institutional exemption from registration in the state comparable to the definition of major U.S. institutional investor in Rule 15a-6.

FINRA Disclosures:

  • Neither ONY, ODDO, nor Oddo Securities, nor Oddo Seydler beneficially owns 1% or more of any class of common equity securities of the subject company.

  • The research analyst of Oddo Securities or Oddo Seydler, at the time of publication of this research report, is not aware, nor does he know or have reason to know of any actual, material conflict of interest of himself, ODDO, Oddo Securities, Oddo Seydler or ONY, except those mentioned in the paragraph entitled "Risk of Conflict of Interest."

  • Oddo Securities or ODDO or Oddo Seydler may receive or seek compensation for investment banking services in the next 3 months from the subject company of this research report, but ONY would not participate in those arrangements.

  • Neither ONY, ODDO, Oddo Securities, nor Oddo Seydler has received compensation from the subject company in the past 12 months for providing investment banking services except those mentioned in the paragraph of "Risk of Conflict of Interest".

  • Neither ONY., ODDO, Oddo Securities nor Oddo Seydler has managed or co-managed a public offering of securities for the subject company in the past 12 months except those mentioned in the paragraph of "Risk of Conflict of Interest" .

  • ONY does not make (and never has made) markets and, accordingly, was not making a market in the subject company's securities at the time that this research report was published.


Regulation AC:

ONY is exempt from the certification requirements of Regulation AC for its distribution to a U.S. person in the United States of this research report that is prepared by an Oddo Securities research analyst because ODDO has no officers or persons performing similar functions or employees in common with ONY and ONY maintains and enforces written policies and procedures reasonably designed to prevent it, any controlling persons, officers or persons performing similar functions, and employees of ONY from influencing the activities of the third party research analyst and the content of research reports prepared by the third party research analyst.

Page 4/4

Contact Information of firm distributing research to U.S. investors: Oddo New York Corporation, MEMBER: FINRA/SIPC, is a wholly owned subsidiary of Oddo & Cie; Philippe Bouclainville, President (pbouclainville@oddony.com) 150 East 52nd Street New York, NY 10022 212-481-4002.

splendid medien AG issued this content on 03 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 04 February 2016 05:13:17 UTC

Original Document: http://www.splendidmedien.com/upload/splendidmedien_de/news/splendid_medien_AG_2016_02_03_First_take.pdf