Banc Sabadell | IAG’s Capital Markets Day focused on cash generation. The reduction of some operational objectives (AKO’s 2020/23 growth from + 6% to + 3.4% per year; annual BPA growth from + 12% to + 10%), is in line with market forecasts and BS (e) .
The operation reinforces the position of Iberia owner IAG on the Europe-LatAm routes, where it will have a 26% share (vs 19% current). One of the main competitors of IAG in these routes disappears, since Air Europa was the sixth operator Europe-LatAm, and the main one in the hub of Madrid.
BOfAML | IAG has agreed to acquire Air Europa, a value carrier, for €1bn as it seeks to increase its market share in the South Atlantic market and turn Madrid into Europe’s next hub airport. The acquisition is in cash and will be funded by external debt increasing IAG’s net debt / EBITDA by 0.3x (from 1.2x at 3Q19). This raises questions on the potential cash return to shareholders.
BOfAML | Orange’s Q3 results were broadly in line with expectations with revenues 0.5% ahead, (+0.8% in Q3 vs +0.4% in Q2) and EBITDAaL +0.2%, in line with consensus expectations. The mix was somewhat weak however with France and Spain delivering slightly below
The purchase price agreed by the Spanish-German renewable energy company for the acquisition of par of the onshore European assets of the aerogenerator maker Senvion Deutschland rises to 200M€.
Banc Sabadell | The acquisition of the Arqiva towers in the UK for 2 billion pounds (2.24 billion euros, 19.7% capitalisation and c.39% of NFD for Cellnex) means the integration of c.3,800 installations (+18.4% of Cellnex total) with a tenancy rate of c. 1.4X (vs c. 1.57X for Cellnex) and with contracts of 10 years duration (less than the current portfolio) linked to inflation.
BOfAML | We modestly update our forecasts reflecting fuel prices and monthly traffic data reports. European airlines in our coverage have reported 6.5% ASK growth on average in 3Q19 and we look for 3.8% in 4Q19. We expect RASK recovery with flat unit revenues in 3Q19 on average and 1.7% yoy improvement in 4Q19.
Clinton Fernandes (The Conversation) | Silicon Valley may now be more popularly associated with software companies such as Google and Facebook but it takes its name from the material most used to make semiconductors. Semiconductors – or computer chips – power everything from mobile phones to military systems. The semiconductor industry sits at the centre of the modern world. This point is key to appreciating what’s going on in the US government’s battle with Chinese technology giant Huawei.
Bankinter | After the WTO authorised the US to impose tariffs of 5.5 billion dollars on Europe, the Office of the US Trade Representative (USTR) announced the imposition of tariffs from 18 October.
Ofelia Marín-Lozano (Capital Sicav) | Political events have always had a certain influence in the behaviour of financial markets in the short term. Although what dominates in the long term are company results, any uncertainty coming from the world of politics has a cost, and currently there are many uncertainties weighing on the minds of investors.