《DOWNGRADETON：NOTTHEVISIBILITYWEWERELOOKINGFOR1011.ppt》由会员分享，可在线阅读，更多相关《DOWNGRADETON：NOTTHEVISIBILITYWEWERELOOKINGFOR1011.ppt（16页珍藏版）》请在三一办公上搜索。
1、,Hiba Ali*,Bangalore,Associate,Company report,Consumer&RetailSpecialty RetailEquity Sweden,abcGlobal Research,Hennes&Mauritz(HMB SS),Neutral,Downgrade to N:Not the visibility we were looking for,Target price(SEK)Share price(SEK),250.00229.60,Short-term earnings impacted by negative FX translation,Po
2、tential return(%)8.9Note:Potential return equals the percentagedifference between the current share price andthe target price,but Q3 gross margin miss suggests reduced earningsvisibility over the short and medium term,NovHSBC EPSHSBC PE,2011 a 2012 e9.56 10.2824.0 22.3,2013 e11.2320.4,We cut FY12e-1
3、4e PBT by 7-12%;target price cut to SEK250from SEK280,downgrade to Neutral from Overweight,Performance,1M,3M,12M,Absolute(%)Relative(%),-4.3-7.0,-7.3-10.7,12.8-5.7,Q3 miss on FX and gross margin:A 10%increase in Q3 total sales in local currency(flaton a LFL basis)would normally be regarded a good pe
4、rformance given a challenged,weather-affected trading environment.Not for H&M.While negative EUR/SEK FXreduced the top line by 3%and PBT by SEK200m,it is a c40bps decline in gross marginthat concerns us most.The latter is not,it transpires,out of kilter with managements expectation,but it is materia
5、llybelow consensus at+60bps.Lower raw material input costs offset by a stronger USD only hada small net positive impact on achieved gross margins in the quarter.With markdownunchanged it was the ongoing gross margin investment in the underlying product offer(bothquality and price),and investment in
6、new brand&other stories ahead of launch in spring,8 October 2012Paul Rossington*AnalystConsumer and Retail ResearchHSBC Bank plc+44 207 991 View HSBC Global Research at:http:/*Employed by a non-US affiliate ofHSBC Securities(USA)Inc,and is notregistered/qualified pursuant to FINRAregulationsIssuer o
7、f report:HSBC Bank plcDisclaimer&DisclosuresThis report must be readwith the disclosures andthe analyst certifications inthe Disclosure appendix,and with the Disclaimer,which forms part of it,2013 that caused gross margins and Q3 PBT to come in a total of SEK450m,or 8.4%shy ofconsensus.From an opera
8、tional perspective,an increase in new store openings(now 300 from275)is positive,but is countered by delayed launch of its US website into next year.But not all bad:Inventories up just 3%in the quarter in local currency and no increase inmarkdown are positive.Current trading,although aided by weaker
9、 comparatives,was alsogood with Q4 total sales up 14%in local currency in September.However,tougher comps inOctober/November last year could limit upside over the remainder of the quarter.Moreover,management expects lower raw material input costs/stronger USD to have a neutral effect onQ4 gross marg
10、ins.The key issue now is the extent of the required ongoing gross margininvestment to support top line growth.The lack of visibility on this issue weighs on thecompanys short-and long-term earnings profile.Estimates:We lower our FY12-14e PBT by 7-12%,now c1-2%below revised consensus.Valuation:H unse
11、asonal weather.Index OMX Enterprise value(SEKm)360,699Index level 1,080 Free float(%)56RIC HMb.ST Market cap(USDm)56,808Bloomberg HMB SS Market cap(SEKm)380,005Source:HSBC Source:HSBC,Hennes&Mauritz(HMB SS)Specialty Retail8 October 2012Financials&valuationFinancial statements,Valuation data,abc,Year
12、 to,11/2011a,11/2012e,11/2013e,11/2014e,Year to,11/2011a,11/2012e,11/2013e,11/2014e,Profit&loss summary(SEKm),EV/sales,3.3,3.0,2.7,2.4,RevenueEBITDADepreciation&amortisationOperating profit/EBITNet interestPBT,109,99923,641-3,26220,37956320,942,121,49725,923-3,62622,29754322,840,134,35928,452-4,0112
13、4,44051724,957,148,63131,577-4,34127,23654727,784,EV/EBITDAEV/ICPE*P/Book valueFCF yield(%)Dividend yield(%),15.216.124.07.63.44.1,13.914.122.37.43.64.1,12.712.720.46.94.14.2,11.411.518.46.34.84.6,HSBC PBTTaxationNet profitHSBC net profit,20,942-5,12115,82115,821,22,840-5,82417,01617,016,24,957-6,36
14、418,59318,593,27,784-7,08520,69920,699,Note:*=Based on HSBC EPS(fully diluted)Price relative,Cash flow summary(SEKm),262,262,Cash flow from operationsCapexCash flow from investmentDividendsChange in net debtFCF equity,17,517-5,017-4,056-15,7233,58112,828,20,002-6,250-6,250-15,7231,97113,752,21,997-6
15、,250-6,250-15,723-2415,747,24,304-6,250-6,250-15,804-2,25018,054,242222202182,242222202182,Balance sheet summary(SEKm)Intangible fixed assets 1,035Tangible fixed assets 17,393Current assets39,918,1,09419,95939,825,1,14422,14741,699,1,18624,01546,062,1622010Hennes&MauritzSource:HSBC,2011Rel to OMX,20
16、12,1622013,Cash&others,21,277,19,306,19,330,21,580,Total assetsOperating liabilitiesGross debtNet debtShareholders fundsInvested capital,60,18814,7570-21,27744,10422,312,62,71915,9950-19,30645,39725,576,66,83217,2390-19,33048,26628,421,73,10418,6160-21,58053,16131,066,Note:price at close of 03 Oct 2
17、012,Ratio,growth and per share analysis,Year to,11/2011a,11/2012e,11/2013e,11/2014e,Y-o-y%change,RevenueEBITDAOperating profitPBTHSBC EPS,1.4-14.7-17.4-16.3-15.3,10.59.79.49.17.6,10.69.89.69.39.3,10.611.011.411.311.3,Ratios(%),Revenue/IC(x)ROICROEROAEBITDA marginOperating profit margin,5.374.735.826
18、.521.518.5,5.169.438.027.721.318.4,5.067.439.728.721.218.2,5.068.240.829.621.218.3,EBITDA/net interest(x),Net debt/equityNet debt/EBITDA(x),-48.2-0.9,-42.5-0.7,-40.0-0.7,-40.6-0.7,CF from operations/net debtPer share data(SEK),EPS reported(fully diluted)HSBC EPS(fully diluted)DPSBook value,9.569.569
19、.5030.19,10.2810.289.5031.08,11.2311.239.5533.04,12.5112.5110.6336.39,2,(in SEKm),Hennes&Mauritz(HMB SS)Specialty Retail,abc,8 October 2012Q3 trading disappointsGross margins lower than expectedQ3 variance table_ Reported _ _ Consensus _,Year-end November,Q3 12,yoy+/-,9M,yoy+/-,Q3 12 variance%,Q3 12
20、 Range,9M,variance%,RevenueGross profitGross margin(%)Op profitOp margin(%)PBTPATEPS(SEK),28,80616,77158.2%4,80216.7%4,8953,6222.19,7.0%6.4%-36bps2.0%-82bps0.9%0.9%1.0%,88,29651,85458.7%15,22117.2%15,64911,5807.00,11.7%10.3%-73bps11.0%-11bps10.7%10.7%10.7%,28,80617,03559.1%5,19718.0%5,3453,9682.40,0
21、.0%-1.5%-92bps-7.6%-137bps-8.4%-8.7%-8.8%,n/a16818-1726558.4%to 59.9%4719-553116.4%to 19.2%4862-56873597-39922.17-2.56,88,29652,11859.0%15,61617.7%16,09911,9267.21,0.0%-0.5%-30bps-2.5%-45bps-2.8%-2.9%-2.9%,Source:Company data,SME.Direkt,Current trading better than expectedbut flattered by weak compa
22、rativesSeptember trading has got off to a good start withtotal sales up 14%in local currency,albeit aidedby weaker comparatives.Managements guidance whereby lower rawmaterial input costs/stronger USD should haveonly a neutral effect on Q4 gross margins soundscautious relative to a wider sector expec
23、ted tobenefit from the ongoing decline in cotton prices,H&Ms single largest raw material input cost.H&M Like for Like sales growth(%):Monthly and Quarterly SalesTrends,Consequently for us,the key issue now isunderstanding what kind of underlying margininvestment in group product offer is required to
24、support/drive top line growth,to what extent thispertains to the required ramp up in resource/capacity ahead of the launch of new brand&otherstories in the first half of next year,but also whatgross margin investment is required in order tosupport the growth of the existing H&M proposition.With no g
25、uidance on either issue,combined withmanagements cautious commentary on the benefitof lower raw input costs,this now weighs on thevisibility of short-and medium-term earnings.,MonthlyDecemberJanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovember,2011a0.0%+1.0%+1.0%-5.0%+11.0%+2.0%-4.0%-6
26、.0%0.0%-7.0%-2.0%-1.0%,2012e+4.0%+3.0%+2.0%+16.0%-10.0%+3.0%+3.0%+2.0%-4.0%+4.0%-1.0%-2.0%,Source:Company data in black,HSBC estimates in red3,Hennes&Mauritz(HMB SS)Specialty Retail8 October 2012EstimatesFY12e:We now assume flat Q4 LFL salesgrowth(previously+6%).September trading hasimproved:total s
27、ales were up 14%in localcurrency and 4%on a comparable unit basis.However this was driven by weaker comparativesthat could unwind in October/November.Combined with a negative FX effect of strongerEUR/SEK,we expect this to limit top lineexpansion in Q4(see table)where we now assume0%on LFL basis(prev
28、iously+6%).We now assume a gross margin contraction of50bps in FY12,vs-30bps previously,as weanticipate limited implied benefit from lower rawmaterial input costs offset by a strong USD in Q4.In Q4,we look for 20bps gross margin expansion(previously+60bps).This is the net result of a,FY13e-14e:While
29、 our gross margin assumptionsremain unchanged(flat)into perpetuity,we reduceour long-term LFL sales growth assumption to 2%from 2.5%on the premise of increased margininvestment in price(thus limiting retail priceselling inflation)in an increasingly competitivetrading environment.As a result of opera
30、tingleverage,our EBITDA estimates fall 9%in both2013-14 and our PBT falls 10%in 2013e and 12%in 2014e respectively.A FY12e unchanged total dividend of SEK9.5 is92%covered by earnings.This compares to 99%in FY11a,85%historically.This,combined withan estimates and broadly unchanged FY12e yearend net c
31、ash balance of SEK19.3bn,leads us toconclude that there is minimal downside risk todividend forecasts.,abc,60bps increase in markdown last year that wewould expect the company to recoup given abetter inventory position/more seasonal weatherpatterns,offset by the implied 40bps reduction inQ3 gross ma
32、rgins,the implied investment inunderlying product offer.Higher margin contraction assumptions in FY12result in a 7%fall in our FY12e PBT.Hennes&Mauritz:Comparison of HSBC vs consensus and HSBC new estimates vs old,(SEKm,November year end),2012e,2013e,2014e,2012e,2013e,2014e,Revenue,HSBCConsensus,121
33、,497121,961,134,359133,730,148,631148,096,Revenue,Old,New,121,497125,296,134,359139,638,148,631155,303,%Difference,-0.4%,0.5%,0.4%,%Difference,-3.0%,-3.8%,-4.3%,Gross marginEBITPBTEPSDPS,HSBCConsensus%DifferenceHSBCConsensus%DifferenceHSBCConsensus%DifferenceHSBCConsensus%DifferenceHSBCConsensus%Dif
34、ference,59.6%59.6%5bps22,29722,439-0.6%22,84023,093-1.1%10.310.4-0.8%9.59.7-2.2%,59.6%59.6%1bps24,44024,705-1.1%24,95725,526-2.2%11.211.6-2.8%9.510.1-5.5%,59.6%Gross margin59.6%6bps27,236 EBIT27,673-1.6%27,784 PBT28,417-2.2%12.5 EPS12.9-2.9%10.6 DPS10.9-2.4%,NewOld%DifferenceNewOld%DifferenceNewOld%
35、DifferenceNewOld%DifferenceNewOld%Difference,59.6%59.9%-21bps22,29724,059-7.3%22,84024,624-7.2%10.311.1-7.2%9.59.50.0%,59.6%59.8%-21bps24,44027,245-10.3%24,95727,837-10.3%11.212.5-10.3%9.510.7-10.3%,59.6%59.8%-21bps27,23630,797-11.6%27,78431,468-11.7%12.514.2-11.7%10.612-11.7%,Source:HSBC estimates,
36、Bloomberg(post event)4,Jul-10,Jul-12,Sep-10,Sep-12,Mar-12,Jan-11,Jan-12,Jul-11,Nov-10,Nov-11,Sep-11,Mar-11,May-11,May-12,Sep-09,Sep-10,Jan-09,May-09,Jan-10,May-10,May-11,May-12,Sep-12,Q42011,Sep-11,Jan-12,Q42010,Jan-11,Q22002,Q22003,Q22004,Q22005,Q32009,Q32010,Q32011,Q32012,Q22006,Q22007,Q32008,Q420
37、07,Q42009,Q22007,Q22009,Q22011,Q22008,Q42008,Q22010,Q22012,Q12010,Q32008,Q22009,Q42010,Q12006,Q42006,Q32007,Q32011,Q22012,Mar-09,Aug-09,Nov-10,Dec-12,Apr-11,Sep-11,Feb-12,Jun-10,Oct-08,Jan-10,Jul-12,Hennes&Mauritz(HMB SS)Specialty Retail8 October 2012Key leading indicatorsH&M LFL sales and Germany r
38、etail sales(%yoy),H&M Consumer confidence in top 5 markets,abc,25%15%5%-5%-15%,25%15%5%-5%-15%,40200-20-40,8070605040,German clothing sales growth,Tex tilw irtschaft(%)H&M LFL sales(%y oy)Germany:RETAIL SALES-Clothing v olumes(y oy%),Germany,Sweden,UK,France,US,Source:HSBC,Company data,Thomson Reute
39、rs DataStream,TextilwirtschaftRaw material commodity prices:2002-12200%150%100%50%0%-50%-100%,Source:Note:all countries except US are on LHS axis.Source:Thomson Reuters DataStreamCapacity:Chinese exports on a decline(%yoy)60%40%20%0%-20%,Cotton-UC/LBWool Aus.C/KGPoly ester TW/kg,Crude Oil-Brent FOB
40、U$/BBNy lon Yarn TW/kg,CH Exports-Textile Manufacturers to EUCH Exports-Textile Manufacturers to USCH Exports-Textile Manufacturers total,Source:Thomson Reuters DataStreamChina:Salaries-manufacturing(%yoy)40%30%20%10%0%China:Salaries-manufacturing(%y oy)Source:Thomson Reuters DataStream,Source:Thoms
41、on Reuters DataStreamEUR/USD30%20%10%0%-10%-20%EUR/USD-%y oy,30 day rollg av g,6 mt lagSource:Thomson Reuters DataStream,5,2007,Hennes&Mauritz(HMB SS)Specialty Retail8 October 2012Key financial dynamicsGroup revenues(SEKm)versus gross margin,Store openings versus EBITA margin(%),abc,150,000120,00090
42、,00060,00030,0000,2007 2008 2009 2010 2011 2012e 2013e 2014e,65%63%62%60%59%57%,350300250200150100,2008 2009,2010 2011 2012e 2013e 2014e,25%22%19%16%13%10%,Revenue(SEKmn)Source:Company data,HSBC estimatesEPS(SEK)and EPS growth(%)15129630,Gross margin(%),30%20%10%0%-10%-20%,No of store openingsSource
43、:Company data,HSBC estimatesDPS(SEK)and dividend yield(%)129630,Operating margin(%),5%4%3%2%1%0%,2007,2008,2009,2010,2011 2012e 2013e 2014e,2007,2008,2009,2010,2011,2012e 2013e 2014e,B enchmark EP S-diluted(LHS),yoy growth(%)(RHS),DP S,Dividend yield(%),Source:Company data,HSBC estimatesAsset utilis
44、ation,Source:Company data,HSBC estimatesNet cash(SEKm)versus FCF yield(%),10.0 x,8.4x,27,500,6%,8.0 x,7.1x,6.8x,7.0 x,6.3x,6.1x,6.1x,6.2x,22,000,5%,6.0 x4.0 x2.0 x0.0 x,16,50011,0005,5000,4%2%1%0%,2007,2008,2009,2010,2011,2012e 2013e 2014e,2007 2008,2009 2010,2011 2012e 2013e 2014e,6,Fixed assets tu
45、rnoverSource:Company data,HSBC estimates,Net cash/(debt)(SEKm)Source:Company data,HSBC estimates,FCF Yield(%),Hennes&Mauritz(HMBSS),SpecialtyRetail,8October2012,abc,7,H&M Key P&L Lines,(SEKm)yr end Nov.Revenue excl VAT%changeLFL sales growthImplied Space growthCurrency translationGross profitGross m
46、arginChange in bpsCosts%change%marginEBITDA%change%marginDepreciation&Amort.EBIT%change%marginNet Finance IncomePBT%change%marginTaxationNet Income%change%marginAdjusted EPS:Diluted%change,2010a108,4837.0%5.0%10.0%-8.0%68,26962.9%131bps(40,549)6.7%-37.4%27,72013.3%25.6%3,06124,65913.9%22.7%34925,008
47、13.1%23.1%(6,327)18,68114.0%17.2%11.314.0%,Q124,503-1.4%1.0%8.0%-10.4%14,17457.8%-410bps(9,958)3.3%-40.6%4,216-26.7%17.2%8083,408-31.5%13.9%1303,538-30.0%14.4%(920)2,618-30.0%10.7%1.6-30.0%,Q227,6322.2%2.0%10.0%-9.8%17,05761.7%-415bps(10,632)5.7%-38.5%6,425-17.1%23.3%8265,599-19.6%20.3%1535,752-18.3
48、%20.8%(1,495)4,257-18.3%15.4%2.6-18.3%,H152,1350.5%2.0%8.6%-10.1%31,23159.9%-409bps(20,590)4.5%-39.5%10,641-21.2%20.4%1,6349,007-24.6%17.3%2839,290-23.2%17.8%(2,415)6,875-23.2%13.2%4.2-23.2%,Q326,9120.1%-3.0%8.0%-4.9%15,76658.6%-195bps(10,228)3.9%-38.0%5,538-13.9%20.6%8314,707-16.8%17.5%1434,850-15.
49、4%18.0%(1,261)3,589-15.4%13.3%2.2-15.4%,Q430,9524.2%-3.0%9.0%-1.8%19,15061.9%-138bps(11,688)6.2%-37.8%7,462-4.2%24.1%7976,665-5.6%21.5%1376,802-5.2%22.0%(1,445)5,357-2.4%17.3%3.2-2.4%,H257,8642.2%-3.0%8.6%-3.4%34,91660.3%-162bps(21,916)5.1%-37.9%13,000-8.6%22.5%1,62811,372-10.6%19.7%28011,652-9.8%20
50、.1%(2,706)8,946-8.1%15.5%5.4-8.1%,2011a109,9991.4%-1.0%9.0%-6.6%66,14760.1%-280bps(42,506)4.8%-38.6%23,641-14.7%21.5%3,26220,379-17.4%18.5%56320,942-16.3%19.0%(5,121)15,821-15.3%14.4%9.6-15.3%,Q127,83213.6%3.0%10.0%0.6%15,53755.8%-202bps(11,100)11.5%-39.9%4,4375.2%15.9%9113,5263.5%12.7%1753,7014.6%1
