《EUROPEAN_AUTO_COMPONENTS：2013_WON’T_BE_ANY_EASIER-2012-10-11.ppt》由会员分享，可在线阅读，更多相关《EUROPEAN_AUTO_COMPONENTS：2013_WON’T_BE_ANY_EASIER-2012-10-11.ppt（40页珍藏版）》请在三一办公上搜索。
1、,26,18,98,24,23,98,IndustrialsEuropean Auto ComponentsEuropean AutoComponents2013 wont be any easier,abcGlobal Research Heading into a weak Q4 2012 the risk toguidance grows for Faurecia and Leoni We no longer expect global LVP growthin 2013 and cut our supplier EPS ests by,an average 20%;we also ch
2、ange our TPsfor each company except ContinentalChanges in ratings and target prices(in EUR),Company,RIC,Curr,_ Rating _,_TP _ Potnl Div,Trading on distressed multiples we,price,New,Old New Old return*yield,remain cautiously optimistic on the,Continental CONG.DE 79.54 OW(V)OW(V)ElringKlinger ZILGn.DE
3、 21.50 OW(V)N(V)Faurecia EPED.PA 12.95 OW(V)OW(V),25.5%23.6%40.5%,2.3%2.7%1.5%,sector.We like Continental andElringKlinger(both OW(V);we remain,LeoniValeo,LEOGn.DE 30.25 N(V)OW(V)VLOF.PA 35.80 N(V)N(V),3336,4338,14.0%4.06%,4.9%3.5%,OW(V)on Faurecia as a cyclical hedge,Source:HSBC estimates,Thomson R
4、euters Datastream;prices as at close 04 October 2012,*Potential return equals the percentage difference between the current share price and the targetprice,including the forecast dividend yield.8 October 2012Niels Fehre*,CFAAnalystHSBC Trinkaus&Burkhardt AG,Germany,Q4 outlook seasonal rebound now un
5、likely:The Q3earnings season starts on 16 October,and we expect goodresults as premium and NAFTA exposure is still strongenough to compensate for sluggish European volumes.However,outlook statements may turn more negative as wethink the volume rebound normally seen in the fourth quarterwill probably
6、 not materialise,and 2013 wont be any easier.We see some risks of a 2012 guidance breach for the sector,especially at Faurecia and Leoni.2013 flat global light vehicle production(LVP):In thisnote we cut our assumption for global LVP growth from 1.2%to zero.We see European markets declining by a furt
7、her 1%,while NAFTA production shrinks by 0.5%y-o-y.As we alsocut our forecast for the emerging markets,we no longer,+49 211 910 3426,niels.fehrehsbc.de,expect growth in 2013 global LVP.,Horst Schneider*AnalystHSBC Trinkaus&Burkhardt AG,Germany,We cut 2013 EPS forecasts:Our forecasts were based on as
8、cenario of stable volumes in the developed world and,+49 211 910 3285,horst.schneiderhsbc.de,profitable growth in emerging markets.As we think this,scenario will not materialise in 2013,we no longer see marginexpansion in the supplier sector.We cut EPS forecasts for thesector on average by 20%,and a
9、re roughly 10-20%belowconsensus for Faurecia,Valeo and Leoni;we cut our targets onthese three names,while raising our TP for ElringKlinger.View HSBC Global Research at:http:/,*Employed by a non-US affiliate of HSBC Securities(USA)Inc,and is not registered/qualified pursuant to FINRA regulations,We d
10、owngrade Leoni to N(V),from OW(V),andupgrade ElringKlinger to OW(V),from N(V):Taking,Issuer of report:,HSBC Trinkaus and Burkhardt AG,the already distressed valuations into account,we do not,Disclaimer&DisclosuresThis report must be read with thedisclosures and the analyst certificationsin the Discl
11、osure appendix,and with theDisclaimer,which forms part of it,expect a significant sector de-rating.We favour defensivecompanies that can still outperform global markets in 2013.We are OW(V)on Continental,ElringKlinger and Faurecia,and we cut Leoni to N(V),from OW(V),following thetarget price change;
12、Valeo remains N(V).,3,IndustrialsEuropean Auto Components8 October 2012Contents2013 wont be any betterCompany profilesContinentalElringKlingerFaureciaLeoniValeoDisclosure appendixDisclaimer2,1112172226303439,abc,2004,2006,2011,2002,2005,2007,2009,2012,2001,2003,2008,2010,16,000,15,000,14,000,13,000,
13、12,000,11,000,10,000,IndustrialsEuropean Auto Components8 October 20122013 wont be any better We expect a good set of results in the Q3 earnings season,butbelieve guidance wording on Q4 and 2013 will become morebearish,with risks to guidance for Leoni and Faurecia Outlook for 2013 weakens;we cut our
14、 2013 EPS forecasts for thesector by an average 20%We see earnings upside potential from the attractive risk/return atFaurecia,Continental and ElringKlinger,but cut Leoni to N(V),abc,Q3 earning season aheadThe latest newsflow from Daimler and Volkswagen,European OEMs and auto suppliers earnings cale
15、ndarQ3 2012 calendar,shows that the problem in European car markets isno longer confined to the mass players,it hasspread to the premium OEMs and will sooner orlater reach the supplier industry.The Q3 earningsseason,which starts on 16 October,will be the firsttest for the supplier industry,as season
16、al weaknessfrom the holiday period will be combined with theeffect of weak markets,especially in Europe.Thisis not much of a risk to Q3 forecasts,but the risk isgreater for Q4 as the seasonal sequential reboundmay not appear.,OEMsPSAVolkswagenRenaultDaimlerFiatBMWSuppliersGKNValeoFaureciaAutolivCont
17、inentalElringKlingerRheinmetallLeoniSource:Company data,24-Oct24-Oct25-Oct25-Oct30-Oct6-Nov16-Oct18-Oct23-Oct23-Oct31-Oct7-Nov9-Nov13-Nov,Western European car sales remain under pressure(000units)17,000Weste rn Europ e S AARWeste rn Europ e S AAR(trend)Source:IHS Automotive,Q3 production volumes dow
18、n 9.0%y-o-y in Europe(-16.6%q-o-q)In a normal year,Q3 European production volumesfall around 17%versus Q2 due to plant closures inthe holiday season reducing production days to 50from 60 in the previous quarter.However,Q3 2010and Q3 2011 have been extraordinarily strong,withplant closures shortened
19、to meet high demanddriven by exports or scrappage schemeincentivises.This year,Q3 volumes have beendown 16.6%versus Q2(in Europe),which looks,3,Valeo,Faurecia,IndustrialsEuropean Auto Components8 October 2012HSBC light vehicle production quarterly forecasts by region,abc,000 units,Q3 11,Q4 11,Q1 12,
20、Q3 12e y-o-y(%)q-o-q(%),Q4 12e y-o-y(%)q-o-q(%)q-o-q(%),Western EuropeEastern EuropeCentral EuropeEurope(excl Russia)North AmericaSouth AmericaJapan/KoreaGreater ChinaASEAN+IndiaGlobal,3,0288196834,0443,1821,1403,2653,8351,79718,308,3,3308837534,4523,4399993,6454,4371,44819,539,3,5228028854,7293,965
21、9473,7674,1081,97720,499,2,7117636823,6813,5711,2223,3924,0561,86518,681,-10.5%-6.8%-0.2%-9.0%12.2%7.3%3.9%5.8%3.8%2.0%,-15.4%-15.9%-19.9%-16.6%-10.4%19.7%-2.4%-2.6%-4.0%-6.5%,2,9398127624,0173,5761,1623,3264,5481,88619,442,-11.7%-8.0%1.2%-9.8%4.0%16.3%-8.8%2.5%30.2%-0.5%,8.4%6.4%11.8%9.1%0.1%-5.0%-
22、2.0%12.1%1.1%4.1%,8.4%6.4%11.8%9.1%0.1%-5.0%-2.0%12.1%1.1%4.1%,Source:HSBC estimates,IHS Automotive,more like a normal seasonal decline.The tableabove shows the data for all regions.The NAFTAregion shows high resilience to a weakening macropicture,which should compensate for some of theEuropean pres
23、sure,in our view.but Q4 rebound will be less strongthan expectedNormally,Q4 volumes(in Europe)are around15%higher than in Q3.This year,despite the morenormal Q3,it will be difficult to achieve the usualrebound in Q4.Due to production cuts resultingfrom inventory de-stocking at mass car makers andeve
24、n at premium OEMs,we expect Q4 productionto rebound only around 9%this year versus Q3with the risk being on the downside.This will be aburden for supplier industry margins,although theycan still partly compensate for the pressure onvolumes with non-European exposure as well asflexible work contracts
25、.We see risks to 2012guidance only for Faurecia and Leoni.Q3-2012 and 2012 expectations and outlook,2012 guidance risk atFaurecia and LeoniThe lower-than-expected Q4 production numberfor Europe may put the 2012 targets at risk,in ourview,depending on how aggressive these targetsare.Below(and in more
26、 detail in the profiles)wecompare current guidance from the auto supplierswith our estimates.We think that ElringKlinger andContinental have been cautious enough to createthe possibility of surprising on the upside.On theother side we see some risks for Faurecia(whichearns roughly 80%of its profits
27、in Europe,accordingto our calculations)as well as Leoni(which stillsuffers from integration problems at Daekyeungand weak product mix at the WCS division).Who cares about 2012?The question is whether a guidance cut wouldlead to further significant pressure on the shareprices.Looking at Faurecia we d
28、ont think so asthe stock has already been under severe pressurein the past few weeks(and months).Given lowvaluations we believe that the market is alreadyaware of the risk of a guidance breach.At Leoni,Company,Results Q3,Outlook,the situation is a little different,but we do not,Organic OE sales grow
29、th of 2012 confirmed,growing1.2%y-o-y restructuring in 2013Organic product sales growth 2012 at risk,believe that management will make another cut toits full-year targets with Q3 results.In the year to,Leoni,of 0.5%y-o-yWeak cable product mix,2012 increasingly at risk,date,Continental is the best-pe
30、rforming supplier.,integration problems persistElringKlinger Better margin on firm growth,2012,2013 confirmed,We think that even if Q4 2012 disappoints,investors,integration problems persistContinental Weaker auto business,rubber group compensatesSource:HSBC4,2012 confirmed,will probably focus more
31、on the outlook for 2013.,Jun-12,Jan-12,Feb-12,Mar-12,May-12,Jul-12,Aug-12,Sep-12,Oct-12,Apr-12,IndustrialsEuropean Auto Components8 October 2012Comparison of HSBC estimates with company guidance for 2012,abc,Faurecia,Guidance,HSBCe,Variance,SalesOp.incomeNet cash flow,EUR17-17.4bnEUR560-610mbalanced
32、 in H2,EUR17.3bnEUR545mEUR-100m in H2,0.6%-6.8%,Valeo,Op.margin,same level as FY 2011(EUR704m),EUR712m,1%,Leoni,Group sales-Wire&Cable-Wiring SystemsEBIT-Wire&Cable-Wiring Systems,EUR3.8-3.9bnEUR1.6-1.65bnEUR2.2-2.25bnEUR255-275mEUR115-125mEUR140-165m,EUR3.8bnEUR1.625bnEUR2.18bnEUR247mEUR107mEUR140m
33、,-1.3%0.0%-2.0%-5.9%-10.8%-8.2%,ElringKlinger,Organic growthAcquisitionsAdjusted EBIT,5-7%EUR20mEUR145-150m,7.70%EUR28mEUR155m,170bps40.0%5.1%,Continental,Group Sales-Automotive group-Rubber groupAdjusted EBIT margin-Automotive group-Rubber groupFCF,EUR32.5bnEUR19.5bnEUR13bnabove 2011 level(10.0%)8%
34、14.5%EUR600m,EUR32.6bnEUR19.7bnEUR13.3bn11.10%8%16.10%EUR759m,0.4%0.8%2.2%110bpsflat160bps26.5%,Source:Company presentations,HSBC estimates,2013 matters we no longersee any growth in global LVPOur economists have recently revised theirexpectations for global GDP growth,and nowexpect a 0.1%drop in th
35、e eurozone instead of0.3%growth y-o-y.According to their forecasts,the world will grow by 2.4%next year,only 1.2%YTD performance*of suppliers and EURO STOXX Auto and Parts1901701501301109070,in developed markets,but a still strong 5.6%inthe emerging world.,Vale o,Faure cia,Leo ni,ElringKlin ger,Con
36、tinenta l,Eu ro S toxx Au to and parts,*To 04 October 2012Source:Thomson Reuters Datastream5,3.8%,2.5%,3.8%,2.5%,EPS,IndustrialsEuropean Auto Components8 October 2012Changes to HSBC GDP forecasts for important regions_ 2012e _ _ 2013e _old new old new,We cut supplier EPS onaverage by 20%for 2013e,ab
37、c,WorldDevelopedEmergingEurozoneUSChina,2.1%1.0%5.2%-0.6%1.8%8.4%,2.2%1.2%4.9%-0.6%2.2%7.8%,2.5%1.3%5.8%0.3%1.7%8.8%,2.4%1.2%5.6%-0.1%1.7%8.6%,Following our revision to global LVP in 2013 wecut our expectations for the supplier industry.Ascan be seen below,our biggest cut to EPSforecasts is for Faur
38、ecia,which depends heavily,Brazil 2.5%1.7%Russia 3.0%3.0%Source:HSBC estimates(Global Economics Quarterly Q4-2012)We revise our global LVP numbersWe become even more pessimistic on 2013.Ascan be seen below,we now assume a smallcontraction in European light vehicle production(LVP),as exports remain u
39、nder pressure andausterity measures prevent any significantrebound in consumer confidence.Also,for theNAFTA region we now assume a small drop inproduction,following the strong rebound in 2012.We make a small revision to Chinese production.We cut LatAm production growth from 6%toaround 2%(mainly beca
40、use of de-stocking andthe incentive scheme in 2012 which will pull,on European production.However,we alsobecome more pessimistic on the other names.With our new EPS estimates we are nowsignificantly below consensus for three out of fivecompanies that still seem to believe in structuralmargin improve
41、ment at stable volumes.Webelieve that suppliers will struggle to improvemargins as pricing pressure will rise and volumeswill hardly improve versus 2012.Premiumexposure will probably not help anymore,aspricing and volumes come under pressure as wellin this segment.Therefore the already announcedrest
42、ructuring package at Faurecia will not be thelast one in the industry(eg,we raise restructuringcosts at Valeo and Faurecia for 2013e).Cuts to HSBC estimates,forward demand from 2013 into this years H2).,2012e,2013e,2014e,In summary,we no longer see any growth inglobal LVP in 2013(cut from+1.2%to 0%)
43、.Ourno-growth assumption follows 5%growth inproduction in 2012 when a very strong NAFTAmarket compensates for the sluggish productionvolumes in Europe.This will also have significanteffects on our supplier estimates,which have so,RevenuesFaureciaValeoLeoniElringKlingerContinentalEBITFaureciaValeoLeo
44、niElringKlingerContinental,0%3%-3%0%0%-7%-1%-16%-2%0%,-1%-4%-8%-1%0%-26%-11%-26%-7%0%,-2%-2%-9%0%0%-16%-3%-24%-3%0%,far rested on global growth,not global stagnation.,FaureciaValeoLeoni,-18%-4%-15%,-38%-14%-27%,-26%-3%-25%,Changes to HSBC LVP estimates for 2012 and 2013,ElringKlingerContinental,0%0%
45、,-8%0%,-4%0%,_ 2012e _ _ 2013e _old new old new,Source:HSBC estimates,Western EuropeEastern EuropeCentral EuropeEurope(excl Russia)North AmericaSouth AmericaGreater ChinaGlobal,-8.2%-2.4%-1.6%-7.3%13.2%3.5%4.2%4.1%,-9.1%-1.3%-0.1%-7.7%15.0%1.6%4.8%5.0%,1.3%-4.1%3.7%1.2%0.5%6.0%7.1%1.2%,-1.1%0.4%-0.5
46、%-1.1%-0.5%1.7%6.0%0.0%,Source:HSBC estimates,IHS Automotive6,2000,2001,2002,2003,2004,2005,2006,2007,2008,2009,2010,2011,2012,(x),16,12,10,8,6,4,Av g,IndustrialsEuropean Auto Components8 October 2012Consensus too high but low valuationprevents further sector de-valuation,abcEuropean suppliers are s
47、till trading at high discounts to historicalmultiples,2012 PE 2013 PE Historic,2012 2013 Historic,As can be seen in our ratings,we do not turn,PE,EV/,EV/,EV/,pessimistic on the sector or any single name.We,EBITDA EBITDA EBITDA,downgrade Leoni to Neutral(V)but upgradeElringKlinger to Overweight(V).Th
48、is is becausewe have to acknowledge the low valuation of the,ValeoFaureciaLeoniElringKlingerContinental,7.17.26.113.77.5,6.75.36.611.56.9,11.58.89.214.59.8,3.53.63.66.64.8,3.22.83.75.64.3,3.94.55.26.95.7,sector.Historically,the EuroStoxx Autos&Partstraded on 10.24x(2000-07 average)12-monthforward PE
49、 it is now trading at 6.5x 12-monthforward PE,a discount of 37%.Therefore wethink that a lot is already priced in.That does notmean negative consensus revisions may not putfurther pressure on share prices.But it does meanthat the overall downside risk for the sectorremains low at least for now.Secto
50、r trades at a 37%discount to historical(2000-07)12-month-forward PE multiple,Note:EV/EBITDA in this table is not comparable to the F&V page,which excludes pensions inthe EV calculationSource:HSBC estimatesOur key ratingsIn this note,we downgrade Leoni to Neutral(V)and upgrade ElringKlinger to Overwe
