Mittel ITALY / Holding

Transcription

1 Mittel ITALY / Holding Company update BUY (Prev. HOLD) Target: 2.3 (Prev. 1.83) Risk: High STOCK DATA Price 1.7 Bloomberg code MIT IM Market Cap. ( mn) 154 Free Float 35% Shares Out. (mn) week range Daily Volumes (000) PERFORMANCE 1M 3M 12M Absolute -5.0% -2.7% 25.4% Rel. to FTSE all shares 0.6% -0.8% 7.2% MAIN METRICS E 2018E EPS - cents DPS ord - cents NAV E 2018E Nav ps ord Listed assets 21% 5% 5% Controlling 61% 61% 60% MULTIPLES E 2018E P/E ord n.m. 4.4 x n.m. P/E ord Adj n.m. n.m. n.m. PBV 0.4 x 0.6 x 0.6 x INDEBTNESS E 2018E NFP holding D/E Debt to assets ratio PRICE ORD LAST 365 DAYS DELIVERING QUICKLY MIT has announced 3 new investments over the last 12 months (for a total expenditure of some 40mn) at appealing valuations (average 2017E P/E <10x) as well as the disposal of non-core assets for over 165mn (including the stake in Livanova and the cash collection of financial receivables), thus confirming a quick and effective execution of the strategic plan. NAV at 2.9ps (from 2.4) and target at 2.3ps (+26%) applying a 20% discount from the prev. 25% due to the reduction in the weight of listed assets (following the Livanova sale). Upgrade to BUY. Delivering quickly: upgrade to BUY We are raising our rating on MIT to BUY for the following reasons: The stock is trading at a high discount to our NAV (40% vs. 23% of the main listed holdings); we expect it to decrease thanks to a more active management style (as shown over the last 12 months); The management is delivering the strategic plan very quickly: disposal of non-core assets (> 165mn cash-in since the start of the plan), structure rationalization, new investments ( 40mn invested in 3 assets) at appealing valuations (average P/E <10x); In our view, the new investments (in companies featuring high cash flow generation) and the gradual reduction of structural costs will enable the company to go back to positive and material EBITDA from 2018 (we est. 14mn); Zaffiro (5% of NAV) is an investment in a defensive business (nursing home) whose growth is structural and is linked to population ageing, IMC (18% of NAV) is a cyclical business (automotive components) but with a strong market position, remarkable technological know-how and high service standards, whereas Ceramica Cielo (7% of NAV) operates in a sector (design sanitary ceramic) with a low concentration level that could therefore benefit from the pickup in the Italian (80% of revenues) and European economies. All of the 3 investments are some sort of platforms to start aggregating other businesses in their same industry. The LTV amounts to some 20% with firepower for other potential investments for at least 100mn, in our view, focusing mainly on Healthcare and Life Science where the managements has more knowhow and origination capacity. NAV at 2.9ps (from 2.4ps) and target at 2.3 (+26%) We have updated our NAV to 2.9ps (from 2.4) mostly to incorporate the recent deals on the subsidiaries (Livanova disposal, IMC acquisition) and using our valuations (P/E target 9x-11x) instead of the book value on the last 2 investments made (Cielo, IMC). Moreover, we have slightly reduced the holding costs (from an annual run-rate of 7.5mn to 6mn) on the back of a higher confidence in the achievement of the targets listed in the plan (< 5mn). ANALYSTS Luigi de Bellis l.debellis@equitasim.it February 12, 2018 # 32 Target at 2.3ps (+26%), applying a applying a 20% discount from the prev. 25% due to the reduction in the weight of listed assets (following the Livanova sale). Our new estimates factor in the full consolidation of subsidiaries. IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 1

2 MAIN FIGURES mn E 2018E 2019E Net Revenues Growth -30% -59% -102% % 88% 5% Total opex Income from partecipations EBITDA Growth n.m. n.m. n.m. n.m. 130% 26% Margin -6% -100% 4823% 11% 13% 16% EBIT Growth n.m. n.m. n.m. n.m. -89% 86% Margin -77% -148% 4496% 67% 4% 7% Adj. EBIT Growth n.m. n.m. n.m. n.m. -89% 86% Margin -77% -148% 4496% 67% 4% 7% Profit before tax Growth n.m. n.m. n.m. n.m. n.m. n.m. Margin -139% -128% 5221% 50% -3% 0% Net income Growth n.m. n.m. n.m. n.m. n.m. n.m. Margin -81% -131% 1439% 52% -4% -1% Adj. net income Growth n.m. n.m. n.m. n.m. n.m. n.m. Margin -81% -131% 1439% -21% -4% -1% STOCK DATA E 2018E 2019E EPS - cents Growth n.m. n.m. n.m. n.m. n.m. n.m. Adj. EPS - cents Growth n.m. n.m. n.m. n.m. n.m. n.m. DPS ord - cents Nav ps ord VARIOUS - mn E 2018E 2019E Capital employed INDEBTNESS E 2018E 2019E NFP NFP holding D/E 0.6 x 0.3 x 0.2 x 0.4 x 0.3 x 0.2 x Interests cov n.a. n.a. n.a. n.a. n.a. n.a. MARKET RATIOS E 2018E 2019E PNAV ord 0.5 x 0.6 x 0.6 x 0.7 x 0.6 x 0.6 x PBV 0.3 x 0.4 x 0.4 x 0.6 x 0.6 x 0.6 x P/E ord n.m. n.m. n.m. 4.4 x n.m. n.m. P/E ord Adj n.m. n.m. n.m. n.m. n.m. n.m. P/CF 4.8 x n.m. 6.2 x 3.8 x 24.2 x 17.7 x REMUNERATION E 2018E 2019E Div. Yield ord 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Roe -12.0% -7.9% -1.8% 12.8% -1.6% -0.7% ROCE -7.1% -6.7% -3.1% 8.4% -1.1% 0.0% Source: EQUITA SIM estimates & company data IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 2

3 NAV BUSINESS SEGMENTATION 2017E Other 19% Financial credits 28% Treasury shares 5% Financial serv icesholding 1% 2% Property 20% PE Funds 7% Building products 4% Healthcare 3% Car components 11% BUSINESS DESCRIPTION Mittel is active in the following sectors: Investments and Private Equity; MIT invests in the capital of listed and non-listed companies directly or indirectly via specialised closed end funds, with the aim of enhancing value in the medium term. In more detail: - Investments in non-listed companies: IMC (75% - car components), Zaffiro Group (75% - Nursing home), Ceramica Cielo (80% - design sanitary ceramic) and SIA SpA (0.3% - Payments sector). - Stakes in PE funds: Equinox 2. NAV & DISCOUNT UN / LISTED ASSETS WEIGHT NAV PS Discount Historical Average Listed assets 5% 80% 70% 60% 50% 40% 30% 20% 10% 0% Advisory and Grant Finance main services: - Investment Banking activities (i.e. M&A, DCM, ECM); - Debt Advisory and Restructuring; - Grant Finance assistance to obtain grant financing for research, development or other initiatives. Real Estate sector - main businesses: - Property development or redevelopment via the group Mittel Investimenti Immobiliari, focusing mainly on mid-level residential/tertiary real estate deals in Lombardy; - Participations in RE funds Management aims to increase this activity and exposure in the Private Equity business in the medium term. In particular, on March 30 th 2016, MIT s BoD approved the Strategic Plan, the first under the leadership of the new CEO, Mr. Bifulco. The Plan is focused on the following targets: - Streamlining the structure and reducing net holding costs; - Enhancing the value of non-core assets, allowing the company to raise around 300mn for investments over the next two years; - Investments in permanent capital: focusing on majority interests in small/medium Italian companies with high cash generation levels (average ticket 20mn), particularly in the Life science sector; - Investments in the asset management business in areas such as NPLs, Debt and Venture Capital / Growth Finance. Unlisted assets 95% IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 3

4 MITTEL: A QUICK OVERVIEW MITTEL: SHAREHOLDING AND SIMPLIFIED GROUP STRUCTURE SHAREHOLDERS STRUCTURE % on total shares % on voting shares Seconda Navigazione Srl * 24.6% 28.6% Fondazione Cassa di Risparmio Trento e Rovereto 10.9% 12.7% Istituto Atesino di Sviluppo Spa 8.8% 10.3% R. Bifulco (CEO) (also indirectly through Bootes srl) 7.1% 8.3% Treasury shares 14.1% - Free Float 34.5% - Source: Equita SIM elaborations on company data IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 4

5 VALUATION: UPDATED NAV TO 2.9PS (FROM PREV. 2.4PS) AND TARGET PRICE 2.3PS (+26%) We have updated our NAV to 2.9ps (from 2.4) mostly to incorporate the recent deals on the subsidiaries (Livanova disposal, IMC acquisition) and using our valuations (target P/E 9x-11x) instead of the book value on the last 2 investments made (Cielo, IMC). Moreover, we have slightly reduced the holding costs (from an annual run-rate of 7.5mn to 6mn) on the back of a higher confidence in the achievement of the targets listed in the plan (< 5mn). Target at 2.3ps (+26%), applying a applying a 20% discount from the prev. 25% due to the reduction in the weight of listed assets (following the Livanova sale). MITTEL - NAV # Asset Sector Stake % shares PS mn % Valuation method Mittel Treasury shares 14.1% % Market Value TOTAL LISTED SHAREHOLDINGS (1) 22 8% Industria Metallurgica Carmagnolese Automotive 75% 44 18% Net equity - target multiple (9x P/E 2018E) Zorro SRL (Zaffiro group)* Healthcare Facilities 75% 14 5% Net equity Book Value Mittel Design (Ceramica Cielo) Building products 80% 18 7% Net equity (11x P/E 2018E) Mittel Generale Investimenti (Liberata spa) Financial Services 27% 5 2% Book Value Sept-17 Mittel Investimenti Immobiliare (Property Assets)** Real Estate 100% 15 6% Book Value Sept-17 Earchimede Holding 85% 16 6% Book Value Sept-17E Funds (i.e Cosimo I, Augusto, Equinox II) PE and RE Funds n.m % Book Value Sept-17E Bios Holding n.m % Net equity Financial credits Mittel SpA (st/lt) Miscellaneous n.m % Equita SIM estimates and Company data Others partecipations and other assets/liabilities*** Miscellaneous 100% 20 8% Equita SIM estimates and Company data TOTAL UNLISTED SHAREHOLDINGS (2) % ATTRIBUTABLE NFP (3) % Adj. NFP as today HOLDING COSTS (4) % Normalised cash costs net of taxes 10% TAXES ON POTENTIAL CAPITAL GAINS (5) 0 0% STOCK OPTIONS DILUTION (6) 0 0% TOTAL NET ASSET VALUE ( ) % Nr. of Shares (mn) 87.9 NAV per Ord share 2.9 Current discount (premium) 40% P/NAV 0.6 Source: EQUITA SIM estimates ***includes: Mittel Advisory/Mittel Advisory Debt&Grant, SIA and others net assets (including fiscal assets) ZORRO SRL ( mn)* Assets Stake % mn % on NAV Valuation method Zorro SRL (Zaffiro group) 75% 14 5% Net equity Book Value Zorro SRL (Zaffiro group) (4) = (1)+(2)+(3) 100% 18 7% Net equity Gruppo Zaffiro (1) 100% 38 15% Implied valuation (15x 2019E P/E) NFP (2) 100% -8-3% As of Sept-17E NFP (price adjustments) (3) 100% -12-5% As of Sept-17E Source: Company data and EQUITA SIM estimates MITTEL INVESTIMENTI IMMOBILIARE ( mn)** Assets Stake % mn % on NAV Valuation method Mittel Investimenti Immobiliari (Property Assets) 100% 15 6% Net equity Property Assets Valuation (1)* 100% 85 33% Book Value Sept-17 Attributable NFP MII (2) 100% % As of Sept-17E Source: Company data and EQUITA SIM estimates; *includes Mittel headquarter (Pza Diaz 7 12 th floor, Milan) IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 5

6 In particular we have valued: - IMC at 59mn (Equity Value 100% - MIT stake 75%) using a target multiple of P/E 9x on 2018E adj. net income (our est. 6.6mn) vs. a 12.5x average for the car components sector. The deal price has valued 100% of IMC at 50.5mn, i.e P/E multiple = ~7x. IMC: FINANCIAL SNAPSHOT ( MN) E 2018E Revenues change YoY - 4% 2% EBITDA margin 25.4% 24.5% 24.5% EBIT mrg 22% 21% 13% Net Income adj Net debt MIT equity investment BV (75%) 16.9 MIT equity valuation (75%) 44.5 Equita Valuation (100%) 59.3 Implied valuation x 9.0 x Source: Company data and EQUITA SIM estimates CAR COMPONENTS SECTOR: MAIN MULTIPLES Des. PERFORMANCE EV/EBITDA P/E EBITDA margin Company Mkt cap ( mn) 1 m 3 m 6 m 1 y YTD E 17-19E 17-19E 17-19E Valeo sa 14, x 5.9 x 5.1 x 14.2 x 12.4 x 11.1 x 12.8% 13.2% 13.8% 0.7 x 9.9% 13.7% 12.8% Sogefi x 3.9 x 3.4 x 12.1 x 9.6 x 7.8 x 10.1% 10.7% 11.3% 1.6 x 4.0% 10.1% 24.0% Brembo spa 4, x 8.5 x 7.7 x 15.2 x 15.5 x 14.3 x 19.6% 19.5% 19.6% 0.4 x 7.2% 7.3% 3.1% Continental ag 46, x 6.4 x 5.8 x 14.8 x 13.2 x 12.2 x 15.4% 15.8% 16.1% 0.3 x 5.5% 7.9% 10.1% Elringklinger ag 1, x 6.5 x 6.0 x 13.0 x 10.9 x 9.7 x 14.9% 15.8% 16.5% 2.5 x 4.3% 9.7% 15.6% Faurecia 9, x 5.0 x 4.5 x 16.1 x 14.0 x 12.8 x 11.1% 10.5% 10.8% 0.2 x 9.9% 8.5% 12.3% Autoliv inc 10, x 7.8 x 6.8 x 19.4 x 16.2 x 13.9 x 12.7% 13.4% 13.9% 0.2 x 7.2% 12.2% 18.0% Borgwarner inc 9, x 7.4 x 6.7 x 14.3 x 12.9 x 11.9 x 16.8% 16.8% 17.0% 1.0 x 6.5% 7.1% 9.6% Johnson controls 28, x 8.8 x 8.2 x 13.5 x 12.4 x 11.1 x 16.2% 16.8% 17.1% 2.2 x 3.0% 5.9% 10.3% Lear corp 10, x 5.4 x 5.4 x 10.1 x 9.5 x 9.1 x 10.4% 10.2% 10.3% -0.1 x 4.1% 3.5% 5.4% Magna intl 15, x 5.3 x 4.9 x 9.3 x 8.2 x 7.3 x 10.7% 10.6% 10.5% 0.6 x 6.2% 5.2% 12.4% Denso corp 38, x 6.8 x 6.1 x 16.3 x 15.2 x 13.6 x 13.3% 13.3% 13.8% -0.6 x 5.6% 7.6% 9.3% Average x 6.5 x 5.9 x 14.0 x 12.5 x 11.2 x 13.7% 13.9% 14.2% 0.8 x 6.1% 8.2% 11.9% Median x 6.5 x 5.9 x 14.2 x 12.6 x 11.5 x 13.1% 13.3% 13.9% 0.5 x 5.9% 7.8% 11.3% Max 9.4 x 8.8 x 8.2 x 19.4 x 16.2 x 14.3 x 19.6% 19.5% 19.6% 2.5 x 9.9% 13.7% 24.0% Min 4.5 x 3.9 x 3.4 x 9.3 x 8.2 x 7.3 x 10.1% 10.2% 10.3% -0.6 x 3.0% 3.5% 3.1% Source: Company data and EQUITA SIM estimates Net debt/ Ebitda Sales CAGR EBITDA CAGR EPS CAGR - Ceramica Cielo at 29.2mn (Equity Value 100% - MIT stake 80%) using a target multiple of P/E 11x on 2018E earnings (our est. 2.7mn). The deal price has valued 100% of Ceramica Cielo at 18.8mn, i.e P/E multiple = 9.3x, which we find appealing vs. the valuations at which some midsmall companies in the materials industry are trading in Italy (e.g. Panaria E P/E 16.5x-12x, EV/EBITDA 7x-5.8x) or abroad (Geberit E P/E 26.6x-24.5x, Saint Gobain 15.1x-13.1x). IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 6

7 CERAMICA CIELO: FINANCIAL SNAPSHOT ( MN) E 2018E Revenues change YoY - 10% 7% EBITDA margin 21.0% 21.0% 21.5% EBIT mrg 16% 17% 17% Net Income adj Net debt MIT equity investment BV (80%) 10.0 MIT equity valuation (80%) 18.4 Equita Valuation (100%) 29.2 Implied valuation x 11.0 x Source: Company data and EQUITA SIM estimates MATERIALS SECTOR: MAIN MULTIPLES Description PERFORMANCE EV/EBITDA P/E Mkt cap Company Curr. ( mn) 1 m 3 m 6 m 1 y YTD PANARIAGROUP IND EUR x 5.8 x 4.9 x 16.5 x 12.1 x 9.4 x GEBERIT AG-REG CHF 13, x 18.3 x 17.1 x 26.6 x 24.5 x 22.8 x SAINT GOBAIN EUR 24, x 6.5 x 5.8 x 15.1 x 13.1 x 11.4 x Average x 10.2 x 9.3 x 19.4 x 16.6 x 14.5 x Median x 6.5 x 5.8 x 16.5 x 13.1 x 11.4 x Max 20.4 x 18.3 x 17.1 x 26.6 x 24.5 x 22.8 x Min 7.0 x 5.8 x 4.9 x 15.1 x 12.1 x 9.4 x Source: Company data and EQUITA SIM estimates For Zaffiro we use the Book Value ( 13.5mn for the 75% stake) in our NAV (from prev. DCF), pending more visibility on the company s dynamics. The book value implies a valuation for Zaffiro - 100%, gross of sub-holding net debt - of 38mn (implied E P/E of 22.8x-15x, E EV/EBITDA 9.5x-7.3x). ZAFFIRO GROUP: FINANCIAL SNAPSHOT ( MN) E 2018E Revenues change YoY 10% 9% 11% EBITDA margin 13.7% 13.0% 16.2% EBIT mrg 5% 5% 9% Net Income adj Net debt MIT equity investment (75%) 13.5 MIT equity valuation (75%) 13.5 Equita Valuation (Zaffiro 100%) 37.7 Implied valuation x 22.8 x Implied valuation x 9.5 x Source: Company data and EQUITA SIM estimates IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 7

8 HEALTHCARE FACILITIES: MAIN MULTIPLES Mkt Cap. PERFORMANCE EV/EBITDA P/E Company ( mn) 1 m 3 m 6 m 1 y YTD E 17-19E 17-19E 17-19E Korian 1, x 9.2 x 8.7 x 22.3 x 19.4 x 17.1 x 13.7% 14.0% 14.2% 5.2 x 4.5% 6.4% 14.2% Orpea 6, x 17.2 x 15.8 x 29.6 x 25.5 x 22.6 x 17.2% 17.6% 18.0% 7.5 x 6.7% 9.0% 14.5% Rhoen-klinikum 1, x 14.1 x 12.2 x 57.0 x 43.9 x 35.5 x 8.5% 9.8% 10.6% -2.2 x 3.7% 16.0% 26.8% Attendo ab 1, x 12.0 x 10.6 x 17.9 x 16.0 x 14.1 x 10.9% 10.6% 10.8% 3.3 x 12.2% 11.7% 12.6% Capio ab x 6.7 x 6.0 x 12.1 x 10.8 x 9.5 x 7.6% 7.8% 7.5% 2.6 x 4.0% 3.9% 12.7% Spire healthc pl 1, x 8.5 x 7.9 x 16.0 x 14.2 x 12.6 x 16.1% 16.4% 16.8% 3.1 x 4.0% 6.0% 12.7% Average x 11.3 x 10.2 x 25.8 x 21.6 x 18.6 x 12.3% 12.7% 13.0% 3.3 x 5.9% 8.8% 15.6% Median x 10.6 x 9.6 x 20.1 x 17.7 x 15.6 x 12.3% 12.3% 12.5% 3.2 x 4.3% 7.7% 13.5% Max 18.8 x 17.2 x 15.8 x 57.0 x 43.9 x 35.5 x 17.2% 17.6% 18.0% 7.5 x 12.2% 16.0% 26.8% Min 7.4 x 6.7 x 6.0 x 12.1 x 10.8 x 9.5 x 7.6% 7.8% 7.5% -2.2 x 3.7% 3.9% 12.6% Source: Bloomberg prices and consensus EBITDA margin Net debt/ Ebitda Sales CAGR EBITDA CAGR EPS CAGR Below there are some details on the subsidiaries and related real estate developments, and financial credits: MITTEL MAIN REAL ESTATE ASSETS (SEPTEMBER-2017) Company City SQM Type % Stake Real Estate Inventories ( mn) Mittel Investimenti Immobiliari Srl Arluno (MI) 9,561 Housing Estate Gamma Tre Como 17,600 Housing Estate - not yet started CAD Srl Paderno (MI) 15,848 Housing estate (149 flats) - sales at an advanced stage Fede Srl Vimodrone (MI) 5,000 Industrial buildings - ready to sale 100 Fede Srl Felizzano (AL) 46,500 Industrial building Iniziative Nord Milano Srl Bresso (MI) 9,212 Refurbished industrial buildings (3 sites) - on sale Breme Srl Milan 4,010 Construction of an office building (8 floors) Santarosa Srl Milan 6,700 Residential on sale Miva Srl Milan 5,983 Housing Estate (47 flats) - Outskirts to be completed (2019) Lucianita Srl Milan 4,800 Housing Estate (43 flats) - Close to the city center sales at an advanced stage (Via Lomellina Milan) Regina Srl Como 2,200 Housing Estate - ongoing design Mittel headquarter Milan - Mittel headquarter Pza Diaz 7 12th floor, Milan Total 89 Source: EQUITA SIM estimates Our NAV includes financial credits at book value (totalling roughly 139mn between short and medium-long term financial credits), with a recovery rate of 85% (i.e. 118mn). 71% of loans are composed of intragroup debts. The main positions are as follows: IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 8

9 FINANCIAL CREDITS AS OF TODAY Amount ( mn) % of total Financial Credits % Short-term (included in NFP) % Long-term % o/w to controlled/partecipated company % Long-term financial credits % Fondo Augusto % Liberata % Montini % Sofimar 8.4 6% Others 7.6 5% Current financial credits % Mittel Investimenti Immobiliari % Others 1.1 1% Source: EQUITA SIM estimates and company data We point out that part of the proceeds from the Livanova disposal (we est. close to 60mn) are still in the holding Bios, waiting for distribution. Financial structure At the end of December 2017, we estimate that the holding s NFP was at +3.5mn (vs. -17mn of September 2016), including about 70mn of current financial credits (of which 68mn intragroup loans to Mittel Investimenti Immobiliari). In our NAV, the attributable NFP is at -66.5mn, calculated as follows: Holding NFP = +3.5mn Current financial credits show clearly in our NAV = about -70mn; Consolidated Net Debt pro-forma (including the last extraordinary deals) at September 30, 2017 is at 102.2mn, of which: Bonds = 173.9mn Banks loans = 80.8mn Others loans = 16.3mn Cash and cash equivalent = 168.6mn Current financial credits = 0.3mn IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 9

10 FTSE All Italian Shares change (Dec-05=100) Italian Holding adj.* avg. discount to NAV Mittel February 12, 2018 SECTOR PERFORMANCE ITALIAN HOLDING COMPANIES: STOCK PERFORMANCE DESCRIPTION PERFORMANCE Company Currency Price Mkt cap ( mn) 1 m 3 m 6 m 1 y YTD ASTM SPA EUR , CIR SPA EUR COFIDE SPA EUR DEA CAPITAL SPA EUR EXOR EUR , IMMSI SPA EUR ITALMOBILIARE EUR , MEDIOBANCA EUR 9.8 8, MITTEL SPA EUR Average Median FTSE MIB INDEX LPX50 Listed PE EUR TR Source:Bloomberg prices ITALIAN HOLDNG COMPANIES: CURRENT AND HISTORICAL NAV AND DISCOUNTS Company Val. method NAV ( PS) * Disc. / (Prem.) to NAV listed assets Avg.** 2018 ASTM market price % 48% 36% 48% 46% 44% 20% 38% 31% CAMFIN (1) market price % 39% % - CIR market price % 54% 38% 34% 32% 33% 34% 36% 35% COFIDE see through % 51% 38% 32% 37% 46% 35% 41% 36% DEA CAPITAL market price % 38% 34% 24% 32% 32% 22% 28% 11% EXOR (2) market price % 40% 16% 12% 16% 22% 16% 29% 27% IMMSI market price % 50% 45% 46% 48% 3% - 44% 8% ITALMOBILIARE (3) market price % 53% 29% 41% 35% 34% 30% 40% 32% MEDIOBANCA (4) market price % 32% 32% 19% -8% -8% 18% 19% 11% MITTEL market price % 61% 49% 53% 40% 40% 26% 37% 40% UNIPOL market price % 23% 29% 18% VIANINI LAVORI market price % 60% 58% 56% 60% % - AVERAGE 46% 48% 38% 36% 34% 28% 25% 30% 23% (1) see-through until 2009; at market price starting from 2010 (2) IFIL ord. until 2007 (assuming total n. shares ord+sav), EXOR ord. (IFIL+IFI) since merger announcement (Sep-08) (3) adj. number shares: before Nov-07 based on market discount; after Nov-07 applying avg. between 3-year and market discounts (4) year-end: June * based on estimated year-end net debt and listed assets valued at December avg. market price ** 11-year historical arithmetic average ( when available); Source: EQUITA SIM estimates 40% ITALIAN HOLDING ADJ. AVERAGE DISCOUNT TREND 60% 25% % change in FTSE All Italian Shares Market historical adj.* monthly avg. Discount Holding adj.* avg. discount 55% 10% 50% -5% 45% -20% 40% -35% 35% -50% 30% -65% * excluding non recurrent events / unusual premiums 25% -80% 20% Source: Equita SIM estimates IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 10

11 SENSITIVITY MITTEL NAV: SENSITIVITY ( PS) FIN. CREDITS / RE assets ( mn) -25.0% -15.0% -10.0% TODAY 10.0% 15.0% 25.0% % % % TODAY % % % Source: EQUITA SIM estimates MITTEL NAV: SENSITIVITY ( PS) IMC / Ceramica Cielo ( mn) -25.0% -15.0% -10.0% TODAY 10.0% 15.0% 25.0% % % % TODAY % % % Source: EQUITA SIM estimates STATEMENT OF RISK The primary elements that could negatively impact MITTEL include: Significant deterioration in the main assets reference macroeconomic scenario Valuation risk for property development projects Potential write-downs on financial credits following a difficult market environment Nursing home sector: i) new M&A deals (likely acquisitions) at very dilutive multiples, ii) impact from negative regulatory changes, iii) tariffs decreases, iv) Decrease in prices decided by government authorities, v) Loss of reputation from inappropriate treatment of care provided to patients IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 11

12 INFORMATION PURSUANT TO ARTICLE 69 ET SEQ. OF CONSOB (Italian securities & exchange commission) REGULATION no /1999 This publication has been prepared by Luigi de Bellis on behalf of EQUITA SIM SpA (licensed to practice by CONSOB resolution no of December 22nd 1998 and registered as no. 67 in the Italian central register of investment service companies and financial intermediaries) In the past EQUITA SIM has published studies on Mittel EQUITA SIM is distributing this publication via to more than 700 qualified operators from February 13, 2018 The prices of the financial instruments shown in the report are the reference prices posted on the day prior to the date indicated on cover page. EQUITA SIM intends to provide continuous coverage of the financial instrument forming the subject of the present publication, with a semi-annual frequency and, in any case, with a frequency consistent with the timing of the issuer s periodical financial reporting and of any exceptional event occurring in the issuer s sphere of activity. The information contained in this publication is based on sources believed to be reliable. Although EQUITA SIM makes every reasonable endeavour to obtain information from sources that it deems to be reliable, it accepts no responsibility or liability as to the completeness, accuracy or exactitude of such information. If there are doubts in this respect, EQUITA SIM clearly highlights this circumstance. The most important sources of information used are the issuer s public corporate documentation (such as, for example, annual and interim reports, press releases, and presentations) besides information made available by financial service companies (such as, for example, Bloomberg and Reuters) and domestic and international business publications. It is EQUITA SIM s practice to submit a pre-publication draft of its reports for review to the Investor Relations Department of the issuer forming the subject of the report, solely for the purpose of correcting any inadvertent material inaccuracies. This note has been submitted to the issuer. EQUITA SIM has adopted internal procedures able to assure the independence of its financial analysts and that establish appropriate rules of conduct for them. Furthermore, it is pointed out that EQUITA SIM SpA is an intermediary licensed to provide all investment services as per Italian Legislative Decree no. 58/1998. Given this, EQUITA SIM might hold positions in and execute transactions concerning the financial instruments covered by the present publication, or could provide, or wish to provide, investment and/or related services to the issuers of the financial instruments covered by this publication. Consequently, it might have a potential conflict of interest concerning the issuers, financial issuers and transactions forming the subject of the present publication. Equita SIM S.p.A. provides or has provided in the last 12 months corporate finance services to Mittel Automotive Srl or to a company of the same group Equita SIM S.p.A. provides or has provided in the last 12 months corporate finance services to Mittel SPA or to a company of the same group Equita SIM S.p.A. provides or has provided in the last 12 months investment banking services for Mittel SPA Equita SIM S.p.A. performs or has performed in the last 12 months the role of Global Coordinator in the public offer concerning financial instruments issued by Mittel SPA Equita SIM S.p.A. performs or has performed in the last 12 months the role of intermediary in charge of coordinating the collection of acceptances in the tender and/or exchange offer launched by Mittel SPA Equita SIM S.p.A. perform or has performed in the last 12 months the role of specialist for financial instruments issued by Mittel SPA In addition, it is also pointed out that, within the constraints of current internal procedures, EQUITA SIM s directors, employees and/or outside professionals might hold long or short positions in the financial instruments covered by this publication and buy or sell them at any time, both on their own account and that of third parties. The remuneration of the financial analysts who have produced the publication is not directly linked to corporate finance transactions undertaken by EQUITA SIM. The recommendations to BUY, HOLD and REDUCE are based on Expected Total Return (ETR expected absolute performance in the next 12 months inclusive of the dividend paid out by the stock s issuer) and on the degree of risk associated with the stock, as per the matrix shown in the table. The level of risk is based on the stock s liquidity and volatility and on the analyst s opinion of the business model of the company being analysed. Due to fluctuations of the stock, the ETR might temporarily fall outside the ranges shown in the table. EXPECTED TOTAL RETURN FOR THE VARIOUS CATEGORIES OF RECOMMENDATION AND RISK PROFILE RECOMMENDATION/RATING Low Risk Medium Risk High Risk BUY ETR >= 10% ETR >= 15% ETR >= 20% HOLD -5% <ETR< 10% -5% <ETR< 15% 0% <ETR< 20% REDUCE ETR <= -5% ETR <= -5% ETR <= 0% The methods preferred by EQUITA SIM to evaluate and set a value on the stocks forming the subject of the publication, and therefore the Expected Total Return in 12 months, are those most commonly used in market practice, i.e. multiples comparison (comparison with market ratios, e.g. P/E, EV/EBITDA, and others, expressed by stocks belonging to the same or similar sectors), or classical financial methods such as discounted cash flow (DCF) models, or others based on similar concepts. For financial stocks, EQUITA SIM also uses valuation methods based on comparison of ROE (ROEV return on embedded value in the case of insurance companies), cost of capital and P/BV (P/EV ratio of price to embedded value in the case of insurance companies). MOST RECENT CHANGES IN RECOMMENDATION AND/OR IN TARGET PRICE (OLD ONES IN BRACKETS): Date Rec. Target Price ( ) Risk Comment June 26, 2017 HOLD (HOLD) 1.83 (1.64) High Change in estimates/valuation DISCLAIMER The purpose of this publication is merely to provide information that is up to date and as accurate as possible. The publication does not represent to be, nor can it be construed as being, an offer or solicitation to buy, subscribe or sell financial products or instruments, or to execute any operation whatsoever concerning such products or instruments. EQUITA SIM does not guarantee any specific result as regards the information contained in the present publication, and accepts no responsibility or liability for the outcome of the transactions recommended therein or for the results produced by such transactions. Each and every investment/divestiture decision is the sole responsibility of the party receiving the advice and recommendations, who is free to decide whether or not to implement them. Therefore, EQUITA SIM and/or the author of the present publication cannot in any way be held liable for any losses, damage or lower earnings that the party using the publication might suffer following execution of transactions on the basis of the information and/or recommendations contained therein. The estimates and opinions expressed in the publication may be subject to change without notice. EQUITY RATING DISPERSION AS OF DECEMBER 31, 2017 (art. 69-quinquies c. 2 lett. B e c. 3 reg. Consob 11971/99) COMPANIES COVERED COMPANIES COVERED WITH BANKING RELATIONSHIP BUY 37.9% 46.0% HOLD 58.6% 54.0% REDUCE 3.6% 0.0% NOT RATED 0.0% 0.0% The list of all conflicts of interest, rating dispersion and other important legal disclaimers are available on in the avvertenze legali section. IMPORTANT DISCLOSURES APPEAR AT THE BACK OF THIS REPORT 12