Stars Are Not Immune To Covid-19: Star Italia Segment

ValueTrack | Thematic Report | 26 November 2020
STAR ITALIA SEGMENT

VALUETRACK
Research Team
Tel: +39 02 80886654
STARs are not immune info@value-track.com
to Covid-19
STAR is the segment of “Mercato Telematico Azionario” (MTA), dedicated FTSE STAR Index 41,682
to small and medium capitalization companies which meet selected stricter Mkt Cap (€bn) 51.1
requirements in terms of liquidity, transparency & communication and
governance. 76 companies are currently listed on STAR segment,
representing nine different industries, for an aggregate €51bn Market Cap. STAR SEGMENT: AGGREGATED 9M19-9M20 FIGURES (€mn)
Star Index: “serial” outperformer 9M19 9M20
25,374
23,689
The FTSE Italia STAR has been one of the best performing indices both in
the short and long term not only at domestic level, but even if compared to
3,267
2,824
European and US mid-small cap indexes. Low exposure to banks and
8,760
8,408
1,776
oil&gas, high geographic diversification and leadership position in fast
1,237
1,521
growing market niches are usually reckoned as the main drivers underlying
884
such outperformance.
Covid-19 took its toll but 3Q20 shed positive hints REVENUES EBITDA EBIT ADJ. NET NET DEBT
PROFIT
Source: Value Track Analysis
9M20 results clearly underline Covid-19 negative impact, with total
aggregate turnover down mid-single digit y/y, Adj. Net Profit (ex. BB STAR: SECTORS RANKED BY Y/Y REVENUES GROWTH 9M20
Biotech) down -36% y/y and 17 companies recording a loss at the bottom
85%
line level. Implied 3Q20 however, highlights STAR resiliency potential:

indeed, aggregated Revenues and Adj. Net Profit got back flat y/y.
Best performing companies in 9M20 were (in our view and in alphabetical
13%
11%
order): Amplifon, Be Shaping the Future, Falck Renewables, Gruppo

MutuiOnline, IMA, La Doria, Newlat, Reno de Medici, Reply, Tinexta,
-7%
Unieuro, Wiit, Zignago Vetro.

-9%
-14%
-15%
-15%
ES
LS
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4Q20 looks affordable, recovery to take place in 2021-22

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We calculate that implied 4Q20 aggregate Net Profit consensus estimate

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might be excessively conservative, as it is forecasted down -40% y/y. Market

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consensus also expects 2021E aggregate Revenues to be higher than in STAR COMPANIES WITH HIGHEST Y/Y REVENUES GROWTH 9M20
2019A, while Net Profit might gain back 2019A levels only as of 2022E.
STAR currently trades at 13.4x P/E 2021E

47
STAR Index is currently trading at median 0.9x EV/Sales, 5.9x EV/EBITDA

and 13.4x P/E 2021E. Health Care (i.e Amplifon) and Technology (Wiit,
Reply and somehow Sesa) are currently trading at the highest multiples
while Consumer Services (e.g. Cairo Comm., Mondadori, Unieuro,
Cellularline) are showing lower values. The driver of multiples seems to be
20
19
19
profitability, rather than expected growth, but we note that behind some
17
15
14
14
13
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very high valuations (e.g. Amplifon, Carel Industries) there could be other
rationale e.g. secular trends, cash flow generation and extra-return on
capital.
WIIT DIB GG LD UNIR BEST MOL ISG PRT TXT
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STAR ITALIA | Thematic Report | 26 November 2020 | Research Team
VALUETRACK
Executive Summary
Star Index: “serial” outperformer
STAR is the segment of “Mercato Telematico Azionario” (MTA), dedicated to small and medium
capitalization companies which meet selected stricter requirements in terms of liquidity, transparency
& communication and governance.
The corresponding Stock Market Index (FTSE Italia STAR index) has been one of the best performing
ones both in the short and long term not only at domestic level, but even if compared to European and
US mid-small cap indexes.
Sector bias (i.e. low exposure to banks and oil&gas stocks), geographic diversification of revenues,
leadership position in fast growing markets niches of its components are usually reckoned to be the
drivers behind such outperformance.
Now the real question worthy of analysis is, in our view, if STAR companies have recently
outperformed also in terms of economic fundamentals.
9M20 Earnings: Covid-19 impact is clear…

Currently, 76 companies are “actively” listed on the STAR segment, representing nine different
industries, with an aggregate €51bn market capitalization. Industrials, is by far the first industry by
number of components (#28), and we note that #21 stocks are currently trading at Market Cap greater
than €500mn threshold, whilst only #20 ones boast a Market Cap lower than €100mn.
Looking at aggregate 9M20 financial results we clearly see the negative impact of Covid-19 outbreak:
® Turnover posted a mid-single digit y/y decrease at ca. €24bn;
® EBITDA decreased by -14% y/y at €2.8bn, (EBITDA margin at 11.9%, -95bps y/y);
® Adjusted Net Profit was down a more than proportional -36% y/y at €0.9bn.
As quite obvious, Consumer Services marked the worst top and bottom y/y decrease, while on the
contrary Technology sector was the only one to boast positive Turnover and Net Profit growth y/y..
Last but not least, larger caps (Market Cap >€500mn) outperformed smaller ones both in terms of
Revenues and margins (EBITDA Margin down only 50bps y/y to 16.3%).
…but implied 3Q20 underlines STAR companies’ proactivity and resiliency

Calculating 3Q20 implied results allows us to get a confirmation of STAR companies’ proactivity and
resiliency. Indeed, in 3Q STAR companies experienced a rebound in terms of both y/y top line growth
and profitability:
® Revenues posted a +0.9% y/y growth;
® EBITDA grew a more than proportional +4.5% y/y (EBITDA margin at 13.5%, +45bps y/y);
® Adj. Net Profit gained back a substantial stability i.e. it was flat y/y.
We note that the rebound was stronger for Technology and Health Care sectors, while milder for Basic
Materials and Utilities. Consumer Services remained among the weakest performers.
Top performers of the segment

Looking at the performance of the various STAR companies we find both lights and shadows. Among
the lights we flag that:
1) A dozen of companies maintained a double digit growth rate in 9M20, and 7 even recorded a
higher than 20% y/y growth in 3Q;
2) Almost half of the 75 STAR companies recorded a positive y/y EBITDA growth in 3Q.
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2
VALUETRACK
On the contrary, among the shadows we underline how:

1) In 9M20 two thirds of companies recorded negative y/y growth rates at Revenues-EBITDA-EBIT
level, and some 75% of total STAR companies reported a y/y decrease in Adj. Net Profit;
3) Some 17 companies posted a Net Loss in 9M20 (15 in 3Q20) vs. only 7 companies in 9M19 (12 in
3Q19).
In our view, best performing companies in 9M20 were (in alphabetical order): Amplifon, Be
Shaping the Future, Falck Renewables, Gruppo MutuiOnline, IMA, La Doria, Newlat,
Reno de Medici, Reply, Tinexta, Unieuro, Wiit, Zignago Vetro.
4Q20E looks affordable

Based on 9M20-3Q20 actual figures and on pre-earning season market consensus for the full year, we
calculate that implicit 4Q20 Net Profit estimate for STAR companies might be excessively
conservative, as on an aggregate basis it is seen deeply down (-40% y/y), in contrast with flattish
3Q20.
Looking at the various STAR companies the situation is quite scattered i.e. we view both names where
estimates upward revision is deserved (e.g. Cembre, Emak, Gruppo MutuiOnline, Newlat) and names
where, on the contrary, current full year estimates look too optimistic (e.g. Eurotech, Fila, Giglio
Group, Poligrafica San Faustino).
2021E Revenues back at 2019A levels, Net Profit not yet

As far as 2021E is concerned, current market consensus expects aggregate Revenues to stand higher
than in 2019A, while Net Profit might gain back 2019A levels only as of 2022E.
Technology boasts the most solid growth outlook in terms of both Revenues and Net Profit while
Consumer Goods, Consumer Services and Industrials are, instead, those sectors where recovery is
expected to be slower.
Valuation
Currently, STAR segment is trading at median 0.9x EV/Sales, 5.9x EV/EBITDA and 13.4x P/E on
2021E, but we note a high dispersion of multiples by sector, by size and across the various stocks.
Health Care (i.e. Amplifon) and Technology (Wiit, Reply and somehow Sesa) are currently trading at
the highest multiples while Consumer Services (e.g. Cairo Comm., Mondadori, Unieuro, Cellularline)
are showing lower values. Smaller caps trade at ca. 30% discount vs. larger ones.
Rather than expected growth rates, it seems to be profitability the driver most directly correlated with
multiples, but we note that behind such very high valuation (e.g. Amplifon, Carel Industries) the
rationale could be secular trends, cash flow generation and extra-return on capital.
3
VALUETRACK
STAR Index: “Serial” outperformer

FTSE Italia STAR index is one of the best performing stock market indexes both in the short and long
term even on an international scale. Sector bias, geographic diversification of revenues, leadership
position of its components are usually reckoned to be the drivers behind such outperformance. The
real question is if recent economic fundamentals are in line with such positive scenario.
Introduction: STAR steadily outperforming most of its Italian and foreign peers
FTSE Italia STAR index, the well-known cluster of high-quality stocks belonging either to the FTSE
Italia Small Cap or to the FTSE Italia Mid Cap indexes, is one of the best performing stock
market indexes both in the short and long term. Indeed, it is:
® Close to its all-time high;
® Basically flat YTD;
® Up roughly 13% based on 1-year performance;
® Up ca. 65% based on 5-years performance.
Such a positive performance, even more remarkable given the current gloomy macroeconomic stance
driven by Covid-19 outbreak, stands out vs. its “elder brother” FTSE MIB that is down 10% ca. both on
a YTD and 1-year basis.
STAR Index: Best performer vs. other Italian indices

Index 1M (%) 3M (%) 6M (%) YTD (%) 1Y (%) 5Y (%)
FTSE MIB 9.5 9.3 24.0 -10.7 -9.0 -5.5
FTSE Italia All-Share 0.0 -0.1 13.2 -17.0 -16.2 -5.6
FTSE Italia Mid Cap 3.5 5.5 16.2 -12.2 -8.8 4.8
FTSE Italia Small Cap 2.9 5.8 14.6 -12.0 -5.2 0.9
FTSE AIM Italia -1.4 -1.3 -2.9 -17.5 -16.7 -30.8
FTSE Italia STAR 4.6 9.9 26.0 4.6 13.3 64.3

th
Source: Value Track Analysis, Prices as of November 16
Also, if compared to European and US mid-small cap indexes, i.e. STOXX Europe Small 200, STOXX
Europe Mid 200 and US Russell2000, the STAR Index boasts a better medium-long term relative
performance. Only in the short term the STAR Index has underperformed US Russell 2000.
STAR Index: Among EU/US Mid-Small Caps outperformers

Index 1M (%) 3M (%) 6M (%) YTD (%) 1Y (%) 5Y (%)
STOXX Europe Small 200 7.1 9.7 22.5 -2.5 3.3 20.2
STOXX Europe Mid 200 8.1 9.8 20.9 -5.7 -1.6 12.9
Russell 2000 13.2 15.8 41.3 7.1 12.3 48.9
FTSE Italia STAR 4.6 9.9 26.0 4.6 13.3 64.3
Source: Value Track Analysis, Prices as of November 16th
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VALUETRACK
Outperformance heavily driven by larger stocks

Looking at STAR companies by market capitalization suggests that one driver of STAR Index
outperformance relies in the stock market evolution of its bigger components. Indeed, big caps
(companies with >€1bn Market Cap) have recorded on average a much better YTD performance if
compared to smaller ones, which on average scored a negative return.
STAR Index performance broken down by size of its components

Average performances by Mkt Cap (€mn)
>0/<50 >50/<100 >100/<500 >100/<500 >500/<1000 Total
YTD performance (%) -29.1 -35.3 -22.6 -3.0 7.0 4.6
1-y performance (%) -29.0 -28.0 -12.9 7.6 19.0 13.3

th
Source: Value Track Analysis, Prices as of October 30
Such an outcome is clear if we look at single stocks included in FTSE STAR basket. This evidence tells
us that relative size also plays a key role, furthermore bigger market caps also come with higher
liquidity.
STAR segment: Best and worst YTD performers

Market Market
Best Performers YTD (%) Price (€) Worst Performers YTD (%) Price (€)
Cap (€mn) Cap (€mn)
Sesa SpA 76.5 84.10 1,333 Fila SpA -37.0 9.05 373
Wiit SpA 71.7 155.50 424 IGD SIIQ SpA -39.9 3.49 401
Esprinet SpA 65.1 8.55 447 Pan. Ind. Cer. SpA -40.2 0.92 40
Tinexta Spa 64.3 19.06 1,062 Fidia SpA -43.2 2.16 12
Retelit SpA 50.9 2.38 389 IVS Group SA -43.4 4.92 175
Digital Bros SpA 44.6 18.04 249 Eurotech SpA -46.5 4.51 142
La Doria SpA 39.2 12.78 410 Fiera Milano SpA -48.0 2.74 194
Reply SpA 37.6 94.75 3,562 Aeffe SpA -53.4 0.93 94
Gruppo MutuiOnline SpA 33.5 26.60 1,010 Cairo Com. SpA -54.4 1.24 169
Amplifon SpA 33.4 34.20 8,166 Tesmec SpA -57.9 0.17 20
Other drivers of the outperformance: Sector bias and geographic diversification

STAR Index outperformance is usually reckoned to be due to:
® Low exposure to banks and oil&gas stocks, whose fundamentals have not been that brilliant in the
latest years;
® Leadership position of many STAR companies in fast growing markets niches with strong
international exposure.
Now the real question worthy of analysis is, in our view, if STAR companies have outperformed also in
terms of fundamentals.
5
VALUETRACK
STAR companies: Nomen est omen

STAR is the segment of “Mercato Telematico Azionario” (MTA), dedicated to small and medium
capitalization companies which meet a series of specific stricter requirements in terms of liquidity,
transparency & communication and governance.
Currently, there are 76 companies “actively” listed on the STAR segment, representing nine different
industries, for an aggregate €51bn market capitalization. Some of Italian most innovative
companies, generally positioned in fast growing markets niches and with strong international
exposure belong to this Index.
Introduction to STAR
STAR (“Segmento Titoli con Alti Requisiti) is the market segment of Borsa Italiana’s equity market
(MTA) dedicated to small-mid companies with a market capitalization (at admission) of less than
€1bn, which fulfil stricter requirements compared to other companies listed on MTA in
terms of transparency & communication, liquidity and governance.
With the introduction of STAR, Borsa Italiana aimed to provide small and medium-sized enterprises
(SMEs) – the backbone of the Italian industrial economy – with the most suitable stock market
segment to ensure their appropriate valorization and the necessary visibility to meet investors and
collect new funding at more favorable conditions, representing a great opportunity for all market
players:
® Issuers – they obtain greater visibility and easily access to investors;
® Investors – they benefit from higher transparency and liquidity.
As of the end of October, #76 companies are actively listed on the STAR segment (o/w one company,
BB Biotech, legally incorporated abroad), representing nine different industries, for an aggregate
€51bn market capitalization.
Stricter requirements than common MTA ones

To achieve these important and ambitious objectives, STAR companies have to fulfil a series of
requirements linked to the free float and to the adoption of corporate governance standards in line
with international best practice to ensure high liquidity levels of the security.
Main differences between MTA and STAR

Key requirements MTA STAR
Free float (minimum) at IPO 25% 35%
Market Cap at IPO Min €40mn Min €40mn & Max €1bn
Independent Director within the BoD Recommended Mandatory
Internal audit committee Recommended Mandatory
Remuneration committee Recommended Mandatory
Investor Relator Recommended Mandatory
Quarterly data (post IPO) Not Mandatory Mandatory
Source: Borsa Italiana
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VALUETRACK
In details, companies willing to be admitted to STAR shall be compliant to the following requirements:
® Liquidity – they must rely on a) a minimum capitalization of €40mn, not exceeding €1bn, b) a
minimum 35% free float c) the presence of a specialist acting as liquidity provider (continuous
display of bid-ask), in addition to the equity research coverage on the stock;
® Transparency and communication – a) make available the information (price sensitive) to
investors on the website also in English, b) have in charge an investor relations manager, and
lastly c) provide on a mandatory base 1Q and 3Q quarterly financial data in addition to half and
full year report;
® Governance – it is mandatory the presence of a) an independent director within the BoD, b) an
internal audit committee, and c) incentive compensation schemes for top management.
Industrials boasting a key role

By looking at the industry composition, STAR segment highlights a decent diversification, with at least
five out nine industries represented by significant number of firms.
Industrials, is by far the first industry by number of stocks (#28), followed by Consumer Goods,
Financials and Consumer Services.
Looking instead at the Market distribution across 4 different market capitalization clusters (as
reported in the table below), #21 stocks are currently trading at Market Cap greater than €500mn
threshold, whilst only #20 companies showing a Market Cap lower than €100mn.
On average, ½ of STAR companies show a capitalization within the €100-€500mn region.
STAR companies: Breakdown by sector and by Mkt Cap

Number of companies by Mkt Cap (#)
Industry/Sector
>0/<50 >50/<100 >100/<500 >500 Total
Basic Materials 1 0 2 0 3
Consumer Goods 1 2 10 1 14
Consumer Services 3 1 3 2 9
Financials 0 1 5 5 11
Health Care 0 0 0 1 1
Industrials 5 3 13 7 28
Technology 0 0 5 2 7
Telecommunications 0 0 1 0 1
Utilities 0 0 0 2 2
Total STAR 10 7 39 20 76
Source: Value Track Analysis, Prices as of November 16
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VALUETRACK
High concentration of total market capitalization

Industrials represents the largest sector, with an aggregate Market Cap of roughly €16bn (i.e. 35% of
total), followed by Financials and Technology with ca. 18% and 12% respectively.
Worthy to note, Health Care and Utilities, cover a relatively decent slice of total Market Cap,
notwithstanding the very low number of representatives.
STAR segment: Market Cap by industry
Technology
12.1%
Industrials
33.8% Telco
0.8%
Utilities
4.6%
Basic
Materials
0.8%
Consumer Goods
5.6%
Health Care
16.0% Consumer
Services
8.9%
Financials
17.6%
Despite a pretty wide distribution across sectors and Market Cap segments, the weight of larger caps is
high.
If we consider the top 5 companies, they account for 44% of total while 10 largest companies in terms
of current capitalization do account for ca. 60% of total (€27bn, i.e. €3.1bn average Market Cap).
Conversely, the remaining #66 stocks are currently trading at €310mn average Market Cap, or €20bn
on aggregate.
STAR segment: Market Cap concentration
Interpump
8%
BB Biotech Reply
8% 8%
Others Top 10 IMA

39% companies 61% 7%
Amplifon
15% Carel Industries
4%
Falck Renewables
Banca IFIS Italmobiliare 3%
Sesa 3%
2% 3%
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VALUETRACK
9M20 earnings season

All STAR components but for Sesa Spa have released their 9M20 financial results and the negative
impact of Covid-19 outbreak is clear. Looking at aggregate figures we calculate Turnover down mid-
single digit y/y at ca. €24bn, EBITDA down -14% y/y at €2.8bn, (EBITDA margin at 11.9%, -95bps
y/y), and Adjusted Net Profit down a more than proportional -36% y/y at €0.9bn.
By sector, Technology was 9M20 best performer and the only one to boast positive Turnover and
Net Profit growth y/y, contrary to Consumer Services that marked worst top and bottom y/y
decrease. Worthy to note, Industrials remain by far the largest contributor to almost all P&L lines,
accounting for 35% and 30% of Sales and Net Profit respectively in 9M20.
By size, we note that larger caps (Market Cap >€500mn) outperformed smaller ones both in terms
of Revenues evolution and margins resiliency (EBITDA Margin down only 50bps y/y to 16.3%).
Aggregate 9M20 figures: Revenues -6.6% y/y, Net Profit -25% y/y
In this 9M20 reporting season analysis, we take into account #75 corporates i.e. all the
companies listed on the STAR segment of MTA but for Sesa Spa, since it will release first-half figures
(for the period ended as of October 31th) in the next weeks, while for Unieuro and Digital Bros we
provided some pro-forma results, since they just released 1Q/1H interim results, i.e. fiscal year end
does not occur as of December, 31th. Companies classified as financials do contribute only for the
calculation of aggregate Net Profit.
Aggregated 9M20 financials for these 75 corps. allow us to highlight the following key figures:
® Revenues close to €23.7bn, down -6.6% y/y (€25.4bn in 9M19);
® EBITDA and EBIT at €2.8bn and €1.2bn, down -13.6% and -30.3% y/y respectively, with margins
at 11.9% and 5.2%, i.e. -100bps and -180bps respectively if compared to 9M19 12.9% and 7.0%;
® Adjusted Net Profit of roughly €0.9bn, down -36% y/y vs. €1.3bn in 9M19, these values being
calculated without BB Biotech that thanks to capital gains / losses on securities recorded €172mn
Net Profit in 9M19 figure and €26mn in 9M20;
® €8.4bn Net Debt as of end of September 2020, slightly better vs. €8.8bn as of September 2019
and corresponding to an annualized 2.2x Net Debt / EBITDA ratio.
STAR segment: Aggregate 9M19 – 9M20 results at a glance (*)

€mn 9M19 9M20 y/y (%, €mn)
Revenues 25,374 23,689 -6.6%
EBITDA 3,267 2,824 -13.6%
EBITDA Margin 12.9% 11.9% -95bps
EBIT 1,776 1,237 -30.3%
EBIT Margin 7.0% 5.2% -178bps
Net Profit 1,456 846 -41.9%
Net Profit adj. 1,521 884 -41.9%
Net Profit adj. (ex. BB Biotech) 1,283 857 -36.5%
Net Debt 8,760 8,408 -352
Net Debt/EBITDA (x) (**) 2.0x 2.2x
Source: Value Track Analysis on companies' data (*) Like-for-like comparison, i.e. both 9M19 and 9M20 figures include the same
number of companies even if not all these companies were listed as of September 2019 (**) Assuming annualised EBITDA
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VALUETRACK
Furthermore, looking at STAR companies’ Net Debt we note:

® Out of the #75 companies included in the sample, and excluding #11 ones classified as Financials,
#55 companies have a Net Debt position, while #9 ones rely on a Net Cash position;
® The impact of IFRS16 on Net Debt position stood at ca. €2.1bn, for those stocks which explicitly
released such info on their books.
STAR segment: Companies with a Net Debt exposure: 9M19 – 1H20 – 9M20 debt metrics
€mn 9M19 1H20 9M20
# of Companies with a Net Debt exposure (*) 56/64 51/64 55/64
Net Debt (attributable to Net Debt companies) 9,696 8,993 9,192
EBITDA (attributable to Net Debt companies) 2,830 1,304 2,349
Net Debt/EBITDA (x) (**) 2.6x 3.5x 2.9x
Source: Value Track Analysis on companies’ data

(*) #11 companies classified as Financials are not included in the computation (**) Assuming annualised EBITDA
Tech companies boasting best 9M20 performance by sector

By looking at the contribution of single industries to 9M20 aggregate results, we highlight that:
® Companies classified as Industrials remain by far the largest contributor to almost all P&L lines,
accounting for 35% and 30% of Sales and Net Profit respectively;
® Technology is the only sector to post both Revenues and Net Profit y/y growth, (even
if we note some M&A contribution) and to rely on a positive Net Cash Position;
® Basic Materials is the only industry which recorded a loss at the bottom line, albeit very small and
in line with 9M19 figure, and also displays the highest Net Debt / EBITDA ratio;
® Consumer Services reported the worst y/y Turnover and Net profit decrease, heavily
hit by Covid-19 outbreak and restrictive measures put in place so far;
® Utilities remained the sector with the highest EBITDA margin;
® Financial sector recorded some 53% decrease at the bottom line, however aggregate value is
biased by BB Biotech in (€172mn Net Profit in 9M20 vs €26mn as of 9M20).
STAR segment: 9M19/20 key financials by sector (#75 companies)

€mn Revenues EBITDA EBIT Adj. Net Profit
Sector # 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20
Basic Materials 3 535 459 69 63 8 11 -1 -2
Consumer Goods 14 5,695 5,315 575 499 275 194 138 108
Consumer Services 9 4,553 3,849 476 304 281 89 142 68
Financials 11 -- -- -- -- -- -- 388 183
Health Care 1 1,225 1,042 244 228 106 80 76 41
Industrials 28 9,216 8,382 1,500 1,288 856 595 589 305
Technology 6 3,732 4,128 201 226 152 169 104 117
Telecommunications 1 59 109 24 33 8 8 7 4
Utilities 2 358 405 178 183 92 93 77 59
Total STAR 75 25,374 23,689 3,267 2,824 1,776 1,237 1,521 884
Source: Value Track Analysis on companies' data
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VALUETRACK
STAR segment: 9M19/20 profitability and leverage ratios by sector (#75 companies)
(%, x) EBITDA Margin (%) EBIT Margin (%) Net Margin (%) Net Debt/EBITDA (x) (*)
Sector # 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20
Basic Materials 3 12.9 13.8 1.4 2.4 0.3 <0 7.0 4.9
Consumer Goods 14 10.1 9.4 4.8 3.6 2.3 1.4 2.5 3.2
Consumer Services 9 10.5 7.9 6.2 2.3 2.9 1.5 2.0 3.6
Financials 11 -- -- -- -- -- -- -- --
Health Care 1 19.9 21.9 8.7 7.6 5.0 3.9 2.6 2.3
Industrials 28 16.3 15.4 9.3 7.1 6.3 3.7 2.5 2.6
Technology 6 5.4 5.5 4.1 4.1 2.8 2.8 4.1 1.5
Telecommunications 1 40.0 30.0 12.9 6.9 11.5 3.3 1.9 3.2
Utilities 2 49.7 45.0 25.6 22.9 13.0 14.4 3.6 4.1
Total STAR 75 12.9 11.9 7.0 5.2 4.2 2.8 2.6 2.9
Source: Value Track Analysis on companies' data (**) Assuming Net Debt companies and annualized EBITDA
STAR sectors ranked by 9M20 fundamentals
Sectors ranked by 9M20 y/y Revenues growth (%) Sectors ranked by 9M20 y/y EBITDA growth (%)
85% 38%
13%
2%
13% 11%
-7% -8%
-13% -14%
-7% -9% -14% -15% -15%
-36%
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Sectors ranked by 9M20 y/y EBIT growth (%) Sectors ranked by 9M20 y/y Adj. NP growth (%)
45% 12%
11%
1%
-1%
-22% -24%
-25% -29% -30%
-68% -46% -47% -48%

-52% -53%
ls
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11
VALUETRACK
STAR sectors ranked by 9M20 fundamentals
Sectors ranked by 9M20 EBITDA margin (€mn) Sectors ranked by NFP (Net Debt) (€mn)
45% 29
-139
30% -365
-713
22% -973 -999
15% 14%
9% -1,949
8%
5%
-3,301
es
ls
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ns
s
ls
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ls
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Larger caps less affected by pandemic…

9M20 results broken down by Market Cap size drive the following key messages:
® Smaller caps, i.e. those companies showing Market Cap lower than €100mn, accounted for less
than 10% of total Sales and negatively contributed to aggregate EBIT and Net Profit;
® On the opposite, larger caps (Market Cap above €500mn) proved to be somehow well equipped to
mitigate Covid-19 negative implications, both in terms of Revenues and margins resiliency
(EBITDA Margin down only 50bps y/y to 16.3%).
STAR segment: 9M19/20 key financials by Market Cap (#75 companies)

€mn Revenues EBITDA EBIT Adj. Net Profit
Market Cap bracket # 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20
below 50 10 1,061 968 68 86 -6 2 -18 -12
within 50 & 100 7 1,224 1,024 165 82 74 -8 54 0
within 100 & 500 39 13,505 12,656 1,422 1,181 684 427 496 235
above 500 19 9,585 9,041 1,612 1,475 1,024 816 989 660
Total STAR 75 25,374 23,689 3,267 2,824 1,776 1,237 1,521 884
STAR segment: 9M19/20 profitability and leverage ratios by Market Cap (#75 companies)
€mn EBITDA Margin (%) EBIT Margin (%) Net Margin (%) Net Debt/EBITDA (x) (*)
Market Cap bracket # 9M19 9M20 9M19 9M20 9M19 9M20 9M19 9M20
below 50 10 6.4 8.9 <0 0.2 <0 <0 6.8 4.5
within 50 & 100 7 13.5 8.1 6.0 nm 3.8 -1.6 1.9 4.1
within 100 & 500 39 10.4 9.4 5.1 3.4 2.5 1.3 3.1 3.5
above 500 19 16.8 16.3 10.7 9.0 7.2 6.1 2.0 2.2
Total STAR 75 12.9 11.9 7.0 5.2 4.2 2.8 2.6 2.9
12
VALUETRACK
…and contributing massively to aggregate results

If we consider the #10 largest companies in terms of revenues contribution to 9M20 aggregate figures,
they do account for ca. 50% of Sales and 44% Adj. Net Profit, again confirming a relatively high
concentration of STAR segment.
STAR segment: High concentration of aggregate results

Top 10 Top 20
Key financials
€mn as % €mn as %
Revenues 11,617 49% 16,690 70%
EBITDA 1,201 43% 1,705 60%
EBIT 625 51% 832 67%
Adj. Net Profit 379 44% 502 59%

13
VALUETRACK
3Q results bringing growth positive again

3Q20 results underline that STAR companies are proactive and resilient. Indeed, we witnessed an
overall rebound in terms of both y/y top line growth and profitability, (+0.9% y/y for Revenues and
a more than proportional +4.5% y/y for EBITDA i.e. EBITDA margin at 13.5% +45bps y/y) with Adj.
Net Profit resulting substantially flat y/y.
By sector, 3Q20 rebound was stronger for Technology and Health Care while milder for Basic
Materials and Utilities. Consumer Services remains the obvious biggest short term victim of Covid-
19 outbreak.
3Q20 aggregate figures at a glance

STAR companies were able to get back on a positive path during 3Q20, as nearly half of
them recorded growth of both top line and profitability during the quarter. We highlight the following:
® While we previously saw that y/y growth over 9M period was overall negative, on the contrary
STAR companies reported a positive aggregate y/y growth over 3Q, +0.9% for Revenues and a
more than proportional 4.5% for EBITDA;
® More importantly, while EBITDA and EBIT margins slightly dropped over the 9M period, they
both posted a recovery during 3Q, witnessing the pre-existent structural efficiency of companies
belonging to the STAR segment;
® Last but not least, excluding the “outlier” BB Biotech, adj. Net Profit came in on the same page of
3Q19, highlighting a strong recovery vs. first half figures.
STAR segment: 3Q20 much better than the whole 9M20 period (*)
€mn 9M19 9M20 y/y (%) 3Q19 3Q20 y/y (%)
Revenues 25,374 23,689 -6.6% 8,631 8,706 0.9%
EBITDA 3,267 2,824 -13.6% 1,126 1,177 4.5%
EBITDA Margin 12.9% 11.9% -95bps 13.0% 13.5% +47bps
EBIT 1,776 1,237 -30.3% 590 602 2.0%
EBIT Margin 7.0% 5.2% -178bps 6.8% 6.9% +86bps
Adj. Net Profit (ex. BB Biotech) 1,283 857 -36.5% 418 415 -0.8%

(*) Like-for-like comparison, i.e. 3Q and 9M results include the same number of companies even if not all these companies were
listed as of September 2019 (**) Assuming annualized EBITDA
Most sectors recovered during 3Q20, yet with different speed

By sector, generally speaking we note that 3Q20 rebound was stronger for Technology and
Health Care while milder for Basic Materials and Utilities. More in details:
® Health Care and Technology sectors were best performers, recording a stable y/y growth on both
Revenues and EBITDA. Both sectors generated more than 1/3 of 9M Revenues during 3Q20 and
were also able to increase quarterly EBITDA Margin;
® Consumer Services is the obvious biggest victim of pandemic in the short term, and posted a y/y
decrease also in 3Q. However, this quarter was possibly the best during the 9M, as companies
made 44% of their 2020 Revenues;
14
VALUETRACK
® Basic Materials and Utilities confirmed to be relatively untouched by Covid-19 in terms of

Revenues, realizing more than 2/3 of their Revenues in the tough 1H20, while suffering – jointly
with Telco – in terms of profitability as they have been the only sectors facing a quarterly EBITDA
Margin decrease throughout the year.
1H20 and 3Q20 Revenues contribution to 9M results by Industry (%)
Utilities 70% 30%
Telco 62% 38%
Techn ology 64% 36%
Indu strials 65% 35%
Health Care 59% 41%
Con sumer Services 56% 44%
Con sumer Good s 64% 36%
Basic Materials 73% 27%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
1H20 3Q20
Source: Value Track Analysis, Bloomberg
EBITDA and EBITDA Margin in 3Q19 and 3Q20
53%
493 494
42%
38%
30%
23%
229
211 212 205 16% 17%
9% 12% 12%
17% 6%
11% 12% 97
15 9 7% 63 63 84 9 12 59 47
5%
erial
s ds es are stria
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Mat Goo erv ic lth C Indu n olo Ut ili
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Basi Con su sum
Con
EBITDA 3Q19 (€mn, lhs) EBITDA 3Q20 (€mn, lhs) EBITDA 3Q19 (%, rhs) EBITDA 3Q19 (%, rhs)
15
VALUETRACK
Company by company analysis

Looking at the performance of the various STAR companies we find both lights and shadows. Among
the lights we flag that: 1) a dozen of companies maintained a double digit growth rate in 9M20, and
7 even recorded a higher than 20% y/y growth in 3Q; 2) almost half of the 75 STAR companies
recorded a positive y/y EBITDA growth in 3Q.
Among the shadows we underline that: 1) In 9M20 two thirds of companies recorded negative y/y
growth rates at Revenues-EBITDA-EBIT level, and some 75% of total STAR companies reported a
y/y decrease in Adj. Net Profit; 2) Some 17 companies posted a Net Loss in 9M20 (15 in 3Q20) vs.
only 7 companies in 9M19 (12 in 3Q19).
Best performing companies in 9M20 were (in alphabetical order): Amplifon, Be Shaping the Future,
Falck Renewable, Gruppo MutuiOnline, IMA, La Doria, Newlat, Reno de Medici, Reply, Tinexta,
Unieuro, Wiit, Zignago Vetro.
9M20 economic performance of STAR components

Looking at all STAR components (we remind that our sample is made of 75 issuers) we find out that:
® Revenues y/y evolution. One third of companies recorded positive y/y growth rates while, on
the opposite, more than half (43) recorded a top line y/y decrease. We note that only two
companies (Wiit, Digital Bros) recorded y/y revenues growth above the 20% threshold;
® EBITDA-EBIT y/y evolution. Again, one third of companies recorded positive y/y growth rates
while the remaining were either declining y/y or not meaningful as EBITDA or EBIT was in the
red;
® Net Profit y/y evolution. Some 75% of STAR companies reported a y/y decrease in Adj. Net
Profit;
® Loss making companies. At the EBITDA level only 2 companies were loss making in 9M19 or
9M20 (Isagro and Fidia in 9M19, while Fidia and Aeroporto di Bologna in 9M20). The situation
is a bit worse at the EBIT level (4 companies registered a negative EBIT in 9M19, while the
number grew up to 13 in 9M20) and at the Net Profit one, with 17 companies in the red in 9M20
vs. only 7 companies in 9M19;
y/y Growth rates in 9M20 - companies by growth clusters

Growth rate Revenues EBITDA EBIT Adj. Net Profit
Above 20% 2 16 19 14
Between 0%and 20% 22 10 5 5
Negative growth 43 38 30 34
Not meaningful as loss-making (**) -- 3 13 22
Other not meaningful (*) 8 8 8 --
Total STAR 75 75 75 75
Source: Value Track Analysis (*) It includes #8 companies classified as financials, which do not provide meaningful Revenues,
EBITDA and EBIT financials (**) loss-making companies in 9M20 and/or in 9M19
Additional interesting insights arise if we look at the best / worst performers among the various
companies belonging to STAR. In details:
16
VALUETRACK
® Revenues y/y evolution. Top 10 performers boast double digit y/y positive top line growth rate
while, on the opposite, bottom 10 performers recorded double digit y/y negative growth rate:
o Among the top growing companies there are many Technology ones: Wiit, Be Shaping The
Future, Esprinet, TXT e-solutions, Digital Bros, Giglio Group, Gruppo MutuiOnline;
o On the other side, 9 out of the 10 most penalized companies belong to Consumer and
Industrials sector. A few names: Fiera Milano, Aeroporto Bologna, B&C Speakers, Marr,
Eurotech, IVS;
o With 93% and 47% y/y growth rates Retelit and Ascopiave would have been the highest
growing companies, though they were not taken into consideration since their growth is
largely attributable to M&A effect.
STAR companies ranked by best / worst revenue growth performance in 9M20
Top 10 by Revenue growth (%) Bottom 10 by Revenue growth (%)
47
-23 -24 -25

-28 -28
20 19 19 -34 -34
17
15 14 14 13 12 -42 -43
-63
WIIT DIB GG LD UNIR BEST MOL ISG PRT TXT CAI PRI SO LR IVS ETH MARR BEC ADB FM
® EBITDA y/y evolution. Only 4 out top 10 best performers were also among the highest growing
in terms of revenues (Unieuro, La Doria, Esprinet and MutuiOnline) while other best performing
companies in terms of EBITDA growth are pure Industrial ones such as Orsero, Reno De Medici,
Cembre, IMA that have profited from lower operating costs.
STAR companies ranked by best / worst EBITDA growth performance in 9M20
Top 10 by EBITDA growth (%) Bottom 10 by EBITDA growth (%)
52
47
41
36
-56 -58 -59

21 21 19
17 -68 -70 -70
15
13 -80 -82
-93
<100
ORS UNIR LD PRT RM EM CMB MOL IMA TNXT BEC MZB CELL MARR CAI ETH LR AEF FM ADB
17
VALUETRACK
® EBITDA margin performance. We note that despite Covid-19 impact, there are still very
profitable companies around (e.g. Wiit, Ascopiave, Retelit, Tinexta, MutuiOnline), but also some
low margins ones, either due to the current situation or due to their business model (i.e. retailers
such as Esprinet and Orsero).
STAR companies ranked by best / worst EBITDA margin performance in 9M20
Top 10 by EBITDA margin (€mn) Bottom 10 by EBITDA margin(€mn)
50
4
4 4 4
39
36 4
35
30 30 29 3 3
26 26
23
FKR SICT WIIT ASC LIT TNXT MOL CMB ZV SRI ORS MZB MARR AEF LR I IRC LR PRT ADB
0 FDA
0
Implied 3Q20 economic performance of STAR components

Looking at single STAR companies in 3Q20 we witness once again a rebound. Indeed:
® Revenues y/y evolution. #7 companies grew with a rate higher than 20% (Gruppo
MutuiOnline, IMA, Be Shaping The Future, Retelit, Wiit, Esprinet and Ascopiave) though the
growth of Retelit and Ascopiave was largely due to acquisitions;
® EBITDA-EBIT y/y evolution. More than #20 companies grew with a rate larger than 20% for
either EBITDA or EBIT, and almost half of the 75 companies displayed a positive y/y growth;
® Loss making companies. At EBITDA level 4 companies reported negative figures either in
3Q19 or in 3Q20. Isagro and Fidia did in both years. At EBIT level 9 companies reported losses in
3Q19 – 3 of which figured also among the 10 companies reporting a negative result in 3Q20.
More interestingly, as for Adjusted Net Profit there were 15 companies to post a loss in 3Q20
compared to 12 in 3Q19. Among them, 6 were negative on both years.
y/y Growth rates in 3Q20 - companies by growth clusters

Growth rate Revenues EBITDA EBIT Adj. Net Profit
Above 20% 7 24 21 18
Between 0%and 20% 23 11 9 8
Negative growth 37 26 21 23
Not meaningful as loss-making (**) -- 6 16 26
Other not meaningful (*) 8 8 8 --
Total STAR 75 75 75 75
Source: Value Track Analysis (*) It includes #8 companies classified as financials, which do not provide meaningful Revenues,
EBITDA and EBIT financials (**) loss-making companies in 3Q20 and/or in 3Q19
18
VALUETRACK
As far as the 3Q20 best / worst performers among the various companies belonging to STAR are
concerned, we note:
® Revenues y/y evolution. In 3Q20 it is possible to witness a Revenues growth recovery of some
Industrials (IMA and Biesse) and Consumer Goods (Emak and Landi Renzo) companies;
® Net Profit y/y evolution. Among the best performers we find some new names such as
Amplifon, Mondadori, Elica, Reply that add to the already mentioned Tinexta, Mutui online and
so on.
STAR companies ranked by highest Revenues and Net Profit y/y growth in 3Q20
Top 10 by Revenue growth (%) Top 10 by Adjusted Net Profit growth (%)
32 >100
26
21 21 20 20 19
75 72
15 69 64
10 9 39
31 28
18
7
WIIT PRT IMA MOL BEST EM TNXT UNIR LD LR RM AMP MN TNXT ELC MOL LIT ASC LD REY
® Net Cash / Net Debt position. We do not find a direct correlation between growth rates and
Net Debt, as top growing companies are both among the most solid (i.e. Reply, Unieuro and TXT
e-solutions) and among the most leveraged ones (i.e. Falck Renewables, IMA and Amplifon).
Allegedly, only 12 companies among the analysed ones report a Net Cash Position. However, there
is not even a clear sector trend, as Industrials is the most represented one both among companies
displaying Net Cash and the 10 which are more leveraged.
STAR companies ranked by highest Net Cash and Net Debt position at the end of September 2020
Top 10 by Net Cash Position (€mn) Top 10 by Net Debt Position (€mn)
327
-366 -375
-476 -485 -509
-569
136 -682 -701 -713
94
56 50 49
32
21
7 6 -1,174
ITM REY SG UNIR ELN AVIO TXT SICT DIB ETH IVS SO FM GCL DIS FILA FKR IMA AMP IGD
19
VALUETRACK
Companies clustered by top line growth (#75 stocks)
Revenues growth rates 9M20 vs 9M19 (%)

POSITIVE (#24 stocks) NEGATIVE (#43 stocks) NM (#8 stocks)
YoY Company name YoY Company name YoY Company name

84.7 Retelit SpA -0.8 El.En. SpA nm Banca Finnat Euramerica SpA
47.3 Wiit SpA -1.0 Cementir Holding NV nm BB Biotech AG
43.7 Ascopiave SpA -1.4 Italmobiliare SpA nm Equita Group SpA
19.5 Digital Bros SpA -1.5 Mondo TV SpA nm Tamburi Investment Partners SpA
19.3 Giglio Group SpA -3.3 Sanlorenzo SpA/Ameglia nm Banca IFIS SpA
18.9 La Doria SpA -3.4 Reno de Medici SpA nm Banca Sistema SpA
17.0 Unieuro SpA -4.2 Zignago Vetro SpA nm DeA Capital SpA
14.9 Be Shaping The Future SpA -4.2 d'Amico International Shipping SA nm Illimity Bank
14.1 Gruppo MutuiOnline SpA -6.0 Immobiliare Grande Ditr. SIIQ SpA
14.0 Isagro SpA -6.8 SAES Getters SpA
13.3 Esprinet SpA -6.9 Guala Closures SpA
12.4 TXT e-solutions SpA -7.0 Interpump Group SpA
11.8 Cembre SpA -7.6 Panariagroup Ind. Ceramiche SpA
11.5 SICIT Group SpA -8.0 Poligrafica San Faustino SpA
8.8 Sabaf SpA -8.4 Massimo Zanetti Bev. Group SpA
6.8 Emak SpA -9.4 Servizi Italia SpA
5.4 Orsero SpA -9.5 Piovan SpA
5.4 Newlat Food SpA -10.4 Alkemy SpA
4.9 Reply SpA -10.6 Gefran SpA
4.2 Tinexta Spa -11.4 Openjobmetis Spa
3.2 Centrale del Latte d'Italia -11.7 Fila SpA
2.8 Falck Renewables SpA -13.2 Elica SpA
0.7 IMA SpA -14.6 Irce SpA
0.1 Carel Industries SpA -14.9 Amplifon SpA
-17.8 Arnoldo Mondadori Editore SpA
-19.0 Tesmec SpA
-20.1 Avio SpA
-21.4 Datalogic SpA
-21.8 Aquafil SpA
-22.4 Biesse SpA
-22.6 Aeffe SpA
-23.5 Cairo Communication SpA
-23.9 Prima Industrie SpA
-24.1 Cellularline SpA
-25.1 Sogefi SpA
-28.2 Landi Renzo SpA
-28.4 IVS Group SA
-34.0 Eurotech SpA
-34.3 MARR SpA
-42.2 B&C Speakers SpA
-43.1 Aeroporto G. M. Bologna SpA
-51.1 Fidia SpA
-63.4 Fiera Milano SpA
20
VALUETRACK
Companies clustered by bottom line growth (#75 stocks)
Earnings growth rates 9M20 vs 9M19 (%)

POSITIVE (#19 stocks) NEGATIVE (#34 stocks) nm (*) (#15 stocks) nm (**) (#7 stocks)
YoY Company name YoY Company name 9M19>0 9M20>0 Company name 9M19>0 9M20>0 Company name
>100 Orsero SpA -0.5 Wiit SpA ✓ ✘ Aquafil SpA ✘ ✓ Alkemy SpA
>100 Newlat Food SpA -4.4 Cementir Holding NV ✓ ✘ Landi Renzo SpA ✘ ✓ Cent. del Latte d’Italia
>100 Be Shap. The Future SpA -7.2 Carel Industries SpA ✓ ✘ Sogefi SpA ✘ ✓ d'Amico Int. Ship SA
>100 BB Biotech AG -8.2 Sanlorenzo SpA/Ameglia ✓ ✘ MZB Group SpA ✘ ✓ Giglio Group SpA
>100 Unieuro SpA -9.3 Banca Sistema SpA ✓ ✘ Aeffe SpA ✘ ✘ Isagro SpA
>100 Digital Bros SpA -16.8 TIP SpA ✓ ✘ Cairo Com. SpA ✘ ✘ Fidia SpA
>100 SICIT Group SpA -22.1 Ar. MonD. Editore SpA ✓ ✘ DeA Capital SpA ✘ ✘ Panariagroup Spa
92.3 La Doria SpA -23.0 Falck Renewables SpA ✓ ✘ IGD SIIQ SpA
86.8 Esprinet SpA -24.0 Interpump Group SpA ✓ ✘ Prima Industr. SpA
55.8 Equita Group SpA -24.3 Avio SpA ✓ ✘ Guala Clos. SpA
43.8 Reno de Medici SpA -24.7 Ascopiave SpA ✓ ✘ SAES Getters SpA
39.8 Cembre SpA -26.4 Poligrafica San F. SpA ✓ ✘ Tesmec SpA
37.7 Tinexta Spa -31.7 Zignago Vetro SpA ✓ ✘ Aer. Bologna SpA
35.0 Emak SpA -32.0 Piovan SpA ✓ ✘ Fiera Milano SpA
19.6 Mondo TV SpA -35.1 Fila SpA ✓ ✘ Servizi Italia SpA
16.8 Banca Finnat Eur. SpA -35.7 El.En. SpA
14.7 TXT e-solutions SpA -37.5 Sabaf SpA
10.7 Gruppo MutuiOnline SpA -37.6 Banca IFIS SpA
10.1 Reply SpA -45.7 Amplifon SpA
-- Illimity Bank -46.8 Retelit SpA

-51.8 Italmobiliare SpA
-52.3 IMA SpA
-52.5 Gefran SpA
-52.9 Openjobmetis Spa
-68.9 Elica SpA
-69.5 Irce SpA
-75.0 Biesse SpA
-78.2 B&C Speakers SpA
-78.7 Cellularline SpA
-84.6 BB Biotech AG
-85.0 IVS Group SA
-88.5 Datalogic SpA
-94.4 Eurotech SpA
-98.1 MARR SpA
Source: Value Track Analysis on companies' data (*) Loss making companies in 9M20 (**) Loss making companies in 1H19 and/or 1H20
21
VALUETRACK
What to expect going forward?

Based on 9M20-3Q20 actual figures and on pre-earning season market consensus for the full year,
we calculate that implicit 4Q20 Net Profit estimate for STAR companies might be excessively
conservative, as on an aggregate basis it is seen deeply down (-40% y/y), in contrast with flattish
3Q20. Looking at the various STAR companies the situation is quite scattered i.e. we view both
names where estimates upward revision is deserved (e.g. Cembre, Emak, Gruppo MutuiOnline,
Newlat) and names where, on the contrary, current full year estimates look too optimistic (e.g.
Eurotech, Fila, Giglio Group, Poligrafica San Faustino).
As far as 2021E is concerned, current market consensus expects aggregate Revenues to stand higher
than in 2019A, while Net Profit might gain back 2019A levels only as of 2022E.
Technology boasts the most solid growth outlook in terms of both Revenues and Net Profit while
Consumer Goods, Consumer Services and Industrials are, instead, those sectors where recovery is
expected to be slower.
Implicit 4Q20E: Aggregate Revenues flat, Net Profit down 40% y/y
Looking at 4Q20E implied in STAR companies’ market consensus, three different aspects are
noteworthy:
® Revenues. While decreasing by a mid-single digit across 9M, aggregate Revenues are forecasted
to remain pretty flat y/y in 4Q, as full year decrease is expected in the-4.8% region;
® EBITDA. While decreasing by -13.6% y/y over the 9M20, aggregate EBITDA is predicted to boast
a single-digit y/y growth in 4Q, in line with 3Q20 performance. Worth to notice, EBITDA Margin
to slightly increase y/y, while EBIT Margin to be almost in line with 9M20;
® Adj. Net Profit. While being down by -25% y/y in 9M20 (and substantially flat in 3Q20),
aggregate Net Profit is predicted to drop y/y by ca. 40% in 4Q20.
All in all, implied 4Q20 estimates look reasonable at the Revenues, EBITDA, EBIT level while on the
contrary they may have been excessively conservative in terms of bottom-line unless we suppose that
market consensus is expecting some year-end one off negative item such as write downs or so on.
STAR segment: implied 4Q20E vs 4Q19A (#75 companies)
Sector 9M19 9M20 y/y (%) 4Q19 4Q20E y/y (%) 2019A 2020E y/y (%)
Revenues 25,374 23,689 -6.6% 9,823 9,821 0.0% 35,197 33,511 -4.8%
EBITDA 3,267 2,824 -13.6% 1,188 1,213 +2.2% 4,455 4,039 -9.3%
EBITDA Margin 12.9% 11.9% -95bps 12.2% 12.4% +28bps 12.7% 12.1% -60bps
EBIT 1,776 1,237 -30.3% 829 712 -14.1% 2,605 1,944 -25.4%
EBIT Margin 7.0% 5.2% -178bps 8.4% 7.2% -119bps 7.4% 5.8% -159bps
Adj. NP (ex. BB Biotech) 1,376 1,029 -25.2% 745 448 -39.9% 2,094 1,309 -37.4%
22
VALUETRACK
Estimates revision needed for many companies

Based on 4Q20E implied estimates, and assuming there is no “seasonality” in 4Q i.e. business
evolution to be on the same page of 3Q20, we can calculate which companies may deserve a positive or
negative estimates revision on 2020 full year figures. Results are as follows:
® Possible upward revisions. We believe Emak, Reno de Medici, Esprinet, Cembre, Gruppo
MutuiOnline, Tinexta, La Doria, and Orsero may deserve estimates upward revisions at both
Revenues and Net Profit level. We also hint that Newlat and Amplifon might require some
upward revision at Net Profit level only, as well as we see upward potential for Cementir Holding
and Be Shaping the Future in terms of 4Q20E revenues.
Forecasts to be possibly revised upwards: y/y growth in 3Q vs. y/y implied 4QE growth (%)
Top-line upward revision potential Bottom-line upward revision potential
-13 -84
BEST NWL
20 >100
CEM -7 -36
4 PRT >100
PRT 6 -20
26 RM
>100
RM 3 <-100
9 CMB
1
CMB -54 -6
2 AMP
75
-8 -23
TNXT TNXT
19 69
MOL -24 -21
21 MOL 39
EM -10 -95
20 EM
5
ORS -5 <-100
5 ORS
6
LD -12
10 LD <-100
18
4Q 3Q
4Q 3Q
® Possible downward revisions. On the contrary, and basically due to the same reasons, we
believe Eurotech, Cellularline, Marr, Servizi Italia, Guala Closures, Massimo Zanetti Beverages
and Landi Renzo might deserve some downwards earnings revision for both top and bottom line,
while Poligrafica San Faustino, Fila, Alkemy and Giglio Group might experience some
downwards revisions at the top-line level only.
Forecasts to be possibly revised downwards: y/y growth in 3Q vs. y/y implied 4QE growth (%)
Top-line downward revision potential Bottom-line downward revision potential
-12 SRI >100

BEC <-100
-46
9 ZV 2
GLC -21
-8
28 GCL 34
PSF <-100
-6
CELL 68
ETH 12 -49
-39
MARR -15
CELL 3 -45
-10 -8
CAI
MARR -7 <-100
-20 84
MTV
4 16
MZB
-9 2
BEC
6 -75
ALK
-9 MZB >100
<-100
GG 68
-15 LR 5
<-100
FILA 19
-12 4Q 3Q
4Q 3Q
23
VALUETRACK
Gradual recovery expected in 2021, but slower at Net Profit level

Covid-19 outbreak is pushing 2020E STAR companies’ financials down y/y and the doubt is if / when
there will be a steady rebound. Market consensus for 2021E expects the following:
® Revenues. Forecasts look at aggregate 2021E Revenues higher than 2019A ones. As highlighted
before, some industries were worse affected than others in 2020, though a complete recovery is
expected for all of them;
® Net Profit. On the contrary, recovery is expectedly to be slower in terms of Net Profit. Indeed,
forecasts look at aggregate 2021E Net Profit lower than 2019A one and suggest a full comeback
could take place only in 2022E;
® By Sector. Technology again boasts the most solid growth in terms of both Revenues and Net
Profit. As for Net Profit, also Basic Materials and Utilities should get back on a growth path in
2021. Consumer Goods, Consumer Services and Industrials are, instead, those sectors where
recovery is expected to be slower. Indeed, 2021E Net Profit is expected to be below 2019 level.
STAR segment: 2019A-20E-21E Revenues evolution by Industry (€bn)
12.7 12.7
8.7
7.4 7.6
7.0
6.6 6.6
2019
2020
2021
1.7 1.9
0.7 0.7 0.5 0.5
0.1 0.2
eria
ls
ood
s es are ls
olog
y ns ie s
Ma t er G ervic lth C s tria n atio Utilit
s um er S H ea Indu Te ch mun
ic
Bas ic Con s um co m
Con Te le
STAR segment: 2019A-20E-21E Net Profit evolution by Industry (€mn)
876
816
2019
2020 370
2021 278 262

240
218 208 201
174
129 147
91
62
24 11 23
3
eria
ls
ood
s es cials are ls gy ns ie s
Ma t er G ervic Fina
n lth C s tria nolo icatio Utilit
s um er S H ea Indu Te ch mun
Bas ic Con s um co m
Con Te le
24
VALUETRACK
Valuation
Currently, STAR segment is trading at median 0.9x EV/Sales, 5.9x EV/EBITDA and 13.4x P/E on
2021E, but we note a high dispersion of multiples by sector, by size and across the various stocks.
Health Care (i.e Amplifon) and Technology (Wiit, Reply and somehow Sesa) are currently trading at
the highest multiples while Consumer Services (e.g. Cairo Comm., Mondadori, Unieuro, Cellularline)
are showing lower values. Smaller caps trade at ca. 30% discount vs. larger ones.
Rather than expected growth rates, it seems to be profitability the driver most directly correlated
with multiples, but we note that behind such very high valuation (e.g. Amplifon, Carel Industries) the
rationale could be secular trends, cash flow generation and extra-return on capital.
STAR segment currently trading at 2021E 5.9x EV/EBITDA, 13.4x P/E

We calculate STAR segment to be currently trading at ca. 7.9x-5.9x EV/EBITDA and 16.5x-13.4x
P/E, based on 2020-21E median values.
Conversely, if we consider aggregate value, market multiples stand at 12.0x EV/EBITDA and 36.7x
P/E 2020E, which suggests a high dispersion of multiples among stocks, with a dozen of companies
likely to come with some losses in 2020E, and so definitely lowering the aggregate Net Profit.
If we assume i) simple averages (i.e. the average across sectors), ii) exclude loss making companies
and iii) filter data by usual covenants to exclude outliers and get more robust results, the picture
remains almost unchanged (multiples are slightly above median values), but for EV/Sales.
STAR segment: Market trading multiples by sector

Prices as of mid-Nov EV/Sales EV/EBITDA P/E
STAR 2019A 2020E 2021E 2019A 2020E 2021E 2019A 2020E 2021E
Aggregate 1.2 1.5 1.3 9.6 12.0 9.9 19.0 36.7 24.5
Median 1.2 0.9 0.8 8.2 7.9 5.9 16.8 16.5 13.4
Average 1.7 1.7 1.4 9.0 9.1 7.4 19.0 18.9 15.4
Source: Value Track analysis (*) Based on 2019FY companies' financials and on current market prices
Health Care (Amplifon) valuation is demanding

The above-mentioned multiples, however, differ quite materially across sectors: Health Care,
represented by just one company – the largest one in terms of market Cap (Amplifon) – is currently
trading at remarkable market multiples: 17.4x EV/EBITDA and 47.3x P/E 2021E.
Technology sector – the only one expected to post a positive y/y growth in 2020 – together with
Utilities is trading at ca. 20x P/E 2021E. On the opposite side, Consumer Services is trading at
undemanding market multiples: 4.5x EV/EBITDA and 10.2x P/E 2021E.
Last consideration about companies classified as Financials, which display a 15.8x P/E based on
2021E values.
Furthermore, we didn’t envisage particular correlations with the expected growth and/or margins,
anyway 2020E market multiples are on average on the same page of 2019A.
25
VALUETRACK
STAR segment: Stock market trading multiples by sector

Sector # 2019A 2020E 2021E 2019A 2020E 2021E 2019A 2020E 2021E
Basic Materials 3 0.9 1.3 1.2 8.2 5.1 5.0 35.0 10.2 15.4
Consumer Goods 14 0.9 0.9 0.7 8.3 8.4 5.8 17.9 14.4 13.6
Consumer Services 9 1.2 0.9 0.7 6.8 7.5 4.5 13.6 21.6 10.2
Financials 11 16.3 20.5 15.8
Health Care 1 3.8 5.1 4.1 17.5 22.1 17.4 >50 >50 47.3
Industrials 28 1.5 1.6 1.3 8.6 9.0 8.3 18.2 18.3 14.7
Technology 7 1.5 2.1 1.6 11.7 10.9 8.0 23.2 21.1 19.8
Telco 1 3.2 2.1 1.8 n.a. 6.7 5.5 n.a. 29.8 17.4
Utilities 2 5.1 4.9 4.7 11.4 10.1 9.7 40.6 26.7 21.3
Total STAR 76 1.7 1.7 1.4 9.0 9.1 7.4 19.0 18.9 15.4
Source: Value Track analysis
Small caps trade at 30% discount vs. large ones

If we focus on market capitalization, rather than specific sector, we see instead a positive correlation
between size and relative valuations:
® Large caps (Market Cap above €500mn) are trading at 10.6x EV/EBITDA and 20.0x P/E
2021E, not only due to Amplifon impact but maybe due also to the higher liquidity together with
greater efficiency, i.e. these companies are recovering faster from tough 1H20 on both growth and
margins;
® We spot just one stock (Banca Ifis), currently boasting a capitalization above €500mn and
showing a P/E below the 10x threshold;
® On the contrary, small caps (Market Cap below €100mn), are trading at undemanding 5.7x
EV/EBITDA and 12.0x P/E 2021E, which in turn translate into a ca. 30% discount if compared to
large ones.
STAR segment: Stock market trading multiples by sector

Market Cap # 2019A 2020E 2021E 2019A 2020E 2021E 2019A 2020E 2021E
below 50 10 1.1 0.7 0.6 9.9 7.1 6.8 18.1 16.3 12.3
within 50 & 100 7 0.8 0.7 0.6 5.5 7.7 4.6 12.8 18.8 11.7
within 100 & 500 39 1.7 1.8 1.4 8.7 7.9 6.5 19.6 18.1 13.9
above 500 20 2.4 2.6 2.3 10.6 12.7 10.6 20.0 21.4 20.0
Total STAR 76 1.7 1.7 1.4 9.0 9.1 7.4 19.0 18.9 15.4
26
VALUETRACK
Valuation differs materially among the various stocks

As highlighted before, STAR segment valuations unveil a high dispersion of multiples across
sectors and market cap size, so it is useful in our view to have a look at some specific stocks.
We focus on EV/EBITDA and P/E, based on 2021E consensus estimates, and we do not take into
account possible discount / premia related to market positioning, profitability or expected growth
rates. That said, we cluster stocks as follows:
® Highly valued stocks, i.e. some 15 names currently trading above either 10x EV/EBITDA and
20x P/E 2021E out of which a few names (Amplifon, Carel Industries, Wiit, Reply and Gruppo
MutuiOnline) are currently showing demanding market multiples on both EBITDA and EPS,
while other names (Aeroporto di Bologna and Fidia) are included in the list only due to their low
EBITDA, heavily hit by global economy downturn.
® Poorly valued stocks, currently trading below either 6x EV/EBITDA or 10x P/E 2021E. Here
we spot some stocks currently trading at undemanding market multiples despite strong y/y
economic performances achieved so far (Unieuro, Orsero and Emak) but also stocks whose P/E
multiples are inevitably affected by high leverage (Immobiliare Grande Distribuzione and Fila).
STAR segment: stock displaying larger and lower EV/EBITDA (x) multiples
Stocks with higher EV/EBITDA (x) Stocks with higher P/E (x)
28.5 47.3
38.4
22.5 21.7
34.4 34.0
31.0
17.4 28.4
15.8
14.6 23.8 22.7 21.8 21.7
12.6 12.2 11.5 10.9
AMP CRL GCL WIIT FKR REY SES MOL SG IP

ADB FDA CRL AMP WIIT REY MOL IMA IP TNXT
STAR segment: stock displaying larger and lower P/E (x) multiples
Stocks with lower EV/EBITDA (x) Stocks with lower P/E (x)
5.3 5.3
9.6 9.6
4.7
4.5
4.0 8.0
3.9 7.4
3.7 7.1 7.2
2.9 5.4
5.0 5.1
3.0
1.1
0.8
PRT UNIR SO CELL OJM ORS NWL RM ECNL ETH BST IGD IF CELL OJM ORS FILA EM UNIR SRI
27
VALUETRACK
Margins make the difference

In order to give more robust take-aways, and better understand if current prices are in some way
overvalued or undervalued, it is useful to take into consideration some value-maps eventually
highlighting possible positive correlation between trading multiples and earnings’ growth (2yrs CAGR
19A-21E) and/or margins.
As clearly reported in graphs below, our key messages are as follows:
® Correlation between multiples and expected growth. Not so straightforward, but we note
that companies with higher relative valuations are best positioned on average, all highlighting a
positive growth at both EBIDTA and Net Profit level;
® Correlation between multiples and margins. Highly valued stocks (plotted in blue) are
positively correlated with expected margins and the correlation seems stronger at EPS level, with
6 out 10 companies expected to record a Net Margin above 10%. At the same time, poorly valued
stocks (plotted in green) boast lower EBITDA margins, with just two exceptions, Cellularline and
Servizi Italia, expected to deliver a double-digit margin;
® Drivers behind very highly valued stocks. Amplifon and Carel Industries are by far the
most expensive stocks in STAR segment, and such demanding valuation cannot be justified by
their earnings’ growth and/or profitability. Rather, we believe secular trends and extra-returns on
capital could be the drivers. At the same time, Guala Closures as well might not deserve so “rich”
valuation, i.e. 34.4x P/E 21E if we look at its single-digit EPS growth and almost zero net margin.
Cash flow generation could be, on the contrary, the driver.
STAR segment: Current valuation vs expected growth
EV/EBITDA 21E vs. EBITDA CAGR 19A-21E (x) (*) P/E 21E vs. EPS CAGR 19A-21E (x)
25.0 FDA CRL

50.0
AMP
CRL
20.0 40.0
GCL
EV/EBITDA 2021E (x)
P/E 2021E (x)
AMP WIIT
REY WIIT
15.0 30.0 FKR
REY
MOL TNXT SG MOL SES
IP IMA IP
10.0 20.0
ETH RM
ECNL UNIR
5.0 ORS NWL FILA
OJM 10.0 IGD CELL
CELL SRI EM ORS
PRT BST
SO UNIR OJM
0.0 IF
0.0
-15 0 15 30 45 60 -35 -15 5 25 45 65
EBITDA CAGR 19A-21E (%) EPS CAGR 19A-21E (%)
STAR segment: Current valuation vs profitability
EV/EBITDA 21E vs. EBITDA Margin 20E (x) P/E 21E vs. Net Margin 20E (x)
25.0 50.0 AMP

CRL
CRL
20.0 AMP 40.0
P/E 2021E (x)
GCL WIIT
EV/EBITDA 2021E (x)
REY WIIT FKR

15.0 30.0 REY
IMA IP MOL SES
SG IP MOL
TNXT
10.0 20.0
ETH ECNL RM
OJM NWL UNIR
5.0 ORS 10.0 FILA
SO CELL SRI
ORS EM CELL
PRT
UNIR OJM
0.0 0.0
0 10 20 30 40 0 4 8 12 16 20
EBITDA Margin 2020E (%) Net Margin 2020E (%)
28
VALUETRACK
Stock by stock trading multiples (prices as of mid-November’20)
Consumer Goods: Stock market trading multiples

Company 2019A 2020E 2021E 2019A 2020E 2021E 2019A 2020E 2021E
Landi Renzo SpA 0.9 0.8 0.7 6.6 10.3 7.0 16.8 - 26.3
Sogefi SpA 0.3 0.4 0.4 2.6 3.5 2.9 - - 10.4
MZB Group SpA 0.5 0.5 0.4 5.6 8.5 5.3 13.2 - 13.7
C.le del Latte d'Italia 0.6 0.5 0.5 17.2 6.3 5.8 - 12.9 12.2
La Doria SpA 0.6 0.7 0.7 7.8 8.2 7.8 14.4 11.0 11.8
Newlat Food SpA 0.6 0.5 0.4 6.9 5.0 4.5 - 8.5 17.5
Orsero SpA 0.2 0.2 0.2 6.1 4.5 4.0 - 9.2 7.4
Elica SpA 0.5 0.6 0.5 5.5 8.3 4.8 - - 18.3
Emak SpA 0.8 0.6 0.6 7.1 5.4 5.0 13.5 10.8 8.2
Fila SpA 1.8 1.3 1.1 11.1 7.5 6.2 31.2 11.5 8.0
B&C Speakers SpA 2.4 2.4 1.8 10.8 17.5 9.2 16.3 27.9 14.6
Sanlorenzo SpA 1.2 1.0 0.9 8.5 8.0 6.9 20.4 17.8 15.3
Digital Bros SpA 1.4 2.3 1.5 14.4 8.8 5.6 - 20.4 13.5
Aeffe SpA 1.0 0.8 0.7 6.4 15.5 6.9 17.2 - -
Average 0.9 0.9 0.7 8.3 8.4 5.8 17.9 14.4 13.6
Consumer Services: Stock market trading multiples

Giglio Group SpA 1.6 0.9 0.7 - 13.2 7.4 - 37.7 11.1
Mondo TV SpA 3.8 1.9 1.5 5.4 2.6 2.0 13.6 10.1 9.2
Alkemy SpA 0.8 0.6 0.5 13.5 8.6 6.5 - 21.3 11.7
Cairo Comm. SpA 0.4 0.5 0.4 2.8 4.4 2.8 8.7 13.8 5.0
A. Mond. Editore SpA 0.7 0.5 0.4 6.3 3.9 3.0 19.1 44.5 10.5
IVS Group SA 1.5 1.6 1.2 6.7 7.4 5.6 17.4 - 13.1
MARR SpA 0.9 0.8 0.6 12.1 18.7 8.6 20.4 - 14.9
Cellularline SpA 1.2 1.1 0.8 5.1 6.0 3.7 7.8 15.1 6.3
Unieuro SpA 0.1 0.1 0.1 2.8 2.4 1.1 7.9 8.7 9.6
Average 1.2 0.9 0.7 6.8 7.5 4.5 13.6 21.6 10.2
Basic Materials: Stock market trading multiples

Aquafil SpA 1.0 0.9 0.7 8.2 6.8 5.3 35.0 - 15.7
Isagro SpA 0.7 0.2 0.2 - 0.8 2.8 - 3.3 -
SICIT Group SpA - 2.9 2.7 - 7.6 6.9 - 17.1 15.1
Average 0.9 1.3 1.2 8.2 5.1 5.0 35.0 10.2 15.4
29
VALUETRACK
Industrials: Stock market trading multiples

Carel Industries SpA 4.4 5.1 4.4 22.9 26.3 21.7 - - -
Cementir Holding NV 1.1 0.9 0.8 5.0 4.4 3.7 12.8 12.3 9.6
Panariagroup Ind.SpA - 0.8 0.7 - 7.9 5.8 - - -
Avio SpA 0.8 0.8 0.7 7.2 6.8 6.2 14.4 19.0 15.1
Cembre SpA 2.7 1.9 1.8 10.7 8.1 6.9 18.5 17.3 13.8
Irce SpA 0.3 0.3 0.2 11.4 12.8 7.0 24.5 - 28.4
SAES Getters SpA 1.9 1.2 1.1 9.7 7.1 5.7 30.4 - 21.8
Datalogic SpA 1.6 1.2 1.0 10.1 12.2 7.1 19.4 - 15.4
El.En. SpA 1.4 0.9 0.7 12.2 9.1 6.6 24.8 21.0 14.0
Gefran SpA 0.8 0.6 0.5 5.6 5.4 3.4 13.9 24.5 9.0
Prima Industrie SpA 0.7 0.7 0.5 7.2 9.8 5.8 19.3 - 12.7
Guala Closures SpA 1.6 1.5 1.4 8.4 8.4 7.2 - - 34.4
Reno de Medici SpA 0.5 0.5 0.5 - 5.0 4.7 20.6 12.4 11.7
Zignago Vetro SpA 3.1 3.2 2.9 11.2 12.2 10.4 21.0 25.6 20.1
Italmobiliare SpA 1.0 1.4 1.3 4.5 11.9 12.4 16.0 14.5 13.4
Biesse SpA 0.6 0.8 0.6 5.5 8.7 6.0 30.9 - 20.5
Fidia SpA 0.7 0.9 0.8 - - 22.5 - - -
IMA SpA 2.1 2.3 2.1 12.1 14.4 12.2 15.0 25.9 21.3
Interpump Group SpA 2.5 2.9 2.6 10.6 13.3 11.5 16.8 26.6 21.7
Piovan SpA 1.3 1.0 0.8 9.7 7.9 5.3 16.2 14.7 11.8
Sabaf SpA 1.3 1.2 1.0 7.5 6.6 5.4 15.0 24.1 11.5
Tesmec SpA 0.8 0.9 0.6 5.8 7.2 4.0 17.5 - 3.0
d'Amico Int. Sh. SA 3.3 2.3 2.4 8.2 5.2 5.2 - 9.5 7.1
Aeroporto G.M. SpA 3.4 3.5 3.1 9.5 - 28.5 21.3 - -
Fiera Milano SpA 1.4 6.8 2.3 3.7 - 6.9 11.3 - 8.0
Pol. San Faustino SpA 0.3 0.3 0.2 6.4 4.8 4.1 16.6 12.6 10.7
Servizi Italia SpA 0.9 0.8 0.7 2.9 3.5 2.9 10.3 - 9.8
Openjobmetis Spa 0.3 0.2 0.2 6.2 5.8 3.9 11.0 14.7 7.2
Average 1.5 1.6 1.3 8.6 9.0 8.3 18.2 18.3 14.7
Technology: Stock market trading multiples by sector

Be Shaping The F. SpA 1.2 0.9 0.8 6.9 5.2 4.5 27.9 14.8 12.1
Sesa SpA 0.3 0.4 0.6 5.2 7.4 9.6 14.7 19.8 23.8
Wiit SpA - 8.5 6.1 21.4 23.9 15.8 46.4 - 34.0
Reply SpA 2.1 2.6 2.3 13.0 16.9 14.6 22.8 31.3 27.6
TXT e-solutions SpA 1.2 0.8 0.6 10.3 6.9 5.2 - 25.1 19.8
Esprinet SpA - 0.0 0.0 - 1.3 0.8 12.3 14.4 11.9
Eurotech SpA 2.8 1.3 0.9 13.7 15.0 5.3 15.2 - 9.1
Average 1.5 2.1 1.6 11.7 10.9 8.0 23.2 21.1 19.8
30
VALUETRACK
Financials: Stock market trading multiples

Banca Finnat Eu. SpA - - - - - - - 20.7 -
BB Biotech AG - - - - - - 5.4 15.9 14.3
Gr. MutuiOnline SpA 3.9 3.8 3.8 11.1 13.4 13.3 19.7 24.4 22.7
Equita Group SpA - - - - - - 13.6 - -
Tamburi Inv. Par. SpA - - - - - - 35.9 - 28.7
Tinexta Spa 2.6 3.6 3.0 6.3 8.8 12.4 19.3 24.8 21.7
Banca IFIS SpA - - - - - - 6.1 7.6 5.4
Banca Sistema SpA - - - - - - 5.0 4.1 3.7
DeA Capital SpA - - - - - - 31.1 46.3 30.6
Illimity Bank SpA - - - - - - 10.4 20.0 10.3
IGD SIIQ SpA 11.4 9.9 9.1 15.0 14.8 13.2 - - 5.1
Average 6.0 5.8 5.3 10.8 12.3 13.0 16.3 20.5 15.8
Utilities: Stock market trading multiples

Falck Renewables SpA 5.6 5.9 5.6 10.3 10.6 10.2 28.5 37.8 31.0
Ascopiave SpA 4.5 3.9 3.7 12.5 9.5 9.2 52.7 15.6 11.5
Average 5.1 4.9 4.7 11.4 10.1 9.7 40.6 26.7 21.3
Health Care: Stock market trading multiples

Amplifon SpA 3.8 5.1 4.1 17.5 22.1 17.4 - - 47.3
Telecommunication: Stock market trading multiples

Retelit SpA 3.2 2.1 1.8 - 6.7 5.5 - 29.8 17.4
31
VALUETRACK
DISCLAIMER
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Stars Are Not Immune To Covid-19: Star Italia Segment

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Stars Are Not Immune To Covid-19: Star Italia Segment

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ValueTrack | Thematic Report | 26 November 2020

STAR ITALIA SEGMENT

STARs are not immune info@value-track.com

Star Index: “serial” outperformer 9M19 9M20

line level. Implied 3Q20 however, highlights STAR resiliency potential:

order): Amplifon, Be Shaping the Future, Falck Renewables, Gruppo

Unieuro, Wiit, Zignago Vetro.

4Q20 looks affordable, recovery to take place in 2021-22

We calculate that implied 4Q20 aggregate Net Profit consensus estimate

might be excessively conservative, as it is forecasted down -40% y/y. Market

Source: Value Track Analysis

STAR currently trades at 13.4x P/E 2021E

STAR Index is currently trading at median 0.9x EV/Sales, 5.9x EV/EBITDA

9M20 Earnings: Covid-19 impact is clear…

…but implied 3Q20 underlines STAR companies’ proactivity and resiliency

Top performers of the segment

On the contrary, among the shadows we underline how:

4Q20E looks affordable

2021E Revenues back at 2019A levels, Net Profit not yet

STAR Index: “Serial” outperformer

STAR Index: Best performer vs. other Italian indices

FTSE MIB 9.5 9.3 24.0 -10.7 -9.0 -5.5

FTSE Italia All-Share 0.0 -0.1 13.2 -17.0 -16.2 -5.6

FTSE AIM Italia -1.4 -1.3 -2.9 -17.5 -16.7 -30.8

FTSE Italia STAR 4.6 9.9 26.0 4.6 13.3 64.3

STAR Index: Among EU/US Mid-Small Caps outperformers

Russell 2000 13.2 15.8 41.3 7.1 12.3 48.9

FTSE Italia STAR 4.6 9.9 26.0 4.6 13.3 64.3

Source: Value Track Analysis, Prices as of November 16th

Outperformance heavily driven by larger stocks

STAR Index performance broken down by size of its components

>0/<50 >50/<100 >100/<500 >100/<500 >500/<1000 Total

YTD performance (%) -29.1 -35.3 -22.6 -3.0 7.0 4.6

1-y performance (%) -29.0 -28.0 -12.9 7.6 19.0 13.3

STAR segment: Best and worst YTD performers

Tinexta Spa 64.3 19.06 1,062 Fidia SpA -43.2 2.16 12

Reply SpA 37.6 94.75 3,562 Aeffe SpA -53.4 0.93 94

Amplifon SpA 33.4 34.20 8,166 Tesmec SpA -57.9 0.17 20

Source: Value Track Analysis

Other drivers of the outperformance: Sector bias and geographic diversification

STAR companies: Nomen est omen

Stricter requirements than common MTA ones

Main differences between MTA and STAR

Free float (minimum) at IPO 25% 35%

Independent Director within the BoD Recommended Mandatory

Internal audit committee Recommended Mandatory

Remuneration committee Recommended Mandatory

Investor Relator Recommended Mandatory

Quarterly data (post IPO) Not Mandatory Mandatory

Source: Borsa Italiana

Industrials boasting a key role

STAR companies: Breakdown by sector and by Mkt Cap

Source: Value Track Analysis, Prices as of November 16

High concentration of total market capitalization

STAR segment: Market Cap by industry

Source: Value Track Analysis, Prices as of November 16th

STAR segment: Market Cap concentration

Others Top 10 IMA