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February 06, 2019 CREDIT SUISSE, Eur Eqr – Business & Professional Services
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February 06, 2019 CREDIT SUISSE, Eur Eqr – Business & Professional Services
4 February 06, 2019 CREDIT SUISSE, Eur Eqr – Business & Professional Services
1) Staffing – Cyclical and structural concerns
We expect organic growth to slow across the group with Generalists
facing negative growth in the near term. Professionals are better
placed for 2019 but slowing growth will limit operational leverage in
the absence of self help. Structural challenges, especially in US and
UK will, we think, stymie growth, margin and return for the agencies.
O/P rated stocks: Page -self help; Robert Walters-Geography and
RPO. U/P rated: Adecco - cyclical headwinds; Staffline – margin
concerns and contractor availability
Key Views by sub-sector – Part 1
Prices as of 1st Feb 2019
2) Testing – Slowing growth and trade worries
We expect organic growth to slow through H119 for SGS and BVI
given tough comps and slowing Chinese consumer demand. We
forecast margin progress across the sub-sector but limited
expansion for Intertek given consumer headwinds and dilutive M&A.
O/P rated stocks: BVI -multiple mean reversion and Applus -
improving O&G, rating and lack of direct trade exposure. U/P rated:
ITRK -valuation, Chinese consumer exposure, limited margin
progression.
3) Distribution – More touch than tech
We see limited (but not zero) disruption from technology in the near
term given the sophisticated service models of these companies.
O/P rated stocks: Bunzl -stable growth, Brenntag -multiple mean
reversion, stable growth and relatively undisrupted. U/P rated:
DKSH- expensive growth with near and long term pressure on
returns, in our view.
NameRatingFXCurrentPTMkt Cap US$
AdeccoU/PCHF50.140.08,390
RandstadNEUR43.041.09,036
HaysNGBP1551702,951
PageGroupO/PGBP4485751,923
SThreeNGBP280320467
Robert WaltersO/PGBP526700520
StafflineU/PGBP670950245
NameRatingFXCurrentPTMkt Cap US$
Bureau VeritasO/PEUR19.524.09,872
IntertekU/PGBP4,8784,60010,300
ApplusO/PEUR9.814.21,611
SGSNCHF2,4062,40018,450
NameRatingFXCurrentPTMkt Cap US$
ElectrocomponentsNGBP542.86503,152
BunzlO/PGBP2,4342,60010,714
DKSHU/PCHF74.665.04,874
LogistaNEUR22.221.03,382
BrenntagO/PEUR41.952.07,408
FergusonNGBP5,1635,73515,669
Source: Credit Suisse estimates, Thomson Reuters DataStream。