Inbox: Berenberg zu voestalpine: A solid beat

●  Q1 reported post-PPA EBIT and EPS came in at €329m and €1.18, respectively, versus our forecast of €297m and €1.20 and Bloomberg consensus at €276m and €1.03. Adjusted EBIT was €332m versus our €300m forecast.

●  Net debt came in at €3.35bn, versus €3.2bn the prior quarter and our c€3.4bn forecast.

●  Q1 2017/18 divisional post-PPA EBIT results: Steel came in at €150m (Q4 2016/17: €107m; Q1 2016/17: €21m); High Performance Metals at €89.6m (Q4 2016/17: €74m; Q1 2016/17: €63m); Metal Engineering at €47m (Q4 2016/17: €61m; Q1 2016/17: €50m) with Metal Formingat€61m(Q4 2016/17:€64m;Q12016/17:€55m).

●  Company guidance: voestalpine did not give any quantitative guidance, but indicated that FY17/18E EBIT is expected to come in substantially better than FY16/17 (€823m on reported basis).

●  Our view: The c€30m beat versus our estimates is split as follows: €20m stronger results for the Steel division (EBITDA at €164/mt from €134/mt recorded in Q4 2016/17) and c€10m better results in the High Performance Metal division.

●  There will be a conference call at 14:00 CEST (13:00 BST). Dial-in +44 (0) 330 336 9411; ID: 2114091.

●  Our price target of €44.00 is derived from a 6.5x EV/EBITDA multiple-based valuation on our 2017/18E EBITDA. The multiple used is in line with the European steel sector average.