Antolin - comment

We had dropped our forecast only slightly following the poor Q2 results, in order to test our thesis with a more constructive outlook (we are long the 30s and short the 28s to clip the differential in coupon). But Q3 was soft again. Asian revenues in particular disappointed with -10% at constant FX, although boosted to +9% due to the currency swings. Meanwhile, the US and Europe were less negative, and margins were better too, but following various asset sales, the company is now also smaller than it was a year ago. Altogether, EBITDA falls short of our estimate by €15m, mainly due to new model delays in China. Inventory and Receivables days are also well ahead of last year, which, together with higher CapEx, resulted in merely €243m of cash on BS - virtually unchanged from before, despite the new €150m facility. There is a statement that management are looking at further actions to strengthen the balance sheet, which we expect to be the sale of the lighting division - the primary curve-steepening risk to our position. The call is at 2.30 pm UK time.