Emeria - comment

Incremental news on the Assurimo sale was scant, but within expectations. Overall, the results are fair. We will need to do more work on why Efficity would be driving so many external purchases (kick-backs presumably) and why the reactivation of litigation processes would drive guarantee costs. The €20m higher NWC outflow in Q225 can be half rationalised as temporary (not one-off) due to a €4m increase in B2C sales that would have hit DSOs, delayed invoices in Switzerland (we are guessing another €4m. For the remaining €12m, we have to trust management, but we have no reason not to. The large UK-related outflow in 2024 has been reversed. 

To recap the earnings: Revenues were right on target, with France B2C slightly stronger and Professional Services and International slightly behind expectations. Costs were overall €8m ahead of model and compounded by a vast WC outflow, dropped OCF a good €-25m below expectations, despite One-Offs being controlled ahead of schedule. CapEx was managed tightly as well, bringing NCF to only a €10m aggregate underperformance, and in contrast to our fears, the company did not draw the full RCF. 

As regards our positioning, we remain long the SUNs.