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1. Company Snapshot

1.a. Company Description

Cairo Communication S.p.A. operates as a multimedia publishing company in Italy and Spain.It engages in the publishing of periodicals and books; television programs through the La7 and La7d channels, as well as pay and Web TV; multimedia concessionaire for the sale of advertising space on television, press, and stadium media; and weekly and monthly newspapers and periodicals.The company is also involved in the organization of sporting events; operation of network; and distribution of editorial and non-editorial products at newsstand channels and other authorized points.


Cairo Communication S.p.A. was founded in 1995 and is headquartered in Milan, Italy.

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1.b. Last Insights on CAI

Cairo Communication's recent performance was negatively impacted by the European market downturn, with the STOXX Europe 600 Index declining by 1.54% amid ongoing geopolitical tensions and economic uncertainties. The company's exposure to the European market volatility likely contributed to its weak performance. Additionally, the recent trade agreements with the U.S. and steady economic indicators from the European Central Bank failed to boost investor sentiment, further exacerbating the negative sentiment towards Cairo Communication.

1.c. Company Highlights

2. Transcript Summary

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3. NewsRoom

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.53%)

6. Segments

RCS

Expected Growth: 10.98%

RCS's 10.98% growth driven by increasing demand for digital content, expansion of fiber-optic network, and strategic partnerships. Strong brand recognition, cost optimization, and effective monetization of sports broadcasting rights also contribute to growth. Additionally, investments in digital transformation and innovative services, such as 5G and IoT, position RCS for future growth.

Advertising

Expected Growth: 8.9%

Cairo Communication S.p.A.'s 8.9% growth in advertising is driven by increasing demand for digital marketing, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovative advertising solutions, such as programmatic advertising and data analytics, has contributed to its growth.

Intra and Unallocated

Expected Growth: 4.83%

Cairo Communication S.p.A.'s 4.83% growth in Intra and Unallocated segments is driven by increasing demand for digital services, expansion of 5G network infrastructure, and strategic partnerships. Additionally, cost optimization initiatives and efficient resource allocation have contributed to the growth, enabling the company to capitalize on emerging opportunities in the Italian telecommunications market.

Television Publishing La7 and Network Operator

Expected Growth: 4.3%

Television Publishing La7's 4.3% growth driven by increasing advertising revenue, driven by high audience share and premium content offerings. Network Operator's growth fueled by rising mobile data consumption, expanding 4G network coverage, and competitive pricing strategies.

Magazine Publishing Cairo Editore

Expected Growth: 2.47%

Magazine Publishing Cairo Editore's 2.47% growth is driven by increasing demand for lifestyle and entertainment content, strategic partnerships with advertisers, and expansion into digital platforms. Additionally, Cairo Communication S.p.A.'s strong brand portfolio and effective cost management contribute to the segment's growth.

7. Detailed Products

Digital Terrestrial Television (DTT)

Cairo Communication S.p.A. offers digital terrestrial television services, providing high-quality video and audio broadcasting to a wide audience.

Satellite Television

The company provides satellite television services, enabling broadcasting of TV channels and programs to a broader audience.

Radio Broadcasting

Cairo Communication S.p.A. offers radio broadcasting services, allowing radio stations to reach a wide audience.

Telecommunication Services

The company provides telecommunication services, including data transmission and internet connectivity.

Network Services

Cairo Communication S.p.A. offers network services, including network infrastructure and management.

Media and Broadcasting Services

The company provides media and broadcasting services, including content creation and distribution.

8. Cairo Communication S.p.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Cairo Communication S.p.A. is medium due to the presence of alternative media channels and platforms that can substitute traditional television broadcasting.

Bargaining Power Of Customers

The bargaining power of customers for Cairo Communication S.p.A. is low due to the company's strong brand presence and limited switching costs for customers.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Cairo Communication S.p.A. is medium due to the presence of multiple suppliers of broadcasting equipment and services.

Threat Of New Entrants

The threat of new entrants for Cairo Communication S.p.A. is high due to the relatively low barriers to entry in the broadcasting industry and the increasing popularity of online streaming services.

Intensity Of Rivalry

The intensity of rivalry for Cairo Communication S.p.A. is high due to the presence of multiple competitors in the broadcasting industry and the ongoing competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 13.99%
Debt Cost 3.95%
Equity Weight 86.01%
Equity Cost 10.20%
WACC 9.33%
Leverage 16.27%

11. Quality Control: Cairo Communication S.p.A. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Atresmedia

A-Score: 7.1/10

Value: 7.0

Growth: 3.9

Quality: 7.0

Yield: 10.0

Momentum: 7.0

Volatility: 7.7

1-Year Total Return ->

Stock-Card
TF1

A-Score: 6.9/10

Value: 8.2

Growth: 3.6

Quality: 6.4

Yield: 9.4

Momentum: 6.0

Volatility: 8.0

1-Year Total Return ->

Stock-Card
Cairo Communication

A-Score: 6.7/10

Value: 9.3

Growth: 3.9

Quality: 6.1

Yield: 5.0

Momentum: 7.5

Volatility: 8.3

1-Year Total Return ->

Stock-Card
4imprint

A-Score: 4.9/10

Value: 6.0

Growth: 8.9

Quality: 7.6

Yield: 3.8

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

Stock-Card
M&C Saatchi

A-Score: 3.6/10

Value: 5.5

Growth: 4.3

Quality: 4.8

Yield: 0.6

Momentum: 0.5

Volatility: 5.7

1-Year Total Return ->

Stock-Card
Ascential

A-Score: 3.3/10

Value: 5.0

Growth: 0.7

Quality: 3.7

Yield: 5.0

Momentum: 4.0

Volatility: 1.3

1-Year Total Return ->

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

2.72$

Current Price

2.72$

Potential

-0.00%

Expected Cash-Flows