Daily Brief Industrials: NEL ASA, Recruit Holdings, Avianca Holdings Sa, Epwin Group PLC and more

• The SE600 index is one of the most widely followed benchmark indices in Europe. This index is rebalanced on a quarterly basis.
• In this insight, we take a look at the potential index changes that could take place between now and the end of the December 2023 rebalance.
• This includes a couple of intra-review index changes that could be triggered by the Dechra Pharmaceuticals (DPH LN) and Chr Hansen Holding A/S (CHR DC) takeover situations.

• Recruit’s share price is down more than 10% over the last 30-days despite there being a significant improvement in job openings in the US for the month of August.
• The web traffic on both Glassdoor and Indeed also have declined in September compared to August where there was a MoM improvement in August 2023.
• Though Recruit has guided for a decline in earnings, we think there is further downside to the company’s guidance.

Lucror Analytics’ ESG Scores are based on a 3-tiered scale and are adjusted for Controversies (if applicable).
We assess Avianca’s ESG as “Adequate”, in line with its “Adequate” Environmental and Governance scores. However, the company’s Social pillar is “Weak”. Controversies are “Immaterial” and Disclosure is “Adequate”.

Epwin’s H123 results confirmed a solid performance that was characterised by weaker volumes offset by cost control, higher prices and some contribution from M&A in tough markets. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY23 and FY24 as material cost pressures become less of a headwind. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. We have maintained our forecasts but highlight the low valuation and attractive 6.7% yield.