Ebro Puleva 29oct09

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					ab                                                                                                                                                  Global Equity Research
                                                                                                                                                     Spain
                                                                                                                                                     Food Products
 UBS Investment Research                                                                                                                             12-month rating                                                                                   Buy
 Ebro Puleva                                                                                                                                                                                                                         Unchanged
                                                                                                                                                     12m price target                                                 €15.80/US$23.26
                                                                                                                                                                                                               Prior: €13.60/US$20.03
 Strong results. More to come.                                                                                                                       Price                                                                     €13.09/US$19.27

     We reiterate our Buy rating, post 9M 09 results                                                                                                 RIC: EVA.MC BBG: EVA SM

 Mgmt has transformed Ebro from a pure domestic commodity processor into a                                                                                                                                                   29 October 2009
 multinational branded food company with leading market positions in niche
                                                                                                                                                     Trading data (local/US$)
 categories (branded rice/pasta). In our view, the process is not over.
                                                                                                                                                     52-wk range                                            €13.15-8.35/US$19.51-10.84
     Marginally better than expected 9M09 and upbeat guidance.                                                                                       Market cap.                                                              €2.01bn/US$2.97bn
 Revs of €1.7bn (-23% y/y) were 2% below UBSe & csus; EBITDA of €227m                                                                                Shares o/s                                                                                154m (ORD)
 (+5% y/y) was 6% above UBSe & csus. Net profit of €135m (+45% y/y) was bang                                                                         Free float                                                                                                   65%
 in line with UBSe & 2% above csus. Ebro expects 09E revs of €2.2bn; EBITDA of                                                                       Avg. daily volume ('000)                                                                                           293
 €306m, (7% above csus); and adj NP of €136m (2% above csus). Net debt is                                                                            Avg. daily value (€m)                                                                                              3.6
 expected to reach €603m, 2.0x ND/EBITDA. Management is positive on 2010 as
 they expect: 1) raw material prices to keep decreasing; and 2) further synergies                                                                    Balance sheet data 12/09E
 from their European & US operations following recent acquisitions.                                                                                  Shareholders' equity                                                                                 €1.32bn

     Next catalyst: 2010-12 strategic presentation (January?)                                                                                        P/BV (UBS)                                                                                                    1.5x
                                                                                                                                                     Net Cash (debt)                                                                                   (€0.60bn)
 Following two years marked by de-gearing & extracting synergies, we believe
 Ebro could return to the acquisition path. We underline management’s strong track
                                                                                                                                                     Forecast returns
 record in acquisitions. According to several Spanish press reports, Ebro could be
                                                                                                                                                     Forecast price appreciation                                                                           +20.7%
 interested in acquiring SOS’ rice business.
                                                                                                                                                     Forecast dividend yield                                                                                    3.9%
    Valuation: DCF-based SOTP of €15.8ps (+16%)                                                                                                      Forecast stock return                                                                                 +24.6%
 We have adjusted our earnings following new upbeat guidance. On the back of our                                                                     Market return assumption                                                                                   6.4%
 earnings upgrade and factoring a lower WACC (7.5% vs 8.2% prev on lower rates                                                                       Forecast excess return                                                                                +18.2%
 & risk premium) our PT moves to €15.8ps. Ebro trades on 7.6x 2010E
 EV/EBITDA, a 20% discount to its peers in Europe.                                                                                                   EPS (UBS, €)
                                                                                                                                                                                                            12/09E                                              12/08
                                                                                                                                                                                       From                     To                    Cons.                    Actual
                                                                                                                                                     H1                                  3.54                 0.46                        -                       0.51
                                                                                                                                                     H2E                               (2.74)                 0.42                        -                     (0.04)
                                                                                                                                                     12/09E                              0.79                 0.88                     0.90
 Highlights (€m)                                          12/07               12/08              12/09E               12/10E               12/11E    12/10E                              0.95                 0.97                     0.93
 Revenues                                                 2,685               2,368               2,206                2,268                2,333
 EBIT (UBS)                                                 208                 202                 239                  248                  262    Performance (€)
 Net Income (UBS)                                            95                  73                 136                  149                  162    20.0
                                                                                                                                                               Stock Price (€)                                                       Rel. FT/S&P AWI Europe
                                                                                                                                                                                                                                                                        120

 EPS (UBS, €)                                              0.62                0.47                0.88                 0.97                 1.06                                                                                                                       100
                                                                                                                                                     15.0
 Net DPS (UBS, €)                                          0.36                0.36                0.72                 0.43                 0.45                                                                                                                       80

                                                                                                                                                     10.0                                                                                                               60
 Profitability & Valuation                       5-yr hist av.                12/08              12/09E               12/10E               12/11E                                                                                                                       40
                                                                                                                                                      5.0
 EBIT margin %                                             8.8                  8.5                10.8                 10.9                 11.2                                                                                                                       20

 ROIC (EBIT) %                                           12.0                   9.7                12.0                 13.7                 14.4     0.0                                                                                                               0
                                                                                                                                                            10/06

                                                                                                                                                                    01/07

                                                                                                                                                                            04/07

                                                                                                                                                                                    07/07

                                                                                                                                                                                            10/07

                                                                                                                                                                                                    01/08

                                                                                                                                                                                                             04/08

                                                                                                                                                                                                                     07/08

                                                                                                                                                                                                                             10/08

                                                                                                                                                                                                                                       01/09

                                                                                                                                                                                                                                               04/09

                                                                                                                                                                                                                                                       07/09

                                                                                                                                                                                                                                                                10/09




 EV/EBITDA (core) x                                        9.6                  9.7                  8.6                  7.8                  7.3
                                                                                                                                                                     Price Target (€) (LHS)                              Stock Price (€) (LHS)
 PE (UBS) x                                              19.1                  25.0                14.8                 13.5                 12.4                    Rel. FT/S&P AWI Europe (RHS)

 Net dividend yield %                                      2.8                  3.1                  5.5                  3.3                  3.5   Source: UBS
 Source: Company accounts, Thomson Financial, UBS estimates. (UBS) valuations are stated before goodwill, exceptionals and other special items.      www.ubs.com/investmentresearch
 Valuations: based on an average share price that year, (E): based on a share price of €13.09 on 29 Oct 2009 18:06 EDT


 Ignacio Carvajal Cebrian
 Analyst
 ignacio.carvajal@ubs.com
 +34-91-436 9025




 This report has been prepared by UBS Limited
 ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 8.
 UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may
 have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making
 their investment decision.
Ebro Puleva 29 October 2009


Table 1: Summary SOTP-based valuation

                                                                                                   Implicit

€ million                                EV     % of total           Methodology   10E EBITDA   EV/EBITDA (x)

Pasta                                   1,272     44%                   DCF           145           8.8x

Rice                                    1,079     37%                   DCF           120           9.0x

Dairy                                   568       19%                   DCF            66           8.6x

Core EV                                 2,919     100%                                331           8.8x

Less Net Debt (End 2009E)               (603)

Minorities                              (27)

Puleva Biotech                           38

Real Estate                             100

Equity Value (end 2010E)                2,426

Nº of shares (million)                  153.9

Equity value p.s. (€) - end 2010E       15.8

Source: UBS estimates




Table 2: WACC calculation

Group g                                                       2.0%

Debt / EV                                                    20.0%

10Y Bond Yield                                                4.0%

Bank premium                                                 1.00%

Tax rate                                                     (27.0%)

Cost of debt (After Tax)                                      3.7%

Equity/EV                                                    80.0%

Beta                                                           1.0

Equity Risk Premium                                           4.5%

Cost of Equity                                                8.5%

WACC                                                          7.5%

Source: UBS estimates




                                                                                                              UBS 2
Ebro Puleva 29 October 2009


Table 3: Ebro Puleva’s European peers

                                                            Market     EV/EBITDA (core)                 PE                   FCF Yield
                                                  Price
Company                       Rating    Price     Target    cap $m    09E      10E        11E    09E     10E   11E    09E        10E     11E



Aker ASA                      Buy       159.50    190.00    2,083.2    na       na         na     na      na    na     na         na      na

Aryzta AG                     Buy        39.40     49.00    3,175.7    7.6     7.2         6.5   11.4   11.3   10.4    6.7        8.6     8.9

Associated British Foods      na          8.58        na    11,256     8.3     7.6         7.3   14.9   13.3   12.3    3.6        5.4     7.5

Austevoll Seafood             Buy        32.00     44.00    1,064.5    6.6     6.1         5.6    9.1    8.3    7.7   11.2       12.4    13.6

AVI Group                     Sell       20.30     19.90    846.68     6.6     6.1         5.4   11.0    9.7    8.5    7.7        8.7     9.9

Barry Callebaut               Neutral   594.00    600.00    3,049.1    8.7     8.1         7.6   13.9   12.4   11.3    5.3        7.3     8.0

Booker Group                  Neutral     0.43      0.43    1,054.2    8.8     8.1         7.6   14.6   13.4   12.6    6.9        7.4     7.7

Cermaq                        Neutral    53.00     48.00    884.77     8.3     5.9         5.1   15.1    9.1    8.1    1.7        7.9    11.1

CSM                           Neutral    17.03     16.50    1,932.2    8.7     8.2         7.5   13.7   12.6   11.2    7.9        7.1     8.0

Dairy Crest                   Neutral     4.02      4.05    881.82     6.5     6.1         5.8    9.1    8.9    8.3   12.9       13.9    14.5

Danisco                       Neutral   319.50    325.00    3,061.0   10.0     8.9         7.9   20.6   17.1   14.5    4.4        5.0     6.2

Danone                        Neutral    41.60     40.50    38,283    11.5    10.1         9.4   16.7   15.8   14.7    5.3        6.1     6.6

Ebro Puleva                   Buy        12.92     13.60    2,983.4    8.5     7.6         7.1   14.4   13.1   12.1   -1.0        7.3     7.9

Emmi AG                       Neutral   122.50    120.00    636.11     6.1     6.0         5.8   11.7   10.9   10.5    8.9        9.6    10.0

Grupo SOS                     Sell        2.22      1.20    511.61    15.2    13.6        12.7   33.6   22.5   12.8   12.6        8.0    11.2

Illovo Sugar Ltd              Buy        37.00     39.10    1,662.2    9.0     7.3         6.6   17.0   14.1   12.6    5.1        4.3     8.3

Leroy Seafood                 Buy       103.00    145.00    995.99     6.4     5.8         5.2    7.8    7.4    7.1    8.8       10.1    10.8

                                        26,805.   22,500.
Lindt & Sprungli              Sell                          5,968.8   12.4    11.4        10.6   23.2   21.6   20.0    3.6        4.5     5.0
                                            00        00

Marine Harvest                Buy         4.31      5.50    2,780.7    7.5     6.2         5.5   10.8    9.0    8.6   10.8        9.3    10.3

Nestle                        Buy        46.52     50.00 168,587      10.1     9.7         9.5   16.3   15.5   14.3    5.3        5.6     6.2

Northern Foods                Buy         0.65      0.72    501.27     6.1     5.9         5.6   10.9   10.4    9.3   11.7       11.4    11.0

Nutreco                       Neutral    34.22     32.50    1,743.8    7.3     6.5         5.7   13.2   11.4   10.2    5.3        6.5     7.7

Orkla                         Neutral    55.10     55.00    10,636    16.4     9.8         8.6   19.0   11.5    9.0   -1.8        4.8     5.5

Premier Foods                 Neutral     0.39      0.43    1,536.9    6.6     6.1         5.5    6.9    6.4    5.7   16.0       16.3    16.4

Salmar                        Buy        45.00     65.00    836.50     7.6     6.9         6.1    8.8    8.2    7.6    7.3        8.7    10.1

Tiger Brands                  Neutral   156.00    166.95    3,434.9    7.6     7.2         6.4   11.9   10.9    9.8    7.3        6.2     7.1

Tongaat Hulett Limited        Buy        97.44    108.00    1,408.5   10.4     9.9         8.5   12.3   10.8    9.3   -5.9        5.2     5.5

Unilever NV                   Neutral    20.75     19.80    53,435    11.0    10.6        10.0   15.1   14.2   13.4    6.7        7.1     7.5

Unilever Plc                  Neutral    18.41     17.80    39,631    11.1    10.4         9.8   15.0   13.6   12.8    6.7        7.2     7.7

Wessanen                      Neutral     4.06      3.75    411.87     8.4     6.8         5.9   13.4    8.1    6.7    5.4        8.4    11.0

Wimm-Bill-Dann Foods          Neutral    77.27     71.00    3,399.9   10.9     8.8         7.2   24.0   18.0   13.5    3.9        4.9     5.9

European Food Producers                                           -   10.4     9.7         9.2   15.8   14.5   13.4    5.6        6.3     6.9

Source: UBS estimates




                                                                                                                                         UBS 3
Ebro Puleva 29 October 2009


Table 4: Ebro Puleva – earnings estimate revision, 2008-2011E

€ million                          2008            2009E             2010E       2011E

Revenues

New                                2,368           2,206             2,268       2,333

Previous                           2,368           2,323             2,388       2,456

% change                             -             (5.0%)            (5.0%)      (5.0%)

EBITDA

New                                271.8           306.2             317.1       333.7

Previous                           271.8           287.3             315.2       324.4

% change                             -             6.6%              0.6%         2.9%

EBIT

New                                202              239               248            262

Previous                           202              216               242            249

% change                             -             10.4%             2.4%         5.4%

Adjusted EPS

New                                0.47             0.88              0.97           1.06

Previous                           0.47             0.79              0.95           1.04

% change                             -             11.0%             1.3%         1.5%

Source: UBS estimates




Table 5: UBS versus consensus estimates, 2009-11E

€ million                                2009E              2010E             2011E

Sales

UBS                                       2,206             2,268             2,333

Consensus                                 2,383             2,480             2,565

Difference %                              (7.5%)            (8.5%)            (9.1%)

EBITDA

UBS                                        306               317               334

Consensus                                  290               310               325

Difference %                              5.5%              2.4%              2.7%

Adj EPS

UBS                                        0.88             0.97              1.06

Consensus                                  0.86             0.93              0.99

Difference %                              2.0%              3.9%              6.2%

Source: UBS estimates, Bloomberg




                                                                                            UBS 4
Ebro Puleva 29 October 2009


Table 6: Ebro Puleva – 9M 2009 results summary

€ million                     9M 09   9M 08   y/y chg (%)   9M 09E     % diff Consensus

 Divisional sales             1,678   2,201   (23.8%)       1,706     (1.7%)

 Other sales                   (13)   (36)    (65.4%)        (16)    (20.3%)

Net revenue                   1,665   2,165   (23.1%)       1,690     (1.5%)      1,688

EBITDA                         227    216      5.0%          215        5.8%      216

Depreciation                   (61)    na        -           (52)      16.9%

EBIT                           166    149     11.7%          163        2.3%

Equity consolidated
                                0      0         -            4
income

Financial expense              (15)    0         -           (30)

Ordinary profit                151    178     (14.8%)        139        9.2%      148

Extraordinary results          43      0         -            26              -

Pre-tax profit                 168    136     23.7%          165        2.1%

Corporate tax                  (33)    0      #DIV/0!        (29)      14.1%

Net income                     135     93     45.3%          135      (0.3%)      132

Sales breakdown

Sugar                           -     435        -            -        -            -

Rice                           655    670     (2.3%)         679     (3.5%)       669

Dairy                          330    384     (13.8%)        327     1.0%         331

Pasta                          692    713     (2.9%)         700     (1.0%)       704

Total                         1,678   2,201   (23.8%)       1,706    (1.6%)       1,704

EBITDA breakdown

Sugar                           -      35        -            -        -

Rice                           86      90     (4.5%)          89     (4.2%)        87

Dairy                          47      33     41.8%           44     7.7%          45

Pasta                          95      67     41.1%           91     4.0%          94

Intragroup                     (0)     (9)    (95.8%)        (10)      -          (10)

Total                          227    216      5.0%          215     5.8%         216

Source: UBS estimates, company data




                                                                                          UBS 5
Ebro Puleva

  Income statement (€m)                                                                                12/06                12/07               12/08              12/09E         % ch              12/10E           % ch    12/11E     % ch
  Revenues                                                                                              2,449                2,685                2,368               2,206        -6.9                2,268           2.8     2,333       2.8
  Operating expenses (ex depn)                                                                        (2,143)              (2,378)              (2,096)             (1,899)        -9.4              (1,951)           2.7   (1,999)       2.5
  EBITDA (UBS)                                                                                            306                  307                  272                 306        12.7                  317           3.6       334       5.2
  Depreciation                                                                                            (95)                 (99)                 (70)                (68)       -3.4                  (70)          2.8       (72)      2.8
  Operating income (EBIT, UBS)                                                                            211                  208                  202                 239        18.2                  248           3.8       262       5.9
  Other income & associates                                                                                (2)                  (4)                 (14)                   7          -                     0            -          0        -
  Net interest                                                                                            (56)                 (74)                 (84)                (54)      -35.8                  (42)        -22.2       (38)     -9.5
  Abnormal items (pre-tax)                                                                                106                   (5)                   58                  58        0.1                     0            -          0        -
  Profit before tax                                                                                       260                  124                  161                 250        54.6                  206         -17.6       224       9.0
  Tax                                                                                                     (72)                 (32)                 (30)                (72)      142.8                  (56)        -22.6       (61)      9.0
  Profit after tax                                                                                        188                    92                 132                 178        34.9                  150         -15.6       164       9.0
  Abnormal items (post-tax)                                                                                  0                    0                    0                   0          -                     0            -          0        -
  Minorities / pref dividends                                                                              (8)                  (2)                  (1)                 (1)        0.0                   (1)          0.0        (1)      0.0
  Net income (local GAAP)                                                                                 180                    91                 131                 177        35.2                  149         -15.7       162       9.1
  Net Income (UBS)                                                                                          90                   95                   73                136        86.6                  149           9.7       162       9.1

  Tax rate (%)                                                                                              28                  26                   18                   29        57.0                  27          -6.1        27       0.0
  Pre-abnormal tax rate (%)                                                                                 36                  24                   25                   30        18.1                  27          -8.9        27       0.0

  Per share (€)                                                                                        12/06                12/07               12/08              12/09E         % ch              12/10E           % ch    12/11E     % ch
  EPS (local GAAP)                                                                                       1.17                 0.59                 0.85                1.15        35.2                 0.97         -15.7      1.06       9.1
  EPS (UBS)                                                                                              0.58                 0.62                 0.47                0.88        86.6                 0.97           9.7      1.06       9.1
  Net DPS                                                                                                0.36                 0.36                 0.36                0.72       100.0                 0.43         -40.0      0.45       5.0
  Cash EPS                                                                                               1.20                 1.26                 0.93                1.32        42.4                 1.42           7.5      1.52       7.1
  BVPS                                                                                                   7.72                 7.79                 7.82                8.61        10.1                 8.85           2.9      9.48       7.0

  Balance sheet (€m)                                                                                   12/09                12/07               12/08              12/09E         % ch              12/10E           % ch    12/11E     % ch
  Net tangible fixed assets                                                                               951                  815               1,227                  801       -34.7                  800          -0.1      800       -0.1
  Net intangible fixed assets                                                                           1,140                1,096               1,137                1,137         0.0                1,137           0.0    1,137        0.0
  Net working capital (incl. other assets)                                                                527                  412                 (87)                 (14)      -83.8                    0             -       17     3877.6
  Other liabilities                                                                                     (342)                (329)               (119)                (119)         0.0                (119)           0.0    (119)        0.0
  Operating invested capital                                                                            2,277                1,993               2,158                1,804       -16.4                1,818           0.8    1,834        0.9
  Investments                                                                                              82                  224                   51                 151       197.8                  151           0.0      151        0.0
  Total capital employed                                                                                2,359                2,216               2,208                1,955       -11.5                1,969           0.7    1,985        0.8
  Shareholders' equity                                                                                  1,188                1,198               1,203                1,324        10.1                1,362           2.9    1,458        7.0
  Minority interests                                                                                       24                   24                   26                   27        4.8                   28           4.6       29        4.4
  Total equity                                                                                          1,212                1,222               1,229                1,351        10.0                1,390           2.9    1,488        7.0
  Net debt / (cash)                                                                                     1,146                  994                 979                  603       -38.4                  578          -4.2      497      -14.0
  Debt deemed provisions                                                                                    0                    0                    0                    0          -                    0             -        0          -
  Total capital employed                                                                                2,359                2,216               2,208                1,955       -11.5                1,969           0.7    1,985        0.8

  Cash flow (€m)                                                                                       12/06                12/07               12/08              12/09E         % ch              12/10E           % ch    12/11E     % ch
  Operating income (EBIT, UBS)                                                                            211                  208                  202                 239        18.2                  248           3.8      262        5.9
  Depreciation                                                                                             95                   99                   70                  68        -3.4                   70           2.8        72       2.8
  Net change in working capital                                                                            (6)                  25                   40                (73)           -                 (15)         -80.0      (17)      14.9
  Other (operating)                                                                                          8                   2                    1                   1         0.0                     1          0.0         1       0.0
  Operating cash flow                                                                                     308                  334                  313                 235       -25.1                  304          29.4      318        4.7
  Net interest received / (paid)                                                                         (56)                 (74)                 (84)                (54)       -35.8                 (42)         -22.2      (38)      -9.5
  Dividends paid                                                                                         (52)                 (55)                 (55)                (55)         0.0                (111)         100.0      (66)     -40.0
  Tax paid                                                                                               (72)                 (32)                 (30)                (72)       142.8                 (56)         -22.6      (61)       9.0
  Capital expenditure                                                                                   (306)                (222)                (149)               (186)        24.8                 (69)         -63.0      (71)       2.7
  Net (acquisitions) / disposals                                                                        (346)                   12                    5                 445      8800.0                     0            -         0         -
  Other                                                                                                    97                 (11)                  209                  64       -69.6                   (1)            -       (1)       0.0
  Share issues                                                                                               0                   0                    0                   0           -                     0            -         0         -
  Cash flow (inc)/dec in net debt                                                                       (427)                 (49)                  209                 376        79.6                   25         -93.3        81     220.7
  FX / non cash items                                                                                     551                  201                (195)                   0           -                     0            -         0         -
  Balance sheet (inc)/dec in net debt                                                                     124                  152                   15                 376      2440.3                   25         -93.3        81     220.7
  Core EBITDA                                                                                             306                  307                  272                 306        12.7                  317           3.6      334        5.2

  Maintenance capital expenditure                                                                       (298)                 (87)                (149)                 (86)       -42.1                 (69)        -20.2      (71)       2.7
  Maintenance net working capital                                                                        (12)                 (11)                 (10)                 (12)        21.4                 (13)          3.5      (13)       3.9
  Operating free cash flow, pre-tax (OpFCF)                                                                (4)                 208                 112                  207         84.8                 235          13.4      249        6.0
Source: Company accounts, UBS estimates. (UBS) valuations are stated before goodwill, exceptionals and other special items. Note: For some companies, the data represents an extract of the full company accounts.




                                                                                                                                                                                                                              UBS 6
Global Equity Research
Spain

Food Products                                                                                                                                                                                                          Ebro Puleva
12-month rating                                                                                    Buy
12m price target                                                                                 €15.80        Valuation (x)                                               5Yr Avg            12/07          12/08         12/09E         12/10E         12/11E
                                                                                                               P/E (local GAAP)                                                  15.8            27.5           13.9           11.4           13.5            12.4
                                                                                                               P/E (UBS)                                                         19.1            26.1           25.0           14.8           13.5            12.4
                                                                                                               P/CEPS                                                            10.2            12.8           12.7            9.9            9.2             8.6
                                                                                                               Net dividend yield (%)                                             2.8             2.2            3.1            5.5            3.3             3.5
Company profile                                                                                                P/BV                                                               2.3             2.1            1.5            1.5            1.5             1.4
Ebro Puleva is Spain's largest food manufacturer. The company, as it                                           EV/revenue (core)                                                  1.2             1.3            1.1            1.2            1.1             1.0
is known today, is the result of the merger between Azucarera Ebro                                             EV/EBITDA (core)                                                   9.6            11.1            9.7            8.6            7.8             7.3
Agrícolas and Puleva in 2000. However, the history of the company                                              EV/EBIT (core)                                                    13.7            16.4           13.1           11.1           10.0             9.3
involves a string of mergers among Spanish food producers since the                                            EV/OpFCF (core)                                                   19.9            16.3           23.5           12.8           10.5             9.7
early years of the 20th century. Ebro Puleva ranks first in the Spanish                                        EV/op. invested capital                                            1.6             1.6            1.3            1.3            1.4             1.3
sugar, rice and dairy products industries with leading market shares.
                                                                                                               Enterprise value (€m)                                                          12/07          12/08         12/09E         12/10E         12/11E
                                                                                                               Average market cap                                                              2,492          1,816           2,014          2,014          2,014
                                                                                                               + minority interests                                                               24             26              27             28             29
                                                                                                               + average net debt (cash)                                                       1,070            987             791            591            538
                                                                                                               + pension obligations and other                                                     0              0               0              0              0
                                                                                                               - non-core asset value                                                          (186)          (186)           (186)          (151)          (151)
                                                                                                               Core enterprise value                                                           3,400          2,642           2,646          2,482          2,430

                                                                                                               Growth (%)                                                  5Yr Avg            12/07          12/08         12/09E         12/10E         12/11E
Value (EV/OpFCF & P/E)                                                                                         Revenue                                                            7.6             9.6          -11.8           -6.9             2.8            2.8
   25.0x                                                                                            30.0x
                                                                                                               EBITDA (UBS)                                                       4.9             0.2          -11.4           12.7             3.6            5.2
                                                                                                    25.0x
                                                                                                               EBIT (UBS)                                                         3.9            -1.6           -2.9           18.2             3.8            5.9
   20.0x
                                                                                                    20.0x
                                                                                                               EPS (UBS)                                                         -9.6             6.1          -23.9           86.6             9.7            9.1
   15.0x
                                                                                                    15.0x
                                                                                                               Cash EPS                                                          -2.8             5.3          -26.6           42.4             7.5            7.1
   10.0x
                                                                                                    10.0x
                                                                                                               Net DPS                                                            4.7             0.0            0.0          100.0           -40.0            5.0
    5.0x                                                                                            5.0x
                                                                                                               BVPS                                                              26.9             0.9            0.4           10.1             2.9            7.0
    0.0x                                                                                            0.0x
           12/07              12/08              12/09E                12/10E                    12/11E        Margins (%)                                                 5Yr Avg            12/07          12/08         12/09E         12/10E         12/11E
                                  EV/OpFCF (LHS)        P/E (RHS)
                                                                                                               EBITDA / revenue                                                  12.5            11.4           11.5           13.9           14.0            14.3
                                                                                                               EBIT / revenue                                                     8.8             7.7            8.5           10.8           10.9            11.2
                                                                                                               Net profit (UBS) / revenue                                         5.0             3.6            3.1            6.1            6.6             7.0
Profitability
  12.00%                                                                                            15.00%     Return on capital (%)                                         5Yr Avg           12/07          12/08         12/09E         12/10E          12/11E
  11.00%                                                                                            14.00%     EBIT ROIC (UBS)                                                  12.0             9.7            9.7           12.0           13.7            14.4
                                                                                                    13.00%
  10.00%                                                                                                       ROIC post tax                                                       -             7.4            7.3             8.5          10.0            10.5
                                                                                                    12.00%
   9.00%                                                                                                       Net ROE                                                          14.8             8.0            6.1           10.7           11.1            11.5
                                                                                                    11.00%
   8.00%
                                                                                                    10.00%
   7.00%
                                                                                                               Coverage ratios (x)                                           5Yr Avg           12/07          12/08         12/09E         12/10E          12/11E
                                                                                                    9.00%
   6.00%                                                                                            8.00%
                                                                                                               EBIT / net interest                                               5.4             2.7            2.2             4.5            5.9             6.9
                   12/07        12/08          12/09(E)         12/10(E)              12/11(E)
                                                                                                               Dividend cover (UBS EPS)                                          2.1             1.7            1.3             1.2            2.2             2.3
                                EBIT margin (LHS)         ROIC (RHS)
                                                                                                               Div. payout ratio (%, UBS EPS)                                   49.2            58.0           76.2           81.7           44.7            43.0
                                                                                                               Net debt / EBITDA                                                 3.4             3.2            3.6             2.0            1.8             1.5
ROE v Price to book value
                                                                                                               Efficiency ratios (x)                                         5Yr Avg           12/07          12/08         12/09E         12/10E          12/11E
  12.00%                                                                                            2.2x
                                                                                                               Revenue / op. invested capital                                    1.4             1.3            1.1             1.1            1.3             1.3
  11.00%                                                                                            2.0x       Revenue / fixed assets                                            1.5             1.3            1.1             1.0            1.2             1.2
  10.00%
                                                                                                    1.8x       Revenue / net working capital                                     5.0             5.7           14.6            NM             NM              NM
   9.00%
                                                                                                    1.6x
   8.00%
                                                                                                    1.4x       Investment ratios (x)                                         5Yr Avg           12/07          12/08         12/09E         12/10E          12/11E
   7.00%
   6.00%                                                                                            1.2x       OpFCF / EBIT                                                      0.7             1.0            0.6             0.9            1.0             1.0
   5.00%                                                                                            1.0x       Capex / revenue (%)                                               6.2             8.3            6.3             8.5            3.0             3.0
                   12/07        12/08          12/09(E)         12/10(E)              12/11(E)
                           ROE (LHS)                      Price to book value (RHS)
                                                                                                               Capex / depreciation                                              1.7             2.2            2.1             2.8            1.0             1.0

                                                                                                               Capital structure (%)                                         5Yr Avg           12/07          12/08         12/09E         12/10E          12/11E
Growth (UBS EPS)                                                                                               Net debt / total equity                                           NM             83.0           81.4           45.6           42.4            34.1
                                                                                                               Net debt / (net debt + equity)                                   52.3            45.3           44.9           31.3           29.8            25.4
    2700                                                                                            100%
                                                                                                               Net debt (core) / EV                                             33.9            31.5           37.3           29.9           23.8            22.1
    2600                                                                                            80%
                                                                                                    60%
                                                                                                             Source: Company accounts, UBS estimates. (UBS) valuations are stated before goodwill, exceptionals and other special items.
    2500
                                                                                                    40%
                                                                                                             Valuations: based on an average share price that year, (E): based on a share price of €13.09 on 29 Oct 2009 18:06 EDT Market cap(E) may include forecast
    2400                                                                                                     share issues/buybacks.
                                                                                                    20%
    2300
                                                                                                    0%
    2200                                                                                            -20%
    2100                                                                                            -40%
                                                                                                             Ignacio Carvajal Cebrian
                   12/07        12/08          12/09(E)          12/10(E)             12/11(E)
                            Revenue (LHS)                 UBS EPS Growth (RHS)
                                                                                                             Analyst
                                                                                                             ignacio.carvajal@ubs.com
                                                                                                             +34-91-436 9025




                                                                                                                                                                                                                                                UBS 7
Ebro Puleva 29 October 2009




    Ebro Puleva

Ebro Puleva is Spain's largest food manufacturer. The company, as it is known
today, is the result of the merger between Azucarera Ebro Agrícolas and Puleva
in 2000. However, the history of the company involves a string of mergers
among Spanish food producers since the early years of the 20th century. Ebro
Puleva ranks first in the Spanish sugar, rice and dairy products industries with
leading market shares.




    Statement of Risk

In addition to the general risks associated with a food manufacturing company
(increasing raw material prices due to bad harvests, decreasing demand due to
new diet trends, amongst others), the main risks for Ebro Puleva relate to
execution/integration risks of recent acquisitions and possible future
acquisitions. Ebro Puleva is also exposed to geographical expansion risks as
50% of FY 06 revenues came from outside Spain. The expansion of its biofuel
business in Spain is also exposed to risks as it is highly dependent on raw
material prices that are commodities as well as on the evolution of traditional
crude prices. The company has potential overhaul risk as the Spanish
government holds 8.4% through SEPI and the other main shareholder is KIO.



    Analyst Certification

Each research analyst primarily responsible for the content of this research
report, in whole or in part, certifies that with respect to each security or issuer
that the analyst covered in this report: (1) all of the views expressed accurately
reflect his or her personal views about those securities or issuers; and (2) no part
of his or her compensation was, is, or will be, directly or indirectly, related to
the specific recommendations or views expressed by that research analyst in the
research report.




                                                                                       UBS 8
Ebro Puleva 29 October 2009


Required Disclosures

This report has been prepared by UBS Limited, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates
are referred to herein as UBS.

For information on the ways in which UBS manages conflicts and maintains independence of its research product;
historical performance information; and certain additional disclosures concerning UBS research recommendations,
please visit www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance is
not a reliable indicator of future results. Additional information will be made available upon request.

UBS Investment Research: Global Equity Rating Allocations
                                                                                              1                                2
 UBS 12-Month Rating            Rating Category                                     Coverage                      IB Services
 Buy                            Buy                                                       44%                             39%
 Neutral                        Hold/Neutral                                              40%                             35%
 Sell                           Sell                                                      15%                             27%
                                                                                              3                               4
 UBS Short-Term Rating          Rating Category                                     Coverage                      IB Services
 Buy                            Buy                                               less than 1%                            33%
 Sell                           Sell                                              less than 1%                             0%
1:Percentage of companies under coverage globally within the 12-month rating category.
2:Percentage of companies within the 12-month rating category for which investment banking (IB) services were provided within
the past 12 months.
3:Percentage of companies under coverage globally within the Short-Term rating category.
4:Percentage of companies within the Short-Term rating category for which investment banking (IB) services were provided
within the past 12 months.

Source: UBS. Rating allocations are as of 30 September 2009.
UBS Investment Research: Global Equity Rating Definitions
 UBS 12-Month Rating            Definition
 Buy                            FSR is > 6% above the MRA.
 Neutral                        FSR is between -6% and 6% of the MRA.
 Sell                           FSR is > 6% below the MRA.
 UBS Short-Term Rating          Definition
                                Buy: Stock price expected to rise within three months from the time the rating was assigned
 Buy
                                because of a specific catalyst or event.
                                Sell: Stock price expected to fall within three months from the time the rating was assigned
 Sell
                                because of a specific catalyst or event.




                                                                                                                          UBS 9
Ebro Puleva 29 October 2009


KEY DEFINITIONS
 Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend yield over the next 12
months.
 Market Return Assumption (MRA) is defined as the one-year local market interest rate plus 5% (a proxy for, and not a
forecast of, the equity risk premium).
 Under Review (UR) Stocks may be flagged as UR by the analyst, indicating that the stock's price target and/or rating are
subject to possible change in the near term, usually in response to an event that may affect the investment case or valuation.
 Short-Term Ratings reflect the expected near-term (up to three months) performance of the stock and do not reflect any
change in the fundamental view or investment case.
Equity Price Targets have an investment horizon of 12 months.

EXCEPTIONS AND SPECIAL CASES
UK and European Investment Fund ratings and definitions are: Buy: Positive on factors such as structure, management,
performance record, discount; Neutral: Neutral on factors such as structure, management, performance record, discount; Sell:
Negative on factors such as structure, management, performance record, discount.
Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the Investment Review
Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the respective company's
debt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands as they relate to the rating.
When such exceptions apply, they will be identified in the Company Disclosures table in the relevant research piece.



Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are not
registered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained in
the NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by a
research analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report, if any,
follows.
UBS Securities España SV SA: Ignacio Carvajal Cebrian.


Company Disclosures
 Company Name                                 Reuters      12-mo rating Short-term rating                 Price       Price date
 Ebro Puleva                                  EVA.MC               Buy                N/A                €12.72      28 Oct 2009
Source: UBS. All prices as of local market close.
Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock pricing
date



Unless otherwise indicated, please refer to the Valuation and Risk sections within the body of this report.




                                                                                                                             UBS 10
Ebro Puleva 29 October 2009


Ebro Puleva (€)
                                                                                                            Price Target (€)                             Stock Price (€)
              20.0

              15.0

              10.0

               5.0

               0.0
                                 01-Jan-05




                                                                                 01-Jan-06




                                                                                                                                 01-Jan-07




                                                                                                                                                                                     01-Jan-08




                                                                                                                                                                                                                                     01-Jan-09
                     01-Oct-04




                                             01-Apr-05

                                                         01-Jul-05

                                                                     01-Oct-05




                                                                                             01-Apr-06

                                                                                                         01-Jul-06

                                                                                                                     01-Oct-06




                                                                                                                                             01-Apr-07

                                                                                                                                                             01-Jul-07

                                                                                                                                                                         01-Oct-07




                                                                                                                                                                                                 01-Apr-08

                                                                                                                                                                                                             01-Jul-08

                                                                                                                                                                                                                         01-Oct-08




                                                                                                                                                                                                                                                 01-Apr-09

                                                                                                                                                                                                                                                             01-Jul-09

                                                                                                                                                                                                                                                                         01-Oct-09
         Neutral 2
        Reduce 2
              Buy
          Neutral
        No Rating


Source: UBS; as of 28 Oct 2009


Note: On August 4, 2007 UBS revised its rating system. (See 'UBS Investment Research: Global Equity Rating Definitions' table
for details). From September 9, 2006 through August 3, 2007 the UBS ratings and their definitions were: Buy 1 = FSR is > 6%
above the MRA, higher degree of predictability; Buy 2 = FSR is > 6% above the MRA, lower degree of predictability; Neutral 1 =
FSR is between -6% and 6% of the MRA, higher degree of predictability; Neutral 2 = FSR is between -6% and 6% of the MRA,
lower degree of predictability; Reduce 1 = FSR is > 6% below the MRA, higher degree of predictability; Reduce 2 = FSR is > 6%
below the MRA, lower degree of predictability. The predictability level indicates an analyst's conviction in the FSR. A
predictability level of '1' means that the analyst's estimate of FSR is in the middle of a narrower, or smaller, range of possibilities.
A predictability level of '2' means that the analyst's estimate of FSR is in the middle of a broader, or larger, range of possibilities.
From October 13, 2003 through September 8, 2006 the percentage band criteria used in the rating system was 10%.




                                                                                                                                                                                                                                                                                     UBS 11
Ebro Puleva 29 October 2009




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                                                                                                                                                                                                UBS 12

				
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