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Consumer Earnings Wrap

CONSUMER CYCLICALS

VF (-12.6%) , € Curve (Baa3 Neg, BBB, Neg) +15-30bps, looks wide

- Strong misses across brands on earnings driving flat EBTIDA, no guidance for final qtr (only unch FCF at $600m), positive leverage trends, Potential for crossover rating on Moody's downgrade

Carlsberg (+4%) , € Curve (Baa2 Pos, NR, BBB+ S) unch, potential for some firming on Baa1 upgrade

- Beat on earnings, small miss on FY24 guidance & surprising lift in long-term guidance. Leverage remains well below target but Asia market weakness continues. Potential for Moody's upgrade if headline beat & long-term guidance lift enough.

Pandora (-0.4%) , Single €500m SLB 28's (Baa2, BBB; S) unch, looks fairly priced at G+135

- Strong beat with weaker margins, 1Q trading conditions &FY24 guidance positive

Metro AG (-3.7%), Single €600m 25's (NR, BBB-; S) -4bps, looks fairly priced at G+48

- Miss on Adj. EBTDA at €404m (c€434m) but Net Debt fell -€375m over qtr while EBITDA rose ~€170m- both positive for leverage. But reiterated outlook for FY24 including increase in net debt (lease portfolio extension), Adj. EBITDA change of -€100 to €50m (costs inflation) & slightly negative FCF (growth investments).

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