Conference Magazine. Publishing Partner

Transcription

1 Conference Magazine Publishing Partner Capital Markets Industries & Sectors Financing Legal Rules & Regulations Top 25 Capital Seeking Companies Sponsors & Partners Forum Program Exhibitors Index

2 Co-Initiator Main Sponsors Sponsors Partner STEP AWARD Spirit to expand Media Partner Supported by

3 Editorial Dear Readers, Rarely has equity capital been of such vital importance for bolstering the growth opportunities of companies. Companies face new challenges in today s post-crisis economy and new capital requirement regimes such as Basel III will increase the cost of loans, while the flow of liquidity through credit will be scaled down. Indeed, some banks have already become more reluctant to provide the economy with capital. For these reasons alone, equity capital must and will increase its weight in the capital mix, especially for small and medium-sized companies, which tend to be insufficiently capitalized to meet their growth needs. The current situation applies not only to single companies, but to economies as a whole: the market turbulence over the past two-and-a-half years has called into question whether the financial sector does in fact fulfill its role serving the real economy. One essential aspect of this role is the sector s function as a facilitator of capital and it is high time it reac - tivated that function. Providing access to equity capital has always been a major aspect of what exchanges do. We at Deutsche Börse provide it from the financial capital of Europe s largest and most vibrant economy via the Frankfurt Stock Exchange, which we operate. Our global network with major hubs and acti - vities over the world supports our service role. Companies listed on the Frankfurt Stock Exchange include global brands such as Allianz, BASF, Daimler, Munich Re, Siemens and ThyssenKrupp. Companies listed on the Frankfurt Stock Exchange thus get the opportunity to join interna - tionally recognized indices such as the DAX index family. Moreover, companies listed on the Frankfurt Stock Exchange gain direct access to a global pool of investors with some 250 trading participants in 18 countries, includ - ing all of Europe s various financial centres. Deutsche Börse is the most sophisticated equity organization worldwide and serves the stock markets, the future and options markets, while also providing clearing and settlement services and, last but not least, makes market information available to its customers. General Standard in line with EU-wide standards for an exchange listing, and, finally, the premium-level Prime Standard for corporations addressing global institutional investors. Companies may of course go public in anyone of these segments, depending on their degree of maturity. Irrespective of their choice, the exchange offers access to capital not only when a company first enters the market, but also later, as a platform for capital increases. Deutsche Börse has always been committed to bringing investors and companies together, both for their common good, and for the common good of the economies to which they belong. Exchanges take their serving role for the real economy very seriously, as providers of access to capital, and as organizers of regulated markets for transparent, unmanipulated and fair price discovery. Which is why we at Deutsche Börse, together with KfW, organize the German Equity Forum, thus providing an ideal exhibition floor, meet - ing place, and learning center for companies, be they small, medium-sized or large; from Germany, Europe or else - where, be they listed or still private. In fact, this is the largest conference of its kind in Europe to give companies the opportunity to present themselves to the international inves tor and analyst community, something of which we are very proud. The new conference magazine you have in front of you, in addition to organizational information, will offer you background articles that we trust will prove helpful well beyond the actual event. Yours sincerely, Dr. Reto Francioni In the stock market we offer three market segments that are tailor-made to suit the lifecycle of companies: the Entry Standard as a door opener for firms wishing to take their first step into the EU capital market, the more ambitious Dr. Reto Francioni CEO Deutsche Börse AG Deutsches Eigenkapitalforum Fall 2010 Page 3

4 Contents 3 Editorial Dr. Reto Francioni, Deutsche Börse AG Introduction 8 China will not win the next 50 years with its political system Interview with Prof. Dr. Norbert Walter, Walter & Daughters Consult, about China's sustainability, speculative bubbles and overexploitation of its own heritage 12 New investors always welcome New private equity fund for German SMEs invests long-term Albrecht Deißner, KfW Bankengruppe 14 The entrepreneur will still be the boss Interview with Dr. Axel Nawrath, member of KfW's Executive Board 16 Not just another Mega-Trend Sustainability issues will have an increasing impact on financial business Marc Bernhof, Steffen Pörner, HSBC Trinkaus 18 It's the owners who have to decide what they are prepared to pay Interview with Dr. Jens Maßmann, Partner at Ernst & Young, about pain thresholds, responsibilities and international practices with management board salaries 20 Social media in financial communications How you can reach investors in social networks Alexander von Preysing, Edda Vogt, Deutsche Börse Group 24 Future now Electronic voting boom ahead? Torsten Fues, Haubrok Corporate Events, Dirk Hesse, Gahrens + Battermann Legal 26 Other challenges already exist alongside account ing, capital investment and corruption cases Interview with Dr. Stefan Heißner, Partner at Ernst & Young GmbH Wirtschaftsprüfungs gesellschaft, about financial crimes such as fraud and compliance risks and how to deal with them in practice 28 China SOX Will Chinese companies adapt to the modern model of cor - porate governance? Dr. Gebhard Zemke, BDO AG Wirtschaftsprüfungsgesellschaft 30 Commercial due diligence Requirements and benefits, also for strategic investors Dr. Rainer Mayer, maconda Corporate Development 32 Other ways to go New securities disclosure rules and their effects on public M&A transactions in Germany Stephan Heinemann, Taylor Wessing 34 Driving value in the boardroom How to make use of increased duties to become a proactive supervisory board Volker Potthoff, CMS Hasche Sigle Financing 36 Growth capital for the German Mittelstand How private equity firms successfully support German mid-sized companies Dörte Höppner, BVK 38 WEPA case study Growth financing during times of financial distress Markus Kurzhals, Arndt Rautenberg, RölfsPartner 42 A tactical financing instrument The right mezzanine can be the better equity solution Steffen Schneider, Frans-Matthis Pleie, FCF Fox Corporate Finance 46 Basel III affects the banks and, therefore, it also affects the SMEs Interview with Lutz Weiler, equinet Bank, about the financing needs of German small and medium enterprises (SMEs), the effects of Basel III and interest equity options 48 An attractive option Corporate bonds as a complement to equity financing Dr. Dietmar Schieber, Close Brothers Seydler Bank 52 HAMBORNER REIT AG Reloaded Relaunch of a Share Maren Lorth, WestLB 54 Emergence of mini-bonds The new trend to bank-independent debt financing for SMEs Ursula Querette, Haubrok Investor Relations Page 4 Deutsches Eigenkapitalforum Fall 2010

5 Contents Capital Markets 56 It s all about value and visibility Valuation process and IPO pricing in volatile market environments Michael Salcher, Florian Frei, KPMG AG Wirtschaftsprüfungsgesellschaft 58 Motives & experiences Chinese IPOs in Germany Peter Thilo Hasler, Viscardi 62 GDR Programs in the regulated market of the FSE Overview of the specifics Robert Michels, Dr. Alexandra Zech, BEITEN BURKHARDT Rechtsanwaltsgesellschaft 64 Going public in volatile markets How to de-risk an IPO Philip Grosse, Credit Suisse 66 Family IPOs IPOs as an alternative for family companies Dr. Elmar Jakob, IPONTIX Equity Consultants 70 Corporate brokerage Continuous dialogue with investors as success factor for small and medium-sized enterprises Oliver Riedel, Nico Baader, Baader Bank When the world wants to know what German business is thinking, one bank comes to mind. Industries & Sectors 72 LifeScience Forum Healthcare reforms call for innovative strategic answers Dr. Christa Bähr, DZ BANK 76 Far reaching impact of the Euro s financial crisis Uncertain outlook for the world s largest renewable infrastructure investment end markets Dr. Martina Ecker, Jefferies International Limited 80 Germany s cleantech companies need a spe cific technological advantage to stay in the running Interview with Carsten Klante, Macquarie Capi tal, about the challenges, investments and sustain ability of Cleantech companies and markets 84 Long-term potential for the German real estate sector Interview with Dr. Christian Schlüter, Credit Suisse, about the German listed property market, attractive market segments and the importance of investor sentiment 86 Risking the recovery? Basel III and the credit crunch Michael Rohr, Silvia Quandt Research Corporates & Markets When you need to make transactions happen in or out of Germany, you need Commerzbank Corporates & Markets. With 100,000 corporate and institutional clients and over 11 million private customers in Germany, Commerzbank understands the dynamics, attitudes and opportunities that shape this powerful market better than anyone else. That is why from capital and debt-raising to investment and risk management Corporates & Markets provides the insight, the relationships and the on-the-ground expertise that make German deals into landmark deals. When the world wants to do business with Germany, we are your partner. Deutsches Eigenkapitalforum Fall 2010 Page 5 Achieving more together

6 Contents Organizer, Co-Inititiator & Sponsors Organizer & Co-Initiator 90 Deutsche Börse, KfW 91 Ernst & Young Wirtschaftsprüfungsgesellschaft Main Sponsors 92 Close Brothers Seydler Bank, Credit Suisse Securities, DZ Bank 93 equinet Bank 94 FCF Fox Corporate Finance, Jefferies, LBBW/ Baden-Württembergische Bank 95 Macquarie Capital (Europe), VISCARDI Sponsors 96 BDO AG Wirtschaftsprüfungsgesellschaft (96), CMS Hasche Sigle (96), Commerzbank (96), German Venture Capital and Private Equity Association (BVK) (97), Haubrok (98), Hauck & Aufhäuser Invest ment Banking (98), HSBC Trinkaus & Burkhardt (98), KPMG Wirtschaftsprüfungsgesellschaft (99), Morgan Stanley (100), Rölfs Partner (100), Silvia Quandt & Cie. (100), Taylor Wessing (101), UniCredit Bank (101), WestLB (101) Partners 102 bwcon Baden Württemberg: connected (102), Creathor Venture Management (102), DVFA (102), Gahrens + Battermann (103), HPE Holland Private Equity (103), PvF Investor Relations (104), STEP Award (104), Ventizz Capital Partners Advisory (104) Media Partners 105 ABC New Media (105), bne media (105), Börsen-Radio- Network (105), Börsen-Zeitung (106), DAF Deutsches Anleger Fernsehen (106), dpa-afx Wirtschaftsnachrichten (106), Fachverlag der Verlagsgruppe Handelsblatt (107), FINANCIAL GATES (108), Frankfurter Allgemeine Zeitung (108), GoingPublic Media (108), Haymarket Media (109), Institutional Investment Publishing (110), International Herald Tribune (110), mergermarket (110), n-tv Nachrichtenfernsehen (111), Pho enixcne (112), Property Investor Europe PFE (112), RiD Real Estate Infor - mation (112), Swiss Equity Medien (113), VDI Verlag (113) Supporters 114 Klassik Radio (114), Nespresso Deutschland (114), Radisson Blu Hotel (114) TOP 25 Capital Seeking Companies 116 Accovion GmbH 118 AMEOS Gruppe 120 Artificial Life Inc. 121 Asklepios Kliniken GmbH 122 Bard Holding GmbH 124 Biogest Energie- und Wassertechnik GmbH 126 caprotec bioanalytics GmbH 128 Cevec Pharmaceuticals GmbH 129 CureVac GmbH 130 Diva Video Access AG 132 FLABEG Holding GmbH 133 Glycotope GmbH 134 IONYS AG 136 itk group GmbH 137 Mister Spex GmbH 138 Novaled AG 140 Novalung GmbH 141 pvxchange N.V. 142 REMOS Aircraft GmbH 144 RIEMSER Arzneimittel AG 145 SkySails GmbH & Co. KG 146 stylefruits GmbH 148 SULFURCELL Solartechnik GmbH 150 Torqeedo GmbH 151 voxeljet technology GmbH 152 WiredMinds AG 153 Zentrum Mikroelektronik Dresden AG Service 154 Deutsche Börse Listing Partners 162 Market Segments An overview 164 s at Deutsche Börse Group 165 Imprint Program Deutsches Eigenkapitalforum Fall Program Overview Appendix a: Main Level Map Appendix b: Upper Level Map and Exhibitors Index Page 6 Deutsches Eigenkapitalforum Fall 2010

7 Preparing for the performance of a lifetime: IPO Competence Center The Ernst & Young* IPO Competence Center assists with IPOs all around the world from the preparation and planning stages, the structuring applause, visit

8 Introduction China will not win the next 50 years with its political system Interview with Prof. Dr. Norbert Walter about China's sustainabil ity, speculative bubbles and overexploitation of its own heritage. Conference Magazine: Prof. Walter, keyword China: are we talking here about a developing country or a super - power? Walter: China is the most important emerging nation, with catch-up processes and considerable potential, almost everywhere in the country. China is becoming Number 2 in the world, it already is economically in this runner up position, but it is still behind the USA. Conference Magazine: And what about India? Walter: In the last three decades, China has provided more people with the chance of reasonable brighter living conditions within its system than anywhere else in the world. I am not observing this in India. Prof. Dr. Norbert Walter was chief economist of the Deutsche Bank and Head of DB Research until the end of He is now managing director of Walter & Daughters Consult, his own company. Prof. Dr. Norbert Walter Conference Magazine: The demographic trend is one of the points which differentiates China from India. How quickly will China go downhill due to old age? Walter: Pretty quickly. China is approaching the fatal situation where it will not have enough young qualified skilled workers which the country urgently needs for it to catch up with industrial countries. This will already be the case in five years. Do not confuse this though with the overall supply of workers which China will not be short of due to employees leaving rural areas and State-owned enterprises. Conference Magazine: Shouldn't China simply abolish the one-child policy? Walter: They will almost certainly do that but it cannot produce a quick change. Added to this a disproportionate amount of boys was born in the last few years 127 boys were born for 100 girls, however, future children will be born by women, thus demographic recovery is a far off phenomenon. Conference Magazine: To quote somebody famous in recent German public debate, is China therefore abolish - ing itself? Walter: China is a bit too vast to be overwhelmed by mass immigration. Also, for selective immigration you would need regions in which there is an excess of Page 8 Deutsches Eigenkapitalforum Fall 2010

9 Introduction women. This, however, is not the case in any important country in the world. Also not in India. Conference Magazine: Welfare losses, direct and indirect, threaten China not least due to its han dling of public goods, namely water, air, soil. Walter: The demographic problem is not yet affecting the country now. China's ecological problems are not new though they are now resulting in dramatic implications for the food chain and living circumstances. The next five-year plan will most certainly systematically adopt these issues. The measured increase in consumption in China is becoming more modest, as in future it will have to reallocate resources for environmental conserva - tion. This means lower growth rates for China overall in the near future. Conference Magazine: Is China enlisting help to cope with this task? Walter: It's interesting that Germany is an important research, development and industrial partner in this process. China is very curious and open in terms of developments which are made in Germany in these sectors. The Taylor Wessing Capital Markets Team is at the forefront of tomorrows financing solutions Deutsches Eigenkapitalforum Fall 2010 Page 9

10 Introduction In certain coastal towns are some luxury amenities which not even Ludwig II would have been able to afford. Conference Maga - zine: China has done pretty well with its attitude towards the exchange rate. Walter: China is one of the few countries that has controls on capital movements. In other words: un - like other countries, the Chinese can actually effectively implement what they want regarding the exchange rate. They do this, however, at a price. Conference Magazine: Recently a speculative price bubble on the Chinese real estate market was often diagnosed from afar, is this true at all? Walter: There is certainly a hypertrophic development of real estate prices in some coastal towns. There are some luxury amenities which not even Ludwig II would have been able to afford. This needs to be corrected. China is more though than a few coastal towns. It looks very different in rural areas. If there is anything to find fault with, then rather that there is an undersupply of reasonable accommodation for the mass of Chinese people. Conference Magazine: The dollar currency reserves accumulated over the last few decades also mustn't lose too much value though, aren't the USA and China in the same boat? Walter: While this at first glance is the case and is coined the locking in effect of big holdings of assets, it cannot stand in the way of correction, since continued accumulation only increases the cluster risk of investing in one asset class. Conference Magazine: What's the situation with the exchange rate which China habitually is massaging? Walter: Specifically the Anglo-Saxon school of thought considers it to be the most normal thing in the world to use exchange rate policy as an instrument of national economic policy. I have a big problem with this. If there is the same economic problem all over the world, then everyone also wants to do the same thing at the same time. Since the exchange rate reflects the relationship between two currencies, both sides cannot be helped by both devaluating, since this is logically impossible. As the global economic situation currently shows, the exchange rate cannot be the method of choice. Hong Kong Page 10 Deutsches Eigenkapitalforum Fall 2010

11 Introduction Conference Magazine: Do you suggest this causes diversification in tangible assets? Walter: China is purchasing mines, whole companies and other currencies. By all means tangible assets. This has implications for the USA as it must then acquire other depositors to invest in US state bonds etc. It must persuade them though, it must win them over. They will certainly not succeed in this with the promise of devaluing the dollar and offering only low interest rates. Conference Magazine: That doesn't sound very uplift - ing. What's your prognosis? Walter: For the USA this quite clearly means tightening its belt. It is a thing of the past that the United States is the only country which produces world currency reserves. The US savings rate will increase, its consumption growth will decrease. Conference Magazine: So does China then possibly have the better economic system? Walter: China did well in the last few decades to not give up certain hierarchical structures and also to not take over the western finance system and/or parts of it. How - ever, China will not win the next 50 years with its political system. The best advice would be that Peking should become like Hong Kong before it was returned to China. Conference Magazine: Prof. Walter, many thanks for the extremely interesting conversation! This interview was conducted by Falko Bozicevic. Advertisement Anzeige Designated Sponsoring Enabling your long-term success in the capital markets. Are you looking for a bank as your partner for your IPO, capital increase, secondary offering or as designated sponsor? If so, you should base your decision on two important criteria: you need a partner that provides permanent, individual and pro-active support and has strong placing power. HSBC Trinkaus offers a unique constellation of advantages in the German banking sector. Benefit from our advisory, equity capital market and corporate broking specialists many years of experience in the markets, combined with the service policy of a traditional German private bank and profit from HSBC s placing power as one of the world s leading banking and financial services organisations. HSBC Trinkaus & Burkhardt AG Corporate Broking Königsallee 21/23 D Düsseldorf Phone

12 Introduction New investors always welcome New private equity fund for German SMEs invests long-term Many investments in growth and innovation projects cannot be financed with debt capital alone and require private equity. However, insufficient equity can hinder the growth of enterprises and prevent them from making investments in innovation particularly now, as the economy is on the upturn. With the new Eigenkapitalfonds für deutschen Mittelstand (Private Equity Fund for German SMEs), KfW Bankengruppe and Commerzbank want to address the need of many small and medium-sized enterprises in Germany for flexible and entrepreneur-friendly financing offers. The fund complements the products already available on the market. Its aim is to sustainably strengthen the equity base of small and medium-sized enterprises. Fund volume of up to EUR 500 million Albrecht Deißner has been respon sible for equity financing at KfW since Beforehand he was the Head of Department for Start Ups at the formerly independent Deutsche Ausgleichsbank, Bonn. Albrecht Deißner, Head of Product Deve l opment and Private Equity Financing, KfW Bankengruppe The private equity fund for German SMEs has an overall volume of up to EUR 500 million, with the two anchor investors contributing an initial volume of nearly EUR 100 million each. KfW and Commerzbank are looking to attract further investors to the fund. Banks, insurance companies, pension funds or family companies that wish to participate are welcome to join at any time. Photo KfW The fund is available to unlisted small and medium-sized enterprises in Germany across all sectors with an annual turnover of up to EUR 500 million. An equity investment can be between EUR 10 and 30 million. Focus on family enterprises German family enterprises and their sustainabilityorientated corporate development are the focus of the new private equity fund, which is designed for an investment horizon of up to eight years, a longer-term commitment than is usually customary in private equity funds, and takes into account the specific private equity financing requirements of small and medium-sized enterprises. To meet these specific requirements, the private equity fund offers the following key features: The minority equity interest is acquired at market conditions and is invested in the enterprise in the form of genuine private equity. Such additional private equity enables the enterprise to finance expansion investments and to bolster its sustainable development. Moreover, the aim is for longer-term equity investments. Page 12 Deutsches Eigenkapitalforum Fall 2010

13 Introduction SME-friendly exit policy that gives first preference to existing shareholders, for example by granting them a buyback option. The private equity fund for German SMEs is quite different from the leveraged buyout models which are widespread in Germany as well and usually aim for complete control of the enterprise and short-term profit maximi zation. On the basis of a sophisticated selection procedure, KfW and Commerzbank have assigned Munich-based Afinum Management GmbH to be the manager of the private equity fund. Afinum is an independent investment fund specialized in equity investments in small and medium-sized enterprises. Afinum makes independent decisions Afinum will make investment decisions for the fund independently on the basis of the investment criteria and the SME-friendly parameters of the fund concept. The fund manager is also the first point of contact for enterprises seeking private equity. An Advisory Board composed of fund investors supervises the investment directives and decides in the event of possible conflicts of interest. In Afinum we have found a competent partner for the fund management who is able to implement the core concept of the new fund to create equity investment conditions that are SME-friendly and individually tailored to the needs of the entrepreneur. Advertisement Ausgewählte Wachstumsfinanzierungen durch VENTIZZ: Wir finanzieren und beschleunigen Wachstum in den Bereichen Erneuerbare Energien Wertschöpfungsintensive Fertigungsindustrien Informations- und Kommunikationstechnologie Medizintechnik info@ventizz.com

14 Introduction The entrepreneur will still be the boss Interview with Dr. Axel Nawrath, Member of KfW's Executive Board Conference Magazine: Dr. Nawrath, why have KfW and Commerzbank initiated a private equity fund for German SMEs? Nawrath: Many are talking about the equity base of small and medium-sized enterprises, but hardly anyone is pro viding new impetus we want to change that. The new private equity fund concept is specially tailored to the needs of SMEs, so we are setting new standards. Conference Magazine: What sets the new fund apart from similar offers available on the capital market? Nawrath: This private equity fund offers genuine private equity which remains within the enterprise and is used to finance its growth. What is important is that the private equity is acquired without leverage, so no liabilities devolve on the enterprise. In addition, the fund invests in the long term and individual shareholdings can be kept for up to eight years. The overall term of the fund will be a maximum of 14 years. Conference Magazine: So KfW will have a say in the enterprises' business decisions? Nawrath: Clearly no. We have appointed Afinum Management GmbH, an independent external fund manager, to manage the fund; it will not interfere with the management of the companies' operations but rather support them with expertise and contacts as and when necessary usually at Dr. Axel Nawrath has been a member of the KfW management board since Before that he was Secretary of State at the Federal Ministry of Finance for three years. He has also held positions at Deutsche Börse AG, the Federal Fiscal Authority and the Federal Audit Office. Dr. Axel Nawrath, Member of KfW's Executive Board the level of the existing regulatory and advisory bodies. The investors, and that includes KfW, will not interfere with this process nor influence the enterprises in which the fund will invest. Conference Magazine: The entrepreneur will remain independent to make decisions? Nawrath: As the fund will only enter into minority share - holdings, the entrepreneur's autonomy is ensured in any case. He will continue to be the boss but will give the minority shareholder in this case Afinum reasonable rights of co-determination and control. Conference Magazine: What returns do you expect this fund to deliver? Nawrath: We want to attract additional private investors to the fund, so we have to offer market-conforming conditions. The fund wants to offer the enterprises SME-friendly terms and conditions, but it also wants to meet the return expectations of private investors. Our target is ten per cent and more after costs. Conference Magazine: What does the exit scenario look like? Nawrath: The fund management and the entrepreneurs will determine the preferred exit and the exit strategy jointly at Page 14 Deutsches Eigenkapitalforum Fall 2010

15 Introduction the start of the equity investment. The preferred scenario is to have the entrepreneur buy back the shares, but it may also be the preparation of a successor arrangement. Only where an entrepreneur himself does not wish or is unable to buy back the shares, will other exit scenarios come into consideration. Conference Magazine: What criteria must a small or mediumsized enterprise meet to obtain equity from the fund? Nawrath: The enterprises must be structurally sound and have positive growth prospects. All investment decisions will be based on an in-depth analysis of the strengths, weak nesses, risks and opportunities of the respective enterprise. Conference Magazine: Is KfW planning any further financing products in the field of private equity finance? Nawrath: In our private equity financing, we apply the same rule as in other areas of promotion to constantly review our product range and optimize it in accordance with changing market conditions. Initiating the new Private Equity Fund for German SMEs has been an important step in this direction. We also plan to introduce some innovations in the area of venture capital in Conference Magazine: Dr. Nawrath, thank you for the interview. The interview was conducted by Falko Bozicevic. Advertisement 2010 KPMG AG Wirtschaftsprüfungsgesellschaft, a subsidiary of KPMG Europe LLP and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ( KPMG International ), a Swiss entity. All rights reserved. Printed in Germany. Do you want to enter future oriented markets? We are expecting you. KPMG advises clients on cross-border issues to manage their growth agenda in a dynamic changing world. As one of the world s leading auditing and advisory companies, we provide our clients with a broad range of services in the fields of Audit, Tax and Advisory. We help you to develop business strategies and invest in new markets, especially when it comes to financing, investment, IPOs and strategic alliances. We assist in guiding our clients through the maze of IPO complexities from a regulatory, financial and tax perspective. For more information please contact: KPMG, Dr. Robert Gutsche, Telephone , robertgutsche@kpmg.com

16 Introduction Not just another Mega-Trend Sustainability issues will have an increasing impact on financial business The public, institutional shareholders, the media and Non Governmental Organizations (NGO) have all increased their focus on how companies and banks manage sustainability issues. Important role for the business relationship Potential reputational risk has increased, as can be seen from sustained NGO campaigns against the Royal Bank of Canada (oil sands) and Nestlé (palm oil) in recent months. Sustainability or reputational risks arise where banks provide financial services to clients whose activities have or are perceived to have an adverse impact on the environment or society. Financial services do not only include lending, but also bond issues and initial public offerings (IPO). Marc Bernhof, Associate Director, Credit Sustainability Risk Manager, HSBC Trinkaus Steffen Pörner, Director, Head of Corporate Com munications, HSBC Trinkaus Different organizations monitor financial institutions tracking the operations of the private financial sector and their effect on people and the planet. One of them, BankTrack, launched a benchmark research project to stimulate large, international banks to develop adequate credit policies for critical sectors and issues in a transparent and accountable way. tors in 2003, including Chemicals, Defense, Energy, Forest Land and Forest Products, Freshwater Infrastructure and Mining and Metals. The sector risk policies are based on international standards of good practice like The Equator Principles and consider the thoughts of clients, share - holders, NGOs and industry associations. These policies are applied regardless of the value of the transaction or size of the business. They set out standards to be followed when lending or investing in companies or projects and specify areas where an involvement is prohibited or restricted. If a customer is currently not compliant with one of HSBC s sector policies but shows a credible path to be so, HSBC will consider supporting the customer. That is Figure 1: Definition of Sustainability Logo used by BankTrack for their benchmark research project in 2007 Source: BankTrack, benchmarking the credit policies of major international banks, 2007 HSBC s approach Economic Corporate Sustainability HSBC aims to run a sustainable business for the long term and seeks to embed social and environmental issues into its daily business. Amongst others it already developed its own policies for socially and environmentally sensitive sec- Social Source: HSBC Environmental Page 16 Deutsches Eigenkapitalforum Fall 2010

17 Introduction Figure 2: HSBC s Policies Forest Land & Forest Products Freshwater Chemicals Energy Mining & Metals Defense (Source: HSBC) because HSBC believes it can make a bigger contribution if it remains engaged with clients and support them as they work to improve the environmental and social impacts of their businesses. Group Corporate Sustainability is part of Group Management Office (GMO) in London and works closely with other GMO functions, Customer Groups, Corporate Real Estate, Purchasing and IT. HSBC reviews the sector policies regularly and maintains a global network of 49 Sustainabi - lity Risk Managers in 26 countries, who mainly work in Credit & Risk. They help to implement HSBC s sector policies and ensure that the wider risk management community is trained in sustainability risk. Conclusion Financial institutions and their customers will do well to implement sustainability policies and to clearly com - municate their intentions. Sustainability will increasingly gain attention and will not fade away. Policies such as those of HSBC could help to mitigate reputational risks and to meet the needs of the shareholders and the wider eco - nomy, the environment and society as well. Therefore: mind the gap! Advertisement 12. DEUTSCHER EIGENKAPITALTAG DES BVK JMB Foto: Jens Ziehe Der Deutsche Eigenkapitaltag des Bundesverbandes Deutscher Kapitalbeteiligungsgesellschaften (BVK) ist die wichtigste Konferenzplattform der deutschen Private Equity-Branche. Mit seinen Gästen aus Politik und Gesellschaft sowie der Finanz- und Wirtschaftwelt diskutiert der BVK auf seiner größten Jahres konferenz aktuelle Herausforderungen und Entwicklungsperspektiven für Private Equity in Deutschland und Europa. 12. Mai 2011 Glashof des Jüdischen Museums Berlin Lindenstraße 9-14 l Berlin The Deutsche Eigenkapitaltag of the German Private Equity and Venture Capital Association (BVK) is the biggest and most important annual conference on private equity in Germany. Together with renowned representatives of political and financial institutions the BVK will discuss current issues of the private equity industry for instance if Germany needs a new private equity culture or how private equity investors see the future of the private equity business in Germany and Europe.

18 Introduction It's the owners who have to decide what they are prepared to pay Interview with Dr. Jens Maßmann, Partner at Ernst & Young, about pain thresholds, responsibilities and international practices with management board salaries. Conference Magazine: Dr. Maßmann, how do you assess the current discussions about the appropriateness of management board salaries including the subsequent legislative proposals? Maßmann: There is a difference between the two. German management boards have actually always earned com paratively moderately, at least seen internationally. Development was always in parallel to the company's economic development. If you compare the years 2004 and 2008/09, which had a similar economic situation, then you can see that salaries are also at a comparable level. It is an inflammatory subject... Dr. Jens Maßmann has been a partner since 2003 and is responsible for the management of Performance & Re ward in Germany, Austria and Switzer land as well as the EMEIA area at Ernst & Young GmbH Wirtschaftsprüfungs gesellschaft. Conference Magazine:... and it's obviously fun to talk about. Maßmann: That's always been the case. As a young professional footballer you do not only usually earn more than German managers, but you are also in the job for longer and almost certainly with less qualifications and other respon sibilities. In the meantime roughly a third of all management boards is replaced every two years. Dr. Jens Maßmann, Partner, Ernst & Young Conference Magazine: To what extent is this discussion understood outside Germany, is this another case of German navel-gazing? Maßmann: This discussion is currently topical all over the world, Germany is not an isolated case. What's new is that due to this synchronicity an international comparison of salaries and remuneration systems is taking place. Conference Magazine: It is often claimed that German top managers must be much better paid because otherwise they will migrate abroad. Maßmann: You also have to see management board salaries as insurance premiums against the risk of failure. From a company's point of view, the main priority is that it is well managed. Then it's not as important whether top managers earn EUR 1 or 2 million more or less. Dax com panies make profits in the billions. Major companies will therefore always be prepared to also pay certain premiums. Major companies will always be prepared to pay certain premiums Conference Magazine: How far should we go with regu - lations, where is the pain threshold? Page 18 Deutsches Eigenkapitalforum Fall 2010

19 Introduction Maßmann: It may be that managers say that it's no longer attractive to be in management. There is no question that transparency is important. How - ever, once transparency has been established, there is no reason to regulate any further. At the end of the day it is still a free market economy. It's the owners who have to decide what they are prepared to pay. Conference Magazine: Share holders can already be involved in decisions about the remuneration system, although not about the actual amount, at annual general meetings. Maßmann: The remuneration amount is also implicitly agreed. On the whole, the legislator has remained rather vague here in its differentiation. The difference appears somewhat contrived to me. Conference Magazine: Aren't it usually the enormous severance payments which often provoke indignation? Maßmann: That's not the way I see it. With involuntary resignation you at best receive the equivalent pay out of the remaining term of your employment contract. At the same time as management you can't take on just any other job, i.e. you have to potentially reckon on longer periods out of work. It is also pos sible that your reputation has suffered. Conference Magazine: Looking towards the future: what is still to come? Maßmann: There will be more regulations. At the same time the desired result will systematically not be achieved. Anyone calling for IPOs / listings Corporate actions Alternative financing instruments Designated Sponsoring Mergers & Acquisitions Capital markets consulting International road shows Research Photo MACLEG - Fotolia com Rights issue Sole Lead Manager Entry Standard Rights issue Sole Lead Manager Entry Standard IPO Joint Lead Manager Entry Standard Rights issue Sole Lead Manager Entry Standard Rights issue Settlement Agent General Standard Rights issue Sole Lead Manager Entry Standard IPO Sole Lead Manager Entry Standard Designated Sponsoring Research General Standard since Rights issue and admission of new shares with prospectus Sole Lead Manager and Sole Bookrunner Prime Standard / Share buyback Sole Lead Manager Prime Standard until Designated Sponsoring Research Prime Standard since Admission of new shares with prospectus Sole Lead Manager General Standard / Conference Magazine: Should legal interference in remuneration systems be kept restricted? Maßmann: The new legal regu - lations force remuneration to be much more balanced and evenly distributed. This removes the link between payment and performance. This is a dubious idea. transparency must also allow for the alignment of German salaries with international practices. Conference Magazine: Dr. Maßmann, many thanks for the interes t - ing interview. Interview conducted by Falko Bozicevic. Deutsches Eigenkapitalforum Fall 2010 Page 19 Designated Sponsoring Research General Standard since References (excerpt) Representative office of biw Bank fuer Investments und Wertpapiere AG Mainzer Landstrasse 61 D Frankfurt am Main Dirk Blumhoff / Ralf Hellfritsch Phone +49 (0) Internet Designated Sponsoring Research General Standard since info@bankm.de Designated Sponsoring Research Prime Standard since

20 Introduction Social media in financial communications How you can reach investors in social networks Social networks such as Facebook, Xing, LinkedIn or Twitter offer new possibilities for addressing private and institu tional investors. Our thesis is that companies can reach new groups of people with the help of these strongly expanding internet services, develop a direct reverse channel for investors, set up a virtual community. Costs can be kept relatively low and the related risks are manageable. A lot of people have become active in social networks User statistics of such services speak for themselves. Here is just a small selection of the broad range of statistics which is currently been published in the media: in Germany 42 percent of internet users aged between 14 and 49 are registered in a social network. The number of users worldwide is expected to be even 60 percent. The market leader Facebook alone has around 500 million members in the whole world. 1 At present, no other channel of communication is growing more strongly than this one. Of course, there is plenty of room for stock exchange-related topics, too. particularly investors of tomorrow Alexander von Preysing, Head of Issuer Services, Deutsche Börse Group Edda Vogt, XETRA Marketing, Deutsche Börse Group these (potential) investors everything of importance is happening in their network. According to US-American univer sities, s are deemed to be rather passé these days. and an increasing number of professional investors People under the age of 30 labeled native digitals especially use such services to communicate with their environment and to keep themselves updated. For 1) Sources: Socialnomics.net, Internet World, Nielsen, Fittkau & Maaß Social networks such as Facebook, Xing, LinkedIn or Twitter offer new possi bilities for addressing private and institutional investors. Photo Photojog - Fotolia com Social networks are no longer exclusively reserved for private gossip and rumour. Internet services such as the international LinkedIn or the nationally relevant Xing have always been recognized as b2b networks. Recently, private matters are also being discussed here. On Facebook in turn, which is formerly known as the best location for exchanging gossip, there are more and more institutional participants in the field. An estimated 20 percent of Börse Frankfurt s 2,000 Facebook friends can be allocated to all sorts of institutional clients from the financial industry. FINRA, the U.S. American broker association, has reported that a younger generation of U.S. investment advisors is pushing employers and industry regulators to allow them to use social networking websites like Facebook and Twitter to communicate with customers. Another example is Deutsche EuroShop AG which is very active in the field of investor relations in social media. According to them, one fourth of its Facebook group members are analysts and investors. ( Page 20 Deutsches Eigenkapitalforum Fall 2010

21 Introduction Every network has a different mentality As different as your target groups are, social media services differ just as much. Therefore, companies should thoroughly consider whom they want to address, how and with which message. YouTube: Video clips with comment function A lot of people still consider YouTube to be an internet exchange for fun films. In contrast, the world's biggest online video site has importantly developed a lot since then. With a daily click rate for videos of more than 1 billion, all sorts of film content has in the meantime become available there. After Google, YouTube is the most widely-used search engine worldwide. The functions to comment on video clips, to subscribe and recommend them make YouTube a social network. Advertisement MARKTSTARK. UNICREDIT. Der Erfolg unserer Transaktionen in 2010 zeigt, dass Emittenten und Investoren ihr Vertrauen zu Recht in die UniCredit gesetzt haben. Die Basis: bedingungsloses Engagement, innovatives Denken und ein europaweit erstklassiger Zugang zu den Märkten. Q-Cells SE Q-Cells SE Sky Deutschland AG KUKA AG Heidelberg Cement AG EUR 128,700,000 Convertible Bond EUR 127,600,000 Rights Issue EUR 177,400,000 Rights Issue EUR 45,400,000 Rights Issue EUR 190,400,000 ABB Secondary Joint Bookrunner Germany Joint Bookrunner Germany Joint Bookrunner Germany Joint Bookrunner Germany Joint Bookrunner Germany October 2010 October 2010 September 2010 June 2010 April 2010 Diese Anzeige wurde von der UniCredit Bank AG, Mitglied der UniCredit Group, veröffentlicht. Die UniCredit Bank AG wird von der Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin) reguliert.

22 Introduction Channel Börse Frankfurt at YouTube Topics: Second-hand utilisation of a film for newcomers, TV interviews and panel discussions. Since: April uploaded films More than 160,000 views since the beginning 150 subscribers Source: Deutsche Börse Open for criticism? At the moment, Facebook is the most widely used network worldwide. If Facebook was a country, it would be number three after China and India, ranking even higher than the USA. In this country you can keep your network up-todate with status messages (and links, pictures or videos, if you like). Companies operate Facebook pages, and members identify with them. In the meanwhile, many other web pages have incorporated the Like -button on their websites and users can immediately tell their network what they like. What makes Facebook an interesting back channel is the fact that members are much less anonymous than in forums or on YouTube. They might use fake names, but they are always visibly present with their networks. They are real users, there is almost no spam on Facebook and discussions are mostly led constructively. Nevertheless, the same rules still apply to criticism, namely to approach it openly and equally. The comment function on YouTube, a service which is of course actively used, seems to be a challenge for many companies there. The YouTube community equally criticizes and praises contents. Comments aiming below the belt can easily and understandably be deleted if editorial guidelines for discussions have been provided. Basically, there is often a reason why contents get criticized and thus there is the possibility to respond to it in a suitable manner. In our experience, dealing with critical comments has always stolen away the thunder of the harshest critics. Facebook: Building a Community facebook.com/boersefrankfurt Topics: Everything worth broadcasting in real-time, e.g. the IPO of a company featuring pictures from the floor, the current results from the weekly sentiment, but also betting games, book reviews etc. Since: February ,800 friends, 700 of which active per month. An average of 20 new friends per day Source: Deutsche Börse Twitter: Disseminator for real-time messages Even though the Twitter world is limited to 140 characters per message including links, the information service is still growing. Companies and news services use Twitter for spreading news of all kinds, and the followers tweet it to their network. Side effects are unknown. Our conclusion: It is worth it It is not yet clear where social networks are going. Things that work today can be different tomorrow. Nevertheless, we now have the chance to gain important experience in social Page 22 Deutsches Eigenkapitalforum Fall 2010

23 Introduction networks. The effort is reasonable. However, one has to stick with it and follow what happens on their accounts in order to be able to react if necessary. Discussions and gossip also about you are unavoidable in social networks anyway. It is always better to follow the discussions and contribute to twitter.com/boersefrankfurt Topics: Everything worth broadcasting as original Tweet, market news as feed. Since: February ,600 Followers Source: Deutsche Börse them if necessary. Authenticity and relevance are best re ceived. It does not need to be entertaining, but having a little fun in what you do is helpful. Apart from that, the trial and error principle applies. In the worst case, nobody clicks the Like -button and up until now, there is no Dislike -button. Advertisement The fastest way to transactional success Whether you are planning to buy, sell or cooperate with another business RölfsPartner has a dedicated transaction team of financial and tax accountants, management consultants and lawyers helping you to get wherever you want to go. Our specialists in the Competence Center Transactions can manage the complete transaction process: One-Stop-Transactions from strategic planning to post merger integration. We also offer individual transaction services like financial due diligence, tax and legal structuring, contract drafting, valuation and post merger integration. Take advantage of our interdisciplinarity and longstanding experience.

24 Introduction Future now Electronic voting boom ahead? Do you like paper-based voting procedures? Any adult is familiar with them, because they are often used for parliamentary elections and shareholders meetings. Nowadays, there are modern alternatives which use environmental reserves more carefully. Are you in touch with them? If you do not want to use paper any longer, you might wonder what alternatives exist. One possibility is to use radio- or WLAN-based variants. Our most flexible solution is called EVOS interactive EVOS is the abbreviation for Electronic Voting System. It combines G+B i-nteraktiv, using modern ipod touches, with our established and successful registration and voting tools. Where can you find them? Haubrok Corporate Events GmbH, Germany s second biggest supporter of shareholders meetings, and Gahrens + Battermann, one of the leading supplier of technical media equipment in Germany, are partners for using this techno logy at upcoming AGMs. We have an exclusive cooperation for this use. At the German Equity Forum you can get a first impression of this powerful combined system in a conference environment. You can get an ipod touch at the entrance area of the investor conference (upper level) that is exclusively con - nected to your person. German Equity Forum ahead Check out the Eigenkapitalforum App on the ipod touch screen (if you prefer, you can download this App from the App Store to your personal iphone, too). There you can find all relevant information about the German Equity Forum. You can access the complete program and arrange your personal schedule. So you will not miss any interesting events. Furthermore, you can find basic information about all presenting companies and more detailed information about capital seeking companies and their representatives. Additionally you can view floor plans of the entire exhibition and conference area to find the interesting events you would like to attend. Additionally, you can use the evaluation function and vote real-time on the quality of each speech and presentation at Torsten Fues, Haubrok Corporate Events Dirk Hesse, Gahrens + Battermann the investor conference and any other forum. Those func - tions are comparable to the voting functions in a share - holders meeting, though naturally at Germany Equity Forum the rule is One vote per head instead of One vote per share. Check it out You can get an idea of voting in a shareholders meeting from the images. At the beginning you see the company logo, then the voting screen appears and the agenda item to be voted on is described at the top of the screen. Then you decide whether you are for or against the proposal by touching the Yes or No button. You can change your vote until you send it. That is done by touching the tick. The vote then is finally transferred into the voting report and a receipt is shown. Conclusion There is no question that paper based variants of voting are in the majority. However, environmental arguments such as sustainability are becoming more important and electronic voting systems are becoming simpler to use and more and more attractive, these systems clear the way. Most people get used to such tools. They are the future, and we are proud to be part of it. Page 24 Deutsches Eigenkapitalforum Fall 2010