Germany Real Estate An attractive niche player with potential We initiate coverage on with a Buy rating and a TP of EUR 4.90. We regard the company as an attractive niche player in the German residential sector. AG was founded in 1990, IPOed in 1998 and started a strategic reorientation in 2010 with new strategic key investors, which supported and funded the build-up of a residential property holding company. The growth path gained momentum since 2012 and WEG increased the number of own residential units from ~1,600 to currently ~7,000 units. Based on the existing platform, the company plans to increase the portfolio to 20,000-30,000 units over the next years. The acquisition and management track record is already established and provides a promising outlook for further growth. Portfolio size is increasing with attractive yields: The current 7,000 unit portfolio (EUR 320mn market value) was mainly build up over the past two years and the current yield is at 7.8% at a vacancy rate of 7%. In terms of regions, Berlin (30%), Eastern Germany (50%) and Lower Saxony (11%) are the key locations. The acquisition of 5,400 units was done at an attractive initial yield of 9.2% (weighted avg.), despite the fact that portfolios have not a major maintenance backlog and are typically in a good state of repair. Combination of portfolio growth, high yields and low financing costs is driving the profitability strongly. Given the 7.8% rental yield, financing costs of 3.2% and potential scale effects from additional investments, we expect a strong increase in profitability. In terms of FFO yield on NAV, we estimate an increase from 2.9% for FY14E to 6.7% for 2016E. TP of EUR 4.90 with upside potential of above 30% on a 12M horizon. WEG shares are trading at a discount of 14% to our 2014E NAV and 28% to our 2015E NAV. At our TP, the company would be still valued with a discount of 5% on 2015E NAV. Even if we assume a further conservative portfolio growth because a capital injection for financing has to be resolved first (AGM on 13 June with proposal of up to 40mn new shares), the NAVps growth will be strong in our view (2013-2016E: +18% p.a.). 2012 2013 2014E 2015E 2016E Gross rental income (EUR mn) 10.5 18.0 25.3 37.2 45.0 EBITDA (EUR mn) 2.9 6.4 10.8 19.5 26.5 Net income (EUR mn) 4.3 17.8 22.2 24.6 24.1 EPS adjusted (EUR) 0.01 0.03 0.12 0.26 0.38 EPS reported (EUR) 0.22 0.77 0.80 0.80 0.72 FFO per share (EUR) -0.01 0.03 0.12 0.27 0.39 DPS (EUR) 0.00 0.00 0.00 0.09 0.13 NAV per share (EUR) 2.74 3.59 4.29 5.11 5.83 NAV prem./discount (%) -19.5-10.2-13.8-27.6-36.5 P/E adjusted (x) 221.0 107.3 30.8 14.2 9.7 Dividend yield (%) 0.0 0.0 0.0 2.4 3.5 FFO yield (%) -0.4 1.0 3.3 7.3 10.5 Implied yield (EBITDA/EV) (%) 2.5 3.1 3.0 4.4 5.5 ROCE (%) 2.3 3.3 3.2 3.9 4.4 Net loan-to-value (%) 57.0 56.9 61.7 63.9 63.1 Source: Company data, Baader Bank AG Equity Research Buy (Initiation of Coverage) Closing price as of 11-Jun-14 EUR 3.70 High/Low (12M) 3.74/2.97 Target price (prev. EUR -) EUR 4.90 Upside to target price (%) 32.4 Expected dividend yield (%) 0.0 Total return potential (%) 32.4 Risk category 1 Reuters/Bloomberg WEG1.DE/WEG1 GY Avg. daily turnover (EUR mn) 0.0 Free float (%) 22.7 Market cap. (EUR mn) 111 No. of shares issued (mn) 30.1 incl. contr. in kind capital increases (1H14E) Events Annual general meeting 13-Jun-2014 1H/2Q Aug-2014 Shareholders Wecken & Cie 46.5%, Quartenal Invest 20.6%, Lechner 10.2% Price relative to Index 4 3 2 1 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 DAX Source: Thomson Reuters Performance (%) 1M 3M 6M Absolute 4.5 5.7 4.2 rel. DAX 0.7-1.2-5.4 rel. EURO STOXX 50 1.2-0.6-7.4 rel. SXXP Real Estate 1.6-1.9-12.9 Changes in estimates 2014E EUR mn (prev.) Rental income FFOps (EUR) NAVps (EUR) Delta (%) Analyst: Andre Remke, CFA +49 89 5150 1816 andre.remke@baaderbank.de 2015E (prev.) Delta (%) Important disclosures: Please read information on the last pages of this report 1
Key data Germany Real Estate Reuters: WEG1.DE Buy Bloomberg: : WEG1 GY Price on 11-Jun-14 EUR 3.70 Target price EUR 4.90 High/Low (12M) EUR 3.74/2.97 Market cap. EUR mn 111 Company profile is a residential real estate company with a standing portfolio of currently approx. 7,000 units. Revenue by segment Margin trends Adj. ROCE and sales growth EUR 1.00 0.75 0.50 0.25 0.00-0.25-0.50 Gearing Saxony/ Saxony- Anhalt/ Thuringia 35% Residential 100% Lower Saxony 11% Brandenburg 10% Rhineland- Palatinate 7% Mecklenburg- W. Pomerania 5% NRW 3% Berlin 29% -0.75 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E Direct investment result (EPS adj.) Indirect investment result 100% 80% 60% 40% 20% 0% 2008 2009 2010 2011 2012 2013 2014E 2015E 2016E Net LTV Interest cover (RS) Source: Company data, Thomson Reuters, Datastream, Baader Bank AG Equity Research Analyst: Andre Remke, CFA +49 89 5150 1816 andre.remke@baaderbank.de 3.0 2.5 2.0 1.5 1.0 0.5 0.0 FY 31 Dec. 2011 2012 2013 2014E 2015E 2016E Share data EPS adjusted (EUR) -0.17 0.01 0.03 0.12 0.26 0.38 Indirect investment result (EUR) 0.23 0.21 0.75 0.68 0.53 0.34 EPS reported (EUR) 0.06 0.22 0.77 0.80 0.80 0.72 FFO (EUR) -0.16-0.01 0.03 0.12 0.27 0.39 Cash earnings (EUR) -0.17 0.00 0.05 0.12 0.27 0.39 Dividend (EUR) 0.00 0.00 0.00 0.00 0.09 0.13 Book value (EUR) 2.01 2.36 3.15 4.52 5.10 5.17 NAV adj. (EUR) 2.50 2.74 3.59 4.29 5.11 5.83 Number of shares (outstanding; mn) 11.4 18.7 24.1 30.1 31.6 35.5 Share price (avg./current; EUR) 2.41 2.21 3.23 3.70 3.70 3.70 Market cap. (avg./current; EUR mn) 31.2 39.9 73.8 111.4 117.0 131.3 Enterprise value (EUR mn) 80.2 117.3 205.8 366.8 449.4 498.4 Valuation P/E adj. (x) -14.0 221.0 107.3 30.8 14.2 9.7 FFO yield (%) -6.8-0.4 1.0 3.3 7.3 10.5 Cash earnings yield (%) -7.0 0.1 1.6 3.3 7.3 10.5 Dividend yield (%) 0.0 0.0 0.0 0.0 2.5 3.5 Implied yield (EBITDA/EV) (%) 1.4 2.5 3.1 3.0 4.4 5.5 P/NAV (x) 0.96 0.80 0.90 0.86 0.72 0.63 P/BV (x) 1.20 0.94 1.03 0.82 0.72 0.72 EV/EBIT (x) 22.9 14.7 7.8 10.9 11.2 11.8 EV/CE (x) 0.84 0.81 0.88 0.86 0.84 0.83 ROCE/WACC adj. (x) 0.17 0.40 0.60 0.62 0.79 0.90 (EV/CE)/(ROCE/WACC) (x) 5.00 2.01 1.48 1.39 1.06 0.92 Key company data Rental income growth (%) -2.4 13.3 71.0 40.6 47.2 20.9 EBITDA growth (%) -14.9 164.6 120.1 69.5 79.4 36.1 FFO growth (%) 111.5-92.1-526.9 382.2 142.7 56.9 FFO per share growth (%) 94.6-94.7-458.0 299.3 118.6 44.3 DPS growth (%) n.a. n.a. n.a. n.a. n.a. 39.8 EBITDA margin adj. (%) 11.0 27.2 35.0 42.5 52.0 58.6 NOI margin (%) 43.1 50.2 50.5 59.1 64.1 69.1 ROE recurring (%) -7.7 0.4 0.8 2.4 5.0 7.0 ROCE adj. (%) 0.9 2.3 3.3 3.2 3.9 4.4 Net gearing (x) 1.7 1.6 1.7 1.9 2.1 2.0 Net loan-to-value (%) 54.3 57.0 56.9 61.7 63.9 63.1 Net debt/ebitda 44.8 26.4 20.8 23.5 17.1 13.9 Equity ratio (%) 28.7 32.5 30.8 31.6 30.0 30.5 Interest cover (x) 0.3 1.0 1.2 1.5 1.8 2.1 Income statement (EUR mn) Total revenues 9.7 10.8 18.2 25.5 37.4 45.2 Gross rental income 9.3 10.5 18.0 25.3 37.2 45.0 Net rental income 4.0 5.3 9.1 14.9 23.9 31.1 Profit on disposal of investment properties 0.0 0.0 0.0 0.0 0.0 0.0 Profit on disposal of trading prop./developm. 0.0 0.0 0.1 0.0 0.0 0.0 EBITDA 1.1 2.9 6.4 10.8 19.5 26.5 Valuation result 2.5 5.9 20.2 22.9 20.9 15.7 EBIT 3.5 8.0 26.2 33.6 40.2 42.1 Net financial result -3.5-3.0-4.8-7.2-10.5-12.5 EBT 0.2 5.0 21.3 26.4 29.6 29.4 EBT adjusted -2.1 0.0 0.7 3.5 8.7 13.7 Taxes 0.6-0.9-3.4-4.2-5.0-5.3 Net profit before minorities 0.8 4.1 17.9 22.2 24.6 24.1 Minorities -0.1 0.2-0.1 0.0 0.0 0.0 Net profit after minorities 0.7 4.3 17.8 22.2 24.6 24.1 Direct investment result -2.2 0.2 0.6 3.2 8.1 12.9 Indirect investment result 2.9 4.1 17.2 18.9 16.4 11.3 Funds from operations (FFO) -2.1-0.2 0.7 3.4 8.3 13.1 Balance sheet (EUR mn) Investment property 89.3 135.5 230.7 412.5 519.1 580.2 Other fixed assets 0.4 0.3 0.3 0.3 0.3 0.3 Intangible assets (incl. Goodwill) 0.0 0.0 0.0 0.0 0.0 0.0 Financial assets 1.8 1.8 0.0 0.0 0.0 0.0 Other non-current assets 1.1 0.3 0.9 1.2 1.2 1.2 Non-current assets 92.5 137.8 231.9 414.0 520.6 581.7 Inventories/Assets held for sale 4.4 4.8 9.9 6.5 6.5 6.5 Other receivables and assets 0.7 1.6 1.5 1.8 1.8 1.8 Cash and equivalents 2.5 5.4 4.0 9.6 10.6 12.9 Current assets 7.6 11.8 15.5 17.9 18.8 21.2 Total assets 100.1 149.6 247.4 431.9 539.5 602.9 Equity 28.7 48.7 76.1 136.5 161.6 183.6 Interest bearing debt 51.5 82.8 136.0 265.0 343.0 380.0 Other non-current liabilities 11.7 12.7 15.7 20.0 24.4 28.8 Other current liabilities 8.2 5.5 19.5 10.4 10.4 10.4 Total equity and liabilities 100.1 149.6 247.4 431.9 539.5 602.9 Net debt 49.0 77.3 132.0 255.4 332.4 367.1 Cash flow (EUR mn) Cash generated from operations 0.6 1.8 8.1 5.2 20.0 27.3 Net interest/tax payments -3.4-2.7-5.6-7.1-10.4-12.4 Cash flow from operating activities -2.8-0.9 2.6-1.9 9.5 14.8 Cash flow from investing activities 0.0-40.6-61.3-159.0-85.8-45.4 Free cash flow -2.8-41.5-58.7-160.9-76.2-30.6 Proceeds from issue of share capital/bonds 2.4 15.8 5.8 38.2 0.6 0.8 Dividend paid 0.0 0.0 0.0 0.0 0.0-2.9 Cash flow from financing activities 4.0 44.4 58.3 167.2 78.6 34.9 Changes in cash position 1.3 3.0-0.4 6.3 2.3 4.3 Cash/cash equivalent at period end 2.5 5.4 4.5 9.6 10.6 12.9 48
Disclaimer GENERAL STATEMENTS Our recommendations are based on information that has been diligently compiled by us and is partially based on publicly available sources of third parties believed to be reliable. We do not warrant the accuracy or completeness of such information of third parties. All estimates and opinions included herein represent the independent judgment of the responsible analysts of Baader Bank AG as of the date of publication of this analysis. We reserve the right to modify the views expressed herein at any time without notice. Moreover, we reserve the right not to update this information or to discontinue it altogether without notice. Neither Baader Bank AG nor any of its authorized representatives or employees nor any other person accepts any liability whatsoever for any loss arising from any use of this document or its contents or otherwise arising in connection therewith. This analysis is for information purposes only and (i) does not constitute or form part of any offer for sale or subscription of or solicitation of any offer (i) to buy or subscribe for any financial instrument, money market or investment instrument or any security; (ii) it is not intended as such an offer for sale or subscription of or solicitation of an offer to buy or subscribe for any financial instrument, money market or investment instrument or any security and (iii) is not an advertisement thereof. The investment opportunities discussed in this analysis may not be suitable for certain investors depending on their specific investment objectives and timetable for such investment or in the context of their overall financial situation and should not substitute advice from an investment advisor and tax advisor. Investors must make their own determination of the appropriateness of an investment in any instruments referred to herein based on the merits and risks involved, their own investment strategy and their legal, fiscal and financial position. As this document does not qualify as an investment recommendation or as a direct investment recommendation, neither this document nor any part of it shall form the basis of, or be relied on in connection with or act as an inducement to enter into, any contract or commitment whatsoever. The investments discussed herein may fluctuate in price or value and may result in losses. Changes in rates of exchange may have an adverse effect on the value of investments. Furthermore, past performance is not necessarily indicative of future results. In particular, the risks associated with an investment in the relevant financial, money market or investment instrument or security are not explained in their entirety. This analysis is being distributed by electronic and ordinary mail to professional investors, who are expected to make their own investment decisions without reliance on this analysis. Transmission or reproduction of this document without prior written consent from Baader Bank AG is not permitted. Copyright : Published by Baader Bank AG, Weihenstephaner Strasse 4, 85716 Unterschleissheim, Germany. Baader Bank AG is a stock corporation (Aktiengesellschaft) organized under the laws of the Federal Republic of Germany with its principal place of business in Munich. It is registered with the District Court (Amtsgericht) in Munich under No. HRB 121537 and supervised by the German Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht BaFin), Marie-Curie-Strasse 24-28, 60439 Frankfurt am Main and Graurheindorfer Strasse 108, 53117 Bonn. The value added tax identification number of Baader Bank AG is DE 114123893. POTENTIAL CONFLICTS OF INTERESTS Section 34b of the German Securities Trading Act (Wertpapierhandelsgesetz) in conjunction with the German Financial Analysis Regulation ( 5 Section 4 No. 3 Finanzanalyseverordnung) requires Baader Bank AG to disclose potential conflicts of interest with respect to the company that is the subject of the analysis. The following paragraph first indicates which conflicts of interest may be applicable regarding a specific company and subsequently sets forth a list of all possible keys pursuant to the German Financial Analysis Regulation. Please note that the list of possible keys is only for explanatory purposes and that solely the potential conflicts set forth under Applicable Key(s) might be present with respect to the specific company. Applicable Key(s) adidas 4; Adler Modemärkte 4, 5; Ahold 4; AIXTRON 4; Allgeier 4, 5; alstria office REIT 4; AMAG 4; ams 4; ANDRITZ 4; ASML 4; Atrium 4; Aurubis 4; BayWa 4; Beiersdorf 4; BMW 4; CA Immo 4; Carrefour 4; Continental 4; conwert 4, 5; Daimler 4; Dassault Systèmes 4; Deutsche EuroShop 4; Deutsche Wohnen 4; Dialog Semiconductor 4; DIC Asset 4, 5; DMG MORI SEIKI 4; Dufry 4; Dürr 4; Fielmann 4; GAGFAH 4; GEA Group 4; GERRY WEBER 4; GRAMMER 4, 5; Heidelberger Druck 4; Henkel 4; HUGO BOSS 4; IMMOFINANZ 4, 5; Infineon 4; Jenoptik 4; Jungheinrich Pref. 4; KION Group 4; Klöckner & Co 4; Krones 4; KUKA 4; LEONI 4; METRO 4; Micronas 4; Nabaltec 4, 5; Nemetschek 4; NORMA Group 4; OSRAM 4; PATRIZIA Immobilien 4; Prime Office 4, 5; PSP Swiss Property 4; PUMA 4; Rational 4; REALTECH 4; RHI 4; Salzgitter 4; SAP 4; Schoeller-Bleckmann Oilfield Equipment (SBO) 4; Semperit 4; SGL CARBON SE 4; Siemens 4; Sixt 4; SKW Metallurgie 4; Software AG 4; STMicroelectronics 4; Süss MicroTec 4; Swiss Prime Site 4; TAG Immobilien 4; Temenos 4; ThyssenKrupp 4; TOM TAILOR 4; Valora 4; VIB Vermögen 3, 4, 5; voestalpine 4; Volkswagen Pref. 4; VTG 4; 3, 4, 5; Wienerberger 4; Wirecard 4; Zumtobel 4 Key 1: Baader Bank AG and/or a company affiliated with it own at least 1% of the capital stock of the company that is the subject of the analysis. Key 2: The company that is the subject of the analysis owns at least 1% of the capital stock of Baader Bank AG and/or a company affiliated with it. Key 3: Baader Bank AG and/or a company affiliated with it participated in leading a consortium for the public issuance of securities of the company that is the subject of the analysis within twelve months preceding the publication of the analysis. Key 4: Baader Bank AG and/or a company affiliated with it acts as a market maker or liquidity provider in the securities of the company that is the subject of the analysis or in derivatives relating thereto or is otherwise in charge to quote bids and request prices for the securities issued by the company that is the subject of the analysis on the relevant stock exchange or market. Key 5: The company that is the subject of the analysis and Baader Bank AG and/or a company affiliated with it concluded an agreement for services in connection with investment banking transactions in the twelve months prior to this analysis, for which Baader Bank AG received a fee. Key 6: The company that is the subject of the analysis and Baader Bank AG and/or a company affiliated with it have concluded an agreement for the preparation of an analysis. Key 7: Employees of Baader Bank AG and/or a company affiliated with it are members of the board of directors of the company (or equivalent management and supervisory organs under applicable law) that is the subject of the analysis. Members of the board of directors (or equivalent management and supervisory organs under applicable law) of the company that is the subject of the analysis sit on the management board and/or supervisory board of Baader Bank AG and/or a company affiliated with it. Key 8: The responsible analysts of Baader Bank AG sit on the supervisory/management board of the company that is the subject of the analysis. Key 9: The responsible analysts of Baader Bank AG own a significant amount or at least 0.1% of the capital stock of the company that is subject of the analysis. Key 10: The responsible analysts of Baader Bank AG disclosed a draft of the analysis to the company that is the subject of the analysis for fact reviewing purposes and changes were made to the analysis before publication. Key 11: Baader Bank AG and/or a company affiliated with it may hold significant open derivative positions in the stocks of the company that is the subject of the analysis which are not delta-neutral. 49
RECOMMENDATIONS, RATINGS AND EVALUATION METHODOLOGY Financial analyses with recommendation changes (rating or target price) published in the twelve months prior to the publication of this financial analysis covering the same financial instruments or issuers. price chart Percentage of companies within this rating category Buy: 52.4% Hold: 41.6% Sell: 6.0% Baader Bank AG and/or a company affiliated with and/or employees or clients may take positions in, and may purchase and/or sale the securities or related financial instruments as principal or agent. Rating categories: The following is an explanation of the ratings, if any, included in this document. Interpretation matrix per risk category for each rating: Expected total return based on forecast dividend and 12-month price targets. Risk category Rating 1 2 Buy >10% >15% Hold 0% to 10% 0% to 15% Sell <0% <0% Research ratings key: There are three possible ratings: Buy, Hold or Sell. For each rating there is a different forecast total return, expressed as a percentage, according to the classification of the company in one of the two investment categories into which the universe of companies covered by Baader Bank AG is divided. Stocks are allocated to the category 2 if, in the opinion of the responsible analyst, investors would require a higher return from that share. Reasons for such an allocation include, but are not limited to low liquidity of the shares, high risk or volatile cash flows, unproven business model or start-up company, corporate governance, high risk balance sheet structure. Examples of certain ratings: Buy / category 2: a company that the analyst deems higher risk with a forecast dividend yield of 5% and price appreciation potential of 15% generating a forecast total return of 20% over 12 months. Hold / category 1: a company with a forecast dividend yield of 7% and price appreciation potential of -5% generating a forecast total return of +2% over 12 months. We employ three further categorizations for stocks in our coverage: Restricted: A rating and/or financial forecast and/or target price is not disclosed due to compliance or other regulatory considerations such as blackout period or conflict of interest. Coverage in transition: Due to changes in the research team, the disclosure of a stock's rating and/or target price and/or financial information are temporarily suspended. The stock remains in the research universe and disclosures of relevant information will be resumed in due course. Not rated: Suspension of coverage. Valuation methodology Company valuations are based on the following valuation methods: Multiple-based models (P/E, P/cash flow, EV/sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer-group comparisons, historical valuation approaches, discount models (DCF, DVMA, DDM), break-up value approaches or assetbased evaluation methods. Furthermore, recommendations are also based on the economic profit approach. Valuation models are dependent on macroeconomic factors, such as interest rates, exchange rates, raw materials, and on assumptions about the economy. Furthermore, market sentiment affects the valuation of companies. The valuation is also based on expectations that might change rapidly and without notice, depending on developments specific to individual industries. Our recommendations and target prices derived from the models might therefore change accordingly. The investment ratings generally relate to a 12-month horizon. They are, however, also subject to market conditions and can only represent a snapshot. The ratings may in fact be achieved more quickly or slowly than expected, or need to be revised upward or downward. Frequency of reports and updates It is intended that each of these companies be covered at least once a year, in the event of key operations and/or changes in the recommendation. DECLARATION OF RESPONSIBLE ANALYSTS The remuneration of the responsible analysts has not been, and will not be, dependent on the recommendations or views expressed in this analysis, neither directly nor indirectly. ORGANIZATIONAL ARRANGEMENTS TO AVOID AND PREVENT CONFLICTS OF INTEREST In order to proactively prevent conflicts of interest, Baader Bank AG has established a compliance program. Such compliance program includes, among other things, confidentiality measures through separation, or so called Chinese walls. These could be virtual or physical barriers to limit the flow of information between different departments, groups or individuals within the bank. The compliance program is monitored by Baader Bank AG's compliance department. 50
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Notice to Investors in the Netherlands This document and the information provides therein is wholly indicative, and for information purposes only and constitutes neither an offer (or part thereof) to purchase or otherwise acquire or an invitation to make an offer to purchase or otherwise acquire any securities or other financial instruments (both within the meaning of the Netherlands Financial Markets Supervision Act (Wet op Het Financieel Toezicht) (the "Act") nor an investment advise or investment recommendation. This document is directed to and intended solely for use by qualified investors (gekwalificeerde beleggers) as such term is defined in the Act. The content of this document which have not been registered with or approved by any regulatory body in the Netherlands, is confidential and its contents may not be reproduced, re-distributed or copied in whole or in part for any purpose whatsoever without the express authority of Baader Bank AG. 51
Notice to Investors in Spain This document does not constitute or form part of any offer, invitation, recommendation or request to make any operation with financial instruments and neither must be considered as base for the taking of investment decisions. This document is confidential and is being supplied to you solely for information purposes and may not be reproduced, distributed, redistributed or passed on to any other person or published, in whole or part, for any purpose. This document should be made available in Spain solely to investors qualified as professional investors (within the meaning of Spanish Securities Market Act 24/1988, Article 78 bis). The information contained in this document has been obtained from reliable sources. Notwithstanding the above, we may not result responsible for any inaccurateness of it. Any opinion, comment, financial analysis, market forecast or any other information in this regard is not binding for Baader Bank AG, which is not deemed responsible for the opinions or ideas exposed. Likewise, any opinion hereby exposed could change without prior notice. The investor must take into account that financial markets are fluctuant and thus, are subject to variations. The value of the investment may fall as well as rise and the investor could not get back the original investment. Exchange rate movements may increase or decrease the investment value and change, direct or indirectly, the performance of the financial products. Past performances are not guarantee of future performances. Prior to make any operation with financial instruments, it is highly advisable to obtain further information, make the relevant comparisons and request professional advisory in this regard. Notice to Investors in Sweden The information contained herein shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of the securities referred to herein and it is not a prospectus under Swedish law and it is not subject to any registration or approval requirements in Sweden. Accordingly, the information has not been, nor will it be, registered or approved by Swedish Financial Supervisory Authority (Sw. Finansinspektionen) under the Swedish Financial Instruments Trading Act (1991:980), nor any other Swedish Act. No securities will be offered or sold to any investor in Sweden except in circumstances that will not result in a requirement to prepare a prospectus in accordance with the Swedish Financial Instruments Trading Act (1991:980). Notice to Investors in Switzerland This document is for your personal information only and is not an offer or a solicitation of an offer to buy or sell any investment in the company described or other specific product nor does it constitute a prospectus in the sense of art. 652a of the Swiss Federal Code of Obligations (CO), of art. 1156 CO or a key investor information document in the sense of art. 76 of the Swiss Federal Act on Collective Investment Schemes (CISA). It cannot be excluded that Baader Bank AG or one of its subsidiaries, one of their products or any of their employees have a long or short position or deal as principal or agent in any of the securities issued by or linked to this company or provide advisory or other services to it. Opinions expressed herein may differ or be contrary to those expressed by other business areas of Baader Bank AG or of any of its subsidiaries as a result of using different assumptions. Notice to Investors in the United Kingdom This communication is directed to persons who (i) have professional experience in matters relating to investments or (ii) are persons falling within Article 49(2)(a) to (d) ( high net worth companies, unincorporated associations, etc. ) of the United Kingdom Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 or (iii) to whom it may otherwise lawfully be communicated (all such persons together being referred to as relevant persons ). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. Notice to Investors in the United States Baader Bank AG is the issuer of this report. The report is distributed in the US, as an affiliate research, by Helvea Inc. Baader Bank AG is not a member of the Financial Industry Regulatory Authority ( FINRA ), and therefore Baader Bank AG, its employees and the research analyst who prepared this report are not subject to FINRA Rule 2711. Rule 2711 applies only to Helvea Inc. As a member of FINRA and the Securities Investor Protection Corporation ( SIPC ), Helvea Inc. accepts responsibility under applicable laws for the content of this report when it distributes the report in the United States. Additional information on this report is available upon request. This report is circulated on a distribution only basis, and is not done under an arrangement pursuant to Rule 15a-6 (a) (3) of the Exchange Act of 1934, as amended (the Exchange Act ). Therefore Baader Bank AG is not authorized to solicit and effect transactions with U.S. investors relating to this research. Orders may be given directly to Helvea Inc. only, and these trades will be executed in accordance with Helvea Inc s Terms of Business using Helvea Inc s existing set-up. The research is not provided pursuant to a soft-dollar arrangement with the U.S. Investor and Baader Bank AG. Apart from the conflicts mentioned in the earlier section of this document, Helvea Inc. and Baader Bank AG are not aware of any other actual or material conflicts of interest at the time of distribution of the research report. This document is not, and under no circumstances is to be construed as, a general solicitation of an offer to buy, an offer to sell or a public offering of the securities described herein in the United States. Each U.S. recipient of this report represents and agrees, by virtue of its acceptance thereof, that it is such a major U.S. institutional investor or registered broker-dealer or bank and that it understands the risks involved in executing transactions in such securities. A major U.S. institutional investor is a person that is (a) a U.S. institutional investor (defined below) that has, or has under management, total assets in excess of USD 100mn; provided, however, that for purposes of determining the total assets of an investment company under this rule, the investment company may include the assets of any family of investment companies of which it is a part; or (b) an investment adviser registered with the SEC that has total assets under management in excess of USD 100mn. A U.S. institutional investor is a person that is (a) an investment company registered with the SEC; (b) a bank, savings and loan association, insurance company, business development company, small business investment company, employee benefit plan, private business development company, or trust defined in Regulation D under the U.S. Securities Act of 1933 (the Securities Act ); or (c) an organization described in Section 501(c)(3) of the U.S. Internal Revenue Code of 1986, as defined in Regulation D. Qualified Institutional Buyer means any of the following entities that in the aggregate owns and invests on a discretionary basis at least USD 100mn in securities of issuers that are not affiliated with the entity; (a) an insurance company as defined in Section 2(13) of the Securities Act; (b) an investment company registered under the Investment Company Act; (c) any small business investment company licensed by the U.S. Small Business Administration under the Small Business Investment Act; (d) any plan established and maintained for the benefit of its employees; (e) any employee benefit plan within the meaning of the Employee Retirement Income Security Act; (f) any trust fund whose trustee is a bank or trust company and whose participants are exclusively plans of the types identified in paragraph (d) or (e) herein; (g) any business development company as defined in Section 202(a)(22) of the Investment Advisers Act; (h) any organization described in Section 501(c)(3) of the Internal Revenue Code; and (i) any investment adviser registered under the Investment Advisers Act. The securities referred to in this report are not registered under the Securities Act, as amended, and the issuer of such securities may not be subject to U.S. reporting and/or other requirements. Available information regarding the issuer of such securities may be limited and such issuer may not be subject to the same auditing and reporting standards as U.S. issuers. 52
Contacts Volker Bosse, CEFA Tim Dawson Andre Remke, CFA Gerhard Schwarz, CEFA Co-Head Equity Research Co-Head Equity Research Co-Head Equity Research Head of Equity Strategy +49 89 5150 1815 +41 22 354 9169 +49 89 5150 1816 +49 89 5150 1812 volker.bosse@baaderbank.de tdawson@helvea.com andre.remke@baaderbank.de gerhard.schwarz@baaderbank.de EQUITY RESEARCH Automobile & Parts Klaus Breitenbach +49 69 1388 1961 klaus.breitenbach@baaderbank.de Business Services & Logistics Chris Burger, CFA +41 43 388 9259 cburger@helvea.com Construction Patrick Appenzeller +41 43 388 9267 pappenzeller@helvea.com Consumer Retail & Consumer Volker Bosse, CEFA +49 89 5150 1815 volker.bosse@baaderbank.de Food & Beverage, Luxury Goods Andreas von Arx +41 43 388 9257 avonarx@helvea.com Home & Personal Care Christian Weiz +49 89 5150 1808 christian.weiz@baaderbank.de Financials Banks & Financial Services Tim Dawson +41 22 354 9169 tdawson@helvea.com Insurance Daniel Bischof, CFA +41 43 388 9263 dbischof@helvea.com Health Care Biotechnology, Pharmaceuticals Olav Zilian, MD Ph.D +41 22 354 9167 ozilian@helvea.com Pharmaceuticals Odile Rundquist, Ph.D +41 22 354 9159 orundquist@helvea.com Industrials Industrials (Switzerland) Reto Amstalden +41 43 388 9261 ramstalden@helvea.com Stefan Gächter, CFA +41 43 388 9262 sgaechter@helvea.com Industrials (Austria) Christine Reitsamer, CFA +49 89 5150 1811 christine.reitsamer@baaderbank.de Machinery (Germany) Peter Rothenaicher +49 89 5150 1817 peter.rothenaicher@baaderbank.de Real Estate Andre Remke, CFA +49 89 5150 1816 andre.remke@baaderbank.de Christine Reitsamer, CFA +49 89 5150 1811 christine.reitsamer@baaderbank.de Small & Mid Caps Christian Weiz +49 89 5150 1808 christian.weiz@baaderbank.de Steel & Metals Christian Obst, CEFA +49 89 5150 1805 christian.obst@baaderbank.de Technology Software & IT Services Knut Woller, CEFA +49 89 5150 1807 knut.woller@baaderbank.de Technology Hardware Guenther Hollfelder, CFA +49 89 5150 1806 guenther.hollfelder@baaderbank.de EQUITY STRATEGY Gerhard Schwarz, CEFA +49 89 5150 1812 gerhard.schwarz@baaderbank.de Heinz Imbacher +49 89 5150 1018 heinz.imbacher@baaderbank.de EQUITY SALES DERIVATIVES SALES EQUITY SALES TRADING Frankfurt +49 69 1388 1357 Munich +49 89 5150 1845 Frankfurt 49 69 1388 1355 Geneva +41 22 354 9050 Geneva +41 22 354 9100/9191 London +44 20 7054 7100 London +44 20 7054 7100 Munich +49 89 5150 1850 Munich +49 89 5150 1870 Zurich +41 43 388 9200 New York +1 212 935 5150 For North American clients: New York +1 212 935 5150 Montreal +1 514 288 3556 PUBLICATION ADDRESSES Baader Bank AG Helvea SA Equity Research Equity Research Weihenstephaner Strasse 4 Rue de l Arquebuse 7 85716 Unterschleissheim, Germany P.O. Box 5552 1211 Geneva 11, Switzerland T +49 89 5150 1810 T + 41 22 354 9050 53