Industrials Compendium - UniCredit

11

2013

November 2013

Industrials Compendium

Economics, FI/FX & Commodities ResearchCredit Research Equity Research Cross Asset Research

“Complacency never pays”

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November 2013 Credit Research

Sector Report Industrials

UniCredit Research page 2 See last pages for disclaimer.

Contents 3 Strategy Outlook 2014

5 Investment Recommendations

8 New Supply

10 M&A

11 Rating Trend

12 Basic Ressources

12 Mining

14 Steel

16 Pulp & Paper

18 Chemicals

22 Building Materials and Constr.

25 Industrial Goods & Services

25 Aerospace & Defense

27 Capital Goods

29 Industrial Transportation

32 Packaging

Credit Profile Overviews

34 Basic Ressources

35 Mining

36 Anglo American

38 BHP Billiton

40 Glencore Xstrata

43 Steel

44 ArcelorMittal

46 ThyssenKrupp

48 voestalpine

51 Paper

52 Lecta Group

54 Mondi

56 Norske Skog

58 Sappi

60 Stora Enso

62 Chemicals

64 Air Liquide

66 AkzoNobel

68 Arkema

70 BASF

72 Brenntag

74 Clariant

76 DSM

78 Evonik

80 INEOS

82 K+S

84 Kerling

86 Lanxess

88 Linde

90 Solvay

92 Styrolution

94 Syngenta

96 Construction & Materials

98 Bouygues

100 Buzzi Unicem

102 CRH

104 HeidelbergCement

106 Holcim

108 Italcementi

110 Lafarge

112 Saint-Gobain

114 Vinci

116 Wienerberger

118 Würth

120 Industrials

121 Aerospace & Defense

122 Bombardier Inc.

124 EADS

126 Finmeccanica

128 Thales

131 Capital Goods

132 ABB

134 Alstom

136 Areva

138 Atlas Copco

140 GEA

142 Schneider Electric

144 Siemens

146 Voith

149 Tollroads

150 Abertis

152 APRR

154 ASFR

156 Avanza

158 BCR

160 COFIROUTE

162 Deutsche Post

164 PostNL

166 SIAS

169 Packaging

170 Ardagh

172 Bormioli Rocco

174 Gerresheimer

176 Guala Closures

178 Rexam

180 Smurfit Kappa

Coverpicture © Daniel Fuhr - Fotolia.com

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Strategy Outlook 2014 2013 proved a solid year for credit but mixed for industrials

2013 added solid performance in credit (iBoxx NFI as of 22 November tightened 14bp or 13% to90bp), although the ongoing expected normalization in the eurozone provided tailwinds in theform of gradually increasing yields. Total returns will thus be lower this year (1.9% YTD),following an exceptional 2012 (10.5%), and probably slightly negative in 2014. This is due to our economists forecasting a yield increase of around 100bp by FYE 2014 (10Y Bund foreseen at 2.8%). When the idea of tapering asset purchases by US Fed Chairman Bernanke was firstintroduced late in May of this year, credit spreads also underwent some stress, but volatility eased considerably over the summer amid improving growth data and reassurance by central banks that interest rates would stay low for a prolonged period beyond the reduction of extrastimulus. Consequently, investor preference was skewed towards riskier assets in terms ofquality (iBoxx NFI BBB +3% YTD) and beta. Cyclically exposed sectors, such as Industrial Goods & Services (IGS 2.9% YTD, driven by periphery-heavy Industrial Transportation) and Construction (CNS, 2.5%), were thus among the best-performing sectors, whereas Basic Resources (BAS, 1.4% YTD) trailed the index. Although BAS is historically also higher beta, the sector had entered this year already without its long-term premium to the index. Chemicals (CHE, 0.75%) extended their underperformance over the course of the year as expected.

Firming of eurozone growth in 2014 expected

In 2014, global growth is expected to accelerate, as eurozone growth gains traction and both the US and China continue to expand. While credit spreads already discount a further increase in growth rates to 1.5% annualized qoq growth next year, the overall supportive environment of improving macroeconomic data, a demand for yield and ample liquidity shouldhelp corporate risk premiums to trend sideways to marginally tighter in 1H14. This isespecially true for the eurozone periphery amid continually positive news. Italy is forecast to exit the recession in 4Q13 after Spain returned to positive growth rates already in 3Q13. A focus on higher carry and periphery exposure thus will likely continue to provide credit investors with attractive returns in 1H14. However, after tapering has taken place (our economists expect the start in 1Q14) and growth data has increased, more spending,investment and M&A will likely characterize company planning in 2H14, as customer demandis forecast to rise. After all, cash levels are elevated and capex-to-sales ratios are subdued.

INDUSTRIAL SECTORS

ASW change in 2013 YTD (22 November) … …and versus iBoxx NFI

0.1

-13.6

-28.1

-29.0

-14.3

-35 -30 -25 -20 -15 -10 -5 0 5

iBoxx € Chemicals

iBoxx € Non-Financials

iBoxx € BasicResources

iBoxx € Construction& Materials

iBoxx € IndustrialGoods & Services

bp

-50

0

50

100

150

200

Jun-

11

Aug

-11

Oct

-11

Dec

-11

Feb-

12

Apr

-12

Jun-

12

Aug

-12

Oct

-12

Dec

-12

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

iBox

x N

FI (b

p)

-100

-50

0

50

100

150di

ffere

nce

to iB

oxx

NFI

(bp)

iBoxx € Non-Financials (LS)IGS diff to iBoxx NFIBAS diff to iBoxx NFICHE diff to iBoxx NFICNS diff to iBoxx NFI

CHE has experienced long period of under-performance to index

Source: Markit, UniCredit Research

With increased growth already reflected in risk premiums, a tough year may come for cyclicals

While we think that M&A will not be a broader, across-the-market theme, it will likely addidiosyncratic risk to portfolios as the next year progresses. Against the background of a two-fold development next year and a much-less-diverse sector universe, in terms of risk premiums (sector chart overleaf), periphery-titled industrial transportation is our favorite going into 2014. After BAS (4bp), IGS (1bp), CNS (flat to the index) have evaporated their already

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scarce premiums to the iBoxx NFI index and are trading well through their historical pick-up since 2007 (IGS 21bp median/22bp average, BAS 42bp median/85bp average, CNS 48median, 50bp average), a marketweight recommendation appears reasonable due to theoverall-firm environment. Meanwhile, the valuation of CHE (23bp discount to the index) hasmoderated, following an extended period of underperformance, and now is in-line with long-term parameters (-24bp median, -26bp average). The current underweight recommendation may thus be changed once the overall-gradual grind to tighter spreads starts to ebb.

IBOXX YTD SECTOR CHANGE (ASW, BP)

Bubble size = market value, per modified duration

UTS

TEL

IGS

ATO

OIG

FOBHCA

RET

PHG

CHE

BASCNS MDI THETAL

0

20

40

60

80

100

120

140

160

3 3.5 4 4.5 5 5.5 6 6.5 7

YTD Current

Source: Markit, UniCredit Research

UNICREDIT CREDIT RESEARCH FULL-YEAR FORECAST

Real GDP (%, yoy) Consumer Prices (%, yoy) Budget Balance (% of GDP) 2012 2013 2014 2012 2013 2014 2012 2013 2014Industrialized countries US 2.8 1.6 2.5 2.1 1.6 2.3 -8.3 -5.8 -4.6Euro area -0.6 -0.3 1.0 2.5 1.5 1.5 -3.7 -3.0 -2.7 Germany 0.9 0.6 1.5 2.0 1.5 1.4 0.2 0 -0.2 France 0 0.2 0.9 2.0 1.0 1.9 -4.8 -4.0 -3.5 Italy -2.4 -1.7 0.6 3.0 1.5 1.8 -3.0 -3.1 -2.3 Spain -1.6 -1.4 0.4 2.4 1.9 1.6 -10.6 -6.5 -6.1 Austria 0.9 0.3 1.8 2.4 1.9 1.8 -2.5 -2.3 -1.7UK 0.2 1.6 3.0 2.8 2.8 2.8 -6.3 -5.9 -4.9Switzerland 1.0 1.8 1.8 -0.7 -0.2 0,7 0.5 0.3 0.3Japan 2.0 2.0 1.3 0 0.2 2.0 -10.6 -10.5 -9.0Developing countries Russia 3.4 1.7 1.8 5.1 6.7 4.9 -0.1 -0.7 -0.7 China 7.8 7.6 7.3 2.7 2.6 3.0 -1.7 -1.8 -1.8

UNICREDIT CREDIT RESEARCH QUARTERLY GDP FORECAST

Real GDP (% qoq, sa) 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14US (annualized) 0.1 1.1 2.5 2.8 2.8 2.6 2.5 2.4 2.4Euro area -0.5 -0.2 0.3 0.1 0.2 0.2 0.3 0.3 0.4 Germany -0.5 0 0.7 0.3 0.4 0.4 0.3 0.3 0.4 France -0.2 -0.2 0.5 -0.1 0.2 0.2 0.3 0.3 0.4 Italy -0.9 -0.6 -0.3 -0.1 0.1 0.2 0.2 0.3 0.4 Spain -0.8 -0.4 -0.1 0.1 0.1 0.1 0.2 0.2 0.3 Austria -0.1 0.1 0 0.2 0.6 0.6 0.4 0.4 0.4UK -0.3 0.4 0.7 0.9 1.0 0.7 0.7 0.6 0.5Switzerland 0.3 0.6 0.5 0.4 0.5 0.4 0.4 0.4 0.4Japan 0.3 1.0 0.9 0.5 1.0 0.8 -0.9 -0.3 0.3Russia 0.2 0.4 0.3 0.4 0.6 0.5 0.2 0.5 0.7China (%, yoy) 7.9 7.7 7.5 7.8 7.5 7.5 7.3 7.2 7.1

Dr. Christian Weber, CFA (UniCredit Bank), +49 89 378-12250, [email protected] Source: UniCredit Research

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November 2013 Credit ResearchSector Report Industrials


Investment Recommendations In the current market environment, nothing seems to be "sexy" anymore. Hence, we

recommend investing in carry (hybrids), higher beta and periphery names. While this also means selectively investing in riskier names, we note that the improving macro picture should support credit development and eventually the strengthening of respective financial profiles. Still, as the year progresses, companies could adopt more-aggressive financial policies as a consequence of the brightening business prospects. This might not bediscounted by current tight spread levels, therefore, aggressive moves might finally trigger spread widening.

Against this background, we outline below our most interesting trade ideas in the sector:

Our top picks/pans in High Grade

■ Abertis remains our key overweight recommendation in the industrial transportation sectorgoing into 2014. Despite its strong performance since our upgrade to overweight with the 2013 outlook, we see room for further tightening of the ABESM cash curve from a potentialrating stabilization towards 1H14. As we think the attractiveness of the coupon step-up protection in the ABESM 5.75% 3/18 bond has diminished (given reduced downgrade risk of HIT Finance's rating (Baa3n) at Moody's on the back of the expected traffic recovery inFrance), we would switch to the ABESM 03/20 from a relative value perspective (though noting lower liquidity of the latter), thereby taking out roughly six points in cash and a pick-up of 25bp in ASW for a 24-month-longer duration.

■ Glencore Xstrata remains our top pick in the mining sector; we prefer it over Anglo American (underweight). We take comfort in the company's diversified business profile (i.e. into marketing operations), the synergy potential from the combination with Xstrata and the prospects of improving cash generation from FY14 (in contrast to our expectations forAnglo). Furthermore, we expect management to handle shareholder remuneration andopportunistic M&A opportunities in accordance with its current ratings. On the cash curve,we prefer the GLENLN 06/17 purely on a spread basis (but which comes admittedly at a high cash price).

■ We have an overweight recommendation on Saint-Gobain issues, which trade at a premium to similarly-rated names in the construction sector, such as Holcim (marketweight). This is based on our expectation that the company will be able to maintainits mid-BBB ratings. While headline (and in this context downgrade) risk remains in the form of the flat glass fine (EUR 1bn), we believe these negative impacts on the creditprofile should be more than compensated for if the operating performance of the company improves as expected. The latter should be supported by gradually improving macroeconomic conditions in Europe and by the company's self-help measures. On the cash curve, we prefer the SGOFP 10/18.

■ In the construction universe, we continue to like CRH, particularly the CRHID 01/19 (from a purely spread-based perspective, as it already trades at a high cash price). The company should benefit in 2014 from a recovery of its operations in Europe, which should boost thegroup's operating performance and help stabilize its credit metrics in line with requirements for the ratings. We also like the management's prudent financial policy.

■ Within the tightly-trading chemicals space, we remain positive on Clariant (CLNVX 01/17). During 2013, the group executed its disposal plans as it found sale agreements for all theidentified non-core businesses. Additionally, the conversion of its convertible bond hasfurther contributed to debt reduction. Moreover, the group's performance has been robust.Lastly, there are signs that Clariant can return to positive free cash flow generation in 2014.

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This should be rewarded by Moody's with a positive outlook on its Ba1 ratings – potentially after 2013 results are released in February – followed by an upgrade to investment grade at a later stage in 2014. At current valuation levels, we think the bond still has tightening potential of around 20bp vs. other Chemical crossover names (Lanxess, Arkema) ifClariant returns to investment grade at Moody's.

■ We keep our underweight recommendation on Post NL. Although pressure on credit metrics has eased during 2013 (Post NL raised its FY13 outlook two times this year), westill see the company at risk of becoming a "fallen angel" without the disposal of the TNT Express stake. Rating agencies opted to look through 2013 but are expecting a cleardeleveraging path from 2014 onwards. Hence, the PNLNA 11/17 looks particularly unattractive vs. CDS but also vs. upper BB rated industrial peers.

■ We stick to our underweight recommendation on Anglo American. Given the burden of ongoing high capex spending, the company's credit metrics will continue to weaken in FY14 and hence reduce the company's financial flexibility to deal with the currently volatilecommodity price environment. Additionally, Anglo continues to face company-specific challenges, such as its high exposure to South Africa and to platinum (where a restructuring is currently in progress).

Our top picks/pans in High Yield

■ We recommend buying the AVAN 06/19. The unsecured AVAN bond offers a yield pick-up of around 210bp vs. the secured bond (despite limited protection by tangible assets, in our view) for a manageable 1.9x higher leverage vs. secured (total net leverage of 5.2x at1H13).

■ In the paper sector, we recommend buying Lecta 05/19. Based on recent industry announcements, we see good chances for structural improvements in the European fine paper industry in 2014 – similar to the progress made in newsprint, and partly in magazines, in 2013 (i.e. stabilizing prices, improving capacity utilization, more balancedsupply/demand). In combination with some relief from lower pulp (BHKP) prices since 2H13 (Lecta operates with the lowest pulp integration in the sector), Lecta's restructuring program and its solid liquidity, we believe the LECTA 8.875% 05/19 offers attractiverisk/reward to investors.

■ We recommend buying Buzzi and prefer the BZUIM 09/18, as we expect the company toreturn to the deleveraging path in 2014. This should be supported by continued robustprospects for Germany, Russia and the US, as well as by a potential recovery in theMexican market (on the back of a new government infrastructure program). Furthermore,savings from the squeeze-out of Dyckerhoff's minority shareholders and efficiency improvements should help the company's operating performance recover.

■ We still recommend buying Bormioli Rocco (BORMIO 08/18). While we acknowledge that 3Q13 results were a disappointment, we still think that investors receive goodcompensation (BORMIO 08/18 trades in line with the ARGID subs) for a business that hasmoderate leverage, maintains an adequate liquidity position, has a robustly performing core business (pharma) and is continuously working on reaping low-hanging fruit. During 2014, there will be some upside for Bormioli's performance from an improvement in macroin southern Europe, but, at this stage, we feel that the environment will remain challenging in the near term.

■ We continue to have a sell recommendation on Ardagh. 3Q13 results were strong and finally brought some positive news on the name. Still, we do not see it as proof of asustainable trend for the better, as fundamentals in Metal remain weak (overcapacities). Furthermore, there remains some uncertainty over the VNA acquisition, and the equity sale was announced – but never executed – before. Therefore, we retain our negative stance

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towards the name. In the capital structure, we think the secured and unsecured 17s(ARGID 06/17; ARGID 10/17) are the most expensive. At current valuation levels, the secured 22s (ARGID 11/22) are reasonably priced even if the VNA acquisition were to gothrough before the put.

■ We recommend selling NSINO 16s and NSINO 17s. Norske Skog secured sufficient funds for the NOK 2014 maturities (following the NOK 250mn asset-backed line signed in November 2013), and the repayment of the bonds is still the "most responsible way of action" for management, compared to a restructuring of the B/S at this point in time.However, we continue to regard Norske's balance sheet as unsustainable given furtherdebt maturities of around NOK 1bn p.a. in 2015/16 and NOK 3.2bn in 2017, continued pressure on FOCF and limited possibilities for further non-core disposals. With EBITDA dropping further in 9M13, we calculate recovery values of between 45% (4.25x EBITDAmultiple) and 55% (asset valuation based on recent disposals in EUR/t of capacity).

■ We stick to our sell recommendation on STERV 03/18 and STERV 03/19 bonds. Credit metrics remain weakly placed for the rating. With continued structural pressure on Stora'sEuropean paper operations and the significant increase in capex in FYs 2014/15 (plus implementation risks related to Stora's large investment projects), we see better value in cement names, such as BZUIM 09/18.

Recommendation changes ■ We downgrade BCR to hold (from buy). We recommend investors take profit, following the solid performance of BRCORO bonds, particularly in 2H13. We regard current spreads of the BRCORO 12/16 as adequately reflecting the 1. improved economic outlook in Portugal, 2. the expected traffic turnaround in 2014 and 3. BCR's improved liquidity following issuance of the EUR 120mn FRN in September 2013.

Hybrids Despite the spread compression in industrial hybrids, we still prefer the following hybrids,while also expressing our fundamental comfort with the issuers:

■ Siemens (SIEGR 09/66)

■ Solvay (SOLBBB 11/49)

Due to relative value reasons, we downgrade the hybrid of Linde (LINGR 07/66) to neutral from buy.

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New Supply New issuance to remain high In view of continued favorable financing conditions, new issuance in the sector is

expected to remain high. Activity will likely focus on the first half of 2014 due to the potentialupcoming increase in interest rates later in the year. Given only few regular issuers in the industrials sector, new supply should mainly stem from refinancing or pre-financing initiatives. Nevertheless, some of 2014 pre-funding needs have already been taking care of in 2013 (BHP, Deutsche Post, Solvay) or could be redeemed via disposal proceeds (AkzoNobel,Evonik, Norske Skog). In line with our view that M&A could accelerate during 2014, it might also lead to more issuance in some sub-sectors. Moreover, in this environment, opportunistic issuance cannot be ruled out.

As usual, new supply could stem from the appearance of new issuance candidates in the Industrial Goods & Services iBoxx sector in view of the sector's relatively heterogeneous industry structure. We see potential for issuance from "new" names; for example, in Industrial Transportation, this could result from the targeted privatization of currently state-owned concessions in the periphery.

IBOXX REDEMPTIONS IN 2014 AND 2015 IN OUR COVERED UNIVERSE

Sector Issuer 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Capital Goods Alstom 743 500 Schneider 500 750 Siemens 1,000 Chemicals Air Liquide 535 AkzoNobel 825 622 BASF 1,250 2,000 DSM 500 500 Evonik 750 K+S 750 Lanxess 500 Linde 600 Solvay 500 500 Syngenta 500 500 Construction Bouygues 814 1,000 CRH 750 Holcim 600 Saint-Gobain 501 686 1,000 Vinci 500 Mining Anglo American 1,000 BHP 600 Glencore Xstrata 1,350 Industrial Transportation APRR 700 Atlantia 2,218 Deutsche Post 926 TOTAL 3,851 6,004 3,429 2,164 2,072 5,350 2,000 2,100

Source: iBoxx, UniCredit Research

Most likely candidates for new issuance

In our view, the most likely candidates for refinancing transactions in 2014 are Alstom, Schneider, BASF, Ineos (2016 sub is callable), K+S, Lanxess, Styrolution (2016 bond is callable), Syngenta, Bouygues, CRH, HeidelbergCement, Holcim (if in EUR), Lafarge, Saint-Gobain, Smurfit Kappa (2019 bond becomes callable in 2014) or Atlantia. Growth-driven new issuance might stem from Abertis (further expansion in telecoms/tower business), ASF/Vinci (acquisition refinancing), Aeroports de Paris (overseas growth plans), Atlantia (funding ofmajor capex plan of Aeroporti di Roma, following closing of Gemina takeover, which is

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expected until FYE 2013) or Mondi (indicated M&A appetite during its latest CMD; [ex-Nordenia] MNDILN 9.75% EUR 280mn becomes callable in July 2014).

REDEMPTIONS IN HIGH YIELD IN 2014 AND 2015 IN OUR COVERED UNIVERSE

Sector Issuer 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 Construction HeidelbergCement 1,000 650 650 Lafarge 1,000 612 750 Wienerberger 250 200 Industrial Transportation BCR 225 Paper Stora Enso 347 Steel ArcelorMittal 100 360 ThyssenKrupp 1000 750 TOTAL 0 2,347 1,962 585 750 750 850 650

Source: iBoxx, Bloomberg, UniCredit Research

Hybrids to remain in fashion Hybrid issuance should also be increasingly seen in the industrials universe in 2014 due to attractive market conditions. Companies might opt to issue hybrids in an effortto finance acquisitions in a balance-sheet-preserving way or to reduce rating pressure.Potential candidates in this respect include Alstom, K+S, Lanxess, Saint-Gobain and ThyssenKrupp.

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M&A Potential pick-up in M&A activity, but mega-mergers unlikely

2014 could be the year that M&A moves up on the strategic priority list in theindustrials universe, as the economic improvement in the eurozone is expected to gaintraction. After the return to growth took longer than initially forecast, meaningful transactions in the cyclical sectors were still few and far between in 2013. However, there should be more clarity on the macro development in 1H14, with acquisitionsaccelerating thereafter. Still, we do not expect the transactions – even medium-sized ones – to have a meaningful impact on the credit profiles. In line with their robust credit profiles, M&A activity could be highest in Industrial Transportation and, to a lesser extent, inCapital Goods and Chemicals. The latter could also become targets for non-European industry players. With equity markets at record high levels, however, potential targets are nolonger cheap. This might dampen the appetite for mega deals, despite attractive financingconditions. We might see a high volume of transactions in other industrial sectors as well, butcompanies should rather find themselves on the seller side here. An example in this respect is Pulp & Paper. An interesting constellation might occur in Steel, with ThyssenKrupp (finally)selling parts of its Steel Americas business to its competitor ArcelorMittal. In Aerospace & Defense and in Construction, we expect lower activity as players are focused on organicgrowth (Aerospace & Defense) or still on credit profile improvements (Construction).Opportunistic transactions are possible in the Mining and Packaging universe.

M&A ACTIVITY IN THE INDUSTRIALS UNIVERSE

Sector Risk Likely candidates

Aerospace & Defense Low-to-medium EADS (might be interested in increasing its exposure to the services area); Thales (potentially consolidation/asset swaps among French defense contractors)

Capital Goods Medium-to-High Bolt-on and medium-sized transactions could be on the agenda at ABB, Atlas, Siemens (the latter should also be active on the disposal side), while Schneider will focus more on integration of recent transactions and Alstom on restoring its financial profile (with disposals targeted)

Chemicals Medium-to-High

Air Liquide (increase exposure to healthcare); BASF (strengthening of niches); Evonik (indicated transactions with a value of above EUR 1bn); Ineos (buyout of BASF's stake in Styrolution) could be buyers of assets, while Lanxess should advance with targeted asset disposals and DSM might find a partner for its merchant caprolactam business.

Construction & Building Materials Low-to-Medium Generally still focus on credit profile improvements, with transactions in the sector likely to be limited to bolt-on transactions. Vinci could be involved in medium-sized M&A in the concessions business.

Mining Medium Ongoing portfolio optimization measures at Anglo, BHP and Glencore Xstrata

Packaging Medium Ardagh (is always opportunistically chasing deals); Gerresheimer (looking for additions in the US and in emerging markets); Guala Closures (bolt-on deals); Rexam (ongoing sale of healthcare business); Smurfit Kappa (increase exposure in higher growth regions, i.e. CEE or Latin America)

Pulp & Paper Medium-to-High Stora Enso, Norske Skog, UPM-Kymmene (not covered) – ongoing rumors of potential broader consolidation between big paper players; apart from this, we expect M&A activity in the sector to be still concentrated on asset disposals/Mondi (looking for further acquisitions in consumer packaging)

Steel Medium ArcelorMittal (still interested in ThyssenKrupp's US assets); ThyssenKrupp (on the seller side in steel); voestalpine (largely bolt-ons outside of steel business)

Industrial Transportation High

Abertis (further additions to telecoms/tower business; expansion in American concession business); SIAS (solid financial position likely to be used for network expansion and renewal of concessions); Post NL (targeted disposal of TNT Express stake in the medium term); Deutsche Post (only small-to-medium-sized deals expected); Avanza (opportunistic acquisition of further public transport concessions in Spain)

Source: UniCredit Research

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Rating Trend Stable rating trend in 2014 While we expect a better macroeconomic environment in Europe during 2014, we do

not foresee this having a significantly positive impact on ratings in the sector. First, cost discipline and cash preservation measures have protected credit profiles over the last two years and supported, in general, rating stability. Second, the magnitude of the expected economic recovery in Europe should only be modest and, in our view, prevent significant improvements in the credit profiles. In addition, downside risks remain, for example in emerging markets, where volatility has increased recently and growth prospects seem lower.This might prevent too-optimistic rating actions. Third, rating agencies have refrained fromtoo-harsh rating actions in struggling sectors such as Construction, Steel or IndustrialTransportation. Therefore, we think that a removal of current negative outlooks is more likelythan outright positive rating actions. Thus, negative rating changes should primarily be drivenby more aggressive financial policies (M&A, shareholder remuneration). Moreover, single-name stories might trigger rating downgrades. Potential candidates in this respect include Alstom, Bombardier, K+S, Lanxess, Norske and PostNL. We currently do not foresee any fallen angels (K+S already downgraded to non-IG by Moody's). In contrast, Brenntag, Clariant and Gerresheimer might enter the IG space in 2014. We believe the return to investment grade for HeidelbergCement and Lafarge will rather be a 2015 event.

RATING TREND IN THE INDUSTRIALS UNIVERSE Sector Trend Comments

Aerospace & Defense Stable In 2014, operating conditions should be supportive overall for the credit profiles (strong civil market to offset weak defense market). Execution risk on development programs remains an issue in the sector (e.g. Bombardier).

Capital Goods Stable

In view of the generally strong financial profiles, rating pressure in the sector should remain low in 2014 in the absence of bigger M&A and shareholder remuneration. We only see continued rating risk at Alstom, but our base case is currently that the company will remain in the investment grade universe. Apart from that, Siemens's Aa3 rating at Moody's continues to look too high and could be aligned, while we see Schneider as being able to restore its credit metrics in line with S&P's A- rating in the short-term, backed by the company's strong cash generation capabilities.

Chemicals Stable

The ratings benefit from the generally healthy balance sheets, the good diversification (geographies, end-markets) and continuous cost savings. Unless players become more aggressive in terms of M&A in 2014, we expect ratings to remain largely stable. On the negative side, K+S and Lanxess are in danger of being downgraded in 2014. Upgrades could occur at Brenntag, Clariant (both could be rising stars) and DSM (upgrade to A2 at Moody's).

Construction & Building Materials Stabilizing

Profitability levels are set to improve in the sector in 2014, backed by a robust market environment, but above all by the accelerating benefits from the various cost-cutting programs being implemented. Coupled with the focus of most players to improve their financial profiles (including HeidelbergCement, Lafarge, Saint-Gobain), ratings should stabilize in the sector. We see potential for rising stars (i.e. HeidelbergCement, Lafarge) but this should be an event for 2015 rather than for 2014.

Mining Stabilizing

Lower capex spending should support cash generation and, in turn, deleveraging in 2014. This should increase the financial flexibility under the ratings of BHP and Glencore Xstrata. In view of still expected negative FCF generation, the rating of Anglo could come under pressure if market conditions turn out weaker than is currently expected.

Packaging Stable Given the low cyclicality, the rating trend is largely determined by the group's strategic actions (M&A, shareholder remuneration), with most players (except Ardagh) acting relatively prudently in this respect in the recent past.

Pulp & Paper Heterogeneous

Structural demand pressure for graphic paper grades is expected to continue in 2014. With limited (albeit improved) ability to raise prices and further restructuring cash-outs (capacity closures, cost savings programs, growth investments), credit metrics of pulp & paper manufacturers (on average) are unlikely to show significant improvements in 2014. However, we expect 2014 rating trends in the sector to remain rather heterogeneous.

Steel Stabilizing An improving demand environment, coupled with the benefits from the ongoing cost optimization measures, should support profit and, in turn, allow for an improvement of credit metrics of steel producers in 2014. However, we do not see rising-star potential in the sector in 2014.

Industrial Transportation Stabilizing

The expected continued economic recovery in Europe should lead to gradually stabilizing sovereign ratings, on the one hand (positive, given the rating link for many industrial transportation issuers) and higher returns for the sector in 2014 on the back of improving traffic trends (toll roads, airports) and cargo/express volumes (logistics) on the other hand. However, deleveraging should mainly come from higher EBITDA/cash flow generation yoy.

Source: UniCredit Research

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Basic Ressources Mining

Summary Market conditions are stabilizing for commodity producers on the back of slowly-improving global economic growth, sustained growth in China and a more-disciplined approach from producers in terms of new investments. Over time, this could lead to amore balanced supply-demand situation, which could support commodity prices. In the meantime, industry players remain focused on cost-cutting measures and capexdiscipline. The companies we cover are Anglo American, BHP Billiton and Glencore Xstrata.

Demand for commodities is likely to remain robust on the back of the global economy's slow recovery and, above all, continued growth in China. Recent Chinese PMI data underpin the assumption of sustained growth in the mid-7% range of the main consumer of commodities in 2014. Also supportive of economic growth is Chinese policy makers' decision to allow the market to play a larger role in the allocation of scarce resources (land, capital, energy). However, many commodities are currently oversupplied (including aluminum, nickel and coal)or face the risk of moving into a supply surplus (e.g. copper and iron ore), which is partly the result of strong supply-growth in recent years. Hence, pricing upside seems limited in the short-term with downward risks remaining high. However, prospects could improve over timeas, in response to the challenging market conditions, the industry has started to reduce ordefer exploration and development spending. Hence, many companies are now targetinglower capex for FY14 (vs. FY13). Coupled with ongoing cost-reduction measures, this shouldalready support cash generation in FY14.

CHART GALLERY MINING

Commodity price development

0

2,000

4,000

6,000

8,000

10,000

12,000

Nov

-08

Mar

-09

Jul-0

9

Nov

-09

Mar

-10

Jul-1

0

Nov

-10

Mar

-11

Jul-1

1

Nov

-11

Mar

-12

Jul-1

2

Nov

-12

Mar

-13

Jul-1

3

Nov

-13

0

10,000

20,000

30,000

40,000

50,000

60,000LME ALUMINUM SPOT ($) LME COPPER SPOT ($)LME ZINC SPOT ($) PLATINUM SPOT $/OZLME NICKEL SPOT ($) (RS)

China's share of global demand

0%

10%

20%

30%

40%

50%

60%

2000 2005 2010 2015 2020

NickelCopperFinished steelLight duty vehiclesPolished diamonds

Diversification by commodity

0%

20%

40%

60%

80%

100%

120%

AALLN BHP GLENLN

EB

IT 2

012

Iron ore Coal CopperZinc Nickel DiamondsPetroleum (oil & gas) Marketing

Capex spending by major miners over the last few years

0

10

20

30

40

50

60

70

80

90

2005 2006 2007 2008 2009 2010 2011 2012

in U

SD

bn

Capex, including exploration

Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211, [email protected] Source: Bloomberg, Company data, Anglo, Glencore, UniCredit Research

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MINING PEER COMPARISON

Anglo American BHP Billiton Glencore Xstrata Rating Baa2n/BBBs/BBB+s A1s/A+s/A+s Baa2s/BBBs/-- Sales split per segment (FY12) Iron Ore & Manganese 20%,

Platinum 17%, Copper 16%, Metallurgical Coal 12%, Diamonds

12%, Other Mining & Industrial 12%, Thermal Coal 11%, Nickel 1%

Iron Ore 31%, Petroleum and Potash 20%, Copper 18%, Coal

16%, Aluminum, Manganese, Nickel 14%

EBIT split by commodity: Copper 33%, Coal 25%, Zinc 15%, Oil 5%, Nickel 1%, Marketing metals 17%,

Marketing energy 5%, Marketing agri 5%, corp and other (-6%)

Major sales regions (FY12) Asia 49% (China 18%), Europe 27%, Africa 12%, South America

7%, North America 4%, Australia 1%

Asia 62% (China 29%), North America 13%, Europe 12%,

Australia 7%, South America 3%, Southern Africa 2%, Rest of the

world 1%

Glencore: Asia 21%; Europe 50%, Americas 20%, Africa 8%, Oceania 1%; Xstrata: Asia 51%, Americas

22%, Europe 21%, Rest of the World 6%

Non-current assets by location (FY12) South America 34%, South Africa 33%, Other Africa 16%, Australia

9%, North America 4%, Europe 3%

Australia 48%, North America 29%, South America 12%, Southern Africa 4%, Rest of World and unallocated

assets 7%

Glencore: Europe 40%, Africa 25%, Americas 15%, Asia 13%, Oceania

7%; Xstrata (total assets): Australasia 42%, Americas 41%,

Africa 13%, Europe 4% in USD mn in USD mn in USD mn Financials FY12 (31/12) FY12/13 (30/06) FY12 (31/12 Pro forma)* Revenues 28,680 65,968 236,466 Underlying EBITDA 8,686 28,383 12,892 EBITDA margin adj. 28% 44% 5.5% FFO/net debt adj. 49% 51% 35.0% Net debt/EBITDA adj. 1.5 1.3 2.3x S&P rating trigger (FFO/Net debt) 35% (FY13), 30% (FY14) more than 60% 25% LTM figure 47% 50% 25% (PF FY12) Moody's rating trigger 3.0x (gross debt/EBITDA) 1.5x (gross debt/EBITDA) 3.5x (gross debt/EBITDA) LTM figure 2.6x (30.6.) 1.4x (30.6.) 3.6x (30.6.) Business risk according to S&P Strong Strong Strong Financial risk according to S&P Significant Modest Significant

*Glencore Xstrata's pro-forma figures for FY12 are all based on company definitions; BHP figures are for FY12/13.

Source: Company data, Rating agencies, UniCredit Research

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Steel Summary Backed by a more positive demand outlook, the prospects for the European steel

sector in 2014 seem to be improving. Coupled with the benefits from ongoing cost-optimization measures, this could support profit and, in turn, the credit metrics of steelproducers in 2014. However, downside risks remain relatively high. The companies we cover are ArcelorMittal, ThyssenKrupp and voestalpine, with ArcelorMittal the only pure-steel player among them.

With leading economic indicators having become more positive recently, end-user demand, e.g. in the automotive sector, is set to improve in 2014, and volume prospects are brightening for the steel sector. The European Steel Association, Eurofer, expects apparent demand to rise by almost 3% for Europe. According to Eurofer, demand should be supported by better economic prospects and sentiment levels, evidence of improving business conditions in steel-using sectors, well-balanced stock levels and easing import pressure. Higher volumes, coupled with the benefits of the ongoing cost-reduction programs, should thus provide a boost to profits of European steel producers. That said, despite the increase in demand, overcapacities continue to be an issue in the European steel sector, with limited progress having been made in terms of capacity-reduction so far. Hence, risks on the pricing side remain. Price momentum for steel could be further jeopardized if raw material prices decline(and the decline in the price of steel outweighs the positive impacts of lower input costs). Inthis context and in light of the upcoming capacity additions, we highlight the risk of falling iron ore prices.

CHART GALLERY STEEL

Main steel using sectors (% share in total consumption)

Construction35%

Automotive18%

Mechanical engineering

14%

Metal goods14%

Domestic appliances

3%

Miscellaneous2%

Other Transport2%

Tubes 12%

Development of the main steel using sectors

-8

-6

-4

-2

0

2

4

6

Con

stru

ctio

n

Aut

omot

ive

Mec

hani

cal

engi

neer

ing

Met

al g

oods

Tube

s

Dom

estic

appl

ianc

es

Mis

cella

neou

s

Oth

erTr

ansp

ort

Tota

l% c

hang

e yo

y in

the

SW

IP in

dex 2012 2013 2014

Steel price development

300

400

500

600

700

800

900

1000

Nov-09 May-10 Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13

USA Domestic Hot Rolled Coil (FOB US Midwest mill) USD/short tonNorth Europe Domestic Hot Rolled Coil (Ex works) USD/metric ton

Steel raw materials: Iron ore price development

0

50

100

150

200

250

Nov-10 May-11 Nov-11 May-12 Nov-12 May-13 Nov-13

Steel China Iron Ore Fines cfr main Chinaport USD/dry metric ton

Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211, [email protected] Source: Bloomberg, Eurofer, UniCredit Research

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STEEL PEER COMPARISON

ArcelorMittal ThyssenKrupp voestalpine Rating Ba1n/BB+n/BB+s Ba1n/BBn/BBB-n Not rated Description Steel and mining company Steel and technology group Steel and technology group Focus of steel activities Flat steel, Long steel Flat steel Flat steel, Long steel Exposure by end markets Automotive 16%, Appliance,

Engineering, Construction, Energy, Machinery (no detailed split available)

Automotive 23%, Steel and related processing 18%, Trading 15%,

Engineering 11%, Construction 10%, Other customers 23%

Automotive 29%, Energy 16%, Railway Infrastructure 13%, Civil &

mechanical engineering 11%, Building & Construction 9%, White goods /consumer goods 5%, Other 17%

Divisional sales split (FY12) Flat Carbon Americas 20%, Flat Carbon Europe 27%, Long Carbon

Americas & Europe 22%, AACIS 10%, Distribution Solutions 16%, Mining 5%

Steel Europe 26%, Materials Services 30%, Elevator Technology 14%, Plant

Technology 10%, Components Technology 17%, Marine Systems 3%

Steel 33%, Special Steel 23%, Metal Engineering 25%, Metal Forming 19%

Major sales regions (FY12) Germany 9%, Europe 37%, Americas 38%, Asia/Africa 16%

Germany 31%, Europe 29%, Americas 26%, Asia/Pacific 12%, Africa 2%

Germany 30%, Europe 47%, Americas 13%, Asia 6%, Rest of the World 4%

in USD mn in EUR mn in EUR mn Financials FY12 (ending 31.12.) FY11/12 (ending 30.9.) FY12/13 (ending 31.3.) Sales 84,213 40,124 11,524 EBITDA rep. 7,080 2,427 1,442 EBITDA margin adj. 10% 7% 13% Peak-EBITDA 24,478 (FY08) 5,254 (FY06/07) 1,837 (FY07/08) Trough-EBITDA 5,824 (FY09) 192 (FY08/09) 1,004 (FY09/10) %change Peak-to-Trough EBITDA -76% -96% -45% FFO adj./net debt adj. 8% 5% 26% Net debt adj./EBITDA adj. 4.9x 4.6x 2.9x S&P rating trigger (FFO/debt) 20% (15% in FY13) 15% n.a. LTM figure 10% (30.9.) 7% (30.9.) n.a. Moody's rating trigger (debt/EBITDA) 4.5x 4.5x n.a. LTM figure 5.7x (30.6.) 7.6x (30.6.) n.a. Business risk Satisfactory Satisfactory n.a. Financial risk Significant Aggressive n.a.

AM sales split by division before intercompany eliminations, ratios of voestalpine include hybrid Source: Company data, Rating agencies, UniCredit Research

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Pulp & Paper Summary Although many Pulp & Paper bonds are trading at apparently attractive spread/yield

levels (after a mixed performance in 2013), we continue to recommend only veryselective investments in the European sector given unabated structural demandpressure in most paper grades. Our Pulp & Paper coverage universe consists of investment-grade-rated Mondi (Marketweight; see also Packaging) and high-yield issuers Stora Enso (Sell), Sappi (Hold), Norske Skog (Sell) and Lecta (Buy).

Despite support from the expected economic recovery, secular trends in European graphic paper(i.e. substitution) should persist and are likely to result in demand volumes declining by a further 2% yoy (SC) to 4.5% yoy (CWF), as well as additional capacity adjustments in 2014. After theunderperformance and stronger-than-expected demand/price declines in CWF/UWF paper (particularly in 1H13), we foresee recent industry announcements (e.g. by Sappi/Lecta) leading tostructural improvements (i.e. improving capacity utilization, more balanced supply/demand) inEuropean fine paper in 2014 (similar to the progress made in newsprint and SC seen during 2013). Just as we expect those paper producers with long positions in bleached hardwood pulp(BHKP) to suffer in 2014 from lower BHKP prices, we expect producers with short positions inbleached hardwood pulp to benefit from lower BHKP prices – which began in 2H13 with significant (eucalyptus) pulp capacity expansion, particularly in LatAm. Continued restructuringcash-outs (capacity closures, cost-saving programs, growth investments) will likely prevent credit metrics of European pulp & paper manufacturers to show significant improvement in 2014, but liquidity could be supported by further asset disposals (non-core; downsizing in paper). We note that rumors of a potential broader consolidation between the big European publishing paperplayers remains ongoing. Though a clearly positive event for the whole industry (and for creditprofiles), we find it difficult to attach a >50% probability to such a deal taking place in 2014.

CHART GALLERY PULP & PAPER

European paper shipment forecast

-25%

-20%

-15%

-10%

-5%

0%

5%

10%

15%

2009 2010 2011 2012 2013e 2014e

Newsprint SC_MagazineCoated Mechanical Uncoated MechanicalCoated Woodfree Uncoated Woodfree

80

85

90

95

100

105

110

115

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

e

2014

e

mn

tons

82

84

86

88

90

92

94

%

Installed capacity in Europe (Paper & Board) Capacity utilization (RS)

Paper price development

400450500550600650700750800850900

Nov

-07

May

-08

Nov

-08

May

-09

Nov

-09

May

-10

Nov

-10

May

-11

Nov

-11

May

-12

Nov

-12

May

-13

Nov

-13

EU

R/to

n

LWC Coated WoodfreeNewsprint Europe Uncoated Fine Paper

Pulp and energy price development

0

20

40

60

80

100

120

140

160

Nov

-07

May

-08

Nov

-08

May

-09

Nov

-09

May

-10

Nov

-10

May

-11

Nov

-11

May

-12

Nov

-12

May

-13

Nov

-13

US

D/b

arre

l

400

500

600

700

800

900

1000

1100

US

D/to

n

Oil Price Pulp BHKP (RS) Pulp NBSK (RS)

Christian Aust, CFA, +49 89 378-12806, [email protected] Source: CEPI, FOEX, Bloomberg, UniCredit Research estimates

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PAPER & PULP PEER COMPARISON

in EUR mn Lecta Mondi Norske Skog Sappi Stora Enso Ratings B1n/B+n/-- Baa3s/BBB-s/-- Caa2n/CCCn Ba3s/BB-n/-- Ba2n/BBs/BB-s Country Luxembourg South Africa and UK Norway South Africa Finland Shareholder structure CVC (57% ), remaining

shares held by other investors and management

Free float Free float Government Employee Pension FD (8.21%),

free float

Republic of Finland (6.78%), free float

Segments (in % of sales, FY12)

Coated Woodfree (69%), Specialties

(20%), Other (11%)

Fiber Packaging (31%), Uncoated fine paper

(25%), Packaging Paper (25%), Consumer

Packaging (9%), Mondi Packaging South Africa

(9%), Other (1%)

Newspaper (54%), Magazine Paper (33%),

Other (12%)

Fine Paper (76%), Forest Products (24%)

Printing & Reading (44%), Renewable Packaging (29%),

Building & Living (15%), Biomaterials (5%),

Other (8%)

Major sales regions (FY12) Western Europe (71%), North America (4%),

Others (25%)

Western Europe (43%), Eastern Europe (20%),

North America (5%), Latin countries (1%), Asia (10%), Others

(21%)

Western Europe (57%), North America (5%), Latin countries (6%), Asia (11%), Others

(21%)

Western Europe (53%), North America (23%),

Others (24%)

Western Europe (61%), Eastern Europe (11%),

North America (1%), Latin countries (2%),

Asia (8%), Others (16%)

in EUR mn in EUR mn in NOK mn in USD mn in EUR mn Financials FY12 FY12 FY12 FY12 FY12 Sales 1,624 5,807 16,592 5,925 10,815 adj. EBITDA 141 952 1504 575 929 adj. EBITDA margin 8.7% 16.4% 9.1% 9.7% 8.6% FFO 54 743 561 307 909 CAPEX -50 -375 -492 -552 -561 FCF -28 276 500 -286 375 RCF/net debt 9.9% 27.3% 8.2% 10.9% 16.4% FFO/net debt 10.2% 33.0% 8.2% 10.9% 22.3% Net debt/EBITDA 3.7x 2.4x 4.6x 4.9x 4.4x Equity/Total assets 21.8% 43.5% 26.9% 20.0% 42.9% S&P ratings trigger FFO/debt 12.0% 30.0% n.a. 15.0% 15.0% S&P adj. LTM 7.63% 37.69% 0.28% 13.68% 18.8% Moody's ratings trigger FFO/debt 10% 20% n.a. <10% Lower mid-teens Moody's adj. LTM 5.72% 29.5% 2.9% 10.75% 10.77%


<date>



Chemicals Summary The industry might (finally) experience a tailwind from a slowly improving European

economy, while input cost should exhibit low volatility. Still, certain risk factors, suchas uncertainty in emerging markets, capacity additions and high competition levelscould make industry conditions more demanding than they seem. Cost reductionsremain a top priority, while organic investments continue to be high. Our coverage includes Air Liquide, AkzoNobel, Arkema, BASF, Brenntag, Clariant, DSM, Evonik, Ineos,K+S, Kerling, Lanxess, Linde, Solvay, Styrolution and Syngenta.

In 2014, the industry should benefit from the return to GDP growth in Europe and further strengthening in North America. The uncertainty surrounding emerging markets needs to bemonitored closely given the industry's relatively high exposure there. Overall, cefic forecasts a1.5% growth for chemicals output in 2014 (2013E: -1%). Developments in prominent end-markets, such as automotive and construction, will be important. These markets faced softconditions in 2012 and 2013 and are projected to recover in 2014. Raw materials should trendsideways leading to largely stable pricing. However, this may vary by sub-sector. For instance, potash prices are expected to decline due to the change in the commercial strategy at Uralkali.Furthermore, an expected rise in demand might not keep up with additions to capacity (i.e. in certain synthetic rubbers), thus applying pressure on pricing. This could also stem from highcompetition levels in light of the feedstock advantage of North American producers. In thisenvironment, the industry will continue to focus on cost-reductions, which should support cash-generation at a time when a number of players are focused on organic growth programs.

CHART GALLERY CHEMICALS

% of output by selected end-market (European chemical industry)

Others42%

Machinery3%

Food and beverages

3% Textiles 3%

Automotive4%

Pulp and paper 5%

Agriculture 7%

Construction 8%

Healthcare11%

Rubber and plastics

14%

Output of European Chemicals in % of sales by sub-sector

Petrochemicals, 25%

Specialty chemicals

(auxiliaries, paints & inks,

crop protection, dyes &

pigments), 25%

Polymers (plastics, synthetic

rubbers, man-made fibres),

24%

Basic inorganics (other

inorganics, industrial gases, fertilizers), 13%

Consumer chemicals, 12%

Chemical sales by country (in 2011)

0

100

200

300

400

500

600

700

800

Chi

na US

Japa

n

Ger

man

y

Sou

thK

orea

Bra

zil

Fran

ce

Taiw

an

Rus

sia

Net

herla

nds

in E

UR

bn

Price and production development (German chemical industry)

0

20

40

60

80

100

120

140

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

2005

= 1

00 (i

ndex

)

Production development Price development

Max Huefner, CFA (UniCredit Bank), +49 89 378-13212, [email protected] Source: cefic, VCI, Bloomberg, UniCredit Research

<date>



CHEMICALS PEER COMPARISON (I)

Air Liquide AkzoNobel Arkema BASF Clariant DSM Ratings --/As/-- Baa1n/BBB+s/BBB+n Baa2s/BBBs/-- A1s/A+s/A+s Ba1s/BBB-s/-- A3p/As/A-s Segments (in % of sales) 91% Gas &

Services, 5% Engineering &

Construction, 4% Other activities

36% Specialty Chemicals, 37%

Performance Coatings, 27%

Decorative Paints

34% Coating Solutions, 33%

Industrial Specialties, 33%

High Performance Materials

25% Chemicals, 24% Functional Materials &

Solutions, 22% Performance

Products, 18% Oil & Gas, 6% Agricultural

Solutions

42% Plastics & Coatings, 25%

Care Chemicals, 21% Natural

Resources, 12% Catalysis & Energy

40% Nutrition, 30% Performance

Materials, 17% Polymer

Intermediates, 8% Pharma, 4%

Corporate Activities, 1% Innovation Center,

Focus of activities Industrial Gases and Engineering

Focused on decorative paints, coatings combined

with a specialty chemicals business

(i.e. surfactants, ethylene amines, silica products)

Specialty Chemicals with a number of niche businesses

(fluorogases, acrylic monomers, coating

resins etc.)

Specialty Chemicals with backward

integration into oil & gas and

petrochemicals

Specialty Chemicals (Coatings,

surfactants, catalysts, additives,

adsorbents etc.)

Focus on Nutrition with specialty

chemicals business (engineering plastics,

resins; backward integration in

caprolactam & acrylonitrile)

Industrial end-markets (in % of sales)

33% Large Industries, 34%

Industrial Merchant, 16% Healthcare, 8% Electronics, 5% Engineering &

Construction, 4% Other Activities

45% Buildings and Infrastructure, 25%

Industrial, 15% Transportation, 15%

Consumer Goods

22% Consumer goods, 16%

Chemicals, plastics, 13% Industrial coatings, 12%

Decorative paints, 7% Transportation,

6% Energy, 6% Construction, 4%

Nutrition, 3% Electronics, 3%

Water, 8% Others

>15%: Chemicals & Plastics, Energy & resources; 10-15% Consumer Goods, Transportation; 5-10%: Agriculture,

Construction, <5%: Health & nutrition,

Electronics

10-15%: Oil & Mining, Packaging,

Plastics; 5-10%: Chemicals,

Consumer Care, Crop Care, Paints & Coatings; <5%:

Automotive, Construction, Electronics, Industrials

41% Health and Nutrition, 8%

Construction, 8% Automotive, 8%

Textiles, 8% Packaging, 6%

Pharmaceuticals, 6% Electrical/electronics,

15% Other

Geographical end-markets (in % of sales)

18% France, 35% Rest of Europe, 21% Americas,

23% Asia-Pacific, 2% Middle-East

and Africa

38% Mature Europe, 8% Emerging Europe, 2% Middle East and

Africa, 26% Asia Pacific, 15% North America, 11% Latin

America

40% Europe (thereof, 10% in France; 8% in

Southern Europe), 34% North America, 21% Asia, 5% ROW

58% Europe, 20% North America, 16%

Asia Pacific, 6% ROW

37% Europe, 23% Asia Pacific, 16% North America,

15% Latin America, 9% Middle East &

Africa

42% Europe, 20% North America, 7% Latin America, 14% China, 14% Rest of

Asia, 3% ROW

Competitors Linde, Air Products, Praxair; Smaller regional

players competing in single markets

(Messer in Germany)

Decorative Paints: PPG, Sherwin-

Williams, Axalta, Jotun, BASF; Performance

Coatings: Jotun, Chugoku, Sherwin-

Williams, PPG, BASF; Specialty Chemicals:

Arkema, Evonik, Solvay, BASF, Croda,

Cytec

High Performance Materials: Evonik,

EMS, Solvay, AkzoNobel; Industrial

Specialties: Evonik, Mitsubishi Rayon, Chevron, DuPont, Honeywell, Solvay, EKA (AkzoNobel); Coating Solutions: BASF, Dow, Cytec,

DSM

Chemicals: Sabic, ExxonMobil, Lyondell,

Dow, Evonik, DSM, Bayer; Performance

Products: Dow, Arkema, Clariant,

Bayer, Evonik, DSM; Functional Materials &

Solutions: Clariant, Johnson Matthey, Umicore, Lanxess,

DuPont, Solvay, Agricultural Solutions:

Syngenta, Bayer, Monsanto;

Plastic & Coatings: BASF, AkzoNobel,

DIC/Sun, ICL, Honeywell,

Chemtura; Care Chemicals: Croda,

BASF, Solvay, Evonik, Akzo;

Natural Resources: Akzo,

Baker Hughes, Cytec, Nalco; Catalysis &

Energy: Johnson Matthey, Umicore,

BASF

Nutrition: BASF, DuPont, Cargill, Epax,

Croda, Evonik, Symrise; Performance

Materials: BASF, Lanxess, DuPont, Solvay, Honeywell,

Akzo Nobel; Polymer Intermediates: Ineos, Asahi, Capro Corp., Ascend , Pharma:

Lonza, BASF, Evonik, Boehringer Ingelheim,

Sandoz, GSK, Chinese competitors

in EUR mn in EUR mn in EUR mn in EUR mn in CHF mn in EUR mn Financials FY12 FY12 FY12 FY12 FY12 FY12 Sales 15,326 15,390 6,395 72,129 6,038 9,131 EBITDA 3,792 1,901 996 10,009 802 1,109 EBITDA margin 25% 12% 16% 14% 13% 12% Net Debt 6,120 4,050 900 11,137 1,809 1,431 Net adjusted leverage 2.1 2.6 1.4 1.4 3.0 1.7 S&P rating trigger FFO/debt of 35% FFO/debt: 30%-35% FFO/debt of 35% FFO/debt: 45%-50% FFO/debt of 30% FFO/debt of 45% LTM figure 35% 34% 31% 46% 21% 39% Moody's rating trigger RCF/ND 27% RCF/ND in high20s RCF/debt in mid 20s RCF/ND: 40% Debt/EBITDA > 4x RCF/ND: high 30s/low

40s LTM figure 24% 30% 20% 31% 4.5x 20% Business Risk* Excellent Strong Satisfactory Strong Satisfactory Strong Financial Risk* Intermediate Intermediate Intermediate Modest Intermediate Modest

*according to S&P Source: Company Data, Rating agencies, UniCredit Research

<date>



CHEMICALS PEER COMPARISON (II)

Evonik Ineos K+S Kerling Lanxess Linde Ratings Baa2p/BBB+s/-- B2p/B+s/-- Ba1s/BBBn/-- Caa1n/B-dev/-- Baa2n/BBBn/BBBn A3s/As/-- Segments (in % of sales)

35% Consumer, Health and Nutrition, 26%

Resource Efficiency, 39% Specialty

Materials

45% Chemical Intermediates; 38% O&P Europe; 17%

O&P North America

58% Potash and Magnesium, 38%

Salt, 4% Complementary

Activities

92% Ineos ChlorVinyls; 8%

Ineos Enterprises

57% Performance Polymers; 24% Performance

Chemicals, 18% Advanced

Intermediates

82% Gases, 17% Engineering, 1%

Other

Focus of activities Specialty Chemicals (amino acids,

superabsorbents, silica, lubricants, acrylic monomers, PA12 etc.)

Commodity (olefins) and Intermediate (i.e.

nitriles, phenol) chemicals producer

Fertilizer (potash) and salt producer

Intermediate chemicals producer (PVC, caustic soda)

Specialty chemicals

(synthetic rubber, PA-based plastics,

fine and basic chemicals, application-

oriented specialty chemicals)

Industrial Gases and Engineering

Industrial end-markets (in % of sales)

18% Home & personal care, 16% Automotive, 14% Food & Beverage, 11% Construction, 10% Plastics & rubber, 7%

Coatings, paints & printing, 5% Pharma,

19% Other

25% Packaging & Food; 21%

Construction; 11% Automotive &

Transport; 10% White Goods & Durables; 10% Textiles; 9%

Fuels & Lubricants; 2% Pharma &

Agrochemical; 12% other

P & M: 51% Potassium Chloride,

37% Fertilizer specialties, 12%

Industrial products; Salt: 34% industrial salt, 31% de-icing, 23% Food grade salt, 8% Salt for

chemical use; 4% other

Construction; food packaging; medical

applications; automotive;

electronics; industry; cosmetics;

Percentage not disclosed

>25%: Tires; >15% Automotive; 15%: Consumer Goods, Chemicals; 10%:

Agro, Construction

In Gases: Food & Beverage, Chemistry & Energy, Metallurgy

& Glass, Manufacturing,

Electronics, Healthcare;

percentage not disclosed

Geographical end-markets (in % of sales)


Asia Pacific, 6% Central & South

America, 2% Middle East & South Africa

60% Europe; 27% North America; 8% Asia; 5% Rest of

World


South America, 12% Asia, 3%

Africa, Oceania

79% Europe; 12% Turkey, India,

Russia; 9% Rest of World

28% EMEA (excl. Germany), 17% Germany, 18% North America,

13% Latin America, 24% Asia Pacific

42% Europe, 31% Asia Pacific, 17%

North America, 6% South America, 4%

ROW

Competitors Consumer, Health and Nutrition: BASF, Croda, Clariant, DSM, Lonza; Resource Efficiency:

BASF, Johnson Matthey, Clariant,

Altana, Dow Corning; Specialty Materials: Arkema, LG, FMC,

Solvay, BASF, DuPont

O&P: Lyondell, Sabic, Dow,

ExxonMobil; Nitriles: Asahi Kasei, Ascend,

DSM; Oligomers: Shell, Chevron

Phillips, Sasol; Oxide: BASF, Shell, Dow

Chemical, E-Oxo, JX Nippon; Phenol: Cepsa, Polimeri,

Sunoco, Shell

P & M: Belaruskali, Uralkali/Silvinit, Potash Corp,

Mosaic, Agrium; Salt: China National

Salt, Compass Minerals, Dampier

Salt

Solvay, Dow Chemical, Kem One, Vinnolit, BorsodChem,

Vestolit, Shin-Etsu

Performance Polymers:

ExxonMobil, NKNK, Sinopec,

Sibur, Asahi Kasei, Dow, BASF,

DuPont, DSM, Solvay; Advanced

Intermediates: BASF, Ineos,

Perstorp, CABB, DSM, Evonik; Performance

Chemicals: BASF, Dow, Eastman, Stahl, Lubrizol,

Arkema,

Air Liquide, Air Products, Praxair; Smaller regional

players competing in single markets

(Messer in Germany)

in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn Financials FY12 FY12 FY12 FY12 FY12 FY12 Sales 13,629 18,188 3,953 2,805 9,094 15,280 EBITDA 2,589 1,517 1,038 140 1,225 3,530 EBITDA margin 19% 8% 26% 5% 14% 23% Net Debt 1,163 6,054 479 946 1,537 7,870 Net adjusted leverage 2.1 4.4 0.6 7.7 2.1 2.7 S&P rating trigger FFO/debt: 35%-40% Leverage: 4.5x-5.0x FFO/debt < 35% Leverage: 5.5x-6.0x FFO/debt of 30% FFO/debt of 35% LTM figure 32% n/a 75% n/a 16% 30% Moody's rating trigger Debt/EBITDA: 3x Net leverage > 5.5x Leverage > 4.5x Debt/EBITDA > 7.5x RCF/ND >25% RCF/net debt > 25% LTM figure 2.98x n/a 1.5x n/a 16% 22% Business Risk* Strong Fair Satisfactory Weak Satisfactory Excellent Financial Risk* Intermediate Aggressive Modest Highly Leveraged Intermediate Intermediate


<date>



CHEMICALS PEER COMPARISON (III)

Solvay Styrolution Syngenta Ratings Baa1n/BBB+n/A-n B2s/B+s/-- A2s/As Segments (in % of sales) 33% Performance Chemicals,

28% Advanced Materials, 23% Consumer Chemicals, 11%

Functional Polymers, 5% Energy Services

41% Polystyrene; 24% Styrene monomer; 21% Specialties; 14%

ABS standard

28% EAME, 28% North America, 26% Latin America, 13% Asia Pacific, 5% Lawn and Garden

Focus of activities Specialty chemicals (PA 6.6, Cellulose, Acetate Fiber, Soda

Ash, Surfactants, Hydrogen Peroxide, Silicas, etc.)

Intermediate chemicals producer (Styrene Monomer, Polystyrene,

ABS, Specialties)

Focused on agrochemicals (crop protection and seeds)

Industrial end-markets (in % of sales) 28% Consumer goods, 15% Automotive, 14% Construction,

7% Electricals & Electronics, 6% Energy, 5% Environment, 4% Agriculture, 2% Paper, 19%

Other

33% Packaging, 26% Household, 19% Automotive, 8% Electrical & electronics, 8% Toys, sports & leisure, 4% Building & Construction, 2% Healthcare &

diagnostics

Mainly agriculture

Geographical end-markets (in % of sales) 44% Europe, 19% North America, 10% Latin America,

27% Asia and ROW

42% Europe, 36% Americas, 22% Asia Pacific

28% EAME, 28% North America, 26% Latin America, 13% Asia Pacific, 5% Lawn and Garden

Competitors Consumer Chemicals: AkzoNobel, BASF, Clariant, Arkema, Bayer; Advanced Materials: Arkema, BASF,

Daikin, DSM, DuPont, Evonik, Celanese, Eastman;

Performance Chemicals: Evonik, Arkema, Tata Chem, FMC, Dow,

C&D, Berun; Functional Polymers: Shin-Etsu, Formosa, Ineos, BASF, DuPont, Lanxess

Styrene monomers: Lyondell, Shell, Total, Americas Styrenics,

Formosa; Polystyrene: Total, Americas Styrenics, Styron, Formosa; ABS: Chi Mei, LG

Chem, Formosa, Cheil; Specialties: UMG, LG Chem,

SABIC, Cheil

Bayer, BASF, Monsanto, Dow, Nufarm, DuPont

in EUR mn in EUR mn in USD mn Financials FY12 FY12 FY12 Sales 12,435 5,990 14,202 EBITDA 2,067 335 3,150 EBITDA margin 17% 6% 22% Net Debt 875 640 1,706 Net adjusted leverage 2.0 2.2 0.7 S&P rating trigger FFO/debt of 35% FFO/debt of 20%-25% FFO/debt of 45% LTM figure 34% 26% 53% Moody's rating trigger RCF/debt in high 20s Leverage towards 5.0x RCF/net debt of 40% LTM figure 10% n/a 28% Business Risk* Satisfactory Weak Strong Financial Risk* Intermediate Significant Modest


<date>



Building Materials and Construction Summary The outlook for the building materials sector in 2014 does not seem that bad after all

on the back of potential stabilization in Europe and the US benefitting from the ongoing upward trend in the housing market. However, storm clouds are gathering for some emerging markets. Since the business remains largely a regional play, a goodgeographical set-up should continue to be one of the main success factors. The companies we cover are Bouygues, CRH, Italcementi, Saint-Gobain, Holcim, Lafarge, Vinci, Heidelberg, Xella (restricted), Wienerberger and Buzzi. We provide an overview of Würth.

In 2014, the European construction sector is expected to stabilize at low levels, with Euroconstruct forecasting construction activity to grow by 0.5% (2013: -2.8%). In terms of countries, the bright spots will likely be the Nordics and Germany, while a recovery is alsoforeseen for the UK (on a strong recovery of the residential market) and for Poland. Prospectsfor the southern countries, for the Netherlands and France remain weak, however. The US construction market should continue its slow recovery, mainly driven by the housing market,with the other sectors still in the doldrums (we note that the ABI index remains above 50,which could indicate some improvement in non-residential construction in 2014). The biggest downside risks lie ahead for the emerging markets in 2014, in our view. In this context, wenote the less favorable short-term growth prospects in previous growth regions, includingIndia and Indonesia. Furthermore, we highlight the inherent risks of investing in thesecountries, i.e. currency depreciation and policitcal challenges, with the former being aparticular burden recently. To sum up, we expect volumes to grow moderately in 2014 drivenby a recovery of the mature markets. This, coupled with price-increasing initiatitives and the accelerating benefits from the various cost reduction measures, should allow for improvingprofitability in the sector.

CHART GALLERY BUILDING MATERIALS AND CONSTRUCTION

Euroconstruct - Total Construction Output

-40-35-30-25-20-15-10

-505

1015

Aus

tria

Belg

ium

Den

mar

k

Finl

and

Fran

ce

Ger

man

y

Irela

nd

Italy

Net

herla

nds

Nor

way

Por

tuga

l

Spa

in

Sw

eden

Sw

itzer

land

Uni

ted

Kin

gdom

Cze

chR

epub

lic

Hun

gary

Pol

and

Slov

akR

epub

lic

% c

hang

e in

real

term

s

2009 2010 2011 2012e 2013f 2014f 2015f

US: New Privately Owned Housing Starts

0

500

1000

1500

Oct

-07

Feb-

08

Jun-

08

Oct

-08

Feb-

09

Jun-

09

Oct

-09

Feb-

10

Jun-

10

Oct

-10

Feb-

11

Jun-

11

Oct

-11

Feb-

12

Jun-

12

Oct

-12

Feb-

13

Jun-

13

Oct

-13

Vol

ume/

Thou

sand

s

US: Non-residential construction leading indicator

30

35

40

45

50

55

60

Nov-08

May-09

Nov-09

May-10

Nov-10

May-11

Nov-11

May-12

Nov-12

May-13

Nov-13

AB

I Ind

ex

Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211, [email protected] Source: Bloomberg, Euroconstruct, UniCredit Research

<date>



BUILDING MATERIALS AND CONSTRUCTION PEER COMPARISON (I)

Buzzi HeidelbergCement Holcim Italcementi Lafarge Rating --/BB+n/-- Ba1s/--/BB+s Baa2s/BBBs/BBBs Ba3s/BB+n/-- Ba1n/BB+s/BB+s

Market position

Regionally strong market positions such as No. 2 in Italy and in

Germany

No. 3 in cement, No. 1 in aggregates, No. 3 in

RMC (all worldwide)


RMC (all worldwide)

No. 5 in cement (worldwide)


RMC (all worldwide)

Exposure by end-markets Mainly infrastructure and new residential, some commercial

Mainly infrastructure and new residential, some commercial




Major regions (% of sales)

17% Italy, 28% Central Europe, 22% Eastern

Europe, 24% USA, 9% Mexico

29% Western Northern Europe, 24% North

America, 10% Eastern Europe-Central Asia, 24% Asia-Pacific, 8%

Africa

26% Europe, 15% North America, 16% Latin America, 4% Africa Middle East,

39% in Asia

52% Central Western Europe, 10% North

America, 21% Emerging Europe,

North Africa, Middle East, 12% Asia, 5%

Trading & Others

20% Western Europe, 8% CEE, 21% North America, 27% Middle East/Africa, 17% Asia,

6% Latin America

in EUR mn in EUR mn in CHF mn in EUR mn in EUR mn Financials FY12 FY12 FY12 FY12 FY12 Sales 2,813 14,071 21,544 4,577 15,816 EBITDA (clean in HY) 455 2,477 4,190 632 3,450 EBITDA margin adjusted 16% 19% 20% 14% 21% FFO/net debt adjusted 17% 16% 27% 15% 13% Net debt/EBITDA adjusted 3.6 3.4 2.9 4.2 4.1 S&P rating trigger (FFO/debt) 20% n.a. 25% more than 20% high teens LTM figure 16% (30.6.) n.a. 25% (30.9.) 18% (30.6.) 13% (30.9.) Moody's rating trigger (RCF/Net debt) n.a. above 15% 20% above low teens 15% LTM figure n.a. 11% (30.09.) 21% (30.9.) 12% (30.6.) 8% (30.9.) Business risk according to S&P Satisfactory n.a. Strong Satisfactory Strong Financial risk according to S&P Significant n.a. Significant Significant Aggressive


<date>



BUILDING MATERIALS AND CONSTRUCTION SECTOR PEER COMPARISON (II)

Bouygues CRH Saint-Gobain Vinci Wienerberger Rating A3n/BBB+n/-- Baa2s/BBB+s/BBBs Baa2n/BBBn/BBB+s Baa1s/BBB+s/BBB+s Ba3n/--/--

Description

Diversified industrial group with the business

focus on construction and telecoms/media

Manufacturer and distributor of building

material products

Manufacturer and distributor of construction and engineered materials

and solutions

Diversified construction company active in the concession business,

construction and related services

Manufacturer of building material products

Market position

World leading full service contractor (second-largest construction company in France), leading property

developer in France, world leader in road

construction, leading TV channel in France, No. 3

telecom operator in France

Regionally leading market positions, such as No. 1

concrete products in Western Europe and

North America, No. 1 in asphalt in North America, No. 3 building materials distributor in Western

Europe

No. 1 flat glass producer in Europe (No. 2

worldwide); leading positions in a.o. ceramic

materials, special polymers, glass fiber

fabrics, gypsum, insulation, exterior

products, pipe, industrial mortars, No. 1 BM distribution network

(Europe)

Largest construction player in France, No. 2 in the French road building market, market leader in

France in Energy, globally leading player in

concessions

World largest producer of bricks, No. 1 in clay roof tiles in Europe, leading positions in concrete

payers in CEE and pipe systems (ceramic, plastics) in Europe

Competition

Construction: Vinci, Colas: Eurovia, Eiffage

TP (both France), Immobilier: Nexity, Kaufman & Broad,

Telecom: Orange, SFR, Free Mobile

Several competitors in each of the product

segments

Flat Glass: NSG, Asahi; Building Distribution: Wolseley, CRH, SIG

Construction: Bouygues, Eiffage, Roads:

Bouygues, Eiffage TP: Energy: GDF, Spie,

Eiffage

Bricks: local players, CRH, HeidelbergCement; Roof Tiles: Monier, Etex,

Imerys; Plastic pipes: Wavin, Aliaxis

Exposure by end-markets

77% Construction (building and civil works in

Construction, French residential/ commercial in

Immobilier), 16% Telecom, 7% Media

35% Infrastructure, 35% Residential, 30% Non-

residential (50% new/50%RMI), based on

FY12 EBITDA

30% New construction, 46% Renovation (both mainly residential); 7%

Auto, 7% Industrial, 10% Consumers

86% Construction (mainly infrastructure and commercial), 14%

Concessions

70% Residential, 30% Non-residential, >10%

Infrastructure (60% New/40%RMI)

Division - sales split (FY12)

31% Construction, 39% Colas, 7% Immobilier, 16% Telecom, 7% TF1

41% Materials (aggregates, cement, asphalt, RMC), 28%

Products (precast, bricks, clays), 31% Distribution

(merchants, DIY)

22% Innovative Materials, 25% Construction

Products, 44% Building Distribution, 9%

Packaging

40% Construction, 23% Energy, 23% Roads, 14% Concessions (toll roads,

car parks, airports)

48% Bricks & Tiles Western Europe, 13% Bricks & Tiles Eastern Europe, 17% Pipes &

Paves Western Europe, 14% Pipes & Paves Eastern Europe, 8%

North America

Major regions (% of sales)

67% France, 14% Europe, 9% Americas, 6% Asia-Pacific, 4% Africa/Middle East

35% Western Europe, 50% North America, 15%

Developing economies (based on 2012 EBITDA)

27% France, 40% Other Western European

countries, 14% North America, 19% Emerging

countries and Asia

63% France, 24% Europe, 5% Americas,

4% Africa, 4% Rest of the World

65% Western Europe, 27% Eastern Europe, 8%

North America

in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn Financials FY12 FY12 FY12 FY12 FY12 Sales 33,843 18,084 43,198 39,418 2,356 EBITDA (clean in HY) 2,582 1,793 3,972 5,462 246 EBITDA margin adj. 8% 9% 11% 14% 11% FFO/net debt adj. 31% 27% 19% 26% 9% Net debt/EBITDA adj. 2.6 2.7 2.9 2.8 5.0 S&P rating trigger (FFO/debt) at least 35% 30% 25% 20% n.a.

LTM figure 26% (30.6.) 22% (30.06.) 19% (30.6.) 26% (31.12.) n.a. Moody's rating trigger FFO/debt mid-20s and

the low 30s RCF/ net debt 20% RCF/net debt 20% FFO/debt mid-teens debt to EBITDA towards 5.0x

LTM figure 20% (30.6.) 15% (30.06.) 17% (30.6.) 18% (30.6.) 8.9x (30.6.) Business risk* Satisfactory Strong Strong Strong n.a. Financial risk* Intermediate Intermediate Significant Intermediate n.a.

*according to S&P Source: Company data, Rating agencies, UniCredit Research

<date>



Industrial Goods & Services Aerospace & Defense

Summary The industry is likely to continue to face a mixed picture with favorable conditions in civil aerospace in light of robust traffic growth. In defense, military spending is on adownward trend in mature economies, and this is not expected to change in the nearterm. While emerging markets continue to build up their military base, competition fortenders is high and political risk elevated. Our coverage includes Bombardier, EADS, Finmeccanica and Thales.

Civil aerospace should continue to benefit from solid market conditions. IATA forecasts robustgrowth in air traffic (passenger: +6% vs. +5% in 2013E; cargo: +4% vs. +1% in 2013E) as well as the second-highest profits for the airline industry (USD 16bn; still-weak overall profitability of 2%) this century. Given the existing long-term trends of strong traffic growth in emerging markets and ongoing fleet replacement to more fuel-efficient aircraft, signs are that civil aircraft manufacturers are likely to continue to post strong order intake. There are exceptions to this: 1. business jets, which are still facing a challenging environment with weak demandand pressure on pricing and 2. four-engine long-haul aircraft (A380; B747), as airlines currently prefer the more efficient two-engine alternative (A330, B787). Further aspects to watch in civil aerospace are program risk (A350, CSeries) and the execution of the large order books (supply chain management). In defense, the picture is much less rosy, with muted demand from mature economies, which is not expected to change in the near term (industry players do not expect new significant military programs in Europe until the end of the decade).In emerging markets, there is growth in military spending, but competition levels are high andoperating in these markets comes at a higher risk.

CHART GALLERY AEROSPACE & DEFENSE

Order book reach as of 9M13 (LTM 9M13 sales)

0

2

4

6

8

10

12

Bombardier EADS Finmeccanica Thales

in Y

Correlation between passenger traffic growth and GDP

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

14%

16%

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

E

2014

E

Traf

fic g

rowt

h

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

Wol

rd G

DP

grow

th

Passenger Traffic Growth (LS) GDP Growth (RS)

0%10%20%30%40%50%60%70%80%90%

100%

Fin

mec

cani

ca

Tha

les

EADS

Bom

bard

ier

in %

of r

even

ues

Civil Defense

-

100.00

200.00

300.00

400.00

500.00

600.00

700.00

800.00

900.00

Africa Americas Asia andOceania

Europe Middle East

in U

SDbn

World military spending, 2012

1.2%

-4.7%

3.3% 2.0%

8.3%

Max Huefner, CFA (UniCredit Bank), +49 89 378-13212, [email protected] Source: Company data, IATA, IMF, Sipri, UniCredit Research

<date>




AEROSPACE & DEFENSE PEER COMPARISON

EADS Bombardier Finmeccanica Thales Ratings A2s/As/A-s Ba2n/BBn/BBn Ba1n/BB+s/BB+n A2n/BBB+p/-- Government Uplift Moody's: 1 No No Moody's: 3 Country France Canada Italy France Description Leading European

producer of commercial and military aircraft with

further activities in helicopters, space and

defense

Manufacturer of trains and planes (focus on business jets and regional commercial aircraft)

Industrial group with various activities notably in the

production of helicopters, as a supplier to commercial aircraft manufacturers, defense and

security electronics, energy and transportation

Supplier to aircraft manufacturers as well as defense contractor with

activities in transportation

Major owners Government of France (14%), Government of

Germany (11%), Government of Spain (4%)

No anchor shareholder Government of Italy (30%) Government of France (27%), Dassault (26%)

Segments (% of FY12 Sales) Airbus (67%), Astrium (10%), Eurocopter (10%), Cassidian (10%), Others

(3%)

Bombardier Aerospace (51%), Bombardier Transportation (49%)

Defence and Security Electronics (32%), Helicopters (24%),

Aeronautics (17%), Transportation (10%), Defence

Systems (7%), Space (6%), Energy (4%)

Aerospace & Transport (42%), Defence & Security

(51%), DCNS (7%)

Competitors Airbus: mainly Boeing, but in niches also Bombardier, Embraer; Astrium: Loral,

Boeing, Orbital, Lockheed Martin, Thales Alenia Space, Finmeccanica,

ISSR, Eurocopter: Agusta-Westland, Boeing, Bell Helicopters, Sikorsky; Cassidian: Lockheed

Martin, Dassault, Boeing, Northrop Grumman,

Thales, Motorola, General Dynamics,

Bombardier Aerospace: Cessna, Dassault, Embraer, Gulfstream (corporate jets), Airbus, Boeing, ATR, AVIC, Embraer, COMAC, MHI, Sukhoi (commercial jets),

Bombardier Transportation: Alstom, Ansaldo STS, CAF, CNR,

CSR, GE, Hitachi, Siemens, Stadler, Kawasaki

Defence and Security Electronics: Thales, BAE, Boeing,

Northrop Grumman, Lockheed Martin, Raytheon etc.

Helicopters: Eurocopter, Sikorsky, Boeing, Bell

Helicopters; Aeronautics: Boeing, General Dynamics, Bombardier,

Embraer, Airbus, Lockheed Martin, Northrop Grumman, BAE,

EADS, Transportation: Bombardier, Siemens, Alstom, GE, Hitachi, Thales, Defence Systems: General Dynamics,

BAE, Raytheon, Lockheed Martin, Northrop Grumman,

Thales, BAE, Space: Lockheed Martin, Boeing, Northrop

Grumman, Astrium Energy: GE, Siemens, Alstom, Toshiba etc.

Aerospace & Transport: in Space: MDA (Loral), EADS (Astrium), Orbital Sciences

Corp; in Avionics: Honeywell, Rockwell Collins, Panasonic Avionics, Lockheed Martin,

Raytheon, L3Com; in Transportation Systems:

Siemens, Alstom, Ansaldo STS, Bombardier, GE

Defence & Security: in Air Operations: Lockheed

Martin, Raytheon, Finmeccanica, Northrop

Grumman; in Land Defence: MBDA, Raytheon, Lockheed Martin; in Defence Mission Systems: Finmeccanica, BAE, Lockheed Martin, in Defence and Security C4I

Systems: Harris, ITT, General Dynamics

Civil or Defense Focus Predominantly civil (over 75% of sales)

Civil only Predominantly defense (over 80% of sales)

Relatively equal split

Sales by region Europe (37%), Asia-Pacific (32%), North America (14%), ROW (17%)

Europe (41%), North America (37%), Asia-Pacific (13%), ROW

(9%)

Europe (57%), North America (24%), ROW (19%)

Europe (66%), Asia-Pacific (15%), North America (10%),

ROW (9%) Assets by region Europe (95%) with France

(38%), Germany (28%), UK (19%)

North America (56%), Europe (42%), ROW (2%)

Europe (78%), North America (22%)

n/a

in EUR mn in USD mn in EUR mn in EUR mn Financials FY12 FY12 FY12 FY12 Order backlog 566,500 66,600 44,908 29,658 Sales 56,480 16,768 17,218 14,158 Order backlog in years 10.0 4.0 2.6 2.1 EBITDA 3,937 1,170 1,439 1,415 EBITDA Margin 7.0% 7.0% 8.4% 10.0% Net debt -6,305 2,509 4,009 -1,057 Net Debt / EBITDA Net Cash 2.1x 2.8x Net Cash Business risk* Strong Satisfactory Satisfactory Satisfactory Financial risk* Modest Aggressive Significant Modest


<date>




Capital Goods Summary An improving macroeconomic environment should be supportive for the capital goods

sector in 2014. However, it may take some time until the positive impacts are felt by the companies, particularly those with a bias towards late-cycle markets. Hence, the near-term focus remains on reshaping the cost structures. We expect increasing M&A andshareholder remuneration only once visibility has improved. The companies we cover are ABB, Alstom, Areva, Atlas Copco, GEA, Schneider, Siemens and Voith.

The 3Q13 earnings season revealed a mixed picture in the capital goods sector. On the backof the improving macroeconomic environment, evidence has been increasing that a recoveryof the short-cycle businesses is slowly materializing. However, late-cycle activities in markets such as power remain muted, reflecting the prevailing macroeconomic uncertainties. Withdemand for capital goods being sensitive to business sentiment and economic growth,prospects indeed seem to be improving for 2014, as underpinned by the recent PMI data. In particular, an economic recovery in Europe should be beneficial to our covered universe,which tends to still have a relatively high exposure to Europe. This should also help to offsetlower growth prospects overall in the emerging markets. In terms of end-markets, prospects continue to be strong in healthcare and have improved in manufacturing, while spending inmining and power remains constrained. In the short term, the focus on cost-cutting should help sustain margins until the improved business environment feeds through to the P&Ls.

CHART GALLERY CAPITAL GOODS

40

45

50

55

60

Jan-

12Fe

b-12

Mar

-12

Apr-1

2M

ay-1

2Ju

n-12

Jul-1

2A

ug-1

2S

ep-1

2O

ct-1

2N

ov-1

2D

ec-1

2Ja

n-13

Feb-

13M

ar-1

3Ap

r-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Eurozone Manufacturing Index US Manufacturig PMI China PMI

SXNP Index

150

200

250

300

350

400

May

-10

Aug

-10

Nov

-10

Feb-

11

May

-11

Aug

-11

Nov

-11

Feb-

12

May

-12

Aug

-12

Nov

-12

Feb-

13

May

-13

Aug

-13

Nov

-13

Global Corporate Capex by Sector

-15%

-10%

-5%

0%

5%

10%

Man

ufac

turin

g

Hea

lthca

re

Ret

ailin

g

Food

,be

vera

ge &

toba

cco

Con

stru

ctio

n &

prop

erty

Util

ities

Med

ia &

Tech

nolo

gy

Tran

spor

tatio

n

Nat

ural

Res

ourc

es

2014

fore

cast

, yoy

cha

nge

Sales by end-market

0%

20%

40%

60%

80%

100%

120%

AB

B

Als

tom

Arev

a

Atla

sC

opco

Sch

neid

er

Sie

men

s

Automotive Construction General IndustryMedical Mining/Metals/Minerals Power & Process Telecom/IT Transport Other

Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211, [email protected] Source: Bloomberg, UniCredit Research

<date>




CAPITAL GOODS SECTOR PEER COMPARISON

ABB Alstom Areva Atlas Copco Schneider Siemens Rating A2s/As/BBB+s Baa3s/BBBn/-- --/BBB-s/-- A2s/As/-- A3s/A-cwn/-- Aa3n/A+s/As Description Global leader in

power and automation

technologies

Leading player in power generation,

power transmission and rail

infrastructure

World's leading nuclear services

group

World leading provider of industrial

productivity solutions

World leading company in energy

management

Europe's largest company in

electrical engineering and

electronics Competitors PP: Siemens,

Alstom, Schneider; PS: Siemens, Alstom; DA:

Alstom, Fanuc, Kuka; LV: Eaton,

Legrand; PA: Emerson, Honeywell

Thermal Power: GE, Siemens; Transport: GE,

Bombardier, Siemens; Grid: ABB, Siemens,

Schneider; Renew. Power: GE,

Siemens, Vestas

AtomEnergoProm, GE/Hitachi,

Toshiba, Urenco, Rosatom

Compressor.: Ingersoll-Rand, Hitachi; Mining:

Sandvik; Construction:

Sandvik, Doosan, Caterpillar;

Industrial: Apex Tool, Ingersoll-

Rand

Power: ABB, Legrand, Eaton,

Siemens; Industry: Siemens, Rockwell;

IT: Eaton, Emerson; Buildings:

Siemens, JC, Honeywell

Energy: GE, Alstom, ABB; Industry: ABB,

Schneider, Emerson;

Infrastructure: Alstom, ABB,

Schneider, GE Healthcare: GE,

Philips Exposure by end-markets (of sales, estimated)

Power & Process 47%, Construction

8%, Automotive 6%, General Industry 5%, Mining 5%

73% Power & Process, 27%

Transport

100% Power Mining 29%, Construction 25%, General Industry 20%, Power & Process 9%,

Automotive 5%

Construction 38%, Power & Process

25%, General Industry 22%, IT

15%

Power & Process 36%, Healthcare

18%, General Industry 15%,

Transport 12%, Construction 10%,

Automotive 3% Division - sales split Power Products

25%, Discrete Automation and

Motion 22%, Process

Automation 19%, Power Systems

18%, Low Voltage Products 16%

(FY12)

Thermal Power 45%, Transport 27%, Grid 19%,

Renewable Power 9% (FY12/13)

Reactors & Services 37%,

Front End 22%, Back End 19%,

Mining 15%, Renewable

Energies 6%, Corporate 2%

(FY12)

Compressor Technique 38%, Mining and Rock

Excavation Technique 37%,

Construction Technique 14%,

Industrial Technique 11%

(FY12)

Power 37%, Infrastructure 22%,

Industry 19%, IT 15%, Buildings 7%

(FY12)

Energy 36%, Industry 23%,

Infrastructure & Cities 23%,

Healthcare 18% (FY12/13)

Major sales regions (FY12) Europe 36%, Americas 27%,

Asia 27%, Middle East/Africa 10%

Europe 42%, Asia/Pacific 22%, Americas 21%, Middle East & Africa 15 % (FY12/13)

Europe 60%, Americas 19%,

Asia/Pacific 19%, Africa/Middle East

2%

Americas 30%, Europe 31%,

Asia/Australia 27%, Africa/Middle East

12%

W. Europe 30%, Asia-Pacific 27%, N. America 25%,

Others 18%

Europe 52%, Americas 28%,

Asia/Australia 20% (FY12/13)

in USD mn in EUR mn in EUR mn in SEK mn in EUR mn in EUR mn Financials FY12 (31/12) FY12/13 (31/03) FY12 (31/12) FY12 (31/12) FY12 (31/12) FY12/13 (30/09) Sales 39,336 20,269 9,342 90,533 23,946 75,882 EBITDA rep. 5,240 1,732 1,180 21,930 3,680 8,216 EBITDA margin adj. 14% 8% 11% 25% 17% 12% FFO adj./net debt adj. 81% 18%* 9% 128% 41% 84% Net debt adj./ EBITDA adj. 1.0 3.8* 6.1 0.6 1.7 1.0 S&P rating trigger (FFO/debt) 45% 30-45% 10% 50% 35% 45-60% LTM figure 58% (LTM 3Q13) 18% (FY12/13) 5% (LTM 1H13) 126% (FY12) 39% (FY12) 107% (FY12/13) Moody's rating trigger 40%

(RCF/net debt) 10-15%

(RCF/gross debt) n.a. above 40%

(RCF/net debt) 15% (FCF/debt) above 45%

(RCF/net debt) LTM figure 37% (LTM 3Q13) 13% (FY12/13) n.a. 51% (LTM 3Q13) 21% (LTM 1H13) 33% (LTM 3Q13) Business risk according to S&P Strong Satisfactory Fair Strong Strong Strong Financial risk according to S&P Modest Intermediate Aggressive Modest Intermediate Modest

*Alstom on gross debt basis Source: Company data, Rating agencies, UniCredit Research

<date>




Industrial Transportation Summary Despite its strong performance in 2013, we keep our overweight rating on the Industrial

Transportation sector as we expect the sector's credit metrics to continue to improve as a result of higher traffic activity and trade/cargo volumes supported by price increases.Moreover, we expect industrial transportation companies located in Southern Europe to continue to benefit from economic/rating stabilization in the periphery given the still-high exposure of many issuers to their domestic economies and sovereign-rating links. We cover toll-road operators Abertis (Spain), Atlantia (restricted, Italy), SIAS (Italy), ASF and Cofiroute(both controlled by French Vinci), APRR (France) and BCR (Portugal). We also cover global/European logistics and postal service providers Deutsche Post and Post NL as well asAvanza, mainly a provider of public bus transport services in Spain.

Road and air traffic volumes in Europe are expected to continue their recovery in 2014 on theback of forecast, though still modest, real GDP growth in all major European countries (seetable above). However, with the further decline in CPI in the euro area in 2013 (vs. 2.5% in 2012), 2014 price increases will likely provide less support for sector revenues next year(most concession tariff formulas contain yearly price adjustments linked to a factor of CPI).Maintenance capex remains highly predictable, particularly for toll-road operators, and should remain flat yoy, whereas expansion capex is expected to increase slightly in 2014 givenexpected airport and toll-road tender activity (outside Europe). Based on thestabilization/improvements in credit metrics already achieved in 2013, we expect companiesin the sector to use overall improving FCF generation for higher shareholder remunerationand/or M&A projects with deleveraging to derive primarily from higher yoy returns.

CHART GALLERY INDUSTRIAL TRANSPORTATION

Toll road traffic split by country (2012)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Italy France Spain Portugal

Light vehicles Heavy vehicles

Tolll road traffic activity 9M13 (yoy)

1.3%

-1.9%

0.4%0.9%

-0.1%

-3.1%

-4.4%-5%

-4%

-3%

-2%

-1%

0%

1%

2%

3%

Aber

tis

Atla

ntia

*

AP

RR

AS

F/Es

cota

Cof

irout

e

SIA

S

BC

R

Light vehicle Heavy vehicle Total

Basic letter stamp prices in EUR (domestic)

0.00

0.20

0.40

0.60

0.80

1.00

1.20

Nor

way

Den

mar

k

Sw

itzer

land

Finl

and

Bel

gium U

K

Itlay

Sw

eden

Fran

ce

Aus

tria

Luxe

mbo

urg

Net

herla

nds

Ger

man

y

Portu

gal

Spa

in

average stamp duty

-15%

-10%

-5%

0%

5%

10%

15%

20%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E

Global real GDP growth yoy Global trade growth (goods only)

* Italian concessions only Source: IMF World Economic Outlook October 2013, Company data, UniCredit Research

Christian Aust, CFA, +49 89 378-12806, [email protected]

<date>




INDUSTRIAL TRANSPORTATION PEER COMPARISON (I)

Abertis APRR ASF Cofiroute SIAS Ratings --/BBBn/BBB+n Baa3s/BBB-s/BBB+s Baa1s/BBB+s/-- --/BBB+s/-- Baa2n/--/-- Country Spain France France France Italy

Shareholder structure La Caixa (23.1%),

OHL (18.93%), CVC (15.55%)

100% Eiffarie (Eiffage 50%+1; Macquarie

50%-1) Vinci (100%)

Vinci (83.3%), Colas (16.7%; part of

Bouygues)

Gavio Family (directly and indirectly

69.75%)

Segments (in % of sales) Toll Roads (90%), Telecom (10%)

Toll revenues (86%); Construction activities

(11%); Retail facilities,

telecommunications and other (3%)

Tolls (85%), Concession operators

(13%), Fees (2%)

Toll receipts (89%), Construction revenue (10%), Other revenue

(2%)

Motorway (93%), Technology (2%), Construction and engineering (1%),

Other (4%)

Major sales regions

Spain (39%), France (33%), Brazil (19%), Chile (7%), Others

(2%)

East and South East of France

West and South France, Provence

West France / 10% shareholder in

German Toll Collect GmbH

North Italy

Major concessions (lifetime)

Acesa, Aumar (Spain avg. 2024);

Sanef/Sapn (2029); Arteris (avg. 2029),

Chile (2024)

APRR (2032), AREA (2032)

ASF (2033), Escota (2027)

Interurban network (2031), A86 Duplex

(2086)

SATAP, SALT 9 concessions with maturities ranging from 2016-2040

Total tolled motorways

Spain (1,760km), France (1,901km), Brazil (3,226km),

Chile (773km)

2,280km 3,173km 1,100km + 11km toll tunnel

975km (+118km under construction)

Traffic split (toll roads) Spain: LV (77%), HV

(23%); France: LV (84%), HV (16%)

Light Vehicle (86%), Heavy Vehicle (14%)




in EUR mn in EUR mn in EUR mn in EUR mn in EUR mn Financials FY12 FY12 FY12 FY12 FY12 Sales 4,039 2,227 3,858 1,341 915 EBITDA 2,459 1,398 2,221 858 570 EBITDA margin 60.9% 62.8% 57.6% 64.0% 62.3% RCF/net debt 5.0% -6.7% 9.4% 8.2% 10.6% Total debt/capital 70.2% 101.3% 94.7% 62.8% 58.8% FFO/net debt 9.7% 10.9% 11.0% 17.3% 17.0% Net debt/EBITDA 5.7x 4.9x 5.2x 3.7x 3.4x S&P ratings trigger FFO/debt 12.0% 9.0% 20.0% 2 20.0%2 n.a. S&P adj. LTM 11.8% 8.9% 11.7% (26.0%2) 17.3% (26.0%2) n.a. Moody's ratings trigger FFO/debt n.a. 5.0% 1 8.0% n.a. low teens Moody's adj. LTM n.a. 5.6% 1 11.6% n.a. 15.5% Business risk according to S&P Strong Excellent Excellent Excellent not rated Financial risk according to S&P Significant Aggressive Aggressive Significant not rated

1. incl. debt at Eiffarie level; 2. rating pressure if Vinci's adj. FFO/debt falls to <20% Source: Company data, Rating agencies, UniCredit Research

<date>




INDUSTRIAL TRANSPORTATION PEER COMPARISON (II)

Deutsche Post PostNL Avanza BCR Ratings Baa1p/--/BBB+s Baa3n/BBB-n/-- B1s/B+s/-- Ba2n/--/BBBn Country Germany Netherlands Spain Portugal

Shareholder structure KfW (20.1%), remainder free-float Free float Grupo ADO (93%),

management (7%)

Mello (33.0%), Apollo/Arcus (20.7%),

Tagus (Mello/Arcus JV; 38.3%)

Segments (in % of sales)

Global Forwarding Freight (28%), Supply

Chain (26%), Mail (25%), Express (23%),

Corporate Center/Other (-2%)

Mail (53%), International (38%), Parcels (17%),

Mail other (6%), Intercompany (-13%)

Urban transport (40%), Suburban transport (44%),

Long distance transport (11%), Bus stations (4%)

Light Vehicle traffic (>95%)

Major sales regions

Germany (30%), Europe excl. Germany (32%), Americas (18%), Asia

Pacific (16%), Other (4%)

NL (63%), UK (18%), Italy (5%), Germany (12%),

RoW (2%)

Spain; 65% collected directly from passengers,

35% from public authorities Portugal

Major concessions (lifetime) n.a. n.a. Santander; avg. remaining

concession life ca. 12 years (total of 66)

Brisa (2035), 11 motorways covering

1,100km

Major competitors FedEx, UPS, TNT Express, Austrian Post

Deutsche Post, FedEx, UPS, Poste Italiane,

Royal Mail

Car, other means of public transport, National Express

(Long distance)

A17 Brisal, A8 Atlantico, Costa de Prata, non-tolled routes, public

transport in EUR mn in EUR mn in EUR mn in EUR mn Financials FY12 FY12 FY12 FY12 Sales 55,512 4,330 427 447 EBITDA 4,004 541 83 320 EBITDA margin 7.2% 12.5% 19.3% 71.7% RCF/net debt 16.2% 2.0% 12.6% 8.3% Total debt/capital 59.0% 72.6% 130.0% 79.0% FFO/net debt 14.7% -2.3% 11.9% 8.3% Net debt/EBITDA 2.9x 3.5x 6.2x 6.7x S&P ratings trigger by 2015 FFO/debt n.a. 25.0% 9.0% n.a. S&P adj. LTM n.a. 18.9% n.a. n.a. Moody's ratings trigger by 2015 RCF/debt 13.0% debt/EBITDA: 3.5x net debt/ EBITDA: 6x net debt/ EBITDA: 8.0x Moody's adj. LTM 16.7% 5.56x 6.5x 6.9x Business risk according to S&P Not rated Satisfactory Satisfactory Not rated Financial risk according to S&P Not rated Significant Highly leveraged Not rated


<date>




Packaging Summary We do not expect the packaging universe to benefit significantly from a potential

strengthening in the macro environment given its exposure to largely defensive end-markets. Moreover, input cost pressure is not anticipated to play a major role in 2014. Therefore, attention is directed to potential larger M&A activity and increasedshareholder remuneration. Our coverage includes Ardagh, Bormioli Rocco, Gerresheimer, Guala Closures, Rexam and Smurfit Kappa.

Given the exposure primarily to defensive end-markets, we think that a gradual recovery in the European economy should, overall, have a lower impact on our covered packaging universe than on other, more cyclical, industrial sectors. Still, we would expect to see a positive impact on the performance of Bormioli Rocco given its heavy exposure to Southern Europe, which has been hit hardest by the recent economic weakness in Europe. In addition, increasing demand levels should bode well for sectors that are facing overcapacities and have exposure to industrial sectors (for example, metal packaging is also used for paint cans).While difficult to predict, we anticipate relatively low volatility in input cost during 2014 (i.e.UniCredit forecasts Brent crude oil at USD 103/bbl at FYE 2014 compared to USD 108/bbl currently). In this respect, we note that the industry's focus on cost reductions has helped toincrease margin resilience to volatility in input cost. As usual, potential larger, opportunisticM&A deals in the sector represent a major risk factor for credit profiles. Also, shareholder remuneration might be increased albeit most players have been rather prudent in this respect.

CHART GALLERY PACKAGING

Consumer packaging by end use

Beverages, 18%

Healthcare, 6%

Cosmetics, 5%

Other, 20%

Food, 51%

Consumer packaging by material

Paper and Board, 35%

Rigid plastics, 27%

Others, 2%Beverage cans,

5%

Other metal, 9%

Flexible plastics, 10%

Glass, 12%

Sales by region*

0%

20%

40%

60%

80%

100%

120%

Ard

agh

Bor

mio

Ger

resh

eim

er

Gua

la

Rex

am

Sm

urfit

Europe North America Latin America Asia-Pacific Other

Sales by end-market*

0%

20%

40%

60%

80%

100%

120%

Ard

agh

Bor

mio

liR

occo

Ger

resh

eim

er

Gua

laC

losu

res

Rex

am

Sm

urfit

Home & Personal Care Food & Beverage Pharma & HealthcareIndustrial Other

* For Ardagh does not include VNA acquisition Source: Company data, PIRA, Rexam, UniCredit Research

Max Huefner, CFA (UniCredit Bank), +49 89 378-13212, [email protected]

<date>




PACKAGING PEER COMPARISON

Ardagh Bormioli Rocco Gerresheimer Guala Closures Rexam Smurfit Kappa Ratings B2n/Bs/-- B2s/BB-s/-- Ba1p/BBB-s/-- B2s/Bs/-- Baa3s/BBB-s/-- Ba2p/BBp/BBp Country Ireland Italy Germany Italy UK Ireland Description Manufacturer of glass

and metal containers Manufacturer of

tableware and glass and plastic packaging

products for pharmaceutical, food &

beverage and perfumery and

cosmetics industry

Leading manufacturer of

specialty products and packaging for pharma/healthcare

and cosmetics industry

Producer of metal closures. These include safety,

standard and wine closures. Main use of Guala's closures

are for spirits

Global supplier of beverage

cans and healthcare packaging;

healthcare is planned to be

sold

Integrated producer of paper-based packaging

Owners Paul Coulson (60%), Niall Wall (9.5%),

other senior management (21%)

Vision Capital and senior management

(100%)

100% free float DLJ Merchant Banking Partners

(58%), Intesa Sanpaolo (20%),

management (12%), HVB capital

partners (11%)

100% free float 100% free float

Segments (in % of sales) 50% Glass Packaging; 50% Metal Packaging;

excludes VNA acquisition

Tableware (38%), Pharmaceutical (35%), Perfumery & Cosmetics

(14%), Food & Beverages (12%)

Plastic Systems (34%), Moulded

Glass (30%), Tubular Glass

(27%), Life Science Research (8%)

Closures (99%), PET (1%)

Beverage Cans (90%),

Healthcare (10%)

Europe (81%); Americas

(19%); does not include

contribution from SKOC

(acquisition in Americas)

End Markets (in % of sales) 59% Food; 15% Beer; 11% Wines & Spirits; 3% Beverages; 12%

Other

Hotel, restaurant, catering (38%),

pharma/healthcare (35%), perfumery &

cosmetics (14%), food & beverage (12%)

Pharma and healthcare (83%), cosmetics (12%),

other (5%)

Pre-dominantly Food & Beverage

Beverage (~90%),

healthcare, pharma (~10%)

FMCG (60%), industrials

(35%), other (5%)

Geographies (in % of sales) 55% Northern Europe; 16% Other Europe; 21% North America; 8% ROW

Italy (36%), Rest of Europe (44%), Rest of

World (21%)

Europe (57%), Americas (23%),

Emerging markets (18%), Other (2%)

Europe (57%), Latin & North

America (17%), Asia (13%),

Oceania (13%)

US (34%), Key European

markets (21%), Brazil (16%), ROW (29%)

77% Western Europe; 19% Americas; 4% Other (CEE)

Revenue Concentration Top 10 customers in Glass accounted for

27% of PF FY12 revenues and for 31% of PF FY12 sales in

Metal

Top 10 customers accounted for 20% of

FY12 sales

Top 10 customers accounted for 33%

of FY12 sales

Top 5 customers are estimated to have a share of around 1/3 of group sales

Top 10 customers

accounted for 71% of revenues

Estimated that Top 10

customers account for

below 10% of sales

Main Competitors Glass Packaging: O-I, Verallia, Vitro, Fevisa;

Metal Packaging: Crown, Mivisa

Envases, Silgan, Ball, Visy Packaging

Tableware: Vetreria di Borgonovo, Libbey,

ARC; Pharma: Gerresheimer, Rexam, Capp-Plast; Perfumery & Cosmetics: Pochet,

BU Brosse, Luigi Bormioli; Food &

Beverages: Owens Illinois, Vetro Balsamo,

Saint Gobain

Plastic Systems: Becton Dickinson,

Jabil Circuit, Rexam ; Moulded Glass: Desjonquères, Bormioli Rocco; Tubular Glass:

Schott, Nipro; Life Science Research:

Duran, Corning

Amcor, Torrent, GCS etc.

Beverage Cans: Ball, Crown, Can

Pack, MCC; Healthcare:

Aptar, Gerresheimer,

Philipps Medisize etc.

Europe: DS Smith, Mondi, Saica, Jass, Pro-group,

International Paper;

Americas: Cartocor,

International Paper, Georgia

Pacific, Packaging

Corporation of America

M&A risk High Low Medium Medium Medium Medium in EUR mn in EUR mn in EUR mn in EUR mn in GBP mn in EUR mn Financials FY12 FY12 FY11/12 FY12 FY12 FY12 Sales 4,144 548 1,219 498 4,312 7,335 EBITDA 679 70 237 103 664 1,020 EBITDA margin 16% 13% 19% 21% 15% 14% Net Debt 3,511 237 367 461 1,176 2,792 Net adjusted leverage 6.7 3.7 2.3 4.5 1.7 3.5 Business Risk* Satisfactory Fair Satisfactory Fair Satisfactory Satisfactory Financial Risk* Highly Leveraged Aggressive Intermediate Highly Leveraged Intermediate Aggressive

*according to S&P Source: Company data, Rating agencies, UniCredit Research

<date>




Basic Ressources iBoxx Basic Ressources Sector Composition

IBOXX EUR BASIC RESSOURCES ISSUANCE ACTIVITY

GLEN

LN

GLEN

LN

GLEN

LN

BHP

BHP

BHP

AALL

N

AALL

N

AALL

N

AALL

N

VALE

BZ RIOL

N

MNDI

LN

VKFP TK

AGR

TKAG

R MTNA

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12Fe

b-12

Mar

-12

Apr

-12

May

-12

Jun-

12Ju

l-12

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Issu

ance

in E

UR

mn


LATEST IBOXX EUR BONDS ISSUED

Issue Date Bond Notional (EUR mn)09/30/13 GLENLN 3.375% Sep-20 75004/30/13 BHP 3.125% Apr-33 75004/29/13 AALLN 2.5% Apr-21 75012/11/12 RIOLN 2% May-20 75012/11/12 RIOLN 2.875% Dec-24 50011/19/12 GLENLN 2.625% Nov-18 1,00011/19/12 GLENLN 1.75% May-16 1,25009/27/12 MNDILN 3.375% Sep-20 50009/25/12 BHP 2.25% Sep-20 1,25009/25/12 BHP 3.25% Sep-27 75009/18/12 AALLN 2.5% Sep-18 75007/10/12 VALEBZ 3.75% Jan-23 75006/07/12 AALLN 2.75% Jun-19 750


IBOXX EUR BASIC RESSOURCES REDEMPTIONS

GLEN

LNGL

ENLN

BHP

AALL

NTK

AGR

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

14Ju

l-14

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr

-15

May

-15

Jun-

15Ju

l-15

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Red

empt

ions

in E

UR

mn


UPCOMING IBOXX EUR BOND REDEMPTIONS

Maturity Bond Notional (EUR mn)02/26/14 BHP 4.375% Feb-14 60004/17/15 AALLN 5.875% Apr-15 1,00004/23/15 GLENLN 7.125% Apr-15 75005/27/15 GLENLN 6.25% May-15 60004/04/16 BHP 6.375% Apr-16 1,00005/19/16 GLENLN 1.75% May-16 1,25006/03/16 MTNA 10.625% Jun-16 1,00012/02/16 AALLN 4.375% Dec-16 75002/14/17 VKFP 4.25% Feb-17 65003/22/17 GLENLN 5.25% Mar-17 1,25004/03/17 MNDILN 5.75% Apr-17 50006/13/17 GLENLN 5.25% Jun-17 50011/17/17 MTNA 5.875% Nov-17 1,000


IBOXX EUR BASIC RESSOURCES OUTSTANDING

0

5,000

10,000

15,000

20,000

25,000

Jan-99 Jan-01 Jan-03 Jan-05 Jan-07 Jan-09 Jan-11 Jan-13

Out

stan

ding

in E

UR

mn

GLENLN BHP AALLN VALEBZRIOLN MNDILN VKFP ALTKAGR MTNA UPMKYM STERV


CURRENT IBOXX OUTSTANDING

Issuer (Ticker) Outstanding (EUR mn) No of Bonds

Glencore (GLENLN) 7,350 8BHP Billiton (BHP) 5,750 6Anglo American (AALLN) 4,750 6Vale (VALEBZ) 1,500 2Rio Tinto (RIOLN) 1,250 2Mondi (MNDILN) 1,000 2Vallourec (VKFP) 650 1


<date>




iBoxx Mining Market Spreads

MINING 5Y SENIOR CDS HISTORY

0

50

100

150

200

250

300

350

Nov-12 Feb-13 May-13 Aug-13 Nov-13

AALLN BHP GLENLN

Source: markit, UniCredit Research

5Y CDS BETA VS. ITRAXX MAIN (WEEKLY CHANGES/5YEARS)

0.0 1.0 2.0 3.0 4.0 5.0 6.0

BHP

AALLN

GLENLN


MINING CASH CURVES

GLENLN

BHP

AALLN

-20

0

20

40

60

80

100

120

140

160

0 5 10 15 20 25mDur

ASW

in b

p


QUARTERLY BOND SPREAD MOVEMENTS

BHP

6.3

75%

Apr

-16

BHP

2.12

5% N

ov-1

8

BH

P 2.

25%

Sep

-20

AALL

N 5

.875

% A

pr-1

5

BHP

3% M

ay-2

4

GLE

NLN

6.2

5% M

ay-1

5

GLE

NLN

7.1

25%

Apr

-15

BHP

3.2

5% S

ep-2

7

GLE

NLN

1.7

5% M

ay-1

6

AAL

LN 4

.375

% D

ec-1

6

BH

P 3.

125%

Apr

-33

AAL

LN 2

.5%

Sep

-18

GLE

NLN

5.2

5% J

un-1

7

GLE

NLN

5.2

5% M

ar-1

7

AALL

N 3

.5%

Mar

-22

AAL

LN 2

.5%

Apr

-21

AALL

N 2

.75%

Jun

-19

GLE

NLN

3.3

75%

Sep

-20

GLE

NLN

4.6

25%

Apr

-18

GLE

NLN

2.6

25%

Nov

-18

0

20

40

60

80

100

120

140

160

180

200

ASW

in b

p

Red bar: 1quarter spread range, line: current spread, box: average spread Source: iBoxx, UniCredit Research

CDS SPREAD VS. RATING

Glencore

BHP Billiton

Anglo American

0

20

40

60

80

100

120

140

160

180

1 2 3 4 5 6 7 8 9 10

5Y C

DS

in b

p

AAA AA+ AA AA- A+ A A- BBB+ BBB


CDS SPREAD VS. LEVERAGE

Glencore

BHP Billiton

Anglo American

0

20

40

60

80

100

120

140

160

180

0 1 2 3 4 5 6 7 8Leverage

5Y C

DS

in b

p


<date>




Anglo American Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB/BBB+ NEG/STABLE/STABLE Weakening Underweight iBoxx/--/iTraxx S18 GBP 18.7bn

Company Description: Anglo American (www.angloamerican.co.uk), headquartered in the UK, is one of the world's largest diversified mining companies. The group's product portfolio includes platinum (of which, the company is the world's largest producer, accounting for about 40% of world supply), diamonds (through its 85% ownership in De Beers, the world's leading diamond company), copper (with interests in six operations in Chile), nickel (including two nickel operations in Brazil), iron ore and manganese (the world's fourth largest iron ore producer), metallurgical coal (Australia's second-biggest producer of metallurgical coal and the third-largest global exporter), and thermal coal (with operating mines in South Africa and Colombia). Most of the company's assets are located in emerging markets, notably in South Africa (33% of non-current assets in FY12). In FY12, the company generated 50% of its revenues in Asia/Pacific, 27% in Europe, 12% in Africa, 7% in South America and 4% in North America. Anglo employs about 100,000 permanent employees. Its shares are widely spread.

Moody's (08/13): Moody's would consider downgrading Anglo American's ratings if the company's cash flow generation were to further materially weaken, leading to a sharp deterioration in its credit metrics, including CFO-dividends/debt falling to less than 15% on a sustained basis, gross debt/EBITDA materially exceeding 3.0x, and EBIT/interest coverage ratio falling below 4.5x on a sustained basis. Such a development could result from a further material deterioration in the operating environment, including a protracted weakness in commodity prices and/or further significant investment cost overruns/delays at the group's main projects, such as Minas Rio or Grosvenor. Negative rating pressure could also develop as a result of a more hostile environment for mining companies in South Africa. S&P (04/13): S&P's stable outlook reflects its expectation that Anglo should be able to maintain adjusted FFO to debt of about 35% or higher in 2013 and a minimum of 30% in 2014 under its pricing assumptions. It sees the possibility of a further downgrade in the next 12 months as remote, given the company's "strong" liquidity. It also believes that the ratings have some financial headroom in case of a deterioration of the business risk profile, for example, in case of a modest escalation of country risk related to South-Africa.

SALES BY SEGMENT (LTM1H13)

Nickel1%

Platinum17%

Iron Ore and Manganese

18%

Diamonds 18%

Other Mining and Industrial

10%

Thermal Coal10%

Metallurgical Coal11%

Copper15%

EBITDA BY SEGMENT

-1,000

0

1,000

2,000

3,000

4,000

5,000C

oppe

r

Nic

kel

Pla

tinum

Iron

Ore

and

Man

gane

se

Met

allu

rgic

alC

oal

Ther

mal

Coa

l

Dia

mon

ds

Oth

erM

inin

g an

dIn

dust

rial

in U

SD

mn

FY10 FY11 FY12 LTM 1H13

Strengths/Opportunities – Large-scale, long-life and low-cost assets – Good product diversification, albeit somewhat lower than that of BHP – Positive impacts from the restructuring of the underperforming platinum

business (recovery expected also as FY12 was impacted by strikes) – Stronger focus on cash flow (with USD 1.3bn cash flow uplift target by

FY16) should positively impact cash flow in the medium term – Moderate financial policy and strong liquidity

Weaknesses/Threats – Relatively high country-risk exposure, particularly given the company's

concentration of operations in South Africa (about 54% of profit by origin) – Project-execution risks (in particular, currently related to its Minas-Rio iron

ore project in Brazil) – Substantial minority holdings in key iron ore asset, Kumba Iron Ore, and

key copper asset, Anglo American Sur – Execution risk with regards to the restructuring of the platinum business – Increasing debt levels in FY13 and FY14 due to high capex

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0358158052 AALLN 5.875% 17/04/15 Baa2/BBB/BBB+ 1,000 -- XS0470632646 AALLN 4.375% 02/12/16 Baa2/BBB/-- 750 -- XS0830380639 AALLN 2.5% 18/09/18 Baa2/BBB/-- 750 -- XS0789283792 AALLN 2.75% 07/06/19 Baa2/BBB/BBB+ 750 -- XS0923361827 AALLN 2.5% 29/04/21 Baa2/BBB/-- 750 -- XS0764637194 AALLN 3.5% 28/03/22 Baa2/BBB/BBB+ 750 --

Covenant: The company is not subject to financial covenants in its credit facilities and bonds at the parent-company level. It has, however, covenants at the subsidiary-level.

Source: Rating agencies, company data, iBoxx, UniCredit Research

<date>



FINANCIAL STATISTICS

USD mn 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 24,991 25,470 26,311 20,858 27,960 30,580 13,636 28,680 14,405EBIT margin adj. 32.6% 33.7% 30.6% 21.5% 30.7% 31.9% 24.8% 19.6% 21.6%EBITDA rep. 9,321 10,130 9,368 6,077 12,164 11,589 3,946 7,130 3,466EBITDA margin adj. 38.3% 39.2% 36.3% 29.7% 37.6% 38.4% 32.9% 27.9% 30.7%Net income 6,922 8,172 6,120 2,912 8,119 7,922 2,007 -564 1,153Funds from operations (FFO) 8,599 7,697 7,638 4,500 7,505 9,064 3,478 5,948 3,467Operating cash flow 8,209 7,009 7,615 3,590 7,125 8,905 2,416 5,422 2,732Free cash flow rep. (after Capex) 5,299 3,078 2,469 -1,017 1,845 2,702 -70 -608 335Dividend payment -3,199 -2,266 -2,346 -472 -919 -2,222 -1,312 -2,237 -1,291Retained cash flow (RCF) 5,400 5,431 5,292 4,028 6,586 6,842 2,166 3,711 2,176Acquisitions / disposals 801 -1,112 -6,353 2,500 2,238 5,511 -1,735 -4,575 -430Share buy back / issues -3,590 -6,054 -608 -25 292 -347 -219 -229 -54Total debt rep. 6,248 8,299 13,995 14,315 13,439 12,873 13,631 17,635 17,077Net debt rep.(excl. cash used for oper.) 4,244 6,170 12,224 12,046 8,038 7,241 8,494 9,555 9,974Adj. for pensions 598 322 341 602 480 546 509 1,219 1,141Adj. for operating leases and others 1,446 1,306 1,384 1,858 1,616 1,781 1,781 1,520 1,520Net debt adj. 6,287 7,798 13,948 14,506 10,134 9,568 10,784 12,293 12,635

DEBT LEVERAGE

0%

40%

80%

120%

160%

2006

2007

2008

2009

2010

2011

2012

1H13

0

1

2

3

4

5FFO adj. / net debt adj. Net debt adj. / EBITDA adj. (RS)

DEBT MATURITY PROFILE AS OF 30 JUNE 2013

02,0004,0006,0008,000

10,00012,00014,00016,000

Liqu

idity

as

of 1

H13

Rep

orte

d sh

ort-t

erm

deb

tas

of 1

H13

2013

2014

2015

2016

>201

6

in U

SD

mn

Debt repayments (excluding other financial liabilities)Unused committed facilitiesCash

CREDIT METRICS

2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 66.3 39.8 27.3 13.9 30.5 129.2 54.2 21.6 12.6EBIT gross interest cover adj. 11.1 10.3 9.1 5.4 10.1 13.1 11.1 8.3 7.3EBITDA net interest cover adj. 77.8 46.3 32.4 19.3 37.3 155.2 64.6 30.7 18.7EBITDA gross interest cover adj. 13.1 12.0 10.8 7.4 12.4 15.8 13.2 11.8 10.9FFO adj. / net debt adj. 137.4% 98.9% 55.0% 31.6% 74.9% 95.8% 75.5% 49.2% 47.8%FFO adj. / total debt adj. 104.2% 77.7% 48.8% 27.3% 48.9% 60.3% 51.1% 29.7% 30.6%RCF adj. / net debt adj. 86.5% 69.9% 38.2% 28.4% 65.8% 72.6% 53.7% 31.0% 30.2%RCF adj. / total debt adj. 65.6% 54.9% 33.9% 24.5% 43.0% 45.7% 36.4% 18.7% 19.3%Net debt adj. / EBITDA adj. 0.7 0.8 1.5 2.3 1.0 0.8 1.1 1.5 1.6Total debt adj. / EBITDA adj. 0.9 1.0 1.6 2.7 1.5 1.3 1.7 2.5 2.5FFO adj. / net interest adj. 70.3 35.8 26.0 14.3 27.0 121.3 55.7 23.2 14.2FFO adj. / gross interest adj. 11.8 9.3 8.7 5.5 8.9 12.3 11.4 8.9 8.2Total debt adj. / total capital. adj. 23.3% 28.9% 41.9% 37.3% 29.0% 26.0% 26.3% 31.7% 33.0%Net debt adj. / net capital. adj. 18.7% 24.2% 39.0% 34.0% 21.0% 18.1% 19.4% 21.9% 24.0%Equity / total assets 58.4% 54.4% 43.7% 49.8% 57.0% 59.6% 60.6% 55.3% 55.0%

Source: Company data, UniCredit Research

<date>



BHP Billiton Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA1/A+/A+ STABLE/STABLE/STABLE Stable Marketweight iBoxx/--/-- GBP 107bn

Company Description: BHP Billiton (www.bhpbilliton.com), headquartered in Melbourne, Australia, and London, UK, is the world's largest diversified natural resources company. It was created through the merger of BHP Limited and Billiton PLC in 2001. BHP is organized into the following core segments: 1. petroleum and potash, 2. coal, 3. copper, 4. iron ore and 5. aluminum, manganese and nickel. The group holds leading market positions in its commodity segments, including aluminum, coal, copper, iron ore, manganese, nickel, silver and uranium. BHP's geographical revenue generation is well diversified, with Asia, including China, Europe, North America and Australia being its key markets. BHP has about 129,000 employees and contractors in over 25 countries. Shareholder structure: largely free float.

Moody's (09/13): Moody's stable outlook reflects its expectation that prices for BHP's products, while weaker, will remain at levels which allow the company to continue to generate sufficient earnings and cash flow to maintain appropriate credit metrics for the A1 rating. The outlook also reflects the company's focus on cost and capital expenditure reductions, which combined with announced asset sales proceeds will assist in its ability to achieve its announced intention to focus on debt reduction. Ratings could be pressured if debt levels continue to increase or operating performance declines further, leading to a sustained deterioration in debt coverage measures. Specially, downward rating pressure would emerge if adjusted Gross Debt/EBITDA exceeds 1.5x on a consistent basis. S&P (09/13): The stable outlook reflects S&P's expectation that the initiatives undertaken by the company (i.e. a cut in capital expenditure and the focus on productivity gains) should restore its credit metrics in FY14 to levels within its expectations for the rating. In addition, the agency expects the company to pull more financial levers if the operating environment is weaker than expected. Given BHP's significant financial flexibility and its commitment to a solid 'A' rating, the agency believes the underperformance of its FY13 credit metrics to be short lived. To retain the 'A+' rating, S&P expects that BHP would sustain a positive FOCF yoy and FFO to adjusted net debt at more than 60% through the commodity pricing cycle.

SALES BY SEGMENT (FY12/13)

Petroleum and Potash

20%

Copper18%

Group and Unallocated

1%

Aluminium, Manganese and

Nickel14%

Coal16%

Iron Ore31%

UNDERLYING EBIT

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Petro

leum

and

Pot

ash

Cop

per

Iron

Ore

Coa

l

Alum

iniu

m,

Man

gane

sean

d N

icke

l

in USD mn

FY 09/10 FY10/11 FY11/12 FY12/13

Strengths/Opportunities – Long-life and low cost, predominantely at the lower-end of the global cost

curve, asset base – Minimized exposure to single commodities or countries by strong portfolio

and geographic diversification – Exposure to the petroleum business which has somewhat different

demand drivers than its other commodities – Benefits from a strong focus on costs and from implemented disposals

Weaknesses/Threats – Mainly industry-related risks, including risk of a material slowdown of

demand from China, inherent cyclicality and capital intensity of the business, volatility in earnings and cash flows given the dependency on commodity prices

– M&A related risks, partly mitigated by commitment to a solid A rating

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0421249235 BHP 6.375% 04/04/16 A1/A+/A+ 1,000 -- XS0787785715 BHP 2.125% 29/11/18 A1/A+/A+ 1,250 -- XS0834386228 BHP 2.25% 25/09/20 A1/A+/A+ 1,250 -- XS0787786440 BHP 3% 29/05/24 A1/A+/A+ 750 -- XS0834385923 BHP 3.25% 24/09/27 A1/A+/A+ 750 -- XS0924998809 BHP 3.125% 29/04/33 A1/A+/A+ 750 --

Covenants: none


<date>




USD mn 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13Sales 47,473 59,473 50,211 52,798 71,739 72,226 65,968EBIT margin adj. 42.2% 41.0% 26.9% 37.9% 45.0% 38.2% 32.5%EBITDA rep. 22,783 28,031 20,671 24,825 36,929 30,260 26,481EBITDA margin adj. 48.6% 47.5% 43.8% 46.9% 52.1% 47.2% 43.5%Net income 13,496 15,962 6,338 13,009 23,946 15,532 11,075Funds from operations (FFO) 16,912 20,898 16,198 19,005 29,619 24,460 18,771Operating cash flow 15,975 17,817 18,863 16,890 30,080 24,384 18,252Free cash flow rep. (after Capex) 8,023 8,893 7,987 6,149 17,482 3,327 -5,047Dividend payment -2,339 -3,430 -4,969 -4,895 -5,144 -5,933 -6,222Retained cash flow (RCF) 14,573 17,468 11,229 14,110 24,475 18,527 12,549Acquisitions / disposals -361 -140 -175 -274 -4,847 -12,581 4,406Share buy back / issues -5,884 -3,341 -140 73 -10,297 -385 -351Total debt rep. 12,420 12,695 16,419 15,764 15,907 28,330 35,165Net debt rep. 9,971 8,458 5,586 3,308 5,823 23,549 29,105Adj. for pensions 451 485 626 586 649 752 750Adj. for operating leases and others 5,018 5,877 6,126 6,933 8,147 8,491 8,491Net debt adj. 15,439 14,820 12,338 10,827 14,619 32,792 38,347

DEBT LEVERAGE

0%

40%

80%

120%

160%

200%

240%

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4FFO adj. / net debt adj. Net debt adj. / EBITDA adj. (RS)


0

5,000

10,000

15,000

20,000

25,000

Availableliquidity asof 30/6/13

FY14 FY15 FY16 FY17 >FY17

Cash Undrawn, committed lines Financial debt

CREDIT METRICS

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13EBIT net interest cover adj. 29.2 27.5 18.5 28.8 40.5 28.6 13.5EBIT gross interest cover adj. 21.1 20.7 13.0 22.0 31.0 23.2 12.2EBITDA net interest cover adj. 33.7 31.9 30.1 35.7 46.9 35.3 18.1EBITDA gross interest cover adj. 24.3 24.0 21.2 27.2 35.9 28.6 16.3FFO adj. / net debt adj. 110.1% 144.1% 134.4% 179.8% 206.7% 76.5% 50.6%FFO adj. / total debt adj. 95.0% 112.0% 71.6% 83.6% 122.3% 66.8% 43.7%RCF adj. / net debt adj. 94.9% 120.9% 94.2% 134.6% 171.5% 58.4% 34.4%RCF adj. / total debt adj. 81.9% 94.0% 50.1% 62.6% 101.5% 51.0% 29.7%Net debt adj. / EBITDA adj. 0.7 0.5 0.6 0.4 0.4 1.0 1.3Total debt adj. / EBITDA adj. 0.8 0.7 1.1 0.9 0.7 1.1 1.5FFO adj. / net interest adj. 24.8 24.1 22.7 28.0 37.9 26.0 12.2FFO adj. / gross interest adj. 17.9 18.1 15.9 21.4 29.0 21.1 11.0Total debt adj. / total capital. adj. 37.4% 32.8% 36.2% 32.0% 29.9% 35.9% 38.1%Net debt adj. / net capital. adj. 34.0% 27.5% 23.2% 18.0% 20.2% 32.8% 34.7%Equity / total assets 48.7% 51.4% 51.7% 55.5% 56.1% 51.9% 52.2%


<date>



Glencore Xstrata Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB/-- STABLE/STABLE/-- Stable Overweight iBoxx/--/iTraxx S18 GBP 40.4bn

Company Description: Glencore Xstrata (www.glencorexstrata.com) was created through the merger of Glencore and Xstrata in May 2013. The group is one of the world's largest global diversified natural resource companies. The company's industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries. Its diversified operations comprise over 150 mining and metallurgical sites, offshore oil production assets, farms and agricultural facilities. Glencore Xstrata is structured into three segments: 1. Metals and Minerals focuses on copper, nickel, zinc/lead, alloys, alumina/aluminum and iron ore. The company has interests in both controlled and non-controlled industrial assets that include mining, smelting, refining and warehousing operations. 2. Energy Products focuses on oil and coal. Its Energy Products businesses include controlled and non-controlled coal mining and oil production operations and investments in strategic handling, storage and freight equipment and facilities. 3. Agricultural Products focuses on grains, oils/oilseeds, cotton and sugar. Its Agricultural Products group is supported by both controlled and non-controlled storage, handling and processing facilities in strategic locations. Glencore Xstrata employs about 190,000 people (including contractors). The company is publicly listed, with CEO Ivan Glasenberg as a main shareholder (8.3% stake). On a pro-forma basis, Glencore Xstrata had revenues of USD 236bn and generated an adjusted EBITDA of USD 12.9bn in FY12.

Moody's (11/13): The stable outlook on Glencore Xstrata's rating reflects Moody's expectation that the combined entity will maintain good liquidity at all times, thereby enabling it to comfortably execute its large capex plan, even in the event of moderate delays or cost overruns at main projects. At the same time, the outlook assumes that Glencore Xstrata will preserve credit metrics consistent with Moody's guidance for its current rating, including a combined leverage ratio (Moody's-adjusted gross debt/EBITDA) below 3.5x on a sustained basis and a (cash flow from operations (CFO)-dividends)/gross debt ratio in the high teens in percentage terms. S&P (06/13): The stable outlook reflects S&P's expectation that the combined GlencoreXstrata should be able to maintain an adjusted FFO to debt of about 25% in 2013 and 2014. The agency believes that rating headroom is therefore currently limited but expects management to adjust capex or take other measures to keep debt from rising materially in 2013. The stable outlook also factors in its expectation of stronger positive FOCF in 2014, after the capex program peaks and EBITDA benefits from additional production. S&P might lower the rating on Glencore Xstrata if commodity prices fall below its assumptions or in case a sizable acquisition pushes its adjusted FFO-to-debt ratio to about 20% without near-term prospects of recovery, and depending on management's actions.

PRO-FORMA REVENUES BY SEGMENT (FY12)

Metals and minerals

29%

Energy products62%

Agricultural products

9%

PRO-FORMA EBIT BY ACTIVITIES (1H13)*

Zinc13%

Nickel3%Coal

14%

Oil4%

Marketing agri1% Marketing

energy16%

Marketingmetals22%

Copper30%

*Corporate and other -3% Strengths/Opportunities – Large-scale, long-lived and low-cost assets – Good commodity diversification – Exposure to the less-cyclical and less-volatile trading business – Good management experience in the physical commodity marketing

business and strong focus on internal risk-management processes – Proven commitment to its investment grade rating – Adequate liquidity position, supported by good relationships with its banks

Weaknesses/Threats – Exposure to emerging markets but spread over several countries – Track record of M&A-related growth – Relatively high need for short-term financing due to working capital

intensity of the trading business – Still-negative FCF generation in FY13 due to continued high capex

spending (resulting from Xstrata's sizeable capex program) – High complexity of and limited insight into trading operations

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0359781191 GLENLN 7.125% 23/04/15 Baa2/BBB/-- 750 -- XS0495973470 GLENLN 5.25% 22/03/17 Baa2/BBB/-- 1,250 -- XS0767815599 GLENLN 4.625% 03/04/18 Baa2/BBB/-- 1,250 -- XS0366202694 GLENLN 6.25 27/05/15 Baa2/BBB/-- 600 -- XS0857214968 GLENLN 1.5 19/05/16 Baa2/BBB/-- 1,250 Coupon step-up/down by 0.25% if rating below/at BBB+/Baa2 XS0305188533 GLENLN 5.25 13/06/17 Baa2/BBB/-- 500 -- XS0857215346 GLENLN 2.375 19/11/18 Baa2/BBB/-- 1,000 Coupon step-up/down by 0.25% if rating below/at BBB+/Baa2 XS0974877150 GLENLN 3.375 30/09/20 Baa2/BBB/-- 750 --


<date>



FINANCIAL STATISTICS*

USD mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 54,686 71,957 91,031 116,530 142,343 152,236 106,364 144,978 186,152 107,957 214,436 112,035EBIT margin adj. 1.5% 2.6% 2.3% 4.1% 3.6% 2.5% 2.3% 2.4% 1.8% 1.6% 1.4% 1.4%EBITDA rep. 966 2,060 2,375 5,123 5,527 4,396 3,014 4,474 4,423 2,351 4,477 2,952EBITDA margin adj. 1.8% 2.9% 2.6% 4.4% 3.9% 2.9% 2.8% 3.1% 2.4% 2.2% 2.1% 2.7%Net income 1,149 2,313 2,627 5,759 6,425 1,068 1,729 4,106 4,268 2,347 1,152 -8,851Funds from operations (FFO) 889 1,838 1,840 4,187 4,366 3,714 2,333 3,333 3,197 1,930 4,115 1,714Operating cash flow -1,398 4 -2 1,355 1,573 6,274 -2,946 335 23 2,640 4,842 6,636Free cash flow rep. (after Capex) -1,669 -547 -764 252 -70 4,399 -4,062 -1,555 -2,787 1,151 1,725 3,291Dividend payment -342 -382 -367 -479 -772 -824 -794 -913 -1,225 -983 -1,620 -1,613Retained cash flow (RCF) 547 1,456 1,473 3,708 3,594 2,890 1,539 2,420 1,972 947 2,495 101Acquisitions / disposals 403 -336 -1,468 -610 -1,190 -1,039 512 -2,339 -1,241 -1,252 -4,724 1,454Share buy back / issues -171 0 0 0 0 0 0 0 7,616 0 0 -4Total debt rep. 5,663 8,274 12,294 16,755 20,405 18,316 24,066 30,616 28,068 29,312 35,526 52,799Net debt (excl. marketable securities) 5,441 7,871 11,691 15,610 19,408 17,377 23,131 29,087 26,723 27,775 32,706 49,246Adj. for pensions 26 27 46 50 97 107 106 121 170 170 270 701Adj. for operating leases and others -2,050 -3,402 -6,284 -6,557 -6,741 -4,346 -7,452 -11,118 -10,779 -10,398 -13,478 -11,167Net debt adj. 3,417 4,496 5,453 9,103 12,764 13,138 15,784 18,090 16,114 17,547 19,498 38,780

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

0

1

2

3

4

5

6FFO adj. / net debt adj. Total debt adj. / EBITDA adj. (RS)

BOND MATURITY PROFILE

02,0004,0006,0008,000

10,00012,00014,00016,000

Ava

ilabl

e liq

uidi

ty a

t the

end

of 1

H13

2013

2014

2015

2016

2017

2018

>201

8

in U

SD

mn

Cash and committed lines Bond maturities

CREDIT METRICS (ACCORDING TO UNICREDIT'S CALCULATIONS)

2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 3.3 5.6 4.5 6.8 4.4 4.5 4.0 3.6 3.8 3.3 3.0 2.4EBIT gross interest cover adj. 3.0 4.3 3.5 5.0 3.9 3.4 2.8 2.8 2.8 2.3 2.2 1.8EBITDA net interest cover adj. 4.0 6.1 5.1 7.2 4.8 5.2 5.1 4.6 5.0 4.7 4.5 4.3EBITDA gross interest cover adj. 3.6 4.7 3.9 5.4 4.2 3.9 3.5 3.6 3.6 3.3 3.2 3.3FFO adj. / net debt adj. 26.4% 41.2% 33.9% 46.2% 34.3% 28.3% 14.9% 18.8% 20.2% 18.9% 21.5% 10.3%FFO adj. / total debt adj. 24.7% 37.8% 30.5% 41.0% 31.8% 26.4% 14.0% 17.3% 18.6% 17.4% 18.8% 9.4%RCF adj. / net debt adj. 16.3% 32.7% 27.1% 40.9% 28.3% 22.0% 9.8% 13.7% 12.6% 9.1% 13.2% 4.5%RCF adj. / total debt adj. 15.4% 30.0% 24.4% 36.4% 26.2% 20.6% 9.3% 12.7% 11.6% 8.4% 11.5% 4.1%Net debt adj. / EBITDA adj. 3.5 2.2 2.3 1.8 2.3 3.0 5.2 4.0 3.6 4.4 4.3 7.5Total debt adj. / EBITDA adj. 3.7 2.4 2.5 2.0 2.5 3.2 5.5 4.3 3.9 4.8 4.9 8.2FFO adj. / net interest adj. 3.7 5.5 4.0 5.9 3.8 4.4 3.9 3.5 3.7 3.9 4.2 3.3FFO adj. / gross interest adj. 3.4 4.2 3.0 4.4 3.3 3.3 2.7 2.7 2.7 2.7 3.0 2.5Total debt adj. / total capital. adj. 52.5% 49.7% 47.2% 46.8% 45.4% 46.4% 48.3% 46.6% 35.1% 35.5% 39.5% 43.8%Net debt adj. / net capital. adj. 50.9% 47.6% 44.6% 43.9% 43.5% 44.7% 46.9% 44.6% 33.3% 33.6% 36.3% 41.7%Equity / total assets 22.0% 21.2% 21.0% 24.8% 27.6% 26.6% 27.1% 28.2% 37.5% 37.2% 32.4% 34.3%

*Numbers shown are reported numbers with Xstrata only fully consolidated from 2 May 2013. Source: Company data, UniCredit Research

<date>




<date>




iBoxx Steel Market Spreads

STEEL 5Y SENIOR CDS HISTORY

0

100

200

300

400

500

600


MTNA TKAGR



0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0

TKAGR

MTNA


STEEL CASH CURVES

TKAGR

MTNA

0

50

100

150

200

250

0 1 2 3 4 5 6mDur

ASW

in b

p


QUARTERLY BOND SPREAD MOVEMENTS TK

AGR

4.3

75%

Mar

-15

MTN

A 5.

75%

Mar

-18

MTN

A 5

.875

% N

ov-1

7

TKA

GR

8.5

% F

eb-1

6

MTN

A 1

0.62

5% J

un-1

6

TKAG

R 4

% A

ug-1

8

TKAG

R 4

.375

% F

eb-1

7

0

50

100

150

200

250

300

ASW

in b

p



Arcelor MittalThyssenKrupp

0

50

100

150

200

250

9 10 11 12 13 BBB BBB- BB+ BB



ThyssenKruppArcelor Mittal

0

50

100

150

200

250

4 4.5 5 5.5 6 6.5


<date>



ArcelorMittal Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BB+/BB+ NEG/NEG/STABLE Improving Hold --/iBoxx HY/iTraxx S18 EUR 20.6bn

Company Description: With headquarters in Luxembourg and Rotterdam, ArcelorMittal (www.arcelormittal.com) is the largest steel company worldwide, with a crude steel production of about 88 mmt in 2012. The group also operates a mining business with a global portfolio of mines in operation and development, producing about 56mn tons of iron ore and 8mn tons of metallurgical coal in 2012. In FY12, the company generated 38% of sales in the Americas (20% in the US), 46% in Europe and 16% in Asia and Africa. It operates in the following six business segments: Flat Carbon Americas, Flat Carbon Europe, Long Carbon Americas & Europe, Distribution Solutions, Asia, Africa & CIS, and Mining. ArcelorMittal is publicly listed with Lakshmi Mittal as the majority shareholder (41%). The company employs ca. 245,000 people.

Moody's (08/13): Moody's negative rating outlook reflects ArcelorMittal's weak credit metrics for its rating category. Given the current steel market environment, the agency will maintain the negative outlook until: (1) conditions in the global economy and steel markets improve, (2) the company delivers its mining projects on time and achieves sustainable profitability in the mining segment, (3) it achieves sustainable cost savings; and (4) its credit metrics are trending toward the middle ground between what could change the rating up and down. Moody's could downgrade the rating if: (1) it appears likely that ArcelorMittal's leverage will remain consistently above 4.5x debt/EBITDA and its RCF/debt declines below 12%; or (2) liquidity is constrained by covenants or other factors. As the company currently does not outperform the first two downgrade triggers, Moody's will monitor its progress in restoring these ratios over several quarters and will, as always, consider these metrics on a forward-looking basis. Notably in 2014, the debt/EBITDA ratio should benefit from the maturing of the company's USD 3.5bn of bonds and convertible bonds. S&P (06/13): S&P's outlook on ArcelorMittal is negative, reflecting its expectation that the company's credit ratios will remain below the level commensurate with the current rating in 2013 due to protracted tough steel industry conditions. It also reflects the fact that eventual improvement in the ratios will depend on improvement in global steel industry conditions, which are very uncertain. Despite recent debt reduction, it could lower the rating over the next several quarters if the company's ratio of funds from operations (FFO) to debt remains below 15% at the end of 2013 or if it appears unlikely to improve to 20% in 2014.

SALES BY SEGMENT (LTM9M13)

AACIS9%

Long Carbon Americas and

Europe22%

Flat CarbonAmericas

20%

Mining6%

DistributionSolutions

15%

Flat CarbonEurope

28%

EBITDA BY SEGMENT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Flat CarbonAmericas

Mining LongCarbon

Americasand Europe

Flat CarbonEurope

AACIS DistributionSolutions

in U

SD

mn

2011 2012 LTM9M13

Strengths/Opportunities – World's largest steel producer with leading positions in steel diverse

markets, i.e. largest producer in Americas, Africa and Europe, second largest in the CIS region and a growing presence in Asia

– Good vertical integration in iron ore and coal coupled with continuing focus on increasing backward integration

– Good product and geographic diversification – Focus on debt reduction in the near term – Recovery of European steel demand in 2014

Weaknesses/Threats – Overcapacities in the European steel market – Cyclical and capital intensive business – Persisting acquisition risk with the company – Still relatively high absolute indebtedness – Rating pressure

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0431928414 MTNA 9.375% 03/06/16 Ba1/BB+/BB+ 1,000 Coupon step-down if upgrade by one agency XS0559641146 MTNA 4.625% 17/11/17 Ba1/BB+/BB+ 1,000 Coupon step-down if upgrade by one agency XS0765621569 MTNA 4.5% 29/03/18 Ba1/BB+/BB+ 500 Coupon step-down if upgrade by one agency

Covenants: net debt to EBITDA of max. 3.5x


<date>




USD mn 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 88,576 105,216 124,936 65,110 78,025 93,973 64,904 84,213 59,592EBIT margin adj. 13.7% 14.5% 15.1% 2.2% 5.4% 6.1% 3.9% -1.4% 3.1%EBITDA rep. 15,272 19,400 18,336 3,779 8,525 9,898 5,727 7,092 4,805EBITDA margin adj. 17.6% 18.8% 20.0% 9.7% 11.7% 11.4% 10.1% 10.1% 9.4%Net income 9,461 11,850 10,439 75 3,005 2,258 435 -3,469 -1,259Funds from operations (FFO) 11,757 15,739 23,668 1,252 6,301 5,792 1,664 2,516 1,692Operating cash flow 10,285 16,532 14,652 7,018 3,770 1,967 2,449 5,340 1,609Free cash flow rep. (after Capex) 5,647 11,084 9,121 4,226 462 -2,871 -1,139 623 -833Dividend payment -2,480 -2,269 -2,576 -1,338 -1,257 -1,194 -885 -1,191 -401Retained cash flow (RCF) 9,277 13,470 21,092 -86 5,044 4,598 779 1,325 1,291Acquisitions / disposals -137 -6,461 -6,897 8 -621 1,157 710 482 1,401Share buy back / issues 0 -2,498 -4,440 2,919 1,363 0 0 0 3,978Total debt rep. 26,567 30,627 34,076 24,812 26,008 26,418 26,617 26,313 22,061Net debt excluding cash estimated to be used for operations

21,421 23,522 27,489 19,803 20,719 23,513 24,627 22,773 18,633

Adj. for pensions 5,200 6,244 7,111 7,583 7,180 7,160 7,160 11,628 11,628Adj. for operating leases and others 143 4,565 4,583 4,663 6,381 6,990 7,315 7,020 7,019Net debt adj. 26,764 34,331 39,183 32,049 34,280 37,663 39,102 41,421 37,280

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0

1

2

3

4

5

6

7FFO adj. / net debt adj. Net debt adj./EBITDA adj. (rs)

DEBT MATURITY PROFILE AS OF 30 SEPTEMBER 2013

0

2

4

6

8

10

12

14

16

Ava

ilabl

eliq

uidi

ty30

.09.

13

2013

2014

2015

2016

2017

>201

7

USD bn Cash Unused credit lines Bonds Loans Commercial paper

CREDIT METRICS

2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 9.1 9.3 9.2 0.9 2.6 2.8 1.6 -0.6 -1.0EBIT gross interest cover adj. 9.1 9.3 9.2 0.9 2.6 2.8 1.6 -0.5 -0.9EBITDA net interest cover adj. 11.7 12.1 12.1 4.1 5.5 5.3 4.5 4.1 4.0EBITDA gross interest cover adj. 11.7 12.1 12.1 4.1 5.5 5.3 4.5 3.8 3.7FFO adj. / net debt adj. 44.5% 47.1% 61.6% 4.5% 20.3% 16.9% 10.0% 7.8% 9.2%FFO adj. / total debt adj. 37.3% 39.0% 52.7% 3.9% 17.6% 15.7% 9.5% 7.2% 8.4%RCF adj. / net debt adj. 35.2% 40.5% 55.0% 0.3% 16.6% 13.7% 7.0% 5.0% 7.3%RCF adj. / total debt adj. 29.6% 33.5% 47.1% 0.3% 14.4% 12.7% 6.6% 4.6% 6.7%Net debt adj. / EBITDA adj. 1.7 1.7 1.6 5.1 3.7 3.5 4.6 4.9 4.9Total debt adj. / EBITDA adj. 2.0 2.1 1.8 5.9 4.3 3.8 4.9 5.3 5.4FFO adj. / net interest adj. 9.0 9.9 11.7 0.9 4.2 3.1 2.1 1.6 1.8FFO adj. / gross interest adj. 9.0 9.9 11.7 0.9 4.2 3.1 2.1 1.4 1.7Total debt adj. / total capital. adj. 37.3% 40.0% 43.9% 36.3% 37.9% 40.9% 41.9% 46.8% 43.4%Net debt adj. / net capital. adj. 33.3% 35.6% 40.1% 33.0% 34.6% 39.1% 40.7% 44.8% 41.3%Equity / total assets 44.7% 46.1% 44.5% 51.2% 50.5% 49.6% 49.6% 44.3% 47.1%


<date>



ThyssenKrupp Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BB/BBB- NEG/NEG/NEG Improving Hold --/iBoxx HY/iTraxx S18 EUR 9.7bn

Company Description: ThyssenKrupp (www.thyssenkrupp.com), headquartered in Essen, Germany, was created in 1999 through the merger of Thyssen AG and Friedrich Krupp AG. The company is an industrial conglomerate that operates the two divisions Materials and Technologies. Following the classification of its Steel Americas business areas as discontinued operations, ThyssenKrupp operates in six business areas: Steel Europe, Materials Services, Elevator Technology, Plant Technology, Components Technology and Marine Systems. As of 1 January 2013, the company combined the two business areas Plant Technology and Marine Systems into a joint business area "Industrial Solutions" in order to reduce the complexity of the group. In FY11/12, the company generated about 31% of its revenues in Germany, 29% in Other Europe, 26% in the Americas and 12% in Asia/Pacific. ThyssenKrupp employs about 150,000 people. Major shareholders are the Alfred Krupp Foundation with a stake of 25.1% and the Fritz Thyssen Foundation with 5.0%.

Moody's (08/13): According to Moody's, the rating outlook could be changed to stable by a combination of improved market conditions and the successful conclusion of the disposal of Steel Americas and subsequent debt reduction, which together indicate the potential for debt/EBITDA to fall below 3.5x and achieve positive FCF. The rating could be raised if there is an appreciable improvement in the outlook for the company's businesses, it maintains strong liquidity, debt/EBITDA approaches 3.0x and its RCF/debt is greater than 16%. S&P (01/13): The negative outlook reflects the uncertainty over the sale of TK's Steel Americas and related debt reduction. In the absence of such a sale, S&P could lower the ratings by one-to-two notches, depending on other management actions. The agency could revise the outlook to stable if the group signs an agreement to sell Steel Americas, thereby reducing its debt and stemming negative FOCF. This should also help to improve liquidity. The stabilization of the outlook would depend, however, on the amount received for the disposal and the actual performance of the company's continued operations, which is tied to the uncertain European economic environment. S&P would regard an adjusted FFO-to-debt ratio above 15% in 2014 as commensurate with the current rating. The agency notes further that, contrary to its expectation in July 2012, it does not envisage a positive rating action in 2013 in case of a sale of Steel Americas. This is because it sees a deteriorated operating environment in 2013 and delayed improvement in profits of the continued operations and in credit ratios.

SALES BY BUSINESS AREA (CONT. OPERATIONS) FY11/12

Steel Europe (SE)26%

Materials Services (MX)

30%

Elevator Technology (ET)

14%

Plant Technology (PT)

10%

Marine Systems (MS)3%

Components Technology

(CT)17%

ADJUSTED EBIT BY DIVISION (INCL. STEEL AMERICAS)

-400

-300

-200

-100

0

100

200

300

SE AM MX ET CT ISin EUR mn

1Q11/12 2Q11/12 3Q11/12 4Q11/12 1Q12/13 2Q12/13 3Q12/13

Strengths/Opportunities – Well-diversified business portfolio with strong market positions – Robust order book, which provides sales visibility – Excellent R&D and high standard and quality of its products – Positive impact on the credit profile from the portfolio reshuffling, in

particular from the planned exit of its Steel Americas business – Strategic focus on expansion of its Technologies business could reduce

the volatility of the business in the medium term

Weaknesses/Threats – Exposure to highly competitive, volatile and capital-intensive markets such

as steel, capital goods, automotive – Overcapacities in the European steel market – Relatively high exposure to Europe (60% of sales) – No vertical integration into iron ore, but long-term contracts – Execution risk related to the disposal of Steel Americas – Very weak credit metrics for the ratings and weak capitalization

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0214238239 TKAGR 4.375% 18/03/15 Ba1/BB/BBB- 750 Retail size, IG documentation DE000A0T61L9 TKAGR 8.5% 25/02/16 Ba1/BB/BBB- 1,000 Retail size, IG documentation DE000A1MA9H4 TKAGR 4.375% 28/02/17 Ba1/BB/BBB- 1,250 Retail size, IG documentation DE000A1R08U3 TKAGR 4% 27/08/18 Ba1/BB/BBB- 1,600 Retail size, IG documentation

Covenants: Gearing below 150%.


<date>




EUR mn 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 9M12 2011/12 9M13Sales 39,342 42,927 47,125 51,723 53,426 40,563 42,621 43,356 30,153 40,124 27,442EBIT margin adj. 5.9% 6.3% 6.8% 8.4% 7.8% -2.8% 4.1% 0.5% 5.0% 3.7% 2.9%EBITDA rep. 3,305 4,279 4,689 5,208 4,782 8 2,711 3,157 2,084 2,394 1,183EBITDA margin adj. 9.7% 11.2% 10.3% 11.4% 10.1% 1.8% 7.8% 8.5% 8.2% 7.4% 5.9%Net income 944 466 1,704 2,190 2,276 -1,873 927 -1,783 -980 -5,042 -1,205Funds from operations (FFO) 2,645 2,638 3,616 3,821 3,430 -725 2,246 2,127 672 480 349Operating cash flow 2,559 2,351 3,467 2,220 3,679 3,699 868 1,012 -206 68 830Free cash flow rep. (after Capex) 1,128 784 1,846 -653 -339 -313 -2,540 -1,383 -958 -1,120 108Dividend payment -271 -335 -439 -521 -690 -650 -183 -252 -284 -293 -32Retained cash flow (RCF) 2,374 2,303 3,177 3,300 2,740 -1,375 2,063 1,875 388 187 317Acquisitions / disposals 452 2,488 -75 549 120 -25 437 305 664 738 1,011Share buybacks / issues 12 12 -429 0 -880 465 508 1,666 0 0 0Total debt rep. 4,232 4,858 3,788 3,638 4,416 7,465 7,435 6,672 8,691 7,185 8,403Net debt rep. 2,840 233 -658 -20 1,691 2,116 4,055 3,442 5,631 4,964 4,708Adj. for pensions 7,524 9,428 7,759 6,841 6,286 7,201 7,899 6,969 7,164 7,722 7,685Adj. for operating leases and others 1,997 1,945 1,879 1,953 2,014 1,851 1,291 1,017 1,017 940 948Net debt adj. 12,361 11,606 8,980 8,774 9,991 11,168 13,245 11,428 13,812 13,626 13,341

DEBT LEVERAGE

-10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

9M12

2011

/12

9M13

-2

0

2

4

6

8

10

12

14



0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

Liqu

idity

as

of 0

6/30

/13

2012

/13

2013

/14

2014

/15

2015

/16

2016

/17

ther

eafte

r

in E

UR

mn

Debt maturities Cash and cash equivalentsAvailable committed credit facilities

CREDIT METRICS

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 9M12 2011/12 9M13EBIT net interest cover adj. 7.4 4.0 6.3 8.9 7.8 -1.4 2.4 0.3 0.2 2.0 1.1EBIT gross interest cover adj. 5.9 3.2 4.0 5.7 5.1 -1.1 1.6 0.2 0.2 1.0 0.7EBITDA net interest cover adj. 12.3 7.2 9.5 12.0 10.1 0.9 4.6 5.7 4.4 4.0 3.2EBITDA gross interest cover adj. 9.8 5.7 6.1 7.7 6.6 0.7 3.1 3.9 3.2 2.1 2.0FFO adj. / net debt adj. 22.1% 23.6% 41.6% 45.0% 36.0% -5.1% 18.1% 19.9% 9.9% 4.7% 2.4%FFO adj. / total debt adj. 19.9% 16.9% 27.8% 31.8% 28.3% -3.5% 14.4% 15.5% 8.1% 4.0% 1.9%RCF adj. / net debt adj. 19.9% 20.7% 36.7% 39.1% 29.1% -11.0% 16.7% 17.7% 7.8% 2.5% 2.1%RCF adj. / total debt adj. 17.9% 14.8% 24.5% 27.6% 22.9% -7.4% 13.3% 13.8% 6.4% 2.2% 1.6%Net debt adj. / EBITDA adj. 3.2 2.4 1.8 1.5 1.8 15.3 4.0 3.1 4.0 4.6 6.4Total debt adj. / EBITDA adj. 3.6 3.4 2.8 2.1 2.4 22.7 5.0 4.0 4.9 5.4 8.1FFO adj. / net interest adj. 8.8 4.1 7.3 8.1 6.7 -0.7 3.3 3.5 1.7 0.9 0.5FFO adj. / gross interest adj. 7.0 3.3 4.7 5.2 4.4 -0.5 2.2 2.4 1.3 0.4 0.3Total debt adj. / total capital. adj. 61.4% 66.6% 59.4% 53.6% 52.0% 62.2% 61.1% 58.6% 64.2% 77.8% 85.9%Net debt adj. / net capital. adj. 58.8% 58.8% 49.4% 44.9% 45.9% 52.7% 55.6% 52.5% 59.5% 75.1% 82.7%Equity / total assets 27.9% 22.3% 25.0% 27.4% 27.6% 23.4% 23.8% 23.8% 20.7% 11.8% 8.0%


<date>



voestalpine Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/--/-- --/--/-- Stable Hold --/--/-- EUR 6.3bn

Company Description: voestalpine, headquartered in Linz, Austria, is a European steel producing and processing company. The group operates in the four divisions Steel, Metal Engineering, Metal Forming and Special Steel. The last of these was established in 2007 following the acquisition of Böhler-Uddeholm, the company's biggest M&A transaction in its history. voestalpine holds solid market positions in its four divisions. It is a leading steel producer in Europe, the world market leader in turnout technology, tool steel and special sections, as well as the number one in Europe in the manufacturing of rails and specially treated wire. In FY 2012/13, the company generated 77% of its sales in Europe, 8% in North America, 6% in Asia and 5% in Brazil. The biggest shareholders of the group are the Raiffeisenlandesbank Oberösterreich (<15%), voestalpine Mitarbeiterbeteiligung (employee shareholding) (14.4%) and Oberbank (7.9%).

voestalpine is not rated by any rating agency.

SALES BY SEGMENT LTM1H13/14

Steel32%

Metal Engineering

25%

Metal Forming20%

Special Steel23%

EBITDA BY SEGMENT

0

50

100

150

200

250

300

350

400

450

500

Steel Metal Engineering Metal Forming Special Steel

in E

UR

mn

2012/13 LTM1H13/14

Strengths/Opportunities – Leading market positions in niche markets – Successful diversification of steel production into value-added products

and downstream processing activities – Proven lower cyclicality during the crisis in comparison to peers such as

ArcelorMittal and ThyssenKrupp – Above-average profitability – Strong cash-flow generation

Weaknesses/Threats – Dependency on cyclical customer industries – Exposure to the European steel market, which is currently plagued by

strong overcapacities and price pressure – High exposure to Europe – Affected by raw-material-cost fluctuations – Exposed to acquisition risk due to the globalization strategy of the

company and its related risks (especially a weakening of the financial profile)

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0838764685 VOEAV 4% 10/18 --/--/-- 500mn -- AT0000A0MS58 VOEAV 4.75% 02/18 --/--/-- 500mn -- AT0000A069T7 VOEAV 7.125% Perp --/--/-- 500mn Outstanding amount reduced following exchange offer

in March 2013 AT0000A0ZHF1 VOEAV 7.125% Perp --/--/-- 500mn Interest rate to 31.10.2014, 6% p.a. from 31.10.2014 to

31.10.2019 Covenants: voestalpine's main bank facilities do not contain financial covenants.


<date>




EUR mn 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 1H13 2012/13 1H14Sales 4,616 5,779 6,231 7,050 10,481 11,725 8,550 10,954 12,058 5,933 11,524 5,724EBIT margin adj. 5.7% 9.7% 12.0% 14.8% 11.5% 8.9% 4.8% 9.6% 6.4% 7.9% 8.1% 7.6%EBITDA rep. 558 888 1,079 1,365 1,837 1,716 992 1,604 1,298 725 1,447 687EBITDA margin adj. 12.3% 15.5% 17.7% 19.8% 18.0% 15.1% 12.3% 15.2% 11.3% 12.8% 13.2% 12.6%Net income 130 324 526 765 752 612 187 595 413 270 522 240Funds from operations (FFO) 432 744 846 1,119 1,398 1,239 734 1,195 994 581 1,097 550Operating cash flow 577 551 860 970 1,136 1,358 1,606 958 857 604 1,322 439Free cash flow rep. (after Capex) 157 69 375 387 265 378 991 490 304 133 582 86Dividend payment -54 -68 -87 -127 -236 -417 -254 -162 -213 -142 -228 -162Retained cash flow (RCF) 377 677 759 992 1,162 822 479 1,033 781 439 869 389Acquisitions / disposals 62 -49 -148 -11 -3,295 -332 29 0 34 0 -115 0Share buy back / issues 3 3 0 -226 -192 72 4 5 6 4 84 2Total debt rep. 1,190 1,160 1,345 1,369 4,794 5,446 5,216 4,998 4,270 4,245 4,383 3,920Net debt rep. 833 800 499 623 4,462 4,588 4,188 3,765 3,593 3,629 3,291 3,343Adj. for pensions 352 388 461 471 727 743 748 763 786 786 930 922Adj. for operating leases and others 351 81 75 75 92 119 130 142 142 142 146 146Net debt adj. 1,536 1,269 1,034 1,169 5,281 5,449 5,065 4,671 4,520 4,556 4,366 4,410

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

120%

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

1H12

/13

2012

/13

1H13

/14

0

1

2

3

4

5



0

250

500

750

1,000

1,250

1,500

1,750

2,000

Liqu

idity

as

of 3

0.09

.13

2013

/14

2014

/15

2015

/16

2016

/17

2017

/18

beyo

nd

in E

UR

mn

Cash Undrawn, committed lines Financial debt Hybrid

CREDIT METRICS

2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 1H13 2012/13 1H14EBIT net interest cover adj. 3.7 8.0 9.1 14.7 5.7 3.2 2.0 4.2 3.3 2.9 4.1 4.2EBIT gross interest cover adj. 2.8 5.5 6.4 8.5 4.4 2.6 1.4 3.5 2.5 2.3 3.2 3.4EBITDA net interest cover adj. 8.0 12.7 13.4 19.7 9.0 5.5 5.2 6.7 5.8 5.5 6.7 6.9EBITDA gross interest cover adj. 6.1 8.8 9.4 11.3 6.9 4.4 3.5 5.5 4.3 4.3 5.2 5.7FFO adj. / net debt adj. 28.4% 59.7% 83.1% 96.8% 26.7% 23.0% 14.8% 26.0% 22.5% 21.6% 25.7% 24.8%FFO adj. / total debt adj. 23.0% 46.5% 45.7% 59.1% 25.1% 19.9% 12.3% 20.6% 19.6% 19.0% 20.6% 21.9%RCF adj. / net debt adj. 24.8% 54.4% 74.7% 85.9% 22.3% 15.4% 9.8% 22.5% 17.8% 18.4% 20.5% 19.2%RCF adj. / total debt adj. 20.1% 42.4% 41.1% 52.5% 20.9% 13.3% 8.2% 17.8% 15.5% 16.2% 16.4% 17.0%Net debt adj. / EBITDA adj. 2.7 1.4 0.9 0.8 2.8 3.1 4.8 2.8 3.3 3.6 2.9 3.0Total debt adj. / EBITDA adj. 3.3 1.8 1.7 1.4 3.0 3.6 5.8 3.5 3.8 4.1 3.6 3.4FFO adj. / net interest adj. 6.1 10.7 10.4 16.0 6.7 3.9 3.7 4.9 4.3 4.3 4.9 5.1FFO adj. / gross interest adj. 4.7 7.4 7.3 9.2 5.2 3.1 2.5 4.0 3.2 3.3 3.9 4.2Total debt adj. / total capital. adj. 50.1% 43.4% 42.5% 39.6% 59.7% 62.6% 61.8% 58.1% 54.1% 53.7% 54.0% 51.9%Net debt adj. / net capital. adj. 44.9% 37.4% 28.9% 28.6% 58.2% 59.2% 57.4% 52.3% 50.7% 50.6% 48.4% 48.8%Equity / total assets 40.9% 39.6% 41.4% 42.9% 30.1% 29.3% 30.6% 32.1% 34.4% 34.8% 35.0% 36.4%


<date>




<date>




iBoxx Paper Market Spreads

PAPER 5Y SENIOR CDS HISTORY

0

100

200

300

400

500

600


5Y C

DS

in b

p

0

500

1,000

1,500

2,000

2,500

3,000SAPSJ STERV NSINO (RS)



0.0 1.0 2.0 3.0 4.0 5.0 6.0

SAPSJ

STERV

NSINO


PAPER CASH CURVES

MNDILN 5.75% Apr-17

MNDILN 3.375% Sep-20STERV 5% Mar-18

STERV 5.5% Mar-19

SAPSJ 6.625% Apr-18

LECTA 8.875% May-19

NSINO 7% Jun-17

0

500

1000

1500

2000

2500

0 1 2 3 4 5 6 7


QUARTERLY BOND SPREAD MOVEMENTS ST

ERV

4.4

34%

Oct

-16

LEC

TA 8

.875

% M

ay-1

9

NS

INO

7%

Jun

-17

LEC

TA 5

.718

% M

ay-1

8

MN

DIL

N 5

.75%

Apr

-17

MN

DIL

N 3

.375

% S

ep-2

0

STER

V 5

% M

ar-1

8

STE

RV

5.5%

Mar

-19

SAP

SJ 6

.625

% A

pr-1

8

0

500

1000

1500

2000

2500

ASW

in b

p



Norske Skog

SappiStora

0

500

1000

1500

2000

2500

3000

11 12 13 14 15 16 17 18 19 BB+ BB BB- B+ B B- CCC+ CCC



Stora

Sappi

Norske Skog

0

500

1000

1500

2000

2500

3000

4 5 6 7 8 9


<date>



Lecta Group Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB1/B+/-- NEG/NEG/-- Weakening Buy --/iBoxx HY/-- not listed

Company Description: Headquartered in Luxembourg, Lecta is one of the leading European producers of coated fine paper (capacity of 1,340,000 tons) and specialty paper (220,000 tons). It was established in 1997 by the private equity firm CVC to acquire the Italian paper manufacturer Garda, and subsequently expanded with the takeovers of French Condat in 1998 and Spanish Torraspapel in 1999. The group's main focus is on Southern Europe and France, where it commands leading market positions. Besides paper production, Torraspapel is also active in the distribution of paper in Spain, Portugal, Argentina and France. In addition, Lecta operates a pulp mill (through Torraspapel). The company is majority-owned, i.e. about 57% of total voting rights, by CVC, with the remaining shares being held by other investors and management.

Moody's (05/13): The negative outlook reflects Moody's concerns about Lecta's ability to overcome operational pressure in an industry environment that it expects to remain difficult. This may lead to a prolonged weakness in credit metrics such as EBITDA margins below the high single-digit percentages, RCF/Debt below 10%, and debt/EBITDA above 6.0x. Moody's could stabilize the outlook if Lecta's operating performance improves and the company successfully executes its commercial strategy and cost-cutting plans, resulting in stable EBITDA in 2013 and visibility for marked improvements thereafter, allowing for a trend to achieve debt protection metrics that are more in line with the B1 rating category. Negative pressure could be exerted on the rating as a result of prolonged weakness in operating performance, such that Lecta is unable to mitigate rising input costs by cost savings and higher prices. Quantitatively, Moody's could downgrade the ratings if Lecta's EBITDA margin were to remain below the high single-digit percentages, its RCF/Debt is below 10% for a prolonged period and debt/EBITDA remains above 6.0x. S&P (10/13): The negative outlook reflects S&P's view that Lecta's profitability and credit metrics could weaken to levels below those viewed commensurate with a 'B+' rating. This could happen if the group experiences further margin pressure and weaker cash flow and S&P could lower the rating by one notch within the next three to nine months. A downgrade could occur if S&P revises the group's business risk profile to "weak," from its current "fair" assessment. This would likely result from lower expectations of profitability and cash flow generation. S&P could also lower the ratings if the group's FFO/debt were to fall to <12% or adj. debt/EBITDA were to rise to >5.0x and remain there, with few indications of a swift reversal. S&P could revise the outlook to stable if Lecta generates FFO/debt of >15% or adj. debt/EBITDA of <4.5x, provided that short to medium-term macroeconomic and industry conditions support its view that Lecta could sustain such improved levels.

SALES BY SEGMENT

0

400

800

1200

1600

Coated woodfree Specialties Other activities

in E

UR

mn

FY10 FY11 FY12 LTM1H13

EBITDA BY SEGMENT

0 25 50 75 100 125 150

Coated woodfree

Specialties

Other activities

in EUR mn

FY10 FY11 FY12 LTM1H13

Strengths/Opportunities – Good market position as the second-largest producer of coated fine paper

in Europe – Good cost position supported by lower transportation and distribution costs

and a well-invested asset base – Good free cash-flow generation capabilities – Solid liquidity position

Weaknesses/Threats – Cyclical and capital-intensive business – Limited vertical integration into fiber and pulp, although the latter is

beneficial to the company in times of low pulp prices – Structural challenges in the industry limit pricing power – Limited business and geographical diversification – Exposure to raw material cost volatility – Highly leveraged financial profile

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0780141999 LECTA E+550bp 15/05/18 B1/B+/-- 390 secured, CoC XS0780068036 LECTA 8.875% 15/05/19 B1/B+/-- 200 secured, callable from 05/15/2015 @ 106.656

Covenants: None. Source: Rating agencies, company data, iBoxx, UniCredit Research

<date>




EUR mn 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 1,355 1,415 1,441 1,520 1,601 1,380 1,522 1,577 790 1,624 810EBIT margin adj. 6.5% 6.9% 3.9% 4.4% 3.1% 5.7% 5.5% 5.8% 5.1% 4.2% 1.6%EBITDA rep. 173 182 153 145 73 154 160 157 76 60 26EBITDA margin adj. 13.1% 13.0% 9.7% 10.1% 8.7% 11.3% 10.6% 10.4% 9.7% 8.7% 6.0%Net income 16 19 20 -30 -78 12 26 24 18 -64 -39Funds from operations (FFO) 105 121 63 54 48 60 112 95 23 47 11Operating cash flow 94 125 98 33 53 118 135 113 32 22 31Free cash flow rep. (after Capex) 31 78 51 -26 -3 73 108 61 8 -28 10Dividend payment -1 -1 -1 -1 0 -2 -2 -6 0 -2 0Retained cash flow (RCF) 104 120 61 53 48 58 111 88 23 46 11Acquisitions / disposals -2 0 24 19 -56 2 2 -4 9 -32 0Share buybacks / issues 0 0 0 0 0 0 0 0 0 0 0Total debt rep. 873 769 754 772 807 807 800 794 646 658 657Net debt rep. 729 644 589 591 665 593 490 432 401 480 473Adj. for pensions 13 21 20 19 20 19 28 27 27 24 24Adj. for operating leases and others 0 12 15 16 12 11 10 20 20 23 23Net debt adj. 741 677 625 625 698 623 527 479 447 527 519

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

2004

2005

2006

2007

2008

2009

2010

2011

1H12

2012

1H13

0

1

2

3

4

5



0

100

200

300

400

500

600

700

Liquidityas of1H13

2013 2014 2015 2016 2017 >2017

in E

UR

mn

Cash Undrawn, committed lines Financial debt Bonds Overdrafts

CREDIT METRICS

2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 1.6 1.6 0.8 0.7 0.6 1.4 1.8 1.8 1.3 1.0 0.6EBIT gross interest cover adj. 1.6 1.6 0.8 0.7 0.6 1.4 1.6 1.5 1.1 0.9 0.5EBITDA net interest cover adj. 3.2 2.9 2.1 1.7 1.8 2.8 3.4 3.3 2.5 2.0 1.5EBITDA gross interest cover adj. 3.2 2.9 2.1 1.7 1.6 2.7 3.1 2.7 2.1 1.9 1.4FFO adj. / net debt adj. 14.2% 18.4% 10.4% 9.2% 7.3% 9.9% 21.8% 20.7% 13.5% 10.2% 8.3%FFO adj. / total debt adj. 11.9% 15.5% 8.3% 7.2% 6.1% 7.4% 13.7% 11.8% 8.7% 7.6% 6.1%RCF adj. / net debt adj. 14.1% 18.3% 10.2% 9.0% 7.3% 9.6% 21.4% 19.4% 12.1% 9.9% 8.0%RCF adj. / total debt adj. 11.8% 15.4% 8.1% 7.0% 6.1% 7.2% 13.5% 11.1% 7.8% 7.4% 5.9%Net debt adj. / EBITDA adj. 4.2 3.7 4.5 4.1 5.0 4.0 3.3 2.9 3.0 3.7 4.6Total debt adj. / EBITDA adj. 5.0 4.4 5.6 5.3 6.0 5.4 5.2 5.1 4.6 5.0 6.2FFO adj. / net interest adj. 1.9 2.0 1.0 0.6 0.7 1.1 2.4 2.0 1.0 0.8 0.6FFO adj. / gross interest adj. 1.9 2.0 1.0 0.6 0.6 1.1 2.2 1.7 0.9 0.7 0.5Total debt adj. / total capital. adj. 67.2% 64.5% 63.0% 64.9% 71.3% 70.8% 70.0% 69.1% 63.8% 69.7% 72.4%Net debt adj. / net capital. adj. 63.1% 60.5% 57.4% 58.9% 67.4% 64.3% 59.5% 56.0% 53.3% 63.2% 66.0%Equity / total assets 25.9% 27.6% 28.1% 26.7% 21.3% 23.1% 23.3% 24.1% 26.7% 21.8% 19.7%


<date>



Mondi Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa3/BBB-/-- STABLE/STABLE/-- Improving Marketweight iBoxx/--/-- GBP 4.8bn

Company Description: Headquartered in South Africa and the UK, Mondi is a leading international paper and packaging company operating 102 plants across 29 countries worldwide. The company holds leading market positions: No. 1 in office paper and uncoated fine paper in Europe and South Africa, No. 1 in kraft paper in Europe, No. 2 in virgin containerboard in Europe and strong positions in Emerging Europe (e.g. No. 1 in container board, No. 1 in corrugated packaging, No. 1 in office paper and uncoated fine paper). In 1H12, the company generated 52% of its revenue in emerging markets, with the remainder generated in Germany, the UK and Other Western Europe. Mondi is a dual-listed company, with the shareholder structure being largely free-float.

Moody's (08/13): An upgrade would require a track record of sustaining the improved profitability and cash flow generation as evidenced by EBITDA margins in the high teens (LTM6M13: 16.5%), RCF/Debt towards 30% (LTM6M13: 29.5%) and leverage in terms of Debt/EBITDA close to 2x (LTM6M13: 2.2x). A further important consideration will be the group's approach to cash usage going forward, in particular with regards to shareholder return and growth projects. Rating pressure could occur if Mondi is unable to sustain recent performance improvements as indicated by RCF/Debt trending to below 20%, EBITDA margins deteriorating towards 10% or should the group generate negative free cash flows. S&P (04/13): The stable outlook reflects S&P's view that Mondi will be able to sustain credit metrics commensurate with the current rating, despite weakening operating conditions in Mondi's main markets. S&P could upgrade Mondi if it proves able to sustain adjusted funds from operations (FFO) to debt of more than 35% (FY12: 34.6%), and adjusted debt to EBITDA of less than 2.5x (FY12: 2.5x), while generating substantial discretionary cash flow. Rating downside, which is remote as long as the company follows its stated financial policy, would likely arise after a significant deterioration in the paper markets or further material debt-funded acquisitions. S&P could downgrade the group if adjusted FFO to debt falls below 30% for a sustained period.

SALES BY SEGMENT

0200400600800

1,0001,2001,4001,6001,8002,000

Pac

kagi

ngP

aper

Fibr

eP

acka

ging

Con

sum

erP

acka

ging

Unc

oate

dFi

ne P

aper

Sou

thA

frica

Div

isio

n

in E

UR

mn

-10%-8%-6%-4%-2%0%2%4%6%8%10%

FY11 FY12 LTM0613 change 1H13 yoy (RS)

ADJUSTED EBITDA BY SEGMENT

-100-50

050

100150200250300350400450

Pac

kagi

ngP

aper

Fibr

eP

acka

ging

Con

sum

erP

acka

ging

Unc

oate

dFi

ne P

aper

Sou

thA

frica

Div

isio

n

Cor

pora

te&

Oth

er

in E

UR

mn

-30%

-20%

-10%

0%

10%

20%

30%FY11 FY12 LTM0613 change 1H13 yoy (RS)

Strengths/Opportunities – Leading market positions in Mondi's relevant markets, particularly in

emerging markets – Strict asset management, as reflected in a 10-year asset modernization

program and a gradual removal of high-cost production – Good cost position, supported by a strong asset base in emerging markets

(>80% of net operating assets), good vertical integration and a constant focus on cost reduction

– Conservative balance sheet structure – Commitment to a financial profile in line with an investment grade rating

Weaknesses/Threats – Cyclical and capital-intensive business with capex at 125% of depreciation

in FY13/14 – Structural challenges in the industry, particularly in Western Europe – Risk of price pressure if recovery in demand does not prove sustainable – Risk connected with the exposure to Emerging Markets (i.e. currency,

country)

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0499542396 MNDILN 5.75% 03/04/17 Baa3/BBB-/-- 500 coupon step-up, CoC XS0834719303 MNDILN 3.375% 28/09/20 Baa3/BBB-/-- 500 ex Nordenia, callable (07/15/14 @ 104.88), CoC XS0523101722 MNDILN 9.75% 07/15/17 Baa3/BBB-/-- 280 coupon step-up, CoC

Covenants: net debt to EBITDA of max. 3.5x in its RCF line


<date>




EUR mn 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 5,751 6,269 6,345 5,257 6,228 5,739 2,840 5,807 3,342EBIT margin adj. 7.1% 8.5% 7.5% 6.3% 8.9% 11.5% 10.3% 10.3% 11.4%EBITDA rep. 726 853 749 607 909 958 436 897 528EBITDA margin adj. 13.2% 14.4% 13.4% 13.0% 14.9% 17.4% 16.2% 16.4% 17.0%Net income 129 280 -181 -3 285 400 174 279 186Funds from operations (FFO) 591 647 558 434 748 805 352 731 419Operating cash flow 509 744 585 682 627 737 250 651 290Free cash flow rep. (after Capex) -7 293 -158 120 183 427 109 276 103Dividend payment -113 -287 -138 -48 -72 -169 -114 -128 -142Retained cash flow (RCF) 478 360 420 386 676 636 238 603 277Acquisitions / disposals -63 -10 -4 59 101 -31 -28 -378 22Share buybacks / issues 289 87 -15 26 -7 -13 -330 -332 -23Total debt rep. 1,894 1,687 1,845 1,640 1,471 1,031 1,338 1,921 1,934Net debt rep. 1,479 1,507 1,690 1,517 1,388 839 1,278 1,865 1,850Adj. for pensions 189 171 170 163 184 181 186 253 243Adj. for operating leases and others 175 212 231 259 311 234 229 136 136Net debt adj. 1,843 1,889 2,091 1,940 1,883 1,253 1,693 2,254 2,229

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

2006 2007 2008 2009 2010 2011 1H12 2012 1H130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5



0

100

200

300

400

500

600

700

800

900

Liquidityas of1H13

<1 year 1-2 years 2-3 years 3-4 years 4-5 years > 5 years

in E

UR

mn

Cash Undrawn Bond Loan

CREDIT METRICS



<date>



Norske Skog Analyst: Christian Aust (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapCaa2/CCC/-- NEG/NEG/-- Weakening Sell --/iBoxx HY/iTraxx S18 NOK 0.7bn

Company Description: Headquartered in Oslo, Norway, Norske Skog is one of the world's leading global publication paper companies. It employs 3,600 people and operates 11 fully or partly-owned paper mills worldwide with an annual production capacity of 3.5mn tons. The company is the second-largest newsprint producer (10% market share) globally behind Resolute Forest Products (formerly AbitibiBowater). In addition, it is a leading producer of magazine paper (coated and uncoated) in Europe. Among European paper producers, Norske is the only company that is globally active. In FY12, Norske Skog generated 64% of its revenues in Europe, with the remainder stemming from Australia/New Zealand (19%), South America (7%), Asia (5%), North America (4%) and Africa (1%). Norske is listed on the Oslo Stock Exchange. As of September 2013, the company had no shareholders with a stake greater than 5%.

Moody's (07/13): The negative outlook reflects potential for further negative rating actions should Norske Skog fail to secure funds sufficient to cover 2014 maturities over the next few months. Moody's considers that there is currently limited potential for any upward rating pressure. However, if a solution is found to address the near-term liquidity requirements, the outlook could be stabilized, while further positive pressure might develop over time should Norske Skog be able to improve its profitability to sustainable levels that allow it to generate meaningful positive free cash flow. S&P (08/13): S&P could lower the long-term rating to 'CCC-' if it thinks that a default, distressed exchange, or redemption appears inevitable within six months, absent unanticipated significant favorable improvements in Norske Skog's liquidity. S&P could revise the outlook to stable if the group's operating performance improves above its expectations (EBITDA margin of 6-8%, translating into EBITDA of NOK 900mn to NOK 1bn in 2013) or if the group secures liquidity sources of a magnitude that would remove uncertainties regarding debt maturities and interest payments in 2014.

SALES BY SEGMENT

0

500

1,000

1,500

Newsprint Europe Newsprint OutsideEurope

Magazine Paper Other/Elimination

in N

OK

mn

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

EBITDA BY SEGMENT

-50 0 50 100 150 200 250

Newsprint Europe

Newsprint OutsideEurope

Magazine Paper

Other/Elimination

in NOK mn

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Strengths/Opportunities – Leading market position in the global newsprint and magazine paper

market – Good vertical integration into pulp – Geographical diversification (though declining), which helps to somewhat

mitigate the impact from the weak market conditions in Europe – Continued cost-savings initiatives should help to at least partly offset

pressure on margins – The company continues to mitigate liquidity risks in view of the FY14

maturities with the disposal of non-core paper capacities during FY13 and securitization programs.

Weaknesses/Threats – Cyclical and capital-intensive business – Structural challenges in the industry (paper substitution/overcapacities) – Low fiber integration – Exposure to raw material cost volatility – Reduced working-capital facility available (NOK 250mn or ca. EUR 30mn)

after cancellation of EUR 140/70mn RCF in September 2013 – Significant debt maturities in 2014, 2015, 2016 and 2017

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0636567710 NSINO 11.75% 15/06/16 Caa3/CCC/-- 150 senior unsecured, CoC XS030755235 NSINO 7% 26/06/17 Caa3/CCC/-- 388 senior unsecured, CoC

Covenants: None.


<date>




NOK mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 23,471 24,068 25,302 25,726 28,812 27,118 26,468 20,362 18,986 18,904 12,903 16,592 9,805EBIT margin adj. 8.2% 5.9% 5.2% 3.6% 5.3% 4.0% 0.6% -1.1% -2.8% -0.5% 3.6% 3.4% 0.7%EBITDA rep. 4,598 4,821 4,240 3,950 3,932 8,395 2,001 3,022 -222 925 229 336 -296EBITDA margin adj. 22.2% 19.6% 17.4% 15.6% 16.5% 14.6% 10.5% 11.0% 7.7% 8.2% 9.1% 9.1% 6.1%Net income 1,168 406 629 -848 -3,017 -683 -2,766 -1,401 -2,468 -2,544 -866 -2,782 -1,387Funds from operations (FFO) 2,840 3,387 3,153 2,744 3,329 2,557 1,565 1,172 642 493 344 527 -166Operating cash flow 3,687 2,973 2,948 3,061 2,763 2,166 2,007 1,765 397 455 745 992 -245Free cash flow rep. (after Capex) 2,541 1,773 967 831 1,041 420 724 1,185 -14 -35 454 500 -597Dividend payment -792 -795 -817 -807 -1,046 -1,049 0 0 0 0 0 0 0Retained cash flow (RCF) 2,048 2,592 2,336 1,937 2,283 1,508 1,565 1,172 642 493 344 527 -166Acquisitions / disposals 706 1,130 202 -3,784 1,224 102 3,542 -74 826 961 654 783 210Share buybacks / issues 0 59 10 3,840 0 5 6 -1 1 0 0 0 0Total debt rep. 19,335 18,946 17,760 20,112 17,826 18,435 21,159 14,247 13,671 9,338 7,531 7,411 7,928Net debt rep. 18,848 18,612 17,341 19,660 17,429 16,643 15,123 10,006 9,231 8,138 6,503 6,217 7,108Adj. for pensions 297 392 270 421 433 318 647 794 567 596 585 557 617Adj. for operating leases and others 0 0 219 219 219 92 76 113 119 82 82 106 106Net debt adj. 19,145 19,004 17,830 20,300 18,081 17,053 15,847 10,913 9,917 8,816 7,170 6,881 7,831

DEBT LEVERAGE

0

1

2

3

4

5

6

7

8

9

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%Net debt adj. / EBITDA adj. FFO adj./net debt adj. (RS)

DEBT MATURITY PROFILE AS OF 30 SEPTEMBER 2013 *

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Liquidityas of3Q13

2013 2014 2015 2016 2017 >2017

in N

OK

mn


CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 4.8 1.1 1.5 1.3 1.5 2.2 0.1 0.9 -0.6 -0.2 1.4 1.2 0.2EBIT gross interest cover adj. 4.8 1.1 1.4 1.2 1.5 2.2 0.1 0.9 -0.6 -0.1 1.1 0.8 0.1EBITDA net interest cover adj. 12.9 3.5 5.1 5.5 4.8 8.1 2.0 -8.3 1.6 2.4 3.9 3.1 0.9EBITDA gross interest cover adj. 12.9 3.5 4.8 5.0 4.5 8.1 2.0 -8.3 1.6 1.7 3.2 2.2 0.6FFO adj. / net debt adj. 14.8% 17.8% 17.8% 13.6% 18.5% 15.2% 10.0% 11.0% 6.8% 6.0% 4.1% 8.2% 0.7%FFO adj. / total debt adj. 14.5% 17.5% 17.4% 13.3% 18.1% 13.7% 7.3% 7.9% 4.7% 5.3% 3.6% 7.0% 0.6%RCF adj. / net debt adj. 10.7% 13.6% 13.2% 9.7% 12.8% 9.0% 10.0% 11.0% 6.8% 6.0% 4.1% 8.2% 0.7%RCF adj. / total debt adj. 10.4% 13.4% 12.9% 9.4% 12.5% 8.2% 7.3% 7.9% 4.7% 5.3% 3.6% 7.0% 0.6%Net debt adj. / EBITDA adj. 3.7 4.0 4.1 5.1 3.8 4.3 5.7 4.9 6.8 5.7 4.3 4.6 8.4Total debt adj. / EBITDA adj. 3.8 4.1 4.2 5.2 3.9 4.7 7.9 6.8 9.8 6.4 4.9 5.4 9.3FFO adj. / net interest adj. 7.0 2.5 3.7 3.8 3.4 5.3 1.1 -4.5 0.7 0.8 0.7 1.2 0.1FFO adj. / gross interest adj. 7.0 2.5 3.5 3.4 3.2 5.3 1.1 -4.5 0.7 0.6 0.5 0.8 0.0Total debt adj. / total capital. adj. 52.3% 50.0% 48.6% 47.8% 49.8% 53.8% 61.6% 56.0% 58.5% 57.6% 56.2% 65.5% 75.9%Net debt adj. / net capital. adj. 51.7% 49.5% 48.0% 47.2% 49.2% 51.3% 53.8% 47.9% 49.4% 54.4% 52.9% 61.8% 74.1%Equity / total assets 39.5% 41.6% 43.3% 43.6% 41.0% 36.9% 30.2% 36.2% 34.8% 33.8% 34.8% 26.9% 17.9%

* Pro-forma for NOK 250mn receivables-backed 3-year facility signed in November 2013 Source: Company data, UniCredit Research

<date>



Sappi Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa3/BB-/-- STABLE/NEG/-- Weakening Hold --/iBoxx HY/-- ZAR 16.7bn

Company Description: Sappi, headquartered in Johannesburg, South Africa, is among the leading global players in the market for coated fine paper and chemical cellulose and holds leading positions in several of its markets. The company has three segments: Sappi Fine Paper North America, Sappi Fine Paper Europe and Sappi Southern Africa. In addition, the company has established a trading network for the international marketing and distribution of its products outside its core operating segments. However, costs associated with these activities are allocated to the three segments. Annual paper capacity is approximately 6.6mn tons; pulp capacity is 3.3mn tons, and there is a capacity of 800,000 tons of chemical cellulose (was increased to 1.3mn tons in 2013). The company has customers in more than 100 countries and production sites in Southern Africa, Europe, North America, and Asia (operating 19 mills globally). It has a level of self-sufficiency of 95% on a net-pulp basis. The company sources its pulp production in Southern Africa, and around 70% of its wood requirements are either owned by the company (555,000 hectares) or under its management. Sappi employs around 15,600 people worldwide and is publicly listed.

Moody's (05/13): The stable rating outlook is based on Moody's expectation of Sappi turning around profitability in 2014. Upward rating pressure could occur if Sappi improves its credit metrics again, as reflected in RCF/debt above 15% and EBITDA margins above 12%, as well as positive free cash flow generation. In addition, Moody's would expect to see an improvement in Sappi's interest coverage, reflected in an EBIT/interest expense ratio approaching 2.0x, before considering a rating upgrade to Ba2. The ratings could experience downward pressure in case of a further material weakening of profitability or the inability to sustain current credit metrics, reflected in EBITDA margins dropping to the single digits in percentage terms, RCF/debt falling towards the single digits, or EBITDA-capex/interest expense deteriorating below 1.0x. Also, the rating could come under pressure in case Sappi makes sizable debt-funded acquisitions or pays material amounts of cash to shareholders. S&P (07/13): The negative outlook reflects S&P's view that despite good progress on the conversion of two major dissolving wood pulp mills, weaker market conditions than it anticipates or start-up delays relating to the conversions could weaken Sappi's credit metrics to levels below thresholds for a 'BB-' rating. S&P could downgrade Sappi if the group's ratio of funds from operations (FFO) to debt falls to less than 15%, or if S&P's adjusted debt to EBITDA rises to more than 4.5x, and stays there on a sustained basis with few indications of a swift reversal. S&P could revise the outlook to stable if Sappi generates FFO to debt of more than 15% or adjusted debt to EBITDA of less than 4.5x, provided that near to medium-term macroeconomic and industry conditions support its view that Sappi could sustain such improved levels.

SALES BY SEGMENT

0

1,000

2,000

3,000

4,000

5,000

Fine Paper Europe Fine Paper NorthAmerica

Southern Africa

in U

SD

mn

FY09/10 FY10/11 FY11/12 FY12/13

EBITDA BY SEGMENT

0 100 200 300 400

Fine Paper Europe

Fine Paper NorthAmerica

Southern Africa

Unallocated

in USD mn

FY09/10 FY10/11 FY11/12 FY12/13

Strengths/Opportunities – Competitive cost position – Good market position in relevant markets – Sufficient level of geographical diversification – Good level of self-sufficiency in pulp and thus lower dependency on pulp

price changes in North America and Southern Africa – Focus on improving cash generation and net debt reduction supported by

not paying dividends to shareholders

Weaknesses/Threats – Cyclicality of paper business and structural demand pressure – Focus on paper production, although shifting to specialized cellulose – Exposure to raw material and energy cost inflation – Relatively low level of integration in pulp in its European operations

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0615932331 SAPSJ 6.625% 04/18 Ba2/BB/-- 250 CoC @ 101; callable from 04/15/2015 @ 103.313

Covenants: Financial covenants exist in Sappi's RCF facility.


<date>




USD mn 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13Sales 4,941 5,304 5,863 5,369 6,572 7,286 6,347 5,925EBIT margin adj. 2.7% 6.4% 6.4% 1.1% 5.6% 6.0% 7.1% 3.8%EBITDA rep. 516 747 671 314 741 497 861 371EBITDA margin adj. 10.6% 13.4% 12.8% 8.5% 12.1% 11.8% 13.2% 9.7%Net income -4 202 102 -177 66 -232 104 -161Funds from operations (FFO) 245 396 427 346 534 504 513 286Operating cash flow 228 456 428 498 529 406 411 266Free cash flow rep. (after Capex) -75 14 -77 322 318 138 56 -286Dividend payment -68 -68 -73 -37 0 0 0 0Retained cash flow (RCF) 177 328 354 309 534 504 513 286Acquisitions / disposals 16 78 11 -586 23 25 71 53Share buybacks / issues 0 0 0 544 -3 0 0 0Total debt rep. 2,374 2,664 2,704 3,384 3,016 2,739 2,624 2,599Net debt rep. 2,150 2,300 2,430 2,614 2,224 2,100 1,979 2,214Adj. for pensions 703 283 224 462 471 472 541 524Adj. for operating leases and others 167 133 72 69 101 79 78 84Net debt adj. 3,019 2,716 2,726 3,145 2,796 2,651 2,597 2,822

DEBT LEVERAGE

0%

5%

10%

15%

20%

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

2012

/13

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

FFO adj. / net debt adj. Net debt adj. / EBITDA adj. (RS)Mid-term target leverage (RS)


0

200

400

600

800

1,000

1,200

Liquidity asof

FYE12/13

2013 2014 2015 2016 2017

in U

SD

mn


CREDIT METRICS

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13EBIT net interest cover adj. 0.9 2.0 2.5 0.4 1.2 1.3 1.4 1.3EBIT gross interest cover adj. 0.8 1.8 2.0 0.3 1.2 1.3 1.4 1.3EBITDA net interest cover adj. 3.4 4.3 5.0 3.2 2.6 2.5 2.7 3.2EBITDA gross interest cover adj. 2.9 3.8 4.0 2.2 2.5 2.5 2.7 3.2FFO adj. / net debt adj. 9.4% 18.2% 16.5% 11.7% 20.2% 19.8% 20.5% 10.9%FFO adj. / total debt adj. 8.7% 16.1% 15.0% 9.4% 15.7% 16.0% 16.4% 9.6%RCF adj. / net debt adj. 7.1% 15.7% 13.9% 10.5% 20.2% 19.8% 20.5% 10.9%RCF adj. / total debt adj. 6.6% 13.9% 12.6% 8.4% 15.7% 16.0% 16.4% 9.6%Net debt adj. / EBITDA adj. 5.7 3.8 3.6 6.9 3.5 3.1 3.1 4.9Total debt adj. / EBITDA adj. 6.2 4.3 4.0 8.5 4.5 3.8 3.9 5.6FFO adj. / net interest adj. 1.8 3.0 3.0 2.6 1.9 1.5 1.7 1.7FFO adj. / gross interest adj. 1.6 2.7 2.4 1.8 1.8 1.5 1.7 1.7Total debt adj. / total capital. adj. 69.6% 61.9% 63.9% 67.8% 64.9% 68.4% 66.5% 72.4%Net debt adj. / net capital. adj. 68.1% 58.9% 61.6% 62.9% 59.0% 63.5% 61.4% 69.7%Equity / total assets 25.1% 28.6% 26.3% 24.6% 26.4% 23.4% 24.7% 20.0%


<date>



Stora Enso Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12606 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa2/BB/BB- NEG/STABLE/STABLE Stable Sell --/iBoxx HY/iTraxx S18 EUR 5.8bn

Company Description: Headquartered in Finland, Stora Enso (www.storaenso.com) is a global paper, packaging and forest products company with annual production capacity of paper and board of 12.7mn tons, 1.5bn square meters of corrugated packaging and 6.9mn cubic meters of sawn wood products. Its product line includes newsprint and book paper (market share of 18% in Europe), magazine paper (17% in Europe, 40% in Latin America), fine paper (14% in Europe for graphic paper, 12% for office paper), consumer board, industrial packaging and wood products (market share of 4% in Europe). The company employs 29,505 people in more than 35 countries. Stora Enso's largest shareholders are Foundation Asset Management, holding 27% of voting rights, Solidium Oy, which is entirely owned by the Finnish state, with 25% of voting rights, and Social Insurance Institution of Finland (10% of voting rights).

Moody's (10/13): Stora Enso is very weakly positioned in the Ba2 rating category, as reflected in the negative outlook. Moody's would consider downgrading Stora Enso if LTM RCF/debt does not move towards the low-to-mid teens over the next few quarters, with EBITDA margins trending below 10%. The rating could be upgraded should Stora Enso be able to gradually improve operating profitability, with EBITDA margins improving towards the mid-teens, and achieve retained cash flow to debt at close to 20%. S&P (10/13): The stable outlook reflects S&P's view that Stora Enso's revised investment program and profitability improvements will lead to adj. FFO/debt of about 20% in 2013 and 20-25% in 2014 (FY12: 21%). An upgrade is considered highly unlikely in the short term, given difficult European paper markets and Stora Enso's capex program. Over the longer term, S&P could raise the rating if the group's profitability and cash flow generation improves, which could lead to a revision of Stora Enso's business risk profile (currently: fair), or if FFO/debt rose above 30%. A rating downgrade could occur as a result of FFO/debt falling to about 15% for an extended period, the group's credit quality is adversely affected by a less stringent financial policy (i.e. large, debt-financed acquisitions or exceptionally shareholder-friendly measures, though currently considered unlikely). Fitch (11/13): An improvement in operating performance, with FFO gross leverage below 4.0x and recurring EBIT margin above 6.0% on a sustained basis could lead to positive rating action. Higher leverage, with FFO leverage remaining above 5.0x on a sustained basis could lead to a negative rating action.

SALES BY SEGMENT

0 1,000 2,000 3,000 4,000 5,000

Printing and Reading

Biomaterials

Buidling and Living

RenewablePackaging

Other

in EUR mn

FY11 FY12 LTM9M13

OPERATING EBIT BY SEGMENT EXCL. EXTRAORDINARIES

0 100 200 300

Printing and Reading

Biomaterials

Buidling and Living

RenewablePackaging

Other

in EUR mn

FY11 FY12 LTM9M13

Strengths/Opportunities – Leading player in the paper and board market, with strong positions in the

individual segments – Good product diversification – High self-sufficiency in pulp (including access to low-cost pulp) and energy – Exposure to the more stable packaging segments – Strong focus on cost reduction and improving cash generation

Weaknesses/Threats – Cyclical and capital-intensive business – Structural challenges in the industry – Exposure to raw material price fluctuations – Low level of fiber integration – Strong competition – Exposure to graphic paper, which tends to be more cyclical

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0194948617 STERV 5.125% 23/06/14 Ba2/BB/BB- 347 Senior unsecured, Retail size, EMTN XS0456197291 STERV E+421bp 07/10/16 --/BB/-- 390 Senior unsecured, EMTN XS0830688411 STERV 5% 03/19/18 Ba2/BB/BB- 500 Senior unsecured, EMTN XS0754290459 STERV 5.5% 07/03/19 Ba2/BB/-- 500 Senior unsecured, EMTN

Covenants: None.


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 12,813 12,172 12,396 13,188 14,594 11,849 11,029 8,945 10,297 10,965 8,088 10,815 7,940EBIT margin adj. 7.8% 4.4% 4.1% 3.2% 5.6% 4.5% 3.8% 2.6% 6.7% 8.0% 6.0% 5.3% 5.3%EBITDA rep. 2,290 1,672 1,908 1,368 1,882 1,365 695 434 1,197 1,214 856 1,113 669EBITDA margin adj. 17.5% 14.3% 12.8% 11.8% 11.0% 10.4% 9.6% 8.1% 10.1% 10.3% 10.1% 8.6% 9.4%Net income -222 144 766 -107 589 -212 -675 -878 769 342 225 490 89Funds from operations (FFO) 1,973 1,218 1,587 1,088 1,168 1,191 531 665 1,084 870 592 880 512Operating cash flow 1,426 1,689 1,495 687 1,457 860 613 1,303 812 697 551 936 608Free cash flow rep. (after Capex) 549 456 515 -458 873 40 -94 879 412 287 174 375 333Dividend payment -404 -388 -376 -365 -355 -355 -355 -158 -158 -197 -239 -239 -243Retained cash flow (RCF) 1,570 830 1,212 723 813 836 177 507 926 673 353 641 269Acquisitions / disposals 695 -178 -173 -275 346 253 172 -39 -5 -132 -104 -118 -40Share buybacks / issues -287 -322 -199 -345 5 5 -4 -8 -1 -4 0 0 0Total debt rep. 5,176 5,174 4,028 6,084 5,248 4,441 4,076 3,937 4,011 4,373 5,212 5,134 5,147Net debt rep. 5,007 4,973 3,753 5,733 4,639 3,471 3,660 3,046 2,900 3,235 3,504 3,284 3,050Adj. for pensions 951 1,133 1,074 872 736 324 297 293 310 331 333 458 456Adj. for operating leases and others 188 142 345 495 472 360 279 267 449 358 340 340 340Net debt adj. 6,147 6,248 5,173 7,099 5,846 4,155 4,236 3,606 3,660 3,923 4,176 4,082 3,846

DEBT LEVERAGE

0.0x

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%adj. EBITDA/net debt adj. FFO/net debt (RS)


0

500

1,000

1,500

2,000

2,500

3,000

Liquidity asof 3Q13

2013 2014 2015 2016 >2016

in E

UR

mn

Cash Undrawn, committed lines Bank debt Bonds CP

CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 4.0 2.7 4.2 2.6 8.8 3.3 2.3 0.8 5.3 2.4 1.7 2.4 2.2EBIT gross interest cover adj. 3.5 2.4 1.9 1.1 2.4 3.3 2.3 0.8 3.1 2.1 1.6 2.4 2.2EBITDA net interest cover adj. 9.0 8.7 13.3 9.4 17.3 7.8 6.0 2.5 8.0 3.1 2.3 3.9 3.7EBITDA gross interest cover adj. 7.8 7.6 5.9 4.1 4.6 7.8 6.0 2.5 4.7 2.7 2.1 3.9 3.7FFO adj. / net debt adj. 32.5% 19.8% 31.0% 15.6% 20.4% 28.8% 13.0% 18.9% 30.1% 22.9% 17.6% 22.3% 21.6%FFO adj. / total debt adj. 31.6% 19.2% 29.5% 14.9% 18.5% 23.3% 11.8% 15.2% 23.1% 17.8% 12.5% 15.3% 14.0%RCF adj. / net debt adj. 25.9% 13.6% 23.8% 10.5% 14.3% 20.2% 4.6% 14.6% 25.8% 17.9% 11.9% 16.4% 15.2%RCF adj. / total debt adj. 25.2% 13.2% 22.6% 10.0% 13.0% 16.4% 4.2% 11.7% 19.8% 13.9% 8.4% 11.3% 9.9%Net debt adj. / EBITDA adj. 2.7 3.6 3.3 4.6 3.7 3.4 4.0 5.0 3.5 3.5 4.6 4.4 4.5Total debt adj. / EBITDA adj. 2.8 3.7 3.4 4.8 4.0 4.1 4.4 6.2 4.6 4.5 6.4 6.4 6.9FFO adj. / net interest adj. 8.0 6.2 13.4 6.7 12.9 7.5 3.1 2.4 8.5 2.4 1.9 3.8 3.6FFO adj. / gross interest adj. 7.0 5.4 6.0 2.9 3.4 7.5 3.1 2.4 5.0 2.2 1.7 3.8 3.6Total debt adj. / total capital. adj. 44.2% 45.3% 41.2% 50.4% 44.9% 40.4% 45.1% 46.4% 43.2% 45.9% 50.2% 50.2% 52.1%Net debt adj. / net capital. adj. 43.5% 44.5% 40.0% 49.2% 42.4% 35.5% 42.8% 41.0% 36.9% 39.7% 41.7% 41.0% 41.3%Equity / total assets 45.0% 44.7% 47.8% 41.0% 45.3% 49.3% 46.2% 44.7% 48.0% 45.8% 42.7% 42.9% 41.1%


<date>




Chemicals iBoxx Chemicals Sector Composition

IBOXX EUR CHEMICALS ISSUANCE ACTIVITY

LINGRLIN

GR

LINGRLIN

GR

BASG

RBASG

R

BASG

RIN

TPET

AKZA

NA

AKZA

NA

AIFP

LXSG

R

EVKG

R

SDFG

R

0

500

1,000

1,500

2,000

2,500

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12Fe

b-12

Mar

-12

Apr

-12

May

-12

Jun-

12Ju

l-12

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Issu

ance

in E

UR

mn



Issue Date Bond Notional (EUR mn)04/18/13 LINGR 2% Apr-23 65004/08/13 EVKGR 1.875% Apr-20 50002/04/13 BASGR 1.875% Feb-21 50012/05/12 BASGR 2% Dec-22 1,00011/30/12 INTPET 3.625% May-23 85011/30/12 INTPET 2.375% May-18 80011/21/12 LXSGR 2.625% Nov-22 50010/15/12 AIFP 2.125% Oct-21 50010/01/12 BASGR 1.5% Oct-18 75009/17/12 LINGR 1.75% Sep-20 1,00007/27/12 AKZANA 2.625% Jul-22 75006/20/12 SDFGR 3% Jun-22 50006/11/12 LINGR 1.75% Jun-19 500


IBOXX EUR CHEMICALS REDEMPTIONS

BASG

R

BASG

R

BASG

R

AKZA

NA

AKZA

NA

AIFP

SOLB

BB

SOLB

BB

BAYN

GR

BAYN

GR

DSM

LXSG

R

EVKG

RSD

FGR

SYNN

VX

SYNN

VX

RAGD

ESA

BIC

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

14Ju

l-14

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr

-15

May

-15

Jun-

15Ju

l-15

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Red

empt

ions

in E

UR

mn



Maturity Bond Notional (EUR mn)11/28/13 SABIC 4.5% Nov-13 75012/04/13 BASGR 6% Dec-13 1,25012/10/13 RAGDE 5.125% Dec-13 1,09301/10/14 SOLBBB 4.875% Jan-14 50001/31/14 AKZANA 7.75% Jan-14 82503/17/14 DSM 5.75% Mar-14 50004/09/14 LXSGR 7.75% Apr-14 50006/25/14 AIFP 4.75% Jun-14 53506/30/14 SYNNVX 4% Jun-14 50009/24/14 SDFGR 5% Sep-14 75009/26/14 BASGR 5% Sep-14 1,25010/14/14 EVKGR 7% Oct-14 75003/27/15 AKZANA 7.25% Mar-15 622


IBOXX EUR B CHEMICALS OUTSTANDING

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

Apr-00 Apr-02 Apr-04 Apr-06 Apr-08 Apr-10 Apr-12

Out

stan

ding

in E

UR

mn

LINGR BASGR INTPET AKZANAAIFP SOLBBB BAYNGR Others



Issuer (Ticker) Outstanding (EUR mn) No of BondsLinde (LINGR) 5,800 8BASF (BASGR) 4,950 5IPIC (INTPET) 4,150 4Akzo Nobel (AKZANA) 2,172 3Air Liquide (AIFP) 1,500 3Solvay (SOLBBB) 1,500 3DSM (DSM) 1,250 2Lanxess (LXSGR) 1,000 2Evonik Industries (EVKGR) 500 1Arkema (AKEFP) 500 1K+S (SDFGR) 500 1Syngenta (SYNNVX) 500 1


<date>




iBoxx Chemicals Market Spreads

CHEMICALS 5Y SENIOR CDS HISTORY

0

50

100

150

200

250

300


5Y C

DS

in b

p

0

100

200

300

400

500

600AIFP AKZANA BASGR CLNVXDSM EVKGR LINGR LXSGRSOLBBB SYNNVX INEGRP (RS)



0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5

EVKGR

SYNNVX

AIFP

LINGR

DSM

BASGR

AKZANA

SOLBBB

LXSGR

CLNVX

INEGRP


CHEMICALS CASH CURVES

KERLIN 10.625% Feb-17

INEGRP 7.875% Feb-16

SOLBBB 6.375% Jun-04

STYRO 7.625% May-16SDFGR 3% Jun-22

BNRGR 5.5% Jul-18

CLNVX 5.625% Jan-17 LXSGR 2.625% Nov-22

LXSGR 4.125% May-18AKEFP 4% Oct-17

EVKGR 1.875% Apr-20SOLBBB 4.625% Jun-18

SOLBBB 5% Jun-15

DSM 5.25% Oct-17SYNNVX 4.125% Apr-15

DSM 4% Nov-15

LINGR

BASGR

AKZANA

AIFP0

50

100

150

200

250

300

350

400

0 2 4 6 8 10 12mDur

AS

W in

bp



AIFP

5.2

5% J

ul-1

7

DSM

5.2

5% O

ct-1

7

LIN

GR

1.7

5% J

un-1

9LI

NG

R 3

.125

% D

ec-1

8

LIN

GR

3.8

75%

Jun

-21

EV

KG

R 1

.875

% A

pr-2

0AK

ZAN

A 4%

Dec

-18

AKE

FP 4

% O

ct-1

7LX

SGR

4.1

25%

May

-18

AKZA

NA

2.62

5% J

ul-2

2LX

SGR

2.6

25%

Nov

-22

BNR

GR

5.5

% J

ul-1

8SD

FGR

3%

Jun

-22 ST

YRO

7.6

25%

May

-16

SOLB

BB 6

.375

% J

un-0

4IN

EGR

P 7.

875%

Feb

-16

KER

LIN

10.

625%

Feb

-17

INEG

RP

6.5%

Aug

-18

LIN

GR

4.7

5% A

pr-1

7

LIN

GR

7.3

75%

Jul

-66

CLN

VX 5

.625

% J

an-1

7

BAS

GR

2%

Dec

-22

LIN

GR

1.7

5% S

ep-2

0SO

LBBB

4.6

25%

Jun

-18

BASG

R 1

.875

% F

eb-2

1LI

NG

R 2

% A

pr-2

3AI

FP 2

.125

% O

ct-2

1

AKZA

NA

7.25

% M

ar-1

5SO

LBBB

5%

Jun

-15

AIFP

3.8

89%

Jun

-20

BAS

GR

4.5

% J

un-1

6B

ASG

R 5

.125

% J

un-1

5BA

SGR

1.5

% O

ct-1

8LI

NG

R 6

.75%

Dec

-15

DSM

4%

Nov

-15

SYN

NVX

4.1

25%

Apr

-15

-100

0

100

200

300

400

500

600

700

800

ASW

in b

p



Air Liquide

Akzo Nobel

BASF DSM

Evonik Industries

Linde

Lanxess

Solvay

Syngenta

0

20

40

60

80

100

120

140

4 5 6 7 8 9 10

5Y C

DS

AA- A+ A A- BBB+ BBB



Syngenta

Solvay

Lanxess

Linde

Ineos

Evonik Industries

DSM

Clariant

BASF

Akzo Nobel

Air Liquide

0

20

40

60

80

100

120

140

160

180

200

1 1.5 2 2.5 3 3.5 4 4.5 5Leverage

5Y C

DS


<date>



Air Liquide Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/A/-- --/CWP/-- Stable Underweight iBoxx/--/iTraxx S14 EUR 31.8bn

Company Description: Founded in 1902 and based in Paris, France, Air Liquide (www.airliquide.com) is the market leader in industrial gases; a close second is Germany-based Linde AG. The company's core business (Gas and Services division, which accounts for close to 90% of group sales) is the supply of oxygen, nitrogen, hydrogen and many other gases and services to 1 million customers in a variety of industries. Air Liquide also manufactures welding equipment, diving equipment and technical-medical equipment. Its plant engineering and construction activities (Engineering and Construction division contributes 5% to group sales) include German Lurgi AG. The company has a presence in 80 countries. Europe accounted for 50% of FY12 sales in the Gas and Services division (and contributes close to 90% of group sales); the Americas for 25%; Asia-Pacific for 22% and Middle East/Africa for 3%. At FYE 2012, Air Liquide employed 49,500 people. Its shares are widely spread with no major shareholders.

Moody's (08/13): At Moody's, Air Liquide maintains a short-term rating of P-1. Moody's expects Air Liquide to continue to post RCF/net debt above 27-28% (LTM 2Q13: 24%). Throughout the cycle, Moody's expects Air Liquide not to fall materially below 27% RCF/net debt. A decline in the EBITDA margin, notably to below 20% (LTM 2Q13: 25%), and a return on assets below 10% (LTM 2Q13: 9.7%) on a sustained basis would pressure the rating downwards. S&P (11/13): As part of its revised corporate criteria, S&P put Air Liquide under credit watch positive. The credit watch status is likely resolved over the coming weeks.

SALES BY SEGMENT

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Gas and Services Eng. & Cons Other Activities

EU

R m

n

2008 2009 2010 2011 2012 LTM 1H13

RECURRING OPERATING INCOME BY SEGMENT

0

500

1,000

1,500

2,000

2,500

3,000

Gas and Services Eng. & Cons Others

EU

R m

n2008 2009 2010 2011 2012 LTM 1H13

Strengths/Opportunities – Leading industrial gas supplier worldwide – Concentrated industrial gas industry – Healthy EBITDA margins supported by continued focus on efficiency

("ALMA-program") – Strong liquidity position

Weaknesses/Threats – Cyclical Industrial Merchant and Electronics, Chemicals and Welding

markets – Shareholder-friendly financial policy – Potential for larger-than-expected acquisitions as a result of expansive

growth strategy – Capital-intensive business with substantial capex requirements (>10% of

total sales) to maintain growth momentum

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010500744 AIFP 5.25% 18/07/17 --/A/-- 500mn CoC FR0010908905 AIFP 3.889% 09/06/20 --/A/-- 500mn -- FR0011344076 AIFP 2.125% 15/10/21 --/A/-- 500mn CoC

Covenants: The group's RCF (EUR 1bn), maturing in 2018 (with a 1 year remaining extension options), does not, according to Moody's, include any financial covenants or MAC clauses.


<date>




EUR mn 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 10,436 10,949 11,801 13,103 11,976 13,488 14,457 7,533 15,326 7,562EBIT margin adj. 15.9% 16.3% 16.4% 16.1% 17.7% 17.9% 17.8% 17.7% 17.9% 18.0%EBITDA rep. 2,371 2,570 2,725 2,912 2,979 3,376 3,591 1,855 3,765 1,836EBITDA margin adj. 24.5% 24.6% 24.3% 23.6% 26.2% 26.2% 25.8% 25.6% 26.0% 26.2%Net income 1,007 1,072 1,170 1,272 1,285 1,458 1,595 817 1,676 783Funds from operations (FFO) 1,805 1,889 2,054 2,207 2,275 2,661 2,728 1,413 2,913 1,501Operating cash flow 1,720 1,767 2,102 2,293 2,452 2,420 2,426 1,138 2,709 1,194Free cash flow rep. (after Capex) 745 639 743 385 1,041 970 671 181 701 212Dividend payment -476 -479 -530 -590 -631 -647 -721 -760 -781 -855Retained cash flow (RCF) 1,329 1,410 1,524 1,617 1,644 2,014 2,007 653 2,132 646Acquisitions / disposals 178 30 -1,115 -192 -31 -197 81 -29 -830 -100Share buy back / issues 19 -23 -443 -124 174 113 -46 -101 -77 -78Total debt rep. 4,396 4,344 5,364 6,817 6,355 6,602 7,036 7,156 7,274 7,870Net debt rep. 3,798 3,446 4,637 5,554 4,970 5,079 5,275 6,035 6,120 6,845Adj. for pensions 1,550 1,426 1,480 1,684 1,687 1,724 1,772 1,808 1,913 1,841Adj. for operating leases and others 271 549 564 479 350 461 492 496 502 511Net debt adj. 5,619 5,421 6,681 7,717 7,007 7,263 7,539 8,339 8,535 9,197

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H130.0

0.6

1.2

1.8

2.4



0

500

1,000

1,500

2,000

2,500

3,000

3,500

Liquidityas of1H13

ST-Debtas of1H13

2014 2015 2016 2017 >2017

EU

R m

n

Bonds, CP Cash RCF ST-Debt

CREDIT METRICS

2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 8.7 9.8 9.1 8.5 8.3 9.1 9.5 9.5 9.7 10.3EBIT gross interest cover adj. 8.7 9.8 9.1 8.5 8.3 9.1 9.5 9.5 9.7 10.3EBITDA net interest cover adj. 13.3 14.7 13.5 12.5 12.3 13.3 13.7 13.8 14.0 14.9EBITDA gross interest cover adj. 13.3 14.7 13.5 12.5 12.3 13.3 13.7 13.8 14.0 14.9FFO adj. / net debt adj. 33.3% 36.0% 31.9% 29.6% 33.6% 37.9% 37.5% 34.9% 35.3% 34.3%FFO adj. / total debt adj. 30.1% 30.9% 28.8% 25.4% 28.1% 31.3% 30.4% 30.7% 31.1% 30.8%RCF adj. / net debt adj. 24.8% 27.2% 23.9% 21.9% 24.6% 29.0% 28.0% 25.6% 26.2% 24.8%RCF adj. / total debt adj. 22.4% 23.3% 21.6% 18.9% 20.5% 24.0% 22.7% 22.6% 23.1% 22.3%Net debt adj. / EBITDA adj. 2.2 2.0 2.3 2.5 2.2 2.1 2.0 2.2 2.1 2.3Total debt adj. / EBITDA adj. 2.4 2.3 2.6 2.9 2.7 2.5 2.5 2.5 2.4 2.5FFO adj. / net interest adj. 9.8 10.7 10.0 9.2 9.2 10.4 10.4 10.5 10.6 11.6FFO adj. / gross interest adj. 9.8 10.7 10.0 9.2 9.2 10.4 10.4 10.5 10.6 11.6Total debt adj. / total capital. adj. 49.0% 48.3% 51.9% 55.3% 51.0% 48.3% 47.4% 47.8% 46.8% 48.9%Net debt adj. / net capital. adj. 46.5% 44.5% 49.3% 51.6% 46.5% 43.6% 42.2% 44.6% 43.7% 46.3%Equity / total assets 38.1% 40.3% 35.6% 33.5% 37.6% 40.4% 41.4% 41.2% 41.7% 40.5%


<date>



AkzoNobel Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa1/BBB+/BBB+ NEG/STABLE/NEG Stable Underweight iBoxx/--/iTraxx S18 EUR 13.2bn

Company Description: AkzoNobel (www.akzonobel.com), headquartered in Arnhem, the Netherlands, is a multinational chemical group. Following the divestment of its pharmaceutical unit Organon for EUR 11bn in FY07, Akzo acquired UK paint and coatings manufacturer ICI for approximately EUR 15bn in FY08 to become the number one coatings and paints company in the world. In 4Q12, the company divested its North American decorative paints business for USD 1.1bn to PPG. Akzo maintains three business segments: Performance Coatings (37% of 2012 sales), Specialty Chemicals (36%) and Decorative Paints (27%). In FY12, Akzo generated 38% of sales in Mature Europe, 8% in Emerging Europe, 15% in North America and 11% in Latin America, 26% in Asia and 2% in the rest of the world. Akzo operates in around 80 countries and employs approximately 50,420 people. Shareholding in the company, which is listed on the Amsterdam Stock Exchange, is widely spread.

Moody's (07/13): The negative outlook reflects an unstable positioning of the Baa1 ratings amid the expectation that AkzoNobel's financial metrics will be weak in 2013. Stabilization of the outlook, therefore, will require a demonstrated improvement in the company's financial profile, with RCF/net debt in the high twenties (LTM 2Q13: 36%), solid FCF generation and total debt/EBITDA at or below 2.5x (LTM 2Q13: 3.5x). S&P (06/13): A downgrade might be considered if FFO/debt fell sustainably below 30% (LTM 2Q13: 34%) or if there was substantial negative FOCF (i.e. due to sizable capex). Significant M&A is not factored in the rating. An upgrade is not excluded over the medium term, provided healthy sustainable positive FOCF, notably if the challenging economic climate were to persist. In addition, ratings upside would depend on sufficiently supportive financial policies, and management's commitment to higher credit metrics. Fitch (05/13): Fitch might downgrade in the event of a deterioration in trading conditions, material debt-financed M&A, shareholder-friendly actions or delays/overspend on restructuring measures leading to sustained lease-adjusted net FFO leverage above 2.0x and/or negative free cash flow (FCF). Visible performance gains from the restructuring program, with underlying margin improvements, positive free cash flow generation and deleveraging on a sustainable basis to FFO net leverage of below 2.0x.

SALES BY SEGMENT

0

1,000

2,000

3,000

4,000

5,000

6,000

Performance Coatings Specialty Chemicals Decorative Paints

in E

UR

mn

2007 2008 2009 2010 2011 2012 LTM 9M13

EBITDA BY SEGMENT

0

100

200

300

400

500

600

700

800

900

1,000

Specialty Chemicals Performance Coatings Decorative Paints

in E

UR

mn

2007 2008 2009 2010 2011 2012 LTM 9M13

Strengths/Opportunities – Significant size and leading market positions in paints and coatings as well

as in niche markets for specialty polymers – Diversified customer base serving a variety of end markets – Track record of growth above industry average – Cost savings program is on track in 3Q13 to yield EUR 500mn by the end

of 2013. (at cash cost of EUR 425mn); working capital management supports free cash-flow generation

– Commitment to BBB+ rating, however, new leverage target leaves room for an increase in leverage

Weaknesses/Threats – Exposure to housing markets (Europe) weighs on performance of

Decorative Paints business – Continuing raw material and energy cost volatility, however, input costs

only account for around 50% of sales (considerably more for commodity chemical players)

– Relatively weak cash conversion rate of around 37% in 2012 (FFO/EBITDA around 40-45% over 2009-2011)

– Larger-than-expected acquisitions and accelerating shareholder remuneration

– Significant pension liabilities and associated top-up payments of EUR 355mn in 2012 (EUR 300-330mn p.a. during 2013-2017)

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0419378236 AKZANA 7.25% 27/03/15 Baa1/BBB+/BBB+ 621 CoC XS0719962986 AKZANA 4% 17/12/18 Baa1/BBB+/BBB+ 800 CoC XS0809847667 AKZANA 2.625% 27/07/22 Baa1/BBB+/-- 750 CoC

Covenants: According to S&P, there are no covenants for the EUR 1.8bn RCF line.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 13,051 12,833 13,000 13,737 15,255 15,415 13,893 14,640 14,604 12,658 15,390 11,108EBIT margin adj. 11.8% 8.6% 7.8% 10.8% 8.3% 8.4% 9.2% 9.7% 9.5% -10.6% -7.4% 8.3%EBITDA rep. 1,716 2,166 2,187 2,043 1,345 1,927 1,492 1,809 1,708 1,321 1,487 1,305EBITDA margin adj. 16.8% 13.6% 13.2% 15.0% 10.7% 13.4% 13.7% 13.8% 13.4% 13.0% 10.4% 12.5%Net income 651 981 998 1,182 719 -1,021 362 837 541 -2,065 -2,106 728Funds from operations (FFO) 1,516 1,269 1,106 1,166 704 593 650 743 776 320 543 697Operating cash flow 1,397 1,237 858 1,256 788 237 1,289 619 445 120 794 407Free cash flow rep. (after capex) 789 658 277 715 429 -297 746 85 -213 -394 -32 -25Dividend payment -370 -366 -366 -369 -398 -581 -454 -403 -362 -189 -256 -216Retained cash flow (RCF) 1,146 903 740 797 306 12 196 340 414 131 287 481Acquisitions / disposals 180 956 9 45 12 -10,113 -55 -52 -164 -9 71 4Share buybacks / issues 0 0 0 40 -1,527 -1,430 4 9 15 0 8 0Total debt rep. 3,158 3,241 3,059 2,961 4,364 3,679 3,872 3,787 3,529 4,140 4,050 4,053Net debt rep. 2,431 1,429 1,573 1,090 2,910 2,084 1,744 936 1,894 2,597 2,298 1,817Adj. for pensions 2,577 2,769 2,299 2,032 1,405 1,498 1,973 1,386 970 970 1,315 1,315Adj. for operating leases and others 397 413 300 303 355 355 446 506 547 534 539 539Net debt adj. 5,405 4,610 4,171 3,426 4,670 3,937 4,163 2,829 3,411 4,101 4,151 3,670

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0

1

2

3

4



0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Liquidityas of9M13

Short-term debt

as of9M13

2013 2014 2015 2016 >2016

Cash Undrawn, committed lines Total bonds ST-Debt

CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 7.5 6.0 5.4 10.5 18.5 6.0 2.8 3.9 4.7 -4.0 -4.9 4.5EBIT gross interest cover adj. 6.9 6.0 6.2 10.5 3.6 3.5 3.8 4.5 3.9 -2.9 -3.9 4.3EBITDA net interest cover adj. 10.6 9.4 9.2 14.6 23.9 9.4 4.2 5.5 6.6 7.9 7.0 5.4EBITDA gross interest cover adj. 9.8 9.5 10.5 14.6 4.7 5.5 5.6 6.3 5.5 5.7 5.5 5.1FFO adj. / net debt adj. 30.1% 30.0% 28.4% 36.2% 17.0% 17.3% 18.6% 43.3% 36.2% 14.6% 15.8% 28.3%FFO adj. / total debt adj. 26.6% 21.5% 21.0% 23.4% 12.9% 12.3% 12.3% 21.6% 24.5% 10.6% 11.1% 17.6%RCF adj. / net debt adj. 23.3% 22.1% 19.7% 25.4% 8.4% 2.6% 7.7% 29.1% 25.6% 8.1% 9.6% 20.5%RCF adj. / total debt adj. 20.5% 15.8% 14.5% 16.4% 6.4% 1.8% 5.1% 14.5% 17.3% 5.9% 6.8% 12.8%Net debt adj. / EBITDA adj. 2.5 2.6 2.4 1.7 2.9 1.9 2.2 1.4 1.7 2.0 2.6 2.7Total debt adj. / EBITDA adj. 2.8 3.7 3.3 2.6 3.7 2.7 3.3 2.8 2.6 2.7 3.7 4.4FFO adj. / net interest adj. 7.9 7.5 6.4 8.8 11.6 3.1 1.7 3.3 4.2 2.3 2.9 4.1FFO adj. / gross interest adj. 7.3 7.5 7.3 8.8 2.3 1.8 2.3 3.9 3.5 1.7 2.3 4.0Total debt adj. / total capital. adj. 70.3% 69.3% 62.8% 56.3% 33.6% 40.8% 44.9% 37.7% 33.9% 42.4% 45.7% 50.1%Net debt adj. / net capital. adj. 67.6% 61.8% 55.5% 45.4% 27.9% 32.9% 35.1% 23.1% 25.8% 34.8% 37.1% 38.4%Equity / total assets 22.1% 22.3% 28.8% 33.3% 48.0% 42.2% 43.7% 47.3% 49.0% 41.3% 41.0% 36.3%


<date>



Arkema Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB/-- STABLE/STABLE/-- Stable Underweight iBoxx/--/-- EUR 5.2bn

Company Description: Headquartered in Colombes, France, Arkema (www.arkema.com) was created on October 1 2004 through the reorganization of Total S.A.'s chemical activities. Following the disposal of the Vinyl Products business in late 2011, Arkema's business activities are now grouped into three business segments Coating Solutions (34% of sales; further divided into the business units Acrylics, Coating Resins, Coatex and UV Curing), Industrial Specialties (33%; business units include PMMA, Thiochemicals, Fluorogases and Hydrogen peroxide) and High Performance Materials (33%; business units include Specialty Polyamides, Fluoropolymers, Filtration and Adsorption, and Organic Peroxides). According to the group, Arkema is among the market leaders in 90% of the group's sales, with No. 1 positions in Thiochemicals, Specialty polyamides, PVDF and Fluorogases. Arkema is present in 40 countries and has 85 production sites in Europe, North America and Asia. In FY12, Arkema generated 40% of its sales in Europe, 34% in North America, 26% in Asia & RoW and employed 13,800 staff. The group's shares are listed on the Paris Stock Exchange and are predominantly free float.

Moody's (03/13): Moody's does not consider positive rating pressure at this stage (reflecting the group's growth strategy). On a negative note, a downgrade might come as a result of sustained negative FCF generation beyond the ongoing investment projects or large acquisitions leading to a weaker leverage profile, with RCF/net debt trending towards the low 20s in percentage terms (LTM 2Q13: 20%). S&P (06/13): S&P considers FFO/debt of 35% (LTM 2Q13: 39.5%) as commensurate with the current ratings. Upward rating pressure is possible, which would depend on the agency's view of the resilience of Arkema's EBITDA and level of free operating cash flow, notably under trying industry conditions. Rating downside is unlikely, given the prevailing strong credit metrics and Arkema's prudent financial policies. Negative pressure may stem from very harsh, long-lasting industry conditions, resulting in FFO to debt falling below 30% without near-term recovery prospects.

SALES BY SEGMENT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Coating Solutions Industrial Specialties High PerformanceMaterials

in E

UR

mn

2011 2012 LTM9M13

EBITDA BY SEGMENT

0

100

200

300

400

500

600

700

800

900

1,000

Coating Solutions Industrial Specialties High PerformanceMaterials

in E

UR

mn

2011 2012 LTM9M13

Strengths/Opportunities – Leading market positions and good diversification – Improving footprint in Asia and RoW through the launch of new production

facilities (target: 30% of sales by FY16 vs. 22% currently) – Strongly improved business risk profile through restructured business

portfolio (especially the disposal of Vinyl Products) and reduced cost base – Conservative balance sheet profile with gearing target of <40% and

commitment to a BBB rating – Solid liquidity profile with ample headroom under RCF and limited near-

term liabilities

Weaknesses/Threats – Exposed to cyclical end-markets (i.e. 13% of sales to industrial coatings;

12% to decorative paints, 7% to transportation and 6% to construction) – Exposed to volatile raw material prices – Remaining risks to the Kem One disposal given legal dispute with buyer

Klesch group and insolvency of Kem One – Increase in organic growth investments combined with small-to-medium-

sized M&A to achieve sales of EUR 8bn by FY16 (vs. EUR 6.5bn currently) – Potential for an acceleration of shareholder remuneration

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010955559 AKEFP 4% 25/10/17 Baa2/BBB/-- 500mn CoC

Covenants: According to S&P, Arkema's EUR 700mn RCF line includes one financial covenant. S&P indicated that the coverage ratio for the RCF will be 1x at FYE 2013, below the 3x covenant level (tested semiannually).


<date>




EUR mn 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 5,664 5,675 5,633 4,444 4,869 5,900 4,948 6,395 4,687EBIT margin adj. 4.0% 5.4% 4.6% 1.2% 12.4% 13.4% 12.5% 11.1% 11.3%EBITDA rep. 356 467 445 201 800 989 800 969 563EBITDA margin adj. 8.4% 9.3% 9.0% 7.3% 17.5% 18.0% 17.0% 16.1% 16.3%Net income 47 124 101 -171 428 572 376 421 149Funds from operations (FFO) 52 272 275 68 589 628 452 541 370Operating cash flow 68 319 331 452 511 543 309 499 292Free cash flow rep. (after capex) -268 -6 1 105 196 119 -63 12 -14Dividend payment -1 0 -46 -37 -37 -61 -82 -82 -113Retained cash flow (RCF) 51 272 229 31 552 567 370 459 257Acquisitions / disposals -1 -101 8 38 32 -498 -237 -226 -4Share buybacks / issues 532 5 -8 -1 16 0 22 34 9Total debt rep. 495 517 562 430 621 855 1,223 1,260 1,483Net debt rep. 324 459 495 341 94 603 1,002 900 1,033Adj. for pensions 296 261 341 331 344 348 328 425 412Adj. for operating leases and others 82 108 109 122 123 72 72 72 72Net debt adj. 702 828 945 794 561 1,023 1,402 1,397 1,517

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

120%

2006 2007 2008 2009 2010 2011 9M12 2012 9M130.0

0.5

1.0

1.5

2.0

2.5

3.0



0

200

400

600

800

1,000

1,200

1,400

Liquidity asof 9M13

ST-Debt asof 9M13

2014 2015 2016 >2016

EU

R in

mn


CREDIT METRICS

2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 12.4 11.8 5.9 1.3 16.2 16.0 11.0 10.7 9.1EBIT gross interest cover adj. 12.4 12.8 7.3 2.2 16.2 16.0 11.0 10.7 9.1EBITDA net interest cover adj. 26.1 20.5 11.6 8.0 22.8 21.5 15.8 15.5 13.8EBITDA gross interest cover adj. 26.1 22.2 14.2 13.9 22.8 21.5 15.8 15.5 13.8FFO adj. / net debt adj. 8.8% 34.1% 30.1% 10.0% 108.6% 62.7% 31.6% 39.8% 31.3%FFO adj. / total debt adj. 7.1% 31.9% 28.1% 9.0% 56.0% 50.3% 27.3% 31.6% 24.2%RCF adj. / net debt adj. 8.7% 34.1% 25.2% 5.4% 102.0% 56.7% 25.8% 33.9% 23.9%RCF adj. / total debt adj. 7.0% 31.9% 23.5% 4.8% 52.6% 45.5% 22.3% 27.0% 18.4%Net debt adj. / EBITDA adj. 1.5 1.6 1.9 2.5 0.7 1.0 1.4 1.4 1.6Total debt adj. / EBITDA adj. 1.8 1.7 2.0 2.7 1.3 1.2 1.6 1.7 2.1FFO adj. / net interest adj. 3.4 10.9 6.5 2.0 16.3 13.0 7.0 8.4 6.9FFO adj. / gross interest adj. 3.4 11.9 7.9 3.4 16.3 13.0 7.0 8.4 6.9Total debt adj. / total capital. adj. 30.4% 30.6% 32.6% 32.7% 32.6% 36.5% 41.3% 43.2% 46.0%Net debt adj. / net capital. adj. 26.0% 29.1% 31.2% 30.4% 20.0% 31.5% 37.8% 37.7% 39.6%Equity / total assets 42.4% 43.6% 45.1% 46.0% 46.5% 41.6% 42.0% 41.7% 41.3%


<date>



BASF Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA1/A+/A+ STABLE/STABLE/STABLE Stable Marketweight iBoxx/--/iTraxx S18 EUR 71.2bn

Company Description: BASF SE (www.basf.com), headquartered in Ludwigshafen, Germany, is the world's largest chemical producer measured by sales. It enjoys a high degree of downstream integration with activities ranging from oil and gas to specialty chemicals. Since 2008, BASF has been active in portfolio management, as reflected in the acquisition of Switzerland-based CIBA (EV CHF 3.8bn) as well as Germany-based Cognis (EV EUR 3.1bn), while at the same time divesting its fertilizer assets (proceeds of EUR 700mn) and entering into a JV with Ineos (50% owned) in its Styrenics activities. In FY12, BASF generated 20% of its sales in Germany, 34% in the rest of Europe, 18% in North America, 19% in Asia Pacific and 8% in South America, Africa and Middle East. BASF, which employs 113,262 people, is listed on the Frankfurt Stock Exchange and does not have a majority shareholder.

Moody's (10/13): The rating could be lowered if RCF/net debt fell sustainably towards the low to mid-30s level (LTM 2Q13: 31%) and if there was weaker FCF/debt. An upgrade might be considered if there was a continuing improvement in operating profitability and cash-flow generation coupled with management commitment to highly conservative financial policies and debt reduction leading to RCF/net debt sustainably above 45%. S&P (03/13): S&P does not currently anticipate changes to the rating. Negative rating pressure might occur if FFO/debt fell sustainably below 45%-50% (LTM 2Q13: 46%). An upgrade is unlikely given the cyclicality of the industry as well as the limited visibility on the group's M&A activities. Fitch (06/13): A downgrade might occur should there be a sustained increase in net FFO leverage to 2.0x. Fitch considers A+ as a ceiling for the Chemical sector and therefore does not consider upgrade potential for BASF.

SALES BY SEGMENT

02,0004,0006,0008,000

10,00012,00014,00016,00018,00020,000

Oil

& G

as

Che

mic

als

Func

tiona

lM

ater

ials

&S

olut

ions

Per

form

ance

Pro

duct

s

Agr

icul

tura

lS

olut

ions

Oth

ers

EU

R m

n

9M12 9M13 FY12 LTM 9M13

EBIT BEFORE SPECIAL ITEMS BY SEGMENT

-1,000

-500

0

500

1,000

1,500

2,000

2,500

Oil

& G

as

Che

mic

als

Func

tiona

lM

ater

ials

&S

olut

ions

Per

form

ance

Pro

duct

s

Agr

icul

tura

lS

olut

ions

Oth

ers

EU

R m

n9M12 9M13 FY12 LTM 9M13

Strengths/Opportunities – Strong market positions in its core businesses and diversity – "Verbund"- manufacturing sites ensure cost competitiveness – Oil & Gas activities create a natural hedge – Strong free operating cash-flow generation – Strong market position in growth regions of Asia

Weaknesses/Threats – Significant earnings and cash flow volatility – Raw material volatility, in particular in base chemicals operations – Significant capex requirements for development of its Oil & Gas activities – Reliance on short-term financing, mitigated by continuing access to US CP

markets – Shareholder-friendly policy and M&A risk

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0412154378 BASGR 5.125% 09/06/15 A1/A+/A+ 2,000mn CoC DE000A0JRFB0 BASGR 4.5% 29/06/16 A1/A+/A+ 500mn -- XS0836260975 BASGR 1.5% 01/10/18 A1/A+/A+ 750mn CoC XS0883560715 BASGR 1.875% 04/02/21 A1/A+/A+ 700mn CoC DE000A1R0XG3 BASGR 2% 05/12/22 A1/A+/-- 1,000mn CoC

Covenants: The two committed back-up lines in the total amount of EUR 4.7bn (maturing in 2014 and 2016) are, according to S&P, not subject to financial covenants.


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EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 33,361 37,537 42,745 52,610 57,951 62,304 50,693 63,873 73,497 54,148 78,729 55,824EBIT margin adj. 9.9% 14.8% 14.7% 14.1% 13.2% 10.8% 10.0% 13.2% 11.9% 10.1% 11.9% 10.4%EBITDA rep. 5,340 8,311 8,257 9,744 10,263 9,643 7,417 11,131 11,993 7,671 12,516 7,639EBITDA margin adj. 17.9% 23.1% 20.4% 19.8% 18.3% 15.9% 17.4% 18.5% 16.6% 14.3% 16.4% 14.4%Net income 977 2,133 3,168 3,466 4,325 3,305 1,655 5,074 6,603 4,016 5,222 3,937Funds from operations (FFO) 3,759 4,827 4,999 5,930 6,806 6,362 4,703 8,140 8,011 5,664 7,688 5,608Operating cash flow 4,878 4,634 5,250 5,940 5,807 5,023 6,270 6,460 7,105 5,025 6,733 5,982Free cash flow rep. (after Capex) 2,806 2,577 3,302 3,529 3,245 2,502 3,763 3,912 3,695 2,323 2,584 2,944Dividend payment -857 -852 -982 -1,233 -1,624 -2,157 -2,089 -1,931 -2,478 -2,510 -2,641 -2,604Retained cash flow (RCF) 2,902 3,975 4,017 4,697 5,182 4,205 2,614 6,209 5,533 3,154 5,047 3,004Acquisitions / disposals -997 824 1,237 -6,003 -536 -843 -1,447 -562 517 411 -319 -1,093Share buy back / issues -500 -781 -1,425 -920 -1,749 -1,573 0 -18 32 -5 -1 0Total debt rep. 3,507 3,297 3,941 9,483 10,102 14,514 14,819 15,039 13,004 12,163 12,798 14,656Net debt rep. 2,879 1,007 2,850 8,593 9,284 11,703 12,969 13,530 10,937 10,598 11,137 12,978Adj. for pensions 3,862 4,124 1,547 1,452 1,292 1,712 2,268 2,778 3,189 5,259 5,421 4,371Adj. for operating leases and others 672 599 615 956 929 1,037 1,036 1,335 1,412 1,412 1,292 1,292Net debt adj. 7,414 5,730 5,012 11,001 11,505 14,452 16,273 17,643 15,538 17,269 17,850 18,641

DEBT LEVERAGE

0%

25%

50%

75%

100%

125%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.5

1.0

1.5

2.0


BOND MATURITY PROFILE AS OF 30 SEPTEMBER 2013

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Liqu

idity

as

of 9

M13

ST-

Deb

t as

of 9

M13 20

13

2014

2015

2016

> 20

16

EU

R m

n

Bonds Cash ST-Debt Back up facilities

CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 11.3 20.8 27.2 15.9 13.5 12.7 7.2 11.2 12.4 10.9 13.2 14.7EBIT gross interest cover adj. 7.6 15.9 15.2 15.9 13.5 9.6 6.1 9.3 9.8 8.3 10.5 11.9EBITDA net interest cover adj. 20.6 32.5 37.7 22.3 18.7 18.7 12.6 15.6 17.2 16.0 18.2 20.0EBITDA gross interest cover adj. 13.8 24.8 21.1 22.3 18.7 14.1 10.5 13.0 13.6 12.2 14.5 16.3FFO adj. / net debt adj. 52.3% 86.2% 102.0% 56.0% 60.9% 45.2% 30.6% 48.3% 54.6% 45.5% 46.0% 43.9%FFO adj. / total debt adj. 48.2% 61.6% 83.7% 51.8% 56.8% 37.9% 27.5% 44.5% 48.2% 41.7% 42.1% 40.3%RCF adj. / net debt adj. 40.7% 71.3% 82.4% 44.8% 46.8% 30.3% 17.7% 37.4% 38.7% 30.4% 31.2% 29.2%RCF adj. / total debt adj. 37.5% 50.9% 67.6% 41.5% 43.7% 25.4% 15.9% 34.4% 34.1% 27.9% 28.5% 26.8%Net debt adj. / EBITDA adj. 1.2 0.7 0.6 1.1 1.1 1.5 1.8 1.5 1.3 1.7 1.4 1.4Total debt adj. / EBITDA adj. 1.3 0.9 0.7 1.1 1.2 1.7 2.1 1.6 1.4 1.8 1.5 1.5FFO adj. / net interest adj. 13.3 18.6 22.1 13.2 12.4 12.3 7.1 11.3 12.0 12.2 11.6 12.4FFO adj. / gross interest adj. 9.0 14.2 12.4 13.2 12.4 9.3 5.9 9.4 9.5 9.3 9.3 10.1Total debt adj. / total capital. adj. 33.4% 32.1% 25.4% 38.3% 37.0% 47.4% 48.6% 45.6% 40.9% 41.4% 43.2% 43.5%Net debt adj. / net capital. adj. 31.6% 25.3% 21.8% 36.5% 35.4% 43.0% 46.0% 43.6% 37.9% 39.3% 41.0% 41.4%Equity / total assets 47.3% 46.8% 49.1% 41.0% 42.9% 36.8% 36.3% 38.1% 41.5% 40.5% 40.8% 41.3%


<date>



Brenntag Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BBB-/-- POS/STABLE/-- Improving Hold --/iBoxx HY/-- EUR 6.7bn

Company Description: Brenntag (www.brenntag.com), based in Mühlheim an der Ruhr, Germany and founded in 1874, entered its core business of chemical distribution in 1912. Brenntag is the market leader in full-line B2B chemical distribution and is involved in the entire value chain starting with purchasing and storing large-scale quantities from chemical producers over product mixing, repackaging, technical support and lastly just-in-time delivery. Part of the good positioned and well-diversified product portfolio includes all kinds of acids and alkaline solutions, solvents, solids and salts, cleaning and degreasing agents and chemicals for treatment of water and sewage. The group's global network with currently 13,049 employees covers more than 450 locations in over 70 countries. Europe accounted for 47%, North America for 32%, Latin America for about 10%, Asia Pacific for about 7% and Rest of the World for 4% of FY12 group revenues. The group is listed on the Frankfurt Stock Exchange and a member of the German MDAX index. The shares are in free float.

Moody's (06/13): Positive rating action might occur if gross adjusted leverage moved sustainably below 3.0x (LTM 2Q13: 3.4x), while RCF/debt improved sustainably above 20% (LTM 2Q13: 16%). Moreover, to achieve a rating upgrade, management would need to demonstrate a strong public commitment to investment-grade status. A downgrade, which is currently unlikely given the positive outlook, could occur if gross adjusted leverage increased to above 4.0x and RCF/debt was to fall below 15%. Any deviation from the announced acquisition policy - particularly with regard to the avoidance of transformative debt-funded acquisitions - could also exert downward pressure on the rating. S&P (02/13): S&P expects FFO/debt of 25% (LTM 2Q13: 27%) as commensurate for the current rating. Upward rating pressure is possible over the medium term depending on continued prudent financial policies and robust operating performance and free cash-flow generation. Negative rating pressure could arise in case of a change in the financial policy and or larger M&A activity.

SALES BY SEGMENT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Europe North America Latin America Asia Pacific RoW

in E

UR

mn

2009 2010 2011 2012 LTM9M13

EBITDA BY SEGMENT

-50

0

50

100

150

200

250

300

350

400

Europe North America Latin America Asia Pacific RoW

in E

UR

mn

2009 2010 2011 2012 LTM9M13

Strengths/Opportunities – World's largest chemical distributor with leading positions in Europe, North

America and Latin America – Stable, industry-leading margin levels – Low capital intensity supports free cash-flow generation – Strong diversification in terms of geography, customers and products – Growth potential in the industry stemming from outsourcing trend from

chemical producers

Weaknesses/Threats – Acquisition-driven growth strategy, with focus on mostly small-bolt on

acquisitions (however, recent increase in transaction size). Historically, the group funded its acquisitions via annual free cash-flow generation.

– Limited, but increasing presence in the growing Asian market – Significant amount of goodwill on the balance sheet – Still leveraged capital structure – Increasing shareholder remuneration

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0645941419 BNRGR 5.5% 19/07/2018 Ba1/BBB- 400mn CoC @ 100

Covenants: According to S&P, Brenntag has two covenants in its current loan documentation (Interest coverage of 3.5x; net leverage of 3.25x in 2013).


<date>




EUR mn 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 6,671 7,380 6,365 7,649 8,679 7,350 9,690 7,454EBIT margin adj. 3.2% 4.0% 4.5% 5.6% 6.5% 6.0% 6.1% 5.7%EBITDA rep. 408 481 477 598 659 524 707 517EBITDA margin adj. 6.3% 6.7% 7.8% 8.1% 7.8% 7.3% 7.5% 7.1%Net income -63 -42 0 147 279 240 338 220Funds from operations (FFO) 156 245 245 267 409 340 476 319Operating cash flow 117 177 490 150 350 222 433 198Free cash flow rep. (after Capex) 25 97 422 69 263 169 347 135Dividend payment -5 -6 -5 -6 -78 -104 -105 -125Retained cash flow (RCF) 152 239 240 262 331 236 372 194Acquisitions / disposals -92 -93 -7 -142 -142 -121 -227 -30Share buy back / issues 0 0 40 511 0 0 0 0Total debt rep. 3,200 3,254 3,139 1,784 1,952 1,840 1,830 1,790Net debt rep. 2,856 2,955 2,536 1,421 1,494 1,537 1,483 1,471Adj. for pensions 40 42 50 63 80 82 105 116Adj. for operating leases and others -468 -559 -642 92 108 116 143 147Net debt adj. 2,428 2,439 1,944 1,576 1,682 1,734 1,731 1,734

DEBT LEVERAGE

0%

10%

20%

30%

40%

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

1.5

3.0

4.5



0

200

400

600

800

1,000

1,200

Liquidityas of9M13

ST-Debtas of9M13

2013 2014 2015 2016 >2016

in E

UR

mn

Cash Financial debt Undrawn, committed lines

CREDIT METRICS

2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 1.0 1.4 1.8 2.4 4.7 6.1 6.3 6.8EBIT gross interest cover adj. 0.9 1.3 1.7 2.3 4.3 5.6 5.7 6.1EBITDA net interest cover adj. 1.9 2.3 3.1 3.4 5.7 7.5 7.7 8.4EBITDA gross interest cover adj. 1.7 2.1 3.0 3.3 5.2 6.8 7.0 7.6FFO adj. / net debt adj. 7.4% 11.1% 13.7% 18.9% 26.1% 27.8% 29.8% 29.0%FFO adj. / total debt adj. 6.4% 9.9% 10.4% 15.4% 20.5% 23.7% 24.8% 24.5%RCF adj. / net debt adj. 7.2% 10.8% 13.4% 18.5% 21.4% 21.8% 23.7% 21.7%RCF adj. / total debt adj. 6.3% 9.6% 10.3% 15.1% 16.8% 18.6% 19.8% 18.4%Net debt adj. / EBITDA adj. 5.8 4.9 3.9 2.5 2.5 2.4 2.4 2.4Total debt adj. / EBITDA adj. 6.6 5.5 5.2 3.1 3.2 2.9 2.9 2.8FFO adj. / net interest adj. 0.8 1.2 1.7 1.7 3.7 5.1 5.5 5.9FFO adj. / gross interest adj. 0.7 1.2 1.6 1.6 3.4 4.6 4.9 5.3Total debt adj. / total capital. adj. 92.9% 95.1% 93.5% 54.6% 55.1% 51.7% 51.5% 50.7%Net debt adj. / net capital. adj. 92.0% 94.6% 91.7% 49.4% 49.1% 47.7% 47.0% 46.5%Equity / total assets 4.1% 2.7% 3.7% 32.6% 31.6% 33.4% 34.9% 35.0%


<date>



Clariant Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BBB-/-- STABLE/STABLE/-- Improving Overweight --/iBoxx HY/iTraxx S18 CHF 5.2bn

Company Description: Clariant (www.clariant.com), based in Muttenz, Switzerland, is a global manufacturer of specialty chemicals. Clariant was established in 1995 through a spin-off from Sandoz. The company expanded through the acquisition of the Hoechst Specialty Chemicals business (1997), UK-based BTP (2000), Ciba Masterbatches (2006) and Rite Systems and Ricon Colors (2008). In 2011, Clariant took over Süd-Chemie, a manufacturer of catalysts and adsorbents, for CHF 2.5bn valuing the business at 9.2x on a EV/EBITDA basis. During 2012/13, Clariant focused on the integration of Süd-Chemie and on the divestment of its identified non-core assets. At end-October 2013, Clariant found buyers for its non-core assets. Clariant generated 46% of its FY12 sales in EMEA (around 9% of that in Middle East Africa), 26% in the rest of Europe, 16% in North America, 15% in Latin America and 23% in Asia Pacific (including China [7%] and India [2%]). It employs about 22,150 people. Shareholdings are widely spread.

Moody's (02/13): Taking into account the ongoing slowdown in the operating environment, the upgrade of the ratings would likely require a further reduction in debt. (RCF-CAPEX)/debt in the mid-to-high single digits, gross leverage sustained below 3.0x (LTM 2Q13: 4.5x) and consistent FCF generation would be required to support an upgrade of the Ba1 ratings. A deterioration in the operating performance, leading to a weaker financial profile – gross leverage sustained above 4x and RCF/debt at below 20% – would put negative pressure on the ratings. The rating on the notes may be notched down if the structural subordination of the notes relative to debt at operating subsidiaries were to increase on a sustainable basis. S&P (04/13): S&P expects FFO/debt to reach 25-28% in 2013 (LTM 2Q13: 21%) and to sustainably exceed 30%, which is seen as commensurate with the current rating by 2014 on expected higher profitability and improved free cash flow generation as the impact of restructuring eases. A negative rating action could occur in the event of a pronounced deterioration of the operating environment, cash restructuring outlays higher than currently anticipated, which result in significant negative free cash flow, or a large, debt-financed acquisition (not anticipated) resulting in adjusted FFO to debt dropping to below 25% without short-term prospects of a recovery. A positive rating action is unlikely in the coming years.

SALES BY SEGMENT (9M13)

Plastics & Coatings

43%

Care Chemicals26%

Natural Resources

21%

Catalysis & Energy

10%

EBITDA BY SEGMENT

0

50

100

150

200

250

300

350

Plastics &Coatings

Care Chemicals NaturalResources

Catalysis &Energy

in E

UR

mn

9M12 9M13

Strengths/Opportunities – Leading market position in many businesses and diversified customer

base – Good regional, product, and end-market diversification – Relentless cost savings and further efficiency improvement measures

expected to benefit operating results – Limited acquisition appetite (bolt-on M&A) and conservative financial policy

Weaknesses/Threats – Exposure to cyclicality (expected to decline following non-core disposals)

and volatile input cost – Sub-par cash flow generation burdened by restructuring cash-outs; the

group aims to return to positive free cash flow generation in FY14 – Potential to increase shareholder remuneration

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0735784851 CLNVX 5.625% 24/01/2017 Ba1/BBB-/-- 500mn CoC

Covenants: None.


<date>




CHF mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 9,330 8,516 8,530 8,181 8,222 8,533 8,071 6,614 7,120 5,571 4,529 6,038 4,513EBIT margin adj. -1.6% 7.9% 7.7% 7.1% 6.7% 4.6% 3.5% 4.4% 9.0% 11.2% 8.3% 8.6% 9.1%EBITDA rep. 1,193 1,119 889 725 793 591 645 337 625 597 471 627 550EBITDA margin adj. 13.3% 14.4% 12.3% 11.8% 11.5% 8.7% 9.1% 10.2% 12.9% 15.0% 12.8% 13.2% 13.8%Net income -639 173 157 192 143 5 -37 -194 191 220 118 211 238Funds from operations (FFO) 815 402 662 353 577 483 480 294 549 328 429 510 435Operating cash flow 751 327 806 275 328 540 391 757 642 206 125 392 32Free cash flow rep. (after Capex) 412 26 509 -78 -22 220 100 587 400 -181 -89 40 -197Dividend payment -46 0 -30 -5 -100 -105 -62 -11 -11 -17 -15 -15 -122Retained cash flow (RCF) 769 402 632 348 477 378 418 283 538 311 414 495 313Acquisitions / disposals 252 368 371 39 -200 43 -25 50 16 -1,117 8 5 102Share buybacks / issues -107 0 877 -58 0 0 -6 19 -79 288 -137 -140 13Total debt rep. 4,194 3,834 2,654 1,736 1,999 1,995 1,565 1,685 1,545 2,974 3,497 3,476 2,490Net debt rep. 3,476 2,905 1,177 1,513 1,556 1,486 1,209 545 126 1,740 1,934 1,809 1,694Adj. for pensions 457 498 479 507 495 515 473 484 443 538 542 498 688Adj. for operating leases and others 482 327 282 311 311 251 135 116 107 117 117 102 119Net debt adj. 4,415 3,730 1,938 2,331 2,362 2,252 1,818 1,145 676 2,395 2,593 2,409 2,501

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

FFO adj. / net debt adj. (LS) Net debt adj. / EBITDA adj. (RS)


0

200

400

600

800

1,000

1,200

1,400

1,600

Liquidityas of9M13

2013 2014 2015 2016 > 2016

in C

HF

mn

Bonds Cash Bank debt

CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. -0.5 4.1 4.1 3.7 4.1 4.1 1.8 2.6 4.8 4.1 2.6 3.2 4.4EBIT gross interest cover adj. -0.7 3.5 3.5 3.7 3.8 3.1 1.7 2.4 4.3 3.7 2.3 2.8 4.0EBITDA net interest cover adj. 4.6 7.5 6.5 6.2 7.0 7.8 4.8 6.0 6.9 5.5 4.0 5.0 6.7EBITDA gross interest cover adj. 5.7 6.5 5.6 6.2 6.5 5.9 4.4 5.5 6.2 4.9 3.5 4.4 6.1FFO adj. / net debt adj. 19.8% 12.4% 36.8% 17.3% 26.6% 23.3% 28.6% 28.8% 86.4% 15.2% 16.9% 22.8% 22.3%FFO adj. / total debt adj. 17.0% 9.9% 20.9% 15.8% 22.4% 19.0% 23.9% 14.4% 27.9% 10.0% 10.5% 13.5% 16.9%RCF adj. / net debt adj. 18.7% 12.4% 35.3% 17.1% 22.4% 18.6% 25.2% 27.8% 84.8% 14.5% 16.3% 22.2% 17.4%RCF adj. / total debt adj. 16.1% 9.9% 20.0% 15.6% 18.9% 15.2% 21.0% 13.9% 27.4% 9.6% 10.2% 13.1% 13.2%Net debt adj. / EBITDA adj. 3.5 3.0 1.9 2.4 2.5 3.0 2.5 1.7 0.7 2.9 3.8 3.0 3.0Total debt adj. / EBITDA adj. 4.1 3.8 3.3 2.6 3.0 3.7 3.0 3.4 2.3 4.4 6.1 5.1 3.9FFO adj. / net interest adj. 3.2 2.8 4.4 2.6 4.7 5.5 3.4 2.9 4.4 2.4 2.6 3.4 4.5FFO adj. / gross interest adj. 4.0 2.4 3.8 2.6 4.3 4.1 3.1 2.7 3.9 2.1 2.2 3.0 4.0Total debt adj. / total capital. adj. 82.0% 76.3% 60.7% 50.5% 50.5% 52.2% 52.2% 54.5% 54.1% 55.1% 58.4% 58.3% 54.6%Net debt adj. / net capital. adj. 79.7% 72.0% 46.7% 48.2% 46.2% 47.1% 47.7% 37.5% 27.5% 44.7% 46.7% 45.2% 47.7%Equity / total assets 11.4% 15.5% 29.3% 35.4% 33.8% 32.6% 33.4% 31.1% 30.5% 33.2% 31.7% 31.9% 33.7%


<date>



DSM Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA3/A/A- POS/STABLE/STABLE Stable Marketweight iBoxx/--/iTraxx S18 EUR 10.8bn

Company Description: DSM is one of the world's leading life science (i.e. the world's largest producer of vitamins) and specialty chemicals groups. DSM's core business activities are organized along the four business clusters Nutrition, Pharma, Performance Materials and Polymer Intermediates. Since 2010, when DSM completed the exit from its volatile commodity business, the group has strongly invested in its portfolio and spent around EUR 2.8bn on acquisitions (among others, notable acquisitions were Martek, Fortitech and Kensey Nash) with most of them in its Nutrition cluster, increasing the resiliency of the business. Going forward, DSM might reduce its exposure to caprolactam by looking for a partner for the merchant (sold externally) caprolactam business, while it has already found an agreement to partially divest the majority of its pharma business to a JV. DSM supplies diversified end-markets, with Health and Nutrition (41%), Construction (8%), Automotive (8%), Textiles (8%) and Packaging (8%) among the largest end-markets. By 2015, DSM aims to achieve an EBITDA margin of 14-15%, grow sales by 5-7% p.a. organically and generate 45% of sales in emerging markets. In FY12, the company generated 7% of its sales in the Netherlands, 35% in Rest of Europe, 20% in North America, 7% in Latin America, 14% in China, 14% in Rest of Asia and the remaining 3% in the rest of the world. The main shareholding of DSM is widely spread.

Moody's (11/13): DSM might be upgraded if there were a sustainable improvement in the quality of DSM's earnings and cash flow profile, combined with stronger cash flow metrics, with RCF/net debt in the high 30s to low 40s (LTM 9M13: 25%) in percentage terms and free cash flow/net debt at high single-digits (LTM 9M13: -10%). Negative rating pressure is currently unlikely. S&P (04/13): A downgrade might be considered if FFO/debt remained below 45% (LTM 1H13: 32%). This could happen if, in 2013, DSM undertook significant net-debt-financed acquisitions, or if EBITDA fell unexpectedly in its polymer intermediates or performance materials segments. An upgrade is currently unlikely. Fitch (07/13): An upgrade might follow a further diversification away from cyclical subsectors, along with FFO net adjusted leverage sustained at 1.0x. A negative rating action could follow large debt-financed acquisitions (considered unlikely currently) or shareholder-friendly actions (dividends, share buybacks) resulting in a sustained increase in net FFO leverage at or above 2.0x.

SALES BY SEGMENT (LTM 9M13)

Performance Materials

31%

Polymer Intermediates

18%

Nutrition43%

Pharma8%

EBITDA BY SEGMENT

0100200300400500600700800900

Nut

ritio

n

Per

form

ance

Mat

eria

ls

Poly

mer

Inte

rmed

iate

s

Pha

rma

EU

R m

n

2008 2009 2010 2011 2012 LTM9M13

Strengths/Opportunities – Significant size and diversity with leading market positions in many

specialty chemical products – Stable and resilient nutrition business largely offsets cyclical specialty

chemicals operations – Continuing optimization measures to improve profitability – Solid cash conversion (FFO/EBITDA above 80% during 2010-2012 period)

and resilient free cash-flow generation – Strong liquidity and prudent financial policy (commitment to A rating

category; targets gearing below 30% (9M13: 25%), FFO/net debt of 30%, and EBITDA/interest cover of 8.5x)

Weaknesses/Threats – Exposure to volatile raw material costs (i.e. benzene) – European asset base leads to currency mismatch – Exposure to cyclical construction and automotive businesses in material

science business – Margin pressure in Pharma; we note that DSM will merge large parts of its

pharma business in a JV with Patheon (transaction announced in 11/13) – Risk of larger-than-expected acquisitions (not envisioned in 2014) and or

accelerating shareholder remuneration

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0235117891 DSM 4% 10/11/15 A3/A/A- 500mn CoC XS0326230181 DSM 5.25% 17/10/17 A3/A/A- 750mn CoC

Covenants: We do not think that the EUR 500mn RCF (matures in 09/16; can be extended twice) includes any financial maintenance covenants.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 6,181 7,960 8,775 8,762 8,380 9,297 7,866 9,050 9,193 6,862 9,131 7,241EBIT margin adj. 5.1% 4.7% 9.0% 9.5% 10.0% 10.2% 3.3% 9.5% 10.0% 7.8% 7.3% 8.6%EBITDA rep. 549 945 1,339 1,259 1,221 1,357 1,191 1,226 1,430 774 941 924EBITDA margin adj. 13.4% 12.2% 15.5% 14.6% 15.1% 15.1% 11.7% 14.4% 14.7% 12.9% 12.5% 14.1%Net income 125 262 520 552 434 602 336 525 860 277 298 348Funds from operations (FFO) 480 689 894 826 949 1,090 708 1,030 1,114 678 747 794Operating cash flow 591 898 693 630 825 910 1,276 1,103 882 547 730 463Free cash flow rep. (after Capex) 158 549 300 172 391 319 819 687 405 73 44 -44Dividend payment -187 -194 -183 -213 -193 -220 -205 -206 -155 -164 -210 -159Retained cash flow (RCF) 293 495 711 613 756 870 503 824 959 514 537 635Acquisitions / disposals -1,457 28 220 141 -34 -93 271 309 -408 -666 -1,219 -416Share buybacks / issues -109 -108 -68 -263 -758 0 18 95 -246 34 90 127Total debt rep. 1,887 2,024 1,710 1,514 1,752 2,293 2,204 2,097 2,189 2,178 2,564 2,660Net debt rep. 671 763 808 962 1,383 1,606 857 -193 42 858 1,431 1,903Adj. for pensions 264 212 134 106 96 267 156 179 302 293 401 397Adj. for operating leases and others 391 69 322 93 27 49 57 59 62 62 56 56Net debt adj. 1,326 1,043 1,264 1,161 1,505 1,921 1,071 46 406 1,213 1,889 2,356

DEBT LEVERAGE

0%

50%

100%

150%

200%

250%

300%

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.5

1.0

1.5

2.0

2.5


n.m.


0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Liquidityas of9M13

ST-debtas of9M13

2014 2015 2016 >2016


CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 4.0 5.8 9.6 9.9 10.8 8.9 2.4 8.0 8.8 2.8 6.7 5.0EBIT gross interest cover adj. 3.3 4.0 7.9 9.6 10.8 8.9 2.4 8.0 8.8 2.8 6.2 4.8EBITDA net interest cover adj. 10.6 15.1 16.5 15.3 16.3 13.2 8.4 12.1 12.9 4.7 11.4 8.5EBITDA gross interest cover adj. 8.7 10.5 13.6 14.8 16.3 13.2 8.4 12.1 12.9 4.7 10.6 8.1FFO adj. / net debt adj. 36.6% 66.5% 71.1% 71.7% 63.5% 56.8% 66.6% n.m. 277.3% 70.6% 40.1% 37.0%FFO adj. / total debt adj. 19.1% 30.1% 41.5% 48.6% 51.0% 41.8% 29.5% 44.4% 44.1% 33.8% 25.1% 28.0%RCF adj. / net debt adj. 22.5% 47.9% 56.6% 53.3% 50.7% 45.3% 47.5% n.m. 239.1% 57.0% 29.0% 28.3%RCF adj. / total debt adj. 11.7% 21.7% 33.0% 36.2% 40.7% 33.4% 21.0% 35.5% 38.0% 27.3% 18.1% 21.4%Net debt adj. / EBITDA adj. 1.6 1.1 0.9 0.9 1.2 1.4 1.2 0.0 0.3 1.0 1.7 1.8Total debt adj. / EBITDA adj. 3.1 2.4 1.6 1.3 1.5 1.9 2.6 1.8 1.9 2.1 2.6 2.4FFO adj. / net interest adj. 6.2 10.8 10.9 9.9 12.3 10.2 6.5 9.6 10.7 3.4 7.6 5.8FFO adj. / gross interest adj. 5.1 7.5 9.0 9.6 12.3 10.2 6.5 9.6 10.7 3.4 7.0 5.5Total debt adj. / total capital. adj. 33.1% 31.6% 27.1% 22.1% 25.2% 35.5% 31.8% 29.0% 29.8% 29.1% 33.2% 33.0%Net debt adj. / net capital. adj. 20.5% 17.3% 17.8% 16.1% 21.3% 28.8% 17.1% 0.8% 6.3% 16.4% 23.7% 27.2%Equity / total assets 52.8% 50.5% 55.1% 58.0% 54.8% 48.6% 52.1% 53.2% 53.5% 52.8% 50.5% 51.2%


<date>



Evonik Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB+/-- POS/STABLE/-- Stable Marketweight iBoxx/--/-- EUR 12.9bn

Company Description: Evonik Industries AG (www.evonik.de), based in Essen, Germany, is a leading industrials group with a focus on specialty chemicals (make up the majority of sales and cash flows). Over the last few years, the group strongly executed its strategy of becoming a company solely focused on specialty chemicals. This included the divestments of majority stakes in its Energy business in 2010 (with a put option to dispose of the business in 2016; buyer has a call option to acquire the remaining stake in the 2014-2017 period) and large parts of its Real Estate business in 2013 (Evonik retains a 10.9% stake in the business, which shall be sold in the medium term). Today, the group's specialty chemicals business is structured along three segments (Consumer Health & Nutrition; Resource Efficiency and Specialty Materials) and commands a number of leading positions in its businesses as well as good product and end-market diversification. Evonik is majority-owned by the RAG Foundation, with a minority stake being owned by Private Equity investor CVC. In 2013, the shareholders disposed of a 12% stake in Evonik to institutional investors (e.g. Temasek). Subsequently, the share were listed on the stock exchange. In FY12, Evonik generated 25% of its sales in Germany (22% in the Rest of Europe), 17% in North America, 6% in China and 31% in other countries. Evonik has around 33,500 employees, the majority of them in Germany.

Moody's (03/13): Strong execution of the agreed transactions and sustained operating performance with RCF/debt at or above the mid-twenties percentage level (LTM 2Q13: 16%) and debt/EBITDA below 2.5x (LTM 2Q13: 3.0x) will add to the positive pressure on Baa2 ratings. While the rating agency expects the company to generate negative FCF in the next 18-24 months, the positive stance is supported by the sizeable cash balance that will safeguard timely execution of capex plans and help sustain a strong liquidity position. Downward rating pressure is currently unlikely. S&P (06/13): S&P considers FFO/debt of 35-40% (LTM 2Q13: 32%) in mid-cycle chemical conditions as commensurate with a BBB+ rating. A negative rating action could occr in case of a large acquisition or a severe drop in operating performance leading to FFO/debt of sustainably below 30%. Ratings upside is possible during 2014 or 2015, but would depend on resilient performance during 2013, visible EBITDA contribution from expansion projects, a more stable economic environment in Europe and a longer financial track record of FFO/debt in the 40-45% range including increased free cash flow after dividends.

SALES BY SEGMENT*

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Consumer,Health & Nutrition

ResourceEfficiency

Service Real Estate

in E

UR

mn

FY10 FY11 FY12 LTM 9M13

* Real Estate segment no longer disclosed in 3Q13 given that Evonik has only a 10.9% stake left in the business

EBITDA BY SEGMENT*

0

200

400

600

800

1000

1200

Consumer,Health &Nutrition

SpecialtyMaterials

ResourceEfficiency

Service Real Estate

in E

UR

mn

FY10 FY11 FY12 LTM 9M13

* Real Estate segment no longer disclosed in 3Q13 given that Evonik has only a 10.9% stake left in the business

Strengths/Opportunities – Leading market position in 80% of its chemicals businesses – Strong geographic, product and end-market diversification – Strong profitability further supported by significant cost savings (i.e. On

Track 2.0 should yield savings of EUR 500mn over the 2012-2016 period) – Solid execution of its strategy to become a focused specialty chemicals

business – Strong balance sheet, but we expect that headroom will be used for the

group's growth ambitions (organically and externally)

Weaknesses/Threats – Inherent cyclicality of its chemicals business – Exposure to volatile input cost – Large organic growth program (capex of EUR 6bn over 2012-2016 period) – Still significant pension liabilities, although Evonik started funding via CTA – Track record of significant shareholder remuneration and potential for

larger M&A

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0911405784 EVKGR 1.875% 08/04/20 Baa2/BBB+/-- 500mn CoC

Covenants: It has not been disclosed whether the EUR 1.75bn RCF contains any financial covenants.


<date>




EUR mn 2008 2009 2010 2011 9M12 2012 9M13Sales 15,873 13,076 13,300 14,540 10,186 13,629 9,739EBIT margin adj. 6.7% 8.3% 13.5% 15.2% 16.7% 15.8% 13.6%EBITDA rep. 1,931 1,554 2,065 2,506 1,939 2,513 1,244EBITDA margin adj. 13.8% 13.9% 19.0% 19.8% 20.9% 20.4% 18.0%Net income 234 318 800 1,092 834 1,152 487Funds from operations (FFO) 852 1,157 2,061 1,209 1,304 1,209 1,131Operating cash flow 388 2,092 1,875 909 994 1,020 898Free cash flow rep. (after Capex) -777 1,283 1,106 24 400 -1 146Dividend payment -380 -341 -344 -414 -432 -436 -435Retained cash flow (RCF) 472 816 1,717 795 872 773 696Acquisitions / disposals 377 171 61 949 54 38 1,070Share buybacks / issues 19 8 26 18 0 31 0Total debt rep. 5,402 4,495 3,173 2,906 3,147 2,834 2,795Net debt rep. 4,866 3,610 1,682 843 1,114 1,163 -592Adj. for pensions 3,953 3,979 3,279 2,805 2,798 4,380 3,537Adj. for operating leases and others -1,136 -1,197 -1,191 284 284 262 262Net debt adj. 7,683 6,392 3,770 3,932 4,196 5,805 3,207

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

2008 2009 2010 2011 9M12 2012 9M130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5



0

1,000

2,000

3,000

4,000

5,000

6,000

Liqu

idity

as

of 9

M13

ST-

Deb

t as

of 9

M13 20

13

2014

2015

>201

5

EU

R m

n

Bonds Cash Back-up lines ST-Debt

CREDIT METRICS

2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 1.9 2.1 4.0 5.4 5.4 5.6 4.9EBIT gross interest cover adj. 1.7 2.0 3.8 4.8 4.9 5.2 4.5EBITDA net interest cover adj. 4.0 3.6 5.6 7.1 7.1 7.3 6.6EBITDA gross interest cover adj. 3.5 3.3 5.3 6.3 6.4 6.7 6.1FFO adj. / net debt adj. 11.4% 18.7% 55.6% 31.7% 26.0% 21.6% 33.9%FFO adj. / total debt adj. 10.6% 16.4% 39.9% 20.8% 17.5% 16.8% 16.5%RCF adj. / net debt adj. 6.4% 13.4% 46.5% 21.2% 15.7% 14.1% 20.2%RCF adj. / total debt adj. 6.0% 11.7% 33.3% 13.9% 10.6% 11.0% 9.8%Net debt adj. / EBITDA adj. 3.5 3.5 1.5 1.4 1.6 2.1 1.3Total debt adj. / EBITDA adj. 3.8 4.0 2.1 2.1 2.3 2.7 2.7FFO adj. / net interest adj. 1.6 2.3 4.6 3.1 2.9 3.3 3.0FFO adj. / gross interest adj. 1.4 2.2 4.4 2.7 2.6 3.0 2.7Total debt adj. / total capital. adj. 61.3% 59.2% 48.7% 52.3% 51.1% 57.5% 51.3%Net debt adj. / net capital. adj. 59.7% 56.0% 40.4% 41.8% 41.3% 51.2% 33.9%Equity / total assets 25.6% 27.6% 29.1% 35.8% 38.0% 31.9% 39.2%


<date>



INEOS Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB2/B+/-- POS/STABLE/-- Stable Hold --/iBoxx HY/iTraxx S18 not listed

Company Description: Privately owned Ineos Group Holdings (www.ineos.com), one of the largest chemical groups measured by turnover, is focused on petrochemicals (ethylene, propylene, phenol etc.). It commands top 3 or better global or regional market positions in 11 key products, representing more than 50% of Ineos' total sales as measured by volume. As of FYE 2012, the company operated 51 manufacturing plants (5 crackers) in 11 countries with total chemical production of capacity around 25,000kta, of which 69% in Europe and 31% in North America. In July 2011, Ineos successfully completed the partial disposal of its refining operations by turning them into a joint venture (daily distillation capacity of 410,000 barrels of crude oil or around 3.0 million tons p.a.) with PetroChina, which leaves Ineos less exposed to the volatility of the refining market, but retains the benefits of vertical integration. Ineos has been formed by a number of acquisitions (the most important being the BP Innovene acquisition in 2005) over the last few years. In 2012, the company reported revenues of EUR 18bn and EBITDA before exceptionals of EUR 1.5bn. Ineos is majority-owned by Mr. James Ratcliffe with other stakes owned by board members John Reece and Andrew Currie.

Moody's (08/13): Moody's would consider upgrading Ineos' rating to the extent that the company can generate meaningful free cash flow and reduce balance-sheet debt in 2013, leading to an improved net-debt/EBITDA ratio of around 4.5x. This would also imply the maintenance of a solid liquidity profile, with no or limited erosion in current cash levels. An upgrade of the rating would also require Ineos to have an interest coverage ratio comfortably above 2.75x, and a retained cash flow (RCF)/debt ratio above 10% on a sustained basis. Negative pressure is currently unlikely. S&P (04/13): S&P could raise its ratings if Ineos were to generate sustainably strong positive FOCF over the medium term such that its adjusted debt-to-EBITDA ratio was to approach 3.0x-3.5x (LTM 9M13: 4.6x). Management's financial policies, notably on future spending on investments, acquisitions, and dividends, would be important when considering any rating upgrade. S&P could lower its ratings if Ineos' EBITDA in 2013 declined to about EUR 1.3bn without realistic prospects of recovery in 2014 while capital expenditure continued as planned, leading to substantial negative FOCF and an increase in adjusted debt to EBITDA to 4.5x-5.0x.


O&P North America

18%

O&P Europe40%

Chemical Intermediates

42%

EBITDA BY SEGMENT

-100

-50

0

50

100

150

200

250

300

350

O&P North America O&P Europe Chemical Intermediates

in E

UR

mn

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q121Q13 2Q13 3Q13

Strengths/Opportunities – Strong market positions in a number of businesses such as nitriles, phenol,

ethylene oxide – Adequate product and geographic diversity and large size – O&P North America business benefits from feedstock advantage – Partial disposal of the volatile refining business – No major refunding needs before 2016

Weaknesses/Threats – High exposure to cyclical commodity chemicals – Potential supply and demand challenges due to new capacities in key

product lines (polyolefins) – European business suffers from weak macro situation and less cost

competitiveness – Working capital increases and some acceleration in expansion capex likely

to weigh on future cash flows – Ineos' potential interest in acquiring full ownership of Styrolution (it

currently owns 50% of the shares, but has call option exercisable from 02/14 onwards)

– Still relatively high leverage and low financial flexibility

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0242945367 INEGRP 15/02/2016 7.875% Caa1/B-/-- 1,179mn HY language; callable @ 101.313 (step-down to 100 in 02/14) XS0928189777 INEGRP 15/08/2018 6.5% Caa1/B-/-- 500mn HY language, callable in 05/15 @ 103.25 XS0744132936 INEGRP 15/02/2019 FLOAT B1/BB-/-- 500mn HY language, secured, , callable in 02/15 @ 102

Covenants: Ineos does not have any financial covenants in its term loans.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 2,530 17,835 4,958 26,587 27,516 29,073 18,077 16,008 17,586 13,491 18,188 12,768EBIT margin adj. 8.9% 4.4% 8.4% 4.1% 5.0% -0.2% 3.7% 7.7% 7.5% 6.5% 6.0% 7.3%EBITDA rep. 298 1,280 410 1,674 2,091 580 1,157 1,634 1,678 1,206 984 1,190EBITDA margin adj. 11.9% 9.0% 10.6% 6.9% 8.2% 2.5% 7.1% 10.8% 10.1% 9.2% 8.7% 9.7%Net income 151 -164 87 115 325 -573 -615 22 236 213 -275 205Funds from operations (FFO) 328 273 303 996 1,405 -198 436 653 1,016 375 406 464Operating cash flow 195 139 452 1,128 1,445 599 508 225 510 143 375 227Free cash flow rep. (after Capex) 140 77 299 630 806 -25 244 -120 114 -195 -87 -152Dividend payment -10 -40 0 -100 -25 0 0 -23 -14 0 -25 0Retained cash flow (RCF) 318 233 303 896 1,380 -199 436 630 1,003 375 381 464Acquisitions / disposals 1 0 -7,323 -628 -201 55 -11 415 679 0 0 -1Share buy back / issues 0 0 0 0 0 0 0 0 0 0 0 0Total debt rep. 761 681 9,004 8,694 8,231 7,949 7,749 7,343 6,593 7,443 7,289 7,333Net debt rep. 608 602 8,146 8,035 7,279 7,298 7,087 6,744 6,011 6,225 6,054 6,175Adj. for pensions 67 65 367 526 545 828 828 691 566 551 691 687Adj. for operating leases and others 10 19 48 46 470 513 436 390 230 230 150 150Net debt adj. 685 686 8,560 8,607 8,295 8,638 8,351 7,825 6,806 7,006 6,894 7,012

DEBT LEVERAGE

-10%

0%

10%

20%

30%

40%

50%

60%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0



0

1,000

2,000

3,000

4,000

5,000

6,000

Liquidityas of9M13

ST-debtas of9M13

2014 2015 2016 >2016

in E

UR

mn

Cash Bank debt Securitization Bonds ST-debt

CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 3.5 1.2 4.4 1.6 1.7 -0.1 0.8 1.4 1.8 1.3 1.7 2.2EBIT gross interest cover adj. 3.4 1.2 3.9 1.6 1.7 0.0 0.7 1.3 1.6 1.1 1.4 1.7EBITDA net interest cover adj. 4.7 2.5 5.6 2.8 2.8 0.9 1.6 2.0 2.4 2.0 2.5 3.0EBITDA gross interest cover adj. 4.5 2.5 4.9 2.6 2.7 0.7 1.4 1.8 2.2 1.8 2.0 2.3FFO adj. / net debt adj. 48.6% 41.6% 3.6% 11.7% 17.4% -1.5% 5.7% 8.9% 15.5% 6.8% 6.0% 6.9%FFO adj. / total debt adj. 39.7% 37.3% 3.3% 10.9% 15.6% -1.4% 5.3% 8.3% 14.3% 5.8% 5.1% 5.9%RCF adj. / net debt adj. 47.1% 35.8% 3.6% 10.6% 17.1% -1.5% 5.7% 8.6% 15.3% 6.6% 5.7% 6.5%RCF adj. / total debt adj. 38.5% 32.1% 3.3% 9.8% 15.3% -1.4% 5.3% 8.0% 14.1% 5.6% 4.8% 5.6%Net debt adj. / EBITDA adj. 2.3 0.4 16.3 4.7 3.7 11.8 6.5 4.5 3.8 4.9 4.4 4.5Total debt adj. / EBITDA adj. 2.8 0.5 18.0 5.0 4.1 12.7 7.0 4.9 4.2 5.7 5.2 5.2FFO adj. / net interest adj. 5.2 0.4 3.3 1.5 1.8 -0.2 0.6 0.8 1.5 0.7 0.7 0.9FFO adj. / gross interest adj. 5.0 0.4 2.9 1.4 1.7 -0.1 0.5 0.7 1.3 0.6 0.5 0.7Total debt adj. / total capital. adj. 84.6% 74.9% 96.7% 97.0% 90.1% 99.2% 106.6% 107.6% 104.3% 101.2% 110.1% 107.3%Net debt adj. / net capital. adj. 81.8% 72.8% 96.4% 96.8% 89.0% 99.2% 107.2% 108.3% 104.7% 101.5% 112.1% 108.7%Equity / total assets 12.8% 17.7% 2.4% 2.9% 7.0% 0.6% -5.0% -5.2% -3.5% -0.9% -7.9% -5.8%


<date>



K+S Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BBB/-- STABLE/NEG/-- Weakening Marketweight iBoxx/--/-- EUR 3.7bn

Company Description: Germany-based K+S AG is the world's leading salt and the fifth largest potash fertilizer producer. K+S's main business segments are Potash and Magnesium Products (58% of FY12 group sales and 81% of group EBITDA) and Salt (sales: 38%; EBITDA: 17%). The group remains geographically diversified and generates 41% of sales in Europe (15% of sales in Germany), 26% in North America, 17% in South America, 12% in Asia and 3% in Africa/Oceania. Major transactions of K+S in recent years were: 1. the acquisition of US-based Morton Salt (valued at USD 1.7bn) to become the largest salt producer globally; 2. the takeover of Canada-based Potash One (for EUR 263mn), thereby gaining ownership of several potash exploration licenses in Saskatchewan, which K+S will develop until summer 2016 (capex of above CAD 4.1bn) and which should solve K+S's capacity constraints and lower its cost position; 3. the sale of Nitrogen distribution activities for an EV of EUR 140mn to EuroChem. The announcement of the world's leading potash producer Uralkali at the end of July 2013 to exit its export network BPC and to implement a volume-before-price strategy is expected to put potash prices under pressure. Given K+S's high cost position in potash (most of the asset base located in Germany), this could leave the company vulnerable to significant cuts in cash generation. In 2012, the group generated sales of EUR 3.9bn and EBITDA of EUR 1.0bn. The company is listed on the Frankfurt Stock Exchange, with its main shareholder being Meritus Trust with a 10% stake.

Moody's (11/13): The Ba1 rating could come under pressure if, as a result of increased project costs or a sustained further decline in potash markets, K+S's financial profile deteriorates further such that 1. debt/EBITDA increases above 4.5x (LTM 9M13: 1.5x) on a sustained basis; and 2. RCF/debt declines to below 10% (LTM 9M13: 28%). Taking into account the substantial scale of K+S's expansion in Canada and the significant investment commitments associated with the execution of this critically important project, Moody's does not anticipate positive pressure on the ratings. S&P (11/13): The negative outlook reflects the possibility that industry conditions, especially prices, or K+S volumes, could become weaker than S&P's current base-case assumptions. These contractions would lead to further deterioration in credit metrics if management takes no action. S&P would downgrade K+S if its EBITDA falls below around EUR 0.9bn in 2013 or about EUR 0.7bn from 2014. Cost overruns or delays at the Legacy project would also put pressure on the rating. For the current rating, S&P considers a FFO-to-debt ratio of at least 35% (LTM 1H13: 75%) as rating-commensurate.

SALES BY SEGMENT

0

500

1,000

1,500

2,000

2,500

3,000

Potash and MagnesiumProducts

Salt ComplementaryActivities

2008 2009 2010 2011 2012 LTM 9M13

EBITDA BY SEGMENT

0

200

400

600

800

1,000

1,200

1,400

Potash and MagnesiumProducts

Salt ComplementaryActivities

2008 2009 2010 2011 2012 LTM 9M13

Strengths/Opportunities – Leading market position in potash (No. 5) and salt (No. 1) – Good long-term market dynamics in the fertilizer market – K+S initiated a cost savings program (benefits of EUR 150mn expected in

2014) to compensate for the expected reduction in potash prices – Healthy cash-flow generation and robust capital structure; possible

temporary deviation from its dividend policy (40-50% payout ratio) due to the expected pressure on cash generation stemming from falling potash prices

– Good liquidity with limited near-term maturities and proven access to capital markets

Weaknesses/Threats – Sensitivity of margins to potash volumes and prices; the break-up of the

export network BPC and Uralkali's announcement of a volume-before-price strategy is expected to put potash prices under pressure

– Limited volume growth potential due to capacity constraints and high cost position in potash compared to its peers

– Significant capex requirements for the development of Canadian greenfield investment; in an environment of lower prices, additional funding is required for the project and the profitability of the project is lowered (project underlies the investment assumption of potash prices of above USD 400/ton)

– Currency risk from large asset base in Europe – Rating pressure

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment DE000A1A6FV5 SDFGR 5% 24/09/14 Ba1/BBB/-- 750mn CoC DE000A1PGZ82 SDFGR 3% 20/06/22 Ba1/BBB/-- 500mn CoC

Covenants: The EUR 1.0bn RCF line due in 2018 does not include financial covenants.


<date>




EUR mn 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 2,539 2,816 2,958 3,344 4,794 3,574 4,633 3,997 2,994 3,935 2,973EBIT margin adj. 7.0% 9.1% 9.7% 8.5% 28.0% 8.2% 16.2% 22.4% 22.0% 21.6% 18.5%EBITDA rep. 276 374 400 409 1,482 442 971 1,120 812 1,065 722EBITDA margin adj. 11.5% 13.8% 13.9% 12.4% 31.0% 12.9% 21.3% 28.4% 27.6% 27.5% 24.6%Net income 87 174 271 -93 871 97 452 609 428 569 361Funds from operations (FFO) 296 358 315 364 1,284 292 833 813 613 929 466Operating cash flow 202 221 202 -108 803 535 858 740 413 557 618Free cash flow rep. (after Capex) 70 115 72 -267 635 362 663 468 180 133 154Dividend payment -43 -55 -74 -83 -83 -396 -38 -191 -249 -249 -268Retained cash flow (RCF) 254 303 241 281 1,202 -105 795 622 364 680 198Acquisitions / disposals -88 11 -342 10 3 -1,171 7 -195 86 92 6Share buybacks / issues 0 -67 -8 -6 -5 662 -2 -1 -1 -1 -1Total debt rep. 58 30 371 688 266 1,267 787 771 1,268 1,266 1,266Net debt rep. -148 -121 291 639 99 738 38 13 415 479 325Adj. for pensions 217 168 123 123 107 182 185 95 191 160 136Adj. for operating leases and others 402 366 379 403 39 67 63 78 78 59 59Net debt adj. 471 414 793 1,166 245 986 286 186 684 699 520

DEBT LEVERAGE

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100%

200%

300%

400%

500%

600%

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.5

1.0

1.5

2.0

2.5



0

500

1,000

1,500

2,000

2,500

Liquidityas of9M13

ST-Debtas of9M13

2013 2014 2015 2016 >2016

EU

R m

n

Bonds Cash RCF ST-Debt

CREDIT METRICS

2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 10.8 16.5 12.2 7.2 -477.2 4.6 5.8 12.5 8.9 9.3 8.7EBIT gross interest cover adj. 8.1 12.1 9.3 6.8 43.0 4.3 5.5 10.5 7.5 7.5 6.7EBITDA net interest cover adj. 17.9 25.0 17.4 10.4 -527.5 7.2 7.7 15.9 11.4 11.8 11.6EBITDA gross interest cover adj. 13.4 18.3 13.3 9.8 47.5 6.7 7.2 13.3 9.6 9.6 8.9FFO adj. / net debt adj. 64.5% 88.4% 41.0% 32.2% 529.4% 31.3% 296.0% 446.1% 122.6% 135.2% 153.2%FFO adj. / total debt adj. 44.9% 64.9% 37.2% 30.9% 314.4% 20.4% 81.9% 87.9% 54.5% 63.6% 54.5%RCF adj. / net debt adj. 55.5% 75.0% 31.6% 25.1% 495.8% -8.9% 282.6% 343.1% 86.2% 99.5% 101.7%RCF adj. / total debt adj. 38.6% 55.1% 28.7% 24.1% 294.4% -5.8% 78.2% 67.6% 38.3% 46.8% 36.2%Net debt adj. / EBITDA adj. 1.6 1.1 1.9 2.8 0.2 2.1 0.3 0.2 0.6 0.6 0.5Total debt adj. / EBITDA adj. 2.3 1.5 2.1 2.9 0.3 3.3 1.0 0.8 1.4 1.4 1.5FFO adj. / net interest adj. 18.6 23.6 13.8 9.5 -461.3 4.8 6.6 11.6 8.7 10.3 9.4FFO adj. / gross interest adj. 13.9 17.3 10.5 8.9 41.5 4.5 6.2 9.8 7.3 8.4 7.2Total debt adj. / total capital. adj. 43.5% 37.4% 43.6% 56.5% 19.5% 42.0% 28.2% 23.6% 31.4% 30.4% 30.0%Net debt adj. / net capital. adj. 34.9% 30.4% 41.2% 55.5% 12.6% 32.0% 9.8% 5.7% 16.9% 17.0% 13.3%Equity / total assets 41.0% 41.7% 39.7% 31.4% 49.5% 40.2% 47.6% 50.9% 51.7% 51.4% 52.9%


<date>



Kerling Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapCaa1/B-/-- NEG/DEVELOP/-- Stable Hold --/iBoxx HY/-- not listed

Company Description: Kerling Plc, which is based in Runcorn, UK, is a European producer of PVC and caustic soda with additional activities in, e.g. salt, brine, sulfur chemicals. The group maintains leading market positions in PVC (No. 1 producer in Western Europe by volume) and caustic soda (No. 2 producer in Western Europe by volume). PVC is mostly used in construction, which explains the cyclical nature of the industry, while caustic soda is mostly supplied to the pulp and paper industry. Through its 50% ownership in the Noretyl ethylene cracker in Norway, Kerling has secured access to one of its most important feedstocks. This benefits the group's position as the lowest-cost producer of PVC in Western Europe. Kerling was created at the beginning of 2010 by the combination of Ineos's Chlorvinyls and Enterprises businesses with the polymer assets of Norsk Hydro (acquired by Ineos Capital in 2008). In June 2011, Kerling acquired Tessenderlo's ChlorAlkali PVC business for EUR 110mn. In May 2013, Ineos (parent of Kerling) and Solvay announced their intention to combine their PVC businesses in a JV. The JV is currently being reviewed by the regulators for competitive clearance, which is expected to be completed during 1H14. In FY12, Kerling generated sales of EUR 2.8bn and an EBITDA of EUR 140mn. Kerling is owned by the same shareholders as Ineos and maintains links with Ineos regarding matters such as supply agreements.

Moody's (12/12): The negative outlook on Kerling's Caa1 rating indicates Moody's concerns that weakness in the European PVC market could lead to a deterioration in Kerling's performance in the coming quarters. A downgrade might occur if profitability was to weaken materially on a sustainable basis; FCF became negative, combined with a deterioration of the liquidity position, as well as if leverage increased to above 7.5x. Upward rating pressure is currently not likely. S&P (06/13): The rating could be lowered if there were no prospects for a material recovery in Kerling's operating performance and leverage metrics in 2013. Rating pressure could also result from a tightening of Kerling's available liquidity. The outlook could be revised to stable if Kerling's liquidity strengthens and its adjusted debt to EBITDA improves to about 5.5x-6.0x on an ongoing basis. Furthermore, in such a scenario, S&P would also consider Kerling's ability to deleverage, maintain "adequate" liquidity, and generate sustainable and adequate FOCF over the medium term.

SALES BY SEGMENT

-500

0

500

1,000

1,500

2,000

2,500

3,000

FY09 FY10 FY11 FY12 LTM 9M13

in E

UR

mn

ChlorVinyls (incl. PVC, caustic soda)Enterprises (e.g. salt, brine)Corporate

EBITDA BY SEGMENT

0

20

40

60

80

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140

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180

FY09 FY10 FY11 FY12 LTM 9M13

in E

UR

mn

ChlorVinyls (incl. PVC, caustic soda) Enterprises (e.g. salt, brine)

Strengths/Opportunities – Leading European producer of PVC and caustic soda – Considered the low-cost producer of PVC in Europe – Maintains high degree of vertical integration – Good customer diversification – JV with Solvay will create a strong European PVC player – No significant upcoming debt maturities before 2016

Weaknesses/Threats – Exposed to an industry characterized by high cyclicality, low margin levels

and overcapacity – Limited geographical diversification with business focused on Europe – Kerling needs to source highly-volatile input costs, US players have a

feedstock advantage and could export more quantities to Europe should the European economy start to strengthen

– Regulation requires high capital investments (mandatory conversion from mercury to membrane based industry)

– Highly leveraged capital structure – Moderate substitution risk for PVC

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0480857415 KERLIN 01/02/2017 10.625% Caa1/B-/-- 785mn Secured, callable in 02/14 @ 105.313

Covenants: The covenants under the group's EUR 40mn RCF line have not been disclosed. However, the group does not plan to draw on the RCF line.


<date>




EUR mn 2009 2010 2011 9M12 2012 9M13Sales 891 1,950 2,420 2,122 2,805 2,069EBIT margin adj. 6.6% 6.7% 4.5% 2.2% 1.6% 3.4%EBITDA rep. 93 199 195 110 138 132EBITDA margin adj. 12.1% 11.1% 8.7% 6.0% 5.5% 7.1%Net income -40 17 40 -47 -54 -42Funds from operations (FFO) 27 99 94 14 48 31Operating cash flow 47 21 98 -8 -9 72Free cash flow rep. (after Capex) 21 -24 36 -59 -82 30Dividend payment -22 -4 -10 0 -4 0Retained cash flow (RCF) 4 95 84 14 44 31Acquisitions / disposals 7 -66 -110 -7 -8 1Share buy back / issues 0 0 0 0 0 0Total debt rep. 535 815 926 1,000 998 960Net debt rep. 508 765 843 923 946 913Adj. for pensions 39 248 290 291 230 222Adj. for operating leases and others 1 2 10 10 10 10Net debt adj. 548 1,016 1,143 1,224 1,186 1,145

DEBT LEVERAGE

0%

2%

4%

6%

8%

10%

12%

2009 2010 2011 9M12 2012 9M130.0

1.0

2.0

3.0

4.0

5.0

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Liquidityas of9M13

2013 2014 2015 2016 >2016

in E

UR

mn


CREDIT METRICS

2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 0.7 1.5 1.1 0.7 0.5 0.5EBIT gross interest cover adj. 0.7 1.3 1.0 0.6 0.4 0.5EBITDA net interest cover adj. 1.4 2.5 2.0 2.0 1.6 1.3EBITDA gross interest cover adj. 1.2 2.2 2.0 1.9 1.4 1.2FFO adj. / net debt adj. 4.9% 9.9% 8.7% 5.7% 4.5% 6.1%FFO adj. / total debt adj. 4.7% 9.4% 8.1% 5.3% 4.3% 5.8%RCF adj. / net debt adj. 0.9% 9.5% 7.8% 4.8% 4.1% 5.7%RCF adj. / total debt adj. 0.8% 9.0% 7.3% 4.5% 4.0% 5.5%Net debt adj. / EBITDA adj. 5.1 4.7 5.4 6.8 7.7 6.6Total debt adj. / EBITDA adj. 5.3 4.9 5.8 7.3 8.0 6.9FFO adj. / net interest adj. 0.3 1.1 1.0 0.8 0.6 0.5FFO adj. / gross interest adj. 0.3 1.0 0.9 0.7 0.5 0.5Total debt adj. / total capital. adj. 110.7% 100.2% 101.1% 103.2% 102.4% 109.5%Net debt adj. / net capital. adj. 111.3% 100.2% 101.2% 103.4% 102.5% 109.9%Equity / total assets -6.4% 0.5% -0.2% -1.9% -1.3% -5.3%


<date>



Lanxess Analyst: Max Huefner, CFA (UniCredit Bank), +49 (0) 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB/BBB NEG/NEG/NEG Stable Marketweight iBoxx/--/iTraxx S18 EUR 3.9bn

Company Description: Lanxess (www.lanxess.com), based in Cologne, Germany, is a leading European chemicals manufacturer with a diversified business portfolio comprising polymers, basic, specialty and fine chemicals, which it sells to a well-diversified and global customer base. Its activities are organized along three business units: Performance Polymers (57% of FY12 sales), Performance Chemicals (24%), and Advanced Intermediates (18%). Since the spin-off from Bayer in 2005, Lanxess has divested a large number of businesses, including textiles, fiber and paper chemicals. Following the completion of its portfolio realignment, the company has started to look for external growth opportunities and has engaged in small-to-medium-sized acquisitions, such as Brazilian Petroflex (in 2008) and DSM's Elastomer business in FY11. In FY12, the EMEA region accounted for 28% of sales, Germany for 17% (not incl. in EMEA), North America for 18%, Latin America for 13% and the APAC region for 24%. The company employed 17,177 people in FY12. Its shareholder base is widely spread.

Moody's (08/13): Lanxess' strong business fundamentals continue to underpin its Baa2 rating, current volatility notwithstanding. Moody's could downgrade the rating if there is further sustained weakness in the operating environment or a material adverse shift in the financial policy, such as a debt-funded acquisition, so that the company is unable to strengthen and maintain RCF/net debt in the high twenties (LTM 2Q13: 16%) within the next 18 months and return to positive FCF generation in 2015. S&P (06/13): S&P could take negative rating action if margins do not improve from the beginning of 2014, if S&P revised down its forecast rise for 2014 EBITDA because of a prolonged recession in Europe, or if there was delayed improvement in market conditions in the European automotive and tire industries in the second half of 2013 and in 2014. The outlook could be revised to stable if the company demonstrated recovery in its margins and a significant rise in EBITDA in 2014, such that adjusted FFO-to-debt ratios improved to 30% (LTM 2Q13: 16%). S&P also sees management's policies as committed to the current rating, including restoring metrics and abstaining from substantial debt funded acquisitions. Fitch (08/13): The ratings could come under pressure if FCF remains negative and FFO adjusted net leverage is sustained above 2.0x as a result of a protracted downturn in the group's core markets, Lanxess' expansion strategy or financial policy.

SALES BY SEGMENT

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3,000

4,000

5,000

6,000

Performance Polymers Performance Chemicals Advanced Intermediates

in E

UR

mn

2008 2009 2010 2011 2012 LTM 9M13

EBITDA BY SEGMENT

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400

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Performance Polymers Advanced Intermediates Performance Chemicals

in E

UR

mn

2008 2009 2010 2011 2012 LTM 9M13

Strengths/Opportunities – Top three positions in around two thirds of its businesses (the group has

an especially strong position in synthetic rubbers) – Strong cost position through rigorous cost-cutting (Advance program

should result in cost savings of EUR 100mn by FY15 at a cash cost of EUR 145mn) and portfolio optimization (the group targets the disposal of non-core assets, which combined account for sales of EUR 500mn and an EBITDA of EUR 30mn)

– New capex programs target higher growth markets (i.e. the group is currently building the world's largest production site for Nd-PBR in Singapore)

– Prudent financial profile and commitment to an investment grade rating – Ample liquidity

Weaknesses/Threats – Exposed to cyclical end-markets (around 25% of sales to tires; around

15% of sales to automotive; about 10%-15% of sales to construction) – Exposure to volatile input cost (butadiene); the group's new butyl rubber

plant in Singapore should help the group's sourcing of butadiene in Asia Pacific given that there can be material regional differences in the price of butadiene

– Free cash flow impacted by significant capex – Larger-than-expected acquisitions and rising shareholder remuneration – Recovery in FY14 credit metrics needed to keep mid-BBB ratings

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0629645531 LXSGR 4.125% 23/05/18 Baa2/BBB/-- 500mn CoC XS0855167523 LXSGR 2.625% 21/11/22 Baa2/BBB/BBB 500mn CoC

Covenants: The EUR 1.25bn RCF line (maturing in February 2018) does not include financial maintenance covenants.


<date>




EUR mn 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 7,150 6,944 6,608 6,576 5,057 7,120 8,775 6,971 9,094 6,286EBIT margin adj. 5.1% 6.1% 7.2% 7.5% 4.8% 9.6% 10.2% 11.0% 10.3% 4.7%EBITDA rep. 341 638 513 602 422 890 1,101 958 1,188 501EBITDA margin adj. 8.6% 9.8% 11.0% 11.5% 10.0% 13.6% 13.8% 15.0% 14.4% 9.9%Net income -54 202 112 183 39 381 507 459 515 43Funds from operations (FFO) 512 599 609 518 310 650 838 653 853 271Operating cash flow 618 481 530 544 549 430 582 314 735 215Free cash flow rep. (after Capex) 367 214 246 202 274 -71 -97 -67 39 -183Dividend payment -2 -1 -22 -84 -42 -42 -58 -71 -72 -83Retained cash flow (RCF) 510 598 587 434 268 608 780 582 781 188Acquisitions / disposals 8 117 53 -185 -55 110 -278 -41 -39 -13Share buy back / issues 0 0 -50 0 0 0 0 0 0 0Total debt rep. 816 682 666 1,113 1,556 1,478 2,098 1,940 2,334 2,384Net debt rep. 680 511 413 864 841 954 1,570 1,638 1,537 1,866Adj. for pensions 614 589 474 417 428 496 563 633 851 860Adj. for operating leases and others 110 70 47 49 57 158 255 255 312 312Net debt adj. 1,404 1,170 934 1,330 1,326 1,608 2,388 2,526 2,700 3,038

DEBT LEVERAGE

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70%

2005

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2008

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2012

9M13

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idity

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M13 20

13

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EU

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n


CREDIT METRICS

2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 8.3 6.4 8.7 12.1 3.1 7.0 8.2 8.3 8.4 4.1EBIT gross interest cover adj. 7.1 11.4 12.7 8.3 2.5 6.3 7.5 7.8 8.0 4.1EBITDA net interest cover adj. 13.9 10.3 13.2 18.5 6.4 9.8 11.2 11.7 11.7 7.9EBITDA gross interest cover adj. 12.0 18.2 19.2 12.6 5.3 8.9 10.1 11.1 11.2 7.9FFO adj. / net debt adj. 36.9% 52.0% 65.8% 39.3% 24.4% 41.4% 35.7% 25.8% 32.4% 16.5%FFO adj. / total debt adj. 33.6% 45.4% 51.8% 33.1% 15.8% 31.2% 29.2% 23.0% 25.0% 14.1%RCF adj. / net debt adj. 36.7% 51.9% 63.5% 33.0% 21.2% 38.8% 33.2% 23.0% 29.8% 13.7%RCF adj. / total debt adj. 33.5% 45.3% 49.9% 27.8% 13.8% 29.2% 27.2% 20.5% 23.0% 11.7%Net debt adj. / EBITDA adj. 2.3 1.7 1.3 1.8 2.6 1.7 2.0 2.0 2.1 3.4Total debt adj. / EBITDA adj. 2.5 2.0 1.6 2.1 4.0 2.2 2.4 2.3 2.7 4.0FFO adj. / net interest adj. 11.7 9.2 11.2 12.8 4.1 6.7 7.8 6.1 7.8 4.5FFO adj. / gross interest adj. 10.1 16.4 16.3 8.7 3.4 6.1 7.1 5.8 7.5 4.4Total debt adj. / total capital. adj. 57.5% 49.7% 43.8% 51.7% 56.3% 53.3% 57.1% 52.5% 59.6% 61.7%Net debt adj. / net capital. adj. 55.2% 46.3% 38.0% 47.4% 45.5% 46.2% 52.2% 49.7% 53.2% 58.0%Equity / total assets 28.9% 34.0% 37.7% 30.9% 28.5% 31.1% 30.2% 33.2% 31.0% 30.2%


<date>



Linde Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA3/A/-- STABLE/CWP/-- Stable Marketweight iBoxx/--/iTraxx S18 EUR 27.3bn

Company Description: Germany-based Linde (www.linde.com), following the acquisition of UK-based BOC plc in September 2006, is the world's No. 2 industrial gases company, slightly behind Air Liquide. Through BOC, Linde complemented its leading market positions in Europe and South America. Linde holds a No. 1 or No. 2 market position in 56 of the 70 countries it operates in. Its Engineering unit is a market leader in air separation plants, and among the top 3 players in olefin plants, hydrogen and synthesis gas as well as in natural gas plants. In July 2012, Linde acquired the US-based healthcare company Lincare (FY11 sales of USD 1.8bn and EBITDA of USD 454mn) for a consideration of USD 4.6bn and doubled its existing health care business in size, improving its geographic diversity with higher exposure to the North American market. In FY12, Linde's Gases division, which accounts for about 96% of operating profits, generated around 48% of its sales in EMEA, 25% in the Americas, and 28% in Asia/Pacific. 16% of Gases' sales in the division were realized in HealthCare, 23% in Tonnage, 27% in Bulk and 34% in Cylinder. The Linde Group is listed on the Frankfurt Stock Exchange (Xetra), with its shareholders being widely spread.

Moody's (05/13): A positive move would be considered upon Linde's ability to achieve RCF/net debt of 27-28% (LTM 9M13: 23%) through the cycle and leverage materially below 2.5x (LTM 9M13: 2.9x). An RCF/net debt ratio that is sustained below the mid-twenties in percentage terms and debt/EBITDA rising above the 2.5x-3.0x range would exert downward pressure on the rating. The rating can accommodate a temporary shortfall from these levels, whether this were a result of incomplete consolidation in the first year of cash flows from Lincare, or of the period of time needed by Lincare to counter the Medicare reimbursement cuts, although Moody's expects this to be relatively short. S&P (11/13): As part of its revised corporate criteria, S&P put Linde under credit watch positive. The credit watch status is likely resolved over the coming weeks.

SALES BY SEGMENT

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12,000

14,000

16,000

Gases Engineering

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UR

mn

FY08 FY09 FY10 FY11 FY12 LTM 9M13

OPERATING PROFIT BY SEGMENT

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3,000

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4,000

Gases Engineering

in E

UR

mn

FY08 FY09 FY10 FY11 FY12 LTM 9M13

Strengths/Opportunities – Strong geographic diversification – Healthy order book in Engineering – Solid EBITDA margins in the 20% range in Gases – Stable cash-flow generation owing to contractual arrangements and

market-leading position in Gases – Very good track record of deleveraging and stringent cost control – Increased exposure to more stable healthcare segment and stronger

footprint in North America following the acquisition of Lincare

Weaknesses/Threats – Cylinder business with pronounced cyclicality – Capital-intensive industry with significant capex requirements in excess of

10% of sales – Accelerating dividend payments and cash return to shareholders – Track record of M&A (e.g. BOC, Lincare)

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0403540189 LINGR 6.75% 08/12/15 A3/A/-- 600mn CoC XS0297699588 LINGR 4.75% 24/04/17 A3/A/-- 1,000mn -- XS0718526790 LINGR 3.125% 12/12/18 A3/A/-- 750mn CoC XS0790015548 LINGR 1.75% 11/06/19 A3/A/-- 500mn CoC XS0828235225 LINGR 1.75% 17/09/20 A3/A/-- 1,000mn CoC XS0632659933 LINGR 3.875% 01/06/21 A3/A/-- 600mn CoC DE000A1R07P5 LINGR 2% 18/04/23 A3/A/-- 650mn CoC XS0259604329 LINGR 7.375% 14/07/66 Baa2/BBB+/-- 700mn Perp; callable @ 100 in 07/16

Covenants: The group's EUR 2.5bn RCF line does not include financial covenants.


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 8,726 8,992 8,856 9,511 12,439 12,306 12,663 11,211 12,868 13,787 11,469 15,280 12,468EBIT margin adj. 7.0% 5.6% 9.4% 10.4% 9.5% 9.0% 10.3% 9.5% 12.8% 13.6% 13.9% 12.8% 13.7%EBITDA rep. 1,436 1,317 1,515 1,706 1,876 2,958 2,554 2,325 2,857 3,134 2,671 3,438 2,981EBITDA margin adj. 17.4% 15.8% 18.1% 18.4% 17.9% 19.3% 20.0% 20.3% 22.5% 23.1% 24.1% 22.8% 24.6%Net income 241 109 385 523 1,858 1,013 776 653 1,064 1,244 971 1,324 1,078Funds from operations (FFO) 1,153 947 1,218 1,067 1,088 1,644 1,720 1,681 2,040 2,194 1,754 2,443 2,016Operating cash flow 1,274 1,281 1,515 1,426 1,061 1,323 1,523 1,841 2,124 2,119 1,266 2,145 1,848Free cash flow rep. (after Capex) 453 570 566 600 28 274 119 737 932 743 30 357 323Dividend payment -136 -135 -137 -150 -168 -281 -329 -343 -349 -419 -471 -476 -550Retained cash flow (RCF) 1,017 812 1,081 917 920 1,363 1,391 1,338 1,691 1,775 1,283 1,967 1,466Acquisitions / disposals 220 69 113 53 -9,318 2,782 173 114 106 88 -3,388 -3,389 40Share buybacks / issues 0 0 2 19 1,846 50 17 20 81 30 1,441 1,439 1Total debt rep. 3,793 3,502 3,058 2,927 10,596 6,710 6,867 6,391 6,077 7,169 9,823 9,978 9,510Net debt rep. 3,313 2,941 2,491 2,016 9,933 5,807 5,907 5,543 4,901 5,096 8,476 7,870 8,102Adj. for pensions 1,170 1,062 908 1,122 1,284 772 982 1,098 884 938 1,279 1,113 875Adj. for operating leases and others 305 330 365 419 339 301 382 387 418 440 440 495 495Net debt adj. 4,788 4,333 3,764 3,557 11,556 6,880 7,271 7,027 6,203 6,474 10,195 9,478 9,472

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

40%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

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Cash asat 9M13

ST-Debtas at9M13

2013 2014 2015 2016 > 2016

EU

R m

n

Bonds Cash ST-Debt Committed Line

CREDIT METRICS



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Solvay Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa1/BBB+/A- NEG/STABLE/CWN Stable Marketweight (Senior)/Buy (Hybrid) iBoxx/--/iTraxx S18 EUR 9.5bn

Company Description: Founded in 1863, Solvay, based in Brussels, Belgium, is an international chemicals group active in the fields of specialty polymers, vinyls, polyamide, essential chemicals (e.g. soda ash and fluorinated products)and consumer chemicals. During 2013, Solvay continued its portfolio management by announcing to merge its cyclical PVC business in a JV with Ineos (JV is currently reviewed for competitive clearance; closing expected for 1H14) and by acquiring fast-growing US-based Chemlogics (produces chemicals mainly used for the extraction of oil & gas) for USD 1.3bn. Solvay has a strong diversification in terms of geographies, with around 38% of its sales in emerging markets (28% in Asia and 10% in Latin America), Western Europe accounting for 42% and North America for 20% of sales. According to Solvay, around 90% of its sales are in businesses in which the group has a top 3 market position. Major end-markets of the new group are consumer goods (28% of sales), automotive (15%), construction (14%), electricals & electronics (7%), energy (6%) etc. Solvay S.A. is listed in Brussels and its key anchor shareholder remains Solvac S.A., a family holding, with a stake of 30.1%.

Moody's (10/13): Moody's might downgrade Solvay's ratings in the event of sustained weakness in the company's operating cash flow generation as a result of weaker operating performance in 2014 or additional restructuring, leading to debt/EBITDA remaining above 3x (LTM 9M13: 4.4x) and sustained weakness in RCF/net debt coverage below 25% (LTM 9M13: 13%). There is limited upward rating pressure at this stage. S&P (10/13): S&P expects Solvay's FFO/debt ratio to improve to at least 35% (LTM 9M13: 26%) in 2014, which is commensurate with the current rating. This ratio improvement is based on S&P's treatment of the hybrid, to be issued in the near term, as having 50% equity over time. Rating pressure could occur if 2014 EBITDA fell short of EUR 1.8bn, or if some actions tied to Solvay's portfolio reshaping did not crystallize, and as a result FFO/debt below 35%. Upward rating pressure is unlikely in 2014. Fitch (10/13): The rating watch negative (RWN) reflects Fitch's opinion that the USD 1.35bn transaction will push Solvay's debt metrics further away from levels consistent with an 'A-' rating. The agency expects to resolve the RWN by end-2013 when the transaction is likely to be completed, and believes that the group's post-acquisition credit profile will be more aligned with a 'BBB+' rating over the next three years.

SALES BY SEGMENT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

ConsumerChemicals

AdvancedMaterials

PerformanceChemicals

FunctionalPolymers

Corporateand Business

Services

EU

R m

n

9M12 2012 9M13 LTM9M13

REBITDA BY SEGMENT

-200-100

0100200300400500600700800

ConsumerChemicals

AdvancedMaterials

PerformanceChemicals

FunctionalPolymers

Corporate andBusinessServices

EU

R m

n

9M12 2012 9M13 LTM9M13

Strengths/Opportunities – Leading market positions in a number of businesses such as silicas,

specialty surfactants, soda ash, caustic soda and other specialty polymers – Solid footing in emerging markets (close to 40% of sales of combined

group) – Family background of major shareholder with blocking minority – No significant near-term maturities – Solvay targets EUR 400mn in cost savings until FYE 2014

Weaknesses/Threats – Considered to be one of the more cyclical chemical companies in Europe

although partial disposal (still needs to be approved by European regulators) of its cyclical PVC business should reduce overall cyclicality

– Exposure to volatile raw material costs, although a high level of self sufficiency (e.g. in salt, limestone)

– Large investment program to constrain FCF generation going forward, partially offset by continuous improvement in working capital management

– High off-balance sheet obligations – Shareholder-friendly policy with steadily increasing dividends

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment BE0002169358 SOLBBB 5% 12/06/15 Baa1/BBB+/A- 500mn -- BE0374557404 SOLBBB 4.625% 27/06/18 Baa1/BBB+/A- 500mn -- XS0506721827 SOLBBB 7% 15/05/18 Baa2/BBB+/BBB+ 500mn Issued by Rhodia; callable in 05/14 @ 103.5 XS0992293570 SOLBBB 4.2% Perp Baa3/BBB-/-- 700mn Perp; callable in 05/19 @ 100 XS0992293901 SOLBBB 5.425% Perp Baa3/BBB-/-- 500mn Perp; callable in 11/23 @ 100 XS0254808214 SOLBBB 6.375% 02/06/04 Baa3/BBB-/BBB 500mn Perp; callable in 06/16 @ 100

Covenants: According to S&P, there are no covenants included in its EUR 2bn in committed back-up lines (EUR 1bn due in 07/15 and EUR 0.55bn due in 11/16). Source: Rating agencies, company data, iBoxx, UniCredit Research

<date>




EUR mn 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 8,562 9,399 9,572 9,490 8,485 5,959 12,535 8,239 12,831 7,825EBIT margin adj. 12.1% 12.7% 13.4% 11.1% 12.3% 10.1% 12.0% 12.7% 11.2% 11.7%EBITDA rep. 1,032 1,430 1,692 1,457 1,335 567 1,965 1,473 1,933 1,231EBITDA margin adj. 17.3% 17.8% 18.3% 16.1% 17.8% 16.1% 17.0% 20.2% 16.4% 19.8%Net income 816 817 828 450 554 97 782 530 727 393Funds from operations (FFO) 844 1,079 1,112 819 1,010 537 428 976 1,227 700Operating cash flow 903 1,074 793 1,175 1,058 503 731 809 1,281 589Free cash flow rep. (after Capex) 398 493 360 412 602 217 129 309 496 78Dividend payment -217 -227 -259 -256 -273 -264 -282 -284 -294 -324Retained cash flow (RCF) 627 852 853 563 737 273 146 692 933 376Acquisitions / disposals 0 0 0 16 15 4,449 -2,969 229 107 -73Share buybacks / issues -812 -12 -114 -5 -10 -110 41 82 114 -6Total debt rep. 2,129 1,440 1,631 2,228 2,569 2,432 3,917 3,756 3,401 3,306Net debt rep. 1,680 1,007 1,056 1,345 -2,326 -3,245 1,510 1,279 875 1,225Adj. for pensions 1,247 1,226 1,074 1,184 1,034 948 2,492 2,568 2,879 2,745Adj. for operating leases and others 184 188 181 180 176 111 286 286 345 345Net debt adj. 3,111 2,420 2,310 2,708 -1,116 -2,185 4,287 4,132 4,098 4,315

DEBT LEVERAGE

-120%

-100%

-80%

-60%

-40%

-20%

0%

20%

40%

60%

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

-12.0

-10.0

-8.0

-6.0

-4.0

-2.0

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2.0

4.0



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1,000

1,500

2,000

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Liqu

idity

as

of 9

M13

ST-

Deb

t as

of 9

M13 20

13

2014

2015

2016

> 20

16

EU

R m

n


CREDIT METRICS

2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 10.1 11.7 15.1 9.3 8.2 5.4 5.1 3.7 4.2 5.0EBIT gross interest cover adj. 10.1 9.2 11.9 7.5 7.6 4.5 4.7 3.5 4.0 4.7EBITDA net interest cover adj. 14.3 16.4 20.6 13.4 11.9 8.6 7.2 5.9 6.2 7.6EBITDA gross interest cover adj. 14.3 12.9 16.2 10.9 11.1 7.2 6.6 5.6 5.9 7.1FFO adj. / net debt adj. 28.0% 45.7% 49.4% 31.5% -93.9% -25.8% 11.1% 23.9% 30.9% 22.9%FFO adj. / total debt adj. 24.5% 38.8% 39.6% 23.8% 27.8% 16.1% 7.1% 15.0% 19.1% 15.4%RCF adj. / net debt adj. 21.0% 36.3% 38.2% 22.1% -69.5% -13.7% 4.5% 16.9% 23.8% 15.1%RCF adj. / total debt adj. 18.4% 30.8% 30.6% 16.7% 20.5% 8.6% 2.9% 10.6% 14.7% 10.2%Net debt adj. / EBITDA adj. 2.1 1.4 1.3 1.8 -0.7 -2.3 2.0 2.2 2.0 2.2Total debt adj. / EBITDA adj. 2.4 1.7 1.6 2.4 2.5 3.6 3.1 3.5 3.2 3.2FFO adj. / net interest adj. 8.4 10.9 13.4 7.5 8.2 5.1 1.6 2.9 3.7 3.8FFO adj. / gross interest adj. 8.4 8.5 10.6 6.1 7.7 4.2 1.5 2.8 3.5 3.5Total debt adj. / total capital. adj. 47.5% 37.4% 37.4% 41.8% 41.7% 33.0% 48.7% 47.6% 48.6% 48.7%Net debt adj. / net capital. adj. 44.1% 33.7% 32.4% 35.1% -26.8% -44.5% 37.8% 36.2% 36.9% 39.0%Equity / total assets 34.9% 42.4% 42.1% 40.8% 43.1% 50.7% 35.5% 37.2% 37.4% 38.8%


<date>



Styrolution Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB2/B+/-- STABLE/STABLE/-- Stable Sell --/iBoxx HY/-- not listed

Company Description: With its roots dating back to the early 1930s, Frankfurt-based Styrolution is a leading global producer of Styrenics; it is jointly owned by BASF and Ineos, which set up the joint venture in October 2011. Based on key inputs ethylene and benzene (supplied mainly by the shareholders), Styrolution produces styrene monomers and is forward-integrated into downstream products polystyrene, ABS (acrylonitrile butadiene styrene) standard and copolymers/ABS specialties. The main applications for styrenics include packaging materials, appliances, electronics and automotive. Key features of the industry include mature demand for most products (especially in Europe and North America, while there is higher growth in Asia), the commodity-like character of styrene, substitution trends (polystyrene, ABS), high cyclicality and remaining overcapacities following a few capacity closures in the past. In light of this, management's strategy targets cost and technology leadership as well as managing the high cyclicality and volatility of the business. Furthermore, Styrolution intends to selectively grow the business in attractive areas. At FYE 2012, the group had 17 production sites across ten countries and employed around 3,400 people. Styrolution had sales of EUR 6.0bn and an EBITDA before special items of EUR 335mn in FY12.

Moody's (04/13): Moody's would consider downgrading the rating if 1. the EBITDA margin fell sustainably below 5%; 2. FCF failed to turn positive over the next 12 months; 3. there was a significant decrease in cash balances; or 4. the debt/EBITDA ratio rose towards 5.0x. Positive pressure on the rating would materialize in case of 1. a sustained EBITDA margin of around 7%; 2. a persistent positive FCF/debt ratio of around 8%; 3. an improvement in the liquidity profile through increased cash balances; or 4. if the debt/EBITDA ratio was solidly below 3.5x. S&P (02/13): S&P considers FFO/debt of 20-25% as commensurate with the current rating. Negative rating pressure might arise if EBITDA margins or FFO/debt declined sustainably to 4% and 20%, respectively. Also, material free cash burn and a weakening of the liquidity position could put pressure on the rating.

SALES BY BUSINESS UNIT (9M13)

Polymers EMEA37%

Polymers Asia18%

Styrene Monomer

24%

Polymers Americas

21%

EBITDA BY BUSINESS UNIT (9M13)

Polymers EMEA47%

Polymers Americas

17%

Polymers Asia10%

Styrene Monomer

26%

Strengths/Opportunities – Leading market positions in styrenics – Solid geographic reach although close to 50% of sales are generated in

Europe – Diversified end-markets and customer base – Backward integration into styrene monomers and world-class production

facilities that have a strong cost position – Relatively low capex needs p.a. (around 1% of sales), however, capex can

increase in years of maintenance work (styrene units every 3-5Y; Polystyrene and ABS units every 1-2Y)

– Cost savings of above EUR 200mn planned by 2016 (90% to be achieved by FYE 2013)

– Modestly leveraged business

Weaknesses/Threats – Operates in a highly cyclical industry, which still suffers from

overcapacities and continues to face capacity additions in Asia/Middle East – Substitution risk for polystyrenes and ABS – Exposure to volatile input cost (ethylene, benzene), however, some

contracts include cost pass-through clauses softening the impact on margins

– Relatively low EBITDA margins owing to the commodity character of a significant portion of its products; however, we note the rising share of higher-margin Specialties business of group EBITDA (around 35% of FY12 EBITDA)

– High volatility in EBITDA and working capital requirements as a result of cyclicality and high volatility in prices of main raw materials (i.e. benzene)

– Exercise of BASF's put option (exercisable from October 2014 onwards) could deteriorate Styrolution's capital structure

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0628089426 STYRO 7.625% 15/05/16 B2/B+/-- 480 Callable @ 105.719 (step down in 05/14 to 102.859)

Covenants: The group's main liquidity source – a EUR 500mn securitization program – does not include covenants.


<date>




EUR mn 2010 2011 9M12 2012 9M13Sales 6,441 6,551 4,554 5,990 4,502EBIT margin adj. 5.3% 3.3% 2.8% 2.9% 3.9%EBITDA rep. 424 299 232 306 304EBITDA margin adj. 6.5% 4.9% 5.6% 5.7% 7.2%Net income 220 94 47 50 86Funds from operations (FFO) 321 56 128 206 261Operating cash flow 117 315 95 85 239Free cash flow rep. (after Capex) 46 241 34 -43 174Dividend payment 0 0 0 0 0Retained cash flow (RCF) 321 56 128 206 261Acquisitions / disposals 0 0 22 23 1Share buybacks / issues 0 0 -7 -7 13Total debt rep. 720 908 792 830 741Net debt rep. 620 642 567 640 457Adj. for pensions 54 43 46 61 61Adj. for operating leases and others 58 39 39 45 45Net debt adj. 732 723 651 746 563

DEBT LEVERAGE

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20%

40%

60%

80%

2010 2011 9M12 2012 9M13-1.0

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Liquidityas of9M13

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mn


CREDIT METRICS

2010 2011 9M12 2012 9M13EBIT net interest cover adj. 6.4 4.0 1.7 3.2 4.1EBIT gross interest cover adj. 6.2 3.9 1.6 2.9 3.5EBITDA net interest cover adj. 7.8 5.9 4.6 6.4 7.7EBITDA gross interest cover adj. 7.6 5.8 4.5 5.7 6.6FFO adj. / net debt adj. 45.1% 8.9% -8.2% 29.0% 62.3%FFO adj. / total debt adj. 39.7% 6.5% -6.1% 23.1% 41.4%RCF adj. / net debt adj. 45.1% 8.9% -8.2% 29.0% 62.3%RCF adj. / total debt adj. 39.7% 6.5% -6.1% 23.1% 41.4%Net debt adj. / EBITDA adj. 1.8 2.2 2.4 2.2 1.4Total debt adj. / EBITDA adj. 2.0 3.1 3.3 2.7 2.1FFO adj. / net interest adj. 6.2 1.2 -0.9 4.0 6.6FFO adj. / gross interest adj. 6.1 1.2 -0.9 3.6 5.6Total debt adj. / total capital. adj. 60.1% 38.0% 34.4% 36.4% 33.3%Net debt adj. / net capital. adj. 57.0% 30.9% 28.0% 31.3% 25.0%Equity / total assets 26.5% 40.0% 44.0% 43.6% 45.6%


<date>



Syngenta Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA2/A/-- STABLE/CWP/-- Stable Marketweight iBoxx/--/-- CHF 33.0bn

Company Description: Syngenta (www.syngenta.com), headquartered in Basel, Switzerland, is the world's largest crop protection producer and No.3 in the worldwide seeds business. While Syngenta is relatively unaffected by the trend of the overall economy (demand is mainly related to the level of soft-commodity prices, which are impacted by the long-term trends of a growing world population and greater prosperity in emerging markets), weather conditions remain a wild card in estimating future earnings. The largest part of revenues and earnings are generated, due to seasonal patterns, in the first half of the year, which largely reflects the northern hemisphere planting and growing cycle. However, Syngenta's growing presence in South America is gradually reducing this dependence. In order to reflect the group's integrated strategy, the group now reports sales and profitability for the combined business (Seeds, Crop Protection) by four geographic regions, while reporting the Lawn & Garden segment separately. Long-term targets include raising market share by 0.5% each year while increasing sales in key crops to above USD 25bn by 2020 (supported by strong R&D investments; R&D costs make up around 9% of annual sales). Syngenta is currently executing its plan to integrate its Crop Protection and Seeds activities, which it expects to result in cost savings of USD 650mn by 2015. In FY12, Syngenta reported sales of USD 14.2bn. 30% of sales were generated in Europe, Africa and the Middle East, 30% in North America, 27% in Latin America and 13% in the Asia-Pacific region. The company, which employs 27,000 people in over 90 countries, has no major shareholder.

Moody's (11/12): The ratings could be lowered in the event of a significantly weaker-than-expected operating performance or a more aggressive financial policy, resulting in RCF/net debt falling below 40% (LTM 1H13: 28%) for an extended period of time. Moody's does not anticipate any upward pressure to develop in the foreseeable future. S&P (11/13): As part of its revised corporate criteria, S&P put Syngenta under credit watch positive. The credit watch status is likely resolved over the coming weeks.

SALES BY REGION (1H13)

Europe, Africaand Middle East

39%

North America33%

Latin America15%

Asia Pacific13%

EBITDA BY BUSINESS (1H13)

Crop Protection72%

Seeds24%

Lawn and Garden

4%

Strengths/Opportunities – Favorable underlying demographic trends and improving wealth – Leading global agri-business with strong positions in Crop Protection and

Seeds built on a diversified product portfolio – High barriers to entry due to regulatory and R&D requirements – Well-filled R&D pipeline and innovative product portfolio to drive growth – Strong free-cash-flow generation resulting from sound operating

profitability, with EBITDA margins in the low twenties

Weaknesses/Threats – Cyclicality of price patterns of agricultural products (e.g. depends on soft-

commodity prices) – Risk of changes to agricultural policies (subsidies) across key markets – Strong competitive pressures and risk of generic competition – Uncertain dynamics of future developments in biotechnology, mainly in the

area of genetically modified seeds – Accelerating acquisitions (recently, the group has increased its M&A

activity, but the acquisitions are in the small-to-medium-sized range) and excessive cash return to shareholders

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0217939494 SYNNVX 4.125% 22/04/15 A2/A/-- 500mn CoC

Covenants: The USD 1.5bn back-up facility (maturing in 11/17) does not include financial covenants, according to S&P.


<date>




USD mn 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 6,323 6,197 6,578 7,269 8,104 8,046 9,240 11,624 10,992 11,641 13,268 8,265 14,202 8,390EBIT margin adj. 10.6% 7.8% 11.1% 10.1% 12.9% 13.4% 16.2% 17.3% 18.1% 16.8% 17.6% 23.7% 18.3% 22.6%EBITDA rep. 1,127 1,154 1,219 1,395 1,549 1,535 1,902 2,316 2,297 2,321 2,645 2,127 2,878 2,089EBITDA margin adj. 22.5% 22.4% 21.2% 21.7% 21.3% 22.1% 20.9% 21.2% 22.4% 21.3% 22.1% 27.4% 22.4% 26.1%Net income 35 -21 272 536 626 637 1,111 1,385 1,411 1,402 1,600 1,487 1,875 1,412Funds from operations (FFO) 410 394 744 1,054 707 1,064 1,360 2,070 1,575 1,582 1,921 2,107 2,218 1,738Operating cash flow 548 802 799 1,309 497 928 1,168 1,466 1,419 1,707 1,871 177 1,359 -68Free cash flow rep. (after Capex) 295 637 578 1,143 323 664 798 904 670 1,193 1,330 -62 739 -342Dividend payment 0 -54 -69 -143 -208 -264 -301 -452 -494 -524 -706 -791 -791 -921Retained cash flow (RCF) 410 340 675 911 499 800 1,059 1,618 1,081 1,058 1,215 1,316 1,427 817Acquisitions / disposals 176 65 50 -519 36 -105 -22 -185 -177 -57 58 77 -590 -18Share buy back / issues 0 0 0 -98 -251 -557 -662 -613 -137 -246 -377 54 24 62Total debt rep. 2,536 2,132 1,766 1,540 1,322 1,699 1,990 2,696 3,402 3,456 2,804 3,620 3,316 3,767Net debt rep. 2,248 1,900 1,560 1,313 860 1,173 1,385 1,886 1,802 1,473 1,135 1,956 1,706 2,982Adj. for pensions 280 267 259 258 199 393 347 411 786 399 521 521 469 469Adj. for operating leases and others 97 35 45 45 68 63 64 57 87 91 136 92 87 87Net debt adj. 2,625 2,202 1,864 1,616 1,127 1,629 1,796 2,354 2,674 1,963 1,792 2,569 2,262 3,538

DEBT LEVERAGE

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60%

80%

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120%

2000

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1H13

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US

D m

n

Bonds (as per Bloomberg) Cash RCF ST-Debt

CREDIT METRICS

USD mn 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 3.7 4.2 12.7 15.7 14.3 18.2 31.0 11.5 15.2 13.1 13.4 12.7 16.6 19.1EBIT gross interest cover adj. 2.7 2.5 5.7 6.0 5.9 7.3 31.0 11.5 15.2 13.1 13.4 12.7 16.6 19.1EBITDA net interest cover adj. 7.8 11.9 24.3 34.0 23.7 30.0 39.9 14.1 18.8 16.5 16.9 15.8 20.4 22.1EBITDA gross interest cover adj. 5.6 7.3 10.9 12.9 9.8 12.1 39.9 14.1 18.8 16.5 16.9 15.8 20.4 22.1FFO adj. / net debt adj. 16.4% 18.3% 40.4% 65.8% 63.9% 66.1% 76.5% 88.3% 59.4% 81.3% 108% 88.9% 99.0% 49.4%FFO adj. / total debt adj. 14.8% 16.6% 36.4% 57.7% 45.3% 49.9% 57.2% 65.7% 37.2% 40.4% 56.0% 54.0% 57.8% 40.4%RCF adj. / net debt adj. 16.4% 15.9% 36.7% 56.9% 45.5% 49.9% 59.7% 69.1% 40.9% 54.6% 68.8% 58.1% 64.0% 23.4%RCF adj. / total debt adj. 14.8% 14.4% 33.1% 49.9% 32.2% 37.7% 44.7% 51.4% 25.6% 27.1% 35.6% 35.3% 37.4% 19.1%Net debt adj. / EBITDA adj. 1.8 1.6 1.3 1.0 0.7 0.9 0.9 1.0 1.1 0.8 0.6 0.8 0.7 1.6Total debt adj. / EBITDA adj. 2.1 1.8 1.5 1.2 0.9 1.2 1.2 1.3 1.7 1.6 1.2 1.4 1.2 2.0FFO adj. / net interest adj. 2.4 3.5 13.1 22.9 9.9 18.1 28.4 11.9 12.2 10.6 11.1 11.9 14.3 17.6FFO adj. / gross interest adj. 1.7 2.1 5.9 8.7 4.1 7.3 28.4 11.9 12.2 10.6 11.1 11.9 14.3 17.6Total debt adj. / total capital. adj. 41.2% 37.0% 30.0% 25.8% 23.1% 27.6% 27.9% 37.5% 39.4% 34.0% 31.0% 33.5% 30.4% 32.0%Net debt adj. / net capital. adj. 38.7% 34.7% 27.8% 23.4% 17.6% 22.4% 22.4% 30.9% 28.9% 20.4% 18.9% 23.4% 20.3% 27.8%Equity / total assets 38.8% 42.1% 46.7% 47.3% 47.6% 48.0% 45.5% 37.6% 40.2% 43.1% 43.5% 42.3% 45.1% 43.5%


<date>




Construction & Materials iBoxx Construction & Materials Sector Composition

IBOXX EUR CONSTR. & MATERIALS ISSUANCE ACTIVITY

SGOF

P

SGOF

P

SGOF

P

ENFP

ENFP

DGFP

DGFP

DGFP

DGFP

CRHI

D

CRHI

D

CRHI

D

HOLN

VX LGFP

LGFP

HEIG

R

HEIG

R

HEIG

R

OBRA

S

ITCI

T

BZUI

M

SALIN

I

CEME

X

ALGS

CO

XELL

AH

TITK

GA

0

500

1,000

1,500

2,000

2,500

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12Fe

b-12

Mar

-12

Apr

-12

May

-12

Jun-

12Ju

l-12

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Issu

ance

in E

UR

mn

iBoxx IGiBoxx HY



Issue Date Bond iBoxx Notional (EUR mn)10/24/13 HEIGR 3.25% Oct-20 HY 30010/17/13 XELLAH 9.125% Sep-18 HY 20010/15/13 CRHID 2.75% Oct-20 IG 75009/30/13 LGFP 4.75% Sep-20 HY 75008/01/13 SALINI 6.125% Aug-18 HY 40004/03/13 CRHID 3.125% Apr-23 IG 75002/21/13 ITCIT 6.125% Feb-18 HY 35012/19/12 TITKGA 8.75% Jan-17 HY 20010/11/12 ALGSCO 9% Oct-18 HY 27510/02/12 ENFP 3.625% Jan-23 IG 70009/28/12 BZUIM 6.25% Sep-18 HY 35009/07/12 HOLNVX 2.625% Sep-20 IG 50007/09/12 LGFP 5.875% Jul-19 HY 500


IBOXX EUR CONSTRUCTION & MATERIALS REDEMPTIONS

SGOF

P

SGOF

P

SGOF

P

ENFP

ENFP

CRHI

D

HOLN

VX

LGFP

CEME

X

LGFP

LGFP

LGFP

LGFP HE

IGR

HEIG

R

OBRA

S

CEME

X

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

14Ju

l-14

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr

-15

May

-15

Jun-

15Ju

l-15

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Red

empt

ions

in E

UR

mn

iBoxx IGiBoxx HY



Maturity Bond iBoxx Notional (EUR mn)12/04/13 LGFP 5.448% Dec-13 HY 50003/05/14 CEMEX 4.75% Mar-14 HY 43003/26/14 CEMEX 9% Mar-14 IG 65004/25/14 SGOFP 5% Apr-14 IG 50105/27/14 LGFP 8.875% May-14 HY 1,00005/28/14 CRHID 7.375% May-14 IG 75007/16/14 LGFP 5% Jul-14 HY 61207/28/14 SGOFP 8.25% Jul-14 IG 68610/29/14 ENFP 4.375% Oct-14 IG 81410/31/14 HEIGR 7.5% Oct-14 HY 1,00012/09/14 HOLNVX 4.375% Dec-14 IG 60004/28/15 OBRAS 7.375% Apr-15 HY 52405/28/15 LGFP 6.125% May-15 IG 750


IBOXX EUR B CONSTRUCTION & MATERIALS OUTSTANDING

0

10,000

20,000

30,000

40,000

50,000

60,000

1999 2001 2003 2005 2007 2009 2011 2013

Out

stan

ding

in E

UR

mn

SGOFP ENFP DGFP CRHID Other IGLGFP HEIGR OBRAS ITCIT Other HY



Issuer (Ticker) iBoxx Outstanding (EUR mn) BondsLafarge (LGFP) HY 6,690 11Saint-Gobain (SGOFP) IG 6,300 7Bouygues (ENFP) IG 5,600 7HeidelbergCement (HEIGR) HY 5,130 9Vinci (DGFP) IG 2,250 3CRH (CRHID) IG 2,000 3Obrascon (OBRAS) HY 1,249 3Italcementi (ITCIT) HY 1,239 2Holcim (HOLNVX) IG 1,100 2Voto-Votrantim (VOTORA) IG 750 1Buzzi Unicem (BZUIM) HY 700 2Others IG IG 500 1Others HY HY 2,223 7


<date>




iBoxx Construction & Materials Market Spreads

CONSTRUCTION & MATERIALS 5Y SENIOR CDS HISTORY

0

50

100

150

200

250

300

350


5Y C

DS

in b

p

0

50

100

150

200

250

300

350

400

450CRHID DGFP ENFP HEIGRHOLNVX LGFP SGOFP WIEAV (RS)



0.0 1.0 2.0 3.0 4.0 5.0

CRHID

WIEAV

ENFP

DGFP

SGOFP

HOLNVX

LGFP

HEIGR


CONSTRUCTION & MATERIALS CASH CURVES

HOLNVX 2.625% Sep-20

WURTH 1.75% May-20

WURTH 3.75% May-18

HOLNVX 4.375% Dec-14

SGOFP

LGFP

HEIGR

ENFPDGFP

CRHID

0

50

100

150

200

250

300

0 2 4 6 8 10 12mDur

ASW

in b

p



HO

LNV

X 4

.375

% D

ec-1

4

WU

RTH

1.7

5% M

ay-2

0

DG

FP 5

.25%

Apr

-18

DG

FP 4

.125

% F

eb-1

7

DG

FP 5

.625

% J

ul-2

2D

GFP

5%

May

-21

HO

LNV

X 2

.625

% S

ep-2

0S

GO

FP 4

.5%

Sep

-19

CR

HID

5%

Jan

-19

EN

FP 4

.5%

Feb

-22

EN

FP 3

.625

% J

an-2

3

SG

OFP

3.6

25%

Mar

-22

CR

HID

3.1

25%

Apr

-23

LGFP

6.1

25%

May

-15

HE

IGR

4%

Mar

-16

LGFP

5.3

75%

Jun

-17

HE

IGR

3.2

5% O

ct-2

0H

EIG

R 5

.625

% J

an-1

8H

EIG

R 8

% J

an-1

7LG

FP 8

.875

% N

ov-1

6BZ

UIM

5.1

25%

Dec

-16

WIE

AV

4%

Apr

-20

DG

FP 6

.25%

Jan

-00

LGFP

4.7

5% M

ar-2

0H

EIG

R 9

.5%

Dec

-18

HE

IGR

8.5

% O

ct-1

9LG

FP 5

.875

% J

ul-1

9LG

FP 4

.75%

Sep

-20

HE

IGR

7.5

% A

pr-2

0LG

FP 6

.25%

Apr

-18

BZU

IM 6

.25%

Sep

-18

LGFP

6.6

25%

Nov

-18

LGFP

6.7

5% D

ec-1

9LG

FP 8

.1%

Nov

-17 IT

CIT

6.1

25%

Feb

-18

ITC

IT 6

.625

% M

ar-2

0W

IEA

V 6

.5%

Jan

-00

HE

IGR

6.7

5% D

ec-1

5H

EIG

R 6

.5%

Aug

-15

LGFP

4.2

5% M

ar-1

6

DG

FP 4

% S

ep-1

8

SG

OFP

3.6

25%

Jun

-21

CR

HID

2.7

5% O

ct-2

0

DG

FP 4

.125

% A

pr-2

0E

NFP

3.6

41%

Oct

-19

DG

FP 7

.375

% M

ar-1

9S

GO

FP 4

% O

ct-1

8D

GFP

2.8

75%

Jan

-23

EN

FP 4

.25%

Jul

-20

SG

OFP

4.7

5% A

pr-1

7E

NFP

4%

Feb

-18

DG

FP 3

.375

% M

ar-2

0

EN

FP 6

.125

% J

ul-1

5E

NFP

4.7

5% M

ay-1

6S

GO

FP 3

.5%

Sep

-15

SG

OFP

4.8

75%

May

-16

DG

FP 5

.875

% O

ct-1

6W

UR

TH 3

.75%

May

-18

0

100

200

300

400

500

600

700

800

900

ASW

in b

p



CRH

VinciBouygues

HeidelbergCement

Holcim

Lafarge

Saint-Gobain

Wienerberger

0

50

100

150

200

250

300

350

6 7 8 9 10 11 12 13

5Y C

DS

in b

p

A A- BBB+ BBB BBB- BB+ BB



Wienerberger

Saint-Gobain

Lafarge

Holcim

HeidelbergCement

BouyguesVinci

CRH

0

50

100

150

200

250

300

350

2 2.5 3 3.5 4 4.5 5 5.5Leverage

5Y C

DS


<date>



Bouygues Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA3/BBB+/-- NEG/NEG/-- Stable Underweight iBoxx/--/iTraxx S18 EUR 8.9bn

Company Description: Founded in 1952 and based in Paris, France, Bouygues (www.bouygues.com) is an industrial conglomerate and is active in construction (a global player in the building, civil works, energy and services markets), property development (covering urban development, residential property, serviced residences, commercial property and retail park), road building (Colas), telecoms (as a mobile, fixed, TV and Internet telecommunications operator) and holds a minority stake of 29% in capital goods giant Alstom, as well as a 43% stake in TF1, the number-one TV channel in France. In FY12, the company generated 67% of its sales in France, 14% in Europe, 4% in Africa/Middle East, 9% Americas and 6% Asia Pacific. Bouygues employed around 133,800 people in FY12, of which some 77,000 in France, with the remainder in about 80 countries. An investment vehicle controlled by the Bouygues family holds around 27% of the outstanding voting rights.

Moody's (06/13): Moody's would consider stabilizing the outlook if there were evidence of a return to EBITDA growth at Bouygues Telecom and a sustainable recovery of credit metrics, in line with the rating agency's guidance for an A3 rating. Upward pressure on the rating could develop if the group's credit metrics were to improve such that its FFO/debt ratio were to move to the mid-30s in percentage terms and its FFO interest coverage were to increase above 7.0x, both on a sustainable basis. Moody's would consider downgrading Bouygues's rating if 1. the group were unable to restore its credit metrics so that they were in line with its A3 rating by the end of 2013 (in particular, FFO/debt between the mid-20s and the low 30s in percentage terms), which could occur if it did not succeed in at least stabilizing the EBITDA of its Bouygues Telecom division or if there were a material slowdown in the group's construction activities or 2. if the group were to make large debt-financed acquisitions or returns to shareholders. S&P (06/13): S&P's negative outlook reflects the risk of a one-notch downgrade within the next two years, if the group is unable to restore sufficiently stronger credit metrics for the rating. If the telecom division's EBITDA failed to stabilize this year, this could weaken the group's business risk profile. It would also prevent Bouygues' credit metrics from strengthening sufficiently. At this stage, S&P considers an adjusted ratio of FFO to debt of at least 35%, and FOCF to debt averaging in the mid-teens, to be adequate for the ratings. The agency could revise the outlook to stable if it sees a turnaround at the telecom division and the group's credit metrics improved to adequate levels on a sustainable basis.


Telecoms14%

Media7%

Construction32%

Roads40%

Property7%

EBITDA BY SEGMENT

0 200 400 600 800 1000 1200 1400 1600

Telecoms

Media

Construction

Roads

Property

in EUR mn

2010 2011 2012 LTM 9M13

Strengths/Opportunities – Business diversification into unrelated industries – Adherence to a prudent financial profile – Leading market positions in all segments – Sound liquidity and well-staggered maturity profile

Weaknesses/Threats – Competitive pressure requiring restructuring measures in the Telecom

business – Cyclicality in some of its businesses (Construction, Immobilier, TF1) – Concentration risk in the French market – Shareholder-friendly dividend policy

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010633974 ENFP 6.125% 03/07/15 --/BBB+/-- 1,000mn -- FR0010326975 ENFP 4.75% 24/05/16 --/BBB+/-- 600mn -- FR0010853226 ENFP 4% 12/02/18 --/BBB+/-- 500mn -- FR0010957662 ENFP 3.641% 29/10/19 --/BBB+/-- 1,000mn -- FR0010212852 ENFP 4.25% 22/07/20 --/BBB+/-- 1,000mn -- FR0011193515 ENFP 4.5% 09/02/22 A3/BBB+/-- 800mn -- FR0011332196 ENFP 3.625% 16/01/23 A3/BBB+/-- 700mn --

Covenants: none


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 23,496 22,926 21,035 24,220 26,588 29,750 32,841 31,206 31,253 32,823 24,786 33,843 24,334EBIT margin adj. 4.3% 5.4% 7.9% 7.6% 7.5% 7.7% 7.2% 6.4% 6.1% 6.0% 3.8% 3.7% 4.1%EBITDA rep. 2,275 2,519 2,660 2,944 3,067 3,426 3,565 3,216 3,183 3,268 1,955 2,582 1,937EBITDA margin adj. 10.0% 11.4% 13.1% 12.6% 11.9% 11.9% 11.3% 10.7% 10.6% 10.3% 8.3% 8.0% 8.4%Net income 829 626 904 1,024 1,218 1,593 1,686 1,456 1,263 1,237 633 728 611Funds from operations (FFO) 1,713 2,073 2,714 3,090 3,155 2,963 2,923 2,940 2,743 2,649 1,595 2,109 1,610Operating cash flow 2,151 2,312 2,749 2,579 3,137 3,719 2,741 3,399 2,691 2,593 668 2,151 457Free cash flow rep. (after Capex) 306 1,382 1,809 1,208 1,435 1,932 859 2,034 1,184 537 -1,112 -156 -523Dividend payment -229 -213 -258 -2,004 -437 -568 -685 -671 -674 -694 -607 -608 -591Retained cash flow (RCF) 1,484 1,860 2,456 1,086 2,718 2,395 2,238 2,269 2,069 1,955 988 1,501 1,019Acquisitions / disposals -1,022 -643 -187 901 -2,373 -1,832 -115 842 -171 56 18 261 -18Share buy back / issues -82 -248 0 -11 -164 465 -256 225 78 -1,377 -16 317 -74Total debt rep. 5,107 5,402 5,187 5,593 7,963 7,685 8,790 7,436 8,057 7,326 8,462 8,661 8,758Net debt rep. 3,201 2,786 1,879 2,337 4,158 4,261 4,867 2,501 2,450 3,873 5,814 4,140 5,567Adj. for pensions 188 267 287 287 397 327 387 351 400 383 383 493 493Adj. for operating leases and others 1,491 1,642 1,540 1,492 1,793 2,459 2,390 2,374 2,479 2,581 2,386 2,464 2,368Net debt adj. 4,880 4,695 3,706 4,116 6,348 7,047 7,644 5,226 5,329 6,838 8,584 7,097 8,428

DEBT LEVERAGE

0%

25%

50%

75%

100%

125%

150%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.5

1.0

1.5

2.0

2.5

3.0


DEBT MATURITY PROFILE (ESTIMATES) AS OF 9M13

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Availableliquidity asof 9M13

2013 2014 2015 2016 > 2016

in E

UR

mn


CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 2.8 3.6 6.9 6.9 7.0 6.8 6.1 4.4 4.4 5.2 -13.6 3.2 -14.9EBIT gross interest cover adj. 2.8 3.5 6.9 6.9 7.0 4.8 4.3 3.7 3.8 4.3 -33.8 2.7 -49.6EBITDA net interest cover adj. 6.5 7.6 11.5 11.3 11.2 10.5 9.6 7.4 7.6 8.8 -27.4 6.8 -31.0EBITDA gross interest cover adj. 6.5 7.5 11.5 11.3 11.2 7.3 6.8 6.3 6.6 7.3 -67.9 5.9 -103.3FFO adj. / net debt adj. 37.9% 46.9% 76.8% 78.3% 51.9% 43.5% 40.1% 58.9% 54.1% 40.8% 27.7% 31.2% 26.1%FFO adj. / total debt adj. 27.2% 30.1% 40.6% 43.7% 32.5% 29.3% 26.5% 30.3% 26.3% 27.1% 21.2% 19.1% 18.9%RCF adj. / net debt adj. 33.2% 42.3% 69.8% 29.6% 45.0% 35.5% 31.1% 46.0% 41.4% 30.7% 20.6% 22.6% 19.1%RCF adj. / total debt adj. 23.9% 27.2% 36.9% 16.5% 28.2% 23.9% 20.6% 23.7% 20.2% 20.4% 15.7% 13.8% 13.8%Net debt adj. / EBITDA adj. 2.1 1.8 1.3 1.4 2.0 2.0 2.1 1.6 1.6 2.0 2.9 2.6 3.1Total debt adj. / EBITDA adj. 2.9 2.8 2.5 2.4 3.2 2.9 3.1 3.0 3.3 3.0 3.8 4.3 4.3FFO adj. / net interest adj. 5.1 6.4 11.8 12.0 11.6 9.0 7.9 6.8 6.6 7.3 -22.2 5.6 -25.2FFO adj. / gross interest adj. 5.1 6.3 11.8 12.0 11.6 6.3 5.6 5.8 5.8 6.0 -55.1 4.8 -84.1Total debt adj. / total capital. adj. 51.1% 53.5% 57.6% 56.2% 60.1% 56.2% 57.0% 51.2% 50.8% 51.6% 53.9% 53.5% 53.9%Net debt adj. / net capital. adj. 42.9% 42.4% 41.8% 41.7% 48.5% 46.3% 46.7% 35.0% 33.5% 41.5% 47.2% 41.3% 45.9%Equity / total assets 25.7% 24.7% 20.8% 22.6% 21.8% 24.5% 24.7% 28.7% 29.8% 27.7% 26.3% 27.4% 27.2%


<date>



Buzzi Unicem Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/BB+/-- --/NEG/-- Improving Buy --/iBoxx HY/-- EUR 2.3bn

Company Description: Buzzi Unicem S.p.A, founded in 1907, is an Italian multi-regional building materials group focused on cement (64% of FY12 sales), aggregates and ready-mixed concrete (35%). The company owns 39 cement and grinding plants in 11 countries with a total annual capacity of 45 million tons. Its main markets are Italy (17% of FY12 revenues), the US (24%) and Germany (21%), followed by Mexico (9%), Russia (8%), Czech Republic/Slovakia (5%), Ukraine (5%), Poland (4%), Luxembourg (4%) and the Netherlands (3%). Buzzi Unicem's main shareholder is the founding family Buzzi with a 47% stake (58.6% ordinary shares).

S&P (10/13): S&P's negative outlook reflects the possibility that it would lower the ratings by one notch if the group's credit metrics do not recover steadily over the rest of 2013 and 2014 and stagnate below levels commensurate with the current ratings. The agency believes this could occur if the group were to experience further margin pressure, for example due to continued poor conditions in the Italian market or a worsening of economic or operating environment in the CIS and Central America. Downside pressure on the ratings could also arise if it felt that the group's liquidity profile had deteriorated such that it was assessed as "less than adequate."

SALES BY REGION

0

100

200

300

400

500

600

700

800

900

Italy CentralEurope

EasternEurope

USA Mexico Others

in E

UR

mn

LTM1H13 2012 2011 2010 2009

OPERATING PROFIT BY REGION

-200

-150

-100

-50

0

50

100

150

Italy CentralEurope

EasternEurope

USA Mexico

in E

UR

mn

LTM1H13 2012 2011 2010 2009

Strengths/Opportunities – Well entrenched positions in key markets – Presence in markets with more robust growth outlook such as the US and

Mexico – Solid cash-flow generation capabilities should allow for deleveraging in

FY14

Weaknesses/Threats – Cyclical, capital intensive and seasonal business – Relatively high exposure to Europe, including to Italy and the currently

struggling Eastern European markets – Subordination issue on the holding level with debt at the Dyckerhoff

subsidiary

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0472205300 BZUIM 5.125 12/16 --/BB+/-- 350 -- XS0835273235 BZUIM 6.25 09/18 --/BB+/-- 350 --

Covenants: Reported net debt to EBITDA of 3x in its USPP debt (quarterly tested)


<date>




EUR mn 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 2,951 3,205 3,496 3,520 2,672 2,648 2,787 1,351 2,813 1,274EBIT margin adj. 19.6% 22.8% 24.0% 19.9% 12.3% 0.2% 7.1% 7.4% 7.2% 4.2%EBITDA rep. 801 931 1,046 923 542 387 434 201 455 151EBITDA margin adj. 27.2% 29.2% 30.0% 26.3% 20.5% 14.8% 15.8% 15.8% 16.4% 13.1%Net income 295 418 537 471 171 -41 55 18 2 -27Funds from operations (FFO) 427 671 721 674 311 264 298 134 280 103Operating cash flow 433 606 601 535 281 267 275 82 281 52Free cash flow rep. (after Capex) 238 415 279 15 -102 -4 126 14 134 -29Dividend payment -67 -91 -100 -128 -96 -46 -16 -29 -47 -24Retained cash flow (RCF) 360 579 621 547 215 218 282 105 234 79Acquisitions / disposals 49 -18 -175 -299 13 17 46 15 -58 3Share buy back / issues 0 30 -3 -3 0 0 0 0 0 0Total debt rep. 1,525 1,228 1,265 1,546 1,811 1,637 1,729 1,677 1,744 1,657Net debt rep. 1,011 521 505 968 1,114 1,240 1,137 1,204 1,188 1,161Adj. for pensions 247 221 302 326 315 334 357 111 431 423Adj. for operating leases and others 29 32 37 41 59 60 63 63 64 64Net debt adj. 1,287 775 844 1,335 1,488 1,634 1,557 1,379 1,683 1,648

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5



0

200

400

600

800

1,000

1,200

1,400

Availableliquidity asof 30.6.13

2013 2014 2015 2016 >2016

Cash Undrawn, committed lines Main debt maturities

CREDIT METRICS

2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 53.5 -35.8 13.3 9.7 3.5 0.1 1.8 1.8 1.8 1.6EBIT gross interest cover adj. 5.2 7.4 9.7 7.5 3.5 0.1 2.0 2.4 1.8 1.9EBITDA net interest cover adj. 74.5 -45.8 16.6 12.9 5.8 3.5 4.1 3.6 4.1 4.3EBITDA gross interest cover adj. 7.3 9.4 12.2 9.9 5.8 3.6 4.4 4.9 4.1 5.0FFO adj. / net debt adj. 35.4% 90.5% 89.6% 53.5% 21.6% 16.9% 19.9% 24.0% 17.4% 15.8%FFO adj. / total debt adj. 25.3% 47.3% 47.1% 37.3% 14.7% 13.6% 14.4% 17.9% 13.1% 12.2%RCF adj. / net debt adj. 30.2% 78.7% 77.7% 43.9% 15.2% 14.0% 18.9% 21.9% 14.6% 13.3%RCF adj. / total debt adj. 21.5% 41.2% 40.9% 30.6% 10.3% 11.3% 13.7% 16.3% 11.0% 10.2%Net debt adj. / EBITDA adj. 1.6 0.8 0.8 1.4 2.7 4.2 3.5 3.0 3.6 4.0Total debt adj. / EBITDA adj. 2.2 1.6 1.5 2.1 4.0 5.2 4.9 4.0 4.9 5.2FFO adj. / net interest adj. 42.1 -34.4 11.9 9.9 3.4 2.5 2.9 2.6 2.6 2.7FFO adj. / gross interest adj. 4.1 7.1 8.8 7.6 3.4 2.6 3.1 3.5 2.6 3.1Total debt adj. / total capital. adj. 43.7% 37.0% 38.8% 41.5% 44.6% 42.1% 43.5% 37.3% 46.2% 45.7%Net debt adj. / net capital. adj. 35.6% 23.5% 25.0% 33.1% 35.4% 37.0% 35.8% 30.7% 39.2% 39.3%Equity / total assets 40.4% 45.1% 45.8% 45.4% 44.8% 47.9% 47.3% 48.6% 44.9% 45.1%


<date>



CRH Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB+/BBB STABLE/STABLE/STABLE Stable Overweight iBoxx/--/-- EUR 13.8bn

Company Description: CRH plc, headquartered in Dublin, Ireland, is a leading international building materials group active in 35 countries in Europe and North America. Its operations are organized along the three business areas Primary Material (cement, aggregates, RMC), Building Products (precast concrete products, roof tiles, clay bricks, pavers, etc.) and Distribution (DIY stores, specialist distribution). Each area comprises the two segments Americas and Europe, with a total of six business segments altogether. CRH pursues a two-pronged growth strategy, focusing mainly on bolt-on acquisitions augmented by occasional larger transactions as well as capacity growth in existing operations. Most of the company's EBITDA is still generated in developed-world economies with Western Europe and North America accounting for about 85% of EBITDA and the emerging markets for 15%. The company is listed in Dublin, London and New York, with its shares being widely spread. It employs roughly 76,000 people.

Moody's (09/13): Moody's stable outlook assigned to the ratings reflects its expectation that CRH will focus on restoring credit metrics in line with its expectations over the next 18 months. Given the currently weak metrics for the rating category, negative pressure would build rapidly if leverage ratios do not improve gradually over the next 18 months to reach a level in line with the agency's requirement by FYE 2014 (RCF/net debt of 20% would be required for the current rating, LTM1H13: 15%). S&P (05/13): S&P anticipates that its adjusted FFO to debt will continue to be about 30% over the next two years (LTM1H13: 22%), recovering gradually to the mid-30s thereafter. The stable outlook also reflects its belief that CRH will likely continue to generate healthy free cash flow, and takes into consideration an ongoing difficult trading environment and potentially sizable acquisition activity. Downward rating pressure could build if credit metrics were to drop to below the levels it associates with the upper end of a "significant" financial risk profile and if it were to consider them unlikely to recover in the short term. This could be the case if key markets such as Central Europe were to deteriorate at a higher rate than it currently envisages, or if CRH were to spend more than EUR 1bn in acquisitions in a short period, absent an improvement in end-markets.


Products Europe13%

DistributionEurope

22%

Materials Europe13%

Materials NorthAmerica

27%

Products NorthAmerica

16%

DistributionNorth America

9%

EBITDA BY SEGMENT

0 100 200 300 400 500 600

Materials Europe

Materials NorthAmerica

Products Europe

Products NorthAmerica

Distribution Europe

Distribution NorthAmerica

in EUR mn

LTM 1H13 2012 2011 2010

Strengths/Opportunities – Strong market positions in the building materials industry (e.g. top 3

building materials distributor in Western Europe; the third-largest producer of aggregates and the largest producer of asphalt and concrete products in North America)

– Large scale and extensive product and end-market diversity – Good track record of healthy free cash flow generation – Significant revenues from less cyclical renovation – History of tapping equity markets to strengthen the capital base

Weaknesses/Threats – Aggressive M&A-driven growth strategy – Cyclicality and heavy energy and capital intensity of the industry – Low presence in the emerging markets – Lower profitability in the distribution segment – Relatively high exposure to the currently challenging European

construction market

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0736488585 CRHID 5% 25/01/19 Baa2/BBB+/BBB 500mn -- XS0909369489 CRHID 3.125% 03/04/23 Baa2/BBB+/-- 750mn --

Covenants: EBITDA net interest coverage of at least 4.5x and minimum net worth of EUR 5.1bn, tested half-yearly, in some of the company's private placements and available lines.


<date>




EUR mn 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 14,449 18,737 20,992 20,887 17,373 17,173 18,081 8,271 18,084 8,007EBIT margin adj. 10.0% 9.8% 10.3% 9.3% 6.2% 5.1% 5.5% 2.8% 5.2% 1.4%EBITDA rep. 1,957 2,456 2,860 2,665 1,829 1,670 1,711 719 1,793 415EBITDA margin adj. 13.9% 13.5% 14.0% 13.3% 11.1% 10.4% 9.9% 7.2% 9.4% 5.8%Net income 1,006 1,224 1,428 1,272 598 439 597 98 540 -57Funds from operations (FFO) 1,599 1,928 2,186 2,047 1,438 1,335 1,289 329 1,094 224Operating cash flow 1,450 1,796 2,447 1,990 2,221 1,477 1,078 -298 1,036 -433Free cash flow rep. (after Capex) 798 963 1,419 951 1,689 1,011 502 -587 492 -720Dividend payment -174 -210 -255 -352 -245 -304 -319 -279 -366 -286Retained cash flow (RCF) 1,426 1,718 1,931 1,695 1,193 1,031 970 50 728 -62Acquisitions / disposals -1,057 -1,820 -1,849 -799 -352 -344 -121 451 276 -271Share buybacks / issues 0 -16 5 -389 1,295 45 6 4 16 5Total debt rep. 5,111 5,996 6,498 7,298 5,324 5,361 4,982 5,127 4,808 5,482Net debt rep. 3,590 4,519 5,165 6,361 3,881 3,580 3,634 3,974 3,009 4,227Adj. for pensions 451 261 95 414 454 474 664 778 653 650Adj. for operating leases and others 512 671 775 861 749 924 919 919 985 985Net debt adj. 4,552 5,451 6,035 7,636 5,084 4,978 5,217 5,671 4,647 5,862

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0FFO adj. / net debt adj. Net debt adj. / EBITDA adj.


0

500

1,000

1,500

2,000

2,500

3,000

3,500

Ava

ilabl

eliq

uidi

ty30

.06.

13

2013

2014

2015

2016

2017

2018

+

in E

UR

mn


CREDIT METRICS



<date>



HeidelbergCement Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/--/BB+ STABLE/--/STABLE Improving Buy --/iBoxx HY/iTraxx S18 EUR 10.5bn

Company Description: HeidelbergCement AG (HC) is the world's third largest cement producer and, following the acquisition of UK-based Hanson PLC, it is also the world's leading producer of aggregates. In FY12, the company generated around 29% of its sales in Western Northern Europe, 24% in North America, 10% in Eastern Europe Central Asia, 24% in Asia Pacific and around 8% in Africa. The company's shares are listed on the Frankfurt Stock Exchange. Following the capital increase in 2009, the free float now stands just shy to 75% with Ludwig Merckle (25.1%) remaining the largest shareholder.

Moody's (04/13): Moody's stable outlook assigned to the ratings incorporates the expectation that 1. HC will continue to focus on cost-cutting and deleveraging to keep debt/EBITDA below 4.0x and RCF/net debt to above 15%, 2. the company will continue to maintain a conservative dividend payout to preserve cash flows generated for debt reduction and 3. that the company will continue to benefit from supportive market conditions in its key geographies, which will support the group's efforts in further reducing leverage to achieve a capital structure in line with an investment grade rating over time. Positive rating pressure would build on the current Ba1 rating if debt/EBITDA were to drop sustainably well below 3.5x (FY12: 3.9x) and RCF/net debt were to increase above 20% (16%) on a sustainable basis. A rating upgrade to Baa3 would also have to reflect the ability and willingness of HC to maintain credit metrics in line with an investment grade rating for an extended period of time. Fitch (07/13): Higher and faster deleveraging, with FFO gross leverage declining below 3.5x, while maintaining positive FCF on a sustained basis, could lead to a positive rating action. A deterioration in trading activity affecting OCF generation and resulting in FFO gross leverage in excess of 4.5x and in negative FCF on a sustainable basis could lead to a negative rating action.

SALES BY REGION

0

1,000

2,000

3,000

4,000

5,000

6,000

NorthAmerica

WesternNorthernEurope

EasternEurope-

Central Asia

Asia-Pacific Africa-Med.Basin

in E

UR

mn

FY08 FY09 FY10 FY11 FY12 LTM9M13

EBITDA BY REGION

0

200

400

600

800

1,000

1,200

NorthAmerica

WesternNorthernEurope

EasternEurope-

Central Asia

Asia-Pacific Africa-Med.Basin

in E

UR

mn

FY08 FY09 FY10 FY11 FY12 LTM9M13

Strengths/Opportunities – Strong market position in cement and good degree of regional

diversification – Strong focus on cost and efficiency – Healthy cash flow generation capabilities – High level of vertical integration into aggregates and concrete products – Currently more favorable geographical set-up than its peers

Weaknesses/Threats – Cyclical, capital-intensive and seasonal business – Pressure on margins in the company's main market, Indonesia – Deleveraging stalled in recent quarters, delaying the targeted return to an

investment grade rating into 2015

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0458230082 HEIGR 7.5% 31/10/14 Ba2/--/BB+ 1,000mn -- XS0478802548 HEIGR 6.5% 03/08/15 Ba2/--/BB+ 650mn -- XS0520759803 HEIGR 6.75% 15/12/15 Ba2/--/BB+ 650mn -- XS0755521142 HEIGR 4.0% 03/08/16 Ba2/--/BB+ 300mn -- XS0458230322 HEIGR 8% 31/01/17 Ba2/--/BB+ 1,000mn -- DE000A0TKUU3 HEIGR 5.625% 04/01/18 Ba2/--/BB+ 480mn -- XS0686703736 HEIGR 9.5% 15/12/18 Ba2/--/BB+ 500mn -- XS0458685913 HEIGR 8.5% 31/10/19 Ba2/--/BB+ 500mn -- XS0478803355 HEIGR 7.5% 03/04/20 Ba2/--/BB+ 750mn -- XS0985874543 HEIGR 3.25% 10/21/20 Ba2/--/BB+ 300mn --

Covenants: undisclosed financial covenants in syndicated credit facility


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 6,560 6,344 6,929 7,816 9,255 10,805 14,285 10,883 11,772 12,940 10,880 14,071 10,646EBIT margin adj. 8.2% 6.8% 11.3% 13.7% 16.4% 16.9% 11.9% 7.1% 13.0% 12.3% 10.5% 12.4% 11.3%EBITDA rep. 1,147 1,024 1,219 1,506 1,975 3,235 2,933 2,098 2,137 2,175 1,667 2,068 1,995EBITDA margin adj. 18.1% 16.8% 18.3% 20.0% 21.9% 22.4% 20.0% 18.9% 19.9% 18.8% 16.2% 18.5% 17.1%Net income 262 133 -333 471 1,026 1,946 1,920 168 511 534 403 545 912Funds from operations (FFO) 953 790 1,009 1,047 1,538 1,603 1,693 576 1,199 1,287 1,039 1,338 601Operating cash flow 945 660 937 795 1,259 1,911 1,523 1,134 1,144 1,332 587 1,513 260Free cash flow rep. (after Capex) 488 274 471 247 697 872 423 338 410 458 99 682 -298Dividend payment -87 -17 -125 -90 -168 -177 -194 -50 -79 -107 -130 -134 -173Retained cash flow (RCF) 866 773 885 957 1,370 1,426 1,500 527 1,120 1,180 909 1,205 428Acquisitions / disposals 59 96 158 -199 -103 -9,602 2,219 497 146 128 136 266 -349Share buy back / issues -1 392 0 292 0 527 513 2,255 0 0 0 3 3Total debt rep. 4,911 4,290 4,054 3,910 3,421 15,567 12,633 9,310 9,147 9,801 9,041 8,573 9,281Net debt rep. 4,305 3,603 3,668 3,545 3,187 14,694 11,616 8,408 8,242 7,868 7,805 7,092 8,050Adj. for pensions 581 564 590 767 747 648 737 872 938 919 1,144 1,115 939Adj. for operating leases and others 103 114 123 146 160 340 414 418 455 579 632 784 623Net debt adj. 4,990 4,282 4,381 4,458 4,094 15,682 12,767 9,697 9,635 9,366 9,581 8,991 9,612

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0

1

2

3

4

5

6

7

8



0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Liquidityas of3Q13

2013 2014 2015 2016 2017 >2017

EU

R m

n

Cash Undrawn credit facilities Financial debt

CREDIT METRICS



<date>



Holcim Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB/BBB STABLE/STABLE/STABLE Stable Marketweight iBoxx/--/iTraxx S18 CHF 21.5bn

Company Description: Jona, Switzerland-based Holcim (www.holcim.com) is one of the world's largest cement producers and also active in the production of aggregates. The company operates in around 70 countries with a focus on emerging markets like Latin America, the Middle East and Asia. In FY12, it operated plants with 217.5mn tons of cement capacity, 1.286 ready mixed concrete, 470 aggregates and 99 asphalt plants. From a geographic perspective, the company generated 26% of its sales in Europe, 15% in North America, 16% in Latin America, 4% in Africa Middle East and 39% in Asia in FY12. Holcim employs some 80,000 people. Thomas Schmidheiny is Holcim's largest shareholder with a stake of 20.1%, followed by Eurocement (10.8%), while the remainder is free float.

Moody's (09/13): Moody's stable outlook assigned to the rating reflects its expectation that Holcim will maintain stable credit metrics in 2013 and beyond and will continue to benefit from broadly supportive market conditions. An improvement in FFO generated and/or further reduction in debt that would result in sustainable metrics of RCF/Net debt at or above the mid-twenties, and a reduction of the Debt/EBITDA ratio to below 3.0x with continued stable margins on a sustainable basis could put upward pressure on the rating. Moody's would consider downgrading Holcim if RCF/net debt would drop below 20% on a sustainable basis. S&P (10/13): The stable outlook on Holcim Ltd. mainly reflects S&P's view that the group will continue to generate resilient CF and a broadly stable operating EBITDA margin in 2013 and 2014, despite somewhat unsupportive industry conditions. Furthermore, S&P considers that management will continue its efforts to protect credit metrics in the coming quarters. As a result, the agency anticipates that the group's adjusted FFO-to-debt ratio will be close to 25% by year-end 2013, which is commensurate with the ratings. S&P considers a negative rating action on Holcim could occur if its main credit metrics were to deteriorate. This could follow continued weakness in some of its large markets and substantial erosion of more than 100 basis points in the EBITDA margin. Overall, however, the chief downside risk for the ratings would be a shift to more aggressive financial policy actions. Such actions could include increased expansion capital expenditures, share repurchases, or dividend payouts. Generally, it believes that Holcim's financial headroom for the ratings is thin.

SALES BY SEGMENT

0

2,000

4,000

6,000

8,000

10,000

12,000

Asia Pacific Europe Latin America NorthAmerica

Africa MiddleEast

in C

HF

mn

2008 2009 2010 2011 2012 LTM9M13

OPERATING EBITDA BY REGION

0

500

1,000

1,500

2,000

2,500

Asia Pacific Latin America Europe North America Africa MiddleEast

in C

HF

mn

2008 2009 2010 2011 2012 LTM9M13

Strengths/Opportunities – Excellent mix between mature and growth markets – Sound operating profitability – High operating free cash-flow generation – Sensible financial policy with proven access to equity capital markets – Positive impacts on profitability from cost saving measures

Weaknesses/Threats – Currently weak market conditions in one of its key markets, i.e. India – Degree of currency risk, albeit largely translational – Lack of full ownership of Indian subsidiaries' cash flows – Cyclical and capital intensity of the business

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0207037507 HOLNVX 4.375% 09/12/14 Baa2/BBB/BBB 600mn -- XS0825829590 HOLNVX 2.625% 07/09/20 Baa2/BBB/BBB 500mn --

Covenants: none


<date>




CHF mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 13,010 12,600 13,215 18,468 23,969 27,052 25,157 21,132 21,653 20,744 15,908 21,544 14,941EBIT margin adj. 14.5% 15.6% 16.3% 18.3% 19.1% 19.0% 13.7% 14.6% 12.5% 10.0% 11.8% 9.9% 12.5%EBITDA rep. 3,399 3,383 3,562 4,621 6,183 8,172 5,352 4,836 4,520 4,027 3,076 4,190 2,951EBITDA margin adj. 25.9% 26.5% 27.2% 25.4% 26.2% 26.1% 21.6% 23.3% 21.2% 19.8% 19.7% 20.0% 20.2%Net income 797 932 1,120 1,789 2,719 4,545 2,226 1,958 1,621 682 1,093 1,026 1,277Funds from operations (FFO) 2,524 2,552 2,741 3,351 4,642 5,415 4,306 3,729 3,702 3,012 2,502 3,236 2,291Operating cash flow 2,388 2,619 2,622 3,405 4,423 5,323 3,703 3,888 3,659 2,753 1,088 2,682 1,172Free cash flow rep. (after Capex) 1,136 1,327 1,416 1,787 1,876 1,694 -815 1,381 1,838 977 173 942 -239Dividend payment -358 -368 -392 -558 -703 -872 -1,105 -192 -719 -714 -523 -544 -568Retained cash flow (RCF) 2,166 2,184 2,349 2,793 3,939 4,543 3,201 3,537 2,983 2,298 1,979 2,692 1,723Acquisitions / disposals -245 -442 -1,196 -4,721 -1,834 341 -957 -1,441 169 -357 10 291 535Share buy back / issues -11 30 -38 456 1,115 -31 -349 1,970 0 11 304 309 3Total debt rep. 11,662 10,817 10,616 16,062 16,060 16,245 18,652 18,307 14,749 14,495 14,420 13,445 13,395Net debt rep. 8,857 8,299 6,846 12,693 12,837 12,873 15,042 13,800 11,333 11,545 11,578 10,325 10,280Adj. for pensions 439 445 411 690 568 356 410 529 463 608 604 859 657Adj. for operating leases and others 325 368 247 533 827 717 957 1,191 1,089 1,040 1,040 1,093 1,093Net debt adj. 9,621 9,113 7,504 13,917 14,232 13,947 16,409 15,520 12,885 13,193 13,222 12,277 12,030

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

40%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Availableliquidity

as of30.09.13

<1y 1-2y 2-3y 3-4y 4-5y >5y

in C

HF

mn


CREDIT METRICS



<date>



Italcementi Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa3/BB+/-- STABLE/NEG/-- Stable Hold --/iBoxx HY/-- EUR 1.5bn

Company Description: Founded in 1864, Italy-based Italcementi (www.italcementigroup.com) is the world's fifth largest cement producer operating in 22 countries. Its 53 cement plants have an annual capacity of 65mmt. In addition, the company operates 449 concrete plants and 115 quarries. Since 1992, Italcementi is the majority owner of French Ciments Francais (CF), which comprises the international arm of the group. The group enjoys leading market positions in France/Belgium (34% of FY12 sales), Italy (18%), Egypt (13%) and Morocco (7%). All international activities are consolidated at the CF level, while only the Italian operations and some other smaller activities (trading) are consolidated at the Italcementi level. The group is one of Italy’s 10 largest industrial companies and a member of the FTSE/MIB Italian Stock Index. The family-controlled holding company Italmobiliare owns 60% of Italcementi's ordinary shares. The company has about 19,000 employees.

Moody's (10/13): Moody's stable outlook reflects the fact that the group's credit metrics stabilized at a low level in H1 2013, supported by its continued focus on CF generation. Italcementi could achieve a higher rating if the company were able to improve on a sustainable basis RCF/net debt towards 15% and debt/EBITDA to 4.5x with visibility of a continued improving trend. Although not expected at this point in time given the overall stabilization of Italcementi's markets, a deterioration in the group's credit profile, with debt/EBITDA moving towards 6.0x and RCF/net debt sustainably below 10%, could lead to negative pressure on the current rating. In addition, weakening covenant headroom, which would put Italcementi's access to liquidity at risk, would be a negative rating driver. S&P (10/13): The negative outlook reflects the possibility that S&P could lower the ratings by one notch if the Italcementi group's credit metrics did not recover steadily throughout 2014 and stagnated below its base-case scenario. The agency believes this could occur owing to persistently weak market conditions and political uncertainties in Egypt. This could also occur if volumes in the group's Italian operations declined by more than the agency currently anticipates or if prices declined due to competition. S&P could revise the outlook to stable if the group's credit metrics recovered over the second half of 2013 and in 2014 on a sustainable basis, toward levels it considers commensurate with the 'BB+' rating. These metrics include S&P's adjusted debt to EBITDA of less than 4.0x and FFO to debt of more than 20%. Such an improvement could result from a more substantial recovery of the group's main markets than forecasted, particularly in Egypt and Italy.

SALES BY REGION

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Central WesternEurope

North America EmergingEurope, North

Africa and MiddleEast

Asia

in E

UR

mn

2008 2009 2010 2011 2012 LTM9M13

REBITDA BY REGION

0

100

200

300

400

500

600

Central WesternEurope

North America Emerging Europe,North Africa and

Middle East

Asia

in E

UR

mn

2008 2009 2010 2011 2012 LTM9M13

Strengths/Opportunities – Strong regional positions in moderately to highly consolidated markets – High barriers to entry – Generally healthy cash generation – Consolidation of future financing at parent level

Weaknesses/Threats – Cyclical, seasonal, and highly capital- and energy-intensive industry – Relatively high exposure to currently weak markets such as Italy – Lack of full control over partially-owned subsidiaries' cash flows – High dividend payments to subsidiaries

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0893201433 ITCIT 6.125% 21/02/18 Ba3/BB+/-- 350mn -- XS0496716282 ITCIT 6.625 19/03/2020 Ba3/BB+/-- 739mn -- FR0010454090 CMFP 4.75% 04/04/17 Ba2/BB+/-- 500mn Issued on Ciments Francais level

Covenants: Leverage covenant of 3.75x and interest coverage ratio with levels unknown (both tested half-yearly)


<date>




EUR mn 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 5,962 6,183 5,948 5,008 4,779 4,790 2,356 4,577 2,178EBIT margin adj. 17.2% 15.7% 10.4% 9.1% 8.0% 2.9% 4.8% -2.9% 4.0%EBITDA rep. 1,434 1,405 1,103 956 839 738 349 615 294EBITDA margin adj. 24.3% 22.9% 18.7% 19.3% 17.8% 15.7% 15.1% 13.9% 13.9%Net income 651 613 277 215 197 91 1 -362 -43Funds from operations (FFO) 1,066 918 796 722 621 439 168 384 192Operating cash flow 890 935 642 1,102 755 418 41 496 171Free cash flow rep. (after Capex) 387 393 -93 402 237 18 -137 127 32Dividend payment -209 -176 -171 -125 -130 -143 -100 -120 -53Retained cash flow (RCF) 857 742 625 597 491 296 68 264 140Acquisitions / disposals -201 -361 -130 19 119 181 28 74 15Share buy back / issues 5 -10 0 0 0 0 0 0 0Total debt rep. 2,597 2,854 3,286 3,165 3,084 2,832 2,811 2,743 2,677Net debt rep. 2,277 2,480 2,922 2,618 2,509 2,219 2,425 2,164 2,128Adj. for pensions 262 246 192 182 192 213 211 275 266Adj. for operating leases and others 32 155 145 133 119 138 138 193 264Net debt adj. 2,572 2,881 3,259 2,933 2,820 2,571 2,774 2,633 2,658

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

2006 2007 2008 2009 2010 2011 1H12 2012 1H130.0

1.0

2.0

3.0

4.0



0

500

1,000

1,500

2,000

2,500

Liquidityas of

30.9.13

2013 2014 2015 2016 2017 Beyond

in E

UR

mn

Current financial assets Undrawn, committed lines Financial debt

CREDIT METRICS

2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 10.2 8.7 7.9 4.6 4.0 1.7 0.8 -1.6 -1.9EBIT gross interest cover adj. 7.0 5.9 3.4 3.4 2.4 0.9 0.5 -0.9 -1.1EBITDA net interest cover adj. 14.4 12.7 14.3 9.9 9.0 8.9 6.4 7.6 7.0EBITDA gross interest cover adj. 9.9 8.6 6.2 7.3 5.3 4.7 4.4 4.5 3.9FFO adj. / net debt adj. 41.4% 31.9% 24.4% 24.6% 22.0% 17.1% 13.5% 14.6% 15.4%FFO adj. / total debt adj. 36.9% 28.2% 22.0% 20.7% 18.3% 13.8% 11.9% 12.0% 12.7%RCF adj. / net debt adj. 33.3% 25.8% 19.2% 20.4% 17.4% 11.5% 9.6% 10.0% 12.6%RCF adj. / total debt adj. 29.6% 22.8% 17.2% 17.2% 14.5% 9.3% 8.4% 8.2% 10.4%Net debt adj. / EBITDA adj. 1.8 2.0 2.9 3.0 3.3 3.4 3.9 4.2 4.6Total debt adj. / EBITDA adj. 2.0 2.3 3.3 3.6 4.0 4.2 4.5 5.1 5.5FFO adj. / net interest adj. 10.6 8.2 10.2 7.4 6.6 5.2 3.4 4.6 5.0FFO adj. / gross interest adj. 7.3 5.6 4.4 5.5 3.9 2.8 2.3 2.7 2.7Total debt adj. / total capital. adj. 37.9% 40.3% 44.1% 42.6% 40.5% 39.5% 39.8% 43.2% 44.6%Net debt adj. / net capital. adj. 35.2% 37.4% 41.5% 38.5% 36.2% 34.5% 36.7% 38.5% 40.0%Equity / total assets 49.5% 48.7% 46.2% 47.8% 49.8% 50.3% 50.4% 46.8% 46.3%


<date>



Lafarge Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BB+/BB+ NEG/STABLE/STABLE Stable Hold --/iBoxx HY/iTraxx S18 EUR 15.2bn

Company Description: Paris-based Lafarge is one of the world's leading building materials producers. The company currently employs around 65,000 people and operates in 64 countries. Lafarge's cement capacity of 217 mmt ranks it as one of the leaders in the industry. Following the disposal of most of its gypsum activities, Lafarge is organized along two business divisions: Cement (66% of group sales in 2012) and Aggregates & Concrete (No. 2 worldwide in Aggregates and No. 4 in Concrete, 34% of sales). By regions, the company generated 21% of sales in North America, 20% in Western Europe, 8% in Central and Eastern Europe, 27% in Middle East and Africa, 6% in Latin America and 17% in Asia. Its main shareholders are Groupe Bruxelles Lambert with a shareholding of 21% (voting rights) and Nassef Sawiris, the previous owner of Orascom, with 14%. The remainder of Lafarge's shares is widely spread among institutional and private investors.

Moody's (08/13): The negative outlook reflects the fact that Lafarge has failed to materially improve its leverage metrics since Moody's downgraded the group to non-investment grade in August 2011. In light of the still challenging and volatile operating environment, coupled with the significantly increased dividend payout in 2013, it will be challenging for Lafarge to improve its credit metrics in the next three to four quarters to levels that are more in line with a Ba1 rating. Lafarge could achieve an investment-grade rating if the company were able to improve RCF/net debt towards 20% and net debt/EBITDA to below 3.5x. Failure to improve RCF/net debt above 10% in 2013 and towards 15% at the end of 2014 would lead to negative pressure on the ratings. S&P (11/13): The stable outlook reflects S&P's anticipation that given Lafarge's continued financial discipline and focus on net debt reduction, the group's credit metrics will improve further in 2014 to levels it considers more commensurate with the 'BB+' rating. These levels include a ratio of adjusted FFO to debt in the high teens. S&P could take a positive rating action if Lafarge were able to post adjusted FFO to debt of about 20% on a sustainable basis and showed its willingness to maintain the ratio at that level. In light of the group's weak trading performance over past quarters, this would likely require a reduction of unadjusted net debt to well below EUR 9 bn.

SALES BY SEGMENT

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

WesternEurope

NorthAmerica

Middle Eastand Africa

Central andEasternEurope

LatinAmerica

Asia

in E

UR

mn

2010 2011 2012 LTM9M13


0

200

400

600

800

1,000

1,200

WesternEurope

NorthAmerica

Middle Eastand Africa

Central andEasternEurope

LatinAmerica

Asia

in E

UR

mn

2010 2011 2012 LTM9M13

Strengths/Opportunities – Broad regional diversification and strong exposure to emerging markets – Solid operating free cash-flow generation capability – Continuing focus on debt reduction – Benefits from ongoing cost cutting measures

Weaknesses/Threats – Cyclical and highly seasonal business – Political risk in some emerging markets, in particular in the Middle East – Weak credit metrics for the rating

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0430328525 LGFP 8.875% 27/05/14 Ba1/BB+/BB+ 1,000mn Change of control, Coupon step-down XS0196630270 LGFP 5% 16/07/14 Ba1/BB+/BB+ 612mn -- XS0365901734 LGFP 6.125% 28/05/15 Ba1/BB+/BB+ 750mn Change of control XS0235605853 LGFP 4.25% 23/03/16 Ba1/BB+/BB+ 500mn -- XS0434974217 LGFP 8.875% 24/11/16 Ba1/BB+/BB+ 750mn Change of control, Coupon step-down XS0307005545 LGFP 5.375% 26/06/17 Ba1/BB+/BB+ 500mn Change of control XS0501648371 LGFP 6.25% 13/04/18 Ba1/BB+/BB+ 500mn Change of control, Coupon step-down XS0562783034 LGFP 6.625% 29/11/18 Ba1/BB+/BB+ 1,000mn Change of control, Coupon step-down XS0801954867 LGFP 5.875% 09/07/19 Ba1/BB+/BB+ 500mn Change of control XS0215159731 LGFP 4.75% 23/03/20 Ba1/BB+/BB+ 500mn -- XS0975113498 LGFP 4.75% 30/09/20 Ba1/BB+/BB+ 750mn Change of control

Covenants: We note that the syndicated facility is subject to one covenant, which is an optional exit mechanism, on an individual basis, which would be triggered if the consolidated net debt/EBITDA ratio (on a reported basis) is higher than 4.75x and is not defined as an event of default.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 13,658 12,976 14,490 16,909 17,614 19,033 15,884 14,834 15,284 12,007 15,816 11,484EBIT margin adj. 13.9% 16.1% 16.1% 16.6% 20.2% 19.3% 16.6% 15.4% 12.1% 13.1% 13.2% 13.6%EBITDA rep. 2,942 2,745 3,030 3,610 4,243 4,717 3,537 3,381 3,109 2,375 3,142 2,261EBITDA margin adj. 21.1% 22.2% 21.9% 22.1% 25.6% 26.4% 24.7% 23.8% 21.4% 20.9% 21.0% 20.8%Net income 728 1,248 1,327 1,593 2,038 1,939 1,046 1,114 736 432 554 515Funds from operations (FFO) 1,799 2,128 2,220 2,823 2,781 3,155 2,177 2,075 1,577 1,323 1,580 1,070Operating cash flow 2,089 1,877 1,886 2,566 2,702 3,001 3,206 2,436 1,597 393 1,276 579Free cash flow rep. (after Capex) 1,225 869 573 927 489 115 1,561 1,164 526 -100 501 -168Dividend payment -395 -504 -545 -617 -652 -1,051 -536 -848 -487 -269 -299 -481Retained cash flow (RCF) 1,404 1,624 1,675 2,206 2,129 2,104 1,641 1,227 1,090 1,054 1,281 589Acquisitions / disposals 191 145 -264 -2,995 1,663 -5,757 686 317 1,909 83 305 1,044Share buy back / issues 1,438 257 391 222 -604 110 1,534 41 18 18 11 3Total debt rep. 8,695 8,645 9,005 11,085 10,109 18,621 15,977 17,280 15,206 15,669 14,084 14,467Net debt rep. 7,061 7,095 7,270 9,930 8,680 17,030 13,757 13,986 12,035 12,247 11,351 10,931Adj. for pensions 739 1,355 1,374 1,026 803 1,010 1,178 1,247 1,462 1,611 1,594 1,386Adj. for operating leases and others 1,061 400 645 619 698 687 687 687 812 812 773 796Net debt adj. 8,861 8,850 9,289 11,575 10,181 18,727 15,622 15,920 14,309 14,670 13,718 13,113

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0%

5%

10%

15%

20%

25%

30%FFO adj. / net debt adj. RCF adj. / net debt adj. (RS)


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Liquidity asof 30.09.13

Reportedshort-term

debt

2013 2014 2015 >=2016

in E

UR

mn

Cash Undrawn, committed lines Bond maturities

CREDIT METRICS



<date>



Saint-Gobain Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/BBB/BBB+ NEG/NEG/STABLE Stable Overweight iBoxx/--/iTraxx S18 EUR 21.7bn

Company Description: Compagnie de Saint Gobain (www.saint-gobain.com), headquartered in Paris, France, is a leading building materials manufacturer and distributor. Most of the company's products are intermediate goods for resale, installation or further processing. The group is organized along the four business segments Innovative Materials (22% of total FY12 sales), Construction Products (25%), Building Distribution (44%) and Packaging (9%), with the North American business of the latter currently being sold. Looking at the segments: Innovative Materials – includes: i) Flat Glass (manufacturing of flat glass, processing and sale of glass products for the building and transportation industries; supply of glass products to the solar energy sector), and ii) High Performance Materials (includes mineral ceramics, performance polymers, glass fabrics); Construction Products - includes i) Interior Solutions (provider of gypsum and insulation-based interior solutions for all building types), and ii) Exterior Solutions (delivery of exterior solutions (brands) including Industrial Mortars, Pipe and Exterior Fittings); Building Distribution (house fittings in kitchens, bathrooms, doors and windows along with wall and floor coverings, plumbing, heating and sanitary ware solutions); and Packaging (production of glass containers, bottles and jars). In FY12, Saint Gobain generated 27% of its sales in France, 40% in Western Europe, 14% in North America and 19% in Asia & emerging markets. By market, 30% of sales involve construction, 46% renovation and 24% other markets. The company's shares are widely held, with Wendel SA (--/BB+s/--), the French investment company, being the major shareholder with a share of about 17%. Saint Gobain employs around 193,000 people.

Moody's (08/13): According to Moody's, Saint-Gobain remains weakly positioned within the Baa2 rating category with LTM June 2013 RCF/Net debt of 16.8% versus expectations of around 20% for the current rating category. Credit metrics should continue to recover in 2013 to a level more commensurate with the agency's expectations for the current rating category as a result of lower working capital consumption and pension deficit as well as a modest improvement in the operating performance in 2H13. The negative outlook assigned to the rating reflects the weak credit metrics, which could weaken further if Saint-Gobain has to pay the full cartel fine in cash, for the current rating category as well as macroeconomic uncertainties, which might make it more difficult for Saint-Gobain to restore credit metrics in line with expectations for a Baa2 rating within an acceptable time frame. T S&P (10/13): S&P's negative outlook on Saint-Gobain reflects the view that the company may find it tough to maintain an adjusted funds from operations (FFO)-to-debt ratio of close to 25% in 2014, given the potential payment of the European glass fine next year, and to a lesser extent, the still subdued recovery in its markets. S&P might lower the ratings if the company paid the European glass fine next year, as S&P believes its forecast credit metrics cannot accommodate the cash out in the absence of offsetting measures. S&P could also consider a downgrade if trading performance deteriorated further from the modest level achieved in 2013 to date. This could result from continued demand erosion in several of the group's key European markets, including France.

SALES BY SEGMENT (FY12)

Flat Glass12%

Packaging9%

HPM 10%

Int. Solutions12%

Ext. Solutions13%

Building Distribution

44%

OPERATING INCOME BY SEGMENT

0

100

200

300

400

500

600700

800

900

Flat

Gla

ss

Pac

kagi

ng

HP

M

Int.

Sol

utio

ns

Ext

.S

olut

ions

Bui

ldin

gD

istri

butio

n

in E

UR

mn

2010 2011 2012 LTM1H13

Strengths/Opportunities – Broad business diversification with leading market positions – Solid track record of containing operating costs and capex – Current prudent financial policy in order to strengthen the balance sheet

Weaknesses/Threats – Exposure to the cyclical construction sector (about 31% of sales) – Asbestos exposure in the US and anti-trust issues in flat glass (with the

risk of a potential cash outflow of EUR 1bn) – Rating pressure

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0683565476 SGOFP 3.5% 30/09/15 Baa2/BBB/-- 1,000mn FR0010333385 SGOFP 4.875% 31/05/16 Baa2/BBB/BBB+ 700mn XS0294547285 SGOFP 4.75% 11/04/17 Baa2/BBB/BBB+ 1,250mn XS0546725358 SGOFP 4% 08/10/18 Baa2/BBB/BBB+ 750mn XS0683564156 SGOFP 4.5% 30/09/19 Baa2/BBB/-- 950mn XS0791007734 SGOFP 3.625% 15/06/21 Baa2/BBB/BBB+ 750mn XS0760364116 SGOFP 3.625% 28/03/22 Baa2/BBB/BBB+ 900mn

Covenants: None


<date>




EUR mn 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 41,596 43,421 43,800 37,786 40,119 42,116 21,590 43,198 20,771EBIT margin adj. 9.3% 10.3% 8.8% 5.8% 8.2% 8.1% 6.3% 6.6% 5.6%EBITDA rep. 5,039 5,031 4,495 3,097 4,279 4,538 2,099 3,972 1,806EBITDA margin adj. 13.5% 14.6% 12.6% 10.7% 12.6% 12.6% 10.7% 11.2% 9.6%Net income 1,682 1,543 1,437 241 1,213 1,360 473 796 347Funds from operations (FFO) 3,374 3,737 3,203 2,108 2,699 2,924 963 1,999 1,077Operating cash flow 3,284 3,722 3,379 3,390 2,773 2,385 205 2,562 -491Free cash flow rep. (after Capex) 999 1,341 1,151 2,071 1,301 375 -780 661 -1,223Dividend payment 0 -684 -832 -513 -573 -623 -697 -701 -530Retained cash flow (RCF) 3,374 3,053 2,371 1,595 2,126 2,301 266 1,298 547Acquisitions / disposals 357 412 -2,013 -101 190 -623 -166 -195 137Share buy back / issues 0 411 353 1,944 489 -24 -51 -22 608Total debt rep. 13,067 11,222 13,616 11,711 9,930 11,044 13,316 12,669 12,582Net debt rep. 11,599 9,928 11,679 8,554 7,168 8,095 9,828 8,490 9,497Adj. for pensions 1,905 1,474 2,043 2,735 2,760 3,308 3,336 3,325 3,102Adj. for operating leases and others 1,934 2,130 2,293 2,191 2,020 2,269 2,269 2,262 2,262Net debt adj. 15,438 13,532 16,015 13,480 11,948 13,672 15,433 14,077 14,861

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2006

2007

2008

2009

2010

2011

1H12

2012

1H13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5



0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Ava

ilabl

eliq

uidi

ty a

sof

30.

6.13

Rep

orte

dsh

ort-t

erm

debt 20

14

2015

2016

2017

>201

7

in E

UR

mn


CREDIT METRICS



<date>



Vinci Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa1/BBB+/BBB+ STABLE/STABLE/STABLE Stable Marketweight iBoxx/--/iTraxx S18 EUR 28.3bn

Company Description: Rueil-Malmaison, France-based Vinci (www.vinci.com) is a well-diversified construction company active in the concession business, construction and related services. It was established in 2000 through the merger of SGE and GTM. Vinci is organized along two segments: 1. Concessions, which comprises Vinci Autoroutes and Vinci Concessions, and 2. Contracting, which includes Vinci Energies, Eurovia and Vinci Construction. Through its Concessions business, Vinci is the majority owner of Autoroutes du Sud de la France (ASF; 100% owned) and Cofiroute (83% owned). In FY12, Vinci generated 63% of its sales in France, 5% in Central & Eastern Europe, around 6% in Germany and the UK, 7% in the Rest of Europe, 5% in the Americas, 4% in Africa, and the remaining 4% in the Rest of the World. The company employs close to 193,000 people worldwide. Vinci shares are widely held, with employees holding 10.3%, while treasury stock makes up 7.1%.

Moody's (05/13): Upward pressure on Vinci's rating could develop as a result of a material reduction in indebtedness across the group in conjunction with good prospects for the contracting divisions, which resulted in a sustainable strengthening of key credit metrics to levels materially in excess of the consolidated guidance given above for the current rating (i.e. FFO/ debt in the mid-teens and FFO interest cover of 3.5x). Downward rating pressure could develop if Vinci records a poor operating performance or makes further material debt-financed acquisitions leading to a decline in the group's key financial metrics below the expected minimum financial profile. S&P (03/13): S&P's ratings could come under pressure if Vinci's adjusted FFO to debt falls to less than 20%. This could occur, for instance, as a result of an aggressive debt-financed acquisition, or due to a severe and prolonged double-dip recession in the global economy. According to the agency, there is limited rating upside at present.


Concessions14%

Energy23%

Construction40%

Eurovia23%

Other1%


0 500 1,000 1,500 2,000 2,500

Other

Eurovia

Energy

Construction

Concessions

in EUR mn

201020112012LTM1H13

Strengths/Opportunities – Stable and predictable revenue stream from Concessions – Strong market positions in all business segments – Good sales visibility with order book covering 12 months of sales – Strategy of avoiding too many (overextending itself in) high-risk, large-

scale projects – Excellent liquidity position and prudent funding strategy

Weaknesses/Threats – Limited geographic diversification with France accounting for around two

thirds of sales – Exposure to low-margin construction business – Capital-intensive Concessions business and high leverage – Regulatory changes in the Concessions business – Growth strategy includes M&A

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010289496 DGFP 6.25% 13/11/15 Baa3/BBB-/BBB- 500mn Hybrid, issued at Vinci SA FR0000487217 DGFP 5.875% 09/10/16 --/BBB+/-- 500mn Issued at Cofiroute (non-recourse debt) FR0011164888 DGFP 4.125% 20/02/17 Baa1/BBB+/BBB+ 1,000mn Issued at Vinci SA FR0000473993 DGFP 5.25% 30/04/18 --/BBB+/-- 600mn Issued at Cofiroute (non-recourse debt) FR0011119775 DGFP 4% 24/09/18 Baa1/BBB+/-- 500mn Issued at ASF (non-recourse debt) FR0010737882 DGFP 7.375% 20/03/19 Baa1/BBB+/-- 970mn Issued at ASF (non-recourse debt) FR0011225127 DGFP 3.375% 30/03/20 Baa1/BBB+/BBB+ 750mn Issued at Vinci SA FR0010883058 DGFP 4.125% 13/04/20 Baa1/BBB+/-- 650mn Issued at ASF (non-recourse debt) FR0010327007 DGFP 5% 24/05/21 --/BBB+/-- 1,100mn Issued at Cofiroute (non-recourse debt) FR0010491720 DGFP 5.625% 04/07/22 Baa1/BBB+/-- 1,575mn Issued at ASF (non-recourse debt) FR0011394907 DGFP 2.875% 18/01/23 Baa1/BBB+/-- 700mn Issued at ASF (non-recourse debt)

Covenants: Vinci is subject to several financial covenants (see annual report for details).


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 18,444 18,876 19,313 21,220 25,853 30,662 34,146 31,370 34,169 37,851 18,330 39,418 19,002EBIT margin adj. 5.5% 5.5% 7.0% 7.7% 10.4% 10.5% 9.9% 10.1% 10.2% 9.7% 8.5% 9.5% 8.2%EBITDA rep. 1,671 1,792 1,921 2,233 3,939 4,700 5,004 4,766 5,093 5,369 2,412 5,462 2,436EBITDA margin adj. 9.3% 9.8% 10.3% 10.9% 15.7% 15.7% 15.1% 15.6% 15.3% 14.5% 13.5% 14.3% 13.5%Net income 557 637 894 1,004 1,383 1,583 1,699 1,703 1,901 1,996 828 2,026 793Funds from operations (FFO) 1,219 1,377 1,528 1,618 2,495 2,923 3,438 3,411 3,464 3,844 1,518 3,902 1,344Operating cash flow 1,573 1,490 1,902 1,732 2,508 3,611 4,171 3,935 3,385 3,938 597 3,865 464Free cash flow rep. (after Capex) 1,118 1,060 809 221 530 1,526 1,961 2,186 1,820 2,045 -414 1,855 -295Dividend payment -177 -196 -343 -390 -552 -713 -829 -876 -965 -1,038 -698 -1,057 -701Retained cash flow (RCF) 1,042 1,181 1,185 1,227 1,943 2,210 2,610 2,536 2,499 2,806 820 2,846 643Acquisitions / disposals -1,436 -654 -177 48 -8,429 -1,598 -183 -6 -994 -117 -321 -567 24Share buybacks / issues -46 17 -136 -60 3,106 -568 181 616 219 -230 -168 -311 568Total debt rep. 5,859 6,777 7,311 7,327 21,614 21,683 21,344 20,271 20,222 21,121 20,484 20,194 21,233Net debt rep. 2,755 2,549 2,793 1,842 15,236 16,794 15,937 13,720 13,741 13,579 15,267 13,678 13,996Adj. for pensions 540 613 687 691 700 631 664 742 903 911 918 1,200 1,226Adj. for operating leases and others 155 311 354 6,234 680 758 768 864 757 779 779 912 912Net debt adj. 3,450 3,473 3,834 8,767 16,616 18,183 17,369 15,326 15,401 15,269 16,964 15,789 16,134

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

1H13

0

1

2

3

4



0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

Availableliquidity

as of1H13

Reportedshort-

term debt

2013 2014 2015 2016 >2016

in E

UR

mn


CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 5.0 5.7 5.0 8.2 4.1 3.6 3.6 4.0 4.9 5.1 5.5 5.2 6.1EBIT gross interest cover adj. 5.0 5.7 3.8 5.1 3.3 3.0 3.0 3.6 4.4 4.5 4.8 4.7 5.4EBITDA net interest cover adj. 8.4 10.0 7.4 11.7 6.2 5.4 5.5 6.1 7.3 7.6 8.3 7.9 9.2EBITDA gross interest cover adj. 8.4 10.0 5.6 7.2 5.1 4.4 4.6 5.5 6.6 6.7 7.2 7.0 8.2FFO adj. / net debt adj. 36.5% 41.8% 42.8% 20.1% 16.0% 17.1% 21.0% 23.6% 23.9% 26.8% 24.3% 26.3% 24.7%FFO adj. / total debt adj. 19.2% 18.8% 19.7% 12.4% 11.5% 13.5% 16.0% 16.6% 16.8% 17.9% 18.6% 18.6% 17.0%RCF adj. / net debt adj. 31.4% 36.1% 33.9% 15.7% 12.6% 13.2% 16.2% 17.9% 17.7% 20.0% 18.0% 19.6% 18.1%RCF adj. / total debt adj. 16.5% 16.3% 15.6% 9.7% 9.1% 10.4% 12.4% 12.6% 12.4% 13.4% 13.8% 13.9% 12.5%Net debt adj. / EBITDA adj. 2.0 1.9 1.9 3.8 4.1 3.8 3.4 3.1 3.0 2.8 3.1 2.8 2.8Total debt adj. / EBITDA adj. 3.8 4.2 4.2 6.1 5.7 4.8 4.4 4.5 4.2 4.2 4.0 4.0 4.1FFO adj. / net interest adj. 6.2 7.9 6.1 8.9 4.1 3.5 3.9 4.5 5.2 5.7 6.2 5.8 6.4FFO adj. / gross interest adj. 6.2 7.9 4.6 5.5 3.3 2.9 3.3 4.1 4.7 5.0 5.4 5.2 5.7Total debt adj. / total capital. adj. 68.2% 69.1% 69.8% 73.0% 70.9% 74.4% 72.3% 68.4% 63.4% 63.2% 63.0% 61.8% 62.1%Net debt adj. / net capital. adj. 53.0% 50.2% 51.5% 62.4% 63.8% 69.6% 66.5% 60.3% 54.9% 53.5% 56.6% 53.4% 53.0%Equity / total assets 15.3% 16.0% 15.8% 20.5% 19.3% 16.0% 16.9% 20.0% 22.6% 22.1% 21.7% 22.4% 22.9%


<date>



Wienerberger Analyst: Jana Arndt, CFA (UniCredit Bank), +4989378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa3/--/-- NEG/--/-- Improving Hold Hybrid/ Sell Senior --/iBoxx HY/-- EUR 1.5bn

Company Description: Vienna-based Wienerberger AG is the world's largest manufacturer of bricks and Europe's no. 1 in the clay roof-tile market. It is also a leading manufacturer of concrete pavers and pipe systems in Europe. The company operates 215 plants in 30 countries. Following the acquisition of Pipelife in 2012, the company changed its reporting structure and is now operating in four divisions: 1. Bricks & Tiles Europe, comprising clay blocks, facing bricks and roof tiles, reported for Western Europe and Eastern Europe, 2. Pipes & Paves Europe, combining the pipe business of Pipelife plastic pipe systems and Steinzeug-Keramo ceramic pipe systems as well as concrete pavers (Semmelrock), reported for Western Europe and Eastern Europe. 3. North America, bundling the activities in the US and Canada, as well as Pipelife's US plastic pipe business, and 4. Holding & Others, including the costs of the corporate headquarters and brick activities in India. In FY12, the company employed 13,060 people on average. Wienerberger is listed on the Vienna Stock Exchange.

Moody's (10/13): According to Moody's, the negative outlook assigned to Wienerberger reflects the risk that the group might not be able to restore credit metrics in line with its expectations within the next twelve months as a result of continued challenging market conditions in Europe. Failure of Wienerberger to maintain debt/EBITDA below 5.5x at fiscal year-end 2013 (7.1x per March 2013 including the application of the new hybrid debt approach) and to bring this debt measurement down towards 5.0x by fiscal year-end 2014 would lead to negative pressure on the current ratings. EBIT/interest remaining below 1.0x would also exert negative pressure on the ratings.

SALES BY REGION (LTM9M13)

Bricks & Tiles Western Europe

42%

Bricks & Tiles Eastern Europe

12%

Pipes & Pavers Western Europe

22%

Pipes & Pavers Eastern Europe

16%

North America8%

Holding & Others <1%

OPERATING EBITDA

-50

0

50

100

150

200

Bricks &Tiles

WesternEurope

Bricks &Tiles

EasternEurope

Pipes &Pavers

WesternEurope

Pipes &PaversEasternEurope

NorthAmerica

Holding &Others

in E

UR

mn

FY11 FY12 LTM9M13

Strengths/Opportunities – Strong market position as the world market leader in bricks and no. 1 in

clay roof tiles in Europe – Good geographical diversification – Strategic focus on reducing the dependency on the cyclical new residential

construction market with a stronger focus on businesses related to renovation and infrastructure, such as roofing, pavers and pipe systems

– High barriers to entry given the high capital intensity and local nature of the brick and roof-tiles business

– Cash-generative business – Management's commitment to maintaining financial discipline and a solid

financial structure, with the objective of keeping net leverage below 2.5x

Weaknesses/Threats – High exposure to the new-residential construction market and hence

dependency on GDP growth, interest rates and consumer spending – Still relatively small exposure to renovation and non-residential

construction – Challenging market conditions in the construction markets in Europe – Dependency on mainly fragmented and competitive markets – Relatively high exposure to Europe and the more cyclical CEE markets – Capital intensity of the majority of its businesses – High seasonality of the building-materials business

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment DE000A0G4X39 WIEAV 6.5% Perp B1/--/-- 500mmn Hybrid AT0000A100E2 WIEAV 4% 04/20 Ba2/--/-- 300mn Retail size

Covenants: Net debt to operating EBITDA not to exceed 3.5x, EBITDA interest cover not to fall below 3.75x; both monitored every six months.


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 1,654 1,827 1,759 1,955 2,225 2,477 2,431 1,817 1,745 1,915 1,744 2,356 2,034EBIT margin adj. 9.7% 10.8% 15.1% 14.3% 14.0% 14.6% 10.2% 1.6% 1.2% 2.7% 4.0% 2.0% 3.3%EBITDA rep. 303 350 405 428 472 551 397 158 211 241 197 220 211EBITDA margin adj. 18.8% 19.5% 23.5% 22.4% 21.7% 22.6% 19.2% 12.0% 12.7% 13.2% 12.1% 11.1% 10.9%Net income 86 113 182 196 218 296 103 -259 -35 39 47 -41 -6Funds from operations (FFO) 202 245 297 321 371 479 310 24 122 156 135 107 129Operating cash flow 258 299 338 239 352 362 272 262 201 135 37 210 16Free cash flow rep. (after Capex) 141 141 100 -40 -9 42 -118 132 102 20 -42 88 -48Dividend payment -41 -45 -52 -78 -86 -103 -118 0 0 -12 -14 -11 -14Retained cash flow (RCF) 161 200 245 243 285 376 192 23 122 144 122 97 115Acquisitions / disposals -4 -148 -320 2 -140 -301 -87 23 -32 31 -140 -125 8Share buy back / issues 0 0 222 -13 -3 418 -9 320 0 -21 0 0 0Total debt rep. 823 1,033 933 1,189 1,405 1,442 1,679 1,443 1,407 1,428 1,503 1,410 1,637Net debt rep. 654 844 776 947 1,171 1,060 1,383 901 867 852 1,242 1,095 1,155Adj. for pensions 43 36 56 58 55 56 47 62 73 89 107 132 131Adj. for operating leases and others 57 48 51 60 79 55 63 64 59 62 63 83 83Net debt adj. 754 928 882 1,065 1,305 1,171 1,493 1,026 999 1,003 1,412 1,310 1,369

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0

1

2

3

4

5


DEBT MATURITY PROFILE (ESTIMATED) AS OF 9M13

0

100

200

300

400

500

600

Liqu

idity

as

of 9

M13

Rep

orte

dst

- deb

t

2014

2015

2016

2017

2018

+

in E

UR

mn

Cash Available credit lines Financial debt

CREDIT METRICS



<date>



Würth Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/A/BBB+ --/STABLE/STABLE Stable Marketweight iBoxx/--/-- not listed

Company Description: The Würth Group, headquartered in Künzelsau/Germany, is a widely-known German distribution company focused on delivering assembly and fastening products to the maintenance, repair and operations industry. While the group also maintains some production activity (around 10% of sales), its core competence remains distribution. With a highly decentralized structure of 417 companies, the group is active in more than 80 countries all over the world but generates most of its sales in Europe, with Germany being its most important market. The group, which dates back to 1945, is family-owned through several foundations. The group's activities are grouped into two business areas: Würth Line, operating under the Würth brand, and Allied Companies, which do not operate under the Würth brand. The Würth Line companies serve the metal processing (17% of total sales in FY12), construction (6%), automotive (15%), wood (10%) and industrial (9%) industries. Allied Companies generate 44.5% of sales and comprises several business fields, including electrical wholesale, trade, production, electronics, screws and standard parts, and financial services.

S&P (05/13): S&P's stable outlook reflects its view that the group's adjusted ratio of FFO to debt will improve to about 45% over the next 12 months, a level that the agency considers commensurate with the current ratings. Despite weak market conditions, which S&P expects to persist through 2013, the agency believes that Würth will be able to make some improvements to its margins, which in turn will support the group's credit metrics. The outlook also takes into account the agency's view of Würth's "strong" business risk profile and experienced management team, which should enable the group to restore its rating headroom to more comfortable levels over the near term. Fitch (08/13): A downgrade may occur if the EBITDAR margin remains below 7%, if FCF margin remains negative or if FFO adjusted net leverage remains above 2.5x for a sustained period. In addition, if material capital contributions have to be made to the Würth-owned bank, this could also lead to a downgrade. An upgrade is unlikely in the near term.

SALES BY REGION (FY12)

Western Europe17%

Americas11%

Eastern Europe5%

Asia, Africa andOceania

4%

Germany45%

Scandinavia8%

SouthernEurope

10%


Würth Line

Industry9%

ElectricalWholesale

10%

Tools4% Wood

10%

Metal17%

Automotive15%

Others2%Electronics

7%

& ScrewsStandard Parts

3%

Production6%

Reca Group5%

Trade9%

Construction6%

Allied Companies

Strengths/Opportunities – Market-leading positions as the largest distributor of low-ticket items for

small to medium-sized customers in a broad variety of end markets. Würth is the leading player, in a highly fragmented market, with a market share of below 5%.

– Würth's customer base of over three million is very granular, with no single customer accounting for more than 1% of sales. According to management, the average order size in Würth's traditional business is a few hundred euros. As a result of the broad range of industries served, Würth's vulnerability to economic cycles is viewed as relatively limited compared to a "normal" building materials company (sales decline of 15% in FY09 is considered relatively resilient).

– Stock of 20,000 suppliers limits the bargaining power of suppliers – The closely meshed network of outlets and companies and an established

logistics network pose a considerable barrier to entry for competitors. – Würth's global presence in more than 80 countries balances the impact of

fluctuations in regional economic activity. – Cash-flow-generative business together with a conservative financial

structure featuring an equity ratio of historically above 40%. Management maintains a moderate financial policy.

Weaknesses/Threats – High exposure to its domestic market, Germany, with a share of 45% of

total sales, as well as more mature economies in Western Europe – Continued margin pressure from rising raw material and energy costs,

especially in its manufacturing units, needs to be countered by price increases and continued efficiency improvements.

– Financial services debt on its balance sheet due to the consolidation of its 90% stake in Internationales Bankhaus Bodensee AG, although the equity ratio of the bank is in line with the benchmark in the private banking sector

– Considerable liabilities for operating lease arrangements and pensions – Growth strategy through bolt-on acquisitions and greenfield investments.

We note that integration risk remains even though Würth has an unblemished track record of successfully acquiring and integrating target companies.

– Limited access to equity markets owing to commitment to private ownership

– Limited visibility as results are reported on a yearly basis only

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0625977987 WURTH 3.75% 25/05/18 --/A/BBB+ 500mn -- DE000A1HJ483 WURTH 1.75% 21/05/20 --/A/BBB+ 500mn --

Covenants: Maximum net debt to EBITDA of 4x for a EUR 200mn syndicated loan and a USD 200mn USPP.


<date>




EUR mn 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012Sales 5,277 5,360 5,453 6,203 6,914 7,748 8,489 8,816 7,522 8,633 9,699 9,985EBIT margin adj. 5.7% 5.9% 6.3% 6.6% 7.5% 7.5% 8.6% 7.1% 4.2% 5.2% 5.3% 5.1%EBITDA rep. 474 490 525 598 670 742 908 853 549 690 736 762EBITDA margin adj. 9.0% 9.2% 9.7% 9.7% 10.3% 10.1% 11.3% 10.2% 7.9% 8.6% 8.2% 8.3%Net income 147 173 225 263 335 307 419 367 111 268 271 279Funds from operations (FFO) 348 240 431 487 571 577 728 532 498 622 596 599Operating cash flow 310 284 358 342 455 411 421 359 727 156 486 544Free cash flow rep. (after Capex) 99 87 142 106 174 18 -55 -79 477 -117 44 107Dividend payment -46 -50 -37 -26 -132 -128 -201 -233 -114 -118 -153 -186Retained cash flow (RCF) 302 190 394 462 439 449 527 298 384 505 443 413Acquisitions / disposals -16 -13 31 -20 -68 -32 13 -65 35 -6 57 -13Share buy back / issues -5 72 0 0 102 97 60 23 59 59 80 111Total debt rep. 840 792 765 869 889 825 1,091 1,416 1,523 1,457 1,905 1,618Net debt rep. 759 670 475 557 506 589 699 1,123 700 994 953 942Adj. for pensions 63 70 77 103 120 126 126 128 122 132 151 194Adj. for operating leases and others 200 210 250 300 323 332 399 402 403 437 508 540Net debt adj. 1,022 950 802 960 949 1,047 1,223 1,654 1,224 1,564 1,612 1,676

DEBT LEVERAGE

0%

15%

30%

45%

60%

75%

90%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 20120.0

0.5

1.0

1.5

2.0

2.5


DEBT MATURITY PROFILE*

0

200

400

600

800

1,000

1,200

1,400

Ava

ilabl

eliq

uidi

ty

2013

2014

2015

2016

2017

>201

7

in E

UR

mn

Cash as of 31.12.12 New bond issued 05/13Undrawn, committed lines Financial debt

CREDIT METRICS

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012EBIT net interest cover adj. 5.8 5.9 10.3 12.1 8.0 8.2 7.5 6.0 3.2 4.8 4.5 4.4EBIT gross interest cover adj. 4.4 4.4 6.0 7.8 6.4 6.3 5.4 3.5 2.1 2.4 2.7 3.1EBITDA net interest cover adj. 9.2 9.3 15.8 17.8 11.0 11.0 9.8 8.7 6.0 7.9 7.1 7.2EBITDA gross interest cover adj. 7.0 6.9 9.2 11.4 8.7 8.5 7.0 5.0 4.0 3.9 4.3 5.0FFO adj. / net debt adj. 34.1% 25.2% 53.7% 50.8% 71.9% 66.8% 71.2% 41.1% 52.9% 49.0% 47.0% 46.4%FFO adj. / total debt adj. 31.6% 22.3% 39.5% 38.3% 51.2% 54.5% 53.9% 34.9% 31.6% 37.8% 29.5% 33.1%RCF adj. / net debt adj. 29.5% 20.0% 49.1% 48.1% 58.0% 54.6% 54.7% 27.0% 43.5% 41.5% 37.5% 35.4%RCF adj. / total debt adj. 27.4% 17.7% 36.0% 36.3% 41.3% 44.5% 41.4% 22.9% 26.0% 32.0% 23.6% 25.2%Net debt adj. / EBITDA adj. 2.1 1.9 1.5 1.6 1.3 1.3 1.3 1.8 2.1 2.1 2.0 2.0Total debt adj. / EBITDA adj. 2.3 2.2 2.1 2.1 1.9 1.6 1.7 2.2 3.4 2.7 3.2 2.8FFO adj. / net interest adj. 6.7 4.5 12.9 14.3 10.6 9.8 9.0 6.5 6.5 8.1 6.7 6.7FFO adj. / gross interest adj. 5.1 3.3 7.5 9.2 8.4 7.6 6.4 3.8 4.3 4.0 4.1 4.7Total debt adj. / total capital. adj. 47.1% 43.4% 41.3% 41.7% 39.4% 36.0% 40.2% 43.6% 44.1% 41.4% 45.7% 42.3%Net debt adj. / net capital. adj. 45.2% 40.4% 34.1% 35.0% 31.7% 31.5% 33.7% 39.6% 32.0% 35.3% 34.6% 34.3%Equity / total assets 41.3% 45.2% 48.0% 47.4% 49.5% 44.8% 42.3% 41.2% 41.3% 42.0% 39.1% 41.9%

*Financial debt as of end of March 2013, including new EUR bond issued in 05/13; the liquidity back-up line was renewed in February 2013 (maturity 02/18)


<date>




Industrials iBoxx Industrials Sector Composition

IBOXX EUR INDUSTRIALS ISSUANCE ACTIVITY

SIEG

R

SIEG

R HUW

HY

HUW

HY

ABES

M

ABES

M

DGFP

DGFP

DGFP

DGFP

ATLIMATLIM

ATLIM

ATLIM

CEIF

P

CEIF

P SUFP

SUFP

ALOF

P

ALOF

PAR

RFP

ARRF

P

DPW

DPW

DPW

HTHR

OW

MANG

R

MANG

R

SKFB

SSSKFB

SS

ADPF

P

ADPF

P

ABBN

VX

MAER

SK

HOFP

GFSL

N

GFSL

N

FERS

M

FERS

MAT

COA

ATCO

A

WUR

THRO

LLS

MMM

SCAB

SS

CAT ME

LAIR

BRUA

IR

RTOL

N

GBFG

R

PSGS

M

TCLA

U

TOTA

L

TOTA

L

FNCI

M

LINGR

LINGR

LINGR

LINGR

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Sep

-11

Oct

-11

Nov

-11

Dec

-11

Jan-

12Fe

b-12

Mar

-12

Apr

-12

May

-12

Jun-

12Ju

l-12

Aug

-12

Sep

-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

13Ju

l-13

Aug

-13

Sep

-13

Oct

-13

Nov

-13

Issu

ance

in E

UR

mn



Issue Date Bond Notional (EUR mn)11/08/13 MMM 1.875% Nov-21 60010/29/13 ATLIM 2.875% Feb-21 75010/29/13 SKFBSS 2.375% Oct-20 75010/09/13 DPW 2.75% Oct-23 50010/09/13 DPW 1.5% Oct-18 50010/08/13 TCLAU 2.5% Oct-20 50009/26/13 MELAIR 3.125% Sep-23 55009/06/13 SUFP 2.5% Sep-21 60009/04/13 CEIFP 3.25% Sep-20 50007/08/13 ALOFP 3% Jul-19 50007/01/13 BRUAIR 3.25% Jul-20 50006/20/13 ABESM 3.75% Jun-23 60006/18/13 ROLLS 2.125% Jun-21 750


IBOXX EUR INDUSTRIALS REDEMPTIONS

SIEG

R

HUW

HY

ATLIM

SUFP

SUFP

ALOF

P

ALOF

P

ARRF

P

DPW

HTHR

OW

MANG

R

ADPF

P

MAER

SK

VLVY

UREN

COMMM CA

T

CAT

TOTA

L

TOTA

L

TOTA

LDE

SAND

VK

FNCI

M

ITW

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

14Ju

l-14

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Jan-

15Fe

b-15

Mar

-15

Apr

-15

May

-15

Jun-

15Ju

l-15

Aug

-15

Sep

-15

Oct

-15

Nov

-15

Red

empt

ions

in E

UR

mn



Maturity Bond Notional (EUR mn)12/03/13 FNCIM 8.125% Dec-13 81501/17/14 SUFP 4.5% Jan-14 50001/24/14 ADPFP 6.375% Jan-14 50001/24/14 DE 7.5% Jan-14 60001/30/14 DPW 4.875% Jan-14 92602/25/14 SANDVK 6.875% Feb-14 60002/27/14 VLVY 9.875% Feb-14 70006/06/14 CAT 2.75% Jun-14 60006/09/14 ATLIM 5% Jun-14 2,21806/11/14 SIEGR 5.375% Jun-14 1,00007/14/14 MMM 5% Jul-14 1,02509/23/14 ALOFP 4% Sep-14 74309/30/14 HTHROW 4.6% Sep-14 750


IBOXX EUR B INDUSTRIALS OUTSTANDING

0

20,000

40,000

60,000

80,000

100,000

120,000

Apr-00 Apr-02 Apr-04 Apr-06 Apr-08 Apr-10 Apr-12

Out

stan

ding

in E

UR

mn

SIEGR HUWHY ABESM DGFP ATLIMCEIFP SUFP Others



Issuer (Ticker) Outstanding (EUR mn) No of BondsSiemens AG (SIEGR) 7,750 6Hutchison Whampoa (HUWHY) 6,772 6Abertis (ABESM) 6,660 7Vinci (DGFP) 6,595 8Atlantia (ATLIM) 6,500 7Areva (CEIFP) 4,821 6Schneider Electric (SUFP) 4,630 7Alstom (ALOFP) 3,500 6APRR (ARRFP) 3,200 5Deutsche Post (DPW) 2,950 5BAA (HTHROW) 1,950 3SKF (SKFBSS) 1,750 3Others 25,190 31


<date>




iBoxx Aerospace & Defense Market Spreads

AEROSPACE & DEFENSE 5Y SENIOR CDS HISTORY

40

50

60

70

80

90

100

110

120

130


5Y C

DS

in b

p

0

50

100

150

200

250

300

350

400

450

EADFP HOFP BBDBCN (RS) FNCIM (RS)



0.0 0.5 1.0 1.5 2.0 2.5

HOFP

EADFP

FNCIM

BBDBCN


AEROSPACE & DEFENSE CASH CURVES

BBDBCN 6.125% May-21

FNCIM 5.25% Jan-22

FNCIM 5.75% Dec-18

FNCIM 4.875% Mar-25FNCIM 4.375%

Dec-17

HOFP 1.625% Mar-18

EADFP 5.5% Sep-18

HOFP 2.75% Oct-16EADFP 4.625%

Aug-160

50

100

150

200

250

300

350

400

0 2 4 6 8 10 12mDur

ASW

in b

p


QUARTERLY BOND SPREAD MOVEMENTS E

AD

FP 4

.625

% A

ug-1

6

FNC

IM 5

.25%

Jan

-22

BB

DB

CN

6.1

25%

May

-21

HO

FP 2

.75%

Oct

-16

EA

DFP

5.5

% S

ep-1

8

HO

FP 1

.625

% M

ar-1

8

FNC

IM 4

.375

% D

ec-1

7

FNC

IM 4

.875

% M

ar-2

5

FNC

IM 5

.75%

Dec

-18

0

50

100

150

200

250

300

350

400

ASW

in b

p



Bombardier

EADS NV

Finmeccanica SpA

Thales SA

0

50

100

150

200

250

300

350

6 7 8 9 10 11 12 13

5Y C

DS

in b

p




Thales SA

Finmeccanica SpA

EADS NV

Bombardier

0

50

100

150

200

250

300

350

0 1 2 3 4 5 6 7Leverage

5Y C

DS


<date>



Bombardier Inc. Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa2/BB/BB NEG/NEG/NEG Stable Hold --/iBoxx HY/-- CAD 8.3bn

Company Description: Bombardier Inc., headquartered in Montreal, Canada, is a global transportation company operating in aerospace and rail transportation. In the aerospace division, the company manufactures regional commercial aircraft (i.e. 60 to 70-seat turboprops, 40 to 100-seat regional jets, 100 to 149-seat CSeries [expected to enter the market in 1H14]) and business aircraft (Learjet, Challenger and Global family) in addition to providing parts and services. It is the world's third-largest civil aircraft manufacturer. Main competitors include ATR, Embraer, Airbus and Boeing (in commercial aircraft), as well as Cessna, Dassault, Gulfstream, Hawker Beechcraft, Embraer, Aerbus and Boeing (in business aircraft). The transportation segment produces railway equipment, including rolling stock, locomotives and signaling systems. Its main competitors are Alstom and Siemens. The Bombardier family indirectly holds 79.09% of outstanding Class A shares (=10 votes per share) or 54.33% of all voting rights. Class B shares (=one vote per share) are free float.

Moody's (01/13): Bombardier's rating could be downgraded if its free cash flow falls significantly below Moody's expectations for 2013 and 2014 (negative USD 750 million and USD 0 respectively), if the CSeries is further delayed or if its leverage is not expected to decline below 6x over the next 12-18 months with ongoing expected improvement beyond that timeframe. S&P (08/13): A further downgrade is possible if lower customer advances and additional delays in the CSeries programs lead to greater-than-expected negative free cash generation. This could ultimately lead to delays in any improvement to the adjusted leverage ratio from S&P's current expectations in the next two years. An upgrade is unlikely in the near term unless the CSeries is placed into service and the credit metrics recover by year-end 2014. Fitch (11/13): A negative rating action could occur if FCF does not improve significantly in 2014, the CSeries encounters further material delays or increased costs, or future orders are insufficient to support profitable production levels; commercial and business jet markets experience an extended period of weak demand; liquidity is insufficient to carry BBD through the current development cycle at BA.

SALES BY SEGMENT

0

2,000

4,000

6,000

8,000

10,000

12,000

Transportation Aerospace

in U

SD

mn

FY06/07 FY07/08 FY08/09 FY09/10 FY10/11 FY11 FY12 LTM 9M13

EBIT BY SEGMENT

0

100

200

300

400

500

600

700

800

900

1,000

Transportation Aerospace

in U

SD

mn

FY06/07 FY07/08 FY08/09 FY09/10 FY10/11 FY11 FY12 LTM 9M13

Strengths/Opportunities – Strong market positions in Aerospace and Transportation – Two-pillar strategy with a more recession-resilient Transportation segment – Focus on margin improvement in the Transportation segment – Adequate liquidity position

Weaknesses/Threats – Exposure to the cyclical commercial aerospace market, in particular to the

very-cyclical Business Jet segment – Risks related to the development of new aircraft programs (i.e. C-series) or

projects in Transportation – Large working capital swings, in line with new-order development might

weigh on cash flow in a market downturn – High off-balance sheet liabilities

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0273988393 BBDBCN 7.25% 15/11/2016 Ba2/BB/BB 785mn HY language; callable @ 101.208 XS0552915943 BBDBCN 6.125% 15/05/2021 Ba2/BB/BB 780mn IG language

Covenants: Under the L/C and RCF facilities, the group needs to meet certain financial covenants (Debt/EBITDA, interest coverage, minimum equity), which, according to Moody's, should be met with good headroom through 2013. In addition, Bombardier needs to maintain a minimum BT liquidity of EUR 600mn

at the end of each calendar quarter and a minimum BA liquidity of USD 500mn at the end of each fiscal quarter.


<date>




USD mn 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011* 9M12 2012 9M13Sales 14,726 14,882 17,506 19,721 19,366 17,892 18,347 11,789 16,768 12,827EBIT margin adj. 4.4% 5.5% 6.0% 7.7% 6.2% 7.6% 7.8% 6.1% 6.1% 5.8%EBITDA rep. 902 1,071 1,252 1,984 1,596 1,584 1,531 830 1,030 921EBITDA margin adj. 8.1% 8.9% 8.9% 10.5% 8.8% 9.7% 9.6% 8.3% 8.3% 8.1%Net income 135 243 317 1,026 707 775 837 474 598 475Funds from operations (FFO) 654 712 997 1,655 1,223 1,235 1,271 717 952 875Operating cash flow 754 891 2,380 909 552 1,692 243 -44 1,348 -18Free cash flow rep. (after Capex) 425 583 1,908 288 -253 546 -1,257 -1,532 -792 -1,734Dividend payment -25 -28 -30 -155 -178 -197 -156 -197 -249 -148Retained cash flow (RCF) 629 684 967 1,500 1,045 1,038 1,115 520 703 727Acquisitions / disposals 1,663 -1,142 -62 50 -44 -79 -64 42 57 56Share buy back / issues -14 -20 -50 -47 -21 -66 -72 0 0 0Total debt rep. 4,747 5,080 4,393 3,952 4,162 4,662 4,941 5,388 5,405 7,240Net debt rep. 1,830 2,432 791 482 790 467 1,569 3,242 2,509 4,650Adj. for pensions 2,043 1,753 1,424 1,545 1,603 1,840 3,217 3,216 2,978 2,790Adj. for operating leases and others 491 565 9 157 564 366 666 1,016 1,146 1,251Net debt adj. 4,364 4,750 2,223 2,184 2,958 2,673 5,452 7,474 6,633 8,691

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

120%

140%

160%

2000

2001

/02

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

9M12

2012

9M13

0

1

2

3

4

5

6

7

8



0500

1,0001,5002,0002,5003,0003,5004,0004,5005,000

Liquidityas of9M13

ST-Debtas of9M13

2013 2014 2015 2016 > 2016

in U

SD

mn

Cash Undrawn, committed lines Financial debt ST-Debt

CREDIT METRICS

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011* 9M12 2012 9M13EBIT net interest cover adj. 2.5 3.1 3.0 8.6 5.1 5.5 7.0 6.0 26.6 11.8EBIT gross interest cover adj. 1.6 1.9 1.8 3.4 3.6 1.9 2.0 2.5 1.6 1.6EBITDA net interest cover adj. 4.7 5.1 4.5 11.7 7.2 7.0 8.7 7.8 36.6 16.4EBITDA gross interest cover adj. 2.9 3.2 2.7 4.6 5.1 2.4 2.4 3.3 2.2 2.3FFO adj. / net debt adj. 16.8% 16.1% 47.4% 78.0% 43.7% 48.7% 24.4% 14.2% 15.6% 14.0%FFO adj. / total debt adj. 10.1% 10.3% 18.1% 30.1% 20.4% 19.0% 15.1% 11.1% 10.9% 10.8%RCF adj. / net debt adj. 16.3% 15.5% 46.0% 70.9% 37.7% 41.3% 21.6% 11.6% 11.9% 11.7%RCF adj. / total debt adj. 9.7% 9.9% 17.6% 27.4% 17.6% 16.1% 13.3% 9.0% 8.3% 9.0%Net debt adj. / EBITDA adj. 3.7 3.6 1.4 1.1 1.7 1.5 3.1 5.3 4.8 6.0Total debt adj. / EBITDA adj. 6.1 5.6 3.7 2.7 3.7 3.9 5.0 6.9 6.8 7.8FFO adj. / net interest adj. 2.9 2.9 3.0 9.6 5.4 5.2 6.6 5.9 27.2 13.7FFO adj. / gross interest adj. 1.8 1.8 1.8 3.8 3.9 1.8 1.8 2.5 1.6 1.9Total debt adj. / total capital. adj. 85.3% 78.9% 67.8% 73.3% 66.1% 80.6% 92.8% 88.6% 87.2% 86.1%Net debt adj. / net capital. adj. 77.6% 70.6% 44.6% 51.5% 47.6% 61.7% 88.9% 85.7% 82.6% 82.7%Equity / total assets 13.9% 14.7% 14.1% 12.3% 17.7% 6.3% 2.8% 5.0% 5.3% 7.5%

* Only 11 months as change of financial year in 2011 to 31 December from 31 January in previous years Source: Company data, UniCredit Research

<date>



EADS Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA2/A/A- STABLE/STABLE/STABLE Stable Marketweight iBoxx/--/iTraxx S18 EUR 40.6bn

Company Description: Netherlands-based EADS (European Aeronautic Defense and Space Company, www.eads.com) is a global leader in aerospace, defense and related services. The group operates in the following segments: 1. Airbus (one of two market leaders in commercial aircraft manufacturing – main competitor is Boeing – and leading military aircraft manufacturer); 2. Eurocopter (global leader in the civil and parapublic helicopter market); 3. Astrium (European leader in space programs and the third largest worldwide); 4. Cassidian (a worldwide leader in global security solutions and systems). In FY12, the group generated about 37% of its revenues in Europe, 14% in North America, 32% in Asia-Pacific, 10% in the Middle East and 7% in the RoW. The company employs around 144,000 people. Shareholder structure: 14.33% French state, 10.72% Federal Republic of Germany, 4.43% SEPI, the remainder is free-float.

Moody's (06/13): An upgrade is not expected at this stage, but could be considered if EADS records sustainable high single-digit operating margins, leverage of less than 1.5x (LTM 1H13: 2.3x) and meaningful free cash flow generation while continuing to deliver on its new programs and maintaining a strong liquidity profile. Negative rating pressure might arise in case of a deterioration in EADS' operating profitability, or if there is a lack of steady progress towards achieving operating margins at least in the mid-single-digits in percentage terms over the near term. S&P (09/13): The outlook could be revised to negative if EADS made sizable debt-financed M&A or unexpectedly engaged in considerable shareholder remuneration beyond the current share buyback program. Furthermore, a negative rating action could occur if operational risks such as program delays or cost overruns on any project were to lead to substantial cash-effective charges. Positive rating action could result if EADS continues with its very conservative financial policy, including very strong financial credit metrics, positive FOCF, and moderate dividend payouts, with no material strategic steps such as debt-financed acquisitions changing this track record. Fitch (11/13): A positive rating action could follow a solid improvement in sustained cash generation, with FFO and free cash flow (FCF) to revenue ratios of over 11% and 6%, respectively, an FFO-adjusted net cash position and a significant improvement in the company's currency mismatch position. Conversely, if the group's financial performance were materially below Fitch's expectations, including FCF consistently below 3%, FFO sustainably below 9% and FFO-adjusted leverage above 2x, this might lead to a negative rating action.

SALES BY SEGMENT (9M13)

Airbus Commercial

64%

Eurocopter11%

Cassidian10%

Airbus Military5%

Astrium10%

EBIT BEFORE ONE-OFFS BY SEGMENT

0 500 1,000 1,500 2,000

Airbus Commercial

Eurocopter

Astrium

Cassidian

Airbus Military

in EUR mn

LTM 9M13 FY12 FY11 FY10

Strengths/Opportunities – The world's second-largest aerospace and defense group – Airbus is one of two market leaders in commercial aircraft manufacturing – Conservative financial policy and strong liquidity position and financial

profile – Solid revenue visibility given the strong order backlog (with some level of

overbooking) – Restructuring measures in defense businesses should result in higher

competitiveness – Uplift due to government stake

Weaknesses/Threats – High exposure to the cyclical commercial aerospace industry – Limited access to the US military market – Currency risk, with about 60% of revenues generated in USD, while costs

are incurred in EUR – Execution risk with regard to the development of new programs – Weak profitability, subject to huge program charges in the past – Risk in connection with the company's M&A ambitions

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0445463887 EADFP 4.625% 12/08/16 A2/A/A- 1,000mn -- XS0176914579 EADFP 5.5% 25/09/18 A2/A/A- 500mn --

Covenants: The group's EUR 3bn RCF line due in 04/17 (one-year extension option) does not include financial covenants.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 30,133 31,761 34,206 39,434 39,123 43,265 42,822 45,752 49,128 37,258 56,480 39,966EBIT margin adj. 5.8% 8.5% 8.8% 1.8% 0.4% 6.9% -0.1% 3.3% 3.9% 4.7% 4.2% 5.6%EBITDA rep. 2,936 3,752 4,140 1,780 1,443 4,228 1,312 2,624 3,305 2,718 3,937 3,233EBITDA margin adj. 11.0% 13.0% 13.2% 5.7% 4.7% 10.7% 4.0% 6.6% 7.8% 8.3% 7.9% 9.1%Net income 218 1,221 1,710 115 -437 1,597 -752 572 1,037 880 1,229 1,197Funds from operations (FFO) 2,690 2,894 3,904 3,587 3,537 4,185 2,277 1,665 2,953 2,825 3,962 2,632Operating cash flow 4,709 5,049 5,143 3,444 4,773 4,013 2,292 4,484 4,339 -1,753 3,886 -2,835Free cash flow rep. (after Capex) 2,037 2,032 2,325 736 2,745 2,176 335 2,234 2,142 -3,647 616 -4,917Dividend payment -278 -384 -489 -536 -98 -107 -166 -7 -183 -371 -379 -468Retained cash flow (RCF) 2,412 2,510 3,415 3,051 3,439 4,078 2,111 1,658 2,770 2,454 3,583 2,164Acquisitions / disposals -1,139 -778 -21 -1,586 -4 -53 77 -80 -1,673 -60 -224 52Share buybacks / issues -10 -38 -101 59 46 63 12 -51 -66 133 139 -1,694Total debt rep. 4,767 5,223 5,097 5,757 4,814 4,504 5,296 4,278 5,104 5,618 4,779 7,219Net debt rep. -3,105 -3,495 -4,478 -2,935 -4,333 -6,153 -5,814 -6,586 -4,452 -1,647 -6,305 -915Adj. for pensions 3,996 4,332 4,775 5,797 4,586 4,478 5,197 5,066 5,615 5,523 6,167 6,276Adj. for operating leases and others 322 273 86 274 167 289 295 430 381 456 336 419Net debt adj. 1,213 1,110 384 3,136 420 -1,385 -322 -1,090 1,544 4,331 198 5,780

DEBT LEVERAGE

-10%

0%

10%

20%

30%

40%

50%

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13-0.5

0.0

0.5

1.0

1.5

2.0

2.5FFO adj. / total debt adj. Net debt adj. / EBITDA adj.


0

2,000

4,000

6,000

8,000

10,000

12,000

Liquidityas of9M13

ST-Debtas of9M13

2013 2014 2015 >2015

in E

UR

mn

Cash Undrawn, committed lines Bonds

CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 4.8 6.8 10.4 2.7 0.5 44.9 -0.2 7.7 23.3 8.4 6.3 7.3EBIT gross interest cover adj. 2.0 3.6 10.4 1.0 0.2 4.4 -0.1 2.9 4.2 4.8 3.9 4.8EBITDA net interest cover adj. 9.2 10.3 15.7 8.9 6.1 69.2 7.1 15.5 45.9 15.0 11.7 12.5EBITDA gross interest cover adj. 3.8 5.5 15.7 3.2 2.3 6.7 2.9 5.9 8.3 8.7 7.2 8.2FFO adj. / net debt adj. 233.9% 270.7% 1037% 117.6% 868.8% n.m. n.m. n.m. 197.1% 98.5% n.m. 67.2%FFO adj. / total debt adj. 31.2% 30.6% 40.0% 31.2% 38.2% 46.2% 22.1% 18.1% 27.4% 36.8% 36.0% 27.9%RCF adj. / net debt adj. 211.0% 236.1% 909.7% 100.5% 845.4% n.m. n.m. n.m. 185.3% 89.9% n.m. 59.0%RCF adj. / total debt adj. 28.2% 26.7% 35.0% 26.6% 37.1% 45.1% 20.5% 18.0% 25.8% 33.6% 32.7% 24.5%Net debt adj. / EBITDA adj. 0.4 0.3 0.1 1.4 0.2 -0.3 -0.2 -0.4 0.4 0.9 0.0 1.2Total debt adj. / EBITDA adj. 2.7 2.4 2.2 5.2 5.2 2.0 6.2 3.2 2.9 2.5 2.5 2.8FFO adj. / net interest adj. 7.9 7.5 13.8 14.5 12.1 64.3 9.9 9.0 36.6 13.9 10.7 9.8FFO adj. / gross interest adj. 3.3 4.0 13.8 5.2 4.5 6.3 4.0 3.5 6.6 8.0 6.6 6.4Total debt adj. / total capital. adj. 33.4% 38.1% 42.9% 47.2% 41.9% 45.3% 50.1% 51.8% 55.0% 53.2% 51.3% 56.8%Net debt adj. / net capital. adj. 6.3% 6.5% 2.8% 19.2% 3.1% -14.1% -3.1% -13.6% 14.5% 29.8% 1.8% 35.4%Equity / total assets 33.7% 24.0% 19.8% 18.2% 17.5% 14.6% 13.3% 10.7% 10.0% 10.2% 11.3% 10.9%


<date>



Finmeccanica Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BB+/BB+ NEG/STABLE/NEG Stable Restricted --/iBoxx HY/iTraxx S18 EUR 3.1bn

Company Description: Finmeccanica SpA (www.finmeccanica.com), headquartered in Rome, Italy, is a key player in the European aerospace and defense sector. The group operates in the following core business segments: 1. Aeronautics, 2. Space, 3. Helicopters, 4. Electronics for Defense, and 5. Defense Systems. Several businesses are run through joint ventures, e.g. the JV in space manufacturing activities with Thales. Finmeccanica also has some non-core assets in energy (a 45% stake in the business was sold in March 2011; the remaining stake to be sold in 4Q13) and in transportation. The business activities were mainly focused on Europe in the past (core markets Italy and the UK), which accounted for 74% of revenues in FY07. However, with the acquisition of US-based DRS Technologies in 2008, the company has improved its geographical diversification in the US and in the important US defense market. In FY12, Finmeccanica generated 18% of its revenues in Italy, 13% in the UK, 26% in the Rest of Europe, 24% in North America and 20% in the Rest of the World. The company employs more than 77,000 people. Shareholder structure: 30.2% Italian Ministry of Economy and Finance, rest free-float.

Moody's (09/13): There could be a downgrade if meaningful asset dispositions and follow-on debt repayments, in accordance with expectations, fail to be realized and/or if prospects for achieving requisite improvements in financial performance diminish. Implicit in the revised ratings is an expectation that a strong liquidity profile will be maintained; operating margins will trend toward the high single-digit percentage range; free cash flow will grow from modestly positive levels towards several hundred million euro, and leverage (Debt-to-EBITDA) will fall and remain below 4x (LTM 2Q13: 7.7x). S&P (02/13): S&P would consider a positive rating action if adjusted FFO/debt trended towards 30% (LTM 2Q13: 22%). S&P could take a negative rating action if FFO/debt fell towards 15% and debt to EBITDA dropped to about 4.5x (FY12: 4.1x). Fitch (09/13): Future developments that may lead to negative rating action include: new material adverse findings or actions in relation to the corruption and bribery investigations taking place; FFO-based lease-adjusted gross leverage sustained above 4x; adjusted FFO margin below 7%; consistently negative FCF; and further material cash restructuring charges.

SALES BY SEGMENT

0500

1,0001,5002,0002,5003,0003,5004,0004,500

Def

ense

and

Secu

rity

Ele

ctro

nics

Hel

icop

ters

Aer

onau

tics

Tran

spor

tatio

n

Def

ense

Sys

tem

s

Spa

ce

in E

UR

mn

9M12 9M13

EBITA BY SEGMENT

-500

50100150200250300350400450

Hel

icop

ters

Def

ense

and

Secu

rity

Ele

ctro

nics

Aer

onau

tics

Def

ense

Sys

tem

s

Spa

ce

Tran

spor

tatio

n

in E

UR

mn

9M12 9M13

Strengths/Opportunities – Well-diversified position in the European aerospace and defense industry

combined with a positive business mix – Strong position as a supplier to the Italian, UK and US defense markets – Focus on margin improvement and free cash flow generation – Sales visibility of 2.5 years – Asset disposal program resulted in agreements for the sale of two non-

core assets but the company needs to find a solution for the Transportation business

– Liquidity remains adequate (RCF of EUR 2.4bn without any covenants); well-diversified maturity profile with 2013 maturities already pre-funded in 2012

Weaknesses/Threats – High exposure to cuts in Italian defense budget and sequestration

measures in the US – Weaker business position in its non-core businesses – The need to turn around the heavily cash-absorbing Transportation

segment – a task, which had only limited success so far – Weaker credit metrics than those of its peers – Relatively weak profitability and cash flow generation

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0861828407 FNCIM 4.375% 05/12/2017 Ba1/BB+/BB+ 600mn IG language XS0182242247 FNCIM 5.75% 12/12/2018 Ba1/BB+/BB+ 500mn IG language XS0458887030 FNCIM 5.25% 21/01/2022 Ba1/BB+/BB+ 600mn IG language XS0215093534 FNCIM 4.875% 24/03/2025 Ba1/BB+/BB+ 500mn IG language

Covenants: The group's EUR 2.4bn RCF line does not contain any covenants.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 8,604 9,158 11,469 12,448 13,483 15,318 18,393 18,695 17,318 11,691 17,218 11,343EBIT margin adj. 4.3% 5.9% 7.1% 8.2% 8.8% 8.6% 8.2% 7.3% -13.1% 5.8% -1.9% 3.0%EBITDA rep. 637 820 1,100 1,413 1,793 1,832 2,119 2,017 -605 1,086 1,439 872EBITDA margin adj. 8.1% 9.7% 10.2% 12.2% 14.1% 12.7% 12.2% 11.5% -2.8% 10.1% 9.1% 8.1%Net income 199 850 386 1,030 521 621 718 557 -2,306 132 -786 -145Funds from operations (FFO) 616 831 751 971 1,081 1,588 1,516 1,413 908 482 1,183 693Operating cash flow 496 470 955 1,318 1,399 1,419 1,028 1,296 532 -909 841 -1,101Free cash flow rep. (after Capex) 217 62 519 445 271 430 418 379 -389 -1,389 -7 -1,779Dividend payment -84 -88 -111 -214 -151 -187 -256 -257 -259 -17 -17 -18Retained cash flow (RCF) 532 743 640 757 930 1,401 1,260 1,156 649 465 1,166 675Acquisitions / disposals 256 -46 -769 611 -360 -2,171 110 -83 507 32 86 24Share buybacks / issues 1 0 0 0 0 1,206 0 0 0 0 0 0Total debt rep. 3,050 3,323 2,269 2,860 2,824 6,360 6,508 5,801 5,885 6,745 6,146 6,651Net debt rep. 816 1,268 1,208 857 1,217 4,063 3,878 3,947 4,554 5,652 4,009 5,662Adj. for pensions 736 1,021 1,114 1,218 908 951 1,055 962 831 856 915 893Adj. for operating leases and others 191 172 122 410 543 567 607 1,368 1,332 1,332 1,336 1,553Net debt adj. 1,742 2,461 2,444 2,485 2,669 5,581 5,540 6,277 6,717 7,841 6,259 8,108

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

-20.0

-15.0

-10.0

-5.0

0.0

5.0

10.0



0500

1,0001,5002,0002,5003,0003,5004,0004,500

Liqu

idity

as

of 9

M13

ST-

debt

as

of 9

M13 20

13

2014

2015

2016

>201

6

in E

UR

mn

Bond Cash Availabe Credit Lines Bank Debt

CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 7.0 -1.2 6.1 -3.0 4.0 4.6 4.1 3.3 n/a -1.9 -0.8 -2.0EBIT gross interest cover adj. 2.2 0.8 1.4 1.2 1.3 1.0 1.1 1.1 n/a -0.8 -0.3 -0.7EBITDA net interest cover adj. 13.0 -1.9 8.9 -4.5 6.3 6.7 6.1 5.2 n/a 1.2 3.8 3.8EBITDA gross interest cover adj. 4.1 1.4 2.1 1.8 2.1 1.5 1.6 1.7 n/a 0.5 1.5 1.4FFO adj. / net debt adj. 36.8% 34.4% 31.2% 43.1% 44.4% 30.1% 29.2% 24.4% 15.4% 16.6% 20.4% 18.6%FFO adj. / total debt adj. 16.1% 18.7% 21.7% 23.9% 27.7% 21.3% 19.8% 18.8% 12.9% 14.6% 15.2% 16.6%RCF adj. / net debt adj. 32.0% 30.8% 26.6% 34.5% 38.8% 26.8% 24.6% 20.3% 11.5% 16.4% 20.2% 18.4%RCF adj. / total debt adj. 14.0% 16.8% 18.6% 19.1% 24.2% 19.0% 16.7% 15.6% 9.6% 14.4% 15.0% 16.4%Net debt adj. / EBITDA adj. 2.5 2.8 2.1 1.6 1.4 2.9 2.5 2.9 n/a 12.1 4.0 6.2Total debt adj. / EBITDA adj. 5.7 5.1 3.0 2.9 2.3 4.1 3.6 3.8 n/a 13.8 5.4 7.0FFO adj. / net interest adj. 12.0 -1.8 5.8 -3.2 3.9 5.8 4.4 3.7 27.4 2.3 3.1 4.4FFO adj. / gross interest adj. 3.8 1.3 1.3 1.2 1.3 1.3 1.2 1.2 1.0 1.0 1.2 1.6Total debt adj. / total capital. adj. 51.3% 55.6% 43.7% 45.4% 43.9% 55.9% 55.2% 53.1% 62.7% 64.5% 68.5% 71.9%Net debt adj. / net capital. adj. 31.5% 40.5% 35.1% 31.5% 32.8% 47.3% 45.5% 46.7% 58.4% 61.5% 61.8% 69.6%Equity / total assets 17.8% 18.6% 21.0% 22.7% 22.6% 20.5% 21.5% 22.8% 15.0% 15.0% 12.2% 11.4%


<date>



Thales Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA2/BBB+/-- NEG/POS/-- Stable Marketweight iBoxx/--/-- EUR 8.99bn

Company Description: Thales SA (www.thalesgroup.com), headquartered in Neuilly-sur-Seine, France, has a worldwide leading position in manufacturing mission-critical information systems for the defense and security, aerospace and transportation markets. In FY12, the group operated in the following divisions: 1. Aerospace & Transport - Aerospace provides onboard and ground systems for all types of aircraft (such as avionics, cabin systems, electrical systems, radars and sensors) and Transport offers railway signaling solutions and integrated transportation systems, while Space (a structural alliance with Finmeccanica) offers satellite systems through Thales Alenia Space (67% stake) and satellite services through Telespazio (33% stake); 2. Defense & Security – Defense provides defense systems for air, land, naval and joint forces (communications and intelligence, information and command systems, weapon systems and mission systems, and air defense missile systems), while Security offers ground transportation solutions, critical infrastructure security systems). Competitors vary in each segment and include Northrop, EADS, Lockheed Martin, BAE and Finmeccanica. In FY12, the group generated about 65% of its revenues in Europe (with France as its biggest single market, with 27% of sales, followed by the UK, with 12%), 14% in Asia, 11% in North America, 6% in the Middle East and 4% in ROW. The company employs about 65,000 people. Shareholder structure is 27% French State (42% of voting rights), 26% Dassault Aviation, rest 47% free float.

Moody's (04/13): Thales's rating could come under downward pressure if operational improvements fall short of anticipated targets in the medium term, as shown by a lack of progress towards an operating margin in the mid-to-high single-digit range and an RCF/Debt ratio approaching the 20% level (LTM 2Q13: 18%). Substantial declines in the company's backlog and/or a deteriorating liquidity profile (demonstrated by a cash/debt ratio below 50%) could also exert downward rating pressure. An upgrade is currently unlikely. Consideration for an uplift could be warranted by the expected realization of margins of 9% or better along with a debt/EBITDA ratio <2.5x (LTM 2Q13: 2.9x) and an RCF/debt ratio >20%. These results would have to be on a sustained basis and be coupled with the maintenance of a strong liquidity profile and a revenue backlog of approximately two years. S&P (06/13): The rating could be raised if Thales recorded sustainable FFO/debt of about 60% (FY12: 66%) and leverage of about 1.5x (FY12: 1.3x). S&P expects that Thales could achieve these targets in 2013 and 2014. In addition, an upgrade would require continuation of group's conservative financial policy, thereby constraining large acquisitions and shareholder remuneration. The outlook could be revised to stable if Thales were to carry out very sizable M&A or if it unexpectedly increased shareholder remuneration. Additionally, the outlook could be revised to stable if FOCF were lower than cash dividends and if unexpected operational problems led to substantial cash-effective charges.

SALES BY SEGMENT

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Aerospace & Transport Defense & Security Others

in E

UR

mn

2009 2010 2011 2012 LTM1H13

EBIT BY SEGMENT

-300

-200

-100

0

100

200

300

400

500

600

Aerospace & Transport Defense & Security Others

in E

UR

mn

2009 2010 2011 2012 LTM1H13

Strengths/Opportunities – Strong position as a leading player in the European defense electronics

market – Solid geographic diversification, with majority of sales generated in Europe – High barriers to entry, especially due to high technology requirements – Relatively good revenue visibility given strong order backlog (around two

years in sales) – Positive effects from restructuring program Probasis on profitability – Rating uplift from stake of French State

Weaknesses/Threats – Risk of increasing pressure on public budgets and, in turn, defense

budgets in the European countries – Relatively weak operating margins – High volatility of cash flows – High program risk that could lead to cost overruns – Competitive nature of the civil security market

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0550634355 HOFP 2.75% 19/10/16 A2/BBB+/-- 600mn -- XS0906792014 HOFP 1.625% 20/03/18 A2/BBB+/-- 500mn --

Covenants: According to S&P, covenants for EUR 1.5 bn RCF, maturing in December 2015, would only apply if the French government no longer held its

golden share in Thales and, simultaneously, the ratio of consolidated net debt to EBITDA exceeded 3.0x.


<date>




EUR mn 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 8,580 10,268 11,105 10,569 10,283 10,263 10,264 12,296 12,665 12,882 13,125 13,028 6,413 14,158 6,473EBIT margin adj. 6.4% 6.4% 5.9% 5.8% 8.1% 8.3% 8.6% 7.3% 7.1% 2.2% 0.6% 7.4% 6.0% 7.9% 7.2%EBITDA rep. 708 739 757 778 857 857 879 1,540 1,221 472 249 1,148 507 1,411 532EBITDA margin adj. 11.3% 16.5% 10.4% 10.1% 10.8% 11.0% 11.4% 10.5% 10.6% 5.5% 3.9% 10.6% 9.6% 11.4% 10.4%Net income 202 -362 114 125 341 343 391 889 560 -202 -108 511 162 536 190Funds from operations (FFO) 396 539 591 770 799 743 778 878 865 230 52 967 367 1,007 410Operating cash flow 539 667 306 637 359 610 754 985 821 1,155 523 577 -97 1,020 -257FCF rep. (after Capex) 194 131 -112 261 48 219 342 457 286 736 208 313 -239 583 -444Dividend payment -148 -153 -163 -162 -175 -134 -140 -169 -195 -205 -98 -64 -106 -155 -126Retained cash flow (RCF) 248 385 429 608 624 610 637 709 670 26 -46 903 261 852 284Acquisitions / disposals -1,995 508 339 198 112 231 323 -648 -72 -142 94 -94 3 164 -24Share buy back / issues 0 0 56 0 83 119 5 43 -45 22 1 -7 15 18 28Total debt rep. 3,243 3,317 2,376 2,131 2,165 1,905 2,390 1,840 2,057 2,175 2,664 1,932 1,837 1,848 1,957Net debt rep. 1,953 1,637 1,458 1,092 977 571 34 347 535 210 -95 -422 -147 -1,057 -438Adj. for pensions 69 458 764 824 1,160 1,334 1,230 874 966 1,045 1,084 1,323 1,332 1,925 1,889Adj. for op. leases and others 0 0 340 591 703 620 613 735 696 638 734 749 749 888 888Net debt adj. 2,022 2,095 2,562 2,507 2,840 2,525 1,877 1,956 2,197 1,894 1,723 1,650 1,935 1,756 2,339

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1H12

2012

1H13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5



0500

1,0001,5002,0002,5003,0003,5004,0004,500

Availableliquidity

as of1H13

ST-Debtas of1H13

2014 2015 2016 >2016

in E

UR

mn

Cash Committed lines Bond ST-Debt

CREDIT METRICS

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 5.0 4.1 3.5 3.6 5.4 5.9 8.5 7.6 7.5 2.2 0.6 7.9 10.3 12.9 17.4EBIT gross interest cover adj. 5.0 4.1 3.5 3.6 4.3 4.5 5.6 5.2 5.3 1.8 0.5 6.1 7.2 8.7 11.5EBITDA net interest cover adj. 8.9 10.6 6.2 6.3 7.2 7.8 11.4 10.9 11.0 5.4 4.0 11.4 15.2 18.6 24.4EBITDA gross interest cover adj. 8.9 10.6 6.2 6.3 5.7 6.0 7.5 7.4 7.8 4.5 3.3 8.8 10.7 12.5 16.1FFO adj. / net debt adj. 19.6% 25.7% 26.8% 33.5% 30.5% 32.1% 45.5% 50.1% 44.2% 17.8% 8.9% 64.8% 54.3% 65.3% 51.6%FFO adj. / total debt adj. 12.0% 14.3% 19.7% 23.7% 21.5% 21.0% 20.2% 28.4% 26.1% 8.7% 3.4% 26.7% 26.8% 24.6% 25.5%RCF adj. / net debt adj. 12.2% 18.4% 20.4% 27.0% 24.4% 26.8% 38.0% 41.4% 35.3% 7.0% 3.2% 61.0% 46.2% 56.4% 44.1%RCF adj. / total debt adj. 7.5% 10.2% 15.0% 19.1% 17.2% 17.5% 16.8% 23.5% 20.9% 3.4% 1.2% 25.1% 22.8% 21.3% 21.8%Net debt adj. / EBITDA adj. 2.1 1.2 2.2 2.4 2.6 2.2 1.6 1.5 1.6 2.7 3.3 1.2 1.4 1.1 1.4Total debt adj. / EBITDA adj. 3.4 2.2 3.0 3.3 3.6 3.4 3.6 2.7 2.8 5.5 8.7 2.9 2.8 2.9 2.8FFO adj. / net interest adj. 3.6 3.4 3.7 5.0 5.6 5.6 8.3 8.3 8.0 2.6 1.2 8.9 11.5 13.2 17.5FFO adj. / gross interest adj. 3.6 3.4 3.7 5.0 4.5 4.3 5.4 5.6 5.7 2.2 1.0 6.8 8.0 8.9 11.5Total debt adj. / total capital. adj. 56.4% 65.6% 66.1% 68.2% 72.2% 67.3% 66.5% 46.1% 49.2% 52.0% 56.3% 52.0% 51.0% 56.8% 56.8%Net debt adj. / net capital. adj. 44.1% 51.4% 58.9% 60.3% 64.7% 57.4% 46.8% 32.7% 36.4% 34.7% 33.2% 30.9% 34.0% 33.1% 39.4%Equity / total assets 14.1% 11.2% 11.9% 11.2% 11.9% 15.1% 15.3% 21.9% 22.0% 20.8% 19.4% 19.6% 19.8% 16.7% 17.5%


<date>




<date>




iBoxx Capital Goods Market Spreads

CAPITAL GOODS 5Y SENIOR CDS HISTORY

0

50

100

150

200

250


5Y C

DS

in b

p

ABBNVX ALOFP ATCOA SIEGR SUFP VOITGR



0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4

VOITGR

ATCOA

ABBNVX

SIEGR

SUFP

ALOFP


CAPITAL GOODS CASH CURVES

VOITGR 5.375% Jun-17

ATCOA 2.5% Feb-23

ABBNVX 2.625% Mar-19

ATCOA 2.625% Mar-19

SUFP

SIEGR

CEIFPALOFP

0

20

40

60

80

100

120

140

160

0 2 4 6 8 10 12 14 16mDur

ASW

in b

p


QUARTERLY BOND SPREAD MOVEMENTS SU

FP 5

.375

% J

an-1

5

SUFP

3.7

5% J

ul-1

8A

BBN

VX 2

.625

% M

ar-1

9

CEI

FP 4

.625

% O

ct-1

7A

LOFP

3.6

25%

Oct

-18

CE

IFP

3.2

5% S

ep-2

0AL

OFP

3%

Jul

-19

CEI

FP 3

.5%

Mar

-21

CE

IFP

4.3

75%

Nov

-19

ALO

FP 4

.5%

Mar

-20

ATC

OA

2.62

5% M

ar-1

9S

IEG

R 2

.875

% M

ar-2

8

SIEG

R 5

.25%

Sep

-66

CE

IFP

4.8

75%

Sep

-24

SU

FP 3

.625

% J

ul-2

0SU

FP 2

.5%

Sep

-21

ALO

FP 3

.875

% M

ar-1

6C

EIFP

3.8

75%

Sep

-16

VOIT

GR

5.3

75%

Jun

-17

ALO

FP 4

.125

% F

eb-1

7

ALO

FP 2

.875

% O

ct-1

5SU

FP 3

.5%

Jan

-19

ATC

OA

2.5%

Feb

-23

SU

FP 2

.875

% J

ul-1

6S

IEG

R 5

.125

% F

eb-1

7S

IEG

R 5

.625

% J

un-1

8SI

EGR

1.5

% M

ar-2

0S

UFP

4%

Aug

-17

SIEG

R 1

.75%

Mar

-21

0

20

40

60

80

100

120

140

160

180

200

ASW

in b

p



ABB

Alstom

Atlas Copco

Siemens AG

Schneider Electric

Voith

0

20

40

60

80

100

120

140

4 5 6 7 8 9 10

5Y C

DS

AA- A+ A A- BBB+ BBB

Source: MarkIT, UniCredit Research


Voith

Schneider Electric

Siemens AGAtlas Copco

Alstom

ABB

0

20

40

60

80

100

120

140

0 0.5 1 1.5 2 2.5 3 3.5Leverage

5Y C

DS


<date>



ABB Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA2/A/BBB+ STABLE/STABLE/STABLE Stable Underweight iBoxx/--/iTraxx S4 CHF 53.5bn

Company Description: ABB Group (www.abb.com), headquartered in Zurich, is a global leader in power and automation technology products. The company operates in the five segments: 1. Power Products, offering the key components to transmit and distribute electricity (e.g. transformers, switchgear, circuit breakers), 2. Power Systems, offering turnkey systems and services for power transmission, distribution grids and power plants, 3. Discrete Automation and Motion (automation equipment and services with products including motors, generators, drives, power electronics and robotics), 4. Low Voltage Products (produces, e.g., low-voltage circuit breakers, switches, control products) and 5. Process Automation, offering integrated solutions for instrumentation, automation and optimization of industrial processes. ABB is particularly strong in the European market (36% of sales in FY12), but also operates in Asia (27%), The Americas (27%) and the Middle East & Africa (10%). Shares are widely spread. ABB employs about 145,000 people.

Moody's (06/13): The stable outlook on the rating reflects ABB's solid positioning within the A2 rating category, reflecting: (i) the company's sustained high profitability, with EBITA margins in the mid-teens and return on assets well above 10%, although these ratios have weakened in the last three years, (ii) its ability to profitably grow revenue, raise operating cash flows and invest back in the business both organically and through well targeted and moderately priced acquisitions, while (iii) maintaining moderate debt levels despite an increase in leverage due to recent acquisitions. Downward pressure on ABB's rating could arise if its EBITA margins permanently dropped towards 10% or below with a corresponding decline in returns on assets, or if leverage increased from current levels, as exemplified by an RCF/net debt ratio meaningfully and sustainably below 40%. S&P (05/13): The stable outlook on ABB factors in the agency's anticipation that ABB will continue to balance investments, acquisitions, and shareholder payouts to achieve cash flow protection ratios that it views as adequate for the current rating. S&P expects that ABB's operational and financial performance will continue to be solid, despite increasing uncertainty about the global economy. Taking into account ABB's more acquisitive policy and the agency's cautious economic outlook, it expects that it will achieve adjusted FFO to debt of more than 45% and adjusted debt-to-EBITDA of 1.5x-2x over the next two years, even though 2013 may potentially be challenging. Following the acquisition of Thomas & Betts, ABB's flexibility to make further strategic acquisitions has declined, in S&P's opinion, at least over the medium term. However, it anticipates that the group will continue to make bolt-on acquisitions, albeit at a slower pace, in 2013 and 2014.


Power products25%

Power Systems18%

Low-Voltage Products

17%

Process Automation

19%

Discrete Automation &

Motion21%

OPERATIONAL EBITDA BY SEGMENT

-600 -300 0 300 600 900 1,200 1,500 1,800

Power Systems

Low-VoltageProducts

Process Automation

Power products

Discrete Automation& Motion

in USD mn

LTM9M13 2012 2011 2010

Strengths/Opportunities – Strong market positions, e.g. No. 1 in power products and systems – Solid geographical, customer and product diversification – High barriers to entry in ABB's markets – Favorable long-term market outlook for automation and power

technologies – Strong balance-sheet profile and liquidity position – Good cash generation capabilities

Weaknesses/Threats – Exposure to competitive and cyclical markets – Accelerating M&A activities have increased debt levels – Increasing competition from emerging market players resulting in price

pressure, which is being tackled by cost savings

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0763122578 ABBNVX 2.625% 26/03/19 A2/A/BBB+ 1,250mn --

Covenants: None.


<date>




USD mn 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 20,721 22,442 24,412 29,183 34,912 31,795 31,589 37,990 28,315 39,336 30,475EBIT margin adj. 6.8% 8.7% 11.5% 14.5% 13.6% 13.5% 12.5% 12.8% 11.8% 10.9% 12.2%EBITDA rep. 1,717 2,339 3,236 4,625 5,213 4,781 4,520 5,662 4,036 5,240 4,530EBITDA margin adj. 9.8% 11.3% 14.1% 16.6% 15.5% 15.6% 14.8% 15.4% 14.8% 13.9% 15.4%Net income 550 1,014 1,736 4,001 3,378 3,136 2,732 3,315 2,188 2,812 2,356Funds from operations (FFO) 1,259 1,927 2,510 3,321 4,729 3,447 3,598 4,287 3,089 4,190 3,340Operating cash flow 962 1,012 1,939 3,054 3,958 4,027 4,197 3,612 1,341 3,779 1,561Free cash flow rep. (after Capex) 419 556 1,403 2,298 2,787 3,060 3,357 2,591 503 2,486 869Dividend payment 0 -74 -297 -566 -1,212 -1,220 -1,305 -1,726 -1,747 -1,747 -1,800Retained cash flow (RCF) 1,259 1,853 2,213 2,755 3,517 2,227 2,293 2,561 1,342 2,443 1,540Acquisitions / disposals 1,281 -7 152 1,163 -513 -157 -2,139 -4,023 -3,689 -3,703 -888Share buy back / issues -36 35 47 42 -572 89 -150 110 47 90 3Total debt rep. 5,534 4,102 3,714 2,775 2,363 2,333 2,182 3,996 9,078 10,071 8,120Net debt rep. 1,334 508 -1,012 -5,335 -5,443 -7,219 -6,428 -1,771 3,653 1,590 3,444Adj. for pensions 2,114 1,084 502 346 971 1,052 643 1,307 1,354 2,142 2,082Adj. for operating leases and others 2,365 1,888 2,128 1,893 1,942 2,107 2,131 1,917 1,917 1,975 1,975Net debt adj. 5,813 3,480 1,618 -3,096 -2,530 -4,060 -3,654 1,453 6,925 5,707 7,501

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M130

2

4

6

8

10FFO adj. / total debt adj. Total debt adj. / EBITDA adj. (RS)


0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Liqu

idity

as

of 3

Q13

Rep

orte

dsh

ort-t

erm

debt 20

13

2014

2015

2016

2017

>201

7


CREDIT METRICS

2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 3.9 5.3 11.9 45.7 40.4 43.4 22.8 22.8 15.5 13.6 12.2EBIT gross interest cover adj. 2.7 3.7 7.3 11.6 11.0 19.5 14.7 16.0 12.2 11.0 10.3EBITDA net interest cover adj. 5.6 6.9 14.7 52.3 46.0 50.1 26.8 27.4 19.3 17.3 15.5EBITDA gross interest cover adj. 3.9 4.8 8.9 13.2 12.5 22.5 17.3 19.3 15.1 14.1 13.2FFO adj. / net debt adj. 25.2% 61.0% 171.7% -116.1% -198.3% -94.0% -108.5% 321.5% 66.1% 81.0% 65.4%FFO adj. / total debt adj. 14.6% 30.0% 43.8% 71.7% 95.1% 69.5% 80.0% 64.7% 37.1% 32.6% 40.3%RCF adj. / net debt adj. 25.2% 58.8% 153.3% -97.9% -150.4% -63.9% -72.8% 202.7% 40.8% 50.4% 41.4%RCF adj. / total debt adj. 14.6% 28.9% 39.1% 60.4% 72.1% 47.3% 53.7% 40.8% 22.9% 20.3% 25.5%Net debt adj. / EBITDA adj. 2.9 1.4 0.5 -0.6 -0.5 -0.8 -0.8 0.2 1.2 1.0 1.3Total debt adj. / EBITDA adj. 4.9 2.8 1.8 1.0 1.0 1.1 1.1 1.2 2.2 2.6 2.0FFO adj. / net interest adj. 4.0 5.7 11.8 38.9 42.6 38.6 22.8 21.9 15.7 14.6 12.7FFO adj. / gross interest adj. 2.8 4.0 7.2 9.8 11.6 17.4 14.7 15.4 12.3 11.9 10.8Total debt adj. / total capital. adj. 78.2% 64.0% 48.3% 29.8% 30.8% 27.3% 24.1% 30.4% 41.5% 44.6% 40.2%Net debt adj. / net capital. adj. 67.5% 46.7% 19.2% -35.4% -27.1% -38.5% -30.5% 8.1% 28.5% 24.5% 29.3%Equity / total assets 13.6% 17.2% 25.8% 37.3% 35.5% 41.7% 42.6% 41.2% 36.5% 35.6% 38.1%




Alstom Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa3/BBB/-- STABLE/NEG/-- Stable Marketweight iBoxx/--/iTraxx S18 EUR 8.1bn

Company Description: France-based Alstom (www.alstom.com) is a leading player in power generation, power transmission and rail infrastructure. Following the reshaping of its operational activities, the company is organized along the four segments Thermal Power, Renewable Power, Transport and Grid. In Power, the company offers power generation equipment, including turnkey plants, turbines, generators and utility boilers, as well as a full range of services for power generation. Main competitors include GE, Siemens and MHI (gas-fired and coal-fired power), Voith, Andritz and IMPSA (hydroelectric power) as well as Vestas, Gamesa, Siemens and GE (wind). In Transport, products and services comprise high-speed trains, commuter and regional trains, locomotives, freight cars, metros, trams, tram-trains, information systems and solutions as well as services for operators. Main competitors are Bombardier, Siemens and Ansaldo. In Grid, its high voltage transmission business, the company provides equipment to transport electricity over long distances and manage the network. In FY12/13, the company generated 32% of sales in Western Europe (thereof 11% in France), 10% in Eastern Europe, 13% in North America, 8% in South & Central America, 22% in Asia & Pacific and 15% in the Middle East & Africa. Alstom, which is listed on the Paris Stock Exchange, employs about 93,000 people. Largest shareholder is French conglomerate Bouygues with a stake of around 31%.

Moody's (06/13): Moody's stable outlook primarily reflects its expectation that Alstom will be able to improve its credit profile over the next 18-24 months to levels that are commensurate with the Baa3 rating. The current rating factors in: (1) a debt/EBITDA ratio of about 3.5x (4.4x at FYE13); (2) RCF/gross debt of 10%-15% (8.9%); (3) EBITA margins of around 7.0%-8.0% (6.2%); and (4) positive FCF generation after the payment of dividends. These metrics assume that Alstom will maintain cash on the balance sheet of EUR 2bn. The rating factors in the expectation that working capital will remain under control and that the company will maintain a sufficient liquidity buffer at all times. S&P (06/13): S&P expects credit metrics for Alstom to gradually return to a level consistent with a 'BBB' rating, including adj. FFO to debt in the middle of the 30%-45% range and debt to EBITDA below 3.0x. The agency believes that this will result from the company's sustained new orders, continuing efforts to improve its cost structure, and a moderate financial policy. In its base-case scenario, it expects Alstom's credit ratios to fully return to a rating-commensurate level over a two-year period of positive FOCF generation. It could lower the ratings on Alstom if profitability deteriorates in the current FY against FY13 or if the company proves unable to generate positive FOCF this year and next. Similarly, a worsening operating performance could lead to a downgrade, as could a more aggressive financial policy or less conservative leverage with any further increase in the absolute amount of debt.

SALES BY SEGMENT (LTM1H13/14)

Transport27%

Renewable Power

9%

Grid19%

Thermal Power45%

EBIT BY SEGMENT

-400 -200 0 200 400 600 800 1,000

Corporate & Other

Renewable Power

Grid

Transport

Thermal Power

in EUR mn

FY12/13 FY11/12 LTM1H13/14

Strengths/Opportunities – Strong market positions globally in its core businesses – High level of technological competence and economies of scale in R&D

and production, resulting in significant barriers to entry – Broad business, customer and geographical diversification – Healthy order backlog provides good sales visibility with 30 months of

sales – Strong risk management and improved process in project management

and execution – Accelerated cost-cutting program and targeted disposal should positively

influence the company's financial profile in the medium term

Weaknesses/Threats – Exposure to competitive markets, with competition especially increasing

from emerging market players – Weaker position in wind power and solar generation and in gas – High operating risk, i.e. project-related risk (such as cost overruns) – Below-average profitability, which is however being addressed by cost-

cutting measures – High cash-flow volatility due to large working capital swings in line with

new order development – Weak credit metrics for the ratings

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010948232 ALOFP 2.875% 05/10/15 Baa3/BBB/-- 500mn -- FR0011193531 ALOFP 3.875% 02/03/16 Baa3/BBB/-- 500mn -- FR0010850701 ALOFP 4.125% 01/02/17 Baa3/BBB/-- 750mn -- FR0010948240 ALOFP 3.625% 05/10/18 Baa3/BBB/-- 500mn -- FR0011531631 ALOFP 3% 08/07/19 Baa3/BBB/-- 500mn -- FR0010870949 ALOFP 4.5% 18/03/20 Baa3/BBB/-- 750mn --

Covenants: Interest cover of above 3x, total net debt leverage of below 3.6x





EUR mn 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 1H12/13 2012/13 1H13/14Sales 13,413 14,208 16,908 18,739 19,650 20,923 19,934 9,748 20,269 9,730EBIT margin adj. 5.4% 5.4% 6.8% 7.7% 8.7% 4.1% 5.9% 6.6% 6.4% 6.9%EBITDA rep. 1,231 1,178 1,606 1,882 2,048 1,435 1,693 967 1,732 953EBITDA margin adj. 9.3% 7.6% 8.9% 9.5% 9.8% 5.9% 7.5% 9.4% 8.0% 9.1%Net income 261 538 862 1,118 1,205 490 744 396 784 381Funds from operations (FFO) 627 450 1,071 1,409 1,557 688 891 628 1,006 496Operating cash flow 785 974 1,968 1,964 597 -55 -77 272 856 -271Free cash flow rep. (after Capex) 491 694 1,594 1,465 127 -560 -597 86 351 -521Dividend payment -4 -6 -117 -233 -333 -378 -206 -245 -243 -268Retained cash flow (RCF) 623 444 954 1,176 1,224 310 685 383 763 228Acquisitions / disposals 320 513 -398 14 43 -2,290 -99 -112 -428 15Share buy back / issues 6 0 100 29 31 9 -1 15 351 2Total debt rep. 2,571 2,822 1,927 1,356 2,614 4,466 5,022 4,959 4,955 5,525Net debt rep. 1,248 718 -358 -1,602 -1,772 1,715 2,918 3,299 2,724 3,667Adj. for pensions 1,435 649 481 666 634 732 928 995 1,165 1,109Adj. for operating leases and others -164 -286 -328 -225 -160 -30 -90 -90 -46 -46Net debt adj. 2,519 1,081 -204 -1,162 -1,298 2,416 3,755 4,204 3,844 4,730

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

2011

/12

1H12

/13

2012

/13

1H13

/14

0

1

2

3

4

5FFO adj. / total debt adj. Total debt adj. / EBITDA adj. (RS)


0

500

1,000

1,500

2,000

2,500

3,000

3,500

Availableliquidity

30.09.13

Reportedshort-term

debt

2013 2014 2015 2016 >2016

Cash Undrawn, committed lines Main debt maturities

CREDIT METRICS

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 1H12/13 2012/13 1H13/14EBIT net interest cover adj. 4.6 7.4 20.6 -269.0 26.7 5.6 6.0 4.7 4.6 4.5EBIT gross interest cover adj. 5.1 8.0 16.9 12.3 13.9 4.1 4.7 4.1 4.1 4.0EBITDA net interest cover adj. 7.9 10.5 26.6 -334.0 29.9 8.1 7.7 6.3 5.7 5.3EBITDA gross interest cover adj. 8.8 11.3 21.9 15.3 15.6 5.9 6.0 5.5 5.1 4.8FFO adj. / net debt adj. 25.8% 41.9% -526.1% -123.4% -122.4% 34.1% 25.1% 25.3% 27.6% 19.7%FFO adj. / total debt adj. 16.9% 14.2% 51.7% 79.8% 51.5% 15.9% 16.1% 18.1% 17.5% 14.1%RCF adj. / net debt adj. 25.7% 41.3% -468.9% -103.3% -96.8% 18.4% 19.6% 19.5% 21.3% 14.1%RCF adj. / total debt adj. 16.8% 14.0% 46.0% 66.8% 40.7% 8.6% 12.6% 14.0% 13.5% 10.1%Net debt adj. / EBITDA adj. 2.0 1.0 -0.1 -0.7 -0.7 2.0 2.5 2.5 2.4 3.0Total debt adj. / EBITDA adj. 3.1 3.0 1.4 1.0 1.6 4.2 3.9 3.5 3.8 4.2FFO adj. / net interest adj. 4.1 4.4 19.1 -268.4 24.8 5.4 4.9 4.0 3.8 3.1FFO adj. / gross interest adj. 4.6 4.8 15.7 12.3 12.9 3.9 3.8 3.5 3.3 2.8Total debt adj. / total capital. adj. 82.4% 69.0% 47.6% 38.3% 42.9% 55.4% 56.9% 56.2% 54.4% 57.3%Net debt adj. / net capital. adj. 75.4% 43.0% -9.8% -67.0% -46.0% 36.7% 45.9% 47.9% 43.0% 49.1%Equity / total assets 4.4% 7.1% 10.5% 11.9% 15.8% 14.0% 14.3% 14.2% 16.1% 16.5%


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Areva Analyst: Jana Arndt, CFA (UniCredit Bank), +498937813211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/BBB-/-- --/STABLE/-- Improving Marketweight iBoxx/--/-- EUR 6.6bn

Company Description: France-based Areva (www.areva.com) is the world's leading nuclear services group, with its products covering every stage of the nuclear cycle from the extraction of uranium, over recycling of the used fuel, to the design of reactors. In addition, the group also focuses on expansion in renewable energies. Areva operates in the following divisions: 1. Mining: operations include the exploration of new deposits, mining and milling of uranium ore and site rehabilitation following mining operations; 2. Front End comprises uranium conversion/chemistry, enrichment and fuel fabrication for two types of nuclear light water reactors; 3. Reactors and Services covers the design and construction of new nuclear plants as well as the maintenance and service of nuclear reactors; 4. The Back End business group concentrates on recycling and related activities regarding nuclear waste and decommissioning of nuclear power plants; and 5. Renewable Energy, which focuses on developing wind energy, bioenergy, solar power and energy storage solutions. Its main competitor is Russian AtomEnergoProm, which also covers all parts of the value chain, with the exception of recycling. Other competitors mainly provide only specific parts of the value chain and include GE/Hitachi, Toshiba, USEC and Urenco. At FYE 2012, the company's main market was France (35%), followed by Europe (excluding France, 25%), Asia-Pacific (18%), and North and South America (19%). Areva is largely government-owned, with the French state directly and indirectly holding 87% of the group. The company has around 48,000 employees.

S&P (09/13): The stable outlook reflects S&P's forecast that AREVA will generate at least EUR 1.1 bn in EBITDA (as defined by the company) in 2013, in line with its management's guidance, and limit debt increases. S&P foresees an adjusted ratio of funds from operations (FFO) to debt higher than 10% in 2013, which is weak for the rating, but should improve from 2014 as profits increase and capital expenditure recedes. S&P does not anticipate a change in its assessment of a "high" likelihood of state support for AREVA, or major negative implications for the French nuclear industry, at least over the medium term, based on the government's statements throughout the year. Consequently, any lowering of the sovereign rating on France would not affect the number of notches of support S&P incorporates in its ratings on AREVA. According to S&P's GRE criteria, a "high" likelihood of government support corresponds to a three-notch rating uplift if the relevant local currency sovereign credit rating is 'A-' or higher.


Reactors and Services

37%Back End 19%

Corporate2%

Front end 21%

Renewable Energy

5% Mining16%


-1,300

-1,100

-900

-700

-500

-300

-100

100

300

500

Reactorsand

Services

RenewableEnergy

Corporate Front end Mining Back End

in EUR mn

LTM1H13 FY12 FY11 FY10

Strengths/Opportunities – Leading market position with the group estimating to have a 25-30% global

market share – A large portion of revenue stems from recurring operations generated by

existing reactors – Good visibility due to long-term order backlog totaling EUR 44bn, covering

nearly five years of sales – Expected profitability improvements from cost savings/less cost overruns – Focus on cash generation and debt reduction – Assumed state support

Weaknesses/Threats – More adverse industry conditions following the Fukushima accident, with

Germany, for example, announcing the permanent withdrawal from its nuclear programs

– Track record of weak profitability and weak cash generation – Project execution risks, such as those experienced in the construction of

the OL3 nuclear EPR reactor in Finland – High leverage of the company and very weak credit metrics for the rating

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010804492 CEIFP 3.875% 23/09/16 --/BBB-/-- 1,250mn -- FR0011125442 CEIFP 4.625% 05/10/17 --/BBB-/-- 900mn -- FR0010817452 CEIFP 4.375% 06/11/19 --/BBB-/-- 750mn -- FR0010941690 CEIFP 3.5% 22/03/21 --/BBB-/-- 750mn -- FR0010804500 CEIFP 4.875% 23/09/24 --/BBB-/-- 1,000mn --

Covenants: None.


<date>




EUR mn 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 10,863 11,923 13,160 8,529 9,104 8,872 4,329 9,342 4,762EBIT margin adj. 5.0% 7.6% 1.4% -1.9% -3.5% -26.4% 12.1% 0.0% 6.9%EBITDA rep. 987 1,335 1,181 600 661 888 876 1,180 536EBITDA margin adj. 9.6% 12.1% 8.4% 4.0% 8.5% 4.6% 22.1% 11.4% 13.0%Net income 673 883 498 536 985 -2,644 107 -74 53Funds from operations (FFO) 1,168 1,190 607 173 387 66 456 406 324Operating cash flow 824 774 161 216 621 287 192 715 167Free cash flow rep. (after Capex) 22 -261 -1,580 -1,564 -1,345 -1,751 -727 -1,388 -456Dividend payment -429 -345 -326 -309 -313 -51 -108 -112 -33Retained cash flow (RCF) 739 845 281 -136 74 15 348 294 291Acquisitions / disposals -198 -1,813 403 186 -124 762 718 877 2Share buybacks / issues 0 5 268 178 970 -1,660 5 -42 43Total debt rep. 2,119 4,915 6,662 7,741 7,240 6,093 6,328 5,850 5,968Net debt rep. 865 4,002 5,499 6,193 3,672 3,547 3,687 3,949 4,471Adj. for pensions 1,122 1,175 1,531 1,418 1,605 2,000 1,918 2,026 2,008Adj. for operating leases and others 381 383 421 441 558 496 496 501 501Net debt adj. 2,368 5,560 7,451 8,052 5,835 6,044 6,102 6,476 6,981

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

2006 2007 2008 2009 2010 2011 2012 1H130

3

6

9

12

15

18

21

24



0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Ava

ilabl

eliq

uidi

ty a

sof

30.

06.1

3

2013

2014

2015

2016

2017

>201

7

in E

UR

mn


CREDIT METRICS

2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 8.1 8.2 1.2 -1.0 -1.5 -18.3 -11.0 0.0 -0.8EBIT gross interest cover adj. 4.6 6.1 1.0 -0.9 -1.3 -9.4 -7.7 0.0 -0.7EBITDA net interest cover adj. 15.5 12.9 7.3 2.2 3.6 3.2 5.1 4.4 3.1EBITDA gross interest cover adj. 8.9 9.7 5.8 2.0 3.1 1.6 3.6 3.6 2.5FFO adj. / net debt adj. 53.1% 23.1% 10.1% 4.7% 10.1% 4.3% 9.3% 8.5% 5.6%FFO adj. / total debt adj. 34.7% 19.8% 8.7% 4.0% 6.3% 3.0% 6.5% 6.6% 4.6%RCF adj. / net debt adj. 35.0% 16.8% 5.7% 0.9% 4.7% 3.4% 7.5% 6.7% 5.1%RCF adj. / total debt adj. 22.9% 14.5% 4.9% 0.7% 2.9% 2.4% 5.2% 5.2% 4.2%Net debt adj. / EBITDA adj. 2.3 3.9 6.7 23.5 7.6 14.7 6.7 6.1 9.6Total debt adj. / EBITDA adj. 3.5 4.5 7.8 28.0 12.2 21.0 9.7 7.9 11.7FFO adj. / net interest adj. 18.7 11.5 4.9 2.4 2.8 2.0 3.2 2.3 1.7FFO adj. / gross interest adj. 10.7 8.6 4.0 2.2 2.3 1.0 2.2 1.9 1.4Total debt adj. / total capital. adj. 31.9% 44.0% 55.1% 56.9% 50.7% 59.0% 59.3% 60.1% 60.7%Net debt adj. / net capital. adj. 23.4% 40.3% 51.5% 52.5% 39.0% 50.3% 50.4% 53.8% 56.0%Equity / total assets 27.1% 24.3% 21.0% 21.0% 27.7% 19.1% 18.8% 17.8% 17.4%


<date>



Atlas Copco Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA2/A/-- STABLE/STABLE/-- Stable Overweight iBoxx/--/-- SEK 221.7bn

Company Description: Atlas Copco (www.atlascopco.com), based in Stockholm, Sweden, is a world-leading provider of industrial productivity solutions. The product range includes compressors, expanders and air treatment systems, construction and mining equipment, power tools and assembly systems, and the offering of related services and rental equipment. The company's business is divided into four segments: 1) Compressor Technique (competitors include Ingersoll-Rand, Hitachi), 2) Construction Technique (Sandvik, Doosan, Caterpillar), 3) Mining and Rock Excavation Technique (Sandvik), and 4) Industrial Technique (Apex Tool Group, Ingersoll-Rand). In FY12, the company generated 30% of its revenues in Europe, 20% in North America, 10% in South America, 28% in Asia/Australia and 12% in Africa/Middle East. Atlas is listed on the Stockholm Stock Exchange, with Investor AB being the largest shareholder (23% of votes). In 2012, the company employed about 39,800 people.

Moody's (11/13): The stable outlook reflects Moody's expectation that Atlas Copco will maintain an adequate capital structure, as reflected in retained cash flow-to-net debt above 40% over a cycle and leverage well below 2.0x debt/EBITDA. Despite the uncertain economic environment in the near term, S&P also anticipates the group to sustain its solid operating performance, such as EBITA margin well above mid teens. S&P would consider raising the rating if Atlas Copco could sustainably improve its credit metrics to a level exceeding the agency's guidance for a higher rating, as well as demonstrate a stronger commitment to a conservative financial policy. This would be indicated by retained cash flow-to-net debt well above 50% and leverage below 1.0x debt/EBITDA, all on a sustainable basis. S&P (08/13): S&P said that its ratings on Atlas remain unaffected following the company's announcement of plans to acquire U.K.-based producer of vacuum products, Edwards Group Ltd. The ratings on Atlas Copco continue to reflect S&P's view of the company's "strong" business risk and "modest" financial risk. Post transaction, the agency believes that Atlas Copco's credit metrics will remain fully commensurate with the current ratings, namely with S&P's ratios of adjusted FFO to debt of more than 50% and adjusted debt to EBITDA of 1.5x.


Compressor Technique

39%

Construction Technique

14%

Industrial Technique

11%

Mining and Rock Excavation

Technique36%


-2,000-1,000

01,0002,0003,0004,0005,0006,0007,0008,0009,000

CompressorTechnique

Mining andRock

ExcavationTechnique

IndustrialTechnique

ConstructionTechnique

CommonGroup

Functions

SE

K m

n

FY10 FY11 FY12 LTM9M13

Strengths/Opportunities – Strong market positions in the individual segments, e.g. world market

leader in compressors – Good diversification in terms of geography and customers – Good presence in emerging markets with more than 45% of revenues – Solid exposure to aftermarket sales with about 40% of revenues – Above-average profitability due to good cost flexibility and high operating

efficiency, with high cash conversion

Weaknesses/Threats – Cyclical business portfolio – Mainly mature end markets for the company's largest segment

Compressors – Shareholder-friendly financial policy – High exposure to the currently struggling mining industry

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0757310270 ATCOA 2.625% 15/03/19 A2/A/-- 500mn -- XS0896144655 ATCOA 2.5% 28/02/23 A2/A/-- 500mn --

Covenants: None


<date>




SEK mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 47,562 44,619 43,192 42,205 50,512 63,355 74,177 63,762 69,875 81,203 67,785 90,533 62,622EBIT margin adj. -2.9% 12.6% 16.0% 17.1% 18.5% 19.4% 19.0% 14.6% 20.3% 21.9% 21.8% 21.6% 20.9%EBITDA rep. 9,226 8,623 9,769 10,254 11,328 13,866 15,886 11,560 16,413 20,082 16,540 21,930 14,899EBITDA margin adj. 20.1% 20.0% 23.2% 24.9% 22.8% 22.2% 21.8% 18.5% 23.8% 25.0% 24.7% 24.5% 24.1%Net income -3,830 3,294 4,671 6,581 15,373 7,469 10,190 6,276 9,944 12,988 10,517 13,933 9,179Funds from operations (FFO) 6,922 6,799 8,305 10,230 11,558 10,005 11,874 7,889 12,555 14,536 11,233 15,189 10,382Operating cash flow 7,299 7,662 7,860 9,999 9,205 7,679 8,883 14,604 10,825 8,421 8,699 13,823 9,241Free cash flow rep. (after Capex) 3,878 3,944 2,718 2,394 1,126 4,790 5,338 12,993 9,440 6,074 6,804 11,231 7,629Dividend payment -1,165 -1,219 -1,575 -1,890 -2,676 -2,903 -3,667 -3,652 -3,650 -4,853 -6,070 -6,070 -6,668Retained cash flow (RCF) 5,757 5,580 6,730 8,340 8,882 7,102 8,207 4,237 8,905 9,683 5,163 9,119 3,714Acquisitions / disposals 1,009 895 -426 5,609 22,616 -6,815 -848 597 -1,433 -2,946 -17 -300 -1,796Share buy back / issues 0 0 2 -4,192 -3,776 -24,441 -453 0 384 -7,072 481 271 -38Total debt rep. 13,272 9,999 7,662 9,519 7,140 22,669 28,482 23,967 20,114 20,435 21,102 21,052 25,427Net debt rep. 11,916 5,821 4,968 5,484 -13,264 19,196 23,027 11,802 5,850 14,719 12,330 8,636 9,371Adj. for pensions 1,778 2,501 2,656 2,076 1,667 1,484 1,893 1,817 1,632 1,652 1,753 2,072 2,054Adj. for operating leases and others 2,251 1,848 1,336 1,572 849 1,095 1,359 1,375 1,489 1,528 1,528 1,508 1,508Net debt adj. 15,945 10,170 8,960 9,133 -10,748 21,775 26,279 14,994 8,971 17,899 15,611 12,216 12,933

DEBT LEVERAGE

0%

20%

40%

60%

80%

100%

120%

140%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

0.4

0.8

1.2

1.6

2.0

2.4

2.8FFO adj. / total debt adj. Total debt adj. / EBITDA adj. (RS)


0

5,000

10,000

15,000

20,000

25,000

Availableliquidity

as of9M13

Reportedshort-

term debt

2013 2014 2015 2016 >2016

in S

EK

mn

Cash Undrawn, committed lines Debt maturities

CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. -1.4 9.6 18.8 11.5 12.7 13.5 7.8 9.8 24.9 41.1 23.9 22.9 19.2EBIT gross interest cover adj. -1.4 6.0 7.9 9.0 9.4 13.5 7.8 9.8 24.9 41.1 23.9 22.9 19.2EBITDA net interest cover adj. 9.5 15.3 27.4 16.8 15.6 15.4 9.0 12.3 29.3 46.9 27.2 26.0 22.1EBITDA gross interest cover adj. 9.5 9.5 11.4 13.2 11.6 15.4 9.0 12.3 29.3 46.9 27.2 26.0 22.1FFO adj. / net debt adj. 46.9% 71.0% 96.4% 117% -110% 47.2% 46.7% 55.0% 144% 83.5% 99.0% 128% 114%FFO adj. / total debt adj. 43.2% 50.3% 74.1% 81.0% 122% 40.7% 38.6% 30.4% 55.6% 63.3% 63.4% 63.4% 51.0%RCF adj. / net debt adj. 39.6% 59.0% 78.8% 96.0% -84.9% 33.9% 32.7% 30.7% 103% 56.4% 60.2% 78.2% 62.9%RCF adj. / total debt adj. 36.5% 41.8% 60.6% 66.6% 94.5% 29.2% 27.1% 16.9% 39.9% 42.7% 38.5% 38.8% 28.0%Net debt adj. / EBITDA adj. 1.7 1.1 0.9 0.9 -0.9 1.5 1.6 1.3 0.5 0.9 0.7 0.6 0.6Total debt adj. / EBITDA adj. 1.8 1.6 1.2 1.3 0.8 1.8 2.0 2.3 1.4 1.2 1.1 1.1 1.4FFO adj. / net interest adj. 7.4 12.4 23.5 17.0 16.0 11.3 6.8 8.6 22.7 34.5 19.1 18.3 15.9FFO adj. / gross interest adj. 7.4 7.7 9.8 13.3 11.9 11.3 6.8 8.6 22.7 34.5 19.1 18.3 15.9Total debt adj. / total capital. adj. 44.6% 41.3% 34.6% 34.0% 22.8% 62.9% 57.1% 51.5% 44.3% 45.1% 44.2% 41.8% 44.5%Net debt adj. / net capital. adj. 42.6% 33.3% 28.9% 26.3% -49.0% 59.4% 52.5% 36.9% 23.5% 38.4% 33.6% 26.3% 26.4%Equity / total assets 41.8% 45.9% 46.9% 47.0% 59.2% 25.8% 31.5% 37.8% 40.9% 38.4% 39.4% 42.3% 41.9%


<date>



GEA Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa3/--/BBB- STABLE/--/STABLE Stable Hold --/--/-- EUR 6.5bn

Company Description: Headquartered in Düsseldorf, Germany, GEA Group Aktiengesellschaft is one of the largest suppliers of process technology and components mainly for the food industry. The company operates in six segments: GEA Farm Technologies, GEA Heat Exchangers, GEA Mechanical Equipment, GEA Process Engineering, GEA Refrigeration Technologies and GEA Food Solutions. In FY12, it generated 35% of its sales in Western Europe, 23% in Asia-Pacific, 15% in North America, 10% in Eastern Europe, 7% in Latin America, 5% in the Middle East and 5% in Africa. GEA is listed on the stock exchange, with the Kuwait Investment Office as its largest shareholder (7.71%).

Moody's (04/13): Moody's stable rating outlook reflects GEA's solid business profile and its expectation that the group will be able to maintain historical credit metrics, such as debt/EBITDA below 3x and RCF/net debt well above 20%, over the business cycle. An upgrade would be considered if GEA continues to generate strong FCF, defends an EBITA-margin above 9% and reduces leverage to levels around 2.0x debt/EBITDA on a sustainable basis. The rating could come under pressure if EBITA-margins fall below 6% or if leverage remains above 3.0x debt/EBITDA for a prolonged period. Likewise, a recurring negative FCF or weakening of GEA's currently solid short-term liquidity profile could put pressure on the rating. Fitch (01/13): According to Fitch, the ratings could be upgraded if FFO-adjusted leverage decreases to below 2.5x, FFO margin (pre-rent and pre-interest) increases towards 12% and fixed-charge cover rises above 4.0x-5.0x through the cycle. The ratings could be downgraded if margins experience a material decline or credit metrics weaken, so that FFO-adjusted leverage is above 3.5x, free cash flow margin is below 1% or FFO fixed-charge cover is below 2.0-3.0x through the cycle.

SALES PER SEGMENT (LTM9M13)

GEA ProcessEngineering

31%

GEA MechanicalEquipment

16%

GEA FarmTechnologies

10%

GEA RefrigerationTechnologies

12% GEA FoodSolutions

6%

GEA HeatExchangers

25%

OPERATING EBIT PER SEGMENT

-50 0 50 100 150 200

GEA Farm Technologies

GEA Heat Exchangers

GEA Mechanical Equipment

GEA Process Engineering

GEA Refrigeration Technologies

Others

GEA Food Solutions

in EUR mn

FY11 FY12 LTM9M13

Strengths/Opportunities – Leading market positions in its mechanical engineering niche businesses – Well-diversified product portfolio – Good regional diversification with a high exposure to emerging markets

that represented around 40% of revenues in FY12 – Strong exposure to the structural growth market food (54% of sales in

FY12, 72% after disinvestment of GEA HX), which has proven to be somewhat less cyclical

– Good share of higher-margin service revenues that represented about 23% of sales in LTM3Q13

– Benefits from the ongoing restructuring of the Food division – Reduced business volatility following the successful disposal of the lower

margin HX business – Robust free operating cash-flow generation – Commitment to maintain its investment grade rating

Weaknesses/Threats – Exposure to competitive and fragmented end-markets – Risk of increasing competition from emerging market players – Operating risks related to project-cost overruns and/or delays – Risks in connection with the company's selective acquisition strategy

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment DE000A1KQ1M5 GEAGP 4.25 04/16 Baa3/--/BBB- 400mn --

Covenants: The company is subject to one covenant in its loan agreements.


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EUR mn 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 4,346 4,856 5,179 4,411 4,418 5,417 4,101 5,720 4,134EBIT margin adj. 7.9% 9.4% 10.7% 8.6% 9.0% 10.1% 8.0% 9.1% 8.9%EBITDA rep. 371 479 581 363 355 590 368 594 417EBITDA margin adj. 9.6% 11.0% 12.3% 10.9% 11.4% 12.6% 10.2% 11.6% 11.3%Net income -288 284 101 162 131 313 174 317 199Funds from operations (FFO) 195 286 515 201 240 335 191 369 285Operating cash flow 108 156 384 518 289 284 40 430 45Free cash flow rep. (after Capex) 8 26 219 383 201 129 -53 269 -40Dividend payment -19 0 -37 -74 -55 -74 -101 -102 -106Retained cash flow (RCF) 176 286 478 128 185 262 90 267 179Acquisitions / disposals -20 -65 -57 -19 -10 -164 -53 -56 -2Share buy back / issues 0 -96 -2 0 0 0 0 0 0Total debt rep. 107 240 560 486 540 908 1,169 1,138 1,036Net debt rep. -145 -36 129 -2 -12 475 698 394 581Adj. for pensions 573 541 537 523 560 604 631 740 737Adj. for operating leases and others 258 295 251 232 217 184 184 147 147Net debt adj. 686 800 917 754 765 1,263 1,512 1,281 1,465

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

2006 2007 2008 2009 2010 2011 9M12 2012 9M130.0

0.5

1.0

1.5

2.0

2.5

3.0



0

200

400

600

800

1,000

1,200

Availableliquidity

as of9M13

Reportedshort-

term debt

2013 2014 2015 2016 2017

in E

UR

mn

Cash Undrawn, committed lines Debt maturities

CREDIT METRICS

2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 4.9 5.8 7.8 4.6 4.5 5.6 4.5 4.7 4.6EBIT gross interest cover adj. 3.8 4.5 5.3 3.9 3.8 4.9 4.2 4.1 4.0EBITDA net interest cover adj. 5.9 6.8 9.0 5.8 5.8 7.0 5.6 6.0 5.8EBITDA gross interest cover adj. 4.6 5.3 6.1 4.9 4.8 6.1 5.2 5.2 5.0FFO adj. / net debt adj. 34.1% 41.4% 61.8% 33.9% 38.7% 30.6% 28.5% 31.7% 33.4%FFO adj. / total debt adj. 24.9% 30.8% 42.0% 20.6% 22.5% 22.8% 21.7% 20.1% 25.5%RCF adj. / net debt adj. 31.4% 41.4% 57.8% 24.1% 31.5% 24.7% 21.8% 23.8% 26.2%RCF adj. / total debt adj. 22.9% 30.8% 39.3% 14.6% 18.3% 18.4% 16.6% 15.0% 20.0%Net debt adj. / EBITDA adj. 1.6 1.5 1.4 1.6 1.5 1.9 2.2 1.9 2.1Total debt adj. / EBITDA adj. 2.2 2.0 2.1 2.6 2.6 2.5 2.9 3.1 2.7FFO adj. / net interest adj. 3.3 4.2 8.0 3.1 3.4 4.0 3.6 3.7 4.0FFO adj. / gross interest adj. 2.6 3.3 5.4 2.6 2.8 3.5 3.3 3.2 3.5Total debt adj. / total capital. adj. 40.7% 40.9% 45.4% 39.8% 39.4% 42.2% 45.4% 46.7% 44.9%Net debt adj. / net capital. adj. 33.4% 34.0% 36.1% 28.7% 27.4% 35.2% 38.8% 35.7% 38.4%Equity / total assets 25.5% 29.8% 28.4% 34.7% 36.3% 34.8% 34.2% 33.7% 35.6%


<date>



Schneider Electric Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapA3/A-/-- STABLE/CWN/-- Stable Marketweight iBoxx/--/-- EUR 34.4bn

Company Description: Schneider Electric SA (www.schneider-electric.com), headquartered in Rueil-Malmaison, France, is a world leading company in energy management. The company operates in five segments: 1. Partner (formerly Power, low-voltage products and solutions, life space products and renewable energies), 2. Infrastructure (medium-voltage activities, including those from Areva Distribution and from Telvent), 3. Industry (industrial automation & control as well as the custom sensors and technologies business), 4. IT (critical power & cooling), and 5. Buildings (building automation & security activities). Competitors include ABB, Siemens, Eaton, Legrand (power), Siemens, Rockwell (industry), Eaton, Emerson (IT), and Siemens, JC, Honeywell (Buildings). In FY12, the group generated 30% of its sales in Western Europe, 25% in North America, 27% in Asia-Pacific and 18% in Rest of the World. The company employs over 140,000 people in more than 100 countries. Shareholder structure: largely free float.

Moody's (08/13): Moody's stable outlook reflects the agency's expectation that Schneider's operating performance will remain supportive of the current rating given its broad end-market and regional diversification, strong market positions, healthy margins, strong FCF, and fairly strong liquidity. The stable outlook also reflects Moody's expectation that the company will reduce leverage over the next 18-24 months to levels compatible with the current rating. A material deterioration in operating margins <10%, FCF/debt <15% and, in particular, failure to reduce debt/EBITDA back towards 2.5x over the next 18-24 months and/or EBITA/interest < 5.0x for an extended period of time could be negative for the rating. S&P (11/13): S&P aims to resolve the CreditWatch status within the next three months, during which time S&P will monitor the progress of the potential acquisition of Invensys, in particular the completion of the last condition to be met, the regulatory approvals. In order to resolve the CreditWatch, S&P will review the pro forma business profile, the integration strategy, and the effect of incremental debt. S&P will also consider what the combined entity's financial policy will look like post acquisition. If S&P consider that Schneider's credit metrics will stay in line with FFO to debt of at least 35% and that the group will continue to generate positive discretionary cash flow, S&P would affirm the long-term rating at the current level.


Partner37%

Infrastructure23%

Industry18%

Buildings 7%

IT15%

EBITA BY SEGMENT

0 500 1,000 1,500 2,000

Buildings

Infrastructure

IT

Industry

Partner

in EUR mn

FY10FY11FY12LTM1H13

Strengths/Opportunities – Strong market positions in the respective businesses (e.g. no. 1 globally in

low-voltage electrical distribution, no. 1 globally in industrial control) – Good diversification by region, product and end-markets – Robust FCF generation, benefiting from high margins and low capital

intensity – Focus on increasing presence in faster growing emerging markets (already

about 40% of sales in FY12) – Positive implications of the integration of Invensys through, among other

things, better positioning in industry automation (in particular in software)

Weaknesses/Threats – Dependency on cyclical businesses, somewhat mitigated by the increasing

focus on solutions – In the short term, low headroom for further debt-financed acquisitions

under the rating following the acquisition of Invensys

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010526178 SUFP 5.375% 08/01/15 --/A-*-/-- 750mn -- FR0010922542 SUFP 2.875% 20/07/16 A3/A-*-/-- 500mn -- FR0010224337 SUFP 4% 11/08/17 --/A-*-/-- 1,030mn -- FR0011075183 SUFP 3.75% 12/07/18 A3/A-*-/-- 750mn -- FR0011119460 SUFP 3.5% 22/01/19 A3/A-*-/-- 500mn -- FR0010922534 SUFP 3.625% 20/07/20 A3/A-*-/-- 500mn -- FR0011561000 SUFP 2.5% 06/09/21 A3/A-*-/-- 600mn --

Covenants: none


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 9,061 8,780 10,349 11,679 13,730 17,309 18,311 15,793 19,580 22,345 11,408 23,946 11,430EBIT margin adj. 10.2% 10.5% 13.7% 14.6% 15.8% 15.4% 15.7% 12.6% 14.9% 13.8% 13.1% 13.4% 13.3%EBITDA rep. 1,390 1,351 1,649 1,933 2,393 2,977 3,219 2,294 3,477 3,577 1,803 3,680 1,785EBITDA margin adj. 16.2% 16.6% 17.2% 17.7% 18.6% 18.3% 19.1% 17.2% 18.9% 17.3% 16.8% 16.8% 16.9%Net income 447 454 858 1,030 1,347 1,622 1,723 866 1,796 1,877 921 1,927 863Funds from operations (FFO) 968 942 1,282 1,548 1,921 2,211 2,500 1,708 2,538 2,473 1,125 2,723 1,041Operating cash flow 933 1,254 1,184 1,325 1,588 2,090 2,428 2,547 2,262 2,188 672 2,722 597Free cash flow rep. (after Capex) 556 939 809 803 1,032 1,454 1,714 1,942 1,647 1,376 309 1,935 238Dividend payment -316 -327 -358 -418 -517 -699 -832 -351 -241 -925 -942 -991 -1,054Retained cash flow (RCF) 652 615 925 1,130 1,404 1,512 1,668 1,357 2,297 1,548 183 1,732 -13Acquisitions / disposals 3,203 -951 -794 -1,290 -660 -5,216 -594 -74 -1,662 -2,861 -129 -67 -234Share buy back / issues -318 -11 -217 -51 129 1,286 74 180 554 210 22 221 80Total debt rep. 2,370 2,688 1,500 3,008 4,342 6,187 6,205 6,324 6,125 8,037 8,515 8,132 8,011Net debt rep. -844 -399 524 1,624 1,798 4,918 4,553 2,812 2,736 5,266 6,155 4,395 5,276Adj. for pensions 1,179 921 662 768 755 949 1,440 1,359 1,489 1,711 1,710 1,959 1,946Adj. for operating leases and others 257 257 286 294 340 339 329 305 301 343 343 496 496Net debt adj. 592 779 1,472 2,687 2,893 6,205 6,321 4,476 4,526 7,319 8,207 6,850 7,718

DEBT LEVERAGE

0%

40%

80%

120%

160%

200%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1H12

2012

1H13

0.0

0.5

1.0

1.5

2.0



0

1,000

2,000

3,000

4,000

5,000

6,000

Liqu

idity

as

of 1

H13

Rep

orte

dsh

ort-t

erm

debt 20

14

2015

2016

2017

2018

and

beyo

nd


CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 5.0 17.1 15.3 12.9 15.7 9.5 10.3 6.1 9.4 9.3 8.6 8.4 8.6EBIT gross interest cover adj. 5.0 6.4 15.3 12.9 15.7 9.5 8.8 5.6 8.7 8.6 8.2 7.7 7.9EBITDA net interest cover adj. 8.0 27.0 19.2 15.6 18.5 11.3 12.6 8.3 11.8 11.7 10.8 10.6 10.8EBITDA gross interest cover adj. 8.0 10.2 19.2 15.6 18.5 11.3 10.7 7.7 11.0 10.7 10.2 9.7 9.8FFO adj. / net debt adj. 172% 128% 91.5% 59.8% 68.1% 36.4% 40.4% 39.6% 57.4% 34.6% 30.6% 41.0% 35.4%FFO adj. / total debt adj. 26.8% 25.9% 55.0% 39.5% 36.3% 30.3% 32.0% 22.2% 32.8% 25.1% 23.8% 26.5% 26.2%RCF adj. / net debt adj. 119% 86.4% 67.2% 44.2% 50.3% 25.2% 27.3% 31.7% 52.1% 22.0% 18.8% 26.5% 21.1%RCF adj. / total debt adj. 18.5% 17.4% 40.4% 29.2% 26.7% 20.9% 21.6% 17.8% 29.8% 16.0% 14.6% 17.2% 15.6%Net debt adj. / EBITDA adj. 0.4 0.5 0.8 1.3 1.1 2.0 1.8 1.6 1.2 1.9 2.0 1.7 1.9Total debt adj. / EBITDA adj. 2.6 2.7 1.4 2.0 2.1 2.4 2.3 2.9 2.1 2.6 2.6 2.6 2.6FFO adj. / net interest adj. 5.6 18.5 14.5 12.1 14.3 8.1 9.2 5.4 8.3 7.7 6.8 7.4 7.3FFO adj. / gross interest adj. 5.6 7.0 14.5 12.1 14.3 8.1 7.8 5.0 7.7 7.0 6.4 6.8 6.7Total debt adj. / total capital. adj. 33.7% 34.1% 24.7% 32.7% 38.0% 41.9% 41.9% 40.2% 34.5% 38.6% 39.3% 38.6% 38.9%Net debt adj. / net capital. adj. 7.3% 9.4% 16.5% 24.3% 24.6% 37.5% 36.3% 27.3% 23.2% 31.3% 33.5% 28.9% 32.0%Equity / total assets 57.1% 55.6% 55.6% 50.2% 46.6% 44.3% 44.5% 46.4% 48.3% 44.8% 45.2% 46.5% 46.3%


<date>



Siemens Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapAa3/A+/A NEG/STABLE/STABLE Stable Marketweight iBoxx/--/iTraxx S18 EUR 85.9bn

Company Description: Siemens AG (www.siemens.com), headquartered in Munich, Germany, is one of Europe's largest companies in electrical engineering and electronics. It operates in four core sectors: 1. Industry, comprising the divisions Industry Automation, Drive Technologies, and Customer Services; 2. Infrastructure & Cities, including the divisions Transportation & Logistics (Rail Systems, Mobility and Logistics), Power Grid Solutions & Products (Low and Medium Voltage, Small Grid) and Building Technologies; 3. Energy, comprising Fossil Power Generation, Wind Power, Oil & Gas, Power Transmission, and Service; and 4. Healthcare, which includes Imaging & Therapy, Clinical Products, Diagnostics, Audiology Solutions and Customer Solutions. Cross-sector activities include Siemens Financial Services. Siemens sells its products worldwide, with 52% of sales generated in Europe, CIS, Africa and the ME in FY13 (of this, 14% in Germany), 28% in the Americas and 20% in Asia/Australia. The company has around 362,000 employees. Shareholder structure: 5.6% Siemens family, the remainder is widely spread.

Moody's (07/13): According to Moody's, downward rating pressure could develop for any of several reasons, some of which are outlined as follows: 1. evidence of a structural reversal in the improvement of Siemens' profitability or asset quality; 2. a sustained erosion in its competitive strength and cash flow generation, particularly with respect to the group's core businesses; 3. a more aggressive financial policy, either through additional debt-funded acquisitions or share buybacks exceeding FCF generation, resulting in debt metrics below the expectations for the current rating on a sustained basis; or 4. an aggressive expansion of SFS operation, particularly in products unrelated to Siemens's business. The Aa3 rating is underpinned by the assumption that the group will be able to attain stronger financial ratios over the medium term, such as 1. forward-looking average annual operating margins significantly above 10%; 2. interest coverage greater than 6.0x; 3. RCF/net debt above 45%; and/or 4. debt/EBITDA of around 2.0x. S&P (11/13): The stable outlook reflects S&P's base-case expectation that Siemens' operating performance should improve from fiscal 2014, and that the group will maintain credit ratios commensurate with S&P's modest financial profile category, despite higher distributions to its shareholders. S&P expects Siemens to maintain credit ratios commensurate with 'A+' rating, including adjusted FFO to debt within the 45%-60% range and debt to EBITDA below 2.0x. S&P believes that Siemens has limited headroom under current ratios to cover further weakening in operating performance, increased needs for working capital investments, or shareholder distributions above its publicly stated policy

REVENUES BY TOTAL SECTORS (FY12/13)

Energy36%

Industry23%

Healthcare18%

Infrastructure & Cities23%

ADJUSTED EBITDA BY TOTAL SECTORS

0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000

Infrastructure &Cities

Healthcare

Industry

Energy

in EUR mn

FY10/11 FY11/12 FY12/13

Strengths/Opportunities – Globally leading market positions in many segments (typically Top 3 global

position) – Strong balance sheet combined with a strong liquidity position – Highly-diversified portfolio by geography, industry and customer – Strong financial flexibility and conservative financial policy – Benefits from implemented cost savings measures (Siemens 2014)

Weaknesses/Threats – Cyclicality of some of its business segments – Only moderate, but improving, profitability – Exposure to project risks – Relatively shareholder friendly

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0413806596 SIEGR 5.125% 20/02/17 Aa3/A+/A 2,000mn -- XS0369461644 SIEGR 5.625% 11/06/18 Aa3/A+/A 1,600mn -- DE000A1G85B4 SIEGR 1.5% 10/03/20 Aa3/A+/A 1,000mn -- DE000A1UDWM7 SIEGR 1.75% 12/03/21 Aa3/A+/A 1,250mn -- DE000A1UDWN5 SIEGR 2.875% 10/03/28 Aa3/A+/A 1,000mn -- XS0266838746 SIEGR 5.25% 14/09/66 A2/BBB+/BBB+ 900mn Hybrid

Covenants: None


<date>




EUR mn FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013Sales 87,325 72,448 77,327 76,651 75,978 73,275 77,395 75,882EBIT margin adj. 3.9% 7.3% 3.7% 8.9% 10.1% 12.1% 9.7% 7.9%EBITDA rep. 6,236 8,752 5,705 9,218 10,034 10,701 9,614 8,216EBITDA margin adj. 7.4% 12.5% 7.9% 12.7% 14.1% 15.4% 13.4% 11.7%Net income 3,312 4,030 5,886 2,497 4,068 6,320 4,283 4,410Funds from operations (FFO) 5,083 5,056 7,037 6,723 7,291 8,730 8,284 6,799Operating cash flow 4,981 6,159 7,795 5,487 9,007 7,606 6,420 6,647Free cash flow rep. (after Capex) 1,011 2,408 4,074 3,027 6,671 5,443 4,225 4,778Dividend payment -1,319 -1,443 -1,600 -1,541 -1,587 -2,514 -2,784 -2,680Retained cash flow (RCF) 3,764 3,613 5,437 5,182 5,704 6,216 5,500 4,119Acquisitions / disposals -1,856 -6,699 5,759 -207 -319 1,194 -747 -792Share buybacks / issues -108 868 -4,102 134 147 -764 -1,563 -1,409Total debt rep. 15,574 15,497 16,079 19,638 19,913 17,940 20,706 20,453Net debt rep. 4,764 11,299 9,034 9,309 5,559 4,995 9,291 10,662Adj. for pensions 3,734 2,155 3,548 5,110 8,292 7,042 9,670 9,158Adj. for operating leases and others -4,131 -5,181 -6,935 -7,010 -7,836 -8,503 -11,351 -10,881Net debt adj. 4,367 8,273 5,647 7,409 6,016 3,534 7,610 8,938

DEBT LEVERAGE

0%

30%

60%

90%

120%

150%

180%

210%

240%

270%

300%

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 20130.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5


DEBT MATURITY PROFILE (ACCORDING TO BLOOMBERG)

0

2

4

6

8

10

12

14

16

18

Liqu

idity

at

FYE

12/1

3

Rep

orte

dsh

ort-t

erm

debt 20

14

2015

2016

2017

>201

7

in E

UR

bn


CREDIT METRICS

FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013EBIT net interest cover adj. -36.1 21.4 -658.3 10.8 -56.7 -25.3 -171.8 -253.3EBIT gross interest cover adj. 14.2 21.4 -658.3 10.8 3.8 4.8 8.4 6.5EBITDA net interest cover adj. -67.8 36.7 -1395.0 15.3 -78.6 -32.3 -236.2 -374.8EBITDA gross interest cover adj. 26.6 36.7 -1395.0 15.3 5.3 6.1 11.6 9.6FFO adj. / net debt adj. 126.6% 66.8% 133.7% 99.1% 130.9% 263.5% 117.7% 83.6%FFO adj. / total debt adj. 36.4% 44.3% 59.5% 41.4% 38.7% 56.5% 47.1% 39.9%RCF adj. / net debt adj. 96.4% 49.4% 105.4% 78.3% 104.6% 192.4% 81.1% 53.6%RCF adj. / total debt adj. 27.7% 32.8% 46.9% 32.7% 30.9% 41.3% 32.5% 25.6%Net debt adj. / EBITDA adj. 0.7 0.9 0.9 0.8 0.6 0.3 0.7 1.0Total debt adj. / EBITDA adj. 2.4 1.4 2.1 1.8 1.9 1.5 1.8 2.1FFO adj. / net interest adj. -58.2 22.5 -1731.1 11.6 -58.0 -26.7 -204.6 -314.3FFO adj. / gross interest adj. 22.8 22.5 -1731.1 11.6 3.9 5.0 10.0 8.1Total debt adj. / total capital. adj. 33.2% 29.2% 31.0% 38.7% 41.0% 33.7% 37.6% 39.5%Net debt adj. / net capital. adj. 12.5% 21.5% 16.7% 20.9% 17.1% 9.8% 19.4% 23.7%Equity / total assets 33.1% 32.4% 29.0% 28.7% 28.3% 30.8% 29.0% 28.1%


<date>



Voith Analyst: Jana Arndt, CFA (UniCredit Bank), +49 89 378-13211 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/--/-- STABLE/--/-- Stable Marketweight iBoxx/--/-- not listed

Company Description: The Voith Group (www.voith.com), headquartered in Heidenheim, Germany, is a family-owned diversified mechanical engineering group. The company operates in the four main divisions Voith Hydro, Voith Industrial Services, Voith Paper and Voith Turbo, serving the energy, oil & gas, paper, raw materials and transport & automotive markets. In FY11/12, ending 30 September, the company generated 47% of its revenues in Europe, including its main market, Germany, with 21% of sales. The Americas and Asia accounted for 27% and 24% of revenues, respectively. Voith enjoys leading market positions as a global process provider for the paper industry (main competitor is Finnish Metso) and a leading provider of hydro power equipment (competitors include Alstom and Andritz). In addition, Voith Turbo and Voith Industrial Services have strong market positions in attractive niche markets. The company employs more than 42,000 people. Voith has production facilities and sales centers in about 50 countries worldwide. It is owned by the Voith family.

Moody's (02/13): Moody's stable outlook reflects Voith's strong business profile and the agency's expectation that the group will be able to maintain historical financial ratios such as an EBITA margin of at least 7%, positive free cash flow and net debt/EBITDA below 2.5x through the cycle. A rating upgrade would require a notable improvement in Voith's credit metrics compared to the levels reported for FY12. Moody's would consider an upgrade should Voith achieve an EBITA margin in the high single digits in percentage terms on a sustainable basis, RCF/net debt close to 30% and continued positive free cash flow. The rating could come under pressure if Voith's EBITA margin remained below 6.5% or its RCF/net debt ratio deteriorated below 20%. Likewise, recurring negative free cash flow or a weakening of Voith's solid liquidity profile could exert pressure on the rating.


Voith Hydro23%

Voith Industrial Services

21%

Voith Paper 29%

Voith Turbo27%


0 50 100 150 200

Voith Others

Voith IndustrialServices

Voith Hydro

Voith Paper

Voith Turbo

in EUR mn

FY09/10 FY10/11 FY11/12 LTM1H13

Strengths/Opportunities – Well-balanced business portfolio that has helped weather macroeconomic

downturns in the past – Strong market positions in its respective segments as the worldwide

leading process provider to the paper industry and leading provider of hydro power equipment, as well as good positions in niche markets at Voith Turbo and Voith Industrial Services

– Focus on technology leadership, which is reflected in continued high investments in R&D of between 4.5-5.0% of sales

– Strategic focus on reducing dependency on the paper business (in particular new-machinery business) by increasing (more stable) service activities in the group and continued growth of the other business activities, especially Voith Hydro

– Robust cash-flow generation, which in general has been able to finance large swings in working capital needs and high investment in the past

– Adequate liquidity position of the company – Prudent financial policy and strong commitment of the company to its

rating – High commitment of the founder family, which limits the risk of a takeover

Weaknesses/Threats – Strong, but declining, dependency on the struggling paper industry (with a

sales and profit contribution of 29% and 20% in LTM1H13, respectively). – Dependency on cyclical and competitive businesses – Structural changes in the market for graphic-grade papers, which has

required broad restructuring in the Paper business – Capital-intensive business with high working-capital needs and capex

requirements in the Voith Paper and Voith Hydro divisions – Financial flexibility is constrained by the shareholder background of the

company, which does not provide access to equity markets. However, this is partly mitigated by the company's proven access to the debt capital markets

– Limited financial disclosure – High absolute debt levels, mitigated by a high cash position

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0306488627 VOITGR 5.375% 21/06/17 Baa2/--/-- 600mn --

Covenants: none


<date>




EUR mn 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 1H12 2011/12 1H13Sales 3,109 3,262 3,551 3,739 4,190 4,934 5,083 5,198 5,594 2,742 5,724 2,717EBIT margin adj. 6.2% 6.6% 6.7% 9.1% 8.1% 6.5% 7.1% 7.5% 8.1% 5.8% 6.6% 4.5%EBITDA rep. 284 313 335 541 463 428 476 516 605 226 524 191EBITDA margin adj. 9.9% 10.3% 10.1% 12.3% 11.2% 9.4% 10.1% 10.6% 11.5% 9.0% 9.8% 7.7%Net income 82 92 98 247 179 144 77 121 200 63 114 60Funds from operations (FFO) 191 256 301 218 275 306 269 352 371 113 343 90Operating cash flow 420 192 181 232 347 431 304 390 244 -23 332 -23Free cash flow rep. (after Capex) 311 81 -2 65 154 150 50 157 33 -172 61 -116Dividend payment -18 -17 -35 -180 -85 -22 -34 -25 -98 -7 -15 -24Retained cash flow (RCF) 173 239 266 38 190 284 235 327 273 106 329 67Acquisitions / disposals 11 38 -46 160 -65 -110 -56 -4 2 -2 -3 -6Share buy back / issues 0 0 0 0 77 0 11 1 20 1 1 2Total debt rep. 678 919 952 622 1,029 1,017 1,404 1,477 1,261 1,238 1,234 1,223Net debt rep. 56 -82 17 193 245 262 374 260 284 473 275 444Adj. for pensions 394 396 399 435 425 422 470 529 514 516 590 589Adj. for operating leases and others 56 46 43 48 66 96 102 108 110 110 104 104Net debt adj. 505 360 459 675 736 780 946 897 908 1,098 969 1,138

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

70%

80%

2002

/03

2003

/04

2004

/05

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

1H11

/12

2011

/12

1H12

/13

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5


DEBT MATURITY PROFILE AS OF 31 MARCH 2013

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Liqu

idity

31.0

3.13

2013

2014

2015

2016

2017

in E

UR

mn

Cash & Marketable Securities Unused credit lines Bonds Bank loans

CREDIT METRICS

2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 1H12 2011/12 1H13EBIT net interest cover adj. 4.4 5.1 6.2 6.7 6.9 4.9 5.5 4.8 4.9 4.5 4.3 3.9EBIT gross interest cover adj. 2.7 2.6 3.0 4.1 4.4 3.2 3.9 3.4 4.0 3.9 3.8 3.5EBITDA net interest cover adj. 7.0 7.9 9.4 9.1 9.5 7.1 7.9 6.8 6.9 6.6 6.3 6.0EBITDA gross interest cover adj. 4.3 4.1 4.5 5.5 6.1 4.6 5.5 4.8 5.7 5.7 5.6 5.4FFO adj. / net debt adj. 39.2% 72.5% 70.2% 35.0% 40.4% 43.1% 31.6% 43.3% 45.1% 33.1% 39.4% 31.5%FFO adj. / total debt adj. 17.6% 19.2% 23.1% 21.4% 19.6% 21.9% 15.1% 18.4% 21.7% 19.5% 19.8% 18.7%RCF adj. / net debt adj. 35.6% 67.8% 62.6% 8.3% 28.9% 40.3% 28.0% 40.5% 34.2% 25.6% 37.8% 28.8%RCF adj. / total debt adj. 16.0% 17.9% 20.6% 5.0% 14.0% 20.5% 13.4% 17.2% 16.5% 15.1% 19.0% 17.1%Net debt adj. / EBITDA adj. 1.6 1.1 1.3 1.5 1.6 1.7 1.8 1.6 1.4 1.8 1.7 2.2Total debt adj. / EBITDA adj. 3.7 4.0 3.9 2.4 3.2 3.3 3.9 3.8 2.9 3.0 3.4 3.6FFO adj. / net interest adj. 4.5 6.2 8.4 4.7 6.1 5.2 4.6 4.8 4.4 3.9 4.3 4.1FFO adj. / gross interest adj. 2.8 3.2 4.0 2.8 3.9 3.3 3.2 3.4 3.6 3.4 3.8 3.7Total debt adj. / total capital. adj. 74.3% 75.1% 72.9% 60.9% 65.9% 64.2% 68.4% 67.6% 60.7% 59.7% 60.7% 60.3%Net debt adj. / net capital. adj. 56.4% 44.4% 47.0% 48.8% 48.4% 47.7% 50.9% 47.0% 42.6% 46.6% 43.7% 47.4%Equity / total assets 16.5% 16.0% 17.4% 21.0% 18.5% 16.7% 17.8% 18.8% 22.1% 23.1% 23.1% 23.8%


<date>




<date>




iBoxx Industrial Transportation Market Spreads

INDUSTRIAL TRANSPORTATION 5Y SENIOR CDS HISTORY

0

100

200

300

400

500

600

700

800

900


5Y C

DS

in b

p

ABESM BRCORO DPW PNLNA



0.0 0.5 1.0 1.5 2.0 2.5

DPW

ABESM

PNLNA

BRCORO


INDUSTRIAL TRANSPORTATION CASH CURVES

BRCORO 6.875% Apr-18

BRCORO 4.5% Dec-16

SISIM 4.5% Oct-20PNLNA 5.375%

Nov-17

DPWARRFP

ABESM

0

50

100

150

200

250

300

350

400

0 2 4 6 8 10 12mDur

ASW

in b

p


QUARTERLY BOND SPREAD MOVEMENTS D

PW 1

.875

% J

un-1

7

ABE

SM 4

.625

% O

ct-1

6

ARR

FP 4

.875

% J

an-1

9

BRC

OR

O 6

.875

% A

pr-1

8

AR

RFP

5%

Jan

-17

ARR

FP 5

.125

% J

an-1

8

PN

LNA

5.37

5% N

ov-1

7

ABE

SM 4

.375

% M

ar-2

0

ABE

SM 4

.875

% O

ct-2

1

ABE

SM 3

.75%

Jun

-23

SISI

M 4

.5%

Oct

-20

BRC

OR

O 4

.5%

Dec

-16

ABE

SM 5

.125

% J

un-1

7

ABE

SM

5.7

5% M

ar-1

8

ABE

SM

4.7

5% O

ct-1

9

DP

W 1

.5%

Oct

-18

AR

RFP

7.5

% J

an-1

5

ARR

FP 4

.375

% J

an-1

6

DPW

2.8

75%

Dec

-24

DPW

2.9

5% J

un-2

2

DPW

2.7

5% O

ct-2

3

0

50

100

150

200

250

300

350

400

450

500

ASW

in b

p



Abertis

Brisa

Deutsche Post

PostNL

0

50

100

150

200

250

300

350

400

450

500

6 7 8 9 10 11 12 13

5Y C

DS

in b

p




PostNL

Deutsche Post

Brisa

Abertis

0

50

100

150

200

250

300

350

400

450

500

2 3 4 5 6 7 8Leverage

5Y C

DS


<date>



Abertis Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378 12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/BBB/BBB+ --/NEG/NEG Stable Overweight iBoxx/--/-- EUR 13.1bn

Company Description: Abertis Infraestructuras S.A. (www.abertis.com) is one of Spain's leading telecommunications infrastructure and services groups and is the largest motorway operator in the world. Abertis resulted from the merger of ACESA and AUREA in 2003. The group operates in the following divisions: 1. Toll Roads (core business), 2. Telecoms (e.g. satellite company Hispasat) and 3. Airports (discontinued as of 3Q13). Most of its activities are located in Spain, but the group also operates in France where it acquired the concessionary company Sanef (in 2006). Abertis also has activities in Portugal, the UK and Latin America. In Spain, it operates more than 3,757km of motorways under direct management. The two largest concessions, ACESA and AUMAR, will expire in 2021 and 2019, respectively. In FY12, the company employed more than 11,500 people on average. Its shareholder structure is as follows: La Caixa (23.1%), OHL (18.93%), CVC (15.55%); the remainder is free-float.

S&P (06/13): The negative outlook reflects the risk that the weak economic environment in Europe could limit the forecast improvement in Abertis's credit metrics and the anticipated repayment of its recourse debt, both of which support S&P's "BBB" rating on Abertis. In S&P's view, traffic volumes on Abertis's European toll roads will continue to decline in 2013, which will only partially be offset by forecast sound traffic growth at its Latin American operations. The rating could be lowered if FFO to debt is less than 12% (FY12: 11.8%) or if the gradual repayment of the group's debt is slower than anticipated. The adoption of a more aggressive financial policy could also put pressure on the rating, as could a deterioration in the group's operating environment and/or an increase in country risk, for example, due to deterioration in the macroeconomic and sovereign environment. S&P could revise the outlook to stable if macroeconomic conditions improve and traffic stabilizes at the Spanish and French toll roads. We think stable outlook could also be supported by FFO to debt improving to more than 12% and if Abertis reduces recourse debt. Fitch (08/13): The negative outlook reflects the company's exposure to relatively weak Spanish toll-road business, a potential further weakening of the Spanish economy ("BBB"/Negative), as well as minor execution risk related to this year's corporate activity. Should the company's leverage increase to above 4.0x over the next two to three years (FY12: 3.9x) without increasing the size and quality of its recourse asset base, then a further negative rating action may result. Fitch does not view a positive rating action as likely until the Spanish macroeconomic environment has stabilized substantially.

AVERAGE DAILY TRAFFIC DEVELOPMENT

0

5,000

10,000

15,000

20,000

25,000

30,000

Spain France International Chile Brazil

2010 2011 2012 9M13*

EBITDA SPLIT BY COUNTRY (6M13)

0 500 1,000 1,500 2,000 2,500

Holding

Airports

Telecom

in EUR mn

2010 2011 2012 LTM6M13

Strengths/Opportunities – Largest toll-road operator in the world, with +7,300km under management – Toll-road tariffs linked to consumer price index protect against inflation – Mature toll-road network mitigates traffic and construction risk – Geographical diversification with activities in low-risk countries with a

supportive regulatory framework (France, Spain) and emerging markets (e.g. Chile, Brazil)

– Deleveraging despite recent growth initiative

Weaknesses/Threats – Regional focus is still on the weakening Spanish economy – Aggressive expansion strategy in the past – The main two concessions are shorter than those of its European peers:

ACESA and AUMAR will expire in 2021 and 2019, respectively – Diversification within the infrastructure sector to other activities with higher

business risk than toll-road operations

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment ES0211845237 ABESM 4.625% 14/10/16 --/BBB/BBB+ 1,000mn -- ES0211845211 ABESM 5.125% 12/06/17 --/BBB/BBB+ 1,000mn -- XS0602534637 ABESM 5.75% 09/03/18 Baa3/--/-- 1,150mn issued by HIT Finance, coupon step-up ES0211845252 ABESM 4.75% 25/10/19 --/BBB/BBB+ 750mn -- ES0211845203 ABESM 4.375% 30/03/20 --/BBB/BBB+ 660mn -- XS0271758301 ABESM 4.875% 27/10/21 Baa3/--/-- 1,500mn issued by HIT Finance ES0211845260 ABESM 3.75% 20/06/23 --/BBB/BBB+ 600mn --

Covenants: Abertis's 52.6%-owned subsidiary HIT has no longer to adhere to a financial covenant following the repayment of loans maturing in 2013.

Sanef expects to maintain adequate headroom under its financial covenants.


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 762 1,226 1,549 1,906 3,333. 3,620 3,676 3,935 3,914 3,912 2,992 4,039 3,521EBIT margin adj. 50.5% 53.9% 47.8% 43.8% 40.4% 41.1% 39.5% 37.8% 38.0% 38.9% 36.4% 32.2% 38.9%EBITDA rep. 538 916 1,050 1,204 2,092 2,274 2,256 2,432 2,407 2,452 1,900 2,459 2,254EBITDA margin adj. 70.6% 74.7% 67.8% 63.3% 62.9% 62.9% 61.5% 61.9% 61.6% 62.8% 63.6% 61.2% 64.3%Net income 192 355 492 515 582 756 685 722 743 795 1,054 1,083 602Funds from operations (FFO) 315 605 841 880 1,533 1,545 1,517 1,738 1,123 1,294 1,044 1,359 1,248Operating cash flow 348 611 893 1,050 1,370 1,703 1,249 1,751 1,139 1,109 986 1,221 1,187Free cash flow rep. (after Capex) 348 611 641 460 882 951 570 1,005 805 846 804 872 782Dividend payment 0 0 -243 -283 -294 -371 -380 -412 -506 -1,158 -365 -651 -395Retained cash flow (RCF) 315 605 598 597 1,240 1,174 1,137 1,326 616 136 679 708 853Acquisitions / disposals 0 0 -260 26 -3,642 -1,247 -862 -573 -44 927 1,603 94 541Share buy back / issues 0 0 0 -164 96 0 -267 -35 2 -159 -542 -542 0Total debt rep. 2,564 3,634 3,523 4,317 12,434 13,164 14,627 15,186 15,366 14,535 14,039 16,512 16,321Net debt rep. 2,547 3,608 3,500 4,228 12,102 12,802 14,328 14,844 14,883 14,144 12,417 13,876 12,958Adj. for pensions 0 0 9 32 80 70 57 74 71 71 71 197 197Adj. for operating leases and others 0 0 0 0 0 0 0 0 0 0 0 0 0Net debt adj. 2,547 3,608 3,508 4,260 12,182 12,872 14,385 14,918 14,954 14,214 12,488 14,073 13,155

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

1.5

3.0

4.5

6.0

7.5FFO adj. / Net debt adj. Net debt adj. / EBITDA adj. (RS)


01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,000

Liquidityas of3Q13

2013 2014 2015 2016 2017 > 2017

in E

UR

mn

Cash Undrawn, committed lines Bonds Loans/Other

CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 4.1 4.4 5.3 4.6 3.0 2.8 2.4 2.6 2.3 2.6 2.6 2.3 2.2EBIT gross interest cover adj. 3.7 4.2 5.0 3.8 2.7 2.7 2.3 2.5 1.8 1.9 1.9 2.3 2.2EBITDA net interest cover adj. 5.7 6.1 7.6 6.7 4.7 4.3 3.8 4.3 3.6 4.1 4.5 4.3 3.9EBITDA gross interest cover adj. 5.2 5.8 7.1 5.5 4.2 4.1 3.6 4.1 3.0 3.1 3.3 4.3 3.9FFO adj. / net debt adj. 12.4% 16.8% 24.0% 20.6% 12.6% 12.0% 10.5% 11.7% 7.5% 9.1% 8.8% 9.7% 11.9%FFO adj. / total debt adj. 12.3% 16.7% 23.8% 20.2% 12.3% 11.7% 10.3% 11.4% 7.3% 8.9% 7.8% 8.1% 9.5%RCF adj. / net debt adj. 12.4% 16.8% 17.0% 14.0% 10.2% 9.1% 7.9% 8.9% 4.1% 1.0% -1.0% 5.0% 6.7%RCF adj. / total debt adj. 12.3% 16.7% 16.9% 13.7% 9.9% 8.9% 7.7% 8.7% 4.0% 0.9% -0.9% 4.2% 5.3%Net debt adj. / EBITDA adj. 4.7 3.9 3.3 3.5 5.8 5.6 6.4 6.1 6.2 5.8 5.1 5.7 4.6Total debt adj. / EBITDA adj. 4.8 4.0 3.4 3.6 6.0 5.8 6.5 6.3 6.4 5.9 5.7 6.8 5.8FFO adj. / net interest adj. 3.4 4.0 6.1 4.9 3.5 2.9 2.5 3.1 1.7 2.2 2.0 2.4 2.2FFO adj. / gross interest adj. 3.1 3.8 5.7 4.0 3.1 2.8 2.4 2.9 1.4 1.6 1.5 2.4 2.2Total debt adj. / total capital. adj. 53.5% 52.4% 54.8% 58.7% 73.6% 72.3% 75.3% 72.4% 73.7% 76.6% 75.1% 70.2% 70.3%Net debt adj. / net capital. adj. 53.4% 52.3% 54.7% 58.2% 73.0% 71.8% 74.9% 72.0% 73.1% 76.1% 72.7% 66.5% 65.3%Equity / total assets 34.4% 34.0% 40.9% 35.9% 23.1% 24.1% 21.5% 23.4% 21.6% 19.4% 20.2% 23.9% 23.9%


<date>



Autoroutes Paris-Rhin-Rhone Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa3/BBB-/BBB+ STABLE/STABLE/STABLE Improving Overweight iBoxx/--/-- not listed

Company Description: Autoroutes Paris-Rhin-Rhone (APRR, www.aprr.com), headquartered in Saint-Apollinaire (France), is Europe's eighth-largest motorway operator. APRR builds and operates toll roads and other structures under license from the French government. Currently, APRR's network consists of nearly 2,300 km of privately-managed motorways. Besides the APRR network, the company has majority and minority stakes in several toll road and service companies (e.g. Axxès, a heavy goods vehicles remote toll collection company). Following the squeeze-out in December 2012, the entire share capital is owned by the Eiffarie consortium (consisting of the French construction company Eiffage [50%] and Macquarie Infrastructure Group [50%], a company owned by Macquarie European Infrastructure Fund). APRR's shares are no longer listed. In FY12, the company employed over 4,000 people.

Moody's (05/13): Upgrade potential if APRR shows a sustained improvement in key credit metrics (also taking into consideration the debt burden at Eiffarie), e.g. Moody's debt service cover ratio above 1.3x on a sustainable basis. Negative rating pressure if it appears that APRR is unable to achieve a consolidated ratio of FFO/ debt of at least 5% and DSCR of at least 1.1x. S&P (04/13): S&P anticipates that APRR will continue to deleverage at the group level, mainly through a cash sweep mechanism in place in Eiffarie's debt structure. In S&P's view, APRR will be able to maintain FFO/adj. debt and adj. debt/adj. EBITDA of at least 9% and 6.5x, respectively, and at least an "adequate" liquidity position and will continue to reduce its debt levels to achieve full repayment ahead of its concession maturities. Downside scenario possible if APRR's liquidity falls below an "adequate" level. S&P could raise the rating if the group's financial metrics were to improve to the extent that it could achieve and sustain an FFO/debt ratio of at least 11%.

Fitch (09/13): APRR's net debt/EBITDA consistently kept below 4.5x would be positive for the rating, while a rise to 6.0x (4.5x as of end-2012) could trigger a downgrade. Evidence of recessionary prospects for the French economy over a prolonged horizon (two years) could prompt a negative outlook.

TRAFFIC SPLIT

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000

Light Vehicles Heavy Vehicles

mn

km tr

avel

led

2009 2010 2011 2012 LTM9M13

SALES SPLIT BY BUSINESS SEGMENT

0 300 600 900 1,200 1,500 1,800 2,100 2,400

Toll revenue

Other revenue (retailfacilities, telecoms,

other)

in EUR mn

2009 2010 2011 2012 LTM9M13

Strengths/Opportunities – High-quality, mature and almost completed toll road network benefiting

from trans-European traffic – Positive regulatory environment protecting concessionaire against changes

in the law – Inflation-linked toll road tariffs – Strong cash-flow generation with cash conversion – Stability of the business model as the main concession will mature in 2032 – Manageable capex program with a volume of EUR 876mn between 2009

and 2014

Weaknesses/Threats – Aggressive financial profile with credit metrics weak for the current rating

category – Main shareholder, Eiffarie, is highly dependent on dividend payments from

APPR, only tight headroom at Eiffarie level under the implemented covenants

– No headroom under current ratings to realize external growth opportunities – 100% exposure to its home market France

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010766857 ARRFP 7.5% 12/01/15 Baa3/BBB-/BBB+ 700mn Coupon step-up, CoC FR0011153006 ARRFP 4.375% 25/01/16 Baa3/BBB-/BBB+ 500mn Coupon step-up, CoC FR0010989111 ARRFP 5% 12/01/17 Baa3/BBB-/BBB+ 1,000mn CoC, ratings trigger FR0011182930 ARRFP 5.125% 18/01/18 Baa3/BBB-/BBB+ 500mn -- FR0011050764 ARRFP 4.875% 21/01/19 Baa3/BBB-/BBB+ 500mn CoC

Covenants: APRR's bank facilities contain financial covenants: net debt/ EBITDA of <7.0x (4.8x at FYE 2012) and EBITDA/net financial expense of >2.2x (3.7x at FYE 2012). RCF contains a material adverse change (MAC)

clause on drawings. This MAC clause is also an "event of default" for the facility and all the Caisse Nationale des Autoroutes loans.


<date>




EUR mn 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 1,513 1,571 1,671 1,803 2,188 2,198 2,242 2,181 1,049 2,227 1,113EBIT margin adj. 41.6% 40.9% 44.4% 48.1% 39.7% 39.5% 41.9% 45.7% 47.4% 45.5% 45.1%EBITDA rep. 941 968 1,070 1,211 1,201 1,219 1,299 1,377 688 1,398 695EBITDA margin adj. 62.6% 61.8% 64.1% 67.3% 55.0% 55.5% 58.0% 63.2% 65.7% 62.9% 62.5%Net income 146 195 263 341 312 350 419 395 188 392 215Funds from operations (FFO) 521 449 575 712 637 826 771 787 329 751 380Operating cash flow 432 518 551 699 592 839 715 804 368 871 258Free cash flow rep. (after Capex) 175 -310 227 238 189 412 344 557 265 1,125 146Dividend payment -41 -104 -1,571 -652 -312 0 -292 -11 -1,096 -1,217 -188Retained cash flow (RCF) 480 345 -996 60 324 826 480 775 -767 -465 192Acquisitions / disposals 2 1 546 4 -106 -3 1 1 0 1 1Share buybacks / issues 1,268 34 0 0 0 0 0 0 0 0 0Total debt rep. 6,499 6,270 6,567 6,921 7,336 6,822 6,743 7,437 7,862 7,593 7,438Net debt rep. 5,012 5,653 6,437 6,849 7,094 6,717 6,689 6,223 7,003 6,891 6,767Adj. for pensions 20 14 17 30 32 37 41 43 43 28 33Adj. for operating leases and others 42 14 2 1 1 4 4 5 5 5 0Net debt adj. 5,073 5,681 6,456 6,880 7,126 6,757 6,735 6,272 7,051 6,923 6,800

DEBT LEVERAGE

0%

2%

4%

6%

8%

10%

12%

14%

2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H130

1

2

3

4

5

6



0

500

1,000

1,500

2,000

Liquidityas of1H13

<1Y >1Y< 2Y >2Y<3Y >3Y<4Y >4Y<5Y >5Y

in E

UR

mn

Cash Undrawn, committed lines Loans Bonds

CREDIT METRICS

2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 1.5 1.9 2.2 2.4 2.4 2.8 3.3 2.9 2.9 2.7 2.9EBIT gross interest cover adj. 1.5 1.7 2.1 2.4 2.3 2.8 3.3 2.8 2.8 2.6 2.8EBITDA net interest cover adj. 2.3 2.8 3.2 3.3 3.3 3.9 4.6 4.1 4.0 3.7 4.0EBITDA gross interest cover adj. 2.2 2.5 3.0 3.3 3.2 3.9 4.5 3.9 3.8 3.6 3.8FFO adj. / net debt adj. 10.2% 7.9% 8.9% 10.4% 8.9% 12.2% 11.5% 12.6% 11.7% 10.9% 11.8%FFO adj. / total debt adj. 7.9% 7.2% 8.7% 10.2% 8.6% 12.1% 11.4% 10.5% 10.4% 9.9% 10.8%RCF adj. / net debt adj. 9.4% 6.1% -15.4% 0.9% 4.6% 12.2% 7.1% 12.4% -3.8% -6.7% 7.3%RCF adj. / total debt adj. 7.3% 5.5% -15.1% 0.9% 4.4% 12.1% 7.1% 10.4% -3.4% -6.1% 6.6%Net debt adj. / EBITDA adj. 5.4 5.9 6.0 5.7 5.9 5.5 5.2 4.5 5.0 4.9 4.8Total debt adj. / EBITDA adj. 6.9 6.5 6.1 5.7 6.1 5.6 5.2 5.4 5.6 5.4 5.3FFO adj. / net interest adj. 1.3 1.3 1.7 2.0 1.8 2.7 2.7 2.3 2.3 2.0 2.3FFO adj. / gross interest adj. 1.2 1.2 1.6 2.0 1.7 2.6 2.7 2.2 2.2 1.9 2.2Total debt adj. / total capital. adj. 80.1% 78.3% 93.6% 98.2% 101.5% 96.9% 95.3% 91.3% 102.6% 101.3% 100.7%Net debt adj. / net capital. adj. 75.7% 76.5% 93.5% 98.2% 101.5% 96.8% 95.3% 89.8% 102.9% 101.4% 100.8%Equity / total assets 18.1% 20.3% 5.8% 1.6% -1.4% 2.8% 4.3% 8.0% -2.4% -1.4% -0.9%


<date>



Autoroutes du Sud de la France Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa1/BBB+/-- STABLE/STABLE/-- stable Marketweight iBoxx/--/-- not listed

Company Description: Autoroutes du Sud de la France (ASF) was established in 1957 and operates a total network of 3,173 km of motorways through the ASF and Escota concessions, with a further 81 km under construction. The concessions for ASF and Escota are long-term and end in 2032 and 2027. The ASF network covers an area along the LeMans/Lyons/Aix-en-provence corridor in mainland France (South of France and certain western regions). The network connects the Iberian Peninsula with Northern Europe and carries major European business and tourism flows as well as a large amount of regional traffic. Escota operates a network in the Provence-Alpes-Côte d'Azur region, from the Italian border (Alpes-Maritimes), to Aix-en-Provence and from Toulon (Var) to La Saulce (Hautes-Alpes). Following the French state's decision to fully privatize ASF, the construction and concession group Vinci gained full control of ASF in 2006.

Moody's (03/13): A rating upgrade could result from an improvement in all key credit metrics, including the ratio of FFO/debt moving into the mid-teens. However, the rating will also have to be considered in the context of the VINCI group as a whole. Over the medium term, increasing leverage at ASF, resulting in FFO/debt being persistently <8%, or FFO interest cover constantly <2.5x, could exert downward pressure on the rating. Over the longer term, a material deterioration in the key credit metrics and in the credit quality of the VINCI group could exert negative pressure on ASF's rating. S&P (03/13): The stable rating outlook mirrors that on VINCI and reflects S&P's view that VINCI will continue to benefit from stable cash flow generated by ASF's concession activities. S&P anticipates that the rating on ASF will evolve in line with that of VINCI. The rating could be lowered if VINCI failed to maintain a FFO/debt ratio of about 20%. Currently, S&P sees little scope to raise the rating, since VINCI's sizable capex program, its acquisitive growth strategy, and the prevailing economic conditions will constrain any attempts at debt reduction over the coming two years.

REVENUES BY SEGMENT

0 500 1,000 1,500 2,000 2,500 3,000 3,500

Tolls

Fees (commercialpremises, other)

Concessionoperators

in EUR mn

2009 2010 2011 2012 LTM1H13

TRAFFIC ACTIVITY ON ASF, ESCOTA

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000


mill

ions

of k

ilom

eter

s

2009 2010 2011 2012 LTM9M13

Strengths/Opportunities – Mature and almost completed network with low construction risk – Resilient and well diversified traffic mix – Contractually protected against changes in concession regulation – Toll road tariffs linked to Consumer Price Index protect against inflation

Weaknesses/Threats – Highly leveraged balance sheet – Financial covenants set by CNA allow for further leveraging – Aggressive dividend policy: 100% dividend payout – Large capex plan with EUR 1.4bn under the existing concession contracts – Rating linked to that of VINCI – Still weak (albeit stabilizing) traffic volumes of more volatile but higher-

margin heavy traffic

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0011394907 DGFP 2.875% 1/23 (Baa1/BBB+/--) 700mn CoC FR0010491720 DGFP 5.625% 7/22 (Baa1/BBB+/--) 1575mn -- FR0010883058 DGFP 4.125% 4/20 (Baa1/BBB+/--) 650mn CoC, ratings trigger FR0010737882 DGFP 7.375% 3/19 (Baa1/BBB+/--) 970mn CoC, ratings trigger FR0011119775 DGFP 4.000% 9/18 (Baa1/BBB+/--) 500mn --

Covenats: The EUR 500mn EIB loan carries a rating trigger, which enables EIB to enter into preliminary discussions on a change of conditions if ASF's rating falls below BBB+.


<date>




EUR mn 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 2,389 2,488 2,631 3,155 3,246 3,401 3,758 4,028 1,829 3,858 1,710EBIT margin adj. 43.9% 42.9% 43.7% 39.6% 44.4% 42.7% 41.8% 40.9% 40.5% 42.6% 42.6%EBITDA rep. 1,517 1,537 1,674 1,790 1,993 2,010 2,110 2,197 740 2,221 1,060EBITDA margin adj. 63.7% 61.8% 63.6% 56.7% 61.4% 59.1% 56.2% 54.6% 40.5% 57.6% 62.1%Net income 399 436 476 472 602 628 735 790 342 789 327Funds from operations (FFO) 892 929 1,127 1,028 1,169 1,249 1,216 1,259 519 1,274 574Operating cash flow 760 924 1,121 1,051 1,163 1,240 1,198 1,204 515 1,267 603Free cash flow rep. (after Capex) 116 435 641 640 728 706 530 344 63 381 314Dividend payment -160 -240 -277 -3,778 -473 -458 -632 -1,333 -56 -187 -510Retained cash flow (RCF) 732 688 850 -2,749 696 790 584 -74 463 1,086 65Acquisitions / disposals 0 -4 1 1 -6 0 0 0 0 0 0Share buybacks / issues 0 0 0 0 0 0 0 0 0 0 0Total debt rep. 8,428 8,619 8,049 10,586 10,437 10,450 10,429 11,639 11,723 11,662 11,716Net debt rep. 7,995 7,801 7,349 10,500 10,310 10,220 10,375 11,570 11,681 11,526 11,662Adj. for pensions 76 3 5 3 20 25 31 34 14 49 56Adj. for operating leases and others 0 0 0 0 0 0 0 0 0 0 0Net debt adj. 8,071 7,804 7,353 10,503 10,330 10,245 10,406 11,605 11,694 11,575 11,718

DEBT LEVERAGE

0%

3%

6%

9%

12%

15%

18%

2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H133.0

3.5

4.0

4.5

5.0

5.5

6.0



0

1,000

2,000

3,000

4,000

5,000

6,000

Availableliquidity

as of1H13

2013 2014 2015 2016 2017 >2017

in E

UR

mn

Cash Undrawn, committed lines Bonds Financial debt

CREDIT METRICS

2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 2.5 2.5 2.8 2.4 2.6 3.0 3.4 3.5 3.6 3.7 3.7EBIT gross interest cover adj. 2.4 2.5 2.7 2.3 2.6 2.9 3.4 3.5 3.5 3.7 3.7EBITDA net interest cover adj. 3.6 3.7 4.1 3.4 3.7 4.1 4.6 4.7 4.2 5.0 5.8EBITDA gross interest cover adj. 3.5 3.5 3.9 3.4 3.6 4.1 4.6 4.7 4.1 5.0 5.8FFO adj. / net debt adj. 11.1% 11.9% 15.3% 9.8% 11.3% 12.2% 11.7% 10.8% 11.1% 11.0% 11.3%FFO adj. / total debt adj. 10.5% 10.8% 14.0% 9.7% 11.2% 11.9% 11.6% 10.8% 11.1% 10.9% 11.3%RCF adj. / net debt adj. 9.1% 8.8% 11.6% -26.2% 6.7% 7.7% 5.6% -0.6% 3.3% 9.4% 5.9%RCF adj. / total debt adj. 8.6% 8.0% 10.6% -26.0% 6.7% 7.5% 5.6% -0.6% 3.3% 9.3% 5.8%Net debt adj. / EBITDA adj. 5.3 5.1 4.4 5.9 5.2 5.1 4.9 5.3 6.1 5.2 4.6Total debt adj. / EBITDA adj. 5.6 5.6 4.8 5.9 5.2 5.2 5.0 5.3 6.1 5.3 4.6FFO adj. / net interest adj. 2.1 2.2 2.8 2.0 2.1 2.5 2.6 2.7 2.8 2.8 3.0FFO adj. / gross interest adj. 2.1 2.1 2.6 1.9 2.1 2.5 2.6 2.7 2.8 2.8 3.0Total debt adj. / total capital. adj. 70.8% 70.6% 67.9% 96.1% 95.7% 94.5% 93.8% 99.1% 96.9% 94.7% 96.0%Net debt adj. / net capital. adj. 69.7% 68.5% 65.9% 96.1% 95.7% 94.4% 93.8% 99.1% 96.9% 94.7% 95.9%Equity / total assets 27.1% 27.4% 29.6% 3.4% 3.8% 4.9% 5.5% 0.8% 2.6% 4.8% 3.6%


<date>



Avanza Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB1/B+/-- STABLE/STABLE/-- Improving Buy (unsecured) /

Hold (secured) --/iBoxx HY/-- not listed

Company Description: Avanza (www.avanzagrupo.com), headquartered in Madrid, is a leading provider of bus transportation services in Spain. The company is owned by Grupo ADO, the second largest bus company in Mexico with a fleet of over 6,000 buses is predominately a long-distance bus company with limited experience in the urban and suburban segments. As of December 2012, Avanza generated revenue and EBITDA of EUR 427mn and EUR 92mn, respectively (22% margin) and cash flow conversion was at 73%. Avanza is the largest privately-owned operator in the urban and suburban bus transportation and the second largest long-distance bus transportation operator in Spain by fleet size. Avanza has four principal lines of business: urban, suburban, long-distance bus service and bus terminals, representing 40.4%, 44.4%, 10.9% and 4.3% respectively of revenue in 2012. The company's fleet comprised 1,885 vehicles on average during 2012; it has one of the youngest fleets in Europe with an average age of 6.5 years as of 31 December 2012. The company operates in ten regions across Spain and Portugal and employs over 5,300 staff. Avanza transported around 255 million passengers on its buses in 2012.

Moody's (06/13): The stable outlook on the rating reflects Moody's expectation that Avanza will 1. maintain its current performance and continue to generate positive free cash flow; and 2. reduce its net debt/EBITDA to below 6.0x. Positive: if Avanza 1. maintains its current operating performance; 2. generates sustained positive free cash flow; and 3. improves its leverage profile to adj. net debt/EBITDA solidly below 5.0x. Negative: if Avanza's liquidity profile and credit metrics deteriorate as a result of 1. weakening operational performance; 2. acquisitions; or 3. an aggressive change in its financial policy. Moody's would consider downgrading Avanza's ratings if 1. its adj. net debt/EBITDA remains above 6.0x for a prolonged period and adjusted gross debt/EBITDA trends towards 7.0x; or 2. Avanza reports negative FCF on a regular basis. Ratings will likely be unaffected by the recent change in ownership as the company's credit quality already factors in that the bonds' security and covenant package effectively ring-fences the group from the debt and exposures located at affiliates outside of Avanza's financing structure. Such structural enhancements include inter-creditor arrangements and financial covenants that limit indebtedness and restrict distributions to shareholders if certain credit metrics are breached. S&P (07/13): The stable outlook reflects S&P's view that cash flows will likely remain stable due to the predictable, contractual cash flow of its current concession portfolio, and that this, along with the completion of the refinancing, should continue to support an "adequate" liquidity position. S&P forecasts that Avanza will continue to deliver cash-flow-protection measures close to the higher end of the "highly leveraged" descriptor for financial risk profiles. Negative: FFO/debt falls to <9% and debt/EBITDA >7x. Debt could increase on acquisitions, or working capital loans to bridge delays in payments from the public authorities. If Avanza fails to renew some of its concession contracts, this would also reduce EBITDA and could put pressure on the rating. S&P considers an upgrade unlikely at this stage, as it believes that the company's financial risk profile will remain "highly leveraged."

REVENUE BY SEGMENT

-50

50

100

150

200

Urban transport Suburbantransport

Long distancetrasport

Bus stations Holding and inter-segmnent sales

EU

R m

n

FY 2010

FY 2011

FY 2012

LTM6M13

PASSENGER VOLUMES BY SEGMENT

178.0 178.0 171.0 170.3

72.0 81.081.0 77.4

5.03.0

3.0 2.9

100

150

200

250

2010 2011 2012 LTM6M13

mn

pass

enge

rs

Urban Suburban Long distance

Strengths/Opportunities – Leading market position and proven track record of concession renewal – Resilient, concession-based business model focused on "forced mobility"

in urban and suburban markets – Long-term concessions with earnings protection provide strong visibility – Young fleet, strong relationship with key customers and financial

institutions/banks – Experienced management team

Weaknesses/Threats – Exposure to Spanish public authorities – Concession renewal risk – Limited asset backing due to poor value preservation across bus fleet – Appetite to integrate other providers into its operations may limit any near-

term deleveraging – Unclear impact on medium/long-term strategy of takeover by Grupo ADO

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0936772341 AVAN 7.5% 06/01/18 B1/B+/-- 315mn callable from 06/01/15 @ 103.750; CoC @ 101 (active) XS0936805539 AVAN 9.5% 06/01/19 B2/B-/-- 175mn callable from 06/01/16 @ 104.750; CoC @ 101 (active)

Covenants: Financial covenants, which are tested on a quarterly basis.


<date>




EUR mn 2010 2011 1H12 2012 1H13Sales 377 413 211 427 208EBIT margin adj. 5.1% 5.4% 4.6% -2.1% 9.3%EBITDA rep. 80 86 42 83 45EBITDA margin adj. 21.3% 20.9% 20.0% 19.5% 21.8%Net income -24 -13 -20 -68 -21Funds from operations (FFO) 53 70 30 62 17Operating cash flow 33 29 58 70 27Free cash flow rep. (after Capex) 2 -6 46 45 25Dividend payment 0 -1 -1 -3 -1Retained cash flow (RCF) 53 69 29 59 16Acquisitions / disposals -29 -22 0 1 1Share buybacks / issues 4 5 12 12 0Total debt rep. 611 650 650 560 537Net debt rep. 532 566 521 513 483Adj. for pensions 0 0 0 0 0Adj. for operating leases and others 6 7 7 7 7Net debt adj. 539 572 527 520 490

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

2010

2011

1H12

2012

1H13

4.0

4.5

5.0

5.5

6.0

6.5



0

50

100

150

200

250

300

350

400

450

500

Liquidity asof 2Q13

2013 2014 2015 2016 >2016

in E

UR

mn

Cash Undrawn, committed lines Bonds Other financial debt

CREDIT METRICS

2010 2011 1H12 2012 1H13EBIT net interest cover adj. 0.3 0.4 0.5 -0.1 0.0EBIT gross interest cover adj. 0.3 0.4 0.4 -0.1 0.0EBITDA net interest cover adj. 1.4 1.6 1.9 1.3 1.2EBITDA gross interest cover adj. 1.3 1.5 1.7 1.3 1.1FFO adj. / net debt adj. 11.0% 13.3% 20.7% 13.2% 11.3%FFO adj. / total debt adj. 9.6% 11.6% 16.6% 12.1% 10.2%RCF adj. / net debt adj. 11.0% 13.1% 20.4% 12.6% 10.6%RCF adj. / total debt adj. 9.6% 11.4% 16.4% 11.6% 9.6%Net debt adj. / EBITDA adj. 6.7 6.6 4.1 6.2 5.7Total debt adj. / EBITDA adj. 7.7 7.6 5.1 6.8 6.3FFO adj. / net interest adj. 1.1 1.4 1.6 1.1 0.7FFO adj. / gross interest adj. 1.0 1.3 1.5 1.1 0.7Total debt adj. / total capital. adj. 109.2% 111.8% 113.4% 130.0% 68.4%Net debt adj. / net capital. adj. 110.7% 113.7% 117.3% 133.6% 66.1%Equity / total assets -5.0% -6.3% -7.2% -13.6% 26.6%


<date>



BCR Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa2/--/BBB NEG/--/NEG Weakening Hold --/iBoxx HY/iTraxx S18 not listed

Company Description: Brisa-Auto-Estradas de Portugal S.A. (www.brisa.pt), headquartered in São Domingos, is Portugal's largest motorway operator and a leading toll motorway operator in Europe. It holds six concessions in Portugal, for a total of 1,674 km and 24 motorways. In addition, Brisa owns Northwest Parkway (18 km) in Colorado in the US. In 4Q10, Brisa completed its corporate restructuring program. The latter involved the transfer of the Brisa concession (expiring in 2035) and all senior debt, including issued notes, from the Brisa holding to the wholly-owned ring-fenced SPV BCR. Operation and maintenance activities were transferred as well and are carried out by another subsidiary, Brisa O&M. In 2012, the group employed more than 3,000 people. Shareholder structure: José de Mello SGPS SA 30.45% (33.05.% of voting rights), Apollo/Arcus European Infrastructure Fund 19.09% (20.72%), Tagus (Mello/Arcus) JV 35.27% [38.29%], hence 92% of voting rights are controlled by Mello/Arcus.

Moody's (11/13): The negative rating outlook reflects the vulnerability of BCR's financial profile to any further operational challenges in the context of the terms of its financing structure and in light of its ongoing refinancing risk. Given the negative outlook, Moody's do not currently expect positive pressure on the rating. Moody's could change the outlook to stable if 1) traffic on BCR's network were to at least stabilize and the company's headroom against default covenant levels was sufficient to accommodate a modest operational underperformance due to, for example, traffic declines or cost increases, including higher cost of debt; and 2) there was continued evidence of BCR's ability to secure sufficient liquidity well in advance of its upcoming debt maturities. The rating would likely be adversely affected if 1) there are further declines in traffic volumes in the short term, with no indication of traffic stabilization in the medium term; 2) the company fails to comply with event of default covenants under the terms of the financing; or 3) liquidity concerns arise. Fitch (11/12): Under its base case, Fitch expects that BCR is able to deleverage to below the dividend lock-up level by the end of 2013 (6.5x Net Debt/EBITDA). However, if traffic falls more sharply, BCR's leverage may still be above this ratio in December 2013. In such a scenario, or if net debt/EBITDA falls to below the trigger threshold within 2013, but further trigger covenant breaches in the future are anticipated, Fitch would expect to downgrade BCR's ratings. Fitch does not anticipate a positive rating action on BCR's debt for the foreseeable future, since it would need to be preceded by a sustained improvement in Portuguese economic conditions and a return to a sustained traffic growth trend on BCR's concession.

OPERATING REVENUES BY SEGMENT BCR

0 100 200 300 400 500

Toll Revenue

Service stations

Other

FY11 FY12 LTM0613

TRAFFIC DEVELOPMENT BCR

-20%

-15%

-10%

-5%

0%

5%

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

Strengths/Opportunities – Long-term concession was extended by three years to 2035 – Toll road tariffs linked to Consumer Price Index protects against inflation – Ring-fenced entity provides creditors with increased protection – Covenant package limits dividend payments and leverage

Weaknesses/Threats – Large exposure to the Portuguese economy, which continues to be in

recession – Downgrade to sub-investment grade by Moody's – Continuously high leverage of the group – Increasing competition from shadow toll concessions

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment PTBSSGOE0009 BRCORO 6.875% 04/18 Ba2/--/BBB 300mn -- PTBRIHOM0001 BRCORO 4.500% 12/16 Ba2/--/BBB 600mn CoC @ 100, ratings trigger PTBSSDOE0002 BRCORO 6.250% 12/14 Ba2/--/BBB 225mn --

Covenants: BCR's senior debt contains financial covenants: 1. (senior) net debt/ EBITDA ratio trigger level is 6.5x and default covenant is 8.0x. As at 30

June 2013, BCR exceeded the trigger level, which was around 6.88x; 2. FFO interest cover of min. 2.25x (2.12x reported 1H13)


<date>



FINANCIAL STATISTICS (BCR)

EUR mn 2011 1H12 2012 1H13Sales 503 213 447 200EBIT margin adj. 42.3% 34.6% 37.8% 30.6%EBITDA rep. 353 141 320 130EBITDA margin adj. 70.3% 66.1% 71.7% 65.4%Net income 76 9 28 -3Funds from operations (FFO) 200 130 180 122Operating cash flow 198 135 168 126Free cash flow rep. (after Capex) 118 110 123 119Dividend payment 0 0 0 0Retained cash flow (RCF) 200 130 180 122Acquisitions / disposals 1 0 0 0Share buybacks / issues 0 0 0 0Total debt rep. 2,393 2,347 2,465 2,442Net debt rep. 2,252 2,172 2,154 2,072Adj. for pensions 1 0 0 0Adj. for operating leases and others 0 0 0 0Net debt adj. 2,254 2,172 2,154 2,072

DEBT LEVERAGE (BCR)

0%

2%

4%

6%

8%

10%

2011

1H12

2012

1H13

2013

e

2014

e

6.0

6.5

7.0

7.5



0

200

400

600

800

1,000

Liquidityas of1H13

<1 year 1-2 years 2-3 years 3-4 years 4-5 years >5 years

in E

UR

mn

Cash and Equivalents Undrawn lines EIB debt Bond debt

CREDIT METRICS

2011 1H12 2012 1H13EBIT net interest cover adj. 2.0 1.7 1.3 1.2EBIT gross interest cover adj. 1.9 1.6 1.3 1.1EBITDA net interest cover adj. 3.4 2.9 2.5 2.3EBITDA gross interest cover adj. 3.1 2.7 2.4 2.2FFO adj. / net debt adj. 8.9% 8.8% 8.3% 8.3%FFO adj. / total debt adj. 8.3% 8.2% 7.3% 7.1%RCF adj. / net debt adj. 8.9% 8.8% 8.3% 8.3%RCF adj. / total debt adj. 8.3% 8.2% 7.3% 7.1%Net debt adj. / EBITDA adj. 6.4 6.6 6.7 6.7Total debt adj. / EBITDA adj. 6.8 7.2 7.7 7.9FFO adj. / net interest adj. 1.9 1.7 1.4 1.3FFO adj. / gross interest adj. 1.8 1.6 1.3 1.2Total debt adj. / total capital. adj. 79.1% 78.6% 79.0% 78.9%Net debt adj. / net capital. adj. 78.1% 77.3% 76.7% 76.0%Equity / total assets 19.1% 19.4% 19.5% 19.5%


<date>



COFIROUTE Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index Mcap--/BBB+/-- --/STABLE/-- Stable Underweight iBoxx/--/-- not listed

Company Description: Cofiroute (www.cofiroute.fr), headquartered in Sevres, France, is a toll-road infrastructure company with two different concessions. The company operates a network of 1,100 km in western France. Its business includes the construction, operation and maintenance of the motorways under concession, valid until 2031. Besides its activities in France, Cofiroute has operations in the US, the UK and in Germany (10% shareholder in Toll Collect GmbH, Germany's satellite-based truck toll system). Shareholder structure: 83.3% Vinci, 16.7% Colas (part of the Bouygues group).

S&P (06/13): S&P equalized the ratings of Cofiroute with those of its sole shareholder Vinci (Baa1s/BBB+s/BBB+s). The stable outlook on Cofiroute mirrors that on Vinci, which, in turn, reflects S&P's view that Vinci will continue to benefit from stable cash flows generated by its concession activities, which offset its more cyclical contracting businesses. The rating on Cofiroute could come under pressure if Vinci's adjusted FFO to debt were to fall to less than 20%. This could occur, for instance, as a result of an aggressive debt-financed acquisition, or due to a severe and prolonged double-dip recession in the global economy. There is limited rating upside at present, given Vinci's sizable capex, its acquisitive growth strategy, and the current economic environment, all of which will constrain debt reduction in the next two years.

TRAFFIC SPLIT

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


mn

kilo

met

ers

2009 2010 2011 2012 LTM9M13

REVENUES BY SEGMENT

0

200

400

600

800

1000

1200

1400

Toll receipts Construction revenues Other revenues

2009 2010 2011 2012 LTM1H13

Strengths/Opportunities – Long-term concessions: main concession will last until 2030 and the A86

concession will end 70 years after the opening of the tunnel – Strong market position in a mature network – Toll road tariffs linked to Consumer Price Index guards against inflation – Contractually protected against changes in concession regulation – High profitability (EBITDA margin >60%) – Decreasing capex should allow debt repayments and improvement of

Cofiroute's credit profile

Weaknesses/Threats – Rating capped at the level of Vinci's rating, assuming Vinci retains

ownership – High leverage – Exposure to traffic risk

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment FR0010327007 DGFP 5% 5/21 --/BBB+/-- 1,100mn CoC, ratings trigger FR0000473993 DGFP 5.25% 4/18 --/BBB+/-- 600mn Retail size FR0000487217 DGFP 5.875% 10/16 --/BBB+/-- 500mn Retail size

Company Specific Information: Cofiroute's EUR 500mn undrawn facility is subject to a change-of-control clause for companies other than Vinci and

Colas (Cofiroute's other shareholder). However, it does not include financial covenants or material adverse change clauses.


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 801 829 862 889 954 1,472 1,353 1,288 1,295 1,334 646 1,341 624EBIT margin adj. 52.7% 57.2% 55.9% 53.2% 53.5% 38.8% 42.7% 45.9% 45.1% 45.1% 42.5% 45.0% 44.8%EBITDA rep. 543 585 601 600 651 724 770 805 808 851 399 858 408EBITDA margin adj. 67.8% 70.7% 69.8% 67.6% 68.2% 49.2% 56.9% 62.5% 62.4% 63.8% 61.8% 64.0% 65.4%Net income 215 220 260 283 301 355 324 311 312 294 130 294 133Funds from operations (FFO) 318 327 322 354 373 460 487 583 451 554 219 546 236Operating cash flow 373 278 308 355 459 498 544 542 458 560 220 552 231Free cash flow rep. (after Capex) 153 70 -181 -415 -307 -64 194 216 356 386 118 365 159Dividend payment -111 -128 -130 -156 -159 -191 -183 -181 -185 -305 -159 -288 -165Retained cash flow (RCF) 207 199 192 198 214 269 304 402 266 248 60 258 71Acquisitions / disposals 2 6 22 10 17 7 0 0 0 1 0 0 0Share buybacks / issues 0 0 0 0 0 0 0 0 0 0 0 0 0Total debt rep. 1,886 2,518 2,629 2,944 3,527 3,821 3,726 3,627 3,499 3,571 3,582 3,621 3,536Net debt rep. 1,636 1,699 1,995 2,555 3,030 3,320 3,314 3,331 3,181 3,173 3,222 3,157 3,085Adj. for pensions 0 17 20 18 0 0 0 2 3 4 10 5 13Adj. for operating leases and others 0 76 0 0 0 0 0 0 0 0 0 0 0Net debt adj. 1,636 1,792 2,015 2,574 3,030 3,320 3,314 3,333 3,184 3,177 3,233 3,161 3,098

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1H12

2012

1H13

0

1

2

3

4



0

500

1,000

1,500

2,000

2,500

3,000

Liquidityas of1H13

2013 2014 2015 2016 2017 >2017

in E

UR

mn

Cash Undrawn, committed lines Loans Bonds

CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 4.3 5.2 5.3 5.1 4.9 3.7 3.4 3.9 4.3 4.5 4.5 4.7 5.0EBIT gross interest cover adj. 3.6 3.5 3.3 3.1 2.7 3.2 3.0 3.8 4.3 4.3 4.4 4.6 5.0EBITDA net interest cover adj. 5.5 6.5 6.6 6.5 6.3 4.7 4.5 5.4 6.0 6.3 7.4 6.7 7.2EBITDA gross interest cover adj. 4.6 4.3 4.1 3.9 3.5 4.1 4.0 5.2 5.9 6.1 7.1 6.5 7.1FFO adj. / net debt adj. 19.4% 18.2% 16.0% 13.7% 12.3% 13.9% 14.7% 17.5% 14.2% 17.4% 16.9% 17.3% 18.2%FFO adj. / total debt adj. 16.9% 12.5% 12.1% 11.9% 10.6% 12.0% 13.1% 16.1% 12.9% 15.5% 15.2% 15.1% 15.9%RCF adj. / net debt adj. 12.7% 11.1% 9.5% 7.7% 7.1% 8.1% 9.2% 12.0% 8.4% 7.8% 7.8% 8.2% 8.7%RCF adj. / total debt adj. 11.0% 7.6% 7.2% 6.7% 6.1% 7.0% 8.2% 11.1% 7.6% 6.9% 7.0% 7.1% 7.6%Net debt adj. / EBITDA adj. 3.0 3.1 3.3 4.3 4.7 4.6 4.3 4.1 3.9 3.7 3.3 3.7 3.6Total debt adj. / EBITDA adj. 3.5 4.5 4.4 4.9 5.4 5.3 4.8 4.5 4.3 4.2 3.7 4.2 4.1FFO adj. / net interest adj. 3.2 3.6 3.5 3.8 3.6 3.0 2.9 3.9 3.4 4.1 4.1 4.3 4.7FFO adj. / gross interest adj. 2.7 2.4 2.2 2.3 2.0 2.6 2.5 3.7 3.3 4.0 4.0 4.2 4.6Total debt adj. / total capital. adj. 64.8% 69.7% 67.6% 67.9% 69.5% 68.4% 66.2% 64.2% 62.0% 62.6% 63.0% 62.8% 62.6%Net debt adj. / net capital. adj. 61.5% 61.2% 61.4% 64.7% 66.1% 65.3% 63.6% 62.3% 59.7% 59.8% 60.5% 59.5% 59.4%Equity / total assets 31.9% 28.7% 30.0% 29.7% 28.4% 28.5% 29.8% 31.6% 33.7% 33.2% 35.2% 33.0% 33.2%


<date>



Deutsche Post Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa1/--/BBB+ POS/--/STABLE Stable Marketweight iBoxx/--/iTraxx S15 EUR 30.3bn

Company Description: Deutsche Post DHL (www.dp-dhl.com), headquartered in Bonn, Germany, is the world's leading mail and logistics group. The company operates under the Deutsche Post and DHL brands in the following divisions: 1. Mail (delivery of letters and parcels within Germany); 2. Express (leading global provider of international courier and express services for business and private customers); 3. Global Freight Forwarding (one of the world's leading providers of air and ocean freight services and among the leading overland freight transport providers globally); 4. Supply Chain/CIS (contract logistics services and Corporate Information Solutions services). Main competitors include PostNL, TNT Express, UPS and FedEx (Express), DB Schenker, Kühne & Nagel (Forwarding/Freight/Supply Chain). Deutsche Post employs around 434,000 people. Shareholder structure: 21.02% KfW, rest free-float.

Moody's (08/13): The positive outlook reflects Moody's expectation that DP will further improve group-wide operating performance in terms of top-line earnings and profitability, and over the next 12-18 months, improve key credit metrics, albeit modestly, thereby maintaining a conservative financial policy and a solid liquidity profile at all times. DP's BCA could be upgraded if the group is able to sustain profitability improvements achieved during 2012, which would, in turn, enable it to maintain an EBIT margin of around 6% (FY12: 6.4%), an RCF/debt ratio of above 16% (FY12: 15.6%) and debt/EBITDA below 3.5x (FY12: 3.48x), all on a sustainable basis. Prior to any upgrade, Moody's would also require further evidence of the group's ability to halt the decline in the mail division's profitability. A higher BCA will result in a rating upgrade if Moody's support assumptions remain unchanged. Conversely, downgrade pressure on DP's BCA could occur if the group's EBIT margin (adj. for restructuring and other non-recurring charges) declines below 4% or if its RCF/debt ratio falls below 13% on an ongoing basis, in the absence of a convincing management plan to improve these ratios in the near-term. A lower BCA would result in a rating downgrade if support assumptions remain unchanged. To this extent, the rating agency notes the government's stated intention to reduce its stake in Deutsche Post to zero over time. Such a reduction could lead to Moody's revising its moderate support assumption. Fitch (02/13): Negative: FFO lease-adj. net leverage above 3.5x on a sustained basis and FFO fixed charges coverage below 2.0x; credit profile shifting towards more asset-heavy businesses; significant deterioration in business fundamentals due to a protracted economic downturn leading to significant volume and margins reduction in the DHL divisions. Positive: FFO lease-adj. net leverage below 2.5x on a sustained basis and FFO fixed charge coverage above 3.5x, an improving macro outlook, a successful substitution strategy, and continued expansion of the domestic parcel business, partially compensating for the declining traditional mail profits.

REVENUE BY REGION

0 5,000 10,000 15,000 20,000

Germany

Europe (excl.Germany)

Americas

Asia Pacific

Other regions

in EUR mn


EBIT BY DIVISION

-500 0 500 1,000 1,500

Mail

Express

Global Forwarding,Freight

Supply Chain

CorporateCenter/Other

in EUR mn


Strengths/Opportunities – Strong global presence and large, comprehensive network – Leading market positions in the company's businesses in Europe (Mail) as

well as globally (Logistics) – Strong and predictable cash flows in the Mail division – Improvements in profitability/cash flow from Strategy 2015 program – Commitment to Baa1/BBB+ rating and rating support from KfW stake

Weaknesses/Threats – Competitive and cyclical express deliveries and logistics business – Fixed-cost intensive mail business and capex in transportation network – Increasing competition and declining volumes in the domestic mail market

due to market liberalization and e-substitution – High off-balance sheet liabilities – Upgrade could be delayed by debt-financed M&A/ shareholder

remuneration

MAJOR BOND ISSUES ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0795872901 DPW 1.875% 27/06/17 Baa1/--/BBB+ 750mn retail size, CoC, EMTN XS0977500767 DPW 1.5% 09/10/18 Baa1/--/BBB+ 500mn retail size, CoC, EMTN XS0795877454 DPW 2.95% 27/06/22 Baa1/--/BBB+ 500mn retail size, CoC, EMTN XS0977496636 DPW 2.75% 09/10/23 Baa1/--/BBB+ 500mn retail size, CoC, EMTN XS0862952297 DPW 2.875% 11/12/24 Baa1/--/BBB+ 700mn retail size, CoC, EMTN

Covenants: The EUR 2.0bn RCF signed at FYE10 and expiring in December 2015 does not contain financial covenants. Source: Rating agencies, company data, iBoxx, UniCredit Research

<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 33,907 37,387 38,881 51,939 54,043 54,474 46,201 51,481 52,829 40,935 55,512 40,591EBIT margin adj. 8.2% 7.8% 9.5% 6.2% 5.0% 0.2% 1.9% 5.0% 5.7% 5.7% 5.8% 6.2%EBITDA rep. 3,731 4,007 4,832 4,200 4,329 2,095 1,851 3,131 3,710 2,828 4,004 2,969EBITDA margin adj. 12.9% 12.3% 14.2% 9.3% 9.1% 5.1% 5.4% 7.5% 8.1% 8.1% 8.2% 8.6%Net income 1,341 1,642 2,284 1,981 1,450 -1,979 693 2,630 1,266 1,196 1,780 1,400Funds from operations (FFO) 2,863 2,632 1,860 2,503 2,703 2,968 575 1,985 2,143 1,169 1,955 2,572Operating cash flow 2,543 2,360 1,557 1,865 2,662 3,601 1,056 1,803 2,280 192 1,533 1,359Free cash flow rep. (after Capex) 1,187 698 -348 52 653 1,941 -118 629 564 -905 119 430Dividend payment -445 -490 -564 -873 -959 -1,167 -759 -798 -885 -916 -916 -947Retained cash flow (RCF) 2,418 2,142 1,296 1,630 1,744 1,801 -184 1,187 1,258 253 1,039 1,625Acquisitions / disposals -839 1,779 -2,472 724 484 74 261 -114 121 -165 -94 102Share buybacks / issues 0 0 65 124 73 21 0 -10 -21 -26 48 -19Total debt rep. 4,808 5,289 5,741 5,443 4,978 4,097 7,439 7,022 7,010 3,671 4,816 4,989Net debt rep. 2,400 320 4,322 3,640 3,565 2,747 3,575 4,129 4,724 2,318 3,592 3,928Adj. for pensions 5,867 5,925 6,768 6,700 5,484 5,613 5,221 5,323 5,640 5,639 4,552 4,672Adj. for operating leases and others 4,270 3,908 5,430 5,013 5,536 5,812 862 1,248 814 5,295 5,112 5,295Net debt adj. 12,537 10,153 16,520 15,354 14,585 14,172 9,658 10,700 11,178 13,252 13,256 13,896

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M130x

1x

2x

3x

4x

5x

6x

7xFFO adj. / net debt adj. Net debt adj. / EBITDA adj. (RS)

DEBT MATURITY PROFILE AS OF 30 SEPTEMBER 2013*

0

1,000

2,000

3,000

4,000

5,000

6,000

Liqu

idity

as

of 3

Q13

shor

t-ter

mm

atur

ities

2014

2015

2016

2017

>201

7

in E

UR

mn

Cash Undrawn, committed lines Financial liabilities Bonds

CREDIT METRICS

2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 2.8 2.7 3.3 2.6 2.2 -1.1 2.6 -5.5 2.4 3.5 3.8 5.9EBIT gross interest cover adj. 2.8 2.7 3.3 2.3 1.2 0.1 0.4 1.4 1.6 1.8 2.1 4.4EBITDA net interest cover adj. 4.4 4.3 4.9 3.9 3.9 3.0 7.5 -8.3 3.4 5.1 5.4 8.2EBITDA gross interest cover adj. 4.4 4.3 4.9 3.4 2.2 1.8 1.1 2.2 2.3 2.6 3.0 6.2FFO adj. / net debt adj. 27.5% 31.6% 16.9% 21.5% 24.6% 28.3% 16.3% 27.7% 28.8% 21.7% 23.1% 32.2%FFO adj. / total debt adj. 23.0% 21.2% 15.5% 19.3% 22.4% 25.8% 11.6% 21.8% 23.9% 19.7% 21.2% 29.9%RCF adj. / net debt adj. 23.9% 26.8% 13.5% 15.8% 18.0% 20.0% 8.4% 20.3% 20.9% 14.6% 16.2% 25.4%RCF adj. / total debt adj. 20.1% 18.0% 12.4% 14.2% 16.5% 18.3% 6.0% 15.9% 17.3% 13.2% 14.9% 23.6%Net debt adj. / EBITDA adj. 2.9 2.2 3.0 3.2 3.0 5.1 3.9 2.8 2.6 3.1 2.9 3.0Total debt adj. / EBITDA adj. 3.4 3.3 3.2 3.5 3.3 5.6 5.4 3.5 3.1 3.4 3.2 3.2FFO adj. / net interest adj. 3.5 3.0 2.5 2.7 2.9 4.4 4.8 -6.4 2.6 3.4 3.6 7.8FFO adj. / gross interest adj. 3.5 3.0 2.5 2.3 1.6 2.6 0.7 1.7 1.7 1.7 2.0 5.9Total debt adj. / total capital. adj. 71.1% 69.5% 66.3% 64.0% 60.2% 63.5% 63.9% 57.9% 57.4% 58.4% 59.0% 61.1%Net debt adj. / net capital. adj. 67.4% 60.5% 64.4% 61.4% 58.0% 61.4% 55.9% 52.0% 52.8% 56.0% 56.9% 59.4%Equity / total assets 22.0% 24.5% 28.8% 31.6% 31.4% 3.7% 23.8% 28.3% 29.2% 33.6% 35.6% 28.6%

* Pro-forma for bond issuance in October 2013 Source: Company data, UniCredit Research

<date>



PostNL Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa3/BBB-/-- NEG/NEG/-- Weakening Underweight iBoxx/--/iTraxx S18 EUR 1.8bn

Company Description: PostNL NV (www.postnl.com), headquartered in the Netherlands, is a provider of mail, parcels and e-commerce services. The company is the dominant player in the mail market in the Netherlands and is also one of largest players in the European mail market. PostNL processes 8.8bn addressed postal items (including 100 million parcels) a year and delivers to more than 88mn addresses and households in the Benelux countries, Germany, the UK, and Italy. PostNL employed around 62,600 people at 9M12, with the majority employed in the Netherlands. Shareholder structure: largely free-float.

Moody's (10/13): The negative outlook reflects Moody's view that the company will be exposed to significant execution risk associated with its restructuring program at times when the domestic mail business will remain under pressure and cash outflows associated with the restructuring and the pension injections will be substantial. Upward pressure on the ratings is currently limited, but could develop over time if PostNL's profitability improves considerably or its debt reduces significantly. For upward rating pressure to develop, financial leverage would need to be trending towards 3x and free cash flow to turn positive. Moody's would consider downgrading PostNL's ratings further if the company fails to show a path of significant reduction in its financial leverage as demonstrated by a financial leverage significantly exceeding 5.5x at end-2013, 4.5x at end-2014 and reducing towards 3.5x thereafter. Failure to improve profitability beyond 2013, prolonged negative free cash flow and material weakening of liquidity could also exert negative pressure on the rating. S&P (04/13): The negative outlook reflects the likelihood of a further downgrade if PostNL is unable to achieve adjusted FFO to debt of 25% by 2015, with a clear improvement post 2013. Credit metrics could weaken if the rate of volume decline increases or if PostNL is unable to achieve its cost-saving targets in a timely fashion. S&P could revise the outlook to stable if PostNL successfully manages, over the medium term and on a sustainable basis, to compensate for the structural decline in addressed mail volumes through price increases, cost savings, and the satisfactory operating performance of its international and parcels segments. An outlook revision to stable depends on the company achieving and maintaining adjusted FFO to debt of about 25%.

SALES BY SEGMENT

0 500 1,000 1,500 2,000 2,500 3,000

Mail

Parcels

International

Mail other

in EUR mn

2010 2011 2012 LTM9M13

UNDERLYING EBIT BY SEGMENT

-50 0 50 100 150 200 250

Mail

Parcels

International

Mail other

in EUR mn

2010 2011 2012 LTM9M13

Strengths/Opportunities – Strong, cash-generating Dutch mail business – Dominant player in the domestic mail business – Strong brand recognition – Relatively solid profitability – Financial strategy to maintain an investment grade rating – Sale of TNT Express stake to increase financial flexibility, in the medium

term (debt reduction No.1 priority)

Weaknesses/Threats – Increasing competition in the Dutch mail business due to market

liberalization – Structural pressure in Mail in the Dutch business – Relatively low diversification into global trade and high exposure to the

structurally weakening mail business (Mail in NL) – Execution risk to the restructuring, as highlighted by failed TNT Express

stake disposal in 2012 – Restructuring program put pressure on operative key figures.

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment NL0006133175 PNLNA 5.375% 14/11/17 Baa3/BBB-/-- 640mn --

Covenants: PostNL's credit facilities and bonds do not contain financial covenants and are not subject to rating triggers.


<date>




EUR mn 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 11,782 11,866 9,106 9,329 10,060 11,017 11,152 10,402 4,293 4,297 3,129 4,330 3,101EBIT margin adj. 10.4% 7.8% 14.0% 13.4% 13.7% 11.8% 9.7% 9.4% 16.5% 10.4% 9.3% 9.9% 6.0%EBITDA rep. 1,548 1,478 1,419 1,451 1,594 1,541 1,381 1,137 600 529 331 541 235EBITDA margin adj. 14.6% 13.8% 17.3% 16.7% 16.9% 14.9% 13.3% 14.1% 17.3% 13.2% 11.7% 12.6% 8.9%Net income 604 301 721 770 828 783 560 289 282 -423 523 678 -190Funds from operations (FFO) 948 1,022 720 1,187 1,058 818 855 794 179 96 3 -43 99Operating cash flow 1,032 937 741 1,009 968 741 987 1,045 174 136 -104 -43 13Free cash flow rep. (after Capex) 560 583 457 696 588 372 642 790 65 -1 -251 -247 -67Dividend payment -189 -204 -237 -268 -282 -298 -324 -34 -119 -80 0 0 0Retained cash flow (RCF) 759 818 483 919 776 520 531 760 60 16 3 -43 99Acquisitions / disposals -38 -20 -15 11 1,331 263 24 -25 14 169 35 35 9Share buybacks / issues 0 0 -148 -457 -1,695 -681 -307 -3 2 -6 -2 -2 0Total debt rep. 1,761 1,543 1,491 1,284 1,566 2,085 2,241 2,016 1,584 1,670 1,617 1,615 1,618Net debt rep. 1,404 1,073 858 725 1,269 1,790 1,744 1,106 993 1,002 1,219 1,224 1,288Adj. for pensions 1,084 837 921 833 661 186 219 -25 176 23 18 411 557Adj. for operating leases and others 1,482 1,492 1,518 1,118 928 757 731 764 203 249 249 261 261Net debt adj. 3,970 3,402 3,297 2,677 2,859 2,732 2,693 1,846 1,372 1,274 1,486 1,896 2,106

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

60%

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

9M12

2012

9M13

0.0

1.0

2.0

3.0

4.0

5.0



0

100

200

300

400

500

600

700

800

900

Liquidityas of3Q13

2013 2014 2015 2016 2017 >2017

in E

UR

mn

Cash Undrawn, committed lines Bonds Other financial debt

CREDIT METRICS

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 5.2 4.2 8.6 13.5 11.6 7.6 4.9 4.1 5.6 3.7 2.4 3.4 1.7EBIT gross interest cover adj. 4.8 3.9 5.1 6.0 4.4 4.9 3.7 3.8 5.0 3.2 2.2 3.3 1.7EBITDA net interest cover adj. 7.3 7.5 10.6 16.8 14.3 9.7 6.7 6.2 5.9 4.7 -1.1 4.4 2.3EBITDA gross interest cover adj. 6.8 6.9 6.4 7.4 5.4 6.2 5.1 5.6 5.3 4.0 -1.0 4.2 2.3FFO adj. / net debt adj. 30.0% 36.8% 29.8% 49.4% 42.3% 36.3% 38.5% 53.9% 18.2% 13.2% 7.8% 2.0% 6.6%FFO adj. / total debt adj. 27.5% 32.3% 25.0% 40.9% 38.3% 32.7% 32.5% 36.1% 12.7% 8.7% 6.1% 1.6% 5.7%RCF adj. / net debt adj. 25.2% 30.8% 22.6% 39.4% 32.4% 25.4% 26.4% 52.1% 9.5% 7.0% 7.8% 2.0% 6.6%RCF adj. / total debt adj. 23.1% 27.0% 19.0% 32.6% 29.4% 22.9% 22.3% 34.9% 6.7% 4.6% 6.1% 1.6% 5.7%Net debt adj. / EBITDA adj. 2.3 2.1 2.1 1.7 1.7 1.7 1.8 1.3 1.8 2.2 -7.5 3.5 4.6Total debt adj. / EBITDA adj. 2.5 2.4 2.5 2.1 1.9 1.8 2.2 1.9 2.6 3.4 -9.6 4.2 5.4FFO adj. / net interest adj. 5.1 5.7 6.6 14.3 10.2 5.8 4.7 4.2 2.0 1.4 0.6 0.3 0.7FFO adj. / gross interest adj. 4.7 5.3 4.0 6.3 3.8 3.7 3.6 3.8 1.8 1.2 0.6 0.3 0.7Total debt adj. / total capital. adj. 58.6% 55.5% 58.1% 55.2% 62.1% 57.2% 62.0% 52.8% 44.0% 76.1% 62.6% 72.6% 133%Net debt adj. / net capital. adj. 56.5% 52.3% 53.8% 50.4% 59.7% 54.7% 57.9% 42.8% 35.4% 67.6% 56.9% 68.7% 141%Equity / total assets 34.6% 38.3% 40.6% 39.1% 29.5% 27.5% 24.5% 27.0% 30.0% 10.1% 20.8% 23.2% -22.7%


<date>



SIAS Analyst: Christian Aust, CFA (UniCredit Bank), +49 89 378-12806 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa2/--/-- NEG/--/-- Stable Marketweight iBoxx/--/-- EUR 1.7bn

Company Description: SIAS (Società Iniziative Autostradali e Servizi SpA), headquartered in Turin, Italy, is the second-largest toll road operator in Italy with a 15% market share. SIAS operates a network with a total length of 1,300km via its subsidiaries and associated companies. The main concessions are SALT, ADF and SATAP. The average remaining concession lifetime amounts to about 12 years. The majority of operations are in Italy, with a minor portion in the UK (84km). Besides its toll road activities, which account for more than 90% of total revenues, SIAS is active in the construction and engineering business, providing services mainly for the companies of the SIAS Group. SIAS is also active in the areas of planning and production of telecommunication and IT systems for motorway companies. In FY12, SIAS generated revenues of EUR 915mn and an EBITDA of EUR 570mn on a consolidated basis and employed ca. 2,200 people. SIAS is part of the Gavio Group, which directly and indirectly holds a 69.75% stake. The remainder is free-float. The company is listed on the Milan Stock Exchange.

Moody's (08/13): SIAS's consolidated credit quality is currently positioned at the same level as the Italian sovereign rating (Baa2 negative). Moody's believes that the company's rating could potentially exceed that of the Italian sovereign in the event that moderate downward pressure were to materialize on the latter, particularly in light of SIAS's solid liquidity profile and limited debt refinancing requirements over the medium term. Given the linkages between SIAS's rating and that of the government, a stabilization or an upward move in the sovereign rating would be required before SIAS would become eligible for a rating upgrade. Downward rating pressure could develop in case of: (1) a further material deterioration of the sovereign and macroeconomic environment in Italy; (2) a material change in the terms and conditions of key concessions that negatively impacts the overall group's business or financial risk profile; (3) large-scale, debt-funded acquisitions/investments or diversification away from the domestic infrastructure activities; (4) failure to maintain the expected minimum financial profile mentioned above (i.e. a ratio of FFO/Debt permanently below the low teens and FFO Interest Cover below 4.0x).

QUARTERLLY TRAFFIC PERFORMANCE (CHANGE YOY)

-10%

-9%

-8%

-7%

-6%

-5%

-4%

-3%

-2%

-1%

0%

Light Vehicles Heavy Vehicles

1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13

EBITDA BY SEGMENT

-100 0 100 200 300 400 500 600

Motorway sector

Construction andengineering sector

revenue

Technology sectorrevenue

Other

in EUR mn

FY09 FY10 FY11 FY12 LTM9M13

Strengths/Opportunities – Stable and predictable cash flow-generation from toll revenues in its main

market Italy – Diversified portfolio of currently 9 major concessions – Stable credit profile over the last few years

Weaknesses/Threats – Relatively small size in comparison to its peers (e.g. Abertis, Atlantia) – Weak diversification as more than 95% of the group's EBITDA generated

by toll road activities in Italy – Some concessions are more front-end loaded, resulting in renewal risk in

the medium term; average duration of SIAS' concessions is below the duration of the major concessions within the peer group

– Implemented investment plan, with annual capex peaking in 2013 (EUR 0.81bn), will likely result in negative free cash flows

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0552569005 SISIM 4.5% 26/10/20 Baa2/--/-- 500mn secured

Covenants: Not disclosed.


<date>




EUR mn 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 453 448 641 832 849 929 1,015 474 915 506EBIT margin adj. 39.6% 38.4% 38.0% 28.1% 34.3% 33.9% 32.6% 31.5% 34.1% 25.1%EBITDA rep. 277 277 385 440 466 519 565 260 570 259EBITDA margin adj. 56.5% 62.0% 59.8% 52.1% 54.9% 56.0% 55.8% 55.3% 62.5% 51.6%Net income 168 102 154 92 162 176 181 444 508 54Funds from operations (FFO) 269 205 265 289 305 347 375 177 329 185Operating cash flow 229 189 283 300 365 332 408 158 329 185Free cash flow rep. (after Capex) 76 63 20 1 184 135 164 47 57 59Dividend payment -68 -92 -75 -94 -55 -82 -91 -62 -125 -220Retained cash flow (RCF) 200 114 190 195 250 266 284 114 204 -35Acquisitions / disposals -183 -169 -44 -63 -97 -16 -31 551 378 -4Share buy back / issues -18 21 -1 0 0 -5 0 0 0 0Total debt rep. 749 831 1,684 1,690 1,726 2,238 2,239 2,387 2,522 2,487Net debt rep. 337 436 1,323 1,498 1,481 1,771 1,678 1,255 1,551 1,769Adj. for pensions 30 28 39 39 37 34 32 32 32 41Adj. for operating leases and others 410 401 149 227 381 362 339 348 348 348Net debt adj. 777 865 1,511 1,764 1,899 2,167 2,049 1,635 1,931 2,157

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H130

1

2

3

4



0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

Liquidityas of3Q13

4Q13 2014 2015 2016 2017 >2017

in E

UR

mn

Cash Undrawn, committed lines Financial debt Bond Convertible Bond

CREDIT METRICS



<date>




<date>




iBoxx Packaging Market Spreads

PACKAGING 5Y SENIOR CDS HISTORY

0

100

200

300

400

500

600

700


5Y C

DS

in b

p

ARGID REXLN SKGID



0.0 0.5 1.0 1.5 2.0 2.5 3.0

REXLN

SKGID

ARGID


PACKAGING CASH CURVES

BORMIO 10% Aug-18

GCLIM 9.375% Apr-18

REXLN 6.75% Jun-67

SKGID 4.125% Jan-20

SKGID 5.125% Sep-18

SKGID 7.75% Nov-19

GXIGR 5% May-18

ARGID

0

100

200

300

400

500

600

700

800

0 2 4 6 8 10mDur

ASW

in b

p


QUARTERLY BOND SPREAD MOVEMENTS SK

GID

3.7

27%

Oct

-20

REX

LN 6

.75%

Jun

-67

AR

GID

7.1

25%

Jun

-17

ARG

ID 7

.375

% O

ct-1

7

AR

GID

5%

Nov

-22

ARG

ID 9

.25%

Oct

-20

GC

LIM

9.3

75%

Apr

-18

ARG

ID 8

.75%

Feb

-20

BO

RM

IO 1

0% A

ug-1

8

GC

LIM

5.5

93%

Nov

-19

GX

IGR

5%

May

-18

SKG

ID 7

.75%

Nov

-19

SKG

ID 5

.125

% S

ep-1

8

SKG

ID 4

.125

% J

an-2

0

ARG

ID 7

.375

% O

ct-1

7

0

100

200

300

400

500

600

700

800

ASW

in b

p



Ardagh Glass

Rexam

Smurfit Kappa

0

50

100

150

200

250

300

350

400

450

10 11 12 13 14 15 16 17 BBB- BB+ BB BB- B+ B B-



Smurfit Kappa

Rexam

Ardagh Glass

0

50

100

150

200

250

300

350

400

450

2 3 4 5 6 7Leverage

5Y C

DS


<date>



Ardagh Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB2/B/-- NEG/STABLE/-- Stable Sell --/iBoxx HY/iTraxx S18 not listed

Company Description: Ireland-based Ardagh is a leading international producer of rigid packaging products mostly supplied to the food & beverage industry as well as other consumer products industries. Over the last three years, Ardagh has – through several larger acquisitions – transformed from a pure European glass packaging producer into an international leading and diversified packaging manufacturer. The acquisition of Impress (EUR 1.7bn) in 2010 provided diversification into metal packaging, while the acquisitions of Leone (USD 220mn), Anchor (USD 880mn) and Verallia North America (USD 1.7bn; still under review by US regulators with closing anticipated at FYE 2013) during 2012/2013 quickly built up a strong North American business. While beneficial to the business profile (i.e. the group is now the leading producer of glass containers in North America), the group's financial profile (PF net reported leverage of 5.6x at LTM 9M13) suffered from the additional new debt to finance these acquisitions. On a PF basis, Ardagh generates sales of EUR 5.2bn and EUR 0.9bn in EBITDA. The group operates 100 production facilities in 25 countries and employs around 18,000 people. Ardagh is majority-owned by Paul Coulson (controls around 60% of the share capital), an Irish entrepreneur, with the remaining shares in the hands of management (approximately 20%) and other shareholders.

Moody's (01/13): Negative pressure on the ratings would occur if profitability does not improve, there is negative free cash flow generation or Ardagh is unable to reduce Debt/EBITDA towards 6x over the course of 2014 and interest coverage in terms of (EBITDA-Capex)/Interest declines towards 1x. S&P (07/13): S&P expects Ardagh's credit metrics to remain at levels commensurate with the 'B' rating (FFO/debt of below 10%). An upgrade might occur in case of an improvement in credit metrics as a consequence of a reduction in debt through an IPO. A downgrade might occur should credit measures deteriorate (i.e. further debt-funded M&A). Similarly, S&P could downgrade Ardagh if the group suffers from liquidity issues (not anticipated in the near term).

SALES BY SEGMENT

0

500

1,000

1,500

2,000

2,500

Metal Packaging Glass Packaging

in E

UR

mn

FY10 FY11 FY12 PF LTM 9M13

EBITDA BY SEGMENT

0

50

100

150

200

250

300

350

400

450

Metal Packaging Glass Packaging

in E

UR

mn

FY10 FY11 FY12 PF LTM 9M13

Strengths/Opportunities – Leading positions in glass and metal packaging markets – Most of the group's sales are generated with defensive end-markets such

as food & beverages – Good diversification in terms of products, customers, end-markets and

geography – Long-standing customer relationships with a number of blue-chip

customers – High entry barriers into markets (e.g. capital intensity of the business)

Weaknesses/Threats – Exposure to relatively mature markets – Energy-intensive production process and exposure to volatile input costs – Business requires a high amount of annual investments (capex-to-sales

above 8% p.a.) – Difficult to compare the results given frequent M&A – Aggressive financial policy with highly levered capital structure and

opportunistic pursuit of large transformational acquisitions and debt-funded shareholder distributions

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR mn) Comment XS0435914790 ARGID 9.25% 01/07/16 Ba3/B+/-- 300 Secured; callable @ 104.625 XS0304675159 ARGID 7.125% 15/06/17 B3/CCC+/-- 310 Unsecured; callable @ 102.375 XS0547007764 ARGID 7.375% 15/10/17 Ba3/B+/-- 825 Secured; callable in 10/14 @ 103.688 XS0809267155 ARGID 7.375% 15/10/17 Ba3/B+/-- 260 Secured; callable in 10/14 @ 103.688; Mirror Notes XS0629187302 ARGID 11.125% 01/06/18 Caa1/CCC+/-- 231 PIK; callable in 06/14 @ 105.563 XS0480219640 ARGID 8.75% 01/02/20 B3/CCC+/-- 180 Unsecured; callable in 02/15 @ 104.375 XS0547019777 ARGID 9.25% 15/10/20 B3/CCC+/-- 475 Unsecured; callable in 10/15 @ 104.625 XS0878193290 ARGID 5% 15/11/22 Ba3/B+/-- 250 Secured; Put @ 101 if VNA acquisition does not close in

01/14 Covenants: The back-up lines do not include covenants.


<date>




EUR mn 2008 2009 2010 2011 9M12 2012 9M13Sales 1,357 1,236 1,323 3,267 2,704 3,705 3,094EBIT margin adj. 7.8% 7.5% 12.1% 11.3% 10.9% 9.9% 9.3%EBITDA rep. 237 175 230 493 373 360 457EBITDA margin adj. 19.4% 19.2% 21.0% 17.2% 16.8% 16.2% 16.3%Net income 3 -52 -67 9 -72 -223 -122Funds from operations (FFO) 158 114 85 200 223 191 250Operating cash flow 82 142 179 153 2 81 104Free cash flow rep. (after Capex) -47 42 76 -16 -134 -130 -118Dividend payment 0 0 -1 0 0 0 0Retained cash flow (RCF) 158 114 84 200 223 191 249Acquisitions / disposals 0 -2 -308 -201 -563 -563 3Share buybacks / issues 0 0 1 0 0 0 0Total debt rep. 937 961 2,620 2,775 3,768 3,743 4,827Net debt rep. 875 841 2,295 2,484 3,532 3,511 3,579Adj. for pensions 59 98 216 267 290 416 415Adj. for operating leases and others 12 62 138 143 143 104 104Net debt adj. 945 1,001 2,648 2,894 3,964 4,032 4,098

DEBT LEVERAGE

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2008 2009 2010 2011 9M12 2012 9M130.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%Net debt adj. / EBITDA adj. (LS) FFO adj. / net debt adj.


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

Liquidityas of9M13

ST-Debtas of9M13

2014 2015 2016 >2016

in E

UR

mn

Financial debt Cash Undrawn, committed lines

* Liquidity does not include restricted cash (issued for funding of VNA acquisition)

CREDIT METRICS

2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 1.4 1.2 1.2 1.5 1.3 1.2 0.9EBIT gross interest cover adj. 1.3 1.2 1.3 1.5 1.3 1.2 0.9EBITDA net interest cover adj. 3.5 2.9 2.2 2.2 2.0 1.9 1.7EBITDA gross interest cover adj. 3.3 2.9 2.2 2.2 2.1 1.9 1.7FFO adj. / net debt adj. 17.1% 11.4% 3.5% 7.1% 5.7% 5.0% 5.7%FFO adj. / total debt adj. 16.0% 10.2% 3.1% 6.5% 5.4% 4.8% 4.4%RCF adj. / net debt adj. 17.1% 11.4% 3.5% 7.1% 5.7% 5.0% 5.7%RCF adj. / total debt adj. 16.0% 10.2% 3.1% 6.5% 5.4% 4.8% 4.4%Net debt adj. / EBITDA adj. 3.6 4.2 9.5 5.1 6.9 6.7 6.3Total debt adj. / EBITDA adj. 3.8 4.7 10.7 5.7 7.3 7.1 8.2FFO adj. / net interest adj. 2.2 1.4 0.7 0.8 0.8 0.6 0.6FFO adj. / gross interest adj. 2.0 1.4 0.7 0.8 0.8 0.7 0.6Total debt adj. / total capital. adj. 97.0% 104.0% 102.8% 103.7% 103.3% 108.7% 109.1%Net debt adj. / net capital. adj. 96.8% 104.5% 103.1% 104.1% 103.5% 109.3% 112.3%Equity / total assets 2.3% -3.2% -2.5% -3.3% -3.7% -7.1% -7.5%


<date>



Bormioli Rocco Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB2/BB-/-- STABLE/STABLE/-- Stable Buy --/iBoxx HY/-- not listed

Company Description: Based in Fidenza, Italy, Bormioli Rocco is a manufacturer of glass and plastic packaging products for usage in the pharmaceutical, food & beverage and cosmetics/perfumes industry. Furthermore, the group produces tableware supplied to retailers and the hotel, restaurant and catering market. Bormioli operates nine production facilities, three decorative ateliers, twelve outlet stores and one flagship store. While the core markets are Italy, Spain and France, the company maintains a presence (through sales offices and external sales agents) in over 100 countries and employs around 2,500 people. In FY12, Bormioli generated sales of EUR 548mn with an adjusted EBITDA of EUR 70mn. Since early 2011, Bormioli is owned by UK private equity group Vision Capital and the management team.

Moody's (01/13): Downward rating pressure could develop if the group's profitability were to come under further pressure resulting in EBITDA margins declining to below 10% and continued negative free cash flow generation. Also, leverage weakening above 5.5x would put pressure on the rating. Positive rating pressure could occur if Bormioli is able to 1. successfully execute on operational improvements leading to improved operating performance and profitability, evidenced by EBITDA margins improving towards the mid teens; 2. reduce its leverage ratios (below 4x on a sustainable basis); and 3. return to (at least) neutral free cash flow generation. An upgrade to B1 would also require the company to demonstrate continued diversification further away from the group's stronghold in southwestern Europe. S&P (06/13): S&P could downgrade Bormioli if the group's FFO to debt weakens to less than 15% and adjusted debt to EBITDA rises to more than 4.0x, and if these metrics remain weaker than these levels for more than two successive quarters, without sufficient potential for a swift return to stronger levels. A negative rating action could also occur if the group's liquidity weakens to "less than adequate". Lastly, the ratings could also come under pressure if Bormioli's shareholders adopt a more aggressive financial policy. An upgrade is currently not envisioned.

REVENUE FROM SALES AND SERVICES

Food and Beverage Glass

13%

Pharmaceuticals Glass and

Plastic36%

Tableware38%

Perfume and Cosmetics

Glass13%

PRE-OVERHEAD SEGMENT EBITDA

-10

0

10

20

30

40

50

60

70

PharmaceuticalsGlass and Plastic

Food andBeverage Glass

Perfume andCosmetics Glass

Tableware

in E

UR

mn

2008 2009 2010 2011 2012 LTM 9M13

Strengths/Opportunities – Good market positions in its businesses – Mainly exposed to defensive end-markets (62% of FY12 pre-overhead

segment EBITDA generated in pharma segment; other end-markets are consumer-related)

– Long-standing customer relationships with a number of blue-chip companies offsetting some customer concentration in segments

– Relative stability in margins partially offsetting the fact that margins of around 13-15% lag behind those of packaging peers

– Solid track record of free cash flow generation – Modestly leveraged capital structure

Weaknesses/Threats – Limited scale of the operations – Significant regional focus on Southwestern Europe with core markets

being Italy, Spain and France, which are currently facing a very challenging economic environment

– Current operational difficulties (furnace leakages; quality issues); company is currently implementing an operational improvement plan

– Exposure to volatile input cost (energy and raw materials) with Bormioli currently facing problems in passing through increases in input cost

– Capital-intensive business with capex/sales of around 6-7% (until 2014, there will be four furnace rebuilds)

– Group targets acquisitions, however, we expect rather smaller ones

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0615235966 BORMIO 10% 01/08/18 B3/BB-/-- 250mn HY language; secured

Covenants: Bormioli needs to adhere to financial covenants under its RCF line with BNL (net debt/EBITDA of 4.25x in December 2013). As of 9M13, the group has headroom of above 10% under this line.


<date>




EUR mn 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 542 547 493 540 568 421 558 433EBIT margin adj. 6.9% 6.5% 4.9% 8.6% 8.4% 5.3% 4.9% 3.2%EBITDA rep. 75 73 63 85 85 52 67 54EBITDA margin adj. 14.2% 13.7% 13.1% 16.1% 15.6% 12.9% 12.7% 12.8%Net income 19 9 1 27 9 -8 -9 -14Funds from operations (FFO) 72 42 26 66 55 20 27 25Operating cash flow 65 45 39 66 66 2 20 15Free cash flow rep. (after Capex) 27 -2 16 30 28 -27 -20 -14Dividend payment 0 -2 0 0 0 0 0 0Retained cash flow (RCF) 72 40 26 66 55 20 27 25Acquisitions / disposals -100 6 1 0 0 0 0 -13Share buybacks / issues -15 -2 0 0 0 0 0 0Total debt rep. 163 163 142 126 253 260 257 277Net debt rep. 155 154 138 107 215 242 237 263Adj. for pensions 37 35 33 31 31 30 25 24Adj. for operating leases and others 0 0 0 0 0 0 0 0Net debt adj. 192 189 171 139 246 273 262 287

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

2007 2008 2009 2010 2011 9M12 2012 9M130.0

1.0

2.0

3.0

4.0



0

50

100

150

200

250

300

Liquiditysources

as of9M13

ST-debtas of9M13

2014 2015 2016 >2016

EU

Rm

n


CREDIT METRICS

2007 2008 2009 2010 2011 9M12 2012 9M13EBIT net interest cover adj. 3.7 3.5 3.3 8.4 2.2 0.7 1.1 0.7EBIT gross interest cover adj. 3.5 3.4 3.3 8.2 2.2 0.7 1.1 0.7EBITDA net interest cover adj. 7.6 7.5 8.9 15.6 4.0 2.0 2.8 2.7EBITDA gross interest cover adj. 7.3 7.3 8.8 15.3 4.0 2.0 2.8 2.7FFO adj. / net debt adj. 37.4% 22.0% 15.1% 47.9% 22.5% 6.6% 10.1% 11.1%FFO adj. / total debt adj. 35.8% 21.0% 14.7% 42.1% 19.5% 6.2% 9.4% 10.6%RCF adj. / net debt adj. 37.4% 21.0% 15.1% 47.9% 22.5% 6.6% 10.1% 11.1%RCF adj. / total debt adj. 35.8% 20.1% 14.7% 42.1% 19.5% 6.2% 9.4% 10.6%Net debt adj. / EBITDA adj. 2.5 2.5 2.6 1.6 2.8 3.9 3.7 4.0Total debt adj. / EBITDA adj. 2.6 2.6 2.7 1.8 3.2 4.1 4.0 4.2FFO adj. / net interest adj. 7.0 4.1 3.5 12.0 2.5 0.5 1.0 1.2FFO adj. / gross interest adj. 6.8 4.0 3.5 11.7 2.5 0.5 1.0 1.2Total debt adj. / total capital. adj. 46.5% 45.8% 42.9% 37.8% 63.9% 65.6% 65.7% 69.3%Net debt adj. / net capital. adj. 45.4% 44.7% 42.3% 34.8% 60.5% 64.2% 64.0% 68.2%Equity / total assets 33.6% 34.4% 36.9% 41.0% 22.8% 21.9% 21.7% 19.4%


<date>



Gerresheimer Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa1/BBB-/-- POS/STABLE/-- Stable Hold --/iBoxx HY/-- EUR 1.6bn

Company Description: Gerresheimer AG, headquartered in Düsseldorf, Germany, is a leading manufacturer of glass and plastic products used pre-dominantly in the pharma and healthcare industries. The group's products include, among others, glass tubes, ampoules, vials, drug-delivery systems, bottles and jars, as well as laboratory glassware. With 47 locations in Europe, the Americas and Asia, Gerresheimer maintains a global reach. The company is listed on the Frankfurt Stock Exchange and is a member of the German MDAX index. In FY11/12 (fiscal year starts in December), it generated sales of EUR 1.2bn and a company-adjusted EBITDA of EUR 237mn, while employing 10,952 people.

Moody's (08/13): Positive rating-pressure could build if Gerresheimer was able to achieve debt/EBITDA that is sustainably below 3.0x (LTM 9M12/13: 3.2x) and FCF/debt of 5% (LTM 9M12/13: 1.5%). An upgrade to Baa3 would also require a further balanced financial policy, on a long-term basis, or a commitment by management to achieve ratios that are in line with investment-grade levels. Moody's could consider a downgrade if Gerresheimer posted negative FCF and debt/EBITDA rose to 3.5x or higher. Further M&A activity is only incorporated into the rating to a limited extent. However, negative rating-pressure could develop if Gerresheimer were to engage in larger transactions and fail to return to a debt/EBITDA ratio close to 3.0x in the intermediate term. S&P (03/13): Ratings downside could primarily result from Gerresheimer's failure to maintain ratios commensurate (FFO/debt of about 30%; LTM 9M12/13: 26%) with the ratings over an extended period, owing perhaps to an unexpectedly large debt-financed acquisition or dividend payout or to an unforeseen drop in demand. S&P might upgrade Gerresheimer if it proves able to sustain credit metrics that are more comfortably commensurate with an "intermediate" financial risk profile: specifically FFO/debt of more than 35% and adjusted debt to EBITDA of about 2.5x (LTM 9M12/13: 3.0x).

SALES BY SEGMENT

0

50

100

150

200

250

300

350

400

450

500

Plastic Systems Moulded Glass Tubular Glass Life Science

in E

UR

mn

FY06/07 FY07/08 FY08/09 FY09/10FY10/11 FY11/12 LTM 9M12/13

ADJUSTED EBITDA BY SEGMENT

0

20

40

60

80

100

120

Plastic Systems Moulded Glass Tubular Glass Life Science

in E

UR

mn

FY06/07 FY07/08 FY08/09 FY09/10FY10/11 FY11/12 LTM 9M12/13

Strengths/Opportunities – Defensive business profile due to exposure to largely stable end-markets

(80% of sales to pharmaceutical industry) – Significant barriers to entry – Low customer concentration – Good level of profitability – Good geographic diversification despite bias towards relatively mature

markets in Western Europe and North America – Significant growth opportunity in emerging markets

Weaknesses/Threats – Small size of the issuer compared to mostly blue chip customer base – Highly energy-intensive business/exposure to volatile raw material cost – Product-liability risk – High investment intensity of business – Company likely to execute further M&A but focus on smaller "bolt-on"

acquisitions

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0626028566 GXIGR 19/05/2018 5% Ba1/BBB-/-- 300mn IG language

Covenants: According to Moody's, the group has substantial headroom under its financial covenants included in the term loans.


<date>




EUR mn 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 9M11/12 2011/12 9M12/13Sales 647 958 1,060 1,000 1,025 1,095 894 1,219 941EBIT margin adj. 9.5% 10.0% 10.2% 8.2% 10.8% 11.9% 11.1% 11.9% 10.9%EBITDA rep. 95 151 170 175 201 211 162 235 167EBITDA margin adj. 20.8% 20.2% 20.5% 19.7% 21.1% 21.1% 19.8% 20.6% 19.0%Net income -25 1 5 7 47 54 40 67 42Funds from operations (FFO) 48 92 148 121 148 138 117 180 109Operating cash flow 62 54 165 117 160 122 73 174 55Free cash flow rep. (after Capex) -13 -34 62 31 87 36 3 55 -16Dividend payment -2 -3 -15 -15 -5 -20 -20 -23 -24Retained cash flow (RCF) 46 89 133 106 143 118 97 157 85Acquisitions / disposals -60 -216 -30 -1 4 -73 -22 -30 -50Share buy back / issues 2 439 0 0 0 0 0 0 0Total debt rep. 600 471 533 442 378 503 501 463 546Net debt rep. 575 391 438 385 317 372 424 377 478Adj. for pensions 173 160 160 152 170 161 160 178 197Adj. for operating leases/others 16 16 4 11 31 44 44 32 32Net debt adj. 764 567 602 549 518 576 628 587 707

DEBT LEVERAGE

0%

4%

8%

12%

16%

20%

24%

28%

32%

2005

/06

2006

/07

2007

/08

2008

/09

2009

/10

2010

/11

9M11

/12

2011

/12

9M12

/13

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0FFO adj. / net debt adj. (LS) Net debt adj. / EBITDA adj. (RS)


0

50

100

150

200

250

300

350

400

Liquidityas of

9M12/13

ST-Debtas of

9M12/13

2014 2015 2016 >2016

in E

UR

mn

Cash Bonds Financial Debt RCF

CREDIT METRICS

2005/06 2006/07 2007/08 2008/09 2009/10 2010/11 9M11/12 2011/12 9M12/13EBIT net interest cover adj. 1.1 1.2 2.4 2.0 3.1 3.3 4.0 4.0 4.4EBIT gross interest cover adj. 1.1 1.0 2.3 1.9 3.0 3.1 3.9 3.6 3.9EBITDA net interest cover adj. 2.4 2.4 4.8 4.7 6.1 5.8 6.9 7.0 7.6EBITDA gross interest cover adj. 2.4 2.1 4.6 4.6 6.0 5.5 6.8 6.3 6.6FFO adj. / net debt adj. 6.7% 17.2% 25.5% 23.1% 30.1% 25.4% 27.5% 31.8% 25.0%FFO adj. / total debt adj. 6.5% 15.1% 22.1% 21.0% 26.9% 20.7% 24.5% 27.7% 22.8%RCF adj. / net debt adj. 6.5% 16.7% 23.1% 20.4% 29.0% 21.9% 24.1% 27.9% 21.3%RCF adj. / total debt adj. 6.3% 14.6% 19.9% 18.5% 26.0% 17.8% 21.5% 24.3% 19.4%Net debt adj. / EBITDA adj. 5.7 2.9 2.8 2.8 2.4 2.5 2.6 2.3 2.8Total debt adj. / EBITDA adj. 5.9 3.3 3.2 3.1 2.7 3.1 2.9 2.7 3.1FFO adj. / net interest adj. 0.9 1.2 3.4 3.1 4.4 3.7 4.9 5.2 5.3FFO adj. / gross interest adj. 0.9 1.1 3.2 3.0 4.3 3.5 4.8 4.7 4.6Total debt adj. / total capital. adj. 104.3% 56.4% 59.3% 56.3% 53.1% 56.8% 56.5% 55.4% 59.5%Net debt adj. / net capital. adj. 104.5% 53.1% 55.7% 53.9% 50.3% 51.7% 53.6% 52.0% 57.3%Equity / total assets -2.8% 34.8% 31.6% 35.8% 39.0% 36.4% 36.5% 37.2% 32.9%


<date>



Guala Closures Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapB2/B/-- STABLE/STABLE/-- Stable Hold --/iBoxx HY/-- not listed

Company Description: GCL Holding is incorporated in Luxembourg and is the holding company of Guala Closures, which is headquartered in Italy. Guala Closures is a manufacturer of closures; the group's product portfolio includes: 1. non-refillable safety closures (used mainly for spirit bottles; offer safety against counterfeiting, which is important when selling into emerging markets); 2. standard closures (used for mineral water, wine and olive oil); 3. winecap closures (benefit from the growing substitution of cork by aluminum closures); 4. pharma closures; and 5. PET (considered non-core). Following a number of acquisitions and organic growth investments, GCL is the market leader in safety closures and maintains an international presence, while most of its sales are still generated in Europe. Originally owned by the founder family, since 1998, GCL has been taken over twice by private equity funds and spent around three years as a public company before being taken private by another private equity consortium in 2008. In 2012, the group generated sales of EUR 497mn and an adjusted EBITDA of EUR 103mn.

Moody's (11/12): A track record of sustained profitability and positive free cash flow that leads to a gradual reduction in financial leverage could result in positive rating pressure over the next 18-24 months. Upward pressure on the rating could also occur if the group's operating profitability were to improve, leading to financial leverage well below 5x, together with EBIT interest coverage above 2x. Conversely, a downgrade could result from 1. deteriorating operating profitability leading to financial leverage, measured as debt/EBITDA, increasing towards 6x on an ongoing basis; or 2. negative free cash flows. Moreover, immediate downward rating pressure could result from a deterioration in the group's liquidity profile. The rating incorporates Moody's assumption that Guala will not make any large debt-financed acquisitions. S&P (05/13): For the rating, S&P expects GCL to achieve FFO/debt in the high single-digits in the medium term and debt/EBITDA of about 5x over the next 12 months. S&P might upgrade GCL's rating if the group generated FFO/debt >10% and debt/EBITDA <5x. Negative rating pressure could arise if weaker volume growth, input cost inflation, the loss of important customers or substantial debt-funded acquisitions lead to weaker credit ratios.

QUARTERLY SALES AND EBITDA

0

20

40

60

80

100

120

140

160

1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13

in E

UR

mn

0%

5%

10%

15%

20%

25%Sales EBITDA EBITDA margin

SALES BY REGION (LTM 1H13)

Europe55%

Asia13%

Latin and North America

17%

Oceania12%

South Africa3%

Strengths/Opportunities – Market-leading positions in safety closures (60% market share) and

aluminum winecap closures (30% market share) – Solid geographic diversification, however, with a focus on Europe (more

than 50% of sales generated there) – Main end-market is Food & Beverages, which is considered defensive – High and relatively stable EBITDA margins, despite exposure to volatile

raw material prices (e.g. polypropylene, aluminum) – Entry barriers include high amount of patents (>70 owned by GCL), long-

standing customer relationships, etc. – Several organic growth drivers (increasing consumption of spirits in

emerging markets, substitution of cork closures by aluminum closures in wine)

Weaknesses/Threats – Limited size, especially when compared to that of its customers – Relatively high level of customer concentration, although the group has

long-standing relationships with customers – Majority-owned by private equity investors, which, however, have been

supportive by providing equity for expansion – Acquisitive growth strategy – Leveraged capital structure

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0619675753 GCLIM 9.375% 15/04/18 B3/CCC+/-- 200mn HY language, sub, callable in 04/14 @ 107.031 XS0852482941 GCLIM FLOAT 15/11/19 B1/B/-- 275mn HY language, secured, callable in 11/13 @ 101

Covenants: GCL has access to a EUR 75mn RCF line (maturing in November 2017; utilization around EUR 20mn), which does not include any financial covenants.


<date>




EUR mn 2009 2010 2011 1H12 2012 1H13Sales 311 370 419 236 498 240EBIT margin adj. 12.2% 11.6% 11.9% 9.9% 12.8% 9.1%EBITDA rep. 74 80 85 38 97 42EBITDA margin adj. 22.4% 22.1% 21.0% 17.9% 20.8% 17.6%Net income -9 -8 -13 -12 -21 -13Funds from operations (FFO) 30 37 16 9 32 5Operating cash flow 28 37 10 7 28 -5Free cash flow rep. (after Capex) 13 6 -28 -5 1 -21Dividend payment -2 -4 -1 -1 -6 -5Retained cash flow (RCF) 29 33 15 7 26 0Acquisitions / disposals -5 -11 -61 1 -15 0Share buybacks / issues 2 17 41 0 0 0Total debt rep. 410 426 506 506 520 521Net debt rep. 377 386 440 452 461 489Adj. for pensions -3 -5 -9 -3 -8 -8Adj. for operating leases and others 0 0 0 0 0 0Net debt adj. 377 387 440 452 462 489

DEBT LEVERAGE

0%

2%

4%

6%

8%

10%

12%

2009 2010 2011 1H12 2012 1H130.0

1.0

2.0

3.0

4.0

5.0



050

100150200250300350400450500

Liquidityas of1H13

ST-Debtas of1H13

2014 2015 2016 >2016

in E

UR

mn

Cash Undrawn, committed lines Bond Financial Debt

CREDIT METRICS

2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 1.1 1.3 1.2 1.3 1.5 1.4EBIT gross interest cover adj. 1.1 1.2 1.2 1.3 1.5 1.4EBITDA net interest cover adj. 2.0 2.4 2.1 2.2 2.4 2.4EBITDA gross interest cover adj. 2.0 2.4 2.1 2.2 2.4 2.3FFO adj. / net debt adj. 8.1% 9.6% 3.6% 5.3% 6.9% 5.7%FFO adj. / total debt adj. 7.4% 8.7% 3.1% 4.8% 6.1% 5.4%RCF adj. / net debt adj. 7.6% 8.6% 3.3% 5.0% 5.6% 3.8%RCF adj. / total debt adj. 7.0% 7.8% 2.9% 4.5% 5.0% 3.6%Net debt adj. / EBITDA adj. 5.4 4.7 5.0 4.8 4.5 4.7Total debt adj. / EBITDA adj. 5.9 5.2 5.8 5.4 5.0 5.0FFO adj. / net interest adj. 0.9 1.1 0.4 0.6 0.8 0.6FFO adj. / gross interest adj. 0.9 1.1 0.4 0.6 0.7 0.6Total debt adj. / total capital. adj. 67.2% 66.9% 67.3% 68.5% 69.9% 72.7%Net debt adj. / net capital. adj. 65.4% 64.7% 64.2% 66.0% 67.4% 71.4%Equity / total assets 26.7% 26.5% 26.5% 25.1% 23.8% 21.4%


<date>



Rexam Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBaa3/BBB-/-- STABLE/STABLE/-- Stable Hold(Hybrid) --/iBoxx HY/-- GBP 3.9bn

Company Description: Rexam plc (www.rexam.com), headquartered in London, UK, is the leading global beverage can manufacturer. Following the decision to exit Plastic Packaging entirely (Healthcare business was recently put up for sale), the group now is only focused on Beverage Cans (organized into the three segments: Beverage Can North America, Beverage Can South America and Beverage Can Europe & Asia). In global beverage can markets, the company's main competitors are Crown and Ball. Rexam operates globally, with the US and Western Europe still its main markets. By focusing on faster-growing markets, Rexam has, however, expanded its global footprint in recent years, also increasingly in developing regions, e.g. Russia (with the acquisition of Rostar in 2008). Hence, 34% of sales are currently generated in emerging markets. In 2012, the company employed circa 11,100 people in 24 countries, operating in 67 plants. It is listed on the London Stock Exchange, with shares widely spread.

Moody's (11/13): Moody's expects that Rexam can maintain current earnings levels and credit ratios at levels of 3.0x debt/EBITDA (LTM 2Q13: 3.0x) through the cycle. Negative rating pressure on the rating would arise should Rexam's profitability or cash flow generation capacity erode on a sustainable basis, resulting in profit margins below 2007/08 levels or the group's failure to achieve at least breakeven FCF. Likewise, negative rating pressure would build up should the group's debt/EBITDA ratio rise materially above 3.0x over an extended period or a failure to maintain an adequate liquidity profile. An upgrade would require EBIT margins of above 10% (LTM 2Q13: 10%), FCF/debt above 10% (LTM 2Q13: 4%), leverage below 2.5x and EBIT/Interest towards 4.5x (LTM 2Q13: 5.0x). S&P (02/13): S&P considers upside rating potential, which could arise from a sustained improvement in credit metrics to a level that aligns more strongly with an "intermediate" financial risk profile over the medium term. In S&P's view, a positive rating action would also depend on evidence of the group's willingness to maintain improved credit metrics through its financial policy and strategy. A negative rating action is rather unlikely at that stage, but could occur in case of a more aggressive financial policy (pick-up in shareholder remuneration or debt-financed M&A, which increases leverage to above what is considered commensurate with the current ratings).

SALES BY SEGMENT (LTM 1H13)

Beverage Packaging

90%

Healthcare (Discontinued)

10%

UNDERLYING OPERATING PROFIT BY SEGMENT

0 100 200 300 400 500

BeveragePackaging

Healthcare(Discontinued)

in GBP mn

FY11 FY12 LTM 1H13

Strengths/Opportunities – Relative recession-resistant business – World-leading market positions – Global network with 67 plants in more than 20 countries (around 1/3 of

group sales generated in emerging markets) – High barriers to entry in the market with increasing cooperation

agreements between customers and suppliers – Historically solid cash-flow generation – Strong commitment to its rating, with management also using a.o. equity

and subordinated hybrid issues with equity content to finance acquisitions

Weaknesses/Threats – Mature and competitive consumer packaging industry – Reduced product diversification following several disposals; focus is now

on beverage packaging – High customer concentration, with Coca Cola and its affiliated bottlers

representing a significant share of sales – Exposure to volatile raw material costs, which is mitigated by cost pass-

through clauses in the US and for most contracts in Europe – Risk of accelerating M&A and shareholder remuneration

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0307868744 REXLN 6.75% Perp Ba2/BB/-- 750mn Hybrid, first call 06/17, step-up +290bp

Covenants: Rexam's loan documentation includes financial covenants (net leverage < 3.5x; interest coverage > 2.75x). According to S&P, net debt is

calculated at average exchange rates, which reduces the risk of currency fluctuation.


<date>




GBP mn 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13Sales 3,387 3,086 3,112 3,081 3,237 3,301 3,611 4,618 4,866 4,619 4,232 1,946 3,885 1,971EBIT margin adj. 5.7% 10.1% 11.7% 13.4% 13.4% 12.0% 10.5% 10.6% 9.9% 11.9% 13.1% 12.5% 12.6% 11.9%EBITDA rep. 401 505 450 549 597 523 530 621 560 702 657 271 564 248EBITDA margin adj. 12.5% 17.1% 19.5% 19.2% 18.7% 16.0% 14.2% 14.9% 14.5% 16.2% 17.3% 16.0% 16.0% 15.5%Net income 167 -119 -41 204 223 223 240 171 -29 124 376 103 242 94Funds from operations (FFO) 265 332 407 401 444 369 340 368 467 524 485 216 485 172Operating cash flow 366 319 381 390 408 370 329 213 507 504 480 129 478 95Free cash flow rep. (after Capex) 186 146 206 216 232 156 18 -176 323 298 240 27 187 -10Dividend payment -60 -70 -76 -92 -97 -103 -118 -131 -79 -105 -111 -84 -128 -473Retained cash flow (RCF) 205 262 331 309 347 266 222 237 388 419 374 132 357 -301Acquisitions / disposals 465 -71 -90 -27 -75 -167 -654 -108 26 14 206 -14 396 -8Share buy back / issues 116 12 304 8 6 9 281 1 334 -6 -18 1 4 -19Total debt rep. 1,440 1,429 1,239 1,263 1,381 1,415 1,843 2,859 2,095 1,881 1,838 1,759 2,212 1,634Net debt rep. 1,361 1,355 1,169 1,169 1,290 1,276 1,729 2,783 1,980 1,767 1,426 1,420 905 1,478Adj. for pensions 300 489 562 525 608 392 128 138 312 386 454 454 445 418Adj. for op. leases and others 15 12 15 78 106 93 -285 -264 -272 -292 -289 -289 -289 -289Net debt adj. 1,676 1,856 1,746 1,772 2,005 1,761 1,572 2,657 2,019 1,860 1,591 1,585 1,061 1,607

DEBT LEVERAGE

0%

10%

20%

30%

40%

50%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

1H12

2012

1H13

0

1

2

3

4



0

200

400

600

800

1,000

1,200

1,400

Availableliquidity at

1H13

2013 2014 2015 2016 >2016

in G

BPm

n

Bonds Cash Headroom under credit facilities

CREDIT METRICS

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 1H12 2012 1H13EBIT net interest cover adj. 1.7 3.7 4.9 5.7 5.0 3.9 3.6 3.4 3.8 4.1 7.3 5.6 4.5 4.8EBIT gross interest cover adj. 1.7 3.7 4.9 4.8 4.4 3.4 3.1 3.1 3.7 4.0 6.6 5.2 4.2 4.4EBITDA net interest cover adj. 3.6 6.3 8.1 8.2 7.0 5.2 4.8 4.7 5.6 5.6 9.6 7.2 5.8 6.1EBITDA gross interest cover adj. 3.6 6.3 8.1 6.9 6.1 4.6 4.3 4.4 5.4 5.4 8.8 6.7 5.4 5.6FFO adj. / net debt adj. 15.9% 18.0% 23.4% 23.5% 22.9% 21.9% 22.5% 14.6% 24.2% 29.0% 31.7% 29.4% 47.5% 28.6%FFO adj. / total debt adj. 15.2% 17.3% 22.5% 22.3% 21.9% 20.3% 20.9% 14.2% 22.9% 27.3% 25.2% 24.2% 21.3% 26.1%RCF adj. / net debt adj. 12.3% 14.2% 19.0% 18.3% 18.1% 16.0% 15.0% 9.7% 20.2% 23.4% 24.7% 21.6% 35.5% -3.5%RCF adj. / total debt adj. 11.8% 13.7% 18.3% 17.4% 17.3% 14.9% 13.9% 9.4% 19.2% 22.0% 19.6% 17.8% 15.9% -3.2%Net debt adj. / EBITDA adj. 3.9 3.5 2.9 3.0 3.3 3.3 3.1 3.9 2.9 2.5 2.2 2.3 1.7 2.6Total debt adj. / EBITDA adj. 4.1 3.7 3.0 3.2 3.5 3.6 3.3 4.0 3.0 2.6 2.7 2.8 3.8 2.9FFO adj. / net interest adj. 2.3 4.0 5.5 5.8 5.3 3.8 3.3 2.7 3.8 4.1 6.6 4.9 4.7 4.6FFO adj. / gross interest adj. 2.3 4.0 5.5 4.9 4.7 3.3 2.9 2.5 3.7 3.9 6.1 4.6 4.3 4.2Total debt adj. / total capital. adj. 60.3% 69.6% 72.0% 62.0% 63.9% 58.1% 46.3% 54.5% 47.0% 44.9% 45.4% 46.6% 50.1% 46.1%Net debt adj. / net capital. adj. 59.2% 68.8% 71.2% 60.8% 62.9% 56.2% 44.6% 53.8% 45.6% 43.5% 39.8% 41.8% 31.0% 43.9%Equity / total assets 27.3% 26.7% 23.7% 23.3% 24.3% 29.6% 35.5% 30.2% 38.2% 38.3% 37.9% 36.0% 35.9% 36.8%


<date>



Smurfit Kappa Analyst: Max Huefner, CFA (UniCredit Bank), +49 89 378-13212 Corporate Ratings Rating Outlook Credit Profile Trend Recommendation Index McapBa2/BB/BB POS/POS/POS Stable Hold --/iBoxx HY/-- EUR 3.99bn

Company Description: Ireland-based Smurfit Kappa Group (www.smurfitkappa.com) is a leading packaging supplier in Europe. It is the European leader in containerboard, solid board, graphic board, corrugated and solid board packaging. Besides its significant presence in Europe (the group is active in 21 countries), the company also has a strong position in certain Latin American markets, where it is the sole pan-regional player in nine countries. Smurfit Kappa was created by the merger of Jefferson Smurfit and Kappa Packaging in December 2005. Following an IPO at the beginning of 2007, the owners, private equity firms Madison Dearborn Partners, Cinven Ltd and CVC Capital Partners, have reduced their stake significantly over time to below 10%. In FY12, Smurfit Kappa generated sales of EUR 7.4bn with an EBITDA pre-exceptionals of EUR 1.0bn. The group has around 38,000 employees.

Moody's (11/13): The rating could be upgraded if leverage fell towards 3.5x (LTM 9M13: 4.5x) on a sustained basis and RCF/debt improved towards 20% (LTM 9M13: 14%). Negative rating pressure could build if leverage were materially above 4x for a longer period of time, RCF/debt fell to the low teens, or SKG was not able to generate positive free cash flow. S&P (02/13): S&P could upgrade Smurfit Kappa if the company proves able to sustain credit metrics commensurate with a "significant" financial risk profile, specifically FFO/debt of 20-25% (LTM 9M13: 20.5%) and leverage of 3.0-3.5x (LTM 9M13: 3.5x). S&P could revise its outlook to stable as a result of greater margin pressure than the rating agency anticipates in Europe, or the failure of SKG to improve margins in Latin America. Fitch (11/13): The continuation of the current path in debt reduction and the improvement in credit metrics, with FFO adjusted leverage improving to below 3.5x, FCF/revenue remaining above 1% and FFO fixed charges coverage to improve to above 4.0x could lead to an upgrade of the rating. A slowdown in the deleveraging process, due to either a deterioration in the operating performance, or to M&A activity, with FFO adjusted gross leverage remaining above 3.5x over the next 18-24 months could lead to a revision of the outlook to stable.


Europe76%

The Americas24%

EBITDA BY SEGMENT

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

Europe The Americas

2011 9M12 2012 9M13

Strengths/Opportunities – Leading containerboard and corrugated board producer in Europe and

Latin America – Highly diversified in terms of customers and geographies – Good amount of vertical integration leading to relative stability in margins – Balanced supply/demand situation with limited amount of capacity to come

on the European market in FY12 and FY13 – Strong track record of achieving cost savings, with further savings of EUR

100mn targeted for FY13

Weaknesses/Threats – Cyclical and capital-intensive business – Exposure to volatile raw materials (mainly OCC) and energy costs putting

pressure on margins – Relatively leveraged capital structure though strong deleveraging has

occurred since FY09, primarily by means of free-cash-flow generation – Group operates in a very competitive and fragmented industry – Elevated inflation and political risk in Latin America although the group has

a good track record of managing this

MAJOR BOND ISSUES

ISIN Ticker/Issue Issue Rating Amount (EUR) Comment XS0828002807 SKGID 15/09/2018 5.125% Ba2/BB/BB 200mn unsecured, not callable XS0467785613 SKGID 15/11/2019 7.75% Ba2/BB/BB 500mn unsecured, callable in 11/14 @103.875 XS0880132989 SKGID 30/01/2020 7.75% Ba2/BB/BB 400mn unsecured, not callable XS0832432446 SKGID 15/10/2020 FLOAT Ba2/BB/BB 250mn unsecured, not callable

Covenants: We have no confirmation whether the new RCF includes financial covenants.


<date>




EUR mn 2003 2004 2005 2006 2007 2008 2009 2010 2011 9M12 2012 9M13Sales 4,746 4,805 4,437 6,969 7,272 7,062 6,057 6,677 7,357 5,510 7,335 5,924EBIT margin adj. 7.8% 7.3% 5.5% 7.2% 9.0% 4.9% 5.7% 8.1% 9.0% 9.6% 9.3% 9.3%EBITDA rep. 607 582 484 661 987 916 713 819 981 785 1,012 762EBITDA margin adj. 14.1% 13.6% 12.7% 13.4% 14.9% 13.9% 13.1% 14.2% 14.4% 14.6% 14.4% 14.2%Net income -51 -18 -159 -154 166 -32 -107 58 218 190 260 136Funds from operations (FFO) 312 315 142 327 419 481 348 453 606 450 568 507Operating cash flow 375 363 182 275 396 568 413 364 643 345 549 460Free cash flow rep. (after Capex) 168 156 -10 -31 39 251 165 62 361 129 222 248Dividend payment -7 -6 -6 -7 -7 -77 -7 -5 -5 -38 -56 -51Retained cash flow (RCF) 305 310 136 320 412 404 341 448 601 412 512 456Acquisitions / disposals -108 29 385 15 32 62 1 -45 5 11 -161 0Share buy back / issues 0 0 0 0 1,434 0 0 9 8 0 14 -10Total debt rep. 3,280 3,161 5,534 5,253 3,819 3,904 3,696 3,612 3,609 3,870 3,254 3,324Net debt rep. 3,101 2,913 4,530 4,882 3,404 3,185 3,052 3,110 2,752 2,640 2,792 2,630Adj. for pensions 415 440 690 585 482 517 653 595 655 697 737 876Adj. for operating leases and others 45 66 143 164 148 112 135 143 164 164 192 192Net debt adj. 3,561 3,419 5,363 5,630 4,034 3,814 3,840 3,848 3,571 3,501 3,721 3,698

DEBT LEVERAGE

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

2007

2008

2009

2010

2011

9M12

2012

9M13

0

1

2

3

4

5



0

500

1,000

1,500

2,000

2,500

3,000

Liquidityas of9M13

ST-Debtas of9M13

2014 2015 2016 >2016

in E

UR

mn

Cash Undrawn, committed lines Bank and other debt Bonds

* We include the 2017 bond in ST-debt given that the company has exercised its call option in 10/13

CREDIT METRICS





UniCredit Research page 182

Disclaimer Our recommendations are based on information obtained from, or are based upon public information sources that we consider to be reliable but for the completeness and accuracy of which we assume no liability. All estimates and opinions included in the report represent the independent judgment of the analysts as of the date of the issue. 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. 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 to buy or subscribe for any financial, money market or investment instrument or any security, (ii) is neither intended as such an offer for sale or subscription of or solicitation of an offer to buy or subscribe for any financial, money market or investment instrument or any security nor (iii) as an advertisement thereof. The investment possibilities discussed in this report may not be suitable for certain investors depending on their specific investment objectives and time horizon or in the context of their overall financial situation. The investments discussed may fluctuate in price or value. Investors may get back less than they invested. 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 financial, money market or investment instrument or security under discussion are not explained in their entirety. This information is given without any warranty on an "as is" basis and should not be regarded as a substitute for obtaining individual advice. 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. Investors are urged to contact their bank's investment advisor for individual explanations and advice. Neither UniCredit Bank nor any of their respective directors, officers or employees nor any other person accepts any liability whatsoever (in negligence or otherwise) for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection therewith. This analysis is being distributed by electronic and ordinary mail to professional investors, who are expected to make their own investment decisions without undue reliance on this publication, and may not be redistributed, reproduced or published in whole or in part for any purpose. Responsibility for the content of this publication lies with: UniCredit Bank AG (UniCredit Bank), Am Tucherpark 16, 80538 Munich, Germany, (also responsible for the distribution pursuant to §34b WpHG). The company belongs to UniCredit Group. Regulatory authority: “BaFin“ – Bundesanstalt für Finanzdienstleistungsaufsicht, Lurgiallee 12, 60439 Frankfurt, Germany.

POTENTIAL CONFLICTS OF INTERESTS ABB 3, 7; Abertis 4; Air Liquide 3; Akzo Nobel 3; Alstom 2, 3, 7; APRR 7; Arcelor Mittal 3, 7; Areva 7; BASF 3, 7; BHP Billiton 7; Bouygues 3; Brenntag 2, 4; Buzzi Unicem 3, 4, 7; Deutsche Post 3, 7; EADS NV 3; Finmeccanica SpA 3, 6a, 7; Guala Closures 7; Holcim 7; Italcementi 4, 6a, 7; K+S 3; Linde 4, 7; Mondi 4; Rexam 7; Saint-Gobain 3, 4, 7; Schneider Electric 3; SIAS 6a, 7; Siemens AG 3, 6a, 7; ThyssenKrupp 2, 3; Vinci 2, 3, 4, 7; Voestalpine AG 3; Voith 6a; Wienerberger 3, 4; Key 1a: UniCredit Bank AG and/or a company affiliated with it (pursuant to relevant domestic law) owns at least 2% of the capital stock of the company. Key 1b: The analyzed company owns at least 2% of the capital stock of UniCredit Bank AG and/or a company affiliated with it (pursuant to relevant domestic law). Key 2: UniCredit Bank AG and/or a company affiliated with it (pursuant to relevant domestic law) belonged to a syndicate that has acquired securities or any related derivatives of the analyzed company within the twelve months preceding publication, in connection with any publicly disclosed offer of securities of the analyzed company, or in any related derivatives. Key 3: UniCredit Bank AG and/or a company affiliated (pursuant to relevant domestic law) administers the securities issued by the analyzed company on the stock exchange or on the market by quoting bid and ask prices (i.e. acts as a market maker or liquidity provider in the securities of the analyzed company or in any related derivatives). Key 4: The analyzed company and UniCredit Bank AG and/or a company affiliated (pursuant to relevant domestic law) concluded an agreement on services in connection with investment banking transactions in the last 12 months, in return for which the Bank received a consideration or promise of consideration. Key 5: The analyzed company and UniCredit Bank AG and/or a company affiliated (pursuant to relevant domestic law) have concluded an agreement on the preparation of analyses. Key 6a: Employees of UniCredit Bank AG Milan Branch and/or members of the Board of Directors of UniCredit (pursuant to relevant domestic law) are members of the Board of Directors of the Issuer. Members of the Board of Directors of the Issuer hold office in the Board of Directors of UniCredit (pursuant to relevant domestic law). Key 6b: The analyst is on the supervisory/management board of the company they cover. Key 7: UniCredit Bank AG Milan Branch and/or other Italian banks belonging to the UniCredit Group (pursuant to relevant domestic law) extended significant amounts of credit facilities to the Issuer. RECOMMENDATIONS, RATINGS AND EVALUATION METHODOLOGY Company Date Rec. Company Date Rec. Company Date Rec. ABESM 11/01/2013 Overweight GCLIM 17/04/2013 Hold SIEGR 02/05/2013 Marketweight AKZANA 21/02/2013 Underweight GEAGP 06/02/2013 Hold SIEGR 05/03/2013 no rec. AKZANA 02/01/2013 Marketweight GEAGP 30/01/2013 no rec. STYRO 18/09/2013 Sell ARGID 17/04/2013 Sell HOFP 09/08/2013 Marketweight STYRO 23/08/2013 Hold ARRFP 05/03/2013 Overweight INEGRP 11/01/2013 Hold STYRO 23/08/2013 Hold ATCOA 09/08/2013 Overweight ITCIT 01/08/2013 Hold STYRO 25/06/2013 Buy AVAN 18/09/2013 Buy KERLIN 08/05/2013 Hold STYRO 04/03/2013 Hold BBDBCN 01/11/2013 Hold KERLIN 30/04/2013 Sell SUFP 05/03/2013 Marketweight BBDBCN 22/02/2013 Buy KERLIN 14/03/2013 Buy SUFP 21/02/2013 Marketweight BBDBCN 22/02/2013 Buy KERLIN 11/01/2013 Sell TKAGR 15/05/2013 Hold BRCORO 26/11/2013 Hold LECTA 08/05/2013 Buy TKAGR 15/05/2013 Hold BRCORO 11/01/2013 Buy LXSGR 11/01/2013 Marketweight TKAGR 11/02/2013 Buy BZUIM 31/05/2013 Buy NSINO 25/10/2013 Sell TKAGR 01/02/2013 Marketweight CLNVX 14/02/2013 Overweight SAPSJ 18/09/2013 Hold TKAGR 11/01/2013 Buy CLNVX 14/02/2013 Overweight SDFGR 14/11/2013 Marketweight VOITGR 30/05/2013 Marketweight COFIRT 11/01/2013 Underweight SDFGR 07/11/2013 Underweight WIEAV 17/04/2013 Hold DSM 03/07/2013 Marketweight SDFGR 06/11/2013 Marketweight WIEAV 26/02/2013 Buy DSM 11/01/2013 Overweight SDFGR 01/08/2013 Underweight WIEAV 26/02/2013 Buy EVKGR 07/06/2013 Marketweight SGOFP 05/08/2013 Overweight WURTH 12/07/2013 Marketweight FNCIM 25/11/2013 Restricted SGOFP 25/07/2013 Overweight WURTH 10/04/2013 no rec. Overview of our ratings You will find the history of rating regarding recommendation changes as well as an overview of the breakdown in absolute and relative terms of our investment ratings on our website http://www.disclaimer.unicreditmib.eu/credit-research-rd/Recommendations_CR_e.pdf.

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Note on the evaluation basis for interest-bearing securities: Recommendations relative to an index: For high grade names the recommendations are relative to the "iBoxx EUR Benchmark" index family, for sub investment grade names the recommendations are relative to the "iBoxx EUR High Yield" index family. Marketweight: We recommend having the same portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is equal to the total return of the index. Overweight: We recommend having a higher portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is greater than the total return of the index. Underweight: We recommend having a lower portfolio exposure in the name as the respective iBoxx index. We expect that the average total return of the instruments of the issuer is less than the total return of the index. Outright recommendations: Hold: We recommend holding the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is equal to the yield. Buy: We recommend buying the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is greater than the yield. Sell: We recommend selling the respective instrument for investors who already have exposure. We expect that the total return of the instruments of the issuer is less than the yield. We employ three further categorizations for interest-bearing securities in our coverage: Restricted: A recommendation and/or financial forecast is not disclosed owing to compliance or other regulatory considerations such as a blackout period or a conflict of interest. Coverage in transition: Due to changes in the research team, the disclosure of a recommendation and/or financial information are temporarily suspended. The interest-bearing security remains in the research universe and disclosures of relevant information will be resumed in due course. Not rated: Suspension of coverage. Trading recommendations for fixed-interest securities mostly focus on the credit spread (yield difference between the fixed-interest security and the relevant government bond or swap rate) and on the rating views and methodologies of recognized agencies (S&P, Moody’s, Fitch). Depending on the type of investor, investment ratings may refer to a short period or to a 6 to 9-month horizon. Please note that the provision of securities services may be subject to restrictions in certain jurisdictions. You are required to acquaint yourself with local laws and restrictions on the usage and the availability of any services described herein. The information is not intended for distribution to or use by any person or entity in any jurisdiction where such distribution would be contrary to the applicable law or provisions. Coverage Policy A list of the companies covered by UniCredit Bank is available upon request. 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. SIGNIFICANT FINANCIAL INTEREST: UniCredit Bank and/or a company affiliated (pursuant to relevant national law) with them regularly trade shares of the analyzed company. UniCredit Bank and/or a company affiliated may hold significant open derivative positions on the stocks of the company which are not delta-neutral. Analyses may refer to one or several companies and to the securities issued by them. In some cases, the analyzed issuers have actively supplied information for this analysis. ANALYST DECLARATION The author’s remuneration has not been, and will not be, geared to the recommendations or views expressed in this study, neither directly nor indirectly. ORGANIZATIONAL AND ADMINISTRATIVE ARRANGEMENTS TO AVOID AND PREVENT CONFLICTS OF INTEREST To prevent or remedy conflicts of interest, UniCredit Bank has established the organizational arrangements required from a legal and supervisory aspect, adherence to which is monitored by its compliance department. Conflicts of interest arising are managed by legal and physical and non-physical barriers (collectively referred to as “Chinese Walls”) designed to restrict the flow of information between one area/department of UniCredit Bank and another. In particular, Investment Banking units, including corporate finance, capital market activities, financial advisory and other capital raising activities, are segregated by physical and non-physical boundaries from Markets Units, as well as the research department. Disclosure of publicly available conflicts of interest and other material interests is made in the research. Analysts are supervised and managed on a day-to-day basis by line managers who do not have responsibility for Investment Banking activities, including corporate finance activities, or other activities other than the sale of securities to clients. ADDITIONAL REQUIRED DISCLOSURES UNDER THE LAWS AND REGULATIONS OF JURISDICTIONS INDICATED Notice to Australian investors This publication is intended for wholesale clients in Australia subject to the following: UniCredit Bank AG and its branches do not hold an Australian Financial Services licence but are exempt from the requirement to hold a licence under the Act in respect of the financial services to wholesale clients. UniCredit Bank AG and its branches are regulated by BaFin under German laws, which differ from Australian laws. This document is only for distribution to wholesale clients as defined in Section 761G of the Corporations Act. UniCredit Bank AG and its branches are not Authorised Deposit Taking Institutions under the Banking Act 1959 and are not authorised to conduct a banking business in Australia. Notice to Austrian investors This document does not constitute or form part of any offer for sale or subscription of or solicitation of any offer to buy or subscribe for any securities and 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. This document is confidential and is being supplied to you solely for your information and may not be reproduced, redistributed or passed on to any other person or published, in whole or part, for any purpose. Notice to Czech investors This report is intended for clients of UniCredit in the Czech Republic and may not be used or relied upon by any other person for any purpose. Notice to Italian investors This document is not for distribution to retail clients as defined in article 26, paragraph 1(e) of Regulation n. 16190 approved by CONSOB on 29 October 2007. In the case of a short note, we invite the investors to read the related company report that can be found on UniCredit Research website www.research.unicreditgroup.eu. Notice to Japanese investors This document does not constitute or form part of any offer for sale or subscription for or solicitation of any offer to buy or subscribe for any securities and 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. Notice to Polish investors This document is intended solely for professional clients as defined in Art. 3 39b of the Trading in Financial Instruments Act of 29 July 2005. The publisher and distributor of the recommendation certifies that it has acted with due care and diligence in preparing the recommendation, however, assumes no liability for its completeness and accuracy. Notice to Russian investors As far as we are aware, not all of the financial instruments referred to in this analysis have been registered under the federal law of the Russian Federation "On the Securities Market" dated 22 April 1996, as amended (the "Law"), and are not being offered, sold, delivered or advertised in the Russian Federation. This analysis is intended for qualified investors, as defined by the Law, and shall not be distributed or disseminated to a general public and to any person, who is not a qualified investor. Notice to Turkish investors Investment information, comments and recommendations stated herein are not within the scope of investment advisory activities. Investment advisory services are provided in accordance with a contract of engagement on investment advisory services concluded with brokerage houses, portfolio management companies, non-deposit banks and the clients. Comments and recommendations stated herein rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not suit your financial status, risk and return preferences. For this reason, to make an investment decision by relying solely on the information stated here may not result in consequences that meet your expectations.

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Notice to UK investors This communication is directed only at clients of UniCredit Bank 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 U.S. investors This report is being furnished to U.S. recipients in reliance on Rule 15a-6 ("Rule 15a-6") under the U.S. Securities Exchange Act of 1934, as amended. 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" (as such term is defined in Rule 15a-6) and that it understands the risks involved in executing transactions in such securities. Any U.S. recipient of this report that wishes to discuss or receive additional information regarding any security or issuer mentioned herein, or engage in any transaction to purchase or sell or solicit or offer the purchase or sale of such securities, should contact a registered representative of UniCredit Capital Markets, LLC. Any transaction by U.S. persons (other than a registered U.S. broker-dealer or bank acting in a broker-dealer capacity) must be effected with or through UniCredit Capital Markets. The securities referred to in this report may not be registered under the U.S. Securities Act of 1933, as amended, and the issuer of such securities may not be subject to U.S. reporting and/or other requirements. Available information regarding the issuers of such securities may be limited, and such issuers may not be subject to the same auditing and reporting standards as U.S. issuers. The information contained in this report is intended solely for certain "major U.S. institutional investors" and may not be used or relied upon by any other person for any purpose. Such information is provided for informational purposes only and does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, as amended, or under any other U.S. federal or state securities laws, rules or regulations. The investment opportunities discussed in this report may be unsuitable for certain investors depending on their specific investment objectives, risk tolerance and financial position. In jurisdictions where UniCredit Capital Markets is not registered or licensed to trade in securities, commodities or other financial products, transactions may be executed only in accordance with applicable law and legislation, which may vary from jurisdiction to jurisdiction and which may require that a transaction be made in accordance with applicable exemptions from registration or licensing requirements. The information in this publication is based on carefully selected sources believed to be reliable, but UniCredit Capital Markets does not make any representation with respect to its completeness or accuracy. All opinions expressed herein reflect the author’s judgment at the original time of publication, without regard to the date on which you may receive such information, and are subject to change without notice. UniCredit Capital Markets may have issued other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. These publications reflect the different assumptions, views and analytical methods of the analysts who prepared them. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is provided in relation to future performance. UniCredit Capital Markets and any company affiliated with it may, with respect to any securities discussed herein: (a) take a long or short position and buy or sell such securities; (b) act as investment and/or commercial bankers for issuers of such securities; (c) act as market makers for such securities; (d) serve on the board of any issuer of such securities; and (e) act as paid consultant or advisor to any issuer. The information contained herein may include forward-looking statements within the meaning of U.S. federal securities laws that are subject to risks and uncertainties. Factors that could cause a company’s actual results and financial condition to differ from expectations include, without limitation: political uncertainty, changes in general economic conditions that adversely affect the level of demand for the company’s products or services, changes in foreign exchange markets, changes in international and domestic financial markets and in the competitive environment, and other factors relating to the foregoing. All forward-looking statements contained in this report are qualified in their entirety by this cautionary statement This document may not be distributed in Canada.




UniCredit Research* Michael Baptista Global Head of CIB Research +44 207 826-1328 [email protected]

Dr. Ingo Heimig Head of Research Operations +49 89 378-13952 [email protected]

Credit Research

Luis Maglanoc, CFA, Head +49 89 378-12708 [email protected]

Credit Strategy & Structured Credit Research

Dr. Philip Gisdakis, Head Credit Strategy +49 89 378-13228 [email protected]

Dr. Christian Weber, CFA, Deputy Head Credit Strategy +49 89 378-12250 [email protected]

Dr. Tim Brunne Quantitative Credit Strategy +49 89 378-13521 [email protected]

Markus Ernst Credit Strategy & Structured Credit +49 89 378-14213 [email protected]

Dr. Stefan Kolek EEMEA Corporate Credits & Strategy +49 89 378-12495 [email protected]

Manuel Trojovsky Credit Strategy & Structured Credit +49 89 378-14145 [email protected]

Financials Credit Research

Franz Rudolf, CEFA, Head Covered Bonds +49 89 378-12449 [email protected]

Valentina Stadler, Deputy Head Sub-Sovereigns & Agencies +49 89 378-16296 [email protected]

Florian Hillenbrand, CFA Covered Bonds +49 89 378-12961 [email protected]

Dr. Tilo Höpker Banks +49 89 378-12960 [email protected]

Luis Maglanoc, CFA Regulatory & Accounting Service +49 89 378-12708 [email protected]

Natalie Tehrani Monfared Regulatory & Accounting Service +49 89 378-12242 [email protected]

Emanuel Teuber Banks, Financial Services, Insurance +49 89 378-14245 [email protected]

Dr. Claudia Vortmüller Banks +49 89 378-12429 [email protected]

Corporate Credit Research

Stephan Haber, CFA, Co-Head Telecoms, Technology +49 89 378-15192 [email protected]

Dr. Sven Kreitmair, CFA, Co-Head Automotive & Mobility +49 89 378-13246 [email protected]

Jana Arndt, CFA Basic Resources, Industrial G&S, Construction & Materials +49 89 378-13211 [email protected]

Christian Aust, CFA Industrial Transportation, Media, Pulp & Paper +49 89 378-12806 [email protected]

Olga Fedotova Russia/CIS (Banks, Oil & Gas, Basic Resources, Telecoms) +44 207 826-1376 [email protected]

Dr. Manuel Herold Consumers, Oil & Gas +49 89 378-12650 [email protected]

Max Huefner, CFA Chemicals, Aerospace & Defense, Packaging +49 89 378-13212 [email protected]

Susanne Reichhuber Utilities +49 89 378-13247 [email protected]

Alexander Rozhetskin Russia/CIS (Banks, Oil & Gas, Basic Resources, Telecoms) +44 207 826-7953 [email protected]

Dr. Silke Stegemann, CEFA Health Care & Pharma, Food & Beverage, Tobacco +49 89 378-18202 [email protected]

Publication Address

UniCredit Research Corporate & Investment Banking UniCredit Bank AG Arabellastrasse 12 D-81925 Munich Tel. +49 89 378-18927

Bloomberg UCCR Internet www.research.unicreditgroup.eu

*UniCredit Research is the joint research department of UniCredit Bank AG (UniCredit Bank), UniCredit Bank AG London Branch (UniCredit Bank London), UniCredit Bank AG Milan Branch (UniCredit Bank Milan), UniCredit Bank AG Vienna Branch (UniCredit Bank Vienna), UniCredit Bulbank, Zagrebačka banka d.d., UniCredit Bank Czech Republic (UniCredit Bank Czechia), Bank Pekao, ZAO UniCredit Bank Russia (UniCredit Russia), UniCredit Bank Slovakia a.s. (UniCredit Slovakia), UniCredit Tiriac Bank (UniCredit Tiriac).

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