Plastic Omnium - Credit Suisse

DISCLOSURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION®

Client-Driven Solutions, Insights, and Access

25 March 2015

Europe/France

Equity Research

Auto Parts & Equipment

Plastic Omnium (PLOF.PA) INITIATION

Structural risks threatening growth in key

product areas

■ Initiate with Underperform, target price €20—two-fold structural risk:

We believe the market is failing to discount substantial structural risks to

Plastic Omnium's growth in key products: 1) overestimation of the need for

lightweight parts to reach CO2 targets; and 2) overlooking the likely decline

in diesel market share impacting sales of SCR (selective catalytic reduction).

Because of this, we expect the stock to de-rate relative to peers.

■ For lightweight parts, CO2 rules are a headwind, not tailwind: Under

2020 CO2 regulations, lighter OEM fleets have tougher CO2 targets,

negating the benefit of lightweighting. Our cost-benefit analysis shows that

weight reduction is one of the most expensive ways to reduce emissions and

penetration levels of some key products like bumpers, which are already

high. We prefer powertrain (e.g., Valeo, Outperform, TP €150) as the best

play on emissions regulations.

■ Diesel/SCR expectations too optimistic: Market share of diesel should

decline in our view as the efficiency gap with petrol cars narrows, while the

company expects flat market share development. We think there is

substantial downside to the company's growth expectations for SCR.

■ Organic growth outperformance to slow: Outperformance vs. global car

production slowed by more than half from 2013 to 2014, and we expect this

to reach zero by 2018E. Penetration maturity in key products should also

increase price pressure over the same period. FCF to remain weak.

■ Valuation: Our target price is based on a 2016E EV/EBITDA multiple of 5.0x

and our Credit Suisse HOLT® warranted value of €19.5 per share.

Share price performance

10

15

20

25

Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14

Price Price relative

The price relative chart measures performance against the

CAC 40 INDEX which closed at 5045.22 on 20/03/15

On 20/03/15 the spot exchange rate was €1./Eu 1. -

Eu .92/US$1

Performance Over 1M 3M 12M Absolute (%) 1.3 21.6 2.1 Relative (%) -3.1 4.7 -14.3

Financial and valuation metrics

Year 12/14A 12/15E 12/16E 12/17E Revenue (Eu m) 4,437.2 4,937.4 5,288.2 5,615.4 EBITDA (Eu m) 572.04 663.85 725.74 769.48 Adjusted Net Income (Eu m) 224.55 280.09 323.11 349.51 CS adj. EPS (Eu) 1.49 1.86 2.14 2.32 ROIC (%) 18.96 20.29 20.41 19.79 P/E (adj., x) 18.06 14.48 12.55 11.60 P/E rel. (%) 104.6 93.8 92.4 95.1 EV/EBITDA 8.0 6.9 6.2 5.8

Dividend (12/15E, Eu) 0.46 IC (12/15E, Eu m) 1,699.81 Dividend yield (%) 1.7 EV/IC 2.7 Net debt (12/15E, Eu m) 418.2 Current WACC 8.50 Net debt/equity (12/15E, %) 32.6 Free float (%) 37.50 BV/share (12/15E, Eu) 8.4 Number of shares (m) 153.58

Source: FTI, Company data, Thomson Reuters, Credit Suisse Securities (EUROPE) LTD. Estimates.

Rating UNDERPERFORM* Price (20 Mar 15, Eu) 26.92 Target price (Eu) 20.00¹ Market cap. (Eu m) 4,134.29 Enterprise value (Eu m) 4,552.5

*Stock ratings are relative to the coverage universe in each

analyst's or each team's respective sector.

¹Target price is for 12 months.

Research Analysts

Fei Teng

44 20 7883 9978

[email protected]

Alexander Haissl

44 20 7888 8507

[email protected]

Mike Dean

44 20 7883 2371

[email protected]

Specialist Sales: Andrew Bell

44 20 7888 0479

[email protected]

25 March 2015

Plastic Omnium (PLOF.PA) 2

Compagnie Pla Om PLOF.PA Price (20 Mar 15): Eu26.92, Rating: UNDERPERFORM, Target Price: Eu20.00

Income statement (Eu m) 12/14A 12/15E 12/16E 12/17E

Revenue (Eu m) 4,437 4,937 5,288 5,615 EBITDA 572 664 726 769 Depr. & amort. (200) (218) (222) (224) EBIT (Eu) 372 446 504 546 Net interest exp. (51) (50) (51) (51) Associates 39 43 48 52 Other adj, (66) (73) (75) (81) PBT (Eu) 294 366 426 466 Income taxes (64) (83) (101) (115) Profit after tax 229 283 325 351 Minorities (5) (3) (2) (2) Preferred dividends — — — — Associates & other — — — — Net profit 225 280 323 350 Other NPAT adjustments — — — — Reported net income 225 280 323 350

Cash flow (Eu) 12/14A 12/15E 12/16E 12/17E

EBIT 372 446 504 546 Net interest (48) (50) (51) (51) Cash taxes paid (81) (83) (101) (115) Change in working capital (17) (5) (5) (3) Other cash & non-cash items 183 170 174 172 Cash flow from operations 409 477 522 550 CAPEX (254) (281) (301) (307) Free cashflow adj. — — — — Free cash flow to the firm 156 196 221 242 Acquisitions (0.21) — — — Divestments 29 — — — Other investment/(outflows) (84) (100) (102) (108) Cash flow from investments (309) (382) (403) (415) Net share issue/(repurchase) (14) — — — Dividends paid (51) (55) (68) (78) Issuance (retirement) of debt 8 — — — Other (7) — — — Cash flow from financing activities

(63) (55) (68) (78) Effect of exchange rates 5 — — — Changes in Net Cash/Debt 42 41 52 57 . Net debt at start 501 459 418 367 Change in net debt (42) (41) (52) (57) Net debt at end 459 418 367 310

Balance sheet (Eu m) 12/14A 12/15E 12/16E 12/17E

Assets Cash and cash equivalents 535 576 628 685 Accounts receivable 735 792 831 868 Inventory 313 346 369 390 Other current assets 0.37 0.37 0.37 0.37 Total current assets 1,584 1,715 1,828 1,944 Total fixed assets 1,008 1,155 1,319 1,493 Intangible assets and goodwill 636 653 671 689 Investment securities — — — — Other assets 359 359 359 359 Total assets 3,588 3,882 4,177 4,485 Liabilities Accounts payable 804 888 945 1,001 Short-term debt 93 93 93 93 Other short term liabilities 541 541 541 541 Total current liabilities 1,438 1,521 1,579 1,635 Long-term debt 902 902 902 902 Other liabilities 177 177 178 178 Total liabilities 2,516 2,600 2,658 2,715 Shareholders' equity 1,054 1,261 1,496 1,745 Minority interest 18 21 23 25 Total equity & liabilities 3,588 3,882 4,177 4,485 Net debt (Eu m) 459 418 367 310

Per share data 12/14A 12/15E 12/16E 12/17E

No. of shares (wtd avg) 151 151 151 151 CS adj. EPS (Eu) 1.49 1.86 2.14 2.32 Prev. EPS (Eu) — — — — Dividend (Eu) 0.37 0.46 0.53 0.57 Div yield 1.37 1.71 1.96 2.12 Dividend payout ratio 24.83 24.74 24.59 24.63 Free cash flow per share (Eu)

1.03 1.30 1.47 1.61

Key ratios and valuation

12/14A 12/15E 12/16E 12/17E

Growth (%) Sales 2.4 11.3 7.1 6.2 EBIT 9.7 19.9 13.1 8.3 Net profit 16.2 24.7 15.4 8.2 EPS 16.5 24.7 15.4 8.2 Margins (%) EBITDA margin 12.9 13.4 13.7 13.7 EBIT margin 8.4 9.0 9.5 9.7 Pretax margin 6.6 7.4 8.1 8.3 Net margin 5.1 5.7 6.1 6.2 Valuation metrics (x) EV/sales 1.0 0.9 0.9 0.8 EV/EBITDA 8.0 6.9 6.2 5.8 EV/EBIT 12.4 10.2 8.9 8.1 P/E 18.1 14.5 12.6 11.6 P/B 3.8 3.2 2.7 2.3 Asset turnover 1.2 1.3 1.3 1.3 ROE analysis (%) ROE stated-return on equity

22.4 23.5 22.9 21.1 ROIC 19.0 20.3 20.4 19.8 Interest burden 0.79 0.82 0.85 0.85 Tax rate 21.9 22.6 23.6 24.6 Financial leverage 0.91 0.77 0.65 0.56 Credit ratios (%) Net debt/equity 42.8 32.6 24.1 17.5 Net debt/EBITDA 0.80 0.63 0.51 0.40 Interest coverage ratio 7.3 8.9 9.9 10.8

Source: FTI, Company data, Thomson Reuters, Credit Suisse Securities

(EUROPE) LTD. Estimates.

10

15

20

25

Mar-13 Jul-13 Nov-13 Mar-14 Jul-14 Nov-14

Price Price relative

The price relative chart measures performance against the CAC 40 INDEX which

closed at 5045.22 on 20/03/15

On 20/03/15 the spot exchange rate was €1./Eu 1. - Eu .92/US$1

25 March 2015


Key investment charts Figure 1: CO2 regulations mean it is more difficult to

reach 2020/21 targets if weight is reduced

Figure 2: Lightweighting is not a cost-efficient way of

reducing CO2 ($ cost per 1% CO2 reduction)

Daimler

BMWVW

PSARenault-Nissan

FCA

GM

Ford

Toyota

Average

70

80

90

100

110

120

130

140

150

1,100 1,200 1,300 1,400 1,500 1,600 1,700

Target 2015: 130g/km

Target 2020/21: 95g/km

Reducing weight conversely makes it more difficult to reach CO2 targets

106

101

94

48

42

37

15

0 20 40 60 80 100 120

Electrification

Lightweighting

Transmission

Energy management

Powertrain

Aerodynamics

Tyres

Source: EEA, ICCT, circles represent 2013 levels Source: IKA data and Credit Suisse analysis

Figure 3: The market for plastic bumpers is saturated Figure 4: Some further upside potential in substituting

steel fuel systems for plastic, mostly in Asia

In-house, 33%

Plastic Omnium, 10%

Magna, 9%Faurecia, 5%

Motherson, 3%

Flex-N-Gate, 3%

Hyundai Mobis, 3%

JJ Mold, 2%

Rehau, 2%

Hanil E-HWA, 2%

Tongyang, 2%

Others, 22%

Steel, 4%

Steel, 26%

Plastic Omnium, 21%

Kautex, 14%

Yapp-ABC, 10%

TI Automotive, 9%

Yachiyo, 5%

FTS, 3%

Donghee, 2%

Shunrong, 2%

Magneti Marelli, 1%

Others, plastic, 7%

Source: Plastic Omnium data Source: Plastic Omnium data

Figure 5: Efficiency gap between diesel and petrol

narrowing

Figure 6: Reduced attractiveness of diesel likely puts SCR

growth at risk (Europe diesel share %)

8.1%

6.9%

4.2%

3.3% 3.4%

1.6%2.2% 2.2%

1.1% 1.3%

Petrol

Difference

Diesel

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

5.0

5.5

6.0

6.5

7.0

7.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

45%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Petrol Diesel Other

Source: EEA, ICCT Source: EEA

25 March 2015


Key charts Figure 7: Sales CAGR 2014-18E vs. peers Figure 8: EBIT CAGR 2014-18E vs. peers

11.2%

8.2%7.8%

7.3% 7.1%

6.0%5.3%

0%

2%

4%

6%

8%

10%

12%

Valeo Continental Leoni Faurecia PlasticOmnium

Hella Autoliv

21.0%

18.6%17.2% 16.9%

12.8%

11.1%9.6%

0%

5%

10%

15%

20%

25%

Valeo Leoni Hella Faurecia Continental PlasticOmnium

Autoliv

Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates

Figure 9: Sales by region, 2014 Figure 10: Customer nationality, 2014

Europe, 53%

North America, 27%

Asia, 16%

South America, 4%

French, 21%

German, 33%

American, 24%

Asian, 18%

Other, 4%

Source: Company data Source: Company data

Figure 11: We expect margin gap between Automotive

and Environment to widen

Figure 12: No meaningful relocation of headcount to low

cost countries since 2012

-3.7%

-2.6%-1.7%

-3.5%

-1.5%

1.8%

6.9%

3.2%

2.7%

1.3% 1.5%2.2%

2.6% 2.8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

E

20

16

E

20

17

E

20

18

E

Difference Automotive Environment

82% 78% 74% 73% 71% 71% 72%

18% 22% 26% 27% 29% 29% 28%

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013 2014

High cost countries Low cost countries (Asia, South America)

Source: Company data, Credit Suisse estimates Source: Company data

25 March 2015


Table of contents Key investment charts 2 Key charts 4 Investment summary 6 Company overview 7

Global suppliers valuation 8 Weight reduction & plastic parts 9 The fading case for diesel & SCR 13 The Environment division 16 Shareholding structure 17 Credit Suisse forecasts 18 Valuation and key risks 21

Credit Suisse HOLT valuation 22 Valuation ratios 25 Financial statements – management accounts 26 Financial statements – IFRS 29 Credit Suisse PEERs map 32

25 March 2015


Investment summary Structural risks cloud growth outlook

We initiate coverage of Plastic Omnium with an Underperform rating and a €20 TP.

A period of secular growth in plastic auto parts has peaked, in our view, and we see

structural downside risks to growth from 1) overestimation of need for lightweight parts to

reach emissions targets, and 2) overestimation of diesel market growth, which drives SCR.

We see little structural upside potential left in auto exteriors, which contributes 52% of

group sales: 1) CO2 regulations deter carmakers from implementing weight savings,

2) better relative cost effectiveness of other CO2-reduction technologies, and 3) mature

penetration levels in markets for key products. Plastic fuel systems, which make up 40% of

revenues, are better positioned structurally, but we think the company's elevated

expectations for its SCR product is misplaced given the declining attractiveness of diesel

cars in Europe.

In our view, weight reduction is not the answer to 95 g/km CO2: Superficially, weight

reduction should improve fuel economy and CO2 emissions, but these benefits are rather

offset by 2020/21 regulations, which dictate that the lower the average fleet weight for an

OEM, the lower its CO2 target. This disincentivises OEMs from employing weight reduction

and poses a risk to growth in key product areas such as bumpers (30-35% of group sales),

tailgates (10-15% of sales) and fuel systems (35-40% of sales). The penetration of plastic

bumpers is already 96%, which leaves little structural upside potential, and our analysis of

the costs and benefits of various emissions reduction technologies shows that

lightweighting is one of the least cost-efficient ways of reducing CO2. We continue to prefer

powertrain as the best play on emissions regulations, for example Valeo (OP, TP €150).

SCR expectations too optimistic: We think SCR installation rates should continue to rise

in diesel cars, but we see the market for diesel cars declining as their efficiency advantage

over petrol (gasoline) cars has narrowed to almost negligible. Plastic Omnium expects the

global diesel market share to remain constant until 2018, but we see this as overly

optimistic given trends in Europe (the main market for diesel cars) and increasing

regulatory focus on the harmful effects of NOx (nitrogen oxides) and particulates from

diesel emissions.

Environment margins peaking, separation looks possible: Historically, margins in the

Environment division have rarely exceeded 7%, and we see this as close to the peak of

the margin potential for this business. Restructuring of this business over the past two

years has improved profitability significantly, and the lack of synergies with the more

profitable Automotive division points towards potential upside risk of a separation of the

two, especially as the profitability gap is expected to widen.

Earnings and sales growth below sector average: We think the company's €7bn sales

goal for 2018 is achievable but largely due to a step-up from currency gains (+7.1% in

2015E). Organic sales outperformance versus global car production more than halved in

2014, and we see the outperformance declining to zero by 2018E. We forecast sales

CAGR of +7.1% for 2015-18E, below the supplier average of +7.6%, and EBIT CAGR of

+11.1%, also below the supplier average of +15.3%. We forecast EBIT margin rising to

9.7% in 2018E from 8.4% in 2014 on volume leverage (JVs unconsolidated), although we

think pricing pressure will result in price/mix of -30bps per year. We expect free cash to

continue to be the weakest compared to peers, yielding just 2.9% in 2016E.

Upside risk to our expectations: Apart from a cyclical volume upturn, regulatory change

could create a more bullish environment for plastic parts, particularly more incentivisation

of lightweighting. Also, there is small re-rating upside risk if the Automotive division

separates from the Environment division.

25 March 2015


Company overview Figure 13: Company overview

Automotive division Auto exterior

92% of 2014 revenue Bumpers, tailgates, front-end modules, spoilers, floor modules, body protectors, others

97 plants Around 2/3 of sales are bumpers, majority of rest in tailgates

19,500 employees 10% global market share in bumpers, 65% market share in plastic tailgates

Makes >70,000 plastic body parts per day

35% lighter than steel parts, constitutes up to 50% of exterior painted surface

Competitors: bumpers – OEMs (33%), Magna (9%), Faurecia (5%); fuel systems – Kautex

(14%), Yapp-ABC (10%)

Auto Inergy

Products: Blow-moulded polyethylene fuel systems, SCR (selective catalytic reduction)

Plastic tank 20-30% lighter than metal tank

21% global market share in fuel systems

SCR sales c. €110m currently, expected by the company to generate €250m revenue in 2016

17% global market share in light vehicle SCR

Environment division Containers, urban equipment

8% of 2014 revenue Household waste receptacles, containers, composters, underground containers

13 plants all Europe Uses 55% recycled plastic (up from 20% in 2007)

2,500 employees Business focused on Europe

29% market share in Europe

Competitors: ESE (20%), Schaefer (17%) Associated services

Maintenance & cleaning

Source: Company data

25 March 2015


Global suppliers valuations

Figure 14: Global auto supplier valuation

Price MC €m Rating CS TP

European Suppliers € € EV/EBITDA EV/EBIT P/E

2013 2014E 2015E 2016E 2013 2014E 2015E 2016E 2013 2014E 2015E 2016E

Autoliv $115.27 9,472 N $108.0 10.06 10.25 9.28 8.33 13.03 12.50 11.86 10.59 19.81 19.44 17.51 15.51

Continental 226.00 45,201 N 228.0 10.18 10.10 8.45 7.61 13.87 13.38 11.20 9.93 20.64 17.97 14.34 12.52

Elringklinger 29.24 1,853 U 25.1 9.56 9.30 8.47 7.59 14.08 13.67 12.07 10.45 17.57 17.23 14.94 12.67

Faurecia 41.70 5,167 N 42.6 6.53 5.69 4.71 4.15 12.99 10.38 7.64 6.48 52.78 31.12 13.09 10.06

GKN 375.60p 8,547 O 410.0p 7.56 7.50 7.21 6.52 11.56 10.96 10.62 9.23 13.27 13.06 12.75 11.15

Hella 47.93 5,325 O 52.0 9.63 7.57 6.75 6.06 18.29 13.51 11.50 9.95 23.91 21.50 16.42 14.32

Leoni 59.50 1,944 N 53.6 8.13 7.00 5.83 5.07 11.63 10.49 8.49 7.03 18.42 14.13 10.41 8.41

Plastic Omnium 26.92 4,134 U 20.0 8.66 8.04 6.93 6.34 13.58 12.38 10.32 9.13 21.04 18.06 14.48 12.55

Rheinmetall 47.00 1,861 U 42.4 10.37 11.24 7.09 6.45 30.01 32.95 12.82 11.34 62.67 138.23 14.11 11.43

Valeo 138.60 11,014 O 150.0 9.00 8.27 6.90 5.95 15.35 14.15 10.84 8.92 24.27 19.17 13.92 11.13

Average 8.97 8.49 7.16 6.41 15.44 14.44 10.74 9.30 27.44 30.99 14.20 11.98

US Suppliers $ $ EV/EBITDA EV/EBIT P/E

2013 2014E 2015E 2016E 2013 2014E 2015E 2016E 2013 2014E 2015E 2016E

American Axle 25.86 1,815 N 26.0 7.67 6.85 5.64 5.47 13.33 11.97 8.96 8.75 14.79 11.22 9.29 8.63

BorgWarner 60.46 12,713 N 68.0 11.74 10.50 9.71 8.79 16.04 13.51 12.75 11.43 20.88 18.56 17.28 16.01

Delphi 79.96 21,556 O 89.0 10.40 9.52 9.49 8.45 13.44 12.28 12.22 10.67 18.19 15.72 14.91 12.43

Lear 111.97 8,094 O 115.0 9.21 7.59 5.92 5.47 12.78 10.13 7.81 7.02 18.92 13.75 11.63 10.05

Magna 106.20 20,328 O 127.0 7.47 6.62 6.73 5.91 11.72 9.05 9.36 8.06 15.19 11.67 11.23 9.09

TRW 104.85 11,168 N 105.0 7.02 6.76 6.39 5.82 9.43 9.15 8.55 7.72 15.21 13.58 12.90 11.48

Average 8.92 7.97 7.31 6.65 12.79 11.02 9.94 8.94 17.20 14.08 12.87 11.28

Japan Suppliers ¥ ¥ EV/EBITDA EV/EBIT P/E

FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E FY14 FY15E FY16E FY17E

Aisin Seiki 4,465.0 10,135 O 5,150 4.23 4.11 3.66 3.42 7.92 7.98 6.78 6.11 13.98 14.65 12.24 11.05

Calsonic Kansei 800.0 1,684 N 750 4.25 4.08 3.84 3.65 7.59 7.30 6.63 6.08 8.57 10.72 9.74 9.32

Denso 5,718.0 38,941 O 6,550 8.22 8.08 7.16 6.63 12.51 13.12 11.38 10.27 15.85 17.08 14.95 13.57

Exedy 2,805.0 1,050 N 3,000 4.27 4.39 3.85 3.36 6.95 7.72 6.76 5.75 10.97 14.33 11.71 10.77

Keihin 1,967.0 1,121 N 1,850 3.87 3.34 3.11 2.97 6.79 5.81 5.34 4.95 11.87 12.30 10.39 9.70

Musashi Seimitsu 2,603.0 626 N 2,750 5.31 5.02 4.54 4.23 13.24 10.31 9.45 8.22 11.89 12.30 10.97 9.55

NGK Spark Plug 3,360.0 5,786 O 4,300 11.19 8.91 6.88 6.28 13.70 10.86 8.37 7.63 22.36 17.74 13.13 11.78

Takata 1,330.0 852 N 1,400 2.38 2.20 2.18 2.13 3.98 3.60 3.60 3.48 9.92 -3.69 6.51 6.14

Tokai Rika 2,756.0 2,001 N 3,000 5.16 4.84 4.31 4.02 7.87 7.64 6.77 6.23 14.45 12.50 10.87 10.00

Toyoda Gosei 2,782.0 2,786 U 2,350 3.95 4.13 3.93 3.75 7.44 8.36 7.76 7.24 13.74 16.37 14.40 13.34

Toyota Boshoku 1,514.0 2,189 N 1,500 4.83 4.85 4.45 4.22 11.11 11.44 9.42 8.43 22.25 56.11 17.53 16.50

Toyota Industries 6,880.0 17,269 O 7,800 12.78 11.84 10.83 10.05 26.05 23.38 20.04 17.75 23.50 17.71 15.77 14.03

Average 5.87 5.48 4.89 4.56 10.43 9.79 8.53 7.68 14.95 16.51 12.35 11.31

Source: Company data, Credit Suisse estimates; prices are as of close 20 March 2015

25 March 2015


Weight reduction & plastic parts Not the answer to 2020/21 emissions regulations

It is well known that the 2020/21 European legislation of 95 g/km CO2 limitations on

passenger cars is expected to increase carmakers' spending on fuel efficiency measures.

However, the rules are structured such that carmakers are disincentivised to reduce

vehicle weight.

In our view, the problem in the underlying index parameter is the fleet weight. This means

that each carmaker's individual limitation is geared to the weight of its fleet, thus, the

lighter a manufacturer's fleet is, the more challenging its CO2 target.

■ For every 100kg decrease in weight of a manufacturer's average fleet weight, its fleet

CO2 allowance falls by 3.33 g/km, and vice versa for fleet weight increases.

■ For example, if a carmaker reduces its fleet average weight by 100kg, it will need to

reduce its CO2 emissions by an incremental 3.33 g/km on top of any savings the

weight reduction already achieves.

■ Growth in penetration of plastic exterior parts has significant downside risk: the CO2

rules will penalise carmakers who employ the weight reduction strategy.

Figure 15: EU emissions regulations discourage weight reduction technologies

Daimler

BMWVW

PSARenault-Nissan

FCA

GM

Ford

Toyota

Average

70

80

90

100

110

120

130

140

150

1,100 1,200 1,300 1,400 1,500 1,600 1,700

Target 2015: 130g/km

Target 2020/21: 95g/km

Reducing weight conversely makes it more difficult to reach CO2 targets

Source: EEA, ICCT, circles represent 2013 levels by OEM

Post-2020/21: scope for more favourable regulations?

The European Commission begins to review 2025 regulations this year and is expected to

give an indication of the new proposals before the end of 2016. A switch from a weight-

based index parameter to footprint-based index parameter (i.e., wheelbase area, in m2) is

possible, but not yet proposed.

In such a situation, the case for implementing weight reduction should show better traction,

and should benefit Plastic Omnium's plastic exteriors business. However, poor visibility on

regulatory changes post-2021 means it is difficult to become constructive too early.

25 March 2015


Weight reduction: not widely employed historically

Over the past 10 years, average vehicle weights in Europe have risen rather than fallen.

From 2004-13 (for which EEA data are available), the average weight of all European cars

increased by 3.2%, or 43kg. Diesel cars, which make up 53% of the European parc, rose

5.2% in weight over the same period, as heavier exhaust treatment components were

increasingly used. Petrol cars marginally decreased in weight, by -1.5%.

As we expected, due to the structure of European emissions regulations, weight reduction

has not been used as the primary means of emission reduction. We expect this to

continue to be the case until at least 2021.

Figure 16: Average vehicle weight has not fallen for at

least 10 years Average fleet weight, kg

Figure 17: Over the past 10 years, emissions reductions

have been achieved but not through weight reductions Average fleet CO2 emissions, g/km

Petrol

Diesel

All

1,100

1,200

1,300

1,400

1,500

1,600

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Petrol

Diesel

All

120

130

140

150

160

170

180

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: EEA Source: EEA

Regulations in other regions are similar to Europe

■ China: Phase 4 regulations for 2020 also discriminate by weight, with a steeper slope

than for Europe. This means there is a bigger burden associated with a weight

decrease in China than in Europe. The fleet is divided into 'bins' of a set weight

interval, with each interval assigned its own fuel consumption limits.

■ Brazil/Japan/Korea: The next phase of emissions regulations are all based on weight

as the index parameter, as we see in Europe.

■ US: This is the only main market that uses the footprint-based parameter to set

emissions regulations. Tier 3 regulations for the period 2017-25 divides the fleet into

'bins' but allows for significant flexibility by the OEM to choose how to categorise

vehicles.

25 March 2015


An expensive way to reduce emissions

In terms of cost effectiveness, industry studies show that lightweighting is among the least

cost effective way to achieve emissions reductions. One of the most prominent studies by

the IKA institute (Institut für Kraftfahrzeuge) compiled data for the CO2 benefit and cost per

component.

Figure 18: Cost (€) per percentage point reduction in CO2 Petrol (gasoline) cars

Figure 19: Cost (€) per percentage point reduction in CO2 Diesel cars

106

101

94

48

42

37

15

0 20 40 60 80 100 120

Electrification

Lightweighting

Transmission

Energy management

Powertrain

Aerodynamics

Tyres

129

126

106

78

48

33

15

0 20 40 60 80 100 120 140

Electrification

Transmission

Lightweighting

Powertrain

Energy management

Aerodynamics

Tyres

Source: IKA data, assuming mid-segment cars and excluding

technologies still under research

Source: IKA data, assuming mid-segment cars and excluding

technologies still under research

Based on these data, we find that in petrol (gasoline) cars, lightweighting is 140% more

expensive per percentage point of CO2 saved than powertrain enhancements, and in

diesel cars, lightweighting is 36% more expensive. Although it is not a surprise that the

engine has the most leverage on emissions reduction, the size of the difference is rather

significant and has likely been a determining factor in the reluctance by carmakers to

implement weight savings in the past. Furthermore, the scope of different options in

powertrain enhancements is wider than in weight reduction, which continues to justify

implementations of powertrain technologies rather than plastic exteriors.

Also notable is that aerodynamic optimisation has a good cost/benefit ratio. Plastic

Omnium's exposure to these technologies comes in the form of plastic shutter, flaps and

spoilers, which form part of its Auto Exterior business. We see some structural growth

potential in these components, but are wary of the fact that on aerodynamic qualities

alone, plastic components bear little competitive advantage over steel components.

25 March 2015


Plastic parts—how Plastic Omnium is affected

■ Automotive Exteriors—bumpers (c.30-35% of group sales): The growth potential

for Plastic Omnium is limited in bumpers, in our view, which makes up around two-

thirds of sales in this division. The bumper market offers little upside potential in steel-

for-plastic substitution due to the market share of plastic bumpers being at 96%

already. Structural growth is limited and market share gains are limited by carmakers'

existing capacity to produce their own bumpers.

Verdict: We expect subdued growth development.

■ Automotive Exteriors—tailgates & other (c.10-15% of group sales): A less

penetrated market for plastic than bumpers, as 97% of tailgates are still made of steel.

Also a small portion of sales of aerodynamic exterior parts, which benefits from a low

base effect. Plastic tailgates offer more design flexibility but at a cost disadvantage.

However, there are barriers to adoption due to technological and process hurdles

(outsourcing) for OEMs, as well as regulatory disincentivisation.

Verdict: We see good growth potential from a lower base, better than

that for bumpers, and some risks to downside.

■ Inergy—fuel systems (c.35-40% of group sales): Plastic fuel systems are at fairly

high penetration levels compared to steel fuel tanks (74% plastic), due to their

performance advantages and design flexibility. There is more scope for penetration to

increase in certain regions, however, such as Asia, where plastic still has around only

55-60% penetration (according to LyondellBasell).

Verdict: We see solid growth potential, but the market is becoming

saturated, especially in Europe/NA.

Figure 20: Global bumper market share Figure 21: Global fuel systems market share

In-house, 33%

Plastic Omnium, 10%

Magna, 9%Faurecia, 5%

Motherson, 3%

Flex-N-Gate, 3%

Hyundai Mobis, 3%

JJ Mold, 2%

Rehau, 2%

Hanil E-HWA, 2%

Tongyang, 2%

Others, 22%

Steel, 4%

Steel, 26%

Plastic Omnium, 21%

Kautex, 14%

Yapp-ABC, 10%

TI Automotive, 9%

Yachiyo, 5%

FTS, 3%

Donghee, 2%

Shunrong, 2%

Magneti Marelli, 1%

Others, plastic, 7%

Source: Plastic Omnium data Source: Plastic Omnium data

25 March 2015


The fading case for diesel & SCR Diesel market share may have peaked, efficiency gap disappearing

The justification for diesel cars has historically been better fuel economy and lower fuel

costs, particularly in Europe, where consumers have been encouraged to opt for diesel.

However, the efficiency gap between diesel cars and petrol cars has narrowed to almost

insignificant, and with increasing focus on NOx emissions, we believe there is further

scope for the attractiveness of diesel cars to decline.

One of the primary drivers of diesel sales, the perceived better efficiency versus petrol

cars, has almost disappeared, giving consumers less reason to purchase diesel cars. In

2013 on average, diesel cars were just 1.3% more efficient than petrol cars. We expect

this to translate into the diesel market share declining in the coming years as consumers

adapt to the improved relative efficiency from petrol cars.

Figure 22: The difference in fuel consumption between diesel and petrol cars was just

1.3% in 2013, almost removing the historical efficiency advantage of diesels Fuel consumption (l/100km) lhs; difference rhs

8.1%

6.9%

4.2%3.3% 3.4%

1.6%2.2% 2.2%

1.1% 1.3%

Petrol

Difference

Diesel

0%

2%

4%

6%

8%

10%

12%

14%

16%

18%

20%

5.0

5.5

6.0

6.5

7.0

7.5

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Source: EEA, ICCT

25 March 2015


SCR should gain share, but in a declining diesel market

While the focus of efficiency improvements has been largely on CO2 emissions, NOx

(nitrogen oxides) and particulate matter are often overlooked as serious problems.

However, diesels emit a larger amount of NOx and these have been shown to have

significant harmful effects on health.

Moving forwards, we think NOx emissions will come under more scrutiny. In 2014, average

diesel car emissions in real-world scenarios still contained 12x more NOx than average

petrol cars (excluding trucks), far exceeding the specified Euro 6 emissions limits (which

are set under laboratory conditions).

In our view, the installation rates of SCR should benefit as it can achieve NOx reductions

of up to 90%. However, other technologies like LNT (lean NOx trap) have been shown to

be more cost efficient. While a higher percentage of diesel cars should see SCR

implementations, the overall diesel market looks structurally challenged, in our view.

Figure 23: NOx emission targets and real-world measured emissions for petrol and diesel

cars show NOx is a significant problem for diesels (g/km)

0.20

0.10 0.05 0.05

1.00

0.80 0.80

0.60

0.00

0.20

0.40

0.60

0.80

1.00

1.20

2000 2005 2009 2014

Petrol Diesel

Euro 3: 0.50

Euro 3: 0.15

Euro 4: 0.25

Euro 4: 0.08

Euro 5: 0.18

Euro 5: 0.06 Euro 6: 0.06

Euro 6: 0.08

Source: ICCT, EC

Figure 24: Diesel engines have gained share in Europe

but are reaching a plateau

Figure 25: In the US, diesel has failed to gain widespread

adoption

45%

53%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Petrol Diesel Other

92%

3%

5%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Petrol Diesel Other

Source: EEA Source: WardsAuto

25 March 2015


Restrictions and taxes on diesel cars add further risk

Increasingly, legislation is also being prepared to discourage the use of diesel cars:

■ Paris plans to ban pre-Euro 6 diesel cars from its roads by 2020. The French Prime

Minister also says the government is committed to gradually phasing out diesel cars

(Guardian, December 2014). New Euro 6 cars are currently excluded but we see a risk

that they could be affected in future revisions, particularly post Euro 7, which affects

their attractiveness as a new purchase.

■ France's 2015 state budget includes a €0.02 increase in diesel excise tax. Around

80% of France's car parc is diesel-powered.

■ London plans to introduce a £10 surcharge for pre-Euro 6 diesels to enter the low-

emission-zone from 2020 (BBC, July 2014). London could also introduce a ban

(Telegraph, December 2014).

■ The London Borough of Islington introduced an annual £96 parking surcharge for

diesel vehicles in January 2015.

With regulations seemingly moving in one direction, consumers are faced with the choice

of either owning a petrol car (which is now negligibly less efficient than diesel), or paying a

premium for a diesel car with SCR, while also being more expensive to drive in major

cities (or potentially banned).

SCR downside risk is underestimated

Given the pressures on the diesel market, we think Plastic Omnium is overly optimistic in

estimating SCR growth of 60% CAGR in 2014-18. We think that Plastic Omnium's

assumption of constant global market share of diesel cars until 2018 is optimistic, as well

as the assumption that its market share in SCR will almost double.

Figure 26: Plastic Omnium estimates of SCR market development

Total auto production Diesel share SCR share PO share

2014 85.5m 19% 10% 17%

2018 98.0m 19% 32% 30%


■ We think the share of diesel cars in global production will decline rather than stay

constant. Diesel has little to no traction in passenger car markets outside Europe, and

improved efficiency of petrol engines should weaken demand for diesel cars. Market

share of diesel cars in Europe has declined for two consecutive years.

■ The cost of SCR systems has been estimated at $500-850 per vehicle by a number of

environmental studies, which would make it one of the most expensive emission-

reduction components possible to install in a car.

■ A more cost-effective alternative technology, LNT (lean NOx trap), is likely to be

preferred in many vehicles, especially smaller cars that are more prevalent in Europe.

■ Furthermore, it is unclear to us how Plastic Omnium aims to increase market share in

SCR by almost double in four years.

25 March 2015


The Environment division Figure 27: Worldwide waste container market share Figure 28: Close to peak margins post-restructuring

Plastic Omnium, 30%

ESE, 20%SSI/Schaefer, 17%

MGB, 9%

Craemer, 8%

Weber, 5%

Straight, 3%

Others, 8%

-3.7%

-2.6%-1.7%

-3.5%

-1.5%

1.8%

6.9%

3.2%

2.7%

1.3% 1.5%2.2%

2.6% 2.8%

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%

12%

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

E

20

16

E

20

17

E

20

18

E

Difference Automotive Environment

Source: Company data Source: Company data, Credit Suisse estimates

Drag on margins, little growth

With restructuring complete and having turned into a 7% margin business in 2014, we see

little upside potential remaining for Plastic Omnium's Environment division. It appears to

remain part of the company more for legacy reasons than profitability, as it historically was

the more profitable of the two divisions. The Environment division is nearly 100% Europe

focused and faces little benefit from structural trends, in our view.

However, even historically, margins have struggled to surpass 7%, and with little growth

potential in waste management, we see it as becoming an increasingly negative burden on

group profitability. The margin difference between the two divisions was 130bps in 2014,

but we see this widening to 280bps by 2018E, due to increasing margins in the Automotive

division.

Opportunity to separate, but re-rating value appears limited

The lack of synergies between the two divisions is a further factor that increases the

potential possibility for them to be separated. Having been restructured, we think the

business is nearing an opportune time to be separated from the Automotive business.

While we believe such an action would give a positive long-term uplift to group margins,

the impact would likely be much diluted by the size of the Automotive division, which forms

92% of revenues. We estimate that the group margin benefit would only be 20bps in

2018E, which we think would be a small positive for the stock, but is unlikely to trigger a

meaningful re-rating of the resultant company.

25 March 2015


Shareholding structure Family controlled and likely to remain so

Plastic Omnium is controlled through a majority holding of Burelle SA, the French family

holding company led by CEO Laurent Burelle. The holding company has 57% of capital

and 74% of votes (through double voting shares), leaving a free float worth €1.5bn holding

25% of votes. Burelle SA is 77% owned by the Burelle family, with 17% in free float.

Burelle SA has been a long-time core shareholder in Plastic Omnium since the company's

inception as a listed company in 1965. Plastic Omnium is Burelle SA's only significant

holding, and Burelle SA is the cornerstone of the family business' legacy. We do not

expect any changes to the ownership structure in the near term.

Figure 29: Shareholder structure—capital Figure 30: Shareholder structure—votes

Burelle SA, 56.6%

Employees, 1.3%

Treasury, 4.6%

Free float, 37.5%

Burelle SA, 74.0%

Employees, 1.3%

Treasury, 0.0%

Free float, 24.7%

Source: Company data, as of year-end 2014 Source: Company data, as of year-end 2014

25 March 2015


Credit Suisse forecasts Figure 31: Summary of forecasts by division, based on management accounts

€k unless stated 2012 2013 2014 2015E 2016E 2017E 2018E

Revenues

Automotive 4,342,959 4,655,231 4,882,366 5,481,819 5,901,724 6,293,288 6,551,092

Environment 463,212 469,316 431,725 431,368 431,579 431,879 432,183

Total 4,806,171 5,124,547 5,314,091 5,913,187 6,333,302 6,725,168 6,983,275

Operating profit before amortisation

Automotive 316,258 369,938 401,769 487,102 556,622 606,730 628,325

Environment 18,824 24,700 30,061 31,972 31,147 30,328 29,510

Total 335,082 394,639 431,830 519,074 587,769 637,058 657,834

Operating margin %

Automotive 7.3% 7.9% 8.2% 8.9% 9.4% 9.6% 9.6%

Environment 4.1% 5.3% 7.0% 7.4% 7.2% 7.0% 6.8%

Total 7.0% 7.7% 8.1% 8.8% 9.3% 9.5% 9.4%

Revenue growth %

Automotive 7.2% 4.9% 12.3% 7.7% 6.6% 4.1%

Environment 1.3% -8.0% -0.1% 0.0% 0.1% 0.1%

Total 6.6% 3.7% 11.3% 7.1% 6.2% 3.8%

Operating profit growth %

Automotive 17.0% 8.6% 21.2% 14.3% 9.0% 3.6%

Environment 31.2% 21.7% 6.4% -2.6% -2.6% -2.7%

Total 17.8% 9.4% 20.2% 13.2% 8.4% 3.3%

Source: Company data, Credit Suisse estimates Note: Management accounts consolidate JVs over which Plastic Omnium has meaningful influence

Currency impact—mostly translational

The currency impact is limited mainly to translational effects given the natural hedging.

Production facilities tend to be located near the customers' plants in order to implement

the necessary just-in-time delivery framework. We estimate a +7.1% impact on revenues

from the weaker euro in 2015E, which is affected largely by exposure to North America

and Asia.

Raw materials—pass-through limits impact

Resin and steel are Plastic Omnium's two largest raw material exposures. We estimate

that pass-through on raw material prices is 50% on resin and 75% on steel, which means

the benefit from lower raw material prices should be +60bps in 2015E at an operating

profit level based on a six-month price lag.

25 March 2015


Capex—expect lower capex after the China investment phase

The company is in the process of large capacity expansions in Asia—of the 20 new plants

to be built by 2018, 12 will be in Asia. We expect capex to remain at the current level of

5.7% (JVs unconsolidated; 5.2% JVs consolidated) as plants are installed during the high-

investment phase between 2014 and 2018. By 2018E, capex should have slowed to 5.4%

(JVs unconsolidated; 4.9% JVs consolidated) as facility installations in Asia slow to a

normalised level.

Figure 32: Plastic Omnium new facilities under construction

Start of production Products Customers

China - under construction

Shenyang SOP mid 2014 Fuel systems SGM, BMW

Ningbo SOP end 2014 Fuel systems SGM, Geely

Yantai SOP end 2014 Bumpers SGM

Changshu SOP end 2014 Bumpers CJLR

Wuhan Jiangxia SOP early 2015 Bumpers SGM

Changsha SOP mid 2015 Bumpers SVW, GAC-Fiat

Beijing SOP mid 2015 Front-end modules BBAC

Chongqing SOP mid 2016 Fuel systems BHMC

Europe - under construction

St. Petersburg SOP early 2015 Fuel systems Nissan, Ford, Toyota

Warrington SOP mid 2016 Bumpers JLR

North America - under construction

Chattanooga SOP mid 2015 Bumpers VW

Fairfax SOP end 2015 Fuel systems GM

Mexico SOP 2017 Bumpers


Free cash flow weak relative to other suppliers

As a consequence of lower capex, free cash flow yield should improve to 3.5% in 2018E

from 2.5% in 2014, with conversion rising to 41% from 37%. The concluded Gerland capex

project, which cost €47m in 2014, is not expected to recur in 2015, which is an incremental

positive. However, the free cash flow yield is the weakest within European auto suppliers.

Figure 33: Free cash flow forecasts

2012 2013 2014 2015E 2016E 2017E 2018E

Management accounts

FCF yield % 15.7% 4.8% 2.9% 2.7% 3.4% 3.8% 4.1%

FCF conversion % 96.8% 58.2% 43.7% 41.0% 44.2% 45.8% 48.6%

IFRS accounts

FCF yield % 4.1% 2.5% 2.3% 2.9% 3.2% 3.5%

FCF conversion % 49.9% 37.2% 34.1% 37.0% 38.5% 40.8%


Figure 34: 2016E free cash flow yield %

FCF yield % FCF yield %

Continental 6.4% Leoni 4.2%

Faurecia 6.0% Elringklinger 3.9%

Valeo 5.8% Rheinmetall 3.9%

Hella 5.5% Plastic Omnium 2.9%

Autoliv 4.3%

Source: Credit Suisse estimates

25 March 2015


Headcount—still majority in high-cost countries

Of the workforce (including temporary workers), 28% are located in low-cost countries

such as Asia and South America. This is nearer the low end of the range of its peers'

headcount profiles (using the same basis). We believe there is potential for this ratio to

improve, especially as parts like bumpers do not require the same level of technological

capacity as other suppliers' products like powertrain. This should help to decrease

employee costs although it is concerning that this ratio has failed to improve since 2012.

Figure 35: Plastic Omnium—headcount distribution Figure 36: Plastic Omnium vs. peers

82% 78% 74% 73% 71% 71% 72%

18% 22% 26% 27% 29% 29% 28%

0%

20%

40%

60%

80%

100%

2008 2009 2010 2011 2012 2013 2014


78% 78% 76% 72%62% 60%

42%

22% 22% 24% 28%38% 40%

58%

0%

20%

40%

60%

80%

100%

Fau

reci

a

GK

N

Co

nti

nen

tal

Pla

stic

Om

niu

m

Au

toliv

Val

eo

Leo

ni


Source: Company data Source: Company data

25 March 2015


Valuation and key risks Our valuation is based on two methodologies, equally weighted to capture long-term as

well as short-term earnings potential:

■ 2016E EV/EBITDA: to capture near-term earnings potential, we take our 2016E

EBITDA and, based on historical data and peer group comparison, apply a multiple of

5.0x, which is 17% below the company's average multiple during 2013-14. This model

yields a fair value of €20.5 per share.

■ For all estimates, we refer to the new IFRS accounting format, which deconsolidates

JVs and accounts for their earnings as equity income.

Figure 37: EV/EBITDA Model yields fair value of €20.5 per share

2016E EBITDA €m 726

Multiples 2013-14 (x)

Average 6.1

High 8.0

Low 4.2

Assumed multiple (x) 5.0

vs. Average -17.6%

vs. High -37.5%

vs. Low 18.5%

EV €m 3,629

Equity adjustments €m 464

Equity value €m 3,165

No. shares 154,731

Value per share € 20.5

Source: Credit Suisse estimates

■ The Credit Suisse HOLT tool yields a warranted price per share of €28.6, based on a

4.3% discount rate. However, for our target price, we apply a discount rate of 6.0% to

reflect a higher risk premium. Based on the 6.0% discount rate for the explicit period,

HOLT yields a fair value of €19.5.

■ The 6.0% discount rate is more reflective of the longer-term trend in discount rates,

which are at more normalised levels compared to current financial conditions.

Key potential upside risks:

■ Regulatory change, which incentivises use of lightweight components

■ Re-rating due to potential separation of Environment division from Automotive

■ Demand for diesel cars does not decline

Key potential downside risks:

■ Slowdown in sales of lightweight parts due to lack of regulatory incentive and cost

ineffectiveness

■ Diesel cars lose market share as efficiency of petrol engines continues to improve

■ Pricing pressure in saturated markets for products like bumpers

25 March 2015


Sensitivity to Europe

In our base case European production growth forecasts, we use LMC's forecasts of auto

production in Europe, which are for a 0.7% contraction in France, 0.9% growth in Western

Europe and 3.3% growth in Eastern Europe in 2015.

We analyse the sensitivity of Plastic Omnium's earnings to different scenarios of higher

European growth.

Base case

Figure 38: Base case European production growth forecasts

2015E 2016E 2017E 2018E

France growth -0.7% -3.1% 14.8% 2.3%

Western Europe (ex-France) growth 0.9% 2.7% 4.9% 2.2%

Eastern Europe growth 3.3% 5.7% 4.9% 3.4%

EBIT (€k) 445,642 503,869 545,835 563,717

EBIT margin % 9.0% 9.5% 9.7% 9.7%

EPS, diluted 1.86 2.14 2.32 2.38

Source: Company data, LMC, Credit Suisse estimates

European production 5% higher than expected


2015E 2016E 2017E 2018E

France growth 4.3% 2.9% 19.8% 7.3%



EBIT (€k) 462,145 538,492 601,974 642,853

EBIT margin % 9.2% 9.8% 10.1% 10.1%

EPS, diluted 1.94 2.32 2.60 2.77

EPS impact % 4.3% 8.4% 12.1% 16.4%


European production 10% higher than expected


2015E 2016E 2017E 2018E

France growth 9.3% 6.9% 24.8% 12.3%



EBIT (€k) 478,701 573,350 661,836 731,914

EBIT margin % 9.3% 10.0% 10.4% 10.6%

EPS, diluted 2.03 2.50 2.90 3.21

EPS impact % 9.1% 16.8% 25.0% 34.9%


25 March 2015


Credit Suisse HOLT

Credit Suisse forecasts for 2015-18

The CFROI® chart (Figure 41) reflects our forecasts for sales, margins and returns. Based

on these assumptions, HOLT calculates an average CFROI® of 11.1% for 2015-18. HOLT

incorporates a discount rate of 4.3% for the explicit period of five years. Based on the

explicit forecasts, HOLT calculates asset growth of 9.7% in 2015, which is expected to

decrease to 6.1% by 2018.

HOLT assumptions beyond a five-year window

Beyond the five-year window, HOLT assumes the CFROI and discount rate fade to 6%,

while asset growth fades to 2.5%, incorporating the economic reality of competition and

causing higher returns and growth to regress to mean.

HOLT yields a warranted value of €28.6 per share, with the explicit forecast representing

16% of the total EV and the terminal forecast accounting for 84%.

25 March 2015


Figure 41: HOLT valuation—warranted price €28.6

Current Price: EUR 26.92 Warranted Price: EUR 28.60 Valuation date: 23-Mar-15

Sales Growth (parallel % point change to forecasts) Dec 13A Dec 14A Dec 15E Dec 16E Dec 17E

EUR -2.0% -1.0% 0.0% 1.0% 2.0% Sales Growth, % 6.6 -13.4 11.3 7.1 6.2

EBITDA Mgn, % 11.0 12.9 13.4 13.7 13.7

Asset Turns, x 1.21 1.1 1.1 1.1 1.1

CFROI®, % 10.0 11.8 12.0 11.7 10.8

Disc Rate, % 5.5 4.9 4.3 4.3 4.3

Asset Grth, % 7.9 -7.2 9.7 8.7 7.4

Value/Cost, x 1.5 1.7 1.8 1.7 1.6

Economic PE, x 15.3 14.7 15.3 14.5 14.4

Leverage, % 35.5 26.7 24.8 25.1 25.2

More than

10%

downside

Within 10%More than

10% upside

Source: Credit Suisse HOLT®. CFROI and HOLTare trademarks or registered trademarks of Credit Suisse Group AG or its affiliates in the United States and other countries .

59%

1.0% 3% 12% 21% 31% 43%

2.0% 16% 26% 36% 47%

0% 9%

0.0% -10% -2% 6% 16%

HO

LT

-

C

red

it S

uis

se A

naly

st

Scen

ari

o D

ata

PLASTIC OMNIUM (PLOF)

EB

ITD

A M

arg

in (

para

llel

% p

oin

t ch

an

ge

to f

ore

casts

)

-2.0% -37% -30% -24% -16%

26%

-8%

-1.0% -23% -16% -9%

-20

-10

0

10

20

30

40

2010 2012 2014 2016 2018

Sales Growth (%)

0

2

4

6

8

10

12

14

16

2010 2012 2014 2016 2018

EBITDA Margin

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2010 2012 2014 2016 2018

Asset Turns (x)

0

2

4

6

8

10

12

14

2010 2012 2014 2016 2018Historical CFROI Historical Transaction CFROIForecast CFROI Forecast CFROICFROI Discount Rate

CFROI & Discount Rate (in %)

-10

-5

0

5

10

15

20

25

30

2010 2012 2014 2016 2018

Historical Asset Growth Rate Forecast GrowthForecast Growth RAGRNormalised Growth Rate

Asset Growth (in %)

Copy Template Page

Source: Company data, Credit Suisse HOLT, Credit Suisse estimates

For our target price, we apply a discount rate of 6.0% to reflect a higher risk premium and,

based on the 6.0% discount rate for the explicit period, HOLT yields a fair value of €19.5.

25 March 2015


Valuation ratios

Figure 42: Valuation ratios and metrics, based on management reporting

2012 2013 2014 2015E 2016E 2017E 2018E

EV/sales 0.33 0.55 0.72 0.78 0.72 0.67 0.63

EV/EBITDA 2.98 4.68 5.86 6.03 5.45 5.07 4.81

EV/EBIT 4.72 7.15 8.88 8.85 7.73 7.05 6.73

P/E 5.81 11.90 14.88 14.64 12.76 11.78 11.49

P/B 1.31 2.53 3.07 3.12 2.59 2.20 1.91

RoCE %, CS def. 21.2% 19.9% 19.8% 21.5% 21.9% 21.4% 20.2%

FCF yield % 15.7% 4.8% 2.9% 2.7% 3.4% 3.8% 4.1%

FCF conversion % 96.8% 58.2% 43.7% 41.0% 44.2% 45.8% 48.6%

Dividend yield % 3.6% 2.2% 1.7% 1.7% 2.0% 2.1% 2.2%

Net debt/EBITDA 0.73 0.59 0.50 0.36 0.24 0.14 0.04

Net debt/equity 0.48 0.38 0.30 0.20 0.12 0.06 0.01


Figure 43: Valuation ratios and metrics, based on IFRS reporting

2013 2014 2015E 2016E 2017E 2018E

EV/sales 0.66 0.87 0.94 0.87 0.81 0.77

EV/EBITDA 5.37 6.77 6.97 6.31 5.88 5.58

EV/EBIT 8.43 10.42 10.39 9.09 8.29 7.92

P/E 11.90 14.61 14.48 12.55 11.60 11.31

P/B 2.66 3.14 3.25 2.74 2.35 2.06

RoCE %, CS def. 17.5% 17.3% 18.9% 19.4% 19.2% 18.2%

FCF yield % 4.1% 2.5% 2.3% 2.9% 3.2% 3.5%

FCF conversion % 49.9% 37.2% 34.1% 37.0% 38.5% 40.8%

Dividend yield % 2.2% 1.7% 1.7% 2.0% 2.1% 2.2%

Net debt/EBITDA 0.78 0.69 0.53 0.41 0.31 0.22

Net debt/equity 0.47 0.37 0.27 0.20 0.14 0.09


25 March 2015


Financial statements—management accounts

Figure 44: Income statement—management accounts


Revenue 4,806,171 5,124,547 5,314,091 5,913,187 6,333,302 6,725,168 6,983,275

Cost of goods and services sold -4,118,652 -4,343,890 -4,477,869 -4,944,711 -5,264,203 -5,576,997 -5,794,712

Gross profit 687,519 780,657 836,222 968,476 1,069,100 1,148,171 1,188,563

Gross margin % 14.3% 15.2% 15.7% 16.4% 16.9% 17.1% 17.0%

Net research and development costs -97,514 -120,683 -118,764 -130,090 -139,333 -147,954 -153,632

Selling costs -60,771 -61,385 -64,548 -70,958 -76,000 -80,702 -83,799

Administrative expense -194,152 -203,950 -221,080 -248,354 -265,999 -282,457 -293,298

Operating margin before amortisation 335,082 394,639 431,830 519,074 587,769 637,058 657,834

Operating margin % (before amort.) 7.0% 7.7% 8.1% 8.8% 9.3% 9.5% 9.4%

Amortisation of purchased intangibles -18,122 -18,698 -18,297 -23,653 -25,333 -26,901 -27,933

Operating margin after amortisation 316,960 375,941 413,533 495,421 562,435 610,157 629,901

Operating margin % (after amort.) 6.6% 7.3% 7.8% 8.4% 8.9% 9.1% 9.0%

Other operating income 15,165 802 4,044 0 0 0 0

Other operating expense -43,358 -42,749 -47,496 -43,877 -45,059 -48,058 -50,426

Finance costs -34,562 -48,087 -49,323 -48,580 -48,643 -48,701 -48,641

Other financial income and expense, net -10,632 -9,563 -12,900 -12,837 -13,672 -15,093 -15,313

Share of profit/(loss) of associates 243 882 3,475 4,518 5,873 7,635 9,925

Profit before tax, after associates 243,816 277,226 311,333 394,644 460,934 505,940 525,445

Pretax margin % 5.1% 5.4% 5.9% 6.7% 7.3% 7.5% 7.5%

Income tax -62,313 -69,222 -73,928 -98,661 -119,843 -136,604 -147,125

Tax rate % 25.6% 25.0% 23.7% 25.0% 26.0% 27.0% 28.0%

Net income 181,503 208,004 237,405 295,983 341,091 369,336 378,321

Net profit, to non-controlling interest 8,121 14,793 17,040 18,863 23,324 25,015 25,262

Net profit, to owners of Parent 173,382 193,211 220,365 277,119 317,767 344,322 353,059

Avg no. shares, outstanding (k) 154,977 154,977 154,731 154,731 154,731 154,731 154,731

Avg no. shares, basic (k) 142,819 146,557 147,573 147,573 147,573 147,573 147,573

Avg no. shares, diluted (k) 145,822 150,990 150,666 150,666 150,666 150,666 150,666

EPS, basic 1.21 1.32 1.49 1.88 2.15 2.33 2.39

EPS, diluted 1.19 1.28 1.46 1.84 2.11 2.29 2.34

DPS 0.25 0.33 0.37 0.46 0.53 0.57 0.59

Payout ratio % 21.0% 25.8% 25.3% 25.0% 25.0% 25.0% 25.0%


25 March 2015


Figure 45: Balance sheet—management accounts


Goodwill 335,525 334,442 309,156 309,156 309,156 309,156 309,156

Intangible assets 350,245 342,604 358,667 376,407 394,351 413,406 433,192

PPE 897,126 961,782 1,092,045 1,245,788 1,418,295 1,601,709 1,780,946

Investment property 15,200 42,053 88,825 88,825 88,825 88,825 88,825

Investments in associates 6,282 7,676 10,985 10,985 10,985 10,985 10,985

Available-for-sale financial assets 2,734 1,803 1,841 1,841 1,841 1,841 1,841

Other non-current financial assets 60,518 58,750 45,512 45,512 45,512 45,512 45,512

Deferred tax assets 74,871 71,723 84,529 84,529 84,529 84,529 84,529

Total non-current assets 1,742,501 1,820,833 1,991,560 2,163,042 2,353,494 2,555,962 2,754,986

Inventories 271,791 282,136 331,860 366,458 390,136 413,318 429,453

Finance receivables 40,036 36,496 31,213 31,213 31,213 31,213 31,213

Trade accounts receivable 561,975 590,979 612,451 681,497 729,915 775,078 804,825

Other receivables 204,008 216,167 279,645 279,645 279,645 279,645 279,645

Other current financial receivables 1,777 2,856 7,117 7,117 7,117 7,117 7,117

Hedging instruments 314 1,192 374 374 374 374 374

Cash & equivalents 328,089 549,120 604,825 663,910 736,329 816,169 903,341

Total current assets 1,407,990 1,678,946 1,867,485 2,030,214 2,174,730 2,322,914 2,455,968

Assets held for sale 1,210 0 0 0 0 0 0

Total Assets 3,151,701 3,499,779 3,859,045 4,193,257 4,528,224 4,878,876 5,210,954

Non-current borrowings 605,086 901,919 901,680 901,680 901,680 901,680 901,680

Provisions for pensions 80,352 66,506 95,472 95,472 95,472 95,472 95,472

Non-current provisions 12,218 17,668 24,748 24,748 24,748 24,748 24,748

Non-current government grants 13,195 11,883 11,287 11,787 12,287 12,787 13,287

Deferred tax liabilities 55,915 54,177 47,998 47,998 47,998 47,998 47,998

Total non-current liabilities 766,766 1,052,153 1,081,185 1,081,685 1,082,185 1,082,685 1,083,185

Bank overdrafts 6,864 6,216 4,148 4,148 4,148 4,148 4,148

Current borrowings 186,952 86,860 97,522 97,522 97,522 97,522 97,522

Current debt 3,382 163 17 17 17 17 17

Hedging instruments 20,420 9,980 16,658 16,658 16,658 16,658 16,658

Current provisions 52,990 46,354 51,108 51,108 51,108 51,108 51,108

Current government grants 276 263 273 273 273 273 273

Trade payables 792,860 865,099 916,101 1,011,609 1,076,972 1,140,965 1,185,506

Other operating liabilities 504,185 500,428 593,108 593,108 593,108 593,108 593,108

Total current liabilities 1,567,929 1,515,363 1,678,935 1,774,443 1,839,806 1,903,799 1,948,340

Common stock 8,782 9,299 9,215 9,215 9,215 9,215 9,215

Treasury stock -28,556 -44,348 -33,948 -33,948 -33,948 -33,948 -33,948

Additional paid-in capital 65,913 65,913 38,637 38,637 38,637 38,637 38,637

Retained earnings and revaluation reserve 555,615 668,270 823,515 1,042,855 1,288,635 1,549,780 1,811,555

Profit for the period 173,382 193,211 220,365 220,365 220,365 220,365 220,365

Equity, to owners of Parent 775,136 892,345 1,057,784 1,277,124 1,522,904 1,784,049 2,045,824

Equity, to non-controlling interest 41,870 39,918 41,141 60,004 83,328 108,343 133,605

Total equity 817,006 932,263 1,098,925 1,337,128 1,606,232 1,892,392 2,179,428

Liabilities related to assets held-for-sale 0 0 0 0 0 0 0

Total equity and liabilities 3,151,701 3,499,779 3,859,045 4,193,257 4,528,224 4,878,876 5,210,954

Group net debt (cash) 389,822 355,200 329,612 271,899 199,480 119,640 32,468

Group equity & quasi-equity 830,201 944,146 1,110,212 1,348,915 1,618,519 1,905,179 2,192,715

Group net debt/equity (gearing) 0.47 0.38 0.30 0.20 0.12 0.06 0.01

EBITDA - CS definition 530,922 602,343 654,476 761,514 834,315 885,176 919,707

Net debt/EBITDA 0.73 0.59 0.50 0.36 0.24 0.14 0.04


25 March 2015


Figure 46: Cashflow statement—management accounts


Net income 181,503 208,004 237,405 295,983 341,091 369,336 378,321

Dividends from associates 0 0 1,195 1,355 1,762 2,290 2,977

Share of profit/(loss) of associates -243 -882 -3,475 -4,518 -5,873 -7,635 -9,925

Stock option plan expense 1,220 2,060 2,354 0 0 0 0

Other adjustments -7,175 1,008 10,420 0 0 0 0

Depreciation & impairment of fixed assets 122,009 126,047 139,967 153,743 156,825 152,845 162,943

Depreciation & impairment of intangible assets 73,831 81,657 82,679 88,698 89,722 95,273 98,930

Impairment of goodwill 10,000 0 0 0 0 0 0

Net negative goodwill -8,996 0 0 0 0 0 0

Changes in provisions -28,986 2,707 12,339 0 0 0 0

Net (gains)/losses on disposal of non-current assets 38,223 4,458 5,422 0 0 0 0

Proceeds from operating grants recognised in P/L -1,626 -2,232 -1,392 0 0 0 0

Current and deferred taxes 62,313 69,222 73,928 98,661 119,843 136,604 147,125

Interest expense 32,031 45,026 46,482 48,580 48,643 48,701 48,641

Non-cash items 292,601 329,071 368,724 385,165 409,159 425,788 447,714

Net operating cash before financial expense and cash tax 474,104 537,075 607,324 682,503 752,012 797,415 829,012

Change in working capital 61,957 28,309 -21,123 -8,136 -6,733 -4,351 -1,341

Taxes paid -75,673 -76,731 -94,292 -98,661 -119,843 -136,604 -147,125

Net financial interest paid -31,381 -38,209 -45,612 -48,580 -48,643 -48,701 -48,641

Net cash from operating activities 429,007 450,444 446,297 527,125 576,793 607,759 631,905

Acquisition of PPE -213,994 -259,654 -277,526 -307,486 -329,332 -336,258 -342,180

Acquisition of intangible assets -95,580 -84,303 -97,781 -106,437 -107,666 -114,328 -118,716

Proceeds from disposal of PPE 21,311 9,044 9,073 0 0 0 0

Proceeds from disposal of intangible assets 1,068 2,059 3,559 0 0 0 0

Net change in advances to suppliers of fixed assets 25,801 -6,219 12,005 0 0 0 0

Government grants received 167 1,099 643 500 500 500 500

Net cash from operational investing activities -261,227 -337,974 -350,027 -413,423 -436,498 -450,086 -460,396

Free cash flow 167,780 112,470 96,270 113,702 140,295 157,672 171,509

Acquisition of shares, takeovers & related investments -26,396 -490 -208 0 0 0 0

Acquisition of available-for-sale financial assets -133 0 0 0 0 0 0

Proceeds from disposals of shares in subsidiaries 20,608 86 16,610 0 0 0 0

Impact of change in scope of consolidation - entering

companies

4,701 38 0 0 0 0 0

Impact of change in scope of consolidation - leaving companies 0 -6 -3,786 0 0 0 0

Net cash from financial investing activities -1,220 -372 12,616 0 0 0 0

Net cash from investing activities -262,447 -338,346 -337,411 -413,423 -436,498 -450,086 -460,396

Purchases / sales of treasury shares 941 -15,159 -13,922 0 0 0 0

Dividends paid to Burelle SA -19,992 -22,072 -28,684 -32,404 -40,271 -46,177 -50,036

Dividends paid to other shareholders -18,527 -20,324 -29,333 -22,213 -27,606 -31,655 -34,300

Acquisition of non-controlling interest -35,571 -16,689 0 0 0 0 0

Proceeds from disposal of non-controlling interest 2,880 0 0 0 0 0 0

Increase in financial debt 474,225 548,118 76,732 0 0 0 0

Repayment of borrowings -406,287 -349,042 -63,750 0 0 0 0

Cash flow from financing activities -2,331 124,832 -58,957 -54,617 -67,876 -77,833 -84,337

Effect of exchange rates -3,205 -15,251 7,844 0 0 0 0

Net change in cash & equivalents 161,024 221,679 57,773 59,085 72,419 79,840 87,172

Net cash & equivalents at start 160,201 321,225 542,904 600,677 659,762 732,181 812,021

Net cash & equivalents at end 321,225 542,904 600,677 659,762 732,181 812,021 899,193


25 March 2015


Financial statements—IFRS

Figure 47: Income statement—IFRS

€k unless stated 2013 2014 2015E 2016E 2017E 2018E

Revenue 4,335,151 4,437,205 4,937,443 5,288,235 5,615,438 5,830,955

Cost of goods and services sold -3,648,604 -3,705,041 -4,090,313 -4,354,761 -4,613,207 -4,793,432

Gross profit 686,547 732,164 847,130 933,474 1,002,231 1,037,523

Gross margin % 15.8% 16.5% 17.2% 17.7% 17.8% 17.8%

Net research and development costs -107,664 -104,035 -113,841 -121,858 -129,435 -134,384

Selling costs -54,553 -57,297 -62,711 -67,257 -71,372 -74,135

Administrative expense -185,763 -199,276 -224,936 -240,489 -255,588 -265,287

Operating margin before amortisation 338,567 371,556 445,642 503,869 545,835 563,717

Operating margin % (before amort.) 7.8% 8.4% 9.0% 9.5% 9.7% 9.7%

Amortisation of purchased intangibles -18,698 -18,297 -23,653 -25,333 -26,901 -27,933

Operating margin after amortisation 319,869 353,259 421,989 478,536 518,935 535,784

Operating margin % (after amort.) 7.4% 8.0% 8.5% 9.0% 9.2% 9.2%

Other operating income 773 3,373 -410 -610 -560 -626

Other operating expense -38,566 -38,010 -35,873 -35,193 -38,245 -39,902

Finance costs -49,001 -51,244 -50,241 -50,663 -50,722 -50,802

Other financial income and expense, net -9,817 -13,050 -13,074 -13,890 -15,342 -15,563

Share of profit/(loss) of associates 31,173 39,321 43,246 47,940 52,004 56,149

Profit before tax, after associates 254,431 293,649 365,638 426,121 466,070 485,039

Pretax margin % 5.9% 6.6% 7.4% 8.1% 8.3% 8.3%

Income tax -56,918 -64,168 -82,708 -100,696 -114,675 -124,901

Tax rate % 22.4% 21.9% 22.6% 23.6% 24.6% 25.8%

Net income 197,513 229,481 282,930 325,425 351,395 360,138

Net profit, to non-controlling interest 4,302 4,929 2,843 2,314 1,881 1,379

Net profit, to owners of Parent 193,211 224,552 280,087 323,111 349,514 358,759

Avg no. shares, outstanding (k) 154,977 154,731 154,731 154,731 154,731 154,731

Avg no. shares, basic (k) 146,557 147,573 147,573 147,573 147,573 147,573

Avg no. shares, diluted (k) 150,990 150,666 150,666 150,666 150,666 150,666

EPS, basic 1.32 1.52 1.90 2.19 2.37 2.43

EPS, diluted 1.28 1.49 1.86 2.14 2.32 2.38

Source: Company data, Credit Suisse estimates

25 March 2015


Figure 48: Balance sheet—IFRS


Goodwill 281,521 284,570 284,570 284,570 284,570 284,570

Intangible assets 330,271 351,718 368,795 386,069 404,412 423,459

PPE 891,142 1,008,470 1,155,212 1,319,234 1,493,067 1,663,488

Investment property 42,053 88,825 88,825 88,825 88,825 88,825

Investments in associates 136,607 144,793 144,793 144,793 144,793 144,793

Available-for-sale financial assets 1,803 1,841 1,841 1,841 1,841 1,841

Other non-current financial assets 58,490 45,147 45,147 45,147 45,147 45,147

Deferred tax assets 66,975 78,067 78,067 78,067 78,067 78,067

Total non-current assets 1,808,862 2,003,431 2,167,250 2,348,546 2,540,722 2,730,190

Inventories 262,950 313,476 346,158 368,524 390,421 405,662

Finance receivables 36,496 31,213 31,213 31,213 31,213 31,213

Trade accounts receivable 495,705 501,602 558,151 597,806 634,795 659,158

Other receivables 154,148 194,281 194,281 194,281 194,281 194,281

Other current financial receivables 3,678 8,104 8,104 8,104 8,104 8,104

Hedging instruments 1,192 374 374 374 374 374

Cash & equivalents 489,042 535,412 576,281 627,851 684,633 746,848

Total current assets 1,443,211 1,584,462 1,714,561 1,828,153 1,943,821 2,045,640

Assets held for sale 0 0 0 0 0 0

Total Assets 3,252,073 3,587,893 3,881,811 4,176,699 4,484,543 4,775,831

Non-current borrowings 901,087 901,649 901,649 901,649 901,649 901,649

Provisions for pensions 65,347 93,165 93,165 93,165 93,165 93,165

Non-current provisions 13,170 24,451 24,451 24,451 24,451 24,451

Non-current government grants 11,883 11,287 11,787 12,287 12,787 13,287

Deferred tax liabilities 52,768 47,778 47,778 47,778 47,778 47,778

Total non-current liabilities 1,044,255 1,078,330 1,078,830 1,079,330 1,079,830 1,080,330

Bank overdrafts 6,212 4,148 4,148 4,148 4,148 4,148

Current borrowings 82,384 88,688 88,688 88,688 88,688 88,688

Current debt 303 17 17 17 17 17

Hedging instruments 9,980 16,658 16,658 16,658 16,658 16,658

Current provisions 43,957 49,395 49,395 49,395 49,395 49,395

Current government grants 263 273 273 273 273 273

Trade payables 782,596 803,993 887,814 945,178 1,001,339 1,040,430

Other operating liabilities 396,195 474,403 474,403 474,403 474,403 474,403

Total current liabilities 1,321,890 1,437,575 1,521,396 1,578,760 1,634,921 1,674,012

Common stock 9,299 9,215 9,215 9,215 9,215 9,215

Treasury stock -44,348 -33,948 -33,948 -33,948 -33,948 -33,948

Additional paid-in capital 65,913 38,637 38,637 38,637 38,637 38,637

Retained earnings and revaluation reserve 646,283 815,782 1,022,537 1,257,245 1,506,548 1,756,866

Profit for the period 193,211 224,553 224,553 224,553 224,553 224,553

Equity, to owners of Parent 870,358 1,054,239 1,260,994 1,495,702 1,745,005 1,995,323

Equity, to non-controlling interest 15,570 17,749 20,592 22,907 24,787 26,166

Total equity 885,928 1,071,988 1,281,586 1,518,609 1,769,792 2,021,489

Liabilities related to assets held-for-sale 0 0 0 0 0 0

Total equity and liabilities 3,252,073 3,587,893 3,881,811 4,176,699 4,484,543 4,775,831

Group net debt (cash) 412,592 392,282 350,041 298,471 241,689 179,474

Group equity & quasi-equity 897,811 1,083,275 1,293,373 1,530,896 1,782,579 2,034,776

Group net debt/equity (gearing) 0.46 0.36 0.27 0.19 0.14 0.09

EBITDA - CS definition 530,954 572,037 663,852 725,741 769,475 799,639

Net debt/EBITDA 0.78 0.69 0.53 0.41 0.31 0.22


25 March 2015


Figure 49: Cashflow statement—IFRS


Net income 197,513 229,481 282,930 325,425 351,395 360,138

Dividends from associates 17,302 22,685 24,531 27,415 29,625 32,045

Share of profit/(loss) of associates -31,173 -39,321 -43,246 -47,940 -52,004 -56,149

Stock option plan expense 2,060 2,354 0 0 0 0

Other adjustments 1,006 10,420 0 0 0 0

Depreciation & impairment of fixed assets 114,338 122,343 134,384 137,078 133,599 142,426

Depreciation & impairment of intangible assets 78,049 78,138 83,826 84,794 90,040 93,496

Impairment of goodwill 0 0 0 0 0 0

Net negative goodwill 0 0 0 0 0 0

Changes in provisions -1,597 16,411 0 0 0 0

Net (gains)/losses on disposal of non-current assets 4,251 1,058 0 0 0 0

Proceeds from operating grants recognised in P/L -2,232 -1,392 0 0 0 0

Current and deferred taxes 56,918 64,168 82,708 100,696 114,675 124,901

Interest expense 45,956 48,410 50,241 50,663 50,722 50,802

Non-cash items 267,576 302,589 307,913 325,290 337,033 355,477

Net operating cash before financial expense and cash tax 482,391 554,755 615,374 678,130 718,052 747,660

Change in working capital 24,646 -16,969 -5,410 -4,657 -2,724 -514

Taxes paid -63,445 -80,990 -82,708 -100,696 -114,675 -124,901

Net financial interest paid -39,140 -47,540 -50,241 -50,663 -50,722 -50,802

Net cash from operating activities 404,452 409,256 477,015 522,114 549,931 571,442

Acquisition of PPE -235,610 -253,735 -281,126 -301,100 -307,433 -312,847

Acquisition of intangible assets -78,110 -92,697 -100,903 -102,068 -108,384 -112,543

Proceeds from disposal of PPE 8,678 8,519 0 0 0 0

Proceeds from disposal of intangible assets 2,059 3,559 0 0 0 0

Net change in advances to suppliers of fixed assets -6,191 7,905 0 0 0 0

Government grants received 1,098 643 500 500 500 500

Net cash from operational investing activities -308,076 -325,806 -381,530 -402,668 -415,316 -424,890

Free cash flow 96,376 83,450 95,486 119,446 134,615 146,552

Acquisition of shares, takeovers & related investments 87 -207 0 0 0 0

Acquisition of available-for-sale financial assets 0 0 0 0 0 0

Proceeds from disposals of shares in subsidiaries 86 16,610 0 0 0 0

Impact of change in scope of consolidation - entering

companies

38 0 0 0 0 0

Impact of change in scope of consolidation - leaving companies -6 0 0 0 0 0

Net cash from financial investing activities 205 16,403 0 0 0 0

Net cash from investing activities -307,871 -309,403 -381,530 -402,668 -415,316 -424,890

Purchases / sales of treasury shares -15,159 -13,922 0 0 0 0

Dividends paid to Burelle SA -22,020 -28,684 -32,404 -40,271 -46,177 -50,036

Dividends paid to other shareholders -15,368 -22,015 -22,213 -27,606 -31,655 -34,300

Acquisition of non-controlling interest -16,689 0 0 0 0 0

Proceeds from disposal of non-controlling interest 0 0 0 0 0 0

Increase in financial debt 549,083 68,394 0 0 0 0

Repayment of borrowings -348,956 -60,311 0 0 0 0

Cash flow from financing activities 130,891 -56,538 -54,617 -67,876 -77,833 -84,337

Effect of exchange rates -13,057 5,119 0 0 0 0

Net change in cash & equivalents 214,415 48,434 40,869 51,570 56,782 62,215

Net cash & equivalents at start 268,415 482,830 531,264 572,133 623,703 680,485

Net cash & equivalents at end 482,830 531,264 572,133 623,703 680,485 742,700


25 March 2015


Credit Suisse PEERs map

PEERs is a global database that captures unique information about companies within the

Credit Suisse coverage universe based on their relationships with other companies – their

customers, suppliers and competitors. The database is built from our research analysts’

insight regarding these relationships. Credit Suisse covers over 3,000 companies globally.

These companies form the core of the PEERs database, but it also includes relationships

on stocks that are not under coverage.

Figure 50: Plastic Omnium—PEERs relationships

Source: Credit Suisse PEERs

25 March 2015


Companies Mentioned (Price as of 20-Mar-2015)

Aisin Seiki (7259.T, ¥4,465) American Axle & Manufacturing Holdings Inc. (AXL.N, $25.86) Autoliv (ALV.N, $115.27) BMW (BMWG.DE, €116.75) BorgWarner, Inc. (BWA.N, $60.46) Calsonic Kansei (7248.T, ¥800) Continental (CONG.DE, €226.0) DELPHI Automotive PLC (DLPH.N, $79.96) Daimler (DAIGn.DE, €91.51) Denso (6902.T, ¥5,718) Elringklinger (ZILGn.DE, €29.24) Exedy (7278.T, ¥2,805) FCA (FCHA.MI, €15.2) Faurecia (EPED.PA, €41.7) Ford Motor Company (F.N, $16.48) GKN (GKN.L, 375.6p) General Motors Corp. (GM.N, $38.87) Hella (HLE.DE, €47.5) Hyundai Motor (005380.KS, W181,000) Keihin (7251.T, ¥1,967)

Lear Corp (LEA.N, $111.97) Leoni (LEOGn.DE, €59.37) LyondellBasell Industries (LYB.N, $85.53) Magna International (MGA.N, $106.2) Musashi Seimitsu Industry (7220.T, ¥2,603) NGK Spark Plug (5334.T, ¥3,360) Nissan Motor (7201.T, ¥1,271) PSA Peugeot Citroen (PEUP.PA, €15.79) Plastic Omnium (PLOF.PA, €26.92, UNDERPERFORM, TP €20.0) Renault (RENA.PA, €83.88) Rheinmetall (RHMG.DE, €46.74) TRW Automotive Holdings Corp. (TRW.N, $104.85) Takata Corporation (7312.T, ¥1,330) Tokai Rika (6995.T, ¥2,756) Toyoda Gosei (7282.T, ¥2,782) Toyota Boshoku (3116.T, ¥1,514) Toyota Industries (6201.T, ¥6,880) Toyota Motor (7203.T, ¥8,598) Valeo (VLOF.PA, €138.6) Volkswagen (VOWG_p.DE, €250.05)

Disclosure Appendix

Important Global Disclosures

The analysts identified in this report each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

As of December 10, 2012 Analysts’ stock rating are defined as follows:

Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months.

Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.

Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.

*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiv eness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respec tively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return relative to the average total return of the relevant country or regional benchmark.

Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation:

Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.

Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.

Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.

*An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

25 March 2015


Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution

Rating Versus universe (%) Of which banking clients (%)

Outperform/Buy* 44% (53% banking clients)

Neutral/Hold* 38% (49% banking clients)

Underperform/Sell* 15% (44% banking clients)

Restricted 3%

*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, an d Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis . (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein.

Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research-and-analytics/disclaimer/managing_conflicts_disclaimer.html

Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

Price Target: (12 months) for Plastic Omnium (PLOF.PA)

Method: To reach our target price, we use a weighted average of 5.0x 2016E EV/EBITDA and the Credit Suisse HOLT framework. The EV/EBITDA valuation captures short-term earnings valuation, and the HOLT model captures longer-term earnings potential.

Risk: Price upside risks: Regulatory change which incentivises use of lightweight components; Re-rating due to separation of Environment division from Automotive; Demand for diesel cars does not decline. Price downside risks: Slowdown in sales of lightweight parts due to lack of regulatory incentive and cost-ineffectiveness; Diesel cars lose market share as efficiency of petrol engines continues to improve; Pricing pressure in saturated markets for products like bumpers.

Please refer to the firm's disclosure website at https://rave.credit-suisse.com/disclosures for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names

The subject company (CONG.DE, EPED.PA, LYB.N, AXL.N, DLPH.N, MGA.N, TRW.N, VOWG_p.DE, BMWG.DE, FCHA.MI, GM.N, F.N) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse.

Credit Suisse provided investment banking services to the subject company (LYB.N, AXL.N, VOWG_p.DE, BMWG.DE, FCHA.MI, GM.N, F.N) within the past 12 months.

Credit Suisse provided non-investment banking services to the subject company (CONG.DE, DLPH.N, MGA.N, GM.N, F.N) within the past 12 months

Credit Suisse has managed or co-managed a public offering of securities for the subject company (LYB.N, AXL.N, VOWG_p.DE, BMWG.DE, FCHA.MI, GM.N, F.N) within the past 12 months.

Credit Suisse has received investment banking related compensation from the subject company (LYB.N, AXL.N, VOWG_p.DE, BMWG.DE, FCHA.MI, GM.N, F.N) within the past 12 months

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (EPED.PA, GKN.L, LYB.N, AXL.N, BWA.N, MGA.N, TRW.N, 7259.T, 6902.T, 7312.T, 6201.T, VOWG_p.DE, BMWG.DE, FCHA.MI, 7203.T, 7201.T, GM.N, F.N) within the next 3 months.

Credit Suisse has received compensation for products and services other than investment banking services from the subject company (CONG.DE, DLPH.N, MGA.N, GM.N, F.N) within the past 12 months

As of the date of this report, Credit Suisse makes a market in the following subject companies (7203.T, 7201.T).

As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (GKN.L, LEOGn.DE, RHMG.DE, VLOF.PA).

For other important disclosures concerning companies featured in this report, including price charts, please visit the website at https://rave.credit-suisse.com/disclosures or call +1 (877) 291-2683.

Important Regional Disclosures

Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.

25 March 2015


The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (PLOF.PA, ALV.N, CONG.DE, ZILGn.DE, EPED.PA, GKN.L, LYB.N, HLE.DE, LEOGn.DE, RHMG.DE, VLOF.PA, AXL.N, BWA.N, DLPH.N, LEA.N, MGA.N, TRW.N, 7259.T, 7248.T, 6902.T, 7278.T, 7251.T, 7220.T, 5334.T, 7312.T, 6995.T, 7282.T, 3116.T, 6201.T, VOWG_p.DE, DAIGn.DE, BMWG.DE, PEUP.PA, RENA.PA, FCHA.MI, 7203.T, 7201.T, GM.N, F.N) within the past 12 months

Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares.

Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report.

For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml.

The following disclosed European company/ies have estimates that comply with IFRS: (ALV.N, CONG.DE, GKN.L, VLOF.PA, VOWG_p.DE, DAIGn.DE, BMWG.DE, PEUP.PA, RENA.PA, FCHA.MI, 7201.T, F.N).

Credit Suisse has acted as lead manager or syndicate member in a public offering of securities for the subject company (CONG.DE, EPED.PA, LYB.N, AXL.N, DLPH.N, VOWG_p.DE, BMWG.DE, PEUP.PA, FCHA.MI, 7203.T, GM.N, F.N) within the past 3 years.

As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.

Principal is not guaranteed in the case of equities because equity prices are variable.

Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.

To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Credit Suisse Securities (Europe) Limited ................................................................................................Fei Teng ; Alexander Haissl ; Mike Dean

Important Credit Suisse HOLT Disclosures

With respect to the analysis in this report based on the Credit Suisse HOLT methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the Credit Suisse HOLT methodology and (2) no part of the Firm’s compensation was, is, or will be directly related to the specific views disclosed in this report.

The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently applied to all the companies included in its database. Third-party data (including consensus earnings estimates) are systematically translated into a number of default algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. The adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur.

Additional information about the Credit Suisse HOLT methodology is available on request.

The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variable may also be adjusted to produce alternative warranted prices, any of which could occur.

CFROI®, HOLT, HOLTfolio, ValueSearch, AggreGator, Signal Flag and “Powered by HOLT” are trademarks or service marks or registered trademarks or registered service marks of Credit Suisse or its affiliates in the United States and other countries. HOLT is a corporate performance and valuation advisory service of Credit Suisse.

For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at https://rave.credit-suisse.com/disclosures or call +1 (877) 291-2683.

25 March 2015


References in this report to Credit Suisse include all of the subsidiaries and affiliates of Credit Suisse operating under its investment banking division. For more information on our structure, please use the following link: https://www.credit-suisse.com/who_we_are/en/This report may contain material that is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation or which would subject Credit Suisse AG or its affiliates ("CS") to any registration or licensing requirement within such jurisdiction. All material presented in this report, unless specifically indicated otherwise, is under copyright to CS. None of the material, nor its content, nor any copy of it, may be altered in any way, transmitted to, copied or distributed to any other party, without the prior express written permission of CS. All trademarks, service marks and logos used in this report are trademarks or service marks or registered trademarks or service marks of CS or its affiliates. The information, tools and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy or subscribe for securities or other financial instruments. CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. CS will not treat recipients of this report as its customers by virtue of their receiving this report. The investments and services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or investment services. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to your individual circumstances, or otherwise constitutes a personal recommendation to you. CS does not advise on the tax consequences of investments and you are advised to contact an independent tax adviser. Please note in particular that the bases and levels of taxation may change. Information and opinions presented in this report have been obtained or derived from sources believed by CS to be reliable, but CS makes no representation as to their accuracy or completeness. CS accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to CS. This report is not to be relied upon in substitution for the exercise of independent judgment. CS may have issued, and may in the future issue, other communications that are inconsistent with, and reach different conclusions from, the information presented in this report. Those communications reflect the different assumptions, views and analytical methods of the analysts who prepared them and CS is under no obligation to ensure that such other communications are brought to the attention of any recipient of this report. Some investments referred to in this report will be offered solely by a single entity and in the case of some investments solely by CS, or an associate of CS or CS may be the only market maker in such investments. Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. Information, opinions and estimates contained in this report reflect a judgment at its original date of publication by CS and are subject to change without notice. The price, value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments. Investors in securities such as ADR's, the values of which are influenced by currency volatility, effectively assume this risk. Structured securities are complex instruments, typically involve a high degree of risk and are intended for sale only to sophisticated investors who are capable of understanding and assuming the risks involved. The market value of any structured security may be affected by changes in economic, financial and political factors (including, but not limited to, spot and forward interest and exchange rates), time to maturity, market conditions and volatility, and the credit quality of any issuer or reference issuer. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase. Some investments discussed in this report may have a high level of volatility. High volatility investments may experience sudden and large falls in their value causing losses when that investment is realised. Those losses may equal your original investment. Indeed, in the case of some investments the potential losses may exceed the amount of initial investment and, in such circumstances, you may be required to pay more money to support those losses. Income yields from investments may fluctuate and, in consequence, initial capital paid to make the investment may be used as part of that income yield. Some investments may not be readily realisable and it may be difficult to sell or realise those investments, similarly it may prove difficult for you to obtain reliable information about the value, or risks, to which such an investment is exposed. This report may provide the addresses of, or contain hyperlinks to, websites. Except to the extent to which the report refers to website material of CS, CS has not reviewed any such site and takes no responsibility for the content contained therein. Such address or hyperlink (including addresses or hyperlinks to CS's own website material) is provided solely for your convenience and information and the content of any such website does not in any way form part of this document. Accessing such website or following such link through this report or CS's website shall be at your own risk. This report is issued and distributed in Europe (except Switzerland) by Credit Suisse Securities (Europe) Limited, One Cabot Square, London E14 4QJ, England, which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. This report is being distributed in Germany by Credit Suisse Securities (Europe) Limited Niederlassung Frankfurt am Main regulated by the Bundesanstalt fuer Finanzdienstleistungsaufsicht ("BaFin"). This report is being distributed in the United States and Canada by Credit Suisse Securities (USA) LLC; in Switzerland by Credit Suisse AG; in Brazil by Banco de Investimentos Credit Suisse (Brasil) S.A or its affiliates; in Mexico by Banco Credit Suisse (México), S.A. (transactions related to the securities mentioned in this report will only be effected in compliance with applicable regulation); in Japan by Credit Suisse Securities (Japan) Limited, Financial Instruments Firm, Director-General of Kanto Local Finance Bureau (Kinsho) No. 66, a member of Japan Securities Dealers Association, The Financial Futures Association of Japan, Japan Investment Advisers Association, Type II Financial Instruments Firms Association; elsewhere in Asia/ Pacific by whichever of the following is the appropriately authorised entity in the relevant jurisdiction: Credit Suisse (Hong Kong) Limited, Credit Suisse Equities (Australia) Limited, Credit Suisse Securities (Thailand) Limited, regulated by the Office of the Securities and Exchange Commission, Thailand, having registered address at 990 Abdulrahim Place, 27th Floor, Unit 2701, Rama IV Road, Silom, Bangrak, Bangkok 10500, Thailand, Tel. +66 2614 6000, Credit Suisse Securities (Malaysia) Sdn Bhd, Credit Suisse AG, Singapore Branch, Credit Suisse Securities (India) Private Limited (CIN no. U67120MH1996PTC104392) regulated by the Securities and Exchange Board of India (registration Nos. INB230970637; INF230970637; INB010970631; INF010970631), having registered address at 9th Floor, Ceejay House, Dr.A.B. Road, Worli, Mumbai - 18, India, T- +91-22 6777 3777, Credit Suisse Securities (Europe) Limited, Seoul Branch, Credit Suisse AG, Taipei Securities Branch, PT Credit Suisse Securities Indonesia, Credit Suisse Securities (Philippines ) Inc., and elsewhere in the world by the relevant authorised affiliate of the above. Research on Taiwanese securities produced by Credit Suisse AG, Taipei Securities Branch has been prepared by a registered Senior Business Person. Research provided to residents of Malaysia is authorised by the Head of Research for Credit Suisse Securities (Malaysia) Sdn Bhd, to whom they should direct any queries on +603 2723 2020. This report has been prepared and issued for distribution in Singapore to institutional investors, accredited investors and expert investors (each as defined under the Financial Advisers Regulations) only, and is also distributed by Credit Suisse AG, Singapore branch to overseas investors (as defined under the Financial Advisers Regulations). By virtue of your status as an institutional investor, accredited investor, expert investor or overseas investor, Credit Suisse AG, Singapore branch is exempted from complying with certain compliance requirements under the Financial Advisers Act, Chapter 110 of Singapore (the "FAA"), the Financial Advisers Regulations and the relevant Notices and Guidelines issued thereunder, in respect of any financial advisory service which Credit Suisse AG, Singapore branch may provide to you. This information is being distributed by Credit Suisse AG, Dubai Branch, duly licensed and regulated by the Dubai Financial Services Authority (DFSA), and is directed at Professional Clients or Market Counterparties only, as defined by the DFSA. The financial products or financial services to which the information relates will only be made available to a client who meets the regulatory criteria to be a Professional Client or Market Counterparty only, as defined by the DFSA, and is not intended for any other person. This research may not conform to Canadian disclosure requirements. In jurisdictions where CS is not already registered or licensed to trade in securities, transactions will only be effected in accordance with applicable securities legislation, which will vary from jurisdiction to jurisdiction and may require that the trade be made in accordance with applicable exemptions from registration or licensing requirements. Non-U.S. customers wishing to effect a transaction should contact a CS entity in their local jurisdiction unless governing law permits otherwise. U.S. customers wishing to effect a transaction should do so only by contacting a representative at Credit Suisse Securities (USA) LLC in the U.S. Please note that this research was originally prepared and issued by CS for distribution to their market professional and institutional investor customers. Recipients who are not market professional or institutional investor customers of CS should seek the advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents. This research may relate to investments or services of a person outside of the UK or to other matters which are not authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority or in respect of which the protections of the Prudential Regulation Authority and Financial Conduct Authority for private customers and/or the UK compensation scheme may not be available, and further details as to where this may be the case are available upon request in respect of this report. CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CS provides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. CS is providing any such services and related information solely on an arm's length basis and not as an advisor or fiduciary to the municipality. In connection with the provision of the any such services, there is no agreement, direct or indirect, between any municipality (including the officials, management, employees or agents thereof) and CS for CS to provide advice to the municipality. Municipalities should consult with their financial, accounting and legal advisors regarding any such services provided by CS. In addition, CS is not acting for direct or indirect compensation to solicit the municipality on behalf of an unaffiliated broker, dealer, municipal securities dealer, municipal advisor, or investment adviser for the purpose of obtaining or retaining an engagement by the municipality for or in connection with Municipal Financial Products, the issuance of municipal securities, or of an investment adviser to provide investment advisory services to or on behalf of the municipality. If this report is being distributed by a financial institution other than Credit Suisse AG, or its affiliates, that financial institution is solely responsible for distribution. Clients of that institution should contact that institution to effect a transaction in the securities mentioned in this report or require further information. This report does not constitute investment advice by Credit Suisse to the clients of the distributing financial institution, and neither Credit Suisse AG, its affiliates, and their respective officers, directors and employees accept any liability whatsoever for any direct or consequential loss arising from their use of this report or its content. Principal is not guaranteed. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.

Copyright © 2015 CREDIT SUISSE AG and/or its affiliates. All rights reserved.

Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments. When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.

XX6516EU.doc

https://www.credit-suisse.com/who_we_are/en/

Documents

Plastic Omnium - Credit Suisse