Masterflex SE — Earnings Release 2011

May 13, 2011

Masterflex AG

Recommendation: HOLD (BUY) Risk: MEDIUM (MEDIUM) Price Target: EUR 6.70 (5.00)

Successful restructuring …

… and dynamic start into FY 2011

• Masterflex recently confirmed its preliminary figures for FY 2010: The company increased revenues from EUR 38.4m in the previous year to EUR 46.1m in FY 2010 (+ 19.9%). EBIT from continued operations improved by approximately 76% from EUR 3.7m to EUR 6.4m. Consolidated net income improved significantly from minus EUR 13.6m to minus EUR 2.3m. Masterflex AG reduced net debt from EUR 46.7m to EUR 22.8m. In combination with the successful rights issue in December 2010, the company improved its equity ratio considerably to 18.7% (FY 2009: 1.4%). These figures clearly demonstrate: a) Masterflex now shows a healthy balance sheet and b) the concentration on its "High-Tech Hose Systems" unit lifts profitability clearly.
• 1Q 2011 results: Masterflex increased revenues from EUR 11.2m to EUR 13.9m (+ 24.2%). EBIT increased by 74.5% to EUR 2.4m. As a result, the EBIT margin was extended to impressive 17.2%. Net income improved from minus EUR 0.4m to EUR 0.9m. The equity ratio now stands at 21.3%
• Outlook: For 2011, Masterflex AG anticipates that the business trend will remain positive. The Executive Board is anticipating a revenue upturn of 8% to 10% to between EUR 50m and EUR 51m and an EBIT of approximately EUR 7.0m. In our view, these assumptions are far from being aggressive. Furthermore, the company plans to expand its activities in Russia and Brasil.
• The activities of the Mobility segment remaining in the Masterflex Group relate only to fuel cell technology. For this segment, Masterflex is also planning a disposal or transfer into a partnership with a strong partner.
• We increase our price target to EUR 6.70 (old: EUR 5.00). Masterflex" business model with focus on High-Tech Hose Systems remains convincing. However, based on current valuation multiples upside potential looks rather limited. For the time being, we cut our recommendation from BUY to HOLD. Any strong weakness in the share price may be a new investment opportunity.

Key data
FY 12/31, EUR m	2008	2009	2010	2011E	2012E	2013E
Sales	73.4	38.4	46.1	51.0	55.0	59.0
EBIT	6.0	3.7	6.4	7.2	8.4	9.4
Net result	-7.6	-0.8	7.9	2.9	3.8	4.6
EPS (continued operat.)	-1.76	-0.19	1.67	0.33	0.43	0.52
EPS (discont. operat.)	-1.84	-2.87	-2.16	0.00	0.00	0.00
EPS (continued and disc.)	-3.60	-3.06	-0.49	0.33	0.43	0.52
Gross margin	61.2%	73.3%	72.8%	66.6%	66.9%	66.6%
EBIT margin	8.1%	n.m.	14.0%	14.1%	15.3%	16.0%
ROE	n.m.	n.m.	n.m.	18.8%	19.6%	18.8%
ROA	n.m.	n.m.	12.1%	4.1%	5.1%	5.6%
EV/EBITDA	8.7	13.1	8.8	8.1	7.1	6.4
EV/EBIT	13.5	n.m.	12.5	11.2	9.6	8.5
P/E (continued operat.)	n.m.	n.m.	3.9	19.9	15.0	12.5

Source: Masterflex AG, CBS Research AG

13 May 2011

Source: CBS Research AG, Bloomberg, Masterflex AG

Change	2011E		2012E		2013E
	new	old	new	old	new	old
Sales	51.0	50.0	55.0	55.0	59.0	-
EBIT	7.2	7.0	8.4	8.4	9.4	-
EPS	0.33	0.32	0.43	0.44	0.52	-
Internet: www.masterflex.de Sektor: All Industrial

WKN: 549293	ISIN: DE0005492938
Reuters: MZXG.DE	Bloomberg: MZX GY

Short company profile:

Masterflex AG is a specialist in developing and manufacturing superior connection and hose systems made of innovative high-tech plastics. Its competence and numerous innovations have allowed the company to set new standards for high-tech hose systems.

Share data:

Share price (EUR, latest closing price):	6.50
Shares outstanding (m):	8.9
Market capitalisation (EUR m):	57.6
Enterprise value (EUR m):	80.4
Ø daily trading volume (3 m., no. of shares):	10,318

Performance data:

High 52 weeks (EUR): Low 52 weeks (EUR): Absolute performance (12 months): Relative performance vs. CDAX: 1 month 3 months 6 months 12 months		7.11 2.52 112.5% 33.2% 61.5% 74.0% 75.4%
Shareholders:
SVB GmbH & Co. KG/Schmidt		18.9%
BBC GmbH		4.5%
Bischoping family	4.4%
own shares		1.5%
free float		70.7%
Financial calendar:
AGM		28 June 2011
2Q 2011 Report		11 August 2011
Author:	Ralf Marinoni (Analyst)
Close Brothers Seydler Research AG
Phone:	+49 (0) 69-977 84 56 0
Email:	research@cbseydlerresearch.ag
www.cbseydlerresearch.ag

Please notice the information on the preparation of this document, the disclaimer, the advice regarding possible conflicts of interests, and the mandatory information required by § 34b WpHG (Securities Trading Law) at the end of this document. This financial analysis in accordance with § 34b WpHG is exclusively intended for distribution to individuals that buy or sell financial instruments at their own account or at the account of others in connection with their trading activities, occupation, or employment.

Valuation

Valuation summary

Consolidation of valuation methods

	Weighting factor	Fair value per share (EUR)
Peer group valuation	50.0%	6.64
DCF valuation	50.0%	6.82
Fair value per share (EUR)		6.73

Source: CBS Research AG

Peer group analysis

As Masterflex lacks listed peers, we used SDAX multiples (FY 2011E to 2013E) as a proxy. It is worth mentioning that Masterflex" profitability lies ahead of SDAX companies. For Masterflex we estimate an EBITDA-margin of 19.6% and an EBITmargin of 14.1% (FY 2011E). The median of SDAX companies amounts to 14.5% and 10.4%, respectively. We therefore decided to grant a 20% premium towards SDAX companies. As a result, we derive a fair value of EUR 6.64. Regarding FY 2011E we used earnings from continued operations. Depending on the sales process of its fuel cell technology activities, consolidated earnings could come in slightly lower: R&D and personnel costs could amount to approximately EUR 0.6m for the fuel cell technology entity.

	EURm, except EPS (EUR)	2011E	EBITDA 2012E	2013E	2011E	EBIT 2012E	2013E	2011E	EPS 2012E	2013E
Masterflex AG: Financial estimates CBS Research		10.0	11.3	12.5	7.2	8.4	9.4	0.33	0.43	0.52
Applied multiples: Peer group median		7.0	6.4	6.2	10.2	8.5	8.0	14.6	11.8	10.8
Enterprise value (derived)		69.6	71.8	77.4	73.0	71.8	75.8	-	-	-
+ Excess cash and marketable securities	14.4
- Financial debt and minority interest	-37.2
Market capitalization (derived)		46.8	49.0	54.6	50.3	49.0	53.0	42.4	45.4	49.9
Average	49.0
Premium (discount) vs. Peer Group	20%
Fair market capitalization (after discount)	58.8
Number of shares (m)	8.9
Fair value per share (EUR)	6.64

Source :Bloomberg, CBS Research AG

DCF model

Our DCF model indicates a fair value of EUR 6.82 for Masterflex.

Discounted Cash Flow Model

		PHASE 1					PHASE 2				PHASE 3
EURm	2011E	2012E	2013E	2014E	2015E	2016E	2017E	2018E	2019E	2020E	8
Sales	51.0	55.0	59.0	62.0	65.0	68.3	71.7	75.3	79.1	83.0
YoY grow th	19.9%	7.8%	7.3%	5.0%	5.0%	5.0%	5.0%	5.0%	5.0%	5.0%
EBIT	7.2	8.4	9.4	9.3	9.8	10.2	10.8	11.3	11.9	12.5
EBIT margin	14.1%	15.3%	16.0%	15.0%	15.0%	15.0%	15.0%	15.0%	15.0%	15.0%
Income tax on EBIT (cash tax rate)	-2.6	-3.0	-3.1	-3.1	-3.2	-3.4	-3.5	-3.7	-3.9	-4.1
Depreciation and amortisation	2.8	2.9	3.1	3.1	3.3	3.4	3.6	3.8	4.0	4.2
Other non-cash items	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0	0.0
Change in net working capital	-6.2	-1.2	-1.2	-1.9	-2.0	-2.0	-2.2	-2.3	-2.4	-2.5
Net capital expenditure	-2.5	-2.9	0.0	-3.2	-3.3	-3.5	-3.7	-3.8	-4.0	-4.2
Free cash flow	-1.3	4.2	8.2	4.3	4.5	4.7	5.0	5.2	5.5	5.9
Present values	-1.2	3.7	6.7	3.3	3.2	3.1	3.0	3.0	2.9	2.8	52.8
Present value Phase 1	9.2				Risk free rate		3.50%		Target equity ratio		30.0%
Present value Phase 2	21.3				Equity risk premium		6.00%		Beta (fundamental)		1.95
Present value Phase 3	52.8				Debt risk premium		2.75%		WACC		7.49%
Total present value	83.3				Tax shield		33.0%		Terminal growth		2.0%
+ Excess cash/Non-operating assets	14.4				Sensitivity analysis
- Financial debt	-37.2								Terminal growth (Phase 3)
							1.0%	1.5%	2.0%	2.5%	3.0%
Fair value of equity	60.5				WACC	6.5%	7.55	8.24	9.07	10.12	11.47
						7.0%	6.63	7.18	7.84	8.64	9.64
Number of shares (m)	8.9					7.5%	5.86	6.30	6.82	7.45	8.22
						8.0%	5.19	5.56	5.98	6.48	7.08
Fair value per share (EUR)	6.82					8.5%	4.62	4.92	5.27	5.67	6.15

Source: CBS Research AG

Masterflex AG

Profit and loss account (continued operations)

IFRS EURm	2008	2009	2010	2011E	2012E	2013E
Sales YoY grow th	73.4 -95.3%	38.4 -47.7%	46.1 19.9%	51.0 10.7%	55.0 7.8%	59.0 7.3%
Change in inventories	0.1	-0.7	0.2	0.5	0.5	0.5
Other activated own work	0.9	0.1	0.0	0.5	0.5	0.5
Other operating income	0.9	1.3	0.8	0.8	0.8	0.9
Total revenues	75.2	39.1	47.1	52.8	56.8	60.9
COGS in % of sales	-30.3 -41.3%	-11.0 -28.6%	-13.5 -29.4%	-18.9 -37.0%	-20.1 -36.5%	-21.5 -36.5%
Gross income in % of sales	44.9 61.2%	28.1 73.3%	33.6 72.8%	34.0 66.6%	36.8 66.9%	39.3 66.6%
Personnel expenses in % sales	-23.5 -32.1%	-14.3 -37.3%	-16.0 -34.8%	-19.0 -37.3%	-23.0 -41.8%	-23.0 -39.0%
Other operating expenses	-12.1	-7.7	-8.4	-5.0	-2.5	-3.8
EBITDA in % of sales	9.3 12.6%	6.1 15.9%	9.1 19.8%	10.0 19.6%	11.3 20.5%	12.5 21.2%
Depreciation and amortisation in % of total revenues	-3.3 -4.4%	-2.5 -6.3%	-2.7 -5.7%	-2.8 -5.3%	-2.9 -5.0%	-3.1 -5.0%
EBIT in % of sales	6.0 8.1%	3.7 9.5%	6.4 14.0%	7.2 14.1%	8.4 15.3%	9.4 16.0%
Financial result	-2.9	-3.2	-3.3	-2.4	-2.4	-2.3
Non-operating expenses	-12.2	-3.1	6.0	0.0	0.0	0.0
EBT in % of sales	-9.1 -12.5%	-2.7 -6.9%	9.1 19.8%	4.8 9.4%	6.0 10.9%	7.1 12.1%
Taxes as % of EBT	1.5 -16.8%	1.7 -64.9%	-1.0 -11.3%	-1.6 -33.0%	-1.9 -31.0%	-2.2 -31.0%
Net income including minorities	-7.6	-0.9	8.1	3.2	4.1	4.9
Minority interests	0.0	0.1	-0.2	-0.3	-0.3	-0.3
Net income attributable to shareholders	-7.6	-0.8	7.9	2.9	3.8	4.6
in % of sales	-10.4%	-2.1%	17.2%	5.7%	7.0%	7.8%
Shares outstanding (in millions)	4.3	4.3	4.7	8.9	8.9	8.9
EPS from continued business units	-1.76	-0.19	1.67	0.33	0.43	0.52
EPS from discontinued business units	-1.84	-2.87	-2.16	0.00	0.00	0.00
EPS from continued and discontin. business units	-3.60	-3.06	-0.49	0.33	0.43	0.52

Source: CBS Research AG, Masterflex AG

Masterflex AG

Balance Sheet

Assets Noncurrent assets 52.2 41.8 34.0 33.6 33.5 as % of total assets 51.5% 60.3% 52.0% 46.9% 43.5% Intangible assets 15.1 6.3 4.1 4.1 4.1 Fixed assets 28.0 25.4 21.2 20.9 20.9 Financial assets 4.7 4.0 2.7 2.7 2.7 Deferred taxes 3.4 5.8 5.9 5.7 5.6 Others 0.9 0.3 0.3 0.3 0.3 Current assets 46.9 27.3 27.6 38.1 43.6 as % of total assets 46.3% 39.5% 42.2% 53.1% 56.5% Inventories 21.1 13.1 7.4 12.8 13.8 Accounts receivables 7.4 4.4 4.4 5.1 5.5 Other receivables and other assets 7.3 2.1 1.5 2.6 2.8 Cash equivalents 0.0 0.0 0.0 0.0 0.0 Cash 11.0 7.8 14.4 17.7 21.6 Assets held for sale 0.0 0.0 3.6 0.0 0.0 Accruals and deferrals 0.0 0.0 0.0 0.0 0.0 Income tax assets 2.2 0.2 0.2 0.0 0.0 Total Assets 101.3 69.3 65.4 71.7 77.2				2013E
				33.5
				40.1%
				4.1
				20.9
				2.7
				5.5
				0.3
				50.0
				59.9%
				14.8
				5.9
				3.0
				0.0
				26.4
				0.0
				0.0
				0.0
				83.4
Shareholders´ equity and liabilities Shareholders´ equity 14.8 1.0 12.2 15.4 19.5 as % of total equity and liabilities 14.7% 1.4% 18.7% 21.5% 25.3%				24.5 29.3%
Capital stock 4.4 4.4 8.7 8.7 8.7				8.7
Capital reserve 17.5 17.5 26.3 26.3 26.3				26.3
Retained earnings -7.2 -21.1 -23.2 -20.0 -15.8				-10.9
Minorities 0.2 0.2 0.4 0.4 0.4				0.4
Noncurrent liabilities 27.2 25.1 32.8 34.4 35.0				35.6
as % of total equity and liabilities 26.8% 36.1% 50.1% 48.0% 45.4%				42.7%
Pension provision and other liabilities 0.0 0.0 0.0 0.0 0.0				0.0
Deferred taxes 1.5 1.5 0.5 0.5 0.5				0.5
Financial liabilities 21.5 19.5 30.0 30.3 30.6				31.0
Other liabilities 4.2 4.1 2.2 3.6 3.9				4.1
Current liabilities 59.2 43.3 20.4 21.8 22.6				23.4
as % of total equity and liabilities 58.5% 62.4% 31.2% 30.5% 29.3%				28.0%
Tax provisions 0.0 0.0 0.0 0.0 0.0				0.0
Other provisions 3.5 2.9 4.5 4.1 4.4				4.7
Financial liabilities 47.5 35.0 7.1 7.0 6.9				6.7
Trade accounts payables 4.8 2.2 1.8 2.6 2.8				3.0
Received prepayments 0.0 0.0 4.4 4.6 4.9				5.1
Other liabilities 2.9 2.4 1.5 2.6 2.8				3.0
Accruals and deferrals 0.5 0.7 1.1 1.0 1.0				0.9
Debt from assets to be disposed 0.0 0.0 0.0 0.0 0.0				0.0
Total equity and liabilities 101.3 69.3 65.4 71.7 77.2				83.4

Source: CBS Research AG, Masterflex AG

Research

Schillerstrasse 27 - 29 60313 Frankfurt am Main

Phone: +49 (0)69 – 977 8456-0

Roger Peeters	+49 (0)69 -977 8456- 12
Member of the Board	Roger.Peeters@cbseydlerresearch.ag
Martin Decot	+49 (0)69 -977 8456- 13 Martin.Decot@cbseydlerresearch.ag	Kristina Kardum	+49 (0)69 -977 8456- 21 Kristina.Kardum@cbseydlerresearch.ag
Rabeya Khan	+49 (0)69 -977 8456- 10 Rabeya.Khan@cbseydlerresearch.ag	Igor Kim	+49 (0)69 -977 8456- 15 Igor.Kim@cbseydlerresearch.ag
Ralf Marinoni	+49 (0)69 -977 8456- 17 Ralf.Marinoni@cbseydlerresearch.ag	Manuel Martin	+49 (0)69 -977 8456- 16 Manuel.Martin@cbseydlerresearch.ag
Enid Omerovic	+49 (0)69 -977 8456- 19 Enid.Omerovic@cbseydlerresearch.ag	Felix Parmantier	+49 (0)69 -977 8456- 22 Felix.Parmantier@cbseydlerresearch.ag
Marcus Silbe	+49 (0)69 -977 8456- 14 Marcus.Silbe@cbseydlerresearch.ag	Veysel Taze	+49 (0)69 -977 8456- 18 Veysel.Taze@cbseydlerresearch.ag

Institutional Sales

Schillerstrasse 27 – 29 25 Dowgate Hill 60313 Frankfurt am Main London EC4R 2GA Phone: +49 (0)69 – 9 20 54-400

Raimar Bock +49 (0)69 -9 20 54-115 Head of Sales Raimar.Bock@cbseydler.com

Henriette Domhardt +49 (0)69 -9 20 54-137 Rüdiger Eich +49 (0)69 -9 20 54-119 (Austria, Germany) Henriette.Domhardt@cbseydler.com (Germany, Switzerland) Ruediger.Eich@cbseydler.com

Uwe Gerhardt +49 (0)69 -9 20 54-168 Klaus Korzilius +49 (0)69 -9 20 54-114 (Germany, Switzerland) Uwe.Gerhardt@cbseydler.com (Benelux, Germany) Klaus.Korzilius@cbseydler.com

Stefan Krewinkel +49 (0)69 -9 20 54-118 Markus Laifle +49 (0)69 -9 20 54-120 (Execution, UK) Stefan.Krewinkel@cbseydler.com (Execution) Markus.Laifle@cbseydler.com

Bruno de Lencquesaing +49 (0)69 -9 20 54-116 Christopher Seedorf +49 (0)69 -9 20 54-110 (Benelux, France) Bruno.deLencquesaing@cbseydler.com (Sales-Support) Christopher.Seedorf@cbseydler.com

Janine Theobald +49 (0)69 -9 20 54-116 Bas-Jan Walhof +49 (0)69 -9 20 54-105 (Germany) Janine.Theobald@cbseydler.com (Benelux) Bas-Jan.Walhof@cbseydler.com

Disclaimer and statement according to § 34b German Securities Trading Act ("Wertpapierhandelsgesetz") in combination with the provisions on financial analysis ("Finanzanalyseverordnung" FinAnV)

This report has been prepared independently of the company analysed by Close Brothers Seydler Research AG and/ or its cooperation partners and the analyst(s) mentioned on the front page (hereafter all are jointly and/or individually called the "author"). None of Close Brothers Seydler Research AG, Close Brothers Seydler Bank AG or its cooperation partners, the Company or its shareholders has independently verified any of the information given in this document.

Section 34b of the German Securities Trading Act in combination with the FinAnV requires an enterprise preparing a security analysis to point out possible conflicts of interest with respect to the company that is the subject of the analysis.

Close Brothers Seydler Research AG is a majority owned subsidiary of Close Brothers Seydler Bank AG (hereafter ´CBS´). However, Close Brothers Seydler Research AG (hereafter ´CBSR´) provides its research work independent from CBS. CBS is offering a wide range of Services not only including investment banking services and liquidity providing services (designated sponsoring). CBS or CBSR may possess relations to the covered companies as follows (additional information and disclosures will be made available upon request):

• a. CBS holds more than 5% interest in the capital stock of the company that is subject of the analysis.
• b. CBS was a participant in the management of a (co)consortium in a selling agent function for the issuance of financial instruments, which themselves or their issuer is the subject of this financial analysis within the last twelve months.
• c. CBS has provided investment banking and/or consulting services during the last 12 months for the company analysed for which compensation has been or will be paid for.
• d. CBS acts as designated sponsor for the company's securities on the basis of an existing designated sponsorship contract. The services include the provision of bid and ask offers. Due to the designated sponsoring service agreement CBS may regularly possess shares of the company and receives a compensation and/ or provision for its services.
• e. The designated sponsor service agreement includes a contractually agreed provision for research services.
• f. CBSR and the analysed company have a contractual agreement about the preparation of research reports. CBSR receives a compensation in return.
• g. CBS has a significant financial interest in relation to the company that is subject of this analysis.

In this report, the following conflicts of interests are given at the time, when the report has been published: d, f

CBS and/or its employees or clients may take positions in, and may make purchases and/ or sales as principal or agent in the securities or related financial instruments discussed in this analysis. CBS may provide investment banking, consulting, and/ or other services to and/ or serve as directors of the companies referred to in this analysis. No part of the authors compensation was, is or will be directly or indirectly related to the recommendations or views expressed.

Recommendation System:

Close Brothers Seydler Research AG uses a 3-level absolute share rating system. The ratings pertain to a time horizon of up to 6 months:

BUY: The expected performance of the share price is above +10%. HOLD: The expected performance of the share price is between 0% and +10%. SELL: The expected performance of the share price is below 0%.

Recommendation history over the last 12 months for the company analysed in this report:

Date	Recommendation	Price at change date	Price target
13 August 2010	HOLD (Initiating Coverage)	EUR 3.43	EUR 3.50
10 November 2010	HOLD	EUR 4.35	EUR 4.40
14 December 2010	BUY	EUR 3.91	EUR 5.00
13 May 2011	HOLD	EUR 6.50	EUR 6.70

Risk-scaling System:

Close Brothers Seydler Research AG uses a 3-level risk-scaling system. The ratings pertain to a time horizon of up to 6 months:

LOW: The volatility is expected to be lower than the volatility of the benchmark MEDIUM: The volatility is expected to be equal to the volatility of the benchmark HIGH: The volatility is expected to be higher than the volatility of the benchmark

The following valuation methods are used when valuing companies: Multiplier models (price/earnings, price/cash flow, price/book value, EV/Sales, EV/EBIT, EV/EBITA, EV/EBITDA), peer group comparisons, historical valuation approaches, discounting models (DCF, DDM), break-up value approaches or asset valuation approaches. The valuation models are dependent upon macroeconomic measures such as interest, currencies, raw materials and assumptions concerning the economy. In addition, market moods influence the valuation of companies. The figures taken from the income statement, the cash flow statement and the balance sheet upon which the evaluation of companies is based are estimates referring to given dates and therefore subject to risks. These may change at any time without prior notice.

The opinions and forecasts contained in this report are those of the author alone. Material sources of information for preparing this report are publications in domestic and foreign media such as information services (including but not limited to Reuters, VWD, Bloomberg, DPA-AFX), business press (including but not limited to Börsenzeitung, Handelsblatt, Frankfurter Allgemeine Zeitung, Financial Times), professional publications, published statistics, rating agencies as well as publications of the analysed issuers. Furthermore, discussions were held with the management for the purpose of preparing the analysis. Potentially parts of the analysis have been provided to the issuer prior to going to press; no significant changes were made afterwards, however. Any information in this report is based on data considered to be reliable, but no representations or guarantees are made by the author with regard to the accuracy or completeness of the data. The opinions and estimates contained herein constitute our best judgment at this date and time, and are subject to change without notice. Possible errors or incompleteness of the information do not constitute grounds for liability, neither with regard to indirect nor to direct or consequential damages. The views presented on the covered company accurately reflect the personal views of the author. All employees of the author's company who are involved with the preparation and/or the offering of financial analyzes are subject to internal compliance regulations.

The report is for information purposes, it is not intended to be and should not be construed as a recommendation, offer or solicitation to acquire, or dispose of, any of the securities mentioned in this report. Any reference to past performance should not be taken as indication of future performance. The author does not accept any liability whatsoever for any direct or consequential loss arising from any use of material contained in this report. The report is confidential and it is submitted to selected recipients only. The report is prepared for professional investors only and it is not intended for private investors. Consequently, it should not be distributed to any such persons. Also, the report may be communicated electronically before physical copies are available. It may not be reproduced (in whole or in part) to any other investment firm or any other individual person without the prior written approval from the author. The author is not registered in the United Kingdom nor with any U.S. regulatory body.

It has not been determined in advance whether and in what intervals this report will be updated. Unless otherwise stated current prices refer to the closing price of the previous trading day. Any reference to past performance should not be taken as indication of future performance. The author maintains the right to change his opinions without notice, i.e. the opinions given reflect the author"s judgment on the date of this report.

This analysis is intended to provide information to assist institutional investors in making their own investment decisions, not to provide investment advice to any specific investor.

By accepting this report the recipient accepts that the above restrictions are binding. German law shall be applicable and court of jurisdiction for all disputes shall be Frankfurt am Main (Germany).

This report should be made available in the United States solely to investors that are (i) "major US institutional investors" (within the meaning of SEC Rule 15a-6 and applicable interpretations relating thereto) that are also "qualified institutional buyers" (QIBs) within the meaning of SEC Rule 144A promulgated by the United States Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the "Securities Act") or (ii) investors that are not "US Persons" within the meaning of Regulation S under the Securities Act and applicable interpretations relating thereto. The offer or sale of certain securities in the United States may be made to QIBs in reliance on Rule 144A. Such securities may include those offered and sold outside the United States in transactions intended to be exempt from registration pursuant to Regulation S. This report does not constitute in any way an offer or a solicitation of interest in any securities to be offered or sold pursuant to Regulation S. Any such securities may not be offered or sold to US Persons at this time and may be resold to US Persons only if such securities are registered under the Securities Act of 1933, as amended, and applicable state securities laws, or pursuant to an exemption from registration.

This publication is for distribution in or from the United Kingdom only to persons who are authorised persons or exempted persons within the meaning of the Financial Services and Markets Act 2000 of the United Kingdom or any order made there under or to investment professionals as defined in Section 19 of the Financial Services and

Markets Act 2000 (Financial Promotion) Order 2005 and is not intended to be distributed or passed on, directly or indirectly, to any other class of persons.

This publication is for distribution in Canada only to pension funds, mutual funds, banks, asset managers and insurance companies.

The distribution of this publication in other jurisdictions may be restricted by law, and persons into whose possession this publication comes should inform themselves about, and observe, any such restrictions. In particular this publication may not be sent into or distributed, directly or indirectly, in Japan or to any resident thereof.

Responsible Supervisory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin, Federal Financial Supervisory Authority) Graurheindorferstraße 108 53117 Bonn and Lurgiallee 12 60439 Frankfurt

Schillerstrasse 27 - 29 60313 Frankfurt am Main www.cbseydlerresearch.ag Tel.: 0049 - (0)69 - 97 78 45 60