Mantra Group. The sun is shining. Earnings and target price revision. No change. Price catalyst. Catalyst: FY15 result on 27 August.

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1 AUSTRALIA MTR AU Price (at 09:24, 06 Aug 2015 GMT) Outperform A$3.57 Valuation A$ DCF (WACC 8.7%, beta 1.3, ERP 5.0%, RFR 3.8%, TGR 3.0%) 12-month target A$ month TSR % Volatility Index Low/Medium GICS sector Consumer Services Market cap A$m day avg turnover A$m 1.3 Number shares on issue m Investment fundamentals Year end 30 Jun 2014A 2015E 2016E 2017E Revenue m EBIT m Reported profit m Adjusted profit m Gross cashflow m CFPS CFPS growth % nmf PGCFPS x PGCFPS rel x EPS adj EPS adj growth % nmf PER adj x PER rel x Total DPS Total div yield % Franking % nmf ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x MTR AU vs Small Ordinaries, & rec history Note: Recommendation timeline - if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, August 2015 (all figures in AUD unless noted) 7 August 2015 Macquarie Securities (Australia) Limited The sun is shining Event We update our positive investment case for MTR ahead of the FY15 result. Impact Latest hotel market data supportive... Based on data from STR Global, Australian hotel RevPAR performance over FY15 was overall positive (up ~3%) and supportive of our forecast +2.2% in CBD and +5.3% in Resorts. Performance was mixed across cities, with the strongest performers tourist locations Cairns and the Gold Coast, as well as key CBD markets Sydney and Melbourne. Darwin was the weakest market due to contraction of mining activity but we believe MTR likely outperformed the Darwin market (see p. 3).... And the outlook is generally robust: Key property groups (CBRE, JLL, Savills) are forecasting a relatively positive outlook for the Australian hotel market. Potential new supply is expected to be constrained / easily absorbed in most key markets outside of Perth and Brisbane. Sydney, Melbourne, Cairns and the Gold Coast have the strongest RevPAR outlook with Darwin appearing the only concern. Perth and Brisbane are stabilising and we will be watching closely over the medium-term for effects of any potential oversupply. Interesting trends in ABS data: The ABS has reinstated its travel data, which is now available to May. Key points relevant to MTR: (1) since Feb-14 arrivals growth has outpaced growth in departures on a rolling 12-month basis, (2) outbound departure growth dropped to 1% in May but we await further data to call a trend, (3) net departures (departures less arrivals) appear to have peaked with negative y/y growth since mid-2014, and (4) Arrivals from China continue to grow, with China ranking #2 at >14% of tourist arrivals. New property momentum continues: Two new properties were announced in the past six weeks Peppers Adelaide and BreakFree on Collins. Expecting a solid FY15 result: We are forecasting FY15 EBITDA of $72.5m vs. upgraded guidance $71-73m, Factset consensus $71.9m, and pcp $62.4m (+16.2%). Macq E final div of 5cps. OCF conversion should be solid (as has historically been the case) and capex elevated due to Outrigger and Soul. We expect positive outlook commentary around key leisure destinations given booking window forward visibility, with the corporate market view unchanged. Earnings and target price revision No change. Price catalyst 12-month price target: A$4.08 based on a DCF methodology. Catalyst: FY15 result on 27 August. Action and recommendation MTR is in the enviable position of having multiple medium-term industry tailwinds coupled with an attractive business model and experienced management team. The business is well placed to benefit from any recovery in domestic tourism, with the China inbound thematic supportive over the medium-to long-term. Retain Outperform. Please refer to page 10 for important disclosures and analyst certification, or on our website

2 Travel market outlook remains supportive Latest hotel market data and outlook is supportive Fig 1 Summary of Australian hotel market data and outlook from major property groups Source Data period RevPAR* Supply outlook Broader outlook commentary CBRE Hotels 2H FY15 (6-mths to Aus +3.4% (RevPAR data June) Adelaide -4.6% from STR Global) Brisbane -5.6% Australian hotel market update, July 2015 FY15 (12-mths to June) Cairns +10.2% Canberra +6.8% Darwin -12.7% Gold Coast +8.0% Hobart +5.2% Melbourne +3.8% Perth -2.9% Sydney +6.9% Aus +2.9% Adelaide -2.0% Brisbane +0.1% Cairns +10.9% Canberra +2.0% Darwin -9.1% Gold Coast +8.5% Hobart +3.3% Melbourne +3.1% Perth -3.1% Sydney +4.0% Aus: 37k new rooms across 10 key cities with >14k expected to come online over next 3.5 years. Adelaide: Not all proposed supply will come to fruition, only a short-lived dip when new supply comes on. Brisbane: Influx of supply due to moratorium on council charges for hotel development. Ongoing supply expected > demand. Cairns: Limited new supply in pipeline. Canberra: New stock has been absorbed but unsure how additional stock will play out over the medium-term. Darwin: Some mooted hotel developments for key tourism region. Gold Coast: Benign supply outlook. Hobart: Medium-term supply pipeline should be easily absorbed, long-term supply may be more difficult but not all projects expected to proceed. Melbourne: New supply to enter market and expected to be largely absorbed. Perth: Significant new supply over next three years but not all will come to fruition. New hotel marketing will limit declines in rates and occupancy. Sydney: Minimal new supply with some large hotels planning refurbs - further constraining supply. Adelaide: Limited RevPAR growth at / around CPI. Brisbane: Growth in demand due to strong tourism forecasts. However, ongoing supply > demand for med-term resulting in lower occupancy and RevPAR. Cairns: Exceeding market expectations and recovering off a low base but RevPar well below other destinations. Strong rebound in tourism supported by increased air capacity. Canberra: Unsure how rates and occupancy will perform with new stock over medium-term. Darwin: Hotels likely focus on holding occupancies with pressure to come on rates. Gold Coast: Increased tourism demand expected to result in growth occupancy and rate growth over short and medium term. Hobart: Steady short-term outlook. Planned increase in tourism marketing will support demand. Melbourne: Continued room demand growth in short-term. Med-term supply to have limited impact on occupancy. Rate growth at CPI levels due to cost-conscious corporates. Perth: Demand has remained strong with airlines, hotels, wholesalers etc using lower rates to target leisure, groups & events segments. Sydney: Occupancies to remain high and rate growth at inflationary levels (minimum). Savills Australian Hotels Q1/ New supply is muted in Melbourne and limited supply announced for Sydney. Brisbane is seeing no visible impact of new supply, albeit Savills are watching closely. Consumers travelling to Aus are finding more value and are benefiting from lower fuel prices and airfares. Brisbane has reached the bottom of the cycle and is rebounding. JLL Australian Hotel Market Update presentation to Austrade - - Large supply increase in Perth a med-term concern. Melbourne expected to absorb supply increase given fundamentals. 12-mth RevPAR outlook: - Positive: Syd, Canberra, Melb. - Flat: Brisbane, Perth. - Down: Darwin, Adelaide. Brisbane: Signs of stabilisation but watching proposed supply growth Sydney: Positive medium-term outlook with strong market fundamentals / physical supply constrains. Melbourne: Positive medium-term outlook, new supply expected to have negligible effect on trading. Perth: Stable short-term outlook with leisure travel helping to take place of lost corp travel. Significant supply growth likely depress medterm trading. Source: Company websites & press releases, Macquarie Research, August *Revenue Per Available Room; STR Global source of RevPAR data. In Figure 1 we summarise the most recent hotel market data and outlook from STR Global, CBRE, Savills and JLL. We highlight the following key points: RevPAR performance over FY15 was overall positive (up ~3%), with performance mixed across cities. This compares to our FY15 RevPAR growth forecast of 2.2% in CBD and 5.3% in Resorts. 7 August

3 Jan-2008 May-2008 Sep-2008 Jan-2009 May-2009 Sep-2009 Jan-2010 May-2010 Sep-2010 Jan-2011 May-2011 Sep-2011 Jan-2012 May-2012 Sep-2012 Jan-2013 May-2013 Sep-2013 Jan-2014 May-2014 Sep-2014 Jan-2015 May-2015 Jan-2008 May-2008 Sep-2008 Jan-2009 May-2009 Sep-2009 Jan-2010 May-2010 Sep-2010 Jan-2011 May-2011 Sep-2011 Jan-2012 May-2012 Sep-2012 Jan-2013 May-2013 Sep-2013 Jan-2014 May-2014 Sep-2014 Jan-2015 May-2015 Macquarie Wealth Management Strongest performers were tourist locations Cairns and Gold Coast, with the key CBD markets of Sydney and Melbourne also performing well. Darwin was the weakest market due to contraction of mining activity. We believe MTR likely comfortably outperformed the Darwin market due to its focus on long-stay business. In addition, one of MTR s two key Darwin properties is structured as an MLR i.e. it does not contain the operating leverage of a lease structure (on both the upside and downside). The supply outlook varies by city, with Perth and Brisbane highlighted as potentially in danger of over-supply in the medium term. Melbourne will experience supply growth but is largely expected to absorb additional rooms with little impact on RevPAR. Key tourist destinations of Cairns and the Gold Coast have a subdued supply outlook. Markets highlighted as having the most positive outlook include Sydney, Melbourne, Cairns and the Gold Coast. After several years of declines Perth now has a stable outlook. Brisbane is stabilising but all are closely watching the impact of new supply. Darwin has the weakest outlook of the key Australian markets. ABS travel data is back online... and showing some interesting trends After a significant hiatus the ABS has recently begun releasing its arrivals and departures data, which is now available up until May We highlight key trends in Figures 2 to 5: Since February 2014 growth in arrivals has outpaced growth in departures on a rolling 12- month basis. On a monthly basis over that same period, growth in arrivals has been stronger than departures in 14 of the 16 months. The growth differential in some months has been as high as 9-10%. Outbound departure growth dropped to 1% in May and we await the release of more data to see if a trend of sustained lower growth emerges. Net departures (departures less arrivals) appear to have peaked, with net y/y departure growth falling since mid As the second largest accommodation operator in Australia, MTR is well positioned to benefit from these trends. MTR s leisure business is predominantly domestic travel with a smaller but rapidly growing exposure to international inbound travel. Fig 2 Growth in outbound vs. inbound (y/y) Fig 3 Growth in outbound vs. inbound (12-mth rolling) 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% -10.0% -15.0% 20.0% 15.0% 10.0% 5.0% 0.0% -5.0% OUTBOUND INBOUND OUTBOUND INBOUND Source: ABS, Macquarie Research, August 2015 Source: ABS, Macquarie Research, August August

4 Jan-2007 Jun-2007 Nov-2007 Apr-2008 Sep-2008 Feb-2009 Jul-2009 Dec-2009 May-2010 Oct-2010 Mar-2011 Aug-2011 Jan-2012 Jun-2012 Nov-2012 Apr-2013 Sep-2013 Feb-2014 Jul-2014 Dec-2014 May-2015 NZ China UK US Singapore Japan Malaysia HK South Korea India Germany Indonesia France Jan-1991 Feb-1992 Mar-1993 Apr-1994 May-1995 Jun-1996 Jul-1997 Aug-1998 Sep-1999 Oct-2000 Nov-2001 Dec-2002 Jan-2004 Feb-2005 Mar-2006 Apr-2007 May-2008 Jun-2009 Jul-2010 Aug-2011 Sep-2012 Oct-2013 Nov-2014 Jan-2011 Apr-2011 Jul-2011 Oct-2011 Jan-2012 Apr-2012 Jul-2012 Oct-2012 Jan-2013 Apr-2013 Jul-2013 Oct-2013 Jan-2014 Apr-2014 Jul-2014 Oct-2014 Jan-2015 Apr-2015 Macquarie Wealth Management Fig 4 Net departures (departures less arrivals; No.) Fig 5 Net departures growth y/y (rolling 12-mth av.) % 60% 50% 40% 30% 20% 10% 0% -10% -20% Net departures Net departures (rolling 12-mth av) Source: ABS, August Seasonally adjusted data. Source: ABS, Macquarie Research, August 2015 Arrivals from China continue to grow, with China now >14% of tourist arrivals. We see this as a longer-term thematic for MTR. We believe MTR is currently largely priced out of the China inbound market; however, we would expect it to benefit from: (1) a flow-through to higher room rates as capacity is soaked up at low-end competitors, (2) the anticipated structural shift from Chinese travelling on low-cost package tours to independent travel, and the associated up-lift in in-country spend. Fig 6 International arrivals NZ, China, India (index) Fig 7 International arrivals % of total May % 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% China India NZ Source: ABS, Macquarie Research, August Indexed to 1-Jan-07. Source: ABS, Macquarie Research, August 2015 New property pipeline momentum continues MTR have signed two new properties over the past 6 weeks, including: Peppers Adelaide: A 202 room five-star hotel. MTR will work with the owners (Hotel Invest) to upgrade the property. It includes two F&B outlets, meeting facilities, heated indoor lap pool and fitness centre. The property will open as Peppers on 1 September. BreakFree on Collins: 93 one-and two-bedroom apartments at 233 Collins St. Refurbishment works are underway and the property opened on 1 July These contract wins highlight to us the continuing opportunity of MTR to win new property operating contracts. The latest JLL Top Owner & Operators survey showed MTR as the number two accommodation operator with >14k rooms vs. Accor at almost 27k rooms (as at end-cy14). As such we do believe MTR has substantial headroom to increase its number of rooms, although we note that Accor has 11 brands compared to MTR s three brands. 7 August

5 We expect positive commentary around the new property pipeline at the upcoming FY15 result. Figure 8 below contains an EBITDA bridge to FY16, including our assumptions around existing portfolio earnings, portfolio acquisitions, and new property operating contracts. Our FY16e EBITDA of $85.5m is in line with Factset consensus and assumes just under $3m of incremental EBITDA from new property wins yet to be announced. We believe this achievable given the time of year and MTR s new property momentum, noting that a single lease or large MLR could contribute at least $1-2m EBITDA. Fig 8 Macquarie forecast EBITDA bridge* ($m) FY15e EBITDA Existing properties Outrigger Soul incremental Peppers Adel Unann. new + BF Melb properties FY16e EBITDA Source: Macquarie Research, August *Waterfall components are rounded / approximate. Earnings outlook and result preview Fig 9 Macquarie earnings outlook & FY15 preview June y/e; $A$m FY11(a) FY12(a) FY13(a) 1H14(a) 2H14(a) FY14(a) 1H15(a) 2H15(e) FY15(e) FY16(e) FY17(e) Revenue Lease costs Other costs EBITDA Depreciation EBITA Amort (non-cash backed) EBIT Net Interest PBT Tax NPAT pre-abnormal NPATA Abnormal items NPAT reported EPS pre-abnormal DPS Source: Company information, Macquarie Research, August 2015 Figure 9 contains our P&L forecasts for the FY15 result, with divisional assumptions and revenue drivers on the following page. 7 August

6 Fig 10 Divisional assumptions and revenue growth drivers June y/e; A$m FY11(a) FY12(a) FY13(a) 1H14(a) 2H14(a) FY14(a) 1H15(a) 2H15(e) FY15(e) FY16(e) FY17(e) CBD Sales Growth - 6.0% 2.6% 4.0% 4.5% 4.2% 13.5% 16.4% 14.9% 7.7% 8.5% EBITDA Growth % -2.4% -0.8% -4.9% -2.7% 6.2% 18.0% 11.5% 7.2% 8.9% Margin 18.2% 20.5% 19.5% 19.6% 16.6% 18.2% 18.4% 16.9% 17.6% 17.5% 17.6% KPIs Total rooms avail. 1,410 1,428 1, , ,633 1,725 1,858 Paid rooms sold 1,084 1,123 1, , ,383 1,461 1,551 Occupancy 76.9% 78.7% 81.7% 85.1% 83.1% 84.1% 85.5% 83.9% 84.7% 84.7% 83.5% Average room rate $ $ $ $ $ $ $ $ $ $ $ RevPAR $ $ $ $ $ $ $ $ $ $ $ Reconciliation Gross room revenue Net room rev to MTR* Non-room rev to MTR* Resorts Sales Growth - 5.8% 2.3% 4.3% 6.2% 5.2% 3.6% 5.6% 4.5% 20.1% 4.6% EBITDA Growth % 9.5% 4.3% 20.3% 9.7% 4.2% 18.2% 9.3% 35.9% 6.4% Margin 10.9% 11.6% 12.4% 15.7% 9.9% 13.0% 15.8% 11.1% 13.5% 15.3% 15.6% KPIs Total rooms avail. 1,900 1,902 1, , ,926 2,378 2,412 Paid rooms sold 1,118 1,189 1, , ,329 1,665 1,703 Occupancy 58.8% 62.5% 64.0% 68.1% 62.9% 65.6% 71.9% 66.1% 69.0% 70.0% 70.6% Average room rate $ $ $ $ $ $ $ $ $ $ $ RevPAR $85.08 $89.57 $94.46 $ $94.21 $99.44 $ $99.59 $ $ $ Reconciliation Gross room revenue Net room rev to MTR* Non-room rev to MTR* Central Rev & Distribution Sales Growth % 4.0% 8.8% 54.9% 30.3% 20.6% -0.3% 9.0% 6.5% 6.5% EBITDA Growth % 8.6% 9.2% 35.1% 20.6% 20.6% -1.3% 9.8% 5.4% 6.5% Margin 66.1% 71.4% 74.6% 78.7% 61.2% 69.0% 78.7% 60.5% 69.5% 68.8% 68.8% Corporate Sales Growth % -3.8% -4.3% 123.6% 52.0% -29.3% -61.3% -50.0% 2.0% 2.0% EBITDA Growth % -4.8% -12.5% 20.2% 1.9% -2.4% -1.5% -1.9% 3.0% 3.0% Source: Company information, Macquarie Research, August 2015 We are expecting MTR to report a solid FY15 result. Our FY15e EBITDA of $72.5m compares to upwardly revised guidance of $71-73m, Factset consensus $71.9m, and original prospectus EBITDA of $69.5m. NPAT guidance is $ m before acquisition-related transaction costs. This compares to Macq E $35.4m (=$38.1m in NPATA terms), which assumes ~$1.4m of one-offs for Outrigger and Soul. By division, we expect FY15e CBD EBITDA +11.5% to $47.8m and Resorts +9.3% to $24.8m. Our CBD growth forecast is driven largely by new properties, with RevPAR growth of only 2.2%. 7 August

7 Conversely our Resorts EBITDA is driven largely by RevPAR, which we forecast at +5.3%. Fig 11 Cash flow outlook ($m) OCF conversion FY11(a) FY12(a) FY13(a) FY14(a) FY15(e) FY16(e) FY17(e) EBITDA Operating Cashflow (rep.) Tax Paid Net interest paid Ungeared Pre tax CF Profit to cash Conversion 98.4% 105.6% 113.5% 110.8% 108.7% 104.2% 103.2% Sources & uses of funds FY15(e) FY16(e) FY17(e) Open net debt EBITDA Net Interest Tax Paid Working Capital Acquisitions / Equity invest Capex Dividends Divestments Equity Issuance Other Change in net debt Close net debt (-ve = net cash) Source: Company data, Macquarie Research, August 2015 We are expecting MTR to realise solid OCF conversion in FY15, as has been the case historically. Capex is notably elevated in FY15, with significant expenditure on new properties late in 2H that will benefit earnings in FY16. The $50m of new equity raised was to fund the Outrigger acquisition ($29.5m) and the Soul MLR. We have lower capex in FY16 to reflect the higher spend in FY15. We are forecasting only a modest $9.7m reduction in net debt in FY15 to $69m, which translates to a forecast ND/EBITDA of ~1x. Valuation and price target We utilise a DCF valuation to better capture the opportunity for growth over the medium-term from new properties and medium-term industry tailwinds. DCF assumptions (unchanged) are as follows: RFR 3.75%, Beta 1.25, ERP 5%, gearing 20%, cost of debt 5%, TGR 3%, WACC 8.7%. We are comfortable having a TGR >2.5% for MTR given the structural thematic surrounding Chinese inbound tourism, with MTR to benefit as the Chinese move from group tours to independent travel. For more detail on this long-term thematic see our initiation report Travelling (capital) light. Our DCF valuation is $3.80 per share (unchanged). To arrive at our $4.08 price target (unchanged) we roll forward our DCF 12 months. 7 August

8 (MTR:$3.57) 6-Aug-15 Interim results 1H/14A 2H/14A 1H/15A 2H/15E Profit & Loss 2014A 2015E 2016E 2017E Revenue Revenue $m EBITDA $m EBITDA $m Depreciation $m Depreciation $m Amortisation of goodwill $m Amortisation of goodwill $m EBIT $m EBIT $m Net Interest expense $m Net interest expense $m Pre-Tax Profit $m Pre-Tax Profit $m Tax Expense $m Tax Expense $m Net Profit $m Net Profit $m Outside equity interests $m Outside equity interests $m Net Abn/Extra $m Net Abnormals/Extra. $m Reported Earnings $m Reported Earnings $m Adjusted Earnings $m Adjusted Earnings $m Gross Cashflow $m Gross Cashflow $m EPS (Adj/dil) c EPS (adj/diluted) c EPS growth % EPS growth % CFPS c PE (adj) x CFPS Growth % CFPS c EBITDA/Sales % CFPS Growth % EBIT/Sales % PGCFPS x Earnings Split % DPS c Revenue Growth % Yield % EBIT Growth % Franking % nmf Profit and Loss ratios 2014A 2015E 2016E 2017E Cashflow Analysis 2014A 2015E 2016E 2017E Revenue Growth % EBIT Growth % Pre-tax Profit $m EBITDA/Sales % Depreciation & Amortisation $m EBIT/Sales % Tax Paid $m Effective tax rate % Gross cashflow $m Payout ratio % Changes in working capital $m EV/EBITA x Other $m EV/EBITDA x Operating Cashflow $m EV/Sales x Acquisitions $m Balance sheet ratios Capex - Plant & Equip. $m ROE % Asset Sales $m ROA % Other $m ROFE % Investing cashflow $m Net Debt $m Dividend (ordinary) $m Net Debt/Equity % Equity raised $m Interest Cover x Other $m Net Debt/EBITDA x Financing cashflow $m Fixed Charges Cover x NTA per share $ Net Change in cash/debt $m EFPOWA m Historical performance* 2011A 2012A 2013A 2014A Balance Sheet 2014A 2015E 2016E 2017E Cash $m Revenue $m Receivables $m EBITDA $m Inventories $m Depreciation/Amortisation $m Investments $m EBIT $m Property, plant & equipment $m Net interest expense $m Intangibles $m Pre-Tax Profit $m Other Assets $m Tax Expense $m Total Assets $m Net Profit $m Payables $m Net Abn/Extra $m Short Term Debt $m Long Term Debt $m EPS (adj/dil) c Other Liabilities $m EPS growth % Total Liabilities $m Ordinary DPS c Shareholders Funds $m EBITDA/Sales % Minority Interests $m EBIT/Sales % Total Shareholders Equity $m ROE % 61.3 nmf ROFE % 74.4 nmf Total Funds employed $m EFPOWA m Segments Sales CBD $m Resorts $m C-Rev & Distribution Corporate EBITDA CBD $m Resorts $m Source: Macquarie Research C-Rev & Distribution *FY11-14 are pro forma numbers Corporate Source: Company data, Macquarie Research August August

9 Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a reasonably positive view on Mantra Group. The strongest style exposure is Price Momentum, indicating this stock has had strong medium to long term returns which often persist into the future. The weakest style exposure is Quality, indicating this stock is likely to have a weaker and less stable underlying earnings stream. 53/381 Global rank in Consumer Services % of BUY recommendations 62% (5/8) Number of Price Target downgrades 0 Number of Price Target upgrades 0 Attractive Quant Local market rank Global sector rank Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. Two rankings: Local market (Australia & NZ) and Global sector (Consumer Services) Macquarie Alpha Model ranking A list of comparable companies and their Macquarie Alpha model score (higher is better). Factors driving the Alpha Model For the comparable firms this chart shows the key underlying styles and their contribution to the current overall Alpha score. Corporate Travel Manageme 1.3 Corporate Travel Manageme 0.9 Marriott International 0.9 Marriott International Hilton Worldwide Holdings 0.4 Hilton Worldwide Holdings Starwood Hotels & Resorts 0.4 Starwood Hotels & Resorts Flight Centre Travel Grou -0.2 Flight Centre Travel Grou Wynn Resorts -1.9 Wynn Resorts % -80% -60% -40% -20% 0% 20% 40% 60% 80% 100% Valuations Growth Profitability Earnings Momentum Price Momentum Quality Macquarie Earnings Sentiment Indicator The Macquarie Sentiment Indicator is an enhanced earnings revisions signal that favours analysts who have more timely and higher conviction revisions. Current score shown below. Drivers of Stock Return Breakdown of 1 year total return (local currency) into returns from dividends, changes in forward earnings estimates and the resulting change in earnings multiple. Corporate Travel Manageme Marriott International Hilton Worldwide Holdings Starwood Hotels & Resorts Flight Centre Travel Grou Wynn Resorts Corporate Travel Manageme Marriott International Hilton Worldwide Holdings Starwood Hotels & Resorts Flight Centre Travel Grou Wynn Resorts % -40% 10% 60% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return How it looks on the Alpha model A more granular view of the underlying style scores that drive the alpha (higher is better) and the percentile rank relative to the sector and market. Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score Percentile relative to sector(/381) Percentile relative to market(/414) Source (all charts): FactSet, Thomson Reuters, and Macquarie Research. For more details on the Macquarie Alpha model or for more customised analysis and screens, please contact the Macquarie Global Quantitative/Custom Products Group (cpg@macquarie.com) 7 August

10 Important disclosures: Recommendation definitions Macquarie - Australia/New Zealand Outperform return >3% in excess of benchmark return Neutral return within 3% of benchmark return Underperform return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield Macquarie Asia/Europe Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie First South - South Africa Outperform expected return >+10% Neutral expected return from -10% to +10% Underperform expected return <-10% Macquarie - Canada Outperform return >5% in excess of benchmark return Neutral return within 5% of benchmark return Underperform return >5% below benchmark return Macquarie - USA Outperform (Buy) return >5% in excess of Russell 3000 index return Neutral (Hold) return within 5% of Russell 3000 index return Underperform (Sell) return >5% below Russell 3000 index return Volatility index definition* This is calculated from the volatility of historical price movements. Very high highest risk Stock should be expected to move up or down % in a year investors should be aware this stock is highly speculative. High stock should be expected to move up or down at least 40 60% in a year investors should be aware this stock could be speculative. Medium stock should be expected to move up or down at least 30 40% in a year. Low medium stock should be expected to move up or down at least 25 30% in a year. Low stock should be expected to move up or down at least 15 25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only Recommendations 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations Financial definitions All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards). Recommendation proportions For quarter ending 30 June 2015 AU/NZ Asia RSA USA CA EUR Outperform 46.23% 58.36% 47.27% 44.20% 60.65% 43.01% (for US coverage by MCUSA, 9.68% of stocks followed are investment banking clients) Neutral 37.67% 25.65% 29.09% 49.29% 34.19% 40.93% (for US coverage by MCUSA, 5.53% of stocks followed are investment banking clients) Underperform 16.10% 15.99% 23.64% 6.52% 5.16% 16.06% (for US coverage by MCUSA, 1.38% of stocks followed are investment banking clients) MTR AU vs Small Ordinaries, & rec history (all figures in AUD currency unless noted) Note: Recommendation timeline if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period. Source: FactSet, Macquarie Research, August month target price methodology MTR AU: A$4.08 based on a DCF methodology Company-specific disclosures: MTR AU: MACQUARIE EQUITIES LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 24 months, for which it received compensation. MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 24 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 04-May-2015 MTR AU Outperform A$ Apr-2015 MTR AU Outperform A$ Feb-2015 MTR AU Outperform A$ Feb-2015 MTR AU Outperform A$ Oct-2014 MTR AU Outperform A$ Aug-2014 MTR AU Outperform A$ Aug-2014 MTR AU Outperform A$2.46 Target price risk disclosures: MTR AU: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. Analyst certification: The views expressed in this research reflect the personal views of the analyst(s) about the subject securities or issuers and no part of the compensation of the analyst(s) was, is, or will be directly or indirectly related to the inclusion of specific recommendations or views in this research. The analyst principally responsible for the preparation of this research receives compensation based on overall revenues of Macquarie Group Ltd (ABN , AFSL No ) ( MGL ) and its related entities (the Macquarie Group ) and has taken reasonable care to achieve and maintain independence and objectivity in making any recommendations. 7 August

11 General disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN , AFSL No ) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN , AFSL No ) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN , AFSL No ) ( MBL ) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return and delete the document. We do not guarantee the integrity of any s or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at 7 August