Genworth Mortgage Insurance Australia

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1 AUSTRALIA GMA AU Price (at 07:29, 05 Aug 2015 GMT) Outperform A$3.50 Valuation A$ - DCF (WACC 12.0%, beta 1.6, ERP 5.0%, RFR 4.5%) month target A$ month TSR % +9.2 Volatility Index Medium GICS sector Insurance Market cap A$m 2, day avg turnover A$m 6.8 Number shares on issue m Investment fundamentals Year end 31 Dec 2014A 2015E 2016E 2017E NEP m Underwriting Result m Investment Income m Reported profit m Net Op Income m EPS adj PER adj x PER rel x DPS Dividend yield % Franking % Total SH Funds m 2, , , ,432.2 BV/S ROE % ROA % P/BV x GMA 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) 6 August 2015 Macquarie Securities (Australia) Limited Genworth Mortgage Insurance Australia Supersize special surprise Event 1H15 result: GMA announced a 1H15 Special Dividend of 18.5cps (Macquarie est. 5.9cps). Underlying NPAT $132.9m was in line with expectations (Macquarie est. $128.7m, 1H14 $133.1m). Impact Capital and dividends: A 1H15 Special Dividend of 18.5cps, in addition to the 12.5cps Ordinary Dividend, was declared with further capital management initiatives possible. GMA has ~45cps to ~75cps remaining capacity to return capital via Special Dividends (or Buybacks) based on our excess CET1 capital estimate. Our CET1 excess capital estimate is based on GMA s target Total Capital range of 1.32x-1.44x PCA (giving an implied 1.16x to 1.28x CET1 target range based on the proforma capital position). The excess capital estimate is after adjusting for the Tier 2 issue and total 1H15 dividend. Asset quality was impacted by a higher delinquency rate (up +4bps to 40bps versus 36bps in 1H14) especially in QLD (+9bps) and WA (+11bps). The deterioration was somewhat offset by lower average paid claims, higher reserves per delinquency and stable cure rates (see details on the following page). We also highlight that more than half of the increase in the delinquency rate (from 36bps to 40bps) reflects a decrease in the rate of paid claims which fell from almost 900 in 1H14 to less than 600 in 1H15 as closing delinquencies increased from 5,405 in 1H14 to 5,900 in 1H15. Contract renewal: During the half, GMA announced the two year renewal of the NAB contract for the provision of LMI for the NAB Broker business. GMA has also signed a new agreement with an existing customer for <80% LVR business. Earnings and target price revision EPS changes: FY15-2.9%, FY16-6.3%, FY17-4.7%. Earnings changes reflect lower investment assumptions. Target price: from $3.51 to $3.47. Price catalyst 12-month price target: A$3.47 based on a DCF methodology. Catalyst: 3Q15 result release in late Oct/early Nov. Action and recommendation Outperform. Given the capital management initiatives demonstrated with this result we see value below ~0.95x book (~$3.65 with an implied fully franked dividend yield of more than 10% over the medium term). GMA is well placed to deliver ongoing organic capital return. Please refer to page 8 for important disclosures and analyst certification, or on our website

2 Macquarie Wealth Management Fig 1 GMA 1H15 result summary What we liked What we didn t like What we thought was interesting 18.5cps Special Dividend (Macquarie est. 5.9cps) with further capital management initiatives possible. 12.5cps Ordinary Dividend (Macquarie est. 11.9cps) with the payout ratio increased to 61.2% from 55.5% in 1H14. Total Dividends: 31cps comprising 12.5cps Ordinary and 18.5cps Special versus 2H cps, 1H14 2.8cps. Capital return flexibility is ongoing supported by capital relief from the combination of: CET1 1.46x PCA post the capital restructure and total 1H15 dividend payment. This implies ~45cps to ~75cps excess CET1 capital based on the company target Total Capital range of 1.32x-1.44x PCA (implied 1.16x to 1.28x CET1). A lower LVR mix in new business (impact -$4.1m GWP vs 1H14). Negative GWP volume growth (impact -$21.4m GWP vs 1H14). Roll off of larger origination years. Average paid claims continue to track materially lower: $49.1m 1H15 vs $54.4k 2H14, $62.9k 1H14, $75.4k 2H13, $80.9k 1H13. The decline in average paid claims is volatile on a quarterly basis with $62.5k in 1Q15 and only $36.1k in 2Q15. The number of paid claims also declined (1H15: 568, 2H14: 664, 1H14: 881, 2H13: 1,091, 1H13: 1,271). Cures: Annualised 1H15 cure rate was stable 172% (1H14 176%, 2H14 171%) as cures in 2Q15 increased versus the 1Q15. Reserve per delinquency up 3.4% to $43.1k vs $41.7k in 1H14 and compared to $46.6 at 2H14. This trend is impacted by the movement in the number of delinquent loans. Contract renewals during the half: Two year renewal to 20 November 2017 of the contract with NAB for the provision of LMI for NAB Broker business. New agreement signed with existing customer for <80% LVR business. Source: Macquarie Research, Aug 15 Primary delinquency rate deteriorated to 40bps in 1H15 from 36bps in 2H14 and 1H14: Some seasonality vs 2H14: The deterioration is partly due to seasonality, as 1H typically sees higher net new delinquencies (post Christmas and holidays). New delinquencies increased to 1,515 from 1,306 in 1H14. Resource impact: Queensland +9bps to 57bps, WA +11bps to 45bps. SA was also up +9bps to 52bps. NSW improved -3bps to 33bps vs pcp and Victoria was flat. Origination year: Delinquency rate by origination year deteriorated for all years versus 1Q15 and June Loss ratio: 22.1% (1H %, 2H %) impacted by a reduction in reserve release from Borrower sales and Mortgage in Possession cases and an increase in the number of delinquent loans. Investment return: 3.7% (1H14 4.1%, 2H %) reflecting the lower interest rate environment. Note reported versus underlying returns were impacted by pre tax mark-tomarket adjustments in 1H14 and 1H15. Average premium rate of 1.77% vs 2H %, 1H % reflects a reduction in mortgage origination above 90% LVR. Loans with LVR over 90% materially declined: 25.3% of the NIW in 1H15 versus 28.1% 2H14, 32.6% 1H14, 35.7% 2H13, 36.2% 1H13. 9% Gross Written Premium decline was impacted by: Price: -$2.7m vs 1H14 (less than 1%). Mix: -$4.1m vs 1H14. Volume: -$21.4m vs 1H14. NEP growth in 1H15 was +3.3% vs 1H14 reflecting the revenue recognition from higher volume periods and premium rate increases, predominantly the origination years. Low Doc LMI product and 95%+ LVR loans continue to decline as a % of origination, with 99.3% of New Insurance Written as Standard product. Expense ratio: 26.7% (1H %, 2H %) was stable as GMA takes actions to maintain the expense ratio between 26-28% as the GWP decline will slowly flow through to Net Earned Premiums. 3-5 month delinquencies at 46% of total delinquencies and 6-9 month delinquencies at 24% of total delinquencies are the highest level between March 2013 and June 2015 as GMA work through 10+ month delinquencies and Mortgagee in Possession cases. 6 August

3 1H14A Investment Return Investment income on PHF & SHF Unrealised gains and losses 1H14A Unrealised gains and losses 1H15A 1H15A Investment Return 1H14A Investment Return excl. Unrealised gains and losses 2H14A Investment Return excl. Unrealised gains and losses 1H15A Investment Return excl. Unrealised gains and losses Macquarie Wealth Management Investment yield The trend in the underlying investment income reflects the low yield environment. Fig 2 Investment yield performance has fallen slightly over the last 18 months $m 4,000 3,950 3,900 3,850 3,800 3,750 3,700 3,650 3,600 3, % 4.01% 3,952 3, % 3,707 1H14A 2H14A 1H15A Average investment assets Investment Yield % 4.1% 4.0% 3.9% 3.8% 3.7% 3.6% 3.5% Fig 3 Absolute Investment earnings excluding unrealised items were stable vs pcp $m Fig 4 Unrealised gains and losses were the largest reconciling items pcp $m August

4 1H10A 2H10A 1H11A 2H11A 1H12A 2H12A 1H13A 2H13A 1H14A 2H14A 1H15A Macquarie Wealth Management Expense ratio performance The expense ratio performance at 26.7% (1H %, 2H %) was stable as GMA takes actions to maintain the expense ratio between 26-28%. This cost efficiency action is important as the GWP decline will slowly flow through to Net Earned Premiums and impact the expense ratio. Given the apparent structural change between GWP and NEP we have begun to track costs vs. loans originated however we note that this is a crude metric and must be read with the following: One off IPO costs in 1H14; Cost rationalisation expense in 1H15 to improve cost efficiency given the weak GWP environment; and Increases investment in underwriting resourcing. Fig 5 Expense ratio on a NEP and GWP basis % 30% 28% 27.6% 27.6% 27.6% 27.3% 26.6% 26.3% 26.7% 26% 24% 22% 21.1% 20% 18% 18.4% 18.4% 19.4% 17.4% 18.6% 18.7% 16% 1H12A 2H12A 1H13A 2H13A 1H14A 2H14A 1H15A Expense / NEP Expense / GWP Fig 6 Expenses per loan originated Avg. Expenses per Policy $ $ $650 $ $ $500 6 August

5 1Q11A 2Q11A 3Q11A 4Q11A 1Q12A 2Q12A 3Q12A 4Q12A 1Q13A 2Q13A 3Q13A 4Q13A 1Q14A 2Q14A 3Q14A 4Q14A 1Q15A 2Q15A Macquarie Wealth Management Fig 7 Net New Delinquencies have been consistent for the last three years Net # New Delinquencies 1,200 1, % 0.08% 0.07% 0.06% 0.05% 0.04% 0.03% 0.02% 0.01% 0.00% -0.01% -0.02% Net New Delinquencies Net New Delinquencies % of RIF 6 August

6 Macquarie Wealth Management Genworth MI Australia Year ending: 31 December Market Cap: $A2,275m Profit & Loss Statement ($m) 1H14A 2H14A 1H15A 2H15E FY11A FY12A FY13A FY14A FY15E FY16E FY17E Gross Written Premium Movement in unearned premium Gross Earned Premium Reinsurance expense Net Earned Premium Net claims incurred Acquisition expenses Underwriting expenses (inc D&A) Underwriting Result Investment income on technical reserves Realised gains/losses Insurance Profit Investment income on shareholders funds Unrealised gains/losses Interest expense NPBT Tax expense Reported NPAT Significant items (after tax) Underlying NPAT Insurance ratios ($m) 1H14A 2H14A 1H15A 2H15E FY11A FY12A FY13A FY14A FY15E FY16E FY17E NIW growth 1.2% 3.2% 2.7% -9.0% -3.1% 9.7% 4.7% 2.3% -3.4% -0.9% 3.5% GWP growth 14.8% -0.9% -9.0% -11.3% 8.6% 36.8% 9.4% 6.3% -10.2% -1.7% 1.8% GEP growth 12.0% 9.0% 3.7% -0.9% -2.6% 0.5% 6.2% 10.4% 1.4% -1.4% -0.2% NEP growth 13.6% 10.5% 3.3% -1.8% 2.3% -1.3% 9.5% 12.0% 0.7% -1.3% -0.2% Claims ratio 19.6% 18.3% 22.1% 21.4% 49.6% 71.3% 32.1% 19.0% 21.7% 22.3% 22.7% Expense ratio 26.6% 26.3% 26.7% 26.9% 26.2% 27.6% 27.5% 26.5% 26.8% 27.0% 27.2% Combined Ratio 46.2% 44.7% 48.8% 48.3% 75.9% 98.9% 59.6% 45.4% 48.5% 49.3% 49.8% Underwriting margin 53.8% 55.3% 51.2% 51.7% 24.1% 1.1% 40.4% 54.6% 51.5% 50.7% 50.2% Insurance margin 66.2% 65.4% 57.2% 61.2% 39.5% 14.4% 51.3% 65.8% 59.2% 60.7% 61.2% Underlying Investment return 4.2% 4.1% 4.0% 3.8% 5.4% 5.1% 4.6% 4.3% 4.0% 3.9% 4.2% PCA multiple Holding period (Investment assets / GEP) Capital intensity (NTA / GEP) Operating metrics 1H14A 2H14A 1H15A 2H15E FY11A FY12A FY13A FY14A FY15E FY16E FY17E NIW (A$bn) Risk in Force (Value of loans, A$bn) Risk in Force (Number of loans, m) Premium rate - Flow 1.82% 1.78% 1.77% 1.74% 1.48% 1.64% 1.73% 1.80% 1.77% 1.76% 1.73% Premium rate - Total (includes portfolio) 1.82% 1.69% 1.61% 1.65% 1.29% 1.61% 1.69% 1.75% 1.63% 1.62% 1.59% Opening Delinquencies 4,980 5,405 4,953 5,900 7,062 7,874 5,851 4,980 4,953 6,028 6,066 + New Delinquencies 5,602 5,091 5,782 6,453 14,580 13,186 11,307 10,693 12,235 12,094 12,170 - Cures -4,296-4,879-4,267-5,370-12,124-11,746-9,816-9,175-9,637-10,422-10,489 - Paid Claims ,644-3,463-2,362-1,545-1,523-1,633-1,643 Closing Delinquencies 5,405 4,953 5,900 6,028 7,874 5,851 4,980 4,953 6,028 6,066 6,105 Period end delinquency rate 0.36% 0.33% 0.40% 0.40% 0.55% 0.41% 0.34% 0.33% 0.40% 0.40% 0.40% Average loan size 206, , , , , , , , , , ,645 Average paid claim 62,912 54,297 49,063 36,544 68,525 82,978 78,385 59,210 41,214 43,076 48,851 Investment fundamentals 1H14A 2H14A 1H15A 2H15E FY11A FY12A FY13A FY14A FY15E FY16E FY17E EPS (Reported) EPS (Underlying) EPS Growth 101.7% 26.1% -0.2% -10.7% na na na 25.9% -6.9% -1.8% 3.0% PER (Underlying, current share price) Book Value per share Price to Book Value (current share price) Ordinary DPS Special DPS Total dividend Yield (current share price) 1.6% 14.1% 17.7% 10.1% 0.0% 0.0% 0.0% 7.8% 13.9% 10.1% 10.4% Franking 100% 100% 100% 100% 0% 0% 0% 100% 100% 100% 100% Dividend payout ratio 14% 112% 152% 90% 0% 0% 0% 64% 122% 90% 90% Effective tax rate 30% 29% 30% 30% 31% 32% 30% 29% 30% 30% 30% Return on assets 10.5% 11.2% 7.5% 9.1% 10.0% 6.5% 6.6% 10.6% 8.2% 8.2% 7.7% Return on equity 11.7% 11.9% 10.7% 10.6% 10.3% 5.7% 10.1% 11.9% 10.7% 10.7% 10.9% Net debt to equity 5.9% 5.5% 5.7% 10.5% 6.6% 6.3% 6.2% 5.5% 10.5% 10.4% 10.2% Balance sheet ($m) 1H14A 2H14A 1H15A 2H15E FY14A FY15E FY16E FY17E Valuation ($m) Assets Sum dist cash profits 1,562 Cash Terminal value 414 Receivables Total valuation 1,976 Investments 3,834 4,071 3,806 3,890 3,870 3,890 3,953 4,032 Excess Capital 319 Intangibles Total equity value 2,295 Other assets Shares on issue 653 Total assets 4,222 4,449 4,448 4,536 4,449 4,536 4,611 4,702 Value per share 3.52 Liabilities Share price target 3.47 Unearned Premium 1,307 1,363 1,382 1,404 1,363 1,404 1,444 1,494 Capital return -0.9% Outstanding Claims Dividend yield 13.9% Payables Total Return 13.0% Borrowings Fully Franked, AT 0.17 Other liabilities P/B at Price target 0.95 Total liabilities 1,877 1,949 1,994 2,156 1,948 2,156 2,207 2,270 PER at Price Target 8.80 Total equity attributable to shareholders 2,345 2,501 2,454 2,380 2,501 2,380 2,404 2,432 Recom. Outperform Source: Company data, Macquarie Research, August 2015 Price: $ August

7 Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a reasonably positive view on Genworth Mortgage Insurance Australia. The strongest style exposure is Valuations, indicating this stock is under-priced in the market relative to its peers. The weakest style exposure is Quality, indicating this stock is likely to have a weaker and less stable underlying earnings stream. 242/668 Global rank in Banks % of BUY recommendations 86% (6/7) Number of Price Target downgrades 1 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 (Banks) 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. QBE Insurance 0.8 QBE Insurance Suncorp 0.7 Suncorp Genworth Mortgage Insuran Challenger Genworth Mortgage Insuran Challenger Insurance Australia Group -0.7 Insurance Australia Group % -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. QBE Insurance 0.0 QBE Insurance Suncorp -0.7 Suncorp Genworth Mortgage Insuran 0.0 Genworth Mortgage Insuran Challenger 0.0 Challenger Insurance Australia Group -0.7 Insurance Australia Group % -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 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(/668) 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) 6 August

8 Macquarie Wealth Management 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) GMA 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 GMA AU: A$3.70 based on a DCF methodology Company-specific disclosures: Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 26-Jun-2015 GMA AU Outperform A$ Apr-2015 GMA AU Outperform A$ Feb-2015 GMA AU Outperform A$ Feb-2015 GMA AU Neutral A$ Dec-2014 GMA AU Outperform A$ Nov-2014 GMA AU Outperform A$ Sep-2014 GMA AU Outperform A$ Jul-2014 GMA AU Outperform A$ Jun-2014 GMA AU Outperform A$3.43 Target price risk disclosures: GMA 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. 6 August

9 Macquarie Wealth Management 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 6 August