Vontobel Morning Note

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1 Vontobel Morning Note MARKET OVERVIEW Closing +/-% SMI Dow Jones NASDAQ Stoxx Hang Seng Nikkei PRE-MARKET INDEX Current +/-% SMI (LEU) MSCI EU SECTOR OVERVIEW PRICE INDEX (LOC.) Closing +/-% Pharmaceuticals Chemicals Health Care Eq Biotechnology Food & Beverage T, A & Luxury Goods Insurance Information Tech Techn., HW & Equip CURRENCIES 03:19 Ex rate +/-Rp USD/CHF EUR/CHF Tecan - Growth initiatives on track - upgrade to Buy +++ Overview 'Vontobel Morning Note' Equity Research SMI Companies Novartis: Pivotal phase III study of Afinitor in treatment of pancreatic neuroendocrine tumors met its primary endpoint Roche: Positive phase III results with CellCept in Lupus Nephritis; enrollment into phase III study with Avastin in non-hodgkin's lymphoma stopped Non-SMI Companies Tecan: Growth initiatives on track - upgrade to Buy Cosmo: Begin of enrollment into phase III trial of Rifamycin SV MMX in Traveler's Diarrhea EG Laufenburg: Had it not been for good trading results - PT CHF 800 (880), HOLD Galenica: CellCept reaches positive results in Phase III trial in Lupus Nephritis Implenia: A new lawsuit on the horizon Kuoni: Cash offer for the majority of Et-china LEM: 4Q order intake exceeds pre-crisis levels - good 4Q results slightly ahead of estimates, HOLD PT 370 (340) OC Oerlikon: Rights offering successfully concluded Sulzer: Expanding the service business - new PT 140 (old: 135) Preview Upcoming Corporate Events INT. RATES (CHF) Closing +/-bp 3-mth money mkt 10-y SWAP 1.94 % The objectivity of this report may be compromised by existing or planned business relationships between the author and the analysed companies and potential conflicts of interest arising thereof. Investors should therefore on no account use this report as the sole basis on which to make a decision. Please see the end of the document for more details on potential conflicts of interest and disclaimer information.

2 Equity Research Novartis Reuters: NOVN.VX Price: CHF 52.9 Hold PT: CHF 59.0 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Silvia Schanz +41 (0) silvia.schanz@vontobel.ch Pivotal phase III study of Afinitor in treatment of pancreatic neuroendocrine tumors met its primary endpoint A pivotal phase III trial investigating Afinitor (everolimus) plus best supportive care in the treatment of advanced pancreatic neuroendocrine tumors (NET) met its primary endpoint of showing an extension of progression free survival (PFS). The phase III study RADIANT-3 (n=410) indicates that administration of Afinitor in combination with best supportive care significantly extended PFS, or time without tumor growth in patients with advanced pancreatic neuroendocrine tumors. Full study details will be presented at the conference of the European Society of Medical Oncology, to be held in Milan, Italy, October Afinitor is already approved for treatment of advanced renal cell carcinoma (RCC) in the US and EU. The recent data could form the basis for approval of the drug in pancreatic NET. The phase III data of Afinitor in pancreatic NET is good news for Novartis and comes as expected. We carry peak sales of CHF 550 mn for RCC and CHF 300 for NET. We maintain our HOLD rating and the PT of CHF Vontobel Research

3 Roche Reuters: ROG.VX Price: CHF 163 Buy PT: CHF 210 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Silvia Schanz +41 (0) silvia.schanz@vontobel.ch Positive phase III results with CellCept in Lupus Nephritis; enrollment into phase III study with Avastin in non-hodgkin's lymphoma stopped Roche and Galenica reached positive results with CellCept in the treatment of Lupus Nephritis (LN). The study had successfully reached its primary endpoint. Following the recommendation of an independent Data and Safety Monitoring Board (DSMB), Roche has stopped enrollment into a phase III study investigating Avasting in treating diffuse large-b-cell lymphoma. - CellCept in lupus: The phase III study demonstrated superiority of CellCept (mycophenolate mofetil) versus azathiprine (AZA) in delaying treatment failure in patients with lupus nephritis. Details will be presented at an upcoming medical meeting, June 24-27, Data might be used to seek regulatory approval in the US, Europe and other major market. CellCept is already approved for prevention of transplant rejection, where the patent has expired in the US. - Avastin in non-hodgkin's lymphoma: Enrollment into the phase III MAIN trial was stopped based on a recent safety and efficacy analysis for the first 720 patients, indicating an unfavorable risk-benefit assessment of the addition of Avastin to standard of care treatment Rituxan/MabThera plus CHOP chemotherapy. Positive phase III results for CellCept are good news for Roche. If successful, CellCept could be the first new drug to be approved for lupus in fifty years. Stop of enrollment of Avastin in treatment of large B-cell-lymphoma will not impact our CHF 9 bn peak sales estimates for Avastin. We confirm our BUY rating and PT of CHF Vontobel Research

4 Tecan Reuters: TECN.S Price: CHF 66.5 Buy PT: CHF 90.0 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Christoph Gubler +41 (0) christoph.gubler@vontobel.ch Growth initiatives on track - upgrade to Buy A number of promising growth initiatives have the potential to boost sales growth rates up to the mid-teen level beyond While spending on these initiatives will impact profitability in , we believe that Tecan's core business is developing positively enough to compensate for this extra spending. Accelerated sales growth could lift EBIT margins by up to 400 bp. Our estimates revisions result in EPS changes of 2%, 10%, 11% and 18%. The share price has dropped 20% from its April peak. We lift our PT to CHF 90 (from CHF 80) per share and upgrade the stock to Buy (from Hold). Growth initiatives to push sales growth: We believe Tecan has the potential to push sales growth rates to up to the mid-teens level through growth initiatives like 1) the development of innovative workflow solutions, 2) the establishment of new OEM contracts, 3) an increase of the share of its consumables and service business, and 4) an expansion of the global footprint into emerging markets. Volume growth and efficiency gains set to boost profitability: We expect Tecan's EBIT margin to improve by up to 400 bp (excluding new investments) over the coming years with 200 bp to come from volume growth, 50 bp from mix effects, 50 bp from the termination of project Inspire, 80 bp from the termination of project Ginseng, and 40 bp from the solution for Sample Management. Valuation leaves 40% upside potential: Tecan is trading at 2011E P/E and EV/EBITDA multiples of 12x and 7x, 10%-15% below Swiss and international peers and 20% below the shares' April high. Our DCF analysis yields a fair value of CHF 110 per share. Based on our E EPS CAGR estimate of 14%, we apply a 2011E P/E target multiple of 16x, increase our PT to CHF 90 (from CHF 80) per share and upgrade the stock to Buy (Hold). 4 Vontobel Research

5 Cosmo Reuters: COPN.S Price: CHF 19.2 Hold PT: CHF 20.0 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Silvia Schanz +41 (0) silvia.schanz@vontobel.ch Begin of enrollment into phase III trial of Rifamycin SV MMX in Traveler's Diarrhea Cosmo's US partner Santarus announced the begin of enrollment into the first phase III study, evaluating safety and efficacy of Rifamycin SV MMX in the treatment of Traveler's Diarrhea. Rifamycin SV MMX is being developed for Traveler's Diarrhea (TD) and potentially other indications with an infectious component in the colon. The start of enrollment into the first phase III trial was scheduled to coincidence with the peak summer travel season. Study centers are localized in Mexico and Guatemala % of all international travelers (approx. 10 mn) are affected by TD per year. The phase III trial evaluates safety and efficacy of Rifamycin SV MMX 400 mg (2 times 200 mg) oral tablets taken twice daily (800 mg total daily dose) in TD patients for three days versus placebo. Primary endpoint of the study will be time to last unformed stool (TLUS), goal is to demonstrate superiority versus placebo. Rifamycin SV is a broad spectrum antibiotic that has been used for more than 20 years in Europe for treatment of bacterial infections. Data seen so far indicate that the drug has a good safety profile. Commencement of Rifamycin phase III is inline with our expectations (2Q10). Since the treatment duration is short and limited to the summer travel season, we anticipate that data could be ready in only a few months. Next clinical catalyst for Cosmo will be EU phase III results from Budesonide MMX, expected in June We confirm our HOLD rating and the PT of CHF Vontobel Research

6 EG Laufenburg Reuters: EGL.S Price: CHF 724 Hold PT: CHF 800 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Source: Vontobel Equity Research Andreas Escher +41 (0) andreas.escher@vontobel.ch Had it not been for good trading results - PT CHF 800 (880), HOLD 1H09/10 numbers were primarily in line with VontE. Following publication of interim results, we revise our EPS 09/10E estimate upwards 7% to CHF 39.8 and forecast EPS 10/11E at CHF 78.2 (-5%). Consequently and applying lower P/E, EV/EBITDA and P/B sector multiples, we lower our price target to CHF 800 from CHF 880. Gross margin came in 4% below previous year at CHF mn (VontE 420), which is clearly a positive as higher procurement costs (Bugey, CHF 2 mn per month) and negative impacts from the Gazprom gas contract are included. On the other hand, the surprisingly strong trading results of CHF 181 mn (VontE 120) compensated for the downsides and led to a good contribution to the Energy Trading & Origination segment proving the success of the hub strategy. Going forward, we do not include any further settlement costs in 2H. In terms of the TAP, up to the present stage EUR 42 mn (EGL share 42%, CHF 25 mn) have so far been activated. According to our information, the main shareholder did not increase its holding, hence free float remains at 9%. On the basis of our reduced FY10/11 estimates and applying sector multiples as well as a traditional 30% discount due to the unpredictable contribution from trading, we calculate a fair value of CHF 805. Hence, we lower our PT to CHF 800 (880) and reiterate our HOLD rating. 6 Vontobel Research

7 Galenica Reuters: GALN.S Price: CHF 406 Buy PT: CHF 500 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Christoph Gubler +41 (0) christoph.gubler@vontobel.ch CellCept reaches positive results in Phase III trial in Lupus Nephritis Galenica and Roche today announced that the maintenance phase of the Aspreva Lupus Management Study (ALMS) has successfully achieved its primary endpoint demonstrating the superiority of Roche's CellCept versus azathioprine (AZA) in delaying treatment failure in patients with Lupus Nephritis (LN). In total, 227 patients participated in ALMS for up to three years, with 116 receiving CellCept and 111 receiving AZA. The primary efficacy parameter, which showed CellCept to be superior to AZA with p=0.003, was time to treatment failure, comprising death, serious renal damage or relapse of LN. In light of these positive topline results, and assuming the final results are consistent, Galenica and Roche are assessing the potential to seek regulatory approval in major markets for the use of CellCept in the treatment of LN. CellCept is approved to prevent heart, liver, and kidney transplant rejection. Based on clinical trials conducted by Aspreva, CellCept is used off-label against lupus, a chronic auto-immune disease that causes the body to attack its own tissues and joints. Azathioprine (AZA) is a drug that suppresses the immune system. AZA is produced by a number of generic manufacturers and as branded names (Azasan by Salix in the US, Imuran by GSK in Canada and the US, etc). We estimate that CellCept royalties for Galenica will amount to CHF 205 mn in 2010 and CHF 63 mn in 2011 and fall to zero thereafter (due to patent expiry of CellCept for transplant rejection). Regulatory approval for CellCept to treat LN could obviously lead to additional royalties for Galenica in future. However, we believe it would take at least two years, likely more, until CellCept would be approved for LN. For the time being, we do not change our estimates. Buy, PT CHF Vontobel Research

8 Implenia Reuters: IMPN.S Price: CHF 29.0 Hold PT: CHF 33.0 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Source: Vontobel Equity Research Serge Rotzer +41 (0) serge.rotzer@vontobel.ch A new lawsuit on the horizon The City of Zurich yesterday announced that 2/3 of the roof girders of the Letzigrund stadium, which was built by Implenia, are damaged. According to the city, Implenia will have to take over the costs for the load tests and the necessary renovation. Costs will run into the millions, but Implenia refuses to accept responsibility and a new lawsuit therefore appears likely. Furthermore, there are still outstanding debts of around CHF 20 mn (VtE) which Implenia now will claim for. Implenia told us that it never denied that there are certain deficiencies, but the dead weight capacity was never at risk and that no major renovations are necessary. Implenia will present 3 experts who will testify to this. As Implenia will now enter into a lawsuit, current costs will probably be activated and should so far not impact the P&L. It is a tricky affair, but in our view Implenia's chances are not that bad as: 1.) the damages might be not that severe as it will be fixed by the city within only 1.5 months, 2.) the matter involves a political element and, as the responsibility has recently changed, a "big bath" effect might still be possible and 3.) we understand that Implenia has the more credible experts. Nevertheless, the issue will burden the company with uncertainty and a lawsuit could easily take one to two years. As we leave our forecast unchanged, we reiterate our HOLD rating and PT of CHF Vontobel Research

9 Kuoni Reuters: KUNN.S Price: CHF 325 Hold PT: CHF 440 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Source: Vontobel Equity Research J. Bertschy jean-philippe.bertschy@vontobel.ch Cash offer for the majority of Et-china One year after the acquisition of 32% stake of Et-china.com, Kuoni announced last night that it has made a proposal to acquire the rest of the issued and to be issued shares in the Chinese company listed in London (since August 2007). The cash offer of CHF 1.95 per share values Et-china at CHF 95 mn. Kuoni will finance the transaction from existing cash resources. The transaction is expected to close in the third quarter of Et-china reported turnover of CHF 303 mn, and gross profit of CHF 34 mn last year. The company has about 1,600 employees and operates through 160 retail outlets. Management has always made it clear that it wanted to take over the majority of Et-china. The acquisition has significant strategic potential in terms of geographic footprint, given the company's strong market position and customer base in Southern China. This move will significantly increase Kuoni's presence in the region where it will be a major player. In terms of sales, Et-china represents 7.5% of our estimated 2010E group sales (or 40% of Asian's sales) and 4% of gross profit. The overall acquisition price paid by Kuoni, including the price paid for the stake it already owns, amounts to CHF 82 mn (first offer for the 32% stake amounted to CHF 9 mn, the Et-china share price was roughly at the current level - GBPp 35 vs GBPp 42 per share yesterday after closing). We expect the offer to go through, given the price offered by Kuoni (GBPp 115 per share), which we consider fair. The announced offer was expected and, in our view, makes a lot of sense. After the successful Indian story of the late 90s, Et-china may well prove to be Kuoni's next successful growth story. The Chinese market has huge potential with high growth rates and is expected to become the world's number one tourist destination and the fourth biggest tourist exporter by In view of Et-china's low profitability as well as the expected low financing costs, the impact on our EPS estimates is expected to be marginal. We rate the stock a Hold. 9 Vontobel Research

10 LEM Reuters: LEHN.S Price: CHF 350 Hold PT: CHF 370 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Source: Vontobel Equity Research Andreas Escher +41 (0) andreas.escher@vontobel.ch 4Q order intake exceeds pre-crisis levels - good 4Q results slightly ahead of estimates, HOLD PT 370 (340) FY09/10 results were published preliminarily yesterday afternoon. LEM exceeded its own guidance with sales of CHF mn (+21% QoQ, guidance , VontE 179) and a pro-forma EBIT of CHF 25.8 mn (+32% 3Q vs 4Q, FY guidance 25, VontE 25.5). Liabilities of the stock option plan amounted to CHF 8.3 mn (VontE -7.3) and resulted in a group net result of CHF 10.5 mn (VontE 10.8). A dividend of CHF 20 (CHF 5 plus CHF 15 extraordinary) is proposed (yield: high 5.5%). Additionally, the BoD intends to launch a share buyback program worth CHF 15 mn over the next 2 years. The high growth momentum continued in 4Q: orders received soared to CHF 78.3 mn (+43%, VontE 65), implying a record book-to-bill ratio of a high 1.34 (3Q: 1.14). The gross margin amounted to 43.3% for FY09/10, hence, although QoQ the GPM declined to 42.7% in 4Q (3Q: 45.2%) the result indicates that the early implemented measures bear fruits. As to the regions, China was the main highlight with sales +41% YoY. Both segments enjoyed 21% QoQ sales growth: Industrials (92% of group sales): main drivers for growth were renewables, electric motor drives and traction. Profitability increased 130 bp to 18.2% reaching pre-crisis levels. Automotive: Starting with a weak 1Q, top line improved continuously and remained stable YoY and pro-forma EBIT has reached break-even level. As the value content per electrical/hybrid vehicles is increasing compared to conventional cars, we assume that the positive trend in the segment will continue and current projects are expected to turn into sales shortly. Excellent 4Q results and the strong order intake are whetting investors' appetite. The announced share buy back program will certainly support the share price. Assuming CHF 350 per share, the program amounts to 4% of outstanding shares. Further, we welcome the expected reduction of volatility given the changes in the stock option plan. Following the results, we increased EPS10E +5% and leave EPS11E unchanged. Applying historical EV/EBITDA (excluding SOP) and peer multiples, we increase our new PT to CHF 370 up from 340 while reiterating our HOLD recommendation. 10 Vontobel Research

11 LEHN (mn CHF) Jul-Sep Oct-Dec Jan-Mar Apr-Mar 2Q09 3Q09 4Q09A 4Q09E GAP FY09A FY09E GAP QoQ YoY ORDERS RECEIVED - Industrial segment % % 45% 18% - Automotive segment % % 21% 11% - LEM group % % 43% 17% - book-to-bill ratio SALES - Industrial segment % % 21% -6% - Automotive segment % % 21% -1% - LEM group % % 21% -6% GROSS MARGIN 43.0% 45.2% 42.7% 44.9% 43.4% 44.0% OPERATIONAL PRO-FORMA EBIT - Industrial segment % % 31% -14% - margin 14.8% 16.9% 18.2% 19.5% 15.7% 16.0% - Automotive segment % % -100% -47% - margin -14.7% -2.6% 0.0% 4.9% -6.8% -5.6% - LEM group % % 32% -12% - margin 12.5% 15.4% 16.8% 18.4% 13.9% 14.3% STOCK OPTION PLAN (SOP) % % 113% -280% REPORTED EBIT % % 8% -48% - margin 11.6% 13.7% 12.1% 14.7% 9.4% 10.1% GROUP NET PROFIT % % 24% -56% 11 Vontobel Research

12 OC Oerlikon Reuters: OERL.VX Price: CHF 5.66 Hold PT: CHF 5.80 EPS JCF Cons. EPS P / E NM NM NM 21.1 EV / EBITDA 6.3 NM P / B Div. Yield (%) Source: Vontobel Equity Research Michael Foeth +41 (0) michael.foeth@vontobel.ch Rights offering successfully concluded The trading of rights to participate in the upcoming capital increase of OC Oerlikon ended yesterday at noon. Close to 100% of the rights were exercised by existing shareholders. With this outcome, lending banks will cancel CHF 125 mn of debt and will swap another CHF 150 mn of debt into equity in a second capital increase against issuance of shares. The number of shares to be issued amounts to mn. The total equity raised in this refinancing plan amounts to CHF 1.3 bn, resulting in an estimated equity at the end of FY10 of CHF 1.6 bn or a book value per share of CHF 5.8 per share. With 100% of the rights being taken up by shareholders, the old credit facility is replaced with two new facilities in the amount of CHF 580 mn and CHF 474 mn, respectively, resulting in total new debt of CHF 1'054 mn on the balance sheet and an estimated net debt at the end of FY10 of CHF 629 mn. Although the order intake reported by Oerlikon for 1Q10 was encouraging and the profitability showed improvements, the company is still restructuring and the positive trends need to be confirmed. The shares trade at 0.9x P/B 11E and at a P/E 11E of 21.1x. Only when looking into 2012 does the valuation start to look more attractive. We thus stick to our Hold rating at this point and adjust our PT to CHF 5.8 to adjust for the new number of shares. 12 Vontobel Research

13 Sulzer Reuters: SUN.S Price: CHF 99.0 Buy PT: CHF 140 EPS JCF Cons. EPS P / E EV / EBITDA P / B Div. Yield (%) Source: Vontobel Equity Research Fabian Haecki +41 (0) fabian.haecki@vontobel.ch Expanding the service business - new PT 140 (old: 135) Following the acquisition of Dowding & Mills we have adjusted our EPS estimates by 4% in 10E, 8% in 11E and 12E. Sulzer announced yesterday the cash offer for Castle Support Services plc, the sole owner of Dowding & Mills. The offer is supported and recommended by the Board of Directors of Castle Support Services. The total offer price is GBP mn (CHF 217 mn). The business will be integrated into Sulzer Turbo Services (TS). The company has 1,400 employees and generated in FY09 CHF 213 mn revenues at a margin of 13.8%. Sulzer has already received irrevocable undertakings of 94% of shares outstanding which makes a succesfull offer very probable. Reasons why we like the deal: - Inexpensive valuation multiples: On 2009 figures, Sulzer paid 7.5x EV/EBIT, 1.0x EV/Sales and 10.6x P/E - Debt free company after the divestment of the calibration business - High op. margins of 13.8% last year which is slightly above that of Sulzer Turbo Services - Signficant customer synergies - Geographic leverage - complementary service offering We regard Sulzer's offer as an smart move to expand its Turbo Services business and to increase the overall service content of the group which lowers the strong cyclicality of the equipment business. The acquisition multiples appear inexpensive and the service business for electromechanical equipment structurally attractive as reflected in the strong margins. Following the recommended announcement of the offer, we have increased our EPS estimates by 8% in 11E/12E and increase our PT from CHF 135 to CHF 140. Buy. 13 Vontobel Research

14 Preview NOVARTIS (IN USD) Event Sales chng (%) EBIT chng (%) Net Prof chng (%) ASCO NA NA NA NA NA NA American Society of Clinical Oncologists in Chicago: data from Tasigna, Sprycel and denosumab ROCHE (IN CHF) Event Sales chng (%) EBIT chng (%) Net Prof chng (%) ASCO NA NA NA NA NA NA American Society of Clinical Oncologists: data on Avastin, Rituxan, pertuzumab, T-DM1 14 Vontobel Research

15 Upcoming Corporate Events DATE COMPANY EVENT TOPIC Novartis SY ASCO Roche SY ASCO Hermès AGM Nationale Suisse AGM ARYZTA PR 9M 09/10 results Burckhardt Compression AR FY 09 results Kardex OTH Investors day Novartis SY FDA Advisory Committee Flughafen Zurich PR Traffic Figures Mai Swiss Re AM Investor Day London Oridion AGM 15 Vontobel Research

16 Disclaimer 1. Analyst declaration This Vontobel Report has been produced by the organizational unit responsible for investment research (Research unit, sell-side analysis) of Bank Vontobel AG, Gotthardstrasse 43, CH-8022 Zurich, Tel +41 (0) Bank Vontobel AG is subject to supervision by the Swiss Financial Market Supervisory Authority (FINMA), Schwanengasse 12, Bern, The authors of the individual articles confirm that this report gives a complete and precise reflection of their opinion of the analysed companies and that they have neither directly nor indirectly received compensation for their assessment or opinion. The compensation of the authors of this report is not directly related to the investment banking volume generated between Vontobel Group and the analysed companies. The authors of this document own securities in the analysed companies: Kuoni This document was not submitted to the analysed companies before publication or distribution. 2. 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The producer and distributors of this financial analysis point out the following potential conflicts of interests: The producer and its associated companies will or are attempting to generate investment banking business with the analysed companies within the next three months, conduct transactions with securities of the analysed companies from time to time, have participated in capital market transactions/the issue of securities of the analysed companies in the last 12 month: none, have been active as Market Maker in equities of the analysed companies in the last 12 months: none, have provided other publicly known Investment Banking services for companies mentioned in this report in the last 12 months: none, have received compensation for products and services outside Investment Banking from analysed companies: none, hold more than 5 % of the voting rights of the analysed companies: none, does not have executives who are members of the board of the analysed company and the analysed company does not have executives who are members of the board of Bank Vontobel AG or affiliated companies, have no significant financial interest in the analysed companies and have reached no agreement with the analysed companies regarding this financial analysis. 3. Research rating history The rating history of the companies analyzed in the Morning Note can be found on the Vontobel Research Information System (RIS) or in the respective company report. 4. Global rating distribution (beginning of each quarter) VT research universe VT research universe Share of VT IB clients in rating category No. As % As % Buy 42 25% 43% Hold % 27% Reduce 12 7% 17% The table above is revised at the beginning of each quarter, i.e. it currently reflects the status as at 30th September Methodology / Rating system Bank Vontobel s financial analysts apply a variety of valuation methodologies (e.g. DCF and EVA modelling, 'sumof-the-parts', break-up and event-related analysis, peer group and market multiple comparisons) to their own financial projections for the companies they cover. Overall, our investment recommendations take into consideration an assessment of the company in its entirety and of the sector to which it belongs ("bottom-up approach"). Price target calculation is based on a number of factors, observations and assumptions, including but not limited to: key business performance indicators and ratios, public and private valuation multiples, comparison with one or more peer groups of comparable companies, overall equity market valuations, and with the company's own history and track record. The stock recommendations published by Vontobel s research team are defined as follows: Rating Large cap Buy Hold Reduce Mid & small cap Buy Hold Reduce Definition SLI Index (inc. tolerance) / non-swiss stocks of similar market capitalisation Price target (when set) implies 10% or more upside on a 12-month horizon Price target (when set) implies 0-10% upside on a 12-month horizon Price target (when set) implies downside on a 12-month horizon Other Swiss stocks / non-swiss stocks of similar market capitalisation Price target (when set) implies 15% or more upside on a 12-month horizon Price target (when set) implies 0-15% upside on a 12-month horizon Price target (when set) implies downside on a 12-month horizon Analysts are required to review their recommendations under the following conditions: Buy: When upside to price target falls below 5% (all caps). Hold: When upside to price target reaches or exceeds 15% for large caps or 20% for mid & small cap; when downside to price target reaches or exceeds 5% (all caps). Reduce: When upside to price target reaches or exceeds 5% (all caps). We reserve the right to waive repeated changes of recommendation during periods of unusually high equity market or specific stock price volatility. 16 Vontobel Research

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All such communications and the activity to which they relate are available only to such investment professionals; any activity arising from such communications will only be engaged in with investment professionals. Persons who do not have professional experience in matters relating to investments should not rely upon such communications. Any contact with analysts, brokers or other employees of Bank Vontobel AG must be directed with Bank Vontobel AG directly and not through offices or employees of Vontobel Group affiliates in London/UK. Information for clients in Germany Vontobel Securities AG, WDR-Arkaden, Auf der Ruhr 2, Köln (regulatory authority: Federal Financial Supervisory Authority, Graurheindorfer Strasse 108, Bonn) is the distributor for institutional clients. The Munich branch of Bank Vontobel Österreich AG, Möhlstrasse 9, Munich (regulatory authority: Federal Financial Supervisory Authority, Graurheindorfer Strasse 108, Bonn) is the distributor for private clients. 17 Vontobel Research