Woolworths. Incommunicado A$30.71 AUSTRALIA. Event. Impact. Earnings and target price revision. Price catalyst. Action and recommendation

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1 AUSTRALIA WOW AU Price (at CLOSE#, 27 Feb 2015) Underperform A$30.71 Valuation A$ Sum of Parts month target A$ month TSR % Volatility Index Low GICS sector Food & Staples Retailing Market cap A$m 38, day avg turnover A$m Number shares on issue m 1,263 Investment fundamentals Year end 30 Jun 2014A 2015E 2016E 2017E Revenue m 60,773 62,261 65,227 68,204 EBIT m 3,775 3,835 3,952 4,197 Reported profit m 2,452 2,388 2,538 2,689 Adjusted profit m 2,452 2,492 2,538 2,689 Gross cashflow m 3,455 3,526 3,633 3,853 CFPS CFPS growth % PGCFPS x PGCFPS rel x EPS adj EPS adj growth % PER adj x PER rel x Total DPS Total div yield % Franking % ROA % ROE % EV/EBITDA x Net debt/equity % P/BV x WOW AU vs ASX 100, & 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, February 2015 (all figures in AUD unless noted) 27 February 2015 Macquarie Securities (Australia) Limited Incommunicado Event WOW announced a major F&L investment program, driving a downgrade to FY15 guidance towards the low end of the +1.8% to +6.6% analyst forecast range (previously +4% to +7%, MRE downgrade from + to +1.6%), after being on track to meet guidance without this investment. This follows poor December and January performance, a review of the Supermarket business and the resignation of Tjeerd Jegen (MD, Australian Supermarkets & Petrol). Impact F&L investment strategy to address price perception directly by lowering prices over the coming months as well as investing in all aspects of the customer offer. The only quantification provided was a $500m investment of prospective above store cost savings largely generated from Mercury Two. We are surprised that WOW continued to expand margins in 1H15, as the competitive environment necessitates CODB savings to be reinvested in price. We downgrade 2H15e F&L EBIT margins to 7.7% (-30bps YoY) and expect FY16 margins (7.9%) to remain 10-15bps below pcp. The Coles and supermarket results reflect underperformance vs. Coles and ALDI. The slowdown in WOW F&L comps (+1.2% in 2Q15 vs. 2.1% in 1Q15) relative to the stable Coles F&L profile (+ in 2Q15 vs. 4.3% in 1Q15) highlights WOW s underperformance by a greater margin than the market expected. Coles sales and margin performance also indicates that UK-type structural risks remain unlikely in our view. While many investors will draw direct read throughs to the UK following this announcement, we continue to highlight the fundamental differences in market structure and drivers of operational performance. ALDI remains a headwind to Coles and, gradually taking share. Measures taken by to impact Coles: While little detail is known around the scale of the investment and how this will be deployed, WOW s actions will have a direct impact on Coles operating performance. We expect Coles will respond with increased investment. Home Improvement and General Merchandise also disappoint. While the focus was firmly on F&L, Masters and BIG W continue to underperform peers and remain a drag on group profitability. Earnings and target price revision EPS FY15e -1.9%, FY16e -5.4%, FY17e -. Target Price: -7.4% to $32.94 Price catalyst 12-month price target: A$32.94 based on a Sum of Parts methodology. Catalyst: Strategy day May 6 Action and recommendation WOW has embarked on an investment strategy which is either not fully formed or is unable to be quantified at this time. As a result, with no detail communicated to the market (beyond platitudes) detailing how this will be achieved, we downgrade to Underperform from Outperform. The WOW share price will not outperform until a detailed strategy is clearly communicated to the market in our view. This will not be provided for ten weeks, until the strategy day on 6 May. Please refer to page 7 for important disclosures and analyst certification, or on our website

2 Macquarie Wealth Management Fig 1 WOW 1H15 result The good The not-so-good The interesting F&L investment drives a downgrade to FY15 guidance towards the low end of the +1.8% to +6.6% analyst forecast range (previously +4% to +7%, MRE downgrade from + to +1.6%), after being on track to meet guidance without this investment. This follows poor December and January performance, a review of the Supermarket business and the resignation of Tjeerd Jegen. Management turnover: While Tjeerd Jegen s resignation is not surprising given the underperformance of F&L, we would have preferred a high quality external replacement with direct experience managing supermarkets rather than weakening the Liquor and NZ management ranks. Not delivering on promotional sales plans in both the 1Q15 and 2Q15 periods reflects poor execution across the Supermarkets management team. Deteriorating F&L disclosure at a crucial time: From FY15 WOW will not be splitting out Food & Liquor EBIT and EBIT margin from Petrol. This reduction in disclosure is unacceptable in our view, given the volatility in the petrol division. Home improvement EBIT loss of $103.2m, 60.2% greater than the pcp. The $112.2m loss in Masters was 56.1% worse than the $71.9m loss in the pcp. Big W EBIT of $109.7m, -9.0% vs. pcp. While this was above our $81m forecast with the 27bps decline in EBIT margin to 4.64% much better than expected given the operating deleverage, 1H15 in line: WOW reported a 1H15 NPAT of $1,384m, +4.7% on the pcp and 1.2% higher than our $1,367m forecast. A 67cps interim dividend was declared for the half year, up 3.1% on the pcp and in line with our 66.4cps forecast. WOW was on track to meet 4% to 7% guidance, excluding investment program. While little consolation given the severe share price response to the cut in guidance and continued sales underperformance, the improvement in CODB more than offsetting lower F&L gross margins reflects the efficiency gains still available to WOW management in order to fund price investment. Taking action in F&L: While the magnitude of the underperformance of supermarkets exceeded market expectations, and the communication of the strategy was poor, at least WOW management has addressed the issue and can begin improving operational performance. Increasing capex spend on store refurbishments ex home improvement ($173m in 1H15 vs. $138m in 1H14) indicates WOW has invested in the quality of the network Refurbishments to increase significantly over the balance of FY15 and FY16 which will have a direct effect on comparable sales. Across the WOW group there were 209 store refurbishments. As home improvement capex (new stores and refurb) declined in line with store growth ($18m in 1H15 vs. $49m in 1H14) Source: Company data, Macquarie Research, February 2015 Big W Comp sales were poor, with - 6.5% in 2Q15, below 1Q15 (-4.1%), as well as 2Q15 comp sales reported by Kmart (+3.4%) and flat growth reported by Target. BIG W Transformation quantified. WOW has raised a $148m (pre tax) provision below the line "to accelerate the alignment of our inventory to our customer strategy" which can be translated to writing down hard goods inventory in BIG W as ranging is realigned towards soft goods. Management expect BIG W to see profit growth in FY16 Cash flow impacted by closing inventory levels well above targeted levels, as sales did not meet expectations. Tobacco elasticity: Despite the 15% tobacco excise, WOW comps ex Tobacco were above their reported comp growth, with volume declines offsetting price rises. We are surprised at the magnitude of the volume response. Greater sales productivity impact from new stores than refurbishments: WOW claims new stores remain highly productive, resulting in better sales productivity outcomes than refurbishments. This indicates cannibalisation is not yet a major concern for management. Store roll out appears untouched by F&L review. Management expects store roll out to be on the high side of the FY15 target. Given the major operational review is underway, we are surprised that the store roll-out plan is not impacted. This indicates network rationalisation is unlikely to be a component of the review into supermarkets. Margin an outcome not an input as management highlighted that their focus is entirely on winning the customer and that margin will be a result. 27 February

3 Dec-04 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Sep-04 Mar-05 Sep-05 Mar-06 Sep-06 Mar-07 Sep-07 Mar-08 Sep-08 Mar-09 Sep-09 Mar-10 Sep-10 Mar-11 Sep-11 Mar-12 Sep-12 Mar-13 Sep-13 Mar-14 Sep-14 Macquarie Wealth Management Divisional analysis Fig 2 Aus Food, Liquor & petrol (~86.1% 1H15 EBIT) Fig 3 FLP EBIT margin expands a further 43bps Australia Food, Liquor & Petrol 1H14 2H14 FY14 1H15 % Chg Food & Liquor sales $m 21, , , , % Liquor sales $m 4, , , ,200.0 Petrol sales $m 3, , , , % Other revenue $m 25, , , , % Total sales $m % CODB $m -23, , , , % EBITDA $m 2, , , , % D&A $m % EBIT $m 1, , , , % F&L sales growth % 4.8% 0.8% 2.8% 3.4% -146 Liquor sales growth % 5.3% 2.8% -26 Petrol sales growth % 8.0% -9.8% EBIT margin % 7.00% 6.91% 6.96% 7.43% 43 Sales ($m) Petrol sales EBIT Margin (%) Food & Liquor sales 30, % 8.0% EBIT margin 6.4% 6.4% 6.7% 6.5% 6.8% 6.9% 7.0% 6.9% 6.7% 6.5% 7.0% 25, % 20,000 15,000 10,000 5, % 5.1% 5.7% 5.3% 1H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 3.0% 1.0% Fig 4 F&L comp sales continue to diverge Fig 5 F&L deflation moderates to 1.6% % Change 1 8.0% WOW Food & Liquor Comparables Coles Food & Liquor Comparables % Change % ABS Food Inflation WOW food Inflation (standard shelf price) Coles food & Liquor Inflation (avg. prices) WOW food & liquor Inflation (avg. prices) - 3.5% -0.9% -1.6% 1.2% - - Fig 6 Home Improvement (~-4.7% 1H15 EBIT) Fig 7 Masters sales/store continues to slide Home Improvement 1H14 2H14 FY14 1H15 % Chg Masters Sales $m % Sales growth % 49.5% 34.9% 42.2% 28.4% n/a Masters EBIT $m % Masters EBIT Margin % -18.3% -29.0% -23.4% -22.2% -393 bps Masters Store Numbers # % Sales/store (annualised) $m % EBIT/store (annualised) $m % Change Masters 1Q14 2Q14 3Q14 4Q14* 1Q15 2Q15 QoQ. YoY. Sales $m % 26.5% Store numbers # % 34.2% Avg. # of stores # % Avg. Sales/store $m % -8.9% Sales/store (annual) $m % -8.9% H, T and H Sales $m % Sales growth % 7.8% 10.7% 9.2% 19.8% n/a H, T and H EBIT $m H, T and H EBIT Margin % 1.9% -0.1% 0.9% 1.9% 0 bps H, T and H Store Numbers # % Sales/store (annualised) $m % EBIT/store (annualised) $m % *4Q14 represents a 12 week period while the other quarters are 13 weeks Fig 8 Masters EBIT losses expand in 1H15 Fig 9 Danks sales/store impacted by acquisitions $m/store Masters Sales/store (annualised) (LHS) EBIT Margin (%) Masters EBIT/store (annualised) (LHS) Masters EBIT Margin (RHS) % -32.9% -29.0% % -22.2% H13 2H13 1H14 2H14 1H15 $m/store Danks Sales/store (annualised) (LHS) EBIT Margin (%) Danks EBIT/store (annualised) (LHS) Danks EBIT Margin (RHS) 8.0% 7.0% % % 1.9% 1.9% 3.0% % -0.1% % 1H13 2H13 1H14 2H14 1H15 27 February

4 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Macquarie Wealth Management Divisional analysis continued Fig 10 NZ Supermarkets (~7.0% 1H15 EBIT) Fig 11 EBIT margin expands a further 9bps NZ Supermarkets 1H14 2H14 FY14 1H15 % Chg Sales (AUD) A$m 2,665 2,520 5,186 2, % Implied Exchange Rate % Sales (NZD) NZ$m 3,020 2,717 5,737 3, % Sales Growth % 2.6% -3.1% -0.2% 1.1% -146 bps Cost of sales NZ$m 2,800 2,521 5,321 2, % EBITDA NZ$m % EBITDA Margin % 7.3% 7.2% 7.3% 7.3% 0 bps D&A $m % EBIT NZ$m % EBIT Margin % 5.4% 5.4% 5.4% 5.5% 9 bps Total EBIT (post interco) A$m % Food inflation (shelf price index) % 0.1% 1.3% 0.7% 0.3% 20 bps Store Number # % Sales/store (yeat) NZ$m % Cost/store (year) NZ$m % EBIT/store (year) NZ$m % Sales/store ($m) Sales/store (annualised) (LHS) EBIT Margin (%) 38.0 EBIT Margin (RHS) % % 5.2% 5.5% 5.4% 5.4% 5.5% % 4.6% % 4.3% 4.3% 4.3% 4.5% % % 3.6% 3.5% 22.0 Fig 12 General Merchandise (~ 1H15 EBIT) Fig 13 Big W the clear underperformer H07 2H07 1H08 2H08 1H09 2H09 1H10 2H10 1H11 2H11 1H12 2H12 1H13 2H13 1H14 2H14 1H15 3.0% General Merchandise 1H14 2H14 FY14 1H15 % Chg Sales $m 2,452 1,900 4,352 2, % Sales Growth % 0.2% -1.9% -0.7% -3.5% -375 bps Cost of sales $m 2,280 1,825 4,105 2, % EBITDA $m % EBITDA Margin % 7.0% 5.7% 6.6% -36 bps D&A $m % EBIT $m % EBIT margin % 4.9% 1.7% 3.5% 4.6% -28 bps Price deflation % 4.1% 3.1% 3.6% 3.5% -60 bps Store Number # % Sales/store (year) $m % Cost/store (year) $m % EBIT/store (year) $m % Growth (%) % -1-1 Kmart comparable sales BIG W comparable sales Target comparable sales 3.40% -6.50% Fig 14 Hotels (~6.6% 1H15 EBIT) Fig 15 Hotel EBIT margins steady Hotels 1H14 2H14 FY14 1H15 % Chg Sales $m , % Sales Growth % 3.8% -3.6% 0.2% -0.7% -455 bps Cost of sales $m , % EBITDA $m % EBITDA Margin % 27.6% 23.3% 25.6% 24.8% -276 bps D&A $m % EBIT $m % EBIT margin % 20.8% 16.3% 18.7% 18.5% -231 bps Hotel Number # % Sales/hotel (year) $m % Cost/hotel (year) $m % EBIT/hotel (year) $m % Sales/hotel ($m) EBIT Margin (%) Sales/hotel (annualised) (LHS) % 20.3% 20.6% 20.8% 2 EBIT margin (RHS) 19.4% % 18.3% 18.5% 18.5% % 17.9% 17.3% 16.3% 15.1% % 12.2% 1H15 2H14 1H14 2H13 1H13 2H12 1H12 2H11 1H11 2H10 1H10 2H09 1H09 2H08 1H08 2H07 1H % February

5 Macquarie Wealth Management Limited Price: $30.71 Group P&L FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Revenue A$m 57,063 59,564 61,195 32,680 30,014 62,694 34,198 31,468 65,665 68,640 Cost of Sales A$m -42,602-43,781-45,132-24,088-22,243-46,308-25,237-23,369-48,605-50,860 Gross Profit A$m 14,461 15,783 16,063 8,592 7,771 16,386 8,961 8,099 17,060 17,780 CODB A$m -10,226-11,164-11,292-5,928-5,558-11,510-6,246-5,761-12,007-12,425 EBITDA A$m 4,236 4,619 4,772 2,664 2,213 4,877 2,715 2,338 5,053 5,355 D&A A$m , ,100-1,158 EBIT A$m 3,352 3,653 3,775 2,129 1,706 3,835 2,164 1,788 3,952 4,197 Interest expense A$m Minorities A$m Tax A$m , , ,085-1,155 Underlying NPAT A$m 2,183 2,354 2,452 1,384 1,108 2,492 1,390 1,148 2,538 2,689 Non-recurring items (after tax) A$m Reported NPAT A$m 1,817 2,259 2,452 1,280 1,108 2,388 1,390 1,148 2,538 2,689 Key ratios FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Adjusted EPS cps DPS cps FCFPS cps PER x EV/EBITDA x EV/EBIT x EV/Sales x Dividend Yield % Payout ratio % Sales grow th % EBITDA grow th % Underlying NPAT growth % EPS grow th % Cost of Sales / Revenue % CODB / Revenue % Gross Profit Margin % EBITDA margin % EBIT margin % NPAT margin % ROA % ROE % Australian Food and Liquor FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Supermarket sales A$m 30,949 32,831 33,771 18,000 16,516 34,516 18,478 17,041 35,519 36,714 Liquor sales A$m 6,600 7,200 7,400 4,200 3,496 7,696 4,410 3,671 8,081 8,485 Revenue A$m 37,549 40,031 41,171 22,200 20,012 42,212 22,888 20,712 43,600 45,199 EBITDA A$m 3,339 3,604 3,827 2,140 1,801 3,941 2,119 1,903 4,022 4,216 D&A A$m EBIT A$m 2,817 3,062 3,279 1,845 1,541 3,386 1,831 1,616 3,447 3,618 F&L Price grow th % F&L Volume grow th (ex space gr% F&L Comp growth % F&L Contribution from Space grow% F&L Sales growth % EBITDA margin % EBIT margin % Supermarket sqm (est) sqm 2,034,506 2,110,932 2,206,361 2,253,517 2,272,552 2,272,552 2,321,123 2,340,728 2,340,728 2,410,950 Supermarkets (number) # ,001 1,001 1,026 sqm per supermarket sqm 2,304 2,325 2,342 2,355 2,328 2,328 2,348 2,338 2,338 2,350 Supermarket sales per sqm A$ 15,212 15,553 15,306 7,988 7,267 15,188 7,961 7,280 15,174 15,228 Supermarket space grow th % Supermarket productivity grow th % Liquor sqm (est) sqm 354, , , , , , , , , ,327 Liquor stores (number) # 1,313 1,355 1,402 1,426 1,434 1,434 1,450 1,466 1,466 1,498 sqm per Liquor store sqm Liquor sales per sqm A$ 18,643 19,233 18,946 10,619 8,751 19,264 10,958 8,988 19,786 20,331 Liquor space grow th % Liquor productivity grow th % Convenience FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Revenue A$m 6,714 6,794 7,065 3,306 3,321 6,627 3,502 3,518 7,020 7,426 EBITDA A$m EBIT A$m NZ Supermarkets (AUD) FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Revenue A$m 4,302 4,600 5,186 2,790 2,635 5,424 2,931 2,644 5,575 5,476 EBITDA A$m EBIT A$m Home Improvement FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Masters Revenue A$m Danks Revenue A$m Total Revenue A$m EBITDA A$m EBIT A$m BIG W FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Revenue A$m 4,180 4,383 4,352 2,365 1,845 4,210 2,419 1,887 4,307 4,405 EBITDA A$m EBIT A$m Cash Flow FY12A FY13A FY14A 1HFY15 2HFY15 FY15E 1HFY16 2HFY16 FY16E FY17E Operating Cashflow AU$m 2, , , , , , , , , ,779.1 Investing Cashflow AU$m -2, , , , , , , , ,203.6 Financing Cashflow AU$m -1, , , , , ,575.5 Net increase/ (decrease) in caau$m Balance sheet FY12A FY13A FY14A FY15E FY16E FY17E Valuation Assets SOTP FY15 FY16 Cash and cash equivalents AU$m ,550 1,550 1,550 Australian Food & Liquor 37,678 38,489 Trade and other receivables AU$m ,029 1,110 1,198 New Zealand Supermarkets 3,710 3,812 Inventories AU$m 3,698 4,205 4,693 4,641 4,859 5,097 Big W 2,134 2,269 Property, plant and equipment AU$m 9,589 9,246 9,601 10,415 11,501 12,568 Home Improvement Intangibles AU$m 5,282 5,784 6,335 6,462 6,523 6,583 Hotels 2,707 2,666 Other Assets AU$m 1,309 1,197 1,728 1,802 1,802 1,802 Other Total Assets AU$m 21,581 22,250 24,205 25,899 27,345 28,798 Enterprise Value 45,667 46,115 Liabilities - Net Debt -3,998-4,131 Trade Creditors AU$m 5,242 5,390 6,006 5,513 5,772 6,054 Equity Value 41,669 41,984 Debt AU$m 4,750 4,452 4,356 5,548 5,681 5,703 Equity Value per Share Other Liabilities AU$m 5,282 5,784 6,335 6,462 6,523 6,583 Target price Total Liabilities AU$m 13,135 12,950 13,680 14,469 14,907 15,261 Capital return 7.25 Equity Dividend yield 4.44 Share Capital AU$m 4,337 4,523 4,850 5,064 5,269 5,483 Total Return Retained Earnings AU$m 4,163 4,661 5,423 5,955 6,764 7,642 EV/EBITDA at target Other AU$m PER at target price Total Equity AU$m 8,446 9,301 10,525 11,431 12,438 13,536 Div Yield at Target Price Source: Company data, Macquarie Research, February February

6 Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a strong positive view on. The strongest style exposure is Quality, indicating this stock is likely to have a superior and more stable underlying earnings stream. The weakest style exposure is Price Momentum, indicating this stock has had weak medium to long term returns which often persist into the future. 18/95 Global Alpha Model Sector Rank % of BUY recommendations 36% (4/11) Number of Price Target downgrades 0 Number of Price Target upgrades 0 Attractive Quant Rank within Country Rank within Sector Displays where the company s ranked based on the fundamental consensus Price Target and Macquarie s Quantitative Alpha model. The rankings are displayed relative to the sector and country. 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. Wesfarmers Wesfarmers Treasury Wine Estates 0.4 Treasury Wine Estates Coca-Cola Amatil Metcash J Sainsbury Tesco Coca-Cola Amatil Metcash J Sainsbury Tesco % -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. Wesfarmers Treasury Wine Estates Coca-Cola Amatil Metcash J Sainsbury Tesco Wesfarmers Treasury Wine Estates Coca-Cola Amatil Metcash J Sainsbury Tesco % -50% -30% -10% 10% 30% 50% 70% Dividend Return Multiple Return Earnings Outlook 1Yr Total Return What drove this Company in the last 5 years Which factor score has had the greatest correlation with the company s returns over the last 5 years. Price to Book NTM Incremental Capex Price to Book FY1 Price to Book LTM Merton Score FCF Yield FY0 Working Capital Inc. Profit Margin FY1-25% -26% -27% -23% Negatives Positives -30% -20% -10% 0% 10% 20% 30% 26% 25% 23% 27% 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 country. Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score Percentile relative to sector(/95) Percentile relative to country(/241) 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) 27 February

7 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 31 December 2014 AU/NZ Asia RSA USA CA EUR Outperform 51.80% 58.06% 45.07% 44.42% 60.54% 46.81% (for US coverage by MCUSA, 5.29% of stocks followed are investment banking clients) Neutral 31.80% 27.37% 30.99% 50.10% 35.37% 33.51% (for US coverage by MCUSA, 3.08% of stocks followed are investment banking clients) Underperform 16.39% 14.57% 23.94% 5.48% 4.08% 19.68% (for US coverage by MCUSA, 0.44% of stocks followed are investment banking clients) WOW AU vs ASX 100, & 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, February month target price methodology WOW AU: A$32.94 based on a Sum of Parts methodology Company-specific disclosures: WOW AU: Macquarie Group Limited or one of its affiliates is currently providing non securities services to Ltd for which it expects to receive or intends to seek compensation. Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Limited's equity securities. Important disclosure information regarding the subject companies covered in this report is available at Date Stock Code (BBG code) Recommendation Target Price 06-Feb-2015 WOW AU Outperform A$ Nov-2014 WOW AU Outperform A$ Sep-2014 WOW AU Underperform A$ Aug-2014 WOW AU Underperform A$ Apr-2014 WOW AU Underperform A$ Feb-2014 WOW AU Underperform A$ Feb-2014 WOW AU Outperform A$ Jan-2014 WOW AU Outperform A$ Oct-2013 WOW AU Outperform A$ Jul-2013 WOW AU Outperform A$ Mar-2013 WOW AU Outperform A$ Aug-2012 WOW AU Outperform A$ Aug-2012 WOW AU Outperform A$ May-2012 WOW AU Outperform A$30.67 Target price risk disclosures: WOW 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. 27 February

8 Macquarie Wealth Management 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. 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 27 February