Holiday mood kicks in. Investor Calendar:

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1 Equity Equity Research - Friday, December 21, 2012 Baltic Indices Sep 7-Oct 22-Oct 6-Nov 21-Nov 6-Dec 21-Dec Baltic Benchmark OMX Riga Index value OMX Tallinn OMX Vilnius Source: Bloomberg, Swedbank YTD OMX Tallinn % 36.5% OMX Riga % 5.2% OMX Vilnius % 17.9% OMX Baltic Bench % 25.3% OMX Baltic % 20.9% S&P 500 1, % 14.8% STOXX Europe % 14.5% STOXX EU Enlarged % 19.7% RTS 1, % 9.4% Source: Bloomberg The next Equity will be published on January 4 Top company and macro news Tallink: A loan of EUR 440m received Olainfarm: Ukrainian sales lead to another monthly high Ukio Bankas: Cooperation ended with S&P and signed with Newsec/Re&Solution Holiday mood kicks in 2012 s last full trading week offered little of interest. OMX Tallinn was steady throughout the week. There was some selling pressure during the first half of the week but, in general, volumes fell significantly relative to early December. The trend has generally been positive and recent weeks have brought several surprises. Although a few more trading days remain this year, OMXT closed its last full weekly of trading at -0.38% w/w. Olympic has been one of the most stable names and it has had a great run. This week was no exception, with the stock trading at more than EUR 1.70, and it remains of interest to institutional investors. Tallink had the highest volume (0.7m), while its share price fell to EUR (-1.7% w/w). Next week, OMXT will only be open for two days and we expect low activity. Top gainers: Last Close ( ) Ekspress Grupp % City Service % Baltika % Harju Elekter % Silvano Fashion Group % Top losers: Last Close ( ) Grigiskes % Klaipedos Nafta % SAF Tehnika % Rokishkio Suris % Arco Vara % Most active: Last Close ( ) Silvano Fashion Group % Tallink % Ventspils Nafta % Olympic Entertainment Group % Rokishkio Suris % Turnover ( th) ,163 Source: Bloomberg Turnover ( th) Source: Bloomberg Turnover ( th) 1, Source: Bloomberg Market turnover was significantly higher in Riga this week, reaching EUR 1.41m. Most of the turnover came from Ventpils Nafta, where two block trades which were crossed at LVL Latvijas Balzams share price dropped by 21%, to LVL 1.55, as investors reacted negatively to the news of the price levels set during the auction of the shares held by Latvijas Krajbanka. The main event in Riga this week was the December 18 auction of the securities portfolios of insolvent Latvijas Krajbanka s clients. In total, 31 Latvian stocks were offered in this auction. The biggest positions were in Latvijas Balzams, Latvijas Gaze, Ventpils nafta, Grindeks, Liepajas Metalurgs and Latvian Shipping Company. Ventspils Nafta's, Grindeks and Latvian Shipping Company's share prices in the auction were close to the market Investor Calendar: Date Issuer/Country Description Period Dec Estonia, Latvia, Lithuania Trading holiday 28 Dec Lithuania Retail trade (y/y) November 28 Dec Lithuania Consumer Confidence Indicator December 31 Dec - 1 Jan Estonia, Latvia, Lithuania Trading holiday 1-12 Jan Estonia Unemployment December 2 Jan Baltika Sales December 3 Jan Estonia Retail trade (y/y) November 3 Jan Latvia Retail trade (m/m) November 3 Jan Latvia Industrial output (y/y) November 4 Jan Estonia Industrial output (y/y) November Attention: Please note important background and customer information at the end of this report Source: Nasdaq OMX, Bloomberg Equity Research Swedbank AS, Large Corporates & Institutions Page 1 of 9

2 price. Liepajas Metalurgs's price was slightly above the market price, while Latvijas Gaze was sold at a discount of 4% to 8% to the market price and Latvijas Balzams s share price was set at a discount of 18% to 39%. The Vilnius Stock Exchange experienced fairly high trading activity this week, generating total of EUR 1.56 million in turnover, although the benchmark OMX Vilnius index closed only marginally higher at , which is relatively flat w/w. The mystery buyer behind the previous week s large block trade in Panevezio Statybos Trestas was revealed this week the investment fund manager Firebird Management acquired 936,052 shares, corresponding to 5.73% of company s total voting rights. PTR1L closed the week at EUR 0.93, which is -1% above last Friday s closing price. The Lithuanian telco TEO had another stellar week, with its share price rising by 2.3% to close at EUR 0.755, generating the highest volume amongst benchmark peers (EUR 222,500). Ukio Bankas generated the second-largest turnover among Lithuanian companies with 1.73 million shares changing hands to close the week 0.88% lower at EUR However, the majority of the volume was due to a single block trade of 1.45 million shares. Linas Agro successfully completed the voluntary share buyback: a total of 798,000 shares were purchased by the company at the price of EUR Market participants offered an astonishing 9.9 million shares. Macro developments Annual Lithuanian GDP growth increased to 4.4% in Q3. This was export driven, as consumption and investment growth are gradually decreasing. Companies have ceased cutting their inventories. However, investments shrank due to domestic and global uncertainties. Export growth accelerated to 33% in October, partly because of crop exports. Negative growth in the eurozone had a somewhat limited effect, as Lithuanian exports to the faster-growing Baltic and CIS countries have been increasing. Average annual inflation decreased to 3.1% in November. However, we expect some additional inflationary pressures in Company News Company & expected share impact Positive Neutral Negative Tallink: A loan of EUR 440m received On December 20, Tallink announced that it had taken a new loan of EUR 440m, financed by seven banks, including Nordea Bank Finland, DVB Bank, Danske Bank, KfW IPEX Bank, Swedbank, Skandinaviska Enskilda Banken and HSH Nordbank. The loan has a floating interest rate and will mature in five years. All of the new debt was used to prepay four previously taken loans and to repay the deferred installments that were agreed in December 2009 to reduce the debt payments from Tallink will record a EUR 3.2m financial expense in Q4 to reflect the arrangement fees that were to be amortized until the maturities of the prepaid loans. Tallink Recommendation: Strong Buy Target Price: 1.0 Price: 0.86 Analyst: Marek Randma Tel: We estimate that the largest part of the new debt was used to prepay the remaining part of the EUR 350m debt that Silja took in 2006 to repay its existing loans before it was acquired by Tallink and that was set to mature at the end of We estimate that the other three prepaid loans had later maturities and were taken to finance three new vessels in the middle of the last decade. According to Tallink, its debt repayments for will be EUR 106m annually and EUR 136m for As Tallink s repayment schedule until 2021 includes other loans worth roughly EUR 400m, we estimate that the new loan s repayment will be highest in The new schedule is similar to our previous expectations, which included dividend Attention: Please note important background and customer information at the end of this report Equity Research Swedbank AS, Large Corporates & Institutions Page 2 of 9

3 payments of EUR 0.03 per share starting from next year. Dividend expenses, including income tax, would total EUR 24m, according to our calculations, which the company would be able to finance from free cash flow. We leave our dividend expectation unchanged and calculate the dividend yield at 3.2% at yesterday s closing price. We maintain our target price at EUR 1 and reiterate our Strong Buy recommendation. On December 20, Tallink announced that it had taken a new loan of EUR 440m, financed by seven banks, including Nordea Bank Finland, DVB Bank, Danske Bank, KfW IPEX Bank, Swedbank, Skandinaviska Enskilda Banken and HSH Nordbank. The loan has a floating interest rate and will mature in five years. All of the new debt was used to prepay four previously taken loans and to repay the deferred installments that were agreed in December 2009 to reduce the debt payments from Tallink will record a EUR 3.2m financial expense in Q4 to reflect the arrangement fees that were to be amortized until the maturities of the prepaid loans. We estimate that the largest part of the new debt was used to prepay the remaining part of the EUR 350m debt that Silja took in 2006 to repay its existing loans before it was acquired by Tallink and that was set to mature at the end of We estimate that the other three prepaid loans had later maturities and were taken to finance three new vessels in the middle of the last decade. According to Tallink, its debt repayments for will be EUR 106m annually and EUR 136m for As Tallink s repayment schedule until 2021 includes other loans worth roughly EUR 400m, we estimate that the new loan s repayment will be highest in The new schedule is similar to our previous expectations, which included dividend payments of EUR 0.03 per share starting from next year. Dividend expenses, including income tax, would total EUR 24m, according to our calculations, which the company would be able to finance from free cash flow. We leave our dividend expectation unchanged and calculate the dividend yield at 3.2% at yesterday s closing price. We maintain our target price at EUR 1 and reiterate our Strong Buy recommendation. Olainfarm: Ukrainian sales lead to another monthly high Olainfarm released its November sales figure on December 17. The figure rose by 95% y/y, to a record LVL 6.04m. For the first time since September 2011, revenues from the Ukraine were greater than those from Russia, with the former representing half of Olainfarm s consolidated sales. The company suggested that this is due to a delay in the renewal of registrations for 2013 in the Ukraine, which led to extra shipments to the country before the end of the year. Olainfarm s preliminary calculations indicate that the value of the extra deliveries in November was LVL 1.9m, or roughly two thirds of the company s total deliveries to the Ukraine. However, Q1 2013e sales to Ukraine should be below average for the same reason. Olainfarm Recommendation: Buy Target Price: 5.85 Price: 5.2 Analyst: Marek Randma Tel: Shipments to other countries were closer to average. Sales to Russia, typically Olainfarm s largest market, were LVL 1.4m, compared to the LVL 1.5m average for the preceding ten months. Larger shipments were also made to Taiwan and Canada, where Olainfarm sold R-(-)-3-Hinuklidonol chemicals and Memantine API, which were ranked just outside the company s top 10 products in the company s Q3 presentation. We make slight adjustments to our 2012 estimates, raising revenues to LVL 51.8m and EBITDA to LVL 13.4m. We expect Olainfarm to grow consolidated sales by 13% Attention: Please note important background and customer information at the end of this report Equity Research Swedbank AS, Large Corporates & Institutions Page 3 of 9

4 in However, we also believe profitability will weaken slightly next year, as raw material and personnel cost inflation are likely to lower the company s gross margin. We estimate that the company is trading at a 2013e P/E of just 6.4x and a 2013e EV/EBITDA of 4.8x, and we expect the company to yield 3.7% in next year s dividends. We raise our target price to LVL 4.1 (LVL 4.0), but we lower our recommendation to Buy (Strong Buy) given the recent share price appreciation. Ukio Bankas: Cooperation ended with S&P; signed with Newsec/Re&Solution On November 20, Ukio Bankas announced that as it has no plans to access the international capital markets in the near future, it had decided to withdraw its ratings from rating agency Standard & Poor s. The bank also expected this move to help to reduce its operating costs. Prior to the withdrawal of the rating, Standard & Poor s Rating Services affirmed Ukio s B long-term and B short-term issuer credit ratings, with a stable outlook. Furthermore, Ukio Bankas announced that it had signed a cooperation agreement with the company Newsec/Re&Solution, which provides financial and real estate consultation. Through this agreement, Ukio hopes to accelerate the realization of the newly added real estate project, the Zalgirio sporto arena, which holds land and real estate projects in central Vilnius. Ukio Bankas took over the company from several of its debtors to avoid possible future loan impairments. The Zalgirio sporto arena was claimed to be worth LTL 357m in the stock-exchange announcement. Newsec/Re&Solution operates in Northern Europe and provides a wide range of services in the following fields: intermediation in large and medium investment transactions involving real estate, real property management, project development and implementation, and intermediation in leasing and selling commercial and residential properties. The company carries out professional market research and provides licensed property valuation services. Ukio Bankas Recommendation: No Reco Target Price: No Reco Price: 0.11 Analyst: Märt Kroodo Tel: As the Zalgirio sporto area is inherently different from Ukio Bankas s core business activities and as it is large relative to the bank itself (it is more than two times larger than Ukio Bankas s current market capitalization), it would require a separate analysis. However, based on available information, it is impossible to provide a fair opinion of the asset. We therefore have No Recommendation on Ukio Bankas. Attention: Please note important background and customer information at the end of this report Equity Research Swedbank AS, Large Corporates & Institutions Page 4 of 9

5 Baltic Equity Trading Statistics Last* Avg. Daily Bloomberg Price Upside/ M.Cap, Free float Return Turnover 52w Name ticker GICS Sector/ Sub-Industry Country ( ) Target ( ) Dow nside Reco. meur (FF) 1w 1m 6m YTD 52w th Volatility Apranga APG1L LH Apparel Retail LT % Buy % 1% 2% 18% 46% 48% 36 29% Arco Vara ARC1T ET Diversified Real Estate Activi EE % -2% -10% -33% -25% -28% 9 76% Baltika BLT1T ET Apparel, Accessories & Luxury EE % Neutral 19 60% 3% -1% 43% 81% 75% 7 56% City Service CTS1L LH Environmental & Facilities Ser LT % Strong Buy 58 30% 3% 6% -1% -6% -1% 12 28% Ekspress Grupp EEG1T ET Publishing EE % Strong Buy 32 26% 4% 6% 2% 4% 6% 7 44% Grindeks GRD1R LR Pharmaceuticals LV % Buy 65 39% -1% 9% 9% 10% 12% 11 40% Grigiskes GRG1L LH Paper Products LT % -3% 4% 3% 18% 18% 2 31% Harju Elekter HAE1T ET Electrical Components & Equipm EE % Strong Buy 45 43% 2% 4% 10% 14% 17% 6 Invalda IVL1L LH Multi-Sector Holdings LT % 0% -4% -24% 0% 4% 20 34% Klaipedos Nafta KNF1L LH Oil & Gas Storage & Transporta LT % -3% -3% -13% -8% -9% 4 26% Lietuvos Dujos LDJ1L LH Gas Utilities LT % 0% -2% 1% -7% -6% 7 20% LESTO LES1L LH Electric Utilities LT % -1% 0% 5% 8% 9% 17 29% Linas Agro Group LNA1L LH Agricultural Products LT % Strong Buy 91 34% -1% -1% 12% 41% 40% 29 33% Latvian Shipping Company LSC1R LR Oil & Gas Storage & Transporta LV % 1% 4% -4% -22% -20% 1 Merko Ehitus MRK1T ET Construction & Engineering EE % Neutral % -1% -2% -8% 8% 5% 25 41% Nordecon International NCN1T ET Construction & Engineering EE % Buy 36 37% 1% 0% 4% 31% 28% 9 33% Olympic Entertainment Group OEG1T ET Casinos & Gaming EE % Strong Buy % -1% 9% 34% 74% 68% % Olainfarm OLF1R LR Pharmaceuticals LV % Buy 74 23% 1% 17% 26% 49% 53% 25 32% Premia Foods PRF1T ET Packaged Foods & Meats EE % Buy 24 34% -2% -1% 1% 11% 16% 2 44% Pieno Zvaigzdes PZV1L LH Packaged Foods & Meats LT % -1% -4% 0% 4% 7% 3 Panevezio Statybos Trestas PTR1L LH Construction & Engineering LT % 1% 3% -14% -15% -19% 20 35% Rokishkio Suris RSU1L LH Packaged Foods & Meats LT % -2% -3% 3% 8% 12% 11 Siauliu Bankas SAB1L LH Diversified Banks LT % Buy 55 0% 0% 1% -6% -5% -3% 5 26% SAF Tehnika SAF1R LR Communications Equipment LV % -2% -3% 6% -19% -20% 4 48% Silvano Fashion Group SFG1T ET Apparel Retail EE % Neutral % 2% -8% -23% -12% -13% % Zemaitijos Pienas ZMP1L LH Packaged Foods & Meats LT % -1% 0% -5% -11% -12% 5 Tallink TAL1T ET Marine EE % Strong Buy % -2% 15% 39% 49% 49% % TEO LT TEO1L LH Integrated Telecommunication S LT % Buy % 1% 7% 19% 26% 25% 25 14% Tallinna Kaubamaja TKM1T ET Food Retail EE % Buy % 1% -1% -3% 12% 11% 35 27% Tallinna Vesi TVEAT ET Water Utilities EE % Buy % 0% -1% 25% 47% 46% 82 20% Ukio Bankas UKB1L LH Diversified Banks LT 0.11 No Reco No Reco 39 37% 1% -6% -32% -35% -31% 17 37% Ventspils Nafta VNF1R LR Oil & Gas Storage & Transporta LV % 1% -3% 1% -12% -12% 26 35% AVERAGE 17% % 0% 1% 3% 11% 12% % MEDIAN 15% % 0% -1% 1% 8% 8% % *Date for prices: 21 detsember :25 Source: Swedbank LC&I, Bloomberg Equity Research Swedbank AS, Large Corporates & Institutions Page 5 of 9

6 Baltic Equity Fundamentals Bloomberg EV P/E P/E P/BV P/BV P/S P/S EV/ EV/ Div. Gross Operating Debt to Name ticker meur P/E 2012F 2013F P/BV 2012F 2013F 2012F 2013F EBITDA Sales ROE ROA DPS Yield margin margin equity Apranga APG1L LH % 19% % 6% 6% 47% 11% 55% Arco Vara ARC1T ET % -5% 2% -2% 103% Baltika BLT1T ET % -6% 54% -2% 307% City Service CTS1L LH % 8% % 4% 8% 20% 5% 98% Ekspress Grupp EEG1T ET % 3% 3% 22% 7% 112% Grindeks GRD1R LR % 6% 2% 57% 9% 34% Grigiskes GRG1L LH % 7% % 17% 6% 94% Harju Elekter HAE1T ET % 7% % 3% 3% 17% 4% 31% Invalda IVL1L LH % 14% 10% 39% Klaipedos Nafta KNF1L LH % 10% % 43% 38% 0% Lietuvos Dujos LDJ1L LH % 3% % 19% 5% 0% LESTO LES1L LH % -1% % -3% 12% Linas Agro Group LNA1L LH % 12% % 5% 2% 7% 10% 175% Latvian Shipping Company LSC1R LR % -11% 14% 4% 134% Merko Ehitus MRK1T ET % -2% 1% 2% 0% 95% Nordecon International NCN1T ET % 2% 5% 2% 279% Olympic Entertainment Group OEG1T ET % 21% % 7% 6% 98% 19% 42% Olainfarm OLF1R LR % 20% % 4% 4% 53% 22% 41% Premia Foods PRF1T ET % -2% % 2% 2% 27% -1% 59% Pieno Zvaigzdes PZV1L LH % 6% % 18% 4% 82% Panevezio Statybos Trestas PTR1L LH % -2% 6% 0% 15% Rokishkio Suris RSU1L LH % 7% % 11% 5% 25% Siauliu Bankas SAB1L LH % 1% SAF Tehnika SAF1R LR % 5% % 25% 4% 0% Silvano Fashion Group SFG1T ET % 31% % 9% 9% 60% 14% 54% Zemaitijos Pienas ZMP1L LH % 9% 18% 4% 33% Tallink TAL1T ET % 3% 3% 4% 42% 33% 156% TEO LT TEO1L LH % 14% % 8% 8% 77% 23% 9% Tallinna Kaubamaja TKM1T ET % 8% % 16% 6% 97% Tallinna Vesi TVEAT ET % 12% % 8% 6% 60% 54% 151% Ukio Bankas UKB1L LH % -2% Ventspils Nafta VNF1R LR % -6% 16% 6% 0% AVERAGE % 6% 0.2 6% 5% 4% 30% 10% 78% MEDIAN % 6% 0.1 6% 5% 4% 20% 6% 55% Div. Yield 2012F Div. Yield 2013F Source: Swedbank LC&I, Bloomberg Equity Research Swedbank AS, Large Corporates & Institutions Page 6 of 9

7 Swedbank Equity research & institutional sales Head of Equities Industrials Technology Katja Keitaanniemi Finland Anders Roslund Sweden Harald Hornes Oyen Norw ay Mattias Kindstedt Sw eden Andreas Daag Sweden Håkan Wranne Sw eden mattias.kindstedt@swedbank.se andreas.daag@swedbank.se hakan.wranne@swedbank.se Runar Meland Norw ay Erik Folkeson (Shipping) Norway Pekka Rouhiainen Finland rm@swedbank.no efj@swedbank.no pekka.rouhiainen@swedbank.fi Erkki Vesola Finland Sven Sköld Sw eden Head of Equity Research erkki.veso la@swedbank.fi sven.skold@swedbank.se Are Martin Berntzen Norw ay Fredrik Nilhov Sweden amb@swedbank.no fredrik.nilho v@swedbank.se Head of Sales Katja Keitaanniemi Finland Henning C. Steffenrud (Fish Farming) Norway Andres Suimets Estonia katja.keitaanniemi@swedbank.fi hs@swedbank.no andres.suimets@swedbank.ee Marek Randma Baltic Håkan Wranne Sweden Johan Gustafsson Sw eden marek.randma@swedbank.ee hakan.wranne@swedbank.se johan.gustafsso n@swedbank.se Mattias Kindstedt Sw eden Marek Randma Estonia Katja Keitaanniemi Finland mattias.kindstedt@swedbank.se marek.randma@swedbank.ee katja.keitaanniemi@swedbank.fi Marko Zivkovic Sweden Runar Meland Norw ay Strategy marko.zivko vic@swedbank.se rm@swedbank.no Vidar Strat Norw ay Mats Liss Sweden vidar.strat@swedbank.no mats.liss@swedbank.se Institutional Sales Baltic Thomas Jellvik Sw eden Niclas Höglund Sweden Andres Suimets Estonia tho mas.jellvikl@swedbank.se niclas.hoglund@swedbank.se andres.suimets@swedbank.ee Andreas Bertheussen Norw ay Ola Södermark Sweden Marius Ignotas Lithuania andber@swedbank.no ola.so dermark@swedbank.se M arius.igno tas@swedbank.lt Jerker Söderström Sw eden Petri Karhunkoski Finland Jānis Spriņģis Latvia jerker.so derstrom@swedbank.se petri.karhunko ski@swedbank.fi Janis.Springis@swedbank.lv Johannes Bjerner Sw eden Stig Erik Kyrkjeeide (Cruise) Norway johannes.bjerner@swedbank.se sek@swedbank.no Institutional Sales Finland Robert Liljequist Finland Sven Sköld Sweden Jukka-Pekka Eilittä Finland robert.liliequist@swedbank.fi sven.sko ld@swedbank.se jukka-pekka.eilitta@swedbank.fi Tomi Tiilola Finland Lauri Siponen Finland Small Cap to mi.tiilola@swedbank.fi lauri.sipo nen@swedbank.fi David Andreasson Sw eden Peter Sandlund Finland david.andreasso n@swedbank.se peter.sandlund@swedbank.fi Pekka Rouhiainen Finland Financials pekka.rouhiainen@swedbank.fi Andreas Daag (Real Estate) Sweden Institutional Sales Sweden Petri Karhunkoski Finland andreas.daag@swedbank.se Andrew Barrie Sw eden petri.karhunko ski@swedbank.fi Bengt Kirkøen (Bank) Norway andrew.barrie@swedbank.se bk@swedbank.no Dennis Karlsson Sw eden Consumer Eivind Tønnesen Norway dennis.karlsson@swedbank.se Christian Anderson Sw eden et@swedbank.no Fredrik Sundberg Sw eden Christian.A nderso n@swedank.se Knut Olav Klokk (Real Estate) Norway fredrik.sundberg@swedbank.se Fredrik Nilhov Sw eden knuklo@swedbank.no Henrik Palmborg Sw eden fredrik.nilhov@swedbank.se Märt Kroodo Estonia henrik.palmbo rg@swedbank.se Einar Strømstad Norw ay Johan Gustafsson Sw eden e@swedbank.no Niclas Höglund (Investment Comp.) Sweden johan.gustafsso n@swedbank.se Marek Randma Estonia niclas.hoglund@swedbank.se Mikael Forssbeck Sw eden marek.randma@swedbank.ee Petri Karhunkoski (Real Estate) Finland mikael.forssbeck@swedbank.se Mats Liss Sw eden petri.karhunko ski@swedbank.fi Mikael Pålsson Sw eden mats.liss@swedbank.se Sven Sköld Sweden mikael.palsso n@swedbank.se Niclas Höglund Sw eden sven.sko ld@swedbank.se Patrik Ingevall Sw eden niclas.ho glund@swedbank.se patrik.ingevall@swedbank.se Ola Södermark Sw eden Oil & Gas Patrik Nygård Sw eden o la.sodermark@swedbank.se Bjørn Thoresen Norway patrik.nygard@swedbank.se Pekka Rouhiainen Finland bt@swedbank.no Rikard Stenström Sw eden pekka.rouhiainen@swedbank.fi Didrik Gaardner Almgren Norway rikard.stenstrom@swedbank.se Petri Karhunkoski Finland didalm@swedbank.no petri.karhunko ski@swedbank.fi Henrik Madsen Norway Institutional Sales Norway Tomi Tiilola Finland hm@swedbank.no Christoffer Søbstad Oslo tomi.tiilo la@swedbank.fi Otto Rosendahl Halvorsen Norway cs@swedbank.no otthal@swedbank.no Dag Sønderland Oslo Basic Materials Petri Karhunkoski Finland ds@swedbank.no Anders Roslund Sw eden petri.karhunko ski@swedbank.fi David Berg Stavanger anders.roslund@swedbank.se Pål Holdø Dahl Norway davber@swedbank.no Erkki Vesola Finland phd@swedbank.no Einar Wisth Oslo erkki.vesola@swedbank.fi Sondre Dale Stormyr Norway ew@swedbank.no Katja Keitaanniemi (Pulp & Paper) Finland sst@swedbank.no Eirik Grimsmo Busengdal Stavanger katja.keitaanniemi@swedbank.fi Stig Erik Kyrkjeeide Norway egb@swedbank.no Hans-Erik Jacobsen Norw ay sek@swedbank.no Erik Frydendal Oslo hej@swedbank.no Theodor Sveen Nilsen Norway ef@swedbank.no Henrik Lund Wibe Norw ay tsn@swedbank.no Espen Langrusten Oslo hlw@swedbank.no esplan@swedbank.no Marek Randma Estonia Utilities Franz Skare Bergen marek.randma@swedbank.ee Bernt Olav Øvstebø Norway fsk@swedbank.no Mats Liss Sw eden Geir-Henning Ohrvik Oslo mats.liss@swedbank.se Erkki Vesola Finland Ola Södermark (Materials) Sw eden erkki.veso la@swedbank.fi Hans Petter Solberg Stavanger o la.sodermark@swedbank.se Petri Karhunkoski Finland hps@swedbank.no Tomi Tiilola Finland petri.karhunko ski@swedbank.fi Ingvar Johansen Bergen ij@swedbank.no tomi.tiilo la@swedbank.fi Telecommunications Kjell Arne Hermansen Oslo kah@swedbank.no Health Care Harald Hornes Øyen Norway Johan Unnerus Sw eden Lasse Klever Oslo johan.unnerus@swedbank.se Håkan Wranne Sweden lkl@swedbank.no Marek Randma Estonia hakan.wranne@swedbank.se Ole Martin Røyr Oslo marek.randma@swedbank.ee Mats Liss Sweden o mr@swedbank.no mats.liss@swedbank.se Paal Myhrvang Oslo Sven Sköld Sweden pm@swedbank.no sven.sko ld@swedbank.se Runar Meland Oslo rm@swedbank.no Terje Bedsvaag Oslo tb@swedbank.no Equity Research Swedbank AS, Large Corporates & Institutions Page 7 of 9

8 Background Information: Recommendation structure Large Corporations & Institutions recommendation structure consists of six recommendations: Buy, Accumulate, Hold, Reduce, Sell and Avoid. The recommendations are based on an absolute return for the security 12 months forward. The absolute return includes share price appreciation and dividend yield combined. The recommendations for the securities mentioned in this report are based on risk and return considerations. The higher the risk category of the investment, the higher the required return. For equity investments, returns are defined as capital appreciation and dividends received over the investment horizon of 12 months forward. The expected capital appreciation is the ratio of a stock s target price over the current price. A company risk rating depends on its stock price volatility, liquidity and business outlook. The target price depends on a company s fundamentals as well as the market valuation of peer stocks, and can be changed at any time if the relevant changes occur within a company/market perception of the peer group. Buy, accumulate, hold, reduce, sell and avoid recommendations may be used in this report. The table below presents the relationship between recommendations and target prices compared to risk level of the stock. These are indicative ranges and actual recommendations may deviate from the indications if other relevant issues are considered. Strong Buy (SB) The absolute return is estimated to be in excess of 15% Buy (B) The absolute return is estimated to be between 5% and 25% Neutral (N) The absolute return is estimated to be between 0% and 10% Reduce (R) The absolute return is estimated to be between 5% and -10% Sell (S) The absolute return is estimated to be less than -5% Share price target Our expectations of the absolute return on a 12-month horizon The recommendation by Large Corporations & Institutions Equity Research department is based on a variety of standard valuation models. However, the base for the calculation of the target price is our DCF model (DCF = discounted cash flow) with the exception of financial and investment companies. The DCF model discounts future cash flow at present value. In preparation of this report different valuation methods have been used, including, but not limited to, discounted free cash-flow and comparative analysis. The selection of methods depends on the industry, the company, the nature of the stock and other circumstances. The target price (previous fair value) takes into account the DCF value, the relative valuation of the share versus others peers (national or international) and news that can have a positive or negative effect on the share price. Relative and absolute multiples that we consider are: EV/EBITDA, EV/EBIT, PE, PEG and Net Asset models for companies with liquid markets for their assets and other industry specific ratios when available. Break-up valuation models are also sometimes considered. Recommendations by the 21 dets 2012 No of shares Part of total Strong Buy 6 32% Buy 9 47% Neutral 3 16% No Reco 1 5% Equity Research Swedbank AS, Large Corporates & Institutions Page 8 of 9

9 Information to the customer: Issuer and recipients This report by Large Corporations & Institutions Equity Research is issued by Large Corporations & Institutions business area within Swedbank AB (publ) ( Swedbank ). Swedbank is under the supervision of the Swedish Financial Inspection Authority (Finansinspektionen) and other financial supervisory bodies where Swedbank have offices. Swedbank is a public limited liability company and a member of the stock exchanges in Stockholm, Helsinki, Oslo and Reykjavik as well as being a member of EUREX. Swedbank AS disseminates this report in Estonia. Swedbank AS is under the supervision of the Estonian Financial Supervisory Authority (Finantsinspektsioon). Swedbank AB disseminates the report in Lithuania. Swedbank AB is under the supervision of the Lithuanian Financial Supervisory Authority (Lietuvos Respublikos vertybinių popierių komisija) in Lithuania. Swedbank AS disseminates this report in Latvia. 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However, no representation or warranty, express or implied, is made by Swedbank with respect to the completeness or accuracy of its contents, and it is not to be relied upon as authoritative and should not be taken in substitution for the exercise of reasoned, independent judgment by you. Large Corporations & Institutions would like to point out that recipients of the report should note that investments in capital markets e.g. such as in this document carry economic risks and statements regarding future assessments are compounded with uncertainty. The recipients and clients of Swedbank are responsible for such risks and they are recommended to supplement their decision-making information with that material which is assessed to be necessary, including but not limited to knowledge on the financial instruments in question and on the prevailing requirements as regards trading in financial instruments. 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