AUSTRALIA MVF AU Price (at 05:10, 25 Feb 2015 GMT) Outperform A$1.40 Valuation A$ 1.80 - DCF (WACC 1.8%, beta 1.1, ERP, RFR 4.5%, TGR 2.0%) 12-month target A$ 1.80 12-month TSR % +33.8 Volatility Index Low GICS sector Pharmaceuticals, Biotechnology & Life Sciences Market cap A$m 324 30-day avg turnover A$m 1.0 Number shares on issue m 231.1 Investment fundamentals Year end 30 Jun 2014A 2015E 2016E 2017E Revenue m 114.0 122.4 135.1 143.5 EBIT m 36.8 37.2 41.0 44.0 Reported profit m 7.8 22.4 25.7 27.8 Adjusted profit m 22.6 23.2 25.7 27.8 Gross cashflow m 25.5 26.4 29.8 32.5 CFPS 11.0 11.4 12.8 14.0 CFPS growth % nmf 3.0 12.8 9.1 PGCFPS x 12.7 12.3 10.9 10.0 PGCFPS rel x 1.34 1.30 1.30 1.30 EPS adj 9.8 10.0 11.1 12.0 EPS adj growth % nmf 2.0 10.7 8.5 PER adj x 14.3 14.0 12.7 11.7 PER rel x 0.79 0.78 0.87 0.91 Total DPS 0.0 6.5 7.2 7.8 Total div yield % 0.0 4.6 5.1 5.6 Franking % nmf 100 100 100 ROA % 14.9 14.7 15.5 16.0 ROE % 18.1 17.5 17.8 18.1 EV/EBITDA x 10.2 10.1 9.0 8.4 Net debt/equity % 69.5 52.3 43.4 34.1 P/BV x 2.6 2.3 2.2 2.0 MVF 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, February 2015 (all figures in AUD unless noted) 25 February 2015 Macquarie Securities (Australia) Limited Share losses compound pain Event Monash reported 1H15 proforma adj NPAT of $11.7m, down 4.3% yoy and 7.3% below MacQ expectations. Impact Miss driven by market share losses: Although MVF gained share organically for total cycles (fresh and frozen), on the more important metric of fresh cycles (which account for ~75% of IVF revenues) MVF organic growth of ~-4.3% was well below system growth of ~-1%. This drove a sales miss of 4.2% vs. our expectations which flowed through the P&L to drive a 7.3% miss at the bottom line. Share loss primarily due to South Australia: Management attributed its share losses largely to its Repromed business in South Australia (which compromises ~16% of sales) which has been impacted (seemingly severely) by bulk-billing from competitor Flinders Fertility, a not-for-profit provider aligned with Flinders University. With bulk-billing ceasing in May, MVF believes share losses have stabilised, and is forecasting modest share gains in 2H. We see risk of further disruption however, given (i) a substantial price differential still existing between providers and (ii) MVF now restructuring its Repromed business with changed incentives for doctors and some redundancies. Guidance achievable, if share losses cease: MVF will benefit from ~180 fresh cycles from its Fertility East acquisition in 2H relative to 1H by our calculations, and another ~150 from Bump based on Management s updated expectations. So assuming modest market growth (ie 1%) and flat share, MVF should print a similar fresh cycle number in 2H to 1H in our view. This makes the $21m of EBITDA required in 2H not seem too difficult relative to the $20.3m it just printed, given that 2H will benefit from cost-out measures in South Australia and ongoing growth in Malaysia and its ultrasound business. Earnings and target price revision Adj NPAT: F15-2.2%; F16-4.9%; F17-5.3%. Target price reduced from $2.00 to $1.80. Price catalyst 12-month price target: A$1.80 based on a DCF methodology. Catalyst: Monthly Medicare data. Action and recommendation Outperform: A poor result from MVF with share losses (predominately in SA) driving a second downgrade in four months. Management however is confident its issues in SA are now largely resolved which, if correct, makes new guidance appear relatively achievable. We also believe that at 14.1x F15E and 12.7x F16E with a fully-franked dividend yield of 4.6%, the stock is already priced for further disappointment. Please refer to page 8 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.
Fig 1 Monash the good, the not so good and the interesting The good The not so good The interesting Strong frozen cycle growth offsets some of the pain: There was a sizable acceleration in mix shift from fresh to frozen cycles during the period, with domestic fresh cycle growth of only 0.7% vs frozen cycle growth of 17.3%, boosting frozen cycles to 39.2% of overall patient treatments, up from 38.6% in 2H14. Management highlights this reflects ongoing change in clinical practice and improvements in success rates Malaysia ahead of expectations: One positive aspect of this result was Malaysia, where sales of $2.6m were well ahead of our (and prospectus) forecasts of $2.1m. This was driven by a combination of strong volumes (up 15% on pcp) and price per treatment (up 13% on pcp) as MVF recruited more fertility specialists. The company also stated it was examining further international opportunities. Ultrasound & Diagnostics continue to grow strongly: Ultrasound volumes grew by 11% during the period. PGS/PGD volumes meanwhile grew by 30% on pcp continuing their strong run, as did NIPT which grew by 115%. Guidance downgraded but in-line with our forecast: EBITDA guidance was downgraded by $2.6m (or 5.7%) at MVF's AGM in October. Yesterday the company revised this down by a further 1.2% to $41.3m. Whilst this is not positive, we believe it was somewhat anticipated by the market, given the recent trend in industry volumes. In fact, new NPAT guidance of $23.9m (-8.1% vs prospectus) was still above our previous F15 forecast. Repromed hurting margins but management positive on outlook: When quizzed on the 310 bps EBITDA margin decline vs. pcp, management pointed to weakness in its Repromed business as the primary driver. Repromed has lost significant share in SA from a large competitor moving to bulk-billing, driving sales weakness which is exaggerated at the EBITDA line due to its specialists being on fixed salaries. MVF stated the business has now stabilised. Low intervention services struggling to get traction: MVF s low-cost services contributed very little to this result with only ~1% of volumes through this offering. Management now expect only a few hundred cycles from this offering this year cf 600 originally forecast. Management predicting a return to historical growth rates: MVF today stated that the current slowdown in industry growth was likely temporary and that they anticipated a return to historical rates of growth. New patient registrations strong, apparently: MVF stated that new patient registrations were up 4.2% in the recent quarter vs. pcp. On why similar commentary previously failed to materialise in a pickup in volumes in Sth Australia, MVF commented that the conversion rates were lower than expected. Competition not impacting outlook: MVF denied that increasing competition outside of SA was driving price or margin pressure. They stated they anticipate their historical price increases of 3-4% pa will continue. Restructure underway in South Australia: Management stated they were changing the salary model of its Repromed business away from salaried towards fee for service. It also stated it was taking some cost out through non-doctor redundancies. Guidance for the full year looks achievable: New guidance implies a relatively modest increase in EBITDA from $20.3m in the 1H to $21.0m in the 2H. Providing further comfort is management s comments on today s call that little seasonality exists from half to half and the likely tailwinds from recent acquisitions, the ramp up of Bump and a stabilisation at Repromed. Source: Macquarie Research, February 2015 25 February 2015 2
Industry data released today shows continued sluggishness Fig 2 Total growth (fresh and frozen) was positive in January 1 - -1 Australian total cycle growth - Monthly % Australian total growth - MAT 4.0% 3.0% 2.0% 1.0% Fig 3 Fresh growth 1 Australian cycle growth - Fresh 1 - -1-1 6.0% Australian fresh growth - MAT 4.0% 3.0% 2.0% 1.0% Fig 4 Frozen growth 12.0% Australian cycle growth - Frozen 1 8.0% 6.0% 4.0% 2.0% -2.0% -4.0% -6.0% 4.0% Australian frozen growth - MAT 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 25 February 2015 3
Regional analysis Fig 5 NSW: 2 NSW 1 1 - -1-1 NSW 33% Fig 6 VIC: 1 VIC 1 - -1-1 -2 VIC 28% Fig 7 QLD: 1 QLD 1 - -1 QLD 17% -1 25 February 2015 4
Fig 8 WA: 2 WA 2 1 1 - -1 WA 9% Fig 9 SA: 2 SA Australian SA IVF market share 2 7% 1 1 - -1-1 -2 Fig 10 Other States: 2 Other states - fresh and frozen 2 1 1 - -1-1 Other 6% 25 February 2015 5
Fig 11 Monash IVF (MVF AU) Profit & Loss 1H14 2H14 2H15e 2H15e 1H16e 2H16e 1H17e 2H17e 2014 2015e 2016e 2017e Sales MVF share % 38.2% 39.1% 42.1% 42.1% 42.4% 40.8% 42.4% 40.8% 38.6% 40.4% 41.6% 41.6% IVF cycles (fresh) 4,389 4,047 4,402 4,402 4,973 4,403 5,132 4,544 8,436 8,823 9,376 9,676 Revenue per cycle ($) $ 12.6k $ 13.3k $ 13.4k $ 13.4k $ 13.5k $ 13.9k $ 13.9k $ 14.2k $ 13.0k $ 13.2k $ 13.7k $ 14.1k Domestic Revenue 55.5 54.0 59.1 59.1 67.3 61.4 71.4 64.7 109.5 116.8 128.7 136.1 International revenue 2.1 2.5 2.9 2.9 3.0 3.4 3.5 3.9 4.6 5.5 6.4 7.4 Total Revenue 57.6 56.4 62.1 62.1 70.3 64.8 74.9 68.6 114.0 122.4 135.1 143.5 Growth 23.9% 13.3% 7.7% 1 13.3% 4.4% 6.5% 5.8% 18.4% 7.3% 10.4% 6.2% Salary and wages 15.0 14.7 17.0 17.0 18.4 18.5 19.3 19.0 29.7 33.9 36.9 38.4 Clinicians fees 8.8 8.7 9.9 9.9 11.2 10.5 12.1 11.2 17.5 19.4 21.7 23.3 Variable costs (consumables, drug c 5.9 5.5 5.7 5.7 6.5 5.9 7.0 6.2 11.4 11.3 12.4 13.2 Fixed costs (occupancy, IT, Marketi 6.8 8.9 9.4 9.4 9.3 9.7 9.7 10.2 15.7 17.4 19.0 19.9 Total operating expenses 36.5 37.8 41.9 41.9 45.4 44.6 48.1 46.7 74.3 81.9 90.0 94.8 EBITDA 21.1 18.6 20.1 20.1 24.9 20.2 26.8 21.9 39.7 40.4 45.1 48.6 D&A 1.4 1.5 1.6 1.6 2.1 2.1 2.3 2.3 2.9 3.2 4.1 4.7 Group EBIT 19.7 17.1 18.5 18.5 22.8 18.2 24.4 19.5 36.8 37.2 41.0 44.0 EBIT margin 34.2% 30.3% 29.8% 29.8% 32.4% 28.0% 32.6% 28.5% 32.3% 30.4% 30.3% 30.6% Net interest 2.3 2.2 2.2 2.2 2.2 2.2 2.1 2.1 4.5 4.6 4.3 4.2 Pretax Profit 17.4 14.9 16.3 16.3 20.6 16.0 22.3 17.4 32.3 32.6 36.6 39.7 Tax Expense 5.2 4.5 4.8 4.8 6.2 4.8 6.7 5.2 9.7 9.5 11.0 11.9 Tax rate 29.9% 30.2% 29.7% 29.7% 3 3 3 3 3 29.0% 3 3 Net Profit 12.2 10.4 11.5 11.5 14.4 11.2 15.6 12.2 22.6 23.2 25.7 27.8 Abnormals -2.1-12.7 0.0 0.0 0.0 0.0 0.0 0.0-14.8-0.7 0.0 0.0 Reported Profit 10.1-2.3 11.5 11.5 14.4 11.2 15.6 12.2 7.8 22.4 25.7 27.8 Growth 13.5% -60 26.0% -2.3% 8.2% 8.8% 186.6% 14.3% 8.5% Underlying NPAT 12.2 10.4 11.5 11.5 14.4 11.2 15.6 12.2 22.6 23.2 25.7 27.8 Growth -6.0% 10.1% 26.0% -2.3% 8.2% 8.8% 2.4% 10.7% 8.5% Basic EPS (cents) 4.9 4.9 6.2 4.8 6.7 5.3 3.4 9.7 11.1 12.0 Adjusted diluted EPS (cents) 4.9 4.9 6.2 4.8 6.7 5.3 9.8 10.0 11.1 12.0 Growth 26.0% -2.3% 8.2% 8.8% 2.0% 10.7% 8.5% Free cash flow 18.3 18.3 17.1 8.3 18.5 9.2 30.3 28.3 25.4 27.7 FCFE per share 7.9 7.9 7.4 3.6 8.0 4.0 13.1 12.2 10.9 11.9 P/FCFE 10.9 11.7 13.1 12.0 Book value 139.3 139.3 146.3 148.2 156.5 158.6 124.8 139.3 148.2 158.6 Book value per share 0.6 0.6 0.6 0.6 0.7 0.7 0.5 0.6 0.6 0.7 NTA (83.3) (83.3) (76.3) (74.4) (66.1) (64.0) (94.9) (83.3) (74.4) (64.0) NTA per share $ (0.36) $ (0.36) $ (0.33) $ (0.32) $ (0.28) $ (0.28) $ (0.41) $ (0.36) $ (0.32) $ (0.28) P/BV 2.6 2.4 2.2 2.1 P/NTA (0.0) (0.0) (0.0) (0.0) EV/EBITDA 10.5 10.0 8.8 7.9 EV/EBIT 11.3 10.8 9.6 8.7 PE 14.6 14.3 12.9 11.9 DPS 3.2 3.2 4.0 3.1 4.4 3.4-6.5 7.2 7.8 Div yield 4.5% 5.4% Payout ratio 66% 66% 65% 65% 65% 65% 0% 65% 65% 65% Franking 100% 100% 100% 100% 100% 100% 0% 100% 100% 100% Ordinary Fully Paid 231.1 231.1 231.1 231.1 231.1 231.1 231.1 231.1 231.1 231.1 EFPOWA 232.1 232.1 232.1 232.1 232.1 232.1 231.1 232.1 232.1 232.1 Cashflow Analysis 1H14 2H14 2H15e 2H15e 1H16e 2H16e 1H17e 2H17e 2014 2015e 2016e 2017e EBITDA 20.1 20.1 24.9 20.2 26.8 21.9 39.7 40.4 45.1 48.6 - Inc. in Working capital -6.6-6.6-2.4 0.7-1.9 0.8-1.3-1.9-1.7-1.1 - Net Interest Paid 2.4 2.4 2.2 2.2 2.2 2.1 2.3-0.7 4.3 4.3 - Tax Paid 4.6 4.6 4.8 6.2 4.8 6.7 1.5 5.4 11.0 11.5 Other -0.8-0.8-9.3-18.1-10.1-19.3-8.1-9.8-27.4-29.3 Net Cash in Op Activities 19.7 19.7 20.2 11.2 21.7 12.2 34.1 33.4 31.4 34.0 + Asset Sales 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 - Capex, Acq's & Invest. -1.8-1.8-3.1-2.9-3.3-3.0-4.8-8.8-6.0-6.3 + Other 0.0 0.0 0.0 0.0 0.0 0.0-211.6 0.0 0.0 0.0 Net cash in investing -1.8-1.8-3.1-2.9-3.3-3.0-216.3-8.8-6.0-6.3 - Dividends Paid (before DRP) 7.5 7.5 7.5 9.3 7.3 10.1 0.0 7.5 16.8 17.4 + Equity Movements (inc. DRP) 0.0 0.0 0.0 0.0 0.0 0.0 142.6-3.3 0.0 0.0 + Debt Movements -15.0-15.0-15.0-18.7-14.5-20.2 6.7-17.7-33.7-34.7 + Other 0.0 0.0 0.0 0.0 0.0 0.0-1.0-4.2 0.0 0.0 Net cash in financing -7.5-7.5-7.5-9.3-7.3-10.1 148.3-17.7-16.8-17.4 Opening Cash balance 5.3 5.3 15.7 25.4 24.3 35.5 0.0 8.8 15.7 24.3 Net Increase in Cash 10.4 10.4 9.6-1.1 11.2-0.9-33.9 6.9 8.6 10.3 + Adjusting Figure (inc. net exch. diff.) 0.0 0.0 0.0 0.0 0.0 0.0 42.7 0.0 0.0 0.0 Net Cash movement 10.4 10.4 9.6-1.1 11.2-0.9 8.8 6.9 8.6 10.3 Cash Balance 15.7 15.7 25.4 24.3 35.5 34.6 8.8 15.7 24.3 34.6 Performance Analysis Balance Sheet (US$m) 2014 2015e 2016e 2017e Cash 8.8 15.7 24.3 34.6 FY14 Cost Breakdown Variable costs (consumables, drug costs etc) 15% Fixed costs (occupancy, IT, Marketing etc) 21% Clinicians fees 24% Salary and wages 40% Source: Macquarie Research, Company data, February 2015 Inventories 0.0 0.0 0.0 0.0 PP&E 9.1 12.3 14.1 15.8 Goodwill 197.7 201.0 201.0 201.0 Other Assets 30.8 29.6 30.0 30.2 Total Assets 246.4 258.6 269.4 281.5 Short Term Debt 0.1 0.1 0.1 0.1 Long Term Debt 95.5 88.6 88.6 88.6 Other Liabilities 26.0 30.6 32.6 34.3 Total Liabilities 121.5 119.3 121.2 122.9 Net Assets 124.8 139.3 148.2 158.6 Shareholders Funds 422.6 422.6 422.6 422.6 Minority Interests 0.0 0.0 0.0 0.0 Total Shareholder Funds 124.8 139.3 148.2 158.6 Ratios 2014 2015e 2016e 2017e Working Capital (17.6) (19.5) (21.1) (22.2) Interest cover (times) 8.2 8.1 9.5 10.4 Gearing (Net debt/equity) (%) 69.5% 52.3% 43.4% 34.1% Return on Equity (%) 18.1% 16.6% 17.3% 17.5% ROIC (%) 17.4% 17.5% 19.3% 20.7% 25 February 2015 6
Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a reasonably negative view on Monash IVF Group. The strongest style exposure is Growth, indicating this stock has good historic and/or forecast growth. Growth metrics focus on both top and bottom line items. The weakest style exposure is Quality, indicating this stock is likely to have a weaker and less stable underlying earnings stream. 46/62 Global Alpha Model Sector Rank % of BUY recommendations 67% (2/3) 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. Australian Pharmaceutical 1.5 Australian Pharmaceutical Sigma Pharmaceuticals 0.9 Sigma Pharmaceuticals Virtus Health 0.5 Virtus Health Acrux Greencross Japara Healthcare 0.2 0.1 0.1-0.6 Acrux Greencross Japara Healthcare -3.0-2.0-1.0 0.0 1.0 2.0 3.0-100% -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. Australian Pharmaceutical Sigma Pharmaceuticals Virtus Health Acrux Greencross Japara Healthcare -1.1-0.8-0.8-1.4-0.1-0.1 1.1 Australian Pharmaceutical Sigma Pharmaceuticals Virtus Health Acrux Greencross Japara Healthcare -3.0-2.0-1.0 0.0 1.0 2.0 3.0-100% -50% 0% 50% 100% 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 country Alpha Model Score Valuation Growth Profitability Earnings Momentum Price Momentum Quality Capital & Funding Liquidity Risk Technicals & Trading Normalized Score -0.56-0.27 0.63-0.03 0.22-0.38-1.06-1.48-2.17-0.59-0.25 Percentile relative to sector(/62) Percentile relative to country(/241) 0 50 100 0 50 100 0 0 1 1 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) 25 February 2015 7
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 60 100% 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) MVF 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, February 2015 12-month target price methodology MVF AU: A$1.80 based on a DCF methodology Company-specific disclosures: MVF AU: MACQUARIE CAPITAL (AUSTRALIA) LIMITED or one of its affiliates managed or co-managed a public offering of securities of Monash IVF Group Ltd in the past 12 months, for which it received compensation. MACQUARIE EQUITIES LIMITED or one of its affiliates has provided Monash IVF Group Ltd with investment advisory services in the past 12 months, for which it received compensation. MACQUARIE EQUITIES LIMITED or one of its affiliates managed or co-managed a public offering of securities of Ltd in the past 12 months, for which it received compensation. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures. Date Stock Code (BBG code) Recommendation Target Price 12-Nov-2014 MVF AU Outperform A$2.00 28-Oct-2014 MVF AU Outperform A$2.10 29-Aug-2014 MVF AU Outperform A$2.25 06-Aug-2014 MVF AU Outperform A$2.20 Target price risk disclosures: MVF 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 94 122 169 279, AFSL No. 318062) ( 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 58 002 832 126, AFSL No. 238947) 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 41 002 574 923, AFSL No. 237504) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited ( MENZ ) 25 February 2015 8
an NZX Firm. Macquarie Private Wealth s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN 46 008 583 542, AFSL No. 237502) ( 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 1989. 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 e-mail and delete the document. We do not guarantee the integrity of any e-mails 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 www.macquarie.com/disclosures. 25 February 2015 9