AUSTRALIA CDD AU Price (at 04:53, 17 Feb 2015 GMT) Neutral A$2.88 Valuation - Sum of Parts A$ 2.80-3.43 12-month target A$ 3.12 12-month TSR % +18.4 Volatility Index Medium GICS sector Capital Goods Market cap A$m 474 30-day avg turnover A$m 2.1 Number shares on issue m 164.6 Investment fundamentals Year end 30 Jun 2014A 2015E 2016E 2017E Revenue m 1,296.9 1,418.5 1,459.5 1,501.7 EBIT m 105.6 100.5 106.6 109.5 Reported profit m 78.1 64.3 70.4 72.6 Adjusted profit m 71.1 71.0 70.4 72.6 Gross cashflow m 97.5 92.6 92.8 94.3 CFPS 63.3 54.7 54.2 54.6 CFPS growth % -9.2-13.7-0.8 0.6 PGCFPS x 4.5 5.3 5.3 5.3 PGCFPS rel x 0.48 0.56 0.64 0.70 EPS adj 46.2 41.9 41.1 42.0 EPS adj growth % -13.6-9.3-1.9 2.1 PER adj x 6.2 6.9 7.0 6.9 PER rel x 0.34 0.39 0.48 0.54 Total DPS 36.0 29.0 29.0 30.0 Total div yield % 12.5 10.1 10.1 10.4 Franking % 100 100 100 100 ROA % 8.6 7.6 7.9 7.9 ROE % 10.2 9.1 8.7 8.7 EV/EBITDA x 5.9 6.1 6.1 6.0 Net debt/equity % 28.8 34.6 30.9 27.5 P/BV x 0.6 0.6 0.6 0.6 CDD 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) 17 February 2015 Macquarie Securities (Australia) Limited Tough half over Event has reported a H1 NPAT of $31.5m (Macquarie $29.2m), down 17% on pcp of $37.9m. This is in accordance with the November warning that H1 FY15 NPAT would be $27-31m. Impact Tough start. Revenue of $685.8m (Macquarie $681.4m) was up 8% on pcp of $626.7m and EBITDA of $62.9m (Macquarie $59.5m) was down 7% on pcp of $67.8m. Australian EBIT fell $12m as exposure to the mining and oil and gas sectors hurt both revenues and margins. In particular, the high-margin construction materials testing business has been hit hard. Demand from new infrastructure projects has not yet been sufficient to offset lower resource sector demand. US EBIT fell $6.3m due to a slower than anticipated ramp-up in new projects and high business integration costs. In addition, PPI was impacted by some problem projects in H1 but is expected to improve in H2. The result contained a $6.1m FX benefit from the translation of current assets. stated this was basically offset by one-off restructuring costs taken in divisional results. expects a slightly improved H2 driven by FX translation and improved backlog in the US. Australia is expected to remain tough. We believe it is still too early to see the full customer reaction to recent commodity price declines, especially the oil price. Backlog is currently $1,014m, a 19% increase since June 2014. FX movements contributed $84m of this improvement. Balance sheet. Net debt was $307.8m (June $220.2m) driven by no operating cash flow for the half and USD debt translation of $49m. Earnings and target price revision FY15 eps up 4.3% to 41.9cps. FY16 eps down 11.3% to 41.1cps. Price target changed from $3.52 to $3.12. Price catalyst 12-month price target: A$3.12 based on an EV/EBITA methodology. Catalyst: Delivery of earnings and CEO appointment. Action and recommendation Upgrade to Neutral following share price fall. While the magnitude and timing of the November downgrade clearly shook market confidence in s underlying fundamentals, is now trading at a discount to larger peers such as WorleyParsons (WOR AU, A$11.53, Outperform, TP: A$11.10, John Purtell). Please refer to page 6 for important disclosures and analyst certification, or on our website www.macquarie.com/research/disclosures.
Tough start has reported a H1 NPAT of $31.5m (Macquarie $29.2m), down 17% on pcp of $37.9m. This is in accordance with the November warning that H1 FY15 NPAT would be $27-31m. Fig 1 Result summary Profit and Loss 1H14a 2H14a FY14a 1H15a 2H15e FY15e Change Revenue $632.4m $676.2m $1,308.6m $685.8m $732.6m $1,418.5m 8.4% EBITDA $67.8m $64.3m $132.1m $62.9m $65.9m $128.7m -7.3% Depreciation $8.4m $11.3m $19.8m $9.9m $11.7m $21.5m 17.1% Amortisation $3.6m $3.1m $6.7m $3.6m $3.1m $6.7m -1.5% EBIT $55.7m $49.9m $105.6m $49.4m $51.1m $100.5m -11.4% Net Interest $3.5m $4.0m $7.5m $5.1m $3.5m $8.6m 46.0% Pre-Tax Profit $52.2m $45.9m $98.1m $44.3m $47.6m $91.9m -15.2% Tax Expense $14.3m $12.7m $27.1m $12.8m $14.8m $27.6m -10.7% Net Profit $37.9m $33.1m $71.1m $31.5m $32.8m $64.3m -16.9% Outside eq int $0.0m $0.0m $0.0m $0.0m $0.0m $0.0m n/a Net ISI's $5.2m $1.9m $7.1m $0.0m $0.0m $0.0m n/a Rep Earnings $43.1m $35.0m $78.1m $31.5m $32.8m $64.3m -27.0% Adj Earnings $41.5m $36.2m $77.8m $35.1m $35.9m $71.0m -15.6% Gross Cflow $50.0m $47.6m $97.5m $45.0m $47.6m $92.6m -10.0% EPS (Adj/dil) 28.0c 22.5c 50.4c 20.8c 21.1c 41.9c -25.8% EPS growth -4.1% -21.6% -13.2% -25.8% -6.2% -16.7% EBITDA/Sales 10.7% 9.5% 10.1% 9.2% 9.0% 9.1% EBIT/Sales 8.8% 7.4% 8.1% 7.2% 7.0% 7.1% Source: Macquarie Research, February 2015 Revenue of $685.8m (Macquarie $681.4m) was up 8% on pcp of $626.7m and EBITDA of $62.9m (Macquarie $59.5m) was down 7% on pcp of $67.8m. The result contained a $6.1m FX benefit from the translation of current assets of its US business. stated this was basically offset by one-off restructuring costs taken in divisional results. Fig 2 Divisional result summary ($m) 1H14(a) 2H14(a) FY14(a) 1H15(a) 2H15(e) FY15(e) Revenue Professional services - Australia and NZ 205.6 187.0 392.6 172.4 175.2 347.6 Professional services - North America 321.9 370.9 692.8 395.8 443.7 839.5 Emerging markets 97.6 110.7 208.3 111.4 107.0 218.4 Other segments 5.7 6.0 11.7 6.3 6.7 13.0 Corporate and unallocated 1.5 1.6 3.2 0.0 0.0 0.0 Other 0.0 0.0 0.0 0.0 0.0 0.0 Total 632.4 676.2 1,308.6 685.8 732.6 1,418.5 EBITA Professional services - Australia and NZ 27.6 21.7 49.3 15.5 17.5 33.1 Professional services - North America 28.7 29.1 57.8 22.3 29.2 51.6 Emerging markets 2.0 4.3 6.3 4.3 4.2 8.5 Other segments 1.9 1.9 3.8 2.7 2.9 5.6 Corporate and unallocated -4.5-7.1-11.6 4.5-2.7 1.7 Amortisation 3.6 3.1 6.7 3.6 3.1 6.7 Total 59.4 53.0 112.3 53.0 54.2 107.2 EBITA Margins Professional services - Australia and NZ 13.4% 11.6% 12.6% 9.0% 10.0% 9.5% Professional services - North America 8.9% 7.8% 8.3% 5.6% 6.6% 6.1% Emerging markets 2.1% 3.9% 3.0% 3.9% 3.9% 3.9% Other segments 32.8% 31.3% 32.0% 43.2% 43.2% 43.2% Total 9.4% 7.8% 8.6% 7.7% 7.4% 7.6% Source: Company data, Macquarie Research, February 2015 Australian EBIT fell $12m as exposure to the mining and oil and gas sectors hurt both revenues and margins. In particular, the high-margin construction materials testing business has been hit hard. Demand from new infrastructure projects has not yet been sufficient to offset lower resource sector demand. 17 February 2015 2
US EBIT fell $6.3m due to a slower than anticipated ramp-up in new projects and high business integration costs. In addition, PPI was impacted by some problem projects in H1 but is expected to improve in H2. The organic revenue decline was 5.6% in the half with the major impact being a 5.7% fall in Australia and a slowdown in the US GOM oil spill work. expects a slightly improved H2 result driven by FX translation and improved backlog in the US. Australia is expected to remain tough. We believe it is still too early to see the full customer reaction to recent commodity price declines, especially the oil price. Backlog is currently $1,014m, a 19% increase since June 2014. FX movements contributed $84m of this improvement. Balance sheet. We have detailed s cash conversion in the table below. Fig 3 Cash conversion impacted by a range of factors ($ m) 1H14(a) 2H14(a) FY14(a) 1H15(a) 2H15(e) FY15(e) EBITDA 67.8 64.3 132.1 62.9 65.9 128.7 Operating Cashflow 33.8 50.8 84.6 0.9 19.4 20.3 + Tax Paid 11.4 15.9 27.3 26.4 0.7 27.1 + Net Interest Paid 3.5 4.0 7.5 5.1 3.5 8.6 Ungeared Pre tax Cashflow 48.7 70.7 119.4 32.3 23.5 55.9 Profit to cash Conversion 71.9% 109.9% 90.4% 51.5% 35.7% 43.4% Source: Macquarie Research, February 2015 Cash conversion was impacted by a reversal of H2 FY14 s working capital reduction, a build-up in US working capital and an additional pay cycle in Australia. As a consequence, net debt was $307.8m (June $220.2m). USD debt translation of $49m also contributed to the increase. We forecast FY15 net debt to EBITDA of 2.1x, a relatively high level for a business of this nature. Valuation $2.80-$3.43, price target $3.12 We have detailed our EV/EBITA valuation in the table below. Fig 4 EV/EBITA valuation Valuation FY15 Multiple- Low Multiple - High Value - Low Value - High EBITA 107.2 7.0 8.0 750.2 857.4 Less Net Debt 273.4 273.4 Plus option Cash 0.0 0.0 Value 476.8 584.0 Diluted Shares on Issue 170.1 170.1 Value per share $2.80 $3.43 Source: Macquarie Research, February 2015 Our Target Price is based on the midpoint of our valuation. 17 February 2015 3
Limited (CDD:$2.88) 17-Feb-15 Interim results 1H14(a) 2H14(a) 1H15(a) 2H15(e) Profit & Loss 2014A 2015E 2016E 2017E Revenue 632.4 676.2 685.8 732.6 Revenue $m 1308.6 1418.5 1459.5 1501.7 EBITDA $m 67.8 64.3 62.9 65.9 EBITDA $m 132.1 128.7 129.0 131.3 Depreciation $m 8.4 11.3 9.9 11.7 Depreciation $m 19.8 21.5 22.4 21.7 Amortisation of goodwill $m 3.6 3.1 3.6 3.1 Amortisation of goodwill $m 6.7 6.7 0.0 0.0 EBIT $m 55.7 49.9 49.4 51.1 EBIT $m 105.6 100.5 106.6 109.5 Net Interest expense $m 3.5 4.0 5.1 3.5 Net interest expense $m 7.5 8.6 8.9 8.8 Pre-Tax Profit $m 52.2 45.9 44.3 47.6 Pre-Tax Profit $m 98.1 91.9 97.8 100.8 Tax Expense $m 14.3 12.7 12.8 14.8 Tax Expense $m 27.1 27.6 27.4 28.2 Net Profit $m 37.9 33.1 31.5 32.8 Net Profit $m 71.1 64.3 70.4 72.6 Outside equity interests $m 0.0 0.0 0.0 0.0 Outside equity interests $m 0.0 0.0 0.0 0.0 Net Abn/Extra $m 5.2 1.9 0.0 0.0 Net Abnormals/Extra. $m 7.1 0.0 0.0 0.0 Reported Earnings $m 43.1 35.0 31.5 32.8 Reported Earnings $m 78.1 64.3 70.4 72.6 Adjusted Earnings $m 41.5 36.2 35.1 35.9 Adjusted Earnings $m 77.8 71.0 70.4 72.6 Gross Cashflow $m 52.9 44.4 31.4 61.7 Gross Cashflow $m 97.3 93.1 92.5 95.1 EPS (Adj/dil) c 28.0 22.5 20.8 21.1 EPS (adj/diluted) c 50.4 41.9 41.1 42.0 EPS growth % -4.1-21.6-25.8-6.2 EPS growth % -13.2% -16.7% -1.9% 2.1% CFPS c 22.8 31.6 0.5 11.4 PE (adj) x 5.7 6.9 7.0 6.9 CFPS Growth % -17.9-16.8-97.7-63.9 CFPS c 54.8 12.0 49.3 49.5 EBITDA/Sales % 10.7 9.5 9.2 9.0 CFPS Growth % -16.8-78.2 312.0 0.5 EBIT/Sales % 8.8 7.4 7.2 7.0 PGCFPS x 5.3 24.1 5.8 5.8 Earnings Split % 53.4 46.6 49.4 50.6 DPS c 36.0 29.0 29.0 30.0 Revenue Growth % 5.2 14.1 8.4 8.4 Yield % 12.5 10.1 10.1 10.4 EBIT Growth % -9.6 2.7-11.4 2.4 Franking % 100.0 100.0 100.0 100.0 Profit and Loss ratios 2014A 2015E 2016E 2017E Cashflow Analysis 2014A 2015E 2016E 2017E Revenue Growth % 9.6 8.4 2.9 2.9 EBIT Growth % -4.2-4.9 6.1 2.7 Pre-tax Profit $m 98.1 91.9 97.8 100.8 EBITDA/Sales % 10.1 9.1 8.8 8.7 Depreciation & Amortisation $m 26.5 28.3 22.4 21.7 EBIT/Sales % 8.1 7.1 7.3 7.3 Tax Paid $m -27.3-27.1-27.6-27.4 Effective tax rate % 27.6 30.0 28.0 28.0 Gross cashflow $m 97.3 93.1 92.5 95.1 Payout ratio % 71.5 69.2 70.5 71.4 Changes in working capital $m -63.3-42.3-8.5-8.7 EV/EBITA x 5.8 7.0 6.9 6.5 Other $m 50.7-30.5 0.2-0.8 EV/EBITDA x 4.9 5.8 5.7 5.5 Operating Cashflow $m 84.6 20.3 84.3 85.6 EV/Sales x 0.5 0.5 0.5 0.5 Acquisitions $m -192.2-8.0 0.0 0.0 Capex - Plant & Equip. $m -21.4-30.0-20.0-20.0 Balance sheet ratios Asset Sales $m 2.3 1.0 0.0 0.0 ROE % 11.1 9.1 8.7 8.7 Other $m 0.0 0.0 0.0 0.0 ROA % 8.6 7.6 7.9 7.9 Investing cashflow $m -211.3-37.0-20.0-20.0 ROFE % 12.0 9.8 10.0 10.2 Dividend (ordinary) $m -50.9-43.1-43.5-45.5 Net Debt $m 220.2 273.4 252.6 232.6 Equity raised $m 102.4 6.6 0.0 0.0 Net Debt/Equity % 28.8 34.6 30.9 27.5 Other $m -4.6 0.0 0.0 0.0 Interest Cover x 14.1 11.7 12.0 12.5 Financing cashflow $m 46.9-36.5-43.5-45.5 Price/NTA x 40.2 10.5 6.7 5.0 NTA per share $ 0.07 0.27 0.43 0.58 Net Change in cash/debt $m -79.8-53.2 20.8 20.1 EFPOWA m 154.4 169.3 171.1 172.8 Historical performance 2011A 2012A 2013A 2014A Balance Sheet 2014A 2015E 2016E 2017E Cash $m 85.9 52.6 73.4 93.5 Revenue $m 827.7 959.9 1193.9 1308.6 Receivables $m 244.9 265.4 273.1 281.0 EBITDA $m 98.2 126.8 133.9 132.1 Inventories $m 142.6 161.6 166.3 171.1 Depreciation/Amortisation $m 11.4 16.1 23.7 26.5 Investments $m 0.0 8.0 8.0 8.0 EBIT $m 86.9 110.7 110.2 105.6 Property, plant & equipment $m 60.7 68.2 65.8 64.1 Net interest expense $m 2.6 5.6 6.2 7.5 Intangibles $m 751.6 744.9 744.9 744.9 Pre-Tax Profit $m 84.3 105.0 104.0 98.1 Other Assets $m 32.1 32.1 32.1 32.1 Tax Expense $m 25.5 30.9 26.4 27.1 Total Assets $m 1317.7 1332.8 1363.6 1394.6 Net Profit $m 58.8 74.2 77.6 71.1 Payables $m 137.0 134.3 138.2 142.2 Net Abn/Extra $m 0.0 0.0 0.0 7.1 Short Term Debt $m 3.1 3.1 3.1 3.1 Long Term Debt $m 302.9 322.9 322.9 322.9 EPS (adj/dil) c 58.6 64.8 58.0 50.4 Other Liabilities $m 111.1 81.1 81.1 81.1 EPS growth % 0.3 0.1-0.1-0.1 Total Liabilities $m 554.2 541.5 545.4 549.4 Ordinary DPS c 34.0 36.0 36.0 36.0 Shareholders Funds $m 763.5 791.3 818.2 845.3 EBITDA/Sales % 11.9 13.2 11.2 10.1 Minority Interests $m 0.0 0.0 0.0 0.0 EBIT/Sales % 10.5 11.5 9.2 8.1 Total Shareholders Equity $m 763.5 791.3 818.2 845.3 ROE % 17.9 17.1 14.3 11.1 ROFE % 21.8 21.7 15.5 12.0 Total Funds employed $m 1,317.7 1,332.8 1,363.6 1,394.6 EFPOWA m 102.3 119.8 145.3 154.4 2014A 2015E 2016E 2017E 2014A 2015E 2016E 2017E Sales 1308.6 1418.5 1459.5 1501.7 EBIT ND/EBITDA x 1.7 2.1 2.0 1.8 Australia and NZ 49.3 33.1 37.3 38.0 EBITDA/Net Interest x 17.6 15.0 14.5 15.0 North America 57.8 51.6 60.0 61.8 ND/Tangible assets % 39% 47% 41% 36% Emerging markets 6.3 8.5 8.8 9.2 Other segments 3.8 5.6 5.7 5.8 Other -4.9 8.4-5.2-5.3 Total EBITA 112.3 107.2 106.6 109.5 Margin 8.6% 7.6% 7.3% 7.3% Source: Company data, Macquarie Research, February 2015 17 February 2015 4
Fundamentals Macquarie Wealth Management Macquarie Quant View The quant model currently holds a strong negative view on. The strongest style exposure is Valuations, indicating this stock is under-priced in the market relative to its peers. The weakest style exposure is Price Momentum, indicating this stock has had weak medium to long term returns which often persist into the future. 284/306 Global Alpha Model Sector Rank % of BUY recommendations 33% (3/9) Number of Price Target downgrades 1 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. 0.7 0.3 0.3-0.1-0.6-1.3-1.3-3.0-2.0-1.0 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. 0.1-0.5-1.2-1.2-0.5-0.9 0.8-3.0-2.0-1.0 0.0 1.0 2.0 3.0-80% -60% -40% -20% 0% 20% 40% 60% 80% 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. EV/EBITDA (NTM) Cash to Total Assets FY0 Price to Earnings FY1 Price to Earnings NTM Working Capital Inc. Turnover (USD) 250 Day Turnover(USD) 125 Day Earnings Stability Negatives Positives -22% -23% -26% -19% 33% 31% 31% 30% -40% -20% 0% 20% 40% 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 -1.28 1.25-0.14-0.42-0.79-1.77-0.17-0.45-1.81-0.45 1.10 Percentile relative to sector(/306) 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) 17 February 2015 5
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) CDD 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 CDD AU: A$3.12 based on a EV/EBITA methodology Company-specific disclosures: CDD AU: 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 www.macquarie.com/disclosures. Date Stock Code (BBG code) Recommendation Target Price 21-Nov-2014 CDD AU Underperform A$3.52 20-Aug-2014 CDD AU Neutral A$6.30 17-Mar-2014 CDD AU Neutral A$6.42 19-Feb-2014 CDD AU Neutral A$6.70 20-Aug-2013 CDD AU Neutral A$6.15 22-May-2013 CDD AU Neutral A$5.20 16-May-2013 CDD AU Neutral A$5.50 19-Feb-2013 CDD AU Neutral A$6.97 22-Jan-2013 CDD AU Neutral A$6.62 21-Nov-2012 CDD AU Neutral A$6.20 14-Aug-2012 CDD AU Neutral A$8.17 03-Jul-2012 CDD AU Outperform A$7.91 27-Jun-2012 CDD AU Outperform A$7.77 Target price risk disclosures: CDD 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 17 February 2015 6
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 ) 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. 17 February 2015 7