Clariden Weekly Equity Monitor And Model Portfolio 20110414

Clariden Weekly Equity Monitor and Model Portfolio 2011/04/14
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Weekly Equity Monitor & Model Portfolio April 14, 2011 Weekly Equity Monitor & Model Portfolio The information and opinions expressed in this document were produced by the Investment Research department of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Clariden Leu Ltd. to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction. It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based upon sources that Clariden Leu Ltd. believes to be reliable, no representation is made that the information is accurate or complete. Clariden Leu Ltd. does not accept liability for any loss arising from the use of this report. The price and value of investments mentioned and any income that might accrue may fluctuate and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks; economic risks; credit risks; currency risks; and market risks. Before entering into any transaction, investors should consider the suitability of the transaction to individual circumstances and objectives. Clariden Leu Ltd. recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal, regulatory, credit, tax and accounting consequences. Clariden Leu Ltd. may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such issuers, and/or have a position or effect transactions in the securities or options thereof. Neither this document nor any copy thereof may be sent, taken into or distributed in the United States or in Japan or to any US Person. Local law or regulation may restrict the distribution of research reports into certain jurisdiction. This document may not be reproduced either in whole or in part, without the written permisson of Clariden Leu Ltd. © Clariden Leu Ltd. All rights reserved. 2 Table of contents 04 06 07 08 10 12 13 14 15 16 17 CL Top Fundamental Picks Closed Top Recommendations CL Top Dividend Picks Sector Recommendations Model Portfolio Rating Changes Agenda: Company and Economic Events Figures Marketdata Markets and Forecasts at a Glance Recent Research Alcoa: Aluminium price increases surpass cost inflation Givaudan: Still some headwinds in 2011 Rio Tinto: Production hit by floods Sanofi-aventis: Resuming coverage with Marketperform Sulzer: Complementary acquisition in the pump segment 27 CL Universe Rated Stocks 3 14.04.2011 CL Top Fundamental Picks ALCOA Materials, US Valor 986'052 Rating OP Cur. USD Price 16.55 Target Price 20.00 Date of entry / Price 13.01.2011 15.9 High Cyclicality Balance Sheet Strong Date of entry / Price 05.08.2009 70.58 High Cyclicality Balance Sheet Strong Date of entry / Price 21.07.2010 41.48 High Cyclicality Balance Sheet Strong Date of entry / Price 19.01.2011 53.02 High Cyclicality Balance Sheet Strong Target Price 550.00 Date of entry / Price 24.03.2011 478 High Cyclicality Balance Sheet Strong Cur. GBp Price 2530 Target Price 2'700.00 Date of entry / Price 24.02.2011 2260 Low Weak Low Weak Low Weak Low Weak Low Weak Low – Thanks to relatively low prices and attractive material properties, aluminium is gaining market share. – Falling global oversupply of aluminium is likely to lift aluminium prices further. – Focus on aluminium, attractive bauxite mines and below-average production costs provide upside potential. ALLIANZ Insurance, DE Valor 322'646 Rating OP Cur. EUR Price 104.4 Target Price 120.00 – Allianz is well diversified and has substantial activities in growth markets like Eastern Europe and India. – Strong capitalization has allowed the company to hold on to substantial stock investments despite the crisis. – Severe competition in German non-life insurance a headwind. Valuation is very attractive, however. ANHEUSER-BUSCH INBEV Food, Beverage & Tobacco, BE Valor 1'147'290 Rating OP Cur. EUR Price 41.57 Target Price 50.00 – Leading position in the top five beer markets China, USA, Russia, Brazil and Germany. – Positioning, top line growth, cost savings and debt reduction are all in favor of ABI. – Considering A-B InBev's good growth prospects and high profitability, the share is very attractively valued. BNP PARIBAS Banks, FR Valor 123'397 Rating OP Cur. EUR Price 53.47 Target Price 62.00 – BNP is one of the best capitalized banks in Europe (Basel 3 common Tier 1 Ratio of 8.5% by Dec 2012). – With the exception of Italy, BNP has a limited exposure to the European periphery. – The Fortis acquisition synergies estimate of EUR 900 m could be surpassed by a wide margin. BP PLC Energy, GB Valor 844'183 Rating OP Cur. GBp Price 464.2 – Above-average leverage to higher oil prices provides good earnings momentum. – Uncertainty around Macondo settlement remains, but substantial reserves and cash flows provide protection. – Still substantial valuation discount to peers is likely to narrow further. BRITISH AMERICAN TOBACCO Food, Beverage & Tobacco, GB Valor 909'525 Rating OP High – With an EMMA revenue share of 53%, BAT is benefitting form increasing cigarette consumption in those regions. Cyclicality – High margins, healthy balance sheet, strong cash flows and attractive dividend yield as positive attributes. – Tobacco companies are less affected by higher raw material prices and are cheaper than other consumer staples.Balance Sheet Strong CITIGROUP Diversified Financials, US Valor 942'676 Rating OP Cur. USD Price 4.5 Target Price 5.50 Date of entry / Price 22.07.2010 3.94 High Cyclicality Balance Sheet Strong Weak – There is clear evidence of a turnaround after the return to profitability. – After massive recapitalizations, the bank now has strong capital levels. No further dilution is expected. – The bank is currently trading below tangible book value and offers a recovery story. Low Weak Entry price: Dividend adjusted Clariden Leu Ltd. Bahnhofstrasse 32, CH-8070 Zurich Tel. +41 58 205 75 75 Fax +41 58 205 37 88 Disclaimer This document was produced by and the opinions expressed are those of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Clariden Leu Ltd. to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable and accurate, but Clariden Leu Ltd. does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. The issuer of the securities mentioned herein or Clariden Leu Ltd. may have traded on the basis of the information and analysis contained in this publication before they were made available to the clients of Clariden Leu Ltd. Clariden Leu Ltd. may legally participate in other financial transactions with the issuers of the securities mentioned herein, invest in them, provide services to them or acquire business from such issuers and/or take out positions on such securities or hold options or carry out transactions with them. Investments in foreign currencies are subject to exchange rate fluctuations. Consult the specific securities prospectus or speak to your advisor before making any investment decisions. Neither this document nor any copy thereof may be sent or taken into the United States or distributed in the United States. In certain other jurisdictions the distribution may be restricted by local law or regulation. This document may not be reproduced in whole or in part without the written consent of Clariden Leu Ltd. 4 14.04.2011 CL Top Fundamental Picks HENKEL Valor Rating OP Cur. EUR Price 43.74 Target Price 53.00 Date of entry / Price 27.10.2010 43.15 Low Household & Personal Products, D 335'910 High – Undisputed market leader in adhesive technology which has a promising future. Stong emerging market exposure. Cyclicality – Due to its strong position Henkel wants to outperform its underlying markets again in 2011. Balance Sheet – Despite higher raw material prices, Henkel confirmed its operating margin target of 14% in 2012. Strong HEWLETT-PACKARD Technology Hardware, US Valor 938'718 Rating OP Cur. USD Price 41.13 Target Price 51.00 Date of entry / Price 24.02.2011 43.18 High Cyclicality Balance Sheet Strong Date of entry / Price 11.03.2010 298 High Cyclicality Balance Sheet Strong Cur. CHF Price 49.61 Target Price 60.00 Date of entry / Price 21.10.2010 55.1 High Cyclicality Balance Sheet Strong Cur. EUR Price 25.28 Target Price 29.50 Date of entry / Price 09.12.2010 24.35 High Cyclicality Strong Weak – HP's broad product range enables the company to offer complete IT solutions at attractive prices. – HP is gaining substantial market share in networking, among others from Cisco. – HP's valuation is attractive, thanks to a P/E ratio below 10, a solid balance sheet and high cash flows. KABA Capital Goods, CH Valor 1'179'595 Rating OP Cur. CHF Price 387 Target Price 440.00 Low Weak – Over the next three years Kaba is targeting average organic growth of 4-6%. – Kaba is examining various strategic options for its Door Automation Business. – Undemandig valuation leaving plenty of upside potential. NOVARTIS Pharma & Biotech, CH Valor 1'200'526 Rating OP Low Weak – Novartis has launched ten new products in four years. – Integration of Alcon supports profits ahead of upcoming patent expiries in pharma division. – Sandoz well positioned to benefit from growth in generics. ROYAL DUTCH SHELL A Energy, NL Valor 1'987'674 Rating OP Low Weak – In 2011 the oil price should continue to strengthen and we expect further recovery in refinery margins. – Several large projects will come on stream in the next two years. Shell's output should rise as a result. Balance Sheet – Under CEO Peter Voser Shell has been more tightly managed. There is scope for further operational improvement. SIEMENS Capital Goods, DE Valor 827'766 Rating OP Cur. EUR Price 93.74 Target Price 110.00 Low Weak Date of entry / Price 23.09.2010 76.45 High Cyclicality Balance Sheet Strong Weak Low – Strong position in the emerging markets (30% of sales). – Siemens had an order book worth EUR 92 bn at the end of the last quarter. – Siemens is less expensive than the overall industrial sector and has a solid balance sheet. Entry price: Dividend adjusted Clariden Leu Ltd. Bahnhofstrasse 32, CH-8070 Zurich Tel. +41 58 205 75 75 Fax +41 58 205 37 88 Disclaimer This document was produced by and the opinions expressed are those of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Clariden Leu Ltd. to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable and accurate, but Clariden Leu Ltd. does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. The issuer of the securities mentioned herein or Clariden Leu Ltd. may have traded on the basis of the information and analysis contained in this publication before they were made available to the clients of Clariden Leu Ltd. Clariden Leu Ltd. may legally participate in other financial transactions with the issuers of the securities mentioned herein, invest in them, provide services to them or acquire business from such issuers and/or take out positions on such securities or hold options or carry out transactions with them. Investments in foreign currencies are subject to exchange rate fluctuations. Consult the specific securities prospectus or speak to your advisor before making any investment decisions. Neither this document nor any copy thereof may be sent or taken into the United States or distributed in the United States. In certain other jurisdictions the distribution may be restricted by local law or regulation. This document may not be reproduced in whole or in part without the written consent of Clariden Leu Ltd. 5 14.04.2011 Closed Top Recommendations Name K+S AG Date 10.03.2011 Rationale Entry Date Measured in terms of the GSCI Agricultural Index, agricultural prices have risen 14.10.2010 by 93% since their June lows, which has helped the stock to outperform the general stock market by 14% since being in the Top Pick list. The company is very likely to report good results over the coming quarters. However, its current valuation already factors in another substantial earnings recovery and its longerterm valuation is starting to look expensive. A normalisation of global weather patterns is likely to bring lower agricultural prices by spring 2012, even though prices may continue to rise in the short term. Despite rising competition, Microsoft has managed to extend the strong growth 15.07.2010 experienced in recent years by disclosing record results in recent quarters. Furthermore, the cooperation with Nokia announced in February will enable it to regain substantial market share in smart phone operating systems. These news, however, have not helped the stock's performance: It has risen by just 2% since being added to the list (vs. +19% for the general market), which is why it has now been cancelled. Few investors may currently like the stock and there are no further apparent, company specific catalysts. However, we continue to expect a strong performance in the medium and longer term. SAP has clearly outperformed the market and the sector recently, thanks to positive operational news and new product launches. The stock has also outperformed the market by 9.9% since its inclusion in the Top Pick list. Although SAP is one of the most attractive longer-term investments in the European tech sector, the stock is looking a bit overbought in the short term. 28.04.2010 MICROSOFT 10.03.2011 SAP 24.02.2011 SYNGENTA 24.02.2011 We are reducing the exposure to agricultural stocks in the Top Pick list after a 23.09.2010 very strong performance. Despite K+S being the riskier stock of the two, we prefer it for now as we see a higher potential for earnings upgrades in the shortterm. We maintain our Outperform rating and price target of CHF 330. Despite excellent sales figures investors took profit. The outstanding share price performance in 2010 and the strength of the Swiss franc are the main factors. The stock gained 37.7% since inception and outperformed the SMI by about 33%. Due to the healthy growth outlook we stick to our Outperform rating. Currently, we see more price potential in other sectors, however. 27.01.2010 SWATCH GROUP BR 19.01.2011 FRANCE TELECOM 13.01.2011 We want to add more risk to our list which is why we are removing France 25.08.2010 Telecom – a relatively defensive stock. France Telecom is still attractively valued and offers a sustainable dividend yield of above 8%. France Telecom is up by 3% since it was added to the list. Consumer Staples lost attractiveness owing to negative earnings revisions and price momentum. Due to its strong positioning in emerging markets, attractive margin, high dividend yield and the relatively compelling valuation against the sector we stick to our Outperform Rating for BAT, however. The reinsurance industry has seen its capital base recovering to a pre-crisis level in the last 18 months. This likely to result in pricing pressure. Swiss Re has excess capital of about CHF 2-3 bn, which will be returned to shareholders probably not before 2012. Since the inclusion in the Top Fundamental Picks, the share has outperformed both the European insurance sector by 19.8% and the SMI by 10.7%. We are restricted on Sanofi-aventis. The company has recently made a public offer to acquire Genzyme, a U.S. biotechnology company. Recent news flow on mobile network equipment have pointed to a further deterioration of pricing levels and a positive trigger for the stock does not seem to materialize for now. However, Ericsson remains Outperform-rated, due to the inexpensive valuation and attractive growth outlook. The restructuring of the US business is almost complete and Ahold is already earning high margins in the Netherlands. Apart from share buybacks, Ahold will likely use its high cash holding for targeted acquisitions, which could support the share price. However, these catalysts are likely to take time to materialize. 22.09.2010 BRITISH AMERICAN TOBACCO 09.12.2010 SWISS RE 28.10.2010 01.07.2009 SANOFI-AVENTIS ERICSSON 21.10.2010 23.09.2010 13.01.2010 24.06.2010 AHOLD 22.09.2010 18.06.2009 Explanatory notes •Our views are intended to be fundamental in nature. •Where possible the portfolio should reflect sector views with proportionatley a larger number of stocks where we have an overweight view. •We will provide a brief rationale for our recommendations each week. Please see our company notes for further colour. 6 14.04.2011 CL Top Dividend Picks Company PHILIP MORRIS INTL Consumer Staples Country ISIN / Valor US US US US US US GB US7181721090 3'754'629 US7170811035 962'004 US50075N1046 1'213'349 US5801351017 950'605 US20825C1045 1'330'331 US88579Y1010 1'405'105 GB00B16GWD56 2'582'928 GB0002875804 909'525 ES0178430E18 826'858 IT0003132476 1'252'314 FR0010208488 2'200'367 DE0005552004 1'124'244 DE0008404005 322'646 GB00B03MLX29 1'987'674 DE000BASF111 11'450'563 CH0011075394 1'107'539 CH0008742519 874'251 CH0008038389 803'838 CH0012005267 1'200'526 CH0038863350 3'886'335 Nestlé Marks & Spencer Rating Crncy Price OP OP OP OP OP OP OP OP OP USD USD USD USD USD USD GBp GBp EUR EUR OP EUR EUR OP OP OP OP OP EUR EUR EUR CHF CHF CHF OP OP CHF CHF 66.1 20.5 32.4 76.9 77.7 92.9 176.4 Market Cap in m 118'808 163'582 56'665 80'219 111'027 66'098 90'852 Performance 3 m % 12 m % 2010E 18.2 13.5 4.0 6.7 16.5 6.1 2.7 12.4 1.8 -1.3 -2.7 -3.8 9.9 1.0 7.9 2.4 -1.1 5.3 -6.0 1.0 31.9 24.2 9.8 15.1 45.0 13.4 25.8 17.9 7.7 5.1 1.1 6.3 17.6 19.7 40.4 -0.8 8.9 18.0 -8.7 2.0 31.2 1.7 1.7 5.9 1.6 4.2 1.0 5.7 3.3 1.3 1.0 1.6 1.0 1.6 2.9 1.3 3.1 1.2 2.0 3.1 P/BV 2011E 48.7 1.5 1.5 5.3 1.5 3.8 1.0 5.0 3.3 1.1 0.9 1.5 1.0 1.4 2.5 1.2 3.0 1.2 1.8 2.9 2012E 77.5 1.4 1.4 4.9 1.3 3.3 0.9 4.5 3.2 1.0 0.9 1.4 0.9 1.2 2.2 1.1 2.8 1.2 1.7 2.8 2010E 17.1 9.2 16.0 16.7 13.1 16.2 11.4 14.5 10.2 9.2 13.8 12.1 9.2 11.8 11.5 10.6 11.2 20.7 10.7 16.6 P/E 2011E 14.8 9.2 14.5 15.2 9.7 14.9 10.6 13.1 9.7 7.6 13.0 10.5 8.7 8.7 10.5 9.4 11.0 19.4 10.1 16.1 2012E 13.4 9.0 12.9 14.0 8.7 13.3 10.6 12.0 9.3 7.0 11.7 9.6 7.9 7.8 9.7 8.5 10.7 19.0 10.0 14.6 Dividend Yield Dividend 2010E 2011E 2012E Frequency 3.7% 3.5% 3.6% 3.0% 2.8% 2.3% 4.7% 4.5% 7.8% 5.8% 5.6% 4.8% 4.4% 4.6% 3.4% 6.3% 5.4% 4.8% 4.2% 3.2% 4.1% 3.9% 3.7% 3.2% 3.2% 2.4% 5.0% 4.9% 8.9% 6.0% 5.8% 5.3% 4.8% 4.6% 3.8% 6.8% 5.5% 4.8% 4.4% 3.6% 4.7% 4.2% 3.8% 3.6% 3.5% 2.5% 5.6% 5.4% 9.8% 6.2% 6.1% 5.6% 5.1% 4.8% 4.0% 7.0% 5.9% 4.9% 4.6% 4.0% Quarterly Quarterly Quarterly Quarterly Quarterly Quarterly Semi-annual Semi-annual Semi-annual Semi-annual Semi-annual Annual Annual Quarterly Annual Annual Annual Annual Annual Annual Ex-Date Expected 21.06.2011 04.05.2011 27.06.2011 26.05.2011 19.05.2011 18.05.2011 01.06.2011 17.08.2011 05.11.2011 23.05.2011 confirmed 04.05.2011 confirmed 26.05.2011 confirmed 05.05.2011 confirmed 04.05.2011 09.05.2011 confirmed 04.04.2012 26.04.2011 confirmed 21.04.2011 confirmed 24.02.2012 18.04.2011 confirmed Other Liquid Listings PFIZER Health Care KRAFT FOODS Consumer Staples MCDONALD'S Consumer Discretionary CONOCO PHILLIPS Energy 3M COMPANY Industrials VODAFONE Telecommunication Services US US BRITISH AMERICAN TOBACCO GB Consumer Staples 2523.5 50'234 17.9 17.2 27.1 12.8 103.3 25.2 63.0 239.8 407.1 73.2 49.8 53.5 81'627 68'972 61'073 15'439 46'950 158'047 57'846 35'131 21'089 3'980 131'301 185'551 TELEFONICA Telecommunication Services ES IT FR DE DE NL DE CH CH CH CH CH ENI Energy US US GDF SUEZ Utilities DEUTSCHE POST Industrials ALLIANZ Financials US,UK ROYAL DUTCH SHELL A Energy BASF Materials ZURICH FIN SERVICES Financials US US SWISSCOM Telecommunication Services SWISS PRIME SITE Financials NOVARTIS Health Care NESTLE Consumer Staples US Last changes In: Out: 31.03.2011 31.03.2011 Clariden Leu Ltd. Bahnhofstrasse 32, CH-8070 Zurich Tel. +41 58 205 75 75 Fax +41 58 205 37 88 Disclaimer This document was produced by and the opinions expressed are those of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Clariden Leu Ltd. to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable and accurate, but Clariden Leu Ltd. does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. The issuer of the securities mentioned herein or Clariden Leu Ltd. may have traded on the basis of the information and analysis contained in this publication before they were made available to the clients of Clariden Leu Ltd. Clariden Leu Ltd. may legally participate in other financial transactions with the issuers of the securities mentioned herein, invest in them, provide services to them or acquire business from such issuers and/or take out positions on such securities or hold options or carry out transactions with them. Investments in foreign currencies are subject to exchange rate fluctuations. Consult the specific securities prospectus or speak to your advisor before making any investment decisions. Neither this document nor any copy thereof may be sent or taken into the United States or distributed in the United States. In certain other jurisdictions the distribution may be restricted by local law or regulation. This document may not be reproduced in whole or in part without the written consent of Clariden Leu Ltd. 7 04/14/2011 Sector Recommendations Consumer Discretionary Sector Top Picks VW, Swatch, Adidas, Carnival, Gategroup, WPP, Walt Disney Subsectors - Automobiles & Components - Consumer Durables - Consumer Services - Media - Retailing Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive - - Fiscal stimulus, low borrowing rates, high demand from Asia and signs of recovery from the labor market have been important supports for the sector. This coupled with strong inventory and cost management has propelled earnings and sent margins to a new all-time high. Further labor market gains will be required to turn the sector's earnings estimates revisions in positive territory again (currently neutral), and a renewed downturn in housing would hamper consumers' sentiment. Input cost inflation mainly puts demand in emerging markets to the test. The tragedy in Japan weighs on the sentiment for luxury goods stocks. Automobile: Rising raw material costs are an issue for the car industry, especially for volume players as they have limited pricing power. Consumer Staples Sector Top Picks Tesco, Nestlé, Danone, Kraft, ABI BAT, PMI, Henkel, P&G Subsectors - Food & Staples Retailing - Food Beverage & Tobacco - Household & Personal Products Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive - + Rising raw material costs are weighing on gross profits. The negative pricing seems to have come to an end, however positive pricing will become increasingly difficult to push through as the economic environment in Western Europe and the US remains tough. Cost cutting defends profitability meanwhile. A strong positioning in fast growing emerging markets is in favor of producers of consumer staples, however, input cost inflation mainly puts demand in emerging markets to the test. Staple Retailing: A (too) strong increase in food prices could weigh on food retailers as it could also be hard for them to pass on higher raw material prices. Energy Sector Top Picks BG, BP, Royal Dutch Shell Fugro, Chevron, ConocoPhillips Subsectors - Exploration & Production - Integrated Oils - Oil Services Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive + + Global oil markets have been steadily tightening. This process is expected to continue in 2011. Investors are starting to anticipate the possibility of much higher prices within a few years. Nat gas prices are low due to weakness in Europe and the massive increase in supply now coming on stream in the US. As investment in US nat gas projects is scaled back, prices should rise. Our focus is on oil rather than natural gas related investments. We also believe that the outlook for service companies and companies supplying capital equipment to energy concerns is favorable. Gradually the Macondo spill is moving to the background – but activity in the Gulf of Mexico will remain depressed until the regulatory fall-out becomes clearer. Financials Sector Top Picks Citi, JPM, Barclays, BNP Allianz, Zurich Subsectors - Banks - Diversified Financials - Insurance - Real Estate Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive + = Insurers: By its nature, the insurance sector has a high exposure to the recent events in Japan with preliminary estimates for insured losses of about USD 25bn. Only a minor part of the economic losses will be paid by private insurers. Earthquake losses in the residential segment are not covered by private insurers. A Japanese government entity covers these losses without any material reinsurance. The insurance industry will still experience substantial losses in the industrial and commercial lines. However, tsunami coverage is usually not part of the normal policy wording. Losses stemming from the nuclear events are usually excluded in P&C but not in life insurace policies. For European insurers, we don't expect capital-threatening claims. Banks: We continue to prefer US names. Health Care Sector Top Picks Fresenius M.C., Medco Health, Novartis, Pfizer Subsectors - Pharmaceuticals - Biotechnology - Health Care Equipment - Health Care Services Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive = - Pharma companies guided expectations down for 2011 as they continue to feel the impact of healthcare reform in the U.S. and Europe. New product launches, which are a key positive driver of the sector continue to be too scarce to change sentiment. We recommend to diversify into healthcare services, which can benefit from an increased usage of generics (Medco Health) or have predictable demand and pricing environment (FMC). * relative to MSCI World Clariden Leu Ltd Bahnhofstrasse 32, CH-8070 Zurich Tel. +41 58 205 75 75 Fax +41 58 205 37 88 Disclaimer This document was produced by and the opinions expressed are those of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Clariden Leu Ltd. to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable and accurate, but Clariden Leu Ltd. does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. The issuer of the securities mentioned herein or Clariden Leu Ltd. may have traded on the basis of the information and analysis contained in this publication before they were made available to the clients of Clariden Leu Ltd. Clariden Leu Ltd. may legally participate in other financial transactions with the issuers of the securities mentioned herein, invest in them, provide services to them or acquire business from such issuers and/or take out positions on such securities or hold options or carry out transactions with them. Investments in foreign currencies are subject to exchange rate fluctuations. Consult the specific securities prospectus or speak to your advisor before making any investment decisions. Neither this document nor any copy thereof may be sent or taken into the United States or distributed in the United States. In certain other jurisdictions the distribution may be restricted by local law or regulation. This document may not be reproduced in whole or in part without the written consent of Clariden Leu Ltd. 8 04/14/2011 Sector Recommendations Industrials Sector Top Picks ABB, Sulzer, Kaba Siemens, 3M, Honeywell, CSX Subsectors - Capital Goods - Commercial Services - Transportation Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive = + Industrials was the second best performing sector in 2010. The sector consistently outperformed throughout the year. Industrials earnings momentum is the second strongest in the market. The cyclical recovery for these companies continues at a solid pace. The sector does no longer look cheap on our valuation measures. The loss of momentum in many leading indicators calls for a mid term correction. Mid to long term the sector might get another boost from rising energy prices and also from the consequences of the Japanese catastrophe. Energy efficiency and energy safety is a appropriate response to this issue. ABB and Siemens are good bets in this space. Information Technology Sector Top Picks Microsoft, SAP, HP, Ericsson Corning Subsectors - Semiconductors - Software & Services - Technology Hardware Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive - + Japan is a very important country for the global technology supply chain, for example in resins widely used for printed circuit boards or in semiconductors, where Japan accounts for over 30% of global capacity according to Citigroup. Substantial damage at some factories, rolling blackouts and already low levels of spare capacities in some areas even before the recent earthquakes are likely to trigger supply chain disruptions in the months ahead. We continue to favour rather defensive companies with high cash flows and strong balance sheets and see attractive opportunities. Software and IT services companies are generally much better protected in operational terms than pure hardware plays. Materials Sector Top Picks BASF, Lonza, DuPont Alcoa, Rio Tinto Subsectors - Chemicals - Construction - Metals&Mining Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive + + Prices of most metals have reached new highs in January and February and are currently providing record profit margins to miners. However, the risks are also substantial: Rising inventories of at least some metals, high oil and food prices, a partially overheated Chinese real estate market, high government debt levels and now a potential nuclear desaster in Japan. In mining, we favour more defensive companies with low production costs. Uranium equities have lost at least some of their long-term drivers. In chemicals, we currently prefer large, diversified companies with good pricing power such as BASF and DuPont. Telecommunication Services Sector Top Picks Swisscom, Telefonica France Telecom, AT&T Subsectors none Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive + - The Telecom sector trades at a small discount to the market. The dividend yield at 5.5% is twice the global average but the payout ratio is also considerably higher. The earnings growth outlook is uninspiring with EPS forecast to grow by 5-6% in 2011. With the sector generating little revenue growth this may remain an issue. A bright spot is that the sector continues to generate lots of cash and some companies are using this for buybacks. Utilities Sector Top Picks Enel Subsectors none Rating* 3 Mt. 12 Mt neg Earnings revisions neutral pos neg Momentum neutral pos expensive Valuation neutral attractive = - The accidents at nuclear power plants in Japan have had several consequences for European utilities: Germany has delayed a decision to prolong the lifetime of nuclear plants, the price of gas has increased in anticipation of a higher demand and power price futures have also gone up. On balance, higher gas and power prices are likely to outweigh a lower utilization of nuclear power assets. We have become more positive on utilities and upgraded Enel. We like Enel for its favorable energy mix and supportive regulatory environment in its domestic market Italy. We continue to be cautious on German utilities as they are pressured by high debt, regulatory demands to invest more in renewable forms of energy and generally less support from the government. * relativ zum MSCI World Clariden Leu Ltd Bahnhofstrasse 32, CH-8070 Zurich Tel. +41 58 205 75 75 Fax +41 58 205 37 88 Disclaimer This document was produced by and the opinions expressed are those of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation by or on behalf of Clariden Leu Ltd. to any person to buy or sell any security. Any reference to past performance is not necessarily a guide to the future. The information and analysis contained in this publication have been compiled or arrived at from sources believed to be reliable and accurate, but Clariden Leu Ltd. does not make any representation as to their accuracy or completeness and does not accept liability for any loss arising from the use hereof. The issuer of the securities mentioned herein or Clariden Leu Ltd. may have traded on the basis of the information and analysis contained in this publication before they were made available to the clients of Clariden Leu Ltd. Clariden Leu Ltd. may legally participate in other financial transactions with the issuers of the securities mentioned herein, invest in them, provide services to them or acquire business from such issuers and/or take out positions on such securities or hold options or carry out transactions with them. Investments in foreign currencies are subject to exchange rate fluctuations. 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This document may not be reproduced in whole or in part without the written consent of Clariden Leu Ltd. 9 EQUITY MODEL PORTFOLIO 14.04.2011 / Investment Research, Tel. +41 58 205 75 75, E-Mail: [email protected] Switzerland Stock Energy Rating Europe Stock Rating North America Stock Rating BP PLC ROYAL DUTCH SHELL A OP OP CHEVRON CONOCO PHILLIPS OP OP Materials LONZA GROUP SYNGENTA OP OP BASF K+S AG RIO TINTO OP OP OP ALCOA OP Capital Goods KABA OP PHILIPS ELECTRONICS SIEMENS OP OP 3M COMPANY CATERPILLAR OP OP Commercial Services SGS OP Consumer Durables LVMH OP Consumer Services GATEGROUP HOLDING OP CARNIVAL CORP OP Media WPP GROUP OP WALT DISNEY OP Food, Beverage & Tobacco NESTLE OP ANHEUSER-BUSCH INBEV BRITISH AMERICAN TOBACCO OP OP PHILIP MORRIS INTL OP Household & Personal Products HENKEL OP PROCTER & GAMBLE OP Health Care Equipment & Services FRESENIUS MEDICAL CARE OP MEDCO HEALTH SOL OP Pharma & Biotech NOVARTIS ROCHE GS OP MP PFIZER OP Banks BARCLAYS BNP PARIBAS OP OP Explanation °: recommended for smaller portfolios *: neutral sector weight 10 EQUITY MODEL PORTFOLIO 14.04.2011 / Investment Research, Tel. +41 58 205 75 75, E-Mail: [email protected] Switzerland Stock Diversified Financials UBS Rating Europe Stock Rating North America Stock Rating OP CITIGROUP JPMORGAN CHASE OP OP Insurance SWISS RE r ALLIANZ OP Software SAP OP Technology Hardware ERICSSON OP CORNING HEWLETT-PACKARD OP OP Telecommunication SWISSCOM OP FRANCE TELECOM VODAFONE OP OP Out: SOCIETE GENERALE (10.03.2011) KINGFISHER (10.03.2011) SANOFI-AVENTIS (17.03.2011) DEUTSCHE TELEKOM (17.03.2011) GDF SUEZ (07.04.2011) Changes since 05.03.2011 In: ROCHE GS (10.03.2011) GATEGROUP HOLDING (07.04.2011) Out: In: VODAFONE (17.03.2011) In: PHILIP MORRIS INTL (10.03.2011) PFIZER (17.03.2011) Out: MICROSOFT (10.03.2011) HONEYWELL INTL (17.03.2011) This document does not constitute an offer or an invita tion to buy or sell any security and the opinions expressed herein are those of Clariden Leu Ltd. at a particular tim e. Changes in the overall environment ma y affect those appr aisals. Clariden Leu Ltd. as the editor does not accept any liability for the content of this doc um ent. It is expressly pointed out that Clariden Leu Ltd. may invest or m ay have invested in the securities referred herein. Neither this docum ent nor any copy thereof m ay be sent or taken into the United States or distributed in the United States. In certain other jurisdic tions the distribution may be restricted by local law or r egulation. This document m ay not be reproduced either in whole, or in part, without the written perm ission of Clariden Leu Ltd. Explanation °: recommended for smaller portfolios *: neutral sector weight 11 Rating Changes Equities Sanofi-aventis restricted 13.04.11 MP The acquisition of Genzyme helps Sanofi-aventis to make up for some profits lost to patent expiries in the period 2011-13. Sentiment towards Sanofi has been cautious given the com-pany's mixed track record in the development and launch of new drugs. The absence of promising new launches in the next three years mainly justifies that we resume coverage with a Marketperform. The price target assumes that Sanofi's valuation gap relative to peers could close somewhat. 12 Agenda: Company – Economic events Monday April 18, 2011 Company results Citigroup Kühne & Nagel Philips Electronics Texas Instruments Tuesday April 19, 2011 Company results Actelion Goldman Sachs IBM Intel Johnson & Johnson Novartis Temenos Tesco US Bancorp Wednesday April 20, 2011 Company results Abbott Laboratories American Express Amgen AT&T United Technologies Thursday April 21, 2011 Company results Du Pont General Electric Honeywell McDonald's Newmont Mining Nokia Philip Morris International Schlumberger Verizon Communications Friday April 22, 2011 Company results Economic events 10:00 10:00 US NAHB Housing Market Index EC Euro-Zone Consumer Confi. Economic events 01:00 JN Consumer Confidence 02:00 EC EU 25 New Car Registrat. 05:00 EC Construction Output WDA 08:30 US Building Permits MOM% 08:30 US Housing Starts MOM% Economic events 10:00 US Existing Home Sales MoM 10:00 US Existing Home Sales Economic events 01:00 JN Leading Index Ci 04:30 GE IFO – Business Climate 04:30 UK Retail Sales Ex Auto Fuel YoY 08:30 US Initial Jobless Claims 08:30 US Continuing Claims 10:00 US House Price Index MoM 10:00 US Leading Indicators 10:00 US Philadelphia Fed. Economic events 13 Figures Last price (04/14/11) Switzerland SMI SPI SMIM United States Dow Jones S&P500 Nasdaq S&P 400 Midcap S&P 600 Smallcap Brazil Brazil Bovespa Europe Stoxx50 Euro-Stoxx 50 Stoxx 600 Great Britain FTSE100 Germany Dax Xetra France CAC40 Italy FTSE MIB Japan Nikkei 225 Russia Russian RTS China Shanghai B Share Emerging Markets MSCI EM Δ 1W Δ 3M Δ 1.1.11 Δ 3Y Δ 5Y 6378.4 5819.1 1403.9 12271.0 1314.4 2761.5 974.1 435.6 66486.5 2607.7 2927.6 277.5 5974.8 7153.9 3982.3 21920.3 9653.9 2042.3 328.3 1185.3 -1.2% -1.2% -0.8% -1.3% -1.6% -1.4% -2.6% -3.7% -3.7% -0.7% -0.7% -1.1% -0.5% -0.5% -1.0% -1.0% 0.6% -2.3% 1.8% -1.5% -1.7% -1.4% -0.8% 5.2% 2.9% 1.2% 5.7% 3.5% -6.0% -1.7% 1.5% -1.3% 1.0% 1.5% 0.8% 3.7% -8.1% 9.8% 6.4% 2.2% 0.2% 0.3% -1.3% 6.7% 5.1% 4.3% 7.8% 5.1% -4.1% 2.0% 6.0% 1.7% 3.1% 3.8% 5.3% 9.6% -4.9% 16.5% 7.7% 3.3% -4.3% -3.0% 6.1% 8.7% 5.5% 24.2% 27.8% 24.3% 6.2% -4.1% -9.0% 0.5% 15.7% 8.7% -5.7% -24.0% -23.7% 0.8% 35.0% 9.8% -9.7% -6.0% 15.0% 26.0% 13.3% 24.2% 33.5% 19.0% 74.5% -9.2% -4.9% -0.4% 22.2% 21.3% -6.1% -27.5% -39.5% 39.2% 288.0% 65.7% Sectors United States Energy Materials Industrial Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunications Utility Europe Energy Materials Industrial Consumer Discretionary Consumer Staples Health Care Financials Information Technology Telecommunications Utility Last price (04/14/11) Δ 1W Δ 3M Δ 1.1.11 Δ 3Y Δ 5Y 300.3 174.3 145.8 116.5 121.9 105.7 73.6 94.8 38.8 95.4 -4.0% -3.7% -2.4% -0.9% 0.7% 0.3% -2.5% -0.8% -0.6% -1.9% 8.6% 1.8% 4.4% 3.8% 4.5% 5.3% -0.5% -1.1% 5.2% 1.5% 11.5% 2.6% 7.2% 4.6% 4.7% 7.6% 2.6% 2.6% 3.5% 2.5% 1.5% -4.4% 5.1% 34.3% 18.9% 15.0% -27.5% 22.9% 9.7% -11.2% 50.1% 35.6% 17.7% 26.2% 51.2% 20.9% -40.1% 27.7% 26.7% 22.8% 175.8 263.1 156.9 95.2 151.9 94.9 63.0 50.4 73.0 120.6 -2.5% -1.4% -2.6% -2.3% 0.2% 0.6% 0.1% -1.9% -1.0% 0.8% 1.3% -0.7% -1.7% -4.6% 0.6% -0.7% 0.6% 0.2% 2.4% 3.2% 5.6% -0.5% 0.9% -2.4% -1.5% 0.6% 7.6% 4.5% 5.2% 4.8% 0.7% -5.6% 0.6% 10.5% 10.1% 8.5% -36.7% -16.4% -2.7% -26.4% -5.1% 33.5% 3.7% 0.9% 33.0% -15.5% -47.9% -38.3% 7.5% -6.9% 14 Performance SMI-members since 1.1.2011 10.7 10.0 9.6 8.3 8.1 5.9 5.6 5.1 4.1 3.2 1.9 -0.9 -2.3 -3.6 -4.2 -5.2 -5.7 -6.4 -8.2 -9.2 -15 -10 -5 0 5 10 15 Performance Euro Stoxx 50-members since 1.1.2011 24.6 23.3 23.1 22.9 20.7 AXA SA ING GROEP NV-CVA ENEL SPA CREDIT AGRICOLE SA ALSTOM COMPAGNIE DE SAINT-GOBAIN ALLIANZ SE-REG SAP AG SOCIETE GENERALE DEUTSCHE TELEKOM AG-REG BANCO BILBAO VIZCAYA ARGENTA REPSOL YPF SA UNICREDIT SPA BNP PARIBAS ASSICURAZIONI GENERALI TELECOM ITALIA SPA INTESA SANPAOLO IBERDROLA SA DEUTSCHE BANK AG-REGISTERED SANOFI-AVENTIS BANCO SANTANDER SA VINCI SA TELEFONICA SA TOTAL SA ENI SPA BASF SE CRH PLC DEUTSCHE BOERSE AG UNIBAIL-RODAMCO SE MUENCHENER RUECKVER AG-REG DANONE GDF SUEZ VIVENDI CARREFOUR SA SIEMENS AG-REG FRANCE TELECOM SA AIR LIQUIDE SA BAYER AG-REG SCHNEIDER ELECTRIC SA L'OREAL DAIMLER AG-REGISTERED SHARES BAYERISCHE MOTOREN WERKE AG E.ON AG ANHEUSER-BUSCH INBEV NV UNILEVER NV-CVA RWE AG KONINKLIJKE PHILIPS ELECTRON ARCELORMITTAL LVMH MOET HENNESSY LOUIS VUI NOKIA OYJ -20 -10 0 10 20 30 SYNGENTA AG-REG UBS AG-REG TRANSOCEAN LTD SWISS REINSURANCE CO LTD-REG SGS SA-REG 16.9 ZURICH FINANCIAL SERVICES AG HOLCIM LTD-REG CREDIT SUISSE GROUP AG-REG ABB LTD-REG SYNTHES INC-144A/REGS ACTELION LTD-REG SWISSCOM AG-REG NESTLE SA-REG ROCHE HOLDING AG-GENUSSCHEIN ADECCO SA-REG 9.8 16.1 15.0 14.6 14.3 13.4 13.4 11.8 11.3 11.2 10.3 SWATCH GROUP AG/THE-BR LONZA GROUP AG-REG CIE FINANCIERE RICHEMON-BR A JULIUS BAER GROUP LTD NOVARTIS AG-REG 7.4 7.3 6.9 5.9 5.7 5.5 5.4 Performance Dow Jones-members since 1.1.2011 16.8 PFIZER INC 14.9 13.8 13.7 11.7 11.2 10.5 9.0 9.0 7.9 7.6 7.6 7.5 7.4 7.4 7.0 5.3 2.8 2.7 2.3 0.2 -0.5 -0.6 -2.1 -2.3 -3.6 -5.9 -7.1 -8.2 -14.7 -20 -15 -10 -5 0 5 10 15 20 CATERPILLAR INC CHEVRON CORP EXXON MOBIL CORP IBM WALT DISNEY CO BOEING CO/THE JPMORGAN CHASE GENERAL ELECTRIC DU PONT (EI) 3M CO TRAVELERS COS IN ALCOA INC HOME DEPOT INC AMERICAN EXPRESS UNITED TECH CORP VERIZON COMMUNIC KRAFT FOODS INC AT&T INC COCA-COLA CO/THE MCDONALDS CORP BANK OF AMERICA WAL-MART STORES PROCTER & GAMBLE HEWLETT-PACKARD JOHNSON&JOHNSON INTEL CORP MERCK & CO MICROSOFT CORP CISCO SYSTEMS -30 5.4 5.4 4.8 4.6 2.9 1.9 1.4 1.1 1.1 1.0 0.7 0.4 -0.2 -0.2 -0.4 -1.1 -1.5 -1.8 -1.9 -3.0 -3.2 -6.2 -7.2 -8.9 -9.7 -22.5 15 Markets and Forecasts at a Glance Equity Indices 31.12.10 S&P 500 DJ Euro Stoxx 50 FTSE 100 SMI Topix** MSCI EM USD 1258 2793 5900 6436 899 1151 13.04.11 1314 2928 5975 6380 847 1185 YTD 4.5% 4.9% 1.3% -0.9% -5.8% 2.9% 12mth fwd 12mth Earnings P/E Growth 13.1 14.6% 9.5 10.3 11.6 12.6 11.1 11.8% 16.8% 9.8% 11.0% 15.7% Dividend Yield 2.2% 4.4% 3.4% 3.0% 2.1% 2.3% Risk Premium 4.2% 7.1% 6.1% 6.5% 6.7% 2.7% 3mth* ≈ ↑ ↓ ↓ ≈ ↑ 12mth* ↓ ↑ ≈ ↓ ≈ ↑ Sources: Clariden Leu, Datastream, Bloomberg, IBES * relative to MSCI World / ** one day after Equity Outlook relative to MSCI World Regions North America UK Europe ex UK ex CH Switzerland Japan EMMA Asia EMMA Latin America EMMA Eastern Europe 3mth 12mth = + = + + = = + = + + + Sectors Energy Materials Industrials Cons. Discretionary Consumer Staples Health Care Financials Inf. Technology Telecom Utilities 3mth 12mth + + = = + + = + + + + = + - Fixed Income Outlook relative to Cash 3mth Government CHF EUR USD Investment Grade Emerging Market Bonds High Yield Bonds Convertible Bonds Rating: = = = + = +(++) =(+) 12mth + + + + ++ highly favorable + favorable = neutral – unfavorable -- Highly unfavorable Source: Clariden Leu Interest Rates Central Bank Interest Rates (Last forecast change as of 06.04.11) 31.12.10 (%) USA Eurozone UK Switzerland Japan 0.25 1.00 0.50 0.25 0.10 31.12.10 (%) USA Eurozone UK Switzerland Japan 3.29 2.96 3.40 1.72 1.13 14.04.11 (%) 0.25 1.25 0.50 0.25 0.10 14.04.11 (%) 3.46 3.42 3.68 2.11 1.29 YTD (Bp) 0 25 0 0 0 YTD (Bp) 16 45 28 39 16 12mth 0.50% 1.75% 1.25% 0.75% 0.10% ↑ ↑ ↑ ↑ ≈ 1.0 2.0 3.0 Yield in % 4.0 LIBOR 10-Year Treasury Yields (Last forecast change as of 13.04.11) 12mth 3.75% 3.50% 4.00% 2.25% 1.50% ↑ ↑ ↑ ↑ ↑ 0 0 2 4 6 Time to maturity (Years) USD EUR GBP CHF JPY 8 10 Source: Bloomberg Exchange Rates Current Spot (14.04.11) USD CHF USD JPY EUR USD EUR CHF EUR JPY GBP CHF GBP USD 0.89 83 1.45 1.29 120 1.46 1.63 Bloomberg Consensus Forecasts 3mth 12mth 0.93 85 1.40 1.30 119 1.50 1.61 0.97 88 1.37 1.33 121 1.58 1.63 CL Forecasts as of 15.03.11 3mth 0.9 - 0.94 82 - 86 1.37 - 1.41 1.26 - 1.3 115 - 119 1.45 - 1.49 1.58 - 1.62 12mth 0.98 - 1.02 90 - 94 1.34 - 1.38 1.34 - 1.38 123 - 127 1.6 - 1.64 1.6 - 1.64 Risk Appetite Indicator Risk averse Commodities 31.12.10 Gold per oz Oil (WTI) per barrel 1418.75 91.38 14.04.11 1461.2 107.11 YTD 3% 17% 3mth = = 12mth ↑ ↑ 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 Source: Datastream, Clariden Leu ↑ positive outlook ≈ neutral outlook ↓ negative outlook Please see disclaimer on page 2. Clariden Leu Ltd. Bahnhofstrasse 32, CH-8070 Zurich Tel. +41 58 205 75 75 Fax +41 58 205 37 88 Risk averse Risk seeking Risk seeking 16 Company Note 14.04.2011 ALCOA Price (in USD) Price Target (12–18 months) Potential Sector Region Country Model Portfolio Valor/Bloomberg/Reuters Risk Class 16.55 20.00 20.8% Materials North America USA Yes 986'052/aa us /AA.N Dynamic Rating relative to regional sector Outperform Investment case: • Aluminium is very strong relative to its weight, corrosion resistant and a very good electricity conductor. Gains in market share in the transportation and energy sectors. • Excess production of Alumina will in the future be sold at more flexible, historically often higher market prices. Renegotiations of contracts to be completed by 2015. • Opportunities: Economic recovery, increasing alumina sales prices, completed cost reductions, energy mix mainly consists of renewable energies. • Risks: Global excess capacity and high aluminium inventories, economic risks (e.g. downturn in China), composites replacing aluminium (e.g. in aircraft construction). • Conclusion: Attractive medium-term upside potential. AL CO A 50 14 .0 4.2 0 11 50 Aluminium price increases surpass cost inflation Last Event: Q1 earnings of USD 308 m were rather better than expected, though the 22% rise in sales fell somewhat short of predictions. The forecast of 12% growth in global aluminium demand for 2011 was confirmed. However, Alcoa has warned of rising costs, notably for natural gas and diesel. Comment: A number of aluminium smelters have restarted their operations in China after energy-saving measures have expired, which has aggravated overcapacity in the sector again. However, production costs in China are much higher than Alcoa's. Aluminium stocks on the London Metal Exchange (LME) are equivalent to 41 days of global demand, which is still high (LT average is 15 days). Since these inventories are often financed by loans, rising interest rates may trigger their sale. Despite this risk, though, the aluminum price has so far risen much faster than Alcoa's production costs. As with other metals shares, the short-term risks for Alcoa are high (energy prices, slowdown in China). In the medium term, however, the stock offers substantial upside. Per Share Data EPS in USD P/E Ratio Dividend Yield Income Statement Revenues Net Income Performance Absolute Please see disclaimer on page 2. in mio. USD 45 45 40 40 35 35 30 30 25 25 20 20 15 15 10 10 5 2 006 2007 2008 2009 2010 5 ALC OA H OCH 46 .4 5 18 .0 7. 20 07 ,TIEF 5 .4 8 1 8 .03 .2 00 9 ,SCHL USS So.5 5 1 3Th omso n Dat ast rea m 16 ur ce: .04 .2 01 1 2010 0.2 69.0 0.7% 2010 21'013 254 1 Month 3.2 2011E 1.3 12.4 0.7% 2011E 24'509 1'495 3 Months 5.3 2012E 1.7 9.9 0.9% 2012E 25'610 1'568 1 Year 16.5 Description Alcoa is one of the world's biggest aluminium producers with activities in all segments of the industry (bauxite mining, alumina refin ing, aluminium electrolysis, component manufacturing, recycling etc.). Excess production of the intermediate product alumina is sold to third parties. Alcoa also owns and operates electric power stations, which generate approximately 23% of the electricity used in its aluminium smelters. Christian Fröhlich Clariden Leu AG Claridenstrasse 19, CH-8070 Zürich Tel. +41 58 205 37 32 E-Mail: [email protected] Page 1/2 17 ALCOA INC Financials & Valuation* Profit & Loss USD mn 2008 26'901 3'313 2'079 8% -74 2009 18'439 359 -952 -5% -1'151 2010 21'013 2'705 1'254 6% 254 2008 37'822 23'490 14'332 9'816 0.7 2011E 24'509 4'420 3'044 12% 1'512 2009 38'472 22'952 15'520 8'378 0.5 2012E 25'610 4'715 3'633 14% 1'618 2010 39'293 22'207 17'086 7'622 0.4 Earnings Per Share 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 -0.5 -1.0 -1.5 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2011 Sales EBITDA Operating profit Margin Net profit Balance Sheet USD mn Total Assets Total Liabilities Total Shareholders' Equity Net debt Net debt/Equity P/E Ratio 35 Per Share Data USD EPS Dividend Book Value Ratios P/E P/Book P/Sales EV/EBITDA EV/Sales Dividend yield 1.0 0.7 14.6 2008 12.1 0.8 0.3 6.5 0.8 6.0% -0.9 0.3 12.7 2009 n.m. 1.3 0.8 75.9 1.5 1.6% 0.5 0.1 13.3 2010 28.5 1.2 0.7 9.9 1.3 0.8% 1.4 0.1 14.1 2011E 11.9 1.2 0.7 6.4 1.2 0.7% 1.6 0.1 15.7 2012E 10.6 1.1 0.7 5.7 1.0 0.9% Operating Margin (%) 16 2008 2009 2010 2011E 2012E 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 34% 30% 22% 13% 1% 2012 Profitability ROE ROA Coverage Ratios Net debt/EBITDA Div payout 2008 -1% 0% 2008 3.0 244% 2009 -10% -3% 2009 23.3 n.m. 2010 2% 1% 2010 2.8 47% 2011E 10% 5% 2011E 1.6 9% 2012E 10% 5% 2012E 1.2 9% 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Issuer Information Market Cap. (m) Fiscal year end ISIN Number Last price 52 week high 52 week low USD USD USD 16.6 18.5 9.8 17'588 12/2010 US0138171014 14.04.2011 08.04.2011 01.07.2010 Event Calendar July 11, 2011 May 4, 2011 Quarterly results Dividend ex date Geographic Sales Split U.S. Australia Spain Brazil Netherlands Norway Other 2008 14'335 3'228 1'733 1'287 1'263 24 3'023 2009 9'546 2'287 1'099 897 1'002 477 1'122 2010 10'560 2'842 1'234 1'182 940 809 1'436 50% 14% 6% 6% 4% 4% 16% Product Sales Split Aluminium Flat-rolled aluminium products Aluminium components Alumina Adjustment 2008 8'021 8'966 6'199 2'924 791 2009 5'252 6'069 4'689 2'161 268 2010 7'070 6'277 4'584 2'815 267 *) Data is directly imported from Bloomberg and may deviate from adjusted figures on the 1st page. The information and opinions expressed in this document were produced by the Investment Research department of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Clariden Leu Ltd. to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction . It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based up on sources that Clariden Leu Ltd. believes to be reliable, no representation is made that the information is accurate or complete. Clariden Leu Ltd. does not accept liability for any loss arising from the use of thi s report. The price and value of investments mentioned and any income that might accrue may fluctua e and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks, currency risks, and market risks. Before entering into any transaction, investors should consider the suitability of the transact ion to individual circumstances and objectives. Cl ar iden Leu Ltd. recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal , regulatory, credit, tax and accounting consequences. Clariden Leu Ltd. may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such i ssuers, and/or have a position or effect transactions in the securities or options thereof. Neither this document nor any copy thereof may be sent , taken into or distributed in the United Stat es or in Japan or to any US Person. Local law or regulation may restrict the distribution of research reports into certain jurisdiction. This document may not be reproduced either in whole or in part, without the written permisson of Cl ariden Leu Ltd. © Clariden Leu Ltd. All rights reserved. 2010 2012 18 Company Note 13.04.2011 GIVAUDAN Price (in CHF) Price Target (12–18 months) Potential Sector Region Country Model Portfolio Valor/Bloomberg/Reuters Risk Class 933.00 1'000.00 7.2% Materials Switzerland Switzerland No 1'064'593/givn vx /GIVN.VX Moderate Rating relative to regional sector Marketperform Investment Case: • Givaudan is the world's leading manufacturer of fragrances and flavours. It has a high exposure to emerging markets (41% of sales). • Sales are closely linked to demand for consumer goods such as toiletries and food. This makes the company more defensive than most other chemicals companies. • Company aims to raise cash return to shareholders after reducing its leverage ratio from the current 29% to 25%. This likely means higher dividends from 2012 onwards. • Target price still assumes a premium both to its direct competitor IFF and to other Swiss chemical stocks. Still some headwinds in 2011 Last Event: Givaudan reported sales down by 5% in the first quarter of 2011. Excluding foreign exchange effects, sales grew by 3%. After highlighting a sharp rise in the cost of raw materials earlier this year, the company said that it has managed to negotiate price increases with most of its customers. The full impact of that should be visible in the second half of 2011. Comment: Results were modestly below expectations. The revenue growth rate in 2011 is likely to be below Givaudan's long term target of around 5% . This is in large part due to a difficult comparison with 2010 (local currency growth of 9%). The company's ability to pass on price increases to customers is encouraging. However, at this stage it is difficult to quantify the overall impact on operating margins in 2011. The ongoing strength of the Swiss franc is another factor that leads us to maintain a Marketperform rating. GI VAUDAN N 12 00 13.0 4.20 11 1 200 11 00 1 100 10 00 1 000 90 0 9 00 80 0 8 00 70 0 7 00 60 0 6 00 50 0 20 06 200 7 2 008 200 9 2010 5 00 GIVAUDAN 'N' HOCH 1 168 .25 1 9.0 6.20 07,TIEF 5 57.6 6 31 .03 .200 9,SCHLUSS 925. 00 Sour ce: Th omso n Datast ream Per Share Data EPS in CHF P/E Ratio Dividend Yield Income Statement Revenues Net Income Performance Absolute Please see disclaimer on page 2. in mio. CHF 2010 59.5 15.7 2.8% 2010 4'225 486 1 Month 3.0 2011E 57.4 16.2 2.8% 2011E 4'225 500 3 Months -5.3 2012E 65.2 14.3 3.2% 2012E 4'423 583 1 Year -3.4 Description Givaudan is one of the leading flavours & fragrances producers worldwide. Fragrances account for 46% and Flavours for 54% of revenues. The company divides its markets into Mature Markets (North America, Western Europe and Japan), which account for 59% of revenues and Developing Markets (41% of revenues). Luis Correia, PhD Clariden Leu AG Claridenstrasse 19, CH-8070 Zürich Tel. +41 58 205 67 31 E-Mail: [email protected] Page 1/2 19 GIVAUDAN-REG Financials & Valuation* Profit & Loss CHF mn 2008 4'087 822 467 11% 111 2009 3'959 758 463 12% 199 2010 4'239 866 557 13% 340 2008 6'997 4'904 2'093 3'091 147.7% 2011E 4'225 933 655 16% 500 2009 7'213 4'401 2'812 2'230 79.3% 2012E 4'423 1'010 772 17% 583 2010 6'923 3'477 3'446 1'299 37.7% Earnings Per Share 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2011 Sales EBITDA Operating profit Margin Net profit Balance Sheet CHF mn Total Assets Total Liabilities Total Shareholders' Equity Net debt Net debt/Equity P/E Ratio 90 Per Share Data CHF EPS Dividend Book Value Ratios P/E P/Book P/Sales EV/EBITDA EV/Sales Dividend yield 29.1 9.4 277.2 2008 53.2 2.8 1.4 11.0 2.2 1.2% 40.5 20.6 336.4 2009 33.0 2.5 1.7 12.0 2.3 2.5% 62.4 21.5 378.9 2010 26.6 2.7 2.1 12.1 2.5 2.1% 57.3 26.0 396.5 2011E 16.3 2.4 2.0 10.4 2.3 2.8% 65.0 30.3 408.0 2012E 14.4 2.3 1.9 9.4 2.1 3.2% Operating Margin (%) 20 18 16 14 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2008 2009 2010 2011E 2012E 80 70 60 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 53% 47% Profitability ROE ROA Coverage Ratios Net debt/EBITDA Div payout 2008 5% 1% 2008 3.8 65% 2009 8% 3% 2009 2.9 88% 2010 11% 5% 2010 1.5 58% 2011E 14% 7% 2011E 1.2 45% 2012E 16% 9% 2012E 0.8 47% Issuer Information Market Cap. (m) Fiscal year end ISIN Number Last price 52 week high 52 week low CHF CHF CHF 934.0 1037.1 841.3 8'624 12/2010 CH0010645932 13.04.2011 08.12.2010 25.05.2010 Event Calendar 04.08.2011 29.03.2012 Semi annual result Dividend ex date Geographic Sales Split Rest of Europe Asia Pacific USA and Canada Latin America Africa, Middle East Switzerland 2008 1'449 864 1'003 453 270 48 2009 1'311 916 944 459 279 50 2010 1'313 1'046 999 515 315 51 31% 25% 24% 12% 7% 1% Product Sales Split Flavours Fragrances 2008 2'189 1'898 2009 2'135 1'824 2010 2'251 1'988 *) Data is directly imported from Bloomberg and may deviate from adjusted figures on the 1st page. The information and opinions expressed in this document were produced by the Investment Research department of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Clariden Leu Ltd. to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction . It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based up on sources that Clariden Leu Ltd. believes to be reliable, no representation is made that the information is accurate or complete. Clariden Leu Ltd. does not accept liability for any loss arising from the use of thi s report. The price and value of investments mentioned and any income that might accrue may fluctua e and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks, currency risks, and market risks. Before entering into any transaction, investors should consider the suitability of the transact ion to individual circumstances and objectives. Cl ar iden Leu Ltd. recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal , regulatory, credit, tax and accounting consequences. Clariden Leu Ltd. may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such i ssuers, and/or have a position or effect transactions in the securities or options thereof. Neither this document nor any copy thereof may be sent , taken into or distributed in the United Stat es or in Japan or to any US Person. Local law or regulation may restrict the distribution of research reports into certain jurisdiction. This document may not be reproduced either in whole or in part, without the written permisson of Cl ariden Leu Ltd. © Clariden Leu Ltd. All rights reserved. 2012 20 Company Note 14.04.2011 RIO TINTO Price (in GBp) Price Target (12–18 months) Potential Sector Region Country Model Portfolio Valor/Bloomberg/Reuters Risk Class 4'325.00 4'900.00 13.3% Materials Europe United Kingdom Yes 402'589/rio ln /RIO.L Dynamic Rating relative to regional sector Outperform Investment case: • Owner of first-class mines/alu smelters with a low cost profile and long-lasting reserves in politically stable regions such as Australia, North America and Europe. • High raw material prices, margins and government deficits increase the risk of extraordinary taxes. However, Australia's new resource tax has been watered down. • Opportunities: High quality mines, capacity reductions in the aluminium sector promise turnaround. • Risks: Cyclical weakening of China's strong demand for metals (construction, capital goods); growth plans of many competitors will reduce margins in the long term. • Conclusion: Valuation has clearly increased. However, strong ST earnings momentum offers further upside. RIO TI NT O 6000 5500 14 .0 4.2 0 11 6000 5500 Production hit by floods Last Event: Iron ore output at Rio Tinto dropped by 3% to 42 million tonnes in Q1. The decline from Q4 2010 came to a substantial 16%. This was due to the consequences of various cyclones and the disastrous floods in Australia. The extreme weather conditions also impacted on Australian coke output (-12%) and on aluminum oxide production (-4%). Copper output was also down (-14%), but this was due to a decline in ore grades at the Escondida and Grasberg mines. Comment: Production fell far short of predictions, but is currently moving back toward normal levels. The decrease in copper output is more structural. However, the huge Oyu-Tolgoi copper and gold mine in Mongolia, in which Rio Tinto holds an indirect 28% stake through Ivanhoe, will turn the trend around at the end of 2012. High cost inflation and a tighter monetary policy in China suggest that the current margins are not sustainable in the medium term. Thanks to its low production costs, however, Rio is more resilient to bad news than other mining companies. Per Share Data EPS in GBp P/E Ratio Dividend Yield Income Statement Revenues Net Income Performance Absolute Please see disclaimer on page 2. in mio. USD 5000 4500 4000 5000 4500 4000 3500 3000 2500 2000 3500 3000 2500 2000 1500 1000 500 1500 1000 500 2 006 2007 2008 2009 2010 RIO TIN TO H OCH 56 8 4.4 3 14 .0 5. 20 0 8,TIEF 9 48 .3 7 03 .1 2. 20 08 ,SCH LU SS ce:3Th omso n Dat ast rea m So ur 44 2.3 9 2010 470.3 9.2 1.6% 2010 56'576 14'324 1 Month 11.2 2011E 596.0 7.3 1.7% 2011E 66'140 19'137 3 Months -1.2 2012E 602.0 7.2 1.8% 2012E 66'690 18'629 1 Year 15.7 Description Rio Tinto is the second-largest iron ore producer (after Vale but before BHP) and one of the biggest players in the aluminium sector alongside Alcoa, RUSAL and Chalco. The company also has mining interests in coal, copper and other raw materials. Rio has two parent companies (Rio Tinto plc and Rio Tinto Limited) that participate in a fixed proportion in all operating activities and are headed by the same management team. Christian Fröhlich Clariden Leu AG Claridenstrasse 19, CH-8070 Zürich Tel. +41 58 205 37 32 E-Mail: [email protected] Page 1/2 21 RIO TINTO PLC Financials & Valuation* Profit & Loss USD mn 2008 54'264 18'964 15'489 29% 3'676 2009 41'825 10'920 7'493 18% 4'872 2010 56'576 22'748 19'311 34% 14'324 2008 89'616 67'155 22'461 38'607 1.7 2011E 66'140 32'785 29'169 44% 19'191 2009 97'236 51'311 45'925 18'309 0.4 2012E 66'690 32'648 27'975 42% 18'879 2010 112'402 47'128 65'274 3'872 0.1 Earnings Per Share 700.0 600.0 500.0 400.0 300.0 200.0 100.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2011 Sales EBITDA Operating profit Margin Net profit Balance Sheet USD mn Total Assets Total Liabilities Total Shareholders' Equity Net debt Net debt/Equity P/E Ratio 45 Per Share Data GBp EPS Dividend Book Value Ratios P/E P/Book P/Sales EV/EBITDA EV/Sales Dividend yield 361.9 61.3 911.1 2008 6.2 1.4 0.5 3.6 1.3 6.3% 207.5 28.8 1384.6 2009 18.1 2.4 2.3 11.7 3.1 0.8% 461.9 69.9 1910.9 2010 9.5 2.3 2.4 6.5 2.6 1.5% 609.4 73.3 2365.4 2011E 7.1 1.8 2.2 4.6 2.3 1.7% 603.6 78.1 2839.1 2012E 7.2 1.5 2.2 4.3 2.1 1.8% Operating Margin (%) 50 45 40 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 2008 2009 2010 2011E 2012E 40 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 42% 27% 14% 10% 10% 5% -9% Profitability ROE ROA Coverage Ratios Net debt/EBITDA Div payout 2008 16% 4% 2008 2.0 39% 2009 15% 5% 2009 1.7 17% 2010 28% 14% 2010 0.2 15% 2011E 29% 22% 2011E -0.1 12% 2012E 24% 19% 2012E -0.3 13% Issuer Information Market Cap. (m) Fiscal year end ISIN Number Last price 52 week high 52 week low GBp GBp GBp 4327.0 4717.5 2751.0 89'225 12/2010 GB0007188757 14.04.2011 09.02.2011 20.05.2010 Event Calendar August 4, 2011 August 10, 2011 Quarterly results Dividend ex date Geographic Sales Split China North America Japan Europe Rest of the world Adjustments 2008 10'934 12'984 8'825 12'015 13'307 -3'801 2009 10'691 10'190 5'921 6'337 10'897 -2'211 2010 16'743 11'187 9'410 8'682 14'301 -3'747 30% 20% 17% 15% 25% -7% Product Sales Split Iron ore Aluminium Copper Other Energy Diamonds, minerals Consolidation, minorities 2008 16'527 18'297 5'748 7'378 8'018 3'820 -5'524 2009 12'598 12'038 6'206 4'743 6'709 2'618 -3'087 2010 24'024 15'206 7'782 5'734 5'652 3'035 -4'857 *) Data is directly imported from Bloomberg and may deviate from adjusted figures on the 1st page. The information and opinions expressed in this document were produced by the Investment Research department of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Clariden Leu Ltd. to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction . It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based up on sources that Clariden Leu Ltd. believes to be reliable, no representation is made that the information is accurate or complete. Clariden Leu Ltd. does not accept liability for any loss arising from the use of thi s report. The price and value of investments mentioned and any income that might accrue may fluctua e and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks, currency risks, and market risks. Before entering into any transaction, investors should consider the suitability of the transact ion to individual circumstances and objectives. Cl ar iden Leu Ltd. recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal , regulatory, credit, tax and accounting consequences. Clariden Leu Ltd. may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such i ssuers, and/or have a position or effect transactions in the securities or options thereof. Neither this document nor any copy thereof may be sent , taken into or distributed in the United Stat es or in Japan or to any US Person. Local law or regulation may restrict the distribution of research reports into certain jurisdiction. This document may not be reproduced either in whole or in part, without the written permisson of Cl ariden Leu Ltd. © Clariden Leu Ltd. All rights reserved. 2012 22 Company Note 13.04.2011 SANOFI-AVENTIS Price (in EUR) Price Target (12–18 months) Potential Sector Region Country Model Portfolio Valor/Bloomberg/Reuters Risk Class 51.19 55.00 7.4% Pharma & Biotech Europe France No 699'381/san fp /SASY.PA Moderate Rating relative to regional sector New: Marketperform Investment Case: • The acquisition of Genzyme is another step to diversify away from prescription drugs addressed to large populations in Western markets.Following several acquisitions in recent years, Sanofi has now a high exposure to emerging markets (30% of sales). The company also has significant Vaccines and Animal Health businesses. • Sanofi's efforts to replace its mature oncology portfolio have had little success. The company suffers from a perception of low Research & Development productivity. • Share could have downside support from a low valuation relative to sector average as well as a high dividend yield. AVENTI S 80 13.0 4.20 11 80 Resuming coverage with Marketperform Last Event: Sanofi-aventis announced that the acquisition of U.S. biotechnology company Genzyme is now complete. The integration of Genzyme adds around EUR 3bn annual sales and EUR 500mn net income. In addition to drugs for rare diseases (enzyme deficiencies), Genzyme has a drug candidate in advanced development for multiple sclerosis. Comment: The acquisition of Genzyme helps Sanofi-aventis to make up for some profits lost to patent expiries in the period 2011-13. Sentiment towards Sanofi has been cautious given the company's mixed track record in the development and launch of new drugs. The absence of promising new launches in the next three years mainly justifies that we resume coverage with a Marketperform. The price target assumes that Sanofi's valuation gap relative to peers could close somewhat. 75 75 70 70 65 65 60 60 55 55 50 50 45 45 40 20 06 200 7 2 008 200 9 2010 40 SANOFI- AVE NTIS HOCH 7 8.60 25. 07.2 006 ,TIEF 40.8 2 1 4.04 .200 9,SCHLUSS 51.1ce: Th omso n1 Sour 9 12 .04 .201 Datast ream Per Share Data EPS in EUR P/E Ratio Dividend Yield Income Statement Revenues Net Income Performance Absolute Please see disclaimer on page 2. in mio. EUR 2010 7.0 7.4 5.0% 2010 29'306 9'131 1 Month 3.6 2011E 6.7 7.6 5.0% 2011E 30'768 8'733 3 Months -0.1 2012E 6.2 8.2 5.1% 2012E 31'363 8'031 1 Year -2.7 Description French company Sanofi-aventis is one of the major pharmaceutical companies worldwide. Its main areas are diabetes, cardiovascular diseases, oncology, vaccines and animal health. The company generates around 30% of its sales in emerging markets. Luis Correia, PhD Clariden Leu AG Claridenstrasse 19, CH-8070 Zürich Tel. +41 58 205 67 31 E-Mail: [email protected] Page 1/2 23 SANOFI-AVENTIS Financials & Valuation* Profit & Loss EUR mn 2008 27'568 10'833 6'457 23% 7'068 2009 29'306 12'805 7'818 27% 8'826 2010 30'384 12'570 7'904 26% 9'215 2008 71'987 26'916 45'071 1'780 3.9% 2011E 30'742 12'625 9'914 32% 8'758 2009 80'049 31'603 48'446 4'135 8.5% 2012E 31'601 12'211 9'331 30% 8'061 2010 85'264 31'976 53'288 1'795 3.4% Earnings Per Share 8.0 6.0 4.0 2.0 0.0 -2.0 -4.0 -6.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2011 Sales EBITDA Operating profit Margin Net profit Balance Sheet EUR mn Total Assets Total Liabilities Total Shareholders' Equity Net debt Net debt/Equity P/E Ratio 60 Per Share Data EUR EPS Dividend Book Value Ratios P/E P/Book P/Sales EV/EBITDA EV/Sales Dividend yield 5.4 2.2 34.4 2008 15.4 1.3 2.2 5.7 2.2 4.8% 6.8 2.4 36.8 2009 14.1 1.5 2.5 6.0 2.6 4.4% 7.1 2.5 40.7 2010 12.3 1.2 2.1 5.1 2.1 5.2% 6.8 2.6 41.4 2011E 7.6 1.2 2.2 5.5 2.2 5.0% 6.2 2.6 43.4 2012E 8.3 1.2 2.1 5.6 2.2 5.1% Operating Margin (%) 40 2008 2009 2010 2011E 2012E 50 40 30 20 10 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 87% 13% 2012 Profitability ROE ROA Coverage Ratios Net debt/EBITDA Div payout 2008 9% 5% 2008 0.2 75% 2009 11% 7% 2009 0.3 62% 2010 11% 7% 2010 0.1 65% 2011E 15% 9% 2011E 0.1 38% 2012E 14% 9% 2012E 0.1 42% 35 30 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 Issuer Information Market Cap. (m) Fiscal year end ISIN Number Last price 52 week high 52 week low EUR EUR EUR 51.5 55.4 44.0 67'465 12/2010 FR0000120578 13.04.2011 14.04.2010 30.07.2010 Event Calendar 28.04.2011 16.05.2011 Quarterly result Dividend ex date Geographic Sales Split Emerging Markets Europe United States Rest of the World 2008 12'096 8'609 6'863 2009 12'059 9'426 7'821 2010 9'075 8'997 8'968 3'344 30% 30% 29% 11% Product Sales Split Pharmaceuticals Vaccines 2008 24'707 2'861 2009 25'823 3'483 2010 26'576 3'808 *) Data is directly imported from Bloomberg and may deviate from adjusted figures on the 1st page. The information and opinions expressed in this document were produced by the Investment Research department of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Clariden Leu Ltd. to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction . It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based up on sources that Clariden Leu Ltd. believes to be reliable, no representation is made that the information is accurate or complete. Clariden Leu Ltd. does not accept liability for any loss arising from the use of thi s report. The price and value of investments mentioned and any income that might accrue may fluctua e and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks, currency risks, and market risks. Before entering into any transaction, investors should consider the suitability of the transact ion to individual circumstances and objectives. Cl ar iden Leu Ltd. recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal , regulatory, credit, tax and accounting consequences. Clariden Leu Ltd. may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such i ssuers, and/or have a position or effect transactions in the securities or options thereof. Neither this document nor any copy thereof may be sent , taken into or distributed in the United Stat es or in Japan or to any US Person. Local law or regulation may restrict the distribution of research reports into certain jurisdiction. This document may not be reproduced either in whole or in part, without the written permisson of Cl ariden Leu Ltd. © Clariden Leu Ltd. All rights reserved. 2010 2012 24 Company Note 12.04.2011 SULZER Price (in CHF) Price Target (12–18 months) Potential Sector Region Country Model Portfolio Valor/Bloomberg/Reuters Risk Class 146.60 165.00 12.6% Capital Goods Switzerland Switzerland No 3'838'891/sun sw /SUN.S Dynamic Rating relative to regional sector Outperform Investment Case: • The positive trend in early-cycle markets is continuing. Sulzer sees encouraging signs in the late cyclical Oil&Gas market. • Technological leadership ensures sustainable leading position in developing future oil and gas fields. • About 40% of sales revenue in the Pumps division are generated by servicing work. • The CHF 110 m cost-cutting program is ahead of schedule; the full impact of the savings will be felt in the current year. • Trough the acquisition of Cardo Flow Sulzer increases the presence in the very attractive Water market. SUL Z ER 200 R Complementary acquisition in the pump segment Last Event: Sulzer plans to take over the wastewater pump arm of Swedish Cardo Flow Solutions for CHF 858 m. CF Solutions is a full-service provider of pumps and related equipment chiefly for the wastewater sector. The company posted sales of CHF 463 m in 2010. Outlook: The planned takeover will mark Sulzer’s active entry into the attractive wastewater pump market, giving it a strong foothold there. The wastewater pump business is less cyclical than pump activities in the oil and gas markets, which is why economic cycles are likely to be better navigated. The takeover should have a positive impact on earnings per share as of 2012. It is to be financed by disposable liquid funds and borrowed capital. The takeover makes sense since it rounds out Sulzer’s range of pump products and Cardo Flow can benefit from Sulzer’s strong global service network. Sulzer will strengthen its growth profile through the acquisition. 12 .0 4.2 0 11 200 180 180 160 160 140 140 120 120 100 100 80 80 60 60 40 2006 2007 2008 2009 2 010 40 SULZE R 'R' H OCH 18 5 .90 1 2. 11 .2 00 7 ,TI EF 43 .0 0 02 .0 3.2 0 09 ,SCH LUSS 14 ce: Th omso.2 01 1 ast rea m So ur 6. 60 1 1. 04 n Dat Per Share Data EPS in CHF P/E Ratio Dividend Yield Income Statement Revenues Net Income Performance Absolute Please see disclaimer on page 2. in mio. CHF 2010 9.0 16.3 2.0% 2010 3'184 300 1 Month 6.2 2011E 8.7 16.8 2.0% 2011E 3'499 297 3 Months 5.7 2012E 10.1 14.6 2.3% 2012E 3'909 338 1 Year 44.5 Description The industrial group has four core divisions: Sulzer Pumps (pumping solutions), Sulzer Metco (surface technology), Sulzer Turbo Services (repair services for turbines), and Sulzer Chemtech (components). Markus Bächtold, CFA Clariden Leu AG Claridenstrasse 19, CH-8070 Zürich Tel. +41 58 205 37 73 E-Mail: [email protected] Page 1/2 25 SULZER AG-REG Financials & Valuation* Profit & Loss CHF mn 2008 3'714 575 475 13% 323 2009 3'350 471 360 11% 270 2010 3'184 508 403 13% 300 2008 3'430 1'884 1'546 -306 -19.8% 2011E 3'499 526 423 12% 297 2009 3'384 1'595 1'789 -671 -37.5% 2012E 3'909 604 484 12% 338 2010 3'492 1'591 1'901 -553 -29.1% Earnings Per Share 12.0 10.0 8.0 6.0 4.0 Sales EBITDA Operating profit Margin Net profit Balance Sheet CHF mn 2.0 0.0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2011 2011 Total Assets Total Liabilities Total Shareholders' Equity Net debt Net debt/Equity P/E Ratio 30 Per Share Data CHF EPS Dividend Book Value Ratios P/E P/Book P/Sales EV/EBITDA EV/Sales Dividend yield 9.6 2.8 44.9 2008 6.3 1.3 0.5 3.1 0.5 4.7% 9.1 2.8 52.9 2009 10.1 1.5 0.8 4.4 0.6 3.5% 9.0 3.0 56.2 2010 16.0 2.5 1.5 8.4 1.3 2.1% 8.7 2.9 61.5 2011E 16.6 2.4 1.4 8.0 1.2 2.0% 10.1 3.3 68.1 2012E 14.4 2.1 1.3 6.7 1.0 2.3% Operating Margin (%) 14 2008 2009 2010 2011E 2012E 25 20 15 10 5 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2012 50% 20% 18% 13% 0% 2012 Profitability ROE ROA Coverage Ratios Net debt/EBITDA Div payout 2008 21% 9% 2008 -0.5 30% 2009 16% 8% 2009 -1.4 35% 2010 16% 9% 2010 -1.1 34% 2011E 15% 11% 2011E -1.4 33% 2012E 15% 12% 2012E -1.5 33% 12 10 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Issuer Information Market Cap. (m) Fiscal year end ISIN Number Last price 52 week high 52 week low CHF CHF CHF 145.0 152.3 88.2 4'968 12/2010 CH0038388911 12.04.2011 08.04.2011 25.05.2010 Event Calendar 21.07.2011 18.04.2011 Semi annual result Dividend ex date Geographic Sales Split Europe North America Asia, Australia Latin America Africa 2008 1'290 997 1'026 247 154 2009 1'047 952 885 239 228 2010 1'024 840 803 324 192 32% 26% 25% 10% 6% Product Sales Split Sulzer Pumps Sulzer Metco Sulzer Chemtech Sulzer Turbo Service Consolidation 2008 1'817 744 823 314 16 2009 1'857 556 632 291 14 2010 1'576 624 575 399 10 *) Data is directly imported from Bloomberg and may deviate from adjusted figures on the 1st page. The information and opinions expressed in this document were produced by the Investment Research department of Clariden Leu Ltd. as of the date of writing and are subject to change without notice. The report is published solely for information purposes and does not constitute an offer or an invitation by, or on behalf of, Clariden Leu Ltd. to buy or sell any securities or related financial instruments or to participate in any particular trading strategy in any jurisdiction . It has been prepared without taking account of the objectives, financial situation or needs of any particular investor. Although the information has been obtained from and is based up on sources that Clariden Leu Ltd. believes to be reliable, no representation is made that the information is accurate or complete. Clariden Leu Ltd. does not accept liability for any loss arising from the use of thi s report. The price and value of investments mentioned and any income that might accrue may fluctua e and may rise or fall. Nothing in this report constitutes investment, legal, accounting or tax advice, or a representation that any investment or strategy is suitable or appropriate to individual circumstances, or otherwise constitutes a personal recommendation to any specific investor. Any reference to past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any products mentioned in this document. Investments in emerging markets are speculative and considerably more volatile than investments in established markets. Risks include but are not necessarily limited to: political risks, currency risks, and market risks. Before entering into any transaction, investors should consider the suitability of the transact ion to individual circumstances and objectives. Cl ar iden Leu Ltd. recommends that investors independently assess, with a professional financial advisor, the specific financial risks as well as legal , regulatory, credit, tax and accounting consequences. Clariden Leu Ltd. may, to the extent permitted by law, participate or invest in other financing transactions with the issuer of the securities referred to herein, perform services or solicit business from such i ssuers, and/or have a position or effect transactions in the securities or options thereof. Neither this document nor any copy thereof may be sent , taken into or distributed in the United Stat es or in Japan or to any US Person. Local law or regulation may restrict the distribution of research reports into certain jurisdiction. This document may not be reproduced either in whole or in part, without the written permisson of Cl ariden Leu Ltd. © Clariden Leu Ltd. All rights reserved. 2012 26 EQUITIES 14.04.2011 / Investment Research, Tel. +41 58 205 75 75 Company Country Rec. Risk Valor Reuters Bloomberg Currency Price 13.04.2011 52 Weeks high / low Performance P/E 12 months 2011 P/E 2012 Div. Yield Market Last Cap CHF Update EQUITIES EUROPE Energy BG GROUP BP PLC FUGRO ROYAL DUTCH SHELL A TOTAL TRANSOCEAN Materials BAYER BHP BILLITON GIVAUDAN HOLCIM K+S AG LONZA GROUP RIO TINTO SYNGENTA THYSSEN KRUPP Capital Goods ABB ALSTOM GEBERIT KABA PHILIPS ELECTRONICS SCHWEITER SIEMENS SULZER Commercial Services SGS Automobiles BMW DAIMLER GEORG FISCHER REG VOLKSWAGEN PREF. DE DE CH DE MP MP OP OP D D D D 324'410 945'657 175'230 352'781 BMWG.DE DCXGn.DE FIN.S VOWG_p.D bmw gy dai gr fi/n sw vow3 gy EUR EUR CHF EUR 57.59 50.98 532.50 111.60 65.49 59.09 578.50 139.45 34.64 35.30 327.75 64.02 63.20 36.30 35.17 61.50 CH OP M 249'745 SGSN.VX sgsn vx CHF 1'657.00 1'680.00 1'310.58 13.48 CH FR CH CH NL CH DE CH OP MP MP OP OP OP OP OP M M M M D D M D 1'222'171 2'229'080 3'017'040 1'179'595 1'106'818 1'075'492 827'766 3'838'891 ABBN.VX ALSO.PA GEBN.VX KABN.S PHG.AS swtq.s SIEGn.DE SUN.S abbn vx alo fp gebn vx kabn sw phia na swtq sw sie gy sun sw CHF EUR CHF CHF EUR CHF EUR CHF 21.82 43.75 201.00 387.00 21.43 665.00 93.74 143.70 23.46 48.94 219.90 407.50 27.01 780.00 99.39 152.30 17.87 30.78 159.10 270.00 20.58 525.00 67.00 88.15 -5.69 -7.95 7.00 21.67 -13.87 7.46 27.44 37.35 DE GB CH CH DE CH GB CH DE MP MP MP MP OP OP OP OP MP M D M M M M D M M 10'367'293 675'391 1'064'593 1'221'405 337'898 1'384'101 402'589 1'103'746 412'006 BAYGn.DE BLT.L GIVN.VX HOLN.VX SDFG.DE LONN.VX RIO.L SYNN.VX TKAG.DE bayn gr blt ln givn vx holn vx sdf gr lonn vx rio ln synn vx tka gy EUR GBp CHF CHF EUR CHF GBp CHF EUR 55.54 2'540.00 928.50 73.95 53.04 72.45 4'408.50 305.00 29.82 59.17 2'653.50 1'037.06 85.00 58.85 90.95 4'717.50 324.30 32.32 43.10 1'678.00 841.27 59.65 35.55 65.75 2'751.00 222.00 19.68 9.40 9.47 -2.02 -9.17 23.60 -14.21 10.23 9.40 12.32 GB GB NL NL FR CH OP OP OP OP MP MP M D M C M A 1'007'667 844'183 2'165'936 1'987'674 524'773 4'826'551 BG.L BP.L FUGRc.AS RDSa.AS TOTF.PA RIG.N bg/ ln bp/ ln fur na rdsa na fp fp rig us GBp GBp EUR EUR EUR USD 1'497.00 464.20 62.52 25.28 42.05 78.36 1'595.00 658.20 63.68 26.74 44.55 92.67 966.90 296.00 36.87 19.73 35.66 41.88 29.66 -28.05 19.22 11.57 -4.00 -10.32 9.5 17.3 6.4 15.7 8.8 7.8 14.0 10.6 11.9 9.9 16.3 17.9 14.7 12.5 7.2 17.4 13.9 14.0 16.4 15.0 18.5 14.0 11.9 17.3 12.7 17.1 20.1 20.1 9.2 10.0 9.5 13.6 8.2 8.6 15.6 6.4 13.1 7.8 7.4 11.7 9.3 10.6 8.4 14.3 14.1 12.3 10.7 7.3 15.6 8.6 12.5 14.3 12.8 16.7 13.8 10.4 13.3 11.8 14.9 17.4 17.4 8.0 8.8 8.1 10.9 7.1 3.1 4.3 2.3 2.4 3.1 2.8 2.6 3.2 2.4 3.7 1.7 3.3 1.9 2.9 2.3 2.8 2.1 2.9 2.9 1.7 2.3 2.1 1.0 3.9 2.5 4.6 5.6 3.0 561.6 73.9 127.4 6.3 204.6 127.1 22.3 519.9 59.3 230.8 8.6 24.3 13.3 3.8 131.2 28.7 19.9 220.9 50.4 16.6 8.3 1.5 27.2 1.0 110.8 5.1 13.0 13.0 184.0 47.9 69.1 2.2 64.8 03/11 02/11 03/11 03/11 01/11 02/11 01/11 03/11 03/11 01/11 03/11 03/11 04/11 03/11 02/11 04/11 03/11 03/11 04/11 04/11 02/11 02/11 02/11 02/11 03/11 02/11 02/11 03/11 27 Company Country Rec. Risk Valor Reuters Bloomberg Currency Price 13.04.2011 52 Weeks high / low Performance P/E 12 months 2011 P/E 2012 Div. Yield Market Last Cap CHF Update EQUITIES EUROPE Consumer Durables ADIDAS LVMH RICHEMONT SWATCH GROUP BR Consumer Services GATEGROUP HOLDING Media VIVENDI WPP GROUP Retailing KINGFISHER Food & Staples Retailing TESCO Food, Beverage & Tobacco ANHEUSER-BUSCH INBEV BARRY CALLEBAUT BRITISH AMERICAN TOBACCO DANONE DIAGEO LINDT & SPRÜNGLI REG NESTLE Household & Personal Products HENKEL Health Care Equipment & Services FRESENIUS MEDICAL CARE GALENICA AG SONOVA SYNTHES Pharma & Biotech ACTELION GLAXOSMITHKLINE NOVARTIS ROCHE GS SANOFI-AVENTIS Banks BANCO SANTANDER ES MP A 817'651 SAN.EU san sm EUR 8.50 10.88 7.11 -22.29 CH GB CH CH FR MP UP OP MP MP D M C C M 1'053'247 1'102'657 1'200'526 1'203'204 699'381 ATLN.VX GSK.L NOVN.VX ROG.VX SASY.PA atln vx gsk ln novn vx rog vx san fp CHF GBp CHF CHF EUR 52.00 1'246.00 49.61 133.10 51.43 57.95 1'324.00 58.35 177.80 55.40 39.19 1'088.00 47.61 124.40 44.01 7.67 -2.24 -11.76 -23.86 -6.69 DE CH CH CH OP MP MP OP C M D M 520'878 1'553'646 1'254'978 1'863'105 FMEG.DE GALN.S SOON.VX SYST.VX fme gy galn sw soon vx syst vx EUR CHF CHF CHF 50.00 561.50 84.90 129.90 50.07 586.00 139.20 135.00 37.53 386.00 81.60 109.30 20.31 36.23 -37.43 0.85 DE OP M 335'910 HNKG_p.DE hen3 gy EUR 43.74 48.59 35.69 6.15 BE CH GB FR GB CH CH OP OP OP OP OP MP OP M M M M C M C 1'147'290 900'296 909'525 487'663 837'159 1'057'075 3'886'335 ABI.BR BARN.S BATS.L DANO.PA DGE.L LISN.S NESN.VX abi bb barn sw bats ln bn fp dge ln lisn sw nesn vx EUR CHF GBp EUR GBp CHF CHF 41.57 805.50 2'530.00 46.84 1'200.00 31'000.00 52.55 46.33 809.00 2'568.50 48.50 1'266.00 31'200.00 56.90 35.06 628.81 1'950.00 39.35 1'024.00 25'155.00 48.92 11.03 15.25 13.42 2.72 3.72 9.82 -0.19 GB OP C 408'910 TSCO.L tsco ln GBp 406.00 454.90 364.90 -8.89 GB OP M 1'626'624 KGF.L kgf ln GBp 263.80 272.90 196.70 10.84 FR IE OP OP M M 1'165'915 4'635'625 VIV.PA WPP.L viv fp wpp ln EUR GBp 20.58 734.00 22.07 864.00 16.18 603.50 2.33 3.76 CH OP D 10'018'595 GATE.S gate sw CHF 44.30 53.50 30.50 10.38 DE FR CH CH OP OP MP OP M M D M 11'730'015 507'170 4'503'965 1'225'515 ADSG.DE LVMH.PA CFR.VX UHR.VX ads gy mc fp cfr vx uhr vx EUR EUR CHF CHF 45.49 111.20 51.15 393.80 51.55 129.05 57.75 434.80 38.42 78.26 35.50 279.70 8.88 23.35 24.19 19.41 17.8 14.5 18.3 19.0 16.7 10.6 10.6 9.6 8.8 11.6 13.3 13.3 12.4 12.4 15.6 15.9 15.1 13.1 16.0 15.1 26.7 16.0 13.8 13.8 18.6 20.1 15.1 19.3 17.4 9.8 15.9 10.9 10.1 9.9 7.6 9.4 7.9 15.6 12.5 16.2 16.2 14.5 8.9 8.9 8.9 8.3 10.4 11.4 11.4 11.2 11.2 14.1 14.0 13.3 12.0 14.4 13.8 24.2 14.6 12.2 12.2 16.9 18.0 13.9 17.4 16.0 9.5 13.0 10.1 10.0 9.0 8.2 7.8 6.7 7.0 1.2 5.5 4.4 5.4 5.0 1.3 1.5 1.3 1.2 1.8 1.8 1.9 4.9 2.9 3.4 1.6 3.6 3.5 2.5 7.0 2.8 1.4 2.1 2.2 1.3 1.5 133.7 12.3 70.7 29.6 21.1 1.2 1.2 46.2 32.7 13.5 9.1 9.1 47.7 47.7 439.8 86.5 4.2 73.4 40.1 43.8 6.9 184.9 22.2 22.2 44.3 19.5 3.7 5.6 15.5 435.3 6.8 93.9 131.4 116.3 86.9 449.7 91.2 02/11 04/11 02/11 04/11 04/11 04/11 02/11 03/11 03/11 02/11 02/11 03/11 04/11 02/11 04/11 02/11 03/11 02/11 12/10 03/11 03/11 03/11 04/11 03/11 03/11 01/11 02/11 28 Company Country Rec. Risk Valor Reuters Bloomberg Currency Price 13.04.2011 52 Weeks high / low Performance P/E 12 months 2011 P/E 2012 Div. Yield Market Last Cap CHF Update EQUITIES EUROPE Banks BARCLAYS BNP PARIBAS HSBC HOLDINGS JULIUS BÄR SOCIETE GENERALE Diversified Financials DEUTSCHE BANK ING UBS Insurance ALLIANZ BALOISE ZURICH FIN SERVICES Software SAP TEMENOS Technology Hardware ERICSSON KUDELSKI Telecommunication DEUTSCHE TELEKOM FRANCE TELECOM SWISSCOM TELEFONICA VODAFONE Utilities E.ON ENEL GDF SUEZ RWE DE IT FR DE MP OP OP UP M M M M 4'334'819 1'250'633 2'200'367 1'158'883 EONGn.DE ENEI.MI GAZEUR.PA RWEG.DE eoan gy enel im gsz fp rwe gy EUR EUR EUR EUR 22.51 4.63 27.38 47.16 28.93 4.64 30.05 68.12 20.21 3.42 22.64 42.25 -20.77 10.68 -4.90 -30.54 DE FR CH ES GB MP OP OP OP OP M M C M M 1'026'592 720'128 874'251 826'858 2'582'928 DTEGn.DE FTE.PA SCMN.VX TEF.EU VOD.L dte gy fte fp scmn vx tef sm vod ln EUR EUR CHF EUR GBp 11.09 15.70 407.50 18.00 176.55 11.21 17.57 433.50 19.69 185.00 8.51 14.01 356.80 14.67 126.50 9.28 -10.34 2.96 -1.05 16.81 SE CH OP OP M D 614'663 1'226'836 ERICb.ST KUD.S ericb ss kud sw SEK CHF 80.25 16.75 90.45 34.95 68.85 14.80 0.51 -51.44 DE CH OP OP C D 345'952 1'245'391 SAPG.DE TMNSF.PK sap gy temn sw EUR CHF 44.05 33.45 45.05 39.55 33.60 23.40 21.09 7.58 DE CH CH OP MP OP M M M 322'646 1'241'051 1'107'539 ALVG.DE BALN.VX ZURN.VX alv gy baln vx zurn vx EUR CHF CHF 104.40 92.55 241.20 108.85 103.60 257.20 75.82 73.40 207.45 9.78 -2.68 -0.97 DE NL CH OP MP OP D A D 829'257 1'256'533 2'489'948 DBKGn.DE ING.AS UBSN.VX dbk gy inga na ubsn vx EUR EUR CHF 42.69 9.16 16.89 55.25 9.50 19.13 35.93 5.34 13.94 -22.71 15.91 -9.09 GB FR GB CH FR OP OP MP OP OP A D M M A 1'399'446 123'397 411'161 10'248'496 519'928 BARC.L BNPP.PA HSBA.L BAER.VX SOGN.PA barc ln bnp fp hsba ln baer vx gle fp GBp EUR GBp CHF EUR 308.85 53.47 661.60 39.64 46.64 394.25 59.93 739.50 44.50 52.70 253.00 40.81 595.20 29.57 29.71 -18.27 -8.56 -5.01 4.01 0.07 9.4 9.0 7.4 11.5 14.1 7.5 7.7 7.2 6.4 8.9 8.9 8.7 9.4 9.4 16.6 16.4 21.3 13.8 13.8 15.1 10.8 14.5 9.2 11.0 9.7 10.6 11.4 11.9 9.7 13.0 9.4 7.8 7.0 6.5 9.5 11.9 6.2 6.8 6.3 5.8 7.9 8.1 7.9 8.5 8.5 14.8 14.7 18.3 12.1 12.2 11.3 10.5 13.8 9.2 10.6 9.3 10.5 10.4 10.7 9.3 11.6 9.1 5.8 6.2 5.8 5.9 6.4 9.0 5.5 8.9 5.1 3.1 1.9 1.6 0.0 4.7 5.1 6.8 2.4 0.7 0.2 2.3 4.5 4.1 1.7 4.6 449.7 54.3 81.7 169.9 8.1 44.5 159.5 50.6 44.5 64.4 100.5 60.8 4.6 35.1 72.2 69.8 2.4 37.5 36.6 0.9 374.6 61.9 53.7 21.1 105.7 132.2 227.7 58.3 56.1 79.2 34.1 04/11 03/11 04/11 04/11 03/11 11/10 02/11 03/11 02/11 01/11 03/11 01/11 02/11 03/11 08/10 02/11 02/11 03/11 02/11 02/11 02/11 02/11 02/11 02/11 EQUITIES NORTH AMERICA Energy BAKER HUGHES CHEVRON CONOCO PHILLIPS US US US OP OP OP D M M 910'918 1'281'709 1'330'331 BHI.N CVX.N COP.N bhi us cvx us cop us USD USD USD 68.31 103.81 77.66 75.10 109.94 81.80 35.62 66.83 48.06 38.64 28.83 36.51 9.6 18.1 8.4 9.7 8.9 14.1 8.2 8.7 0.9 2.9 3.2 311.9 26.5 186.2 99.2 04/11 02/11 02/11 29 Company Country Rec. Risk Valor Reuters Bloomberg Currency Price 13.04.2011 52 Weeks high / low Performance P/E 12 months 2011 P/E 2012 Div. Yield Market Last Cap CHF Update EQUITIES NORTH AMERICA Materials ALCOA DUPONT NEWMONT MINING Capital Goods 3M COMPANY CATERPILLAR HONEYWELL INTL Transportation CSX Consumer Services CARNIVAL CORP MCDONALD'S Media WALT DISNEY Food, Beverage & Tobacco KRAFT FOODS PHILIP MORRIS INTL Household & Personal Products PROCTER & GAMBLE Health Care Equipment & Services MEDCO HEALTH SOL Pharma & Biotech MERCK & CO. PFIZER TEVA PHARMACEUTICALS Banks US BANCORP Diversified Financials BANK OF AMERICA BANK OF NEW YORK MELLON CITIGROUP JPMORGAN CHASE Insurance METLIFE Software MICROSOFT US OP M 951'692 MSFT.O msft us USD 25.63 31.58 22.73 -16.84 US OP D 1'025'316 MET.N met us USD 44.17 48.72 35.38 -4.87 US US US US OP OP OP OP D M D M 748'628 2'824'731 942'676 1'161'460 BAC.N BK.N C.N JPM.N bac us bk us c us jpm us USD USD USD USD 13.27 29.63 4.50 46.25 19.86 32.50 5.15 48.36 10.91 23.78 3.53 35.16 -31.60 -7.92 -8.72 -3.10 US OP M 1'201'389 USB.N usb us USD 25.99 28.94 20.44 -8.00 US US IL MP OP OP M M M 10'683'053 962'004 758'744 MRK.N PFE.N TEVA.O mrk us pfe us teva us USD USD USD 33.47 20.46 49.67 37.68 20.75 63.38 30.70 14.00 46.99 -7.57 19.86 -19.90 US OP M 1'430'073 MHS.N mhs un USD 55.07 65.39 43.45 -11.12 US OP C 963'896 PG.N pg us USD 62.99 66.95 39.37 -0.32 US US OP OP C M 1'213'349 3'754'629 KFT.N PM.N kft us pm us USD USD 32.40 66.11 32.67 67.28 27.49 42.94 4.92 28.87 US OP M 984'192 DIS.N dis us USD 41.70 44.34 30.72 15.19 US US OP OP D C 1'585'458 950'605 CCL.N MCD.N ccl us mcd us USD USD 37.63 76.89 48.14 80.94 29.68 65.31 -3.91 10.76 US OP M 923'022 CSX.N csx us USD 76.11 80.42 46.51 37.23 US US US OP OP OP M M M 1'405'105 916'546 952'258 MMM.N CAT.N HON.N mmm us cat us hon us USD USD USD 92.86 107.63 57.31 94.64 113.93 60.02 67.98 54.89 37.89 10.04 59.97 23.70 US US US OP OP OP D M D 986'052 927'399 956'952 AA.N DD.N NEM.N aa us dd us nem us USD USD USD 16.55 53.82 56.32 18.47 56.52 65.50 9.81 33.66 50.05 14.69 38.46 5.17 13.8 11.9 14.5 13.8 15.8 14.9 17.2 14.9 15.0 15.0 14.9 14.2 15.2 15.7 15.7 14.7 14.5 14.8 15.9 15.9 13.6 13.6 9.2 9.0 9.2 9.8 12.1 12.1 10.4 10.7 11.8 10.9 9.6 8.5 8.5 10.0 10.0 12.3 10.6 12.9 12.3 13.0 13.3 12.9 12.9 13.0 13.0 13.3 11.7 14.0 13.6 13.6 13.2 12.9 13.4 14.5 14.5 11.1 11.1 8.8 8.7 9.0 8.7 10.0 10.0 8.2 7.2 10.0 8.6 8.2 7.6 7.6 9.3 9.3 2.4 2.2 0.8 1.7 0.2 1.7 1.8 4.6 3.9 1.6 0.0 3.1 3.7 4.1 1.0 2.4 3.2 1.4 2.4 1.6 2.3 0.7 3.0 1.2 84.9 15.7 44.3 24.9 160.7 59.1 61.4 40.2 25.2 25.2 99.7 28.0 71.7 70.8 70.8 156.8 50.6 106.2 157.6 157.6 19.9 19.9 280.1 92.2 146.2 41.7 44.6 44.6 434.6 120.0 32.9 117.1 164.6 41.6 41.6 192.4 192.4 02/11 02/11 01/11 03/11 01/11 04/11 01/11 02/11 02/11 02/11 03/11 01/11 02/11 02/11 02/11 03/11 01/11 03/11 01/11 01/11 02/11 04/11 03/11 03/11 30 Company Country Rec. Risk Valor Reuters Bloomberg Currency Price 13.04.2011 52 Weeks high / low Performance P/E 12 months 2011 P/E 2012 Div. Yield Market Last Cap CHF Update EQUITIES NORTH AMERICA Technology Hardware APPLE CORNING HEWLETT-PACKARD Semiconductors INTEL TEXAS INSTRUMENTS Telecommunication AT&T US OP C 2'342'429 T.N t us USD 30.18 31.00 23.78 15.02 US US OP MP M M 941'595 976'910 INTC.O TXN.N intc us txn us USD USD 19.78 34.34 24.37 36.71 17.60 22.65 -15.90 27.66 US US US MP OP OP M D M 908'440 921'667 938'718 AAPL.O GLW.N HPQ.N aapl us glw us hpq us USD USD USD 336.13 19.34 41.13 364.90 23.43 54.75 199.25 15.45 37.32 36.81 -4.78 -24.56 12.9 14.6 9.7 7.8 10.6 9.7 13.0 12.8 12.8 11.3 12.7 8.8 7.2 9.8 9.0 12.1 11.8 11.8 5.7 3.6 1.5 0.0 1.0 0.8 383.3 276.7 27.1 79.5 133.0 97.0 36.0 159.4 159.4 03/11 02/11 02/11 01/11 02/11 02/11 31