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GLOBAL

TOPG MK Outperform Price (at 08:44, 16 Dec 2015 GMT) RM13.52

Valuation RM 13.36-20.04 - PER

12-month target RM 16.70 12-month TSR % +38.9 Market cap RMm 7,686

Investment fundamentals Year end 31 Aug (RM) 2015A 2016E 2017E 2018E Revenue m 2,510.5 3,203.5 3,860.6 4,490.4 EBIT m 389.6 528.5 533.7 561.5 Adjusted profit m 290.2 414.0 419.3 449.2 EPS adj sen 46.7 66.4 67.3 72.1 PER adj x 26.3 18.5 18.2 17.0 ROE % 19.3 23.8 21.2 20.4

HART MK Outperform Price (at 08:44, 16 Dec 2015 GMT) RM5.83

Valuation RM 4.63-6.48 - PER 12-month target RM 5.78 12-month TSR % -2.5 Market cap RMm 9,878

Investment fundamentals Year end 31 Mar (RM) 2015A 2016E 2017E 2018E Revenue m 1,146.0 1,626.4 2,144.9 2,624.9 EBIT m 277.0 363.7 412.4 464.5 Adjusted profit m 209.7 278.1 313.0 372.1 EPS adj sen 13.5 18.6 19.5 23.2 PER adj x 44.7 32.4 30.8 25.9 ROE % 19.0 19.8 19.3 20.5

SUCB MK Underperform Price (at 08:44, 16 Dec 2015 GMT) RM3.27

Valuation RM 1.95 - PER 12-month target RM 1.95 12-month TSR % -31.8 Market cap RMm 2,013

Investment fundamentals Year end 31 Dec (RM) 2014A 2015E 2016E 2017E Revenue m 1,007.5 1,466.3 1,919.3 2,416.9 EBIT m 129.8 141.6 170.7 223.7 Adjusted profit m 101.2 108.8 131.7 176.2 EPS adj sen 14.9 16.0 19.4 25.9 PER adj x 19.9 18.5 15.3 11.4 ROE % 10.8 10.3 11.2 13.8

ANN AU Outperform Price (at 05:10, 16 Dec 2015 GMT) A$20.25

Valuation A$ 26.50 - DCF (WACC 8.4%, beta 1.1, ERP 5.0%, RFR 3.8%, TGR 2.0%) 12-month target A$ 26.00 12-month TSR % +32.6 Market cap A$m 3,088

Investment fundamentals Year end 30 Jun (USD) 2015A 2016E 2017E 2018E Revenue m 1,645.1 1,618.1 1,708.1 1,799.6 EBIT m 243.3 240.8 260.6 312.0 Adjusted profit m 185.5 172.2 178.2 192.6 EPS adj ¢ 120.1 115.1 118.9 128.5 PER adj x 12.1 12.6 12.2 11.3 ROE % 16.3 15.1 15.0 15.1

Source: FactSet, Macquarie Research, December 2015

21 December 2015

Global rubber gloves A tale of two regions Event

Over the past 12 months we have seen a large divergence in the stock

performance between the Malaysian rubber glove manufacturers (TOPG.MK,

HART.MK and SUCB.MK) and Australian-based glove manufacturer Ansell

(ANN.AU). In this note, we examine the drivers underpinning this discrepancy

and assess the implications for future performance.

Impact

Currency and falling latex prices a significant boost for Malaysian

manufacturers: Earnings for the Malaysia manufacturers have been boosted

by the sharp fall in the MYR (-18% vs. USD) which, on a predominately MYR

cost base, has a meaningful impact on earnings. Conversely ANN’s higher

SG&A (which is matched to sales currency) means it has not been impacted

to the same extent. Further, ANN derives a higher proportion of sales (~1/4) in

EUR (which has remained relatively flat vs. the AUD) and also does not have

the same exposure to falling latex prices.

Malaysian players have boosted share: Hartalega and Top Glove have

both executed on meaningful capacity expansion over the past 12-18 months,

which has helped underpin significant market share gains. The debasing of

the MYR has also made the Malaysian companies more competitive against

their competitors in Thailand and China, where local currencies have not

fallen to the same extent. This together with efficiency programs has allowed

TOPG and HART to take market share at the same time as materially

improving profit margins.

Ansell continues to be impacted by industrial weakness: Unlike the

Malaysian manufacturers, ANN derives approximately half of its sales from its

industrial business. Global industrial activity has remained sluggish

throughout CY15, meaning that whilst ANN has performed well competitively

in the segment, organic growth has remained relatively flat.

Outlook

Outlook for Malaysia manufacturers remains strong: We expect earnings

for TOPG and HART to continue to grow as their ongoing capacity expansion

and production efficiencies are augmented by favourable currency and raw

material levels. Although SUCB will benefit from the same macro factors, it is

suffering from significant capacity constraints, which we believe do not

support the recent rally in its share price. Our preference order is Top Glove

(TOPG MK, RM13.52, Outperform, TP: RM16.70), Hartalega (HART MK,

RM5.83, Outperform, TP: RM5.78), follow by Supermax Corp (SUCB MK,

RM3.27, Underperform, TP: RM1.95), all covered by Chi Hoong Ng.

Ansell about to turn the corner: With global industrial activity likely to

remain suppressed in the medium term, the growth outlook for Ansell (ANN

AU, A$20.25, Outperform, TP: A$26.00, Craig Collie) remains lower than its

Malaysia peers. However at 12.5x F16E, we believe the subdued IP

environment is already reflected in its price and we see good support to

earnings from ongoing synergy extraction, further acquisitions, operational

efficiencies and continued growth in its more defensive medical and sexual

wellness businesses.

http://www.macquarie.com/research/disclosures

Macquarie Wealth Management Global rubber gloves

21 December 2015 2

Malaysian manufacturers have significantly outperformed Ansell in 2015

As highlighted below, Malaysian rubber glove manufacturers Top Glove (TOPG.MK +153%),

Hartalega (HART.MK +64%) and Supermax (SUCB.MK +68%) have significantly outperformed

Australian manufacturer Ansell (-4%) over CY15:

Fig 1 YTD stock performance


This outperformance has been driven by both faster earnings growth and greater PE multiple

expansion:

Earnings growth for the Malaysian manufacturers averaged 18% EPSg over F15 and F16e,

materially higher than the 3% delivered by ANN over the same period (Macq. forecasts);

PE multiple for the Malaysian manufacturers expanded by 51%, 45% and 26% for TOPG,

HART and SUCB respectively over CY15, whilst ANN’s multiple contracted by 10% over the

same period.

Fig 2 Outperformance driven by multiple expansion and change in earnings expectations

Note: ANN earnings depicted in listed currency (AUD) to allow for like-for-like comparison. Source: FactSet, Macquarie Research, December 2015.

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Total return index

Top Glove Hartalega Supermax Ansell

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PE ratios - One year forward


PER ∆

+45%

+51%

-10%

+26%

PE63%

11%

31%

4%

-20%

-10%

0%

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Change in 1yr forward earnings expectations



21 December 2015 3

Malaysia manufacturer earnings driven by FX, raw material savings and market share gains

Malaysian manufacturer earnings growth has been driven by capacity expansion, margin

expansion, favourable FX rates and lower raw material prices.

Capacity and volume expansion: The average capacity growth rate for the top 4 listed

manufacturers grew by 15% for the past 12 months, with almost all capacity dedicated to the

nitrile (synthetic) glove segment. Although capacity growth continues to outpace demand

growth, the listed manufacturers are able to keep utilisation healthy as they continue to take

market share from their competitors (foreign and local);

Fig 3 TOPG’s earnings growth driven by higher vols Fig 4 A similar story for HART...

Source: Company data, Macquarie Research, December 2015 Source: Company data, Macquarie Research, December 2015

Investment in automation: To protect their margins from increasing labour costs, Malaysian

manufacturers have modernised their production facilities (i.e. increased automation) since

the 2013 implementation of minimum wages in Malaysia. This transformation has started to

bear fruit, with their labour costs remaining relatively flat over the period (currently 11-12% of

COGS vs. the pre-2013 level of 8-9%); and

Fig 5 Automation has improved efficiency and allowed TOPG to maintain stable labour costs in the face of rising wages

Fig 6 HART was a pioneer of factory automation and has also kept labour costs at a relatively stable level since 2013

Source: Company data, Macquarie Research, December 2015 Source: Company data, Macquarie Research, December 2015

Favourable FX movements and low raw material prices: Falling natural latex prices (see

below) has helped the latex glove margins, which was badly impacted by the overcapacity

seen 2 years ago. Furthermore the weakening MYR has helped margins, as 60-80% of COGS

are MYR denominated, while revenue contracts continue to be predominately written in USD.

7.0

7.2

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8.0

8.2

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9.2

Nov-13 Feb-14 May-14 Aug-14 Nov-14 Feb-15 May-15 Aug-15

bn pcs/per Q Sales volume

0.0

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1.0

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Mar-14 Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep -15

bn pcs/ per QSales volume

Fuel11%

Labour11%

Packaging5%

Chemical9%

Overhead & others

17%

Latex47%

Fuel9%

Labour11%

Packaging5%

Chemical9%

Overhead & others

28%

Latex38%

TOPG cost breakdown – F15 HART cost breakdown – F15


21 December 2015 4

Fig 7 Latex prices have fallen significantly since 2013, assisting the recovery in latex glove margins...

Fig 8 Similarly the weakening of the MYR against the USD has also helped the recovery in margin

Source: Bloomberg, Macquarie Research, December 2015 Source: Bloomberg, Macquarie Research, December 2015

Ansell meanwhile has not enjoyed the same tailwinds

ANN’s earnings expectations have remained relatively flat over the past 12 months relative to its

Malaysian peers, for several reasons:

Comparatively less currency tailwinds: Unlike its Malaysian peers, ANN’s currency

tailwinds over the past 12 months have been relatively modest, for three reasons:

1. Unlike the MYR manufacturers ANN’s costs are relatively well matched to its revenues,

meaning that revenue tailwinds from a falling AUD have been offset by increasing costs

as in AUD terms;

2. ANN derives many of its overseas sales (~25% in F15) from European customers who

purchase goods in EUR – which relative to the AUD has been relatively flat (see below);

and

3. Whilst the AUD has fallen against the USD (-11% to date in CY15), it has not fallen as

much as the MYR over the same time period (-18%).

Fig 9 MYR has depreciated more than the AUD in CY15


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Latex (RM/kg)

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Change in currency

MYR/USD AUD/USD AUD/EUR


21 December 2015 5

Continued sluggishness in developed market manufacturing: ANN derives a significant

proportion of its earnings from industrial glove sales (~50%), unlike the Malaysian

manufacturers. Sales in this Division have been relatively flat for ANN over the past 12

months with developed market manufacturing and industrial activity (the main driver of growth)

having been subdued. As shown below, US PMI has tracked lower over the course of CY15

(with the exception of a minor spike in June), from 55.5 (at the beginning of January) to 48.6

(in December). Furthermore, ANN has relatively high exposure to the Oil and Gas and US

ports sub-sectors, which have experienced meaningful slowdowns in recent months;

Fig 10 Weakness in global PMI data over CY15, particularly in the US

Source: Bloomberg, Macquarie Research, December 2015

Weakness in Brazil and Russia: Two of ANN’s key emerging market businesses, Russia

and Brazil, significantly underperformed management’s expectations in F15. Russia’s sales

were severely impacted (-37%) by a falling oil price and a number of geopolitical sanctions.

The company also saw revenue declines in Brazil (-7% vs. F14) on the back of the sustained

macroeconomic weakness being felt in the region.

Malaysian manufacturer PE multiples have expanded on an improved growth outlook

The multiple expansions seen in the Malaysian rubber glove sector started in 2HCY15 and have

been driven by earnings delivery (recovery from CY14 lows), favourable macro price movements

(forex and latex) and also investors’ preference for growth stocks in Malaysia.

Earnings delivery and outlook: On average, the Malaysian glove sector has delivered 30%

earnings growth in F15 (significantly higher than the -10% earnings growth seen in F14). Top

Glove, the outperformer of the sector (+153% total return YTD), has an impressive earnings

growth rate of 55% for FY15, which was partly due to the recovery of earnings from a lower

base (-8% in F14 and -3% in F13). And with the market expecting further market share gains

and tailwinds from lower raw materials, the growth outlook for the companies remains strong;

Cost advantage relative to competitors to remain: The prolonged weakness of the MYR,

has made the Malaysian manufacturers more competitive against competitors in other

countries like Thailand and China. This has helped them maintain sharp pricing in USD and

market share gains, at the same time as expanding margins. Although it is difficult to predict

with great certainty future FX movements, at current levels we expect the relative cost

advantage of the Malaysian manufacturers to drive continued market share gains; and

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65 Manufacturing PMI

Eurozone USA China Japan Brazil


21 December 2015 6

A strong preference for growth stock in Malaysia: CY15 has been the year for export

oriented stocks in Malaysia due to both the weakening MYR and consumer sentiment. We

have seen a strong preference from investors for export names due to their strong earnings

delivery, while most domestically focussed stocks have languished. With both currency and

sentiment continuing to provide favourable trading conditions, we doubt the interest for the

sector will wear off soon, despite earnings growth normalising somewhat.

A lack of organic growth has hampered ANN’s PE multiple

ANN’s multiple has experienced a contraction since the beginning of CY15, declining from 15.2x

to 13.7% (-10%). We attribute this to three factors:

1. A lack of organic growth across all of ANN’s business units: ANN recorded 0.6% in

organic sales growth in F15 with the majority of the company’s growth being driven by

acquisitions (this has continued to be the case over recent years). With this challenge

now having persisted for a number of years, we believe concerns about ANN’s ability to

grow organically have increased;

2. Headwind from F16 as DTA benefits expire: ANN’s reported tax rate is set to increase

from ~15.5% in F15 to ~20.5% in F16 and to 24-25% in F17. This step-up is related to a

roll-off on the company’s accumulated DTA benefits, providing an additional headwind to

ANN’s earnings in the coming years, which we believe is now being reflected in its

multiple; and

3. Likely persistence of weak global manufacturing activity: As can be seen in the PMI

chart above (Fig 10), the second half of CY15 has seen a further weakening in global

manufacturing activity, with significant declines coming in the US and Brazil (two key

markets for ANN). With industrial activity a lead indicator for ANN sales growth, we

believe the continued sluggishness has dampened expectations for a rebound in sales

growth anytime soon.

Stock calls for the sector

Maintain Outperform on Top Glove (target price: RM16.70) and Hartalega (target price:

RM5.78): With ongoing capacity expansion and production efficiencies set to continue, we remain

positive on the growth outlook for both TOPG and HART. The upside risk to our earnings

forecasts and valuations is the continued weakening of both the MYR and raw material prices

(latex and nitrile).

Maintain Outperform on Ansell (target price: $26.00): Although global manufacturing activity

remains sluggish and with it ANN’s immediate organic growth prospects, we believe this is more

than reflected in its current multiple of 12.5x F16 EPS. And although it is difficult to predict the

timing of a rebound in global industrial activity we believe it will happen. In the meantime, we

believe ANN will still grow, through ongoing synergy extraction, acquisitions, operational

efficiencies and growth in its more defensive medical and sexual wellness businesses.

Maintain Underperform on Supermax (target price: RM1.95): Although SUCB will benefit from

the same macro factors as the other two Malaysian companies, it is suffering from significant

capacity constraints which we believe do not support the recent rally in its share price.

Management’s execution capability to consistently expand capacity is our biggest concern.


21 December 2015 7

Fig 11 The Malaysian names are forecast to experience superior earnings growth to their international peers

Price Target Up/(Down)

side ADV Rec Market cap PER1 (x)

Div Yield

1 (%)

EPS CAGR

1

(15-18)

Company Name Bbg Ticker (lcy) (lcy) (%) (US$ m) (US$m) FY0 FY1 FY2 FY3 FY1 FY2 %

Hartalega HART MK 5.99 5.78 -3.5 6.4 Opf 2,291 44.9 32.5 31.0 26.1 1.4 1.6 21.1 Top Glove Corp TOPG MK 13.00 16.70 28.5 8.1 Opf 1,889 29.1 20.5 20.2 18.9 2.4 2.5 15.7 Kossan Rubber KRI MK 8.94 na na 5.1 na 1,332 30.7 28.1 23.9 20.6 1.3 1.7 24.5 Supermax Corp SUCB MK 3.09 1.95 -36.9 4.4 Upf 483 19.9 18.5 15.3 11.4 1.9 2.3 20.3 Ansell Ltd ANN AU 20.44 26.00 27.2 18.6 Opf 2,236 12.4 12.9 12.5 11.6 2.8 2.9 1.3 Semperit Ag SEM AV 30.02 na na 0.5 na 668 12.0 13.4 12.0 10.1 3.8 4.3 7.2

Simple Average 27.4 22.5 20.6 17.7 2.0 2.2 16.6 Mkt Weighted Average 28.7 22.9 21.4 18.7 2.0 2.2 14.9

(1) Calculations conducted in USD. Source: Bloomberg, Macquarie Research, December 2015, Prices as of 18/12/2015


21 December 2015 8

Fig 12 Top Glove (TOPG MK, Outperform, Target Price: RM16.70) Quarterly Results 1Q/16A 2Q/16E 3Q/16E 4Q/16E Profit & Loss 2015A 2016E 2017E 2018E

Revenue m 800 804 798 801 Revenue m 2,511 3,203 3,861 4,490 Gross Profit m 268 206 195 190 Gross Profit m 700 859 933 1,058 Cost of Goods Sold m 532 598 603 610 Cost of Goods Sold m 1,811 2,344 2,927 3,433 EBITDA m 193 159 146 142 EBITDA m 488 640 656 695 Depreciation m 27 28 28 28 Depreciation m 98 111 122 133 Amortisation of Goodwill m 0 0 0 0 Amortisation of Goodwill m 0 0 0 0 Other Amortisation m 0 0 0 0 Other Amortisation m 0 0 0 0 EBIT m 165 131 118 114 EBIT m 390 529 534 561 Net Interest Income m -3 -2 -2 -2 Net Interest Income m -4 -11 -10 -0 Associates m 0 0 0 0 Associates m -12 0 0 0 Exceptionals m 0 0 0 0 Exceptionals m -17 0 0 0 Forex Gains / Losses m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Pre-Tax Profit m 162 128 116 112 Pre-Tax Profit m 357 518 524 562 Tax Expense m -32 -26 -23 -22 Tax Expense m -82 -104 -105 -112 Net Profit m 130 103 93 89 Net Profit m 275 415 419 449 Minority Interests m -1 0 0 0 Minority Interests m -1 -1 0 0

Reported Earnings m 129 103 93 89 Reported Earnings m 274 414 419 449 Adjusted Earnings m 129 103 93 89 Adjusted Earnings m 290 414 419 449

EPS (rep) sen 20.7 16.5 14.9 14.3 EPS (rep) sen 44.0 66.4 67.3 72.1 EPS (adj) sen 20.7 16.5 14.9 14.3 EPS (adj) sen 46.7 66.4 67.3 72.1 EPS Growth yoy (adj) % 155.8 59.3 16.9 -7.4 EPS Growth (adj) % 50.7 42.3 1.3 7.1

PE (rep) x 30.9 20.5 20.2 18.9 PE (adj) x 29.1 20.5 20.2 18.9

EBITDA Margin % 24.1 19.7 18.4 17.7 Total DPS sen 20.0 33.1 33.6 36.0 EBIT Margin % 20.6 16.2 14.8 14.3 Total Div Yield % 1.5 2.4 2.5 2.7 Earnings Split % 31.2 24.8 22.4 21.6 Basic Shares Outstanding m 624 623 623 623 Revenue Growth % 41.0 40.5 20.7 12.9 Diluted Shares Outstanding m 622 623 623 623 EBIT Growth % 156.6 59.9 9.2 -15.5

Profit and Loss Ratios 2015A 2016E 2017E 2018E Cashflow Analysis 2015A 2016E 2017E 2018E

Revenue Growth % 10.3 27.6 20.5 16.3 EBITDA m 488 640 656 695 EBITDA Growth % 53.9 31.1 2.5 5.9 Tax Paid m -56 -89 -105 -112 EBIT Growth % 73.0 35.6 1.0 5.2 Chgs in Working Cap m -522 63 -102 -58 Gross Profit Margin % 27.9 26.8 24.2 23.6 Net Interest Paid m -4 -11 -10 -0 EBITDA Margin % 19.4 20.0 17.0 15.5 Other m 448 -88 -7 16 EBIT Margin % 15.5 16.5 13.8 12.5 Operating Cashflow m 355 515 432 540 Net Profit Margin % 11.6 12.9 10.9 10.0 Acquisitions m -446 132 0 0 Payout Ratio % 42.9 49.9 50.0 50.0 Capex m -243 -212 -240 -300 EV/EBITDA x 17.9 13.3 13.0 12.2 Asset Sales m 0 0 0 0 EV/EBIT x 22.5 16.1 15.9 15.1 Other m 0 0 0 0

Investing Cashflow m -689 -80 -240 -300 Balance Sheet Ratios Dividend (Ordinary) m -105 -50 -213 -216 ROE % 19.3 23.8 21.2 20.4 Equity Raised m 18 18 0 0 ROA % 16.9 18.4 16.7 16.0 Debt Movements m 449 -131 0 0 ROIC % 22.5 21.6 23.6 22.1 Other m 0 0 0 0 Net Debt/Equity % 21.1 -3.9 -3.0 -3.7 Financing Cashflow m 362 -163 -213 -216

Interest Cover x 93.5 50.0 54.2 4,157.3 Price/Book x 5.3 4.5 4.1 3.7 Net Chg in Cash/Debt m 27 273 -21 24 Book Value per Share 2.6 3.0 3.3 3.7

Free Cashflow m 112 303 192 240

Balance Sheet 2015A 2016E 2017E 2018E Cash m 288 572 561 585 Receivables m 395 446 575 654 Inventories m 256 306 393 447 Investments m 528 396 396 396 Fixed Assets m 1,178 1,259 1,374 1,529 Intangibles m 23 23 23 23 Other Assets m 24 37 37 37 Total Assets m 2,692 3,039 3,358 3,670 Payables m 334 399 512 583 Short Term Debt m 498 397 397 397 Long Term Debt m 132 102 102 102 Provisions m 0 0 0 0 Other Liabilities m 114 259 255 272 Total Liabilities m 1,078 1,157 1,266 1,354 Shareholders' Funds m 1,608 1,875 2,085 2,310 Minority Interests m 6 7 7 7 Other m 0 0 0 0 Total S/H Equity m 1,615 1,882 2,092 2,316 Total Liab & S/H Funds m 2,692 3,039 3,358 3,670

All figures in MYR unless noted. Source: Company data, Macquarie Research, December 2015


21 December 2015 9

Fig 13 Hartalega (HART MK, Outperform, Target Price: RM5.78) Quarterly Results 2Q/16A 3Q/16E 4Q/16E 1Q/17E Profit & Loss 2015A 2016E 2017E 2018E

Revenue m 379 445 481 490 Revenue m 1,146 1,626 2,145 2,625 Gross Profit m 122 130 136 135 Gross Profit m 363 493 570 654 Cost of Goods Sold m 257 315 345 355 Cost of Goods Sold m 783 1,134 1,575 1,971 EBITDA m 92 115 121 114 EBITDA m 323 423 485 543 Depreciation m 17 14 14 18 Depreciation m 46 59 72 79 Amortisation of Goodwill m 0 0 0 0 Amortisation of Goodwill m 0 0 0 0 Other Amortisation m 0 0 0 0 Other Amortisation m 0 0 0 0 EBIT m 75 101 108 95 EBIT m 277 364 412 464 Net Interest Income m -0 -1 -2 -2 Net Interest Income m -0 -3 -9 -10 Associates m 0 0 0 0 Associates m 0 0 0 0 Exceptionals m 0 0 0 0 Exceptionals m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Pre-Tax Profit m 75 100 106 94 Pre-Tax Profit m 277 361 404 454 Tax Expense m -15 -25 -25 -22 Tax Expense m -67 -82 -90 -82 Net Profit m 61 75 80 71 Net Profit m 210 279 314 373 Minority Interests m -0 -0 -0 -0 Minority Interests m -1 -1 -1 -1


EPS (rep) sen 5.0 4.7 5.0 4.4 EPS (rep) sen 13.4 18.5 19.5 23.2 EPS (adj) sen 5.0 4.7 5.0 4.4 EPS (adj) sen 13.5 18.6 19.5 23.2 EPS Growth yoy (adj) % 60.6 49.0 46.2 13.4 EPS Growth (adj) % -14.4 38.2 4.9 18.9

PE (rep) x 45.0 32.7 31.0 26.1 PE (adj) x 44.9 32.5 31.0 26.1

EBITDA Margin % 24.2 25.7 25.2 23.2 Total DPS sen 6.8 8.7 9.8 11.6 EBIT Margin % 19.8 22.7 22.3 19.5 Total Div Yield % 1.1 1.4 1.6 1.9 Earnings Split % 21.7 26.9 28.9 22.7 Basic Shares Outstanding m 1,603 1,603 1,603 1,603 Revenue Growth % 37.8 55.4 57.8 52.8 Diluted Shares Outstanding m 1,559 1,503 1,603 1,603 EBIT Growth % 15.7 46.4 59.7 19.4


Revenue Growth % 3.5 41.9 31.9 22.4 EBITDA m 323 423 485 543 EBITDA Growth % -9.0 30.9 14.7 12.1 Tax Paid m -70 -79 -90 -82 EBIT Growth % -10.5 31.3 13.4 12.6 Chgs in Working Cap m -52 -148 -73 -96 Gross Profit Margin % 31.7 30.3 26.6 24.9 Net Interest Paid m -0 -3 -9 -10 EBITDA Margin % 28.2 26.0 22.6 20.7 Other m -1 -3 -1 -1 EBIT Margin % 24.2 22.4 19.2 17.7 Operating Cashflow m 200 189 312 355 Net Profit Margin % 18.3 17.1 14.6 14.2 Acquisitions m -2 -0 0 0 Payout Ratio % 50.7 46.6 50.0 50.0 Capex m -423 -390 -400 -200 EV/EBITDA x 30.0 22.9 20.0 17.8 Asset Sales m 0 0 0 0 EV/EBIT x 35.0 26.6 23.5 20.9 Other m 0 0 0 0

Investing Cashflow m -425 -390 -400 -200 Balance Sheet Ratios Dividend (Ordinary) m -105 -89 -139 -156 ROE % 19.0 19.8 19.3 20.5 Equity Raised m 228 78 0 0 ROA % 21.6 20.0 17.6 17.4 Debt Movements m 2 360 100 50 ROIC % 27.0 23.3 19.0 23.3 Other m 0 0 0 0 Net Debt/Equity % -5.0 9.5 -4.4 -6.5 Financing Cashflow m 124 349 -39 -106

Interest Cover x 2,564.9 116.5 48.5 46.4 Price/Book x 7.6 6.3 5.7 5.0 Net Chg in Cash/Debt m -100 149 -127 49 Book Value per Share 0.8 1.0 1.1 1.2

Free Cashflow m -223 -200 -88 155

Balance Sheet 2015A 2016E 2017E 2018E Cash m 70 219 92 141 Receivables m 199 318 383 467 Inventories m 120 246 305 379 Investments m 4 4 4 4 Fixed Assets m 1,044 1,379 1,707 1,828 Intangibles m 21 21 21 21 Other Assets m 0 0 0 0 Total Assets m 1,458 2,187 2,511 2,840 Payables m 109 209 259 322 Short Term Debt m 6 16 16 16 Long Term Debt m 0 350 0 0 Provisions m 0 0 0 0 Other Liabilities m 72 73 523 573 Total Liabilities m 187 648 798 911 Shareholders' Funds m 1,269 1,537 1,711 1,927 Minority Interests m 2 2 2 2 Other m 0 0 0 0 Total S/H Equity m 1,271 1,539 1,713 1,929 Total Liab & S/H Funds m 1,458 2,187 2,511 2,840



21 December 2015 10

Fig 14 Supermax Corp (SUCB MK, Underperform, Target Price: RM1.95) Quarterly Results 4Q/14A 1Q/15E 2Q/15E 3Q/15E Profit & Loss 2014A 2015E 2016E 2017E

Revenue m 259 324 350 383 Revenue m 1,008 1,466 1,919 2,417 Gross Profit m 61 61 66 71 Gross Profit m 243 273 336 425 Cost of Goods Sold m 198 263 284 312 Cost of Goods Sold m 764 1,193 1,584 1,992 EBITDA m 39 39 42 45 EBITDA m 159 173 204 258 Depreciation m 7 8 8 8 Depreciation m 30 31 33 35 Amortisation of Goodwill m 0 0 0 0 Amortisation of Goodwill m 0 0 0 0 Other Amortisation m 0 0 0 0 Other Amortisation m 0 0 0 0 EBIT m 32 32 34 37 EBIT m 130 142 171 224 Net Interest Income m -3 -4 -5 -5 Net Interest Income m -10 -20 -23 -26 Associates m 4 3 3 4 Associates m 9 14 17 22 Exceptionals m 0 0 0 0 Exceptionals m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Forex Gains / Losses m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Other Pre-Tax Income m 0 0 0 0 Pre-Tax Profit m 33 31 32 35 Pre-Tax Profit m 129 136 165 220 Tax Expense m -12 -4 -4 -4 Tax Expense m -29 -27 -33 -44 Net Profit m 20 27 28 31 Net Profit m 101 109 132 176 Minority Interests m 0 0 0 0 Minority Interests m 0 0 0 0


EPS (rep) sen 3.0 4.0 4.2 4.6 EPS (rep) sen 14.9 16.0 19.4 25.9 EPS (adj) sen 3.0 4.0 4.2 4.6 EPS (adj) sen 14.9 16.0 19.4 25.9 EPS Growth yoy (adj) % -19.9 2.6 6.1 11.8 EPS Growth (adj) % -21.0 7.4 21.1 33.8

PE (rep) x 19.9 18.5 15.3 11.4 PE (adj) x 19.9 18.5 15.3 11.4

EBITDA Margin % 15.2 12.1 12.0 11.7 Total DPS sen 5.0 5.6 6.8 9.1 EBIT Margin % 12.4 9.7 9.7 9.7 Total Div Yield % 1.7 1.9 2.3 3.1 Earnings Split % 19.8 25.1 26.1 28.6 Basic Shares Outstanding m 680 680 680 680 Revenue Growth % 34.6 39.6 47.0 37.5 Diluted Shares Outstanding m 680 680 680 680 EBIT Growth % -13.1 -4.1 3.8 15.2


Revenue Growth % -10.6 45.5 30.9 25.9 EBITDA m 159 173 204 258 EBITDA Growth % -9.7 8.5 17.8 26.8 Tax Paid m -36 -27 -33 -44 EBIT Growth % -12.8 9.1 20.6 31.1 Chgs in Working Cap m 27 -247 -159 -166 Gross Profit Margin % 24.1 18.6 17.5 17.6 Net Interest Paid m -10 -20 -23 -26 EBITDA Margin % 15.8 11.8 10.6 10.7 Other m -7 247 22 22 EBIT Margin % 12.9 9.7 8.9 9.3 Operating Cashflow m 133 126 11 45 Net Profit Margin % 10.0 7.4 6.9 7.3 Acquisitions m 0 0 0 0 Payout Ratio % 33.6 35.0 35.0 35.0 Capex m -169 -60 -60 -60 EV/EBITDA x 13.2 11.9 10.1 8.0 Asset Sales m 0 0 0 0 EV/EBIT x 16.0 14.4 11.9 9.1 Other m 0 0 0 0

Investing Cashflow m -169 -60 -60 -60 Balance Sheet Ratios Dividend (Ordinary) m -20 -34 -38 -46 ROE % 10.8 10.3 11.2 13.8 Equity Raised m 0 0 0 0 ROA % 9.0 8.7 9.4 11.2 Debt Movements m 40 174 53 71 ROIC % 9.6 9.4 10.2 11.7 Other m -10 -20 -23 -26 Net Debt/Equity % 22.5 18.4 26.1 30.4 Financing Cashflow m 10 120 -8 -0

Interest Cover x 13.1 7.2 7.4 8.7 Price/Book x 2.1 1.8 1.7 1.5 Net Chg in Cash/Debt m -26 186 -56 -15 Book Value per Share 1.4 1.7 1.8 2.0

Free Cashflow m -36 66 -49 -15

Balance Sheet 2014A 2015E 2016E 2017E Cash m 132 318 262 246 Receivables m 285 303 390 483 Inventories m 160 298 385 475 Investments m 0 0 0 0 Fixed Assets m 670 552 579 604 Intangibles m 29 29 29 29 Other Assets m 229 238 248 257 Total Assets m 1,505 1,738 1,893 2,095 Payables m 114 38 50 62 Short Term Debt m 229 229 253 284 Long Term Debt m 123 296 327 367 Provisions m 0 0 0 0 Other Liabilities m 59 43 48 52 Total Liabilities m 525 607 677 764 Shareholders' Funds m 980 1,132 1,217 1,332 Minority Interests m -1 -1 -1 -1 Other m 0 0 0 0 Total S/H Equity m 980 1,131 1,216 1,331 Total Liab & S/H Funds m 1,505 1,738 1,893 2,095



21 December 2015 11

Fig 15 Ansell (ANN AU, Outperform, Target Price: AUD26.00)

Source: Company data, Macquarie Research, December 2015

Profit & Loss USD 1H/15A 2H/15A 1H/16E 2H/16E 1H/17E 2H/17E 1H/18E 2H/18E 2015A 2016E 2017E 2018E

Sales

Industrial US$m 349.5 319.0 322.8 341.5 337.0 364.3 356.0 382.9 668.5 664.3 701.3 738.8

Specialty US$m 160.3 152.1 149.8 163.6 156.4 174.4 165.2 183.3 312.4 313.4 330.8 348.5

Medical US$m 228.8 218.4 200.8 222.0 209.6 236.6 221.4 248.7 447.2 422.7 446.2 470.1

SHWB US$m 108.7 108.3 105.7 111.9 110.4 119.4 116.6 125.5 217.0 217.7 229.8 242.1

Total Sales US$m 847.3 797.8 779.2 839.0 813.4 894.7 859.2 940.4 1645.1 1618.1 1708.1 1799.6

Growth % 20.4% -10.0% -8.0% 5.2% 4.4% 6.6% 5.6% 5.1% 3.5% -1.6% 5.6% 5.4%

+ Other US$m 2.8 2.4 2.3 2.2 2.3 2.8 3.0 3.5 5.2 4.6 5.0 6.5

Total Revenue US$m 850.1 800.2 781.5 841.2 815.7 897.5 862.1 943.9 1650.3 1622.7 1713.2 1806.1

Reported EBITDA US$m 135.6 136.0 124.6 152.4 128.3 171.6 138.3 183.2 271.6 277.0 299.9 321.5

EBITDA margin % 16.0% 17.0% 16.0% 18.2% 15.8% 19.2% 16.1% 19.5% 16.5% 17.1% 17.6% 17.9%

- Depreciation & Other Amortisation US$m 17.3 11.0 17.7 18.5 19.3 20.1 20.9 21.8 28.3 36.2 39.4 42.8

% of sales % 2.0% 1.4% 2.3% 2.2% 2.4% 2.2% 2.4% 2.3% 1.7% 2.2% 2.3% 2.4%

Industrial US$m 44.4 48.3 42.1 52.3 43.2 59.5 46.5 63.4 92.7 94.4 102.7 109.9

Single Use US$m 28.7 31.0 27.0 33.3 27.5 36.9 29.4 39.2 59.7 60.3 64.4 68.7

Medical US$m 34.9 35.7 30.1 35.6 30.7 40.2 33.0 42.8 70.6 65.8 70.9 75.7

SHWB US$m 12.7 13.4 12.2 13.8 12.6 16.0 13.6 17.1 26.1 26.0 28.6 30.7

Corporate revenue/costs US$m -2.4 -5.4 -4.7 -1.0 -4.9 -1.1 -5.2 -1.2 -7.8 -5.7 -6.0 -6.3

Underlying EBIT US$m 118.3 123.0 106.8 134.0 109.1 151.5 117.3 161.4 241.3 240.8 260.6 278.7

EBIT margin % 14.0% 15.4% 13.7% 16.0% 13.4% 16.9% 13.7% 17.2% 14.7% 14.9% 15.3% 15.5%

Reported EBIT US$m 118.3 125.0 106.8 134.0 109.1 151.5 117.3 161.4 243.3 240.8 260.6 278.7

EBIT margin % 14.0% 15.7% 13.7% 16.0% 13.4% 16.9% 13.7% 17.2% 14.8% 14.9% 15.3% 15.5%

- Net Interest Expense US$m 10.8 10.7 11.6 10.9 11.3 11.2 10.8 10.7 21.5 22.5 22.5 21.5

Pretax Profit US$m 107.5 114.3 95.2 123.0 97.8 140.3 106.5 150.7 221.8 218.3 238.0 257.2

- Tax Expense US$m 18.6 16.1 18.9 25.7 24.0 34.4 26.1 36.9 34.7 44.6 58.3 63.0

tax rate % 17.3% 14.1% 19.8% 20.9% 24.5% 24.5% 24.5% 24.5% 15.6% 20.4% 24.5% 24.5%

Net Profit US$m 88.9 100.2 76.4 97.3 73.8 105.9 80.4 113.8 189.1 173.7 179.7 194.2

- Minority Interests US$m 1.2 0.4 0.6 0.8 0.6 0.9 0.7 1.0 1.6 1.5 1.5 1.6

Reported Profit US$m 87.7 99.8 75.7 96.5 73.2 105.0 79.8 112.8 187.5 172.2 178.2 192.6

- Abnormals US$m 0.0 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.0 0.0

Adjusted Profit US$m 87.7 99.4 75.7 96.5 73.2 105.0 79.8 112.8 187.1 172.2 178.2 192.6

Gross Cashflow US$m 106.2 109.2 94.1 115.8 110.1 125.2 100.5 153.1 215.4 209.9 235.2 253.6

EPS (basic) US¢ 57.3 65.2 50.4 65.6 49.7 71.4 54.2 76.6 122.4 116.0 121.1 130.8

EPS (adj / fully diluted) US¢ 56.8 64.4 50.0 65.0 48.8 70.1 53.2 75.3 121.2 115.1 118.9 128.5

EPS Growth % 22.3% 7.0% -12.0% 1.0% -2.3% 7.7% 9.0% 7.4% 13.7% -5.0% 3.3% 8.0%

CFPS (incl. NIA, fully diluted) US¢ 68.8 70.7 62.2 78.1 73.4 83.5 67.1 102.2 139.5 140.2 157.0 169.3

DPS as paid in Australian currency A¢ 23.6 30.0 26.7 37.2 27.7 38.5 27.8 37.9 53.6 63.8 66.2 65.7

PGCFPS x 15.3 15.2 14.6 13.5

Yield % 2.0% 1.9% 2.0% 2.1%

Franking % 0.0% 0.0% 0.0% 0.0%

EV/EBIT 1.9 2.1 1.7 1.3

Ordinary Fully Paid m 153.1 153.2 150.2 147.2 147.2 147.2 147.2 147.2 153.2 147.2 147.2 147.2

EFPOWA m 154.4 154.4 151.4 148.3 149.9 149.9 149.9 149.9 154.4 149.9 149.9 149.9

Cashflow Analysis USD 1H/15A 2H/15A 1H/16E 2H/16E 1H/17E 2H/17E 1H/18E 2H/18E 2015A 2016E 2017E 2018E

EBITDA US$m 135.6 136.0 124.6 152.4 128.3 171.6 138.3 183.2 271.6 277.0 299.9 321.5

- Inc. in Working capital US$m 19.9 7.8 -18.5 25.5 -10.9 34.7 -15.2 34.7 27.7 7.0 23.8 19.5

- Net Interest Paid US$m 11.3 10.8 10.7 11.6 10.9 11.3 11.2 10.8 22.1 22.3 22.2 22.1

- Tax Paid US$m 10.2 12.5 16.1 18.9 25.7 24.0 34.4 26.1 22.7 34.9 49.7 60.5

+ Other (P&L asset sales) US$m 0.0 0.4 0.0 0.0 0.0 0.0 0.0 0.0 0.4 0.0 0.0 0.0

Net Cash in Op Activities US$m 94.2 105.3 116.3 96.5 102.6 101.7 107.9 111.6 199.5 212.8 204.3 219.5

+ Asset Sales US$m 0.1 22.4 0.0 0.0 0.0 0.0 0.0 0.0 22.5 0.0 0.0 0.0

- Capex, Acq's & Invest. US$m 56.4 135.1 32.6 34.0 35.5 37.1 38.7 40.4 191.5 66.6 72.6 79.0

+ Other US$m 11.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 11.6 0.0 0.0 0.0

Net cash in investing US$m -44.7 -112.7 -32.6 -34.0 -35.5 -37.1 -38.7 -40.4 -157.4 -66.6 -72.6 -79.0

- Dividends Paid (before DRP) US$m 29.7 30.8 35.2 27.0 34.5 25.9 37.1 28.2 60.5 62.3 60.3 65.3

+ Equity Movements (inc. DRP) US$m 0.5 0.0 -64.5 -64.5 0.0 0.0 0.0 0.0 0.5 -129.0 0.0 0.0

+ Debt Movements US$m -36.6 75.1 0.0 0.0 0.0 0.0 0.0 0.0 38.5 0.0 0.0 0.0

+ Other US$m -10.5 -10.8 0.0 0.0 0.0 0.0 0.0 0.0 -21.3 0.0 0.0 0.0

Net cash in financing US$m -76.3 33.5 -99.7 -91.5 -34.5 -25.9 -37.1 -28.2 -42.8 -191.3 -60.3 -65.3

Opening Cash balance US$m 324.2 269.6 281.4 265.4 249.9 282.5 334.9 366.9 324.2 281.4 249.9 334.9

Net Increase in Cash US$m -26.8 26.1 -16.0 -29.1 32.6 38.7 32.1 43.1 -0.7 -45.1 71.4 75.1

+ Adjusting Figure (inc. net exch. diff.) US$m -27.8 -14.3 0.0 0.0 0.0 0.0 0.0 0.0 -42.1 0.0 0.0 0.0

Net Cash movement US$m -54.6 11.8 -16.0 -29.1 32.6 38.7 32.1 43.1 -42.8 -45.1 71.4 75.1

Cash Balance US$m 269.6 281.4 265.4 249.9 282.5 334.9 366.9 423.6 281.4 236.3 321.3 410.0

Performance Analysis Balance Sheet (US$m) 2015A 2016E 2017E 2018E

Cash + equiv 281.4 249.9 334.9 423.6

Current Assets 616.1 627.7 667.1 699.3

Investments 0.0 0.0 0.0 0.0

Fixed Assets 231.2 261.6 294.8 331.0

Intangibles 1116.0 1116.0 1116.0 1116.0

Other Assets 131.7 131.7 131.7 131.7

Total Assets 2376.4 2386.9 2544.4 2701.7

Short Term Debt 7.1 7.1 7.1 7.1

Long Term Debt 734.0 747.6 761.2 774.8

Other Liabilities 468.7 483.2 507.7 522.5

Total Liabilities 1209.8 1237.9 1276.0 1304.4

Net Assets 1166.6 1149.0 1268.4 1397.3

Shareholders Funds 1151.8 1132.7 1250.6 1377.9

Minority Interests 14.8 16.3 17.8 19.4

Total Shareholder Funds 1166.6 1149.0 1268.4 1397.3

Ratios 2015A 2016E 2017E 2018E

Working Capital 309.8 316.8 340.6 360.1

Interest cover (times)

Gearing (D/D+E) (%) 28.3% 30.5% 25.5% 20.4%

Return on Equity (%) 16.3% 14.9% 14.7% 14.4%

Return on Assets (%) 10.3% 10.1% 10.6% 10.6%

Indust.

37%

Single Use

24%

Medical

28%

SHWB

11%

FY15 EBIT breakdown %


21 December 2015 12

Important disclosures:

Recommendation definitions

Macquarie - Australia/New Zealand

Outperform – return >3% in excess of benchmark return Neutral – return within 3% of benchmark return Underperform – return >3% below benchmark return Benchmark return is determined by long term nominal GDP growth plus 12 month forward market dividend yield

Macquarie – Asia/Europe Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10%

Macquarie – South Africa Outperform – expected return >+10% Neutral – expected return from -10% to +10% Underperform – expected return <-10%

Macquarie - Canada Outperform – return >5% in excess of benchmark return Neutral – return within 5% of benchmark return Underperform – return >5% below benchmark return

Macquarie - USA Outperform (Buy) – return >5% in excess of Russell 3000 index return Neutral (Hold) – return within 5% of Russell 3000 index return Underperform (Sell)– return >5% below Russell 3000 index return

Volatility index definition*

This is calculated from the volatility of historical price movements. Very high–highest risk – Stock should be expected to move up or down 60–100% in a year – investors should be aware this stock is highly speculative. High – stock should be expected to move up or down at least 40–60% in a year – investors should be aware this stock could be speculative. Medium – stock should be expected to move up or down at least 30–40% in a year. Low–medium – stock should be expected to move up or down at least 25–30% in a year. Low – stock should be expected to move up or down at least 15–25% in a year. * Applicable to Asia/Australian/NZ/Canada stocks only

Recommendations – 12 months Note: Quant recommendations may differ from Fundamental Analyst recommendations

Financial definitions

All "Adjusted" data items have had the following adjustments made: Added back: goodwill amortisation, provision for catastrophe reserves, IFRS derivatives & hedging, IFRS impairments & IFRS interest expense Excluded: non recurring items, asset revals, property revals, appraisal value uplift, preference dividends & minority interests EPS = adjusted net profit / efpowa* ROA = adjusted ebit / average total assets ROA Banks/Insurance = adjusted net profit /average total assets ROE = adjusted net profit / average shareholders funds Gross cashflow = adjusted net profit + depreciation *equivalent fully paid ordinary weighted average number of shares All Reported numbers for Australian/NZ listed stocks are modelled under IFRS (International Financial Reporting Standards).

Recommendation proportions – For quarter ending 30 September 2015

AU/NZ Asia RSA USA CA EUR Outperform 48.87% 59.96% 35.63% 42.13% 59.44% 42.11% (for US coverage by MCUSA, 3.54% of stocks followed are investment banking clients)

Neutral 33.44% 25.00% 39.08% 52.55% 37.06% 38.42% (for US coverage by MCUSA, 5.05% of stocks followed are investment banking clients)

Underperform 17.68% 15.04% 25.29% 5.32% 3.50% 19.47% (for US coverage by MCUSA, 0.51% of stocks followed are investment banking clients)

SUCB MK vs KLCI, & rec history

(all figures in MYR currency unless noted)

HART MK vs KLCI, & rec history


TOPG MK vs KLCI, & rec history


ANN AU vs ASX 100, & rec history

(all figures in AUD currency unless noted)

Note: Recommendation timeline – if not a continuous line, then there was no Macquarie coverage at the time or there was an embargo period.


12-month target price methodology

SUCB MK: RM1.95 based on a PER methodology

HART MK: RM5.78 based on a PER methodology

TOPG MK: RM16.70 based on a PER methodology

ANN AU: A$26.00 based on a DCF methodology

Company-specific disclosures: TOPG MK: Macquarie may be an Issuer of Structured Warrants on securities mentioned in this report HART MK: Macquarie may be an Issuer of Structured Warrants on securities mentioned in this report SUCB MK: Macquarie may be an Issuer of Structured Warrants on securities mentioned in this report. Macquarie Group Limited together with its affiliates beneficially owns 1% or more of the equity securities of Supermax Corporation Bhd. ANN AU: Macquarie and its affiliates collectively and beneficially own or control 1% or more of any class of Ansell Limited's equity securities. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/research/disclosures.

Target price risk disclosures: TOPG MK: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures.


21 December 2015 13

HART MK: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. SUCB MK: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures. ANN AU: Any inability to compete successfully in their markets may harm the business. This could be a result of many factors which may include geographic mix and introduction of improved products or service offerings by competitors. The results of operations may be materially affected by global economic conditions generally, including conditions in financial markets. The company is exposed to market risks, such as changes in interest rates, foreign exchange rates and input prices. From time to time, the company will enter into transactions, including transactions in derivative instruments, to manage certain of these exposures.

Analyst certification: We hereby certify that all of the views expressed in this report accurately reflect our personal views about the subject company or companies and its or their securities. We also certify that no part of our compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. The Analysts responsible for preparing this report receive compensation from Macquarie that is based upon various factors including Macquarie Group Ltd total revenues, a portion of which are generated by Macquarie Group’s Investment Banking activities. General disclosure: This research has been issued by Macquarie Securities (Australia) Limited (ABN 58 002 832 126, AFSL No. 238947) a Participant of the Australian Securities Exchange (ASX) and Chi-X Australia Pty Limited. This research is distributed in Australia by Macquarie Equities Limited (ABN 41 002 574 923, AFSL No. 237504) ("MEL"), a Participant of the ASX, and in New Zealand by Macquarie Equities New Zealand Limited (“MENZ”) an NZX Firm. Macquarie Private Wealth’s services in New Zealand are provided by MENZ. Macquarie Bank Limited (ABN 46 008 583 542, AFSL No. 237502) (“MBL”) is a company incorporated in Australia and authorised under the Banking Act 1959 (Australia) to conduct banking business in Australia. None of MBL, MGL or MENZ is registered as a bank in New Zealand by the Reserve Bank of New Zealand under the Reserve Bank of New Zealand Act 1989. Any MGL subsidiary noted in this research, apart from MBL, is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Australia) and that subsidiary’s obligations do not represent deposits or other liabilities of MBL. MBL does not guarantee or otherwise provide assurance in respect of the obligations of that subsidiary, unless noted otherwise. This research is general advice and does not take account of your objectives, financial situation or needs. Before acting on this general advice, you should consider the appropriateness of the advice having regard to your situation. We recommend you obtain financial, legal and taxation advice before making any financial investment decision. This research has been prepared for the use of the clients of the Macquarie Group and must not be copied, either in whole or in part, or distributed to any other person. If you are not the intended recipient, you must not use or disclose this research in any way. If you received it in error, please tell us immediately by return e-mail and delete the document. We do not guarantee the integrity of any e-mails or attached files and are not responsible for any changes made to them by any other person. Nothing in this research shall be construed as a solicitation to buy or sell any security or product, or to engage in or refrain from engaging in any transaction. This research is based on information obtained from sources believed to be reliable, but the Macquarie Group does not make any representation or warranty that it is accurate, complete or up to date. We accept no obligation to correct or update the information or opinions in it. Opinions expressed are subject to change without notice. The Macquarie Group accepts no liability whatsoever for any direct, indirect, consequential or other loss arising from any use of this research and/or further communication in relation to this research. The Macquarie Group produces a variety of research products, recommendations contained in one type of research product may differ from recommendations contained in other types of research. The Macquarie Group has established and implemented a conflicts policy at group level, which may be revised and updated from time to time, pursuant to regulatory requirements; which sets out how we must seek to identify and manage all material conflicts of interest. The Macquarie Group, its officers and employees may have conflicting roles in the financial products referred to in this research and, as such, may effect transactions which are not consistent with the recommendations (if any) in this research. The Macquarie Group may receive fees, brokerage or commissions for acting in those capacities and the reader should assume that this is the case. The Macquarie Group‘s employees or officers may provide oral or written opinions to its clients which are contrary to the opinions expressed in this research. Important disclosure information regarding the subject companies covered in this report is available at www.macquarie.com/disclosures.

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