Investment Research
June 2014
UBS European Autos
Stiff upper lip - The future remains fairly bright
Philippe Houchois
Analyst
Tel: +44 207 568 3474
philippe.houchois@ubs.co
m
This document has been prepared by UBS Limited
ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON SLIDE 33
UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest
that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Investors are getting a bit nervous on Autos
 5 years of strong performance – we see muted upside from here
 Recent sales data points have been uneven; China property concerns came back; EM currency problem turned into a demand
problem; but German sales and production data strong
 Cash rich balance sheets undermine valuation multiples – Auto stocks can easily become value traps
 Our sector investment stance in 2014 is cautious with a preference for tires and suppliers
Light vehicle sales – April and ytd
European auto index vs European index
300
20.0%
15.0%
250
10.0%
200
5.0%
0.0%
150
-5.0%
100
-10.0%
50
Jan-09
-15.0%
Jan-10
Jan-11
SXAP
Source: Datastream, UBS estimates
Jan-12
Jan-13
FTSE350
Jan-14
W
Europe
USA
China
Russia
YTD
Brazil
India
Japan
April
Source: IHS Automotive, Anfavea, UBS estimates
2
Contrasted performance
Regional auto indices – local currency – 100 in Jan 2009
European OEM share price performance – 100 in Jan 2009
600
900
800
500
700
600
400
500
300
400
300
200
200
100
100
0
Jan-09
Jul-09
Jan-10
Europe
Jul-10
Jan-11
USA
Jul-11
Jan-12
Japan
Jul-12
Korea
Jan-13
Jul-13
Jan-14
0
Jan-09
Jul-09
China
BMW
Jan-10
Jul-10
Jan-11
Jul-11
Jan-12
Source:
Datastream,
UBS
Daimler
VW
Jul-12
Jan-13
estimates
Renault
PSA
Jul-13
Jan-14
Fiat
3
Where are we in the cycle?
 Different OEMs at different stages within their internal cycle
 Should we think differently about the cycle?
DAI
BMW
VW
PSA
RNO
Source: UBS estimates
4
SECTION 1
3 key reasons to be positive on Autos
- Growth has shifted from GDP- to GDP+
- Product supports demand and cars are expected to change more in
the next 10 years than in the past 30
- Improved risk management: capex, currency, even recalls
Growth (I) – Market growth structurally higher
 Market de-concentration reduces risk - BRIC shares up 4x to 37% in 2013
 Share of US, W Europe & Japan -30 points to 41% in the same period
 3% trend level growth maintained in 2006-11 despite DM declines
 4-5% growth looking like the "new normal" and 2013-14 below trend
Share of developed markets vs emerging markets car sales
Car sales (in m units) and CAGR over 5-year periods
90%
80%
DM
EM
70%
60%
50%
40%
30%
20%
10%
0%
Source: IHS Automotive, UBS
estimates
Source: IHS Automotive, UBS
estimates
6
Growth (II) - Car parc growth has shifted up
 Conversion rate from new car sales to parc has been driven almost exclusively by EMs. DM conversion rate <10% vs 70+% in
EMs
 Global car parc growing at 3.5-4% per annum vs 1.5-2.0% previously
 Faster growing auto parc (EMs) and rejuvenated mature market parc should drive tire replacement volume growth of 5+%, 2pp
higher than new car demand near term
From sales to parc – conversion rate (m units) – cumulative
sales 2007-2013 (6 years)
Global car parc and contribution per region (m units)
1400
250
1200
200
1000
800
150
600
100
400
50
200
0
0
2008 2010 2012 2014 2016 2018 2020
TRIAD
RoW
E Europe
LatAm
Emerging Asia
China
Source: IHS Automotive, UBS
estimates
Developed markets
Cum sales 2008-2013
Developing markets
Increase in parc
Source: IHS Automotive, UBS
estimates
7
Growth (III) – The global consumer has become a reality
Global SUV sales (m units)
 Access to information has helped create global
(uniform?) tastes
 SUV sales have tripled over the last decade. Since 2009,
SUV have grown at 18% CAGR, more than 3x faster
than the market
 Higher levels of sharing and standardisation (not without
risks)
Source: IHS Automotive, UBS
estimates
Cars per 1000 inhabitants vs GDP per capita
800
700
600
500
400
300
200
100
0
Cars per 1000
inhabitants
United States
Iceland
Canada
Slovenia
Italy FranceJapan Finland
Austria
United Kingdom
Poland
BelgiumNetherlands
Germany
Portugal
Sweden
Greece Spain
Latvia Czech Republic
Denmark
Ireland
Croatia
BulgariaHungary Estonia
South Korea
Slovakia
Malaysia
Mexico
Russia
Argentina
Serbia Romania
Brazil Uruguay
ThailandS. Africa
Chile
Turkey
Venezuela
Ecuador
China
Colombia
PhilippinesParaguay
GDP per capita 2011 $
India
0
10,000
20,000
30,000
40,000
50,000
Source: IHS Automotive, UBS
estimates
60,000
8
Towards a "better" car (I) – Self/assisted driving car
 We think cars will change more in the coming 10 years than they have in the past 30 years
Source: Continental
 Hurdles similar to EVs; "chicken vs egg" on infrastructure
 Timeline
– Driver assistance: Now to 2018-2020 – Driver rules
– Partial automation, from 2018-2020 – Shared vehicle-human driving
– Fully automated driving, from 2025? – Machine as the main driver
9
Towards a "better" car (II) – Not always clear who will benefit
 Was this year's Consumer Electronic Show in Las Vegas the first global auto show? Non auto hardware
OEMs concerned about slowing growth in tablets and mobiles
 OEMs: Risk that on-board hardware becomes a "cost of doing business" within the car
 Suppliers set to benefit from rising content and ability to integrate functions in a "hostile" auto environment:
noise, vibration, heat variation
 Will consumers pay for self driving and how? - Subscription model: content and telecom operators have an
edge over OEMs. Remember telematics in the early 2000s
 Hardware: optional (self parking) vs gradually standard equipment (for example required by insurance
companies)
 Positive for replacement given parc age and lower cost of ownership. Supply and regulation set to remain
major drivers of auto demand
Towards a "better" car (III) – Asset utilisation
 Cars are an under-utilised and fast-depreciating asset
 Generation change towards usage vs ownership: car/ride sharing
– commoditisation of personal cars; past 2 car family,
– cost of ownership as a deterrent (purchase, depreciation, insurance),
 Difficult transition phase
– Initial slowdown in replacement demand
Number of car-sharing members worldwide
– followed by more intense utilisation
 New applications
– Personal productivity inside vehicles
– Storing electricity in vehicle batteries
 Higher velocity of replacement, eventually
Source: Avis Budget Group
11
A better managed industry (I) – however adverse still
More and more OEMs (cumul share of production) …
100%
but concentration showing improvement (HHI index)
1000
90%
900
80%
70%
800
60%
700
50%
600
40%
30%
500
20%
2000
10%
2013
400
31
HHI
300
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
0%
1
4
7
10
13
16
19
22
25
28
34
37
40
43
46
49
Rising productivity (units per platform in ,000s, rhs)
500
240.0
450
European auto OEMs – Returns on invested capital
220.0
Post tax ROIC
35%
30%
25%
400
350
300
200.0
20%
180.0
15%
250
BMW
Volkswagen
Renault
Daimler
Peugeot
Sector
10%
160.0
200
150
140.0
0%
120.0
-5%
100
50
5%
-10%
0
100.0
2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Platforms
-15%
Volume per platform
12
Source: IHS Automotive, company data, UBS estimates
A better managed industry (II) – Capital intensity under control
 Capacity expansion in all key regions ex Europe
 Transition to modular assembly requires investment in
manufacturing processes
Capex as a % of industrial revenue for EU OEMs
6.0%
5.5%
5.0%
 High investment requirements
4.5%
– CO2 regulation, electrification
4.0%
– Safety, autonomous driving
3.5%
 China at equity understates invested capital (not
consolidated)
3.0%
Source: IHS Automotive, UBS
estimates
R&D as a % of industrial revenue for EU OEMs
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
Source: Company data, UBS estimates
13
A better managed industry (III) – Currency exposure improved
– Currency imbalance, i.e. foreign currency revenue not fully matched by similar currency costs,
remains high at c.30% of global auto revenue (2015E) but is declining sharply.
– The trend is set to continue, and new platform designs should lower the threshold at which localising
production becomes viable.
– VW and Ford screen best - Korean and premium Germans screen weakest.
– The share of traditional auto currencies (dollar, euro, yen and sterling) has shrunk from c.80% of
global industry revenue to c.50%
– We think currency is one of many performance drivers, but is not a determinant.
Cross-region shipments of fully built vehicles FBUs), i.e. cars sold
and produced across currency zones
20,000
30%
19,000
28%
18,000
26%
17,000
24%
16,000
22%
15,000
20%
14,000
18%
13,000
16%
12,000
14%
11,000
12%
10,000
10%
2001
2003
2005
2007
Total traded (units)
2009
2011
2013
Net currency exposure as % of auto revenue
60%
50%
2012
2015
40%
30%
20%
10%
0%
2015
Total traded (share)
Source: IHS Automotive, UBS
estimates
14
SECTION 2
3 key reasons to be cautious on Autos
- CO2 compliance investment is a negative sum game
- Governments: more foes than friends
- Finance companies and rising rates
CO2 regulation (I) - Alternative powertrain
Emissions targets across countries – CO2 or equivalent
250
2010
 Parallel investment in alternative powertrain is a negative sum gain
2015
2020
200
– More capital spent but same number of cars sold
150
– New entrants opportunities (Tesla)
– Unclear public policy, no pricing mechanism to charge user, weak commitment to infrastructure
spending
100
50
0
Alternative powertrain options
Europe
USA
Japan
China
Source: ICCT, CAFÉ, SAE International, EU, UBS estimates
16
Source: Roland Berger
CO2 regulation (II) – Losing weight is hard to do
 Weight reduction of 100kg saves between 3 g/km and 13 g/km. Most CO2 reduction technologies add to vehicle weight. PHEV powertrain
adds an extra 15+% to a car's weigh (150-200kg on average) vs ICE
 Recently launched vehicles have achieved reductions of 100kgs. At constant powertrain, reductions of 300-400kgs are needed.
– Converting a Tesla Model S to ICE would only match the weight of an A7
– But converting an i3 to ICE could still make it 300-400kg lighter than an X1
 Key drivers: materials (alum, magnesium, carbon fiber), re-design (engineering) and de-contenting
Average missions and weight of European vehicles
Source: International Council on Clean Transportation
Average aluminium content per car
Source: European Aluminium Association
17
CO2 regulation (III) – Fuel cell revival looks compelling
 The case for fuel cell looks unmatched: CO2, range and infrastructure hurdle
 Commitments to commercial launch in 2015
– Hyundai Tuscon
2015
– Honda FCX Clarity
2015
– Toyota FCV concept
2015
– Ford, GM and Daimler to follow shortly
Source: EU coalition study, Umicore
18
Government interference (I) – Capacity still excessive
 Tackling excess capacity still a main issue in Europe; unlike NA, sales are still well below peak. Pricing improves only when
capacity is tight (NA 2010-13 and Premium 2010-13)
 Capacity to start going up in every region except Europe where utilisation is lagging. Public policy in China, Brazil and Russia
fuelling new excess capacity
Excess (active) capacity in Europe and North America (m units)
Net addition/reduction of capacity 2007-13E vs 2014E-17E (m units)
15.0
13.0
15
11.0
9.0
7.0
5.4
5.0
3.0
1.3
1.2
1.0
-1.0
0.9
0.0
-2.0
-0.8
0.6
-2.6
-3.0
Europe
NA
Russia
2007-2013
Source: IHS Automotive, UBS
estimates
Brazil
China
2014-2017
Source: IHS Automotive, UBS
estimates
19
Government interference (II) – Policy change in China
 Success of the China auto industry marred by the relative failure of local OEMs to be competitive with SOEs mainly sub-contractors of
foreign brands
 Change of ownership structure is the most awaited event of 2014, or 2015? or
– Market approach vs forced change; Forced export targets
– Few OEMs are in a position to completely buy out their JVs
 M&A: domestic and international on the agenda: PSA as an option for Dongfeng
 Export competitiveness at stake. Domestic brands have less than 30% market share. Appreciating Renminbi undermines
competitiveness
20
Captive fincos (I) – Funding and capitalisation
 We estimate 70+% of light vehicles sold in Europe use financing, with a value of €200+bn and 30-40% of
financing is provided by the OEM’s captive finance companies.
 By how much do fincos and falling rates boost the market over "natural" demand
 German OEM funding costs now below 2%. 50+% below French costs but ROA in line to lower given higher risk
from residual value
OEM estimated cost of financing
OEM estimated financing ROA
7.0%
6.0%
6.0%
5.0%
5.0%
4.0%
4.0%
3.0%
3.0%
2.0%
2.0%
1.0%
1.0%
0.0%
2007
PSA
2008
2009
Renault
2010
Daimler
2011
2012
BMW
2013
VW
0.0%
2007
2008
PSA
2009
Renault
2010
2011
Daimler
2012
BMW
2013
VW
Source: Company data, UBS
estimates
21
Captive fincos (II) – Capital requirements and valuation
 Growth in leasing and involvement in car sharing and fleet management fuel finco balance sheet growth rates in
excess of revenue
 Basel III and other capital and liquidity requirements force OEMs to recapitalise fincos, crowding out dividends
 Cross funding of auto (purchasing receivables) and finco (loans) divisions tend to overstate net liquidity and ROE
Growth in German OEMs revenue, finco assets and equity (100 in '95)
Finco ROE
25%
20%
15%
10%
5%
0%
-5%
-10%
2007
2008
PSA
2009
Renault
2010
Daimler
2011
2012
BMW
2013
VW
Source: Company data, UBS
estimates
Source: Company data, UBS
estimates
22
SECTION 5
Valuation
Governance and corporate structures
 Families and governments as core shareholders.
– Accountability can be a positive when difficult decisions are required
– Casual treatment of shareholders (shareholder dilution at Daimler and VW)
 Diversification can undermine multiples
– Conglomerate structures (Daimler, VW)
– Size of non-consolidated operations undermine multiples (Renault-Nissan, VW-China)
24
How car makers generate cash
 Free cash flow from working capital varies substantially across names
 Latin OEMs have negative working capital requirements
Operating working capital as a % of revenue
Operating working capital as a % of revenue
(2007-2012)
BMW
Daimler
VW
Renault
25%
20%
Cash earnings after capex
14,636
11,430
14,020
-558
Change in working capital
2,597
467
9,424
2137
15%
10%
FCF
WC contribution to FCF
17,233
11,897
23,444
1579
15%
4%
40%
135%
5%
0%
Source: Company data, UBS estimates
-5%
-10%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
BMW
Daimler
Peugeot
Source: Company data, UBS estimates
25
Debt/equity EV breakdown
 Sector de-leveraging suggests limited upside potential for share prices without sustained growth
Enterprise value breakdown for European OEMs
Sector aggregate net cash and SXAP index performance
300,000
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
(5,000)
(10,000)
(15,000)
250,000
200,000
(€m)
150,000
100,000
50,000
0
(50,000)
Equity
Net debt / (cash)
Pensions
Source: UBS
estimates
500
450
400
350
300
250
200
150
100
50
0
Aggregate net cash (debt) value (LHS)
SXAP index performance (RHS)
Source: UBS
estimates
26
What are the right multiples?
What are the returns drivers?
 German Premium OEMs: most sensitive to growth as a driver of asset turnover
– Model suggests right multiples in 0.5-0.75x sales and 4-7x EBITDA
 Mass makers: more sensitive to margins than growth
– Model suggests right multiples in 0.05-0.2x sales and 1-3x EBITDA
 Suppliers: more balanced to growth and margins
– Model suggests right multiples in 0.4-2.0x sales and 5-9x EBITDA
where g is growth, T is tax rate, M is EBIT margin and D is depreciation.
ROIC can be split into two main components as shown below:
27
OEMs’ valuation multiples
Price
Rating
Share
target (lcl) Currency
EV/sales (%)
EV/EBITDA (x )
price (lcl)
2014E
2015E
2016E
2014E
2015E
EV/EBIT
P/E (x )
2016E 2014E 2015E 2016E
Div . y ield (%)
2014E
2015E
2016E
2014E
2015E
FCF y ield (%)
OEMs
BMW
Neutral
92
EUR
91.0
48.1
45.1
44.9
3.8
3.4
3.3
5.6
4.9
4.9
11.1
9.8
9.7
3.3
3.6
Daimler
Buy
77
EUR
69.3
52.9
50.3
48.5
5.1
4.1
3.7
7.2
5.6
5.1
10.5
9.4
8.6
3.5
3.8
Fiat
Buy
10
EUR
7.6
33.2
31.6
29.8
3.5
3.0
2.8
11.5
8.8
7.2
nm
7.3
5.0
0.0
0.0
Peugeot
Neutral (CBE)
10
EUR
10.5
11.2
10.8
10.5
3.8
2.6
2.3
11.8
5.4
4.5
70.9
12.8
10.9
0.0
0.0
Renault
Buy
85
EUR
69.9
11.6
10.8
10.4
1.6
1.4
1.3
6.5
3.7
3.1
8.6
6.7
5.6
2.7
3.1
Neutral
190
EUR
195.0
27.5
26.4
25.4
2.8
2.5
2.2
4.6
4.1
3.7
9.9
9.1
7.8
2.2
2.4
Average European OEMs
31
29
28
3.4
2.8
2.6
7.9
5.4
4.8
22.2
9.2
7.9
1.7
1.8
Median European OEMs
30
29
28
3.6
2.8
2.5
6.9
5.1
4.7
10.5
9.2
8.2
2.2
2.4
Volksw agen (pref)
Daihatsu Motor
Not Rated
na
JPY
1,745
46
48
47
4.3
4.2
4.1
6.0
6.4
6.0
8.9
8.9
8.9
3.2
3.3
Honda Motor
Buy
5500
JPY
3,595
114
95
90
5.7
5.0
4.2
9.7
7.8
6.2
13.7
10.7
8.7
2.5
3.5
Mazda Motor
Buy
670
JPY
437
59
54
51
6.6
5.4
4.8
8.9
6.8
5.9
9.6
9.6
9.6
0.2
1.0
Nissan Motor
Neutral
900
JPY
914
97
90
86
3.6
3.3
2.9
6.4
5.6
4.7
9.7
8.7
7.7
3.3
3.4
Suzuki Motor
Neutral
2800
JPY
3,077
47
46
43
4.6
4.2
3.9
7.2
6.8
6.2
16.2
16.2
16.2
0.7
0.9
Toy ota Motor
Buy
8000
JPY
5,624
146
125
122
6.3
5.4
4.8
9.0
7.5
6.5
11.5
10.2
8.8
3.0
3.2
Average Japanese OEMs
85
76
73
5.2
4.6
4.1
8.2
6.9
5.9
11.6
10.7
10.0
2.2
2.5
Median Japanese OEMs
59
54
51
4.6
4.2
4.1
8.1
6.8
6.1
9.7
9.6
8.8
2.5
3.2
BYD
Sell
22.8
CNY
40.6
195
169
147
14.5
13.2
12.0
29.6
26.2
23.1
44.0
38.1
32.5
0.0
0.0
Neutral
13
CNY
12.8
982
796
740
nm
1,215
351
nm
nm
nm
15.7
13.7
12.2
0.8
1.2
Dongfeng Motor
Buy
15
CNY
11.0
13
11
10
4.0
2.3
2.1
11.3
4.7
4.7
8.7
7.4
6.8
1.6
1.6
Geely Automobile
Buy
4.4
CNY
2.9
39
33
25
2.6
2.1
1.7
3.4
2.8
2.2
8.5
7.3
5.8
1.6
1.6
Neutral
34
CNY
30.4
110
92
84
6.0
5.3
4.9
7.2
6.3
5.8
10.8
9.5
8.6
2.7
2.8
Buy
10.5
CNY
7.8
121
112
105
nm
nm
nm
nm
nm
nm
10.9
8.9
7.9
2.1
3.6
Average Chinese OEMs (excl-Brillance)
96
84
74
6.8
5.7
5.2
12.9
10.0
8.9
16.6
14.2
12.3
1.6
1.9
Median Chinnese OEMs (excl-Brillance)
110
92
84
5.0
3.8
3.5
9.2
5.5
5.2
10.8
8.9
7.9
1.6
1.6
Brilliance
Great Wall
Guangzhou
Ford
Buy
18
USD
16.0
31
29
27
4.7
3.2
3.0
8.8
4.5
4.3
11.4
7.3
7.0
3.1
3.5
General Motors
Buy
49
USD
33.6
26
25
24
4.1
2.7
2.5
8.7
4.3
3.8
10.8
6.7
6.1
3.6
3.6
Hy undai Motors
Buy
300000
KRW
230,000
52
49
46
3.9
3.5
3.3
5.5
5.0
4.6
5.5
5.0
4.7
0.8
0.9
Kia Motors Corporation
Buy
70,000
KRW
59,200
13
12
12
1.4
1.3
1.2
2.0
1.8
1.6
6.3
5.7
5.2
1.2
1.4
Maruti Suzuki India
Buy
2,350
INR
2,320
143
126
109
11.7
9.9
8.3
19.6
15.7
12.1
23.6
19.5
15.7
0.4
0.4
Source: Thomson DataStream, UBSe, Bloomberg as of 27 May, 2014
28
Suppliers’ valuation multiples
Price
Rating
target (lcl)
Share
Currency
price (lcl)
EV/sales (%)
2014E
2015E
EV/EBITDA (x )
2016E
2014E
2015E
EV/EBIT
2016E
2014E
2015E
P/E (x )
2016E
Div . y ield (%)
2014E
2015E
2016E
2014E
2015E
Suppliers
Autoliv
Sell
83
USD
103.9
97
93
90
7.8
7.3
6.9
10.6
9.9
9.3
16.4
15.6
14.7
2.1
2.2
Brembo
Neutral
20
EUR
27.5
128
118
112
9.2
8.3
7.7
14.8
13.0
11.8
19.4
18.5
15.5
1.8
2.2
Continental
Neutral
170
EUR
171.5
114
102
95
6.9
6.2
6.0
9.8
8.9
8.5
12.8
11.3
10.7
2.0
2.3
Buy
36
EUR
30.1
35
33
32
6.0
5.0
4.4
10.4
8.6
7.3
21.9
14.4
10.5
1.7
2.0
GKN
Neutral
400
BPN
388.3
112
107
103
8.4
8.0
7.7
11.5
10.9
10.4
13.3
12.8
12.5
2.2
2.3
Rheinmetall
Neutral
55
EUR
48.4
56
52
49
6.1
5.2
4.7
10.7
8.2
7.0
13.3
9.5
8.2
0.8
2.5
Buy
130
EUR
98.2
68
62
58
7.1
6.1
5.6
10.8
9.5
8.7
13.7
11.5
10.7
2.4
2.9
Average European suppliers
87
81
77
7.4
6.6
6.1
11.2
9.9
9.0
15.8
13.4
11.8
1.9
2.3
Median European suppliers
97
93
90
7.1
6.2
6.0
10.7
9.5
8.7
13.7
12.8
10.7
2.0
2.3
Faurecia
Valeo
BorgWarner
Neutral
60
USD
62.2
156
140
125
9.7
8.7
7.8
12.2
10.6
9.4
18.8
16.4
14.3
0.0
0.0
Dana Holding
Neutral
22
USD
21.9
51
48
48
4.6
4.2
4.0
6.8
5.9
5.6
11.5
10.4
9.3
0.9
1.1
Johnson Control
Neutral
47
USD
48.2
79
78
77
9.4
8.0
7.3
12.9
10.5
9.3
15.3
12.5
10.6
1.7
1.8
Lear
Neutral
85
USD
87.9
37
35
34
5.1
4.8
4.5
6.7
6.1
5.8
11.6
9.9
9.1
0.8
0.9
Magna International Inc.
Neutral
101
USD
102.2
60
58
56
5.3
5.0
4.7
6.9
6.4
6.0
12.3
10.4
9.3
1.3
1.5
Buy
107
USD
92.2
55
52
49
6.2
5.4
4.8
10.1
8.2
6.9
30.8
19.4
15.4
0.0
0.0
Neutral
68
USD
70.0
126
115
107
8.5
7.7
7.2
10.9
9.7
9.0
14.1
12.7
11.7
1.4
1.5
Average NA suppliers (ex-BorgWarner)
58
55
53
5.6
5.0
4.6
7.8
6.7
6.1
13.7
10.8
9.3
0.9
Median NA suppliers (ex-BorgWarner)
55
52
49
5.3
5.0
4.7
6.9
6.4
6.0
12.3
10.4
9.3
0.9
Visteon
Delphi Automotiv e
Aisin Seiki
Not Rated
na
JPY
3,660
48
47
44
4.0
3.8
3.5
Denso
Not Rated
na
JPY
4,702
90
86
82
6.2
5.9
NOK
Not Rated
na
JPY
1,764
60
57
55
5.2
4.7
Stanley Electric
Not Rated
na
JPY
2,351
119
110
104
6.6
Toy oda Gosei
Not Rated
na
JPY
1,972
37
36
34
Toy ota Boshoku
Not Rated
na
JPY
1,134
21
21
Toy ota Industries
Not Rated
na
JPY
4,735
107
Average Japanese suppliers
Median Japanese suppliers
Halla Climate Control
Hy undai Mobis
1.0
1.1
7.0
6.4
5.8
11.5
11.5
11.5
2.2
2.6
5.4
9.0
8.5
7.8
13.0
13.0
13.0
2.0
2.3
4.5
11.0
8.6
8.3
14.0
14.0
14.0
1.2
1.3
5.7
5.3
8.8
8.0
7.1
16.2
16.2
16.2
1.3
1.4
3.1
3.1
2.9
5.8
6.1
5.7
9.7
9.7
9.7
2.6
2.8
20
4.0
3.8
3.5
7.6
8.6
7.6
16.6
16.6
16.6
1.6
1.8
103
99
10.9
9.9
9.3
17.2
14.7
13.6
16.2
16.2
16.2
1.6
1.9
69
66
63
5.7
5.3
4.9
9.5
8.7
8.0
13.9
13.9
13.9
1.8
60
57
55
5.2
4.7
4.5
8.8
8.5
7.6
14.0
14.0
14.0
1.6
2.0
1.9
Neutral
46000
KRW
45,500
84
78
72
8.0
7.1
6.4
11.3
9.9
8.9
14.8
13.0
11.6
2.1
2.2
Buy
340000
KRW
289,500
18
16
15
1.8
1.6
1.5
2.1
1.9
1.7
7.5
6.9
6.4
0.7
0.8
Mando Corporation
Neutral
130000
KRW
117,000
55
51
48
5.4
5.0
4.6
9.0
8.2
7.5
8.7
7.7
6.8
0.9
1.2
Weichai Pow er
Neutral
32.5
CNY
17.4
42
38
34
3.0
2.8
2.6
3.8
3.6
3.3
7.6
7.0
6.4
0.9
1.1
Tire m anufacturers
Apollo Ty res
Sell
60
INR
76
35
33
32
3.2
2.9
2.8
4.2
3.9
3.7
5.3
4.5
4.0
0.9
1.1
Hankook tire
Buy
73000
KRW
59,600
133
119
109
6.3
5.6
5.1
9.0
8.0
7.3
9.5
8.4
7.7
0.7
0.7
Nokian
Buy
37
EUR
32
277
254
235
8.5
7.8
7.2
10.8
9.9
9.2
14.7
12.9
11.9
4.6
4.9
Michelin
Buy
96
EUR
90
99
91
86
5.7
4.9
4.6
8.4
7.4
7.0
11.1
9.8
9.1
3.1
3.4
Neutral
12
EUR
12.4
118
110
104
6.5
5.8
5.5
8.8
7.7
7.2
13.4
11.2
10.1
2.6
3.2
Average tire m anufacturers
127
117
109
6.0
5.3
5.0
7.6
6.7
6.3
10.8
9.4
8.6
1.7
1.9
Median tire m anufacturers
118
110
104
6.3
5.6
5.1
8.6
7.5
7.1
11.1
9.8
9.1
0.8
0.9
Pirelli
Source: Thomson DataStream, UBSe, Bloomberg as of 27 May, 2014
29
Section 3
Background data
30
Global sales forecast
Global PC & LCV sales up +5.2% in 2014E and +4.5% in 2015E
Sales, m units)
West Europe
% growth
of which: Germany
% growth
of which: France
% growth
of which: Italy
% growth
of which: Spain
% growth
of which: UK
% growth
RoWE
% growth
East Europe
% growth
of which: Russia
% growth
Europe
% growth
North America
% growth
of which: USA
% growth
South America
% growth
of which: Brazil
% growth
Asia
% growth
of which: Japan
% growth
of which: China
% growth
of which: India
% growth
of which: South Korea
% growth
Other
% growth
ROW
% growth
Total
% growth
2000A 2001A
16.7
16.6
0.4%
-1.5%
3.5
3.6
-1.2%
-10.8%
2.7
2.5
5.5%
1.0%
2.6
2.7
-0.3%
4.8%
1.7
1.7
2.8%
-3.2%
2.7
2.5
10.2%
1.4%
3.4
3.7
-8.5%
1.5%
2.6
3.0
-1.3% -14.5%
1.1
1.0
14.0%
-8.7%
19.2
19.6
-1.8%
-1.5%
19.6
19.7
-0.8%
3.5%
17.1
17.3
-1.2%
2.6%
2.3
2.2
3.0%
17.6%
1.5
1.3
10.1%
11.5%
11.5
11.3
2.1%
-1.1%
5.8
5.9
-1.5%
1.5%
2.1
1.9
11.9%
14.3%
0.7
0.8
-1.9%
6.5%
1.4
1.4
3.8%
10.2%
1.5
1.4
4.4%
-29.9%
3.2
3.0
7.2%
48.0%
55.8
55.8
0.0%
2.8%
2002A 2003A 2004A
16.5
16.0
16.2
2.9%
-1.4%
-2.7%
3.5
3.4
3.4
1.2%
-0.2%
-2.9%
2.4
2.4
2.5
1.3%
-6.3%
-5.1%
2.5
2.5
2.6
0.9%
-4.3%
-2.5%
1.8
1.7
1.6
10.4%
5.2%
-6.8%
2.9
2.9
2.8
0.5%
1.9%
4.3%
3.3
3.2
3.2
5.9%
-2.5%
-4.3%
3.7
3.0
2.6
22.6%
17.6%
0.5%
1.4
1.2
1.1
18.2%
8.5%
-1.8%
20.2
19.0
18.8
6.1%
1.2%
-2.3%
19.5
19.2
19.5
1.6%
-1.5%
-0.5%
16.9
16.6
16.8
1.4%
-1.1%
-1.8%
2.5
2.0
2.1
22.9%
-2.8%
-8.0%
1.5
1.3
1.4
15.3%
-4.7%
-5.4%
14.9
13.9
12.8
7.0%
8.8%
11.2%
5.7
5.7
5.7
0.4%
-0.4%
-0.9%
4.6
4.1
2.9
13.2%
38.5%
41.6%
1.1
0.9
0.8
24.4%
14.6%
7.5%
1.1
1.3
1.6
12.4% -18.7% -17.3%
2.4
2.0
1.8
21.0%
11.7%
15.9%
4.2
3.7
3.4
11.4%
9.6%
6.5%
61.3
58.0
56.6
5.7%
2.4%
1.4%
2005A 2006A
16.7
16.5
1.2%
0.3%
3.7
3.5
4.2%
1.8%
2.4
2.5
-1.9%
2.7%
2.6
2.5
4.0%
-1.3%
1.9
1.9
-0.3%
3.6%
2.7
2.8
-3.5%
-4.6%
3.5
3.4
3.0%
0.4%
4.4
4.0
10.5%
7.8%
1.9
1.6
20.8%
11.5%
21.1
20.5
3.0%
1.6%
19.3
19.7
-1.9%
1.0%
16.6
17.0
-2.3%
0.5%
3.3
2.9
15.7%
14.9%
1.8
1.6
13.2%
6.0%
17.2
16.1
6.8%
8.1%
5.6
5.7
-1.9%
-0.3%
6.7
5.4
24.2%
17.2%
1.5
1.2
21.5%
7.7%
1.2
1.1
2.5%
6.0%
2.3
2.7
11.9% -15.1%
5.2
4.9
7.2%
16.7%
66.2
64.1
3.3%
4.6%
2007A
16.8
0.8%
3.4
-8.0%
2.5
3.5%
2.7
6.9%
1.9
-1.2%
2.7
2.6%
3.6
3.3%
5.4
22.8%
2.6
33.5%
22.3
5.4%
18.9
-2.1%
16.2
-2.5%
4.3
27.6%
2.4
28.3%
18.4
7.1%
5.2
-6.7%
8.0
18.8%
1.7
13.2%
1.2
5.1%
2.3
3.2%
5.6
7.6%
69.5
4.9%
2008A
15.4
-8.7%
3.3
-1.7%
2.5
-0.7%
2.4
-12.8%
1.3
-29.8%
2.4
-11.4%
3.4
-4.8%
5.8
6.3%
3.0
13.7%
21.2
-5.1%
15.9
-15.9%
13.2
-18.0%
4.4
4.3%
2.7
13.1%
18.9
2.3%
5.0
-5.1%
8.6
8.1%
1.7
2.6%
1.2
-3.8%
2.4
2.3%
5.7
0.7%
66.0
-5.0%
2009A 2010A 2011A
14.4
14.5
15.0
-0.3%
-3.6%
-2.3%
3.4
3.1
4.0
9.4%
19.9% -21.5%
2.6
2.7
2.7
-1.3%
-0.3%
6.6%
1.9
2.2
2.4
-9.9%
-8.8%
-0.9%
0.9
1.1
1.1
3.8% -17.0%
-19.9%
2.2
2.3
2.2
-2.3%
3.3%
-10.0%
3.3
3.2
2.7
4.6%
15.1%
-19.3%
4.9
3.9
3.4
23.9%
16.6%
-41.6%
2.7
1.9
1.5
41.2%
29.6%
-50.3%
19.3
18.4
18.4
4.9%
0.1%
-13.1%
15.3
14.0
12.7
9.3%
10.4%
-20.5%
12.8
11.6
10.4
10.3%
11.1%
-21.2%
5.6
5.2
4.3
9.0%
19.2%
-2.6%
3.4
3.3
3.0
2.8%
10.4%
13.0%
30.4
30.1
23.2
1.1%
29.7%
23.1%
4.1
4.9
4.5
7.3% -15.7%
-8.3%
17.6
17.0
12.9
3.6%
31.1%
50.5%
3.0
2.7
2.1
9.6%
32.0%
19.5%
1.5
1.5
1.4
1.2%
7.0%
20.4%
4.2
4.0
2.2
4.8%
79.5%
-7.0%
5.1
5.0
5.3
3.0%
-5.3%
-6.8%
75.7
72.6
63.8
4.3%
13.7%
-3.3%
2012A 2013A
12.7
13.1
-3.1%
-8.8%
3.1
3.3
-5.0%
-3.1%
2.1
2.3
-7.0%
-13.3%
1.4
1.5
-7.0%
-21.7%
0.8
0.8
3.0%
-15.0%
2.5
2.3
9.0%
3.8%
2.8
3.0
-7.0%
-10.2%
4.8
5.1
0.0%
3.6%
2.7
2.9
-7.0%
9.6%
17.6
18.2
-3.4%
-5.7%
18.2
17.2
6.0%
12.4%
15.6
14.5
7.6%
13.5%
5.7
5.8
-2.0%
3.8%
3.5
3.6
-3.5%
6.3%
35.8
33.5
6.8%
10.3%
4.9
5.2
-7.0%
26.9%
21.4
18.6
15.0%
5.7%
2.9
3.3
8.5% -10.0%
1.5
1.5
-1.0%
-2.3%
5.1
4.9
4.0%
19.0%
4.6
4.8
-4.5%
-7.1%
81.9
79.5
3.0%
5.0%
2014E
13.0
2.4%
3.2
1.0%
2.1
-1.0%
1.5
3.0%
0.9
12.0%
2.6
3.0%
2.8
3.0%
5.0
2.9%
2.8
2.0%
18.0
2.5%
18.6
2.0%
16.0
2.6%
5.7
0.0%
3.4
-2.0%
37.9
5.9%
4.7
-3.0%
23.5
10.0%
2.8
-3.0%
1.5
2.5%
5.3
3.0%
5.9
29.5%
86.1
5.2%
2015E
13.6
3.9%
3.3
3.0%
2.2
3.0%
1.5
5.0%
1.0
10.0%
2.7
3.0%
3.0
4.0%
5.1
3.1%
2.9
4.0%
18.7
3.7%
19.0
2.3%
16.2
1.0%
5.9
3.0%
3.5
3.0%
40.2
6.1%
4.8
2.0%
25.2
7.0%
3.2
11.0%
1.6
2.1%
5.5
4.0%
6.2
5.1%
90.0
4.5%
2016E
14.1
3.9%
3.4
3.0%
2.3
5.0%
1.6
5.0%
1.0
5.0%
2.7
3.0%
3.1
4.0%
5.4
4.3%
3.1
6.0%
19.4
4.0%
19.4
2.0%
16.5
2.0%
6.2
5.0%
3.7
4.5%
42.6
5.8%
4.9
2.0%
26.9
6.9%
3.4
8.0%
1.6
2.1%
5.7
4.0%
6.5
4.8%
94.0
4.5%
Source: UBS estimates, Global Insight
31
Global production forecasts
Global PC & LCV production up 4.5% in 2014E and 4.8% in 2015E
(Production, m units)
West Europe
% growth
East Europe
% growth
Europe
% growth
North America
% growth
South America
% growth
Asia
% growth
of which: Japan
% growth
of which: China
% growth
of which: South Korea
% growth
of which: India
% growth
Other
% growth
ROW
% growth
Total
% growth
2000A
16.5
0%
2.9
-5%
19.4
-1%
17.2
1%
2.0
22%
17.1
5%
9.6
-1%
1.9
19%
3.1
9%
0.8
7%
1.8
23%
0.7
4%
56.4
2.3%
2001A
16.6
1%
2.7
-6%
19.3
0%
15.5
-10%
2.1
2%
16.9
-1%
9.3
-3%
2.0
10%
2.9
-5%
0.8
-3%
1.9
0%
0.8
12%
54.6
-3.3%
2002A
16.5
-1%
2.7
-1%
19.1
-1%
16.4
5%
1.9
-8%
18.8
11%
9.8
5%
3.0
45%
3.1
6%
0.8
7%
2.1
14%
0.9
15%
57.1
4.6%
2003A
16.3
-1%
3.1
18%
19.4
1%
15.9
-3%
1.9
0%
20.3
8%
9.7
-1%
4.0
35%
3.1
2%
1.0
25%
2.4
14%
1.1
28%
58.6
2.7%
2004A
16.3
0%
3.9
24%
20.2
4%
15.8
-1%
2.5
31%
21.8
7%
9.9
2%
4.5
12%
3.4
10%
1.3
25%
2.7
13%
1.3
18%
61.6
5.0%
2005A
15.9
-2%
4.3
10%
20.2
0%
15.8
0%
2.8
14%
23.9
9%
10.3
4%
5.2
17%
3.7
6%
1.4
12%
3.2
17%
1.5
15%
64.2
4.2%
2006A
15.6
-2%
5.1
20%
20.7
3%
15.3
-3%
3.1
8%
26.0
9%
10.9
6%
6.7
28%
3.8
4%
1.7
18%
2.9
-10%
1.7
15%
66.8
4.1%
2007A
16.0
2%
6.0
18%
22.0
6%
15.1
-1%
3.6
17%
28.1
8%
11.0
1%
8.1
21%
4.0
6%
2.0
17%
2.9
2%
1.8
3%
70.6
5.6%
2008A
14.4
-10%
6.4
5%
20.8
-6%
12.6
-16%
3.8
5%
28.6
2%
10.9
-1%
8.6
6%
3.8
-6%
2.1
6%
3.1
7%
1.8
0%
67.6
-4.3%
2009A
11.8
-18%
4.7
-26%
16.5
-21%
8.6
-32%
3.7
-2%
28.9
1%
7.6
-30%
12.8
49%
3.5
-8%
2.5
18%
2.6
-18%
1.8
2%
59.5
-11.9%
2010A
13.2
12%
5.8
24%
19.0
15%
11.9
39%
4.2
13%
37.1
28%
9.1
20%
16.8
31%
4.2
22%
3.2
32%
3.7
43%
2.2
19%
74.4
25.0%
2011A
13.7
4%
6.5
11%
20.2
6%
13.1
10%
4.3
3%
37.0
0%
7.9
-13%
17.3
3%
4.6
9%
3.6
11%
3.6
-2%
2.3
4%
76.9
3.3%
2012A
12.6
-8%
6.7
3%
19.3
-4%
15.4
18%
4.3
-1%
40.8
10%
9.4
20%
18.2
6%
4.5
-2%
3.8
6%
4.8
33%
1.7
-25%
81.5
6.0%
2013A
12.4
-2.0%
6.6
-1.5%
18.9
-1.8%
16.1
4.4%
4.6
6.1%
42.5
4.3%
8.7
-8.0%
20.6
13.0%
4.4
-2.1%
3.8
0.0%
5.0
5.0%
1.5
3.5%
83.7
2.6%
2014E
12.6
2.0%
6.8
3.0%
19.4
2.3%
16.8
4.4%
4.4
-4.0%
45.0
5.9%
8.2
-5.0%
23.1
12.0%
4.4
-0.6%
4.0
5.0%
5.3
6.0%
1.8
3.0%
87.5
4.5%
2015E
12.9
2.0%
7.0
3.0%
19.8
2.3%
17.5
3.9%
4.6
5.0%
47.7
5.8%
8.1
-2.0%
25.4
10.0%
4.4
-0.9%
4.3
8.0%
5.5
4.0%
2.1
3.0%
91.6
4.8%
2016E
13.1
2.0%
7.2
3.0%
20.3
2.4%
18.2
4.2%
4.8
5.0%
50.5
6.0%
8.1
0.0%
27.7
8.9%
4.4
0.2%
4.7
8.0%
5.8
4.0%
2.2
3.0%
96.1
4.8%
2017E
13.5
3.0%
7.5
4.0%
21.0
3.4%
18.4
1.0%
5.1
5.0%
53.0
5.0%
8.1
0.0%
29.6
7.0%
4.4
-0.2%
5.0
8.0%
6.0
4.0%
2.3
3.0%
99.8
3.9%
2018E
14.1
4.0%
7.8
4.0%
21.8
4.0%
18.6
1.0%
5.2
3.0%
55.3
4.3%
8.2
2.0%
31.1
5.0%
4.5
3.6%
5.3
5.0%
6.2
4.0%
2.3
3.0%
103.3
3.5%
Source: UBS estimates, Global Insight
32
SECTION 5
Disclosures
Statement of Risk
The automobile sector has in the past exhibited high levels of volatility in terms of profitability and valuation. Sector earnings and
performance are highly sensitive to variations in volume, pricing, raw material costs and currency, all of which have been volatile
recently. Long term structural trends continue to improve as a result of higher demand in EM, early signs of sector concentration
improving and structurally lower currency exposure but near term cyclical drivers have become more challenging after several years of
strong earnings and share price performance. We are also concerned that in a macro recovery rising interest rates would become a
material headwind for the industry.
Analyst Certification
Each research analyst primarily responsible for the content of this research report, in whole or in part, certifies that with respect to each
security or issuer that the analyst covered in this report: (1) all of the views expressed accurately reflect his or her personal views about
those securities or issuers and were prepared in an independent manner, including with respect to UBS, and (2) no part of his or her
compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by that research
analyst in the research report.
34
Required Disclosures
Required Disclosures
This report has been prepared by UBS Limited, an affiliate of UBS AG. UBS AG, its subsidiaries, branches and affiliates are
referred to herein as UBS.
For information on the ways in which UBS manages conflicts and maintains independence of its research product; historical
performance information; and certain additional disclosures concerning UBS research recommendations, please visit
www.ubs.com/disclosures. The figures contained in performance charts refer to the past; past performance is not a reliable
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UBS Investment Research: Global Equity Rating Definitions
UBS 12-M onth
Rating
Buy
Neutral
Sell
UBS Short-Term
Rating
Definition
Coverage1
FSR is > 6% above the MRA.
FSR is between -6% and 6% of the MRA.
FSR is > 6% below the MRA.
47%
42%
11%
Definition
IB
Services2
33%
34%
23%
IB
Coverage3
Services4
Stock price expected to rise within three months from the time the rating was
less than
less than
assigned because of a specific catalyst or event.
1%
1%
Stock price expected to fall within three months from the time the rating was
less than
less than
Sell
assigned because of a specific catalyst or event.
1%
1%
Source: UBS. Rating allocations are as of 31 March 2014.
1:Percentage of companies under coverage globally within the 12-month rating category. 2:Percentage of companies within
the 12-month rating category for which investment banking (IB) services were provided within the past 12 months.
3:Percentage of companies under coverage globally within the Short-Term rating category. 4:Percentage of companies
within the Short-Term rating category for which investment banking (IB) services were provided within the past 12 months.
Buy
KEY DEFINITIONS: Forecast Stock Return (FSR) is defined as expected percentage price appreciation plus gross dividend
yield over the next 12 months. M arket Return Assumption (M RA) is defined as the one-year local market interest rate
plus 5% (a proxy for, and not a forecast of, the equity risk premium). Under Review (UR) Stocks may be flagged as UR
by the analyst, indicating that the stock's price target and/or rating are subject to possible change in the near term, usually
in response to an event that may affect the investment case or valuation. Short-Term Ratings reflect the expected nearterm (up to three months) performance of the stock and do not reflect any change in the fundamental view or investment
case. Equity Price Targets have an investment horizon of 12 months.
35
EXCEPTIONS AND SPECIAL CASES: UK and European Investment Fund ratings and definitions are: Buy: Positive
on factors such as structure, management, performance record, discount; Neutral: Neutral on factors such as structure,
management, performance record, discount; Sell: Negative on factors such as structure, management, performance
record, discount. Core Banding Exceptions (CBE): Exceptions to the standard +/-6% bands may be granted by the
Investment Review Committee (IRC). Factors considered by the IRC include the stock's volatility and the credit spread of the
respective company's debt. As a result, stocks deemed to be very high or low risk may be subject to higher or lower bands
as they relate to the rating. When such exceptions apply, they will be identified in the Company Disclosures table in the
relevant research piece.
Research analysts contributing to this report who are employed by any non-US affiliate of UBS Securities LLC are not
registered/qualified as research analysts with the NASD and NYSE and therefore are not subject to the restrictions contained
in the NASD and NYSE rules on communications with a subject company, public appearances, and trading securities held by
a research analyst account. The name of each affiliate and analyst employed by that affiliate contributing to this report, if
any, follows.
UBS Limited: Philippe Houchois; David Lesne. UBS Securities Japan Co., Ltd.: Kohei Takahashi. UBS Securities LLC:
Colin Langan, CFA.
36
Company Disclosures
Company Name
Reuters
12-month rating
Short-term rating
Price
Price date
ALV
Sell
N/A
US$106.63
02 Jun 2014
BMWG.F
Neutral
N/A
€91.59
02 Jun 2014
Continental AG
CONG.DE
Neutral
N/A
€172.80
02 Jun 2014
Daimler AG5, 13
DAIGn.DE
Buy
N/A
€69.32
02 Jun 2014
EPED.PA
Buy
N/A
€30.85
02 Jun 2014
FIA.MI
Buy
N/A
€7.68
02 Jun 2014
F.N
Buy
N/A
US$16.44
02 Jun 2014
MICP.PA
Buy
N/A
€91.20
02 Jun 2014
7201.T
Neutral
N/A
¥929
03 Jun 2014
NRE1V.HE
Buy
N/A
€30.96
02 Jun 2014
PEUP.PA
Neutral (CBE)
N/A
€10.34
02 Jun 2014
PECI.MI
Neutral
N/A
€12.63
02 Jun 2014
Renault SA
RENA.PA
Buy
N/A
€68.88
02 Jun 2014
Valeo
VLOF.PA
Buy
N/A
€99.94
02 Jun 2014
VOWG_p.DE
Neutral
N/A
€195.65
02 Jun 2014
Autoliv Inc16
BM W 4
Faurecia
Fiat SpA2, 4, 5
Ford M otor Co.6a, 6b, 7, 16
M ichelin
Nissan M otor
Nokian Renkaat Oyj5
Peugeot SA13, 20
Pirelli & C SpA2, 4, 5
Volksw agen Preference5, 14
Source: UBS. All prices as of local market close.
Ratings in this table are the most current published ratings prior to this report. They may be more recent than the stock
pricing date
37
2.
4.
5.
6a.
6b.
7.
13.
14.
16.
20.
UBS AG, its affiliates or subsidiaries has acted as manager/co-manager in the underwriting or placement of
securities of this company/entity or one of its affiliates within the past 12 months.
Within the past 12 months, UBS AG, its affiliates or subsidiaries has received compensation for investment banking
services from this company/entity.
UBS AG, its affiliates or subsidiaries expect to receive or intend to seek compensation for investment banking
services from this company/entity within the next three months.
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UBS Limited acts as broker to this company.
UBS Securities LLC makes a market in the securities and/or ADRs of this company.
Because this security exhibits higher-than-average volatility, the FSR has been set at 15% above the MRA for a Buy
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38
Compendium Disclosure
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UBS Securities LLC, 1285 Avenue of Americas, New York, NY 10019, USA,
Attention: Publishing Administration
39
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40
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