All for One Midmarket AG Germany/ Software & Computer Services Company report Produced by: All ESN research is available on Bloomberg: “ESNR” <go> Distributed by the Members of ESN (see last page of this report) Investment Research 30 September 2008 Buy 3.60 4.80 vs Target price: EUR Share price*: EUR Reuters/Bloomberg ACVG.DE/ACV GY Accounting Standard/Since IFRS/1998 Market capitalisation (EURm) 19.0 No. of shares (m) 5.2 Free float 36.0% Daily avg. no. trad. sh. 12 mth 1.974 Daily avg. trad. vol. 12 mth (m) 0.01 Price high 12 mth (EUR) 5.10 Price low 12 mth (EUR) 3.60 Abs. perf. 1 mth -15.3% Abs. perf. 3 mth -16.1% Abs. perf. 12 mth -29.1% (EUR) 12/07 12/08e 12/09e Sales (m) 78 84 90 EBITDA (m) 4 4 7 EBITDA margin 5.6% 5.4% 8.1% EBIT (m) 1 1 2 EBIT margin 1.3% 1.2% 1.8% Net Profit (adj.)(m) 1 (0) 1 ROCE 2.2% 2.0% 3.3% Net debt/(cash) (m) 6 4 1 Debt Equity 22.4% 14.3% 4.5% Debt/EBITDA 1.4 0.9 0.2 Int. cover(EBITDA/Fin.int) 47.2 16.7 39.8 EV/Sales 0.4 0.2 0.2 EV/EBITDA 6.6 3.7 1.9 EV/EBITDA (adj.) 6.6 3.7 1.9 EV/EBIT 27.8 15.9 8.3 P/E (adj.) 34.7 nm 23.6 P/BV 1.1 0.6 0.6 FCF yield -11.0% 8.8% 15.3% Dividend yield 0.0% 0.0% 0.0% EPS (adj.) 0.15 (0.02) 0.15 BVPS 4.90 5.58 5.73 DPS 0.00 0.00 0.00 vvdsvdvsdy 3.2 3.4 3.6 3.8 4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 Sep 07 Okt 07 Nov 07 Dez 07 Jan 0 8 Feb 08 M rz 08 Apr 08 M ai 0 8 Jun 0 8 Jul 08 Aug 08 Sep 08 ALL FOR ONE M IDMARKET AG Tec Dax (Rebased) Source: Factset Shareholders: BEKO Holding AG 55%; Universal Investm. GmbH 5%; Company 4%; *closing price as of 29/09/2008 All for One Midmarket AG – Focusing on the SAP mid-market We initiate coverage of All for One Midmarket AG (formerly: AC Service AG) with Buy, TP EUR 4.8. Revenue: Benefiting from the strong market share of SAP, we forecast All for One Midmarket AG as a one-stop service provider in the SAP mid-market to grow its topline by 6.8% (CAGR 07-12e). Profitability: Profitability is forecasted to stay relatively flat in 08e at an EBIT margin of 1.2%. Beginning 09e, as strategy implementations should work well, the EBIT margin is expected to rise, reaching 4.6% in 12e. Market: According to BITKOM, the German IT service market is forecasted to grow to EUR 32.8bn (6.6% YoY) in 08e and EUR 34.9bn (6.5% YoY) in 09e, respectively. The European ERP market is expected to show CAGR 06-11e of 10.7% p.a. according to AMR Research. Share price trigger: (1) Successful implementation of full- service strategy for SAP solutions in the mid-market through new management board (2) Margin improvements due to increased recurring revenues from outsourcing services. Company Description All for One Midmarket AG is a full-service IT provider in the SAP environment. Being focused on industry solutions in machinery and equipment manufacturing, automotive supply and project and engineering-service provision, the company offers services in Germany, Austria, Switzerland and Luxembourg. Since the acquisition of All for One in 06, the company orientates business towards SAP. Consulting and software licenses made off 55.5% of revenues in 07. Outsourcing services and maintenance contributed 17.5% and 13.0% of revenues, respectively. Group revenues and EBIT amounted to EUR 78.1m and EUR 1.0m (EBIT margin 1.3%) in 07. Analyst(s): Catherine Schuh +49 69 58 99 74 35 [email protected]Holger Schmidt, CEFA +49 69 58 99 74 32 [email protected]
36
Embed
All for One Midmarket AG · All for One Midmarket AG Page 3 Investment Case All for One Midmarket AG is a full-service IT provider in the SAP environment, being focused on Germany,
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
All for One Midmarket AG
Germany/ Software & Computer Services Company report
Produced by: All ESN research is available on Bloomberg: “ESNR” <go>
Distributed by the Members of ESN (see last page of this report)
Segments 8 Earnings Development 9 Cash Flow Analysis 9 Working Capital 10 Equity & Debt 10 Return on capital employed (ROCE) 11 Return on equity (ROE) 11
ESN Recommendation System .............................................................. 35
All for One Midmarket AG
Page 3
Investment Case
All for One Midmarket AG is a full-service IT provider in the SAP environment, being focused on Germany, Austria and Switzerland. Our topline forecast from 07 to 12e stands at a CAGR of 6.8%. Profitability is expected to improve to an EBIT of EUR 5.0m as well as a margin of 4.6% by 12e. We initiate coverage with Buy, TP EUR 4.8.
Profile: All for One Midmarket AG is a full-service IT provider in the SAP environment.
Since the acquisition of All for One in 06, the company orientates business towards SAP.
Consulting and software licenses accounted for 55.5% of revenues in 07. Outsourcing
services and maintenance contributed 17.5% and 13.0% of revenues, respectively.
Market: According to BITKOM, the German IT service market is forecasted to grow to EUR
32.8bn (6.6% YoY) in 08e and EUR 34.9bn (6.5% YoY) in 09e, respectively. The European
Enterprise Resource Planning (ERP) market is expected to show CAGR 06-11e of 10.7%
according to AMR Research.
Triggers: (1) Successful implementation of full-service strategy for SAP solutions in the
mid-market through new management board (2) Margin improvements due to increased
recurring revenues from outsourcing services.
Financials: We expect All for One Midmarket AG’s sales and earnings to benefit from the
success of SAP mid-market products and outsourcing services. Hence, our revenue
forecast stands at EUR 83.6m in 08e (7.1% YoY) and EUR 108.7m in 12e (CAGR 07-12e of
6.8%). The EBIT is forecasted to steadily improve, reaching EUR 5.0m in 12e, which
translates into an EBIT margin of 4.6%.
Valuation: Based on a DCF model, we derive a target price of EUR 4.8. We do not take the
peer valuation into account as this is of limited indication value due to a still very low
profitability.
At a Glance
Source: Company data, equinet Research
EPS development
-0.60
-0.30
0.00
0.30
0.60
0.90
06 07 08e 09e 10e 11e 12e
EPS (adj.)
EUR mSales & EBIT margin
0
25
50
75
100
125
06 07 08e 09e 10e 11e 12e
EUR m
0.0%
1.1%
2.2%
3.3%
4.4%
5.5%
Sales EBIT margin (rhs)
Shareholder Structure
Universal
Investm.
GmbH
5.0%
BEKO
Holding AG
55.0%
Free float
36.0%
Company
4.0%
Revenue Split 07
Integrated
Solutions
88.7%
Human
Resource
Solutions
11.3%
All for One Midmarket AG
Page 4
Valuation
Putting emphasize on a DCF model valuation, we set our target price (TP) at EUR 4.8. The relevance of a peer group valuation, we reckon, is low due to depressed profitability in the course of the transition to become a one-stop SAP service provider.
DCF valuation
Revenue development: We expect All for One Midmarket AG to achieve a revenue CAGR
07-12e of 6.8%. In 09e, we assume revenues to grow by 7.1% to EUR 89.6m. Due to an
increasing uncertainty concerning the economic development in coming years, we are
forecasting revenues 10e to 12e to grow less dynamically. In 10e, our forecast stands at
EUR 95.7m (6.9% YoY).
Profitability: We expect All for One Midmarket AG to increase its EBIT margin mainly due
to the focussing on its core competence: SAP IT consulting in the mid-market segment and
recurring outsourcing services (data processing services). We forecast an EBIT CAGR 07-
12e of 36.9%. The EBIT margin in 12e is forecasted to stand at 4.6%.
WACC: Taking into account a beta of 1.44, WACC comes to 10.26%. We expect the target
equity ratio to be 100.0%.
Terminal growth: We set the FCF terminal growth at 2%.
Target price: We arrive at a target price of EUR 4.8 from our DCF model.
FV per share based on multiples 1.30 3.22 2.09 3.51 4.98 5.43
FV (mean) 3.42
Sources: *ESN estimates, equinet estimates, Thomson Financial, Company data
All for One Midmarket AG
Page 6
Company Profile & Market Environment
All for One Midmarket AG is a one-stop service provider for SAP services. The company’s product portfolio encompasses SAP consulting, license sales, software maintenance as well as outsourcing. We expect the company to be in a transition state in FY 08 as the implementation of its strategy still requires significant investment spending. Profitability is expected to rise in coming years (CAGR 07-12e: 36.9%) mainly due to increased recurring revenues such as outsourcing services.
Company overview
� History: All for One Midmarket AG has been founded in 1959 as AC Automation Center AG. After having acquired All for One in 06, the company rapidly changed its business model to become a full-service SAP partner. The company thus sold its Human Resource Services, ACCURAT, in May 08 and changed its company name from AC Service to All for One Midmarket AG.
� Segments: Since 1Q 08, All for One Midmarket operates two segments: (1)
Integrated Solutions, including the selling of SAP licenses, industry solutions, systems integration, software maintenance, consulting as well as outsourcing services. (2) Human Resource Solutions, offering full-service for SAP Human Capital Management software including BPO.
� Customer focus: All for One Midmarket focuses its solutions and services on the
machinery industry, automotive suppliers, and the discrete manufacturing industry as well as on project and engineering-services providers. Furthermore, the company clearly focuses on the mid-market.
� Industry solutions: All for One Midmarket offers several industry solutions for mid-
market companies. These are e.g. All for Automotive, All for Electric, All for Machine, All for Metal, All for Plastics, All for Service as well as All for Foundry.
� Country sales: Sales are dominated by Germany (66% of overall revenues in FY
07) as well as Switzerland (21%). Austria contributed 4% of revenues.
� Strategy: The new management board (Lars Landwehrkamp, CEO, and Stefan Land, CFO) implemented the strategy to become a one-stop SAP service provider with an expanding share of recurring revenues in 06.
� Major shareholder: All for One Midmarket is a subsidiary of BEKO Holding AG,
which currently owns 55% of the company.
Revenue 2006
Integrated
solutions
87%
Human
Resource
Solutions
13%
Revenue 2007
Human
Resource
Solutions
11%
Integrated
solutions
89%
Source: Company data, equinet Research Source: Company data, equinet Research
All for One Midmarket AG
Page 7
Market environment
German IT service market: Achieving 40% of overall revenues in IT consulting &
professional services as well as 66% of revenues in Germany, we expect the German IT-
service market to be the single most relevant market of All for One Midmarket.
� Volume / Growth: According to BITKOM, the market had a volume of EUR 28.5bn in
06 and EUR 30.8bn in 07. The German IT service market is forecasted to grow to EUR
32.8bn (6.6% YoY) in 08e and EUR 34.9bn (6.5% YoY) in 09e, respectively.
German software market: As the selling of SAP software licenses, self-developed industry
solutions and software maintenance, moreover contributed 29% of group revenues, the
German software market should be a relevant market for All for One Midmarket AG, too.
� Volume / Growth: The German software market is stated to have a volume of EUR
13.3bn in 06 and EUR 14.0bn in 07. The overall German software market is estimated
to grow by 5.3% to EUR 14.7bn as well as EUR 15.4m (+5.0%) in 09e, according to
BITKOM.
Global Enterprise Resource Planning (ERP) and ERP small-medium size market (SMB): The ERP market should be the most relevant portion of the targeted software
market, which is dominated by SAP (market share of 32%, Gartner), followed by Oracle
(10%) and Sage (9%). The SMB SAP market, which All for One Midmarket targets, is
furthermore led by SAP (23%), being closely followed by Oracle (21%) as well as Intuit
(20%) according to Forrester Research.
� Volume: The overall ERP market as estimated by AMR Research had a volume of
USD 32.3bn globally as well as a volume of USD 12.5bn in Europe in 07. Europe
represents the second largest ERP market behind North America.
� Growth by geographic region: The global market is expected to grow by 10.6%
(CAGR 06-11e). The European market is forecasted to show CAGR of 10.7% as the
market is relatively mature compared to the Latin American and Asia-Pacific market,
which grow by 21.1% and 13.4% p.a., respectively. The North American market is
forecasted to increase by 8.7% (CAGR 06-12e).
� Growth by application segment: The global ERP market concerning Enterprise
Management is forecasted by AMR to increase by CAGR 06-12e of 9.6%, reaching
USD 24.2bn in 12e from USD 17.2bn in 07. The moreover by All for One Midmarket AG
targeted Human Capital Management market is expected to grow by 12.7% p.a. from
USD 4.8bn in 07 to USD 7.6bn in 12e.
� Growth by revenue type: Software licenses are globally forecasted by AMR Research
to grow 10.0% p.a. from 06 to 12e, reaching a level of USD 14.9bn in 12e. Software
maintenance revenues are expected to reach USD 16.9bn, growing by 10.3% (CAGR
06-12e).
Global ERP application revenue estimate by application segment, 2006-2011
Sourcing and Procurement 951 839 967 1104 1301 1431 8.5%
Total 28820 32279 35829 39412 43353 47689 10.6%
*2006 - 2011e Source: AMR Research, equinet Research
All for One Midmarket AG
Page 8
Financials
Segments
Since the divestment of ACCURAT as of 2Q 08, All for One Midmarket AG changed its segment structure, now reporting Integrated Solutions as well as Human Resource
Solutions. We forecast a sales CAGR for Integrated Solutions of 6.9% (07-12e) as well as a CAGR of 6.7% for Human Resource Solutions.
� Integrated Solutions: We expect the Integrated Solutions segment, which includes the
selling of SAP licenses, industry solutions, systems integration, software maintenance,
consulting as well as outsourcing services, to be slightly ahead of HR Solutions in terms
of revenue growth. Our sales CAGR 07-12e stands at 6.9%. The segment contributes
89% of overall revenues.
� Human Resource Solutions: The Human Resource Solutions segment, offering full-
service for SAP Human Capital Management software, is expected to increase its
revenues by 6.7% (CAGR 07-12e). The segment contributes roughly 11% of overall
group sales.
� Economic resilience: We expect the HR Solutions segment to be less contingent on
an economic downturn, mainly driven by demand from legal requirements as well as the
higher diversification as the segment does not focus on special industries. The
Integrated Solutions segment is highly specified on the machinery and discrete
manufacturing industry, automotive suppliers as well as project and engineering-service
providers.
� Profitability: In the long-term, we forecast the group EBIT margin to come in at 4.6% in
12e, which we forecast to be mainly supported by the expanding share of recurring
outsourcing service revenues in the Integrated Solutions segment (EBIT CAGR 07-12e:
* Target price in CHF Source: equinet Recommendations
Recommendation history for ALL FOR ONE MIDMARKET AG (DE) EUR 3.60
Date Recommendation Price at change date Target Price at change date
30. Sep 08 Buy 3.60 4.80
All for One Midmarket AG
Page 32
Notes
All for One Midmarket AG
Page 33
Notice according to § 34 b (German) Securities Trading Act (“Wertpapierhandelsgesetz”) This document is issued by equinet AG (“equinet”). It has been prepared by its authors independently of the Company, and none of equinet, the Company or its shareholders has independently verified any of the information given in this document. equinet possesses relations to the covered companies as detailed in the table on the previous page. Additional information and disclosures will be made available upon request and/or can be looked up on our website http://www.equinet-ag.de 1 - equinet and/or its affiliate(s) hold(s) more than 5% of the share capital of this company calculated under computational methods required by German law. 2 - equinet acts as a designated sponsor for this company, including the provision of bid and ask offers. Therefore, we regularly possess shares of the company in our proprietary trading books. equinet receives a commission from the company for the provision of the designated sponsor services. 3 – The designated sponsor services include a contractually agreed provision of research services. 4 – Within the last twelve months, equinet was involved as a lead or co-lead manager in the public offering of securities which are/whose issuer is the subject of this report. 5 – Within the last twelve months, equinet and/or its affiliate(s) provided investment banking- and/or other consultancy services for this company and/or it’s shareholders. 6 - equinet and/or its affiliate(s) has/have other substantial financial interests in relation to this issuer. 7 – equinet has entered into an agreement with this company about the preparation of research reports and – in return - receives a compensation. Companies of the equinet group and/or its directors, officers and employees or clients may take positions in, and may make purchases and/or sales as principal or agent in the securities or related financial instruments discussed in our reports. The equinet group may provide investment banking and other services to and/or serve as directors of the companies referred to in our reports. In compliance with Para 5 Sec. 4 of the Ordinance on the Analysis of Financial Instruments (FinAnV) equinet has realized additional internal and organizational measures, such as specific research guidelines, to prevent or manage conflicts of interest. Neither the company nor its employees are allowed to receive donations from third parties with a special interest in the content of the analysis. The salary of the research analysts of equinet AG does not depend on the investment banking transactions of the company. Nevertheless, this does not rule out the payment of a bonus which depends on the overall financial performance of the bank. Particular care is taken that the individual performance of each research analyst of equinet AG is not being assessed by a manager of another business division with similar or same interests. To assure a highest degree of transparency equinet AG regularly provides - on a quarterly basis – a summary according to Para 5 Sec. 4 No. 3 of the Ordinance on the Analysis of Financial Instruments (FinAnV). It informs about the overall analysts recommendations and sets them in a relationship to those companies, for which equinet provided investment banking services within the last twelve months. This summary is published via our website http://www.equinet-ag.de. Furthermore, we refer to our conflict of interest policy as well as the German Securities Trading Act (WpHG) and the Ordinance on the Analysis of Financial Instruments (FinAnV) provided in the download area of our website http://www.equinet-ag.de.
Remarks
Recommendation System Buy - The stock is expected to generate a total return of over 15% during the next 6 months time horizon. Accumulate - The stock is expected to generate a total return of 5% to15% during the next 6 months time horizon. Hold - The stock is expected to generate a total return of 0% to 5% during the next 6 months time horizon Reduce - The stock is expected to generate a total return of 0 to -15% during the next 6 months time horizon Sell - The stock is expected to generate a total return below -15% during the next 6 months time horizon Basis of Valuation Equinet uses for valuation purposes primarily DCF-Valuations and Sum-Of-The-Parts-Valuations as well as peer group comparisons. Share prices Share prices in this analysis are the German closing prices of the last trading day before the publication. Sources equinet has made any effort to carefully research all information contained in the analysis. The information on which the analysis is based has been obtained from sources which we believe to be reliable such as, for example, Reuters, Bloomberg and the relevant press as well as the company which is the subject of the analysis. Only that part of the research note is made available to the issuer, who is the subject of the analysis, which is necessary to properly reconcile with the facts. Should this result in considerable changes a reference is made in the research note. Actualizations Opinions expressed in this analysis are our current opinions as of the issuing date indicated on this document. We do not commit ourselves in advance to whether and in which intervals updates are made.
All for One Midmarket AG
Page 34
DISCLAIMER
THE PREPARATION OF THIS DOCUMENT IS SUBJECT TO REGULATION BY GERMAN LAW. THIS DOCUMENT IS BEING SUPPLIED TO YOU SOLELY IN YOUR CAPACITY AS A PROFESSIONAL INSTITUTIONAL INVESTOR FOR YOUR INFORMATION AND MAY NOT BE REPRODUCED OR PASSED ON, DIRECTLY OR INDIRECTLY, TO ANY OTHER PERSON OR PUBLISHED, IN WHOLE OR IN PART, FOR ANY PURPOSE. NEITHER THIS DOCUMENT NOR ANY COPY OF IT MAY BE TAKEN OR TRANSMITTED INTO AUSTRALIA, CANADA OR JAPAN OR DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN AUSTRALIA, CANADA OR JAPAN OR TO ANY RESIDENT THEREOF. THE DELIVERY OF THIS RESEARCH REPORT TO U.S. PERSONS IN THE UNITED STATES OF AMERICA IS MADE BY AND UNDER THE RESPONSIBILITY OF ESN NA, INC. (REGISTERED WITH THE SEC). THIS RESEARCH REPORT IS ONLY INTENDED FOR PERSONS WHO QUALIFY AS MAJOR U.S. INSTITUTIONAL INVESTORS, AS DEFINED IN SECURITIES EXCHANGE ACT RULE 15A-6, AND DEAL WITH ESN NA, INC. HOWEVER, THE DELIVERY OF THIS RESEARCH REPORT OR SUMMARY TO ANY U.S. PERSON SHALL NOT BE DEEMED A RECOMMENDATION OF ESN NA, INC. TO EFFECT ANY TRANSACTIONS IN THE SECURITIES DISCUSSED HEREIN OR AN ENDORSEMENT OF ANYOPINION EXPRESSED HEREIN. ESN NA, INC. MAY FURNISH UPON REQUEST ALL INVESTMENT INFORMATION AVAILABLE TO IT SUPPORTING ANY RECOMMENDATIONS MADE IN THIS RESEARCH REPORT. ALL TRADES WITH U.S. RECIPIENTS OF THIS RESEARCH SHALL BE EXECUTED THROUGH ESN NA, INC. THIS DOCUMENT IS FOR DISTRIBUTION IN THE U.K. ONLY TO PERSONS WHO HAVE PROFESSSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”) OR (ii) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) OF THE ORDER, NAMELY HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS ETC (ALL SUCH PERSONS TOGETHER BEING REFERRED TO AS “RELEVANT PERSONS”). THIS DOCUMENT MUST NOT BE ACTED ON OR RELIED UPON BY PERSONS WHO ARE NOT RELEVANT PERSONS. ANY INVESTMENT OR INVESTMENT ACTIVITY TO WHICH THIS DOCUMENT RELATES IS AVAILABLE ONLY TO RELEVANT PERSONS AND WILL BE ENGAGED IN ONLY WITH RELEVANT PERSONS. THE DISTRIBUTION OF THIS DOCUMENT IN OTHER JURISDICTIONS OR TO RESIDENTS OF OTHER JURISDICTIONS MAY ALSO BE RESTRICTED BY LAW, AND PERSONS INTO WHOSE POSSESSION THIS DOCUMENT COMES SHOULD INFORM THEMSELVES ABOUT, AND OBSERVE, ANY SUCH RESTRICTIONS. BY ACCEPTING THIS REPORT YOU AGREE TO BE BOUND BY THE FOREGOING INSTRUCTIONS. YOU SHALL INDEMNIFY EQUINET AGAINST ANY DAMAGES, CLAIMS, LOSSES, AND DETRIMENTS RESULTING FROM OR IN CONNECTION WITH THE UNAUTHORIZED USE OF THIS DOCUMENT. This report is for informational purposes only and has no regard to the specific investment objectives, financial situation or particular needs of any specific recipient. This publication is intended to provide information to assist institutional investors in making their own investment decisions, not to provide investment advice to any specific investor. Therefore, investments discussed and recommendations made herein may not be suitable for all investors: readers must exercise their own inde-pendent judgment as to the suitability of such investments and recommendations in the light of their own investment objectives, experience, taxation status and financial position. The information herein is believed by equinet to be reliable and has been obtained from sources believed to be reliable, but equinet makes no representation as to the accuracy or completeness of such information. The information given in this report is subject to change without notice; it may be incomplete or condensed and it may not contain all material information concerning the Company. Opinions expressed herein may differ or be contrary to opinions expressed by other business areas of the equinet group as a result of using different assumptions and criteria. equinet is under no obligation to update or keep the information current. equinet provides data concerning the future development of securities in the context of its usual research activity. However, if a financial instrument is denominated in a currency other than an investor’s currency, a change in exchange rates may adversely affect the price or value of, or the income derived from, the financial instrument, and such investor effectively assumes currency risk. In addition, income from an investment may fluctuate and the price or value of financial instruments de-scribed in this report, either directly or indirectly, may rise or fall. Furthermore, past performance is not necessarily indicative of future results. Neither the author nor equinet accepts any liability whatsoever for any loss howsoever arising from any use of this publication or its contents or otherwise arising in connection herewith, except as provided for under applicable regulations. equinet shall only be liable for any damages intentionally caused or which result from any gross negligence of equinet. Further equinet shall be liable for the breach of a material obligation of equinet, however, limited to the amount of the typical foreseeable which shall in no event exceed the amount of EUR 10,000. German law shall be applicable and court of jurisdiction for all disputes shall be Frankfurt/Main (Germany). Competent Supervisory Authority: Bundesanstalt für Finanzdienstleistungsaufsicht -BaFin- (Federal Financial Supervisory Authority) Graurheindorfer Straße 108, 53117 Bonn and Lurgialle 12, 60439 Frankfurt am Main.
All for One Midmarket AG
Page 35
ESN Recommendation System The ESN Recommendation System is Absolute. It means that each stock is rated on the
basis of a total return, measured by the upside potential (including dividends and capital
reimbursement) over a 12 month time horizon.
The ESN spectrum of recommendations (or ratings) for each stock comprises 5 categories:
Buy, Accumulate (or Add), Hold, Reduce and Sell (in short: B, A, H, R, S).
Furthermore, in specific cases and for a limited period of time, the analysts are allowed to rate
the stocks as Rating Suspended (RS) or Not Rated (NR), as explained below.
Meaning of each recommendation or rating:
• Buy: the stock is expected to generate total return of over 20% during the next 12 months time horizon
• Accumulate: the stock is expected to generate total return of 10% to 20% during the next 12 months time horizon
• Hold: the stock is expected to generate total return of 0% to 10% during the next 12 months time horizon.
• Reduce: the stock is expected to generate total return of 0% to -10% during the next 12 months time horizon
• Sell: the stock is expected to generate total return under -10% during the next 12 months time horizon
• Rating Suspended: the rating is suspended due to a capital operation (take-over bid, SPO, …) where the issuer of the document (a partner of ESN) or a related party of the issuer is or could be involved or to a change of analyst covering the stock
• Not Rated: there is no rating for a company being floated (IPO) by the issuer of the document (a partner of ESN) or a related party of the issuer
equinet Ratings Breakdown
History of ESN Recommendation System
Since 18 October 2004, the Members of ESN are using an Absolute Recommendation System (before was a Relative Rec. System) to rate any single stock under coverage.
Since 4 August 2008, the ESN Rec. System has been amended as follow.
• Time horizon changed to 12 months (it was 6 months)
• Recommendations Total Return Range changed as below:
BEFORE
-15% 0% 5% 15%
SELL REDUCE HOLD ACCUMULATE BUY
TODAY
-10% 0% 10% 20%
SELL REDUCE HOLD ACCUMULATE BUY
BEFORE
-15% 0% 5% 15%
SELL REDUCE HOLD ACCUMULATE BUY
BEFORE
-15% 0% 5% 15%
SELL REDUCE HOLD ACCUMULATE BUY
TODAY
-10% 0% 10% 20%
SELL REDUCE HOLD ACCUMULATE BUY
TODAY
-10% 0% 10% 20%
SELL REDUCE HOLD ACCUMULATE BUY
Disclaimer: These reports have been prepared and issued by the Members of European Securities Network LLP (‘ESN’). ESN, its Members and their affiliates (and any director, officer or employee thereof), are neither liable for the proper and complete transmission of these reports nor for any delay in their receipt. Any unauthorised use, disclosure, copying, distribution, or taking of any action in reliance on these reports is strictly prohibited. The views and expressions in the reports are expressions of opinion and are given in good faith, but are subject to change without notice. These reports may not be reproduced in whole or in part or passed to third parties without permission. The information herein was obtained from various sources. ESN, its Members and their affiliates (and any director, officer or employee thereof) do not guarantee their accuracy or completeness, and neither ESN, nor its Members, nor its Members’ affiliates (nor any director, officer or employee thereof) shall be liable in respect of any errors or omissions or for any losses or consequential losses arising from such errors or omissions. Neither the information contained in these reports nor any opinion expressed constitutes an offer, or an invitation to make an offer, to buy or sell any securities or any options, futures or other derivatives related to such securities (‘related investments’). These reports are prepared for the clients of the Members of ESN only. They do not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive any of these reports. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed or recommended in these reports and should understand that statements regarding future prospects may not be realised. Investors should note that income from such securities, if any, may fluctuate and that each security’s price or value may rise or fall. Accordingly, investors may receive back less than originally invested. Past performance is not necessarily a guide to future performance. Foreign currency rates of exchange may adversely affect the value, price or income of any security or related investment mentioned in these reports. In addition, investors in securities such as ADRs, whose value are influenced by the currency of the underlying security, effectively assume currency risk. ESN, its Members and their affiliates may submit a pre-publication draft (without mentioning neither the recommendation nor the target price/fair value) of its reports for review to the Investor Relations Department of the issuer forming the subject of the report, solely for the purpose of correcting any inadvertent material inaccuracies. Like all members employees, analysts receive compensation that is impacted by overall firm profitability For further details about the specific risks of the company and about the valuation methods used to determine the price targets included in this report/note, please refer to the latest relevant published research on single stock. Research is available through your sales representative. ESN will provide periodic updates on companies or sectors based on company-specific developments or announcements, market conditions or any other publicly available information. Unless agreed in writing with an ESN Member, this research is intended solely for internal use by the recipient. Neither this document nor any copy of it may be taken or transmitted into Australia, Canada or Japan or distributed, directly or indirectly, in Australia, Canada or Japan or to any resident thereof. This document is for distribution in the U.K. Only to persons who have professional experience in matters relating to investments and fall within article 19(5) of the financial services and markets act 2000 (financial promotion) order 2005 (the “order”) or (ii) are persons falling within article 49(2)(a) to (d) of the order, namely high net worth companies, unincorporated associations etc (all such persons together being referred to as “relevant persons”). This document must not be acted on or relied upon by persons who are not relevant persons. Any investment or investment activity to which this document relates is available only to relevant persons and will be engaged in only with relevant persons. The distribution of this document in other jurisdictions or to residents of other jurisdictions may also be restricted by law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions. By accepting this report you agree to be bound by the foregoing instructions. You shall indemnify ESN, its Members and their affiliates (and any director, officer or employee thereof) against any damages, claims, losses, and detriments resulting from or in connection with the unauthorized use of this document. For additional information and individual disclaimer please refer to www.esnpartnership.eu and to each ESN Member websites:: www.bancaakros.it www.caixabi.pt www.cajamadrid.es www.cmcics.com www.danskeequities.com www.degroof.be www.equinet-ag.de www.ibg.gr www.ncb.ie www.snssecurities.nl