Swiss Equities Conference Presentations – 14 January

09:20 - 10:00 (CET) Givaudan SFS Group VZ Holding Gilles Andrier (CEO) Jens Breu (CEO) Matthias Reinhart (CEO)

10:00 (CET) Break

10:20 - 11:00 (CET) Clariant Sulzer HBM Healthcare Investments AG Stephan Lynen (CFO) Greg Poux-Guillaume (CEO) Erwin Troxler (CFO)

11:10 - 11:50 (CET) Galenica Bossard ORIOR Felix Burkhard (CFO) Dr. Daniel Bossard (CEO), Andreas Lindner (CFO) Stephan Zehnder (Group CFO)

12:00 - 12:40 (CET) Sika Credit Suisse Idorsia Adrian Widmer (CFO) André Helfenstein Andrew C. Weiss (CEO of Swiss Universal Bank), (Member of Leadership Team/Head Antoine Boublil of IR & CC) (CFO of Swiss Universal Bank)

12:40 (CET) Break

13:40 - 14:20 (CET) VAT Group Landis+Gyr Swiss Prime Site Mike Allison (CEO), Werner Lieberherr (CEO) René Zahnd (CEO) Stephan Bergamin (CFO)

14:30 - 15:10 (CET) Geberit ALSO Holding PSP Swiss Property Christian Buhl (CEO) Prof. Dr. Ing. Gustavo Möller-Hergt (CEO), Giacomo Balzarini (CEO), Dr. Ralf Retzko (CFO) Vasco Cecchini (CCO & Head of IR)

15:10 (CET) Break

15:30 - 16:10 (CET) LafargeHolcim Dufry Allreal-Gruppe Jan Jenisch (CEO) Yves Gerster (CFO) Roger Herzog (CEO), Thomas Wapp (CFO)

16:20 - 17:00 (CET) SIG Combibloc Group Cembra Money Bank Mobimo Samuel Sigrist (CEO), Robert Oudmayer (CEO), Daniel Ducrey (CEO), Frank Herzog (CFO) Pascal Perritaz (CFO) Stefan Hilber (CFO)

17:10 - 17:50 (CET) Adecco Group Schweiter Technologies Hiag Immobilien Coram Williams (CFO) Dr. Heinz O. Baumgartner (CEO) Marco Feusi (CEO),

17:50 (CET) End

ONE-ON-ONE MEETINGS ONLY . Zurich Insurance Group Ltd. . Swissquote Gianni Vitale (IR), Samuel Han (IR) Yvan Cardenas (CFO) . Vontobel . SENSIRION Thomas Heinzl (CFO) Dr. Andrea Wüest (Director IR and M&A) . BB Biotech . Metall Zug Maria-Grazia Iten-Alderuccio (IR), Dr. Silvia Siegfried-Schanz (IR) Daniel Keist (CFO), Martin Wipfli (VRP) . OC Oerlikon Philipp Müller (CFO

Important Disclosures: Please follow the hyperlink embedded in this document’s Disclaimer and read 1 the information contained in Sections A-F, as well as country specific information contained in Section G. Baader Europe Adecco Human Resources / Switzerland New strategy brings in new structure

Reduce Upside: -12.3% Our investment view Target Price (6 months) CHF 52.6 Share Price CHF 60.0 With its new Future@Work strategy Adecco repositions itself as a brand-driven Market Cap. CHFM 9,728 entity and aims to leverage the human touch to drive digitalisation, which it Price Momentum STRONG considers as the key to driving growth in a fragmented market. Adecco is a global Extremes 12Months 29.6 60.0 leader in the employment services industry with a market share of more than 5%. Fundamental Strength 2 /10 Its key service offerings, through 10 different brands include office and industrial Bloomberg ADEN SW Equity staffing, professional staffing, and talent development & career transition. Reuters ADEN.S However, the employment services (global HR) market is fragmented, thus, breeding competition. Moreover, the market is tightly regulated in most major countries and is heavily driven by the state of the economy (GDP). These factors, combined with the fact that networks with digital moats such as LinkedIn and Xing are part of the competition, make digitalisation a key driver for Adecco to focus and capitalise upon and with its Future@Work strategy it aims to do just that. Under this new strategy the group intends to ride the structural trends (hybrid working, upskilling, reskilling, etc.) with its economies of scale, to drive differentiation and improve its cost structure by pushing forward already proven products. Moreover, the group, in FY21, will reorient itself from a geography- driven model to a brand-driven model with a unique strategy for each of the three brands (Adecco, Talent Solutions and Modis) to achieve the brand-specific goals Analyst : Kulwinder RAJPAL set out at its CMD that took place a month ago. Equity Sales What to ask the management? [email protected] Frankfurt +49 69 1388 1357 - Geographically, France and North America, your two biggest markets, have London +44 20 7054 7100 Munich +49 89 5150 1850 shown below market growth in the recent past. What is your strategy to achieve at Zurich +41 43 388 9200 least market level organic growth in these regions? And what could be the timeline New York +1 212 935 5150 for this to materialise? PERF 1w 1m 3m 12m - Under the new Future@Work strategy, Modis aims to carve out a niche for itself. Adecco 1.45% 8.18% 19.1% 4.77% What steps do you consider to be absolutely necessary to do so? Support Services 1.82% 6.46% 5.97% 10.3% - Given that the balance sheet and liquidity position remain strong, will the share STOXX 600 1.54% 3.45% 11.1% -2.45% buy-back programme be launched in H1 FY21 or is it too optimistic to assume so? Sector Opinion Underweight - Could we see some opportunistic acquisitions in FY21? If yes, do you think Strongest upside Securitas these acquisitions are likely to be done in Talent Solutions in line with your Worst potential Adecco ambition to create an end-to-end offering?

- In the context of the current macro-economic environment and the emergence of Last updated: 25/11/2020 12/19A 12/20E 12/21E 12/22E hybrid working, how has the correlation of the former to Adecco’s business Adjusted P/E (x) 10.6 27.3 17.0 14.8 generation shifted? Dividend yield (%) 4.08 4.64 3.70 3.70

EV/EBITDA(R) (x) 8.93 15.4 12.2 10.6

Adjusted EPS (€) 4.60 1.64 3.26 3.75

Growth in EPS (%) 4.36 -64.4 99.3 14.9

Dividend (CHF) 2.22 2.22 2.22 2.22

Sales (€M) 23,427 18,498 20,718 21,339

EBITA margin (%) 4.22 2.39 3.66 4.08

Attributable net profit (€M) 727 264 525 604

ROE (after tax) (%) 19.3 6.41 12.3 13.6

Gearing (%) 24.8 19.4 20.2 18.2 Sales by Geography Valuation Summary

Benchmarks Value Weight Largest comparables

DCF CHF 49.4 35% Bureau Veritas NAV/SOTP per share CHF 48.4 20% Randstad Holding EV/Ebitda CHF 50.2 20% Securitas P/E CHF 69.1 10% Dividend Yield CHF 53.8 10% P/Book CHF 66.7 5% TARGET PRICE CHF 52.6 100%

Consolidated P&L Accounts 12/19A 12/20E 12/21E Balance Sheet 12/19A 12/20E 12/21E Sales €M 23,427 18,498 20,718 Goodwill €M 2,846 2,846 2,846 Change in sales % -1.84 -21.0 12.0 Total intangible €M 3,178 3,176 3,174 Change in staff costs % 2.60 -1.53 -0.78 Tangible fixed assets €M 318 305 300 EBITDA €M 1,159 623 947 Financial fixed assets €M 83.0 85.0 87.0 EBITDA(R) margin % 4.95 3.37 4.57 WCR €M 3,481 3,365 3,500 Depreciation €M -107 -115 -123 Other assets €M 617 620 625 Underlying operating profit €M 988 443 759 Total assets (net of short term liab.) €M 8,391 8,181 8,336 Operating profit (EBIT) €M 1,108 393 759 Ordinary shareholders' equity €M 3,940 4,286 4,244 Net financial expense €M -32.0 -28.0 -28.0 Quasi Equity & Preferred €M of which related to pensions €M 4.74 4.96 Minority interests €M 8.00 8.00 8.00 Exceptional items & other €M Provisions for pensions €M 0.00 -32.3 -23.2 Corporate tax €M -348 -100 -205 Other provisions for risks and liabilities €M 1,921 1,800 1,950 Equity associates €M Total provisions for risks and liabilities €M 1,921 1,768 1,927 Minority interests €M -1.00 -1.00 -1.00 Tax liabilities €M 45.0 40.0 38.0 Adjusted attributable net profit €M 747 264 525 Other liabilities €M 1,647 1,250 1,230 NOPAT €M 692 307 528 Net debt (cash) €M 830 829 889 Cashflow Statement Total liab. and shareholders' equity €M 8,391 8,181 8,336

EBITDA €M 1,159 623 947 Capital Employed Change in WCR €M 146 116 -135 Capital employed after depreciation €M 7,492 7,331 7,486 Actual div. received from equity holdi... €M 0.00 0.00 0.00 Profits & Risks Ratios Paid taxes €M -256 -100 -205 ROE (after tax) % 19.3 6.41 12.3 Exceptional items €M ROCE % 9.23 4.18 7.05 Other operating cash flows €M -169 -150 -130 Gearing (at book value) % 24.8 19.4 20.2 Total operating cash flows €M 880 489 477 Adj. Net debt/EBITDA(R) x 1.09 1.97 1.39 Capital expenditure €M -156 -130 -135 Interest cover (x) x 30.9 13.5 23.0 Total investment flows €M 324 -150 -150 Valuation Ratios Net interest expense €M -32.0 -28.0 -28.0 Dividends (parent company) €M -360 -360 -360 Reference P/E (benchmark) x 10.6 27.3 17.0 Dividends to minorities interests €M 0.00 0.00 0.00 Free cash flow yield % 8.80 4.60 3.53 New shareholders' equity €M -87.0 0.00 -50.0 P/Book x 2.00 1.68 2.10 Total financial flows €M -525 -957 -92.0 Dividend yield % 4.08 4.64 3.70 Change in cash position €M 697 -607 246 EV Calculation

Free cash flow (pre div.) €M 692 331 314 Market cap €M 7,864 7,190 8,910 Per Share Data + Provisions €M 1,921 1,768 1,927

No. of shares net of treas. stock (year... Mio 161 161 161 + Unrecognised acturial losses/(gains) €M 0.00 0.00 0.00 Number of diluted shares (average) Mio 162 161 161 + Net debt at year end €M 398 429 464 Benchmark EPS € 4.60 1.64 3.26 + Leases debt equivalent €M 432 400 425 Restated NAV per share € - Financial fixed assets (fair value) €M 282 230 225 Net dividend per share CHF 2.22 2.22 2.22 + Minority interests (fair value) €M 22.0 22.0 22.0 = EV €M 10,355 9,579 11,523 EV/EBITDA(R) x 8.93 15.4 12.2 EV/Sales x 0.44 0.52 0.56

Analyst : Kulwinder Rajpal, Changes to Forecasts : 25/11/2020.

This research publication was completed at 10:04 AM (CET) on 07-01-2021. In relation to the author of this research publication the General statements (Section A) contained in the disclaimer at the end of this document are supplemented as follows: The author of this publication is AlphaValue who, pursuant to a cooperation agreement with Baader Bank provides certain research & distribution services to the Baader Bank Group. AlphaValue does not have nor seek any business with companies covered in AlphaValue Research paid by subscription. As a result, investors can be confident that there is no conflict of interest that could affect the objectivity of AlphaValue Research. © 2021, AlphaValue All rights reserved. This publication is strictly for subscriber’s own, non-commercial, internal use. No part of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product. Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Allreal Holding A solid case, but for us currently not at an attractive price Switzerland  Investment case: In December 2020, we initiated our coverage of Swiss real estate Real Estate company Allreal with a Reduce rating and a CHF 180 price target (2019 adj. NAV CHF 165). Reuters: ALLN.S Bloomberg: ALLN SE In our 55-page report, we compare in-depth the business models of Allreal versus PSP. Reduce Although we like Allreal as a solid business model, we conclude from our analysis that we Closing price as of regard the current valuation premium (also “helped” by COVID-19, recession and home CHF 201.00 06-Jan-21 office discussion) as somewhat too high. Target price CHF 180.00 High/Low (12M) CHF 222.00/161.80 Compared to our preferred Swiss pick PSP, Allreal trades on an adj. NAV premium 2020 Market cap. CHF mn 3,193 to 2021 of approx. 20%. Bulls flag as rationales the 20% residential exposure in Enterprise value CHF mn 5,213 the (yielding) portfolio, the P&D segment generating shareholder value on top of the Free float 91.8% yielding portfolio or the expiry rental lease profile. Avg. daily turnover CHF mn 4.46 Comparing the yielding portfolios according to 18 criteria, we would only see a slight advantage Price relative to Index for Allreal over PSP. PSP’s strong points are the superior size (economies of scale), its outstanding city center focus and more conservative financing. Allreal has a lower risk with 20% residential exposure, a lower risk category exposure (less retail more state regulated industries-related) and lower risk rental expiry profile (although we think the market’s view is too negative).

Looking at the Projects and Development (P&D) division, we argue the development size and results of own projects are comparable to PSP, therefore: 1) The relative valuation difference vs. PSP should be based mainly “only” on the third-party pipeline of the P&D division. The short-term pipeline of own projects is a bit bleak, the medium-term pipeline offers a

different risk/return profile with Allreal focusing on new buildings, residential, promotion Performance (%) 1M 3M 6M and agglomeration, whereas PSP prioritizes renovation, commercial, yielding portfolio and Absolute 7.4 -0.2 5.9 city central projects. Both have pros and cons and the ranking depends on investors’ rel. SPI 3.7 -4.8 0.5 risk/return preferences. But looking at results in own projects in P&D (adjusting for a rel. STOXX Europe 600 4.2 -11.3 -3.6 one-time gain in 2019), this points to limited “fair” value per share and questionable ROIC rel. SXXP Real Estate 5.8 -7.3 -1.0 levels in our view. 2) Looking at the profitability of third-party volumes in P&D in recent years,

we notice that a) the business became smaller (i.e. consequently should today be also worth less), b) looks also not overly attractive from a profitability standpoint and Analyst: c) given Allreal’s indications, this part of P&D could further decline in the future. Andreas von Arx +41 43 388 9257  What to ask the management? [email protected] – How do you see the market environment (i.e. transaction market, renewal rents, etc.)?

– How do you see the medium-term outlook for office demand in the new times of increased use of home offices? How do you see the demand for retail space? Do you expect a change in trend for commercial space given the anticipated economic recession effects (i.e. more bankruptcies)?

– How can the P&D project volume target of CHF 400mn to CHF 500mn be achieved given a portfolio that points on average to approx. CHF 100mn volumes p.a. 2021-2025E for own developments and an, in our view, expectation that third-party volumes will continue to decline as seen in the past?

– Most Swiss real estate peers regard an own development unit as unattractive; what are Allreal’s management key arguments in favor of an own D&P unit? What does Allreal’s management consider an attractive return on invested capital and EBIT margin for its own developments – i.e. including reasonable operating expenses?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) % 2019 2020E 2021E 2022E Net income 234.8 155.5 103.0 110.9 -22.1 NAV prem./discount 6.2 13.8 19.9 20.3 FFOps (CHF) 8.84 7.93 8.32 9.12 1.0 FFO yield 5.0 4.1 4.1 4.5 NAVps (CHF) 165.12 168.56 167.60 167.03 0.4 Dividend yield 3.9 3.5 3.4 3.6 Source: Company data, Baader Helvea Equity Research

Allreal Holding

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS adjusted (CHF) 7.11 7.28 8.47 7.92 8.30 9.11 Indirect investment result (CHF) 1.00 2.85 6.31 1.87 -1.82 -2.13 EPS reported (CHF) 8.11 10.13 14.78 9.79 6.48 6.98 FFOps (CHF) 7.58 8.02 8.84 7.93 8.32 9.12 Dividend (CHF) 6.25 6.50 6.75 6.75 6.75 7.30 Book value (CHF) 135.15 139.57 149.09 152.13 151.87 152.10 NAV adj. (CHF) 146.42 152.75 165.12 168.56 167.60 167.03 Number of shares (outstanding; mn) 15.9 15.9 15.9 15.9 15.9 15.9 Share price (avg./current; CHF) 167.30 157.70 175.30 191.80 201.00 201.00 Market cap. (avg./current; CHF mn) 2,664.9 2,505.7 2,785.2 3,046.9 3,193.1 3,193.1 Enterprise value (CHF mn) 4,539.8 4,537.0 4,794.5 5,053.6 5,213.2 5,214.0 Valuation P/E adj. (x) 23.5 21.7 20.7 24.2 24.2 22.1 FFO yield (%) 4.5 5.1 5.0 4.1 4.1 4.5 Dividend yield (%) 3.7 4.1 3.9 3.5 3.4 3.6 Implied yield (EBITDA/EV) (%) 3.7 3.9 4.1 3.3 3.3 3.6 P/NAV (x) 1.14 1.03 1.06 1.14 1.20 1.20 P/BV (x) 1.24 1.13 1.18 1.26 1.32 1.32 ROCE/WACC (x) 1.19 1.12 1.10 1.00 1.11 1.22 (EV/CE)/(ROCE/WACC) (x) 0.87 0.86 0.89 1.01 0.92 0.84 Key company data Rental income growth (%) 3.4 8.7 4.9 0.3 1.0 0.8 EBITDA growth (%) -8.3 5.6 11.2 -14.4 2.7 9.4 FFO growth (%) 5.4 5.5 10.2 -10.3 4.8 9.7 FFO per share growth (%) 5.4 5.8 10.2 -10.3 4.9 9.6 DPS growth (%) 8.7 4.0 3.8 0.0 0.0 8.1 EBITDA margin adj. (%) 92.6 90.0 95.4 81.4 82.8 89.9 ROE recurring (%) 0.0 0.0 0.0 0.0 0.0 0.0 Net gearing (%) 87.2 91.5 84.8 83.0 83.7 83.6 Net loan-to-value (%) 47.4 48.8 45.9 45.2 45.4 45.5 Equity ratio (%) 49.3 48.1 49.4 49.9 49.8 50.0 Interest cover (x) 11.4 10.4 10.7 10.3 10.8 11.0 Income statement (CHF mn) Total revenues 622.9 552.8 559.7 487.4 492.3 571.2 Gross rental income 179.2 194.8 204.4 205.0 207.0 208.6 Net rental income 154.6 172.2 176.8 174.6 175.9 178.4 EBITDA 166.0 175.3 195.0 166.9 171.3 187.5 EBIT 187.5 235.6 328.8 202.8 131.2 140.7 EBT 160.0 206.9 302.0 186.5 115.3 123.6 EBT adjusted 138.2 146.3 162.9 150.4 155.2 170.2 Net profit after minorities 129.2 161.0 234.8 155.5 103.0 110.9 Funds from operations (FFO) 120.8 127.5 140.5 126.0 132.1 144.9 Balance sheet (CHF mn) Investment property 3,957 4,160 4,376 4,438 4,446 4,446 Non-current assets 4,241 4,473 4,705 4,757 4,756 4,747 Cash and equivalents 38 41 30 32 29 28 Current assets 119 137 88 90 87 86 Total assets 4,360 4,610 4,793 4,848 4,843 4,834 Equity 2,151 2,219 2,369 2,417 2,413 2,416 Interest bearing debt 1,913 2,072 2,039 2,039 2,049 2,049 Total equity and liabilities 4,360 4,610 4,793 4,848 4,843 4,834 Net debt 1,875 2,031 2,009 2,007 2,020 2,021 Cash flow (CHF mn) Cash flow from operating activities 172.2 82.6 199.6 136.5 141.1 153.9 Cash flow from investing activities -372.8 -135.4 -33.8 -26.6 -47.4 -47.4 Free cash flow -200.6 -52.8 165.8 109.9 93.7 106.5 Dividend paid -91.7 -99.3 -103.3 -107.2 -107.2 -107.2 Cash flow from financing activities 217.3 55.3 -176.6 -107.2 -97.2 -107.2 Changes in cash position 16.7 2.5 -10.8 2.7 -3.5 -0.8 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

ALSO Holding AG A steady and reliable growth engine Switzerland  Investment case: The roots of ALSO are in the Supply business model (in simple terms: IT Services a wholesale business for all kind of IT products) that accounted for 100% of group Reuters: ALSN.S Bloomberg: ALSN SE revenues in 2012. Back then, ALSO served 12 European countries. Since then, Add ALSO added with the Solutions and Services business models two higher-margin segments Closing price as of and broadened its regional footprint substantially, helped by acquisitions. End of 2019, CHF 253.00 06-Jan-21 ALSO served 23 countries in Europe and additional 64 countries via its “Platform-as-a-Service” Target price CHF 256.00 partners. ALSO holds a leading market position in the majority of its markets. High/Low (12M) CHF 255.00/126.80 Market cap. CHF mn 3,251 ALSO achieved revenue growth of 13% yoy (+4% yoy organically) to EUR 5,398mn and Enterprise value CHF mn 3,098 EBITDA of EUR 92.4mn (margin: 1.7%, +10bps yoy) in 1H20. We are seeing the company Free float 48.7% on track post 1H20 to achieve the full-year targets that include EBITDA in the range of Avg. daily turnover CHF mn 3.38 EUR 210-220mn in 2020. The current transformation towards higher-margin business models should help ALSO to achieve higher EBITDA margins over the medium term than Price relative to Index in the past. This would justify a sustainable rerating in our view.

 What to ask the management?

– Do you expect the current pandemic to be a structural tailwind for your business? If so, which areas should benefit particularly?

– The current pandemic highlighted the benefits of the digitization. Are there regional differences in the readiness for digitization?

– Amazon announced this year to enter the pharmacy market with Amazon Pharmacy.

How do you assess the risk of digital disruptors to enter your business? What are from Performance (%) 1M 3M 6M your perspective the barriers to entry and how difficult is it to replicate them? Absolute 7.7 4.3 7.4 rel. SPI 4.0 -0.3 2.1 – ALSO is a consolidator. However, 2020 was a quiet year in terms of acquisitions for ALSO. rel. STOXX Europe 600 4.5 -6.7 -2.1 Should we expect ALSO to be more active again in terms of M&A in 2021? rel. SXXP Technology 3.7 -1.5 3.4 – You announced to enter the Spanish market with your Service business model

beginning 2021. Do you see other interesting markets for your Service business model in Southern Europe and elsewhere? How fast can this business ramp up in a new country? Analyst: The number of trial seats saw a favorable development during the pandemic. Can you Knut Woller, CEFA – +49 89 5150 1807 share with us your expectations regarding the monetization of trial seats going into 2021? [email protected] How do you expect the pandemic to drive the adoption of your ACMP over the medium term?

– ALSO is transforming its business model from Supply to higher-margin Solutions and Service. Taking a longer-term perspective, is there a reason to believe why you

should not be able to leave historical margin levels behind? Will it be possible for ALSO to reach margin levels of traditional IT system houses over time?

– Your dependence on US-based vendors of hard- and software decreased substantially from 90% in 2013 to around 55% today. Is this already reflecting your target split? And how is the mix looking at the EBITDA level?

– In terms of supply chains, how do you ensure deliverability given currently cited bottlenecks?

– Would you agree that at least the low end of your medium-term EBITDA target in the range of EUR 250-310mn is conservative?

Key financials Valuation ratios EUR mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 10,692.7 11,671.4 12,254.9 12,867.7 6.4 EV/Sales 0.2 0.3 0.20.2 EBIT adj. 157.9 180.8 202.1 218.7 11.5 EV/EBIT adj. 11.2 16.1 14.2 12.4 EPS adj. (EUR) 7.80 9.26 10.62 11.71 14.5 P/E adj. 15.9 24.4 22.0 20.0 Source: Company data, Baader Helvea Equity Research

ALSO Holding AG

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (EUR) 7.22 6.33 7.80 9.26 10.62 11.71 EPS adjusted (EUR) 7.22 6.33 7.80 9.26 10.62 11.71 Dividend (CHF) 2.75 3.00 3.25 3.50 3.75 4.00 Book value (EUR) 48.51 52.59 56.99 63.22 70.58 78.79 Free cash flow (EUR) 5.24 4.51 18.64 15.33 15.81 15.16 Avg. no. of shares (mn) 12.8 12.8 12.8 12.8 12.8 12.8 Market cap. (avg./current; EUR mn) 1,430.3 1,351.6 1,592.9 2,900.2 3,004.2 3,004.2 Enterprise value (EUR mn) 1,604.0 1,524.8 1,770.6 2,919.8 2,862.5 2,712.6 Valuation P/E adj. (x) 15.4 16.6 15.9 24.4 22.0 20.0 P/BV (x) 2.3 2.0 2.2 3.6 3.3 3.0 FCF/EV (%) 2.1 1.8 7.5 6.5 7.1 7.2 FCF yield (%) (FCF/Mcap.) 4.7 4.3 15.0 6.8 6.8 6.5 Dividend yield (%) 2.5 2.9 2.6 1.6 1.5 1.6 EV/Sales (x) 0.2 0.2 0.2 0.3 0.2 0.2 EV/EBITDA adj. (x) 10.2 10.0 9.0 13.2 11.7 10.3 EV/EBIT adj. (x) 11.4 11.2 11.2 16.1 14.2 12.4 EV/CE (x) 2.0 2.0 2.2 4.2 4.5 4.7 ROCE/WACC adj. (x) 6.5 6.6 7.2 9.3 5.0 5.9 Key company data Sales growth (%) 11.4 3.2 16.5 9.2 5.0 5.0 EBITDA adj. growth (%) 7.7 -2.9 28.8 12.7 10.5 7.6 EBITDA adj. margin (%) 1.8 1.7 1.8 1.9 2.0 2.1 EBIT adj. margin (%) 1.6 1.5 1.5 1.5 1.6 1.7 Net adj. margin (%) 1.0 0.9 0.9 1.0 1.1 1.2 Free cash flow margin (%) 0.8 0.6 2.2 1.7 1.7 1.5 Payout ratio (%) 38.1 47.5 41.8 37.9 35.4 34.2 Gearing (%) (net debt/equity) 25.6 24.0 21.9 0.2 -17.7 -30.8 Net debt/EBITDA (x) 1.0 1.1 0.8 0.0 -0.7 -1.2 Equity ratio (x) (equity/total assets) 28.9 28.4 25.9 26.7 27.9 29.7 Capital employed (EUR mn) 805.4 779.2 790.3 696.8 629.4 583.2 ROCE adj. (%) 22.7 23.0 25.1 32.4 40.1 46.9 Income statement (EUR mn) Turnover 8,890.7 9,175.7 10,692.7 11,671.4 12,254.9 12,867.7 EBITDA 157.3 152.7 196.7 221.8 245.1 263.8 EBITDA adj. 157.3 152.7 196.7 221.8 245.1 263.8 EBIT 141.0 136.7 157.9 180.8 202.1 218.7 EBIT adj. 141.0 136.7 157.9 180.8 202.1 218.7 EBT 124.2 117.3 134.8 158.8 182.0 200.6 Net profit after minorities 92.6 81.1 100.0 118.8 136.2 150.2 Net profit adj. 92.6 81.1 100.0 118.8 136.2 150.2 Balance sheet (EUR mn) Non-current assets 260 267 415 398 376 355 thereof goodwill 150 152 178 183 183 183 Current assets 1,898 2,115 2,408 2,650 2,870 3,053 Total assets 2,159 2,382 2,824 3,048 3,246 3,408 Shareholders' equity 623 676 732 812 907 1,012 Total equity and liabilities 2,159 2,382 2,824 3,048 3,246 3,408 Net debt 159 162 161 2 -161 -311 Cash flow (EUR mn) Cash flow from operations 94.9 88.1 312.1 220.3 224.2 218.9 of which change in working capital -19.9 47.1 195.3 75.9 45.5 25.1 Cash flow from investments -27.5 -30.2 -72.6 -23.4 -21.1 -24.1 of which investment in fixed assets -11.0 -10.2 -7.6 -13.2 -15.2 -17.2 Free cash flow 67.3 57.9 239.5 196.9 203.2 194.8 Dividends paid -26.9 -30.7 -34.3 -38.7 -41.7 -44.7 Cash flow from financing activities 112.9 -53.0 -133.3 -91.7 -31.7 -84.7 Change in cash position 180.1 4.8 109.1 105.9 172.2 110.9 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

BB Biotech Going strong despite misfiring Switzerland  Investment case: BB Biotech (BION) is a closed-end Swiss investment company Pharma specializing in the global biotech sector. The company, founded in Schaffhausen in 1993, Reuters: BION.S Bloomberg: BION SE enjoys an enviable 16% net asset value CAGR since inception. The biotech investment Add fund is currently the world’s largest by value, with the stated ambition to deliver a total Closing price as of shareholder return of 15% p.a. over the medium term. Since 2019, the company is CHF 73.40 06-Jan-21 engaged in a portfolio rebalancing in order to position investments on mid and small-cap Target price CHF 68.00 biotech companies, which typically offer higher growth rates compared to pharma large caps. High/Low (12M) CHF 74.70/45.44 Market cap. CHF mn 4,063 Enterprise value CHF mn 3,990  BB Biotech reported a net asset value (NAV) end-2020 at CHF 71.30 per share, Free float 100.0% translating into an estimated 22% total return in 2020. The excellent performance, Avg. daily turnover CHF mn 4.90 nevertheless, slightly underperformed the Nasdaq Biotech Index (+27%), mostly due to underexposure to COVID-19 winners after a first phase of skepticism on vaccines potential. Price relative to Index With shares trading at a moderate 4% premium to NAV, we expect the shares to perform in 2021.

 What to ask the management?

– What are your views on the major risks for the biotech market going into 2021?

– Regarding the USD/CHF headwind, where do you see the pair going in the next 12 months and do you consider to hedge your USD exposure?

– Which is BB Biotech highest conviction investment at present? Did the emerging mRNA

technology change your view on Ionis Pharmaceuticals? Which near-term catalysts Performance (%) 1M 3M 6M could restore investors’ confidence in Ionis Pharma? Absolute 3.1 10.0 4.6 rel. SPI -0.5 5.4 -0.7 – Why did you decide to reactivate your share repurchase program? rel. STOXX Europe 600 0.0 -1.0 -4.9 – Could you comment on Fate Therapeutics and the potential competitive threat rel. STXE 0.5 11.7 5.7 Biotechnology from bispecifics? – Would BB Biotech consider a diversification into Medtechs or medical services and

if not, why?

Analyst: Bruno Bulic, Ph.D. +41 43 388 9225 [email protected]

Key financials Valuation ratios CHF mn 2018 2019 2020E 2021E CAGR (%) x 2018 2019 2020E 2021E Sales 0.0 0.0 0.0 0.0 - EV/Sales - - - - EBIT adj. -473.1 678.7 208.4 232.6 - EV/EBIT adj. -7.7 5.4 15.9 17.2 EPS adj. (CHF) -8.51 12.24 3.76 4.17 - P/E adj. - 5.5 16.2 17.6 Source: Company data, Baader Helvea Equity Research

BB Biotech

Key data

FY 31 Dec. 2016 2017 2018 2019 2020E 2021E Share data EPS reported (CHF) -14.51 12.42 -8.51 12.24 3.76 4.17 EPS adjusted (CHF) -14.51 12.42 -8.51 12.24 3.76 4.17 Dividend (CHF) 2.75 3.30 3.05 3.40 3.08 3.29 Book value (CHF) 54.33 63.93 52.11 61.30 61.65 62.74 Free cash flow (CHF) 2.09 4.76 1.95 3.88 -0.77 -0.83 Avg. no. of shares (mn) 55.3 55.4 55.4 55.4 55.4 55.4 Market cap. (avg./current; CHF mn) 2,718.5 3,319.1 3,664.5 3,708.8 3,362.8 4,063.0 Enterprise value (CHF mn) 2,927.9 3,403.3 3,655.5 3,684.4 3,321.0 3,990.2 Valuation P/E adj. (x) -3.4 4.8 - 5.5 16.2 17.6 P/BV (x) 0.9 0.9 1.3 1.1 1.0 1.2 FCF/EV (%) 2.7 6.4 2.7 5.3 -1.1 -1.1 FCF yield (%) (FCF/Mcap.) 4.2 7.9 2.9 5.8 -1.3 -1.1 Dividend yield (%) 5.6 5.5 4.6 5.1 5.1 4.5 EV/EBITDA adj. (x) -3.6 5.0 -7.7 5.4 15.9 17.2 EV/EBIT adj. (x) -3.6 5.0 -7.7 5.4 15.9 17.2 Key company data Sales growth (%) ------EBITDA adj. growth (%) -225.1 -184.1 -169.4 -243.5 -69.3 11.6 Payout ratio (%) -19.0 26.6 -35.9 27.8 82.0 78.8 Gearing (%) (net debt/equity) 7.0 2.4 -0.3 -0.7 -1.2 -2.1 Net debt/EBITDA (x) -0.3 0.1 0.0 0.0 -0.2 -0.3 Equity ratio (x) (equity/total assets) 93.1 97.3 93.4 95.5 89.2 84.0 Income statement (CHF mn) Turnover 0.0 0.0 0.0 0.0 0.0 0.0 EBITDA -810.2 681.3 -473.1 678.7 208.4 232.6 EBITDA adj. -810.2 681.3 -473.1 678.7 208.4 232.6 EBIT -810.2 681.3 -473.1 678.7 208.4 232.6 EBIT adj. -810.2 681.3 -473.1 678.7 208.4 232.6 EBT -802.0 687.6 -471.3 677.5 208.0 231.1 Net profit after minorities -802.0 687.6 -471.3 677.5 208.0 231.1 Net profit adj. -802.0 687.6 -471.3 677.5 208.0 231.1 Balance sheet (CHF mn) Current assets 3,226 3,638 3,087 3,555 3,824 4,134 Total assets 3,226 3,638 3,087 3,555 3,824 4,134 Shareholders' equity 3,003 3,539 2,885 3,393 3,412 3,473 Total equity and liabilities 3,226 3,638 3,087 3,555 3,824 4,134 Net debt 209 84 -9 -24 -42 -73 Cash flow (CHF mn) Cash flow from operations 115.4 263.5 107.8 215.0 -42.5 -45.8 Free cash flow 115.4 263.5 107.8 215.0 -42.5 -45.8 Dividends paid -160.5 -152.1 -182.8 -169.0 -188.4 -170.6 Cash flow from financing activities -126.8 -263.0 -93.9 -205.2 60.0 76.7 Change in cash position -10.8 0.5 11.3 8.6 17.5 31.0 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Bossard Expected sales recovery in 2021 not enough to justify current valuation Switzerland levels given low visibility and uncertain economic environment

Capital Goods  Investment case: As an early cyclical, Bossard’s growth potential highly correlates with Reuters: BOS.S Bloomberg: BOSN SE economic development, which currently remains uncertain. Visibility into the order book is Reduce only several weeks and Bossard’s growth and margin profile has a markedly high correlation Closing price as of with global PMIs. Potential catalysts for a recovery would obviously be increasing PMIs 06-Jan-21 CHF 180.60 and a general improvement in the overall economic sentiment. On current multiples, Target price CHF 145.00 shares are trading above historic levels, which we see barely justified given the low High/Low (12M) CHF 180.60/95.05 visibility and economic uncertainties. Market cap. CHF mn 1,378 Enterprise value CHF mn 1,419  In the long term, however, Bossard remains a high-quality, strong value generating Free float 69.0% Swiss player (double-digit margins and ROCE) with a well-defined business model that Avg. daily turnover CHF mn 1.87 combines trading with an increasingly growing share of higher value-added services

Price relative to Index (engineering and logistics). Bossard’s strategic exposure to megatrends in industry 4.0 (>300,000 smart devices installed at customer facilities), e-mobility (Tesla & startups), lightweight (10% of sales incl. aerospace, automotive and rail) and air travel remains unbroken and Bossard’s active and successful role in the ongoing consolidation of a highly fragmented market (Bossard’s market share ~3%) will continue to add additional sales in the next years.

 What to ask the management?

– What is historically the necessary organic growth in your business to secure profitability?

– What current risks do you see which could fundamentally threaten Bossard’s business Performance (%) 1M 3M 6M model and consequently its above-average growth/margin profile? Absolute 12.6 7.4 22.4 rel. SPI 9.0 2.8 17.0 – What potential do you see in the monetization of services in the future in terms of rel. STOXX Europe 600 9.5 -3.7 12.9 topline and margin contribution? What is your % of sales target for services? rel. SXXP Construction 9.8 -2.3 9.9 – Are customers of smart factory logistics solely sourcing from you or also competitors?

How high are switching costs for customers? – What was your logic behind moving into 3D printing? Analyst: Jorg Schirmacher, CFA – Explain to us your new assembly technology expert program and what benefits you +41 43 388 9267 expect mid-term. [email protected] – Explain your current M&A strategy.

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 876.2 806.7 863.1 906.3 1.1 EV/Sales 1.5 1.7 1.6 1.5 EBIT adj. 95.7 81.0 92.3 97.4 0.6 EV/EBIT adj. 14.1 16.5 15.4 14.3 EPS adj. (CHF) 9.73 7.85 8.96 9.42 -1.1 P/E adj. 15.6 21.4 20.2 19.2 Source: Company data, Baader Helvea Equity Research

Bossard

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 10.33 10.95 9.73 7.85 8.96 9.42 EPS adjusted (CHF) 10.33 10.95 9.73 7.85 8.96 9.42 Dividend (CHF) 4.20 4.50 2.00 3.20 3.70 3.90 Book value (CHF) 34.72 40.63 39.91 43.77 49.51 55.25 Free cash flow (CHF) 8.13 3.84 -2.90 3.89 6.64 8.56 Avg. no. of shares (mn) 7.6 7.6 7.6 7.6 7.6 7.6 Market cap. (avg./current; CHF mn) 1,516.0 1,496.0 1,158.6 1,280.4 1,378.0 1,378.0 Enterprise value (CHF mn) 1,645.1 1,631.9 1,353.2 1,339.0 1,418.6 1,389.7 Valuation P/E adj. (x) 19.3 17.9 15.6 21.4 20.2 19.2 P/BV (x) 5.7 4.8 3.8 3.8 3.6 3.3 FCF/EV (%) 4.1 1.9 -1.4 2.1 3.6 4.7 FCF yield (%) (FCF/Mcap.) 4.1 2.0 -1.9 2.3 3.7 4.7 Dividend yield (%) 2.1 2.3 1.3 1.9 2.0 2.2 EV/Sales (x) 2.1 1.9 1.5 1.7 1.6 1.5 EV/EBITDA adj. (x) 14.7 13.1 11.9 13.0 12.3 11.4 EV/EBIT adj. (x) 17.0 15.0 14.1 16.5 15.4 14.3 EV/CE (x) 3.8 3.4 2.6 2.4 2.5 2.4 ROCE/WACC adj. (x) 2.5 2.5 2.0 1.6 1.7 1.8 Key company data Sales growth (%) 13.1 10.8 0.6 -7.9 7.0 5.0 EBITDA adj. growth (%) 23.0 11.5 -9.1 -9.3 12.3 5.3 EBITDA adj. margin (%) 14.3 14.3 13.0 12.8 13.4 13.4 EBIT adj. margin (%) 12.3 12.5 10.9 10.0 10.7 10.7 Net adj. margin (%) 10.0 9.6 8.5 7.4 7.9 7.9 Free cash flow margin (%) 7.9 3.4 -2.5 3.7 5.9 7.2 Payout ratio (%) 40.7 41.1 20.6 40.8 41.3 41.4 Gearing (%) (net debt/equity) 47.0 42.0 61.6 51.9 38.9 26.1 Net debt/EBITDA (x) 1.1 1.0 1.7 1.7 1.3 0.9 Equity ratio (x) (equity/total assets) 48.9 51.3 46.7 44.7 43.7 43.1 Capital employed (CHF mn) 433.6 481.6 524.8 555.8 577.2 587.1 ROCE adj. (%) 18.1 18.5 14.9 11.5 12.6 12.9 Income statement (CHF mn) Turnover 786.2 871.1 876.2 806.7 863.1 906.3 EBITDA 112.0 124.9 113.6 103.0 115.7 121.8 EBITDA adj. 112.0 124.9 113.6 103.0 115.7 121.8 EBIT 97.0 108.8 95.7 81.0 92.3 97.4 EBIT adj. 97.0 108.8 95.7 81.0 92.3 97.4 EBT 93.0 104.2 93.0 78.0 89.3 94.4 Net profit after minorities 78.5 83.4 74.2 59.9 68.4 71.9 Net profit adj. 78.5 83.4 74.2 59.9 68.4 71.9 Balance sheet (CHF mn) Non-current assets 154 165 188 213 217 215 thereof goodwill 0 0 0 0 0 0 Current assets 386 439 465 535 647 763 Total assets 540 604 653 748 863 978 Shareholders' equity 264 310 305 334 378 422 Total equity and liabilities 540 604 653 748 863 978 Net debt 124 130 188 173 147 110 Cash flow (CHF mn) Cash flow from operations 77.2 58.9 84.5 78.7 79.6 88.9 of which change in working capital -15.5 -43.4 -14.1 -2.6 -16.2 -11.0 Cash flow from investments -15.5 -29.6 -106.6 -49.0 -28.9 -23.6 of which investment in fixed assets -15.3 -19.9 -28.2 -35.0 -28.0 -22.7 Free cash flow 61.8 29.2 -22.1 29.7 50.7 65.3 Dividends paid -25.1 -32.0 -34.3 -15.3 -24.4 -28.2 Cash flow from financing activities -64.3 -16.7 22.8 42.8 39.8 36.0 Change in cash position -1.9 12.0 0.1 72.5 90.5 101.3 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Clariant Portfolio change, overhead “rightsizing” and late-cyclical recovery together Switzerland with new CEO make Clariant an interesting stock for 2021

Chemicals  Investment case: Even excluding the special dividend of CHF 3.00 per share (paid on Reuters: CLN.S Bloomberg: CLN SE 8 July 2020), Clariant’s share price has underperformed its chemical peers by ~10% Buy in 2020. This is even more surprising as Clariant was able to close the Masterbatch divestment (in contrast to market speculation before) and Clariant was in 1H20 less hit by Closing price as of 06-Jan-21 CHF 18.94 COVID-19/lockdown effects. In our view, the reasons were: 1) Clariant’s cautious Target price CHF 29.00 statements on catalysts margins in 4Q20, 2) the potential COVID-19 impact on the High/Low (12M) CHF 23.82/14.39 Pigments divestment process and price, 3) no clarity who will become the new CEO, and Market cap. CHF mn 6,282 4) the question if SABIC is really a long-term anchor investor (or if it will sell its stake after Enterprise value CHF mn 5,175 it might IPO its specialty chemical business). We think on 1) that the low 4Q20 margins Free float 61.0% have to do with start-up costs of Clariant’s new Chinese PDH catalyst plant, Avg. daily turnover CHF mn 18.77 2) the divestment will be announced until mid-2021E with an EV above CHF 1bn, 3) on 9 December the new CEO Conrad Keijzer was announced, and 4) we think with Price relative to Index SABIC’s submission of two AGM agenda items, it looks like that SABIC’s Clariant stake is at least not a short-term investment and we therefore do not think SABIC will sell its stake over the market. In our view, 2021 has multiple positive triggers for Clariant’s share price to outperform its peers and the Swiss stock market,

 What to ask the management?

– Clariant is sticking to the medium-term targets for its remaining divisions. When should we expect Clariant to reach them?

– Can you explain the cautious 4Q20 EBITDA margin guidance for your Catalysis division?

Previously, you have expected a positive product mix effect for 2020. Is the effect Performance (%) 1M 3M 6M delayed into 2021 or has it disappeared? And if so, why? Absolute 5.5 3.9 7.4 rel. SPI 1.9 -0.7 2.1 – Have there been project cancellations or major project delays at catalysts so far? rel. STOXX Europe 600 2.4 -7.2 -2.1 Do you already see negative effects from slashed capex spending of your end customers rel. SXXP Chemicals -0.4 -4.4 -6.0 (e.g. refinery, oil & gas and chemicals industry) in the order books of your first fill (~30% of the business) or your refill business (~70% of the business)?

– How is the phasing of your cost savings out of the two announced programs? Analyst: And how is the phasing of the associated costs? Markus Mayer +49 89 5150 1818 – Your Oil & Mining Service business weakened further in 2020. What are your expectations [email protected] regarding the further development for this unit? Is there a consolidation trend among competitors and is this an option?

– When do you expect positive effects from the Sunliquid contract signings?

– M&A and portfolio management is an important lever for you. Can you comment on current merger rumors? Is SABIC a long-term anchor investor?

– Your cash flow improved already over the past years, but the cash conversion is not yet where it is at your peers. When should we expect similar cash conversions? What are the reasons which hold back the cash flow development so far?

– How much could your de-icing business suffer from the lower aerospace traffic?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 4,399.0 3,834.2 3,765.4 4,000.8 -3.1 EV/Sales 2.0 1.7 1.4 1.3 EBIT adj. 444.0 323.8 386.6 416.8 -2.1 EV/EBIT adj. 19.6 20.0 13.4 12.1 EPS adj. (CHF) 0.67 0.63 0.66 0.72 2.4 P/E adj. 29.8 25.0 28.7 26.3 Source: Company data, Baader Helvea Equity Research

Clariant

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 0.84 0.59 -0.17 0.48 0.63 0.69 EPS adjusted (CHF) 1.38 1.02 0.67 0.63 0.66 0.72 Dividend (CHF) 0.50 0.55 3.00 0.75 0.23 0.25 Book value (CHF) 8.91 8.95 8.07 5.62 5.58 6.11 Free cash flow (CHF) 1.49 0.77 0.77 5.52 4.30 0.66 Avg. no. of shares (mn) 330.0 331.7 331.7 331.7 331.7 331.7 Market cap. (avg./current; CHF mn) 7,216.8 7,799.5 6,626.7 5,213.8 6,281.8 6,281.8 Enterprise value (CHF mn) 9,787.8 9,945.5 8,686.7 6,461.5 5,175.3 5,058.0 Valuation P/E adj. (x) 15.8 23.1 29.8 25.0 28.7 26.3 P/BV (x) 2.5 2.6 2.5 2.8 3.4 3.1 FCF/EV (%) 5.6 3.0 3.1 24.3 27.6 4.3 FCF yield (%) (FCF/Mcap.) 6.8 3.3 3.8 35.1 22.7 3.5 Dividend yield (%) 2.3 2.3 15.0 4.8 1.2 1.3 EV/Sales (x) 1.5 2.3 2.0 1.7 1.4 1.3 EV/EBITDA adj. (x) 12.3 14.8 19.9 10.7 7.8 7.3 EV/EBIT adj. (x) 14.5 22.5 19.6 20.0 13.4 12.1 EV/CE (x) 1.8 2.0 2.4 3.2 4.6 4.4 ROCE/WACC adj. (x) 1.3 0.9 1.6 1.5 - - Key company data Sales growth (%) 9.1 -30.9 -0.1 -12.8 -1.8 6.3 EBITDA adj. growth (%) 2.6 -15.6 -35.1 37.7 10.4 4.5 EBITDA adj. margin (%) 12.5 15.3 9.9 15.7 17.7 17.4 EBIT adj. margin (%) 10.6 10.1 10.1 8.4 10.3 10.4 Net adj. margin (%) 4.3 4.4 -1.3 4.1 5.5 5.7 Free cash flow margin (%) 7.7 5.8 5.8 47.8 37.9 5.5 Payout ratio (%) 59.6 93.1 -1745.6 156.5 36.5 36.1 Gearing (%) (net debt/equity) 52.5 40.3 45.4 20.4 -108.1 -105.6 Net debt/EBITDA (x) 1.6 1.6 1.7 0.6 -3.0 -3.1 Equity ratio (x) (equity/total assets) 35.7 37.2 33.6 26.4 26.3 27.9 Capital employed (CHF mn) 5,415.0 4,900.0 3,674.0 2,015.2 1,118.4 1,156.2 ROCE adj. (%) 9.3 6.8 9.1 12.1 25.9 27.0 Income statement (CHF mn) Turnover 6,377.0 4,404.0 4,399.0 3,834.2 3,765.4 4,000.8 EBITDA 974.0 768.0 716.0 602.0 664.7 694.9 EBITDA adj. 797.0 673.0 437.0 602.0 664.7 694.9 EBIT 496.0 348.0 165.0 323.8 386.6 416.8 EBIT adj. 673.0 443.0 444.0 323.8 386.6 416.8 EBT 437.0 281.0 71.0 250.1 319.6 349.2 Net profit after minorities 277.0 196.0 -57.0 158.9 208.9 229.8 Net profit adj. 277.0 196.0 -57.0 158.9 208.9 229.8 Balance sheet (CHF mn) Non-current assets 4,533 4,131 3,218 1,629 739 753 thereof goodwill 1,280 1,261 1,045 705 415 425 Current assets 3,696 3,857 4,768 5,435 6,306 6,532 Total assets 8,229 7,981 7,979 7,057 7,038 7,278 Shareholders' equity 2,939 2,970 2,677 1,865 1,849 2,027 Total equity and liabilities 8,229 7,981 7,979 7,057 7,038 7,278 Net debt 1,543 1,196 1,216 380 -1,999 -2,141 Cash flow (CHF mn) Cash flow from operations 428.0 387.0 509.0 520.4 822.0 524.0 of which change in working capital -205.0 113.0 313.0 70.0 6.9 -23.7 Cash flow from investments 65.0 -132.0 -254.0 1,310.7 605.4 -305.0 of which investment in fixed assets -248.0 -257.0 -289.0 -289.3 -294.6 -305.0 Free cash flow 493.0 255.0 255.0 1,831.0 1,427.3 219.1 Dividends paid -146.4 -165.0 -182.4 -995.0 -248.8 -76.6 Cash flow from financing activities -826.0 -246.0 -440.0 -995.0 -248.8 -76.6 Change in cash position -342.0 137.6 -200.6 836.0 2,378.6 142.4 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Credit Suisse Baader Europe Investment Banks / Switzerland Management returns to the old Investment

Bank structure Add Upside: 8.38% Target Price (6 months) CHF 13.2 Share Price CHF 12.2 Our investment view Market Cap. CHFM 28,745 Credit Suisse is one of the biggest global Asset Managers (CHF1.48trn AuM at Price Momentum STRONG end of September 2020) and currently the second largest bank in Switzerland. Extremes 12Months 6.42 13.3 The bank suffered from the reduction in risk-weighted-assets (Basel III) in 2011, Fundamental Strength 6 /10 significant losses on own debt in 2012 and litigation charges in 2013 and 2014, Bloomberg CSGN SW Equity mainly due to the Investment Banking side. The following restructuring programme Reuters CSGN.S took three years from 2016 to 2018. Credit Suisse had to release losses totalling more than CHF6bn for the years 2015 to 2017 and returned to profits in 2018. Thomas Gottstein became the new group CEO in February 2020 and announced some strategy and restructuring moves in 2020. CS has integrated Global Markets, Investment Banking & Capital Markets and APAC Markets to form a globally-integrated Investment Bank to achieve critical scale and save CHF400- 450m from 2022 onwards. CS wants to streamline its Suisse business further and announced organisational changes and adjustments to the branch network in Switzerland. New medium-term targets are a RoRC (return on regulatory capital regarding CS) of 20-25% for APAC, IWM and SUB, whereas Investment Bank has a RoRC target of 10-15% and a capital utilisation of 1/3rd of group total. The group’s medium-term ambition is a RoTE of 10-12%. Credit Suisse has been hit Analyst : Dieter HEIN by the COVID-19 turmoil in 2020 but has been more of a winner than a loser so Equity Sales far. The Investment Bank unit has benefited, like peers, from the excellent trading [email protected] result which has offset the negative COVID-19 impact. However, CS warned that Frankfurt +49 69 1388 1357 London +44 20 7054 7100 the results for Q4 20 will also be impacted by the expected impairment relating to Munich +49 89 5150 1850 York Capital Management and the updated assessment of RMBS-related Zurich +41 43 388 9200 New York +1 212 935 5150 provisions. Credit Suisse intends to restart share buy-backs in January 2021. PERF 1w 1m 3m 12m

What to ask the management? Credit Suisse 6.84% 3.70% 28.0% -4.72%

Banks 4.36% 0.57% 29.1% -18.9% - Your CEO announced a Wealth Management pre-tax income (PTI) ambition of STOXX 600 1.54% 3.45% 11.1% -2.45% CHF 5.0-5.5 bn for 2023 across SUB, IWM and APAC in December 2020. What growth levers do you have in place in SUB to contribute to this ambition? Sector Opinion Underweight - Credit Suisse announced in August 2020 that it would restructure and streamline Strongest upside Santander its Swiss Universal Bank (SUB) further. Two of your ambitions relate to costs Worst potential Bank of Ireland where you expect to: 1) achieve CHF100m of gross savings per annum from 2022 onwards, and 2) to reduce your cost/income ratio further; how are you planning to Last updated: 16/12/2020 12/19A 12/20E 12/21E 12/22E achieve these sustainable savings? Are you planning any further investments? Adjusted P/E (x) 10.1 7.89 10.1 9.28 - What is SUB’s strategy with respect to relationship manager (RM) growth / hiring Dividend yield (%) 2.30 2.81 2.46 2.63 and can you give any numerical indications? How important is RM hiring to P/Book (x) 0.69 0.52 0.60 0.57 achieve the 2023 PTI ambition? Adjusted EPS (CHF) 1.19 1.26 1.20 1.31 - What impact from the negative yield environment and COVID-19 burdens do you Growth in EPS (%) 53.4 6.13 -5.06 9.38 expect in the mid-term on your interest margins and earnings? Dividend (CHF) 0.28 0.28 0.30 0.32 Core Tier 1 (%) 12.7 12.5 12.9 13.6 - With regards to digital banking, you have highlighted CSX, which is really more Revenues (CHFM) 20,478 21,150 20,180 20,350 geared towards Retail/Affluent. Are there any plans to have such platforms Attributable net profit 3,419 2,658 2,831 3,050 directed at HNW/UHNW? How do you see the coverage model for this clientele (CHFM) changing with recent advances in technology? ROE reported (%) 7.81 5.90 6.02 6.25 - How does the Swiss Universal Bank leverage investment banking capabilities? Equity (gp. share) (CHFM) 43,644 46,421 47,600 49,951 How will the new GTS provide further opportunities to Swiss clients? Total assets (CHFb) 787 823 814 819 - Your Group CEO expects a consolidation trend in European markets. Will Credit Suisse play an active role in this consolidation trend in Switzerland? Sales by Geography Valuation Summary

Benchmarks Value Weight Largest comparables CHF NAV/SOTP per share 30% BNP Paribas 13.9 Julius Baer CHF Intrinsic value 25% UBS 11.4 CHF Deutsche Bank Dividend Yield 15% 12.4 Natixis MarketCap/Gross Operating CHF 10% Profit 13.4 CHF P/E 10% 16.8 CHF P/Book 10% 12.8 CHF TARGET PRICE 100% 13.2

Consolidated P&L Accounts 12/19A 12/20E 12/21E Balance Sheet 12/19A 12/20E 12/21E Net banking revenues CHFM 18,876 19,800 18,900 Loans & Credits to customers CHFM 272,150 295,000 290,000 Operating revenues CHFM 20,478 21,150 20,180 Trading portfolio CHFM 153,797 152,000 142,000 Staff costs CHFM -10,036 -9,866 -9,732 Total assets CHFM 787,295 823,260 814,430 Gross operating profit CHFM 5,589 6,434 5,898 Ordinary shareholders' equity CHFM 43,644 46,421 47,600 Loan Loss Provisions CHFM -324 -1,500 -1,200 Of which reevaluation reserves CHFM 0.00 0.00 0.00 Underlying operating profit CHFM 4,025 3,574 3,598 Preference shares CHFM Underlying operating margin % 19.7 16.9 17.8 Minority interests CHFM 70.0 75.0 80.0 Banking cost income ratio % 78.8 76.0 76.2 Subordinated Debt CHFM 3,247 1,400 2,000 Operating profit (EBIT) CHFM 3,990 3,124 3,573 Provisions for pensions CHFM -2,433 -4,235 -4,244 Corporate tax CHFM -1,295 -620 -930 Customers deposits (amortized costs) CHFM 383,783 375,000 380,000 Equity associates CHFM 232 150 195 Gross debt financing CHFM 16,264 15,400 17,000 Minority interests CHFM -6.00 4.00 -7.00 Total liabilities and shareholders' equity CHFM 787,295 823,260 814,430 Adjusted attributable net profit CHFM 3,081 3,108 2,856 Fully-diluted adjusted attr. net profit CHFM 3,081 3,108 2,856 Avg gross long-term financing CHFM 15,340 15,832 16,200 Net investments in shares CHFM Assets under Management (3rd party) CHFM 1,507,200 1,430,000 1,520,000 Dividends (parent company) CHFM -695 -683 -661 Off B/S business guarantees given CHFM 34,595 Interest expense on Tier 1 debt funding CHFM -720 -730 -730 Off B/S funding guarantees given CHFM 125,925 New shareholders' equity CHFM -1,912 -1,000 -1,000 Tier 1 Analytics Change in Tier 1 gross debt CHFM Year end Tier 1 capital CHFM 49,791 50,771 51,946 Risk Measures of which debt CHFM 13,017 13,017 13,017 Total Risk Weighted Assets CHFM 290,463 303,000 301,000 of which minorities CHFM 70.0 75.0 80.0 Equity/total assets % 5.55 5.65 5.85 Tier 1 ratio % 17.1 16.8 17.3 Liquidity items % 48.7 45.6 46.7 Core Tier 1 (debt excl.) % 12.7 12.5 12.9 Loan loss ratio bp 12.0 51.0 41.0 Valuation Ratios Provisions/Doubtful % 0.00 0.00 0.00 Reference P/E (benchmark) x 10.1 7.89 10.1 Provisons/Impaired % 44.5 57.1 62.5 P/Book x 0.69 0.52 0.60 Per Share Data Market Cap/Gross Operating Profit x 5.40 3.75 4.83 No of shares net of treas. stock Mio 2,498 2,420 2,340 Dividend yield % 2.30 2.81 2.46 Number of diluted shares (average) Mio 2,587 2,459 2,380 EPS before gwill amort.(diluted) CHF 1.19 1.26 1.20 Restated NAV per share CHF Net dividend per share CHF 0.28 0.28 0.30

Analyst : Dieter Hein, Changes to Forecasts : 16/12/2020.

This research publication was completed at 10:00 AM (CET) on 07-01-2021. In relation to the author of this research publication the General statements (Section A) contained in the disclaimer at the end of this document are supplemented as follows: The author of this publication is AlphaValue who, pursuant to a cooperation agreement with Baader Bank provides certain research & distribution services to the Baader Bank Group. AlphaValue does not have nor seek any business with companies covered in AlphaValue Research paid by subscription. As a result, investors can be confident that there is no conflict of interest that could affect the objectivity of AlphaValue Research. © 2021, AlphaValue All rights reserved. This publication is strictly for subscriber’s own, non-commercial, internal use. No part of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product. Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Dufry Fighting the perfect storm – Reopening hopes are on summer-21 Switzerland  Investment case: Since Mar-20, Dufry is fighting the perfect storm, with challenges and Non Food Retail sharp sales declines across all regions and across all sales channels. Organic group sales Reuters: DUFN.S Bloomberg: DUFN SE declined in 9M20 by -67.8% (1Q20: -21.4%, 2Q20 -92.8%, 3Q20 -79.7%). The COVID-19 Sell outbreak has and will continue to change the “travel world” on a permanent basis. Closing price as of At group’s recent CC, CEO Diaz stated: “2020E is all about liquidity, cost flexibility and to CHF 51.94 06-Jan-21 adapt the business to the (new) reality”. The final outcome of FY202E should be weaker Target price CHF 20.00 than Dufry had expected in its bad-case scenario. (Dufry assumed sales to decline by High/Low (12M) CHF 97.36/20.10 Market cap. CHF mn 2,877 -40% to -70% in 2020E.) In our view, the number of passengers might remain for a while Enterprise value CHF mn 10,786 on a sustainable lower basis compared to pre-crisis level and therefore, Dufry’s business Free float 62.3% opportunities, heavily depending on the number of global flight passengers, will remain limited. Avg. daily turnover CHF mn 37.54 Trading update: Since Sep-20, the COVID-19 infection rates are rising again and since Dec-20, governments’ travel restrictions have tightened again. Therefore, group’s outlook on Price relative to Index FY21E should remain muted. Nobody knows when passenger flows will “normalize” again. All hopes are on the vaccines, which started to be introduced in a couple of countries since end of December. Group’s financial stability was supported by its recent capital increases, which brought Advent and Alibaba as new anchor shareholder on board.

 What to ask the management?

– Could you please remind us about the various measures to strengthen group’s financial situation in order to weather the current storm? Net debt at end of FY20E?

– The banks agreed to pause Dufry’s covenants for some time. When will the covenant holidays end? How much will this impact your financial results in FYs 20E and 21E? Performance (%) 1M 3M 6M Absolute -6.4 57.6 82.2 – What is the outlook for FY21E? What are potential incremental measures to be rel. SPI -10.0 53.0 76.9 prepared for a continuing weak market environment? rel. STOXX Europe 600 -9.6 46.6 72.8 rel. SXXP Retail -8.7 48.2 63.7 – When do you expect flight/passenger figures potentially be back to pre-crisis level?

– How have you been able to renegotiate/flexibilize the concession contracts with your landlords and airport authorities? Analyst: Volker Bosse, CEFA – How do you see your business outlook, particularly in your “problem countries” Brazil, +49 89 5150 1815 Argentina, Greece, Turkey and Russia developing? [email protected] – Cruise lines: What is the economic comparison between airport and cruise line shops? (sales per sqm, margin potential, investment needs, contract duration, etc.)

– Store digitalization: First Dufry duty free shops at airports are already fully digitalized. Has this refurbishment stopped for the time being?

– Partnership with Alibaba: What are the strategic plans and global opportunities?

– How much are the cost benefits from the full integration of Hudson?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 8,848.6 4,554.9 6,717.4 7,363.1 -5.9 EV/Sales 1.3 2.1 1.6 1.5 EBIT adj. 767.7 -354.9 350.7 543.8 -10.9 EV/EBIT adj. 15.0 -26.7 30.8 19.6 EPS adj. (CHF) 7.00 -6.12 1.42 3.61 -19.8 P/E adj. 13.1 - 36.6 14.4 Source: Company data, Baader Helvea Equity Research

Dufry

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 1.06 1.38 -0.53 -10.71 -3.99 -2.26 EPS adjusted (CHF) 6.84 6.83 7.00 -6.12 1.42 3.61 Dividend (CHF) 3.75 4.00 0.00 0.00 0.00 2.00 Book value (CHF) 62.40 64.43 62.30 54.19 54.17 55.92 Free cash flow (CHF) 8.51 11.75 37.13 -24.73 -21.65 -17.91 Avg. no. of shares (mn) 53.8 51.9 49.9 54.4 55.4 55.4 Market cap. (avg./current; CHF mn) 8,088.6 6,505.0 4,570.1 1,665.3 2,876.7 2,876.7 Enterprise value (CHF mn) 12,041.0 10,267.4 11,501.1 9,465.6 10,786.0 10,680.0 Valuation P/E adj. (x) 22.0 18.4 13.1 - 36.6 14.4 P/BV (x) 2.4 1.9 1.5 0.6 1.0 0.9 FCF/EV (%) 6.8 9.4 19.5 -12.7 -11.1 -9.3 FCF yield (%) (FCF/Mcap.) 5.7 9.4 40.5 -80.8 -41.7 -34.5 Dividend yield (%) 2.5 3.2 0.0 0.0 0.0 3.9 EV/Sales (x) 1.4 1.2 1.3 2.1 1.6 1.5 EV/EBITDA adj. (x) 12.0 5.2 3.6 31.6 36.0 35.6 EV/EBIT adj. (x) 28.8 13.3 15.0 -26.7 30.8 19.6 EV/CE (x) 1.6 1.4 1.7 1.2 1.4 1.4 ROCE/WACC adj. (x) 1.4 2.9 1.4 -1.2 - - Key company data Sales growth (%) 7.0 3.7 1.9 -48.5 47.5 9.6 EBITDA adj. growth (%) 7.7 96.0 60.2 -90.5 0.0 0.0 EBITDA adj. margin (%) 12.0 22.7 35.8 6.6 4.5 4.1 EBIT adj. margin (%) 5.0 8.9 8.7 -7.8 5.2 7.4 Net adj. margin (%) 4.4 4.1 3.9 -7.3 1.2 2.7 Free cash flow margin (%) 5.5 7.0 20.9 -29.5 -17.9 -13.5 Payout ratio (%) 355.1 289.0 0.0 0.0 0.0 -88.7 Gearing (%) (net debt/equity) 109.9 98.3 206.6 247.3 246.6 235.3 Net debt/EBITDA (x) 3.7 2.1 2.3 - - - Equity ratio (x) (equity/total assets) 33.6 35.6 23.3 21.4 21.0 21.5 Capital employed (CHF mn) 7,726.8 7,283.1 6,955.0 7,621.5 7,672.5 7,514.5 ROCE adj. (%) 3.0 6.1 3.1 -2.6 2.5 4.0 Income statement (CHF mn) Turnover 8,377.4 8,684.9 8,848.6 4,554.9 6,717.4 7,363.1 EBITDA 1,007.1 1,571.3 2,828.6 0.0 0.0 0.0 EBITDA adj. 1,007.1 1,974.3 3,163.5 300.0 300.0 300.0 EBIT 418.7 369.2 432.8 -654.9 50.7 243.8 EBIT adj. 418.7 772.2 767.7 -354.9 350.7 543.8 EBT 201.9 234.2 108.3 -1,004.9 -329.3 -136.2 Net profit after minorities 56.8 71.8 -26.5 -582.7 -221.1 -124.9 Net profit adj. 367.9 354.2 349.3 -332.7 78.9 200.1 Balance sheet (CHF mn) Non-current assets 7,772 7,201 11,263 11,423 11,596 11,828 thereof goodwill 2,669 2,602 2,611 2,611 2,611 2,611 Current assets 2,219 2,190 2,096 2,345 2,667 2,605 Total assets 9,991 9,391 13,359 13,767 14,262 14,432 Shareholders' equity 3,356 3,342 3,108 2,947 3,000 3,097 Total equity and liabilities 9,991 9,391 13,359 13,767 14,262 14,432 Net debt 3,687 3,286 6,421 7,289 7,397 7,289 Cash flow (CHF mn) Cash flow from operations 715.1 836.2 2,107.7 -1,204.8 -984.1 -746.9 of which change in working capital 47.9 -6.8 -1,221.4 576.9 5.0 -225.0 Cash flow from investments -257.4 -226.7 -255.5 -140.0 -215.0 -245.0 of which investment in fixed assets 295.9 246.0 345.5 170.0 265.0 305.0 Free cash flow 457.7 609.5 1,852.2 -1,344.8 -1,199.1 -991.9 Dividends paid 0.0 -201.7 -207.5 0.0 0.0 0.0 Cash flow from financing activities -401.3 -616.5 -1,836.9 1,066.1 1,291.1 1,049.9 Change in cash position 114.2 -26.8 15.3 -278.7 92.0 58.0 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Galenica Resilient business – But a changing environment Switzerland  Investment case: Galenica is the largest pharmacy retailer in Switzerland through a Non Food Retail network of over 500 own and partnered pharmacies. Galenica’s main competitive advantage Reuters: GALE.S Bloomberg: GALE SE is based on the integration of the entire distribution channel, from pre-wholesale to retail. Sell Galenica is operating in a regulated Swiss environment, with growth drivers relying on Closing price as of innovation and efficiency gains, and increasingly on acquisitions of independent pharmacies. 06-Jan-21 CHF 59.90 Target price CHF 55.00  We like the defensive character of the business; however, we adopted a conservative High/Low (12M) CHF 72.20/57.60 view due to a fast changing commercial environment, impacted by mandatory price cuts Market cap. CHF mn 2,939 on prescription drugs, an announced change of the prescription drugs distribution margins Enterprise value CHF mn 3,374 (LOAV), which should be implemented early 2021 (at the latest end-2021), and the shift Free float 97.0% to online sale channels. With about 10% of pharmacies retail revenues impacted by the Avg. daily turnover CHF mn 7.86 COVID-19 outbreak due to lockdowns and loss of foot traffic in airports and train stations,

Price relative to Index we believe the recent share price correction better reflects the current business risk.

 What to ask the management?

– What is the expected effect of the new management structure and which elements triggered the decision?

– Could you comment on the rapid testing offered by Amavita at airports and the current demand for those tests?

– What is Galenica’s view on the upcoming change in distribution margins (LOAV)

and what is the timeline for its implementation?

Performance (%) 1M 3M 6M – Could you comment on online sales trends and Galenica’s strategy to address Absolute 1.5 -6.1 -12.9 this competition? rel. SPI -2.1 -10.7 -18.3 rel. STOXX Europe 600 -1.6 -17.2 -22.4 – Could Galenica engage in telemedicine and is there interest from insurers rel. SXXP Retail -0.8 -15.5 -31.5 for partnerships?

Analyst: Bruno Bulic, Ph.D. +41 43 388 9225 [email protected]

Key financials Valuation ratios CHF mn 2018 2019 2020E 2021E CAGR (%) x 2018 2019 2020E 2021E Sales 3,165.0 3,301.2 3,396.4 3,459.9 3.0 EV/Sales 0.9 0.9 1.0 1.0 EBIT adj. 154.1 166.8 168.8 170.2 3.4 EV/EBIT adj. 18.8 17.4 20.9 19.8 EPS adj. (CHF) 2.54 2.56 2.58 2.60 0.9 P/E adj. 20.4 20.3 24.6 23.0 Source: Company data, Baader Helvea Equity Research

Galenica

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E Share data EPS reported (CHF) 2.43 3.00 2.53 2.53 2.55 EPS adjusted (CHF) 2.54 2.54 2.56 2.58 2.60 Dividend (CHF) 1.65 1.70 1.70 1.80 1.80 Book value (CHF) 17.56 19.03 20.37 21.49 21.60 Free cash flow (CHF) 2.02 1.75 2.35 0.94 2.37 Avg. no. of shares (mn) 49.1 49.1 49.1 49.1 49.1 Market cap. (avg./current; CHF mn) 2,258.4 2,536.4 2,548.2 3,115.9 2,939.2 Enterprise value (CHF mn) 2,578.0 2,890.2 2,897.6 3,524.9 3,374.1 Valuation P/E adj. (x) 18.1 20.4 20.3 24.6 23.0 P/BV (x) 2.6 2.7 2.5 3.0 2.8 FCF/EV (%) 3.0 2.6 3.5 1.4 3.5 FCF yield (%) (FCF/Mcap.) 4.4 3.4 4.5 1.5 4.0 Dividend yield (%) 3.6 3.3 3.3 2.8 3.0 EV/Sales (x) 0.8 0.9 0.9 1.0 1.0 EV/EBITDA adj. (x) 14.2 18.8 13.8 16.6 15.7 EV/EBIT adj. (x) 17.4 18.8 17.4 20.9 19.8 EV/CE (x) 2.3 2.5 2.3 2.7 2.5 ROCE/WACC adj. (x) - - - - - Key company data Sales growth (%) 4.4 0.8 4.3 2.9 1.9 EBITDA adj. growth (%) 9.8 -15.4 36.7 0.9 1.4 EBITDA adj. margin (%) 5.8 4.9 6.4 6.3 6.2 EBIT adj. margin (%) 4.7 4.9 5.1 5.0 4.9 Net adj. margin (%) 4.0 3.9 3.8 3.7 3.7 Free cash flow margin (%) 3.1 2.7 3.5 1.4 3.4 Payout ratio (%) 68.2 56.5 66.7 70.8 70.1 Gearing (%) (net debt/equity) 33.1 29.6 29.0 33.1 35.3 Net debt/EBITDA (x) 1.6 1.8 1.1 1.3 1.4 Equity ratio (x) (equity/total assets) 47.9 50.2 45.2 47.2 47.3 Capital employed (CHF mn) 1,107.3 1,145.3 1,243.1 1,330.0 1,346.0 ROCE adj. (%) 13.4 13.5 13.4 12.7 12.6 Income statement (CHF mn) Turnover 3,141.2 3,165.0 3,301.2 3,396.4 3,459.9 EBITDA 181.9 154.0 260.3 260.7 264.1 EBITDA adj. 181.9 154.0 210.4 212.4 215.4 EBIT 141.7 113.0 169.5 166.5 168.0 EBIT adj. 148.1 154.1 166.8 168.8 170.2 EBT 139.9 110.9 163.4 160.8 162.5 Net profit after minorities 118.8 147.6 125.0 124.8 126.1 Net profit adj. 124.4 124.8 126.1 127.3 128.5 Balance sheet (CHF mn) Non-current assets 1,010 1,079 1,387 1,412 1,426 thereof goodwill 633 691 755 755 755 Current assets 788 782 823 824 815 Total assets 1,798 1,860 2,210 2,236 2,241 Shareholders' equity 862 934 1,000 1,055 1,060 Total equity and liabilities 1,798 1,860 2,210 2,236 2,241 Net debt 285 276 290 349 374 Cash flow (CHF mn) Cash flow from operations 144.4 173.5 250.4 130.5 206.4 of which change in working capital 50.1 30.2 -13.4 88.6 16.0 Cash flow from investments -45.5 -87.6 -134.9 -84.3 -89.8 of which investment in fixed assets 54.0 47.5 53.6 46.0 48.0 Free cash flow 98.9 86.0 115.5 46.2 116.5 Dividends paid 0.0 -81.1 -83.9 -83.9 -88.8 Cash flow from financing activities -11.6 -77.3 -130.0 -36.0 -89.1 Change in cash position 87.3 8.7 -14.4 10.2 28.4 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Geberit Long-term prospects of outgrowing the industry remain fully intact Switzerland (even increased due to pandemic, ESG?)

Building Prod. & Materials  Investment case: Geberit has outgrown the construction industry (~2% p.a.) with an Reuters: GEBN.S Bloomberg: GEBN SE average organic growth of 4.2% since 2007. Despite our forecasts of a slowdown in 2020 Add with ~3% growth, we expect Geberit to increase sales in the medium term within the lower Closing price as of end of its guidance of 4-6% due to a) sustainable demand for its innovative, as of 2019 06-Jan-21 CHF 567.80 fully-integrated (Geberit + Sanitec) and high-quality products and b) its exposure to a more Target price CHF 600.00 resilient renovation business (2/3 of sales). 2020 will be pressured by lower growth and High/Low (12M) CHF 567.80/386.90 one-off marketing costs; however, in the medium term should strong pricing power, Market cap. CHF mn 19,878 Enterprise value CHF mn 20,723 innovation leadership and product portfolio enable cross- and upselling. Continuous efficiency Free float 100.0% improvements in production should sustain industry-leading EBITDA margins and increasing Avg. daily turnover CHF mn 56.91 returns on capital within the company’s target range of 28-30% and 25% respectively as well as strong operating cash flow (OCF-capex) generation of around CHF 600mn. Price relative to Index We see several catalysts over the next 12 months: 1) Europe’s “renovation law” as part of the Green Deal could lead to economic stimulus, indirectly affecting building renovation via retrofitting in homes, 2) tailwind from lower input costs yoy (particularly energy, aluminum, nickel), 3) potential structural trend towards increased home spending due to COVID-19, and 4) lower interest rates for longer. We expect the company to emerge much stronger from the crisis than its peers. A strong balance sheet and high free cash flow generation (2016-2019: ~20% of net sales) will enable management to make no compromises in terms of R&D and necessary growth capex (CHF ~160mn p.a.) and ultimately strengthen the so important customer relationship with wholesalers.

 What to ask the management? Performance (%) 1M 3M 6M Absolute 8.2 4.8 17.5 – Geberit has fared relatively well during the pandemic. What are the reasons for this rel. SPI 4.5 0.2 12.1 development? Has Geberit gained market share vs. competitors in 2020? rel. STOXX Europe 600 5.0 -6.3 8.0 rel. SXXP Construction 5.4 -4.8 5.0 – Please elaborate on R&D efforts and how long it generally takes for new innovations to reach market acceptance and consequently significant sales contributions.

– 2021 prospects in the residential sector for both new and renovation seem promising. Analyst: Do you share this view? Do you expect near-term positive effects on Geberit’s business Jorg Schirmacher, CFA from initiatives like the Green Deal and in particular the renovation law? +41 43 388 9267 [email protected] – The installer bottleneck in Germany looks tenacious. What would need to happen that the problem eases and is Geberit doing anything to support this?

– What is your strategy outside Europe (volume vs. profitable growth)? Will Geberit look differently in 10 years in terms of regional footprint?

– If you look at Geberit post the Sanitec acquisition: What are the achievements and misses?

– Do you see a risk of customers opting for cheaper deals with similar functionality and quality?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 3,082.9 2,913.3 3,062.3 3,192.0 1.2 EV/Sales 5.5 6.6 6.8 6.3 EBIT adj. 756.6 741.7 814.0 859.0 4.3 EV/EBIT adj. 22.5 26.0 25.5 23.6 EPS adj. (CHF) 17.97 17.44 19.37 20.80 5.0 P/E adj. 25.1 29.9 29.3 27.3 Source: Company data, Baader Helvea Equity Research

Geberit

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 14.34 16.40 17.97 17.44 19.37 20.80 EPS adjusted (CHF) 16.43 17.21 17.97 17.44 19.37 20.80 Dividend (CHF) 10.40 10.80 11.30 12.20 13.60 14.60 Book value (CHF) 49.95 47.94 52.74 52.64 52.43 58.91 Free cash flow (CHF) 13.39 16.23 18.02 18.11 18.55 19.93 Avg. no. of shares (mn) 36.8 36.4 36.0 35.5 35.0 34.5 Market cap. (avg./current; CHF mn) 16,279.4 15,472.6 16,263.6 18,535.2 19,877.5 19,593.6 Enterprise value (CHF mn) 17,071.1 16,319.3 17,003.7 19,316.6 20,723.3 20,260.9 Valuation P/E adj. (x) 26.9 24.7 25.1 29.9 29.3 27.3 P/BV (x) 8.9 8.9 8.6 9.9 10.8 9.6 FCF/EV (%) 2.3 2.7 3.1 3.1 3.1 3.4 FCF yield (%) (FCF/Mcap.) 3.0 3.8 4.0 3.5 3.3 3.5 Dividend yield (%) 2.3 2.5 2.5 2.3 2.4 2.6 EV/Sales (x) 5.9 5.3 5.5 6.6 6.8 6.3 EV/EBITDA adj. (x) 20.8 18.8 18.8 22.1 22.0 20.4 EV/EBIT adj. (x) 24.2 21.9 22.5 26.0 25.5 23.6 EV/CE (x) 5.7 5.6 5.7 6.6 6.9 6.7 ROCE/WACC adj. (x) 3.1 3.4 3.4 3.3 3.5 3.6 Key company data Sales growth (%) 3.5 5.9 0.1 -5.5 5.1 4.2 EBITDA adj. growth (%) 3.2 5.7 4.2 -3.2 7.9 5.3 EBITDA adj. margin (%) 28.2 28.2 29.3 30.0 30.8 31.1 EBIT adj. margin (%) 24.3 24.2 24.5 25.5 26.6 26.9 Net adj. margin (%) 20.8 20.3 21.0 21.3 22.1 22.5 Free cash flow margin (%) 16.9 19.2 21.1 22.1 21.2 21.6 Payout ratio (%) 72.5 65.8 62.9 69.9 70.2 70.2 Gearing (%) (net debt/equity) 26.3 31.8 21.5 22.3 24.2 11.1 Net debt/EBITDA (x) 0.6 0.6 0.5 0.5 0.5 0.2 Equity ratio (x) (equity/total assets) 49.1 49.8 51.0 50.6 49.4 51.0 Capital employed (CHF mn) 2,985.6 2,925.6 2,958.0 2,946.4 2,990.2 3,032.9 ROCE adj. (%) 20.4 22.1 22.3 21.3 22.9 23.8 Income statement (CHF mn) Turnover 2,908.3 3,080.5 3,082.9 2,913.3 3,062.3 3,192.0 EBITDA 772.0 867.8 903.9 875.2 944.1 993.8 EBITDA adj. 820.7 867.8 903.9 875.2 944.1 993.8 EBIT 621.7 707.6 756.6 741.7 814.0 859.0 EBIT adj. 706.1 744.1 756.6 741.7 814.0 859.0 EBT 612.3 687.2 742.8 733.0 807.3 854.3 Net profit after minorities 527.4 597.2 646.9 619.3 678.1 717.6 Net profit adj. 604.2 626.4 646.9 619.3 678.1 717.6 Balance sheet (CHF mn) Non-current assets 2,693 2,610 2,680 2,694 2,723 2,754 thereof goodwill 1,346 1,299 1,255 1,255 1,255 1,255 Current assets 1,050 892 1,046 997 993 1,231 Total assets 3,743 3,502 3,725 3,691 3,717 3,986 Shareholders' equity 1,837 1,745 1,899 1,869 1,836 2,033 Total equity and liabilities 3,743 3,502 3,725 3,691 3,717 3,986 Net debt 483 555 409 417 445 226 Cash flow (CHF mn) Cash flow from operations 640.4 747.5 834.0 793.0 806.9 852.2 of which change in working capital -18.6 -11.1 12.6 31.5 -8.0 -4.9 Cash flow from investments -147.8 -156.6 -185.0 -150.0 -157.7 -164.3 of which investment in fixed assets -159.0 -162.4 -166.9 -150.0 -157.7 -164.3 Free cash flow 492.6 590.9 649.0 643.0 649.2 687.9 Dividends paid -368.4 -380.8 -389.0 -401.2 -427.1 -469.3 Cash flow from financing activities -605.3 -714.1 -517.8 -651.2 -677.1 -469.3 Change in cash position -97.0 -130.5 125.9 -8.2 -27.9 218.6 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Givaudan An ideal compounding play delivering also in tough times Switzerland Investment case: 2020 (and the corresponding share price performance) was an excellent Chemicals showcase why Givaudan is considered a preferred option for investors looking for a defensive, Reuters: GIVN.S Bloomberg: GIVN SE high-quality, diversified model with a sustainable, profitable operational delivery also in Add the most adverse, challenging COVID-19/lockdown times. Once more, the business model Closing price as of of Givaudan showed the results of 1) highest entry barriers, 2) profits from economies of CHF 3,720.00 06-Jan-21 scale and an oligopolistic market structure and 3) a product quality, not price-driven competition. Target price CHF 4,000.00 High/Low (12M) CHF 4,075.00/2,681.00 We see significant further development potentials for Givaudan both with classic Fragrance Market cap. CHF mn 34,565 & Flavors (F&F) from (urbanization-driven) growth but also from market share gains. Enterprise value CHF mn 38,781 Additionally, we see attractive opportunities in adjacent categories (also with M&A) that Free float 80.0% offer at least similar financial variables (mid-single-digit growth, around 20% EBITDA margin), Avg. daily turnover CHF mn 86.61 even though defendability of these models might be less than in Flavors & Fragrances (F&F).

Price relative to Index Purely from an investment story perspective, Givaudan remains a key pick for us. After the strong share price (relative) outperformance of early 2020 during the lockdowns, Givaudan’s share price took a (deserved) breather in autumn. Givaudan now trades on >25x forward EV/EBITDA, >40x P/E and approx. 2.5% FCF/EV yield. We regard this as expensive in a Fast-Moving Consumer Goods or Chemicals stock and in a historical context as well (5-year average 19x, 30x and 3.25%), but this reflects in current times the reality of a stock seen as quality bond proxy generating a sustainable cash flow return. Consequently, we see valuation levels more driven by asset allocation considerations (than pure fundamentals). In a world in need to recover from (lasting) effects of the

COVID-19 impacts, we would expect loose monetary policies of national banks leading to a low (negative) interest rate environment to persist in coming quarters. Consequently, Performance (%) 1M 3M 6M we see limited reasons for a significant derating. Absolute 5.1 -6.6 4.7 rel. SPI 1.4 -11.2 -0.7 Fundamentally, we would see the end markets to continue on their growth paths rel. STOXX Europe 600 1.9 -17.6 -4.8 (i.e. urbanization, premiumization, organic and naturals demand, higher share of F&F in rel. SXXP Chemicals -0.9 -14.9 -8.8 products, higher share of the value chain being outsourced to F&F – i.e. integrated solutions)

and see the input cost environment as stable. A good environment to continue to deliver sustainable, profitable growth and attractive total shareholder value creation. Analyst: Purely from an investment story perspective, Givaudan remains a key pick for us. Andreas von Arx +41 43 388 9257  What to ask the management? [email protected] – Could you provide an update on the input cost situation?

– What do you see as net-net year-over-year profitability effects from COVID-19 lockdowns (i.e. lower travel costs and developments versus higher logistics costs)? Is this a significant

impact on 2021 accounts?

– In your recent strategy presentation you pointed to Natural Functional Ingredients (i.e. Coloring, Preservatives and Textures) and Natural Functional Ingredients (i.e. Microbiome, Botanicals) as key flavor areas: Could you rank those markets by size, growth and profitability profile and describe your current positioning?

– In Fragrance & Beauty, the strategy seems more focused on existing categories (Consumer Products, Fine Fragrance, Fragrance Ingredients and Active Beauty). Are there adjacent businesses you would like to enter in the medium term?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 6,203.0 6,330.2 6,579.4 6,875.6 3.5 EV/Sales 4.7 6.6 5.9 5.6 EBIT adj. 976.0 1,019.2 1,133.5 1,262.4 9.0 EV/EBIT adj. 29.6 41.2 34.2 30.5 EPS adj. (CHF) 93.25 96.16 106.37 118.75 8.4 P/E adj. 28.6 41.9 35.0 31.3 Source: Company data, Baader Helvea Equity Research

Givaudan

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 78.18 71.92 76.17 80.46 93.19 105.66 EPS adjusted (CHF) 92.18 80.29 93.25 96.16 106.37 118.75 Dividend (CHF) 58.00 60.00 62.00 65.00 70.00 75.00 Book value (CHF) 381.01 399.29 391.95 410.27 438.25 473.64 Free cash flow (CHF) 46.52 -101.49 26.38 29.33 107.00 111.56 Avg. no. of shares (mn) 9.3 9.3 9.3 9.3 9.3 9.3 Market cap. (avg./current; CHF mn) 18,440.8 21,190.6 24,766.1 37,472.8 34,564.6 34,564.6 Enterprise value (CHF mn) 20,046.8 24,453.6 28,854.1 41,973.8 38,781.0 38,496.1 Valuation P/E adj. (x) 21.5 28.4 28.6 41.9 35.0 31.3 P/BV (x) 5.2 5.7 6.8 9.8 8.5 7.9 FCF/EV (%) 1.2 -2.5 0.6 0.7 2.6 2.7 FCF yield (%) (FCF/Mcap.) 2.3 -4.5 1.0 0.7 2.9 3.0 Dividend yield (%) 2.9 2.6 2.3 1.6 1.9 2.0 EV/Sales (x) 4.0 4.4 4.7 6.6 5.9 5.6 EV/EBITDA adj. (x) 17.0 21.1 21.7 29.8 26.1 24.5 EV/EBIT adj. (x) 21.0 27.3 29.6 41.2 34.2 30.5 EV/CE (x) 3.8 3.4 3.6 4.8 4.5 4.4 ROCE/WACC adj. (x) 2.6 1.8 1.7 1.7 1.9 2.1 Key company data Sales growth (%) 8.3 9.4 12.2 2.1 3.9 4.5 EBITDA adj. growth (%) 10.5 -1.5 14.9 6.0 5.3 5.7 EBITDA adj. margin (%) 23.3 21.0 21.5 22.3 22.6 22.8 EBIT adj. margin (%) 18.9 16.2 15.7 16.1 17.2 18.4 Net adj. margin (%) 16.9 13.5 14.0 14.1 15.0 16.0 Free cash flow margin (%) 8.6 -17.1 3.9 4.3 15.1 15.1 Payout ratio (%) 74.8 84.1 82.0 81.4 75.7 71.5 Gearing (%) (net debt/equity) 30.4 76.7 101.1 107.4 93.5 80.1 Net debt/EBITDA (x) 0.9 2.5 2.8 2.9 2.6 2.2 Equity ratio (x) (equity/total assets) 48.4 40.0 35.0 35.8 37.1 38.8 Capital employed (CHF mn) 5,299.0 7,221.0 8,104.0 8,687.1 8,662.3 8,706.1 ROCE adj. (%) 15.0 10.7 10.0 9.8 11.2 12.4 Income statement (CHF mn) Turnover 5,051.0 5,527.0 6,203.0 6,330.2 6,579.4 6,875.6 EBITDA 1,089.0 1,145.0 1,275.0 1,363.3 1,455.3 1,539.6 EBITDA adj. 1,176.0 1,158.0 1,331.0 1,410.8 1,485.3 1,569.6 EBIT 869.0 883.0 920.0 971.7 1,103.5 1,232.4 EBIT adj. 956.0 896.0 976.0 1,019.2 1,133.5 1,262.4 EBT 795.0 772.0 808.0 857.7 993.5 1,126.4 Net profit after minorities 720.0 663.0 702.0 741.5 858.9 973.8 Net profit adj. 856.0 746.0 866.0 893.0 987.9 1,102.8 Balance sheet (CHF mn) Non-current assets 4,726 6,503 7,430 7,883 7,794 7,762 thereof goodwill 1,912 2,968 3,146 3,421 3,421 3,421 Current assets 2,583 2,774 2,966 2,773 3,165 3,578 Total assets 7,309 9,277 10,396 10,656 10,959 11,340 Shareholders' equity 3,538 3,710 3,640 3,810 4,070 4,399 Total equity and liabilities 7,309 9,277 10,396 10,656 10,959 11,340 Net debt 1,074 2,847 3,679 4,092 3,807 3,523 Cash flow (CHF mn) Cash flow from operations 861.0 916.0 1,136.0 1,166.4 1,256.8 1,311.0 of which change in working capital -113.0 -89.0 -15.0 -80.6 -63.9 -75.9 Cash flow from investments -429.0 -1,859.0 -891.0 -894.0 -263.2 -275.0 of which investment in fixed assets -244.0 -294.0 -320.0 -269.0 -263.2 -275.0 Free cash flow 432.0 -943.0 245.0 272.4 993.7 1,036.0 Dividends paid -515.5 -534.1 -553.1 -571.4 -599.1 -645.1 Cash flow from financing activities -248.0 848.0 -204.0 -571.4 -599.1 -645.1 Change in cash position 206.0 -111.0 29.0 -413.0 284.6 284.9 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

HBM Healthcare Uncoupling from biotech market fundamentals Investments  Investment case: HBM Healthcare Investments (HBMN) is a closed-end investment fund Switzerland founded in 2001 by Hoffmann-La Roche ex-CFO Henri B. Meier and partners. Other financials HBM Healthcare is to date the only large healthcare-dedicated fund to invest in both Reuters: HBMN.S Bloomberg: HBMN SE private and public equities, a strategy validated by over 60 trade sales or IPOs since 2010, Add enriched by further 10 in 2020, impressively contributing to HBM’s performance year-to-date. Closing price as of We already pointed at the effectiveness of HBM’s public/private investments tandem in 06-Jan-21 CHF 301.50 the past, which was again confirmed this year. We estimate that on average about 41% Target price CHF 264.00 of HBMN’s net gains over the last 8 years originated from the private equity (PE) portfolio. High/Low (12M) CHF 307.00/154.20 Market cap. CHF mn 2,098  In the calendar year 2020, HBM Net asset value per share (NAV) rose by 36.7% to Enterprise value CHF mn 2,196 CHF 293.21 as of 31 December 2020 (including distributions), while the share price Free float 83.0% increased by 40.5% to close at CHF 305, crossing the 300s mark for the first time. Avg. daily turnover CHF mn 1.79 During the same period, the Nasdaq Biotech Index gained 27%, showing HBM’s clear

Price relative to Index outperformance versus the biotech benchmark, further accentuated by a successful USD currency exposure hedge.

 In 2020, HBM successfully listed 8 private companies (Galecto, Everest Therapeutics, C4 Therapeutics, Harmony, Cathay, iTeos Therapeutics, ALX Oncology, Arcutis). In July 2020, the successful IPO of HBM’s largest private equity position, Cathay Industrial Biotech, which now supports about 14% of HBM’s net asset value.

 What to ask the management?

– What is your short-term view on your main public equities positions (Cathay, Y-Mabs,

Harmony)? Performance (%) 1M 3M 6M – Do you see a risk to have the biotech sector under pressure following discussions on Absolute 4.9 9.6 21.1 drug and vaccines pricing? rel. SPI 1.2 5.0 15.7 rel. STOXX Europe 600 1.7 -1.4 11.6 – USD/CHF: With 64% exposure to the USD, what is the net effect of HBM’s currency rel. SXXP Financial SVS -0.1 -4.9 8.0 hedging strategy?

– What are, in your view, the major opportunities in the healthcare sector going forward (Medtech, Biotech, regenerative diseases, neuroscience, big data)? Analyst: Bruno Bulic, Ph.D. – After the recent wave of successful IPOs/trade sales, what could be HBM’s outlook +41 43 388 9225 for 2021 regarding listing appetite? [email protected]

Key financials Valuation ratios CHF mn 2019/20 2020/21E 2021/22E 2022/23E CAGR (%) x 2019/20 2020/21E 2021/22E 2022/23E Sales 0.0 0.0 0.0 0.0 - EV/Sales - - - - EBIT adj. 185.1 264.2 152.3 181.7 -0.6 EV/EBIT adj. 8.1 8.3 14.4 12.1 EPS adj. (CHF) 26.26 37.64 21.56 25.78 -0.6 P/E adj. 7.7 8.0 14.0 11.7 Source: Company data, Baader Helvea Equity Research

HBM Healthcare Investments

Key data

FY 31 Mar. 2017/18 2018/19 2019/20 2020/21E 2021/22E 2022/23E Share data EPS reported (CHF) 16.55 30.05 26.26 37.64 21.56 25.78 EPS adjusted (CHF) 16.55 30.05 26.26 37.64 21.56 25.78 Dividend (CHF) 6.96 7.50 7.71 8.81 9.28 0.00 Book value (CHF) 165.39 189.49 208.25 238.19 251.21 267.98 Free cash flow (CHF) 8.12 7.06 8.03 7.92 9.03 9.50 Avg. no. of shares (mn) 7.0 7.0 7.0 7.0 7.0 7.0 Market cap. (avg./current; CHF mn) 864.9 1,139.8 1,405.3 2,097.5 2,097.5 2,097.5 Enterprise value (CHF mn) 960.0 1,237.0 1,502.5 2,195.4 2,196.2 2,197.0 Valuation P/E adj. (x) 7.5 5.5 7.7 8.0 14.0 11.7 P/BV (x) 0.7 0.9 1.0 1.3 1.2 1.1 FCF/EV (%) 2.6 2.2 2.5 2.5 2.9 3.0 FCF yield (%) (FCF/Mcap.) 6.6 4.3 4.0 2.6 3.0 3.2 Dividend yield (%) 5.6 4.6 3.8 2.9 3.1 0.0 EV/Sales (x) ------EV/EBITDA adj. (x) 8.1 5.8 8.1 8.3 14.4 12.1 EV/EBIT adj. (x) 8.1 5.8 8.1 8.3 14.4 12.1 EV/CE (x) ------ROCE/WACC adj. (x) ------Key company data Sales growth (%) ------EBITDA adj. growth (%) -15.0 78.8 -12.5 42.7 -42.4 19.3 EBITDA adj. margin (%) ------EBIT adj. margin (%) ------Net adj. margin (%) ------Free cash flow margin (%) ------Payout ratio (%) 42.0 25.0 29.3 23.4 43.1 0.0 Gearing (%) (net debt/equity) 8.2 7.4 6.7 5.9 5.6 5.3 Net debt/EBITDA (x) 0.8 0.5 0.5 0.4 0.6 0.5 Equity ratio (x) (equity/total assets) 91.9 92.7 93.3 94.1 94.4 94.8 Capital employed (CHF mn) 0.0 0.0 0.0 0.0 0.0 0.0 ROCE adj. (%) ------Income statement (CHF mn) Turnover 0.0 0.0 0.0 0.0 0.0 0.0 EBITDA 118.3 211.5 185.1 264.2 152.3 181.7 EBITDA adj. 118.3 211.5 185.1 264.2 152.3 181.7 EBIT 118.3 211.5 185.1 264.2 152.3 181.7 EBIT adj. 118.3 211.5 185.1 264.2 152.3 181.7 EBT 115.9 209.1 182.7 261.9 150.0 179.4 Net profit after minorities 115.9 209.1 182.7 261.9 150.0 179.4 Net profit adj. 115.9 209.1 182.7 261.9 150.0 179.4 Balance sheet (CHF mn) Non-current assets 1,254 1,417 1,546 1,755 1,846 1,964 thereof goodwill ------Current assets 7 5 6 5 5 4 Total assets 1,260 1,422 1,552 1,760 1,851 1,968 Shareholders' equity 1,158 1,318 1,449 1,657 1,748 1,864 Total equity and liabilities 1,260 1,422 1,552 1,760 1,851 1,968 Net debt 95 97 97 98 99 99 Cash flow (CHF mn) Cash flow from operations -3.1 -2.9 -4.2 -3.5 -3.5 -3.5 of which change in working capital 0.0 0.0 0.0 0.0 0.0 0.0 Cash flow from investments 60.0 52.0 60.0 58.6 66.3 69.6 of which investment in fixed assets 0.0 0.0 0.0 0.0 0.0 0.0 Free cash flow 56.9 49.1 55.8 55.1 62.8 66.1 Dividends paid -40.8 -48.7 -52.2 -53.6 -61.3 -64.6 Cash flow from financing activities -56.4 -51.0 -54.5 -55.9 -63.6 -66.9 Change in cash position 0.4 -1.8 1.4 -0.8 -0.8 -0.8 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

HIAG A real estate developer successfully turned around – What are next steps? Switzerland  Investment case: Looking at the last six months, we would argue it becomes more and Real Estate more visible to investors that the team around (new) CEO Mr. Feusi delivers on another Reuters: HIAG.S Bloomberg: HIAG SE trend as compared to his predecessor; we point to 1H results ahead of expectations, Add equity placement, asset disposal, positive revaluation gains, clean-up on legacy issues Closing price as of ahead of cost guidance, etc. We expect this journey to lead to good FY20 results ahead 06-Jan-21 CHF 107.00 of consensus forecasts. We see limited reasons why HIAG should not deliver on its short Target price CHF 113.00 to medium-term pipeline, potentially leading to continued positive revaluations, High/Low (12M) CHF 117.00/73.80 offsetting pressures from the COVID-19 lockdown/recession realities and putting HIAG Market cap. CHF mn 1,033 relatively in a better position than yield-focused peers. We expect Mr. Feusi to continue to Enterprise value CHF mn 1,814 report progress on the attractive medium to long-term development projects (Cham, Pratteln, Free float 35.7% Dornach, Zürich-Altstetten and Lancy), many with residential focus. Avg. daily turnover CHF mn 0.24 For investors looking for a Swiss diversification option besides a quality/low-risk PSP, Price relative to Index we continue to recommend HIAG (especially with the good results momentum). On the current CHF 100 share price level, HIAG continues to trade roughly on adjusted NAV. We continue to believe that this does not “fairly” reflect the opportunities of the CHF 0.6bn development portfolio. HIAG, with a good FY20 starting point, surely looks on track to deliver approx. CHF 100mn revaluation gains from its developments for the 2020-2025 period (on CHF 0.85bn market cap.) – does this not deserve a valuation premium?

See our 9th December update “Delivering on the turnaround and developments” for a full set of updated financials based on recent developments like: 1) The recent December announcement of lower operational costs and the successful disposal (with a gain) of the

chemical production unit (mid single-digit CHF mn positive in 2020) at the Rohner site in Pratteln, Performance (%) 1M 3M 6M 2) the November sale of the St. Margrethen site to Stadler (approx. CHF 25mn) and Absolute 7.2 15.6 16.1 3) the 5% capital/CHF 33mn gross proceeds share placement in October. For those rel. SPI 3.6 11.0 10.7 interested in the HIAG investment case, we recommend our 60-page initiation report from rel. STOXX Europe 600 4.1 4.5 6.6 July 2020 “Back to more healthy roots and to a brighter future”. rel. SXXP Real Estate 5.7 8.5 9.1

 What to ask the management?

– Given Mr. Feusi’s experience in real estate valuation (former Wüest & Partner CEO), Analyst: what is your view on recent developments in Swiss real estate (i.e. transaction market, Andreas von Arx +41 43 388 9257 revaluation perspectives, category and regional outlook)? [email protected] – How do you see the medium-term outlook for office demand in the new times of increased

use of home offices? How do you see the demand for retail space? Do you expect a change in trend for commercial space given the anticipated economic recession effects (i.e. more bankruptcies)?

– Do you still feel comfortable with approx. CHF 100mn revaluation gain guidance for your short-to-medium term projects?

– Which of your larger long-term projects should investors excite most? On which one can one expect news flow in the nearer future?

– Can investors expect updates to the board composition to increase independence from the majority shareholder, now with increased free float and post the capital increase?

– What is management’s thinking about a larger capital injection in 2021 (to finance the product pipeline)?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) % 2019 2020E 2021E 2022E Net income -70.7 58.7 29.4 35.6 - NAV prem./discount 16.6 0.6 8.0 5.5 FFOps (CHF) -3.61 2.47 2.08 2.22 - FFO yield -3.3 2.5 1.9 2.1 NAVps (CHF) 92.64 99.42 99.07 101.40 3.1 Dividend yield 0.0 2.0 1.9 2.1 Source: Company data, Baader Helvea Equity Research

HIAG

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS adjusted (CHF) 7.15 7.60 -8.85 7.24 3.25 3.68 Indirect investment result (CHF) 0.00 0.00 0.00 0.00 0.00 0.00 EPS reported (CHF) 7.15 7.60 -8.85 7.24 3.25 3.68 FFOps (CHF) 3.99 2.25 -3.61 2.47 2.08 2.22 Dividend (CHF) 3.80 3.90 0.00 2.00 2.00 2.20 Book value (CHF) 94.64 97.82 84.05 90.18 90.51 92.20 NAV adj. (CHF) 103.83 108.15 92.64 99.42 99.07 101.40 Number of shares (outstanding; mn) 8.1 8.1 8.1 8.4 9.7 9.7 Share price (avg./current; CHF) 120.90 116.50 108.00 100.00 107.00 107.00 Market cap. (avg./current; CHF mn) 973.2 937.8 869.4 843.3 1,032.6 1,032.6 Enterprise value (CHF mn) 1,463.4 1,605.3 1,676.8 1,652.8 1,814.2 1,917.0 Valuation P/E adj. (x) 16.9 15.3 - 13.8 32.9 29.1 FFO yield (%) 3.3 1.9 -3.3 2.5 1.9 2.1 Dividend yield (%) 3.1 3.3 0.0 2.0 1.9 2.1 Implied yield (EBITDA/EV) (%) 2.7 1.7 -1.3 1.8 1.4 1.5 P/NAV (x) 1.16 1.08 1.17 1.01 1.08 1.06 P/BV (x) 1.28 1.19 1.28 1.11 1.18 1.16 ROCE/WACC (x) 0.65 0.25 -0.30 0.33 0.35 0.35 (EV/CE)/(ROCE/WACC) (x) 1.59 4.00 -3.39 2.95 2.80 2.71 Key company data Rental income growth (%) 6.5 4.3 8.2 -6.2 1.7 7.0 EBITDA growth (%) 10.5 -30.0 -177.5 -235.4 -10.8 10.8 FFO growth (%) 9.5 -43.8 -260.0 -169.6 -6.5 14.4 FFO per share growth (%) 9.0 -43.6 -260.4 -168.4 -15.8 6.7 DPS growth (%) 5.6 2.6 -100.0 - 0.0 10.0 EBITDA margin adj. (%) 71.4 47.9 -34.3 49.5 43.4 44.9 ROE recurring (%) 0.0 0.0 0.0 0.0 0.0 0.0 Net gearing (%) 64.4 85.0 120.1 106.4 89.5 99.4 Net loan-to-value (%) 42.3 47.5 53.2 52.2 48.8 50.9 Equity ratio (%) 54.4 49.1 41.3 40.8 47.8 45.6 Interest cover (x) 9.0 5.5 -3.6 3.6 3.8 5.7 Income statement (CHF mn) Total revenues 67.0 66.2 70.3 67.4 72.3 74.7 Gross rental income 55.8 58.2 63.0 59.1 60.1 64.3 Net rental income 45.5 44.7 17.2 48.9 42.7 46.0 EBITDA 39.9 27.9 -21.6 29.3 26.1 28.9 EBIT 71.4 79.9 -78.9 75.7 41.4 49.2 EBT 66.6 70.3 -86.5 68.1 34.4 44.1 EBT adjusted 66.6 70.3 -86.5 68.1 34.4 44.1 Net profit after minorities 57.5 60.9 -70.7 58.7 29.4 35.6 Funds from operations (FFO) 32.1 18.0 -28.9 20.1 18.8 21.5 Balance sheet (CHF mn) Investment property 1,252 1,476 1,563 1,661 1,730 1,855 Non-current assets 1,302 1,523 1,572 1,670 1,739 1,864 Cash and equivalents 39 35 24 57 63 60 Current assets 96 76 56 194 87 86 Total assets 1,398 1,599 1,629 1,865 1,826 1,950 Equity 761 783 672 761 873 890 Interest bearing debt 529 702 831 867 845 945 Total equity and liabilities 1,398 1,599 1,629 1,865 1,826 1,950 Net debt 490 667 807 810 782 884 Cash flow (CHF mn) Cash flow from operating activities 25.6 19.1 19.8 3.1 9.6 -2.0 Cash flow from investing activities -21.9 -145.4 -109.6 -41.4 -53.7 -105.0 Free cash flow 3.7 -126.3 -89.9 -38.3 -44.1 -107.0 Dividend paid -28.9 -30.5 -31.2 0.0 -18.1 -19.3 Cash flow from financing activities -21.1 121.1 96.0 65.4 61.2 80.8 Changes in cash position 62.8 38.9 34.5 23.9 57.5 62.9 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Idorsia A rich pipeline and approaching first product to the market Switzerland  Investment case: Idorsia began its operations in 2017 after the demerger from Actelion Pharma following its acquisition by J&J, with registered shares of Idorsia being listed on the Reuters: IDIA.S Bloomberg: IDIA SE SIX Swiss Exchange in June 2017. In essence, Idorsia condensed most of Actelion’s Sell early-stage pipeline and intellectual property assets. Idorsia has an advanced pipeline, Closing price as of with one drug candidate ready to file, three compounds in phase III, four in phase II and CHF 25.50 06-Jan-21 an emerging group of early drug candidates in phase I. On the other hand, it also has a very Target price CHF 19.00 large organization with respect to revenues, resulting into an on average CHF 450mn High/Low (12M) CHF 33.18/20.35 Market cap. CHF mn 4,245 annual cash burn. Enterprise value CHF mn 4,027  Key to Idorsia’s near-term development and its return to profitability is daridorexant, a drug Free float 66.3% candidate which successfully completed two phase III studies in insomnia and which could Avg. daily turnover CHF mn 12.81 be filed with the FDA immediately. We estimate daridorexant peak sales at CHF 378mn

Price relative to Index (consensus CHF 900mn). Last June, Eisai launched Dayvigo in the U.S. (blue sky consensus peak sales est. USD 1.3bn), a sleeping pill in the same drug category as Idorsia’s daridorexant. With the full-year results on 2 February 2021, Eisai should lift the veil on the real market potential of this class of drugs.

 What to ask the management?

– Considering Belsomra label extension in Alzheimer’s disease (AD), would Idorsia consider starting clinical studies in AD and depression and how much additional value could those indications unlock for daridorexant?

– After the completion of the two phase III studies in insomnia, what would be the R&D Performance (%) 1M 3M 6M run rate for 2021E and could you provide an indication on daridorexant launch costs Absolute -6.2 5.9 -19.7 for 2021? rel. SPI -9.8 1.3 -25.1 rel. STOXX Europe 600 -9.3 -5.2 -29.2 – Could you provide an update on Aprocitentan clinical studies status; should we expect rel. SXXP Health Care -6.8 7.0 -13.5 a delay after the second COVID-19 wave this winter?

– Considering the recent trend at the FDA to favor lower doses (see Galapagos issues), how comfortable are you to see the higher 50mg daridorexant dose effectively supported Analyst: by the agency? Bruno Bulic, Ph.D. +41 43 388 9225 [email protected]

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 23.8 67.9 21.6 56.3 33.2 EV/Sales 120.9 50.5 186.5 79.4 EBIT adj. -482.4 -395.7 -399.5 -425.6 -4.1 EV/EBIT adj. -6.0 -8.7 -10.1 -10.5 EPS adj. (CHF) -3.76 -2.84 -2.46 -2.61 -11.5 P/E adj. - - - - Source: Company data, Baader Helvea Equity Research

Idorsia

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) - -3.10 -3.76 -2.84 -2.46 -2.61 EPS adjusted (CHF) - -3.10 -3.76 -2.84 -2.46 -2.61 Dividend (CHF) - 0.00 0.00 0.00 0.00 0.00 Book value (CHF) - 5.27 1.25 4.23 1.41 -1.12 Free cash flow (CHF) - -2.58 -4.09 -3.76 -2.36 -2.61 Avg. no. of shares (mn) - 124.8 131.2 148.8 166.5 166.5 Market cap. (avg./current; CHF mn) - 2,745.1 3,017.3 4,045.6 4,244.7 4,244.7 Enterprise value (CHF mn) - 2,096.3 2,879.8 3,427.8 4,027.4 4,470.8 Valuation P/E adj. (x) ------P/BV (x) - 4.2 18.4 6.4 18.1 -22.8 FCF/EV (%) - -12.7 -16.7 -17.6 -9.7 -9.7 FCF yield (%) (FCF/Mcap.) - -11.7 -17.8 -13.8 -9.2 -10.2 Dividend yield (%) - 0.0 0.0 0.0 0.0 0.0 EV/Sales (x) - 34.6 120.9 50.5 186.5 79.4 EV/EBITDA adj. (x) - -6.0 -6.2 -9.0 -10.5 -10.9 EV/EBIT adj. (x) - -5.6 -6.0 -8.7 -10.1 -10.5 EV/CE (x) - 14.1 19.3 24.9 28.0 26.9 ROCE/WACC adj. (x) - -44.9 -58.0 -1.5 -50.0 -45.9 Key company data Sales growth (%) - - -60.7 185.2 -68.2 160.5 EBITDA adj. growth (%) - - 31.6 -17.6 1.0 6.8 EBITDA adj. margin (%) - -578.3 -1937.3 -559.7 -1777.9 -728.8 EBIT adj. margin (%) - -612.2 -2025.4 -582.5 -1849.7 -756.4 Net adj. margin (%) - -639.8 -2037.0 -624.3 -1894.5 -773.6 Free cash flow margin (%) - -530.6 -2253.9 -823.3 -1815.2 -773.2 Payout ratio (%) - 0.0 0.0 0.0 0.0 0.0 Gearing (%) (net debt/equity) - -101.4 -115.9 -105.8 -113.0 -95.8 Net debt/EBITDA (x) - 1.9 0.4 1.8 0.7 -0.4 Equity ratio (x) (equity/total assets) - 46.7 16.4 42.9 21.7 -27.5 Capital employed (CHF mn) - 148.5 149.5 137.9 143.7 166.5 ROCE adj. (%) - -249.9 -322.6 -8.6 -278.0 -255.6 Income statement (CHF mn) Turnover - 60.6 23.8 67.9 21.6 56.3 EBITDA - -350.5 -461.5 -380.2 -384.0 -410.1 EBITDA adj. - -350.5 -461.5 -380.2 -384.0 -410.1 EBIT - -371.1 -482.4 -395.7 -399.5 -425.6 EBIT adj. - -371.1 -482.4 -395.7 -399.5 -425.6 EBT - -387.8 -485.2 -424.1 -409.2 -435.3 Net profit after minorities - -387.8 -485.2 -424.1 -409.2 -435.3 Net profit adj. - -387.8 -485.2 -424.1 -409.2 -435.3 Balance sheet (CHF mn) Non-current assets - 465 229 211 216 225 thereof goodwill ------Current assets - 941 775 1,258 868 450 Total assets - 1,407 1,004 1,468 1,084 675 Shareholders' equity - 658 164 630 235 -186 Total equity and liabilities - 1,407 1,004 1,468 1,084 675 Net debt - -667 -190 -666 -266 178 Cash flow (CHF mn) Cash flow from operations - -352.8 -462.0 -356.7 -372.1 -412.1 of which change in working capital - 2.4 0.4 2.2 2.2 2.8 Cash flow from investments - 31.2 -74.8 -202.6 -20.0 -23.0 of which investment in fixed assets - -11.6 -18.8 -5.6 -20.0 -23.0 Free cash flow - -321.6 -536.8 -559.3 -392.1 -435.1 Dividends paid ------Cash flow from financing activities - 497.8 1.3 864.4 0.0 667,646.0 Change in cash position - 176.1 -535.6 304.8 -392.1 667,210.9 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 LafargeHolcim Baader Europe Cement & Aggregates / Switzerland Getting closer to its customers

Buy Upside: 37.5% Our investment view Target Price (6 months) CHF 70.8 Share Price CHF 51.5 Formed in 2015 by the merger of Lafarge and Holcim, LafargeHolcim is a world- Market Cap. CHFM 31,733 renowned Swiss construction materials company which has a presence across 80 Price Momentum STRONG countries and holds leading positions throughout the world. Beyond Europe, it has Extremes 12Months 27.5 51.5 a significant presence in Asia through the listed companies ACC (India; 64% Fundamental Strength 4 /10 ownership), Ambuja (India; 37%) and Huaxin (China; 42%). Its total market share Bloomberg LHN SW Equity is about 8% in the world ex China. In 2017, it announced its 2022 strategy in Reuters LHN.S which it is simplifying the company’s structure and reducing costs. It also introduced a new segment, Solutions & Products, to take advantage of products and applications that are closer to the customers. Since then, the company has been growing this business line and we can expect further divestments in the core businesses in order to shift its focus onto Solutions & Products (is Sika’s ex-CEO now trying to make LafargeHolcim a brand name like Sika?).

In FY20, the company was hit by the Coronavirus pandemic but it was quick to announce its action plan “Health, Cost & Cash” at the beginning. This cost savings initiative, along with higher branded cement sales and positive pricing, helped the company to manage its earnings well, with FY20 EBITDA expected to be somewhat in line with that of FY19. The company’s balance sheet is still strong Analyst : Sejal VARSHNEY with an adjusted net debt/EBITDA below 2x. Hence, we can expect some bolt-on acquisitions, but no major ones. The company is well ahead of its cash conversion Equity Sales target for 2022 and may be able to achieve a FCF/EBITDA >40% before then. [email protected] Frankfurt +49 69 1388 1357 While a boost in infrastructure activities worldwide will work in favour of London +44 20 7054 7100 LafargeHolcim, FX and news related to the Syrian litigation will continue to be the Munich +49 89 5150 1850 Zurich +41 43 388 9200 biggest risks in 2021. New York +1 212 935 5150

What to ask the management? PERF 1w 1m 3m 12m LafargeHolcim 5.96% 7.02% 20.7% 2.83%

- What is your view regarding phase IV of EU ETS? Are you long on emission Building Prod. & Materials 6.31% 6.93% 16.3% 6.13% rights until when? STOXX 600 1.54% 3.45% 11.1% -2.45% - In H2 20, the demand for branded cement was high, which helped you boost margins. Do you expect the positive momentum from demand to continue in 2021? Sector Opinion Overweight If not, then can we expect the margins to be lower, given that tailwinds from lower Strongest upside Vicat energy prices will also not be there? Worst potential CRH - Can you shed some light on your Chinese business? Is there any stimulus Last updated: 12/11/2020 12/19A 12/20E 12/21E 12/22E provided by Chinese government that would benefit this sector? Also, in your Adjusted P/E (x) 13.4 14.7 16.7 15.6 opinion, what are the implications of the government’s recent announcement about Dividend yield (%) 4.13 4.71 3.88 3.88 carbon neutrality by 2060 target? EV/EBITDA(R) (x) 6.51 6.49 7.27 6.99 - What led to the significant margin improvement in MEA lately? Can we expect Adjusted EPS (CHF) 3.62 2.88 3.08 3.30 further margin improvements in FY21? Growth in EPS (%) 15.1 -20.3 6.89 7.29 - Given that you have a strong balance sheet, what will your capital allocation Dividend (CHF) 2.00 2.00 2.00 2.00 strategy be? Would higher shareholder remuneration via share buy-backs or Sales (CHFM) 26,722 23,211 24,658 25,391 higher dividends be the priority? EBIT margin (%) 24.6 15.5 15.0 15.3 Attributable net profit 2,246 1,769 1,890 2,028 (CHFM) ROE (after tax) (%) 8.10 6.56 7.29 7.49

Gearing (%) 41.6 38.0 34.3 32.1 Sales by Geography Valuation Summary

Benchmarks Value Weight Largest comparables

DCF CHF 75.9 35% CRH NAV/SOTP per share CHF 80.6 20% Heidelbergcement EV/Ebitda CHF 55.9 20% Buzzi Vicat P/E CHF 46.7 10% LafargeHolcim Maroc Dividend Yield CHF 96.7 10% P/Book CHF 53.0 5% TARGET PRICE CHF 70.8 100%

Consolidated P&L Accounts 12/19A 12/20E 12/21E Balance Sheet 12/19A 12/20E 12/21E Sales CHFM 26,722 23,211 24,658 Goodwill CHFM 13,039 12,848 13,105 Change in sales % -2.71 -13.1 6.23 Total intangible CHFM 13,683 13,431 13,700 Change in staff costs % -7.46 -3.74 6.08 Tangible fixed assets CHFM 27,189 25,524 26,034 EBITDA CHFM 6,582 5,947 6,055 Financial fixed assets CHFM 3,337 3,216 3,280 EBITDA(R) margin % 24.6 25.6 24.6 WCR CHFM -456 -931 -777 Depreciation CHFM -2,479 -2,350 -2,360 Other assets CHFM 1,974 2,013 2,054 Underlying operating profit CHFM 4,103 3,597 3,695 Total assets (net of short term liab.) CHFM 48,341 44,540 45,604 Operating profit (EBIT) CHFM 3,833 3,597 3,695 Ordinary shareholders' equity CHFM 28,566 25,380 26,478 Net financial expense CHFM -711 -800 -850 Quasi Equity & Preferred CHFM of which related to pensions CHFM -34.5 -58.9 Minority interests CHFM 2,933 2,760 2,815 Exceptional items & other CHFM 185 0.00 0.00 Provisions for pensions CHFM 1,413 1,859 1,801 Corporate tax CHFM -806 -826 -754 Other provisions for risks and liabilities CHFM 1,954 1,993 2,033 Equity associates CHFM 12.0 50.0 55.0 Total provisions for risks and liabilities CHFM 3,367 3,853 3,833 Minority interests CHFM -267 -253 -255 Tax liabilities CHFM 2,475 2,525 2,575 Adjusted attributable net profit CHFM 2,188 1,769 1,890 Other liabilities CHFM 857 874 892 NOPAT CHFM 2,884 2,592 2,682 Net debt (cash) CHFM 10,143 9,149 9,011 Cashflow Statement Total liab. and shareholders' equity CHFM 48,341 44,540 45,604 EBITDA CHFM 6,582 5,947 6,055 Capital Employed Change in WCR CHFM 290 475 -154 Capital employed after depreciation CHFM 43,753 41,240 42,237 Actual div. received from equity holdi... CHFM 234 150 170 Profits & Risks Ratios Paid taxes CHFM -711 -826 -754 ROE (after tax) % 8.10 6.56 7.29 Exceptional items CHFM -475 -500 -500 ROCE % 6.59 6.28 6.35 Other operating cash flows CHFM -542 -500 -500 Gearing (at book value) % 41.6 38.0 34.3 Total operating cash flows CHFM 5,378 4,747 4,317 Adj. Net debt/EBITDA(R) x 1.54 1.54 1.49 Capital expenditure CHFM -1,534 -1,126 -1,526 Interest cover (x) x 6.10 4.89 4.89 Total investment flows CHFM -219 -1,126 -1,526 Valuation Ratios Net interest expense CHFM -711 -800 -850 Dividends (parent company) CHFM -322 -1,228 -1,228 Reference P/E (benchmark) x 13.4 14.7 16.7 Dividends to minorities interests CHFM -114 -333 -333 Free cash flow yield % 10.5 10.8 6.14 New shareholders' equity CHFM -108 -300 -300 P/Book x 1.04 1.03 1.19 Total financial flows CHFM -3,181 -2,485 -2,796 Dividend yield % 4.13 4.71 3.88 Change in cash position CHFM 1,754 1,136 -6.25 EV Calculation Free cash flow (pre div.) CHFM 3,133 2,821 1,940 Market cap CHFM 29,725 26,072 31,617 Per Share Data + Provisions CHFM 3,367 3,853 3,833

No. of shares net of treas. stock (year... Mio 614 614 614 + Unrecognised acturial losses/(gains) CHFM 0.00 0.00 0.00 Number of diluted shares (average) Mio 605 614 614 + Net debt at year end CHFM 10,143 9,149 9,011 Benchmark EPS CHF 3.62 2.88 3.08 + Leases debt equivalent CHFM 0.00 0.00 0.00 Restated NAV per share CHF - Financial fixed assets (fair value) CHFM 3,337 3,216 3,280 Net dividend per share CHF 2.00 2.00 2.00 + Minority interests (fair value) CHFM 2,933 2,760 2,815 = EV CHFM 42,831 38,617 43,996 EV/EBITDA(R) x 6.51 6.49 7.27 EV/Sales x 1.60 1.66 1.78

Analyst : Sejal Varshney, Changes to Forecasts : 12/11/2020.

This research publication was completed at 10:02 AM (CET) on 07-01-2021. In relation to the author of this research publication the General statements (Section A) contained in the disclaimer at the end of this document are supplemented as follows: The author of this publication is AlphaValue who, pursuant to a cooperation agreement with Baader Bank provides certain research & distribution services to the Baader Bank Group. AlphaValue does not have nor seek any business with companies covered in AlphaValue Research paid by subscription. As a result, investors can be confident that there is no conflict of interest that could affect the objectivity of AlphaValue Research. © 2021, AlphaValue All rights reserved. This publication is strictly for subscriber’s own, non-commercial, internal use. No part of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product. Baader Helvea Equity Research COMPANY FLASH

8 January 2021

OC Oerlikon The reorganization of Surface Solutions is key Switzerland  Investment case: The objective of the management in the last major strategic overhaul Capital Goods 2015 was to transform Oerlikon from an industrial conglomerate to a company with a Reuters: OERL.S Bloomberg: OERL SE defined focus on Surface Solutions, advanced materials and materials processing. Reduce The CEO stated: ”The goal is to create a pure play Surface Solution company”. Closing price as of Therefore, portfolio management played an important role in the history and the valuation 06-Jan-21 CHF 9.27 of Oerlikon. The last big step was the divestment of Drive Systems in 2019, resulting in Target price CHF 7.00 an extra dividend. Despite the pure play strategy, we do not expect a divestment High/Low (12M) CHF 11.32/5.75 of Manmade Fibers in the next two years. Market cap. CHF mn 3,145 Enterprise value CHF mn 3,228  The near-term task is to reorganize Surface Solutions to reach the targeted profitability level. Free float 59.0% Main customer industries are automotive, aerospace, energy and tooling. In 2019, Avg. daily turnover CHF mn 6.66 the management already started with a comprehensive program to lower the cost base and streamline the structure in Surface Solutions. Until the end of 3Q20, Price relative to Index Oerlikon implemented already more than 80% of the defined measures. Oerlikon completed the targeted headcount reduction during 3Q. In total, the cost savings should reach CHF 70mn. In the first nine months 2020, Oerlikon had to digest a 25.3% decline in order intake for Surface Solutions. The 3Q20 order intake was -26.4% down yoy, accelerated by the pandemic. The strength of the Swiss Franc was responsible for approximately 4%-points.

 Supported by a well-filled order book, Manmade Fibers can produce at the high end of capacity. The segment felt only a short-term impact from the lockdowns in China during 1Q. Order intake in the first nine months 2020 was CHF 770mn, slightly above sales of CHF 765mn. Textile applications, with 68% of total sales in 9M20, has a project

pipeline well into 2023. A nice add-on is the strong demand for nonwovens, driven by the Performance (%) 1M 3M 6M COVID-19 pandemic. Absolute 5.7 23.5 18.3 rel. SPI 2.1 18.9 13.0 rel. STOXX Europe 600 2.6 12.5 8.8  What to ask the management? rel. SXXP Industrials 1.8 10.4 -2.2 – Surface Solutions: Describe your position and strategy for the aerospace industry and

for additive manufacturing. – Do you see any structural changes for your main end markets such as tooling and auto Analyst: Christian Obst, CEFA in the regions or technology like thin-film (services business) and thermal-spray +49 89 5150 1805 (equipment business)? [email protected] – What have you mainly changed since the start of Surface Solutions restructuring in 2019?

– What is the new medium-term business plan for Additive Manufacturing (3D printing)

and what are the next milestones? What is the main challenge on the way to a sustainable EBIT above break-even?

– Where do you see possible M&A opportunities for Surface Solutions?

– Describe the customer structure and the investment cycle in the segment Manmade Fibers. Besides the cyclicality of the business, what are the main risk factors for Manmade?

– What would be a good environment for a divestment of Manmade? What is your current position regarding a possible divestment of Manmade?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 2,593.0 2,290.0 2,434.9 2,567.6 -0.3 EV/Sales 1.4 1.1 1.3 1.2 EBIT adj. 164.3 29.7 110.8 214.2 9.2 EV/EBIT adj. 22.1 82.5 29.1 14.9 EPS adj. (CHF) 0.38 -0.02 0.19 0.44 5.0 P/E adj. 30.1 - 48.8 21.1 Source: Company data, Baader Helvea Equity Research

OC Oerlikon

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 0.44 0.71 -0.21 -0.02 0.19 0.44 EPS adjusted (CHF) 0.33 0.56 0.38 -0.02 0.19 0.44 Dividend (CHF) 0.35 1.00 1.00 0.20 0.25 0.35 Book value (CHF) 5.81 5.90 5.18 4.16 4.10 4.24 Free cash flow (CHF) 0.71 0.46 1.67 0.07 0.22 0.42 Avg. no. of shares (mn) 339.4 339.3 339.3 339.3 339.3 339.3 Market cap. (avg./current; CHF mn) 4,468.1 4,973.3 3,874.8 2,381.7 3,145.0 3,145.0 Enterprise value (CHF mn) 4,339.1 4,872.3 3,624.0 2,450.4 3,228.1 3,191.2 Valuation P/E adj. (x) 39.9 26.2 30.1 - 48.8 21.1 P/BV (x) 2.3 2.5 2.2 1.7 2.3 2.2 FCF/EV (%) 8.0 5.1 19.6 0.7 2.3 4.4 FCF yield (%) (FCF/Mcap.) 5.4 3.1 14.6 1.0 2.3 4.5 Dividend yield (%) 2.7 6.8 8.8 2.8 2.7 3.8 EV/Sales (x) 2.1 1.9 1.4 1.1 1.3 1.2 EV/EBITDA adj. (x) 13.6 12.0 9.9 10.8 10.7 7.8 EV/EBIT adj. (x) 26.0 20.1 22.1 82.5 29.1 14.9 EV/CE (x) 1.9 2.1 1.4 0.9 1.2 1.2 ROCE/WACC adj. (x) 0.9 1.4 0.9 0.2 0.7 1.1 Key company data Sales growth (%) -11.3 26.2 -0.6 -11.7 6.3 5.4 EBITDA adj. growth (%) -4.0 26.8 -9.6 -38.0 33.0 36.0 EBITDA adj. margin (%) 15.5 15.5 14.1 9.9 12.4 16.0 EBIT adj. margin (%) 8.1 9.3 6.3 1.3 4.6 8.3 Net adj. margin (%) 5.4 7.3 5.0 -0.3 2.7 5.9 Free cash flow margin (%) 11.7 6.0 21.9 1.0 3.0 5.5 Payout ratio (%) 80.3 141.4 -486.8 -1,084.2 129.6 79.0 Gearing (%) (net debt/equity) -25.6 -19.7 -19.7 -1.8 -0.8 -3.4 Net debt/EBITDA (x) -1.6 -1.0 -0.9 -0.1 0.0 -0.1 Equity ratio (x) (equity/total assets) 45.3 44.0 48.2 43.1 42.5 43.0 Capital employed (CHF mn) 2,249.5 2,295.9 2,615.3 2,626.3 2,681.6 2,753.3 ROCE adj. (%) 6.0 9.6 6.6 1.1 5.0 7.5 Income statement (CHF mn) Turnover 2,068.0 2,609.0 2,593.0 2,290.0 2,434.9 2,567.6 EBITDA 319.8 405.4 366.3 227.0 303.0 411.7 EBITDA adj. 319.8 405.4 366.3 227.0 302.0 410.7 EBIT 167.0 243.0 164.3 29.7 109.8 213.2 EBIT adj. 167.0 243.0 164.3 29.7 110.8 214.2 EBT 159.0 240.0 148.3 13.6 95.1 199.9 Net profit after minorities 148.0 240.0 -69.7 -6.3 65.4 150.4 Net profit adj. 111.1 189.9 129.9 -6.3 65.4 150.4 Balance sheet (CHF mn) Non-current assets 2,286 2,840 2,158 2,107 2,077 2,064 thereof goodwill 537 542 543 543 543 543 Current assets 2,066 1,705 1,488 1,167 1,196 1,279 Total assets 4,352 4,545 3,647 3,274 3,274 3,343 Shareholders' equity 1,971 2,000 1,756 1,411 1,391 1,438 Total equity and liabilities 4,352 4,545 3,647 3,274 3,274 3,343 Net debt -504 -394 -345 -26 -11 -48 Cash flow (CHF mn) Cash flow from operations 478.0 498.0 150.7 169.9 236.2 325.9 of which change in working capital 76.0 67.0 41.0 -20.0 -20.8 -23.9 Cash flow from investments -237.0 -342.0 416.0 -146.2 -162.7 -184.3 of which investment in fixed assets -237.0 -207.0 -184.0 -142.0 -158.3 -179.7 Free cash flow 241.0 156.0 566.7 23.7 73.5 141.7 Dividends paid -101.8 -118.8 -339.3 -339.3 -84.8 -101.8 Cash flow from financing activities -121.0 -168.0 -458.0 -339.3 -84.8 -101.8 Change in cash position 120.0 -12.0 108.7 -315.6 -11.3 39.9 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

ORIOR Weak (short-term) momentum plus some strategic questions Switzerland  Investment case: With (on a 2019 basis) approx. 10% of sales in travel retail and Food & Beverages approx. 15% in food service, ORIOR was among the more COVID-19/lockdown impacted Reuters: ORON.S Bloomberg: ORON SE Swiss food plays, visible in a 2020E EBITDA decline to CHF 50-55mn levels (vs. CHF 61mn Reduce in 2019) despite acquisition impacts. Short-term, the share price will depend on (further) lockdown measures and their impact on results. We would assume real improvements Closing price as of 06-Jan-21 CHF 77.50 might only become visible in 2H21, leading to continued potentially weak (results) Target price CHF 76.00 momentum in the coming months. High/Low (12M) CHF 93.90/66.60 Taking a broader, more long-term strategic view, ORIOR had a business focused on Market cap. CHF mn 504 Swiss refined meat and convenience before CEO Mr. Lutz arrived a few years back. Enterprise value CHF mn 660 The refined meat suffered from profitability pressure due to rising raw material prices and Free float 100.0% a challenging retail environment (especially Migros). In convenience, ORIOR felt Avg. daily turnover CHF mn 0.80 pressures in its pasta business and faces tough competition with Hilcona/Bell/Coop plus

Price relative to Index the retailer own in-house production. Consequently, ORIOR diversified away with the (expensive) acquisitions of Culinor (convenience in Benelux), Biotta (vegetable drinks and ingredients) and Casualfoods (travel retail), spending >CHF 0.2bn leading to a 2020E net debt/EBITDA >3x and ROCE (including goodwill) levels of >6% 2020-21E that are below WACC in our view. Particularly Casualfoods, but also Culinor, are currently feeling the impacts of COVID-19/lockdowns, delivering results below promises at the time of the acquisition in our view. We think ORIOR has yet to prove that the diversification strategy can deliver results and that the stabilization of the legacy business could be achieved.

Historically, ORIOR generated a decent level of cash flow from operations that led to a decent dividend yield. Key question will be if ORIOR can return to this in the future with the new business mix in a post COVID-19 environment on reasonable capital returns. If so, this theoretically could point to a recovery opportunity. Unfortunately, ORIOR no Performance (%) 1M 3M 6M longer provides detailed insights in the segments (i.e. margins and assets), making it Absolute 4.7 6.6 1.6 difficult for outsiders to understand the underlying drivers. This limited visibility makes it rel. SPI 1.1 2.0 -3.8 difficult to become more positive on the strategic outlook and to increase investor rel. STOXX Europe 600 1.6 -4.5 -7.9 rel. SXXP Food & Bev. 2.8 2.5 73.7 confidence in our view. On 2021E approx. 10x EV/EBITDA and 6% (operational) FCF to EV yield, ORIOR trades roughly in-line with historical averages (10.3x and 6.8%).

Analyst:  What to ask the management? Andreas von Arx +41 43 388 9257 – ORIOR does no longer publish the margin for its Refinement segment. Are the returns [email protected] still above cost of capital? Why is ORIOR not proactively exiting the segment? – What % of sales does ORIOR generate with branded products? How much is

private label? What is the margin difference between the two types of products?

– Where are the synergies between Refinement/Convenience, vegetable juices and travel food service?

– Do you think all your recent acquisitions are generating an ROIC above WACC (including goodwill)?

– Could you make a comparison between your and Bell/Hilcona’s convenience offering in Switzerland, and where you see the strength and weakness of each offering in the long term?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 596.4 595.0 622.4 637.6 2.3 EV/Sales 1.2 1.1 1.1 1.0 EBIT adj. 37.3 25.4 34.2 36.3 -1.0 EV/EBIT adj. 18.5 26.3 19.3 17.5 EPS adj. (CHF) 4.84 2.88 4.18 4.48 -2.5 P/E adj. 17.0 26.3 18.5 17.3 Source: Company data, Baader Helvea Equity Research

ORIOR

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 4.28 4.98 4.84 2.88 4.18 4.48 EPS adjusted (CHF) 4.28 4.98 4.84 2.88 4.18 4.48 Dividend (CHF) 2.17 2.24 2.32 2.32 2.32 2.40 Book value (CHF) 14.46 14.04 12.03 9.51 11.38 13.54 Free cash flow (CHF) 7.64 -9.16 2.41 -0.13 5.75 6.27 Avg. no. of shares (mn) 5.9 6.5 6.5 6.5 6.5 6.5 Market cap. (avg./current; CHF mn) 448.8 540.8 534.9 492.4 504.1 504.1 Enterprise value (CHF mn) 550.7 674.0 691.8 667.8 659.8 636.4 Valuation P/E adj. (x) 17.8 16.7 17.0 26.3 18.5 17.3 P/BV (x) 5.3 5.9 6.8 8.0 6.8 5.7 FCF/EV (%) 8.1 -9.2 2.4 -0.1 5.7 6.4 FCF yield (%) (FCF/Mcap.) 10.0 -10.8 2.9 -0.2 7.4 8.1 Dividend yield (%) 2.9 2.7 2.8 3.1 3.0 3.1 EV/Sales (x) 1.0 1.2 1.2 1.1 1.1 1.0 EV/EBITDA adj. (x) 9.9 11.4 11.3 12.8 10.6 9.8 EV/EBIT adj. (x) 17.9 18.6 18.5 26.3 19.3 17.5 EV/CE (x) 2.5 2.6 2.5 2.4 2.4 2.4 ROCE/WACC adj. (x) 1.9 1.8 1.7 1.1 1.5 1.7 Key company data Sales growth (%) 2.2 6.9 3.4 -0.2 4.6 2.5 EBITDA adj. growth (%) 8.5 6.2 2.9 -14.3 18.8 4.3 EBITDA adj. margin (%) 10.4 10.3 10.2 8.8 10.0 10.2 EBIT adj. margin (%) 5.7 6.3 6.3 4.3 5.5 5.7 Net adj. margin (%) 4.7 5.5 5.3 3.1 4.4 4.6 Free cash flow margin (%) 8.4 -10.2 2.6 -0.1 6.0 6.4 Payout ratio (%) 50.6 45.0 47.9 80.6 55.5 53.5 Gearing (%) (net debt/equity) 120.2 160.6 192.6 273.6 202.1 143.3 Net debt/EBITDA (x) 1.8 2.5 2.5 3.2 2.4 1.9 Equity ratio (x) (equity/total assets) 24.9 22.5 19.4 14.9 17.1 20.5 Capital employed (CHF mn) 222.4 256.4 276.1 278.3 270.7 261.4 ROCE adj. (%) 13.6 13.1 12.5 7.7 11.0 12.1 Income statement (CHF mn) Turnover 539.4 576.7 596.4 595.0 622.4 637.6 EBITDA 55.8 58.6 61.0 52.3 62.1 64.8 EBITDA adj. 55.8 59.3 61.0 52.3 62.1 64.8 EBIT 30.8 35.6 37.3 25.4 34.2 36.3 EBIT adj. 30.8 36.3 37.3 25.4 34.2 36.3 EBT 25.9 33.8 34.7 22.8 31.6 33.9 Net profit after minorities 25.3 31.8 31.5 18.7 27.2 29.2 Net profit adj. 25.3 31.8 31.5 18.7 27.2 29.2 Balance sheet (CHF mn) Non-current assets 161 195 214 211 200 189 thereof goodwill 0 0 0 0 0 0 Current assets 183 204 190 205 233 241 Total assets 343 399 404 416 434 431 Shareholders' equity 85 90 78 62 74 88 Total equity and liabilities 343 399 404 416 434 431 Net debt 103 144 151 169 150 126 Cash flow (CHF mn) Cash flow from operations 60.6 54.5 60.2 43.2 54.5 58.3 of which change in working capital 8.2 3.0 4.7 -5.0 -3.2 -1.8 Cash flow from investments -15.5 -113.1 -44.5 -44.1 -17.1 -17.5 of which investment in fixed assets -15.3 -17.3 -14.1 -14.1 -17.1 -17.5 Free cash flow 45.1 -58.5 15.7 -0.9 37.4 40.8 Dividends paid -12.3 -14.1 -14.3 -15.1 -15.1 -15.1 Cash flow from financing activities -42.4 58.3 -28.8 4.9 -15.1 -35.1 Change in cash position -1.9 -2.7 -16.1 1.4 19.7 3.3 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

PSP Swiss Property Our preferred high-quality, defensive play in (Swiss) listed real estate Switzerland  Investment case: PSP remains the preferred pick among Swiss real estate for us. Real Estate We point to the superior geographical exposure with city center locations. PSP offers Reuters: PSPN.S Bloomberg: PSPN SE a pure/simple yielding portfolio-focused model, with easy to follow accounts and Add conservative financing. For (international) investors seeking a high-quality/low-risk Closing price as of exposure to the Swiss real estate market, this is an excellent option. We also believe the CHF 116.60 06-Jan-21 market has a too negative view on the rental expiry profile of PSP. Compared to peers, Target price CHF 123.00 we see PSP’s exposure to hotels (no operations) and retail (no agglo-shopping, high share High/Low (12M) CHF 153.70/101.00 Market cap. CHF mn 5,348 of mixed-usage and luxury) as relatively more attractive (i.e. vs. Swiss Prime Site or Mobimo). Enterprise value CHF mn 8,506 We note that the key gastronomy properties (5% of rental income) are mainly in best city Free float 90.8% center locations. Avg. daily turnover CHF mn 11.86 PSP’s reported good 3Q results figures (i.e. 3Q adj. EBITDA of CHF 77.9mn vs.

Price relative to Index consensus CHF 67.3mn and Baader Helvea (E) CHF 66.9mn). As a reminder, with the 3Q results, PSP announced an asset swap with Zurich Insurance leading to a book gain of CHF 7.6mn, and acquired in 3Q three properties in Geneva with an annual rental income of approx. CHF 10mn for CHF 295mn.

See our 1 December update “An attractive (and defensive) option in Swiss real estate” for a full set of updated financials. In our 55-page Allreal initiation from the same date, “Allreal – A solid case, but for us currently not at an attractive price” one can find a detailed comparative analysis between the business models (and yielding portfolios) of PSP and Allreal.

 What to ask the management?

Performance (%) 1M 3M 6M – Could you provide an update on the outstanding lockdown-related rents (receivables) Absolute 6.3 5.2 9.8 and an update on your discussions regarding vacation rentals with the 220 tenants? rel. SPI 2.7 0.6 4.4 rel. STOXX Europe 600 3.2 -5.8 0.3 – Could you provide details on what you see in terms of actual renewal rents? rel. SXXP Real Estate 4.7 -1.8 2.9 – Could you provide an update on what you see in transaction market prices?

– Could you provide an update about the situation in Zürich Nord and the renewals &

vacancies (i.e. Wallisellen)? Analyst: Andreas von Arx – So far, the discussion on the “home office” trend is driven by hearsay; how would you +41 43 388 9257 conduct a more fact-driven analysis? How fast did you see office space expanding in [email protected] recent years p.a. in the market (% increase yoy); therefore, how long could it take to absorb a structural 10% less office space demand? If people want to travel less, should this then not also impact prime locations?

– Have you been approached by Swiss Life (or others) with unsolicited offers for your prime Bahnhofstrasse properties? Dou you feel these properties (approx. 8% of rental income) are rightfully labelled as “retail”? Or should they have their own category? Did your large luxury tenants ask for a rent reduction during COVID-19?

– Given an uncertain economic outlook (and continued demand from asset allocation- driven players like the Glattcenter deal), why is PSP not more active in disposing properties in non-prime locations – as Swiss Prime Site is doing with is strategy of “Capital recycling”?

– Why do you consider a real estate play without development arm as a more attractive strategy for investors (as opposed to Allreal)?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) % 2019 2020E 2021E 2022E Net income 453.4 244.5 148.3 165.9 -28.5 NAV prem./discount 0.6 -5.9 -0.6 0.1 FFOps (CHF) 4.23 4.71 4.77 5.09 6.4 FFO yield 3.6 4.2 4.1 4.4 NAVps (CHF) 115.82 118.34 117.26 116.52 0.2 Dividend yield 3.0 3.2 3.2 3.3 Source: Company data, Baader Helvea Equity Research

PSP Swiss Property

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS adjusted (CHF) 3.87 3.84 4.69 4.92 4.98 5.21 Indirect investment result (CHF) 1.73 2.88 5.20 0.41 -1.75 -1.59 EPS reported (CHF) 5.60 6.72 9.89 5.33 3.23 3.62 FFOps (CHF) 3.94 4.07 4.23 4.71 4.77 5.09 Dividend (CHF) 3.35 3.40 3.50 3.60 3.70 3.90 Book value (CHF) 86.96 90.63 97.02 98.97 98.60 98.52 NAV adj. (CHF) 104.22 109.20 115.82 118.34 117.26 116.52 Number of shares (outstanding; mn) 45.9 45.9 45.9 45.9 45.9 45.9 Share price (avg./current; CHF) 89.47 93.33 116.52 111.40 116.60 116.60 Market cap. (avg./current; CHF mn) 4,103.9 4,280.9 5,344.3 5,109.7 5,348.2 5,348.2 Enterprise value (CHF mn) 6,561.6 6,769.0 7,920.8 8,177.5 8,506.2 8,544.4 Valuation P/E adj. (x) 23.1 24.3 24.8 22.6 23.4 22.4 FFO yield (%) 4.4 4.4 3.6 4.2 4.1 4.4 Dividend yield (%) 3.7 3.6 3.0 3.2 3.2 3.3 Implied yield (EBITDA/EV) (%) 3.7 3.6 3.4 3.3 3.2 3.3 P/NAV (x) 0.86 0.85 1.01 0.94 0.99 1.00 P/BV (x) 1.03 1.03 1.20 1.13 1.18 1.18 ROCE/WACC (x) 1.00 0.90 0.95 0.94 0.91 0.97 (EV/CE)/(ROCE/WACC) (x) 0.81 0.90 0.95 0.92 0.96 0.92 Key company data Rental income growth (%) -1.4 2.5 4.0 2.0 4.4 5.2 EBITDA growth (%) -0.1 0.1 11.2 0.2 -0.7 4.7 FFO growth (%) 0.6 3.5 3.7 11.4 1.3 6.8 FFO per share growth (%) 0.8 3.3 3.9 11.3 1.3 6.7 DPS growth (%) 1.5 1.5 2.9 2.9 2.8 5.4 EBITDA margin adj. (%) 89.1 87.0 93.0 91.3 86.8 86.4 ROE recurring (%) 0.0 0.0 0.0 0.0 0.0 0.0 Net gearing (%) 61.6 59.9 57.9 67.6 69.8 70.7 Net loan-to-value (%) 38.2 36.5 35.1 39.5 40.0 40.0 Equity ratio (%) 54.0 54.6 55.4 52.7 52.2 52.2 Interest cover (x) 8.3 9.9 12.0 18.0 16.4 17.1 Income statement (CHF mn) Total revenues 333.8 397.8 405.1 342.6 335.8 341.9 Gross rental income 272.5 279.4 290.5 296.4 309.5 325.6 Net rental income 243.7 249.6 261.7 271.0 281.8 298.5 EBITDA 242.7 242.9 270.1 270.6 268.6 281.4 EBIT 325.1 408.5 513.0 311.7 157.7 179.8 EBT 300.7 386.6 493.9 298.8 143.3 165.0 EBT adjusted 217.5 219.9 249.7 256.5 252.9 265.3 Net profit after minorities 256.9 308.2 453.4 244.5 148.3 165.9 Funds from operations (FFO) 180.6 186.9 193.8 216.0 218.8 233.6 Balance sheet (CHF mn) Investment property 6,384 6,779 7,259 7,698 7,814 7,915 Non-current assets 7,296 7,555 7,933 8,504 8,550 8,555 Cash and equivalents 33 23 20 26 23 21 Current assets 88 65 103 110 111 109 Total assets 7,384 7,619 8,036 8,615 8,661 8,664 Equity 3,989 4,157 4,450 4,539 4,523 4,519 Interest bearing debt 2,491 2,511 2,596 3,094 3,181 3,218 Total equity and liabilities 7,384 7,619 8,036 8,615 8,661 8,664 Net debt 2,458 2,488 2,576 3,068 3,158 3,196 Cash flow (CHF mn) Cash flow from operating activities 173.5 207.7 241.9 197.9 230.1 233.6 Cash flow from investing activities -249.6 -81.2 -151.9 -528.6 -155.2 -102.2 Free cash flow -76.1 126.4 90.0 -330.8 74.9 131.5 Dividend paid -153.6 -155.9 -160.5 -160.5 -165.1 -169.7 Cash flow from financing activities 88.4 -136.7 -93.5 337.4 -78.5 -132.8 Changes in cash position 12.3 -10.3 -3.5 6.6 -3.6 -1.3 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Schweiter Technologies A hidden “green deal”/ESG enabler with strong market share Switzerland  Investment case: Why we remain bullish on Schweiter: 1) Hidden green deal enabler: Capital Goods i) Schweiter’s composites enable lightweight applications in transport & automotive and Reuters: SWTQ.S Bloomberg: SWTQ SE therefore decrease CO2 emission and increase electric vehicle ranges, ii) Schweiter’s Buy core material business and the wind energy composites business are driven by the Closing price as of demand for wind energy. 2) As Schweiter is with its core materials business unit roughly CHF 1,518.00 06-Jan-21 70% backward integrated into Balsa wood, we think Schweiter will mainly profit from the Target price CHF 1,450.00 significant Balsa wood price increases of 2019 & 2020 despite higher raw material costs. High/Low (12M) CHF 1,518.00/782.00 Market cap. CHF mn 2,173 3) Strong balance sheet and opportunistic M&A behavior as part of Schweiter’s DNA Enterprise value CHF mn 2,067 might lead to interesting transactions for attractive multiples. 4) Consistent dividend Free float 68.4% payments with >3% dividend yield. 5) Defensive portfolio as cyclical displays business is Avg. daily turnover CHF mn 1.81 partly buffered by the COVID-19-related high demand for clear sheets. 6) Schweiter has compared to its Capital Goods and ESG enabler peers with 15x EV/EBIT 2021E a Price relative to Index low valuation. Given its defensive portfolio and good growth profile, we think there might be a rerating potential.

 What to ask the management?

– Your clear sheets display business recorded very strong demand in 2020 due to the COVID-19 pandemic, whereas the colored sheet business suffered from the economic downturn. Should we expect a reversal of both trends in 2021?

– After a strong 2020 for your core materials business (for the wind energy industry mainly),

how do you see the 2021 & 2022 outlook?

Performance (%) 1M 3M 6M – How big is your UK exposure (we think 8% of group sales)? How could a Brexit affect you? Absolute 6.8 10.3 32.5 Do you see significant slowdown in the UK (in particular, construction and consumer rel. SPI 3.1 5.7 27.1 and, therefore, advertising market)? rel. STOXX Europe 600 3.6 -0.8 23.0 rel. SXXP Industrials 2.9 -2.8 11.9 – Could you update us on the order book development of Architecture (which is 20% of sales), Core Materials (which stand for 16%) and Transport & Industry (which are ~13% of sales)?

– Do you see interesting M&A opportunities in the weakening business environment? Analyst: Markus Mayer – What would be your M&A firepower? +49 89 5150 1818 – Can you give more insight on your recent bolt-on acquisition Foamboard? [email protected] – Is the Balsa wood tightness positive or negative for your business? (Schweiter is partly

backward integrated with his own Balsa plantation, but should also see negative

demand effects for its wind blades business if there is a supply tightness.)

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 1,179.6 1,101.0 1,166.3 1,234.2 1.5 EV/Sales 1.5 1.5 1.8 1.7 EBIT adj. 88.6 96.7 111.0 116.9 9.7 EV/EBIT adj. 19.5 17.3 18.6 17.5 EPS adj. (CHF) 43.73 48.97 56.41 59.40 10.7 P/E adj. 28.0 25.0 26.9 25.6 Source: Company data, Baader Helvea Equity Research

Schweiter Technologies

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 120.11 42.10 43.73 48.97 56.41 59.40 EPS adjusted (CHF) 53.77 42.10 43.73 48.97 56.41 59.40 Dividend (CHF) 40.00 40.00 40.00 42.00 44.00 46.00 Book value (CHF) 545.55 525.20 511.27 520.24 534.65 550.06 Free cash flow (CHF) 75.11 -38.66 54.59 77.00 58.17 55.83 Avg. no. of shares (mn) 1.4 1.4 1.4 1.4 1.4 1.4 Market cap. (avg./current; CHF mn) 1,717.0 1,582.5 1,755.3 1,755.3 2,173.4 2,173.4 Enterprise value (CHF mn) 1,532.2 1,515.5 1,726.9 1,675.4 2,067.0 2,046.7 Valuation P/E adj. (x) 22.3 26.3 28.0 25.0 26.9 25.6 P/BV (x) 2.2 2.1 2.4 2.4 2.8 2.8 FCF/EV (%) 5.4 -2.6 3.6 5.3 4.0 3.9 FCF yield (%) (FCF/Mcap.) 6.3 -3.5 4.5 6.3 3.8 3.7 Dividend yield (%) 3.3 3.6 3.3 3.4 2.9 3.0 EV/Sales (x) 1.6 1.4 1.5 1.5 1.8 1.7 EV/EBITDA adj. (x) 13.4 13.7 13.7 12.4 13.8 13.1 EV/EBIT adj. (x) 17.6 18.4 19.5 17.3 18.6 17.5 EV/CE (x) 2.5 2.4 2.7 2.8 3.4 3.3 ROCE/WACC adj. (x) 1.5 1.4 1.4 1.7 1.9 2.0 Key company data Sales growth (%) 6.8 6.9 12.6 -6.7 5.9 5.8 EBITDA adj. growth (%) 1.9 -3.0 14.0 6.8 11.3 3.9 EBITDA adj. margin (%) 11.7 10.6 10.7 12.3 12.9 12.6 EBIT adj. margin (%) 8.9 7.9 7.5 8.8 9.5 9.5 Net adj. margin (%) 7.9 5.8 5.3 6.4 6.9 6.9 Free cash flow margin (%) 11.0 -5.3 6.6 10.0 7.1 6.5 Payout ratio (%) 33.3 95.0 91.5 85.8 78.0 77.4 Gearing (%) (net debt/equity) -29.9 -14.1 -11.7 -18.9 -21.7 -23.5 Net debt/EBITDA (x) -2.0 -1.0 -0.7 -1.0 -1.1 -1.2 Equity ratio (x) (equity/total assets) 74.3 72.5 69.7 70.2 69.9 69.7 Capital employed (CHF mn) 603.7 624.8 645.4 607.3 606.8 614.0 ROCE adj. (%) 11.8 10.6 10.7 12.7 14.5 15.1 Income statement (CHF mn) Turnover 980.2 1,047.4 1,179.6 1,101.0 1,166.3 1,234.2 EBITDA 114.4 111.0 126.5 135.0 150.2 156.1 EBITDA adj. 114.4 111.0 126.5 135.0 150.2 156.1 EBIT 87.3 82.2 88.6 96.7 111.0 116.9 EBIT adj. 87.3 82.2 88.6 96.7 111.0 116.9 EBT 96.7 77.3 81.9 89.9 103.6 109.0 Net profit after minorities 172.0 60.3 62.6 70.1 80.8 85.0 Net profit adj. 77.0 60.3 62.6 70.1 80.8 85.0 Balance sheet (CHF mn) Non-current assets 456 528 552 537 521 512 thereof goodwill 95 129 127 127 127 127 Current assets 595 509 498 524 574 618 Total assets 1,051 1,037 1,051 1,061 1,095 1,131 Shareholders' equity 781 752 732 745 765 788 Total equity and liabilities 1,051 1,037 1,051 1,061 1,095 1,131 Net debt -233 -106 -86 -141 -166 -185 Cash flow (CHF mn) Cash flow from operations 58.4 60.7 104.3 133.2 106.4 110.7 of which change in working capital -24.1 -9.3 1.3 24.7 -13.6 -13.5 Cash flow from investments 49.2 -116.0 -26.1 -23.0 -23.1 -30.8 of which investment in fixed assets -24.8 -22.6 -28.2 -25.5 -21.0 -28.6 Free cash flow 107.5 -55.3 78.2 110.2 83.3 79.9 Dividends paid -57.3 -64.4 -57.3 -57.3 -60.1 -63.0 Cash flow from financing activities -53.7 -69.7 -70.5 -55.2 -58.0 -60.8 Change in cash position 53.8 -125.1 7.7 55.1 25.3 19.1 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

SFS Group Ramp-up of new projects and broadly diversified end market exposure Switzerland should be beneficial in 2021

Capital Goods  Investment case: Due to a diversified end market exposure and flexibility in Reuters: SFSN.S Bloomberg: SFSN SE production enabling cost savings, SFS managed to handle 2020 relatively well and Add better than initially expected. In November, SFS reported that demand since August in several of its end markets was recovering swifter than originally expected and Closing price as of 06-Jan-21 CHF 104.30 that this trend has continued into 4Q (org. growth this year: 0.9% in 1Q, -21% in 2Q, Target price CHF 98.00 ~-10% previously indicated for 3Q). In particular Automotive (approx. 25% of High/Low (12M) CHF 106.40/61.35 group sales) is experiencing a better-than-expected recovery since August and Market cap. CHF mn 3,911 Electronics (approx. 20% of sales) is benefiting from product ramp-ups at several Enterprise value CHF mn 3,744 key customers. Management consequently decided to raise its previously overly Free float 45.0% cautious guidance for 2020. Potential in Automotive: Despite the difficult situation at Avg. daily turnover CHF mn 3.63 large OEMs and automotive suppliers, the value added per car by SFS is increasing. As the trend towards electrification in cars continues (electric brake systems, cameras and Price relative to Index sensors for autonomous driving, etc.), SFS sees significant potential to grow share of wallet and profitability as penetration increases in the respective field of application (currently <10% in some areas like car cameras). To capture growth of recently won projects, the company has decided to invest CHF 25-30mn into additional production capacities in Switzerland. Capital allocation and M&A potential: Roughly 50% of the medium-term guidance of 3-6% growth p.a. is expected to come from acquisitions. While the recent takeover of T&M in March 2020 has added deep drawing capabilities in the U.S. and increased exposure to automotive, management expects future acquisitions outside this field. Within automotive, the focus will be on organic growth and capex. In the medium term, we are confident that along the expected economic recovery in 2021,

SFS will be able to post disproportionate growth given a) strong technological competitiveness within engineered components securing continuous project wins (55% of sales and Performance (%) 1M 3M 6M 70% of EBIT) and b) continuously high investments into R&D. Absolute -1.1 11.3 13.4 rel. SPI -4.8 6.7 8.0  What to ask the management? rel. STOXX Europe 600 -4.3 0.2 3.9 rel. SXXP Industrials -5.0 -1.9 -7.1 – SFS’ overall exposure to the end market automotive is roughly 25% of total sales and a significant portion of profits. What impression do you currently get from discussions

with your customers? Do you expect a significant recovery in 2021?

Analyst: – In your 1H20 half-year report you mentioned the risk of pricing pressure in your end Jorg Schirmacher, CFA +41 43 388 9267 market electronics. Has this proven true? [email protected] – What is your long-term growth guidance over the cycle? What would need to happen

to achieve such growth in 2021? – What is your long-term EBIT margin guidance over the cycle?

– What is your digital strategy, e.g. regarding your e-shop? Do you see a potential threat from e-commerce players in your divisions fastening systems and distribution & logistics?

– What is your capex plan for 2021 and beyond?

– Please elaborate on your capital allocation strategy going forward.

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 1,782.1 1,614.9 1,720.2 1,792.4 0.2 EV/Sales 1.8 2.1 2.2 2.0 EBIT adj. 239.1 167.3 217.3 229.2 -1.4 EV/EBIT adj. 13.1 20.5 17.2 15.9 EPS adj. (CHF) 5.47 3.44 4.47 4.66 -5.2 P/E adj. 15.3 27.1 23.3 22.4 Source: Company data, Baader Helvea Equity Research

SFS Group

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 4.24 5.14 5.47 3.44 4.47 4.66 EPS adjusted (CHF) 4.24 5.14 5.47 3.44 4.47 4.66 Dividend (CHF) 1.90 2.00 1.80 1.20 1.80 2.10 Book value (CHF) 28.85 31.52 32.55 34.22 37.52 40.41 Free cash flow (CHF) 2.51 2.90 2.32 2.94 4.09 4.29 Avg. no. of shares (mn) 37.5 37.5 37.5 37.5 37.5 37.5 Market cap. (avg./current; CHF mn) 3,958.1 4,065.2 3,137.5 3,491.3 3,911.3 3,911.3 Enterprise value (CHF mn) 3,987.1 4,055.7 3,121.0 3,431.9 3,743.6 3,650.3 Valuation P/E adj. (x) 24.9 21.1 15.3 27.1 23.3 22.4 P/BV (x) 3.7 3.4 2.6 2.7 2.8 2.6 FCF/EV (%) 2.4 2.8 2.2 2.9 4.1 4.4 FCF yield (%) (FCF/Mcap.) 2.4 2.7 2.8 3.2 3.9 4.1 Dividend yield (%) 1.8 1.8 2.2 1.3 1.7 2.0 EV/Sales (x) 2.4 2.3 1.8 2.1 2.2 2.0 EV/EBITDA adj. (x) 12.3 12.2 9.4 12.9 11.8 11.0 EV/EBIT adj. (x) 17.1 16.7 13.1 20.5 17.2 15.9 EV/CE (x) 2.7 2.6 2.4 2.6 2.8 2.7 ROCE/WACC adj. (x) 1.9 1.9 2.4 1.5 1.9 2.0 Key company data Sales growth (%) 13.8 6.2 2.6 -9.4 6.5 4.2 EBITDA adj. growth (%) 5.6 2.9 -0.3 -19.9 19.5 4.8 EBITDA adj. margin (%) 19.8 19.2 18.6 16.5 18.5 18.6 EBIT adj. margin (%) 14.3 14.0 13.4 10.4 12.6 12.8 Net adj. margin (%) 9.7 11.1 11.5 8.0 9.8 9.8 Free cash flow margin (%) 5.7 6.3 4.9 6.8 8.9 9.0 Payout ratio (%) 44.8 38.9 32.9 34.9 40.2 45.0 Gearing (%) (net debt/equity) -3.2 -5.0 -5.6 -8.7 -15.6 -20.7 Net debt/EBITDA (x) -0.1 -0.2 -0.2 -0.4 -0.7 -0.9 Equity ratio (x) (equity/total assets) 71.2 73.0 74.5 75.5 75.9 76.2 Capital employed (CHF mn) 1,474.3 1,568.8 1,275.1 1,297.8 1,316.8 1,335.4 ROCE adj. (%) 13.6 13.0 16.9 10.6 13.5 13.8 Income statement (CHF mn) Turnover 1,634.8 1,736.9 1,782.1 1,614.9 1,720.2 1,792.4 EBITDA 323.5 332.8 331.7 265.7 317.4 332.5 EBITDA adj. 323.5 332.8 331.7 265.7 317.4 332.5 EBIT 197.7 243.1 236.3 167.3 217.3 229.2 EBIT adj. 233.3 243.1 239.1 167.3 217.3 229.2 EBT 198.8 235.1 229.7 161.4 211.0 222.7 Net profit after minorities 159.1 192.8 205.3 128.8 167.7 174.8 Net profit adj. 159.1 192.8 205.3 128.8 167.7 174.8 Balance sheet (CHF mn) Non-current assets 724 784 806 880 891 905 thereof goodwill 0 0 0 0 0 0 Current assets 795 836 833 821 962 1,085 Total assets 1,519 1,619 1,639 1,701 1,853 1,990 Shareholders' equity 1,082 1,182 1,221 1,283 1,407 1,515 Total equity and liabilities 1,519 1,619 1,639 1,701 1,853 1,990 Net debt -35 -59 -69 -112 -220 -313 Cash flow (CHF mn) Cash flow from operations 226.6 263.5 277.6 283.0 265.1 277.3 of which change in working capital -45.4 -25.0 10.1 54.6 -3.8 -1.9 Cash flow from investments -132.6 -154.6 -190.6 -172.5 -111.8 -116.5 of which investment in fixed assets -137.0 -149.1 -116.7 -113.0 -111.8 -116.5 Free cash flow 94.0 108.9 87.0 110.4 153.3 160.8 Dividends paid -65.8 -72.4 -76.6 -67.5 -45.0 -67.5 Cash flow from financing activities -145.9 -90.0 -83.8 -67.5 -45.0 -67.5 Change in cash position -51.0 16.8 1.0 42.9 108.3 93.3 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Siegfried Winning bet on the partnership with Pfizer/BioNTech Switzerland  Investment case: Siegfried is a leader in the small molecule contract development and Pharma manufacturing organization (CDMO) industry. Siegfried’s focus is on the chemical Reuters: SFZN.S Bloomberg: SFZN SE production of intermediates, APIs (Active Pharmaceutical Ingredients) and finished Add dosage forms (including sterile fillings). From 2010-2015, Siegfried had a period of heavy Closing price as of investments to reach critical size in its Drug Substance division. This represents an CHF 663.00 06-Jan-21 attractive base for future sustainable profitable growth as capacity utilization increases. Target price CHF 557.00 Since 2016, Siegfried has improved its EBITDA margin by over 200bps, reaching 16.9% High/Low (12M) CHF 675.50/335.00 Market cap. CHF mn 2,742 in FY19, and has the medium-term goal to reach 20%. Additionally, very strong market Enterprise value CHF mn 3,142 fundamentals should continue to support growth rates in at least a mid-single-digit Free float 80.0% percentage range because an increasing outsourcing trend in the pharmaceutical industry Avg. daily turnover CHF mn 7.72 continues to favor high-quality producers like Siegfried. In addition, Siegfried recently secured the fill-and-finish for Pfizer/BioNTech COVID-19 vaccine candidate BNT162b2, Price relative to Index assuming that the drug obtains marketing authorization. Siegfried has an outstanding M&A track record and sees M&A as a high priority in the finished dosage forms industry, but will also be interested to enter new strategic markets (e.g. new emerging technologies in the biologics space). This has been largely achieved with the acquisition of the ex-Novartis production sites in Spain, potentially opening the door to biologics manufacturing as we believe one of the plants is in charge of at least one ophthalmologic antibody production.

 As a highly defensive investment with high visibility, low risk and significant external growth potential, Siegfried is an attractive long-term investment in our view. We believe Siegfried’s strong management team and clearly defined strategy will continue to allow

the company to become an even stronger player in the industry. Performance (%) 1M 3M 6M Absolute 5.4 5.9 49.8  What to ask the management? rel. SPI 1.8 1.3 44.4 rel. STOXX Europe 600 2.3 -5.2 40.3 – Do you see upside to the guided CHF 90mn revenue potential from the partnership rel. SXXP Chemicals -0.5 -2.4 36.3 with BioNTech/Pfizer for the COVID-19 vaccine?

– Could you comment on the nature of the production lines at the acquired ex-Novartis production sites in Spain, particularly when looking at biologics capabilities? Analyst: Bruno Bulic, Ph.D. – Would you consider further acquisitions in biologics or in a complementary segment? +41 43 388 9225 – How do you see the general situation for the pharmaceutical outsourcing companies [email protected] like Siegfried in the coming 5 years and the impact from potential changes in China?

– Can you describe the capacity utilization at the Nangton plant since the COVID-19

outbreak and which markets are primarily served by the plant?

– What is your current split between generics and on-patent products? Are there significant profitability differences between both kinds of products?

– When do you think Siegfried will have to start a new significant capex cycle?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 833.5 842.9 922.3 979.0 5.5 EV/Sales 2.5 3.0 3.4 3.2 EBIT adj. 89.2 91.3 113.3 131.7 13.9 EV/EBIT adj. 23.3 27.3 27.7 23.5 EPS adj. (CHF) 15.88 16.59 21.33 24.90 16.2 P/E adj. 23.9 29.7 31.1 26.6 Source: Company data, Baader Helvea Equity Research

Siegfried

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 10.01 13.52 12.85 16.59 21.33 24.90 EPS adjusted (CHF) 10.01 13.81 15.88 16.59 21.33 24.90 Dividend (CHF) 2.40 2.60 2.80 2.91 3.74 4.37 Book value (CHF) 103.74 101.52 105.35 118.60 136.51 157.14 Free cash flow (CHF) 8.16 10.61 0.92 15.97 16.64 17.01 Avg. no. of shares (mn) 4.0 4.2 4.1 4.1 4.1 4.1 Market cap. (avg./current; CHF mn) 1,102.3 1,566.9 1,568.4 2,035.7 2,742.1 2,742.1 Enterprise value (CHF mn) 1,554.5 2,017.0 2,080.7 2,490.9 3,142.3 3,089.3 Valuation P/E adj. (x) 27.7 27.2 23.9 29.7 31.1 26.6 P/BV (x) 2.7 3.7 3.6 4.2 4.9 4.2 FCF/EV (%) 1.1 1.4 0.1 2.1 2.2 2.3 FCF yield (%) (FCF/Mcap.) 2.9 2.8 0.2 3.2 2.5 2.6 Dividend yield (%) 0.9 0.7 0.7 0.6 0.6 0.7 EV/Sales (x) 2.1 2.5 2.5 3.0 3.4 3.2 EV/EBITDA adj. (x) 13.6 15.8 14.8 17.3 18.8 16.6 EV/EBIT adj. (x) 24.1 25.9 23.3 27.3 27.7 23.5 EV/CE (x) 1.6 2.0 2.0 2.4 3.0 2.8 ROCE/WACC adj. (x) 0.9 1.1 1.6 1.3 1.5 1.7 Key company data Sales growth (%) 4.6 5.8 4.9 1.1 9.4 6.1 EBITDA adj. growth (%) 9.4 11.8 10.5 2.4 15.8 11.5 EBITDA adj. margin (%) 15.2 16.0 16.9 17.1 18.1 19.0 EBIT adj. margin (%) 8.6 9.8 10.7 10.8 12.3 13.5 Net adj. margin (%) 5.3 7.2 7.9 8.1 9.6 10.5 Free cash flow margin (%) 4.3 5.6 0.5 7.8 7.5 7.2 Payout ratio (%) 24.0 19.2 21.8 17.6 17.6 17.6 Gearing (%) (net debt/equity) 78.2 77.1 83.9 63.5 45.2 30.8 Net debt/EBITDA (x) 2.8 2.6 3.4 2.2 1.5 1.1 Equity ratio (x) (equity/total assets) 38.4 38.3 37.3 40.4 43.3 46.4 Capital employed (CHF mn) 994.6 1,014.6 1,047.8 1,039.3 1,064.9 1,102.8 ROCE adj. (%) 4.6 6.2 8.8 7.1 8.5 9.6 Income statement (CHF mn) Turnover 750.5 794.3 833.5 842.9 922.3 979.0 EBITDA 114.0 125.9 108.6 143.6 166.9 186.1 EBITDA adj. 114.0 127.4 140.7 144.1 166.9 186.1 EBIT 64.6 76.3 57.0 90.8 113.3 131.7 EBIT adj. 64.6 77.8 89.2 91.3 113.3 131.7 EBT 56.3 70.2 51.4 85.3 110.3 128.7 Net profit after minorities 39.7 56.3 53.1 68.6 88.2 103.0 Net profit adj. 39.7 57.5 65.7 68.6 88.2 103.0 Balance sheet (CHF mn) Non-current assets 47 38 51 49 47 46 thereof goodwill 118 108 97 87 87 87 Current assets 514 534 590 621 702 790 Total assets 1,071 1,103 1,169 1,215 1,304 1,400 Shareholders' equity 412 423 436 491 565 650 Total equity and liabilities 1,071 1,103 1,169 1,215 1,304 1,400 Net debt 322 326 366 311 255 200 Cash flow (CHF mn) Cash flow from operations 84.6 106.0 65.6 135.7 132.2 134.7 of which change in working capital -18.1 -13.9 -52.6 16.6 -15.8 -27.8 Cash flow from investments -52.2 -61.8 -61.8 -69.7 -63.4 -64.4 of which investment in fixed assets 53.1 61.0 58.9 69.7 63.4 64.4 Free cash flow 32.4 44.2 3.8 66.0 68.8 70.4 Dividends paid -7.8 -9.8 -11.2 -11.9 -12.4 -15.9 Cash flow from financing activities -30.0 -37.9 -17.8 -11.9 -12.4 -15.9 Change in cash position 2.7 5.7 -14.4 54.2 56.5 54.5 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Sika Strong pricing power should retain most of the gross margin improvement Switzerland of 2020E, operational leverage will come on top in 2021E

Building Prod. & Materials  Investment case: In our view, Sika is a high-quality company with a strong management team, Reuters: SIKA.S Bloomberg: SIKA SE a very attractive structural long-term investment story, innovative products and significant Add long-term upside. High organic growth due to market penetration as well as the consolidation Closing price as of of the construction chemicals market are important aspects of Sika’s investment case. 06-Jan-21 CHF 249.00 In our view, Sika’s earnings growth in 2021E will be mainly driven by: 1) Cyclical recovery Target price CHF 253.00 (in particular in its Global Business operations), 2) ongoing strong demand from Asia High/Low (12M) CHF 249.00/134.80 (in particular China) due to huge infrastructure spending (partly driven by stimulus measures) Market cap. CHF mn 35,325 Enterprise value CHF mn 38,123 and 3) EBIT margin expansion. The reasons for the EBIT margin expansion are: Free float 100.0% i) Keeping of the underlying strong gross margin improvement of 2020 (due to raw material Avg. daily turnover CHF mn 89.91 cost decline) driven by Sika’s strong pricing power, ii) operational leverage due to at least high single-digit volume growth in 2021E, iii) further Parex synergies, and iv) ongoing efficiency Price relative to Index measures together with the keeping of most of the temporary cost measures of 2020 in 2021. In addition, Sika has a full M&A pipeline. However, the execution is delayed because of the lockdown measures.

 What to ask the management?

– Based on the underlying construction market growth, what growth do you add due to positive product/regional mix effects (higher-quality portfolio of Sika is growing faster than the market and Sika has a higher emerging market share compared to peers), the growth by innovations and the positive price effect?

– You want to remain active in bolt-on M&A as well as larger deals. In which regions and Performance (%) 1M 3M 6M technologies do you still have white spots? M&A pipeline? Absolute 11.6 9.4 32.9 rel. SPI 7.9 4.8 27.5 – The Italian MAPEI construction chemicals has a generation change and therefore rel. STOXX Europe 600 8.4 -1.7 23.4 might come on the block. Would you be interested? rel. SXXP Construction 8.8 -0.3 20.5 – R&D/sales ratio? Split ground vs. customized research?

– When do you expect positive impacts from Chinese infrastructure projects? Analyst: Have you ever seen positive effects from the US infrastructure projects of the Markus Mayer – +49 89 5150 1818 Trump administration? Do you expect any change with the Biden administration? [email protected] – Do you already see positive impacts from China’s stimulus measures on Chinese infrastructure projects?

– How big is the effect of new datacenter projects for you?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 8,109.0 7,929.1 8,483.5 9,220.7 4.4 EV/Sales 3.1 4.5 4.5 4.1 EBIT adj. 1,054.9 1,112.0 1,338.5 1,543.1 13.5 EV/EBIT adj. 23.9 32.2 28.5 24.3 EPS adj. (CHF) 5.30 5.58 6.81 7.91 14.3 P/E adj. 28.5 41.0 36.6 31.5 Source: Company data, Baader Helvea Equity Research

Sika

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 253.67 4.69 5.30 5.58 6.81 7.91 EPS adjusted (CHF) 253.67 4.69 5.30 5.58 6.81 7.91 Dividend (CHF) 111.00 2.02 2.33 2.35 2.93 3.40 Book value (CHF) 1,344.06 11.51 22.28 25.32 28.62 32.55 Free cash flow (CHF) 68.56 0.27 -5.05 6.15 7.26 8.29 Avg. no. of shares (mn) 2.5 145.6 141.9 141.9 141.9 141.9 Market cap. (avg./current; CHF mn) 16,375.3 18,666.9 21,424.2 32,473.6 35,325.1 35,325.1 Enterprise value (CHF mn) 16,353.0 21,077.4 25,192.7 35,762.4 38,123.4 37,552.3 Valuation P/E adj. (x) 25.4 27.3 28.5 41.0 36.6 31.5 P/BV (x) 4.8 11.1 6.8 9.0 8.7 7.6 FCF/EV (%) 28.5 0.1 -1.8 2.3 2.7 3.1 FCF yield (%) (FCF/Mcap.) 1.1 0.2 -3.3 2.7 2.9 3.3 Dividend yield (%) 1.7 1.6 1.5 1.0 1.2 1.4 EV/Sales (x) 2.6 3.0 3.1 4.5 4.5 4.1 EV/EBITDA adj. (x) 15.3 18.3 18.2 24.2 22.4 19.4 EV/EBIT adj. (x) 18.2 22.3 23.9 32.2 28.5 24.3 EV/CE (x) 4.6 4.9 3.3 4.7 5.0 5.0 ROCE/WACC adj. (x) 4.8 4.4 2.8 3.0 3.6 4.1 Key company data Sales growth (%) 8.7 13.4 14.4 -2.2 7.0 8.7 EBITDA adj. growth (%) 10.6 7.6 20.7 6.3 15.2 13.7 EBITDA adj. margin (%) 17.1 16.2 17.1 18.6 20.0 21.0 EBIT adj. margin (%) 14.3 13.3 13.0 14.0 15.8 16.7 Net adj. margin (%) 10.3 9.6 9.3 10.0 11.4 12.2 Free cash flow margin (%) 2.8 0.5 -8.8 11.0 12.1 12.8 Payout ratio (%) 43.8 43.1 44.0 42.1 43.0 43.0 Gearing (%) (net debt/equity) -9.0 126.1 107.9 81.7 60.2 40.5 Net debt/EBITDA (x) -0.3 1.8 2.5 2.0 1.4 1.0 Equity ratio (x) (equity/total assets) 58.9 26.3 31.8 35.9 38.4 41.0 Capital employed (CHF mn) 3,572.3 4,304.1 7,613.1 7,564.3 7,553.8 7,558.1 ROCE adj. (%) 31.3 27.0 16.8 18.1 21.9 25.3 Income statement (CHF mn) Turnover 6,248.3 7,085.4 8,109.0 7,929.1 8,483.5 9,220.7 EBITDA 1,068.5 1,149.9 1,387.4 1,474.9 1,699.6 1,932.6 EBITDA adj. 1,068.5 1,149.9 1,387.4 1,474.9 1,699.6 1,932.6 EBIT 896.3 945.9 1,054.9 1,112.0 1,338.5 1,543.1 EBIT adj. 896.3 945.9 1,054.9 1,112.0 1,338.5 1,543.1 EBT 862.4 892.9 966.6 1,034.8 1,269.1 1,478.2 Net profit after minorities 643.8 682.9 751.9 791.9 965.6 1,121.7 Net profit adj. 643.8 682.9 751.9 791.9 965.6 1,121.7 Balance sheet (CHF mn) Non-current assets 2,386 2,914 6,142 6,029 5,933 5,825 thereof goodwill 889 1,223 3,140 3,160 3,180 3,200 Current assets 3,407 3,468 3,803 3,970 4,640 5,446 Total assets 5,792 6,382 9,945 9,999 10,572 11,271 Shareholders' equity 3,411 1,675 3,161 3,592 4,060 4,618 Total equity and liabilities 5,792 6,382 9,945 9,999 10,572 11,271 Net debt -309 2,112 3,412 2,936 2,443 1,870 Cash flow (CHF mn) Cash flow from operations 652.2 744.0 1,213.9 1,091.3 1,261.8 1,423.1 of which change in working capital -129.8 -203.1 -81.4 -64.6 -85.4 -112.3 Cash flow from investments -478.2 -705.2 -1,930.9 -218.2 -232.1 -246.9 of which investment in fixed assets -183.0 -230.2 -3,055.2 -218.2 -232.1 -246.9 Free cash flow 174.0 38.8 -717.0 873.1 1,029.7 1,176.2 Dividends paid -243.6 -281.7 -293.6 -330.8 -333.4 -415.2 Cash flow from financing activities -139.2 -149.6 827.6 -715.4 -563.5 -594.7 Change in cash position -116.8 -124.2 81.1 125.9 493.3 573.0 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Sulzer Structural trends in several end markets (water, chemical processing, Switzerland dental & healthcare) and downsizing in energy point to more upside

Capital Goods  Investment case: Over the past years and since the last trough in O&G in 2017, Reuters: SUN.S Bloomberg: SUN SE Sulzer has built a successful track record of upgrading the growth and margin profile of Add its business portfolio (~9% org. growth p.a. between 2017-2019, opEBITA margin Closing price as of +50bps yoy in 2019 and +170bps since 2017) and successfully reduced its exposure to 06-Jan-21 CHF 95.60 cyclical end markets (2/3 of sales low cyclical vs. 50% five years ago). The recovery of Target price CHF 104.00 oil & gas, but also exposure in more stable and structurally growing end markets High/Low (12M) CHF 109.40/44.34 (e.g. water, chemical processing or dental), have been the driver behind this development. Market cap. CHF mn 3,253 Enterprise value CHF mn 3,509 In 2020, Sulzer has so far fared relatively well despite its exposure to oil & gas Free float 51.2% (~1/3 of Sulzer, of which 14% new projects) and because of its diversified exposure to Avg. daily turnover CHF mn 5.32 different end markets and regions. The successful restructuring in APS and ongoing rebound in dental and beauty accompanied by bolt-on acquisitions (most recently healthcare Price relative to Index player Haselmeier in 2H20) and an ongoing downsizing of capacities in energy should offer good prospects for good growth and earnings expansion, resulting in 2019 levels to be reached by 2021.

 What to ask the management?

– How could Sulzer’s portfolio look in 3-5 years?

– What is the strategic plan of your newest division applicator systems with a superior growth profile and margin quality (>2x group average)?

– Can we expect a continuation of your M&A strategy of acquiring smaller-scale targets Performance (%) 1M 3M 6M (e.g. recent acquisition of Haselmeier for CHF 100mn) or is a larger, transformational Absolute 2.5 25.4 25.8 deal a possibility (if so, where most likely)? rel. SPI -1.2 20.8 20.4 rel. STOXX Europe 600 -0.7 14.3 16.3 – Please give an update on the current status of your downsizing plans in the energy rel. SXXP Industrials -1.4 12.2 5.3 division and future sales and earnings potential. Do you expect to secure selectivity in tenders, which have secured profitability in the past?

– APS has been heavily impacted by the pandemic, especially dental and beauty. Analyst: How has the rebound been so far and what do you expect going forward? Jorg Schirmacher, CFA +41 43 388 9267 – How do you see the future of the energy sector especially against the backdrop of [email protected] increasing trends towards sustainability by consumers, governments and investors?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 3,728.5 3,477.9 3,616.9 3,730.0 0.0 EV/Sales 1.0 0.9 1.0 0.9 EBIT adj. 241.0 154.9 296.7 317.2 9.6 EV/EBIT adj. 15.7 20.2 11.8 10.4 EPS adj. (CHF) 6.27 5.11 5.84 6.27 0.0 P/E adj. 15.8 15.7 16.4 15.2 Source: Company data, Baader Helvea Equity Research

Sulzer

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 2.44 3.56 4.53 2.81 5.89 6.33 EPS adjusted (CHF) 3.87 5.54 6.27 5.11 5.84 6.27 Dividend (CHF) 3.50 3.50 4.00 4.00 4.30 4.59 Book value (CHF) 49.95 51.39 46.84 45.76 47.76 49.90 Free cash flow (CHF) -1.38 -1.15 2.26 4.28 8.07 7.28 Avg. no. of shares (mn) 34.1 31.9 34.0 34.0 34.0 34.0 Market cap. (avg./current; CHF mn) 3,829.3 3,679.0 3,376.6 2,727.2 3,252.9 3,252.9 Enterprise value (CHF mn) 4,121.5 3,974.6 3,780.4 3,121.4 3,508.6 3,309.8 Valuation P/E adj. (x) 29.0 20.8 15.8 15.7 16.4 15.2 P/BV (x) 2.2 2.2 2.1 1.8 2.0 1.9 FCF/EV (%) -1.3 -1.1 2.1 4.0 7.8 7.5 FCF yield (%) (FCF/Mcap.) -1.2 -1.0 2.3 5.3 8.4 7.6 Dividend yield (%) 3.1 3.0 4.0 5.0 4.5 4.8 EV/Sales (x) 1.4 1.2 1.0 0.9 1.0 0.9 EV/EBITDA adj. (x) 14.9 12.1 9.2 10.1 7.7 6.9 EV/EBIT adj. (x) 30.2 21.6 15.7 20.2 11.8 10.4 EV/CE (x) 1.6 1.7 1.7 1.4 1.6 1.5 ROCE/WACC adj. (x) 1.0 1.5 1.8 1.5 1.7 1.7 Key company data Sales growth (%) 6.0 10.4 10.8 -6.7 4.0 3.1 EBITDA adj. growth (%) 10.7 18.6 25.4 -25.3 47.9 5.6 EBITDA adj. margin (%) 9.1 9.8 11.1 8.9 12.6 12.9 EBIT adj. margin (%) 4.5 5.5 6.5 4.5 8.2 8.5 Net adj. margin (%) 2.7 3.4 4.4 2.9 5.7 5.9 Free cash flow margin (%) -1.5 -1.1 2.1 4.2 7.6 6.6 Payout ratio (%) 143.4 98.4 88.4 142.3 73.0 72.5 Gearing (%) (net debt/equity) 13.2 14.6 21.8 21.7 12.2 5.7 Net debt/EBITDA (x) 0.8 0.7 0.8 1.1 0.4 0.2 Equity ratio (x) (equity/total assets) 41.3 33.5 31.2 30.8 31.5 32.3 Capital employed (CHF mn) 2,592.1 2,281.6 2,169.1 2,187.7 2,182.5 2,222.1 ROCE adj. (%) 8.4 12.0 14.6 12.1 13.3 13.9 Income statement (CHF mn) Turnover 3,049.0 3,364.8 3,728.5 3,477.9 3,616.9 3,730.0 EBITDA 277.4 328.9 412.5 308.2 455.7 481.5 EBITDA adj. 277.4 328.9 412.5 308.2 455.7 481.5 EBIT 151.9 188.2 245.4 154.9 296.7 317.2 EBIT adj. 136.5 183.8 241.0 154.9 296.7 317.2 EBT 125.4 165.6 212.8 134.0 275.4 295.6 Net profit after minorities 83.2 113.6 154.0 95.6 200.4 215.3 Net profit adj. 83.2 114.4 163.9 100.1 205.1 220.2 Balance sheet (CHF mn) Non-current assets 1,991 2,058 2,172 2,107 2,042 1,971 thereof goodwill 0 0 0 0 0 0 Current assets 2,127 2,841 2,938 2,950 3,114 3,285 Total assets 4,117 4,898 5,109 5,057 5,156 5,256 Shareholders' equity 1,702 1,641 1,594 1,557 1,625 1,698 Total equity and liabilities 4,117 4,898 5,109 5,057 5,156 5,256 Net debt 225 239 347 337 199 97 Cash flow (CHF mn) Cash flow from operations 183.7 260.7 319.6 234.2 368.7 341.0 of which change in working capital -17.6 -4.3 -14.3 -18.4 5.5 -42.3 Cash flow from investments -230.8 -297.4 -242.6 -88.5 -94.0 -93.3 of which investment in fixed assets -81.2 -96.2 -114.9 -76.5 -94.0 -93.3 Free cash flow -47.1 -36.7 77.0 145.7 274.6 247.7 Dividends paid -119.4 -43.1 -81.2 -93.0 -136.1 -146.3 Cash flow from financing activities 106.3 669.1 -123.2 -136.1 -136.1 -146.3 Change in cash position 59.3 606.3 -59.7 9.6 138.5 101.4 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

Swiss Prime Site High current retail & hospitality exposure and low visibility mid-term Switzerland  Investment case: Compared to the pure, yielding-focused PSP model (and its superior Real Estate geographic portfolio setup), Swiss Prime Site’s investment case is less appealing to us. Reuters: SPSN.S Bloomberg: SPSN SE The relatively high exposure to hotels-gastronomy-hospitality retail of 33% (target ~25%) Reduce remains a drag on sentiment and provides a relatively higher negative revaluation risk Closing price as of in our view – also as structural issues in retail remain (affecting Jelmoli operations) 06-Jan-21 CHF 86.30 and the recovery in (city) hotels and gastronomy is expected to be slow. Target price CHF 82.00 High/Low (12M) CHF 123.70/74.75 Although we like that the new post-CMD strategy with the planned disposals makes the Market cap. CHF mn 6,554 Swiss Prime Site investment case more self-sustainable from a financing perspective, Enterprise value CHF mn 11,508 it also leads to more question marks and lower visibility with regard to what a sustainable Free float 82.8% medium-term portfolio will look like. We are also somewhat nervous regarding the Avg. daily turnover CHF mn 13.86 potential asset swaps from Swiss Prime Site real estate to SPS Solutions from a governance standpoint. Especially as external observers, we find it difficult to ensure that Price relative to Index such deals are in the shareholders’ best interests.

Overall, we think the strategy and targets make it more difficult to hold management accountable for results (i.e. why are there no clear underlying profitability targets excl. one-offs?): Particularly in a sector liked for its defensive characteristics, a lack of visibility is a negative in our view. Swiss Prime Site currently trades close to our adj. NAV; in relative terms (i.e. vs. PSP), we see the valuation as slightly attractive (given the negative interest rate might justify a premium and given adjacent operations) but on low visibility, retail exposure, conglomerate structure and governance issues, we regard a valuation discount as justified. Alternatively, purely by applying the historical discount to adj. NAV (i.e. 15%), one can still see downside on current levels: Reduce.

Performance (%) 1M 3M 6M See our 1 December update “We think the mid-term strategy needs more clarity” for a Absolute 5.3 2.3 -1.8 full set of updated financials and our views on Swiss Prime Sites announcements at rel. SPI 1.7 -2.3 -7.1 their Autumn 2020 Capital Markets Day (CMD). rel. STOXX Europe 600 2.2 -8.8 -11.2 rel. SXXP Real Estate 3.8 -4.7 -8.7  What to ask the management?

– Could you provide an update on your coronavirus pandemic expected impact of a maximum of CHF 15mn given the second wave of lockdowns? Analyst: Andreas von Arx – How do you see the market environment (i.e. transaction market, renewal rents, etc.)? +41 43 388 9257 [email protected] – Why does it strategically make sense to run a shopping center (Jelmoli), a real estate services provider (Wincasa) and a real estate asset manager (Swiss Prime Site Solutions) under one roof? Would a clear separation not be preferable for shareholders and reduce overhead costs?

– Could you provide an update on your FINMA application for real estate funds and your launch plans of real estate funds in 2021? What is Swiss Prime Sites Solutions edge in running a real estate fund versus competitors? How can you ensure there are no corporate governance issues when potentially moving assets from your yielding portfolio to listed real estate funds?

– Could you provide more visibility on your asset disposal plans – i.e. a stable portfolio of CHF 12bn while adding CHF 1.4bn in developments? Given the failed EPIC Suisse IPO, where will the demand for your retail properties to be disposed come from?

– Given a lack of clear medium-term group targets (i.e. underlying EBITDA level), on what metrics should investors judge the management’s success rate (given net disposals are unknown, one-off versus sustainable results, potential transfers between own units)?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) % 2019 2020E 2021E 2022E Net income 607.6 368.4 183.0 154.9 -36.6 NAV prem./discount 5.5 -10.2 -4.0 -2.1 FFOps (CHF) 3.71 6.15 3.67 3.62 -0.8 FFO yield 4.1 7.5 4.3 4.2 NAVps (CHF) 86.32 91.07 89.85 88.19 0.7 Dividend yield 4.2 4.2 3.93.9 Source: Company data, Baader Helvea Equity Research

Swiss Prime Site

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS adjusted (CHF) 4.30 3.95 4.14 6.11 3.76 3.76 Indirect investment result (CHF) -0.03 0.32 3.86 -1.26 -1.35 -1.72 EPS reported (CHF) 4.27 4.27 8.00 4.85 2.41 2.04 FFOps (CHF) 4.01 3.54 3.71 6.15 3.67 3.62 Dividend (CHF) 3.80 3.80 3.80 3.40 3.40 3.40 Book value (CHF) 66.85 67.74 71.87 76.83 75.84 74.48 NAV adj. (CHF) 82.74 87.14 86.32 91.07 89.85 88.19 Number of shares (outstanding; mn) 71.5 75.9 75.9 75.9 75.9 75.9 Share price (avg./current; CHF) 86.11 87.13 91.05 81.80 86.30 86.30 Market cap. (avg./current; CHF mn) 6,156.1 6,327.2 6,915.0 6,212.3 6,554.1 6,554.1 Enterprise value (CHF mn) 10,847.0 11,218.6 12,122.1 11,245.4 11,507.9 11,271.8 Valuation P/E adj. (x) 20.0 22.1 22.0 13.4 23.0 23.0 FFO yield (%) 4.7 4.1 4.1 7.5 4.3 4.2 Dividend yield (%) 4.4 4.4 4.2 4.2 3.9 3.9 Implied yield (EBITDA/EV) (%) 3.9 3.9 3.7 3.2 3.4 3.5 P/NAV (x) 1.04 1.00 1.05 0.90 0.96 0.98 P/BV (x) 1.29 1.29 1.27 1.06 1.14 1.16 ROCE/WACC (x) 1.10 1.08 1.01 1.40 1.00 1.03 (EV/CE)/(ROCE/WACC) (x) 0.84 0.84 0.93 0.62 0.87 0.85 Key company data Rental income growth (%) 3.7 2.0 1.6 -11.7 0.2 -1.9 EBITDA growth (%) 3.5 3.1 3.8 -19.5 9.3 -0.2 FFO growth (%) 7.4 -6.8 9.5 54.6 -40.3 -1.3 FFO per share growth (%) 7.5 -11.7 4.8 65.8 -40.3 -1.4 DPS growth (%) 2.7 0.0 0.0 -10.5 0.0 0.0 EBITDA margin adj. (%) 89.3 90.2 92.2 84.0 91.6 93.2 ROE recurring (%) 0.0 0.0 0.0 0.0 0.0 0.0 Net gearing (%) 98.2 95.1 95.4 86.3 86.0 83.4 Net loan-to-value (%) 46.0 46.1 46.5 46.9 47.6 46.6 Equity ratio (%) 43.1 43.9 44.4 47.0 46.8 47.3 Interest cover (x) 5.5 5.7 6.0 5.6 5.5 5.5 Income statement (CHF mn) Total revenues 1,168.4 1,473.7 1,404.8 806.1 1,065.6 1,242.8 Gross rental income 469.9 479.4 486.9 430.1 431.1 423.0 Net rental income 337.3 344.8 347.9 337.7 367.5 360.1 EBITDA 419.6 432.5 448.9 361.3 395.0 394.4 EBIT 469.0 477.5 627.3 229.8 254.2 220.4 EBT 394.8 404.0 559.5 374.9 197.1 164.2 EBT adjusted 328.9 336.5 356.1 486.7 317.2 317.4 Net profit after minorities 305.3 310.3 607.6 368.4 183.0 154.9 Funds from operations (FFO) 295.9 275.9 302.1 467.1 278.9 275.3 Balance sheet (CHF mn) Investment property 10,180 10,544 11,030 11,321 11,183 10,773 Non-current assets 10,761 11,299 11,831 11,991 11,849 11,515 Cash and equivalents 160 185 174 189 184 148 Current assets 334 410 470 434 460 453 Total assets 11,095 11,709 12,301 12,425 12,309 11,969 Equity 4,777 5,145 5,459 5,835 5,760 5,656 Interest bearing debt 4,851 5,076 5,381 5,222 5,138 4,866 Total equity and liabilities 11,095 11,709 12,301 12,425 12,309 11,969 Net debt 4,691 4,891 5,207 5,033 4,954 4,718 Cash flow (CHF mn) Cash flow from operating activities 384.3 262.9 338.1 232.6 320.2 308.5 Cash flow from investing activities -397.6 -498.1 -341.0 231.2 17.3 185.8 Free cash flow -13.3 -235.3 -2.9 463.8 337.5 494.3 Dividend paid -264.5 -271.6 -288.6 -288.6 -258.2 -258.2 Cash flow from financing activities 12.2 260.7 -8.5 -448.1 -342.4 -530.8 Changes in cash position -1.2 25.4 -11.5 15.6 -4.9 -36.5 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Baader Helvea Equity Research COMPANY FLASH

8 January 2021

VAT Group Best-in-class pure play in semi industry comes with premium valuation Switzerland (yet justified)

Capital Goods  Investment case: VAT is the undisputed leader in the global vacuum valve market and Reuters: VACN.S Bloomberg: VACN SE is our preferred company among Swiss semi suppliers (Comet and Inficon) given its Add superior growth, profitability and cash flow/return profile and sharp strategic profile. Closing price as of In a long-term perspective, the growth prospects for VAT remain intact and upbeat due to 06-Jan-21 CHF 219.60 VAT’s unrivalled competitive positioning (8x bigger than No. 2, further share gains) Target price CHF 185.00 and VAT’s vacuum valves benefiting disproportionately from the continuous increase of High/Low (12M) CHF 224.20/107.65 the vacuum intensity in chip manufacturing. VAT remains best positioned to benefit Market cap. CHF mn 6,585 Enterprise value CHF mn 6,751 disproportionately from a continued upswing in the semi industry, which justifies a Free float 100.0% prolonged premium valuation. Avg. daily turnover CHF mn 17.18  What to ask the management? Price relative to Index – What is your current business model and how has VAT changed, for instance, over the past 5-10 years? What drove the decision to go pure play, focused on high-end vacuum valves?

– Comment on the major steps you are taking to achieve your 2025 targets of CHF 1.1bn sales and 30-35% EBITDA margin over the cycle. What are the major risks which could threaten VAT to achieve these targets?

– What measures has VAT taken since the last downturn in 2011-2013 during which sales and EBITDA margins declined?

– Where are we in the current investment cycle for semiconductors and what can we expect on the profitability side in 2021 given the current recovery phase and VAT’s Performance (%) 1M 3M 6M flexible cost structures? Absolute 10.9 23.9 24.6 rel. SPI 7.3 19.3 19.3 rel. STOXX Europe 600 7.8 12.8 15.1 – How are the discussions you currently have with your three largest customers (roughly rel. SXXP Industrials 7.0 10.8 4.1 40% of your total sales)?

– What is the current (and maximum capacity) utilization of the new production plant in Malaysia? Analyst: VAT is superior in terms of product spectrum (broader), size (largest player) and technology Jorg Schirmacher, CFA – +41 43 388 9267 (best performance). What do you expect from other market participants and why do [email protected] you think VAT can further increase its market share?

– Please explain VAT’s positioning within the value chain of the vacuum/process industry.

– Your products (isolation valves, transfer and control valves) are high-tech and complex. Using one of your products, can you explain its key characteristics, complexity in production (barriers to entry?), product life-cycle and the benefits your products bring the customers (vs. peers)?

Key financials Valuation ratios CHF mn 2019 2020E 2021E 2022E CAGR (%) x 2019 2020E 2021E 2022E Sales 570.4 688.0 765.6 823.2 13.0 EV/Sales 6.7 8.0 8.8 8.2 EBIT adj. 107.7 171.0 212.9 232.1 29.2 EV/EBIT adj. 35.2 32.2 31.7 29.0 EPS adj. (CHF) 2.50 4.31 5.39 5.87 32.9 P/E adj. 48.2 41.1 40.7 37.4 Source: Company data, Baader Helvea Equity Research

VAT Group

Key data

FY 31 Dec. 2017 2018 2019 2020E 2021E 2022E Share data EPS reported (CHF) 3.86 4.53 2.50 4.31 5.39 5.87 EPS adjusted (CHF) 5.24 4.53 2.50 4.31 5.39 5.87 Dividend (CHF) 4.00 4.00 4.00 4.31 5.39 5.87 Book value (CHF) 18.63 18.82 17.46 17.77 18.84 19.33 Free cash flow (CHF) 3.62 4.11 4.57 3.53 5.26 5.74 Avg. no. of shares (mn) 30.0 30.0 30.0 30.0 30.0 30.0 Market cap. (avg./current; CHF mn) 3,606.2 3,900.9 3,612.6 5,310.5 6,584.9 6,584.9 Enterprise value (CHF mn) 3,771.1 4,086.3 3,795.6 5,506.4 6,751.2 6,739.5 Valuation P/E adj. (x) 23.0 28.7 48.2 41.1 40.7 37.4 P/BV (x) 6.5 6.9 6.9 10.0 11.7 11.4 FCF/EV (%) 1.6 1.8 2.0 1.6 2.3 2.6 FCF yield (%) (FCF/Mcap.) 3.0 3.2 3.8 2.0 2.4 2.6 Dividend yield (%) 3.3 3.1 3.3 2.4 2.5 2.7 EV/Sales (x) 5.4 5.9 6.7 8.0 8.8 8.2 EV/EBITDA adj. (x) 17.5 19.0 24.6 26.3 26.7 24.7 EV/EBIT adj. (x) 20.8 22.7 35.2 32.2 31.7 29.0 EV/CE (x) 4.6 4.7 4.5 6.2 7.4 7.2 ROCE/WACC adj. (x) 2.8 2.6 1.6 2.4 2.9 3.0 Key company data Sales growth (%) 36.3 0.8 -18.3 20.6 11.3 7.5 EBITDA adj. growth (%) 36.2 0.1 -28.4 36.1 20.6 8.1 EBITDA adj. margin (%) 31.1 30.8 27.0 30.5 33.0 33.2 EBIT adj. margin (%) 26.2 25.7 18.9 24.9 27.8 28.2 Net adj. margin (%) 22.7 19.4 13.1 18.8 21.1 21.4 Free cash flow margin (%) 15.7 17.7 24.0 15.4 20.6 20.9 Payout ratio (%) 103.6 88.3 160.3 100.0 100.0 99.9 Gearing (%) (net debt/equity) 25.8 26.2 27.6 29.4 22.4 19.8 Net debt/EBITDA (x) 0.7 0.7 0.9 0.7 0.5 0.4 Equity ratio (x) (equity/total assets) 56.3 58.3 53.8 53.1 53.8 53.9 Capital employed (CHF mn) 826.5 868.7 846.3 888.3 910.9 933.8 ROCE adj. (%) 20.6 18.5 11.3 17.5 20.6 21.6 Income statement (CHF mn) Turnover 692.4 698.1 570.4 688.0 765.6 823.2 EBITDA 215.1 215.2 154.0 209.6 252.7 273.1 EBITDA adj. 215.1 215.2 154.0 209.6 252.7 273.1 EBIT 181.6 179.8 107.7 171.0 212.9 232.1 EBIT adj. 181.6 179.8 107.7 171.0 212.9 232.1 EBT 134.7 166.6 99.0 157.6 199.5 218.8 Net profit after minorities 115.7 135.8 74.8 129.2 161.6 176.1 Net profit adj. 156.9 135.8 74.8 129.2 161.6 176.1 Balance sheet (CHF mn) Non-current assets 681 687 673 668 659 651 thereof goodwill 0 0 0 0 0 0 Current assets 310 281 300 335 391 426 Total assets 991 968 973 1,003 1,050 1,076 Shareholders' equity 558 564 523 533 565 580 Total equity and liabilities 991 968 973 1,003 1,050 1,076 Net debt 144 148 144 157 127 115 Cash flow (CHF mn) Cash flow from operations 155.6 171.1 154.8 139.6 188.3 205.0 of which change in working capital -35.3 -13.3 25.0 -28.2 -13.1 -12.1 Cash flow from investments -47.1 -47.8 -17.9 -33.7 -30.6 -32.9 of which investment in fixed assets -47.6 -48.2 -18.1 -33.7 -30.6 -32.9 Free cash flow 108.5 123.2 137.0 105.9 157.7 172.1 Dividends paid -110.8 -119.8 -119.9 -119.9 -129.2 -161.6 Cash flow from financing activities -99.5 -116.4 -108.1 -118.4 -127.6 -159.9 Change in cash position 9.4 6.4 27.9 -12.5 30.0 12.1 Source: Company data, Baader Helvea Equity Research

2 8 January 2021 Zurich Baader Europe Multi-line Insurance / Switzerland Target RoE above 14%

Add Upside: 8.49% Our investment view Target Price (6 months) CHF 418 Share Price CHF 385 Zurich Financial Services Group is one of the top five global insurers. Zurich Market Cap. CHFM 57,581 considers itself to be second in market share worldwide in the non-life business, Price Momentum STRONG behind Allianz. However, in terms of gross written premiums (GWP), it is in fourth Extremes 12Months 251 413 position. The ranking difference depends on the somewhat strange construction of Fundamental Strength 7 /10 Zurich’s US business. Farmers is Zurich Group’s main market brand for personal Bloomberg ZURN SW Equity insurance in the US, providing homeowner, auto and life insurance, with more Reuters ZURN.S than 20 million policies. The insurance business belongs to Farmers Exchanges, which is managed by Zurich although not owned. The special construction of the US business should deliver Zurich a stable pre-tax profit contribution from Farmers Management Services, despite the vulnerability of the US market. Zurich announced in December 2020 that its subsidiary Farmers Group (FGI) and Farmers Exchanges have agreed to acquire MetLife’s US property and casualty business for $3.9bn. The backbone of Zurich is its non-life insurance (Property & Casualty) business which contributes around 50% to group profits in normal years. Zurich has been the most profitable insurance company in our universe for years. It released at its investors day in November 2019 new targets for the period 2020 to 2022. Zurich is targeting to generate a ROE in excess of 14% (old 12% for 2017/19) on a business operating profit after tax (BOPAT ROE) and an Analyst : Dieter HEIN organic growth of EPS of at least 5% per annum for FY2020 to FY2022. Other Equity Sales targets for this period are a cumulative cash remittance in excess of $11.5bn (old [email protected] above $9.5bn) at the holding, a Z-ECN (Zurich Economic Capital Model) range Frankfurt +49 69 1388 1357 between 100% and 120% (unchanged). Unchanged is the dividend policy based London +44 20 7054 7100 Munich +49 89 5150 1850 on sustainable earnings growth targeting a payout of around 75%. Zurich said Zurich +41 43 388 9200 COVID-19-related claims in 2020 are expected to remain within the group’s New York +1 212 935 5150 earnings risk tolerance. Experience to date and the group’s scenario analysis PERF 1w 1m 3m 12m suggest that P&C claims could total c.$750m for FY2020, of which all the $750m Zurich Insurance Group 3.05% 6.38% 17.3% 2.34% has been recognised in H1 20. This scenario does not include any broader Insurance 2.71% 3.83% 18.5% -7.57% positive or negative impacts resulting from lower economic activity. STOXX 600 1.54% 3.45% 11.1% -2.45%

What to ask the management? Sector Opinion Underweight Strongest upside CNP - Zurich’s subsidiary Farmers Group (FGI) and Farmers Exchanges have agreed Worst potential Storebrand to acquire MetLife’s US property and casualty business for $3.9bn to strengthen the US business of Farmers Exchanges. Can you elaborate a little bit more on the Last updated: 11/12/2020 12/19A 12/20E 12/21E 12/22E business logic of the acquisition, your targets and the benefits for Zurich? Adjusted P/E (x) 10.6 13.2 12.6 11.6

- M&A was always an important element for Zurich to increase volume and market Dividend yield (%) 5.86 5.91 5.46 5.98 shares in target countries/regions. What are the conditions for an acquisition or P/Book (x) 1.46 1.54 1.81 1.72 for a sale? How important are distribution agreements in the future? Adjusted Eps ($) 32.5 27.4 34.7 37.9 - What are your expectations and outlook regarding the COVID-19 impact on the Growth in EPS (%) 9.56 -15.8 26.7 9.33 insurance sector and, specifically, Zurich for FY2020 and the current year? What Dividend (CHF) 20.0 20.0 21.0 23.0 challenges and opportunities do you see in your international retail markets? Revenues ($M) 71,791 46,400 58,750 60,930 - What is your worst case scenario regarding COVID-19-related claims and Operating profit ($M) 6,799 5,825 7,092 7,743 reserves? What share of your COVID-19-related claims and reserves in H1 20 is Attributable net profit ($M) 4,147 3,080 4,419 4,941 classified as IBNR reserves and are driven by estimates? ROE (after tax) (%) 14.9 11.7 14.6 15.3 Embedded Value per - Are your invested assets hedged regarding further market downturns and what 252 273 245 246 share ... are the hedging costs? Do you hedge your portfolios by futures or options? Gearing (%) 10.7 14.3 16.4 14.6 - What challenges and opportunities do you see in your industrial lines business? What pricing trends is Zurich observing in the industrial lines business? Sales by Geography Valuation Summary

Benchmarks Value Weight Largest comparables

Embedded value CHF 397 40% RSA P/E CHF 492 20% Allianz NAV/SOTP per share CHF 406 15% AXA Dividend Yield CHF 454 15% P/Book CHF 313 10% TARGET PRICE CHF 418 100%

Consolidated P&L Accounts 12/19A 12/20E 12/21E Balance Sheet 12/19A 12/20E 12/21E Net Insurance related income $M 70,662 45,200 57,450 Investments related to Insur. Activities $M 319,523 317,800 325,200 Operating revenues $M 71,791 46,400 58,750 Total assets $M 404,688 403,300 409,070 Staff costs $M -6,229 -6,370 -6,500 Ordinary shareholders' equity $M 35,004 34,661 36,005 Combined ratio (non life insurance) % 96.0 98.0 97.0 Of which unrealised capital gains $M 3,985 3,500 3,300 Gross Operating Profit $M 7,066 6,030 7,250 Preference shares $M Underlying operating profit $M 6,799 5,825 7,092 Minority interests $M 1,545 1,550 1,580 Operating profit $M 6,099 4,825 6,342 Subordinated Debt $M 12,000 14,300 14,000 Corporate tax $M -1,716 -1,510 -1,670 Provisions for pensions $M 2,203 -1,911 -1,875 Attributable net profit $M 4,147 3,080 4,419 Liabilities arising from Insur. Activities $M 241,327 238,100 242,900 Adjusted attributable net profit $M 4,847 4,080 5,169 Net debt (cash) $M 4,120 5,800 6,000 Cashflow Statement Total liabilities and shareholders' equity $M 404,688 403,300 409,070 Average net debt (cash) $M 3,742 4,960 5,900 Adjusted EBIT $M 7,066 6,030 7,250 Cash Incr. (Decr.) $M -793 -500 -1,600 Solvency & Risks Ratios Net investments in shares $M Solvency margin (given by group) $M 44,800 46,000 47,000 Total investment flows $M -2,206 -600 -550 ROE (after tax) % 14.9 11.7 14.6 Dividends (parent company) $M -2,819 -3,080 -2,992 RoEmb.V % 13.1 10.1 14.3 Interest expenses relating to LT fundi... $M 0.00 0.00 0.00 Gross gearing (at book value) % 10.7 14.3 16.4 New shareholders' equity $M -101 Total debt gross/market cap % 23.5 26.9 21.5 Change in gross debt $M Valuation Ratios Total financial flows $M -3,302 -3,480 -3,292 Reference P/E (benchmark) x 10.6 13.2 12.6 Change in net debt position $M -583 -460 538 P/Book x 1.46 1.54 1.81 Per Share Data Dividend yield % 5.86 5.91 5.46 No of shares net of treas. stock Mio 149 148 149 Embedded Value Number of diluted shares (average) Mio 149 149 149 Life Embedded Value $M 22,123 22,900 22,240 benchmark EPS $ 32.5 27.4 34.7 Non life Embedded Value $M 15,000 17,500 14,000 Restated NAV per share $ Total Embedded value $M 37,123 40,400 36,240 Net dividend per share CHF 20.0 20.0 21.0

Analyst : Dieter Hein, Changes to Forecasts : 11/12/2020.

This research publication was completed at 10:01 AM (CET) on 07-01-2021. In relation to the author of this research publication the General statements (Section A) contained in the disclaimer at the end of this document are supplemented as follows: The author of this publication is AlphaValue who, pursuant to a cooperation agreement with Baader Bank provides certain research & distribution services to the Baader Bank Group. AlphaValue does not have nor seek any business with companies covered in AlphaValue Research paid by subscription. As a result, investors can be confident that there is no conflict of interest that could affect the objectivity of AlphaValue Research. © 2021, AlphaValue All rights reserved. This publication is strictly for subscriber’s own, non-commercial, internal use. No part of it may be reproduced, resold, stored or transmitted in any printed, electronic or other form, or used for generating or marketing any printed or electronic publication, service or product.

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