Global Industrials

28 May 2013 Americas/United States Equity Research Electrical Equipment / Capital Goods

i-Spy Global Industrials Weekly Research Analysts COMMENT Julian Mitchell 212 325 6668 [email protected] More signs of Japanese manufacturing Charles Clarke 212 538 7095 renaissance; rising competition in industrial [email protected] Jonathan Shaffer automation, but bottoming demand 212 325 1259 [email protected] ■ Further signs of Japanese manufacturing renaissance: In an earlier i-Spy, we noted that Nissan had delayed the migration of certain car model production out of Japan; now Kawasaki has announced it will bring back production of mid- sized motorbikes from Thailand to Japan due to the falling Yen. Many of KHI's motorbikes manufactured in Thailand are sold in the US; production will move This Week (5/27/2013 - 6/2/2013) gradually to Japan beginning this autumn. Macro Events ■ China to develop large aero engines within a decade: The MITI's industry 5/28 US May Dallas Fed Mfg. Activity plan last week targets 5% local market share for the domestic commercial 5/28 US May Richmond Fed aerospace industry by 2020 (C919 orders have already reached almost 400 5/30 Euro-Zone Business Climate aircraft), and an assembly line for medium-power aero engines by 2015, with 5/31 US May Chicago PMI larger engines to be produced within 10 years. 6/1 China PMI Mfg ■ Industrial automation competition increasing; PLC role under threat: Company Events Meetings at EPG and at ETN confirmed several themes we noted following our 5/27-30 Siemens AG Roadshow - Beijing trip to Hannover's Automation Fair in April. In particular, Schneider emphasized 5/28 Landstar Q2 2013 Guidance its push into 'hybrid' (between process and discrete automation) markets via its 5/28 Havells India Ltd Y 2013 'Plantstruxure' offering, and we heard from ETN that logic / control functionality 5/29 BEML Ltd Y 2013 within the plant is moving increasingly away from the PLC (into other devices 5/29 Tata Motors Ltd Y 2013 such as drives, the HMI etc). 5/29 BGR Energy Systems Y 2013 ■ Japanese industrial automation - bottoming demand trends: At its strategy 5/30 Joy Global Inc Q2 2013 briefing, Mitsubishi Electric noted that it is seeing factory automation demand 5/30 Esterline Q2 2013 bottom out, due to a recent recovery in Korean LCD demand, numeric controls in 5/30 Suzlon Energy Y 2013 China, and microprocessors in China / Taiwan. Our Japan Team raised its target 5/30 Mahindra & Mahindra Y 2013 prices for Yaskawa (a hike to FY guidance is expected, due to recovering capex 5/31 Pall Corp Q3 2013 by SPE and Auto customers, and FX), and Fanuc (per THK data, robodrill orders appear to be recovering, and Auto capex remains robust); both are OP-rated. ■ Hitachi becoming more aggressive in global power markets: In recent years, much attention has been focused on Mitsubishi Heavy's potential to win share in gas turbines, and its J Series turbines have had some notable successes. Hitachi also appears to have expansionist ambitions outside of Japan - its President was quoted last week as saying that GE's 'style of lump sum contracts for gas turbines is not fully satisfactory for customers;' Hitachi hopes to win more business due to the breadth of its offerings, including EPC work. .Exhibit 1: Global Performance Snapshot: The best and worst last week 10 Best Stocks 1-Week 10 Worst Stocks 1-Week 10 Best Sectors 1-Week 10 Worst Sectors 1-Week TBEA Co Ltd 20.2% Nabtesco -14.3% European Wind Energy 8.4% Japan Machine Tools -13.5% Vestas 12.0% Punj Lloyd Ltd -12.1% China Power Equipment 1.5% Japan Conglomerates -10.3% Severfield 9.3% KEC International Ltd -12.0% Korea Engineering & Construction 0.8% Japan Infrastructure Machinery -9.2% China Ming Yang Wind Power Group Ltd. 6.8% Hitachi Construction Machinery -12.0% US Engineering & Construction 0.5% Japan Auto Related Consumables -7.9% Airtac 6.3% Amada -11.6% US Environmental Services 0.4% Japan Automotive -7.1% Teco 6.2% NTN -11.5% European Electrical/Electronics 0.3% India Capital Goods -5.9% Rexnord 5.7% Mitsubishi Electric -10.7% Korea Industrials / Shipbuilding / Autos 0.1% China Automotive -4.4% Kia Motors 5.5% Nissan Motor -10.4% MEA Industrials -0.1% Japan/Taiwan Factory Automation -4.3% Fiat 5.4% BEML Ltd -10.4% European Aerospace & Defense -0.2% China Infrastructure Construction -3.0% FosterWheeler 5.3% THK -10.4% UK Capital Goods -0.3% India Automotive -2.3% Source: DataStream.

S DISCLOSURE APPENDIX CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, INFORMATION ON TRADE ALERTS, ANALYST MODEL PORTFOLIOS AND THE STATUS OF NON-U.S ANALYSTS. FOR OTHER IMPORTANT DISCLOSURES, visit www.credit-suisse.com/researchdisclosures or call +1 (877) 291-2683 US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

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28 May 2013 Table of contents

Macro Snapshot: CS Six NT Demand Indicators 3 Performance Summary 6 Price Commentary Tracker 7 Recent Industrial Transactions 8 Recommended Reading 9 Recommended Reading Summaries 12 Macro/ Strategy 12 Global Research 12 Americas Research 13 EMEA Research 31 Asia Research 34 Global Macro Forecasts 42 Valuation & Performance 43 Americas Capital Goods Valuation Summary 44 EMEA Capital Goods Valuation Summary 47 Asia Capital Goods Valuation Summary 49 CS Global Capital Goods Team 52 Global Calendars 53 Americas 53 EMEA 53 Asia 54

i-Spy Global Industrials Weekly 2 28 May 2013 Macro Snapshot: CS Six NT Demand Indicators

Exhibit 2: Demand Indicators – Six Month Outlook Metric Recent / Current Trend 6 month outlook Delta Lead Indicators / surveys PMIs stabilized Likely moving sideways = Factory / durable goods orders Reacceleration Reacceleration + Coincident trends IP momentum peaking Deceleration - Company data Muted sales growth; soft orders Orders to rebound + Supply side Patchy in China, stable elsewhere Pick-up likely + Transport / distributor data Traffic growth is resilient; destocking Restocking likely + Source: Credit Suisse Research. Indicator #1 Lead Indicators / Surveys Germany IFO

■ The Germany IFO Business Climate increased to 105.7 in May against April reading of 104.4. The economists had expected it to be unchanged. The Current Assessment rose to 110 from 107.2; while Expectations index remained at 101.6, same as April.

Eurozone and Germany Flash Mfg PMIs

■ Eurozone PMI Mfg flash reading increased to 47.8 in May against the consensus of 47 and April reading of 46.7. Germany PMI flash reading for May increased to 49 from 48.1 in April.

Indicator #2 Factory / Durable Goods Orders US Durable Goods Orders

■ According to Equipment Leasing and Finance Association, the overall new business volume for April was $7.5 billion, +23% YoY. On MoM, the new business volume +10%. Year to date, cumulative new business volume was +8%. Separately, the Equipment Leasing & Finance Foundation's Monthly Confidence Index for May increased to 56.7 from April index of 54.0, indicating industry participants’ increasing optimism despite continuing concerns over the economy.

Indicator #4 Company Data Emerson Orders

■ EMR April orders (3MMA) dropped -3% exc-FX, vs -2% for the March 3MMA. Climate orders were flat exc-FX after +3% organically in March, showing incremental softness. Process Automation remains sluggish with 3MMA orders up slightly, consistent with +3% in March. IA saw another quarter of a low teens decline. Network Power orders exc-FX were down at a high single digit rate, in- line with March.

Caterpillar Dealer Statistics

■ Total machine sales (3MMA) fell 9% y/y vs. down 11% in March and down 13% in February. NA saw sales decline 18% y/y vs. down 11% and 12% in March and April, respectively. The decline in NA was primarily due to mining and coal which

i-Spy Global Industrials Weekly 3 28 May 2013

were fairly strong last year Engine Sales were down 5% y/y in April, an improvement from down 6% in March and down 7% in Feb.

Indicator #5 Supply side Indicator Equipment Leasing and Finance Confidence Index

i-Spy Global Industrials Weekly 4

Exhibit 3: Demand Indicators

Indicator #1 Lead Indicators/ Surveys Indicator #1 Lead Indicators/ Surveys Indicator #2 Factory/ Durable Goods Orders

Germany IFO Eurozone, Germany Flash Mfg PMIs US Durable Goods Orders

IFO Business Climate Nondefense Cap Goods excl Aircrafts (YoY%) 130 65 Euro-Zone Mfg PMI Germany Mfg PMI 40 IFO Business Expectations Durable Goods excl Transportation (YoY%) IFO Current Situation 60 30 Durable Goods (YoY%) 120 20 55

i 110 - 10

Spy 50

GlobalIndus 0 100 45 -10

90 -20 40

trialsWeekly Flash PMIs -30 80 35 -40

70 30 -50 May-03 May-05 May-07 May-09 May-11 May-13 May-08 May-09 May-10 May-11 May-12 May-13 Apr-07 Apr-08 Apr-09 Apr-10 Apr-11 Apr-12 Apr-13

Source: Datastream Source: Markit Source: Datastream

Indicator #4 Company Data Indicator #4 Company Data Indicator #5 Supply side Indicators

Emerson Orders Caterpillar Dealer Statistics Equipment Leasing and Finance business volume

9 New Business Volume (USD bn) YoY% (RHS) 20% 11 50% CAT Machinery CAT Engine 7 10 15% 40% 5 9

10% 30% 3 8

7 20% 1 5% 6 10% -1 ($bn) volume buisnessNew 0% 5 -3 0% 4 -5% -5

3 -10%

Apr-11 Oct-11 Apr-12 Oct-12 Apr-13 Jun-12

Jun-11 -10%

Feb-12 Feb-13

Dec-11 Dec-12

Aug-11 Aug-12

Apr-12 Apr-11 Oct-11 Oct-12 Apr-13

Jun-11 Jun-12

Feb-12 Feb-13

Aug-11 Dec-11 Aug-12 Dec-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 May28 2013 Source: Company Data Source: Company Data Source: Equipment Leasing and Finance Association

28 May 2013 Performance Summary

Exhibit 4: Company Performance Americas EMEA Asia

Best Performers 1-Week Best Performers 1-Week Best Performers 1-Week Rexnord 5.7% Vestas 12.0% TBEA Co Ltd 20.2% FosterWheeler 5.3% Severfield 9.3% China Ming Yang Wind Power Group Ltd. 6.8% KBR Inc. 4.0% Fiat 5.4% Airtac 6.3% Old Dominion Freight Line 3.8% Morgan Crucible 5.0% Teco 6.2% Covanta Holding 2.8% Gamesa 4.9% Kia Motors 5.5%

Best Performers YTD Best Performers YTD Best Performers YTD American Axle 50.0% Vestas 141.7% Mazda Motor 131.0% Luxfer 38.1% Gamesa 101.3% Fuji Heavy Inds. 120.2% Con-Way 37.0% Fiat 49.3% China Datang Corp 101.0% Chicago Bridge & Iron 35.4% Renault 46.2% Xinjiang Goldwind 94.8% SAIC 34.5% EADS 44.4% IHI Corporation 69.8%

Worst Performers 1-Week Worst Performers 1-Week Worst Performers 1-Week Kansas City Southern -4.9% Michelin -6.8% Mori Seiki -21.7% Wesco International -4.7% PSA Peugot Citroen -5.2% Nabtesco -14.3% Regal Beloit -4.5% Komax -4.5% Punj Lloyd Ltd -12.1% Quanta Services -4.4% Metso -4.4% KEC International Ltd -12.0% MasTec, Inc. -4.4% Weir Group -4.3% Hitachi Construction Machinery -12.0%

Worst Performers YTD Worst Performers YTD Worst Performers YTD McDermott International -19.1% Fenner -13.7% GS E&C -42.5% Joy global -13.1% El Sewedy Electric -12.7% Samsung Engineering Co Ltd -41.6% Superior Interiors -13.1% Severfield -10.8% BEML Ltd -40.5% Rexnord -10.6% Sandvik -9.4% KEC International Ltd -36.2% Regal Beloit -8.0% Michelin -7.6% Changsha Zoomlion Heavy Industry -30.6% Source: Datastream (Ex-Dividends)

Exhibit 5: Sector Performance Americas EMEA Asia

Sector Performance (Best to Worst) 1-Week Sector Performance (Best to Worst) 1-Week Sector Performance (Best to Worst) 1-Week US Engineering & Construction 0.5% European Wind Energy 8.4% China Power Equipment 1.5% US Environmental Services 0.4% European Electrical/Electronics 0.3% Korea Engineering & Construction 0.8% US Aerospace -0.6% MEA Industrials -0.1% Korea Industrials / Shipbuilding / Autos 0.1% US Defense -0.7% European Aerospace & Defense -0.2% Singapore /Taiwan Industrials -1.1% Canada Industrials -0.9% UK Capital Goods -0.3% China Industrial Machinery -1.1% US Industrial Distribution -1.1% Swiss Mid-cap Engineering -1.5% China Container Manufacturing -1.3% US Fluid Management -1.2% European Mechanical -1.6% India Automotive -2.3% US Transports -1.3% European Industrial Machinery -1.6% China Infrastructure Construction -3.0% US Electrical Equipment/Multi-Industry -1.3% European Automotive -2.1% Japan/Taiwan Factory Automation -4.3% US Machinery -1.5% China Automotive -4.4% US Automotive -1.5% India Capital Goods -5.9% LatAm Industrials -1.9% Japan Automotive -7.1% Japan Auto Related Consumables -7.9% Japan Infrastructure Machinery -9.2% Japan Conglomerates -10.3% Japan Machine Tools -13.5%

Sector Performance (Best to Worst) YTD Sector Performance (Best to Worst) YTD Sector Performance (Best to Worst) YTD US Aerospace 20.0% European Wind Energy 121.5% Japan Automotive 56.2% US Automotive 19.6% European Aerospace & Defense 24.0% Japan Conglomerates 47.8% US Defense 17.7% European Industrial Machinery 15.5% Japan Machine Tools 46.7% US Transports 17.4% European Automotive 14.6% Japan Infrastructure Machinery 40.9% US Fluid Management 15.7% UK Capital Goods 12.6% Japan Auto Related Consumables 36.8% US Engineering & Construction 15.3% European Electrical/Electronics 12.5% China Power Equipment 31.8% US Industrial Distribution 15.2% Swiss Mid-cap Engineering 12.3% Japan/Taiwan Factory Automation 21.8% US Environmental Services 14.7% European Mechanical 4.5% China Container Manufacturing 5.0% LatAm Industrials 14.7% MEA Industrials -12.7% Singapore /Taiwan Industrials -2.3% US Machinery 13.4% India Automotive -5.5% US Electrical Equipment/Multi-Industry 11.9% Korea Industrials / Shipbuilding / Autos -7.0% Canada Industrials 5.7% China Infrastructure Construction -9.3% China Automotive -9.7% China Industrial Machinery -13.7% India Capital Goods -16.9% Korea Engineering & Construction -21.1% Source: Datastream (Ex-Dividends)

i-Spy Global Industrials Weekly 6 28 May 2013 Price Commentary Tracker

Pricing conditions remain solid in most end-markets, with the Energy sector proving the exception, with weak pricing evident in wind turbines, power grid equipment (except in the US), and thermal generation equipment. Exhibit 6: Price commentary tracker Date Company Direction Comment There is no doubt the input commodities right now, what we call our net material inflation, has actually continued to get better for us or lower so therefore the issues are our costs coming in are better and therefore the price environment for us at this point in time, the gap is okay and 5/7/2013 Emerson I most likely will have a situation, as the material stay down there, I am going to have -- pricing will be tougher for us to get and to hold = because we expect the net material inflation to start getting higher as the year went on and now it is starting to be more negative

In terms of pricing, obviously, there is some gradual changes here and then. The fundamental assumption on 2.5% to 3% remains in place; 5/2/2013 Siemens Healthcare-the expected price erosion of around 3.5% to 4%; Energy continues to see significant competitive environments in areas like + transformers and we expect that to be there for a while; the industry might be a bit favorable; Looking at our power-related markets, in the US, replacement demand for power transformers remains steady. Market pricing and lead times 5/1/2013 SPX Corp = were stable sequentially I'd say when you look at this overall environment, I'd say slow growth, more stable commodities, and that really puts the load on us in terms 4/29/2013 Eaton = of executing well Price still solid...every second week we are releasing a new product, so there's a constant price update, price management going on in the 4/29/2013 Atlas Copco = Group for all business areas I mean I would say that there has been no change in the pricing. So we continue to get – obviously, we have – the pricing that we are getting 4/25/2013 Kennametal = is the tail end of the pricing that we had in place last year. So there is – we have not given price in any areas. 4/24/2013 ABB - Transformers: Order pricing still minus 2% to 3% which is pretty similar to recent trends We put some pricing in place, we're going to see that benefit of the pricing over the summer and we also have more pricing that's going to go 4/23/2013 Johnson Controls + in play in July. We've notified our customers about a 3% to 4% pricing increase across North America. So those things are significant.

One comment related to that, of course, we always put in relation raw mat inflation and price because when we were guiding at minus €50 4/23/2013 Schneider + million to minus €100 million impact on the raw mat, we are also guiding to a positive price impact of around €100 million

I would say generally stable. We haven't had a negative pricing trend in any part of the group, 4/23/2013 Sandvik = but in those cases, we've had only positive trend. There's only been very, very small positive movements with that. I would say Machining Solutions in the most positive end of the spectrum, and Materials Technology, more or less flat On a pricing, generally you've got to remember kind of where we sit in the food chain. We really sit in specialty applications. We're not in big iron, we're not in large project quotes, etcetera, so our 4/23/2013 Idex = positioning is very, very IDEX-like in terms of where we sit in terms of the value that we add and – versus price. We feel pretty good about that HVAC- It's never an easy pricing environment, but I would tell you that it's – CCS is making some good strides; Otis-pricing, tough around the 4/23/2013 UTX = world I think price will just be under – maybe just under 1%. So I would expect the gap to material inflation to be closer to 40 to 50 basis points, 4/23/2013 IR + which is a little bit better than we start – we thought we would we have at the beginning of the year We – in both our Lennox Residential and our Allied Residential as well as our Commercial HVAC and Refrigeration business, we've 4/22/2013 Lennox + announced price increases in all those businesses within the last – that have gone into effect over the last six months...we're still saying $20 million net price in commodities, which reflects confidence that we're going to get some price In lighting, we have seen in the conventional base the normal pricing erosion, not anything off. In healthcare, we have not in our order 4/22/2013 Philips portfolio, a lot of price erosion. But I do remark that we're not participating in each and every deal if at profit wise doesn't make sense, we - don't engage. So we may not see all the price erosion that goes on in the industry Orders pricing was up 0.6 points; P&W- orders pricing for the business was flat; Oil & Gas-orders pricing across the business was up 1.5%; 4/19/2013 GE = Aviation-order pricing was up 2.1%; Transportation-orders pricing was up 10 basis points We do see continued pricing pressure and this is not new to our industry, unfortunately. In many markets where we have contracting new 4/19/2013 Schindler - installation volumes, obviously, in the Southern European countries, but also in the United States, the competition is fierce for new installation and modernization volumes. And also, in these markets, I have to say the pressure on EI service is also fierce. And then I must also say that 4/19/2013 Honeywell = The net price widespread for Advanced Materials was actually slightly favorable. 4/19/2013 Valmont + Utility orders shipped in the first quarter of 2013 were at improved pricing levels; Irrigation-okay pricing environment 4/18/2013 Hubbell - I mean pricing in most of our businesses was more challenging Well, I think the price outlook in and around a point of price as we move forward ought to be something that we should achieve. I think on the 4/18/2012 Danaher + price cost equation in general, we are pretty pleased. Cessna- I'd say the pricing has been pretty flat; I get to a point here where I'm – we're not going to play that game anymore. So we're going to 4/17/2013 Textron take some of the capacity out of what's out there trying to transact because we're not going to do deals at price levels that people seem to = think the level has to be for them to make a transaction happen I think, if you look at our price mix across the three businesses is we had good positive price mix across the three business areas in the 4/17/2013 SKF + quarter, and that will continue as we move forward Source: Company data

i-Spy Global Industrials Weekly 7 28 May 2013 Recent Industrial Transactions

Exhibit 7: Recent Industrial Transactions x, unless otherwise stated EV/TTM or EV/Last FY EV/NTM or EV/Next FY EBITA or Announced Deal Announce Date Acquiror Target Sales EBITDA EBIT Sales EBITDA EBITA or EBIT Value (USD mn) 1-May-13 Tyman PLC Truth Hardware (Melrose) 1.6 8.9 - - - - $200 23-Apr-13 Honeywell RAE Systems 3.2 - - - 13.0 - $340 22-Apr-13 ABB Power-One 1.0 7.7 9.3 - - - $1,000 17-Apr-13 Roper Managed Health Care Associates - - - - 10.5 - $1,000 8-Apr-13 General Electric Lufkin 2.6 16.9 21.7 2.3 13.5 17.1 $3,300 28-Mar-13 Schneider TM Samara ------$340 5-Mar-13 KKR Gardner Denver 1.6 7.9 9.3 1.6 8.6 9.9 $3,740 20-Feb-13 Weir Group R Wales, Cheong foundry, Xmeco foundry ------$83 21-Dec-12 General Electric Avio (Aviation Business) 1.8 9.8 13.0 - 8.5 - $4,300 20-Dec-12 Weir Group Mathena - - - - 5.0 - $240 19-Dec-12 Heraeus Holding Spectris (Fusion UV division) - - 13.2 - - - $172 12-Dec-12 Mitsubishi Heavy Ind United Technologies Corp (PWPS) 0.9 6.1 7.1 - - - $600 30-Nov-12 Dover Anthony International 1.9 - 16.0 - - - $603 29-Nov-12 Siemens Invensys (Rail) 2.3 - 15.0 - - - $2,780 16-Oct-12 ITT Corp Bornemann Pumps - - - 1.8 - - $267 16-Oct-12 Safran Goodrich Electric Power Systems - - - 2.0 - - $400 16-Oct-12 Bodycote Bluewaters - - - 2.0 - 8.0 $68 10-Oct-12 Bain Capital Apex Tool 1.1 7.1 - - - - $1,600 9-Oct-12 Spectrum Stanley Black & Decker (HHI) 1.4 7.5 $1,400 1-Oct-12 Honeywell Thomas Russell - - - 1.7 6.0 - $525 17-Sep-12 Danaher Corporation IRIS International, Inc. 2.8 28.1 - 2.6 10.5 13.0 $338 28-Aug-12 Daikin Industries Ltd Goodman Global 1.9 10.5 12.3 1.8 10.1 11.8 $3,700 16-Aug-12 Clayton, Dubilier & Rice Decorative Surfaces(51%)-ITW unit 1.9 - 15.6 $1,050 9-Aug-12 National Oilwell Varco Robbins & Myers 2.4 - 9.3 2.3 8.7 $2,500 8-Aug-12 Platinum Equity Clipper Windpower (UTX) ------30-Jul-12 Roper Sunquest - - - - 10.1 14.2 $1,415 25-Jul-12 BC Partners&Carlyle Milton Roy, Sullair (UTX) 1.8 9.5 - - - - $3,460 23-Jul-12 GenCorp Inc RocketDyne unit (UTX) 1.8 9.5 - - - - $550 5-Jul-12 GKN Volvo Aero 1.4 - - - - - $1,000 18-Jun-12 Melrose Elster - - - 1.2 8.4 - $2,300 21-May-12 Eaton Cooper Industries 2.1 12.9 15.3 2.0 12.0 12.6 $11,800 15-May-12 GE Industrea Ltd 1.8 5.5 8.8 1.6 4.5 6.6 $690 15-May-12 GE Fairchild International ------NA 10-May-12 Platinum Equity Caterpillar Logistics Services ------$750 8-May-12 General Electric China XD (15% stake) - - - 1.8 30.2 - $535 26-Apr-12 Ametek Dunkermotoren - - - 1.7 - $250 25-Apr-12 Dover Production Control Services 2.4 - - - - - $220 10-Apr-12 Danaher X-Rite 2.5 10.0 11.5 2.6 10.3 - $625 10-Apr-12 Cobham Thrane & Thrane 2.3 - 14.8 - $428 2-Apr-12 Bodycote Curtis Wright HT 1.4 - 6.2 1.4 - 6.8 $52 20-Mar-12 Siemens Connectors & Measurements, Expro Holdings 5.2 - - - - - $620 19-Mar-12 Amazon Kiva Systems ------$775 10-Feb-12 Dover Maag Group 1.6 9.3 12.6 $290 30-Jan-12 ABB Thomas & Betts 1.7 11.1 14.6 - - 13.6 $3,857 30-Jan-12 Siemens RuggedCom Inc. ------$383 30-Jan-12 Sany Heavy Putzmeister 0.6 - - - - - $475 25-Jan-12 Weir Novatech 2.8 7.0 - - - - $176 24-Jan-12 Robert Bosch SPX- Service Solutions - 12.7 - 1.2 - - $1,150 17-Jan-12 Kennametal Deloro Stellite 1.3 8.0 - - - - $354 Source: Bloomberg, Reuters, Company data, Credit Suisse Research

i-Spy Global Industrials Weekly 8 28 May 2013 Recommended Reading (Bullets from each recommended reading note are provided in subsequent pages of iSpy)

Exhibit 8: Macro/ Strategy ■ China Economics. HSBC Flash PMI slipped into the contractionary zone for the first time in seven months, Dong Tao, 23 May 2013

Exhibit 9: Global Research ■ EPG Conference - Short-cycle trough has been reached; Europe bottoming, Julian Mitchell, 22 May 2013

Exhibit 10: Americas Research ■ LatAm Capital Goods; Looking For Market Resilience Not For Cyclicality, Bruno Savaris, 27 May 2013

■ ETN; Analyst day underlines scope for sales synergies; EMR / ROK implications, Julian Mitchell, 24 May 2013

■ LatAm Transportation Sector - Another Step In the Right Direction, Bruno Savaris, 24 May 2013

■ KBR; Management Meeting Takeaways, Jamie Cook, 24 May 2013

■ DOV; Knowles to be spun; RemainCo looks fully valued, Julian Mitchell, 23 May 2013

■ CMI; Mgmt Meeting Takeaways, Jamie Cook, 23 May 2013

■ BAH; Aggressive Cost Cutting, but Funded Backlog Trend a Concern, Robert Spingarn, 13 May 2013

■ Distribution Sector Sales Growth - May Distribution Sales Index, Hamzah Mazari, 23 May 2013

■ EXPD; Supportive Evidence Is Mounting, and We See Added Boost from Share Buy-Backs, Christopher Ceraso, 23 May 2013

■ RXN; Encouraging earnings, strategic review may not drive much upside, Julian Mitchell, 22 May 2013

■ GE; EPG Presentation: Services better; more aggressive buy-back tone, Julian Mitchell, 22 May 2013

■ IR; EPG Presentation: Near-term demand on-track; mix set to improve, Julian Mitchell, 22 May 2013

■ TYC; EPG Presentation: Relentless cost-out focus, Julian Mitchell, 22 May 2013

■ Boeing; Rate Upside Could Boost Cashflow Still Higher, Robert Spingarn, 22 May 2013

■ GWW; Focus on Share Gain and Organic Growth, Hamzah Mazari, 22 May 2013

■ UTX; EPG Presentation: Accelerated restructuring; less M&A = more buy-back, Julian Mitchell, 21 May 2013

i-Spy Global Industrials Weekly 9 28 May 2013

■ ETN; EPG Presentation: CBE deal well on-track; customer de-stocking has largely run its course, Julian Mitchell, 21 May 2013

■ TXT; EPG Presentation: Cessna still very weak; major moves on capital allocation appear unlikely, Julian Mitchell, 21 May 2013

■ Boeing; Charleston Doing its Part on 787 Ramp, Robert Spingarn, 21 May 2013

■ KBR; Riding The Canadian Gravy Train, Jamie Cook, 21 May 2013

■ PNR; Full Speed Ahead With Integration, Hamzah Mazari, 21 May 2013

■ ROK; EPG Presentation: Stable near-term demand; large M&A or buy-back remains unlikely, Julian Mitchell, 20 May 2013

■ SPW; EPG Presentation: Flow the clear focus; may need to be patient on divestments, Julian Mitchell, 20 May 2013

■ EMR; EPG Presentation - short-cycle bottoming out; no large M&A deals likely, Julian Mitchell, 20 May 2013

■ DHR; EPG Presentation: High gross margin, leading brand, recurring revenue businesses continue to dominate M&A agenda, Julian Mitchell, 20 May 2013

■ HON; EPG Presentation underlines scope for further margin improvement; Europe short-cycle orders up, Julian Mitchell, 20 May 2013

■ EMR; 3MMA April orders: -3% exc-FX; in-line performance - HVAC supply chain de- stocking, Julian Mitchell, 20 May 2013

■ LatAm Transportation Sector; Straightening Ports Investments (The New Ports Law), Bruno Savaris, 20 May 2013

■ CAT; CAT Dealer Stats – April, Jamie Cook, 20 May 2013

■ WCC; Pricing Not Getting Worse, Confident in Margin Expansion, Hamzah Mazari, 20 May 2013

Exhibit 11: EMEA Research ■ Smiths Group; Solid Q3. JC better, Detection worse, Andre Kukhnin, 24 May 2013

■ ABB; EPG 2013 - Remains most attractive Electrical, Simon Toennessen, 22 May 2013

■ GKN; CMD - Driving revenue and margin growth, Jonathan Hurn, 22 May 2013

■ Philips; EPG 2013 - Committed to targets; trading unchanged; focus on costs; capital allocation, Simon Toennessen, 21 May 2013

■ Schneider ; EPG 2013 - Upbeat view on China reiterated, Simon Toennessen, 20 May 2013

Exhibit 12: Asia Research ■ Machinery sector; Identifying stocks to pick up in wake of correction; Comment, Shinji Kuroda, 28 May 2013

■ Korean Auto Sector; Maintain Overweight, Henry Kwon, 27 May 2013

i-Spy Global Industrials Weekly 10 28 May 2013

■ Japan Auto Sector; No bubble for Japanese automakers; recommend buying on dips; Sector Review, Issei Takahashi, 27 May 2013

■ Crompton Greaves; 4Q13: Disappointment continues; no signs of a turnaround yet, Amish Shah, 27 May 2013

■ Daihatsu Motor; Strong domestic sales offsetting LCGC delays; Increase Target Price, Issei Takahashi, 24 May 2013s

■ Nissan Motor; Undervalued, with profit improvement from 2H; Increase Target Price, Shinji Kuroda, 24 May 2013

■ Fanuc; Time to invest on prospects for a year out; Increase Target Price, Shinji Kuroda, 23 May 2013

■ L&T; 4Q13 inflows strong but operating results weak; FY14 inflow growth target appears optimistic, Amish Shah, 22 may 2013

■ Teco - Maintain OUTPERFORM, Jerry Su, 22 May 2013

■ Korean Auto Sector; Maintain OVERWEIGHT. Misconceptions regarding automotive incentives in the stock market, Henry Kwon, 22 May 2013

■ Yaskawa Electric Corporation; Expect upward revision to FY3/14 guidance, medium-term goals may be met a year early; Increase Target Price, Shinji Kuroda, 22 May 2013

■ JGC Corporation; FEED contract for major North American LNG plant; first for this market; Company Update, Shinji Kuroda, 22 May 2013

■ Mitsubishi Electric; Strategy briefing: Clearly defined strategy for renewed growth, shareholder returns; positive, Hideyuki Maekawa, 20 May 2013

i-Spy Global Industrials Weekly 11 28 May 2013 Recommended Reading Summaries Macro/ Strategy China Economics. HSBC Flash PMI slipped into the contractionary zone for the first time in seven months, Dong Tao, 23 May 2013

■ The HSBC Flash PMI fell 0.8 pp in May to 49.6, back into the contractionary zone for the first time in seven months. The new orders index fell below the 50 benchmark as well, decreasing 1.8 pp to 49.5.

■ The fall in PMI is not a surprise to us, as the private segment of the economy continued struggling while government infrastructure investment slowed amid the anti-corruption campaign and tightened regulation on wealth management products.

■ This is bad, but probably not bad enough to justify an imminent stimulus. The new administration has repeatedly suggested that it has the appetite to tolerate slower growth while pursuing structural reforms. This is especially true when the job market has not been much affected while corporate profits have taken a hit.

■ We believe Beijing will likely need to ease credit and housing policies slightly during the summer as pressure upstream starts to spread to mid- and down-stream industries. In our view, the current pattern of sluggish demand and the lack of policy response is likely to persist in the near future.

Global Research EPG Conference - Short-cycle trough has been reached; Europe bottoming, Julian Mitchell, 22 May 2013

■ Short-cycle trough has been reached: Overall, we came away a little more comfortable with our view (see our report last week) that we are nearing the end of a very weak period for short-cycle demand, which should generate positive y-o-y sales growth by Q3. Visibility remains low, but few companies highlighted areas of incremental weakness. De-stocking appears to have largely run its course, particularly in electrical equipment, and GE's Services business is reaccelerating. The machinery-exposed segments of EMR and ETN appear to have bottomed; automotive and consumer electronics are other sectors where inventory has substantially corrected. Resi HVAC demand is solid despite the weather. Pricing appears to be holding, despite input costs leveling off.

■ Europe has bottomed: Europe is the region which is surprising positively, with IR, EMR, HON and others highlighting an orders pick-up in recent weeks/months. On China, Schneider and ABB were more positive; overall industrial demand still appears very sluggish (construction markets are a little better).

■ Which markets sound worse/are still falling? Light business jets, power equipment (thermal generation and grid), metals, mining.

■ Solutions are increasingly important; automation seeing more competition: This is something we have written about extensively, and comments from the likes of ABB and ETN emphasized that a credible Solutions approach in electrical equipment is increasingly key in maintaining/winning share. Within automation specifically, Schneider is making a big push at the hybrid segment of the market (an issue we raised in our Hannover Fair report last month).

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■ M&A to remain subdued; re-emergence of PE increases competition for assets: Despite cash-rich balance sheets and low organic growth, it does not sound as if many corporates are about to embark on a wave of deals. Valuations that did not appear cheap last year are unlikely to be more attractive today, and the comments from Clayton, Dubilier & Rice suggest that industrial companies will now see increasing competition for any assets from the private equity industry. Activism will likely continue to drive portfolio change, particularly from a divestment standpoint.

■ Stocks: GE's tone on the pace of its buy-back was much more aggressive, and GE suggested that an IPO mechanism could be used for exiting parts of Capital. Despite some recent conjecture, it sounds as if ROK is unlikely to materially accelerate its M&A effort, or returns to shareholders. IR's Form 10 filings could come as soon as early June.

Americas Research LatAm Capital Goods; Looking For Market Resilience Not For Cyclicality, Bruno Savaris, 27 May 2013

■ A 2H13 At Risk? Ben Bernanke once said, “The lesson of history is that you do not get a sustained economic recovery as long as the financial system is in crisis”. Hoping that it’s not the case in Brazil, since end 2010, the Brazilian Capital Goods has been trading on the back of strong expectations of economic recovery and the implementation of further counter-cyclical/stimulus measures. Such measures, i.e. tax and funding subsidies, took place and partially helped to overshadow the meager economic growth rate seen in 2012. Yet, while not confronting the cause, poor growth prospects persist in 2013 and a better 2H13 seems to be at risk.

■ Light & Heavy Vehicles … In this report, we address the causes and consequences of the ongoing conundrum in the industry, which has been an important determinant of investments in the sector. Among the topics, we note: (1) Commercial Vehicles: (i) government subsidies; (ii) GDP growth & Brazil’s investment cycle; (iii) fleet renewal programs; and (v) potential production/sales distortion in the 4M13. (2) Light Vehicles: (i) credit availability; (ii) launching of new vehicle models; (iii) new OEMs in the Country. Additionally, we discuss the Inovar-Auto theme and its peculiarities.

■ Only For a Tactical Positioning… As much as we would like to continue playing the “Brazilian economic recovery” theme, at this point, even with a great deal of wishful thinking and a forward looking approach, a better risk/reward mix is highly dependent on a “earnings momentum” call. Current valuation seems ahead of itself, with P/E multiples converging to more reasonable levels only by 2016. The corollary arising from this scenario leads us to recommend a tactical position on more resilient investment thesis, such as Mahle Metal Leve (LEVE3).

ETN; Analyst day underlines scope for sales synergies; EMR / ROK implications, Julian Mitchell, 24 May 2013

i-Spy Global Industrials Weekly 13 28 May 2013

■ We attended Eaton's analyst day in Houston yesterday. We came away encouraged that the company appears well-set to take market share in Electrical equipment, which is a key reason underpinning our Outperform rating. We estimate global market share is 7% today, and see scope for this to move into the double-digits in the next five years; ETN continues to target sales synergies of $565m by 2016. With the stock trading on a 2014 P/E of 13.1x, and with a 2.8% dividend yield, it remains (along with GE and IR) a top large-cap pick for us.

■ Rapid growth set to continue: Eaton Electrical has grown from a $2bn business in 2002, with 80% of sales accruing from the US, to a global $13bn business. In terms of end-markets, Non-resi now comprises 31% of sales, Industrial 19%, Datacenter / IT comprises 17% of sales, Utility and Machine Builders are 12% each, with Resi comprising 9%. We think rapid sales growth will continue, given CBE synergies, end-market growth in Industrial and Construction in particular, and future M&A.

■ Complementarity of product.... We were provided with some clear examples of how much more content ETN and CBE combined will win on a combined basis in various vertical markets. For instance, on an FPSO ship, the combined entity can win $20m worth of Electrical business and $5m of hydraulic business, against $4m of business previously. In a datacenter, ETN can win $15m of Electrical business now, against $5m previously, while in a Residential home, it can win $1500 worth of business vs $300-400 per house previously.

■ And route to market: In the Oil & Gas vertical for instance, CBE's historic strength was with the EPC companies (customers such as Fluor, KBR comprise 60% of sales, against 25% of owner sales, 10% distributor and 5% OEMs), while ETN's is with the 'owners' (customers such as ExxonMobil and BP comprise 70% of sales, against 25% EPC, and 5% OEMs).

■ Services build-out offers 20% upside to CBE business: ETN estimates that it can win $20 worth of service business (engineering, software & monitoring etc) for every $100 of ETN OE Electrical business. CBE however had minimal service business; ETN's 2000 service staff are well-placed to increase this, although some headcount additions will need to be made.

■ Disruptive technologies in the plant: One theme we found interesting at the Hannover Automation Fair was the migration of the control functionality within a factory away from the PLC, into other devices. We saw more evidence of this yesterday; the 'PowerXL' variable frequency drive family of products for instance contains much of the PLC functionality within the device. ETN is no longer investing in new PLC technology, and it now offers PLC-quality control capability at the HMI layer; such moves can save machine builder customers (30%+) considerable time and labor cost.

■ Implications - Not so positive for EMR or ROK: The decreasing role of the PLC may present risks to ROK's core business; we also note that ETN will be less likely to acquire ROK if it really believes the PLC will become less important in plant functionality going forward. The increasing presence of ETN within the datacenter in terms of being able to offer a 'solution' or 'package' (comprising 30% UPS / backup power, 35% power distribution / assemblies, 20% cable tray, racks, 10% installation / commissioning, 5% lighting / control) may constrain EMR's ability to take share within the datacenter, given its smaller LV and MV portfolio compared with ETN or Schneider.

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LatAm Transportation Sector - Another Step In the Right Direction, Bruno Savaris, 24 May 2013

■ Another Step In The Right Direction. Yesterday, the Brazilian Land Transportation Agency (ANTT) released the new set of operational estimates for each of the 7 toll road concessions that should be auctioned during 2H13. Essentially, the government has (i) increased Capex & Opex figures by about 30%-35%; (ii) adjusted the traffic growth rates as well for more realistic levels and (iii) adjusted the cap toll tariffs for the concessions to account for the operational changes and the new IRR established for the bidding process. Confirming Mr. Mantega’s statements made in early May 2013, the new IRR implied at the cap tariff should be of 7.2% real, unleveraged, versus the former 5.5%).

■ The New Round of Toll Roads Federal Concessions. The next 9 toll roads (7,500km) to be auctioned, were announced back in August 2012 and are delayed by ~ 5 months already. In our view, after launching the Request for Proposal (RFP) in September 2013, the auction could take place by November 2013. We wouldn’t be surprised if auctions are delayed to 1Q14. While improving theoretical return levels for these assets, we stress that IRRs should be established by a competitive bidding process. Thus, it shouldn’t be taken at face value. Moreover, concerns regarding the execution risk of delivering a massive investment plan for the next 5 years remain in the spotlight.

■ Credit Suisse View. This announcement supports the thesis that the government has recently shifted towards a more pro-market stance on infrastructure investments. By boosting operational estimates and cap toll tariffs, there should be an extra cushion for the bidders to assess whether they can be more efficient or not regarding capex and opex. Thus, inevitably, this move by the government should attract interest for the new round. As the massive capex requirements continue to be one of the major pushbacks by the private initiative, bidders might be selective when participating in this new round. We maintain our preference in the sector for Arteris (ARTR3) followed by CCR (CCRO3) and Ecorodovias (ECOR3)

KBR; Management Meeting Takeaways, Jamie Cook, 24 May 2013

■ We had the oppty to sit down with Mitch Dauzat, President of Gas Monetization, and Zac Nagle, VP of Investor Relations. Takeaways are as follows:

■ Member Of The Exclusive LNG Club: We estimate KBR holds approximately 30- 40% market share in gas monetization (we estimate GTL at ~60%) and is well- positioned amongst a small group of players who have historically worked on major LNG projects, including JGC, Chiyoda and Bechtel. KBR is in conversations with 5-6 customers in the US export LNG terminals. We believe the market underappreciates this and just sees KBR well positioned in Canada on Kitimat and Pacific Northwest. Internationally, there are also multiple projects which we believe KBR is in line to win, including Gorgon 4 (Australia), Tangguh 3 (Indonesia), and the long-anticipated Kitimat project (Canada). In GTL, KBR performed very well on Shell's Pearl GTL (Qatar) and Escravos (2 of the 3 major GTL projects globally) which puts them in good standing for further potential GTL work for both Shell and Sasol in Louisiana.

■ Partnering - The Trend In E&C: Similar to KBR's recent FEED award on the ~$10B Pacific NorthWest LNG project in which KBR is partnering with JGC, the company expects the industry to see a lot more combined work on mega-projects, mitigating risk for the operators. While KBR may not have the size of competitors, like FLR and

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CBI, this is not necessarily viewed as a disadvantage, as partnering becomes more of an industry norm and sometimes preferred by major operators.

■ KBR Positioned For Disciplined Bidding: Labor issues remain a concern for the industry as the Gulf Coast heats up, which should ultimately be a positive for the industry in terms of pricing and contract structure. We believe KBR will continue to be very disciplined in its approach to bidding and has the power as well, given its resumé of work in gas monetization. As such, KBR remains one of our top picks in the E&C sector.

DOV; Knowles to be spun; RemainCo looks fully valued, Julian Mitchell, 23 May 2013

■ Today, Dover announced its plan to spin off Knowles ($1.3bn in sales, ~325mn of EBITDA) as a standalone US-domiciled entity in 2014. We acknowledge the strategic sense of the spin but fail to see how it creates financial value; unlike recent / pending spins (TYC, IR), the capital structure, level of attractiveness as an M&A target, and tax structure will not be materially different at either pro-forma entity. We raise our TP to $77 which now reflects our 2014 ests.

■ Valuation: A wide range of peer valuations make Knowles difficult to value; domestic handset / tablet component suppliers trade at 6-8x 2013 EBITDA whereas AAC (Knowles main competitor - Asia based) trades at 13.5x. Applying 13.5x to Knowles implies the DOV RemainCo is trading at ~8.5x 2013 EBITDA. Applying 7x to Knowles implies 10x for RemainCo; either way, this looks expensive for RemainCo as peers trade at ~8.0x (Exhibit 4). DOV's business mix has changed materially throughout the past which makes SOTP a better approach to valuation vs. historic multiples in our view.

■ Competitive landscape for acoustics unchanged: DOV says the spin will allow Knowles to pursue a "more aggressive" growth strategy, but target leverage of ~1.0x and the likelihood of a special dividend payment back to the RemainCo post spin does not give Knowles' much firepower to grow through M&A over the short term. Thus, we don't expect the market dynamics for Micro-Acoustics to change much post-spin; we think Knowles should be able to maintain its MEMS market leadership (~60% share) and AAC / Goertek should remain dominant in speakers/receivers (Sound Solutions is too far behind in terms of scale, manufacturing capability, and cost structure).

■ Capital Allocation: DOV plans to continue its existing capital allocation strategy of balanced distribution; $460mn remains under the current share-repurchase authorization (of which ~$200mn is expected to be used before the end of 2013). Additional cash could be available for the DOV RemainCo as cash received at Knowles from newly issued debt post-spin may be paid back to Dover as a one-time special dividend. This would likely be directed towards share repurchase or an increased dividend. At Knowles, we see M&A as a primary focus for capital allocation, given that its strategy remains aggressive growth.

■ EE/MI spins: We find it interesting that this is the third announced spin in the EE/MI space over the past 24 months (Security from IR, ADT from TYC) and GE cited spin as a possible attractive means to divest portions of GE Capital at EPG yesterday. We think the following EEMI conglomerates could be other possible candidates for portfolio change: Textron could spin its Industrial segment which has little strategic relationship with the A&D-related businesses (Cessna jets, Bell helicopters, and Systems). SPW (with the presence of activist Relational) could see a potential spin

i-Spy Global Industrials Weekly 16 28 May 2013

of non-flow assets given its strategic focus on Flow. Network Power has been a drag on EMR for some time and spinning the most depressed portion(s) of the business could alleviate multiple pressure on the parent (though we believe no such move is likely until 2014).

CMI; Mgmt Meeting Takeaways, Jamie Cook, 23 May 2013

■ China & Brazil Truck Slightly Ahead: China truck has improved from down 12% y/y in the first quarter to down 2% y/y for year-to-date April. It remains unclear whether the improvement in China truck orders is just restocking or reflects greater confidence that the economy has turned the corner. The adoption of NS4 is likely pushed out, however, as has little in CMI's 2013 outlook. Brazil truck is trending slightly better than expectations.

■ Broader Markets Stable, On Average: In the US, Class 8 truck orders are fairly stable in the ~23K unit range. CMI does not need an improvement in orders to make its full year target of ~233K for full year production. Also market share in US truck in HD and MD is trending better than expectations. Similar to our takeaways from CAT, CMI has not seen increased order flow in mining. CMI's mining business is 60% OE/40% aftermarket and 2013 guidance of revenues down 27% assumes mining OE is down roughly 40+%. In emerging markets, China construction is playing out as expected with the stronger seasonal selling season reducing field inventory. Demand for oil and gas remains lackluster as well. CMI aftermarket is up double- digits.

■ Thoughts On 2015 Targets: Clearly the macro is a headwind relative to the targets provided at CMI's Sept 2011 analyst day and we would expect CMI to update EPS accordingly. CMI is ahead of plan in terms of HD and MD engines in the US and Tier 4 and Euro 6 market share. Longer term, CMI hopes to achieve other customers in light duty truck and benefit from its new high HP engine. We would expect CMI to remain disciplined on pricing and their ability to meet their longer-term 20% incremental margin target. Finally, we hope for more on dividend and share repo as large acquisitions are off the table.

BAH; Aggressive Cost Cutting, but Funded Backlog Trend a Concern, Robert Spingarn, 13 May 2013

■ FQ4 EPS of $0.40 beat consensus by 3-cents, driven by better sales and in-line margins vs. the street. Management also raised its dividend 11%, and introduced FY'14 guidance, which had been (understandably) delayed in January, and which at $1.55-1.65 was 7% ahead of consensus despite it assuming that GFY'14 will begin with a Continuing Resolution and Sequester will remain in place through the end of BAH's FY'14.

■ While we believe BAH is best-in-class among the gov't services companies, with its aggressive cost reduction efforts enabling it to report relatively resilient margins, the decline in funded backlog outlined below is a paramount concern for us. Given this, and the lack of visibility regarding the budgetary environment, we reit. Neutral with a $16TP (which rises owing to a higher peer multiple). Our FY'15 EPS drops to $1.53 from $1.58 to recognize latest guidance.

■ FY'14 Guidance Implies Mid-Single Digit Organic Revenue Decline; Management Continuing Focus of Protecting Margins: BAH is forecasting a low-single-digit

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revenue decline in FY'14. This incorporates, by our math, ~$300M of revenue from November's DSES acquisition (only one-third of which will be organic), and equates to an organic revenue decline expectation ~5%. While management did not specifically guide to margins, which were reported at 7.3% in FQ4'13 and 7.7% for the full-year, it did comment that it remains intensely focused on protecting profitability.

■ Significant Reduction in Funded Backlog Is Concerning: Book:bill in the quarter was weak, at 0.58x, and drove a 20% sequential decline in funded backlog. At 21.2%, the funded backlog at the end of FQ4 was at its lowest level as a proportion of the total backlog since Booz went public. That said, there is scope for Booz to offset some of this weakness with future M&A.

Distribution Sector Sales Growth - May Distribution Sales Index, Hamzah Mazari, 23 May 2013

■ The distribution industry is highly fragmented with over two-thirds of it being private, so it is not surprising that there is no such thing as an industry sales or volume index. As a result, we decided to construct our own distribution sales index as a means of establishing expectations for monthly sales growth, as well as keeping our revenue estimates for distributors in check.

■ We are raising our target price for GWW to $280 (from $260) to account for greater conviction over share gains and buybacks. We are updating our target price for AXE to $70 (from $60) based on an 11x multiple on our 2014 EPS estimate of $6.98 discounted back. There is no change to our ratings.

■ Based on our latest economic forecasts, we now estimate our index to rise 3.9% yr/yr in 2013 (a 160bps decrease from prior expectations of 5.5%). Our 2013 sales index forecasts are down due to a slower start to 2013 than anticipated. Our 2014 distribution sales index forecast is for ~9.4% growth (see exhibit 7-8).

■ It is important to note that there continues to be weakness in distribution sales exposed to OEM production while MRO markets remain more resilient. It is our sense that there is still some destocking taking place but we may be nearing the end of it. Customers generally are taking a wait and see approach before replenishing inventory levels. Sales growth for Fastenal in April came in slightly below 5% while Grainger was extremely solid at ~8%. Our sense is that Grainger May sales growth is trending slightly below prior expectations at ~5% organically (post adjusting for holidays/weather). We believe sales drag from FX, Canada, Europe and parts of government are causing the May sales deceleration. Non resi construction markets continue to be choppy but should recover as they lag US resi markets which have seen sustained growth. We would also note that comps tend to get a lot easier for the distributors in 2H 2013.

■ Note that companies will report daily sales above or below the overall distribution sales index forecast depending on their mix of business (e.g. electrical or industrial), comps, and end markets (e.g. heavy manufacturing, government, non-residential construction, etc.).

■ Upcoming Catalysts: Fastenal (FAST) will report May daily sales on June 5 and WW Grainger (GWW) reports on June 11.

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EXPD; Supportive Evidence Is Mounting, and We See Added Boost from Share Buy- Backs, Christopher Ceraso, 23 May 2013

■ Reiterate Outperform: EXPD remains a somewhat controversial stock, with a relative lack of interest among investors and only 40% 'Buy' ratings among covering brokers. But we see evidence of both the macro and micro turning points that we outlined in our January 2013 upgrade, and we see potential for further share repurchases that could drive upside earnings surprises. We reiterate our Outperform rating and 12-month, DCF-derived target price of $47.

■ EXPD's Productivity Turned a Corner in Q1: One of the key points behind our positive view was that EXPD's operating profit per employee (a measure of productivity) would turn a corner and start improving, driving a turn in the stock price. So far, first quarter results have supported this view, showing an uptick in productivity for the first time in 7 quarters.

■ Global Trade Is Also Improving: Another part of our outperform thesis was our view that global trade would improve relative to global GDP, after an uncharacteristic underperformance in 2012. The latest data (for 1Q13) show that, while still trailing global GDP, global trade is strengthening and moving closer to a normal relationship with GDP.

■ Share Repurchases Could Be Next Kicker: We introduce in this report an interesting study of EXPD's cash flow and share repurchase tendencies - both of which suggest heightened, ongoing buy-backs that could lower the share count and drive upside earnings surprises relative to consensus. Comments from last night's 8K filing also support this view.

RXN; Encouraging earnings, strategic review may not drive much upside, Julian Mitchell, 22 May 2013

■ Following FY13 Q4 results, we raise our adjusted FY14 EPS estimate to $1.13 (from $0.99) and our TP remains $20. We reiterate our Neutral rating although we are encouraged that RXN traded positively on earnings (+7% on the day), after dissapointing in previous earnings post IPO. FY14 guidance was slightly better than consensus ($1.14 EPS at midpoint vs. $1.11 consensus), which indicates expectations have sufficiently been reset.

■ Segments: For FY14, we estimate +1.5% organic growth at PMC and +4% at WMC. We model 30% incremental margins at WMC and 35% at PMC yielding overall incremental adjusted EBITDA margins just slightly above the 30% company guidance. Despite strong Q4 organic sales growth at WMC (+10%), we see the underlying business growing mid-single-digits through the balance of FY14, attributing the strong Q4 to large non-repeating orders.

■ Strategic Options: Although the firm reissued comments in its press release that it is reviewing strategic options (previously linked to speculation around a sale of Zurn), we find it difficult to see why RXN would sell an asset facing a construction up-cycle after buying it at the top of the cycle in 2007.

■ The Stock: Mid-teens EPS growth at RXN for CY13 is in the middle of SMID-cap peers (Exhibit 1), although the stock trades at a significant premium. The firm's exploration of 'strategic options' may account for a majority of the valuation premium; we do not see much upside even in a potential take-out. RXN trades at ~10x FY14 adjusted EBITDA, compared to recent average industrial acquisition multiples of ~10-11x NTM EBITDA (Exhibit 2). RXN currently trades at 19.5x our

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CY13 EPS est of $1.26; our $20 TP assumes $1.26 of CY14 EPS, and slight NTM multiple compression.

GE; EPG Presentation: Services better; more aggressive buy-back tone, Julian Mitchell, 22 May 2013

■ Chairman and CEO Jeff Immelt reiterated the 70bps operating margin improvement target for FY13 (our estimate is +40bps), and highlighted a more aggressive buy- back program.

■ Near-term demand: US demand appears to be improving steadily, while emerging markets remain strong. After a weak Q1, it sounds as if Services (which we think represented nearly 100% of EBIT in Q1) is now seeing good momentum, particularly in Aviation (commercial spares) and Oil & Gas. IGT delivery guidance is now set at 85-95 for 2013 against our 96 unit forecast.

■ Margin levers intact: Q2 margins are in-line with expectations; within the EBIT bridge, the key drivers for decent 2H margin expansion y-o-y appear intact with Mix, Value gap and R&D all contributing, and cost-out on track for the $1bn restructuring target. Industrial SG&A / sales is set to fall by 150bps in 2013, with another 100bps decline next year. By segment, Power & Water profits are guided to be flat this year vs our -14% forecast, while Transportation earnings are guided to be up at a '++' rate against our single-digit growth forecast; other segment guidance is in-line with our forecasts.

■ Portfolio / Capital allocation: GE Capital's special dividends will be focused on buybacks, with $10bn being spent this year, and the target is to reduce the share count to 9-9.5bn by the end of 2015. M&A should reach $10bn this year, with the average deal size remaining in the $1-4bn range. As regards divestments, GE cited IPO / the capital markets as a likely mechanism by which to exit any major business units within GE Capital (PLCC etc). There was a clear commitment that divestments would not come at the expense of EPS growth.

IR; EPG Presentation: Near-term demand on-track; mix set to improve, Julian Mitchell, 22 May 2013

■ Chairman and CEO Mike Lamach gave an upbeat presentation, with a balance of emphasis on cost-out, and market share gain efforts through innovation. Commercial HVAC sales are expected to grow at a low-single-digit rate this year; Resi demand is on track and in line with company expectations. European demand has positively surprised in the past few months, particularly in HVAC. The spin is still set to occur in Q4.

■ Mix trending in-line; good Services traction: Services sales have out-grown OE for several years and the trend looks set to continue; this should be margin-accretive (Services margins are 200bps higher than the average). 'Mix' was a headwind in Q1, but the improvement in Thermoking demand and China sales (HVAC bookings have picked up although compressors are still soft) should mean this headwind abates as we move through the year.

■ Solid progress on productivity increases: IR has seen a 30% reduction in manufacturing square footage (25% of manufacturing capacity is shared across segments; this will rise to 40% at the RemainCo post the split), and continues to see

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substantial margin potential from functional cost reductions, which could add 100- 150bps of margin. On procurement, there will be an 85% overlap on sourcing across HVAC and Industrial within the RemainCo. Around 40% of the company's cost base should be covered by the Value Stream approach by the end of this year.

■ Capital allocation: IR is aiming for a peer-average dividend payout ratio by 2014, following dividends per share of $0.84 this year.

■ Spin-off of Security on track: The Form 10 financials are due to be filed by mid-June, with the Security spin to take place in late Q4 of this year.

TYC; EPG Presentation: Relentless cost-out focus, Julian Mitchell, 22 May 2013

■ CEO George Oliver highlighted that he is 'very pleased' with the progress on integrating the Fire and Security businesses. The top-line outlook remains muted, but adjusted earnings should continue to see decent growth from cost-reduction.

■ Near-term demand trends: Commercial (weakness in Europe, Australia), Industrial / Energy (mining is soft), and Retail (emerging regions remain strong) markets are all trending sideways globally, with Government spend falling (although this is only 5- 7% of sales). Institutional markets are mixed (US hospital, school construction is down double-digits YTD), but TYC is offsetting a flat market with Services sales growth. Residential / Small Business is the strongest vertical at present.

■ Cost-cutting to drive margins: Purchased Materials & Services comprise 45% of TYC's $9.3bn cost base, of which Indirect spend is ~40%, and Metals is another ~20%; savings from sourcing initiatives are expected to drive $0.05 of EPS growth this year. 40% of the cost base accrues from Infrastructure & Admin costs; the 'Branch in a box' initiative is expected to drive substantial 'back office' savings here (TYC has over 600 branches in the field) through standardization and centralizing costs. Incremental margins are expected to be 15-20% in I&S, and 25-30% in Global Products.

■ Capital allocation: TYC will continue to use a mix of M&A (some divestments are also likely, as per the sale of the N America guarding business) and dividends / buybacks. Deals are likely to remain fairly small (less than $200m).

Boeing; Rate Upside Could Boost Cashflow Still Higher, Robert Spingarn, 22 May 2013

■ Potential for Further Rate Step-Ups Provides Upside to Peak FCF: Based on commentary at Boeing's annual analyst meeting, we see a potential extension of BA's production cycle, which could favorably push peak earnings and cash flows to the right. Our current model anticipates peak cash flow plateauing in the 2015/16 timeframe, but this is based on current rate targets of 10/mth on 787 and 42/mth on 737 (See Exhibit 1). On Wednesday, CEO Jim McNerney highlighted a positive bias for rates on both programs, particularly 787, which we think could go to 12 in 2015 and 14 in 2017, enabling even better absorption of overhead costs and higher FCF, perhaps ~5% above the mid-$12 range we currently forecast in 2015, and still higher beyond. Further, earnings growth and peak earnings could also rise if accounting blocks are extended. We reiterate Outperform with a $110 TP. Again, our TP is based on a 10.7x multiple on a blend of peak EPS and FCF still based on 787 at 10/mth. A pure FCF-based valuation would yield a TP ~$20 higher.

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■ Cash Deployment: Cash returns remain a focus point, and CFO Smith said BA seeks to return > 80% of FCF going forward. He also expects dividend increases to be in-line with EPS growth, which leaves potential for a sizable boost in the annual buyback to $4-5B by 2015 by our math (2013 guide is $1.5-$2B). Further, given $8B in cash on hand, there could also be near-term upside in the buyback, though Smith cautioned that BA would like to get through more of the 787 rate ramp before committing to a larger buyback.

■ Development Program Momentum Continues: MAX and 787-9 development are on- track and 777X and 787-10x have made significant progress with growing customer interest. Both programs are expected to launch this year, and one could be launched as early as Paris if customer negotiations proceed in the near-term. MAX's planned EIS of 2017 could move to the left slightly if development continues to progress at the current rate.

GWW; Focus on Share Gain and Organic Growth, Hamzah Mazari, 22 May 2013

■ We had the opportunity to spend time with Jim Ryan (CEO) at the EPG Conference. Below are our key takeaways:

■ Market Share Gain as Growth Engine and Stabilizer: Grainger continues to capitalize on its extensive product offering to drive market share gains which helps fuel growth even in down cycles. (In the US, GWW has expanded its in-stock offering from 80k to 450k items). Grainger also relies on a diversified customer base to stabilize its sales. Diversification is present not only between major end markets but also within them. GWW highlighted its government segment, which with its 70 / 30 split between state & local / federal sales has grown despite relative weakness in federal spending.

■ International Expansion: Grainger highlighted that the international share of its sales has grown to 25% in 2012. Key expansion drivers are customer pull (as customers grow globally they request GWW's services), exposure to high growth emerging markets (especially those with strong activity in sectors with high MRO demand such as industrials), and cost reduction such as through procurement and supply chain management on a global scale. We continue to expect further investment in international growth from GWW.

■ Productivity Gains and Increased Investment: Grainger has recently increased its outlook for growth program spend to ~$160mm (from ~$135mm in last November's Analyst Day), reflecting a better than expected economic environment and results from share gains. Spend should be financed from productivity gains which GWW expects to be in the ~$210mm range (up from ~$160mm last November). Key productivity drivers are higher gross profit, from pricing above cost inflation, private label growth and freight synergies, as well as higher cost leverage. In addition to offsetting growth spend, productivity improvements are expected to lead to 40-60 bps in margin in 2013.

UTX; EPG Presentation: Accelerated restructuring; less M&A = more buy-back, Julian Mitchell, 21 May 2013

■ Chairman and CEO Louis Chenevert is 'confident' of hitting the FY13 EPS guidance, in light of the strong orders performance YTD, and the progress on the GR

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integration. Restructuring is guided to be $150m in Q2 vs the $100m prior guidance, due to project timing; organic sales are likely to be flattish in Q2 y-o-y.

■ Commercial businesses: Orders progress suggests UTX should enjoy a return to organic sales growth in the 2H13. Otis appears to be seeing good Q2 order momentum, and the transitional period that the business has gone through in recent years (particularly in China) appears to be largely complete; we should see 'nice momentum' on Otis earnings from Q2. Resi HVAC has seen a slow seasonal start due to weather.

■ Aerospace: V2500 engines now comprise half the commercial spares revenues in P&W, and the fleet retirements of aircraft using the older engine models are tracking in-line with UTX expectations, suggesting the guidance for 2013 EBIT should be intact. Overall UTX Aero is seeing better than expected sales synergies from the GR integration.

■ Capital allocation: UTX noted that it is likely now to spend $0.5bn on M&A this year against the $1bn place-holder; the 'extra' cash is likely to be returned to shareholders (the $1bn buy-back place-holder is likely to move up to $1.5-2bn this year, in our view).

ETN; EPG Presentation: CBE deal well on-track; customer de-stocking has largely run its course, Julian Mitchell, 21 May 2013

■ Chairman and CEO Sandy Cutler gave an upbeat presentation, underlining the top and bottom line synergies which are being reaped from the CBE deal. We retain our OP rating, and expect more color on CBE sales synergies at Thursday's analyst meeting.

■ Near-term demand trends: The de-stocking which had weighed on sales in late 2012 / early 2013 looks to have largely run its course (although Hydraulics sales will likely remain soft for another couple of quarters), implying a decent y-o-y organic sales trend in Q2 relative to Q1 (down -5%). US demand is seeing its normal seasonal uplift, with decent trends in both resi and non-resi markets (relative to power quality, utility, industrial sectors); Europe remains sluggish.

■ Huge addressable markets opened up by CBE: ETN laid out the new addressable markets which CBE had added to its Electrical portfolio, in particular, in verticals such as Commercial / Infrastructure, Oil & Gas, Utility; from a product standpoint, lighting, wiring devices, and harsh and hazardous instruments are all new channels for ETN to target. In terms of the Services ramp-up, ETN thinks it should be 'pretty easy' to increase the penetration of CBE's installed base, given ETN already has much of the headcount and channels to market already established.

■ CBE integration going well: ETN noted that deal integration is off 'to a terrific start', with good progress on the facility consolidation process, which has just started. CBE's business structure was much more fragmented than at ETN; ETN is focused on significantly increasing the centralization of procurement, manufacturing etc activities, which should drive up margins.

TXT; EPG Presentation: Cessna still very weak; major moves on capital allocation appear unlikely, Julian Mitchell, 21 May 2013

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■ Chairman and CEO Scott Donnelly presented a pretty cautious outlook for Cessna, although the tone on other businesses (including Systems) was fairly upbeat. Overall, it sounds as if all businesses except Cessna are running in-line with expectations. We think there is a decent risk of a fresh guidance cut at Q2 earnings, but the Cessna weakness should be mostly factored into the current share price.

■ Cessna: This is set to be 'another tough year' at the light end of the market, with pricing under pressure due to weak demand conditions. Used aircraft are trending down in volumes, but pricing is still soft; Cessna's own new product launches appear on track for 2H13 / 1H14. Fractional demand remains very subdued. There appear to be no plans for a fresh restructuring program beyond what was announced at the Q1 earnings.

■ Upbeat tone on other businesses: In Industrial, automotive trends are very mixed by region, although it sounds as if China momentum is improving, while Greenlee and the other businesses are 'doing fairly well'. At Bell, there are no signs yet of sequestration hurting military AM, and the V-22 multi-year appears on track for mid- late June sign-off; commercial demand continues to be very strong (oil and gas, emergency response). At Systems, contract wins are allowing the business to outperform the soft markets, and operational performance is improving on the problematic contracts from 2012.

■ Capital allocation: The dividend pay-out is viewed as low relative to peers, and should move up over time. Buy-backs are seen mostly as a mechanism to keep the share cunt flat. On M&A, it still sounds as if there is a valuation dis-connect as regards the Hawker assets, which are of interest to TXT.

Boeing; Charleston Doing its Part on 787 Ramp, Robert Spingarn, 21 May 2013

■ Our visit to Boeing's 787 production facilities in Charleston, SC today gave us greater confidence that BA is on track to achieve a rate of 10/mth, and that the internal learning curve improvement opportunity is significant.

■ SC ramping to 3, enough tooling for 5, & capacity for 7: Charleston is currently producing 787s at a rate of 1/mth, and will ramp to 1.7/mth later this summer and then 3/mth by year-end. Combined with Everett's ramp to 7/mth, this should put BA at its targeted 10/mth rate by YE. Interestingly, SC final assembly already has tooling in place for 5/mth, implying upside to SC's 3/mth and Boeing's 10/mth. However, it appears getting to a rate >10/mth in aft body fabrication would be more challenging in the near-term given space constraints and the need for a 2nd autoclave. Currently, the aft and mid body facilities are at 7/mth. While we believe Boeing will raise the 787 rate beyond 10, to 12 and then 14, we expect that it will need to stabilize at 10/mth first and complete expansion in key areas. However, rates beyond 10 are incumbent upon supplier ability to ramp and are not yet reflected in our out-year forecast.

■ Significant scope for internal cost improvement: As we mentioned in our Boeing note 787: Learning More About the Learning Curve published yesterday, we view Boeing's learning curve as having two pieces, one internal and one external. Today, Boeing provided concrete examples of how it is lowering unit costs by pulling work from inside the aircraft and creating 'feeder lines' to build monolithic parts that are then installed into the aircraft. The first feeder line part in aft body was completed on LN126, and management noted 5 large segments that it can take off in aft and mid body that will result in greater unit cost improvement. BA noted establishing feeder

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lines can take thousands of hours off the assembly, reducing costs and speeding flow times.

KBR; Riding The Canadian Gravy Train, Jamie Cook, 21 May 2013

■ Three-Way Tie on Northwest LNG Feed: KBR was awarded a FEED contract with JGC by Pacific NorthWest LNG (subsidiary of PETRONAS and JAPEX) for the LNG export facility at Lelu Island near Prince Rupert, British Columbia. Pacific Northwest also awarded FEEDs to Bechtel and the Technip/Samsung Engineering/China Huanqiu joint venture for the same contract. Assuming this contract moves forward, with FID expected in late 2014, the project will encompass two trains and associated facilities with an annual capacity of 12 million tons. Associated facilities include utilities, storage, loading, ship berthing and personnel accommodation facilities. The potential size of this project is estimated in the range of $9-$11 billion.

■ KBR Well Positioned: While it's still very early, it is worth noting the KBR/JGC consortium has worked extensively with PETRONAS, constructing eight trains for the Bintulu LNG facility in Malaysia back in the 1990's. It is also worth noting KBR performed the pre-FEED work for Pacific NorthWest LNG project highlighted above. Last, while KBR would not comment, we believe it would be difficult for them to win the entire EPC project and would expect Pacific NorthWest to award the project in multiple packages. Overall, we believe this development supports KBR's competitive strength in LNG and remains one of the best ways to play North American energy infrastructure spend. As such, we reiterate KBR as one of our top picks within the Engineering and Construction sector.

PNR; Full Speed Ahead With Integration, Hamzah Mazari, 21 May 2013

■ We had the opportunity to spend time with Randy Hogan (CEO) at the EPG Conference. Below are our key takeaways:

■ Focus on Integration and Confidence in Synergies. PNR reaffirmed their $230mm synergy target with $195mm in cost synergies by 2015. $80mm in repositioning synergies have already been delivered and the target for 2013 is up to $100mm (from $90mm originally). Tightening operations and applying Lean Enterprise to Valves and Controls and parts of the legacy business (2 GBUs are already world class Lean) are still highlighted as a key source for the target 80 bps of margin expansion through 2015. Focus on reducing business complexity is evident, with both quantitative targets such as consolidating plant footprint and reducing the number of ERPs from 70 to 20 (4 already shut down) and qualitative targets such as implementing One Pentair and streamlining corporate structure with common processes.

■ Resi and Food & Beverage Markets Showing Strength. Growth in sales in Residential and Food & Beverage end markets have helped offset the recent weakness in Industrial. In Infrastructure, desalinization remains slow as does telecom, but municipal break-and-fix orders are fairly healthy. Long-term growth rates by segment remain ~6-8% in Food & Beverage (smaller base), ~5-8% in Residential and Commercial, ~4-6% in Energy, ~2-3% in Industrial, and ~flat in Infrastructure.

■ Optionality in Capital Allocation. PNR expects to generate ~$2.4bn dollars in Free Cash Flow through 2015. With current dividend payout and stock repurchase

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authorization, PNR would return ~$600mm in dividends and ~$900mm in buybacks, leaving the company fairly under levered at 1x Net Debt / EBITDA in 2015. PNR has indicated that it would be comfortable with leverage in the 1.6x-2.2x range which could potentially make up to $2bn in cash available for return of capital to shareholders.

ROK; EPG Presentation: Stable near-term demand; large M&A or buy-back remains unlikely, Julian Mitchell, 20 May 2013

■ Chairman and CEO Keith Nosbusch focused on the four growth platforms at the core of ROK's strategy (OEMs, emerging mkt's, process, new products) as it continues to scale its addressable mkt to $80bn+. Solutions sales should re- accelerate in 2H, given the backlog build in 1H. We found the reiteration of expected China acceleration to be a slight positive.

■ Near-term demand trends: NA is stable, with emerging EMEA showing growth, and China should improve (2H positive y-o-y growth, given Solutions backlog growth and infra projects such as metro trains), unlike India. Auto is expected to be strong for several qtr's, while consumer is stable. Weaker are tire, metals and mining. Although ROK is growing at a lower rate than China peers, this is due to end-market weightings (weak OEM exports to EU, and metals), rather than share loss. Nevertheless, ROK is keen to increase its China offering, and penetration of W.China, as customers curtail investment. Medium-term, ROK is confident in the China growth outlook given wage inflation in automation spending, despite recent sales declines.

■ No large acquisitions or buy-back likely; Process strategy remains ok: ROK does not appear interested in large M&A, and is happy with its partnership model on process instrumentation with Endress & Hauser. In process control, the Logix product and its own DCS offering are driving very good growth (22% sales CAGR in '05-'12) and share gains; adding a parallel range of DCS brands does not appear to be high on the priority list. There is increased comp in the hybrid space from players like Schneider Electric (as discussed in our Hannover Messe report last month), but ROK does not see a change in landscape. The Board doesn't sound supportive of increasing BS leverage to increase buyback.

SPW; EPG Presentation: Flow the clear focus; may need to be patient on divestments, Julian Mitchell, 20 May 2013

■ Chairman, President and CEO Chris Kearney re-affirmed the portfolio shift towards Flow assets, and re-iterated the current restructuring and buy-back plans, which collectively will add $1 of EPS. The presentation should support the current market perception that ongoing portfolio change (the key driver of the share price at present, rather than earnings momentum) is likely.

■ Flow focus to continue: SPW re-affirmed that non-Flow businesses will continue to be divested; SPW has sold 56% of its 2004 sales base in the past 9 years. Management noted that divestments have raised $4.4bn, with key divestments sold for an average multiple of 12.7X EV/EBITDA; there is no intention to rush the sale process however of the non-Flow assets. In terms of acquisitions, SPW have spent $1.9bn on deals since 2005, with the majority going on Flow assets; deals are likely to continue, although near-term little activity is expected. SPW notes that the Flow

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market remains highly fragmented, and that Flow businesses tend to be valued at a higher multiple than multi-industry businesses.

■ Restructuring / Flow margin target: SPW is spending $30m on restructuring activities this year, with much of this investment likely to occur in Q2. $15m of savings are expected in the 2H. Most of the spend will take place at the Thermal and Flow segments, and will be in Europe. Within ClydeUnion, management sound confident that the majority of the issues are now behind the company. For Flow overall, increased discipline on OE order intake, and a bigger push on AM business, are key drivers behind the medium-term target of a mid-teens operating margin.

■ Buy-back / leverage: SPW expects to approach its target leverage range of 1.5-2.5X gross debt / EBITDA as we move through the year. The buy-back of $450m is already underway.

EMR; EPG Presentation - short-cycle bottoming out; no large M&A deals likely, Julian Mitchell, 20 May 2013

■ Chairman and CEO Dave Farr highlighted that Q3 sales, margins and earnings will likely be down y-o-y. Organic orders are expected to be down for the next month or two. This guidance is consistent with our forecasts. We think the stock will likely continue to benefit from the exhaustion of negative catalysts, and the bottoming of short-cycle demand (see our reports last week); we reiterate our OP rating.

■ Short-cycle trends in Europe, alternators, and Process N America are improving: EMR highlighted that N America Process AM weakness has abated and the trends bottomed around a month ago; customer spending should accelerate in the coming months. In Europe, Climate demand has bottomed, and demand is bottoming now in Industrial Automation. Within IA globally, the de-stocking at the power gen business into CAT appears to be largely over.

■ Capital allocation / portfolio: EMR highlighted that no platform deals are likely, with $500m of investment on M&A bolt-ons this year (in CT, IA, PM); further divestments are also set to happen in 2014. The strong cash generation at present should drive another high dividend pay-out later this year.

■ Q2 earnings call guidance adjustments in NP; little change to other segments: EMR had reduced FY13 sales and EPS guide at Q2 earnings; the most significant cuts were to Network Power (margin guide cut by 100bps to 10.3%, vs our 8.9% forecast, and sales guide cut of $100m; a key driver of the 2H margin recovery is due to China demand coming back), and IA ($200m cut to sales guide and margin cut of 20bps to 16.0%). There were minimal changes in the other three segments' guidance (other than $100m sales guide cuts, some of which is due to FX). By region, the outlook is worse in all regions except MEA and non-China Asia.

DHR; EPG Presentation: High gross margin, leading brand, recurring revenue businesses continue to dominate M&A agenda, Julian Mitchell, 20 May 2013

■ President and CEO Larry Culp provided an update on how the company approaches M&A, and the shape of its portfolio, as DHR continues to evolve into a 'science and technology company'. DHR reiterated that $8bn of capital is available for acquisitions. In terms of near-term demand, so far in Q2, China and the emerging

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markets continue to perform well. Investors will likely welcome though the re- affirmation of the importance of significant M&A as a key part of corporate strategy.

■ Gross margin and brand are key: The company has spent $24bn on deals since 2001, which has helped push up sales by 5X over the period. Much of this has been spent on businesses with very high gross margins, which has helped push up overall company gross margins to 52.5% in 2012, from 38.3% in 2001. Going forward, strong brands are a key attribute that most potential targets will likely have, as this will help push up market share as well as gross margins. DHR will continue to use the 'center of gravity' approach when entering new markets; that is, making sure one business is the leader in terms of brand and strategy, even if other similar- sized acquisitions in that same space are undertaken.

■ Recurring revenues increasingly important: Recurring revenues now comprise 40% of sales, against 25% in 2007, through both organic means, and M&A. One advantage of this is that in the current low growth environment, consumables sales are consistently out-growing OE business.

■ Don't forget divestments: DHR emphasized divestments are a key part of its portfolio management, with over a third of the 2001 portfolio having been subsequently exited. At present though, it does not sound as if any business unit is in imminent danger of being divested.

HON; EPG Presentation underlines scope for further margin improvement; Europe short-cycle orders up, Julian Mitchell, 20 May 2013

■ HON Chairman and CEO Dave Cote gave an upbeat presentation; we came away thinking that demand trends are tracking at least in-line with our +1% organic sales growth forecast for Q213 (European short-cycle orders have recovered a little, although it is unclear if this is really the start of a trend; looking further out, quotation activity is picking up in US commercial construction markets), but margin improvement could continue to surprise positively. The stock should therefore react in a slightly positive fashion.

■ Substantial runway left on margins: It sounds as if the issuance of new medium-term targets in March 2014 will contain a healthy margin improvement component, which should help allay concerns that margins are close to 'peaking out'. The Honeywell Operating System for instance is only now 'getting to critical mass'. In particular, functional costs are seen as providing significant opportunities, when HON benchmarks its cost base; functional costs as a share of sales have fallen by 400bps, but there should be at least another 150-200bps of reduction left. Rising productivity is also set to be sustained, with headcount down 8% in the past decade in developed economies despite a significant sales increase.

■ Limited changes likely on capital allocation: Capex and dividends, respectively, remain the key priorities for capital allocation, with strict discipline on size likely to continue as regards M&A (the third priority). One positive is that minimal cash contributions are likely for the pension over the next three years.

■ Offensive and defensive considerations drive ongoing China investment: Although the medium-term top-line growth outlook is clearly more subdued than recent history, Honeywell believes that it should not step back on investments in China, given growth will likely to continue to out-pace that seen in other large emerging markets such as India, and also because competitive pressures globally from Chinese companies are likely to increase (so these companies have to be fought in their home market).

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EMR; 3MMA April orders: -3% exc-FX; in-line performance - HVAC supply chain de- stocking, Julian Mitchell, 20 May 2013

■ EMR April orders (3MMA) dropped -3% exc-FX, vs -2% for the March 3MMA. Given the cautious comments at the recent earnings call that April would mark a deterioration from March, we think these figures are in-line with expectations, and we continue to rate the stock Outperform. In terms of implications, we think the comments on motors and HVAC demand are not positive for RBC; for HVAC OEMs we are not sure if the read is that negative - our impression is more that the supply chain over-stocked earlier in the year, and is now 'digesting' this over-build.

■ Climate the segment showing incremental softness: CT orders were flat exc-FX after +3% organically in March (Europe has stabilized; Asia and US Resi growth is softening). Commercial & Resi Solutions was up slightly after flat trends in March, due to US resi demand.

■ Process Automation remains sluggish, Industrial Automation weak: Exc-FX Process 3MMA orders were up slightly, consistent with +3% in March (it was encouraging that US demand has recovered somewhat, given US AM business is highly profitable). IA saw another quarter of a low teens decline; the weakest business remains power gen alternators and motors and drives, with no signs of improvement in European demand.

■ Network Power continues to fall: Orders exc-FX were down at a high single digit rate, in-line with March; while demand is soft, we think the next major news here will likely be positive, which is the sale of EC&P.

LatAm Transportation Sector; Straightening Ports Investments (The New Ports Law), Bruno Savaris, 20 May 2013

■ A Recap on the Legal Discussion on Ports. Back in 2007/2008, the emergence of many port projects in Brazil gave rise to much legal debate about the regulatory framework for ports. After establishing a revised framework back in Oct-2008 (Decree 6.620), in Dec-2012 the government once again revised the regulatory structure and launched a provisional decree (MP 595) that sets forth the guidelines for the development and operation of public and private ports in Brazil. We welcome the government’s efforts to straighten out the ports regulatory framework in Brazil and see this initiative as positive for the industry, as it should boost private investments in the sector.

■ The New Ports Law. The regulatory framework for ports (MP 5959) was approved by the chamber of deputies and the Senate, and President Dilma Rousseff has 15 working days to approve MP 5959 and sign it into the new ports law. Under the new regulatory framework, the concept of own or third-party cargo is no longer important. Going forward, the key issue will be the distinction between public port (organized port zones) and private port. President Rousseff should veto certain amendments that go against the government’s ultimate goal with the launch of the new ports regulatory framework, which is to improve Brazil’s infrastructure and logistics bottlenecks.

■ Credit Suisse View: While positive for the country, at first glance, for listed companies, the reading should be at best neutral. Some of the main aspects of the new regulatory framework remain uncertain, mostly with regards to the concession

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renewal mechanism to be used for the existing port terminals (post 1993). In our view, the government has other priorities in the short term rather than focusing on the renewal of existing concession contracts, especially those that will only expire in about nine years, such as that of Santos Brasil. Consequently, we would expect more concrete developments on this matter towards 2015/2016 (after the elections).

CAT; CAT Dealer Stats – April, Jamie Cook, 20 May 2013

■ Machine Sales Weaker Than Expected; NA Declines On Mining/Coal: Total machine sales fell 9% y/y vs. down 11% in March and down 13% in February. While we were hoping for some improvement, sales were a bit weaker than we expected, particularly in NA, which saw sales decline 18% y/y vs. down 11% and 12% in March and April, respectively. The decline in NA was primarily due to mining and coal which were fairly strong last year. Comps are expected to improve over the next several months. On the construction side, sales continue to hold up, seeing only moderate improvement in April. LatAm sales continue to be robust, jumping 28% y/y and accelerating from 12% growth in March and 3% in Feb, particularly driven by strength in both private and govt infrastructure. Asia/Pac sales declined, although more moderately, down 20% y/y in April vs. down 24% in March and down 26% in Feb. Asia/Pac saw a slight pickup in end user demand, particularly in China, as inventory adjustments have been made. EAME saw its sales decline moderate, down 3% y/y, vs. down 8% in March and down 9% in April.

■ Engine Sales Improve Modestly: Total Engine sales were down 5% y/y in April, an improvement from down 6% in March and down 7% in Feb. Overall, sales were in line with expectations, with the exception of Oil and Gas which saw its sales decline accelerate, down 6% y/y in April vs. down 1% in March and down 8% in Feb. CAT continues to see good demand for gas compression, although oil services was weaker than expected. Transport was up 8% y/y, decelerating from 19% growth in March and 15% in Feb, which was attributed to lumpiness in sales related to rail and marine. Elec Power was not a surprise, down 11% y/y vs. down 17% in March and down 8% in Feb. Industrial showed some improvement from depressed levels, although was still down 7% y/y vs. down 24% and 25% in March and Feb, respectively.

WCC; Pricing Not Getting Worse, Confident in Margin Expansion, Hamzah Mazari, 20 May 2013

■ We had the opportunity to spend time with John Engel (CEO) at the EPG Conference. Below are our key takeaways:

■ Margin Expansion on Track. WCC appears confident in driving to 8% EBIT margin through higher gross margins (pricing & sourcing), product line expansion and better cost leverage. April sales trends were in line with March and also internal expectations. In a construction recovery, WCC believes despite inherently lower gross margins, the pull through should be higher on those sales so do not expect a significant margin headwind in non-resi recovery. It is also important to note that some excess distribution capacity has been absorbed with the current US resi construction recovery (a lot of privates play here).

■ Gaining Share in Canada. WCC highlighted that the Canadian business including EECOL is seeing share gains. Rexel's business was down low single digits in Canada while WCC grew about 5 points. Despite acknowledging that Canada has

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slowed somewhat, the company still expects to grow revenues. We believe low single digit growth for 2013 is achievable in Canada (EECOL should add $1 of EPS).

■ Bullish on Utility and Consolidation. We estimate WCC portfolio can target ~12-15% of the over $110bn annual utility spend in North America. In addition, acceleration of consolidation both on the supplier side and within the distribution industry should help WCC as customers tend to want to do business with larger players that can better drive supply chain integrity.

EMEA Research Smiths Group; Solid Q3. JC better, Detection worse, Andre Kukhnin, 24 May 2013

■ Bottom line - Solid IMS, expect consensus flat. Smiths released a solid Q3 IMS with trading overall in line and full-year expectations remaining unchanged (albeit with a changing divisional mix). We expect the consensus of £3.14bn sales and £576m operating profit to remain broadly unchanged. Divisionally, John Crane outlook has improved (strong order book) while Detection has worsened (contract delays). Net debt increased in Q3 to £891m vs £855m in H1 because of interim dividend and FX but we believe the company is on track to deliver £740m net debt at the year-end.

■ By division. John Crane - Growth and margin improvement continued. With order book up yoy and positive book:bill, the outlook has improved, with the company now expecting H2 sales growth and margin expansion. Medical - Revenue growth is sustained, which the company expects to continue while profitability is impacted by investment and the US medical devices tax and as a result expected to be lower yoy. Detection - Progress continued in Q3 but contract delays are expected to impact Q4 with H2 revenues expected to decline yoy (with a very tough comparator in Q4). With resultant under-absorption and contract mix, margins for full year are expected to remain flat. Interconnect - Saw growth in Q3 but Q4 outlook is challenging given a touch comp and end-markets uncertainty. Flex Tek - Strong growth continued driven by Aero and US housing with outlook remaining positive despite tough comps.

■ Valuation: On our 2014E calendarised estimates, Smiths is trading on a P/E of 12.4x and EV/EBIT of 10x, on average a c10% discount to the UK Industrials universe, which we think is attractive. The stock is trading on 2014E calendarised EV/Sales of 1.94x vs our 19.3% margin forecast.

■ Catalyst: FY 2013 results on 18 Sep 2013.

ABB; EPG 2013 - Remains most attractive Electrical, Simon Toennessen, 22 May 2013

■ ABB's CFO Eric Elzvik held an upbeat presentation at the EPG conference this morning with positive mix effects seen in Q1 continuing in Q2. ABB remains the most attractive Electrical in our view and we reiterate our Outperform.

■ Reiterate Power Product margin guidance - ABB's CFO sees the 14.5-15% margin range for FY13 as the minimum level yet he sticks to the guidance for this year. We continue to believe that mgmt might upgrade guidance throughout FY13 and think consensus (14.9% vs. CS 15.5%) will edge higher given potential for a) improving

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new order pricing positively impacting P&L, b) mix effects and c) strong execution on cost savings.

■ Positive trends in Robotics, Oil & Gas; mining solid - ABB continues to flag the strong trends in Robotics particularly in China which has boosted overall order growth of 20% in China in Q1 (+10% in Q4) as well as a lot of shale gas related activity mainly transportation related. Its metals/mining exposure (c.25% in DM & PA) has been an area of investor concern yet ABB sees a solid development due to productivity focus for existing mining assets.

■ M&A activity remains - Despite the upcoming departure of CEO Joe Hogan ABB reiterated its ambitious targets for inorganic sales growth (3-4% CAGR) outlined in the 2015 targets. The CFO flagged that the geographical balance in Low Voltage is still not perfect with now 26% of sales derived from the Americas which could mean more M&A in NA going forward.

■ Key investment case - We continue to see ABB as the best play to benefit from an attractive Automation end market medium to long term in EM yet also in the US. ABB's strong solution offering should allow for market share gains and a rising service business should lead to a positive mix effect on margins. A strong balance sheet allows further earnings-accretive deals.

■ Valuation: On 9.3x FY14E EV/EBITA we view ABB as attractive given inline valuation to peers despite higher EPS growth (avg. 17% vs 10% pa in FY13-15), strongest balance sheet and one of the most compelling HOLT® profiles.

GKN; CMD - Driving revenue and margin growth, Jonathan Hurn, 22 May 2013

■ Event: Yesterday we attended the GKN CMD in London. The event saw no change to message, with GKN remaining committed to growing in excess of its underlying markets across all four divisions (helped by factors including a 100bp increase in gross engineering spend) while group margins should continue to expand within the 8%-10% range aided by improving profitability particularly at Driveline and Aerospace. No comments were given on trading but management reiterated that Land Systems continues to be impacted by weakness in mining/ Europe while on the flip side Powder Met has managed to maintain its European auto sales despite the YoY production declines in the region. Our key takeaways:

■ Driveline: Improved profitability remains a focus for investors. Encouragingly management reiterated their emphasis on on-going management of the fixed cost structure (particularly Europe), contract selection and improved purchasing /optimisation of the supply chain as continuing actions that will support their commitment to the delivery of an 8%-10% margin range (7.3% 2012A). Penetration of AWD underpinned by the Gertrag acquisition will contribute to above market divisional growth rates (+2%).

■ Aerospace: Margin uplift further into the 11%-13% range to be driven by ramp up phase of large civil (A350XWB, B787), on-going Volvo integration, continued cost management and lean initiatives both internal and through the value chain. While military budgets remain uncertain that F-35 production ramp up will help to offset this. Civil pricing however is a divisional headwind for now as OEM's look for price down in response to increasing build volumes.

■ Land Systems: Division viewed as core for now with no plans to divest wheels. A greater focus on integrated product solutions (aided by the acquisition of Stromag) is

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seen as a key driver of growth as the division looks to increase content per off-road vehicle.

■ Powder Met: Forecast to remain the highest growth division at +3% vs. market as sinter metal products increase penetration within existing markets (automotive) and enter new markets (e.g. hydrogen storage). Contract selectivity and design for PM to increase margins further within the 9% to 11% range.

■ We remain at OP with GKN continuing to offer an attractive self-help expansion story (margin and growth) at a still undemanding valuation - 2014E EV/Sales of 0.82x vs. a 2014E Group EBITA margin of 9.3%.

Philips; EPG 2013 - Committed to targets; trading unchanged; focus on costs; capital allocation, Simon Toennessen, 21 May 2013

■ A confident presentation by CEO Frans van Houten at the EPG conference and in a sell side meeting stressing the commitment to reach the Accelerate targets in FY13 as well as the strict focus on improving operational excellence.

■ Committed to targets / delivery might be tough - During the presentation management reiterated its Accelerate targets, yet we believe the slower growth environment (particularly in Healthcare) could make it tough to reach its margin guidance range (10-12% vs. CS 9.3%). That said, a potential miss will be taken less negatively if Philips presents new targets next September.

■ Trading unchanged since Q1 - Management flagged that the slow top-line growth trend in Q1 has continued into Q2 with a similar picture in Healthcare and Lighting growth dampened by no commercial construction activity.

■ Strong focus on costs - Given slower top-line growth management underpinned that resource allocation has become a much more careful approach and the company will be very stringent on any costs apart from selling and R&D expenses. Between FY14-16 management targets additional cumulative savings of EUR1bn mainly derived from more efficient procurement and supply chain management to leverage global spend.

■ Yen depreciation impacting Healthcare - Philips' CEO highlighted that the weak Yen is causing some changes in the marketplace with some Japanese players being more aggressive in their behaviour outside of Japan.

■ Capital allocation a key topic in September - While M&A activity might pick up in FY13 for smaller-sized deals we view the potential for another share buyback as most realistic given ending of the current buyback.

■ Valuation: On our estimates, Philips is trading on 8.4x 2014E EV/EBITA (7% discount to its Electricals peers), which we view as fair given the challenging operating environment and prefer Siemens (Outperform) on 7.1x.

Schneider ; EPG 2013 - Upbeat view on China reiterated, Simon Toennessen, 20 May 2013

■ Upbeat tone on China reiterated - Schneider's CEO Jean-Pascal Tricoire presented at the EPG conference this morning reiterating the company's more constructive view on China highlighted already at the Q1 results on 23rd April. Management

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believes customers are more optimistic vs. 6 months ago with entrepreneurial activity back on track and business confidence provided by the new government.

■ Europe challenging; more positive on Italy - Schneider's CEO flagged more optimism with regards to the outlook for Italy based on the willingness to change and adapt new measurements implemented by the government. Elsewhere, Schneider remains positive on the development in Northern Europe with more encouraging trends coming from the UK while Southern Europe continues to remain challenging.

■ Shifting further to process automation - Schneider believes that due to on-going technology improvements the company will be able to offer customers more solutions to customers operating in both discrete and process automation markets. Management flagged that the company does not desire to become a specialised player in process but rather aims to capitalise with customers requiring application in both automation markets.

■ No update on profit bridge: There was no update on the H1 margin outlook apart from the reiteration that on a full year basis margins should be flat to slightly up. We view the lower end of the guidance as conservative and believe Schneider's profitability will be positively impacted by raw material tailwinds and on-going price discipline. We forecast a 15.0% EBITA margin in FY13 compared to 14.7% last year.

■ Valuation: On 13.0x earnings and 10.1x EV/EBITA in 2014E we believe that Schneider's valuation looks fair and we prefer ABB (Outperform) on a 6% and 8% valuation discount respectively.

Asia Research Machinery sector; Identifying stocks to pick up in wake of correction; Comment, Shinji Kuroda, 28 May 2013

■ Action: As outlined in our 27 May report entitled Price levels around 1 May likely mark near-term share price downside, shares in Amada, Komatsu, Makita, Nabtesco, Keyence and other companies may already have reached their near-term share price downside. On the other hand, further downside appears to be in store for the shares of Okuma Corporation, Ebara, Daikin Industries, NSK, NTN, Tsubakimoto Chain, THK, JGC, and Chiyoda Corporation. However, in each of these cases earnings look to be recovering after finding a bottom; furthermore, these companies' forex assumptions seem conservative. We see scope for renewed appreciation once the gaps that have opened on share price charts are filled.

■ We screened for stocks to pick up in the wake of this correction, with a focus on: (1) whether 1Q profit is likely to increase or decrease YoY; (2) the likelihood of upward revisions to guidance during the fiscal year; and (3) key catalysts. We highlight Yaskawa Electric, Mitsubishi Heavy, and JGC as companies likely to report YoY profit growth in 1Q and at some point increase full-year guidance. We think Amada and NSK are highly likely to report a YoY decline in 1Q profit but raise their full-year guidance regardless. There is also likely to be long-term interest in Ebara and other machinery stocks connected with energy projects, including North American shale gas.

Korean Auto Sector; Maintain Overweight, Henry Kwon, 27 May 2013

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■ In October 2012, we highlighted that the JPY/USD was the primary bearish factor for the Korean auto sector (see Kwon's report-Is it KRW/JPY or JPY/USD?, 23 October 2012). We have also argued that Hyundai Motor is likely to trade in a range of W190,000-245,000 in November (see: From 27 MPG to 26 MPG: The real impact should be limited, 05 November, 2012). We continue to believe that the JPY/USD should be the main underlying bearish factor, but less so going forward due to fuller Japanese sector valuations.

■ What is different now from 4Q12 is that Japanese valuations have expanded significantly during this time. When we compare the EV/sales with OP margins for global automotive OEMs, we see that the Koreans had relatively high valuations in October 2012, while they now have some of the cheapest valuations globally.

■ What makes this valuation argument attractive is that risk premium on the Korean sector seems overly high relative to fundamental risks.

■ We feel we are now closer to re-entry point than a month ago.

Japan Auto Sector; No bubble for Japanese automakers; recommend buying on dips; Sector Review, Issei Takahashi, 27 May 2013

■ Maintain OVERWEIGHT: We reiterate our OVERWEIGHT stance on Japanese automakers. While distortions are starting to emerge among individual company valuations, overall we believe valuations are appropriate, reflecting only a gradual pricing in of prospects for earnings improvement driven by the weak yen, rather than an overheated market. We recommend stock selection based on careful assessment of valuation levels, as we believe investors now need to seek out undervalued stocks amid instability in the market.

■ Interest rate volatility remains a risk, even if equity market volatility dissipates: As discussed in our report on the Japanese auto sector Reiterate OVERWEIGHT stance on automakers amid prospects for lower risk premium, we believe automakers are well placed to benefit from the current macroeconomic environment.

■ In the capital asset pricing model (CAPM), beta and risk-free rate assumptions have the largest impact on theoretical share prices. Increased share price volatility leads to a rise in beta (reducing theoretical share prices), while an increase in interest rate volatility for government bonds pushes down theoretical share prices due to a rise in the country risk premium. Provided the weak yen trend continues, we think automakers are likely to outperform TOPIX as they are one of the industries offering the best prospects for improvement in fundamentals. However, absolute share price levels are likely to be affected by CAPM factors. Our assumptions are ¥100/USD (previously ¥95), equity risk premium 5.5% (6.5%), and risk-free rate 0.62% (0.73%).

■ Stock calls: Toyota (7203, OUTPERFORM, TP ¥7,690) remains our top pick in the Japanese Big Three, while Isuzu (7202, OUTPERFORM, TP ¥1,100) is our top pick among mid-tier OEM automakers. Although a scenario of further yen depreciation diverges significantly from our Japan economics team's fair-value estimate for the JPY/USD rate, we think investors should consider retaining FHI (7270, OUTPERFORM, TP ¥2,710) in their portfolios as a play on any further weakening of the yen.

■ Uncertainty about Indonesia's low-cost green car (LCGC) program has weighed on Daihatsu's (7262, OUTPERFORM, TP ¥2,640) share price, but we think valuations

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could rise if the market begins focusing on prospects for profit growth from 1H FY3/14 driven by the domestic market.

Crompton Greaves; 4Q13: Disappointment continues; no signs of a turnaround yet, Amish Shah, 27 May 2013

■ CG’s 4Q13 recurring PAT (consol.) was Rs114 bn, down 89% YoY and significantly below our estimate. Domestic business profit at Rs1.1 bn was 30% below estimate led by a 328 bp YoY margin contraction. The overseas business continued to report EBITDA loss led by liquidated damages incurred on orders shifted from Belgium to the Hungary facility.

■ Management attributed the decline in domestic power systems margins to a higher proportion of systems revenue (earns lower margins than products) in 4Q13. Consumer business revenue grew 23% YoY but margins fell 230 bp YoY due to a higher promotional spending.

■ Management expects 8-10% topline growth and better overallprofitability in FY14 (no margin guidance). However, considering that the Hungary facility delivered 14 transformers in FY13 and 32 orders had been shifted to Hungary from Belgium, we believe that the risk of further liquidated damages hitting in 1H14 remains.

■ Post extremely weak 4Q13/ FY13, we cut our FY14E/15E EPS by 16%/11% as we build in lower domestic margins and slower execution. Pending clarity on the overseas business turnaround and rising domestic profitability pressures, we maintain UNDERPERFORM.

Daihatsu Motor; Strong domestic sales offsetting LCGC delays; Increase Target Price, Issei Takahashi, 24 May 2013

■ Action: We raise our target price for Daihatsu from ¥2,380 to ¥2,640 (potential return 27.3%) and maintain our OUTPERFORM rating. Domestic sales are favorable, and we expect the company to report higher profits in 1H FY3/14. The dividend yield also remains attractive, in our view.

■ Investment case: We forecast FY3/14 OP of ¥165bn (I/B/E/S consensus ¥142bn). Our forex assumptions for FY3/14 and beyond are now ¥100/$ (previously ¥95/$) and IDR9,700/$. We push back the assumed start of sales bookings for the low-cost green car (LCGC) to October but meanwhile raise our outlook for domestic minivehicle volume to 700,000 units (guidance: 630,000 units). With Japan's minivehicle market running at an annualized 2mn units, we think that Daihatsu- which has a solid new-model pipeline-is poised to exceed its target here. We expect this to fully offset LCGC delays.

■ Please refer to our Indonesian survey reports, Time to re-enter and Implications of Indonesia for our views on LCGC and the Indonesian market.

■ Catalysts/Risks: Catalysts (1) the launch of the LCGC policy and (2) firm sales in Japan and overseas. Risks (1) IDR depreciation versus the dollar and (2) delays to the LCGC policy.

■ Valuation: We base our ¥2,640 TP on our FY3/14 BPS forecast of ¥1,346 and a fair- value P/B of 1.96x (previously 1.84x) derived from ROE and cost of capital. We

i-Spy Global Industrials Weekly 36 28 May 2013

assume a 12% medium-term sustainable ROE, a 5.5% equity risk premium (previously 6.5%), and a 0.62% risk-free rate (0.73%). Implied P/E is 10.7x.

Nissan Motor; Undervalued, with profit improvement from 2H; Increase Target Price, Shinji Kuroda, 24 May 2013

■ Action: We raise our target price for Nissan from ¥1,150 to ¥1,380 (potential upside 18.2%). We reiterate our OUTPEFORM rating as the stock looks undervalued. In addition, the high dividend yield lends a sense of stability. We look for profitability at China operations to improve from 2H.

■ Investment case: Our FY3/14 consolidated OP forecast of ¥800bn (including proportional consolidation of China JV) is above both the I/B/E/S consensus (¥757bn) and management's projection (¥700bn). We now assume ¥100/$ from FY3/14 on (previously ¥95/$) and estimate OP changes by ¥15bn for every ¥1 change in the yen's value against the dollar and zero for the same change on the Russian ruble. On top of increased US sales momentum after the end of production cutbacks, we expect a clear recovery in profits and sales momentum from 2H on: (1) a full-fledged recovery in China business profits and (2) expanding sales in Europe, boosted by launch of the new Qashqai. We continue to believe Nissan's profitability is underrated.

■ We also think it the company unlikely to use surplus cash to boost its dividend at this time. Points to watch for are: (1) credit ratings from credit rating agencies and (2) an automotive business net cash ratio commensurate with Toyota and Honda. For the time being, we expect dividend hikes will be limited to amounts merited by profit increases, but we think that should be enough to support the stock on any downturns.

■ Catalysts/Risks: The key catalysts will likely be a recovery/normalization of sales and profits at US and China operations. The main risks are a delay in normalization of China sales/profits and a higher-than-expected rise in sales promotion expenditure in Japan, the US, and Europe.

■ Valuation: We base our ¥1,380 TP on a FY3/14E BPS of ¥1,015 and a fair-value P/B of 1.36x (previously 1.2x), derived from ROE/cost of equity capital, assuming FY3/14 ROE of 12.1% (previously 12.8%), an equity risk premium of 5.5% (6.5%), and a risk-free rate of 0.62% (0.73%). Our TP gives an implied P/E of 12.0x.

Fanuc; Time to invest on prospects for a year out; Increase Target Price, Shinji Kuroda, 23 May 2013

■ Action: We revise our forecasts for Fanuc and raise our target price from ¥17,500 to ¥20,000 (potential return 20.2%). We maintain our OUTPERFORM rating and extend our estimates to FY3/16.

■ Investment case: The shares already reflect falling robodrill demand and weak guidance and are lagging the sector. However, they are also a pure automotive capex play (around 50% of sales) at a time when not only Japanese automakers - Honda Motor's (7267) FY3/14 capex budget is +18% YoY - but also General Motors (¥1.6tn in investment through 2016) are turning aggressive on new investment. In addition, we think robodrills have entered a recovery phase as evidenced by

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monthly orders at THK. We therefore continue to believe that now is the time to invest in Fanuc on prospects for a profit recovery a year out.

■ We raise our OP estimates for FY3/14 from ¥170bn to ¥175bn (1H: ¥66.4bn, -35% YoY; 2H: ¥108.6bn, +31%) and for FY3/15 from ¥200bn to ¥202bn (IFIS consensus ¥187bn).

■ Catalysts/risks: We see machine-tool orders as the key near-term catalyst. These rose from ¥70bn in January to ¥80bn in February and ¥90bn in March, and we expect them to remain on a modest uptrend before picking up speed from around Jul-Sep. Risks include a falloff in automotive capex and a sluggish recovery in machine-tool orders.

■ Valuation: We base our ¥20,000 TP on an ROIC model, using ROIC of 10.54%, a risk-free rate of 0.62% (previously 0.73%) and a risk premium of 5.5% (6.5%), applied to our FY3/15 estimates. Implied P/E and P/B are 27.6x and 3.1x. The shares have tended to trade at 2.7-2.8x book value during the first year of earnings recoveries, and after stripping out cash these valuations therefore do not look especially high to us.

L&T; 4Q13 inflows strong but operating results weak; FY14 inflow growth target appears optimistic, Amish Shah, 22 may 2013

■ L&T’s 4Q13 recurring PAT at Rs17.7 bn (up 1% YoY) was almost in line with estimates. However, EBIT at Rs22.3 bn was 10% below estimates led by 12% lower-than-expected revenue. L&T won Rs279 bn worth of orders in 4Q13 (up 32% YoY), thus exceeding its FY13 guidance of 15-20% order inflow growth. E&C EBITDA margin declined 120 bp in FY13 vs. revised guidance of 50-100 bp decline.

■ L&T has guided for 20% order flow growth in FY14, which it expects to achieve by winning orders worth c.Rs250 bn (vs. Rs130 bn in FY13) from overseas markets. L&T also expects another Rs100 bn of deferred orders to materialise in FY14. However, our bottom-up model suggests that L&T should be able to achieve 11% order flow growth.

■ The company has guided for 15-17% sales growth for FY14 which appears achievable; however, margins are likely to witness further 28 bp compression vs. guidance of flattish margins in FY14. Mar-13 orderbook grew only 5% YoY to Rs1,536 bn as L&T has written off Rs170 bn worth of slow-moving orders from its orderbook.

■ We tweak our FY14/15E consol. EPS -1%/3% and TP to Rs1,433. Trading at 15x fwd earnings (parent), the stock appears fairly valued.

Teco - Maintain OUTPERFORM, Jerry Su, 22 May 2013

■ We took Teco on a non-deal roadshow in Hong Kong and Singapore last week and met over 30 investors. Teco expects its motor business to see 10-15% YoY growth in 2013 with better GM on mix shift and lower commodity pricing. It believes large motor demand from North America will see strongest growth given better oil and gas, automotive, and power generation demand.

■ Teco also targets ~15% YoY growth for system automation in 2013. It said it has already seen double-digit YoY sales growth from China in 1Q13 on more channels

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and mild demand recovery. It believes JPY depreciation helps to lower costs as its distribution of Yaskawa's servo motor and IGBT for inverter are priced in JPY.

■ 1Q13 results suggest restructuring of Tecom is on track as its OPM improved to nearly breakeven vs -7% in 4Q12. We estimate Teco's GM excluding Tecom has reached 26.2% in 1Q and could further improve in 2Q on lower material cost and JPY depreciation.

■ We maintain our OUTPERFORM rating with NT$32.5 TP, based on our SOTP model, implying 1.45x 12M P/B. The stock is trading at 15.4/13.6x 2013E/14E P/E vs 11-22x for its global peers.

Korean Auto Sector; Maintain OVERWEIGHT. Misconceptions regarding automotive incentives in the stock market, Henry Kwon, 22 May 2013

■ We have been arguing that incentives are basically defensive mechanisms in the auto market that are typically used when sales are weak. Monthly observations in the US market since January 2008 would seem to support this thesis well for both Korean and Japanese brands.

■ Some investors have been voicing concern that Japanese brands may add more content as standards which should be considered hidden price deflation. Korean makers used this tactic for two decades in the US with no tangible benefit to market share in our view. The two major catalysts for Korean share jumps came with: (1) ten-year product warranty introduction at the turn of the new century and (2) complete change in design philosophy beginning with the 2009 model year.

■ We continue to maintain there is no factual support for the prevalent view that there is a Japan-Korea zero sum game.

■ JPY:USD is the main catalyst in our view, and while Korean valuations have contracted to attractive levels, we look to the winding down of the JPY:USD trade as the key trigger.

Yaskawa Electric Corporation; Expect upward revision to FY3/14 guidance, medium- term goals may be met a year early; Increase Target Price, Shinji Kuroda, 22 May 2013

■ Action: We raise our forecasts for Yaskawa Electric and change the reference year for our valuation model from FY3/14 to FY3/15, revising our target price up from ¥1,000 to ¥1,800 (potential upside 27%). We reiterate our OUTPERFORM rating. We also introduce our FY3/16 forecasts.

■ Investment case: We look for brisk capex by the SPE and automotive industries to buoy Yaskawa's monthly orders, for which we forecast sustained double-digit growth. With yen weakness also providing a boost, we anticipate an upward revision to guidance around the time of the 2Q results announcement

■ We adjust our forex assumptions to ¥100/$ and ¥130/Eu and raise our FY3/14 OP forecast from ¥22.8bn to ¥29.6bn (23% above guidance for ¥24bn and 18% above the ¥25.1bn IFIS consensus). For FY3/15 we raise our OP estimate from ¥21.2bn to ¥32.0bn, 10% higher than the ¥29.1bn IFIS consensus.

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■ Catalysts/risks: Catalysts would include a hike in full-year guidance when 2Q results are announced, spurred by upbeat capex by automakers and high-tech companies such as TSMC and a likely resulting acceleration of YoY growth in monthly orders into double digits. Risks include forex swings, scaled-back capex by the automotive and high-tech sectors, and a seasonal slowdown in Chinese demand.

■ Valuation: Our ¥1,800 is derived by applying our ROIC model to our FY3/15 estimates. Implied P/E is 23.8x, and implied P/B 3.4x. We expect FY3/15 to mark the second year of Yaskawa's earnings recovery and, accordingly, use valuations comparable to those in FY3/12 (P/E of 23.2x) and FY3/06 (30.3x). We now assume an RFR of 0.62% (previously 0.825%) and ERP of 5.5% (6.5%).

JGC Corporation; FEED contract for major North American LNG plant; first for this market; Company Update, Shinji Kuroda, 22 May 2013

■ Event: JGC announced on 22 May that it has won a FEED contract for a major Canadian LNG project in partnership with US-based KBR. The client is Pacific Northwest LNG, a JV between Petronas (Malaysia; 90%) and Japan Petroleum Exploration (JAPEX; Japan; 10%). The resulting plant is expected to be a large one, with 12mn tons of annual capacity split evenly between two trains. FID is scheduled by end-2014. Assuming the project reaches engineering, procurement and construction (EPC), we think it could be worth a total of ¥9-11bn overall. In addition to JGC/KBR, FEED contracts have also been awarded to Bechtel (US) and to a group comprising Technip (France), Samsung Engineering (South Korea), and China Huanqiu (China).

■ JGC's first LNG project in North America: JGC has a long track record in LNG projects around the world, but this is its first one in North America. North America has numerous shale gas-based LNG projects under planning, and we think this could give JGC a foothold toward more North American orders.

■ While multiple companies are taking part in the project's FEED process, we think the KBR/JGC pairing has an edge in securing an eventual EPC contract. KBR/JGC built the Bintlu plant (train 1-8) for Petronas in Malaysia, and JGC secured an order for train 9 on its own this past March.

Mitsubishi Electric; Strategy briefing: Clearly defined strategy for renewed growth, shareholder returns; positive, Hideyuki Maekawa, 20 May 2013

■ Event: Mitsubishi Electric’s president, Kenichiro Yamanishi, held a management strategy briefing on 20 May. Although the growth strategy and numerical targets remain largely unchanged, the briefing defined the future direction of the growth strategy in simpler and clearer terms than in the past. The company clarified its intention to attain the ¥4tn sales target in FY3/14 that the president had laid out at the time of his appointment as well as a roadmap for achieving ¥4.5tn in sales in FY3/16. The firm also discussed its goal to raise the dividend payout ratio and put a renewed emphasis on FA demand recovery in the near term. Our impression is positive as the above factors are likely to support Mitsubishi Electric’s share price. However, the firm’s profit margin target by business (discussed below) and its FY3/14 guidance by segment point to OP of roughly ¥260.0bn and EPS of just over ¥70. This implies the shares are currently trading at a P/E of around 16.5x, which in

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turn suggests the shares may not be that undervalued in light of their recent strength.

■ Key takeaways from the strategy briefing: The five key points include: (1) Numerical targets: The key management indicators the firm looks to achieve on an ongoing basis remain essentially unchanged (OPM of more than 5%, ROE of more than 10%, D/E ratio of less than 15%). In FY3/13, it had an OPM of 4.3%, ROE of 5.7% and a D/E ratio of 15.9%. (2) Promotion of growth strategy: Mitsubishi Electric targets sales of ¥4tn at the earliest, ¥4.5tn by FY3/16, and an overseas sales weighting of 40%. It aims to achieve the ¥4tn sales target in either FY3/14 or FY3/15 through its eight key businesses (electric power, transportation, building, FA, automotive equipment, power devices, airconditioning, and space systems). The firm aims to attain ¥4.5tn in sales in FY3/16 mainly through growth in the eight key segments (from over ¥2.5tn in FY3/13 to ¥3.35tn), growth in the solutions business, and sales expansion in emerging markets (China, India, Thailand, Turkey, Mexico, Brazil, and Indonesia). (3) OP target by segment (in which the firm aims for OPM of more than 5%): industrial mechatronics (10%), heavy electrical (8%), information & communications, electronic devices, home appliances (5%). Based on ¥3.81tn FY3/14 sales guidance, we estimate OP of around ¥260.0bn, but sales of ¥4tn could yield further increase in OP to the tune of several tens of billions of yen. (4) Shareholder returns: A reduction in interest-bearing debt has been a key management indicator for Mitsubishi Electric so far. Since the firm is on the verge of attaining the target, it aims to divert future cash flow to investment for growth and higher dividends. Although it has not indicated a particular payout ratio, the firm could consider raising the ratio over the 20-25% it has paid in the past. However, it has no plans to buy back shares. (5) Near-term FA demand: Mitsubishi Electric sees FA demand bottoming out based on demand recovery in LCD and organic EL for Korea in Mar-Apr, NC for China, and microprocessor for China/Taiwan (same details as those announced at the results release earlier).

i-Spy Global Industrials Weekly 41 28 May 2013 Global Macro Forecasts

Exhibit 13: Global Macro Forecasts

Source: Credit Suisse estimates

i-Spy Global Industrials Weekly 42 28 May 2013 Valuation & Performance

Exhibit 14: Sector Valuation & Performance Americas P/E AVG P/E (5Y) PE/G EV/Sales EV/EBIT EV/EBITDA P/B Yield Performance Sector 12 13E 14E FY1 FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Canada Industrials 16.8x 16.0x 13.8x 16.9x 14.3x 1.1x 1.1x 1.7x 1.5x 13.0x 12.4x 10.6x 9.5x 9.0x 8.0x 3.0x 3.3x 2.7x 2.3% -1% 5% -2% 11% 6% 21% -9% 1.14 LatAm Industrials 22.7x 17.8x 17.6x 15.9x 13.0x 1.5x 1.9x 1.7x 2.2x 8.3x 13.7x 13.2x 5.7x 10.6x 11.4x 4.3x 3.9x 3.6x 2.4% -2% 10% 11% 23% 15% 55% -5% 0.83 US Aerospace 23.2x 16.6x 14.5x 15.2x 12.4x 1.3x 2.1x 2.0x 2.2x 13.5x 11.6x 9.7x 11.2x 9.3x 8.9x 2.7x 2.3x 2.9x 0.6% -1% 7% 19% 26% 20% 45% -5% 1.22 US Automotive 14.4x 13.7x 11.1x 14.5x 11.4x 0.2x 0.8x 0.7x 0.6x 11.0x 9.3x 7.3x 7.2x 6.1x 5.1x 2.0x 1.8x 1.8x 2.2% -1% 9% 16% 32% 20% 66% -3% 1.50 US Defense 12.2x 11.3x 11.5x 11.0x 10.2x 2.4x 0.8x 0.8x 0.8x 9.0x 8.2x 8.3x 7.1x 6.6x 6.6x 2.0x 1.8x 1.6x 2.4% -1% 7% 20% 20% 18% 42% -1% 0.88 US Electrical Equipment/Multi-Industry 17.7x 16.3x 13.8x 14.7x 12.9x 1.0x 1.9x 1.7x 1.5x 12.0x 11.4x 9.9x 9.3x 8.7x 7.7x 2.6x 2.6x 2.4x 1.5% -1% 4% 5% 16% 12% 41% -5% 1.34 US Engineering & Construction 16.4x 18.3x 12.0x 17.6x 12.4x 0.1x 0.6x 0.5x 0.4x 9.9x 9.1x 6.5x 8.2x 7.0x 5.3x 2.2x 1.9x 1.7x 0.4% 0% 4% 6% 24% 15% 65% -9% 1.49 US Environmental Services 24.1x 20.9x 21.1x 21.0x 18.2x 4.8x 2.7x 2.3x 2.2x 17.1x 14.9x 12.9x 9.9x 8.4x 7.6x 2.3x 2.3x 2.2x 2.1% 0% 5% 13% 18% 15% 34% -2% 0.75 US Fluid Management 22.3x 20.2x 17.2x 17.4x 15.4x 3.5x 2.5x 2.1x 1.9x 15.1x 14.4x 12.8x 0.0x 11.7x 9.9x 2.9x 3.8x 3.9x 1.4% -1% 6% 8% 18% 16% 46% -3% 1.23 US Industrial Distribution 22.4x 20.0x 17.2x 18.0x 15.7x 1.9x 2.1x 1.9x 1.7x 12.4x 10.6x 10.5x 11.2x 9.6x 8.2x 3.0x 3.1x 2.6x 0.9% -1% 6% 6% 24% 15% 42% -4% 1.26 US Machinery 15.8x 14.7x 12.1x 18.4x 13.1x 1.1x 1.3x 1.2x 1.0x 9.9x 9.5x 8.2x 7.8x 7.3x 6.2x 2.6x 2.4x 2.1x 1.3% -1% 7% 6% 20% 13% 59% -7% 1.63 US Transports 22.3x 19.2x 16.5x 20.8x 16.3x 1.6x 1.6x 2.0x 1.9x 13.2x 12.1x 10.1x 9.4x 9.0x 7.7x 3.2x 2.8x 2.7x 1.2% -1% 6% 9% 20% 17% 38% -5% 1.07 Average 19.2x 17.1x 14.9x 16.8x 13.8x 1.7x 1.6x 1.6x 1.5x 12.0x 11.4x 10.0x 8.0x 8.6x 7.7x 2.7x 2.7x 2.5x 1.6% -1% 6% 10% 21% 15% 46% -5% 1.19 S&P 500 -2% 3% 5% 11% 8% 30% -2% 1.00

EMEA P/E AVG P/E (5Y) PE/G EV/Sales EV/EBIT EV/EBITDA P/B Yield Performance Sector 12 13E 14E FY1 FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA European Aerospace & Defense 14.7x 10.6x 9.7x 12.0x 10.4x 1.5x 1.3x 1.2x 1.1x 10.6x 9.6x 8.9x 7.4x 7.3x 6.8x 3.5x 3.3x 2.8x 2.0% 0% 9% 17% 30% 24% 50% -4% 0.84 European Automotive 12.8x 5.2x 4.6x 11.5x 10.4x 0.1x 0.6x 0.6x 0.6x 7.6x 9.5x 7.7x 4.9x 5.2x 4.6x 1.5x 1.4x 1.3x 2.5% -2% 10% 12% 23% 15% 51% -5% 1.49 European Electrical/Electronics 16.2x 8.8x 7.8x 13.6x 12.1x 0.4x 1.3x 1.2x 1.1x 11.7x 11.2x 9.7x 9.0x 8.2x 7.3x 2.4x 2.2x 2.0x 2.7% 0% 1% 2% 19% 13% 49% -7% 1.11 European Mechanical 16.3x 9.7x 8.6x 14.1x 13.0x 0.7x 1.7x 1.7x 1.5x 11.6x 11.8x 10.3x 9.3x 8.8x 8.6x 3.3x 3.0x 2.9x 3.4% -2% 2% 2% 9% 5% 35% -6% 1.09 European Wind Energy 26.6x 5.5x 4.6x 18.5x 14.3x - 0.4x 0.4x 0.4x 12.6x 11.5x 12.3x 5.8x 5.5x 4.6x 0.9x 0.9x 0.8x 0.0% 8% 37% 70% 146% 121% 226% 0% 1.18 European Industrial Machinery 14.9x 14.1x 10.5x 12.6x 12.0x 0.2x 0.6x 0.6x 0.6x 9.5x 11.4x 9.6x 5.9x 7.4x 6.0x 1.6x 1.5x 0.3x 2.0% -2% 7% 3% 21% 15% 42% -7% 1.27 MEA Industrials 19.1x 11.0x 7.9x 9.7x 7.7x - 0.6x 0.5x 0.5x 11.8x - - 6.6x - - - - - 5.0% 0% 2% -3% -5% -13% 10% -26% 1.08 Swiss Mid-cap Engineering 18.1x 8.8x 7.4x 14.1x 13.6x -0.1x 1.4x 1.3x 1.2x 12.6x 10.9x 9.4x 9.2x 8.8x 7.4x 2.1x 1.9x 2.0x 2.5% -2% 4% 3% 18% 12% 36% -6% 1.56 UK Capital Goods 17.3x 9.9x 8.9x 13.6x 11.4x 0.3x 2.1x 1.9x 1.8x 12.9x 12.1x 11.2x 9.6x 9.1x 8.9x 3.1x 2.7x 2.7x 2.2% 0% 5% 5% 21% 13% 47% -10% 1.37 Average 17.3x 9.3x 7.8x 13.3x 11.7x 0.5x 1.1x 1.0x 1.0x 11.2x 11.0x 9.9x 7.5x 7.5x 6.8x 2.3x 2.1x 1.9x 2.5% 0% 9% 12% 31% 23% 61% -8% 1.22 DJSTOXX 600 2% -11% -15% -18% -6% 6% -18% 1.00

Asia P/E AVG P/E (5Y) PE/G EV/Sales EV/EBIT EV/EBITDA P/B Yield Performance Sector 12 13E 14E FY1 FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA China Automotive 12.8x 11.6x 8.3x 12.9x 11.2x -0.3x 0.8x 0.7x 0.4x 9.0x 8.5x 6.6x 7.9x 5.5x 4.5x 2.3x 1.9x 1.5x 1.2% -4% -2% -5% 1% -10% 41% -22% 1.36 China Industrial Machinery 16.5x 13.6x 10.5x 16.5x 12.9x 0.0x 1.4x 1.4x 1.6x 8.0x 10.5x 10.5x 7.0x 9.0x 7.6x 1.4x 1.3x 1.2x 2.4% -1% 2% -10% 1% -14% 18% -34% 1.38 China Infrastructure Construction 12.0x 11.2x 13.7x 18.9x 14.3x - 1.0x 0.9x 1.1x 12.7x 11.4x 10.5x 9.9x 8.4x 7.6x 2.2x 1.9x 1.7x 2.2% -3% 6% -1% 0% -9% 35% -16% 0.92 China Power Equipment 15.8x 17.6x 17.6x 18.4x 17.6x -1.2x 1.3x 1.1x 1.1x 7.8x 13.8x 11.8x 5.9x 10.4x 10.2x 1.3x 1.3x 1.2x 1.3% 2% 19% 13% 45% 32% 68% -12% 1.09 China Container Manufacturing 13.4x 11.4x 0.0x 24.0x 13.5x - 4.3x 0.4x 0.0x 11.1x 9.0x 7.1x 9.2x 6.6x 5.6x - - - 4.2% -1% 4% -6% 19% 5% 20% -14% 1.27 India Automotive 17.6x 17.7x 15.1x 17.8x 14.9x 1.0x 1.6x 1.4x 1.2x 12.4x 12.7x 11.2x 8.8x 8.7x 8.3x 3.1x 3.0x 2.5x 1.7% -2% 1% 5% -1% -5% 28% -14% 0.91 India Capital Goods 15.3x 15.6x 13.3x 20.1x 15.8x 0.4x 0.9x 0.9x 0.4x 9.2x 11.2x 11.3x 7.0x 9.5x 9.3x 2.1x 1.9x 2.4x 1.4% -6% 2% -3% -13% -17% 18% -28% 1.26 Japan Automotive 22.2x 19.3x 10.9x 21.5x 16.4x 0.2x 0.9x 0.8x 0.7x 8.2x 12.4x 8.7x 4.8x 8.1x 6.3x 2.2x 1.9x 1.6x 1.3% -7% 9% 29% 90% 56% 157% -10% 1.28 Japan Auto Related Consumables 23.9x 26.1x 24.2x 15.5x 15.2x 0.2x 3.0x 0.8x 0.7x 14.7x 14.9x 14.5x 8.3x 8.8x 7.0x 1.4x 1.3x 1.2x 0.9% -8% 16% 25% 74% 37% 105% -14% 1.55 Japan Conglomerates 17.7x 22.7x 15.5x 17.5x 14.1x 0.4x 3.4x 0.6x 0.6x 11.5x 13.7x 10.7x 8.4x 7.0x 6.3x 2.0x 1.9x 1.7x 1.2% -10% 7% 35% 74% 48% 100% -15% 1.42 Japan/Taiwan Factory Automation 24.1x 22.4x 19.5x 22.8x 21.5x 0.2x 1.7x 1.7x 1.7x 13.1x 15.1x 11.8x 10.0x 10.5x 8.9x 3.0x 2.8x 2.5x 1.5% -4% 2% 19% 36% 22% 67% -12% 1.06 Japan Infrastructure Machinery 25.2x 23.4x 18.1x 26.0x 15.7x 0.3x 1.6x 1.5x 1.5x 13.6x 15.1x 11.4x 9.6x 9.8x 8.6x 2.3x 2.1x 2.0x 1.2% -9% 9% 30% 67% 41% 114% -12% 1.26 Japan Machine Tools 20.2x 22.0x 18.4x 21.1x 20.0x - 3.8x 1.2x 1.2x 11.9x 12.8x 13.4x 11.7x 9.2x 8.6x 1.3x 1.2x 1.2x 1.4% -14% 3% 24% 89% 47% 123% -16% 1.44 Korea Engineering & Construction 13.9x 12.3x 9.0x 11.5x 10.2x 0.3x 0.8x 0.7x 0.7x 12.2x 10.7x 8.3x 9.5x 8.9x 7.0x 1.2x 1.1x 0.9x 1.2% 1% 8% -19% -14% -21% 14% -31% 1.18 Korea Industrials / Shipbuilding / Autos 14.9x 13.3x 11.2x 9.6x 9.1x 0.0x 0.8x 0.7x 0.7x 8.0x 7.4x 6.1x 6.4x 5.8x 4.8x 1.2x 1.0x 0.9x 1.0% 0% 6% -4% 1% -7% 15% -22% 1.27 Singapore /Taiwan Industrials 17.6x 20.3x 17.7x 14.9x 13.7x -1.1x 1.5x 1.8x 1.8x 12.1x 12.4x 12.7x 9.5x 9.3x 8.2x 2.3x 2.1x 1.9x 2.9% -1% -3% -5% 0% -2% 8% -13% 1.51 Average (Non Japan Asia) 15.0x 14.5x 11.6x 16.4x 13.3x -0.1x 1.4x 1.0x 0.9x 10.2x 10.8x 9.6x 8.1x 8.2x 7.3x 1.9x 1.7x 1.6x 2.0% -2% 4% -4% 4% -5% 27% -21% 1.21 Average (Japan) 22.2x 22.6x 17.8x 20.7x 17.1x 0.26x 2.4x 1.1x 1.0x 12.2x 14.0x 11.8x 8.8x 8.9x 7.6x 2.0x 1.8x 1.7x 1.3% -9% 8% 27% 72% 42% 111% -13% 1.34 Source: Factset, Credit Suisse estimates

i-Spy Global Industrials Weekly 43

- Spy

Americas Capital Goods Valuation Summary

GlobalIndustrials Weekly

Exhibit 15: Americas Valuation & Performance Canada Industrials Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Bombardier Inc O CAD 4.63 5 6,455 12.2x 11.6x 9.7x 11.2x 9.7x -1.4x 0.5x 0.5x 0.5x 10.6x 8.5x 7.4x 6.2x 6.0x - 4.3x 3.1x 2.2% 1.5% 17.5% 15.5% 37.8% 23.1% 54.8% -1.7% 1.57 CAE, Inc. O CAD 10.79 13 2,714 14.6x 14.5x 14.1x 14.3x 12.9x 2.2x 1.8x 1.8x 1.6x 10.8x 11.9x 10.2x 7.8x 8.1x 7.7x 2.7x 2.5x 2.2x 1.8% -1.5% -0.7% 6.2% 12.5% 7.1% 14.7% -4.2% 1.08 Finning International Inc. NA CAD 22.98 3,823 12.1x 11.0x 9.8x 15.4x 12.1x - 0.8x 0.8x 0.8x 11.9x 10.1x 8.6x 8.2x 7.2x 6.1x - - - 2.7% -1.4% 5.0% -10.7% 0.8% -6.5% 7.3% -15.7% 1.38 Ritchie Bros. Auctioneers N USD 20.50 23 2,187 27.0x 24.4x 20.6x 29.0x 24.0x 2.6x - 4.6x 4.1x 18.7x 16.4x 14.0x 12.1x 10.2x 3.3x 3.1x 2.9x 2.3% -0.1% 5.5% -7.4% -8.5% -1.9% 11.4% -10.5% 0.78 SNC Lavalin Group NA CAD 41.19 6,034 20.2x 19.2x 14.9x 19.5x 17.1x - 1.0x 1.0x 0.9x 15.4x 16.9x 14.7x 11.7x 12.1x 10.8x - - - 2.3% -2.7% -5.4% -12.7% 3.0% 2.2% 17.7% -17.0% 1.23 Toromont Industries, Ltd. NA CAD 23.23 1,721 14.9x 15.2x 13.5x 12.0x 10.2x - 1.3x 1.2x 1.2x 10.4x 10.6x 8.8x 7.9x 8.1x 6.9x - - - 2.3% -1.5% 6.3% -0.1% 18.2% 10.1% 20.9% -4.6% 0.79

Average 16.8x 16.0x 13.8x 16.9x 14.3x 1.1x 1.1x 1.7x 1.5x 13.0x 12.4x 10.6x 9.5x 9.0x 8.0x 3.0x 3.3x 2.7x 2.3% -0.9% 4.7% -1.5% 10.6% 5.7% 21.1% -8.9% 1.14

LatAm Industrials Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Embraer NA USD 36 6,588 19.0x 14.3x - 13.8x 11.0x - 1.0x 1.0x - 8.3x 11.1x - 5.7x 7.5x - - - - 2.2% -1.9% 10.7% 10.9% 37.1% 27.4% 57.5% -3.5% 0.79 WEG N BRL 28 30 8,327 26.3x 21.2x 17.6x 17.9x 15.1x 1.5x 2.9x 2.5x 2.2x - 16.3x 13.2x - 13.7x 11.4x 4.3x 3.9x 3.6x 2.7% -1.9% 8.7% 10.5% 9.3% 2.0% 53.3% -6.3% 0.86 Average 22.7x 17.8x 17.6x 15.9x 13.0x 1.5x 1.9x 1.7x 2.2x 8.3x 13.7x 13.2x 5.7x 10.6x 11.4x 4.3x 3.9x 3.6x 2.4% -1.9% 9.7% 10.7% 23.2% 14.7% 55% -4.9% 0.83

US Aerospace Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA BE Aerospace Inc. O USD 62.76 74 6,573 22.2x 17.9x 14.7x 15.2x 12.6x 0.9x 2.6x 2.3x 1.8x 14.9x 12.3x 9.4x 13.0x 10.9x 8.5x 3.0x 2.6x 2.4x 0.0% -0.3% 2.3% 20.1% 34.5% 27.0% 67.5% -3.0% 1.77 Boeing O USD 100.00 110 75,868 19.6x 15.6x 14.3x 16.1x 12.2x - 0.9x 0.9x 0.8x 12.0x 10.1x 8.8x 9.3x 8.0x 7.1x - - - 1.9% 1.1% 7.7% 32.2% 35.0% 32.7% 48.7% 0.0% 1.21 Precision Castparts O USD 210.73 238 30,862 24.9x 21.6x 17.5x 15.9x 13.7x 1.4x 4.2x 4.1x 3.2x 16.7x 15.9x 12.0x - - 12.0x 3.7x 3.1x 2.7x 0.1% -1.1% 12.4% 14.9% 16.1% 11.3% 38.4% -2.0% 1.14 Rockwell Collins, Inc. O USD 66.18 68 8,979 15.9x 14.1x 13.2x 13.2x 12.1x 2.1x 1.9x 1.9x 1.9x 9.5x 10.1x 9.4x 8.6x 9.5x 8.8x - - 4.3x 1.8% -0.4% 6.9% 13.1% 17.1% 13.8% 41.0% -0.9% 1.12 Spirit AeroSystems N USD 21.67 18 3,113 34.5x 9.7x 8.5x 13.8x 8.7x - 0.7x 0.7x 0.6x - 7.3x 6.7x 12.0x 5.6x 5.3x 1.5x 1.3x 1.1x 0.0% -1.2% 9.6% 30.5% 42.5% 27.7% 54.3% -16.2% 1.41 TransDigm O USD 147.00 7,703 22.0x 21.0x 18.9x 17.1x 15.0x 0.9x - - 4.9x 14.2x 13.7x 11.8x 13.0x 12.4x 11.5x - - 4.3x 0.0% -1.9% 1.2% 5.6% 10.2% 7.8% 22.5% -5.0% 0.67 Average 23.2x 16.6x 14.5x 15.2x 12.4x 1.3x 2.1x 2.0x 2.2x 13.5x 11.6x 9.7x 11.2x 9.3x 8.9x 2.7x 2.3x 2.9x 0.6% -0.6% 6.7% 19.4% 25.9% 20.0% 45.4% -4.5% 1.22

US Automotive Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA American Axle U USD 16.80 12 1,257 14.0x 9.7x 6.0x - 5.6x -1.4x 0.9x 0.8x 0.7x 16.9x 9.8x 7.3x 8.6x 6.1x 5.0x - - - 0.0% -0.1% 24.6% 35.6% 60.3% 50.0% 101.0% -0.1% 1.57 BorgWarner N USD 81.96 88 9,471 16.4x 15.2x 12.9x 44.6x 14.4x 1.6x 1.4x 1.3x 1.2x 11.7x 11.4x 10.0x 9.1x 8.6x 7.5x 3.2x 2.7x 2.4x 0.0% -4.0% 5.2% 11.8% 25.7% 14.4% 35.4% -4.0% 1.44 Delphi Automotive O USD 48.05 56 15,023 12.5x 11.1x 9.7x - 16.2x 0.5x 1.1x 0.9x 0.8x 11.1x 8.6x 7.0x 8.3x 6.5x 5.3x 1.1x 1.0x 1.4% -1.0% 7.5% 25.6% 90.0% -2.0% - Ford Motor Co. N USD 14.79 14 69,605 10.3x 10.5x 9.6x 7.8x 10.9x -0.7x 0.5x 0.4x 0.3x 11.9x 8.4x 6.6x 6.9x 4.9x 3.9x 3.6x 2.4x 1.9x 2.7% -1.9% 8.2% 19.9% 31.5% 14.2% 65.8% -1.9% 1.04 General Motors O USD 32.87 44 45,184 10.0x 11.3x 8.1x 7.0x 13.3x -0.7x 0.2x 0.2x 0.1x - 4.2x 2.8x - 2.1x 1.6x 1.3x 1.0x 1.0x 0.0% -1.6% 7.8% 22.5% 30.0% 14.0% 74.8% -2.5% - Harman International N USD 51.62 56 3,508 17.6x 17.1x 13.1x 18.3x 8.8x 0.9x 0.7x 0.8x 0.6x 10.3x 12.0x 7.5x 7.3x 8.0x 5.3x 2.4x 2.1x 1.8x 1.2% -0.8% 15.6% 22.2% 33.5% 15.6% 44.6% -3.3% 2.00 KAR Auction Servicers O USD 23.85 25 3,272 22.3x 20.0x 17.0x 14.7x 11.9x - 2.5x 2.3x 2.0x 18.6x 15.1x 11.9x 10.9x 9.4x 8.0x 2.3x 2.2x 2.0x 3.2% -1.2% 9.3% 13.1% 28.6% 17.8% 63.4% -1.2% 1.47 Lear Corp O USD 60.20 75 5,566 11.0x 10.6x 8.5x 10.4x 14.5x 2.2x 0.3x 0.3x 0.3x 6.5x 7.3x 6.5x 6.2x 7.0x 6.3x 1.7x 1.6x 1.5x 1.1% -1.4% 5.9% 13.1% 39.8% 28.5% 72.9% -1.4% 1.25 Magna International N USD 65.17 77 15,179 12.1x 10.9x 9.7x 8.6x 13.5x 0.8x 0.5x 0.4x 0.4x 9.3x 8.3x 6.9x 6.1x 5.2x 4.8x 1.6x 1.5x 1.3x 2.0% -0.1% 9.9% 26.7% 42.9% 30.3% 73.8% -1.2% 1.33 Superior Interiors U USD 17.73 16 484 23.9x 26.5x 21.4x 14.0x 8.1x -0.9x 0.3x 0.4x 0.3x 9.6x 12.8x 9.0x 5.0x 5.9x 4.6x 1.0x 1.0x 0.9x 14.4% -4.2% -1.7% -17.3% -4.0% -13.1% 12.2% -18.9% 1.05 Tenneco O USD 43.17 46 2,626 13.0x 12.2x 9.6x 11.5x 9.4x 0.8x 0.5x 0.5x 0.4x 8.4x 7.5x 5.7x 5.7x 5.2x 4.2x - - 3.2x 0.0% 1.3% 14.7% 21.8% 38.7% 23.0% 74.6% -0.4% 2.06 TRW Automotive Holdings O USD 61.41 73 7,378 10.0x 9.7x 8.1x 7.8x 10.4x -1.3x 0.5x 0.5x 0.4x 6.5x 6.7x 6.0x 4.8x 4.8x 4.3x 2.2x 2.1x 1.8x 0.0% -2.9% 4.6% 7.5% 23.3% 14.5% 83.9% -2.9% 1.80 Average 14.4x 13.7x 11.1x 14.5x 11.4x 0.2x 0.8x 0.7x 0.6x 11.0x 9.3x 7.3x 7.2x 6.1x 5.1x 2.0x 1.8x 1.8x 2.2% -1.5% 9.3% 16.1% 31.8% 19.6% 66.0% -3.3% 1.50

US Defense Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Alliant Techsystems Inc. N USD 77.74 75 2,502 9.8x 9.3x 10.4x 8.9x 8.8x -1.8x 0.7x 0.7x 0.6x 6.5x 6.7x 6.1x 5.2x 5.4x 4.6x 2.1x 1.7x 1.4x 1.3% -0.1% 6.5% 18.0% 28.5% 25.5% 76.7% -0.6% 0.82 CACI International, Inc. N USD 63.45 53 1,464 10.7x 10.0x 9.5x 12.3x 11.4x 0.6x 0.6x 0.5x 0.5x 7.0x 6.7x 7.0x 5.9x 5.6x 5.7x 1.5x 1.3x 1.2x 0.0% 0.3% 11.3% 26.2% 20.4% 15.3% 52.2% -1.6% 0.72 Esterline Technologies O USD 76.58 77 2,373 21.3x 13.4x 12.0x 12.4x 11.2x 1.4x 1.6x 1.5x 1.4x 12.9x 11.7x 10.4x 8.8x 8.2x 7.4x 1.5x 1.5x 1.5x 0.0% -2.4% 3.7% 12.5% 25.6% 20.4% 47.3% -3.2% 1.23 General Dynamics O USD 77.34 83 27,315 - 11.4x 10.7x 10.0x 9.4x - 0.8x 0.8x 0.8x - 7.1x 6.6x - 6.1x 5.7x 2.4x 2.2x 2.0x 2.9% -1.2% 5.5% 15.6% 17.7% 11.7% 24.8% -1.6% 1.17 L-3 Communications N USD 85.19 77 7,685 10.6x 11.1x 11.0x 9.5x 9.0x 3.0x 0.8x 0.9x 0.9x 7.7x 8.9x 9.8x 6.6x 7.4x 8.1x 0.8x 0.7x 0.6x 2.6% -0.4% 4.7% 12.3% 10.3% 11.2% 32.4% -2.5% 1.02 Lockheed Martin N USD 107.06 93 34,303 12.5x 12.0x 11.6x 10.9x 10.2x 1.9x 0.8x 0.8x 0.8x 8.3x 8.1x 7.9x 6.8x 6.7x 6.5x - - - 4.3% 0.6% 8.2% 22.6% 14.3% 16.0% 32.5% 0.0% 0.99 ManTech International Corp. U USD 27.49 18 1,020 10.7x 12.5x 13.5x 13.1x 12.2x -0.5x 0.5x 0.5x 0.5x 7.5x 8.2x 8.3x 5.7x 6.8x 6.8x 3.1% -1.3% 7.2% 9.7% 7.8% 6.0% 35.8% -2.2% 0.45 Northrop Grumman Corporation N USD 81.26 78 19,110 10.4x 11.3x 10.5x 9.2x 8.6x - 0.8x 0.8x 0.9x 6.1x 8.9x 9.9x 5.2x 5.8x 6.4x 2.2x 2.2x 2.1x 3.0% -1.1% 9.5% 24.9% 23.0% 20.2% 42.3% -1.1% 1.13 Raytheon Company O USD 66.73 63 21,661 11.8x 12.3x 12.1x 10.6x 9.8x - 1.0x 1.0x 1.0x 7.8x 8.3x 8.5x 6.7x 7.1x 7.3x 2.8x 2.6x 2.4x 3.3% -0.2% 10.8% 23.1% 18.4% 15.9% 35.4% -0.2% 0.77 SAIC U USD 15.23 11 5,210 - 9.2x 13.5x 12.9x 11.7x - 0.5x 0.5x 0.6x 17.6x 7.5x 8.8x 12.9x 6.5x 7.5x 2.3x 1.9x 1.7x 3.2% -1.6% 4.0% 34.5% 31.3% 34.5% 41.0% -1.7% 0.52 Average 12.2x 11.3x 11.5x 11.0x 10.2x 2.4x 0.8x 0.8x 0.8x 9.0x 8.2x 8.3x 7.1x 6.6x 6.6x 2.0x 1.8x 1.6x 2.4% -0.7% 7.1% 19.9% 19.7% 17.7% 42.0% -1.5% 0.88

28 May28 2013

Source: Company data, Credit Suisse estimates

Spy Exhibit 16: Americas Valuation & Performance (contd)

GlobalIndustrials Wee US Electrical Equipment/Multi-Industry Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA ADT O USD 42.33 55 9,261 24.3x 24.3x 20.0x 3.7x 3.6x 3.4x 15.9x 15.9x 14.5x 7.4x 7.1x 6.6x 1.9x 1.9x 1.7x 1.3% -2.2% -3.6% -9.1% -4.1% -8.9% 19.3% -14.9% Danaher Corporation N USD 62.10 59 43,017 19.2x 18.4x 16.7x 17.6x 15.7x 2.1x 2.6x 2.4x 2.1x 14.7x 13.6x 11.7x 11.7x 10.8x 9.5x 2.3x 2.0x 1.8x 0.2% -1.8% 3.6% 3.0% 17.6% 11.1% 25.4% -3.1% 0.93 Dover Corp N USD 79.19 77 13,550 17.5x 15.3x 13.9x 14.5x 12.9x - 1.9x 1.8x 1.7x 12.3x 11.5x 10.8x 9.6x 9.0x 8.5x 3.0x 2.8x 2.6x 1.8% 2.6% 14.6% 9.6% 25.1% 20.5% 55.5% -0.4% 1.32 Emerson O USD 56.94 64 40,932 21.3x 16.2x 14.6x 15.9x 14.4x - 1.8x 1.7x 1.6x 10.1x 9.9x 9.1x 8.5x 8.3x 7.8x 4.0x 3.8x 3.6x 2.9% -4.1% 4.6% 1.5% 13.9% 7.5% 29.3% -4.1% 1.19 Eaton Corporation O USD 68.23 72 32,248 17.3x 15.9x 13.1x 14.6x 11.7x - 2.6x 1.8x 1.6x - 17.2x 13.4x - 12.1x 9.9x 1.6x 2.0x 1.8x 2.5% 2.0% 16.3% 14.6% 31.1% 25.9% 84.2% -0.9% 1.39 Gardner Denver, Inc. U USD 75.42 76 3,711 12.8x 13.9x 12.6x 14.0x 12.6x - 1.6x 1.7x 1.5x 9.5x 10.3x 8.7x 8.2x 8.8x 7.5x 2.6x 2.5x 2.2x 0.3% 0.3% 0.7% 8.1% 8.7% 10.1% 56.6% -0.8% 1.34 General Electric O USD 23.53 25 244,028 15.5x 14.0x 13.0x 13.5x 12.4x 1.4x 3.4x 1.2x 1.2x - 8.8x 8.2x - 6.0x 5.7x 2.0x 2.0x 1.9x 3.2% 0.3% 5.9% 2.1% 11.3% 12.1% 29.6% -1.4% 1.56 Honeywell International Inc. N USD 79.29 73 62,384 17.7x 16.0x 14.3x 14.0x 12.5x - 1.7x 1.6x 1.4x 15.4x 10.2x 9.1x 12.7x 8.9x 8.0x 4.8x 4.0x 3.4x 2.1% -1.8% 7.3% 14.7% 29.5% 24.9% 49.8% -1.8% 1.36 Ingersoll Rand O USD 57.15 65 17,082 17.3x 15.6x 12.7x 14.2x 11.9x 1.2x 1.4x 1.3x 1.2x 12.9x 12.4x 9.7x 10.4x 9.9x 8.1x 2.5x 2.1x 1.8x 1.5% -1.5% 5.9% 11.4% 18.5% 19.2% 46.4% -1.7% 1.62

kly ITT NR USD 30.33 2,727 18.1x 16.0x - 5.5x 5.0x - 1.0x 0.9x - 6.8x 8.3x - 5.2x 6.1x - - - - 1.3% -1.4% 11.6% 20.2% 37.7% 29.3% 77.0% -1.4% 1.20

Kennametal Inc. O USD 42.40 43 3,338 11.2x 16.7x 13.1x 18.2x 12.5x -2.8x 1.4x 1.4x 1.3x 8.8x 11.4x 9.0x 7.1x 8.5x 7.1x 2.1x 1.9x 1.7x 1.5% -0.6% 10.2% 8.2% 11.5% 6.0% 37.3% -2.2% 1.46 Luxfer O USD 16.95 21 458 10.9x 11.0x 8.7x - 0.9x 1.0x 0.9x 7.0x 7.0x 5.9x 5.8x 5.8x 5.0x 0.9x 2.5x 2.0x -2.0% -1.5% 28.6% 54.1% 38.1% 63.5% -10.1% Regal Beloit O USD 64.86 76 2,918 13.7x 14.5x 12.6x - 1.0x 1.0x 0.9x 10.6x 10.0x 8.2x 7.5x 7.2x 6.0x 1.1x 1.4x 1.3x -4.5% -15.8% -15.4% -5.6% -8.0% 13.7% -23.4% Rockwell Automation N USD 87.41 94 12,208 16.5x 15.9x 14.5x 17.0x 15.1x 2.7x 1.9x 1.8x 1.7x 11.3x 10.6x 9.4x 10.0x 9.4x 8.3x - - 4.1x 2.4% -3.9% 3.0% -1.5% 10.6% 4.1% 42.1% -4.4% 1.48 Roper NR USD 123.06 12,185 24.8x 21.2x - 19.6x 17.5x - 4.6x 4.1x - 16.4x 12.9x - 13.6x 10.6x - - - - 0.5% -0.6% -0.2% 0.7% 10.5% 10.4% 31.3% -3.3% 0.83 Rexnord N USD 19.04 20 1,851 19.5x 16.8x 13.7x - - - 1.7x 1.7x 1.6x 13.7x 11.6x 9.8x 11.4x 9.8x 8.5x 5.0x 5.0x 3.9x 1.3% 5.7% 5.2% -5.6% -9.8% -10.6% 26.7% -13.4% 1.20 SPX Corp N USD 77.81 69 3,641 22.3x 18.7x 14.3x 15.3x 12.8x - 0.9x 0.9x 0.9x - 14.8x 12.1x - 11.0x 9.4x 1.7x 1.6x 1.5x 1.3% -2.2% 4.5% -2.6% 16.0% 10.9% 32.3% -5.1% 1.64 Textron O USD 27.51 30 7,644 14.0x 13.9x 12.4x 18.1x 12.3x 0.9x 0.8x 0.8x 0.8x 9.5x 11.1x 9.8x 7.0x 7.7x 7.0x 2.7x 2.2x 1.9x 0.3% -2.6% 5.6% -2.0% 15.4% 11.0% 22.3% -11.9% 2.24 Tyco International, Ltd N USD 34.27 31 15,901 25.0x 18.5x 16.0x 7.9x 12.7x - 1.6x 1.6x 1.4x 16.7x 14.3x 12.4x 11.7x 10.4x 9.2x 3.2x 3.2x 3.0x 1.9% 0.0% 9.1% 9.6% 21.1% 17.2% 38.0% 0.0% 1.08 United Technologies Corp O USD 95.04 98 87,370 17.8x 15.5x 13.4x - 1.8x 1.4x 1.4x 13.0x 9.9x 9.0x 10.9x 8.8x 8.1x 3.3x 3.2x 2.9x 2.3% -2.4% 4.3% 6.5% 19.1% 15.9% 34.1% -2.6% 1.04 Valmont Industries U USD 152.48 147 4,080 17.4x 14.0x 13.6x 16.3x 14.4x 0.5x 1.4x 1.2x 1.1x 10.9x 8.5x 7.7x 9.2x 7.4x 6.7x 2.9x 2.4x 2.1x 0.7% -3.1% 6.4% -1.1% 9.6% 11.7% 40.9% -7.3% 1.40 Xylem NR USD 27.85 5,160 15.7x 15.3x - 14.5x - 1.8x 1.5x 1.5x ------2.5x - 1.7% -3.7% 0.5% 3.1% 7.4% 2.8% - Average 17.7x 16.3x 13.8x 14.7x 12.9x 1.0x 1.9x 1.7x 1.5x 12.0x 11.4x 9.9x 9.3x 8.7x 7.7x 2.6x 2.6x 2.4x 1.5% -1.3% 4.5% 4.8% 15.9% 11.9% 40.7% -5.4% 1.34

US Engineering & Construction Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Chicago Bridge & Iron N USD 62.78 60 6,720 20.4x 15.7x 12.4x 12.0x 10.9x - 1.3x 0.7x 0.6x 15.1x 10.4x 7.9x 13.2x 8.6x 6.8x 4.4x 3.7x 2.9x 0.3% 1.7% 17.8% 20.3% 57.7% 35.4% 87.6% -1.4% 2.21 EnergySolutions NA USD 4.14 375 - - - 15.6x 12.7x - 0.6x 0.6x ------0.0% 0.0% 0.5% 10.4% 29.0% 32.7% 174.2% -0.2% 0.97 Fluor O USD 63.68 80 10,372 17.0x 15.2x 12.5x 16.6x 14.5x 1.5x 0.3x 0.3x 0.2x 8.6x 7.3x 5.7x 7.1x 6.1x 4.9x 3.2x 2.6x 2.2x 1.0% -1.4% 12.9% 3.8% 19.3% 8.4% 41.1% -4.0% 1.32 FosterWheeler O USD 22.74 29 2,277 14.6x 17.1x 12.1x 12.8x 11.0x - 0.5x 0.4x 0.3x 7.6x 8.4x 5.7x 6.6x 6.9x 4.7x 3.2x 2.6x 2.2x 0.0% 5.3% 9.3% -3.7% -0.5% -6.5% 45.8% -15.8% 1.77 Jacobs Engineering O USD 54.99 58 7,193 18.7x 16.7x 14.7x 15.3x 13.8x 1.5x 0.6x 0.5x 0.4x 11.3x 9.0x 7.2x 9.6x 7.9x 6.4x 1.9x 1.7x 1.5x 0.0% 1.7% 6.5% 15.3% 35.4% 29.2% 59.9% -2.2% 1.36 KBR Inc. O USD 35.18 40 5,200 17.4x 13.3x 11.2x 12.2x 11.6x -2.0x 0.5x 0.5x 0.4x 9.4x 6.6x 4.8x 9.3x 6.5x 4.8x 2.1x 1.8x 1.6x 0.9% 4.0% 18.2% 17.7% 29.3% 17.6% 53.6% -1.2% 1.44 McDermott International O USD 8.92 13 2,109 10.3x 21.1x 9.4x 10.5x 9.0x -0.7x 0.4x 0.6x 0.5x 4.6x 9.7x 5.0x 3.6x 6.9x 4.1x 1.1x 1.0x 0.9x 0.0% 0.7% -14.1% -28.8% -15.5% -19.1% 5.1% -33.8% 1.63 Quanta Services O USD 28.86 33 6,044 21.2x 19.9x 16.5x 25.6x 18.2x 0.3x 1.0x 0.8x 0.7x 12.1x 10.6x 8.4x 9.6x 8.1x 6.6x 1.6x 1.5x 1.4x 0.0% -4.4% 4.7% 3.5% 15.0% 5.8% 35.6% -4.7% 1.15 URS Corporation N USD 48.41 3,674 11.6x 11.2x 10.3x 12.2x 11.1x - 0.5x 0.5x 0.4x 7.1x 7.6x 6.7x 5.3x 5.7x 5.5x 1.0x 0.9x 0.9x 1.7% 0.9% 11.4% 16.5% 32.6% 23.3% 48.5% -1.7% 1.33 Willbros Group Inc. U USD 6.78 6 336 - 34.4x 9.1x 18.2x 11.9x - 0.3x 0.3x 0.2x - 12.3x 6.8x 9.7x 5.8x 4.0x 1.6x 1.6x 1.3x 0.0% -3.0% -27.2% 0.4% 36.1% 26.5% 64.6% -35.0% 1.85 Average 16.4x 18.3x 12.0x 17.6x 12.4x 0.1x 0.6x 0.5x 0.4x 9.9x 9.1x 6.5x 8.2x 7.0x 5.3x 2.2x 1.9x 1.7x 0.4% 0.5% 4.0% 5.5% 23.8% 15.3% 64.7% -9.1% 1.49

US Environmental Services Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Clean Harbors O USD 58.69 62 3,553 31.4x 22.8x 17.4x 24.9x 21.3x - 2.2x 1.3x 1.1x - 14.1x 10.9x 12.4x 7.5x 6.5x 2.2x 2.3x 2.0x 0.0% 0.9% 3.0% 14.7% 1.4% 6.7% 24.4% -8.1% 0.64 Covanta Holding N USD 20.69 20 2,707 - - 37.6x 27.6x 23.6x - 2.7x 2.7x 2.6x 20.0x 17.7x 15.7x 9.1x 8.8x 8.2x - 2.6x 2.6x 3.2% 2.8% 6.0% 7.5% 11.5% 12.3% 34.2% 0.0% 0.74 Progressive Waste N USD 23.10 23 2,660 23.7x 21.7x 19.0x 20.6x 17.7x - 2.3x 2.0x 1.8x 17.7x 15.7x 13.9x 8.3x 7.4x 6.7x 2.1x 2.0x 1.9x 2.4% -0.3% 6.3% 12.5% 18.6% 6.9% 30.7% -2.4% 1.05 Republic Services N USD 34.62 38 12,529 19.2x 18.1x 15.9x 16.1x 14.3x - 2.4x 2.3x 2.2x 14.3x 13.1x 11.4x 8.8x 8.4x 7.5x 1.7x 1.6x 1.5x 2.7% -0.8% 0.9% 12.0% 22.5% 18.0% 36.4% -1.3% 0.82 Waste Connections O USD 40.09 4,948 26.0x 22.5x 19.6x 21.1x 18.2x 2.3x 4.3x 3.7x 3.2x 19.0x 15.0x 13.3x 12.1x 9.6x 8.8x 2.6x 2.4x 2.2x 1.0% 0.0% 7.5% 17.7% 22.9% 18.6% 38.7% -1.5% 0.63 Waste Management N USD 42.38 42 19,793 20.4x 19.6x 17.0x 15.7x 14.2x - 2.2x 2.1x 2.0x 14.6x 13.9x 12.2x 8.9x 8.6x 7.7x 3.1x 2.9x 2.8x 3.5% 0.0% 5.4% 15.8% 30.9% 25.6% 36.9% -0.9% 0.62 Average 24.1x 20.9x 21.1x 21.0x 18.2x 4.8x 2.7x 2.3x 2.2x 17.1x 14.9x 12.9x 9.9x 8.4x 7.6x 2.3x 2.3x 2.2x 2.1% 0.4% 4.9% 13.4% 18.0% 14.7% 33.5% -2.4% 0.75

US Fluid Management Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Donaldson Company, Inc. O USD 37.54 40 5,503 21.7x 23.3x 20.8x 20.3x 18.2x -0.8x 2.2x 2.2x 2.1x 15.4x 15.8x 14.0x 13.1x 13.3x 11.9x - 4.9x 4.1x 1.4% -1.7% 4.9% 5.9% 12.5% 14.3% 19.6% -4.4% 1.06 Flowserve Corp. O USD 166.84 180 7,952 19.9x 16.2x 13.8x 13.8x 12.2x 1.2x 1.8x 1.6x 1.5x 13.2x 11.4x 11.3x 9.8x 8.2x 4.6x 4.2x 3.3x 1.0% -1.8% 5.8% 7.5% 19.8% 13.7% 66.6% -2.9% 1.77 Pall Corporation O USD 70.98 78 7,900 23.9x 23.3x 19.5x 18.1x 15.8x - 2.9x 2.8x 2.6x 16.8x 15.9x 13.8x 13.6x 12.9x 11.3x - 4.4x 4.2x 1.4% -0.5% 8.1% 6.6% 18.0% 17.8% 41.3% -2.1% 1.07 Pentair, Inc. N USD 57.47 54 11,754 23.5x 17.9x 14.6x 1.5x 3.2x 1.8x 1.5x - 14.5x 10.7x - 10.9x 8.2x 1.1x 1.8x 1.6% -0.6% 6.8% 13.3% 20.8% 16.9% 54.9% -1.1% 1.03 Average 22.3x 20.2x 17.2x 17.4x 15.4x 3.5x 2.5x 2.1x 1.9x 15.1x 14.4x 12.8x 11.7x 9.9x 2.9x 3.8x 3.9x 1.4% -1.2% 6.4% 8.3% 17.8% 15.7% 45.6% -2.6% 1.23

28 May28 2013

Source: Company data, Credit Suisse estimates

Spy Exhibit 17: Americas Valuation & Performance (contd)

GlobalIndustrials Weekly US Industrial Distribution Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Anixter International U USD 75.72 70 2,461 14.1x 12.3x 10.8x 12.2x 10.4x - 0.5x 0.5x 0.4x 9.4x 8.5x 6.9x 8.6x 7.8x 6.4x 2.6x 2.1x 1.7x 0.0% 1.1% 7.3% 10.4% 26.2% 18.3% 52.2% -0.9% 1.51 Fastenal Co N USD 51.91 54 15,400 36.7x 32.8x 27.7x 28.6x 24.4x 2.5x 4.9x 4.5x 3.9x - - 16.7x ------1.5% 1.6% 4.9% 2.0% 26.5% 11.2% 35.3% -2.4% 0.93 MSC Industrial Direct Co. N USD 82.61 90 5,217 20.1x 20.4x 17.9x 19.2x 16.8x 2.4x 2.1x 2.0x 1.9x 12.2x 11.9x 10.2x 11.3x 10.7x 9.3x 4.3x 3.7x 3.2x 1.5% -1.5% 5.5% -1.9% 14.4% 9.6% 33.5% -5.9% 1.07 Wesco International O USD 73.97 3,263 16.5x 13.1x 10.6x 12.5x 10.8x 0.8x 0.7x 0.6x 0.5x 13.2x 9.3x 7.7x 12.0x 8.3x 6.9x 2.1x 1.7x 1.5x 0.0% -4.7% 6.0% 2.4% 16.6% 9.7% 41.4% -5.0% 1.89 WW Grainger Inc. O USD 257.78 280 17,927 24.7x 21.7x 18.9x 17.7x 15.8x 1.7x 2.0x 1.9x 1.6x 14.6x 12.8x 11.1x 13.0x 11.4x 10.0x - 5.0x 4.1x 1.4% -2.1% 5.1% 15.5% 34.5% 27.4% 45.6% -3.6% 0.91 Average 22.4x 20.0x 17.2x 18.0x 15.7x 1.9x 2.1x 1.9x 1.7x 12.4x 10.6x 10.5x 11.2x 9.6x 8.2x 3.0x 3.1x 2.6x 0.9% -1.1% 5.7% 5.7% 23.6% 15.2% 41.6% -3.5% 1.26

US Machinery Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA

AGCO Corp N USD 53.52 56 5,208 10.1x 9.6x 9.2x 13.5x 11.3x 0.9x 0.6x 0.5x 0.5x 8.0x 6.5x 6.0x 6.4x 5.4x 5.0x 1.5x 1.3x 1.1x 0.8% -2.7% 5.6% 6.7% 16.0% 9.0% 37.6% -5.4% 2.00 Babcock & Wilcox N USD 29.70 29 3,332 15.5x 12.9x 12.6x - - 0.2x 0.9x 0.8x 0.7x 8.5x 7.6x 6.8x 7.1x 6.4x 5.7x 3.5x 2.9x 2.8x 1.1% 0.2% 12.2% 15.4% 20.0% 13.4% 27.9% -1.1% 0.98 Caterpillar Inc. O USD 86.21 103 56,252 10.2x 12.8x 10.3x 17.0x - -2.3x 1.4x 1.5x 1.3x 11.2x 14.9x 11.2x 8.0x 9.2x 7.3x 3.3x 2.5x 1.9x 2.4% -1.7% 1.8% -4.2% 1.5% -3.8% 8.2% -13.3% 1.76 Cummins Inc. O USD 116.31 134 22,068 13.6x 14.6x 11.0x 16.1x 13.1x -2.2x 1.2x 1.2x 1.0x 9.0x 9.1x 7.2x 7.8x 7.8x 6.3x 3.2x 2.7x 2.2x 1.7% -0.1% 4.6% 2.6% 16.2% 7.3% 39.2% -3.4% 1.75 Deere & Co. O USD 86.29 102 33,615 11.3x 10.3x 9.7x 13.2x 11.8x 0.9x 1.1x 1.0x 0.9x 8.1x 7.5x 6.9x 6.5x 5.9x 5.5x - 3.6x 2.8x 2.4% -0.8% 0.9% -0.2% 2.4% -0.2% 22.2% -9.2% 1.64 Douglas Dynamics Inc. N USD 14.42 14 320 - 29.9x 17.2x - - - 2.9x 2.3x 2.0x - 16.0x 15.6x - 12.0x 9.4x 2.2x 5.8% 1.9% 4.8% 1.8% 1.1% 0.2% 13.6% -7.9% 0.73 Illinois Tool Works, Inc. N USD 70.23 62 31,706 21.7x 16.5x 15.3x 16.1x 13.7x - 2.0x 2.0x 1.8x 12.1x 11.6x 10.3x 7.8x 9.3x 8.4x 3.1x 2.9x 2.6x 2.2% -0.8% 9.1% 16.9% 14.3% 15.5% 40.3% -1.3% 1.09 Joy global NA USD 55.42 5,886 7.7x 9.0x - 12.8x 12.1x - 1.2x 1.4x - 6.5x 6.7x - 5.7x 6.0x - - - - 1.3% -2.3% -2.1% -7.6% -1.6% -13.1% 13.6% -19.7% 1.93 Manitowoc NA USD 19.63 2,616 25.2x 16.9x - 29.7x 14.3x 1.2x 1.1x 1.0x - 13.0x 10.9x - 9.5x 8.3x - - - - 1.5% -0.6% 5.2% 8.2% 33.5% 25.2% 98.3% -7.6% 1.46 MasTec, Inc. NA USD 31.59 2,427 21.1x 17.5x - 13.8x 11.6x - - - - - 8.9x - - 6.1x - - - - 0.0% -4.4% 11.5% 5.4% 39.0% 26.7% 126.8% -5.6% 1.25 Oshkosh Corporation N USD 38.02 41 3,345 16.5x 12.3x 11.4x 10.1x 9.5x - 0.5x 0.4x 0.4x 9.7x 7.4x 6.1x 7.3x 5.8x 4.5x 1.9x 1.6x 1.4x 0.4% -2.4% -4.7% -1.7% 21.0% 28.2% 103.3% -10.5% 2.56 Paccar Inc N USD 53.35 47 18,871 17.1x 16.8x 14.4x 38.0x 17.4x - 1.0x 1.0x 0.9x 12.9x 12.9x 10.6x 10.4x 10.3x 7.1x 3.2x 2.8x 2.5x 0.0% -2.2% 7.7% 14.5% 20.9% 18.0% 48.6% -2.3% 2.19 Parker Hannifin Corporation O USD 98.29 104 14,668 13.2x 15.2x 13.4x 14.9x 12.5x - 1.2x 1.2x 1.1x 8.6x 9.3x 8.6x 7.3x 7.8x 7.2x 3.1x 2.7x 2.3x 1.5% -1.7% 10.8% 7.2% 18.9% 15.6% 36.8% -2.6% 1.32 Rush Enterprises, Inc. O USD 26.67 28 764 16.9x 16.0x 12.1x 22.9x 12.4x 2.0x 0.3x 0.2x 0.2x 8.5x 6.5x 4.2x 6.9x 5.2x 3.5x 1.7x 1.6x 1.4x 0.0% -1.6% 18.0% 15.0% 39.9% 29.0% 88.9% -3.7% 1.45 Terex Corporation O USD 33.41 46 3,715 21.2x 12.4x 8.7x 15.6x 15.0x 0.2x 0.7x 0.6x 0.5x 11.0x 7.2x 5.0x 8.3x 5.8x 4.2x 1.8x 1.7x 1.4x 1.8% 1.6% 15.5% 3.8% 40.2% 18.9% 136.8% -8.9% 1.29 United Rentals NA USD 56.28 5,261 15.0x 11.4x - 28.0x 15.8x - 3.0x 2.5x - - 6.9x - - 3.5x - - - - 0.0% -4.1% 7.5% 10.1% 37.3% 23.6% 106.7% -5.4% 2.09 Wabco Holdings NA USD 74.89 4,676 16.8x 15.6x - 13.8x 12.7x - 1.8x 1.7x - 11.8x 12.2x - 9.6x 9.7x - - - - 0.0% -3.6% 4.0% 12.6% 22.4% 14.9% 55.7% -3.6% 2.17 Average 15.8x 14.7x 12.1x 18.4x 13.1x 1.1x 1.3x 1.2x 1.0x 9.9x 9.5x 8.2x 7.8x 7.3x 6.2x 2.6x 2.4x 2.1x 1.3% -1.5% 6.6% 6.3% 20.2% 13.4% 59.1% -6.6% 1.63

US Transports Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Canadian National N USD 101.26 96 42,910 18.7x 17.2x 15.8x 14.9x 13.1x 1.6x - 4.8x 4.5x 13.7x 13.1x 11.9x 11.0x 10.5x 9.5x 4.2x 3.7x 3.2x 1.7% -1.4% 5.6% 3.4% 13.4% 11.3% 27.4% -1.7% 1.01 Canadian Pacific Railways N USD 133.84 139 23,390 32.2x 22.1x 18.3x 16.6x 13.5x 0.9x - 4.6x 4.2x - 16.0x 13.2x - 12.1x 10.2x 4.7x 4.0x 3.4x 1.0% -3.3% 8.3% 13.7% 43.9% 31.7% 92.1% -3.3% 1.33 CH Robinson N USD 58.70 62 9,425 21.3x 20.7x 18.0x 24.9x 21.9x - 0.8x 0.7x 0.6x 13.6x 12.2x 10.3x 12.9x 11.3x 9.5x - - 4.8x 2.4% 0.7% 0.4% 4.9% -4.9% -7.1% 12.4% -13.6% 0.77 Con-Way O USD 38.12 40 2,148 20.9x 18.5x 13.9x 29.5x 14.3x 1.4x 0.4x 0.4x 0.4x 10.8x 10.2x 7.9x 5.6x 5.2x 4.5x 2.6x 2.3x 2.0x 1.1% 0.7% 13.7% 13.5% 32.4% 37.0% 44.0% -3.6% 1.65 CSX Corporation N USD 25.50 26 26,049 14.3x 14.3x 12.7x 13.6x 11.8x - 2.9x 2.9x 2.7x 10.0x 10.0x 9.1x 7.6x 7.6x 6.9x 2.9x 2.6x 2.3x 2.4% -1.6% 4.6% 15.2% 28.9% 29.2% 34.1% -2.4% 1.26 Echo Global Logistics O USD 18.24 22 425 29.1x 24.0x 18.9x 27.1x 18.5x 1.5x 0.5x 0.4x 0.3x 16.7x 13.0x 9.8x 11.9x 9.6x 7.6x 3.0x 2.6x 2.3x 0.0% -2.1% 1.7% -1.0% 3.3% 1.5% 15.8% -17.5% 0.82 Expeditors International O USD 39.33 47 8,126 24.8x 21.8x 18.7x 26.2x 22.9x - 1.1x 1.1x 1.0x 12.9x 11.0x 9.0x 12.0x 10.2x 8.4x 4.1x 3.6x 3.1x 1.5% 2.1% 11.0% 6.1% 6.2% -0.6% 14.5% -9.7% 0.89 FedEx Corporation N USD 97.82 108 30,996 14.9x 16.2x 13.1x 16.7x 13.7x 1.4x 0.7x 0.7x 0.6x 9.4x 9.8x 7.7x 5.6x 5.5x 4.7x 2.1x 1.9x 1.6x 0.6% -2.2% 3.9% -5.2% 9.3% 6.7% 16.0% -10.3% 1.14 Genesee & Wyoming, Inc. O USD 87.96 100 3,624 30.5x 18.8x 16.9x 21.0x 17.1x 1.0x - 3.2x 2.8x - 12.3x 9.8x - 9.2x 7.6x 2.6x 2.3x 2.0x 0.0% -5.0% 4.3% 1.5% 19.5% 15.6% 82.9% -6.6% 1.27 JB Hunt Transport Services N USD 74.78 74 8,793 28.9x 25.2x 21.8x 22.5x 18.6x 1.6x 1.9x 1.6x 1.4x 17.9x 15.0x 12.5x 12.5x 10.6x 9.0x - - - 0.8% -0.1% 4.5% 12.7% 25.1% 25.2% 46.5% -1.5% 1.06 Kansas City Southern O USD 111.37 127 12,271 34.1x 25.9x 20.6x 24.2x 17.8x 1.5x - - 4.8x 19.3x 17.5x 13.8x - 13.6x 10.9x 3.6x 3.2x 2.9x 0.8% -4.9% 4.4% 13.8% 40.1% 33.4% 78.1% -4.9% 1.29 Knight Transportation U USD 17.17 16 1,372 20.1x 18.5x 16.7x 23.3x 19.4x 1.7x 1.6x 1.4x 1.2x 13.5x 11.3x 9.8x 7.5x 6.6x 5.7x 2.8x 2.5x 2.3x 1.4% -0.8% 10.4% 11.2% 12.7% 17.4% 22.6% -1.7% 0.81 Landstar System O USD 54.64 62 2,544 19.7x 19.0x 16.9x 20.9x 18.1x 2.0x 0.9x 0.9x 0.8x 12.8x 11.7x 9.8x 11.3x 10.3x 8.7x - - 3.9x 0.5% -2.1% 1.4% 1.6% 8.3% 4.2% 16.4% -8.5% 1.05 Norfolk Southern O USD 77.64 89 24,463 14.5x 14.1x 12.6x 13.9x 12.1x - 2.9x 2.9x 2.7x 10.4x 10.3x 9.2x 8.0x 7.9x 7.2x 2.6x 2.3x 2.0x 2.6% -3.2% 2.8% 8.8% 30.0% 25.5% 37.8% -3.4% 1.13 Old Dominion Freight Line O USD 42.79 45 3,687 21.8x 18.7x 16.8x 20.3x 15.7x 1.2x 1.9x 1.7x 1.5x 13.7x 11.7x 10.0x 9.9x 8.5x 7.3x 3.6x 3.0x 2.6x 0.0% 3.8% 12.1% 22.3% 27.3% 24.8% 63.8% -0.2% 1.13 Union Pacific O USD 156.81 175 73,196 18.9x 16.4x 14.1x 15.1x 12.9x 1.0x 3.9x 3.6x 3.3x 12.0x 10.6x 9.3x 9.5x 8.6x 7.6x 3.8x 3.4x 2.8x 1.8% -1.9% 6.3% 17.1% 27.7% 24.7% 47.3% -1.9% 1.12 United Parcel Service O USD 86.83 96 81,997 19.2x 17.7x 16.1x 18.4x 15.8x 2.6x 1.6x 1.6x 1.5x - 12.0x 11.0x - 9.5x 8.7x - - - 2.9% -2.1% 1.3% 6.0% 19.4% 17.8% 24.0% -2.5% 0.85 Werner Enterprises N USD 24.76 25 1,814 17.7x 17.3x 14.9x 19.9x 16.5x - 0.9x 0.8x 0.7x 11.0x 10.0x 7.8x 5.6x 5.0x 4.1x 2.5x 2.3x 2.0x 0.8% -0.1% 8.3% 10.0% 13.9% 14.3% 19.0% -1.5% 0.79 Average 22.3x 19.2x 16.5x 20.8x 16.3x 1.6x 1.6x 2.0x 1.9x 13.2x 12.1x 10.1x 9.4x 9.0x 7.7x 3.2x 2.8x 2.7x 1.2% -1.3% 5.8% 8.6% 19.8% 17.4% 37.8% -5.0% 1.07

Source: Company data, Credit Suisse estimates May28 2013

- Spy

EMEA Capital Goods Valuation Summary

GlobalIndustrials Weekly

Exhibit 18: EMEA Valuation & Performance European Aerospace & Defense Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA BAE Systems NR GBp 414.10 20,253 10.3x 9.8x 10.1x 8.4x 8.1x - 0.7x 0.7x 0.7x 6.2x 8.4x 8.5x 5.2x 7.1x 6.9x - - - 4.7% 1.0% 9.3% 20.1% 29.6% 22.9% 52.9% -3.0% 0.67 Cobham U GBp 282.30 170 4,598 12.8x 13.7x 12.9x 11.4x 10.6x - 2.0x 2.0x 1.9x 15.7x 15.1x 13.5x 9.1x 9.3x 8.6x 3.1% 0.4% 12.6% 22.9% 38.4% 27.9% 48.5% -1.7% 0.82 EADS O EUR 42.60 45,788 17.5x 15.6x 11.6x 17.7x 12.7x - 0.7x 0.7x 0.6x 13.5x 7.8x 6.2x 7.0x 6.2x 5.2x - 4.6x 3.6x 1.4% -1.3% 6.5% 22.2% 71.7% 44.4% 74.7% -1.6% 0.82 Finmeccanica NR EUR 4.44 3,319 - 9.2x 6.0x 7.4x 7.0x - 0.3x 0.3x 0.3x - 7.4x 5.8x 4.3x 4.2x 3.6x - - - 0.0% -3.7% 18.5% 19.2% 15.0% 2.0% 66.5% -13.8% 1.15 Meggitt N GBp 523.50 400 6,220 15.1x 9.0x 8.1x 10.6x 9.7x 1.9x 3.0x 2.8x 2.5x 12.2x 11.0x 9.9x 10.1x 9.0x 8.1x 2.1x 1.9x 1.7x 2.3% 0.6% 10.7% 16.4% 37.0% 36.9% 43.7% -1.7% 1.32 MTU Aero Engines O EUR 77.78 77 5,230 16.7x 6.9x 6.1x 11.8x 10.9x 1.1x 1.2x 1.1x 1.0x 11.0x 9.4x 8.2x 7.9x 6.9x 6.1x 4.7x 3.9x 3.3x 1.7% -1.2% 8.2% 10.3% 16.8% 13.1% 39.5% -1.9% 0.80 QinetiQ NR GBp 190.30 1,898 10.5x 10.2x 13.0x 10.3x 9.8x - 0.8x 0.9x 0.9x 7.3x 8.6x 11.5x 5.8x 7.5x 9.3x - - - 2.0% -3.5% -1.8% -6.9% -1.4% 3.7% 30.9% -9.9% 0.67

Rolls-Royce N GBp 1190.00 900 33,788 20.4x 9.4x 8.6x 13.0x 12.0x - 1.8x 1.4x 1.3x 14.8x 12.0x 11.0x 11.1x 9.4x 8.6x 3.6x 3.1x 2.7x 0.0% 1.0% 5.1% 17.7% 37.0% 37.7% 52.4% -2.9% - Safran O EUR 40.43 42 21,800 16.8x 7.5x 6.4x 14.8x 12.0x - 1.3x 1.2x 1.1x 12.1x 9.6x 8.0x 9.2x 7.5x 6.4x 3.5x 3.0x 2.8x 2.4% 0.2% 7.2% 17.7% 30.6% 24.0% 52.3% -1.2% 0.90 Thales NR EUR 37.35 9,772 12.3x 11.7x 10.7x 12.8x 9.3x - 0.4x 0.4x 0.4x 4.0x 6.4x 5.5x 2.9x 4.5x 3.9x - - - 2.3% 1.7% 16.5% 40.5% 37.0% 42.3% 60.6% -1.0% 0.70 Ultra Electronics NA GBp 1811.00 1,901 14.4x 14.1x 13.6x 14.1x 13.0x - 1.7x 1.7x 1.6x 9.5x 10.3x 9.7x 8.5x 9.0x 8.5x - - - 2.2% 2.0% 10.2% 8.1% 15.0% 8.8% 27.2% -1.7% 0.51 Average 14.7x 10.6x 9.7x 12.0x 10.4x 1.5x 1.3x 1.2x 1.1x 10.6x 9.6x 8.9x 7.4x 7.3x 6.8x 3.5x 3.3x 2.8x 2.0% -0.2% 9.4% 17.1% 29.7% 24.0% 49.9% -3.7% 0.84

European Automotive Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Autoliv Inc U USD 78.13 55 7,472 12.7x 6.2x 5.7x 8.3x 11.5x - 0.9x 0.8x 0.8x 8.7x 8.1x 7.5x 6.6x 6.2x 5.7x 1.9x 1.7x 1.5x 2.6% -2.4% 4.0% 21.7% 31.1% 15.9% 50.6% -2.4% 1.85 BMW O EUR 71.98 80 59,636 9.3x 5.6x 5.4x - 11.1x 2.0x 0.9x 0.8x 0.8x 8.1x 8.1x 7.8x 5.6x 5.6x 5.4x 1.6x 1.4x 1.3x 3.5% -2.7% 4.4% 3.2% 7.1% -1.5% 33.7% -5.0% 1.19 Continental N EUR 99.79 90 25,808 9.5x 4.9x 4.4x 9.1x 8.9x 0.7x 0.8x 0.8x 0.7x 8.4x 8.0x 6.9x 5.3x 4.9x 4.4x 2.3x 2.0x 1.7x 2.3% -0.8% 12.2% 14.7% 21.0% 13.9% 64.0% -2.6% 1.38 Daimler N EUR 48.36 35 66,773 8.5x 4.1x 3.6x 15.2x 10.9x -0.4x 0.4x 0.4x 0.4x 4.9x 6.7x 5.4x 3.3x 4.1x 3.6x 1.2x 1.2x 1.1x 4.7% -4.0% 16.3% 9.5% 30.1% 17.0% 44.8% -4.0% 1.56 Fiat U EUR 5.66 4 9,577 18.9x 3.2x 3.0x 11.1x 6.4x -0.8x 0.3x 0.3x 0.3x 6.4x 7.2x 6.2x 2.8x 3.2x 3.0x 0.8x 0.7x 0.6x 0.0% 5.4% 20.6% 41.5% 65.2% 49.3% 70.8% 0.0% 1.38 MAN NA EUR 85.84 16,321 - 10.2x 9.6x 17.0x 13.2x - 1.0x 0.9x 0.9x - 14.4x 13.5x - 10.2x 9.6x 2.3x 2.1x 2.0x 1.2% 0.3% 1.8% -2.4% 6.9% 6.3% 21.3% -4.3% 1.40 Michelin N EUR 66.14 60 15,613 7.8x 5.0x 4.8x 13.5x 8.6x - 0.9x 0.8x 0.8x 7.5x 7.3x 7.2x 5.3x 5.0x 4.8x 1.4x 1.3x 1.1x 3.6% -6.8% 3.6% -0.1% -4.2% -7.6% 42.9% -10.5% 1.26 Porsche O EUR 62.78 89 30,217 8.4x - - 5.5x 6.0x 0.4x ------0.4x 0.4x - 3.2% -3.4% 8.2% 3.5% 16.3% 2.1% 65.2% -5.7% 1.49 PSA Peugot Citroen U EUR 7.17 5 3,290 - 3.6x 3.0x 6.9x 8.7x - 0.2x 0.2x 0.2x - - - 3.0x 3.6x 3.0x 0.2x 0.2x 0.2x 0.0% -5.2% 14.6% 26.9% 49.8% 31.0% 63.1% -15.7% 1.35 Renault N EUR 59.50 50 22,753 22.2x 4.0x 3.7x 6.2x - - 0.4x 0.4x 0.4x - 16.7x 12.3x 7.4x 4.0x 3.7x 0.7x 0.6x 0.6x 2.9% -4.2% 13.6% 27.6% 59.8% 46.2% 101.5% -4.4% 2.16 Scania U SEK 147.70 115 8,901 22.7x 3.5x 3.0x 22.5x 13.8x - 0.5x 0.5x 0.4x 6.1x 4.6x 3.8x 4.5x 3.5x 3.0x 3.1x 2.8x 2.5x 3.3% 0.5% 6.2% 11.3% 8.9% 10.0% 31.5% -1.1% 1.35 Volkswagen O EUR 167.40 99,200 3.4x 2.3x 1.9x 10.4x 8.5x -0.6x 0.3x 0.3x 0.2x 5.3x 3.6x 2.8x 3.0x 2.3x 1.9x 1.3x 1.1x 1.0x 2.1% -3.7% 12.8% 1.6% 2.1% -2.8% 41.9% -10.4% 1.38 Volvo U SEK 97.30 75 30,010 17.7x 9.6x 6.9x 12.1x 16.8x -0.5x 0.8x 0.9x 0.8x 12.7x 19.9x 11.1x 7.7x 9.6x 6.9x 2.6x 2.6x 2.4x 3.1% -0.5% 9.0% 0.8% 4.7% 9.6% 31.4% -3.4% 1.66 Average 12.8x 5.2x 4.6x 11.5x 10.4x 0.1x 0.6x 0.6x 0.6x 7.6x 9.5x 7.7x 4.9x 5.2x 4.6x 1.5x 1.4x 1.3x 2.5% -2.1% 9.8% 12.3% 23.0% 14.6% 51.0% -5.4% 1.49

European Electrical/Electronics Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA ABB O CHF 21.37 26 51,367 17.0x 8.4x 7.3x 14.4x 13.5x - 1.4x 1.3x 1.2x 13.5x 10.7x 9.1x 10.4x 8.4x 7.3x 3.0x 2.8x 2.5x 3.2% -1.0% -0.4% 2.4% 20.3% 14.0% 44.1% -3.0% 1.53 Alstom N EUR 28.77 27 11,464 9.1x 7.5x 6.9x 11.0x 10.2x -2.1x 0.7x 0.6x 0.6x 12.3x 11.0x 10.0x 7.8x 7.5x 6.9x 2.0x 1.7x 1.6x 2.9% 0.7% -6.9% -11.3% 3.7% -4.5% 24.3% -19.0% 1.31 Eltek NA NOK 5.20 293 5.8x 9.8x 8.3x 14.4x 13.4x -0.4x 0.5x 0.5x 0.5x 5.6x 7.2x 6.2x 3.7x 4.9x 4.4x - - - 2.6% -2.4% -13.3% -10.3% 49.4% 31.3% 64.6% -13.3% 0.85 Legrand SA U EUR 38.46 30 13,148 19.0x 10.9x 10.3x 14.4x 13.4x - 2.6x 2.5x 2.3x 13.0x 12.6x 11.9x 11.2x 10.9x 10.3x 3.2x 3.0x 2.8x 2.6% -1.4% 9.7% 10.5% 25.9% 20.7% 62.8% -1.4% 0.85 Philips N EUR 22.64 23 26,633 36.6x 7.2x 6.2x 15.0x 11.3x 2.1x 1.0x 1.0x 0.9x - 12.9x 10.3x 11.0x 7.2x 6.2x 1.9x 1.8x 1.7x 0.8% 2.2% 6.1% 6.6% 12.0% 13.8% 63.3% -4.4% 1.01 Schneider N EUR 61.29 58 44,019 15.1x 10.2x 9.2x 13.3x 11.8x 2.1x 1.7x 1.6x 1.5x 13.8x 13.2x 11.7x 10.1x 10.2x 9.2x 2.0x 1.9x 1.8x 3.1% 2.0% 6.1% 8.8% 17.9% 11.8% 52.8% -2.4% 1.09 Siemens O EUR 82.85 95 94,384 10.7x 7.9x 6.6x 12.4x 11.0x - 1.1x 1.1x 1.0x 11.7x 10.6x 8.5x 8.5x 7.9x 6.6x 2.4x 2.2x 2.0x 3.6% 2.2% 5.0% 5.9% 5.0% 0.8% 31.4% -4.6% 1.12 Average 16.2x 8.8x 7.8x 13.6x 12.1x 0.4x 1.3x 1.2x 1.1x 11.7x 11.2x 9.7x 9.0x 8.2x 7.3x 2.4x 2.2x 2.0x 2.7% 0.3% 0.9% 1.8% 19.2% 12.5% 49.0% -6.9% 1.11

European Mechanical Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Alfa Laval N SEK 146.20 145 9,239 16.4x 11.6x 10.7x 14.0x 13.6x - 2.2x 2.1x 2.0x 14.8x 13.6x 12.3x 12.2x 11.6x 10.7x 4.0x 3.6x 3.2x 2.4% -2.1% 3.6% -1.3% 14.8% 8.1% 32.3% -3.9% 1.04 Assa Abloy O SEK 270.10 300 15,330 19.5x 12.5x 11.1x 13.8x 12.7x - 2.5x 2.3x 2.1x 15.4x 14.1x 12.4x 13.5x 12.5x 11.1x 3.8x 3.3x 2.9x 1.9% -1.1% 5.4% 7.4% 15.0% 11.2% 50.9% -1.4% 0.90 Atlas Copco O SEK 180.60 200 31,937 15.7x 9.5x 8.4x 14.9x 13.8x 2.6x 2.4x 2.3x 2.1x 11.4x 10.9x 9.6x 10.0x 9.5x 8.4x - - 4.4x 3.1% 1.0% -0.2% -2.2% 7.3% 1.3% 30.6% -4.5% 1.25 Electrolux O SEK 182.90 180 7,867 14.1x 5.8x 5.1x 13.0x 10.4x 0.7x 0.5x 0.5x 0.5x 11.0x 9.1x 7.8x 6.8x 5.8x 5.1x 2.6x 2.5x 2.2x 3.6% -0.7% 1.0% 12.8% 6.7% 7.3% 46.1% -2.1% 1.06 Kone Corporation N EUR 69.60 62 23,270 26.2x 16.3x 14.5x 17.2x 16.3x 2.0x 2.7x 2.6x 2.4x - 18.2x 15.9x - - 14.5x - - - 2.5% -2.0% 4.7% 13.4% 21.8% 24.7% 63.4% -3.3% 0.67 Metso O EUR 30.40 38 5,890 9.9x 5.8x 5.2x 12.5x 11.9x 1.8x 0.6x 0.7x 0.6x 7.7x 7.4x 6.7x 6.1x 5.8x 5.2x 2.1x 1.9x 1.8x 6.1% -4.4% -2.8% -6.3% 7.5% -5.1% 20.9% -12.3% 1.26 Sandvik U SEK 93.80 80 17,727 13.1x 7.6x 6.6x 13.7x 14.1x -1.2x 1.4x 1.5x 1.4x 9.6x 10.5x 9.0x 7.4x 7.6x 6.6x 3.6x 3.3x 2.9x 3.8% -2.2% 2.0% -9.5% -3.7% -9.4% 14.0% -13.1% 1.36 SKF U SEK 160.10 140 10,983 15.7x 8.5x 7.0x 13.9x 11.6x -1.5x 1.2x 1.3x 1.1x 11.0x 10.7x 8.5x 8.8x 8.5x 7.0x 3.4x 3.1x 2.8x 3.5% -0.9% 3.2% 2.4% 1.7% -1.9% 25.0% -5.0% 1.18 Average 16.3x 9.7x 8.6x 14.1x 13.0x 0.7x 1.7x 1.7x 1.5x 11.6x 11.8x 10.3x 9.3x 8.8x 8.6x 3.3x 3.0x 2.9x 3.4% -1.6% 2.1% 2.1% 8.9% 4.5% 35.4% -5.7% 1.09

Source: Company data, Credit Suisse estimates

28 May28 2013

Spy Exhibit 19: EMEA Valuation & Performance (contd)

GlobalIndustrials Weekly European Wind Energy Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Gamesa NA EUR 3.34 - 1,097 26.6x 5.0x 4.4x 18.5x 14.3x -1.3x 0.4x 0.4x 0.4x 12.6x 11.5x 10.3x 5.3x 5.0x 4.4x 0.5x 0.5x 0.5x 0.0% 4.9% 13.8% 48.0% 105.2% 101.3% 232.1% 0.0% 1.20 Vestas N DKK 77.00 55 2,722 - 5.9x 4.7x - - - 0.4x 0.5x 0.4x - - 14.3x 6.4x 5.9x 4.7x 1.3x 1.3x 1.2x 0.0% 12.0% 60.9% 91.5% 186.4% 141.7% 219.9% 0.0% 1.16 Average 26.6x 5.5x 4.6x 18.5x 14.3x -1.3x 0.4x 0.4x 0.4x 12.6x 11.5x 12.3x 5.8x 5.5x 4.6x 0.9x 0.9x 0.8x 0.0% 8.4% 37.3% 69.8% 145.8% 121.5% 226.0% 0.0% 1.18

European Industrial Machinery Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Deutz NR EUR 4.97 777 19.2x 16.5x 11.8x 17.1x 11.8x 0.5x 0.5x 0.5x 0.4x 11.3x 13.3x 9.4x 4.1x 4.9x 4.0x 1.1x 1.0x 0.0% 3.1% 20.5% 20.3% 51.7% 40.4% 68.1% 0.0% 1.44 Fiat Industrial O EUR 8.91 10 15,335 13.4x 5.2x 4.5x - - 0.3x 0.6x 0.6x 0.5x 8.1x 6.9x 5.9x 5.8x 5.2x 4.5x 2.4x 1.9x 1.6x 2.6% -2.0% -0.7% -2.4% 10.1% 7.9% 25.9% -8.7% - GEA Group NR EUR 28.33 7,051 13.0x 13.9x 12.6x 13.5x 11.5x -25.1x 1.0x 1.0x 0.9x 9.0x 10.2x 8.9x 7.6x 8.3x 7.3x 1.9x 1.7x 0.0x 1.9% 0.4% 10.1% 6.5% 14.1% 15.8% 43.9% -2.7% 1.38

Kloeckner & Co O EUR 9.68 14 1,249 - 12.0x 7.5x 10.3x 16.0x - 0.2x 0.2x 0.2x - - 15.5x - 12.0x 7.5x 0.6x 0.6x 0.0x 0.0% -4.0% 1.9% -14.4% 19.8% 7.9% 47.1% -15.8% 1.78 Rheinmetall NR EUR 38.98 1,996 10.1x 18.1x 9.0x 8.7x 8.8x -2.7x 0.3x 0.3x 0.3x 5.4x 14.5x 8.1x 3.3x 6.1x 4.7x 0.9x 0.8x 0.0x 4.7% -1.7% 8.6% -5.4% 13.0% 7.9% 23.4% -10.8% 1.39 Vossloh NR EUR 79.50 1,370 16.9x 18.3x 15.9x 13.6x 12.5x 27.4x 1.0x 1.0x 0.9x 12.1x 12.6x 11.0x 8.2x 8.7x 7.7x 1.7x 1.6x 0.0x 2.5% -3.3% -3.0% 0.3% 7.5% 6.8% 24.3% -4.2% 0.58 Wincor Nixdorf NR EUR 43.12 1,845 16.5x 14.9x 12.5x 12.5x 11.2x 0.5x 0.7x 0.7x 0.6x 10.9x 10.9x 8.6x 6.4x 6.4x 6.2x 2.9x 2.5x 0.0x 2.5% -3.6% 10.6% 13.0% 31.0% 21.6% 62.3% -3.6% 1.06 Average 14.9x 14.1x 10.5x 12.6x 12.0x 0.2x 0.6x 0.6x 0.6x 9.5x 11.4x 9.6x 5.9x 7.4x 6.0x 1.6x 1.5x 0.3x 2.0% -1.6% 6.9% 2.6% 21.0% 15.5% 42.1% -6.5% 1.27

MEA Industrials Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 2/17/1900 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA El Sewedy Electric NA 20.00 640 19.1x 11.0x 7.9x 9.7x 7.7x - 0.6x 0.5x 0.5x 11.8x - - 6.6x - - - - - 5.0% -0.1% 2.5% -2.8% -4.7% -12.7% 10.5% -26.0% 1.08

Swiss Mid-cap Engineering Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Bucher Industries N CHF 227.30 230 2,419 12.6x 7.8x 7.1x 12.9x 12.0x 0.8x 1.0x 0.9x 0.9x 11.5x 10.2x 9.3x 8.6x 7.8x 7.1x 2.4x 2.1x 1.9x 2.2% -3.3% 2.3% 13.1% 31.0% 26.3% 57.6% -4.1% 1.91 Forbo O CHF 587.00 730 1,371 13.7x 6.0x 5.3x 10.5x 10.0x -2.4x 0.9x 0.8x 0.7x 6.5x 7.9x 6.8x 5.2x 6.0x 5.3x 1.6x 1.4x 1.3x 2.0% -0.7% -1.0% -5.3% -0.9% 0.3% 11.7% -9.5% 1.69 Geberit U CHF 239.90 185 9,246 22.8x 14.1x 13.0x 16.9x 16.1x 2.6x 3.9x 3.6x 3.3x 18.0x 16.4x 14.9x - 14.1x 13.0x - - - 2.8% -1.0% 6.2% 8.2% 23.2% 19.1% 36.0% -4.0% 1.15 Georg Fischer O CHF 437.50 490 1,863 11.6x 5.7x 5.1x 12.5x 9.4x -2.3x 0.6x 0.6x 0.5x 9.5x 9.1x 8.0x 6.0x 5.7x 5.1x 1.4x 1.3x 1.2x 3.4% -2.4% 10.0% 10.0% 30.9% 18.9% 43.6% -4.4% 1.90 KABA N CHF 369.25 350 1,463 15.3x 9.3x 8.3x 13.7x 12.4x - 1.5x 1.4x 1.3x 11.6x 11.8x 10.4x 9.2x 9.3x 8.3x 2.5x 2.4x 2.2x 2.4% -1.5% 2.1% -8.4% -1.3% -4.7% 14.7% -10.0% 1.02 Komax O CHF 94.00 130 332 27.3x 7.7x 6.7x 13.8x 19.7x -1.0x 1.1x 1.0x 0.9x - 9.8x 8.4x 13.9x 7.7x 6.7x 1.3x 1.3x 1.2x 2.1% -4.5% -2.2% 18.8% 48.9% 32.4% 53.5% -6.3% 1.84 OC Oerlikon O CHF 11.65 15 3,909 18.8x 5.8x 5.1x 9.3x 12.2x - 1.2x 1.0x 0.9x 8.1x 7.9x 6.8x 6.2x 5.8x 5.1x 2.0x 2.0x 1.9x 2.2% 0.4% 5.9% 5.4% 22.0% 12.6% 55.1% -10.7% 1.89 Rieter Holding N CHF 161.00 160 781 17.4x 11.5x 5.8x 17.1x 18.0x -0.5x 0.7x 0.8x 0.7x 19.8x - 8.1x 10.0x 11.5x 5.8x 2.0x 2.0x 1.8x 1.6% -1.6% 7.5% -4.7% 6.1% 1.0% 30.9% -15.3% 1.44 Schindler-Holding AG O CHF 138.00 155 17,058 22.9x 11.3x 9.9x 17.0x 16.0x - 1.7x 1.6x 1.4x 14.5x 12.9x 11.3x 13.0x 11.3x 9.9x - - 4.4x 1.6% -0.3% 0.8% -2.9% 8.7% 4.5% 33.3% -5.0% 0.70 Sika N CHF 2370.00 2200 5,294 19.3x 8.1x 7.2x 14.7x 13.0x 1.0x 1.1x 1.0x 0.9x 12.1x 10.7x 9.4x 9.1x 8.1x 7.2x 3.0x 2.8x 2.5x 2.2% -0.9% 6.3% 2.2% 17.9% 12.3% 37.9% -2.2% 1.33 Sulzer N CHF 162.80 160 5,792 17.7x 9.3x 8.0x 13.7x 12.9x 1.3x 1.4x 1.3x 1.2x 13.9x 11.9x 10.1x 10.5x 9.3x 8.0x 2.4x 2.2x 2.0x 1.9% -2.7% 3.0% 0.9% 15.4% 13.0% 52.7% -4.2% 1.81 Uster Technologies NA CHF 43.60 383 - - - 16.9x 12.0x ------5.7% 0.2% - - - - 3.8% -0.8% 2.02 Average 18.1x 8.8x 7.4x 14.1x 13.6x -0.1x 1.4x 1.3x 1.2x 12.6x 10.9x 9.4x 9.2x 8.8x 7.4x 2.1x 1.9x 2.0x 2.5% -1.5% 3.7% 3.4% 18.3% 12.3% 35.9% -6.4% 1.56

UK Capital Goods Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 13E 5Y FY1 5Y FY2 12 12 13E 13E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Bodycote PLC O GBp 553.50 600 1,564 15.5x 6.6x 6.0x 23.4x 10.8x 1.2x 1.9x 1.7x 1.5x 11.7x 9.9x 8.7x 7.4x 6.6x 6.0x 2.1x 1.9x 1.7x 2.2% 0.7% 7.8% 9.5% 39.2% 22.2% 78.4% -1.2% 1.60 Cookson Group N GBp 367.60 400 1,546 ------0.0% 0.6% 6.2% -1.3% 24.6% 6.2% 39.7% -8.6% - Fenner N GBp 342.00 390 1,001 9.5x 6.7x 6.1x 11.6x 10.3x - 0.9x 1.0x 0.9x 7.1x 9.8x 8.8x 5.5x 6.7x 6.1x 2.1x 2.6x 2.4x 3.1% -3.9% -5.9% -16.9% -10.0% -13.7% 3.9% -21.4% 1.42 GKN O GBp 296.40 315 7,324 10.9x 6.0x 5.2x 15.7x 8.8x 1.4x 0.8x 0.7x 0.6x 10.3x 8.6x 7.2x 7.0x 6.0x 5.2x 3.0x 2.7x 2.3x 2.4% -3.1% 9.4% 13.4% 36.7% 29.5% 70.7% -5.0% 2.02 Halma O GBp 519.00 560 2,959 21.2x 13.9x 12.6x 15.2x 14.1x 1.5x 3.4x 3.3x 3.0x 17.7x 16.8x 15.0x 14.7x 13.9x 12.6x 4.9x - 4.5x 1.9% -1.9% 5.1% 5.8% 19.1% 13.0% 38.4% -3.6% 0.75 IMI PLC O GBp 1309.00 1460 6,294 15.7x 9.8x 9.0x 11.4x 10.5x - 2.0x 1.9x 1.8x 12.6x 11.5x 10.5x 10.4x 9.8x 9.0x - - - 2.5% -1.2% 6.2% 9.3% 28.8% 19.3% 68.7% -3.7% 1.41 Invensys N GBp 387.40 368 4,772 32.2x 15.9x 12.5x 13.0x 11.5x -2.4x 1.1x 1.6x 1.3x 13.9x - 15.6x 10.5x - 12.5x - 3.1x 2.5x 1.2% -3.3% 8.1% 9.1% 38.4% 19.2% 94.8% -3.8% 1.41 Laird U GBp 204.20 200 825 10.6x 7.2x 6.4x 10.3x 8.6x 0.8x 1.3x 1.1x 1.0x 12.0x 10.7x 9.3x 8.0x 7.2x 6.4x 1.2x 1.2x 1.2x 4.9% -1.6% -4.7% -16.6% -8.4% -1.3% 15.4% -18.1% 2.13 Melrose N GBp 255.20 275 4,881 15.7x 9.9x 9.1x 9.7x 8.8x -1.1x 2.7x 1.8x 1.7x - 12.8x 11.7x - 9.9x 9.1x 1.4x 1.9x 1.8x 3.0% -0.9% 3.1% 2.0% 19.8% 14.2% 26.5% -7.9% 1.41 Morgan Crucible U GBp 290.50 260 1,233 18.9x 6.5x 5.7x 10.5x 9.3x -1.3x 1.0x 1.0x 0.9x 8.9x 8.8x 7.7x 6.6x 6.5x 5.7x 3.4x 2.8x 2.4x 3.4% 5.0% 12.7% 4.7% 19.8% 8.1% 31.9% -4.8% 1.82 Rotork plc O GBp 2835.00 3230 3,717 25.0x 15.1x 13.7x 18.5x 17.2x 1.8x 4.7x 4.0x 3.6x 19.3x 16.5x 15.1x - - 13.7x - - - 1.5% 0.0% -1.2% 0.2% 16.1% 11.4% 52.5% -6.7% 1.00 Senior O GBp 271.40 270 1,705 15.7x 8.8x 8.0x 10.6x 10.2x 1.2x 1.7x 1.5x 1.4x 12.4x 10.9x 9.9x 9.9x 8.8x 8.0x 3.5x 3.4x 2.9x 1.7% 0.7% 8.6% 15.0% 40.6% 36.0% 53.3% -3.3% 1.64 Severfield NA GBp 45.50#ERR: NOT COVERED 204 - - - 13.8x 12.8x ------1.7% 9.3% 13.8% 23.1% -4.7% -10.8% 28.5% -50.1% 0.79 Smiths Group O GBp 1355.00 1420 8,052 14.8x 9.8x 8.9x 12.6x 11.4x - 2.1x 2.0x 1.9x 13.4x 12.6x 11.3x 10.3x 9.8x 8.9x - 4.1x 3.6x 2.9% 0.9% 9.5% 9.4% 27.1% 13.8% 38.3% -1.1% 0.71 Spectris O GBp 2090.00 2350 3,728 13.6x 10.3x 9.5x 12.9x 11.7x - 2.2x 2.1x 1.9x 13.4x 12.7x 11.6x 11.0x 10.3x 9.5x 3.5x 2.9x 2.6x 1.9% -1.6% -0.3% -11.2% 10.9% 2.0% 46.5% -15.4% 1.52 Spirax Sarco N GBp 2787.00 2710 3,292 22.3x 12.4x 11.5x 15.4x 14.3x - 3.2x 3.1x 2.9x 16.1x 14.6x 13.5x 13.5x 12.4x 11.5x 5.0x - 4.6x 1.9% -0.5% 9.6% 16.5% 29.4% 22.9% 46.7% -2.7% 0.84 Weir Group N GBp 2295.00 2520 7,386 15.0x 10.4x 9.5x 13.2x 12.8x - 2.2x 2.2x 2.0x 12.5x 12.6x 11.5x 10.5x 10.4x 9.5x 3.7x 3.4x 3.1x 1.7% -4.3% 4.5% 6.1% 26.3% 22.1% 64.3% -7.2% 1.38 Average 17.3x 9.9x 8.9x 13.6x 11.4x 0.3x 2.1x 1.9x 1.8x 12.9x 12.1x 11.2x 9.6x 9.1x 8.9x 3.1x 2.7x 2.7x 2.2% -0.3% 5.4% 4.6% 20.8% 12.6% 47.0% -9.7% 1.37

ource: Company data, Credit Suisse estimates May28 2013

- Spy

Asia Capital Goods Valuation Summary

GlobalIndustrials Weekly

Exhibit 20: Asia Valuation & Performance China Automotive Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Geely Automobile Holdings N HKD 3.82 3.50 4,050 11.1x 10.8x 9.3x 13.7x 11.3x 0.7x 0.9x 0.7x 0.5x 8.6x 6.9x 5.1x 6.5x 5.5x 4.2x 1.9x 1.7x 1.4x 1.0% -5.0% -0.3% -3.5% 6.7% 4.1% 58.5% -18.2% 1.83 Brilliance China Automotive Holding O HKD 8.63 12.00 5,587 14.9x 10.0x 7.6x 11.2x 10.3x 0.4x ------3.4x 2.5x 1.9x 2.4% -6.6% -11.3% -15.9% -5.5% -9.5% 37.2% -23.5% 1.24 Dongfeng Motors Group O HKD 12.12 13.50 13,496 9.1x 8.6x 7.9x 11.1x 10.0x -2.1x 0.5x 0.4x 0.3x 5.3x 4.4x 3.5x 4.2x 3.1x 2.5x 1.6x 1.4x 1.2x 1.6% -3.5% 3.8% 9.6% 13.1% 1.3% 40.3% -12.2% 1.13 Weichai Power Co. NA HKD 29.55 9,482 16.1x 12.8x - 12.0x 10.7x - 1.1x 1.0x - 13.1x 9.2x 7.7x 9.3x 7.0x 5.8x - - - 0.8% -2.8% 4.6% 3.1% 6.9% -14.1% 65.3% -21.6% 1.22 Sinotruk (Hong Kong) NA HKD 4.14 1,469 - 16.1x - 16.9x 13.7x - 0.5x 0.5x - - 13.4x 10.2x 11.4x 6.6x 5.6x - - - 0.4% -4.0% -5.7% -18.2% -17.4% -30.1% 4.5% -36.2% 1.38 Average 12.8x 11.6x 8.3x 12.9x 11.2x -0.3x 0.8x 0.7x 0.4x 9.0x 8.5x 6.6x 7.9x 5.5x 4.5x 2.3x 1.9x 1.5x 1.2% -4.4% -1.8% -5.0% 0.8% -9.7% 41.2% -22.3% 1.36

China Industrial Machinery Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Anhui Heli NA CNY 8.88 746 13.1x 10.9x - 19.5x 14.3x 0.7x 0.8x 0.7x - 12.0x 7.9x 6.9x 8.7x 5.8x 5.1x 1.2x 1.1x - 1.9% -0.7% 4.2% 2.0% 17.2% -0.7% 23.2% -16.4% 1.31 Changsha Zoomlion Heavy Industry N HKD 7.92 7.40 1,459 6.6x 8.2x 6.4x 13.5x 11.1x -0.4x 0.1x 0.0x - 0.8x 0.1x - 0.7x 0.1x - 1.2x 1.1x 0.9x 3.4% -3.4% -1.9% -21.3% -16.5% -30.6% 4.1% -33.9% 1.40 Guangxi Liugong Machinery U CNY 8.35 7.70 1,535 33.8x 23.1x 15.1x 14.4x 12.0x -0.8x 1.1x 1.1x 1.0x - - 18.2x - - 12.9x 1.0x 1.0x 0.9x 3.6% -2.5% 4.9% -12.6% 2.5% -16.6% 5.6% -41.6% 1.45 Lonking Holdings Ltd. U HKD 1.78 1.40 1,003 - 17.0x 12.4x 11.5x 9.9x - 1.3x 1.1x 0.9x 15.6x 13.7x 11.3x 10.4x 9.3x 8.3x 1.0x 0.9x 0.9x 0.0% 0.6% 19.5% -7.8% 1.7% -12.7% 76.2% -29.1% 1.70 Sany Heavy Industry U CNY 9.34 8.70 11,622 12.3x 14.3x 10.5x 17.0x 13.6x -0.5x 1.8x 1.8x 1.3x 11.5x 11.3x 7.7x 9.9x 9.1x 6.4x 3.1x 2.6x 2.1x 3.2% -3.6% -4.3% -15.8% 13.9% -11.8% 22.6% -38.7% 1.42 Sany International NA HKD 2.93 1,211 15.6x 11.6x - 22.5x - 0.6x 1.9x 1.6x - - 12.6x 10.2x - 10.8x 8.4x 1.3x 1.3x - 2.1% -2.5% -10.4% -9.3% -24.7% -27.7% 1.0% -45.4% 1.17 Shantui Construction Machinery NA CNY 4.32 804 - 12.4x - 12.2x 12.0x 0.0x 0.8x 0.5x ------1.1x 1.1x - 0.0% -0.7% 5.6% -10.4% 13.7% -11.3% 14.9% -42.2% 1.41 Yangzijiang Shipbuilding (Holdings) Ltd N SGD 0.88 1.10 2,679 4.6x 5.9x 8.2x - - -0.3x 1.2x 1.8x 1.9x 4.5x 7.6x 13.6x 4.2x 7.1x 8.1x 1.1x 0.9x 0.9x 5.6% -1.1% -8.3% -8.8% -2.2% -8.3% 3.5% -22.8% 1.53 Zhejiang Tianma NA CNY 5.34 1,036 29.7x 19.0x - 21.6x 17.8x 0.6x ------1.9% 4.1% 8.8% -2.6% 4.5% -3.3% 10.8% -31.4% 1.00 Average 16.5x 13.6x 10.5x 16.5x 12.9x 0.0x 1.4x 1.4x 1.6x 8.0x 10.5x 10.5x 7.0x 9.0x 7.6x 1.4x 1.3x 1.2x 2.4% -1.1% 2.0% -9.6% 1.1% -13.7% 18.0% -33.5% 1.38

China Infrastructure Construction Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA China Communications Construction Co Ltd NA HKD 7.48 13,845 7.9x 7.0x - 13.3x 11.0x - 0.6x 0.5x - 9.6x 8.3x 7.8x 7.0x 6.1x 5.8x - - - 3.1% -3.7% -0.3% 4.6% 9.2% 0.0% 29.0% -11.1% 1.19 China Railway Construction Corporation NA HKD 7.70 10,595 9.1x 8.1x - 17.6x 13.4x - 0.6x 0.6x - - 6.3x 6.2x - 3.8x 3.7x - - - 1.6% -4.3% -2.5% -1.3% -5.9% -12.6% 39.0% -18.2% 0.75 China Railway Group Ltd NA HKD 4.04 10,053 9.5x 8.3x - 18.2x 13.0x - 0.3x 0.3x - 8.1x 10.4x 10.0x 6.1x 7.6x 7.3x - - - 1.4% -4.3% 2.3% 1.5% -4.0% -10.8% 46.9% -18.2% 1.09 CSR Times Electric U HKD 24.15 20.30 3,366 16.9x 16.3x 15.9x 23.5x 18.2x - 2.6x 2.3x 2.0x 15.9x 13.8x 11.3x 14.2x 11.9x 10.0x 3.3x 2.8x 2.5x 1.8% -7.3% 12.3% 0.0% 3.2% -15.9% 41.9% -18.5% 0.99 China CSR Corp U HKD 5.59 5.50 9,774 15.2x 14.5x 13.5x 23.1x 17.0x - 0.8x 0.8x 0.7x 14.6x 14.3x 13.3x 10.2x 9.7x 8.9x 1.9x 1.7x 1.6x 4.2% 1.2% 8.8% -8.1% -13.2% -17.3% 16.9% -21.7% 0.64 China CNR Corp N CNY 4.54 4.30 7,654 13.5x 12.8x 11.8x 17.7x 13.0x - 0.6x 0.6x 0.6x 12.3x 12.3x 11.6x 9.0x 8.7x 8.1x 1.3x 1.3x 1.2x 1.1% 0.7% 12.7% -4.4% 10.7% 0.7% 34.3% -9.7% 0.83 Average 12.0x 11.2x 13.7x 18.9x 14.3x - 1.0x 0.9x 1.1x 12.7x 11.4x 10.5x 9.9x 8.4x 7.6x 2.2x 1.9x 1.7x 2.2% -3.0% 5.5% -1.3% 0.0% -9.3% 35% -16.2% 0.92

China Power Equipment Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Baoding Tianwei Baobian Electric Co Ltd U CNY 7.31 3.50 1,640 - - - 34.4x 34.3x - - 3.9x 3.4x ------1.89x 2.2x 2.18x 0.0% 3.7% 8.5% 12.3% 26.9% 12.3% 32.2% -29.0% 1.22 China XD N CNY 3.71 4.80 2,641 - - - - 0.9x 0.7x 0.6x - - - - 11.3x 9.6x 1.15x 1.1x 1.11x 1.6% 12.1% 2.2% 14.9% 6.6% 17.4% -11.0% China High Speed Transmission Equipment U HKD 4.42 2.80 785 34.7x 23.6x 18.6x 16.7x 13.0x -0.9x 1.5x 1.3x 1.1x 12.1x 10.9x 8.8x 6.9x 6.3x 5.2x 0.64x 0.6x 0.60x 0.0% 1.8% 19.8% 18.5% 74.7% 46.4% 111.5% 0.0% 1.09 China Ming Yang Wind Power Group Ltd. U USD 1.72 0.90 210 ------1.0x 1.0x 1.1x ------0.37x 0.4x 0.49x 0.0% 6.8% 41.0% 8.2% 35.4% 43.3% 62.3% -13.6% 1.55 Chongqing Machinery & Electric Co., Ltd NA HKD 1.09 - 7.4x 4.3x - 8.5x 8.1x - 0.3x 0.3x ------4.0% -6.0% 3.8% -11.4% -5.2% -13.5% 19.8% -26.8% 1.27 China Datang Corp N HKD 1.99 1.65 635 - 24.3x 16.4x ------18.9x 16.5x 14.8x 10.1x 9.2x 8.6x 1.3x 1.2x 1.2x 1.5% 2.1% 13.1% 24.4% 136.9% 101.0% 180.3% 0.0% - China Longyuan Power N HKD 8.16 7.08 3,433 18.2x 16.5x 14.2x 21.0x 16.6x - 4.4x 4.4x 4.1x 12.4x 12.1x 11.2x 7.7x 7.3x 6.8x 1.6x 1.6x 1.4x 1.0% -0.5% 13.5% 20.4% 57.2% 52.2% 81.7% 0.0% 0.64 Dongfang Electric Corp U HKD 12.86 11.00 4,109 9.3x 8.1x 10.8x 20.6x 14.4x -1.0x 0.9x 0.8x 0.9x 14.0x 11.9x 16.0x 9.0x 8.2x 9.9x 1.3x 1.2x 1.1x 1.1% -6.7% 16.9% -11.3% -1.2% -17.8% 24.6% -30.5% 1.23 Harbin Power Equipment U HKD 6.52 6.20 564 5.0x 6.1x 9.1x 10.6x 9.9x -1.6x 0.7x 0.8x 0.9x 10.6x 14.7x - 7.6x 9.6x 13.8x 0.6x 0.5x 0.5x 2.0% -2.3% 10.3% 0.3% 2.7% -2.1% 26.6% -16.3% 1.27 Henan Pinggao Electric Co Ltd O CNY 11.42 11.60 1,528 - 28.9x 25.4x - 31.8x - 2.7x 2.0x 1.8x - 19.1x 17.5x - 15.0x 13.8x 3.3x 2.9x 2.6x 0.4% -1.7% 21.4% 17.6% 78.7% 57.1% 90.7% -3.8% 0.79 Shanghai Electric Group Co., Ltd. N HKD 2.91 7,435 10.8x 9.2x 12.0x 15.4x 14.2x -1.5x 0.4x 0.4x 0.6x 5.1x 3.4x 2.9x 4.2x 2.8x 2.3x 1.0x 0.9x 0.9x 2.7% -2.7% 3.2% -1.4% -6.1% -12.1% 11.1% -23.6% 0.99 TBEA Co Ltd N CNY 9.39 6.80 4,396 25.2x 22.1x 19.5x 19.6x 15.7x - 1.2x 0.9x 0.8x - 17.9x 15.0x - 10.4x 8.2x 1.8x 1.7x 1.5x 1.4% 20.2% 41.4% 26.2% 62.7% 45.4% 70.1% 0.0% 0.83 Xinjiang Goldwind U HKD 6.43 3.00 2,868 - 33.2x 32.5x - - - 1.5x 1.5x 1.5x - - - - 14.2x 13.2x 1.0x 1.0x 1.0x 1.2% 3.7% 46.8% 57.6% 113.6% 94.8% 160.3% 0.0% 1.08 Average 15.8x 17.6x 17.6x 18.4x 17.6x -1.2x 1.3x 1.1x 1.1x 7.8x 13.8x 11.8x 5.9x 10.4x 10.2x 1.3x 1.3x 1.2x 1.3% 1.5% 19.4% 12.6% 45.5% 31.8% 68.3% -11.9% 1.09

China Container Manufacturing Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Singamas Container Holdings Ltd. NA HKD 1.93 608 10.1x 8.7x - 41.2x - - 0.4x 0.3x - 2.5x 4.3x 3.2x 2.3x 3.4x 2.6x - - - 3.1% -0.5% 2.1% -7.7% 6.6% 4.3% 23.7% -16.8% 1.64 CIMC 'A' NA CNY 12.19 2,453 16.7x 14.2x - 17.9x 15.9x - 0.6x 0.5x - 18.9x 13.6x 11.1x 13.3x 9.7x 8.5x - - - 3.7% -3.3% 6.4% -4.8% 31.1% 5.7% 33.2% -19.0% 1.28 Average 13.4x 11.4x 24.0x 13.5x - 4.3x 0.4x 11.1x 9.0x 7.1x 9.2x 6.6x 5.6x - - - 4.2% -1.3% 4.2% -6.2% 18.9% 5.0% 20.4% -13.7% 1.27

India Automotive Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Ashok Leyland N INR 23.80 24 1,140 11.2x 14.7x 19.6x 16.4x 14.3x -0.7x 0.7x 0.8x 0.8x 10.4x - 15.6x 7.5x 12.1x 9.7x 1.5x 1.4x 1.4x 4.3% -0.6% 6.0% 5.1% -14.5% -11.7% 15.8% -16.0% 1.10 Bajaj Auto O INR 1816.60 2126 9,460 17.2x 16.8x 14.8x 25.6x 16.1x - 2.4x 2.3x 1.9x 13.2x 13.2x 10.7x 12.7x 12.6x 10.2x - - - 2.5% -2.6% -4.0% -5.5% -2.3% -14.8% 25.5% -17.9% 1.21 Bharat Forge NA INR 232.45 974 13.1x 20.4x - 22.4x 19.0x - 1.2x 1.2x - 13.2x 13.5x 11.1x 9.2x 8.3x 7.1x - - - 1.8% 0.1% 0.2% 8.8% -10.0% -7.9% 15.7% -27.0% 1.17 Bosch O INR 9048.40 10020 5,113 29.6x 24.8x 19.0x 16.0x 14.2x - 3.2x 2.9x 2.4x - - 16.3x - - 12.9x - 4.4x 3.7x 0.7% 0.2% 0.2% 1.8% 1.5% -4.5% 9.3% -4.5% 0.61 Hero Motocorp N INR 1661.15 1742 5,970 13.9x 15.7x 15.0x 16.0x 14.3x 2.9x 1.3x 1.2x 1.1x 11.8x 13.5x 11.9x 8.2x 8.8x 8.0x - - - 2.8% -2.3% 4.0% -1.7% -9.8% -12.5% 15.6% -22.5% 0.54 Mahindra & Mahindra N INR 951.85 882 10,517 20.3x 18.5x 17.7x 16.4x 13.2x 2.3x 1.9x 1.5x 1.3x 18.7x 15.5x 14.7x - 13.1x 12.2x 4.8x 4.0x 3.5x 1.3% -5.2% 6.8% 10.0% 2.5% 2.3% 47.6% -5.2% 1.04 Maruti Suzukia India O INR 1649.05 2163 8,574 28.3x 20.2x 12.6x -0.7x 0.9x 0.8x 0.7x - 15.4x 7.8x 13.5x 8.7x 5.2x 3.2x 2.6x 2.2x 0.5% -5.3% -1.5% 17.3% 10.4% 10.8% 54.4% -5.3% 0.71 Tata Motors O INR 294.45 365 14,413 6.9x 10.4x 6.8x 11.9x 12.9x - 0.7x 0.6x 0.5x 6.5x 6.5x 5.3x 4.6x 4.2x 3.5x 2.8x 2.3x 1.8x 0.0% -2.6% -0.6% 1.8% 10.5% -5.7% 43.7% -11.7% - Average 17.6x 17.7x 15.1x 17.8x 14.9x 1.0x 1.6x 1.4x 1.2x 12.4x 12.7x 11.2x 8.8x 8.7x 8.3x 3.1x 3.0x 2.5x 1.7% -2.3% 1.4% 4.7% -1.5% -5.5% 28.5% -13.8% 0.91

28 May28 2013

Source: Company data, Credit Suisse estimates

- Spy Exhibit 21: Asia Valuation & Performance (contd)

GlobalIndustrials Weekly India Capital Goods Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA ABB Ltd. NA INR 663.55 2,530 - - - 40.7x 29.1x - 1.9x 1.7x - - - 19.8x ------0.5% 0.0% 33.2% 16.9% -5.8% -5.3% 40.2% -17.9% 1.02 BEML Ltd NA INR 166.30 125 24.3x - - 22.4x ------3.0% -10.4% 1.1% -31.1% -39.0% -40.5% 18.4% -63.4% 1.15 BGR Energy NA INR 193.40 251 6.2x 8.0x - 14.0x 11.2x - 0.7x 0.8x - - 6.5x - - 6.3x - - - - 3.7% -6.7% 3.3% -8.1% -27.8% -26.0% 7.1% -38.8% 1.57 Bharat Heavy Electricals U INR 196.75 164 8,666 6.8x 7.7x 9.9x - 0.9x 0.8x 0.8x 4.6x 4.9x 5.5x 4.2x 4.4x 4.7x 1.9x 1.6x 1.4x 0.0% -2.6% 4.2% -2.6% -12.2% -13.9% 11.6% -26.0% - Crompton Greaves Ltd U INR 94.05 92 1,086 16.1x - 12.2x 17.7x 13.8x -0.2x 0.5x 0.6x 0.5x 11.1x - 9.3x 7.5x - 7.2x 1.7x 1.7x 1.5x 0.8% -7.9% 3.8% 1.1% -19.1% -18.9% 6.3% -32.6% 1.09 Cummins India N INR 475.35 481 2,371 24.4x 19.7x 19.3x 19.2x 16.6x - 3.1x 2.7x 2.5x - 17.3x 17.4x - - - - - 4.9x 2.8% -2.3% -6.5% -1.2% 1.9% -8.0% 13.2% -11.5% 0.86 Havells India Ltd. NA INR 698.15 1,568 23.5x 21.3x - 17.4x 13.2x - 1.4x 1.3x - 13.0x 13.5x 10.7x 11.2x 11.7x 9.5x - - - 1.0% 2.7% 8.8% 9.1% 21.7% 9.5% 32.0% 0.0% 1.39 KEC International Ltd NA INR 42.80 198 5.2x 16.9x - 9.6x 7.9x - 0.4x 0.4x - 6.1x 10.6x 6.1x 5.5x 9.1x 5.4x - - - 2.8% -12.0% -19.9% -16.5% -31.6% -36.2% 0.0% -43.6% 0.94 Larsen & Toubro N INR 1465.40 1433 16,251 19.4x 17.7x 16.1x 24.1x 20.4x 2.0x 1.9x 1.8x 1.7x 17.4x 16.8x 16.1x 14.3x 13.2x 12.9x 3.1x 2.7x 2.4x 1.1% -9.5% -5.0% 7.2% -9.5% -8.7% 29.2% -14.4% 1.23 Punj Lloyd Ltd NA INR 46.85 280 16.9x - - - 11.2x - 0.6x 0.5x - 9.8x 9.8x 9.4x 6.6x 6.8x 6.7x - - - 0.0% -12.1% -10.2% 9.7% -7.7% -22.0% 18.8% -25.5% 1.70 Siemens India NA INR 583.60 3,734 - - - 28.2x 23.9x - 1.6x 1.6x - - - 18.3x - - 14.9x - - - 1.0% -2.7% 16.1% 10.4% -13.4% -12.5% 23.6% -21.5% 1.35 Suzlon Energy Ltd NA INR 13.22 498 - - - 12.5x 14.4x - 0.5x 0.5x - 11.1x - 10.3x 7.1x - 7.9x - - - 0.0% -7.8% -5.3% -37.9% -22.5% -28.7% 0.0% -50.6% 1.47 Thermax NA INR 584.80 1,254 17.3x 21.2x - 18.8x 15.9x - 1.1x 1.2x - 8.6x 13.8x 12.4x 7.7x 12.6x 10.9x - - - 1.2% -2.4% 0.8% 0.8% 2.5% -4.8% 35.3% -6.9% 1.24 Voltas Ltd U INR 84.25 82 502 7.8x 12.6x 9.2x 16.7x 12.6x -0.5x 0.5x 0.4x 0.4x 7.3x 10.2x 6.4x 6.7x 9.0x 5.9x 1.9x 1.6x 1.4x 1.9% -8.8% 0.3% 0.8% -20.0% -20.4% 12.3% -37.4% 1.38

Average 15.3x 15.6x 13.3x 20.1x 15.8x 0.4x 0.9x 0.9x 0.4x 9.2x 11.2x 11.3x 7.0x 9.5x 9.3x 2.1x 1.9x 2.4x 1.4% -5.9% 1.8% -3.0% -13.0% -16.9% 17.7% -27.9% 1.26

Japan Automotive Local Price P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Nissan Motor O JPY 1076 1380 45,846 13.5x 13.5x 9.6x 10.7x 11.4x - 0.9x 1.0x 0.8x 15.5x 18.0x 10.9x 9.6x 11.2x 7.5x 1.5x 1.2x 1.1x 2.2% -10.4% 4.1% 17.5% 39.2% 32.7% 66.6% -12.7% 1.41 Toyota Motor O JPY 5920 7690 208,390 - 20.1x 11.5x 32.4x 23.6x - 1.1x 1.0x 0.8x - 15.9x 9.0x - 10.3x 6.7x 1.8x 1.6x 1.5x 1.4% -8.1% 3.7% 25.6% 70.4% 47.8% 110.2% -10.8% 1.07 Mazda Motor N JPY 402 390 17,261 - 36.1x 12.4x 32.1x 24.7x - 1.0x 0.9x 0.8x - - 12.1x - - 8.9x 2.6x 2.5x 2.1x 0.0% -8.0% 16.2% 45.7% 221.6% 131.0% 367.4% -10.7% 1.95 Daihatsu Motor O JPY 2088 2640 8,929 13.8x 11.1x 8.6x 13.8x 11.9x 1.2x 0.6x 0.5x 0.5x 7.8x 6.8x 5.5x 4.9x 4.6x 3.9x 2.1x 1.8x 1.6x 2.6% -3.1% 7.2% 11.2% 48.3% 22.0% 71.3% -5.4% 0.99 Honda Motor N JPY 3885 4710 71,338 34.0x 19.7x 11.2x 27.1x 11.6x -0.9x 1.3x 1.1x 0.9x - 20.0x 12.7x - 13.1x 8.9x 1.6x 1.4x 1.3x 1.9% -6.2% -3.1% 13.8% 45.4% 23.5% 67.5% -9.1% 1.10 Suzuki Motor N JPY 2600 3060 14,736 27.6x 18.5x 13.8x 22.9x 19.0x - 0.4x 0.4x 0.4x 8.7x 7.2x 6.1x 4.7x 4.4x 3.9x 1.5x 1.3x 1.2x 0.7% -6.9% 10.6% 18.0% 35.3% 16.0% 91.2% -9.1% 1.08 Fuji Heavy Inds. O JPY 2369 2710 18,914 - 15.9x 9.4x 11.6x 12.5x - 1.3x 1.0x 0.8x - 15.5x 7.2x - 10.3x 5.8x 4.2x 3.2x 2.5x 0.6% -7.0% 27.0% 72.4% 170.7% 120.2% 323.0% -11.8% 1.36 Average 22.2x 19.3x 10.9x 21.5x 16.4x 0.2x 0.9x 0.8x 0.7x 8.2x 12.4x 8.7x 4.8x 8.1x 6.3x 2.2x 1.9x 1.6x 1.3% -7.1% 9.4% 29.1% 90.1% 56.2% 157% -9.9% 1.28

Japan Auto Related Consumables Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA JTEKT N JPY 1068 1000 3,889 29.5x 28.3x 23.5x 16.6x 16.1x -1.6x 0.5x 0.5x 0.5x 15.9x 19.2x 16.5x 6.9x 7.6x 6.9x 1.2x 1.1x 1.1x 1.4% -7.3% 4.7% 19.1% 65.8% 31.2% 92.8% -14.8% 1.69 NSK O JPY 938 800 5,307 18.8x 34.1x 19.7x - 17.7x - 0.9x 1.0x 0.9x 15.6x - 15.2x 8.6x 10.5x 8.4x 2.0x 1.8x 1.7x 1.1% -7.5% 17.8% 32.5% 97.9% 54.0% 124.4% -14.4% 1.55 NTN U JPY 319 200 1,781 30.0x - 39.1x 12.5x 15.1x -0.8x 0.7x 0.8x 0.7x 19.4x - 17.4x 7.3x 10.5x 7.0x 0.9x 0.9x 1.0x 0.0% -11.5% 25.6% 23.6% 98.1% 38.1% 143.5% -16.5% 1.48 Tsubakimoto Chain O JPY 599 550 1,157 17.1x 15.8x 14.7x 17.5x 11.7x 3.0x 0.9x 0.9x 0.8x 10.8x 10.6x 9.0x 6.7x 6.7x 5.8x 1.3x 1.2x 1.1x 1.1% -5.4% 15.2% 23.0% 34.0% 23.8% 58.0% -9.8% 1.50 Average 23.9x 26.1x 24.2x 15.5x 15.2x 0.2x 3.0x 0.8x 0.7x 14.7x 14.9x 14.5x 8.3x 8.8x 7.0x 1.4x 1.3x 1.2x 0.9% -7.9% 15.8% 24.5% 74.0% 36.8% 105% -13.9% 1.55

Japan Conglomerates Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Hitachi N JPY 679 510 32,976 9.0x 18.5x 11.9x 18.0x 14.9x 0.4x 0.5x 0.6x 0.6x 11.8x 11.9x 9.0x 6.3x 6.4x 5.5x 1.8x 1.6x 1.5x 1.4% -10.2% 9.2% 31.3% 52.9% 34.7% 68.1% -13.6% 1.43 Mitsubishi Electric NA JPY 1014 810 22,484 20.2x 32.6x 16.5x 17.5x 14.3x - 0.7x 0.7x 0.7x 10.7x 16.2x 10.5x 6.8x 8.7x 6.4x 2.0x 1.9x 1.7x 1.0% -10.7% 8.9% 32.4% 62.2% 38.7% 81.1% -15.0% 1.29 IHI Corporation NA JPY 377 5,654 23.9x 17.1x 18.0x 16.9x 12.9x - 0.5x 0.5x 0.5x - 12.9x 12.7x - 6.0x 6.9x 2.3x 2.1x 1.9x 1.3% -10.0% 3.9% 42.3% 108.3% 69.8% 149.7% -15.8% 1.54 Average 17.7x 22.7x 15.5x 17.5x 14.1x 0.4x 3.4x 0.6x 0.6x 11.5x 13.7x 10.7x 8.4x 7.0x 6.3x 2.0x 1.9x 1.7x 1.2% -10.3% 7.3% 35.3% 74.5% 47.8% 100% -14.8% 1.42

Japan/Taiwan Factory Automation Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Airtac N TWD 168 170 844 22.8x 17.6x 14.3x - - - 4.9x 4.1x 4.1x 18.2x 14.1x 11.9x 15.0x 11.3x 9.6x 4.4x 3.9x 3.4x 2.4% 6.3% 6.3% -2.9% 10.2% 0.0% 23.5% -7.2% - Delta Electronics O TWD 143.5 160.0 11,659 21.6x 19.0x 17.8x 16.9x 15.0x 0.8x 1.8x 1.8x 1.8x 18.3x 15.5x 13.6x 12.5x 11.3x 9.7x 3.5x 3.3x 3.2x 2.5% -2.4% 1.1% 28.7% 38.0% 34.7% 86.8% -3.7% 0.83 Fanuc O JPY 15320 20000 30,153 21.9x 25.3x 26.0x 28.2x 22.7x - 4.5x 4.6x 4.6x 10.8x 12.5x 12.8x 10.1x 11.4x 11.6x 3.1x 2.8x 2.6x 1.2% -4.0% -1.6% 8.0% 10.9% -3.8% 32.3% -7.9% 0.86 HIWIN U TWD 196 167 1,613 24.0x 25.1x 18.7x 18.7x - - 4.7x 4.6x 4.6x - - 16.3x - - 12.1x 4.8x 4.5x 3.8x 2.7% -0.8% -6.7% -20.4% -6.5% -8.2% 16.0% -32.7% 1.58 Keyence N JPY 30000 26000 18,545 29.3x 27.8x 25.0x 22.5x 20.5x - - - - 16.4x 14.6x 12.5x - 14.2x 12.2x 2.6x 2.6x 2.4x 0.2% -6.2% -1.2% 16.5% 34.8% 25.7% 72.3% -12.9% 0.76 SMC N JPY 19660 17000 13,805 23.5x 21.7x 21.1x 34.7x 22.2x 1.5x 3.5x 3.5x 3.5x 13.6x 14.6x 11.9x 12.0x 12.8x 10.5x 2.4x 2.0x 1.9x 0.2% -7.9% 2.4% 24.0% 44.1% 26.3% 65.8% -14.3% 0.85 Nabtesco N JPY 2106 1650 2,636 17.9x 20.0x 18.5x 21.4x 15.9x - 1.2x 1.4x 1.4x 10.8x 16.8x 12.9x 8.4x 11.0x 9.0x 2.8x 2.5x 2.4x 1.5% -14.3% -1.8% 26.0% 30.0% 10.3% 51.3% -15.5% 1.08 Teco O TWD 30 33 1,909 18.7x 15.5x 13.7x 12.9x 11.3x - 1.2x 1.0x 1.0x 16.0x 10.8x 9.6x 11.6x 8.5x 7.3x 1.5x 1.4x 1.3x 3.0% 6.2% 10.9% 26.2% 45.8% 35.3% 64.9% -1.6% 1.12 THK O JPY 2251 2000 2,851 23.1x 29.3x 21.2x 33.0x 24.1x -1.5x 1.2x 1.3x 1.3x 12.0x 18.1x 12.7x 7.9x 9.9x 8.5x 1.7x 1.6x 1.6x 0.8% -10.4% 9.3% 32.0% 63.1% 46.5% 94.7% -15.5% 0.99 Yaskawa Electric Corporation O JPY 1247 1800 3,199 38.3x - 19.0x 17.0x 40.7x - 1.2x 1.2x 1.2x - - 12.1x - - 9.2x 3.2x 3.0x 2.7x 0.7% -9.5% 6.1% 50.1% 90.7% 51.5% 158.7% -13.3% 1.46 Average 24.1x 22.4x 19.5x 22.8x 21.5x 0.2x 1.7x 1.7x 1.7x 13.1x 15.1x 11.8x 10.0x 10.5x 8.9x 3.0x 2.8x 2.5x 1.5% -4.3% 2.5% 18.8% 36.1% 21.8% 67% -12.5% 1.06

Japan Infrastructure Machinery Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Daikin Industries U JPY 4445 3300 12,892 31.6x 29.9x 21.2x 30.7x 16.9x 0.7x 1.3x 1.4x 1.4x 19.1x - 15.4x 13.0x 14.2x 11.4x 2.6x 2.3x 2.2x 0.8% -9.3% 13.5% 29.6% 78.2% 51.1% 140.4% -11.8% 1.31 Ebara N JPY 532 380 2,516 - 16.6x 21.2x 25.3x 15.6x - 0.7x 0.6x 0.6x 13.2x 10.2x 11.5x 8.6x 6.9x 7.4x 1.5x 1.5x 1.5x 0.9% -9.7% 29.8% 47.8% 66.3% 47.8% 111.1% -12.2% 1.31 Hitachi Construction Machinery N JPY 2406 2300 5,173 22.6x 22.2x 13.3x 45.8x 17.8x 0.5x 1.0x 1.1x 1.1x 14.9x 16.6x 10.2x 8.7x 9.7x 7.0x 1.7x 1.5x 1.4x 1.5% -12.0% 3.4% 14.8% 72.6% 34.3% 96.7% -14.0% 1.19 Komatsu O JPY 2595 2700 25,007 15.3x 20.0x 12.2x 21.1x 15.0x -2.0x 1.6x 1.6x 1.6x 12.0x 14.7x 8.9x 8.9x 10.3x 6.9x 2.6x 2.3x 2.3x 1.8% -10.2% -2.3% 13.2% 43.8% 18.8% 75.9% -12.7% 1.42 Kubota U JPY 1528 1150 19,835 32.7x 27.2x 22.1x 17.4x 14.6x 2.0x 2.1x 1.9x 1.9x - 19.6x 15.3x - - 12.1x 3.1x 2.8x 2.7x 1.1% -6.9% 10.6% 38.7% 77.1% 55.0% 139.9% -14.1% 1.22 Makita U JPY 5490 3900 7,586 23.8x 24.6x 18.7x 15.8x 14.3x - 2.3x 2.1x 2.1x 14.1x 14.4x 11.1x 12.3x 12.3x 9.7x 2.5x 2.3x 2.0x 1.2% -7.2% 1.9% 35.4% 64.4% 38.3% 121.2% -9.7% 1.14 Average 25.2x 23.4x 18.1x 26.0x 15.7x 0.3x 1.6x 1.5x 1.5x 13.6x 15.1x 11.4x 9.6x 9.8x 8.6x 2.3x 2.1x 2.0x 1.2% -9.2% 9.5% 29.9% 67.0% 40.9% 114% -12.4% 1.26

28 May28 2013

Source: Company data, Credit Suisse estimates

- Spy Exhibit 22: Asia Valuation & Performance (contd)

GlobalIndustr Japan Machine Tools Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Amada O JPY 747 700 2,932 - - 21.8x 32.4x 32.9x - 1.2x 1.3x 1.3x - - 11.7x 13.1x - 8.3x 0.8x 0.8x 0.8x 1.5% -11.6% -0.8% 24.3% 68.2% 34.6% 121.7% -15.4% 1.26 Mori Seiki U JPY 1143 900 1,239 22.4x 24.2x 15.9x 19.1x 14.1x - 1.2x 1.2x 1.2x - - 18.7x 13.3x - 10.4x 1.3x 1.3x 1.2x 1.6% -21.7% -4.8% 14.8% 108.2% 52.2% 139.6% -21.7% 1.39 Okuma Corp N JPY 901 700 1,490 18.1x 19.9x 17.5x 12.0x 13.0x - 0.9x 1.0x 1.0x 11.7x 12.8x 9.9x 8.4x 9.2x 7.2x 1.7x 1.5x 1.5x 1.1% -7.3% 15.2% 32.3% 91.7% 53.2% 107.6% -10.3% 1.67 ialsWeekly Average 20.2x 22.0x 18.4x 21.1x 20.0x - 3.8x 1.2x 1.2x 11.9x 12.8x 13.4x 11.7x 9.2x 8.6x 1.3x 1.2x 1.2x 1.4% -13.5% 3.2% 23.8% 89.4% 46.7% 123% -15.8% 1.44

Korea Engineering & Construction Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Daelim Industrial O KRW 88600 120000 2,828 8.8x 7.1x 6.6x 8.4x 7.2x 0.6x 0.3x 0.3x 0.3x 6.6x 6.1x 4.7x 5.9x 5.5x 4.3x 0.7x 0.7x 0.6x 0.6% 3.2% 17.0% -7.3% 18.3% 1.8% 31.1% -13.1% 1.63

Daewoo E&C U KRW 7860 7000 2,926 19.0x 11.2x 11.8x 11.3x 12.0x 0.6x 0.7x 0.6x 0.6x 16.3x 13.0x 10.4x 14.4x 11.6x 9.4x 1.0x 0.9x 0.8x 0.0% -0.1% 4.8% -13.3% -16.8% -21.0% 5.9% -26.9% 1.19 GS E&C U KRW 32950 38000 1,518 15.3x - 11.4x 9.8x 8.9x - 0.3x 0.3x 0.3x 17.1x - 9.7x 12.2x - 7.9x 0.4x 0.5x 0.5x 0.8% -2.8% 14.0% -40.6% -35.4% -42.5% 14.0% -60.1% 1.35 Hyundai E&C O KRW 61500 72000 6,092 12.1x 10.3x 8.7x 13.2x 11.2x - 0.5x 0.5x 0.5x 8.8x 7.3x 6.2x 7.9x 6.7x 5.7x 1.4x 1.3x 1.1x 0.8% -2.5% 3.5% -8.9% -6.7% -12.1% 9.2% -16.7% 1.12 S1 Corporation NA KRW 62000 2,150 21.3x 20.5x - - 2.2x 2.0x 2.0x 13.3x 12.6x 10.8x 8.2x 8.8x 7.8x - - - 2.0% 4.1% 1.1% -8.7% -6.5% -11.3% 12.3% -16.6% 0.50 Samsung Engineering Co Ltd N KRW 96700 90000 3,486 6.9x 12.6x 6.5x 14.6x 11.8x -0.3x 0.3x 0.3x 0.3x 5.3x 10.1x 4.6x 4.9x 8.5x 4.2x 2.2x 2.0x 1.7x 3.2% 3.2% 9.6% -37.2% -36.8% -41.6% 11.4% -54.1% 1.29 Average 13.9x 12.3x 9.0x 11.5x 10.2x 0.3x 0.8x 0.7x 0.7x 12.2x 10.7x 8.3x 9.5x 8.9x 7.0x 1.2x 1.1x 0.9x 1.2% 0.8% 8.4% -19.3% -14.0% -21.1% 14.0% -31.2% 1.18

Korea Industrials / Shipbuilding / Autos Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA Daewoo Shipbuilding & Marine Engineering N KRW 24900 23000 4,349 22.0x 14.5x 14.0x 9.9x 9.1x -0.7x 0.7x 0.7x 0.7x - - - 13.5x - - 1.0x 1.0x 0.9x 1.0% -1.2% -4.8% -19.3% 12.2% -8.3% 17.5% -21.8% 1.21 Doosan Heavy Industries & Construction N KRW 46100 49000 4,419 39.5x 11.9x 11.1x 15.4x 10.5x - 0.8x 0.8x 0.8x 13.5x 12.8x 11.9x 9.4x 8.8x 8.2x 1.1x 1.0x 0.9x 1.7% 2.7% 16.4% 6.8% 10.4% 2.0% 22.3% -28.6% 1.29 Doosan Infracore NR KRW 12900 1,946 6.2x 20.9x - 6.6x 13.7x - 0.3x 0.3x 0.3x - 18.9x 12.8x 12.4x 11.4x 9.0x - - - 0.0% -6.5% 2.0% -17.3% -17.3% -24.1% 7.9% -36.9% 1.43 Hyundai Heavy Industries N KRW 201000 ` 13,646 11.3x 13.8x 11.0x 7.6x 7.0x -0.3x 0.3x 0.3x 0.3x 9.2x 14.1x 11.3x 6.1x 8.6x 7.3x 0.9x 0.9x 0.8x 1.3% -2.2% -0.5% -6.7% -1.0% -16.9% 6.9% -28.2% 1.47 Hyundai Mipo Dockyard U KRW 132500 88000 2,352 27.3x 32.0x 29.1x 11.2x 9.2x -0.8x 1.0x 1.1x 1.1x ------0.8x 0.8x 0.8x 1.1% -4.0% 19.9% 13.7% 24.4% 4.3% 27.4% -5.7% 1.44 Hyundai Mobis O KRW 286000 374000 24,721 7.7x 7.5x 6.7x 9.0x 8.0x 0.7x 0.9x 0.8x 0.8x 9.5x 9.1x 7.6x 8.2x 7.7x 6.4x 1.6x 1.4x 1.1x 0.7% 4.2% 11.9% -5.1% 1.4% -0.7% 16.3% -11.5% 0.89 Hyundai Motor O KRW 207000 254500 38,694 5.1x 4.7x 3.9x 9.5x 8.7x 0.5x 0.8x 0.8x 0.8x 8.2x 8.1x 6.1x 6.0x 5.5x 4.4x 1.0x 0.8x 0.7x 0.9% 4.5% 6.7% -3.0% -7.8% -5.3% 13.1% -18.3% 1.09 Kia Motors O KRW 58400 64900 20,805 6.0x 5.5x 4.9x 7.8x 7.1x 0.5x 0.5x 0.4x 0.4x 6.5x 5.2x 3.6x 5.0x 4.0x 2.8x 1.4x 1.1x 0.9x 1.1% 5.5% 11.0% 7.2% -1.4% 3.4% 19.2% -27.2% 1.21 Samsung Heavy Industries O KRW 32000 44000 6,604 9.1x 9.0x 8.9x 9.0x 8.4x - 0.7x 0.6x 0.6x 7.9x 7.2x 6.9x 6.4x 5.8x 5.5x 1.4x 1.2x 1.1x 1.6% -2.4% -9.9% -16.3% -7.5% -17.0% 6.3% -19.3% 1.43 Average 14.9x 13.3x 11.2x 9.6x 9.1x 0.0x 0.8x 0.7x 0.7x 8.0x 7.4x 6.1x 6.4x 5.8x 4.8x 1.2x 1.0x 0.9x 1.0% 0.1% 5.9% -4.5% 1.5% -7.0% 15.2% -22.0% 1.27

Singapore /Taiwan Industrials Local Price $USD P/E AVG P/E PE/G EV/SALES EV/EBIT EV/EBITDA P/B YIELD Performance Name Rating CCY 5/27/2013 TP MktCp 12 13E 14E 5Y FY1 5Y FY2 12 12 13E 14E 12 13E 14E 12 13E 14E 12 13E 14E DIV 1-WK 1-MO 3-MO 6-MO YTD VS LO VS HI BETA COSCO Corporation Ltd U SGD 0.8 0.6 1,430 17.1x 24.5x 26.1x 16.7x 15.1x -0.6x 0.8x 1.0x 1.0x 10.8x 16.1x 17.1x 6.7x 10.2x 10.7x 1.4x 1.3x 1.3x 2.5% -1.2% -9.6% -13.9% -11.5% -10.1% 0.6% -23.7% 1.83 Hyflux Ltd N SGD 1.4 1.5 935 30.8x 37.3x 28.6x 20.7x 16.7x -2.5x 2.6x 3.4x 3.4x 17.2x - 19.5x 13.3x - - 2.5x 2.3x 2.1x 2.3% -0.7% -2.8% -1.8% 6.6% 6.6% 13.8% -8.1% 1.27 Keppel Corporation O SGD 10.9 13.7 15,591 10.2x 10.2x 10.1x 11.4x 11.8x 0.8x 1.6x 1.8x 1.8x 9.3x 10.5x 9.5x 8.6x 9.4x 8.5x 2.1x 2.0x 1.8x 4.0% -1.5% 0.3% -2.8% 6.3% 1.4% 15.7% -6.2% 1.45 Sembcorp Industries Ltd N SGD 5.0 5.1 7,034 11.8x 12.5x 10.1x 11.5x 11.2x -1.8x 0.9x 0.9x 0.9x 8.2x 9.3x 7.0x 6.5x 7.3x 5.8x 2.0x 1.8x 1.6x 3.0% -0.4% -3.3% -4.4% -0.2% -5.5% 4.6% -13.9% 1.25 Sembcorp Marine Ltd N SGD 4 4 7,312 18.4x 17.0x 13.3x 13.9x 13.8x -1.2x 1.8x 1.7x 1.7x 14.7x 13.8x 10.3x 12.1x 10.4x 7.9x 3.8x 3.3x 2.9x 2.5% -1.6% 1.8% 0.0% 0.7% -4.1% 7.3% -14.9% 1.75 Average 17.6x 20.3x 17.7x 14.9x 13.7x -1.1x 1.5x 1.8x 1.8x 12.1x 12.4x 12.7x 9.5x 9.3x 8.2x 2.3x 2.1x 1.9x 2.9% -1.1% -2.7% -4.6% 0.4% -2.3% 8.4% -13.3% 1.51

Source: Company data, Credit Suisse estimates

28 May28 2013

28 May 2013 CS Global Capital Goods Team Global Sector Head: Julian Mitchell Americas Analyst Email Phone # of Stocks US Aerospace Robert Spingarn [email protected] 212 538 1895 7 Canada Industrials Hamzah Mazari [email protected] 212 538 7983 6 Lat Am Industrials Bruno Savaris [email protected] 55 11 3701 6332 2 US Automotive Chris Ceraso [email protected] 212 538 4529 10 US Defense Robert Spingarn [email protected] 212 538 1895 9 US Small-cap Aerospace and Defense Julie Yates [email protected] 212.325.3706 5 US Electrical Equipment/Multi-Industry Julian Mitchell [email protected] 212 325 6668 18 US Engineering & Construction Jamie Cook [email protected] 212 538 6098 10 US Environmental Services Hamzah Mazari [email protected] 212 538 7983 6 US Fluid Management Hamzah Mazari [email protected] 212 538 7983 4 US Industrial Distribution Hamzah Mazari [email protected] 212 538 7983 5 US Machinery Jamie Cook [email protected] 212 538 6098 12 US Transports Allison Landry [email protected] 212 325 3716 3 US Transports Chris Ceraso [email protected] 212 538 4529 16 EMEA Analyst Email Phone # of Stocks European Aerospace & Defense Oliver Sleath [email protected] 44 20 7888 0275 3 European Automotive Erich Hauser [email protected] 44 20 7888 0765 14 European Electrical Simon Toennessen [email protected] 44 20 7888 0289 4 European Mechanical Andre Kukhnin [email protected] 44 20 7888 0350 12 European Wind Energy Mark Freshney [email protected] 44 20 7888 0887 2 MEA Industrials Vincent Resillot [email protected] 44 20 7883 5550 1 Swiss Mid-cap Engineering Patrick Laager [email protected] 41 44 334 60 76 12 UK Capital Goods Andre Kukhnin [email protected] 44 20 7888 0350 2 UK Capital Goods Jonathan Hurn [email protected] 44 20 7883 4532 13 Asia Analyst Email Phone # of Stocks China Industrial Machinery Gerald Wong [email protected] 65 6212 3037 1 China Power Equipment Edwin Pang [email protected] 852 2101 6406 3 China Power Equipment Yang Song [email protected] 852 2101 6550 3 China Power Equipment Vincent Chan [email protected] 852 2101 6568 4 China Rail Equipment Yang Song [email protected] 852 2101 6550 3 India Automotive Jatin Chawla [email protected] 91 22 6777 3719 4 India Capital Goods Amish Shah [email protected] 9122 6777 3743 5 Japan Automotive Issei Takahashi [email protected] 81 3 4550 7884 9 Japan Auto Related Consumables Shinji Kuroda [email protected] 81 3 4550 9994 4 Japan Factory Automation Shinji Kuroda [email protected] 81 3 4550 9994 6 Japan Conglomerates Shinji Kuroda [email protected] 81 3 4550 9994 1 Japan Conglomerates Hideyuki Maekawa [email protected] 813 4550 9723 2 Japan Infrastructure Machinery Shinji Kuroda [email protected] 81 3 4550 9994 6 Japan Machine Tools Shinji Kuroda [email protected] 81 3 4550 9994 3 Korea Engineering & Construction Minseok Sinn [email protected] 822 3707 8898 6 Korea Industrials / Shipbuilding / Autos Henry Kwon [email protected] 822 3707 3732 8 Singapore Capital Goods Gerald Wong [email protected] 65 6212 3037 2 Taiwan Industrials Pauline Chen [email protected] 886 2 2715 6323 1 Taiwan Automation Jerry Su [email protected] 886 2 2715 6361 3

i-Spy Global Industrials Weekly 52 28 May 2013 Global Calendars Americas

Exhibit 23: Company Events Exhibit 24: Macro Events Date Company Event Date Datapoint Period Region 5/28 Landstar System Inc Q2 2013 Guidance Call - Mid Quarter 5/28 Dallas Fed Mfg. Activity May-13 United States 5/30 Joy Global Inc Q2 2013 Earnings Release 5/31 Pall Corp Q3 2013 Earnings Release 5/28 Richmond Fed May-13 United States 5/30 Esterline Q2 2013 Earnings Release 5/31 Chicago PMI May-13 United States 6/3 Ford Motor Co May 2013 Sales and Revenue Call 6/3 ISM Mfg May-13 United States 6/3 General Motors Co May 2013 Sales and Revenue Call 6/3 ISM Prices Paid May-13 United States 6/3 SAIC Inc Q1 2014 Earnings Release 6/4 Total vehicle Sales May-13 United States 6/3 General Motors Co May 2013 Sales and Revenue Release 6/5 Fastenal Co May 2013 Sales and Revenue Release 6/5 Factory Orders Apr-13 United States 6/5 United Parcel Service Inc Roadshow - New York - Day 1 6/14 Industrial Production May-13 United States 6/6 Ford Motor Co Toronto Region Board of Trade Presents CEO, Dianne6/14 Craig, FordCapacity Canada Utilization May-13 United States 6/6 United Parcel Service Inc Roadshow - New York - Day 2 6/17 Empire Mfg Jun-13 United States 6/10 Echo Global Logistics Inc Investor Day 6/10 United Parcel Service Inc Roadshow - Day 1 6/17 NAHB Index Jun-13 United States 6/11 WW Grainger Inc May 2013 Sales and Revenue Call 6/18 Housing Starts May-13 United States 6/11 WW Grainger Inc May 2013 Sales and Revenue Release 6/18 Building Permits May-13 United States 6/12 United Parcel Service Inc Roadshow - Day 3 6/20 Philadelphia Fed Jun-13 United States 6/13 United Parcel Service Inc Roadshow - Day 4 6/20 Leading Indicators May-13 United States 6/17 United Parcel Service Inc Roadshow - London 6/18 Danaher Corp Analyst Meeting 6/20 Existing Home Sales May-13 United States 6/19 General Electric Co Analyst Meeting-GE Aviation & GECAS 6/24 Chicago Fed Nat Activity May-13 United States 6/19 FedEx Corp Q4 2013 Earnings Release 6/25 House Price Index Apr-13 United States 6/25 New Home Sales May-13 United States 6/25 Durable Goods Orders May-13 United States

Source: Bloomberg Source: Bloomberg EMEA

Exhibit 25: Company Events Exhibit 26: Macro Events Date Company Event EMEA Datapoint Period Region 5/27-30 Siemens AG Roadshow - Beijing 5/30 Euro-Zone Business Climate May-13 Euro-Zone 6/13 Halma PLC Y 2013 Earnings Release 5/30 Euro-Zone Economic Confidence May-13 Euro-Zone 5/30 Euro-Zone Industrial Confidence May-13 Euro-Zone 6/15 Demag Cranes AG Q1 2013 Earnings Release 6/3 Euro-Zone PMI Mfg (final) May-13 Euro-Zone 6/17 Volvo AB May 2013 Sales 6/3 Germany PMI Mfg (final) May-13 Germany 6/17 Safran SA Capital Markets Day 6/3 France PMI Mfg (final) May-13 France 6/17 Metso OYJ Q2 2013 Guidance Call 6/3 UK PMI Mfg May-13 UK 6/19 EADS Investor Meeting 6/4 UK PMI Construction May-13 UK 6/26 Zumtobel AG Y 2013 Earnings Release 6/6 Germany Factory Orders Apr-13 Germany 6/26 GEA Group AG Capital Markets Day-Oelde 6/6 UK New Car Registration May-13 UK 6/7 Germany IP Apr-13 Germany 6/10 France IP Apr-13 France 6/11 UK IP Apr-13 UK 6/12 Euro-Zone Industrial Production Apr-13 Euro-Zone 6/20 Euro-Zone PMI Mfg (flash) Jun-13 Euro-Zone 6/20 Germany PMI Mfg (flash) Jun-13 Germany 6/21 France PMI Mfg (flash) Jun-13 France 6/24 Germany IFO Jun-13 Germany Source: Bloomberg Source: Bloomberg

i-Spy Global Industrials Weekly 53 28 May 2013

Asia

Exhibit 27: Company Events Exhibit 28: Macro Events Date Company Event Date Datapoint Period Region 5/28 Havells India Ltd Y 2013 Earnings Release 5/31 Japan IP (Flash) Apr-13 Japan 5/29 BEML Ltd Y 2013 Earnings Release 6/1 China PMI Mfg May-13 China 5/29 Tata Motors Ltd Y 2013 Earnings Release 6/3 China HSBC Mfg PMI May-13 China 5/29 BGR Energy Systems Ltd Y 2013 Earnings Release 6/9 China IP May-13 China 6/9 China FAI May-13 China 5/30 Suzlon Energy Ltd Y 2013 Earnings Release 6/12 India IP Apr-13 India 5/30 Mahindra & Mahindra Y 2013 Earnings Release 6/12 Japan Machine Orders Apr-13 Japan 6/18 Japan IP (Final) Apr-13 Japan 6/20 China HSBC Mfg PMI (flash) Jun-13 China 6/26 Singapore IP May-13 Singapore Source: Bloomberg Source: Bloomberg

The author of this report wishes to acknowledge the contribution made by Sameer Thakur and Mehak Khanduja, employees of Crisil GRA, a division of CRISIL Limited, a third-party provider of offshore research services to Credit Suisse.

i-Spy Global Industrials Weekly 54 28 May 2013

Companies Mentioned (Price as of 27-May-2013) ABB (ABBN.VX, SFr21.37) ADT Corporation (ADT.N, $42.33) Amada (6113.T, ¥747) Boeing (BA.N, $100.0) Booz Allen Hamilton Holding (BAH.N, $18.65) CCR (CCRO3.SA, R$19.8) Caterpillar Inc. (CAT.N, $86.21) Chicago Bridge & Iron (CBI.N, $62.78) Crompton Greaves (CROM.BO, Rs94.05) Cummins Inc. (CMI.N, $116.31) Daihatsu Motor (7262.T, ¥2,088) Danaher Corporation (DHR.N, $62.1) Dover Corporation (DOV.N, $79.19) Eaton Corporation (ETN.N, $68.23) Ebara (6361.T, ¥532) Ecorodovias S.A. (ECOR3.SA, R$17.2) Emerson (EMR.N, $56.94) Expeditors International of Washington (EXPD.OQ, $39.33) Fanuc (6954.T, ¥15,320) Fastenal Co (FAST.OQ, $51.91) Fluor (FLR.N, $63.68) GKN (GKN.L, 296.4p) Gardner Denver, Inc. (GDI.N, $75.42) General Electric (GE.N, $23.53) Hitachi (6501.T, ¥679) Honeywell International Inc. (HON.N, $79.29) Hyundai Motor (005380.KS, W207,000) Ingersoll-Rand Plc (IR.N, $57.15) JGC Corporation (1963.T, ¥3,535) KBR Inc. (KBR.N, $35.18) Kawasaki Heavy Industries (7012.T, ¥342) Kennametal Inc. (KMT.N, $42.4) Keyence (6861.T, ¥30,000) Komatsu (6301.T, ¥2,595) Larsen & Toubro (LART.BO, Rs1465.4) Luxfer (LXFR.N, $16.95) Mahle Metal Leve (LEVE3.SA, R$27.05) Makita (6586.T, ¥5,490) Mitsubishi Electric (6503.T, ¥1,014) Mitsubishi Heavy Industries (7011.T, ¥658) NSK (6471.T, ¥938) NTN (6472.T, ¥319) Nabtesco Corporation (6268.T, ¥2,106) Nissan Motor (7201.T, ¥1,076) OHL Brasil (ARTR3.SA, R$21.81) Pentair, Inc. (PNR.N, $57.47) Philips (PHG.AS, €22.64) Regal Beloit (RBC.N, $64.86) Rexnord Corporation (RXN.N, $19.04) Rockwell Automation (ROK.N, $87.41) SPX (SPW.N, $77.81) Schneider (SCHN.PA, €61.29) Smiths Group (SMIN.L, 1355.0p) THK (6481.T, ¥2,251) Teco (1504.TW, NT$30.1) Textron (TXT.N, $27.51) Toyota Motor (7203.T, ¥5,920) Tyco International, Ltd (TYC.N, $34.27) United Technologies Corp (UTX.N, $95.04) Valmont Industries (VMI.N, $152.48) WW Grainger Inc. (GWW.N, $257.78) Wesco International (WCC.N, $73.97) Yaskawa Electric Corporation (6506.T, ¥1,247)

Disclosure Appendix

Important Global Disclosures I, Julian Mitchell, certify that (1) the views expressed in this report accurately reflect my personal views about all of the subject companies and securities and (2) no part of my compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report. The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

i-Spy Global Industrials Weekly 55 28 May 2013

As of December 10, 2012 Analysts’ stock rating are defined as follows: Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months. Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months. Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months. *Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ra tings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin American and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; Austr alia, New Zealand are, and prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the r elative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12-month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return relative to the average total return of the relevant country or regional benchmark. Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation: Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months. Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months. Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months. *An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cov er multiple sectors.

Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution Rating Versus universe (%) Of which banking clients (%) Outperform/Buy* 42% (53% banking clients) Neutral/Hold* 39% (47% banking clients) Underperform/Sell* 16% (39% banking clients) Restricted 3% *For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, an d Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdin gs, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein. Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research and analytics/disclaimer/managing_conflicts_disclaimer.html Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

Please refer to the firm's disclosure website at www.credit-suisse.com/researchdisclosures for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names The subject company (UTX.N, GDI.N, RXN.N, VMI.N, TYC.N, ADT.N, DOV.N, EMR.N, GE.N, DHR.N, HON.N, IR.N, KMT.N, RBC.N, TXT.N, SCHN.PA, 6501.T, ABBN.VX, KBR.N, FLR.N, CCRO3.SA, ECOR3.SA, CBI.N, EXPD.OQ, GWW.N, BAH.N, BA.N, WCC.N, CAT.N, SPW.N, SMIN.L, PHG.AS, 6301.T, 6861.T, 005380.KS, 7203.T, 7262.T, CROM.BO, LART.BO) currently is, or was during the 12-month period preceding the date of distribution of this report, a client of Credit Suisse. Credit Suisse provided investment banking services to the subject company (UTX.N, RXN.N, TYC.N, ADT.N, GE.N, RBC.N, SCHN.PA, ABBN.VX, KBR.N, FLR.N, CCRO3.SA, BAH.N, BA.N, WCC.N, SPW.N, PHG.AS, 7203.T, 7262.T) within the past 12 months.

i-Spy Global Industrials Weekly 56 28 May 2013

Credit Suisse provided non-investment banking services to the subject company (VMI.N, EMR.N, GE.N, HON.N, IR.N, TXT.N, 6501.T, ABBN.VX, CCRO3.SA, BA.N, SMIN.L, 6301.T, 6861.T, 005380.KS, 7203.T, LART.BO) within the past 12 months Credit Suisse has managed or co-managed a public offering of securities for the subject company (TYC.N, ADT.N, GE.N, RBC.N, CCRO3.SA, 7203.T, 7262.T) within the past 12 months. Credit Suisse has received investment banking related compensation from the subject company (UTX.N, RXN.N, TYC.N, ADT.N, GE.N, RBC.N, SCHN.PA, ABBN.VX, KBR.N, FLR.N, CCRO3.SA, BAH.N, BA.N, WCC.N, SPW.N, PHG.AS, 7203.T, 7262.T) within the past 12 months Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (UTX.N, GDI.N, RXN.N, VMI.N, TYC.N, ADT.N, DOV.N, EMR.N, GE.N, DHR.N, HON.N, KMT.N, RBC.N, 7011.T, 6503.T, SCHN.PA, 7012.T, 7201.T, 6501.T, ABBN.VX, KBR.N, FLR.N, CCRO3.SA, ECOR3.SA, CBI.N, CMI.N, GWW.N, BAH.N, BA.N, WCC.N, CAT.N, SPW.N, GKN.L, PHG.AS, 6301.T, 6586.T, 6361.T, 7203.T, 7262.T, CROM.BO, 1504.TW, LART.BO) within the next 3 months. Credit Suisse has received compensation for products and services other than investment banking services from the subject company (VMI.N, EMR.N, GE.N, HON.N, IR.N, TXT.N, 6501.T, ABBN.VX, CCRO3.SA, BA.N, SMIN.L, 6301.T, 6861.T, 005380.KS, 7203.T, LART.BO) within the past 12 months As of the date of this report, Credit Suisse makes a market in the following subject companies (UTX.N, GDI.N, RXN.N, LXFR.N, VMI.N, ROK.N, ETN.N, TYC.N, ADT.N, DOV.N, EMR.N, GE.N, DHR.N, HON.N, IR.N, KMT.N, RBC.N, TXT.N, 7201.T, KBR.N, FLR.N, CBI.N, CMI.N, EXPD.OQ, GWW.N, FAST.OQ, BAH.N, BA.N, PNR.N, WCC.N, CAT.N, SPW.N, 7203.T). As of the end of the preceding month, Credit Suisse beneficially own 1% or more of a class of common equity securities of (ABBN.VX, LEVE3.SA, PHG.AS, 1504.TW). Credit Suisse has a material conflict of interest with the subject company (UTX.N). Credit Suisse Securities (USA) LLC is acting as an advisor to Goodrich (GR) in a potential transaction with United Technologies Corp. Credit Suisse has a material conflict of interest with the subject company (RXN.N). Credit Suisse served as co-managing bookrunner of Rexnord's Initial Public Offering Credit Suisse has a material conflict of interest with the subject company (SPW.N). Credit Suisse Securities USA LLC acted as financial advisor to SPX Corp in the sale of its Service Solutions business to Robert Bosch GmbBH. Credit Suisse has a material conflict of interest with the subject company (PHG.AS). Credit Suisse is financial advisor to Philips Electronics NV in the sale of its Lifestyle Entertainment business to Funai Electric Co. Important Regional Disclosures Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report. The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (UTX.N, GDI.N, RXN.N, LXFR.N, VMI.N, ROK.N, ETN.N, TYC.N, ADT.N, DOV.N, EMR.N, GE.N, DHR.N, HON.N, IR.N, KMT.N, RBC.N, TXT.N, 7011.T, 6503.T, SCHN.PA, 7012.T, 7201.T, 6501.T, 6954.T, 6481.T, ABBN.VX, LEVE3.SA, KBR.N, FLR.N, ARTR3.SA, CCRO3.SA, ECOR3.SA, CBI.N, CMI.N, EXPD.OQ, GWW.N, FAST.OQ, BAH.N, BA.N, PNR.N, WCC.N, CAT.N, SPW.N, SMIN.L, GKN.L, PHG.AS, 6268.T, 6301.T, 6113.T, 6586.T, 6861.T, 6472.T, 1963.T, 6361.T, 6471.T, 005380.KS, 7203.T, 7262.T, CROM.BO, 6506.T, 1504.TW, LART.BO) within the past 12 months Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares. Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report. For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml. Credit Suisse Securities (Europe) Limited (Credit Suisse) acts as broker to (SMIN.L). The following disclosed European company/ies have estimates that comply with IFRS: (SCHN.PA, 7201.T, ABBN.VX, SMIN.L, GKN.L, PHG.AS). As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report. Principal is not guaranteed in the case of equities because equity prices are variable. Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that. Important Credit Suisse HOLT Disclosures With respect to the analysis in this report based on the Credit Suisse HOLT methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the Credit Suisse HOLT methodology and (2) no part of the Firm’s compensation was, is, or will be directly related to the specific views disclosed in this report. The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently applied to all the companies included in its database. Third-part data (including consensus earnings estimates) are systematically translated into a number of default algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by

i-Spy Global Industrials Weekly 57 28 May 2013 outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. The adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur. Additional information about the Credit Suisse HOLT methodology is available on request. The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variable may also be adjusted to produce alternative warranted prices, any of which could occur. CFROI®, HOLT, HOLTfolio, ValueSearch, AggreGator, Signal Flag and “Powered by HOLT” are trademarks or service marks or registered trademarks or registered service marks of Credit Suisse or its affiliates in the United States and other countries. HOLT is a corporate performance and valuation advisory service of Credit Suisse.

For Credit Suisse disclosure information on other companies mentioned in this report, please visit the website at www.credit- suisse.com/researchdisclosures or call +1 (877) 291-2683.

i-Spy Global Industrials Weekly 58 28 May 2013

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