Landsbanki | Kepler Week 27: 30 June– 4 July 2008

Landsbanki Kepler Research Online Not to be missed! To access these reports and recent archives of all Landsbanki Kepler research, register at our website at; www.landsbanki-kepler.com 24 research reports published last week! For more information, email us at: [email protected]

COMPANY / SECTOR DATE TITLE / FOCUS ACTION RATING ANALYST Orpea 30 June 2008 No rush to jump in Downgrade Reduce Frederic The group continues to strongly develop its beds pipeline within a Capdeville +33 1 5365 3645 sustained underlying , which makes us slightly less optimistic [email protected] about its EBIT margin. Given limited short-term upside, we set a Reduce rating. Food & beverages 30 June 2008 Crisis? What crisis? Update Jon Cox +41 43 333 6607 sketchbook After bingeing and growing addicted to cheap food for years, it is no [email protected] surprise to see toxic shock withdrawal symptoms as prices rise. We look at causes and effects and believe the only solution is a second green (genetically modified) revolution. Spanish ideas 30 June 2008 Keep it simple! Update Spanish Team +34 91 436 5169 for summer A combination of logic and simplicity is the best antidote to [email protected] uncertainty. Rather than aiming to be original or different, we want to identify the most appealing stocks assuming limited risk. Accordingly, based on five filters, we have selected two groups of favourite stocks. Risk arbitrage 30 June 2008 General comments Update Muriel Helvadjian +33 1 53 65 35 62 weekly Simplified offer on Clarins. Volkswagen spread at -50%. Rallye Casino [email protected] discount to NAV widening to 26%.

Landsbanki Research Group: Landsbanki | Kepler: Continental Landsbanki: and Scandinavia Merrion | Landsbanki: Ireland Landsbanki Securities: UK

AMSTERDAM • CORK • • • • • HELSINKI • • • • NEW YORK • • REYKJAVÍK • ZÜRICH

COMPANY / SECTOR DATE TITLE / FOCUS ACTION RATING ANALYST Rautaruukki 1 July 2008 Benefiting from strong sector momentum Upgrade Buy Artem Beletski +358 9 6817 5204 Steel production cost inflation in 2008 is offset by higher steel [email protected] prices. Following skyrocketing prices, we clearly raise our estimates and upgrade Rautaruukki from Reduce to Buy, upping our target price from EUR28 to EUR33.

Aragon 1 July 2008 Sells 15% stake in biw Update Buy Robert Hörberg By selling a 15% stake in its banking subsidiary, Aragon will realise a +49 69 7569 6121 [email protected] capital gain and deconsolidate biw. Future participation will be at equity level. Fewer legal obligations and a higher equity ratio sweeten the deal. Mondadori 1 July 2008 Out of fashion Update Reduce Fabio Ianelli The magazine outlook has deteriorated, visibility is scarce, shortand +39 02 855 07 218 [email protected] long-term management commitment is unclear, the dividend policy is unsustainable and there is a total lack of catalysts. Accordingly, we cut our target price from EUR5.50 to EUR3.90 per share and reiterate our Reduce rating.

Thales 1 July 2008 Buy rating maintained, target price cut Update Buy Milène Kerner +33 1 5365 3610 We have cut our target price from EUR49 to EUR46 to reflect forex [email protected] fluctuation (mainly GBP) and some margin pressure in the security division caused by difficulties with two ticketing and access control contracts. European 1 July 2008 Harder faster Update Ingo Becker Coal has shot above USD200/t. With an upward-sloping carbon +49 69 7569 6295 utilities [email protected] curve, that has pushed long-term power to over EUR90/MWh. The power markets’ breakneck pace has most stocks trading well short of fundamentals. Picking those which reflect this the least is safest. Widely misunderstood RWE is our clear choice here.

Landsbanki Research Group: Landsbanki | Kepler: Continental Europe Landsbanki: Iceland and Scandinavia Merrion | Landsbanki: Ireland Landsbanki Securities: UK

AMSTERDAM • CORK • DUBLIN • EDINBURGH • FRANKFURT • GENEVA • HELSINKI • LONDON • MADRID • MILAN • NEW YORK • PARIS • REYKJAVÍK • ZÜRICH Landsbanki | Kepler 3

COMPANY / SECTOR DATE TITLE / FOCUS ACTION RATING ANALYST RWE 1 July 2008 Being RWE Update Buy Ingo Becker RWE has been left behind, despite rocketing fundamentals. Investors appear +49 69 7569 6295 [email protected] wary of RWE’s cost exposure (fuel, carbon, capacity). There is no need to. The power market is running well above the breakeven for RWE. Colruyt 2 July 2008 Lucrative discounter Initiation of Buy Ton Van Ooijen coverage +31 20 563 2384 Colruyt is the hidden gem in European food retail, with predictable (and [email protected] stable) profit growth driven by strong sales growth and high margins. Concerns about a Belgian price war are overdone. We initiate coverage with a EUR192 target price. With 16% upside, our first rating is Buy. Saipem 2 July 2008 Order bonanza Update Buy Roberto Mascarello +39 02 855 07 217 Last week Saipem announced new contracts worth more than EUR2.3bn, [email protected] nearly one-quarter of the intake we expect for the whole year. The group is definitely on track to reach another record backlog at the end of the year. Fortum 3 July 2008 Hydro logic Update Buy Ingo Becker +49 69 7569 6295

Fears in the market of hydro-induced low spot prices were unfounded. They [email protected] always are, as H2 accounts will show. With more than 60% of 2008 production sold (at mid-EUR40/MWh levels), 2008 relevance is vanishing. K + S 3 July 2008 Consensus must go up Update Buy Lutz Grueten +49 69 7569 6119

While 2008 forecasts seem to be more realistic now, 2009 consensus [email protected] estimates remain ridiculously low and we expect an increase of at least 50% over the summer. Buy rating and target price maintained. Sperian 3 July 2008 The other Buy Update Buy François Colli +33 1 53 653 612

Protection Together with Faiveley, Sperian is our other Buy rating in our French industrial franç[email protected] small caps universe, for pretty much the same reasons, namely reasonable visibility and limited sensitivity to the cycle. In addition, Sperian trades on a low valuation (PE, EV/EBITDA) and offers a double-digit free cash flow yield.

This report is subject to important disclosures and disclaimers which can be found at the end of this report and which form an integral part of it. Landsbanki | Kepler 4

COMPANY / SECTOR DATE TITLE / FOCUS ACTION RATING ANALYST Ubisoft 3 July 2008 Step change Upgrade Buy Derric Marcon +33 1 53 653 635

We believe Ubisoft has scope to beat its annual guidance, due to: 1) gamers’ [email protected] appetite for new games; 2) the expected success of the Wii balance board; 3) the solid performance of casual games; 4) the “AAA” games due in Q3. Q1 sales are not a major catalyst, but may confirm casual games momentum despite tougher competition. Oberthur 3 July 2008 Limited short-term catalysts Update Hold Sébastien Sztabowicz +33 1 53 653 510

Technologies We had a private meeting with the CFO on Tuesday. Business trends look good [email protected] in Q2 and the XPonCard acquisition appears to be going according to plan. Valuation looks reasonable but there are limited short-term catalysts. Hold. Abertis 4 July 2008 Take advantage of recent sell-off Update Buy Victor Acitores +34 91 436 51 75

The glass could be seen as half empty (traffic, bond yields, credit crunch) or [email protected] half full (tariffs, implicit IRR). Although volatility looks set to continue, we believe the market is discounting a pessimistic macro scenario. Temenos 4 July 2008 Financial Objects acquisition holds a lot of upside Update Buy Roger Steiner +41 43 333 6610 Strong mid-term synergies potential leads us to view the acquisition of [email protected] Financial Objects (FO) as highly earnings-enhancing. We still like Temenos’ investment case, with plenty of positive catalysts into H2: potential to raise guidance post Q2, details on FO synergies and a first Metavante contract. Buy rating reiterated. Outokumpu 4 July 2008 Overreaction on deteriorated sentiment Update Buy Artem Beletski +358 9 6817 5204

Base prices have declined by EUR100-150/t from their peaks and Q3 [email protected] ferrochrome contract price settlement was disappointing. The recent 40% correction in the share price is excessive; we upgrade from Hold to Buy. L’Espresso 4 July 2008 Looking for the bottom Upgrade Reduce Fabio Ianelli +39 02 855 07 218

Although the stock might have reached its fundamental valuation bottom, [email protected] momentum and sentiment might drag the share price even lower. We maintain a Reduce rating and cut our target price from EUR2.60 to EUR1.60.

This report is subject to important disclosures and disclaimers which can be found at the end of this report and which form an integral part of it. Landsbanki | Kepler 5

COMPANY / SECTOR DATE TITLE / FOCUS ACTION RATING ANALYST Finnish paper 4 July 2008 Market update and Q2 preview – upgrading Stora Enso Update Mikael Doepel +358 9 6817 5205 industry We have lowered our earnings estimates for the Finnish paper producers, as [email protected] fundamentals continue to weaken. Nevertheless, the recent heavy drops in the share prices are starting to give more valuation support than before, prompting us to upgrade Stora Enso and take a more neutral stance on the Finnish paper sector. German 4 June 2008 Our scenarios for upcoming transactions Update Dirk Becker +49 69 7569 6119 consolidation Speculation on possible M&A transactions among German is heating [email protected] up. We believe Commerzbank will strike a deal with Allianz to buy Dresdner Bank. Deutsche Bank will buy Citibank Germany. Nobody will buy Postbank. We maintain a Reduce rating on all three banks. Bénéteau 4 June 2008 A day with management Update Buy Laetitia Delaye The industrial director of O’Hara and the home business and the CFO +33 1 53 65 36 68 [email protected] confirmed that 2008-09 should benefit from compelling cost synergy gains in boats and mobile homes (estimated at EUR2- 3m), limiting the risk of an earnings squeeze should the boat market weaken. We see 12% downside in a worst-case scenario.

This report is subject to important disclosures and disclaimers which can be found at the end of this report and which form an integral part of it. Landsbanki | Kepler 6

Legal Information

The information contained in this publication was obtained from various sources believed to be reliable, but has not been independently verified by Landsbanki or its affiliate(s)*. Landsbanki or its affiliate(s)* does not warrant the completeness or accuracy of such information and does not accept any liability with respect to the accuracy or completeness of such information, except to the extent required by applicable law.

This publication is a brief summary and does not purport to contain all available information on the subjects covered. Further information may be available on request. This report may not be reproduced for further publication unless the source is quoted.

This publication is for information purposes only and shall not be construed as an offer or solicitation for the subscription or purchase or sale of any securities, or as an invitation, inducement or intermediation for the sale, subscription or purchase of any securities, or for engaging in any other transaction. This publication is not for private individuals.

Any opinions, projections, forecasts or estimates in this report are those of the author only, who has acted with a high degree of expertise. They reflect only the current views of the author at the date of this report and are subject to change without notice. Landsbanki or its affiliate(s)* has no obligation to update, modify or amend this publication or to otherwise notify a reader or recipient of this publication in the event that any matter, opinion, projection, forecast or estimate contained herein, changes or subsequently becomes inaccurate, or if research on the subject company is withdrawn. The analysis, opinions, projections, forecasts and estimates expressed in this report were in no way affected or influenced by the issuer. The author of this publication benefits financially from the overall success of Landsbanki or its affiliate(s)*.

The investments referred to in this publication may not be suitable for all recipients. Recipients are urged to base their investment decisions upon their own appropriate investigations that they deem necessary. Any loss or other consequence arising from the use of the material contained in this publication shall be the sole and exclusive responsibility of the investor and Landsbanki or its affiliate(s)* accepts no liability for any such loss or consequence. In the event of any doubt about any investment, recipients should contact their own investment, legal and/or tax advisers to seek advice regarding the appropriateness of investing. Some of the investments mentioned in this publication may not be readily liquid investments. Consequently it may be difficult to sell or realize such investments. The past is not necessarily a guide to future performance of an investment. The value of investments and the income derived from them may fall as well as rise and investors may not get back the amount invested. Some investments discussed in this publication may have a high level of volatility. High volatility investments may experience sudden and large falls in their value which may cause losses. International investing includes risks related to political and economic uncertainties of foreign countries, as well as currency risk.

To the extent permitted by applicable law, no liability whatsoever is accepted for any direct or consequential loss, damages, costs or prejudices whatsoever arising from the use of this publication or its contents.

The Landsbanki Group of Companies have written procedures designed to identify and manage potential conflicts of interest that arise in connection with its research business. The Group’s research analysts and other staff involved in issuing and disseminating research reports operate independently of the Group’s Investment Banking business. Chinese Wall procedures are in place between the research analysts and staff involved in securities trading for the account of Landsbanki Group companies or clients to ensure that price sensitive information is handled according to applicable laws and regulations.

*: affiliates: Landsbanki Kepler, Landsbanki Securities (UK) Limited, Merrion Stockbrokers Limited.

United Kingdom: This document is exempt from the general restriction in section 21 of the and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is being distributed in the United Kingdom only to persons of a kind described in Articles 19(5) (Investment professionals) and 49(2) (High net worth companies, unincorporated associations etc) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (as amended). It is not intended to be distributed or passed on, directly or indirectly, to any other class of persons. Any investment to which this document relates is available only to such persons, and other classes of person should not rely on this document. For the purpose of UK regulation, Landsbanki Securities (UK) Limited produces non independent research. This document has been produced under the terms of the Landsbanki Securities (UK) Limited research policy which may be found on the website.

United States: This research report is distributed in the United States by Kepler Equities Inc. and is intended for distribution in the United States to only "major U.S. institutional investors" as defined in Rule 15a-6 promulgated under the U.S. Securities Exchange Act of 1934, as amended. Landsbanki Kepler is a broker-dealer registered with the Comité des Etablissements de Crédit et des Entreprises d’Investissements in France, and is not registered with the U.S Securities and Exchange Commission (SEC). U.S. persons seeking more information about any of the securities discussed in this report, or wishing to execute a transaction in these securities, should contact Kepler Equities Inc. (KEI), 600 Lexington Avenue, New York, NY 10022, phone (212) 710-7600. KEI is a broker-dealer registered with the SEC and is a NASD member firm. Nothing herein excludes or restricts any duty or liability to a customer that KEI has under applicable law. Investment products provided by or through KEI are not FDIC insured, may lose value and are not guaranteed by Landsbanki Kepler. Investing in non-U.S. securities may entail certain risks. The securities of non-U.S. issuers may not be registered with or subject to SEC reporting and other requirements. The information available about non-U.S. companies may be limited, and non-U.S. companies are generally not subject to the same uniform auditing and reporting standards as U.S. companies. Securities of some non-U.S. companies may not be as liquid as securities of comparable U.S. companies.

France: This publication is issued and distributed in accordance with art. L 544-1 and seq of the Code Monétaire et Financier and with the articles 321-122 to 321-138 of the General Regulations of the Autorité des Marchés Financiers (AMF).

Italy: Information is for institutional clients only as defined by art. 31 of CONSOB reg. 11522/98. Reports on companies listed on the Italian exchange are approved and distributed to over 500 clients in accordance with art. 69 of CONSOB Regulation 11971/1999 for enforcement of the Consolidation Act on financial brokerage (legislative decree 24/2/1998). According to this article Landsbanki Kepler, branch of Milano warns on potential specific interests in securities mentioned. Equities discussed are covered on a continuous basis with regular reports at results release. Reports are released on date shown on cover and distributed via print and e-mail. Landsbanki Kepler, branch of Milano analysts are not affiliated with any professional groups or organizations. All estimates are by Landsbanki Kepler unless otherwise stated.

Spain: Reports on Spanish companies are issued and distributed by Landsbanki Kepler, branch of Madrid, registered in Spain by the Comisión Nacional del Mercado de Valores (CNMV) in the foreign investments firms registry (member of the Madrid exchange). Reports and any supplemental documentation or information have not been filled with the CNMV. Neither verification nor authorization or compliance revision by the CNMV regarding this document and related documentation or information has been made. Switzerland: This publication is intended to be distributed to professional investors in circumstances such that there is no public offer. This publication does not constitute a prospectus within the meaning of Articles 652a and 1156 of the Swiss Code of Obligations.

Canada: The information provided in this publication is not intended to be distributed or circulated in any manner in Canada and therefore should not be construed as any kind of financial recommendation or advice provided within the meaning of Canadian securities laws.

Other countries: Laws and regulations of other countries may also restrict the distribution of this report. Persons in possession of this document should inform themselves about possible legal restrictions and observe them accordingly

This report is subject to important disclosures and disclaimers which can be found at the end of this report and which form an integral part of it. Landsbanki | Kepler

About Landsbanki With solid foundations and 120 years of history as the main provider of financial services for individuals and corporations in Iceland, Landsbanki now operates in all of Europe's leading financial centres. Our focus is on providing quality service to medium and small sized international companies. We offer corporate advisory services, debt facilities including structured and asset-backed lending, as well as brokerage and investment advice to a broad base of international institutional investors in the UK and Continental Europe. Our research department is among the most comprehensive in Europe, including some 90 analysts covering more than 800 European stocks locally. Landsbanki also provides and services, as well as offering UK savers a consistently competitive rate on its Icesave online deposit account. Having short communication channels, a proactive approach to business and an entrepreneurial culture, provides Landsbanki with the means to meet the needs of its clients and help them succeed.

Landsbanki Research Network

Amsterdam Edinburgh Helsinki Paris Reykjavik Landsbanki Kepler Nederland Landsbanki Securities (UK) Landsbanki Landsbanki Kepler France Landsbanki Islands hf. ITO Tower, 12th floor Limited Kluuvikatu 3, 7th floor 112 Avenue Kléber Hafnarstraeti 5 Gustav Mahlerplein 78 Level 5 00100 Helsinki 75016 Paris 101 Reykjavík 1082 MA Amsterdam Napier House Telephone +358 9 681750 Telephone +33 1 5365 3500 Telephone: +354 410 4000 Telephone +31 20 563 2365 27 Thistle Street Edinburgh, EH2 185 London Milan Cork Telephone +44 20 7426 9000 Landsbanki Securities (UK) Landsbanki Kepler Italia Landsbanki Kepler Switzerland Merrion Landsbanki Limited Corso Europa 2 Stadelhoferstrasse 18/22 Trafalgar House Frankfurt Beaufort House 20122 Milano Postfach Montenotte, Cork Landsbanki Kepler Germany 15 St Botolph Street Telephone +39 02 855 071 8024 Zürich Telephone: +353 21 455 1950 Taunusanlage 19 London EC3A 7QR Telephone +41 43 333 6666 60325 Frankfurt Telephone +44 20 7866 5000 New York Dublin Telephone +49 69 756 960 Kepler Equities Inc. Merrion Landsbanki Madrid 600 Lexington Avenue Block C Geneva Landsbanki Kepler España 10022 New York, NY USA The Sweepstakes Centre Kepler Equities (Suisse) SA Alcalá 95 Telephone +1 212 710 7600 Ballsbridge, Dublin 4 Chemin du Joran 10 28009 Madrid Telephone +353 1 240 4100 1260 Nyon Telephone +34 91 436 5100 Switzerland

Telephone +41 22 361 5151 Websites

Landsbanki Kepler Landsbanki Merrion Landsbanki Landsbanki Securities (UK) www.landsbanki-kepler.com www.landsbanki.com www.merrion-capital.com www.landsbanki.co.uk