TeamViewer AG | Technology | MCap EUR 8,879.3m

19 March 2021 UPDATE

ManU shirt partnership HOLD (BUY) Target price EUR 40.00 (55.00) Current price EUR 44.16 triggers profit warning; PT Up/downside -9.4%

and rating down

What’s it all about?

TeamViewer (TMV), issued a hefty profit warning wiping out EUR 1bn in equity value after announcing that it has signed a shirt partnership with premier league giant Manchester United. This marketing stunt will trigger – on average 5pp lower adj. EBITDA margins or roughly EUR 30-40m p.a. lower EBITDA in the short to mid-term. The company expects a significant improvement of its global brand positioning and with it accelerated marketing of its broadened use case portfolio, ultimately driving the company’s top and bottom-line growth. Similar to the market reaction, we view the new MAIN AUTHOR partnership critical with suboptimal cost/benefit ratios. We therefore cut our EPS Thomas Wissler forecasts by – on average 10-15%, and downgrade the stock to HOLD (from Buy) with [email protected] new PT of EUR 40.00 (old EUR 55.00). +49 40 309 293-58

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TeamViewer AG

Germany | Technology | MCap EUR 8,879.3m | EV EUR 9,313.6m

MAIN AUTHOR HOLD (BUY) Target price EUR 40.00 (55.00) Current price EUR 44.16 Thomas Wissler Up/downside -9.4% [email protected] +49 40 309 293-58

ManU shirt partnership triggers pw; PT and rating down

TeamViewer (TMV), announced a new marketing initiative with a shirt partnership with premier league football club Manchester United. The company has signed a five-year agreement to become Manchester United's new principal shirt partner. With this agreement as well as additional strategic global marketing partnerships, TeamViewer intents to significantly increase its global brand positioning, ultimately triggering accelerated top- and bottom-line growth. Source: Company data, AlsterResearch According to the press release, “the partnership will introduce Manchester United and its 1.1 billion fans and followers around the world to exciting new technology drawing High/low 52 weeks 54.86 / 24.85 on TeamViewer's expertise in remote connectivity services. TeamViewer will enable Price/Book Ratio 36.9x Manchester United to bring its fans even closer to the team they love through ground- breaking AR solutions and remote access to the Theatre of Dreams.” Ticker / Symbols ISIN DE000A2YN900 Guidance: Due to the resulting significant increase in marketing expenditure, WKN A2YN90 TeamViewer revises its adjusted EBITDA margin guidance for the fiscal year 2021 to Bloomberg TMV:GR 49 - 51% (old 55-57%) of billings and projects the adjusted EBITDA margin to remain around 50% over the medium term. In absolute terms, a c. 5pp lower adj. EBITDA Changes in estimates margin translate into EUR 30-40m lower EBITDA (eAR) and on EPS level the impact is Sales EBIT EPS forecasted to be in the 10-15% range (2021-2023E). 2021 old 00.0 00.0 00.0 ∆ – – –

2022 old 00.0 00.0 00.0 Our take: Similar to today’s market reaction, which whipped out more than EUR 1bn in ∆ – – – equity value, we are sceptical that this increased marketing investment has been 2023 old 00.0 00.0 00.0 wisely allocated as we see a suboptimal cost/benefit ratio. Part of TMV’s current ∆ – – – valuation has been driven by the fast growing and scalable . Whilst the busines model per se remains intact and M&A fuelled growth further complements Key share data TMV’s product offering, investors might (rightly?) question the company’s short- to Number of shares: (in m pcs) 201.1 mid-term scalable earnings capability. With adjusted estimates, we are downgrading Book value per share: (in €) 1.20 the stock from BUY to HOLD and a new PT of EUR 40.00 (old EUR 55.00) based on our Ø trading volume: (12 months) 600,000 DCF and adj. FCF yield.

TeamViewer AG 2018 2019 2020 2021E 2022E 2023E Major shareholders Sales 258.2 390.2 455.6 542.4 696.2 880.2 Permira Advisers LLP 20.0% Growth yoy 86.4% 51.1% 16.8% 19.1% 28.3% 26.4% Capital Research 5.0% EBITDA 140.6 195.7 205.1 272.4 352.4 439.1 DWS Investment 3.1% EBIT 107.1 153.0 164.0 207.2 287.5 371.2 Free Float 71.9% Net profit -12.4 103.9 103.0 121.9 181.5 254.1 Net debt (net cash) 743.9 545.6 434.3 288.1 34.0 -294.5 Company description Net debt/EBITDA 5.3x 2.8x 2.1x 1.1x 0.1x -0.7x TeamViewer operates a leading global EPS recurring -0.06 0.52 0.51 0.61 0.90 1.26 connectivity platform. It provides DPS 0.00 0.00 0.00 0.00 0.00 0.00 solutions for remote control, Dividend yield 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% management and monitoring of Gross profit margin 81.9% 87.1% 85.9% 88.0% 88.5% 87.4% computers, laptop, mobile devices, EBITDA margin 54.5% 50.2% 45.0% 50.2% 50.6% 49.9% tablets and devices using the internet of EBIT margin 41.5% 39.2% 36.0% 38.2% 41.3% 42.2% things (IoT). TeamViewer’s connectivity ROCE 15.6% 21.5% 20.6% 27.2% 35.8% 43.2% platform is cloud-based and highly EV/EBITDA 68.4x 48.2x 45.4x 33.7x 25.3x 19.5x secure and scalable. It facilitates online EV/EBIT 89.8x 61.6x 56.8x 44.2x 31.0x 23.1x collaboration and solves businesses’ PER -711.5x 85.0x 86.2x 72.8x 48.9x 34.9x and individuals’ need for remote FCF yield 1.2% 1.5% 2.1% 2.1% 3.4% 4.3% desktop support. Source: Company data, AlsterResearch

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Quarterly table

P&L data 1Q2019 2Q2019 3Q2019 4Q2019 1Q2020 2Q2020 3Q2020 4Q2020 Sales 86.7 94.5 102.0 106.9 102.7 114.7 117.2 121.0 yoy growth in % na na na na 18.5% 21.4% 14.9% 13.2% Gross profit 74.9 82.6 89.0 93.0 88.7 98.5 100.8 103.5 Gross margin in % 86.3% 87.4% 87.3% 87.0% 86.3% 85.9% 86.0% 85.6% EBITDA 52.2 55.9 27.1 55.4 46.7 54.5 54.1 50 EBITDA margin in % 60.2% 59.2% 26.6% 51.8% 45.5% 47.6% 46.1% 41.2% EBIT 43.4 46.8 18.0 46.1 37.1 44.8 43.8 38 EBIT margin in % 50.1% 49.5% 17.6% 43.1% 36.1% 39.1% 37.3% 31.7% EBT 39.7 30.1 -21.0 46.1 21.5 48.2 54.4 46.3 taxes paid 13.1 10.9 -34.0 1.3 9.3 17.9 22.8 17.3 tax rate in % 33.1% 36.2% 161.9% 2.8% 43.5% 37.1% 41.9% 37.4% net profit 26.5 19.2 14.0 44.9 12.1 30.3 31.6 28.9 yoy growth in % na na na na -54.3% 58.2% 125.9% -35.5% EPS 0.13 0.10 0.07 0.22 0.06 0.15 0.16 0.14 Source: Company data; AlsterResearch

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SWOT

Strengths

• Strong reputation for technology (DevOps and IT professionals) • Extensive market footprint to execute enterprise strategy • Increase in customer segments to target • Geographic expansion towards Asia

Weaknesses

• Competitors with longer trajectory and presence • Subject to fluctuation in services sector

Opportunities

• Developing roadmap based on requirements of existing client base • Untapped opportunity in clients using technology for addressing enterprise use cases (remote working) • Further geographic expansion • Heterogenous device landscape further the need for connectivity solutions

Threats • Competitors longer trajectory targeting • Competitors' acquisition of smaller competing businesses resulting in price pressure • Migration-problems while switching towards new (more integrated) applications

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Financials in six charts

Sales vs. EBITDA margin development EPS, DPS in EUR & yoy EPS growth

1.000 60% 1,60 50% 900 1,40 45% 50% 800 1,20 40% 700 40% 1,00 35% 600 0,80 30% 500 30% 0,60 25% 400 0,40 20% 20% 300 0,20 15% 200 10% 0,00 10% 100 -0,20 17 18 19 20 21E 22E 23E 5% 0 0% -0,40 0% 17 18 19 20 21E 22E 23E -0,60 -5% l s (€ ) EBITDA margin (%) EPS DPS EPS growth

ROCE vs. WACC (pre tax) Net debt and net debt/EBITDA

50% 1000 16,00x 45% 800 14,00x 40% 12,00x 35% 600 10,00x 30% 400 25% 8,00x 200 20% 6,00x 15% 0 17 18 19 20 21E 22E 23E 4,00x 10% -200 2,00x 5% -400 0,00x 0% 17 18 19 20 21E 22E 23E -600 -2,00x ROCE WACC pre tax N t d bt (€ ) Net debt / EBITDA (x)

Capex & chg in w/c requirements in EURm Free Cash Flow in EURm

100 400

80 350 60 300 40

20 250

0 200 17 18 19 20 21E 22E 23E -20 150 -40

-60 100

-80 50 -100 0 Capex Change in w/c 17 18 19 20 21E 22E 23E

Source: Company data; AlsterResearch

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Financials

Profit and loss (EUR m) 2018 2019 2020 2021E 2022E 2023E Sales 258.2 390.2 455.6 542.4 696.2 880.2 Sales growth 86.4% 51.1% 16.8% 19.1% 28.3% 26.4% Cost of sales 46.6 50.2 64.1 65.1 80.1 111.1 Gross profit 211.5 340.0 391.5 477.3 616.1 769.1 SG&A expenses 79.9 149.0 185.7 222.4 271.5 325.7 Research and development 21.1 33.7 46.6 53.2 62.7 79.2 Other operating expenses (income) -1.4 -7.3 -4.8 -5.4 -5.6 -7.0 EBITDA 140.6 195.7 205.1 272.4 352.4 439.1 Depreciation 4.9 11.5 41.1 14.2 19.6 26.2 EBITA 135.7 184.2 164.0 258.3 332.7 412.9 Amortisation of goodwill and intangible assets 28.6 31.2 0.0 51.1 45.2 41.7 EBIT 107.1 153.0 164.0 207.2 287.5 371.2 Financial result -102.6 -57.9 6.3 -5.7 0.6 8.0 Recurring pretax income from continuing operations 4.5 95.1 170.4 201.5 288.1 379.2 Extraordinary income/loss 0.0 0.0 0.0 0.0 0.0 0.0 Earnings before taxes 4.5 95.1 170.4 201.5 288.1 379.2 Taxes 16.9 -8.7 67.4 79.6 106.6 125.1 Net income from continuing operations -12.4 103.9 103.0 121.9 181.5 254.1 Result from discontinued operations (net of tax) 0.0 0.0 0.0 0.0 0.0 0.0 Net income -12.4 103.9 103.0 121.9 181.5 254.1 Minority interest 0.0 0.0 0.0 0.0 0.0 0.0 Net profit (reported) -12.4 103.9 103.0 121.9 181.5 254.1 Average number of shares 200.00 200.00 201.07 201.07 201.07 201.07 EPS reported -0.06 0.52 0.51 0.61 0.90 1.26

Profit and loss (common size) 2018 2019 2020 2021E 2022E 2023E Sales 100% 100% 100% 100% 100% 100% Cost of sales 18% 13% 14% 12% 12% 13% Gross profit 82% 87% 86% 88% 88% 87% SG&A expenses 31% 38% 41% 41% 39% 37% Research and development 8% 9% 10% 10% 9% 9% Other operating expenses (income) -1% -2% -1% -1% -1% -1% EBITDA 54% 50% 45% 50% 51% 50% Depreciation 2% 3% 9% 3% 3% 3% EBITA 53% 47% 36% 48% 48% 47% Amortisation of goodwill and intangible assets 11% 8% 0% 9% 6% 5% EBIT 41% 39% 36% 38% 41% 42% Financial result -40% -15% 1% -1% 0% 1% Recurring pretax income from continuing operations 2% 24% 37% 37% 41% 43% Extraordinary income/loss 0% 0% 0% 0% 0% 0% Earnings before taxes 2% 24% 37% 37% 41% 43% Taxes 7% -2% 15% 15% 15% 14% Net income from continuing operations -5% 27% 23% 22% 26% 29% Result from discontinued operations (net of tax) 0% 0% 0% 0% 0% 0% Net income -5% 27% 23% 22% 26% 29% Minority interest 0% 0% 0% 0% 0% 0% Net profit (reported) -5% 27% 23% 22% 26% 29% Source: Company data; AlsterResearch

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Balance sheet (EUR m) 2018 2019 2020 2021E 2022E 2023E Intangible assets (exl. Goodwill) 252.6 235.8 255.3 226.0 208.6 202.1 Goodwill 584.3 590.4 646.8 646.8 646.8 646.8 Property. plant and equipment 2.2 26.5 40.5 56.1 74.8 97.0 Financial assets 0.7 12.4 5.5 5.5 5.5 5.5 FIXED ASSETS 839.9 865.2 948.1 934.4 935.7 951.4 Inventories 0.0 0.0 0.0 0.0 0.0 0.0 Accounts receivable 16.2 11.8 19.7 23.4 30.1 38.0 Other current assets 1.1 7.7 7.6 7.6 7.6 7.6 Liquid assets 89.7 71.2 88.0 73.9 178.0 294.5 Deferred taxes 0.0 0.0 0.0 0.0 0.0 0.0 Deferred charges and prepaid expenses 1.4 3.1 0.0 4.3 5.6 7.0 CURRENT ASSETS 108.4 93.7 115.3 109.3 221.3 347.2 TOTAL ASSETS 948.2 958.9 1,063.4 1,043.8 1,157.0 1,298.6 SHAREHOLDERS EQUITY -216.5 91.9 240.7 362.6 544.1 798.2 MINORITY INTEREST 0.0 0.0 0.0 0.0 0.0 0.0 Long-term debt 678.8 582.5 440.2 350.0 200.0 0.0 Provisions for pensions and similar obligations 0.0 0.0 0.0 0.0 0.0 0.0 Other provisions 68.9 3.1 31.6 37.4 48.0 60.7 Non-current liabilities 747.7 585.7 471.7 387.4 248.0 60.7 short-term liabilities to banks 154.8 34.3 82.1 12.0 12.0 0.0 Accounts payable 6.7 9.1 8.3 8.4 10.4 14.4 Advance payments received on orders 233.4 210.3 214.8 244.1 313.3 396.1 Other liabilities (incl. from lease and rental contracts) -15.3 5.4 -22.6 -27.1 -34.8 -44.0 Deferred taxes 18.6 0.3 29.2 29.2 29.2 29.2 Deferred income 18.8 22.1 39.1 27.1 34.8 44.0 Current liabilities 417.1 281.4 351.0 293.7 364.8 439.7 TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 948.2 958.9 1,063.4 1,043.8 1,157.0 1,298.6

Balance sheet (common size) 2018 2019 2020 2021E 2022E 2023E Intangible assets (excl. Goodwill) 27% 25% 24% 22% 18% 16% Goodwill 62% 62% 61% 62% 56% 50% Property. plant and equipment 0% 3% 4% 5% 6% 7% Financial assets 0% 1% 1% 1% 0% 0% FIXED ASSETS 89% 90% 89% 90% 81% 73% Inventories 0% 0% 0% 0% 0% 0% Accounts receivable 2% 1% 2% 2% 3% 3% Other current assets 0% 1% 1% 1% 1% 1% Liquid assets 9% 7% 8% 7% 15% 23% Deferred taxes 0% 0% 0% 0% 0% 0% Deferred charges and prepaid expenses 0% 0% 0% 0% 0% 1% CURRENT ASSETS 11% 10% 11% 10% 19% 27% TOTAL ASSETS 100% 100% 100% 100% 100% 100% SHAREHOLDERS EQUITY -23% 10% 23% 35% 47% 61% MINORITY INTEREST 0% 0% 0% 0% 0% 0% Long-term debt 72% 61% 41% 34% 17% 0% Provisions for pensions and similar obligations 0% 0% 0% 0% 0% 0% Other provisions 7% 0% 3% 4% 4% 5% Non-current liabilities 79% 61% 44% 37% 21% 5% short-term liabilities to banks 16% 4% 8% 1% 1% 0% Accounts payable 1% 1% 1% 1% 1% 1% Advance payments received on orders 25% 22% 20% 23% 27% 31% Other liabilities (incl. from lease and rental contracts) -2% 1% -2% -3% -3% -3% Deferred taxes 2% 0% 3% 3% 3% 2% Deferred income 2% 2% 4% 3% 3% 3% Current liabilities 44% 29% 33% 28% 32% 34% TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 100% 100% 100% 100% 100% 100% Source: Company data; AlsterResearch

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Cash flow statement (EUR m) 2018 2019 2020 2021E 2022E 2023E Net profit/loss -12.4 95.1 170.4 121.9 181.5 254.1 Depreciation of fixed assets (incl. leases) 1.5 5.3 41.1 14.2 19.6 26.2 Amortisation of goodwill 0.0 0.0 0.0 0.0 0.0 0.0 Amortisation of intangible assets 28.6 31.2 0.0 51.1 45.2 41.7 Others 120.4 94.8 39.4 5.8 10.6 12.7 Cash flow from operations before changes in w/c 138.1 226.4 250.9 193.0 256.9 334.7 Increase/decrease in inventory 0.0 0.0 0.0 0.0 0.0 0.0 Increase/decrease in accounts receivable -4.4 0.0 0.0 -3.7 -6.6 -7.9 Increase/decrease in accounts payable 3.0 0.0 0.0 0.1 1.9 4.0 Increase/decrease in other w/c positions -25.1 -82.0 -26.4 8.4 68.0 81.3 Increase/decrease in working capital -26.4 -82.0 -26.4 4.8 63.3 77.4 Cash flow from operating activities 111.6 144.4 224.5 197.7 320.2 412.1 CAPEX -11.5 -16.6 -26.2 -51.5 -66.1 -83.6 Payments for acquisitions 0.0 0.0 -84.1 0.0 0.0 0.0 Financial investments 0.3 -4.2 -0.1 0.0 0.0 0.0 Income from asset disposals 0.0 0.0 0.0 0.0 0.0 0.0 Cash flow from investing activities -11.2 -20.9 -110.2 -51.5 -66.1 -83.6 Cash flow before financing 100.5 123.5 114.2 146.2 254.1 328.5 Increase/decrease in debt position -5.6 -90.0 -67.7 -160.3 -150.0 -212.0 Purchase of own shares 0.0 0.0 0.0 0.0 0.0 0.0 Capital measures 0.0 0.0 0.0 0.0 0.0 0.0 Dividends paid 0.0 0.0 0.0 0.0 0.0 0.0 Others -50.3 -46.1 -28.1 0.0 0.0 0.0 Effects of exchange rate changes on cash 0.3 0.0 -6.1 0.0 0.0 0.0 Cash flow from financing activities -55.7 -136.1 -101.8 -160.3 -150.0 -212.0 Increase/decrease in liquid assets 44.8 -12.6 12.4 -14.0 104.1 116.5 Liquid assets at end of period 79.9 71.2 83.5 69.5 173.6 290.0 Source: Company data; AlsterResearch

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Ratios 2018 2019 2020 2021E 2022E 2023E Per share data Earnings per share reported -0.06 0.52 0.51 0.61 0.90 1.26 Cash flow per share 0.53 0.66 0.91 0.91 1.49 1.92 Book value per share -1.08 0.46 1.20 1.80 2.71 3.97 Dividend per share 0.00 0.00 0.00 0.00 0.00 0.00 Valuation P/E -711.5x 85.0x 86.2x 72.8x 48.9x 34.9x P/CF 82.7x 66.4x 48.4x 48.4x 29.5x 23.0x P/BV -40.8x 96.1x 36.9x 24.5x 16.3x 11.1x Dividend yield (%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% FCF yield (%) 1.2% 1.5% 2.1% 2.1% 3.4% 4.3% EV/Sales 37.3x 24.2x 20.4x 16.9x 12.8x 9.8x EV/EBITDA 68.4x 48.2x 45.4x 33.7x 25.3x 19.5x EV/EBIT 89.8x 61.6x 56.8x 44.2x 31.0x 23.1x Income statement (EURm) Sales 258.2 390.2 455.6 542.4 696.2 880.2 yoy chg in % 86.4% 51.1% 16.8% 19.1% 28.3% 26.4% Gross profit 211.5 340.0 391.5 477.3 616.1 769.1 Gross margin in % 81.9% 87.1% 85.9% 88.0% 88.5% 87.4% EBITDA 140.6 195.7 205.1 272.4 352.4 439.1 EBITDA margin in % 54.5% 50.2% 45.0% 50.2% 50.6% 49.9% EBIT 107.1 153.0 164.0 207.2 287.5 371.2 EBIT margin in % 41.5% 39.2% 36.0% 38.2% 41.3% 42.2% Net profit -12.4 103.9 103.0 121.9 181.5 254.1 Cash flow statement (EURm) CF from operations 111.6 144.4 224.5 197.7 320.2 412.1 Capex -11.5 -16.6 -26.2 -51.5 -66.1 -83.6 Maintenance Capex 4.9 11.5 41.1 14.2 19.6 26.2 Free cash flow 100.2 127.8 198.3 146.2 254.1 328.5 Balance sheet (EURm) Intangible assets 836.9 826.3 902.1 872.8 855.4 848.9 Tangible assets 2.2 26.5 40.5 56.1 74.8 97.0 Shareholders' equity -216.5 91.9 240.7 362.6 544.1 798.2 Pension provisions 0.0 0.0 0.0 0.0 0.0 0.0 Liabilities and provisions 902.5 619.9 553.8 399.4 260.0 60.7 Net financial debt 743.9 545.6 434.3 288.1 34.0 -294.5 w/c requirements -224.0 -207.6 -203.4 -229.1 -293.6 -372.5 Ratios ROE 5.7% 113.1% 42.8% 33.6% 33.4% 31.8% ROCE 15.6% 21.5% 20.6% 27.2% 35.8% 43.2% Net gearing -343.5% 594.0% 180.4% 79.4% 6.2% -36.9% Net debt / EBITDA 5.3x 2.8x 2.1x 1.1x 0.1x -0.7x Source: Company data; AlsterResearch

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Conflict of interests

Disclosures regarding research publications of SRH AlsterResearch AG pursuant to section 85 of the German Securities Trading Act (WpHG) and distributed in the UK under an EEA branch passport. subject to the FCA requirements on research recommendation disclosures It is essential that any research recommendation is fairly presented and discloses interests of indicates relevant conflicts of interest. Pursuant to section 85 of the German Securities Trading Act (WpHG) a research report has to point out possible conflicts of interest in connection with the analyzed company. Further to this. under the FCA’s rules on research recommendations. any conflicts of interest in connection with the recommendation must be disclosed. A conflict of interest is presumed to exist in particular if SRH AlsterResearch AG

(1) or its affiliate(s) (either in its own right or as part of a consortium) within the past twelve months. acquired the financial instruments of the analyzed company.

(2) has entered into an agreement on the production of the research report with the analyzed company.

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(7) or the analyst has any other significant financial interests relating to the analyzed company such as. for example. exercising mandates in the interest of the analyzed company or a significant conflict of interest with respect to the issuer.

(8) The research report has been made available to the company prior to its publication. Thereafter. only factual changes have been made to the report.

Conflicts of interest that existed at the time when this research report was published:

Company Disclosure TeamViewer AG

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Important disclosures

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Organizational Requirements SRH AlsterResearch AG took internal therefore highly speculative and represents a very high risk. organizational and regulative precautions to avoid or accordingly disclose • There is no regulated market for unlisted shares and securities and a sale possible conflicts of interest in connection with the preparation and distribution is not possible or only possible on an individual basis. of the research report. All members of AlsterResearch AG involved in the preparation of the research report are subject to internal compliance regulations. 7. Major Sources of Information Part of the information required for this research No part of the Producer’s compensation is directly or indirectly related to the report was made available by the issuer of the financial instrument. Furthermore. preparation of this financial analysis. In case a research analyst or a closely this report is based on publicly available sources (such as. for example. related person is confronted with a conflict of interest. the research analyst is Bloomberg. Reuters. VWD-Trader and the relevant daily press) believed to be restricted from covering this company. reliable. SRH AlsterResearch AG has checked the information for plausibility but not for accuracy or completeness. 4. Information Concerning the Methods of Valuation/Update The determination of the fair value per share. i.e. the price target. and the resultant rating is done on 8. Competent Supervisory Authority SRH AlsterResearch AG are under the basis of the adjusted free cash flow (adj. FCF) method and on the basis of supervision of the BaFin – German Federal Financial Supervisory Authority the discounted cash flow – DCF model. Furthermore. a peer group comparison (Bundesanstalt für Finanzdienstleistungsaufsicht). Graurheindorfer Straße 108. is made. The adj. FCF method is based on the assumption that investors 53117 Bonn and Marie-Curie-Straße 24 – 28. 60439 Frankfurt a.M. This purchase assets only at a price (enterprise value) at which the operating cash document is distributed in the UK under a MiFID EEA branch passport and in flow return after taxes on this investment exceeds their opportunity costs in the compliance with the applicable FCA requirements. form of a hurdle rate of 7.5%. The operating cash flow is calculated as EBITDA less maintenance capex and taxes. Within the framework of the DCF approach. 9. Specific Comments for Recipients Outside of Germany This research report the future free cash flows are calculated initially on the basis of a fictitious capital is subject to the law of the Federal Republic of Germany. The distribution of this structure of 100% equity. i.e. interest and repayments on debt capital are not information to other states in particular to the USA. Canada. Australia and Japan factored in initially. The adjustment towards the actual capital structure is done may be restricted or prohibited by the laws applicable within this state. by discounting the calculated free cash flows with the weighted average cost of capital (WACC). which takes into account both the cost of equity capital and the 10. Miscellaneous According to Article 4(1) No. i of the delegated regulation cost of debt. After discounting. the calculated total enterprise value is reduced 2016/958 supplementing regulation 596/2014 of the European Parliament. by the interest-bearing debt capital in order to arrive at the equity value. Detailed further information regarding investment recommendations of the last 12 information on the valuation principles and methods used and the underlying months are published free of charge under https://www.alsterresearch.com. assumptions can be found at https://www.alsterresearch.com.

SRH AlsterResearch AG uses the following three-step rating system for the analyzed companies:

• Buy: Sustainable upside potential of more than 10% within 12 months

• Sell: Sustainable downside potential of more than 10% within 12 months.

• Hold: Upside/downside potential is limited. No immediate catalyst visible.

NB: The ratings of SRH AlsterResearch AG are not based on a performance that is expected to be “relative“ to the market.

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