Ratings & Definitions used by CM Equity Research

On 1 January 2016, Commerzbank Research introduced a new Equity Recommendation system. Recommendations within the scope of financial analyses/investment research issued and distributed by Commerzbank Research are categorized as follows:

Commerzbank Research fundamental equity analysts rate the shares of the companies they cover on a total return basis using a twelve-month horizon. Stocks showing implied total return potential of more than 20% are rated Buy. Stocks showing implied total return of more than 0% but less than 20% are rated Hold. Stocks showing implied downside on a total return basis (<0%) are rated Reduce.

For a transitory period from 1 January until 31 March 2016, this rating system and the previous rating system will be used in parallel. New research will only be published under the new rating methodology, but existing recommendations will only be changed to the new rating system as and when new research is published in ordinary course of business.

Summary of the equity rating system:

Buy: +20 %

Hold: 0-20%

Reduce: <0%

Previous rating system (prior to 1 January 2016)

Prior to 1 January 2016, recommendations within the scope of financial analyses/investment research issued and distributed by CM Equity Research were categorised as follows:

Commerzbank Corporates & Markets Research fundamental equity analysts rated the shares of the companies they covered on an absolute basis using a 6-month target price. Stocks showing implied share price upside of more than 15% from the current price to the target price were rated Buy. Stocks showing implied share price upside of more than 5% but less than 15% from the current price to the target price were rated Add. Stocks where the current share price was within a 5 % range of the price target were rated Hold. Stocks showing implied share price downside of more than 5 % but less than 15 % from the current price to the target price were rated Reduce. Stocks with more than 15 % downside from the current share price to the target price were rated Sell.

Summary of the equity rating system:

Buy: +15 %

Add: +5 % to 15 %

Hold: +/-5 %

Reduce: –5 % to 15 %

Sell: –15 %

Previous rating system (prior to 31 October 2007)

Prior to 31 October 2007, the Commerzbank Corporates & Markets Equity Recommendation system rated stocks on an absolute system, rather than a relative system. Stock ratings were based on the analyst's expectation of the stock's total return during the twelve months following assignment of the rating. This view was based on the target price and on the analyst's opinions on general market and economic developments.

Recommendations within the scope of financial analyses/investment research issued and distributed by ZCM Equity Research were categorised as follows:

Commerzbank Corporates & Markets Research fundamental equity analysts rated the shares of the companies they covered on an absolute basis using a 12-month target price. Stocks showing implied share price upside of more than 10% from the current price to the 12-month target price were rated Buy. Stocks with more than 10% downside from the current share price to the 12-month target price were rated Sell. Stocks where the current share price was within a 10% range of the 12-month price target were rated Hold.

Previous rating system (prior to 6 January 2005)

Prior to 6 January 2005, the Equity Recommendation system was based on the following:

Commerzbank Securities Research fundamental equity analysts rate the shares of the companies they cover relative to their respective sector according to the 18 DJ Stoxx level 2 sector classifications. Shares are ranked Overweight, Equalweight and Underweight based on a 12-month horizon. For each sector, the number of Overweights and Underweights are generally equal, with the number of Overweights and Underweights balanced numerically, not by market capitalisation. Ratings for small and mid-cap companies use the same ratings but do not operate under the same discipline of matching Overweights to Underweights on a sectoral basis, and the recommendations are relative to the MDAX. The Commerzbank Securities Strategy Team makes sector allocation recommendations amongst the 18 DJ Stoxx sectors, expressing preferences on a three-month time frame. The cumulative weighting equals 100 percent.

Previous rating system (prior to 2 January 2004)

Prior to 2 January 2004, the Equity Recommendation system was based on the following:

Terms:

Buy -15% or more outperformance; Accumulate -5% to 15% outperformance; Hold -5% underperformance to 5% outperformance; Reduce -5% to 15% underperformance; Sell -15% or more underperformance. Period: During the forthcoming 12 months, at any time during that period and not necessarily just at the end of those 12 months. Benchmarks: 1. Stocks included in the Dow Jones STOXX index have their expected performance relative to this index. Commerzbank has no house forecast for this index, and thus a recommendation is made on the basis of absolute performance. Recommendations are adjusted accordingly as and when the index changes. 2. All other stocks are compared to their relevant local country index and Neuer Markt stocks are compared to the Neuer Markt Index.