EFTA01385544.pdf

Deutsche Bank Risks ■ Glencore - GLEN.L: Variance in commodity prices or operating currencies • Linde - LING.DE: Risks include weaker global GDP, lower retention of the cost from expectations are key risks to our earnings and valuation forecasts. On cutting/efficiencies from Praxair merger, FX, Praxair merger falling apart and the downside, weaker commodity prices would have a significant negative aggressive competition from peers for new on-site contracts. sentiment impact and provide a deterrent to a re-rating. Glencore's key ■ Prudential - PRU.L: The group's balance sheet is negatively exposed to higher growth assets are in less politically stable regions than most - such as the US and UK corporate bond spreads, lower US and UK bond yields and weaker Democratic Republic of Congo (DRC) and Equatorial Guinea - which US equity markets. Earnings growth could be further impacted by any introduces a higher degree of sovereign risk. Risks for zinc include strengthening in Sterling given that 86% of earnings are non-GBP, or a weaker increasing marginal production. than expected outlook for Asian economies. Other downside risks include ■ Infineon Technologies - IFXGn.DE: Key downside risks include: FX (every worse than anticipated political or regulatory changes either to solvency 1c change in EUR /$ impacts revenues by -0.5% and earnings by -1%); requirements or market practices in its principal territories. For the former, we Cyclicality and inventory de-stocking; Large dependence on Automotive; note especially developing GSII capital rules, guarantee risks in its US life back Potentially value destructive M&A book and proposed NAIC changes to the US capital regime. On the latter, we ■ Informa PLC - INF.L: Downside risks include potential earnings dilution highlight the possibility of further regulatory restrictions on mainland China sales from the sale or closure of non-core businesses. The business may require into HK or a failure by the new US administration to modify the previously additional investment on top of the announced plan. Informa intends to planned DOL changes. expand via acquisition in the events industry, where there is competition for ■ Royal Mail - RMG.L: Upside risks include faster execution of the assets and where growth is cyclical. The Academic division has high transformation plan, better pricing in UK parcels, higher parcel volumes than exposure to print books, including textbooks, which could suffer from forecast, no industrial action and a successful sale of its surplus properties structural declines. ■ Renault SA - RENA.PA: Downside risks include: i) failure of the new product ■ Kingspan - KSP.I: Slower global growth, especially in large markets for campaign in Europe, which could result in market share loss and in pricing Kingspan such as the UK; Slower innovation or penetration growth; Euro pressure; ii) a tougher European market environment, likely leading to further strength causing negative translation effect; Poor cost inflation pass- pricing and volume erosion where, usually on the downside, OP leverage could through; Inability to complete targeted M&A in the Light & Air division. be as high as -50%; and iii) worse-than-expected emerging market ■ KPN - KPN.AS: Key downside risks include an (i) aggressive push from performance. Tele2 as the new network operator in the market; (ii) continued weakness in Business due to the economy and IP migration and (ii) restructuring costs which could weigh on the FCF generation of KPN. PO:≥eXCh . ELIRpe, ,Th E.e4cift), ry 2;f:a CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086830 CONFIDENTIAL SDNY_GM_00233014 EFTA01385544