Re

8/2012/RP (40) April 18, 2012

Analyst: Sobiesaw Pajk, CFA, s.pajak@idmsa.pl, +48 (22) 489 94 70

rly ew te v i ar re Qu lts P su

Agora
Investment opinion & recommendation
Our underlying equity story for Agora remains intact, yet it requires one to take two steps back from the table. On the first glance, one can hardly find anything fancy there. With feebleness of local traditional media ad market (softening of GDP growth seems likely to result in another consecutive year of decline of advertising spending in print media at double-digit yoy pace), shrinking newspapers copy sales, add-on series business running short of its initial marketing appeal, limited ability to further trim operating costs and stronger yoy Euro in relation to Polish zloty (boosting, among others, rental costs of the cinema business), the Company's profits for the coming quarters seem likely to deteriorate in the yoy perspective (as a matter of fact, for 1Q12 we expect Agoras EBIT and bottom line to slide into the red). The fact that current consensus of markets expectations for Agora still seems overly optimistic to us (by c. 17-19%, as far as 2012E EBITDA goes), makes the ST equity story even more sour. With all these being true, we continue to believe that at current level of share market prices Agoras equities actually present a buying opportunity for value-oriented investors with some tolerance for risk (as noted above, the near-term news flow is unlikely to be thrilling) and with longer-run investment horizons, as according to our estimates current market capitalization of the Company lies materially below the non-going concern NAV. To remove any ambiguities: we do find Agora a going concern. On the grounds of the above rationale, we maintain our ratings for Agoras equities at a Buy (LT fundamental) and Neutral (ST market-relative). Please note that Agora constitutes no longer a pure daily newspaper exposure last year the daily press division accounted for only 55% of the Companys FY EBITDA (pre-unallocated costs and impairments) yet is being priced with noticeable (>10%) discount to the foreign daily newspapers peers (2012E/ 2013E median EV/EBITDA multiplier of 4.5x/ 4.1x, according to Bloomberg). Putting other words: even if Agora continued to be only a pure daily newspaper play (which is not the case), its current share market price would be undervalued relative to daily-press-peers-median-implied fair value by >10%. Lastly, we believe that Agora is near to reach an important milestone in its media-segment-diversification strategy attainment of an indifference in relation to daily newspaper advertising spending. According to our estimates, already next year the Companys consolidated EBITDA will increase yoy, despite continued deep contraction of daily newspapers advertising spending (assumed at c. -8%), as by that time the non-daily-press businesses of Agora should attain scale sufficient (even at a sluggish pace of composite growth at these segments) to offset the adverse

Sector: Media & Entertainment Fundamental rating: Buy () Market relative: Neutral () Price: PLN 11.84 12M EFV: PLN 16.2 ()

Market Cap.: US$ 189 m Reuters code: AGOD.WA Av. daily turnover: US$ 0.37 m Free float: 87% 12M range: PLN 10.59-27.10

Guide to adjusted profits No factors necessitating adjustments. Please note that the profits of Agora are NOT adjusted for the IFRS2 SOCs; please refer to report 2/2008/SR (6) regarding the justification of this stance of ours. Key data IFRS consolidated Sales EBITDA EBIT Net income EPS EPS yoy chng P/E P/CE EV/EBITDA EV/EBIT Gross dividend yield Net debt DPS No. of shares (eop) PLN m PLN m PLN m PLN m PLN % x x x x % PLN m PLN m 2011 1,234.5 144.7 51.9 42.2 0.83 -41 14.3 4.5 3.4 9.5 4.2 -110.4 0.50 50.9 2012E 1,166.3 123.9 31.8 24.0 0.47 -43 25.2 5.2 4.0 15.4 4.2 -112.2 0.50 50.9 2013E 1,202.2 136.7 39.9 30.6 0.60 28 19.7 4.7 3.5 12.2 4.2 -117.7 0.50 50.9 2014E 1,268.4 150.9 46.6 36.1 0.71 18 16.7 4.3 3.5 11.4 4.2 -70.2 0.50 50.9

Source: Company, DM IDMSA estimates Stock performance

28 26 24 22 20 18 16 14 12 Volume (m) 10 2 1 0 04.2011 05.2011 06.2011 07.2011 08.2011 09.2011 10.2011 11.2011 12.2011 01.2012 02.2012 03.2012 04.2012
WIG Agora

Source: ISI

Upcoming events
1. 2. 3. 4. 5. Release of ZKDP-audited newspapers paid circulation data: around 5th calendar day of each month Release of 1Q12 financial results: May 11, 2012 Release of 2Q12 financial results: August 10, 2012 Release of 1H12 financial results: August 17, 2012 Release of 3Q12 financial results: November 9, 2012

Catalysts
1. Strong PLN in relation to Euro (newsprint, cinema space rentals) 2. With streamlined operating costs base the operating leverage should work in favor of the Company when the traditional media ad spending rebounds 3. Acceleration of online ad revenues 4. Further value-accretive acquisitions 5. Current share market price below our estimate of the Companys per share liquidation value 6. The Company is about to reach (next year, according to our estimates) an irrelevance point as far as its business mix is concerned (the impact of further (even material) declines of daily press ad revenues on the consolidated EBITDA should start to be more than offset by even sluggish increases in non-daily-press-ad areas)

Risk factors
1. Weak outlook for advertising spending in 2012E daily press is likely to record yoy contraction at a mid-teens pace (c. 14-17%) 2. Weak PLN relative to Euro (newsprint, cinema space rentals) 3. Poor visibility of traditional media ad spending going forward 4. Consolidation among competing local market outdoor companies 5. Rise in unit cost of newsprint 6. Value-dilutive takeovers 7. Share supply overhang (Arka) 8. Likely yoy decline of the Companys profits in 2012E, with 1Q12E EBIT and bottom line likely to slip into the negative territory 9. Downside risk to consensus estimates; we view current consensus of markets expectations (2012E EBITDA of PLN 147 million (PLN 145 million), according to Bloomberg (Reuters)) as overstated (by c. 17%-19%)

Please note that the figures have been removed from this publication intentionally.

Agora

impact of shrinking daily press ad revenue stream on Groups EBITDA.

Magazines ad sales. A feeble showing expected; we assume aa yoy contraction by c. 11%.

Quarterly earnings corner; 1Q12E results preview

On the back of (i) still deep yoy declines of advertising spending in print media, (iii) exhaustion of the Companys reserves in the area of internally-induced OPEX savings (except from marketing & promotion area), and (iii) appreciation of Euro in relation to PLN (in the yoy perspective), one should not expect Agoras 1Q12 financial results (to be released on May 11, before the session opening) to bring any frills; our forecast (please see Figure 1 regarding the details) provides for (i) high-single-digit (c. 7%) yoy slide of consolidated revenues, (ii) approx. 32% yoy contraction of EBITDA (i.e. by c. PLN 10 million in absolute value terms), and (iii) quarterly EBIT and bottom line below the watermark (albeit only marginally). Our forecast of Agoras financial results for 1Q12 was based on the assumptions presented below. GWs copy sales. We assume 1Q12 average daily paid aa

Radio. This medium showed its resilience to slowdown already aa

last year; similarly, for 1Q12 we assume it to show positive yoy dynamics (albeit only in low single-digit range).

Outdoor. Just like in case of radio, last year Agoras outdoor aa business fared reasonably well; we expect this to extend into 2012, with 1Q12E yoy momentum seen at approx. 2%.

Cinema. In case of the cinema business it should be remembered aa

that in March 2012 the Company opened one new multiplex (with five screens and >1 thousand seats) a development which probably more weighted on the segments operating costs for the quarter than on its revenues. Assuming c. 2 million tickets sold in the quarter (c. 20% decline yoy), and average net ticket price of c. PLN 18 (moderately higher yoy), we forecast this segment to generate quarterly: (i) revenues of c. PLN 50 million (10% down yoy), (ii) EBITDA of c. PLN 8 million (c. 30% down yoy), and (iii) EBIT of c. PLN 3.5 million (halved yoy).

circulation of Wyborcza at 269 ths. (16% down yoy). With average effective net price of GW assumed to edge higher yoy by c. 7% (yet to stay intact qoq), we forecast quarterly revenues from GWs copy sales at c. PLN 30 million (c. 10% down yoy).

Non-D&A OPEX. Operating-cost-wise, we expect to see some aa

GW aa ad revenues. We assume quarterly sales of GWs ads at PLN 51 million, 18% down yoy.

Free-of-charge press. We expect Metro to buck the declining aa

trend of slumping ad sales in daily press segment, with 1Q12E revenues coming out flattish yoy.

Add-ons. On the back of much thinner yoy number of editorial aa series and one-off add-on projects (as well as significantly lower yoy average selling price) we expect the Companys special projects revenues to slump yoy by whooping 62%. In terms of EBITDA impact this should make no harm, in our view; we expect the 1Q12 contribution of special projects to consolidated EBITDA at a zero, compared to PLN -1.2 million loss for the base quarter of 1Q11.

yoy decline, albeit at a softer pace than in case of revenues (-4% versus -7%). Specifically, we expect: (i) marginal (c. 1%) yoy increase of (non-SOC) HR costs, (ii) 80% decline of SOCs (from PLN 4.5 million to c. PLN 0.9 million), (iii) >10% yoy contraction of marketing & promotion outlays, (iv) c. 10% yoy slide in GWs newsprint costs, (v) significant (c. 17% yoy) hike in cinema space rentals (stronger yoy Euro + increased number of multiplexes), (vi) >60% yoy slump in add-on costs (mirroring the dynamics of the revenues from this source), (vii) minor (low-single-digit) yoy increase of outdoor system maintenance costs, and (viii) noticeable (>10%) yoy increase of miscellaneous costs (mainly materials (e.g. newsprint for printing services rendered to external parties) and energy). The modest discrepancy between the revenues and opexs pace of declines (former expected to contract by somewhat more (c. 3pp, or c. PLN 10 million in absolute value terms) than the latter) stands behind our expectancy of noticeable contraction of the Companys 1Q12 EBITDA in yoy perspective.

D&A. Nothing new on this front to be expected; we forecast aa

Daily press segment miscellaneous revenues. A material aa (>20%) yoy increase should be shown here (more printing services rendered to external parties this was visible already in the financial showing for the preceding quarter). Online. Softening of the yoy dynamics of the display ads was aa visible already in 4Q11; we expect this tendency to continue, with 1Q12E yoy pace of growth of Agoras Internet revenues merely in the low-single-digit range. Magazines copy sales. We assume approx. 5% lower yoy aa average paid circulations and copy sales at Agoras magazines portfolio.

Agoras quarterly D&A charge at approx. PLN 22.6 million flat qoq and marginally (by c. 3%) higher yoy.

Financial forecasts
Having an explicit forecast of the Companys 1Q12 financial results, we link it to our FY12 projections. We also significantly trim our expectations regarding the add-on series revenues (the main reason for resultant slide in our consolidated top line forecast for Agora; in terms of profit forecast this bears no impact, though, as we continue to assume neutral impact of editorial series on the Companys EBITDA), moderately lower our expectations regarding the level of GWs average daily paid circulation (while via lowered copy sales component this adds to the extent of decline of our consolidated revenue projection for Agora, the resultant (adverse) impact on profits in muted (as in a large
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Agora

extent this is covered by lowered newsprint costs)), and finetune our assumptions for the Companys remaining business lines and operating cost categories. The net effect of the changes in question is slightly adverse for our forecasts of Agoras consolidated revenues and EBITDA (declines in the 3-5% range) in the coming years, yet noticeably adverse for projected EBIT and NI (forecasts lowered by 11-19%; please note, though, that here the low base effect is at play in absolute value terms our forecasts are trimmed by c. PLN 4-7 million); please see Figure 2 regarding the details. From the perspective of our financial projections for the Company, we continue to perceive current market consensus estimates for Agora (2012E EBITDA of PLN 147 million/ PLN 145 million, according to Bloomberg/ Reuters) as stretched (by c. 17-19%); we believe than in the coming weeks/ months they will continue to trend downwards (they did come off during past quarter, albeit in our view insufficiently) on the back of a series of financial forecast downgrades by brokers.

Valuation
On the back of aforementioned mild downgrade of our financial projections for the Company, our 12M EFV assessment for Agoras equities (50%-50% average of DCF and peer-relative approaches) declines slightly (by 5%) to PLN 16.2 per share (from PLN 17.0 per share previously). We sustain our view that at current level of share market prices Agora is being valued by the market as a non-going concern company. Based on our calculations, should the Company went belly-over (which, despite disappointing sectoral environment and obsolete structure of business mix, is (at worst) probably merely a distant-tail scenario), sell-off its assets and pay-off its liabilities (inclusive of additional employee liabilities arising in such case), the money left (c. PLN 16.4 per share) would exceed its current market pricing (regarding the detailed calculations, please refer to page 5 of our research report 6/2012/FN (10) dated February 29, 2012).

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BASIC DEFINITIONS A/R turnover (in days) = 365/(sales/average A/R)) Inventory turnover (in days) = 365/(COGS/average inventory)) A/P turnover (in days) = 365/(COGS/average A/P)) Current ratio = ((current assets ST deferred assets)/current liabilities) Quick ratio = ((current assets ST deferred assets inventory)/current liabilities) Interest coverage = (pre-tax profit before extraordinary items + interest payable/interest payable) Gross margin = gross profit on sales/sales EBITDA margin = EBITDA/sales EBIT margin = EBIT/sales Pre-tax margin = pre-tax profit/sales Net margin = net profit/sales ROE = net profit/average equity ROA = (net income + interest payable)/average assets EV = market capitalization + interest bearing debt cash and equivalents EPS = net profit/ no. of shares outstanding CE = net profit + depreciation Dividend yield (gross) = pre-tax DPS/stock market price Cash sales = accrual sales corrected for the change in A/R Cash operating expenses = accrual operating expenses corrected for the changes in inventories and A/P, depreciation, cash taxes and changes in the deferred taxes DM IDM S.A. generally values the covered non bank companies via two methods: comparative method and DCF method (discounted cash flows). The advantage of the former is the fact that it incorporates the current market assessment of the value of the companys peers. The weakness of the comparative method is the risk that the valuation benchmark may be mispriced. The advantage of the DCF method is its independence from the current market valuation of the comparable companies. The weakness of this method is its high sensitivity to undertaken assumptions, especially those related to the residual value calculation. Please note that we also resort to other valuation techniques (e.g. NAV-, DDM- or SOTP-based), should it prove appropriate in a given case.

Banks Net Interest Margin (NIM) = net interest income/average assets NIM Adjusted = (net interest income adjusted for SWAPs)/average assets Non interest income = fees&commissions + result on financial operations (trading gains) + FX gains Interest Spread = (interest income/average interest earning assets)/ (interest cost/average interest bearing liabilities) Cost/Income = (general costs + depreciation + other operating costs)/ (profit on banking activity + other operating income) ROE = net profit/average equity ROA = net income/average assets Non performing loans (NPL) = loans in substandard, doubtful and lost categories NPL coverrage ratio = loan loss provisions/NPL Net provision charge = provisions created provisions released DM IDM S.A. generally values the covered banks via two methods: comparative method and fundamental target fair P/E and target fair P/BV multiples method. The advantage of the former is the fact that it incorporates the current market assessment of the value of the companys peers. The weakness of the comparative method is the risk that the valuation benchmark may be mispriced. The advantage of the fundamental target fair P/E and target fair P/BV multiples method is its independence of the current market valuation of the comparable companies. The weakness of this method is its high sensitivity to undertaken assumptions, especially those related to the residual value calculation. Assumptions used in valuation can change, influencing thereby the level of the valuation. Among the most important assumptions are: GDP growth, forecasted level of inflation, changes in interest rates and currency prices, employment level and change in wages, demand on the analysed company products, raw material prices, competition, standing of the main customers and suppliers, legislation changes, etc. Changes in the environment of the analysed company are monitored by analysts involved in the preparation of the recommendation, estimated, incorporated in valuation and published in the recommendation whenever needed.

KEY TO INVESTMENT RANKINGS This is a guide to expected price performance in absolute terms over the next 12 months: Buy fundamentally undervalued (upside to 12M EFV in excess of the cost of equity) + catalysts which should close the valuation gap identified; Hold either (i) fairly priced, or (ii) fundamentally undervalued/overvalued but lacks catalysts which could close the valuation gap; Sell fundamentally overvalued (12M EFV < current share price + 1-year cost of equity) + catalysts which should close the valuation gap identified. This is a guide to expected relative price performance: Overweight expected to perform better than the benchmark (WIG) over the next quarter in relative terms Neutral expected to perform in line with the benchmark (WIG) over the next quarter in relative terms Underweight expected to perform worse than the benchmark (WIG) over the next quarter in relative terms The recommendation tracker presents the performance of DM IDMSAs recommendations. A recommendation expires on the day it is altered or on the day 12 months after its issuance, whichever comes first. Relative performance compares the rate of return on a given recommended stock in the period of the recommendations validity (i.e. from the date of issuance to the date of alteration or in case of maintained recommendations from the date of issuance to the current date) in a relation to the rate of return on the benchmark in this time period. The WIG index constitutes the benchmark. For recommendations that expire by an alteration or are maintained, the ending values used to calculate their absolute and relative performance are: the stock closing price on the day the recommendation expires/ is maintained and the closing value of the benchmark on that date. For recommendations that expire via a passage of time, the ending values used to calculate their absolute and relative performance are: the average of the stock closing prices for the day the recommendation elapses and four directly preceding sessions and the average of the benchmarks closing values for the day the recommendation expires and four directly preceding sessions.

Distribution of IDMs current recommendations Numbers Percentage Buy 27 36% Hold 40 53% Sell 9 12% Suspended 0 0% Under revision 0 0%

Distribution of IDMs current recommendations for companies that were within the last 12M IDM customers in investment banking Numbers Percentage Buy 1 17% Hold 4 67% Sell 1 17% Suspended 0 0% Under revision 0 0%

Distribution of IDMs current market relative recommended weightings Numbers Percentage Overweight 28 37% Neutral 31 41% Underweight 17 22% Suspended 0 0% Under revision 0 0%

Distribution of IDMs current market relative recommended weightings for the companies that were within the last 12M IDM customers in investment banking Numbers Percentage Overweight 2 33% Neutral 2 33% Underweight 2 33% Suspended 0 0% Under revision 0 0%

LT fundamental recommendation tracker Recommendation Agora Hold Sell Hold Sell Hold Buy Hold Buy Hold Buy Hold Buy Hold Buy Issue date 03.02.2008 16.10.2008 01.02.2009 19.02.2009 08.06.2009 08.07.2009 02.08.2009 11.11.2009 24.02.2010 17.05.2010 14.10.2010 25.07.2011 11.12.2011 29.02.2012 Reiteration date 11.02.2008 02.03.2008 06.03.2008 30.03.2008 17.04.2008 14.05.2008 17.07.2008 17.08.2008 31.08.2008 28.09.2008 29.10.2008 16.11.2008 30.11.2008 11.01.2009 08.02.2009 08.03.2009 05.04.2009 25.04.2009 17.05.2009 31.08.2009 12.10.2009 14.10.2009 14.12.2009 07.01.2010 31.01.2010 03.02.2010 01.03.2010 29.03.2010 30.03.2010 21.04.2010 14.06.2010 12.07.2010 15.07.2010 19.07.2010 31.08.2010 12.10.2010 12.11.2010 15.11.2010 15.12.2010 02.01.2011 28.01.2011 01.03.2011 24.03.2011 20.04.2011 16.05.2011 20.06.2011 12.07.2011 31.08.2011 03.10.2011 19.10.2011 24.10.2011 14.11.2011 01.01.2012 25.01.2012 20.03.2012 15.04.2012 18.04.2012 Expiry date 16.10.2008 01.02.2009 19.02.2009 08.06.2009 08.07.2009 02.08.2009 11.11.2009 24.02.2010 17.05.2010 14.10.2010 25.07.2011 11.12.2011 29.02.2012 Not later than 28.02.2013 Performance -52% -41% -2% 17% -11% 36% 6% 22% 3% 11% -38% -21% -10% 3% Relative performance -21% -28% 8% -16% -8% 15% -6% 26% -4% 0% -40% -3% -16% 6% Price at issue/ reiteration (PLN) 48.01 48.10 43.80 42.75 43.00 41.35 40.40 27.73 30.000 29.220 28.730 22.75 19.400 18.30 16.550 17.300 13.39 12.80 13.06 11.21 14.690 15.41 13.95 15.28 13.59 18.50 23.35 21.72 21.89 19.70 21.20 21.70 20.80 21.59 23.98 24.10 25.38 26.91 25.45 24.71 24.05 22.70 22.70 22.70 24.95 26.50 26.98 26.38 26.50 27.35 26.10 25.30 26.57 26.10 26.00 22.60 18.70 18.10 16.10 14.57 13.00 13.99 14.25 14.92 12.77 11.10 11.20 11.50 12.40 12.16 11.84 12M EFV (PLN) 45.90 45.90 41.50 41.50 41.80 42.00 42.00 39.30 34.20 34.20 34.20 19.80 19.80 19.60 19.60 19.60 16.70 16.70 13.50 13.50 13.50 12.00 12.00 17.90 20.30 20.30 20.30 20.30 23.60 23.60 23.60 24.50 24.50 24.50 24.50 24.50 24.50 26.40 27.70 27.70 27.70 27.20 28.20 28.20 28.20 28.20 28.20 28.20 28.20 28.20 26.80 26.80 26.80 26.80 25.50 25.50 25.50 25.00 19.90 19.00 19.00 18.20 18.20 18.20 18.20 17.00 17.00 17.00 17.00 17.00 16.20

Market-relative recommendation tracker Relative recommendation Agora Neutral Underweight Neutral Overweight Neutral Overweight Neutral Overweight Neutral Underweight Neutral Underweight Neutral Issue date 03.02.2008 16.10.2008 08.06.2009 11.11.2009 24.02.2010 30.03.2010 14.10.2010 12.11.2010 28.01.2011 20.04.2011 20.06.2011 11.12.2011 29.02.2012 Reiteration date 11.02.2008 02.03.2008 06.03.2008 30.03.2008 17.04.2008 14.05.2008 17.07.2008 17.08.2008 31.08.2008 28.09.2008 29.10.2008 16.11.2008 30.11.2008 11.01.2009 01.02.2009 08.02.2009 19.02.2009 08.03.2009 05.04.2009 25.04.2009 17.05.2009 08.07.2009 02.08.2009 31.08.2009 12.10.2009 14.10.2009 14.12.2009 07.01.2010 31.01.2010 03.02.2010 01.03.2010 29.03.2010 21.04.2010 17.05.2010 14.06.2010 12.07.2010 15.07.2010 19.07.2010 31.08.2010 12.10.2010 15.11.2010 15.12.2010 02.01.2011 01.03.2011 24.03.2011 16.05.2011 12.07.2011 25.07.2011 31.08.2011 03.10.2011 19.10.2011 24.10.2011 14.11.2011 01.01.2012 25.01.2012 20.03.2012 15.04.2012 18.04.2012 Expiry date 16.10.2008 08.06.2009 11.11.2009 24.02.2010 30.03.2010 14.10.2010 12.11.2010 28.01.2011 20.04.2011 20.06.2011 11.12.2011 29.02.2012 No later than 28.02.2013 Price at issue/ reiteration (PLN) 48.01 48.10 43.80 42.75 43.00 41.35 40.40 27.73 30.00 29.22 28.73 22.75 19.40 18.30 16.55 17.30 13.39 12.80 13.06 11.21 14.69 15.41 13.95 15.28 13.59 18.50 23.35 21.72 21.89 19.70 21.20 21.70 20.80 21.59 23.98 24.10 25.38 26.91 25.45 24.71 24.05 22.70 22.70 22.70 24.95 26.50 26.98 26.38 26.50 27.35 26.10 25.30 26.57 26.10 26.00 22.60 18.70 18.10 16.10 14.57 13.00 13.99 14.25 14.92 12.77 11.10 11.20 11.50 12.40 12.16 11.84 Relative performance -21% -35% 0% 26% 1% -6% -5% -4% -3% -26% -10% -16% 6% -

Institutional sales Tomasz Dud tel.: +48 (22) 489 94 14 t.dudz@idmsa.pl Marcin Kozerski tel.: +48 (22) 489 94 12 m.kozerski@idmsa.pl Bartomiej Chorzpa tel.: +48 (22) 489 94 11 b.chorzepa@idmsa.pl Piotr Kope tel.: +48 (22) 489 94 13 p.kopec@idmsa.pl Marcin Fereniec tel.: +48 (22) 489 94 23 m.fereniec@idmsa.pl Zbigniew Rbisz tel.: +48 (22) 489 94 47 z.rebisz@idmsa.pl Research Sobiesaw Pajk, CFA (Equity strategy, Media & Entertainment, IT software & services) tel.: +48 (22) 489 94 70 s.pajak@idmsa.pl Sylwia Jakiewicz, CFA (Construction materials, Consumer staples & discretionary, Utilities) tel.: +48 (22) 489 94 78 s.jaskiewicz@idmsa.pl Maciej Wewirski (Commodities, Residential construction, Real estate) tel.: +48 (22) 489 94 62 m.wewiorski@idmsa.pl Micha Sobolewski, CFA (Financials) tel.: +48 (22) 489 94 77 m.sobolewski@idmsa.pl This report is for information purposes only. Neither the information nor the opinions expressed in the report constitute a solicitation or an offer to buy or sell any securities referred herein. The opinions expressed in the report reflect independent, current judgement of DM IDM S.A. Securities. This report was prepared with due diligence and scrutiny. The information used in the report is based on all public sources such as press and branch publications, companys financial statements, current and periodic reports, as well as meetings and telephone conversations with companys representatives prior to the date of report's release. We believe the above mentioned sources of information to be reliable, however we do not guarantee their accuracy and completeness. All estimates and opinions included in the report represent our judgment as of the date of the issue. The legal entity supervising DM IDM S.A. is Financial Supervision Commission in Warsaw (KNF in Polish abbreviation). IDM does not take any responsibility for decisions taken on the basis of this report and opinions stated in it. Investors bear all responsibility for investment decisions taken on the basis of the contents of this report. The report is intended exclusively for private use of investors customers of IDM. No part or excerpt of the report may be redistributed, reproduced or conveyed in any manner or form written or oral without the prior written consent of IDM. This report is released to customers the moment it is issued and the whole report is made available to the public one month after the issuance. The analyst(s) responsible for covering the securities in this report receives compensation based upon the overall profitability of IDM which includes profits derived from investment banking activities, although the analyst compensation is not directly related thereto. IDM releases analytical reports via mail or electronic mail to selected clients (professional clients). Apart from mentioned above, there are no ties of any kind between DM IDM S.A., the analyst/analysts involved in the preparation of the report and his/her relatives and the company/ companies analyzed in this publication, especially in the form of: i) offering of financial instruments in the primary market or/and Initial Public Offer within 12 months preceding the issue of this report, ii) purchasing and selling of financial instruments for own account due to tasks connected with organization of the regulated market, iii) purchasing and selling of financial instruments due to underwriting agreements and iv) the role of a market maker for securities analysed by IDM. The analysed company/companies does/do not possess DMIDMS.A. shares. IDM has not signed with the company/companies any contracts for recommendation writing. Investors should assume that DM IDM S.A. is seeking or will seek business relationships with the company/companies described in this report. The report was not shown to the analyzed company/companies before the distribution of the report to clients. Jakub Viscardi (Telco, Consumer staples & discretionary, IT hardware distribution) tel.: +48 (22) 489 94 69 j.viscardi@idmsa.pl ukasz Prokopiuk (Chemicals, Oil & gas) tel.: +48 (22) 489 94 72 l.prokopiuk@idmsa.pl Andrzej Bernatowicz (Construction, Video games) tel.: +48 (22) 489 94 74 a.bernatowicz@idmsa.pl Micha Czerwiski (Associate) tel.: +48 (22) 489 94 64 m.czerwinski@idmsa.pl Bernard Gaworczyk (Associate) tel.: +48 (22) 489 94 75 b.gaworczyk@idmsa.pl

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