Template for HA Research Notes - ISRA VISION AG

ISRA Vision
Germany - High-tech Engineering
Buy (initiation)
Price target: EUR 25.00
Price: EUR 17.40 Next result: Q3 31.08.11
Roland Rapelius, CFA
Analyst
Bloomberg: ISR GR Market cap: EUR 75.4 m roland.rapelius@ha-research.de
Reuters: ISRG Enterprise Value: EUR 99.3 m
Leader in a fast growing niche for machine vision
ISRA Vision has a tight focus on machine vision systems for industrial
customers. These systems are used in the automation of optical surface inspection
mainly for continuous industrial production processes such as metals, glass and
plastics and for optical robot guidance. Core competences are the industry-specific
combination of soft- and hardware for fast and reliable surface inspection or, e.g., to
guide a robot when inserting a car glass at tolerance levels of less than 1mm.
Differentiation is based on ISRA Vision’s size, claiming a global #1 position in
surface inspection, c. 70% larger in its target markets compared to #2, Cognex, and a
European #1 in 3D machine vision. Moreover, a strong global sales and service
network and reference installations are valued by customers. Customers - mostly
global blue chips - buy the systems to cut costs, improve quality and maximise yield,
resulting in typical amortisation times of less than 6 months. As such, the value add of
machine vision systems is substantial.
Average sales growth of 14% and EBIT growth of 19% (CAGR 10/11E – 12/13E)
is expected, driven by significant savings for customers and rising product quality
requirements. The currently low market penetration of possibly only 15-20% supplies
healthy long-term growth prospects. For example, the automotive industry’s ratio of
robots-to-employees is c. 8x higher compared to other industries, highlighting the
largely untapped potential. The company’s track record of generating 2-digit profitable
growth is excellent. EBIT margins were always on 2-digit levels. On top, acquisitions
to apply the know-how to other industries are likely to continue.
Theme is mixed. While the stock’s low liquidity is burdening the sentiment, newsflow
looks set to turn positive driven by rising demand from important end industries such
as automotive (~14% of sales), as production lines are upgraded during summer.
Valuation is very cheap, trading at 1.1x EV/Sales vis-à-vis 19.3% EBIT margin and
7.8x P/E next year. All in all, in view of the excellent track record, 2-digit growth and
attractive valuation we initiate with BUY.
Y/E 30.9 (EUR m) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Sales 51.3 68.3 58.2 64.8 74.1 84.0 97.1
Sales growth 8 % 33 % -15 % 12 % 14 % 13 % 16 %
EBITDA 10.9 18.6 15.2 17.7 20.7 23.7 27.6
EBIT 6.2 12.9 9.3 11.5 13.6 16.2 19.1
Net income 5.1 7.6 6.5 7.0 8.2 9.7 11.7
Net debt 7.1 25.8 22.0 26.5 22.0 17.7 14.0
Net gearing 10.5 % 34.7 % 27.3 % 30.3 % 22.8 % 16.8 % 12.1 %
Net Debt/EBITDA 0.6 1.4 1.4 1.5 1.1 0.7 0.5
EPS fully diluted 1.18 1.76 1.52 1.62 1.88 2.24 2.69
CPS 0.44 0.16 2.45 0.37 1.67 1.61 1.56
DPS 0.15 0.15 0.15 0.20 0.20 0.25 0.30
Dividend yield 0.9 % 0.9 % 0.9 % 1.1 % 1.1 % 1.4 % 1.7 %
Gross profit margin 50.9 % 52.4 % 51.6 % 52.9 % 53.3 % 53.1 % 54.0 %
EBITDA margin 21.3 % 27.2 % 26.1 % 27.2 % 27.9 % 28.2 % 28.4 %
EBIT margin 12.0 % 18.9 % 15.9 % 17.7 % 18.3 % 19.3 % 19.7 %
ROCE 7.2 % 11.7 % 8.0 % 9.5 % 10.4 % 11.6 % 12.8 %
EV/sales 1.6 1.5 1.7 1.6 1.3 1.1 0.9
EV/EBITDA 7.7 5.5 6.4 5.8 4.8 4.0 3.3
EV/EBIT 13.7 7.9 10.6 9.0 7.3 5.9 4.8
PER 14.7 9.9 11.5 10.8 9.2 7.8 6.5
Adjusted FCF yield 5.9 % 8.9 % 7.7 % 7.7 % 9.4 % 11.8 % 14.4 %
Source: Company data, Hauck & Aufhäuser Close price as of: 17.06.2011
Tel.: +49 40 414 3885 86
Source: Company data, Hauck & Aufhäuser
20-June-11
High/low 52 weeks: 19.57 / 12.40
Price/Book Ratio: 0.8
Relative performance (SDAX):
3 months -5.6 %
6 months -3.8 %
12 months 7.1 %
Changes in estimates
2011
2012
2013
Key share data:
Sales EBIT EPS
old: 74.1 13.6 1.88
∆ - - -
old: 84.0 16.2 2.24
∆ - - -
old: 97.1 19.1 2.69
∆ - - -
Number of shares: (in m pcs) 4.3
Authorised capital: (in € m) 2.2
Book value per share: (in €) 22.3
Ø trading volume: (12 months) 8,369
Major shareholders:
Free Float 70.0 %
Enis Ersü (CEO) 25.0 %
Fidelity 10.0 %
Vision GbR 5.0 %
Argos 3.3 %
Henderson 2.5 %
Company description:
Machine vision systems for automated
surface inspection and industrial
automation.

ISRA Vision
Table of Contents
Company background 3
Investment case 4
Competitive Quality 4
Growth 6
Valuation 12
Theme 12
ROCE Decomposition 15
Valuation 19
Company background 21
Financials 26
Contacts: Hauck&Aufhäuser Investment Banking 32
2 Hauck & Aufhäuser Institutional Research

ISRA Vision
Company background
Products
Industrial Automation Surface Vision Group
Robot guidance systems for difficult tasks such
as positioning, assembly (e.g. car glass or tires),
handling or paint finishing.
Visual Inspection of glass, foils, and plastics at
high speeds or complex paint finished surfaces
(such as car bodies, home appliances,
components) - Control of objective criteria.
Service accounts for c. 10% of sales. Average selling price per system € 150,000.
Sales 2009/10 (€ m) 11.5 53.3 64.8
Sales share 18% 82% 100%
End markets
Market positions
Customers
Competitors
Raw Materials
Suppliers
Sales split (2009/10) by regions...
NAFTA
15%
Rest of
Europe
24%
Corporate sites
metal, glass, plastic, paper / specialty paper, automotive, print, solar & photovoltaics, packaging,
film & foils, nonwovens
ISRA Vision claims a global #1 position in surface inspection systems for continuous production
processes and a European #1 in 3D machine vision systems. By markets, ISRA Vision claims a #1
position in glass, metal, plastics/nonwoven and automotive and a position among the top 3 in paper
and solar glass.
No single customer accounts for more than 2% of sales: Daimler, VW, Ford, GM, Nissan, Hyundai,
Renault, Saint-Gobain, NSG Group, Pilkington, Asahi Glass, Schott, SolarWorld, WürthSolar,
Q.Cells, Solarwatt, Epcos, aleo, First Solar, JFE, Nippon Steel, Bao Steel, posco, riva, Corus,
ThyssenKrupp, ArcelorMittal, ChinaSteel, Constantia Packaging, MAN, UPM, M-real, Kimberly-
Clark, StoraEnso, International Paper, manroland, Du Pont, Bayer
Cognex, Perceptron, Advanced Vision Technology, Dr. Schenk, GP Solar, Vitronic, BST/Elexis,
KLA Tencor, Orbotech, VAI/Voestalpine
Asia
Pacific,
ROW
38%
Germany
23%
Personal computers, digital cameras, components
Sony, various electronic component manufacturers
Surface
Vision
82%
... divisions...
IndustrialAutomation
18%
...and customer industries
Paper
14%
Print
6%
Plastics
18%
Subsidiaries and offices in over 15 countries in Europe, North and South America and Asia.
EBIT 2009/10 (€ m) 1.9 9.6 11.5
margin 16.3% 18.0% 17.7%
ROCE n.a. n.a. 9.5%
Source: company data, Hauck & Aufhäuser
Metals
25%
Source: H&A estimates
Automotive
14%
General
Industries
2%
Glass
21%
3 Hauck & Aufhäuser Institutional Research

ISRA Vision
Investment case
Competitive Quality
Founded in 1985 as a supplier of „Intelligent Systems Robotics and
Automation”, ISRA Vision’s focus is on the niche of machine vision technology
for automation of manufacturing and quality control. Machine vision systems
typically consist of a camera, PC and software. In essence, products are
computers that can “see” and thus help to solve customers’ problems.
ISRA Vision’s focus within the market for machine vision technology is on the
high-end i.e. application-specific standard products and complex generic
standard products. It does not focus on the low-end machine vision market for
simple generic standard products such as sensors, basic hard- and software
modules and components. As a result, the average selling price per ISRA
Vision system is € 150,000.
ISRA Vision’s core competences of combing hard- and software know-how
incorporating intelligent detection algorithms in order to produce fast and
reliable surface quality data can be applied to various end markets. The fact
that ISRA Vision owns this know-how is a major driver of growth and returns.
Therefore, the scalability of the business model – driving bottom line growth -
looks high with respect to the transfer of existing technological competences.
Moreover, important success factors are industry-specific references as well
as a positive track record in a specific industry. These have been important
rationales for ISRA Vision’s acquisition of Parsytec (metals and paper surface
inspection systems) and Graphikon (wafer based solar cells and modules
surface inspection systems).
Differentiation is based on size, service network, reference installations and
track record.
• Competitors are a few larger and a large number of smaller local
suppliers. Compared to the smaller competitors, differentiation is based on
size which enables ISRA Vision to offer complete solutions (i.e. inspection
systems at several relevant stages of an entire production process) and
the respective industry-related know-how. Listed competitors include
Cognex (US, 2x larger based on total revenues, however, in surface
inspection which is ISRA Vision’s largest division, Cognex generated 15%
of ttl sales in 2010 only, translating into c. € 31m. Compared to that, ISRA
Vision is c. 70% larger based on 2009/10 sales). Other listed peers include
Perceptron (US) and AVT (Israel).
• Customers, machine builders who integrate the machine vision
functionality in a complete machine or end customers - i.e. mainly large,
globally active blue chip industrial companies - value a one-stop shopping
approach and a broad product portfolio, setting ISRA Vision apart from
smaller players. They also value ISRA Vision’s global sales and service
network as system uptime is critical. For example, a glass production line
more or less runs non-stop, 24/7 for several years, setting high
requirements for service and maintenance. A large sales and service
network cannot be run economically by a smaller competitor.
• Reference installations matter to customers in view of a systems’ long
lifetime and high total system costs of several € m compared to only €
150k for a machine vision system. These references are required to be
specific with respect to a customer’s industry – such as metals, glass,
automotive, plastic, solar glass, paper, print etc. – and with respect to a
certain process step within this industry (e.g. pre-dryer, dryer, reeler etc. in
a paper manufacturing process). ISRA Vision boasts a total of over 6,000
reference installations and a blue-chip customer base.
4 Hauck & Aufhäuser Institutional Research

ISRA Vision
o In the metals industry, for example, Andritz Metals Division, a
leading global suppliers of rolling mills and strip processing lines,
believes that ISRA Vision (Parsytec) and Cognex are market
leaders in visual surface inspection technology.
o SMS Siemag, a major global supplier of metals production and
processing equipment, values the ability of a supplier to deliver
customised quality inspection systems, flexibility and a positive
track record of delivering in time.
o In the paper industry, ISRA Vision boasts a world unique and
most complete portfolio of inspection systems at several stages of
the production process, including wire & trim, pick-up, open draw,
press-to-dryer, pre-dryer, dryer, size press and calendar and
reeler.
o In the glass industry, ISRA Vision claims a unique positioning
due to its all-in-one camera design and unique high-speed LED
technology combining several optical channels.
o In the solar industry, supported by ISRA Vision’s recent
acquisition of Graphikon in 2010, the company is able to offer fully
automated inspection combined with 100% defect recognition.
• ISRA Vision’s track record of generating profitable growth over the last
decade at double-digit sales growth rates and always generating 2-digit
EBIT margins as well as a sound balance sheet (54% equity ratio, 30%
net gearing) matter to customers as it signals financial health and stability.
In summary, these strengths have resulted in a global #1 market position in
visual surface inspection technology mainly for continuous industrial
manufacturing processes for metal, glass and plastics/nonwovens and a
European #1 position in 3D vision systems, mainly supplied to the automotive
industry. The company claims a top 3 position in the solar glass and a top 3-4
position in the paper industry.
High R&D supplies competitive defence versus smaller competitors.
ISRA Vision’s size allows the company to spend high amounts on R&D (13%
of 2010 sales) to support its technological expertise. These sums are unlikely
to be matched by smaller competitors. Among the listed competitors, Cognex’
R&D budgets are higher in absolute terms, however, the product mix and end
market focus (mainly on semiconductor and electronics) is different compared
to ISRA Vision and therefore limits direct comparisons.
Peer group – R&D budgets
R&D (€ m) % of sales employees
in R&D
% of total
employees
R&D (€ m) % of sales employees
in R&D
% of total
employees
end of
fiscal year
ISRA Vision 11.0 15.1% 76 18% 10.2 15.5% 73 20% 30.09.
AVT 7.1 17.9% 60 29% 8.5 22.8% 75 33% 31.12.
Cognex 23.5 11.4% 184 22% 22.1 17.7% 168 23% 31.12.
Perceptron 5.2 14.0% 45 20% 5.7 13.0% 47 21% 30.06.
Source: company data, Hauck & Aufhäuser
2010 2009
5 Hauck & Aufhäuser Institutional Research

ISRA Vision
Growth
Average sales growth of 14% (CAGR 2010/11E – 2012/13E)
Potentially adressable market of € 3.2 bn, actual market size possibly
well below € 1bn
The potential size of the market for machine vision technology focused by ISRA
Vision is estimated at € 3.2bn sales per year. By application, more than half of
the market is due to surface vision technology, followed by robot vision
technology and quality vision systems. Based on the assumption that currently
only 15% - 20% of the potentially adressable market is yet penetrated, the
actual addressable market size is assumed between € 480m - € 640m sales per
year.
Machine Vision market focused by ISRA Vision - potential of € 3.2 bn p.a.
Surface
Vision
56%
Source: Company data; Hauck & Aufhäuser
Robot Vision
27%
Quality Vision
17%
2-digit market growth
Growth rates of machine vision technology vary by subsectors, but are typically
assumed to be in the low 2-digit range, between c. 10% - 15% levels, driven by
the substantial cost savings and quality improvements.
VDMA expects 11% market growth this year, adding it could be exceeded
The VDMA, the German association for engineering and plant engineering, is
expecting that the market for industrial machine vision systems and
components is set to grow by 11% yoy in 2011 in terms of revenues of suppliers
located in Germany with customers located in Germany and abroad. The VDMA
is adding that this is a conservative scenario.
ISRA Vision’s growth is diversified by regions and customer industries
During the economic crisis in 2008/09, ISRA Vision’s revenues declined 15%
which is only one third compared to the German engineering sector decline of
45% (VDMA). This is the result of a broad sales exposure to end markets and
regions:
• By regions, the company generates nearly half of the revenues in Europe,
followed by Asia and NAFTA.
6 Hauck & Aufhäuser Institutional Research

ISRA Vision
ISRA Vision - Regional sales split (2009/10)
NAFTA
15%
Rest of Europe
24%
Source: Company data; Hauck & Aufhäuser
Asia Pacific,
ROW
38%
Germany
23%
• By customer industry, growth is driven by several and often uncorrelated
end markets including metals, glass, paper, print, plastics/nonwoven and
automotive.
ISRA Vision - Assumed sales split by industrial segement (2009/10)
Metals
25%
Paper
14%
Print
6%
Source: Hauck & Aufhäuser estimates
Automotive
14% General
Industries
2%
Plastics
18%
Glass
21%
Automotive industry’s demand to accelerate in calendar H2 2011
The Automotive industry is one of ISRA Vision’s important end markets,
accounting for c. 14% of 2009/10 group sales. During the Q2 2010/11
conference call on May 31, management said that in the summer months, when
production in the automotive industry is seasonally slow, the sales momentum
is expected to pick up significantly as new manufacturing lines or upgrades are
typically being installed during that period.
Major order win from Automotive industry published on June 15, 2011
ISRA Vision said it has finalized a new, long term framework agreement (2-digit
€m volume) with a German premium automobile manufacturer for the supply of
3D measurement systems in quality control of car body manufacturing.
7 Hauck & Aufhäuser Institutional Research

ISRA Vision
ISRA Vision –industry segment demand and positioning
Customer
Industry
2010/11E Trend ISRA Vision - market position
Metals #1, dominant market share
Glass
Plastics #1
Automotive
Paper
#1, dominant market share, #1 in
automotive glass
#1, unique position with broad
portfolio of 35 applications
among top 3, #1 in specialty paper
(treasury notes) with dominant
share
Print among top 3 or 4
Source: company data, Hauck & Aufhäuser
New applications such as pharma drive additional growth
In pharmaceutical industry, new coding regulations with respect to packaging
are driving the need for vision systems. It is only one example for growth driven
by new applications for machine vision systems. Growth rates of up to 20% in
this segment look plausible, offering room for additional growth.
Sharply rising camera performance and pixel processing power enable
faster inspection processes
Additionally, technological advances in the field of cameras and PCs are driving
growth. For example, camera pixel resolution has increased 6-fold and camera
bandwidth 10-fold within the last four years. At the same time, computer graphic
cards also became more powerful, increasing their pixel processing capacities
10-fold, from 14,000 to 140,000 lines per second equivalent to a capacity of 640
MByte per second. This enables substantially faster inspection processes and
hence triggers new investments or upgrades. For example, in steel production,
at a speed of 1,200 meter per minute (translating into 72 Km/h or 45 mph)
defect sizes of 150-200 µm can be recognised. In plastics, a web inspection
speed of up to 3,000 m/min and a resolution of up to 10 µm can be achieved.
Underlying growth driving customers’ need to increase quality and cut
costsM
Automation in manufacturing helps customers, which are typically industrial
engineering companies in the metals, glass, plastics, automotive, paper or print
industries, to solve two key problems: (1) to cut costs and (2) increase the
product quality by reducing the number of defects. As such, industrial
automation helps the customers to sustain their competitive edge.
8 Hauck & Aufhäuser Institutional Research

ISRA Vision
Reasons to invest in automation and robots include
• Cost reduction (wages, training, health costs, heating, lighting etc)
• Improve product quality (accuracy and repeatability of tedious tasks)
• Improve working environment quality for employees
• Increase output
• Increase flexibility in manufacturing
• Increase yield and reduce waste
• Increase safety standards
• Facilitate access to qualified labour
• Reduce working capital due to lower inventory and work in progress
• Reduce requirements for space in manufacturing
Mmoreover, machine vision systems produce quality data to maximise
yieldM
Machine vision systems generate quality data that customers are using to
maximise revenues by pricing the finished products according to their quality
level. That way, for example, a steel producer is able to identify different sheet
steel qualities which can then be sold at different price levels to maximise the
yield. For example, in automotive, lower steel quality grades can be sold to
mass producers while higher qualities are sold to German premium brands.
Mresulting in short payback periods for a new system
The payback period for a machine vision systems as part of an automised
production systems is typically below 6 months, according to the company. It is
driven by substantial cost savings on labour, increased throughput and reduced
waste, as well as quality improvements. Moreover, compared to the total costs
of a manufacturing cell or a complete production system, the costs of a machine
vision system account for typically only a fraction of total costs while the value
add in the process is significant.
Growth is supported by low market penetration levels
The market for machine vision technology is underpenetrated as only c. 15-20%
of the potential applications are using machine vision to date, according to the
company. Other industry sources estimate that only 10% of the potentially
addressable market for machine vision technology is yet penetrated, mainly
because some sectors have easier tasks to perform than others and certain
industries including automotive and electronics were able to adopt automation
technologies earlier than others. The ratio of robots-to-employees in the
automotive industry is 8x higher compared to other industries, according
to KUKA AG, highlighting the room for growth.
Moreover, certain sectors such as the footwear and clothing industries which
are using floppy materials that require sewing did not have access to
appropriate automation technology in the past and therefore shifted production
to low-cost regions.
Positive track record of generating profitable growth
ISRA Vision’s track record of generating profitable growth is excellent (15%
CAGR sales 2001-2010, always generated 2-digit EBIT margins). The company
generated 2-digit EBIT margins even during crisis years while the long-term
average EBIT margin (arithmetic mean 1998/99 – 2009/10) is 15%, while
average EBITDA margins stood at 23%.
9 Hauck & Aufhäuser Institutional Research

ISRA Vision
ISRA Vision - Impressive track record of generating profitable growth (€ m, %)
120
100
80
60
40
20
0
1997/98
1998/99
1999/00
2000/01
2001/02
2002/03
Source: Company data; Hauck & Aufhäuser
2003/04
2004/05
EBIT growth of 19% (CAGR 11E-13E)
2005/06
2006/07
2007/08
2008/09
2009/10
Sales EBITDA EBITDA-to-sales
2010/11E
2011/12E
2012/13E
High gross margins are setting the stage for earnings growth
High gross margins at levels of 54% supply the basis for operating leverage.
The company’s operating cost base is relatively lean, mainly driven by SG&A
and R&D costs. In the mid term, the following cost structure looks plausible:
• Sales and marketing expenses are assumed to remain < 20% of sales as
the distribution of the product is mainly done directly. General and
administration at c. 5% of sales.
• Total R&D costs are assumed at 14% - 15% of sales driven by the need to
constantly invest into new product developments and innovations in view
of the largely untapped market potential. This would be in line with the
ratio which competitor Cognex is targeting of 10% - 15% of sales going
forward.
• Depreciation and amortisation around c. 10% of sales (included in cost of
sales)
• A moderate financial result between 1% - 2% of sales driven by low net
debt levels of € 22m per end of 2010/11E, expected to decline going
forward.
• Resulting in mid-term target EBITDA margins to the tune of 30% and EBT
margins of roughly 20%.
35%
30%
25%
20%
15%
10%
5%
0%
10 Hauck & Aufhäuser Institutional Research

ISRA Vision
ISRA Vision – division sales and EBIT split
EUR m 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Divisional sales
Industrial Automation 11.0 12.5 14.2 15.8 10.9 11.5 12.3 13.6 15.3
Surface Vision 33.7 35.2 37.0 52.4 47.3 53.3 61.8 70.4 81.7
TTL 44.7 47.7 51.3 68.3 58.2 64.8 74.1 84.0 97.1
Divisional sales shares
Industrial Automation 25% 26% 28% 23% 19% 18% 17% 16% 16%
Surface Vision 75% 74% 72% 77% 81% 82% 83% 84% 84%
TTL 100% 100% 100% 100% 100% 100% 100% 100% 100%
Divisional sales growth
Industrial Automation na 14% 14% 11% -31% 6% 7% 10% 13%
Surface Vision na 4% 5% 42% -10% 13% 16% 14% 16%
TTL na 7% 8% 33% -15% 12% 14% 13% 16%
Source: Company data, Hauck&Aufhäuser
EUR m 2004/05 2005/06 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Divisional EBIT
Industrial Automation 2.0 2.5 2.2 3.0 1.3 1.9 2.3 2.6 3.0
Surface Vision 6.3 7.3 3.9 9.9 7.9 9.6 11.3 13.6 16.2
TTL 8.3 9.7 6.2 12.9 9.3 11.5 13.6 16.2 19.1
Divisional EBIT margin
Industrial Automation 18.1% 19.5% 15.8% 19.2% 12.3% 16.3% 18.4% 19.2% 19.3%
Surface Vision 18.6% 20.7% 10.5% 18.9% 16.8% 18.0% 18.3% 19.3% 19.8%
TTL 18.5% 20.4% 12.0% 18.9% 15.9% 17.7% 18.3% 19.3% 19.7%
Source: Company data, Hauck&Aufhäuser
11 Hauck & Aufhäuser Institutional Research

ISRA Vision
Valuation
• Adjusted FCFY points to a fair value between € 21.40 and € 27.60 per
share.
• DCF yields a fair value of € 26.00 per share.
• A peer group comparison is not very meaningful. US competitor
Cognex is c. 2x larger in terms of sales compared to ISRA Vision and has
a different product mix which also includes key components and is much
more focused on the electronics and semiconductor industry. As a result,
margins are higher compared to ISRA Vision (of 26.1% EBIT margin in
2010 vis-à-vis ISRA Vision 2009/10 EBIT margin of 17.7%). AVT’s and
Perceptron’s earnings forecasts, which are based on very few analyst
estimates, suggest that both are going to generate artificially low profits in
the coming two years following several years of operating losses in the
recent past. ISRA Vision always generated 2-digit EBIT margins, even in
crisis years, pointing to a higher competitive quality.
• The price target of € 25 per share is based on adjusted FCFY half way
between 2010/11E and 2011/12E.
Theme
• Managements’ plans to carry out further acquisitions looks set to draw
attention to the stock. The main rationale is to gain market share and
industry-specific expertise. Unless it is a major target, the deals are
expected to be financed by additional debt rather than equity.
• Company founder and CEO Enis Ersü is major shareholder. CEO Mr
Ersü owns 25% of the shares, aligning his interests with that of other
shareholders.
• Guidance for the current year reiterated. 2010/11 sales are expected
clearly be above € 70m, EBIT margin to remain at least stable. By
2013/14, management is targeting a € 100m sales volume based on
organic growth. Acquisitions would come on top.
• Return to growth and higher margins. After sales troughed in Q4
2008/09, the return to the growth path of 2-digit sales growth (+28% yoy,
+15% yoy, +25% yoy) in the recent three quarters was stunning.
12 Hauck & Aufhäuser Institutional Research

ISRA Vision
ISRA Vision - Quarterly sales and gross margins
25
20
15
10
5
0
Q1 '07/08
Q2 '07/08
Q3 '07/08
Q4 '07/08
Q1 '08/09
Q2 '08/09
Source: Company data, Hauck & Aufhäuser
Q3 '08/09
Q4 '08/09
Q1 '09/10
Q2 '09/10
Q3 '09/10
Q4 '09/10
Sales (€ m, left scale) Gross margin (%)
Q1 '10/11
Q2 '10/11
Adjusted for seasonality, the recovery becomes more apparent
When factoring out seasonality by looking at four quarters moving average
figures, the improving growth and margin development becomes apparent.
ISRA Vision - Quarterly sales and gross margins (moving average)
40%
30%
20%
10%
0%
-10%
-20%
Q4
'07/08
Q1
'08/09
Q2
'08/09
Q3
'08/09
Source: Company data, Hauck & Aufhäuser
Q4
'08/09
Q1
'09/10
Q2
'09/10
Q3
'09/10
Q4
'09/10
Q1
'10/11
Q2
'10/11
Sales growth (% yoy, 4Q MA, left scale) Gross margin (4Q MA, right scale)
• Positive press statements of peers and customers. Recent press
statements of automation industry players and customers point to high
growth momentum in the sector.
• Cognex, a competitor, on May 2, 2011, presented Q1 results and said
it is expecting to report strong sequential growth on both the top and
bottom line for the second quarter, based on the current level of
bookings.
56%
55%
54%
53%
52%
51%
50%
49%
48%
47%
55%
54%
54%
53%
53%
52%
52%
51%
51%
50%
13 Hauck & Aufhäuser Institutional Research

ISRA Vision
• ThyssenKrupp, one of ISRA Vision’s customers in the metals
segment, on May 23, 2011, said it is planning to invest € 300m in
three of its German sites to modernize the hot rolled manufacturing
equipment, saying it mainly focuses on the improvement of the quality
of the steel product while the investments are not expected to increase
the total annual output.
• DuPont, a customer, said it will invest € 12m this year in its German
sites, to improve the efficiency of internal logistics and to introduce
further automised robotics.
14 Hauck & Aufhäuser Institutional Research

ISRA Vision
ROCE Decomposition
Strong balance sheet
ISRA Vision’s total assets of € 161m at the end of fiscal 2009/10 (30.9.2010)
are mainly
• Fixed assets (€ 84m, 52% of total assets), thereof
o intangible assets of € 80.4m (50% of total asset), of which
goodwill accounts for € 37m or 23% of total assets (mainly
resulting from the acquisitions carried out in the past), internally
produced and capitalised assets (€ 28m, 17% of total assets) and
software and licenses (€ 15m, 9% of total assets).
• Inventory and accounts receivable account for 38% of total assets.
• Assets are financed to a large extent by equity (€ 88m, 54.4% of total
assets) and
• Bank debt (21%).
• The equity ratio is 54% and 31% adjusted for goodwill.
Balance sheet - Assets
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Source: company data, Hauck & Aufhäuser
Other assets
Fixed Assets
Accounts
Receivables
Inventories
Liquid Assets
2009/10
Balance sheet - Liabilities
Source: company data, Hauck & Aufhäuser
Solvency
ISRA Vision’s solvency looks set to improve further, driven by the expected
rising cash generation. Net debt / EBITDA looks set to decline in the
foreseeable future to levels below 1x with interest cover at very comfortable
levels of 12.8x by 2011/12E.
Solvency
100%
80%
60%
40%
20%
0%
100%
2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Net gearing (%) Equity ratio (%) Net debt / EBITDA (x)
Source: company data, Hauck & Aufhäuser
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
4.0x
3.0x
2.0x
1.0x
0.0x
Other liabilities
Acct. payables
Provisions
Interest bearing
liabilities
Equity
2009/10
15 Hauck & Aufhäuser Institutional Research

ISRA Vision
Capex and R&D
The capex volume is expected to remain at a high level between 10% - 12% of
sales going forward, exceeding D&A. Reason: the value of ISRA Vision’s
capital base is largely determined by the value of its product portfolio.
Consequently, the company has invested considerably and continuously in the
past, whereas property, plant and equipment are hardly required, accounting
for 1.7% of total assets only. 2009/10 total capex of € 8.3m (vis-à-vis total D&A
of € 6.2m) is mainly due to internally produced and capitalised assets of €
7.9m and fixed asset investments of € 0.5m. Internally produced and
capitalised assets are depreciated over the useful life of typically 6 years. A
pronounced capex cycle is not expected. Maintenance capex is assumed to
remain on relatively high levels as R&D is assumed to act as an innovator and
develop new applications in what is a largely untapped market potential.
R&D costs reported in the P&L under cost-of-sales accounting in 2009/10 of €
8.3m (12.9% of sales) differ only slightly from the capitalised amount. Reason:
reported R&D costs are resulting from total R&D costs of € 11.0m, plus
depreciation of € 5.5m (added back), less capitalised R&D of € 7.9m, less €
0.2m grants.
Capex bar and Capex/depreciation
20.0
18.0
16.0
14.0
12.0
10.0
8.0
6.0
4.0
2.0
0.0
2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Source: company data, Hauck & Aufhäuser
Capex Capex / Depreciation (x)
Cash conversion cycle
Compared to its direct stock-listed peers and other players from the sector,
ISRA Vision’s cash conversion cycle is longer, owing to relatively high
inventory levels, high accounts receivable and higher than average accounts
payable. To some extent, this is likely driven by the product mix as competitors
such as Cognex or Basler are also selling components while ISRA Vision is
focused almost entirely on selling complete systems which are following
lumpier dynamics in terms of revenue recognition. That said, the company has
recently hired a new finance manager to focus on working capital efficiency
which should lower the cash conversion cycle.
2.0x
1.8x
1.6x
1.4x
1.2x
1.0x
0.8x
0.6x
0.4x
0.2x
0.0x
16 Hauck & Aufhäuser Institutional Research

ISRA Vision
Cash flow analysis
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
w/c / sales (%) Cash conversion cycle (days)
Source: company data, Hauck & Aufhäuser
Operating efficiency
Operating efficiency looks set to increase moderately going forward, driven by
rising capacity utilisation and increasing productivity in terms of sales per
employee which is supported by 2-digit sales growth.
Cost base and leverage
100%
80%
60%
40%
20%
0%
2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Opex / sales (%) Personnel costs / sales (%) Sales / Employee (€k)
Source: company data, Hauck & Aufhäuser
Capital employed turnover
On the basis of ISRA Vision’s healthy average sales growth of 12% annually
and declining working capital-to-sales ratio, sales growth looks set to exceed
capital employed growth, resulting in rising capital turnover.
400
350
300
250
200
150
100
50
0
300.0
250.0
200.0
150.0
100.0
50.0
0.0
17 Hauck & Aufhäuser Institutional Research

ISRA Vision
Capital employed turnover and sales
1.0
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0.0
2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Capital turn (x) Sales (€m)
Source: company data, Hauck & Aufhäuser
Returns
Driven by rising operating margins on the back of rising sales and operating
leverage and a well controlled cost base, return on capital employed looks set
to return to higher levels, clearly exceeding cost of capital going forward.
Hence, the company does create value.
The degree of cyclicality of returns looks limited, supported by the broad based
sales split by end market and by regions which are often uncorrelated.
Returns look sustainable at levels above ROCE defended by efficient barriers
to entry due to high R&D spending and ISRA Vision’s large global sales and
service network which smaller competitors cannot run economically.
Returns
20%
15%
10%
5%
0%
2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
ROCE WACC WACC pre tax
Source: company data, Hauck & Aufhäuser
120.0
100.0
80.0
60.0
40.0
20.0
0.0
18 Hauck & Aufhäuser Institutional Research

ISRA Vision
Valuation
The valuation is a very attractive feature of the investment case. Our
conservative scenario points to significant upside. We have applied the
following valuation methodologies:
• Multi-stage DCF model
• Adjusted FCF
A peer group comparison is not very meaningful as the listed peers are either
much larger and have a different product mix (Cognex, machine vision
systems as well as components) or smaller, not well covered by sell-side
analysts and expected to be suffering from the crisis years (AVT, Perceptron).
DCF yields a fair value of € 26 per share
The terminal value accounts for 70% of the total present value based on a
terminal year EBIT margin of 17% which seems realistic in view of the
company’s track record. Long-term growth of 2.5% is slightly above average,
reflecting the largely underpenetrated market for machine vision technology,
expected to drive 2-digit market growth.
DCF (EUR m)
(except per share data and beta)
NOPAT
Depreciation
Increase/decrease in working capital
Increase/decrease in long-term provisions and accruals
Capex
Acquisitions
Capital increase
Cash flow
Present value
WACC
2011E 2012E 2013E 2014E 2015E 2016E 2017E 2018E
Terminal
value
8.8 10.5 12.4 13.7 14.8 15.9 17.1 18.4 17.0
7.1 7.5 8.4 9.3 10.0 10.8 11.6 12.5 14.9
-0.9 -2.7 -4.9 -6.6 -5.2 -5.6 -6.0 -6.4 -6.9
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
-9.0 -9.3 -10.4 -11.5 -12.1 -12.5 -13.2 -13.9 -14.9
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
5.9 6.0 5.6 5.1 7.5 8.6 9.5 10.5 10.1
5.7 5.4 4.7 3.9 5.4 5.6 5.8 5.9 97.6
6.8% 7.0% 7.2% 7.3% 7.6% 8.0% 8.0% 8.0% 8.0%
DCF per share derived from DCF avg. growth and earnings assumptions
Total present value 140 Short term growth (2010-2013) 14.4%
thereof terminal value 70% Medium term growth (2013 - 2017) 8.2%
Net debt (net cash) at start of year 26 Long term growth (2017 - infinity) 2.5%
Financial assets 1 Terminal year EBIT margin 17.0%
Pension provisions and off balance sheet debt 2
Equity value 113 WACC derived from
No. of shares outstanding
4.3
Cost of borrowings before taxes 4.1%
Discounted cash flow per share 26.0 Tax rate 35.0%
upside/(downside) 50% Cost of borrowings after taxes 2.7%
Required return on invested capital 8.0%
Risk premium 5.0%
Risk-free rate 3.0%
Share price 17.40 Beta 1.0
Sensitivity analysis DCF Sensitivity analysis DCF
WACC
Long term growth EBIT margin terminal year
26.0 0.5% 1.5% 2.5% 3.5% 4.5% 26.0 15.0% 16.0% 17.0% 18.0% 19.0%
10.0% 14.5 15.9 17.6 20.0 23.1 10.0% 14.8 16.2 17.6 19.0 20.4
9.0% 16.7 18.6 21.1 24.5 29.4 9.0% 17.6 19.4 21.1 22.9 24.6
8.0% 19.7 22.4 26.0 31.3 39.6 8.0% 21.6 23.8 26.0 28.3 30.5
WACC
7.0% 23.7 27.7 33.3 42.2 58.2 7.0% 27.4 30.4 33.3 36.3 39.2
6.0% 29.4 35.5 45.0 62.2 102.2 6.0% 36.8 40.9 45.0 49.1 53.2
19 Hauck & Aufhäuser Institutional Research

ISRA Vision
Adjusted FCF points to a fair value of € 25.00 per share
Smaller companies rarely bear sufficient resemblance to peers in terms of
geographical exposure, size or competitive strength and long-term returns
often are flawed by the lack of sufficient visibility. Therefore, an Adjusted Free
Cash Flow analysis (Adjusted FCF) has additionally been conducted.
The main driver of this model is the level of return available to a controlling
investor, influenced by the cost of that investors’ capital (opportunity costs)
and the purchase price –the enterprise value of the company.
Here, the adjusted FCF yield is used as a proxy for the required return and is
defined as EBITDA less minority interest, taxes and investments required to
maintain existing assets (maintenance capex). Simply put, the model assumes
that investors require companies to generate a minimum return on the
investor’s purchase price.
The fair value based on adjusted FCF in 2011/12E of € 27.60 is significantly
higher compared to the fair value based on 2010/11E estimates, driven by
earnings growth coupled with reduced net debt, lowering the EV. The price
target is derived by valuing the stock half-way between 2010/11E and
2011/12E, which points to a fair value of € 25.00 per share.
FCF yield, year end Sept. 30 2010/11E 2011/12E 2012/13E
EBITDA 20.7 23.7 27.6
- Maintenance capex 7.1 7.5 8.4
- Minorities 0.0 0.0 0.0
- tax expenses 4.4 5.2 6.3
= Adjusted Free Cash Flow 9.2 11.0 12.9
Actual Market Cap 75.4 75.4 75.4
+ Net debt (cash) 22.0 17.7 14.0
+ Pension provisions 1.9 1.9 1.9
+ Off balance sheet financing 0.0 0.0 0.0
+ Adjustments prepayments 0.0 0.0 0.0
- Financial assets -1.2 -1.2 -1.2
- Dividend payment -0.9 -0.9 -1.1
EV Reconciliations 21.9 17.6 13.6
= Actual EV' 97.3 93.0 89.1
Adjusted Free Cash Flow yield 9.4% 11.8% 14.4%
Sales 74.1 84.0 97.1
Actual EV/sales 1.3x 1.1x 0.9x
Hurdle rate 8.0% 8.0% 8.0%
FCF margin 12.4% 13.1% 13.3%
Fair EV/sales 1.5x 1.6x 1.7x
Fair EV 114.8 137.1 160.8
- EV Reconciliations 21.9 17.6 13.6
Fair Market Cap 93.0 119.6 147.2
No. of shares (million) 4.3 4.3 4.3
Fair value per share 21.4 27.6 34.0
Premium (-) / discount (+) in % 23.2% 58.5% 95.1%
Source: Hauck & Aufhäuser
20 Hauck & Aufhäuser Institutional Research

ISRA Vision
Company background
Business model
Whenever the limits of human visual perception are surpassed, machine vision
technology is used to inspect welds, surfaces, printed pattern, folded carton,
identify workpieces, guide robots or check completeness. Intelligent systems
are able to learn recurring defects and allow for a systematic rectification,
resulting in improved up-time.
Also, defective parts are not passed on to subsequent manufacturing stages,
thus enabling a 100% quality target in a cost effective way. ISRA Vision’s core
competences (called BrainWARE ®) are due to the combination of soft- and
hardware, incorporating industry-specific process know-how, algorithms to
process vision data and an optimal system design to produce quality data in a
reliable and fast way.
ISRA Vision AG provides systems for industrial image processing using
application-specific modular standard software solutions for surface inspection,
robot guidance, and quality control applications, which are developed,
produced and marketed by the company. The application specific machine
vision systems are focusing on:
• Automation of quality control
• Automation of production
• Yield enhancing production decision intelligence
Reporting divisions
ISRA Vision operates in two divisions:
• Surface Vision Division (82% of 2009/10 sales): optical quality
inspection systems mainly for sheet products such as flat glass, solar,
display glass, paper, plastic, nonwoven and metal. Surface Vision focuses
primarily on surface inspection technology mainly for web materials like
flat glass, solar glass and display glass, foil, plastics, print, metal, paper
and others. These materials are checked for defects during the production
process.
Surface Vision – optical in-line print inspection and documentation
Source: company data
• Industrial Automation Division (18% of 2009/10 sales): Robot vision
systems (2D or 3D) mainly supplied to the automotive, engineering,
automation and general industry. For example, these systems enable a
robot to insert a car windshield glass at a tolerance level of less than 1mm
or to mount a wheel without scratching the car body. The Industrial
Automation division focuses on the automotive and general industries.
21 Hauck & Aufhäuser Institutional Research

ISRA Vision
Primarily, these are the automobile industry, machine tool manufacturers,
plant and system manufacturers and the original equipment manufacturer
(OEM) markets. Robot Vision and Quality Vision products are mainly
offered in this segment, but also other technologies like surface inspection
is offered.
Industrial Automation – automotive wheel assembly
Source: company data
Company history
Foundation of ISRA
Systemtechnik GmbH
at the Technical
University of the City
of Darmstadt,
Germany.
2001-
1985 1988 1996 1997 2000
2007 2008
2006-
The first system for
automotive
development
obtained the Hessian
Innovation Award.
ISRA supervised
TEXAUGE, a
commercial and
scientific project for
fast surface and
texture inspection.
Source: Company data, Hauck & Aufhäuser
Customers
Enis Ersü, CEO,
carried out a spin-off
and founded the
ISRA VISION GmbH.
After the creation of
ISRA VISION AG, the
company went public.
Volkswagen achieved
equipment for the
Transparent Factory.
Several acquisitions,
joint-ventures and cooperations
were
placed. Long-term
contractual agreements
were signed.
Due to the various and diversified application areas of the product portfolio, a
broad variety of industries are supplied by ISRA Vision.
Industries
ISRA VISION was
awarded as one of
the TOP 100 most
innovative German
SMEs.
Expansion to Brasilia,
India and Spain.
Today, ISRA VISION
is represented in 13
countries like Japan,
USA, China, UK,
France and others.
Automotive Solar & Photovoltaic Metal Packing Paper,
Specialty Paper
Glass Film & Foils Nonwovens Plastics Print
Source: Company data; Hauck & Aufhäuser
The customer list includes mainly globally producing, blue-chip industrials
including Daimler, VW, Ford, GM, Nissan, Hyundai, Renault, Saint-Gobain,
NSG Group, Pilkington, Asahi Glass, Schott, SolarWorld, WürthSolar, Q.Cells,
Solarwatt, Epcos, aleo, First Solar, JFE, Nippon Steel, Bao Steel, posco, riva,
Corus, ThyssenKrupp, ArcelorMittal, ChinaSteel, Constantia Packaging, MAN,
UPM, M-real, Kimberly-Clark, StoraEnso, International Paper, manroland, Du
Pont, Bayer.
Regional split
ISRA Vision AG is headquartered in Darmstadt, Germany and represented by
its international subsidiaries and offices worldwide. Due to the early
international expansions, such as ISRA Vision, Lansing, Michigan/ USA or
22 Hauck & Aufhäuser Institutional Research

ISRA Vision
ISRA Vision France in Lyon, the company has an almost balanced global
revenue breakdown.
Regional sales 2010
NAFTA
15%
Rest of Europe
24%
Source: Company data, Hauck & Aufhäuser
Asia Pacific,
ROW
38%
Germany
23%
Today, ISRA is represented by more than 20 sites in 13 countries worldwide.
Recently the site in Tianjin, China was added while a site in Moscow, Russia is
in preparation. A various number of international joint ventures, acquisitions
and long-term contractual agreements with leading partners is located
strategically close to important customer production facilities.
ISRA Vision: Corporate presences
Source: Company data; Hauck & Aufhäuser
Competitors
Competition is characterised by a large number of smaller suppliers and a few
larger, globally active suppliers of machine vision components and solutions.
Cognex Corp., USA; Foundation in 1981; Market cap €975.1m;
Employees 824
Cognex provides machine vision products that capture and analyse visual
information to automate tasks, primarily in manufacturing processes. Surface
inspection accounts for 15% of 2010 sales. The products include complete
vision systems as well as components. It operates in two divisions: Modular
Vision Systems and Surface Inspection Systems. The first division markets
modular vision systems that are used to automate the manufacture of discrete
items by locating, identifying, inspecting, and measuring them during the
manufacturing process. The Surface Inspection Systems division develops
and provides surface inspection vision systems to inspect the surfaces of
materials processed, such as metals, paper, nonwovens, plastics, and glass.
23 Hauck & Aufhäuser Institutional Research

ISRA Vision
By end markets, Cognex claims a leading position as a supplier to the
semiconductor and electronics industries since its inception in the early 1980s
as a provider of wafer ID solutions. Since then, Cognex has expanded its
offerings into all industries and provides specific solutions for the food and
beverage sectors, packaging industry, solar production and vision guided
robotics solutions.
Perceptron, USA, Foundation in 1981; Market cap €39.3m;
Employees 223
Perceptron was founded as a supplier of high technology, laser-based, noncontact
measurement systems for industrial manufacturers to reduce process
variation that occurs in the manufacturing process. Today Perceptron has two
diverse lines of business – the Industrial Business Unit and the Commercial
Products Business Unit.
The Industrial Business Unit provides highly-configurable measurement
solutions that are used by manufacturers to monitor part quality. Perceptron
primarily supplies to the automotive industry, mainly to assembly and
fabrication plants.
The Commercial Products Business Unit was formed to diversify Perceptron’s
experience into different market segments. Perceptron’s first commercial
product was initially launched in the spring of 2007. In strategic partnerships
with Snap-on, Rothenberger, Greenlee and Bosch, Perceptron sells visual
inspection products and a line of accessories to mechanics, plumbers,
electricians, heating & cooling contractors, and construction trades people
along with do-it-yourself homeowners.
Additionally, the company offers value-added services comprising training,
field services, launch support services, consulting services, maintenance
agreements, repairs, and software tools. The company operates in the
Americas, Asia and Europe.
AVT, Israel; Foundation in 1992; Market cap €24,6m;
Employees 205
Advanced Vision Technology Ltd. seems to be competitor only in the print end
market. AVT provides products for automatic inspection of printed materials
and press control, closed loop colour control, colour management, and
reporting software. The company's main product is used to automatically
detect defects and variations unrecognisable by the human eye in various
printing processes. AVT's vision inspection systems improve output quality
and labour efficiency, and reduce material waste. Further, installation, training
and support services are offered. Advanced Vision Technology sells its
products directly to end users as well as through distributors and strategic
partners in the United States and Europe.
Elexis AG, Germany; Foundation in 1995; Market cap €180.3m;
Employees 776
Elexis AG manufactures and sells industrial automation systems. Elexis seems
to compete vs. ISRA Vision only in its printing division. Its Factory Automation,
Steel, and Printing division involves the manufacture and sale of web and strip
guiding systems that automatically control the strip running of fast moving
materials, such as metal, paper, foil, and rubber. The company’s Factory
Automation, Plastics division produces automated handling systems for fast
moving production processes, which ensure the material flow of moulded
plastic components. It sells its products in Europe, America and Asia. On May
9, 2011, SMS Group, a private group manufacturing machinery and complete
plants for the steel and plastics extrusion industries, placed a takeover bid of €
19 per Elexis share. The offer price values Elexis at 13.3x PER 2011E and
6.8x EV/EBIT 2011E, based on our assumptions.
24 Hauck & Aufhäuser Institutional Research

ISRA Vision
Shareholder structure
The major shareholder, Enis Ersü, is the founder and CEO of ISRA Vision AG.
The free float of 70% is calculated excluding the stakes of the CEO of Vision
GbR. Other shareholdings are included in the free float. The company is
publicly listed in the Prime Standard of the Frankfurt Stock Exchange.
Shareholder structure
other
55%
Henderson
2%
Argos
3%
Vision GbR
5%
Source: Bigdough, Hauck & Aufhäuser
Fidelity
10%
Enis Ersü
(CEO)
25%
25 Hauck & Aufhäuser Institutional Research

ISRA Vision
Financials
Profit and loss (EUR m) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Sales 51.3 68.3 58.2 64.8 74.1 84.0 97.1
Sales growth 7.5 % 33.1 % -14.8 % 11.5 % 14.3 % 13.3 % 15.5 %
Cost of sales 25.2 32.5 28.2 30.5 34.6 39.4 44.6
Gross profit 26.1 35.8 30.0 34.3 39.5 44.6 52.4
Sales and marketing 8.9 11.1 10.3 11.5 13.3 14.9 17.3
General and administration 4.6 4.4 3.8 3.8 4.1 4.5 5.0
Research and development 6.4 7.5 7.7 8.3 9.0 10.3 12.3
Other operating income -0.1 0.2 1.0 0.9 0.5 1.2 1.4
Other operating expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Unusual or infrequent items 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBITDA 10.9 18.6 15.2 17.7 20.7 23.7 27.6
Depreciation 0.5 0.6 0.6 0.6 0.9 1.1 1.7
EBITA 10.4 18.0 14.6 17.0 19.8 22.6 25.8
Amortisation of goodwill 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortisation of intangible assets 4.3 5.0 5.4 5.5 6.2 6.4 6.7
Impairment charges 0.0 0.0 0.0 0.0 0.0 0.0 0.0
EBIT 6.2 12.9 9.3 11.5 13.6 16.2 19.1
Interest income 0.2 0.4 0.1 0.1 0.1 0.2 0.2
Interest expenses 0.0 2.0 1.1 0.9 1.1 1.4 1.4
Other financial result 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Financial result 0.2 -1.6 -1.0 -0.9 -1.0 -1.3 -1.2
Recurring pretax income from continuing operations 6.3 11.3 8.3 10.6 12.6 15.0 17.9
Extraordinary income/loss 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Earnings before taxes 6.3 11.3 8.3 10.6 12.6 15.0 17.9
Taxes 0.8 3.3 1.8 3.6 4.4 5.2 6.3
Net income from continuing operations 5.5 8.0 6.4 7.0 8.2 9.7 11.7
Result from discontinued operations (net of tax) 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net income 5.5 8.0 6.4 7.0 8.2 9.7 11.7
Minority interest 0.4 0.4 0.0 0.1 0.0 0.0 0.0
Net income (net of minority interest) 5.1 7.6 6.5 7.0 8.2 9.7 11.7
Average number of shares 4.3 4.3 4.3 4.3 4.3 4.3 4.3
EPS reported 1.18 1.76 1.52 1.62 1.88 2.24 2.69
Profit and loss (common size) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Sales 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 49.1 % 47.6 % 48.4 % 47.1 % 46.7 % 46.9 % 46.0 %
Gross profit 50.9 % 52.4 % 51.6 % 52.9 % 53.3 % 53.1 % 54.0 %
Sales and marketing 17.3 % 16.3 % 17.7 % 17.8 % 17.9 % 17.7 % 17.8 %
General and administration 8.9 % 6.5 % 6.5 % 5.9 % 5.6 % 5.3 % 5.2 %
Research and development 12.5 % 11.0 % 13.2 % 12.9 % 12.1 % 12.2 % 12.7 %
Other operating income -0.2 % 0.3 % 1.8 % 1.3 % 0.7 % 1.4 % 1.4 %
Other operating expenses 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Unusual or infrequent items 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
EBITDA 21.3 % 27.2 % 26.1 % 27.2 % 27.9 % 28.2 % 28.4 %
Depreciation 1.0 % 0.9 % 1.0 % 1.0 % 1.2 % 1.3 % 1.8 %
EBITA 20.3 % 26.3 % 25.1 % 26.2 % 26.7 % 26.9 % 26.6 %
Amortisation of goodwill 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Amortisation of intangible assets 8.3 % 7.3 % 9.2 % 8.5 % 8.4 % 7.6 % 6.9 %
Impairment charges 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
EBIT 12.0 % 18.9 % 15.9 % 17.7 % 18.3 % 19.3 % 19.7 %
Interest income 0.3 % 0.6 % 0.2 % 0.1 % 0.2 % 0.2 % 0.2 %
Interest expenses 0.0 % 2.9 % 2.0 % 1.5 % 1.5 % 1.7 % 1.4 %
Other financial result 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Financial result 0.3 % -2.3 % -1.7 % -1.4 % -1.4 % -1.5 % -1.2 %
Recurring pretax income from continuing operations 12.3 % 16.6 % 14.2 % 16.4 % 16.9 % 17.8 % 18.5 %
Extraordinary income/loss 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Earnings before taxes 12.3 % 16.6 % 14.2 % 16.4 % 16.9 % 17.8 % 18.5 %
Tax rate 12.4 % 29.5 % 22.3 % 34.0 % 35.0 % 35.0 % 35.0 %
Net income from continuing operations 10.8 % 11.7 % 11.0 % 10.8 % 11.0 % 11.6 % 12.0 %
Result from discontinued operations (net of tax) 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Net income 10.8 % 11.7 % 11.0 % 10.8 % 11.0 % 11.6 % 12.0 %
Minority interest 0.8 % 0.6 % -0.1 % 0.1 % 0.0 % 0.0 % 0.0 %
Net income (net of minority interest) 10.0 % 11.1 % 11.1 % 10.7 % 11.0 % 11.6 % 12.0 %
Source: Company data, Hauck & Aufhäuser
26 Hauck & Aufhäuser Institutional Research

ISRA Vision
Balance sheet (EUR m) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Intangible assets 62.0 69.7 71.5 80.4 82.6 84.8 87.6
Property, plant and equipment 2.8 2.6 2.7 2.8 2.6 2.2 1.3
Financial assets 0.0 0.0 0.9 1.2 1.2 1.2 1.2
FIXED ASSETS 64.8 72.3 75.1 84.4 86.3 88.2 90.1
Inventories 15.9 17.2 15.1 14.1 16.2 18.3 21.2
Accounts receivable 31.7 37.8 37.1 46.9 46.7 48.3 51.9
Other current assets 4.6 6.5 2.9 2.3 3.3 3.4 3.6
Liquid assets 22.3 12.6 7.2 8.0 12.5 16.8 20.5
Deferred taxes 3.8 3.3 4.4 5.3 6.3 6.4 6.6
Deferred charges and prepaid expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0
CURRENT ASSETS 78.3 77.4 66.7 76.6 84.9 93.2 103.7
TOTAL ASSETS 143.1 149.7 141.8 160.9 171.3 181.4 193.8
SHAREHOLDERS EQUITY 68.0 74.5 80.4 87.5 96.6 105.4 116.0
MINORITY INTEREST 2.0 1.2 0.8 0.8 0.8 0.8 0.8
Long-term debt 4.2 24.9 26.9 23.2 23.2 23.2 23.2
Provisions for pensions and similar obligations 1.6 1.8 1.8 1.9 1.9 1.9 1.9
Other provisions 2.9 1.8 2.7 1.4 1.4 1.4 1.4
Non-current liabilities 8.7 28.5 31.4 26.5 26.5 26.5 26.5
short-term liabilities to banks 25.2 13.5 2.2 11.3 11.3 11.3 11.3
Accounts payable 6.0 8.3 5.3 7.1 8.0 9.1 10.5
Advance payments received on orders 0.0 0.6 0.4 0.0 0.0 0.0 0.0
Other liabilities (incl. from lease and rental contracts) 22.6 10.9 8.2 9.4 9.7 10.0 10.3
Deferred taxes 10.6 12.3 13.0 18.4 18.4 18.4 18.4
Deferred income 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Current liabilities 64.4 45.5 29.2 46.2 47.5 48.8 50.5
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 143.1 149.7 141.8 160.9 171.3 181.4 193.8
Balance sheet (common size) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Intangible assets 43.4 % 46.5 % 50.4 % 50.0 % 48.2 % 46.7 % 45.2 %
Property, plant and equipment 1.9 % 1.8 % 1.9 % 1.7 % 1.5 % 1.2 % 0.7 %
Financial assets 0.0 % 0.0 % 0.6 % 0.7 % 0.7 % 0.6 % 0.6 %
FIXED ASSETS 45.3 % 48.3 % 53.0 % 52.4 % 50.4 % 48.6 % 46.5 %
Inventories 11.1 % 11.5 % 10.6 % 8.8 % 9.4 % 10.1 % 10.9 %
Accounts receivable 22.1 % 25.2 % 26.2 % 29.1 % 27.3 % 26.6 % 26.8 %
Other current assets 3.2 % 4.3 % 2.1 % 1.4 % 1.9 % 1.9 % 1.9 %
Liquid assets 15.6 % 8.4 % 5.1 % 5.0 % 7.3 % 9.2 % 10.6 %
Deferred taxes 2.6 % 2.2 % 3.1 % 3.3 % 3.7 % 3.5 % 3.4 %
Deferred charges and prepaid expenses 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
CURRENT ASSETS 54.7 % 51.7 % 47.1 % 47.6 % 49.6 % 51.4 % 53.5 %
TOTAL ASSETS 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
SHAREHOLDERS EQUITY 47.5 % 49.7 % 56.7 % 54.4 % 56.4 % 58.1 % 59.8 %
MINORITY INTEREST 1.4 % 0.8 % 0.6 % 0.5 % 0.5 % 0.4 % 0.4 %
Long-term debt 2.9 % 16.6 % 19.0 % 14.4 % 13.6 % 12.8 % 12.0 %
Provisions for pensions and similar obligations 1.1 % 1.2 % 1.3 % 1.2 % 1.1 % 1.0 % 1.0 %
Other provisions 2.0 % 1.2 % 1.9 % 0.9 % 0.8 % 0.8 % 0.7 %
Non-current liabilities 6.1 % 19.0 % 22.2 % 16.4 % 15.4 % 14.6 % 13.7 %
short-term liabilities to banks 17.6 % 9.0 % 1.6 % 7.0 % 6.6 % 6.2 % 5.8 %
Accounts payable 4.2 % 5.5 % 3.8 % 4.4 % 4.7 % 5.0 % 5.4 %
Advance payments received on orders 0.0 % 0.4 % 0.3 % 0.0 % 0.0 % 0.0 % 0.0 %
Other liabilities (incl. from lease and rental contracts) 15.8 % 7.3 % 5.8 % 5.9 % 5.7 % 5.5 % 5.3 %
Deferred taxes 7.4 % 8.2 % 9.2 % 11.5 % 10.8 % 10.2 % 9.5 %
Deferred income 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %
Current liabilities 45.0 % 30.4 % 20.6 % 28.7 % 27.7 % 26.9 % 26.1 %
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %
Source: Company data, Hauck & Aufhäuser
27 Hauck & Aufhäuser Institutional Research

ISRA Vision
Cash flow statement (EUR m) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Net profit/loss 5.5 8.0 6.4 7.0 8.2 9.7 11.7
Depreciation of fixed assets (incl. leases) 0.5 0.6 0.6 0.6 0.9 1.1 1.7
Amortisation of goodwill 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortisation of intangible assets 4.3 5.0 5.4 5.5 6.2 6.4 6.7
Others -3.0 0.8 4.3 5.2 0.0 0.0 0.0
Cash flow from operations before changes in w/c 7.3 14.4 16.7 18.4 15.2 17.2 20.1
Increase/decrease in inventory -3.2 -1.3 2.2 0.4 -2.0 -2.2 -2.8
Increase/decrease in accounts receivable -5.1 -7.9 2.0 -10.9 0.1 -1.6 -3.5
Increase/decrease in accounts payable 7.6 1.1 -4.5 -0.2 1.0 1.1 1.4
Increase/decrease in other working capital positions 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Increase/decrease in working capital -0.6 -8.1 -0.3 -10.6 -0.9 -2.7 -4.9
Cash flow from operating activities 6.7 6.4 16.4 7.7 14.3 14.5 15.2
CAPEX 8.5 9.0 8.9 8.3 9.0 9.3 10.4
Payments for acquisitions 17.9 13.5 1.9 1.6 0.0 0.0 0.0
Financial investments 0.0 0.0 0.0 0.2 0.0 0.0 0.0
Income from asset disposals 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Cash flow from investing activities -26.3 -22.5 -10.8 -10.2 -9.0 -9.3 -10.4
Cash flow before financing -19.6 -16.1 5.5 -2.4 5.3 5.2 4.8
Increase/decrease in debt position 27.2 9.0 -9.2 4.7 0.0 0.0 0.0
Purchase of own shares 0.0 0.5 0.6 0.6 0.0 0.0 0.0
Capital measures 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Dividends paid 0.7 0.7 0.6 0.7 0.9 0.9 1.1
Others 0.3 -1.5 -0.4 -0.4 0.0 0.0 0.0
Effects of exchange rate changes on cash -0.4 0.0 -0.1 0.3 0.0 0.0 0.0
Cash flow from financing activities 26.8 6.3 -10.8 3.0 -0.9 -0.9 -1.1
Increase/decrease in liquid assets 6.8 -9.7 -5.4 0.9 4.4 4.3 3.7
Liquid assets at end of period 22.3 12.5 7.2 8.0 12.5 16.8 20.5
Source: Company data, Hauck & Aufhäuser
Regional split (EUR m) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
Domestic 0.0 0.0 15.6 15.1 16.2 17.2 19.7
yoy change n/a n/a n/a -3.4 % 7.4 % 6.3 % 14.8 %
Rest of Europe 28.0 34.3 11.2 15.3 17.9 20.1 23.4
yoy change 21.4 % 22.4 % -67.5 % 37.2 % 17.2 % 11.9 % 16.5 %
NAFTA 10.9 10.2 8.4 10.0 11.7 13.1 14.7
yoy change -6.1 % -6.3 % -17.2 % 19.0 % 16.7 % 11.9 % 11.8 %
Asia Pacific 12.4 23.8 23.0 24.5 28.3 33.7 39.3
yoy change -4.8 % 92.1 % -3.5 % 6.4 % 15.8 % 18.8 % 16.8 %
Rest of world 0.0 0.0 0.0 0.0 0.0 0.0 0.0
yoy change n/a n/a n/a n/a n/a n/a n/a
TTL 51.3 68.3 58.2 64.8 74.1 84.0 97.1
yoy change 7.5 % 33.1 % -14.8 % 11.5 % 14.3 % 13.3 % 15.5 %
Source: Company data, Hauck & Aufhäuser
28 Hauck & Aufhäuser Institutional Research

ISRA Vision
Key ratios (EUR m) 2006/07 2007/08 2008/09 2009/10 2010/11E 2011/12E 2012/13E
P&L growth analysis
Sales growth 7.5 % 33.1 % -14.8 % 11.5 % 14.3 % 13.3 % 15.5 %
EBITDA growth -26.7 % 70.1 % -18.4 % 16.2 % 17.0 % 14.6 % 16.5 %
EBIT growth -36.7 % 110.3 % -28.4 % 24.0 % 18.3 % 19.3 % 18.1 %
EPS growth -22.1 % 48.8 % -13.5 % 6.5 % 16.5 % 19.0 % 19.9 %
Efficiency
Total operating costs / sales 38.9 % 33.5 % 35.6 % 35.2 % 34.9 % 33.8 % 34.3 %
Sales per employee 179.0 203.2 154.9 170.0 176.8 183.9 191.2
EBITDA per employee 38.2 55.4 40.5 46.3 51.4 54.0 57.2
Balance sheet analysis
Avg. working capital / sales 70.2 % 64.2 % 79.6 % 77.4 % 73.4 % 66.9 % 61.9 %
Inventory turnover (sales/inventory) 3.2 4.0 3.9 4.6 4.6 4.6 4.6
Trade debtors in days of sales 225.3 202.0 232.9 263.8 230.0 210.0 195.0
A/P turnover [(A/P*365)/sales] 87.3 93.1 69.2 84.4 84.4 84.0 86.0
Cash conversion cycle (days) 369.1 302.7 359.1 348.4 315.8 295.5 282.0
Cash flow analysis
Free cash flow -1.7 -2.6 7.4 -0.6 5.3 5.2 4.8
Free cash flow/sales -3.4 % -3.8 % 12.8 % -0.9 % 7.1 % 6.2 % 5.0 %
FCF / net profit -34.2 % -34.6 % 115.2 % -8.6 % 64.7 % 53.2 % 41.4 %
FCF yield -2.3 % -3.5 % 10.1 % -0.8 % 7.0 % 6.8 % 6.4 %
Capex / depn 176.5 % 158.8 % 150.4 % 138.7 % 127.7 % 124.5 % 122.8 %
Capex / maintenance capex 11.6 % 11.6 % 11.1 % 9.3 % 9.3 % 9.9 % 10.2 %
Capex / sales 16.5 % 13.2 % 15.3 % 13.2 % 12.2 % 11.1 % 10.7 %
Security
Net debt 7.1 25.8 22.0 26.5 22.0 17.7 14.0
Net Debt/EBITDA 0.6 1.4 1.4 1.5 1.1 0.7 0.5
Net debt / equity 0.1 0.3 0.3 0.3 0.2 0.2 0.1
Interest cover 999.0 6.5 8.2 12.2 11.9 11.6 13.7
Dividend payout ratio 12.7 % 8.5 % 9.9 % 12.4 % 10.6 % 11.2 % 11.2 %
Asset utilisation
Capital employed turnover 0.5 0.6 0.5 0.5 0.5 0.6 0.6
Operating assets turnover 1.2 1.4 1.2 1.1 1.3 1.4 1.5
Plant turnover 18.5 25.8 21.6 23.1 28.6 37.7 72.6
Inventory turnover (sales/inventory) 3.2 4.0 3.9 4.6 4.6 4.6 4.6
Returns
ROCE 7.2 % 11.7 % 8.0 % 9.5 % 10.4 % 11.6 % 12.8 %
ROE 7.5 % 10.2 % 8.0 % 7.9 % 8.5 % 9.2 % 10.1 %
Other
Interest paid / avg. debt 0.0 % 5.9 % 3.4 % 3.0 % 3.3 % 4.1 % 4.1 %
No. employees (average) 287 336 376 382 402 438 482
Number of shares 4.3 4.3 4.3 4.3 4.3 4.3 4.3
DPS 0.2 0.2 0.2 0.2 0.2 0.3 0.3
EPS reported 1.18 1.76 1.52 1.62 1.88 2.24 2.69
Valuation ratios
P/BV 1.1 1.0 0.9 0.9 0.8 0.7 0.7
EV/sales 1.6 1.5 1.7 1.6 1.3 1.1 0.9
EV/EBITDA 7.7 5.5 6.4 5.8 4.8 4.0 3.3
EV/EBITA 8.1 5.7 6.7 6.1 5.0 4.2 3.5
EV/EBIT 13.7 7.9 10.6 9.0 7.3 5.9 4.8
EV/FCF -48.1 -39.1 13.1 -172.1 18.8 18.4 18.9
Dividend yield 0.9 % 0.9 % 0.9 % 1.1 % 1.1 % 1.4 % 1.7 %
Source: Company data, Hauck & Aufhäuser
29 Hauck & Aufhäuser Institutional Research

ISRA Vision
Disclosure in respect of section 34b of the German Securities Trading Act
(Wertpapierhandelsgesetz – WpHG)
Company Disclosure
ISRA Vision AG 2, 8
(1) Hauck & Aufhäuser or its affiliate(s) was Lead Manager or Co-Lead Manager over the previous 12 months of a public offering of this
company.
(2) Hauck & Aufhäuser acts as Designated Sponsor for this company or offers Equity Advisory Services.
(3) Over the previous 12 months, Hauck & Aufhäuser and/or its affiliate(s) has effected an agreement with this company for investment banking
services or received compensation or a promise to pay from this company for investment banking services.
(4) Hauck & Aufhäuser and/or its affiliate(s) hold 5 % or more of the share capital of this company.
(5) Hauck & Aufhäuser holds a trading position in shares of this company.
(6) Hauck & Aufhäuser and/or its affiliate(s) holds a net short position of 1 % or more of the share capital of this company, calculated by
methods required by German law as of the last trading day of the past month.
(7) Within the last five years Hauck & Aufhäuser was a member of the issuing syndicate of this company.
(8) The research report has been made available to the company prior to its publication / dissemination. Thereafter, only factual changes have
been made to the report
Historical target price and rating changes for ISRA Vision AG in the last 12 months
Hauck & Aufhäuser distribution of ratings and in proportion to investment banking services
Buy 77.27 % 100.00 %
Sell 6.06 % 0.00 %
Hold 16.67 % 0.00 %
Valuation basis/rating key
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 limited. No immediate catalyst visible.
Competent supervisory authority
Initiation coverage
20-June-11
Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin – (Federal Financial Supervisory Authority), Graurheindorfer Straße 108, 53117 Bonn and
Lurgiallee 12, 60439 Frankfurt am Main, Germany
30 Hauck & Aufhäuser Institutional Research

ISRA Vision
Important Disclosures
This research report has been prepared by Hauck & Aufhäuser Institutional Research GmbH, Hamburg, or one of its affiliates (“Hauck &
Aufhäuser”).
Hauck & Aufhäuser has made every effort to carefully research all information contained in this financial analysis. The information on which the
financial analysis is based has been obtained from sources which we believe to be reliable such as, for example, Reuters, Bloomberg and the
relevant specialised press as well as the company which is the subject of this financial analysis.
Only that part of the research note is made available to the issuer, who is the subject of this analysis, which is necessary to properly reconcile with
the facts. Should this result change considerably, a reference is made in the research note.
Opinions expressed in this financial analysis are the current, personal opinions of the analyst responsible for the document as of the issuing date
indicated on this document and are subject to change without notice. Hauck & Aufhäuser does not commit itself in advance to whether and in which
intervals an update is made. Also, the opinions in this document no not necessarily correspond to the opinions of Hauck & Aufhäuser.
The document and the recommendations and estimations contained therein are not linked - whether directly or indirectly - to the compensation of
the analyst responsible for the document.
No representation, guarantees or warranties are made by Hauck & Aufhäuser with regard to the accuracy, completeness or suitability regarding all
the information on the stocks, stock markets or developments referred to in it.
On no account should the document be regarded as a substitute for the recipient’s procuring information for himself or exercising his own
judgements.
The document has been produced for information purposes only, and only for institutional clients or market professionals. In particular, it is not
intended to be distributed to private investors or private customers. Private investors or private customers, into whose possession this document
comes, should discuss possible investment decisions with their customer service officer as differing views and opinions may exist with regard to the
stocks referred to in this document.
This document is not a recommendation, offer or solicitation to buy or sell the mentioned stock and will not form the basis or a part of any contract.
The document may include certain descriptions, statements, estimates, and conclusions underlining potential market and company development.
These reflect assumptions, which may turn out to be incorrect. Past performance is not a guide to future results. The price of securities may
decrease or increase and as a result investors may loose the amount originally invested. Changes in exchange rates may also cause the value of
investments to decrease or increase. Hauck & Aufhäuser and/or its directors, officers and employees accept no responsibility or liability whatsoever
for any direct or consequential loss or damages of any kind arising out of the use of this document or any part of its content. To the extent this
research report is being transmitted in connection with an existing contractual relationship, e.g. financial advisory or similar services, the liability of
Hauck & Aufhäuser shall be restricted to gross negligence and wilful misconduct. In any case, the liability of Hauck & Aufhäuser is limited to typical,
foreseeable damages and liability for any indirect damages is excluded.
Hauck & Aufhäuser may act as market-maker or underwrite issues for any securities mentioned in this document, derivatives thereon or related
financial products or perform or seek to perform capital market or underwriting services.
Hauck & Aufhäuser reserves all the rights in this document. No part of the document or its content may be rewritten, copied, photocopied or
duplicated in any form by any means or redistributed without Hauck & Aufhäuser’s prior written consent.
Please note that our research is only for the personal use of Hauck & Aufhäuser institutional clients. Do not pass on to third parties or
make available to third parties. From time to time Hauck & Aufhäuser Institutional Research GmbH will be compensated for its services
using soft dollar compensation arrangements, such as trading commissions.
By accepting this document, a recipient hereof agrees to be bound by the foregoing limitations.
Remarks regarding foreign investors
The preparation of this document is subject to regulation by German law. The distribution of this document in other jurisdictions may be restricted by
law, and persons into whose possession this document comes should inform themselves about, and observe, any such restrictions
31 Hauck & Aufhäuser Institutional Research

ISRA Vision
Contacts: Hauck&Aufhäuser Investment Banking
Hauck & Aufhäuser Research
Hauck & Aufhäuser
Institutional Research GmbH
Mittelweg 142
20148 Hamburg
Germany
Sascha Berresch, CFA
Analyst
Tel.: +49 (0)40 414 3885 - 85
E-Mail: sascha.berresch@ha-research.de
Marc Osigus, CFA
Analyst
Tel.: +49 (0)40 414 3885 - 90
E-Mail: marc.osigus@ha-research.de
Tim Wunderlich, CFA
Analyst
Tel.: +49 (0)40 414 3885 - 81
E-Mail: tim.wunderlich@ha-research.de
Hauck & Aufhäuser Sales
Vincent Bischoff
Sales
Tel.: +49 (0)40 414 3885 - 88
E-Mail: vincent.bischoff@ha-research.de
Senior Advisors
Graeme Davies
Senior Advisor
Tel.: +49 (0)40 414 3885 - 72
E-Mail: graeme.davies@ha-research.de
Hauck & Aufhäuser Sales Trading
Hauck & Aufhäuser
Privatbankiers KGaA
Kaiserstraße 24
60311 Frankfurt am Main
Germany
Thomas Seibert
Trading
Tel.: +49 (0)69 2161 - 1555
E.Mail: thomas.seibert@hauck-aufhaeuser.de
Tel.: +49 (0) 40 414 3885 - 70
Fax: +49 (0) 40 414 3885 - 71
Email: info@ha-research.de
www.ha-research.de
Henning Breiter
Analyst
Tel.: +49 (0)40 414 3885 - 73
E-Mail: henning.breiter@ha-research.de
Roland Rapelius, CFA
Analyst
Tel.: +49 (0)40 414 3885 - 86
E-Mail: roland.rapelius@ha-research.de
Hugues Madelin
Sales
Tel.: +33 1 78 41 40 62
E-Mail: hugues.madelin@ha-research.de
Michael Schramm
Senior Advisor
Tel.: +49 (0)69 2161 - 1240
E-Mail: michael.schramm@hauck-aufhaeuser.de
Tel.: +49 (0) 69 2161- 0
Fax: +49 (0) 69 2161- 1340
Email: info@hauck-aufhaeuser.de
www.hauck-aufhaeuser.de
Sebastian Schuett
Trading
Tel.: +49 (0)69 2161 – 1556
E.Mail: sebastian.schuett@hauck-aufhaeuser.de
Marie-Therese Gruebner
Analyst
Tel.: +49 (0)40 414 3885 - 83
E-Mail: marie-therese.gruebner@ha-research.de
Thomas Wissler
Analyst
Tel.: +49 (0)40 414 3885 - 80
E-Mail: thomas.wissler@ha-research.de
Toby Woods
Sales
Tel.: +44 207 763 7179
E-Mail: toby.woods@ha-research.de
Jochen Lucht
Senior Advisor
Tel.: +49 (0)69 2161 - 1260
E-Mail: jochen.lucht@hauck-aufhaeuser.de
32 Hauck & Aufhäuser Institutional Research