> Healthcare Deutsche Bank 41) Fresenius — Gunnar Romer, BUY, close €65.4, €83 tgt, 27% upside s Strong outlook - we expect defensive low-teens EPS growth to 2020, given sound end market dynamics, market leadership positions, and a strong management team. ■ Weak sentiment means the negatives are priced in. The shares have been weak recently on concerns over IV generics pricing and the poor performance of Akorn. - We expect consensus estimates to trough on 4Q17 results and to drive further buying of the shares. - IV generics price pressure is not outside of expectation to reassure - 'Lowering the bar' on Akom should remove a key overhang. ■ 4Q17 results should be strong. We expect adj. NI up 22% CER, helped by a full contribution from Qironsalud and soft comps at Kabi. ■ Valuation is undemanding at 20x 18E P/E, in line with historical 12m ... driving underperforrnance relative to the market (here. STOXX 600) forward range of 18-22x P/E 80 60 54 46 is A number of positive catalysts to come. 40 25 10 36 22 25 - New product launches at Kabi should surprise to the upside. Qironsalud integration is progressing smoothly 20 0 I is 11 ti 12 14 • • ••• •• IlLo . I MI . - 20 • -9 • i -8 - Helios Capital Markets Day should be reassuring. -40 • -24 -20 -60 an Related DB Research: 0) 0 CO O O N Ci2 OOOO N O4 NNNN CO O V O O CO CO o e- N CO Q U) fO U) O 8 ^ O OOO O OOOOO NN N NNN I,- O European MedTech & Services: 2018E Outlook: Significant Outperforrnance (Wang) Fresenius has de-rated over 2017 closer to its historical average... —?rcs jr ?:E —Average since 11;98 10 5 Jan-98 Jan-00 Jan-02 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-16 Source: Factual Source: Fades& Deutsche Bank Cl€: fatthU Po;>earc Etifupeon Equity FOCUS - Jantay 2016 CONFIDENTIAL - PURSUANT TO FED. R. GRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0086802 SDNY_GM_00232986 EFTA01385516