prosegur - credit suisse

DISCLOSURE APPENDIX CONTAINS ANALYST CERTIFICATIONS AND THE STATUS OF NON US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.

CREDIT SUISSE SECURITIES RESEARCH & ANALYTICS BEYOND INFORMATION®

Client-Driven Solutions, Insights, and Access

12 February 2013

Europe/Spain

Equity Research

Business & Professional Services (Business & Professional services (Europe))

Prosegur (PSG.MC) SMALL & MID CAP RESEARCH

Downside potential even with acquisitions

■ Reiterate UP: Including our assumptions on possible future acquisitions still

yields 7% downside risk for PSG’s shares on our estimates. We reiterate our

UP rating and note that further Latin American economic and currency

worries (Argentina/Venezuela) add to this and our preference for G4S . We

lower our 13E EPS by 11% on lower European growth and margins

(Securitas read across) and higher interest expenses.

■ Investment Case: Those who support Prosegur point to solid growth

expectations owing to its 60% exposure to Latin America. While this is true

we give more weight to cash flow. Cash conversion has fallen to just 12% in

2011 (below G4S and Securitas) whereas consensus EBITDA margin

expectations are falling faster than for its two European peers (-/-160bps

since 2010). As a result Prosegur’s gearing has increased from below 0.5x

in 2010 to 1.5x last year while its transaction CFROI® is declining towards

G4S levels on our forecasts.

■ Catalysts: February 27: FY results

■ Valuation: Our organic DCF suggests a fair value of €3.50. Possible future

acquisitions add €0.50 per share to yield a price target of €4.00. On a

multiple basis Prosegur trades on 12.4x 2013E EPS. This is in line with its

5yr average and compares to 11.5x for G4S and 10.2x for Securitas.

Key Points

Prosegur is one of the largest security firms

globally and the largest in Southern Europe

and Latin America. The company employs

over 120,000 employees and is active in 17

countries.

Geographic exposure: Prosegur's Latin

American division contributed almost 60% to

revenues and almost 90% of EBIT in 2012

on our estimates.

Shareholder structure: The original founder'

families control 56% of Prosegur with an

additional 10% held by a Spanish investment

fund. Free float is appr. 35%.

Rating UNDERPERFORM* Price (08 Feb 13, Eu) 4.30 Target price (Eu) (from 3.50) 4.00¹ Market cap. (Eu m) 2,653.64 Enterprise value (Eu m) 3,611.2

*Stock ratings are relative to the coverage universe in each analyst's or each team's respective sector.

¹Target price is for 12 months.

Financial and valuation metrics

Year 12/11A 12/12E 12/13E 12/14E Revenue (Eu m) 2,809.0 3,648.3 3,790.1 4,037.5 EBITDA (Eu m) 363.57 409.53 445.41 493.65 Adjusted Net Income (Eu m) 198.2 174.3 204.5 235.5 CS adj. EPS (Eu) 0.34 0.30 0.35 0.40 Prev. EPS (Eu) — 0.35 0.39 0.43 ROIC (%) 14.64 11.68 12.93 13.76 P/E (adj., x) 12.75 14.49 12.36 10.73 P/E rel. (%) 120.3 67.9 101.6 103.4 EV/EBITDA 9.0 8.8 8.0 7.0

Dividend (12/12E, Eu) 0.10 IC (12/12E, Eu m) 1,725.25 Dividend yield (%) 2.3 EV/IC 2.1 Net debt (12/12E, Eu m) 957.6 Current WACC 7.8 Net debt/equity (12/12E, %) 124.7 Free float (%) 35.0 BV/share (12/12E, Eu) 1.3 Number of shares (m) 617.12 Source: Company data, Credit Suisse estimates

Research Analysts

Eugene Klerk

44 20 7883 4678

[email protected]

Andrew Grobler

44 20 7883 5943

[email protected]

David Rigby

44 20 7888 9240

[email protected]

12 February 2013

Prosegur (PSG.MC) 2

Prosegur PSG.MC Price (08 Feb 13): Eu4.30, Rating: UNDERPERFORM, Target Price: Eu(from 3.50) 4.00

Income statement (Eu m) 12/11A 12/12E 12/13E 12/14E

Sales revenue 2,809 3,648 3,790 4,037 EBITDA 364 410 445 494 Depr. & amort. (79) (98) (97) (102) EBIT (CS) 284 311 348 392 Net interest exp. (19) (63) (58) (51) Associates — — — — Other adj, — — — — PBT (CS) 265 248 291 341 Income taxes (85) (88) (97) (116) Profit after tax 180 161 194 225 Minorities 0.39 0.60 0.40 0.40 Preferred dividends — — — — Associates & other 18 13 11 10 Net profit (CS) 198 174 204 235 Other NPAT adjustments (31) (13) (11) (10) Reported net income 167 161 194 226

Cash flow (Eu) 12/11A 12/12E 12/13E 12/14E

EBIT 284 311 348 392 Net interest (19) (63) (58) (51) Cash taxes paid (87) (96) (107) (121) Change in working capital (138) (82) (42) (64) Other cash & non-cash items 113 99 98 102 Cash flow from operations 153 170 239 259 CAPEX (123) (109) (114) (121) Free cash flow to the firm 29 60 126 138 Acquisitions (56) (340) — — Divestments — — — — Other investment/(outflows) 128 — — — Cash flow from investments (52) (449) (114) (121) Net share issue/(repurchase) — — — — Dividends paid (58) (63) (61) (73) Issuance (retirement) of debt (38) 239 (3) — Other (65) (239) 3 — Cash flow from financing activities

(161) (63) (61) (73) Effect of exchange rates — (2) 3 — Changes in Net Cash/Debt (60) (344) 69 65 . Net debt at start 553 614 958 889 Change in net debt 60 344 (69) (65) Net debt at end 614 958 889 824

Balance sheet (Eu m) 12/11A 12/12E 12/13E 12/14E

Assets Cash and cash equivalents 188 83 148 213 Accounts receivable 662 820 851 907 Inventory 55 64 66 71 Other current assets 188 244 254 270 Total current assets 1,092 1,210 1,319 1,461 Total fixed assets 406 447 459 471 Intangible assets and goodwill 553 863 868 876 Investment securities — — — — Other assets 141 149 159 163 Total assets 2,192 2,669 2,805 2,970 Liabilities Accounts payable 143 226 219 216 Short-term debt 196 196 196 196 Other short term liabilities 490 550 559 574 Total current liabilities 830 972 974 987 Long-term debt 466 705 702 702 Other liabilities 225 225 225 225 Total liabilities 1,521 1,902 1,900 1,913 Shareholders' equity 671 767 904 1,057 Minority interest 0.37 0.37 0.37 0.37 Total equity & liabilities 2,192 2,669 2,805 2,970 Net debt (Eu m) 614 958 889 824

Per share data 12/11A 12/12E 12/13E 12/14E

No. of shares (wtd avg) 588 588 588 588 CS adj. EPS (Eu) 0.34 0.30 0.35 0.40 Prev. EPS (Eu) — 0.35 0.39 0.43 Dividend (Eu) 0.10 0.10 0.12 0.14 Dividend payout ratio 30.23 33.12 33.94 34.29 Free cash flow per share (Eu)

0.05 0.10 0.21 0.23

Key ratios and valuation

12/11A 12/12E 12/13E 12/14E

Growth(%) Sales 9.7 29.9 3.9 6.5 EBIT 7.7 9.6 11.8 12.6 Net profit (4.0) (12.1) 17.3 15.2 EPS (2.4) (12.1) 17.3 15.2 Margins (%) EBITDA margin 12.9 11.2 11.8 12.2 EBIT margin 10.1 8.5 9.2 9.7 Pretax margin 9.4 6.8 7.7 8.5 Net margin 7.1 4.8 5.4 5.8 Valuation metrics (x) EV/sales 1.2 1.0 0.9 0.9 EV/EBITDA 9.0 8.8 8.0 7.0 EV/EBIT 11.5 11.6 10.2 8.9 P/E 12.7 14.5 12.4 10.7 P/B 3.8 3.3 2.8 2.4 Asset turnover 1.3 1.4 1.4 1.4 ROE analysis (%) ROE stated-return on equity

25.0 22.4 23.2 23.0 ROIC 14.6 11.7 12.9 13.8 Interest burden 0.93 0.80 0.83 0.87 Tax rate 33.8 35.3 33.4 34.0 Financial leverage 1.0 1.2 1.0 0.8 Credit ratios (%) Net debt/equity 91.4 124.7 98.3 77.9 Net debt/EBITDA 1.7 2.3 2.0 1.7 Interest coverage ratio 15.0 4.9 6.0 7.7

Source: FTI, Company data, Thomson Reuters, Credit Suisse Securities

(EUROPE) LTD. Estimates.

2

4

6

8

Feb-11 Jun-11 Oct-11 Feb-12 Jun-12 Oct-12

Price Price relative

The price relative chart measures performance against the MADRID SE INDEX

which closed at 828.01 on 08/02/13

On 08/02/13 the spot exchange rate was €1./Eu 1. - Eu .75/US$1

12 February 2013

Prosegur (PSG.MC) 3

Key charts Figure 1: Higher emerging markets exposure (12E) Figure 2: Provides for higher EBITDA CAGR (12-15e)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Securitas G4S Prosegur

North America Europe Latin America EMG

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%


Source: Credit Suisse estimates Source: Credit Suisse estimates

Figure 3: But cash conversion is falling Figure 4: And CFROI premium disappearing

5%

15%

25%

35%

45%

55%

65%

2007 2008 2009 2010 2011 2012

Prosegur Securitas G4S

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

2007 2009 2011 2013 2015


Source: Company data, Credit Suisse estimates Source: Company data, Credit Suisse estimates, Credit Suisse HOLT

Figure 5: P/E (13E) vs EG (12-14E) Figure 6: Price target: organic and including acquisitions

Staffing

Outsourcing

Testing

Distribution

Engineering Service

Rental

Other

Securitas

G4S

Prosegur

5

7

9

11

13

15

17

19

21

23

25

0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0%

4.30

3.80

0.50

3.00

3.50

4.00

4.50

1 2 3

Current Organic DCF Future Acquisitions

Source: Credit Suisse estimates Source: Thomson Reuters, Credit Suisse estimates

12 February 2013

Prosegur (PSG.MC) 4

Updated forecasts Last Friday’s results from Securitas showed that the outlook for a recovery in Spain or

France remains negative. Securitas indicated that they expect both markets to decline this

year by up to 5%. We have included these remarks in a more general review of our

Prosegur model. The key changes to our forecasts are:

■ Revenue: Our group revenue forecast increases slightly for 2012, primarily due to FX

related gains from Latin America. For this year we reduce our revenue forecast by

1.5% as Spanish revenues are likely to decline faster than previously expected while

the Euro strengthening is impacting Euro revenues from Latin America.

■ Margins: we reduce our margin target for 2013 by 50bps which is primarily due to

lower European profitability. We do not expect Prosegur to be able to recover in Spain

or France this year. Negotiations on the collective wage agreement are also ongoing

which adds uncertainty to near term profitability.

■ Earnings: Our 2013 EPS target falls by 11% as interest expenses increase following

the Nordeste acquisition. At the end of Q3 2012 net debt stood at €575m, up from

€360m in December 2011.

Figure 7: Key forecast changes

Divisional P&L 2012E 2013E 2012E 2013E 2012E 2013E

Europe + Asia 1,466 1,445 1,449 1,457 1.1% -0.8%

Spain 933 900 944 940 -1.2% -4.2%

Latin America 2,183 2,345 2,124 2,392 2.8% -2.0%

Revenue 3,648 3,790 3,574 3,849 2.1% -1.5%

Europe + Asia 34 43 44 57 -21.2% -24.4%

Latin America 277 305 281 305 -1.5% 0.0%

EBIT 311 348 325 362

Europe + Asia 2.3% 3.0% 3.0% 3.9%

Latin America 12.7% 13.0% 13.2% 12.7%

EBIT margin 8.5% 9.2% 9.1% 9.4%

EBITDA (pre except.) 410 445 427 472 -4.1% -5.6%

Margin 11.2% 11.8% 12.0% 12.3%

Interest charge (pre excep.) 63 58 34 39

PBTA (pre except.) 268 307 313 347 -14.3% -11.7%

Tax 95 103 108 118

Minority interest -1 0 0 0

Adjusted net profit 174 204 206 230

Adjusted EPS 0.30 0.35 0.35 0.39 -15.3% -10.9%

% change

Source: Credit Suisse estimates

On our updated forecasts we are now 2% below consensus on 2013 revenue and 3% on

EPS.

Figure 8: Credit Suisse vs consensus

2013E 2014E

Cons CS % diff Cons CS % diff

Revenues 3,865 3,790 -2% 4,136 4,037 -2%

EBIT (adj) 367 348 -5% 414 392 -5%

EBIT margin 9.5% 9.2% -32bps 10.0% 9.7% -29bps

EPS (adj) 0.34 0.33 -3% 0.40 0.38 -3% Source: Thomson Reuters, Credit Suisse estimates

12 February 2013

Prosegur (PSG.MC) 5

Prosegur vs European peers Emerging markets support higher revenue growth

Prosegur during the past few years has been the “emerging markets” play among the

European larger security firms. Last year we estimate that the Latin America contributed

60% to group revenues. This is double G4S’ emerging market exposure and 6 times the

level generated by Securitas. Our base case remains that emerging regions will continue

to outgrow developed markets during the next few years. Based on the larger exposure to

emerging markets it is therefore no surprise that our revenue CAGR for Prosegur is about

200bps higher than for G4S and almost double that for Securitas.

Figure 9: Revenue mix by region (12E) Figure 10: Organic Revenue growth (12-15E)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


North America Europe Latin America EMG

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%



Margins and to remain above average

More growth than its peers from higher margin generating Latin America also supports

Prosegur’s EBITA and EBITA growth premia vs its peers in our view. Clearly from a P&L

perspective Prosegur appears more attractive that both G4S and Securitas.

Figure 11: EBITA margin (12E) Figure 12: EBITA CAGR (2012-2015E)

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%



12 February 2013

Prosegur (PSG.MC) 6

CAPEX and acquisitions have been intensifying

Prosugur’s exposure to a higher growth lesser developed region meant that its level of

required investments has had to be higher during the past 5 years. Capital expenditure

has averaged 4% of revenues since 2007 which compares to 2.7% for G4S and just 1.6%

for Securitas.

In addition to higher levels of capex we note that Prosegur has also become more active

on acquisitions than its European peers during the past few years. In 2012 Prosegur spent

14% of revenues on acquiring Nordeste in Brazil bringing the total amount of acquisition

spending since 2005 to €636m.

Figure 13: Capex as % of revenues Figure 14: Acquisitions spending as % of previous year revenue

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2007 2008 2009 2010 2011 2012 2013


0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2007 2008 2009 2010 2011 2012


Source: Company data, Credit Suisse estimates Source: Company data

Cash conversion and margins under pressure

Prosegur’s investments may support the long term outlook for the company, however, we

note that they coincide with falling cash conversion and margins. Unless these acquisitions

and expansions have a short pay back period we do believe that investors should factor a

reduction of Prosegur’s cash flow based returns into their models.

Figure 15: Falling cash conversion Figure 16: EBITDA margins estimates

5%

15%

25%

35%

45%

55%

65%

2007 2008 2009 2010 2011 2012


6.0%

7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

15.0%

Feb-0

3

Feb-0

4

Feb-0

5

Feb-0

6

Feb-0

7

Feb-0

8

Feb-0

9

Feb-1

0

Feb-1

1

Feb-1

2

Feb-1

3

Prosegur G4S Securitas

Source: Company data, Credit Suisse estimates Source: Thomson Reuters

12 February 2013

Prosegur (PSG.MC) 7

Gearing and cash flow returns less attractive

The combination of lower cash conversion and margin pressure on one hand and a more

active acquisition and investment period have a negative impact on Prosegur’s superior

financial strength relative to its closest European peers.

For example the company’s gearing used to be much lower than its peers at a net

debt/EBITDA ratio of around 0.5x between 2004 and 2011. Last year this ratio increased

around 1.5x which still represents a lower ratio than its peers but the discount has become

substantially smaller.

In addition we note that Prosegur’s acquisitions have pressured the company’s transaction

CFROI from 13% in 2008 to 10% last year. Our forecast suggest that G4S’ transaction

CFROI may catch up with Prosegur’s nu 2015.

Figure 17: Net debt/EBITDA (12mF) Figure 18: Transaction CFROI

0.0

0.5

1.0

1.5

2.0

2.5

Feb-03 Nov-04 Aug-06 May-08 Feb-10 Nov-11


7.0%

8.0%

9.0%

10.0%

11.0%

12.0%

13.0%

14.0%

2007 2009 2011 2013 2015


Source: Thomson Reuters Source: Credit Suisse estimates, Credit Suisse HOLT

PE premium supported by growth premium

Prosegur price earnings premium to its peers is a fair reflection of its expected higher

earnings growth. We do not see substantial upside from a relative perspective.

Figure 19: PE (12mF) premium owing to higher EG Figure 20: EPS growth (FY2)

6

8

10

12

14

16

18

20



-10.0%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

Feb-03 Mar-05 Apr-07 May-09 Jun-11


Source: Thomson Reuters Source: Thomson Reuters

12 February 2013

Prosegur (PSG.MC) 8

EBITDA growth picking up but EV/EBITDA is not

From an EV/EBITDA perspective we view Prosegur as slightly undervalued relative to its

peers. EBITDA growth estimates have been improving during the past few months

whereas Prosegur’s EV/EBITDA multiple does not reflect this.

Against the background of increasing margin pressure (Figure 16) the market may suggest

that downside risk to EBITDA growth is rising while falling cash conversion (EBITDA to

equity FCF) may indicate that the market values EBITDA less than it did historically. We

would certainly agree with such a conclusion as cash is more important to equity investors

that accounting profits in our view.

Figure 21: EV/EBITDA 12mF Figure 22: EBITDA growth FY2

4.0

5.0

6.0

7.0

8.0

9.0

10.0



-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

Feb-03 Feb-05 Feb-07 Feb-09 Feb-11 Feb-13


Source: Thomson Reuters Source: Thomson Reuters

EV/Sales vs EBITDA margin development

On an EV/Sales basis we view Prosegur as fairly valued. Based on the past 10 years we

note that a slightly better margin performance may lead to multiple de-rating. The reason

why the smile-shape of Figure 23 exists in our view is that historically below average

margins coincided with periods of high growth expectations and strong potential for

efficiency gains allowing for above average multiples.

Periods of superior margins in the past coincided with higher multiple ratings as the market

expected these higher quality earnings to coincide with stronger cash flows.

Going forward we believe that Prosegur may improve its group EBITDA margin, however,

we do not necessarily believe that this will be due to a strong improvement in end market

conditions. Southern Europe is unlikely to recover on a 12 month view whereas Latin

growth is unlikely to improve even more. Without an end market recovery we do not

believe that investors will credit better margins with higher multiples.

12 February 2013

Prosegur (PSG.MC) 9

Figure 23: 12mF, EV/Sales (x) vs EBITDA margin (FY1) (%)

0.60

0.70

0.80

0.90

1.00

1.10

1.20

11.5% 12.0% 12.5% 13.0% 13.5% 14.0%

Current

Source: Thomson Reuters

Discounted cash flow valuation

Recently we upgraded our price targets for G4S and Securitas partly due to the inclusion

of acquisition related value creation. Given Prosegur’s reliance on acquisitions we have

decided to adopt the same approach. This means that our organic DCF-driven fair value of

€3.50 increases to €4.00. With the share price at €4.30 this still implies downside risk to

Prosegur’s share price.

Figure 24: Discounted cash flow summary in millions, unless otherwise stated

Drivers 2010A 2011E 2012E 2013E 2014E 2015E 2016E Assumptions Period 1 Period 2 Final year

Sales growth 17.1% 9.7% 29.9% 3.9% 6.5% 7.7% 7.5% First year of estimates 2013 2018 2023

EBITDA margin 13.6% 12.9% 11.2% 11.8% 12.2% 12.6% 12.9% Years of period 5 5 15

EBITA margin 11.6% 11.1% 9.1% 9.6% 10.1% 10.5% 10.7% Final year of period 2017 2022 2038

Depreciation / sales 1.9% 1.8% 2.1% 2.1% 2.1% 2.1% 2.1%

Working capital / Sales 13.0% 9.6% 9.7% 10.4% 11.3% 12.1% 12.7% Average sales growth 5.7% 4.0% 3.0%

Capex/Sales 3.2% 4.4% 3.0% 3.0% 3.0% 3.0% 3.0% Final EBITA margin 10.8% 9.7% 6.0%

Tax rate 28.9% 33.9% 34.8% 34.0% 34.0% 34.0% 34.0% Final Capex sales 3.0% 3.0% 3.0%

RONA 21.2% 17.9% 17.6% 17.9% 18.7% 19.6% 20.3% Final Capex / depreciation 125% 125% 125%

Final year RONA 20.7% 18.7% 11.6%

Net sales 2,561 2,809 3,648 3,790 4,037 4,348 4,674

EBITA 298 312 331 364 407 456 502 Risk free rate 2.0%

NOPAT 212 206 216 240 269 301 332 Market risk premium 6.5%

Add back depreciation 49 52 78 81 87 93 100 Beta 1.2

Increase in net working capital -85 -138 -82 -42 -64 -70 -65 Normalised tax rate 33.0%

Capex 82 123 109 114 121 130 140 Terminal growth 2.0%

Other 34 33 0 0 0 0 0 Fade rate 10.0%

Acquisitions and disposals 5 56 340 0 0 0 0 Sustainable RonA 18.7%

Free cash flow (FCF) 123 -26 -237 166 171 194 226

WACC 8.3% 7.8% 7.9% 8.0% 8.2% 8.4%

PV of FCF (€mn) 2,638

PV of terminal FCF (€mn) 378

EV (€mn) 3,016

Adj Net Debt (2010) (€mn) 958

Mkt Cap (€mn) 2,058

Shares (mn) 588

Value/Share (Euro per share) 3.50 Source: Company data, Credit Suisse estimates

Our acquisition DCF model assumes that Prosegur will continue to spend 3% of revenues

on acquisitions during the next five years before this falls to 1.5% longer term. In addition

we expect EBITA margins to trend towards 8.5% which is in line with our longer term

group average. Finally we expect an acquisition multiple of around 1x sales.

12 February 2013

Prosegur (PSG.MC) 10

Figure 25: Acquisition DCF in millions, unless otherwise stated

Drivers 2013E 2014E 2015E 2016E 2017E 2018E 2019E 2020E

Acquisition spend 109.4 117.0 128.1 141.6 156.2 86.1 92.5 99.3

EV/Sales 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

% last years sales 3.0% 3.0% 3.0% 3.0% 3.0% 1.5% 1.5% 1.5%

Net sales 109 117 128 142 156 86 92 99

EBITA 8 18 30 43 58 69 81 94

NOPAT 5 12 20 28 39 46 54 62

Add back depreciation 2 3 6 8 11 13 15 17

Increase in net working capital 0 -1 -1 -2 -3 -3 -4 -5

Capex 3 7 11 16 21 25 29 34

Other 0 0 0 0 0 0 0 0

Acquisitions and disposals 109 117 128 142 156 86 92 99

Free cash flow (FCF) -106 -109 -115 -123 -131 -56 -58 -59

WACC 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3% 4.3%

EPS accretion 1.0% 2.0% 3.1% 4.1% 5.2%

ND/EBITDA 2.4 2.2 2.0 1.8 1.6 1.2 0.8 0.4

PV of FCF (€ mn) -403

PV of terminal FCF (€ mn) 688

EV (€ mn) 285

Shares (mn) 588

Value/Share (€ per share) 0.50 Source: Credit Suisse estimates

HOLT® summary

Applying the HOLT Linker to our forecasts yields a fair value of €3.6 which is not too

dissimilar to our organic DCF value of €3.8. Based on our organic growth forecasts we

expect a decline in Prosegur’s CFROI from 13.4% in 2011 to 12% by 2017.

In order for the company to be undervalued from a HOLT perspective we would need to

see an improvement in asset turns. Historically the company was able to utilise its asset

base better which yielded substantially higher cash flow return rates.

Part of the reason for the decline in asset turns is undoubtedly the weakening Southern

European markets. A recovery in those would lift revenue growth and margins. This in turn

would lift asset turn ratios and fair value. For example an increase in annual revenue

growth and margins of 100bps each would leave Prosegur undervalued by 21%.

However, any slowdown in Latin American growth coupled with ongoing tough European

markets would suggest strong downside risk on an organic basis.

12 February 2013


Figure 26: Holt Summary valuation overview

Current Price: EUR 4.30 Warranted Price: EUR 3.59 Valuation date: 08-Feb-13

Sales Growth (parallel % point change to forecasts) Dec-10A Dec-11A Dec-12E Dec-13E Dec-14E

-2.0% -1.0% 0.0% 1.0% 2.0% Sales Growth, % 17.1 9.7 29.9 3.9 6.5

EBITDA Mgn, % 13.0 13.4 11.2 11.8 12.2

Asset Turns, x 1.25 1.30 1.50 1.42 1.36

CFROI®, % 13.3 13.4 13.7 13.5 13.0

Disc Rate, % 5.7 6.8 7.0 7.0 7.0

Asset Grth, % 32.0 4.2 11.6 8.1 10.1

Value/Cost, x 2.3 1.9 2.2 2.0 1.8

Economic PE, x 16.9 13.9 15.9 14.7 13.8

Leverage, % 32.0 36.0 37.1 37.5 38.2

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en

ari

o D

ata

PROSEGUR, COMPANIA DE

SEGURIDAD, S.A. (PSG)

Source: Credit Suisse HOLT®. CFROI, HOLT, and ValueSearch are trademarks or registered trademarks of Credit Suisse Group AG or its affiliates in the United States and other countries.

EB

ITD

A M

arg

in (p

ara

lle

l %

po

int

ch

an

ge

to

fo

rec

as

ts)

More than

10%

downside

Within 10%More than

10% upside

-80% -70%

-61%

26% 44%

14%

39%

-17% -2%

5% 21%

* Operating margin (yellow) is EBITDA (grey) plus rental expense and R&D expense

-2.0%

-1.0%

0.0%

1.0%

-50%

-42% -30%

-36%

-11%-25%

-48%

-23% -10%

-60%

-38%

64%2.0% -5% 10%

-5.00

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Sales Growth (in %)

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Operating Margin and EBITDA (in %) - see note*

0.00

0.50

1.00

1.50

2.00

2.50

3.00

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

Asset Turns (x)

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

HistoricalCFROI

HistoricalTransactionCFROI

ForecastCFROI

ForecastTransactionCFROI

DiscountRate

CFROI & Discount Rate (in %)

-20.00

0.00

20.00

40.00

60.00

80.00

100.00

2001 2003 2005 2007 2009 2011 2013 2015 2017 2019

HistoricalAssetGrowthRate

HistoricalGrowth InclIntang

ForecastGrowth

ForecastGrowth InclIntang

Asset Growth (in %)

Source: Company data, Credit Suisse estimates, Credit Suisse HOLT

12 February 2013


Financial Statements Figure 27: Profit and loss account

Divisional P&L 2010A 2011A 2012E 2013E 2014E 2015E 2016E 2016E

Europe + Asia 1,298 1,291 1,466 1,445 1,465 1,525 1,574 1,625

Spain 975 953 933 900 900 936 964 993

France 156 167 206 212 218 225 232 239

Portugal 157 153 148 144 147 153 157 162

Romania 9 8 8 8 9 9 9 10

Germany 149 156 164 172 179 186

Singapore 0 9 22 24 27 30 32 36

Latin America 1,262 1,518 2,183 2,345 2,573 2,824 3,100 3,402

Argentina area 382 500 638 622 685 753 828 911

Brazil 605 684 1,085 1,235 1,358 1,494 1,644 1,808

Chile 104 116 137 145 157 171 186 203

Colombia 41 68 136 144 157 171 187 204

Peru 109 125 157 167 181 197 213 231

Mexico 20 25 29 32 35 38 42 45

Revenue 2,561 2,809 3,648 3,790 4,037 4,348 4,674 5,028

Europe + Asia 2.0% -2.1% -1.7% -1.4% 1.4% 4.1% 3.3% 3.3%

Spain 1.2% -2.9% -2.7% -3.5% 0.0% 4.0% 3.0% 3.0%

France 8.5% 4.1% 5.9% 3.0% 3.0% 3.0% 3.0% 3.0%

Portugal 1.3% -3.1% -3.6% -2.5% 2.0% 4.0% 3.0% 3.0%

Romania 6.6% -10.5% -1.4% 2.9% 3.5% 3.5% 3.5% 3.5%

Germany 5.0% 5.0% 5.0% 4.0% 4.0%

Singapore 0.0% 0.0% 1.2% 10.0% 10.0% 10.0% 10.0% 10.0%

Latin America 14.0% 20.5% 20.5% 9.7% 9.7% 9.8% 9.8% 9.8%

Argentina area 29.9% 41.6% 24.4% 10.0% 10.0% 10.0% 10.0% 10.0%

Brazil 7.1% 10.6% 22.4% 10.0% 10.0% 10.0% 10.0% 10.0%

Chile 3.3% 11.6% 10.0% 7.0% 8.0% 9.0% 9.0% 9.0%

Colombia 5.7% 9.6% 16.4% 10.0% 9.0% 9.0% 9.0% 9.0%

Peru 9.0% 13.3% 9.2% 8.0% 8.5% 8.5% 8.5% 8.5%

Mexico 17.1% 25.6% 9.2% 10.0% 10.0% 10.0% 9.0% 9.0%

Organic Growth 7.1% 9.0% 10.3% 5.2% 6.5% 7.7% 7.5% 7.6%

Europe + Asia 93 65 33 43 51 61 71 73

Latin America 170 219 277 305 341 381 418 459

EBIT 263 284 310 348 392 442 489 532

Europe + Asia 7.1% 5.0% 2.2% 3.0% 3.5% 4.0% 4.5% 4.5%

Latin America 13.5% 14.4% 12.7% 13.0% 13.3% 13.5% 13.5% 13.5%

EBIT margin 10.3% 10.1% 8.5% 9.2% 9.7% 10.2% 10.5% 10.6%

P&L 2010A 2011A 2012E 2013E 2014E 2015E 2016E 2016E

Revenues 2,561 2,809 3,648 3,790 4,037 4,348 4,674 5,028

Revenue growth 17.1% 9.7% 29.9% 3.9% 6.5% 7.7% 7.5% 7.6%

Gross Profit 652 696 904 939 1,001 1,078 1,158 1,246

Gross Margin 25.5% 24.8% 24.8% 24.8% 24.8% 24.8% 24.8% 24.8%

EBITDA (pre except.) 347 364 408 445 494 549 602 653

Margin 13.6% 12.9% 11.2% 11.8% 12.2% 12.6% 12.9% 13.0%

EBITA (pre except.) 298 312 330 364 407 456 502 545

Margin 11.6% 11.1% 9.0% 9.6% 10.1% 10.5% 10.7% 10.8%

EBIT (pre except.) 264 284 310 348 392 442 489 532

Margin 10.3% 10.1% 8.5% 9.2% 9.7% 10.2% 10.5% 10.6%

Interest charge (pre excep.) 10 19 63 58 51 44 35 26

PBTA (pre except.) 288 293 267 307 356 412 467 520

Tax 81 95 94 103 121 140 159 177

Minority interest 0 0 -1 0 0 0 0 0

Adjusted net profit 208 198 173 204 235 273 309 343

Adjusted EPS 0.35 0.34 0.29 0.35 0.40 0.46 0.53 0.58

DPS 0.10 0.10 0.10 0.12 0.14 0.16 0.18 0.20 Source: Company data, Credit Suisse estimates

12 February 2013


Figure 28: Balance sheet and cash flow statement

Balance sheet 2010A 2011A 2012E 2013E 2014E 2015E 2016E 2016E

Tangible assets 361 406 447 459 471 484 498 513

Intangible assets 467 553 863 868 876 886 899 913

Other fixed assets 134 141 149 159 163 164 164 164

Non-current assets 961 1,100 1,459 1,485 1,510 1,533 1,560 1,590

Cash and liquid assets 170 188 81 147 212 297 410 539

Accounts receivable 530 662 820 851 907 977 1,050 1,129

Inventories 43 55 64 66 71 76 82 88

Other current assets 272 188 244 254 270 291 313 337

Current assets 1,015 1,092 1,209 1,319 1,460 1,641 1,855 2,093

Total assets 1,976 2,192 2,668 2,804 2,970 3,175 3,415 3,684

Accounts payable 113 143 226 219 216 224 241 259

Short term debt 360 196 196 196 196 196 196 196

Other current liabilities 400 490 550 559 574 593 611 631

Current liabilities 873 830 972 974 987 1,013 1,049 1,087

Long term debt 189 466 705 702 702 702 702 702

Pension liabilities 0 0 0 0 0 0 0 0

Other long term liabilities 248 225 225 225 225 225 229 237

Non-current liabilities 436 691 930 927 927 927 931 939

Net Assets 667 671 767 904 1,056 1,235 1,436 1,658

Shareholders funds 667 671 767 904 1,056 1,235 1,436 1,658

Total liabilities and equity 1,976 2,192 2,668 2,804 2,970 3,175 3,415 3,684

Net debt 379 475 820 751 686 601 488 359

Adj net debt 553 614 959 890 825 740 627 497

Cash flow 2010A 2011A 2012E 2013E 2014E 2015E 2016E 2016E

Reported EBIT 263 284 310 348 392 442 489 532

Cash EBITDA 347 364 408 445 494 549 602 653

Change in working capital -85 -138 -82 -42 -64 -70 -65 -71

Other -29 -30 0 0 0 0 0 0

Tax paid 87 87 95 107 121 136 150 164

Interest paid 14 19 63 58 51 44 35 26

Other 0 0 -1 0 0 0 0 0

Cash from operations 204 167 169 239 259 300 352 393

Capex 82 123 109 114 121 130 140 151

Acquisitions 11 67 340 0 0 0 0 0

Sale of assets 6 10 0 0 0 0 0 0

Other 125 -128 0 0 0 0 0 0

Cashflow from investing 212 52 449 114 121 130 140 151

FCF to Equity 122 44 59 126 138 170 212 242

FCF to EV 136 63 122 183 189 214 247 268

Shares issued 0 0 0 0 0 0 0 0

Shares repurchased 0 0 0 0 0 0 0 0

Dividends paid 53 58 63 60 73 85 99 113

Change in debt 147 -38 239 -3 0 0 0 0

Other 0 0 0 0 0 0 0 0

Cash flow from financing -95 96 -176 64 73 85 99 113

Change in cash 86 19 -105 62 65 85 113 129 Source: Company data, Credit Suisse estimates

12 February 2013


Companies Mentioned (Price as of 08-Feb-2013)

G4S (GFS.L, 279.4p, OUTPERFORM, TP 330.0p) Prosegur (PSG.MC, €4.3, UNDERPERFORM, TP €4.0) Securitas (SECUb.ST, Skr59.0, OUTPERFORM, TP Skr69.0)

Disclosure Appendix

Important Global Disclosures

Eugene Klerk, Andrew Grobler, David Rigby, each certify, with respect to the companies or securities that the individual analyzes, that (1) the views expressed in this report accurately reflect his or her personal views about all of the subject companies and securities and (2) no part of his or her compensation was, is or will be directly or indirectly related to the specific recommendations or views expressed in this report.

Price and Rating History for G4S (GFS.L)

GFS.L Closing Price Target Price

Date (p) (p) Rating

09-Sep-10 256.30 280.00 N

11-Nov-10 248.60 245.00 U

18-Mar-11 255.40 250.00

13-May-11 282.50 260.00

12-Aug-11 255.00 260.00 O

25-Aug-11 262.40 290.00

18-Oct-11 241.50 240.00 N

02-Nov-11 253.20 285.00 O

14-Mar-12 278.00 300.00 N

10-May-12 266.40 310.00 O

16-Jul-12 254.60 300.00

31-Aug-12 253.00 295.00

19-Nov-12 242.40 275.00 N

14-Jan-13 270.30 330.00 O

* Asterisk signifies initiation or assumption of coverage.

N EU T RA L

U N D ERPERFO RM

O U T PERFO RM

Price and Rating History for Prosegur (PSG.MC)

PSG.MC Closing Price Target Price

Date (€) (€) Rating

20-Oct-10 4.41 5.35 O *

06-May-11 4.06 4.54 N

23-Jun-11 3.62 3.57 U

12-Aug-11 2.96 2.52

29-Nov-11 3.12 2.50

15-Mar-12 4.12 3.50

22-Mar-12 4.19 *

08-May-12 4.16 3.50 U

17-Jul-12 4.07 35.00 *


O U T PERFO RM

N EU T RA L

U N D ERPERFO RM

12 February 2013


Price and Rating History for Securitas (SECUb.ST)

SECUb.ST Closing Price Target Price

Date (Skr) (Skr) Rating

09-Feb-10 73.80 62.00 U

05-May-10 72.75 66.00

16-Nov-10 75.65 69.00

05-May-11 67.60 67.00

13-Jul-11 63.70 61.00

12-Aug-11 53.70 45.00

29-Nov-11 58.80 50.00

09-May-12 52.65 48.00

13-Jul-12 54.25 52.00

17-Jul-12 54.20 *

10-Aug-12 49.89 49.00 U

08-Nov-12 51.60 58.00 N

14-Jan-13 58.25 69.00 O


U N D ERPERFO RM

N EU T RA L

O U T PERFO RM

The analyst(s) responsible for preparing this research report received Compensation that is based upon various factors including Credit Suisse's total revenues, a portion of which are generated by Credit Suisse's investment banking activities

As of December 10, 2012 Analysts’ stock rating are defined as follows:

Outperform (O) : The stock’s total return is expected to outperform the relevant benchmark*over the next 12 months.

Neutral (N) : The stock’s total return is expected to be in line with the relevant benchmark* over the next 12 months.

Underperform (U) : The stock’s total return is expected to underperform the relevant benchmark* over the next 12 months.

*Relevant benchmark by region: As of 10th December 2012, Japanese ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractiv e, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. As of 2nd October 2012, U.S. and Canadian as well as European ratings are based on a stock’s total return relative to the analyst's coverage universe which consists of all companies covered by the analyst within the relevant sector, with Outperforms representing the most attractive, Neutrals the less attractive, and Underperforms the least attractive investment opportunities. For Latin Ame rican and non-Japan Asia stocks, ratings are based on a stock’s total return relative to the average total return of the relevant country or regional benchmark; Australia, New Zealand are, and prior to 2nd October 2012 U.S. and Canadian ratings were based on (1) a stock’s absolute total return potential to its current share price and (2) the relative attractiveness of a stock’s total return potential within an analyst’s coverage universe. For Australian and New Zealand stocks, 12 -month rolling yield is incorporated in the absolute total return calculation and a 15% and a 7.5% threshold replace the 10-15% level in the Outperform and Underperform stock rating definitions, respectively. The 15% and 7.5% thresholds replace the +10-15% and -10-15% levels in the Neutral stock rating definition, respectively. Prior to 10th December 2012, Japanese ratings were based on a stock’s total return re lative to the average total return of the relevant country or regional benchmark.

Restricted (R) : In certain circumstances, Credit Suisse policy and/or applicable law and regulations preclude certain types of communications, including an investment recommendation, during the course of Credit Suisse's engagement in an investment banking transaction and in certain other circumstances.

Volatility Indicator [V] : A stock is defined as volatile if the stock price has moved up or down by 20% or more in a month in at least 8 of the past 24 months or the analyst expects significant volatility going forward.

Analysts’ sector weightings are distinct from analysts’ stock ratings and are based on the analyst’s expectations for the fundamentals and/or valuation of the sector* relative to the group’s historic fundamentals and/or valuation:

Overweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is favorable over the next 12 months.

Market Weight : The analyst’s expectation for the sector’s fundamentals and/or valuation is neutral over the next 12 months.

Underweight : The analyst’s expectation for the sector’s fundamentals and/or valuation is cautious over the next 12 months.

*An analyst’s coverage sector consists of all companies covered by the analyst within the relevant sector. An analyst may cover multiple sectors.

12 February 2013


Credit Suisse's distribution of stock ratings (and banking clients) is:

Global Ratings Distribution

Rating Versus universe (%) Of which banking clients (%)

Outperform/Buy* 42% (53% banking clients)

Neutral/Hold* 38% (47% banking clients)

Underperform/Sell* 16% (40% banking clients)

Restricted 3%

*For purposes of the NYSE and NASD ratings distribution disclosure requirements, our stock ratings of Outperform, Neutral, an d Underperform most closely correspond to Buy, Hold, and Sell, respectively; however, the meanings are not the same, as our stock ratings are determined on a relative basis. (Please refer to definitions above.) An investor's decision to buy or sell a security should be based on investment objectives, current holdings, and other individual factors.

Credit Suisse’s policy is to update research reports as it deems appropriate, based on developments with the subject company, the sector or the market that may have a material impact on the research views or opinions stated herein.

Credit Suisse's policy is only to publish investment research that is impartial, independent, clear, fair and not misleading. For more detail please refer to Credit Suisse's Policies for Managing Conflicts of Interest in connection with Investment Research: http://www.csfb.com/research and analytics/disclaimer/managing_conflicts_disclaimer.html

Credit Suisse does not provide any tax advice. Any statement herein regarding any US federal tax is not intended or written to be used, and cannot be used, by any taxpayer for the purposes of avoiding any penalties.

Price Target: (12 months) for G4S (GFS.L)

Method: Price target set using DCF. We combine an organic DCF, using a 2013 WACC of 7.7% with a DCF for the value of future acquisitions. The organic DCF suggests a value fo 283p with an additional 47p from the acquisitive DCF

Risk: Downside risks are 1) wage growth is not fully passed onto clients 2) start up costs from new contracts, 3) Olympic issues negatively impact its ability to secure new business 4) robbery costs in cash solutions may result in rising insurance costs. Upside risks are a return to growth in the UK and US government sectors or value creative acquisitions.

Price Target: (12 months) for Prosegur (PSG.MC)

Method: Our price is set using a DCF applied to both our organic and potential acquisition earnings. We use 5 years of explicit forecasts, hold RoNA fixed for a further 5 years before fading towards the WACC at 10% of the difference between WACC and RoNA per year. We use a 7.8% WACC in 2012E.

Risk: Risk to our target price relates to a stronger and quicker than expected improvement of the economic outlook for Southern Europe or Latin America. In addition if competitive pressures were to ease Prosegur would also likely be worth more.

Price Target: (12 months) for Securitas (SECUb.ST)

Method: Our price is set using a DCF.We combine an organic DCF using a 2013 WACC of 6.8%, which suggest a value of SKr 63with a DCF valuing future acquisitions, which indicates an additional value of Skr 6

Risk: Downside: ongoing gross margin pressure in the industry impacts group margins, further contract losses, rising costs if unemployment falls and staff turnover begins to rise, and healthcare reform in the US. Upside risks are quicker than expected benefits from shift to technology or additional savings from its cost reduction program

Please refer to the firm's disclosure website at www.credit-suisse.com/researchdisclosures for the definitions of abbreviations typically used in the target price method and risk sections.

See the Companies Mentioned section for full company names

Credit Suisse expects to receive or intends to seek investment banking related compensation from the subject company (SECUb.ST) within the next 3 months.

Important Regional Disclosures

Singapore recipients should contact Credit Suisse AG, Singapore Branch for any matters arising from this research report.

The analyst(s) involved in the preparation of this report have not visited the material operations of the subject company (GFS.L, PSG.MC, SECUb.ST) within the past 12 months

Restrictions on certain Canadian securities are indicated by the following abbreviations: NVS--Non-Voting shares; RVS--Restricted Voting Shares; SVS--Subordinate Voting Shares.

12 February 2013


Individuals receiving this report from a Canadian investment dealer that is not affiliated with Credit Suisse should be advised that this report may not contain regulatory disclosures the non-affiliated Canadian investment dealer would be required to make if this were its own report.

For Credit Suisse Securities (Canada), Inc.'s policies and procedures regarding the dissemination of equity research, please visit http://www.csfb.com/legal_terms/canada_research_policy.shtml.

The following disclosed European company/ies have estimates that comply with IFRS: (GFS.L, SECUb.ST).

As of the date of this report, Credit Suisse acts as a market maker or liquidity provider in the equities securities that are the subject of this report.

Principal is not guaranteed in the case of equities because equity prices are variable.

Commission is the commission rate or the amount agreed with a customer when setting up an account or at any time after that.

To the extent this is a report authored in whole or in part by a non-U.S. analyst and is made available in the U.S., the following are important disclosures regarding any non-U.S. analyst contributors: The non-U.S. research analysts listed below (if any) are not registered/qualified as research analysts with FINRA. The non-U.S. research analysts listed below may not be associated persons of CSSU and therefore may not be subject to the NASD Rule 2711 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Credit Suisse Securities (Europe) Limited........................................................................................ Eugene Klerk ; Andrew Grobler ; David Rigby

Important Credit Suisse HOLT Disclosures

With respect to the analysis in this report based on the Credit Suisse HOLT methodology, Credit Suisse certifies that (1) the views expressed in this report accurately reflect the Credit Suisse HOLT methodology and (2) no part of the Firm’s compensation was, is, or will be directly related to the specific views disclosed in this report

The Credit Suisse HOLT methodology does not assign ratings to a security. It is an analytical tool that involves use of a set of proprietary quantitative algorithms and warranted value calculations, collectively called the Credit Suisse HOLT valuation model, that are consistently applied to all the companies included in its database. Third-part data (including consensus earnings estimates) are systematically translated into a number of default algorithms available in the Credit Suisse HOLT valuation model. The source financial statement, pricing, and earnings data provided by outside data vendors are subject to quality control and may also be adjusted to more closely measure the underlying economics of firm performance. The adjustments provide consistency when analyzing a single company across time, or analyzing multiple companies across industries or national borders. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes the baseline valuation for a security, and a user then may adjust the default variables to produce alternative scenarios, any of which could occur.

Additional information about the Credit Suisse HOLT methodology is available on request.

The Credit Suisse HOLT methodology does not assign a price target to a security. The default scenario that is produced by the Credit Suisse HOLT valuation model establishes a warranted price for a security, and as the third-party data are updated, the warranted price may also change. The default variable may also be adjusted to produce alternative warranted prices, any of which could occur.

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12 February 2013


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Recipients who are not market professional or institutional investor customers of CS should seek the advice of their independent financial advisor prior to taking any investment decision based on this report or for any necessary explanation of its contents. This research may relate to investments or services of a person outside of the UK or to other matters which are not regulated by the FSA or in respect of which the protections of the FSA for private customers and/or the UK compensation scheme may not be available, and further details as to where this may be the case are available upon request in respect of this report. CS may provide various services to US municipal entities or obligated persons ("municipalities"), including suggesting individual transactions or trades and entering into such transactions. Any services CS provides to municipalities are not viewed as "advice" within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. 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Investment principal on bonds can be eroded depending on sale price or market price. In addition, there are bonds on which investment principal can be eroded due to changes in redemption amounts. Care is required when investing in such instruments.

When you purchase non-listed Japanese fixed income securities (Japanese government bonds, Japanese municipal bonds, Japanese government guaranteed bonds, Japanese corporate bonds) from CS as a seller, you will be requested to pay the purchase price only.

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