MORNING NOTE

11 February 2015

THIS DOCUMENT IS NOT PRODUCED BY KBC SECURITIES USA, INC.

kbcsecurities.com Refer to important disclosures, disclaimers and analyst certifications at the end of the body of this research.

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CONTENTS Company / Sector Comment Recommendation Price Target Price

Barco DSM Euronav Galapagos Heineken Heineken Holding ING IO&W NN Group WDP

FY14 results preview 4Q in line, slightly better than expected guidance Fourth quarter results € 1.6m IWT grant for hepatitis B program FY14 slightly better than expected, TP upped FY14 profit of 760m allows for 0.74 final DPS Solid underlying Q4, dividend reinstated Analyst meeting: positive trend confirmed Strong Q4, Solvency II guidance reassures Good FY14 results and outstanding outlook

Hold Accumulate Suspended Buy Buy Buy Buy Accumulate Buy Buy

57.74 45.52 9.69

19.11 64.60 57.17 11.21 25.30 23.84 68.72

54.00 53.00

- 22.00 72.00 64.00 15.00 26.00 27.00 80.00

CHANGES IN RECOMMENDATION CHANGES IN TARGET PRICE Company From To Company From To

Heineken Heineken Holding IO&W WDP

68.00 60.00 25.00 74.00

72.00 64.00 26.00 80.00

KEY FIGURES CHANGES IN EPS FORECAST

(at close) Price 1D 1M 12M Company From To

2014 2015 2014 2015

AEX BEL20 CAC40 DAX30 FTSE100 EUROSTOXX50 STOXX50

453.8 3,543.8 4,695.7

10,753.8 6,829.1 3,383.1 3,252.7

0.6% 0.9% 1.0% 0.9%

-0.1% 1.1% 0.1%

9.2% 9.1%

12.4% 11.5% 5.0%

11.2% 10.1%

16.5% 21.6% 10.8% 15.8% 3.6%

11.6% 13.8%

IO&W (€) WDP (€)

1.70 4.31

1.71 4.42

DJIA S&P500 NASDAQ Comp

17,729.2 2,046.7 4,726.0

-0.5% -0.4% -0.4%

-1.0% -0.8% -0.2%

12.3% 13.9% 14.6%

USD/EUR GBP/EUR

0.8831 1.3475

0.1% 0.2%

4.5% 5.3%

20.3% 11.9%

Bel govt French govt Dutch govt

0.61% 0.65% 0.46%

4.0bps 4.0bps 4.0bps

-13.0bps -13.0bps -14.0bps

-182.0bps -162.0bps -144.0bps

Source: KBC Securities

MORNING NOTE

11 February 2015

THIS DOCUMENT IS NOT PRODUCED BY KBC SECURITIES USA, INC.

2

CORPORATE CALENDAR ROADSHOW CALENDAR Date Company Event Date Company Place

11.02.15 12.02.15 13.02.15 17.02.15 18.02.15 19.02.15

DSM Euronav Heineken Heineken Holding ING NN Group WDP Ageas Akzo Nobel Barco KBC Montea Telenet Leasinvest RE Lotus Bakeries TNT Express TNT Express Wolters Kluwer AEGON Arcadis BAM Group Befimmo EVS Gimv Randstad Sipef

Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Results 4Q14 Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Results FY14 Investor Day Results FY14 Results FY15 Results FY14 Results FY14 Results FY14 Results FY14 Results 3Q14 Results 1Q15 Results FY14

17.02.15 18.02.15 20.02.15 26.02.15 02.03.15 03.03.15 04.03.15 09.03.15

Cofinimmo Fagron Fagron Befimmo Ageas Umicore Ablynx Elia D'Ieteren D'Ieteren Elia

Brussels London London Paris Brussels Paris Paris Brussels London London Brussels

For an overview of our upcoming events, please click here.

PUBLICATION OVERVIEW Date Company / Sector Title report Recommendation Target Price

10.02.15 06.02.15 05.02.15 04.02.15 03.02.15 02.02.15 30.01.15 29.01.15 28.01.15 26.01.15 23.01.15 20.01.15 16.01.15 14.01.15

Telenet Ageas Corbion Mobistar Arcadis BinckBank ING Real Estate Jensen-Group Melexis Nyrstar Biotechnology Mobistar Picanol Beter Bed Holding Barco Various DSM Kinepolis TNT Express

Prime European cable asset Life is good in Asia. TP up 11% on Taiping Life Earnings momentum about to accelerate Investment case remains intact 2015 to profit from Fx, M&A and organic growth Focus on capital return, asset management Lukewarm 4Q14E, Russia/oil under control Constructing a view on 2015 January: All quiet as results season nears Trends favouring the laundry business On the right track but priced for perfection Firming US$ drives earnings upgrade 2015: What's up, Doc? BUY-O-TECH?! Upper end REBITDA guidance within reach Everybody is looking at the dollar, don’t forget the ye ... Wake-up call after improving like-for-like growth More caution on Laser projector warranted Benelux e-commerce: growing at different speeds The Swiss Franc Nightmare A new site near Paris: ‘The Wolf’ becomes ‘Le loup’ Judgment day is coming on 18 February

Accumulate Buy Buy Accumulate Buy Accumulate Buy Accumulate Hold Buy Accumulate Accumulate Accumulate Hold Accumulate Buy Hold

53.00 42.00 19.00 21.00 31.00 9.00

15.00

20.00 50.00 4.50

21.00 36.00 20.00 54.00

53.00 40.00 5.80

MORNING NOTE

11 February 2015

THIS DOCUMENT IS NOT PRODUCED BY KBC SECURITIES USA, INC.

3

BARCO FY14 results preview TECHNOLOGY HARDWARE & EQUIPMENT CURRENT PRICE € 57.74 HOLD BELGIUM TARGET PRICE € 54.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

Barco FY14 results will be out tomorrow Thursday 12 February 2015 before market. The main numbers to look at are consensus for 2H14E sales (incl. Defense a Aerospace) of € 551.2m and € 76.1m 2H14E EBITDA. Although “Defense & Aerospace” would be sold (the initial agreement was reached in September 2014), FY14 results reporting may still include this division. The numbers in our recent note “More caution on Laser projector warranted” (dated 23 January 2015) were on an as-if-“Defense & Aerospace”-was-sold basis. We adopted our model already in this regard. On 2 February 2015 Barco reported indeed the finalising of the sale of its ”Defense & Aerospace” division to US-based Esterline Corporation on January 31, 2015. Barco indicated again that the proceeds of this transaction will fund growth initiatives in the core divisions (Entertainment, Enterprise, Healthcare). To reflect this, Barco will (again) change its divisional reporting. So this will be the last reporting split in “Entertainment & Corporate”, “Healthcare”, “Industrial&Government”, “Defense & Aerospace” and “Ventures”. FY14E consensus sales forecasts are respectively € 509.1m, € 188.4m, € 166.1m, € 139.0m and € 49.0m resulting in € 1,049.2m FY14E consensus sales including “Defense & Aerospace” and € 910.2m without this division. FY14E EBITDA consensus per division is respectively € 83.1m, € 23.4m, € 6.3m, € 19.0m and € -1.4m, resulting in € 131.0m FY14E consensus EBITDA including “Defense & Aerospace” and € 112.0m without this division. Recall that Barco’s order book at end-3Q14 stood at € 488.9m, (+€ 25.5m y/y and +€ 9.1m q/q. 3Q14 incoming orders were a weaker-than-expected € 247.6m (-14.1% y/y). Sales in 3Q were € 257.9m (+0.8% y/y). 3Q14 sales of Entertainment& Corporate decreased 1.9% to € 129.8m, +1.4% for Healthcare, while Industrial & Government recovered nicely, growing 22.2% y/y to € 41.8m. Barco indicated that EBITDA and EBITDA margin for 3Q14 improved relative to 3Q13. However, at the time of the 1H14 results (23 July 2014) management said that it “expects to deliver consolidated revenues for 2H14 that are ahead of 2H13”, while at the 3Q14 trading update this was lowered to “Barco is confident about delivering results for 2H14 that are comparable to 2H13”. (€ 560.1m sales and € 76.5m EBITDA in 2H13 while consensus for 2H14E (incl. “Defense & Aerospace”) is respectively at € 551.2m and € 76.1m) Conclusion In the short run, Barco’s share price will react on the fact if they can beat or miss the consensus for 2H14E sales (incl. Defense & Aerospace) of € 551.2m and € 76.1m 2H14E EBITDA. For the longer run, although we admit Barco should benefit from the current euro weakness, we have a more cautious view with a Target Price of € 54 and a HOLD rating. Our main argument is that more caution on Laser projector is warranted as Barco seems to be caught in a ‘Catch 22’: Laser projectors ASPs are not declining fast enough to increase the penetration rate in the Digital Cinema market while the penetration rate of Laser projectors in the Digital Cinema market is not increasing because the Laser projectors ASPs are not declining fast enough!

Bloomberg BAR BB Reuters BAR.BR www.barco.com Market Cap € 750.0m Shares outst. 13.0m Volume (daily) € 1,288,202 Free float 73.9%

Next corporate event

Results FY14: 12 February 2015

(€ m) 2014E 2015E 2016E Sales 908.9 916.4 941.4 REBITDA 108.0 119.0 127.2 Net earnings 42.2 41.5 46.7 Adj. EPS (€) 2.71 3.29 3.70 P/E (x) 21.3 17.5 15.6 EV/REBITDA 3.7 3.2 2.8 FCF Yield 8.9% 3.9% 4.3% Dividend yield 2.7% 2.9% 3.0% Guy Sips +32 2 429 30 02 guy.sips@kbcsecurities.be

778186909499103107112116

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11 February 2015

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DSM 4Q in line, slightly better than expected guidance CHEMICALS CURRENT PRICE € 45.52 ACCUMULATE NETHERLANDS TARGET PRICE € 53.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

4Q14 EBITDA from contin. operations decreased by 3%, from € 297m in 4Q13 to € 288m in 4Q14, broadly in line with our and CSS forecasts of respectively € 290m and € 288m. 4Q revenue from contin. operations was up by 9% to € 2,374m (KBCS € 2,316m, CSS € 2,271m). 4Q net result was negative at € -107m (KBCS € 96m) following a € 186m impairment (on caprolactam). Nutrition: 4Q14 revenue grew by 8% to € 1,124m (KBCS € 1,072m, CSS € 1,066m) with organic growth of 4% (volume +3%, price/mix +1%). Sales declined by 3% organically for Human Nutrition & Health (€ 394m). US retail sales for Multivitamins and Omega-3 dietary supplements continued to decline, with positive momentum outside the US. Sales in infant nutrition normalized after earlier destocking. Food & Beverage markets continue to be sluggish in mature markets with good development in emerging markets. Demand for premixes stayed healthy. Sales were up by 10% org. for Animal Nutrition (€ 572m), broken down in a 7% volume effect and a 3% price/mix effect (which means that lower vit E prices were compensated for by higher prices for several other vitamins and ingredients). Sales performance was strong in almost all active ingredients and premix businesses. EBITDA decreased by 4% to € 200m (KBCS € 211m, CSS € 212m) which means that the EBITDA margin landed at 17.8% (vs. 20.6% in 3Q14). Performance Materials: Revenue increased by 7% to € 699m (KBCS € 705m, CSS € 688m) with organic growth of 3% (volume +4%, price/mix -1%). EBITDA grew from € 77m in 4Q13 to € 87m in 4Q14 (KBCS € 85m, CSS € 82m), on the back of good volume growth and efficiencies. Polymer Intermediates: 4Q revenue grew by 18% to € 465m (KBCS € 443m, CSS € 424m) with organic growth of 14% (volume +25%, price/mix -11%). EBITDA decreased by 23% to € 23m (KBCS € 22m, CSS € 21m). The Corporate line saw EBITDA decrease from € -15m in 4Q13 to € -19m in 4Q14 while innovation reported a € -3m EBITDA vs. € -3m in 4Q13. Net debt decreased only slightly vs. end 3Q14 (from € 2.48bn to € 2.42bn), which was below our expectations (around € 2bn). Outlook: DSM aims to deliver a 2015 EBITDA slightly ahead of 2014, with the overall impact of currencies on 2015 roughly neutral (recall that we estimate the unhedged CHF impact (at a 1.05 rate vs. the EUR) at about € 80m, but this should be compensated by the USD we believe). The impact from vitamin E prices (at January levels persisting through the entire year) would be € 80m on EBITDA. We currently bank on a FY15 EBITDA from continuing operations of € 1,154m with consensus at € 1,168m (vs. the FY14 number of also € 1,168m). Strategy update: There was no precise update on the strategic actions DSM intends to engage into for Polymer Intermediates (caprolactam and acrylonitrile) and Composite Resins. Conclusion: 4Q14 results were broadly in line with consensus with Nutrition slightly below expectations and the other divisions slightly above. The caprolactam impairment was unexpected but is not a major surprise neither. Net debt was higher than expected while 2015 guidance is slightly better than our forecasts. All in all, we stick to our Accumulate rating and our (Sum-of-the-parts based) target price of € 53.

Bloomberg DSM NA Reuters DSMN.AS www.dsm.com Market Cap € 7,819.5m Shares outst. 179.1m Volume (daily) € 35,093,746 Free float 100.0%

Next corporate event

Results 1Q15: 29 April 2015

(€ m) 2014E 2015E 2016E Sales 9,224.7 9,521.4 9,839.2 REBITDA 1,168.1 1,153.8 1,254.3 Net earnings 352.5 426.4 497.3 Adj. EPS (€) 2.45 2.38 2.72 P/E (x) 18.6 19.1 16.7 EV/REBITDA 8.6 8.7 8.0 FCF Yield 1.3% 4.5% 4.4% Dividend yield 3.6% 3.7% 3.8% Wim Hoste +32 2 429 37 13 wim.hoste@kbcsecurities.be

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11 February 2015

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5

EURONAV Fourth quarter results INDUSTRIAL TRANSPORTATION CURRENT PRICE € 9.69 SUSPENDED BELGIUM TARGET PRICE €

Source: Thomson Reuters Datastream

Euronav this morning released its 4Q14, preliminary FY14 results. The company reported EBITDA, EBIT, result from joint ventures and net result for the quarter of $ 67.6m, $ 19.7m, $ 8.0m and $ -3.9m. Note the financial result of $ -37.5m is impacted by the early repayment of the $ 235.5m bond, as announced on 3 February. As this bond was issued below par, Euronav has amortized $ 20.4m in 4Q14, bringing the amortization related to this bond to $ 31.9m for FY14. A further $ 4.1m will be amortized in 1Q15. For the full year, Euronav reported EBITDA, EBIT, result from JVs and net result of $ 172.5m, $ 11.5m, $ 30.3m and $ -45.8m. During the fourth quarter, Euronav’s VLCC fleet operated on the spot market through TI earned on average a TCE rate of $ 31,650/day. Euronav’s Suezmax vessels operated on TC contracts earned on average $ 30,513/day while its Suezmaxes operated spot earned on average $ 24,248/day. So far, Euronav has covered 53% of its available spot VLCC revenue days for the first quarter at an average of $ 59,400/day. Approximately 69% of its available spot Suemax revenue days for the quarter have been fixed at $ 40,300/day on average. Last week, average VLCC earnings weakened by 9% to $ 56,857/day on Friday. Average Suezmax earning were up by 16% w/w to $ 57,334/day.

Bloomberg EURN BB Reuters EUAV.BR www.euronav.be Market Cap € 1,542.3m Shares outst. 159.2m Volume (daily) € 1,417,298 Free float 70.5%

Next corporate event

($ th) 2014E 2015E 2016E Sales 455,763 736,608 636,439 REBITDA 220,330 489,422 380,550 Net earnings -19,963 198,432 106,856 Adj. EPS ($) -0.16 1.26 0.68 P/E (x) 8.7 16.2 EV/REBITDA 13.2 5.3 6.3 FCF Yield 8.2% 21.5% 16.1% Dividend yield 0.0% 5.2% 5.2% Wouter Vanderhaeghen +32 2 429 37 30 wouter.vanderhaeghen@kbcsecurities.be

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11 February 2015

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6

GALAPAGOS € 1.6m IWT grant for hepatitis B program PHARMACEUTICALS & BIOTECHNOLOGY CURRENT PRICE € 19.11 BUY BELGIUM TARGET PRICE € 22.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

News: The Flemish IWT awarded a € 1.6m grant to support the discovery and development of new hepatitis B treatments to a consortium in which Galapagos will collaborate with the Belgian Rega Institute (University of Leuven) and the University of Heidelberg. No impact. Our View: The project wants to discover and develop novel compounds to cure chronic hepatitis B infection. Galapagos will use its target discovery and compound screening technology to develop compounds against viral protein targets and on inhibitors of host call proteins. The academic partners will contribute to the development of assays, perform analysis of the mechanism of action of drug candidates, and bring in expertise of the virus and its life cycle to accelerate the progression of drug development. It is not disclosed how much of the grant money will be allocated to the Galapagos work. Chronic Hepatitis B is caused by the hepatitis B virus. About a third of the world population has been infected at one point in their lives, including 240 million to 350 million who have chronic infections. In those who get infected around the time of birth 90% develop chronic hepatitis B while less than 10% of those infected after the age of five do. According to the WHO, over 650,000 people die of hepatitis B each year. The disease is now only common in East Asia and sub-Saharan Africa where between 5 and 10% of adults have chronic disease. Rates in Europe and North America are less than 1%. Acute hepatitis B infection does not usually require treatment and most adults clear the infection spontaneously. Treatment of chronic infection may be necessary to reduce the risk of cirrhosis and liver cancer. There are several small-molecule antiviral drugs on the market and two immune modulating treatments (interferon). None of the available treatments can clear the infection, as they focus on stopping the virus from replicating, thus minimizing liver damage. In hepatitis C, a closely related virus, the pharma industry (lead by Gilead and AbbVie) has been able to develop therapies which have changed the treatment paradigm drastically, thereby reaching a high level curation, which is also the aim of the Galapagos-Rega-Heidelberg collaboration. While the new hepatitis C drugs have been huge commercial success (Gilead’s Sovaldi booked $ 10bn in its first commercial year), the high pricing of the new hepatitis C drugs have caused a debate on drug pricing. Conclusion: We welcome the IWT grant which will allow Galapagos to support its early discovery efforts in the search for new hepatitis B therapies. No impact on our valuation.

Bloomberg GLPG NA Reuters GLPG.BR www.glpg.com Market Cap € 578.7m Shares outst. 30.3m Volume (daily) € 1,323,132 Free float 100.0%

Next corporate event

Results FY14: 6 March 2015

(€ th) 2014E 2015E 2016E Sales 100,668 108,832 50,149 REBITDA 28,453 -3,540 -61,027 Net earnings 18,919 -3,111 -62,241 Adj. EPS (€) 0.62 -0.10 -2.05 P/E (x) 30.6 EV/REBITDA 13.3 FCF Yield -17.3% 1.6% -9.3% Dividend yield Jan De Kerpel, PhD +32 2 429 84 67 jan.dekerpel@kbcsecurities.be

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7

HEINEKEN FY14 slightly better than expected, TP upped BEVERAGES CURRENT PRICE € 64.60 BUY NETHERLANDS TARGET PRICE € 72.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

FY14 results were slightly better than our and CSS figures. FY group beer volumes increased by 1.8% (+2.0% organically vs +1.7% expected by KBCS & CSS) to 198.8m hl (KBCS 198.4m, CSS 198.5m). 4Q group beer volume grew by +2.1% organ. to 49.6m hl (KBCS 49.3m, CSS 49.5m). FY consol. beer volume increased by 1.9% org. to 181.3m hl (KBCS & CSS 180.9m). FY14 group revenue grew by 0.1% (+3.3% org.) to € 21,191m (KBCS € 20,961m, CSS € 21,197m). Group revenue per hl (incl. JV) grew by 1.4% in FY (vs +1.5% in 1H14 and +0.9% in 3Q14). FY cons. revenue increased by 3.0% org. to € 19.26bn (KBCS € 19.03bn, CSS € 19.2bn). FY14 group operating profit (beia) grew by 5.2% (+7.8% org.) to € 3,359m (KBCS € 3,318m, CSS € 3,337m). FY14 consol. operating profit (beia) grew by 8.7% org. to € 3,129m (KBCS € 3,081m, CSS € 3,102m). The figures imply a 3.8% growth in 2H cons. operating profit (beia). FY14 net profit (beia) grew by 11% (+14% org.) to € 1,758m (KBCS € 1,714m, CSS € 1,743m). FY14 group beer volumes breakdown: Africa +6.7% org. to 29.3m hl (KBCS 29.2m, CSS 29.1m); Americas +3.7% org. to 57.0m (KBCS 57.0m; CSS 57.2m); Asia +5.0% org. to 24.0m hl (KBCS & CSS 24.1m); CEE -4.2% organ. to 46.0m hl (KBCS 45.7m, CSS 45.6m); Western Europe +2.3% org. to 42.5m hl (KBCS & CSS 42.4m). FY14 consolidated operating profit (beia) breakdown: Africa +8.8% org. to € 655m (KBCS € 660m, CSS € 647m), Americas +16% org. to € 780m (KBCS € 823m, CSS € 804m); Asia Pacific +5.4% org. to € 550m (KBCS € 532m, CSS € 550m); CEE –4.5% org. to € 272m (KBCS € 253m, CSS € 260m); Western Europe +4.5% to € 852m (KBCS € 821m, CSS € 851m). Net debt increased from € 10.9bn mid-2014 to € 11.1bn at year-end 2014 (KBCS € 10.2bn, CSS € 9.1bn but we assume CSS included the closing of the Mexican packaging business sale in 2014). Net debt/EBITDA landed at 2.5x vs the target of below 2.5x which would have reached if the Empaque sale would have closed. Heineken proposed to increase dividend from € 0.89 in FY13 to € 1.10 (recall interim div of € 0.36 was already paid) with dividend pay-out policy upped from 30-35% to 30-40% Outlook: The group expects positive organic revenue growth in 2015 with volume growth below 2014 (+2.0% - vs KBCS +2.3%, CSS +1.9%). Rev/hl is guided up although limited because of deflationary and off premise pressure in some markets. Marketing & selling expenses are guided slightly up as a percentage of revenue (2014:12.7%). Further cost savings are not quantified. Input costs should be slightly lower in 2015 (excluding FX). Heineken reiterates 40bps consolidated operating profit (beia) margin improvement in medium term, but 2015 will show below 40bps margin improvement because of the impact from the Empaque sale (about 25bps impact). Translational FX impact is estimated at € 130m (consol operating profit level) and € 80m (net profit beia).The statements compare to our FY15 forecasts of a group beer volume of 203.0m (CSS 202.0m), cons. operating profit (beia) of € 3,248m (CSS € 3,282m) and net profit (beia) of € 1,944m (CSS € 1,919m). Conclusion: Despite slightly lower than expected vol. growth guidance for 2015 (in line with CSS), we reiterate our BUY rating as we expect further profit growth in 2015 and we consider valuation attractive, at 9.9x EV/REBITDA15E and 9.0x EV/REBITDA16E. We roll forward our valuation models and increase TP to € 72 (from € 68).

Bloomberg HEIA NA Reuters HEIN.AS www.heineken.com Market Cap € 37,209.8m Shares outst. 576.0m Volume (daily) € 54,573,310 Free float 57.6%

Next corporate event

Trading update 1Q15: 22 April 2015

(€ m) 2014E 2015E 2016E Sales 19,029.5 19,266.8 20,052.8 REBITDA 4,443.1 4,665.5 4,963.3 Net earnings 1,450.1 2,054.1 1,919.3 Adj. EPS (€) 2.98 3.38 3.71 P/E (x) 21.7 19.1 17.4 EV/REBITDA 10.9 9.9 9.0 FCF Yield 3.5% 6.2% 6.6% Dividend yield 1.5% 1.7% 1.8% Wim Hoste +32 2 429 37 13 wim.hoste@kbcsecurities.be

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HEINEKEN HOLDING FY14 profit of 760m allows for 0.74 final DPS EQUITY INVESTMENT INSTRUMENTS CURRENT PRICE € 57.17 BUY NETHERLANDS TARGET PRICE € 64.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

News: The FY14 net result of Heineken Holding’s participating interest in Heineken NV (50%) amounts to € 760m, up 11% y/y. Heineken Holding proposes to distribute a cash dividend of € 0.74 p.s., identical to Heineken’s dividend (Heineken’s policy pay-out ratio widened from 30-35% to 30-40% of net profit. Ex-date of the final dividend will be 27 April 2015, while payment is scheduled for 6 May 2015. In 2014, Heineken Holding already distributed an interim dividend of € 0.36. Our View: The dividend amount is in line with Heineken NV’s dividend policy to pay out 30% to 40% of net profit (beia) and is hence in line with forecasts. Statutory annual results for a holding company such as Heineken Holdings, which is the archetype of a cascade company without operational costs end zero net cash, are not a stock price driver. KBCS decided to increase its target price on Heineken, on the back of strong profit growth for 2015 (despite somewhat lower volume guidance). Valuation is deemed attractive on EV/REBITDA 2015 and 2016 multiples, leading to a TP increase from € 68 to € 72. For an in-depth overview of Heineken NV’s FY14 results, we refer to comments in today’s morning note. In the media, it is rumoured that Femsa’s stake in Heineken (12.5%) and Heineken Holding (14.9%) could be up for sale. In total, Femsa has roughly 20% of Heineken. The agreed upon lock-up period since takeover in 2010 ends 3 May 2015. Conclusion: We have increased our TP on Heineken Holding from € 60 to € 64, reflecting an increase of the portfolio’s underlying potential on the back of today’s decision by KBCS to increase Heineken TP (from € 68 to € 72). Based on yesterday’s closing price we estimate adjusted equity value per share at € 64.6, with a current discount of 11.5%, which compares to a 2-year historical average of 10%. Our new TP of € 64 implies a 10% discount to target equity value and an upside potential of 13%. Buy maintained.

Bloomberg HEIO.NA Reuters HEIO.AS www.heinekeninternational.com Market Cap € 16,465.6m Shares outst. 288.0m Volume (daily) € 7,255,379 Free float 33.5%

Next corporate event

Results 1Q15: 22 April 2015

(€ m) 2011 2012 2013 Net result 303.0 1,479.0 691.0 Adj. net result 0.0 1,477.0 683.0 Basic EPS (€) 1.17 5.13 2.37 ROE 6.4% 33.3% 12.0% Adj. eq. value 40.80 50.47 48.78 Premium/disc. 13.5% 17.9% 5.7% DPS (€) 0.83 0.89 0.89 Dividend yield 2.4% 2.2% 1.9% Yves Franco +32 2 429 45 04 yves.franco@kbcsecurities.be

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ING Solid underlying Q4, dividend reinstated BANKS CURRENT PRICE € 11.21 BUY NETHERLANDS TARGET PRICE € 15.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

ING’s 4Q14 results were slightly short of expectations but this is due to one-offs while the underlying operating performance is ahead of our and CSS estimates. The capital generation was moreover stronger than expected allowing for an earlier-than-anticipated resumption of the dividend (2H14 versus 1H15). The group’s pledge to return additional capital to shareholders (market conditions permitting) will lastly be taken positively by the market. BUY reiterated. ING Group reported Q4 results which were slightly short of expectations on the underlying PBT level (€ 783m vs. CSS € 828m) due to higher than anticipated restructuring charges and other one-off elements (e.g. negative CVA/DVA charges). Excluding these non-operational items, the underlying operating performance was very solid on the back of better than anticipated Net Interest Margins (1.53% versus 1.49% CSS), lower than expected Loan loss provisions (€ 400m versus € 432m CSS) and diligent cost management. The Underlying PBT excluding one-offs rose 20.1% y/y to € 1376m, reflecting higher net interest income, lower expenses and lower risk costs. The capital generation was moreover solid with the bank’s BIII CT1 ratio increasing 30bps q/q to 11.4% (CSS 11.2%). Following the divestment of the Insurance stakes, the pro-forma Group CET1 ratio on a fully loaded basis is 13.1%. Backed by its solid capital position, the group decided to reinstate the dividend proposing to pay € 0.12 per share (CSS € 0.08). For next year, the group reiterates its intention to pay at least 40% of net income while it will evaluate additional capital returns at the end of each financial year. Credit trends/asset quality: The NPL ratio increased slightly to 3.0% in 4Q14 due to the implementation of the EBA forbearance definition in 4Q14. On a l-f-l basis, NPLs were broadly stable compared to the previous quarter. Loan loss provisions were lower than anticipated at € 400m (CSS € 432m). Russia/oil and gas: The Russian exposures were actively managed down and Russian NPLs remained under control (at 3%). Oil and gas exposures have moreover not translated into a higher risk costs.

Bloomberg INGA NA Reuters ING.AS www.ing.com Market Cap € 42,429.9m Shares outst. 3,801.5m Volume (daily) € 211,939,093 Free float 99.1%

Next corporate event

Results 1Q15: 7 May 2015

(€ m) 2014E 2015E 2016E NBI 15,542 16,372 16,506 GOP 6,795 7,493 7,539 Net profit 1,052 4,799 4,637 Adj. EPS (€) 0.97 1.11 1.16 DPS (€) 0.00 0.44 0.52 P/E (x) 11.6 10.1 9.7 P/BV (x) 0.9 0.9 0.8 Dividend yield 0.0% 4.0% 4.6% Matthias De Wit, CFA +32 2 429 37 17 matthias.dewit@kbcsecurities.be

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IO&W Analyst meeting: positive trend confirmed REAL ESTATE INVESTMENT & SERVICES CURRENT PRICE € 25.30 ACCUMULATE BELGIUM TARGET PRICE € 26.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

IOW’s FY NRI remained stable y/y, but EPS dropped 8.2% due to higher (one-off) operating, but mainly financing charges. Looking ahead, the financing charges are expected to come down sharply as the expensive € 75m bond matures in June, paving the way for EPS & DPS growth in FY15. Portfolio rebalancing towards logistics: Most appealing is the portfolio rebalancing towards logistics. This segment accounted only for 42% of the portfolio at start-FY14, but evolved to 48% today. Management guides for a further shift to 60/40 in the near future. This could be accelerated through the divestment of some lower-performing offices. This shift becomes increasingly likely now that investor interest for tier 2 offices has grown. However, the offered prices today are not satisfactorily yet. On the other hand, sufficient acquisition files for logistics prevail, while growth can come from tailored expansion on existing land-banks too. The current debt ratio of 49% offers in our view sufficient flexibility. Strong performance in lease renewals: IOW performed strongly in FY14, by renewing 20% of the leases and by signing for 2% of new leases. Remarkable was thereby the accompanying increase in occupancy of the offices segment. We see less maturity risk in FY15 as only 6% of the leases expire. Additionally, it becomes clear that concepts like RE:flex and turn-key solutions start paying-off. Though, there P&L impact is still moderate. Renegotiated Deloitte contracts towards 31 December 2016: An agreement was made with Deloitte to end all contracts on 31 December 2016. This creates for IOW a clear cut off point, as of when new tenants can enter the building. Deloitte represents 8% of current rental income. We however see that the company’s growth is creating a certain cushion to limit this impact. After the departure, several opportunities exist for this ‘Breeam Very Good’ site. E.g. It can be rented to new tenants in the current state (market interest exists as NATO is located opposite), the asset can be sold in the market or redeveloped into a campus concept (American interest),… Portfolio quality maintenance: IOW has invested heavily over the past years to make its office buildings compliant with the new R22 regulation in use as of 2015. It thereby replaced several cooling/heating installations. Additionally, the company refurbished several rooftops of logistics buildings in portfolio. Model updates and TP increase: We left our NRI base unchanged, but added external portfolio growth of roughly € 20m to our estimates and an extension of the Deloitte contract to end-FY16. We apply a neutral indexation in FY15. The financing charges were tempered, taking into account the bond expiry. Hence, this results in a marginal increase in EPS from € 1.70 to € 1.71 in FY15 and from € 1.66 to € 1.70 in FY16. As a result, we attain a higher valuation range leaving us to up our TP from € 25 to € 26, Accumulate reiterated.

Bloomberg INTO BB Reuters PRIF.BR www.intervest.be Market Cap € 364.9m Shares outst. 14.4m Volume (daily) € 143,462 Free float 47.3%

Next corporate event

Results 1Q15: 5 May 2015

(€ m) 2014 2015E 2016E Current Result 23.1 28.0 28.0 Portf. Result -6.1 0.6 0.6 Net Profit 16.9 28.6 28.7 Adj. EPS (€) 1.56 1.71 1.70 NAV (€) 19.8 20.3 20.5 P/E (x) 14.1 14.8 14.9 DPS (€) 1.40 1.54 1.53 Dividend yield 6.4% 6.1% 6.0% Koen Overlaet-Michiels +32 2 429 37 21 koen.overlaet-michiels@kbcsecurities.be

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NN GROUP Strong Q4, Solvency II guidance reassures LIFE INSURANCE CURRENT PRICE € 23.84 BUY NETHERLANDS TARGET PRICE € 27.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

NN Group reported a strong set of 4Q14 results marked by better than expected operating earnings and capital generation. The H2 dividend moreover beats expectations and the SII guidance is reassuring. BUY reiterated. NN Group reported a Q4 operating result of € 260m, which is 9% ahead of our and CSS expectations. The beat is driven by better than anticipated Dutch life and holding segment results. Dutch Life results (€ 157m versus € 141m CSS) benefited from relatively high capital gains on private equity (€ 23m) which boosted the investment margin. Non-life results (€ 35m versus € 32m CSS) were marked by a significant improvement in the combined ratio to 99.4% from 103.6% in 4Q13. Insurance Europe was slightly short of expectations (€ 40m versus CSS € 48m) while the holding segment was ahead (€ -24 versus € -39m CSS). Solvency increased to an industry-leading level of 303%, while we and CSS were looking for 287% and 286%, respectively. The strong increase is driven by organic capital generation and positive market impacts. The latter mainly stem from lower interest rates, which boosted the bond revaluation reserves. The company moreover provided a reassuring update on Solvency II guiding for a SII ratio of around 200% (standard formula), which is significantly better than expected. The group will apply for a partial internal model which could provide a further boost to its SII ratio if approved by the regulator. Backed by its strong capital position, the group proposed a DPS of € 0.57 over the second half of the year. This corresponds to a pay-out of € 200m which is ahead of the € 175m guidance. The group states that it remains committed to distributing excess capital in a form which is most appropriate and efficient for shareholders at that specific point in time…. which may include a repurchase of part of ING Group's shareholding in NN Group. We expect the group to announce such a repurchase (of part of ING Group’s shareholding) in the course of H1, when we expect ING to divest another stake in NN.

Bloomberg NN NA Reuters NNBR.O www.nn-group.com Market Cap € 8,342.3m Shares outst. 350.0m Volume (daily) € Free float 28.6%

Next corporate event

(€ m) 2014E 2015E 2016E Premiums 9,468 9,658 9,851 GOP 1,064 1,132 1,203 Net profit 563 903 941 Adj. EPS (€) 2.27 2.43 2.58 EV per share 30.9 32.9 34.9 DPS (€) 0.50 1.09 1.29 P/E (x) 14.8 9.2 8.9 Dividend yield 2.1% 4.6% 5.4% Matthias De Wit, CFA +32 2 429 37 17 matthias.dewit@kbcsecurities.be

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WDP Good FY14 results and outstanding outlook REAL ESTATE INVESTMENT TRUSTS CURRENT PRICE € 68.72 BUY BELGIUM TARGET PRICE € 80.00 RATING UNCHANGED

Source: Thomson Reuters Datastream

FY14 results beat estimates: • 2014: net current result per share increased by 6.4% to € 4.10 and

confirmation of dividend increase by 5% to € 3.40 gross per share. • 2015: expected increase in net current result per share by 7% to at least

€ 4.40 and dividend increase by 6% to € 3.60, which means the target for 2016 becomes achievable one year earlier.

• 2016: the above results in an upgrade of the ambition of the 2013-16 growth plan by almost 10% to a net current result per share of € 4.70 to 5.00, previously € 4.40 to 4.60.

In 2014, NRI rose 13.1% y/y from € 82.6m to € 93.4m (€ 94.9m KBCSe). This increase results from the continued growth of the portfolio in 2013 to 2014, in Belgium and the Netherlands, by means of acquisitions and the completion of pre-leased projects. L-f-l rental growth remained stable y/y at 0.0%. The operating result before result on portfolio increased 14.3% y/y from € 81.8m to € 93.5m (€ 94.0m), corresponding to an operating margin of 91.8%. The financial result (excl.IAS39) evolved from -€ 21.4m to -€ 25.4m (-€ 26.0m), following higher debt and a slightly reduced cost of debt. Hence, the net current result per share rose 6.4% y/y from € 3.85 to € 4.10 (€ 4.08). The portfolio is positively revalued by € 20m of which € 18m is, as expected, attributable to the Netherlands (yield compression). Strong portfolio fundamentals confirmed: The € 1.6bn portfolio’s occupancy stood at 97.6% (97.4% FY13), the average lease maturity at 7.1 years (7.3) and the net yield at 7.3% (7.5%). Balance sheet metrics remain sound: WDP typically applies a debt ratio between 55-60%. At end-FY14, the debt ratio amounted to 55.8% (54.6 % in FY13), but good ICR of 3.3x (3.6x), average cost of debt dropped to 3.5% (3.6%) and average debt maturity rose to 4.1years (3.4y). The NAV (EPRA) rose from € 35.9 to € 39.2 per share. Outlook: • WDP guides for 7% growth in net current result per share in FY15. • The c. € 275m investments realised in 2014 will fully contribute to the

FY15 result. In addition, various purchases realised or planned in 15. • WDP assumes the average cost of debt to evolve towards 3%. • 70% of 11% contracts maturing in FY15 have already been extended • WDP assumes a minimum average occupancy rate of 96% for 2015. Our view & Conclusion: WDP’s FY14 results beat the guidance as well as our higher estimates. Additionally, we see the portfolio and balance sheet quality confirmed. The upped growth target exceeds expectations. Current investment volume stands already at € 525m (€ 600m initial target by FY16, upped to € 800m). We believe these results confirm our positive stance on the co. We reiterate our BUY rating and up our TP from € 74 to € 80.

Bloomberg WDP BB Reuters WDPP.BR www.wdp.be Market Cap € 1,198.4m Shares outst. 17.4m Volume (daily) € 851,626 Free float 73.4%

Next corporate event

(€ m) 2014 2015E 2016E Current Result 67.3 79.9 88.7 Portf. Result 0.8 29.2 25.8 Net Profit 68.1 109.1 114.5 Adj. EPS (€) 4.10 4.42 4.72 NAV (€) 39.2 42.7 46.9 P/E (x) 13.6 15.6 14.6 DPS (€) 3.40 3.60 3.80 Dividend yield 6.1% 5.2% 5.5% Koen Overlaet-Michiels +32 2 429 37 21 koen.overlaet-michiels@kbcsecurities.be

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CONTACT DETAILS

ANALYST TEAM Analyst Contact Coverage

Wouter Vanderhaeghen (Head of Research) +32 2 429 37 30 Shipping & Industrials Jan De Kerpel +32 2 429 84 67 Biotech & Pharma Ruben Devos +32 2 429 58 43 Telco & Media Matthias De Wit +32 2 429 37 17 Financials Yves Franco +32 2 429 45 04 Holdings & Staffing Dieter Furniere +32 2 429 18 96 Engineering, Transport & Utilities Wim Hoste +32 2 429 37 13 Chemicals & Breweries Guy Sips +32 2 429 30 02 Small & Midcaps Benelux Koen Overlaet-Michiels +32 2 429 37 21 Real Estate Alan Vandenberghe +32 2 429 18 06 Food Retail & Credit Research Dirk Verbiesen +32 2 429 39 41 Oil Services & Construction EQUITY SALES TEAM Sales Contact

Sebastien Fuki (Head of Sales) +32 2 417 53 43 Stefaan De Lathouwer +32 2 417 44 68 Xavier Gossaert +32 2 417 53 68 Margo Joris +32 2 417 25 66 Kris Kippers +32 2 417 28 08 Augustin Lanne +32 2 417 51 45 Tim Leemans +32 2 417 32 28 Marco Miserez +32 2 417 36 81 Sales (US) Hubert Dubrule (Head of US Sales) +1 212 845 22 74 Sebastiaan Pol +1 212 845 20 52 Sofie Van Gijsel +1 212 541 06 48 Sales Trading Isabel Sebreghts +32 2 417 63 63 Tim Leemans +32 2 417 32 28 Marco Miserez +32 2 417 36 81 Loïc De Smet +32 2 417 36 99 BOND SALES TEAM Sales Contact

Alexander Lehmann (Head of Sales) +32 2 417 46 25 Maurizio Bartolo +32 2 417 48 02 Bert Beckx +32 2 417 31 57 Toon Boyen +32 2 417 25 65 Valentin Checa +32 2 417 25 40 Alban Kerdranvat +32 2 417 25 45 Bart Mathijssen +32 2 417 57 12 Koen Princen +32 2 417 44 65

MORNING NOTE

11 February 2015

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