Consumer - Accenture...Key Takeaways & Implications The modern consumer is really a “prosumer”...

INDUSTRY NOTE

USA | Consumer

September 26, 2018

ConsumerInaugural Consumer of the FutureConference Highlights

EQU

ITY R

ESEARC

H A

MERIC

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Jefferies Equity Research *Equity Analyst

(888) JEFFERIES [email protected] Wissink *

Equity Analyst(212) 284-1713 [email protected]

Janine Stichter *Equity Analyst

(212) 336-6651 [email protected] Barish *


Randal J. Konik *Equity Analyst

(212) 708-2719 [email protected] Slagle, CFA *


Kevin Grundy, CPA *Equity Analyst

(212) 336-7091 [email protected] Jagdale *


Christopher Mandeville, CFA *Equity Analyst

(646) 805-5407 [email protected]

* Jefferies LLC / Jefferies Research Services, LLC

^Prior trading day's closing price unlessotherwise noted.

Key TakeawayWe are hosting the inaugural Consumer of the Future Conference in NYC todayin partnership with Accenture & Barkley. Through discussions with subjectmatter experts, executives and brand managers, we seek to better understandmodern consumer mindsets, what influences purchase decisions, and howcompanies can create future brand value & sustainable growth. Included hereinis our conference presentation, with preliminary findings from our proprietarysurvey work.

Consumer of the Future Conference. We are hosting our inaugural conferencetoday at the Parker in NYC in partnership with Accenture and Barkley. Events includepresentations and panels with subject matter experts, executives, and brand managers, aswell as preliminary results from our consumer survey work. Selected slides from our hostpresentation are appended here. Public company participants include APRN, BBW, COTY,HAS, and TACO.

The “prosumer” demands modern brands. In our survey work, we investigatedmodern brand “mindsets,” or the cross-generation collection of behaviors and attitudesthat a brand can leverage to drive value, as well as “impact levers,” which we defined asthe sub-system of product, experience, communications, design and workforce activitiesthat connect a brand's business and marketing ideas with its consumers and stakeholders.We came away confident that today's consumers view brands as a collection of ideasthat embody a mindset(s) and activate across brand impact levers, albeit not all equally.Companies must shift away from the Golden Rule of "Treat others as you want to be treated,"and move toward the new Platinum Rule, "Treat others as they want to be treated."

Success = Agile brands with authentic purpose for the not-so-typical consumer.Consumers value authentic brand purpose built through a virtuous cycle of Trust, Purposeand Loyalty. It is important for companies to remember that brand impact levers should varyby demography, category, mindset, and brand lifecycle; there's no "one size fits all" whenit comes to connecting with consumers.

Where’s the money? Our consumer survey of over 2,800 respondents highlighted severalkey themes; most prominent was the confirmation that accessibility is paramount across allcategories and brands. It is also important for companies to clearly and consistently conveytheir brand value, and utilize personalized engagement to build emotional connections.For more discretionary categories like personal care and beauty, apparel, and fast foodrestaurants, this means investing in experience and communications levers. For householdstaples, cleaning products, and packaged food, companies should focus on product leverslike form and design to help tell brand stories that resonate with consumers.

What's next? We will continue to analyze survey results, share our findings, and hostunique events exploring the evolution of consumer brand engagement. Please contact yourJefferies salesperson for more information.

Please see analyst certifications, important disclosure information, and information regarding the status of non-US analysts on pages 59 to 62 of this report.

September 26, 2018

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September 26, 2018

page 2 of 62 , Equity Analyst, (888) JEFFERIES, [email protected] Equity Research

Please see important disclosure information on pages 59 - 62 of this report.

Key Takeaways & ImplicationsThe modern consumer is really a “prosumer” of the future, processing information from multiple sources

• There are similarities among generations, but the differences may surprise you

• Modern brands are a collection of business and marketing ideas activated across brand impact levers of workforce, product, experience, design and communications

Success = Agile brands with authentic purpose for the not-so-typical consumer• Build authentic brand purpose through a virtuous cycle of Trust, Purpose and Loyalty• There is no typical consumer; brand levers should vary by demography, category, mindset, and brand lifecycle• Be Agile, Eliminate Boundaries: meet the consumer where they are via internal flexibility and external ecosystems

Where’s the money? No silver bullet! • Accessibility is a table stake: drive engagement across all platforms• Clearly & consistently communicate how you align with consumers• Create emotional connections through personalized engagement

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Why We Are HereThree organizations with one collective purpose

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Better understand modern consumers, how they view brands and how companies can be

successful in driving future brand value.

Why We Are Here

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COTF Survey –Total US

• National quant survey fielded summer 2018• 2,851 total consumer responses – approximately 500 to 600 per category• Category & brand usage, purchase drivers and brand perception across

apparel, packaged food, household products, personal care & beauty, QSR/fast casual

• Revenue and sales data analysis of brands across categories covered in the national quant survey

Financial Data Analysis

What We Did

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Our Roles

Modern consumer trends and insights

Overall Industry Perspectives

Market Analysis & Overall Program Sponsor

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Previous Collaborations

• Brands Still Matter

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• Brands Still Matter... But not all brands

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• Brands Still Matter... But not all brands

• Focus of today will be to unpack what brands can do to not just survive, but thrive in tomorrow’s marketplace

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The Changing ConsumerDistracted & Addicted

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Prosumer of the Future...it’s less about consuming and more about

processing information from multiple sources

©FutureCast, LLC. Confidential and proprietary – no reproduction without permission.

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Prosumer of the Future

Brands need to do less storytelling and more storyliving

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Meet Gen ZOld souls in young bodies


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There are similarities among generations, but the differences may surprise you.

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MillennialsVery collaborative; everyone

works together to advance goals


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Gen ZVery competitive; believe you

have to work hard to be the best


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MillennialsNotorious for oversharing

on social media

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Gen ZValue privacy and more

careful on what they share


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MillennialsMade the environment their cause

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Gen ZCare about the environment, but the most

important issue of the day is equality

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Attention span of Millennials


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Gen ZAn 8 second attention span; some

compare it to a goldfish, but they will pay attention for longer periods if you have

something interesting to say


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MillennialsWilling to take a risk

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Gen ZRisk Averse


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Brands that embrace this modern consumer will be more likely to create an emotional connection and drive brand love, which

equates to higher brand value.

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BRANDVALUE


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Social Circle1 SelfEmotional Connection2 Innovative

Reinventing3

TrustedPuts Consumer Needs First4 Purpose

Adding Good5 AccessibleSimplifies My Life6

Conversational & Participative

Modern Mindsets That Drive Brand Value


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Boutique Niche Mass

Purpose

Quality

Value

Accessibility

Hyper-convenient

Revenue

Innovation

Users


TRUSTTrust, revenue and users grow as brands deliver on

an increasing set of important attributes.

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A collection of past, present and future business and marketing ideas activated

across key brand impact levers

Modern Brand Definition


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Modern Brand Impact Levers

PRODUCT

What the brand takes to market and sells.

WORKFORCE

The internal culture that defines the brand from the inside out.

EXPERIENCE

Customers’ direct experience with a brand.

DESIGN

The manifestations of a brand that make it top of mind.

COMMUNICATIONS

The symbols and narratives that tell a brand’s story.

Business Ideas

MarketingIdeas

BRAND


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Authentic Brand PurposeHow to build trust with the Consumer of the Future

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Brands still matter… but not all brands

Source: Brands Still Matter (2018)

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HOW DID THESE SMALL BRANDS WIN?

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TRUST PURPOSE LOYALTY

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Trust is important

Source: Accenture/ Barkley/ Jefferies 2018 Consumer of the Future Study

*After removing the impact of “baseline” factors (Size/Flavor/ Format, Good Value, High Quality, Reliable/ Consistent). This “average” score is indexed against the TURF as if all attributes had equal reach (i.e., 3.1%). Thus, a score of “2” means the attribute reaches 2x as many consumers (or 6.2%)

Keeps personal info/ data safe 7.4x

Rewards me for my loyalty 6.5x

I am able to purchase the product/service through multiple channels 3.9x

Provides a product/service that is sustainable/ethical 2.9x

Regularly launches new product variants 1.9x

Relative to Avg Reach*

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Trust is multi-faceted

Source: Accenture/ Barkley/ Jefferies 2018 Consumer of the Future Study.Regression analysis of brand impact levers that drive “Trust”.

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“MILLENNIALSARE NOT PROMISCUOUS;THEY ARE POLYGAMOUS”– Mitch Barns, CEO of Nielsen

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Keeps personal information and data safe 7.4x

Rewards me for my loyalty 6.5x

I am able to purchase the product/service through multiple channels

3.9x

Provides a product/service that is sustainable/ethical 2.9x

Regularly launches new product variants 1.9x

The Loyalty Opportunity


*After removing the impact of “baseline” factors (Size/Flavor/ Format, Good Value, High Quality, Reliable/ Consistent). This “average” score is indexed against the TURF as if all attributes had equal reach (i.e., 3.1%). Thus, a score of “2” means the attribute reaches 2x as many consumers (or 6.2%)

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“How to” guides and surveys

Personalizedrecommendations and

subscription boxesRewards for friends who subscribe

Become a “Maven”

Submit ideas to Idea Lab

Crowdfund new products

Input on new pilot products

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The New Brand PlaybookBuilding Authentic Brands

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The Typical Consumer

The most important brand impact levers are Product/ Service Design andBrand Experience

Keeps personal information safe & rewards me for loyalty are most critical for Brand Experience

Value for money and high quality are most critical forProduct/Service Design

Least important are “engages me through social media” and “sponsors events I like”


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Brand Impact Levers: Gender Distinctions

“Regularly improves the format, packaging

or physical design”

“Rewards me for my loyalty”

1.1x“Personalizes

interactions to me to fit my needs

1.1x“Introduces me to

completely new products/ services I

didn’t know I wanted”

Source: Accenture/ Barkley/ Jefferies 2018 Consumer of the Future Study. Figures indicates relative Max Diff, e.g., a score of 1.2x means the male individual finds this factor 1.2x more important than his female counterpart

1.2x 1.2x

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Brand Impact Levers: Zooming In on Age

“Offers products/ services that are

reliable or consistent”

“Has products/services in the size /format that

fit my needs”

“Receives positive reviews on digital

platforms

“Talks about, advocates for and supports issues

I care about”

1.3x

Source: Accenture/ Barkley/ Jefferies 2018 Consumer of the Future Study. Figures indicates relative Max Diff, e.g., a score of 1.2x means the woman on the left finds this factor 1.2x more important than her counterpart

1.2x

1.3x1.2x

s

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Relevant Levers Vary by CategorySustainability, Ethics

1.1x

PersonalizedInteractions

1.2xs

KnowledgeableWorkforce

1.3x

Source: Accenture/ Barkley/ Jefferies 2018 Consumer of the Future Study. Figures indicates relative Max Diff, e.g., a score of 1.2x means the woman finds this factor 1.2x more important for that category than all others.

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addisonmakes3 I have met someone! #halotop #halopeanutbutterandjelly

*Guilt-free indulgence*

Social grew 400% from 2016-2017

Dominant UGC

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New leadership titlesDifferent mindset• Designated Dreamer & Visionary• Designated Cheerleader• Product Magician

Products and service designGood for the planet• Partner with external social innovators• Sustainable sourcing and packaging• Fast rinse technology

Communications The excitement of discovery• No TV ads; digital communities• Store placement and merchandising

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Operating Model Agility

“Evergreen” Insight &

Brand Portfolio Strategy

Brand Activation: Bringing

Brands To Life

Targeted, Agile and Without Boundaries

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Show Me the MoneyIdentifying the Investments that Matter

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Personal Care & Beauty Apparel Household Products Packaged Food

Fast Food Restaurants

Accessible 482 502 488 483 505

Trusted 354 341 369 372 389

Self 342 367 330 347 284

Innovative 277 246 262 248 262

Purposeful 235 231 261 252 250

Social Circle 110 113 91 98 109

Mindsets generally align across categories Total mindset importance by category

Note: Reflects sum of the maxdiff scores across all descriptive statements per mindset

Consumers crave personalized engagement across multiple channels with brands they trust


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Personal Care Apparel Household Products Packaged Food Fast Food RestaurantsBrand

ABrand

BBrand

CAlt

BrandsBrand

ABrand

BBrand

CAlt

BrandsBrand

ABrand

BBrand

CAlt

BrandsBrand

ABrand

BBrand

CAlt

BrandsBrand

ABrand

BBrand

CAlt

Brands

Accessible 0.13 -0.09 -0.07 0.03 0.05 -0.07 -0.13 0.15 -0.10 -0.06 0.04 0.11 -0.09 -0.03 -0.09 0.21 0.02 -0.16 -0.06 0.20

Trusted 0.13 -0.12 -0.02 0.01 0.05 -0.07 -0.09 0.10 -0.15 -0.10 0.20 0.05 -0.04 -0.03 -0.12 0.19 0.09 -0.34 0.03 0.22

Self 0.11 -0.21 -0.02 0.12 0.14 -0.18 -0.20 0.24 -0.18 -0.16 0.24 0.10 -0.17 0.09 -0.09 0.17 0.07 -0.41 -0.13 0.47

Innovative 0.05 -0.01 -0.01 -0.03 0.23 -0.29 0.00 0.06 -0.01 -0.14 0.08 0.07 -0.02 0.04 -0.12 0.10 0.15 -0.28 -0.03 0.15

Purposeful 0.12 -0.15 0.00 0.02 0.12 -0.08 -0.18 0.14 -0.17 -0.22 0.39 -0.01 -0.09 0.00 -0.10 0.19 0.23 -0.36 -0.06 0.20

Social Circle -0.08 -0.23 0.20 0.11 0.07 -0.22 -0.01 0.16 -0.14 -0.24 0.16 0.21 -0.04 -0.07 -0.11 0.22 0.25 -0.39 -0.06 0.20

Not all brands embody these mindsetsBrand performance score vs. category average

Brand A may not be “hot,” but resonates

Consumers want to talk about Brand C, Alternate Brands

Consumers appreciate Brand A’s innovation, its purpose, and its ability to

help them lead better lives

Brands B & C have opportunity to innovate, and better communicate

their “why”

Legacy Brands A & B have opportunity to better communicate their value

propositions

Brand C’s purpose-driven mission resonates and

supports consumer trust

Opportunity for all three brands to improve accessibility

Alternative Brands perceived as more easily available, as well

as brands consumers feel more aligned with / want to talk about

Purpose / mission resonate; consumers take pride in their use of Brand

A and want to share

Brands B & C have opportunity to improve in key area of accessibility

Note: Note: Brand score vs. the multi-brand category average, by mindset


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Categories differ on impact leversOutperformance to the multi-category average

• Consumers want to engage in an active brand dialogue across multiple channels, and place trust in their friends, influencers & social media

• Desire for compelling connections between online and offline• Balance innovation with personalization • Consumers connect with an engaged workforce

• Product matters most when buying “staples” • Consumers ascribe value to consistent, quality

products from purposeful brands• Style, design, format can tell brand stories and

resonate with consumers

COMMUNICATIONS & EXPERIENCE PRODUCT

Note: Percentage of levers that overindex the multi-category average, by mindset mix


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Personal Care & BeautyImpact levers vs. brand sales growthEngagement is key

• Consumers want brands to engage with them through social media; creating an emotional connection between the brand and consumer

Rewarded for loyalty • Consumers desire recognition for their brand loyalty

Brands with passionate employees • Beauty is an emotional purchase for a consumer, as

it is intended to make one feel their best. Consumers want the people behind the brand to feel as passionate as they do

Note: Includes correlations > 90% to trailing 3.5 year sales growth


Receives positive reviews on digital platforms (Yelp, Google, Amazon, Facebook, Instagram, etc.)

Customer service makes me feel special

Regularly Improves the format, packaging or physical design (or product or store)

Engages with me through email or text

Introduces me to completely new products/services I didn't know I wanted

Has friendly employees

Is affiliated with and connects me to an interesting physical or virtual community

Has knowledgeable employees

Has passionate employees

Keeps personal information and data safe

Engages with me through social media (Instagram, Twitter, Facebook)

Rewards me for my loyalty (gives me recognition, special gifts, discounts or other benefits)

Most Strongly Correlated Statements to T3YR Personal Care & Beauty Sales

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ApparelImpact levers vs. brand sales growthValue is paramount

• Consumers want balance of brand purpose, quality and variety of offerings, brand availability

Consumers care about emotional connections • Purpose, sustainability, transparency strongly

correlated to sales growth

Innovation is important, but brand communication across multiple channels even more so

• Tying the package together, this should all be supported by advertising that clearly communicates with the consumer and articulates the brand DNA



Offers products/services that are good value for my money

Provides a product/servicethat is sustainable / ethical

Talks about and is transparent in how it does business

Talks about, advocates for and supports issues I care about

Has advertising that is entertaining

I hear positive things about them in the news

Sponsors or is affiliated with events I like (concerts, festivals, sports, etc.)Expands outside of core offerings to new products/services outside of traditional industryHas product/service available in the size/flavor/format, etc. that fit my needsIs recommended by an influencer I admire or trust (celebrity, social media star, etc.)I am able to purchase the product/service through multiple channels (in-store, online, voice recognition, through my phone)

Offers products/servicesthat are reliable or consistent

Most Strongly Correlated Statements to T3YR Apparel Sales

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Fast Food RestaurantsImpact levers vs. brand sales growthOmni-channel is here to stay

• Consumers want to engage across multiple platforms (off premise, digital/mobile)

• New source of growth to offset multiple years of industry traffic declines

Loyalty means personalized engagement• Shift away from traditional, frequency-based programs

to 1:1 marketing & data-driven CRM

Take care of your team and they will take care of your guests• Employees are brand ambassadors who can reinforce

emotional connections to brand



I am able to purchase product/service through multiple channels (in-store, online, voice recognition, through my phone)

Has a store, website, mobile app, etc. that is easy to navigate and shop

Rewards me for my loyalty (gives me recognition, special gifts, discounts or other benefits)

Provides the ability to personalize the product/service to fit me and my needs

Has advertising I’ve seen/heard in the past month

Receives positive reviews on digital platforms (Yelp, Google, Amazon, Facebook, Instagram, etc.)Personalizes interactions to me to fit my needs (emails, coupons, social media posts, in person service)

Offers products/servicesthat are high quality

Has passionate employees

I hear positive things about them in the news

Keeps personal information and data safe

Has friendly employees

Most Strongly Correlated Statements to QSR Same Store Sales

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Key Takeaways & Implications• Modern consumers view brands as a collection of business and marketing ideas that

embody a mindset(s) and activate across brand impact levers, albeit not all equally

• There’s no typical consumer: brand levers vary by demo, category and brand lifecycle

• Success = Flexibly embodying authentic brand purpose

• Where’s the money?• Accessibility across all categories and brands

• Focus on experience and communications levers for more discretionary categories

• Focus on product levers for household staples, cleaning products and packaged food


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THANK YOU

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Brands SurveyedPersonal Care &

Beauty ApparelHousehold Products Packaged Food

Fast FoodRestaurants

Brand AHair, skin, and deodorant

brand with mass distribution

Sportswear brand with global third-party

distribution and limited retail

Household cleaning brand, known best for

laundry

National cookies & cracker brand Global coffee brand

Brand BWidely distributed mass

cosmetics brand undergoing relaunch

National value retailer Household cleaning brand

National breakfast cerealbrand Global burger brand

Brand CInnovative make-up

disruptor; positioned as substitute for prestige

National specialty retailer

Household cleaning brand with sustainability

mission

National dry dinners, cheese, spreads, dressing brand

Global pizza delivery brand

Alternative Brands

Mix of mass/prestige, indie & legacy brands

Mass retailers with third-party distribution and/or

retail / e-commerce

Nationally distributed cleaning supply brands

Mix of nationally distributed refrigerated, dry goods, and frozenfood brands across all

dining occasions

Mix of large national chains and a few small

regional brands

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Analyst Certification:I, Jefferies Equity Research, certify that all of the views expressed in this research report accurately reflect my personal views about the subjectsecurity(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specificrecommendations or views expressed in this research report.I, Stephanie Wissink, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Janine Stichter, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Andy Barish, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Randal J. Konik, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Alexander Slagle, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subjectsecurity(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specificrecommendations or views expressed in this research report.I, Kevin Grundy, CPA, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Akshay Jagdale, certify that all of the views expressed in this research report accurately reflect my personal views about the subject security(ies) andsubject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendationsor views expressed in this research report.I, Christopher Mandeville, CFA, certify that all of the views expressed in this research report accurately reflect my personal views about the subjectsecurity(ies) and subject company(ies). I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specificrecommendations or views expressed in this research report.As is the case with all Jefferies employees, the analyst(s) responsible for the coverage of the financial instruments discussed in this report receivescompensation based in part on the overall performance of the firm, including investment banking income. We seek to update our research asappropriate, but various regulations may prevent us from doing so. Aside from certain industry reports published on a periodic basis, the large majorityof reports are published at irregular intervals as appropriate in the analyst's judgement.

Investment Recommendation Record(Article 3(1)e and Article 7 of MAR)

Recommendation Published September 26, 2018 , 07:59 ET.Recommendation Distributed September 26, 2018 , 09:00 ET.

Explanation of Jefferies RatingsBuy - Describes securities that we expect to provide a total return (price appreciation plus yield) of 15% or more within a 12-month period.Hold - Describes securities that we expect to provide a total return (price appreciation plus yield) of plus 15% or minus 10% within a 12-month period.Underperform - Describes securities that we expect to provide a total return (price appreciation plus yield) of minus 10% or less within a 12-monthperiod.The expected total return (price appreciation plus yield) for Buy rated securities with an average security price consistently below $10 is 20% or morewithin a 12-month period as these companies are typically more volatile than the overall stock market. For Hold rated securities with an averagesecurity price consistently below $10, the expected total return (price appreciation plus yield) is plus or minus 20% within a 12-month period. ForUnderperform rated securities with an average security price consistently below $10, the expected total return (price appreciation plus yield) is minus20% or less within a 12-month period.NR - The investment rating and price target have been temporarily suspended. Such suspensions are in compliance with applicable regulations and/or Jefferies policies.CS - Coverage Suspended. Jefferies has suspended coverage of this company.NC - Not covered. Jefferies does not cover this company.Restricted - Describes issuers where, in conjunction with Jefferies engagement in certain transactions, company policy or applicable securitiesregulations prohibit certain types of communications, including investment recommendations.Monitor - Describes securities whose company fundamentals and financials are being monitored, and for which no financial projections or opinionson the investment merits of the company are provided.

Valuation MethodologyJefferies' methodology for assigning ratings may include the following: market capitalization, maturity, growth/value, volatility and expected totalreturn over the next 12 months. The price targets are based on several methodologies, which may include, but are not restricted to, analyses of market

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risk, growth rate, revenue stream, discounted cash flow (DCF), EBITDA, EPS, cash flow (CF), free cash flow (FCF), EV/EBITDA, P/E, PE/growth, P/CF,P/FCF, premium (discount)/average group EV/EBITDA, premium (discount)/average group P/E, sum of the parts, net asset value, dividend returns,and return on equity (ROE) over the next 12 months.

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Risks which may impede the achievement of our Price TargetThis report was prepared for general circulation and does not provide investment recommendations specific to individual investors. As such, thefinancial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions basedupon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Past performance ofthe financial instruments recommended in this report should not be taken as an indication or guarantee of future results. The price, value of, andincome from, any of the financial instruments mentioned in this report can rise as well as fall and may be affected by changes in economic, financialand political factors. If a financial instrument is denominated in a currency other than the investor's home currency, a change in exchange rates mayadversely affect the price of, value of, or income derived from the financial instrument described in this report. In addition, investors in securities suchas ADRs, whose values are affected by the currency of the underlying security, effectively assume currency risk.

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Distribution of RatingsIB Serv./Past 12 Mos. JIL Mkt Serv./Past 12

Mos.Rating Count Percent Count Percent Count Percent

BUY 1137 54.43% 87 7.65% 15 1.32%HOLD 832 39.83% 16 1.92% 1 0.12%UNDERPERFORM 120 5.74% 0 0.00% 0 0.00%

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Other Important DisclosuresJefferies does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that Jefferies may have aconflict of interest that could affect the objectivity of this report. 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Recipients of this document in any other jurisdictions should inform themselves about and observe anyapplicable legal requirements in relation to the receipt of this document.This report is not an offer or solicitation of an offer to buy or sell any security or derivative instrument, or to make any investment. Any opinion orestimate constitutes the preparer's best judgment as of the date of preparation, and is subject to change without notice. Jefferies assumes no obligationto maintain or update this report based on subsequent information and events. Jefferies, and their respective officers, directors, and employees, mayhave long or short positions in, or may buy or sell any of the securities, derivative instruments or other investments mentioned or described herein,either as agent or as principal for their own account. This material is provided solely for informational purposes and is not tailored to any recipient,

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