Department of Accounting

Universita Bocconi

DRIVERS OF INDUSTRY FINANCIAL STRUCTURE

Antonio Marra
Emilia Merlotti
Angela Pettinicchio

Attached materials:
All relevant materials linked

Academic year 2015/16

A few days had passed since Steve began working in the B.U.P. Equity fund but, despite the
(very) hard work pace to which he had to become accustomed he was beginning to appreciate the
colleagues with whom he shared the office, the work environment, the tasks he was set and even
the revolting coffee dispensed by the machines placed at the entrance of each floor of the building.
Certainly the appreciation shown by Mr. Johnson for the solution Steve presented to the
valuation problem of the first day had been useful in increasing his self-esteem and he was
beginning to think that he would be able to make the grade!
Thanks in fact to the useful advice received from Sarah, Steve had managed - in the one hour
conceded to him, to analyze Euroflys main financial documents and to isolate the most important
information so as to come up with a company profile able to orientate the investment decision.
Steves brilliant ideas had helped him to gain the confidence of his boss
Back from a coffee break with his colleagues, while he was still thinking about the compliments he
had received, Mr Jonhson called Steve to his office.
My dear Steve, began the boss, in view of the excellent job you did on the Euroflys financial
statement, I have decided to put you to the test again!
Having said this, Mr. Johnson picked up a heavy sheaf of documents and passed them to Steve.
Steve gave a quick look at this material and realized that it was a series of reports, each of which
referred to a different listed company.
Mr. Johnson continued as you can see, here you have financials reports regarding eleven
companies operating in as many different industries as primarily one major business segment.
Some of them have headquarters in an European country (Italy, Norway, United Kingdom) some
others in the United States.
In particular, please make sure you learn as much as you can with regard to these companies
finding for each one:
- an overall view of each company, with a summary of its history and a brief business description;
- common -size financial statements (the latest annual financials statement ending in 2007/2008) ;
- a synthetic selection of financial ratios.
What I want you to do is to have a look to the material so that we can consider together the
investment opportunities that these industries may offer. If you agree, I would say we could meet
here in my office early tomorrow morning.
Obviously he could not contradict his boss, but he did manage to fix the appointment for the early
afternoon- So he hurried out of the office and went back to his desk.
Unfortunately (probably due to the anxiety he was starting to feel because he had so little time
again) he did not notice a chair in front of his pc and he bumped against it. The result was
disastrous! All the folders containing the material pertaining to each company fell on the floor
creating an indistinct carpet of paper! What a terrible mess!

Steve noticed that on each sheet there was no name of the company under reference, but only a
progressive number. At this point the only thing he could think was how can I identify the correct
report for each company?!
Once again he remembered Bocconis course.
He recalled (if only he had paid more attention) that according to the industry it is possible to
identify certain significant and peculiar items.

He knew that these elements werent enough to solve his problem but it was a starting
point.
This motivated him to find a solution to the chaos he had created. He therefore decided to
make an attempt by following a logical procedure.
First of all he started to put the folders with the names of the companies in order:
A2A
BJ's Wholesale Club Inc
EasyJet
eBay Inc
Gruppo COIN SpA
Intercontinental Hotels
Microsoft Corporation
Nokja Oyi
Permasteeelisa SpA
Recordati SpA
Tesco Plc
Then he picked up the sheets N. 1.
As Mr. Jonson had told him they gave a summary of the companys history and a brief
description of the activity carried out.
Thanks to them Steve started to understand the industry to which the companies belong.
See the Appendix 1 for the companies overview.

Finally, the last but most difficult bit

Considering that, in practice, it was not possible to match up so much data in so many
papers, Steve decided to summarize it in one single table. Then he could more or less
identify the industries to which these values belonged., and so the names of the
companies.

Based on the table given on the following page and using, more than your accounting
competence, your logic, try to help Steve in his difficult task.

APPENDIX 1

Page 1: OVERVIEW

HISTORY
AEM, now A2A, was established in 1910 as Azienda Elettrica Municipale.
From the 1920s to 1940s, the company grew and consolidated through the interwar years, with new plants
being constructed to accompany the existing plants in Valtellina.
In 1950s, the company made heavy investment, with a focus on the construction of h ydroelectric plants.
This eventually brought about a doubling in production capacity by 1963.
Enlargement of the company's existing plants was completed in the 1970s.
The company expanded its operations to become a multi-utility company in 1976 with the management of
the traffic light and public lighting systems of Milan.
In 1981, the company began the distribution and sale of gas following the acquisition by Milan City Council
of the city's gas network. AEM was known as Azienda Elettrica Municipale until 1996 when the company was
recognized as a joint stock company called AEM. The newly named company was listed on the Italian Stock
Exchange in 1998. In the following year, the company reorganized its operations, adopting the identity of a
group separated into companies operating by sector.
In 2001, the company formed a nu mber of strategic alliances with industrial and financial partners, out of
which emerged new companies such as Electrone, Italpower, and Plurigas. In the same year, the company
also entered the telecommunications market by establishing a network of fiber-optic cables throughout
Milan. During 2002, AEM acquired Eurogen as a joint venture with other industry operators; and Air Liquide
Italia to develop a number of projects linked to the production, distribution and use of hydrogen.
The company sold its 30.8% stake in FastWeb, the Italian leader in the broadband telecommunications
market in the cities in which it created its own fiber-optic infrastructure, to e.Biscom in 2003.
AEM Calore e Servizi, an AEM's company sold its branch of heating and facility management services with
clients outside the city of Milan to Cofathec Servizi, a Gaz de France Group's company in 2005. In the same
year, the group acquired a 30% stake in Ecodeco, the industrial holding company for the Ecodeco Group
that operated in Italy, the UK and Spain in waste treatment and disposal, as well as waste to energy (WTE).
Also in the same year, Transalpina di Energia, a company half-owned by AEM, acquired control of Edison.
The group sold Metroweb to Burano, an Italian registered company indirectly controlled by Stirling Square
Capital Partners which held 76.47%, with the remaining 23.53% share held by AEM (with an investment of
E8 million ) in October 2006.
AEM, Terna and RTL divested 99.99% of the share capital in AEM Trasmissione to RTL and the remainder,
0.01%, to Metropolitana Milanese in November 2006.
In May 20 07, as p art of its strategy to consolidate the company's environmental services and alternative
energy generation business, the group announced to acquire 70% of Ecodeco, of which AEM already owned
30%. The merger of AMSA into AEM was approved with a share swap ratio of 1.6x (every ASM shareholder
received eight AEM shares in return for five ASM shares) in June 2007. AMSA was wholly owned by the
Municipality of Milan to manage environmental services (waste cleaning, collection and disposal) in the city
of Milan and some of the surrounding municipalities. Through its subsidiaries the company managed some
service to the private sector and municipalities near Milan.

BRIEF BUSINESS DESCRIPTION

A2A SpA is an Italy-based multi-utility company created as a result of merger of ASM, AEM and AMSA. It
operates in the fields of electricity production, sale of electricity and gas, gas and electricity networks,
heating, integrated water cycle and environment. The Company also offers engineering, telecommunication,
information technology and customer relationship management services, as well as project and facility
management and planning and realization of telecommunication networks.
A2A SpA operates through its subsidiaries, including Aprica Studi, Selene, Aem Service, Aem Calore&Servizi,
Itradeplace and Bascom, among others. The Company is headquartered in Milan, Italy.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Electricity/Gas Utilities
SIC: 4939 Combination Utilities
NAICS 221122 Electric Power Distribution

Page 1: OVERVIEW

HISTORY
Zayre Corporation introduced BJ's Wholesale Club warehouse club concept to New England in 1984. Zayre
purchased the California-based HomeClub chain of home improvement warehouses in 1986.
TJX Company sold Zayre (BJ's parent) Stores division to Wab an in 1988. In 1997, BJ's Wholesale Club,
became an independent, publicly owned entity when Waban, BJ's parent company at the time, distributed to
its stockholders, on a pro rata bas is, all of th e company's outstanding common stock. BJ's entered the
Atlanta market in 2002 and opened four new clubs.
BJ's opened 14 gas stations in 2002 and 10 gas stations in 2003. BJ's launched its BJ's Rewards Membership
(SM) program in 2003. The company opened a 480,000 square foot cross-dock facility in Florida, in 2003.
The company opened eight new BJ's stores in 2005.
In 2006, BJ's opened its 618,000 square foot new distribution center in Uxbridge, Massachusetts. The
company launched its retail shopping website, www.bjs.com in 2006.
The company closed 46 in-club pharmacies in February 2007. During the same month, BJ's voluntarily
recalled its pre-packaged Wellsley Farms brand fresh mushrooms, purchased between February 11 and
February 19, 2007, from the market due to a potential health risk. The company also recalled its 25-count
packages of '"Berkley & Jensen" Full-Cut Pig Ears dog treats due to suspected Salmonella contamination in
March 2007.
BJ's Wholesale Club launched BJ's Visa card in partnership with Barclays, in August 2007. The new credit
card offers cardholders a faster, consumer-friendly way to earn BJ's Bucks, and introduces a number of new,
convenient card features that provide additional value to qualified BJ's Members.

BRIEF BUSINESS DESCRIPTION

BJ's Wholesale Club (BJ's) is a warehouse club operator in the eastern US. The company's product offerings
include branded gourmet and grocery products and a range of general merchandise. BJ's also markets a
range of private label products. The company also offers specialty services and premier benefit programs.
BJ's operates 158 full-sized warehouse clubs that averaged approximately 113,000 square feet and 19
smaller format warehouse clubs that averaged approximately 71,000 square feet. Additionally, BJ's operates
100 gas stations in its clubs.
Food categories at B J's include fresh and frozen foods, fresh meat and dairy products, beverages, dry
grocery items, fresh prod uce and flo wers, and ca nned goods. Its general merchandise offerings include
office supplies and equipment, consumer electronics, pre-recorded media, small appliances, auto
accessories, tires, jewelry, health and beauty aids, basic household products, computer software, books,
greeting cards, apparel, tools, toys and seasonal items.
The company's specialty services include full service optical stores, food courts, full-service Verizon Wireless
centers, home improvement services, BJ's Vacations services, garden sheds, patios and sunrooms; a
propane tank filling service, an au tomobile buying service; a car rental service, muffler and brake services
operated along with Monro Muffler Brake and Tuffy Associates.
BJ's also has 100 gasoline stations in operation at its clubs. The company's electronic commerce business,
bjs.com, provides additional products generally not found in clubs. The website also offers services such as
auto and ho me insurance, home i mprovement, travel services, and membership services. Items sold on
website include electronics, computers, and office equipment, products for the home, health and beauty
aids, sporting goods, DVDs and music, baby products, toys and jewelry.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Food Wholesaling
SIC: 5399 Miscellaneous General Merchandise Stores
NAICS: 4529 Other General Merchandise Stores

Page 1: OVERVIEW

HISTORY
EasyJet Airline Company Limited, styled as easyJet, is a low cost airline based at London Luton Airport.
It was established on 18 October 1995 and started operations on 10 November 1995.
It was launched by Stelios Haji-Ioannou with two wet leased Boeing 737-200 aircraft. The aircraft were
operated initially by GB Ai rways, and subsequently by Air Foyle as easyJet had not yet received its Air
Operator's Certificate. easyJet initially operated two routes: London Luton to Glasgow and Edinburgh.
Nowadays it is the second largest low-fare airlines in Europe, after Ryanair, operating domestic and
international scheduled services on 387 routes between 104 European and north African airports.
The airline holds a United Kingdom Civil Aviation Authority Type A, operating licence permitting it to carry
passengers, cargo and mail on aircraft with 20 or more seats.
The parent company, easyJet plc, i s listed on the London Stock Exchange in 200 0(LSE: EZJ) bu t Sir HajiIoannou and his family remain major shareholders in easyJet PLC . He separately owns easyGr oup IP
licensing Ltd , the company that owns the easy brand and licenses it to the airline but also other
companies. There are no "cross-shareholdings" between easyJet and these other easyGroup licensee
companies. easyJet PL C operates independently from the other companies, although some "crossmarketing" agreements do exist on arms length terms.
EasyJet has seen rapid expansion since its establishment in 1995, having grown through a combination of
acquisitions and base openings fuelled by consumer demand for low-cost air travel. The airline now operates
166 aircraft from 20 bases across Europe.

BRIEF BUSINESS DESCRIPTION

EasyJet is one of Europe's leading low-cost a irlines. It is en gaged in the provision of a l ow-cost airline service on shorthaul and medium-haul point-to-point routes principally within Europe. In order to be able to offer low fare airline
services, easyJet attempts to cut all costs t hat it deems unnecessary so that it can b oost its tig ht profit margins. For
example, easyJet uses the In ternet to reduce its distributio n costs. Over 90% of a ll seats on easyJet's flights are sold
over the Internet, making easyJet one of Europe's biggest Internet retailers.
EasyJet currently has operating bases throughout th e UK and mainland Europe. The company's network of ope rating
bases was constructed due to easyJet taking advantage of the reforms offered by the single European aviation market.
easyJet operates routes from a number of airports in the UK and mainland Europe. The company flies from a number of
airports with b ases including London Luton, London Stansted, Liverpool John Lennon, Geneva, Amsterdam, Belfast,
London Gatwick, Paris Charles De Gaulle, Pari s Orly, East Midlands, Bristol and Newcastle.
The Companys subsidiaries include easyJet Airline Company Limited, easyJet Switzerland SA, easyJet Aircraft Company
Limited, easyJet Sterling Li mited, easyJet Leasing Limited and easyJet Malta Li mited and on January 31, 2008, it
completed the acquisition of GB Airways.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Low Cost Airlines

SIC: 4512 Air Transportation, Scheduled

NAICS: 481111 Scheduled Passenger Air Transportation

Page 1: OVERVIEW

HISTORY
eBay was formed as a sole proprietorship in 1995, when Pierre Omidyar, a computer programmer, wrote the
code for a n auction website that he ran from his home computer. The company was incorporated in
California in 1996. The company reincorporated in Delaware in 1998 and became public in the same year.
Around the same time, America Online (AOL) and eBay signed a t hree year agreement under which AOL
received guaranteed payments totaling $12 million from eBay. The new all iance secured eBay a large
potential customer base in the form of AOL members.
The company acquired several entities in 19 99: Butterfield & Butterfield, an auction houses; Alando.de,
Germany's largest online auction house; and Kruse International, one of the largest land-based auctioneers
of collectible cars in the world.
eBay expanded through joint ventures in Australia and Japan in 2000. In the same year, eBay took an equity
stake in the online used-car dealer AutoTrader.com and also acquired Half.com.
During 2001-02, the company further expanded with the acquisition of other entities: iBazar which operated
online trading sites in Belgium, Brazil, France, Italy, the Netherlands, Portugal, Spain, and Sweden. Later
eBay sold iBazar's Brazilian subsidiary to Mercad oLibre in exchange for a stake in MercadoLibre. In late
2001, eBay Singapore was launched.
eBay introduced its new business-to-business site, eBay Business in 2003.
During 2003-04, the company acquired all of Fair Markets technology and business assets; Marktplaats.nl
(www.marktplaats.nl), a classified s website in the Netherland; Mobile.de, an online classifieds websites for
vehicles in Germany; and Baazee.com to expand its business in India. In the same year, eBay raised its
stake in Inte rnet Auction of South Korea from 62% to 86%. From 2005-06, eBay acquired several online
sites to expand its bu siness (Kurant's and Rent.com; Gumtree.com and LoQUo.com; Shopping.com, Skype
and Tradera.com). In the same period, the company launched eBay Poland (www.ebay.pl). eBay continued
its expansion in 2007 with t he acquisition of ot her entities (StubHub, GittiGidiyor.com, StumbleUpon and
ViA-Online). In the same year, eBay entered an agreement with Sanook!,an online portal in Thailand, to
launch a regional e-commerce site.
In February 2008, eBay agreed to a sett lement with MercExchange to dismiss all claims and appeals
stemming from the patent lawsuit filed by MercExchange in 2001. The company launched a new application
in September 2008. The new product was a new mobile application - eBay Mobile - available for iPhone and
iPod Touch users in Europe. The new free application gave Apple users the freedom to bid, buy and pay for
items directly from their mobile devices.

BRIEF BUSINESS DESCRIPTION

eBay Inc. (eBay) provides online marketplaces for the sale of goods and services, as well as other online
commerce, or ecommerce, platforms, online payments services and online communications offerings to a
diverse community of individuals and businesses. eBay has three business segments: Marketplaces,
Payments and Communications.
The marketplaces segment enables online commerce through a variety of platforms including the traditional
eBay.com platform and other online platforms such as classifieds websites, Half.com, Rent.com,
Shopping.com and StubHub. The company also offers a range of community and support features such as
announcement and bulletin boards, customer support boards, personal pages, and other category-specific
information exchanges to buyers and sellers.
eBays Payments segment, which consists of PayPal, enables individuals and businesses to send and receive
payments online.
The company's communications segment consists of Skype, an internet communications company. Skype
Voice over Internet Protocol (VoIP) calls between Skype users, and also provides Skype users' connectivity
to fixed line and mobile telephones. The company has more than 190 Skype Certified hardware products.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Online Auctions

SIC: 5961 Catalog and Mail-Order Houses

NAICS: 45411 Electronic Shopping and Mail-Order Houses

10

Page 1: OVERVIEW

HISTORY
Gruppo Coin was founded in 1916.
In 1926, the company started first Coin store in Mirano and Venice and started selling fabrics, yarns and
linen.
Gruppo Coin opened first Oviesse store in Milan in 1965.
Between 1966 and 1974, the company opened Coin branches in Brescia, Vicenza, Varese, Pordenone,
Vigevano, Mantua, Genoa, Leghorn, Udine, Piacenza, Naples, Taranto and Ferrara.
In 1986, the company's Coin brand became the first retailer to develop a fidelity card program in Italy.
Gruppo Coin's Oviesse brand entered into apparel retailing business in 1986.
In 1998, the company acquired La Standa stores, which were in the textiles and clothing sector. In the
following year, the company listed on the Milano Stock Exchange.
PAI partners, a leading european private equity firm, became Gruppo Coin's majority shareholder in 2005.
In 2006, Gruppo Coin merged into the holding company Bellini Investimenti S.p.A and continued its
operations.
During 2007, the company's Oviesse brand started its international expansion plan and opened 17 stores in
Middle East and Eastern Europe countries.
In May 2008, Gruppo Coin's OVS industry brand inaugurated its first store in Qatar.

BRIEF BUSINESS DESCRIPTION

Gruppo Coin is an Italy based company that markets and distributes clothing and accessories for men,
women and children. It also distributes health and beauty products, and home decorations in Italy. The
company operates 427 retail stores, of which 399 are located in Italy and 28 shops are located abroad.
Gruppo Coin operates under three distinct brands: OVS industry, Coin and Young Village. Gruppo Coin's OVS
industry brand offers a variety of products, including outdoor clothing, lingerie and accessories for men,
women and children in Italy. Its products are targeted at young families with children and are marketed in
the mid to mid-low price bracket. The company's Oviesse shops are primarily located in shopping centers,
retail parks and shopping malls. It operates 301 retail stores in Italy and 22 retail stores in abroad.
The company's Coin brand offers clothing, lingerie, household articles, perfumes, home decorations,
accessories and beauty, cosmetics and gift items in Italy and abroad. It has 71 retail stores, both owned and
franchised.
Gruppo Coin's Young Village brand provides modern and metropolitan clothing for children and teenagers. It
operates four retail stores in Milan and Rome.
The company's subsidiaries include Oviesse Franchising, Padana, Oriental Buying Services and Gruppo Coin
International, Wandar, Lagrange Quarantasette and Sirema.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Department Stores
SIC: 5621 Clothing Stores
NAICS 44812 Women's Clothing Stores

Page 1: OVERVIEW

HISTORY
The origins of Six Contin ents, the for mer owner of I nterContinental Hotels Group (IHG), can be traced back to
1777 when William Bass established a brewery in Burton-on-Trent, trading under his own name (Bass). In 1876,
the company's red triangle trademark became the first trademark to be registered in the UK.
As the business grew, it acqui red many regional companies such as Tennents Caledonian in Scotland, and
Mitchells & Butler in the Midlands. Bass merged in 1967 with Charringtons in London. Each regional brewery had
large pub estates and as a result Bass became one of the largest brewers and pub owners in the country. Bass
already owned a small chain of hotels, which had been acquired in 1987, but the first significant move into hotels
came in 1989, with the purchase of Holiday Inns International. In the same year, the company acquired Holiday
Inns of America.
In 1991, Holiday Inn E xpress was launched adding a complementary brand i n the limited service segment; and
Crowne Plaza was launched in 1994 to move the company into the upscale market. As the business became more
brand focused it sold its US mid scale hotel assets in 1996, whilst retaining the branding through franchise
agreements. Over the next few years that followed, a number of smaller, non-core businesses such as Gala bingo
and Coral bookmakers were sold alo ng with more pubs. The pubs business grew and was increasingly branded,
having opened its first O'Neills in 1994. These were followed by Harvester and All Bar One in 1995. The company
acquired half of the Carlsberg-Tetley brewing business in the UK in 1996. The company acquired InterContinental
in 1998. The company joined with Punch Taverns in a bid to acquire the pub estate of Allied Domecq in 1999. In
early 2000, the acquisition of SPHC in Australia confirmed the company's position as the leading hotel company in
Asia Pacific, and the acquisition of Bristol in the US shortly afterwards gave the company a stronger management
contract presence in the world's largest hotel market. Later that year, the company entered into an agreement to
sell Bass Brewers to a m ajor Belgian brew er. This step also involved the sale of the 'B ass' name and the
subsequent name change to 'Six Continents' to better re flect the global spread of the company's business.
Following the sale of Bass Brewers, further 988 smaller pubs were sold in 2001. In 2005 the group anno unced
the acquisition by Strategic Hotels Ca pital (SHC) of two hotels in the US (IHG Miami and Chicago) and t he sale
of numerou s hotels: 73 ho tels in the UK to LRG Acquisition Limited (consortium comprising Lehman
Brothers Real E state Partners, GIC Real Estate and Realstar Asset Management), 9 hotels in Australia and New
Zealand to Eureka Funds Management, the Holiday Inn, S uva, to a subsidiary of Fiji National Provident Fund and
InterContinental Hotel Paris. In 2006 the group sold also 24 hotels in the Europe, Middle East and Africa region to
Westbridge Hospitality Fund In the s ame year the company launched the industry's first com prehensive virtual
concierge service for Holiday Inn Hotels and Resorts.
In 2007 IHG launched its Crowne Plaza brand in Vietnam, it sold its Crowne Plaza London, it announced plans to
expand its operations in India through new management contracts with real estate developers.
In 2008 the group signed some contracts with a lot of partner. Between others with Expedia (to allow consumers
to book IHG hotels on Expedia sites), with ALDAR Properties (for the development of new IHG-branded hotels in
Abu Dhabi), with Sun Days International (to develop luxury resort, on the shores of the Jordanian Dead Sea).

BRIEF BUSINESS DESCRIPTION

InterContinental Hotels Group PLC (I HG), incorporated on May 21, 2004, is a worldwide owner, manager an d
franchisor of hotels and resorts. During the year ended December 31, 2007, IHG, through its various subsidiaries
owned, leased, managed or franchised hotels and guest rooms in nearly 100 countries around the world. I HGs
brands comprised 3,949 franchised, managed, owned or leased hotels and 585,094 guest rooms. The Companys
brands include InterContinental Hotels & Resorts (InterContinental), Crowne Plaza Hotels & Resorts (Crowne
Plaza), Holiday Inn Hotels & Resorts (Holiday Inn), Holiday Inn Express, Staybridge Suites, Candlewood Suites and
Hotel Indigo. IHG operates its hotel u nder three business models: franchised, managed, and owned and leased.
Franchised operations are those where the Company neither owns nor manages the hotel, but license the use of a
Company brand and provides access to reservation systems, loyalty schemes and know -how. IHG derives
revenues from a brand royalty or licensing fee, based on a percentage of room revenue. Managed operations are
those where, in addition to licensing the use of a Company brand, IHG manages the hotel for third-party owners.
The Company derives revenues from base and incentive management fees and provides the system infrastructure
necessary for th e hotel to oper ate. Owned and leased operations are those where IHG owns (or leases) and
operates the hotel and, in the case of o wnership, takes all the benefits and risks associated with ownership. In
addition, the Company also makes equity investments in hotel ownership entities.

INDUSTRY CLASSIFICATION
Dow Jones: Hotels (except Casino)/Motels
SIC 7011 Hotels and Motels
NAICS 72111 Hotels (except Casino Hotels) and Motels

12

Page 1: OVERVIEW

HISTORY
Microsoft was founded when Bill Gates and Pau l Allen developed an inte rpreter for Basic programming
language at Micro Instrumentation and Telemetry Systems in 1975.
The company started its first international office in Japan as ASCII Microsoft in 1978.
The company moved from Albuquerque to Bellevue, Washington in 1979.
The company acquired a variant of Unix from AT&T and launched it as Xenix, the company's first operating
system in 1980. Microsoft was incorporated in 1981. In the same year, the company launched MS-DOS (Disk
Operating System) and entered into a contract with IBM to provide an operating system for IBM's personal
computer named PC-DOS by IBM.
Microsoft created MSX, a home computer system in 1983. In the same year, the company also launched its
first Personal Computer (PC)-specific mouse known as the Microsoft Mouse. During the same period, the
company started Microsoft Press, a book publishing division on various Microsoft technologies.
Microsoft started its first inte rnational production facility in the Republic of I reland in 1985. In the sa me
year, the company launched Microsoft Windows, a graphical extension of its MS-DOS operating system. The
company was relocated to Redmond, Washington in the following year.
The company became a publicly traded company in 1986. In the following year, it released its OS/2
operating system for Original Equipment Manufacturers (OEMs). Microsoft bought a relational database
management system from Sybase and named it as SQL server in 1988. In the following year, the company
introduced Microsoft Office, a bundle of separate office productivity applications including Microsoft word
and Excel.
In 1991, Microsoft founded Microsoft Research, a division of the company for researching computer science
subjects. In the same year, the company also launched Microsoft Visual Basic and Microsoft Access.
Microsoft launched MSN (Microsoft network), an umbrella service division for all online services of the
company in 1995. The company acquired Web TV in the same year. It also introduced Microsoft SQL Server
6.5, a data base management system with inbuilt support for internet applications, in the same year.
Microsoft signed an agreement with Apple Macintosh operating systems to include Internet Explorer, a web
browser application in the operating system used by Apple in 1997. In the same year, the company also
launched Microsoft Windows 97, Microsoft Office 97 and Internet Explorer 4.0. During the same year, it also
upgraded its operating system to Window 98 with features such as FAT 32 files system and Internet Explorer
4.0 SP1.
The company's acquisitions in 1998 comprise the following: Firefly Network, MESA Group, Valence Research,
and Beaverton Ore based developer of industry leading TCP/IP load balancing and fault tolerance software
for the Microsoft Windows NT operating system.
In 2004, the company also acquired some other company enlarging its dimensions In 20 05, Microsoft
acquired Sybari Software and Groove Networks (which helps geographically distributed workgroups to be as
productive as t hose that work in a sin gle physical location) and FrontBr idge Technologies, a provi der of
managed services that a ddress corporate e-mail security, compliance and availability requirements. This
technology is delivered in unique ways through a variety of software and Web applications. During the same
year, Microsoft acquired mediastreams.com, that develops communications applications based on voice over
internet protocol (VoIP) technology. The company also acquired FolderShare, MotionBridge, 3GSM World
Congress 2006, the assets of Onfolio and Apptimum to use its acquired intellectual property and technology
assets to provide customers of Microsoft Windows with the tools they need to simplify the transfer of their
applications to their new computers.
In 2006, Microsoft acquired ProClarity, a developer of advanced analysis and visualization technologies that
work in association with Microsoft's business intelligence (BI) platform, and Softricity, a provider of
application virtualization and dynamic streaming technologies for reducing complexity of IT management in
2006.
In November 2007, Comcast and Microsoft launched a new internet-based communications product for small
and medium-sized businesses (SMBs), which gives SMBs access to services that were traditionally available
to only larger companies with IT staff.
In May 2008, Mic rosoft proposed to the B oard of Dir ectors of Yah oo! an offer to acquire all outstanding
shares of Yahoo.

Page 2: OVERVIEW

BRIEF BUSINESS DESCRIPTION

Microsoft Corporation develops, manufactures, licenses and supports a range of software products for
computing devices. The Company's software products include operating systems for se rvers, personal
computers and intelligent devices, server applications for distributed computing environments, information
worker productivity applications, business solution applications, high-performance computing applications
and software development tools and video games. It provides consulting and product support services, and
trains and certifies computer system integrators and developers. Microsoft Corporation sells the Xbox 360 video
game console and games, the Zune digital music and entertainment device, PC games, and peripherals. The Company
has five segments: Client, Server and Tools, the Online Services Business, the Microsoft Business Division, and the
Entertainment and Devices Division.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Systems Software
SIC: 7372 Prepackaged Software
NAICS 511210 Software Publishers

14

Page 1: OVERVIEW

HISTORY
Nokia Corporation was established in 1967 as a company under the laws of the Republic of Finland.
This was the result of th e merger of three Finn ish companies: Nokia, a wood-pulp mill founded in 1865;
Finnish Rubber Works, a manufacturer of rubber boots, tires and other rubber products founded in 18 98;
and Finnish Cable Works, a manufacturer of telephone and power cables founded in 1912. Nokia ntered the
telecommunications equipment market in 1960, when an electronics department was established eat Finnish
Cable Works to concentrate on the production of radio transmission equipment.
The company introduced the first fully digital local telephone exchange in Europe in 1982. In the same year,
Nokia introduced the world's first car phone for the Nordic Mobile Telephone analogue standard. Nokia was
listed on the major stock exchanges like London in 1987 and Frankfurt in 1988. According to Nokia, the first
GSM call was made with a Nokia phone over the Nokia built network of a Finnish operator called Radiolinja
in 1991.
In the same year, Nokia won contracts to supply GSM networks in other European countries. In early 1990s,
the company made a strategic decision to make telecommunications as a core business and divested basic
businesses to form two main business groups: Nokia mobile phones and Nokia networks.
Nokia was listed on the New York Stock Exchange in 1994. In the same year, it launched mobile phones for
all major digital systems: GSM, GSM 1800 (PCN), and TDMA. The company added CDMA and GSM 1900
mobile phones in 1997. Two years later, it launched the first WAP handset to the global mass market in the
form of Nokia 7110. Nokia acquired DiscoveryCom, a pr ovider of broadband digital subscriber line (DSL)
services in 2000.
In the following year, the company acquired Ramp Networks a US based provider of purpose built internet
security appliances, specifically designed for small office ap plications, and Am ber Networks, a US based
networking infrastructure company that develops fault tolerant routing platforms.
Subsequently, Nokia and Sony collaborated to develop an open middleware platform. In the next year, Nokia
unveiled the world's first TDMA handset with a full-color display. The company also reached an agreement
with IBM to collaborate on th e delivery of ente rprise wireless eBusiness solutions. Subsequently, Nokia's
stock was de -listed from the London Stock Exchange. In 2004, Nokia's shares were de-listed from Paris
Stock Exchange and the company were reorganized into four business groups namely mobile phones,
multimedia, enterprise solutions and networks to further align the company's overall structure with its
strategy. Nokia sold its professional mobile radio business to a defence and space company, in 2005. In 2006,
Nokia acquired Intellisync Corporation, a provider of platform-independent wireless messaging and
applications for mobile devices and subsequently, it entered into an agreement with Sanyo Electric to form a
company comprising their respective CDMA mobile phone businesses. In the same year, Nokia inaugurated
its manufacturing facility in India. This made Nokia the only company in India who manufactured both
mobile devices and network infrastructure equipments.
Later, Nokia and Siemens announced a plan to combine Nokia's n etworks business and Siemens' carrier
related operations for fixe d and m obile networks to form a new company called Nokia Siemens Networks,
owned jointly by Nokia and Siemens and consolidated by Nokia.
Nokia continued its acquisition spree by acquiring companies which include LCC International's US
deployment business. Subsequently, Motorola and Nokia announced an agreement for interoperability
among their DVB-H (Digital Video Broadcast-Handheld) enabled mobile devices and network services. Also in
2006, Nokia along with Citigroup, MasterCard Worldwide and Cingular Wireless (now AT&T) started a
consumer technology trial of Near F ield Communication (NFC) enabled mobile phones with MasterCard
PayPass contact-less payment capability in New York City. In January 2007, Sprint Nextel selected Nokia as
a key infrastructure and consumer electronic device provider for Sprint Nextel's 4G WiMAX next generation
mobility network along with Intel, Samsung and Motorola to create advanced network infrastructure and
access devices.
In the same month, Nokia announced its decision to apply for the delisting of its Swedish Depository
Receipts (SDRs) from the Stockholm Stock Exchange, due to their decreased trading volumes (Nokia's SDRs
final trading day on the Stockholm Stock Exchange was in June 2007). In April 2007, Nokia Siemens
Networks started operating as a communications infrastructure services provider.
In September 2007, Nokia join ed Check Point and Intel to work on the development of n etwork security
appliances for enterprises.

Page 2: OVERVIEW
In the following months the company continued its acquisition policy with Avvenu, Symbian, NAVTEQ and
Plazes. Nokia in 2008 announced also fresh investments towards its manufacturing plant in India and the
intention to discontinue the production of mobile devices in Germany. As part of this, it closed its Bochum
site by mid-2008, and moved its manufacturing facilities to other cost-competitive places in Europe.

BRIEF BUSINESS DESCRIPTION

Nokia Corporation (Nokia) is player in mobile industry. The Company makes a range of mobile devices with
services and software that enable people to experience music, navigation, video, television, imaging, games,
business mobility and more. From January 1, 2004 through March 31, 2007, Nokia had four business groups:
Mobile Phones, Multimedia, Enterprise Solutions and Networks, supported and serviced by two horizontal
groups: Customer and Market Operations and Technology Platforms, in addition to var ious Corporate
Functions.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Telecommunications Equipment
SIC: 3663 Radio and Television Broadcasting and Communication Equipment
NAICS 33422 Radios and Television Broadcasting and Wireless Communications Equipment Manufacturing

16

Page 1: OVERVIEW

HISTORY
ISAs activities (now Permasteelisa) started in 1973. The Companys growth starts by taking over and
integrating into the group over more and more companies specializing in the engineering and production of
curtain walls and internal partitions, with the consequence that orders started to be no longer limited to the
Italian market, but were extended to the whole of Europe.
The first important step towards international markets took place in 1986 with the acquisition of a minori ty
interest in the Australian company, Permasteel Industries Pty Ltd., which produced steel doors and windows.
The name Permasteelisa results from the combination of the name Permasteel and ISA.
The international expansion continued throught the 1990s with the creation of nume rous subsidiaries in
different countries, such as Permasteelisa UK Ltd. in England, Permasteelisa Benelux S.A in Belgium,
Permasteelisa Pacific Pte. Ltd, in Singapore company and also company in Thailand, Taiwan, China, France
Spain, Holland and Hong Kong.
With the acquisition in 2001/2002 of the Gartner Group, Permasteelisa became the worldwide leader in the
engineering, manufacturing and installation of architectural envelopes (curtain walls) and internal partitions.

BRIEF BUSINESS DESCRIPTION

Permasteelisa is one of t he world's leading operators in the design, construction and installation of
architectural envelopes. In particular, the Companys activity is divided into four sectors: architectonic
envelopes (curtain walls), internal walls and p artitions, internal fitting for shops and offices, and industrial
doors.
Permasteelisa Group SpA operates worldwide through its subsidiaries. It has a network of more than 60
companies (among others Permasteelisa Interiors Srl, Permasteelisa International B.V., Permasteelisa Group
USA Holding Corporation, Josef Gartner GmbH and Permasteelisa Pacific Holdings Ltd) in 27 nations and
completed many projects around the world, including the Sydney Opera House, various European Parliament
buildings in Brussels and Strasbourg, the Canary Wharf development in London, the headquarters of France
Television in Paris, the headquarters of ABN AMRO in Amsterdam, the headquarters of De utsche Post in
Bonn, the airports serving Munich, among others.
The company operates primarily in Italy. It is headquartered in Vittorio Veneto, Italy and employs 5,420
people.

INDUSTRY CLASSIFICATION
Dow Jones Industry Building Construction
SIC: 3444 Sheet Metal Work
NAICS: 332322 Sheet Metal Work Manufacturing

Page 1: OVERVIEW

HISTORY
Recordati was founded in Correggio as Laboratorio Farmacologico Reggiano by G. Recordati in 1926.
The company moved to a new headquarters in Milan in 1953. The company signed an exclusive license
agreement is with Syntex in 1961.
Recordati was listed on the Italian Stock Exchange in 1984. It comp leted the joint acquisition, with Byk
Gulden, of Elmu Quimica Farmaceutica in 1995. The company's flagship product Zanidip (lercanidipine) was
first launched in 19 97. In the next year, Recordati acquired the pharmaceutical chemicals company Almu,
located in Murcia, Spain.
The following year, R ecordati acquired the pharmaceutical company Doms Adr ian in France.The company
acquired the French pharmaceutical group Bouchara in 2000.
Recordati established Bouchara Recordati in France in 2001 a fter the reorganization of the French
pharmaceutical companies acquired in 1999 an d 2000. Also in the same year, all savings shares were
converted into ordinary shares. The U.K. Medicines Control Agency granted a Product License (marketing
approval) for Zanidip (lercanidipine) 20 mg(milligram) tablets in 2002. The following year, the 20mg strength
of lercanidipine was lauched in Germany, France and Australia in 2003.
Recordati sold its shares in Kutnowskie Zaklady Farmaceutyczne Polfa (P olfa Kutno) to IVAX in 2004. The
next year the company acquired German pharmaceutical company, Merckle and als o entered into a mu ltiterritorial license agreement with Lavipharm Laboratories for a new transdermal patch containing the
narcotic analgesic fentanyl in the same year.
Also in the s ame year, the company established Recordati Pharmaceuticals in the United Kingdom and
Recordati Hellas Pharmaceuticals S.A in Greece.
Recordati entered into an agreement with Apotecnia for the sale of it s pharmaceutical chemicals plant in
Beniel, Spain in January 2006 and in November, it acquired Jaba Farmacutica and the other pharmaceutical
businesses belonging to the Grupo Jaba in Portugal.
The company signed a non-exclusive agreement with Meda, an international pharmaceutical company based
in Sweden, for the marketing and sale in Germany of Zaneril in February 2007. In December 2007, the
company acquired Orphan Europe, a European pharmaceutical group for E135 million.

BRIEF BUSINESS DESCRIPTION

Recordati SpA is an Italy-based company active in the pharmaceutical industry. The Company's core activity
is the research, development, manufacture and marketing of pharmaceuticals.
The Company is also active in the field of pharmaceutical chemicals, producing both active ingredients for its
own pharmaceuticals and active ingredients and intermediates for the generic drug market.
The Company focuses on various therapeutic areas, including cardiology, gastroenterology, central nervous
system (CNS) and analgesia. The company's leading product is lercanidipine, a latest generation calcium
channel blocker for the treatment of hypertension discovered and entirely developed by Recordati.
Lercanidipine has been approved in a total of 98 countries and is currently on the market in 84 of these.
Recordati sells its proprietary pharmaceuticals directly to the market in France, Germany, Greece, Ireland,
Italy, Portugal, Spain and the United Kingdom and through licensees outside these countries. Recordati's
pharmaceutical production is based in Italy (Milan and Campoverde, Latina) and France (Montluon). Its
plant for the production of proprietary active ingredients is situated in Cork (Ireland).
The Companys subsidiaries are Recofarma Srl, Innova Pharma SpA, Recordati Portuguesa LDA and
Recordati Espana SL, among others.

INDUSTRY CLASSIFICATION
Dow Jones: Industry Pharmaceuticals
SIC: 2834 Pharmaceutical Preparations
NAICS: 325412 Pharmaceutical Preparation Manufacturing

Page 1: OVERVIEW

HISTORY
Tesco was founded by Jack Cohen in 1919, when he first sold groceries in t he East end of London. The
brand name of Tesco first appeared on packets of tea in the 1920s. The Tesco name came from the initials
of TE Stockwell, who was a partner in the firm of tea suppliers, and CO from Jack Cohen's surname.
The first Tesco store was opened in 1929 in Burnt Oak, Edgeware in the UK. Following the success of self
service stores in the US, the group opened its first self service supermarket in Maldon in 1956. The business
expanded from stores to supermarkets, and by the early 1960s, Tesco had becom e a familiar household
name, selling household goods and clothing. The group established its gasoline station services in 1974.
Throughout the 1990s, Tesco continued its international expansion. In response to a growing Eastern
European market, Tesco opened stores in Poland, Hungary, Slovakia and the Czech Republic. During the
same period, Tesco also ventured into Taiwan, Thailand and South Korea. The group launched its website in
2000. Tesco announced in 2001 that it formed a strategic relationship with American supermarket Safeway,
to take the tesco.com home shopping model to the US. In the same year, Tesco entered the Malaysian
market. In 2002 the group purchased T&S and HIT and in 2003 the small Turkish hypermarket chain, Kipa.
In the same year, the group launched Tesco home and mobile phone.
Tesco and Carrefour swapped assets su ch as stores in the Czech Republic, Slovakia and Taiwan in 2005.
Tesco acquired 21 former BP Safeway gasoline stations from William Morrison in 2005 and adapted them to
the Express convenience store format.
Tesco launched a new internet telephone service in January 2006. The group intends to start convenience
format stores on the West Coast in 2007. The development of the business will be through organic growth,
with initial planned capital expenditure of up to 250 million per year. This move would allow Tesco to build
its position in the world's largest markets and would further the company's strategy of International growth.
In May 2006 Tesco was named 'Online Retailer of the Y ear', 'Grocer of the Year' and 'Britain's Favorite
Supermarket' by Grocer Gold Awards. In July 2006, Tesco bought t he Polish convenience retailer Leader
Price which is a convenience retailer that is part of the Casino group.
Tesco launched Tesco Direct, in non food retail segment for se lling non food items to its customers in
August 2006 and in September it announced its plans to open 6 new regional buying offices to increase local
sourcing and make it easier for small producers to sell goods through the Tesco.
Tesco was voted Consumer's Favorite Retailer at the Retail Week Awards in March 2007.

BRIEF BUSINESS DESCRIPTION

Tesco is one of the largest food retailers in the world, operating 3,263 stores. The group operates through
multiple store formats, including Extra, Superstore, Metro, Express and hypermarkets. The group operates in
the UK, other European countries and Asia.
Its stores stock roughly 40,000 food products. In addition, the group also sells nonfood items including
electrical goods, home entertainment, clothing, health and beauty, stationery, kitchen utensils, soft
furnishings and seasonal goods. The group also markets products under its own labels at three levels: value,
normal and finest. The group operates over 1,988 stores in the UK, its largest geographic market. Apart
from regular groceries, the UK stores also have gas stations. The group has become one of UK's largest
independent petrol retailers. Furthermore, the group has a joint venture with Royal Bank of Scotland to
provide personal finance (Tesco Personal Finance) in the UK.
The group has operations in the rest of Europe, including the Republic of Ireland, Hungary, Poland, Czech
Republic, Slovakia, Turkey, Malaysia, China, Japan, Thailand and South Korean The group provides online
services through its subsidiary, Tesco.com. The group also provides broadband internet connections (Tesco
broadband) and telecommunications services (Tesco Mobile and Home Phone) through a 50-50 joint venture
with O2, a mobile phone company. The group also provides its financial services through its website.

INDUSTRY CLASSIFICATION
Dow Jones: Supermarkets/Grocery Stores
SIC: 5411 Grocery Stores
NAICS 4451 Grocery Store

19