Press Release SME (5)

7/31/2019 Press Release SME (5)

1/12

Quarterly SME Survey September quarter 2012

SME confidence & conditions better in Q3 but still below average;sentiment of SMEs now in line with their larger counterparts but activity,

capacity utilisation and new orders continue to under perform. Strength inrecreation & personal services and transport a consistent theme acrossSMEs and larger firms.

! SMEs business confidence rebounded in the September quarter, though remained below-averagelevels. The overall level of SME confidence was consistent with levels reported by largerbusinesses in the NAB Quarterly Business Survey this is the first time in two years that smallerfirms have been as confident as larger firms. Part of the improvement in sentiment may reflectexpectations for further interest rate cuts (survey taken prior to RBA lowering the cash rate by25 bps at its meeting in October), while announcements of additional policy stimulus by majorcentral banks (US, Europe and Japan) may have helped.

! SME business conditions also strengthened in the September quarter, following a very weakoutcome in the previous quarter, though smaller firms continued to under perform their larger

counterparts. The subdued activity outcome largely reflected weakness in profitability, while SMEtrading and employment conditions held up a little better. That said, capacity utilisation of SMEsremains at low levels for this survey (2006).

! Responses to a special question suggest that a majority of SMEs developed or improved theirwebsites and launched new products over the past 12 months in an attempt to strengthen theircompetitiveness in the market.

! By industry, confidence improved notably in wholesale, while it also strengthened considerably inproperty, business and finance services. Sentiment remained surprisingly subdued in healthservices, possibly reflecting concerns about potential cut backs to public sector spending, whileoptimism was very strong in property services, where lower borrowing rates may be expected tostimulate housing demand in coming months. Confidence was strongest in WA, while it a littlesofter and broadly similar across the other mainland states.

! Conditions in manufacturing, property services and transport improved notably in the September

quarter, while accommodation, cafes and restaurants was the only industry to report a (slight)deterioration in activity. SME conditions were strongest in health services, while they wereweakest in wholesale, retail and construction with these industries also under performing theirlarger counterparts. Conditions picked up considerably in all states, with the exception ofQueensland, where they deteriorated modestly.

! Confidence of SMEs improved across all firm sizes, with the most marked improvement recordedfor mid-tier firms ($3-5m p.a.). Confidence remained weakest for high-tier firms ($5-10m p.a.),while it was equally as soft for low-tier ($2-3m p.a.) and mid-tier firms. Conditions alsostrengthened across all firm sizes of SMEs; low-tier firms continued to report very difficultconditions, while activity of mid-tier and high-tier firms was a little less subdued.

Key quarterly business statistics**

2011q3 2012q2 2012q3 2011q3 2012q2 2012q3

Net balance Net balance

SME business confidence -5 -11 -3 SME trading conditions -1 -4 -3

Low -7 -7 -2 Low -3 -10 -7

Mid -2 -11 -2 Mid -2 -4 -3

High -4 -12 -5 High 2 -2 0

SME business conditions -4 -8 -5 SME profitability -7 -13 -8

Low -5 -13 -8 Low -9 -16 -10

Mid -5 -6 -4 Mid -7 -12 -8

High -3 -8 -3 High -6 -12 -7

SME cash flows (n.s.a.) -5 -13 -3 SME employment -4 -9 -3

Low -10 -20 -6 Low -4 -14 -4

Mid -7 -9 -7 Mid -4 -3 -3

High -1 -13 2 High -4 -11 -1

Low: $2-3m p.a. Mid: $3-5m p.a. High: $5-10m p.a.

** Data are seasonally adjusted by NAB, except SME cash flow (insufficient time series available). All data are net balance indexes.Fieldwork for this Survey was conducted from 21 Aug to 12 Sep covering over 700 SME firms across the non-farm business sector.

For more information contact:Alan Oster, Chief Economist(03) 8634 2927 0414 444 652

Next release:13 November 2012 (October Monthly)
http://business.nab.com.au/quarterly-business-survey-september-quarter-2012-1852/http://business.nab.com.au/quarterly-business-survey-september-quarter-2012-1852/


2/12

Analysis

Confidence rebounds and in linewith larger firms

-40

-30

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

SME Confidence Quarterly Confidence

Business confidence (net bal., s.a.), SME & quarterly

Conditions also improves butremain subdued

-40

-30

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

SME Conditions Quarterly Conditions

Business conditions (net bal., s.a.), SME & quarterly

SME business confidence recovered somewhat in the September quarter up 8 to -3 points after the index fell to its lowest level in more than three years in the previous quarter. WhileSMEs have tended to be less optimistic than their larger counterparts, as reported in the NABQuarterly Business Survey, confidence of SMEs recovered more strongly in the latest survey,with sentiment now broadly similar across both smaller and larger firms. Part of this recoverymay reflect an expectation for further lowering of borrowing costs (the SME survey wasconducted prior to the RBA lowering the cash rate by 25 bp at its meeting in October), a lesssevere impact of carbon pricing on activity than initially anticipated, while announcements ofadditional policy stimulus by major central banks (US, Europe and Japan) may have helped toreassure firms about the stability of the global economy. Nonetheless, overall confidenceremains below the series average of +2 points, with underlying sentiment likely to be weighed

down by soft labour market conditions and general consumer caution. The pick up inconfidence was broad-based across all firm sizes, and was particularly apparent for mid-tierand high-tier firms.

SME business conditions also improved solidly in the September quarter, though at -5 indexpoints, remained well-below the series average (of +5 points since mid-2006). SME conditionswere also reasonably subdued relative to conditions of their larger counterparts.

SMEs very weak in wholesale &retail; strong in health

-20

-10

0

10

Who

lesale

Retai

l

Cons

tructi

on

Manu

factur

ing

Prop

erty

Busin

ess

Tran

sport

Finan

ce

Rec.

&pe

rsona

l

Acco

mmod

ation

Healt

h

SME firms

A comparison of industry conditions for SMEsand larger sized firms (taken from NABsQuarterly Business Survey) suggests thatSMEs generally under performed larger firmsin the September quarter. The clearexceptions to this were business and finance

services this possibly reflects larger firms inthese industries having a greater exposure tooverseas weakness. Smaller manufacturingfirms also held up a little better than theirlarger counterparts, with SMEs in this industryperhaps less exposed to external trade andtherefore the impact of the high AUD. Aconsistent theme across all firm sizes was therelative strength in recreation & personalservices and finance services, and relativeweakness in construction.

Larger firms

10

-10

0

Net.

bal

Net.

bal

Business ConditionsSeptember quarter 2012; seasonally adjusted

-20

2


3/12

Analysis (cont.)

Profits & employment up solidly

-40

-30

-20

-10

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011 2012

Trading Profi tabi li ty Employment

SME business conditions components (net bal., s.a.)

Cash flows rebound but still poor

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

Conditions (s.a.) Cash flow (n.s.a.)

SME business conditions & cash flow (net bal.)

SME conditions improved somewhat in the September quarter, reflecting a notable pick up inprofitability and employment conditions, as well as a slight improvement in trading conditions.SME cash flows (n.s.a) also strengthened considerably, more than unwinding a heavy fall inthe previous quarter.

Capacity pressures still low

77

78

79

80

81

82

83

84

85

2006 2007 2008 2009 2010 2011 2012

SME Cap Util Quarterly Cap Util

Capacity utilisation (per cent, s.a.), SME & quarterly

Orders fall further and very poor

-30

-20

-10

0

10

20

2006 2007 2008 2009 2010 2011 2012

SME Orders Quarterly Orders

Forward orders (net bal., s.a.), SME & quarterly

Capacity utilisation was unchanged at 78.0% in the September quarter the lowest outcome in

the history of the survey (since mid 2006), and well below the level of utilised capacity of largerfirms (80.7%). Capacity utilisation of mid-tier firms fell notably in the quarter, while it picked upmodestly for large-tier firms and was unchanged for low-tier firms. The level of capacityutilisation was broadly similar across SMEs, ranging from 77.5% for low-tier firms to 77.9% forhigh-tier firms. Forward orders of SMEs deteriorated heavily for a second consecutive quarterand were very poor, particularly when compared to orders of their larger counterparts.

3


4/12

Analysis (cont.)

Stocks levels no longer declining

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

SME Stocks Quarterly Stocks

Stocks (net bal., s.a.), SME & quarterly

SME investment softens

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

SME Capex Quarterly Capex

Capital expenditure (net bal., s.a.), SME & quarterly

The SME stocks index edged higher in the September quarter, consistent with a rise for largerfirms. Nonetheless, there remains a sizable gap between the level of stocks for larger andsmaller firms, which may reflect better trading conditions of larger firms over recent quartersprompting them to increase stocks in anticipation of relatively stronger demand. Capitalexpenditure deteriorated in the September quarter, inconsistent with the pick up in capex oflarger firms. While capex of SME firms remains below the level reported by larger firms, theoverall gap has narrowed since a year ago, perhaps reflecting some reduction in mininginvestment (not captured by the SME survey) in response to the weaker global outlook.

Websites improved and new products launched by a majority of firms totry to boost competitiveness

0

25

50

Websit

e

New

produc

t

Onlin

emark

eting

Redu

cedp

ricing

Offlin

emarketin

gR&

D

Outsourc

eNon

e

New

location

Move

dlocatio

nOthe

r

Strategies employed over past 12 months to improve competitivenessProportion of firms*

0

25

50

% %

* Multiple responses allowed; will not sum to 100%

Source: NAB Quarterly SME Survey

In the September Quarter SME Survey, we asked firms whether they had employed any newstrategies over the past 12 months in an attempt to improve competitiveness in the market.The results show that more than half of all respondents developed or improved their websitesand launched new products to try to strengthen their position among their competitors (seeGraph). It is also evident that a larger share of firms employed online marketing strategies thanoffline advertising strategies a possible sign that internet marketing may be becoming moremainstream than more traditional forms of advertising. Only a relatively small proportion ofrespondents either moved or opened new locations to try to improved competitiveness.

4


5/12

Analysis (cont.)

Sales still the most constraining factor on output

Constraints on current output (% of firms)

10

20

30

40

50

60

70

2006 2007 2008 2009 2010 2011 2012

Sales & orders Labour

10

20

30

40

50

60

70

2006 2007 2008 2009 2010 2011 2012

Premises & plant Materials

Sales & orders remain the most constraining factor on the output of SMEs in the Septemberquarter consistent with very weak forward orders. SMEs reported a slight pick up in thesignificance of availability of suitable labour as a constraining factor on output, but it remainsrelatively low by historical standards (especially relative to pre-GFC levels). The importance ofpremises & plant and materials as constraints fell slightly and remained low, which was broadlysimilar to those of larger firms.

Profitability constrained by a lack of demand; interest rates and lack ofcapacity not all that concerning

Main constraint on profitability in next 12 months (% of firms)

0

10

20

30

0

50

60

2006 2007 2008 2009 2010 2011 2012

Inadequate capital capacity DemandAll other

0

10

20

30

0

50

60

2006 2007 2008 2009 2010 2011 2012

Interest rates Availability of suitable labourWage costs

In the September quarter, lack of demand remained the most significant constraint on SMEsfuture profitability (over the next 12 months); while there has been a gradual increase in theproportion of firms reporting demand as a significant constraint over the past three years, farfewer firms reported it as significant compared to during the post-GFC period. Consistent witha string of RBA rate cuts over the past year as well as the expectation that monetary policy willremain accommodative for some time to come, interest rates have become increasingly lessconstraining and are currently of little concern for SMEs. Within all other constraints, taxation& government became slightly less of a concern for SMEs perhaps suggesting that theimpact of the carbon tax on SMEs was not as bad as initially feared.

5


6/12

Analysis (cont.)

Demand continues to be the key driver of trading performance

Main reason for improvement in trading performance (net balance)

0

10

20

30

40

50

60

70

06 07 08 09 10 11 12

Demand Competi tionFinance

0

10

20

30

0

50

60

70

06 07 08 09 10 11 12

Int. rates Wage & jobs growth

Ex. rates

0

10

0

30

0

0

0

70

06 07 08 09 10 11 12

Fuel Tax & govt. pol icyOther

Consumer demand remained the most influential driver of improved trading performance in theSeptember quarter, with the proportion of firms nominating this constraint little changed fromthe June quarter. Other reasons as a contributing factor to improved trading increased insignificance in the quarter and remained significant overall; the significance of this factorlargely reflected seasonal and company specific factors. Tax & government policy appeared tohave provided less support to trading performance in the September quarter, which may reflectsome unwinding of government carbon tax compensation payments provided by thegovernment through May and June.

SMEs constrained by a lack of demand and government policies & taxes

Most significant constraining factors for SMEs (per cent, multiple response)

0

10

20

30

40

50

III IV I II III IV I II III

2010 2011 2012

Demand Cash FlowGlobal eco uncertainty

0

10

20

30

40

50


2010 2011 2012

Credit Interest ratesStaffing

0

10

20

30

40

50


2010 2011 2012

Tax & govt. policy Other

Demand became the most significant constraining factor on the ability of a majority of SMEs tomake longer term decisions, though it was slightly less constraining than in the previousquarter, which is consistent with a slight improvement in trading conditions. Tax & governmentpolicy also declined in importance as a constraining factor, which may reflect some relief aboutthe implications of the impacts of carbon tax not being as significant as initially feared. SMEsdo not appear to have been very constrained by interest rates or the availability of credit, whichcontinued to trend lower.

6


7/12

Industry and State analysis

Property most confident; health & manufacturing pessimistic

Business confidence (net balance, s.a.)

40

30

20

10

0

10

20

30

40

06 07 08 09 10 11 12

Manuf Cons tnRetail

40

30

20

10

0

10

20

30

40

06 07 08 09 10 11 12

Wsale TranspFinance

-40

-30

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Business Property

Accom, cafes & rest Health

Business confidence improved across all industries in the September quarter, with the exceptionof transport & utilities, where it was marginally lower. The most significant improvement inconfidence was in wholesale (up 15 to -6 points), finance services (up 14) and property services(up 13). Confidence was strongest in property services (+15) followed by finance services (+4)and accommodation, cafes & restaurants (+3), while it was weakest in health services (-12) possibly reflecting some anticipation of a pull back in government funding for this industry andmanufacturing (-10).

Business confidence strengthens across all mainland states;WA most upbeat

Business confidence (net balance, s.a.)

-30

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Aust ralia NSW

-30

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Aust ralia VIC QLD

-30

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Australia SA WA

Business confidence improved across all mainland states in the September quarter, after fallingacross all states in the June quarter. The most significant improvements occurred in SA (up 13 to-3 points), Victoria (up 12) and NSW (up 11), while Queensland and WA reported only marginalimprovements. The overall level of SME confidence was broadly similar across most states confidence was -3 in NSW, Queensland and SA, and -2 in Victoria while it was a little strongerin WA (+2).

7


8/12

Industry and State analysis (cont.)

Conditions strongest in health, finance and transport;weakest in wholesale, retail and construction

Business conditions (net balance, s.a.)

40

20

0

20

40

06 07 08 09 10 11 12

Manuf Cons tn

Retail

40

20

0

20

40

06 07 08 09 10 11 12

Wsale Transp

Finance

-40

-20

0

20

40

06 07 08 09 10 11 12

Business Property


Business conditions improved across most industries in the September quarter, with theexception of accommodation, cafes & restaurants, where they weakened marginally, andbusiness services, where they were unchanged. The biggest pick up in activity in the quarter wasin manufacturing (up 15 to -4 points), property services (up 14) and transport (up 12). There aresome signs that the property market may be beginning to strengthen on the back of lowerborrowing rates, which may have benefited the property sector in the September quarter, whiletransporters may have benefited indirectly from the governments compensation payments tohouseholds in May and June. The strongest performing industries in the quarter were healthservices (+16), followed by finance (+9) and transport (+7), while conditions were weakest inwholesale (-16), retail (-14) and construction (-12).

Conditions fairly subdued across states but performing well in WABusiness conditions (net balance, s.a.)

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Aust ralia NSW

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Australia VIC QLD

-20

-10

0

10

20

30

40

06 07 08 09 10 11 12

Australia SA WA

Business conditions improved across all states in the September quarter, though remained welldown on levels reported in late 2009. The most notable improvements in the quarter were in SA(up 12 to -2 points) and WA (up 10). Business conditions in WA have tended to outperform theother states over 2012, suggesting that the strength in the mining sector may be provided flow onbenefits to SMEs in the region. In levels terms, conditions of SMEs in WA (9) were strongest,while conditions were weakest in NSW (-8) and Queensland (-6).

8


9/12

Industry and State analysis (cont.)

Cash flows strongest in health; very weak in manufacturing

Cash flow (net balance, n.s.a.)

-40

-20

0

20

40

IV I II III IV I II III IV I II III

2010 2011 2012

Manuf Constn

Retail

-40

-20

0

20

40


2010 2011 2012

Wsale Transp

Finance

-40

-20

0

20

40


2010 2011 2012

Business Property


Cash flows (not seasonally adjusted) improved significantly in health services more thanunwinding a heavy fall in the previous quarter while they were also up solidly in propertyservices and accommodation, cafes & restaurants. In contrast, cash flows deteriorated inmanufacturing, where they are now weakest, and transport. Cash flows were also quite poor inconstruction, retail and wholesale, while they were strongest in health services, accommodation,cafes & restaurants and finance services.

Cash flows improve in all states; strongest in WA

Cash flow (net balance, n.s.a.)

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Aust ralia NSW

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Aust ralia VIC QLD

-30

-20

-10

0

10

20

30

40


2010 2011 2012

Aust ralia SA WA

Cash flows improved across all states in the quarter, after falling across all states in the previousquarter, with the most marked increases occurring in WA and Queensland, where the cash flowsindex was highest (and positive). In contrast, the cash flows index was lowest in NSW and SA.

9


10/12

Firm size analysis

Confidence and conditions pick up solidly, albeit from a low base

-30

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Business confidence (net bal., s.a.)

-30

-20

-10

0

10

20

30

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Business conditions (net bal., s.a.)

In the September quarter, business confidence improved solidly for mid-tier firms ($3-5m p.a.)and high-tier firms ($5-10m p.a.), while it was modestly better for low-tier firms ($2-3m p.a.).Consistent with the broad-based improvement in sentiment in the quarter, business conditionsalso strengthened across all SMEs. In levels terms, conditions were weakest for low-tier firms despite being the most confident SMEs while conditions of mid-tier and high-tier firms werestrongest and broadly similar. The overall pick up in SME conditions fundamentally reflectedimprovements in profitability and especially employment conditions.

Trading conditions & profitability strengthen across SMEs

-20

-10

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Trading conditions (net bal., s.a.)

-20

-10

0

10

20

30

40

50

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Profitability (net bal., s.a.)

All firm sizes experienced a modest strengthening in trading conditions in the Septemberquarter, though the individual increases were not sufficient to offset falls in the previousquarter. In levels terms, conditions remained weakest for low-tier firms, while they were againleast subdued for high-tier firms. Profitability improved modestly across all firm sizes in thequarter, and remain at broadly similar levels. More importantly, profitability of SMEs (all levels)was only marginally above GFC levels.

10


11/12

Firm size analysis (cont.)

Employment conditions and cash flows rebound for low-tier and high-tierfirms, more than unwinding heavy falls in the previous quarter

-20

-15

-10

-5

0

5

10

15

20

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Employment (net bal., s.a.)

-20

-15

-10

-5

0

5

10

15

20

IV I II III IV I II III IV I II III2009 2010 2011 2012

Low Mid High

Cash flow (net bal.)

Employment conditions rebounded for low-tier and high-tier SMEs, after falling heavily in theJune quarter, while they were little changed for mid-tier firms. In levels terms, employmentconditions were weakest for low-tier firms, and strongest for high-tier firms. Cash flowsimproved from worryingly low levels for low-tier and high-tier firms, after deteriorating heavily inthe previous quarter. In levels terms, cash flows were strongest (and positive) for high-tierfirms, while they were weakest for mid-tier and low-tier firms.

Capacity utilisation falls heavily for mid-tier firms and relatively lowacross all SME sizes; forward orders very weak for high-tier SMEs

76

77

78

79

80

81

82

83

84

85

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Capacity utilisation (per cent, s.a.)

-30

-20

-10

0

10

20

2006 2007 2008 2009 2010 2011 2012

Low Mid High

Forward orders (net bal., s.a.)

Capacity utilisation fell sharply for mid-tier firms, bringing it more into line with utilised capacityof other SMEs. Utilised capacity picked up a touch for mid-tier firms, while it was little changedat a low level for low-tier firms. Forward orders deteriorated heavily for high-tier firms, wherethey were weakest, while they were a little weaker for mid-tier firms. In contrast, forward ordersimproved moderately for low-tier firms albeit after sharp falls last quarter. High-tier firms andnow reporting the lowest forward orders.

11


12/12

Macroeconomic, Industry & Markets ResearchAustralia

Alan Oster Group Chief Economist +(61 3) 8634 2927

Jacqui Brand Personal Assistant +(61 3) 8634 2181

Rob Brooker Head of Australian Economics & Commodities +(61 3) 8634 1663

Alexandra Knight Economist Australia +(61 3) 9208 8035Michael Creed Economist Agribusiness +(61 3) 8634 3470

Dean Pearson Head of Industry Analysis +(61 3) 8634 2331

Gerard Burg Economist Industry Analysis +(61 3) 8634 2788

Robert De Iure Economist Property +(61 3) 8634 4611

Brien McDonald Economist Industry Analysis & Risk Metrics +(61 3) 8634 3837

Tom Taylor Head of International Economics +(61 3) 8634 1883

John Sharma Economist Sovereign Risk +(61 3) 8634 4514

Tony Kelly Economist International +(61 3) 9208 5049James Glenn Economist Asia +(61 3) 9208 8129

Global Markets Research - Wholesale BankingPeter Jolly Head of Markets Research +(61 2) 9237 1406

Robert Henderson Chief Economist Markets - Australia +(61 2) 9237 1836

Spiros Papadopoulos Senior Economist Markets +(61 3) 8641 0978David de Garis Senior Economist Markets +(61 3) 8641 3045New Zealand

Tony Alexander Chief Economist BNZ +(64 4)474 6744Stephen Toplis Head of Research, NZ +(64 4) 474 6905Craig Ebert Senior Economist, NZ +(64 4) 474 6799Doug Steel Markets Economist, NZ +(64 4) 474 6923

London

Nick Parsons Head of Research, UK/Europe & Global Head of FX Strategy +(44 20) 7710 2993

Tom Vosa Head of Market Economics UK/Europe +(44 20) 7710 1573Gavin Friend Markets Strategist UK/Europe +(44 20) 7710 2155

Foreign Exchange Fixed Interest/Derivatives

Sydney +800 9295 1100 +(61 2) 9295 1166

Melbourne +800 842 3301 +(61 3) 9277 3321

Wellington +800 64 642 222 +800 64 644 464

London +800 747 4615 +(44 20) 7796 4761

New York +1 800 125 602 +1877 377 5480

Singapore +(65) 338 0019 +(65) 338 1789

DISCLAIMER: [While care has been taken in preparing this material,] National Australia Bank Limited (ABN 12 004 044 937) does not warrant or represent that the information,recommendations, opinions or conclusions contained in this document (Information) are accurate, reliable, complete or current. The Information has been prepared for dissemination toprofessional investors for information purposes only and any statements as to past performance do not represent future performance. The Information does not purport to contain all mattersrelevant to any particular investment or financial instrument and all statements as to future matt ers are not guaranteed to be accurate. In all cases, anyone proposing to rely on or use theInformation should independently verify and check the accuracy, completeness, reliabilit y and suitability of the Information and should obtain independent and specific advice fr om appropriateprofessionals or experts.To the extent permissible by law, the National shall not be liable for any errors, omissions, defects or misrepresentations in the Information or for any loss or damage suffered by persons who

use or rely on such Information (including by reasons of negligence, negligent misstatement or otherwise). If any law prohibits the exclusion of such liability, the National limits its liability tothe re-supply of the Information, provided that such limitation is permitted by law and is fai r and reasonable. The National, its affiliates and employees may hold a position or act as a pricemaker in the financial instruments of any issuer discussed within this document or act as an underwriter, placement agent, adviser or lender to such issuer.

UK DISCLAIMER: So far as the law and the FSA Rules allow, National Australia Bank Limited (the Bank) disclaims any warranty or representation as to the accuracy or reliability of theinformation and statements in this document. The Bank will not be liable (whether in negligence or otherwise) for any loss or damage suffered from relying on this document. This documentdoes not purport to contain all relevant information. Recipients should not rely on its contents but should make their own assessment and seek professional advice relevant to theircircumstances. The Bank may have proprietary positions in the products described in this document. This document is for information purposes only, is not intended as an offer or solicitationnor is it the intention of the Bank to create legal relations on the basis of the information contained in it. No part of this document may be reproduced without the prior permission of the Bank.This document is intended for Investment Pr ofessionals (as such term is defined in The Financial Services and Markets Act 2000 (Financial Pr omotion) Order 2001) and should not be passedto any other person who would be defined as a private customer by the rules of the Financial Services Authority (FSA) in the UK or to any person who may not have experience of suchmatters. Issued by National Australia Bank Limited A.C.N. 004 044 937, 88 Wood Street, London EC2V 7QQ. Registered in England BR1924. Head Office: 500 Bourke Street, Melbourne,Victoria. Incorporated with limited liability in the state of Victoria, Australia. Regulated by the FSA in the UK.

U.S DISCLAIMER: If this document is distributed in the United States, such distribution is by nabSecurities, LLC. This document is not intended as an offer or solicitation for the purchase orsale of any securities, financial instrument or product or to provide financial services. It is not the intention of nabSecurities to create legal relations on the basis of information provided herein.

NEW ZEALAND DISCLAIMER: This publication has been provided for general information only. Although every effort has been made t o ensure this publication is accurate the contentsshould not be relied upon or used as a basis for entering into any products described in this publication. To the extent that any information or recommendations in this publication constitutefinancial advice, they do not take into account any persons particular financial situation or goals. Bank of New Zealand strongly recommends readers seek independent legal/financial adviceprior to acting in relation to any of the matters discussed in this publication. Neither Bank of New Zealand nor any person involved in this publication accepts any liability for any loss ordamage whatsoever may directly or indirectly result from any advice, opinion, information, representation or omission, whether negligent or otherwise, contained in this publication. NationalAustralian Bank Limited is not a registered bank in New Zealand.

Documents

Press Release SME (5)