Makor Securities Makor Securities London Ltd (Paris Rep. Office) 336 rue Saint Honore 75001 Paris, FRANCE +33 1 42 33 02 05 Makor Capital Markets Makor Securities London Ltd (Geneva Rep Office) 27 rue de la Croix-d’Or 1204 Geneve, SWITERLAND +41 223 106 916 Makor Capital Rogovin Tower Menachem Begin 11 52689 Ramat Gan, ISRAEL +972 3 545 3777 Makor Securities London Ltd 7/8 Savile Row 2nd Floor London W1S 3PE, ENGLAND +44 207 290 5777 2 Research Disclaimer Valuation - following 1Q16 results we are updating our FY16 projections. We maintain our forecast for revenue of $556 million (street- $557 million) and slightly lower our adjusted Ebitda forecast to $138 million (down from $140 million), and our EPS to $2.50 (down from $2.56), reflecting the lower end of management’s guided range. We maintain our $43 price target which is based on 10.5x EV/EBITDA 2016E indicating approx. 13% upside from current market price. We believe that if signs of improvement start to emerge in the U.S plant and growth in the U.S accelerates as expected, there is room for significant upside in the share. FX might also play as a tailwind this year. Therefore, we maintain outperform rating as we continue to believe in CSTE strong fundamentals, its leadership position in the expanding quartz countertop market, and its multi-year growth potential and improved profitability. Risks – (1) U.S sales continue to decelerate on the back of increased competition or if for any reason the partnership with IKEA comes to an end; (2) continued higher than expected start -up cost in the U.S plant and lack of success to return to full operational efficiency; (3) increased competition especially from low cost manufactures; (4) fluctuations in foreign currency and (5) an increase in silicosis claims and/or other legal issues which will expose the company to material payments.