LUXURY MARKET, INVESTMENT OPPORTUNITIES & TRENDS BETWEEN EUROPE & ASIA

LUXURY MARKET , KEY FACTS & FIGURES

BEST AIRLINES ARE ASIAN

According to World Airlines Awards, 6 of the top 10 best airlines are Asian

3

Singapore Airlines Suites, N1 worldwide Other top Asian Airlines: ANA All Nipon (Japan), Asiana Airlines (South Korea), Cathay Pacific (Hong Kong), Thai Airline (Thailand), Malaysia Airlines

Source: World Airlines Awards, Business Insider

HIGH-END HOTEL BOOM IS IN ASIA

Since 2014, there are more Starwood hotels on China’s Hainan Island than in the Hawaiian Islands

4

Mandarin Oriental, Hainan, China

Sources: GCF Research & Analysis, Top hotels analytics

UNIQUE ARCHITECTURAL EXPERIENCE ARE IN ASIA

2011 Design Award for the Marina Bay Sand in Singapore with 2,560 hotel rooms, 74 000 m² of retail arcade, & a 150 m outdoor pool

5

Source: Design Awards

UNIQUE RETAIL EXPRESSION IS IN ASIA (1/2)

LOUIS VUITTON opened its first “Maison” in mainland China in Shanghai on July 2012

6

Louis Vuitton Singapore, opened in 2011

Louis Vuitton Shanghai, opened in 2012

UNIQUE RETAIL EXPRESSION IS IN ASIA (2/2)

7 of the 10 largest shopping malls in the world are in Asia!

7

Hanjie Wanda Square shopping mall, Wuhan, China

GROWING TREND OF EURO-ASIAN BRANDS

AKAR DE NISSIM, Luxury furniture & accessories Asian Lifestyle by French design

8

Source: GCF Research & Analysis

GROWING TREND OF ASIAN SUCCESSFUL BRANDS

First Chinese brand to be invited to the highly prestigious Antique Dealers Biennial in Paris: WALLACE CHAN brand

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Fine Jewellery Designer: Wallace CHAN

Source: GCF Research & Analysis, The Jewellery editor

GROWING TREND OF EURO-ASIAN BRANDS

Luxury Timepieces designed by Asian founders & manufactured in Switzerland, center for the finest Watchmaking

10

Source: GCF Research & Analysis

GROWING TREND OF ASIAN SUCCESSFUL BRANDS

HERBORIST: The first Chinese Cosmetics brand to succeed in Asia & in Europe, Reviving the Chinese medical herb culture in 250 European points of sale

11

Source: GCF Research & Analysis

CHINA IS A LUXURY « GIANT »

China (Mainland + HK) overtook France, the UK, Italy and Japan as the 2nd biggest luxury market in the world after the US Personal Luxury Goods Ranking by Area in 2013e Growth 2012-2013e

EUR Bn 70

15% 10%

60

10% 12

50

4%

4%

4% 3%

5%

3%

40 -2% 30

5%

1% 0%

62,5

20

-12%

10

17,2

-5% -10% 16,1

15,3

15,1

12,1

China

France

UK

9,9

8,3

7,7

5,8

Hong Kong

Russia

0

-15% US

Japan

Italy

Germany Korea

 2013 Chinese consumers accounted for 30% of global luxury market (vs 20% in 2012)

Source: Bain & Co.

TOP EDUCATION DESTINATIONS

80% of Asian Parents wish to send their children study overseas

Top Education Destinations 50% 40% 30% 13 20% 10% 0%

 US and UK are the top 2 favourite education destinations  Switzerland is the fastest grower

Source: HUNRUN Research 2014

WINGS & WATER

Today, 300 jets and 200 luxury yachts in Greater China Expect to grow to 500 within 5 years

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GULFSTREAM

SUNSEEKER

Source: HUNRUN Research 2014

BOMBARDIER

DASSAULT

AZIMUT

CHINA: WORLD N1 FOR SELF-MADE MILLIONAIRES

Known Wealth in 2013: Globally: 1.867 USD Billionaires (+28 % vs 2012) China: 358 USD Billionaires (+36 % vs 2012)

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Hidden Wealth: Globally: 4000 USD Billionaires China: 700 USD Billionaires

 Size of market

  

USD billionaires globally: 4500 pax 63 years USD billionaires China: 750 pax 53 years Dollar millionaires: 2,8 M pax 39 years

Source: HUNRUN Research 2014

WHERE MILLIONAIRES IN DOLLARS CHOOSE TO LIVE

41% live in 1st tier cities (Beijing, Shanghai, Guangzhou and Shenzhen) 33% live in 2nd tier cities

Geographical Distribution By City

Geographical Distribution By Region

200000

150000

South China 17%

100000

Source: HUNRUN Research 2014

16

East China 43%

50000

0

Others 16%

North China 24%

TOP TRAVEL DESTINATIONS

Average travel duration: 7,5 days/month for millionaires 2 to 3 trips overseas a year

2013

2012

1

Australia ↑

1

France

2

France

2

US

3

Dubai ↑

3

Singapore

4

Switzerland

4

Switzerland

5

Maldives ↑

5

UK

6

US

6

Italy

7

Japan

7

Australia

8

Germany ↑

8

Dubai

9

Singapore

9

Germany

10

New Zealand

10

Maldives

Source: HUNRUN Research 2014

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FROM ULTRA TO AFFORDABLE LUXURY

The slow down of high end luxury will continue in 2014, but affordable luxury is the growing segment. China luxury market by category (2012) 100% 90% 80% 70% 60% 50%

40% 30%

Accessories Women's wear Shoes Jewellery Menswear Leather goods Cosmetics, Perfume & Personal Care

20% 10%

Watches

0% China Mainland



Since Oct 2012: new gifts regulation  - 25% spending in High end Luxury gifts 

Red wine & watches are gifts of choice within RMB 20 thousands an item



Travel vouchers & healthcare products are fastest growing gifting categories

Source: Bain & Co. Greenbook

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LUXURY MARKET , THE KEY DRIVERS

CUSTOMERS TARGETED – HNWI*

AuM Historical CAGR (2007-2016)

+9,4% HNWI in Asia - Pacific (~3,7M) in 2012 vs +7,5% in Europe (3,4 M) Emerging Asian HNWI asset growth = +13% CAGR 2012-2016 Global HNWI in 2012 Historical Vs. Forecast CAGR 25% 20%

15% 10%

Japan 1,5 M

5%

USA 5,2 M

Europe 3,3 M

MEA 0,5 M

0% -5%

China 1,1 M

Emerging Asia 0,8 M

0%

2%

4%

6%

8%

India 0,2 M

20

Latin America 0,6 M

10%

12%

14%

16%

18%

20%

Asset under Management Forecast CAGR (2012 – 2016)

 Wealth of HNWI in Asia Pacific = +33% between 2012 and 2015 (from USD 12 T to 16 T)  China will contribute to 60% of the growth in wealth from 2011-2016  Asian tourists account for between 35 and 60% of luxury sales in Europe  European brands = 70% of the global luxury goods markets  Among the top 25 worldwide luxury brands, 18 are from Europe (mainly France & Italy) HNWI = High Net Worth Individual ; assets > USD 1 M Source: GCF Research & Analysis, Asia Pacific Wealth Report 2013, World Federation of Exchange, World Wealth Report 2013

HOUSEHOLD SPENDING POWER IN MEGACITIES*

Main cities in booming Markets are catching up in household spending power Middle Income Households in China and India x4 between 2011-2025 Number of households (in Mn) with annual incomes >EUR 15 K** in megacities in 2011 & 2025e China: Beijing, Shanghai

16,1

3,3

India: Dehli, Mumbai, Kolkata

8,0

2,3

21

6,1 5,2

France: Paris

5,9 5,2

Germany: Rhein-Ruhr

0

5 2025e

10 2011

15

20

 China : Rising Middle Class influence → Market opportunity for Affordable luxury

  

Chinese Middle class growth fast: 2/3 of population in 2012, 3/4 of population in 2022 Amount urban households, upper middle-class (incomes of $16-34K) will growth from 14% in 2002 to 54% in 2022 Sophistication of the population: 34% have bachelor degree & 24% speak English

* Megacity: Population > 10 Mn ** In PPP term Source: GCF Research & Analysis, McKinsey, Morgan Stanley, The Diplomat

RISING HOUSEHOLD SPENDING IN CHINA

Shanghai & Beijing will have about 16 M middle income households (>USD 20K/y) in 2025: x5 vs 2011

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Source: GCF Research & Analysis, The Diplomat

THE M&A TRENDS

COMPARABLE MULTIPLES

*Figures: 2014 April LTM

Company LVMH (FRA) L’OREAL (FRA) RICHEMONT (SWITZ) KERING (FRA) ESTEE LAUDER (USA) LUXOTTICA (ITA) RALPH LAUREN (USA) HERMES (FRA) PRADA (ITA) TIFFANY (USA)

Business Overview

Turnover* (Bn EUR)

Turnover Growth (%)

EBITDA Margin* (%)

Apparel, Accessories & Luxury goods

29

0,34%

24%

71

2,4x

12,2x

10,9x

Cosmetics

23

2,4%

21%

68

3,2x

16x

13,5x

13,4

29,%

27%

49

3,7x

13,5x

11,1x

9,7

0,1%

26%

30

2,2x

10,5x

11,8x

10,4

31,5%

18%

26

2,5x

13,6x

12,5x

9,5

29,7%

20%

29

3,0x

15,3x

14,8x

7,2

36,4%

18%

13

1,8x

9,74x

10,6x

3,8

1,4%

37%

25

6,8x

20,6x

18,2x

4,6

32,6%

33%

19

4,2x

13,2x

16,6x

4,0

33,3%

23%

12

2,9x

12,2x

10,1x

Apparel, Accessories & Luxury goods Apparel, Accessories & Luxury goods High end Cosmetics Apparel, Accessories & Luxury goods Apparel, Accessories & Luxury goods Apparel, Accessories & Luxury goods Apparel, Accessories & Luxury goods Fine Jewellery

EV* EV/ EV/ EV/ (Bn EBITDA* EBITDA Sales* EUR) 2013 2012

 Leading Luxury players are US & Europe based  Average +6,3% growth of 2013 EV/EBITDA multiples vs. 2012  Luxury global market to outperform global market:  S&P 5-year annual return of the top 80 top Luxury companies: +29%  vs. 12% the Global general Market (S&P 1200) & vs. +16% in Global F&B Market

Source: GCF Research & Analysis, Factset, S&P, Yahoo FInance

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TRANSACTION MULTIPLES

Date

Acquirer

Target

Description

Deal Value

Stake Sales EBITDA EV/ (%) (M EUR) Margin EBITDA

(M EUR)

Jan 2014

L'OREAL (FRA)

MAGIC HOLDINGS (Hong Kong)

Aug 2013

LVMH (FRA)

LORO PIANA (ITA)

May 2013 Apr 2013

SICHUAN LESSIN DPT STORES (China) KERING (FRA)

Cosmetics, skincare and facial masks Apparel, accessories and luxury goods

620

100,0%

160

15,3%

3,8x

2 000

80,0%

490

20,0%

25,5x

FEDONE (ITA)

Cashmere maker

8,5

1,8%

280

15%

11,2x

POMELLATO (ITA)

Fine jewellery

300

81%

146

17%

15x

 Consolidation trend: individual brands are bought up by large luxury groups  Luxury brands owned by entrepreneur / family = 30% in 2011 vs 70% in 1995  As of S1 2013: 31 deals worth ~EUR 750 M globally in the luxury sector  vs. 52 deals worth EUR 1,2 Bn on all of 2012  20% of these 31 deals are Asian (vs. 15% in 2012)

Source: GCF Research & Analysis, Mergermarkets, Forbes, Capital IQ, Comité Colbert

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ASIA TO EUROPE M&A DEALS BOOM

Asian growing appetite for luxury western brands (50% of luxury total revenue expected in 2025) coupled with the critical need for European luxury brands to enter the fast growing Asian markets offers strong potential synergies.

26 June 2013 SUNSEEKER (UK) acquired by DALIAN WANDA (CN)

Feb 2013 SONIA RYKIEL (FR) acquired by FUNG BRANDS (HK)

Source: GCF Research & Analysis,

May 2013 CLUB MED (CN)) acquired by FOSUN (CN)

2007 MG (UK) acquired by SAIC MOTOR (CN)

May 2013 CORUM (CH)) acquired by FCHINA HAIDIAN (CN)

April 2012 GIVES & HAWKES (UK) acquired by TRINITY (HK)

INVESTMENT LANDSCAPE

Despite the apparent dominance of the MNCs, several brands are still privately-owned: 3 type of potential targets 1. Independent “house” with international recognition

2. “Sleeping” stars

27 PARFUMS BERDOUES Since 1902

LUBINS (Perfume) Since 1798

AUBERCY Since 1935

AURICOSTE (Horlogerie) Since 1854

3. New luxury brands with innovative business model & unique competitive edge

RUBY (Helmets) Since 2007

VICOMTE A Since 2005

Source: GCF Research & Analysis,

PIERRE HERME since1998

PAIN DE SUCRE since 1985

CORTHAY since 1990

FRAGMENTED & REGIONAL INDUSTRY

In France, the luxury industry employs more than 200,000 people in more than 40,000 companies Key luxury manufacturers and subcontractors in France

28

Source: GCF Research & Analysis, Comité Colbert/BCG

ASIAN APPETITE FOR EXCEPTIONAL WINE ESTATES

Since 2008: >30 French Chateaux acquired by Chinese investors & ~ 20 deals are currently in the pipeline  Château de Gevrey-Chambertain (Bourgogne)  Estimated price before transaction: ~EUR 3,5M (castle + 2 Ha of vineyards)  Purchase price in August 2012 EUR 8M (~EUR 4M/Ha) + 130%

29

Gevrey-Chambertain

 Château Les Carmes Haut Brion (Bordeaux)  Estimated price before transaction: ~EUR 10M (castle + 5 Ha of vineyards)  Purchase price in January 2011 EUR 18M (~EUR 3M/Ha) + 80%

Les Carmes Haut Brion Source: GCF Research & Analysis, BBC

CHATEAU LAGREZETTE = UNIQUE WINE ESTATE & WINES

The "Original MALBEC” noted 95/100 by Robert Parker in 2005 500 years history, 100 ha of premium vineyards The wine of the kings of France!

30

 Built in the 15th century, LAGREZETTE is classified as an Historical Monument with Renaissance decoration and « Jardins à la Française »

Source: GCF Research & Analysis

CHATEAU D’ESCLANS = THE WORLD’S BEST ROSÉ

“This is arguably the best Rosé on earth!” James SUCKLING, world famous wine critic

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 Rebuilt in the 19th century, the domain is located in French Provence and is surrounded by 267 ha of lands

ABOUT GEREJE Corporate Finance

We are a Euro-Asian M&A firm with a “boutique” culture providing both strategic and financial advisory services ensuring excellence of execution thanks to our 100% in house offices and team

Origination & Execution  Paris  Singapore 32

Origination  Bangkok, Berlin  Shanghai, Mumbai

25 multi-cultural professionals between Europe and Asia acting as a “single” team  7 Management Committee members leading the company  10 Research & Analysis team members & 8 Senior Advisors bringing sector, country and financial expertise

OUR CROSS BORDER TEAM

Fabrice LOMBARDO

Founder & CEO, based in Paris  20 years’ cross border experience working with Asia (ASEAN, India, China)  Passionate entrepreuneur, he founded GEREJE in 2007 at 35 years old  Specific expertise in the Buy side / Joint Venture and Fund Raising transactions between Europe & Asia  Advised both corporates (small, mid cap and MNCs such as BEL, DANONE or LACTALIS) as well as financial investors (family offices, HNWI or PE funds)  External teacher at ESSEC  BBA at Oxford Brookes Univ, Grenoble Business School, Exec MBA at ESSEC 33

Thierry SMADJA

Managing Director & Co-Founder, based in Singapore  20 years’ experience in finance and industry  Started in the M&A industry in the mid 90's US by managing the sale process of a OEM multinational manufacturing group to a NYSE listed company  Managed a Swiss Family Office active in private equity activities and lead several transactions of various sizes and industry sectors.  Executive & Shareholder in an ASEAN cosmetics and fragrances distribution group. Joined GEREJE in 2011 post divestment of this investment  IBA in Business Administration from the American University of Paris

OUR TEAM

Stéphane ILIADES, Senior Partner

 20 years’ experience in Bus Dev.  Ex MD of DANONE in India and ex VP

Pisit JEUNGPRADITPHAN, Senior Advisor

 Specific expertise in sell-side transactions  President of CFA Society in Thailand

International for SPOTLESS

 Trade Advisor to the French government.  MBA, INSEAD.

Pierre-André MONTJOVET, Senior Advisor

 11 years’ international experience in M&A  Former Manager at ADM, notably in charge of 

M&A and Strategy Bus. Dev. Director for MOD-ELEC, French high-end electrical appliances producer & Former Bus Dev director-Perle Noire (caviar)

Paul VALIN, Associate Partner

 7 years’ experience in cross border M&A between Europe and Asia.

 Co-leader of a team of 10 analysts across Asia & Europe.

 MSc in Corporate Finance & Financial Engineering, Paris Dauphine.

 MS in Mech. Eng. & Auditor of the CHEDE Antoine ALEMANY, Associate Partner

 7 years’ experience in cross border M&A between Europe and Asia.

 Co-leader of a team of 10 analysts across Asia & Europe.

 MSc in Management, ESCEM Business School.

Anil RAI, Junior Partner

 4 years’ experience in cross border M&A between Europe and Asia

 BBA in Finance, NTU, Singapore

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OUR PROPRIETARY DATABASES OF INVESTORS

We have a direct access and strong relationships with 500+ Private Equity funds, 100+ Family offices and 200+ Private Investors / HNWI

Geographical split

Typology 35

W. Europe 17% France 37%

ASEAN 21% China 13%

Others Asia 13%

HNWI 24% Family Offices 14%

Others 2% PE Funds 55%

OUR PROPRIETARY DATABASES OF CORPORATES

We have established direct and privileged relationships with 6,500+ companies (small, mid cap, MNCs) in Europe and Emerging Asia including 350+ in the luxury industry only Geographical split W. Europe 14% France 33%

ASEAN 38%

China India 8% 8%

Sectors split NewTech 5% Health & Beauty 40%

 Direct access to key shareholders/management of luxury companies mainly in:  Wine & Fine Foods:  Jewelry & Haute Horlogerie  Cosmetics & Fragrances  Apparels, Furniture & Accessories…

Industry & Cleantech 15% 36

F&B 40%

SAMPLE OF GEREJE ASSIGNMENTS

OUR EXCLUSIVE MANDATES Jewellery – Europe based (EV EUR 10 M)

EUR 4.5 M minority stake to boost the development of one of the oldest (>100 years old) European high end jewelry house.

Fragrances – France based (EV EUR 12 M) EUR 2.5 M minority stake to boost the development of one of the most legendary luxury perfumery house (>200 years history)

Haute Horlogerie – Euro-Asia based (EV EUR 3 M) EUR 2 M minority stake to boost the development of the only Asian Swiss-made watch brand designed to target Asian market

Swimwear – Euro Asia based (EV EUR 1.6 M) ~EUR 1 M minority stake to finance the opening of 2 flagships in China and boost the distribution

Furniture & Accessories – Euro-Asia based (EV EUR 15 M) An exclusive luxury / lifestyle brand for furniture & accessories, founded by a French renowned designer based in Asia

High-end cigars – Europe based (EV EUR 2 M) The owner is planning to retire and is looking for a strategic buyer capable to boost the company’s international expansion with a focus on Asia

OTHER INVESTMENT OPPORTUNITIES Premium Alcohol – Europe based Producer of an award winning premium vodka which is distributed in more than 10 countries globally Dermo-cosmetic brand – Europe based EUR 30 M Health& Beauty group formulating, producing and distributing its own brands of premium natural & organic cosmetics and food supplements Accessories – Europe based EUR 5 M renowned brand specialised in handcrafted luxury products such as cabinets, cigar, humidors, watches & jewellry boxes, ashtrays…

Caviar – Europe based The N3 producer of caviar worldwide, The caviar comes from farm sturgeons and is considered as one of the world’s finest. Fashion – Europe based EUR 20 M renowned french fashion house established in the 60’s. The company launhed its own perfume collection.

Fashion– Europe based EUR 15 M fashion brand dedicated to women and children securing 70% of its sales overseas.

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DISCLAIMERS

The information contained in the presentation has been provided collated from publicly available sources or other sources that GCF (GEREJE CORPORATE FINANCE) deems reliable. GCF makes no representation warranty or undertaking, express or implied, and consequently shall not accept any responsibility of any kind whatsoever with respect to the accuracy or completeness of the Information and / or the information contained in it or any further information applied in connection with the matters described in it. This presentation is being distributed solely for the benefit of the persons to whom it is distributed. Consequently, it shall not be shown or given to, copied by or discussed by, in whole or in part, with any other person without the prior written approval of GCF. This Presentation may not be photocopied, reproduced or distributed to others at any time without the prior written consent of GCF. GCF designate the companies, whilst legally they are independent entities, sharing GEREJE corporate identity, logo, documents, working methodology & ethical rules. All GCF offices are working as an integrated group of companies under the governance of an exclusive agreement for the interest of the clients. GCF offices are privately owned and independent structures. GEREJE Advisory Asia Pte Ltd Singapore is formerly known as “Arpels” Advisory Pte ltd. GCF solely offers advisory services in connection with corporate financial transactions or evaluations. In no way whatsoever does GCF itself underwrite, acquire or place any securities, or lend any sums or hold funds on behalf of its clients. GEREJE Advisory Asia & GEREJE Corporate Finance are registered companies with MAS (Monetary Authority of Singapore) and AMF (The France Financial Markets Authority) - ORIAS n° 13004146 – Member of ACIFTE as Conseil en Investissement Financier (Financial Investment Adviser) © Copyright 2014 GEREJE Corporate Finance. All rights reserved