China Exit or Co-Investment Opportunities for German PE Investors

• 1. BangkokBVKBeijing Boston ChennaiChina Exit or Co-Investment Opportunities for German PE InvestorsChicago London Los Angeles MelbourneMilanNovember 26, 2013Mumbai Munich New Delhi New York Paris So Paolo San Francisco Seoul Shanghai SingaporeL.E.K. Consulting GmbH, Neuturmstr. 5, 80331 Mnchen T: +49 (0) 89 922005-0 F: +49 (0) 89 922005-20 www.lek.comSydney Tokyo Wroclaw 2013 L.E.K. Consulting LLC. All rights reserved.

2. AgendaAgenda Introduction Macroeconomic backdrop Co-investments and ExitsCONFIDENTIAL 1 3. IntroductionL.E.K. Consulting is a leading global strategy consulting firm OverviewGlobal NetworkFounded in 1983, with a presence in Germany since 1988 and China since 1998San Francisco Chicago Los AngelesBoston New YorkLondon Paris MilanWroclaw MunichSeoulBeijing New Delhi Mumbai ChennaiAssists senior executives to consistently make better decisions, deliver improved business performance and create greater shareholder returns TokyoShanghai BangkokWe have advised German Mittelstands clients on development and exit in China in the context of growth strategy and successionSingaporeSo Paolo*Areas of expertise include growth strategy, transaction support and value enhancementSydney MelbourneOur Chinese colleagues advise clients at multinational companies in and outside of China, Chinese companies, private equity firms, and government entitiesCONFIDENTIAL 2 4. IntroductionIntroduction This document summarizes results of a study conducted by L.E.K. Munich and Shanghai The goals of the study are to-Understand developments in Chinese equity investments in both the domestic China / pan-Asian market and cross-border investments between China and Germany / Europe-Identify trends in likely future investment behaviour and its drivers Defining success factors both for Chinese and German investors / corporates as to how to benefit from the potential opportunities of cross-border investments and co-operation The study is based on-Discussions with 50 representatives of senior investment and corporate professionals in Shanghai, Beijing and Hong Kong-Project experience Extensive secondary researchCONFIDENTIAL 3 5. AgendaAgenda Introduction Macroeconomic backdrop Co-investments and ExitsCONFIDENTIAL 4 6. Macroeconomic backdropWhile Germanys population is expected to continue to decrease, Chinas population is forecast to continue to grow at 0.5% p.a. Chinas population (2005-2018f)Germany population (2005-2018f) Billions of peopleForecastCAGR% (2005-12) (2012-18f)Billions of peopleForecastCAGR% (2005-12) (2012-18f)1.41.4 (0.1)(0.1)0.51.21.21.01.00.80.80.60.60.40.40.20.20.00.50.0 200506 07 08 09 10 11 12f 13f 14f 15f 16f 17f 18f200506 07 08 09 10 11 12f 13f 14f 15f 16f 17f 18fSource: IMFCONFIDENTIAL 5 7. Macroeconomic backdropThe increasing urbanisation and prosperity of the Chinese population will create massive middle-class demand by 2020 Age distribution (2012E)Share of rural population (2005-15)Percent 100921Percent65+10080China8060746640Germany6015-6440 20201317Germany0-14China002005 06 07 08 09 10 11 12 13 14 15Share of urban households by annual household income in China* Percent 100147m226m 0126PPT (2005-10) (2010-20)328m62451Mainstream (USD16k-USD34k) 54536Value (USD6k-USD16k)Affluent (>USD34k)80 6063 8240 2036 100200072010Poor (