1. GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 M&A opportunities within the distressed economy: Italy 2013 Simona Cucchi, Sergio Finulli © 2013 – Comma 10 for confidential & GGI use only

2. 1. The Eurozone crisis 2. Italian economic outlook 3. Comma10 experience 4. Opportunities within the crisis Index © 2013 – Comma 10

3. GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 © 2013 – Comma 10 Economic downturn  hits the whole Eurozone area, with focus on the Southern regions; signs of weakness also from the core countries. Financial confidence recovery Real economy remains sick. Real GDP growth rate - Source: Eurostat 1. Euro zone crisis – Not over yet Global Financial and Economic Crisis Severe Recession Partial Recovery

4. © 2013 – Comma 10  Italy debt remains quite stable over the years +67% +57% +10% +25% +55% +24% +10% +25% GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 1. The Euro zone crisis – The Public Debt Crisis  dramatic increase in the public debt of most advanced economies. The Government debts are escalating in most EU countries, not only in countries with a history of debt problems but also in countries where the debt level was relatively low before the crisis. Source: Global Finance %

5. Period of macro level financial challenges  Italian deep-rooted strenghts are being overlooked: » Italy is the 8th largest economy and the 8th largest exporter in the world » Italy is the 4th largest economy and the 2nd industrial manufacturing country among the EU economies © 2013 – Comma 10 Source: IMF, 2012 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 2. Italian economic outlook – Where we are now The largest economies and industrial manufacturing countries Source: World Bank, 2012

6. » Italian market: a EUR 1.6 Trillion economy » Export-led economy: EUR 478 Billion of exportations, negligible energy and raw materials, Germany and France as largest export markets » Composition of the internal market: Services (73 %)  Excellent infrastructure system Industry (25%) Leading activity: processing and production of manufactured products Major industries: mechanical industries (cars, motorcycles, machine tools, household appliances ), defense (helicopters, defense systems, light weapons, armored vehicles), chemicals (oil, rubber, pharmaceuticals), electronics “made in Italy” products (textile products, production of clothing and footwear, agri- foodstuffs and design) give a significant contribution to the national wealth, known and appreciated throughout the world Agriculture (2%) » Company size: a few global multinational corporations and a large number of small and medium- sized enterprises (SMEs) © 2013 – Comma 10 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 2. Italian economic outlook – Economy in a nutshell

7. © 2013 – Comma 10 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 2. Italian economic outlook – Focus on SMEs © 2013 – Comma 10 High propensity to entrepreneurship: SMEs represent 99.8 % of enterprises in the non- financial business economy generate approx 60 % of value added within the non-financial business economy key driver for economic growth, innovation, employment and social integration FEATURES: Flexibility Specialization Innovation levels of excellence in many areas filling the gaps left by the large companies Competitiveness based on the agility of the SME sector

8. © 2013 – Comma 10 Opportunities and risks of doing business in Italy: 1)High thecnology products unable to reach the internal market 2)Financial stress 3) Management and generational shift issues Opportunities and risks of doing business in Italy: 1)High thecnology products unable to reach the internal market 2)Financial stress 3) Management and generational shift issues GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 3. Comma 10 experience – Where opportunities rise © 2013 – Comma 10

9. 3. Comma 10 experience - Example The Yacht industry case JV between an affirmed Chinese boat producer, “ the investor”, and an Italian Yacht company, in charge of designing and developing the production. The business idea:  Construction: to take advantage of the high technological content and design of the Italian production of luxury yachts, which is distinguished worldwide for quality and refinement  Sale: to take advantage of the attractiveness of the Italian marine industry to get a front row seat for the allocation of the boats to the international market, more receptive than the national one. After the first experience with 3 yachts, the investor is planning to begin the construction of a cruise ship. Actually, Italy is among the very few countries, all Europeans, who have advanced experience and excellent quality standards for the construction and the assembling of this type of craft. The Yacht industry case JV between an affirmed Chinese boat producer, “ the investor”, and an Italian Yacht company, in charge of designing and developing the production. The business idea:  Construction: to take advantage of the high technological content and design of the Italian production of luxury yachts, which is distinguished worldwide for quality and refinement  Sale: to take advantage of the attractiveness of the Italian marine industry to get a front row seat for the allocation of the boats to the international market, more receptive than the national one. After the first experience with 3 yachts, the investor is planning to begin the construction of a cruise ship. Actually, Italy is among the very few countries, all Europeans, who have advanced experience and excellent quality standards for the construction and the assembling of this type of craft. © 2013 – Comma 10 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 1 Product specialization unable to reach the internal market

10. Renewables Energy Producers case The incentive mechanisms set up by the Goverment in the recent years resulted in a explosive growth of renewable plants in Italy. In a contest of Power Market overcapacity and final demand reduction, the incentives have been revised and most of the operators are facing seriuos financial problems. Foreign investors are looking at this sector for industrial and financial investments at revised and sustainable cash flows. Our client has been collecting money among investors of his country and then he bought 6 SPV companies in Italy, whose energy production will entirely be absorbed by the Italian Energy Web Management Body, at a fixed price, for 19 years. Renewables Energy Producers case The incentive mechanisms set up by the Goverment in the recent years resulted in a explosive growth of renewable plants in Italy. In a contest of Power Market overcapacity and final demand reduction, the incentives have been revised and most of the operators are facing seriuos financial problems. Foreign investors are looking at this sector for industrial and financial investments at revised and sustainable cash flows. Our client has been collecting money among investors of his country and then he bought 6 SPV companies in Italy, whose energy production will entirely be absorbed by the Italian Energy Web Management Body, at a fixed price, for 19 years. 3. Comma 10 experience - Example © 2013 – Comma 10 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 2 Financial stress

11. © 2013 – Comma 10 SMEs: often too small to enclose managerial skills required to survive in the global market. The entrepreneur usually requires professional support in structuring and making decisions to growth and develop his business. The Npex case Opportunity to raise capital in a international trading platform created with the aim to trade less liquid securities. Italian SMEs ready to partecipate? SMEs: often too small to enclose managerial skills required to survive in the global market. The entrepreneur usually requires professional support in structuring and making decisions to growth and develop his business. The Npex case Opportunity to raise capital in a international trading platform created with the aim to trade less liquid securities. Italian SMEs ready to partecipate? 3. Comma 10 experience - Example 3 Management and generational change issue GGI Italian Business Summit Rome, Italy 11th – 13th October 2013

12. © 2013 – Comma 10 4. Opportunities within the crisis © 2013 – Comma 10 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013 » High level and high added value general productions, branded productions and niche productions carried out by SMEs Operations of limited size » Italian economic downturn » SMEs willing to grow beyond the national borders » Difficulties in accessing the credit Injection of capital » Market conditions lead companies to drop prices Market values ​​ much lower than a few years ago. Good moment to buy?!

13. Investing in Italy can be attractive but it also implies some hurdles… © 2013 – Comma 10 4. Opportunities within the crisis Foreign Investors Target companies © 2013 – Comma 10 GGI Italian Business Summit Rome, Italy 11th – 13th October 2013

14. © 2013 – Comma 10 Thank you for your attention sergio.finulli@comma10.it mariagiulia.signori@comma10.it simona.cucchi@comma10.it