November MARCH 2018 Industry snapshot AUTOMOTIVE. INSIDE. Market highlights Key players Deal volumes About Clairfield

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1 November 2017 MARCH 2018 Industry snapshot AUTOMOTIVE INSIDE Market highlights Key players Deal volumes About Clairfield

2 DIRK FREILAND SECTOR HEAD HIGHLIGHTS The automotive sector is currently undergoing massive transformations, on of the most important of which is the replacement of combustion engines with hybrid, electric powertrains. Lightweight and electric vehicles that reduce emissions remain the strongest trends, but are accompanied by other interesting tendencies including big data and autonomous driving. Digitization or big data is a growing market and is estimated to reach USD 600 billion by Autonomous driving is a moon-shot project and is becoming an important purchase criteria. The number of new registered hybrid and electric vehicles is expected to increase by more than 75% in the three global markets in Europe, North America, and China. Along with economic factors including the large cash reserves on balance sheets and private equity dry powder, technological developments and digitization are key drivers of the increase in M&A activity over the last twelve months. Brexit is an ongoing topic for the automotive sector. The UK produced about 1.7 million cars in 2016 and the European export market is crucial as 57% of exports go to Europe. Expenditures will change in capex, R&D, and talent acquisition. The market is growing. Further cost reduction while retaining a high quality is the challenge for all automotive companies in the future. NUMBER OF AUTOMOTIVE OEMS AND SUPPLIERS IN EUROPE BY COUNTRY REVENUES OF AUTOMOTIVE COMPANIES BY COUNTRY IN EUR BILLION Spain Poland Czech Republic Sweden Netherlands Portugal ,600 1,361 1,125 1,072 2,834 2,754 2,253 2,041 Spain Czech Republic Sweden Poland Hungary Slowakei Slovakia Source: Statistisches Amt der Europäischen Union (Eurostat) 2

3 LISTED PLAYERS EV/SALES EV/EBIT EBIT% Aptiv PLC 1.98x 16.66x 11.87% Bertrandt AG 0.95x 16.38x 5.79% BorgWarner Inc. United States 1.28x 10.31x 12.43% Durr AG ElringKlinger AG 0.70x 1.01x.98x 9.91x 12.18x 12.29x 6.94% 8.30% 7.94% Magna International Inc. Canada 0.61x 8.06x 7.52% Schaeffler AG 0.90x 7.10x 12.75% Valeo SA 0.94x 12.40x 7.57% KEY MARKET CONSOLIDATORS CAD 50 billion in total revenue with about 35% stemming from Europe 335 production sites in 28 countries Involved in 115 deals SELECTED TRANSACTIONS (EUR MILLION) DATE TARGET COUNTRY BUYER COUNTRY EV EV/ SALES EUR 17 billion in total revenue of which Europe accounts for 51% 300 production sites in 35 countries Involved in 42 deals EUR 3 billion in revenue of which Europe accounts for 54%. 98 production sites in 17 countries Involved in 66 deals EUR 5.5 billion in revenue 100 production sites in 30 countries Involved in 36 deals 2/2017 US ES 99.71x 5/2016 Century Plastics US ES x 5/2016 ES ES x 4/2016 DE DE 21.39x Source: FactSet and Clairfield research 3

4 AUTOMOTIVE DEAL SPOTLIGHT acquired AUTO EXTERIOR PARTS IMR Automotive S.p.A., a global manufacturer and supplier of exterior parts for the automotive and truck industry, acquired 81.25% of Industrialesud S.p.A. (IS), an Italian company active in the same industry. The residual shares were acquired by Simest S.p.A., an Italian government institution. After the transaction, with an enterprise value in the range of EUR 80 million, the Italian group expects to reach a consolidated turnover in the range of EUR 370 million. Clairfield International advised IMR. SELECTED RECENT AUTOMOTIVE TRANSACTIONS CLAIRFIELD IS A LEADING ADVISOR FOR MIDMARKET INDUSTRIAL TRANSACTIONS NOVEMBER 2017 EMEA SECTOR FOCUS: INDUSTRIALS Financial advisor 2017 Rank # of Deals Ernst & Young LLP 6 27 Lazard 6 27 BDO 8 24 KBS Corporate Sales Ltd 8 24 Lincoln International Oaklins (FKA M&A Intl Inc) Clairfield International Global M&A Baker Tilly International Morgan Stanley Source: Thomson Reuters /China Poland/ /US Finland together with management acquired 100 % of the shares of AUTO PARTS AIRPORT VEHICLES SPARE CAR PARTS AUTOMOTIVE EQUIPMENT AUTO BODY REPAIR 4

5 CLAIRFIELD A GLOBAL PARTNERSHIP OF M&A SPECIALISTS WORLDWIDE PRESENCE 400+ PROFESSIONALS Contact Dirk F. Freiland Managing partner freiland@de.clairfield.com T: RANKED AT THE TOP OF INDUSTRY LEAGUE TABLES 80% OF OUR WORK IS CROSSBORDER Clairfield International provides advisory services on middle-market transactions for large companies, private investors and private equity, public sector clients, and family businesses. Headquartered in Europe with locations in every major region worldwide, Clairfield offers clients access to local corporate businesses, investors, and key decision makers, combined with a deep understanding of local regulations and cultures. Clairfield ranks as one of the top independent M&A advisors in the annual worldwide, European, US, Latin American, and Asian Pacific league tables by Thomson Reuters. DISCLAIMER: No part of this report may be reproduced without the written permission of Clairfield International. The information herein has been obtained from sources that we believe to be reliable, but we do not guarantee its accuracy or completeness. Much of the information contained in this report is subject to variation due to changes in market conditions, legislation or regulatory matters and Clairfield International does not undertake to notify any recipient of the report of changes to the information contained herein. This report is not to be construed as an offer to sell or the solicitation of an offer to buy any 5