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1 VM Introduction January 2015 1

World-Class Operational Excellence / Performance Management & Mergers & Acquisitions VM Overview * Service Offering * Team * References

Frankfurt, January 2015 VM Value Management GmbH * An der Welle 4 * 60322 Frankfurt, Germany Tel. +49 (0) 69 7593 8493 * info@vmvalue.de * www.vmvalue.de

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OVERVIEW VM SELECTED REFERENCES

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AGENDA

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OVERVIEW VM A

We advise on and implement strategy / M&A as well as operations / performance management programs in different industries

Overview – VM

Advisory and Implementation Firm

Specialized consulting and investment advisory firm focused

on the areas of strategy / mergers and acquisitions

support (market study, buy-side, sell-side, post-merger

integration) and performance management (enhancing

sales, cost reduction programs, asset management,

sustainable productivity improvement e.g. Six Sigma, Lean.

Continuous Improvement Process)

Our Services

• TOP Management consulting / implementation

• Interim management

• M&A Advisory

• Team network of international experts

• Management education and university activities

• Management-Events - Value Management FOruM

• Social Commitment – advisory board of IB School

Our Clients

Our German and international clients (e.g. Turkey, Ukraine,

Netherlands, Switzerland, Italy, France, UK,, US, South

Korea, India) are medium and large industrial companies in

chemicals, industrial services, steel, metals, engineering,

automotive, and private equity firms

Selected References

• Chemicals (Lanxess, BASF, Degussa, OMV, Celanese, etc.)

• Industry (chemicals) Services (ThyssenKrupp Services,

Infraserve, etc.)

• Steel / Metals (ThyssenKrupp, Tata, Hisar, etc.)

• Engineering (Siemens, SGB-SMIT, ZTR, ISMET, Hyundai,

ThyssenKrupp Plant Engineering)

• Automotive (Mahle, Nemak, etc.)

• Private Equity (Quadriga Capital, BC Partners, etc.)

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OVERVIEW VM A

Many successful companies use state-of-the-art Performance Management and grow organically and by Mergers & Acquisitions

10 Key VM Service area - Performance Management and Mergers & Acquisitions

Performance Management

Supply Chain

Management

Product- and

Market Strategy

Revenue

Enhancement

Process

Excellence Organizational

Effectiveness

Mergers & Acquisitions Support

Post-Merger

Integration

Pre-Deal

Advisory

Commercial

Due Diligence

Financial

Due Diligence Operational Due

Diligence

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OVERVIEW VM A

The highest potential for optimization can be found in processes and leadership in five different areas of work

Performance Management – 5 Key Areas

2. Revenue Enhancement

3. Organizational Effectiven.

4. Process Excellence

5. Supply Chain Management

1. Product / Market Strategy

Focusing on growth and growth strategy

Increase efficiency of sales organization and CRM

Multi-project management, network competence improvement

Restructuring of the organization, direct / indirect areas

Operational and organizational optimization

Management Operating System & Performance Management

Reduction of the costs of production, warranties and ex gratia payments

Total costs of quality / Robust design (Time to quality) / Six Sigma

Value Chain Excellence

Suppliers: Selection, Evaluation, Development, Controlling

Total costs of ownership, Supply Chain Management

Cost (in- / outbound) and controlling of logistics, Inventory Management

Identification of the most innovative and sophisticated products

Optimizing development cycles

Embodiment of Product-Lifecycle with PLM

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Kum. Kosten Kum. Ergebins Cash Flow Status

State-of-the-art Performance Management leads to significant profit and cash flow improvement through operational excellence

OVERVIEW VM A

Example - Benefits Case of an operational excellence project (Projektergebnis/Cash flow)

• The total consulting cost are typically covered by profit improvements by the end of a project.

• Year one after a project shows typically at least 3 times more profit than the one-off consulting cost.

• i.e. Return on Investment on consulting (ROiC). 3 to 1 in year one

Month

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OVERVIEW VM

Typical Performance Improvement Phases

Typically a 2-4 weeks analysis already reveals operational and financial benefits improvement potential

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Quantification and qualification of

potential improvements (operational +

financial)

Definition of common and shared targets,

involvement in support of all parties

Definition of an agreement on approach,

project team and structure, milestones

Cost-benefit analysis + guaranty:

business case, cash flow- / ROIC1-

analysis, implementation costs

Design and development of solutions to be installed

Realization of potential

Monitor KPI’s and financial benefits

Sustaining best practices and tools

Training and coaching of employees, "On the Job“

Intensive support during the implementation on all levels

Assurance of results

Background,

strategic targets,

operational issues

and challenges

First Hypothesis –

identification of

main focus areas

First draft potential

benefit case

Design Development Installation

Analysis phase

Scoping

2-4 weeks 3-6 months

Analysis Project Plan

Implementation phase

1) ROI = Return on Investment for Consulting

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OVERVIEW VM A

Successful M&A support needs the following five areas of analysis, e.g. in operations / commercials / finance

Merger & Acquisitions – 5 Key Areas

2. Commercial Due Diligence

Synergy Assessment

3. Operational Due Diligence

Synergy Assessment

4. Financial Due Diligence

5. Post-Merger Integration

1. Pre-Deal Advisory

Commercial Analysis

Market Analysis

New Markets / Platforms

Operational Analysis

100-Day Plan

Value-Gap Performance Implementation

100-Day Cash Flow Generation

Strategy Plan

Market Analysis

Operational Due Diligence

Commercial Due Diligence

Financial Due Diligence

Strategy Plan

Integration and Synergy Estimates

100-Day Plan

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OVERVIEW VM

Typical M&A Pre-deal advisory and Commercial Due Diligence scope

Source: VM

Commercial due diligence proposed by VM – A proven approach to assess opportunities and risks in a “red flag report”

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Phases Modules

CDD plan

Findings

Feasibility workshop & Commercial Due Diligence

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Presentation of Findings

Pre-deal advisory: Feasibility workshop a. Review Erdemir´s strategy for Europe b. Summarize and profile the respective acquisition target

i. Preliminary SWOT-analysis (strengths, weaknesses, opportunities, strengths ii. Preliminary high level evaluation of customers, suppliers, competitors, production and sales footprint iii. Preliminary evaluation of financial information incl. potential purchase price expectation

c. Summarize potential strategic, operational and financial synergies with Erdemir

TOP line risk/opportunity

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Commercial Due diligence a. Market review

i. Validation of market information provided by target ii. Market size and drivers and growth iii. Barriers to Entry iv. Clients v. Suppliers vi. Competitors

b. Business plan validation i. Assumptions on sales ii. Assumptions on operations/capex iii. Site visit and interviews with target

c. VM approach includes public research/ interviews (competitors, clients, suppliers

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EBITDA risk/opportunity

Targets

• Background, targets & issues

• Define and align on detailed DD plan

• Estimated potential benefits/risks

• Steering Committee

• Information gathering including operational and

financial reports

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Additional benefit for VM-Business Partners – the VM FOruM is THE format for exchanging ideas in business, politics and society

OVERVIEW VM A

Value Management FOruM – 2013/14

Renowned speakers, e.g.

• Rudolf Scharping, former Federal Minister Germany

• Ernst Welteke, former President German Central Bank / Bundesbank

• Dr. Judith Hartmann, CFO, Bertelsmann

• Dr. Henrik Adam, CCO, Tata Steel

• Dirk Wallesch, CFO, Deutsche Edelstahlwerke

• Dr. Samuel Ying, CEO, Posco Europe

• Jochen Fischer, CFO, SGB-SMIT Transformers

• Florian Rentsch, Minister for Commerce Hesse

Hot topics

Networking

Inspiration

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Speeches on current economic subjects serve as the basis for the debate between leaders from different industries

OVERVIEW VM

Value Management FOruM – 2011/13

Renowned speaker, e.g.

• Professor Dr. Dres. h.c. Bertram Schefold, Goethe-University Frankfurt

• Hans Strothoff, CEO MHK Group and Strothoff International School

• Prof. Dr. Burkhard Schliessmann, International piano artist

Successful format

Supported by FOM University

Twice a year

Royal ambience

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VM organizes and moderates further top management events and conferences – e.g. at the biggest financial conference in Frankfurt

OVERVIEW VM

VM Panels – Private Equity &„Mittelstand“, 17. Euro Finance Week 2014 Renowned speakers, e.g.

• BCHans Haderera, BC Partners

• Uwe Kolb, Bridgepoint

• Dr. Andreas Fendel, Quadriga

• Mr. Klös-Hein, EEW Group

• Dr. Mark Währisch, Standard & Poors

• Mr. Wittershagen, Deutsche Bank

Successful format

TOP Management attendance

Once a year

800 participants

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“ Im Rahmen des Frankfurt International Investors Day (FIID) am 21.

November 2014 im Congress Center der Messe Frankfurt hat VM zwei der

zahlreichen Foren entwickelt. Sie werden von Prof Dr. Jochen Vogel

moderiert. Nutzen Sie die Gelegenheit, in Diskussionen zu Themen wie

»Private Equity« und »Operational Excellence« mehr über Chancen, Risiken

und Trends für das kommende Investmentjahr 2015 zu erfahren. Wir werden

u.a. mit BC Partners, Bridgepoint, Quadriga, Standard & Poors, Deutsche

Bank und Mittelständlern diskutieren. “

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OVERVIEW VM

Our consultants are a sound mix of experienced executives from operations, strategy and M&A as well as industrial CEO´s / former clients

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VM Core Team

K. Grywatz C. Hurth S. Henkel F. Balereau

J. Vogel O. J. Staudacher

S. Kangas

C. Hurth S. Henkel

Core Team

Performance Management

Project Support

Managing Director

G. von Leoprechting

G. Flierl

F. Krone

Core Team

Mergers & Acquisitions Industrial Advisors

S. Akkaya

H. Smetan

N. Ölcer

M. Bisschop

F. Balereau J. Kraus

A. Hund

P. Schulz S. Sagnak A. Kucher

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OVERVIEW VM

Prof. Dr. Jochen Vogel Managing Director

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Professional Experience and Education

Key Skills: Tools and Industries

Key Projects

– Consultant, industrial manager and university professor with background in manufacturing, services and private equity industries

– Founder and Managing Director of the interim management and consulting company VM Value Management GmbH, provides senior teams , tools, coaching and results

– Analysis and implementation of programs for sustainable profit improvement

– Concept and implementation of corporate takeovers / mergers, including capital raising

– Several Advisory Board memberships, Strothoff International School, Frankfurter Gesellschaft für Handel, Industrie und Wissenschaft

2009 VM Value Management, Managing Director/ Performance Management / M&A, Senior Advisor Roland Berger Strategy Consultants

2004 Proudfoot / Celerant Consulting, Managing Director, Head of D/A/CH, Performance Management

2000 Lehman Brothers, Director Investmentbanking, M&A, Corporate Finance

1997 ThyssenKrupp Materials & Services, Director Controlling/Strategy/M&A

1993 PWC (Coopers & Lybrand), Audit/Corporate Finance

2011 Prof., FOM Hochschule – Academy of Management, Frankfurt

1997 Dr. rer. soc. oec, University of Economics, Wien

1993 Diplom-Kaufmann, Gerhard-Mercator University Duisburg

– Several years of productivity improvement, market analysis, sales enhancement and M&A in industrial products and services incl. energy (RWE, E.ON, INA, BP), steel (ThyssenKrupp, Posco, Tata, Hisar Celik), engineering (ThyssenKrupp, Siemens, ZTR- Zaporozhtransformator, Hyundai, SGB-SMIT, Ismet, Berco, Titan)

– Restructuring and sustainable profit improvement by cost and sales effects in industrial private equity companies, e.g. Mäurer & Wirtz, Klöckner, Pentaplast

– Restructuring and sustainable profit improvement for subsidiaries of large groups, e.g. ThyssenKrupp, Bayer, Evonik Degussa, Posco

– Search and analysis of M&A (e.g. Gizem frit, Hisar Celik) opportunities by pre-merger market analysis and commercial, operational and financial due diligence

– Operational and strategic concept and implementation of accounting and controlling standards (Value Based) in an international diversified industrial group

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OVERVIEW VM SELECTED REFERENCES

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Selected References

Our recipe of success is already implemented in many companies

Industrial Services Engineering

Private Equity Oil/ Chemicals Automotive

ThyssenKrupp Automotive

ThyssenKrupp Technologies

ThyssenKrupp Materials & Services

einschl. ThyssenKrupp Industrieservice

Steel / Metals

SELECTED REFERENCES B

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SELECTED REFERENCES

VM FOruM Speakers - Organizations and Companies

VM FOruM speakers are TOP Managers from large and mid-cap companies – as well as sometimes musicians, priests or scientists

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Selected References – Chemicals

Chemical companies need to maintain high margins due to high pressure e.g. through consolidation and oil price volatility

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Clients Project examples

• Re-structuring of the foreign subsidiaries to secure position

• Planning and implementation of a program for reducing the

maintenance costs

• Market analysis and development of growth opportunities

• Strategic, operative and financial analysis of potential M&A

targets

• M&A Buy-Side-Support / Commercial Due Diligence

SELECTED REFERENCES

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SELECTED REFERENCES

Selected References – Industrial Services

Industrial Service Providers need to find their market niche and prepare for further consolidation

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Clients Project examples

• Design and implementation of a value-based management-

system including financial, operative and strategic KPI‘s

• Introduction of a cost calculation model on the retail-level

• Reduction of fixed costs of a regional organization

• M&A analysis for subsidiaries

• M&A investors looking for subsidiaries

• M&A Buy-Side-Support

ThyssenKrupp Materials & Services

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Companies spezialised in engineering can usually be improved in the fields of indirect costs, production and value chain

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Clients Project examples

• Optimization of the European Overhead-Structure

• Increase in efficiency in production-and supply chain, e.g.

increase in performance by 10% within 6 months at the same

fixed costs

• M&A Sell-Side-Support

• Strategic M&A analysis of selected targets

• Improvement in quality of the demand process of the cost-

and time-budget

ThyssenKrupp Technologies

SELECTED REFERENCES

Selected References – Engineering

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Selected References - Automotive

Efficient automotive suppliers need to catch the “high hanging fruits“

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Clients Project examples

• Introduction of Lean Management

• Optimization of production, including Six Sigma training

• Supply chain optimization integrating purchasing, production

and distribution

• M&A Buy-Side incl. legal Pre-Merger-Analyse

• M&A Buy-Side Commercial Due Diligence

SELECTED REFERENCES

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Selected References – Private Equity

Investors are being supported while buying or selling companies as well as preparing for exit

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Clients Project examples

• Performance-improvement programs for investors

• Development of growth strategies

• First contact support with the targeted companies

• M&A Buy-Side-support for strategy, operations and finance

• M&A Buy-Side Commercial Due Diligence

• Support in finding the right companies

SELECTED REFERENCES

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CREATIVITY

DOING

RESULTS