Mergers & Acquisitions

F R E D E R I C K S M I C H A E L & CO. M E R G E R S | A C Q U I S I T I O N S | D I V E S T I T U R E S

Mergers & Acquisitions The Future of The Auto Parts Industry

Member of SIPC and FINRA

December 2020 Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

22 Private & Confidential Overview of Fredericks Michael & Co.

Global Reach in Mergers and Acquisitions…

▪ A global investment bank providing clients with discerning and unbiased advice

▪ Founded in 1984 – over thirty-five years of experience

▪ Extensive global network with a proven track record in over 25 countries

▪ Broad expertise and capabilities focused on: Mergers & Acquisitions (buy-side/sell-side), Joint Ventures, Capital Raising Solutions

▪ 30 employees comprised mostly of veteran advisors with many decades of relevant industry experience

35+ 30 Years of Experience Employees 25+ 8+ Countries Covered Languages Spoken

33 Private & Confidential Fredericks Michael & Co. – Key Attributes

...Providing Independent, Comprehensive, Cross-Border Advice…

▪ Proven Focused Approach ▪ Global in Reach and Practice ▪ Target clients. For over three decades, Fredericks Michael ▪ Global reach. Regional headquarters in New York, London & Co. (“FM&Co.”) has served as a financial advisor to large and São Paulo with extensive transaction experience and corporations, private and family-controlled businesses, and presence in over 25 countries financial sponsors ▪ Local expertise. Team of seasoned, multinational ▪ Core services. Advising clients seeking to expand, professionals provide clients the critical local knowledge, consolidate or rationalize their operations across Europe, cross-cultural understanding and industry relationships the Americas, and Asia needed to carry out transactions almost anywhere

▪ Select industries. Our team has developed close ▪ Cross-Border transactions. Most of our advisory relationships with senior executives in leading companies in engagements involve cross-border transactions leveraging the industries we focus on. Our firm’s institutional knowledge our team’s skill-set, experience and relationships and experience in these industries ensures we provide our clients with timely, actionable, and informed perspectives

▪ Long-Term Client Relationships ▪ Experienced and Tenacious ▪ Relationships that transcend individual transactions. We ▪ Veteran, experienced advisors in every transaction, focus on building trust, establishing credibility, and every step of the way. By staffing assignments with senior developing longstanding relationships level professionals, we help our clients navigate complex opportunities, anticipate challenges, and realize their goals ▪ Repeat engagements. Most of our advisory engagements involve previous clients or companies with whom our firm’s ▪ Relentless. Our firm is known for its unwavering approach senior bankers have established relationships dating back in all aspects of a transactions regardless of size. Leaving many years no stone unturned is our mantra

44 Private & Confidential Fredericks Michael & Co. – Capabilities

…And Focused on Unlocking and Executing Complex Transactions

Buy-Side ✓ Providing Access to Global Industry Knowledge and Participants ✓ Execution of exhaustive search & screen analyses and target approaches ✓ Initiating unique one-on-one transactions, avoiding auctions Sell-Side ✓ Providing senior access to companies ✓ Sale of non-core and underperforming assets ✓ Structuring complex transactions ✓ Sale of family businesses with generational ✓ Remaining involved in all details of transaction through closing challenges ✓ Targeting international as well as local, strategic and financial buyers ✓ Exhaustive effort to maximize price ✓ Solutions oriented to ensure transaction closing ✓ Remaining involved in all details of transaction through closing Trusted and Differentiated Advisory Services Capital Raises ✓ Advising on capital raises for corporate growth ✓ Accessing international investors with specific industry and/or geographic interests ✓ Exhaustive effort to maximize success ✓ Solutions oriented to ensure transaction closing ✓ Involved in all details of closing Joint Ventures ✓ Initiating unique transactions that create value through corporate partnerships ✓ Unlocking value without immediate sale of the business ✓ Providing entry to new geographic markets with the experience of local partners ✓ Structuring of shareholder agreements with appropriate exit options

55 Private & Confidential Fredericks Michael & Co. – Global Reach and Industry-Wide Expertise

▪ Global reach is increasingly important for all types of transactions

▪ FM&Co. has global expertise coupled with local knowledge in the major markets

London New York FM&Co. maintains a network of partners across Hong Kong the APAC region that it can leverage and collaborate with on an ad hoc basis

São Paulo

Headquarters Regional Office FM&Co. APAC Partners Transaction Experience

66 Private & Confidential Key Auto Parts Sector Relationships

FM&Co. has relationships with the key stakeholders in the Auto Parts sector

77 Private & Confidential Sell-Side M&A Experience in the Auto Parts Suppliers Sector

FM&Co.'s role in this engagement

Local Market knowledge – Provided Ruukki with knowledge of Europe and Germany-based financial sponsors, of which Arques Finland ultimately acted as a counterparty in the transaction

has sold its subsidiary Comprehensive Search & Screen – FM&Co. completed a thorough process of identifying and contacting potential strategic and financial buyers, of which Arques was the ideal candidate

Germany Senior Level Target Approach – Identified, profiled and approached potential buyers and ownerships on no-name basis in to order to determine possible interest and later introduced them to the opportunity

Evaluation of Potential Buyers – Advised Ruukki on the selection of potential buyers to consider, on valuation of the target metrics and on potential structures to meet Ruuki’s objectives Germany Due Diligence – Assisted, advised, coordinated, and guided Ruuki through the due diligence process, assisting them in successfully divesting their subsidiary, Carl Froh GMBH

88 Private & Confidential Buy-Side M&A Experience in the Auto Parts Suppliers Sector

FM&Co.'s role in this engagement

Local Market knowledge – Advised Brembo on a potential Advised acquisition in Brazil to assist the company in solving operational issues in the region

Comprehensive Search & Screen – Performed exhaustive buy- side mapping and search and screen of potential targets in Brazil, Italy fitting Brembo’s parameters

on potential acquisition in Senior Level Target Approach – Identified, profiled and Brazil approached targets and ownerships on no-name basis in order to determine possible interest and later introduced Brembo to opportunities in the market

Evaluation of Targets – Advised Brembo on the selection of targets to acquire, on valuation metrics and on potential structures to meet Brembo objectives

Negotiations – Assisted, advised and coordinated on behalf of Brembo in the negotiations with the target’s ownership

99 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

1010 Private & Confidential Auto Parts – Summary

▪ The auto parts supplier market is facing significant disruptions, caused by: (I) decreasing OEM sales, (II) technological shift related to increased prevalence of electric vehicles, and (III) supply-chain disruption caused by COVID-19 pandemic

▪ Auto parts suppliers are dealing with these issues either by (I) focusing on and embracing new technologies not necessarily within their core areas or (II) consolidating the market and remaining focused on their historical verticals – in both cases M&A is the way that auto parts suppliers are achieving these goals

▪ Powertrains, chassis, and interiors are three segments of the auto parts market that are analyzed throughout this document. While these segments are affected to different degrees by the aforementioned technological shifts, key participants in all of them are implementing aggressive M&A strategies to adapt to new market realities

▪ Finally, several Tier 1 suppliers and OEMs focusing on new technologies have already established their respective corporate venture capital (“CVC”) funds, to invest into promising technologies at an early stage

Auto parts sector is facing significant disruption which can be navigated through a targeted M&A strategy

1111 Private & Confidential Auto Parts – Key Issues and Resulting M&A Opportunities

While OEM and auto parts suppliers are currently dealing with several existential threats to their business, these threats also create opportunities for future growth:

1 EV disruption and overall technology shift in the Opportunity to dominate the market by investing in auto sector makes some products outdated and the companies with necessary skills and know- some obsolete how and becoming technology-agnostic

2 Opportunity for market consolidation, especially in Decreased OEM sales will put a strain on the top the emerging markets where the decrease was line of many suppliers especially severe

3 Opportunity to consolidate smaller suppliers who COVID-19 will significantly disrupt the intricate auto did not manage to fair the crisis or acquire industry supply chain competitors at lower multiples

M&A will continue to play an important role in restructuring of the auto parts sector

1212 Private & Confidential Auto Industry – New Reality

Similar to other sectors of the economy, COVID-19 impacted the auto industry when it was in a vulnerable state

In select markets, auto sales were down in 2019, compared to 2013, and the sales of new vehicles in all key markets combined peaked in 2017

Overproduction was already an apparent issue in the industry as of last year: several big OEMs closed facilities even before the outbreak of the pandemic, for example GM’s and Ford’s laid off thousands of workers in 2019, with the prior also closing 7 facilities (one was planned to be renovated and re-opened)

Market contraction also triggered further consolidation among OEMs: FCA and PSA agreed on a US$ 50bn merger in December of 2019, but the deal is yet to close

Suppliers struggled to adapt to disrupt caused by technology shifts and this forced them into ever-closer cooperation with OEMs which is only increasing due to coming need of rebuilding the supply chain in the sector

OEM Car Sales in Key Markets mn of units 06/2020 - LTM CAGR 13-19 YoY Change 63.9 65.1 64.8 62.5 70.0 70.0 2.1% (13.9%) 58.3 59.9 1.6 1.8 1.8 55.1 2.5 1.6 1.4 53.9 60.0 2.0 2.2 2.5 60.0 (7.3%) (11.0%) 2.8 2.5 2.7 1.6 3.3 4.1 4.4 50.0 4.4 2.2 50.0 3.6 4.2 15.1 15.6 15.6 4.3 (4.8%) (18.3%) 4.6 4.7 14.2 15.8 3.8 40.0 13.0 40.0 12.3 12.5 (1.0%) (10.7%)

30.0 17.5 17.1 17.2 30.0 17.4 17.0 4.3% (21.0%) 15.5 16.4 15.0 20.0 20.0 1.5% (11.7%) 10.0 23.7 24.2 23.3 10.0 16.3 18.4 20.0 21.0 18.8 4.3% (10.5%) 0.0 0.0 2013 2014 2015 2016 2017 2018 2019 06/2020 - LTM (1) (1), (2) (1) China USA Europe Japan Brazil Russia Cummulative (1) Light vehicle sales (2) EU+EFTA Source: VDA

1313 Private & Confidential Auto Industry – Key Challenges Following the Post-COVID-19 Reopening

While the auto industry began its slow recovery following the global easing of lockdown measures, there are still key challenges for the sector:

Key Challenges Relevant News

“As Sales Rise, Automakers Ramp Up Production” New York Times, 06/24/2020 “…auto sales will be down sharply this year, more than in any year since at least 2009; AlixPartners, a consulting firm, expects sales of new vehicles to fall about 19% this year, to 13.7 million. Experts worry that a surge in coronavirus cases in places like OEM production is resuming, but will Arizona, Florida and Texas could drop sales further as more people stay home to avoid getting sick or making others ill.” still see ~19% decrease YoY

“The U.S. Auto Industry Is Restarting After COVID —Now What?” Bloomberg, 05/18/2020 “Some suppliers, especially smaller ones, have limited financial resources to get assembly lines rolling again and may be less able to procure the personal-protective equipment needed to keep their workers safe. The extremely costly scenario that the whole sector will be trying to avoid is having to shut back down. Albeit, OEMs begin re-opening their plants, but not all Supplier Are Ready Daimler’s Mercedes-Benz had to do just that at its plant in Alabama due to a shortage of parts from Mexico. And General Motors and Ford have run into trouble either with keeping factories running or adding shifts.”

“Coronavirus: How can the car industry hope to recover?” BBC, 05/14/2020 “…in Europe, where major manufacturers such as PSA Group, Renault, and Daimler are slowly bringing plants back online. Among those that have already reopened is the world's largest car factory, Volkswagen's huge facility in its home town of Wolfsburg. While expectations are positive, it is not clear when the car sales will begin Part of the problem is that although car companies can decide when to reopen their plants, and to what extent they can resume to recover production, there are other factors that they cannot control. Notably, they don't know when showrooms will be allowed to reopen, and when customers will actually want to buy new cars.”

Source: New York Times, Bloomberg, BBC

1414 Private & Confidential Fleet Electrification – A Growing Force in the Auto Market

The sales of battery electric vehicles (“BEV”) and plug-in hybrid electric vehicles (“PHEV”) have been growing exponentially, despite the slump in overall OEM sales

Key Markets BEV Sales Key Markets PHEV Sales

mn of units CAGR 13-19 mn of units 5.00 5.0 CAGR 13-19

65.9% 4.50 4.5

5.00 4.8 6.0

4.00 4.0

4.50 0.4 39.0%

3.50 3.5 5.0

4.00 0.9 49.1% 3.00 3.0 3.50 4.0 55.2%

3.00 2.4 1.0 55.0% 2.50 2.5 2.50 3.0 0.3 43.3% 2.00 2.0

2.00 0.6

1.50 1.5 2.0 33.7% 1.50 0.05 2.6 110.1% 1.00 0.8 1.0 1.00 0.2 0.03 64.1% 0.08 1.0

0.50 0.2 0.5 0.50 0.10 0.07 0.8 NA 0.00 0.0 0.04 0.03 0.00 0.0 2013 2019 2013 NA 2019 China Europe US Other Total China Europe US Other Total

BEV Sales as % of Total OEM Sales PHEV Sales as % of Total OEM Sales

China 0.2% 12.3% China 0.0% 3.7% Europe 0.6% 6.1% Europe 0.3% 4.9% US 0.5% 5.2% US 0.6% 3.4% Key Trends

China is the largest market for BEVs and the second largest market BEVs and PHEVs now represent 5.2% and 3.4%, respectively, of for PHEVs after Europe (the difference is 1.3%); China also had the total OEM sales in the US highest total growth in both categories

BEVs have grown more than twenty-fold since 2013, overtaking the PHEV in key markets

Source: IEA

1515 Private & Confidential Auto Parts – Case Study: Tech-Driven M&A Strategy – Valeo SA

Stock Price Evolution US$ Appreciation 80 (01/01/1998 – 12/07/2020)

40 31.0 54.9% 20

0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Significant Development:

Acquired Niles Co., a Japan-based Acquired FTE automotive GmbH, a Acquired automotive unit of Labinal SA, a manufacturer of automotive electronic Germany-based manufacturer of dive train France-based auto parts manufacturer, components, for US$ 430mn and brake systems, for US$ 916mn for US$ 394mn (7.2x EV/EBITDA) (10.8x EV/EBITDA)

1998 2000 2005 2011 2014 2016

Acquired Electrical Systems business of ITT Industries Inc., Acquired Engine Electronics Acquired Valeo Sylvania (50% stake), a Acquired Ichikoh Industries for US$ 1.7bn Divison from Johnson Controls, for US-based manufacturer of automotive (23.5% stake), a Japan-based US$ 431mn lighting systems, for US$ 104mn manufacturer of automotive components, for US$ 224mn (5.4x EV/EBITDA)

Source: Company Website, CapitalIQ, Merger Market, Industry News

1616 Private & Confidential Auto Parts – Case Study: Tech-Driven M&A Strategy – Continental AG

Stock Price Evolution US$ Appreciation 310 (01/02/2006 – 12/07/2020) 250

190

130 107.1 51.9% 70

10 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Significant Development:

Acquired Automotive business Acquired Siemens VDO Acquired Elektrobit Automotive, a Acquired Quantum Inventions of Motorola Inc., a US-based Automotive, a Germany- Germany-based supplier of Pte., a Singapore-based Acquired Cooper-Standard supplier of electronic control based supplier of automotive embedded software solutions for the developer of mobility apps Automotive Inc., US-based units for the automotive electronics and automotive industry, for US$ 685mn and analytics platforms, for manufacturer of anti-vibration industry, for US$ 1.0bn mechatronics (57.2x EV/EBITDA) US$ 29mn systems, for US$ 266mn

2006 2007 2014 2015 2017 2018 2019 2020

Acquired Matador Acquired Veyance Technologies, Acquired Easy-Mile Acquired HERE Global Acquired Drust, a Acquired Vitesco Technologies Rubber, a Slovakia-based a US-based manufacturer of Systems, a France-based (5% stake), a France-based cloud- Korea, a South Korea-based tire manufacturer for US$ hydraulic hose and fittings, provider of shared Netherland-based based car data manufacturer of electronics and 202mn automotive products, for US$ driverless transportation developer of software analytics platform mecha-tronic products for 1.9bn (7.1x EV/EBITDA) for automotive automotive industry, for US$ purposes 201mn (5.1x EV/EBITDA)

Source: Company Website, CapitalIQ, Merger Market, Industry News

1717 Private & Confidential Auto Parts – Case Study: Market-Driven M&A Strategy – CIE Automotive

Stock Price Evolution US$ Appreciation 40 (01/02/2006 – 12/07/2020)

20 18.6 504.2% 10

0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Significant Development:

Acquired Insituto Sectorial de Promocion y Gestion de Acquired Grupo Amaya Telleria, a Empresas, a Spain-based company engaged in engineering Spain-based manufacturer of Acquired roof systems and assembly of refractory lines, construction of industrial components for the automotive industry, division of Inteva Products, chimneys etc., for US$ 838mn (8.5x EV/EBITDA) for US$ 212mn (36.7x EV/EBITDA) for US$ 755mn

2006 2010 2013 2016 2017 2018 2019

Acquired Sada Forjas, a Brazil- Acquired Mahindra CIE Automotive Acquired Newcor Inc., a US-based Acquired Somaschini SpA, based manufacturer of (77.5% stake), India-based manufacturer of machined products an Italy-based automotive components, for manufacturer of automotive for the automotive sector for manufacturer of gears, for US$ 52mn components, for US$ 207mn US$ 106mn US$ 85mn

Source: Company Website, CapitalIQ, Merger Market, Industry News

1818 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

1919 Private & Confidential Auto Parts Suppliers – Rising Technological Disruption

FM&Co. will focus on the following three sub-segments in the following slides:

Powertrains Interiors ▪ Disruption level: ▪ Disruption level: ▪ Next Generation Vehicle Concept: ▪ Next Generation Vehicle Concept: o E-motors and power electronics o New Human Machine Interfaces o Battery Systems (“HMIs”) and displays o Simple 1-2 step reduction gears o Extended infotainment solutions o Integration of electronics and surfaces

Chassis ▪ Disruption level: ▪ Next Generation Vehicle Concept: o Driver assistance systems and autonomous features o Adaptive suspensions and active steering and braking systems

Almost all vehicle domains will shift in growth focus in upcoming years. The impact of disruption will be particularly high on powertrains

Source: Lazard, Roland Berger, Beau and Alan Daniels

2020 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

2121 Private & Confidential Powertrain Segment – Role of M&A in the Transformation of the Segment

Key Sector Trends

While the overall powertrain market is expected to grow, the bulk of growth will come from products for the EV market, and both gasoline and diesel markets are expected to contract

Industry consolidation remains high and will likely increase following COVID-19 disruption

Market leaders are also driving the innovation in the sector, relying on both internal development and targeted acquisitions

OEM Sales Breakdown by Powertrain Type and Overall Value Key Powertrain Producers US$ bn, unless specified otherwise CAGR 19-25E

120% 700.0 10.6% 336.5 617.2 600.0

100% 4% 1% 30.8% 16% 20% 500.0 80% 2% 4%

7% 400.0 7% 26.0% 60%

300.0 (12.9%) 40%

77% 200.0 62%

20% 23.2%

100.0

0% 0.0 (3.5%) 2019 2025E Gasoline BEV Diesel PHEV Other Total Value

Source: BCG, ReportBuyer

2222 Private & Confidential Powertrain Segment – Technology Shifts

Background Technology Trends Key Trends for Suppliers

1 1 Increasing cost of ICE/exhaust Winners treatment due to rising price of Future powertrain architectures are Commoditization of ICE-related catalytic converters amid emission electrified resulting in several fast-growing hardware control and regulations domains: 2 ▪ E-motors 2 Mild and full hybrids aid in emissions ▪ Inverters/power electronics Battery systems and electronics will improvement and enable ICEs with ▪ Battery and battery cooling downgraded requirements provide important opportunities for ▪ Electronic gears diversification 3 ▪ Charging components BEV penetration rates increase 3 driven by regulation, incentives and consumer demand Losers Limited potential in e-motors in part Traditional ICE components and systems due to lower complexity vs. ICE will experience below-average growth rates: ▪ Engine, camshafts, crankshafts, valves, lubricants ▪ Exhaust, oil filters, alternators, ignition ▪ Transmission, clutch gearboxes, propeller shaft

Electric components are growing rapidly to replace the traditional ICE components

Source: Lazard, Roland Berger

2323 Private & Confidential Powertrain Segment – Key Milestones and M&A Transactions

By 1900, all three major types of Following an oil crisis in 1973 and energy GM releases GM EV1, one of the Toyota launches Toyota modern engines, gasoline, crisis in 1979, diesel cars increase their first EVs on the market, featuring Prius, the first mass- Renault launches Elect'Road, diesel, and electric, are invented market penetration in Europe a GM Voltec powertrain produced hybrid car one of the first PHEVs

Pre-1900 1970s 1996 1997 2003

American Axle & Manufacturing Holdings Inc. acquired Metaldyne Performance Group, a US-based producer of components for use in Dana Incorporated acquires Continental AG acquired Siemens VDO Automotive powertrain and safety-critical platforms, for GKN’s driveline business for AG, a German supplier of automotive electronics and US$ 3.1bn (6.4x EV/EBITDA) US$ 6.2bn (0.8x EV/Revenue) mechatronics, for US$ 15.6bn (1.1x EV/Revenue)

2016 2010 2008 2007 2006

Ningbo Dongfang Yisheng Investment Co., Ltd. acquired Tesla releases Tesla Roadster, Continental AG acquired Motorola Inc Punch Powertrain NV, a Belgium-based manufacturer and supplier featuring the Borg Warner (Automotive Electronics Business), a US based of fuel-efficient powertrains, for US$ 1.2bn (17.6x EV/EBITDA) transmission supplier of electronic control units to the automotive industry for power trains, chassis control and for interior applications, for US$ 1.0bn (0.6x EV/Revenue) Cummins Inc. and Eaton Corporation agreed to create a joint venture for automated transmissions for heavy-duty and medium-duty commercial vehicles, with the first providing a US$ 600mn cash consideration

2017 2018

Delphi Automotive Plc (now Aptiv) spun off Delphi Technologies Tenneco acquires Federal-Mogul LLC, a US- PLC, its powertrain systems division with shareholders of the parent based manufacturer and supplier of components receiving shares in the new entity, for US$ 4.6bn (8.4x EV/EBITDA) for cars, trucks and construction vehicles, for US$ 5.4bn (7.5x EV/EBITDA)

Source: MergerMarket

2424 Private & Confidential Powertrain Segment – Magna International – Key M&A Developments

Company Overview Select OEM Clients

Revenue: US$ 37.3 bn

Sector: Interior, Exterior, Chassis, Powertrain, Technology

Locations: Operations in 27 countries

Significant Development

Acquired ixetic Verwaltungs GmbH, a Acquired Stadco Acquired New Venture Gear Inc., a German-based manufacturer of Limited, a UK-based Acquired Steyr-Daimler-Puch, an US-based of transfer cased and automotive vacuum, engine and manufacturer, for Acquired Olsa SpA, an Italy- Austria-based vehicle assembly manual transmissions, for transmission pumps, for US$ 397mn automotive body based automotive lighting company, for US$ 312mn US$ 348mn (7.8x EV/EBITDA) panels company, for US$ 266mn

1998 2002 2004 2005 2012 2015 2018 2020

Acquired Tesma Acquired Donnelly Acquired Intier Acquired GETRAG, a Acquired a stake in Participated in US$ 3.0bn International, a US-based Corp, a US-based Automotive, a Canada- Germany-based Lyft Inc., a ridesharing funding round for self driving engine, transmission and supplier of automotive based manufacturer of automotive parts company, company, for technology company mirrors, for fuel system components automotive interiors, for for US$ 2.7bn US$ 155mn US$ 412mn supplier, for US$ 609mn US$ 227mn (3.4x (13x EV/EBITDA) (11.2x EV/EBITDA) (3.8x EV/EBITDA) EV/EBITDA)

Source: Company Website, CapitalIQ, Merger Market, Industry News

2525 Private & Confidential Powertrain Segment – Robert Bosch GmbH – Key M&A Developments

Company Overview Select OEM Clients

Revenue: US$ 49.5 bn (Auto parts division - 2018)

Sector: Interior, Chassis, Powertrain, Technology

Locations: 126 engineering locations globally(1)

Significant Development

Acquired Unipoint Electric Mfg Co., a Acquired Koller + Schwemmer GmbH, a Taiwan-based manufacturer of starter Germany-based automotive parts Acquired a 50%-stake in EM-motive GmbH and alternators manufacturer Germany-based electric motors manufacturer

2010 2011 2012 2015 2019

Acquired RTI Technologies Inc, a US- Acquired SPZ Service Solutions, Acquired Cardone Industries Inc., Acquired a 50%-stake in ZF based manufacturer of automotive a US-based manufacturer of a US-based automotive Lenksysteme GmbH, a Germany-based maintenance equipment diagnostic products for replacement parts manufacturer steering systems manufacturer ZF transportation sector for Cardone Industries Inc. Lenksysteme GmbH (50% stake) US$ 1.2 bn

(1) Across all sectors of Bosch’s operations Source: Company Website, CapitalIQ, Merger Market, Industry News

2626 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

2727 Private & Confidential Chassis Segment – Role of M&A in the Transformation of the Segment

Key Sector Trends

While not as exposed to the technological shift as the powertrain sector, the manufacturers of chassis and related components will have to adapt their products to new engine types

OEMs are active in the space, contributing to innovation (for example, BMW)

Many of the key manufacturers of chassis are active in other sub-sectors as well and can leverage their innovation experience

Market Size Key Chassis Producers US$ bn, unless specified otherwise CAGR 19-25E

90.0 Chassis Market Size 80.0

70.0 60.0 78.4 5.6% 50.0 (1) 40.0 56.6 30.0

20.0

10.0

0.0 2019 2025

16.0 Brakes Market Size

14.0 12.0 (1) 4.2% 10.0 14.2 8.0 11.1 6.0

4.0

2.0

0.0 2019 2025

(1) FM&Co. estimate Source: Statista, Global Market Insight

2828 Private & Confidential Chassis Segment – Technology Shifts

Background Technology Trends Key Trends for Suppliers

1 1 Advanced Driver Assistance Winners Standardization of the hardware as Systems (“ADAS”) offers several Advanced vehicle control and sensor well as commoditization of the benefits to society and industry, systems are the main beneficiaries of the including accident mitigation, traditional chassis and related shift to greater advanced driver assistance congestion reduction, increased components driving comfort and fuel efficiency systems: ▪ Advanced driver assistance systems and gains 2 autonomous features 2 ADAS are expected to offer growth Chassis and structures will have to ▪ Adaptive suspensions potential within their respective adapt to the reality of the EV shift, ▪ Active steering and braking actuators vehicle domains (e.g., steering, with manufacturers implementing ▪ E-Axles (as part of electrified powertrain) vision, safety systems, suspension) new materials, such as aluminum ▪ Vision sensors (LiDAR, cameras) and carbon fiber

Losers Traditional vehicle control systems may lose market share if they do not adapt with new offerings: ▪ Hydraulic steering systems ▪ Traditional axles ▪ Conventional suspensions

The ADAS and AD component markets will grow rapidly and software-focused suppliers will generate significantly higher revenue

Source: Lazard, Roland Berger

2929 Private & Confidential Chassis Segment – Key Milestones and M&A Transactions

By 1900, all three major types of Citroën releases Citroën DS, first GM releases GM EV1, one of the Toyota launches Toyota modern engines, gasoline, mass production use of the first EVs on the market, featuring a Prius, the first mass- Renault launches Elect'Road, diesel, and electric, are invented modern automotive disc brake GM Voltec powertrain produced hybrid car one of the first PHEVs

Pre-1900 1955 1996 1997 2003

Chrysler releases Plymouth Prowler, an ICE engine car with aluminum construction, namely in the chassis

Dexter Axle Company acquired AL-KO Vehicle Technology from AL-KO Kober SE for US$ 410mn (0.5x Revenue; 5.6x BMW i3 is released; it features a Brembo Acquired the remaining 50% stake in Brembo Ceramic Brake EBITDA). The combined entity was renamed DexKo Global, carbon fiber-reinforced plastic System, the Italy based company dealing in manufacture of carbon with an annual sales of EUR 850mn and aluminum body and chassis ceramic brake discs from Daimler AG, for US$ 13.2mn (1.2x Revenue)

2015 2013 2012 2008

Tesla releases Tesla Roadster, featuring the Borg Warner transmission

Brembo acquired a 66% stake in Asimco Meilian Braking Systems (Langfang) Co. Ltd., a China-based manufacturer of brake discs for AAM sold the Company’s Casting segment for US$ 201.8mn passenger cars, from ASIMCO Technologies, for US$ 90.1mn (0.3x Revenue) to Gamut Capital Management L.P.

2016 2017 2019

AAM acquired Metaldyne Performance Group, US-based manufacturer of components in powertrain and safety-critical platforms (Grede, HHI, and Metaldyne), for US$ 3.2bn (1.0x Revenue; 6.4x EBITDA)

Source: MergerMarket

3030 Private & Confidential Chassis Segment – Brembo – Key M&A Developments

Company Overview Select OEM Clients

Revenue: US$ 3.0bn

Sector: Chassis

Locations: Operations in 16 countries

Significant Development

Acquired a 30% stake in Brembo Nanjing Acquired a 66% stake in Asimco Meilian Acquired Hayes Lemmerz Acquired the remaining 50% stake in Brake System Co Ltd, the China based Braking Systems (Langfang) Co. Ltd., a International (automotive brake KBX Motorbike Products Private Ltd, JV engaged in processing and coating of China-based manufacturer of brake Company component facilities) for US$ the JV with Bosch Chassis Systems cast-iron discs, from Donghua discs for passenger cars, from ASIMCO incorporated 58.0mn (0.5x Revenue) India Limited, for US$ 17.0mn Automotive Industrial Co. for US$ 14.7mn Technologies, for US$ 90.1mn

1961 2000 2007 2008 2010 2013 2015 2016 2020

Acquired AP Racing Acquired the remaining 50% stake in Acquired Donghua Automotive Sold the remaining 65% of Sabelt S.p.A., Acquired SBS Friction A/S, a Limited for US$ 39.4mn Brembo Ceramic Brake System, the Italy Industrial Co. Ltd’s foundry Italy-based manufacturer of belts, Denmark-based manufacturer based company dealing in manufacture plants and equipment in China equipment, and accessories for racing and and developer of eco-friendly of carbon ceramic brake discs from for US$ 13.0mn belts for kids’ seats, to Marsiaj family, for brake pads for motorbikes, for Daimler AG, for US$ 13.2mn (1.2x US$ 11.0mn (0.8x Revenue) US$ 49mn (10.2x EV/EBITDA) Revenue)

Source: Company Website, CapitalIQ, Merger Market, Industry News

3131 Private & Confidential Chassis Segment – American Axle & Manufacturing, Inc. – Key M&A Developments

Company Overview Select OEM Clients

Revenue: US$ 6.5bn

Sector: Chassis

Locations: Operations in 17 countries

Significant Development

Acquired 100% ownership of e-AAM Driveline Systems in Sweden, Acquired U.S. Manufacturing de Mexico, S. de R.L. de Sold the Company’s Casting segment previously a JV with Saab C.V., a Mexico-based manufacturer of engineered extruded for US$ 201.8mn (0.3x Revenue) to Company incorporated Automobile AB, for US$ 4mn products and machined components, for US$ 162.5mn Gamut Capital Management L.P.

1994 2008 2012 2017 2019

Entered into an agreement to form a Acquired Metaldyne Performance Group, US-based Acquired Mitec Automotive AG, Germany- 50:50 JV, Hefei AAM Automotive manufacturer of components in powertrain and safety- based developer and producer of engine and Driveline & Chassis System Co., Ltd. critical platforms (Grede, HHI, and Metaldyne), for US$ transmission components, for US$ 9.4mn with Hefei Automobile Axle Co, Ltd. 3.2bn (1.0x Revenue; 6.4x EBITDA)

Source: Company Website, CapitalIQ, Merger Market, Industry News

3232 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

3333 Private & Confidential Interiors Segment – Role of M&A in the Transformation of the Segment

Key Sector Trends

Interiors will not be as affected by the technological shift as the powertrains, but are expected to integrate the new technologies and solutions, ranging from ADAS and new types of infotainment to the autonomous driving

Suppliers of interiors solution will have to integrate and compete with the solutions provided by “Big Tech” companies, such as Apple and Google

CVC initiatives and acquisitions will prove to be key in the coming years, as the suppliers try to keep up with the pace of the technological change

Global Automotive Interiors Market Size Key Chassis Producers US$ bn, unless specified otherwise CAGR 19-25E

300.0

250.0 249.8 4.2%

200.0

(1) 188.2

150.0

100.0

50.0

0.0 2019 2025

(1) FM&Co. estimate Source: Statista, Global Market Insight

3434 Private & Confidential Interiors Segment – Technology Shifts

Background Technology Trends Key Trends for Suppliers

1 1 Growing importance of non-driving- Winners Successful translation of customer related activities, such as New opportunities to design the interior of needs in product innovation infotainment, completing tasks while electric and connected vehicles with driving automated, eating and automated driving: 2 drinking ▪ HMIs (e.g., augmented reality head-up Product differentiation display, gesture recognition, haptic 2 feedback) and integration of electronics 3 Interiors provide a huge potential for and surfaces panels and screens) innovation and continued growth Integration of E/E to ensure value ▪ Extended infotainment solutions creation ▪ New design opportunities / requirements (e.g., luxury lounge seating or increased interior insulation – Noise, Vibration, and Harshness [“NVH3”])

Losers Traditional interior components at risk: ▪ Analog instrument clusters, buttons and switches, conventional valves, pumps and compressors

Autonomous driving will drastically change interior designs and stimulate innovation and growth potential

Source: Lazard, Roland Berger

3535 Private & Confidential Interiors Segment – Key Milestones and M&A Transactions

Mercedes-Benz W116 is the The Galvin Corporation Packard’s 1940 model is released – first car to use an electronic Pioneer introduced the Chrysler becomes company to introduces the first commercial it is the first car to feature a factory- four-wheel multi-channel anti- CDX-1, the first car CD install the first Bluetooth car radio, it is called “Motorola” installed air-conditioning lock braking system from Bosch (compact disc) player capable systems inside its cars

1930 1940 1978 1984 2000

Huayu Automotive Systems Company Limited Visteon Corporation acquired Hanon acquired a 50% stake in Yanfeng Automotive Trim Systems, a listed South Korea-based Acquired Sommer- Allibert Apple releases CarPlay – Systems Co., Ltd., a China-based company that company engaged in the original equipment SA, a France-based a system that allows users designs, develops, manufactures, sells, and exports manufacturing of automobile air-conditioning manufacturer of floor to connect iPhone to the automotive interior, seating, electronics, safety and systems and modules, for US$ 801mn coverings and car interiors, car’s multimedia center exterior systems, for US$ 928mn (EV/EBITDA: 16.8x) for US$ 1.1bn

2014 2013 2012 2001

Lear Corporation acquired Eagle Ottawa, LLC, a Tesla’s Model S features a full US-based company engaged in the manufacture display in a car instead of a and sale of automotive upholstery and interior dashboard leather solutions, for US$ 850mn Faurecia acquired Clarion Co., Ltd., a listed Japan-based company engaged in manufacturing car audio/visual equipment, for US$ 1.4bn (EVEV/EBITDA: 9.5x)

2016 2017 2018

Johnson Controls, Inc. has agreed to spin-off Adient, a US-based Sold seating and metal business unit of Asahi Kasei Corporation acquired Sage Automotive Interiors, designer, developer, manufacturer and marketer of seating the Company to Lear Corporation for Inc., a US-based company that designs, develops, and systems and components into a separately listed company, US$ 308mn manufactures automotive body cloth products and headliners valuing the latter at US$ 4.4.bn (EV/EBITDA: 5.7x) to automotive manufacturers, for US$ 1.1bn

Source: MergerMarket

3636 Private & Confidential Interiors Segment – Faurecia S.A. – Key M&A Developments

Company Overview Select OEM Clients

Revenue: US$ 19.8bn

Sector: Interiors, electronics, powertrain solutions

Locations: Operations in 34 countries

Significant Development

Acquired a remaining 80% stake in Parrot Acquired SAS Autosystemtechnik GmbH Acquired US based automotive Acquired 7 facilities (4 in France, 1 in Automotive SAS, a & Co. KG, a Germany-based company interior trim components business Spain and 2 in Germany) of Plastic France-based supplier of infotainment and engaged in assembly, logistics and of Automotive Components Omnium's automotive exteriors connectivity solutions for the automotive development of modules for motor Holdings, for US$ 57mn business, for US$ 215mn industry, for US$ 122mn vehicles and trucks, for US$ 249mn

2001 2012 2016 2017 2018 2019 2020

Acquired Sommer- Allibert Sold its France-based Acquired a 70% stake in Shenzhen Acquired Clarion Co., Ltd., a listed Japan-based Acquired IRYStec SA, a France-based automotive exteriors Faurecia Automotive Parts Co. Ltd., a company engaged in manufacturing car Software Inc., a Canada- manufacturer of floor business to Plastic China-based joint venture engaged in audio/visual equipment, for US$ 1.4bn based software provider coverings and car interiors, Omnium, for US$ 754mn the manufacture, assembly and sale of (EVEV/EBITDA: 9.5x) for displays for US$ 1.1bn automotive seating products, with BYD Automobile Industry Co Ltd.

Source: Company Website, CapitalIQ, Merger Market, Industry News

3737 Private & Confidential Interiors Segment – Grupo Antolin-Irausa, S.A. – Key M&A Developments

Company Overview Select OEM Clients

Revenue: US$ 5.6bn

Sector: Interiors

Locations: Operations in 26 countries

Significant Development

A 22.9% stake in the Company Sold a 50% stake in Crea-Antolin Co., Ltd., has been acquired by Anira a South Korea-based company engaged in Acquired Walter Pack, S.L., a Spain- Inversiones SL from the Antolin Acquired Canada-based interiors manufacturing of plastic foam molding, to based company specializing in the family, for US$ 303mn operations of Magna International CEPLA Co., Ltd. and CREA Co., Ltd. For design and production of high-quality (EV/EBITDA: 4.3x) Inc, for US$ 525mn US$ 9mn (EV/EBITDA: 3.1x) decorative surfaces and parts

2005 2013 2015 2017 2018 2020

Instituto Sectorial de Promocion y Gestion de Empresas, S.A., an Sold seating and metal business unit of Haselbeck Formen- und Acquired AED Engineering GmbH, acquisition vehicle backed by several financial sponsors and strategics, the Company to Lear Corporation for Werkzeugbau GmbH, a a Germany-based engineering including the Company, made a tender offer to acquire a 63.4% stake it US$ 308mn Germany-based manufacturer service provider for embedded does not already own in CIE Automotive SA, a Spain-based of plastic injection mold electronics manufacturer and supplier of automotive components and sub- assemblies; ultimately, 23.2% of the stock was tendered for US$ 590mn

Source: Company Website, CapitalIQ, Merger Market, Industry News

3838 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

3939 Private & Confidential Corporate Venture Capital Investing in Auto Tech – Overview

▪ With pressure rising due to electrification, automation, and alternative mobility solutions, participants across the value chain of the automotive industry are in a race to make investments and acquisitions across these fields. ▪ To facilitate these growth and diversification efforts, major OEMs such as BMW, GM, Volvo, and Audi, and Tier 1 suppliers such as Bosch, Faurecia, Hella, Metalsa (Proeza), and ZF Friedrichshafen have established their own corporate venture capital (“CVC”) funds.

OEMs Tier 1 Suppliers

VENTURES

ALLIANCE VENTURES

VENTURE CAPITAL

Major automotive OEMs and Tier 1 suppliers have established their own CVCs to strengthen their operations and remain competitive by cultivating innovative business and technology

Source: CB Insights

4040 Private & Confidential CVCs Investing in Auto Tech – Benchmark Analysis – OEM

Geography of Targeted Verticals Portfolio Companies Size AI/Data Energy Name Stage Auto- Customer Figures North South Connect- Shared Electri- /Cyber Advanced Services/ Europe Asia nomous AR/VR Experience Others America America ivity/IoT Mobility fication Security/ Materials Optimi- Driving /Digital Life Blockchain zation All startup Alliance Ventures(1) Committed stages, Amsterdam, Netherlands US$ 1bn growth ✔ X ✔ ✔ ✔ ✔ X ✔ ✔ X ✔ ✔ ✔ Enterprise 2.0 www.alliance- (2018- stage 2022.com/ventures 2023) (prefers Series A/B)

Seed, BMW i Ventures(1) Invests early stage, Mountain View, CA, USA US$ 1- late stage ✔ X ✔ ✔ ✔ ✔ ✔ ✔ ✔ X ✔ ✔ ✔ X www.bmwiventures.com 25mn (prefers Series A/B)

Daimler Tech Invest (Corporate M&A and Incubation, Venture) seed/ FinTech/ Stuttgart, Germany NA startup, ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ X ✔ ✔ X InsureTech www.daimler.com/innovatio late stage n/venture/techinvest- venture en.html

Advanced GM Ventures Invests Early and manufacturing, Warren, MI, USA US$ 1- growth ✔ X ✔ ✔ ✔ ✔ X X ✔ X ✔ X ✔ value chain, www.gmventures.com 25mn stage business model

Seed, Hyundai Cradle early and San Francisco, CA, USA NA ✔ X ✔ ✔ ✔ ✔ X X ✔ X X ✔ ✔ Robotics growth www.cradleinc.com stage

(1) More detailed profile provided on following pages Note: Based on publicly available information Source: Company Websites, Industry News, Capital IQ, CB Insights, Industry News

4141 Private & Confidential CVCs Investing in Auto Tech – Benchmark Analysis – OEM (Cont’d)

Geography of Targeted Verticals Portfolio Companies Size AI/Data Energy Name Stage Auto- Customer Figures North South Connect- Shared Electri- /Cyber Advanced Services/ Europe Asia nomous AR/VR Experience Others America America ivity/IoT Mobility fication Security/ Materials Optimi- Driving /Digital Life Blockchain zation Incubation, InMotion Ventures pre-seed, Financial Invests (Jaguar Land Rover) seed, early services US$ 1- ✔ X ✔ ✔ X ✔ ✔ ✔ ✔ X X ✔ X London, UK stage and (leasing and 25mn www.inmotionventures.com startup up insurance) to series B

Business models Invests Early and relating to Porsche Ventures US$ 1- growth ✔ X ✔ ✔ X X X X ✔ ✔ X ✔ X customer Ludwigsburg, Germany 25mn stage experience and digital lifestyle

Aftermarket SAIC Venture Capital Invests Early and product and Menlo Park, CA, USA US$ 1- growth ✔ X X ✔ ✔ ✔ X X ✔ X ✔ X ✔ disruptive www.saicvc.com 20mn stage business models

Toyota AI Ventures Early and Los Altos, CA, USA NA growth ✔ X ✔ ✔ ✔ ✔ ✔ ✔ ✔ X X X X Robotics www.toyota-ai.ventures stage

Volvo Group Venture Capital AB Invests in Gothenburg, Sweden companies Early/mid/ Infrastructure www.volvogroup.com/en- with sales late/growth ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ and charging en/about- X X X X of ~US$ stage services us/organization/other- 1-10mn entities/volvo-group-venture- capital.html

Note: Based on publicly available information Source: Company Websites, Industry News, Capital IQ, CB Insights, Industry News

4242 Private & Confidential CVCs Investing in Auto Tech – Benchmark Analysis – Tier 1 Suppliers

Seed, co-pace GmbH start-up, Hannover, Germany NA early/mid/ ✔ X X X X X X ✔ X X X ✔ X X www.co-pace.com late/growth stage

Denso Ventures Kariya, Japan Invested www.denso.com/global/en/ US$ 100mn Advanced Early stage X X X ✔ ✔ ✔ ✔ ✔ ✔ X X X X news/news- (2014- hardware releases/2018/20181206- 2018) g01/

F+ Ventures Early and Logistics, fleet Istanbul, Turkey NA growth ✔ X ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ X X management www.fplus.ventures stage

Faurecia Ventures(1) Nanterre, France Invests Seed, early www.faurecia.com/en/innov US$ 3- and growth ✔ X ✔ ✔ ✔ X X X ✔ X ✔ ✔ ✔ X ation/faurecias-innovation- 20mn stage ecosystem/faurecia- ventures

Vehicle Early/mid lightning Hella Ventures(1) Invests stage technologies, San Francisco, CA, USA US$ 0.1- ✔ X ✔ ✔ ✔ ✔ X ✔ ✔ X X ✔ ✔ (prefers logistics, www.hellaventures.com 5mn Series A/B) hologram, robotics

(1) More detailed profile provided on following pages Note: Based on publicly available information Source: Company Websites, Industry News, Capital IQ, CB Insights, Industry News

4343 Private & Confidential CVCs Investing in Auto Tech – Benchmark Analysis – Tier 1 Suppliers (Cont’d)

Hitachi Ventures GmbH Seed, early München, Germany First fund of stage Smart www.linkedin.com/company ✔ X ✔ X ✔ ✔ X X ✔ X X ✔ ✔ $150 mn (Series infrastructures /hitachi-ventures- A/B/C) gmbh/about/

MAHLE Corporate Venture Capital Invests up Stuttgart, Germany to "several Early stage ✔ X ✔ X X X X X X X X X ✔ X www.mahle.com/en/about- million mahle/corporate-venture- EUR" capital

Next Shed Intelligent Esslingen, Germany NA Early stage X X ✔ X ✔ ✔ X X X X X X ✔ acoustic www.nextshed.io solutions

Robert Bosch Venture Seed, early Robotics, Capital GmbH(1) and growth Invests < web-based Stuttgart-Weilimdorf, stage ✔ X ✔ ✔ ✔ ✔ X ✔ ✔ ✔ X ✔ ✔ EUR 15 mn business Germany (prefers models www.rbvc.com early stage)

Zukunft Ventures GmbH Growth Friedrichshafen, Germany NA ✔ X ✔ ✔ ✔ ✔ ✔ X X X ✔ X ✔ X stage zukunft-ventures.zf.com

(1) More detailed profile provided on following pages Note: Based on publicly available information Source: Company Websites, Industry News, Capital IQ, CB Insights, Industry News

4444 Private & Confidential CVCs Investing in Auto Tech – Key Profiles – OEM – Alliance Ventures

Alliance Ventures Key Portfolio Overview

▪ Overview: Alliance Ventures was established in 2018 as a WeRide (JingChi): Level 4 autonomous robo-taxi strategic venture capital fund operated by Renault-Nissan- ▪ Sector: Autonomous Driving Mitsubishi. Alliance Ventures is based in Amsterdam, ▪ Netherlands. Investment Round: Series A ▪ Status: Active (since Oct 2018) ▪ Investment Thesis: Alliance Ventures has committed US$ 1 bn by 2023 to invest in new mobility, autonomous driving, connected services, EV & energy and Enterprise 2.0. The Mobility House: EV charging & energy storage ▪ : Electrification & Energy Services ▪ Funding Preference: Alliance Ventures makes investments at Sector all startup stages, focusing mainly in Series A & B, with follow-on ▪ Investment Round: Growth investments to support growth. ▪ Status: Active (since Jun 2019) Key Team Tekion: Cloud platform for car dealerships ▪ : Head Christian Noske ▪ Sector: AI/Data & Digital Life ▪ Ryan Armbrust: Partner ▪ Investment Round: Venture (Series unknown) ▪ Matthieu de Chanville: Managing Director ▪ Status: Active (since Jan 2019) Sector Focus Ionic Materials: Conductive polymer for batteries ▪ Sector: Advanced Materials/Electrification ▪ Investment Round: Series C Connectivity/IoT Autonomous Driving Electrification ▪ Status: Active (since Jan 2018)

Transit: Multi-modal transportation mobile app ▪ Sector: Customer Experience/Digital Life AI/Data/Cyber Customer Energy Advanced ▪ Security/ Experience/ Services/ Investment Round: Series B Materials Blockchain Digital Life Optimization ▪ Status: Active (since Nov 2018)

Source: Company Website, Capital IQ, MergerMarket, Crunchbase, Industry News

4545 Private & Confidential CVCs Investing in Auto Tech – Key Profiles – OEM – BMW i Ventures

BMW i Ventures Key Portfolio Overview

▪ Overview: BMW i Ventures was established in 2011 as BMW’s May Mobility: Self-driving micro-shuttles corporate venture capital fund. BMW i Ventures is based in ▪ Sector: Autonomous Driving Mountain View, CA, USA. ▪ Investment Round: Seed, Series A & B ▪ Investment Thesis: BMW i Ventures typically invests US$ 1-25 ▪ Status: Active (since Feb 2018) mn in autonomous driving, digital car and automotive cloud, e- mobility, artificial intelligence and data, Industry 4.0, shared and on-demand mobility, customer digital life and energy services. Yellowbrick: Bick data warehouse solutions ▪ : AI/Data/Cyber Security/Blockchain ▪ Funding Preference: BMW i Ventures invests in seed, early Sector stage, late stage (prefers Series A/B). BMW i Ventures likes to ▪ Investment Round: Series C lead, but co-invests in strong syndicates as well. ▪ Status: Active (since Jun 2019) Key Team CelLink Corporation: Flexible circuits(1) ▪ : Managing Partner Dr. Ulrich Quay ▪ Sector: Electrification ▪ Marcus Behrendt: Partner ▪ Investment Round: Series B ▪ Michael Hammer: CFO ▪ Status: Active (since Oct 2019) Sector Focus Scoop Technologies: Carpooling ▪ Sector: Shared Mobility ▪ Investment Round: Seed Connectivity/ Autonomous Shared Mobility Electrification ▪ IoT Driving Status: Active (since May 2016)

Carbon: Digital manufacturing ▪ Sector: Advanced Materials AI/Data/Cyber Customer Energy Advanced ▪ Security/ Experience/ Services/ Investment Round: Series C Materials Blockchain Digital Life Optimization ▪ Status: Active (since Aug 2015) (1) Transaction included participation from other investors such as Robert Bosch Venture Capital, Ford Motor Company, 3M Ventures, among others Source: Company Website, Capital IQ, MergerMarket, Crunchbase, Industry News

4646 Private & Confidential CVCs Investing in Auto Tech – Key Profiles – Tier 1 Suppliers – Faurecia Ventures

Faurecia Ventures Key Portfolio Overview

▪ Overview: Faurecia Ventures was established in 2016 as GuardKnox: Automotive cyber security Faurecia’s investment fund to advance Faurecia’s innovation ▪ Sector: Cyber Security strategy by identifying, incubating and investing in startups. ▪ Faurecia Ventures is based in Nanterre, France. Investment Round: Series A ▪ Status: Active (since May 2019) ▪ Investment Thesis: Faurecia Ventures typically invests US$ 3- 20 mn into companies with relevant technologies for sustainable mobility and the cockpit of the future in order to bring a TactoTek: Injection-molded structural electronics technological advantage and create long-term value for Faurecia. ▪ Sector: Advanced Materials ▪ Funding Preference: Faurecia Ventures invests in seed, early ▪ Investment Round: Venture & Series B and growth stages. ▪ Status: Active (since Dec 2016) Key Team Canatu: Conductive films and touch sensors ▪ : President Eric de La Gironnière ▪ Sector: Advanced Materials ▪ Dana Lowell: Global Director, Open Innovation & Technology ▪ : Growth Ventures Investment Round ▪ Status: Active (since Sep 2016) Sector Focus PowerSphyr: Wireless charging ▪ Sector: Connectivity & Energy Services ▪ Investment Round: Venture & Series A Connectivity/ IoT AI/Data/Cyber Security/ Blockchain ▪ Status: Active (since May 2018)

Enogia: Energy recovery ▪ Sector: Energy Services/Optimization Customer Experience/ Energy Services/ Advanced Materials ▪ : Venture (Series unknown) Digital Life Optimization Investment Round ▪ Status: Active (since Mar 2018)

Source: Company Website, Capital IQ, MergerMarket, Crunchbase, Industry News

4747 Private & Confidential CVCs Investing in Auto Tech – Key Profiles – Tier 1 Suppliers – HELLA Ventures

HELLA Ventures Key Portfolio Overview

▪ Overview: HELLA Ventures was established in 2015 as the Excelfore: Smart mobility networks corporate venture capital arm of HELLA. HELLA Ventures is ▪ Sector: Connectivity/IoT based in San Francisco, CA, USA. ▪ Investment Round: Series B ▪ Investment Thesis: HELLA Ventures invests US$ 0.1-5 mn if ▪ Status: Active (since Sep 2018) there is a strong benefit to the startup and Hella to maximize new product development in automated driving, lighting technologies, digitization, electrification and software sectors. BreezoMeter: Real-time air quality & pollution data ▪ : Connectivity/IoT ▪ Funding Preference: HELLA Ventures invests in early/mid Sector stage and prefers Series A/B. HELLA Ventures co-invests/co- ▪ Investment Round: Series B leads with strong institutional leads. ▪ Status: Active (since Sep 2018) Key Team Apex.AI: software for mass deployment in L2-L5 ▪ : Partner & Head Marco Marinucci ▪ Sector: Autonomous Driving ▪ : Associate Fabian Hoffmann ▪ Investment Round: Venture ▪ Status: Active (since Dec 2019) Sector Focus Light Field Lab: Holographic ecosystem ▪ Sector: Customer Experience/Digital Life ▪ Investment Round: Series A Connectivity/IoT Autonomous Driving Electrification ▪ Status: Active (since Aug 2019)

Yptokey: Blockchain based security (digital keys) ▪ Sector: AI/Data/Cyber Security/Blockchain AI/Data/Cyber Customer Experience/ Energy Services/ ▪ : Incubation Security/Blockchain Digital Life Optimization Investment Round ▪ Status: Spun-off (Jun 2018)

Source: Company Website, Capital IQ, MergerMarket, Crunchbase, Industry News

4848 Private & Confidential CVCs Investing in Auto Tech – Key Profiles – Tier 1 Suppliers – Robert Bosch Venture Capital

Robert Bosch Venture Capital Key Portfolio Overview

▪ Overview: Robert Bosch Venture Capital (“RBVC”) was Sensoro: End to end IoT solution provider established in 2007 as the corporate venture arm of Robert ▪ Sector: Connectivity/IoT Bosch. RBVC is based in Stuttgart-Weilimdorf, Germany. ▪ Investment Round: Series B, C & D ▪ Investment Thesis: RBVC invests up to EUR 15 mn for a 5-25% ▪ Status: Active (since Apr 2017) equity position in companies engaged in autonomous driving, AI/deep learning, IoT, distributed ledgers, analytics, next generation computer architecture, AR/VR, and mobility solutions. AImotive: Automotive computer vision ▪ : Autonomous Driving & AI ▪ Funding Preference: RBVC prefers to syndicate investments Sector with existing/new investors. Bosch and can take the lead, co-lead ▪ Investment Round: Series C or follow as necessary. ▪ Status: Active (since Jan 2018) Key Team CelLink Corporation: Flexible circuits(1) ▪ : Managing Director & Co-Head Dr. Ingo Ramesohl ▪ Sector: Electrification ▪ Dr. Hongquan Jiang: Partner ▪ Investment Round: Series B ▪ Philipp Rose: Managing Director ▪ Status: Active (since Oct 2019) Sector Focus Allegro.AI: deep-learning computer vision platform ▪ Sector: AI/Data AI/Data/Cyber ▪ Investment Round: Series A Connectivity/ Autonomous Electrification Security/ IoT Driving ▪ Status: Active (since Apr 2018) Blockchain EpiGaN: epitaxial wafer (epi-wafer) materials ▪ Sector: Electrification & Advanced Materials Customer Energy ▪ Investment Round: Venture in Jul 2011 Advanced AR/VR Experience/ Services/ Materials (Series unknown) Digital Life Optimization ▪ Status: Realized (sold to Soitec S.A. in May (1) Transaction included participation from other investors such as BMW i Ventures, Ford Motor Company, 3M Ventures, among others 2019) Source: Company Website, Capital IQ, MergerMarket, Crunchbase, Industry News

4949 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

5050 Private & Confidential Team Biographies

Blake Davies George Caraberis Carey Hall Senior Managing Director Senior Managing Director Senior Managing Director

Mr. Davies is responsible for the firm's activities in Mr. Caraberis is the senior member at Fredericks Mr. Hall is responsible for the firm's Latin American Southern Europe and North America. He has two Michael & Co., responsible for the firm's activities in business. He advises multinational corporations and decades of experience advising companies in numerous Northern Europe and North America. He has advised substantial family enterprises on mergers, acquisitions, industries including automotive, food and beverage, numerous companies on cross-border mergers, divestitures, leveraged buyouts, restructurings, strategic paper and packaging, consumer products and specialty acquisitions, divestitures and strategic alliances across a alliances and joint ventures. chemicals, among others. Mr. Davies has advised wide range of industries including industrial machinery corporations in the auto, trucking, rail and agriculture and equipment, transportation, logistics and material Prior to joining Fredericks Michael, Mr. Hall was Group equipment industry. Clients in these sectors include handling, food and beverage, pharmaceutical/life Head at UBS Securities LLC, in charge of UBS' Sisu, AGCO, Circle C Trucking, CAF, among others. sciences, consumer goods, telecommunications, media investment throughout Latin America. Previously, Mr. Mr. Davies is fluent in Spanish and regularly advises and technology. Hall was Senior Managing Director at Bear Stearns & clients on matters related to Spain and Latin America. Co., Inc. responsible for investment banking activities in Mr. Caraberis holds an MBA from Adelphi University Latin America. Prior to joining Fredericks Michael, Mr. Davies worked at Graduate School of Business Administration and a BA in Nomura Securities and The Colgate Palmolive Economics from Brown University. He was named Company. Knight, First Class, of the Order of the White Rose of Mr. Hall holds an MBA from George Washington Finland by the President of the Republic of Finland. He University and Investments and a BA from Denison He holds an MBA from the American Graduate School of is a Director and past President of the Finnish American University. He is both a U.S. and Brazilian national. Mr. International Management (Thunderbird) and a BA in Chamber of Commerce, and a Director of the Brown Hall is a shareholder in Fredericks Michael and a Finance from Stetson University. Mr. Davies is a University Sports Foundation. Mr. Caraberis is a member of its Board of Directors. shareholder in Fredericks Michael and is Chairman of shareholder in Fredericks Michael & Co. and a member the Board of Directors. of its Board of Directors.

5151 Private & Confidential Team Biographies (Cont’d)

Michael Van Vleck Enrique Gaitan Marcos Alonso Doerfler Senior Advisor Managing Director, Americas Managing Director, Southern Europe

Mr. Van Vleck is responsible for FM&Co.'s auto parts Mr. Gaitan, a Managing Director at FM&Co., advises Mr. Alonso, a Managing Director at FM&Co., advises and mobility industry sectors and their convergence with Fredericks Michael’s clients throughout Latin America, Fredericks Michael clients throughout Southern Europe the clean energy movement. Mr. Van Vleck will be the U.S. and Southern Europe. He has worked on M&A and has significant M&A experience in the United involved in all aspects of the potential assignment. projects in numerous sectors including automotive, States, Europe, Asia and Latin America. paper & packaging, and consumer product. Clients He possesses significant professional experience with include Rautaruukki Oyj, Femsa, Sigma, Gondi, Prior to joining Fredericks Michael & Co. Mr. Alonso was respect to merger and acquisitions, private equity Bachoco, AlEn, Lala, among others. Head of Corporate Development at Grupo Derivados investments and general management. Most recently, Forestales, a leading manufacturer of specialty Mr. Van Vleck was the president and founder Prior to joining FM&Co., Mr. Gaitan was Chief Financial chemicals based in Barcelona, Spain. He also worked of GeoGlobal Energy LLC, a US$ 300mn fund Officer at Marhnos, one of Mexico’s most relevant as an auditor at the Barcelona office of KPMG. and developer of utility-scale geothermal energy projects Construction and Development Firms, focusing on around the world. Infrastructure, Industrial, Housing and Real Estate Mr. Alonso holds an MBA and BS in Business projects. While at Marhnos, Mr. Gaitan led several Administration from the ESADE Business School. He is Mr. Van Vleck has a BA from the University of New financial restructuring projects, as well as the successful a Spanish national and speaks Catalan, Spanish, Hampshire and an MA/MBA from the University of placement of a CKD (Equity Position in Infrastructure German, and French. Pennsylvania and The Wharton School. He speaks projects) in the Mexican Stock Exchange. English and Spanish and is a US Citizen. Mr. Gaitan holds an MBA from Stanford University and a BS in Mechanic-Electric Engineering from Universidad Nacional Autonoma de Mexico. He is a national of Mexico.

5252 Private & Confidential Team Biographies (Cont’d)

Massimo Brambilla Mauricio Gojman Mikael Vehaskari Managing Director, Southern Europe Executive Director, Americas Executive Director, Northern Europe

Mr. Massimo Brambilla, a Managing Director at FM&Co., Mr. Gojman has over a decade of experience in Private Mr. Vehaskari advises Fredericks Michael & Co.’s clients oversees FM&Co.’s activities in Italy. He has advised Equity and Investment Banking activities across Latin in Northern Europe and also has significant M&A numerous clients on cross-border mergers, acquisitions, America and the Caribbean. He has led several experience relative to the United States. Mr. Vehaskari divestitures, privatizations, expansions and private successful M&A projects in industrials, food & has over 17 years’ experience advising clients in the placement transactions throughout Italy, Europe and beverages, oil & gas, healthcare, paper & packaging, United States as well as Europe in the areas of North America. financial services, telecommunications, and consumer corporate finance, corporate financial strategy and goods. financial risk management. Prior to joining Fredericks Michael, Mr. Brambilla was a Director in the Milan offices of Abaxbank and Prior to joining Fredericks Michael & Co., Mr. Gojman Most recently, Mr. Vehaskari worked for PwC's Euromobiliare Corporate Finance as well as a Vice worked at Blue Equity, BroadSpan Capital and JP Corporate Finance group in Helsinki, Finland for 5 years President in the Milan office of Société Générale Morgan (Paper & Packaging Investment Banking advising clients in both domestic and cross-border Investment Banking. Group). corporate finance engagements in several industries, including food & beverage, contract manufacturing, Mr. Gojman holds an MBA with High Distinction from the paper and packaging, industrial products, healthcare IT Mr. Brambilla sits on the board of directors of illimity Harvard Business School and a BA/MA in International and communication technology. Prior to his advisory Bank, a bank listed on the main segment of the Italian Economics and Finance from Brandeis University. He is positions Mr. Vehaskari worked as Treasury Manager Stock Exchange. a dual Mexico/US national. with Tetra Pak USA. Mr. Vehaskari is a CFA Charterholder and holds an MBA from the American Graduate School of International Management (Thunderbird) and a BA from Washington University in St. Louis. He is a Finnish and United States dual national.

5353 Private & Confidential Team Biographies (Cont’d)

Fernando Szterling Director, Americas

Mr. Szterling, a Director of FM&Co., has more than 15 years of experience in Investment Banking and Capital Markets. He advises clients on mergers, acquisitions, capital raises and private placements. His clients include multinational corporations, financial sponsors, and private and family-owned companies across Latin America, where he has focused primarily on Brazil, Chile, Mexico, Colombia and Peru. Mr. Szterling’s industry experience include industrials, food & beverage, construction and building materials, consumer/retail, technology, healthcare, and financials.

Mr. Szterling is a dual national of Brazil and the U.S., fluent in English, Portuguese, and Spanish, with proficiency in French, Italian, and Japanese.

He holds LL.B. and Master of Laws degrees from University of São Paulo, an LL.M. from Harvard University, and a J.D. from Columbia University with Kent Scholar honors.

5454 Private & Confidential Table of Contents

I. Introduction to FM&Co.

II. Auto Sector – Key Trends

III. Auto Parts Suppliers – Strategic Development by Segment

A. Powertrain

B. Chassis

C. Interiors

IV. Corporate Venture Capital Investors in the Automotive Space

V. Team Biographies

VI. Appendix

5555 Private & Confidential Technology Shifts – EV Powertrain Architecture

P2.5 P3a P4 P4 P3b P2 EV P1 EV

Belt Integrator Crankshaft Integrated Hybridized Post-Transmission Electric Axles & P0 P1 Starter Generator P2 Starter Generator P2.5 Transmissions P3 Hybrid P4 EV eDrive Systems ▪ eMachine is assigned to the ▪ eMachine is assigned to the ▪ eMachine is integrated in the ▪ eMachine is assigned to the ▪ For Hybrid (P4) or Battery EV transmission input shaft between transmission input shaft between hybrid transmission transmission output shaft (either (BEV) applications ICE and coupling (P1) coupling and transmission ▪ No change in installation length, post transmission or on the rear ▪ Axle drive with integrated ▪ No electric driving possible ▪ Boosting for improved no additional clutch between ICE axle) eMachine and optionally ▪ eMachine is connected with belt acceleration and transmission ▪ Improved driving dynamics integrated inverter drive to the ICE ▪ Pure electric driving enabled in ▪ Boosting for improved ▪ Pure electric driving enabled in ▪ improved driving dynamics ▪ Recuperation certain driving situations acceleration, torque fill capability certain driving situations through eAWD functionality ▪ Start-Stop functionality ▪ Fuel saving potential 10-12% for ▪ Fuel saving potential 10-13% for ▪ Recuperation ▪ CO2 reduction potential from 10- 48 Volt systems, up to 23% for 48 Volt systems, up to 23% for 12% for 48 Volt systems through ▪ Fuel saving potential 3-7% ▪ Fuel saving potential up to 12% high voltage systems high voltage systems for 48 Volt systems 25% for high voltage solutions to 100% for BEV applications

With the trend towards electrification, suppliers must innovate and adapt to a wide range of rapidly emerging powertrain architectures

Source: Magna

5656 Private & Confidential Technology Shifts – Impact on Powertrain Components

▪ BEVs, compared to ICEs, differ considerably in their powertrain architecture consisting of electric motors, battery packs, and power electronics instead of exhausts, transmissions, and engine components of traditional ICE vehicles. The shift to BEVs will reduce demand for components of an ICE powertrain.

▪ A BEV engine contains approximately 200 components vis-à-vis approximately 1,400 components (engine and transmission) in an ICE vehicle.

▪ The resulting lower friction and lower momentum of inertia also reduce the energy required, making the EV powertrain – having fewer components – simpler to repair with lower risk of failure.

ICE Powertrain BEV Powertrain

▪ Internal combustion engines ▪ Lithium-ion battery ▪ Inverter ▪ Differential ▪ Starter generators ▪ Electric motor ▪ Axles (eAxles) ▪ Clutch ▪ Engine auxiliary ▪ Power distribution module ▪ CV joint ▪ Axles ▪ Parts Catalyst and particulate matter ▪ 12V lead-acid battery ▪ Charging socket ▪ CV joint Reduction ▪ Multi-speed gearbox ▪ DC/DC convertor ▪ Fuel tank ▪ 12V lead-acid battery ▪ Muffler ▪ Differential

Approximately one third of the value of the automotive supply chain is powertrain-related and threatened by the shift to electric powertrains

Source: KPMG

5757 Private & Confidential Technology Shifts – Impact on Gearboxes

▪ Gearboxes are expected to remain important in EVs. Equipping EVs with multi-gear transmissions helps reduce the amount of current needed to drive the electric motor and increase the range and performance of the vehicle. Furthermore, these transmissions are compact, more efficient, and can deliver higher vehicle speed.

▪ For these reasons, major gearbox manufacturers, such as Bosch, BorgWarner, and GKN, continue to innovate and develop new drive system technologies that are physically compact, cost-attractive, and efficient.

Bosch’s modular eAxle drive system GKN’s eTwinster eAxle transmission

BorgWarner’s Integrated eGear Drive Module

Scalable gear solutions for EVs are paving their way into the market

Source: The Drive, EVS 28, Bosch, BorgWarner, GKN

5858 Private & Confidential Technology Shifts – Impact on Gearboxes (Cont’d)

▪ Bosch’s eAxle is a compact, cost-attractive electric drive solution for BEVs and hybrid applications. The electric motor, power electronics and transmission are combined in a compact unit directly powering the vehicle's axle.

▪ This helps in making electric drives less complex and simpler. Additionally, the powertrain becomes cheaper, more compact and efficient.

A B Electric Motor Power Electronics

Transmission/Gearbox

The modular eAxle drive system is compact, cost-attractive and efficient

Source: Bosch

5959 Private & Confidential Technology Shifts – Impact on Gearboxes (Cont’d)

▪ BorgWarner’s Integrated Electric Drive Module (“eDM”) is a compact, easy-to-install package comprising BorgWarner’s state-of-the-art electric drive motor technology and eGearDrive transmission.

▪ Featuring patented High Voltage Hairpin (“HVH”) technology, BorgWarner’s HVH 250 motor delivers performance with over 95% efficiency. Furthermore, the eGearDrive transmission offers a highly efficient gear train and compact, low-weight design with over 97 % efficiency.

▪ For battery-powered electric and P4-type hybrid vehicles, the combination delivers more miles from every charge.

+ + =

EV Transmission Electric Drive Motor Power Electronics Integrated Electric Drive eGearDrive Module

The electrification of drive systems, including gearboxes, is currently underway

Source: BorgWarner

6060 Private & Confidential Key CVC Trends and Takeaways – Increasing Activity

▪ Over the past decade, CVC deals have increased globally in aggregate deal value (US$ 9.7 billion in 2008 to US$ 66.8 billion in 2018) and deal count (673 in 2008 to 1,443 in 2018).

▪ Corporates currently account for over 23% of all venture deals.

Global CVC Investment Activity Global CVC Investment Landscape

$90.0 1600 1,460 1,443 1,402 1,427

$80.0 1,327 1400

$70.0 66.8 1,081 1200

$60.0

1000 842 $50.0

716 800 673 $40.0 37.3 36.3 36.5 562

600

$30.0 475 26.3

400

$20.0 12.9 15.0 9.7 11.6 8.0 200 $10.0 6.4

$- 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Deal Value ($ B) Deal Count

Corporates are investing in venture capital deals at an unprecedented rate

Source: 500 Startups

6161 Private & Confidential Key CVC Trends and Takeaways – Which Corporates Should Invest

▪ Most corporates with over US$ 1 billion in annual revenue are likely to be comfortable with establishing and financing a CVC fund.

▪ An effective CVC fund typically requires a minimum capital commitment of US$ 50 million to ensure a large enough portfolio of “bets.” Larger funds often invest upwards of US$ 100 million per year for added impact.

Parent Corporates Revenue Size(1)

$100B+ 5.0%

$10B-$100B 33.7%

$1B-$10B 34.7%

$500M-$1B 8.9%

$100M-$500M 5.9%

$0-$100M 8.9%

Undisclosed 3.0%

Larger corporates, such as Brembo, are well positioned to set up a venture capital fund

(1) Based on surveys conducted with over 100 CVC professionals from May-July 2019. Source: 500 Startups

6262 Private & Confidential Key CVC Trends and Takeaways – Why and When Should Corporates Invest

▪ CVCs are often established as a defensive mechanism to hedge against rival, disruptive technologies, business models, and start-ups. CVCs protect their parent company in the longer term.

▪ Corporates operating in industries characterized by volatility and high levels of disruption must continuously innovate or pivot to other spaces. Through venture capital, these companies have the chance to seize competitive opportunities and capitalize on future disruption.

CVC Unit Distribution According to Parent Company’s Industry

Computer software Viability Volatility Automotive

High Marketing & Advertising Expand the reach Fight or flight Transportation/Trucking/Railroad Publishing Utilities Telecommunications Consumer Goods and Services Logistics & Supply Chain Consumer Electronics Industrial Automation Retail 27.0% 51.5%

Chemicals Insurance Aviation & Aerospace Pharmaceuticals Hospital & Health Care 5.0% Education Current Level of Disruption Current Level Durability 15.8% Explore frontiers Vulnerability

Low Disrupt from the core Low Susceptibility to Future Disruption High

Corporates in volatile industries, such as automotive, should be the ones investing now

Source: 500 Startups

6363 Private & Confidential Key CVC Trends and Takeaways – How Should Corporates Invest

▪ Illustrated below are the fundamental decision-making steps aimed at establishing a successful CVC fund.

▪ Most importantly, a CVC fund must have a clear investment thesis aligned with its parent company’s vision and be structured in a manner whereby it invests traditional venture capital “smart money” in conjunction with corporate “strategic money.”

Strategic/Financial Investment Thesis Team Structure Degree of Independency Decide which returns to measure Defining an investment thesis is key Corporate (closely oriented to Autonomous or integrated, (either strategic or financial for alignment with corporate parent organization) or whereas autonomous units returns). 50/50 mix of parent’s growth strategy entrepreneurial (more like a prioritize quick and seamless financial/strategic returns ideal traditional VC fund) procedures and integrated units prioritize alignment and access to Subsequently to defining the return Corporate resembles a “top-down” resources spectrum, seek to optimize culture; more hierarchical and organization structure, incentive structured; entrepreneurial scheme, and expertise resembles a “bottom-up” culture; flat and trial-and-error-based

Opportunity to deploy “smart” VC money in conjunction with “strategic” corporate money

Source: 500 Startups

6464 Private & Confidential FM&Co. Contact Details

New York London São Paulo 430 Park Avenue 67 Grosvenor Street Av. Nove de Julho, 5617 New York, NY 10022 London W1K 3JN Cidade de São Paulo, SP United States United Kingdom Brazil

www.fm-co.com

6565 Private & Confidential