DCF and vIndustry oaluation pverview arameters PPage 47age 47 I Points of view from EY’s global sector The Italian luxury market from an M&A and investor perspective specialists and outside experts Number of completed deals (Italy vs global) Outbound/inbound/domestic — Italian deals Deals by nature of buyer (corporate vs PE) — Italian deals 70 62 18 60 16 18 52 14 6 16 50 48 44 7 14 s 12 l a 2 12 e 40 45 10 11 d 13 10 4 f 31 6 o 40 8 . 30 8 o 32 N 18 6 8 10 w 20 11 9 6 4 6 2 4 8 3 10 13 1 6 ervie 17 12 17 12 2 2 4 v 5 0 - - 2 1 2 2 2 0 0 try o FY11 FY12 FY13 FY14 1Q15 2011 2012 2013 2014 1Q15 2011 2012 2013 2014 1Q15 Italy Global Outbound Inbound Domestic Indus PE Corporate Top luxury houses are looking for unique brands and Italy remains the place to be for its strong backbone Interest from financial investors is related not only to new stylists and talents with a quasi-venture capital of entrepreneurs and companies that come from the high-margin/high-growth companies with clear approach. Strategic investors’ interest is in art of doing and the unparalleled tradition in the use positioning, but also to fashion houses that, although supporting/investing in product excellence: of hands in manufacturing, crafting and made-to- small, have a good equity story to grow, operating in uniqueness of brand, made in Italy, craftsmanship, measure products. Today, the most illuminated market niches with proved capabilities to expand superior quality and privileged access to raw entrepreneurs are becoming aware that such business in fast growing countries. In all cases, the materials and heritage. These qualities are key to knowledge and art need to be renewed and presence of a relevant share of international sales is being positioned as high end, absolute luxury and to transferred to the younger generations, and they are key to proving the scalability of the business also on winning in certain niche segments (tailor-made suits, therefore investing in training in order to transmit the foreign markets. precious leather goods, jewels, etc.). traditions of old experience and craftsmen to them. The luxury and cosmetics financial factbook 2015