The Mergers and Acquisitions

Opportunities in the Czech Republic

May 2014

Contents

Patria Corporate Finance 3

M&A Market in the Czech Republic 4

Largest Deals in the Czech Republic 6

Key Macroeconomic Indicators 8

Why to Invest in the Czech Republic 10

Why Not to Invest in the Czech Republic 11

Sectors of the Future 12

Contact 13

2

Patria has

successfully

executed 400

transactions with a

cumulative volume of

over USD 10bn

Full-scope investment bank with leading position in the SME segment

World-wide M&A partnership network

Above 100 professionals

Experience and robust track record

20 years of successfull deals execution

Intimate market knowledge

Unprecedented credentials

Patria Corporate Finance Leading M&A boutique

3

M&A Market I

4

Deals by Value and Volume

166

195

153

102

153

3,409

2,009 1,556

1,297

5,709

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

0

20

40

60

80

100

120

140

160

180

200

2009 2010 2011 2012 2013

Number of deals (left hand scale) Total value of deals (EURm, right hand scale)

M&A market:

No barriers for entry of foreign investors

By now a mature market, no longer fast growth territory

=> M&A is the primary way of entering the market or expansion

42% of GDP generated by foreign investors

Note: Data are from Emerging Europe statictics, but real figures are higher than statistics

5

M&A Market II

Share of Sector in Total Value of Deals (2013) Number of Deals by Sector (2013)

Note: Data are from Emerging Europe statictics, but real figures are higher than statistics

Largest M&A Deals (2013)

Target Company Sector Deal Type Buyer Country

of Buyer

Deal

Value

(EURm)

Telefonica Czech Republic as Telecoms & IT Acquisition (65.9%) PPF Group NV CZ 2,467

Net4Gas Utilities Acquisition (100%) Allianz SE; Borealis GE; CA 1,200

Generali PPF Holding Finance & Insurance Minority Stake

Purchase (25%) Assicurazioni Generali SpA Italy 701

Chvaletice power plant Utilities Acquisition (100%) Litvinovska uhelna CZ 158

Mafra as Media &

Entertainment Acquisition (100%) Agrofert Holding AS CZ 97

Severomoravske Vodovody a

Kanalizace Ostrava Utilities

Minority Stake

Purchase (49%) Mitsui & Co Ltd Japan 97

OKK Koksovny Mining (incl. oil &

gas) Acquisition (100%) Metalimex CZ 95

Prazska plynarenska a.s. Utilities Acquisition (51%) City of Prague CZ 78

Teplarna Otrokovice a.s. Utilities Acquisition (100%) Peter Lamich - private investor CZ 39

CKD Kompresory Manufacturing Acquisition (100%) Colfax Corporation US 39

TOP10 Deals

6

Largest M&A Deals (1H 2014)

Target Company Sector Deal Type Buyer Country

of Buyer

Deal

Value

EUR(m)

T-Mobile Czech Republic AS Telecoms & IT Acquisition (39.23%) Deutsche Telekom AG Germany 828

AVAST Software a.s. Telecoms & IT Acquisition (40%) CVC Capital Partners Limited; Summit

Partners LP UK 739

Evraz Vitkovice Steel a.s Manufacturing Acquisition (100%)

Martinley Holdings Limited; Vitect

Services Limited; Nabara Holdings

Limited; Dawnaly Investments Limited;

Hayston Investments Limited

CZ 210

SPAR Ceska Obchodni Spolecnost

s.r.o. Retail Acquisition (100%) Royal Ahold NV

Netherlan

ds 192

LBBW Bank CZ a.s. Financial Services Acquisition (100%) Expobank LLC Russia 80

Profidebt s.r.o Financial Services Acquisition (100%) Intrum Justitia AB Sweden 31

7

TOP Deals

Key Macroeconomic Indicators I

8

-7-6-5-4-3-2-101234

-4

-3

-2

-1

0

1

2

q-q-o-q GDP growth y-o-y GDP growth (right-hand scale)

The 18-months-long recession ended in 2013 Q2,

the annual GDP contraction moderated in 2013

Q3

-25

-20

-15

-10

-5

0

5

10

15

20

Industrial Production HP trend

The seasonally adjusted rate of growth of

industrial production slowed from 4.9% in

November to 4.5% in December

GDP Industrial production (y-o-y in %)

Key Macroeconomic Indicators II

9

The koruna weakened by 4.6% after the intervention on

7 November; it weakened most of all on 18 December

(by 7.6%)

CZK/EUR CZK/USD

Why to Invest in the Czech Republic

Geographical position and

infrastructure

Highly educated and skilled

workforce

Investment incentives

Existing platform for R&D Mentality & culture

10

Why Not to Invest in the Czech Republic

Saturated Ecomy CZK vs. EUR vs. USD Size

Not a Tax paradise Too dependent on

automotive

11

Sectors of the Future

12

Production

– Machines (machine tools, precise machining, processing)

– Plastics (blowing, blow-molding, injection)

– Optics ….

Business Process Outsourcing

– DHL, Olympus, IBM, Accenture….

R&D

– Contract Research Organisations, SW development

Real estate

– Good timing / stage of cycle, especially in residential

Pricing comparable with EU

– Pricing corresponds to developed central economy

– Availability of bank financing for acquisitions

Contact

Tomáš Klápště

Managing Director

Patria Corporate Finance, a.s.

Jungmannova 745/24

110 00 Prague 1

Czech Republic

T: +420 221 424 111

E-mail: klapste@patria.cz

www.patriacf.cz

13