Truck and trailer

components –
Success factors
for suppliers in
specialized
markets
Market study

Munich, May 2017

Management summary (1/2)

The truck and trailer component market has shown cyclical movements in the past fostered mainly by short-term
business climate change, industrial production and market regulations (e.g. fuel economy standards and technological
requirements)
We consider articulated and rigid trucks in the medium/heavy duty segment as well as semitrailers and drawbar
trailers when analyzing the truck and trailer market development respectively:
> Global production of medium/heavy duty trucks is expected to grow at c.3% p.a. from 2017 to 2021 with articulated
truck production outgrowing at c.5% p.a.
> Key regional markets are dominated by local truck OEMs; market shares of the top-5 players sum up to >70%
> With regard to the global trailer market, we forecast a moderate increase in production units at c.3% growth p.a.
from 2017 to 2021
> While semitrailers growing at c.2% p.a. still represent the predominant type of trailers in all markets (share of c.91%
at a global level), we expect drawbar trailer production to outgrow at c.10% p.a., particularly driven by the Chinese
market
With regard to the global truck/trailer component first-fit market, we mainly focus on the production of fifth wheels,
landing gears, hydraulic cylinders, disk & drum brakes and trailer axles1) to derive trends for market development until
2021:
> The global truck/trailer component production is expected to grow at c.4% p.a. from 2017 to 2021
> While the production of trailer axles, which accounts for c.76% of the component market, shows average growth,
the production of fifth wheels and disk & drum brakes is forecasted to outperform market growth at c.5% p.a.
1) All CKD fitted components are considered in country of assembly. Aftermarket revenues are not included.

Source: Roland Berger 2

Management summary (2/2)

The global fifth wheels and landing gear markets are dominated by Jost and SAF Holland who reach a combined
market share of c.70% – Fuwa as strong local player in Asia-Pacific

Within the commercial vehicle (CV) supplier industry, market players need to manage a broad variety of short and
long term challenges, setting high barriers for new market entrants. To meet these challenges, we identified internal
and external key success factors for CV suppliers:
> Internal factors: Strong distribution network, powerful customer management, unique portfolio of branded products
and services, global presence, globally integrated sourcing, lean and efficient production and value chain
management
> External factors: Strong brand and reputation, strong customer relationship, competitive prices, high technical
capabilities, innovation power, high delivery performance, high quality, geographic proximity and local content

For further details, please find an extract of our broad study on the following pages

Source: Roland Berger 3

A. Market trends and drivers 6

B. Truck and trailer market development 18

C. Component market development 29

D. Key success factors for component suppliers 42

E. Roland Berger 48

4
A. Market trends
and drivers

5
The global truck and trailer demand is affected by various drivers –
Highest short/mid-term influence by macroeconomic factors
Key trends and drivers for the truck and trailer market
Market trends/ Rele- Direction Description
drivers vance of influence
Short/mid-term GDP growth mainly in India and China, drives global truck and trailer
GDP development1)
Macroeconomic

demand. Rebound of Brazilian and Russian markets

Short-term indicator with high impact on volatility of truck/trailer business, currently
Business climate change
showing no direct source of crisis, pos. trend esp. in North America, China and Brazil
Growth of construction sector with positive impact on truck and trailer demand –
Construction sector
Chinese and Indian construction sectors are clearly outgrowing other markets
Long-term factor of overall transport volume is the rapidly increasing transportation
Development of transport tonnage km
demand driving truck/trailer industry in China and India particularly
Transport
Factors

Development of modal split: Road transport vs. other modes of transport (e.g. rail, waterways) is overall expected
Road vs. other transport to be stable
Fuel prices are expected to remain in the medium-term on low levels helping freight
Fuel prices
forwarders significantly which also positively impacts truck/trailer demand
Emission regulations are putting pressure on truck industry – High predictability for
Emission regulations
Socioeconomic

OEMs from long-term emission standard cycles

Positive impact expected on truck and trailer demand from implemented/proposed
Regulatory environment changes
regulatory changes in the US and China
Population is expected to increase slightly in most regions – Marginal positive impact
Population
on truck and trailer demand
Overall Overall favorable trends

High relevance Low relevance Positive influence Negative influence 1) Including development of raw material prices in particular in Brazil

Source: Market research; Interviews with market participants; Roland Berger 6

Strong GDP growth both historically and forecasted for India/China –
Rebound of Brazilian market directly reflected in truck/trailer demand
Macroeconomic factors: Real GDP development, 2012-21 [% indexed]
CAGR CAGR
Historical Forecast 2012-17 2017-21

7.0% 7.0%
India
China 7.0% 5.7%
Rest of Latin America 0.2% 3.3%
Brazil -0.8% 3.1%
Eastern Europe 3.2% 2.8%
Total 2.6% 2.7%
South Africa 1.4% 2.3%
Asia Pacific 2.2% 2.1%
North America 2.0% 1.9%
Western Europe
1.5% 1.4%
Russia
-0.2% 1.2%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Source: Oxford Economics; Roland Berger; CAGR of "Total" is excluding "other countries" 7
The business climate index currently indicates a positive trend
especially for North America, China and Brazil
Macroeconomic factors: Business climate change1)6), 2012-17 [indexed]
Delta2)
Historical 2016-17

Western Europe 0.7 ppt

Russia 0.3 ppt
North America4) 1.6 ppt
Asia Pacific5) 0.3 ppt
Eastern Europe3)
-0.3 ppt
Ø
China 1.1 ppt
Brazil 1.8 ppt
India 0.2 ppt
South Africa -0.3 ppt

2012 2013 2014 2015 2016 Mar

2017
1) Based on OECD Business confidence index; long-term average = 100; GDP weighted 2) Difference in percentage points within indicated time period 3) Czech Republic, Estonia,
Hungary, Latvia, Poland, Slovakia, Slovenia, Turkey 4) USA, Canada, Mexico 5) South Korea, Japan, Australia, Indonesia 6) No data available for Rest of Latin America
Source: OECD; Roland Berger 8
Positive impact from industrial production growth – Chinese and
Indian construction sectors are clearly outgrowing other markets
Macroeconomic factors: Construction sector1), 2012-21 [EUR trillion]
CAGR CAGR
Historical Forecast 2012-17 2017-21

10,5 10,1
9,9 Total 3.1% 2.9%
10,0 9,6
9,5 9,3
9,1
9,0 8,8
8,6
8,5 8,3
8,1 7.5% 4.0%
8,0 7,8 China 0.3% 1.8%
Western Europe 2.1% 0.5%
3,0 North America 2.5% 3.1%
Asia Pacific 3.7% 7.3%
2,5
India
2,0 0.3% 2.9%
Rest of Latin America
0.1% 2.7%
1,5 Eastern Europe
-2.1% 2.5%
1,0 Brazil
Russia -3.0% 2.6%
0,5 2.2% 2.6%
South Africa
0,0
2012 2013 2014 2015 2016 2017p 2018e 2019e 2020e 2021e
1) Gross output (real)

Source: IHS Automotive (May 2017); Roland Berger 9

 Road transport is expected to grow by c.4% p.a. until 2021 – In
China in particular this drives fleet utilization and production demand
Transportation factors: Road transport tonnage km1), 2012-21 [bn tkm]
CAGR CAGR
Historical Forecast 2012-17 2017-21
22,000 20,744
20,144 Total 5.0% 3.8%
20,000 19,392
18,639
17,887
18,000 17,107
16,273
16,000 15,480
14,731
13,982
14,000
12,000
8.1% 5.5%
10,000 China 2.0% 1.3%
North America 7.8% 5.3%
8,000 India
0.4% 1.5%
6,000 Western Europe
3.3% 2.4%
South Africa
4,000 2.5% 2.9%
Brazil
Russia 3.2% 1.4%
2,000
Eastern Europe 2.9% 2.1%
0
2012 2013 2014 2015 2016 2017p 2018e 2019e 2020e 2021e
1) Based on countries for which data was available

Source: Progtrans; Roland Berger 10

In comparison to other transport modes (e.g. rail, waterways etc.)
global road transport is expected to remain relatively stable
Transportation factors: Modal split road1), 2012-21 [% share of transport volume]
Delta2) Share Delta2)
Historical Forecast 2012-17 2017 (in%) 2017-21
100
1.7 ppt 90.7% 0.1 ppt
90 South Africa
-0.8 ppt 77.9% -0.3 ppt
80 Western Europe 1.8 ppt 76.0% 0.5 ppt
Eastern Europe 3.4 ppt 70.7% 0.7 ppt
70 India
0.0 ppt 56.9% -1.2 ppt
Brazil
60 -0.3 ppt 55.0% 0.0 ppt
North America
50 Total 3.0 ppt 55.0% -0.7 ppt
China 6.0 ppt 53.7% -1.9 ppt
40

30

20

10 Russia 0.8 ppt 10.3% 0.2 ppt

0
2012 2013 2014 2015 2016 2017p 2018e 2019e 2020e 2021e
1) Based on countries for which data was available 2) Difference in percentage points within indicated time period

Source: Progtrans; Roland Berger 11

Fuel prices are expected to remain on historic low levels in the mid-
term benefiting freight forwarders and driving truck/trailer demand
Transportation factors: Fuel price development and cost structure freight forwarders
Fuel prices (spot crude1)) [EUR/barrel] Cost structure freight forwarders [%]

Historical Forec.

82 Other
Other fixed costs
78 variable costs
72 Mid-term price corridor 5%
between EUR 40-60/bbl 5%
Depreciation
expected
10% Fuel
35%
48
46
39 Road tolls 10%

35%
Labor

2012 2013 2014 2015 2016 May 2017 2018

1) Petroleum price as average of spot prices for U.K. Brent, Dubai and West Texas Intermediate/world market price

Source: IMF Primary Commodity Prices Forecast; Deutsche Bank; Roland Berger 12
Emission regulations are putting pressure on truck industry –
However, regulation cycles with high predictability for OEMs
Socio-economic factors: Emission regulations1), 2012-21
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
United States EPA 10 EPA 13 EPA 14 EPA 16 EPA 17 EPA 21

Europe EU V EU VI

Japan EU V EU VI

South Korea EU V EU VI

Brazil EU V

Russia EU III EU IV EU V

Main Cities EU IV EU VI2)

Nationwide EU III EU IV EU VI2)

Beijing EU IV EU V EU VI

Nationwide EU III EU IV EU V

1) Equivalent EU standards shown where appropriate 2) Equivalent EU V standard initially proposed in 11/2015 but removed from a 02/2016 proposal

Source: Cummins; JP Morgan; VDA; Roland Berger 13

Regulatory changes in China and the US are expected to have a
positive effect on the truck and trailer demand
Socio-economic factors: Regulatory environment changes (selective)
Historical Forecast

Overload restrictions Mandatory speed limiting

New "Truck Overload Restriction" NHTSA considers introducing manda-
policies are expected to foster demand tory speed limiting devices which are
especially for HDTs likely to increase truck demand
Decided Proposed

Sept 2016 2018/19

Jan 2017 May 2017 Dec 2017 2018 2018/19 2021

Gigaliner trucks Electronic logging device Infrastructure spending plan

Regulatory change allows extra long ELD may strain fleet capacity and boost Intended government spending plan
trucks which is expected to slightly freight rates since non-compliant fleets may boost freight activity if put in place
foster demand in the short-term will be removed from the market
Decided Decided Considered

Regulatory action has been decided Regulatory action has been proposed Considered regulatory action that has not been proposed yet

Positive influence Negative influence

Source: JP Morgan; BMVI; Roland Berger 14
Newly implemented truck overload restrictions in China, e.g. for car
carriers, positively impacts the local truck and trailer demand
Socio-economic factors: Regulatory environment changes – Example: Chinese TOR
Truck overload restrictions Dimension specifications [mtr]
> No nationwide standard historically in place –
"Unofficial standard" of car-carriers of c.30 mtr length

Height:
with double trailers and two rows on top or on both

4.0
decks
> Implementation of new regulation on truck overload
Length: 22.0 (vehicle)
restrictions (GB1589) in China in September 2016 – No
transition phase permitted 12.0 (trailer)
> Restrictions on truck and trailer dimensions:
– Length of maximum 22.0 meter (mtr) of truck and Car carriage capacity [# vehicles]
trailer combination; trailer with a maximum of 12.0
mtr
– Width of maximum 2.6 mtr
22 6/10
– Height of maximum 4.0 mtr
> Car carriage capacity significantly drops from c.22 cars Historical Actual1)
per vehicle to 6/10 cars per vehicle depending on
trailer type1)
TOR = Truck overload restrictions 1) Semitrailer with a capacity of 6 cars; drawbar trailer with a capacity of 10 cars

Source: Automotive Logistics; Roland Berger 15

Population is expected to increase slightly in most regions –
Marginal positive impact on truck and trailer demand
Socio-economic factors: Population1), 2012-21 [bn people]
CAGR CAGR
Historical Forecast 2012-17 2017-21
5.5 Total 0.8% 0.7%

China 0.5% 0.3%

India 1.2% 1.1%

1.0 1.1% 1.0%

Asia Pacific
1.0% 0.9%
North America 0.5% 0.2%
Western Europe 0.1% 0.1%
0.5 Eastern Europe
0.9% 0.7%
Brazil
1.1% 1.0%
Rest of Latin America
0.0% -0.1%
Russia
1.0% 0.7%
South Africa
0.0
2012 2013 2014 2015 2016 2017p 2018e 2019e 2020e 2021e
1) Does not represent entire world population; includes only relevant regions/countries

Source: Oxford Economics; Roland Berger; CAGR of "Total" is excluding "other countries" 16
B. Truck and trailer
market development

17
Overall, the global production of medium/heavy duty trucks is
expected to grow at c.3% p.a. from 2017 to 2021
Global medium/heavy duty truck1) production by region, 2012-21 [m units]
CAGR CAGR
Historical Forecast 2012-17 2017-21
Total 1% 3%
3.26
3.12 3.17 0.02
3.02 0.02 0.10 ROW -1% 32%
2.99 0.09
0.02 0.10 0.10
0.02 2.85 2.90 0.09
0.02
0.09 0.09 0.06
Rest of Latin America -7% 6%
2.78 0.10
0.02 2.77 0.09
0.02 0.08 0.05 0.06
0.04
0.09
0.02 0.19 0.08
0.14 2.61 0.08
0.02 0.07
0.04 0.52 Russia -1% 2%
0.06 0.01 0.06 0.50
0.13 0.05 0.50
0.06 0.07
0.08 0.04 0.48 Brazil -11% 7%
0.42 0.05 0.48
0.38
0.39
0.48
0.33
0.34 Eastern Europe -10% 14%
0.44 0.32
0.30
0.17 0.18 0.28 Western Europe 4% 2%
0.24 0.26
0.41 0.22
0.46 0.49 0.50 0.52 India 3% 6%
0.49 0.44
0.42 0.41 North America 1% 4%
0.52
0.49 0.44
0.48 0.44
0.45 0.45 0.44 Asia Pacific -2% 0%
0.48 0.45

0.47

1.14
1.02 0.97 1.05 1.09 1.11 1.13 1.16 China 2% 3%
0.93
0.74

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
1) Incl. medium duty trucks (6-15 to) and heavy duty trucks (>15 to); 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on market interviews/data analyses

Source: IHS Automotive (May 2017); JP Morgan; Local market research; Interviews with market participants; Roland Berger 18
In the heavy duty segment, articulated trucks are growing slightly
stronger than rigid trucks – Overall positive outlook
Global medium/heavy duty truck1) production by vehicle segment, 2012-21 [m units]
Medium duty trucks (6-15 to GVW) Heavy duty trucks (>15 to GVW)

Historical Forecast CAGR CAGR Historical Forecast CAGR CAGR

2012-17 2017-21 2012-17 2017-21
1.1 1.1 Total -1% 1% 2.2 Total 2% 4%
1.0
1.9
1.7
0.9 Rigid truck 0% 2%

0.8
0.8
Rigid
-1% 1%
truck

1.3 Articulated truck 3% 5%

1.0
0.9

2012 2017p2) 2021e 2012 2017p2) 2021e

1) Incl. medium duty trucks (6-15 to) and heavy duty trucks (>15 to); 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on market interviews/data analyses

Source: IHS Automotive (May 2017); Local market research; Interviews with market participants; Roland Berger 19
The growth of articulated trucks varies by regions and is driven by
efficiency needs in Europe and an increasing road network in China
Share of articulated trucks in HDT1) segment by region, 2017/2021 [%, k units] (1/2)
Western Europe Eastern Europe North America Russia China

417 437 33 57 230 275 54 67 765 883

100%
10% 10%
34% 32% 34% 33%
40% 40%
56% 52%

90% 90%
66% 68% 66% 67%
60% 60%
44% 48%

2017 2021 2017 2021 2017 2021 2017 2021 2017 2021

> The increase of articulated truck share is driven > Penetration of articulated > Articulated trucks have a > Rapid development of the
by an overall trend towards higher efficiency trucks in North America is medium and stable share of Chinese road network and
– Changing logistic fleet structures increasingly relying on already at high levels due to the Russian truck market professionalization of freight
large articulated trucks, e.g. in Italy a large share of long- > No further increase in forwarders drives
– Favorable regulation, e.g. vehicle length in Italy and vehicle distance transport articulated tucks expected articulated trucks
tonnage in France > Share expected to remain until 2021 > Increase of articulated
– Expected city regulation for medium duty trucks stable trucks is also driven by
– Continuing pressure on long-haul transport efficiency regulation change

Rigid truck Articulated truck 1) Incl. heavy duty trucks (>15 to)

Source: IHS Automotive (May 2017); Local market research; Interviews with market participants; Roland Berger 20
The share of articulated trucks in India is expected to increase due
to professionalization and road network development
Share of articulated trucks in HDT1) segment by region, 2017/2021 [%, k units] (2/2)
India Asia Pacific Brazil Rest of Lat. America ROW

214 268 120 123 49 63 12 13 2 5

100%
20% 20% 20% 20%
40% 40%
56% 52%
60%
71%

80% 80% 80% 80%

60% 60%
44% 48%
40%
29%

2017 2021 2017 2021 2017 2021 2017 2021 2017 2021

> Articulated trucks are > A further shift towards > Articulated trucks are > In Latin America, articulated > Moderate share of
gaining share in India as articulated trucks is already dominating the trucks are expected to keep articulated trucks is
freight forwarders are expected until 2021 Brazilian market – Share is their very high share expected to stay constant
professionalizing and road expected to stay constant for ROW
networks are improving
> Increase of articulated
trucks is also driven by
regulation change

Rigid truck Articulated truck 1) Incl. heavy duty trucks (>15 to)

Source: IHS Automotive (May 2017); Local market research; Interviews with market participants; Roland Berger 21
Key regional markets are dominated by local manufacturers –
Top-5 players typically account for >70% of the market
Medium/heavy duty truck production by region and by OEM, 2017 [%, k units]
Western Europe Eastern Europe North America Russia China
 = 485  = 38  = 439  = 88  = 1,045
Others Others Freightliner
Tatra Others Others Others Dongfeng
Mercedes-Benz Mercedes-
Iveco 9% Isuzu 6% Benz Volvo
22% Volvo 15% 20% 20% 21%
12% 6% 28% 29% Mercedes-
4% Peterbilt 5% 41% Kamaz Lifan 6%
14% 7% Benz 2% 3% 2%
DAF 13% 16% Isuzu 9% 9% 19%
Scania MAZ 11% Foton FAW
13% 15% 14% Kenworth 19% Ural 11%
28% 13% 24% 13%
Ford
MAN Ford Shaanxi
Volvo MAN International GAZ CNHTC

India Asia Pacific Brazil Rest of Lat. America ROW

Mahindra &
 = 275  = 441  = 74  = 16 =2
Mahindra Daewoo Ford Mack Ural
Others Others Volkswagen FAW
Bharat Benz UD Trucks Others Hino Others
Iveco
Eicher 3% Hyundai 3% 2%
5% Isuzu 19% 19% 14% 12%
Motor 12% 5% 4% Iveco 1% Iveco
34% 3% 38% 3% 39% MAN
4% 2% Mercedes- 1% 1%
52% Tata Fuso 24% Volvo 12% 19% 22% Hyundai 20%
Benz
25%
13% Chevrolet
28% 14% 24% 24%
Ashok Leyland Ford
Hino Scania Mercedes- Kamaz
Benz

Source: IHS Automotive (May 2017); Roland Berger 22

The trailer market is driven by China, North America & Western
Europe and shows continuous growth from 2018-2021
Global trailer1) production by region, 2012-21 [m units]
CAGR CAGR
Historical Forecast 2012-17 2017-21
Total 4% 3%
1.29
1.25 0.01 0.01
1.21 0.02 0.01 ROW 6% 2%
1.15 1.17 0.01
0.01 0.02 0.01 0.08
1.10 1.12 0.01 0.02
0.02 0.01 0.08 Rest of Latin America -2% 8%
0.01 0.08 0.05
0.01 0.01 0.01 0.01 0.02 0.01 0.05
1.05 0.01 0.01
0.08
0.08
0.05 0.06 Russia -4% 8%
0.06 0.01 0.06 0.06
0.01 0.05 0.06
0.94 0.96 0.01 0.03 0.01 0.05 0.05 0.05 0.06 0.07
0.07 India 25% 0%
0.01 0.01 0.05 0.06
0.03 0.04 0.05
0.01 0.02 0.06 0.06 0.06 0.06
0.06 Eastern Europe 3% 0%
0.02 0.05 0.02
0.05 0.03 0.06 0.23 0.24
0.06
0.07 0.23 Brazil -4% 7%
0.23
0.06 0.22 0.23 0.23
0.06 0.20 Asia Pacific 1% 3%
0.18 0.18 Western Europe 6% 1%
0.33 0.34
0.32 North America 1% 3%
0.31
0.34 0.30
0.33 0.37
0.28 0.28

0.33 0.36 0.38 0.39 0.40 China 6% 4%

0.26 0.29 0.27 0.30
0.25

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
1) Medium/heavy duty commercial vehicle trailers 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on market interviews/data analyses

Source: Clear International; Local market research; Interviews with market participants; Roland Berger 23
Semitrailers constitute the majority of trailer production – Production
share of drawbar trailers growing strongly driven by China
Global trailer1) production by vehicle segment, 2012-21 [m units]
CAGR CAGR
Historical Forecast 2012-17 2017-21
Total 4% 3%
1.29
1.25
1.21
1.15 1.17 0.13
0.15 Drawbar trailer 2% 10%
1.10 1.12 0.12
0.11
1.05 0.08 0.10
0.08
0.96 0.09
0.94
0.09
0.09

1.09 1.12 1.14 Semitrailer 4% 2%

1.02 1.04 1.05 1.06
0.97
0.85 0.87

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
1) Medium/heavy duty commercial vehicle trailers, 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on market interviews/data analyses

Source: Clear International; Local market research; Interviews with market participants; Roland Berger 24
The global trailer production is fragmented – Top-10 manufacturers
covering less than 50% of the entire volume
Global trailer1) production by trailer manufacturer, 2012-21 [m units]
CAGR CAGR
Historical Forecast 2012-17 2017-21
1.29 Total 4% 3%
1.25
1.21
1.17
1.15
1.10 1.12
Others -4% 7%
1.05 0.75
0.72 Randon 4% 2%
0.71
0.96 0.68 Fujian Changchun 25% 4%
0.94 0.61 0.66
0.62 0.63
Ashok Leyland 6% 2%
0.02 0.02 Hyundai Translead -1% 3%
0.53 0.56 0.01
0.03 0.02 0.02 0.03 0.03
0.01 0.03 0.02 0.02 0.02 0.03 0.03
0.02 0.03 0.03 0.03 0.03 0.04 Utility Trailer Manufac. 7% 3%
0.02 0.02 0.04 0.03 0.03 0.03
0.02 0.03 0.04 0.04 Krone 2% 2%
0.03 0.01 0.05 0.05 0.03 0.03
0.01 0.01 0.04 0.04 0.04 0.04
0.03 0.05 0.04 0.04
0.04 0.03 0.04 0.04 0.04 0.06 0.05
Great Dane Ltd. 3% 4%
0.04 0.03 0.03 0.06 0.05 0.05
0.03 0.05
0.03 0.05 0.05 0.05 0.06 0.06 0.06 Wabash National Corp. 8% 6%
0.04 0.04 0.06 0.05
0.05
0.05
0.06 0.06 0.08 0.08 0.09 0.08 Schmitz Cargobull 1% 1%
0.06 0.06
0.04 0.05 0.05
0.04

0.13 0.12 0.14 0.14 0.15 0.14 0.14 0.15 CIMC 1% 1%

0.11 0.12

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
1) Medium / heavy duty commercial vehicle trailers; 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on market interviews/data analyses

Source: Clear International; local market research; interviews with market participants 25
The trailer production market is still fragmented with a multitude of
smaller specialized OEMs in most regions
Trailer1) production by region and by trailer manufacturer, 2017 [%, k units]
Western Europe Eastern Europe North America Russia China
 = 234  = 54  = 295  = 15  = 332
Other Other
Krone Tirsan Other Wabash
Other CIMC
23% 22% 18% 22% 21% Other
28%
35% 39%
48% 10% Krone KAMAZ
12% Humbaur/ 5% Vanguard 10% 4% 54% 5%
5% 9% 20% Great NovTRAK 4%
5% Kögel 6% 4% 2% 5%
33% Schwarzmüller 13% Politrans Schmitz
5% 14% Dane 7% 5% 8%
SDC Cargobull
Hyundai Sespel Fujian Changchun
Schmitz Cargobull Schwarzmüller Serin MAZ Utility Schmitz Cargobull Hua-Win
Shandong
Trailer Shekou Union
Port
India Asia Pacific Brazil Rest of Lat. America ROW

 = 83  = 63  = 48 =9  = 13
Randon Saban Sanat Mammouth
Other Other Other

23% Ashok Leyland 78% 19% Randon

10% Hermann 15% Industrie Sarl
Tratec Recrusul 9% Heil
36% 36% 8%
Eng. 7% 2% 2% Vulcano
3% 5%
Iran Kaveh 4% 7% COMECAB
Satrac 3% 4% Librelato 8% Other 57% S.A.
5% Saipa 4% 10% 77% 6% 7%
Asia S.A. 19% Hanifram
27% Gorica 7%
Motor Al-Kadi Facchini Other Ghabbour
Works Tata Mammut Industries Guerra
MaxiTrans
International

1) Medium/heavy duty commercial vehicle trailers

Source: Clear International; Local market research; Interviews with market participants; Roland Berger 26
Market feedback from suppliers, OEMs and associations shows a
positive outlook on the truck and trailer market
Selected market feedback
Europe United States China
> "In the trailer business, semitrailers account for > "I expect truck demand to increase gradually over > "The market of trucks in China was slowing down
approximately 80% of the market and we expect the next 5 years with annual growth rates of about after 2013 but there was a rebound in 2016 with
this share to be constant over the next 5 years 3-5%." the changes in regulations and Euro 5 emission
across Europe." Association standards. The segment of medium and heavy
CV supplier trucks is expected to show stability and moderate
growth opportunities over the next years."
> "Overall, I expect moderate growth of the > "Governmental infrastructure plans will primarily Truck OEM
European market for medium and heavy duty have a positive impact on the demand for rigid
vehicles. Growth will be mainly driven from Eastern > "Overall, the future truck and trailer business will
trucks in the building and construction industry." built upon stable and moderate growing demand
European countries." Truck OEM
Trailer OEM from China that is driven by population and GDP
growth."
> "We are confident to set-off possible price Association
reductions of customers with high bargaining > "Within the next two years, electronic logging > "We expect moderate but steady growth of trailer
power by new products that incorporate innovative devices will be required for newly sold and existing production in China that is fostered by regulations
technologies on a regular basis." vehicles. While this might help fleets improve such as the new standard allowing drawbar
CV supplier operations, I do not expect that truck sales will be trailers."
affected by this standard ." Trailer OEM
> "What differentiates the European market from Association
others in terms of trailer OEMs is the relatively high > "The increasing export orientation of truck and
share of insourcing, particularly with regard to trailer manufacturers in China leads to a
axles." > "The currently low gas prices have a positive convergence with Western standards regarding
CV supplier impact on transport volume via trucks – In the short product characteristics such as quality."
to mid-term I expect the positive impact from less CV supplier
> "In terms of regulation, tightening emission elevated gas prices to continue." > "Truck and trailer manufacturers in China primarily
standards are taken seriously but they are not a Fleet customer OEM buy on price which is still very different from the
major concern as long as they stay highly markets in Europe and the US."
predictable." CV supplier
CV supplier

Source: Interviews with market participants; Roland Berger 27

C. Component
market development

28
Roland Berger's truck and trailer components study focuses on
landing gears, fifth wheels, hydraulic cylinders, trailer axles & brakes
Truck/trailer component market – Study focus
Drum/disk brakes Hydraulic cylinders
3 4

Ø-Price1): EUR 1,400-1,600 Ø-Price1): EUR 2,000-2,200

Trailer axles Fifth wheels

3
1 5

4
1
Ø-Price1): EUR 1,600-1,800 Ø-Price1): EUR 400-600
2
Landing gears
2
5

Ø-Price1): EUR 200-250

1) European and North American price level depending on quality/equipment level; APAC with lower prices
Source: Interviews with market participants; Roland Berger 29
The global truck/trailer first-fit component market amounted to
c.EUR 6.2 bn in 2017 and is expected to grow at c.4% p.a.
Global truck/trailer first-fit component market by product, 2012-21 [EUR bn]
CAGR CAGR
Historical Forecast 2012-17 2017-21
Total 4% 4%
7.25
7.01 0.11 Disk brakes 5% 5%
0.22
0.11 Landing gears 4% 3%
6.66 0.22 0.29
0.10 Drum brakes 4% 5%
6.39 0.28
0.21
6.22 0.10 0.51 Fifth wheels 3% 5%
0.09 0.20 0.26
6.02 0.49
5.88 0.08 0.20 0.25 Hydraulic cylinders 1% 3%
5.74 0.08 0.20 0.24 0.47 0.62
0.08 0.20
0.19 0.23 0.44 0.61
5.36 0.22 0.42
5.17 0.08 0.22 0.39 0.59
0.07 0.17 0.40
0.38 0.57
0.16 0.20 0.55
0.19 0.53
0.40 0.51
0.36 0.53 Trailer axles 4% 4%
5.49
5.31
0.55 5.02
0.52 4.83
4.59 4.71
4.48
3.96 4.33
3.85

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
Notes: All CKD fitted components are considered in country of assembly. First-fit market (excl. aftermarket), 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based
on market interviews/data analyses, in bold: Focus of study
Source: IHS Automotive (May 2017); Clear International; Interviews with market participants; Roland Berger 30
Generally, there is a very high line installation rate for fifth wheels,
China with strong increase of installation rates to c.90%
Line installation rate fifth wheels
Line installation rate fifth wheels1), 2017 [%] Trend

> The line equipment rate in Europe is nearly

Western Europe 90% 100% 100%
> Due to large fleets in North America
Eastern Europe 90% 100% equipping their own vehicles, line equipment
rates are at about 80-90%, sourcing their
North America 80% 90% parts through the trading channels

China 85% 95% > China has recently developed more strongly
towards European markets with line
India 90% 100% installation rates up to c.90%

Russia 90% 100% > Assumption of installation rates in line with

established markets
Asia Pacific 90% 100%

Brazil 90% 100% > Assumption of installation rates in line with

established markets
Rest of Latin America 90% 100%

ROW 90% 100% > Assumption of installation rates in line with

established markets
1) Rate of fifth wheels equipped directly by the OEM, as opposed to aftermarket/first-fit installation

Source: Interviews with market participants; Roland Berger 31

Drawbar trailers have a relatively high share of hydraulic cylinders
used for construction applications
Installation rate hydraulic cylinders per vehicle type
Installation rate hydraulic cylinders, 2017 [%] Trend

7% > Number of tipper trucks and trailers in

Western Europe 9%
17%
Western Europe and North America higher
10% compared to Eastern Europe due to
Eastern Europe 9%
15%
complexity of the vehicles
7%
North America 9%
17%

10%
China not relevant. > China and India assumed on level of
9%
10%
Eastern Europe
India 9%
15%

10%
Russia 15% > Russia and Asia Pacific assumed on level
9%
10%
of Eastern Europe
Asia Pacific 9%
15%

10%
Brazil 15% > Brazil and Latin America assumed on level
9%
of Eastern Europe
10%
Rest of Latin America 9%
15%

10%
ROW 15% > ROW assumed on level of Eastern Europe
9%

Semitrailer Drawbar trailer Rigid truck

Note: Derived from share of tippers (based on sales data)
Source: Interviews with market participants; Roland Berger 32
Installation rates of trailer axles range from 2 to 3 per trailer
depending on the region – North America catching up to EU levels
Installation rate trailer axles
Installation rate trailer axles, 2017 [number of axles per trailer] Trend
> In Western Europe, most trailers have three axles
with a strong trend in the past ten years, exceptions
Western Europe 2.9 include e.g. Netherlands and Scandinavia. Eastern
Europe is still catching up with this trend
> In the US, trailers have between two and three axles
Eastern Europe 2.6 and is expected to slightly increase
> In Mexico most trailers have two axles and three
North America 2.5 axles are used only in off-highway applications

> In China, trailers typically have three axles due to

China 2.8 requirements for long distance transportation
> In India, increasing share of semi-trailers leads to
India 2.2 increasing number of axles, however from a low
base

Russia 2.8 > In Russia, most trailers are already equipped with
three axles which is expected to further increase
gradually to Western European levels
Asia Pacific 2.5

Brazil 2.8 > The number of axles per trailer in Brazil has not
changed in the past and is expected to remain stable
Rest of Latin America 2.8

ROW 2.5

Source: Interviews with market participants; Roland Berger 33

Overall price stability expected as regular innovations mitigate
potential price reductions – Price level in China is expected to rise
Price levels and price developments per region
Price levels and price developments per region, 2017 [%] Trend

100% > Overall, prices are expected to exhibit price stability

Western Europe 100%
100%
as potential price reductions are mitigated by
100% technological advancements
100% – In line with automotive industry patterns, OE
100%
Eastern Europe 100% forced potential price reductions (e.g. approx. 1-
100%
110% 2% p.a.) are expected going forward
100%
North America 100% – Based on historic experience, regular technology
65%
100% advancements and product innovations lead to
China
75%
75%
price jumps in regular intervals, usually forcing the
75% prices back to higher levels
60%
70% > Some regional differences in price levels exist, e.g.
India 70% China with lower / North America with higher price
70%
100% levels compared to Europe
100%
Russia 100% > In addition to the pricing itself, a shift in the value
90%
100% segments towards higher value products was
Asia Pacific 90% considered for China
90%
90% > Additionally, an increasing number of Chinese
100%
100% players exporting globally is expected to lead to an
Brazil 100% adaptation of a more European price levels in China
100%
100%
100%
Rest of Latin America 100%
100%
90%
90%
ROW 90%
90%

Fifth Wheel Landing gear Hydraulic cylinders Trailer Axles

Source: Interviews with market participants; Roland Berger 34

Geographically, Brazil and Russia are expected to recover – Overall
China is expected to drive market growth with c.6% p.a.
Global truck/trailer first-fit component market by region, 2012-21 [EUR bn]
CAGR CAGR
Historical Forecast 2012-17 2017-21
Total 4% 4%
6.85 ROW 6% 2%
6.62
6.29 Rest of Latin America -2% 7%
5.88 6.04 0.30
5.58 5.71 0.28
0.36 Russia -3% 7%
5.45 0.25 0.36
5.08 0.24 0.34 0.40 Eastern Europe 20% 2%
0.28 0.38
4.90 0.26 0.26 0.28
0.27
0.31
0.35
0.19 0.20 0.33 India 3% 2%
0.25 0.35 0.36 0.36
0.36 1.43
0.24 0.37 1.40
0.34
0.43
1.37
Brazil -5% 7%
0.36 1.36
0.35 1.31 1.38 1.39 Asia Pacific 1% 3%
1.17
1.05 1.07 Western Europe 6% 1%
1.72 1.75
1.64 North America 1% 4%
1.59
1.68 1.50
1.66 1.85
1.41 1.39

1.83 1.94 2.03

1.40 1.58 1.69 China 6% 6%
1.17 1.26 1.34 1.24

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
Notes: All CKD fitted components are considered in country of assembly. Market size does not include drum & disk brakes.
China sales outgrowing volume increase due to expected price increases; 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on market interviews/data analyses
Source: IHS Automotive (May 2017); Clear International; Interviews with market participants; Roland Berger 35
The first-fit component market is expected to grow at c.4% p.a. until
2021 – Fifth wheels growing fastest with c.5% p.a.
Global truck/trailer first-fit component market by product, 2012-21 [EUR bn]
CAGR CAGR
Historical Forecast 2012-17 2017-21
Total 4% 4%
6.85
6.62 0.22 Landing gears 4% 3%
0.22
6.29 0.51 3% 5%
Fifth wheels
6.04 0.21 0.49
5.88 0.20
5.71 0.20 0.47 0.62
5.58 Hydraulic cylinders 1% 3%
5.45 0.20 0.44 0.61
0.20 0.42
0.19 0.39 0.59
5.08 0.38 0.57
4.90 0.17 0.40 0.55
0.16 0.53
0.40 0.51
0.53
0.36 Trailer axles 4% 4%
5.49
0.55 5.31
0.52 5.02
4.71 4.83
4.48 4.59
3.85 3.96 4.33

2012 2013 2014 2015 2016 2017p2) 2018e 2019e 2020e 2021e
Notes: All CKD fitted components are considered in country of assembly. Revenues of brakes not included, 2) Prognose, Q1 2017 analyzed and data forecasted till end of 2017 based on
market interviews/data analyses
Source: IHS Automotive (May 2017); Clear International; interviews with market participants 36
The global fifth wheels market is dominated by Jost and SAF Holland
– Fuwa with c.30% market share in Asia-Pacific region
Market shares in fifth wheels OE business1) by region, 2016 [EUR m; %]
138 98 161 18 415
1% 2% 2%
3%
7%
22% 18% 25% 7%

10%

28% 16%
27%

78%

54%

47% 58%
51%

18% 20%

5%
1%

Europe Americas Asia- Brazil Total

(excl. Brazil) Pacific
Others Baohua Fontaine Fuwa Jost SAF Holland

1) Does not represent entire world market; includes only relevant regions/countries
Source: Annual reports; Interviews with market participants; Roland Berger 37
The three large players in the landing gear segment are Jost, SAF
Holland and Fuwa reaching a combined market share of over 80%
Market shares in landing gears OE business1) by region, 2016 [EUR m; %]
50 65 74 10 198
1% 2% 4%
9% 8% 9% 4%
10% 9%
2%

36%
23%
62%

56%
84%
31%

43%

8%
36% 17%
10%
3%
10% 9% 4%
6% 4%

Europe Americas Asia- Brazil Total

(excl. Brazil) Pacific
Others Baohua Fuwa Haacon Jost SAF Holland Hua Jin Teles Tongyi

1) Does not represent entire world market; includes only relevant regions/countries
Source: Annual reports; Interviews with market participants; Roland Berger 38
Hyva is dominating the global hydraulic cylinder market with over
50% market share – Jiaheng as strong local player in Asia-Pacific
Market shares in hydraulic cylinders OE business1) by region, 2016 [EUR m; %]
108 99 325 19 551
14% 13%
18%

37% 10% 34%

6%
23%
15% 9%

3% 8%
9% 16%

51%
57% 54%
50%
50%

12%
4% 2% 4%

Europe Americas Asia- Brazil Total

(excl. Brazil) Pacific
Others Minle Jiaheng Binotto Hyva Jost

1) Does not represent entire world market; includes only relevant regions/countries
Source: Annual reports; Interviews with market participants; Roland Berger 39
The European trailer axles market is characterized by relatively high
insourcing – Main players globally are Fuwa and Hendrickson
Market shares in trailer axles OE business1) by region, 2016 [EUR m; %]
1,368 1,291 1,782 223 4,6632)
4% 1%
3%
9%
5%
17% 1%
25% 2%
3%
14% 3%
32% 5% 4%
9% 10%
10%

33% 14% 15%

8%

5%

16%

55%

56% 17%
39% 50%

18%
10%
5% 2%

Europe Americas Asia- Brazil Total

(excl. Brazil) Pacific
Others Gigant Hua Jin Schmitz Cargobull BPW Hendrickson Jost
Silpa Baohua Randon Meritor SAF Holland Fuwa
1) E.g. very heavy transport, sea/rail applications, steering axles etc.; Does not represent entire world market; includes only relevant regions/countries 2) Difference in sum due to rounding
Source: Annual reports; Interviews with market participants; Roland Berger 40
D. Key success factors
for component
suppliers

41
Commercial vehicle suppliers need to manage a broad variety of
short- and long-term challenges
RB Commercial Vehicle supplier CEO radar screen for 2017 and beyond
Customer/
OEMs
market
Fleet
consolidation
Competition
Rising star
OEMs
Purchasing Online booking
alliances/ platforms
Buying power
Continued New players
New transport outsourcing Selective
solutions consolidation
Supply base
Maturing China Volume
bundling New business
Brexit models (service/
Global solutions), core
localization competencies Rising energy Availability of
BRI volatility cost skilled workforce
Efficiency
programs
Emerging
market
Technology/
Stagnation in
Triad
Price/margin
investors/
suppliers
Insolvencies in
Comfort
features
legislation
supplier base
pressure
Turkey
Alliances Factor cost §
inflation Further emis-
Connected sions reduction
US policy vehicle Zero casualties

Russia/
Ukraine
VECTOR ADAS/auto-
nomous driving Capital markets/
Telematics
Volatility of
Investor's view
of automotive
financing
capital markets
Exchange rates supply sector

Short-term Mid-/Long-term
Note: Excluding product segment specific technology and operational issues
Source: Roland Berger 42
In addition, high entry barriers in the truck/trailer component market
exists for new players
Overview of key entry barriers in the market for truck/trailer components
Entry barrier

Longstanding customer > High customer loyalty and longstanding customer relationships as well as high penetration in the current
relationships/customer vehicle park can prevent switching of truck/trailer suppliers
loyalty > Due to low percentage of overall truck/trailer costs (especially fifth wheels, landing gears), motivation
to switch suppliers expected to be rather low

High brand awareness > Strong brand positioning as a key asset, which creates a pull effect and prevents market entrants
> Branded components serve as a status symbol and proof high quality standards

R&D know-how/ > Differentiation through technologically advanced products and constant product upgrades
innovation > High number of variants to be offered, requiring efficient internal setup

Certifications and > Especially safety-critical parts need to pass several regulatory certifications/approvals as well as fulfill
regulatory approval OEM-specific approval processes – This approval processes represent barriers for potential new
entrants

Integration of logistics > Truck/trailer component suppliers are often very tightly integrated into the supply chain of OEMs, often
into customers' delivering parts JIT/JIS to OEMs production facility – Being located in proximity to OEMs and being able
operations to flexibly react to customers demands can represent an effective entry barrier

Source: Interviews with market participants; Roland Berger 43

From an internal perspective, we identified several key success
factors
Key success factors – Internal perspective
Success factors Importance
> Well-known branded products with image for high-quality and safety standards to allow price premium
Unique portfolio
> IP-protected and broad product portfolio of truck and trailer components and systems that allow for product
of branded products
bundling
and services
> High number of product variants allowing differentiated solutions

Efficient production > Modular production set-up, enabling a large number of customer-specific variants in a cost-efficient manner
management > Customer specific variations are introduced at a relatively late stage in the production/assembly

Lean value-chain > Lean, asset-light production/assembly that focuses on key inhouse capabilities
management > Local for local production in all key truck and trailer markets

> Global procurement network with low ability for low cost sourcing
Globally integrated
> Strict supplier quality assurance and satisfaction of global OE standards, enable full flexibility for the OE,
sourcing
the aftermarket and between regions

Global presence and

> Global presence in all major truck/trailer markets
strong distribution
> Global sales network with customer access in all relevant markets and channels (OE, IAM channel)
platform

High Low

Source: Interviews with market participants; Roland Berger 44

One success factor is the development of a strong distribution
platform – OEM and aftermarket business needs to be addressed
Example: Strong distribution platform
OE channel IAM1) channel
Producer OEM OES
3rd party
supplier

Whole- Wholesaler/distributor/importer
saler OEM aftermarket organization

Retailer OEM authorized workshop Fleet workshops Independent workshop

Inter- Inspection associations, insurances, leasing, internet platforms, etc.

mediates
End Freight companies/Fleets/Owner driver
customer
1) Independent Aftermarket

Source: Roland Berger 45

From an external perspective, we identified brand and reputation as
well as strong customer relationship as key success factors
Key success factors – External perspective
Success factors Importance
Strong brand > Strong brand and reputation as one of the strongest key success factors
and reputation > Based on strong brand and reputation price premium can be achieved

Strong customer > Strong customer relationships (fleets) and broad customer portfolio serving both truck and trailer OEMs
relationship > Powerful customer approach based on a combined push and pull strategy for OE and aftermarket clients

Competitive > Prices remain as one of the key criteria – Customer are highly price sensitive
prices > Commercial Vehicle (CV) suppliers need to offer competitive prices

High technical > Advanced product features help to secure volume in the market
capabilities > Technical capabilities as one potential USP for many market players

Innovation > Innovation power and capabilities for new variants and products is necessary to differentiate
NEW
power > Innovation through cooperation and disruptive thinking with increasing importance

High delivery > Basic delivery performance is considered as order qualifier, however Just in Time (JIT)/ Just in Sequence
performance (JIS) performance and short term delivery can also be used as a differentiator vs. competition

High > Basic requirement as order qualifier incl. meeting technical product specifications as well as OEM defined
quality ppm ratios – Due to fixed industry standards single differentiation via quality is not possible

Geographic proximity > Local content depends on regulation and market specifics and is very important for many markets with
and local content specific requirements
> Homologation and local production adjustments required for certain markets
High Low

Source: Interviews with market participants; Roland Berger 46

E. Roland Berger

47
Roland Berger is the only leading global consultancy of German
heritage and European origin
Roland Berger at a glance
Founded in 1967 in Germany by Roland Berger

50 offices in 34 countries, with around 2,400 employees

Nearly 220 Partners currently serving over 1,000 international clients

Broad spectrum of services based on 3 solid pillars: Knowledge I Technology I Capital

Terra Numerata™ digital ecosystem joining forces with more than 30 leading digital firms

Global Expert Network of 500 industry specialists

Source: Roland Berger 48

Within our Automotive Competence Center we have special global
teams for automotive suppliers and commercial vehicles
Our competence matrix

Technology, Media &

Special focus Suppliers/

Financial Services
Commercial Vehicles

Eng. Products

Transportation
Public Admin.
Infrastructure
Cons. Goods
Construction
Automotive
Industry

Chemicals

Telecom.
& Retail

Pharma

Utilities
Energy
Function
Corporate Finance

Digitization

Information Management

Operations
Restructuring &
Corporate Performance
Strategy

Source: Roland Berger 49

Experts in the Roland Berger Automotive Competence Center are
thought leader and regularly publish landmark studies in the field
Publications and studies
ACC Insights Recent studies and articles (selection)
Connected car – App based dongle solution as shortcut to
> The Automotive connectivity
Competence > Assessment of in-car integrated solutions and impact on
Center's client volume segment
magazine > Identification of new providers from outside the industry
> Recommended actions for OEMs
> Going out to top-
match decision Automated vehicles Index Q3/2016
makers in the > Presentation of competitive positions of world´s leading
automotive automotive nations
> Customer survey on the interest in automated driving and the
business globally use of robot taxis
> Three to four
publications Global Automotive Supplier Study 2016
per year > Assessment of current state, trends and challenges in the
> Circulation of industry
> Recommended actions for suppliers
around 3,500
copies per
issue
Automated Trucks – The next big disruptor in the
automotive industry?
> Identification of success factors in the trucking industry
> Examination of disruption within the trucking industry
> Recommended actions for the trucking industry

Source: Roland Berger 50

Our expertise is sought after by the international press and media

Source: Press Clippings; Twitter; Roland Berger 51

Your contacts at Roland Berger

Felix Norbert
Mogge Dressler
Partner Senior Partner
Head of Supplier Cluster Global Head of Commercial
Vehicle Cluster

Phone: +49 89 9230-8346 Phone: +49 711 3275-7420

E-mail: [email protected] E-mail: [email protected]

Source: Roland Berger 52

Disclaimer

This study was prepared by Roland Berger GmbH ("RB") and is based on publicly available information which has not been independently verified by RB, as well as
certain assumptions, general assessments, projections and experience derived from RB's consulting activities, in each case as at the time of the study’s preparation.
Any assumptions, assessments, projections and experience values contained in this study involve significant elements of subjective judgment and analysis, which may
or may not be correct. Neither RB, nor any of its affiliates, partners, employees or agents provide a guarantee or warranty (express or implied), or accept any liability or
other form of responsibility with respect to the authenticity, origin, validity, accuracy, completeness or relevance of any information, assumption, assessment, projection
and experience.

To the extent this study contains statements or projections which are forward-looking, neither RB nor any of its affiliates, partners, employees or agents provide a
guarantee or warranty (express or implied) or accept any liability or other form of responsibility in case the actual future developments will differ from the statements and
projections in this study. Even if changes and events occurring after the publication of this study will impact the validity, accuracy, completeness or relevance of this
study, RB does not assume or accept any liability to update, amend or revise this study, but reserves the right to do so at its free discretion.

53