This information is confidential and was prepared by Bain it is not to be relied on by any 3rd party without Bain's prior written consentMARKETWORLDWIDEMONITORLUXURYCLAUDIA D'ARPIZIO | 20.10.2016ALTAGAMMA 2016Luxury Markets Overview1.3GLOBAL LUXURY GOODS MARKETS (2016E|B)Global luxury consumptions growing 4% in 201642013319201435120154052016E438Luxury Cars Market Trend (B) Key Industry Macro-TrendsTrends by Segment (2015)Luxury cars keeping the positive pace in 2016 In 2016, luxury cars market keeping up the pace posting a sound +8% versus previous year- Europe leading the growth offsetting a depressed US market- Ruble devaluation boosting sales in Russia- China slowing down- Deteriorated scenario in South America Stronger connection between luxury automotive sector and the tech industries of Silicon Valley- Fully connected and self-driving cars as one of the hottest topic of the industry New retail concepts have been developed to broaden distribution and target a wider customer base- Pop-up store concepts and mobile showrooms+10%9B2%56B14%340B84%K+8%+15%+8%52013138201415020151762016E183Luxury Hotels Market Trend (B) Key Industry Macro-TrendsLuxury Cruises Market Trend (B)Positive 2016 for hotels (yet slowing down) and cruises+9%+1%Key Industry Macro-TrendsK+7%+4%+16%+17% Positive 2016, yet slowing down:- Lower flows in US affecting occupancy rate- Stronger fundamentals in Europe yet terrorist attacks impacting performance in some key cities- Challenging environment in China; Middle East declining Luxury chains fighting to gain traction on millennials through new formats and concepts Healthy growth in demand with key players increasing overall capacity- Expeditions segment fuelling growth Out-of-the way port destinations with low passenger numbers is the highest growing cruise segment River cruising increasingly popular,with Europe's offering far ahead of the rest of the world+4%+5%6Spirits and restaurants driving the growth of luxury edible experiences +5%+3%Luxury Food and Wines US champion market art segments refer to artists' year of birth+3%K Fine art market stable at 70% of the total art market (including also decorative arts and antiques) 2016E in line with 2015, mainly driven by flat volumes in the public auction channel- Yet, consistent positive performances since the early 2000s' (excluding 2009), providing art market with increasing legitimacy as a solidalternative investment channel US best performing market in real terms, consolidating its global leadership- Europe (mainly UK) enjoying a single-digit growth, positively performing especially in the post-war and contemporary segments- China stabilizing after 5 years of strong growth Online continuing its acceleration on the 1-20K core price-range Contemporary segment still gaining share, while high-quality old masters works increasingly scarce+0%8High-Quality Design Market Trend (B) Key Industry Macro-TrendsTrends by Segment, Geography and Channel (2015)Three years of sound performance for the high-quality design market+1% +4%SegmentsBathroom17%Kitchen 20%Lighting12%Living shrinking private jets due to order cancellationsYachts2,1B11,1B5,8 BPrivate Jets1,9B3,2B2,2 BK Unstable geopolitical and economic environment penalizing the market- Large jet order cancellations in '15/'16- Fierce competition putting pressure on prices Lack of infrastructure and strict controls on air space exacerbating the slow down in China “Uber-like“ apps are trying to democratize the market Stability in 2016 yet with disparate performance among yacht segments- Polarization of the market with entry and absolute segments outperforming Key challenge is to increase the penetration rate of yachts among HNWI, particularly in Asian markets New layouts: from compartmentalised space towards open-plan interiors+7%+2% YachtsPrivate jets+0%-5%-1%-10%+4%+2%10Out-of-home luxury experiences gaining tractionbenefiting from the growth of luxury travelers and increasing self-indulgence2468101222%0 2 4 6 8%Accessible andAspirationalluxury carsLuxury goodsOut-of-homeluxuryexperiencesLuxuryconsumableexperiences'08-'12 CAGR (%)In-home luxuryexperiencesLuxurytoysAbsoluteluxurycarsGLOBAL LUXURY GOODS MARKETS BY TYPE (2008-2016E|B)Luxury Carsconsistently top performing segment, especially on the Absolute segment, fostered by the Chinese market growth despite recent decelerationLuxury goods slowing down in recent years after being the fastest growing categoryLuxury consumable experiences consistently positive fostered by luxury consumers redirecting their spend toward new and more personal high-endcocooningLuxury toys less dynamic than top cars, still waiting to surf theChinese wave onYachts and JetsIn-home luxury experiences accelerating on both high quality design and art, the latter increasingly legitimated as alternative investmentNOTE: Out-of-home luxury experiences include hotels, cruises and restaurants, luxury toys includes private jets, yachts and Absolute cars, luxury consumable experiences include beauty, wines & spirits and food & beverage, in-home luxury experiences including high quality design and fine artExperience gaining traction over product in global luxury markets