de GR GENEVF. Corporate Presentation May 2nd, 2013 Over the last 20 years de GRISOGONO has become a fully established luxury E3 de 1 brand Haute Jewelry Luxury Joaillerie Collections Watches 6 Wholesale 3 product a 6 distributed Bouuques through 3 channels Private Sales de GRISOGONO GEXEVF, competing among the leading high-luxury Uniquely positioned with an exclusive among the leading and highly creative brand identity 93* Ex ensive PATEK PHILIPPE Spectacular Audacious GET: I/g rm Party Up-to-date HARRY PIAGEI \am (.lu-l \I'pvk Dior Joyful Excess Emotional Volume Timeless/ LG A I Contemporary/ Classic Creative Sensual Mix of materials ROLEX Free Focused on details OMEGA t' TAGHeuer nnova Ive ec nica la 7< ma CHOW TRI FOOK Accessible de (iliNIin?. A .. and catering to a global base of high net worth customers Sales by customer nationality of total sales) 29% Russia Middle East CIS Canada Others - I lil ii? de GRISOGONO GENEVE dG is present in three main product I I Haute Joaillerie Jewelry Collections Watch Collections :g .47 . Unique pieces manufactured at - Entry-level pieces which fully - Jewelry watches that re?ect dG's atelier in Geneva embody dG's creativity style dG's design and creativity -Top quality stones and leading - dG design manufactured by - Highly innovative, non- craftsmanship craftsman in Italy and France traditional complications - Catering to the very top end of - Bought by a global base of - Assembled by dG from the jewelry market connoisseurs ofjewelry carefully selected components - Prices: to 1m+ - Prices: CHF up to 120k - Prices: CHF up to 300k+ 13-3! de GRISOGONO sold through a global distribution network Now strengthening distribution in key markets before embarking on the next expansion phase Geneva (Rue du Rhone) St. Moritz (Badrutt's Palace) Gstaad (Hotel Palace) 45:333London (New Bond Street) Rome (Hotel de Russie) Porto Cervo 93, Moscow (T retyakovsky Proyezd, Barvikha Luxury Village) wet): Kuwait (Salhia Mall) wrokyo (Gina) . 3% [New York (Madison Ave) Dubai (Wa? Mall) St. Barthelemy .. Abu Dhabi (Avenue Mall) VF Bal Harbour (BH Shops) ?Wholesale presence Retail presence 2 Boutique location Franchise location 12%; de GRISOGONO GENEVE Distribution network complemented by private sales Events held throughout the year attended by the top league of potential customers Exclusive events by both ultra high throughout the net worth individuals and stars Cannes FESTIVAL DE CANNES Porto Cervo . .. August January May February 12-2! 5 de GRISOGONO GENEVE which foster brand awareness and global media presence Illustrative pictures of dG private sales events Eden Roc Event in Cannes Room Baccarat Event in Moscow These events generate global PR, attracting a broad range of clients to dG de GRISEDGONO (iliNIiVl?. Financially, results are recovering after a large decline Sales seem to be recovering in 2012 after a strong decline since Total sales (m CHFSource: de Gn'sogono while profitability has been negative since 2009 EBIT sales) 20 - 12,6 1040,1 -10 -15,6 8 -2o -27GRISOGONO GENEVE Products have very distinct sales performances While jewelry is now stable, watches continue to decline in sales 9 Haute Joaillerie Sales (m CHFJewelry Collections Sales (m CHF) 80 34 276040 49 Recurring margin (after and other recurring costs); 2. 78% of which consigned to dG Source: de Gn'sogono; BCG Analysis Watch Collections Sales (m CHFGRISOGONO GENEVE as well as channel's While boutiques are rapidly recovering, wholesale requires signi?cant attention Private sales Sales (rn CHFBou?ques Sales (m CHFChannel margin1 (not including central costs of 39% of sales) 10 Note: Does not include discount channel (CHF 6m in 2012); 1. Based on channel gross margin and allocation of channel costs Source: de Grisogono; BCG Analysis Wholesale Sales (m CHF~33! de GRISOGONO GENEVE Key strategic challenges to turnaround the business identified Key priorities de Grisogono Reinforce internal organization Company 0 Improve financial planning control 0 Improve documentation and training 0 Improve return on marketing investment Brand 6 Revamp communication materials strategy 6 Increase communication focus on craftsmanship and value storage Improve cost] price positioning Product Review product assortment structure Ensure full quality control Address wholesale deterioration Channel Turnaround or close loss-leading boutiques Improve performance of boutiques de GRISOGONO Assortment structure misaligned with demand Assortment structure comparison E1 - dc GREPNGONO 110/? No. refs/ price point No. refs/ price point >250k -2 >250k 125-250k a 6 8 125-250k a 80-125k -1 o4 5 .10 80-125k 1 50-80k .1 50-80k a 30-50k a - 3 10 6 30-50k a 20-30k .4 a 010 20-30k 10-20k a .10 65> . 10-20k 5-10k a 04 .5 5-10k 0-5k 5 -1 0-Work has already started in the preparation for Basel 2013 de GRISOGONO 12 Source: Cartier and Choppard Collections Catalogues, Web Search, BCG analysis GENEVE Some products mis-priced vs. competition Jewelry pricing benchmark Iconic plain Typical gold earrings earrings Iconic half set gold ring Price range Price range Price range 15 15 . 1.x. - 10 10 g?11,9k 9,8k 9,8k 9,8k 5 i) (I (I?ll/ll?l' 5,1k - mu mum 5 6?8k minimum 39k 5 5,1k $92 2,7k {Ufa-r 294k Dior 1 3 Source: Web search; de Grisogono; BCG analysis Differences in large part due to product development choices de GRISOGONO Lack of production control led to significant overstocking in the past Stock level of "Retail" business much higher than 2? 8 Collections a) 'I?Irnxiuiu Average peers Stock reach (1 ,2x) (years) with several extreme examples Meccanico Polina Occhio Briolettes Jiya Fruit Sugar Tubetto Piccolina Boule Jane Melagrana Zigana Instrumentino Excess stock 1 .763 238 843 326 407 264 1 .251 871 692 4.307 1 .040 146 407 1 .657 5 1o 15 20 ?21-0002 Stock reach (years) - Watches Jewelry Partly addressed in last year's melting program 1. Stock above industry average number of stock years; 2. Total including all collections 14 Source: de Grisogono, BCG analysis de GRISOGONO GENEVE Boutique portfolio included some high loss leading boutiques Sales and profitability per store Channel Profitability (Net Result 2012F, %) 60 40 Loss leading boutiques 20 0 0 5 10 15 20 25 30 35 -20 -40 Paris Porto Cervo Flagship 15 1. Taking into account full cost allocation Source: de Grisogono internal data; BCG analysis London Harrods Gstaad Seasonal Shop Geneva Bergdorf1 Tokyo St Moritz Rome St. Barth New York Las Vegas Shopping hot spot Classic Boutique Sales (CHFm in 2012F) dG under a five year transformation program Phase 1 Phase2 4 Phase3 . Review key processes . Restructure organization - Optimize boutique portfolio - Launch strong campaign . Melt and sell-out old stock - Increase support to wholesalers . Expand to new categories leather . - Review communication strategy 900(13): 'f attractIve - Ensure novelties for Basel - Increase marketing investment financial controls (incl. production management) . Setup a real retail operation - De?ne assortment strategy . Improve training and documentation - Setup full production controls Set new watch strategy Launch expansion to Asia and S. America Setup basic 125:? 16 1. Taking into account full cost allocation GRISOGONO Source: de Grisogono intemal data; BCG analysis GENEVE Numerous improvements already achieved to date Key achievements de Grisogono - Clear coordination established across departments Company - Simpli?ed ?nancial reporting and control - Basic control tools and processes implemented - Marketing investment increased Brand - Clear communication strategy established (PR Media) New media campaign and support materials developed - Assortment restructuring launched (with ?rst step taken for Basel) Product - Production planning and control fully established - Loss leading boutiques closed (Tokyo and Las Vegas) Channel - Wholesale partner stock exchange program implemented - Number of low budget, sales oriented events increased (16 GRISOGONO (iliNIiVl?. New advertising campaign and sales materials developed Designs developed in cooperation with new creative agencies New Advertising campaign as well as new sales materials ?g dc (:Risggcoxo Sales catalogues Website iPad app 18 de GRISOGONO ULXEVE Media strategy reviewed to ensure presence in all major publications Key publication in the media plan Brand Magazine Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec :23; New York Times ?/Elite Traveler a Harpers Bazaar UK, US, RU ME Vanity Fair UK, RU IT Four Seasons Departures US RU Vogue UK, us, FR, IT JP Arabian ?m Madame Figaro I Tatler UK RU Currentplan 1 9 Note: Covers with different circulation times (16 GRISOGONO GENEVE