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Readcrest Capital AG

Investor Presentation • Aug 26, 2008

346_ip_2008-08-26_15991f37-075a-456e-b3e5-f3dec4e9f17d.pdf

Investor Presentation

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Business Media China AG

Company Presentation

August 26, 2008

K.M. Hilligardt, CEO

This document contains forward-looking statements and forecasts based on assumptions and estimates made by Business Media China AG ("BMC") management. While we assume that the expectations of these forward-looking statements are realistic, we cannot guarantee that the expectations will prove to be correct. The assumptions may conceal risks and uncertainties which may lead to actual results significantly divergent from those made in the projective forecasts. The factors that can cause such a divergence include: changes in foreign exchange control or the economic and business environment, currency exchange rate fluctuations, the low market entry barriers for competitors, insufficient acceptance of new products or services and changes in corporate strategy. No update of the projected forecasts contained herein is planned, nor does BMC assume any obligation to do so.

Agenda

  • BMC at a Glance
  • China – A growing advertising and exhibition market
  • Strategy and strategic strengths
  • BMC's operations + plans
  • OOH Media (Airports, Railway Stations)
  • Exhibitions & Conferences
  • Peer group analysis
  • Key numbers
  • Outlook

BMC provides "Total China Media Competence" by combining key competences in all relavant advertising media solutions:

Exhibitions & Conferences, Outdoor Advertising / Out of Home Media (OOH), Online Marketing, TV/Radio and Print Media.

  • BMC's track record in Exhibitions and the strong portfolio of premium advertising media in railway stations and airports ensures a fast increasing revenue and earnings stream in a double-digit growing market.
  • BMC today is recognized as the leading company in OOH Media innovation and All-China media coverage.
  • Proven SINO-EUROPEAN Management-Style is the key success factor.
  • Turnover 2007: EUR 23.1 Mio., +210% vs. 2006, HJ 2008: EUR 10.8 Mio., +35%
  • Shareholder structure: 38% Mesago (CEO), 2% Management, 60% free float,
  • Market Cap(25.8.2008): EUR 90 Mio.

From zero to a leading player in 4 years

From zero to a leading player in 4 years

China's dynamic economy

  • The Chinese economy is estimated to grow at 8-10% per annum through the next decade.
  • Huge manufacturing sector, called 'Factory of the World'.
  • Rising income levels and increasing purchasing power of middle class (2008: >250 million).
  • By 2020 the middle class will comprise 40% of the total population.
  • China will consume approximately 29% of the world's total luxury goods in 2015.
  • Boom in the retail sector.
  • Government modernising rural & urban infrastructure, highways, railways, airports, roads, subways.
  • Olympics 2008 lead to higher awareness and attractiveness of the China market as strongly growing consumer market.

Source: Chinese statistical Yearbook 2006

The Chinese advertising market

Large and Fast Growing Advertising Market (CAGR 16.2%)

Outdoor Advertising (OOH) is growing faster then the advertising market (CAGR 18.0%)

Source: Deutsche Bank, National Bureau of Statistics of China, ZenithOptimedia.

  • China's urban population increased from 29.0% in 1995, to 40.5%, or 523 million people, in 2003.
  • Predicted to increase beyond 615 million by 2010.

OOH: the leading advertising media

  • Massive urbanisation drives China's ad expenditure.
  • 70% of retail sales take place in urban areas with a growth rate of over 14%.
  • Over 50% of China's current advertising spend is targeted at the cities of Beijing, Shanghai, Guangzhou and Shenzhen, only accounting for around 9% of the population.

OOH advertising as percentage of total ad spend

Exhibition growth in China

Exhibitions' growth in China during 2000 – 2006

China is the fastest growing Exhibition market.

  • Follow a buy & build strategy using national and global reach: BMC identifies market leaders in specific local or regional segment, acquires a controlling stake in it (buy), and then scales (build) it up using its national and global reach.
  • Develop, attract & establish additional international exhibitions and conferences in the Chinese market.
  • Identification of new opportunities (e.g online platforms) for a strong and profitable growth.
  • Exploring synergiesbetween OOH, exhibitions and conference businesses.
  • Driving the consolidationin the Chinese Outdoor Advertising market.

Strategic strengths

  • The strong SINO-EUROPEANManagement is a key success factor.
  • BMC has developed a wide personal network in government, industry, media and academia.
  • Control of
  • increasing number of railway hubs for the "All-China Roll-out" Program.
  • increasing number of important airports enables BMC to scale-up and roll-out successes from one site to all sites across China.
  • BMC and JV-partner Skyflying Media are the No. 1 OOH-Advertising company in China as of 2008.
  • BMC is ideal partner to form JVs with leading western exhibitionsfor China

Airport advertising

Airports advertising: Acces to all top 15 airports

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  • BMC Flying Dragon is the leading provider at the 15 most importants airports
  • Important Milestone September 2007: Winning of T3 media formats at Beijing airport
  • Up to EUR 10 million turnover/year as of H2/2008
  • Strong demand for more formats
  • Strategic cooperation in China with Kinetic worldwide since May 2008
  • BMC is exclusiv Airport partner for the world's largest media agency
  • Further consolidation of Chinese Airport Media market expected

Railway advertising

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1Not yet operational, planned for 2008

2The station serves as a primary checkpoint for rail passengers between Hong Kong and mainland China and vice-versa

Next steps of All China roll-out will include Beijing South, Shanghai and Chengdu.

  • Start Railway advertising in Q2 2007
  • Need to educate Chinese customers – BMC leads Railway advertising reformation
  • Potential for All china Roll-out – but slower development than expected (prices, occupancy rate)
  • New Joint Venture in Q2 2008 doubles China-reach
  • Shanghai to be integrated
  • Media formats at existing Railway Stations to be expanded

Exhibitions & Conferences

BMC´s most important events

China Beauty ExpoChina's No. 1 Exhibition in China.

China MiningNo.1 Mining Event in China and No. worldwide.

China SMT ForumThe most important SMT & MPT Event in China.

MICROPACConcurrent to China SMT Forum.

China Municipal TransportNo. 1 Transport & Logistic Exhibition in China.

PPI&FDC China (concurrent) Two of the Top-3 Food Exhibitions in China.

Procurement Exhibition for the Chinese Government.

GIMT China

One of the most important Machine Tool Exhibitions in South China.

CIOE

No. 1 Optoelectronics Exhibition worldwide.

Exhibitions: Position and Targets

With its 25 years history in exhibition, conference and publishing, BMC is a major player in China.

  • 9 leading international exhibitions & conferences in China
  • Thereof: 4 No.1 events in China
    • 1 No. 1 event worldwide

www.bmc-expub.com

  • Strong growth expected by:
  • Growth of existing events
  • Developing new Exhibitions
  • M&A activities
  • JVs with western Exhibitions
  • JVs with national Exhibition centers

The outdoor advertising market in China is very fragmented. According to the China AdvertisingAssociation, there are around 60,000 outdoor advertising companies.

The Top Seven cover approx. 16% of the market.

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* BMC Estimates 2008e Outdoor Advertising Market EUR 3,4 Billion

Peer group positioning

Peer's EBITDA as percentage of sales

Source: Bloomberg,2007 FY Figures

Die OOH Media Industry achieves worldwide significant EBITDA-Margins.

P/E 2009 ratio of BMC Peers

The PE-ratios of the industry are attractive .

Source: Bloomberg,August 25, 2009E P/E's

Consolidated Companies of BMC Group

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©Business Media China AG

* Marketing company in process of foundation

Consolidated Profit & Loss Statement

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  • Revenues +210%
  • Gross margin increased strongly
  • Slightly improved BMC Group result

  • Currency impact -5%

  • Exhibitions already profitabel

  • High investments in Advertising, Business Development and Administration

in TEUR

hf.yr. 2008 Hf.yr. 2007

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  • Revenues +35%
  • Gross margin increased strongly
  • Improved BMC Group result

Revenue analysis

Consolidated Revenue-projections by Development Status

Path to profitabilty:

  • Organic growth > 40%
  • New Biz, JV's, Acquisitions (external financing required)
  • Target >30% EBITDA on established business within 3 years
  • Exhibitions: increase of spaces & prices
  • OOH Media: occupancy rate, prices
  • Economies of scale

Business Media China AG

Rotebuehlstr. 8770178 Stuttgart – Germany Tel. +49 711 490 89 0

Investor Relations

Edwin van der Geest Tel. +41 79 330 55 22

[email protected]

www.businessmediachina.com

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