Roland Berger Prefabricated Housing Market 3

Prefabricated
housing market in
Central and
Northern Europe
– Overview of
market trends and
development
Study extract
Munich, January 2018

Management summary (1/2)
The market study at hand analyzes the prefabricated 1+2 family housing market in Central and Northern Europe, covering the countries
Germany, Scandinavia, the UK, Austria, Switzerland and Poland, and is based on primary and secondary sources of information
The market volume of 1+2 family housing in focus regions is expected to display solid growth of 2.0% p.a. from 2017 to 2022, driven by
a strong anticipated GDP development, favorable financing conditions, and governmental regulations and subsidiaries
Among 1+2 family housing, the prefabricated housing segment (c.15% of all 1+2 family houses) is expected to further gain in relevance by
growing at 3.2% p.a. from 2017 to 2022, driven particularly by an increasing demand for planning security and technology acceptance
> Germany (c.25 k), followed by Scandinavia (c.13 k) and the UK (c.12 k) are expected to display the largest prefab volumes in 2017
> Absolute volume growth is projected to be driven by Germany (3.1% p.a. in 2017-'22), the UK (3.8% p.a.) and Scandinavia (3.5% p.a.)
– In Poland prefabricated housing is currently less popular, considerable catch-up effects are expected going forward (6.9% p.a.)
Within prefabricated 1+2 family housing, there is a trend towards turnkey solutions with convenience and security as key drivers
> Turnkey solutions are the prevailing prefabricated finishing type, accounting for c.50% of the market volume, and are projected to
outgrow the prefabricated housing market in all focus regions (3.8% p.a. vs. 3.2% p.a. volume growth)
> Germany (c.10 k), Scandinavia (c.8 k) and the UK (c.7 k) are the largest prefabricated turnkey housing markets in 2017 and are
expected to grow at c.4% p.a. between 2017 and 2022
The market value of prefabricated 1+2 family housing is expected to grow at c.6% p.a. between 2017 and 2022 in Central and Northern
Europe due to favorable pricing trends (e.g. shift towards more expensive turnkey solutions and increasing wage levels)
> Turnkey solutions are forecast to outgrow the prefabricated housing market with c.7% growth p.a.
> Geographically, Switzerland (c.360 k per average prefabricated house), Scandinavia (c.330 k) and the UK (c.250 k) show the highest
average prefabricated 1+2 family housing prices in 2017, while Poland (c.80 k) is estimated to have the lowest price level
Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 2

Management summary (2/2)
The route-to-market differs by focus region: In the DACH region (Germany, Austria, Switzerland), prefabricated 1+2 family houses are
typically sold directly to end customers, while the UK has a higher share of intermediaries (i.e. developers and housing associations)
The key buying criteria of customers are price/quality ratio, quality of sales, product customization and brand perception – Customers are
increasingly willing to pay for superior quality, given the overall high investment combined with an expected long period of usage
In the DACH region, several manufacturers of prefabricated 1+2 family housing exist, with vast differences in product price segment and
level of finishing type
> The largest manufacturers are DFH, followed by Equistone assets (Bien-Zenker and Hanse Haus), WeberHaus, FingerHaus and
Polish-headquartered Danwood based on 2016 revenues
> The majority of manufacturers have been able to gradually increase their revenues between 2012 and 2016, driven by a favorable
market environment, which is expected to be the base for further growth going forward
Specifically for Germany, the prefabricated 1+2 family housing market appears to be largely fragmented with the top 5 suppliers
accounting for c.30% and suppliers beyond the top 5 holding market shares of below 3%
> Within the prefabricated 1+2 family housing market, the turnkey subsegment reveals a similarly high level of market concentration
> This market characteristic creates possibilities for M&A activity, which has intensified in recent years
The entry of new manufacturers in the prefabricated 1+2 family housing market is hampered by several barriers – The main market entry
barriers are related to technical capabilities, sales network with an attractive online channel, brand/track record and capital intensity

Contents
A. Market segmentation 5
B. Market trends and drivers 10
C. Market size and development 21
D. Selected customer and manufacturer aspects 36
E. Roland Berger 45

A. Market segmentation
20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 5

The 1+2 family housing market can be split along five dimensions:
Geography, construction tech., finishing & material type and price
Segmentation of the 1+2 family housing market
1+2 family housing

market (completed,
new houses)
Geography Construction Finishing Material Price

technology type type segment
> Central and > Prefabricated > Turnkey > Timber-frame > High-end
Northern Europe2) > Solid (EUR >250 k)
> Floor-covering > Brick
– DE, Scandi- > Mid-end
navia (SE, NO, > Shell-finished > Concrete
(EUR 150-250 k)
DK), UK, AT, CH
and PL > Low-end
> Other EU (EUR <150 k)
In blue: Focus of this study 2) Note: The key focus of this study is on Central and Northern Europe; Poland was added to the analysis as a representative
country for the promising Eastern European region

The study focuses particularly on the prefabricated housing market,
which can be segmented by finishing type, material type and price
Segmentation of the 1+2 family housing market Indicative – Non-scaled
Residential housing type Construction technology
Completed 1+2 family Solid

houses Traditional building technologies using
Single (detached) and two- brick/concrete or wood in which
family (semi-detached) construction takes place almost
houses entirely on building site Focus of this study
Prefabricated Finishing type
Industrially prefabricated houses
which are delivered in finished parts to Turnkey Floor-covering Shell-finished
the building site and assembled there
Material type
Timber-frame Other
Price segment
High-end Mid-end Low-end
(EUR >250 k) (EUR 150-250 k) (EUR <150 k)

Backup
The prefabricated housing segment seems to be particularly well

positioned to meet changing customer demand trends
Deep dive on construction technology: Customer demand trends
Solid Prefabrica-
Selected customer demand trends houses ted houses Comment
Increasingly busy lifestyle and importance of leisure time > While the majority of solid house construction is supervised
> Convenience of house construction process (i.e. one-stop shop and and coordinated by an owner, most of the prefabricated
turnkey solutions) gains in importance suppliers fully cover the entire house construction process
Increasing need for risk avoidance in a fast changing world > Prefabricated housing suppliers typically offer a higher
> Increased need for stabilization and certainty of future construction certainty in regard to construction budget and delivery date
outcomes in terms of price and time as compared to solid construction
Increasing health consciousness > A timber-framed house is considered more natural than a
> Increasing awareness of importance of healthy living and natural solid construction, offering benefits such as greater air
construction technologies circulation and less waste production during construction
Increasing price and product awareness of customers > Traditionally, prefabricated houses offer higher transparency
> Easier access to product offerings and comparisons as well as on designs and prices, however, lately this advantage was
higher awareness of 'reasonable' house prices partly diminished by growth of solid house catalogue players
Decreasing (building related) technical competency of customers > Increasing number of customers are willing to delegate the
> Growing number of customers typically have low experience and house construction process to a professional supplier that
knowledge of house construction processes and material selection supervises and coordinates all construction work and crews
Increasing need for security > Solid houses that offer thicker, hardly inflammable walls are
> Importance of staying safe and secure is growing, especially in an still considered more secure than timber-framed houses by
increasingly volatile environment many customers, although the provision of long-term
guarantees has helped to change this perception slightly
Increasing importance of individuality and customization > Although the possibility of customization of house architec-
> Customers increasingly require the possibility to select products ture has largely improved for prefabricated houses, solid
from a broad product range with many customization options houses provide fewer technical constraints in this respect
Fully addressing trend Not addressing trend
Source: Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 8
Scandinavia appears to have the highest prefab share and Switzerland
the highest turnkey share – Low prefab and turnkey shares in Poland
Overview of market segmentation by focus regions, 2017
Share of turnkey solutions [among prefabricated segment] > Scandinavia, Austria and
Germany are estimated to
High 70 have the highest
65 prefabricated shares
Switzerland among focus regions –
60 Low share is assumed in
55 the UK and Poland (focus
United Kingdom on solid constructions)
50 > The share of turnkey
45 solutions in the
prefabricated segment is
40 Scandinavia expected to be highest in
Germany
35 Switzerland, the UK and
Scandinavia, while Poland
30 Austria and Austria indicate rather
25 low shares
20 Poland
Low 15
0 10 20 30 40 50
Low High
Share of prefabricated housing [among 1+2 family housing segment]
Relevant market size (indicative), number of completed 1+2 family houses p.a.
Source: Euroconstruct, Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 9
B. Market trends
and drivers

The prefabricated housing market volume and price are expected to
be favorably driven by a number of trends
Key market trends for the prefabricated housing market Indicative
Rele- Influence on
Market trends vance Description
A GDP development > Short/mid-term GDP growth rates are one of the closest proxies for
construction development – Positive GDP growth rates expected
1+2 family housing
B Financing conditions > Interest rates are expected to remain at record low levels in focus
and land costs (interest regions until 2019, positively impacting the new 1+2 housing market
rates) > From 2019 onwards moderate increases are expected to be partially
compensated for by a stabilization of land prices
C Population growth > The overall population level is expected to remain at a largely stable to
(incl. migration) slightly increasing level in all focus regions in the upcoming years
Volume
D Energy efficiency regulations > All focus regions have building energy efficiency regulations in place –
& governmental subsidies UK customers strongly benefit from governmental housing initiatives
E Planning security > Customers increasingly value planning security regarding budget and
Prefabricated
move-in date – Prefab constructions usually outperform solid ones

F Construction period > Prefabricated housing significantly reduces the construction time,
given an effectively managed order backlog at manufacturers
G Technology acceptance > Technology acceptance for prefabricated houses is increasing across
focus regions – Prefab houses are increasingly seen to be modern
Turn-
> One partner from design to construction facilitates the entire process
key
H One-stop shop solution

and thereby reduces the possibility of errors especially for individuals
Price
I Price of prefabricated > Prefab turnkey house prices are driven by wages and to a lesser
turnkey houses extent material prices – Increase in wages leads to price increases
Overall > Overall, favorable trends for the prefabricated housing market
in the focus regions
High relevance Low relevance Positive influence Negative influence
A GDP development
All focus countries are forecast to show positive GDP growth rates,
averaging to c.2% p.a. between 2017 and 2022
Comparison of real GDP development, 2010-2022 [%, indexed1)]
Historical Forecast CAGR CAGR > For Germany, a favorable and
'14-'17 '17-'22 stable GDP development of
1.20 1.5% p.a. by 2022 has been
Poland 3.7% 3.1%
forecast mainly due to
Norway 1.7% 1.8% – Favorable financing and
1.15
United Kingdom 1.9% 1.8% investment conditions
– Construction activity and
1.10 Denmark 1.9% 1.8% further public investments
Switzerland 1.2% 1.8% – Strong labor market
1.05 Sweden 3.5% 1.8% > The economy in Poland is
expected to outperform that of
Austria 1.8% 1.6% other focus countries,
1.00 Germany particularly due to
2.0% 1.5%
– Transfer of EU funds and
increased investments
0.95
– Strong labor market driving
private consumption (also
0.90 through government
transfers)
> GDP forecasts for the UK
0.85 remain difficult as the full
effects of Brexit are not yet
clear – However, low interest
0.80 rates still provide a good
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 climate for investments
1) Index: 2017 = 1.00
Source: Oxford Economics, World Bank, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 12
B Financing conditions and land costs (interest rates)
Interest rates are currently at a historically low level and expected to

moderately increase from 2019 onwards
Interest rates: Central bank rates, 2010-2022 [%]
Historical Forecast
5 "Extremely cheap "Interest rates
money is certainly only determine the
one of the drivers of industry development
the higher value of to a limited extent.
4 new 1+2 family I would not expect a
houses constructed direct effect if interest
in Sweden" rates go up by 1-2%
Manufacturer again"
3 Manufacturer
Poland
Norway
"In the UK, the help- "Expected interest rate
2 United Kingdom to-buy scheme increases will mostly
Sweden provides access to impact the low-price
cash for extremely segment as these
Denmark low rates – This people are most reliant
certainly helps" on cheap loans"
1
Manufacturer Manufacturer
Germany, Austria1)
"Interest rates certainly have an influence but
0 Switzerland need to be assessed always in combination with
land prices – I would not be worried about an
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 increase in interest rates by 2-3%, as I would
expect land prices to stabilize"
-1 Market expert
1) Common EUR interest rate
Source: Oxford Economics, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 13
C Population growth (incl. migration)
Overall, the focus countries are forecast to show minor population

increases or remain largely stable in the upcoming years
Population: Inhabitants per country, 2010-2022 [m]
Historical Forecast CAGR CAGR > The overall population
'14-'17 '17-'22 level of focus countries is
90
expected to remain at a
Germany 0.9% 0.0% largely stable level in the
80 upcoming years
> Germany, which has
70 0.7% 0.5%
United Kingdom experienced a moderate
increase of its population
60 in the past decade, is
forecast to be flat on this
50 indicator going forward
40
Poland 0.0% -0.1%
30
Sweden 0.9% 0.6%
20 Austria 0.6% 0.5%
Switzerland 1.1% 0.9%
10
Denmark 0.6% 0.3%
0 Norway 0.9% 0.9%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
D Energy efficiency regulations & governmental subsidies
Energy efficiency regulations available in all focus regions are likely to

positively impact the prefabricated housing markets, esp. in the UK
Overview of energy efficiency regulations & governmental subsidies
Austria &
Germany Scandinavia UK Switzerland Poland
Key > German Energy Saving > In Norway: Energy > Self and Custom Build > In 2013, a referendum > Increasingly strict energy
regulations & Ordinance (EnEV) efficiency regulations Housing Act 2015 led to the restriction that efficiency regulations for
(TEK10) > Government's Housing only 20% of homes in newly constructed
governmental holiday areas can be buildings
> Across Scandinavia, and Planning Bill
subsidies the high tax rates on used as second homes > Governmental support
electricity support programs favor flats and
timber-frame solutions developer-built houses
Market "At the moment, there "Across Scandinavia, "Prefab housing "In Switzerland, "There are programs
feedback is no dedicated the prefabricated manufacturers benefit canton regulations that aim at increasing
governmental subsidy segment is historically from governmental favor local companies. the number of energy-
program in place for very strong – There is programs to increase However, the efficient and passive
prefabricated houses" simply no need for the and facilitate access referendum on second houses in Poland with
Manufacturer government to further to new housing" homes limits 1+2 funds secured until
support the industry Manufacturer family prefabricated 2022"
"Higher energy through subsidies" housing constructions. Manufacturer
efficiency require- Manufacturer "The ecological trend In Austria, I believe no
ments increasingly and focus on energy subsidy programs are
support the prefabrica- efficiency will favor in place"
ted market segment" prefabricated houses" Manufacturer
Market expert Market expert
Influence
Positive influence Negative influence
E Planning security
Market feedback revealed planning security and comfort level to be

a key driver in the purchasing decision for prefabricated houses
Market feedback – Planning security
Austria &
"I value the reliability of "When deciding on my "Our customers of "I would always prefer a "Customers value the fact
house cost estimations. house, I was in contact with prefabricated houses know prefabricated house after that they have to deal with
Once the contract is signed 5 companies. All of them exactly what they get from having had horrible only one party during the
the house price is fixed" provided me with detailed us. We offer homes that experiences with architects construction process within
Customer information on potential are highly precise and not meeting deadlines" agreed deadlines and
move-in dates. Planning accurate, without any heat- Customer budget"
security was definitely a loss and absolutely air- Manufacturer
"Market players use the strong criterion for my tight. This offers a very high "Compared with
promise to reliably deliver choice" quality level to customers" competition from on-site "All construction dates are
the house on a pre-agreed Customer Manufacturer 1+2 family projects, we can agreed beforehand.
date as a means of certainly offer higher Customers know what to
attracting customers" planning security. Our expect and within what
Market expert "One of the drivers of the "Knowing the exact move- building process is routine- timeframe – It definitely
Norwegian prefabricated in date helped us to plan based, guaranteeing increases planning
housing market is certainly and organize moving out of delivery at a promised point security"
planning security. our previous home. in time" Manufacturer
"When deciding for a Customers really look for a Additionally, we Manufacturer
prefabricated house and concrete date when they appreciated the possibility "Knowledge of the exact
against on-site can move in, which we can to agree upon a reliable "Knowing exactly what you price before construction is
construction, planning offer" house construction budget need to pay upfront is a key a great advantage that
security is a key driver" Manufacturer upfront" advantage for our clients" increases the comfort level"
Manufacturer Customer Manufacturer Manufacturer
F Construction period
Prefabricated housing significantly reduces the construction time,

given an effectively managed order backlog at manufacturers
Overview of construction period of prefabricated vs. solid houses Indicative
Prefabricated – Overall time: 3-4 months (accumulated time)

2 weeks 2-3 days 1-2 days 1-2 days Total: Total: Total:
"Although lead times might be significantly longer,
1 month 2 months c.3 months construction of prefabricated houses can be performed within
3-4 months, offering a considerable advantage over on-site
> Foun- > House > Trans- > Assembly > Shell- > Floor- > Turnkey: construction projects"
dations elements port by (including finished covering The finishing, Manufacturer
prefabri- truck roofing) fixtures and
cated fittings are "Due to the long backlog of many industry players, there is
ready currently limited advantage in construction time for
prefabricated buildings, esp. in the DACH region"
Market expert
Solid on-site – Overall time: 6-8 months (accumulated time)

3 weeks 4 weeks 4 weeks Total: 3 months Total: 4-5 months Total: >6 months
> Cellar & > Masonry > Roof, > Shell-finished > Floor-covering > Turnkey:
foundations works windows, The finishing,
doors fixtures and
fittings are
ready
Note: Planning/design not taken into account; best-case scenario shown
Source: Immonet, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 17
G Technology acceptance
Market feedback on prefabricated houses suggests increasing

acceptance of and demand for modern and individual solutions
Market feedback – Technology acceptance
Austria &
"Key players have "In Denmark, prefabricated "They have a modern and "Neighbors and friends "Prefabricated houses are
enlarged and personalized houses are typically non- luxurious product offer. I have already asked me a not yet widely accepted"
their portfolio – This has timber-frame solutions. I would not hesitate to buy a couple of times who I built Market expert
helped to increase the expect, however, a slightly new house from them if I my prefabricated house
acceptance level" increasing trend towards needed one in the future" with, as it looks modern "In Poland, prefabricated
Manufacturer timber-frame in the future" Manufacturer and quite unique" houses were historically
Manufacturer Customer associated with lower
"Prefabricated houses are quality, yet nowadays
"Prefabricated construction quite a convenient product.
"In Sweden, we are people increasingly realize
style is just the better and Furthermore, it can be a
European leaders in & appreciate their quality"
more modern way with solution to the rapid
prefabricated technology. "I am a satisfied customer Manufacturer
regard to energy efficiency retirement rate of UK
and fulfillment of regulatory People appreciate the high of a prefabricated house in
energy efficiency" construction workers" "The acceptance of timber-
requirements" Manufacturer Switzerland, yet
Manufacturer Market expert sometimes I am a bit frame prefabricated
jealous when I see the houses is relatively low but
"We've shown that there is development and options we see an increased
"The possibility to introduce "In general, the
a demand for prefabricated available nowadays in the interest in this technology,
individual adjustments is Scandinavians simply like
houses, we have shown prefabricated housing as customers have been
key in winning new timber-frame buildings
that quality levels are high, market" approaching us more
customers against on-site based on their
and it's therefore becoming Customer frequently in the last 2-3
construction" architectural tastes"
increasingly accepted" years"
Manufacturer Manufacturer
Market expert Manufacturer
H One-stop shop solution
The prefabricated turnkey one-stop shop approach offers

convenience and requires less personnel time and resources
Overview of prefabricated turnkey vs. solid construction: One-stop shop
One-stop shop "Convenience is a strong driver of prefabricated
and turnkey house development – One single
"In Poland, the process of making houses
turnkey is typically supported by families,
point of contact and high reliability are very neighbors and friends. People are very
attractive for customers" skilled, so they do not need to assign a
Prefabricated turnkey Manufacturer company for everything"
Market expert
"Prefab turnkey one-stop shop offers high
convenience, whereas during conventional on- "Especially for people that lack time and are
site constructions, assignment of up to 10 parties not born craftsmen, one-stop shop offers
could become a very lengthy and tedious significant advantages"
process" Manufacturer
Client Manufacturer
"When I decided for my second home in "Building a house and organizing all
VS. Switzerland, I just wanted to have one point of necessary process steps can be quite
contact. For me, it was of utmost importance that cumbersome. I really appreciated having one
On-site construction my involvement in the process was limited. As a point of contact that guides me through the
businessman, I simply do not have the time" process"
Besides the Customer Customer
architect, the house
builder needs to get
in contact with up "As many of our customers are families with both "All across Europe, we see a trend that
to 10 additional parents working, we see that one-stop shop individuals are less savvy when it comes to
parties (e.g. roofer, solutions are increasingly valued. People have house building. The work that people in the
Client floorer, plumber, less time for planning and overseeing the past could do on their own often needs to be
electrician)
construction process of their house. This is why provided by companies now"
we offer the necessary support" Market expert
Manufacturer
I Price of prefabricated turnkey houses
Due to the strong economic development, average wages are

expected to grow strongly, supporting growth in house prices
Comparison of wages per hour1)2), 2010-2022 [EUR/h]
CAGR CAGR > Inflation rates have
Historical Forecast '14-'17 '17-'22
65 led to an increase in
average wage levels
60 Switzerland 8.3% 2.0% and material prices
55 Norway 0.0% 4.7% > Further acceleration of
50 wage dynamics is
Denmark 3.9% 3.6% expected, especially
45 in Poland, Sweden
40 and Norway
Sweden 6.3% 4.8%
35
Germany 3.6% 3.7%
30 Austria 3.6% 3.1%
25 United Kingdom -0.2% 4.4%
20 "There are basically two
main factors influencing
15 the prices of housing:
Wages, which are
10 Poland 2.5% 6.6% expected to increase in
5 the coming years, and to
a lesser extent material
0 costs"
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Market expert
1) Direct pay and social insurance expenditures and labor-related taxes (minus subsidies);
2) Nominal values – For Denmark, Norway, Poland, Sweden, Switzerland and the UK recalculated from local currency to EUR using floating average exchange rates
C. Market size and
development

The prefabricated 1+2 family housing market has been derived via a
market model, incorporating primary and secondary sources
Market model methodology
Methodology Sources
Euroconstruct, national
Volume 1+2 family housing2) statistics, interviews
x
Interviews, project
Share of prefab housing experience
=
Prefabricated housing2)
x x x
Interviews, project
Share by material type Share by finishing type Share by price segment experience
= = =
Prefabricated housing by Prefabricated housing by Prefabricated housing by
material type finishing type price segment
x
Interviews, project
Price1) Price by finishing type experience
=
Value1) Prefabricated housing by
finishing type
1) Nominal price and market value development; 2) Completed houses Output Input / By focus region

The market value of prefabricated 1+2 family housing is expected to
grow across all focus regions between 2017 and 2022
Overview of market development, 2017 vs. 2022
Average price1) [EUR]
High 450,000
400,000 Switzerland 2022 (0.6)
Scandinavia 2022 (6.1)
Switzerland 2017 (0.5)
350,000
Scandinavia 2017 (4.3)
300,000
United Kingdom 2022 (4.3)
250,000
Austria 2022 (1.2)
200,000 United Kingdom 2017 (3.0)
Germany 2022 (7.1)
150,000 Germany 2017 (5.2)
Austria 2017 (1.0)
100,000 Poland 2022 (0.2)
Poland 2017 (0.1)
50,000
0
Low 0 5,000 10,000 15,000 20,000 25,000 30,000 35,000
Low High
Relevant market size of prefabricated housing [EUR bn] Prefabricated housing market volume2) [units]
1) Average prefabricated 1+2 family housing prices used; 2) Completed 1+2 prefabricated family housing
Source: Euroconstruct, Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 23
The market volume of 1+2 family housing is expected to continue its
growth between 2017 and 2022 but at a slower pace
Market volume of 1+2 family housing, 2014-2022 [k units]
CAGR CAGR > The market volume of 1+2
'14-'17 '17-'22 family housing is forecast
423.5 428.0 5.3% 2.0% to display solid growth of
410.4 419.0 6.5 c.2% p.a. from 2017-'22
398.7 6.4 6.4 18.4 Switzerland -2.6% -1.6%
6.6 17.8 18.1
386.8 6.8 17.6 2.0% 1.4% > All focus regions display
7.0 17.5 36.3 Austria
365.9 34.5 35.4
an expected increase in
356.8 7.2
17.2 33.4 Scandinavia1) 6.6% 3.1%
33.1
331.7 16.4
7.5 16.6 31.2 1+2 family housing market
16.2
7.6
27.3
29.1
91.9 92.1 Poland 3.4% 1.8%
volumes, except for
91.7
25.7 88.3
91.6 Switzerland
84.3
79.8 80.1 > Geographically, the UK,
76.1 Germany and Poland
show the highest demand
123.5 124.8 126.0 Germany2) 2.3% 2.0% for 1+2 family housing in
118.1 122.3
114.3
102.7 109.6 2017 across all focus
106.8 regions
148.7
United
132.9 135.0 138.9 145.1 146.9
Kingdom 10.2% 2.3%
123.1 123.4
99.2
2014 2015 2016 2017 2018 2019 2020 2021 2022

1) Including Sweden, Norway and Denmark; 2) Market volume development of 1+2 family housing in Germany based on interviews
Source: Euroconstruct, Swedish National Statistics, Interviews, Press research, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 24
Among 1+2 family housing, prefabricated housing is expected to
gain in relevance, growing at c.3% p.a. from 2017 to 2022
Market volume of prefabricated housing, 2014-2022 [k units]
CAGR CAGR > Prefabricated housing
'14-'17 '17-'22 growth is expected to
70.1 6.1% 3.2% outpace the 1+2 family
68.4 1.4 housing market
66.8 1.4 Switzerland -1.7% -0.6%
64.6 1.3 6.5
62.3 1.4 6.4 Austria 1.9% 1.6% > Geographically, absolute
59.8 1.4 6.3
1.4 6.2 growth is projected to be
56.3 6.2 driven by Germany, the
53.2 1.4 6.0
15.2
15.6 Scandinavia1) 6.9% 3.5% UK and Scandinavia
50.1 1.5 5.8 14.8
1.5 14.2
5.8 13.9 > The UK is expected to be
5.7 13.2 2.2 Poland 7.6% 6.9% negatively impacted by
2.0 2.1
12.7 1.9
11.8 1.8 Brexit and is forecast to
1.6
10.8
1.4
grow stably but well below
1.4 strong historical growth
1.3
28.4 29.0 29.6 Germany 4.6% 3.1% figures
26.6 27.8
24.1
25.4 > In Poland, prefabricated
22.0 housing is currently
22.2
assumed to be less
popular than in other focus
United regions – Some catch-up
14.0 14.3 14.7 12.2% 3.8%
8.6 10.8 10.9 12.2 12.6 13.2 Kingdom effect anticipated going
forward, underpinned by
strong growth until 2022
2014 2015 2016 2017 2018 2019 2020 2021 2022
1) Including Sweden, Norway and Denmark
Source: Euroconstruct, Interviews, Press research, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 25
Within prefabricated 1+2 family housing, there is a trend towards
turnkey solutions with convenience and security as key drivers
Market volume of prefabricated turnkey housing, 2014-2022 [k units]
CAGR CAGR > The share of turnkey
'14-'17 '17-'22 solutions is projected to
33.7 7.3% 3.8% outgrow the prefabricated
32.7 0.9 -1.5% -0.2% housing market
31.7 0.9 Switzerland
30.4 2.0
0.9 2.0 Austria 2.1% 2.0% > This development is
29.2 0.9 1.9
27.9 0.9 1.9 expected to be driven by a
26.2 0.9 1.9 growing demand for
24.6 0.9 1.8
9.3
9.6 Scandinavia1) 7.2% 3.8% convenience and security
1.7 9.0
22.6 0.9
8.6 (provision of guarantee)
1.7
0.9
7.9
8.4 across all focus regions
1.7 0.4 0.5 Poland 8.8% 7.9%
7.7
0.4
0.4 > Germany, followed by
7.1 0.4 Scandinavia and the UK
6.4 0.3
0.3 are the largest
0.3 11.3 11.6 Germany 5.6% 4.0% prefabricated turnkey
11.0
0.3 10.7
9.6 10.1 housing markets
8.1 9.0
8.1
United
8.0 8.5 8.8 9.1 12.8% 4.3%
6.4 6.5 7.4 7.6 Kingdom
5.1
2014 2015 2016 2017 2018 2019 2020 2021 2022

The market value of prefabricated 1+2 family housing is projected to
grow faster than volume growth due to favorable pricing trends
Market value of prefabricated housing, 2014-2022 [EUR bn]
CAGR CAGR > The market value of
'14-'17 '17-'22 prefabricated 1+2 family
19.4 9.7% 6.4% housing is expected to
18.4 0.6 Switzerland 1.3% 1.5% grow faster than volume
17.4 0.5 1.2
Austria 4.8% 4.2%
growth due to
0.5 1.2
16.3 – Shift towards turnkey
0.5 1.1
15.3 solutions with 20-30%
0.5 1.1
14.2 6.1 Scandinavia1) 10.4% 7.0% higher average prices
0.5 1.0
13.0 5.7 (greater value added)
1.0 5.4
11.9 0.5
5.0
vs. floor-covering
0.9
10.8 0.5 4.7 0.2 Poland 11.5% 11.8% – Favorable pricing
0.9 0.2
0.5 4.3 0.2 trends due to growing
0.9 4.0 0.2
0.1 wage levels across all
3.6
3.2
0.1
Germany
focus regions
0.1 6.7
7.1 8.1% 6.3%
0.1 6.1
6.4 – Positive region mix
0.1 5.6
5.2 effects (Scandinavia
4.8 and the UK with above
4.2
4.1 average price level and
United market growth)
3.5 3.8 4.0 4.3
Kingdom 15.4% 7.1%
2.6 3.0 3.2
2.0 2.5
2014 2015 2016 2017 2018 2019 2020 2021 2022

Turnkey solutions account for more than 50% of the prefabricated
1+2 family housing market and are forecast to outgrow the market
Market value of prefabricated turnkey housing, 2014-2022 [EUR bn]
CAGR CAGR > Within prefabricated 1+2
'14-'17 '17-'22 family housing, turnkey
11.2 10.6% 7.0% solutions are clearly the
10.5 0.4 Switzerland F 1.5% 1.8% prevailing finishing type
9.9 0.4
0.5
Austria E 5.0% 4.6%
(share of more than 50%)
0.4
9.2 0.4 > Turnkey solutions are
0.4
8.6 0.4 projected to outgrow the
0.4 prefabricated housing
8.0 0.4
0.4 4.2 Scandinavia1) D 10.6% 7.4%
0.4 3.9 market by growing at c.7%
7.3 0.4
0.3
3.7 p.a. from 2017 to 2022
6.6 0.3 3.4
0.4 3.2
> Scandinavia, followed by
5.9 0.3 0.1 Poland C 12.6% 12.8%
0.3 2.9 0.1 Germany and the UK are
0.3 0.0 the largest prefabricated
2.7 0.0
2.4 0.0 3.2 Germany B 9.1% 7.1%
turnkey housing markets
0.0 3.0
2.2
0.0 2.9 in value terms
0.0 2.7
2.5
0.0 2.3
1.8 2.1
1.8
United
2.6 2.7 2.9 A 15.8% 7.5%
2.0 2.2 2.3 Kingdom
1.7 1.7
1.3
2014 2015 2016 2017 2018 2019 2020 2021 2022

A Deep dive on United Kingdom
The prefabricated housing market in the UK is characterized by a

large share of turnkey solutions and houses above EUR 150 k
8.7% 9.2% 9.9%
CAGR CAGR
> The significant historical
By finishing type '14-'17 '17-'22 increase in market volume
14.7 14.7 of prefabricated housing in
12.2
Turnkey 12.8% 4.3% the UK from 2014 to 2016
8.6 9.1
7.4
Floor-covering 12.5% 4.0% was driven by
12.2 5.1
– Governmental support
2.4 3.0 10.4% 1.9%
1.7 Shell-finished
1.8 2.4 2.6 – Housing shortage
2014 2017 2022 > The trend towards turnkey
8.6 By material type solutions is further fueled
14.7 by a shortage of
12.2 craftsmen and a growing
4.1 Timber-frame 13.7% 5.8%
8.6 3.1
2.1
demand for security and
9.1 10.6 Other 11.7% 4.5% convenience
6.5
> Within the UK, Scotland
2014 2017 2022 is believed to have a very
high share of timber-frame
By price segment construction of c.75%
14.7
12.2 > The vast majority of
8.6 6.7 EUR >250k 12.7% 3.9% houses cost in excess of
5.5
2014 2017 2022 3.9 EUR 150-250k 12.3% 4.2% EUR 150 k
6.1 7.5
4.3 EUR <150k 7.6% 0.1%
Share of prefabricated 0.5 0.6 0.5
x.x%
1+2 family housing
2014 2017 2022
B Deep dive on Germany
In Germany, prefabricated turnkey housing is expected to grow

strongest until 2022 – Timber-frame is the prevailing material type
20.8% 22.2% 23.5%
CAGR CAGR
> Prefabricated housing
By finishing type '14-'17 '17-'22 growth is expected to
29.6 29.6 outpace the 1+2 family
25.4
22.2 11.6 Turnkey 5.6% 4.0% housing market
9.6
8.1
25.4
11.6 Floor-covering 3.8% 2.6% > Within prefabricated
9.1 10.2
Shell-finished 4.2% 2.4% housing, turnkey solutions
22.2 5.0 5.7 6.4
are projected to grow
2014 2017 2022 strongest in the upcoming
years
By material type
29.6 > Timber-frame is the
25.4
22.2 prevailing material type of
25.4 Timber-frame 4.7% 3.3% prefabricated housing and
18.9 21.6
is expected to further gain
Other 3.9% 2.1%
3.4 3.8 4.2 in relevance – This
development is supported
2014 2017 2022
by the increasing
relevance of sustainability
By price segment
29.6 and ecological structures
25.4
22.2 3.5
5.5 EUR >250k 7.4% 9.8% > The mid-price segment
2.8
2014 2017 2022 11.6 13.8 16.7 EUR 150-250k 5.9% 3.9% (EUR 150-250 k) is
EUR <150k 1.3% -2.1%
forecast to show the
7.8 8.2 7.4
Share of prefabricated strongest absolute growth
x.x%
1+2 family housing 2014 2017 2022
C Deep dive on Poland
The Polish market for prefabricated housing appears very price-

sensitive and mainly focused on shell-finished housing
1.7% 1.9% 2.4%
CAGR CAGR
> In Poland, the
By finishing type '14-'17 '17-'22 prefabricated housing
2.2 2.2 market is dominated by
1.6 0.5 Turnkey 8.8% 7.9% shell-finished solutions –
1.3 0.3
0.3
0.7 Floor-covering 8.4% 7.6% Local people seem to
0.5
0.4
1.1 Shell-finished
have the required skill set
0.7 0.8 6.6% 6.0%
to perform internal
1.6 finishing themselves
2014 2017 2022
> However, with younger
1.3 By material type generations of Poles being
2.2
1.6
less technically savvy,
1.3
1.8 Timber-frame 7.6% 6.9%
other finishing types are
1.0 1.3 gaining in relevance
Other 7.6% 6.9%
0.3 0.3 0.4 > The Polish market for
prefabricated housing
2014 2017 2022
appears very price-
sensitive with the vast
By price segment 2.2 majority of houses being
1.6 0.1 0.0 EUR >250k 8.3% 9.0% below EUR 150 k
1.3 0.1 0.0
0.1 0.0 EUR 150-250k 8.5% 10.3% > Timber-frame is estimated
2014 2017 2022 2.0
1.2 1.5 EUR <150k 7.4% 6.7% to be the prevailing
Share of prefabricated material type
x.x%
1+2 family housing 2014 2017 2022
D Deep dive on Scandinavia
In Scandinavia, turnkey solutions and timber-frame constructions

are the prevailing finishing type and material type, respectively
41.8% 42.2% 43.0%
CAGR CAGR
> Compared to other focus
By finishing type '14-'17 '17-'22 regions, Scandinavia has
15.6 an exceptionally high
15.6
13.2 7.2% 3.8% share of prefabricated
10.8 Turnkey
7.9
9.6
Floor-covering 7.6% 3.6% housing (c.42% in 2017)
13.2 6.4
2.1 2.7 3.2 Shell-finished 5.4% 2.2% > Sweden accounts for the
2.2 2.6 2.9 largest portion of the pre-
10.8 2014 2017 2022 fabricated housing market
By material type > The prefabricated housing
market in Scandinavia is
15.6
13.2 dominated by the premium
10.8 price segment and turnkey
14.7 Timber-frame 7.0% 3.6% solutions
10.1 12.3
Other 6.1% 2.1%
0.7 0.9 0.9 > Timber-frame is by far the
dominant material type
2014 2017 2022
By price segment
15.6
13.2 EUR >250k 6.9% 3.2%
10.8
8.8
2014 2017 2022 6.2
7.6 EUR 150-250k 7.4% 4.0%
3.8 4.8 5.8 EUR <150k 5.4% 2.9%
Share of prefabricated 0.7 0.9 1.0
x.x%
1+2 family housing
2014 2017 2022
E Deep dive on Austria
The Austrian prefabricated housing market displays a good balance

of finishing types – Timber-frame is the prevailing material type
35.2% 35.1% 35.4%
CAGR CAGR
> Austria reveals a high
By finishing type '14-'17 '17-'22 share of prefabricated
6.5 6.5 housing (c.35% in 2017) –
5.7 6.0
6.0 1.8 2.0 Turnkey 1.1% 2.4% The western part of
1.7
5.7 Floor-covering 1.0% 2.2% Austria has a lower share
2.3 2.4 2.6
than the eastern part of
1.8 1.9 Shell-finished 0.6% 1.3%
1.7 the country
2014 2017 2022 > Prefabricated housing
displays a good balance of
By material type different finishing types
6.0 6.5 > The mid-price segment is
5.7
estimated to account for
4.4 4.7 5.2 Timber-frame 1.2% 2.5% the largest share of
Other -0.1% 0.1% prefabricated housing –
1.3 1.4 1.3
The mid- and high-price
2014 2017 2022 segments are forecast to
grow strongest in the
By price segment
6.5 upcoming years
5.7 6.0
0.6 0.7 EUR >250k 3.1% 1.6%
0.6
2.9 3.1 3.5 EUR 150-250k 2.9% 2.1%
2014 2017 2022
2.2 2.3 2.3 EUR <150k 1.1% 0.3%
Share of prefabricated
x.x%
1+2 family housing 2014 2017 2022
F Deep dive on Switzerland
In Switzerland, the prefabricated housing market is projected to

remain broadly stable following a slight decline historically
19.7% 20.2% 21.2%
CAGR CAGR
> The Swiss prefabricated
By finishing type '14-'17 '17-'22 housing market is forecast
1.5 to remain broadly stable
1.5 1.4 1.4
1.4 following a slight decline
1.4 Turnkey -1.5% -0.2%
0.9 0.9 0.9 Floor-covering -1.6% -0.4% between 2014 and 2017
0.4 0.4 0.4 Shell-finished -3.7% -4.0% > Turnkey solutions and
0.2 0.1 0.1 timber-frame constructions
2014 2017 2022 are the prevailing finishing
type and material type,
By material type respectively
1.5 1.4 1.4 > The premium price
1.1
segment (EUR >250 k)
1.1 1.0 Timber-frame -1.4% -0.3%
accounts for the largest
0.4 0.4
Other -2.8% -1.5% share of the prefabricated
0.3
housing market
2014 2017 2022
By price segment
1.5 1.4 1.4
EUR >250k -1.9% -0.8%
2014 2017 2022 1.2 1.1 1.0 EUR 150-250k -0.8% 0.4%
0.3
EUR <150k -4.4% -2.6%
Share of prefabricated 0.3 0.3
x.x% 0.0 0.0 0.0
1+2 family housing
2014 2017 2022
Among the focus regions, Switzerland, followed by Scandinavia and
the UK, displays the highest average prefabricated housing price
Development of average prefabricated housing pricing, 2014-2022 [EUR k]
Germany Scandinavia United Kingdom > All focus regions show
growing average
3.4% 3.1% 3.2% 3.4% 2.8% 3.1% prefabricated housing
prices between 2017 and
390 2022, largely in line with
300 330
247
288 historical price increases
205 239 228
186 > Switzerland, followed by
Scandinavia and the UK
have the highest average
2014 2017 2022 2014 2017 2022 2014 2017 2022 prefabricated housing
price – Poland is
estimated to have the
Austria Switzerland Poland lowest price
> Prices are positively
2.9% 2.6% 3.1% 2.1% 3.6% 4.6% impacted by increasing
404
wage levels and a shift
333 364 towards turnkey solutions,
which are more expensive
166 188 (higher value added)
152
71 79 100
2014 2017 2022 2014 2017 2022 2014 2017 2022

x.x% CAGR 2014-'17 x.x% CAGR 2017-'21
D. Selected customer and
manufacturer aspects

In the DACH region, prefabricated houses are typically sold directly to
end customers, while the UK has a higher share of intermediaries
Distribution channels – Prefabricated house route-to-market Indicative
DACH1) Poland UK
Route-to-market Manufacturers Manufacturers Manufacturers

1-3% 0-1% 70-75%
Developers/
97-99% Developers 99-100% Developers 25-30%
housing assoc.
End customer End customer End customer
Relevance of > Large developers almost > Housing manufacturers > Rather low share of self-build
developers exclusively focus on traditional typically organize and is a result of the lack of land
technologies to retain control supervise house construction with building permission,
and other of the construction process on their own difficulties in obtaining a
intermediaries and to optimize costs > Developers are cost conscious mortgage for self-builders and
> Small prefabricated housing and rely on traditional historical customer
manufacturers are reported to technologies to fully control the preferences towards developer
cooperate with regional construction process projects
developers on projects of up > Developers typically do not > However, the importance of
to 10 houses – However, this consider prefabricated houses developers is likely to slightly
is rarely the case for large for their projects, fearing decrease as the government
manufactures difficulty in finding multiple plans to grant more incentives
buyers for houses based on and permissions to individual
Future trend the rather new technology investors
1) Germany, Austria and Switzerland
Backup
The UK prefab housing market is currently dominated by developers

– Development of self-build is likely to be supported by legislation
Distribution channels – Deep dive on UK Indicative
c.10%
Total new 1+2
family houses [%]
Self-build > The residential 1+2 family housing

market is dominated by intermediaries Right to Build legislation Selected projects
– Developers and housing associations
Developers/ are better positioned to acquire land, > The majority of local authorities Cherwell District Council
housing c.90% receive construction permissions and (mainly local councils) across the Delivery of 2,000 custom-build
associations financing than individual investors UK are obliged to hold registers to homes in a 10 year period
– Customers are used to buying ready- track the demand for self-build land
made houses built by developers plots Sheffield City Council
> Eligible for registration are British Making available over 800 self-build
or EU citizens >18 years old
houses [%]
Prefabricated
> Also in the prefabricated housing sites

Self-build 25-30% seeking to build a house as their
market, the majority of volumes are
sole residence Stoke-on-Trent City
estimated to be sold through
developers and housing associations > Local authorities have a duty to Making available 72 hectares of
Developers/ grant planning permissions for land for self-builders
housing 70-75% sufficient serviced plots to meet
associations registered demand within a three- Teignbridge District Council
year period (on an ongoing basis)
'5% self-build' policy (5% of all new
> Serviced plot is a piece of land that homes delivered by self-builders)
3-5% already has access to utilities and
Timber-frame
prefab houses [%]
Developers/ > Self-builders tend to use timber-

housing is fundamentally ready to develop …
frame prefabrications (frequently in
associations the form of so-called kit houses for
self-assembly), while developers
Self-build 95-97% typically focus on other > Legislation is expected to boost > First projects aimed at providing
prefabrication technologies the number of self-build homes building schemes or sites for
across the UK self-builders are already in the
development phase
Customers consider quality of sales, product customization, brand
image and price/quality ratio as key buying criteria
Customers' key buying criteria Indicative
Success factors Importance

> Product quality is one of the most important buying criteria for customers, considering the high investment
Quality
and the anticipated long period of usage
Quality of sales > A customer-friendly sales organization is a crucial factor for typically busy and inexperienced customers
(online and offline > The online channel has become an increasingly important source of product information, comparison and
channel) initial shortlisting – Relevance of the online presence as direct sales channel is expected to further increase
> Besides product quality, the final product price is a key buying criterion for customers – However, customers
Price
are willing to pay for superior quality (good price/quality ratio)
> German, British and Swiss customers appear to be considerably less price sensitive than Polish customers
Product > Customization options bring the prefabricated segment closer to the solid housing segment
customization > Most of the suppliers allow the usage of external sources in the designing process
Brand perception/ > As the investment is a substantial part of the family budget, a good reputation plays a crucial role in assuring
track record a sound service, particularly for countries with a share of premium-focused customers (e.g. the UK, DE, CH)
> Declining consumer expertise and time limitations drive turnkey solutions, esp. in the UK and Scandinavia
Turnkey solutions
> Turnkey solutions offer very high commercial security since the responsibility is borne by the supplier only
Information > Transparency allows customers to gather preliminary information, make first decisions and compare
transparency available options (i.e. house types/variants and manufacturers)
Product portfolio > Typical portfolios cover all types of houses in many variants, therefore portfolio depth is rarely a differentiator
depth > Customers may choose external design offerings if they strive for more personalized solutions
Construction/lead > Prefabrication reduces construction time, which is esp. valued by Polish customers – However, this factor is
time of diminishing importance due to long backlogs resulting in lead times similar to those of regular solid houses
Energy efficiency > High energy efficiency is standard in the industry and individual manufacturers appear to differ moderately –
Initial high investment cost frequently outweighs continuous cost considerations
High Low
Source: Press research, Online communities, Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 39
Prefabricated housing manufacturers show vast differences in
product price segment and level of finishing type
Positioning of selected manufacturers in the DACH region Indicative
Price segment1) > The analyzed prefabricated

housing manufacturers differ
Pre- with regard to their market
mium focus
3) – The majority of
manufacturers mainly
focus on the floor-covering
market segment –
However, selected
suppliers specialize in
shell-finished or turnkey
house offerings
– Prices are estimated to
differ significantly between
premium- and economy-
focused manufacturers
> There are dominant brands in
the economy and premium
segments, DFH (esp.
Eco- Massahaus) and Schworer,
nomy respectively – In the mid-
price segment, fast growing
Shell- Turn- Danwood is considered to
finished Level of finishing type2) key have become a market leader
Last available revenues (indicative)
in 2017
1) Estimated average price of prefabricated houses delivered based on market interviews and desk research; 2) Key business focus based on market interviews and desk research;
3) Estimated revenues as no financial information publically available
Source: Orbis, Annual reports, Company websites, Trade press, Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 40
There are several manufacturers of prefabricated housing in the
DACH region – DFH is the largest manufacturer in DACH
Overview of selected manufacturers in the DACH region Non-exhaustive
Finishing type Geographical coverage

Revenue,
20161) Shell- Floor- Scandi-
Company Headquarters [EUR m] finished covering Turnkey DACH navia UK Poland Other Comments
Conglomerate of four
DFH Simmern 447 - - - () brands
Bien-
Zenker
Schlüchtern 144 - - - () Acquired by Equistone
in December 2017
Hanse Oberleichters-
Haus bach
116 - - from ADCURAM
Founded in 1960 with 2

WeberHaus Rheinau 240
- - production sites in DE
Best prefab supplier
FingerHaus Frankenberg 1582) - - - - award winner in 2017
Bielsk Acquired by Enterprise
Danwood
Podlaski
154 () - Investors in 2014
Haas Other markets include
Fertigbau
Falkenberg 1522)4) - - CZ, SK and IT3)
Schwörer- Part of family-owned
Haus
Hohenstein n/a Schwörer Group
Operates more than 60
ScanHaus Marlow 91
- - - - show houses
Georgens- Offering of plot and
Luxhaus
gmünd
722) - - - - financing concepts
1) Group figures; 2) 2015 figure; 3) Czech Republic, Slovakia and Italy Strong focus Focus No to limited focus Covered () Partially covered
4) Haas Baumanagement GmbH revenue (part of Haas Group)
Source: Orbis, Annual reports, Company websites, Trade press, Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 41
The majority of manufacturers have been able to gradually increase
their revenues between 2012 and 2016
Revenue development of selected manufacturers, 2012-2016 [EUR m] Non-exhaustive
CAGR
2012-2016
480
440 DFH 17.1%
400
360
320
280 Equistone 7.7%
assets3)
240 7.8%
WeberHaus
200
160
FingerHaus 4.0%1)
Danwood2) 21.1%
120
ScanHaus 8.0%
80
Luxhaus 3.4%1)
40
0
2012 2013 2014 2015 2016
1) CAGR 2012-2015; 2) Figures in PLN have been recalculated to EUR using the fixed exchange rate of 4.4 PLN/EUR;
3) Combined figures of Bien-Zenker and Hanse Haus (also for 2013 prior to the acquisition by ADCURAM) – Acquired by Equistone in 2017
Source: Company information, Dafne, Annual reports, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 42
The German market is largely fragmented with the top 5 suppliers
accounting for c.30% – Recent trend towards consolidation revealed
High-level overview of market volume shares in Germany, 2016 Indicative
Overview of recent M&A activity > Though the German

Top 5
suppliers (selection) market is more
DFH concentrated than other
12-13% 10-11% Danwood
Equistone1) European markets, the top
Equistone1) December 2017
5-6% Danwood 8-9% Equistone acquired Bien-Zenker and 5 suppliers only account
4-5% Schwörer- 6-7% ScanHaus Hanse Haus from ADCURAM for c.30% of the
3-4% Haus prefabricated housing
3-4% 4-5% SchwörerHaus July 2016
Weber- 2-3% WeberHaus Gampen Fertighaus acquired ELK market volume
Haus Fertighaus – Suppliers beyond the
July 2015 top 5 hold market
Private equity firm EQT acquired shares of less than 3%
HusCompagniet
June 2015
– Also, the turnkey sub-
Matthias Calice acquired Hanlo- segment reveals a
68-73% Other 65-70% Other Fertighaus similar high level of
November 2014 market concentration
ADCURAM acquired Hanse Haus > This market characteristic
November 2013 creates possibilities for
Enterprise Investors acquired Budimex M&A activity, which has
Danwood
intensified in recent years
September 2013
Prefabricated Turnkey ADCURAM Fertigbautechnik acquired
housing market prefabricated Bien-Zenker
housing market January 2013
DFH acquired Ein SteinHaus
1) Combined figures of Bien-Zenker and Hanse Haus
Source: Company information, Dafne, Annual reports, Interviews, Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 43
Market entry barriers are particularly based on technical capabilities,
sales network and brand/track record
Market entry barriers Indicative
Entry barrier Description Relevance

Technical > Suppliers of prefabricated houses have to cover a broad spectrum of capabilities, e.g. architecture and housing design
capabilities trends, construction and engineering (pre-production and on-site assembly), project planning and execution, in order to
match customers' high quality demand and price expectations (especially in Germany)
– Offering turnkey solutions requires additional building trades with specialized skill sets and certification, e.g. for heating,
electric installations, floor-covering, interior construction and sanitary
> Considering the dynamic construction market and the respective shortage of workers, new entries are likely to face
difficulties finding well-qualified staff at reasonable costs – Long-term employer branding, internal training and incentivization
appear to be key success factors
Sales > The establishment of a comprehensive and attractive online channel is required, providing detailed building specifications,
network/ pictures, videos, configuration tools and showcases
channel > In addition, the majority of customers demand a local sales agent supporting with the customization of the final product and
acting as a central contact person throughout the project – Setting up an exhaustive and skilled sales network is expensive
and time consuming due to strong market competition and lack of experienced sales agents
Brand > Due to high investment costs, customers typically demand a certain track record of successfully delivered housing projects in
and track their relevant region and a positive brand perception in the market (e.g. through former customers or discussion boards)
record > Suppliers new to the market have to first develop and demonstrate their quality and reliability, thereby continuously building
up a positive market perception/track record
Capital > Considerable investment costs in sales network (incl. housing exhibitions), certifications, as well as to a lesser extent
intensity production plant, require the build-up of sufficient sales volumes
High relevance Limited to no relevance
E. Roland Berger

We regularly extend our project experience with the publication of
relevant studies and research
Selected Roland Berger publications
Digitization in the construction Trend study on the construction
BIM (2017) materials industry (2016) market 2020 (2016)
Investment development in the transport Impact of the online market on the Construction materials and supply
industry in Germany (2013) domestic technology sector (2013) industries in Germany/Switzerland (2012)

Your contacts at Roland Berger
DR. KAI- Konrad Justus

STEFAN Gruda Jandt
SCHOBER
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Phone: +49 89 9230-8372 Phone: +48 601 364 303 Phone: +49 211 4389-2208
E-mail: kai-stefan.schober@rolandberger.com E-mail: konrad.gruda@org.rolandberger.com E-mail: justus.jandt@rolandberger.com
Piotr Malik Marco

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Project Manager Consultant
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E-mail: piotr.malik@org.rolandberger.com E-mail: marco.buehren@rolandberger.com
Appendix

Index of abbreviations
Overview
Abbreviation Meaning Abbreviation Meaning
add. Additional EUR Euro

admin. Administration GDP Gross Domestic Product
assoc. Associations h Hour
AT Austria i.e. Id est ('that is')
BIM Building Information Modeling incl. Including
bn Billion IT Italy
c. Circa k Thousand
CAGR Compound Annual Growth Rate m Million
CH Switzerland M&A Mergers and Acquisitions
CZ Czech Republic n/a Not applicable
DACH Germany, Austria and Switzerland p.a. Per annum
DE Germany PL Poland
DFH Deutsche Fertighaus Holding PLN Polish zloty
DK Denmark Prefab Prefabrication
e.g. Exempli gratia ('for example') SK Slovakia
EnEV Energieeinsparverordnung TEK Norwegian building regulations
(German Energy Saving Ordinance) UK United Kingdom
esp. Especially vs. Versus ('against')
EU European Union

Glossary
Overview
Expression Meaning
Prefabricated house Industrially prefabricated houses are manufactured offsite, transported to the construction site and only
assembled on-site
Finishing types
Shell-finished Shell-finished is a prefabricated housing finishing standard that typically includes the shell construction with
plaster and key exterior elements (e.g. windows, exterior doors, roofing and chimney)
Floor-covering As shell-finished and in addition: heating and electrical wiring
Turnkey As floor-covering and in addition: Key interior elements, including, among other things, floor coverings, wall
coverings, interior door panels and sanitary facilities
Material types
Solid house Solid houses are typically constructed on-site with traditional building technologies using different types of
materials (i.e. brick, concrete and wood)
Timber-frame house Timber-frame houses are typically constructed with structures/elements that are built with a wooden frame

Prefabricated volume and price development by focus region (1/2)
Prefabricated market volume development, '14-'22 [k units] Average prefabricated house

By finishing type By material type By price segment price develop., '14-'22 [EUR k]
14.3 14.7 14.3 14.7 14.3 14.7 288

United Kingdom
13.2 14.0 13.2 14.0 13.2 14.0 271 280

255 263
12.2 12.6 12.2 12.6 12.2 12.6 228 234 240 247
3.9 4.1
10.8 10.9 10.8 10.9 3.5 3.8 10.8 10.9
6.3 6.5 6.7
3.1 3.3
8.6 8.5 8.8 9.1 8.6 2.7 2.7 8.6 5.5 5.7 6.0
7.4 7.6 8.0 4.8 4.9
6.4 6.5 2.1
5.1 3.9
9.7 10.2 10.4 10.6
2.4 2.5 2.6 2.8 2.9 3.0 8.1 8.1 9.1 9.3 6.1 6.3 6.6 7.1 7.3 7.5
1.7 2.2 2.2 6.5 4.3 5.4 5.4
1.8 2.2 2.2 2.4 2.4 2.5 2.6 2.6 2.6 0.5 0.6 0.5 0.6 0.6 0.6 0.6 0.6 0.5
28.4 29.0 29.6 28.4 29.0 29.6 28.4 29.0 29.6 232 239
26.6 27.8 26.6 27.8 26.6 27.8 205 212 218 225
25.4 25.4 25.4
22.2 22.0
24.1
22.2 22.0
24.1
22.2 22.0
24.1
3.9 4.4
4.8 5.2 5.5 186 192 199
10.7 11.0 11.3 11.6 3.3 3.5
9.0 9.6 10.1 2.8 2.9
Germany
8.1 8.1
24.3 24.8 25.4
21.6 22.6 23.7 11.6 11.7 13.0 13.8
14.5 15.3 15.8 16.2 16.7
18.9 18.7 20.5
10.6 11.0 11.2 11.4 11.6
9.1 8.9 9.6 10.2
5.0 5.0 5.4 5.7 5.9 6.1 6.2 6.3 6.4 7.8 7.4 7.8 8.2 8.1 8.1 7.8 7.6 7.4
3.4 3.3 3.6 3.8 3.9 4.1 4.1 4.2 4.2
15.6 15.6 15.6 390

14.8 15.2 14.8 15.2 14.8 15.2 364 377
13.2 13.9 14.2 13.2 13.9 14.2 13.2 13.9 14.2 330 342 353
12.7 12.7 12.7 300 309 318
11.8 11.8 11.8
Scandinavia
10.8 10.8 10.8

9.0 9.3 9.6 8.4 8.6 8.8
7.7 7.9 8.4 8.6 7.2 7.6 8.0 8.1
6.4 7.1 13.3 13.9 14.3 14.7 6.2 6.7
11.0 11.9 12.3 13.0
10.1
2.9 2.9 3.0 3.1 3.2 5.2 5.4 5.6 5.8
2.1 2.3 2.4 2.7 3.8 4.2 4.6 4.8 5.0
2.2 2.4 2.6 2.6 2.6 2.7 2.8 2.8 2.9 0.7 0.8 0.8 0.9 0.9 0.9 0.9 0.9 0.9 0.7 0.8 0.9 0.9 0.9 0.9 1.0 1.0 1.0
’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22
Turnkey Shell-finishedTimber-frame Other EUR >250k EUR <150k
Floor-covering EUR 150-250k
Prefabricated volume and price development by focus region (2/2)
Prefabricated market volume development, '14-'22 [k units] Average prefabricated house

By finishing type By material type By price segment price develop., '14-'22 [EUR k]
6.5 6.5 6.5 179 183 188
6.2 6.2 6.3 6.4 6.2 6.2 6.3 6.4 6.2 6.2 6.3 6.4
5.7 5.8 5.8 6.0 5.7 5.8 5.8 6.0 5.7 5.8 5.8 6.0 0.6 0.7 0.7 157 161 166 170 174
0.6 0.6 152
1.9 1.9 1.9 2.0 2.0 0.6 0.6 0.6 0.6
1.7 1.7 1.7 1.8
3.5
4.4 4.4 4.5 4.7 4.8 4.9 4.9
5.1 5.2 2.9 3.0 3.0 3.1 3.2 3.3 3.3 3.4
2.6
Austria
2.3 2.3 2.3 2.4 2.5 2.5 2.5 2.6
1.7 1.7 1.7 1.8 1.8 1.8 1.8 1.9 1.9 2.2 2.2 2.2 2.3 2.3 2.3 2.3 2.3 2.3
1.3 1.3 1.3 1.4 1.4 1.3 1.3 1.3 1.3
1.5 1.5 1.4 1.4 1.5 1.5 1.4 1.4 1.5 1.5 1.4 388 396 404
1.4 1.4 1.3 1.4 1.4 1.4 1.4 1.3 1.4 1.4 1.4 1.4 1.4 1.3 1.4 1.4
345 357 364 372 380
333
Switzerland
0.9 0.9 0.9 0.9 0.9

0.9 0.9 0.9 0.9 1.1 1.1 1.1 1.1 1.0 1.2 1.2 1.1 1.1 1.1
1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4

0.4 0.4 0.4 0.4 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3 0.3
0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1
2.1 2.2 2.1 2.2 2.1 2.2 91 95 100

1.9 2.0 1.9 2.0 1.9 2.0 0.1 0.1 83 87
1.8 0.4 0.5 1.8 1.8 0.1 74 76 79
1.6 0.4 0.4 1.6 1.6 0.1 0.1 71
1.4 1.4 0.4 1.4 1.4 1.4 1.4 0.1
1.3 0.3 1.3 1.3
0.7 0.7 1.7 1.8 0.1
0.3 0.3 0.3
0.5 0.6 0.6 1.5 1.6 0.1 0.1
Poland
0.5 1.4 2.0

0.4 0.4 0.4 1.3 1.8 1.9 1.9
1.0 1.1 1.2 1.3 1.5 1.6
1.2 1.3
0.9 1.0 1.0 1.1
0.7 0.7 0.7 0.8 0.9
0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.4
’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22 ’14 ’15 ’16 ’17 ’18 ’19 ’20 ’21 ’22
Turnkey Shell-finished Timber-frame Other EUR >250k EUR <150k
Floor-covering EUR 150-250k
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 the event that the actual future developments differ from the statements
and projections in this study. Even if changes and events occurring after the publication of this study do 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.

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Prefabricated

Munich, January 2018

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 2

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 3

B. Market trends and drivers 10

C. Market size and development 21

D. Selected customer and manufacturer aspects 36

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 4

20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 5

1+2 family housing

Geography Construction Finishing Material Price

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 6

Residential housing type Construction technology

Completed 1+2 family Solid

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 7

The prefabricated housing segment seems to be particularly well

20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 10

move-in date – Prefab constructions usually outperform solid ones

H One-stop shop solution

Interest rates are currently at a historically low level and expected to

Overall, the focus countries are forecast to show minor population

Energy efficiency regulations available in all focus regions are likely to

Market feedback revealed planning security and comfort level to be

Positive influence Negative influence

Prefabricated housing significantly reduces the construction time,

Prefabricated – Overall time: 3-4 months (accumulated time)

Solid on-site – Overall time: 6-8 months (accumulated time)

Market feedback on prefabricated houses suggests increasing

Positive influence Negative influence

The prefabricated turnkey one-stop shop approach offers

Due to the strong economic development, average wages are

20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 21

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 22

2014 2015 2016 2017 2018 2019 2020 2021 2022

2014 2015 2016 2017 2018 2019 2020 2021 2022

2014 2015 2016 2017 2018 2019 2020 2021 2022

2014 2015 2016 2017 2018 2019 2020 2021 2022

The prefabricated housing market in the UK is characterized by a

In Germany, prefabricated turnkey housing is expected to grow

The Polish market for prefabricated housing appears very price-

In Scandinavia, turnkey solutions and timber-frame constructions

The Austrian prefabricated housing market displays a good balance

In Switzerland, the prefabricated housing market is projected to

2014 2017 2022 2014 2017 2022 2014 2017 2022

20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 36

Route-to-market Manufacturers Manufacturers Manufacturers

End customer End customer End customer

The UK prefab housing market is currently dominated by developers

Self-build > The residential 1+2 family housing

> Also in the prefabricated housing sites

Developers/ > Self-builders tend to use timber-

Success factors Importance

Price segment1) > The analyzed prefabricated

Finishing type Geographical coverage

Founded in 1960 with 2

Overview of recent M&A activity > Though the German

Entry barrier Description Relevance

High relevance Limited to no relevance

20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 45

Source: Roland Berger 20180108_Roland Berger_Prefabricated housing market study_Draft version_vf.pptx 46

DR. KAI- Konrad Justus

Piotr Malik Marco

Project Manager Consultant

Phone: +48 698 189-802 Phone: +49 89 9230-8790