Facts, scenarios, and actions for leaders

Value protection andacceleration roadmap to
win in the new reality
16 June 2020

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

COVID-19 BCG Perspectives Series

COVID-19

BCG Perspectives

COVID-19 is a global
societal crisis

Leaders need to drive an integrated
response to navigate the crisis

We at BCG believe that the COVID-19 outbreak isfirst and foremost a societal crisis, threatening
lives and the wellbeing of our global community.
Society now, more than ever, needs to collaborate
to protect people's lives and health, manage midterm implications, and search for lasting solutions.

It is the duty of health, political, societal, and businessleaders to navigate through this crisis. A complex
interplay of epidemic progression, medical response,
government action, sector impact, and company
action is playing out. This document intends to help
leaders find answers and shape opinions to navigate
the crisis in their own environments. It encourages
thinking across the multiple time horizons over which
we see the crisis manifesting itself.

Source: BCG

1

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Objectives of this document

COVID-19 will be a journey with three distinct phases, requiring
an integrated perspective
Fight

FutureTypically the initial phase after a pandemic
outbreak–goal is to urgently limit numberof new cases, especially critical care

Finding paths to collectively fight the virus,
restart the economy, and support society inbalancing lives and livelihood

Disease controlled through vaccine/cure/herd immunity, and treatment withinsustainable medical capacities possible

Social distancing (lockdown) and partial businessclosures lead to economic recession with large
employment impact

Increasing economic activity with recovering
GDP, some business reopenings, and social
distancing on a sustainable level

Reactivated economy with strong businessrebound and job growth, social restrictions
limited or completely suspended

1. Disease progression, health care system capacity, and response
2. Government policies and economic stimulus
3. Economic scenarios
4. Business engagement and response
5. Public engagement and response

All of the above five factors result in specific economic and social outcomes in each phase
Source: BCG

2

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

FlattenAs we navigate the 'Fight' phase, Leadership Teams should develop a winning value protection and acceleration roadmap with integrated
business, financial, and investor strategies that strengthen the share price, and drive strong and sustainable Total Shareholder Return (TSR)• Equity markets have been highly volatile through the crisis and a wide variation in TSR1 performance is visible across and within sectors• In this uncertain environment, investors are giving leadership teams flexibility and expect companies to 'use the crisis' to build long-term advantage• It is more important than ever to build a value protection and acceleration roadmap to become both 'a great company' and 'a great stock'• To do this right, leadership teams will need to focus intensely on six imperatives: 'de-average' shareholder value, understand your investor, challenge
your plan, sharpen capital allocation, explore bold portfolio moves, and create an ownership culture• Driving shareholder value requires addressing the needs of all key stakeholders: customers, employees, suppliers, communities, and shareholders
Across countries, efforts to flatten the curve continue; severe global economic downturn expected for 2020
• Globally, 3.6 million patients have recovered from COVID-19; growth rate of daily new cases at ~1%2
• Increase in daily new cases is propelled by South America, Asia, and Africa, while Europe and North America continue to improve• Vaccine and therapeutics development continues to move at unprecedented pace; nine vaccine candidates currently in phases I, II, and III• Recent economic forecasts point toward severe downturn in 2020; rebound of global GDP is not expected before 2021
• Despite rebound in the recent past, no sector at pre-crisis TSR1 levels

We believe during
this crisis leadersneed to think along
two dimensions:

Taking an integrated perspective on
health/medical progression,
governmental responses, societal
reactions, and economic implications
to understand business/sector impacts

1. Total Shareholder Return; 2. Daily new case growth rate is calculated based on 7 day rolling average
Source: BCG

Thinking multitimescale in a FlattenFight-Future logic

3

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Executive Summary | COVID-19 BCG Perspectives

Shareholder value 'call to action'
Building a value protection and acceleration roadmap

Updated analyses and impact
Epidemic progression and virus monitoring
Economic and business impact

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Guide for leaders

COVID-19 Impact dashboard
As of 12 June 2020

Economic Impact

7.6M

3.6M

425K

GDP forecasts (%)# of cases# of recoveries# of fatalities

2020

Growth rate1 of daily
new cases# of days of casedoubling2

5 June12 JuneEurope

2.2%

0.9%

US

36

39

# of reported recoveries
as % of total cases

45%# of tests / case31819# of tests / million3

48K

54K

47%

0.7%
1.0%

China

8 10

1.8%

-6.1%

Japan

Banks8Stock market performance11
20 Marvs 21 Feb

-31%

-28%

-30%

-34%

-10%

12 Junevs 21 Feb

-9%

0%

-18%

-12%

-4%

DAX

CHN SSE

S&P500 NASDAQ FTSE100

Total Shareholder Returns (S&P1200)11

5.9%

First column: 21 Feb to 20 Mar; Second column: 21 Feb to 12 June

-3.2%

India

5.8%

Estimated employment impact
Total employment
Employees% of employees
2019 (M)
impacted10 (M)impacted

Americas

EuropeAsia

Pharma-19% -1%-20% -6%-22% 7%F&B12-26% -10%-24% -13%-12% -3%

Telecom-17% -8%-20% -18%-14% -10%

Software-30% -6%-32% -13%-28% -4%

US

159

44

28%

Retail

-42% -11%-36% -16%-24% 12%

UK

33

10

29%

Capital goods-38% -16%-35% -18%-29% -5%

Germany

45

12

26%

Auto

-47% -18%-45% -19%-32% -10%

55

France

28

13

48%

Real Estate-42% -26%-26% -26%-22% -10%

6-21

Italy

23

8

35%

Energy-56% -29%-45% -27%-41% -23%

Spain

20

4

22%

Banks

-41% -26%-44% -35%-26% -13%

VaccineTreatment

Trials in pre-clinicalstage and beyond4

160

128

Trials in Phase 1 andbeyond59Current est. timeline
for approval & scale-up

months6

9-33

World Bank (8 June)-10 -8 -6 -4 -2 0 2 4 6-9.1%
Baseline 1.0%9-6.1%

Business Impact

months7

1. Growth rate calculated basis rolling 7 day rolling average of new cases; 2. No. of doubling days based on 7 day average growth rate of total cases; 3. Median of values for top 15 countries by nominal GDP (except China); 4. Ongoing trials including pre-clinical, Phase 1 (first trial in humans), Phase 2, Phase 3, Phase 4 ; 5.
Ongoing trials including Phase 1 (first trial in humans), Phase 2, Phase 3, Phase 4; 6. 9 month development current "best case" for first supply (12 months since Apr 2020), then likely to require time for scale-up and continuing to prepare for populations; 7. Remdesivir is approved now, could be more widely available by
Jul-Sep 2020. For the next wave, estimated timeline is Oct '20 – April '22 (6-21 months). If first round of drugs being tested succeeds – then 6-9 months; if not – substantially longer; 8. For India, forecast is for financial year; for others, it is for calendar year; YoY forecasts; Range from forecasts (where available) of World Bank,International Monetary Fund, JP Morgan Chase; Goldman Sachs, Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; As of reports dated 12 April 2020 to 5 June 2020; 9. World Bank January 2020 forecast; 10. Available cumulative data as of 05 June 2020 from mid of March
2020; Includes increase in unemployment & employees covered by gov. wage support programs; US: unemployment insurance claims (data as of 11 June); UK (data as of March) and Italy (data as of April) active & inactive unemployment; Germany: short-time work requests, may not actually utilized (data as of May); France:(data as of June); Spain: (data as of May); figures are changing rapidly and often being reported with a lag from the current date; 11. Sectors are based on Global Industry Classification Standard (GICS) definitions; Performance is tracked for two periods, first from 21 February 2020 (before international acceleration ofoutbreak) to 20 March 2020 (trough of the market) and from 21 February 2020 through 12 June 2020; 12. Food & Beverage. Source: WHO, World Bank, JHU CSSE, Our World in Data, IMF, Bloomberg, BCG, Eurostat (Europe), Gov't Wage Support & Unemployment figures & comments: UK Govt 5/12 (UK), ISTAT 4/30 &FitchRatings 5/18 (Italy), U.S. Department of Labor 5/21 (US), Ministerio de Trabajo 6/2 (Spain), Ministere du Travail 6/5 (France), Arbeitsagentur 6/3 (Germany)5

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Epidemic Progression

Global equity markets have been highly volatile through the crisis
and in the resulting rebound from March lows
As of 12 June 2020

Inflection with virus's spread to Europe, US, beyond;and subsequent rebound of stock markets
21 FebCumulative
returns (%)

Faster rebound
Most stock markets have rebounded
rapidly within four months1
compared with 13+ months2 during
the Global Financial Crisis; NASDAQ
hit all-time high3 on 5 June

10%
5%
0%
-5%
-10%
-15%

Continued high volatility

-20%
-25%
-30%
-35%
1 Jan

1 Feb
S&P500

1 Mar
NASDAQ

1 Apr
DAX

FTSE

1 May

1 Jun

In spite of rapid rebound,volatility continues to be higher(25-414) compared with preCOVID levels (14-195)

China SSE

1. Starting 21st February 2020; 2. Time taken by S&P500 to come within +/-5% of price on 26/09/2008; 3. NASDAQ subsequently closed on all-time highs on 8 June 2020, 9 June 2020 and 10 June 2020; 4. 15-day VIX
range from 22 May 2020 to 12 June 2020; 5. 15-day VIX range from 30 Jan 2020 to 20 Feb 2020. Source: BCG

6

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Markets largely looked pastvirus’s spread in China

A wide range of TSR performance visible across and within sectors
As of 12 June 2020

Based on top S&P
Global 1200 companies

Total Shareholder Return (TSR) = Change in share price + dividend yield
Total Shareholder Return from 21 Feb 2020 to 12 June 2020 in % per sector1

20

0

-20

Healthier2 sectors
Top 10%Bottom 10%

Pressured2 sectors
MedianEnergyHospitality

Banks

Real Estate

Insurance

Durable Goods

Capital Goods

Auto

Utilities

Media

Financials

Transport

Prof. Services

Food & Beverage

Materials

Telecom

Retailing

Health Equipment

SoftwareFood/staples Retail

Tech Hardware

Household Products

Semiconductors

Pharma-40

Vulnerable2 sectors

Performance spread between bottom & top 10%

1. Sectors are based on Global Industry Classification Standard (GICS) definitions ; data as of 12 June 2020 2. Categories are defined based on comparison with S&P Global 1200 median YTD
TSR and median net debt/enterprise value (EV) based on latest balance sheet: healthy = TSR & debt/EV > median, pressured = TSR or debt/EV < median, vulnerable = TSR & debt/EV < median;
Source: S&P Capital IQ; BCG ValueScience® Center

7

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40

In this uncertain environment, investors want leadership teams to 'use the crisis'
to build sources of long-term advantage for their companies

91%

66%

51%

of investors believe it is importantfor companies to prioritizebuilding business capabilities
for advantage and growth, even at
the expense of EPS1of investors believe companies
should actively pursue
acquisitions2 and consider
divesting2 businesses tostrengthen the overall company

of investors believe it isimportant for companies tocontinue to fully pursue their
ESG3 agenda and priorities,
even at the expense of EPS1

What we have heard from investors:
I have written 2020 off. I wantcompanies to invest now tostrengthen advantage and build
platforms for growth

Don't waste the crisis. If you havethe liquidity, make bold
acquisitions. And exit businesses
that are not long-term winners

We remain heavily committed to
ESG3 with an emphasis on social
responsibility, especially in today's
environment

1. Earnings per share; 2. 68% of investors believe companies should actively pursue acquisitions; 64% believe they should consider divestitures; 3. Environmental, Social and Governance;
Note: All questions were posed with respect to financially healthy companies (i.e., companies with relatively strong & resilient free cash flow and strong balance sheets).
Source: BCG's COVID-19 Investor Pulse Check, June 7, 2020; n = 150; BCG COVID-19 investor interviews with select institutional investors (May-June 2020).

8

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As of 07 June 2020

It is more important than ever for leadership teams to build a value protection
and acceleration roadmap to become 'a great company' and 'a great stock'• Growth, margins,
portfolio, targets, risk

Investor
strategy

Strong andsustainable
TSR• Valuation
multiple• Messaging• Investor type

Great Company

Great Stock• Financially resilient• Stabilized shareprice during crisis• Competitively
advantaged• Growing profitably

Financialstrategy• Capital structure• Dividends/
buybacks

1. Return on invested capital; 2. Environmental, Social and GovernanceSource: BCG• Premium ROIC1• Committed to ESG2
• Employer of choice• Optimal valuation
multiple• Strong and sustainable
TSR in medium- tolong-term• Stable and loyal longterm investor base9

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Business strategy

1

2

3

'De-average' shareholder value

Understand your investor

Challenge your plan

How have and will my businesses
contribute to share price and TSR?

Have my investment thesis and'natural' investor type changed
due to the crisis?

Will my crisis-adjusted plan deliver on
my strategic and TSR ambitions?

What actions should we take tostrengthen the plan and increase
our confidence?

What moves will attract the rightinvestor type?

What are alternative strategic paths thatcan deliver stronger and moresustainable TSR, considering risks andtrade-offs?

4

5

6

Sharpen capital allocation

Explore bold portfolio moves

Create an ownership culture

How should we distort financial andhuman capital to deliver stronger TSR?

Are there acquisitions we should pursue
today to strengthen our business?

How should we embed TSI3 to ensure
long-term shareholder value creation?

What combination of organic (includingESG1), inorganic, and financial strategy2
levers can enhance shareholder value?

Are there businesses we should consider
divesting to strengthen the company?

How can we align target setting,planning and incentives to create anownership culture?

1. Environmental, Social and Governance; 2. E.g. Dividends & buybacks; 3. Total societal impact
Source: BCG

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Key value protection and acceleration questions on the minds of business leadersToday's
share price$ / share'De-average'
shareholder valueMarkets

Understand what is
driving your valuationand how yourbusinesses contributeto share price and TSR

Divisions

Historical 3-year
value creation$ / share
TSR (%)

Planned 3-year
value creation$ / share
TSR (%)

Region 1

34.2

9.9

11%

20.7

17%

Region 2

14.9

5.4

13%

6.1

12%

Region 3…
Division A

8.1
…
24.2

(0.1)
…
7.0

(0%)
…
17%

9.6
…
15.3

30%
…
18%

Division B

17.6

3.8

11%

2.4

4%

Division C
…

14.2
…
81

(1.6)
…
19

(5%)
…
9%

8.5
…
59

17%
…
20%

Overall

Drives greater value than expected

Drives less value than expected

Understand how your different businesses can drive shareholder value
Challenge line ofbusiness plans where
historical and planned
TSR are significantly
different

Ensure plans are
grounded in reality andadjust accordingly

Determine portfolio
roles (e.g., growthengine, growth funder,
harvest, exit,
turnaround)

Allocate financial
and human
resources to each lineof business based on
its portfolio role11

Source: BCG

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1

Example: Global luxury player used portfolio 'x-ray' to gain deep understanding ofshareholder value across markets and divisions

Understandyour investor
Engage with yourinvestors tounderstand their
sentiment and how
your 'natural' investor
type has evolved

Original investor type

Optimal new target type

Investors' criteria“Deep Value” investors“Quality / Alpha Value” investors

Revenue growth
expectations

0% - GDP level growth

3-5% organic + some tuck-in M&A

Time horizon

In & out with P/E2

5+ years

Expected P/E multiple

Relatively weak P/E, typically <15x14x–18x

Target payout / yield

5-8% FCF3 yield paid out
as dividends or buybacks

3–5% dominated by dividends

Actively engage with your investors, now more than ever
Treat yourinvestors like yourcustomers(segment, market)

Determine your'natural' investor
type and whether
you are currentlyaligned with it

Shape your businessstrategy to meet thisinvestor type's growth,margin, and ROIC3
expectations

1. Global Financial Crisis 2008-09; 2. Price to earnings multiple; 3. Free cash flow
Source: BCG

Adjust yourfinancial policies
to enhance appeal
to this investor

Communicate
a compellinginvestment
thesis androadmap12

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

2

Example: B2B technology services company used investor segmentation to develop TSR
strategy roadmap during GFC1 and migrate to a more attractive investor type

3&4

Example: U.S. services company used TSR lens to assess alternative strategic paths andoptimize capital allocation
Alternative strategic paths
Initialmanagement plan

Pressure-test share priceand TSR potential of yourcrisis-adjusted plan andevaluate alternative
strategic paths

Estimated
3-yr TSR (%)

Ensure your uses ofcapital enable you toemerge stronger from thecrisisMajortransformativeacquisition

10.4

Organic growth +cost reduction +tuck-in M&A
13.9

Organic growth +cost reduction +financial strategy
15.6

7.4

Indexed share price

100

89

108

114

TSR sustainability

MediumLow

High

Low-medium

Risk

Moderate

Very highModerate-high

Low-moderate

Use shareholder value lens to chart optimal corporate strategy path
Align as aleadership team on
your strategic and
TSR ambitions

Determine share priceand TSR potential of yourplan and pressure-testunderlying assumptions

Develop financial depictionof alternative strategic
paths and evaluate TSR
characteristics

Choose optimal
strategic path andallocate capital
accordingly

13
Source: BCG

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Challenge yourplan & sharpen
capital allocation

Explore bold
portfolio moves

Weak-economy
deals
106.4

Cumulative relative
TSR index
100

Consider gamechanging acquisitions
and divestitures given
dynamic market
conditions andcompetitive landscape

106.1

100.4
100.2

T-3

+9.6

T+3

Strongeconomy deals

99.4
Year 1

96.5
Year 2

Be prepared to pursue portfolio reshaping moves in today's environment
Evaluate portfolio forpotential divestitureopportunities

Scan market forpotential targets or
consolidators

Evaluate optimal
deal structures

Prepare the Board for action inadvance if an attractive deal
unexpectedly comes available

Note: Strong-economy (weak-economy) years are those in which the respective global real GDP growth rate is in the top (bottom) third of all growth rates in theobservation period. Total of 9,987 M&A transactions with a public buyer comprises pending, partly completed, completed, unconditional and withdrawn majority
deals announced between 1980 and 2018 with a deal value greater than $250 million. Share price three days before the announcement date (T-3) equals 100. Shareperformance from T-3 to three days after the announcement (T+3) equals the announcement effect.; Source: Revinitiv, Datastream, BCG

14

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5

Weak-economy deals (if reflected in lower company valuations) outperform
strong-economy deals by an average of ~10 TSR points

Embrace shareholder value
philosophy and metrics

Create anownership culture
Align planning, KPIs, andincentives with delivering
sustained TSR and TSI1
success and winning in
the new reality

Use TSR and TSI1
in strategic planning
to measure & track
shareholder value
creation

Strategic &TSR ambition

Compensate forshareholder value
creation

Adopt a strong shareholder value mindset and discipline
Put TSR front andcenter, use TSR for
high-stakes decisions,and embed TSI as a
TSR accelerant

1. Total societal impact
Source: BCG

Train seniorleaders on
shareholder value
principles and how
to lead like owners

Cascadecapabilities
through theorganization

Set targets, pressuretest plans andinitiatives, allocate
resources, and track
performance

Incorporate TSR and
TSI into reporting;align & communicate
incentives; reward
TSR and TSI
performance
15

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6

Driving shareholder
value requires
leadership teams toaddress the needs ofall key stakeholders—
now more than ever

Invest in your employees

Work fairly and ethically with your suppliers

Support the communities in which you work

Generate long-term value for your shareholders

Source: August 2019 Business Roundtable statement

16

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Deliver value to your customers

Shareholder value 'call to action'
Building a value protection and acceleration roadmap

Updated analyses and impact
Epidemic progression and virus monitoring
Economic and business impact

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Guide for leaders~3.6M reported recoveries so far;growth rate of daily new cases at ~1%1

EPIDEMIC PROGRESSION& VIRUS MONITORING

As of 12 June 2020

Russia29th May'20

UK
France Italy
China

12th June'20

Japan

India

101K

118K

(∆0.9%)(∆2.2%)

125K(∆0.9%)# of daily new cases (growth rate%)1
BrazilSouth
Africa37
8
days

Daily cases' growth (≥100 daily cases)1
Less than 100
daily cases1

185Countries with cases3

<-5%

7.6M

-5%-0%[∆1.8%]4

Confirmed cases globally

36
12
days

39
12
days

# of days of case doubling2 globally
0-5%

425k

>5%
2.5M

3.0M5

3.6M

(42%)

(45%)

(47%)

[∆1.1%]4

Fatalities globally

Total # of recoveries (as % of confirmed cases)

Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards and hence are imperfect measures
1. # of daily new cases calculated as 7-day rolling average; growth rate calculated basis 7-day average; 2. No. of doubling days calculated basis 7-day average growth rate of total cases; 3 Basis Johns Hopkins
CSSE; 4. Daily growth rate basis 7-day average; 5. Updated numbers for 5th June as reported in updated data by Johns Hopkins CSSE
Sources: Johns Hopkins CSSE; Our world in data; BCG

18

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Spain

USA

05th June'20

Daily new cases are increasing globally;
propelled by South America, Asia, and Africa

EPIDEMIC PROGRESSION& VIRUS MONITORING

As of 12 June 2020

Rates improving from top to bottom

FlattenFight... but countries in South America, Asia, and Africa
witness an increase in daily new cases

Daily growth rate of total cases (seven-day average)
6%
5%

Daily cases (seven-day rolling average)
140,000

Cases doubling:
14 days

Argentina

S Africa

120,000

Kenya

4%

Cases doubling: Nigeria
21 daysEgypt Chile

India
Mexico100,000
80,000Colombia

3%
Ghana

2%
Algeria

1%
0%
1,000

S Korea
Australia

South
America

BrazilAsia

60,000SwedenRussiaIranUS
CanadaGermany
UK
FranceAustria
Italy
China
Spain
Japan

North
America

40,000AfricaSingapore

10,000100,000

1,000,000

20,0000Europe

Apr

Mar

May

12 JuneNorth America

EuropeCumulative number of confirmed cases (log scale)South America

Asia1

Africa1. Includes Middle East & Oceania
Source: Johns Hopkins CSSE; Our World in data; BCG

North America

EuropeSouth America

Asia1

Africa19

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Several European and North American countries
continue to improve doubling rate…

EPIDEMIC PROGRESSION& VIRUS MONITORING

Epidemic progression snapshot
As of 12 June 2020

Data shown only for G20 countries with 100+ daily new cases

Growth of daily new cases1

Cumulative cases

Testing

Daily Cases/M

Total cases

RecoveryNew cases per
million population2

In thousands% of total cases

Test/ casecurrent value3
100

Argentina

8.5%

26

27

30%

8

KSA

8.4%

94

116

68%

9

3

35

36%

43

59

57%

Indonesia

6.1%

S Africa

4.1%

Mexico

2.2%

31

134

72%

India

2.2%

7

298

49%

Brazil

0.9%

126

803

54%

Turkey

0.4%

11

174

85%

USA

0.0%

65

2,023

27%

Russia

-0.2%

60

502

53%

Italy

-1.0%

5

236

73%

France

-1.1%

7

156

38%

4

186

92%

Germany

-2.2%

UK4

-3.5%

21

291

Canada

-4.4%

14

98

2 weeks ago
20
30

\

\

9

\

18
3

\

\

18
2

\

\

14

\

11

\

28

\

19

\

\

9
\

\

59%

\

25

13
\

21

1. Growth rate calculated basis 7-day rolling average of new cases; 2. 7-day rolling average; represented scale rounds up daily case/m to next 10th place; 3. Test/case data is not updated daily for few countries,
data represented is within last 1 week; 4 UK recovery data not available; Source: Our World in Data, John Hopkins, Worldometers, BCG

20

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Daily cases

Vaccine fast movers | 9 vaccine candidates already into clinical trials

EPIDEMIC PROGRESSION& VIRUS MONITORING

1

Phase II/III

4

Phase I/II

Oxford Univ. & AstraZeneca

BioNTech & Pfizer

China National Biotec1

Phase III recruitment underway;
planned supply build-up of 400M+
doses by end of year (if approved)

Phase I/II started April 2020; data
exp. in July 2020; if approved,
distribution possible by Dec 2020

Phase II trial in June 2020;
expected completion of
final trials by Nov 2021

Novavax

SinovacPhase I/II started in May 2020;
data expected in July 2020 andfinal completion by Nov 2021

Phase II trial in June 2020;
expected completion by
Aug 2020

2

Phase II

CanSino Biologics
Phase II advancement sinceApr 2020; follow-up expectedby Oct 20202

Pre-clinical

160

Total

"By the beginning of 2021, we hopeto have a couple of hundred million
doses. I'm cautiously optimistic withthe multiple candidates we havewith different platforms."

Phase I

Moderna

Chinese AMS2

Inovio

FDA fast track designation in May
2020; Phase III on 30,000 patientsplanned in July 2020

Trial started in Mar 2020;
follow-up expected by Dec 2020and completion by Apr 2021

Phase I initial data expected
June 2020; Phase II/III trials
start July/August 2020

1. Listed as two candidates by WHO: Beijing institute of Biological Products / Sinopharm & Wuhan Institute of Biological
Products / Sinopharm; 2. Chinese Academy of Medical Sciences and Institute of Medical Biology. Source: WHO (June 9th),
Citeline Pharma Project (June 5th), Milken Institute (June 2nd), ClinicalTrials.gov (May 19th), Telegraph, Bloomberg, BCG

151

Update in last 2 weeks

Dr. Anthony Fauci, Member, White House
Coronavirus Task Force21

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

As of 12 June 2020

Economic forecasts point toward severe downturn in 2020;
rebound of global GDP not expected before 2021

ECONOMIC &BUSINESS IMPACT

As of 12 June 2020

GDP level forecast1

GDP growth forecast vs. baseline
2020

EOY 2021 vs. EOY 20192021

Forecast -6.1%

2%

4%

6%

8% 10%-10% -8% -6% -4% -2% 0%Baseline 1.8%

2%

4%

6%

8% 10%

1.7% 4.0%

US

97-100%
Forecast range
-9.1%

1.0%

1.3%

4.5%

Europe96-99%
1.0%

5.9%

5.8% 6.9%

China

107-112%
-6.1%

0.7%

0.6% 2.5%

Japan

96-99%
-3.2%

5.8%

3.1%

6.1%

India2101-108%
Forecast World Bank (Jun 2020)

Baseline World Bank (Jan 2020)

Forecast range Banks3 + IMF

Last week's forecast range (onlyshown if change is significant)Note: As of reports dated 31 March 2020 to 12 June 2020, YoY forecasts 1. Range calculated with 25th & 75th percentile values of forecast range 2. For India, forecast is for financial year; for other countries, theforecast is for calendar year; 3. Range from forecasts (where available) of World Bank, International Monetary Fund (April 2020), Goldman Sachs, JP Morgan Chase; Morgan Stanley; Bank of America; Fitch
Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; Source: Bloomberg; World Bank; IMF; BCG

22

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

-10% -8% -6% -4% -2% 0%

Despite rebound in the recent past, no sector at pre-crisis TSR levels

Based on top S&P
Global 1200 companies

As of 12 June 2020

Categories based on TSR & net debt/enterprise value2

Healthier sectors

Pressured sectors

Vulnerable sectors

PharmaSemiconductors
Household Products
Tech Hardware
Food/staples Retail
Software
Health Equipment
Retailing
Telecom
Materials
Food & BeverageProf. Services
Transport
Financials
Media
Utilities
Auto
Capital Goods
Durable Goods
Insurance
Real Estate
Banks
Hospitality
Energy

-20%
-30%
-16%
-26%
-10%
-30%
-31%
-40%
-17%
-32%
-23%
-30%
-34%
-35%
-36%
-30%
-41%
-35%
-39%
-39%
-39%
-39%
-44%
-52%

21 Feb 2020- 12 June 2020
-2%
-3%
-4%
-5%
-7%
-8%
-9%
-10%
-10%
-10%
-10%
-12%
-13%
-14%
-14%
-15%
-15%
-15%
-18%
-22%
-24%
-26%
-27%
-29%

Companies with probability of default >15%4
29 May 2020- 12 June 2020

21 Feb 2020
0%
0%
0%
0%
0%
9%
0%
0%
0%
4%
0%
0%
0%
0%
0%
0%
0%
2%
0%
0%
0%
0%
7%
0%

Note: Based on top S&P Global 1200 companies; Sectors are based on GICS definitions; 1. TSR performance on 12 June 2020 compared to 29 May 2020; 2. Net debt & enterprisevalue from latest available balance sheet; Categories defined based on comparison with S&P Global 1200 median: healthy = TSR & debt/EV > median, pressured = TSR or debt/EV< median, vulnerable = TSR & debt/EV < median; 3. Performance is tracked for two periods, first from 21 February 2020 (before international acceleration of outbreak) to 20 March
2020 (trough of the market) and from 21 February 2020 through 12 June 2020 based on median; 4. Implied by 5-year Credit Default Swap based on median Source: S&P Capital IQ;
BCG ValueScience® Center; BCG

12 June 2020

29 May 2020- 12 June 2020

11%
0%
0%
0%
0%
8%
0%
41%
8%
11%
0%
0%
36%
0%
8%
0%
29%
7%
0%
0%
17%
4%
36%
21%

Pos. trend >= 2%
No sig. change
Neg. trend >= 2%

23

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

TSR performance3
21 Feb 2020
- 20 Mar 2020

ECONOMIC &BUSINESS IMPACT

US investors' current perspectives on economic andstock market impact of COVID-19 crisis

ECONOMIC &BUSINESS IMPACT

As of 07 June 2020

US example: Investor Pulse Check on US economy and stock market

End of

Q4
2020

Only

18%

~3.9T

Investor's expected timeline
for the severe impact of crisis
to extend until

Investors anticipate a rapid
V-shaped recovery to the precrisis economic level andgrowth rate

Investors' expectation2 forthe amount of total fiscal
stimulus needed to support
the economy

1. Compared to 7 June 2020 prices; 2. Average expectations of investors;
Source: BCG's COVID-19 Investor Pulse Check, June 7, 2020; n = 150.

Impact on stock markets

52% | 25%

Investors that are bearish or neutral, respectively,
for the remainder of 202041% | 55%

Investors that are bullish for 2021 and 2022,
respectively

64% | 53%

Investors that are more bullish on the economy &the stock market, respectively vs. one month ago

S&P500
down by

16%1

Expected future low, tobe reached by Q3 2020

S&P500
up by

16%1

Expected future high, tobe reached by Q2 2023
(exp. annual TSR of 8%)24

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

Economic impact and recovery

European investors' current perspectives on European Growth Tech

ECONOMIC &BUSINESS IMPACT

As of 27 May 2020

Europe example: Investor Pulse Check for European 'Growth Tech' (large, tech-oriented startups)

invest less in 2020 than
66% willin record year 2019
…but very bullish on 2022

98%

expect to invest as much or
more in 2022 than in record
year 201955%

of investors attach greater
importance to time toprofitability

50%

of investors re-prioritize theimportance of management
team's quality…as significant uncertainty prevails
For

3/5

Growth Tech investors,
market uncertainty affects
investment behavior

Potential to outperform larger rivals; butdifferent recovery shapes across industries

V 61%

expect Software/services torebound quickly

U 100%

expect Travel to recover,but slowly
expect Digital Health toreturn to pre-COVID
trajectory1.2

or

85%
67%

or

expect EduTech to returnto pre-COVID trajectory1,3

1. Potential contingency: If structural barriers could be alleviated, accelerated growth could be sustained 2. 55% inverted V, 30% inverted U 3. 50% inverted V, 17% inverted U
Source: BCG Growth Tech Investor Pulse Check (n = 70), run in 28 April 2020 to 27 May 2020

25

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

87%

will delay deals originallyplanned for 2020

Growth Tech investors expect shift ininvestment criteria to resilience factors…

Growth Tech industries

U
V

Growth Tech investors are bearish on
2020…

Investment criteria

U
V

Investment volume

Investors want discretionary dollars focused on 'financial health' tosurvive the crisis; 'growth & competitive position' to win the new reality

ECONOMIC &BUSINESS IMPACT

As of 07 June 2020

US example: Priority areas, management should focus on their investments1(% of investors who listed the below areas as a top 3 priority)

Fight & Future

43%

Financial health

19%

Health and safety
Business continuity /flexibility /risk management

10%

44%

Growth & competitive position
Tech

22%

Efficiency

22%
20%

Portfolio reshaping

14%

Employees

12%

Return of cash to shareholders

10%

R&D / new product development

8%

ESG2
Transparency / communication

7%

Re-opening

6%

Notes: 1.Original question "For financially healthy companies (that you invest in or follow), what are the top 3 priority areas (please list in order of importance) that you would like to see management teams
focus their discretionary investment dollars on during the next 6-12 months?"; Raw responses to the survey were classified into categories. "Other" not included (n=1); 2. Environment Social Governance;
Source: BCG's COVID-19 Investor Pulse Check, June 7, 2020; n = 150 overall survey, n=138 for this optional question, though number of priority areas outlined by respondents slightly differed.

26

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

FlattenAdditional perspectives on COVID-19
Selected publications

Edition #9

Edition #8

Edition #7

Corporate financeCorporate financeCorporate financeFuture of Global Tradeand Supply Chains

Galvanizing nations forthe new reality

Sensing Consumer
Behavior & seizing
Demand Shifts

Managing Corporate
Venturing Through thePandemic

The COVID-19 Investor
Pulse Check Series

The COVID-19 CFO
Pulse Check

Edition #6

Edition #5

Edition #4

M&A and Divestitures

M&A and Divestitures

M&A and Divestitures

Restructuring Costs, andmanaging Cash andLiquidity

Revamping
Organizations for the
New Reality

Accelerating Digital &Technology
Transformation

The Asia-Pacific M&A
Report: Dealmaking in
Turbulent Times

Navigating Merger
Clearance During
the Crisis

COVID-19’s Impact on
Global M&A

Edition #3

Edition #2

Edition #1

Transformation

Banking

EnergyEmerging stronger fromthe Crisis

Preparing for the restart

Facts, scenarios, andactions for leaders

How CEOs Can Win theFight and Transform to
Win the Future

What’s Next for US
Banking Consolidation in
the Post-COVID-19 World?

How Uncertainty Is Hitting
M&A in Oil and Gas

Source: BCG

27

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 16 June 2020 Version 10.1.

COVID-19 BCG Perspectives

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