1. D E B EERS A DIAMOND IS FOREVER Robert Ewers Brian Moore James Keston Anna Sapozhnikova

2. D E B EERS A DIAMOND IS FOREVER A GENDA  Industry Overview  De Beer’s Cartel  Responses to Changing Market  A Diamond Is Forever  Q&A

3. D E B EERS A DIAMOND IS FOREVER Cutting & Polishing Retailers Uncut Diamonds $5 - $8 Billion $55 - $58 Billion D IAMOND V ALUE C HAIN

4. D E B EERS A DIAMOND IS FOREVER D E B EERS H ISTORICALLY: T HE S UCCESSFUL C ARTEL  Controlled Market Supply –90% of global diamond production –Cooperative agreements –Highest prices to producers –Lowest-cost mines owned by De Beers  Influenced Demand –$170 million advertising budget –Bundling and “Box” sales  Earned Outsized Profits

5. D E B EERS A DIAMOND IS FOREVER D E B EER’S T ODAY: C HALLENGES A ND R ESPONSE  Two Significant Challenges – New mines constructed in 80’s and 90’s –“ War Diamonds ”  De Beer’s Response – Forward Integration – Joint Ventures (LVMH) – Strategy of differentiation  Result: Dissolution of Cartel

6. D E B EERS A DIAMOND IS FOREVER B UYERS O UTLOOK  Sentimental Value  Is “Forever" Worth That Much?  Happy Consumer Times

7. D E B EERS Q&A Robert Ewers Brian Moore James Keston Anna Sapozhnikova