1. Invest in Israel
April 2013

2. Israel
Area: 21,000 sqkm
Population: ~ 8 million
GDP per capita 2012 (PPP adjusted): $32,200

3. Israel – Geography
• Similar size to Wales
• Main cities : Tel Aviv, Jerusalem, Haifa, Be’er Sheva

4. Strong Economic Performance

5. Israel - Main Economic Indicators
2007 2008 2009 2010 2011 2012
GDP Real Growth Rate 5.5% 4.0% 0.8% 4.8% 4.6% 3.2%
GDP per Capita Growth Rate
3.5% 2.1% -0.9% 2.9% 2.7% 1.3%
(Current prices)
Unemployment Rate 7.3% 7.7% 9.5% 8.4% 7.1% 6.9%
Inflations Rate 0.5% 4.6% 3.3% 2.7% 3.5% 1.7%
Public Debt (% of DGP) 77.8% 77.1% 79.3% 76.3% 74.0% 74.0%*
(*) First three quarters at annual rate
• Mild response to the financial crisis and quick recovery afterwards
• Low inflation and unemployment rates
• Decreasing public debt relative to GDP
Source: Israel Ministry of Finance

6. GDP Growth Rate 2009-2012
20%
14.7%
15%
10.7%
10%
4.8%
5% 3.2% 2.7%
0.3%
0%
-0.5%
-1.5% -1.6%
-5%
-5.5%
-10%
Israel Australia Canada United Germany France Japan Euro Area United Italy
States Kingdom
The cumulative GDP growth rate, in real terms
Source: OECD

7. Investments’ Growth Rate 2009-2012
40%
31.4%
30%
18.7%
20%
10% 7.2%
0%
-2.0%
-10% -6.0% -6.2% -7.1% -7.7%
-11.2%
-20%
-18.5%
-30%
Israel Australia Canada Germany France OECD Japan United United Italy
Average States Kingdom
The cumulative fixed capital formation growth rate, in real terms
Source: OECD

8. Exports’ Growth Rate 2009-2012
10%
7.7%
8% 6.9%
6% 5.0%
4.3%
4% 3.5%
2.1%
2% 1.4%
0%
-2%
-2.5%
-4%
-4.1%
-6%
-5.9%
-8%
United Germany Israel Australia Euro Area United France Italy Canada Japan
States Kingdom
The cumulative export of goods & services growth rate, in real terms
Source: OECD

9. Changes in GDP to Debt Ratio 2009-2012
60%
50%
40%
30%
20%
10%
0%
-10%
United Japan United OECD France Germany Canada Australia Italy Israel
Kingdom States Average
Percentage points change in the debt to GDP ratio
Source: OECD

10. S&P Credit Rating (2009 – 2012)
Downgrading by one notch
Upgrading by one notch
Negative outlook
Source: Israeli Ministry of Finance
February 2013

11. The Unemployment Rate 2008 - 2012
12% 11.7%
11%
10.0% 10.1%
10% 9.5% 9.4%
9%
8.4%
8% 7.7% 7.5%
7.1% 6.9%
7%
6%
5%
4%
2008 2009 2010 2011 2012 2008 2009 2010 2011 2012
Israel Euro Area
Source: Eurostat, OECD, The Central Bureau of Statistics (Israel)

12. Innovation Ecosystem

13. Innovation Ranking
Source: Economist Intelligence Unit

14. Israel’s Competitive Edge – IMD World Report
Country Rank 1st 2nd 3rd 4th
Total Expenditure on R&D Israel Finland Sweden Japan
(% GDP)
Venture Capital U.S. Israel Hong Kong Taiwan
Scientific Research Israel Switzerland U.S. Germany
Entrepreneurship Israel Malaysia Colombia Taiwan
Flexibility and Adaptability Israel Hong Kong Australia Brazil
Information Technology Skills Israel Iceland Denmark Sweden
Source: IMD World Competitiveness Yearbook - 2011

15. Innovation in Cleantech
Source: Cleantech Group 100 Publication, Oct. 2012

16. Venture Capital Raised by Israeli High-Tech Companies
2.5
2.0
1.5
$ Billion
1.0
0.5
0.0
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Israeli VC Foreign VC
Source: IVC-ONLINE

17. Israeli High-Tech : Capital Received vs. Capital Raised
12
10.8
10
8
$ Billion
6
5.2
4.1
3.8
4
3
2.5 2.6
2.2 2.3
2.1 2.1
2 1.6 1.8
1.5
1.3 1.3
1.0 1.1 1.0 1.1
0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Capital Received (M&A and IPOs) Capital Raised
Source: IVC-ONLINE

18. Multinationals Activity in Israel - Highlights
First R&D facility outside the U.S.
R&D Centres is one of its 3 Strategic Centres
Operated for 62 years and now has 9 R&D facilities
Acquired companies for more than $1 billion
Recently opened 2 R&D centres
7,000 employees in R&D and manufacturing facilities
10 companies acquired in the past 12 years

19. Multinationals R&D Centres in Israel
Haifa Region Northern Region
Jerusalem Region
Tel Aviv Region
Southern Region

20. Government Support
Israel encourages foreign investment by offering a wide range of incentives
and benefits to investors.
• The Law for the Encouragement of Capital Investments
 Competitive grant programme
 Corporate Tax incentives
• Tax exemption for venture capital investment
• The Law for the Encouragement of Industrial R&D
• Promoting R&D Centres in the periphery
• Israel NewTech – Supporting Israel’s Cleantech Industry
• Special Programme - R&D centres for the financial sector

21. Success Stories

22. Iscar
“Iscar is an amazing company run by amazing people. I don't get
many opportunities to invest in companies like that."
Warren Buffet, CEO of Berkshire Hathaway
• ISCAR has catapulted from a small niche supplier to one of the world's leading
manufacturers of metalworking tools.
• In 2006, Berkshire Hathaway acquired 80% of Iscar for $4 billion, in it's first
investment outside of the U.S.
• In 2008, Warren Buffett called the acquisition of Iscar a "dream deal" that
surpassed all his expectations.
• In 2011, Iscar enjoyed a 41% increase in sales from the previous year.

23. Teva
The largest generic pharmaceutical manufacturer in the world
• Revenues increased from $30 million in 1976 to $20 billion in 2012 –
a 20% annual growth rate.
• Developed Copaxone, the leading drug for treating multiple sclerosis, which
generates annual revenues of $4 billion.
• Employs 46,000 people worldwide and supplies one of every six prescriptions
issued in the US.
• Headquarters in Israel.
• Market cap: $35 billion.

24. Netafim
Introduced a new concept of low-volume irrigation by launching the
drip irrigation revolution
• World leader in smart irrigation solutions (30% of the market)
• Inventor of the “Drip irrigation”, which enabled efficient irrigation with small
amounts of water.
• Transformed the manner in which farmers deliver water to crops.
• Has delivered strong double digit revenue growth for the past 10 years.
• Permira acquired control for a value of $870 million (2011).

25. M-Systems
Invented the USB flash drive
• 1989 – Founded.
• 1995 – Selling the DiskOnChip, the first flash drive.
• 1999 – Selling the DiskOnKey, the first USB flash drive.
• Also created the patented TrueFFS which presented the flash memory as a disk
drive to the computer.
• 2006 - Sold to SanDisk for $1.55 billion.

26. Given Imaging
Pioneered the capsule endoscopy technology
• Only three years after its founding, in 2001, Given Imaging made worldwide headlines
when it introduced the revolutionary FDA approved PillCam capsule endoscopy.
• The PillCam, is the first ingestible non-invasive disposable camera the size of a
capsule that diagnosis gastrointestinal track diseases.
• In the same year (2001) was listed on NASDAQ.
• Received the Wall Street Journal Technology Innovation Award (2004).
• Selected as World Economic Forum Technology Pioneer (2007).

27. Check Point
Global leader in securing the Internet
• Initial funding - $400K (1993).
• Pioneered the I.T. security industry with FireWall-1 and its patented Stateful
Inspection technology, which is still the foundation for most network security.
• All Fortune 100 companies use Check Point security solutions.
• Net income 2012: $620 million.
• Market cap - $11 billion.

28. More Success Stories
2nd largest company in the world in the field of geothermal energy
A revolutionary instant messaging application acquired by AOL
Manufacturer of plastic consumer products ($1 billion annual sales)
Best Overall Mobile App - Mobile World Congress 2013
Invented and patented the first Voice over IP
World leader in off-patent crop protection, acquired by ChemChina

29. Hi-Tech Companies acquired in 2011-2012 (Partial List)
Acquirer Amount ($) Israeli Company
100M Face.com – Facial recognition technology
70M Snaptu – Free mobile application platfor
300M Telmap – Navigation and location based services
100M Videosurf – Video search engine
200M Broadlight – Fabless semiconductor company
475M Intucell – Self-optimizing network software
300M Anobit – Flash memory controllers

30. Transactions of Global PE Funds in Israel
Company
Fund Year Acquired Company
Value ($)
2005 Bezeq (telecom provider) 923 million (*)
2008 Tnuva (dairy products manufacturer) 1.025 billion
2008 25% of Strauss Coffee 1 billion
2011 Netafim (smart irrigation solutions) 870 million
2012 Paradigm (oil exploration software) 1 billion
(*) In 2010, Bezeq was sold for $1.75 billion.