Competitive Strategies for Swiss Industries

1. Competitive strategies for Swiss industriesPhilip Mosimann, CEO

2. Contents • Brief portrait of Bucher Industries • Pre-conditions in Switzerland • Examples of competitive strategies • Some personal considerations • Discussion

3. Our businesses – since 1807 Agricultural implements World’s leading manufacturer of specialised agricultural machinery for tillage, seeding, fertilisation, spraying, landscape maintenance, hay and forage harvesting, livestock bedding and feeding. Sales CHF 1000 m Employees 4 500 Municipal vehicles European and Australian market leader in municipal vehicles, offering a whole range of compact and truck mounted sweepers, winter maintenance equipment and refuse collection vehicles. Sales CHF 400 mEmployees 1 500 Hydraulic systems International leader in the design and manu-facture of custom mobile and industrial hydraulic system solutions, offering an array of products encompassing pumps, motors, valves, power units, elevator drives and control systems. Sales CHF 400 mEmployees 1 700 Glass container machinery World market leader in glass container manu-facturing and inspection machinery, offering a portfolio ranging from glass forming and inspection machinery to complete production lines and components for the glass container industry. Sales CHF 350 m Employees 2100 Small businesses Machinery and equip-ment for winemaking, systems and machinery for processing fruit juice, instant products and dewatering sewage sludge as well as the Swiss distributorship for tractors and agricultural machinery. Sales CHF 200 m Employees 600

4. Major manufacturing sites worldwide

5. Bucher group strategy (1) Principles • “Stakeholder approach” with long term, industrial view • Increase of enterprise value (RONOA>>WACC) • Businesses with worldwide technology and market leadership with #1 to #3 market positions • Profitable growth, where profit growth is prioritised • Focus on organic growth enhanced with specific targeted acquisitions strengthening existing businesses • Strong balance sheet with high liquid funds for independance from banks and stock exchange

6. Bucher group strategy (2) Implementation of principles: • Do what we understand: machinery and vehicles • Do what we can best: “Best owner” of our businesses • Do what we can handle: number of businesses 4 to 6 • Do what we can finance: Cash-flow and growth • Do what creates value: Innovation and profitable growth Consequences in group management • Lean and decentralised management structure • Lived entrepreneurial attitude with common methodologies • Balance of trust and reasonable controls

7. Pre-conditions in Switzerland • Generell environment • Excellent infrastructure for business, living, and leisure • High security level politically, socially, financially • Internationally open society, entrepreneurial freedom, competitive tax systems both in business as well as in private • High cost country with strong currency • Education and innovation • Universities, technical high schools, dual education system • Established knowledge transfer fro universities to businesses • Swiss businesses • No or very small home market • Quality, reliability, innovation, automisation, work ethics • World champion in exports per capita

8. FOREX issues – a new phenomena? USD / CHF

9. Euro – Problems with previous currencies and related governmental behavior? EUR / CHF

10. Competitive strategiesTopics on any board agenda • Access to main markets which are outside Switzerland • Manufacturing at one place, export worldwide • Split of value & supply chain: why, how? • Protectionism today and tomorrow • Which technologies for which markets • What can we do better here than elsewhere? Why, how? • What exactly means “better” – customers decide! • For which technologies, products, applications is “Swiss made” the best solution? For which ones not?

11. Internal & external growth Investments: 70% internally, 30% externally Net sales CHF million

12. Acceleration of structural change CHF million 2008: Net sales CHF 2.8 bn 8‘400 employees 2004/06: Divestment Laeis Division 1998: Acquisition Emhart Glass 1996: Creation of divisions 1986: Public offering Net sales CHF 0.4 bn 2‘730 employees 12 Acquisitions Focus Europe, first transaction in Asia 1 Divestment 5 Acquisitions USA, CN, Europe1 factory closed 1 Divestment 23 Acquisitions EU, USA, India, Brasil 6 factory closed 8 Divestments 3 Acquisitions in DT and FR

13. Global Footprint (1) 1807 - 1990: Focus Europe (CH, FR, GE)

14. Global Footprint (2) 2012: 36 production sites worldwide

15. Acquisition… 2002 Knight Manufacturing, Brodhead, USA

16. …integration and internal growth Agricultural machinery, Brodhead today • USD 30 million invested in buildings since 2003 • Total campus: 13 ha + 32 ha testing area 2006 2008 2004 2011 2008 • Number of employees doubled in the last 6 years

17. Production and R & D Glass container industry 2007 R&D Center Windsor (USA) 2008 Johor Bahru (Malaysia) 2011 Majority interest in Sanjin (China)

18. Swiss success story (1) Hydraulic systems, Frutigen 2000 1974 – 1993 Bei der Übernahme 1997 Heute

19. Swiss success story (2)Hydraulic systems, Neuheim • Bilder folgen

20. Swiss success story (3)Municipal vehicles, Ventspils, Latvia

21. Swiss factory (1) High automisation

22. Swiss factory (2) Automated manufacturing

23. Swiss factory (3) Rationalised assembly & testing

24. Swiss owned & run factory (4) Manufacturing and assembly WTO 27 March 2012

25. Investments since 2002

26. Personal considerationsCometitiveness in Switzerland • Expand excellent pre-conditions in Switzerland • Intensify co-operation with universities • Innovation and R&D: Continuity as success factor • Make structural changes fast; position company in major markets • Adapt supplier base to major markets • Permanent modernisation and automisation of factories • Create culture of continued improvement „Kaizen“ • Secure strong balance sheet and financing in good times • Understand FOREX hedging as buying of time • Build dedicated, competent and creative work force

27. Thank you for your kind attention