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Presentation for 10 ¨ E ¨ L ¨ B ¨ C Athens, Greece September 26-29, 2006

Presentation for 10 ¨ E ¨ L ¨ B ¨ C Athens, Greece September 26-29, 2006. Global Market for Industrial Lead Acid Batteries Current Status and Trends for the Future Hollingsworth & Vose Company Bob Cullen Vice President, Sales & Marketing. List of Participants - Major Manufacturers.

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Presentation for 10 ¨ E ¨ L ¨ B ¨ C Athens, Greece September 26-29, 2006

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  1. Presentation for10 ¨ E ¨ L ¨ B ¨ CAthens, GreeceSeptember 26-29, 2006 Global Market for Industrial Lead Acid Batteries Current Status and Trends for the Future Hollingsworth & Vose Company Bob Cullen Vice President, Sales & Marketing

  2. List of Participants - Major Manufacturers • Exide Technologies • GNB Industrial Power • Exide India • Panasonic (Worldwide) • Power Sonic Corporation • Power Battery Company, Inc. • C&D China • Yuasa/U.S., U.K., China, Taiwan • Amara Raja • Battery Council International • Crown Battery • C&D Technologies, Inc. • Douglas Battery Mfg. Company • East Penn Mfg. Co., Inc. • EnerSys, Inc. • CSB • Fiamm • B.B. Battery • Kung Long Battery • Leoch • Eurobat

  3. Special Thanks to Key Industry Contacts “Special thanks for their contribution” • Battery Manufacturers • Evan Wescoe - East Penn • Ray Kubis - EnerSys, Inc. • Mr. J.C. Lee - KLB • Keith Schmid- Exide • Steve Vechy - EnerSys, Inc. • Tom Lynn - C&D Technologies • Tom Minner- East Penn • Jerry Hoffman- NorthStar • Guy Clum - Power Sonic • Hal Hawk – Crown Battery Company • Alison Huang - CSB • Key Industry Contacts • Mark Wilson - Ericsson, Inc. • Larry Lang - Cisco • Karen Sansone - Nortel • Steve McCluer - American Power Conversion • Michael Keith - AT&T, Wireless • Alan Katz - MGE • Robert Parker - IBM/Internet • John Wirtz - Wirtz Manufacturing • Tucker Roe - Daramic, Inc. • Robert Wittemann- C&D

  4. Presentation Notes (Methodology & Conditions) • Market projection covers period of 2006-2010 • All figures reflect production within a given geographic area • U.S. dollars are used for consistency. Euro value of $1.20 was used to convert to $; 8. RMB = $. • Recent market price increases are not reflected . • Known export figures are identified. • Recent Chinese Government change in VAT refund policy not factored in.

  5. Overview of Global Industrial Market • 2000 market size - $3.79 billion • Overall market lost - $605 million in 2001 & 2002 • Stationary market decreased by almost 30% driven by Telecom/UPS implosion • Motive Power lost 7% due to a global recession • Market began recovery in 2003 - 5% • Strong Global Economies driving growth in 2004 & 2005.

  6. 37% 63% 2005 Global Industrial Battery Sales By Market Class ($ billions) $1.592Motive $2.712Stationary Total: $4.304 Billion

  7. Total Worldwide Industrial Battery Production 2004 vs. 2006 ($ billions)

  8. Worldwide Battery Production, 2005 ($ millions) $1,511 $1,306 $922 $199 $186 $180

  9. Growth for Motive Power and Stationary Batteries, 2004-2006 Stationary 53% Motive Power 47% $957 Million Total

  10. Motive Growth Rates by Region (%), 2006 - 2010

  11. Stationary Growth Rates by Region (%), 2006 - 2010

  12. 2004 Forecast $1.18 May 2005 2006 Forecast $1.28 May 2006 Euro vs. Dollar 1999 2000 2001 2002 2003 2004 2005 Source: Merrill Lynch Research

  13. 29% 71% 2005 China Industrial Battery Market- Exports Millions of $ $260Domestic $662Export Total: $ 922 million

  14. N. America Europe Japan China Taiwan Rest of Asia India Australia S. America Worldwide Motive Battery Production by Region, 2004 vs. 2006 2006 $1.74 billion 2004 $1.46 billion N. America N. America Europe Europe

  15. ROW India India Rest of Asia N. America N. America Taiwan China China Europe Europe Japan Worldwide Stationary Battery Production by Region, 2004 vs. 2006 2004 $2.35 billion 2006 $3.04 billion

  16. Comparison of Stationary to Motive Battery Production by Region, 2006 (%) 92% 54% 53% 46% 47% ($ millions) 88% 84% 8% 16% 12%

  17. Stationary vs. Motive Power, 2006 vs. 2010 ($ billions)

  18. Stationary and Motive Trends, 2001 - 2010 ($ millions)

  19. Global GDP’s

  20. GDP: % change 2001 vs. 2005 (est) 2001 2005 • United States 0.5 3.8 • Euro area 1.5 0.7 • Japan 0.4 2.7 • Emerging East Asia -0.4 6.3 • China 7.3 9.5 • Latin America 2.0 3.8 • Emerging Europe4.34.5 • World 2.7 4.6 Source: CIA Factbook; Various Economic Websites

  21. Industrial Truck $1,512 95% Mining Vehicles $26 1.2% Railroad/Locomotives $54 3.8% 2005 Worldwide Sales of Motive Power Batteries by Application ($ millions) Total: $1.592 Billion

  22. Global Motive Power Drivers • Forklift Trucks account for 95% of total • Very healthy worldwide economies reflect strong motive power production • Lead Price increases have driven some of this growth. • Europe – largest producer of motive power batteries – has higher percentage of electric vs. gas trucks than in N. America

  23. Global Stationary Power Market Segments 2003200420052006 • Telecommunications 41% 40% 41% 42% • UPS 36% 37% 36% 36% • Misc. Standby 4% 4% 4% 4% • Security 5% 4% 5% 4% • Control & Switchgear 6% 7% 7% 6% • Emergency Lighting 3% 4% 5% 4% • Electronics 2% 3% 3% 2% • Medical 1%2%2%2% • Total 100% 100% 100% 100%

  24. S. America Australia India Rest of Asia Taiwan N. America China Japan Europe Worldwide Production of >25 Ah Batteries by Region, 2006 $1.817 Billion

  25. Europe Australia India Japan N. America South America Rest of Asia Taiwan China Worldwide Production of <25 Ah Batteries by Region, 2006 $895 Million

  26. Stationary Battery Sales by Size by Region, 2006 ($ millions) $1,035 $769 $767 $220 $220 $68

  27. Telecommunications Market • Recovery from a steep decline began in 2003 • Consolidation is the trend in North America • Expanding beyond traditional markets in order to ward off new competitors. • Wireless continue spending to build out networks Stationary Power Trends

  28. Stationary Power Trends Has the Telecom Market returned? • 2003 recovery began - 5% • Long term outlook improves . • Teleco’s have more choices: Lithium, Fuel Cells & Chinese Battery Manufacturers. Yes, but... not to growth rates of 1999 or 2000

  29. Global Infrastructure Expenditures (in billions)

  30. Tech Spending Slips Worldwide Hardware Sales $771 $679 $655 $684 $720 $760 $805 Source: Gartner

  31. Telecom Market will be driven by • Wireless • Internet • Traditional Telecoms offering broadband and digital TV to stay competitive. Stationary Power Trends

  32. Stationary Power Trends Wireless Market •Killer Application? Data and Entertainment - Games • 50% of voice minutes worldwide - wireless • $1 trillion by 2005 & Growing 25% of Internet access will be via wireless.

  33. Internet • Online purchases amount to over $500 billion in 2003 • Projected to reach $864 million by 2006 • Projected to grow at over 15% per year until 2010.

  34. Internet Innovations

  35. Web Computing Growth of software rental market, including software licenses and services $ Billions

  36. 3G is Growing! 4G is next

  37. 3G Applications • Internet mobile game users expected to explode over the next 5 years from 32 million today, to 220 million users by 2009 • 3G will create $8 billion market that did not exist 18 months ago • VC’s are flocking to mobile game startups

  38. Global Stationary Power Trends • Telecommunications • Recovering from spending binge of the 90’s - Getting back to basics - reducing debt ® profitability • 3G beginning to fulfill initial promises • Telco’s being forced to compete with Cable • Global partnerships/acquisitions will continue • Opportunities will be on global scale

  39. Global Stationary Power Trends • Telecommunications • Infrastructure • Network holes in wireless infrastructure must be filled • Asia/Pac Rim continues to be growth area

  40. UPS Market • Data Storage Centers • US Industry has insatiable need for instant data. • Move away from complete centralization of data to having multiple back up. • Spending on Data Centers increasing - Global equipment spending to hit $10.1 Billion by 2009, and continue at a 6.8% growth • Projected growth of 5-7% in US • small and mid size batteries being manufactured in Asia(12-15% growth rate).

  41. Leading UPS Suppliers to North America • Annual Battery Purchases • APC $255 million • Powerware $ 153 million • MGE $ 90 million • Lieberts $ 40 million • Phoenixtec $ 42 million • Mitsubishi Elec $ 12 million • Toshiba $ 17 million • Triplight $ 27 million

  42. Summary • Global Stationary Market began to recover in 2003- becoming Robust in 04 & 05. • Telecom consolidations/joint ventures on 3G/4G will be in fashion over next several years • Wireless infrastructure far from complete • Global Motive Power Market: • Will show steady growth of 5% + annually • Europe will continue as largest producer • Overall Industrial Lead Battery Market will grow to a $5.6 billion market by 2010.

  43. Presentation for10 ¨ E ¨ L ¨ B ¨ CAthens, GreeceSeptember 26-29, 2006 Global Market for Industrial Lead Acid Batteries Current Status and Trends for the Future Hollingsworth & Vose Company Bob Cullen Vice President, Sales & Marketing

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