FORKLIFTS

INTERCONTINENTAL FRANKFURT HOTEL Meeting room “Beethoven”Evelyne Lachal 2012-10-30

Security and Confidentiality

Members can discuss and collaborate on requirements and cost of

Indirect goods and services as long as those indirect goods and

services:

Do not Directly and appreciably affect the cost of production

Do not Represent 15% or more of the market for those goods or

services being discussed.

• Members cannot discuss cost of Direct Goods/Raw

Materials & CAPEX except in limited circumstances and approved by legal counsel

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World International Lift Trucks Statistics

• Global WW increase orders by 23% in 2011 Nº1 Americas 24.1% (out of which

South America raised by 123%) Europe 23.6% Asia eroded to 20% ( compared to

previous year with 53% increase) Africa 13.2 % and Oceania 44.7%

• Market reflection the economic situation (see 2009) Market trend: BRIC countries drive the growth Asia boosted by China, India South America boosted by Brazil Europe boosted by Russian

FederationIn EU, Germany and Poland show a significant growth.

• Large panel of suppliers with key suppliers out of which 10 of the 25 biggest cover 85% of the turnover

1,199,315 Trucks orders

Source: WITS

Source: www.DHF-magazin.comWorld ranking list of material handling vehicles

Source: WITS data :

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Large scope in the machines range

Pallet & Pedestrian truck

Standard and ATEX certified (Pyroban) for explosion proof environment

Tow truck

Electric

stacker

Electric 3 or 4 wheels

truck

Reach truck

5

Suppliers Ranking and Trade mark

Source: World ranking list of material handling vehicles DHF.com

Brazil

Source: Top 20 lift truck suppliers, 2012 – Modern Material Handling

2011 Turnover

Nº1 worldwide

Suppliers turnover and employees (per year 2006/2010)

Hanhui Heli

•Factories inChina

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Global trademarks on the market

MITSUBISHI•3 trademarks

•Factories inUSA, Finland, Japan, China

Kion•6 trademarks

•F•USA, France, Germany, Italy, UK, Czech Rep., Brazil, China, India

Jungheinrich•1 trademark

•Factories inGermany, Czech Rep., China

NACCO•2 trademarks

•10 facUSA, Italy, NL, N. Ireland, Brazil, Mexico, Japan, China, Australia, Philippines, Vietnam

MANITOU•1 trademark

•Factories inFrance,

Toyota Material handling•4 trademarks

•Factories inCanada, USA, France, Sweden, Italy, Japan, China

NISSAN•2 trademarks• Factories

Canada, USA, France, Sweden, Italy, Japan, China

KOMATSU•1 trademark

•Factories inUSA, Japan, Thailand

Crown•1 trademark

•Factories inUSA, China

Nissan and TCM are merging as UniCarrier

Approach & necessary miles stones

1Current Position

2Locations Interest

3Future Approach

4Tendering

5 ContractSettlement & KPI

6 Implementation& Cost Control

An identified spend and number of trucks in the fleet

A clear definition (specs/ needs) using existing config.

or defining the trucks requirements

A defined strategy to put in place

A respected planning (by the internal stakeholders &

the suppliers)

A respect by the supplier of a detailed template allowing

to define key data facilitating nego.

A well defined contract to avoid unexpected bills at

expiration

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Different Forklift Strategies

Local Strategy

Halfway Strategy

Global Strategy

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Elemica experience

Supplier’s involvement

prior to the tendering process by

organizing pre-tender information meetings to disclose the scope of the

project and enable manufacturers participation not distributors

A buyer driving specifications and requirements rather than requesting spec currently available

Suppliers to visit customer facilities to obtain the full picture of the external environmental conditions

Good preparation A specific templateWatch out:

Supplier non respect of the detailed template

Tendency to give one global price allowing you no true comparison and no clear view of the offer prices compounds

Common misstepChargers & batteries no unit prices &

quantityChange of running hours other than

requestedChange of leasing periodNo stated residual value

No price for buy-backNo below hour prices but over hours are

presentMonthly truck usageTendering a fleet per real/ expected

hourly class running hoursAvoid uniform usage for the fleet such as

all trucks150h/months200h/months250h/months….

Proper Bid sheet

Tender scope

Global, Cross countries or local tender; a tailored approach fitting a strategy issued

from the present situation

Elemica expertise

+80 projects WW

+20 Projects in EU

Avr. 18.5% savings EU

A commodity know-how

Controlled Planning An accurate monitoring of the defined

planning will allow: Better project focus

Stronger suppliers involvement and responsiveness

Internal stakeholders consensus

Stakeholders added value Internal stakeholders with strong preset

product viewAnd/ or un-consistency in their needs

And/ or mislead by direct suppliers contacts

A controlled process

E-tools price optimizationhelp you to reach the real market price

RFQ for Prices alignment & Auctions to define the leaders using multiple scenarios

- on prices compounds (unknown true winner)- on total market value with supplier weighting

- on various procurement modes (purchase/lease)

Prices alignment leaders

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Financing modes: a recurrent ?

Long term

renting

Flexible & pre determined terms

susceptible to change

Short term

renting

Cover peaks or unstable conditionTerms can change

Hourly hiring

Payment only for the usage

(including truck but eventually the driver)

Leasing

2 forms

Pre-determined terms and cannot be broken without breaking the

lease

Purchase

Preferred for long term usage or

financially better off

Operational

Leasing

Finance Leasing

Out off your balance sheet In your balance sheet

Differentiation on next slide

Operationallease

Out offyour

balance sheet

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A Lease form halfway to purchase

Purchase

Capital lease =Finance lease

Inyour

balance sheet

ALL TO NO

1 YES MIN

One criteria verified

According to International Accounting Standard (IAS) 17 amendment: by IFRS 7

“Lease”Forms

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What is actually requested?

Driver

Driver / truckDriver / hour

Service/Maintenance

PreventiveCurative

Labor rateTravel rateSpare part price

Full serviceLevel a: TBDLevel b: +Tires **Level c: + Batteries**

& chargers

Machine

TruckBatteries *Chargers *Accessories

* If needed or applicable** Indicate the frequency of replacement (1 set per ….)

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Questions and Discussions

1. Are your stakeholders open for change & how do you motivate them to capture value?

2. Are you meeting suppliers before/during Tender? And are they accepting tendering?

3. Is your relationship at agent or a central (international / national) key account level?

4. Do you think the complexity of this spend category is too high and is very difficult for you to have and maintain close grip in it?

5. What is your opinion about having a global central contracting approach versus a local?

6. What challenges are you confronting while managing this spend category and how do you convert them into success stories?

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Thank you and let’s share your

views to empower your vision