The Changing Structure Global Construction Equipment Industry of The Global Construction Equipment Industry AND A FOCUS ON EUROPE September 2014 1

WHO WE ARE A Management Consultancy that specialises in the research and analysis of international construction equipment markets. The largest of its kind in the world. Formed in 1981 as part of the Economist Intelligence Unit. Management Buy-Out in 1995. Now privately owned. Offices in: London, England - New York, USA - Tokyo, Japan Beijing, China - New Delhi, India www.offhighway.co.uk 2

Products Included in This Presentation Articulated Dump Trucks Asphalt Finishers Backhoe Loaders Crawler Dozers Crawler Excavators Crawler Loaders Mini Excavators Motor Graders Motor Scrapers Rigid Dump Trucks RTLTs – Masted RTLTs – Telescopic Skid-Steer Loaders Wheeled Excavators Wheeled Loaders

WE ARE FACING A MOST UNCERTAIN FUTURE

Some Positives… But Many Negatives

The Road Ahead is Far From Straight and Clear

Global Overview Global Equipment Sales: 2007: $98 billion 2011 2012 2013 2014* 2015* 2018* ­ China $11 $35 $24 $22 $19 $20 ­ North America $28 $21 $25 $26 $29 $31 $32 ­ Europe $12 $13 $14 ­ India $2 $3 $4 ­ Japan $5 $6 ­ Rest of World $30 ­ TOTAL WORLD $98 $106 $101 $94 $92 $97 $104 *Forecast

Global Value of Construction Equipment, by Type 2013 ($ Billion) Total: $93.8 billion

Key Sales Trends, by Region, 2006-2018* (Units) *Forecast *Forecast

Key Production Trends, by Region, 2006-2013 (Units)

Global Recovery: Slow, and Governments’ Help Will be Needed

Global Sales of Construction Equipment 2000 – 2018* (Units) Average 2014-2018*: 898,468 Average 2009-2013: 857,729 *Forecast

Changing Structure of Demand, 2007-2018* (% of Total) 2007 2013 2018* *Forecast

A Long and Winding Road To Recovery Focus on Europe A Long and Winding Road To Recovery

Countries Included in This Presentation Austria Italy Belgium Netherlands Denmark Norway Finland Portugal France Spain Germany Sweden Ireland Switzerland United Kingdom

Europe: Development of Sales, 2000-2018* (Units) Average 2014-2018*: 123,020 Average 2009-2013: 108,076 *Forecast

Europe: Structure of Sales, by Product, 2007-2018* (% of Total) 2007 2013 2018* *Forecast

Europe: Structure of Sales, by Country, 2007-2018* (% of Total) 2007 2013 2018* *Forecast

Europe: Value of Sales, by Country, 2013 ($ Million) Total: $12.1 billion

Europe: Structure of Sales by Company, 2007-2013 (% of Total) 2007 2010 2013

Europe: Development of Production, 2000-2013 (Units) Average 2004-2008: 201,456 Average 2009-2013: 122,894 21

Europe: Structure of Production, by Country, 2007-2013 (% of Total) 2007 2010 2013

Europe: Structure of Production, by Product, 2007-2013 (% of Total) 2007 2010 2013

Europe: Structure of Production, by Company, 2007-2013 (% of Total) 2007 2010 2013

Europe: Value of Production by Country, 2013 ($ Million) Total: $17.8 billion

United Kingdom: Development of Sales, 2000-2018* (Units) Annual Average 2014-2018*: 28,798 Annual Average 2009-2013: 22,364 *Forecast

United Kingdom: Structure of Sales, by Product, 2014* (Units, $ Million) Units % Value % Units: 30,445 Value: $2.9 billion *Forecast

UK Manufacturers of Construction Equipment, 2014 Caterpillar JCB Komatsu Terex Articulated Dump Trucks  Backhoe Loaders Compaction Equipment Crawler Excavators Mini Excavators Rigid Dump Trucks Telescopic Handlers Wheeled Excavators Wheeled Loaders

United Kingdom: Development of Production, 2000-2013 (Units) Annual Average 2004-2008: 64,747 Annual Average 2009-2013: 40,361

United Kingdom: Structure of Production, by Product, 2013 (Units, $ Million) Units % Value % Units: 47,152 Value: $5.3 billion

Attractions of The UK as a Market and a Manufacturing Source Long history of manufacturing and engineering Great people skills Strong domestic manufacturing base Large and stable domestic market – usually! Stable government – relatively! Not in the Eurozone Large and important rental industry In-depth, high quality component supply industry -The ultimate key to industry success PLUS…..

Attractions of The UK as a Market and a Manufacturing Source WE NOW HAVE A SUCCESSFUL DOMESTIC EXHIBITION!

THANK YOU! London Office Please do not hesitate to contact the team for help at: London Office mail@offhighway.co.uk Telephone: +44 (0)207 404 1128 DAVID C A PHILLIPS Managing Director