Starting a business in the USA NAF Breakfast

NEXT PREVIOUS Introduction  Marcel Birkhoff – 38yr, married and a daughter  Business/Marketing & technical background,MBA Marketing management  13 years with Hyva on international business development – pioneering new markets  Moved in 2005 to USA & Since 2005 managing director of Hyva Corporation

NEXT PREVIOUS Contents:  Company History & activities  Our move to the USA  Main prerequisites  Main obstacles  Cultural differences!  Long term short term  Surprises  Main tax implications  Main Lessons & conclusions  Questions

NEXT PREVIOUS The Hyva Group From a tiny spot on the map in 1979…

NEXT PREVIOUS … to a world leading company in 2008 … Hyva moves your world!

NEXT PREVIOUS Companies everywhere in the world Technamics B.V. Hyva China Hyva India Hyva altatec Australia

NEXT PREVIOUS In 29 years Hyva reached  Export to more than 130 countries  28 fully owned subsidiaries  2000 employees  Sales of telescopic cylinders (2007)  Sales of tipper bodies per year (India)  Sales of Hyvalift systems (2007)  Turnover of € 475 mio in 2007  Expected turnover of € 600 mio in 2008…

NEXT PREVIOUS Hyva is producer of  Hydraulic telescopic cylinders  Hydraulic truck kits  Hyva Lift container (un)loading systems  Hyva Floor horizontal (un)loading floors  Truck mounted cranes

NEXT PREVIOUS Hyva on USA dumptrailer

NEXT PREVIOUS whydraulic kits wsuper structures wall necessary components Hyva Hydraulics

NEXT PREVIOUS Major drivers of our business  GDP development of countries  Infrastructural investments & projects  Mining & heavy off road tipping applications  Environmental developments  Developments of labour costs  Sales numbers of trucks & trailers

NEXT PREVIOUS Our move to the USA  Started from Chicago apartment in beginning 2005  Company founded in end of 2005  “Corporation” as legal entity, registered in Delaware  Main office in Chicago, with various satellite warehouses  Usd. 6 mio Estimated sales  Market-scope is US and Canada  Currently serious market decline in USA  Constant growth – increasing market share  Hyva has far more modern & efficient product

NEXT PREVIOUS Prerequisites to enter NA  Safeguard yourself against currency fluctuations risks  Investigate product liability risk  Structure the company in such a way that parent company can not be touched  Have patience and full stakeholder support  Local presence & fast product availability  Product offering must have an competitive edge

NEXT PREVIOUS Main obstacles  Geographic size & regionalism  Difference in technology & market standards  Different customer expectations  Not “Made in USA”  Liability issues  Different laws & regulations on company and employees  Reluctance to deal with foreign companies  Don’t fall for the transatlantic trap!

NEXT PREVIOUS Transatlantic vicious cycle Reconfirmation of the American’s Concern about European Commitment Entry American Concern Regarding priorities / US Commitment of the European Withdrawal of the European from the USA Refusal to Purchase Due to Perception of Lack of commitment Disappointment of the European Investment limit reached Product introduction Positive initial response

NEXT PREVIOUS Cultural differences  There is a bigger culture difference than most people think  US customer is polite, and does not say no  Dutch people can be perceived as too direct and pushy  Intercultural training definitely helps!

NEXT PREVIOUS Short term Long term  US is short term focused, NL long term This emerges in different areas: -Economy has higher highs & lower lows -Quality & technical sophistication is less important -Lower price is more important then lower cost -Shorter timeframe on ROI’s -More importance on short term shareholder value -The dollar is paramount!

NEXT PREVIOUS Surprises  US customers generally perceive European products as superior – nice!  Banking system old fashioned and inefficient in Dutch view – majority payments with checks  Certain industries very low tech, others very high tech  Lower environmental awareness & concerns  More bureaucracy than you expect  VISA application process not so easy anymore  Canadian market presence eases introduction in US

NEXT PREVIOUS Tax issues  Consider international transfer pricing rules  Consider federal tax and state tax  Sales in different states = paying tax in different states  You need good local advise and global tax strategy

NEXT PREVIOUS Lessons & conclusions  Do not underestimate geographic size  Setting up takes 3x longer and cost 3x more as in business plan!  Good preparation on all fronts is key  Cover your self against currency/liability risks  Focus on long term and be patient  Sustained local presence is key in breaking the transatlantic vicious cycle  If you succeed the rewards are great!

NEXT PREVIOUS Thank you for your attention! Any questions?