1. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 1 COMMODITY REVIEW Buy out parts Thierry Coumert

2. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 2 Buy out parts

3. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 3 Bearings inflation

4. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 4 Bearings Organisation

5. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 5 Bearings Market Trend –Opportunities 100Cr6 steel market price decrease Increased productivity at bearing manufacturers lead to lighter labour impact on bearing manufacturing cost –Risks Zloty/Leu & Yuan rates to € are likely to grow Bottlenecks in production on some sizes lead to tensions on supply

6. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 6 Zloty / € + 22%

7. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 7 Bearings : Summary

8. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 8 Bearings : KPI

9. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 9 LS Bearing Spend per Origin 53 % out of LCC Total Spend : 6 M€ NSK/NTN/Koyo SKF/NSK/FAG FLT/NSK NSK/SKF

10. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 10 Bearings : LCC FY 07 Objectives FY 07 –Bearings : From 53 % LCC up to 65% LCC Larger share awarded to NSK and FLT Poland Extension of RBNV/Romanian source for taper/roller/spherical bearings Limited introduction of Peer on small DGBB –Slide Bearings : 0% LCC (Renk – Germany)

11. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 11 Bearings : Reverse Auction FY 06 –WS 9682Wind mill Bearing1125 k€*7% –WS 4850Slide Bearings2362 k€**0,12% –WS 12528LS Eu Asia DGBB1600 k€11,9% FY 07 –Wind mill Bearing  New contract –Slide Bearing  Combined auction w Kato *2years spend **22 months spend

12. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 12 Bearings : Main Projects FY 06 –2007-2009 Bearings LTAG negociation incl. RA About 800 k€ savings out of 7,2 M€ exposed LT sharp reduction down to 5 WD for all suppliers Packagings revisited to match weekly qties delivered –Renk price increase ambitions stopped via RA FY 07 –Implement LTAG at all LS plants involved –Find/Qualify/negociate an alternative reliable slide bearing source to Renk for Orléans. Consolidate w Kato on that project Total spend Orléans + Kato : 1,9 + 1,2 = 3,1M$

13. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 13 Bearings : Other Projects FY 06 –Rationalisation of Parts codification FY 07 –Improve Renk delivery performance thru standardization of components at Orléans –Get 300 k€ additional spend codified

14. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 14 Stamping Parts Organisation

15. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 15 Buy out parts

16. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 16 Sheet Metal parts inflation

17. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 17 Sheet metal parts Market Trend –Opportunities Raw material price decrease –Risks Overload of Cz supply base LS CZ Supply base too dependant on LS Leu/€ rate trend +10% / year Welded part inflation in Romania

18. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 18 Sheet Metal Parts : Summary

19. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 19 Sheet metal Parts : KPI

20. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 20 Sheet Metal Parts : LCC FY 06

21. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 21 Sheet metal Parts : LCC FY 07 Objectives FY 07 –Reach : 50%+ LCC –Complete transfer from France to Eastern Europe for PMS CA motor plants parts. Qualify new sources in Cz/H/Pl to unload current suppliers (Beran/Hanakov/Mopos/…) –Negociate price decrease to offset impact of raw material price increase from FY 05 –Source/Qualify new ukrainian base for heavy welded parts from Orléans. Transfer 300 k€ from Ro to Ukr.

22. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 22 Sheet metal Parts : Reverse Auction FY 06 –WS 4525 Welded Housing 3 MW2400k$*48,4% FY 07 –Large welded parts (Orléans) * incl. Machining/Stator insertion/Tests

23. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 23 Sheet metal Parts : Main Projects FY 06 –Transfer and sourcing in Eastern Europe of 3MW welded housing –Set up of a supplier base in Romania for Orléans large welded parts as alternative to Privod (Ru) and Electroturris (Ro) –> Vitimas/Faur/UMUC FY 07 –Set up of a new supplier base in Ukraina for large welded parts to contain price & currency exchange rate increase from Romania

24. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 24 Buy out parts : DPO Bearings –DPO : 102 days –No regular suppliers below 30 days Sheet metal parts –DPO : 63 days –5 suppliers below 30 days : 3 czech / 2 romanian Letovicke (Cz)45 days from Jan 07 Mopos (Cz)60 days from FY07 (PS) Beran(Cz)Negociation on course Electroturris (Ro)45 days from Sept 06 Vitimas (Ro)45 days from Sept 06

25. COMMODITIES REVIEW 22&23 June06 14/10/2015 16:00 25 DPO : Suppliers < 30j