Outline us.kohler

2. Outlinewww.us.kohler.com • History • Communication • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

3. Outline • History • Communication • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

4. Kohler history in detail: industry + product development Toilets wash- basins of vitreous china Enters electric generator market Brass faucets One-piece built-in bath-tub Electric kitchen sink First enamel bath tub Complete bathroom sets with matching colours Starts manufact.faucets + brass accessories Kohler foundet 1883 1873 1911 1920 1925 1926 1927 1870 1880 1900 1920 1930

5. Kohler history in detail: industry + product development Sales by 1 m $ Sales by 2 m $ 100 anni- versary rapid expansion Acqui. of 1st Furnit. Comp. Vitreous china plant opens in MEX Acqui. of Sterling Faucets Joint Venture in China New colours for plumbing fixtures „Bold look of Kohler“ ad theme Investm. in cast iron product. facilities • The 1990ties • Master suite concept • Product design • Innov. toilet and showers • Luxury whirlpool bath 1965 1965 1971 1973 1984 1986 1987 1991 1995 1996 60 70 80 90 00

6. Communication

7. The four seasons of Kohler´s brand awakening Introduction of functional and technical innovations (bath, kitchen) Establishing Kohler as a full-line manufacturer of bath products Concern for aesthetics and manufacturing improvement The Bold Look of Kohler Art, Inno- vation, Life Internal and external growth Form and Function 1900 - 1920 1960´s 1990´s

8. The four seasons of Kohler´s brand awakening Launch of exciting, new plumbing products in vivid accent colors with significant advertising campaign titled „THE BOLD LOOK OF KOHLER“ Campaign also solidifies Kohler´s culture and attitude (inside company) • Further lines followed: • - Whirlpool baths in an array of shapes and sizes • - Big kitchen sinks for big homes, and compact models for small apartments • - Lightweight, easy to clean fiberglass shower modules • - Faucets with interchangeable handle inserts The Bold Look of Kohler Art, Inno- vation, Life Internal and external growth Form and Function 1900 - 1920 1960´s 1990´s

9. The Bold Look of Kohler adv campaign

10. The four seasons of Kohler´s brand awakening As consumers spend more quality time at home, Kohler continues to meet these needs with a fresh design approach Kohler answers the trend towards increased luxury with it´s Master Suite Concept answers trend towards increased luxury (console tables + bath vanities + bedroom furnishings) Electronics and other technological improvement as for example: - stylish toilets - faucets - water saving shower heads - innovative showering products and luxury whirlpools Decorative fixtures, textured surfaces and expressive colors The Bold Look of Kohler Art, Inno- vation, Life Internal and external growth Form and Function 1900 - 1920 1960´s 1990´s

11. The four seasons of Kohler´s brand awakening In 1984, Kohler starts an expansion program based on: - internal growth with new materials, products and markets - synergistic manufacturing facilities - direct access to new markets. Currently Kohler encompasses an extensive business worldwide in the field of - plumbing products, cabinetry and tile - under a variety of brands The Bold Look of Kohler Art, Inno- vation, Life Internal and external growth Form and Function 1900 - 1920 1960´s 1990´s

12. Mission Kohler „Improving the level of gracious living for each person who is touched by our products and services.“

13. Communication Conclusions • Kohler focus on design: • improving the level of gracious living • Stylish, lifestyle-oriented Kohlerpoint out a high standard of quality and manufacturing know-how that promotes to be innovative in terms of product design (colours, materials) and aspects of comfort in the bathroom. • Kohlerlooks back at great advertising campaings • The Bold Look of Kohler

14. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

15. Turnover & Income statement Estimated turnover 2005 : 3.1 Billion $Estimated number of employees 32.000

16. Turnover 1997 by Group

17. Structure of Business Families

18. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

19. cws taps bathfurniture wellness Acquisitions 1985-2006 France UK Marocco US Mexiko New Zealand Thailand China * India 2006 1985 1993 1994 1995 1996 1998 1999 2000 2001 2002 2004 2005 furniture tiles csw baths enclosure showers plumbing fixtures kitchen taps factory tiles * faucets, baths, whirlpools, lavatories, toilets,showers

20. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

21. CSW production located all around the world. Weakness in Europe will be remedy with the new Russian factory

22. CSW production located in such a way, that allows a locally presence in our (future) markets, and at the same time assure an access to low-cost sourcing 14 production locations for CSW Total capacities: Europe: 1,9 mln pcs World: 19,0 mln pcs (New plants planned: MX, RU, IN=> >5 mpc)

23. Non CSW production covers all the product categories that are part of our strategyIndustrial restructuration of non profitable operations in Europe already planned

24. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

25. CSW Bathtubs Shower T Furnitures 67% 1873 1989 1984 1989 1985 2000 2002 2001 1987 Overview Brands / Product fields Taps & Mixers Tiles Info about Karat uncompleted Core business

26. Price High end upper middle Karat Prof. US - Canada Europe / middle east Asia / pacific Overview Brands / Price positioning Each brand is available through the regional Kohler sales manager

27. Core brand • Kohler • Main brand for worldwide use; • covers entire spectrum Regional brand Specialist brand • Jacob Delafon (F,E)* • Englefield (AUS) • Karat (THAI) • Kallista* (US) • Sterling* (US) • Ann Sacks* (US) • *Regional brands with • complete offer • Sanijura (F) • Mira (UK) • Daryl (UK) • Robern (US) • Local brands with • special offer Brand architecture

28. Kohler has long encouraged an ongoing dialogue with the art community. Kohler works with international designers and architects for: • product development (2006, launch of 3 Artists Editions ‘Top Art Collection’) • bathrooms arrangement, to show customers how a dream Bath from Kohler could appear (www.kohler.com). • in the Kohler Design Center in east central Wisconsin, where they offer educational seminar series, design services, showroms with current range and a museum

29. Kohler wants to be state-of-the-art. • Acquisitions of innovative companies (hightec, mira, etc.), • Launch of innovative products, that combine state-of-the-art design with innovative technologies and take care to save water (performance flush technology, urist mirror with faucet, C3 Toilet Seats) Kohler offers end consumers many ideas and services to arrange their bathroom to a dream space for a higher level of gracious living.

30. - complete bath offer

31. - complete bath offer

32. - core business tiles & stones

33. - complete bath offer

34. - Showers, enclosures, trays, brassware Mixing valves, accessories, pumps

35. - Bathtubs and Showers Hydrolux®Air jet Systems Hydrolux® Whirlpools

36. - Product Overview Toilet suites / Showers / Plain baths / SPA baths / Vanities

37. - Product Overview Bath / Shower moduls and doors / wirlpools, sinks, toilets * < 100 USD / lavatory

38. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy

39. As Kohler itself, most of our international competitors cover almost the entire spectrum of bathroom products Legend: X = minor weight in sales of company XX = medium weight in sales of company XXX = great weight in sales of company Source: Kohler research

40. 500 400 300 200 100 Europe Asia America Ceramics (incl. sinks and DE FR UK/IE IT BNL Sca ES/PT RU Oth JP CN IN Rest US CA MX Rest showers) EUR S+OA S-Am Size (m€) 278 320 378 350 102 165 253 173 372 475 702 186 >700 1.209 100 124 >240 Villeroy & Boch American Standard Duravit Eczacibasi Grohe Inax Jacuzzi brands Kludi Kohler Masco Roca Sanitec Toto Legend: Market share (volume): > 15% Market share (volume): >2% - <5% Market share (volume): <2% Market share (volume): >5% - <15% Global presence of the main competitors in CSW (2004) Kohler : Good presence in America, limited presence in Europe

41. On the world ranking list, we estimate that we rank #2 Total value as basis: 5,2 billion Euro (ASP) World-wide shares of main suppliers of CSW* - year 2003; coverage ca. 80% of total world market * V&B incl. Vitromex, Roca incl. acquisitions 2006 * Due to lacking data inclusive ceramic shower trays and kitchen sinks Source: BSRIA - Consult - Kohler research

42. In Europe however we are still relatively weak at #6 Total value as basis: 2,2 billion Euro (ASP) Shares of the main supliers of CSW* in Europe - year 2003 - * Inclusive acquisitions of Roca 2006 *Ceramic Sanitaryware exclusive ceramic shower trays and kitchen sinks Source: Consult and Kohler research

43. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT (only Kohler team) • Strategy

44. STRENGTHS Internationality Industrial and market presence in 3 continents Strong presence in the US market in several bathroom product categories Complete offer for the bathroom (and Interior Design competence) including material diversification WEAKNESSES Limited international presence of core brand Weak presence in Europe Failure to enter the German market No success in transferring ranges from one country to another (Delafon/F vs Kohler/D) Specialist brands have only local presence (Mira, Sanijura) Strengths and Weaknesses

45. STRENGTHS Family owned company (long term objectives and outlook, less short term pressure) Experience with acquisitions and investment minded WEAKNESSES Complexity of organisation factories brands countries Strengths and Weaknesses

46. OPPORTUNITIES Fast growth of the Asian market will benefit to the Kohler local presence Ceramic acquisition or alliance in Europe THREATS Concentration in industry & trade Opportunities and Threats

47. Outline • History • Financials • Past acquisitions • Current and planned industrial presence • The product ranges • Kohler and it’s competitors • SWOT • Strategy (Current)

48. Current strategy • Expansion of all kinds • Geographically (Markets and production facilities) • Asia : China, India, Thailand • America : Mexico and US • By product and material categories • for sourcing reasons

49. Current strategy • Reinforcing of the core Brand and establishing sub-brands to cover all market segments • Enlarge/improve the core brand Kohler • by taking control of the quality of our distribution in the US (Showroom programs . The Kohler Store) (US) • Art’s involvement (Product, communication) • Other brands: • Creation of Kallista and Ann Sacks as a luxury brand (US) • Be present in the lower segment with Sterling (US) • Use specialist brands (Europe/US)