MARINE ELECTRIC PROPULSIONTrade and Internationalisation Conference

Genoa, October 4, 2013

Agenda

Introducing Torqeedo1

2

3

Internationalisation in the marine industry

Approaches and experiences

Introducing Torqeedo

Source: Torqeedo 3

� Global #1 in electric mobility for boats

- > 40,000 electric propulsion systems in the field.

- Best product performance.

- Latest technologies.

- True international leadership position; >70% of sales outside home market.

� Products equivalent to 1-80 hp.

� Founded February 2005, headquartered near Munich.

� Measured by innovation awards, one of the most distinguished young companies in the marine industry. Awards include among others: Deutscher Gründerpreis, Red Herring Europe top 100, NMMA Innovation Award (3 times), DAME Award etc.

Shaft Power

Input Power

Propulsive Power

Ove

rall

effi

cien

cy

56

30-35

18-20

5-15

Overall efficiency in percent

Record-level overall efficiency of all Torqeedo outboards provides more speed and range.

Perspective on Performance

Different Perspective Different Performance

Source: Torqeedo

3 HP equiva-lent with inbuilt lithium battery

Similar to 3 HP gasoline outboard= Power= Speed= Range+ Lighter+ More Comfort+ Cleaner+ Quieter+ Waterproof

IP67+ Information

System with GPS based range

+ Solar Chargeable

Key products – TravelFor Tenders, Dinghies & Daysailers

5Source: Torqeedo

6Source: Torqeedo

� Only production outboard for high power electric propulsion

� 80 HP equivalent

� Superior safety system

� 9 years warranty on battery capacity

� Inboard version available for 2014

Key products – DEEP BLUEFlat fee boating for heavy users and other selected segments

General internationali-zation drivers

� Culture

� Communication

� Transport

� Global institutions

� Global standards

Internationalization an imperative, not an option

Marine-industry specificinternationalization drivers

� Small market volumesrequire addressing global markets

� Internationally mindedcustomers requireinternational mindset

� Trend from artisanrytowards industrializationwill continueto drive need for volumeand internationalization

� Marine industrytraditionally with high degree ofinternational trade.

� Many companies in the industry withsales >70% outside their home market.

Source: Torqeedo

Market development in traditional boating (export) markets

Focus shifts to new countriesOutboard market development 2006-2012

-40% vs. 2006

-40% vs. 2006

-50% vs. 2006

-50% vs. 2006

Market development in boomingeconomies

Russia

China*

Brasil

Russia, China, Brasil already today amongthe top global markets for marine products

USA

France

Italy

Sweden

+132% vs. 2006

+50% CAGR p.a.

Booming

* General market growth, not specific for outboard market

Source: Torqeedo

� High import cost

� Complex import procedure

� Complex tax and legal structure with implicationsfor margin calculation

− Different taxes along Brazilian states

− Taxes with impact not only on bottom line but also on margin calculation

− Frequent changes to legal system

� Infrastructure limitations

They are difficult to work in though…..

„Planilha“ – import costcalculation up to dealer level(60 line items)

Source: Torqeedo

Objectives, fields and and degrees ofinternationalization

Drive growth

� Sales

� Marketing

� Service

Improve costposition / benefitfrom regional competencies

� Supply chain

� Production

� R&D

Domesticapproach

Truly globalapproach

� Fully integrated and international subsidiaries

� International staffand international careers

� Indirect distribution(exports)

� Direct distribution

� Strategic partnershipsand JVs

� Fully owned sales-marketing subsidiaries

� Domestic operations

� Global sourcing / supply chain

� Sourcing offices

� International production

� International R&D

Very smallcompanies

Very large companies

International withdomestic core

Majority ofcompanies

Source: Torqeedo

No one-size-fits-all-approach

Internationalisa-tion approach

Company require-ments

Market require-ments

� Company size

� Available resources

− Financial

− Manpower

� Requirements ofproducts

− Brand

− Distribution

− Explanation

− Service

� Other requirements

� Market potential

� Vicinity to home-market

− Segment similarity

− Logistics

− Import

− Legal

� Other marketcharacteristics � Selection from various

options

� Synchronise market- and company-requirements

Source: Torqeedo

International growth approaches applied by Torqeedo

Indirect distri-bution (export)

Directdistribution

JVs / Strategic partnerships

Sales/marketingsubsidiaries

Where we do it

>30 countries

Why we do it

� Fast internationalisation� Strong partners� Low cost-to-serve

� High impact� High vicinity, low cost-to-serve� Medium volume required at minimum

� High-potential markets� Low vicinity� High complexity and cost-to-serve

� Largest markets in the world

Inte

rnat

ion

alis

atio

nin

ten

sity

Source: Torqeedo

Direct distribution

Strategic partnerships

Indirect distribution

Torqeedo world map

Source: Torqeedo

Market Awareness Relevant Set Trial Purchase Loyalty

Public Relations / Advertising

Catalogue

Boat Shows

Online / E-marketing

Demonstrations & Open Days

Key challenge: Internationalisation approach needsto address all major marketing levers

14

Distribution / Dealer Advocacy

Source: Torqeedo

Outlook

Drive international growth

� Easier access to many markets

� Global middle class will double in ourdecade

Source: Torqeedo

Improve costposition / benefitfrom regional competencies

� Cost pressure

� Continued opportunity to optimizesupply chain throughinternationalization and industrialization

� Substantial opportunity in internationalisation

� Imperative rather than an option

Contact

16

Torqeedo GmbH

Friedrichshafener Str. 4 a

82205 Gilching

Germany

Dr. Christoph Ballin

CEO

Tel +49-8151-268 67-60

Mail christoph.ballin@torqeedo.com