The Japan Experience2006 · METTLER TOLEDO Slide 1 Confidential / 11/8/2006 “The Japan Experience” Karl M. Lang Head Asia/Pacific Mettler-Toledo International Inc. 8606 Greifensee

METTLER TOLEDO

11/8/2006Slide 1 Confidential /

“The Japan Experience”

Karl M. LangHead Asia/Pacific

Mettler-Toledo International Inc.8606 Greifensee

Switzerland

METTLER TOLEDO


METTLER TOLEDO – a global company

The GROWTH challenge

Analyses Market Growth and Market Penetration

METTLER TOLEDO in Asia/Pacific

METTLER TOLEDO in Japan

Japan – Experience

Japan – Future challenges

Summary

Agenda

METTLER TOLEDO









Summary

Agenda

METTLER TOLEDO


A global company

METTLER TOLEDO• 1.5 bio USD sales• 10’00 employees• HQ in Greifensee, Switzerland• 1996: Buyout from Ciba (Novartis)• NYSE: MTD (IPO 1997)• Precision instruments for use in

laboratories, manufacturing, and food retail

METTLER TOLEDO


… your toothpaste contains an average of more than 50 components?

The mix is determined with the help of our analytical balances.

And it’s accurate right down to the microgram!

Did You Know That ...

METTLER TOLEDO



... beer quality has been monitored since the beginning of brewing?

Today it’s an automated process with our sensors.

Hops and malt would be lost without them!

METTLER TOLEDO



... your child can bite into an ice creamwithout any worry of popping out a tooth?

Every day – with no ifs, ands or buts!

Our detectors spot even the smallest foreign objects.

METTLER TOLEDO



… Fahim weighed 140 kg a week after he was born? And his father weighs over 5 tons!

Once a month, all of the elephants in the zoo are weighed on our scales.

And the terminal delivers all the big numbers.

METTLER TOLEDO



... our self service scale knows apples from oranges

It all adds up to a more pleasant experience!

The built-in camera makes your selection easier.

METTLER TOLEDO



METTLER TOLEDO


Global Manufacturing, Sales & Service

Innovation Centers MT Partners

MT Sales & Service Organizations

Global manufacturing strategy with focused innovation centersApprox. 4’800 employees in sales & service in 35 countriesGlobal manufacturing strategy with focused innovation centersApprox. 4’800 employees in sales & service in 35 countries

METTLER TOLEDO









Summary

Agenda

METTLER TOLEDO


Group Sales and Sales per Region

in mUSD

1482

936 10

96 1148 12

14 1304 14

04

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

1065

878

849

Americas 41%

Europe41%

Asia / RoW18%

METTLER TOLEDO









Summary

Agenda


METTLER TOLEEO 30% 34% 30% 3%

Americas Europe Asia-Pacific

3%

Oth

er

Bn US$ 7,329

United States

Canada

Mexico

BrazilArgentina

ChileColombia VenezuelaPeru

Germany

France

Italy

United Kingdom

Spain

NetherlandsSwitzerland

TurkeySwedenIrelandAustriaPolandBelgiumFinland

DenmarkPortugal

Czech RepublicGreeceNorwayHungary

Japan

China

South Korea

IndiaTaiwanAustraliaIndonesiaThailand

MalaysiaSingaporePhilippinesPakistanNew Zealand

Hong Kong, China

Rus

sia

Isra

elSo

uth

Afric

aSa

udi

Arab

iaIra

n

Egypt

Algeria

Oth

er

100%

80%

60%

40%

20%

0%

RO

W

50% of worldwide Manufacturing GDP80% of worldwide Manufacturing GDP

Manufacturing GDP by Region


METTLER TOLEEO

ArgentinaCanada Mexico Brazil

UnitedStates

SwitzerlandNetherlandsIrelandPolandUnited KingdomItaly

SpainFrance

Germany

AustraliaIndonesiaThailandTaiwanIndia

South Korea

Japan

China

Americas Europe Asia-Pacific

79

52

113

0

50

100

150

200

240

50% of worldwide manufacturing growth

80% of worldwide manufacturing growth

Real Manufacturing GDP Growth(in Bn US$ per year, Ø 2003-05)

Real Manufacturing GDP Added (annually)


METTLER TOLEEO








Summary

Agenda


METTLER TOLEEO

Growth Customer Processesgrowing economiesunder-penetrated marketsuncovered territories

Cost Innovation Processes (mainly China)low-cost manufacturinglow-cost R&Dlow-cost suppliers

Objectives Asia/Pacific


METTLER TOLEEO Asia – Sales & Service

Taipei

Ho Chi Minh City

Bangkok

MumbaiHong Kong

Seoul

Changzhou

Shanghai

Kuala Lumpur

Singapore• 13 Sales & Service Country Operations• 3 R&D and Manufacturing Operations• > 3000 employees

CAGR > 20%

METTLER TOLEDO









Summary

Agenda

METTLER TOLEDO


Sales & Service Japan

Sales & Service Japan47 employees in sales, marketing and engineering35 employees in service

Our own experienced and highly qualified sales and service specialistsadd value to the processes of our customersOur own experienced and highly qualified sales and service specialistsadd value to the processes of our customers

Tokyo

Ho Chi Minh City

Kuala Lumpur

Taipei

Bangkok

Mumbai

Shanghai

Hong Kong

Seoul

Changzhou Tokyo

Kuala Lumpur

Taipei

Bangkok

Mumbai

Shanghai

Hong Kong

Seoul

Changzhou Tokyo

Singapore

METTLER TOLEDO


METTLER TOLEDO in Japan (1/2)

1953: 1st METTLER balance sold in Japan.1953: Agency Agreement with Siber Hegner. Siber Hegner is the

prime partner for MT in Asia.Successful development of MT business in Asia.Focus on “easy to sell” products.Miss to develop strong strategic positions for many “new”product lines (agents unwilling to pre-invest).

1991: MT decides to focus on business development in A/P.Setup of 1st MT operation in Japan within Ciba Takarazukapremises (MT part of Ciba since 1980).Continuous expansion with product lines not marketed viaSiber Hegner.

METTLER TOLEDO


METTLER TOLEDO in Japan (2/2)

1997: Cancellation of agency contract with Siber Hegner.Transfer of Siber Hegner handled business to MT-JP including most MT related employees.Triggers agency transfers in other Asian countries.Siber Hegner subsequently becomes a competitor by introducing competing products.

2006: MT-JP with 120 employees, >4bJPY in sales, HQ in Tokyo, BO in Osaka, several SOHOs in other prefectures.Responsible for sales of all MT Laboratory, Process Analytics and Industrial products.Sales growth in low single digits.Food Retail products not introduced in Japan (Retail offers hardly any niches, dominated by Japanese competitors).Additional sales via OEM partner in the range of ~1bJPY.

METTLER TOLEDO









Summary

Agenda

METTLER TOLEDO


Japan - Experience

Cost of doing business:

METTLER TOLEDO


Japan - Experience

Cost of doing businessEurope Japan

85

5147

Distribution(local)

Avg. discount

TIB

Supplier

100

List Price

Distribution(local)

Avg. discount

TIB

Supplier

80

4037

100

21%

~40%

~50%

METTLER TOLEDO


Japan - Experience

Cost of doing business: Higher

Change Management: Very resistant to change (anything)

METTLER TOLEDO


Japan - Experience



People: Diligent, patient, loyal

METTLER TOLEDO


Japan - Experience




Timelines: How to explain to HQ?Impatience kills many good initiatives

METTLER TOLEDO





Timelines: How to explain to HQ?Impatience kills many good initiatives

Customer Satisfaction: A great learning experience much beyond Japan

Japan - Experience

METTLER TOLEDO









Summary

Agenda

METTLER TOLEDO


Japan – Current Challenges

Productivity:Segregation of tasks: Preparation (M) and Execution (S)Concentration (Administration)Automation (ERP, CRM, SFA, SMS)

Change is culture (mindset)

People:Release female powerTraining and development (management, employees)

Market penetration:Organic: displacing competitors (cost)Co-operation (patience)Joint Ventures (challenging to manage)Acquisitions (financial hurdles)

METTLER TOLEDO









Summary

Agenda

METTLER TOLEDO


Timing:Phase 1 – Trading house (agency contract)Phase 2 – In parallel, learning and getting familiarPhase 3 – Business transfer, building for long term growth

Success:With products and solutions launched early in the life cycleWith “exclusive” products and solutions (not already covered by locals)

Management:Japanese with experience in Western companies

Productivity, Change, Cost:A constant fight

Penetration:Persistence

Summary

METTLER TOLEDO


ZusammenfassungHerzlichen Dank fürIhre Aufmerksamkeit

Thank you for your attention

www.mt.com

Documents

The Japan Experience2006 · METTLER TOLEDO Slide 1 Confidential / 11/8/2006 “The Japan Experience” Karl M. Lang Head Asia/Pacific Mettler-Toledo International Inc. 8606 Greifensee