Magal Engineering Limited

Headley Road East

Woodley

Reading RG5 4SN

United Kingdom

www.magal.co.uk

Magal Engineering Group

Magal Engineering Group Structure

Gamil Magal (CEO) David Woolford (COO)

Kevin Lowen (CFO) Adrian Paul (Finance, M&A)

Andy Tonks (Group Sales & Business Development)

Automotive

Division

Location Products

Thermostat

Plastic

Housing

Oil Diverter

Conrods

Pedals

Handbrake

Gear Shifter

Hinges

Steering

Latches

Jacks

Winches

Cables

UK (x3)

France (x3)

Germany (x1)

India (x1)

Turkey (x1)

USA (x1)

China (x1)

Non-

Automotive

Division

Location Products

Elements

Central

Heating

Temperature

Control

Industrial

UK

France

India

Industrial

Facades

Location Products

Industrial

Window

Systems

Cladding

Door

Systems

Curtain

Walling

UK

Implementation of

Magal Lean Manufacturing

Principles

Magal Engineering Company History

Acquisition of Adwest Engineering Ltd 2002

Acquisition of; Metallifacture Ltd; Adwest Cables Ltd; Western Thomson Controls Ltd; Dauphinoise Thomson SAS (France); Bowden SAS (France); Western Thomson India Formation of the Magal Engineering Group.

2003

2004 FTW and Portland Pressings acquired and amalgamated into Western Thomson Plastics Ltd

2005 Acquisition of AP Driveline Technology Ltd

2006 Construction of new production facility in Chennai, India commences Central R&D facility complete and fully operational Launch of Customer Focused Sales Organisation

Acquisition of QH Clutch manufacturing business Magal Engineering becomes strategic supplier to Daimler, Ford and Renault

2007

Production begins at Magal Engg. Tech, Chennai Worldwide recession hits automotive industry 2008

2009 Strong restructuring; Formation of strategic alliance with Midway Products US Acquisition of moulding company Saviplast – Saint Savine, France

2010/11 Launch of single company at Reading UK – Magal AWT Ltd. (Adwest Western Thomson). Start up of significant new programs Launch of Magal Otomotiv Turkey JV Cavo

Implementation of

Magal Lean Manufacturing

Principles

2012 Launch of new company in China; Partnership with Tongrun

Magal Engineering Company History

2008 Sales

781 People | 7 Countries | Global Facilities 11 | £72m (2013 Sales Forecast)

(As of January 2013)

Magal Group Global Locations

Facilities | 1

US + CANADA

Facilities | 3

UK

Facilities | 5

Europe

Facilities | 2

Asia

Magal Engineering Group Capabilities

Cooling Management Modules Push/pull control cables,

light, heavy duty, & Security cables. Park Brake Assemblies Conrods

Pedal Box Assemblies Gear Shift Assemblies Complex Steel Pressings

Hinges

Puncture Management

Magal Group Turnover Projected – 2017

• Recession 2008/9 hits Automotive industry. AP Driveline lost from group • Strategic new business wins increase sales in UK from 2013 • Magal Cavo sales increase as Ford Otosan ramps up new Transit production

Magal Group Sales by Customer

2014 Sales £86m

Magal Group Sales by Division

2014 Sales £86m

Steering 6% Jacks 16%

Parking brakes 16%

Cables 9%

Thermostat & Powertrain Mouldings 30%

Con-Rods 5%

Other 4%

Pedal Boxes 2%

Wheel Winch 12%

Consolidated Group Product Sales

Electronic valve, DC Motor Conventional Thermostat Housing

Development Innovation

New Projects – Industrial Facades

• Magal Facades produces & assembles window systems, cladding and curtain walling for the construction industry

• 2013 Sales turnover £1m (labour only)

• 2014 Sales forecast £2m (labour only)

• Bidding for complete manufacturing & installation projects

• Working with high end developments & materials

• Lean Manufacturing Principles

• Right First Time / Just in Time Philosophy

CUSTOMER ORDER RECEIVED

ACTIONS PAYMENT Terms

• Issue tool maker with order 30% 0 months

• Tools completed with samples 30% 3-5 months

• Tools bye-off at supplier 30% 5-6 months

• Tools delivered and large batches run at our

factory

10% 6-7 months

• Send Quality report with part to Customer

• Customer approval process

• Tools run rate approval (PPAP)

• Invoice customers on approval

• Customer pay tooling 100%

7-8 months

8-10 months

10-12 months

13-14 month

Customer Tooling: Capital Needs Pattern

PRODUCTION LINES AND CAPITAL EQUIPMENT AMORTISED

• Order machines and assembly lines 30% 0 months

• Assembly line completed after receiving parts

from production tools

• Finish assembly lines

30% 6-8

8-10 months

• Run at supplier bye-off (quality, quantity) 30% 10-12 months

• Run rate at our factories

Capital equipment will be amortised in the life

of the project 6-8 years.

10% 12-13 months

All above has to be in place 12 months before start of production. Customer

will have several pre production builds

Customer Capital equipment Needs Pattern

Customer Tooling: Capital Needs Pattern

Example - Customer Timing

Build Purpose Dates Months Timing From

Customer Order

Prototype Build Development Nov-12 0-8 - - -

Cost Agreement PO Release

from Customer Jul-13 9 0

VP Build

Off mould tool

and facilities at

toolmakers

Dec-13 10 - 14 0 - 5

TT Build Full Off Tool In

Plant Jun-14 15 - 20 5 - 11

PP Build

In Plant

Capability and

Capacity - PSW

Sep-14 21 - 23 12 - 14

SOP Start Of

Production Jan-15 24 - 27 15 - 18

Tooling financing options.

• Own cash.

• Short term bank loan 24-30 month.

• Agree payment terms with suppliers to mirror OEM’s payment terms.

• Find another way to finance (SMMT list of options)

Capital finance equipment options.

• Own Cash

• Lease standard equipment (IE presses, cutting machines, robots, etc..)

• Long term bank loans 7-9 years.

• Introduce new funders.

Customer Tooling: Financing