India is an important market for TTS due to its large and growing population, economy, and middle class. With over 1.2 billion people and a fast-growing economy, India has one of the largest consumer markets in the world. Its middle class is also expanding rapidly and expected to reach over 300 million households by 2030. Key industries in India like automotive and construction present opportunities for TTS's business segments in tools, equipment, and building solutions. The power tools market in particular is projected to grow at 9% annually through 2020, making India an attractive market. Overall, India's size, growth rates, and trends in urbanization and consumer demand make it a strategic market for TTS.

1. Importance of India for TTS

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India
What is it well known for?

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EU-India Comparison
In 1995 India was as big as the European Union
EU
28 Member Countries
4 million km²
0.5 billion residents
23 official languages
India
28 States and 7 Union
Territories
3 million km²
1.2 billion residents
23 official languages

4. www.tooltechnicsystems.comPage 4| Importance of India for TTS
Why is India imperative?
Three reasons why every business strategy
should contain India
• Relevant Premium Segment
• Fast growing Middle Class
Attractive
Market
INDIA
Advantage
Cost Innovation
Attractive cost level
for sourcing,
production, R&D
Emerging global
R&D Hub
(Simplicity &
Design to cost)

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Attractive Market
Clearly segmented market, premium niche
with addressable and attractive size
Market Pyramid - Characteristics
Addressable Premium Segment
Attractive Middle Market

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Youngest population in the world and very strong
macro-economic factors are the key drives for the
robust domestic market
Population in million
1,600
1,400
1,200
1,000
800
600
1,184
400
200
0
+1%
2030
1,533
2020
1,362
2010
Real GDP in US$ bn
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2010
2,000
0
+11%
2030
6,339
15,186
2020
4,639
6,192
3,317
1,729
GermanyIndia
Source: Economist Intelligence Unit, * Purchasing Power Parity
830
3,000
0
+10%
2030
1,000
5,660
2020
2,000
2,520
2010
4,000
6,000
Private Consumption per Head in US$
5,000
10
8
6
3
3
4
8
+3%
0
203020202010
2
4
Share of World GDP (% at PPP*)
6
10

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Urbanization is happening with great pace and is
one key driver for the strong domestic market
Source: McKinsey

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Indian Middle Class
Indian consumer market to reach top 3 slot by
2040
*Middle Class: Income between 15,000 - 28,000 EUR (2009-10) Source: Equitymaster
• Poverty in India is going be reduced
to 1/8th of 2005 level by 2015
• India would give up its top position
by 2015 according to UNISCEF’s
estimates
• Advantage (India) in the age-
distribution is strong base for the
future consumption
• BRC will be only second to India by
2035
Rise of the middle class*

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Dream of a middle class Indian
House + Car
12
5
50
10
50
40
30
20
10
0
+8%
20302010
Demand for housing in urban regions in million units
DemandSupplySource: TTS Analysis, Economist Intelligence Unit, McKinsey Global Institute
New passenger car registration in T Units
5,000
4,000
3,000
2,000
1,000
0
+14%
2015
4,516
3,395
2010
2,297
2,916
2006
1,380
3,468
Germany India

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TTS business segments and their relevance in
the Indian market

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TTS relevant business segments
India is set to be world’s 3rd biggest Automotive
market by 2015
Source: Economist Intelligence Unit, TTS analysis
7%
3%
VW, BMW, Mercedez
Rest
Maruti Suzuki
30%
Hyundai Motors
20%
Tata Motors
40%
New passenger car registrations in T Units
OEM’s will be the key to the
automotive market!
26,896
16,693
20,000
5,000
25,000
30,000
4,220
15,000
4,516
10,000
0
2015
3,395
US
Japan China
Germany
India
Passenger car market share in %, 2011
Potential of Indian market to reach
revenues of $80-100 billion

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TTS relevant business segments
House construction in India purely based on brick
67%
43%
0%
33%
100%
+23%
2010
57%
2000
Construction Costs of an avg. house
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
Source: Construction Industry Development Council (CIDC)
Labor costs have grown significantly
in the past 10 years and hence pave
way for efficient working methods!
Labor CostMaterial

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Market potential - India
Power tools market is expected to grow at 9%
CAGR till 2020
6%
15%
Dewalt
Makita
25%
Bosch
35%
Hilti
5%
3%
B&D
Dynabrade 2%
9%
Metabo
Others
• Bosch is the major player in the
market with 45 BSS*’s (Festool
World) in India
• Other major competitors are Makita, Hilti,
DeWalt and Dynabrade
Power tools market share split in %, 2011Total power tools market in India, in Million $
• Investments in construction and infrastructure
projects are the major drivers for the
significant market growth
• Third biggest power tool market in Asia-Pacific
• Second fast growing market after China
Source: Freedonia, TTS analysis ; *Bosch system specialist - spread over app. 45 sq.m
360
280
220
195
140
600
550
500
450
400
350
250
50
+9%
400
600
2015 2020
300
200
0
2010
100
150
260
20052000
170
100
India Turkey

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Back Up

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More than 300 million household will join the
Indian middle class
222
50
34
12
2 1
2000
189
64
31
4
1 0100%
Desprived
<90
Aspirers
90-200
Seekers
200-500
Strivers
200-1,000
Globals
>1,000
2030
322
15
32
29
17
7
2020
273
26
40
25
6
3
2008
Income segment
Rupees thousand
All India households by income bracket, 2000-30
%, million household, 2000 prices
Source: India Urbanization Econometric Model, McKinsey Global Institute