3. Robert Koch€¦ · Robert L. Koch 1913-1989 Robert L. Koch II 1939 Manfred Koch 1954 Albert C. Koch 1884-1970 Jacob Koch II 1810-1839 Jacob Koch III 1839-1915 Walter Koch 1921
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Robert L. Koch II
Chairman and CEO
KOCH Enterprises, Inc.
RAISING THE BARRAISING THE BARRAISING THE BARRAISING THE BAR
The Americas Families in Business Conference
George Koch
George Koch Tin Shop was
started in 1873 in
Evansville, IN
Johann Philipp Koch1721-1799
George Koch1838-1903
Robert L. Koch1913-1989
Robert L. Koch II1939
Manfred Koch1954
Albert C. Koch1884-1970
Jacob Koch II1810-1839
Jacob Koch III1839-1915
Walter Koch1921
Philipp Koch1805-1889
Johann Jacob Koch1766-1862
Jacob Koch IV1884-1981
1750 Started the Koch Winery in Albig, Germany
1820 Built present home and winery which was the birthplace of George Koch
Named winery the Walter Koch Winery
Continued to operate the Koch Winery
Operates the Walter Koch & Son Winery today
1843 Came to America from Germany
1873 Started the George Koch Tin Shop in Evansville
1904 Company was named George Koch Sons, Inc.
Developed company into world-class business
A Branch of the Koch Family Tree
1999 Company was named Koch Enterprises, Inc.
In 1903 George Koch died and in 1904 the
business was incorporated by
George’s wife and their three sons and as
George Koch Sons
in honor of their father
Albert Louis George W
2nd Generation
Robert L. Koch 1913-1989
Under the leadership of Robert L Koch, George Koch Sons, Inc. grew from annual sales of $1 Million to over $100 Million.
Also he guided the Company in the establishment of alliances with several European Companies
3rd Generation
January 1, 1999, the company was reorganized into a holding company and subsidiaries and
the parent company was named
www.KochEnterprises.com
KOCH Enterprises
• 10th Largest Privately Held Business in Indiana (Indiana Business Magazine)
• 484th in the Top 500 Private Companies in the US (Forbes Magazine)
KOCH Enterprises
Passionately working to improve products and services you depend on everyday!
KOCH Enterprises
Audubon Metals
KOCH Enterprises
Paint and Powder Finishing Systems for Automobiles Bodies and Automobile Components, Home Appliances, Wood and Metal Furniture, Construction and Farm Machinery, Motorcycles, Jet Skis and ATVs.
Special Industrial Ovens and Coating Systems
Noise Reduction Enclosures
Water Resource Recovery Systems
www.Kochllc.com
Complete Powder Finishing System
KOCH Enterprises
Distributes Heating and Air Conditioning
Equipment, and HVAC Parts and Supplies to Dealers,
Contractors and Large End Users
Serving Indiana, Kentucky, Illinois and Missouri
Distributor for 76 years
Tenth Largest HVAC Distributor in the US
www.KochAir.com
KOCH Enterprises
• Largest Independent Provider of Aftermarket Parts a nd Components for Heavy Duty, Off-road Equipment• Hydraulic and Pneumatic Components• Final Drives / Wet Brakes• Axles / Differentials• Transmissions• Driveline Component• Friction Materials
• Industries Served• Mining• Marine• Heavy Manufacturing
www. Brake.com
KOCH Enterprises
Premier Supplier of Adhesives and Sealants to Autom otive and Industry
Business Activity
Structural adhesives, sealants, and cellular rubber that make
cars quieter and ride more comfortable
Customers Served
Automotive OEMs, Tier 1 and Tier 2 Suppliers, Retail Home
Improvement
www.Uniseal.com
KOCH Enterprises
Leading World Supplier of:
Aluminum Air Conditioning Compressor Components for Autos
Aluminum and Magnesium Steering Wheel ArmaturesTorque Converter Stators Fan Clutches
Magnesium Instrument Panels
Fully Machined Aluminum and Magnesium Die Castings
www.Gibbsdc.com
KOCH Enterprises
• Recycles Aluminum from 2,500,000 scrap Automobiles per year
• Purchases Automotive Shredder Residue from Shredder yards as and separates the aluminum with a special process
• Produces 250 million pounds per year of Aluminum Al loys for Die Casting
• Sells 120 container loads of heavy metals to China each month
Audubon Metals LLCwww.AudubonMet.com
KOCH Enterprises
South Western
Communications, Inc.
Systems Integrator for Facilities
� Communications
� Life Safety
� Security Systems
www.SWC.net
Principle Markets
�Healthcare
�Schools
�Detention
KOCH Enterprises
Sales $122 Million Employees 475
Audubon Metals
Sales $346 Million Employees 243
Sales $132 Million Employees 188
Sales $979 Million Employees 2,894
Sales $239 Million Employees 1,534
Sales $61 Million Employees 124
Sales $44 Million Employees 173
Metals Recycling Manufacturing Distribution Contractor s
Sales $53 Million Employees 151
& Smelting
KOCH Enterprises
Why this Assortment of Businesses?
• There is commonality - all of our sales are “company to company,” rather than to consumers.
• Overall financial stability is improved by having businesses that perform in complementary economic cycles.
KOCH Enterprises
Combined Results of Different Businesses in Complementary Economic Cycles
$0
$200
$400
$600
$800
$1,000
$1,200
0 1 2 3 4 5 6
Auto Parts
Years
Millions
KOCH Enterprises
Combined Results of Different Businesses in Complementary Economic Cycles
$0
$200
$400
$600
$800
$1,000
$1,200
0 1 2 3 4 5 6
Auto Parts
Metals
Years
Millions
KOCH Enterprises
Combined Results of Different Businesses in Complementary Economic Cycles
$0
$200
$400
$600
$800
$1,000
$1,200
0 1 2 3 4 5 6
Total Sales
Auto Parts
Metals
Equipment
International
Years
Millions
KOCH Enterprises
Sales CAGR & Actual
0100200300400500600700800900
1,0001,10019
75
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
12% Growth Rate
Sales in thousands
8% Growth Rate
KOCH Enterprises
KOCH Enterprises Consolidated Sales
0100200300400500600700800900
1,00019
92
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Sales in thousands
KOCH Enterprises
Team Membersas of year end
0
500
1,000
1,500
2,000
2,500
3,000
3,500
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
KOCH Enterprises
Sales per Team Memberat year end
$0
$50
$100
$150
$200
$250
$300
$350
19…
19…
19…
19…
19…
19…
19…
19…
20…
20…
20…
20…
20…
20…
20…
20…
20…
20…
20…
20…
Thousands
KOCH Enterprises
KOCH Enterprises % of Foreign Sales
0%
5%
10%
15%
20%
25%
30%
35%19
97
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
KOCH Enterprises
KOCH Enterprises Timeline
GKS produces toy tin horns
1914
Son Albert named President, Louis VP
and General Mgr. and George W Treasurer
2nd Generation
1906
GKS built oven to bake paint on toy
horns
1917
Company incorporated as
George Koch Sons, Inc.
1904
George Koch died. His wife Mary continued the
business
1903
George Koch Tin Shop was started
1st Generation
1873
First outside director added to
Board
1964
Robert L Koch becomes 3 rd
President3rd Generation
1962
Louis Koch starts Santa
Claus Land, first theme park in US
1949
GKS makes ventilation
systems for LST Ships
1942
GKS becomes Carrier Air
Conditioning distributor
1936
Robert L Koch II becomes 4 th
President4th Generation
1982
KOCH Enterprises
KOCH Enterprises Timeline
Koch Enterprises becomes holding
company
1999
St. Louis Carrier distributor was
acquired
1997
Gibbs-Brazil acquired
2000
Gibbs-Hungary begins production
2003
KEI buys DJJ interest in Audubon Metals
2004
Gibbs-Dalian begins production in China.
2005
Indianapolis and Louisville Carrier distributors were
acquired
1994
GKS forms JV with Page to form Page-
Koch Europe in England
1990
Koch Originals spun-off to LJ Koch Jr.
Family
1988
Brake Supply was acquired
1986
Uniseal was acquired.
Santa Claus land spun-off to Bill Koch
family
1984
Joint venture with DJJ to form Audubon
Metals
1996
KOCH Enterprises
Koch Enterprises Timeline
Uniseal acquires part of Dow Automotive
2008
South Western Communications acquired by KEI
2006
Brake Supply acquires Downard
Hydraulics
SWC acquires Richardson
Technology, Atlanta
2009
Audubon Metals add Rotary Furnace
2010
Begins operations in Hungary and India
Kevin Koch Elected President of KEI
5th Generation
2011
Transition to 5 th
Generation Management -
Ownership
2012
KOCH Enterprises
Abstract George Koch Family Tree
Robert Koch II1939
James Muehlbauer1940
George Koch1838-1903
Mary Schwink1850-1939
Louis Koch1882-1979
George W Koch1877-1968
Mayme Koch1888-1970
Albert Koch1884-1970
Jennifer Koch1975
David Koch1965
Kevin Koch1967
Steve Church1969
Chris Slade1974
Brad Muehlbauer1971
Glen Muehlbauer1974
Josh Gilberg1976
William Koch1915-2001
Malcolm Koch1904-1981
Ashburn Koch1907-1959
L J Koch Jr1924-1999
Robert Koch1913-1989
KOCH Enterprises
• Integrity
• Respect for People
• Customer Focus
• Continuous Improvement
• Community Involvement
Koch Enterprises Core Values
KOCH Enterprises
KOCH Management Practices
• Hire the best person possible for the job
• Set High Expectations, Stretch Goals
• Remove the barriers and road blocks to success
• Provide regular Feedback and Coaching
• Continue to Train and Educate
• Match compensation plan with company objectives for win-win
KOCH Enterprises
• KOCH Enterprises is a closely-held, Koch family-owned holding company that manages a diversified portfolio of companies with low debt and exceptional financial stability.
• Each company operates autonomously with responsibility for strategy, operations and profitability.
Vision
• We seek integrity in all interactions and we are committed to the highest level of ethical conduct wherever we operate.
• Each company strives to be best in class and embrace the Core Values of KEI.
KOCH Enterprises
Vision - continued• KEI manages the risk of the portfolio and controls
capital investments that are made by the individual companies
• KEI provides corporate functions that can be done with enhanced efficiency.
• KEI provides total shareholder return competitive with the S&P 500.
• Total company sales will be over $1 billion USD by 2014. Our longer-term goal is $2 billion USD in sales by 2025 through organic growth, global expansion and acquisition.
KOCH Enterprises
KOCH Enterprises Philosophies
• Shares holdings are limited to descendants of George Koch, their spouses or their trusts.
• Expectations for each subsidiary are a 6% YOY NOPAT Growth and 10% ROIC.
• Base compensation is at the market median with superior performance raising compensation to the top quartile.
• Total compensation includes base pay, annual incentive and a long term incentive.
• Overall governance is provided by a board of directors consisting of key outside members with needed skill sets.
• Centralized functions are limited only to only those that can be done much more effectively.
KOCH Enterprises
KOCH Philosophies - continued
• There are policies and procedures for relatives who have a desire to join the business.
• Succession and estate planning begin before the next generation is born.
• KEI makes a market in its stock for family members who want to sell their shares at the price of the valuation.
• KEI obtains an annual, independent outside valuation of the company.
• The company maintains the Koch Family Website with the latest family news and contact information.
• Family members in the company serve on the Koch Foundation.
KOCH Enterprises
100
81
73
104
147
100
63
80
92 94
60
70
80
90
100
110
120
130
140
150
2007 2008 2009 2010 2011
Cumulative total shareholder return on Koch Enterprises, Inc. stock with the cumulative total
shareholder return on the Standard & Poor's 500 Sto ck Index, assuming an investment of $100 in 2007
Koch Enterprises, Inc. S&P 500
KOCH Enterprises
KEI (incl. div.)S&P 500 (incl. div.)
Last 3 years 24.5% 14.5%
Last 5 years 14.4% 2.4%
Last 10 years 9.6% 5.0%
Last 15 years 8.5% 7.5%
Average KEI Shareholder Return
KOCH Enterprises
Koch Foundation Grant Recipient
KOCH Enterprises
Koch Foundation Grant Recipient
KOCH Enterprises
Indiana’s 1st Charter High School
Indiana Governor Mitch Daniels
Koch Foundation Grant Recipient
KOCH Enterprises
National Recognition
•Siemens Advanced Placement Award for Math & Science 2009
•U.S. News & World Report - America’s Best High Schools2007 - #86 (Ranked #10 Best Charter School in the US)2008 - #682009 - #53
•Newsweek - Top Public High Schools in the U.S.2006 - #542007 - #2652008 - #99 (Ranked #10 Best Charter School in the US)2009 - #272010 - #72011 - #7
Washington Post - Top Public Schools in the US2011 - #8 (Ranked #1 in Midwest and #3 Best Charter School in th e US)
The Washington PostThe Washington PostThe Washington PostThe Washington Post
KOCH Enterprises
Indiana Governor Mitch DanielsIndiana Governor Mitch Daniels
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