Outline History Communication Financials Past acquisitions Current and planned industrial presence The product ranges Kohler and it’s.

Outlinewww.us.kohler.com

• History

• Communication

• Financials

• Past acquisitions

• Current and planned industrial presence

• The product ranges

• Kohler and it’s competitors

• SWOT

• Strategy

Outline• History• Communication• Financials• Past acquisitions• Current and planned

industrial presence• The product ranges• Kohler and it’s competitors• SWOT• Strategy

Electric kitchen

sink

Toilets wash-basins

of vitreouschina

1926

Completebathroom

setswith

matchingcolours

1927

Kohlerfoundet

1873

Firstenamel

bathtub

1883

One-piecebuilt-in bath-tub

1911

Brassfaucets

1920

Enterselectric

generatormarket

Startsmanufact.faucets +

brassaccessories

1925

1870 1880 1920 19301900

Kohler history in detail: industry + product development

New colours

for plumbingfixtures

1965

„Boldlookof

Kohler“ad theme

1965

Investm.in castiron

product.facilities

1971

100anni-

versary

1973

Acqui.of

SterlingFaucets

1984

Acqui.of 1st

Furnit.Comp.

1986

Salesby

1 m $

1987 1991

Vitreouschinaplantopens

in MEX

1995

JointVenture

inChina

Salesby

2 m $

1996

rapidexpansion

60 70 80 90 00

The 1990ties • Master suite concept• Product design• Innov. toilet and showers• Luxury whirlpool bath

Kohler history in detail: industry + product development

Communication

Form and Function The Bold Lookof Kohler

Art, Inno-vation, Life

Internal andexternal growth

1900 - 1920 1960´s 1990´s

Introduction of functional and technical innovations (bath, kitchen)

Establishing Kohler as a full-line manufacturer of bath products

Concern for aesthetics and manufacturing improvement

The four seasons of Kohler´s brand awakening




1900 - 1920 1960´s 1990´s

Launch of exciting, new plumbing products in vivid accent colors withsignificant advertising campaign titled „THE BOLD LOOK OF KOHLER“

Campaign also solidifies Kohler´s culture and attitude (inside company)

Further lines followed:- Whirlpool baths in an array of shapes and sizes- Big kitchen sinks for big homes, and compact models for small apartments- Lightweight, easy to clean fiberglass shower modules- Faucets with interchangeable handle inserts


The Bold Look of Kohler adv campaign




1900 - 1920 1960´s 1990´s

Kohler answers the trend towards increased luxury with it´s Master Suite Conceptanswers trend towards increased luxury (console tables + bath vanities + bedroom furnishings)

Electronics and other technological improvement as for example: - stylish toilets- faucets- water saving shower heads- innovative showering products and luxury whirlpools

As consumers spend more quality time at home, Kohler continues to meet these needs with a fresh design approach

Decorative fixtures, textured surfaces and expressive colors





1900 - 1920 1960´s 1990´s

In 1984, Kohler starts an expansion program based on: - internal growth with new materials, products and markets- synergistic manufacturing facilities- direct access to new markets.

Currently Kohler encompasses an extensive business worldwide in the field of - plumbing products, cabinetry and tile - under a variety of brands


Kohler

„Improving the level of gracious livingfor each person who is touched by ourproducts and services.“

Mission

Kohler focus on design: • improving the level of gracious living• Stylish, lifestyle-oriented

Kohler point out a high standard of quality and manufacturing know-howthat promotes to be innovative in terms of product design (colours, materials) andaspects of comfort in the bathroom.

Kohler looks back at great advertising campaings• The Bold Look of Kohler

Communication Conclusions

Outline• History

• Financials• Past acquisitions• Current and planned

industrial presence• The product ranges• Kohler and it’s competitors• SWOT• Strategy

Turnover & Income statementExhibit 6b Kohler Co. Projected Income Statements 1998-2002 (in $ thousands, as of December 31)

1998a1999 2000 2001 2002

Net Sales 1.511.000 2.240.528 2.393.187 2.509.100 2.608.385Cost of Sales 1.125.884 1.690.366 1.780.531 1.862.103 1.933.387

Gross Profit 385.116 550.162 612.656 646.997 674.998Gross margin 25% 25% 26% 26% 26%Selling & Administrative Exp. 268.748 411.254 428.161 446.143 460.518Amortization of Intangibles 13.680 12.876 12.876 12.876 12.876

Operating Income after Depreciation 102.688 126.032 171.619 187.978 201.604

Non-operating Income (Expense) -6.299 -10.173 -10.783 -11.430 -12.116Interest Income 2.307 4.569 5.670 7.500 9.932Interest Expense 11.521 14.325 12.987 10.286 8.134

Pretax Income 87.175 106.103 153.519 173.762 191.286EBIT 6% 5% 6% 7% 7%Income Tax Expense 38.585 46.071 66.659 75.448 83.057

Net Income 48.590 60.032 86.860 98.314 108.229EBITA 3% 3% 4% 4% 4%

Source: Company documents: Management Projections Estimated turnover 2005 : 3.1 Billion $Estimated number of employees 32.000

Turnover 1997 by Group

67%

24%

7%2%

Kitchen and Bath Group Power System GroupInterior Group Hospitality and real estate Group

Structure of Business FamiliesC ha irm an and C EO

H e rb V . K oh le r Jr

P re sid e n t K itch en & B a thD a v id K o h le r

K o h le r

K a llis ta

S te rling

A n n S a cks

Ja cob D e la fon

E n g le fie ld

K a ra t

R a d a C o n tro ls

M ira

H yte c

Kitchen & Bath

M cG u ire

B a ker

A n n S a cks

Furniture

R o b e rn

C a n ac

S a n iju ra

A n n S a cks

Cabinetry& Tiles

R e s id e n tia l ge n e ra to rs

M a rin e ge n e ra to rs

In d us tria l g en e ra to rs

M o b ile ge n e ra to rs

E n g in es

R e n ta l se rv ices

G lo b a l P ow e r G ro up

Engines, generator& rental services

H o te ls

G o lf

S pa

Resort, recreationand real estate

K ohler

Outline• History• Financials

• Past acquisitions• Current and planned

industrial presence• The product ranges• Kohler and it’s

competitors• SWOT• Strategy

1985 1993 1994 1995 1996 1998 1999 2000 2001 2002 2004 2005 2006

UK

India

China

New Zealand

France

Thailand

furniture

tiles

csw

baths factory

taps enclosure

showers

plumbing fixtures

kitchen

faucets, baths, whirlpools, lavatories, toilets,showers

*

*tiles

cws

taps

bathfurniturewellness

US

Mexiko

Marocco

Acquisitions 1985-2006

Outline• History• Financials• Past acquisitions

• Current and planned industrial presence

• The product ranges• Kohler and it’s


CSW production located all around the world. Weakness in Europe will be

remedy with the new Russian factory

Continent Country CompanyProduction location(s)

Capacity'000 pcs /yr

Production planned

Reference cost price

Africa / Middle East Morocco Delafon Tangiers 600 6,5 €Asia / Pacific China Shanghai Kohler Foshan, Guangdong Sheng 1.800 7,5 €Asia / Pacific India New factory Baroda - 1.500 7,5 €Asia / Pacific Thailand Karat KAENG-KHOI (Saraburi) 4.000 7,5 €Asia / Pacific Vietnam Karat Song Be Thu Dao Mot, Binh Duong 450 7,5 €E-Europe Russia New factory Moskau - 1.500 9,0 €N-America USA Kohler Brownwood (Texas) 1.900 20,0 €N-America USA Kohler Kohler (Wisconsin) 900 20,0 €N-America USA Kohler Spartanburg, South Carolina 1.200 20,0 €S-America Mexico New factory Ciudad Delicias, Chihuahua - 1.500 9,0 €S-America Mexico Kohler Sanimex Monterrey (Nuevo León) 6.000 9,0 €W-Europe France Delafon BRIVE LA GAILLARDE ( Corrèze, Limousin) 400 23,0 €W-Europe France Delafon SOISSONS (Aisne, Picardie) 800 23,0 €W-Europe Spain Delafon SOBRADIEL (Zaragoza, Aragón) 700 18,0 €Total 14 18.750 4.500 12,0 €

* Reference cost price = direct cost price for SAVAL wall-hang WC in battery casting

Details on some of the non-CSW factories

Africa / Middle East Egypt Jacob Delafon Cairo Taps & mixers (Faucets)Asia China Kohler Beijing Taps & mixers (Faucets)Australia / Pacific New Zealand Englefield Glenfield (Auckland) Acrylic bathtubs and whirlpoolsN-America Canada Canac Thornhill, Ontario Bathroom and kitchen furnitureN-America USA Robern Bristol, Pennsylvania Bathroom furnitureN-America USA Kohler Searcy (Arkansas) Synthetic sinksN-America USA Kohler Spartanburg, South Carolina Fiberglass plumbingW-Europe France Sanijura Champagnole Bathroom furnitureW-Europe France Jacob Delafon Dieuze (Moselle) Synthetic sinks => to be closedW-Europe France Jacob Delafon Noyon (Oise) Cast-iron bathtubs => to be closedW-Europe France Jacob Delafon Troyes (Aube)

W-Europe UK Kohler Mira Cheltenham UK-type electric showersW-Europe UK Daryl Showers Wallasey (Wirral) Shower enclosures

14 production locations for CSWTotal capacities: Europe: 1,9 mln pcs World: 19,0 mln pcs(New plants planned: MX, RU, IN=> >5 mpc)

CSW production located in such a way, that allows a locally presence in our (future)

markets, and at the same time assure an access to low-cost sourcing

Continent Country CompanyAfrica / Middle East Morocco Delafon Tangiers 600 6,5 €Asia / Pacific China Shanghai Kohler Foshan, Guangdong Sheng 1.800 7,5 €Asia / Pacific IndiaAsia / Pacific Thailand Karat KAENG-KHOI (Saraburi) 4.000 7,5 €Asia / Pacific Vietnam Karat Song Be Thu Dao Mot, Binh Duong 450 7,5 €E-Europe RussiaN-America USA Kohler Brownwood (Texas) 1.900 20,0 €N-America USA Kohler Kohler (Wisconsin) 900 20,0 €N-America USA Kohler Spartanburg, South Carolina 1.200 20,0 €S-America MexicoS-America Mexico Kohler Sanimex Monterrey (Nuevo León) 6.000 9,0 €W-Europe France Delafon BRIVE LA GAILLARDE ( Corrèze, Limousin) 400 23,0 €W-Europe France Delafon SOISSONS (Aisne, Picardie) 800 23,0 €

* Reference cost price = direct cost price for SAVAL wall-hang WC in battery casting

Details on some of the non-CSW factoriesContinent Country Company Production location(s) Comments

Africa / Middle East Egypt Jacob Delafon Cairo Taps & mixers (Faucets)Asia China Kohler Beijing Taps & mixers (Faucets)Australia / Pacific New Zealand Englefield Glenfield (Auckland) Acrylic bathtubs and whirlpoolsN-America Canada Canac Thornhill, Ontario Bathroom and kitchen furnitureN-America USA Robern Bristol, Pennsylvania Bathroom furnitureN-America USA Kohler Searcy (Arkansas) Synthetic sinksN-America USA Kohler Spartanburg, South Carolina Fiberglass plumbingW-Europe France Sanijura Champagnole Bathroom furnitureW-Europe France Jacob Delafon Dieuze (Moselle) Synthetic sinks => to be closedW-Europe France Jacob Delafon Noyon (Oise) Cast-iron bathtubs => to be closedW-Europe France Jacob Delafon Troyes (Aube)

W-Europe UK Kohler Mira Cheltenham UK-type electric showersW-Europe UK Daryl Showers Wallasey (Wirral) Shower enclosures

Acrylic bathtubs and whirlpools(but to get out of economy segment)

Non CSW production covers all the product categories that are part of our strategy

Industrial restructuration of non profitable operations in Europe already planned

Outline• History• Financials• Past acquisitions• Current and planned

industrial presence

• The product ranges• Kohler and it’s


Overview Brands / Product fields

TilesTaps & Mixers

FurnituresShower TBathtubsCSW

Info about Karat uncompleted

Core business

1989

1984

1989

1985

2000

2002

2001

1873

H yte c1987

Kitchen & Bath67%

Overview Brands / Price positioning

Each brand is available through the regional Kohler sales manager

Prof.

middle

US - Canada Europe / middle east Asia / pacific

Price

Karat

upper

High end

Brand architectureCore brand

• Kohler

Main brand for worldwide use; covers entire spectrum

Regional brand

• Jacob Delafon (F,E)*• Englefield (AUS)• Karat (THAI)

• Kallista* (US)• Sterling* (US)• Ann Sacks* (US)*Regional brands withcomplete offer

Specialist brand

• Sanijura (F)• Mira (UK)• Daryl (UK)

• Robern (US)

Local brands with special offer

Kohler has long encouraged an ongoing dialogue with the art community. Kohler works with international designers and architects for:

– product development (2006, launch of 3 Artists Editions ‘Top Art Collection’)

– bathrooms arrangement, to show customers how a dream Bath from Kohler could appear (www.kohler.com).

– in the Kohler Design Center in east central Wisconsin, where they offer educational seminar series, design services, showroms with current range and a museum

Kohler wants to be state-of-the-art.

– Acquisitions of innovative companies (hightec, mira, etc.),

– Launch of innovative products, that combine state-of-the-art design with innovative technologies and take care to save water (performance flush technology, urist mirror with faucet, C3 Toilet Seats)

Kohler offers end consumers many ideas and services to arrange their bathroom to a dream space for a higher level of gracious living.

- complete bath offer


- core business tiles & stones


- Showers, enclosures, trays, brassware

Mixing valves, accessories, pumps

- Bathtubs and Showers

Hydrolux® WhirlpoolsHydrolux® Air jet Systems

- Product OverviewToilet suites / Showers / Plain baths / SPA baths / Vanities

* < 100 USD / lavatory

- Product Overview

Bath / Shower moduls and doors / wirlpools, sinks, toilets


industrial presence• The product ranges

• Kohler and it’s competitors

• SWOT• Strategy

As Kohler itself, most of our international competitors cover almost the entire spectrum of bathroom products

Source: Kohler researchLegend: X = minor weight in sales of company

XX = medium weight in sales of companyXXX = great weight in sales of company

Presence of main suppliers:by product group Power base

Bathtubs & trays

Showerenclosures Whirlpools

CeramicSanitaryware Hydrotherapy

Taps &Mixers

Bathroomfurniture

Installationsystems

CeramicTiles

Kohler N-America XX (x) X XXX X XX XX X (x)

American Standard World XX (x) (x) XXX (x) XX (x)

Duravit Europe X (x) XXX (x) XX

Grohe Europe XXX XX

Inax Asia XX X X XXX X X XX XX XX

Masco N-America X XXX XX XX XXX

Roca/Laufen Europe XX(ES/PT)

X X XXX X(ES/PT)

X(ES/PT)

X(ES/PT)

X(ES/PT)

X(ES/PT)

Sanitec Europe XX X X XXX X X

Toto Asia XX X X XXX X XX XX XX X

Villeroy & Boch Europe XX X X XXX X XX X XX

100

200

300

400

500

Europe Asia AmericaDE FR UK/IE IT BNL Sca ES/PT RU Oth

EUR JP CN IN Rest

S+OA US CA MX Rest

S-Am

Size (m€) 278 320 378 350 102 165 253 173 372 475 702 186 >700 1.209 100 124 >240 Villeroy & BochAmerican StandardDuravitEczacibasiGroheInaxJacuzzi brandsKludiKohlerMascoRocaSanitecToto

Legend: Market share (volume): > 15% Market share (volume): >2% - <5%Market share (volume): >5% - <15% Market share (volume): <2%

Ceramics(incl. sinks and

showers)

Global presence of the main competitors in CSW (2004)Kohler : Good presence in America, limited presence in Europe

15,4%

14,2%

11,0%

10,6%

8,3%

6,5%

3,0%

2,9%

2,9%

1,8%

1,4%

0% 2% 4% 6% 8% 10% 12% 14% 16% 18%

American Standard

Kohler

Roca

Sanitec

Toto

Villeroy & Boch

Jacuzzi

Inax

Crane

CISA

Duravit

Market shares CSW - World

Total value as basis:5,2 billion Euro (ASP)

* Due to lacking data inclusive ceramic shower trays and kitchen sinks Source: BSRIA - Consult - Kohler research

* V&B incl. Vitromex, Roca incl. acquisitions 2006

World-wide shares of main suppliers of CSW* - year 2003; coverage ca. 80% of total world market

On the world ranking list, we estimate that we rank #2

21,4%

19,0%

14,7%

10,2%

3,5%

2,7%

2,1%

1,8%

1,6%

0% 5% 10% 15% 20% 25%

Sanitec

American Standard

Roca

Villeroy & Boch

Duravit

Kohler

Eczasibasi

Qualceram Shires

Jacuzzi Brands

Market shares CSW - Europe

Total value as basis:2,2 billion Euro (ASP)

*Ceramic Sanitaryware exclusive ceramic shower trays and kitchen sinksSource: Consult and Kohler research

* Inclusive acquisitions of Roca 2006

Shares of the main supliers of CSW* in Europe - year 2003 -

In Europe however we are still relatively

weak at #6


industrial presence• The product ranges• Kohler and it’s competitors

• SWOT (only Kohler team)

• Strategy

Strengths and WeaknessesSTRENGTHS• Internationality

– Industrial and market presence in 3 continents

• Strong presence in the US market in several bathroom product categories

• Complete offer for the bathroom (and Interior Design competence)– including material

diversification

WEAKNESSES• Limited international

presence of core brand• Weak presence in Europe

– Failure to enter the German market

– No success in transferring ranges from one country to another (Delafon/F vs Kohler/D)

– Specialist brands have only local presence (Mira, Sanijura)

Strengths and WeaknessesSTRENGTHS• Family owned company

(long term objectives and outlook, less short term pressure)

• Experience with acquisitions and investment minded

WEAKNESSES• Complexity of organisation

– factories– brands– countries

Opportunities and Threats

OPPORTUNITIES

• Fast growth of the Asian market will benefit to the Kohler local presence

• Ceramic acquisition or alliance in Europe

THREATS

• Concentration in industry & trade


industrial presence• The product ranges• Kohler and it’s

competitors• SWOT

• Strategy (Current)

Current strategy• Expansion of all kinds

– Geographically (Markets and production facilities)• Asia : China, India, Thailand• America : Mexico and US

– By product and material categories– for sourcing reasons

Current strategy

• Reinforcing of the core Brand and establishing sub-brands to cover all market segments– Enlarge/improve the core brand Kohler

• by taking control of the quality of our distribution in the US (Showroom programs . The Kohler Store) (US)

• Art’s involvement (Product, communication)– Other brands:

• Creation of Kallista and Ann Sacks as a luxury brand (US) • Be present in the lower segment with Sterling (US)• Use specialist brands (Europe/US)

Outline History Communication Financials Past acquisitions Current and planned industrial presence The product ranges Kohler and it’s.

Documents

19201960s1990s kohler

kohler foundet

bold look of kohler

bold look of kohler

product ranges kohler

communication slide

bold look of kohler

internal growth