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Kendrion N.V.

General Meeting of Shareholders

Wednesday 7 April 2010

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Agenda 7 April 2010

1. Kendrion as a focused company

2. Highlights 2009

3. Key figures 2009

4. Acquisition magneta GmbH & Co. KG en acquisition strategy

5. Review of the business units

6. Financial position

7. Corporate governance

8. Priorities and prospects

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1. Kendrion as a focused company

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Kendrion as a focused company

- As from beginning of 2009

- 4 market-focused business units

- Risks distributed between a large number of industrial markets and customers

=> N.B. New design Annual Report

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Organisation

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Kendrion committed to being a high-performer in sel ected business units

MissionMission StrategyStrategy ObjectivesObjectives

Organic Growth > 10%

ROI > 17.5%

Organic Growth > 10%

ROI > 17.5%

To develop leading positions in business-to-business niche

markets to reach geographical spread

To create operational and commercial synergy between

companies and each business unit

To achieve efficiency improvements at the

companies

To develop leading positions in business-to-business niche

markets to reach geographical spread

To create operational and commercial synergy between

companies and each business unit

To achieve efficiency improvements at the

companies

To develop business units that have strong international

market positions in selected business-to-business niche

markets and are market leader whenever possible

To develop business units that have strong international

market positions in selected business-to-business niche

markets and are market leader whenever possible

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Breakdown of Kendrion's revenue

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Kendrion's strategy

- Clear profile as an international, high-tech and rapidly growing company

- Major growth targets (EUR 350 million revenue in 2 to 3 years)

- Stronger growth outside Europe (USA, China, India)

- Targeted acquisitions, in particular in industrial operations

- Financially strong

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2. Highlights of 2009

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Highlights of 2009

- Realisation of a focused company with an explicit profile

- HY1: 36% fall in revenue due to economic crisis

- 1 April 2009: introduction of the Springtime Plan- Reduction of jobs by > 300- Provision of EUR 8.5 million- Annual savings of EUR 20 million

- HY2: return to cautious growth in revenue- New projects at Passenger Car Systems- Far East for Commercial Vehicle Systems- Stable situation at Industrial Magnetic Systems and Industrial Drive Systems

- Improving results in each quarter (market, costs)

- Free cash flow in HY2: EUR 8 million

- Increased attention to sales and innovation

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Enhanced attention to sales and innovation

- Sales project: “Beat the Competition”

- Innovation project:

- Goal: to become even more innovative and convey the company's innovative strength

more powerfully

- Innovation Calendar (Inspiration Day, Innovation Day, Dr. Wilhelm Binder Day)

- External Innovation Board (5 members)

- Innovation Managers at each business unit

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3. Key figures 2009

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Key figures 2009

Q4 2009 Q4 2008

Revenue 1 40.4 44.0EBITA from ordinary activities 1 2.4 1.2

Net profit 1, 4 1.8 0.2

2009 2008

Revenue 1 149.2 204.2

EBITA from ordinary activities 1,2 5.7 15.6Net profit 3, 4 4.0 8.0

1 = Only electromagnetic activities

2 = Excluding provision plan Springtime and effects disposal Vink

3 = Comparative (electromagnetic) activities and for 2009 including effects disposal Vink and Springtime

4 = 2008 normalised

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Notes to key figures (1)

- Revenue in Q1: -34%

- Revenue in Q2: -38% (Q2 versus Q1: -7%)

- Revenue in Q3: -24% (Q3 versus Q2: +16%)

- Revenue in Q4: -8% (Q4 versus Q3: +4%)

- Whole of 2009: -27%

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Notes to key figures (2)

- Staff costs Q4: -27% (Q3: -22%)

- Other costs business units Q4: -20% (Q3: -37%)

- Major reduction of stocks (2009: -25%)

- Normalised net profit in Q4 2009: EUR 1.2 million

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Notes to key figures (3)

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4. Acquisition magneta GmbH & Co. KG

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Acquisition magneta GmbH & Co. KG

- Niche player, family owned

- Takeover per 25 February 2010

- Specialised in small electromagnetic brakes and clutch systems

- Markets: cash dispensers, transportation systems, automotive

- Part of Industrial Drive Systems

- Turnover approximately EUR 9 million with 40 employees

- Direct contribution to earnings per share

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Acquisition strategy (1)

- Kendrion is aiming for leadership in its current activities

- This requires:- Strong engineering and production basis in West-European home markets- Low-cost facilities (Czech Republic, Romania)- Footholds outside Europe (particularly US and China)

- No acquisitions sought in Passenger Car Systems(growing organically to EUR 100 million in 2 to 3 years)

- In other 3 business units: aim for EUR 30-50 million in acquisitions per business unit

- Target: revenue of EUR 350 million by the end of 2012(EUR 220-240 million on an organic basis, around EUR 100 million from acquisitions)

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Acquisition strategy (2)

Acquisition criteria

- Good match with existing activities, potential for further organic growth

- Strong operating result

- Sustainable competitive advantage (know-how, customer base and innovative)

- Contribution to wider geographical spread

- Potential for achieving benefits of scale (production, purchasing, marketing, logistics)

- Positive contribution to earnings per share

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Acquisition strategy (3)

Financing, assumptions:

- Price estimate approximately 5-7x EBIT

- Financing (taking account of dividend) by means of:- Free cash flow- Increase in debt- New equity

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5a. Review of the business units

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General

- Global player with activities in Germany, Switzerland, Austria, China, USA andrepresentative offices in Italy, France, etc.

- Operations: electromagnetic components and systems for industrial applications- Focus markets: mechanical engineering, energy and medical sectors- Highly innovative, customised solutions- Project business (70%) and standard products (30%)- Competitors: many (usually smaller) niche players in Germany, Italy and the USA

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2009

- HY1, 2009: approximately 22% decline in revenue, trough reached in the summer months- Major reduction of costs (staff costs -30%)- Large reduction of stock levels in the chain: peaks in the order entry- Upward trend evident: increase in revenue, in particular in the last months

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Customers

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Products

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Products

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5b. Review of the business units

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General

- Operations: electromagnetic brake and clutch systems for industrial drive market- Factory in Germany, international sales via UK sales office- World market leader in permanent magnetic brake systems- Large amount of project business (80% of revenue), as well as services business

(20% of revenue)- Innovative business unit, many new products (wind energy, ski lifts)- Competitors: limited number of players with revenue of between

EUR 10 and EUR 50 million- Forward integration feasible

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2009

- Operations under great pressure in 2009, due to slump in mechanical engineering market- Approximately 35% fall in revenue in 2009, trough reached in the summer months- Major reduction of costs (staff costs in Q4 -30%)- Upward trend apparent

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Customers

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Products

Industrial robots

Cranes

Brakes for hazardous locations Elevators

Permanent magnet brakes Electromagnetic spring appli ed brakesElectromagnetic clutches

Electronic accessories

Industrial robots

MedicalapplicationsMachine tools

Cranes

Automatic Door Drives

Brakes for hazardous locations Elevators High Power Brakes

and Magnets

Brake-Motor Drives

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5c. Review of the business units

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General

- Operations: electromagnetic components and systems for the automotive industry- Factories in Germany, Austria, Czech Republic, Romania and China- Majority of sales to European OEM customers (Daimler, Volkswagen, PSA)- Focus on energy savings, safety and comfort- Powerful position acquired with high-quality electromagnetic valves for

common rail technology- Existing know-how expandable to other markets (off-road, trucks)- Numerous new projects in the years ahead, acquisitions are consequently not a priority

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2009

- Substantial decline in revenue in HY1 (36%), due to crisis in the automotive industry- HY2 considerable improvement with decrease of 9%- Major reduction of costs (staff costs in Q4 -20%)- Strong improvement in production efficiency- China: many developments: major expansions by first-line suppliers- Rapid growth forecast in coming years due to new products- Limited investments in 2010

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Customers

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ProductsCommon Rail injection systems

Pressure Control Valve for Common Rail-Diesel injection (PCV)

Volume Control Valve for Common Rail-Diesel injection (VCV)

High Pressure Valve for Common Rail-Diesel injection (HPV)

Transmissions

2/2 Directional Solenoid Valve

3/2 Directional Hydraulic Valve for Automatic Transmission

Pressure Control Valve for Automatic Transmission

Steering

Pressure Control Valve for Steering

Headlights

Linear Solenoid (Bi-Xenon)

Solenoid with circuit board (Bi-Xenon)

Rear Hatch

Bi-stable permanent Solenoid Brake

Interlocks

Linear Solenoid (Shift lock)

Linear Solenoid (Key lock)

Chassis

Proportional Solenoid (Shock Absorber)

Differential Gear

Electromagnetic Brake

Differential lock

Motor Management

3/2 Directional Pneumatic Valve (EUV)

2/2 Directional Pneumatic Valve

Camshaft Solenoid (VCT)

Solenoid for Slide Valve (Ø28)

Fan clutch / Visco clutch

2/2 Shift Valve for Motor Oil Control

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Product range

Headlights regulation

Transmission

Differential gear

Steering

Hatchback actuation

Motor management

Gear shifts

Chassis

Common rail injection systems

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Mobile- and Standard Hydraulic

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5d. Review of the business units

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General

- Operations: components and complete cooling systems for buses, trucks and special vehicles

- Global leader in electromagnetic cooling systems for luxury buses- Offices in Germany, USA, Mexico, Brazil and China- USPs: energy savings and comfort- Increasingly developing into a system supplier- Outstanding performance in recent years, innovative- Emphasis on new markets (India, Eastern Europe)- Services business (approximately 50% of revenue) constitutes an important basis

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2009

- Substantial decline in revenue in HY1 (-41%), subsequent better (HY2 -13%)- Slow recovery in HY2, increasing order entry- Large reduction of costs (staff costs in Q4 -25%)- Many sales initiatives (India, USA, Eastern Europe, truck market)- Upward trend clearly evident

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Customers

EvoBus

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Kendrion LINNIG branches

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Kendrion LINNIG's main product groups

Motor Cooling Air Conditioning Engine Mounted Products

• Electromagnetic Fan Clutch • Angle Gear Box• Electrical Fan Drive• Control Units

• Electromagnetic Compressor Clutch• Tensioner Pulley• Deflection Pulley• Torsional Vibration Damper

Mechanical Engineering Auxiliary Units Fire-prevention Technology

• Electromagnetic Clutch • Electromagnetic Clutch• Pneumatic Clutch• Hydraulic Clutch • Eddy Current Brake

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6. Financial position

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Financial position

- Strong balance sheet

- Solvency > 60%

- Bank debts of EUR 14 million per ultimo 2009

- Credit facility of EUR 50 million

- No dividend

- No news about EC fine

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7. Corporate governance

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Corporate Governance (1)

- Kendrion outlines its corporate governance structure in its annual report every year and presents significant changes to the General Meeting of Shareholders

- Corporate Governance Code changed as of 1 January 2009:

• Executive Board- CSR- Transparency risks and management systems: "in control"- Response time / rules of conduct for take-over situations

• Supervisory Board- CSR- Diversity- Appropriate, straightforward and transparent remuneration policy: intervention by Supervisory Board possible

• General Meeting of Shareholders- Conduct of Meeting- Provision of information

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Corporate Governance (2)

- Kendrion endorses background to changes in Corporate Governance Code

- No material changes in corporate governance structure in 2009, apart from appointingfourth member of Supervisory Board and instituting Audit Committee and RemunerationCommittee from 1 July 2009

- Amended Code implemented in full by Kendrion

- Examples:

- Corporate social responsibility becoming increasingly important

- Outline of policy for bilateral contact with shareholders published

- Diversity target included in Supervisory Board rules

- Straightforward and transparent remuneration policy and report

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Corporate Governance (3)

- Corporate Governance Statement included in annual report and on website

- Corporate Governance Statement encompasses:

- Description of rights and obligations of General Meeting of Shareholders, Supervisory Board and Executive Board

- Account of compliance with Corporate Governance Code, including explanation of departures

- Description of operation of internal risk management system in connection with financial reporting

- Departures from Corporate Governance Code unchanged in 2009

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8. Priorities and prospects

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Priorities 2010

- Costs and cash

- Focus on “green” (energy savings, comfort, sustainability)

- Sales (“Beat the Competition”)

- Innovation

- ERP project

- China and USA

- Activities in India

- Romania: low-cost facility

- Banks / Financing

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ERP-project

- Current ERP application (2000) outdated and support expires at the end of 2012

- Selection of new ERP system

- Maximise standardisation throughout the group

- Use the latest technological possibilities

- Special focus on solutions for smaller offices

- Careful preparation, project management and IT governance in co-operation with partners

- Approval of Supervisory Board at significant junctures in decision-making

- Estimated project duration 2 years

- Estimated investment (fees, licences, etc.) EUR 5 million, most of which in 2011

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Prospects

- Good start in 2010

- Growth forecast, in particular, for Passenger Car Systems and Commercial Vehicle Systems

- Now also increase of revenue at industrial activities

- Larger movements through destocking at customers in 2009

- Achievement of target of 10% organic growth in revenue forecast

- Investments lower than level of depreciation

- Strong financial position

- No specific profit forecast

We magnetise the world!

www.kendrion.com