Advances in technology, specifically inverter technology, will be necessary in India

1. Advances in technology, specifically inverter technology, will be necessary in India • Given their limited access to such technology, the efficiency of this technology, and the high cost of electricity in India. • This provides a huge opportunity for Lincoln Electric • Capitalize on its previous technological achievements in a new market • Developing newer technologies for more developed markets. • Reasons for the level of expansion in India’s market growth: • The projected level of governmental infrastructure projects • The development of several thousand miles of new oil and gas pipeline, • these infrastructure improvements encourage further build-out. • The Indian market will be highly profitable through at least 2050

2. Ador Welding Ltd. • The company has shifted some production to Silvassa • a government-created tax-free zone, resulting in tax savings • Concentrated production realized economies of scale • In July 2006, analysts valuation of ADOR: • Publicly traded shares were valued at 10.9x FY07 estimated net earnings per share, • EBITDA per share was predicted at a CAGR of 29% • Net earnings per share to grow at a CAGR of 23% over the next two years.

3. ESAB India • Over $50 million in sales in 2005. • 18% operating margin in 2004 • Newly Restructured due to a poorly executed acquisition strategy • New $4.6 million, 50,000 square foot, greenfield manufacturing plant

4. Smaller Competitors • 55% of the market is small local operations • D & H Sécheron • $3.5 million in sales in 2005 • AnandArc • Manufactures fullrange of welding consumables • Claims that it produces the highest-quality electrodes in India

5. Access to Outside Capital • India market booming and credit is readily accessible. • Any significant welding acquisition would likely require paying an acquisition premium greater than Lincoln Electric had been used to paying in the past • Rates for commercial loans were 2% below MIBOR (10.5%)

6. Lincoln Electric

7. Product Mix • Lincoln Electric currently: • solves customers’ process problems with expertise • improve process productivity with its ability • one integrated package • combine both equipment and consumables development needs • Physical goods are selling well • Consummable makes up a significant proportion of the LE portfolio • Equipment developed in last 5 years makes up 45% of equipment sales • Most equipment is sold in developed, steady-state markets

8. Regional Performance

9. Tech Development Strengths • Technological innovation allows the company to earn a price premium for many of its products. • Industry leader in new market introductions and quality performance. • The most aggressive, comprehensive, and successful R&D program in the welding industry

10. Operations Strengths • Efficiency • Solutions oriented • Supply chain and FANUC Robotics • Economies of Scale and Scope realized in Welding Industry Weaknesses • Maintaining operational efficiency internationally • Incompatible power sources for International markets • Logistical hurdles • Equipment ships from Cleveland, Ohio

11. Tech Development • Known as “The Welding Experts,” vs. its leading competitors who chose to diversify their resources far away from welding. • In 2004 began building regional engineering development centers worldwide.

12. Costumer Relations Strengths • Product support and guarantees, allows the company to earn a price premium for many of its products. • Customer support • Training • Consultation • Guaranteed Cost Reduction Program Weaknesses • Geographical distance; logistics

13. Company Data • Domestic (US market)Reliance • US market makes up 60% of Lincoln Electric’s Portfolio • US market growth is slow, at 2% per year • Need to position in grow • Extensive resources required • Human capital • Manufacturing

14. Division of management responsibilityand degree of managementindependence • Attempts by parent companies to micromanage an enterprise that may be thousands of miles away are doomed to failure. • A better strategy is for them to set up clear operational parameters and then let the venture’s management succeed or fail on its own.

15. Ownership and control problems • Product line disputes • Material and component sourcing • Technology utilization • Cultural problems

16. Structure and Strategy

17. Culture Strengths • Industry-leading productivity advancesthrough innovative human resource and incentive systems. • stock ownership • incentive bonuses via merit ratings • Employee Advisory Board • employee suggestion system

18. Culture • annuities for retired employees • group life insurance. • No lay-off policy • The entrepreneurial spirit • Piecework • Work days • Merit ratings • Trusting relationships

19. Culture Weaknesses • Synergies of acquisitions • Incentive and bonuses