40th Aniversery

...the timeline

40 years is not much – we usually say about a person celebrating his/her birthday.

But looking back we must admit that a lot has happened at KP Komponenter from the beginning in 1969 until now. When my father started the company back in 1969, it was with great risk, not only starting his own business from scratch, but also in a part of Denmark, where very little metal industry was established.

But I am sure that choosing this location, where employees typically are very tenacious and faithful, has been a major strength throughout the years that have passed.

Many of our employees have been with us for many years, some even 20 and 30 years and a handful right from the beginning in 1969. We owe them all our gratitude for their efforts throughout the years. We have experienced a huge development in Technology since the beginning. From the first automatic lathes and turrets, to now fully automatic robotic production cells, which combine several machines in a fully integrated cell. This development is still strong and a great opportunity for KP Komponenter to take part in, having the opportunity to develop an even stronger position in the market.

No matter the oil crisis in the 70’s, melt down in the wind turbine industry in the 80’s, crisis in the bank sector in the early 90’s and the latest worldwide financial crises KP Komponenter has proven it’s strength and robustness. In the future, all our efforts will be to position KP Komponenter the same way onwards.

Enjoy reading!

Martin Krogh Pedersen

2

1973 The first oil crises puts a lot of pressure on Uniterm, and it becomes necessary for K.P. Komponenter to acquire the buildings, and at the same time to expand the area a little.

Poul Krogh Pedersen injects more money into the company and becomes the major shareholder in K.P. Komponenter.

Newspaper clip – “The biggest industrial company in the city keeps developing”

1969

1973

Poul Krogh Pedersen and two partners rent the shopfloor and residential areas from the company Uniterm, who has recently moved out of the buildings.

Investments in new machines are made, to offer the customers the benefits from newest technology, instead of having their own in-house (at that time often old fashioned) machining. From the beginning Uniterm was also a customer for valve products.

K.P. Komponenter, Krogh Pedersens ­Machining Company A/S is a reality.

1975 The first real building expansion is carried out by setting up additional 550 m2.

1969

1975

Newspaper clip – “New industrial company in Spjald”

= 25

= 1.200 m2

$ = 0,6 mio.

3

1980 K.P. Komponenter are by now well ­established as a subcontractor, and differentiates itself significantly from ­competitors by being very advanced in ­using latest technology. Being one of the first in Denmark, KP K ­ omponenter ­introduces computer controlled ­production. Machine programs are stored on computer tapes and can from there quickly be transferred to the machines.

Newspaper clip – “Quick adaptability is the main competitive edge of the subcontractor”

1979

1981

The first CNC Lathe, a SWEDTURN (SW10) is bought.

After having visited MAZAK in Japan, new modern CNClathes and the first milling center are bought.

Newspaper clip – “K.P. Komponenter keeps growing….”

Newspaper clip – “Spjald company has collected a “robot” in Japan – has plenty of work”

4

= 32

= 1.200 m2

$ = 1,2 mio.

1982 An exciting aera takes its beginning for K.P. Komponenter. Together with the inventors of the VESTAS wind turbine, Karl Erik Jorgensen and Henrik Stiesdal, K.P. Komponenter develops a special gearbox for wind turbines a “hub-gearbox”, which starts up in production some years later.

A new daughter company is founded called Advanced Windpower Products (AWP), which participates and wins a local price for bright ideas. The pricemoney is though first paid when the idea is put into production, so the official ceremony is conducted first some years later.

1984-85 The new gearbox is launched and production starts, parallel to the official launch of a new profile and logo for K.P. Komponenter. AWP is taking care of selling the gearbox in Denmark, while the export to USA, Sweden and Germany is handled through a close co-operation with another Danish company called ALTERNAGY (at that time the world’s largest manufacturer of wings for wind turbines). There is a great worldwide interest for the gearbox and the first wind turbines produced by AWP, so already in the end of 1985 the first wind turbines are erected in California. Developing and producing the gearbox, strong technical skills and competences are built up within the company which, in a combination with the constant investments in new machinery, becomes the most important competitive edge for K.P. Komponenter.

Official letter confirming the first price.

A visible proof of its appearance in the wind turbine market, are the towers located on the neighboring site, where AWP had also rented 300 m2 of production area.

Since it was not possible getting the new gearbox tested at the established manufacturers, AWP had to produce a prototype themselves, a 90KW turbine (AWP90), that was set up close by in Spjald. = 45

Newspaper clip – “Expectations to a wind turbine gearbox” = 1.500 m2

$ = 3,85 mio.

5

1987 AWP has great success with the gearbox and still have a genuine production of complete wind turbines. AWP tries to differentiate itself from the competitors by launching a new concept called “The local wind turbine”, meaning that AWP would deliver a few main parts for the turbine together with a set of drawings for the customer having the remaining parts manufactured locally. This concept becomes very popular on the export markets, but in Denmark the good and solid running economy (and subsequent tax-free profit) was a greater success. The production exceeds 3 turbines per month, which are sold for as much as 485.000 Dkr (USD 95.000 at current exchange rate) per turbine.

1990

1994 K.P. Komponenter celebrates its 25th anniversary.

1990 Despite the great success, a major crisis in the wind turbine industry, where also a number of customers go bankrupt, causes that AWP loses its equity and are declared bankrupt. It is also a hard struggle for the mother company, which is re-established in co-operation with local banks.

Newspaper clip – “Considerably foreign interest for the AWP turbine from Spjald” 6

= 55

= 1.500 m2

$ = 5,8 mio.

The re-establishment of K.P. Komponenter creates the opportunity to invest further in buildings and machinery, which makes it possible for KP Komponenter to work their way out of the crises even faster. At the same time Poul Krogh Pedersen buys all the shares in the company and is now the sole owner of K.P. Komponenter. Amongst many other things, another 1.000 m2 are built.

1997

1997 Another building of 800 m2 is erected and more machines are installed.

K.P. Komponenter gets for the first time a credit rating of ‘AAA’.

1996

1998

K.P. Komponenter wins a diploma for being number 60 among the 100 fastest growing companies in Denmark.

Generational change – Helle and Martin Krogh Pedersen together with a capital investor called “Industriudvikling”, take over K.P. Komponenter from Martin’s parents – Lone and Poul Krogh Pedersen.

August: Martin Krogh Pedersen officially takes over as Managing Director.

November: Exhibiting at a fair in Denmark.

Marketing activities are increased being a part of a new growth strategy.

Newspaper clip – “Younger people to secure growth”

= 65

= 3.300 m2

$ = 6,75 mio.

7

1999 October: K.P. Komponenter celebrates 30 years anniversary and the founder Poul Krogh Pedersen’s 60th birthday. K.P. Komponenter now has 6 apprentices and is in actual need of 10 employees. It is starting to get more difficult in getting enough qualified employees.

Newspaper clip – “Components from Spjald are “at work” worldwide”

2000 Employee benefits gets a “new face”, when employees are now offered a computer at home under a Danish tax law possibility. The computers are handed out in April.

August: Preparations for another building of 800 m2 are made and new machines and robots are delivered and installed in the previous new building.

December: Celebrating the finished new building, last day before Christmas and the first 25 years employee anniversary at K.P. Komponenter.

2000 8

= 70

= 3.300 m2

$ = 9,6 mio.

2002 April: Frost is barely away from the ground when the preparation starts for another 1.000 m2 expansion. These facilities will house a preparation department as well as social areas and canteen.

2001 January: A new MAZAK FH8800 being installed, at the same time as the final testing of a newly installed robot cell nears completion.

November: A new Doall C260NC band saw is delivered.

Already before the canteen is finished, it is inaugurated at an employee gathering around a game of the Danish national football team.

K.P. Komponenter was chosen as one of three finalists in the awarding of being “Entrepreneur of the Year�.

2003 April: K.P. Komponenter receives a local Municipality Business Award for exemplary and energetic generational change and business operations.

May: Decision is made to further investment in CNC centers and robots.

November: Again K.P. Komponenter is exhibiting at a fair in Denmark.

2002

= 90

= 5.200 m2

$ = 15,4 mio.

9

2004 Growth compared to the year before exceeds 25% and K.P. Komponenter is once more rated ‘AAA’.

2005

K.P. Komponenter is portrayed through an article written about the company due to the massive investments in automation. The title for the article is “Your colleague is a robot”.

September: 6.000 m2 from the neighboring site is acquired to secure the future growth. Another 12.000 m2 is acquired in 2007.

2005

2005 The objective of being able to compete with low-wage countries through a strong focus on automation turns out to be successful.

It also becomes very clear that it demands highly skilled labor, which is a rare commodity in Western Jutland.

Once again, building people are called in since the requirement for more space for machines and warehouse arises, to support the continued success.

May: Expansion of 200 m2.

Newspaper clip – “Industrial robots beats the Chinese” 10

= 100

= 5.200 m2

$ = 19,25 mio.

Newspaper clip – “Growth in the West”

2005

2006

2005

September: For the first time a contract is signed with a customer moving production back from China. It is an obvious recognition of the continuous focus on automation and efficiency. Yet another portrait of K.P. Komponenter in the article “K.P. Komponenter challenges production in China” December: K.P. Komponenter implements a new management structure, where 7 new team leaders each get responsibility for a group of employees.

Their objective as a co-working team leader is to secure a close integration between the central management and the employees, making sure to monitor that the employee satisfaction and development have the right focus.

2007

2005

2007

December: Completion of an expansion totaling 2.000 m2. Hereof 1.400 m2 for production, additionally 250 m2 for social facilities and canteen and another 350 m2 for a new sawing department.

2.000 m2 of existing buildings modernized for warehouse and preparation department. As an example, the sawing department is moved to these modernized buildings, and the building previously housing the sawing department is refurbished to house the in-house manufacturing of fixtures and clamping systems.

Investments are also made in a selfdeveloped so-called “Jet Cell” consisting of 4 identical MAZAK CNC centers serviced by a robot, and a FMS line with 7 MAZAK CNC centers as well as a number of individual CNC machines.

Newspaper clip – “KP Komponenter challenges production in China” = 170

= 9.500 m2

$ = 54,8 mio.

11

2007 May: Yet another production hall of 2.000 m2 is ready for production along with 500 m2 of office and administration space. 3 new Jet Cells, each consisting of 4 identical MAZAK CNC centers and a vertical working robot, are installed, along with a measuring laboratory with 2 new CMM machines. The more or less constant back log of highly skilled employees and difficulties in attracting employees in general, becomes the starting point of experimenting with alternatives - 12 skilled employees from Poland are employed.

2007

2007 The venture capital fund “Capidea” takes over the majority of the shares in K.P. Komponenter.

The company is now owned by Capidea (51%), Helle and Martin Krogh Pedersen (30%), Industriudvikling (11%) and management (8%).

K.P. Komponenter is awarded the Danish title “Gazelle” for being among the fastest growing companies in Denmark.

12

= 180

= 12.000 m2

$ = 54,8 mio.

2008 Again another production hall of 2.000 m2 is ready for production. A newly developed robot cell is installed having such high precision that a subsequent grinding process can be terminated.

2009

Additional equipment for expanding the capacity is ordered. K.P. Komponenter is again awarded the best possible credit rating (‘AAA’). BUT shortly after, the Global financial crisis also hits Spjald, which immediately stops all current and future projects but one.

2009 February: 50 employees are laid off.

June: Modernizing of an existing production hall is finalized, and a new facility of 1.200 m2 and new equipment for Thermal Deburring, Ultrasonic Cleaning and Honing is ready.

October: During the year, we had to say farewell to around 80 employees, when there seemed to be no end to the global crises.

2008

December: The top management is strengthened by nominating 2 additional directors, and the future management group now consists of Managing Director Martin Krogh Pedersen, Production Director Kim Brødbæk and Commercial Director Carsten Stubkjær Mumm.

= 116

= 15.500 m2

$ = 30,9 mio.

13

Medarbejdere Omsætning (mio.)

Areal (m2)

1969 1973 1975 1979 1980 1985 1987 1990 1997 1998 1999 2 10 25 32 35 45 55 36 55 65 70 0 1,6 3 6 8 20 30 21 35 45 50 500

600 1200 1200 1200 1500 1500 2500 3300 3300 3300

Main figures for K.P. Komponenter during the years:

85 19872010 1990 1997 1998 1999 2000 2002 2003 400 2004 2005 2006 2007 2008 have put 70 the crises behind 45 55The main36customers 55seem to65 80 85 90 100 130 150 180 195 350 and the order intake starts increasing again. Plans for 20 30them 21 35 45 50 60 70 80 100 140 195 285 341 future expansion in Denmark are laid out, as well as plans for

18000 16000 14000

The Sales- and Purchasing departments are strengthened and co-operation is initiated to many new interesting customers and suppliers. An increase in the demand for 18000 turned parts results in investments in new CNC lathes.

16000

Area (m ) Areal (m2)

2010

2008

2000

$ = 52,9 mio.

2010

2008

2006

2004

2002

1999

1997

1987

Revenue (mio. Dkr) Omsætning (mio.)

0 1980

6000

0 1975

Employees Medarbejdere

0 2006

4000

1969

8000

= 15.500 m2

6000

50

2000

= 175

8000

2

4000

14

10000

200

100

12000 10000

12000

250

150

14000

2004

2002

in Europe 4100 and/or USA. 00 1500establishing 2500 production 3300 elsewhere 3300 3300 5200 5200 300 5200 7500 7500 12000 14000

Knowing your past – your roots, gives you the answer to many questions that will arise in the future. The conclusion we can draw from our rich history, is that the “guideline” through the years, that has brought us to where we are today, is the: • Courage to challenge “as is” and thereby create continuous improvements • Courage and ability to constantly invest in the latest technology • Willingness and belief that we thereby can create the decisive competitive advantage In a fruitful mix of Danish entrepreneurial spirit, loyalty, perseverance, professionalism and a good portion of stubbornness, we have been able to create the ‘KP Komponenter’ we all know today. In a way we have been able to develop the “manual” for what will bring us even further in the future.

Therefore we must remember and appreciate to be loyal to this “manual”, and be aware always to transfer these elements, to new foreign sites, where ever in the world these might be.

15

K.P. Komponenter A/S Birkevej 2 DK-6971 Spjald Tel: +45 97 38 16 11 Fax: +45 97 38 10 37 www.kpkomponenter.com