Maynard Akkerman CEO/President Akkerman

04/22/15

Presentation Outline • Company Overview • Infrastructure Synopsis • Akkerman Equipment Systems • Marketing Plan Summary

– Target Audiences – Marketing Objectives & Goals

• Situation Analysis • Strategies & Tactics to Increase Market Share • Evaluation Metrics • Results To Date • Questions

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Company Overview • Akkerman, a recognized

worldwide competitor, manufacturers a full range of pipe jacking and tunneling equipment

• Sales and service offered domestically and internationally

• Founded in 1973 by D.H. Akkerman

• Privately held, family-owned and operated currently transitioning to its third generation

• Equipment is engineered and manufactured at its corporate headquarters in southern MN in a 65,000 sq. ft. facility

• Currently have 14 equipment representative agreements around the world

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Company Overview • Vision Statement: Goal driven

for customer success • Mission Statement: We develop,

manufacture, market and support quality equipment that accurately installs a variety of underground infrastructure

• Core Values: • We provide high quality

engineered products to our customers at competitive pricing

• We provide a safe and secure workplace for our employees

• We honor our warranty • We solicit input from our

employees, customers and suppliers

• We are committed to meet and exceed customer expectations with integrity, diligence and without compromise

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Infrastructure Synopsis

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Infrastructure Synopsis

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Infrastructure Synopsis

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Infrastructure Synopsis

Open Trench Pipe Installation Trenchless Installation

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Akkerman Equipment Systems

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Akkerman Equipment Systems Pipe Jacking & Tunneling Systems • First manufactured in 1973 • Installs 48”-168” OD pipe • Ideal in ground conditions where

personnel entry is permitted • TBMs have a rotating drum and

a cutter head appropriate for project soil conditions

• Excavator shields extract spoil with a digging type machine at the face of the bore

• Passive laser guided and manually controlled for accuracy

• Both systems use conveyors and haul units for soil removal 04/22/15 10

Akkerman Equipment Systems

Microtunneling Systems • First manufactured in 1995 • Installs pipe from 30”-94.5” OD • Typically used in ground

conditions below the water table; personnel entry prohibited

• Operated from a control console in a container alongside shaft (see photo)

• Minimizes ground surface settlement

• Active laser target system • Soil cuttings are mixed with slurry

and circulated to and from a separation plant in a closed circuit

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Akkerman Equipment Systems Guided Boring Machine (GBM) Systems • First manufactured in 2001 • Installs 4”-48” OD pipe with

grade and alignment precision • For use in various ground

conditions • Lots of versatility with many

ancillary tooling options to maximize the customer’s investment

• Active theodolite guidance system

• Soil cuttings are sent to the shaft for removal by way of augers

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Akkerman Equipment Systems Earth Pressure Balance Machine (EPBM) Systems • First manufactured in 2005 • Installs pipe from 102”+ OD • EPBMs monitor and maintain

earth pressures by balancing the machine advancement and excavation rates to minimize ground settlement

• Soil cuttings are mixed with foam slurry and removed through conveyors and a haul unit system

• Each EPBM system is custom configured for project specifications

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Marketing Plan Summary • Term Fiscal Year 2012 – 2015 (October 1 – September 30) • Focus on regions for domestic and international sales

emphasis in North America, Mexico, Columbia, Brazil, Australia and the United Kingdom

• Marketing Plan is based only on the GBM equipment line due to: – Versatile nature of equipment, conducive to multiple project

applications in a variety of geology – Minimizes social impacts in densely populated regions – GBM equipment purchase establishes brand trust and

creates a pathway for additional Akkerman equipment acquisitions

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Marketing Plan Summary: Target Audiences • Primary audience: Defined as a privately-held,

growth oriented contractor with long-time core staff, minimum of 2-3 million annual business turnover, previous pipe jacking experience and a high tolerance for risk

• Secondary audiences: municipalities, engineers and academia; need to educate about our equipment methods in order to create competitive bid opportunities in the market place

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Marketing Plan Summary: Marketing Objectives & Goals • To increase our market share • Establish, maintain and expand current relationships • Provide a directive for our sales and marketing

resources in conjunction with the strategic plan initiatives: – Define and pursue ideal geographic markets – Build and maintain customer relationships – Optimize pricing strategies

• Continuous education about trenchless pipe jacking methods

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Situation Analysis

Market Position • Akkerman is the market

leader for domestic GBM equipment and in 3rd place in the international market

Our Competitive Advantages • We are the only domestic

manufacturer of our variety of equipment

• Our equipment’s performance is superior due to separate torque and rotation capabilities

• We offer strong aftermarket support and can quickly expedite experienced field technicians and parts to all areas of geographical sales emphasis

• We offer a unique assortment of specialized tooling with our equipment packages

Competitor’s Overview • Main competition is owned

by large parent companies with vast resources whom offer appealing financing terms

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Situation Analysis

Strengths • Akkerman is a long-time

market leader and innovator with a well recognized name/brand/reputation for quality

• The GBM name is synonymous with the market nomenclature for the method

• We offer four diverse product lines to fit nearly all geological profiles

Weaknesses • Akkerman is a small

company with limited resources

• We are not always able to match our competitor’s terms and conditions

• Challenges associated with supporting four diverse product lines

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Situation Analysis

Opportunities • There should always be a

need for our equipment due to aging infrastructure, increased population growth and opportunities in un-and under-served markets

• Competitive opportunity amongst contractors due to tolerance specifications in bid packages

Threats • Many smaller international

manufacturers (4th position in market) are creating similar products very inexpensively

• Used equipment availability threatens new sale opportunities

• Market can be volatile based on government’s willingness/ability to invest in infrastructure

• Equipment system sales are based on project awards

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Strategies & Tactics to Increase Market Share • Strategic Initiative 1: Define and Pursue Geographical Markets

– Initiate Gold Key Service (completed in 2012) – Make site visits to representatives in defined regions of

sales emphasis and as often as possible in secondary representative regions

– Encourage representatives and their customers to visit Akkerman for plant tours and demonstration events

– Exhibit/present at premier tradeshows and in conjunction with representatives

– Offer representatives equipment on consignment – Annual representative evaluation

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Strategies & Tactics to Increase Market Share • Strategic Initiative 2: Build and Maintain Customer Relationships

– Internal customer information sharing through a CRM program – Develop comprehensive equipment presentations – Collaborate with customers to present case studies during educational sessions at

premier tradeshows – Author trade publication articles and newsletter project updates featuring customer

projects – Formal and informal surveying of customers for information on quality of products,

new product development and quality of customer service (in process) – Social media engagement with customers based on their projects, activities and

achievements – Invitations to open houses and demonstration days – Host educational webinars – Continuous website updates; drive traffic to site; rollout out a mobile responsive site

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Strategies & Tactics to Increase Market Share • Strategic Initiative 3: Optimize Pricing Strategy

– Define what the market will bear – Continuous review of competitor’s quotes – Offer flexible financial terms and conditions – Make apparent used equipment offerings – Establish a trade-in/buy back program (in

process) – Continuous reassessment

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Evaluation Metrics

• Qualitative and Quantitative Assessment through:

• Sales in all areas of all equipment categories; especially in areas of geographic sales emphasis

• Quote to sale conversions • Sales averages • Tradeshow exhibition and/or attendance • Web traffic • Customer and representative feedback • Customer satisfaction/experience surveying (in process) • Quarterly and year-end discussions, evaluation and

reassessment 04/22/15 23

Results To Date: All Sales

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Results To Date: Sales by Category

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Results To Date: Quote to Sale

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Results To Date: Average Sale

FY 10-11 FY 11-12 FY 12-13 FY 13-14 FY 14-15 YTD

Average Sale Amount

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Results To Date: Tradeshow Exhibition and Attendance

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Results To Date: Web Traffic

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• 50% increase in representative site visits and Akkerman plant tours

• An average of 30/per year formal and informal presentations to various constituencies

• Hosted Demonstration Days and 40th Anniversary Open House; well attended by customers and nearly half of equipment representatives

• Hosted equipment webinar series in 2013; well attended; good sample of audiences

• Active social media presence and engagement on Facebook, Twitter, YouTube and LinkedIn

Results To Date

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Maynard Akkerman (800) 533.0386 | makkerman@akkerman.com