Electra Consumer Products

Overview

February 2016

General Data |Israel

8.3 Millions

2.5%

Jews 75% , Muslims 21%

others 4%

29.6 Years

0-14 Years – 28.2%

2.4 Millions

Demographic Figures 2014

Eilat

Jerusalem

Tel-Aviv

Haifa

Ashdud

Be’er

Sheva

* Central bureau of statistics

ISRAELI POPULATION

HOUSEHOLDS

DISTRIBUTION OF POPULATION

POPULATION GROWTH RATE

(%PER YEAR)

AGE STRUCTURE

MEDIAN AGE

3

* Central bureau of statistics

MEDIAN AGE

304.4

2.8%

37.1

96.9

0.0%

93.1

5.9%

290.6

3.2%

36.1

95.7

1.9%

91.7

6.2%

INFLATION RATE (%)

UNEMPLOYMENT RATE (%)

IMPORTS OF GOODS & SERVICES (B $)

GDP PER CAPITA (CURRENT PRICES, 000’ $)

EXPORTS OF GOODS & SERVICES (B $)

GDP (CURRENT PRICES IN B $.)

GDP REAL GROWTH RATE (%)

Economic Figures

CRITERIA 2013 2014

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Elco Holdings

Elco HoldingsCompany Structure

Elco Holland BV

• Primarily holds 35% of a

real estate venture in China

Electra Ltd

• One of the largest construction

companies in Israel

• Imports Electro-mechanical

equipment from Belgium, UK,

Hungary, and Nigeria

• Manufactures air conditioning

systems

• Produces sanitation systems

and elevators

Electra Real Estate

• One of the largest real

estate companies in Israel

• Develops commercial real

estate for residential and

office spaces in Israel, the

US, Canada and Europe

• Owns and co-owns approx..

120 buildings in Israel

Elco North America Inc

• Residential complexes

in the South Eastern

United States

• Holds 43% of the LATA

REIT Fund.

Electra

Consumer

Products Ltd.

Electra Consumer Products (ECP) is one of five companies under the Elco Holdings Group umbrella

• A public company traded on the Tel Aviv Stock Exchange

• Owned by Gershon Zelkind

• Approx. 6300 employees

• Sales in 2014, 6.7 Billion NIS

• Sales 2015 Q1-3, 5.9 Billion NIS

• HQ in Tel Aviv, Israel

Elco Holdings Ltd.

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Electra Consumer Products – Introduction

We, in Electra, believe that innovation

and technology are tools meant to enable

each and every one to enjoy the quality of

life at home.

We believe that by making technology

accessible for everyone and fine-tuning

the shopping experience, maintenance,

and customer service, we will be able to

assist everyone by satisfying their

individual needs. In turn, this will make

life more enjoyable.

Our Vision

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Our Mission

To improve the quality of life at home

and enhance the experience

through innovation, service and

focusing on the customer's needs.

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Integrity

Innovation

Excellence

Customer Focus

Leadership

Our Values

10

With 70 years in the field, ECP is the largest, leading group in climate and air conditioning, home appliances, and home improvement

A subsidiary of Elco Holdings Ltd., which holds 60% stake in the company

Revenue of 2.1 billion ₪NIS Q1-3 2015

93 branches nationwide with approximately 95 square meters of floor space

The company employs about 2,650 workers

Manufacture, import, marketing, and sales of leading brands

Operates in Israel, Europe, Africa, and South America

Export of products manufactured in Israel

The Electra brand was ranked No. 32 on the list of leading brands in Israel (Globes, 2015)

Electra won the 17th place in the ranking of the leading companies in trade and services in Israel (D&B, 2014)

The combination of high product quality, leading brands nationwide and abroad,

uncompromising professionalism, technological leadership, reliability, and the quality

of service provided makes ECP a successful company in the field

Facts and Figures

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Electra Consumer Products

Electra Air

Conditioning Division

Electra Air

Conditioning

Manufacturing Plant

Sales

Electra After Sales

Service Electra

Airwell (Air-Con’

EMEA)

HVAC

Consumer Electronics

Shekem Electric

chain store

Machsanei Hashmal

(Electric

Warehouses)

chain store

Retail Chains

Trade Division

Electra Bar (water

purifying)

Bereas Electra

(Sony Mobile)

Home Appliances

DIY

ACE Hardware

chain store

Auto Depot

Doval’e

DIY

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Company Structure

Supply Chain

HR

Marketing

Finance

Air – Con’Electrical

Retail Chains Trade DIY

CEO

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Strategy focused in two main fields: Consumer Electronics Retail

and Climate/Air Conditioning, sustained by tactical operations

Establishing and leveraging

total market dominance

42.5% market share

Climate/Air Conditioning

Merging of chains for joint

management will achieve

strategic advantages in

purchasing, resource

exhaustion, and marketing

expertise

Approximately 20% market share

Consumer Electronics Retail

Company Strategy

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Climate & Weather

The AC market is a competitive and steadily growing market

Electra’s growth rate is faster than the market’s growth rate: 55% vs. 48%

Company vs. Market Growth*

Billion NIS

Billion NIS1.81

1.22

500

1,000

Jan-Nov 2014 Jan-Nov 2015

497

727

768

1,043

* Source: GFK

Electra

Rest of Market

2,000

1,500

Electra42.5%

Other ,7%

Tornado ,10%

Tadiran ,40%

1.81 Billion NIS MarketJan-Nov 2015

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The largest

manufacturing

AC factory in

Israel

Manufactring

rate of 250K

units/year

International

Activity,

including

export to

EuropeWinner of the

“Excellence

Award”

in Service

2014 Approx. 42.5%

market share

Leading the Israeli Air Conditioning industry 70 years on

Electra Air Conditioning Manufacturing Plant, including the

manufacturing and exporting of heat pumps and ducted

AC systems

Import and marketing of "Daikin", a global leader in

Climate and Air Conditioning solutions

A leader in technological innovation

Abide by International Quality Standardization

Active throughout the value chain

Accompanying construction companies and initiating

leadership and widespread cooperation with the local

authorities, government ministries, and the IDF

Full range of OEM products under the Electra brand in

cooperation with the best manufactures all over the world

Business Card Air-Con’

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“L’Air Conditionné Entreprise“ (ACE), a leader amongst the

global manufacturers and distributors of both Residential Air

Conditioners (RAC) and Central Air Conditioning systems

(CAC), was founded in 1947.

In 2012, ACE separated it’s RAC and CAC activities and

created the entity- Airwell Residential SAS (ARS), dedicated

to RAC.

In 2012, ECP purchased Airwell Residential SAS (ARS)

AIRWELL Residential sells to more than 60 countries mostly

under the brand “Airwell” worldwide.

Business Card Air-Con’

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Air-Con’ Industries

Our Vision: "Seeking to improve our performance, business agility,

and high responsiveness to a variety of customer requirements and

changing market conditions. Our main goal is to conserve our

competitiveness, while achieving growth and continuous profitability"

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Electra Industries is an industrial company that has been manufacturing air conditioners since 1973.

The company specializes in the development and assembly of home air conditioning systems for the domestic market and for export and covers an area of 20 acres, including an R&D department on site.

The R&D department preserves the company's advantages in the field of technological innovation, cutting product cost, improving reliability and quality, and matching product specification to standards and legal requirements.

The factory employs about 300-350 workers depending on the season.

Special emphasis is placed on continuous improvement of existing products, production cost, and compliance.

The plant's production capacity is approx. 250,000 air conditioners per year. The factory is certified under the Israeli Standards and International Quality Management - ISO 9001

Electra Air-Con’ Industries

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Electra for All Your Needs

Technology Innovation

Humidifier/dryer

Purification and

air filtration

Motion

Detection

Internet of

Things

Household

systems

Temperature Range

freezer

Brewing

Server Room

offices

Hot water

-35

20

27

70

0

158 ºF

81 ºF

68 ºF

32 ºF

-31 ºF

Rooms & households

10m2

Skyscrapers300,000m2

Size & Use Range

stadiums150,000m2

hospitals3000m2

areas

factories20,000m2

The way to implement strategy by developing a broad, qualitative product portfolio

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The Global AC market is expected to grow at an annual rate of 5.7% between 2014-2018 *

Electra’s activity in the international arena:

* According to a survey by the Freedonia Group in May 2014

ARS- Sale of ACs to 50 countries

Export of Heat pumps, manufactured at the company’s factory

Cooperation with Midea, a leading Chinese

manufacturer, in marketing ACs

OEM through the Airwell Brand

The Company is active in the international arena in order to take part in the

expected growth in the global AC market

Export

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Summary|Electra Consumer Products

ECP Summary

Good business relations with over 500 POS

(chains and dealers) all over Israel

Many years of successful cooperation with leading international

companies and vast experience in launching international brands

Professional and experienced team

Well established, financially strong company with over 100

owned sales outlets.

Heritage of 70 years in the consumer electronics industry

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Thank You