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This excerpt taken from the XIDE 10-K filed Jun 4, 2009. Company
Products and Business Segments
The Company reports its financial results through four principal
business segments: Transportation Americas, Transportation
Europe and ROW, Industrial Energy Americas, and Industrial
Energy Europe and ROW. Refer to Note 18 to the Consolidated
Financial Statements in Item 8 of this
Form 10-K
for financial information about the Company’s business
segments as well as the geographic areas in which each segment
conducts operations.
Transportation
The Company’s transportation batteries include ignition and
lighting batteries for cars, trucks, off-road vehicles,
agricultural and construction vehicles, motorcycles,
recreational vehicles, marine, and other applications. The
Company’s principal batteries sold in the transportation
market are represented by the following brands: Centra, DETA,
Exide, Exide Extreme, Exide NASCAR Select, Orbital, Fulmen,
and Tudor, as well as other brands under various private
labels. The market for transportation batteries is divided
between sales to aftermarket customers and original equipment
manufacturers (“OEM“s). Transportation segments
represented approximately 61.5% of the Company’s net sales
in fiscal 2009. Within the transportation segments, aftermarket
sales and OEM sales represented approximately 82.8% and 17.2% of
fiscal 2009 net sales, respectively.
Aftermarket sales are driven by a number of factors, including
the number of vehicles in use, average battery life, average age
of vehicles, weather conditions, and population growth.
Aftermarket demand historically has been less cyclical than OEM
demand due to the three to five-year replacement cycle. Some of
the Company’s major aftermarket customers include Wal-Mart,
Bosch, Tractor Supply, Canadian Tire, ADI, and GAUI. In
addition, the Company is also a supplier of authorized
replacement batteries for major OEM’s including FIAT, BMW,
Volkswagen, John Deere, Renault/Nissan, and PACCAR.
OEM sales are driven in large part by new vehicle manufacturing
rates, which are driven by consumer demand for vehicles. The
Company believes that the OEM market increasingly prefers
suppliers with established global production capabilities that
can meet their needs as they expand internationally and increase
platform standardization across multiple markets. The Company
supplies batteries for two of the 10 top-selling vehicles in the
United States of America (“U.S.”) and five of the 10
top-selling vehicles in Europe. Significant customers include
International Truck & Engine, FIAT, the PSA group
(Peugeot S.A./Citroën),
Case/New Holland,
BMW, John Deere, Renault Nissan, Scania, Volvo Trucks,
Volkswagen, and Toyota.
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Transportation
Americas
In the Americas, the Company sells aftermarket transportation
products through various distribution channels, including mass
merchandisers, auto parts outlets, wholesale distributors, and
battery specialists. The Company sells its OEM transportation
replacement products principally through dealer networks. The
Company’s operations in the U.S., Canada, and Mexico
include a network of 83 branches that sell and distribute
batteries and other products to the Company’s distributor
channel network, battery specialists, national account
customers, retail stores, and OEM dealers. In addition, these
branches collect spent batteries for the Company’s
recycling centers.
With its six recycling centers, the Company is the largest
recycler of lead in North America. The Company’s recycling
centers supply recycled lead for use in approximately 100% of
Exide’s Transportation and Industrial Energy products
manufactured in North America as well as supplying lead to a
variety of external customers. These operations also recover and
recycle plastic materials that are used to produce Exide battery
covers and cases.
Transportation
Europe and ROW
The Company sells aftermarket batteries in Europe and ROW
primarily through automotive parts and battery wholesalers, OEM
dealer networks, mass-merchandisers, auto centers, service
installers, and oil companies. Wholesalers and OEM dealer
networks have traditionally represented the majority of this
market, but sales through hypermarket chains and automotive
parts stores, most often integrated in European or global buying
groups, have increased. Many automotive parts wholesalers are
also increasingly organized in European organizations active in
purchasing and merchandising programs. Battery wholesalers sell
and distribute batteries to a network of automotive parts
retailers, service stations, independent retailers, and garages
throughout Europe.
Industrial
Energy
The Company’s Industrial Energy segments supply both motive
power and network power applications. Motive power batteries are
used in the material handling industry for electric forklift
trucks, and in other industries, including floor cleaning
machinery, powered wheelchairs, railroad locomotives, mining,
and the electric road vehicles market. Network power batteries
are used for
back-up
power applications to ensure continuous power supply in case of
a temporary power failure or outage. Industrial Energy
represented 38.5% of the Company’s net sales in fiscal
2009. Within the Industrial Energy segments, Motive power sales
and Network power sales represented approximately 54.6% and
45.4% of Industrial Energy net sales, respectively.
The battery technologies for the motive power markets include
flooded flat plate products, tubular plate products, absorbed
glass mat (“AGM”) products, and gelled electrolyte
products. The Company also offers a complete range of battery
chargers and related equipment for the operation and maintenance
of battery-powered vehicles.
Network power batteries are used to provide
back-up
power for use with telecommunications systems, computer
installations, hospitals, air traffic control, security systems,
utility, railway and military applications. Telecommunications
applications include central and local switching systems,
satellite stations, wireless base stations and mobile switches,
optical fiber repeating boxes, cable TV transmission boxes, and
radio transmission stations. The Company’s strongest
network power battery brands, Absolyte and
Sonnenschein, offer customers the choice of AGM or gelled
electrolyte valve regulated battery technologies and deliver
among the highest energy and power densities in their class.
Industrial
Energy Americas
The Company distributes motive power products and services
through multiple channels. These include sales and service
locations owned by the Company that are augmented by a network
of independent manufacturers’ representatives. The Company
serves a wide range of customers including OEM suppliers of lift
trucks, large industrial companies, retail distributors,
warehousing companies, and manufacturers. The
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Company’s primary motive power customers in the Americas
include Crown, NACCO, Toyota, Jungheinrich, Wal-Mart, Target,
and Kroger. The Company distributes network power products and
services through sales and service locations owned by the
Company that are augmented by a network of independent
manufacturers’ representatives. The Company’s primary
network power customers in the Americas include AT&T,
Emerson Electric, and Verizon Wireless.
Industrial
Energy Europe and ROW
The Company distributes motive power products and services in
Europe through in-house sales and service organizations and
utilizes distributors and agents for the export of products from
Europe to ROW. Motive Power products in Europe are also sold to
a wide range of customers in the aftermarket, ranging from large
industrial companies and retail distributors to small
warehousing and manufacturing operations. Motive Power batteries
are also sold in complete packages, including batteries,
chargers, and increasingly through
on-site
service. The Company’s major OEM motive power customers
include TMH, KION and Jungheinrich. The Company distributes
network power products and services in Europe and batteries and
chargers in Australia and New Zealand through in-house sales and
service organizations. In Asia, products are distributed through
independent distributors. The Company utilizes distributors,
agents, and direct sales to export products from Europe and
North America to ROW. The Company’s primary Network Power
customers in Europe and ROW include China Mobile, Deutsche
Telecom, Alcatel, MGE, Emerson Electric, Nokia, Ericsson and
Siemens.
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