“Picking the Right Product” Colin Billiet nano-porous solutions limited (formerly Group Chief Executive of the domnick hunter group plc) 14 th May 2010

Building Profitable Growth Through Product Innovation Basics Know your core technologies and competences Know your customers and markets Show commitment from the top – Board level Make Product Innovation a cornerstone of your business growth strategy Maintain investment through the economic cycle

Technology and Innovation Maintain a healthy level of investment in core technologies Recognise and value your know how! Insist on novelty in new designs (Patentable features) Aggressively target reduced manufacturing costs while adding benefits – typically 30% is achievable Measure new product sales and Patent filings – e.g. % of annual sales introduced in last 3 years

Customers and Markets Fully understand customers needs Demonstrate how your products will contribute to their growth and profitability Work in partnership and share the rewards Develop strong synergies - most customers appreciate this approach Innovation is a ‘door opener’ New technology is also a ‘door opener’

Leadership Must be from the very top - CEO Do not delegate responsibility Set tough goals – usually achieved Define what is a new product Leverage existing technology and competence New technologies need lots of investment New technologies also a champion

New Products Listen to the customer Identify the real requirement Imagine the possibilities Follow your instincts - do not blindly follow market research Ensure buy-in from all concerned - advise/inform/get ownership - get feedback an avoid surprises

Example of New Product Innovation New modular desiccant compressed air dryer – patents pending New innovation possible despite market maturity Sold on new innovation and simplified design – elimination of many system components Integral inlet and outlet filtration Everything in the box to get started - cables, brackets etc.

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Flexibility Modular construction allows machine builders to utilise their own controls. Future proofed for other applications

A. Air dryer module INNOVATION Identified opportunities A.£300k B.£2m C. £100k D.£500k E. £500k F.£100k TOTAL £3.5m B. Air dryer range C. Variant D. Variant E. Variant F. Variant Product road map

Example of New Technology nano-porous adsorbent hollow fibre technology 75% energy saving 80% space saving 70% weight saving Competitive price position Patents pending Addresses a market sector where existing technology is unsuitable (£100m annual sales potential) Enables heat regeneration in small high volume applications – regeneration time reduced from 8 hours to 2 minutes

Old technology vs. New New adsorbent heated hollow fibre Low pressure loss Fast kinetics Any orientation Unaffected by vibration Very low thermal mass Low energy consumption Granular technology Uneven bead size Suffers from channelling, by-pass, high pressure losses and attrition Effected by orientation and vibration

Rewards from sustained innovation Organic growth is the lowest cost/risk to expansion Retention and growth with existing customers is high Profitability is higher as a result Ability to gain new customers is enhanced – many large companies no longer have the ability to innovate Motivational for employees – high retention New technology is a longer term investment for future prosperity – when the ‘cash cow’ is exhausted It is a journey, not a destination

Thank you for your time Any questions?