Material Handling 2020 Propane Market Summit Where Propane

Material Handling 2020 Propane Market Summit

Where Propane Competes

Propane Forklift Market • Industry estimates suggest 500, 000+ propane-powered forklifts in operation in the United States. • Roughly internal combustion engine powered forklifts retired and replaced annually. • Propane holds 85 -90% market share in Class 4 and 5. • Averages 400 -550 M gallons consumed annually. • What’s at stake? • Disappearing “base” gallons - industry estimates range up to 270 M gallons lost annually • Negative impact on allocations • Potential for millions in capital equipment investment (i. e. , cylinders) sitting under-utilized or unused

Material Handling Market Statistics

The North American Market – Where Propane Competes Historic Retail Orders (000’s) Historical Retail Orders Class 1 Class 4/5 300 250 197 Thousands 200 166 226 2015 2016 260 2017 2018 242 179 136 150 100 214 231 253 98 50 0 2009 2010 2011 2012 2013 2014 2019

EL IC 2 Recession 60% 19 20 18 20 17 20 16 20 15 20 14 20 13 20 12 20 11 20 10 20 09 20 08 07 20 06 20 05 20 04 20 03 20 02 20 0% Recession 10% 01 20 00 20 99 19 20% 20 7 98 19 19 9 96 19 95 19 94 19 93 19 92 19 Internal Combustion v/s Electric Trend 70% 66% 50% 40% 34%

8 WH % CB % 60% 19 Recession 40% 20 18 20 17 20 16 20 15 20 14 20 13 20 12 20 11 20 10 20 09 20 08 20 07 20 06 20 05 20 04 20 03 20 02 0% Recession 10% 20 20% 01 20 00 20 99 19 19 9 97 19 96 19 95 19 94 19 93 19 92 19 Warehouse v/s Counterbalance Trend 70% 54% 50% 46% 30%

The Market – Class IV & V Factory Orders By Engine Type 100, 0% 90, 0% 85, 6% 87, 5% 88, 6% 11, 9% 11, 5% 10, 8% 89, 1% 90, 1% 10, 4% 9, 5% 88, 1% 88, 9% 11, 6% 10, 8% 70, 0% 60, 0% 50, 0% 40, 0% 30, 0% 20, 0% 10, 0% 2, 5% 0, 0% 2013 1, 0% 2014 0, 7% 2015 Gasoline 0, 4% 0, 5% 2016 Diesel 2017 LPG 0, 4% 2018 0, 3% 2019

All US Factory Orders by Year and Fuel 300 000 250 000 200 000 150 000 100 000 50 000 0 2013 2014 2015 Gasoline 2016 Diesel Propane 2017 Electric 2018 2019

2019 Forklift Factory Orders by Fuel and Lift Capacity 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 0 thru 4999 5000 thru 9999 10, 000+ 0 thru 4999 Sit down rider Cushion Gasoline 5000 thru 9999 10, 000+ Sit down rider Pneumatic Diesel Electric Propane Note: Class 1, 4, 5 only

Yearly Change in Retail Forklift Shipments 2013 -14 2014 -15 Percent Change 2015 -16 2016 -17 2017 -18 2018 -19 Class 1 14% 2% 7% 5% 5% 2% Class 2 15% 23% 8% 7% 0% 8% Class 3 11% 5% 9% 1% 5% -2% Class 4 12% 2% 0% -7% 12% -2% Class 5 21% 2% -7% 8% 19% -10% Total Shipments 14% 6% 3% 3% 8% -2%

2019 Retail Shipments by PADD Class Shipments by PADD 80 000 PADD 1 Breakdown 37183 70 000 60 000 50 000 27200 40 000 30 000 6325 PADD 1 A 20 000 PADD 1 B PADD 1 C 10 000 0 PADD 1 Class 1 PADD 2 Class 2 PADD 3 Class 3 PADD 4 Class 5 PADD 5

Where Sales are Happening

Top 10 Forklift Retail Markets’ Shipments in 2019 • Accounts for 55% of retail forklift shipments 30 000 25 000 20 000 15 000 10 000 5 000 0 CA TX OH FL Class 1 Class 2 GA Class 3 IL Class 4 PA Class 5 NC NY IN

Top 10 Industries for Class 4 & 5 Forklift Retail Shipments in 2019 • Top 10 SICs make up around 40% of Class 4 & 5 US forklift shipments SIC Description/Code Truck Rental/Dealers (7700) Equipment Rental; leasing (7359) General Warehouse (4225) Lumber And Other Build Materials (5211) Miscellaneous Retail (5999) General Production (3999) Trucking Except Local (4213) Industrial Machinery and Equipment (5084) Arrangement of Transportation of Freight and Cargo (4731) Services Incidental To Transportation (4789) % of Class 4 & 5 Shipments 9% 7% 5% 4% 4% 3% 3% 2% 1% 1%

Material Handling Market Research

Market & Customer Research • Identify fleet makeup and fuel usage by class segments. • Rank key purchase criteria. • Research competitive dynamic of traditional fuels. • Quantify other alternative fuel presence. • Identify corporate mandates and regulations.

Material Handling The Challenges

Market Evolution • The look of warehouse and distribution center operations has changed significantly. • Lighter loads/lifts, fewer shifts, automation, etc. • Ever-increasing pressure from regulators to reduce emissions. • Being “green” is virtually synonymous with electric. • Electric/battery popularity has exploded thanks to companies like Tesla. • Government subsidies and investments have helped build momentum for some alternatives and industries.

Electric, Diesel, Etc. • Electric • Widely regarded as the “green” alternative. • Sustained investments happening in technology development complimented by a highly focused sales force. • Indoor & outdoor operation capable. • Diesel • The heavy-duty standard for high capacity Class 5 & 7 lift trucks. • Cannot operate indoors. • CNG/LNG • Half the run-time of propane. • Refueling is often slow, not easily accessed, and impacts warehouse productivity. • Fuel Cell • Very high costs of technology and infrastructure, which often relies on grants and subsidies.

Material Handling Propane Advantages

Propane Strengths • Low emissions solutions. • Reliable engines. • 30% lower acquisition cost advantage. • Owner/operator familiarity. • Consistent multi-shift performance. • Lower fuel costs compared to other I. C. options. • Small footprint of refueling infrastructure. • 8 -hour shift capability on one cylinder. • Proven safety record.

Emissions Comparisons *2017 GTI Comparative Emissions Analysis

Material Handling Emerging Propane Technology

Propane R&D • Ultra-low emissions retrofit • Exhaust emissions reduction technologies to produce near-zero emission levels with no loss in performance or functionality. • Propane hybrids • • Research and demonstrate propane hybrid forklift module. Exploring potential commercial configurations & market development opportunities. • On-board fuel storage & refueling • Exploring conformable cylinder configurations and refueling options.

Material Handling Recent Coverage

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