Annual Investor Conference Mark Eubanks, President Eaton s Cooper Lighting Division February 27, 2015
Lighting Facts Lighting represents 20% of global electricity consumption DOE projects that by 2030 LED will represent 74% of lighting sold in the U.S. Represents 300 terawatt-hours in energy savings, the equivalent of 50 1000-megawatt power plants These savings could result in greenhouse gas reduction of 210 million metric tons by 2030; equivalent to annual output of 38 million passenger vehicles 3
Eaton s lighting business is large, diverse, and growing Global Sales : >$2.0B Geographic mix: >18% outside Americas Growth rate: Double digit CAGR since 2011 18% 51% International 82% Americas Revenue Mix 10% Outdoor Commercial 13% Residential 26% Industrial 4
Product brands and application knowledge that customers trust all over the world Metalux (Ambient) Crouse-Hinds (Harsh & Hazardous) Halo (Recessed) Complete product solutions CEAG (Life Safety) McGraw- Edison (Outdoor) Fifth Light (Controls) 5
Eaton has broad and deep presence in all areas of lighting Commercial Residential Industrial Multiple applications, channels, and geographies Street Lighting Healthcare Education/Universities 6
Strong product brands and human capital invested across all areas of the value chain Sales Agents and Dealers Architects, Engineers Wholesale Distributors EPC, Electrical Contractors Owners, End Users Eaton s global sales and support infrastructure Lighting and Controls Value Proposition Responsive to rapidly evolving global lighting trends Strong understanding of channel and stakeholder requirements Unique technology solutions, broad application portfolio 7
Our marketing and education have global reach Eaton Global Tech Days SOURCE Education Center WaveStream Roadshow 8
Expanding Eaton s intellectual property for protection of proprietary technology solutions Global LED & Controls Patent Applications Global LED & Controls Patents Issued 9
Our results continue to outperform the market Quarterly Revenue Growth % LED Penetration 10
Lighting greatly expands the depth and breadth of our Electrical franchise Moving Upstream Utility power distribution network Historic Eaton Core: Facilities Power Distribution Moving Downstream Load management & lighting control 11
Lighting infrastructure exists everywhere STREET LIGHTING HELIPAD LIGHTING PARKING AND GARAGE LIGHTING EXIT SIGNS (LIFE SAFETY) RECESSED LIGHTING NIGHT LIGHTS / BED LIGHTS DAYLIGHT HARVESTING AMBIENT LIGHTING CLASSIFIED AREAS LEDs OUTDOOR LIGHTING Controls 12
Growth drivers: energy efficiency gains through technology convergence Rising global energy costs Increased regulation and legislation lighting efficacies and controls Total Controlled Lighting Growth Social responsibilities and awareness in the areas of sustainability Evolution of LED technology relative to traditional lighting sources cost / performance Digitization of lighting systems Physical and functional convergence of light sources and controls 13
Expanding our value proposition as the new value chain develops Conventional Lamps Ballast Luminaire Brand/Channel Application Conventional components Traditional lighting component suppliers Conventional luminaires LED component suppliers LED source components LED luminaires / systems Modules/ Epitaxy Phosphor LED Electronics Controls Luminaires Brand/Channel Application 14
Looking forward, trends favor Eaton Lighting to controlled lighting Energy Codes Green Programs LED/SSL Increased granular control requirements in ASHRAE 2010 Title 24 California Code 2013 includes requirements for automated and manual off lighting in single room, including receptacles LEED v3 Energy & atmosphere credits Controllability of systems credits Measurement & verification Enhanced commissioning LEED promoting granular controls (below 150 ft 2 ) 2010 - GSA projects require DALI addressable systems Common specification requirement for Lighting & Controls must be provided by single supplier LED adoption drives Smart Fixture solutions Fixture companies developing smart drivers LED fixture solutions include networkable solution/software LED 28% of office lighting by 2016, 48% by 2020. Eaton one of few that can provide multi-source solution 15
Energy code progression to addressable smart controlled lighting Sample Application Office Space Office Floorplan 1970 s-1990 s Office Floorplan 2000 s-2010 s Office Floorplan 2010 s-2020 s Control Technologies Contactors & Time Clocks Centralized Relay Primary Drivers +/- 5,000 ft 2 of control +/- 2,000 ft 2 of control +/- 150 ft 2 of control Value / Benefit 20% - 30% Energy Savings 30% - 50% Energy Savings 50% - 70% Energy Savings 16
Lighting infrastructure is pervasive creates data nodes & high density sensor networks Private offices Conference rooms Open office areas Area lighting and roadway Mechanical rooms / classified spaces Single & multifamily residential Parking garages 17
Putting it all together Broad geographic and application coverage Strong channel presence, with increasing investments Expansion of light points Embedded intelligence and communication deployment of high-density, sensor networks Increased wallet share of facilities construction Enables Systems & Solutions architecture Connecting devices to systems systems to networks 18
A transformed Electrical Sector positioned to win big A strong history of electrical solutions Transformational acquisition with a complementary business Integration results meeting increased targets A business with the scale and size to compete globally Positioned to capitalize on global megatrends A portfolio of leading brands A stronger combined enterprise that can provide distinctive capabilities to target segments 19