Global Trends in

Air Conditioning

Anette M Holley

Chillventa

October 2014

2 Excellence in Market Intelligence 2

AC Global trends

Critical

Very Certain

Energy Efficiency and

renewables

Market Globalization &

Industry consolidation

Refrigerants

VRF vs. Chiller

Market Drivers

Joint Ventures

And Alliances

European Economy

Market Restraints

Emerging

Countries Material

cost

Chinese

growth

slowdown

Smart

buildings

smart homes

Legislation

Ventilation/

DOAS

US recovery

3 Excellence in Market Intelligence

Hitachi and JCI

3

January 2014: JCI purchases 60% of Hitachi AC Business

including the manufacturing facilities

Complete AC range

including ductless

JCI access to established and emerging

markets for ductless and VRF

In the US the

Hitachi product

will be able to

rely on Yorks extensive

dealership

network

4 Excellence in Market Intelligence

Carrier UTC & CIAT

4

July 2014: Carrier UTC bid 53.9% shares from CIAT not finalised

Focus on commercial AC

and Chillers (Europe) and

residential (USA)

Focus on airside

products and hydronic

Europe (including Russia)

and South Africa market

presence

Global with bias on North

America

One of the largest European groups

serving the

commercial AC

market;

System sale combining chillers

and airside;

Dominant in the French market;

Production facilities in France, Spain and

Italy.

Combined CP Market Share in France of

35%

5 Excellence in Market Intelligence

World air conditioning market, 2012-2017

Total 2014:

128.5 million units

Total 2014:

Euro 72.3 billion

5

6 Excellence in Market Intelligence 6

Global minisplit market 2014 e

Top 10 countries in Europe in 2014 by units

(number of outdoor units) 6.5 million units representing 6% of global total

7 Excellence in Market Intelligence 7

World inverter air conditioning market

2013 total market

sizes

Inverters (single + multi) by volume

8 Excellence in Market Intelligence 8

AC Chiller market

World Market for chillers from 2012 to

2017 in value (Euro millions)

Top 10 countries in the world market for

chillers in 2014 by value (Euro millions)

Top 10 countries in Europe for chillers in

2014 e by value (Euro millions)

9 Excellence in Market Intelligence 9

VRF market

World market for VRF from 2011 to 2016

in units (outdoor units)

Top 10 countries in the world market VRF in

2014 by units (outdoor units)

Top 10 countries in Europe in 2014 by units

(outdoor units)

10 Excellence in Market Intelligence

World fastest growing markets, CAGR 2012-17

10

Warm spots >5-10% growth

Cold spots 10% growth

India

Indonesia

Russia

Colombia Nigeria

Brazil

Venezuela Vietnam

China

Argentina

UK

South

Africa

Mexico

Turkey

11 Excellence in Market Intelligence

AC growth rate in Europe,2014

11

-6% -8%

7%

-14%

12 Excellence in Market Intelligence

The Germany AC market

12

The sale of GEA's Heat Exchanger Division to Triton is moving forward ; expected completion by the end of the year This division includes GEA Air Treatment, the clear German market leader in fan coils, one of the top four in AHUs and a significant player in chillers The Kaut group established a new company, C P Kaut, in September 2014. This will exclusively distribute products from the large Chinese air conditioning A/C company, Hisense, in Germany. Swegon acquired the German company Econdition GmbH, a medium-sized player in industrial and precision cooling systems, in August 2014. This, together with its previous acquisitions of Blue Box and Walter Meier Germany has considerably strengthened its position in the German market

The German AHU market showedg reasonable growth in 2013, with an increasing proportion of products being sold with heat recovery systems The European ErP directive will come into effect in Germany in September 2015 and will have significant effects on both the air conditioning and heating markets

13 Excellence in Market Intelligence

Penetration of air conditioning in dwellings

13

Penetration

Spain 47%

Russia 36%

Italy 31%

Turkey 31%

France 10%

UK & Germany

14 Excellence in Market Intelligence

European air conditioning stock levels of splits

14

15 Excellence in Market Intelligence 15

Europe AC market growth 2013-14e

UK France Russia Spain Italy

30%

24%

18%

12%

6%

0%

-6%

-12%

-18%

-24%

-30%

Germany Turkey

Splits+VRF (by

volume) Chillers (by value)

16 Excellence in Market Intelligence 16

Expected future growth for Europe (CAGR 2012-2017)

UK France Russia Spain Italy

10%

8%

6%

4%

2%

0%

-2%

-4%

-6%

-8%

-10%

Germany Turkey

Splits+VRF (by

volume) Chillers (by value)

World Refrigeration

& AC&R

Compressors

MCE, MARCH

2014

Anette Meyer

Holley

18 Excellence in Market Intelligence

World refrigeration & World

compressors

18

2013-14 World

refrigeration; 9

countries

2015-16 World AC &

Ref

compressors

19 Excellence in Market Intelligence

Global drivers

19

Importance

Degree of Adoption

low

high

med

high

med

In EU countries supermarkets and energy efficiency are key In India, China and Brazil, improving the food chain is a main driver

EU Legislation/

Outlawing of R22;

Directive 2009/125/EC on

Ecodesign1 a framework

for energy reduction

Supermarkets Energy Efficiency/

Green credentials

Improve food

chain/avoid

waste

Discount

stores Lidl, Aldi etc.

Smaller

supermarkets

Design

Reliability

Quick

installation

Price of

Copper

Reduce noise

levels

Inverters

20 Excellence in Market Intelligence

Growth in refrigeration, by country, by

value, CAGR

20

2012 total: 31,034.5 US$ million

14.5%

8.7%

7.6%

7.0%

4.2%

3.7%

2.7%

2.5%

1.6%

21 Excellence in Market Intelligence

BSRIA as an advisor

on refrigeration

21

RED AMBER GREEN

Indicative energy savings Low savings Medium savings High savings

Where technology can be applied Limited application Some application, but not widespread

Universal application

Ease of application Complex Medium Simple

Maintenance of technology Complex Medium Simple

Interaction with other technologies High interaction Some interaction No interaction

Impact on water use High Medium None

Applicability to Saudi Arabia Not applicable May be applicable Applicable

22 Excellence in Market Intelligence

Contact details

22