Annual Investor Conference€¦ · BUILDING ELECTRIFICATION: 50 % increase in global building...
Transcript of Annual Investor Conference€¦ · BUILDING ELECTRIFICATION: 50 % increase in global building...
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Annual Investor Conference
Uday Yadav, President & COO, Electrical SectorMarch 2, 2020
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We have a leading electrical franchise with broad capabilities• Regional expertise and global scale• Delivering strong market and financial results
Significant potential for base business growth• Driven by safety requirements, resilience investments, data growth, and electrification
Well positioned to benefit from “energy transition” growth trend• “Everything as a Grid,” enabling integration of renewables and sustainability solutions• New types of equipment, service, and software pulling through traditional equipment
Differentiated digital foundation• Enables new business models for the energy transition future
Today’s key messages
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Industry Leadership
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We are strongly positioned in the most dynamic and fastest growing part of the electrical power value chain
Power generation
Transmission Distribution
Commercial
Industrial
Data centers
Residential
Utility
Primary areas of focus
Machinery
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Technology Innovation
• Arc science• Power electronics• Material science
Structural solutions
Life safety & Security
Power distribution & Circuit
protection
Power quality, Backup power & Energy storage
Control & Automation
Harsh & hazardous environment
solutions
Our capabilities are essential to the effective delivery of electric power
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Our capabilities are essential to the effective delivery of electric power
Structural solutions
Life safety & Security
Power distribution & Circuit
protection
Power quality, Backup power & Energy storage
Control & Automation
Harsh & hazardous environment
solutions
Technology Innovation
• Arc science• Power electronics• Material science
Deep regional application expertise
End-to-end services
Partners & channels
Integrated digital platform
& insights
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Our capabilities are essential to the effective delivery of electric power
Residential Commercial
IndustrialData centers
Utility Machinery
Structural solutions
Life safety & Security
Power distribution & Circuit
protection
Power quality, Backup power & Energy storage
Control & Automation
Harsh & hazardous environment
solutions
Deep regional application expertise
End-to-end services
Partners & channels
Integrated digital platform
& insights
Technology Innovation
• Arc science• Power electronics• Material science
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We have built our capabilities and expanded through key acquisitions and partnerships…
US-focused power distribution and control business
Global geographic expansion
Built scalePower quality
and data center market
Extended capabilities
2004 2008 20131979 1994 2019/20
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…and continued organic investments to extend our capabilities and customer solutions
Leading service business
Advanced product innovation
Digital centers of excellence• Connectivity• Cybersecurity • Analytics
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Insulgard Switchgear analytics improve health of medium-voltage systems
Leading service business
INDU
STRY
FIR
STS
Intelligent and remotely configurable breaker
Li-ion UPS with dual-rated cybersecurity
Advanced product innovation
Digital centers of excellence• Connectivity• Cybersecurity • Analytics
…and continued organic investments to extend our capabilities and customer solutions
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Leading to profitable growth and market share gains
REVENUE INCREASED 6X OVER LAST 2 DECADES Operating profit from 7% to 18%
Global IT Channel Share
Source: National Electrical Manufacturers Association
NEMA Share
Sources: ICT, Context, NPD
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Future GrowthSecular trends and targets
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Our world is rapidly changing…
Electrical demand
BUILDING ELECTRIFICATION:
50% increase in global building energy share by 2050
TRANSPORT ELECTRIFICATION:
27% increase in global electricity demand by 2030
DATA AND COMPUTE:
4X increase in share of electricity demand by 2030
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Our world is rapidly changing…
Electrical demand
BUILDING ELECTRIFICATION:
50% increase in global building energy share by 2050
TRANSPORT ELECTRIFICATION:
27% increase in global electricity demand by 2030
DATA AND COMPUTE:
4X increase in share of electricity demand by 2030
Decentralized supply
RENEWABLES:
50% of generation by 2035
STORAGE:
13Xinstalled base growth by 2030
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Our world is rapidly changing…
Electrical demand Decentralized supply
RENEWABLES:
50% of generation by 2035
STORAGE:
13Xinstalled base growth by 2030
Infrastructure requirements
SYSTEM RESILIENCE:
5% -12% increase in outage minutes
OPTIMIZATION:
13Bconnected power devices by 2025
CYBERSECURITY:
84%of companies have had an IoT breach
BUILDING ELECTRIFICATION:
50% increase in global building energy share by 2050
TRANSPORT ELECTRIFICATION:
27% increase in global electricity demand by 2030
DATA AND COMPUTE:
4X increase in share of electricity demand by 2030
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…creating strong future growth potential
Power infrastructure investments and grid
modernization
Electrical power value chain transformation
1
2
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…creating strong future growth potential
Base businessexpansion
Energy transitionleadership
Digitalsolutions
Power infrastructure investments and grid
modernization
Electrical power value chain transformation
1
2
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Targeting 50% revenue growth potential in 5 years
2020 Baseline revenue
Base business expansion
Energy transitionleadership
Digital solutions
$12B
$15B
2025 Organic revenue
$18B
2025 Electrical Sector revenue
Target acquisition value
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Base Business ExpansionSafety, Resilience, Data Growth, Building Electrification
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Portfolio of safety solutions driven by code and customer preference
Prevent the 40% of building fires that are electrical
2020 Code continues trend of requiring more sophisticated content
Heightened utility focus on preventing fires
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Prevent the 40% of building fires that are electrical
2020 Code continues trend of requiring more sophisticated content
Heightened utility focus on preventing fires
Arc fault breakers, extending detection leadership
Intrinsically safe industrial components
Expulsion-free fuses to reduce utility fire risk
Portfolio of safety solutions driven by code and customer preference
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Tailored solutions to support entire electrical power value chain resilience
Outages can cost >$1M per hour in critical applications
>$250B damage caused by weather
5% - 12% projected increase in downtime
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Arc quenching switchgear fastest return to service
Underground switchgear hardens grid
Reclosers isolate and manage areas with high risk
Outages can cost >$1M per hour in critical applications
>$250B damage caused by weather
5% - 12% projected increase in downtime
Tailored solutions to support entire electrical power value chain resilience
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Rapid growth of data stimulates medium-term growth in data center subsegments
IT spend in public cloud will grow 50% by 2022
Hyperscale data center players spent $185B in last 3 years
There will be $175B - $215B in edge computing hardware by 2025
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Overhead busway for flexible design
1MW UPS for cost conscious co-los and cloud providers
Pow-R-Line XD switchboard reduces footprint
Hyperscale data center players spent $185B in last 3 years
There will be $175B - $215B in edge computing hardware by 2025
IT spend in public cloud will grow 50% by 2022
Rapid growth of data stimulates medium-term growth in data center subsegments
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Significant increase in content due to building electrification
Developing economies: 20% point increase
Developed economies: 5% point increase
45% of building consumed power in 2050, up from 31%
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Developing economies: 20% point increase
Developed economies: 5% point increase
Tier 1& 2 power distribution components tailored for developing world
45% of building consumed power in 2050, up from 31%
Redesigned 250V Ground Fault Circuit Breaker for kitchen applications
Significant increase in content due to building electrification
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Energy Transition
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Energy transition is changing the electrical power value chain, creating an “EVERYTHING AS A GRID” environment
EVs
Distributed Storage
Solar
Produce, consume & sell
energyTransmissionPower
GenerationDistribution
Grid-scale Renewables
Grid-scale Storage
Storage and Specialized Infrastructure Traditional Power Infrastructure Optimization Software Service
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Energy transition: Preparing commercial buildings to optimally use EVs
Supporting Catholic University of Lille France
goal to achieve 0CARBONFOOTPRINTBY 2035
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Energy transition: Preparing commercial buildings to optimally use EVs
Power distribution backbone
EVsEnergystorage
Solar generation
Building EnergyManagement System
above installed electrical content
19%Added Eaton content in commercial
building upgrade project
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Our addressable market expands as the number of EV chargers in a commercial building or multi-unit residence increases
Total upgrade project value
25
50%
2
1%
• Larger power distribution modifications
• More energy storage
• More sophisticated control software
Additional Eaton
content
Charger value
Number of chargers installed per location10
10%
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Energy transition: Enabling industrial plants to maximize resilience utilizing microgrids
South African plant reduced downtime
and energy costs by 50%
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Energy transition: Enabling industrial plants to maximize resilience utilizing microgrids
above installed electrical content
10%Added Eaton content in industrial plant
microgrid project
Power distribution backbone
Solar and diesel generation
Energystorage
Microgrid control
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Energy transition: Enabling data centers to monetize under-utilized assets
Multi-tenant data center lowers cost by participating in
frequency response through
SALE OF POWERTO THE GRID
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Energy transition: Enabling data centers to monetize under-utilized assets
Power distribution backbone
Energy storage
UPS
EnergyAwareOptimization Software
above typical UPS content
2xAdditional Eaton content in a
greenfield data centerElectrical grid
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Eliminate or dramatically reduce the use of SF6 gas
23,500 XIMPACT OF CO2
Our complete energy transition portfolio extends to industry first SF6-free solutions
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History of leadership Shipped 1 million sections of SF6-free MV switchgear
We continue to innovateReleased multiple “green gas” switchgear models
Our complete energy transition portfolio extends to industry first SF6-free solutions
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Digital Solutions
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Our digital solutions support the base business and enable new business models in the “everything as a grid” electrical value chain
EVs
Distributed Storage
Solar
On-demand planning and decision support New business models Cyber-secure infrastructure
Collect, aggregate and analyze data,
digital platform
TransmissionPowerGeneration
DistributionGrid-scale
Renewables
Grid-scale Storage
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We have built a digital platform to establish leadership in our end markets
Eaton’s digital platform
Apps & data monetization
Expanded mindshare and reach
Improved customer satisfaction
Devices | Software | Services
IoT enabled solutions
Eaton marketplace
Partner ecosystem and experience hub
Digital design | Field services
Manufacturing and services efficiency
Ready now and built for the future
Connected Intuitive Open Secure Intelligent
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Decision support software to drive capacity planning and real-time decisions to integrate renewables
Distributed energy planning tools Real-time response with intermittent renewables
60% 20XOf the largest utilities
in North America use Eaton’s grid
planning software
Faster in modeling impact of renewables
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Digital agriculture solution leverages Eaton’s field infrastructure and creates software as a service revenue
Cellular gatewayproductivity
30%Energy efficiency | Water conservation | Farmer productivity
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We are monetizing our operational technology (OT) cybersecurity expertise while supporting digital adoption
Healthcare facility in midwest Eaton solution
AUDITEnvironment
maturity evaluation
ASSESSMENT & CORRECTIVE ACTION
Systemsanalysis
LIFE-CYCLEMANAGEMENT
Environment monitoringand upgrades
Reduction in cybersecurity risk
30%
-30%
Faster recovery timeif there is a cybersecurity incident
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We have a leading electrical franchise with broad capabilities• Regional expertise and global scale• Delivering strong market and financial results
Significant potential for base business growth• Driven by safety requirements, resilience investments, data growth, and electrification
Well positioned to benefit from “energy transition” growth trend• “Everything as a Grid,” enabling integration of renewables and sustainability solutions• New types of equipment, service, and software pulling through traditional equipment
Differentiated digital foundation• Enables new business models for the energy transition future
Today’s key messages
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