PRESENTED BY: PRESTON REINE, SENIOR ANALYST IHS MANUFACTURING TECHNOLOGY

Transcription

2 IHS Manufacturing Technology Presentation A g e n d a Economic update Motor market statistics Key trends and challenges for suppliers Conclusion

3 DISCOVERING MANUFACTURING TECHNOLOGY INDUSTRIAL AREAS Capital Equipment & Machinery Discrete & Process Automation Electric Motor Systems Comprised of three dedicated research areas and over 30 analysts covering electrical, electronic, electromechanical, and mechanical automation equipment types; as well as finished machinery and equipment markets. By leveraging the breadth of IHS and its experts, IHS s insight into manufacturing technology is unparalleled in key vertical markets, including automotive, power generation, oil & gas, maritime, amongst others. INFORMATION EXPERTISE ANALYTICS Industrial analysts across 8 locations worldwide Strategic Planners to Procurement Personnel 25+ years of industry coverage Team of 30+ dedicated analysts. ALL RIGHTS RESERVED. 3

4 Global economic outlook 4

5 Short term factors affecting the world economy Systematic factors Withdrawal of policy stimulus Over capacity after investment booms Sluggish export markets Increased risk aversion Structural factors Slower labor force growth Slower pace of globalization Falling commodity prices Lack of market reforms 5

6 World GDP growth will stay flat, despite 2015 projections, with 3.1% growth in Real GDP 5% Real GDP 4% 3% 2% 1% 0% -1% -2% Source: IHS Real GDP 6

7 Emerging economies still struggling Real GDP Growth Real GDP Growth - BRIC Countries 15% 10% 5% 0% -5% -10% Source: IHS India China Brazil Russia India committed to rural development rather than business incentives Key overcapacity concerns loom large in China; lower commodity prices will continue through 2017 Political issues in Russia and the Middle East are reverberating through the Eurozone. Manufacturing PMI fell to its 7-month low in March 2016, and export orders declined for the 31 st consecutive month. Venezuela, Argentina and Brazil are in substantial recessions. The worsening political crisis will extend the ongoing downturn in Brazil 7

8 China s investment-driven industrial expansion is winding down China Economic Figures 35% 30% 25% 20% 15% 10% 5% 0% -5% Source: IHS Real GDP Industrial Production Machinery Production Challenges: Opportunities: Collapsing Commodity Demand Overcapacity Stock Market Correction More investment in robotics Automation penetration rate Factory capacity consolidation 8

9 Industrial automation equipment market update 9

10 IAE 2015 and 2016 forecast comparison $199.3B $41.0 billion Motors & Generators $31.4 billion Discrete Controllers $35.6 billion Rotary Products 2015 Equipment Revenue M 32.8% Motors & Motor Controls $24.4 billion Motor Controls $19.4 billion Process Control $30.1 billion Linear Products A 34.2% Automation Equipment $17.2 billion Switchgear P 33.0% Power Transmission Equipment 2016 Regional Sales Growth 2016 Market Drivers Americas 2.2% EMEA 1.2% Rest of Asia 4.3% Japan China -2.1% 3.1% Global GDP 2.7% Growth Machinery Production 0.1% Growth Capital Expenditure -0.1% Decline 44.0% IAE Sales into Discrete Manufacturing 41.0% IAE Sales into Process Manufacturing 10

11 CAGR Industrial automation equipment market regional growth Americas $45.3 EMEA $60.8 Rest of Asia $22.3 (CAGR 15-18) 3.0% China $35.3 (CAGR 15-18) 2.9% Japan $15.9 (CAGR 15-18) 2.2% $ 45.3 billion $ 60.8 billion $ 73.6 billion Americas EMEA Asia Pacific $ 51.5 billion $ 67.7 billion $ 84.6 billion 3.3% 2.7% 3.5% World Market Revenue for IAE was $179.7 billion in

12 Proportion of Total IAE Market (%) Key industry sector weight and performance in 2016 Industrial Automation Equipment Market by Industry 9% 8.4% 6.0% 8% 7.6% 4.0% 7% 6% 5% 4% 3% 3.7% 4.9% 3.6% 6.0% 3.4% 4.4% 6.2% 6.8% 37.9% 2.0% 0.0% -2.0% -4.0% Sector Growth 2% 1% 0% -6.0% -8.0% -10.0% % of 2015 IAE 2015 Growth 2016 Growth 12

13 Machinery production growth profiles Total Machinery Production Percentage Growth Rates % Growth of machinery production measured in US $ CAGR US 9.4% 0.5% -1.8% 1.4% -0.7% 1.6% 3.7% 3.4% 1.6% Germany -4.7% 4.1% 1.6% -19.2% -0.9% 1.3% 2.5% 2.4% -1.7% China 5.7% 7.5% 6.4% 0.2% -0.3% 1.4% 2.8% 3.0% 2.0% Japan 1.4% -13.1% 1.2% -5.5% -1.1% 1.4% 2.1% 2.8% 1.4% Source: IHS; Industry Publications IHS % 25% 0% -25% -50% US Germany China Japan Percentage growth rates of machinery production in US $ Total Machinery Production Percentage Growth Rates % Growth of machinery production measured in US $ CAGR Americas 1.4% -2.4% -0.7% 0.4% 1.6% 3.3% 3.2% 3.5% 1.2% Europe Asia 1.4% 1.8% -18.2% 0.9% 2.6% 3.1% 3.0% 2.9% -0.9% Pacific 11.0% -5.1% 5.3% 0.5% -1.9% 1.9% 3.0% 6.4% 1.4% Source: IHS; Industry Publications IHS 2016 Total Machinery Production Percentage Growth Rates % Growth of machinery production measured $ and CAGR Europe ( ) -1.8% 1.9% -2.2% 0.9% 2.6% 3.1% 3.0% 2.9% 1.4% Europe ($) 1.4% 1.8% -18.2% 0.9% 2.6% 3.1% 3.0% 2.9% -0.9% Source: IHS; Industry Publications IHS % 25% 0% -25% -50% 25% 0% -25% -50% Americas Europe Asia Pacific Percentage growth rates of machinery production in US $ Europe ( ) Europe ($) Percentage growth rates of European machinery production. Comparison of $ against 13

14 Industrial motor market insights 14

15 Overview of industrial motor market 2015 forecast unit shipments World shipments by region (%) 178M Top-3 Leading Suppliers ABB Siemens Americas 28% EMEA 24% Asia 48% WEG Shipments CAGR ( ) Americas 2.2% Asia 3.0% EMEA 1.1% 15

16 Global MEPS Timeline World - Legislative Timeline: US: earliest for IE2 IE2: US & Canada IE1: China IE2: S. Korea, Φ1 IE2: S. Korea, Φ2 US: Earliest for IE3/NEMA IE2: Mexico IE2: Australia IE2: Brazil IE3/NEMA Premium : US Europe IE2: European Union, Φ China: follower IE2/GB3: China IE2: Turkey European Union, Φ2 7.5kW - 375kW IE2+VFD or IE3 Japan 'Top Runner' IE3 or better *Lot #30 Proposal* European Union 0.75kW - 375kW Exclusively IE3 European Union, Φ3 0.75kW - 7.5kW IE2+VFD or IE3 IE3/NEMA Premium : Canada IE3/GB2: China Source: IHS; IE4 Low-Voltage Motors IHS 16

17 Units (k) Unit shipment growth by efficiency class The World Market for Low Voltage Motors by Efficiency Class - Unit Shipments 2014 to ,000 20,000 Brazil starts IE2 EU starts IE2 shift EU (Phase 2) and Japan start IE3 shift EU (Phase 3) and China start IE3 shift 15,000 China starts IE2 shift 10,000 US starts IE3/NEMA Prem ium shift 2015 and beyond are estimated 5,000 Canada starts IE3/NEMA Prem ium shift Source: IHS IE1 - Standard Efficiency IE2 - High Efficiency IE3 - Premium Efficiency 2015 IHS 17

18 Low Voltage Motors Suppliers in the World WORLD (major players) ABB (inc. Baldor) Siemens WEG Regal Beloit TECO E&M/TECO-Westinghouse Leroy Somer Toshiba Shandong Huali Hyundai Heavy Industries/Ideal Hyosung Corporation NIDEC (US Motors) Next-tier Competitors Toshiba Shandong Huali Hyundai Heavy Industries/Ideal Hyosung Corporation NIDEC (US Emerson) LEZ Ruselprom Gamak GE Industrial Tech Full Simo Cantoni Motor Fuji Electric Hengshui (OX) Crompton Greaves Tatung Corporation ATB Group (Wolong) VEM Group Luan JiangHuai Anhui Wannan

19 Low-voltage motors efficiency class allocaation EFFICIENCY CLASS TRANSITIONS (UNITS) Global Low Voltage Motors - Efficiency Class Transition: 2014 to 2019 IE4 1% DC 1% Others 7% IE4 2% DC <1% Others 7% IE3 14% IE1 44% IE3 29% IE1 21% IE2 34% IE2 41% 2014 Market Size (Units) 45.8 Million Average Annual Unit Growth 2.5% 2019 Market Size (Units) 51.6 Million IHS has found that efficiency transitions often take 3-5 years until full compliance is underway. As governments work together and learn from other regions, it is expected that this timeframe will be shortened over time. 19

20 Current allocation of motor efficiency by region

21 Revenues ($M) Growth (%) Major motor applications (low-voltage motors) The World Market for Low Voltage Motors By Application - Market Breakdown and Growth 5,000 4,500 4,000 3, % 6.0% 4.0% 3, % 2,500 2,000 1,500 1, % -2.0% -4.0% -6.0% 0-8.0% Source: IHS 2014 Revenues Growth 2015 Growth 2016 Pumps, fans and compressors account for more than 75% of worldwide low-voltage motor shipments annually. 21

22 Outlook for motors and motor-driven equipment SIGNS OF PROGRESS Rebound in the construction market Rapid urbanization Increased demand for comfort technology Municipalities beginning to build budgets for infrastructure development Bodes well for water/wastewater investments CAUSES FOR CONCERN Struggles with profitability Downward pricing pressure Slowdown in the project business Overcapacity concerns loom, especially in China Rentals vs new equipment Low-cost providers still prevalent Focus on systems efficiency Downward forecast in machinery production, GDP 22

23 Supplier response to economic headwinds Increased focus on aftermarket revenues New designs; surpass minimum efficiency requirements Solutions providers Customers don t want just a motor Are all IE3 motors the same? New manufacturing techniques 3-D printing could be the future Industry

24 Efficiency: more than just a number Full lifetime cost, accessibility and environmental concerns Product advancements; smart manufacturing; 3-D printing More than just input/output 4/10 manufacturers have no visibility into equipment status 30% spend up to 4 hours/day searching for equipment 50% of suppliers only realize a problem when it s too late 24

25 Conclusion Key Takeaway: Worldwide commitment for systems efficiency is best hope for growth in the motor market amid such difficult economic times Notable actions: With a shift towards efficiency and smart manufacturing, all industrial players need to be thinking about how to simplify things for their customers by providing a full holistic solution This means that motor suppliers are looking to offer more than just a motor, but services and extra components, as well, in order to fit in with the rapidly evolving Industry

26 Questions? Contact Information: Preston Reine, Senior Analyst IHS Manufacturing Technology Phone: +1 (512)