The document discusses trends in the global HVAC market through 2020 and beyond, including: 1) China dominates global HVAC production and growth, accounting for nearly 45% of world market growth by volume. 2) Products are expected to evolve through increased energy efficiency and new technologies rather than revolutionize. 3) Data centers represent a rising market opportunity as their cooling needs grow substantially. 4) Gas boilers will continue to dominate European heating markets through 2020, though heat pumps and hybrid systems will gain share over time.

1. 2020 and beyond
Merging and
integrating markets
Chicago 26th
& 27th
January 2015

2. 2
Excellence in Market Intelligence
Heating and Cooling Markets
Agenda
• Global HVAC market and dependence on China
• Air conditioning futures – evolution not
revolution
• The new rising star – data centers and new
solutions
• How much change at product level? Energy
efficiency changes large or small?
• Powerful companies positioning themselves for
the future in hvac
• The great gap in the markets
• Threats as the cloud and software take over our
industry
2

3. 3
Excellence in Market Intelligence
China domination – production, size and
growth
3
11.4
Total ‘Million
units:
1.5 94.7 1.0 8.5 0.4
China dominates except:
• Unitary and chillers (USA)
• VRF Japan
• Moveables(Thailand)
China accounts nearly 45%of
world growth by volume:
• Brazil and USA the other main
engines

4. 4
Excellence in Market Intelligence
Products – Evolution not Revolution
4
Chilled
ceilings &
beams
Energy
efficiency
DOAS/
Indoor air
quality
Solar cooling
Smart
products
VRF
Green data
centre
cooling
Anti-
pollution
filters
Anti-
mosquito
Dedicated
Outdoor Air
Quality Systems
Solutions
provider
AC with
voice
control

5. 5
Excellence in Market Intelligence
Gas boilers and alterative heat generators
Sales volume outlook by 2020
units
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Italy UK Germany France Netherlands
n-c gas boilers c gas boilers heat pumps Hybrid heat pumps Fuel cells
 By 2020 gas condensing boilers will still dominate main European heating markets
5

6. 6
Excellence in Market Intelligence
AC : First tier
6
Gree
Daikin Mitsubishi Electric
FR
DE
IT
SP
UKOther Europe
USA/ Canada
Japan
China
FR
DE
IT
SP
UKOther Europe
USA/ Canada
Japan
China
Split
VRF
Other AC
FR
DE
IT
SP
UKOther Europe
USA/ Canada
Japan
China

7. 7
Excellence in Market Intelligence 7
Many Opportunities in Retrofit
Non-Residential Building Stock by Age, EU-27,
2011
Non-Residential Building Stock by Age, USA , 2011
Pre 1960
41%
1960 - 1990
44%
1991 - 2010 Pre 1960 1960 - 1990 1991 - 2010
15%
33%
52%
15%
EU USA
Buildings built 1960 – 1990 represent big retrofit opportunity….

8. 8
Excellence in Market Intelligence
All heading for the cloud?
8
The Cloud –
• 24 hr Universal Access
• OPEX not CAPEX
Cyber security
0%
5%
10%
15%
20%
25%
30%
35%
BEMS/BACS
Monitoring &
Management - in
the Cloud
Penetration
Source: BSRIA Estimates
Assumes 10-11%
CAGR up to 2020

9. 9
Excellence in Market Intelligence
Will controls just become another
commodity?
9
Automation companies
lose the field to the IT
software/ web giants?
How to move up the
value-chain?
New Skills Needed

10. 10
Excellence in Market Intelligence
BSRIA – more expert than the experts
(because we talk to them all!)
10
1000s sales visits/contacts at
Trade Fairs & Exhibitions
Local Partnerships
500+ BSRIA Publications
In-house engineers &
Test laboratory
Electronic journals
BSRIA’s technical library
Data collection groups
Congresses
1000s research visits/2000 telephone
and interviews each year