annual investor conference - eaton · brands, partners with multiple suppliers of distribution...
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© 2015 Eaton. All Rights Reserved..
Annual Investor Conference
Revathi Advaithi, President – Americas Region, Electrical February 27, 2015
3 © 2015 Eaton. All Rights Reserved..
Eaton manages a complex and multi-layered electrical value chain
Eaton Sales Distributor Electrical
Contractor
EPC / General
Contractor OEM Electrical
Consultant Architect Owner
Application Engineers End Users Sales
Distributor Sales Specialists (DSS)
Construction Sales OEM Sales
Utilize user preference to create PULL through the distribution channel
Partner with intermediaries to PUSH product into the market
4 © 2015 Eaton. All Rights Reserved..
Distributors play an important role in Eaton’s Electrical business
• Thousands of transactions each day generate intimate customer and market knowledge
• Wide geographic coverage and local inventory to quickly service all key end markets
• Project management capability provides enhanced customer value
Retail
Distributors
OEMs
Contractors
End Customers
Eaton Electrical NA Revenue Mix
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U.S. Branch Locations
Thousands Hundreds Tens
Hundreds
National
Tens
Multi-state
1-2
County
Serving the residential, commercial, industrial, institutional, government, data communications, utilities, oil & gas, and mining end markets
National Regional Local
No. of Employees
No. of Branches
Coverage Area
Distribution in North America is highly fragmented – 1,000 companies and 10,000 branches
6 © 2015 Eaton. All Rights Reserved..
Being carried by the BEST distributors requires excellence in each of these areas
Ease of Doing Business
Broad & Capable Sales Force
Project & Service Support
Breadth of Offering
Innovative Products
Strong Anchor Brands
Competitive Distributor Program
7 © 2015 Eaton. All Rights Reserved..
With the addition of Cooper, Eaton’s product breadth is unmatched in the industry
• Eaton can now provide 65% of a typical distributor’s revenue
• Eaton products are typically #1 or #2 in most categories
• Suppliers benefit from transaction efficiencies, integrated marketing initiatives and coordinated training
Lighting fixtures & control
Distribution equipment & switchgear
Wire & cable
Other
Electrical Distributors’ Product Mix
Lamps & ballasts
8 © 2015 Eaton. All Rights Reserved..
Eaton has the largest electrical sales force in North America, focusing on all parts of the value chain
• Over 1,700 sales personnel – 60% application and segment specialists
• Sales Engineers create demand via sales calls with distributor partners
• Specialists drive specification across segments
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Close to 1,600 services and project management professionals support the entire application lifecycle
Studies
• Power quality and reliability audits • Energy management audits • Safety audits
Build
• Project management • Turnkey services • Modernization
Support
• Maintenance & aftermarket • 24x7 monitoring • Emergency response
Design
• Engineering services • Consulting services • Modeling and analysis
10 © 2015 Eaton. All Rights Reserved..
Eaton’s focus on innovative products creates end user preference and distributor loyalty
• Over 10,000 Eaton R&D professionals with intimate customer and market knowledge
• Standardized tools and processes to efficiently and reliably manage the innovation process
• Continually recognized as a top innovator by third parties
SmartWire-DT
High Performance Cable Ladder
Arc Resistant MV Drives
VaporGard LED
Innovative products that solve our customers’ biggest challenges
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Eaton has strong anchor brands and a powerful corporate brand
Data Centers Industrial Utility Commercial / Resi Machinery
Structural Solutions &
Wiring Devices
B-Line Arrow Hart
Backup Power Protection
Powerware
Solutions for Harsh &
Hazardous Environments
Crouse-Hinds MTL
Power Distribution &
Circuit Protection
Cutler-Hammer Moeller
Bussmann Cooper Power
Engineering Services
Eaton
Control & Automation
Cutler-Hammer Moeller
Lighting & Security
Halo Metalux CEAG
Wheelock
Integrated Eaton Brand and Capabilities plus Powerful and Recognized Anchor Brands
12 © 2015 Eaton. All Rights Reserved..
Our electronic tools and processes increase distributor productivity
Online pricing and product configuration
Single point online sign-on portal
Online order entry system
Online product catalog
Bid Manager My.Eaton.com PowerEdge Vistaline
13 © 2015 Eaton. All Rights Reserved..
Eaton’s new Distributor Advantage Program is driving significant growth, profitability and market leadership
0% 50% 100%
Percent ofTotal
Reward
Volume / GrowthLoyaltyBusiness Dev. FundsUse of Digital ToolsPe
rcen
t of
Tota
l Rew
ard
Financial rewards • Competitive • Volume, growth and loyalty • Business development funds
New channel organization • Regional and national focus • Single point of contact • Drive growth programs
Marketing programs • Tools • Programs • Reporting and transparency
14 © 2015 Eaton. All Rights Reserved..
Marketing program and tools to drive our messages to customers for growth
“As a distributor of the broad line of Eaton products, we have grown our business over 15% a year for 45 years. In all that time Eaton has never failed to do the right thing to build our mutual business together.”
-Bill Elliott President, Elliott Electric Supply
15 © 2015 Eaton. All Rights Reserved..
Winning in the distribution channel – Significant fuse conversion
Opportunity Large national distributor stocking multiple brands of fuses at various distribution centers around the country Approach Utilize strong brand, broad product offering, competitive program and innovative products Result • Eaton is now the exclusive supplier in the fuse category • More efficient for distributor to stock only one brand at regional
distribution centers
Ease of Doing Business
Broad & Capable Sales Force
Project & Service Support
Breadth of Offering
Innovative Products
Strong Anchor Brands
Competitive Distributor Program
Power of Brand. Power of Loyalty. Power of Growth.
16 © 2015 Eaton. All Rights Reserved..
Winning in the distribution channel – Penetration in the lighting segment
Ease of Doing Business
Broad & Capable Sales Force
Project & Service Support
Breadth of Offering
Innovative Products
Strong Anchor Brands
Competitive Distributor Program
Opportunity Local independent distributor carries multiple lighting lines and partners with Eaton in several other electrical product categories Approach Leverage Wavestream™ LED technology, strong agent support, and ability to provide a complete electrical solution to become the primary line on project opportunities Result • Eaton is now the primary supplier in the lighting category • Distributor can offer a complete Eaton electrical solution to a customer
to simplify project management and have a single point of contact
Power of Brand. Power of Loyalty. Power of Growth.
17 © 2015 Eaton. All Rights Reserved..
Winning in the distribution channel – Distribution equipment expansion
Opportunity Fast growing super-regional distributor, fully aligned with former Cooper brands, partners with multiple suppliers of distribution equipment, typically carrying only one brand at each location Approach Utilize broad sales force, breadth and scale of product offering, and existing Cooper relationship to become the preferred supplier of distribution equipment where we previously had coverage gaps Result • Distributor has chosen Eaton to be the exclusive supplier of distribution
equipment at these locations and Eaton has become the largest supplier in the category across all of their locations
• Overall relationship is enhanced, leading to additional conversion opportunities
Power of Brand. Power of Loyalty. Power of Growth.
Ease of Doing Business
Broad & Capable Sales Force
Project & Service Support
Breadth of Offering
Innovative Products
Strong Anchor Brands
Competitive Distributor Program
18 © 2015 Eaton. All Rights Reserved..
Winning in the distribution channel – Light commercial construction penetration
Ease of Doing Business
Broad & Capable Sales Force
Project & Service Support
Breadth of Offering
Innovative Products
Strong Anchor Brands
Competitive Distributor Program
Opportunity Large regional distributor carries both Eaton and a competitor to serve the commercial contractor business. Eaton generally used for more technically challenging projects, but often not the “off-the-shelf” supplier Approach Use improved customer tools, expertise on complex projects, more capable sales force, and local manufacturing Result • Eaton is now the exclusive supplier of distribution equipment at all
distributor locations • Eaton’s local inventory has increased, allowing us to serve our
customers more effectively
Power of Brand. Power of Loyalty. Power of Growth.
19 © 2015 Eaton. All Rights Reserved..
Summary
• The distribution channel is an important part of the electrical value chain
• The key to partnering with the best distributors is to excel in many different areas
• Eaton wins in the channel by leveraging our enhanced capabilities and our new Distributor Advantage Program