annual investor conference - eaton · brands, partners with multiple suppliers of distribution...

© 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


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


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


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


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


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


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


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


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


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


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


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


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




Breadth of Offering

Innovative Products



Power of Brand. Power of Loyalty. Power of Growth.


Winning in the distribution channel – Penetration in the lighting segment




Breadth of Offering

Innovative Products



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


http://www.cooperindustries.com/content/public/en/lighting/brands/halo/led.html

http://www.cooperindustries.com/content/public/en/lighting/brands/halo/recessed.html

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&ved=0CAcQjRw&url=http://www.businesswire.com/news/home/20130822005155/en/Eaton%E2%80%99s-Cooper-Lighting-Division-Introduces-Affordable-Elegant&ei=iNjTVK-dF8yrNsujg7gF&bvm=bv.85464276,d.eXY&psig=AFQjCNGjCp_Z5WRzx8GC0XMZiHZh1VcyKA&ust=1423256069141206

http://www.cooperindustries.com/content/public/en/lighting/solutions/led/area_site.html


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





Breadth of Offering

Innovative Products




Winning in the distribution channel – Light commercial construction penetration




Breadth of Offering

Innovative Products



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



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

annual investor conference - eaton · brands, partners with multiple suppliers of distribution...

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