2010 Green Product Portfolio

Transcription

1 2010 Green Product Portfolio

2 Forward Looking Statements This presentation contains statements that we believe are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of Forward-looking statements generally can be identified by the use of words such as may, will, expect, intend, estimate, anticipate, believe, continue, guidance, or words of similar meaning. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those anticipated as of the date of this release. Factors that could cause such a variance include the following: significant volatility in raw material prices; competitive pressures on the company s businesses; inability to implement pricing actions; negative impact of future pension contributions on the company s cash flow; instability in the company s electric motor and water products markets; further weakening in housing construction; further weakening in commercial construction; timing of any recoveries in housing or commercial construction; a slowdown in the Chinese economy; further adverse changes in customer liquidity and general economic and capital market conditions; the impact of acquisition accounting or non-gaap financial measures on the company s financial statements or difficulties in integrating the China acquisition, and realizing future growth and profit expectations. Forward-looking statements included in this press release are made only as of the date of this presentation, and the company is under no obligation to update these statements to reflect subsequent events or circumstances. All subsequent written and oral forward-looking statements attributed to the company, or persons acting on its behalf, are qualified entirely by these cautionary statements. This presentation contains certain non-gaap financial measures as that term is defined by the SEC. Non-GAAP financial measures are generally identified by Adjusted (Adj.), Non-GAAP or Before Restructuring. 2

3 Cyclone Sales Growth 20% of commercial units in CAGR = 20.8% Units

4 High Efficiency Water Heating Technologies Tankless Solar Thermal High Efficiency Gas Hybrid Electric Hybrid Gas 4

5 High Efficiency Water Heating Technologies Tankless Solar Thermal High Efficiency Gas Hybrid Electric Hybrid Gas 5

6 U. S. Tankless Industry (000s) U.S. Forecast Source: AHRI, A. O. Smith 6 Marketing Statistics

7 Tankless Models Direct Vent Brings in clean air from the outside while combustion gases are exhausted to the outside Energy Efficiency Up to 84% thermal efficiency; Energy Star models available Continuous Hot Water Continuous supply of hot water up to 9.8 gallons per minute Comprehensive Line Full line of models: indoor and outdoor, natural gas and propane Electronic Display User-friendly control designed for easy access, monitoring and diagnostics 7

8 U. S. High Efficiency Gas Tank Market (000s) 1200 U.S. Residential Forecast Source: AHRI, A. O. Smith 8 Marketing Statistics

9 High Efficiency Gas Development Game changing Effex water heater Highest efficiency (.70 EF) atmospheric water heater for direct retrofit applications Same venting material Same footprint Feature rich 9

10 Hybrid Gas Tankless models appeal to consumers who desire endless hot water, but have their deficiencies especially due to the delay in delivering hot water in the first 10 to 15 seconds after opening the tap Excessively waste water Cold water sandwich Conventional models are in most U.S. homes and provide large quantities of water, but can run out The hybrid combines the best features of both technologies 10

11 High Efficiency Gas - Hybrid Energy Efficiency Patented condensing system delivers 90% thermal efficiency Electronic Display User-friendly innovative control with multiple lifestyle modes Improved Hot Water Delivery No minimum flow rate No cold water sandwich Less water wasted Lower Installed Costs Utilizes PVC venting and existing ½ gas line Designed for the Way You Actually Live Proprietary engineering to accommodate both peak demands and continuous flow Hybrid Technology State-of-the-art technology beyond conventional and tankless 11

12 U. S. Heat Pump Market (000s) Source: BRG Consult Heat Pump Water Heater Forecast

13 Hybrid Electric Development Energy Efficiency EF in excess of 2.0 conserves energy Automation Hybrid mode automatically adjusts from compressor to element depending upon heat requirements Dehumidification Absorbs environmental heat and transfers it to storage tank, cooling and dehumidifying the ambient air LCD Display User friendly control designed for easy interaction Backup Heating Elements Electric elements heat water when in Conventional Electric or Hybrid modes 13 Choice of Modes High Efficiency, Hybrid, or Conventional Electric mode to match heating requirements to environmental conditions

14 Commercial Heat Pump Development How Does it Work? Absorbs ambient heat from the surrounding air to heat water using HVAC compressor and R134A refrigerant Easy to Understand Resembles and operates very similarly to a packaged commercial HVAC heat pump Bonus Air Conditioning Cools and dehumidifies surrounding ambient air Energy Efficiency Saves 50% to 80% of hot water energy cost 14

15 U. S. Solar Thermal Market (000s) Source: BRG Consult Solar Thermal Forecast

16 Residential Solar Thermal Development How Does it Work? Solar radiation heats a flat plate collector. The thermal energy is passed to a heat transfer fluid Environmentally Friendly 1/10 th the surface area of solar thermal collectors can produce the same amount of energy as photovoltaic solar collectors at 1/8 th of the cost Energy Savings A properly sized solar thermal system can provide more than 60% of the energy needs for water heating cost free 16

17 Commercial Solar Thermal Pioneered in the European solar market First of its kind for commercial water heating applications in the U.S. 17

18 New Centurion Pro Pump Motor Single-Speed, Two-Speed, Three Phase Improved cooling longer life Better bearing protection longer life Better wiring access easier installation Business Won 12,000 units ($1.2M) at Hayward Working with Pentair and Jandy for 2010 season 18

19 Energy Efficiency Strategy $70* $125* $425* Traditional Single Speed Premium 2 Speed Variable Speed Single Speed Avg. Efficiency = 68% Efficiency Gains of 12% running longer on Low Speeds Operating Savings of 30~65% over Single Speed Motors Flexible Can be run at Optimum Speed Efficiency range 80% Operating Savings of 30-90% over Single Speed Motors * Average Selling Price 19

20 AOS Comfort Series 20

21 Residential Hermetic Variable Speed 59 frame IPM for Bristol Completed in just 3 weeks and delivered March 2 nd Seeking IP protection on design Preliminary tests found 2 SEER point improvement 21

22 Energy Efficient Products 40% of China water heater sales are highest energy efficiency rating! 25% of water products sales exceed minimum energy efficiency standards 9% of electrical products sales exceed minimum energy efficiency standards 22

23 Investment Case Leader in Commercial and Residential Water Heaters Record 2009 EPS, in spite of Significant Volume Declines Strong Balance Sheet and Cash Flow China/Asia Energy Efficient Products 23

24 Thank you!

25 Investor Contact Patricia Ackerman Vice President, Investor Relations and Treasurer