2014 Motion Control Market Update...Largest Product Categories in Terms of Reported Orders are Motors, Electronic Drives and Actuators. Motion Controllers Increased its Share the Most

#A3NETWORK January 22-24, 2014 | Hilton Orlando Bonnet Creek | Orlando, Florida USA #A3NETWORK

2014 Motion Control Market Update

Alex Shikany

Director of Market Analysis

Motion Control Association

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I. World Economic Drivers

II. Manufacturing Trends

III. Motion Control Results for 2013

IV. What to Expect in 2014

V. Summary and Conclusion

VI. Food & Beverage Packaging Study

VII. MCA Statistics Survey

Agenda

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

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USA Euro Area China Japan Brazil India

Faster Growth

Slower Growth

No Growth

World Economic Outlook – Percent Change in Annual Real GDP

Recession Forecast

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

USA 2.5 3.6 3.1 2.7 1.9 0.0 -2.6 2.8 1.8 2.8 1.6 2.6

Euro Area 0.8 2.2 1.7 3.1 2.9 0.4 -4.1 1.7 1.5 -0.6 -0.4 1.0

China 10.0 10.1 11.3 12.7 14.2 9.6 9.2 10.3 9.3 7.7 7.6 7.3

Japan 1.4 2.7 1.9 2.0 2.4 -1.2 -6.3 3.9 -0.6 2.0 2.0 1.2

Brazil 1.1 5.7 3.2 4.0 6.1 5.2 -0.6 7.5 2.7 3.0 2.5 2.5

India 6.9 8.1 9.2 9.7 9.9 6.2 6.8 10.4 6.3 6.9 3.8 5.1

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USA Euro Area China Japan Brazil

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USA Euro Area Japan Brazil

With China Without China

Investment Rates: Investment as a % of GDP

Investment Continues to be Much Higher in

China than Elsewhere in the World

USA and Euro Area are Expected to

Increase in 2014

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USA Europe China Japan Brazil

Improving

Conditions

2011 2012 2013

Business Confidence in Major Economies Fell in 2011, Flattened in 2012, and

Rose Mildly in 2013

Source: OECD

Business Confidence Index

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China India Japan Brazil

Canada USA Euro Zone Russia

45.0

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60.0

2009 2010 2011 2012 2013

China India Japan Brazil

Canada USA Euro Zone Russia

PMI (Three Month Moving Averages) Annual Average PMI

Manufacturing Had a Good Year in 2013, Posting Higher Numbers than 2012, and Rising

Toward the End of the Year

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Japan United States Euro Area Russian Federation

2013

Production in Manufacturing Sector (2005 = 100)

The United States and Japan Were On the Rise in 2013. Euro Area Remained Mostly

Flat and the Russian Federation Fell Slightly.

Source: OECD

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2007 2008 2009 2010 2011 2012 2013

Japan

Europe

Asia Pacific

North America

(Billions $) North America

(16%) Asia Pacific

(14%) Europe (38%) Japan (32%) Total World

2008 $1.863 $1.630 $4.424 $3.726 $11.642 2009 $1.304 $1.141 $3.097 $2.608 $8.150

2010 $1.719 $1.504 $4.083 $3.438 $10.745 2011 $2.175 $1.903 $5.165 $4.349 $13.591 2012 $2.183 $1.910 $5.185 $4.367 $13.645

2013 $2.130 $1.864 $5.059 $4.260 $13.313

Estimated Size of the Global Motion Control Market

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Orders and Shipments Contracted in 2013

NOTE: Orders and Shipments are different primarily because more MCA participating companies supply shipment data than order data for 2009 to

2013.

2009 2010 2011 2012 2013

Orders $1.525 $2.053 $2.609 $2.550 $2.409

Shipments $1.850 $2.317 $2.942 $2.936 $2.802

% North American 70.5% 74.2% 73.9% 74.4% 76.1%

2009 2010 2011 2012 2013

Orders -32.8% 29.8% 19.0% -3.4% -5.8%

Shipments -30.3% 23.4% 22.3% -1.0% -4.7%

MCA Reported Orders and Shipments in $ Billions (USD)

MCA Year-Over-Year Real Growth Rates (in Percent)

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Relative Size of Product Categories – Orders in $ Millions

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Largest Product Categories in Terms of Reported Orders are Motors, Electronic

Drives and Actuators. Motion Controllers Increased its Share the Most in 2013.

2011 2012 2013 Average

Motion Controllers 3.5% 3.6% 4.7% 3.9%

Electronic Drives (Amplifiers) 19.6% 19.5% 18.2% 19.1%

AC Drives 14.2% 13.0% 13.9% 13.7%

Motors 36.2% 35.8% 34.9% 35.6%

AC Motors 0.5% 0.6% 0.6% 0.5%

Actuators & Mechanical Systems 16.2% 17.0% 16.9% 16.7%

Sensors and Feedback Devices 4.0% 4.4% 4.5% 4.3%

Other Ancillary Components 4.1% 4.8% 4.8% 4.6%

Support & Services 1.7% 1.4% 1.5% 1.5%

TOTAL MARKET 100.0% 100.0% 100.0% 100.0%

Relative Size of Product Categories – Orders

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100%

Relative Size of Product Categories – Shipments in $ Millions

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Similar to Reported Orders, the Largest Product Categories in Terms of Reported

Shipments are Motors, Electronic Drives and Actuators

2011 2012 2013 Average

Motion Controllers 3.3% 3.2% 4.0% 3.5%

Electronic Drives 22.1% 21.6% 20.7% 21.5%

AC Drives 11.7% 11.5% 12.1% 11.8%

Motors 36.9% 35.8% 36.2% 36.3%

AC Motors 0.5% 0.5% 0.5% 0.5%

Actuators & Mechanical Systems 14.9% 15.7% 14.9% 15.2%

Sensors and Feedback Devices 3.4% 3.8% 3.7% 3.6%

Other Ancillary Components 5.8% 6.4% 6.4% 6.2%

Support & Services 1.5% 1.4% 1.6% 1.5%

TOTAL 100.0% 100.0% 100.0% 100.0%

Relative Size of Product Categories – Shipments

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2010 2011 2012 2013 Average

Motion Controllers 47.8% 43.1% -1.0% 24.4% 28.6%

Electronic Drives 12.3% 7.2% -2.7% -12.1% 1.2%

AC Drives 37.5% 45.7% -10.5% 1.1% 18.5%

Motors 21.5% 15.9% -5.8% -7.9% 5.9%

AC Motors 26.1% 37.6% 16.1% -8.5% 17.8%

Actuators & Mechanical Systems 66.9% 12.5% 1.9% -6.8% 18.6%

Sensors and Feedback Devices 69.4% -7.7% 3.2% -2.8% 15.5%

Other Ancillary Components 81.4% 87.2% 13.8% -4.9% 44.4%

Support & Services 39.0% 16.3% -20.3% -1.8% 8.3%

Total Market 29.8% 19.0% -3.4% -5.8% 9.9%

Other Ancillary Components and Motion Controllers have the Highest Average Real Growth

Rates since 2010. For 2013, Motion Controllers Grew the Most, Followed by AC Drives.

Annual Real* Growth Rates by Product Category - Orders

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Other Ancillary Components and Motion Controllers have the Highest Average Real Growth

Rates since 2010. For 2013, Motion Controllers Grew the Most, Followed by AC Drives.

2010 2011 2012 2013 Average

Motion Controllers 15.9% 34.3% -2.4% 18.7% 16.6%

Electronic Drives 11.3% 15.8% -2.2% -8.8% 4.0%

AC Drives 26.4% 40.6% -2.1% 0.5% 16.4%

Motors 19.2% 19.3% -4.6% -3.6% 7.6%

AC Motors 32.8% 57.7% 8.5% -19.6% 19.9%

Actuators & Mechanical Systems 47.4% 16.4% 4.6% -9.5% 14.7%

Sensors and Feedback Devices 29.0% 23.2% 9.1% -8.4% 13.2%

Other Ancillary Components 63.4% 64.2% 9.3% -4.9% 33.0%

Support & Services 36.7% 7.8% -7.0% 4.9% 10.6%

Total Market 23.4% 22.3% -1.0% -4.7% 10.0%

Annual Real* Growth Rates by Product Category - Shipments

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Major World Economies are Forecasted to Post Single Digit Growth in 2014.

2014 Forecasted Annual Percentage Change in Real GDP

Source: IMF World Economic Outlook

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2008 2009 2010 2011 2012 2013 2014

Forecast

2014 Forecasted

Growth Rate

$2.203 B $1.525 B $2.054 B $2.610 B $2.549 B $2.409 B $2.558 B 6.2%

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Green = Forecast

Trend-line

Reported MCA Orders

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2008 2009 2010 2011 2012 2013 2014

Forecast

2014 Forecasted

Growth Rate

$2.556 B $1.850 B $2.317 B $2.942 B $2.936 B $2.802 B $2.922 B 4.3%

Green = Forecast

Trend-line

Reported MCA Shipments

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V. Summary and Conclusion

• 2013 was a strong year for manufacturing worldwide

• Policy has eased some concern over Eurozone crisis; Flat or mild

growth expected for 2014

• 2014 is expected to end better than 2013, although some industries

will likely cool in the second half of the year

• Motion control sales contracted mildly in 2013

• Motion control orders are trending to grow 6.2% in 2014

• Motion control shipments are trending to grow 4.3% in 2014

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Free for all MCA Members

Available Next Week!

41 Pages

Overview of F&B Packaging

Innovation in the Industry

Current Trends

Automation in F&B Packaging

The Role of Motion Control

Also Examines:

F&B Packaging Companies

Packaging Machine Manufacturers

Motion Control Companies

Market Sizing and Motion Control Category Analysis

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$140.8 $132.0

$114.4

$35.2 $17.6

$-

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NorthAmerica

Asia WesternEurope

Middle East All OtherRegions

F&B Packaging Regional Shares (2013, Billions $)

The Food and Beverage Packaging Market is Worth Approximately $440.0

Billion Annually Worldwide. The Largest Regions are North America (32%),

Asia (30%), Western Europe (26%), the Middle East (8%). All Other Regions

Account for 4%.

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$- $100.0 $200.0 $300.0 $400.0 $500.0 $600.0 $700.0 $800.0 $900.0

$1,000.0

Worldwide Motion Control Component Markets for F&B Packaging (2013, Millions $)

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• Programmable Automation Controllers (PACs)

• Decreasing servo loop times

• Increasing reliability; Decrease mean time to repair (MTTR)

• Increased integration of the motion control environment

Motion Control Trends in the F&B Packaging Market

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VII. MCA Feedback Survey - Statistics

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Contact Information

Alex Shikany Director of Market Analysis

900 Victors Way, Suite 140

Ann Arbor, MI 48108, USA

Phone: (734) 994-6088

Email: [email protected]

Twitter: @AlexShikany

Web: www.motioncontrolonline.org

Documents

2014 Motion Control Market Update...Largest Product Categories in Terms of Reported Orders are Motors, Electronic Drives and Actuators. Motion Controllers Increased its Share the Most