Zumtobel Group Technology Update Group Technology Update Klaus Vamberszky– CTO Zumtobel Group Capital Markets Day 2016 / March 15, 2016 / Frankfurt am Main Capital Markets Day 2016

Zumtobel GroupTechnology Update

Klaus Vamberszky– CTO Zumtobel Group

Capital Markets Day 2016 / March 15, 2016 / Frankfurt am Main

Nr. 2Capital Markets Day 2016 / 15 March 2016 / Frankfurt am Main

AGENDA

� Lighting Industry quo vadis?

� Re-shaping the value chain / Technology trends

� Increasing expenditures for R&D over the last 10 years


AGENDA





Starting pointBasic strategies: Improve performance, create differentiation, take out cost

Early phase Growth phase Saturation phase

Turnover

Quantity

Performance

Do

min

an

t D

esi

gn

Trial & Error Differentiation in the

core functionality

Co

re f

un

kti

on

ali

ty

ae

de

qu

ate

ly

full

fill

ed

Differentiation in

additional functionality

Ma

rke

t sa

tura

ted

!

Improve performance

in lighting: - first absolute lms

- then lm/W

- now lm/€

cost roadmap

Phase 1

Phase 2

Phase 3


Starting point3 overlapping phases of LED transition in lighting business

Phase 1

Technology is / will shortly be equivalent / compet itive to existing technology

- Pioneers, small projects, learning phase

- „Bridge products“: Fluorescent luminaires with LED light sources

- Retrofit products (tubes, bulbs)

Phase 2

LED technology superior, cost decrease, interesting ROI

- Growing volumes @ decreasing costs

- Dedicated LED luminaires; still in old form factor & style

- Optimized LED luminaires & supply chain

Phase 3 Where are we ? How do we get there ?

New solutions, new features, marriage of Haitz & Moo re

- New form factors, new lighting products

- Additional features; further integration; complete new systems

- New use-cases, new business models

Phase LED bulb technologies LED luminaires


Value stack of IoT (Internet of Things)From the connection of people to the connection of things

Digital Service

Analysis

Connectivity

Sensors / Actors

Thing itself

The luminaire is the almost perfect thing:

- Luminaires generate the densest grid in

indoor and outdoor

- Luminaires are electrically powered

- Luminaires are situated „above the

action“ on poles or ceiling

- Even today a lot of luminaires already

contain sensors

Todays connectivity is old-fashioned andoutdated – but serves the purpose:

- Most of todays luminaires have a

wired connectivity (1-10V, DALI, DMX)

- Communication is mainly unidirectional

(information to the luminaire; 1-10V) or

very limited bidirectional (DALI; error

statement)

- Communication speed and content is

limited (small bandwith, low speed –

but enough for slow daylight dimming)

- Ecosystem is missing

+ / PRO - / CON

Source of picture: Prof. Fleisch HSG


Lighting industry development and R&D costs

Sales :

Marketing :

R&D:

Production :

Process & Transaction cost:

More & more complex contentLight sourceDriverOptics

Shorter product cyclesPermanent maintenanceMore testing & data to be generatedHigher CAPEX (mainly optics)

More ordersShorter lead times

Today

Phase 2 Results & Counteraction

Tomorrow

Phase 3

Complexity reductionPlatform thinking

- more variants- more variants- more variants

Higher complexity

& sensors& connectivity& software

SW testing

High SW development cost

SW versionsReleasesCompatibilityUpdates


Massively increasing expenditures for innovation in the last 10 yearsZumtobel Group – R&D spending

R&D Development

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

R&D (in EUR million) in % of sales

25.528.4

34.539.8

48.6

58.7

69.171.8

79.0

2.1% 2.2%

3.0%3.6%

4.0%

4.6%

5.6% 5.8% 6.0%

90.0*

6.4%

*) estimate


AGENDA





The Zumtobel Group covers a major part of the value chainStrong brands with broad market access

Lighting solution

Lighting management

(user interface & apps)

LuminaireLED driverLED module

Premium Segment*

Performance Segment

Sensors, controls, hard &

software

Budget Segment

* Market segementation Europe


Re-shaping the value chainor: Re-arranging the deck-chairs on the Titanic ?

Lighting solution

Connectivity

Luminaire

Power conv. (LED driver)

LED modulePack. LEDChip

OpticsSW, data & Intelligence

Services

Sensorics1 2

3

4

5

6

7 8 9


Chip and packageThe law of Haitz goes on !

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9


Light sources: LEDsHaitz‘ law is still on!


Module productionPure commodity

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9


Influence of CSP‘s for „Moduling“CSP‘s allow even tighter packaging than CoB‘s – but not easy to handle


OpticsRefraction replaced reflection

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9


Where do optics belong to ? Are optics part of light source value chain ?



Optics1 2

3

4

Lighting solution

Connectivity

LuminaireSW, data & Intelligence

Services

Sensorics

5


Where do optics belong to ? Or do they remain within luminaires ?

Luminaire



Optics1 2

3

4


From AC to DC – power conversion The role of the LED driver

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9


Re-shaping the value chain or: Re-arranging the deck-chairs on the Titanic ?

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9



Connectivity

Power conv. AC/DC

LED module

Sensorics

Input:230 V ACInformation

Output:LightInformation

Power conv. DC/DC



ConnectivityPower conv.

AC/DC

LED module

Sensorics

Input:230 V ACInformation

Output:LightInformation

Power conv. DC/DC


Re-shaping the value chain Let us have a look at the back-end !

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9


Another view on the value chainAllows concentration on service enablement and services

Lighting solution

Connectivity

Luminaire




Services

Sensorics1 2

3

4

5

6

7 8 9

Service

EnablementComponents Connectivity Services


The new value chainIn an easy format

Devices

Connectivity

Services enablement

Services

Gateways, RoutersLuminaires, Components

Application software (e.g. Light Management, Energy Management)

Device & Infrastructure ManagementProtocol

IoT PlatformCloud, Database, Data Analytics

net4more as key enabler for connectivity between product and product cloud based on the right and most useful protocol

IoT Platform as key enabler for Zumtobel Group and 3rd

party services

Zumtobel Group Services (e.g. NOW!)


AGENDA





Massively increasing expenditures for innovation in the last 10 yearsZumtobel Group – R&D spending

R&D Development

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16

R&D (in EUR million) in % of sales

25.528.4

34.539.8

48.6

58.7

69.171.8

79.0

2.1% 2.2%

3.0%3.6%

4.0%

4.6%

5.6% 5.8% 6.0%

90.0*

6.4%

*) estimate


More detailed split of R&D costs

1.280,3 1.243,6 1.246,8 1.312,6

1.375*

4,6%

5,6%5,8%

6,0%

6,4%

0,0%

1,0%

2,0%

3,0%

4,0%

5,0%

6,0%

7,0%

0,0

200,0

400,0

600,0

800,0

1000,0

1200,0

1400,0

1600,0

2011/12 2012/13 2013/14 2014/15 2015/16 FC

R&D cost development on Group level

Development

over the last 5

years:

Luminaires:

+10 Mio. €

Power

electronics:

+ 5 Mio. €

Software:

+ 5 Mio. €

Testing: +2

IP: + 2

Lightsource: -1

Research: -2

*) Consensus figures

R&D cost split detailed


Executive Summary

Lighting industry at crossroads• Stay with illumination

• Go beyond illumination

• Go beyond lighting

Technology Trends• Light source:

- The law of Haitz goes on; LED´s show classical semiconduct or behaviour (higher performance, lower costs, commodit y)

• Power consumption & connectivity- Lot´s of options; dominant design not clear; standard isation missing; further integration possible

• To go beyond ecosystem necessary; not yet built up- Lighting industry not an industry used to work with open s tandards and platforms

R&D costs• A high level of R&D spending will continue

- Only big and healthy companies in good position to spend

Capital Markets Day 2016 / 15 March 2016 / Frankfurt am Main Nr. 30

Documents

Zumtobel Group Technology Update Group Technology Update Klaus Vamberszky– CTO Zumtobel Group Capital Markets Day 2016 / March 15, 2016 / Frankfurt am Main Capital Markets Day 2016