Steve Jones, Sales Director

Honeywell Proprietary

Honeywell.com

2

Document control number

• Why are we talking about connected homes?

• The UK picture

• The White Paper

– What we did

– The Headlines

• What is a connected home

• What the home owners said

• What the Installers said

• What the electricians said

• Moving forward

• A quick update on portfolio

• A brief view of the near future

• Questions

Honeywell.com

The current market situation

• Key fundamentals make compelling

messages

– A full set of heating controls can save 40%1 on

the heating and hot water energy cost

– Additional zoning will add the ability to save

more – every time the boiler isn’t needed you

save money

– Zoning makes the time to reach set point

shorter

• Launch of connected thermostats driving

more media interest than ever before

• More entrants into the market

• BUT we still are reporting 8 million homes

without a room thermostat

1TACMA 2013

Honeywell Proprietary

Honeywell.com

4

Document control number

What will it take

• Fitting heating controls is probably the most

important energy saving step you can take

– 84% of domestic energy consumption is heating

and hot water

– Heating controls can help you save

your customers up to £10 a month*

– Wireless controls can offer you an easy route

Honeywell Proprietary

Honeywell.com

5

Document control number

Energy saving advice

• Three ways of reducing Energy Consumption

– Reduce Waste

• Stop draughts

• Improve Insulation

• Only heat the rooms you need to

– Reduce demand

• Control some areas to a lower temperature

• Turn the thermostat down by 1 degree

– Improve efficiency

• Make the boiler produce more heat for same amount of fuel

• Is the loft insulated?

• Are your windows leaky?

• Is your heating efficient?

Use-less is the message

Honeywell.com

Why are we talking about connected homes?

• The market in 2013 and 2013 was concentrating on controls that

can be controlled by smart phones and tablets

Honeywell.com

Why are we talking about connected homes?

• But in reality - being connected is so much more…..

Honeywell.com

• And being connected is now the norm

Why are we talking about connected homes?

• Wherever you are, whenever you want

Honeywell.com

Why are we talking about connected homes?

• But along with all of this activity comes change

– Consumers have to learn new ways of doing things

– Manufacturers have to provide different products – or make old

products work in new ways

– The Service sector has to find a way to work within all of this change

– The supply chain needs to service the opportunity

– The Media has a new focus to weave into the mix

• Part of what we do at Honeywell is to make sure that we have a

full and rounded view of the market

• To achieve this – we went and asked a few questions

• The results of this activity, we want to share with you today

Honeywell.com

The process

• A rounded view means just that

• We knew as manufacturers what we thought

• But what about our customers

Our survey

looked what

three groups

of people felt

about the

smart home

and how to go

about getting

one

• There is also a lot of published data that is relevant

Honeywell.com

The white paper

Our view of the

opportunities that lie

ahead for our industry,

not just ourselves but the

installers, electricians

and home owners who

will be installing and

using the many different

things that make up

A smart

home……

Honeywell.com

The smart home is coming

• There are a number of facts that

actually point to the fact that the

smart home is actually here, and we

just haven't realised it

• The technology is in place

• We are already controlling various

parts of our lives

• Many different industries are fuelling

this growth

Honeywell.com

So, what is a smart home?

In reality, a smart

home is all of the

above – the only

variant is the degree

to which the homes

are connected.

Honeywell.com

So, how big can this become?

“Europe’s smart home market is still

niche but there is a growing interest

with an upward trend seen in the

market size”.

The key drivers are “comfort and

convenience, with lighting, blinds,

awnings, camera and entertainment

systems the major applications in

smart homes systems”.

“There is a growing trend in multi-

room control integrated with

heating” and now security!

Honeywell.com

Starting with the Home owner……

• In its 2012 report, BSRIA claimed that

“consumer awareness of smart home

products and systems was low”

• However a consumer survey carried

out by Honeywell in 2014 has

revealed that, just two years later,

“over two thirds (68%) of

homeowners are aware of the

concept of smart homes”,

demonstrating that awareness is

growing at quite a significant speed.

Honeywell.com

Homeowners said….

Nearly half of all

respondents (47%) would be

interested in having a fully connected

smart home

71% cited lowering their energy

bills and a third said it was down

to convenience, flexibility and

controlling their home to suit their

lifestyle.

66% identified heating, with 60% stating

lighting and 46% highlighting security

and access.

Over a third (38%) said integrated

heating and lighting would

be the most important thing for them in

a smart home

49% of respondents saying they thought it would be too

expensive.

11% said they didn’t feel they knew enough about smart

homes

Almost 40% said they wouldn’t know where to start,

Honeywell.com

The installer and the smart home

54% said yes, claiming that

customers are becoming

increasingly interested in home

gadgets

74% of them admitting they would like

to become a smart installer, capable of

providing fully-integrated systems.

86% said they would also be eager to

learn more about smart home

technology. In Honeywell’s consumer survey, three quarters

(76%) of homeowners said they wouldn’t know who

to look for to install a smart home

Only 18% said they would speak to their local

heating and plumbing installer or electrician.

Almost 80% stated their first port of call would be

the internet

19% of these saying they would go directly to the

manufacturer’s website

Honeywell.com

What does it mean for installers

It’s vital that installers look to their

manufacturers for guidance and training on

these areas now, while the industry is in its

infancy and the products are still new, to avoid

being left behind in future when smart

technology becomes the norm.

More than 70% of homeowners admit to using the internet as a source for all smart home related

products

71% of all installers said they would go to their local builder’s merchant to buy all smart gadgets.

Honeywell.com

The electrician and the smart home

Almost 90% of the electricians surveyed by

Honeywell knew what a smart home was

95% of respondents identified heating

controls as topping the list of smart home

appliances,

Closely followed by lighting (92%), security

(88%), energy monitors (82%) and finally

underfloor heating at (80%).

58% of electricians have been recently

asked by their customers about smart or

remote controlled technology,

37% are currently installing smart home

products and of those, only 10% covered

smart heating controls and a further 10%

lighting

100% of respondents expressed an interest in

smart home technology.

More than 60% of respondents said they would like

to become a smart installer

More than 70% expressing an interest to learn more

about connected solutions

Honeywell.com

The electrician and the smart home

A third of electricians surveyed stated that although

they have an interest in smart gadgets and

technology, they wouldn’t know where to start when

it comes to being able to offer these solutions to

their customers.

As with the installer, more than 50% said they hear

or read about smart home solutions and gadgets on

the TV or in the national press, instead of via their

dedicated electrician trade press where they would

value it more.

More than 42% also said they hear about the

products but rarely have access to any training on

how to install them.

Electrical wholesalers – which

are still the first port-of-call for 47% of electricians

when looking to buy smart technologies

More than half (53%) of electricians surveyed

recognised the need to work more closely with

other systems integrators who provide smart

home technologies

Honeywell.com

What does the future hold?

The explosion of the internet will play a leading role

and electricians and installers alike need to make

sure they maximise their online presence to remain

visible to homeowners and align themselves with

the right manufacturers of smart technology.

However, reaching this point relies on the whole

industry getting behind smart homes today –

championing the installer, electrician, wholesaler,

merchant, manufacturer and homeowner.

Smart technology will become increasingly

sophisticated and accessible as consumer demand

for connected homes grows and the market

becomes more innovative.

What’s vital is that installers and electricians stake

their place in it now, to avoid being left behind when

it’s too late.

22 HONEYWELL - CONFIDENTIAL File Number

Key insights UK – end user summary

• 3 key drivers of interest when purchasing a new ‘connected’ thermostat

Comfort

Control

Cost

People feel the cold - Home insulation and heating systems are not optimal - People feel obliged to adjust settings a lot

People respond strongly to the idea of control from anywhere. Also, seek comfort and/or savings as the end benefit

People are cost conscious and keen to avoid waste

There is a lack of understanding & awareness surrounding controls and their benefits

Individuals within families have different temperature needs throughout the home

People want simple, design-led products that provide direct home control

Many do not acknowledge/ know that a new thermostat may have an important role to play in improving heating in the home – for many, the thermostat is only replaced when the boiler is replaced

23 HONEYWELL - CONFIDENTIAL File Number

Key insights UK – summary

• Market needs to be better coordinated for the smart revolution

Manufacturer Installer

Supplier - Wholesaler

Electrician

Consumer

The market opportunity is growing and the dynamics are changing.

The connected home is here in parts we need to collaborate to deliver it !

Connected portfolio –

the story so far

Smart Zoning

Smart Zoning – Industry innovation

1 From single zone to multi-zone concept Wireless thermostat – “Upstairs-

Downstairs – Extended

(Multiple temperature sensing points; Individual time programs for each zone)

2 No need for zone valves (No system re-plumbing; Individual

control at each radiator; Easy re-programming)

3 Eliminate waste without sacrifices (No system re-plumbing; Individual

control at each radiator; Easy re-programming)

26 HONEYWELL - CONFIDENTIAL File Number

Evo - in the zone

Key insight Feature Benefit

1. Comfort Intimacy Individuals within families have

different temperature needs

throughout the home

2. Lifestyle adjustments Give me comfort- people feel obliged

to continuously adjust settings to

maximise comfort

Help me save- people are cost

conscious & keen to avoid waste

3. Intuitive UI Facilitate simplicity & give me joy –

People want simple, portable, design-

led products that seamlessly integrate

with interior

4. Remote Access

Let me control- people respond

strongly to the idea of control from

anywhere.

Zoning

Zoning – address the comfort needs

of all family members across every

room in the home

Programming - maximise comfort,

savings & control

Intuitive UI - Hassle free tailored

home system configuration &

ongoing temp adjustments made

easy

Mobile control - control your

home on the move

Quick Action programming modes

Back lit touch screen with intuitive text prompts/guides

Remote access via tablets, smart phones & PCs

Feature rich Evo delivers on top key consumer insights

27 HONEYWELL - CONFIDENTIAL File Number

Evo UI

1. Comfort Intimacy 2. Lifestyle adjustments

3. Intuitive UI 4. Remote Access

Intelligent UI addresses key consumer insights

Honeywell.com

Everyone gets zoning…

But evohome is a really sexy connected

thermostat in it’s own right

Touch screen control

Quick actions & guided scheduling

make it easy to use

Internet connectivity – including

quick actions

Full optimisation means that it also

learns your heating system and

adapts your heating for you

12 Heating zones and hot water

Applicable to any system

Honeywell evohome

29 HONEYWELL - CONFIDENTIAL

Strong position in existing domestic applications

Honeywell’s current footprint

within the home puts us in a

strong position to support

diverse range of product and

service offerings

Thank you for your time

Honeywell.com