1. Everything you wanted to know about Air Filter Sales in Europe Christine Thieringer

2. Share of World Filter Market Total Market Size 2010: $ 1.8 Billion

3. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

4. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

5. Market Partners USA Approx. 20 fabricators in 4 different markets: - commercial - wholesale - retail / residential - direct sales B2B 3 fabricators sell into all 4 segments. 2 companies sell only in retail or residential.

6. Characteristics of US Fabricators Only 1 Media manufacturer is fully vertically integrated: media – product – distribution Manufacturers of filter pockets and finished products to complete their offering: product – distribution Converters buying filter pockets / semi- finished rolls for building-up of products: converting – distribution

7. Market Partners Europe More than 100 filter fabricators in Europe, Russia, Turkey. Eastern Europe: 40 companies Western / Central Europe: 40 companies Northern Europe: 20 companies Southern Europe: 10 companies

8. Market Partners Europe

9. Characteristics of European Fabricators Media manufacturers are fully vertically integrated: media – product – distribution Manufacturers of filter pockets and finished products to complete their offering: product – distribution Converters buying filter pockets / semi- finished rolls for building-up of products: converting - distribution

10. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

11. Key Market Differences Europe: no residential filter market existing Europe: filters are considered as a technical product Europe: Wholesale distributors do not participate in the market Europe: maintenance /service companies serve after-market directly: fabricator service company end customer

12. US Channels to Market Fabricator Commercial Retail/ Residential Direct Sales / B2B Wholesale Products are similar with different performance requirements. Some fabricators focus on one channel, others participate in all three.

13. European Channels to Market Fabricator Direct Sales / B2B Commercial Maintenance Primary channel is B2B 2 nd channel are commercial / authorized distributors 3 rd channel are maintenance companies

14. Questions about the US Market Have the Retail and Wholesale segments eroded the technical focus of air filtration in the US? Have these same segments led to the commoditization of the commercial market?

15. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

16. The Products Media pads and rolls Panel filters Pocket filters Compact filters

17. Key Differences in the Markets Europe: Pocket filter are number one seller Europe: Pre-Filters are often pockets filters instead of pleated panel filters (MERV 6 – 10) Europe does not view the pleated filter as a quality product Europe: Filter rating and performance reporting requirements have greatly influenced the market (EN 779) Europe: Synthetic vs Glassfiber 50 : 50

18. Fiberglass versus Synthetic

19. Comparing Classifications

20. Pressure Drop vs. Dust Fed MERV 14 products

21. F5 and F6 become M5 and M6 Must state initial efficiency with average efficiency and measure discharge efficiency using IPA soak. The minimum efficiency is defined as the lowest efficiency among the initial efficiency, the discharged efficiency and the lowest efficiency throughout the loading procedure of the test. Changes to European Standard EN-779

22. In the current European test standard the discharged efficiency has no impact on filter classification ….that will change! Impact of EN-779 Changes on the European Filter Market

23. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

24. Quantifying the Difference Pocket Filter is no. 1 seller Pocket Filter has by far lower market share Source: Freedonia / McIlvaine

25. Market driven Changes Europe: Pocket Filters dominate the high end market for HVAC Ashrae rated products Europe: 7% annual growth rate over the past 10 years for pocket filters Europe: Rapidly moving away from charged media.

26. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

27. Market driven Changes Europe: Pocket Filters dominate the high end market for HVAC Ashrae rated products Europe: 7% annual growth rate over the past 10 years for pocket filters Europe: Rapidly moving away from charged media.

28. Agenda The market partners How they go to market The products The product mix Focus on Manufacturing Processes and Equipment

29. European Pocket Design - Welded Pocket - Top Spacer Design

30. European Pocket Design - Welded Pocket - Diamond Spacer Design

31. European Pocket Design - US Welding Equipment - Diamond Spacer and Top Spacer Design Machine Capacity 5 – 6 m/min

32. European Pocket Design - Stitched Pocket - Tapered or constant stitch loosening for free programmable pocket shape (straight, tapered, radius)

33. European Pocket Design - Stitching Equipment - Filter Pockets with tapered or straight stitch loosing and tapered or straigth or free programmable outside contour machine speed up to 24 m/min

34. European Pocket Design - Stitching Equipment - Automatic Double Bottom Seam Station with Stacker

35. Conclusions Europe: Pocket Filter Applications range from 35 to 95 % efficiency including pre-filtering Europe: Pleated filters are not considered a high quality product Europe: Pockets Filters have grown over the last decade leading to product design and performance improvements Europe: Requirement for enhanced manufacturing technologies and higher automation