Haier AC Presentation

30th July 2014

Brief of Haier Group

Global Manufacturing Capacity

Historic Development of Haier Air Conditioning

Product Range

Industry Trend and Haier Air Conditioning Focus

Quality Assurance System

Brief of Haier Air Conditioning Division

Contents

5 strategic stages

• Focus on domestic growth• Building No.1 brand through ref. with TQC system

• Being open- Internally, organization change from triangle to reversed triangle structure- Externally, being fully integrated horizontally and vertically - R&D - SCM - Production - Sales & Marketing

• Global brand building• Business model - cooperation aligning with industry peers -Global partner, M&A (SANYO, FISHER&PAYKEL)

•Three in one framework in overseas market•Expanding from

ref. to full line up of appliances• Starting export business

Brand BuildingDiversification

Internationalization

Global Branding

Stage of Internet Era

- Localized R&D- Localized production- Localized sales & marketing

Strategic Stages of Haier Group

The Internet era is a diverse and unconventional time, where “one size fits all” products and solutions simply aren’t enough. Customers want to be treated as individuals and respected for who they are.

Everyone wants their unique lifestyle acknowledged . That is why Haier listens closely to you in order to gain a genuine understanding of what is going on in your life and what is on your mind. So each of you can get the smart home experience you deserve: be it simple, sophisticated, organized or enjoyable.

As a worldwide industry leader, Haier innovates beyond products and solutions and turns the organization into a wholly connected platform. In doing so, internal and external resources are connected quickly and easily. We believe only by doing so, we can best meet our consumers’ expectations in this rapidly evolving world.

Be part of the Haier Network. Create new possibilities.

Haier Brand Vision in Internet Era

Year 2013, Haier total sales reached 29.4 billion USD.

1984… 1991… 1998 … 2005 2006 2007 2008 2009

280

260

240

220

200

180

160

140

120

100

80

60

40

20

0

Unit： USD100 million

128139

162175

2010 2011 2012

191208

232253

Haier Business Size

294

2013

Haier Main Business

Refrigeration

Digital Products

Kitchen & bath room

CAC Real EstateDistribution channel

New energy Financial serviceLaundry

DAC

Medical purpose low temperature solution

Haier Group Main Business

Consumer Solution

Commercial Solution

Service Solution

Real Estate Solution

Haier Global NetworkHaier has built up its infrastructures globally to meet the customers’ quickly evolving demands, including R&D centers, production facilities, trading companies and sales networks etc.

Haier’s five R&D centers around the world have forged strategic partnerships with first-class suppliers, research institutions, and prestigious universities to create an innovative ecosystem composed of internal and external scientists and engineers connected by virtual and physical networks.

Brief of Haier Group

Global Manufacturing Capacity

Historic Development of Haier Air Conditioning

Product Range

Industry Trend and Haier Air Conditioning Focus

Quality Assurance System

Brief of Haier Air Conditioning Division

A history of technology innovation & global business expansion

Historic Development of Haier Air Conditioning

Qingdao Qingkong Air Conditioner Factory China 1ST split air conditioner

Qingdao Qingkong Air Conditioner Factory was

merged by Haier Group Haier introduced the 1ST inverter air conditioner in

China Haier got ISO9001 Certificate by DNV In the same year, Haier acquired its 1st export business to Italy

Introduced 1st DC inverter air conditioner in China

EPA released energy star to Haier air conditioner Starting export to Japan DC inverter with R410A technology

Introduced intelligent air conditioner with the

function of security, monitoring and management functions.

Focusing on indoor air quality features, introducing the models with formaldehyde elimination function and PM2.5 elimination function

1985

1993

1994

1998

2000~

2003

2010

2011~

2012

2013~

2014

Launching WI-FI air conditioner in China, Italy and South Asia Keeping 15% market share in America for WAC and acquiring Top Five ranking in market share in Italy

Innovation & Globalization

Industry Trend and Haier Air Conditioning Focus

① OVERSEAS EXPANSIONExpand overseas business, increasing the contribution of overseas business to the total sales for strengthening the competitive power from business scale.

② INTERNATIONAL SUPPLY CHAINFocusing on the competitiveness of building up international supply chain

Globalization

① HUMAN RESOURCESOpen to outside human resources, welcoming specialists from industry

② COOPERATION & COMPETITIONOpen to horizontal and vertical cooperation aiming to synergize business strengths

Business model – Open minded cooperation with industry peers

Smart solution

Industry Trend and Haier Air Conditioning Focus

① END USERS ASPECTS

② DISTRIBUTORS/INSTALLERS ASPECTS

③ ENVIRONMENT ASPECTS

Domestically, Haier is running 9 factories, 1 of which is MHAQ, a JV between Haier and Mitsubishi Heavy.Total production capacity is19 million sets per year.

Unit: K Sets

JiaozhouQingdaoDalian

Huangdao MHQACWuhan

HefeiChongqing

Zhengzhou

Global Manufacturing Capacity

Factory WAC Split Unitary Others

Qingdao 0 2,000 0 0

Huangdao 250 0 200 550

MHAQ 0 0 1,000 0

Jiaozhou 250 2,750

Dalian 2,000 0 　 　Wuhan 2,000

Chongqing 　 3,000 　 　Hefei 2,000

Zhengzhou 　 3,000 　 　Total 2,500 14,750 1,200 550

RAC CAC

In Overseas markets, Haier is running 6 manufacturing plants. Total production capacity around 1 million sets per year.

Country Capacity

Pakistan 500

Thailand 240

Tunis 80

Bangladesh 30

Nigeria 100

Algeria 50

Unit:K Sets

Total: 1,000

Global Manufacturing Capacity

Product Range

Categories Description Remark

By usage Residential, light commercial and commercial

By space 5~10000㎡By product group Air treatment, Window, Split, Packaged, MRV & Chilled

water products

By product category Air purifier, dehumidifier, window air-con, split high wall, cabinet, cassette, duct, US duct, PTAC ,console, convertible

By refrigerant R22, R410A, R32, R134a

By technology On-off, DC inverter; oil free centrifugal

By climate type T1 &T3

By different energy efficient standard

A~C class for Latin America3 star level for Middle EastSCOP and EUROVENT for EU

Quality Assurance System

① Full PLM procedure perspective

② Production perspective

③ Field feedback

④ Modulized design (Supplier)

A stage by stage and closed loop procedure and system for quality control

Quality Assurance System

Investment in hardware for R&D

The user experience center can test split, floor standing, window, convertible, cassette and duct air conditioners, dehumidifier, chiller and so on, with cooling capacity from 200W to 95000W. The operating condition can be adjusted for temperature from -25 to 60 and humidity from 20% RH to 95% RH (Relative Humidity).℃ ℃

Height drop testing towerAll-weather simulation and user comfort evaluation labAcoustic lab with operating condition (SEMI-anechoic)

User experience center has planned 127 laboratories with 76 labs in running already, among which 71 labs are for CBU testing and 5 labs are for specialized test on parts, including 54 psychrometric labs, 1 calorimeter lab, 1 user comfort evaluation lab, 3 semi-anechoic labs, 2 EMC labs, 1 heat exchanger lab, 2 compressor labs etc.

Global certifications

Quality Assurance System

Thank You