Jefferies 2013 Global Technology, Media and Telecom ... · Electronics Automotive Electrical ......
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Jefferies 2013 Global Technology, Media and Telecom Conference May 8, 2013 New York City, NY
Transcript of Jefferies 2013 Global Technology, Media and Telecom ... · Electronics Automotive Electrical ......
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Jefferies 2013 Global Technology, Media and Telecom Conference May 8, 2013 New York City, NY
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Safe Harbor
“Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995.
Comments made during this presentation include forward-looking statements. These statements are subject to various risks and uncertainties, and as a result, actual results may differ materially from those expressed in the forward-looking statements. A discussion of these risk factors may be found in Littelfuse quarterly and annual reports filed with the SEC.
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The #1 Brand in Circuit Protection— Emerging Player in Power Control and Sensing
Electronics
Automotive
Electrical
Littelfuse has the broadest and deepest portfolio of circuit protection products serving three major market segments.
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Littelfuse Protects Against Common Threats to Electrical Circuits and Components
Overcurrent Protection
Overvoltage Protection
Power Monitoring and Protective Switching
Power Cross
Overloads & Short Circuits
ESD Protection
Lightning Protection
Equipment Protection
Ground-Fault Protection
Power Distribution and Control
Mining Control Consoles
Power Distribution Centers
Every product that uses electrical energy needs circuit protection to ensure safety, reliability and performance.
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Our Customers Are Global Market Leaders
LEADING OEMs EMS/ODM TIER 1 AUTO
Global Distribution Partners
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The Only Company to Offer a Complete Range of Circuit Protection Technologies
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Corporate Strategy: 2013 to 2017
Leverage our global leadership position in circuit protection to double our business by 2017 and become a leader in power control and sensing
Mission
PROTECT CONTROL SENSE
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Corporate Strategy: Target Growth Areas
STRATEGIC GROWTH AREAS
PROTECT CONTROL SENSE
Megatrends Value of Human Life Efficiency/Green Connected/Communication Predictive/Preventative Systems Globalization
GROWTH AREAS
Protection Relays
Custom Electrical Centers
Industrial Electronic Modules/Controls
Sensors Commercial Vehicle
Products
PROTECT AND GROW THE CORE Drive Lean Initiatives
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Electrical Growth Driven by Protection Relays and Custom Products
Revenue Operating Margin
Note: 2008 Figures presented on same basis as company’s current segment reporting.
$63
$132 21% CAGR
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Electrical: Protection Relays and Custom Products
Growth Drivers Growth in Canadian potash mining
Expansion into new geographies
Penetration into oil & gas, industrial and marine markets
Increasing production capacity for custom products
38% CAGR
Custom Products
Protection Relays
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Electrical: Solar is Rebounding
24% CAGR
Growth Drivers New products driving market share gains
Growth in U.S. and India
New designs for emerging applications – progress to 1500 Volt DC systems
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Electronics: Strong Margin Performance Despite Weak Market Conditions
Revenue Operating Margin
Note: 2008 Figures presented on same basis as company’s current segment reporting.
$330 $330
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Electronics: Focusing on Higher Margin Industrial Niches
Why These Markets are Attractive? We have the base technologies We can modify these products as needed for
target applications High quality, reliability and performance We have a strong background with regulatory
agencies Less competition vs. components Higher margins
Target Markets Telecom Infrastructure Building Power Distribution Outdoor LED Lighting Industrial Motion Control
and Industrial Heating
Switching Thyristors, Triacs, SCRs
IEC 61643 SPD •Stacked MOV + thermal disconnect/indication •Triggered spark gaps, Large GDT
LED SPD module
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LED Lighting: High Growth Opportunity
PLED (Silicon Switching Device) TVS Diode MOV
Electronic Fuse Electrical Fuse PTC
Source: Digitimes Research Feb 2012
29% CAGR
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Automotive: Organic Growth + New Platforms
Operating Margin
Note: 2008 Figures presented on same basis as company’s current segment reporting.
Revenue
$137
$206 11% CAGR
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Automotive Organic Growth Drivers
25% CAGR 17% CAGR
Leader in high-growth Asian markets
Increasing investment in local resources
More high current loads
Electrical architecture change
More hybrid and electric vehicles
High Current Fuses Asia
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Commercial Vehicles: Acquisitions Expand Offering and Bring Deeper OEM Relationships
ELECTRICAL PROTECTION ELECTRICAL SWITCHING
Con-Ag Focus Commercial Vehicles
(CVP)
POWER DISTRIBUTION
Heavy Truck Focus
Presenter
Presentation Notes
Littelfuse core products provide protection of the delivery of electrical energy. For the Off Highway Truck and Bus Markets, we have extended this focus to include fuse holders and power distribution centers – the market is looking for innovation, value, and new technologies and Littelfuse is delivering with products like the FLEC (Flexible Electrical Center), and the sealed fuse holders, shown here Cole Hersee has been in the business of safely and reliably switching electrical power. They have a large portfolio of products for various switching needs. Their market is Commercial Vehicles (OTB). Cole Hersee has been extending from their base product line (electro-mechanical switches) into the areas of solid state and electronic programmable products. Shown here are several of their newer solid state FLEX modules, Battery Low Voltage modules, and Smart Battery Isolators. All these products are designed and manufactured to be sold into the Off Highway Truck and Bus markets.
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Hamlin Acquisition: A Major Step Forward to Build a Global Sensor Platform
Reed Switches
Reed Relays
Sensors
Standard Products
Speed and Direction Safety Utilities and Fluid
Management Reed switches Reed relays Catalog sensors
Automatic transmission speed sensors Actuator position Gear shifter position Cam & crank sensors Fan speed sensing
Seatbelt buckle and tension sensors Crash sensors Seat position sensing
Remote utility meter reading counters & tamper detection Industrial sensors Fluid level sensors
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Hamlin: An Excellent Fit With Littelfuse
AUTOMOTIVE
AUTOMOTIVE
Sensing AUTOMOTIVE
Sensing
AUTOMOTIVE
Protection
More Content Per Vehicle
ELECTRONICS
Protection ELECTRONICS
Sensing
Leveraging Distribution Channels
INDUSTRIAL CONSUMER
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Strong 10 Year Growth Record
10 year CAGR Sales 9% Operating Income 19% EPS 22%
Note: 2012 EPS excludes $0.43 of special charges.
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Sales Growth Targets
Organic
Acquisition
Total
4%
5%
9%
Historical
5%
10%
15%
2013-2017
Annual Sales Growth Targets
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Targeted Revenue Growth
Today: 2012 Revenue = $668 million
Passives
Semis Fuses
Relays/ Custom
Commercial
Passenger
Circuit Protection 73%
*Power Control 25%
Sensing 2%
2017 Targets: Revenue = $1.3 - $1.4 billion
Circuit Protection 46%
*Power Control 39%
Sensing 15%
*Power control includes commercial vehicle products, protection relays, custom products and power semiconductor products
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Cash Flow & Capital Structure Targets
Cash Flow Model
Operating Cash Flow 16-18%
Capital Expenditures (4%)
Free Cash Flow 12-14%
Uses of Free Cash
Acquisitions
Dividends
Share Repurchase
65%
20%
15%
Target Capital Structure
Leverage = 1.0x – 2.5x EBITDA
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Committed to Increasing Shareholder Value
Grow organically faster than our markets – Take recently-acquired products into new geographies and end markets – Focus on faster-growing niches within core circuit protection
Double the pace of acquisitions – Take advantage of strong balance sheet and free cash flow – Devote more resources to sourcing targets in our strategic growth areas – Seek larger consolidating plays within core circuit protection
Sustain high teens operating margin – Increase pace of lean activities – Focus growth investments in higher margin segments – Rationalize footprint /cost structure as necessitated by further acquisitions
Improve return on investment – Drive higher inventory turns through lean activities – Grow new platforms that are less capital intensive – Move to more efficient capital structure
Return excess cash to shareholders – Increase the dividend annually – Repurchase shares opportunistically
