NASDAQ OMX 26 th Investor Program June 21, Steve Martens VP Investor Relations

Transcription

1 NASDAQ OMX 26 th Investor Program June 21, 2011 Steve Martens VP Investor Relations

2 Molex Incorporated Key Points Designs and manufactures connectors and related products Design partner to major electronic companies around the world Invest 5%-6% of revenue in R&D to develop highly engineered products Industry leader known for providing innovative solutions Global footprint with over 60% of revenue from Asia 2

3 Connector Industry Total Available Market (US$ in billions) $65+ $45 $35 $8 $ est. Market growth rate: 5-7% Price erosion: 3-5% Molex market position: 3 rd largest (7.5% share) Top ten market share: ~54% 3 Source: Bishop & Associates, Inc.

4 Historical Growth Rate 10 Year CAGR 10 Year CAGR Calendar Yr Industry* Molex % 17.3% % 14.1% % 3.4% Molex has consistently grown faster than the market 4 *Source: Bishop & Assoc.

5 FY10 Sales By Industry Medical/Military 3% Industrial 14% Automotive 16% Consumer Elect 20% Infotech 22% Telecom 25% Well balanced by market 5

6 2010 Calendar Year Revenue Growth Year-Over- Year Growth Automotive 35% Infotech 40% Telecom 34% Consumer Electronics 31% Industrial 47% Medical / Military 50% Total 37% Industry growth estimate: 25% 6

7 Growth Rate Growth rate supported by many drivers: Emerging markets Rising internet traffic Mobile devices Enterprise refresh cycle Focus Accounts Adjacent opportunities Acquisitions Target grow rate 1.5X connector market 7

8 Number of Households (in millions) With annual income of $10,000 or more BRICs US W Europe 8 Source: Citi

9 Growth in IP Video Traffic Exabytes per month 52% CAGR

10 Growth in Mobile Devices Number of mobile internet users (millions of users) Mobile internet users projected to double Y/Y 10 Source: Cisco VNI

11 Enterprise Refresh Cycle Server projections (millions of servers) E 2011E 2012E Companies addressing aging equipment and storage needs 11 Source: BOMI.

12 Strategy in action: Focus Account Program Faster growth potential Broader customer base Increase market diversity 12

13 Focus Account Growth % of total revenue 35% 30% 25% 20% 15% 10% 5% 0% FY07 FY10 FY11 Strong source of profitable growth 13 * YTD

14 Adjacent Opportunities Opportunities in: Integrated Products Antenna LED Lighting Acoustics Characteristics: Large, growing markets Similar to connectors Manufacturing Engineering Drive connector content Low capital Good margin profile Significant opportunities beyond connectors 14

15 Acquisitions Recent Acquisitions Tean (R.F. products in China) Active Optical Cable assets from Luxtera Augment organic growth and portfolio management Long product cycle Specific technology Integrated Products Areas of interest: R.F. Medical electronics Wire and cable 15

16 What s Changed at Molex? Organization Structure From Geographic to Product focus Cost Structure Restructured the business Portfolio Management Balance long / short product cycles Evaluate projects throughout life cycle New Incentive Structure Pay for performance Balance growth and profitability Significant change in how we operate 16

17 Benefits of Reorganization Improved cost structure Annual restructuring savings $205 million Lower SG&A 18% of revenue vs. 24.4% Held R&D investment rate Lower capex 7% of revenue vs. 14% Better footprint 57% of manufacturing space in low cost countries Added footprint in high growth Asia Significant benefits more to come! 17

18 What s Next? Continue to drive growth Improve return on R&D Drive supply chain and operational improvements Implement another price increase Stronger portfolio management Tuck in acquisitions focused on technology 18

19 Cash Flow Strong record of generating cash Net cash position Historically self-financed the business Substantial Tangible Book Value Credit Facility provides flexibility Five Year / $350 million Target 100% of Net Income 19

20 Dividend History Annual dividend per share Annual Dividend $ Dec 10 Qtr Approximately 40% NIAT payout ratio / premium yield to S&P Jun 11 Qtr 20

21 Financial Summary FY11 est.* FY10** Change Net revenue $3,589 $3, % EPS (non-gaap) $1.72 $ % Significant year-over-year improvement *FY11 est. based on mid-point of guidance **See GAAP to non-gaap EPS reconciliation 21

22 Return on Net Assets Trend* Trailing 12-months *Operating income excluding restructuring and special charges Fixed assets + Inventory + A/R A/P Earning our Cost of Capital 22 *See GAAP to Non-GAAP reconciliation

23 Summary Attractive market characteristics Significant trends driving growth Continue to realize benefits of new organization Strong operating results Ability to generate significant cash Committed to dividend 23

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25 Forward-Looking Statement Statements in this release that are not historical are forward-looking and are subject to various risks and uncertainties that could cause actual results to vary materially from those stated. Words such as anticipates, expects, believes, intends, plans, projects, estimates, and similar expressions are used to identify these forwardlooking statements. Forward-looking statements are based on currently available information and include, among others, the discussion under Outlook. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions including those associated with the operation of our business, including the risk that customer demand will decrease either temporarily or permanently, whether due to the Company's actions or the demand for the Company's products, and that the Company may not be able to respond through cost reductions in a timely and effective manner; the risk that the value of our inventory may decline; price cutting, new product introductions and other actions by our competitors; fluctuations in the costs of raw materials that the Company is not able to pass through to customers because of existing contracts or market factors; the availability of credit and general market liquidity; fluctuations in currency exchange rates; the financial condition of our customers; the challenges attendant to plant closings and restructurings, including the difficulty of predicting plant closing and relocation costs, the difficulty of commencing or increasing production at existing facilities, and the reactions of customers, governmental units, employees and other groups, the challenges attendant to plant construction; the ability to realize cost savings from restructuring activities; the outcome of legal proceedings and losses resulting from unauthorized activities in Molex Japan. Other factors, risks and uncertainties are set forth in Item 1A Risk Factors of the Company s Form 10-K for the year ended June 30, 2010, and the Form 10-Q for the quarters ended September 30, 2010 and December 31, 2010, which are incorporated by reference and in other reports that Molex files or furnishes with the Securities and Exchange Commission. Forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Actual outcomes and results may differ materially from what is expressed in these forwardlooking statements. As a result, this release speaks only as of its date and Molex disclaims any obligation to revise these forward-looking statements or to provide any updates regarding information contained in this release resulting from new information, future events or otherwise.

26 Non-GAAP Financial Measures In Molex Incorporated s ( Molex or the Company ) conference call on May 3, 2011 regarding the Company s financial results for the fiscal quarter ended March 31, 2011 and the following slides, Molex may refer to non-gaap financial measures to describe earnings for such periods excluding the items referenced in the relevant slides used during this conference call. This is in addition to disclosing the most directly comparable measure for such periods determined in accordance with generally accepted accounting principles, or GAAP. Molex believes that these non-gaap financial measures provide useful information to investors because they provide information about the estimated financial performance of Molex s ongoing business and provide for greater transparency of supplemental information used by management in its financial and operational decision-making. These non-gaap financial measures may be different from non-gaap financial measures used by other companies. Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Investors are encouraged to review the relevant slides reconciling the non-gaap financial measures intended to be used in the conference call to the most comparable GAAP measure.

27 Non-GAAP Measure (US$ in thousands) Quarter Ended Mar 2011 Dec 2010 Sep 2010 Jun 2010 Mar 2010 Income from operations $98,311 $109,288 $112,478 $62,951 $62,256 Restructuring costs and asset impairments Unauthorized activities in Japan Non-GAAP income from operations ,543 9,068 2,855 2,713 5,542 4,768 8,032 $101,166 $112,001 $118,020 $94,262 $79,356 Non-GAAP income from operations is a non-gaap financial measure. We refer to non-gaap income from operations to describe income from operations excluding the items referenced above. We believe that non-gaap income from operations provides useful information to investors because it provides information about the estimated financial performance of Molex s ongoing business. Non-GAAP income from operations is used by management in its financial and operational decision-making and evaluation of overall operating performance and segment level core operating performance. Non-GAAP income from operations may be different from similar measures used by other companies.

28 Full Year GAAP To Non-GAAP Fiscal years ended Jun Earnings (loss) per share $0.44 Restructuring costs and asset impairments 0.53 Loss on unauthorized activities in Japan 0.10 Tax adjustment stock compensation 0.03 Goodwill impairment - Non-GAAP earnings per share $1.10 Non-GAAP earnings (loss) per share is a non-gaap financial measure. We refer to non-gaap earnings (loss) per share to describe earnings (loss) per share excluding the items referenced above. We believe that non-gaap earnings (loss) per share provides useful information to investors because it provides information about the estimated financial performance of Molex s ongoing business. Non-GAAP earnings (loss) per share is used by management in its financial and operational decision-making and evaluation of overall operating performance and segment level core operating performance. Non-GAAP earnings (loss) per share may be different from similar measures used by other companies.