Investor Presentation. February 2018

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Transcription:

Investor Presentation February 2018 1

Forward Looking Statements Important Information About Littelfuse, Inc. This presentation does not constitute or form part of, and should not be construed as, an offer or solicitation to purchase or sell securities of Littelfuse, Inc. and no investment decision should be made based upon the information provided herein. Littelfuse strongly urges you to review its filings with the Securities and Exchange Commission, which can be found at investor.littelfuse.com/sec.cfm. This website also provides additional information about Littelfuse. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. The statements in this press release that are not historical facts are intended to constitute forward-looking statements entitled to the safe-harbor provisions of the PSLRA. These statements may involve risks and uncertainties, including, but not limited to, risks relating to product demand and market acceptance; economic conditions; the impact of competitive products and pricing; product quality problems or product recalls; capacity and supply difficulties or constraints; coal mining exposures reserves; failure of an indemnification for environmental liability; exchange rate fluctuations; commodity price fluctuations; the effect of Littelfuse, Inc. s ( Littelfuse or the Company ) accounting policies; labor disputes; restructuring costs in excess of expectations; pension plan asset returns less than assumed; uncertainties related to political or regulatory changes; the integration of the recently acquired business of IXYS Corporation ( IXYS ) and the risk that expected benefits, synergies and growth prospects of the acquisition of IXYS may not be achieved in a timely manner, or at all; and other risks which may be detailed in the Company s Securities and Exchange Commission filings. Should one or more of these risks or uncertainties materialize or should the underlying assumptions prove incorrect, actual results and outcomes may differ materially from those indicated or implied in the forward-looking statements. This release should be read in conjunction with information provided in the financial statements appearing in the Company s Annual Report on Form 10-K for the year ended December 31, 2016. For a further discussion of the risk factors of the Company, please see Item 1A. Risk Factors to the Company s Annual Report on Form 10-K for the year ended December 31, 2016. Use of Non-GAAP Financial Measures The information provided in this presentation includes certain non-gaap financial measures, including Adjusted Earnings per Share. This non-gaap financial measure should not be considered in isolation or a substitute for the comparable GAAP financial measures. A reconciliation of this non-gaap financial measure to the most directly comparable GAAP financial measure is included in the appendix of this presentation. 2

Littelfuse: PROTECT CONTROL SENSE Designer, manufacturer, and seller of components and modules for circuit protection, power control, and sensing Focused on improving the safety, reliability and performance of our customers products and systems that use electrical energy Global footprint of sales, manufacturing and product development across 15+ countries Exceeded $1.2 billion of annual sales in 2017 Strong operating margins and cash flow generation 11,000+ dedicated and innovative employees Headquartered in Chicago, IL LFUS L I S T E D NASDAQ 3

The #1 Brand in Circuit Protection Expanding Player in Power Control and Sensing Electronics (64%*) Passive Products Semiconductor Products Sensor Products Automotive (29%*) Passenger Car Fuse Products Automotive Sensor Products Commercial Vehicle Products Industrial (7%*) Fuse Products Protection Relays Custom Products Littelfuse serves more than 100,000 end customers across three major market segments *Pro Forma 2017 CY revenue including IXYS 4

2017 Enterprise Strategy: Building On Success to Continue Double Digit Growth Leverage Our Position Within Global Mega Trends Safety Energy Efficiency Connectivity Grow Circuit Protection Protect Control Sense Double Sensor Platform Accelerate Power Control Accelerated Organic Growth 5% - 7% Complemented with Strategic M&A 5% - 7% 5

Driving Double Digit Revenue Growth Accelerate Organic Growth Continue Strategic Acquisitions Content and Share Gains Cross Segment Opportunities Accelerated Organic Growth Underpenetrated Geographies and Markets Increased Innovation 6

IXYS Acquisition Global Player in Power Semiconductors Strategic Rationale Significant expansion into industrial electronics OEM markets Increased long term penetration of power control products into automotive markets Financial Highlights Closed January 17, 2018 $343m revenue CY ended 12/31/17 Accretive to 2018 Adjusted EPS Capture high growth end-markets such as renewable energy, EV charging infrastructure and industrial motor drive Economies of scale to leverage technology and customer facing operational structures Targeting more than $30M of annualized cost savings by the end of 2019 Long term revenue synergy opportunities given companies complementary offerings 7

Electronics Segment Overview $662M 2017 Revenue Passive Products Semiconductor Products Sensor Products Long term organic revenue growth rate: 4-6% Market Information ~ $4.0 Billion market* Growing number of applications requiring circuit protection Market need for innovative power control products Electronification Brand strength / recognition Smart / connected devices (IoT) Legislation and consumer demand driving energy efficiency Drivers LFUS Competitive Advantage Product portfolio breadth Global presence and customer access Diversified customers and end markets Strategic channel partnerships *Company estimates, excludes impacts of IXYS acquisition 8

Automotive Segment Overview $453M 2017 Revenue ~ $2.5 Billion market* Passenger Car Fuse Products Automotive Sensor Products Commercial Vehicle Products Long term organic revenue growth rate: 7-9% Market Information Content increase drives growth in excess of car builds OEMs value supply chain on a global basis Electrification of vehicles Global presence Safety focus Brand reputation and quality Increase in comfort and assist functions Autonomous driving Drivers LFUS Competitive Advantage Close OEM and Tier 1 engineering relationships Product breadth Technical expertise *Company estimates 9

Industrial Segment Overview $106M 2017 Revenue ~ $1.5 Billion market* Fuse Products Protection Relays Custom Products Long term organic revenue growth rate: 2-4% Market Information GDP growth, adjusted for negative impact of oil & gas and mining Current portfolio largely North America based Heavy industry (mining / oil & gas) Brand reputation for excellent product, service, and support General industrial Commercial construction Alternative energy (electric vehicle, solar, storage, wind) Drivers LFUS Competitive Advantage Strong relationships with distribution channels & key customers Ability to selectively leverage Electronics channel access *Company estimates 10

Strong Track Record of Revenue Growth Drives Strong Earnings and Cash Generation Sales $1,221 Adjusted EPS* $7.74 Cash Flow from Operations $269 $ in millions $668 $ per share $3.79 $ in millions $116 2012 2017 2012 2017 2012 2017 Note: Certain prior year numbers have been restated to reflect the correction of immaterial errors as disclosed in the Annual Report on Form 10-K for fiscal year 2016. *See appendix for GAAP to non-gaap reconciliation 11

Leading to Strong Shareholder Return Source: Cap IQ 12

What We Expect to Deliver: Continued Strong Financial Performance Double Digit Sales Growth Double Digit EPS Growth Free Cash Flow Approximates Net Income Balanced Capital Allocation 5% - 7% accelerated organic revenue growth 17% - 19% operating margins Strong track record of free cash flow generation Return 40% of free cash flow to shareholders 5% - 7% growth from strategic acquisitions 21% - 23% EBITDA margins Capex continues at 4% - 5% of revenue Remainder to focus on strategic acquisitions 13

Capital Deployment: Balancing Reinvestment with Return to Shareholders 2013 2017 Free Cash* Deployment Share Repurchase 7% Dividends 19% Acquisitions $674M 74% Cash Priorities Disciplined Reinvestment to Drive Organic Growth Target Debt / EBITDA Leverage Remains 1.0x to 2.5x Acquisitions that Align to Strategy and Financial Targets Grow Dividend in Line with Earnings Opportunistic Share Repurchases Future Free Cash* Deployment Share Repurchase 20% Dividends 20% Acquisitions 60% *Free Cash Flow is defined as cash flow from operations less capital expenditures 14

Compelling Investment Proposition: A Proven Source of Growth and Value Creation Strong global partnerships High growth markets Leverage favorable mega trends Double digit revenue growth via accelerated organic growth & strategic acquisitions Enthusiastic, Passionate and Dedicated Culture Strong Shareholder Returns Focus on high margin niches Operational excellence Strong working capital management High teens operating margins driving strong free cash flow Disciplined capital management Balance reinvestment with return to shareholders 15

Thank You 16

Appendix

Appendix 2012 to 2017 Non-GAAP measures ($ in millions, except per share data) 2012 2013 2014 2015 2016 2017 As Reported (GAAP) Revenue $ 667.9 $ 757.9 $ 852.0 $ 867.9 $ 1,056.2 $ 1,221.5 Operating Income 106.9 129.9 133.8 104.2 130.6 218.5 Operating Margin 16.0% 17.1% 15.7% 12.0% 12.4% 17.9% Diluted EPS $3.37 $3.90 $4.32 $3.56 $4.60 $5.21 Non-GAAP Adjustments Reed switch manufacturing transfer costs $ - $ - $ - $ 5.2 $ 1.6 $ - Restructuring - - 5.3 3.4 2.5 2.2 Impairment Charges 7.8 10.7 0.3-14.8 - U.S. Pension wind-up and settlement cost 5.4 - - 31.9 - - Acquistion & Divestiture expenses 1.3 3.2 3.3 4.7 31.1 8.1 Non-operating Foreign Exchange (gain)/loss - (3.6) 3.9 (1.4) 0.5 2.4 Total Non-GAAP Adjustments 14.5 10.3 12.8 43.8 50.5 12.7 Total EPS Impact $ 0.42 $ 0.52 $ 0.41 $ 1.42 $ 1.66 $ 2.53 Adjusted (Non-GAAP) Revenue $667.9 $757.9 $852.0 $867.9 $1,056.2 $1,221.5 Operating Income 114.1 133.1 142.7 149.4 180.6 228.8 Operating Margin 17.1% 17.6% 16.7% 17.2% 17.1% 18.7% Diluted EPS $3.79 $ 4.42 $ 4.73 $ 4.98 $ 6.26 $ 7.74 Note: Prior year numbers have been restated to reflect the correction of immaterial errors as disclosed in recent quarterly filings with the SEC 18