The Middleby Corporation · NASDAQ:MIDD
The Middleby — Investor Presentation (October 2006)
27 slides from The Middleby's investor presentation, October 2006
Slide 1: Investor Presentation
Investor Presentation October 2006
Slide 2: Forward Looking Statements
Forward Looking Statements Statements made in this presentation or otherwise attributable to the company regarding the company's business which are not historical fact are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Slide 3: Company Overview
a Company Overview
Slide 4: Middleby Investment Highlights
Middleby Investment Highlights Market Leader − Established and well-respected brands and leader in the commercial cooking industry − #1 or #2 market position in U.S. across most product lines − Introducing 10-12 new, technologically-advanced products every year Well-Positioned for Continued Grow
Slide 5: Market Leader
Market Leader We are focused on the hot-side of the foodservice equipment industry U.S. Hot-side Foodservice Equipment The U.S. commercial cooking Market by Product (1) equipment market is ~$1.5B. The International commercial cooking Microwave Baking & Other Ovens Ovens Combi Ovens equipment mar
Slide 6: Market Leading Brands
Market Leading Brands Brand Product U.S. Market Position Representative Customers Papa John’s, Pizza Hut, Conveyor Ovens #1 Domino’s, Costco KFC, Dunkin’ Donuts, Fryers #2 McDonald’s, Taco Bell KFC, Burger King, Convection Ovens #1 Cracker Barrel, Cheesecake Factory Morton’s, Wendy’s,
Slide 7: Market Leading Brands (con't)
Market Leading Brands (con’t) Brand Product U.S. Market Position Representative Customers Restaurant Baking Ovens #1 Subway, Bob Evans Warmers #1 Wendy’s, KFC, IHOP Toasters #2 McDonald’s, Chick-fil-A Food processing ovens #2 SaraLee, Smithfield Food packaging equipment #2 Kraft, H
Slide 8: Middleby Brand Products
Middleby Brand Products We offer a comprehensive line of innovative cooking equipment Conveyor Oven Combi Oven Convection Oven Fryer Automated oven with energy Combination steam and No-turn bake capabilities Highest efficiency burner management system convection in one cavity Range Infrared
Slide 9: Strong Relationships with Premier Customers
Strong Relationships with Premier Customers Blue-chip, customer base Long standing relationships Limited customer concentration Large installed base Serve all food segments 8
Slide 10: Middleby Sales Growth Drivers
Middleby Sales Growth Drivers New Products Acquisitions Replacement Market International Sales
Slide 11: Sales Growth Drivers—New Products
1) Sales Growth Drivers—New Products The Middleby brands introduce10-12 new products every year. By listening to our customers, new products are then developed to meet their needs and satisfy industry trends such as energy savings and speed. Energy Savings Speed WOW! Oven WOW! Oven Rocket Frye
Slide 12: Growth Drivers—Middleby R&D
Growth Drivers—Middleby R&D Disruptive Design Brand Extension Catalyst Design Strategic Market Designs that reinterpret Value to bottom line of Transformation existing categories with customers features and benefits Benefit: Improved Benefit: Sales Growth Benefit: Customer Profit Margins retention a
Slide 13: Sales Growth Drivers—Acquisitions
2) Sales Growth Drivers—Acquisitions Two New Middleby Platforms Combi Ovens Food Processing and Packaging $400 million market $600 million market $40 million $10 million $20 million 11
Slide 14: Recent Acquisitions
Recent Acquisitions Alkar Rapidpak acquisition allows expansion of customer base into food processing, Denmark-based Houno brings to Middleby European manufacturing and technology. Acquisition Criteria: – Leading Brands – Patented Technology – Focused on Cooking Recent Acquisitions Rationale Alk
Slide 15: Successful Acquirer
Successful Acquirer Transforming Blodgett acquisition; compelling Nu-Vu acquisition in 2005 Blodgett a key strategic acquisition − More than doubled size of company − Integrated and refocused on strength of brands − Successful new product launches Post-Blodgett integration, we continue to be opp
Slide 16: Sales Growth Drivers—Replacement Market
3) Sales Growth Drivers—Replacement Market Middleby Marshall Conveyor Ovens Convection Ovens Transfat filter oil fryers Stratosteam Gas: boilerless 14
Slide 17: Sales Growth Drivers—International Market
4) Sales Growth Drivers—International Market Local chains Specifically designed product for regional specifications Reorganization of Middleby Worldwide 15
Slide 18: Unique Global Footprint
Unique Global Footprint Global presence through sales, service and manufacturing in key international markets Bilbao, Spain Manchester, UK Delhi, India Seoul, South Korea Net Sales by Geography Shanghai, China Mississauga, Ontario, Canada Manila, Philippines Mexico City, Mexico Taipei, Taiwan Manufa
Slide 19: Profit Growth Drivers
Profit Growth Drivers Supply Chain $100 Million Outsourcing to China Reverse auctions Higher Margin Products Higher Margin Products WOW 500 Range Plant Efficiencies Plant Operating Rationalization: consolidation of Toastmaster and Nu-Vu Move high labor process to the Philippines 17
Slide 20: Financial Review
a Financial Review
Slide 21: Financial Overview
Financial Overview ($ in millions) Middleby Financial Performance $400 $359.5 40% $316.8 300 $271.1 30 $235.1 $242.2 200 20 $132.3 $132.5 $127.0 19.2% 20.4% 20.3% $103.6 15.9% 100 8.6% 14.4% 73.0 10 4.8% 12.2% 11.1% $52.2 64.6 $33.9 $38.6 $6.3 $11.4 $15.5 $11.5 0 0 1998 1999 2000 2001 2002 2003 2004
Slide 22: Track Record of Growth
Track Record of Growth Historical Net Sales Net Sales $317.0 $310 $300 $290 .9% $280 =9 GR CA $271.1 $270 $260 $250 $242.2 $240 $235.1 $230 $220 $210 $200 2002 2003 2004 2005 21
Slide 23: Focus on Profitability
Focus on Profitability ($ in millions) Historical Gross Profit and Margin Historical Operating Income and Margin $140 60% $60 $58.0 25% $121.6 $120 $49.0 50% $50 20% $102.6 $100 18.1% 18.3% 40% $40 $85.9 $35.0 $78.5 38.4% 15% $80 37.9% 35.4% $29.7 14.5% 33.4% 30% $30 12.6% $60 10% 20% $20 $40 5% 10%
Slide 24: Operating Strategy
Operating Strategy We have achieved success due to our focus on our core management philosophy Decentralized operations Incentivizing employees on financial performance goals Achieving engineering and R&D excellence Driving operational efficiencies Proven Results Product standardization
Slide 25: 2006 First Half Review
2006 First Half Review Results Commentary (Amounts in millions, except per share data) YTD YTD Net Sales increased 27% in 1 st half Q2 2006 Q2 2005 − 9.0% organic growth Net Sales $ 201.6 $ 158.8 − 18.0% acquisition growth % Growth 27.0% 17.3% Gross margins impacted by: Gross Profit $ 77.2 $ 59.
Slide 26: Financial Themes
Financial Themes Top Line Growth − Positioned in faster growing segments − Continued new product innovation − Impact of acquisition Focus on Operating Margins − Standardization of product platforms − Strategic supply chain initiatives − Integration of Alkar Strong Balance Sheet − Continued deb
Slide 27: Key Investment Highlights
Key Investment Highlights Market Leader on Hot-Side of Foodservice Equipment Established Well-Respected Brands Premier Customer Base Positioned for Growth Unique Global Footprint Strong Profitability and Commitment to Operational Excellence Successful Track Record of Growth through Acq