Trimble Inc. · NASDAQ:TRMB
Trimble — Investor Day (September 2022)
23 slides from Trimble's investor day presentation, Sep 7, 2022
Slide 1: Investor Day, September 2022: Driving Long Term Shareholder Value Through Connect & Scale
Trimble Inc. Investor Day, September 2022 Driving Long Term Shareholder Value Through Connect & Scale Presented By: David Barnes, Chief Financial Officer © 2022 Trimble, Inc - All Rights Reserved - Confidential and Proprietary Information 1
Slide 2: Key Messages
1. Historical Business Model Transformation 2. Opportunities Ahead Key Messages We have transformed our … and our Connect & Scale business and financial model strategy points the way for over the last 10 years and continued and accelerated created significant transformation and value shareholder val
Slide 3: Business model evolution over time
1. Historical Business Model Transformation 2. Opportunities Ahead Business model evolution over time Our business model has evolved with higher software, recurring revenue and significantly improved profitability Revenue ($ Millions) Annualized Recurring Revenue ($ Millions) Adjusted EBITDA ($ Mill
Slide 4: ARR growth rate
1. Historical Business Model Transformation 2. Opportunities Ahead ARR growth rate Our ARR has accelerated over the last several years Organic ARR Year-Over-Year Growth 15% 12% 7% 7% FY19 FY20 FY21 Q2’22 Organic Annualized Recurring Revenue refers to Annualized Recurring Revenue excluding the impact
Slide 5: Revenue mix
1. Historical Business Model Transformation 2. Opportunities Ahead Revenue mix Trimble end markets are end-user/aftermarket focused and have a growing mix of software 2021 Aftermarket vs. OEM Revenue Mix by Segment 2021 Revenue Mix by Segment <5% <5% <15% <10% <25% 37% 18% >95% >95% >85% >90% >75% 4
Slide 6: Margin expansion over time
1. Historical Business Model Transformation 2. Opportunities Ahead Margin expansion over time Over time our margins have improved while we have continued to invest in future growth Adjusted EBITDA Margin Progression Over Time Drivers of margin growth: ● Gross margin % up > 500 1.9% 0.6% 0.1% bps; hi
Slide 7: Consistently strong cash flow driven by our asset light business model
1. Historical Business Model Transformation 2. Opportunities Ahead Consistently strong cash flow driven by our asset light business model Free Cash Flow Working Capital % of Revenue 13% $704 10% 8% 8% 9% 5% 5% $218 3% 3% 0% 2011 2021 -2% 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Free Ca
Slide 8: Creating value through acquisitions
1. Historical Business Model Transformation 2. Opportunities Ahead Creating value through acquisitions Our acquisitions over the last 5 years have been both financially and strategically accretive Material acquisitions since 2017 Strategic value created Financial progression ● All recurring revenue
Slide 9: Flexible balance sheet
1. Historical Business Model Transformation 2. Opportunities Ahead Flexible balance sheet After years of strong cash flow, we have de-levered significantly and have room to invest within our 2.5X long term leverage target Net Debt / Adjusted EBITDA 2.5x 2.2x 1.7x 1.6x 1.4x 1.2x 1.2x 1.1x 1.0x 1.0x 0
Slide 10: Achievement of financial targets
1. Historical Business Model Transformation 2. Opportunities Ahead Achievement of financial targets Achieved or exceeded majority of 2018 analyst day targets despite unplanned headwinds 2018-2021 Financial Metric Target Actuals Comment Solid growth despite pandemic, supply chain Organic Revenue Grow
Slide 11: Going forward for the next 5 years: financial model drivers and implications
1. Historical Business Model Transformation 2. Opportunities Ahead Going forward for the next 5 years: financial model drivers and implications Financial Model Drivers Financial Outlook Implications 1 We will have sustained high ARR growth The markets we serve are poised for 1 sustained growth Softw
Slide 12: Progression of software model conversions
1. Historical Business Model Transformation 2. Opportunities Ahead Progression of software model conversions We have largely completed our software model conversions to recurring - with a meaningful opportunity to transition hardware / software bundles to recurring Perpetual Software Revenue Mix ($
Slide 13: Progression of model conversions
1. Historical Business Model Transformation 2. Opportunities Ahead Progression of model conversions Going forward we are focused on converting our bundled hardware / software offerings into recurring revenue models Conversion of hardware / perpetual software bundles to recurring revenue models will
Slide 14: Our Digital Transformation will enable connected sales of solutions
1. Historical Business Model Transformation 2. Opportunities Ahead Our Digital Transformation will enable connected sales of solutions across a growing portion of our business Digital Transformation: A optimized set of business processes across historically independent Trimble businesses and entitie
Slide 15: Business mix change
1. Historical Business Model Transformation 2. Opportunities Ahead Business mix change As we drive more of the value of our bundles from hardware to software and transition the software bundles to recurring, our revenue mix will continue to evolve Projected Business Mix Evolution 100% 100% Recurring
Slide 16: Business mix change
1. Historical Business Model Transformation 2. Opportunities Ahead Business mix change As we drive more of the value of our bundles from hardware to software and transition the software bundles to recurring, our revenue mix will continue to evolve Projected Business Mix Evolution ARR Growth as Mix E
Slide 17: Capital allocation - operating expense
1. Historical Business Model Transformation 2. Opportunities Ahead Capital allocation - operating expense Goal: invest for growth and deliver operating leverage % of Revenue - Q2 2022 TTM Long Term Trend (% of revenue) ● Enhance offerings & digital infrastructure to connect our solutions (and data)
Slide 18: Capital allocation - balance sheet
1. Historical Business Model Transformation 2. Opportunities Ahead Capital allocation - balance sheet Goal: Use cash flow to accelerate growth while retaining access to investment grade capital Allocation of Cash Flow from Operations (2017- 2021) Capex: ● Maintain asset light model Share Repurchase:
Slide 19: Key Performance Indicators
1. Historical Business Model Transformation 2. Opportunities Ahead Key Performance Indicators ARR Growth, Operating Margin, and Cash Flow are the metrics we use to measure our progress - we focus on a small number of core operational drivers Key Performance Indicators Operational Drivers ARR Growth
Slide 20: Long-term financial targets: The Top Line
1. Historical Business Model Transformation 2. Opportunities Ahead Long-term financial targets Our go-forward financial outlook - The Top Line Long-term outlook: ~5 years Commentary ● Growth driven by multiple factors, including end market growth, ARR ● Mid teens organic growth technology penetratio
Slide 21: Long-term financial targets: Margins and Cash Flow
1. Historical Business Model Transformation 2. Opportunities Ahead Long-term financial targets Our go-forward financial outlook - Margins and Cash Flow Long-term outlook: ~5 years Commentary 15% ● Expect margins and operating leverage to accelerate post 2024 as Margins and ● Growth to 26-27% non-GAA
Slide 22: Drivers of growth
1. Historical Business Model Transformation 2. Opportunities Ahead Drivers of growth Growth is expected to be led by Buildings and Infrastructure and ARR ~5 years Buildings & Resources Financial Metric Geospatial Transportation Trimble Total Infrastructure & Utilities +High teens to +HSD to Organic
Slide 23: In Conclusion
In Conclusion We have transformed our …and our Connect & Scale business and financial model strategy points the way for over the last 10 years and continued and accelerated created significant transformation and value shareholder value… creation in the years ahead 23