Baylin Technologies, Inc. · TSX:BYL
Baylin Technologies — Q3 2017 Earnings Presentation
36 slides from Baylin Technologies's earnings presentation, Nov 2, 2017
Slide 1: Baylin Technologies Q3 2017 Company Presentation
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . BAY L I N T ECH N O LO G I ES I N C. Q3 2017 C o m p a n y P r e s e n t a t i o n A leading global provider of innovative antenna solutions. 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . This presentation contains “forward-looking information”, which may include, but is not limited to, statements with respect to future events or the future financial and operating performance of Baylin Technologies
Slide 3: Who We Are
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . WHO WE ARE 3
Slide 4: Commenced business in 1978, completed IPO on TSX
Commenced business in 1978 Completed IPOC on L TSX E A Nov. R 2013 S I G N A L S . S O U N D I N V E S T M E N T S . World leader in antenna design and manufacture with over 100 engineers and over 100 patents. 1,000+ employees worldwide Baylin has three main business lines: – Mobile produc
Slide 5: Company History
COMPANY HISTORY C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . 1978 2006 / 2007 2010-2012 2013-2014 2015 2016 2017 Randy Dewey Randy Dewey Completed hiring Jerry Kirshman appointed Vice- appointed CEO of Canadian staff, appointed COO Chairman Mike Moon including 5 Dr. Minya
Slide 6: Robust Long-Term Growth Profile
ROBUST LONG-TERM GROWTH PROFILE C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Big Four global trends driving demand for communications infrastructure and more complex solutions Mobile Broadband Data Social Media Cloud Service Big Data Mobile Data Consumer IP Traffic Business IP Traffic
Slide 7: Divisional Structure
DIVISIONAL STRUCTURE C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Manufacturing Engineering Small Cell, Mobile Network DAS/BSA 77
Slide 8: Product Lines
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . PRODUCT LINES 8
Slide 9: Mobile
Product lines Mobile C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . History of Key Relationships Motorola Brick-first cell antenna ever. In this space since cell phone inception. 12-year relationship with Tier-one antenna designer and supplier for smartphone platform. In 2005-2009
Slide 10: Networking
PRODUCT LINES Networking C L E A R S I GC NL AE LA SR . S SI OG UN NA DL S I. N S V O E SU TN MD E NI N T SV .E S T M E N T S . Total Addressable Antenna Market approximately US$400 million, growing at 27% per year Baylin's antennas improve wireless internet connectivity, video distribution and
Slide 11: DAS and Small Cell
PRODUCT LINES DAS and Small Cell C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Total Addressable Antenna Market is approximately US$5.5 billion and growing Baylin's products are integral to some of the most advanced Distributed Antenna Systems (DAS) in the world Wireless service
Slide 12: Base Station Antennas
BASE STATION ANTENNAS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Dec 2016: Closed a follow-on offering for Mar 2017: Hired two Base Station May 2017: Invested $400K into R&D Aug 2017: Invested a further $400K proceeds of $5.75M to be used for R&D Antenna veterans and opened of Base
Slide 13: C L E A R S I G N A L S . S O U N D I N V E S T M E N T S .
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . 13 13
Slide 14: Operations & Engineering
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . OPERATIONS & ENGINEERING 14
Slide 15: Manufacturing
MANUFACTURING C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Facilities located in China, South Korea and Vietnam Provides Baylin with competitive advantages of optimized design, cost-effective manufacturing and minimizes lead time to market Facilities are among the most technolog
Slide 16: World Class R&D
WORLD CLASS R&D C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . R&D centers in Korea, USA and now Ottawa, Canada State-of-the-Art facility officially opened in Tempe, Arizona in March 2017 Over 100 antenna engineers with nine PhDs in the field Over 100 patents in our portfolio an
Slide 17: Decades of Innovation
DECADES OF INNOVATION C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . st 1st Mobile antenna 1st embedded antenna system in a router 1st In Building MIMO DAS antenna 1st MIMO antenna system in a smart phone 1st Omni Directional In Building SISO antenna under 1” profile 17 17
Slide 18: How We Compete & Who We Serve
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . HOW WE COMPETE & WHO WE SERVE 18
Slide 19: How We Win Clients
HOW WE WIN CLIENTS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . NIMBLE & READY CONCEPT TO PRODUCTION SPECIALIZED R&D CENTRES Some of our competitors We understand With 3 R&D Centers all are really large, in fact too customer needs and specializing in mobile, large to compete on smalle
Slide 20: Competition
COMPETITION C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . HIGH BARRIERS TO ENTRY! Carriers, service providers RF technology and expertise Highly-specialized, Only one competitor and OEM's have required to design and technologically advanced covers all of Baylin’s challenging qualificat
Slide 21: Customers
CUSTOMERS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Mobile Network DAS / Small Cell 21 21
Slide 22: Strategic Direction
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . STRATEGIC DIRECTION 22
Slide 23: Strategic Growth Plan Accelerating
STRATEGIC GROWTH PLAN ACCELERATING C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Fixed costs Positive adjusted All three product Preeminent Pivotal sales team Ongoing active rationalized. EBITDA in the lines had double position in R&D hires are driving focus on inorganic US$7 million f
Slide 24: Recent Key Strategic Developments
Recent Key Strategic Developments December 22, 2016 - Baylin completed a prospectus C L E A R offering S I of N3,108,450 G A L S . common S O shares U N D totaling I N gross V E S proceeds T M E N of T$5,750,633.00. S . - Net proceeds to fund R&D for Baylin’s entry into the Base Station Antenna sect
Slide 25: Growth Initiatives: Organic and Acquisitions
GROWTH INITIATIVES C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Organic Acquisitions • Focus on innovation in each of three Positioned to enhance growth by adding: key segments • technological capabilities. • Expansion into more sophisticated • new geographical markets. product lines
Slide 26: Growth Initiatives: Acquisitions and Directors
GROWTH INITIATIVES C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Acquisitions Mr. Jeffrey Royer, a private investor Mr. Randy Dewey is an Mr. Stockwell Day is a strategic Mr. Douglas Jones with interests in telecommunications, experienced CEO with operations and Positioned to enhance a
Slide 27: Financial Performance
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . FINANCIAL PERFORMANCE 27
Slide 28: Capital Markets and Financial Snapshot
CAPITAL MARKETS AND FINANCIAL SNAPSHOT C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . B Y L .T O B a y l i n Te c h n o l o g i e s I n c . T S E BYL-TO November 2, 2017 Price C$2.14 Baylin Technologies Inc. Market C$47.0m Exchange: TSX Exchange | November 2, 4:30 p.m.EDT Capitalization
Slide 29: Improving Results: Revenue and Adjusted EBITDA
IMPROVING RESULTS ALL FIGURES IN CANADIAN DOLLARS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . REVENUE A DJ U ST E D E B I T DA 29 29
Slide 30: Improving Results: Gross Profit and Margin
IMPROVING RESULTS ALL FIGURES IN CANADIAN DOLLARS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . G R O S S P R O F I T/ M A R G I N T R A I L I N G T W E LV E M O N T H S 30 30
Slide 31: Peer Benchmarking - Valuation Metrics
PEER BENCHMARKING - VALUATION METRICS C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . EV / CY17E Revenue Antenna RF & Component Supplier Median: 2.3x Median: 3.0x 4.5x 4.1x 3.7x 3.0x 2.7x 2.4x 2.3x 2.4x 0.9x 0.7x 0.3x Amphenol TE Connectivity CommScope Laird Partron Co. Skyworks Semtech
Slide 32: Baylin Comparables
BAYLIN COMPARABLES C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Baylin Technologies Comps In millions except per share data LTM EBITDA Rev CAGR EV/Sales EV/EBITDA P/E Company Name Price EV (USD) Margin 15A-18E 2016 2017 2018 2016 2017 2018 2016 2017 2018 Antenna Ampenol 87.24 28,709 2
Slide 33: Summary
SUMMARY C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . Customer base diversified and growing steadily Stronger North American footprint New product lines positioned to capture exponential growth in the data delivery system Poised for growth through acquisition Recent leadershi
Slide 34: Operations
C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . OPERATIONS 34
Slide 35: Financial Performance (P&L Summary)
FINANCIAL PERFORMANCE (P&L SUMMARY) C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . All Figures in Canadian Dollars 2014 2015 2016 2017 M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Sales 12.4 11.7 14.6 10.7 9.9 12.3 15.8 17.3 20.9 20.8 22.5 20.0 19.8 20.3 27.1 Gross Profit 2.8 2.2 3.5
Slide 36: Financial Performance (Balance Sheet Summary)
FINANCIAL PERFORMANCE (BALANCE SHEET SUMMARY) C L E A R S I G N A L S . S O U N D I N V E S T M E N T S . 2015 2016 2017 All Figures in Canadian Dollars M Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Cash 22.4 20.4 16.4 15.8 8.7 10.5 12.4 18.5 15.6 15.0 13.2 Working Capital (Ex Cash) 7.3 6.4 8.5 6.8 8.7 9.2 7.6