Techtronic Industries Co., Ltd. · HKEX:669

Techtronic Industries — FY2016 Earnings Presentation

49 slides from Techtronic Industries's earnings presentation, Mar 15, 2017

1. Slide 1: 2016 Annual Results Presentation

   2016 Annual Results Presentation March 15, 2017

2. Slide 2: Frank Chan

   Frank Chan 2

3. Slide 3: 2016 Full Year Results

   2016 Full Year Results (US$ m) 2015 2016 Change Local Curr Sales $5,038 $5,480 +8.8% +9.8% Gross Profit $1,798 $1,985 +10.4% Gross Margin % 35.7% 36.2% +50 bps EBIT $400 $450 +12.6% % of sales 7.9% 8.2% Net Profit $354 $409 +15.4% % of sales 7.0% 7.5% EPS (cents) 19.37₵ 22.32₵ +15.2% Final Dividend

4. Slide 4: 2016 Segment Results

   2016 Segment Results (US$ m) 2015 2016 Change Local Curr Segment Sales $3,972 $4,470 +12.6% +13.3% Power Segment % 78.8% 81.6% Equip. Op Profit $379 $430 +13.4% % of sales 9.5% 9.7% Sales $1,066 $1,010 -5.3% -3.3% Floorcare & Segment % 21.2% 18.4% Appliance Op Profit $21 $20 -3.2% % of sales 1.9% 2.

5. Slide 5: 2016 Region Sales

   2016 Region Sales (US$ m) 2015 2016 Change Local Curr Region North $3,772 $4,161 +10.3% +10.6% America Region % 74.9% 75.9% EMEA $861 $889 +3.3% +7.1% Region % 17.1% 16.2% ROW $405 $430 +6.2% +7.9% (Rest of World) Region % 8.0% 7.8% 5

6. Slide 6: 2016 Income Statement

   2016 Income Statement (US$ m) 2015 2016 Change Sales $5,038 $5,480 +8.8% Gross Profit $1,798 $1,985 +10.4% % of sales 35.7% 36.2% Selling, Distribution, & Advertising $697 $794 +13.9% Administrative Expenses $578 $599 +3.6% Research & Development $128 $147 +15.3% Total SG&A Expenses $1,403 $1,540 +9

7. Slide 7: 2016 Financial Position

   2016 Financial Position (US$ m) 2015 2016 Change Non-current Assets $1,809 $1,923 +6.3% Current Assets $2,993 $3,197 +6.8% Current Liabilities $2,069 $2,070 -- Net Current Assets $924 $1,128 +22.0% Long-term Liabilities $578 $652 +12.8% Equity $2,156 $2,400 +11.3% 7

8. Slide 8: 2016 Gearing Trend

   2016 Gearing Trend 2012 2013 2014 2015 2016 Gearing 25.8% 10.6% 10.0% 13.4% 5.2% 8

9. Slide 9: Free Cash Flow Improvement

   Free Cash Flow Improvement 2015 2016 Change Free Cash Flow $152 $344 + $192 Net Profit $354 $409 +15.4% Conversion Rate 42.9% 84.1% +96.1% 9

10. Slide 10: 2016 Key Financial Figures

    2016 Key Financial Figures (US$ m) 2015 2016 Change Inventory $1,190 $1,296 Days 86 86 -- Receivables $828 $935 Days 60 62 +2 days Payables $1,160 $1,331 Days 84 89 +5 days Net Working Capital $858 $900 % of Sales 17.0% 16.4% Cash Balance $775 $805 +3.9% CAPEX $162 $190 +17.8% 10

11. Slide 11: 2016 Debt Profile

    2016 Debt Profile (US$ m) 2015 2016 Change Cash Balance $775 $805 +3.9% Debt with Fixed Maturities $498 $554 +11.2% Working Capital Financing $566 $375 -33.8% Total Debt $1,064 $929 -12.7% Total Net Debt $289 $124 -57.2% Floating Rate 100% $1,064 100% $929 -12.7% Fixed Rate 0% $0 0% $0 -- 11

12. Slide 12: Joe Galli

    Joe Galli 12

13. Slide 13: 2016 Full Year Sales

    2016 Full Year Sales (US $m) 2015 2016 Sales $5,038 $5,480 % chg +8.8% % chg Local Curr +9.8% 13

14. Slide 14: 2016 Sales

    2016 Sales Floorcare Power 18% Equipment 82% +13.3% -3.3% Local Curr Local Curr 14

15. Slide 15: Floorcare

    Floorcare 2016 Cordless Sales +53% Local Curr

16. Slide 16: 2016 Full Year Results

    2016 Full Year Results (US $m) 2015 2016 Change Local Curr Sales $5,038 $5,480 +8.8% +9.8% Gross Margin % 35.7% 36.2% +50bps EBIT $400 $450 +12.6% % of sales 7.9% 8.2% Net Profit $354 $409 +15.4% % of sales 7.0% 7.5% 16

17. Slide 17: Gross Margin Trend

    Gross Margin Trend 2008 2009 2010 2011 2012 2013 2014 2015 2016 +36.2% +35.7% +35.2% +34.2% +33.5% +32.6% +32.2% +31.3% +30.8% 8 years 8 years of Gross of Gross Margin Margin improvement improvement 17

18. Slide 18: 2016 Working Capital

    2016 Working Capital (US$ m) 2015 2016 Change Inventory $1,190 $1,296 Days 86 86 -- Receivables $828 $935 Days 60 62 +2 days Payables $1,160 $1,331 Days 84 89 +5 days WC % of Sales 17.0% 16.4% 18

19. Slide 19: 2016 Sales

    2016 Sales +21.0% Local Curr 19

20. Slide 20: 2016 Sales by Region

    2016 Sales REGION % Growth NA +20.6% EMEA +21.3% ROW +24.7% 20

21. Slide 21: US Manufacturing Position

    US Manufacturing Position Milwaukee, WI Cookville, TN Greenwood, MS Jackson, MS Anderson, SC 21

22. Slide 22: Campus Hires – LDP

    Campus Hires – LDP 522 92 International USA 71 67 58 430 41 27 337 24 290 305 12 17 165 175 123 118 136 85 91 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 22 International Hiring Commenced 2009

23. Slide 23: Served Market $36B Today

    Served Market 2021 $36B PRO Today PRO DIY DIY Source: Techtronic Industries Co. Ltd. Internal Estimate

24. Slide 24: Cordless Network Effect

    CORDLESS NETWORK EFFECT

25. Slide 25: $36 Billion Cordless Growth Drivers

    $36 Billion Cordless Growth Drivers Source: Techtronic Industries Co. Ltd. Internal Estimate

26. Slide 26: AC to Cordless

    AC to Cordless AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

27. Slide 27: Pneumatic to Cordless

    Pneumatic to Cordless AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

28. Slide 28: Petrol to Cordless

    Petrol to Cordless AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

29. Slide 29: Corded Lighting to Cordless

    Corded Lighting to Cordless AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

30. Slide 30: Hand Tools to Cordless

    Hand Tools to Cordless AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

31. Slide 31: Hydraulic to Cordless

    Hydraulic to Cordless AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

32. Slide 32: Replacement Cycle

    Replacement Cycle AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

33. Slide 33: Battery Aftermarket

    Battery Aftermarket AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

34. Slide 34: Network Effect - Bare Tools

    Network Effect - Bare Tools AC PNEUMATIC PETROL CORDED LIGHTING HAND TOOLS HYDRAULIC NICAD BATTERIES BARE TOOLS

35. Slide 35: Cordless Leadership

    Tri CORDLESS LEADERSHIP

36. Slide 36: Served Market - 2021 $36B

    Served Market - 2021 $36B Residential Construction Source: Techtronic Industries Co. Ltd. Internal Estimate

37. Slide 37: Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

    Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

38. Slide 38: Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

    Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

39. Slide 39: Outdoor Power Equipment

    Outdoor Power Equipment Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

40. Slide 40: Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

    Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

41. Slide 41: FORCE LOGIC Hydraulics

    FORCE LOGIC™ Hydraulics Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

42. Slide 42: Compact Vacuum

    Compact Vacuum Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

43. Slide 43: TICK Tool and Equipment Tracker

    TICK™ Tool and Equipment Tracker Confidential Document Property of Milwaukee Electric Tool Corporation Brookfield, Wisconsin 53005

44. Slide 44: Ryobi ONE+ System

45. Slide 45: Outdoor Products

    18ViL ra Outdoor Products

46. Slide 46: Outdoor Products

    AOV Lire Outdoor Products

47. Slide 47: Hoover REACT

48. Slide 48: Van Cordless

    Van CORDLESS

49. Slide 49: TTI Confidential

    TTI Confidential

Techtronic Industries — FY2016 Earnings Presentation on 6ix