Brady Corporation · NYSE:BRC
Brady — Shareholder Meeting (November 2017)
30 slides from Brady's shareholder meeting presentation, Nov 15, 2017
Slide 1: F'17 Annual Shareholders' Meeting
Brady Corporation F’17 Annual Shareholders’ Meeting November 15, 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 In this presentation, statements that are not reported financial results or other historic information are “forward-looking statements.” These forward-looking statements relate to, among other things, the Company's future financial position, business strategy, targets, p
Slide 3: Agenda
3 Agenda • Election of Board of Directors • President’s Report • Financial Report • Questions & Answers
Slide 4: Election of the Board of Directors
4 Election of the Board of Directors Patrick W. Allender Nancy Lee Gioia Bradley C. Richardson Executive Vice Director, Global Executive Vice President President and Chief Connectivity, Electrical and Chief Financial Officer, Financial Officer (ret.), and User Experience (ret.), PolyOne Corporation
Slide 5: Election of the Board Of Directors
5 Election of the Board Of Directors Shareholders of 100% of the Class B Common Voting Stock vote in favor of the election of the director nominees and they are therefore elected to a one-year term.
Slide 6: President's Report
6 President’s Report J. Michael Nauman President and Chief Executive Officer
Slide 7: Identify Products video
IDENTIFY PROD uC TS to view the video
Slide 8: Strategic Vision Statement
Strategic Vision Statement 8 Brady is the expert in safety, identification, and compliance in a diverse range of workplaces. We possess deep expertise and knowledge in our industries, resulting in trusted partnerships with our customers. We provide market leading, innovative , high-performance produ
Slide 9: Recap of F'17
RECAP OF F’17 9 Achieved our eighth consecutive quarter of earnings growth $144M in operating cash generation Foundational improvements in all manufacturing metrics including improved quality, reduced errors, and decreased shipping time Increased digital sales Driving local ownership and accountabil
Slide 10: Driving a Culture of Innovation
10 DRIVING A CULTURE OF INNOVATION Voice of customer is driving our innovation process Rebuilding our sales engines, including industry-specific websites in WPS and a new BradyID.com Leveraging our capabilities paired with new technologies Robust product roadmaps Software enhancements that complimen
Slide 11: Voice of Customer
11 Voice of Customer Customized Lock Out Tag Out Products - Australia • Brady Australia • Identified several safety hazards within water treatment plants at multiple utilities • Brady developed customized range of Lock Out Tag Out solutions • Example of how innovation and listening to the customer h
Slide 12: Smart Technology Brady CenSys – RFID Technology
12 Smart Technology Brady CenSys – RFID Technology • New class of RFID hardware combined with cloud-based software • Helps our customers with high-value asset tracking • Simple installation and startup for automated asset tracking solutions • Optimizes communications and reduces data load on wireles
Slide 13: Capturing the Demands for Automation
13 Capturing the Demands for Automation The Brady Wraptor • Surge in growth in F’17 – 30% increase from F’16 • Our customers are demanding ways to achieve cost savings through process efficiencies • Multiple updates with a significant new re- launch earlier this month
Slide 14: New Search Tools
14 New Search Tools Sign Search- Direct Order and Print • Take a picture of a sign (Brady’s or a competitor’s) • See the closest product matches on Brady’s mobile app • Order instantly! 1. Take picture 2. Show matches 3. Order on the Brady mobile app
Slide 15: Leveraging eCommerce
15 Leveraging eCommerce BradyID.com Enhancements • Optimized content • Product videos and literature easily accessible • Easier to find • Product finders guide the customer to the right item • Machine learning-based recommendations • Product recommendations help in selection and increase average ord
Slide 16: New Software Product Launches
16 New Software Product Launches Smart Lockout Mobile App Brady’s first fully integrated safety, for Link360 identification, and business productivity solution for asset and inspection management Next generation lockout productivity apps for safety and operations
Slide 17: Our Continued Focus: F'18
OUR CONTINUED FOCUS: 17 F’18 New Product Development Customer Intimacy Operational Excellence Employee Engagement Order Fulfillment Costs Facility Optimization Master Data
Slide 18: Financial Report
18 Financial Report Aaron Pearce Chief Financial Officer
Slide 19: Revenue & Earnings Trends
Revenue & Earnings Trends 19 NON-GAAP NET EARNINGS FROM CONTINUING SALES (millions of USD) OPERATIONS* (millions of USD) $1,250 $1,225 $125 $1,158 $1,172 $1,121 $1,113 +19% $102 $100 $96 $1,000 $80 $80 $75 $65 $750 $50 $500 $25 F'13 F'14 F'15 F'16 F'17 F'13 F'14 F'15 F'16 F'17 Organic Growth (2.4%)
Slide 20: GPM & SG&A Expense
GPM & SG&A Expense 20 GROSS PROFIT MARGIN GROSS PROFIT MARGIN: 60.0% 55.0% 52.6% • Pricing pressures in certain product 49.8% 49.9% 50.1% categories. 50.0% 47.7% • On-going operational improvements are 45.0% positively impacting our gross profit 40.0% margin. 35.0% F'13 F'14 F'15 F'16 F'17 SELLING,
Slide 21: Increasing our Investment in R&D
Increasing our Investment in R&D 21 RESEARCH & DEVELOPMENT EXPENSE (Millions of USD) $40 $40 $37 $36 $35 $35 $34 $30 F'13 F'14 F'15 F'16 F'17 INCREASING OUR INVESTMENT IN RESEARCH & DEVELOPMENT: • Investing in R&D to drive future organic sales growth. • R&D expenses were up 11% in F’17. • Increase i
Slide 22: Segment Financial Results (Sales & Segment Profit %)
Segment Financial Results (Sales & Segment Profit %) 22 IDENTIFICATION SOLUTIONS (millions of USD) IDENTIFICATION SOLUTIONS: $900 30.0% • Organic sales growth of 1.6% and $796 $800 $800 segment profit increased from $112.3M to 25.0% $700 $130.6M. 20.0% $600 16.3% • Sales and profitability grew in al
Slide 23: Cash Generation
Cash Generation 23 CASH FLOW FROM OPERATING ACTIVITIES (Millions of USD) $150 $144 $144 $139 $100 $93 $93 $50 F'13 F'14 F'15 F'16 F'17 What did we do with our cash? F’17 Cash Flow from Operating Activities $ 144M Uses: Capital Expenditures (15M) Dividends (42M) All Other 15M Increase in Net Cash (st
Slide 24: Net Cash (Debt)
Net Cash (Debt) 24 NET CASH (DEBT) (millions of USD) DEBT STRUCTURE (millions of USD) Interest July 31, 2017 July 31, 2016 $50 Rate Balance Balance Revolver Borrowings: USD-denominated 1.94% $ (17.0) $ (112.0) $0 EUR-denominated 0.75% (34.3) - $(9) $26 China Borrowings: -$50 $(38) USD & CNY-denomina
Slide 25: Future Financial Performance
Future Financial Performance 25 Expectation F’17 Exiting F’18 Organic Sales Organic Revenue Drivers: Organic Sales Growth Growth • Unrivaled customer service. Below GDP • Industry expertise. • Innovative new products. Organic GDP+ • Integrated solutions creating smarter products. Growth • E-business
Slide 26: Questions?
26 Questions?
Slide 27: Thank You
27 Thank You
Slide 28: Investor Relations
Investor Relations 28 Brady Contact: Ann Thornton 414-438-6887 Ann_Thornton@Bradycorp.com See our web site at www.investor.bradycorp.com
Slide 29: Appendix - Non-GAAP Reconciliation
29 Appendix - Non-GAAP Reconciliation
Slide 30: Non-GAAP Earnings from Continuing Operations
Non-GAAP Earnings from Continuing Operations 30 Reconciliation of Non-GAAP Net Earnings from Continuing Operations (‘000s of USD) Brady is presenting the Non-GAAP measure "Net Earnings from Continuing Operations Excluding Certain Items." This is not a calculation based upon GAAP. The amounts include