Methode Electronics, Inc. · NYSE:MEI
Methode Electronics — J.P. Morgan 2022 Auto Conference
22 slides from Methode Electronics's conference presentation, July 2022
Slide 1: Methode Electronics, Inc. Investor Relations Presentation
Methode Electronics, Inc. Investor Relations Presentation July 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward- looking statements are subject to the safe harbor protection provid
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement the company's financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Methode uses certain non-GAAP financial measures, such as EBITDA, Net Debt, and Free Cash Flow. Reconciliation to the near
Slide 4: Methode at a Glance
Methode at a Glance A leading global supplier of custom-engineered solutions for user Established 1946 Headquartered in Chicago, IL interface, LED lighting system, power distribution and sensor applications in the transportation, industrial equipment, cloud NYSE: MEI computing and medical device end
Slide 5: Environmental, Social, Governance (ESG) Overview
Environmental, Social, Goverence (ESG) Overview Robust Governance Commitment to Emphasis on Framework Safe Operations Clean Tech Supporting ethical, Demonstrated history New business focused on inclusive and beneficial of operational safety Electric Vehicles and LED actions for stakeholders and qual
Slide 6: The Methode Journey
The Methode Journey 6 Over 75 Years of Expertise Navigating the Evolution of Technology
Slide 7: Financial Performance
Financial Performance $ in millions Sales Diluted EPS $ per share $1,164 $1,185 $1,200 $4.00 $1,088 $1,000 $1,024 $3.50 $1,000 $3.26 $3.19 $3.00 $800 $2.90 $2.70 $2.50 $2.43 $600 $2.00 $1.50 $400 $1.00 $200 $0.50 $0 $0.00 FY19 FY20 FY21 FY22 FY23E* * Midpoints of company guidance ranges 7 Sales Grow
Slide 8: Global Manufacturing Footprint
Global Manufacturing Footprint 8 Cost-Efficient Footprint with Proximity to Strategic Markets
Slide 9: Solutions – Products
Solutions – Products % of Sales • By-Wire Controls • Overhead Consoles User Interface 56% • Center Consoles • Integrated Modules • Remote Controls • Touchscreens • Ambient Lighting • Signal Lights LED Lighting 27% • Head & Fog Lights • Rear Stop Lights • Warning Lights • Work Lamps • Battery Disconn
Slide 10: Solutions – End Markets & Customers
Solutions – End Markets & Customers % of Sales • Appliance • Construction Equipment User Interface 56% • Automotive & EV • Commercial Vehicle • Crane • Drone • Automotive & EV • Construction Equipment LED Lighting 27% • Bus • Commercial Vehicle • Power Sports • Rail • Aerospace • Energy Storage Powe
Slide 11: Investment Thesis
Investment Thesis Exposure to Key Product Portfolio Operational & Strong Balance Market Trends Management Quality Excellence Sheet Focus Electrification & Sustainability Focused on Systems Integration Lean & Vertical Integration Balanced Capital Allocation EV, Commercial Vehicles vs. Components Dr
Slide 12: Strategic Priorities
Strategic Priorities High Original Equipment Manufacturer (OEM) Engagement HOW WE WIN Integrated Design, Production, and Support Lean, Large-Scale Global Operations Situated in Customer’s Regions Vertically Integrated Manufacturing with Recognized World Class Quality Capitalize on Growing EV, Commer
Slide 13: EV Driving Increased Content Per Vehicle
EV Driving Increased Content Per Vehicle Methode’s Internal Combustion Engine Methode’s Hybrid and (ICE) Vehicle Content Battery Electric Vehicle Content • User Interface • User Interface • Lighting • Lighting • Sensors • Sensors • Power Distribution 13 Transition to EV is a Content Tailwind Driven
Slide 14: EV Solutions for the "Top Hat"
EV Solutions for the “Top Hat” LED Lighting Door (Interior & Exterior) Activation Switches & Consoles Sensors & Cameras By-Wire Controls Shift-by-Wire Steer-by-Wire Brake-by-Wire 14 Leveraging User Interface, Lighting & Sensor Technologies
Slide 15: EV Solutions for the "Skateboard"
EV Solutions for the “Skateboard” Inverter & Battery Charger Molded Busbar Monitoring Sub-Assemblies Current Sensors Electric Sensors Motors & Position & Drives Torque Sensors Busbars Park Lock Actuator Battery Battery Disconnect & Busbars & Module Connectors Power Distribution Connections BDU PDU 1
Slide 16: EV & Commercial Vehicle Driving Customer Diversification
EV & Commercial Vehicle Driving Customer Diversification Sales by Customer $1,200 $1,164 Key Other $1,000 Customers: $1,000 $ in millions $809 $800 77% 64% $600 50% $400 $200 50% 36% 23% $0 FY16 FY19 FY22 GM Other Customers 16 FY22 Other Customer Sales 77% of Total, Up from 50% in FY16
Slide 17: Capital Allocation History and Strategy
Capital Allocation History and Strategy ($ in millions) Share Buyback & Dividend $141 11%: Returning Capital to Balanced Capital Shareholders Allocation Strategy Debt Reduction $367 30%: Deleveraging Pay Down Debt when Appropriate Balance Sheet Return Capital to Shareholders via Share Purchases
Slide 18: Deleveraging Balance Sheet
Deleveraging Balance Sheet ($ in millions) Net Debt* $247 $209 $135 $39 $7 FY19 Q2 FY19 FY20 FY21 FY22 Consistently Deleveraging Since Grakon Acquisition in FY19 Q2 Net Debt / TTM EBITDA* of 0.2 at End of FY22 Balance Sheet Well-Positioned for Potential M&A * See Appendix for reconciliation to
Slide 19: Inorganic Growth Framework
Inorganic Growth Framework Engineered Products and/or Subsystems for OEMs Target Technology Solutions Partner to OEMs Industrial Market Transportation Aligns with Our Strategic Priorities Can Leverage Methode’s: Fit ‒ Technologies ‒ Path to Market ‒ Manufacturing & Operational Capabiliti
Slide 20: Thank You
QAETHODE ELECTRONICS Thank You
Slide 21: Appendix
Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (Unaudited) (in millions) FY19 FY20 FY21 FY22 EBITDA: Net income $ 91.6 $ 123.4 $ 122.3 $ 102.2 Income tax expense 12.0 25.3 12.6 16.3 Interest (income) expense, net 8.3 10.1 5.2 3.5 Amortization of intangibles 1
Slide 22: Appendix
Appendix METHODE METHODE ELECTRONICS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (Unaudited) (Gn millions) Fy19 Fy20 “FY21 “FY22 Free Cash Flow: Net cash provided by operating activities $ 1020 $ 1406 S$ 1798 S$ 98.8 Purchases of property, plant and equipment 49.8) 45.1) 49) 8.0) Free
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