Adt Inc. · NYSE:ADT
Adt — Debt Investor Presentation (July 2021)
34 slides from Adt's debt investor presentation, Jul 15, 2021
Slide 1: Investor Presentation July 15, 2021
Investor Presentation July 15, 2021 Exhibit 99.1
Slide 2: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by ADT Inc. (the “Company”) and The ADT Security Corporation (the “Issuer”), an indirect wholly owned subsidiary of the Company, in connection with the issuance of the 1st Lien Senior Secured Notes (the “Notes”), solely for informat
Slide 3: Forward Looking Statements & Non-GAAP Measures
Forward Looking Statements & Non-GAAP Measures The Company has made statements in this Presentation and other reports, filings, and other public written and verbal announcements that are forward-looking and therefore subject to risks and uncertainties. All statements, other than statements of histor
Slide 4: Non-GAAP Measures
Non-GAAP Measures To provide investors with additional information in connection with our results, as determined in accordance with generally accepted accounting principles in the United States (“GAAP”), we disclose Adjusted EBITDA, Adjusted EBITDA margin, Covenant Adjusted EBITDA (Pre-SAC), Free Ca
Slide 5: Call Participants
Jim DeVries President and Chief Executive Officer, ADT Call Participants Jeff Likosar Chief Financial Officer and President, Corporate Development, ADT Deepika Yelamanchi Treasurer and Vice President, FP&A, ADT Manfred Affenzeller Managing Director, Deutsche Bank Ken Porpora Executive Vice President
Slide 6: Transaction Overview
Transaction Overview
Slide 7: Transaction Overview
Transaction Overview ADT Inc. is a leading provider of security, automation, and smart home solutions serving consumer and business customers in the United States During the COVID-19 crisis, the Company was able to demonstrate the resiliency of its business model Recurring contractual revenue model
Slide 8: As adjusted Capitalization and ratings summary
As adjusted Capitalization and ratings summary Notes: Represents cash available on the Company’s balance sheet as of March 31, 2021, as well as cash generated subsequent to March 31, 2021 Estimated breakage costs and accrued interest assuming redemption date as of August 28, 2021 Includes estimated
Slide 9: Summary of Terms: 1st Lien Senior Secured Notes
Summary of Terms: 1st Lien Senior Secured Notes Issuer The ADT Security Corporation (the “Issuer”) Issue 1st Lien Senior Secured Notes (the “Secured Notes”) Ranking Pari passu with existing and future senior secured indebtedness and senior to all existing and future unsecured indebtedness, to the ex
Slide 10: As Adjusted Corporate Structure
As Adjusted Corporate Structure ADT Inc. (formerly Prime Security Services Parent Inc.) Common Equity and Management Interests Prime Security Services Holdings, LLC Credit Facilities (1) Existing Revolver Existing 1st Lien Term Loan Facility Notes (2) 1st Lien Secured Notes due 2024, 2026, and 2027
Slide 11: Business Overview
Business Overview
Slide 12: Highlights
Highlights Mission-driven company, with passion for protecting and serving our customers Leading brand in growing industry, serving traditional security and emerging smart home markets Durable, recession resilient model, with ~80% recurring revenue and exposure to favorable macro trends Diverse and
Slide 13: ADT is at the Center of the Smart and Secure Home
Note: Metrics in bubbles represent ADT’s 2020 home automaton and security events statistics. ADT is at the Center of the Smart and Secure Home 500+ Million Door locks 300+ Million Lights 1+ Billion Thermostats 10.8+ Billion Captured video clips 2+ Billion Arm & Disarm 14+ Devices per home 200+ Billi
Slide 14: Growing Consumer Offering Broadens Addressable Market
Growing Consumer Offering Broadens Addressable Market Expanding ADT’s addressable market now and for the future Trusted DIFM security at the core; historic 20%+ market penetration Expanding DIY offering with Blue by ADT, and ADT | Google New channels with homebuilders and multi-family dwellings Attr
Slide 15: Growth Drivers
Growth Drivers Increased demand for security De-urbanization trends Smart home adoption Increasing household construction Macro Dynamics ADT Initiatives Improving marketing efficiency using analytics Execution of additive partnerships Google partnership DIY expansion DISH, Ackerman, Insurance Partne
Slide 16: Financial Update
Financial Update
Slide 17: Financial Snapshot
Financial Snapshot TTM as of March 31, 2021 Note: Above figures are presented on a trailing 12 months basis as of March 31, 2021. See appendix for definitions of revenue payback and interactive subscriber profile. $5.25B Revenue $2.2B Adj. EBITDA $4.25B Consumer and Small Business Revenue $1.0B Comm
Slide 18: Q1 2021: Strong Quarter, Progressing Against 2021 Objectives
Q1 2021: Strong Quarter, Progressing Against 2021 Objectives Driving revenue growth through SAC investment, strategic partnerships, and exceptional customer retention RMR additions of 25% and net residential subscriber growth, aided by Ackerman Continued low attrition of 13.1%; revenue payback of 2.
Slide 19: Strength Across Key Financial and Operating Metrics
Strength Across Key Financial and Operating Metrics M&S revenue: Net unit additions + increase in average pricing resulting in higher RMR, partially offset by residential outright sales from 2019 – 2020 Total revenue: Decline in residential outright sales due to the ownership model change Adjusted E
Slide 20: 2021: Accelerating Efficient Subscriber Growth
2021: Accelerating Efficient Subscriber Growth Gross RMR Additions Net Subscriber Acquisition Costs Revenue Payback 2.5x 2.2x ~3% CAGR ~1% CAGR Mid-teens Growth Note: Historical metrics are presented for the US only and exclude wholesale customers who outsource their monitoring to ADT. - Ackerman -
Slide 21: Summary
Summary Durable recurring revenue model – focus on growth is producing a better top line Significant competitive advantages – a trusted brand, national scale, and the best technicians in the industry Driving innovation and transformation across the business, aided by strategic partnerships ADT: The
Slide 22: Q&A
Q&A
Slide 23: Appendix
Appendix
Slide 24: Snapshot of Business by Customer Type and Unit Count
Snapshot of Business by Customer Type and Unit Count Consumer and Small Business Commercial Total Unit Count ~6,300K ~250K ~6,600K End of Period RMR $316M $29M $345M M&S Revenue $3,774M $430M $4,204M Installation Revenue(1) $479M $567M $1,046M Gross RMR Additions $51M $5M $56M LTM Revenue Payback ~2
Slide 25: Adjusted Free Cash Flow
Adjusted Free Cash Flow For the three months ended ($ in millions) Mar 31, 2021 Mar 31, 2020 Y/Y Change Adjusted EBITDA $542 $539 $3 Capitalized SAC (352) (160) (192) Net Proceeds from Consumer Receivables Facility 22 - 22 Cash Taxes 4 (1) 5 Cash Interest (167) (165) (1) Capital Expenditures (1) (37
Slide 26: Consumer and Small Business Revenue and Adjusted EBITDA
Consumer and Small Business Revenue and Adjusted EBITDA (7%) Installation & Other Monitoring & Service Revenue $MM Adjusted EBITDA $MM (3%) +1% Includes the non-cash impact from residential customer-owned transactions Strong unit and RMR additions; M&S growth offset by lower volume of residential ou
Slide 27: Commercial Revenue and Adjusted EBITDA
Commercial Revenue and Adjusted EBITDA Revenue $MM Adjusted EBITDA $MM Installation & Other Monitoring & Service +3% +$20M Improving revenue and margins after challenging 2020
Slide 28: Additional Historical Quarterly Data
Additional Historical Quarterly Data Notes: Excludes wholesale customers who outsource their monitoring to ADT, unless otherwise noted. LTM Revenue Payback measures the net SAC incurred in the period divided by the recurring monthly revenue added during the period, and represents the approximate tim
Slide 29: Selected Statement of Operations Components
Selected Statement of Operations Components Note: Excludes special items not applicable to the GAAP measures presented.
Slide 30: Statement of Operations
Statement of Operations ‘Three Months Ended (in millions, except per share data) — ye ‘Monitoring and related services TT Installation and other 242 rotal revenue 1,305 i iat 381 Selina general and administrative expenses 450 Depreciation and intangible asset amortization 470 ‘Merger, restructuring,
Slide 31: Segment Information
Segment Information “Taree Months Ended Go milion) Mardi, DecemberSl, September 30, June 30, March 3, Marchal, December3l, Decomber 31, ‘Tota revenue 201 2020 20 2020 21 20 2019 Monitoring and raed services 5 106 Lost $s s Tons Tow Sat SST S30 Installation ad ator 2m 261 20 34 1,046 18 818 3 1305S I
Slide 32: GAAP to Non-GAAP Reconciliation
GAAP to Non-GAAP Reconciliation Note: Represents costs, net of any incremental revenue earned, associated with replacing cellular technology used in many of our security systems pursuant to a replacement program. Represents fees expensed associated with financing transactions.. Represents the conver
Slide 33: GAAP to Non-GAAP Reconciliations: Free Cash Flow
GAAP to Non-GAAP Reconciliations Free Cash Flow and Adjusted Free Cash Flow: Notes: The three months ended March 31, 2020 and the twelve months ended December 31, 2020 included $81 million related to the settlement of a pre-existing relationship in connection with the Defenders acquisition. This was
Slide 34: GAAP to Non-GAAP Reconciliations: Debt to Net Income Ratio
GAAP to Non-GAAP Reconciliations Debt to Net Income Ratio: Note: As adjusted financial information represents the preliminary estimated impact associated with the proposed Transaction on debt, cash and cash equivalents. Debt instruments are stated at face value. Net Leverage Ratio: (in millions) Mar