Methode Electronics, Inc. · NYSE:MEI
Methode Electronics — Baird Industrial Conference November 2011
37 slides from Methode Electronics's conference presentation, Nov 8, 2011
Slide 1: Investor Presentation Baird Industrial Conference November 2011
Investor Presentation Baird Industrial Conference November 2011
Slide 2: Safe Harbor
Safe Harbor 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 provided under the sec
Slide 3: Methode Is …
Methode Is …
Slide 4: Three World Class Solution Groups
Three World Class Solution Groups Au tomoti ve • Integrated center stack modules • Electronic and electromechanical devices • Customized sensors In te rc onnec t • Field-effect technology and user- interface panels • Copper and fiber optic interconnect solutions • Conductive polymer and thick film i
Slide 5: Diverse Business With Global Operations
Fiscal 2011 Sales By Manufacturing Location Fiscal 2011 Sales By Reporting Segment 5 Diverse Business With Global Operations Automotive 52.8% Interconnect 32.4% Power 11.8% Other 3.0% North America 40.2% Europe 34.3% Asia 25.5%
Slide 6: Investment Appeals
Investment Appeals > Differentiate our customers’ products to drive higher margins > Through recent restructuring, repositioned global manufacturing footprint to lower cost countries > Capitalizing on fundamental changes in large, growth markets (+$14 billion in total available markets) > Global eng
Slide 7: Methode Is Poised For Improved Performance
Methode Is Poised For Improved Performance
Slide 8: Rebuilding Methode's Revenue Stream
$373 $428 $457 $510 $630 $709 $0 $100 $200 $300 $400 $500 $600 $700 $800 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 8 Rebuilding Methode’s Revenue Stream Methode’s Historical High Sales of $555 in Fiscal 2008 *All numbers millions of dollars > Sales projections as of November 2011 > Projections are approxi
Slide 9: Rebuilding Methode's Revenue Stream: Anticipated Revenues
9 Rebuilding Methode’s Revenue Stream > Major Fiscal 2013 Anticipated Revenues • Approximately $15m from the second award of the MyFord Touch center console (part of $40m annualized award) • Approximately $9m from the GM integrated center stack (part of approximate $100m annualized award) • Approxim
Slide 10: Long-Term Objectives/Strategy
Long-Term Objectives/Strategy > Use Methode's technology toolbox to design and engineer custom products that will drive margin expansion > Drive sustainable, profitable growth by continuing to provide customers with solutions that create a competitive advantage in their market > Invest in Methode’s
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Slide 12: Critical Solutions to the Automotive Industry
Critical Solutions to the Automotive Industry 12
Slide 13: Advanced Technology Brings Innovation to Automotive
Advanced Technology Brings Innovation to Automotive 13 > Field Effect > Touchscreen (Harsh/Severe environment) > Integrated Back-Lighting > Eddy Current > Hall Effect > Magneto-elastic > Multi-spectral Imaging** > Conductive printable inks > Thick film inks > Haptics** **Strategic partner
Slide 14: Field Effect Technology Enables Innovation and Differentiation
> Expanded TouchSensor’s field-effect technology from white goods to automotive > Innovated automotive switches • From simple commodities to custom engineered modular solutions • From strictly competing on price to winning business based on ability to differentiate customer’s product > Improved Reli
Slide 15: TouchSensor Differentiates Center Stacks
TouchSensor Differentiates Center Stacks > Touch sensitive technology allows driver to engage and operate center console and climate controls with the touch of a finger instead of traditional buttons and switches > Featuring patented solid-state, field- effect technology > Uniquely illuminated volum
Slide 16: GM Center Stack Award
GM Center Stack Award > “Next generation” Integrated Center Stack program for multiple GM vehicle platforms > Center stacks to be featured on certain vehicles starting in model year 2013 > Expected to have a five-year program life > Production will begin during Methode’s fiscal year 2013 fourth quar
Slide 17: Acquisition And Vertical Integration Provides Cost Savings
> Monterrey, Mexico, injection molding and painting business from Nypro Inc. > Vertically integrate intricate paint process for automotive center consoles for Ford and GM programs • Enhance quality • Mitigate supply risk • Improve gross margins > State-of-the-art facility with • 52 injection mold ma
Slide 18: Process Technology Enables Transmission Solution
> Automotive Lead Frame • Integrated power and signal distribution backbone for a transmission controller • Highly complex insert molded assembly that reduces electrical connections required with traditional design • Improves system reliability and reduces cost • Three awards total $40 million in av
Slide 19: Groundbreaking Technology
Groundbreaking Technology 19 > Patented magneto-elastic technology > Utilizes magnetic properties of the material to measure various process parameters > Potential uses include active measurement of • Torque • Speed • Linear position • Load • Force > Rugged, reliable, and designed to operate under h
Slide 20: Magneto-Elastic Automotive Awards
> Provide top tier automotive OEM with custom sensor for measurement of clutch plate position in fuel-efficient, dual clutch, six-speed transmission • Measures linear position with resolution nearly ten times current, commercially viable technology • Sensor designed to withstand harsh environment of
Slide 21: Torque-Sensing Awards
Torque-Sensing Awards 21 > Bosch eBike • Traditional pedal bikes with electric motor that provides pedal assist • Magneto-elastic sensor determines how hard the rider is pedaling, and instantly adjusts the amount of support the motor needs to deliver • Approximately $2 million in revenue in Fiscal 2
Slide 22: Magneto-Elastic Automotive Opportunities
Magneto-Elastic Automotive Opportunities > Referred to in recent Ford press release on advanced technologies • Technology used on new fuel-efficient powertrains, featuring 8-speed automatic transmission • Methode's torque sensor will allow significant advancement in powertrain controls, improves shi
Slide 23: Aiienscve aizcrmoncs,we.
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Slide 24: Interconnect Encompasses User Interface Technology
Interconnect Encompasses User Interface Technology 24 > Expanded presence in User-Interface (UI) market through acquisitions of • TouchSensor in March 2007 – 15 patents and solid platform into new markets • Hetronic in October 2008 - application specific radio remote controls, path to market to indu
Slide 25: TouchSensor's Field Effect Technology Enabling Differentiation
TouchSensor’s Field Effect Technology Enabling Differentiation > TouchSensor technology used on 70% of North American kitchen appliances with solid-state touch interfaces > User interface solutions for medical, industrial and vending applications will make devices easier to use and more reliable 25
Slide 26: Hetronic's World Class Safety Solutions
Hetronic’s World Class Safety Solutions > Hetronic safety radio remote controls are used on five continents controlling multi-million dollar equipment > Touch and biometric technologies are enabling safer and more efficient operations Hetronic Locomotive Radio Remote Control Hetronic Radio Remote Co
Slide 27: Power Solutions
Power Solutions
Slide 28: Methode's Power Solutions
Methode’s Power Solutions 28 Power Rail Power Connectors and Contacts Thermal Management Bus Bar Power Cables and FusionLug High Precision Machined Bus Bar Power PCBs Powder Coated Bus Bar Power PCBs Power PCBs Power Connector Power Cabling Thermal Management Laminated Bus Bar
Slide 29: Power Solutions Possibilities
> Technology Toolbox • Heat Sinks • Tribotek™ Connectors • Heavy Copper PCBs** • Laminated Busbars • Powerflex ™cable • FusionLug™ • Sonicrimp™ Power Solutions Possibilities 29 **Strategic partner > Design and manufacture innovative products for military, aerospace, industrial and automotive markets
Slide 30: Growth in Hybrids Creates Opportunities For Power Solutions
Growth in Hybrids Creates Opportunities For Power Solutions > Transportation Segment • Electric and Hybrid vehicles require power distribution components • Powerflex™, FusionLug® and bus bars are designed into electric vehicle battery and charging systems > Investment in • Developer of chargers, inv
Slide 31: Power Solutions Technologies Enable Green Awards
> On-board integrated power unit for pure electric commercial truck • 10 kW charger, auxiliary 14-volt power supply and associated vehicle interface controller • Based on Eetrex’s power electronics technology and know-how and Methode’s automotive engineering and design for manufacturing expertise, t
Slide 32: Financial Performance
Financial Performance
Slide 33: Recent Financial History
33 Recent Financial History > Remained operating cash flow positive through recession and restructuring > 35 years of uninterrupted dividends > $57.4 million net cash (Q1 Fiscal 2012) * Millions + Earnings have been adjusted to eliminate restructuring and impairment charges and other one-time charge
Slide 34: Fiscal 2012 and 2013 Guidance
34 Fiscal 2012 and 2013 Guidance > Fiscal 2012 • Sales of $450 - $465m • EPS of $0.13 - $0.21 • Q4 expected to be strongest quarter • Vendor production and delivery issues of $2.5 - $3.0m • Design, development, launch costs for automotive programs of $3.0m • Development costs for on-board integrated
Slide 35: Rebuilding Methode's Margins
35 Rebuilding Methode’s Margins Restructuring Post - Restructuring Fiscal 2009 Fiscal 2010 Post- Restructuring Target Fiscal 2011 Fiscal 2014 Target Auto 16.5% 18.3% High teens to low 20% 17.6% Low to mid 20% Interconnect 24.0% 28.7% High 20% 30.3% Low to mid 30% Power 12.9% 26.0% Mid to high 20% 21
Slide 36: Conclusion
Conclusion Nia _—— > <a
Slide 37: Methode Is Positioned For Growth
Methode Is Positioned For Growth > Projected revenue stream of booked business represents approximately 16% compound annual growth (FY 2012-2015) > Expanding business with current customers > Global restructuring actions have lowered MEI’s revenue break-even point > Proprietary engineered solutions
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