Littelfuse, Inc. · NASDAQ:LFUS
Littelfuse — Investor Day (February 2021)
49 slides from Littelfuse's investor day presentation, Feb 23, 2021
Slide 1: Littelfuse 2021 Investor & Analyst Event
LITTELFUSE 2021 INVESTOR & ANALYST EVENT February 23, 2021 1
Slide 2: Disclaimers
DISCLAIMERS Important Information About Littelfuse, Inc. This presentation does not constitute or form part of, and should not be construed as, an offer or solicitation to purchase or sell securities of Littelfuse, Inc. and no investment decision should be made based upon the information provided he
Slide 3: Agenda
AGENDA • Trisha • Dave • Matt Cole, • Meenal M&A Strategy Company Strategy Welcome Financial Objectives Tuntland, Heinzmann, SVP, Sethna, Head of President & eMobility & EVP & CFO Investor CEO Corporate Relations Strategy Q&A to follow prepared remarks Confidential and Proprietary | Littelfuse, Inc.
Slide 4: Reiterating Our Q1 2021 Guidance
REITERATING OUR Q1 2021 GUIDANCE Strong Year-on-Year Growth Q1 Revenue: $418 – $432 Million (up 23% at midpoint) Q1 Adjusted EPS*: $1.76 – $1.92 (up 43% at midpoint) *See the Company’s February 3, 2021 press release for further details. Littelfuse provides some guidance on a non-GAAP (adjusted) basi
Slide 5: Company Strategy
COMPANY STRATEGY Dave Heinzmann President & CEO
Slide 6: Littelfuse – A Company That Grows
LITTELFUSE – A COMPANY THAT GROWS EMPOWERING A SUSTAINABLE, CONNECTED, AND SAFER WORLD Who What How We We We Are Do Grow • $1.45B industrial technology • Deliver solutions to 100,000+ • Increase content & share gains company(1) customers through global in industrial, transportation & presence in ove
Slide 7: What We Accomplished Building on Our Strengths
WHAT WE ACCOMPLISHED BUILDING ON OUR STRENGTHS Broader foundation established to drive profitable growth Confidential and Proprietary | Littelfuse, Inc. © 2021 7
Slide 8: What We Delivered: Best-in-Class Shareholder Returns
WHAT WE DELIVERED BEST-IN-CLASS SHAREHOLDER RETURNS Littelfuse Stock Price February 16, 2021 LFUS $276.92 +349% Russell 1000 +183% Littelfuse Stock Price December 31, 2012 $61.71 21% TSR & more than quadrupled market cap to $6 billion+ Sources: Bloomberg (Total Shareholder Return CAGR, 12/31/12 – 2/
Slide 9: 2021–2025 Growth Strategy
2021 – 2025 GROWTH STRATEGY EMPOWERING A SUSTAINABLE, CONNECTED, AND SAFER WORLD Sustainability Connectivity Safety Structural Growth Themes Confidential and Proprietary | Littelfuse, Inc. © 2021 9
Slide 10: 2021–2025 Growth Strategy
2021 – 2025 GROWTH STRATEGY EMPOWERING A SUSTAINABLE, CONNECTED, AND SAFER WORLD Content & High-Growth Markets Strategic Share Gains & Geographies Acquisitions Our Growth Drivers Sustainability Connectivity Safety Structural Growth Themes Confidential and Proprietary | Littelfuse, Inc. © 2021 10
Slide 11: 2021–2025 Growth Strategy
2021 – 2025 GROWTH STRATEGY EMPOWERING A SUSTAINABLE, CONNECTED, AND SAFER WORLD Double-Digit Best-in-Class Deliver Top Tier Revenue Growth Profitability Shareholder Returns Outcomes Content & High-Growth Markets Strategic Share Gains & Geographies Acquisitions Our Growth Drivers Sustainability Conn
Slide 12: 2021–2025 Framework: Continued Top Tier Shareholder Returns
2021 – 2025 FRAMEWORK CONTINUED TOP TIER SHAREHOLDER RETURNS CAPITAL REVENUE EARNINGS CASH FLOW ROIC ALLOCATION • Double-digit • EPS growth • 100%+ free • 5-year goal: • Return 40% revenue > revenue cash flow high-teens of free cash CAGR growth conversion ROIC % flow to shareholders • 17 – 19% • Cap
Slide 13: Structural Growth Themes
STRUCTURAL GROWTH THEMES INCREASING COMPLEXITY DRIVES CONTENT OPPORTUNITIES • Renewable Energy Sustainability • Energy Storage 2021 – 2025 • Electrification • Power Optimization Organic • Electronification Revenue Connectivity • Digital Transformation CAGR • Industry 4.0 5 – 7% • Mobility • Increasi
Slide 14: Primary End Markets
PRIMARY END MARKETS BALANCED, DIVERSE & GLOBAL EXPOSURE Transportation Electronics • Passenger Vehicles • Data Center & Communication • Material Handling Equipment Infrastructure • Heavy Truck • Building Technologies & • Bus / Transit Automation • Construction Equipment • Appliances • Agricultural M
Slide 15: Industrial End Markets Positioned for Continued Growth
INDUSTRIAL END MARKETS POSITIONED FOR CONTINUED GROWTH Factory Automation Renewables & Energy Storage Power Semiconductors Power Semiconductors Passive Protection Passive Protection Components Components Protection Relays Position Sensors Surge Protection Devices Temperature Sensors
Slide 16: Accelerating Industrial Growth: HVAC
ACCELERATING INDUSTRIAL GROWTH HVAC ACQUIRED JANUARY 2021 Contactors Passive Protection Components Transformers Power Semiconductors Protection Relays Temperature Sensors Confidential and Proprietary | Littelfuse, Inc. © 2021 16
Slide 17: Transportation End Markets Extending Our Leadership
TRANSPORTATION END MARKETS EXTENDING OUR LEADERSHIP Passenger Vehicle Material Handling Passive Protection Components Fuses & Fuse Holders Automotive Electronics Power Semiconductors Components Power Distribution Modules High Current Modules Contactors Motor Protection Relays Sen
Slide 18: Traditional Passenger Vehicles: A Leading Technology Partner
TRADITIONAL PASSENGER VEHICLES A LEADING TECHNOLOGY PARTNER Network & Comfort & Safety Connectivity Systems Infotainment & Navigation / ADAS Fluid Management Small Motor Protection Electrical System Protection Littelfuse products have ensured safety & reliability for decades Confidential and Proprie
Slide 19: eMobility & Charging Infrastructure
eMOBILITY & CHARGING INFRASTRUCTURE ADDITIVE TO TRADITIONAL PASSENGER VEHICLE CONTENT High Voltage Power Onboard Charging Distribution Battery Management & Protection EV Charging Power Conversion & Transmission Littelfuse’s eMobility future is built on our strong automotive foundation Confidential a
Slide 20: Electronics End Markets Leveraging Our Leadership
ELECTRONICS END MARKETS LEVERAGING OUR LEADERSHIP Building Technologies Data Center & Communication Infrastructure Passive Protection Components Passive Protection Components Magnetic Sensors Power Semiconductors Power Semiconductors Solid State Relays • Our ‘21 – ’25 organic revenue CAG
Slide 21: Go to Market Strategy: Broad Global Access & Reach
GO TO MARKET STRATEGY BROAD GLOBAL ACCESS & REACH Strategic Culture of Collaboration Deep OEM Distribution Digital Customer Experience (CX) Relationships Partnerships Tremendous reach Long-term product life cycles Local customer support Customer-driven innovation Application breadth Technical applic
Slide 22: Operational & Commercial Excellence Recognized by Our Customers
OPERATIONAL & COMMERCIAL EXCELLENCE RECOGNIZED BY OUR CUSTOMERS Association of Manufacturing Digital Excellence Awards Supplier Quality Transformation Excellence Award (5 sites) Lean Global Six Sigma Presence Culture Supplier Excellence Award Supplier Excellence Award Winning Manufacturing With Appl
Slide 23: Investments for Best-in-Class Organic Growth
INVESTMENTS FOR BEST-IN-CLASS ORGANIC GROWTH BUILDING FORWARD MOMENTUM Digital • Expand new business opportunities in Customer eMobility EARNINGS higher growth markets & applications Experience • Leverage & broaden product portfolio Customer- Ongoing • Enhance internal capabilities Driven Cost • Imp
Slide 24: Commitment to ESG
COMMITMENT TO ESG PRIORITIZING FOR LONG-TERM STAKEHOLDER VALUE Environmental Social Governance • Core product strategy focused • Established Diversity & Inclusion • Formal ESG oversight by on global sustainability; Council, & Employee Resource Nominating & Governance renewables, energy storage, Grou
Slide 25: M&A Strategy
M&A STRATEGY Matt Cole SVP, eMobility & Corporate Strategy
Slide 26: Strategic M&A Enhances Organic Growth
STRATEGIC M&A ENHANCES ORGANIC GROWTH 2012 2013 2014 2015 2016 2017 2018 2021 ON Semiconductor Portfolio (semiconductors) Monolith (semiconductors) SymCom (relays) Sigmar IXYS Hamlin Menber’s S.p.A. (semiconductors) (sensors) Hartland Controls (sensors) (relays) (contactors) Accel AB (sensors) US Se
Slide 27: M&A Priorities Aligned with Organic Growth Strategies
M&A PRIORITIES ALIGNED WITH ORGANIC GROWTH STRATEGIES • eMobility Accelerate Success • Renewables in Higher Growth • Energy Storage Applications & • Power Conversion Markets • HVAC 2021 – 2025 • Commercial Vehicles Inorganic • Japan Revenue Expand Geographic • Korea Penetration • India CAGR 5 – 7% •
Slide 28: Accelerating HVAC & Industrial Market Growth Opportunities Through M&A
ACCELERATING HVAC & INDUSTRIAL MARKET GROWTH OPPORTUNITIES THROUGH M&A ACQUIRED JANUARY 2021 Confidential and Proprietary | Littelfuse, Inc. © 2021 28
Slide 29: Acquisition Principles
ACQUISITION PRINCIPLES A FOUNDATION FOR ENHANCED ORGANIC GROWTH Align with business growth strategies Cultivate a systemic pipeline of bolt-ons Accelerating Enhance above-market organic revenue growth Profitable Margin improvement potential Growth Year 5 target: double-digit operating marg
Slide 30: How We Succeed in M&A
HOW WE SUCCEED IN M&A Solid balance sheet and cash Strong alignment of M&A flow provides sufficient capital objectives across businesses to enable success and company strategy Robust diligence and Investing in resources to integration processes informed enhance our funnel of by key value creation dr
Slide 31: Break
BREAK 10 MINUTE BREAK P/4 Littelfuse
Slide 32: Financial Objectives
FINANCIAL OBJECTIVES Meenal Sethna, EVP & CFO
Slide 33: Demonstrated Financial Strength Through Cycle
DEMONSTRATED FINANCIAL STRENGTH THROUGH CYCLE REINFORCING OUR COMMITMENT TO PROFITABLE GROWTH 2017 – 2019 2020 PRIORITIES LOOKING FORWARD EXECUTION • Executed path to achieve • Increase liquidity though • Business portfolio & 5-year financial objectives cash generation and debt fundamentals remain –
Slide 34: 2021–2025 Framework: Continued Top Tier Shareholder Returns
2021 – 2025 FRAMEWORK CONTINUED TOP TIER SHAREHOLDER RETURNS CAPITAL REVENUE EARNINGS CASH FLOW ROIC ALLOCATION • Double-digit • EPS growth • 100%+ free • 5-year goal: • Return 40% revenue > revenue cash flow high-teens of free cash CAGR growth conversion ROIC % flow to shareholders • 17 – 19% • Cap
Slide 35: Electronics Product Segment
ELECTRONICS PRODUCT SEGMENT 2021 - 2025 Financial Targets 2020 Revenue: $938M Organic Revenue CAGR: Mid-single digit % Operating Margin: High-teens – 20% Semiconductors Passive Components Sensors Growth & Profitability Catalysts High-Growth Markets: Electronification & Leverage Strong Connectivi
Slide 36: Automotive Product Segment
AUTOMOTIVE PRODUCT SEGMENT 2021 - 2025 Financial Targets 2020 Revenue: $396M Organic Revenue CAGR: High-single digit % Operating Margin: Mid-teens % Auto Fuses Auto Sensors Commercial Vehicle Products Growth & Profitability Catalysts High-Growth Markets: Margin Expansion led Electrification Geog
Slide 37: Industrial Product Segment
INDUSTRIAL PRODUCT SEGMENT 2021 - 2025 Financial Targets 2020 Proforma Revenue*: Organic Revenue CAGR: Mid-single digit % $180M Operating Margin: High-teens % Fuses Relays/Sensors Hartland Controls Growth & Profitability Catalysts High-Growth Markets: Geographic Execute Growth Margin Expansion l
Slide 38: Free Cash Flow Consistently 100%+ of Net Income
FREE CASH FLOW CONSISTENTLY 100%+ OF NET INCOME $1.3 BILLION GENERATED SINCE 2013 ($ in millions) Free Cash Flow* $257 $203 $202 $183 $134 $121 $122 $82 2013 2014 2015 2016 2017 2018 2019 2020 *Free Cash Flow = cash flow from operations less capital expenditures Confidential and Proprietary | Littel
Slide 39: Robust Cash Generation Drives Strong Balance Sheet
ROBUST CASH GENERATION DRIVES STRONG BALANCE SHEET AMPLE LIQUIDITY TO SUPPORT GROWTH STRATEGY • Financial liquidity & capacity post Conservative debt ladder with pandemic minimal near-term maturities • Consistent 100%+ free cash flow conversion • Attractive cash tax rate profile $130 • 18 – 20% tax
Slide 40: Prioritized Deployment of Cash
PRIORITIZED DEPLOYMENT OF CASH GROWTH INVESTMENTS DRIVE INCREASING VALUE FOR SHAREHOLDERS ORGANIC INORGANIC RETURN TO SHAREHOLDERS INVESTMENTS INVESTMENTS Programs that: • Strategic acquisitions Dividends Share to enhance organic Repurchases • Drive revenue growth growth • 10+ years of growing • Opp
Slide 41: Path to High-Teens ROIC
PATH TO HIGH-TEENS ROIC ORGANIC & INORGANIC GROWTH ARE KEY 20% • Operating income growth and margin expansion drive significant ROIC +200 - improvement 300 bps • Organic growth 15% Upper High • P&L normalizes post COVID Teens +400 – Teens • Completion of IXYS supply chain 500 bps % synergies 10% Mid
Slide 42: 2021–2025 Framework: Continued Top Tier Shareholder Returns
2021 – 2025 FRAMEWORK CONTINUED TOP TIER SHAREHOLDER RETURNS CAPITAL REVENUE EARNINGS CASH FLOW ROIC ALLOCATION • Double-digit • EPS growth • 100%+ free • 5-year goal: • Return 40% revenue > revenue cash flow high-teens of free cash CAGR growth conversion ROIC % flow to shareholders • 17 – 19% • Cap
Slide 43: Corporate Strategy Summary
CORPORATE STRATEGY SUMMARY Dave Heinzmann President & CEO
Slide 44: 2021–2025 Growth Strategy
2021 – 2025 GROWTH STRATEGY EMPOWERING A SUSTAINABLE, CONNECTED, AND SAFER WORLD Double-Digit Best-in-Class Deliver Top Tier Revenue Growth Profitability Shareholder Returns Outcomes Content & High-Growth Markets Strategic Share Gains & Geographies Acquisitions Our Growth Drivers Sustainability Conn
Slide 45: Littelfuse Competitive Advantage
LITTELFUSE COMPETITIVE ADVANTAGE Trusted Global Innovative Product Strong Customer & Brand Channel Portfolio of Multiple Reliability, Quality & Safety Partnerships Technologies Industry- Breadth & Depth Leading Global Reach, of Application Expertise Technical & Engineering Local Touch Knowledge Our
Slide 46: Compelling Investment Proposition
COMPELLING INVESTMENT PROPOSITION A PROVEN SOURCE OF VALUE CREATION Positioned within structural growth themes across diverse end markets Focused on high-growth applications that enable above market organic growth through the cycle High-value, high-opportunity product portfolio Deep customer
Slide 47: Q&A
Q&A
Slide 48: Appendix
- Oe ki APPENDIX pee |
Slide 49: Supplemental Financial Information
LITTELFUSE, INC. SUPPLEMENTAL FINANCIAL INFORMATION (In millions of USD) Free cash flow reconcilation YTD-20 YTD-19 YTD-18 YTD-17 YTD-16 YTD-15 YTD-14 YTD-13 Net cash provided by operating activities $ 258.0 $ 245.3 $ 331.8 $ 269.2 $ 180.1 $ 165.8 $ 153.1 $ 117.4 Less: Purchases of property, plant a