Slide 1: Brady Corporation Investor Presentation
Brady Corporation Investor Presentation May – August, 2021
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: Brady's Mission & Vision
Brady’s Mission & Vision 3 Brady will: • Be the expert in safety, identification, and compliance. Sustainable • Possess deep knowledge in niche applications. Long-Term • Solve problems and provide solutions for our customers. • Innovate to provide market-leading, high-performance Shareholder product
Slide 4: Summary
Summary 4 Global Leader with Innovative Solutions: • Leader in niche safety, identification, and compliance markets. • Diversified customer base, products, and geographic footprint. • 100+ year history of innovation & strong customer service. Focused on Long-term Sustainable Results: • Strong focus
Slide 5: Geographical Presence
Geographical Presence 5 F’20 Sales by Region (67 facilities in 32 countries) 5% 13% 53% 29% ID Solutions: Workplace Safety: Americas = 68% EMEA = 51% EMEA = 21% Americas = 31% Asia = 11% Australia = 18% U.S.A. Rest of Americas Europe, Middle East & Africa Asia-Pacific Canada, Mexico, Brazil. Belgium
Slide 6: Global Divisions
Global Divisions 6 Identification Solutions (approx. 73% of sales) Workplace Safety (approx. 27% of sales) Products: Products: • Safety & Facility ID • Vast offering of workplace safety • Product ID products (signs, tags, labels, safety • Wire ID equipment, etc.). • Healthcare ID. Primary Brands: Pr
Slide 7: Managing Beyond the Pandemic
Managing Beyond the Pandemic 7 Our Priorities: • Produced products to help in the fight of COVID-19. • Prioritized keeping our employees safe and ensuring steady supply to serve our customers. Performance: • 11.1% sales growth in Q3 of F’21. • Strong sales growth and expense management resulted in r
Slide 8: Recent Acquisition Activity
Recent Acquisition Activity 8 In Q4 of F’21, we completed three acquisitions: • Magicard Limited - $59M purchase price. • Nordic ID - $13M purchase price. • Code Corp. - $173M purchase price. Strategic Rationale: • Technology-based acquisitions. • To move Brady into faster-growing end markets. Acqui
Slide 9: Acquisition of Magicard
Acquisition of Magicard (May 21, 2021) 9 Magicard Overview: • U.K.-based company with approximately 100 employees. • A full range of desktop devices to meet local, on-demand, secure ID card printing requirements. • Specialized full-color, high-resolution identification card printers with built-in se
Slide 10: Brady's Track & Trace Solutions
Brady’s Track & Trace Solutions 10 RFID Readers Mobile Nordic ID & Code Benchtop Barcode Readers Label Automation Expertise Historical Brady Portfolio
Slide 11: Acquisition of Nordic ID
Acquisition of Nordic ID (May 21, 2021) 11 Nordic ID Overview: • Finnish publicly-traded company with less than 50 employees. • Nordic ID has a complete range of RFID readers, scanners, and the associated software platform. Strategic Rationale: • The acquisition of Nordic ID provides a complementary
Slide 12: Acquisition of Code Corp
Acquisition of Code Corp 12 Code Corp. Overview: • U.S.-based company with approximately 100 employees. • Well-established brand for high-performance barcode scanners. • Strong image recognition software and a history of strong innovation with 100+ patents. • Strong presence in U.S. healthcare and e
Slide 13: Acquisition Financial Overview
Acquisition Financial Overview 13 The combined financials of the acquisitions completed in Q4 F’21 are as follows: Overall: • All acquisitions are in the IDS segment. • Acquisitions funded with cash on hand as well as borrowings on our revolving line of credit (interest rate below 1%). Fiscal Year E
Slide 14: Summary
Summary 14 We are Shifting our Portfolio to Faster-Growing Applications & End Markets: • Magicard increases our presence in access control and credentials. • Code & Nordic ID fill gaps in our track-and-trace product offering. • Once integrated, we will increase our presence in what we believe to be
Slide 15: Taking the Long View
Taking the Long View 15 Environmental, Social, Governance Environmental Social Governance • Upgraded • Employee • Strong Culture. Facilities. Engagement. • Executive • Reduced Footprint. • Diversity & Affinity Compensation. • Energy Efficiency. Groups. • Diverse Board • Waste Reduction. • Data Priva
Slide 16: Financial Overview
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Slide 17: Revenues
Revenues 17 SALES – ANNUAL TRENDS (millions of USD) SALES: $1,200 $1,172 $1,174 $1,161 • Sales were growing prior to the $1,121 $1,113 $1,081 pandemic. • Returned to organic sales growth $1,000 in Q3 of F’21. • Investing in acquisitions that $800 complement our organic growth F'15 F'16 F'17 F'18 F'1
Slide 18: Gross Profit Margins
Gross Profit Margins 18 GPM – ANNUAL TRENDS GROSS PROFIT MARGIN: 60% • Strong focus on sustainable $700 50% 50% 50% 50% 49% 48% 50% operational improvements and automation throughout our $600 $588 $579 40% businesses. $558 $559 $558 $529 • History of strong gross profit 30% $500 margins approaching
Slide 19: Research & Development
Research & Development 19 R&D EXPENSE – ANNUAL TRENDING (millions of USD) R&D EXPENSE: 3.9% 3.9% 3.8% $50 4.0% 3.6% • Investing in R&D to drive future $45 $45 organic sales growth. 3.2% 3.5% $45 3.1% $41 • Increased the strength and $40 3.0% $40 diversity of our new product $37 pipeline. $36 2.5% $3
Slide 20: SG&A Expense is Trending Downward
SG&A Expense is Trending Downward 20 SG&A EXPENSE – ANNUAL TRENDING (millions of USD) SG&A EXPENSE: 36% 36% $450 • Simplified and streamlined 35% organization focused on driving $423 35% 33% sustainable efficiency gains. $405 32% • Investing in sales and marketing $400 $388 $390 31% activities to dr
Slide 21: Pre-Tax Income
Pre-Tax Income 21 INCOME BEFORE INCOME TAXES - ANNUAL TRENDS (millions of USD) INCOME BEFORE TAXES: $165 $152 • History of strong year-over-year $150 $141 * pre-tax earnings growth leading $127 $109 into the pandemic. $100 • Reduced cost structure, investments to drive organic $50 growth, and a stro
Slide 22: Cash Generation
Cash Generation 22 CASH FROM OP. ACTIVITIES – ANNUAL TREND (millions of USD) CASH GENERATION: $162 • Cash flow from operating activities was $141M in F’20 (125% of net $150 $139 $144 $143 $141 income). Free cash flow* was $113.7M in F’20. • F’20 impacted by a temporary build-up of inventory to ensur
Slide 23: Net Cash
Net Cash 23 NET CASH (millions of USD) $350 $322 $300 $278 $256 $245 $240 $250 $229 $218 $200 $188 $190 $151 $150 $138 $129 $100 $73 $48 $44 $50 $0 Q1 F'18 Q2 F'18 Q3 F'18 Q4 F'18 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 Q3 F'21 STRONG BALANCE SHEET: • April 30
Slide 24: Global Divisional Results (Sales & Segment Profit %)
Global Divisional Results (Sales & Segment Profit %) 24 IDENTIFICATION SOLUTIONS (millions of USD) Q3 F’21 IDENTIFICATION SOLUTIONS: 22% $250 21% 20% • Revenues increased 12.9%: 20% 20% 20% 19% 19% 18% 20% 18% 19% • Organic growth = + 9.8%. $222 $218 $225 $218 $209 $214 $215 • Fx = + 3.1%. $205 $198
Slide 25: Summary
Summary 25 We are Financially Strong: • Q3 F’21 EPS was an all-time high. • Consistent cash generation in excess of net income. • Cash of $322M and no outstanding debt as of April 30, 2021. • Completed 2 acquisitions on May 21st using all foreign cash. We are Investing in our Future: • Investing in
Slide 26: Investor Relations
Investor Relations 26 Brady Contact: Ann Thornton 414-438-6887 Ann_Thornton@Bradycorp.com See our website at www.bradycorp.com/investors
Slide 27: Appendix - Q3 F'21 Financial Review
27 Appendix - Q3 F’21 Financial Review
Slide 28: Q3 F'21 Financial Summary
Q3 F’21 Financial Summary 28 • Sales were $295.5M in Q3 of F’21 compared with $265.9M in Q3 of F’20. – Organic sales grew 6.5% and foreign currency translation increased sales 4.6%. • Gross profit margin of 50.4% in Q3 of F’21 compared with 48.7% in Q3 of F’20. • SG&A expense of $90.8M (30.7% of sal
Slide 29: Sales Overview
Sales Overview 29 SALES (millions of USD) $300 $293 $295 $296 $290 $287 $282 $277 $277 $275 $266 $266 $252 $250 $225 $200 Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 Q3 F'21 Organic Sales 4.7% 2.3% 2.4% 1.7% (0.4%) (1.2%) (6.0%) (13.7%) (4.9%) (6.3%) 6.5% Q3 F’21
Slide 30: Gross Profit Margin
Gross Profit Margin 30 GROSS PROFIT & GPM% (millions of USD) 50.3% 50.3% 50.4% 50.0% 49.5% 49.6% 50% 49.3% 48.7% 48.9% 48.7% $149 $150 $147 $146 $147 $141 $140 $139 47.1% $135 $130 $130 45% $125 $119 $100 40% Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F'20 Q1 F'21 Q2 F'21 Q3 F'21 Q3
Slide 31: SG&A Expense
SG&A Expense 31 SG&A EXPENSE AND SG&A EXPENSE AS A % of SALES (millions of USD) $110 32.3% 32.8% 32.7% 35% 31.2% 31.6% 31.3% 30.9% 30.7% 30.2% 30.2% $100 30.0% $95 $95 30% $93 $90 $91 $89 $90 $87 25% $83 $83 $82 $80 $76 20% $70 15% $60 10% Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q4 F
Slide 32: R&D Expense
R&D Expense 32 R&D EXPENSE AND R&D EXPENSE AS A % of SALES (millions of USD) $14.0 3.9% 3.9% 3.9% 4.0% 3.8% 3.8% 3.8% 3.8% 3.7% 3.7% 3.7% 3.7% $12.0 $11.4 $11.3 $11.3 $11.3 $11.1 $11.0 $10.5 3.5% $10.2 $9.8 $9.9 $10.0 $9.4 3.0% $8.0 $6.0 2.5% Q1 F'19 Q2 F'19 Q3 F'19 Q4 F'19 Q1 F'20 Q2 F'20 Q3 F'20 Q
Slide 33: Income Before Income Taxes
Income Before Income Taxes 33 INCOME BEFORE INCOME TAXES AND LOSSES OF UNCONSOLIDATED AFFILIATE (millions of USD) $50 $47.1 $47.8 $41.0 $41.6 $42.4 $42.2 $39.9 $39.4 $40 $36.7 $34.9 $30 $22.2 $20 $10 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 F'19 F'19 F'19 F'19 F'20 F'20 F'20 F'20 F'21 F'21 F'21 Year on Year
Slide 34: Net Income & Diluted EPS
Net Income & Diluted EPS 34 NET INCOME PER CLASS A DILUTED SHARE NET INCOME (millions of USD) $0.70 $0.71 $0.68 $0.65 $0.64 $40 $37.5 $37.3 $0.62 $36.6 $0.58 $0.59 $34.8 $33.6 $33.5 $0.60 $0.55 $0.53 $30.9 $30.6 $29.2 $30 $27.7 $0.40 $20 $0.26 $13.6 $0.20 $10 $0.00 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 35: Cash Generation & Uses
Cash Generation & Uses 35 CASH FLOW FROM OPERATING ACTIVITIES (millions of USD) CASH FLOWS IN Q3 OF F’21: $65.3 • Cash flow from operating activities was $56.0M $62.8 $56.0 in Q3 of F’21 compared to $42.8M in Q3 of F’20. $60 $52.7 $45.1 • Free cash flow* was $49.1M in Q3 of F’21 $42.8 $38.8 $36.1 co