Benchmark Electronics, Inc. · NYSE:BHE
Benchmark Electronics — Investor Presentation (November 2015)
19 slides from Benchmark Electronics's investor presentation, Nov 12, 2015
Slide 1: Strategic Update
Strategic Update November 12, 2015 design develop deliver advanced technology
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document contains forward-looking statements within the scope of the Securities Act of 1933 and the Securities Exchange Act of 1934. The words “expect,” “estimate,” “anticipate,” “predict” and similar expressions, and the negatives thereof, often identify forward-look
Slide 3: Benchmark: Leading global integrated EMS player
Benchmark: Leading global integrated EMS player Founded: 1986 Who We Are ► Global provider of engineering, design, Stock Symbol: manufacturing and testing solutions NYSE: BHE ► Solutions provider of choice for customers’ Employees: most critical technical problems 11,000 Locations: Our Goals 20 faci
Slide 4: Benchmark: Leading with Engineering Solutions
Benchmark: Leading with Engineering Solutions ►Strong Foundation & Industrials Diversification 31% Complex Design and Manufacturing Solutions Leading Positions in Higher Value Markets Medical 53% 13% Balanced Global Footprint Longstanding Customer Relationships Test & Healthy High-Performi
Slide 5: Strong Track Record and Proven Execution
Strong Track Record and Proven Execution 2011 – Present Revenue ($bn) ► +7% Annual Revenue Growth $2.8 $2.5 $2.5 $2.6 $2.3 ► +380bps Annual ROIC improvement ► +170bps Annual Non-GAAP Operating Margin Expansion 2011 2012 2013 2014 LTM 9/30/15 Return on Invested Capital Non-GAAP Operating margin 10.2%
Slide 6: Strategic Focus Areas
Strategic Focus Areas >10% Annual Growth in Higher Value Markets Portfolio Focus on expansion in Key End Markets • Industrials (including aerospace & defense) Management • Medical Technologies • Test & Instrumentation (including semi-capital equipment) >5% Long-Term Operating Margin Margin Advan
Slide 7: Committed to enhancing shareholder value
``Committed to enhancing shareholder value 1 #1 strategic priority: continue shift to higher value 1. business with engineering-led solutions 2 Benchmark is best positioned to capitalize on this 2. opportunity and has managed this transition most effectively 3 Corporate Strategy = Maximize sharehold
Slide 8: Higher value mix = significant outsourcing opportunities
1 Higher value mix = significant outsourcing opportunities Current penetration of EMS ($bn) Penetration Market size $107 ► Higher value markets provide stable growth well in excess of traditional markets $65 ► Significantly underpenetrated markets $62 provide opportunity for Benchmark given expertis
Slide 9: Shift to higher value mix has driven superior performance
2 Shift to higher value mix has driven superior performance 2011 – LTM 9/30/15 Benchmark Peer median Current higher value mix 53% 36% Top 10 customer concentration change (5.0%) +1.7% 1. TSR 37% 31% 2. Revenue CAGR % +3.9% (0.9%) 3. Gross margin change +2.1% +0.3% 4. Operating margin change +1.9% (0
Slide 10: Evolving our portfolio & managing traditional risk
2 Evolving our portfolio & managing traditional risk 2007 LTM 9/30/2015 Target mix $0.9bn 30% 32% $1.2bn 47% $1.4bn 53% $2.0bn 68% 70% Revenue Revenue Revenue $2.9bn $2.6bn >$3.0bn Traditional markets Higher value markets Fully outsourced Greater outsourcing Software replacing hardware Stron
Slide 11: Significant progress in higher value markets
2 Significant progress in higher value markets Q3-15 New business wins Q4-15 Outlook Industrials T&I 3% Comp, ► Up high single digits Telco 13% Medical Medical 22% ► Up high single digits Test & Instrumentation Industrials ► Down mid double digits 62% Customers Traditional markets Higher value marke
Slide 12: Successful M&A track record supports our strategy
3 Successful M&A track record supports our strategy Year Close-to-Core - End market focus ► Aerospace, semi-cap, industrials, instrumentation, 2013 medical and communications ► Industrials, including aerospace and defense, medical 2013 and communications 2015 ► Industrials, including aerospace and d
Slide 13: Secure Technology acquisition = significant growth potential
3 Secure Technology acquisition = significant growth potential Snapshot Core Strategic Benefits ► Aligns with higher value segments of industrials including A&D ► Strengthens engineering-led solutions ► Cross-selling opportunities ► Encrypted and ruggedized communication systems Adjacent Benefits ►
Slide 14: Balanced capital deployment track record
4 Balanced capital deployment track record Cumulative capital allocation FY11– YTD 9/30/15 ► Continue investing to drive growth and extend Capex business model with Voice-of-Customer inputs aligned for organic growth 43%2 40%2 Repurchases Capex 30% 29% ► Continue to evaluate and pursue strategic, M&
Slide 15: Continuous working capital improvement
5 Continuous working capital improvement Cash conversion cycle 94 91 ► CCC is driven by end market exposure – LT target: 78 75 days 74 lower volume, higher complexity products have lower velocity ► Continuous focus on improvement has 44 maintained consistency versus peers (1 day change versus 11 day
Slide 16: Increase current and long-term shareholder value
Increase current and long-term shareholder value >10% Annual Growth in Higher Value Markets Portfolio Focus on Expansion in Key End Markets • Industrials (including aerospace & defense) Management • Medical Technologies • Test & Instrumentation (including semi-capital equipment) >5% Long-Term Oper
Slide 17: Questions?
Questions ? design develop deliver advanced technology 16
Slide 18: Appendix
Appendix design develop deliver advanced technology 17
Slide 19: GAAP to Non-GAAP reconciliations
GAAP to Non-GAAP reconciliations LTM (In millions) 2007 2008 2009 2010 2011 2012 2013 2014 2015 Income from operations (GAAP) $90.3 ($166.5) $52.3 $88.4 $41.3 $75.6 $116.5 $100.1 $99.7 Goodwill impairment - 247.5 - - - - - - - Restructuring charges and integration costs 2.8 8.3 6.7 4.5 2.2 9.3 7.1 8
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