Cts Corporation · NYSE:CTS
Cts — Investor Presentation (February 2022)
27 slides from Cts's investor presentation, February 2022
Slide 1: CTS Investor Presentation February 2022
CTS Investor Presentation February 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document contains statements that are, or may be deemed to be, forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, but are not limited to, any financial or other guidance, sta
Slide 3: CTS is a Leading Designer and Manufacturer of Custom Engineered Solutions
CTS is a Leading Designer and Manufacturer of Custom Engineered Solutions that Sense, Connect, and Move - Enabling an Intelligent and Seamless World LTM Revenue Custom Solutions Non-Transportation Shareholder Value Revenue $513 Million 1 >95% Of Revenue 11.5% CAGR 2 $118 Million Returned 3 Global de
Slide 4: Why Invest in CTS
Why Invest in CTS Strategically Positioned Successful Strong Executional to Diversify & Grow Business Model Capabilities 4
Slide 5: Multiple Drivers for Above Market Growth
Multiple Drivers for Above Market Growth Sustainability Automation Healthcare Innovation Capitalize on Secular • Electrification • Industry 4.0 • Improved Diagnostics Growth Themes • Reduced Emissions • Factory Automation • Non-invasive • Fluid Metering • Defense Automation • Patient Experience Appl
Slide 6: Diversifying Revenue to High Growth End Markets Outside of Transportation
Diversifying Revenue to High Growth End Markets Outside of Transportation 2017 2021 Long term target Revenues $423M Revenues $513M +10% CAGR 1 3% 5-15% 9% 4% 5% 9% 8% 10-20% 18% < 50% 55% 65% 24% 20-30% Transportation Industrial Medical Aero & Defense Telecom & IT • Utilizing core capabilities and d
Slide 7: Successful Business Model
Successful Business Model The CTS Advantage – Your Partner in Smart Solutions Custom Technology Domain Global Engineered Leadership Expertise Footprint Solutions Recognized leader with Deep experience Engineered solutions lead Commercial, Engineering global design and solving complex to long term cu
Slide 8: Long Term Relationship with Blue-chip Customers
Long Term Relationship with Blue-chip Customers 8
Slide 9: Strong Execution Capabilities
Strong Execution Capabilities Improved Strengthened Strategic Operational Balance Investments Efficiency Sheet For Growth - Gross Margin +590 bps1 - 112% free cash flow2 - Enhanced front-end capabilities - Streamlined SG&A (470) bps1 - $118M returned to Shareholders3 - Investments in new products -
Slide 10: Secular Themes Drive Growth Across End Markets
Secular Themes Drive Growth Across End Markets Sustainability Automation Healthcare Innovation Electrification Industry 4.0 Improved diagnostics Reduced emissions Factory automation Non-invasive Fluid metering Passenger safety Patient experience Energy efficiency Defense automation 10
Slide 11: Leader in Discrete Position Sensing Solutions in Transportation
Leader in Discrete Position Sensing Solutions in Transportation • Estimated 60% light vehicles electrified by 2030 – Growth in accelerator pedals, next generation electro- Market Trends mechanical braking and sensor applications and Customer • Occupant safety driven by consumer preference and legisl
Slide 12: Domain Expertise Enables Next Generation Medical Applications
Domain Expertise Enables Next Generation Medical Applications • Aging population driving demand for diagnostic and therapeutic equipment Market Trends • Ultrasound growth driven by surgeries and adoption in developing countries and Customer • Non-invasive intravascular ultrasound imaging (IVUS) grow
Slide 13: Materials and Application Expertise for Industrial End-Market
Materials and Application Expertise for Industrial End-Market Market Trends • Industry 4.0 and industrial automation drives the need for increased, high precision sensing • Logistics and supply chain demand increase industrial printing and material handling requirements and Customer • Efficient and
Slide 14: Cutting-Edge Technology Supports Aerospace and Defense End-Market
Cutting-Edge Technology Supports Aerospace and Defense End-Market Market Trends • Military modernization (Anti-Submarine Warfare systems, Unmanned Vehicles, A.I.) • Communication and radar system upgrades and Customer • Next generation systems are focused on reduced power consumption, weight and siz
Slide 15: Strong Execution Capabilities Driving Sustainable, Profitable Growth
Strong Execution Capabilities Driving Sustainable, Profitable Growth Revenue Adj. Diluted EPS ($ Millions) $2.25 $550 2017-2021 $2.00 CAGR 4.9% $525 2017-2021 $513 CAGR 11.9% $1.93 $470 $469 $423 $424 $1.53 $1.45 $1.23 $1.12 2017 2018 2019 2020 2021 2022 Est 2017 2018 2019 2020 2021 2022 Est Covid I
Slide 16: Strategic Approach to M&A
Strategic Approach to M&A Attractive Financials Enhance Technology Portfolio ~ 5% of Sales Geographical Expansion Expand Product & Applications Growth From M&A Expand End Markets Strengthen Customer Relationships Disciplined approach to acquisitions ROI in excess of cost of capital Maintain balance
Slide 17: Financial and Capital Allocation Framework
Financial and Capital Allocation Framework Long-Term 1 2012 2021 Target Revenue $304M $513M +10% /yr Financial Framework Gross Margin 30.1% 36.0% 34-38% SG&A Expense 20.7% 16.0% 13-15% R&D Expense 6.9% 4.7% 5-7% CapEx 4.6% 3.0% ~4% Growth Operating Cash Flow Capex Acquisitions 12-15% of Sales ~4% of
Slide 18: Our Sustainability Journey
Our Sustainability Journey • Supporting sustainable products - Vehicle electrification • Promoting health and safety - High-definition ultrasound - Intravenous ultrasound - Industrial automation • Established cross-functional ESG • Launched CTS CARES expanding our Steering Committee legacy of commun
Slide 19: Positioned to Grow at 10% CAGR through Organic and Inorganic strategies
Positioned to Grow at 10% CAGR through Organic and Inorganic strategies Clear strategy of diversification and growth led by non-transportation end markets Strong balance sheet and cash flow to support M&A strategy Positioned to Diversify & Grow Deep engineering capabilities and custom engineer
Slide 20: Appendix
Appendix
Slide 21: Focus 2025
Focus 2025 Profitable Growth Deeper Customer Relationships Improve revenue growth through strategic plan execution, M&A and active portfolio management 01 Develop customer partnerships that are authentic and collaborative, resulting in mutually beneficial revenue growth 04 02 Improved Operating Syst
Slide 22: CTS Core Values
CTS Core Values Play to Win Responsiveness Simplicity Solution Oriented 22
Slide 23: Financial Summary
Financial Summary ($ Millions, except percentages and Adjusted Diluted EPS) 2021 2020 2019 2018 2017 Net Sales $512.9 $424.1 $469.0 $470.5 $423.0 Gross Margin $184.6 $139.1 $157.6 $165.0 $145.2 Gross Margin % of Sales 36.0% 32.8% 33.6% 35.1% 34.3% Depreciation and Amortization $26.9 $26.7 $24.6 $22.
Slide 24: Regulation G Schedules
Regulation G Schedules Adjusted Net Earnings ($ Millions, except percentages) 24
Slide 25: Regulation G Schedules
Regulation G Schedules Adjusted Diluted EPS Total Debt to Capitalization ($ Millions, except percentages) 25
Slide 26: Regulation G Schedules
Regulation G Schedules Adjusted EBITDA ($ Millions, except percentages) Note: 2012 financials are for continuing operations only 26
Slide 27: Regulation G Schedules
Regulation G Schedules Free Cash Flow ($ Millions) 27