Motorola Solutions, Inc. · NYSE:MSI
Motorola Solutions — Investor Presentation (August 2023)
43 slides from Motorola Solutions's investor presentation, August 2023
Slide 1: Investor Overview August 2023
INVESTOR OVERVIEW August 2023 ● Investment Thesis ● Total Addressable Market ● Who We Serve ● Segments and Technologies ● Financials ● Capital Allocation 1
Slide 2: We are a global leader in public safety and enterprise security solutions
We are a global leader in public safety and enterprise security solutions 37% of 2022 revenue from Software & Services, a proxy for ARR Video Security and LMR Command Access Control Communications Center 18% CAGR Non-GAAP EPS Growth Since 2015 5M+ 13K 3.6K of 6K fixed video cameras LMR Networks 911 C
Slide 3: An integrated ecosystem for public safety and enterprise security with $60B TAM
AN INTEGRATED ECOSYSTEM FOR PUBLIC SAFETY AND ENTERPRISE SECURITY WITH $60B TAM* Individually, Motorola Solutions products and services make the world safer. United, they are exponentially more powerful. Video Security and Access Control LMR Communications Command Center Our video solutions combine
Slide 4: Uniquely positioned for long-term value creation
UNIQUELY POSITIONED FOR LONG-TERM VALUE CREATION Strong Competitive Advantage Well Positioned For Growth ● Purpose built solutions meet extreme ● Digitization of public safety workflows performance requirements driving demand for our integrated solutions ● Integrated mission-critical ecosystem across
Slide 5: Who we serve
WHO WE SERVE WE PROVIDE THE LIFELINE THAT PUBLIC SAFETY ENTERPRISE SECURITY KEEPS PEOPLE SAFE, CONNECTED AND EFFECTIVE MINING, OIL POLICE FIRE UTILITIES & GAS $9.1B 2022 ANNUAL REVENUE EMERGENCY NATIONAL TRANSPORTATION MEDICAL SECURITY MANUFACTURING & LOGISTICS BY 70% 30% REGION North America Intern
Slide 6: Segments & Technologies
SEGMENTS & PRODUCTS & SYSTEMS LMR Products and Integration $5.7B TECHNOLOGIES INTEGRATION Video Products 2022 Revenue SEGMENT SOFTWARE LMR Services & SERVICES Command Center $3.4B SEGMENT 2022 Revenue (primarily recurring) Video Software VIDEO SECURITY LMR COMMAND & ACCESS CONTROL COMMUNICATIONS CEN
Slide 7: Strong financial track record
STRONG Total Revenue Growth ($B) Software & Services Segment Revenue Growth ($B) FINANCIAL +8% TRACK RECORD 12% Y/Y +13% Y/Y Y/Y +9% 10% Y/Y +7% Y/Y +14% Y/Y Y/Y +15% (6%) +20% Y/Y Y/Y Y/Y +6% +14% Y/Y +41% Y/Y +6% Y/Y Y/Y SUMMARY Non-GAAP Operating Earnings ($B) Adj.Operating Operating Cash FlowCas
Slide 8: Ongoing portfolio transformation
ONGOING PORTFOLIO TRANSFORMATION 2015 2022 NEARLY HALF OF REVENUE NOW $5.7B of Revenue $9.1B of Revenue VIDEO, SOFTWARE AND RECURRING SERVICES Total Addressable Market Total Addressable Market ~$13B ~$60B Services, Command Center, LMR Products and Video Security & Access Systems Integration Control
Slide 9: Capital allocation framework drives shareholder value
CAPITAL ALLOCATION FRAMEWORK DRIVES SHAREHOLDER VALUE BASED ON OPERATING CASH FLOW CAPEX 15% Asset light model SHARE REPURCHASES OR ACQUISITIONS 55% ONGOING ~$7.3B* of share repurchases, retiring 23% of ANNUAL DIVIDEND share float at average cost of $90.46 30% since 2015** Double digit annual increas
Slide 10: Accretive acquisitions ~$6B invested since 2015
ACCRETIVE ~$6B INVESTED SINCE 2015 ACQUISITIONS ADJ. EBITDA REVENUE GROWTH RATE MARGIN ESTIMATED 2023 CONTRIBUTION Double ~$3B Digit ~30% Video Security Command LMR & Access Control Center Communications 2018 2015 2016 2016 2019 2019 2017 2017 2020 2020 2018 2020 2019 2021 2021 2021 2022 2022 2022 2
Slide 11: 2023 Guidance
2023 GUIDANCE Total Revenue Growth ($B) Software & Services Revenue Growth ($B) +8% 12% Y/Y Y/Y +13% Y/Y +9% +7% 10% Y/Y Y/Y +14% Y/Y +15% (6%) Y/Y Y/Y +20% Y/Y Y/Y +6% +14% +6% Y/Y +41% Y/Y Y/Y Y/Y E E Adj. Operating Cash Flow ($B) Non-GAAP EPS Aug 3, 2023 FY GUIDANCE 13% 14% (1%) Y/Y Y/Y Y/Y +13%
Slide 12: Video Security & Access Control
VIDEO SECURITY & ACCESS CONTROL Our video solutions combine computer vision with artificial intelligence to help users scale and control collected video and instantly recognize what’s important and what’s not. 12
Slide 13: Video Security & Access Control: Current Environment and Our Approach
VIDEO SECURITY & ACCESS CONTROL CURRENT OUR ENVIRONMENT APPROACH ● Fixed video market has ~500M installed fixed video security cameras globally ex-China (1) More than just cameras and footage, ● Less than 20% of events are detected our video solutions combine computer vision with AI, after the first 2
Slide 14: Video Security & Access Control products
VIDEO SECURITY & ACCESS CONTROL FIXED VIDEO ACCESS CONTROL IN-CAR BODY WORN LICENSE PLATE SECURITY MANAGEMENT VIDEO SYSTEMS CAMERAS ANALYTICS Embedded AI locates Video, biometrics, weapons In-car video combines with Radios automate camera 50B+ scans paired with persons or vehicles, anomaly detection
Slide 15: The evolution of our fixed video and access control portfolio
THE EVOLUTION OF OUR FIXED VIDEO AND ACCESS CONTROL PORTFOLIO ON-PREMISE CLOUD-BASED CRITERIA Scalability | Feature rich User experience | Simplicity | Small IT footprint Hardware FIXED + VIDEO Formerly Pelco, Videotec, Analytics Calipsa Hardware ACCESS Formerly Formerly Avigilon, Indigovision Ava,
Slide 16: The evolution of our mobile video portfolio
THE EVOLUTION OF OUR MOBILE VIDEO PORTFOLIO GOVERNMENT ENTERPRISE BODY WORN CAMERAS IN-CAR VIDEO LICENSE PLATE RECOGNITION SOLUTIONS 16
Slide 17: ~50% of video sales in gov't & public safety, education and healthcare
~50% OF VIDEO SALES IN GOV’T & PUBLIC SAFETY, EDUCATION AND HEALTHCARE $1.5 Billion 2022 Video Revenue Gov’t & Public Safety Additional Verticals Manufacturing Utilities Transportation Entertainment Hospitality Retail Education Healthcare 17
Slide 18: Growth & Monetization: Video Security & Access Control
GROWTH & MONETIZATION VIDEO SECURITY & ACCESS RAPIDLY GAINING SHARE IN OUR LARGEST CONTROL ADDRESSABLE MARKET 2023 - Approx. 15% Sales Growth ● $1.5B+ in sales growing double digits in $22B TAM ● 5M+ fixed video cameras deployed across 300K+ sites ● 90% of our fixed video camera portfolio has embedded
Slide 19: Land Mobile Radio Communications
LAND MOBILE RADIO COMMUNICATIONS With instant, unified voice and multimedia collaboration at every moment, our users stay safe and aware when it matters most - from everyday routines to a crisis unfolding 19
Slide 20: LMR Communications: Current Environment and Our Approach
LMR COMMUNICATIONS CURRENT OUR ENVIRONMENT APPROACH ● When disaster strikes, cellular networks fail or get overloaded - Hurricane Laura, Nashville Bombing ● Demand for data and multimedia apps to complement Secure and resilient communications unify voice mission critical voice and PTT and multimedia
Slide 21: LMR Communications products
LMR COMMUNICATIONS PUBLIC SAFETY ENTERPRISE SECURITY BROADBAND ENABLED LMR SOFTWARE PUBLIC SAFETY CLOUD COMMUNICATIONS COMMUNICATIONS SOLUTIONS & SERVICES CORE Highly survivable networks, Secure, encrypted networks Broadband solutions 4M users under Mgd Services, Streamlines radio management, total
Slide 22: Growth & Monetization: LMR Communications
GROWTH & MONETIZATION LMR COMMUNICATIONS A GLOBAL LEADER IN PUBLIC SAFETY AND ENTERPRISE SECURITY COMMUNICATIONS 2023 - “Mid-Single Digit” Sales Growth ● Platform business growing by mid-single digits ● 13k+ LMR networks globally, 50+ nationwide & statewide systems ● Networks monetized with recurrin
Slide 23: Command Center
COMMAND CENTER The industry’s first cloud enabled 911 call-to-case closure software suite unifies public safety data and enables seamless collaboration, helping create safer communities REAL-TIME RECORDS COMMUNITY EMERGENCY CALL VOICE & COMPUTER INTELLIGENCE FIELD RESPONSE & EVIDENCE ANALYSIS & JAIL &
Slide 24: Command Center: Current Environment and Our Approach
COMMAND CENTER CURRENT OUR ENVIRONMENT APPROACH ● ~10k more lives could be saved each year if 911 could get to callers one minute faster (1) ● Dispatcher performs 7 tasks at once, 6-8 screens, Integrated cloud software suite unifies entire multiple keyboards, multiple siloed applications (2) workflow,
Slide 25: Command Center capabilities
COMMAND CENTER 911 EMERGENCY CALL REAL-TIME REAL-TIME RECORDS & EVIDENCE UNIFIED MANAGEMENT INTELLIGENCE RESPONSE MANAGEMENT COMMUNICATIONS Smart Transcription AI Single, real-time view of video Machine-assisted decision Unified ‘Big Data’ accessed 1M+ users on MC-PTT over converts audio into feeds,
Slide 26: Growth & Monetization: Command Center
GROWTH & INTEGRATED END-TO-END PLATFORM OFFERED IN THE CLOUD MONETIZATION AND ON-PREM COMMAND CENTER ● Large software install base of 3,600 911 centers in the US creates significant 2023 - Approx. 20% Sales Growth expansion opportunity ● Almost half of our our Command Center customers have a cloud ba
Slide 27: Competitive Landscape
Video Security LMR Command Competitive & Access Control Communications Center Landscape Video Security Access Control *This competitive landscape slide includes a non-exhaustive list of some key competitors in each technology MSI operates. 27
Slide 28: Additional Financials
ADDITIONAL FINANCIALS 28
Slide 29: Backlog
BACKLOG ($B) $14.3 $13.6 $11.3 $11.4 $10.6 $9.6 $8.4 $6.5 BACKLOG GROWTH DRIVERS ● Software and Services multi-year agreements ● LMR products ● North America PRODUCTS & SI SOFTWARE & SERVICES 29
Slide 30: Strong balance sheet
STRONG BALANCE SHEET ● Investment grade ● Total Liquidity of ~$3.0B ○ Undrawn revolving credit facility $2.25B ○ Cash & equivalents $710M ● Net Debt to Adj. EBITDA ratio of ~1.8X ● Balanced debt maturity ● U.S. Pension is ~83% funded ○ Do not expect any funding requirements for the next several year
Slide 31: Balanced debt maturity
($M) BALANCED DEBT MATURITY ($M) INVESTMENT GRADE RATING ● Moody’s - Baa2, stable ● S&P - BBB-, stable ● Fitch - BBB-, positive …. CONVERTIBLE NOTES SENIOR NOTES & DEBENTURES *As of July 1, 2023, no material debt maturities through 2023 31
Slide 32: ESG
ESG 32
Slide 33: We are committed to corporate responsibility
WE ARE COMMITTED TO CORPORATE RESPONSIBILITY 2023 AMERICA’S GREATEST WORKPLACES FOR DIVERSITY, 2022 MOST RESPONSIBLE 250 BEST-MANAGED COMPANIES COMPANIES, MOST TRUSTED COMPANIES -- PHILANTHROPY -- ENVIRONMENT $100M+ donated by the Committed to our goal of reducing Motorola Solutions Foundation in ou
Slide 34: Our impact
OUR IMPACT Our technology ecosystem can directly support some of the world’s largest societal challenges every day. SAFER SCHOOLS COMMUNITY-POLICING SOARING CYBER ATTACKS More than 356,000 students have been RELATIONSHIPS Cyberattacks rose globally by 38% in 2022 exposed to gun violence in schools s
Slide 35: Appendix
APPENDIX 35
Slide 36: Safe Harbor
SAFE HARBOR A number of forward-looking statements will be made during this presentation. Forward-looking statements are any statements that are not historical facts. These forward-looking statements are based on the current expectations of Motorola Solutions, and we can give no assurance that any f
Slide 37: Use of non-GAAP measures
USE OF NON-GAAP MEASURES In addition to the results presented in accordance with accounting principles generally accepted in the U.S. (“GAAP”) in this presentation, Motorola Solutions, Inc. (“Motorola Solutions” or the “Company”) has provided certain non-GAAP measurements. Motorola Solutions has pro
Slide 38: Appendix: Supplemental Non-GAAP Measures
APPENDIX: SUPPLEMENTAL Update Needed NON-GAAP MEASURES 38
Slide 39: Reconciliation of GAAP net earnings to EBITDA and adjusted EBITDA
RECONCILIATION OF GAAP NET EARNINGS TO EBITDA AND ADJUSTED EBITDA APPENDIX: SUPPLEMENTAL NON-GAAP MEASURES *** Refer to slide 39 for details of highlighted items 39
Slide 40: Net debt and net debt to adjusted EBITDA calculation
RECONCILIATION OF GAAP NET EARNINGS TO EBITDA AND ADJUSTED EBITDA APPENDIX: SUPPLEMENTAL NON-GAAP MEASURES NET DEBT CALCULATION NET DEBT TO ADJUSTED EBITDA CALCULATION *** Refer to slide 39 for details of highlighted items 40
Slide 41: Reconciliation of GAAP operating cash flow to adjusted operating cash flow
RECONCILIATION OF GAAP OPERATING CASH FLOW TO ADJUSTED OPERATING CASH FLOW APPENDIX: SUPPLEMENTAL NON-GAAP MEASURES RECONCILIATION OF GAAP OPERATING CASH FLOW TO ADJUSTED FREE CASH FLOW 41
Slide 42: Appendix: Supplemental Non-GAAP Measures
APPENDIX: SUPPLEMENTAL NON-GAAP MEASURES 42
Slide 43: Our impact: references
OUR IMPACT References for slide 34 1. Safer Schools: a. Gun violence in schools, June 11, 2023: https://www.washingtonpost.com/education/interactive/school-shootings-database/ b. Federal funding 2023: https://cops.usdoj.gov/svpp (refer to Funding link) 2. Natural Disasters: a. Weather: https://www.n
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