Kimball Electronics, Inc. · NASDAQ:KE
Kimball Electronics — Shareholder Meeting (November 2021)
46 slides from Kimball Electronics's shareholder meeting presentation, Nov 9, 2021
Slide 1: Share Owners Meeting
Share Owners Meeting November 9, 2021 KIMBALL ELECTRONICS 1
Slide 2: Safe Harbor Statement
Kimball Electronics (Nasdaq: KE) Safe Harbor Statement Certain statements contained within this presentation may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “expect,” “should,” “goal,” “predict
Slide 3: Don Charron, Chairman and CEO
Don Charron, Chairman and CEO KIMBALL ELECTRONICS 3
Slide 4: Corporate Prayer
Corporate Prayer KIMBALL ELECTRONICS 4
Slide 5: John Kahle, Vice President, General Counsel, Chief Compliance Officer, and Secretary
John Kahle, Vice President, General Counsel, Chief Compliance Officer, and Secretary KIMBALL ELECTRONICS 5
Slide 6: Doug Hass, Associate General Counsel, Assistant Secretary
Doug Hass, Associate General Counsel, Assistant Secretary KIMBALL ELECTRONICS 6
Slide 7: Proposals for Consideration
Kimball Electronics (Nasdaq: KE) Proposals for Consideration • Election of Directors – Donald D. Charron – Colleen C. Repplier – Gregory J. Lampert • Ratification of Appointment of Auditors • Advisory Vote for Approval of Compensation of Named Executive Officers Donald D. Charron Colleen C. Repplier
Slide 8: Adjourn
Adjourn
Slide 9: Reports of Officers
Reports of Officers • Chief Financial Officer Report • CEO Report
Slide 10: Jana T. Croom, Vice President, Chief Financial Officer
Jana T. Croom, Vice President, Chief Financial Officer KIMBALL ELECTRONICS 10
Slide 11: Andy Regrut, Head of Investor Relations
Andy Regrut, Head of Investor Relations KIMBALL ELECTRONICS 11
Slide 12: Revenue Performance
Kimball Electronics (Nasdaq: KE) Revenue Performance Revenue Performance Revenue by Vertical Market 1% 1% 1% 100% 1% 3% 6% 6% 5% $1,500 90% 23% $1,292 20% 22% 23% $1,300 80% $1,182 $1,201 70% $1,072 $1,100 60% (IN MILLIONS) 29% 30% 31% 33% $900 50% 40% $700 30% 44% 43% 20% 40% 38% $500 10% $300 0% F
Slide 13: Diversified Portfolio and End Market Services
Kimball Electronics (Nasdaq: KE) Diversified Portfolio and End Market Services 1% OTHER AUTOMOTIVE MEDICAL INDUSTRIAL PUBLIC SAFETY 21% in Net Sales 3% in Net Sales 8% in Net Sales 14% in Net Sales $1.3B FY2021 NET SALES Up 8% from FY 2020 KIMBALL ELECTRONICS 13
Slide 14: Profitability Trends
Kimball Electronics (Nasdaq: KE) Profitability Trends Adjusted Operating Income/Margin* Adjusted EBITDA/Margin** $80 6.0% $130 9.0% 8.2% 5.2% $70 8.0% 5.0% $110 6.7% 7.0% $60 6.0% 4.0% 6.0% 3.6% 4.0% $90 6.0% (IN MILLIONS) (IN MILLIONS) $50 3.4% 5.0% $40 3.0% $70 4.0% $30 2.0% $50 3.0% $20 1.0% 2.0%
Slide 15: Capital Expenditures & Depreciation and Amortization
Kimball Electronics (Nasdaq: KE) Capital Expenditures & Depreciation and Amortization Capital Expenditures and Depreciation & Amortization 45.00 40.00 35.00 D&A 30.00 (IN MILLIONS) 25.00 Total Capex 20.00 15.00 10.00 5.00 - FY18 FY19 FY20 FY21 Significant capex spending to fuel multi-year organic gr
Slide 16: Capital Allocation
Kimball Electronics (Nasdaq: KE) (Unaudited) Capital Allocation Reinvest in the business – Significant capex Capital Allocation spending of approximately $30 million/year to $100 fuel multi-year organic growth and expansion $90 in ROIC $80 $70 Acquisitions – $50+ million of acquisitions (IN MILLIONS
Slide 17: Consistent Growth in Book Value and Solid EPS Performance
Kimball Electronics (Nasdaq: KE) Consistent Growth in Book Value and Solid EPS Performance $18 $2.40 $16.33 $2.20 $16 $2.23 $2.00 $14 $13.69 $1.80 $12.77 $12.64 $1.60 $12 $1.40 $10 $1.20 $1.28 $1.19 $1.10 $1.00 $8 $0.80 $6 $0.60 FY18 FY19 FY20 FY21 Tangible BV/ Share Adjusted Diluted EPS * * EPS pre
Slide 18: Share Owner Value
Kimball Electronics (Nasdaq: KE) Share Owner Value * * These measures are Non-GAAP terms. A reconciliation is provided in the appendix of this presentation. KIMBALL ELECTRONICS 18
Slide 19: Q1FY22: Net Sales Declined 12% Compared to Q1 2021
Kimball Electronics (Nasdaq: KE) Q1FY22: Net Sales Declined 12% Compared to Q1 2021 Industrial 22% Public Safety 4% • Climate Controls • Thermal Imaging Net Sales • Automation Controls • First Responder Electronics • Optical Inspection • Security $350 $332 • Smart Metering $293 $300 $250 $200 Other
Slide 20: Q1FY22: Net Sales by Vertical Market
Kimball Electronics (Nasdaq: KE) Q1FY22: Net Sales by Vertical Market KIMBALL ELECTRONICS 20
Slide 21: Adjusted Operating Income
Kimball Electronics (Nasdaq: KE) Adjusted Operating Income (1) (1) Adjusted Operating Income is a Non-GAAP measure – refer to Reconciliation of Non-GAAP Results on the final slide of this supplementary information. KIMBALL ELECTRONICS 21
Slide 22: Guidance for Fiscal Year 2022
Kimball Electronics (Nasdaq: KE) Guidance for Fiscal Year 2022 • Net sales in the range of $1.4 - $1.5 billion, an 8% - 16% increase compared to fiscal 2021 • Operating income expected to be 4.5% - 5.0% of net sales • CapEx of $60 - $70 million KIMBALL ELECTRONICS 22
Slide 23: Don Charron, Chairman and CEO
Don Charron, Chairman and CEO KIMBALL ELECTRONICS 23
Slide 24: Covid-19
Kimball Electronics (Nasdaq: KE) Covid-19 Various COVID-19 protocols continue to be used in our facilities, in accordance with country-specific, state and local health recommendations. MEASURES WE CONTINUE TO TAKE MANDATORY FACE PROPER HYGIENE BODY SOCIAL VIRTUAL VISITS WORK-FROM-HOME ENCOURAGING MA
Slide 25: Celebrating You. 60 Years Strong.
Kimball Electronics (Nasdaq: KE) Celebrating You. 60 Years Strong. The successes of Kimball Electronics are derived from a culture that fuses the foundational principles that drove our first 60 years with an entrepreneurial mindset that will carry us beyond the next 60. While we take time to reflect
Slide 26: Celebrating You. Our Customers.
1961 2021 Celebrating You. Our Customers. From cultivating customer relationships to developing unique end-to-end partnership solutions, we celebrate the quality for life we help our customers create for end users. KIMBALL ELECTRONICS 26
Slide 27: Innovative Solutions
Foundational Principle: Innovative Solutions From the foundation of our company, customers have turned to us for innovative solutions. As technology has evolved and as our customers have innovated, Kimball Electronics has adapted to offer more innovative solutions in support of rapidly changing mark
Slide 28: Culture of Excellence
Foundational Principle Culture of Excellence Our culture of excellence is rooted in our guiding principle: Our customer is our business. We know we must provide innovative products and services that excite our customers and exceed their expectations of quality, features, and enduring value. Our Indu
Slide 29: How We Deliver
Celebrating You. Our Customers. How We Deliver Kimball Electronics has participated in the Circuits Assembly Service Excellence Awards for eight consecutive years, winning awards for excellence in multiple categories, including: • Quality • Dependability/Timely Delivery • Responsiveness • Value for
Slide 30: Celebrating You. Our Employees.
Celebrating You. Our Employees. We work at our collective best when we draw inspiration from both the institutional knowledge of our longest- tenured team members and the fresh-minded enthusiasm of our most recent hires. KIMBALL ELECTRONICS 30 KIMBALL ELECTRONICS 30
Slide 31: Resilience
Foundational Principle Resilience At Kimball Electronics, our people adapt and respond to change in a way that honors our past and prepares us for the future. Throughout our history, our people have applied their efforts and knowledge by working together to take advantage of opportunities and challe
Slide 32: The Next 60 Years of Talent Development
Celebrating You. Our Employees. The Next 60 Years of Talent Development Through rigor from our talent management and Diversity, Equity and Inclusion: empathy in our managers, we are skilling and As a global company, Kimball Electronics scaling the organization to strengthen execution recognizes the
Slide 33: Celebrating You. Our Communities.
2021 2014 Celebrating You. Our Communities. Our company and community pride intertwine. We share, but never impose, our values within our communities. Each Kimball Electronics facility strives to help make its community a great place to live through positive societal and environmental impact. KIMBAL
Slide 34: Social Responsibility
Foundational Principle Social Responsibility Volunteering our time and donating to worthy causes are ways we Create Quality for Life in the communities where we operate. Celebrating 1961 KEI recognized “1961” to celebrate our historical commitment to our communities. We gave each of our 13 geographi
Slide 35: Environmental Success
Celebrating You. Our Communities. Environmental Success Our impact on global climate is real. We strive to reduce our energy usage and greenhouse gas footprint, and that starts with our local environment, health and safety teams, and the subsequent sharing of best practices globally. KIMBALL ELECTRO
Slide 36: Celebrating You. Our Suppliers.
1974 2021 Celebrating You. Our Suppliers. As we approach nearly two years of continuous demand pressure, our team remains steadfast in their commitment to managing the supply chain for mutual collaboration and trust between our customers and suppliers. KIMBALL ELECTRONICS 36
Slide 37: Trust
Foundational Principle Trust We continue to see pressures across the supply chain through 2021 and beyond. Our global materials teams continue to work to foster relationship growth and partnerships with our suppliers to offset potential challenges. We know there aren’t always easy solutions, but tru
Slide 38: Celebrating You. Our Share Owners.
Celebrating You. Our Share Owners. Fiscal 2021 was a record year for our company with many financial metrics, including net sales, margin rates, earnings, cash flow from operating activities, and return on invested capital, reaching all-time highs. Our Share Owners benefited from this performance wi
Slide 39: Entrepreneurial Spirit
Foundational Principle Entrepreneurial Spirit Our Guiding Principles state: We seek to promote and reinforce an entrepreneurial spirit — a conviction that growth and continuous improvement is everyone’s job. This spirit is further reflected in the recognition that profits are the ultimate measure of
Slide 40: Questions?
Questions? KIMBALL ELECTRONICS 40
Slide 41: Thank You!
Thank You! KIMBALL ELECTRONICS 41
Slide 42: Appendix
Appendix KIMBALL ELECTRONICS 42
Slide 43: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation * Prior periods have been revised to reflect adjusted operating income excluding changes in the fair value of SERP. KIMBALL ELECTRONICS 43
Slide 44: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation KIMBALL ELECTRONICS 44
Slide 45: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation * Average Invested Capital is computed using Share Owners’ equity plus current and non-current debt less cash and cash equivalents averaged for the last five quarters. KIMBALL ELECTRONICS 45
Slide 46: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation KIMBALL ELECTRONICS 46
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