Slide 1: Methode Electronics, Inc. Investor Relations Presentation
Methode Electronics, Inc. Investor Relations Presentation August 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains certain forward-looking statements, which reflect management's expectations regarding future events and operating performance and speak only as of the date hereof. These forward- looking statements are subject to the safe harbor protection provid
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures To supplement the company's financial statements presented in accordance with generally accepted accounting principles in the United States (“GAAP”), Methode uses certain non-GAAP financial measures, such as EBITDA, Free Cash Flow, Return on Invested Capital, and Net Debt
Slide 4: Methode at a Glance
Methode at a Glance Fiscal 2021 Sales A leading global supplier of custom-engineered solutions for Geography Solutions user interface, LED lighting system, power distribution and Digital 1% Sensors 5% Medical <1% sensor applications in the transportation, industrial equipment, Asia Power cloud compu
Slide 5: Historical Growth
Historical Growth $ in millions EBITDA* Sales Diluted EPS $ per share $1,200 $4.00 $1,088 $1,024 $1,000 $3.26 $3.50 FY18 - FY21 CAGR $1,000 $3.19 $908 $3.00 $800 Sales $2.43 $2.50 6.2% $600 $2.00 EBITDA* $1.52 $1.50 7.7% $400 $1.00 $207 $192 $200 $153 $155 $0.50 $0 $0.00 FY18 FY19 FY20 FY21 * See Ap
Slide 6: Environmental, Social, Governance (ESG) Overview
Environmental, Social, Goverence (ESG) Overview Robust Governance Commitment to Emphasis on Framework Safe Operations Clean Tech Supporting ethical, Demonstrated history New business focused on inclusive and beneficial of operational safety Electric Vehicles and LED actions for stakeholders and qual
Slide 7: Global Manufacturing Footprint
Global Manufacturing Footprint 7 Cost-Efficient Footprint with Proximity to Strategic Markets
Slide 8: Solutions & Technologies – Products
Solutions & Technologies – Products % of Sales • Center Consoles • Overhead Consoles User Interface 62% • Ergo-Switches • Integrated Modules • Remote Controls • Touchscreens • Ambient Lighting • Signal Lights Lighting 22% • Head & Fog Lights • Rear Stop Lights • Warning Lights • Work Lamps • Battery
Slide 9: Solutions & Technologies – End Markets & Customers
Solutions & Technologies – End Markets & Customers % of Sales • Appliance • Construction Equipment User Interface 62% • Automotive • Commercial Vehicle • Crane • Drone • Automotive • Construction Equipment Lighting 22% • Bus • Commercial Vehicle • Power Sports • Rail • Aerospace • Energy Storage Pow
Slide 10: Investment Thesis
Investment Thesis Exposure to Key Product Portfolio Operational & Strong Balance Market Trends Management Quality Excellence Sheet Focus ➢ Electrification & Sustainability ➢ Focused on Systems Integration ➢ Lean & Vertical Integration ➢ Balanced Capital Allocation ▪ EV, Commercial Vehicles vs. Compo
Slide 11: Strategic Priorities
Strategic Priorities Customer & Program Diversification ➢ Capitalize on Exposure to EV, Commercial Vehicle, and Cloud Computing ➢ Leverage Power, LED Lighting, and Sensor Technologies across Customer Base Organic & Inorganic Growth ➢ Leverage Technology to Increase Content per Vehicle and Penetrate
Slide 12: EV Driving Increased Content Per Vehicle
EV Driving Increased Content Per Vehicle Methode’s Internal Combustion Engine Methode’s Hybrid and Battery Electric (ICE) Vehicle Content Vehicle Content • User Interface • User Interface • Lighting • Lighting • Sensors • Sensors • Power Distribution Transition to EV is a Content Tailwind 12 EV Expe
Slide 13: EV Solutions for the “Top Hat”
EV Solutions for the “Top Hat” LED Lighting (Interior & Exterior) Sensors & Cameras Switches & Touchscreens Charging Port Sub-System By-Wire Controls Shift-by-Wire Steer-by-Wire 13 Leveraging User Interface, Lighting & Sensor Toolbox
Slide 14: EV Solutions for the “Skateboard”
EV Solutions for the “Skateboard” Inverter & Molded Busbar Battery Charger Sub-Assemblies Monitoring Current Sensors Electric Sensors Motors Position & Torque Sensors Busbars & Power Connectors Battery Battery Disconnect & Module Power Distribution Connections Busbars & Connectors BDU PDU 14 Leverag
Slide 15: EV, Commercial Vehicle, and Cloud Computing Driving Customer Diversification
EV, Commercial Vehicle, and Cloud Computing Driving Customer Diversification Sales by Customer $1,088 $1,000 $1,000 Key Customers: $ in millions $817 $800 52% 64% 41% $600 $400 50% 36% 27% $200 9% 12% 9% $0 FY17 FY19 FY21 Ford GM Other Customers 15 FY21 Other Customer Sales 64% of Total, Up from 41%
Slide 16: Strong Free Cash Flow and Returns
Strong Free Cash Flow and Returns Free Cash Flow* Return on Invested Capital* $ in millions $160 $155 16% 14.8% 14.5% 13.8% $120 12% $96 FY21 WACC** $80 8% $52 $40 4% $0 0% FY19 FY20 FY21 FY19 FY20 FY21 * See Appendix for reconciliation to GAAP ** Fiscal Year 2021 Weighted Average Cost of Capital of
Slide 17: Capital Allocation History and Strategy
Capital Allocation History and Strategy ($ in millions) Share Buyback & Dividend $95 7%: Returning Capital to Balanced Capital Shareholders Allocation Strategy Debt Reduction $446 30%: Deleveraging ➢ Pay Down Debt when Appropriate Balance Sheet ➢ Return Capital to Shareholders via R&D $179 Share Pur
Slide 18: Deleveraging Balance Sheet
Deleveraging Balance Sheet ($ in millions) Net Debt* $247 $229 $209 $209 $180 $177 $135 $139 $105 $26 $7 FY19 Q2 FY19 Q3 FY19 Q4 FY20 Q1 FY20 Q2 FY20 Q3 FY20 Q4 FY21 Q1 FY21 Q2 FY21 Q3 FY21 Q4 ➢ Consistently Deleveraging Since Grakon Acquisition in FY19 Q2 ➢ Net Debt / TTM EBITDA* of 0.04 at End of
Slide 19: Inorganic Growth Framework
Inorganic Growth Framework ▪ Engineered Products and/or Subsystems for OEMs Target ▪ Technology Solutions Partner to OEMs ▪ Primary: Industrial Market ▪ Secondary: Transportation ▪ Aligns with Our Strategic Priorities ▪ Can Leverage Methode’s: Fit ‒ Technologies ‒ Path to Market ‒ Manufacturing & Op
Slide 20: Investment Thesis
Investment Thesis Exposure to Key Product Portfolio Operational & Strong Balance Market Trends Management Quality Excellence Sheet Focus ➢ Electrification & Sustainability ➢ Focused on Systems Integration ➢ Lean & Vertical Integration ➢ Balanced Capital Allocation ▪ EV, Commercial Vehicles vs. Compo
Slide 21: Thank You
QAETHODE ELECTRONICS Thank You
Slide 22: Appendix
AETHODE Ap pe n d ix ELECTRONICS ‘METHODE ELECTRONICS, INC. AND SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (Unaudited) (in millions) Fyis. Fyl9 FY20 Fy21 ‘EBITDA: ‘Net income S25 96S 1345 123 Income tax expense 66.6 120 253 126 Interest (income) expense, net og 83 10.1 52 Amortization of intan
Slide 23: Appendix
Depreciation 32.2 EBITDA $ 191.6 Short-term debt 14.9 Long-term debt 225.2 Appendix Gross debt $ 240.1 Total Gross Debt/EBITDA 1.25 TOTAL NET DEBT/EBITDA (in millions) May 1, 2021 Net Income $ 122.3 Income tax expense 12.6 Interest expense, net 5.2 Amortization of intangibles 19.3 Depreciation 32.2
Slide 24: Appendix
AETHODE ELECTRONICS Appendix METHODE ELECTRONICS, INC. AND SUBSIDIARIES. RECONCILIATION OF NON-GAAP MEASURES (Unaudited) (in millions) Fy19 Fy20 Fy21 Free Cash Flow: ‘Net cash provided by operating activities $ 1020 $ 1406 $ 1798 Purchases of property, plant and (498) (45.1) 49) Free Cash Flow S522