Resideo Technologies, Inc. · NYSE:REZI
Resideo Technologies — 14th Annual Midwest IDEAS Investor Conference 2023
36 slides from Resideo Technologies's conference presentation, Aug 24, 2023
Slide 1: Jason Willey, VP Investor Relations
Jason Willey VP, Investor Relations August 24, 2023
Slide 2: Disclaimer
Disclaimer Forward-Looking Statements This presentation “forward-looking statements.” All statements, other than statements of fact, that address activities, events or developments that we or our management intend, expect, project, believe or anticipate will or may occur in the future are forward-lo
Slide 3: Resideo (NYSE: REZI) Snapshot
Resideo (NYSE: REZI) Snapshot $6.4B $611M $1.90 2022 Revenue 2022 Operating Income 2022 GAAP EPS A Leading Provider of A Leading Resideo is a leading global manufacturer and Products and Services Security Distribution distributor of technology-driven products and for the Home Business solutions that
Slide 4: Resideo Investment Opportunity
Resideo Investment Opportunity Di f f e rentiat ed Cha nne l G r ow th S t r uc tura l M ar gin a nd P r oduc t Br e a dt h I ni t iatives E x pa nsion 4 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 5: Products & Solutions Segment
Products & Solutions Segment 5 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 6: Broad Product Set Touching Large Markets Across the Home
Broad Product Set Touching Large Markets Across the Home $2.8B $527M 2022 Segment 2022 Segment Revenue Operating Income SOLUTIONS & SERVICES • Energy management / demand response | Equipment predictive maintenance | Indoor Air Quality data insights | Remote monitoring and automation AIR SECURITY & S
Slide 7: Channel Strategy Focused on Pro Installer
Channel Strategy Focused on Pro Installer Multiple Channels to the Pro Resideo Pro Network Products sold through Distributors Central to all our channels and Security Dealers • Critical to repair and remodel Partnerships with OEMs and new home construction • Customers of our distribution partners Ut
Slide 8: Exposure to Attractive Secular Growth Trends
Exposure to Attractive Secular Growth Trends CONNECTED HOME ENERGY RESIDENTIAL ENERGY HOME MANAGEMENT LIFE SAFETY DELIVERY TRANSITIONS • Smart thermostats • Energy efficient products • Hardware and software • Hydrogen – H2 ready • Water leak detection • Demand response for monitored security product
Slide 9: Envisioning The Future Home
Envisioning The Future Home Proactive Reducing pain points to help provide Homes safer, happier and more comfortable homes. Seamless • More connected / intelligent User Experience • More comfortable home • Reduced energy consumption Systems working together as an ecosystem • Better safety • Predicti
Slide 10: Resideo – The Connected Home
Resideo – The Connected Home 470 Billion secure data transactions per year on our Services for Homeowners AIR and Providers 10 million+ connected Air and Water devices installed SECURITY WATER ENERGY 1 million+ households SERVICES with Resideo Smart Security/Home Control 16,000+ developers 3rd party
Slide 11: Structural Margin Opportunity
Structural Margin Opportunity MANUFACTURING RECAPTURE INPUT COST PORTFOLIO NEW PRODUCTS OPTIMIZATION INFLATION OPTIMIZATION • Factory automation • Price realization • Divest non-strategic • Innovation focus • Outsourcing non-value • Freight assets • Connectivity add activities • Electronic component
Slide 12: ADI Global Distribution Segment
ADI Global Distribution Segment 12 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 13: A Leading Security Distribution Platform
A Leading Security Distribution Platform Intrusion Data 7% Communications CAGR $3.6B $3.4B $3.0B $2.7B $2.8B Fire Residential $2.4B $2.5B & Pro AV Access Control Networking 2016 2017 2018 2019 2020 2021 2022 Video Wire & Cable ADI Revenue Surveillance 19.4% $313M Power 2022 Segment 2022 Segment Gros
Slide 14: Differentiated Value Proposition
Differentiated Value Proposition Omnichannel Geographic Footprint Products & Technology Expert Sales Support Growth Culture Digitally Enabled Physical locations, Local product Wide selection Technology and Twelve consecutive Convenient digital e-commerce and availability in of over systems design ye
Slide 15: Business Model Built for the Pro
Business Model Built for the Pro Leading Pros Rely on ADI ADI’s wide selection and availability of products, configured solutions, and industry expertise enables dealers and integrators to operate more efficiently and offer reliable services. It is why ADI is a leading security and low-voltage distr
Slide 16: Adjacent Category Expansion
Adjacent Category Expansion Pro AV Residential AV Data Communications Audio and visual products Home automation, control, Cabling, associated professionally installed in audio visual, networking and accessories and networking commercial applications smart devices professionally hardware professional
Slide 17: Driving Margin Expansion
Driving Margin Expansion Enhance customer experience Expand product technology offerings E-COMMERCE EXCLUSIVE SALES FORCE ACCELERATION BRANDS EFFECTIVENESS • Website and App • Expanded product • CRM and Data Analytics Broaden • Omnichannel Integration offering • AI/Machine Learning Market coverage •
Slide 18: Financial Summary
Financial Summary 18 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 19: Resideo Key Financial Trends
Resideo Key Financial Trends +9% $M Revenue +9% Operating Profit Y/Y 2022 HIGHLIGHTS Y/Y $M $7,000 $6,000 $700 • Record revenue of $6.4B, up 9% $600 $5,000 $500 y/y, and operating income of $4,000 $400 $611M driven by acquisitions and $3,000 $300 growth at ADI $2,000 $200 $1,000 $0 $100 $0 • Progres
Slide 20: Resideo Q2 2023 Highlights
Resideo Q2 2023 Highlights • Revenue of $1.6B, down 5% y/y from record Q2 2022, reflecting reduced product volumes • Operating income of $153M, driven by lower revenue within Products & Solutions • Strong operating cash flow of $121 million, up $86 million y/y • Approval of $150M share repurchase au
Slide 21: Balance Sheet and Cash Flow Summary
Balance Sheet and Cash Flow Summary (Unaudited) ($ in millions) Q2 2023 Q4 2022 Q2 2022 Cash and cash equivalents 381 326 251 Total debt 1,412 1,416 1,422 Accounts receivable, net 1,043 1,002 1,073 Inventories, net 1,001 975 971 Accounts payable 948 894 987 Cash provided (used) by operating activiti
Slide 22: Capital Allocation and Investment Priorities
Capital Allocation and Investment Priorities Inorganic Organic • 2023 capital expenditures of ~$100M ADI Global Products & Distribution Solutions • Investment in factory automation • Adjacent categories • Software, AI and data • Targeted engineering and R&D investment to analytics capabilities drive
Slide 23: Value Creating M&A – First Alert
Value Creating M&A – First Alert ▪ Completed acquisition of First Alert on March 31, 2022 for $613M; ~6.4x 2021 adjusted EBITDA multiple (including synergies and tax benefits) ▪ A leader in home safety market with comprehensive portfolio of detection and suppression devices marketed through First Al
Slide 24: Value Creating M&A – ADI Adjacent Category Expansion
Value Creating M&A – ADI Adjacent Category Expansion 2021 Resideo acquires Norfolk Wire and Shoreview to be part of ADI, expanding distribution of Data ~$60M of capital Comm and Pro AV products deployed since 2021 2022 Resideo acquires Arrow Wire and Electronic Custom Distributors to be part of ADI,
Slide 25: Resideo Investment Opportunity
Resideo Investment Opportunity Di f f e rentiat ed Cha nne l G r ow th S t r uc tura l M ar gin a nd P r oduc t Br e a dt h I ni t iatives E x pa nsion 25 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 26: Our Values
Our Values Start with Act as Pioneer Make a the customer one team the future difference We understand our We work together We embrace We care about the customers’ needs toward common change, boldly step long-lasting and pride ourselves goals, engaging from into the unknown, positive impact we on del
Slide 27: Appendix
APPENDIX 27 27 Resideo Resideo Confidential Confidential -- © © 2023 2023 Resideo Resideo Technologies, Technologies, Inc Inc
Slide 28: Summary Financial Results
Summary Financial Results (Unaudited) (1) 28 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 29: Consolidated Interim Statements of Operations
Consolidated Interim Statements of Operations (Unaudited) Three Months Ended Six Months Ended (in millions, except per share data) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Net revenue $ 1,602 $ 1,686 $ 3,151 $ 3,192 Cost of goods sold 1,166 1,219 2,295 2,287 Gross profit 436 467 856 905 R
Slide 30: Consolidated Balance Sheets
Consolidated Balance Sheets (Unaudited) 30 Resideo Confidential - © 2023 Resideo Technologies, Inc
Slide 31: Consolidated Statements of Cash Flows
Consolidated Statements of Cash Flows (Unaudited) Three Months Ended Six Months Ended July 1, July 2, July 1, July 2, (in millions) 2023 2022 2023 2022 Cash Flows From Operating Activities: Net income $ 50 $ 94 $ 107 $ 181 Adjustments to reconcile net income to net cash in operating activities: Depr
Slide 32: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations (Unaudited) Adjusted Net Income Per Diluted Common Share and Net Income Comparison Three Months Ended Six Months Ended (in millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 GAAP Net income applicable to common shares $ 50 $ 94 $ 107 $ 181 R
Slide 33: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations (Unaudited) Adjusted EBITDA Three Months Ended Six Months Ended (in millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Net revenue $ 1,602 $ 1,686 $ 3,151 $ 3,192 GAAP Net income applicable to common shares $ 50 $ 94 $ 107 $ 181 Provision fo
Slide 34: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations (Unaudited) Products and Solutions Segment Three Months Ended Six Months Ended (in millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022 Net revenue $ 677 $ 764 $ 1,335 $ 1,383 GAAP Income from operations $ 128 $ 154 $ 245 $ 307 Stock-based com
Slide 35: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations (Unaudited) Adjusted Net Income Per Diluted Common Share Q3 2023 Fiscal Year 2023 Low High Low High GAAP Net income per diluted common share $ 0.14 $ 0.24 $ 1.15 $ 1.35 Restructuring and impairment expenses 0.17 0.17 0.19 0.19 Pension settlement loss —
Slide 36: Non-GAAP Financial Measures and Reconciliations
Non-GAAP Financial Measures and Reconciliations (Unaudited) Adjusted EBITDA Q3 2023 Fiscal Year 2023 (in millions) Low High Low High Net revenue $ 1,515 $ 1,565 $ 6,190 $ 6,290 GAAP Net income applicable to common shares $ 21 $ 36 $ 172 $ 201 Provision for income taxes 22 27 117 128 GAAP Income befo
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