Cts Corporation · NYSE:CTS
Cts — Investor Presentation (February 2016)
20 slides from Cts's investor presentation, Feb 12, 2016
Slide 1: Investor Presentation February 2016
Investor Presentation February 2016
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation 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, stat
Slide 3: Our Company
Our Company 3 Ticker: CTS (NYSE) Founded: 1896 Business: CTS is a leading designer and manufacturer of sensors, actuators and electronic components. Locations: 11 manufacturing locations throughout North America, Asia and Europe. Number of Employees: ~3,000 Globally 2015 Sales: $382 Million Sales by
Slide 4: Our History - Years of Innovation
4 Our History - 120 Years of Innovation
Slide 5: Our New Identity
Our New Identity 5 CTS has been part of the future for 120 years. As technology has continued to move forward, we’ve been right alongside, engineering intelligent ways to meet people’s ever changing needs. Today is no different and we continue to reinvent ourselves by establishing a new identity. Ne
Slide 6: Our Customers
Our Customers 6 Ind. / Defense New European OEM Transportation Medical Communications Industrial / IT Distribution Transportation Industrial / IT Other
Slide 7: Our Products
Our Products 7 Accelerator Pedals Switches & Controls Timing Components RF Filters EMI/RFI Filters Smart Actuators Micro Actuators Torque Motor Actuator Sensors
Slide 8: Targeted End Markets and Growth Drivers
LV I M CV C/IT AD [CATE GORY NAME ] I C AD M IT/O LV I M CV C/IT AD 30-50% 20-30% 10-20% 10-20% 10-20% 5-15% Targeted End Markets Light Vehicles Industrial Medical Commercial Vehicles Comm./IT Aviation/Defense EMS Divestiture Front End Refocus New Customers Regional Expansion Organic Projects M&A Le
Slide 9: New Products, New Applications, New Customers
New Products, New Applications, New Customers Develop next generation sensor products Expanded pedal applications Expanded switch and control product line Expanded piezo-ceramic applications and new technologies: Naval sonar buoys Naval hydrophones Miniature medical ultrasound Organic Growth -
Slide 10: Inorganic Growth - Targeted Acquisitions
Inorganic Growth - Targeted Acquisitions 10 Disciplined approach to acquisitions: Returns in excess of cost of capital Accretive to earnings Maintain balance sheet strength Synergy opportunities Strengthen Customer Relationships Expand Product Range Broaden Geographic Reach Enhance Technolog
Slide 11: Filter Sensing Technologies (FST) Acquisition
FST Overview Start-up founded by two MIT Ph. D. graduates located in the Boston area Innovative sensing technology that uses a low power RF signal to measure soot and ash loading on Diesel Particulate Filters (DPF) or Gasoline Particulate Filters (GPF) Suitable for aftertreatment systems in Pa
Slide 12: Annual Financial Performance Trend
$305 $409 $404 $382 2012 2013 2014 2015 2016E Sales $0.64 $0.82 $0.97 $0.93 2012 2013 2014 2015 2016E Adjusted Earnings Per Share $400 $390 $1.05 $0.95 +2% to 13% 12 Note 1: Sales are from continuing operations. Adjusted EPS is as reported. +2% to 5% Note 2: 2016E represents guidance provided on Feb
Slide 13: New Business Awards
New Business Awards 13 $299 2Q-4Q $484 $560 2012 2013 2014 2015 Not Reported 1Q Not Reported ($ Millions) 16% Growth
Slide 14: Improved Cost Structure
Improved Cost Structure Manufacturing locations Reduced from 15 to 11 Utilization of best cost manufacturing locations up from ~50% in 2013 to >80% by 2017 – ~70% at the end of 2015 Shift SG&A spend – Increase Sales & Marketing, Optimize G&A Improve presence in Europe and Asia Increase c
Slide 15: Strong Balance Sheet and Conservative Capital Structure
Equity 76% [CATEGOR Y NAME] $124 $135 $157 $75 $75 $91 2013 2014 2015 Strong Balance Sheet and Conservative Capital Structure Capital Structure 15 Total Debt to Capitalization Net Debt $(49) $(60) Current Capital Structure ($200M Facility) Debt Cash $(66) ($ Millions except percentages)
Slide 16: Target Capital Deployment - Disciplined Approach
Capital Structure Leverage = 1.0x - 2.5x EBITDA Operating Cash Flow Return Capital to Shareholders ~4% of Sales 20-40% of Free Cash Flow 12-14% of Sales 60-80% of Free Cash Flow Target Capital Deployment – Disciplined Approach 16 Growth Acquisitions Investment Dividends & Buybacks
Slide 17: Appendix
Appendix
Slide 18: Financial Summary
Financial Summary Note 1: Adjusted data excludes restructuring and related charges, certain asset impairments, income tax and other adjustments. Note 2: All figures are from continuing operations except for Adjusted EPS (As Reported), Free Cash Flow, Total Debt / Capitalization and Controllable Work
Slide 19: CTS Competitors
19 Switches & Controls Resistor Networks EMI/RFI Filters RF Filters Piezoelectric Frequency Mechatronics Sensors Accelerator Pedals Bosch, Denso, Hella, KSR Alps, Bourns, Bosch, Continental, Delphi, Sensata, Stoneridge, TT (AB), Tyco Electronics (TE) Borg Warner, Continental, Delphi, Denso, Johnson
Slide 20: CTS Core Values
CTS Core Values SC Play to Win Responsiveness Simplicity Solution Oriented