Ttm Technologies, Inc. · NASDAQ:TTMI
Ttm Technologies — Investor Presentation (May 2020)
41 slides from Ttm Technologies's investor presentation, May 4, 2020
Slide 1: TTM Technologies, Inc. Investor Presentation May 2020
TTM Technologies, Inc. Investor Presentation May 2020 Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements This communication may contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements related to the future business outlook, events, and expected performance of TTM Technologies, Inc. (“TTM”, “we” or t
Slide 3: Leading PCB, Specialty Components and Technology Solutions Provider
Critical supplier to today’s fastest growing technologies such as advanced defense radar, automobile technology and medical device technology Significant global footprint with 26 facilities and 19,500 employees Scale: $2,133 mn FY 2019 revenue Profitability: $285.7 mn FY 2019 Adj. EBITDA1 Technology
Slide 4: Strategic Focus: Diversification, Differentiation, Discipline
Diversification Diverse end markets Near term -Aerospace & Defense Discipline Operational execution Earnings power Cash flow generation Strategic Focus Differentiation Scale Technology breadth Global footprint Early engagement
Slide 5: Diversification
TIM Technologies. Inspiring Innovation Diversification
Slide 6: End Market Growth Drivers and Outlook (Pro-forma Mobility)
End Market Growth Drivers and Outlook (Pro-forma Mobility) Source: TTM filings, Prismark Partners Nov 2019, Company estimates 33% Increased Radar Defense Systems Increased Military Equipment Builds 2-4% Above Aerospace Defense FY 2019 Net Sales End Market Growth Drivers 2018 – 2023 CAGR (3rd Party)
Slide 7: Key Defense Megatrends
Key Defense Megatrends Increasing Supplier Consolidation Increasing AESA Radar Use Increasing Defense Budgets Key Program ramps M&A and US footprint 18% CAGR AESA Growth 20% Increase FY17-FY19 80 key DoD Program ramps
Slide 8: Aerospace & Defense Business At A Glance
Aerospace & Defense Business At A Glance Focused on Operational Execution A&D revenue grew by 15% Program backlog $600M FY 2019 Initial Anaren synergies Purchased i3 assets Defense 82% Commercial Aerospace 18% Markets we serve *Pro-forma ViaSystems acquisition
Slide 9: Strong Defense Program Alignment
Strong Defense Program Alignment F-35 AMDR Q-53 G/ATOR F-16 (SABR) Space Fence LRDR/HDR JCREW LTAMDS Microwave Systems APKWS AMRAAM JDAM JAGM Hellfire Paveway Patriot Standard Missile Missile Systems JTRS Soldier Radio Rifleman Manpack Project X Multi Channel Hand Held (MCHH) Communication Systems O
Slide 10: End Market Growth Drivers and Outlook (Pro-forma Mobility)
End Market Growth Drivers and Outlook (Pro-forma Mobility) Source: TTM filings, Prismark Partners Nov 2019, Company estimates 33% Increased Use of AESA radar Increased Military Equipment Builds 2-4% Above Aerospace Defense 19% Electric & Autonomous Vehicle Safety/ADAS/Infotainment 5-8% Below Automot
Slide 11: Automotive Megatrends
Automotive Megatrends Vehicle Safety Advanced Driver Assistance Systems (radar, LiDar, cameras) CAGR 10% (Source: Markets and Markets) Automated Driving Sensors, Cameras, GPS, Radar, LiDar Artificial Intelligence CAGR 134% (Source: Business Insider, Lux Research) Connectivity/ Infotainment Wireless
Slide 12: Drives Increasing Electronic Content
Drives Increasing Electronic Content PCB Usage per Car Type Sq. Meter USD MM units Compact 0.4 – 0.5 30– 40 ~ 36.4 Mid-Range 0.5 – 0.8 50 – 70 ~ 56.4 Luxury 1.5 – 3.0 100 - 150 ~ 7.2 Source: NTI Digest, October 2019 -0.1% CAGR 8.0% CAGR 7.9% CAGR Average PCB content per vehicle $63 in 2016 to $85 in
Slide 13: End Market Growth Drivers and Outlook (Pro-forma Mobility)
End Market Growth Drivers and Outlook (Pro-forma Mobility) Source: TTM filings, Prismark Partners Nov 2019, Company estimates 33% Increased Commercial Air Traffic Increased Military Equipment Builds 2-4% Above Aerospace Defense 19% Electric & Autonomous Vehicle Safety/ADAS/Infotainment 5-8% Below Au
Slide 14: Differentiation
TIM Technologies ss Inspiring Innovation Differentiation
Slide 15: End Device Requirements Drive New PCB Technology
End Device Requirements Drive New PCB Technology Increasing complexity Miniaturization Increasing signal speed Increasing performance Increasing circuit density Higher layer count Microvias Material innovations mSAP/SLP HDI Rigid Flex RF Radar End Device Trends PCB Requirements TTM Technologies Lase
Slide 16: TTM Provides Differentiated, Complementary Capabilities
TTM Provides Differentiated, Complementary Capabilities High Performance Sub-Assemblies RF engineering strength complements TTM manufacturing strength PCB Substrate RF Engineering/Customer Engagement RF Components RF Design and Simulation
Slide 17: Successful Customer Engagement Model
Successful Customer Engagement Model… Engaging customers from concept to volume production Time Concept Production Consumer Aerospace & Defense Automotive Networking Pilot Production Prototype 6 Mo’s 1 yr 2 yrs 3 yrs 4 yrs 5 yrs 6 yrs 7–10 yrs RF Engineering Build to Specification
Slide 18: Global Footprint
Global Footprint 7 Salem – SAL Syracuse – SYR 6 26 Suzhou - SUZ Aerospace & Defense 5 Sterling - STE Stafford Springs - SS 4 3 Stafford - ST 1 Denver - DEN 2 North Jackson - NJ Specialty 8 Anaheim - ANA Santa Ana - SA 10 9 Forest Grove - FG 11 Santa Clara - SC San Diego - SD 12 Logan - LG 16 17 San
Slide 19: Discipline
TIM Technologies. Inspiring Innovation Discipline
Slide 20: Reported Annual Revenue and Profit Growth
Non-GAAP EPS1 Non-GAAP Operating Margin1 Revenues ($ millions) Reported Annual Revenue and Profit Growth Increased scale, diversification, and differentiation 1All TTM financials are reported non-GAAP. See Appendix for reconciliation
Slide 21: Leverage, Cash Flows and Adjusted EBITDA
Leverage (Debt/EBITDA1) Cash Flows from Ops ($mn) Adjusted EBITDA ($MN)1 Cash Flow Used to Pay Down Debt Gross debt Net debt 1All TTM financials are reported non-GAAP. See Appendix for reconciliation
Slide 22: Financial Model and Targets
Financial Model and Targets Metric CY2019 Target Revenue growth -5.5% 4-6% Non-GAAP Operating Margin1 7.6% 12-14% Adjusted EBITDA Margin1 14.0% 16-18% Capex 5.3% of Revenues 4-5% of Revenue Free Cash Flow $176M $230-270M Return on Invested Capital 7.3% 16-18% 1See Appendix for reconcilliation
Slide 23: Restructuring of E-MS Business Unit
Restructuring of E-MS Business Unit
Slide 24: E-MS Restructuring Background
E-MS business unit - Three Chinese manufacturing facilities: Two in Shanghai (SH BPA and SH E-MS) and one in Shenzhen (SZ). Ceasing operations at SH E-MS and SZ facilities and absorbing SH BPA in communications and computing (C&C) business unit, part of Commercial Sector. 2019 SH EM-S and SZ: 63% Au
Slide 25: Strategic rationale
Strategic rationale Increasing focus on differentiated, higher margin products; commercial assembly lower margin US/China trade war as well as COVID-19 had negative impact on E-MS business unit The Town of Nanxiang in the Jaiding district of Shanghai communicated intention to expropriate the land wh
Slide 26: Divestiture of Mobility Business Unit
Divestiture of Mobility Business Unit
Slide 27: The Evolution of TTM Through Strategic Transactions
2018 Acquires Anaren Build to Spec RF Technology 2020 Divests Mobility* Stable end markets Financial flexibility 2019 Acquires i3’s assets Substrate like PCB technology Ultra high aspect ratio expertise Extensive patent portfolio $2.1B* $79Mn The Evolution of TTM Through Strategic Transactions 1998
Slide 28: Transaction overview
Transaction overview TTM has sold its four China manufacturing plants comprising substantially all of the assets of its Mobility business unit to AKMMeadville Electronics (Xiamen) Co., Ltd., a Chinese consortium consisting of Meizhi Investment (Xiamen) Co., Ltd., Xiamen Semiconductor Investment Grou
Slide 29: Strategic rationale
Strategic rationale Reduces exposure to highly seasonal and cyclical cellular market Increases mix of business to longer cycle markets with aerospace and defense remaining largest market segment More capital available for growth investments in our remaining businesses while buyer committed to invest
Slide 30: Increased exposure to stable and growing end markets and customers
Increased exposure to stable and growing end markets and customers TTM FY 2019 TTM FY 2019 pro-forma Mobility divesture Networking and Communications Aerospace and Defense Medical Industrial Computing Automotive Growth drivers 2018-2023 CAGR (third party) 2-4% 5-8% 1-3% 3-5% 3-5% % of total sales 33
Slide 31: Summary Financial Impact
Summary Financial Impact FY 2019 TTM As Reported ($mn) Mobility Business Unit ($mn) TTM Excluding Mobility Pro-Forma ($mn) Revenues 2689 556.1 2133 Non-GAAP Operating Profit1 204.1 (7.6%) 14.8 (2.7%) 189.3 (8.9%) Adjusted EBITDA1 376.2 (14.0%) 90.5 (16.3%) 285.7 (13.4%) Cash 400.1 N/A 1000 Debt 1475
Slide 32: Potential Use of Proceeds
Potential Use of proceeds Drive growth through investments, strengthen balance sheet and create value for shareholders Maintain financial discipline and optimize the balance sheet through de-levering Ongoing investment in our technology portfolio New product and technology development Strategic acqu
Slide 33: TTM Remains Committed to Strategic Focus
Diversification Diverse end markets Near term -Aerospace & Defense Discipline Operational execution Earnings power Cash flow generation TTM Remains Committed to Strategic Focus Differentiation Scale Technology breadth Global footprint Early engagement
Slide 34: Thank You
TIM Technologies ss Inspiring Innovation Thank You
Slide 35: Appendix
TIM Technologies ss Inspiring Innovation Appendix
Slide 36: TTM Consolidated, Mobility, SZ + SH-EMS, and Pro-Forma Financials
TTM Consolidated, Mobility, SZ + SH-EMS, and Pro-Forma Financials (non-GAAP, millions of dollars) TTM Consolidated Mobility Business Unit SZ + SH E-MS TTM, excluding Mobility, SZ & SH E-MS
Slide 37: TTM End Market Exposure
TTM End Market Exposure TTM Consolidated Mobility Business Unit SZ + SH-EMS TTM, excluding Mobility, SZ & SH E-MS
Slide 38: Non-GAAP Reconciliations (TTM Consolidated)
Non-GAAP Reconciliations (TTM Consolidated) Note: Numbers presented may not add up precisely to totals provided due to rounding.
Slide 39: Mobility Business Unit non-GAAP Reconciliations
Mobility Business Unit non-GAAP Reconciliations
Slide 40: SZ and SH-EMS non-GAAP Reconciliations
SZ and SH-EMS non-GAAP Reconciliations
Slide 41: TTM Remains a Global Leader in the PCB Manufacturing Market
TTM Remains a Global Leader in the PCB Manufacturing Market 2018 Top 10 world PCB manufacturers by revenue ($mn) $Mn Maintain advantages associated with sufficient scale Only US-based company in the Global Top 10 Most diversified company in the Global Top 10 – products and end markets Focus on high