Baylin Technologies, Inc. · TSX:BYL
Baylin Technologies — Investor Presentation (September 2014)
24 slides from Baylin Technologies's investor presentation, September 2014
Slide 1: Investor Presentation September 2014
I N V E S T O R P R E S E N TAT I O N SEPTEMBER, 2014 A global provider of innovative antenna solutions for the mobile, broadband and infrastructure markets 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains “forward-looking information”, which may include, but is not limited to, statements with respect to future events or the future financial and operating performance of Baylin Technologies Inc. (“Baylin”) and which reflect management’s expectations
Slide 3: Investment Highlights
INVESTMENT HIGHLIGHTS Significant forecasted growth in mobile devices and data drive demand for sophisticated antennas1 >35-year track record of success through innovation Strong competitive position with integrated capabilities from design to high-volume manufacturing Partner and key suppli
Slide 4: 61% CAGR increase in global mobile data traffic
61% or 11x CAGR Increase in global mobile data traffic* (2013-2018) There will be 1.5 billion LTE connections by 2018* * Source: Cisco VNI Global Mobile Data Traffic Forecast Update, 2013-2018 4
Slide 5: Antennas are essential. Antennas are sophisticated.
Bluetooth Antenna 4G & LTE Antenna CONSUMER DEMAND FOR INCREASED PERFORMANCE = GPS Antenna INCREASE IN ANTENNA COMPLEXITY Wi-Fi Antenna Smaller Greater functionality GSM Reduced interference Antenna Increased data capacity 3G Antenna Antennas are essential. Antennas are sophisticated. 5
Slide 6: Global provider of innovative antenna solutions
LEADING R&D AND IN-HOUSE MANUFACTURING GLOBAL SCALE OF INNOVATION HUB IN ISRAEL EXCELLENCE IN ASIA OPERATIONS A global provider of innovative antenna solutions for the mobile, broadband and wireless infrastructure markets (DBA GALTRONICS) 6
Slide 7: >35 Years of Innovation
>35 YEARS OF INNOVATION 2014 2013 EXTENTTM Samsung Small Cell 2012 Antenna Galaxy S4 Spider Cloud 2012 Small Cell Cisco Linksys 2012 e4200 Router PEAR™ MIMO 2010 Antenna Samsung 2003 Galaxy 1 Kyocera 2003 K7 Hyundai 2002 H-150 Elster 2261 2001 ABB WAH Qualcomm Meter 1992 QCP-270 Nokia 1983 1011 Moto
Slide 8: Strategically Located Global Operations
STRATEGICALLY LOCATED GLOBAL OPERATIONS Canada Corporate Office South Korea Sales Office R&D Centre Israel Sales Office USA Corporate HQ Manufacturing R&D Centre Plant R&D Centre China Sales Offices Manufacturing Plant R&D Centre Vietnam Manufacturing Plant (under construction) • Work side-by-side w
Slide 9: World Class R&D
WORLD CLASS R&D 84 antenna engineers Dedicated research centre in Israel Technological design centers in Tiberias, Seoul, Wuxi and Arizona Extensive patent portfolio and intellectual property rights relating to antenna design and manufacturing Average of 100 new projects every year, with o
Slide 10: Vertical Integration from Product Design to Production
VERTICAL INTEGRATION FROM PRODUCT DESIGN TO PRODUCTION ADVANCED RF DESIGN RAPID TOOL PLASTIC PRECISION LASER DIRECT ASSEMBLY & RESEARCH PROTOTYPING FABRICATION INJECTION STAMPING STRUCTURING INTEGRATION CENTRE Innovative design, quick production ramp-up, cost savings, short time to market 10
Slide 11: Growth Strategy: Expansion in Vietnam
GROWTH STRATEGY: EXPANSION IN VIETNAM Estimated 100m antenna capacity and painting and plating production capabilities over time Expected to deepen relationship with key customers Expect better cost control to recapture gross margin from bringing certain production processes in-house Seeking
Slide 12: Case Study: Samsung
CASE STUDY: SAMSUNG 2008–2012 SMARTPHONE SHIPMENTS – TOP OEMs* 250 SAMSUNG 200 150 APPLE Millions 100 50 NOKIA 0 2008 2009 2010 2011 2012 8-year relationship Tier-one antenna supplier Collaboration on hundreds of products since 2006 Jointly worked on hundreds of projects per year from 2010 t
Slide 13: Case Study: Cisco/Belkin
CASE STUDY: CISCO/BELKIN 30% U.S. RETAIL, HOME AND SMALL BUSINESS NETWORKING MARKET SHARE FOR BELKIN (POST CISCO HOME NETWORKING BUSINESS SALE)* 8-year relationship Developed first internal antenna for consumer network router Collaboration on ~95% of portfolio of consumer network routers (sinc
Slide 14: Case Study: Sydney Cricket Ground Stadium
CASE STUDY: SYDNEY CRICKET GROUND STADIUM Leveraging strengths in R&D and innovation, manufacturing excellence and a global platform to penetrate the wireless infrastructure market Increased focus on wireless infrastructure sector following strategic review of business in 2010 Developed propriet
Slide 15: Defensible Market Position
DEFENSIBLE MARKET POSITION >35 Years of Experience in RF Technology and Leading Innovation Vertically Integrated Strategically Design and Manufacturing Located Facilities Capabilities Strong Management Blue-Chip and Technical Team Customer Base High barriers to entry 15
Slide 16: Financials, Management and Growth Strategy
Financials, Management and Growth Strategy 16
Slide 17: Strong Revenue and EBITDA Growth
STRONG REVENUE AND EBITDA GROWTH REVENUE (US$, MILLIONS) ADJUSTED EBITDA FROM CONTINUING OPERATIONS (US$, MILLIONS) 90 12 80.1 10.8 80 68.7 10 70 8.6 60 8 50.3 50 44.3 6 5.7 40 30 4 20 2 1.4 10 0 0 2010 2011 2012 2013 2010 2011 2012 2013 22% CAGR (2010–2013) 17% Growth (2012 –2013) 98% CAGR (2010–20
Slide 18: Summary of Eight Quarters
SUMMARY OF EIGHT QUARTERS 2012 2013 2014 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Sales 15,083 19,062 20,369 17,695 28,158 19,954 14,264 11,251 10,748 Gross Profit 4,533 6,299 6,789 5,814 10,493 5,766 3,144 2,525 2,023 R&D 1,592 1,683 1,786 1,660 1,865 1,774 2,093 * 1,832 1,782 Sales & Marketing 736 567 723 507 7
Slide 19: Selected Balance Sheet Information
SELECTED BALANCE SHEET INFORMATION SELECTED UNAUDITED BALANCE SHEET INFORMATION (June 30, 2014) in US$ millions Cash $32.8 Other Current Assets $16.2 Non-Current Assets $23.9 Total Assets $72.9 Current Liabilities $15.8 Non-Current Liabilities $3.8 Total Liabilities $19.6 Total Shareholders’ Equity
Slide 20: Growth Strategy: Organic
GROWTH STRATEGY: ORGANIC MOBILE Capitalize on strong growth in the mobile sector and increasing demand for devices, connections 18.4% and data capacity CAGR (2013 – 2017) Global smartphone shipments1 Drive innovation through RF technology expertise and continuing R&D BROADBAND Grow with our cu
Slide 21: Growth Strategy: Potential Acquisitions
GROWTH STRATEGY: POTENTIAL ACQUISITIONS ACQUISITION CRITERIA FOR ACQUISITION THE ANTENNA MARKET RATIONALE New technologies, products or Add or build upon existing product categories with strong technology or portfolio of growth potential products New technologies Expand geographical footprin
Slide 22: Antennas Are an Essential Component to Wireless Communication
ANTENNAS ARE AN WE ARE ESSENTIAL COMPONENT TO WELL POSITIONED WIRELESS COMMUNICATION TO BENEFIT Growth in mobile devices and >35 years in the industry antennas per device Innovation leader Sharp rise in mobile data traffic Industry-leading customers Demand for higher data capacity and
Slide 23: Strong and Experienced Team
STRONG AND EXPERIENCED TEAM MANAGEMENT TEAM BOARD OF DIRECTORS EPHRAIM ULMER President & CEO JEFFREY C. ROYER Chairman Active private investor and board member of several public and private companies as Track record of establishing a world-class, vertically-integrated well as General Partner of
Slide 24: Market Data
MARKET DATA Stock symbol TSX: BYL Shares outstanding 18.7 million Price (September 5, 2014) $3.51 52-week low / high $3.20/ $8.35 Market capitalization $65.6 million Fiscal year-end December 31 24
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