Cts Corporation · NYSE:CTS
Cts — Investor Presentation (February 2022)
27 slides from Cts's investor presentation, Feb 9, 2022
Slide 1: CTS Investor Presentation February 2022
CTS Investor Presentation February 2022
Slide 2: Forward-Looking Statements
Forward-Looking Statements This document 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, sta
Slide 3: CTS is a Leading Designer and Manufacturer of Custom Engineered Solutions
Global design with regional manufacturing capabilities Technical and application expertise applied across diverse end markets 1 Last 12 months Revenue as of Dec 2021 2 Since 2017 including acquisitions 3 Cash Returned since 2013 CTS is a Leading Designer and Manufacturer of Custom Engineered Solutio
Slide 4: Why Invest in CTS
Why Invest in CTS =~ im © ° Strategically Positioned Successful to Diversify & Grow Business Model cts Strong Executional Capabilities
Slide 5: Multiple Drivers for Above Market Growth
Multiple Drivers for Above Market Growth 5 Capitalize on Secular Growth Themes Diversify into Non-Transportation End Markets Apply Domain Expertise in Premium, Niche End Markets Move Up Value Chain Sustainability Electrification Reduced Emissions Fluid Metering Automation Industry 4.0 Factory Automa
Slide 6: Diversifying Revenue to High Growth End Markets Outside of Transportation
2017 Revenues $423M Long term target +10% CAGR Beginning in 2022, sales to Telecom & IT end-market are included in the Industrial end-market Utilizing core capabilities and domain expertise in fast-growing end markets Investing in business development resources, process and technology capabilities D
Slide 7: The CTS Advantage – Your Partner in Smart Solutions
Technology and application expertise creates competitive advantage and long-term relationships with blue-chip customers The CTS Advantage – Your Partner in Smart Solutions Successful Business Model 7
Slide 8: Long Term Relationship with Blue-chip Customers
Long Term Relationship with Blue-chip Customers 8
Slide 9: Strong Execution Capabilities
Strong Execution Capabilities Improved Operational Efficiency Gross Margin +590 bps1 Streamlined SG&A (470) bps1 Adj. EBITDA +1160 bps1 Implemented SAP Strengthened Balance Sheet 112% free cash flow2 $118M returned to Shareholders3 Solid acquisition capacity Strategic Investments For Growth 9 1 Comp
Slide 10: Secular Themes Drive Growth Across End Markets
Secular Themes Drive Growth Across End Markets 10 Sustainability Automation Healthcare Innovation Electrification Reduced emissions Fluid metering Energy efficiency Industry 4.0 Factory automation Passenger safety Defense automation Improved diagnostics Non-invasive Patient experience
Slide 11: Transportation End-Market
Global expertise, custom design and manufacturing capabilities close to our customers Leading position in accelerator pedals New EV/PHEV products – current sensors, electronic brake pedals, occupant safety and position sensors 2021 New Business Wins include 21 EV platforms Majority of product portfo
Slide 12: Domain Expertise Enables Next Generation Medical Applications
12 Market Trends and Customer Needs Key Applications CTS Differentiation Domain Expertise Enables Next Generation Medical Applications Ceramic material formulation expertise for diverse applications High-volume, high-quality manufacturing capability Depth of domain and application engineering expert
Slide 13: Materials and Application Expertise for Industrial End-Market
Materials and Application Expertise for Industrial End-Market 13 Market Trends and Customer Needs Key Applications CTS Differentiation Multiple material formulation and technologies for diverse applications High-volume, high-quality manufacturing capability Global locations and capabilities to meet
Slide 14: Cutting-Edge Technology Supports Aerospace and Defense End-Market
14 Market Trends and Customer Needs Key Applications CTS Differentiation Cutting-Edge Technology Supports Aerospace and Defense End-Market Manufacturing locations in US (ITAR registered) and EU Specialized material formulation, process expertise enable superior performance Next generation materials
Slide 15: Strong Execution Capabilities Driving Sustainable, Profitable Growth
Strong Execution Capabilities Driving Sustainable, Profitable Growth 2017-2021 CAGR 4.9% 2017-2021 CAGR 11.9% 15 Covid Impact Covid Impact $550 $525 $2.25 $2.00 97% 58% 89% 170% 112% Revenue ($ Millions) Free Cash Flow Conversion ($ Millions) Adj. Diluted EPS Returned to Shareholders ($ Millions) No
Slide 16: Strategic Approach to M&A
Strategic Approach to M&A 16 Disciplined approach to acquisitions ROI in excess of cost of capital Maintain balance sheet strength Synergy opportunities Accretive to earnings
Slide 17: Financial and Capital Allocation Framework
Capital Allocation Framework Cash Return to Shareholders Dividends & Buybacks 20-40% of FCF Capital Structure Leverage 1.0 – 2.5x EBITDA Operating Cash Flow 12-15% of Sales Financial and Capital Allocation Framework 17 Financial Framework 1 2012 financials from continuing operations (Excluding EMS b
Slide 18: Our Sustainability Journey
18 Our Sustainability Journey Established cross-functional ESG Steering Committee Oversight of sustainability initiatives by Nominating, Governance and Sustainability Committee Board diversity >40% Ethical business practices and compliance training for all employees Supporting sustainable products V
Slide 19: Deep engineering capabilities and custom engineered products for OEMs Strong presence in position, ultrasonic
19 Deep engineering capabilities and custom engineered products for OEMs Strong presence in position, ultrasonic and temperature sensing with domain expertise Deep and long-standing customer relationships Positioned to Grow at 10% CAGR through Organic and Inorganic strategies Clear strategy of diver
Slide 20: Appendix
Cts =: Appendix
Slide 21: Focus 2025: 10% Revenue CAGR with 23% EBITDA
21 Focus 2025 01 02 03 04 10% Revenue CAGR with 23% EBITDA
Slide 22: CTS Core Values
CTS Core Values cts 4 Play to Win Oo) Responsiveness © Simplicity Solution Oriented
Slide 23: Financial Summary
($ Millions, except percentages and Adjusted Diluted EPS) Financial Summary Net Sales Adjusted Diluted EPS Operating Cash Flow Total Debt / Capitalization Depreciation and Amortization Adjusted EBITDA Adjusted EBITDA % of Sales Gross Margin Gross Margin % of Sales 2018 $470.5 $1.53 $58.2 11.7% $22.5
Slide 24: Regulation G Schedules: Adjusted Net Earnings
Regulation G Schedules ($ Millions, except percentages) Adjusted Net Earnings 24
Slide 25: Regulation G Schedules: Adjusted Diluted EPS and Debt to Capitalization
Regulation G Schedules Adjusted Diluted EPS ($ Millions, except percentages) Total Debt to Capitalization 25
Slide 26: Regulation G Schedules: Adjusted EBITDA
Regulation G Schedules ($ Millions, except percentages) Adjusted EBITDA 26 Note: 2012 financials are for continuing operations only
Slide 27: Regulation G Schedules: Free Cash Flow
Regulation G Schedules ($ Millions) Free Cash Flow 27