Slide 1: Fourth Quarter and Full Year 2020 Results
February 17, 2021 Fourth Quarter and Full Year 2020 Results
Slide 2: Important information
Important information Caution Regarding Forward Looking Statements This presentation or any other oral or written statements made by us or on our behalf may include forward-looking statements that reflect our current views with respect to future events and financial performance. These statements may
Slide 3: CEO quote on 2020
“While 2020 was a year of challenge and change, our dedicated team, resilient supply chain and agile operations allowed us to quickly adapt and innovate across all aspects of our business.” Chuck Treadway President and Chief Executive Officer © 2021 CommScope, Inc. All rights reserved. | CommScope,
Slide 4: 2020 at a glance
2020 at a glance BUSINESS TECHNOLOGY FINANCIALS CUSTOMERS AND PARTNERS 4Q’20 bottom-line Employee safety Progress in 5G and growth – quarter over Strong OEM Wi-Fi 6 quarter and year over partnerships year Meeting customer Future business with Leveraged variable cost Expanding retail commitments C-Ba
Slide 5: CommScope NEXT Profitable Growth
CommScope NEXT Driving Shareholder Value Profitable • Doubling down on growth by further exploring vertical market strategies, capacity constraints, international expansion investments, enhanced channel relationships and development of critical Growth technologies Business • Focusing on efficiency a
Slide 6: CFO quote on economic recovery
“We are dedicated to ensuring that as the economy recovers and as industry tailwinds take shape, CommScope will be well positioned to deliver growth and emerge as a stronger, more streamlined company.” Alex Pease EVP and Chief Financial Officer © 2021 CommScope, Inc. All rights reserved. | CommScope
Slide 7: Innovating across our business and achieving solid Q4 results
(In $millions, except per share amounts) FY’19 FY’19 FY’20 Y/Y Results Results Results Change From Combined Company* Combined Company(3) Net Sales (1) $8,345 $9,755 $8,436 -14%* Adj. EBITDA(2) $1,298 $1,368 $1,215 -11%* Adj. EPS(2) $2.15 n/a $1.56 -27% Adj. Free Cash Flow(2) $793 n/a $415 -48% Innov
Slide 8: Strong bottom-line growth driven by Broadband Networks momentum
(In $millions, except per share amounts) 4Q’19 4Q’20 Y/Y Results Results Change Net Sales (1) $2,299 $2,132 -7% Adj. EBITDA(2) $324 $362 +12% Adj. EPS(2) $0.46 $0.59 +28% Strong bottom-line growth driven by Broadband Networks momentum and focus on cost discipline (1) Net sales as presented for 4Q’20
Slide 9: Broadband Networks
Broadband Networks Financial Highlights Business Business Highlights Highlights Net Sales (1) ($M) • Net sales growth in North America and • Increased video consumption and uplink demand driven by Caribbean and Latin America work-from-home, e-learning and tele-medicine driving 4Q'19 $673 • Growth wi
Slide 10: Venue and Campus Networks
Venue and Campus Networks Financial Highlights Business Highlights • Structured cabling challenged by headwinds associated with Net Sales (1) ($M) • Net sales declines across all regions except China and Caribbean and Latin America COVID-19 pandemic and impact on commercial real estate 4Q'19 $510 sp
Slide 11: Outdoor Wireless Networks
Outdoor Wireless Networks Financial Highlights Business Highlights • Modest net sales growth driven primarily by • T-Mobile ramp continues; remainder of US carriers direct Net Sales ($M) Asia Pacific, European and North American capital priorities on C-BAND auction 4Q'19 regions $292 • Growth driven
Slide 12: Home Networks
Home Networks Financial Highlights Business Highlights Net Sales (1) ($M) • Declines across all regions • Home Media Solutions (Video CPE) remains soft primarily due • Growth in broadband gateways more than offset 4Q'19 $824 by video declines to continuing OTT trends 3Q'20 $564 4Q'20 $571 • Continue
Slide 13: Cash flow update
Cash flow update GAAP Cash Flow from Operations ($M) Adj. Free Cash Flow(1) ($M) $596 $793 $436 $415 $98 $65 FY’19 4Q’20 FY’20 FY’19 4Q’20 FY’20 • Full year business continued to generate strong cash flow despite challenging environment • Fourth quarter working capital was net usage of cash, primari
Slide 14: Strong liquidity & de-risked capital structure
Strong liquidity & de-risked capital structure Proactive balance sheet management provides Debt Maturities (as of 12/31/2020) runway before next significant debt maturities Secured Debt Unsecured Debt • Since close of ARRIS acquisition, CommScope has repaid over $800 million of debt with focus on ne
Slide 15: 2021 end markets
2021 end markets Evolving technology trends are expected to provide mostly favorable tailwinds Demand Market Key 2021 Business Drivers Outlook Operators balancing network Work-from-home and RDOF expected to fund Broadband spend between head-end and virtual learning fiber deployments passing outside
Slide 16: Q&A
Q&A Fourth Quarter and Full Year 2020 Results © 2021 CommScope, Inc. All rights reserved. | CommScope, ARRIS and the ARRIS logo are trademarks of CommScope, Inc. and/or its affiliates. All other trademarks are the property of their respective owners.
Slide 17: Appendix
COMMSCOPE’ Appendix
Slide 18: Statements of Operations
CommScope Holding Company, Inc. Condensed Consolidated Statements of Operations (Unaudited -- In millions, except per share amounts) Three Months Ended Year Ended Statements of 2020 December 31, 2019 2020 December 31, 2019 Operations Net sales Cost of sales Gross profit $ 2,131.8 1,416.8 715.0 $ 2,2
Slide 19: Balance Sheets
CommScope Holding Company, Inc. Consolidated Balance Sheets (In millions, except share amounts) December 31, 2020 2019 Balance Sheets Cash and cash equivalents Assets Accounts receivable, less allowance for doubtful accounts of $ 521.9 $ 598.2 $40.3 and $35.4, respectively 1,487.4 1,698.8 Inventorie
Slide 20: Statements of Cash Flows
CommScope Holding Company, Inc. Consolidated Statements of Cash Flows (Unaudited -- In millions) Three Months Ended Year Ended Statements of Cash December 31, December 31, 2020 2019 2020 2019 Operating Activities: Net income (loss) $ 23.9 $ (436.7) $ (573.4) $ (929.5) Flows Adjustments to reconcile
Slide 21: Adjusted EBITDA and Adjusted Net Income Reconciliation
CommScope Holding Company, Inc. Reconciliation of GAAP Measures to Non-GAAP Adjusted Measures (Unaudited -- In millions, except per share amounts) Three Months Three Months For the Year Adjusted EBITDA and Ended September 30, 2020 2020 Ended December 31, 2019 Ended December 31, 2020 2019 Adjusted Ne
Slide 22: Sales by Region
CommScope Holding Company, Inc. Sales by Region Sales by Region (Unaudited -- In millions) Sales by Region % Change % Change Q4 2020 Q3 2020 Q4 2019 Sequential YOY United States $ 1,293.0 $ 1,318.2 $ 1,350.8 (1.9) % (4.3) % Europe, Middle East and Africa 368.8 407.3 419.3 (9.5) (12.0) Asia Pacific 1
Slide 23: Sales and Adjusted EBITDA by Segment
Sales and Adjusted CommScope Holding Company, Inc. Segment Information (Unaudited -- In millions) EBITDA by Segment Sales by Segment (1) % Change % Change Q4 2020 Q3 2020 Q4 2019 Sequential YOY Broadband $ 789.3 $ 820.9 $ 673.1 (3.8) % 17.3 % Home 571.0 563.6 823.6 1.3 (30.7) Outdoor Wireless 294.7
Slide 24: Sales and Adjusted EBITDA by Segment
CommScope Holding Company, Inc. Segment Information (Unaudited -- In millions) Sales and Adjusted Sales by Segment (1) As As ARRIS Pre- Combined EBITDA by Segment Broadband $ Reported 2020 2,895.7 $ Reported (2) 2019 2,363.8 $ acquisition (2) 2019 444.0 $ Company (2) 2019 2,807.8 % Change YOY 3.1 %
Slide 25: Adjusted EBITDA Reconciliation by Segment
CommScope Holding Company, Inc. Reconciliation of GAAP to Segment Adjusted EBITDA (Unaudited -- In millions) Fourth Quarter 2020 Segment Adjusted EBITDA Reconciliation (1) Outdoor Venue and Broadband Home Wireless Campus Total Adjusted EBITDA Operating income (loss), as reported Amortization of purc
Slide 26: Adjusted EBITDA Reconciliation by Segment
CommScope Holding Company, Inc. Reconciliation of GAAP to Segment Adjusted EBITDA (Unaudited -- In millions) Year Ended December 31, 2020 Segment Adjusted EBITDA Reconciliation (1) Adjusted EBITDA Broadband Home Outdoor Wireless Venue and Campus Total Reconciliation by Operating income (loss), as re
Slide 27: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation CommScope Holding Company, Inc. Adjusted Free Cash Flow (Unaudited -- In millions) Adjusted Free Cash Flow Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Full Year 2020 Full Year 2019 Cash flow from operations $ 336.0 $ (42.7) $ 209.1 $ 172.2 $ 97.7 $ 436.2 $ 596.4 Ca
Slide 28: Adjusted Gross Profit and Adjusted Operating Expense Reconciliations
CommScope Holding Company, Inc. Quarterly Adjusted Gross Profit and Adjusted Operating Expense Adjusted Gross Profit GAAP to Non-GAAP Adjusted Gross Profit (Unaudited -- In millions) and Adjusted Operating Full Year Full Year Expense Reconciliations Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 2020 2019