Kimball Electronics, Inc. · NASDAQ:KE
Kimball Electronics — Southwest IDEAS Investor Conference 2021
33 slides from Kimball Electronics's conference presentation, Nov 17, 2021
Slide 1: Southwest IDEAS Investor Conference
Southwest IDEAS Investor Conference November 17, 2021 KIMBALL ELECTRONICS 1
Slide 2: Safe Harbor Statement
Kimball Electronics (Nasdaq: KE) Safe Harbor Statement Certain statements contained within this presentation may be considered forward-looking under the Private Securities Litigation Reform Act of 1995. The statements may be identified by the use of words such as “expect,” “should,” “goal,” “predict
Slide 3: Kimball Electronics at a glance
World headquarters Jasper, IN FY21 net sales $1.3 billion Lasting relationships. Global success. Vertical markets Automotive, Medical, Industrial, Public Safety Kimball Electronics at a glance Financial Nasdaq (KE) A global manufacturing solutions provider of contract electronics and diversified Num
Slide 4: Celebrating 60 Years Strong
Celebrating 60 Years Strong Our company culture and core values are derived from the important beliefs of our Guiding Principles CUSTOMERS PEOPLE CITIZENSHIP PROFIT Our customer is our Our people are the The environment Profits are the business company is our home ultimate measure of how efficiently
Slide 5: Celebrating Our Customers
1961 2021 Celebrating Our Customers From cultivating customer relationships to developing unique end-to-end partnership solutions, we celebrate the quality for life we help our customers create for end users. KIMBALL ELECTRONICS 5 KIMBALL ELECTRONICS 5
Slide 6: Culture of Excellence
Foundational Principle Culture of Excellence Our culture of excellence is rooted in our guiding principle: Our customer is our business. We know we must provide innovative products and services that excite our customers and exceed their expectations of quality, features, and enduring value. Our Indu
Slide 7: How We Deliver
How We Deliver Kimball Electronics has participated in the Circuits Assembly Service Excellence Awards for eight consecutive years, winning awards for excellence in multiple categories, including: • Quality • Dependability / Timely Delivery • Responsiveness • Value for Price • Technology The award r
Slide 8: Celebrating Our Employees
Indianapolis, IN Poznan, Poland San Jose, CA Chiba, Japan Jasper, IN Timisoara, Romania Nanjing, China Tampa, FL Reynosa, Mexico Suzhou, China Trivandrum, India Ho Chi Minh City, Vietnam Laem Chabang, Thailand Celebrating Our Employees We work at our collective best when we draw inspiration from the
Slide 9: Operating during a global pandemic
Operating during a global pandemic Various COVID-19 protocols continue to be used in our facilities, in accordance with country-specific, state and local health recommendations. MEASURES WE CONTINUE TO TAKE MANDATORY FACE PROPER HYGIENE BODY SOCIAL VIRTUAL VISITS WORK-FROM-HOME ENCOURAGING MASKS IN
Slide 10: Resilience
Foundational Principle Diversity, Equity and Inclusion: Resilience As a global company, Kimball Electronics recognizes the benefits of a diverse workforce and inclusive work environment. By developing At Kimball Electronics, our people adapt and respond an atmosphere of mutual respect, dignity for t
Slide 11: Celebrating Our Communities
2021 2014 Celebrating Our Communities Our company and community pride intertwine. We share, but never impose, our values within our communities. Each Kimball Electronics facility strives to help make its community a great place to live through positive societal and environmental impact. KIMBALL ELEC
Slide 12: Environmental Success
Environmental Success Our impact on global climate is real. We strive to reduce our energy usage and greenhouse gas footprint, and that starts with our local environment, health and safety teams, and the subsequent sharing of best practices globally. KIMBALL ELECTRONICS 12
Slide 13: Celebrating Our Suppliers
1974 2021 Celebrating Our Suppliers As we approach nearly two years of continuous demand pressure, our team remains steadfast in their commitment to managing the supply chain for mutual collaboration and trust between our customers and suppliers. KIMBALL ELECTRONICS 13 KIMBALL ELECTRONICS 13
Slide 14: Trust
Foundational Principle Trust We continue to see pressures across the supply chain through 2021 and beyond. Our global materials teams continue to work to foster relationship growth and partnerships with our suppliers to offset potential challenges. We know there aren’t always easy solutions, but tru
Slide 15: Celebrating Our Share Owners
Celebrating Our Share Owners Fiscal 2021 was a record year for our company with many financial metrics reaching all-time highs • Net sales • Margin rates • Earnings • Cash flow from operating activities • Return on invested capital KIMBALL ELECTRONICS 15 KIMBALL ELECTRONICS 15
Slide 16: Fiscal 2021 highlights
Fiscal 2021 highlights * * These measures are Non-GAAP terms. A reconciliation is provided in the appendix of this presentation. KIMBALL ELECTRONICS 16
Slide 17: Diversified Portfolio and End Market Services
Diversified Portfolio and End Market Services Fiscal 2021 net sales by vertical market in highly regulated and complex industries 1% OTHER AUTOMOTIVE MEDICAL INDUSTRIAL PUBLIC SAFETY 21% in Net Sales 3% in Net Sales 8% in Net Sales 14% in Net Sales • Electronic Power Steering • Sleep Therapy & Respi
Slide 18: Capital Allocation
(Unaudited) Capital Allocation CAPITAL ALLOCATION Reinvest in the business – Significant capex spending of approximately $30 million/year to $100 fuel multi-year organic growth and expansion $90 in ROIC $80 $70 (IN MILLIONS) Acquisitions – $50+ million of acquisitions $60 over past six years. Going
Slide 19: Reiterated guidance for fiscal 2022
• Continue to experience a shift in a significant As part of Q1 earnings, portion of our shippable backlog, as customer demand exceeds parts availability reiterated guidance for • Well-positioned to ramp production on our record fiscal 2022 backlog • Net sales in the range of $1.4 - $1.5 • Preparing
Slide 20: Strategically positioned for growth
Strategically positioned for growth NET SALES COMPETITVE ADVANTAGES $1,500 $1,400 Global consistency - Single instance of SAP supports $1,292 manufacturing operations around the world. Standard lean six $1,182 $1,201 sigma practices shared across all facilities. $1,072 +8% to +16% $931 vs. FY21 Deep
Slide 21: Automotive
Vertical Market Automotive Growth in electronic content per vehicle from advanced technologies and operating systems • Electronic Power Steering • Body Controls • Automated Driver Assist Systems REPRESENTATIVE CUSTOMERS • Electronic Braking Systems TIER 1 SUPPLIERS Applications and architecture larg
Slide 22: Medical
Vertical Market Medical Demographics and advances in technology producing favorable set-up • Aging population • Affordability and increasing access to care • Connected care to improve patient outcomes • Decreasing device size REPRESENTATIVE CUSTOMERS • Connected drug delivery Medical Healthcare Heal
Slide 23: Expanding Solution Set
Our Strategy Multifaceted Manufacturing Solutions Provider Organic Growth Electronics Manufacturing Outsourced Manufacturing Services Services Expanding Solution Set M&A Investments that Increase Customer Engagement Diversified Add manufacturing services for non-electronic Contract components Manufa
Slide 24: Profitability
ROIC measured over multiple years Program Life-Cycle • As new programs mature, Initial volumes ramp, and cost investments Efficiencies from Efficiencies offset End of efficiencies are gained sourcing & process by pricing pressure product life volume ramp improvement and utilization • Increased launc
Slide 25: Entrepreneurial Spirit
Foundational Principle Entrepreneurial Spirit Our Guiding Principles state: We seek to promote and reinforce an entrepreneurial spirit — a conviction that growth and continuous improvement is everyone’s job. This spirit is further reflected in the recognition that profits are the ultimate measure of
Slide 26: Thank You
Thank You KIMBALL ELECTRONICS 26
Slide 27: Appendix
Appendix KIMBALL ELECTRONICS 27
Slide 28: Don Charron
Don Charron Chairman and CEO Mr. Charron serves as Kimball Electronics’ Chairman of the Board and Chief Executive Officer. Prior to 2014, he served as an Executive Vice President of Kimball International, Inc. (our former parent company), a member of the Board of Directors of Kimball International,
Slide 29: Jana Croom
Jana Croom Vice President, Chief Financial Officer Ms. Croom was appointed Vice President, Chief Financial Officer effective July 1, 2021. Ms. Croom joined Kimball Electronics in January 2021 in the role of Vice President, Finance. Prior to joining Kimball Electronics, she held the position of Vice
Slide 30: Andy Regrut
Andy Regrut Head of Investor Relations With 30 years of diverse industry experience and an impressive track record working with the investment community, Mr. Regrut joined Kimball Electronics as the Head of Investor Relations in March 2021. Prior to Kimball Electronics, Mr. Regrut was the VP of Inve
Slide 31: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation * Prior periods have been revised to reflect adjusted operating income excluding changes in the fair value of SERP. KIMBALL ELECTRONICS 31
Slide 32: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation KIMBALL ELECTRONICS 32
Slide 33: Non-GAAP Reconciliation
Kimball Electronics (Nasdaq: KE) Non-GAAP Reconciliation * Average Invested Capital is computed using Share Owners’ equity plus current and non-current debt less cash and cash equivalents averaged for the last five quarters. KIMBALL ELECTRONICS 33
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