Harman International Industries Inc.
Harman International Industries — Q4 FY2016 Earnings Presentation
26 slides from Harman International Industries's earnings presentation, Aug 4, 2016
Slide 1: Fourth Quarter & Full-Year Fiscal 2016 Highlights
FOURTH QUARTER & FULL-YEAR FISCAL 2016 HIGHLIGHTS DINESH C. PALIWAL - CHAIRMAN, PRESIDENT AND CEO SANDRA E. ROWLAND - CHIEF FINANCIAL OFFICER August 4, 2016 Exhibit 99.2
Slide 2: Forward looking information
Forward looking information Except for historical information contained herein, the matters discussed in this earnings presentation are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended. One should not place undue reliance on these statem
Slide 3: Highlights – Fiscal 2016
Highlights – FISCAL 2016 NET SALES UP 12% TO $1.9B GAAP EBITDA UP 26% TO $212M; OPERATIONAL EBITDA UP 20% TO $225M GAAP EPS $1.01 IN-LINE WITH FY15; OPERATIONAL EPS UP 14% TO $1.57 Note: Operational EBITDA and EPS exclude acquisition-related items, restructuring and non-recurring charges. NET SALES
Slide 4: Our Businesses – Fiscal 2016
LIFESTYLE AUDIO PROFESSIONAL SOLUTIONS CONNECTED SERVICES Navigation, Multimedia, Connectivity, Telematics, Safety & Security Solutions Premium Branded Audio Products and Sound Management Software for Home, Car and on the go Audio, Lighting, Video Switching and Enterprise Automation for Entertainmen
Slide 5: Financial Performance
FINANCIAL PERFORMANCE EBITDA is non-GAAP measure and excludes acquisition-related items, restructuring and non-recurring charges. FY = Full-year ending June 30, 2016. Divisional revenue includes intercompany revenues. Quarter Year-Over-Year YTD Year-Over-Year ($ in millions, except EPS) Q4 FY16 Q4 F
Slide 6: Connected Car Q4 FY16 Highlights
New business Awards North American OEM Porsche Harley Davidson Toyota New vehicle launches BMW X3 and X4 Genesis EQ900/G90 (Hyundai) Kia K3 and K5 TATA Tiago Industry awards Consumer Reports Highest Rated Infotainment System Supplier of the Year – 2016 Automotive Interiors Expo, Germany CONNECTED CA
Slide 7: Lifestyle Audio Q4 FY16 Highlights
CAR AUDIO New Business Awards: Audi (Bang & Olufsen)Toyota (JBL) Hyundai/Kia (Infinity) Lexus(Mark Levinson)SGM Wuling (Infinity)Subaru (Harman Kardon) Electric Car (Summit Platform) New Car Launches: Audi Q5 (Bang & Olufsen)Maserati Quattroporte and Ghibli (Bowers & Wilkins) Dodge Viper SRT (Harman
Slide 8: Professional Solutions Q4 FY16 Highlights
Professional Solutions Q4 FY16 HIGHLIGHTS MAJOR NEW ENTERPRISE Installations Heinz Field, Pittsburgh Hyatt Regency, Mexico City Burj Al Arab Hotel, Dubai Key entertainment Events / tours Shanghai Chenshan Classical Music Festival Academy of Country Music Awards Multiple Summer Concert Tours 7 indust
Slide 9: Connected Services Q4 FY16 Highlights
engineering contracts BMWMicrosoft PSA Reliance Jio OTA Contracts FCA PorscheSubaru Partnerships & awards Partnership with NXP Semiconductors on Software Update Gateway EGR Award – Data Analytics Partner of the Year for Europe IoT Business Impact Award - IoT Evolution Expo CONNECTED SERVICES Q4 FY16
Slide 10: FY 2016 Summary
FY 2016 Summary
Slide 11: 2016 Recap: Record Revenue and EBITDA
2016 RECAP Record Revenue and EBITDA REPORTED RESULTS ($ IN MILLIONS) 11.4% 12.1% FY15 FY16 FY15 FY16 +12% CONSTANT CURRENCY ($ IN MILLIONS) 11.4% 12.1% FY15 FY16 FY15 FY16 Revenue EBITDA Revenue EBITDA +20% +16% +23% NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES ACQUISITION-RELATED ITEMS, RESTRUCTU
Slide 12: 2016 Recap: Division Performance
REVENUE: +11% EBITDA: +24% 15.5% 12.2% 355 694 15.4% 14.4% 1,761 2,138 12.1% 14.6% 1,024 1,014 12.7% 14.3% 2,804 3,102 2016 RECAP DIVISION performance – constant currency LIFESTYLE AUDIO CONNECTED CAR HARMAN PROFESSIONAL SOLUTIONS CONNECTED SERVICES 11.4% 12.1% Organic M&A $ IN MILLIONS 5,946 6,912
Slide 13: Backlog Expansion
Backlog expansion FY14 FY16 FY12 FY10 CAR AUDIO CONNECTED CAR ($ IN BILLIONS) CAGR +10% 20.5 24.1 16.1 13.6 AWARDED AUTOMOTIVE BUSINESS
Slide 14: Strong Long-Term Performance
STRONG LONG-TERM PERFORMANCE double digit GROWTH REPORTED RESULTS ($ IN MILLIONS) FY12 FY14 5 Year CAGR FY 11-16 +13% REVENUE EBITDA 5 Year CAGR FY 11-16 +21% NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES RESTRUCTURING, ACQUISITION-RELATED ITEMS AND NON-RECURRING CHARGES
Slide 15: Financial Outlook
FINANCIAL OUTLOOK
Slide 16: New Divisional Reporting Structure
NEW DIVISIONAL REPORTING STRUCTURE Reclassification of car AUDIO aftermarket services NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES RESTRUCTURING, ACQUISITION-RELATED ITEMS AND NON-RECURRING CHARGES CONNECTED SERVICES Revenue: $694M EBITDA: $85M, 12.2% TOTAL COMPANY Revenue: $6,912M EBITDA: $836M, 1
Slide 17: Fiscal Year 2017 Forecast
FISCAL YEAR 2017 FORECAST EBITDA GROWTH ($ IN MILLIONS) FY16 FY17E REVENUE GROWTH ($ IN MILLIONS) FY16 FY17E NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES RESTRUCTURING, ACQUISITION-RELATED ITEMS AND NON-RECURRING CHARGES + ~7% + ~10 % FORECAST ASSUMPTIONS GEOGRAPHIC ASSUMPTIONS: AUTOMOTIVE GDP PROD
Slide 18: Fiscal 2017 Forecast Divisional Breakout
LIFESTYLE AUDIO PROFESSIONAL SOLUTIONS CONNECTED CAR FISCAL 2017 FORECAST DIVISIONAL BREAKOUT 13.7% FY16 FY17E ~14.7% 632 ~680 ~15.1% 14.9% FY16 FY17E 2,200 ~2,410 12.1% 1,014 ~1,045 FY16 FY17E 14.3% ~14.5% 3,102 ~3,320 FY16 FY17E HARMAN 12.1% ~12.4% FY16 FY17E 6,912 7,300-7,500 REVENUE: +7% EBITDA:
Slide 19: Fiscal Year 2017 Forecast Financial Metrics
FISCAL YEAR 2017 FORECAST FINANCIAL METRICS – OPERATIONAL $ IN MILLIONS, EXCEPT EPS FY16 REPORTED FY17 FORECAST RANGE NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES ACQUISITION-RELATED ITEMS, RESTRUCTURING AND NON-RECURRING CHARGES EBITDA 836 900 - 940 D & A 159 ~180 EBIT 677 720 - 760 Interest Expen
Slide 20: 2017 Guidance and Mid-Term Outlook
2017 GUIDANCE AND MID-TERM OUTLOOK PROFITABLE REVENUE growth REVENUE CAGR FY16-19 +8% Global GDP CAGR ~2.5% Global Automotive Production CAGR: ~3% EUR/USD Assumption: 1.10 ~$7.7B ~$7.4B 12.1% 12.4% 12.7% 13.5% GROWTH DRIVERS REVENUE NEW AUTOMOTIVE SOPs TAKE RATE EXPANSION SOFTWARE SERVICES FOR IOT E
Slide 21: Megatrends and Growth Drivers
MEGATRENDS AND GROWTH DRIVERS Autonomous Car Internet of Things Smart Audio ARTIFICIAL INTELLIGENCE CLOUD, MOBILITY & ANALYTICS CYBERSECURITY USER INTERFACE SOUND MANAGEMENT SOFTWARE SERVICES PATH TO $11 BILLION IN REVENUE ~$8.6B ~$7.4B ORGANIC REVENUE CAGR FY16-21 +10%
Slide 22: Capital Structure
JUNE 30, 2016 ($ IN MILLIONS) CAPITAL STRUCTURE Liquidity & maturity schedule CAPEX PROJECTS TO DRIVE ORGANIC GROWTH STRATEGIC, BOLT-ON ACQUISITIONS THAT ACCELERATE GROWTH CONTINUE DIVIDEND DISTRIBUTIONS ($101M in FY16) SHARE BUYBACK $140M in FY16 (1,632,000 SHARES) $360M BOARD AUTHORIZATION REMAINS
Slide 23: Strong Balance Sheet with $1.3 Billion in Liquidity
STRONG BALANCE SHEET WITH $1.3 BILLION IN LIQUIDITY INVESTMENT THESIS INDUSTRY-LEADING $24.1B BACKLOG WITH DOUBLE-DIGIT OPERATING MARGINS DEMAND FOR CONNECTED CAR DRIVES TAKE RATES AND SOFTWARE SERVICES POWERFUL BRANDS LIFT AUDIO BUSINESS IN HOME, CAR AND ENTERTAINMENT SOFTWARE SERVICES BUSINESS POI
Slide 24: Thank You
MTN HE dal Faas na | \ s re x cf ThankYou
Slide 25: FY16 Results GAAP to Non-GAAP Reconciliation
FY16 RESULTS GAAP to NON-GAAP Reconciliation NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES RESTRUCTURING,, NON-RECURRING CHARGES AND ACQUISITION-RELATED ITEMS FY 2016 RESULTS FY 2019 OUTLOOK $ IN MILLIONS, EXCEPT EPS GAAP Adjustments Non-GAAP GAAP adjustments non-GAAP Operating Income 580 895 - 935
Slide 26: FY17 Forecast GAAP to Non-GAAP Reconciliation
FY17 FORECAST GAAP to NON-GAAP Reconciliation NOTE: EBITDA IS NON-GAAP MEASURE AND EXCLUDES RESTRUCTURING,, NON-RECURRING CHARGES AND ACQUISITION-RELATED ITEMS FY 2017 FORECAST FY 2019 OUTLOOK $ IN MILLIONS, EXCEPT EPS GAAP Adjustments Non-GAAP GAAP adjustments non-GAAP Operating Income 615 - 655 89
Harman International Industries — Q4 FY2016 Earnings Presentation on 6ix