investor overview presentation
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© 2013 Rockwell Collins. All rights reserved.
Insert pictures into these angled boxes. Height should be 3.44 inches.
Investor Overview Q4 FY13
© 2013 Rockwell Collins. All rights reserved. 2
Safe Harbor Statement
This presentation contains statements, including certain projections and business trends, that are forward-looking statements as
defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result
of certain risks and uncertainties, including but not limited to the financial condition of our customers, including bankruptcies; the
health of the global economy, including potential deterioration in economic and financial market conditions; the rate of recovery of
the commercial OEM production rates and the aftermarket; the impacts of natural disasters, including operational disruption,
potential supply shortages and other economic impacts; cybersecurity threats, including the potential misappropriation of assets or
sensitive information, corruption of data or operational disruption; delays related to the award of domestic and international
contracts; delays in customer programs; unanticipated impacts of sequestration and other provisions of the Budget Control Act of
2011; the continued support for military transformation and modernization programs; potential adverse impact of oil prices on the
commercial aerospace industry; the impact of terrorist events on the commercial aerospace industry; declining defense budgets
resulting from budget deficits in the U.S. and abroad; changes in domestic and foreign government spending, budgetary,
procurement and trade policies adverse to our businesses; market acceptance of our new and existing technologies, products and
services; reliability of and customer satisfaction with our products and services; favorable outcomes on or potential cancellation or
restructuring of contracts, orders or program priorities by our customers; recruitment and retention of qualified personnel;
regulatory restrictions on air travel due to environmental concerns; effective negotiation of collective bargaining agreements by us
and our customers; performance of our customers and subcontractors; risks inherent in development and fixed-price contracts,
particularly the risk of cost overruns; risk of significant reduction to air travel or aircraft capacity beyond our forecasts; our ability to
execute to our internal performance plans such as our productivity and quality improvements and cost reduction initiatives;
achievement of our acquisition and related integration plans; continuing to maintain our planned effective tax rates; our ability to
develop contract compliant systems and products on schedule and within anticipated cost estimates; risk of fines and penalties
related to noncompliance with laws and regulations including export control and environmental regulations; risk of asset
impairments; our ability to win new business and convert those orders to sales within the fiscal year in accordance with our annual
operating plan; and the uncertainties of the outcome of lawsuits, claims and legal proceedings, as well as other risks and
uncertainties, including but not limited to those detailed herein and from time to time in our Securities and Exchange Commission
filings. These forward-looking statements are made only as of the date hereof and the company assumes no obligation to update
any forward-looking statement.
© 2013 Rockwell Collins. All rights reserved. 3
What we do ‣ Communications
‣ Navigation
‣ Automated flight control
‣ Displays/surveillance
‣ Aviation services
‣ Integrated electronic
solutions
‣ Information management
systems
‣ Simulation and training
Communications and electronics products, systems and solutions for commercial aviation and military applications worldwide
2013 Sales: $4.61 Billion
52% 48% Government Commercial
Surface sol 10%
Avionics 58%
Comm products 24%
Business & regional ~46%
Wide-body IFE 4%
Air transport ~50%
Nav products 8%
© 2013 Rockwell Collins. All rights reserved.
Strong performance through market cycles Results since 2002
4
Revenue growth EPS growth Average ROIC
6% CAGR
12% CAGR
24%
Returned $5.7 Billion to Shareholders through
Dividends and Share Repurchases
© 2013 Rockwell Collins. All rights reserved.
How did we do it?
5
Balanced & diversified business model
Sustained investment in new products
Lean focus and operating model drive margin performance
GS 7% sales CAGR
CS 4% sales CAGR
1 2 3
Increased segment operating margins
650 bps
Invested
19% of sales in research and development
© 2013 Rockwell Collins. All rights reserved.
Historically returned > 70% cash to Shareowners through dividends & share repurchases
19%
54%
8%
19%
Dividend
Share repurchases
Acquisitions
Capital expenditures
Capital Allocation $ Billions 2007-2013
Cash generated 4.4$
Net increase in debt 0.8
Cash to deploy 5.2$
Dividend 1.0$
Share repurchase 2.8
Acquisitions 0.4
Capital expenditures 1.0
5.2$
6
© 2013 Rockwell Collins. All rights reserved. 7
Strengths of the Government Systems business
‣ 90%+ fixed price contracts
‣ Leverage commercial technologies
‣ Highly exportable products
‣ 75% of revenue from legacy platforms and products
Value Created:
>20% operating
margins
Strong cash flow
generation
© 2013 Rockwell Collins. All rights reserved.
‣ Civil airspace interoperability
‣ Comprehensive product lines
‣ Commercial platform positions
‣ Program execution acumen
‣ Incumbent positions
Avionics – characteristics
8
© 2013 Rockwell Collins. All rights reserved.
Avionics – drivers
9
‣ Tanker & Transport KC-46 C130 Upgrades
KC-10/KC-135 KC-390
‣ Rotary Wing CH-47 Chinook AW Family (AW 101/149/169/189)
UH-60 Blackhawk Civil Dual Use (ex. S-70/92, EC135)
‣ Fighters International F-15 Legacy Upgrades (EFA, Gripen, F-18)
F-35
‣ Special Mission /Unmanned Aerial Systems AWACS E-6
Shadow Predator
Manned/Unmanned Convergence
‣ Simulation and Training F-35 E-2D Hawkeye
UH-60 Blackhawk
© 2013 Rockwell Collins. All rights reserved.
‣ Characteristics: ‣ Large airborne installed base
‣ Broad Networked Connectivity capabilities
‣ Position on ground modernization program
‣ Communication Products: ‣ Airborne radios (ARC-210)
‣ Networked data links (Link 16, TTNT)
‣ Ground radios (JTRS HMS, SATCOM)
Communication Products
10
© 2013 Rockwell Collins. All rights reserved.
‣ Characteristics: ‣ Market leader in military GPS products
‣ Portfolio in transition
‣ Position on modernization program
‣ Navigation Products: ‣ Handheld GPS (DAGR, MicroDAGR)
‣ Modernized GPS User Equipment (MGUE)
‣ Miniaturized GPS products (MicroGRAM)
Navigation Products
11
© 2013 Rockwell Collins. All rights reserved.
‣ Characteristics: ‣ Specialized systems integration leveraging
core capabilities
‣ More entrepreneurial segment of business
‣ Surface Solutions: ‣ Firestorm targeting systems
‣ Electronic warfare (Signals Intelligence Receivers)
‣ Range system upgrades (CRIIS)
‣ Precision landing systems (JPALS)
Surface Solutions
12
© 2013 Rockwell Collins. All rights reserved. 13
Strengths of the Commercial Systems business
‣ Long-cycle business
‣ High barriers to entry
‣ Leveraged operating model
‣ Strong IP portfolio
Value Created:
Revenue growth
40-50% incremental
margins
© 2013 Rockwell Collins. All rights reserved.
Commercial Systems FY13 sales
Aftermarket
~ 41%
Wide-Body IFE
4%
OEM
~ 55%
Air
Transport
~ 50%
Bus. &
Regional
Jets
~ 46%
14
Wide-Body IFE
4%
© 2013 Rockwell Collins. All rights reserved.
Market outlook
‣ Air Transport
‣ Robust OEM backlog
‣ Increasing production rates
‣ Business & Regional
‣ Mixed market environment with
strength at high-end
‣ Light jet demand recovery
continues to lag
© 2013 Rockwell Collins. All rights reserved.
Boeing
Airbus
Irkut
COMAC
Mitsubishi
Bombardier
Gulfstream
Embraer
A350
2012 2013 2014 2015 2016 2017+
787 Rate Increase
MC-21
ARJ-21
MRJ*
CSeries* & Learjet 85*
G280* & G650
Legacy 500*
Piaggio Aero
C919
* Pro Line Fusion Platforms
Global 7000* & 8000*
737 Max Displays
Legacy 450*
16
New aircraft driving OEM revenue growth
Unannounced platforms
3 Platforms* 2 Platforms*
MPA
© 2013 Rockwell Collins. All rights reserved. 17
Growth drivers – Aftermarket
‣ Robust & increasing install base driving service & support demand
‣ Sparing for new aircraft
‣ Avionics & cabin upgrades
‣ Regulatory mandates
‣ Next Gen airspace modernization
© 2013 Rockwell Collins. All rights reserved. 18
Long-term value creation
Organic sales growth
Operating cash flow as percent of PAT
EPS growth
Return on invested capital
Mid-single digit
Low double-digit
100%-125%
20%-25%
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