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Products.
Technology.
Services.
Delivered Globally.
Investor PresentationAugust 2018
Safe Harbor Statement and
Non-GAAP Financial MeasuresSafe Harbor Statement
The statements in this release other than historical facts are forward-looking statements made in reliance upon the safe harbor of the Private Securities Litigation Reform Act of 1995. These
forward-looking statements are subject to a number of factors that could cause our actual results to differ materially from what is indicated here. These factors include but are not limited to
general economic conditions, the level of customer demand particularly for capital projects in the markets we serve, changes in supplier relationships or in supplier sales strategies or financial
viability, risks associated with the sale of nonconforming products and services, political, economic or currency risks related to foreign operations, inventory obsolescence, copper price
fluctuations, customer viability, risks associated with accounts receivable, the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, information
security risks, risks associated with substantial debt and restrictions contained in financial and operating covenants in our debt agreements, the impact and the uncertainty concerning the timing
and terms of the withdrawal by the United Kingdom from the European Union, and risks associated with integration of acquired companies, including, but not limited to, the risk that the
acquisitions may not provide us with the synergies or other benefits that were anticipated. These uncertainties may cause our actual results to be materially different than those expressed in
any forward looking statements. We do not undertake to update any forward looking statements. Please see our Securities and Exchange Commission (“SEC”) filings for more information.
Non-GAAP Financial Measures
In addition to the results provided in accordance with U.S. Generally Accepted Accounting Principles (“GAAP”) above, this presentation includes certain financial measures computed using non-
GAAP components as defined by the SEC. Specifically, net sales comparisons to the prior corresponding period, both worldwide and in relevant segments, are discussed in this presentation
both on a U.S. GAAP and non-GAAP basis. We believe that by providing non-GAAP organic growth, which adjusts for the impact of acquisitions (when applicable), foreign exchange
fluctuations, copper prices and the number of billing days, both management and investors are provided with meaningful supplemental sales information to understand and analyze our
underlying trends and other aspects of our financial performance. Historically and from time to time, we may also exclude other items from reported financial results (e.g., impairment charges,
inventory adjustments, restructuring charges, tax items, currency devaluations, pension settlements, etc.) in presenting adjusted operating expense, adjusted operating income, adjusted income
taxes and adjusted net income so that both management and financial statement users can use these non-GAAP financial measures to better understand and evaluate our performance period
over period and to analyze the underlying trends of our business. We have also excluded amortization of intangible assets associated with purchase accounting from acquisitions from the
adjusted amounts for comparison of the non-GAAP financial measures period over period.
EBITDA is defined as net income from continuing operations before interest, income taxes, depreciation and amortization. Adjusted EBITDA is defined as EBITDA before foreign exchange and
other non-operating expense and non-cash stock-based compensation, excluding the other items from reported financial results, as defined above. Adjusted EBITDA leverage is defined as the
percentage change in Adjusted EBITDA divided by the percentage change in net sales. We believe that adjusted operating income, EBITDA, Adjusted EBITDA, and Adjusted EBITDA leverage
provide relevant and useful information, which is widely used by analysts, investors and competitors in our industry as well as by our management in assessing both consolidated and business
segment performance. Adjusted operating income provides an understanding of the results from the primary operations of our business by excluding the effects of certain items that do not
reflect the ordinary earnings of our operations. We use adjusted operating income to evaluate our period-over-period operating performance because we believe this provides a more
comparable measure of our continuing business excluding certain items that are not reflective of expected ongoing operations. This measure may be useful to an investor in evaluating the
underlying performance of our business. EBITDA provides us with an understanding of earnings before the impact of investing and financing charges and income taxes. Adjusted EBITDA
further excludes the effects of foreign exchange and other non-cash stock-based compensation, and certain items that do not reflect the ordinary earnings of our operations and that are also
excluded for purposes of calculating adjusted net income, adjusted earnings per share and adjusted operating income. EBITDA and Adjusted EBITDA are used by our management for various
purposes including as measures of performance of our operating entities and as a basis for strategic planning and forecasting. Adjusted EBITDA and Adjusted EBITDA leverage may be useful
to an investor because this measure is widely used to evaluate a company’s operating performance without regard to items excluded from the calculation of such measure, which can vary
substantially from company to company depending on the accounting methods, book value of assets, capital structure and the method by which the assets were acquired, among other factors.
They are not, however, intended as an alternative measure of operating results or cash flow from operations as determined in accordance with U.S. GAAP.
Non-GAAP financial measures provide insight into selected financial information and should be evaluated in the context in which they are presented. These non-GAAP financial measures have
limitations as analytical tools, and should not be considered in isolation from, or as a substitute for, financial information presented in compliance with GAAP, and non-GAAP financial measures
as reported by us may not be comparable to similarly titled amounts reported by other companies. The non-GAAP financial measures should be considered in conjunction with the Condensed
Consolidated Financial Statements, including the related notes, and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in this release.
Management does not use these non-GAAP financial measures for any purpose other than the reasons stated above.
© 2018 Anixter Inc. 2
Key Priorities for Anixter
© 2018 Anixter Inc. 3
Our Focus
on the
Customer
Customer Access
Strategy
• Enable customers to access all solutions and expertise through
existing selling organization
• Enable customers to connect with Anixter though channels
they choose
Commitment to
Technology and
Innovation
• Specialists in highly technical solutions and new innovative
technologies
• Provide customers with state of the art electronic business
platforms to provide an enhanced customer experience
Services
• Provide broad and global service capabilities that reduce risk
and complexity for our customers
• Provide service solutions from simple project services to
complex long term program solutions
Will Drive
Improved
Results
Profitability
• Accelerate sales growth
• Increase gross margin
• Improve expense structure
• Deliver strong EBITDA and consistent long term performance
Enabling
Value
Creation
Capital Allocation
• Invest in strategies and initiatives to drive organic growth
• Invest in acquisitions that provide a strategic benefit and meet
our financial and risk criteria
• Return value to shareholders
Key Metrics
Anixter at a Glance
2017
Sales $7.9B
Adjusted EBITDA $404M
Adjusted EBITDA margin 5.1%
Countries ~50
Cities >300
SKUs >600k
Inventory >$1.0B
Warehouses/Branches >300
NSS52%
EES28%
UPS20%
Anixter 2017 Segment Mix
$7.9B
4© 2018 Anixter Inc.
Key Platform Strengths
1. Leading positions in attractive businesses
2. Diverse solutions across segments
3. Balanced sector approach minimizes exposure and risk
4. Strong, diverse and global suppliers and customers
5. Differentiators provide competitive advantage and barriers to entry
6. Financial strength and capital efficiency
5© 2018 Anixter Inc.
Leading Positions in Attractive Businesses
Network & Security
Solutions
Electrical & Electronic
Solutions
Utility Power
Solutions
Leading Position Global #1 Global Top 3 North America #1
Large ~$55B TAM ~$450B TAM ~$31B TAM
Growing 3 - 4% CAGR 2 - 3% CAGR ~4% CAGR
Fragmented ~7% Share <1% Share <4% Share
Diverse
and Global
END USERS
Commercial, Data Center, Defense, Education, Electronics, Financial
Services, Government, Healthcare, Industrial, Marine, Mining, Oil and Gas,
Retail, Semi-conductor, Technology, Transportation, Utility
CHANNELS
Contractors, Integrators, EPCs
$ Billions
6© 2018 Anixter Inc.
7© 2018 Anixter Inc.
Diverse Solutions Across Segments
Wireless
ProfessionalA/V
Power and Cooling Electrical/Electronic
Wire and Cable
Lighting
Pole line Hardware
Electrical Wire and CableMRO
NSS: 52%of 2017 Sales
EES: 28%of 2017 Sales
UPS: 20%of 2017 Sales
Data Centers & Network
Infrastructure 60%
Security 40%
IOU60%
Public Power40%
Commercial & Industrial
65-70%
OEM30-35%
Data Center
SecurityTransformers
Switchgear
8© 2018 Anixter Inc.
Balanced Sector Approach Minimizes Exposure and Risk
Channels
Data Contractors
Network Integrators
Pro A/V Contractors
Security Dealers
Security Integrators
Wireless Integrators
Customer Verticals
Architects/Consultants
Data Centers
Education
Financial Services
Healthcare
Stadiums
State and Federal Governments
Retail
Technology
Channels
Electrical Contractors
EPCs
Panel Builders and Harness Assemblers
Customer Verticals
Alternative Energy
Data Centers
Industrial Automation
Industrial Manufacturing
Oil, Gas and Petrochemical
Marine/Shipbuilding
Mining
Municipalities
Original Equipment Manufacturers
Transportation
Water/Waste Treatment
NSS: 52%of 2017 Sales
EES: 28%of 2017 Sales
UPS: 20%of 2017 Sales
Customer Verticals
Investor Owned Utilities
Public Power Utilities
Channels
Utility Co-ops
Generation & Transmission Cooperatives
Municipalities
Utility Contractors
Data Centers & Network
Infrastructure 60%
Security 40%
IOU60%
Public Power40%
Commercial & Industrial
65-70%
OEM30-35%
Strong, Diverse and Global Suppliers and Customers
CustomersSuppliers
9© 2018 Anixter Inc.
Differentiators Provide Competitive Advantage and Barriers to Entry
© 2018 Anixter Inc. 10
Global Capabilities with Local Presence
• International Deployment Experts
• Local Teams
• Global Support
• Deployments Services
• Product Enhancement Services
Customized and Scalable Supply Chain Solutions
• Save time, reduce costs, increase efficiency and mitigate risk
• Sourcing
• Inventory Management
• Product Enhancement and Packaging
• Global Logistics
• E-Commerce
Technical Expertise
• World class demonstration facilities
• Expertise in emerging technologies
• Application engineering and compliance
• Metering labs for power utilities
• Infrastructure Solutions LabSM
and Solutions Briefing Centers
• Anixter UniversityTM online courses
Differentiators Provide Competitive Advantage and Barriers to Entry
Global Capabilities with Local Presence
3,600+Technical Sales
Specialists, Multi-Level
Technical Support
135,000+Customers
$1.0 Billion+ Inventory
600,000+Products~50 Countries
35+ Currencies
20+ Languages
Approximately 310Warehouses
and Branches
Worldwide
11© 2018 Anixter Inc.
• Reduce time spent
on the order cycle
• Provide proven,
quality-controlled
products
• Manage
manufacturer
relationships and
contracts
• Access competitive
pricing and product
standardization
• Reduce non-contract
buying
• Improve
working capital
• Increase speed
to market
• Decrease write-offs
from scrap, overruns
and obsolescence
• Reduce product
shortages
• Streamline
warehouse
investment
• Provision inventory
• Eliminate
nonproductive labor
• Increase speed
to market
• Reduce variable
costs
• Reduce packaging
waste
• Streamline freight
costs
• Improve on-time
delivery
• Reduce lead times
• Optimize
international
transaction costs
• Decrease
transaction
processing time
and cost
• Improve consistency
and adherence to
specification
• Increase operational
efficiencies
© 2018 Anixter Inc.
Differentiators Provide Competitive Advantage and Barriers to Entry
Customized and Scalable Supply Chain Solutions
12
Differentiators Provide Competitive Advantage and Barriers to Entry
World-Class Demonstration Facilities and Expertise in Emerging Technologies
Anixter Infrastructure Solutions LabSM
• Certified by Underwriters Laboratories®
• Located at our headquarters in Glenview, IL
– Proof of concept testing
and solutions building
– Data infrastructure product testing
– Independent testing
– Physical security testing
– Industrial Communications
and Control module
• Equipped to provide virtual tours
around the globe
Leadership Roles in Industry Associations
• Telecommunications Industry Association (TIA)
• International Organization for Standardization (ISO)
• Institute of Electrical and Electronics Engineers (IEEE)
• Open Network Video Interface Forum (ONVIF)
• Building Industry Consulting Services International
(BICSI)
• Security Industry Association (SIA)
• Control System Integrators Association (CSIA)
• National Electrical Manufacturers Association (NEMA)
• National Association of Electrical Distributors (NAED)
• Edison Electric Institute (EEI)
• National Rural Electric Cooperative (NRECA)
Building
Technologies
Data Center
and Enterprise
Networks
Physical
SecurityGear, Lighting
and Controls
Technical Certifications
• ASIS CPP (Certified Protection Professional)
• More than 90 Registered BICSI RCDDs
• PSPs (Physical Security Professional Certification)
• CCNAs (Cisco Certified Network Associate)
• QSSP
Solutions Briefing
Centers
• Woburn, MA
• Indianapolis, IN
• Atlanta, GA
• Sao Paulo, Brazil
• Bracknell, U.K.
13© 2018 Anixter Inc.
Financial Strength and Capital Efficiency
Counter-Cyclical Free Cash Flow Provides
Financial Flexibility
Generate Strong Free Cash Flow Throughout the Economic Cycle
Free cash flow: Defined as net cash provided by operating activities less capital expenditures. Free cash flow is not restated for acquisitions and divestitures
14
Financial Strength and Capital Efficiency
Approaching Target Capital Structure
*2015 includes 12 months of Power Solutions earnings on a pro forma basis
Target range:
2.5 - 3.0x
Target range:
45 - 50%
15
Acquired Security Businesses Australia
and New Zealand in 2Q18
Transaction Summary for Combined Businesses
Acquired Companies: Central Security Distributors ("CSD"), Atlas Gentech and Inner Range
Purchase price $149.9 million
Twelve-month revenues $114 million
Twelve-month adjusted EBITDA $20 million
Consideration 100% cash
Financing Available cash and borrowing capacity
Accretion$0.20 - $0.22 in the first full year of operation, exclusive of transaction and integration costs
Strategic Rationale
Enhances our competitive position, bringing new, innovative products and solutions to Anixter that we believe will be valued by both new and existing customers
Acquired businesses gross and operating margins are higher than Anixter's
Acquisition rate of return is above Anixter's risk-adjusted average cost of capital
16
Compelling Customer and Investor Value Proposition
Customer value proposition
– Reduce cost, complexity and risk in our customers’ supply chains
– Key Competitive Differentiators:• Global capabilities with local presence• Customized and scalable supply chain solutions• Technical expertise
Investor value proposition
– Leading positions in attractive businesses
– Competitive advantage and barriers to entry
– Financial strength and capital efficiency
– Executing strategies to accelerate sales and improve profitability
– Committed to delivering shareholder value
17© 2018 Anixter Inc.