Upload
brlam10011021
View
9
Download
3
Tags:
Embed Size (px)
DESCRIPTION
invstor day
Citation preview
2014 Investor DayWelcome and Overview
Gregory KennyPresident & Chief Executive Officer
April 3, 2014
2
Safe Harbor
Safe HarborSome slides and comments included herein, particularly related to estimates, comments or expectations about future performance or business conditions, may contain forward-looking statements. Important factors that may cause actual results to differ materially from the content of the forward-looking statements are described in our safe harbor caution. Please review our safe harbor caution in our Form 10-K filed with the SEC on March 3, 2014 and subsequent filings with the SEC.
Adjusted EBITDA and Operating IncomeThe Company is providing certain supplemental Adjusted EBITDA (defined as earnings before interest, taxes, depreciation, amortization, other expense/income, preferred stock dividends and extraordinary, nonrecurring or unusual charges and other certain items) and Adjusted Operating Income (defined as operating income before extraordinary, nonrecurring or unusual charges and other certain items) comparisons, which are non-GAAP financial measures. These Company defined adjusted measures are being provided because management believes they are useful in analyzing the underlying operating performance of the business. A reconciliation of Adjusted EBITDA to GAAP Net Income and Adjusted Operating Income to Reported Operating Income has been provided in the Appendix to the Financial Update Presentation.
3
Time Description Presenter
1:00 – 1:30 Welcome & Overview Gregory Kenny, President & CEO
1:30 – 2:00 Financial Update Brian Robinson, EVP, CFO
2:00 – 2:20 Q&A / Break
2:20 – 3:00 Turnkey Project Businesses
Submarine Power/Communications Guenther Schoeffner, General Manager NSW - Germany
Underground EHV/HV Marie Therese Blanot, General Manager Silec - France
3:00 – 3:30 Transportation Wire & Assemblies (TW&A) Greg Ulewicz, Vice President & General Manager
Global Business Transportation Wire & Assemblies
3:30 – 4:15 Americas Greg Lampert, EVP, President & CEO, The Americas
4:15 – 4:30 Concluding Remarks Gregory Kenny, President & CEO
4:30 – 5:00 Q&A
5:00 – 6:00 Reception
Agenda
4
Deep Seasoned Management TeamGlobal Operating Committee
Brian Robinson
Executive Vice President, Chief Financial Officer
Peter Campbell
Executive Vice President, President & CEO
Asia Pacific
Emmanuel Sabonnadiere
Executive Vice President, President & CEO
Europe & Mediterranean
Gregory B. Kenny
President & Chief Executive Officer
General Cable
Greg Lampert
Executive Vice President, President & CEO
The Americas
Bob Siverd
Executive Vice President, General Counsel &Corporate Secretary
Sonya Reed
Senior Vice President,Chief Human
Resources Officer
5
Leader in $170 Billion (1) Global Wire and Cable Industry With Strong Growth Potential
Solid financial position and balance sheet
Well positioned in growth markets
Balanced capital deployment – committed to delivering shareholder value
Diversified and balanced portfolio serving nearly every wire and cable application
1 Source: CRU January 2014
Deep, seasoned management team
Culture of continuous improvement driving productivity, asset optimization and costs out of the business
6
Diversified Revenue Stream
Electric Utility34%
Construction24%
Electrical Infrastructure26%
Communications11%
Americas62%
Sub-Saharan Africa3%
Europe & Mediterranean
25%
Asia Pacific10%
Revenue by Business Unit Revenue by Region
Rod Mill Products 5%
Engaged in the development, design, manufacture, marketing and distribution of copper, aluminum and fiber optic wire and cable products for the electric utility, electrical infrastructure (including specialty), construction and communications markets
7
TECHNOLOGYCENTERS09MANUFACTURING
LOCATIONSIN 26 COUNTRIES57 SALES REPRESENTATION
& DISTRIBUTION WORLDWIDE
LARGEST GLOBAL WIRE & CABLE MANUFACTURER3rdALUMINUM
& COPPERROD MILLS13
AMERICASREGION62% of General Cable’s Sales7,990 Associates35 Manufacturing Locations
PRODUCT MIX30% Electrical Infrastructure26% Electric Utility23% Construction15% Communications6% Rod
ASIA PACIFICREGION10% of General Cable’s Sales1,840 Associates10 Manufacturing Locations
PRODUCT MIX4% Electrical Infrastructure
53% Electric Utility34% Construction5% Communications4% Rod
EUROPE &MEDITERRANEAN
REGION25% of General Cable’s Sales
4,250 Associates9 Manufacturing Locations
PRODUCT MIX22% Electrical Infrastructure
47% Electric Utility24% Construction
7% Communications
SUB-SAHARAN AFRICAREGION
3% of General Cable’s Sales525 Associates
3 Manufacturing Locations
PRODUCT MIX38% Electrical Infrastructure
13% Electric Utility7% Construction
42% Rod
Global FootprintElectric Utility | Electrical Infrastructure | Construction | Communications | Rod
8
Clear Strategic FocusA comprehensive approach to driving profitable, long-term performance and delivering value
Capture Global Opportunities
Capture Global Opportunities
• Faster Growing Developing Regions
– Population growth, greater demand for energy resources
• Energy infrastructure
– Power Generation
– Energy Transmission and Distribution
• Construction
• Demand for Greater Communication Bandwidth and Global Connectivity
• Product Innovation
Productivity ImprovementProductivity
Improvement• Execution of Greenfield
turnaround plans
• Further asset optimization in developed markets
• Pursuit of excellence through continuous improvement –Safety, Quality, Service
• Accelerated initiatives and sharing of best practices through Global Councils and newly created global roles/positions
Balanced Capital Deployment
Balanced Capital Deployment
• Return of capital to shareholders
• Maintain stable capital structure and debt profile with the liquidity to support growth and movements in working capital
• Capital spending below depreciation
• Highly disciplined/selective M&A
Global Opportunities
101 Source: WEO Outlook 2013
Energy Usage Grows asCountries Develop
Primary Energy Demand in Select Regions and Share o f Growth (1)
Geographic growth strategy emphasizes investment in developing regions with a focus on energy infrastructure
11
Power Sector Cumulative Investment by Type from 2013 - 2035(1)
1 Source: WEO Outlook 2013
Energy Infrastructure
General Cable offers premium products and solutions servicing the entire Power Sector; approximately 50% of our portfolio is levered towar d energy-related investment
• Annual Power Sector investment – $740 billion/year
• New generating capacity represents approx. 58% or $430 billion/year
• Electricity grid development and reinforcement represents the balance; approx. 42% or $310 billion/year
Annualized Investment (1)
12
Existing & Additional Kilometers of T&D lines (1)
1 Source: WEO Outlook 2013
Transmission & Distribution Cabling and Systems
• Power distribution networks represent 90% of existing networks globally
• Distribution also represents roughly 85% of growth during the projection period
• The aging of mature grids in North America and Europe remain an ongoing opportunity with estimates suggesting 50-60% will need to be reinforced or replaced
General Cable has the full range of products and se rvices to meet the needs of utilities around the world
13
• Fossil FuelsOil, Gas, and Coal are expected to remain the most important energy source at approximately 60% as a percentage of global energy usage
• RenewablesEstimated to increase rapidly over the projection period growing more than 2.5x and accounting for about 80% of the cumulative investment or approximately $6.5 trillion resulting in an estimated $260 billion investment for the integration of new T&D lines
• Nuclear437 reactors in operation today generate 394 GW – projections estimate nuclear generation increases to 580 GW
Installed capacity by source (1)
1 Source: WEO Outlook 2013
Power GenerationFossil Fuels, Renewables, Nuclear
General Cable is a leading global provider of speci alized cables for the power generation markets
14
Construction spending increases in 2014 (1)
1 Source: IHS Global Construction Outlook 2014
Construction activity
Construction activity is an important driver to app roximately 40% of the Company’s product portfolio including service cable, building wire, e lectric utility distribution cable, and numerous electrical infrastructure and communications produc ts
Resi Non-ResiWorld 4.0% 4.5%
N. Am 5.7% 5.1%
Asia Pac 5.3% 5.7%
ME & A 3.2% 4.1%
E. Eur 2.4% 2.8%
W. Eur 1.3% 2.2%
S. & C. Am 3.1% 3.9%
IHS Construction Outlook2013 – 2018 CAGR (1)
15
Demand for Greater Communication Bandwidth and Global Connectivity
General Cable participates in all major segments of the Global Communications Infrastructure Market
Short Reach Data (<200 meters per connection)
• Fiber and copper based links for short reach connections within a premise or building
Long Reach Data and Telephony (>1000 meters)
• Fiber and copper based links used for applications such as Fiber to the Home, Copper Central Office, and Long Distance Telephony and Data Connections
Broadcast and Electronics Cables (Up To 1000 meters)
• Mainly copper based connections used in applications such as Alarm and Security, Equipment and Devices, and Low Voltage Signaling
15%
56%
29%
Short Reach Data
Long Reach Data and Telephony
Broadcast and Electronics Cable
Segment Description Global Communications Market
16
$-
$250
$500
$-
$2,000
$4,000
$6,000
FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13
Ad
just
ed
EB
IT (
in m
illi
on
s)
Rev
enue
(in
mill
ions
)
Business Cycle Poised to Accelerate
Through the consistent execution of our growth stra tegy, trough to trough operating results were more than 3x better in 2009 despite the challe nging global operating environment that has been far different than the “normal” business cyc le
Positioned to Capture Opportunities
18
Businesses Aligned With End Market Growth Drivers
Overall, an important underlying influence on these end markets are consistent and healthy GDP rates and construction cycles
Electric Utility
• Electricity consumption • Industrialization of emerging economies, urbanization• Legislation, mandated quality and reliability, investment incentives for utilities• Infrastructure expansion and replacement• Electricity grid integration• Incorporation of renewable energy, particularly faster growing offshore wind and solar• Construction activity
Electrical Infrastructure
• Industrialization of emerging economies• Global industrial production• Terrestrial and offshore oil and gas, development of renewable energy sources• Mining, transit, marine
Construction• Non-residential construction• Population growth• Housing starts
Communications
• Greater bandwidth requirements as result of growing number of internet users• Non-residential construction• Infrastructure spending on upgrade and expansion in developing countries• Wireless alternatives
19
Capturing Global Opportunities
Dedicated to the pursuit of excellence and exceedin g customer expectations
Quality
Global Sales – One Company
Regional Alignment
Local Relationships
Breath of Product
Service
Leverage Supply Chain
Customer Driven Organization
20
Product Innovation
Process & Tools
Material Technology Resources New
Products
Globally approximately 12% of products sold today h ave been launched or refreshed over the past three years
Productivity Improvement
22
Productivity ImprovementsOperational Focus
• Enhancing ROCE through productivity improvements and asset optimization– Evaluating consolidation of production lines and/or facilities particularly
in developed markets
• Announced permanent closure of two electric utility plants in North America
– Turnaround initiatives of greenfield investments
• India, Mexico, Peru, South Africa and product line expansion in Brazil
• Key Performance milestones to be monitored and evaluated
– Submarine turnkey project business performance improving under new leadership in 2013
• Effectively partnering in offshore wind projects leveraging joint assets/resources
• Renewed focus on subsea communications cable and systems market
23
Execution of Greenfield turnaround plans and further asset optimization in developed markets
Supply Chain
Sourcing
Logistics
Manufacturing
Acceleration of Lean initiatives
Cell Design & Refurbishment
Sales
Commercial Realignment
Standardization
Executing on actionable plans in the following area s
Comprehensive approach driving performance improvem ent in emerging and developed markets
24
Lean Toolset Driving Safety, Quality, Service
• A passionate belief that any work process can be simplified
• A continuous improvement methodology that promotes engagement from all using a common toolset
• An approach that surfaces problems (opportunities) as a means to optimizing “value”
• Continuous drive to identify and eliminate waste
• Safety record (ORIR) < 1 vs. – All industry average of 5.2
• Pursuit of perfect product quality• Inventory reduction > $100M
(over time)• Service improvement • Entitlement capacity gained
without capital outlay• Controllable cost reductions
keep us competitive
Lean Toolset Outcomes
After offsetting economic headwinds, the Company ta rgets $10 million in Lean cost savings annually
25
Safety
Technology
Sourcing
Manufacturing
Communi-cations
Products
Construction
Corporate Social
Responsi-bility
Global Councils
Reinforcing our Global ONE Company Culture Accelerating the sharing of best practices globally
• Launched Wired As OneSM: Strength at the Core
• Refreshed Environmental, Health & Safety Policy
• Enhanced Talent Recruitment and Development Systems
• Global Councils and newly created global roles are reinforcing our Global One Company Culture while facilitating the rapid sharing of best practices – focused on improving daily execution and working capital management
Our Operating Philosophy: Act with the speed and ag ility of a small company but with the strength and the power of a large company
Balanced Capital Deployment
27
Solid Financial Position And Balanced Capital Deployment
High commitment to returning capital to shareholder s; launched a comprehensive balanced capital deployment program in 2013 including a quar terly dividend and buyback; expects to return $95 million to shareholders over the last 15 months
• Return of capital to shareholders –dividends and share repurchase programReturn to Shareholders
Maintain capital structure
Capital Investment
Acquisitions
• Maintain stable capital structure and debt profile with the liquidity to support growth and movements in working capital
• Capital spending below depreciation
• Highly disciplined/selective M&A
28
Highly Disciplined and Successful M&A• In 1998 General Cable = $1.1 billion manufacturer of communications cables, building
wire, electrical cords, cordsets and harnesses with 2% of its revenue generated outside of the U.S. and Canada
• Transformed into a global manufacturer of electric utility, electrical infrastructure, construction and communications cables - over $6.4 billion in annual revenue with 62% generated in Americas
• 2012 acquisitions of Alcan Cable North America, Alcan Cable China, Prestolite Wire, Procables (Colombia) and Delphia - performed above investment case
• Industry is under stress and there are many sellers in the market today but we are employing a highly disciplined approach to our M&A program
29
Concluding Remarks
• Clear Strategic Focus• Diversified and Balanced Portfolio• Strong Position in Growth Markets• Productivity Improvements Being Implemented• Commitment to Delivering Shareholder Value• Deep, Seasoned Management Team
Appendix
31
Electric Utility$2.2 billion or 34% of 2013 total sales
BARE OVERHEAD CONDUCTORS • LOW-VOLTAGE POWER CABLES • MEDIUM-VOLTAGE POWER CABLES •
UNDERGROUND HIGH- & EXTRA-HIGH-VOLTAGE CABLES & SOLUTIONS • SUBMARINE TRANSMISSION & DISTRIBUTION
Our cables carry electricity across the world—throug h the air, underground and under the sea. Increasing demand for energy is accelerating investment in exploration, extraction, power generation, transmission and distribution—whether based on coal, natural gas, oil, nuclear, wind, solar or water
32
Electric Infrastructure$1.7 billion or 26% of 2013 total salesINDUSTRIAL • PORTABLE CORD PRODUCTS • INDUSTRIAL CABLES • RENEWABLE CABLES
SPECIALTY-AUTOMOTIVE • HARNESSES & ASSEMBLIES • MILITARY • MINING • NUCLEAR •
OIL AND GAS • TRANSIT/LOCOMOTIVE/RAILWAY • ELECTRONICS
Our cables provide power to keep production flowing , assembly lines moving and equipment and engines running. We offer the broadest line of cables in the industry including high-performance industrial instrumentation, power and control cables serving the full spectrum of requirements for the Industrial Distribution marketplace, power generation, refining and petrochemical, factory automation, oil rigs, cars, trains, public venues and countless special applications such as military, nuclear, marine and mining
33
Construction$1.6 billion or 24% of 2013 total sales ALUMINUM ALLOY FEEDER & ARMORED CABLES • COPPER FEEDER CABLES & BUILDING WIRE
Our cables provide critical power from the ground u p for residential and non-residential projects alike. Whether its an office building, a hospital, a school, a factory, an entertainment venue, a housing development, a multi-family unit or an entire city—whatever the project, we have the products that provide the necessary power
34
Communications$0.7 billion or 11% of 2013 total sales
Our cables keep information flowing around the worl d. We meet the high-speed high-bandwidth needs of global communications networks including fiber optic submarine communications cables, copper, fiber aerial and underground products, enterprise cables, sophisticated system solutions, professional broadcast and audio/visual systems solutions
BROADCAST, PROFESSIONAL & COMMERCIAL A/V • FIBER OPTIC • PREMISE •
TELECOMMUNICATIONS • TELECOM “MINI-SUB” CABLES
35
Deep Seasoned Management TeamGlobal Operating Committee
• Greg Kenny – 1975 Foreign Service Officer, US Dept. of State, Washington, D.C. and South America. 32 years with General Cable. Greg serves on the Boards of Cardinal Health, Ingredion (Corn Products), United Way Executive Committee, Federal Reserve Bank of Cleveland, Cincinnati Branch.
• Brian Robinson – Joined Deloitte & Touche, LLP in1991 working in U.S and London for global clients. CPA certification in 1993. Brian has 15 years of progressive leadership within General Cable finance, accounting and treasury functions.
• Greg Lampert – Chemical engineering degree with early experience with Dow Chemical and Cintas Corporation. Joined General Cable in 1998. Greg serves on the Board of Xtek.
• Peter Campbell – Chemical Engineer who joined General Cable in 2010. Two decades of leadership experience in Asia as a senior executive with BP Chemical and FosrocInternational. Peter is fluent in English and French.
• Emmanuel Sabonnadiere – A PhD physicist with extensive experience in the electrical industry. Emmanuel joined General Cable 6 years ago directly building upon his work at Schneider Electric and Alstom Transformers. He speaks English and French.
• Sonya Reed – 14 years experience with Zurich Financial Services, a global insurance company. Human Resource experience in U.S., Europe and Latin America. Joined General Cable as SVP Human Resources in 2011. Sonya is fluent in English and Spanish.
General Cable Corporation