Rogers Corporation · NYSE:ROG
Rogers — Investor Presentation (2016)
48 slides from Rogers's investor presentation, Apr 23, 2016
Slide 1: Investor Presentation Q4-2015
Investor Presentation Q4‐2015
Slide 2: Forward Looking & Cautionary Statements
Forward Looking & Cautionary Statements Safe Harbor Statement Statements in this presentation other than historical facts, including without limitation statements regarding the Company’s business strategy, future results of operations and financial position, and plans and objectives of management, a
Slide 3: Why Invest in Rogers?
Why Invest in Rogers? Growing with Leading in Leveraging Driving Delivering Discipline Technology Megatrends Excellence Results Multi‐pronged Leader in Attractive Operational Track record of strategy driving engineered markets with excellence growth in sustainable materials for global delivering val
Slide 4: Rogers at a Glance
Rogers at a Glance Global leaders in engineered materials helping power, protect, connect our world Ticker NYSE ROG Heritage Est. 1832; 184 years of operations 2015 Sales $641M; up 5% YOY Employees 2,800 employees worldwide Global Scale Headquarters in Rogers, CT 6 Countries 21 Manufacturing facilit
Slide 5: Global Operations & Revenues
Global Operations & Revenues North America Europe Asia Mfg. in AZ, CT, DE, IL Mfg. in Belgium, Mfg. in China, Germany, Hungary Korea, Japan (JV) 2015 Sales by Region 2% Asia 22% USA 51% Europe 25% Other 75% of sales outside the US, serving regional customers manufacturing for global markets 5
Slide 6: Our Transformation Journey
Our Transformation Journey Driving future growth 2016 Expanding operational and excellence beyond Building a results‐oriented Streamlining & culture restructuring Investing in capabilities & talent 2012 Building a foundation for sustainable growth 6
Slide 7: Multi-Pronged Strategy for Sustainable Growth
Multi‐Pronged Strategy for Sustainable Growth Our Global leaders in engineered materials helping power, protect, connect our world Focus Our Market‐Driven Innovation Synergistic Operational Strategy Excellence Organization Leadership M&A A Winning Team: Top Talent, Engaged Employees, Performance Cul
Slide 8: Transformation Driving Results
Transformation Driving Results 20.6% 20.7% EBITDA* +260 bps 18.1% 14.6% 13.7% Operating Margin** 11.7% +200 bps $611 $641 ($ in millions) $538 Revenue +9% CAGR 2013 2014 2015 *EBITDA is defined as net income excluding interest, income taxes, depreciation, amortization, restructuring, non‐cash stock‐
Slide 9: 3 Strategic Business Segments
3 Strategic Business Segments Advanced Connectivity Solutions (ACS) • High performance materials • Mission‐critical applications Elastomeric Material Solutions • Technology innovation (EMS) leadership • Strong, collaborative customer Power Electronics Solutions relationships (PES) Focused on unique
Slide 10: Advanced Connectivity Solutions Overview
Advanced Advanced Connectivity Solutions Overview Connectivity Solutions Solutions Circuit materials enabling high‐ performance and high‐reliability Portfolio connectivity Global Mfg. China, Belgium, US 2015 Results $268M Revenue, up 11% YOY *Non‐GAAP $50M Operating Income, up 8% YOY 2015 Key Segmen
Slide 11: Elastomeric Material Solutions Overview
Elastomeric Elastomeric Material Solutions Overview Material Solutions Solutions Elastomeric material solutions for critical cushioning, sealing, impact protection & Portfolio vibration management Global Mfg. US, China, Korea 2015 Results $181M Sales, up 4% YOY *Non‐GAAP $23M Operating Income, down
Slide 12: Power Electronics Solutions Overview
Power Power Electronics Solutions Overview Electronics Solutions Solutions Ceramic substrates for power modules, laminated busbars for power inverters, and Portfolio micro‐channel coolers Global Mfg. Germany, Belgium, China, Hungary 2015 Results $150M Sales, down 13% YOY *Non‐GAAP $6M Operating Inco
Slide 13: Megatrends Accelerating Growth
Megatrends Accelerating Growth Clean Safety Internet Energy & Protection Connectivity Rogers’ Business Segment power protect connect Advanced • Advanced Driver • Wireless & Wired Connectivity Assistance Systems Infrastructure Solutions • Antennas • Servers & Routers 42% • Portable Electronics Elasto
Slide 14: Clean Energy Megatrend Growth Drivers
CLEAN ENERGY Megatrend Growth Drivers • Market Growth Drivers: – Growing demand for energy‐ EV/HEV efficient industrial power, 15% Powertrains HEV/EV, X‐by‐Wire, solar, wind and smart grid Vehicle • Rogers’ Solutions: 13% Electrification – Enabling energy‐efficient motor drives (PES) – HEV/EV power
Slide 15: Safety & Protection Megatrend Growth Drivers
SAFETY & PROTECTION Megatrend Growth Drivers • Market Growth Drivers: – Rapid adoption of automotive radar‐based driver assistance China Automotive systems (ADAS) 36% Radar Systems – Global urbanization & growing middle class driving demand for consumer safety Global Automotive • Rogers’ Solutions:
Slide 16: Internet Connectivity Megatrend Growth Drivers
INTERNET CONNECTIVITY Megatrend Growth Drivers Market Growth Drivers: – Global wireless network infrastructure expansion; new and retrofits – Global demand for mobile video, internet Mobile Data Traffic 57% speed and bandwidth – Network densification and coverage improvements – Antennas increasingly
Slide 17: Accelerating Speed of Innovation
Accelerating Speed of Innovation • Focused on customer‐centric collaboration • Partnering with global research universities • Increasing technology bench strength • Developing next‐generation solutions • Optimizing new product development process 17
Slide 18: Pursuing Disciplined M&A
Pursuing Disciplined M&A M&A Strategy 2015 Arlon Acquisition Strategic Fit • Strong strategic fit • Technology/portfolio expansion • Market position (e.g. niche) • Broadens portfolio for ACS and EMS • International expansion • 7.3x EBITDA multiple opportunity • Business model • Earnings contribution
Slide 19: Operational Excellence Driving Execution & Performance
Operational Excellence Driving Execution & Performance Operational Excellence Model Delivering Value • Customer Loyalty • 96% YOY improvement in On‐Time Delivery • Shareholder Value • Gross margins up 390 bps ∙ • Employee Engagement: • >30% YOY improvement in key Safety metrics* *Safety Metrics refe
Slide 20: Summary: Positioned Well for Growth
Summary: Positioned Well for Growth • Strategy driving sustainable growth and profitability • Exciting growth opportunities aligned with global megatrends – Future growth initiatives focused on E‐mobility and Internet of Things • Focused on long‐term sustainable growth while balancing near‐term mark
Slide 21: Financial Results
Financial Results Helping power, protect, connect our world
Slide 22: Key Financial Results
Key Financial Results Financial 2011 2012 2013 2014 2015 From Continuing Operations Sales $ (in millions) $548.3 $498.8 $537.5 $610.9 $641.4 Gross Margin % 32.8% 32.0% 35.1% 38.4% 36.7% Net Income % 8.2% 13.5% 7.1% 8.7% 7.2% Diluted EPS $2.69 *$3.97 **$2.15 $2.86 $2.48 Financial Position Inventory W
Slide 23: Gross Margin Improvement
Gross Margin Improvement Margin up 390 bps due to operational excellence initiatives 40.0% 38.0% 36.7% Gross Margin % 36.0% 34.0% 32.8% 32.0% 30.0% 28.0% 2011 2012 2013 2014 2015 23
Slide 24: 2015 Financial Highlights
2015 Financial Highlights 2015 Full Year Q4‐2015 • Record FY net sales of $641.4 • Record Q4 net sales of $152.9 million, up 5.0% million, up 3.5% • Operating margin of 13.7% (non‐ • Operating margin of 10.8% (non‐ GAAP*), down 90 basis points GAAP*), down 380 basis points (GAAP operating margin of
Slide 25: Summary of Q4-2015 Results - Historical Measures
Summary of Q4‐2015 Results ‐ Historical Measures Q4 '15 Q4 '14 $ in Millions, except EPS Actual Actual Change Revenue $152.9 $147.7 $5.2 Growth % 3.5% Operating Income* $16.5 $21.6 ($5.1) Operating Margin %* 10.8% 14.6% (380bps) Non‐GAAP EPS* $0.69 $0.91 ($0.22) *Adjusted for restructuring and other
Slide 26: Summary of Q4-2015 Results - Go Forward Measures
Summary of Q4‐2015 Results – Go Forward Measures Q4 '15 Q4 '14 $ in Millions, except EPS Actual Actual Change Revenue $152.9 $147.7 $5.2 Growth % 3.5% Adjusted Operating Income* $21.3 $25.0 ($3.7) Adjusted Operating Margin %* 13.9% 16.9% (300bps) EBITDA* $28.2 $31.2 ($3.0) EBITDA %* 18.4% 21.1% (270
Slide 27: Revenue Q4-2015
Revenue Q4‐2015 Revenue Bridge Q4‐2014 Actual vs. Q4‐2015 Actual ($M) Q4 revenue in line with 10/29/15 guidance of $145M ‐ $155M 27
Slide 28: Adjusted Operating Income Q4-2015
Adjusted Operating Income* Q4‐2015 Adjusted Operating Income* Bridge Q4‐2014 Actual vs. Q4‐2015 Actual ($M) 16.9% 13.9% *Adjusted for restructuring, non‐cash stock‐based compensation, amortization and other discrete special charges. See reconciliation table on slide 39. 28
Slide 29: Segment Financials - Q4-2015
Segment Financials – Q4‐2015 ($ in millions) Operating Income Margin** Q4 2014 Q4 2015 ACS 18% 16% EMS 15% 10% PES 8% 2% 15.6%** *At constant foreign exchange rates. **Adjusted for restructuring and other discrete special charges. See reconciliation table on slides 45‐47. 29
Slide 30: Adjusted EPS Q4-2015
Adjusted EPS* Q4‐2015 Adjusted EPS* Bridge Q4‐2014 Actual vs. Q4‐2015 Actual Q4 EPS (less special adjustments) of $0.69, exceeded 10/29/15 guidance of $0.53‐$0.63 *See reconciliation table on slide 44. 30
Slide 31: Summary of Full Year 2015 Results - Historical Measures
Summary of Full Year 2015 Results ‐ Historical Measures FY '15 FY '14 $ in Millions, except EPS Actual Actual Change Revenue $641.4 $610.9 $30.5 Growth % 5.0% Operating Income * $87.6 $88.9 ($1.3) Operating Margin % * 13.7% 14.6% (90bps) Non‐GAAP EPS* $3.08 $3.41 ($0.33) *Adjusted for restructuring
Slide 32: Summary of FY 2015 Results - Go Forward Measures
Summary of FY 2015 Results – Go Forward Measures FY '15 FY '14 $ in Millions, except EPS Actual Actual Change Revenue $641.4 $610.9 $30.5 Growth % 5.0% Adjusted Operating Income * $108.1 $102.5 $5.6 Adjusted Operating Margin % * 16.9% 16.8% 10bps EBITDA * $132.8 $125.7 $7.1 EBITDA % * 20.7% 20.6% 10
Slide 33: Segment Financials - Full Year 2015
Segment Financials – Full Year 2015 ($ in millions) Operating Income Margin** 2014 2015 ACS 19% 19% EMS 15% 13% PES 5% 4% 15.6%** *At constant foreign exchange rates **Adjusted for restructuring and other discrete special charges. See reconciliation table on slides 45‐47. 33
Slide 34: 2015 Cash Utilization
2015 Cash Utilization ($ in millions) Cash Flow From Operating Activities $73.9M Cash Used In Investing Activities ($180.3)M Cash Provided By Financing Activities $83.0M *See reconciliation table on slide 42. 34
Slide 35: Balanced and Disciplined Capital Deployment
Balanced and Disciplined Capital Deployment Historical Capital 2013 – 2015 Growth Deployment $237M Other 17% ~ 20% CAGR Net Acquisition Activity 12% ~ 14% Stock CAGR Repurchase ~ 17% 9% Debt Repayment CAGR ~ 19% Capital Expenditures ~ 30% 2013‐2015 Cumulative Op Cash Flow Revenue Adj. EPS* EBITDA Lo
Slide 36: Well-Positioned for Sustainable Growth
Well‐Positioned for Sustainable Growth Market‐Driven Megatrend strategy sharpening our focus with Organization exciting growth applications Innovation Accelerating speed of innovation to increase Leadership responsiveness and drive faster growth Synergistic Disciplined M&A strategy with robust pipel
Slide 37: Why Invest in Rogers?
Why Invest in Rogers? Growing with Leading in Leveraging Driving Delivering Discipline Technology Megatrends Excellence Results Multi‐pronged Leader in Attractive Operational Track record of strategy driving engineered markets with excellence growth in sustainable materials for global delivering val
Slide 38: Additional Information
Additional Information we Ri, Os hf WP ec w X protect connect ROGERS CORPORATION Helping power, protect, connect our world
Slide 39: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐15 Q4‐14 Q4‐14 (%) ($) (%) ($) Operating Income GAAP 8.0% $12.3 10.0% $14.7 Environmental charge 2.1 3.2 ‐ ‐ Severance charges 0.7 1.0 ‐ ‐ Pension Charge ‐
Slide 40: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) 2015 2015 2014 2014 2013 2013 (%) ($) (%) ($) (%) ($) Operating Income GAAP 11.9% $76.3 13.3% $81.2 9.3% $50.1 Environmental charge 0.5 3.2 ‐ ‐ ‐ ‐ Severance charge
Slide 41: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐15 Q4‐14 Q4‐14 (%) ($) (%) ($) EBITDA Net Income 4.3% $6.6 4.9% $7.3 Interest 0.7 1.0 0.5 0.8 Income Tax (Benefit) Expense (1.1) (1.7) 5.4 8.0 Depreciation
Slide 42: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) 2015 2015 2014 2014 2013 2013 (%) ($) (%) ($) (%) ($) EBITDA Net Income 7.2% $46.3 8.7% $53.4 7.1% $38.2 Interest 0.7 4.5 0.5 2.9 0.6 3.5 Income Tax (Benefit) Expen
Slide 43: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐14 2015 2014 ($) ($) ($) ($) Adjusted Net Income GAAP Net Income $6.6 $7.2 $46.3 $53.4 Environmental Charge 2.1 ‐ 2.1 ‐ Severance Charges 0.7 ‐ 1.0 ‐ Pensi
Slide 44: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐14 2015 2014 2013 ($) ($) ($) ($) ($) GAAP Earnings per Diluted Share $0.37 $0.39 $2.48 $2.86 $2.15 Environmental charge $0.11 ‐ $0.11 ‐ Severance $0.04 ‐
Slide 45: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐15 Q4‐14 Q4‐14 2015 2015 2014 2014 (%) ($) (%) ($) (%) ($) (%) ($) ACS Segment Operating Income GAAP 12.8% $8.2 13.0% $7.5 16.9% $45.1 18.3% $44.0 Environm
Slide 46: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐15 Q4‐14 Q4‐14 2015 2015 2014 2014 (%) ($) (%) ($) (%) ($) (%) ($) EMS Segment Operating Income GAAP 7.6% $3.2 10.4% $4.5 11.0% $20.0 13.4% $23.3 Environme
Slide 47: Non-GAAP Reconciliation
Non‐GAAP Reconciliation Rogers Corporation Reconciliation of GAAP to Non‐GAAP Financial Measures (In % of Sales and $ in M) (Unaudited) Q4‐15 Q4‐15 Q4‐14 Q4‐14 2015 2015 2014 2014 (%) ($) (%) ($) (%) ($) (%) ($) PES Segment Operating Income GAAP (1.7%) ($0.6) 2.3% $1.0 2.5% $3.8 3.3% $5.7 Environmen
Slide 48: Rogers Corporation
protect connect ROGERS CORPORATION Helping power, protect, connect our world