Trimble First Quarter 2017 Results Summary
Forward-looking statements Certain statements made in this presentation and any subsequent Q&A period are forward -looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. These statements include expectations for future financial market and economic cond itions, the impact of acquisitions, the ability to deliver revenue, earnings per share and other financial projections. These forward -looking statements are subject to change, and actual results may materially differ from those set forth in this presentation due to c ertain risks and uncertainties. The Company’s results may be adversely affected if the Company is unable to market, manufacture and ship new products, obtain new customers, or integrate new acquisitions. The Company’s results could be negatively impacted by weakening in the macro economic environment, or foreign exchange fluctuations or the imposition of barriers to international trade. Any failure to achieve predicted results could negatively impact the Company’s revenues, cash flow from operations, and other financial results. The Company’s financial results will also depend on a number of other factors and risks detailed from time to time in reports filed with the SEC, including its quarterly reports on Form 10-Q and its annual report on Form 10- K, such as changes in economic conditions, further worsening in the geospatial market, critical part supply chain shortages, and possible write-offs of goodwill. Undue reliance should not be placed on any forward-looking statement contained herein, especially in light of greater uncertainty than normal in the economy in general. These statements reflect the Company’s position as of the date of this presentation. The Company expressly disclaims any undertaking to release publicly any updates or revisions to any statements to reflect any change in the Company’s expectations or any change of events, conditions, or circumstances on which any such statement is based. To help our investors understand our past financial performance and our future results, as well as our performance relative t o competitors, we supplement the financial results that we provide in accordance with generally accepted accounting principles, or GAAP, with non-GAAP financial measures. The specific non-GAAP measures, which we use along with a reconciliation to the nearest comparable GAAP measures can be found on our website at http://investor.trimble.com. 2
Agenda ▪ CEO Overview ▪ CFO Review of Results ▪ Guidance ▪ Q&A 3
First Quarter 2017 Overview ▪ Accelerating revenue growth and continued operating margin expansion ▪ International market growth outpaced North American growth ▪ Operating margin expansion demonstrates benefits of cost reduction, gross margin expansion and portfolio initiatives ▪ Continue to see path for revenue growth and margin expansion in Q2’17 and remainder of 2017 ▪ Technological innovation and customer wins strengthening competitive position ▪ Completed re-segmentation 4
First Quarter Fiscal 2017 Financial Summary $M, Except Per Share First Quarter of ▪ Revenue: +5% yr:yr 2016 2017 – Currency translation ≈ -1% – A cquisitions/divestitures ≈ -0.5% Revenue $583.0 $613.9 ▪ Non-GAAP Operating Income % up 270 bps yr:yr Non-GAAP Gross Margin % of Revenue 55.9% 56.5% ▪ Non-GAAP EPS of $0.33, up $0.08 yr:yr Non-GAAP Operating Income $88.5 $109.2 ▪ Deferred Revenue at $337M, up 5% yr:yr Non-GAAP Operating Income % of Revenue 15.1% 17.8% ▪ Operating Cash Flow of $102.9M, down 10% yr:yr Non-GAAP Net Income $64.5 $84.8 ▪ Share repurchase of 0.5 million shares for $14M Non-GAAP Diluted Earnings Per Share $0.25 $0.33 Note: Investors are encouraged to review the reconciliation of our non-GAAP financial measures to the comparable GAAP results, which is attached to the earnings release. Additional financial information about our use of non-GAAP results can be found on the investor relations page of our Web site at: http://investor.trimble.com. 5
Financial Position $M First Quarter of ▪ Cash at $423M, up $248M yr:yr, up $95M 2016 2017 qtr:qtr Balance Sheet Highlights: ▪ Deferred Revenue up 5% yr:yr Cash and Short-Term Investments $174.7 $422.6 ▪ Cash Flow from Operations down 10% yr:yr Total Assets $3,749.9 $3,897.4 driven by timing of working capital Deferred Revenue $319.5 $337.0 requirements Total Debt $674.9 $648.1 ▪ 0.5 million shares repurchased for $14M during Stockholders Equity $2,286.7 $2,420.9 quarter with $116M remaining capacity under Diluted Shares Outstanding 254.0 255.9 existing program as of the end of Q1’17 Cash Flow Highlights: Cash Flow from Operations $114.4 $102.9 Share Repurchases $12.2 $14.2 6
Re-segmentation Overview 7
Re-segmentation Overview (cont.) Prior Reporting Segments New Reporting Segments ▪ Engineering & Construction ▪ Buildings & Infrastructure – Includes: surveying & geospatial, civil engineering & – Includes: building construction, civil engineering & construction construction, building construction, mining, rail ▪ Geospatial ▪ Field Solutions – Includes: surveying & geospatial, geographic information – Includes: agriculture, geographic information systems (GIS), systems (GIS), timing, Applanix (inertial) water and electric utilities ▪ Resources & Utilities ▪ Mobile Solutions – Includes: agriculture, water and electric utilities, forestry, – Includes: transportation and logistics, field service mining management, forestry ▪ Transportation ▪ Advanced Devices – Includes: transportation and logistics, field service – Includes: embedded technologies, timing, Applanix (inertial), management, embedded technologies, rail, military military FY 2016 Revenue FY 2016 Revenue 6% Buildings and Infrastructure 15% Engineering & Construction 25% 31% Geospatial Mobile Solutions 55% Resources and Utilities Field Solutions 17% 24% 27% Advanced Devices Transportation 8
Buildings and Infrastructure Segment Results Q1’16 Q1’17 Q1’17 commentary Revenue $174 $188 ▪ Revenue: +8% % Growth 8% – Currency translation: ≈ -2%; acquisitions/divestitures: ≈ 0% Operating Income $22 $33 – Revenue growth in both buildings and civil engineering & construction % of Revenue 12.9% 17.4% ▪ Operating margins Delta +450bps – Up ≈450 bps yr:yr, due to gross margin improvement and strong cost control % Growth 46% ▪ Selected highlights – Growth in architecture and design business, as well as in BIM software for structural and MEP trades – Growth in real estate and space (Manhattan Software) – Conexpo 2017 highlighted new product introductions in our civil engineering and construction business; including next generation Trimble Earthworks platform – Continued expansion of OEM relationships with Hitachi, Kobelco, Sumitomo, K-tec and Yutong – Divestment of non-core crane lifting system business 9
Geospatial Segment Results Q1’16 Q1’17 Q1’17 commentary Revenue $152 $150 ▪ Revenue: -2% % Growth -2% – Currency translation: ≈ -1%; acquisitions/divestitures: ≈ -3% Operating Income $26 $28 – Revenue growth in Trimble branded survey and geospatial (excluding impact of % of Revenue 17.1% 18.6% divestitures). Revenue growth in inertial and OEM businesses. Revenue decline in GIS. Delta +150bps ▪ Operating margins % Growth 7% – Up ≈150 basis points yr:yr, driven by improved gross margins and cost control ▪ Selected highlights – Strong backlog for SX10, which combines imaging, survey & 3D scanning into single unit for the geospatial market – Growth in North American market revenue (excluding impact of divestitures) – Growth in inertial technologies used in georeferencing applications such as autonomy – Divestment of ThingMagic, Advanced Public Safety and Gatewing contributed to revenue decline 10
Resources and Utilities Segment Results Q1’16 Q1’17 Q1’17 commentary Revenue $114 $120 ▪ Revenue: +5% % Growth 5% – Currency translation: ≈ -1%; acquisitions/divestitures: ≈ 0 % Operating Income $35 $42 – Revenue growth in agriculture, correction services, forestry % of Revenue 30.7% 35.2% ▪ Operating margins Delta +450bps – Up ≈450 bps, driven primarily by gross margin expansion as well as cost control % Growth 21% ▪ Selected highlights – Growth in North American agriculture business – Growth outside of North American agriculture markets continues to provide attractive market penetration opportunity – Growth with OEM partners in agriculture – New market opportunity with Valley Irrigation for pivot irrigation – Correction services business leverages unique Trimble IP to provide precision location services – Forestry business completed three acquisitions since January to extend Connected Forest solution capabilities across the forestry continuum 11
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