Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - SENSUS USA INC | d8k.htm |
 Credit Suisse
Future of Energy Conference
June 3, 2010
1
Exhibit 99.1 |
 Peter
Mainz-CEO and President
Jeff Kyle-
CFO
Jim
Hilty- VP,
Business Development 2 |
 Safe
Harbor Statement The
statements
made
during
this
presentation,
other
than
historical
facts,
are
made
in
reliance
on
the
safe-
harbor
provisions
of
the
Private
Securities
Litigation
Reform
Act
of
1995.
These
statements
involve
risks
and
uncertainties
and
are
subject
to
change
at
any
time.
These
statements
reflect
the
Company’s
current
expectations
regarding
its
financial
position,
revenues,
cash
flow
and
other
operating
results,
business
strategy,
financing
plans,
forecasted
trends
related
to
the
markets
in
which
the
Company
operates,
legal
proceedings
and
similar
matters.
We
cannot
assure
you
that
the
expectations
expressed
or
implied
in
these
forward-looking
statements
will
turn
out
to
be
accurate.
Our
actual
results
could
be
materially
different
from
our
operations
because
of
various
risks.
These
risks
include
our
susceptibility
to
macroeconomic
downturns
in
the
United
States
and
abroad,
conditions
in
the
residential,
commercial
and
industrial
construction
markets
and
in
the
automotive
industry,
our
dependence
on
new
product
development
and
intellectual
property,
and
our
dependence
on
independent
distributors
and
third-party
contract
manufacturers,
automotive
vehicle
production
levels
and
schedules,
our
substantial
financial
leverage,
debt
service
and
other
cash
requirements,
liquidity
constraints
and
risks
related
to
future
growth
and
expansion.
Other
important
risk
factors
that
could
cause
actual
events
or
results
to
differ
from
those
contained
or
implied
in
the
forward-looking
statements
include,
without
limitation,
our
ability
to
integrate
acquired
companies,
general
economic
and
business
conditions,
competition,
adverse
changes
in
the
regulatory
or
legislative
environment
in
which
we
operate,
customer
cancellations
and
other
factors
beyond
the
Company’s
control.
We
encourage
you
to
review
our
annual
report
on
Form
10-K,
which
discusses
in
greater
detail
our
results
of
operations
for
the
most
recently
completed
fiscal
year
and
consider
the
risks
that
relate
to
any
of
our forward-
looking
statements.
3 |
  Experience
Over
a
century
of
experience
serving
global
utilities
and
100
million
meters
installed
A
leader
in
innovative
technology
solutions
that
enable
intelligent
use
and
conservation
of
critical
energy
and
water
resources.
Technology
Advanced
technology
and
communications
for
data
collection,
control
and
metering
Global
Global
footprint
on
five
continents
with
operations
and
activities
in
many
countries
Proven
Proven
technology
with
7
Million
SmartPoint™
devices
deployed
at
over
225
utilities
4 |
 About
Sensus •
Record $866 million of Net Sales
in FY 2010; 9% 5 yr. CAGR
•
Record $128 million Adjusted
EBITDA*; 15% margin
•
A market leader in the
•
NA Smart Grid market
•
Global Water market
•
NA Gas market
•
Nearly 4,000 employees
worldwide
•
Headquarters in Raleigh, N.C.
* See Appendix: Non-GAAP Measures
5 |
 Market Environment
6 |
 •
Energy and water -
under pressure
•
Utilities -
under pressure
•
Consumers -
increased control
•
Politicians and regulators -
under pressure
•
Aging infrastructure -
upgrade required
•
Demand growth certain -
local and global
•
Electric cars, renewable/distributed generation
•
Conservation and efficiency -
being mandated
•
Evolving market drivers require innovative technology solutions
–
Technology enables massive scale deployments
–
Governments’
stimulants to accelerate on a global basis
7
Today’s Market Environment |
 8
•
Extensive
portfolio
of
advanced
metering
products
for
all
utility
types
–
iCON
®
-
advanced
solid
state
electric
meter
–
iPERL™
-
next
generation
water
measurement
technology
–
SONIX
®
-
ultrasonic
gas
meter
•
Advanced
long-range,
high-powered
radio
communications
network
(FlexNet™)
–
Protected,
primary-use
FCC
licensed
radio
spectrum
can
cover
all
utility
applications
–
Avoids
interference
in
the
crowded
public
spectrum
bands
used
by
mesh
networks
–
Reliable
for
utilities’
“mission
critical”
applications,
e.g.
distribution
automation
–
Software
defined
radio
enables
over-the-air
upgrades
•
Distribution
Automation
(DA)
devices
and
software
–
Connects
using
integrated
Sensus
communications
network
–
Interfaces
with
utility
SCADA
system
–
Integrated
with
all
major
DA
equipment
manufacturers
•
Demand
Response
and
Home
Area
Network
solutions
–
Connect
directly
to
the
network
or
through
electric
meter
via
other
communications,
e.g.
Zigbee
•
Fully
integrated
solution
–
Communications,
software,
meters,
distribution
automation
devices,
demand
response
and
Home
Area
Network
solutions
•
Extensive
offering
portfolio
for
all
utility
types
–
Electric,
water,
gas
and
combination
utilities
Sensus’
Differentiated Offering |
   Distributed
Generation Distributed Generation
(Wind/Solar/Other)
9
Home
Energy
Gateways
Backend
Backend
Endpoints
Layer
Control &
Management
Layer
Performance and
Supervisory
Layer
Thermostat
ZigBee
Chip
Thermostat
Redundant
RNI
TGB
Gas
Meter
Billing
Systems
Network
Performance
Load
Management
Gas
Water
Electric
Data
Backhaul
Distribution
Automation
and
Asset Management
TGB
The Sensus Smart Grid Solution
Water
Meter
Electric
Meter |
 10
•
Advanced long-range, high-power radio communications technology
–
Deployed
using
a
star-based
“point-to-point”
structure;
not
a
mesh
system
–
Cost
efficiently
covers
both
urban
and
rural
environments
and
all
terrains
•
Protected, primary-use FCC licensed radio spectrum
–
Eliminates
interference
inherent
in
crowded
public
spectrum
bands
•
Software defined radio
–
Enables
cost
efficient
and
flexible
over-the-air
upgradability,
unlike
a
chipset
based
radio
–
“Future-proofs”
the
utility’s
investment
•
Fast, dedicated, application specific communications channels
–
Essential
for
“mission
critical”
applications
requiring
low
latency,
e.g.
distribution
automation
•
Resilient, minimal infrastructure
–
Fully
redundant
end-to-end
architecture.
Robust
infrastructure
to
withstand
natural
disasters.
–
Lowest
initial
installation
and
ongoing
operating
and
maintenance
costs
•
Advanced security
–
State-of-the-art
key
encryption
at
meter
level;
set
at
point
of
manufacture
•
FlexNet™
communications solution can cover all utility applications
–
Metering,
distribution
automation,
demand
response,
Home
Area
Networks
and
emerging
technologies
–
2-way
direct
communications
with
battery
powered
water
and
gas
meters
Sensus’
Technology Advantages |
 Technology Transition Is Underway
•
Transition to AMI & Smart Meters is
underway
•
165 million of the estimated 355
million installed meters in NA have
been converted to some type of
automated metering
•
Estimated that only 15 million of the
165 million are 2-way “Smart
Meters”
•
Early 1-way AMR installations must
be replaced to make them
AMI/Smart Grid compatible
•
2.7 billion global meter installed
base is growing, but is mostly
non-automated meters
Sources: “The Scott AMR Report: AMR Deployments in North America, 4th
Quarter 2009”, IMS Research
“The World Market for Utility Meters – 2009 Edition”
; IMS Research “The Americas
Market for Utility Meters & AMR Systems”
Report –
2006 Edition; and Management estimates.
Global Meter Installed Base (units in millions)
1,277
976
442
2,695
11 |
 Building the Smart Grid…Today
•
225 Smart Grid projects completed
or in-process
•
37 States
•
2 Canadian Provinces
•
2 European countries
•
7 million SmartPoint™
devices
installed
•
13 million SmartPoint™
devices
when all current projects complete
12 |
 Sensus
SmartPoint™
Deployments
•
Dramatic growth in electric
Sensus
SmartPoint
TM
device
deployments
•
Electric growth driven by 2-way
Smart Grid deployments, not
basic AMR
•
Electric AMI market share
increased from 3% to 23% in
two years
•
Water market transitioning from
basic AMR to 2-way smart
metering
•
Tier-I CEM approach enables
rapid scalability
Source: The Scott Report: AMR Deployments in North America and Sensus
13 |
 A Global Water Metering Leader
Global Market
Market Size: $2.3 billion
•
Scarcity of water and conservation
initiatives are global factors
•
Key markets of North America (22%
share) and Europe (25% share) are driven
by water meter replacement programs
•
Technology is a driver both for residential
and commercial & industrial applications
–
2-Way water communications network
–
iPERL™
water management device
Source:
IMS Research Report 2008; management estimates.
Note:
Market shares based on revenue.
14
16% |
 Financial Overview
15 |
 Water Metering
39%
Gas Metering
7%
Precision
Die Casting
7%
Clamps &
Couplings
7%
Water Metering
60%
Gas Metering
12%
Precision
Die Casting
7%
Clamps &
Couplings
10%
Evolution of Net Sales
Fiscal Year 2004 Net Sales
Fiscal Year 2010 Net Sales
Conservation Solutions
11%
$59M
Conservation Solutions
40%
$348M, up 490%
Net Sales: $529M
Net Sales: $866M
(Fiscal year ended March 31)
16 |
 Global
Reach Over 40 facilities on five continents and nearly 4,000 people
Text
FY10 $611
FY04 $349
FY10 $15
FY04 $7
FY10 $28
FY04 $12
FY10 $43
FY04 $9
17
Net Sales by Geography (US$ in millions)
FY10 $169
FY04 $152 |
 $92
$97
$94
$91
$102
$128
16%
16%
15%
13%
13%
15%
0%
5%
10%
15%
20%
25%
$0
$20
$40
$60
$80
$100
$120
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
$34
$47
$29
$51
$61
$73
$0
$10
$20
$30
$40
$50
$60
$70
$80
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
$572
$614
$631
$722
$792
$866
$0
$100
$200
$300
$400
$500
$600
$700
$800
$900
$1,000
FY
2005
FY
2006
FY
2007
FY
2008
FY
2009
FY
2010
Strong Financial Track Record
Net Sales
(1)
Net cash provided by operating activities as reported in the
Company SEC filings.
Adjusted EBITDA* margins improving as
leverage and scale drive operating results.
R&D investment rate increase approximately
25% from 2008 levels to 4.8% of net sales as
technology is introduced across the Utility
Infrastructure Systems product portfolios.
2008 Sensus launches FlexNet™
systems
and enters AMI Electric markets.
2009 revenue traction attained as market
share expands rapidly to 23% with 7 million
SmartPoint™
devices shipped within just over
2 years.
Fiscal Year Ended March 31 (US$ in millions)
Adjusted EBITDA *
Operating Cash Flow
(1)
Continued drive on balance sheet efficiency
through working capital initiatives. Days sales
cycle improved over 100% since 2008.
Maintained investments in infrastructure and
software to support market strategies and
commitments.
* See Appendix: Non-GAAP Measures
18 |
 Fiscal Year End March 31
(US$ in millions)
FY 2009
FY 2010
Percent
Change
Net Sales
$792
$866
+ 9.3%
Gross Profit
$199
$247
+ 24.1%
Gross Profit %
25.1%
28.5%
R&D Investment / Net Sales %
3.9%
4.8%
Adjusted EBITDA *
$102
$128
+ 25.5%
Adjusted EBITDA % *
12.9%
14.8%
Backlog
$124
$134
+ 8.1%
Average Sales Cycle (days)**
26
15
+ 42.3%
Financial Highlights
* See Appendix: Non-GAAP Measures
** Sales Cycle = Days Sales + Days Inventory -
Days Payable
19 |
 20
Over a Century
of providing
Technology to
Utilities
Serve Electric,
Water, Gas and
Combination
Utilities
Global
Business
Market
Leadership
Positions
Integrated
Metering and
Communications
Solutions
Protected,
FCC
Licensed
Spectrum
100 Million
Meters
deployed
Globally
7 Million
SmartPoint™
Devices
Deployed
Proven Business
Model with Solid
Financial Results
A
leader
in
innovative
technology
solutions
that
enable
intelligent
use
and
conservation
of
critical
energy
and
water
resources.
A
leader
in
innovative
technology
solutions
that
enable
intelligent
use
and
conservation
of
critical
energy
and
water
resources. |
 Thank You
For more information visit: www.sensus.com
21 |
 Appendices
22 |
 Appendix: Financial Position
Fiscal Year End March 31
(US$ in millions )
FY 2008
FY 2009
FY 2010
FY % of
Capitalization
Cash
$ 38
$ 38
$ 59
Short-term loans
$ 6
$ 5
$ 5
1%
Term loans
$174
$159
$186
26%
Sr. Subordinated Notes
$275
$275
$275
38%
Total Debt
$455
$439
$466
65%
Paid-in Capital
$243
$245
$252
35%
Total Book Capitalization
$698
$684
$718
100%
Adjusted EBITDA *
(1)
$ 91
$102
$128
Adjusted EBITDA * / Interest
expense, net
(1)
2.4x
3.1x
2.9x
Net Debt / Adjusted EBITDA*
4.5x
3.7x
3.4x
* See Appendix: Non-GAAP Measures
(1)
As defined in the credit facility agreements.
23 |
 Appendix: Non-GAAP Measures
•
To
enhance
the
comparability
and
usefulness
of
its
financial
information,
the
Company
provides
certain
non-GAAP
measures
to
describe
more
fully
the
results
of
its
underlying
business.
Specifically,
the
Company
utilizes
the
measure
of
Adjusted
EBITDA,
which
is
defined
as
follows:
–
Adjusted
EBITDA
is
defined
as
consolidated
earnings
before
interest
expense,
depreciation
and
amortization,
and
income
taxes
plus
(a)
restructuring
costs,
(b)
management
fees
and
(c)
acquisition-related
costs,
and
adjusted
for
other
nonrecurring
items.
•
Refer
to
the
Company’s
press
release
on
Form
8-K
dated
May
7,
2010
for
further
discussion
of
non-GAAP
measures.
24 |
 Appendix: Non-GAAP Measures
A reconciliation of Adjusted EBITDA to consolidated net loss follows:
FY
FY
FY
FY
FY
FY
Ended
Ended
Ended
Ended
Ended
Ended
(US$ in millions)
3/31/2010
3/31/2009
3/31/2008
3/31/2007
3/31/2006
3/31/2005
Net sales
$ 865.6
$ 791.9
$ 722.0
$ 631.4
$ 613.9
$ 569.8
Adjusted Gross Profit
$ 247.2
$ 199.4
$ 186.9
$ 177.7
$ 186.4
$ 170.8
Consolidated net loss
$ (5.0)
$ (16.0)
$ (6.4)
$ (8.4)
$ (3.2)
$ (5.0)
Depreciation and amortization
45.5
46.6
47.7
48.1
42.4
39.8
Interest expense, net
43.6
39.9
41.8
42.4
39.3
36.7
Income tax provision (benefit)
7.7
0.7
(1.4)
0.5
8.2
8.3
Restructuring costs
25.9
9.9
7.0
8.5
7.2
8.1
Management fees
3.3
3.1
2.6
2.6
2.3
2.1
Acquisition-related costs
1.2
-
-
0.1
-
-
Loss on debt extinguishment
5.9
-
-
-
-
-
Other non-recurring items
-
3.3
-
-
1.1
0.9
Goodwill impairment
-
14.4
-
-
-
-
(Gain) loss from discontinued operations
-
-
-
(0.1)
-
0.8
Adjusted EBITDA (excluding discontinued operations)
$ 128.1
$ 101.9
$ 91.3
$ 93.7
$ 97.3
$ 91.7
25 |