2014 financial analyst and investor days2.q4cdn.com/591876415/files/doc_presentations/... · 2014...

© 2014 Belden Inc. | belden.com | @BeldenInc

December 2014

2014 Financial Analyst and Investor Day

© 2014 Belden Inc. | belden.com | @BeldenInc 2

Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the 2014 fourth quarter and full year 2015. Forward-looking statements include projections of sales, earnings, general economic conditions, market conditions, working capital, market shares, free cash flow, pricing levels, and effective tax rates. Belden undertakes no obligation to update any such statements to reflect later developments, except as required by law. Information on factors that could cause actual results to vary materially from those discussed today is available on our investor relations website, our most recent Annual Report on Form 10-K as filed with the SEC on February 27, 2014 (including those discussed under “Risk Factors” in Part I, Item 1A and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7), and our subsequent filings with the Securities and Exchange Commission.

Safe Harbor Statement

Non-GAAP Measures We will be discussing some non-GAAP measures (denoted by footnote) in discussing Belden’s performance, and the reconciliation of those measures to the most comparable GAAP measures is contained within this presentation or available at our website www.Belden.com under Investor Relations.

http://www.belden.com/


John Stroup President and CEO

December 2014

2014 Financial Analyst and Investor Day


Driving Value Through Consistent Financial Performance

2005 2014E

Revenues 1,246 2,3074 7.1% CAGR

Operating Profit Percentage1 5.5% 13.8%4 +830 bps

Free Cash Flow Exceed Net Income2 110% 101%

Achieved for 10 Straight

Years

Return on Invested Capital3 4.1% 12.9% +880 bps

1. Adjusted results. See appendix for reconciliation to comparable GAAP results. 2. As a percentage of Net Income. Adjusted results. See appendix for reconciliation to comparable GAAP results. 3. Excluding excess cash, 4. Based on midpoint of guidance

Increased Enterprise Value by 4X since 2005


A Global Signal Transmission Solutions Company

Broadcast Enterprise Connectivity

Industrial Connectivity Industrial IT

Market Size $4.9B $3.3B $4.0B $1.3B Long-term Growth Rate1 3-5% 1-3% 2-4% 4-6%

TTM Revenue2 $992.2M $465.2M $673.7M $269.4M Market Share2 20% 14% 17% 21% TTM Operating Margin3 12.9% 11.3% 13.8% 17.7%

Key Markets

• Broadband • Broadcast

Studios

• Finance • Healthcare

• Discrete • Process • Energy • Transportation

Applications

Creation

Aggregation

Delivery

Data Center

Local Area Network

Machine Control

Operation Technology

1. Served addressable market. 2. Based on TTM revenues plus impact of acquisitions 3. Based on TTM. Adjusted results. See appendix for reconciliation to comparable GAAP

results.

Network Security


More Connections More Automation

More Consumption 30 HOURS of video uploaded every minute 1.3 MILLION video views every minute

Today, the number of

NETWORKED DEVICES

= Global

Population

Connections for M2M Communications are set to grow from 1B in 2010 to

12B in 2020

$1.2 Trillion Value robots provide through labor-saving productivity gains

$3 Trillion Value created by robots through improvements in quality of life and time savings

1 DATA CENTER = Energy consumption of 25,000 US houses

BY 2025… By 2020, the

number of NETWORKED

DEVICES

= Global

Population

THIS YEAR MANKIND WILL CREATE

1.9 Trillion GB of DATA EQUIVALENT TO 118 Billion 16GB iPhones

2010 2020

ANNUAL GROWTH

28%


Connectivity Peers

Cable Peers

Common Misperceptions About Belden

“Belden is a Wire and Cable company.”

10.0%

20.0%

30.0%

40.0%

50.0%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Belden Gross Profit Percentage1 Improvement of

1,460 bps

Belden’s Gross Profit Margin Exceeds Connectivity Peers

1. Adjusted results. See appendix for reconciliation to comparable GAAP results.



“Belden has concentrated exposure to certain geographies and end markets.”

End Market Mix (%)

40

20

Industrial

Broadcast

Enterprise

40

CANADA 9% EUROPE

17%

ASIA PAC 14%

MIDDLE EAST AND

AFRICA 4%

LATAM 5%

UNITED STATES 51%

Geographically Balanced1

1. Q3 2014 geographic mix



“Copper prices impact Belden’s financial results.”

Prices are routinely adjusted to reflect changes

in copper costs

No impact on operating profit

dollars

1 2 3

0%

10%

20%

30%

40%

2005 2011 2014

Copper as a % of Revenue



“Currency fluctuations materially impact Belden’s financial results.”

Revenues and costs are aligned

Liabilities include Euro-based debt

Many customers are exporters

A B C + +

= 5% decline in Euro has less than 1% effect on EPS



“There are no companies left to acquire.”

Identification Robust Funnel of

Opportunities

Today’s Funnel is 65% Larger Than 2013

Entrance

Cultivation

Close

> 150 Companies

> $25B PAM Negotiation


Belden Business Model

Operational Excellence

Cash Generation

Portfolio Improvement

BUSINESS MODEL




BUSINESS MODEL

Cash Generation




LEAN Enterprise

Market Delivery System

Talent Development

Operational efficiency through continuous improvement on a

company-wide basis

Four inter-related processes that provide

the foundation for organic growth

Create and enhance career opportunities for

talented new and current associates

LEAN metrics are utilized company-wide;

not just in manufacturing

A global commercial team capable of solving

complex networking applications

98% retention rate of high-potential

associates 75% internal fill rate




BUSINESS MODEL

as a result of…… • Working Capital Efficiency • Leverage on Growth • Fixed Asset Efficiency

Cash Generation



$-

$50

$100

$150

$200

2005 2008 2011 2014

Cash Generation

High quality earnings fuel the transformation

FCF1($)

Working Capital Efficiency

Leverage on Growth

Fixed Asset Efficiency


20% CAGR




BUSINESS MODEL

Cash Generation



1 4

2

3


$2.1B 80% $2.1B deployed since 2007

80% of capital towards M&A

Cash ROIC >13% >13%

Accretive to Growth

Market Leadership

Accretive to Margins

Acquire

Realize Synergies

Continuous Improvement

And the process continues……

Cost Synergies

Tax Synergies

Commercial Synergies

LEAN Enterprise


Strong Track Record of Value Creation

2005 2008 2011 2014

7% CAGR

Revenue



2005 2008 2011 2014

Revenue EBITDA1

13% CAGR




2005 2008 2011 2014

7% CAGR

Revenue EBITDA1 EPS1

22% CAGR



2005 2008 2011 2014


Revenue EBITDA1 EPS1

Continuing the Transformation



CREATE A FOUNDATION

AMPLIFY Middle Innings of Transformation

$-

$400

$800

$1,200

$1,600

Base Years 1 - 3 Years 4 - 6 Years 7 - 9 Years 10 - 12 Years 13 - 15 Years 16 - 18

BUY & BUILD

Similar Trajectory as Aspirational Peer

Aspire To Peer Belden

EBIT

DA

($ millions)


Disciplined Approach Enables Perpetual Value Creation

CREATE A FOUNDATION

BUY & BUILD

AMPLIFY

2005 2008 2011 2014 2017 2020 Years 1 - 3 Years 4 - 6 Years 7 - 9 Years 10 - 12 Years 13 - 15

Aspire To Peer

Organic

M&A

**Please note that these potential scenarios illustrate outcomes of our strategic plan. These scenarios which are subject to risks and uncertainties, should not be treated as forward looking statements.

$-

$400

$800

$1,200

EBIT

DA

($ millions)


Updating Goals to Better Reflect Business Model

THREE YEAR FINANCIAL

GOALS1

Organic Revenue Growth 4 - 6%

Operating Profit Percentage2 14 - 16%

Free Cash Flow Exceed

Net Income

Return on Invested Capital 13 - 15%

1. Provided in 2012


Updating Goals to Better Reflect Business Model


GOALS1

Organic Revenue Growth 4 - 6%

Operating Profit Percentage2 14 - 16%


Net Income


1. Provided in 2012.


GOALS

Growth 8 - 10%

EBITDA 18 - 20%


Net Income


NEW

NEW



BUSINESS MODEL

Free Cash Flow Greater Than Net

Income

LEAN Enterprise Market Delivery System

Talent Development

80% of capital allocated to M&A

Continued Execution of Business Model to Drive Ongoing Transformation

Cash Generation



Roel Vestjens President, Broadcast Solutions

December 2014

Broadcast Market


Cable and Connectivity

Interfaces and Routing

Playout Systems

Camera Mounted Fiber Solutions

Monitoring Systems

In-Home Network

Outside Plant

Broadcast Solutions Leading Video Production Solutions and Connectivity Systems

Leading provider of production, distribution and connectivity systems for television broadcast, cable, satellite and IPTV industries

Key Markets • Outside Broadcast • Sport Venues • Broadcast Studios • Service Providers (Cable,

Broadband, Satellite, Telecom)

Key Applications • Live Production Signal Management • Program Playout for

Broadcasters • Monitoring for Pay TV

Operators • Broadband Connectivity • Tap-to-TV

Solutions Representative Customers

2014 Market Size: $4.9B • Revenues: 992.2M* • 2014 Market Share: 20%

* TTM plus impact of acquisitions


2014 Highlights and Financial Performance

Scaling the platform to capture customer share and secure market leadership

1. Adjusted results. See Appendix for reconciliation to comparable GAAP results 2. Excludes impact of Grass Valley 3. Calculated as Adjusted EBITDA less capital expenditures * TTM

2011 TTM Variance

Operating Profit1 $26.3 $108.9 314%

Operating Profit %1 8.4% 12.9% +450

bps

Return on Assets 21.5% 26.1%2 +460

bps

Free Cash Flow3 $25.5 $108.4 326%

Revenues and Profitability (in millions) OP ($) Rev ($)

$-

$40

$80

$120

$160

$200

$-

$200

$400

$600

$800

$1,000

2011 2012 2013 2014

Revenues Operating Profit

*

1


Key Trends Driving the Broadcast Market

Expanded broadcast platform enables Belden to capitalize on these trends

Automation driving more infrastructure investments

More Over the Top content

offered by broadcasters and

non-traditional providers

IP Transition gaining

momentum in the broadcast studio

Video consumption is

growing at an unprecedented

rate


Evolution of Broadcast

Historically delivered through the traditional broadcast environment

1960 1970 1980 1990 2000

Color TV

Cable TV

Specialty Channels

Satellite TV

DVR

2003

HDTV

Today

Video On Demand TV


Traditional Broadcast Environment

Distributors

Network Operators

Aggregators

Broadcasters

Creators

Studios

Consumers


Over the Top (OTT)

Evolution of the Broadcast Environment

Creators Aggregators Distributors

Network Operators Broadcasters Studios

Consumers

Complexity of the infrastructure and delivery model driving the need for automation

200+

Dev

ices


Video Traffic will reach 80% in 20181

1.3 million videos viewed each minute1

64% of Internet traffic today is Video2

Significant Growth In Video

Percent of Bandwidth Consumed By Video2

30%

43%

49%

58% 61%

64%

0%

10%

20%

30%

40%

50%

60%

70%

2009 2010 2011 2012 2013 2014E

1. Cisco VNI June 2014 2. Sandvine Global Internet Pehnomena Reports (2012-2014), North America Fixed


Consumption Driving Demand for Faster Internet Speeds

Online M r

10 a.m. 2 p.m.

6 p.m. 10 p.m.

2 a.m.

Streaming 64%

Current Home Infrastructure

We provide unique, patented solutions for in-home connectivity. As consumption increases, the home and distribution network will need upgrades.

Average Broadband Speed is 16 Mbps

48 Mbps Average Fixed Broadband speed by 2018

Belden Entry

Not Belden


Productivity Challenges Require Automation Investments

OTT content must be available immediately after

airing for consumption on demand

Broadcasters Must Do More With Less • Need to automate production • Willing to invest in Capex as long as it decreases Opex • Achieve breakeven on investment within 1 Year

Belden helps customers be more agile in an ever-changing production environment

Multiple Viewing

Platforms

Increased channel count

Advertising revenue

per channel decreasing


Benefits of IP for Broadcasters

Additional Automation Through IP Transition

Belden’s experience with environments involving multiple applications, protocols and interconnections helps customers easily transition to an IP environment.

0%

20%

40%

60%

80%

100%

1985 1990 1995 2000 2005 2010 2015 2020

Enterprise Industrial Broadcast

IP Adoption Over Time

Multiple video streams over a single Ethernet cable

Reduces time to deploy a new channel

Ability to integrate video from multiple remote facilities

Format agnostic (SD, HD, 4K, or OTT)

Simplifies a studio’s architecture


Belden Offers the Most Complete Portfolio

IN THE FIELD IN THE STUDIO

IN THE CONTROL ROOM IN THE HOME


The Importance of Scale

$68 $57

$30

$-

$20

$40

$60

$80

BeldenBroadcast

Competitor A Competitor B

Research and Development

Belden has a competitive edge in terms of available dollars for R&D spend

Global Customer Reach

Canada

Mexico

Latin America

China

Brazil

Australia

Russia

Japan

Italy

Spain

France Germany

UK Ireland

Turkey

Dubai India Singapore

America


Belden’s Broadcast Solutions Align with Industry Imperatives

Improve Content Production Quality

Create More Content Air it Faster

Broadband Connectivity Quality

Reduce OpEx

Innovative Infrastructure

Automated Processes

Broadband Quality

IP Connectivity

Industry Imperatives Belden Strengths


Growth Expansion

Broadcast

+

=

3 - 5%

2%

5 - 7%

Market Growth

Share Capture

3 Year CAGR

Priorities • Leverage scale to serve our customers

globally • Continue to differentiate through R&D

investment • Utilize past experiences to drive IP

convergence in the broadcast industry • Provide unmatched quality, delivery

and cost effectiveness to customers


Glenn Pennycook President, Enterprise Connectivity Solutions

December 2014

Enterprise Market


Enterprise Connectivity Solutions Technology Innovation with Highest Reliability and Ease of Use

The industry’s most extensive portfolio of IP- and legacy-based infrastructure and connectivity solutions for enterprise

Key Markets • Data Hosting • Healthcare • Education • Financial • Government

Key Applications • LAN • Data Centers • Access Control • Building Automation

Solutions Customers

Copper and Fiber

Connectivity

Racks and Enclosures

Copper and Fiber Cabling

2014 Market Size: $3.3B • Revenues: $465.2* • 2014 Market Share: 14%

* TTM



Consistent improvements in financial performance since 2011

1. Adjusted results. See Appendix for reconciliation to comparable GAAP results * TTM

2011 TTM Variance



bps

Return on Assets 15.0% 18.4% +340

bps

$-

$20

$40

$60

$80

$100

$-

$100

$200

$300

$400

$500

$600

2011 2012 2013 2014



1

*


A Transformational Year for Enterprise Connectivity

Consistent execution of strategy delivering improved financial performance

Commercial Focus

• 10% organic growth in copper and fiber connectivity (33% in the United States)

• 11% organic growth in data centers

• Continued investment in High Speed interconnect

Increased Profitability

• Increased Operating Profit dollars by 23% since 2011

• Increased Operating Profit % by 330 bps

• Improved Return on Assets by 340 bps

Structural Actions

• Exited low margin business segments

• Restructured US sales force and deployed new global sales processes

• Built a network of Global Contractors

Executed Business Strategy


2013 2014 2017

Connectivity Mix % 16% 19% 22%

Operating Profit %1 10% 12% 14%

Increasing Profitability Through Connectivity Mix Shift

Continuing focus on connectivity mix as a key driver of operating margin expansion

1. Adjusted results. See appendix for reconciliation to comparable GAAP results 2. Sources: BSRIA 2013 World Report


Return to Growth

Favorable Market Growth Transformations Complete

Proven Ability to Deliver

• Local Area Network (LAN) market expected to grow 1-3%

• Data Center market will continue to expand at 5-7% CAGR

• New sales structure in place and stable

• Portfolio actions complete

• Favorable mix trajectory

• Consistent profitability results demonstrate ability to execute

• Investments in commercial processes yielding results

Focus on Highest Growth Markets Enterprise R&D and commercial investments are focused on highest growth markets, emphasizing Fiber, High Speed Interconnect, and End to End systems for the data center

Execution of our strategy has established a solid foundation for revenue growth


Impact of Virtualization on Data Center Infrastructure

Two primary impacts from virtualization: 1. Data centers more efficiently deliver data, enabling rapid growth in data consumption

2. Higher value connectivity is required to support increased bandwidth ports

1 Many

10% 90%

1 Gbps (Category Cable, high power)

10/40/100/400 Gbps bandwidth accelerates transition to fiber and

High Speed Assemblies

Server Utilization

Port Bandwidth

Applications / Server

Virtualization


Data Center Market Segmentation

Enterprise Owned $3.4B TAM, -4% CAGR

Key Attributes: • Cloud applications and

virtualization driving overall segment decline

Hosted $1.1B TAM, +31% CAGR

Key Attributes: • Operating expense model

for clients • Enabler of accelerating

mobile/cloud usage • Deploy customized infrastruture to

achieve economies

Multi-Tenant $1.2B TAM, +2% CAGR

Key Attributes: • IT owned by enterprise

client, while space and power are leased

Shift toward multi-tenant and hosted data centers creates opportunity to accelerate Belden penetration in the data center market


Continuously Improving Business Model

Continued execution of Enterprise Strategy will result in significant improvements to our business model

Leveraging the Strength of Belden Increasing collaboration across Belden platforms is delivering deeper customer relationships and new opportunities for Enterprise

Leading Customer Engagement

Improved Profitability

Expanded Global Presence

Strategic Account execution and Partner Alliance

programs for Consultants / Contractors

Favorable mix and lower costs driven by portfolio development

and sales focus

Seamless sales execution and localized products across

geographic borders


Growth Opportunity

Enterprise Connectivity

Priorities • Preserve market leaderships • Data center penetration • Increase footprint in emerging markets • Leverage portfolio to existing

customers • Capture product transitions

+

=

1 - 3%

2%

3 - 5%

Market Growth

Share Capture

3 Year CAGR


Christoph Gusenleitner President, Industrial Connectivity

December 2014

Industrial Market

Dhrupad Trivedi President, Industrial IT


Concepts Driving Industry Change

Investment in controls and information systems that

operate in harsh industrial environments require signal

transmission solutions

INDUSTRIAL INTERNET OF THINGS

IMPROVED PRODUCTIVITY

Connections of billions of nodes & devices that improve efficiency, productivity and agility

Factories and production managers being asked to do more with less requiring infrastructure upgrades


Industrial Markets Overview

Discrete

Automotive Manufacturing Food &

Beverage Material

Handling & Tool Machinery

• Building Automation

• Seminconductor

PT&D • Conventional

Power Generation

• Alternative Power Generation

Mass Transit Rail Systems Traffic

Systems

Oil & Gas • Chemical • Mining & Metal • Water Waste

Water

Discrete Energy Transportation Process

Produce goods you can “count”

Convert natural resources for human use

Infrastructure monitoring and data acquisition

Power transmission and distribution


The Connected Machine

Machine Brain



Sensors



Actuators



Machines must be able to communicate with each other


Connecting the entire infrastructure for automation and real-time data for enhanced decision making

The Connected Infrastructure: Discrete Example

and communicate to everything else


Intelligent, Connected Industrial Infrastructure Drives Productivity

An increasingly competitive world forces countries, companies and individuals to invest to become better, faster and more productive.

Improvement requires

The right information

At the right time

In the right place

SIGNAL TRANSMISSION SOLUTIONS

+ + =

1960s-1970s 1980s-1990s Today

“If it’s broke, we can fix it”

Service agreements for

regularly scheduled maintenance

Analyzing whether the engine is delivering the

agreed upon peak operational time


Investment Is Required In Process Automation Environments

New Energy Sources

Improved efficiency and safety

Product quality and consistency

Required Infrastructure Upgrades

Creates Demand for….

1. Connected intelligent systems

2. Custom designs and certifications

3. Future MRO

PTZ Camera Network

Growth Drivers

Industrial Connectivity

Sensor for Flow, Temperature, Pressure, etc.

Industrial IT


Energy Demand Driving Large Projects

Triggers Large “Greenfield”

Projects

Creates Demand for….

1. Connected intelligent systems

2. Custom designs and certifications

3. Future MRO

Growth Drivers

Global demand for Energy

Advanced data acquisition systems to manage “Smart Grid”

Compliance/Regulations

“Global Energy Demand will rise 37% by 2040, with

infrastructure investment needed to support”

- International Energy Agency 2014


Uninterruptable secure WLAN

bridge link Serial cable connection (low cost, low tech) for transmission of MAC

addresses AP-1-1

AP-2-1 AP-2-2

AP-4-1 AP-4-2

AP-3-1 AP-3-2

Belden controller

Urbanization Driving Transportation Enhancements and Innovation

“Over 40 global cities to be SMART cities in 2020. Smart is

the new green”

- Frost & Sullivan, 2012

Public transportation Roads, highways, subways

User connectivity and convenience

Population growth and movement


Industrial Markets Ecosystem

End User

Contractors

Channel Team

Demand Creation

Sales Team

Machine Builder

Systems Integrator /

EPC Global Automation

OEM

Industrial Product Businesses

Belden’s unique Go-to-Market Model addresses the complex industrial market ecosystem

Keeping Score

Outbound Marketing

Vertical Marketing

Channel Development

End Customer Engagement

Machine Builders

Consumer Packaged Goods

Automotive

Automation Suppliers

Oil and Gas

Power Generation

PT&D

Transportation


Industrial Connectivity Solutions High Performance Networking Components and Machine Connectivity Products

Physical network and fieldbus infrastructure components and on-machine connectivity systems customized to end user and OEM needs providing reliability and confidence of

performance for a wide range of industrial automation applications

Key Markets • Automotive Production • Machine Building • Power Generation • Oil & Gas

Key Applications • Network/Fieldbus

Infrastructure • Sensor/Actuator

Connectivity • Power, Control and

Data Transmission


2014 Market Size: $4.0B • Revenues: $673.7M* • 2014 Market Share: 17%

Industrial and I/O Connectors

Customer-Specific Wiring Distribution Boxes I/O Modules/Active

IP/Networking Cables

Industrial Cables

* TTM

http://www.alphawire.com/en/default.aspx

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&docid=ljHzPn6SPCYmuM&tbnid=F2gufirT8UHjhM:&ved=0CAUQjRw&url=http://commons.wikimedia.org/wiki/File:Logo_petrobras.gif&ei=1JhFUvKtJcaWqAG_1YDgDw&bvm=bv.53217764,d.aWM&psig=AFQjCNE3J1tSxWlLJSROYbTusSmUnj3WQg&ust=1380379185642824



World-class operational performance and expanded footprint provide for continued leverage of a profitable network

1. Adjusted results. See Appendix for reconciliation to comparable GAAP results 2. Calculated Adjusted EBITDA less capital expenditures * TTM

2011 TTM Variance



bps

Return on Assets 21.1% 26.9% +580

bps

Free Cash Flow2 $78.2 $85.1 9%


$-

$40

$80

$120

$160

$-

$150

$300

$450

$600

$750

2011 2012 2013 2014


*

1


Growth Drivers of Industrial Connectivity




AUTOMATION


Various control systems for operating equipment with minimal human intervention



Industrial Investment on the Horizon to Create Smarter, More Connected Infrastructure

Investment is Coming

Manufacturing must invest in more connected,

intelligent systems

Factory Investment Down

Investments below historical average over

the last 5 years

Long term avg: 8%

Projected Source: Morgan Stanley The Wall Street Journal

2009 ‘10 ‘11 ‘12 ‘13 ‘14

-15

5

10%

0

-5

-10

-20

Capacity Utilization Up

2009 2014 50%

55%

60%

65%

70%

75%

80%

85%

66.9%

79.2%

Utilization rates continue to increase

Threshold


Facilitating The Industrial Internet Of Things

Higher Productivity

Goals

Single-Piece Flow Model

Higher Automation

More Nodes / Higher

Bandwidth

Drives More Use of



Focus on Growth Opportunity


Priorities • Drive share and expand

incremental margins • Product innovation in industrial grade

Ethernet connectivity solutions • Sales force aligned with

vertical markets • Grow/Enhance customization

capabilities in all Global regions • Global distribution partnerships to

serve multi-national customers

+

=

2 - 4%

2%

4 - 6%

Market Growth

Share Capture

3 Year CAGR


Industrial IT


Industrial IT Solutions Mission Critical Networking Solutions

Purpose-built mission-critical networking systems that provide the highest confidence of reliability, availability and security

Key Markets • Discrete • Process • Energy • Transportation

Systems

Key Applications • Network Infrastructure • Wireless • Security • Embedded


2014 Market Size: $1.3B • Revenues: $269.4* • 2014 Market Share: 21%

Network Management Software

Security Devices Ethernet Switches Routers and Gateways

Wireless Systems

* TTM plus impact of acquisitions

http://www.ford.co.uk/

http://www.shell.com/



2011 TTM Variance



bps

Return on Assets 53.7% 56.9%2 +320

bps

Free Cash Flow3 $34.9 $41.2 15%


Continued increase of customer value through expansion of Security & Wireless portfolios

$-

$20

$40

$60

$80

$100

$-

$60

$120

$180

$240

$300

2011 2012 2013 2014


1. Adjusted results. See Appendix for reconciliation to comparable GAAP results 2. Excludes impact of Prosoft. 3. Calculated Adjusted EBITDA less capital expenditures * TTM

1

*


Growth Drivers of Industrial IT





SECURITY

WIRELESS


As connections increase, a more intense focus must be placed on securing mission critical applications

More remote workers and applications require the integration of secure, wireless connections with existing wired networks


Transition to the Industrial Internet of Things

Home-grown Networks

Standalone Connections

Wired Connections

Discrete Boxes

Ethernet/IP Networks

Internet Connectivity

Wired and Wireless

Connections

Embedded Networks

Belden is the only supplier that has the

technology leadership, industry

experience and customer intimacy to lead these transitions

Belden is uniquely suited as a trusted advisor by industrial customers across key market transitions positioning us for growth and share capture


End user concerns Wireless Benefits

Steady Adoption of Wireless Technology Continues

CAPACITY

RELIABILITY

SECURITY

• Less expensive • Faster to deploy • Flexible • Enables mobile

access

Belden launched the industry’s most

reliable solution in 2014 to allow customers to

experience the benefits of wireless

Hirschmann OpenBat ranked top wireless product in China by Control Engineering

Adoption of Industrial Ethernet technology enables increased reliability, availability and productivity


A Connected World Creates More Risk

Security solutions must be adapted to the plant environment

80% OF THREATS ARE UNINTENTIONAL

20% INTENTIONAL

• Physical Security and Surveillance • Access Controls • Advanced Network Firewalls • Intrusion Detection • Monitoring and Report

Belden’s layered security approach helps prevent and isolate industrial applications from cyber attack


Facilitating The Industrial Internet Of Things

Higher Productivity

Goals

Single-Piece Flow Model

Increased Security

More Nodes / Higher

Bandwidth

Drives More Use of

Industrial IT


Growth Expansion

Industrial IT

Priorities • Product innovation to meet Industrial

market needs • Be the trusted advisor for Industrial

Network Infrastructure designs • Sales alignment with vertical markets • Leading innovator and advisor in

Security and Wireless

+

=

4 - 6%

2%

6 - 8%

Market Growth

Share Capture

3 Year CAGR


Ross Rosenberg Senior VP, Strategy & Corporate Development

December 2014

M&A


Proven Acquisition Approach Delivers Increasing Value

Three Acquisitions in Broadcast Solutions

since 2012

Broadcast Organic Growth = 5.4%

Growth

Provide for an accelerated growth profile

EBITDA Margin today includes ~240 bps of

accretion as a result of acquisitions

Profitability

Provide for accretive margin profile

Scale

Expand the product portfolio around key end markets for

our customers


Produces Shareholder Value

Note: N = 1,616 companies; # of deals includes all deals; relative deal size for deals with undisclosed value assumed at median sample deal size of 1.3% of market capitalization; cumulative relative deal size 2000-2010 based on sum of relative deal sizes vs. respective prior year-end market capitalization Source: Bain M&A Study 2012; Dealogic; Thomson; Bain SVC Database 2011

Inactives 3.3%

More Frequently

Less Frequently

Acqu

isiti

on F

requ

ency

Mountain Climbers

6.4%

Serial Bolt-Ons

4.5%

Large Bets

4.0%

Selected Fill-Ins

4.6%

Smaller Larger

Relative Deal Size

Total Shareholder Returns

Acquirers provide greater shareholder returns


Buy leading companies… • That fit a strategic framework • With top management teams

Our Inorganic Strategy

• That offer innovative products • With opportunity for significant synergy

TALENTED GLOBAL TEAM

IDENTIFYING ATTRACTIVE OPPORTUNITIES

THAT FIT WITHIN OUR STRATEGIC FRAMEWORK

To FURTHER our LEADERSHIP within each platform

Broadcast Enterprise Industrial Next Platform


Process For Successful Acquisitions

Expanding the product portfolio for our customers around key end markets

Cultivation Acquisition & Integration Measurement Identification &

Evaluation

Industrial Automation

Data Centers

Enterprise

Broadcast

Security

Energy

Transportation Live Streaming

Video

Machine Builders


Well Defined Process and Funnel to Execute Acquisition Strategy

M&A Funnel

Belden identifies leading companies that fit within our strategic framework

Fits Into Strategic Plan

Fills products gaps

Benefits from Belden Business System

Achieves ROIC goal

Accretive to earnings

Meets Financial Hurdles

Identification

Entrance

Cultivation

Close

Negotiation

Leverages secular growth trends

Accretive to growth and margins


Identification

Significant Opportunities to Expand Available Markets

Robust Funnel of Opportunities

Today’s Funnel is 65% Larger Than 2013

Entrance

Cultivation

Close M&A Funnel

> 150 Companies

> $25B PAM Negotiation


Repeatable Approach Leveraging an Experienced Integration Team Customer Satisfaction Market Delivery System

Talent Management Management Capacity

Maintain and enhance through improved quality, delivery, and cost

Increase market share and improve productivity through our unique Market Delivery System

Creating and enhancing career opportunities for talented new and current associates

Experienced team to quickly integrate and drive synergies

The more we do, the better we get


Cash ROIC Performance

Cash ROIC =

NOPAT + Depreciation + Amortization + Tax Synergies

Purchase Price + Capex + Restructuring + Δ Working Capital

Acquisitions > 3 Years 1 < X < 3 Years < 1Year

ACTUAL ROIC 15% 10% On Track to

Hurdle WACC

1 Commercial Synergies 2 Cost

Synergies 3 Tax Synergies 4 Working

Capital


Realizing the Significant Financial Impact

4x

8x

12x

16x EV

/EB

ITD

A M

ultip

le

10% 15% 20% 25% 30% 5%

EBITDA-Capex Margin

E C

D

A

B

Best In Class Peers

A

B

C Legacy Peers

Increased free cash flow margin drives multiple expansion


Strong M&A Process In Place and Funnel Actively Managed

Defined and Disciplined approach to integration preserves value, enhances synergies and quickly delivers ROIC

Track Record of Success dramatic improvement in financial portfolio is evidence of ability to execute future inorganic transactions that create shareholder value

Proven, Repeatable Approach through smart deployment of capital and scaling the portfolio around customers’ needs accelerates growth and improves margins

Unique Cultivation Process leveraging dedicated, internal resources with deep industry connections ensures timely access to attractive targets


December 2014

Financial Overview

Henk Derksen Senior VP, Finance, and CFO


Consistent Financial Performance

1. Estimated 2014 growth at mid-point of guidance for 2014 2. Based on mid-point of guidance. Adjusted results. See appendix for reconciliation to comparable GAAP results. 3. Management’s estimated 2014 results. See appendi x for reconciliation to comparable GAAP results. 4. ROIC Excluding Excess cash. Based on mid-point of guidance.

THREE YEAR FINANCIAL GOALS

2014

Growth1 8 - 10% 10.7% 1.2% Organic

EBITDA2 18 - 20% 15.6% + 380 bps since 2010

Free Cash Flow3 Exceed Net Income 101% 10 Straight

Years

Return on Invested Capital4 13 - 15% 12.9% +30 bps y/y


$-

$500

$1,000

$1,500

$2,000

$2,500

2010 2011 2012 2013 2014

Consistent Revenue Growth M

illio

ns

8.9% CAGR

Note: 2014 Revenues based on Full Year mid-point of guidance.


$-

$500

$1,000

$1,500

$2,000

$2,500

2010 2011 2012 2013 2014

A Balanced Source Of Revenues

A balanced portfolio across markets and geographies

Broadcast Enterprise Industrial

Mill

ions

Note: 2014 revenues based on Q3 2014 mix of revenues

Divestitures


Balanced Exposure to Attractive End Markets

Industrial markets correlate to industrial capital expenditures

Enterprise markets correlate to non-residential construction and IT spend

Broadcast markets correlate to the 4-Year Broadcast IT cycle and residential construction

End Market Business Cycles

Industrial Enterprise Broadcast

Lower Volatility of Consolidated Revenues

Independence of each market provides consistency

Industrial markets correlate to industrial capital expenditures

Enterprise markets correlate to non-

residential construction and IT spend

Broadcast markets correlate to the 4-Year Broadcast IT cycle and residential construction


• EBITDA margin aligns to valuation

• EBITDA is better aligned to cash flow


Generate Cash

Improve the Portfolio

BUSINESS MODEL

• EBITDA margin allows for easier peer group comparisons

The Importance of EBITDA Margins

EBITDA offers better insight to shareholders

01

02

03


OP Margin EBITDA Margin


9.1% 9.9%

11.1%

13.8% 13.8%

4.0%

8.0%

12.0%

16.0%

20.0%

2010 2011 2012 2013 2014Operating Profit %

Solid Progress On Margins

Operating Profit Margin (%)1

Prior OP Margin Goal:

14 - 16%

1. Adjusted results. See appendix for reconciliation to comparable GAAP results. * Note: 2014 estimated based on mid-point of guidance


2.7%3 1.8% 1.9%

1.9% 1.8%

4.0%

8.0%

12.0%

16.0%

20.0%

2010 2011 2012 2013 2014Operating Profit % Depreciation %

New EBITDA Margin Goal:

18 - 20%

Solid Progress On Margins

EBITDA Margin (%)1

New goal provides for between 240 and 440 basis points of margin expansion 1. Adjusted results. See appendix for reconciliation to comparable GAAP results. 2. 2014 based on mid-point of guidance 3. Excludes impact of discontinued operations 4. Difference in depreciation expense from GAAP to Adjusted results.

11.8% 11.7% 13.0%

15.7% 15.6%2

4


A Path To Increased Profitability

The transformation will continue to drive margin expansion

10.0%

12.0%

14.0%

16.0%

18.0%

20.0%

2014 Leverage Mix Productivity InorganicActivities

2017

15.6%

170 bps 50 bps

50 bps

170 bps 20.0%


Driving Further Multiple Expansion

4x

8x

12x

16x

EV/E

BIT

DA

Mul

tiple

10% 15% 20% 25% 30% 5% EBITDA-Capex Margin

D C

E

A B

Best In Class Peers

A

B

C Legacy Peers 2005

Increased EBITDA - Capex margin drives multiple expansion


$1.80

$3.03 $3.16

$4.46 $4.24

$0

$1

$2

$3

$4

$5

2010 2011 2012 2013 2014*FCF Per Share

High Quality Earnings: Free Cash Flow Generation

Belden has delivered free cash flow in excess of net income every year since 2005

1. Adjusted results. See appendix for reconciliation to comparable GAAP results

* Based on management’s best estimate.

FCF % of Net Income FCF per Share

78.1% Comp A

94.1% Comp C 93.6% Comp B

103.0% Belden

- Trailing 48 months

1


2014 Sources And Uses Of Cash

(in millions)

A strong balance sheet will allow for continued execution of the strategic plan

$613

$348

$42 $795

$-

$300

$600

$900

$1,200

$1,500

Beginning Cash Notes Offerings Cash Flow fromOperations

Acquisitions ShareRepurchases &

Dividends

Capex Ending Cash

$450

$228

$106

1

1. Based on management’s best estimate and adjusted for cash payments as part of Grass Valley restructuring. These payments are included in the cost of acquisitions.


Dry Powder Provides Flexibility and Opportunity

Belden is well-capitalized and strategically advantaged

Result into $1 Billion+ in dry powder

Excess Cash ~$700 million

Committed Deal Capacity $300 million+


A Quality Balance Sheet with Long Term Maturities

Fixed long term debt with no significant maturities until 2020

Fixed, long-term maturities combine attractive rates with certainty of interest

payments for years to come

Average Cost of Debt = 5.7%

Note: Pro forma debt maturity schedule reflects expected TLB amortization Euro-denominated debt based on conversion rate at 11/20/14

$3 $3 $3 $3 $3 $8

$234

$700

$625

$200

$-

$200

$400

$600

$800

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024


• Product innovation • Productivity

improvement • Capital expenditure

A Disciplined Capital Deployment Strategy

Innovation and Market Expansion

Share Repurchase M&A

Invest in growth opportunities

Repurchase Belden stock at attractive prices

Identify product and market opportunities, and acquire with

a disciplined approach

• Repurchased 6.3 million shares at $44.77 average

• ~13% of outstanding shares

• $281M spent since 2011

• $2.1 billion spent since 2007

• >15% Cash ROIC on acquisitions made before 2011

Deploy capital to highest ROIC project

2014 ROIC* = 12.9%

* ROIC excluding excess cash based on mid-point of guidance


* ROIC excluding excess cash

Note: Q4 2014 ROIC is based on the mid-point of guidance

Return on Invested Capital

8.7% Cost of Debt

5.7% Cost of Debt

*

7%

9%

11%

13%

15%

17%

Q4 2011 Q4 2012 Q4 2013 Q4 2014WACC (%) ROIC (%)

12.9% ROIC


Consistent Financial Performance

THREE YEAR FINANCIAL GOALS

Revenue Growth 8 - 10%

EBITDA Margin1 18 - 20%

Free Cash Flow Exceed Net Income


1. Adjusted results. See appendix for reconciliation to comparable GAAP results


Accelerating Shareholder Value with Strong Financial Performance

Balanced

Profitable

Well Capitalized

Value Creating

Consistent growth and balance across regions and platforms drives predictable results

Business transformation delivering an improved business model

Excellent cash flow generation, low cost of capital creates significant strategic advantage

Disciplined approach to deploying capital creates shareholder value

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