delphi - kevin clark - keynote
TRANSCRIPT
Kevin P. Clark Senior Vice President and
Chief Financial Officer
Background
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1993-1994 Automotive
1995-2006 Healthcare
2007-2009 Private Equity
2010-Present Automotive
Years Industry
2
1987-1993 Automotive
S&P 500: 1987-Present
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3
200
400
600
800
1,000
1,200
1,400
1,600
Source: Capital IQ
Recession +
Persian Gulf War
Recession +
Tech Bubble Burst
“Great” Recession +
Financial Crisis
September 11 +
War on Terror, Afghanistan
S&P 500 Index
Points
Fisher Scientific Overview
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4
Background
– 1981-1991: Subsidiary of AlliedSignal Corporation and Successors
– 1991: IPO
– 1998: Leveraged Recapitalization
– 2001: Re-Entered Public Markets
– 2006: Merged with Thermo Electron
Originally a North American Distributor of Scientific Research Products
– Systematically Transformed the Company into a Global Provider of Products, Services and
Technology through 65 Transactions
Fisher Stock Price Appreciation: 1991-2006
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1 Represents Fisher Scientific and S&P 500 performance from December 1991 IPO to November 2006 merger with Thermo Electron. 2 Financial data excludes non-recurring items, acquisition and integration costs and 123r expenses. 3 Twelve months ended September 30, 2006. 4 Includes Lab Workstations. Lab Workstation’s 2006 revenue assumed to be $50.5 million per quarter (Q4 2005 run rate) and 2006 operating income assumed to be breakeven. 5 Free cash flow is defined as operating cash flow less capital expenditures.
26% Annualized Return vs. S&P 500 Return of 9%1
($ mm) 19912 20062,3,4
Sales $758 $5,962
OI 37 821
OI% 5% 14%
FCF5 $42 $497
Market Cap $218 $11,888
Liberty Lane Partners Overview
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Background
– Founded in 2007
– Target Middle Market Companies
– Concentrated Portfolio Approach
– Significant Partner Capital Commitment
Investment Strategy Focused on Long-Term Value Creation
– Profit and Cash Flow Growth Opportunities
– Capital Structure and Tax Planning Initiatives
10 Portfolio Investments Creating 5 Business Platforms
– Industrial Distribution
– Healthcare Distribution
– Pharmaceutical Services
– Specialty Materials
– Business Services
Delphi Highlights
Successful Transformation into a Premier Global Automotive Supplier
Positioned to Benefit from Volume and Vehicle Content Growth
Advanced Technologies Delivering Safe, Green and Connected Products
Flexible and Lean Cost Structure with a Low-Cost Footprint
Ability to Invest for Growth Across all Points of the Industry Cycle
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1 Since 2005 2 Excludes one non-qualified, unfunded, closed and frozen pension plan with a liability of $83M as of 12/31/10 3 As of 12/31/11
Delphi’s Transformation
Business Portfolio Restructuring
Right-Size Cost Structure
Address Legacy Costs
Right Products, Customers & Geographies
• Selectively reduced business units from 27 to 101
• Core product lines reduced from 119 to 331
• Streamlined segments from 7 to 41
• 91% of hourly workers in low cost countries
• Reduced global headcount by ~22% to 143K1
• Reduced U.S. workforce by ~88% to 5K1
• Closed over 70 sites1
• Eliminated U.S. Defined Benefit Pension Liability2
• Eliminated U.S. OPEB Liability
• No single customer over 19% of sales3
• N.A. market reduced to 32% of sales3
• Emerging markets increased to 23% of sales3
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Industry Leading Cost Structure
$ Billions
EBITDA breakeven level assumes constant product mix
Reduced EBITDA Breakeven Level EBITDA Margin – Peak to Trough
H1 2012 14.3%
X
Lean Cost Structure Creates Significant Operating Leverage
$16.0
$10.3
2011 Revenue 2011 Breakeven Sales Level
$5.7B Above
Breakeven
Trough
~9%
~15%
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Peak
-50%
0%
50%
100%
150%
200%
250%
300%
350%
S&P 500 Auto Suppliers Delphi
Delphi Stock Price Performance: 2009-Present
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Peer Group includes - Denso Corp, BorgWarner, Aisin Seiki, Continental, Autoliv, Federal-Mogul, Johnson Controls, Lear Corp, Magna International, Sumitomo Electric, TRW Automotive, Valeo, Visteon, Harman International and Tenneco Returns as of 9/14/12
Since Since
IPO Emergence
Auto Suppliers +20% +59%
S&P 500 +21% +39%
Delphi +49% +318%
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Need to be Actively Engaged in the Business
An Ownership Mentality
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Need to be Actively Engaged in the Business
Must Understand the Markets Served
An Ownership Mentality
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Need to be Actively Engaged in the Business
Must Understand the Markets Served
Need to Provide a Clear Line of Sight into the Business
An Ownership Mentality
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Need to be Actively Engaged in the Business
Must Understand the Markets Served
Need to Provide a Clear Line of Sight into the Business
Understand that Management Matters
An Ownership Mentality
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Need to be Actively Engaged in the Business
Must Understand the Markets Served
Need to Provide a Clear Line of Sight into the Business
Understand that Management Matters
Focus all Activities on Increasing Shareholder Value
An Ownership Mentality
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