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Published byJudith Miles Modified over 8 years ago
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Oppenheimer Industrial Growth Conference May 14, 2014
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Page 2 Forward Looking Statements Certain statements contained in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of forward-looking words or phrases such as “expects”, “projected”, “scheduled”, “could”, “believe”, “anticipated” and others. Such forward-looking statements involve numerous assumptions, known and unknown risks, uncertainties and other factors which may cause actual and future performance or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Such factors include: achieving sales levels to fulfill revenue expectations; unexpected costs or charges, certain of which may be outside the control of the Company; general economic and business conditions; and competition. For additional information identifying factors that may cause actual results to vary materially from those stated in the forward-looking statements, refer to our most recent 10-K for the year ended December 31, 2013 that is filed with the SEC and is also available at www.hubbell.com.
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Company Overview
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Performance Sales ($ Billions) OP Margin (% of Sales) Page 4 Strong financial performance
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Market Positioning Hubbell’s Focus Commodity Type Products Branded Products Broad Number of SKUs Serving Distributors Apparatus $16 Billion Electrical Components and Connectors $39 Billion Wire, Conduit, Lamps and Ballasts $23 Billion Large, Global Competitors Capital intensive Difficult to generate margin U.S. Electrical Components Market 2014 F $78 Billion Page 5 We are positioned in the most attractive segment of the market
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Hubbell Today ($ Billions) Electrical Segment Power Systems Power Systems Electrical Systems Products Lighting Segment Platform Business Addressable Market 2013 Sales Key Brands $ 12$ 8$ 4 $ 0.8$ 0.9 Page 6 $ 1.5 Hubbell is well positioned in large and diverse end markets
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Hubbell Strategic Objectives Serving Our Customers Operating with Discipline Growing the Enterprise ReliableElectrical Solutions Developing Our People Our Strategic Objectives Are The Critical Few Page 7
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Q1 2014 Results and Outlook
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Page 9 1Q 2014 Summary Net sales increased 3% Acquisitions contributed 4% Demand impacted by weather Operating margin of 13.8% - up 60 bps Productivity Lower facility consolidation costs Diluted EPS of $1.08 R&D Tax credit included in prior year Good operating performance despite weather disruptions
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Page 10 1Q 2014 Sales Acquisitions +4%, FX -1% SalesEnd Markets ($Millions) +3% Non-residential Industrial Utility Residential Broad based growth Distribution Transmission Industrial production / extractive industries New construction Renovation and relight High voltage test equipment Weather broadly impacted markets
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Page 11 1Q 2014 Operating Profit Improvement in both areas contributed to margin expansion ($Millions) Operating Profit OP% +7% Drivers YOY ∆ Comments Gross MarginIncreasedProductivity Lower facility consolidation costs S&A %DecreasedCost control
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Page 12 1Q 2014 Net Income and EPS Earnings impacted by higher tax rate ($Millions except EPS) Net Income (a) Earnings Per Diluted Share Lower net income Lower shares outstanding Higher tax rate Increased operating profit - 3% - 2%
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Page 13 1Q 2014 Electrical Segment Results Weather contributed to slow start; good operating performance ($Millions) Sales Markets Performance Acquisitions added 4% Residential strong All markets negatively impacted by weather Productivity and price in excess of cost increases Acquisitions additive to OP but not to margin Operating Profit +5% +11%
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Page 14 1Q 2014 Power Segment Results Weather impacted slow start; margin improved on productivity ($Millions) Markets Performance Acquisitions +2%, FX -1%, Price -1% Distribution and transmission flat Negatively impacted by weather Operating Profit -2% +2% Productivity Less facility consolidation costs Unfavorable price / material costs Sales
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Page 15 2014 Capital Structure Strong capital structure provides investment flexibility (a)Includes unamortized discount (b)Non-GAAP Financial measure – see appendix 1
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Page 16 End Markets – 2014 Outlook Overall market growth of 2-3% expected Residential Non-residential Industrial Utility Flat ~10% Estimated % Hubbell Sales 2 to 3% 3 to 4%
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2014 Outlook – Segment Sales Growth Segments (2013 Sales) Power29% Electrical71% 3%Distribution and transmission flat Acquisitions +3% 6 to 7%Non-residential improving Residential solid Industrial low single digit growth Acquisitions +4% Page 17 5 to 6% overall sales increase expected
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Page 18 2014 Outlook Net sales increase 5-6% Acquisitions contribute 3-4% Slower start to year ~(1%) Operating margin expansion of 20-30 bps Acquisitions ~(20) bps Tax rate approximately 32.5% R&D credit excluded Improving top line expected with margin expansion
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