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Investor Overview Presentation

Investor Overview Presentation

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Investor Overview Presentation Investor Overview Presentation Presentation Transcript

  • Insert pictures into these angled boxes. Height should be 3.44 inches. Investor Overview Q4 FY13 © 2013 Rockwell Collins. All rights reserved.
  • Safe Harbor Statement This presentation contains statements, including certain projections and business trends, that are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those projected as a result of certain risks and uncertainties, including but not limited to the financial condition of our customers, including bankruptcies; the health of the global economy, including potential deterioration in economic and financial market conditions; the rate of recovery of the commercial OEM production rates and the aftermarket; the impacts of natural disasters, including operational disruption, potential supply shortages and other economic impacts; cybersecurity threats, including the potential misappropriation of assets or sensitive information, corruption of data or operational disruption; delays related to the award of domestic and international contracts; delays in customer programs; unanticipated impacts of sequestration and other provisions of the Budget Control Act of 2011; the continued support for military transformation and modernization programs; potential adverse impact of oil prices on the commercial aerospace industry; the impact of terrorist events on the commercial aerospace industry; declining defense budgets resulting from budget deficits in the U.S. and abroad; changes in domestic and foreign government spending, budgetary, procurement and trade policies adverse to our businesses; market acceptance of our new and existing technologies, products and services; reliability of and customer satisfaction with our products and services; favorable outcomes on or potential cancellation or restructuring of contracts, orders or program priorities by our customers; recruitment and retention of qualified personnel; regulatory restrictions on air travel due to environmental concerns; effective negotiation of collective bargaining agreements by us and our customers; performance of our customers and subcontractors; risks inherent in development and fixed-price contracts, particularly the risk of cost overruns; risk of significant reduction to air travel or aircraft capacity beyond our forecasts; our ability to execute to our internal performance plans such as our productivity and quality improvements and cost reduction initiatives; achievement of our acquisition and related integration plans; continuing to maintain our planned effective tax rates; our ability to develop contract compliant systems and products on schedule and within anticipated cost estimates; risk of fines and penalties related to noncompliance with laws and regulations including export control and environmental regulations; risk of asset impairments; our ability to win new business and convert those orders to sales within the fiscal year in accordance with our annual operating plan; and the uncertainties of the outcome of lawsuits, claims and legal proceedings, as well as other risks and uncertainties, including but not limited to those detailed herein and from time to time in our Securities and Exchange Commission filings. These forward-looking statements are made only as of the date hereof and the company assumes no obligation to update any forward-looking statement. © 2013 Rockwell Collins. All rights reserved. 2
  • What we do Communications and electronics products, systems and solutions for commercial aviation and military applications worldwide 52% Avionics 58% 48% Commercial Air transport ~50% ‣ Navigation ‣ Automated flight control Displays/surveillance ‣ Aviation services ‣ Government Communications ‣ 2013 Sales: $4.61 Billion ‣ Integrated electronic solutions ‣ Information management systems ‣ Comm products 24% Simulation and training Business & regional ~46% Surface sol 10% Nav products 8% © 2013 Rockwell Collins. Wide-body IFE 4% All rights reserved. 3
  • Strong performance through market cycles Results since 2002 24% 12% 6% CAGR CAGR Revenue growth EPS growth Average ROIC Returned $5.7 Billion to Shareholders through Dividends and Share Repurchases © 2013 Rockwell Collins. All rights reserved. 4
  • How did we do it? 1 2 3 Increased segment operating margins 650 bps GS 7% sales CAGR CS 4% sales CAGR Balanced & diversified business model © 2013 Rockwell Collins. All rights reserved. Lean focus and operating model drive margin performance Invested 19% of sales in research and development Sustained investment in new products 5
  • Historically returned > 70% cash to Shareowners through dividends & share repurchases $ Billions 2007-2013 Cash generated $ Net increase in debt 4.4 Capital Allocation 19% 19% 0.8 Cash to deploy $ 5.2 Dividend $ 8% 1.0 Share repurchase 2.8 Acquisitions 0.4 Capital expenditures 1.0 $ © 2013 Rockwell Collins. All rights reserved. 5.2 54% Dividend Share repurchases Acquisitions Capital expenditures 6
  • Strengths of the Government Systems business ‣ 90%+ fixed price contracts ‣ Leverage commercial technologies ‣ Highly exportable products ‣ 75% of revenue from legacy platforms and products © 2013 Rockwell Collins. All rights reserved. Value Created: >20% operating margins Strong cash flow generation 7
  • Avionics – characteristics ‣ Civil airspace interoperability ‣ Comprehensive product lines ‣ Commercial platform positions ‣ Program execution acumen ‣ Incumbent positions © 2013 Rockwell Collins. All rights reserved. 8
  • Avionics – drivers ‣ Tanker & Transport KC-46 KC-10/KC-135 ‣ Rotary Wing CH-47 Chinook UH-60 Blackhawk ‣ AW Family (AW 101/149/169/189) Civil Dual Use (ex. S-70/92, EC135) Fighters International F-15 F-35 ‣ C130 Upgrades KC-390 Legacy Upgrades (EFA, Gripen, F-18) Special Mission /Unmanned Aerial Systems AWACS E-6 Shadow Predator Manned/Unmanned Convergence ‣ Simulation and Training F-35 UH-60 Blackhawk © 2013 Rockwell Collins. E-2D Hawkeye All rights reserved. 9
  • Communication Products ‣ Characteristics: ‣ Large airborne installed base ‣ Broad Networked Connectivity capabilities ‣ Position on ground modernization program ‣ Communication Products: ‣ Airborne radios (ARC-210) ‣ Networked data links (Link 16, TTNT) ‣ Ground radios (JTRS HMS, SATCOM) © 2013 Rockwell Collins. All rights reserved. 10
  • Navigation Products ‣ Characteristics: ‣ Market leader in military GPS products ‣ Portfolio in transition ‣ Position on modernization program ‣ Navigation Products: ‣ Handheld GPS (DAGR, MicroDAGR) ‣ Modernized GPS User Equipment (MGUE) ‣ Miniaturized GPS products (MicroGRAM) © 2013 Rockwell Collins. All rights reserved. 11
  • Surface Solutions ‣ Characteristics: ‣ Specialized systems integration leveraging core capabilities ‣ More entrepreneurial segment of business ‣ Surface Solutions: ‣ Firestorm targeting systems ‣ Electronic warfare (Signals Intelligence Receivers) ‣ Range system upgrades (CRIIS) ‣ Precision landing systems (JPALS) © 2013 Rockwell Collins. All rights reserved. 12
  • Strengths of the Commercial Systems business ‣ Long-cycle business Value Created: ‣ High barriers to entry ‣ Leveraged operating model Revenue growth 40-50% incremental margins ‣ Strong IP portfolio © 2013 Rockwell Collins. All rights reserved. 13
  • Commercial Systems FY13 sales Wide-Body IFE 4% Wide-Body IFE 4% Air Transport ~ 50% © 2013 Rockwell Collins. Bus. & Regional Jets ~ 46% All rights reserved. OEM ~ 55% Aftermarket ~ 41% 14
  • Market outlook ‣ Air Transport ‣ Robust OEM backlog ‣ Increasing production rates ‣ Business & Regional ‣ Mixed market environment with strength at high-end ‣ Light jet demand recovery continues to lag © 2013 Rockwell Collins. All rights reserved.
  • New aircraft driving OEM revenue growth 737 Max Displays 787 Rate Increase Boeing Airbus A350 Irkut MC-21 COMAC Mitsubishi MRJ* CSeries* & Learjet 85* Bombardier Gulfstream C919 ARJ-21 Global 7000* & 8000* G280* & G650 Embraer Legacy 500* Legacy 450* Piaggio Aero MPA Unannounced platforms 3 Platforms* 2012 © 2013 Rockwell Collins. 2013 All rights reserved. 2014 2015 * Pro Line Fusion Platforms 2 Platforms* 2016 2017+ 16
  • Growth drivers – Aftermarket ‣ Robust & increasing install base driving service & support demand ‣ Sparing for new aircraft ‣ Avionics & cabin upgrades ‣ Regulatory mandates ‣ Next Gen airspace modernization © 2013 Rockwell Collins. All rights reserved. 17
  • Long-term value creation Organic sales growth EPS growth Operating cash flow as percent of PAT Return on invested capital © 2013 Rockwell Collins. All rights reserved. Mid-single digit Low double-digit 100%-125% 20%-25% 18