Exhibit 99.1
Robert W. Baird Industrial Conference |
November 10, 2010 |
Vernon J. Nagel |
Chairman, President & CEO |
Forward Looking Statement |
This presentation contains forward?looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995. Statements made herein that may be considered forward?looking include statements incorporating terms such as “expects,” “believes,” |
“intends,” “anticipates” and similar terms that relate to future events, performance, or results of the Company, including, without limitation, statements made regarding the forecast for the non?residential construction market and expected future results. |
Forward?looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the historical experience of Acuity Brands and management’s present expectations or projections. These risks and uncertainties include, but are not limited to, customer and supplier relationships and prices; competition; ability to realize anticipated benefits from initiatives taken and timing of benefits; market demand; li tigation and other contingent liabilities; and economic, political, governmental, and technological factors affecting the Company’s operations, tax rate, markets, products, services, and prices, among others. Please see the risk factors more fully described in the Company’s SEC filings including the Annual Report on Form 10?K filed with the Securities and Exchange Commission on October 29, 2010. |
Profile |
Positioned for Success |
A Bright Future |
Vision & Strategy |
Vision:Market leader by delivering superior lighting solutions |
Strategy:Drive profitable growthby aligning the considerable and unique capabilities and resources of our organization with a keen focus on: |
Customers — Differentiated Lighting Solutions |
Cost — World?Class Efficiency |
Culture — Operational Excellence (Q, D, C, I) |
Company Overview |
N.A. Market Share Leader |
Most recognized brands in the lighting industry |
Mfg Facilities: 17 |
Sales Channels: 14 |
Customers: 5,000 |
Products: 500,000 Active Products 2,000 Product Groups |
Associates: 6,000 |
Industry Leading Indoor & Outdoor Product Portfolio |
North AmericaAcuityProduct TypesMarket SizeBrands$9.3 BillionRanking*USDCommercial Indoor$3.2Outdoor$2.3Residential$1.5 Outdoor |
Industrial$1.0Lighting Controls$0.9Emergency$0.4 |
AB Ranking |
1 |
2 — 4 |
4 |
* Market Share |
Financial Summary($Millions, except Diluted EPS)Operating Profit & Margins |
Diluted EPS |
$261 |
$3.51 |
$222 12.9% |
+21% |
$2.89 |
Margin |
11.3% |
+67% |
Margin |
$152 $154 $158 |
$2.01 |
9.3% 9.7% $1.73 $1.79 |
8.3% |
-43% |
Margin |
Margin Margin |
+215% - -11% |
$67 |
4.1% 5-Yr CAGR $0.55 5-Yr CAGR |
Margin |
13% |
27% |
Net Sales |
$1 965 $2,027 |
$1,841 +3% |
$1,638 +7% |
$1,657 |
+12% |
$1,627 |
-18% - -2% |
5-Yr CAGR |
Flat |
‘05’06’07’08’09’10’05’06’07’08’09’10’05’06’07’08’09’10Note:Financial summary excludes operating results from specialty chemicals business including certain allocations of corporate costs. 2005 operatingprofit includes restructuring charge of $19.4 million ($0.32 per diluted share). 2007 operating profit includes a $6.6 million net gain ($0.10 perdiluted share) related to the settlement of a commercial dispute. 2008 operating profit includes a special charge of $14.6 million ($0.21 perdiluted share) for streamlining and simplifying the business following the spin?off of Zep Inc. 2009 operating profit includes a special charge of$26.7 million ($0.40 per diluted share) for streamlining the business. 2010 operating profit includes a special charge of $8.4 million ($0.13 perdiluted share) for streamlining activities. Additionally, 2010 diluted EPS incl udes a $0.16 loss on early extinguishment of debt. |
Financial Summary |
($Millions) |
Free Cash FlowLeverage(Net Debt?to?Capital Ratio)$196$17734%34%$13924%$104$10118%19%$7110% |
‘05’06 ‘07 ‘08 ‘09 ‘10’05 ‘06 ‘07 ‘08 ‘09 ‘10 |
Note: Free Cash Flow is defined as cash flow from operations minus capital expenditures. |
Net Debt?to?Capital Ratio is defined as total debt minus cash divided by total debt minus cash plus total equity. |
Stock Performance — As of August 31, 2010 |
Stock PriceTotal Returns(Adjusted for Zep Spin?Off)(Annualized, Adjusted for Zep Spin?Off) $60$50$40$30$20$10$0Aug-05Aug-06Aug-07Aug-08Aug-09Aug-10 |
1-Yr3-Yr5-YrAcuity22%(3%)11%DJUSEC4%(8%)1%S&P 5005%(9%)(1%)S&P 40012%(4%)2%S&P 6008%(7%)(0%) DJUSEC — Dow Jones U.S. Electrical Components & Equip. Index |
Profile Positioned for Success |
A Bright Future |
Positioned for Success |
Operations |
Market Access |
Portfolio |
Growth Leverage |
Addressable Market |
Positioned for Success- Internal Leverage |
LeanBusiness ProcessesOperating Metrics 2004 — 2010Financial Metrics 2004 — 2010Sales per Associate38%Gross Profit Margin20%Mfg Footprint (Sq Ft)42%Operating Margin52%Op. Working Capital42%Free Cash Flow143%(% of Net Sales) |
Note: Free cash flow is defined as cash flow from operations minus capital expenditures. |
Positioned for Success- Market Access |
Channel Leadership |
Product SegmentsSales ChannelCommercialIndustrialRenovationResi.ControlsC & IDirectHome CenterShowroomUtilitiesNat’l Accts |
Positioned for SuccessPortfolio |
LuminairesControlsAcquisitionsAcquisitionsMark LightingLC&DRenaissanceSensor SwitchWinona2009 — 100+New ProductsNew Products2010 — 100+ |
Positioned for Success- Portfolio |
Growth Through Innovation & Acquisitions |
Indoor |
FunctionalArchitectural |
#1Market Position#1Market Position |
Controls |
#3 #1 |
FunctionalArchitectural#1Market Position#2Market PositionOutdoor |
Positioned for Success- Addressable Market |
Significant Expansion of Addressable N.A. Market |
Prior2010 |
Controls |
Growth |
Renovation |
NewNewConstruction/Construction/TITI |
TI = Tenant Improvements |
Source: Company Estimates |
Profile |
Positioned for Success |
A Bright Future |
A Bright Future |
Market / Macro Trends |
Innovation & Markets |
Strategic Focus |
A Bright Future- North American Market |
2010 ? $9.3 Billion |
Product Segments |
Controls(Sensors &IndustrialModules)11%9% |
Outdoor |
19% |
Comm. & Inst. |
35% |
Residential |
16% |
Other |
10% |
Channels |
ESCOOtherDirect/Nat’l1%7%Accts5% Utilities |
7% |
Lighting |
Showrooms 4% |
Home Centers |
9% |
Electrical |
Wholesalers 67% Source: Frost & Sullivan, Global Insight Construction, NEMA luminaires report, McGraw Hill Canadian Construction, and Company Estimates |
A Bright Future? Macro Trends |
Addressable N.A. Market/Drivers |
$15.6B+68%$2.2BControls$11.0B$1.4BLighting Solutions$1.0BRenovation (Incremental)$9.3B-15%$0.9B$11.0BNew Construction$8.4BTI/Renovation |
200820102015 |
Drivers |
Superior Task Lighting |
Lighting Systems |
Lighting Value/Sq. Ft. |
Energy Efficiency |
Sustainability |
ROI |
Technology |
GDP |
Demographics |
Source: Company Estimates |
A Bright Future? Macro Trends |
New/TIRenovationN.A. Lighting Fixtures MarketGrowth Rates & Value($B)10%8%9%$12Installed$10Base8%7%$100B+$86%Renovation$6Conversion4%3%Opportunity$42%1%$20%$-New ConstructionFY’11FY’12FY’13FY’14FY’151.5% to 2.5% Conversion Rate |
Controls$2.5$2.0Billions$1.5$$1.020% CAGR$0.5 |
$- |
FY’10 FY’11 FY’12 FY’13 FY’14 FY’15 |
Source: Global Insight Construction, NEMA luminaires report, McGraw Hill Canadian Construction, and Company Estimates |
A Bright FutureInnovation |
Efficacy (Lm /Watt) |
System Technology Transformation LED |
150+$0.05 |
120 |
T75oda$0.005y |
Conversion of earlyExpansion on LED MarketMarket ConversionLED Adaptors |
(cents/lm)EngineLumenLightperCost |
Source: Company Estimates |
A Bright FutureInnovation |
50%+ |
LED |
LED &DigitalLightingOtherSystems20% |
All about the Source |
1% |
Phase I |
Source |
LEDOtherOther$8 BLED$4 B |
MainstreamLighting in aIndoor & OutdoorDigital AgeSolutions |
Phase IIPhase IIILighting SolutionsDigital Transformation |
Source: Company Estimates |
A Bright Future- Lighting Solutions |
Orders ofinteractionsIntelligent distributedcontrol and productsolutionsControlsEmbedded ControlsFixturesControlsIndependent lightingcontrols & fixturesFixturesLC&DSSIABL1st Half2nd Half2010CY’09CY’09 |
Integrated Lighting Solutions |
Total solution provider |
providing light and energy management |
2011?2015 |
A Bright Future- Markets |
A Leader in the Evolution of Digital Lighting |
Luminaires |
Education |
Office |
Control |
Devices |
Integrated |
Lighting |
Solutions |
Healthcare |
Industrial |
Commercial |
A Bright Future- Indoor Lighting Solutions |
Quality of |
Lighting |
Experience |
Superior EnergyFinanciallySavingsViable |
IntelligentLong Life andIndoor LightingReliability |
A Bright Future- Outdoor Lighting Solutions |
ROAM Management System |
•Energy/Maintenance |
Savings |
•Extended Life |
•Safety |
System Features |
Smart Photocontrols |
Diagnostics |
Automated Maintenance Scheduling |
Web?based portal |
Network Operation Center |
Strategic Focus? Profitable Growth Strategy |
Exp and Earnings and Cash Flow |
Organic |
Growth |
Operating |
Excellence “3 C’s” |
Grow Market Share |
Financial Goals |
Margins12%EPS Growth15%+ROE20%+Cash FlowExceed net income |
“Consistent Upper?Quartile Performance” Meet or exceed financial goals during an entire business cycle |
Conclusion |
Investment Considerations |
Market leader |
Strong operating/financial leverage |
Product and innovation leadership |
Favorable market trends |
Compelling long?term investment |