Tender offer to acquire June 1, 2011 |
Important notice The planned tender offer described in this presentation has not yet commenced. This presentation is not an offer to buy or the solicitation of an offer to sell securities. At the time the planned tender offer is commenced, Schneider Electric S.A. (“Schneider Electric” or the “Company”) will file a tender offer statement on Schedule TO with the Securities and Exchange Commission (the “SEC”), and Telvent GIT, S.A. (“Telvent”) will file a solicitation/recommendation statement on Schedule 14D-9 with respect to the planned tender offer. The tender offer statement (including an offer to purchase, a related letter of transmittal and other tender offer documents) and the solicitation/recommendation statement will contain important information that should be read carefully before making any decision to tender securities in the planned tender offer. Those materials will be made available to Telvent’s stockholders at no expense to them. In addition, all of those materials (and all other tender offer documents filed with the SEC) Forward-looking Statements This presentation contains forward-looking statements. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. In some cases, you can identify forward- looking statements by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “should,” “strategy,” “will” and other words of similar meaning. The forward-looking statements are based on Schneider Electric’s beliefs, assumptions and expectations of future performance, taking into account all information currently available to the Company. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or are within Schneider Electric’s control. Such factors include, but are not limited to: • intense competition in, and diverse political, legal, economic and other conditions affecting, the markets in which the Company operates; • the Company’s ability to develop new products and services and adapt to changes in consumer preferences; • the Company’s ability to identify external growth opportunities, integrate acquired business successfully and achieve expected synergies; • the Company’s ability to attract and retain qualified management and technical personnel; • potential products liability claims; • the Company’s ability to successfully comply with environmental regulations and standards in the markets in which it operates; • breakdowns or significant interruptions in the Company’s information systems, or difficulties in deploying new information systems; • unfavorable interest rate and foreign currency exchange rate fluctuations; • unfavorable fluctuations in energy and raw material prices, particularly steel, copper, aluminum, silver, lead, nickel, zinc and plastics; • counterparty, liquidity and equity risks; • changes in the laws and regulations of in the markets in which the Company operates; • the Company’s ability to protect its intellectual property; and • costs and liabilities the Company may incur in connection with litigation. This list of factors that may affect the Company’s future performance and the accuracy of any forward-looking statements is illustrative, but by no means exhaustive. The forward-looking statements contained herein speak only as of the date hereof. Except as required by applicable law or the rules and regulations of any stock exchange on which its securities are listed, Schneider Electric expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements contained in this presentation to reflect any change in its expectations or any change in events, conditions or circumstance on which any forward looking statement contained herein is based. will be made available at no charge on the SEC’s website: www.sec.gov. |
Presentation of Telvent and strategic intent |
4 is a leading software solutions provider for efficient management of infrastructure 2010 sales by segment Sales and adjusted EBITDA (in€) 2010 sales by geography Business description 2010 2011e Guidance +5%-+8% 753m 2009* 725m Europe 42% North America 35% Latin America 16% RoW 7% Energy 34% Environment 8% Global services 19% Agriculture 11% Transportation 28% A leading IT software and automation solutions company Specializing in high value-added solutions for real-time management of mission-critical infrastructure Providing customers with: increased reliability and flexibility of distribution, and energy and operational efficiency of infrastructures 15.2% 14.5%-15.5% 1 2 3 As reported by Telvent – non-USGAAP * Excludes a small IT unit disposed in 2010. Including this unit, non-USGAAP sales reached €765m (14.5% EBITDA margin) Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
Industry & OEMs Non-res buildings Data Centres Infrastructure Residential Renewables integration & connection Flexible Distribution Demand Response Efficient home Efficient Enterprise Efficient infrastructure (O&G, Transport, Water) Communication and software at all levels Integration of smart devices and software to drive efficiency of mission-critical infrastructures Fields where Telvent improves our position Other key fields of the smart grid for Schneider Utilities Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 5 |
6 Software capability of Telvent complements and integrates with Schneider Electric positioning EFFICIENT END-USERS THE GRID Best-in-class field devices and sensors Real-time control and security software Energy management suite Operation management Control Devices Software competency (~10,000 people) Full software platform DMS / OMS MDM / GIS SCADA / SaaS* * See glossary on page 19 Real-time operation and analytics Smart grid suite Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
7 Telvent reinforces Schneider Electric’s position in 3 key infrastructure markets SMART GRID EFFICIENT INFRASTRUCTURES SMART CITIES SaaS* & WEATHER SERVICES IT INTEGRATION CAPABILITY SOFTWARE CAPABILITY UTILITIES CITIES, DEPT OF TRANSPORT ELECTRICITY OIL & GAS TRANSPORT ~17% of Telvent sales** ~23% of Telvent sales** ~28% of Telvent sales * Software as a Service (subscription based model) ** Schneider Electric’s own estimates ENVIRONMENT ~20% of Telvent sales** OIL & GAS WATER Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
8 Industry Buildings Data Centres Infrastructure Residential Real time software suite for global grid management Global substation & feeder automation portfolio for Utilities • Advanced Grid supervision • Integration of renewables • Optimize network operations • Safety & Security Reliability & Efficiency Substation Automation Feeder Automation RTU, bay controller, fault detector Protection IEDs MICOM ® SEPAM ® Protection relays 61850 Substation Control Systems We will propose a full smart grid solution, from field devices to management software Smart grid suite Strong project teams Delivery units: US, Canada, Spain, the Balkans DMS* OMS* MDM* GIS* RTU* SCADA* * See glossary on page 19 Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
9 We will have a complete solution offering for Oil & Gas midstream Integrated architecture for Oil & Gas applications • Improved business performance • Optimized TCO • Energy Efficiency • Safety & Security Real Time Oil & Gas solutions to optimize business process & control Efficiency & Productivity Power management Security management Integration IT suite for pipeline management Downstream management Strong project teams Delivery units: US, Canada SimSuite • Online fuel buying and selling analysis • Real time trading platform Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
10 We will have a complete solution offering in the water segment • Network optimization • Energy management • Leak detection • Water quality management Efficiency & productivity Power management Telemetry & automation PAC, PLC, Controllers, HMI, Drives SCADA & RTU Security management Integration Advanced applications • Leak detection • Quality monitoring IT integration with enterprise systems • ERP, GIS, CMMS… Integration with supervisory systems (SCADA) Weather intelligence Strong project teams Delivery units: US, Spain, Australia and Canada Integrated architecture for Power, Control & Security Information management solution to monitor & optimise water networks Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
11 Telvent will be a major contribution to our offers for Smart Cities Energy prices and power outages Traffic congestion and pollution Demand for security Need for environmental care Energy reliability EV charging infrastructure Video security Efficient water networks Efficient transport networks Smart grid suite Flexible distribution Demand-Response Energy efficiency Weather intelligence SMART CITIES Decentralized renewable energies Another layer of communication and intelligence between the key infrastructures of power, water & transport for the efficiency of cities Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
12 Strong geographical fit across most key markets UTILITIES OIL & GAS TRANSPORT WATER Western Europe North America Asia Pacific Rest of World Build on Telvent’s strong footprint in North America, Latin America Enlarge Telvent’s presence in other new economies and Western Europe Eastern Europe Latin America Eastern Europe Middle East - Africa Latin America Latin America Eastern Europe Middle East Latin America Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
Synergies and transaction details |
Complementary business value and positioning will drive €50-60m of synergies Cost synergies Revenue synergies Operational: Software development and procurement savings Non-operational: Listing, dual consolidation, back office efficiency Grid: Selling Telvent solutions to Schneider customers in Western Europe and Asia-Pacific O&G: Selling MV solutions to Telvent customers (Americas) and selling Telvent offer to Schneider customers in other regions Sales impact EBITA impact ~€20-25m ~€250-300m ~€30-35m Full synergy impact ~€250-300m ~€50-60m Water: More comprehensive offering + access to new customers Transp: Introducing Telvent to Schneider contacts in WE/APAC Domain Selected drivers 14 Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
15 Approx. 2/3 of total synergies are expected to be delivered by year 3 2012 2014 €50-60m €35-40m 2016 * Before implementation costs of €20m in 2012 and €15m in 2013 Synergies profile * 1/3 cost synergies, 2/3 revenue synergies 2/3 of synergies should be achieved in 2014, including almost all cost synergies Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
Transaction details * Before implementation costs • EV/EBITDA multiple of ~12x based on 2011 consensus • EPS accretion* from year 1 • Return On Capital Employed above WACC in year 3 • Tender offer launch: mid-June • Squeeze-out process post tender offer • End of tender offer and closing expected in Q3 2011 • Abengoa and certain members of Abengoa and Telvent management agreed to irrevocably tender ~41.5% of shares • Transaction approved by Telvent’s Board of Directors • Tender offer for 100% of Telvent shares at $40 per share (36% premium to past 3m avg.) • Enterprise value at 100%: ~EUR1.4bn, including the purchase of Telvent’s 5.5% senior subordinated convertible notes on an as converted basis Attractive valuation Estimated timeline • Telvent will be kept initially as an autonomous unit • Telvent will be reported under the Energy business 16 Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
17 Conclusion A synergetic and value creating transaction Strong global player in smart grid Leading provider of solutions for efficient infrastructures Reinforced project, software and service capabilities Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 Schneider Electric + Telvent: a very powerful proposition to utility & infrastructure customers |
Appendices |
19 DMS: Distribution Management System OMS: Outage Management System MDM: Meter Data Management GIS: Geographical Information System SCADA: Supervisory Control And Data Acquisition RTU: Remote Terminal Unit SaaS: Software as a Service Glossary Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
20 EBITDA: EBIT before net depreciation and amortization EBITA: EBIT before amortization and impairment of purchase accounting intangibles and impairment of goodwill Definitions Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
21 Contacts & agenda 29 July 20 October 2011 Half-Year Results Q3 2011 Sales Conference call before market opens Conference call before market opens Carina Ho – Head of Investor Relations Tel: +33-1-41-29-83-29 carina.ho@schneider-electric.com Grégoire Rougnon – Investor Relations Manager Tel: +33-1-41-29-81-25 gregoire.rougnon@schneider-electric.com Schneider Electric - Investor Relations – Acquisition of Telvent – June 1, 2011 |
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