© 2014 Belden Inc. | belden.com | @BeldenInc
Roel Vestjens President, Broadcast Solutions
May 2015
Broadcast Solutions
© 2014 Belden Inc. | belden.com | @BeldenInc 2
Our commentary and responses to your questions may contain forward-looking statements, including our outlook for the 2015 second quarter and full year. Forward-looking statements include statements regarding future financial performance (including revenues, expenses, earnings, margins, cash flows, dividends, capital expenditures and financial condition), plans and objectives and related assumptions. Belden undertakes no obligation to update any such statements to reflect later developments, except as required by law. Information on factors that could cause actual results to vary materially from those discussed today is available in the press release announcing 2015 first quarter results, our most recent Annual Report on Form 10-K as filed with the SEC on February 23, 2015 (including those discussed under “Risk Factors” in Part I, Item 1A and in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7), and our subsequent filings with the Securities and Exchange Commission.
Safe Harbor Statement
Non-GAAP Measures On this call we will discuss some non-GAAP measures (denoted by footnote) in discussing Belden’s performance, and the reconciliation of those measures to the most comparable GAAP measures is contained within this presentation or available at our website www.Belden.com under Investor Relations.
© 2014 Belden Inc. | belden.com | @BeldenInc 3
Belden’s Business Transformation
2005
2008
2012
2015
Strategy, Culture and Values
BUILD The Foundation
Belden Business System
POSITION For Accelerated Value Creation
Market and Geographic Footprint
Consistent Financial Performance
Portfolio Expansion
Talent/ Leadership
SCALE THE BUSINESS PLATFORMS AROUND
THE CUSTOMER
Belden TODAY
Belden’s transformation has resulted in a… Global Signal Transmission Solutions Company
© 2014 Belden Inc. | belden.com | @BeldenInc 4
A Global Signal Transmission Solutions Company
Broadcast Enterprise Connectivity
Industrial Connectivity Industrial IT Network
Security
Served Available Market Size $4.9B $3.3B $4.0B $1.3B $4.3B
Long-term Market Growth Rate1 3 - 5% 1 - 3% 2 - 4% 4 - 6% 10 - 12%
TTM Revenue2 $975.7M $452.1M $676.0M $260.4M $165.0M Market Share2 20% 14% 17% 20% 4% TTM EBITDA Margin3 14.6% 14.5% 15.8% 19.0% 26.7%
Key Markets
• Broadcast Studios
• Broadband Connectivity
• Finance • Healthcare
• Discrete • Process • Energy • Transportation
• Security and Vulnerability
Applications
Creation
Aggregation
Delivery
Data Center
Local Area Network
Machine Control
Operation Technology
Network Security
Payment Systems
Utilities / Energy
Healthcare
Retail Data
1. Served addressable market. 2. Based on TTM revenues plus impact of acquisitions 3. Based on TTM. Adjusted results. See appendix for reconciliation to comparable GAAP results.
© 2014 Belden Inc. | belden.com | @BeldenInc 5
Belden: Leading the Way in an Interconnected World
Certainty Unmatched product and manufacturing excellence for mission-critical applications
Innovation Continuous advancement of signal transmission solutions for a wide-range of enterprise, industrial and broadcast applications
Trust A global partner providing the network expertise and support that helps enable our customers' success
Customers Rely on Belden for…
© 2014 Belden Inc. | belden.com | @BeldenInc 6
Cable and Connectivity
Interfaces and Routing
Playout Systems
Camera Mounted Fiber Solutions
Monitoring Systems
In-Home Network
Outside Plant
Broadcast Solutions Leading Video Production Solutions and Connectivity Systems
Leading provider of production, distribution and connectivity systems for television broadcast, cable, satellite and IPTV industries
Key Markets • Outside Broadcast • Sport Venues • Broadcast Studios • Service Providers (Cable,
Broadband, Satellite, Telecom)
Key Applications • Live Production Signal Management • Program Playout for
Broadcasters • Monitoring for Pay TV
Operators • Broadband Connectivity • Tap-to-TV
Solutions Representative Customers
2014 Market Size: $4.9B • Revenues: 975.7M* • Market Share: 20%
* TTM. Adjusted results. See appendix for reconciliation to comparable GAAP results.
© 2014 Belden Inc. | belden.com | @BeldenInc 7
2014 Highlights and Financial Performance
Scaling the platform to capture customer share and secure market leadership
1. Adjusted results. See Appendix for reconciliation to comparable GAAP results 2. Calculated as Adjusted EBITDA less capital expenditures
2011 2014 Variance
EBITDA1 $30.2 $139.3 361%
EBITDA %1 9.6% 15.0% +540 bps
Free Cash Flow2 $25.5 $105.9 315%
Revenues and Profitability (in millions) EBITDA ($) Rev ($)
$-
$40
$80
$120
$160
$200
$-
$200
$400
$600
$800
$1,000
2011 2012 2013 2014
Revenues EBITDA
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Key Trends Driving the Broadcast Market
Expanded broadcast platform enables Belden to capitalize on these trends
4K and Automation driving more infrastructure investments
More Over the Top content
offered by broadcasters and
non-traditional providers
IP Transition gaining
momentum in the broadcast studio
Video consumption is
growing at an unprecedented
rate
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Traditional Broadcast Environment
Distributors
Network Operators
Aggregators
Broadcasters
Creators
Studios
Consumers
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Over the Top (OTT)
Evolution of the Broadcast Environment
Creators Aggregators Distributors
Network Operators Broadcasters Studios
Consumers
Complexity of the infrastructure and delivery model driving the need for automation
200+
Dev
ices
© 2014 Belden Inc. | belden.com | @BeldenInc 11
Key Trends Driving the Broadcast Market
Expanded broadcast platform enables Belden to capitalize on these trends
4K and Automation driving more infrastructure investments
More Over the Top content
offered by broadcasters and
non-traditional providers
IP Transition gaining
momentum in the broadcast studio
Video consumption is
growing at an unprecedented
rate
© 2014 Belden Inc. | belden.com | @BeldenInc 12
Video Traffic will reach 80% in 20181
1.3 million videos viewed each minute1
10x CAGR of data consumption since 2009
Significant Growth In Video
Percent of Bandwidth Consumed By Video2
30%
43%
49%
58% 61%
64%
0%
10%
20%
30%
40%
50%
60%
70%
2009 2010 2011 2012 2013 2014E
1. Cisco VNI June 2014 2. Sandvine Global Internet Pehnomena Reports (2012-2014), North America Fixed
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Consumption Driving Demand for Faster Internet Speeds
Online M r
10 a.m. 2 p.m.
6 p.m. 10 p.m.
2 a.m.
Video 64%
Current Home Infrastructure
We provide unique, patented solutions for in-home connectivity. As consumption increases, the home and distribution network will need upgrades.
Average Broadband Speed is 16 Mbps
48 Mbps Average Fixed Broadband speed by 2018
Belden Entry
Not Belden
© 2014 Belden Inc. | belden.com | @BeldenInc 14
Key Trends Driving the Broadcast Market
Expanded broadcast platform enables Belden to capitalize on these trends
4K and Automation driving more infrastructure investments
More Over the Top content
offered by broadcasters and
non-traditional providers
IP Transition gaining
momentum in the broadcast studio
Video consumption is
growing at an unprecedented
rate
© 2014 Belden Inc. | belden.com | @BeldenInc 15
4K gaining Momentum – TVs Available for the Home
Production quality gains viewers, demands new infrastructure investments
Source: IHS Electronics & Media
Vendors aggressively pushing 4K Ultra HD
Accelerated adoption in 2017
© 2014 Belden Inc. | belden.com | @BeldenInc 16
4K Tells Better Stories
84 lens mount
LDX Camera
NVISION Routing
Karrera/ Kayenne
Edius NLE
Telecast Fiber
Copperhead
Densite Modular
K2 Dyno Replay
K2 Summit Servers
Kaleido Monitoring
4K Solutions
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Productivity Challenges Require Automation Investments
OTT content must be available immediately after
airing for consumption on demand
Broadcasters Must Do More With Less • Need to automate production • Willing to invest in Capex as long as it decreases Opex • Achieve breakeven on investment within 1 Year
Belden helps customers be more agile in an ever-changing production environment
Multiple Viewing
Platforms
Increased channel count
Advertising revenue
per channel decreasing
© 2014 Belden Inc. | belden.com | @BeldenInc 18
Key Trends Driving the Broadcast Market
Expanded broadcast platform enables Belden to capitalize on these trends
4K and Automation driving more infrastructure investments
More Over the Top content
offered by broadcasters and
non-traditional providers
IP Transition gaining
momentum in the broadcast studio
Video consumption is
growing at an unprecedented
rate
© 2014 Belden Inc. | belden.com | @BeldenInc 19
Benefits of IP for Broadcasters
IP Transition Underway in the Broadcast Market
Belden’s experience with environments involving multiple applications, protocols and interconnections helps customers easily transition to an IP environment.
0%
20%
40%
60%
80%
100%
1985 1990 1995 2000 2005 2010 2015 2020
Enterprise Industrial Broadcast
IP Adoption Over Time
Multiple video streams over a single Ethernet cable
Ability to integrate video from multiple remote facilities
Format agnostic (SD, HD, 4K, or OTT)
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Glass-to-Glass IP Solution
IP from Creation to Playout: Maximizing Business Flexibility
Migration Flexibility • Existing facilities • Greenfield sites
Agile Infrastructure • COTS IP Fabric • Deterministic IP • 4K over 1 wire
Expansive Control • SDN for unified,
“Broadcast” control
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Belden Offers the Most Complete Portfolio
IN THE FIELD IN THE STUDIO
IN THE CONTROL ROOM IN THE HOME
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The Importance of Scale
$68 $57
$30
$-
$20
$40
$60
$80
BeldenBroadcast
Competitor A Competitor B
Research and Development
Belden has a competitive edge in terms of available dollars for R&D spend
Global Customer Reach
Canada
Mexico
Latin America
China
Brazil
Australia
Russia
Japan
Italy
Spain
France Germany
UK Ireland
Turkey
Dubai India Singapore
America
© 2014 Belden Inc. | belden.com | @BeldenInc 23
Belden’s Broadcast Solutions Align with Industry Imperatives
Improve Content Production Quality
Create More Content Air it Faster
Broadband Connectivity Quality
Reduce OpEx
Innovative Infrastructure
Automated Processes
Broadband Quality
IP Connectivity
Industry Imperatives Belden Strengths
© 2014 Belden Inc. | belden.com | @BeldenInc 24
Growth Expansion
Broadcast
+
=
3 - 5%
2%
5 - 7%
Market Growth
Share Capture
3 Year CAGR
Priorities • Leverage scale to serve our customers
globally • Continue to differentiate through R&D
investment • Utilize past experiences to drive IP
convergence in the broadcast industry • Provide unmatched quality, delivery
and cost effectiveness to customers