Investor Presentation August 2016 - Lumenpulse
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Investor Presentation August 2016
2 Content 1. Who we are and our market 2. Creating value through growth 3. The Lumenpulse advantage 4. Our Acquisition Strategy
3 Who we are
4
Company Overview
To become a world leader in
VISION specification-grade LED lighting
solutions
Founded in 2006
587 employees
Fiscal 2016 Revenues of $145.1M1
Revenue CAGR of 51% for FY 2013 to FY 2016
1 Year ending April 30st 2016
Locations
Footprint
5
Sales Office and Manufacturing Facility
Headquartered in Montreal, Lumenpulse has a Technology Center and Sales Office
growing global reach Sales Office
Regional Sales Management Office (Hong Kong)
and Experience Center (Singapore)
London
Vancouver Québec Manchester
Paris
Montreal HQ
Florence
Boston
Hong Kong
Singapore
6
Operating in a fast growing segment
GENERAL LIGHING MARKET
2015-2019 Forecast
LED Adoption Drivers
Longer lifespan
Increased energy
efficiency2
Greater design flexibility
Regulations /
Environmental benefits
1 Management estimates for the General Lighting Market includes light sources and fixtures for both consumer and professional markets, as well as controls. Controls
include smart and non-smart controls and related services.
2 We believe that the current payback for typical installations is less than three years with paybacks as low as one year for certain LED retrofit applications
7
Specification-grade Lighting Solutions Market
GENERAL LIGHTING MARKET1: $117 G FIXTURES and CONTROLS1: $92 G
Light Sources
& other 20%
40%
~80% 60%
Stock &
Fixtures and Specification
controls
Flow
$55G
$92G
Less pricing pressure
Solutions-driven / Focused on
quality and technological features
Fragmented with smaller players
competing
1Management estimates
8
Our Positioning in the LED Value Chain
Upstream Midstream Downstream
LED Module/ Integration and
Components Luminaires
Lamp design services
Commodity-driven market Value-added market
9
Our Product Portfolio
Our portfolio
composed of
Lumenline family Lumenbeam family Lumenfacade family more than
400 products
cover multiple
lighting
applications and
Fluxwerx Profile Lumendome family Lumenarea family offer numerous
configurations
Fluxwerx View Lumencove family Lumenalpha family
Our Brands 10
High-performance, specification-grade LED luminaires for
indoor and outdoor lighting applications, including
commercial, institutional, and urban environments.
High-performance specification grade LED downlights for
flexible indoor lighting applications
LED luminaires for a range of urban, area, and
professional landscape lighting applications.
Specification-grade LED decorative lighting solutions for
hotels, museums, shops, and offices.
1 As of January 31, 2016
Specification-grade, LED general lighting for
commercial and institutional applications, including
workplace, education, and healthcare environments.11
LED Market Segments and Growth
Our product portfolios and brands operate
across all major segments including the fast
growing indoor segments
All figures, in millions of Dollars. Source : McKinsey : Lighting the way, 201212
TargetedVertical
Targeted SectorsMarkets
Landscape Museums Bridges
Hospitality Offices Transport
Retail Stores Facades Urban
Investor Presentation, July 201513 Creating Value through Growth
14
Creating Value Long-term
Leverage current sales
network
TOP LINE Channel expansion
GROWTH Portfolio expansion
Synergies
Value engineering
HOW WE
CREATE VALUE = GROSS MARGIN Improved manufacturing
efficiency
EXPANSION Material-cost reductions
Leverage our workforce
OPERATING and infrastructure
LEVERAGE15
Lumenpulse Delivers
Above-market Growth Rate
TOTAL REVENUE CAGR: 51%
FY 2013 – FY 2016
(millions CAN$)
For Fiscal 2017, we
expect revenues of
$230 to $240 million
and anticipate an
Adjusted EBITDA
margin of 12%-14%16
Financial Highlights 16
Improving Profitability
FY 2013 FY 2014 FY 2015 FY 2016 FY 2019 Goal
Lumenpulse
Products Adjusted 36% 44% 45% 49%
Gross Margin
Consolidated
Adjusted Gross 36% 42% 43% 48%
Margin
Adjusted
Operating 51% 41% 39% 40%
Expenses
Adjusted EBITDA (14)% 1% 4% 8% … 18%-20%
Our objective is to continue growing revenues at a growth rate exceeding the
growth rate for the LED general lighting market converging, over time,
towards market growth with an Adjusted EBITDA margin of approximately
18% to 20% within the next three years.18
The Lumenpulse Advantage
Customer Centric
Superior Products and Strong Design
Well-Established Sales Channels19
Focused on customer needs
Specification-Grade LED Solutions
Specifiers Looking for:
Product quality
Architects +
Technological features
Engineers
Lifetime economics
Lighting Designers Versatility
Controllability
Durability
Sustainability
Consistency & quality of light20 Our Customers Company Confidential
21
The Lumenpulse Advantage
Customer Centric
Superior Products and Strong Design
Well-Established Sales Channels22 A Key Competitive Advantage Combining innovative technology with strong industrial design
23
Proprietary and Patented Technologies
Our technology platform is expandable across product
categories and applications, providing an attractive opportunity
for expansion and growth.
98
Patents granted1
64
Patents pending1
1 As of April 30 201624
Innovative We are focused on developing innovative
products and technologies, especially important
in the specification-grade lighting market,
Technologies positioning us to outperform our competition
An embedded ASIC microchip
technology that eliminates the need
for power supplies, resulting in:
Durability (10-yr limited warranty)
Reduced size
Best-in class performance (100 lm/w)25 Enabling Smart Controls Turns existing electrical wiring into digital control network Reduces installation costs Facilitates conversion to LED Compatible with all common control standards
26
The Lumenpulse Advantage
Customer Centric
Superior Products and Strong Design
Well-Established Sales Channels27
Strong North American Sales Network
Our high performance and
sustainable specification-grade
LED lighting solutions are
promoted through a strong
network of agents and VARs
across the globe of which over
Complete
100 are located in North coverage
America28
Expanding International
Footprint
We have a growing number of agents
and VARs in Latin America, South-
East Asia, Middle East, Japan,
Australia, New Zealand and Europe.
Direct sales force and International
sales support teams in Revenues
France, the U.K. and Italy of $36.3M
for FY 2016
represent a solid base to
support and drive our global
network.
International revenues represent
25%29 Recent Acquisitions
Acquisitions 30
Transactions Objectives
Expanded our product portfolio with complementary LED
Fluxwerx - March 2016 ($60M1)
specification-grade products
Exenia - December 2015 ($14.9M1) Increased our addressable market from 20% to 80%
SDL Lighting - March 2015 ($3.2M) Increased our geographic coverage
Ariane Controls - February 2015 Expanded our LED expertise in new vertical segments
AlphaLED - July 2014 ($30.4M) Leveraged our proprietary technologies
Integrated management with deep industry knowledge
and aligned interest through Lumenpulse ownership
1 Excluding potential earn-out
2 Non-disclosed amount.31
Recent Acquisition
Florence, Italy
Deepening our offering of architectural indoor LED
lighting solutions for decorative illumination for a wide
range of retail, hospitality and museum environments.
Providing a strong entry point in Italy with a well-
established network of agents and VARs.
Adding a highly creative team of designers.32
Recent Acquisition
Vancouver, Canada
Deepening our offering of architectural indoor LED
lighting solutions for the fast-growing office and
educational market segments.
Adding a distinctive product offering with a minimalist
product design, thin profiles and see-through lenses.
Adding innovative, proprietary anidolic optical technology,
delivering superior optical performance and energy
efficiency.
Adding a product portfolio covered by 20 patents and 15
patents pending.33
Going Forward
Focus on integrating our recent
acquisitions
Execute on our product development
roadmap and organic growth.
Continue to invest in support of our
international expansion with a focus on
UK, France and Italy
Continue to increase production capacity
utilization and operating leverage to drive
profitability34 Notable projects
35 Birks Laval, Laval, QC, Canada Lighting Design: Aedifica
36 Boston Harbour Hotel, Boston, MA, USA Lighting Design: Lighting Design Collaborative
37 Burnham Building, Boston, MA, USA Lighting Design: Lam Partners Inc.
38 Cabrillo Bridge, San Diego, CA, USA Lighting Design: Illumination Arts
39 Cincinnatti City Hall, Cincinnatti, OH, USA Lighting Design: Eco Engineering
40 Délices Érable et Cie, Montréal, QC, Canada Lighting Design: Provencher Roy
41 Meubelplein Ekkersrijt, Eindhoven, Netherlands Lighting Design: Industrielicht
42 La Presse, Montreal, QC, Canada Lighting Design:
43 Lolë, Montreal, QC, Canada Lighting Design: Aedifica
Pont Lafayette, Lyon, France
45 Retailers Next, Rugby, Warwickshire, UK
46 US National Archives, Washington, DC, United States Lighting Design: Available Light
47 RJ Corman Bridge, Clarksville, Tennessee, United States Lighting Design: Tennessee Lighting Sales
48 Forward-looking Statements This document contains “forward-looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking information includes, but is not limited to, information with respect to our objectives and the strategies to achieve these objectives, as well as information with respect to our beliefs, plans, expectations, anticipations, estimates and intentions. This forward-looking information is identified by the use of terms and phrases such as “may”, “would”, “should”, “could”, “expect”, “intend”, “estimate”, “outlook”, “target”, “goal”, “guidance”, “anticipate”, “plan”, “foresee”, “believe”, or “continue”, the negative of these terms and similar terminology, including references to assumptions, although not all forward-looking information contains these terms and phrases. Statements with respect to potential benefits and synergies resulting from completed transactions and to future accretion to earnings per share constitute forward-looking information. Forward-looking information includes statements relating to annual targets, outlook, guidance and updates. See “Financial Outlook” in the Company’s Management’s Discussion & Analysis filed for the Fourth Quarter Fiscal 2016. Forward-looking information is provided for the purposes of assisting the reader in understanding the Company’s financial performance, financial position, cash flows, its business, operations, prospects and risks at a point in time, and to present information about Management’s current expectations and plans relating to the future and therefore the reader is cautioned that such information may not be appropriate for other purposes. Forward-looking information is based upon a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond our control, which could cause actual results to differ materially from those that are disclosed in or implied by such forward-looking information. These risks and uncertainties include, but are not limited to, the risk factors discussed under section “Risk Factors” in the Company’s Management’s Discussion & Analysis filed for the Fourth Quarter Fiscal 2016. Although the forward-looking information contained herein is based upon what we believe are reasonable assumptions, investors are cautioned against placing undue reliance on this information since actual results may vary from the forward-looking information. Certain assumptions made in preparing the forward-looking information and our objectives include: our ability to generate sufficient revenue while controlling our costs and expenses; our ability to manage our growth effectively; the absence of material adverse changes in our industry or the global economy; our ability to manage and integrate acquisitions; our ability to manage risks related to international expansion; our ability to raise sufficient debt or equity financing to support our business growth; our ability to maintain good business relationships with our agents and Value-Added Resellers (“VARs”); our ability to expand our sales and distribution infrastructure and our marketing; trends in our industry and markets; our ability to develop products and technologies that keep pace with the continuing changes in technology, evolving industry standards, new product introductions by competitors and changing client preferences and requirements; our ability to purchase components for our products at competitive prices; our ability to protect our intellectual property rights; the absence of intellectual property infringement or invalidity claims against us; our ability to retain key personnel; our ability to renew the leases for our existing facilities or find alternative facilities that meet our current and future needs, and assumptions used in preparing our Fiscal 2017 financial guidance under the section “Financial Outlook” in the Company’s Management’s Discussion & Analysis filed for the Fourth Quarter Fiscal 2016. Consequently, all of the forward-looking information contained herein is qualified by the foregoing cautionary statements, and there can be no guarantee that the results or developments that we anticipate will be realized or, even if substantially realized, that they will have the expected consequences or effects on our business, financial condition or results of operation. Unless otherwise noted or the context otherwise indicates, the forward-looking information contained herein is provided as of the date hereof, and we do not undertake to update or amend such forward-looking information whether as a result of new information, future events or otherwise, except as may be required by applicable law and the Company reserves the right to change, at any time at its sole discretion, its current practice of providing annual targets and guidance.
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