Smart Meters - Customers & Distributors - Sensus
Deutsche Bank 2011 Alternative Energy, Utilities & Power Conference May 11, 2011 0
• Peter Mainz
– CEO and President
• Jim Hilty
– Interim CFO
1
Safe Harbor Statement The statements made during this presentation, other than historical facts, are made in reliance on the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and are subject to change at any time. These statements reflect the Company’s current expectations regarding its financial position, revenues, cash flow and other operating results, business strategy, financing plans, forecasted trends related to the markets in which the Company operates, legal proceedings and similar matters. We cannot assure you that the expectations expressed or implied in these forward-looking statements will turn out to be accurate. Our actual results could be materially different from our operations because of various risks. These risks include any future restatements of our consolidated financial statements, our inability to maintain effective internal controls over financial reporting, our susceptibility to macroeconomic downturns in the United States and abroad, conditions in the residential, commercial and industrial construction markets and in the automotive industry, our dependence on new product development and intellectual property, and our dependence on independent distributors and third-party contract manufacturers, automotive vehicle production levels and schedules, our substantial financial leverage, debt service and other cash requirements, liquidity constraints and risks related to future growth and expansion. Other important risk factors that could cause actual events or results to differ from those contained or implied in the forward-looking statements include, without limitation, our ability to integrate acquired companies, general economic and business conditions, competition, adverse changes in the regulatory or legislative environment in which we operate, customer cancellations and other factors beyond the Company’s control. We encourage you to review our annual report on Form 10-K/A, which discusses in greater detail our results of operations for the most recently completed fiscal year and consider the risks that relate to any of our forward-looking statements. 2
Our Global Vision
The leading provider of innovative technology solutions that enable intelligent use and conservation of critical water and energy resources 3
Sensus at a Glance Scope z
10,000 Customers
z
42 Locations on 5 Continents
z
Over 3,600 Employees
z
$46 million R&D spend(1) $865 million in LTM Net Sales(1)
Utility Customers z
Electric
z
Gas
z
Water
z
Heat
(1)
4
Represents LTM period ended 12/31/2010.
Technology Portfolio z
Communications
Market Position z
Electric: Leading Market Position in North America
z
AMI Deployment: Leading Market Position in North America
z
Water: Leading Market Position Globally
z
Gas: Leading Market Position in North America
Network z
Smart Meters
z
Advanced Metrology
z
Distribution Automation
z
Demand Response
z
Home Area Network
z
Smart Grid Lighting
z
Services
z
Software
Compelling Global Market Drivers z
Increasing demand and rising costs for energy and water − 1 billion increase in world population by 2020 − 40% greater energy consumption and 53% more water used by 2030
z
Growing energy/water consumption stressing aging utility infrastructure − $35 trillion in global infrastructure expenditures over next 20 years
z
Expanding use of alternative/renewable energy − 32% of electricity generated from renewable energy by 2035 − 40% of total vehicle sales projected to be electric vehicles by 2035
z
Active regulatory environments − 50% of U.S. states have regulatory mandated renewable and energy efficiency goals
z
Declining world water availability and accessibility − $274 billion of new water infrastructure in the U.S. over the next 20 years
Sources: International Energy Agency - World Energy Outlook 2010, Pike research Data Analytics Report 2010, United Nations World Population Prospects, UNFCCC, World Bank, U.S. EPA
5
Evolution of Smart Grid Past
Manual Meters
Yesterday
Automated Meter Reading (AMR)
Today & the Future Smart Grid / Advanced Metering Infrastructure (AMI)
z
Communications: None
z
z
z
Technology: Mechanical, electromechanical, or solid state
One-way communication of usage from meter to utility
Two-way communication between meter and utility (or third party applications)
z
Capable of more frequent usage measurements than manual meters
z
Provides demand patterns, trends and other consumption data
z
Communications: One-Way
z
Communications: Two-Way
z
Technology: RF or PLC
z
z
Reading: On-site, remote walkby/drive-by, remote fixed site
Technology: Direct point-to-multipoint RF, mesh network, PLC, or GPRS, open protocols (e.g. ZigBee, IP)
z
Other Capabilities: None
z
Reading: Real-time monitoring
z
Benefits: Reduced meter reading costs, enhanced accuracy and customer service
z
Other Capabilities: Reconnect service, distribution automation, demand response and renewable integration
z
Benefits: Enhanced energy efficiency, further cost reduction and consumer empowerment
z
Reading: On-site only
z
Other Capabilities: None
z
Benefits: Equitable allocation of cost
6
Smart Grid Transition Opportunity is Large and Early Stage North American Meter Installed Base
z
Only 35 million of the 337 million meters in North America are Smart Meters
z
Electric meter installed base is leading the transition
z
Smart water metering opportunity only in early stages
z
Smart gas metering is a largely undefined market opportunity
z
Less than 10% of the 2.7 billion meters globally are AMR-enabled meters and only ~1% are Smart Meters
(Units in millions)
360
337
Opportunity is ~90% of the market 240 302
160 120
100 127
77 98
0
33 Electric
77
2 Water (1)
Smart Meters
1,401
906
35
Gas
Total (2)
Traditional Meters
439
2,746
Global Meter Installed Base (units in millions) Sources: “The Scott AMR Report: AMR Deployments in North America, 4th Quarter 2010”; IMS Research (2010); and Management estimates. (1) Includes AMI-enabled (two-way communications) meters. (2) Includes non-automated and AMR-enabled (one-way communications) meters.
7
Sensus -- Key Business Highlights
Compelling Industry Fundamentals Driving Growth Proven Electric Smart Grid Success with Strong Momentum Market Leadership Position in Water Metering Frontrunner in Emerging Smart Water Opportunity Differentiated Smart Grid Offering Long-standing Blue Chip Customer Base Global Reach, Global Growth
8
Compelling Industry Fundamentals Driving Growth Fiscal Year 2004 Net Sales (Fiscal year ended March 31)
LTM December 2010 Net Sales
Smart Grid Offerings 11% $59 million (1)
All Other 17%
2004 – 2010 CAGR: Smart Grid Market:
Gas Metering 12%
Smart Grid Offerings 35% $306 million
17.8%(2)
Gas Metering 9%
All Other 15%
(1)
Sensus Smart Grid Offerings: Water Metering 60%
$529 million Note: (1) (2)
27.5% Water Metering 41%
$865 million
Smart Grid Offerings, Water Metering and Gas Metering make up the “Utility Infrastructure and Related Communication Systems” reporting segment. The “All Other” reporting segment includes Precision Die Casting and Clamps & Couplings. Scott Report 4Q 2010.
~85% of LTM Net Sales dedicated to growing utility industry with focus on Smart Grid offerings 9
Proven Electric Smart Grid Success with Strong Momentum z
z
Sensus is leading the market in wins and shipments for both Smart Meters and communications
Sensus Electric SmartPoint™ Shipments (Units in millions)
8.0
Electric Smart Meter market share has increased from 3% to 25% in two years
z
Market share growth driven by innovative technology solutions, including FlexNet™
z
Three largest U.S. investor-owned utilities (IOUs) chose Sensus
z
6.9 6.2 6.6 5.3
6.0 4.0 2.0
7.6
1.1 1.5 0.5 0.8
2.1
2.8
3.5
4.2
0.0 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09 3/10 6/10 9/10 12/10 3/11 Cumulative Electric SmartPoints Shipped
Focus on expanding market penetration from IOUs to municipal and cooperative utilities 2010 Cumulative AMI Deployments North America(1)
2010 Market Share of Vendor Selections, U.S.(1) Meter manufacturer Other 9% GE Energy 20%
Communications technology
#1
Other 14%
Sensus 25%
Landis +Gyr 16%
Silver Spring 29%
Other 15%
Silver Spring 23%
Landis +Gyr 14%
#2
#3 Landis +Gyr 23%
Itron 23%
Sensus 20%
Size: 5.7 million units (1)
10
Source: Scott Report, Pike Research; Percentages in pie charts based on unit sales.
Itron 21%
Itron 14%
Sensus 20% Elster 14%
Size: 35 million units
Market Leadership Position in Water Metering 2010 Water Metrology Market Share Global Other 42%
17%
2009 – 2010 growth: z Sensus – 8.8% Neptune z Market – 4.6%
North America
#1
Other 9% Elster 12%
Europe
2009 – 2010 growth: Sensus – 8.0% Itron z Market – 1.7% z
18%
30%
#2
Other 40%
Badger 6%
Badger 23%
Elster 16% Neptune 7%
Size: $504 million
2010 North America Water AMR / AMI Market Share z
#4
Neptune 25%
Aclara 11%
Sensus market share increased from 12% in 2009 to 16% in 2010
#1
z
Market currently dominated by AMR walk-by / drive-by communication
z
Market is clearly moving to Smart Grid for water
z
Sensus is clearly #1 in Smart Grid for water
Other 50% 50%
Itron 18%
Size: 5.3 million units
Elster 13%
Size: $838 million
2010 North America Water Smart Grid Market Share
Badger 19%
16%
Diehl 12%
26%
Itron 12%
Size: $2.1 billion
Other 11%
17%
#2
Size: ~2.0 million units
Source: IMS Research Report 2009, 2010; The Scott Report: AMR Deployments in North America; and management estimates. Note: Market shares based on end points and total revenue.
Leading market share in key North American and European markets positions Sensus for global expansion into growing global water conservation markets 11
Frontrunner in Emerging Smart Water Opportunity z
Water metering market transitioning to Smart Metering − Water ramp closely follows electric, and presently accelerating − Economic opportunity similar to electric despite 37% lower installed base
z
Sensus is building the Smart Grid for water − Over 1 million water SmartPoint™ devices installed over the past 6 quarters − Over 100 individual water utility Smart Grid projects completed or in process
z
Enabling Smart Grid for Water by deploying innovative technology − Sensus communications network − iPERL™ water management device − Distribution Automation for water − Leak detection at end point and distribution network
OMNI F2
iPERL System
Cumulative Sensus Water SmartPoint™ Shipments (Units in millions)
1.2 0.8 0.4
0.2
0.2
0.3
0.4
0.5
3/08
6/08
9/08
12/08
3/09
0.5
0.6
0.6
6/09
9/09
12/09
0.7
0.9
1.1
1.1
1.2
9/10
12/10
3/11
0.0 3/10
6/10
Sensus is a leader in Water Smart Grid deployments 12
Customer Portal
Differentiated Smart Grid Offering Advanced long-range, high-powered radio communications network
Extensive portfolio of advanced metrology products for all utility types
z
Protected, primary-use FCC licensed radio spectrum for utilities’ “mission critical” activities
z
iCON® – advanced solid state electric meter iPERL™ – next generation water measurement technology SONIX® – ultrasonic gas meter
z z
Distribution Automation devices and software
z
Interfaces with utility SCADA system and integrates with all major distribution automation equipment manufacturers
Fully integrated solutions utilizing open standards (e.g. ZigBee, IP)
z
Communications, software, metrology, distribution automation devices, demand response and Home Area Network solutions
z
Minimizes utility’s financial, operational and technological risk
Demand Response and Home Area Network solutions
z
Connect directly to network or through electric meter via other communications
Smart Grid Lighting
z
Induction lighting and long range radio supervisory control
Flexible, scalable and adaptable software, network and data solutions delivery
13
Critical Infrastructure Class Network Advantages z Advanced long-range, high-power radio 9
communications technology
z Protected, primary-use licensed radio spectrum 9 z Software-defined radio 9
9z Fast, dedicated application-specific communications channels
9z Resilient, minimal infrastructure 9z Advanced security 9z Open, interoperable standards based
communications (e.g. IP, ZigBee) covering all utility applications
14
Global Reach, Global Technology z
The Sensus communications network deployed in North America has now been successfully deployed around the globe − Multiple global engagements with utilities and partners − Phase I deployments in three European countries (UK, Ireland, Bulgaria)
z
Technology addresses diverse customer needs − National scale deployments require a ubiquitous, critical infrastructure-grade network on dedicated spectrum − U.K. Nationwide Smart Metering Initiative – with ecosystem partners: Arqiva, British Telecom and Detica − Expected to be awarded in the middle of 2012 − 30 million homes to be deployed by end of 2019 − Network build commences Q1 2013
z
Global multiple applications − Electric, water, gas, infrastructure control and consumer applications and in home displays
15
Long-standing Blue Chip Customer Base
Approximately 10,000 utility customers around the world 16
Global Reach, Global Growth Sales presence on five continents with over 3,600 people Net Sales by Geography ($ in millions)
LTM Dec(1) $177 FY04 $152 CAGR:
2.3%
LTM Dec(1) $49 FY04 $9 CAGR:
(1)
LTM Dec(1) $595 FY04 $349 CAGR:
8.2%
28.5%
LTM Dec(1) $28 FY04 $12
LTM Dec(1) $16 FY04 $7
CAGR:
CAGR:
13.4%
13.0%
Represents LTM period ended 12/31/2010.
• 300 Smart Grid projects completed or in-process • 12 million endpoints under long-term contract 17
z z z
37 States in the U.S. 2 Canadian Provinces 3 European countries
Highlights 9Leader in NA Electric Smart Grid metering market • Sensus delivered 8 million to date
9Leader in the rapidly evolving Water Smart Grid market • Sensus delivered 1 million to date
9Leading market positions in mature core water and gas metrology
• Only 33 million smart electric meters installed out of 160 million North American installed base • Global potential to convert 1.3 billion meters
• Only 2 million smart water meters installed out of 100 million North American installed base • Global potential to convert 1 billion meters
• Established metrology business consistently delivers Revenue, EBITDA and Cash Flow • Annual revenues > $400 million
• Long-term electric smart grid contracts provide 9Future revenue visibility
18
visibility for future business and revenue • Include long-term contracts with the 3 largest North American electric utilities (by market capitalization)
Q&A
19
• Peter Mainz
– CEO and President
• Jim Hilty
– Interim CFO
1
Safe Harbor Statement The statements made during this presentation, other than historical facts, are made in reliance on the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties and are subject to change at any time. These statements reflect the Company’s current expectations regarding its financial position, revenues, cash flow and other operating results, business strategy, financing plans, forecasted trends related to the markets in which the Company operates, legal proceedings and similar matters. We cannot assure you that the expectations expressed or implied in these forward-looking statements will turn out to be accurate. Our actual results could be materially different from our operations because of various risks. These risks include any future restatements of our consolidated financial statements, our inability to maintain effective internal controls over financial reporting, our susceptibility to macroeconomic downturns in the United States and abroad, conditions in the residential, commercial and industrial construction markets and in the automotive industry, our dependence on new product development and intellectual property, and our dependence on independent distributors and third-party contract manufacturers, automotive vehicle production levels and schedules, our substantial financial leverage, debt service and other cash requirements, liquidity constraints and risks related to future growth and expansion. Other important risk factors that could cause actual events or results to differ from those contained or implied in the forward-looking statements include, without limitation, our ability to integrate acquired companies, general economic and business conditions, competition, adverse changes in the regulatory or legislative environment in which we operate, customer cancellations and other factors beyond the Company’s control. We encourage you to review our annual report on Form 10-K/A, which discusses in greater detail our results of operations for the most recently completed fiscal year and consider the risks that relate to any of our forward-looking statements. 2
Our Global Vision
The leading provider of innovative technology solutions that enable intelligent use and conservation of critical water and energy resources 3
Sensus at a Glance Scope z
10,000 Customers
z
42 Locations on 5 Continents
z
Over 3,600 Employees
z
$46 million R&D spend(1) $865 million in LTM Net Sales(1)
Utility Customers z
Electric
z
Gas
z
Water
z
Heat
(1)
4
Represents LTM period ended 12/31/2010.
Technology Portfolio z
Communications
Market Position z
Electric: Leading Market Position in North America
z
AMI Deployment: Leading Market Position in North America
z
Water: Leading Market Position Globally
z
Gas: Leading Market Position in North America
Network z
Smart Meters
z
Advanced Metrology
z
Distribution Automation
z
Demand Response
z
Home Area Network
z
Smart Grid Lighting
z
Services
z
Software
Compelling Global Market Drivers z
Increasing demand and rising costs for energy and water − 1 billion increase in world population by 2020 − 40% greater energy consumption and 53% more water used by 2030
z
Growing energy/water consumption stressing aging utility infrastructure − $35 trillion in global infrastructure expenditures over next 20 years
z
Expanding use of alternative/renewable energy − 32% of electricity generated from renewable energy by 2035 − 40% of total vehicle sales projected to be electric vehicles by 2035
z
Active regulatory environments − 50% of U.S. states have regulatory mandated renewable and energy efficiency goals
z
Declining world water availability and accessibility − $274 billion of new water infrastructure in the U.S. over the next 20 years
Sources: International Energy Agency - World Energy Outlook 2010, Pike research Data Analytics Report 2010, United Nations World Population Prospects, UNFCCC, World Bank, U.S. EPA
5
Evolution of Smart Grid Past
Manual Meters
Yesterday
Automated Meter Reading (AMR)
Today & the Future Smart Grid / Advanced Metering Infrastructure (AMI)
z
Communications: None
z
z
z
Technology: Mechanical, electromechanical, or solid state
One-way communication of usage from meter to utility
Two-way communication between meter and utility (or third party applications)
z
Capable of more frequent usage measurements than manual meters
z
Provides demand patterns, trends and other consumption data
z
Communications: One-Way
z
Communications: Two-Way
z
Technology: RF or PLC
z
z
Reading: On-site, remote walkby/drive-by, remote fixed site
Technology: Direct point-to-multipoint RF, mesh network, PLC, or GPRS, open protocols (e.g. ZigBee, IP)
z
Other Capabilities: None
z
Reading: Real-time monitoring
z
Benefits: Reduced meter reading costs, enhanced accuracy and customer service
z
Other Capabilities: Reconnect service, distribution automation, demand response and renewable integration
z
Benefits: Enhanced energy efficiency, further cost reduction and consumer empowerment
z
Reading: On-site only
z
Other Capabilities: None
z
Benefits: Equitable allocation of cost
6
Smart Grid Transition Opportunity is Large and Early Stage North American Meter Installed Base
z
Only 35 million of the 337 million meters in North America are Smart Meters
z
Electric meter installed base is leading the transition
z
Smart water metering opportunity only in early stages
z
Smart gas metering is a largely undefined market opportunity
z
Less than 10% of the 2.7 billion meters globally are AMR-enabled meters and only ~1% are Smart Meters
(Units in millions)
360
337
Opportunity is ~90% of the market 240 302
160 120
100 127
77 98
0
33 Electric
77
2 Water (1)
Smart Meters
1,401
906
35
Gas
Total (2)
Traditional Meters
439
2,746
Global Meter Installed Base (units in millions) Sources: “The Scott AMR Report: AMR Deployments in North America, 4th Quarter 2010”; IMS Research (2010); and Management estimates. (1) Includes AMI-enabled (two-way communications) meters. (2) Includes non-automated and AMR-enabled (one-way communications) meters.
7
Sensus -- Key Business Highlights
Compelling Industry Fundamentals Driving Growth Proven Electric Smart Grid Success with Strong Momentum Market Leadership Position in Water Metering Frontrunner in Emerging Smart Water Opportunity Differentiated Smart Grid Offering Long-standing Blue Chip Customer Base Global Reach, Global Growth
8
Compelling Industry Fundamentals Driving Growth Fiscal Year 2004 Net Sales (Fiscal year ended March 31)
LTM December 2010 Net Sales
Smart Grid Offerings 11% $59 million (1)
All Other 17%
2004 – 2010 CAGR: Smart Grid Market:
Gas Metering 12%
Smart Grid Offerings 35% $306 million
17.8%(2)
Gas Metering 9%
All Other 15%
(1)
Sensus Smart Grid Offerings: Water Metering 60%
$529 million Note: (1) (2)
27.5% Water Metering 41%
$865 million
Smart Grid Offerings, Water Metering and Gas Metering make up the “Utility Infrastructure and Related Communication Systems” reporting segment. The “All Other” reporting segment includes Precision Die Casting and Clamps & Couplings. Scott Report 4Q 2010.
~85% of LTM Net Sales dedicated to growing utility industry with focus on Smart Grid offerings 9
Proven Electric Smart Grid Success with Strong Momentum z
z
Sensus is leading the market in wins and shipments for both Smart Meters and communications
Sensus Electric SmartPoint™ Shipments (Units in millions)
8.0
Electric Smart Meter market share has increased from 3% to 25% in two years
z
Market share growth driven by innovative technology solutions, including FlexNet™
z
Three largest U.S. investor-owned utilities (IOUs) chose Sensus
z
6.9 6.2 6.6 5.3
6.0 4.0 2.0
7.6
1.1 1.5 0.5 0.8
2.1
2.8
3.5
4.2
0.0 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09 3/10 6/10 9/10 12/10 3/11 Cumulative Electric SmartPoints Shipped
Focus on expanding market penetration from IOUs to municipal and cooperative utilities 2010 Cumulative AMI Deployments North America(1)
2010 Market Share of Vendor Selections, U.S.(1) Meter manufacturer Other 9% GE Energy 20%
Communications technology
#1
Other 14%
Sensus 25%
Landis +Gyr 16%
Silver Spring 29%
Other 15%
Silver Spring 23%
Landis +Gyr 14%
#2
#3 Landis +Gyr 23%
Itron 23%
Sensus 20%
Size: 5.7 million units (1)
10
Source: Scott Report, Pike Research; Percentages in pie charts based on unit sales.
Itron 21%
Itron 14%
Sensus 20% Elster 14%
Size: 35 million units
Market Leadership Position in Water Metering 2010 Water Metrology Market Share Global Other 42%
17%
2009 – 2010 growth: z Sensus – 8.8% Neptune z Market – 4.6%
North America
#1
Other 9% Elster 12%
Europe
2009 – 2010 growth: Sensus – 8.0% Itron z Market – 1.7% z
18%
30%
#2
Other 40%
Badger 6%
Badger 23%
Elster 16% Neptune 7%
Size: $504 million
2010 North America Water AMR / AMI Market Share z
#4
Neptune 25%
Aclara 11%
Sensus market share increased from 12% in 2009 to 16% in 2010
#1
z
Market currently dominated by AMR walk-by / drive-by communication
z
Market is clearly moving to Smart Grid for water
z
Sensus is clearly #1 in Smart Grid for water
Other 50% 50%
Itron 18%
Size: 5.3 million units
Elster 13%
Size: $838 million
2010 North America Water Smart Grid Market Share
Badger 19%
16%
Diehl 12%
26%
Itron 12%
Size: $2.1 billion
Other 11%
17%
#2
Size: ~2.0 million units
Source: IMS Research Report 2009, 2010; The Scott Report: AMR Deployments in North America; and management estimates. Note: Market shares based on end points and total revenue.
Leading market share in key North American and European markets positions Sensus for global expansion into growing global water conservation markets 11
Frontrunner in Emerging Smart Water Opportunity z
Water metering market transitioning to Smart Metering − Water ramp closely follows electric, and presently accelerating − Economic opportunity similar to electric despite 37% lower installed base
z
Sensus is building the Smart Grid for water − Over 1 million water SmartPoint™ devices installed over the past 6 quarters − Over 100 individual water utility Smart Grid projects completed or in process
z
Enabling Smart Grid for Water by deploying innovative technology − Sensus communications network − iPERL™ water management device − Distribution Automation for water − Leak detection at end point and distribution network
OMNI F2
iPERL System
Cumulative Sensus Water SmartPoint™ Shipments (Units in millions)
1.2 0.8 0.4
0.2
0.2
0.3
0.4
0.5
3/08
6/08
9/08
12/08
3/09
0.5
0.6
0.6
6/09
9/09
12/09
0.7
0.9
1.1
1.1
1.2
9/10
12/10
3/11
0.0 3/10
6/10
Sensus is a leader in Water Smart Grid deployments 12
Customer Portal
Differentiated Smart Grid Offering Advanced long-range, high-powered radio communications network
Extensive portfolio of advanced metrology products for all utility types
z
Protected, primary-use FCC licensed radio spectrum for utilities’ “mission critical” activities
z
iCON® – advanced solid state electric meter iPERL™ – next generation water measurement technology SONIX® – ultrasonic gas meter
z z
Distribution Automation devices and software
z
Interfaces with utility SCADA system and integrates with all major distribution automation equipment manufacturers
Fully integrated solutions utilizing open standards (e.g. ZigBee, IP)
z
Communications, software, metrology, distribution automation devices, demand response and Home Area Network solutions
z
Minimizes utility’s financial, operational and technological risk
Demand Response and Home Area Network solutions
z
Connect directly to network or through electric meter via other communications
Smart Grid Lighting
z
Induction lighting and long range radio supervisory control
Flexible, scalable and adaptable software, network and data solutions delivery
13
Critical Infrastructure Class Network Advantages z Advanced long-range, high-power radio 9
communications technology
z Protected, primary-use licensed radio spectrum 9 z Software-defined radio 9
9z Fast, dedicated application-specific communications channels
9z Resilient, minimal infrastructure 9z Advanced security 9z Open, interoperable standards based
communications (e.g. IP, ZigBee) covering all utility applications
14
Global Reach, Global Technology z
The Sensus communications network deployed in North America has now been successfully deployed around the globe − Multiple global engagements with utilities and partners − Phase I deployments in three European countries (UK, Ireland, Bulgaria)
z
Technology addresses diverse customer needs − National scale deployments require a ubiquitous, critical infrastructure-grade network on dedicated spectrum − U.K. Nationwide Smart Metering Initiative – with ecosystem partners: Arqiva, British Telecom and Detica − Expected to be awarded in the middle of 2012 − 30 million homes to be deployed by end of 2019 − Network build commences Q1 2013
z
Global multiple applications − Electric, water, gas, infrastructure control and consumer applications and in home displays
15
Long-standing Blue Chip Customer Base
Approximately 10,000 utility customers around the world 16
Global Reach, Global Growth Sales presence on five continents with over 3,600 people Net Sales by Geography ($ in millions)
LTM Dec(1) $177 FY04 $152 CAGR:
2.3%
LTM Dec(1) $49 FY04 $9 CAGR:
(1)
LTM Dec(1) $595 FY04 $349 CAGR:
8.2%
28.5%
LTM Dec(1) $28 FY04 $12
LTM Dec(1) $16 FY04 $7
CAGR:
CAGR:
13.4%
13.0%
Represents LTM period ended 12/31/2010.
• 300 Smart Grid projects completed or in-process • 12 million endpoints under long-term contract 17
z z z
37 States in the U.S. 2 Canadian Provinces 3 European countries
Highlights 9Leader in NA Electric Smart Grid metering market • Sensus delivered 8 million to date
9Leader in the rapidly evolving Water Smart Grid market • Sensus delivered 1 million to date
9Leading market positions in mature core water and gas metrology
• Only 33 million smart electric meters installed out of 160 million North American installed base • Global potential to convert 1.3 billion meters
• Only 2 million smart water meters installed out of 100 million North American installed base • Global potential to convert 1 billion meters
• Established metrology business consistently delivers Revenue, EBITDA and Cash Flow • Annual revenues > $400 million
• Long-term electric smart grid contracts provide 9Future revenue visibility
18
visibility for future business and revenue • Include long-term contracts with the 3 largest North American electric utilities (by market capitalization)
Q&A
19
