The Solutions Transformation Strategic push
lays the foundation to achieve sustainable growth and improved
margins
Belden provides new 2028 financial targets,
outlines a roadmap to achieving the 2025 Adjusted EPS target, and
announces a new $300 million share repurchase authorization
Belden Inc. (NYSE: BDC) (the “Company”), a leading global
supplier of network infrastructure and digitization solutions, will
host its 2024 Investor Day today at the Belden Customer Innovation
Center in Chicago, Illinois. Management will provide an update on
Belden’s Solutions transformation, key accelerators to drive
further growth and margin expansion, and new long-term targets that
support enhanced shareholder returns.
Ashish Chand, President and CEO said, “I am thrilled to
highlight the tremendous progress we have made as an organization
over the past few years by focusing on customer outcomes through
our solutions framework. Our transformation has been well received
by customers and partners, and I am excited to share how we will
continue to evolve the business and drive incremental growth.
Strong secular tailwinds combined with growing data needs and
complex network challenges provide Belden with the ideal
environment to drive solutions growth and differentiate our
offerings in the marketplace. As we advance our transformation
journey, growth in Belden Solutions will further enable improved
operating and financial performance.”
“At our last investor day in 2022, we set ambitious targets for
the organization to achieve through 2025. Despite destocking
headwinds that started last year, I am pleased to share that our
performance is on track to be consistent with our previously
articulated value creation framework,” said Dr. Chand.
“Importantly, we have a realistic path to achieve $8.00 of Adjusted
EPS in 2025, assuming modest improvement in demand next year,
consistent with an end to customer destocking. Progress towards
this target demonstrates the benefits of our Solutions
transformation and that our business can consistently grow and
increase earnings. I am extremely proud of our achievements and
confident in the future ahead as we advance our Solutions
framework.”
Long-Term Financial Targets
Driven by its strategic initiatives, the Company’s financial
targets through 2028 are as follows:
- Mid-single-digit annual revenue growth
- Incremental Adjusted EBITDA Margins between 25% to 30%
- Free cash flow margin approaching 10%
- Net leverage around 1.5 times
- Annual Adjusted EPS growth of 10% to 12%
New Share Repurchase Authorization
Belden announced today that its Board of Directors has approved
a new share repurchase authorization of $300 million of the
company's outstanding common stock. Combined with the $115 million
balance remaining from the previous authorization, Belden’s total
authorization now stands at $415 million.
"Execution of the Solutions transformation over the last several
years, combined with the company's operating discipline, are
delivering through-cycle revenue growth, margin improvement and
healthy free cash flow," said Jeremy Parks, Chief Financial
Officer. "We are focused on advancing our Solutions transformation,
and with our robust cash flow, we will continue to be able to
invest in the business while returning cash to shareholders through
repurchases."
Segments Renamed
As Belden continues to advance forward with solutions focused on
data infrastructure, today Belden announced a change to the names
of its two reportable segments. The former Industrial Automation
Solutions segment will be renamed Automation Solutions and the
former Enterprise Solutions segment will be renamed Smart
Infrastructure Solutions. The composition of the segments did not
change as a result of these name changes.
Webcast
The Company has scheduled a webcast of the 2024 Investor Day for
Thursday, September 12, 2024 at 10:00 a.m. Eastern Time. A link to
the live webcast can be found on the Company’s Investor Relations
website at https://investor.belden.com. A replay of the event and
related presentations will remain accessible in the investor
relations section of the Company’s website for a limited time.
Non-GAAP Measures
Our financial targets include non-GAAP measures such as Adjusted
EPS, Adjusted EBITDA margins, free cash flow margin and net
leverage. All references to Adjusted EPS within this earnings
release refer to adjusted net income per diluted share attributable
to Belden stockholders. We define free cash flow as net cash from
operating activities adjusted for capital expenditures net of the
proceeds from the disposal of assets. Free cash flow margin is
calculated as free cash flow divided by revenues during the
comparable period. Net leverage is calculated as (A) total debt
less cash and cash equivalents divided by (B) the sum of trailing
twelve months Adjusted EBITDA plus trailing twelve months
stock-based compensation expense.
Our financial targets are based upon information currently
available regarding events and conditions that will impact our
future operating results. In particular, our results are subject to
the factors listed under "Forward-Looking Statements" in this
release. In addition, our actual results are likely to be impacted
by other additional events for which information is not available,
such as asset impairments, adjustments related to acquisitions and
divestitures, severance, restructuring, and acquisition integration
costs, gains (losses) recognized on the disposal of assets, gains
(losses) on debt extinguishment, discontinued operations, and other
gains (losses) related to events or conditions that are not yet
known. Therefore we are unable to provide quantitative
reconciliations of forward-looking non-GAAP financial measures,
such as our financial targets, to the most directly comparable GAAP
financial measures, because it is difficult to reliably predict or
estimate the relevant components without unreasonable effort due to
future uncertainties that may potentially have a significant impact
on such calculations, and providing them may imply a degree of
precision that would be confusing or potentially misleading.
Forward-Looking Statements
This release contains, and any statements made by us concerning
the subject matter of this release may contain, forward-looking
statements, including our outlook for the remainder of 2024 and
beyond. Forward-looking statements also include any statements
regarding future financial performance (including revenues, growth,
expenses, earnings, margins, cash flows, dividends, capital
expenditures and financial condition), plans and objectives, and
related assumptions. In some cases these statements are
identifiable through the use of words such as “anticipate,”
“believe,” “estimate,” “forecast,” “guide,” “expect,” “intend,”
“plan,” “project,” “target,” “can,” “could,” “may,” “should,”
“will,” “would” and similar expressions. Forward-looking statements
reflect management’s current beliefs and expectations and are not
guarantees of future performance. Actual results may differ
materially from those suggested by any forward-looking statements
for a number of reasons, including, without limitation: the impact
of a challenging global economy, including the impact of inflation,
or a downturn in served markets; volatility in credit and foreign
exchange markets; the competitiveness of the global markets in
which we operate; the inability of the Company to develop and
introduce new products; competitive responses to our products; the
inability to execute and realize the expected benefits from
strategic initiatives (including revenue growth, cost control, and
productivity improvement programs); difficulty in forecasting
revenues due to the unpredictable timing of orders related to
customer projects as well as the impacts of channel inventory;
foreign and domestic political, economic and other uncertainties,
including changes in currency exchange rates; the impact of
disruptions in the global supply chain, including the inability to
timely obtain raw materials and components in sufficient quantities
on commercially reasonable terms; the inability to achieve our
strategic priorities in emerging markets; the impact of changes in
global tariffs and trade agreements; the presence of substitute
products in the marketplace; disruptions in the Company’s
information systems including due to cyber-attacks; inflation and
changes in the price and availability of raw materials leading to
higher input and labor costs; the possibility of future epidemics
or pandemics; changes in tax laws and variability in the Company’s
quarterly and annual effective tax rates; the increased prevalence
of cloud computing; the inability to successfully complete and
integrate acquisitions, in furtherance of the Company’s strategic
plan, as well as the inability to accurately forecast the financial
impacts of acquisitions; the inability to retain key employees;
disruption of, or changes in, the Company’s key distribution
channels; the presence of activists proposing certain actions by
the Company; perceived or actual product failures; the impact of
regulatory requirements and other legal compliance issues;
inability to satisfy the increasing expectations with respect to
environmental, social and governance matters; assertions that the
Company violates the intellectual property of others and the
ownership of intellectual property by competitors and others that
prevents the use of that intellectual property by the Company;
risks related to the use of open source software; the impairment of
goodwill and other intangible assets and the resulting impact on
financial performance; disruptions and increased costs attendant to
collective bargaining groups and other labor matters; and other
factors.
For a more complete discussion of risk factors, please see our
Annual Report on Form 10-K for the period ended December 31, 2023,
filed with the SEC on February 13, 2024. Although the content of
this release represents our best judgment as of the date of this
report based on information currently available and reasonable
assumptions, we give no assurances that the expectations will prove
to be accurate. Deviations from the expectations may be material.
For these reasons, Belden cautions readers to not place undue
reliance on these forward-looking statements, which speak only as
of the date made. Belden disclaims any duty to update any
forward-looking statements as a result of new information, future
developments, or otherwise, except as required by law.
About Belden
Belden Inc. delivers the infrastructure that makes the digital
journey simpler, smarter and secure. We’re moving beyond
connectivity, from what we make to what we make possible through a
performance-driven portfolio, forward-thinking expertise and
purpose-built solutions. With a legacy of quality and reliability
spanning 120-plus years, we have a strong foundation to continue
building the future. We are headquartered in St. Louis and have
manufacturing capabilities in North America, Europe, Asia, and
Africa. For more information, visit us at www.belden.com; follow us
on Facebook, LinkedIn and Twitter.
BDC-Financial
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version on businesswire.com: https://www.businesswire.com/news/home/20240912943543/en/
Belden Investor Relations Aaron Reddington, CFA
(317) 219-9359 Investor.Relations@Belden.com
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